HANCOCK JOHN SERIES INC, 485BPOS, 1996-02-28

HANCOCK JOHN SERIES INC
485BPOS, 1996-02-28

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<PAGE> 1

As filed with the Securities and Exchange Commission on February 28, 1995.

File Nos. 33-16048; 811-5254

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. 21 / X /

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 / X /

Amendment No. 23 / X /
(Check appropriate box or boxes)

JOHN HANCOCK SERIES, INC.
---------------------------------------------------------------------
(Exact name of registrant as specified in charter)

101 Huntington Avenue, Boston, Massachusetts 02199-7603
---------------------------------------------------------------------
(Address of principal executive office) Zip Code

Registrant's Telephone Number, including Area Code: (617) 375-1700
---------------------------------------------------------------------
Thomas H. Drohan, John Hancock Advisers, Inc.
101 Huntington Avenue, Boston, MA 02199

It is proposed that this filing will become effective (check
appropriate box)

/ / immediately upon filing pursuant to paragraph (b), or

/ X / on March 1, 1996 pursuant to paragraph (b), or

/ / 60 days after filing pursuant (a), or

/ / on (date) pursuant to paragraph (a) of
Rule 485

The Registrant has registered an indefinite number of shares pursuant to Rule
24f-2 under the Investment Company Act of 1940, as amended. The Registrant
filed the notice required by Rule 24f-2 for its most recent fiscal year on or
about December 26, 1995.
<PAGE> 2

JOHN HANCOCK SERIES, INC.

CROSS REFERENCE SHEET

__________________________

<TABLE>
Pursuant to Rule 485(b) under the Securities Act of 1993

<CAPTION>
ITEM NUMBER
FORM N-1A STATEMENT OF ADDITIONAL
PART A PROSPECTUS CAPTION INFORMATION CAPTION
___________________________________________________________________

<C> <S> <C>
1 Front Cover Page *

2 Expense Information; The *
Fund's Expenses; Share
Price

3 The Fund's Financial *
Highlights; Performance

4 Investment Objective and *
Policies; Organization and
Management of the Fund

5 Organization and *
Management of the Fund;
The Fund's Expenses; Back
Cover Page

6 Organization and *
Management of the Fund;
Dividends and Taxes; How
to Buy Shares; How to
Redeem Shares; Additional
Services and Programs

7 How to Buy Shares; Share *
Price; Additional Services
and Programs; The Fund's
Expenses; Back Cover Page

8 How to Redeem Shares *

9 Not Applicable *

10 * Front Cover Page
</TABLE>

<PAGE> 3

<TABLE>
<CAPTION>
ITEM NUMBER
FORM N-1A STATEMENT OF ADDITIONAL
PART A PROSPECTUS CAPTION INFORMATION CAPTION
___________________________________________________________________

<C> <S> <C>
11 * Table of Contents

12 * Organization of the
Corporation

13 * Investment Objective
and Policies; Certain
Investment Practices;
Investment
Restrictions

14 * Those Responsible for
Management

15 * Those Responsible for
Management

16 * Investment Advisory
and Other Services;
Distribution
Contracts; Transfer
Agent Services;
Custody of Portfolio;
Independent Auditors

17 * Brokerage Allocation

18 * Description of
Corporation's Shares

19 * Net Asset Value;
Additional Services
and Programs

20 * Tax Status

21 * Distribution Contract

22 * Calculation of
Performance

23 * Financial Statements

</TABLE>

-2-
<PAGE> 4

JOHN HANCOCK
MONEY MARKET
FUND

CLASS A AND CLASS B SHARES
PROSPECTUS

MARCH 1, 1996

- --------------------------------------------------------------------------------

<TABLE>
TABLE OF CONTENTS

<CAPTION>
Page
----
<S> <C>
Expense Information................................................................... 2
The Fund's Financial Highlights....................................................... 3
Yield Information..................................................................... 5
Investment Objective and Policies..................................................... 5
Organization and Management of the Fund............................................... 6
The Fund's Expenses................................................................... 7
Dividends and Taxes................................................................... 8
How to Buy Shares..................................................................... 9
Share Price........................................................................... 11
How to Redeem Shares.................................................................. 14
Additional Services and Programs...................................................... 16
Investments, Techniques and Risk Factors.............................................. 19
</TABLE>

This Prospectus sets forth the information about John Hancock Money Market
Fund (the "Fund"), a diversified series of John Hancock Series, Inc. (the
"Company"), that you should know before investing. Please read and retain it for
future reference.
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 GOVERNMENT
AGENCY. AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT. THERE IS NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN A
STABLE NET ASSET VALUE OF $1.00 PER SHARE.

Additional information about the Fund and the Company has been filed with the
Securities and Exchange Commission (the "SEC"). You can obtain a copy of the
Fund's Statement of Additional Information, dated March 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).

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

<TABLE>
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 October 31, 1995,
adjusted to reflect fees and expenses. Actual fees and expenses may be greater
or less than those indicated.

ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management fee (net of reduction).................................................................. 0.40% 0.40%
12b-1 fee (net of reduction)*...................................................................... 0.15% 1.00%
Other expenses**................................................................................... 0.59% 0.59%
Total Fund operating expenses (net of reduction)***................................................ 1.14% 1.99%
<FN>

* The amount of the 12b-1 fee used to cover service expenses will be up to
0.15% and 0.25% of the Fund's average net assets attributable to Class A and
Class B shares, respectively, and any remaining portion will be used to
cover distribution expenses.
** Other Expenses include transfer agent, legal, audit, custody and other
expenses.

*** Total Fund operating expenses in the table reflect the current agreement
between the Fund and the Fund's distributor. In the future, the Class A
Expenses also reflect the reduction of the management fee by the Fund's
investment adviser. The higher fee cannot be reinstated without the
Trustees' consent. Without such a reduction the management fee of the Class
A and Class B shares, respectively, would have been estimated as 0.50% and
0.50%. Without these reductions the total fund operating expenses of the
Class A and Class B shares would have been 1.34% and 2.09%, respectively.

+ Redemption by wire fee (currently $4.00) not included.
</TABLE>

<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................................................................. $12 $ 36 $ 63 $ 139
Class B Shares
-- Assuming complete redemption at end of period........................... $70 $ 92 $127 $ 210
-- Assuming no redemption.................................................. $20 $ 62 $107 $ 210
</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 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 information in the following table of financial highlights has been
audited by Ernst & Young LLP, the Fund's independent auditors, whose unqualified
report 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 ("Investor Services") at
the address or telephone number listed on the front page of this Prospectus.

<TABLE>
Selected data for a Class A share outstanding throughout each period is as
follows:

<CAPTION>
FOR THE PERIOD
SEPTEMBER 12, 1995
(COMMENCEMENT OF
OPERATIONS) TO
OCTOBER 31, 1995
-------------------
<S> <C>
CLASS A
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period................................................................... $ 1.00
-------
Net Investment Income.................................................................................. 0.01
-------
Less Distributions:
Dividends from Net Investment Income................................................................... (0.01)
-------
Net Asset Value, End of Period......................................................................... $ 1.00
=======
Total Investment Return at Net Asset Value (d)......................................................... 0.64%(e)
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted).............................................................. $20,942
Ratio of Expenses to Average Net Assets................................................................ 1.07%*
Ratio of Net Investment Income to Average Net Assets................................................... 4.94%*

<FN>

* On an annualized basis.

(a) On an unreimbursed basis without expense reduction.

(b) On December 22, 1994 John Hancock Advisers, Inc. became the Investment
Adviser of the Fund.

(c) An estimated total return calculation takes into consideration fees and
expenses waived or borne by the adviser during the periods shown.

(d) Total investment return assumes dividend reinvestment and does not reflect
the effect of sales charges.

(e) Not annualized.

(f) Financial highlights, including total return, are for the period from
October 26, 1987 (date of the Fund's initial offering of shares to the
public) to October 31, 1987 and have not been annualized.
</TABLE>

3
<PAGE> 7

THE FUND'S FINANCIAL HIGHLIGHTS

<TABLE>
Selected data for a Class B share outstanding throughout each period is as
follows:

<CAPTION>
PERIOD
YEAR ENDED OCTOBER 31, ENDED
--------------------------------------------------------------------------------------------- OCTOBER 31,
1995 1994 1993 1992 1991 1990 1989 1988 1987(F)
--------- --------- --------- --------- --------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS B
PER SHARE OPERATING
PERFORMANCE
Net Asset Value,
Beginning of
Period........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM
INVESTMENT
OPERATIONS
Net Investment
Income........... 0.04 0.02 0.01 0.02 0.05 0.06 0.07 0.06 0.0007
Less Distributions
Dividends from Net
Investment
Income........... (0.04) (0.02) (0.01) (0.02) (0.05) (0.06) (0.07) (0.06) (0.0007)
------- ------- ------- ------- ------- ------- ------- ------ -------
Net Asset Value,
End of Period.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= ======= ======= ======= ====== =======
Total Investment
Return at Net
Asset Value(d)... 4.07% 1.87% 0.85% 1.73% 4.61% 6.30% 7.40% 6.06% 0.06%
======= ======= ======= ======= ======= ======= ======= ======= =======
Total Adjusted
Investment Return
at Net Asset
Value(a)(c)...... -- -- -- -- 4.49% 6.15% 6.93% 5.16% 0.04%
RATIOS AND
SUPPLEMENTAL DATA
Net Assets, End of
Period (000's
omitted)......... $54,313 $58,366 $31,546 $31,480 $20,763 $21,099 $13,610 $7,692 $ 2,535
Ratio of Expenses
to Average Net
Assets........... 1.92% 2.06% 2.44% 2.47% 2.11% 2.16% 2.12% 1.51% 0.01%
------- ------- ------- ------- ------- ------- ------- ------ -------
Ratio of Adjusted
Expenses to
Average Net
Assets)(a)....... -- -- -- -- 2.23%(a) 2.31% 2.59% 2.41% 0.03%
Ratio of Net
Investment Income
to Average Net
Assets........... 3.96% 1.97% 0.85% 1.69% 4.45% 6.11% 7.16% 6.01% 0.07%
Ratio of Adjusted
Net Investment
Income to Average
Net Assets(a).... -- -- -- -- 4.33% 5.96% 6.69% 5.11% 0.05%
<FN>

- ---------------

* On an annualized basis.

(a) On an unreimbursed basis without expense reduction.

(b) On December 22, 1994 John Hancock Advisers, Inc. became the Investment
Adviser of the Fund.

(c) An estimated total return calculation takes into consideration fees and
expenses waived or borne by the Adviser during the periods shown.

(d) Total investment return assumes dividend reinvestment and does not reflect
the effect of sales charges.

(e) Not annualized.

</TABLE>

4
<PAGE> 8

YIELD INFORMATION

For the seven days ended October 31, 1995, the Fund's annualized yield and
effective yield on Class A shares was 4.78% and 4.90%, respectively. For the
seven days ended October 31, 1995, the Fund's annualized yield and effective
yield on Class B shares was 4.03% and 4.12%, respectively. On October 31, 1995,
the Fund's average portfolio maturity was 58 days.

Current information on the Fund's annualized yield during a recent seven-day
period may be obtained by calling the Easi-Line at 1-800-338-8080 or a John
Hancock customer service representative, 1-800-225-5291.

Yield for Class B shares reflect the deduction of the applicable contingent
deferred sales charge imposed on a redemption of shares held for the applicable
period. The yield of Class A and Class B shares will be calculated separately
and, because each class is subject to different expenses, the yield may differ
with respect to that class for the same period. For information on how the Fund
calculates its annualized yield see the Statement of Additional Information.

INVESTMENT OBJECTIVE AND POLICIES

The Fund seeks to provide maximum current income consistent with capital
preservation and liquidity. The Fund's investments will be subject to the market
fluctuations and risks inherent in all securities, and there is no assurance
that the investment objective will always be achieved.

- -------------------------------------------------------------------------------
THE FUND SEEKS TO PROVIDE MAXIMUM CURRENT
INCOME CONSISTENT WITH CAPITAL
PRESERVATION AND LIQUIDITY.
- -------------------------------------------------------------------------------

The Fund seeks to achieve its objective by investing in money market instruments
including, but not limited to, U.S. Government, municipal and foreign
governmental securities; obligations of supranational organizations (E.G. the
World Bank and the International Monetary Fund); obligations of U.S. and foreign
banks and other lending institutions; corporate obligations; repurchase
agreements and reverse repurchase agreements. As a fundamental policy, the Fund
may not invest more than 25% of its total assets in obligations issued by (i)
foreign banks and (ii) foreign branches of U.S. banks where John Hancock
Advisers, Inc. (the "Adviser"), the Fund's investment adviser, has determined
that the U.S. bank is not unconditionally responsible for the payment
obligations of the foreign branch. All of the Fund's investments will be
denominated in U.S. dollars.

- -------------------------------------------------------------------------------
THE FUND INVESTS ONLY IN HIGH-QUALITY
SECURITIES BELIEVED TO PRESENT MINIMAL
CREDIT RISKS, UNDER PROCEDURES ADOPTED BY
THE BOARD OF DIRECTORS.
- -------------------------------------------------------------------------------

5
<PAGE> 9
are determined by the Adviser, based on procedures adopted by the Fund's
Board of Directors, to be of comparable quality to rated first or second
tier securities. The Fund may not purchase any second tier security if, as a
result of its purchase (a) more than 5% of its total assets would be invested
in second tier securities or (b) more than 1% of its total assets or $1 million
(whichever is greater) would be invested in the second tier securities of a
single issuer. For a description of the ratings assigned by the rating
organizations, see the Statement of Additional Information.

All of the Fund's investments will mature in 397 days or less. The Fund will
maintain an average dollar-weighted portfolio maturity of 90 days or less.

- -------------------------------------------------------------------------------
BY LIMITING THE MATURITY OF ITS
INVESTMENTS, THE FUND SEEKS TO LESSEN THE
CHANGES IN THE VALUE OF ITS ASSETS CAUSED
BY MARKET FACTORS.
- -------------------------------------------------------------------------------
mental and may be changed by a vote of the Board of Directors without
shareholder approval. Notwithstanding the Fund's fundamental investment
restriction prohibiting investments in other investment companies, the Fund may,
pursuant to an order granted by the SEC, invest in other investment companies in
connection with a deferred compensation plan for the non-interested directors of
the John Hancock funds.

- -------------------------------------------------------------------------------
THE FUND FOLLOWS CERTAIN POLICIES THAT MAY
HELP TO REDUCE INVESTMENT RISK.
- -------------------------------------------------------------------------------

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 determined by the Board of Directors, the Adviser may place
securities transactions with brokers affiliated with the Adviser. The brokers
include Tucker Anthony Incorporated, Sutro & Company, Inc. and John Hancock
Distributors, Inc., which are indirectly owned by the John Hancock Mutual Life
Insurance Company (the "Life Company"), which in turn indirectly owns the
Adviser.

- -------------------------------------------------------------------------------
BROKERS ARE CHOSEN ON BEST PRICE AND
EXECUTION.
- -------------------------------------------------------------------------------
See "Investments, Techniques and Risk Factors" for more information about the
Fund's investments.
ORGANIZATION AND MANAGEMENT OF THE FUND

- -------------------------------------------------------------------------------
THE BOARD OF DIRECTORS ELECTS OFFICERS AND
RETAINS THE INVESTMENT ADVISER WHO IS
RESPONSIBLE FOR THE DAY-TO-DAY OPERATIONS
OF THE FUND, SUBJECT TO THE BOARD OF
DIRECTORS' POLICIES AND SUPERVISION.
- -------------------------------------------------------------------------------

6
<PAGE> 10

Class A, Class B and Class S shareholders have exclusive voting rights with
respect to their distribution plans. Class S shares of the Fund are available
exclusively to investors who maintain brokerage accounts with certain brokers
who offer the Fund's shares as part of a sweep account arrangement. Class S
shares are not subject to a sales charge on purchases, redemptions or reinvested
dividends, nor are they subject to deferred sales charges or an exchange fee.
Class S expenses are identical to those of Class A shares except that the 12b-1
fee is 0.40% of average daily net assets on Class S shares. Information
regarding Class S shares may be obtained from an investor's sales representative
or from the Fund by calling the number on the back cover of this Prospectus. The
Company is not required to and does not intend to hold annual meetings of
shareholders, although special meetings may be held for such purposes as
electing or removing Directors, changing fundamental policies or approving a
management contract. The Fund, under certain circumstances, will assist in
shareholder communications with other shareholders of the Fund.

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 brokers who have arrangements with John Hancock Funds ("Selling
Brokers"). Certain Fund officers are also officers of the Adviser and John
Hancock Funds.

- -------------------------------------------------------------------------------

JOHN HANCOCK ADVISERS, INC. ADVISES
INVESTMENT COMPANIES HAVING A TOTAL ASSET
VALUE OF MORE THAN $16 BILLION.

- -------------------------------------------------------------------------------

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:
preclearance 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.

THE FUND'S EXPENSES

For managing its investment and business affairs, the Fund pays a fee to the
Adviser which for the 1995 fiscal year end was 0.50% of the Fund's average daily
net assets. The fee has been reduced to 0.40% of the Fund's average daily net
assets and can not be restated to 0.50% without the Trustees' consent.

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, John Hancock Funds and the Fund have agreed to
limit the distribution and service fees pursuant to the Plans to 0.15% of the
Class A shares' average daily net assets and to 1.00% of the Class B shares'
average daily net assets. In the future, the Class A distribution fee could
increase to 0.25%. In the case of the Class A Plan and the Class B Plan, up to
0.15% and 0.25%, respectively, is for service expenses and the remaining amount
is for distribution expenses. The distribution fees will be used to reimburse
John

- -------------------------------------------------------------------------------
THE FUND PAYS DISTRIBUTION AND SERVICE
FEES FOR MARKETING AND SALES-RELATED
SHAREHOLDER SERVICING.
- -------------------------------------------------------------------------------

7
<PAGE> 11
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; (iii) unreimbursed distribution expenses under
the Fund's prior distribution plans for Class B shares; (iv) distribution
expenses incurred by other investment companies which sell all or substantially
all of their assets to, merge with or otherwise engage in a reorganization
transaction with the Fund; and (v) with respect to Class B shares only, interest
expenses on unreimbursed distribution expenses. The service fees will be used to
compensate Selling Brokers and others for providing personal and account
maintenance services to shareholders.

For the fiscal year ended October 31, 1995, an aggregate of $947,545 of
distribution expenses or 1.78% of the average net assets of the Fund's Class B
shares was not reimbursed or recovered by John Hancock Funds through the receipt
of deferred sales charges or Rule 12b-1 fees in prior periods.

The higher ongoing distribution fee of Class B shares 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.

Information on the Fund's total expenses is in the Financial Highlights section
of this Prospectus.

DIVIDENDS AND TAXES
DIVIDENDS. The Fund generally declares dividends daily and distributes
dividends monthly, representing all or substantially all of its net investment
income.

Purchase orders which are received together with Federal funds by wire before
12:00 noon New York time will receive the dividend declared that day and other
purchase orders, including any order with payment other than by Federal funds,
will begin receiving dividends the following business day. Redemption orders
received prior to 12:00 noon New York time will not receive that day's
dividends.

- -------------------------------------------------------------------------------
THE FUND GENERALLY DECLARES DIVIDENDS
DAILY AND DISTRIBUTES DIVIDENDS MONTHLY.
- -------------------------------------------------------------------------------

Dividends are reinvested in additional shares of your class unless you elect the
option to receive 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
dividend 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

8
<PAGE> 12

long-term capital gains, if any, are taxable as long-term capital gain. The Fund
does not anticipate that it will generally realize any long-term capital gains.
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
may be treated as if you received them the previous December. The Fund will send
you a statement by January 31 showing the federal 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 or net realized
capital gains distributed to its shareholders within the time period prescribed
by the Code.

On the account application, you must certify that the social security or other
taxpayer identification number you provide is your correct number 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.

In addition to Federal taxes, you may be subject to state and local or foreign
taxes with respect to your investment in and distributions from the Fund. A
state income (and possibly local income and/or intangible property) tax
exemption is generally available to the extent the Fund's distributions are
derived from interest on (or, in the case of intangibles taxes, the value of its
assets is attributable to) certain U.S. Government obligations, provided in some
states that certain thresholds for holdings of such obligations and/or reporting
requirements are satisfied. Non-U.S. shareholders and tax-exempt shareholders
are subject to different tax rules not described herein. You should consult your
tax adviser for specific advice.

HOW TO BUY SHARES

Initial purchases of Class A and Class B shares of the Fund may be made either
directly or by exchanging amounts from the same class of another John Hancock
mutual fund.

Due to the fee under the distribution plan and the contingent deferred sales
charge, Class B shares of the Fund are intended only as a temporary investment
pending exchanges into Class B shares of other John Hancock mutual funds. If you
do not intend to exchange your shares of the Fund for Class B shares of another
John Hancock mutual fund, you should purchase Class A shares.

9
<PAGE> 13

- --------------------------------------------------------------------------------
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 making an initial purchase of 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.

<TABLE>
- ---------------------------------------------------------------------------------------
OPENING AN ACCOUNT
- ---------------------------------------------------------------------------------------

<S> <C> <C>
- ---------------------------------------------------------------------------------------
BY CHECK 1. Make your check payable to John Hancock Investor Services
Corporation, P.O. Box 9115, Boston, MA 02205-9115.
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 Money Market 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.
4. SAME DAY. To receive the dividend declared on the same day you
wire funds, you must telephone your order to Investor Services
toll free 1-800-225-5291 by 12:00 noon New York time that day.
See "Dividends and Taxation."
- ---------------------------------------------------------------------------------------
MONTHLY 1. Complete the "Automatic Investing" and "Bank Information"
AUTOMATIC sections on the Account Privileges Application designating a
ACCUMULATION bank account from which funds may be drawn.

PROGRAM 2. The amount you elect to invest will be withdrawn automatically
(MAAP) from your bank or credit union account.
- ---------------------------------------------------------------------------------------
BUYING ADDITIONAL CLASS A AND CLASS B
SHARES
- ---------------------------------------------------------------------------------------
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 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
in Class A shares.
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.
- ---------------------------------------------------------------------------------------
</TABLE>

10
<PAGE> 14

<TABLE>
- ---------------------------------------------------------------------------------------
<S> <C>
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 Money Market Fund
(Class A or Class B shares)
Your Account Number
Name(s) under which account is registered

SAME DAY. To receive the dividend declared on the same day you
wire funds, you must telephone your order to Investor Services
toll free 1-800-225-5291 by 12:00 noon New York time that day.
See "Dividends and Taxation."
- ---------------------------------------------------------------------------------------
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 Investor Services 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 to Investor Services.
- ---------------------------------------------------------------------------------------
</TABLE>

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 THAT
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 at amortized cost, which the Board of Directors has
determined to approximate market value. Under the amortized cost pricing method,
a portfolio investment is valued at its cost and thereafter any discount or
premium is amortized to maturity, regardless of the impact of fluctuating
interest rates on the market value of the investment. Amortized cost pricing
facilitates the maintenance of a $1.00 constant net asset value per share, but,
of course, this cannot be guaranteed.

- -------------------------------------------------------------------------------
THE PRICE OF YOUR SHARES IS THEIR NET
ASSET VALUE PER SHARE, WHICH WILL NORMALLY
BE CONSTANT AT $1.00.
- -------------------------------------------------------------------------------
The NAV is calculated twice daily, at 12:00 noon Eastern time and 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 price you pay for shares of the Fund equals the NAV computed after your
investment is accepted in good order by John Hancock Funds, which will normally
be constant at $1.00 per share. 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 Exchange and transmit it to John Hancock Funds before its
close of business to receive that day's price.

CLASS A SHARES. You will not incur a sales charge when you purchase Class A
shares.

11
<PAGE> 15

CLASS B SHARES -- CONTINGENT DEFERRED SALES CHARGE. Class B shares are offered
at net asset value per share without an initial sales charge. However, Class B
shares redeemed within six years of purchase will be subject to a contingent
deferred sales charge ("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 Class B shares being redeemed. Accordingly, you
will not be assessed a CDSC on increases in account value above the initial
purchase price, including Class B 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 Class B shares you have
held beyond the applicable CDSC redemption period or those you acquired through
reinvestment of dividends, and next from the Class B shares you have held the
longest during the CDSC redemption period. The CDSC is waived on redemptions in
certain circumstances. See discussion "Waiver of Contingent Deferred Sales
Charges" below.

Proceeds from the CDSC are paid to John Hancock Funds. John Hancock Funds uses
part of them to defray its expenses related to providing the Fund with
distribution services to the Fund 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 the Class B shares without an initial sales charge.

<TABLE>
The amount of the CDSC, if any, will vary depending on the number of years from
the time you purchased your Class B shares or you purchased Class B shares of
another John Hancock mutual fund which were subsequently exchanged into Class B
shares of the Fund until the time you redeem your Class B shares of the Fund.
Solely for the purpose 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.

<CAPTION>
CONTINGENT DEFERRED SALES
YEAR IN WHICH CLASS B SHARES CHARGE AS A PERCENTAGE OF
REDEEMED FOLLOWING PURCHASE AMOUNT REDEEMED
---------------------------- -------------------------
<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>

12
<PAGE> 16

- - Redemptions of Class B shares made under 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 establish your Systematic Withdrawal Plan
and 10% of the value of your 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 SHARE 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
the 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
have less than $1,000 invested in the Fund.

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 no later than 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

13
<PAGE> 17

shares should not be taxable for Federal income tax purposes, nor should it
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 which were recently
made by check or Invest-by-Phone have been collected (which may take up to 10
calendar days).

- -------------------------------------------------------------------------------
TO ASSURE ACCEPTANCE OF YOUR REDEMPTION
REQUEST, PLEASE FOLLOW THESE PROCEDURES.
- -------------------------------------------------------------------------------

<TABLE>
Once your shares are redeemed, the Fund generally sends you payment on the next
business day. 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.

- ---------------------------------------------------------------------------------------
<S> <C>
BY CHECK You may elect the checkwriting privilege which allows you to
write checks in amounts from a minimum of $100. Checks may not be
written against shares in your account which have been purchased
within the last 10 days, except for shares purchased by wire
transfer (which are immediately available).
- ---------------------------------------------------------------------------------------
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 Exchange is closed. Investor Services
employs the following procedures to confirm that instructions
received by telephone are genuine. Your name, the account number,
taxpayer identification number applicable to the account and
other relevant information may be requested. In addition,
telephone instructions are recorded.
You may redeem up to $100,000 by telephone, but the address on
the account must not have changed for the last thirty 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
certificated 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 use EASI-Line. EASI-Line's
telephone number is 1-800-338-8080.
- ---------------------------------------------------------------------------------------
</TABLE>

14
<PAGE> 18

- --------------------------------------------------------------------------------
BY WIRE If you have a telephone redemption form on file with the Fund,
redemption proceeds of $1,000 or more can be wired to your
designated bank account, and a fee (currently $4.00) will be
deducted.

SAME DAY. To receive redemption proceeds the same day, you
must telephone Investor Services at 1-800-225-5291 before
12:00 noon New York time. Dividends will not be received for
that day.

NEXT DAY. If same day wiring is not so requested, redemption
proceeds will be wired on the next business day.

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.

TYPE OF
REGISTRATION REQUIREMENTS
------------ ------------
Individual, Joint Tenants, Sole A letter of instruction signed (with
Proprietorship, Custodial titles where applicable) by all persons
(Uniform Gifts or Transfer to authorized to sign for the account,
Minors Act), General Partners exactly, as it is registered with the
Corporation, Association signature(s) guaranteed. 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(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.
- -------------------------------------------------------------------------------

15
<PAGE> 19

- --------------------------------------------------------------------------------
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 instructions. 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.

Shareholders will be notified before these redemptions are to be made or
this fee is imposed and will have 60 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 dividend
reinvestments, exceeds the number of shares redeemed, repeated redemptions
from a smaller account may eventually trigger this policy.
----------------------------------------------------------------------------

ADDITIONAL SERVICES AND PROGRAMS

EXCHANGE PRIVILEGE
John Hancock offers other funds with a wide range of investment goals. Contact
your registered representative or Selling Broker and request a prospectus for
the John Hancock funds that interest you. Read the prospectus carefully before
exchanging your shares. You can exchange shares of each class of the Fund only
for shares of the same class of another John Hancock fund. For this purpose,
John Hancock funds with only one class of shares will be treated as Class A,
whether or not they have been so designated.

- -------------------------------------------------------------------------------
YOU MAY EXCHANGE SHARES OF THE FUND ONLY
FOR SHARES OF THE SAME CLASS OF ANOTHER
JOHN HANCOCK FUND.
- -------------------------------------------------------------------------------

Exchanges of Class A shares into Class A shares of another John Hancock fund
which carry a front-end sales charge will be subject to the sales charge
described in that fund's prospectus. Class A shares of the Fund acquired by
exchange of shares of another fund on which a front-end sales charge was
previously paid are exchanged at net asset value. Class B shares and certain
Class A shares of the Fund (those 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 Limited-Term Government Fund and John Hancock Intermediate
Maturity Government Fund will be subject to the initial fund's CDSC unless your
initial investment in the Fund resulted from an exchange from one of those
funds, in which case the exchange will be subject to the respective CDSC
schedule set forth in one of these funds' prospectuses). 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.

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

16
<PAGE> 20

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.

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

17
<PAGE> 21

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 this 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.

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. 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.

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

3. You can also authorize automatic investment through payroll deduction by
completing the "Direct Deposit Investing" section of the Account Privileges
Application.

4. You can terminate your Monthly Automatic Accumulation Program plan at any
time.

5. There is no charge to you for this program, and there is no cost to the
Fund.

6. If you have payments withdrawn from a bank account and we are notified that
the account has been closed, your withdrawals will be discontinued.

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) Plans) and Section 457 Plans.

2. The initial investment minimum or aggregate minimum for any of the above
plans is $250. However, accounts being established as group IRA, SEP,

18
<PAGE> 22

SARSEP, TSA, 401(k) and Section 457 Plans will be accepted without an initial
minimum investment.

INVESTMENTS, TECHNIQUES AND RISK FACTORS
SECURITIES OF FOREIGN ISSUERS. Foreign issuers may not be subject to accounting
standards and government supervision comparable to U.S. companies and there is
often less publicly available information about their operations. Foreign
markets generally provide less liquidity than U.S. markets (and thus potentially
greater price volatility), and typically provide fewer regulatory protections
for investors. Foreign securities can also be affected by political or financial
instability abroad. Foreign branches of United States banks may be subject to
less stringent reserve requirements than domestic branches. United States
branches and agencies of foreign banks and foreign branches of United States
banks may provide less public information than, and may not be subject to, the
same accounting, auditing and financial record-keeping standards as domestic
banks.

RESTRICTED AND ILLIQUID SECURITIES. The Fund may invest up to 10% of its net
assets in illiquid investments, which include repurchase agreements maturing in
more than seven days, restricted securities and securities not readily
marketable. The Fund may also invest in restricted securities eligible for
resale to certain institutional investors pursuant to Rule 144A under the
Securities Act of 1933. These purchases are subject to the Fund's investment
restriction limiting all illiquid securities held by the Fund to not more than
10% 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, the Fund may be delayed in or prevented from
liquidating the collateral. It is a fundamental policy of the Fund not to lend
portfolio securities having a total value in excess of 30% of its total assets.

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 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 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.

19
<PAGE> 23

JOHN HANCOCK
MONEY MARKET
JOHN HANCOCK FUND
MONEY MARKET FUND

INVESTMENT ADVISER
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603

PRINCIPAL DISTRIBUTOR CLASS A AND CLASS B SHARES
John Hancock Funds, Inc. PROSPECTUS
101 Huntington Avenue MARCH 1, 1996
Boston, Massachusetts 02199-7603
A MONEY MARKET FUND THAT
CUSTODIAN SEEKS TO PROVIDE MAXIMUM
State Street Bank and Trust Company CURRENT INCOME CONSISTENT
225 Franklin Street WITH CAPITAL PRESERVATION
Boston, Massachusetts 02110 AND LIQUIDITY.

TRANSFER AGENT
John Hancock Investor Services
Corporation
P.O. Box 9116
Boston, Massachusetts 02205-9116

INDEPENDENT AUDITORS
Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

HOW TO OBTAIN INFORMATION
ABOUT THE FUND

For Service Information
For Telephone Exchange call
1-800-225-5291
For Investment-by-Phone
For Telephone Redemption 101 HUNTINGTON AVENUE
BOSTON, MASSACHUSETTS 02199-7603
For TDD call 1-800-554-6713 TELEPHONE 1-800-225-5291

4400P 3/96 (LOGO) Printed on Recycled Paper

<PAGE> 24
<TABLE>
JOHN HANCOCK MONEY MARKET FUND

CLASS S SHARES
PROSPECTUS
MARCH 1, 1996

- ---------------------------------------------------------------------------------------------------------------
<CAPTION>
TABLE OF CONTENTS
Page
----
<S> <C>
Expense Information................................................................................... 2
The Fund's Financial Highlights....................................................................... 3
Yield Information..................................................................................... 5
Investment Objective and Policies..................................................................... 5
Organization and Management of the Fund............................................................... 7
The Fund's Expenses................................................................................... 8
Dividends and Taxes................................................................................... 8
How to Buy Class S Shares............................................................................. 9
Share Price........................................................................................... 10
How to Redeem Class S Shares.......................................................................... 10
Investments, Techniques and Risk Factors.............................................................. 11
</TABLE>
This Prospectus sets forth the information about Class S shares of John
Hancock Money Market Fund (the "Fund"), a diversified series of John Hancock
Series, Inc. (the "Company"), that you should know before investing. Please
read and retain it for future reference. Class S shares of the Fund are offered
exclusively to investors who maintain brokerage accounts with certain brokers
who offer the Fund's shares as part of a sweep account (the "Selling Broker").
To invest in Class S shares of the Fund, the credit balances in your brokerage
account will be automatically invested or "swept" into the Fund, subject to the
terms of your brokerage account agreement.

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 GOVERNMENT
AGENCY. AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT. THERE IS NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN A
STABLE NET ASSET VALUE OF $1.00 PER SHARE.

Additional information about the Fund and the Company has been filed
with the Securities and Exchange Commission (the "SEC"). You can obtain a copy
of the Fund's Statement of Additional Information for Class S shares, dated
March 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). If you have any service related questions you should contact your Selling
Broker.

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> 25

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 Class S shares of the Fund. The operating expenses included in the
table and hypothetical example below are based on fees and expenses of the Class
A and Class B shares of the Fund for the fiscal year ended October 31, 1995
adjusted for certain current fees and expenses. No Class S shares were actually
outstanding during the period. Actual fees and expenses of Class S shares in
the future may be greater or less than those indicated.

<TABLE>

<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES
<S> <C>
Maximum sales charge imposed on purchases
(as a percentage of offering price)............................................................. None
Maximum sales charge imposed on
reinvested dividends............................................................................ None
Maximum deferred sales charge ................................................................... None
Redemption fee+.................................................................................. None
Exchange fee..................................................................................... None

ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management fee (net of reduction)............................................................... 0.40%
12b-1 fee*....................................................................................... 0.40%
Other expenses**................................................................................. 0.59%
Total Fund operating expenses (net of reduction)***............................................. 1.39%
<FN>

+ Redemption by wire fee (currently $4.00) not included.

* 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.

** Other Expenses include transfer agent, legal, audit, custody and other expenses.

*** Expenses reflect the reduction of the management fee by the Fund's adviser. The higher fee cannot be reinstated
without the Trustees' consent. Without such a reduction the management fee and total fund operating expenses would
have been estimated as 0.50% and 1.49%, respectively.

</TABLE>

<PAGE> 26

<TABLE>

In addition to the above expenses, the Selling Broker with whom a shareholder
maintains a sweep account may charge an annual administration fee for making
the account available.

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 $14 $44 $76 $167

</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 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."

THE FUND'S FINANCIAL HIGHLIGHTS

The information in the following table of financial highlights has been
audited by Ernst & Young LLP, the Fund's independent auditors, whose unqualified
report is included in the Statement of Additional Information. Class S shares
are a new class of shares; no financial highlights exist for Class S 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 ("Investor Services")
at the address or telephone number listed on the front page of this Prospectus.

Selected data for a Class A share outstanding throughout each period is as follows:

YEAR ENDED
OCTOBER 31, 1995
----------------
<S> <C>
Net asset value, beginning of period............................. $ 1.00

Net investment income............................................ 0.01

Less Distributions
Dividends from net investment income............................. (0.01)

Net asset value, end of period................................... $ 1.00

Total investment return at net asset value (d)................... 0.64% (e)

Ratios and Supplemental Data
Net Assets, end of period (000's omitted)........................ $20,942

Ratio of expenses to average net assets.......................... 1.07%*

Ratio of net investment income to
average net assets............................................. 4.94%*

-----------------
</TABLE>

Selected data for a Class B share outstanding throughout each period is as follows:

<CAPTION>
YEAR ENDED OCTOBER 31
---------------------
1995 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00

Net investment income.................................. 0.04 0.02 0.01 0.02 0.05 0.06

Less Distributions:
Dividends from net investment income................... (0.04) (0.02) (0.001) (0.02) (0.05) (0.06)

Net asset value, end of period......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00

Total investment return at net asset value (d)......... 4.07% 1.87% 0.85% 1.73% 4.61% 6.30%

Total adjusted investment return
at net asset value (a) (c)........................... 4.49% 6.15%

Ratios and Supplemental Data
Net Assets, end of period (000's omitted).............. $54,313 $58,366 $31,546 $31,480 $20,763 $21,099

Ratio of expenses to average net assets................ 1.92% 2.06% 2.44% 2.47% 2.11% 2.16%

Ratio of adjusted expenses to
average net assets (a)............................... -- -- -- -- 2.23% 2.31%

Ratio of net investment income to
average net assets.................................. 3.96% 1.97% 0.85% 1.69% 4.45% 6.11%

Ratio of adjusted net investment income to
average net assets (a)............................... -- -- -- -- 4.33% 5.96%
</TABLE>
<TABLE>
Year Ended
1989 1988 OCTOBER 31, 1987(2)
---- ---- -------------------
<S> <C> <C> <C>
Net asset value, beginning of period................... $ 1.00 $ 1.00 $ 1.00

Net investment income.................................. 0.07 0.06 0.0007

Less Distributions:
Dividends from net investment income................... (0.07) (0.06) (0.0007)

Net asset value, end of period......................... $ 1.00 $ 1.00 $ 1.00

Total investment return at net asset value (d)......... 7.40% 6.06% 0.06%

Total adjusted investment return
at net asset value (a) (c)........................... 6.93% 5.16% 0.04%

Ratios and Supplemental Data
Net Assets, end of period (000's omitted).............. $13,610 $7,692 $2,535

Ratio of expenses to average net assets................ 2.12% 1.51% 0.01%

Ratio of adjusted expenses to
average net assets (a)............................... 2.59% 2.41% 0.03%

Ratio of net investment income to
average net assets.................................. 7.16% 6.01% 0.07%

Ratio of adjusted net investment income to
average net assets (a)............................... 6.69% 5.11% 0.05%

<FN>
-----------
* On an annualized basis.
(a) On an unreimbursed basis without expense reduction.
(b) On December 22, 1994, John Hancock Advisers, Inc. became the investment adviser to the Fund.
(c) An estimated total return calculation takes into consideration fees and expenses waived or borne by the adviser
during the periods shown
(d) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(e) Not annualized.
(f) Financial highlights, including total return, are for the period from October 26, 1987 (date of the Fund's
initial offering of shares to the public) to October 31, 1987 and have not been annualized.
</TABLE>

<PAGE> 29

YIELD INFORMATION

Current information on the Fund's annualized yield during a recent
seven-day period may be obtained by calling the Easi-Line at 1-800-338-8080 or a
customer service representative, 1-800-225-5291. For information on how the Fund
calculates its annualized yield see the Statement of Additional Information.

INVESTMENT OBJECTIVE AND POLICIES

THE FUND SEEKS TO PROVIDE MAXIMUM CURRENT INCOME CONSISTENT WITH CAPITAL
PRESERVATION AND LIQUIDITY.

The Fund seeks to achieve its objective by investing in money market
instruments including, but not limited to, U.S. Government, municipal and
foreign governmental securities; obligations of supranational organizations
(e.g., the World Bank and the International Monetary Fund); obligations of U.S.
and foreign banks and other lending institutions; corporate obligations;
repurchase agreements and reverse repurchase agreements. As a fundamental
policy, the Fund may not invest more than 25% of its total assets in obligations
issued by (i) foreign banks and (ii) foreign branches of U.S. banks where John
Hancock Advisers, Inc. (the "Adviser"), the Fund's investment adviser, has
determined that the U.S. bank is not unconditionally responsible for the payment
obligations of the foreign branch. All of the Fund's investments will be
denominated in U.S. dollars.

THE FUND INVESTS ONLY IN HIGH QUALITY SECURITIES BELIEVED TO PRESENT
MINIMAL CREDIT RISKS, UNDER PROCEDURES ADOPTED BY THE BOARD OF DIRECTORS.

At the time the Fund acquires its investments, they will be rated (or
issued by an issuer that is rated with respect to a comparable class of
short-term debt obligations) in one of the two highest rating categories for
short-term debt obligations assigned by at least two nationally recognized
rating organizations (or one rating organization if the obligation was rated by
only one such organization). These high quality securities are divided into
"first tier" and "second tier" securities. First tier securities have received
the highest rating from at least two rating organizations (or one, if only one
has rated the security). Second tier securities have received ratings within the
two highest categories from at least two rating agencies (or one, if only one
has rated the security), but do not qualify as first tier securities. The Fund
may also purchase obligations that are not rated, but are determined by the
Adviser, based on procedures adopted by the Fund's Board of Directors, to be of
comparable quality to rated first or second tier securities. The Fund may not
purchase any second tier security if, as a result of its purchase (a) more than
5% of its total assets would be invested in second tier securities or (b) more
than 1% of its total assets or $1 million (whichever is greater) would be
invested in the second tier securities of a single issuer. For a description of
the ratings assigned by the rating organizations, see the Statement of
Additional Information.

<PAGE> 30

BY LIMITING THE MATURITY OF ITS INVESTMENTS, THE FUND SEEKS TO LESSEN
THE CHANGES IN THE VALUE OF ITS ASSETS CAUSED BY MARKET FACTORS.

All of the Fund's investments will mature in 397 days or less. The Fund
will maintain an average dollar-weighted portfolio maturity of 90 days or less.

CLASS S SHARES OF THE FUND MAY BE APPROPRIATE FOR A VARIETY OF
INVESTMENT PROGRAMS, WHICH CAN BE LONG-TERM OR SHORT-TERM IN NATURE.

While the Fund is not a substitute for building an investment portfolio
tailored to your investment needs and risk tolerance, the "sweep" feature of the
Class S shares enables you to use the Fund as a high quality, conveniently
liquid money market investment for cash balances in your brokerage account. See
"How to Buy Class S Shares" and "How to Redeem Class S Shares."

Because the Fund is designed to provide liquidity and stability of
capital, as well as automatic investment of free credit balances, it may be
especially suitable if you have short-term investment objectives or are awaiting
an opportune time to invest in the equity and/or bond markets. However, the Fund
may also be appropriate if you are a long-term investor seeking low-risk
investment alternatives which are designed to provide current income.

THE FUND FOLLOWS CERTAIN POLICIES THAT MAY HELP TO REDUCE INVESTMENT
RISK.

The Fund has adopted certain investment restrictions that are enumerated
in detail in the Statement of Additional Information, where they are classified
as fundamental or nonfundamental. Those restrictions designated as fundamental
may not be changed without shareholder approval. The Fund's investment objective
and, except as otherwise expressly stated, its investment policies are
nonfundamental and may be changed by a vote of the Board of Directors without
shareholder approval. Notwithstanding the Fund's fundamental investment
restriction prohibiting investments in other investment companies, the Fund may,
pursuant to an order granted by the SEC, invest in other investment companies in
connection with a deferred compensation plan for the non-interested directors of
the John Hancock funds.

BROKERS ARE CHOSEN ON BEST PRICE AND EXECUTION.

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.
Pursuant to procedures determined by the Board of Directors, the Adviser may
place securities transactions with brokers affiliated with the Adviser. The
brokers include Tucker Anthony Incorporated, Sutro & Company, Inc. and John
Hancock Distributors, Inc., which are indirectly owned by the John Hancock
Mutual Life Insurance Company (the "Life Company"), which in turn indirectly
owns the Adviser.

See "Investments, Techniques and Risk Factors" for more information
about the Fund's investments.

<PAGE> 31

ORGANIZATION AND MANAGEMENT OF THE FUND

THE BOARD OF DIRECTORS ELECTS OFFICERS AND RETAINS THE INVESTMENT
ADVISER WHO IS RESPONSIBLE FOR THE DAY-TO-DAY OPERATIONS OF THE FUND, SUBJECT TO
THE BOARD OF DIRECTORS' POLICIES AND SUPERVISION.

The Fund is a diversified series of the Company, which is an open-end
management investment company organized as a Maryland corporation in 1987. The
Company reserves the right to create and issue a number of series of shares, or
funds or classes thereof, which are separately managed and have different
investment objectives. The Directors have authorized the issuance of three
classes of shares of the Fund, designated as Class A, Class B and Class S. The
shares of each class represent an interest in the same portfolio of investments
of the Fund. Each class has equal rights as to voting, redemption, dividends and
liquidation. However, each class is subject to different fees and expenses
(which affect performance), has different minimum investment requirements and is
entitled to different services. Also Class A, Class B and Class S shareholders
have exclusive voting rights with respect to their distribution plans. Like
Class S shares, Class A shares are not subject to a sales charge on purchases,
redemptions or reinvested dividends, nor are they subject to deferred sales
charges or an exchange fee. While not subject to a sales charge on purchases or
reinvested dividends, Class B shares are subject to a contingent deferred sales
charge if redeemed within six years of purchase. Class A and Class B expenses
are identical to those of Class S shares except that the 12b-1 fees are 0.15%
and 1.00% of average daily net assets on Class A and Class B shares,
respectively. Information regarding Class A and Class B shares of the Fund may
be obtained from your Selling Broker or from the Fund by calling a John Hancock
customer service representative at the number on the front cover of this
Prospectus. The Company is not required to and does not intend to hold annual
meetings of shareholders, although special meetings may be held for such
purposes as electing or removing Directors, changing fundamental policies or
approving a management contract. The Fund, under certain circumstances, will
assist in shareholder communications with other shareholders.

JOHN HANCOCK ADVISERS, INC. ADVISES INVESTMENT COMPANIES HAVING A TOTAL
ASSET VALUE OF MORE THAN $16 BILLION.

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 brokers who have arrangements with John Hancock
Funds. Certain Fund officers are also officers of the Adviser and John Hancock
Funds.

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: preclearance 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.

<PAGE> 32

THE FUND'S EXPENSES

For managing its investment and business affairs, the Fund pays a fee to
the Adviser which for the 1995 fiscal year end was 0.50% of the Fund's average
daily net assets. The fee has been reduced to 0.40% of the Fund's average daily
net assets and cannot be reinstated to 0.50% without the Trustees' consent.

THE FUND PAYS DISTRIBUTION AND SERVICE FEES FOR MARKETING AND
SALES-RELATED SHAREHOLDER SERVICING.

The Class S shareholders have adopted a distribution plan (the "Plan")
pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the "1940
Act"). Under this Plan, the Fund will pay distribution and service fees at an
aggregate annual rate of up to 0.40% of the Class S shares' average daily net
assets. Under the Plan, 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 other brokers or
financial service firms who have arrangements with John Hancock Funds 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) distribution expenses incurred by
other investment companies which sell all or substantially all of their assets
to, merge with or otherwise engage in a reorganization transaction with the
Fund. The service fees will be used to compensate brokers who have arrangements
with John Hancock Funds 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 Plan, these expenses will be carried
forward together with interest on the balance of these unreimbursed expenses.

Information on the Fund's total expenses is in the Financial Highlights
section of this Prospectus.

DIVIDENDS AND TAXES

THE FUND GENERALLY DECLARES DIVIDENDS DAILY AND DISTRIBUTES DIVIDENDS
MONTHLY.

DIVIDENDS. The Fund generally declares dividends daily and distributes
dividends monthly, representing all or substantially all of its net investment
income.

Purchase orders which are received from a Selling Broker together with
Federal Funds by wire before 12:00 noon New York time will receive the dividend
declared that day and other purchase orders, including any order with payment
other than by Federal Funds, will begin receiving dividends the following
business day. Redemption orders effected by a Selling Broker prior to 12:00 noon
New York time will not receive that day's dividend. Refer to your brokerage
account agreement to determine the time and method of payment (for purchases)
that your Selling Broker will use in executing purchases and redemptions on your
behalf.

9
<PAGE> 33

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, if any, are taxable as long-term capital
gain. The Fund does not anticipate that it will generally realize any long- term
capital gains. 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 may be treated as if you received them the previous December.
Your Selling Broker will prepare and send you a statement by January 31 showing
the federal tax status of the dividends you received for the prior year.

On the account application, you must certify that the social security or
other taxpayer identification number you provide is your correct number 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.

In addition to Federal taxes, you may be subject to state and local or
foreign taxes with respect to your investment in and distributions from the
Fund. A state income (and possibly local income and/or intangible property) tax
exemption is generally available to the extent the Fund's distributions are
derived from interest on (or, in the case of intangibles taxes, the value of its
assets is attributable to) certain U.S. Government obligations, provided in some
states that certain thresholds for holdings of such obligations and/or reporting
requirements are satisfied. Non-U.S. shareholders and tax-exempt shareholders
are subject to different tax rules not described herein. You should consult your
tax adviser for specific advice.

HOW TO BUY CLASS S SHARES

Class S shares of the Fund are offered exclusively to investors who
maintain a brokerage account with certain brokers who offer the Fund's shares as
part of a sweep program (the "Selling Broker"). When you open a brokerage
account, free credit cash balances (including deposits, proceeds of sales of
securities, and miscellaneous cash dividends and interest, but not amounts held
by the Selling Broker as collateral for margin obligations to the Selling
Broker) in your brokerage account will be automatically invested or "swept" into
the Fund, subject to the terms and conditions of your brokerage account
agreement. When the free credit cash balances in your brokerage account exceed
the amount specified in your brokerage account agreement at the time specified
in your brokerage account agreement, the free credit cash balance will be
automatically invested in Class S shares of the Fund in accordance with the
terms of your brokerage account agreement. Refer to your brokerage account
agreement to determine the time and method of payment that your Selling Broker
will use in executing purchases on your behalf. Your Selling Broker may benefit
from the use of free credit cash balances in your account prior to their
transfer to the Fund. See "Dividends and Taxation" for a discussion of when you
will receive dividends.

<PAGE> 34

YOU WILL RECEIVE ACCOUNT STATEMENTS THAT YOU SHOULD KEEP TO HELP WITH
YOUR PERSONAL RECORDKEEPING.

Your Selling Broker will prepare and send to you a statement of your
account after any transaction that affects your share balance or registration
(statements related to reinvestment of dividends will be sent to you quarterly).
A tax information statement will be mailed to you by your Selling Broker by
January 31 of each year.

SHARE PRICE

THE PRICE OF YOUR SHARES IS THEIR NET ASSET VALUE PER SHARE, WHICH WILL
NORMALLY BE CONSTANT AT $1.00.

The net asset value per share ("NAV") is the value of one share. The NAV
is calculated by dividing the net assets allocable to the Class S shares by the
number of outstanding Class S shares. Securities in the Fund's portfolio are
valued at amortized cost, which the Board of Directors has determined
approximates market value. Under the amortized cost pricing method, a portfolio
investment is valued at its cost and thereafter any discount or premium is
amortized to maturity, regardless of the impact of fluctuating interest rates on
the market value of the investment. Amortized cost pricing facilitates the
maintenance of a $1.00 constant net asset value per share, but, of course, this
cannot be guaranteed.

The NAV is calculated twice daily, at 12:00 noon Eastern time and 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.

HOW TO REDEEM CLASS S SHARES

REDEMPTIONS WILL BE AUTOMATICALLY EFFECTED BY YOUR SELLING BROKER TO
SATISFY DEBIT BALANCES IN YOUR BROKERAGE ACCOUNT.

Redemptions will be automatically effected by your Selling Broker to
satisfy debit balances in your brokerage account or to provide the necessary
cash collateral for your margin obligations to your Selling Broker. Redemptions
will also be automatically effected to settle securities transactions with your
Selling Broker if your free credit balance on the day before settlement is
insufficient to settle the transactions. Your Selling Broker will, at the time
specified in your brokerage account agreement, automatically scan each sweep
account for debits and pending securities settlements, and, after application of
any free credit balances in the sweep account to such debits, your Selling
Broker will

<PAGE> 35

redeem on your behalf a sufficient number (or your entire balance of
Class S shares in the event that your debits exceed the amount of Class S shares
in your account) of Class S shares of the Fund in accordance with the terms of
your brokerage account agreement to satisfy any remaining debits in the account.
Refer to your brokerage account agreement to determine the time and procedures
that your Selling Broker will use in executing redemptions on your behalf. You
may also redeem Class S shares of the Fund by placing a redemption request
through your Selling Broker. Your redemption proceeds will be deposited as cash
balances in your sweep account with the Selling Broker.

You may elect the checkwriting privilege which allows you to write
checks in amounts from a minimum of $100. Checks may not be written against
shares in your account which have been purchased within the last 10 days, except
for shares purchased by wire transfer (which are immediately available).

INVESTMENTS, TECHNIQUES AND RISK FACTORS

SECURITIES OF FOREIGN ISSUERS. Foreign issuers may not be subject to
accounting standards and government supervision comparable to U.S. companies,
and there is often less publicly available information about their operations.
Foreign markets generally provide less liquidity than U.S. markets (and thus
potentially greater price volatility), and typically provide fewer regulatory
protections for investors. Foreign securities can also be affected by political
or financial instability abroad. Foreign branches of United States banks may be
subject to less stringent reserve requirements than domestic branches. United
States branches and agencies of foreign banks and foreign branches of United
States banks may provide less public information than, and may not be subject
to, the same accounting, auditing and financial record-keeping standards as
domestic banks.

RESTRICTED AND ILLIQUID SECURITIES. The Fund may invest up to 10% of
its net assets in illiquid investments, which include repurchase agreements
maturing in more than seven days, restricted securities and securities not
readily marketable. The Fund may also invest in restricted securities eligible
for resale to certain institutional investors pursuant to Rule 144A under the
Securities Act of 1933. These purchases are subject to the Fund's investment
restriction limiting all illiquid securities held by the Fund to not more than
10% 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, the Fund may be
delayed in or prevented from liquidating the collateral. It is a fundamental
policy of the Fund not to lend portfolio securities having a total value in
excess of 30% of its total assets.

<PAGE> 36

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 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.

JOHN HANCOCK MONEY MARKET FUND JOHN HANCOCK MONEY MARKET FUND
<S> <C>
INVESTMENT ADVISER CLASS S SHARES
John Hancock Advisers, Inc. PROSPECTUS
101 Huntington Avenue MARCH 1, 1996
Boston, Massachusetts 02199-7603

PRINCIPAL DISTRIBUTOR A MONEY MARKET FUND THAT SEEKS TO
John Hancock Funds, Inc. PROVIDE MAXIMUM CURRENT INCOME
101 Huntington Avenue CONSISTENT WITH CAPITAL PRESERVAtion
Boston, Massachusetts 02199-7603 AND LIQUIDITY.

CUSTODIAN
State Street Bank and Trust Company 101 HUNTINGTON AVENUE
225 Franklin Street BOSTON, MASSACHUSETTS 02199-7603
Boston, Massachusetts 02110

TRANSFER AGENT
John Hancock Investor Services Corporation
P.O. Box 9116
Boston, Massachusetts 02205-9116

INDEPENDENT AUDITORS
Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

</TABLE>

14
<PAGE> 38

JOHN HANCOCK
GLOBAL
RESOURCES FUND

CLASS A AND CLASS B SHARES
PROSPECTUS
MARCH 1, 1996

- -------------------------------------------------------------------------------
TABLE OF CONTENTS

Page
----
Expense Information....................................................... 2
The Fund's Financial Highlights........................................... 3
Investment Objective and Policies......................................... 5
Organization and Management of the Fund................................... 9
Alternative Purchase Arrangements......................................... 9
The Fund's Expenses....................................................... 11
Dividends and Taxes....................................................... 12
Performance............................................................... 13
How to Buy Shares......................................................... 14
Share Price............................................................... 15
How to Redeem Shares...................................................... 21
Additional Services and Programs.......................................... 23
Investments, Techniques and Risk Factors.................................. 26

This Prospectus sets forth the information about John Hancock Global
Resources Fund (the "Fund"), a diversified series of John Hancock Series, Inc.
(the "Company"), that you should know before investing. Please read and retain
It for future reference.

Additional information about the Fund and the Company has been filed
with the Securities and Exchange Commission (the "SEC"). You can obtain a copy
of the Fund's Statement of Additional Information, dated March 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).

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> 39

<TABLE>
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 October 31, 1995
adjusted to reflect current fees and expenses. Actual fees and expenses may be
greater or less than those indicated.

ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets)
Management fee....................................................................................... 0.75% 0.75%
12b-1 fee**.......................................................................................... 0.25% 1.00%
Other expenses***.................................................................................... 0.98% 0.98%
Total Fund operating expenses........................................................................ 1.98% 2.73%
<FN>
* 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.
*** Other Expenses include transfer agent, legal, audit, custody and other expenses.
+ Redemption by wire fee (currently $4.00) not included.
</TABLE>

<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............................................................... $69 $109 $151 $269
Class B Shares
-- Assuming complete redemption at end of period......................... $78 $115 $164 $288
-- Assuming no redemption................................................ $28 $ 85 $144 $288
(This example should not be considered a representation of past or future expenses. Actual expenses may be greater or less
than those shown.)
</TABLE>

2
<PAGE> 40

THE FUND'S FINANCIAL HIGHLIGHTS

The information in the following table of financial highlights has been
audited by Ernst & Young LLP, the Fund's independent auditors, whose unqualified
report is included in the Fund's 1995 Annual Report and 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 ("Investor Services") at the address or telephone number
listed on the front page of this Prospectus.

<TABLE>
Selected data for each class of shares outstanding throughout each period is
as follows:

<CAPTION>
FOR THE PERIOD
JUNE 15, 1994
YEAR ENDED (COMMENCEMENT OF
OCTOBER 31, OPERATIONS) TO
1995(A) OCTOBER 31, 1994
----------- ----------------
<S> <C> <C>
CLASS A
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period........................................................ $ 15.62 $14.89
------- ------
Net Investment Loss(b)...................................................................... (0.08) (0.08)
Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency Transactions.... (1.54) 0.81
------- ------
Total from Investment Operations............................................................ (1.62) 0.73
------- ------
Net Asset Value, End of Period.............................................................. $ 14.00 $15.62
======= ======
Total Investment Return at Net Asset Value(c)............................................... (10.37)% 4.90%(d)

RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted)................................................... $ 2,324 $5,372
Ratio of Expenses to Average Net Assets..................................................... 1.93% 0.73%*
Ratio of Net Investment Loss to Average Net Assets.......................................... (0.53)% (0.42)%*
Portfolio Turnover Rate..................................................................... 101% 96%
</TABLE>

3
<PAGE> 41

<TABLE>
Selected data for Class B shares outstanding throughout each period is as follows:
<CAPTION>
YEAR ENDED OCTOBER 31,
----------------------------------------------------------------------------
1995(a) 1994 1993 1992 1991 1990 1989
------- ------- ------- ------ ------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS B
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period................ $ 15.58 $ 15.69 $ 12.41 $12.20 $ 11.57 $11.99 $10.29
------- ------- ------- ------ ------- ------ ------
Net Investment Loss(b).............................. (0.21) (0.23) (0.24) (0.24) (0.17) (0.10) 0.06
Net Realized and Unrealized Gain (Loss) on
Investments and Foreign Currency Transactions...... (1.51) 0.12 3.52 0.58 1.24 0.16 1.82
------- ------- ------- ------ ------- ------ ------
Total from Investment Operations.................... (1.72) (0.11) 3.28 0.34 1.07 0.06 1.88
------- ------- ------- ------ ------- ------ ------
LESS DISTRIBUTIONS
Dividends from Net Investment Income................ -- -- -- -- -- (0.01) (0.06)
Distributions from Realized Gains on Investments
Sold............................................... -- -- -- (0.13) (0.44) (0.47) (0.12)
------- ------- ------- ------ ------- ------ ------
Total Distributions to Shareholders................. -- -- -- (0.13) (0.44) (0.48) (0.18)
------- ------- ------- ------ ------- ------ ------
Net Asset Value, End of Period...................... $ 13.86 $ 15.58 $ 15.69 $12.41 $ 12.20 $11.57 $11.99
======= ======= ======= ====== ======= ====== ======
Total Investment Return at Net Asset Value(c)....... (11.04)% (0.70)% 26.43% 2.93% 9.81% 0.09% 18.60%
======= ======= ======= ====== ======= ====== ======
Total Adjusted Investment Return at Net Asset
Value(f)(g)........................................ -- -- -- -- -- 0.04% 17.2%

RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted)........... $26,402 $36,937 $19,498 $7,428 $10,766 $7,746 $3,655
Ratio of Expenses to Average Net Assets............. 2.68% 2.54% 2.92% 3.75% 3.64% 3.50% 3.45%
Ratio of Adjusted Expenses to Average Net
Assets(f).......................................... -- -- -- -- -- 3.55% 4.85%
Ratio of Net Investment Income (Loss) to Average
Net Assets......................................... (1.43)% (1.52)% (1.65)% (2.01)% (1.47)% (0.82)% 0.55%
Ratio of Adjusted Net Investment Loss to Average Net
Assets(f).......................................... -- -- -- -- -- (0.87)% (0.85)%
Portfolio Turnover Rate............................. 101% 96% 83% 59% 93% 59% 63%

<CAPTION>
PERIOD ENDED
OCTOBER 31,
1988 1987(e)
------ ------------
<S> <C> <C>
CLASS B
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period................ $ 8.91 $ 8.71
------ --------
Net Investment Loss(b).............................. 0.16 (0.0020)
Net Realized and Unrealized Gain (Loss) on
Investments and Foreign Currency Transactions...... 1.22 0.2020
------ --------
Total from Investment Operations.................... 1.38 0.2000
------ --------
LESS DISTRIBUTIONS
Dividends from Net Investment Income................ -- --
Distributions from Realized Gains on Investments
Sold............................................... -- --
------ --------
Total Distributions to Shareholders................. -- --
------ --------
Net Asset Value, End of Period...................... $10.29 $ 8.91
====== ========
Total Investment Return at Net Asset Value(c)....... 15.49% 2.30%
====== ========
Total Adjusted Investment Return at Net Asset
Value(f)(g)........................................ 9.55% 1.93%

RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted)........... $1,746 $ 113
Ratio of Expenses to Average Net Assets............. 3.09% 0.03%
Ratio of Adjusted Expenses to Average Net
Assets(f).......................................... 9.03% 0.40%
Ratio of Net Investment Income (Loss) to Average
Net Assets......................................... 1.61% (0.02)%
Ratio of Adjusted Net Investment Loss to Average Net
Assets(f).......................................... (4.33)% (0.39)%
Portfolio Turnover Rate............................. 191% 0%
<FN>
- ---------------
* On an annualized basis.
(a) On December 22, 1994, John Hancock Advisers, Inc. became the investment adviser of the fund.
(b) Per share information has been calculated using the average number of shares outstanding.
(c) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(d) Not annualized.
(e) Financial highlights, including total return, are for the period from October 16, 1987 (date of the Fund's initial
offering of shares to the public) to October 31, 1987 and have not been annualized.
(f) On an unreimbursed basis without expense reduction.
(g) An estimated total return calculation takes into consideration fees and expenses waived or borne by the Adviser
during the periods shown.
</TABLE>

4
<PAGE> 42

INVESTMENT OBJECTIVE AND POLICIES

The Fund's investment objectives are to protect the purchasing power of
shareholders' capital and to achieve growth of capital. The first of these
objectives means that the Fund seeks to protect generally shareholders' invested
capital against erosion of the value of the U.S. dollar through inflation.
Current income will not be a primary consideration in selecting securities.
However, it will be an important factor in making selections among securities
believed otherwise comparable by John Hancock Advisers, Inc. (the "Adviser").

- -------------------------------------------------------------------------------
THE FUND'S INVESTMENT OBJECTIVES ARE TO
PROTECT THE PURCHASING POWER OF
SHAREHOLDERS' CAPITAL AND TO ACHIEVE
GROWTH OF CAPITAL.
- -------------------------------------------------------------------------------

The Fund pursues its objectives by investing at all times (except during periods
when it is investing defensively) at least 65% of its total assets in:

(1) equity securities of domestic and foreign companies (a) with substantial
natural resource assets, natural resource-related or energy-related
activities or (b) that provide equipment or services primarily devoted to
the natural resource or energy-related activities of companies described in
(a) ("Natural Resource Companies"); and

(2) asset-based securities (defined below).

Natural resource assets consist of precious metals (e.g., gold, silver and
platinum), ferrous and nonferrous metals (e.g., iron, aluminum and copper),
strategic metals (e.g., uranium and titanium), hydrocarbons (e.g., coal, oil and
natural gas), water, cement and aggregates, timberland, developed and
undeveloped real property and agricultural commodities.

The Adviser will identify companies that, in its opinion, have substantial
holdings of natural resource assets so that when compared to the company's
capitalization, revenues or operating profits, such assets are of enough
magnitude that changes in the assets' economic value will affect the market
value of the company. The Fund will consider a company to be a Natural Resource
Company if, at the time the Fund acquires its securities, at least 50% of the
company's noncurrent assets, capitalization, gross revenues or operating profits
in the most recent or current fiscal year are:

(1) involved in or result from (directly or indirectly through subsidiaries)
exploring, mining, refining, processing, transporting, fabricating, dealing
in or owning natural resource assets; or

(2) involved in or result from energy-related activities directly or indirectly
through subsidiaries.

The Fund presently does not intend to invest directly in natural resource assets
or contracts related to natural resource assets, other than gold bullion
(directly or through warehouse receipts for gold) and gold coins. Although the
Fund is authorized to invest a majority of its assets in (1) gold and (2)
gold-related securities or securities of gold-related companies, it does not
presently anticipate such investments to exceed 25% of its total assets
(including its 10% limitation in gold bullion or gold coins). See "Risk
Factors."

Energy-related activities consist of those which relate to the development and
use of energy sources, such as:

(1) the generation of power from hydroelectric, geothermal, tidal, or other
naturally-occurring sources, or from natural resource manufacturing
by-products or refuse;

5
<PAGE> 43

(2) the development of synthetic fuels;

(3) transportation of energy producing sources such as coal, oil, electricity or
nuclear fuels;

(4) the development and application of techniques and devices for conservation
or efficient use of energy; and

(5) the control of pollution related to energy industries and waste disposal.

Generally, a company will be considered to provide equipment or services to
Natural Resource Companies if a significant part (at least 50%) of the company's
business or its profit relates to resource-related or energy-related activities.
Examples of this kind of company are:

(1) manufacturers of mining or earth moving equipment;

(2) providers of seismology testing services; and

(3) providers of supplies and maintenance services to offshore drilling sites.

Although it is not required to do so, the Fund will consider selling securities
of companies held in its portfolio that no longer meet the 50% test described
above.

The Fund may invest in "asset-based securities," which are debt securities,
preferred stocks or convertible securities, when the principal amount,
redemption terms or conversion terms of these investments are related to the
market price of some natural resource asset such as gold bullion. The Fund will
purchase only asset-based securities that are rated investment grade (i.e.,
"AAA," "AA," "A" or "BBB" by Standard & Poors Ratings Group ("S&P"); or "Aaa,"
"Aa," "A" or "Baa" by Moody's Investors Service, Inc. ("Moody's"); or commercial
paper rated "A-1" by S&P or "Prime-1" by Moody's); or, if not rated by S&P or
Moody's or unrated, securities determined by the Adviser to be of similar credit
quality. Subsequent to its purchase by the Fund, a security may be assigned a
lower rating or cease to be rated. Such a downgrading would not require the Fund
to sell the security, but in the event of such a downgrade the Adviser will
consider whether the Fund should continue to hold the security in its portfolio.
Securities rated BBB or Baa, although considered to be investment grade, may
have speculative characteristics in that changes in economic conditions or other
circumstances are more likely to lead to a weakened capacity of the issuer to
make principal and interest payments than is the case for higher grade
securities.

The Fund will seek securities that are attractively priced relative to the
intrinsic values of the relevant natural resource or that are of companies which
are positioned to benefit under existing or anticipated economic conditions.
Accordingly, the Fund may shift its emphasis from one natural resource industry
to another depending upon prevailing trends or developments, provided that the
Fund will not invest 25% or more of its total assets in the securities of
companies in any one natural resource industry.

There are also no geographic limitations on natural resource companies in which
the Fund may invest. However, as a nonfundamental policy, the Fund will be
invested in securities of issuers, with respect to foreign investments, in at
least three countries. In light of the geographic concentration of many natural
resources, the Fund anticipates that many of the companies in which it invests
will be located

6
<PAGE> 44

in Canada, Australia, New Zealand, Malaysia, the United Kingdom and the United
States. Investments may also be made in companies located in Japan, Western
Europe, Latin America, Southeast Asia and other countries and regions as the
Adviser may from time to time determine. In connection with the Fund's
investments in foreign securities, the Adviser will consider factors such as the
expected levels of inflation and interest rates, government policies influencing
business conditions, the range of investment opportunity and other pertinent
financial, tax, social, political and national factors -- all in relation to the
prevailing prices of the securities of foreign issuers. The Fund is permitted,
but presently does not intend, to invest up to 100% of its assets in securities
of non-U.S. companies and may engage in various hedging instruments related to
foreign securities. Concentration of investments by the Fund in foreign
securities may involve special considerations and additional investment risks.
See "Investments, Techniques and Risk Factors."

During periods when the Adviser views the potential for total returns from
corporate or government debt obligations to be greater than the potential for
total returns from equities, fixed income securities, up to a normal limit of
35% of the Fund's total assets, will be included in the Fund's portfolio. More
than 35% of the Fund's total assets may be invested in fixed income securities,
cash and cash equivalents as the result of temporary defensive investments. The
Fund will purchase only corporate debt securities of domestic or foreign issuers
which are rated investment grade (i.e., "AAA," "AA," "A" or "BBB" by S&P; or
"Aaa," "Aa," "A" or "Baa" by Moody's or commercial paper rated "A-1" by S&P or
"Prime-1" by Moody's), or unrated securities determined by the Adviser to be of
equivalent credit quality. The foregoing credit quality limitations do not apply
to deposits at banks in which cash is maintained by the Fund. As noted above,
securities that are rated "BBB" or "Baa" are considered to have speculative
characteristics.

As to the balance of the Fund's assets, the Fund may:

1. invest (for liquidity purposes) in short term debt securities with remaining
maturities of one year or less ("money market instruments") such as U.S.
Government securities, certificates of deposit, bankers' acceptances,
commercial paper, corporate debt securities and related repurchase
agreements;

2. enter into repurchase agreements and reverse repurchase agreements, lend its
portfolio securities and make short sales "against the box";

3. invest in options on securities and stock indexes;

4. invest in when-issued securities and restricted securities; and

5. employ certain hedging techniques such as options on stock indexes, stock
index futures contracts and options thereon, foreign currency futures
contracts and forward foreign currency exchange contracts and options on
foreign currencies.

These techniques may involve certain risks and are further described under
"Investments, Techniques and Risk Factors." Options and futures contracts are
generally considered to be "derivative" instruments because they derive their
value from the performance of an underlying asset, index or other economic

7
<PAGE> 45

benchmark. See "Investments, Techniques and Risk Factors" for additional
discussion of derivative instruments.

The Fund has adopted certain investment restrictions which are enumerated in
detail in the Statement of Additional Information where they are classified as
fundamental or nonfundamental. Those restrictions designated as fundamental may
not be changed without shareholder approval. The Fund's investment objectives
and investment policies are nonfundamental, which means that they may be changed
by the Board of Directors without shareholder approval. However, the Fund's
investment objectives may not be changed without 30 days' prior written notice
first having been given to shareholders. If there is a change in the Fund's
investment objectives, you should consider whether the Fund remains an
appropriate investment in light of your current financial position and needs.
Notwithstanding the Fund's fundamental investment restriction prohibiting
investments in other investment companies, the Fund may, pursuant to an order
granted by the SEC, invest in other investment companies in connection with a
deferred compensation plan for the non-interested Trustees and Directors of the
John Hancock funds.

- -------------------------------------------------------------------------------
THE FUND FOLLOWS CERTAIN POLICIES WHICH
MAY HELP TO REDUCE INVESTMENT RISK.
- -------------------------------------------------------------------------------

RISK FACTORS. The value of equity securities of Natural Resource Companies will
fluctuate due to various factors including changes in the market for the
particular natural resource in which the issuer is involved. Events occurring in
nature, inflationary pressures and international polities can affect the overall
supply and demand of a natural resource and thereby the value of companies
involved in such natural resources.

Additionally, the prices of gold stocks and the price of gold are subject to
substantial fluctuations, and may be affected by unpredictable international
monetary and political circumstances such as currency revaluations, national and
world economic conditions, social conditions within a country (particularly
South Africa and Russia, which are among the world's largest producers of gold),
trade imbalances or trade and currency restrictions between countries. These
price fluctuations may adversely affect the value of an investment in the Fund.
The only major gold-producing countries are the United States, Russia, Canada,
Australia and South Africa. (See Statement of Additional Information "Certain
Investment Practices--Special Considerations Related to Investment in Gold" for
further discussion.) Because of its emphasis on securities of companies with
substantial natural resource assets or natural resource asset-related or
energy-related businesses, the Fund should be considered as a focused investment
to achieve diversification and not as a balanced or complete investment program.

- -------------------------------------------------------------------------------
BROKERS ARE CHOSEN ON BEST PRICE AN EXECUTION.
- -------------------------------------------------------------------------------

8
<PAGE> 46

ORGANIZATION AND MANAGEMENT OF THE FUND

The Fund is a diversified series of the Company, an open-end management
investment company organized as a Maryland corporation in 1987. The Company
reserves the right to create and issue a number of series of shares, or funds or
classes thereof, which are separately managed and have different investment
objectives. The Board of Directors has authorized the issuance of two classes of
the Fund, designated Class A and Class B. The shares of each class represent an
interest in the same portfolio of investments of the Fund. Each class has equal
rights as to voting, redemption, dividends and liquidation. However, each class
bears different distribution and transfer agent fees and other expenses. Also,
Class A and Class B shareholders have exclusive voting rights with respect to
their distribution plans. The Company is not required to and does not intend to
hold annual meetings of shareholders, although special meetings may be held for
such purposes as electing or removing Directors, changing fundamental policies
or approving a management contract. The Company, 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 brokers that have agreements with John Hancock Funds ("Selling
Brokers"). Certain Fund officers are also officers of the Adviser and John
Hancock Funds.

- -------------------------------------------------------------------------------
JOHN HANCOCK ADVISERS, INC. ADVISES
INVESTMENT COMPANIES HAVING A TOTAL ASSET
VALUE OF MORE THAN $16 BILLION.
- -------------------------------------------------------------------------------

Kevin R. Baker is portfolio manager of the Fund. Mr. Baker also supports the
portfolio manager of John Hancock Special Equities Fund and John Hancock Special
Opportunities Fund. Prior to joining the Adviser in 1994, Mr. Baker was
president of Baker Capital Management. He also worked as a registered
representative for Kidder Peabody.

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.
- -------------------------------------------------------------------------------

9
<PAGE> 47

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 0.25% 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 for 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 TO YOU.
- -------------------------------------------------------------------------------

Class A shares are subject to lower distribution 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.

10
<PAGE> 48

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 and service 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.

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 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 investment and business affairs, the Fund pays a fee to the
Adviser which for the 1995 fiscal year was 0.75% of the Fund's average daily net
assets. The advisory fee paid by the Fund is higher than that of most other
funds but is comparable to fees paid by funds that invest in similar 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 0.25% of the Class A shares' average daily
net assets and an aggregate annual rate of 1.00% of the Class B shares' average
daily net assets. In each case, up to 0.25% for Class A shares and Class B
shares 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; (iii) unreimbursed distribution expenses under the Fund's prior
distribution plans; (iv) distribution expenses incurred by other investment
companies which sell all or substantially all of their assets to, merge with or
otherwise engage in a reorganization transaction with the Fund; and (v) with
respect to Class B shares only, interest expenses on unreimbursed distribution
expenses. The service fees will be used to compensate Selling Brokers and others
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 incurred by it under the Class A Plan, these expenses will not be
carried beyond one year from the date they were incurred. 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 October 31,
1995, an

11
<PAGE> 49

aggregate of $850,145 of distribution expenses or 2.67% of the average net
assets of the Fund's Class B shares was not reimbursed or recovered by John
Hancock Funds through the receipt of deferred sales charges or Rule 12b-1 fees
in prior periods.

Information on the Fund's total expenses is in the Financial Highlights section
of this Prospectus.

DIVIDENDS AND TAXES

DIVIDENDS. The Fund generally declares and distributes dividends representing
all or substantially all of its net investment income, if any, annually. The
Fund will also distribute net short-term or long-term capital gains, if any, at
least annually.

- -------------------------------------------------------------------------------
THE FUND GENERALLY DECLARES AND
DISTRIBUTES DIVIDENDS ANNUALLY.
- -------------------------------------------------------------------------------

Dividends are reinvested on the record date in additional shares of your class
unless you elect the option to receive 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
currency gains, 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. Corporate shareholders may be entitled to take
a dividends-received deduction for any dividends paid by the Fund that are
attributable to the dividends it receives from U.S. domestic corporations,
subject to certain restrictions in the Internal Revenue Code of 1986, as amended
(the "Code"). Certain dividends paid by the Fund in January of a given year may
be taxable to you as if you received them the prior December.

The Fund has qualified and intends to continue to qualify as a regulated
investment company under Subchapter M of the Code. As a regulated investment
company, the Fund will not be subject to Federal income tax on any net
investment income or 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.

The Fund anticipates that it will be subject to foreign withholding taxes or
other foreign taxes on income (possibly including capital gains) on certain
foreign investments, which will reduce the yield or return from those
investments. However, if more than 50% of the Fund's total assets at the close
of its taxable year consists of 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.

12
<PAGE> 50

information or are otherwise subject to this withholding, the Fund may be
required to withhold 31% of your dividends and the proceeds of redemptions or
exchanges.

In addition to Federal taxes, you may be subject to state and local taxes or
foreign taxes with respect to your investment in and distributions from the
Fund. Non-U.S. shareholders and tax-exempt shareholders are subject to different
tax treatment not described above. A state income (and possibly local income
and/or intangible property) tax exemption is generally available to the extent
the Fund's distributions are derived from interest on (or, in the case of
intangibles taxes, the value of its assets is attributable to) certain
U.S.Government obligations, provided in some states that certain thresholds for
holdings of such obligations and/or reporting requirements are satisfied. You
should consult your tax adviser for specific advice.

PERFORMANCE

The Fund's 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 of the Fund's
respective class of shares divided by 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 rate would result in higher
performance figures. The total return calculations for the Class B shares
reflect deduction of the applicable CDSC imposed on a redemption of shares held
for the applicable period. All calculations assume that dividends are reinvested
at net asset value on the reinvestment dates during the periods. The total
return for 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 (except as shown in "The Fund's
Financial Highlights"). 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> 51

HOW TO BUY SHARES

- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
OPENING AN ACCOUNT
- --------------------------------------------------------------------------------

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 Resources 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 designating a
ACCUMULATION bank account from which funds may be drawn.
PROGRAM
(MAAP) 2. The amount you elect to invest will be withdrawn
automatically from your bank or credit union account.

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
BUYING ADDITIONAL CLASS A AND CLASS B
SHARES
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
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 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> 52
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------

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 Resources 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 Investor Services 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 ACCOUNT STATEMENTS THAT 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 in
accordance with procedures approved by the Board of Directors. Short-term debt
investments maturing within 60 days are valued at amortized cost, which the
Board of Directors has determined to approximate 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 values have been materially affected by events occurring after the closing
of a foreign market, assets are valued by a method that the Board believes
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.
- -------------------------------------------------------------------------------

15
<PAGE> 53

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 Exchange and
transmit it to John Hancock Funds before its close of business to receive that
day's offering price.
<TABLE>
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:

<CAPTION>
COMBINED
SALES CHARGE AS REALLOWANCE REALLOWANCE TO
SALES CHARGE AS A PERCENTAGE OF AND SERVICE FEE AS SELLING BROKERS AS
AMOUNT INVESTED A PERCENTAGE OF THE AMOUNT A PERCENTAGE OF A PERCENTAGE OF
(INCLUDING SALES CHARGE) OFFERING PRICE INVESTED OFFERING PRICE(+) THE OFFERING PRICE(*)
- ------------------------ ----------------- --------------- ------------------ ---------------------
<S> <C> <C> <C> <C>
Less than $50,000 5.00% 5.26% 4.25% 4.01%
$50,000 to $99,999 4.50% 4.71% 3.75% 3.51%
$100,000 to $249,999 3.50% 3.63% 2.85% 2.61%
$250,000 to $499,999 2.50% 2.56% 2.10% 1.86%
$500,000 to $999,999 2.00% 2.04% 1.60% 1.36%
$1,000,000 and over 0.00%(**) 0.00%(**) (***) 0.00%(***)
<FN>
(*) Upon notice to Selling Brokers with whom it has sales agreements, John Hancock Funds may
reallow an amount up to the full applicable sales charge. A Selling Broker to whom
substantially the entire sales charge is reallowed or who receives these incentives 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 CDSC 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 aggregate as follows: 1% on sales to $4,999,999, 0.50% on the next
$5 million and 0.25% on amounts of $10 million and over.

(+) At the time of sale, John Hancock Funds pays to Selling Brokers the first year's service
fee in advance in an amount equal to 0.25% of the net assets invested in the Fund.
Thereafter, it pays the service fee periodically in arrears in an amount up to 0.25% of
the Fund's average annual net assets. Selling Brokers receive the fee as compensation for
providing personal and account maintenance services to shareholders.
</TABLE>

Sales charges ARE NOT APPLIED to any dividends 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."

16
<PAGE> 54

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 CDSC period), a CDSC 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 CDSC 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 distributions 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.

- -------------------------------------------------------------------------------
YOU MAY QUALIFY FOR A REDUCED SALES CHARGE
ON YOUR INVESTMENT IN CLASS A SHARES.
- -------------------------------------------------------------------------------

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 the 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."

17
<PAGE> 55

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 Director or officer of the Fund; a Director or officer of the Adviser and
its affiliates or Selling Brokers; employees or sales representatives of any
of the foregoing; retired officers, employees or Directors of any of the
foregoing; a member of the immediate family of any of the foregoing; or any
fund, pension, profit sharing or other benefit plan for the individuals
described above.

- - Any state, county, city or any instrumentality, department, authority, or
agency of these entities 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 type of
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/her
plan distributions directly to the Fund.

- - A member of an affinity group financial services plan.*

Class A shares of the Fund may 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.

18
<PAGE> 56

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, 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:
<TABLE>
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:

<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
them to defray its expenses related to providing the Fund with distribution
services connected to the sale of Class B shares, such as compensating Selling
Brokers for selling these shares. The combination of the CDSC and the
distribution and service fees makes it possible for the Fund to sell Class B
shares without 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 the 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>

19
<PAGE> 57

- --------------------------------------------------------------------------------
UNDER CERTAIN CIRCUMSTANCES, THE CDSC ON CLASS B AND
CERTAIN CLASS A SHARE REDEMPTIONS WILL BE WAIVED.
- --------------------------------------------------------------------------------

- - Redemptions of Class B shares made under 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 establish your Systematic Withdrawal Plan
and 10% of the value of your 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 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
have less than $1,000 invested in the Fund.

- - 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.

20
<PAGE> 58

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 it is reasonably satisfied that investments recently made
by check or Invest-by-Phone have been collected (which may take up to 10
calendar days).

- --------------------------------------------------------------------------------
TO ASSURE ACCEPTANCE OF YOUR REDEMPTION
REQUEST, PLEASE FOLLOW THESE PROCEDURES.
- --------------------------------------------------------------------------------

Once your shares are redeemed, the Fund generally sends you payment on the next
business day. When you redeem your shares, you may realize a taxable gain or
loss depending 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 Exchange is closed.
Investor Services employs the following procedures to
confirm that instructions received by telephone are
genuine. Your name, the account number, taxpayer
identification number applicable to the account and other
relevant information may be requested. In addition,
telephone instructions are recorded.

You may redeem up to $100,000 by telephone, but the
address on the account must not have changed for the
last thirty 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 certificated form.

21
<PAGE> 59
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
TYPE OF REGISTRATION REQUIREMENTS
-------------------- ------------
Individual, Joint Tenants, Sole A letter of instruction signed (with
Proprietorship, Custodial titles where applicable) by all persons
(Uniform Gifts or Transfer to authorized to sign for the account,
to Minors Act), General exactly as it is registered with the
Partners 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(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 instructions. 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.

Shareholders will be notified before these redemptions are to be made or
this fee is imposed, and will have 60 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 dividend reinvestments
exceeds the number of shares redeemed, repeated redemptions from a smaller
account may eventually trigger this policy.

- --------------------------------------------------------------------------------

22
<PAGE> 60

ADDITIONAL SERVICES AND PROGRAMS

EXCHANGE PRIVILEGE

If your investment objective changes, or if you wish to achieve further
diversification, John Hancock offers other funds with a wide range of investment
goals. Contact your registered representative or Selling Broker and request a
prospectus for the John Hancock funds that interest you. Read the prospectus
carefully before exchanging your shares. You can exchange shares of each class
of the Fund only for shares of the same class of another John Hancock fund. For
this purpose, John Hancock funds with only one class of shares will be treated
as Class A, whether or not they have been so designated.

- -------------------------------------------------------------------------------
YOU MAY EXCHANGE SHARES OF THE FUND ONLY FOR SHARES
OF THE SAME CLASS OF ANOTHER JOHN HANCOCK FUND.
- -------------------------------------------------------------------------------

Exchanges between funds with shares that 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 Limited-Term Government Fund and John Hancock Intermediate
Maturity 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

23
<PAGE> 61

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.

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

24
<PAGE> 62

REINVESTMENT PRIVILEGE

1. You will not be subject to a sales charge on Class A shares that you reinvest
in a John Hancock fund 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 the purpose 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 THE 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

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 OF
FUNDS 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 initial sales charges on your purchases of Class A shares or to 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 of the Account Privileges Application.

25
<PAGE> 63

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 plan 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.

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) Plans) and Section 457 Plans.

2. The initial investment minimum or aggregate minimum for any of the above
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.

INVESTMENTS, TECHNIQUES AND RISK FACTORS

SECURITIES OF FOREIGN ISSUERS. Investments in foreign securities may involve a
greater degree of risk than those 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
generally subject to the same uniform accounting, auditing and financial
reporting requirements as domestic companies; also foreign regulation may differ
considerably from domestic regulation of stock exchanges, brokers and
securities. Security trading practices abroad may offer less protection to
investors such as the Fund.

26
<PAGE> 64

Additionally, because foreign securities may be quoted or denominated in
currencies other than the U.S. dollar, changes in foreign currency exchange
rates will affect the Fund's net asset value, the value of dividends and
interest earned, gains and losses realized on the sale of securities, and net
investment income and gains, if any, that the Fund distributes to shareholders.
Securities transactions undertaken in some foreign markets may not be settled
promptly. Therefore, the Fund's investments on foreign exchanges may be less
liquid and subject to the risk of fluctuating currency exchange rates pending
settlement. The expense ratios of funds investing significant amounts of their
assets in foreign securities can be expected to be higher than those of mutual
funds investing solely in domestic securities since the expenses of these funds,
such as the cost of maintaining custody of foreign securities and advisory fees,
are higher.

These risks of foreign investing may be intensified in the case of investments
in emerging markets or countries with limited or developing capital markets.
These countries generally are located in the Asia-Pacific region, Eastern
Europe, Latin and South America and Africa. Security prices in these markets can
be significantly more volatile than in more developed countries, reflecting the
greater uncertainties of investing in less established markets and economies.
Political, legal and economic structures in many of these emerging market
countries may be undergoing significant evolution and rapid development, and
they may lack the social, political, legal and economic stability characteristic
of more developed countries. Emerging market countries may have failed in the
past to recognize private property rights. They may have relatively unstable
governments, present the risk of nationalization of businesses, restrictions on
foreign ownership, or prohibitions on repatriation of assets, and may have less
protection of property rights than more developed countries. Their economies may
be 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 these
countries. Securities of issuers located in these countries may have limited
marketability and may be subject to more abrupt or erratic price movements.

27
<PAGE> 65

purchase or sell a specific currency at a future date at a price set at the time
of the contract. Although certain strategies could minimize the risk of loss due
to a decline in the value of the hedged foreign currency, they could also limit
any potential gain which might result from an increase in the value of the
currency. See the Statement of Additional Information for further discussion of
the uses and risks of forward foreign currency exchange contracts.

RESTRICTED AND ILLIQUID SECURITIES. The Fund may invest up to 10% of its net
assets in illiquid investments, which include repurchase agreements maturing in
more than seven days, restricted securities and securities that are not readily
marketable. Without regard to this limitation, the Fund may invest in restricted
securities eligible for resale to certain institutional investors pursuant to
Rule 144A under the Securities Act of 1933 as long as such securities meet
liquidity guidelines established by the Board of Directors.

LENDING OF SECURITIES AND REPURCHASE AGREEMENTS. For the purpose of realizing
additional income, the Fund may lend to broker-dealers portfolio securities
amounting to not more than 33% of its total assets taken at current value or may
enter into repurchase agreements. In a repurchase agreement, the Fund buys a
security subject to the right and obligation to sell it back to the counterparty
at the same price plus accrued interest. These transactions must be fully
collateralized at all times. The Fund may reinvest any cash collateral in
short-term, liquid debt securities. However, these transactions may involve some
credit risk to the Fund if the other party should default on its obligation and
the Fund is delayed in or prevented from recovering the collateral. Securities
loaned by the Fund will remain subject to fluctuations of market value.

REVERSE REPURCHASE AGREEMENTS. The Fund may enter into reverse repurchase
agreements which involve the sale of a security by the Fund to a bank or
securities firm and its agreement to repurchase the instrument at a specified
time and price plus an agreed amount of interest. The Fund will use the proceeds
to purchase other investments. Reverse repurchase agreements are considered to
be borrowings by the Fund and as an investment practice may be considered
speculative. The Fund will enter into a reverse repurchase agreement only when
the Adviser determines that the interest income to be earned from the investment
of the proceeds is greater than the interest expense of the transaction. To
minimize various risks associated with reverse repurchase agreements, the Fund
will establish and maintain with the Custodian a separate account consisting of
cash or liquid, high grade debt securities in an amount at least equal to the
repurchase prices of the securities (plus any accrued interest thereon) under
such agreements. In addition, the Fund's investment restrictions provide that
the Fund will not enter into reverse repurchase agreements exceeding, in the
aggregate, 33 1/3% of the value of its total assets (including for this purpose
other borrowings of the Fund). The Fund will enter into reverse repurchase
agreements only with selected registered broker/dealers or with federally
insured banks or savings and loan associations which are approved in advance as
being creditworthy by the Board of Directors. Under procedures established by
the Board of Directors, the Adviser will monitor the creditworthiness of the
firms involved.

28
<PAGE> 66

The use of reverse repurchase agreements involves leverage. Leverage allows any
investment gains made with the additional monies received (in excess of the
costs of the reverse repurchase agreement) to increase the net asset value of
the Fund's shares faster than would otherwise be the case. On the other hand, if
the additional monies received are invested in ways that do not fully recover
the costs of such transactions to the Fund, the net asset value of the Fund
would fall faster than would otherwise be the case.

SHORT SALES AGAINST-THE-BOX. The Fund may make short sales against-the-box for
the purpose of deferring realization of gain or loss for Federal income tax
purposes. A short sale "against-the-box" is a short sale in which the Fund owns
an equal amount of the securities sold short 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. The Fund
may engage in such short sales only to the extent that not more than 10% of the
Fund's total assets (determined at the time of the short sale) is held as
collateral for such sales.

OPTIONS AND FUTURES TRANSACTIONS. The Fund may buy and sell options contracts
on equity securities, stock indices and foreign currencies, stock index and
currency futures contracts and options on such futures contracts. Options and
futures contracts are bought and sold to enhance return or to manage the Fund's
exposure to changing security prices. Some options and futures strategies,
including selling futures, buying puts and writing calls, tend to hedge a Fund's
investments against price fluctuations. Other strategies, including buying
futures, writing puts, and buying calls, tend to increase market exposure.
Options and futures may be combined with each other or with forward contracts in
order to adjust the risk and return characteristics of the overall strategy. All
of the Fund's futures contracts and options on futures contracts will be traded
on a U.S. commodity exchange or board of trade. The Fund's transactions in
options and futures contracts may be limited by the requirements of the Code for
qualification as a regulated investment company. See the Statement of Additional
Information for further discussion of options and futures transactions,
including tax effects and investment risks.

29
<PAGE> 67

RISKS ASSOCIATED WITH OPTIONS, FUTURES AND OTHER DERIVATIVE INSTRUMENTS. The
risks associated with the Fund's transactions in options, futures and other
derivative instruments may include some or all of the following:

Market Risk. Options and futures transactions, as well as other derivative
instruments, involve the risk that the applicable market will move against the
Fund's derivative position and that the Fund will incur a loss. For derivative
contracts other than purchased options, this loss may exceed the amount of the
initial investment made or the premium received by the Fund.

Leverage and Volatility Risk. Derivative instruments may increase or leverage
the Fund's exposure to a particular market risk, which may increase the
volatility of the Fund's net asset value. The Fund may partially offset the
leverage inherent in certain derivative instruments by maintaining a segregated
account consisting of cash and liquid, high grade debt securities, by holding
offsetting portfolio securities or currency positions or by covering written
options.

Correlation Risk. The Fund's success in using derivative instruments to hedge
portfolio assets depends on the degree of price correlation between the
derivative instrument and the hedged asset. Imperfect correlation may be caused
by several factors, including temporary price disparities among the trading
markets for the derivative instruments, the assets underlying the derivative
instrument and the Fund's portfolio assets.

Credit Risk. Over-the-counter instruments involve a risk that the issuer or
counterparty will fail to perform its contractual obligations.

Liquidity and Valuation Risk. Some derivative instruments are not readily
marketable or may become illiquid under adverse market conditions. In addition,
during periods of extreme market volatility, an exchange may suspend or limit
trading in an exchange-traded derivative instrument, which may make the contract
temporarily illiquid and difficult to price. The staff of the SEC takes the
position that certain over-the-counter options are subject to the Fund's 10%
limit on illiquid investments.

30
<PAGE> 68

(NOTES)
<PAGE> 69
JOHN HANCOCK
GLOBAL
JOHN HANCOCK RESOURCES
GLOBAL RESOURCES FUND FUND

INVESTMENT ADVISER
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603 CLASS A AND CLASS B SHARES
PROSPECTUS
PRINCIPAL DISTRIBUTOR MARCH 1, 1996
John Hancock Funds, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
A MUTUAL FUND SEEKING TO PROTECT
CUSTODIAN THE PURCHASING POWER OF INVESTORS'
Investors Bank & Trust Company CAPITAL AND TO ACHIEVE GROWTH OF
24 Federal Street CAPITAL.
Boston, Massachusetts 02110

TRANSFER AGENT
John Hancock Investor Services
Corporation
P.O. Box 9116
Boston, Massachusetts 02205-9116

INDEPENDENT AUDITORS
Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

HOW TO OBTAIN INFORMATION
ABOUT THE FUND

For Service Information
For Telephone Exchange call 1-800-225-5291
For Investment-by-Phone 101 HUNTINGTON AVENUE
For Telephone Redemption BOSTON, MASSACHUSETTS 02199-7603
TELEPHONE 1-800-225-5291
For TDD call 1-800-554-6713

6300P 3/96 (LOGO) Printed on Recycled Paper
<PAGE> 70

JOHN HANCOCK
GOVERNMENT
INCOME FUND

CLASS A AND CLASS B SHARES
PROSPECTUS

MARCH 1, 1996

<TABLE>
- ---------------------------------------------------------------------------------------------
TABLE OF CONTENTS

<CAPTION>
Page
----
<S> <C>
Expense Information................................................................... 2
The Fund's Financial Highlights....................................................... 3
Investment Objective and Policies..................................................... 5
Organization and Management of the Fund............................................... 7
Alternative Purchase Arrangements..................................................... 8
The Fund's Expenses................................................................... 10
Dividends and Taxes................................................................... 11
Performance........................................................................... 11
How to Buy Shares..................................................................... 13
Share Price........................................................................... 14
How to Redeem Shares.................................................................. 20
Additional Services and Programs...................................................... 22
Investments, Techniques and Risk Factors.............................................. 25
</TABLE>

This Prospectus sets forth the information about John Hancock Government
Income Fund (the "Fund"), a diversified series of John Hancock Series, Inc. (the
"Company"), that you should know before investing. Please read and retain it for
future reference.

Additional information about the Fund and the Company has been filed with the
Securities and Exchange Commission (the "SEC"). You can obtain a copy of the
Fund's Statement of Additional Information, dated March 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).

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 October 31, 1995
adjusted to reflect current fees and expenses. Actual fees and expenses may be
greater or less than those indicated.

* 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.
*** Other Expenses include transfer agent, legal, audit, custody and other
expenses.
+ Redemption by wire fee (currently $4.00) not included.
</TABLE>

<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............................................................... $ 56 $79 $ 105 $178
Class B Shares
-- Assuming complete redemption at end of period......................... $ 69 $89 $ 122 $201
-- Assuming no redemption................................................ $ 19 $59 $ 102 $201
</TABLE>

(This example should not be considered a representation of past or future
expenses. Actual expenses may be greater or less than those shown.)

2
<PAGE> 72

THE FUND'S FINANCIAL HIGHLIGHTS

The information in the following table of financial highlights has been
audited by Ernst & Young LLP, the Fund's independent auditors, whose unqualified
report is included in the Fund's 1995 Annual Report and 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 ("Investor Services") at the address or telephone number
listed on the front page of this Prospectus.

<TABLE>
Selected data for each class of shares outstanding throughout each period is
as follows:

<CAPTION>
FOR THE PERIOD
SEPTEMBER 30, 1994
(COMMENCEMENT OF
YEAR ENDED OPERATIONS) TO
OCTOBER 31, 1995(A) OCTOBER 31, 1994
------------------- -------------------
<S> <C> <C>
CLASS A
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period................................................. $ 8.75 $ 8.85
-------- ------
Net Investment Income................................................................ 0.72 0.06
Net Realized and Unrealized Gain (Loss) on Investments and Financial Futures
Contracts.......................................................................... 0.57 (0.10)
-------- ------
Total from Investment Operations..................................................... 1.29 (0.04)
-------- ------
Less Distributions:
Dividends from Net Investment Income................................................. (0.72) (0.06)
-------- -------
Net Asset Value, End of Period....................................................... $ 9.32 $ 8.75
======== ======
Total Investment Return at Net Asset Value(b)(c)..................................... 15.32% (0.45%)**
Total Adjusted Investment Return at Net Asset Value(c)............................... 15.28% (0.46%)**
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted)............................................ $470,569 $ 223
Ratio of Expenses to Average Net Assets(b)........................................... 1.19% 0.12%*
Ratio of Net Investment Income to Average Net Assets(b).............................. 7.38% 0.71%*
Portfolio Turnover Rate.............................................................. 102% 92%
<FN>

- ---------------

* Annualized

** Not annualized

(a) On December 22, 1994, John Hancock Advisers, Inc. became the investment
adviser of the Fund.

(b) Excluding interest expense, which equalled 0.04% for Class A for the year
ended October 31, 1995 and 0.02%, 0.01%, 0.01% and 0.15% for Class B for the
years ended October 31, 1995, 1994, 1993 and 1992, respectively.

</TABLE>

3
<PAGE> 73

THE FUND'S FINANCIAL HIGHLIGHTS

<TABLE>
Selected data for Class B shares outstanding throughout each period is as follows:

<CAPTION>
PERIOD
YEAR ENDED OCTOBER 31, ENDED
----------------------------------------------------------------------------- OCTOBER 31,
1995 1994 1993 1992 1991 1990 1989 1988(D)
-------- -------- -------- -------- ------- ------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS B
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of
Period........................... $ 8.75 $ 10.05 $ 9.83 $ 9.79 $ 9.37 $ 9.98 $ 10.01 $10.58
Net Investment Income.............. 0.65 0.65 0.70 0.80 0.89 0.88 0.98 0.69
Net Realized and Unrealized Gain
(Loss) on Investments and
Financial Futures Contracts...... 0.57 (1.28) 0.24 0.03 0.40 (0.54) (0.01) (0.45)
-------- -------- -------- -------- ------- ------- ------- ------
Total from Investment Operations... 1.22 (0.63) 0.94 0.83 1.29 0.34 0.97 0.24
Less Distributions:
Dividends from Net Investment
Income........................... (0.65) (0.65) (0.72) (0.79) (0.87) (0.95) (1.00) (0.64)
Distributions from Net Realized
Gains on Investments Sold and
Financial Futures Contracts...... -- (0.02) -- -- -- -- -- (0.17)
-------- -------- -------- -------- ------- ------- ------- ------
Total Distributions................ (0.65) (0.67) (0.72) (0.79) (0.87) (0.95) (1.00) (0.81)
-------- -------- -------- -------- ------- ------- ------- ------
Net Asset Value, End of Period..... $ 9.32 $ 8.75 $ 10.05 $ 9.83 $ 9.79 $ 9.37 $ 9.98 $10.01
======== ======== ======== ======== ======== ======= ======= ======
Total Investment Return at Net
Asset Value(b)(c)................ 14.49% (6.42)% 9.86% 8.81% 14.38% 3.71% 10.22% 2.40%
Total Adjusted Investment Return at
Net Asset Value(c)............... 14.47% 6.43% 9.85% 8.66% --
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's
omitted)......................... $226,954 $241,061 $293,413 $225,540 $129,014 $64,707 $26,568 $6,966
Ratio of Expenses to Average Net
Assets(b)........................ 1.89% 1.93% 2.00% 2.00% 2.00% 2.04% 2.82% 2.76%
Ratio of Expense Reimbursement to
Average Net Assets............... -- -- -- -- -- (0.04)% (0.82)% (1.38)%
-------- -------- -------- -------- ------- ------- ------- ------
Ratio of Net Expenses to Average
Net Assets....................... 1.89% 1.93% 2.00% 2.00% 2.00% 2.00% 2.00% 1.38%
======== ======== ======== ======== ======== ======= ======= ======
Ratio of Net Investment Income to
Average Net Assets............... 7.26% 6.98% 7.06% 8.03% 9.09% 9.22% 9.64% 6.34%
Portfolio Turnover Rate............ 102% 92% 138% 112% 162% 83% 151% 174%
<FN>

- ---------------

* Annualized

** Not annualized

(a) On December 22, 1994, John Hancock Advisers, Inc. became the investment
adviser of the Fund.

(d) Financial highlights, including total return, are for the period from
February 23, 1988 (date of the Fund's initial offering of shares to the
public) to October 31, 1988 and have not been annualized. Per share
information has been calculated using the average number of shares
outstanding.

</TABLE>

4
<PAGE> 74

INVESTMENT OBJECTIVE AND POLICIES
The Fund's investment objective is to earn a high level of current income
consistent with preservation of capital by investing primarily in securities
that are issued or guaranteed as to principal and interest by the U.S.
Government, its agencies or instrumentalities ("U.S. Government securities").
The Fund may seek to enhance its current return and may seek to hedge against
changes in interest rates by engaging in transactions involving options (subject
to certain limits), futures and options on futures. The Fund expects that under
normal market conditions it will invest at least 80% of its total assets in U.S.
Government securities (and related repurchase agreements and forward
commitments) which include:

- -------------------------------------------------------------------------------
THE FUND SEEKS TO EARN A HIGH LEVEL OF
CURRENT INCOME CONSISTENT WITH
PRESERVATION OF CAPITAL BY INVESTING IN
U.S. GOVERNMENT SECURITIES.
- -------------------------------------------------------------------------------
(1) Obligations issued by the U.S. Treasury differing only in their interest
rates, maturities and times of issuance:
(a) U.S. Treasury bills with a maturity of one year or less;
(b) U.S. Treasury notes with maturities of one to ten years; or
(c) U.S. Treasury bonds generally with maturities greater than ten years;
and
(2) Obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities which may be supported by:
(a) the full faith and credit of the U.S. Government (e.g., direct pass-
through certificates of the Government National Mortgage Association
("Ginnie Mae"));
(b) the right of the issuer to borrow from the U.S. Government (e.g.,
securities of the Federal Home Loan banks); or
(c) the credit of the instrumentality (e.g., bonds issued by Federal
National Mortgage Association.)
John Hancock Advisers, Inc. (the "Adviser") will attempt to minimize excessive
fluctuations in net asset value per share, so at times the highest yielding
government securities then available may not be selected for investment if, in
the view of the Adviser, future interest rate movements could result in
depreciation of value of such securities. The Fund may take full advantage of
the entire range of maturities of U.S. Government securities and may adjust the
dollar-weighted average maturity of its portfolio from time to time based in
large part on the Adviser's expectation as to future changes in interest rates.

As to the balance of the Fund's assets, where consistent with the investment
objective, the Fund may:
1. invest in U.S. dollar denominated securities issued or guaranteed by foreign
governments which are considered stable by the Adviser, or any of the
political subdivisions, instrumentalities, authorities or agencies of these
governments. Such securities will generally be rated within the four highest
rating categories by a nationally recognized rating organization (e.g.,
Standard & Poor's Ratings Group ("S&P") or Moody's Investors Service, Inc.
("Moody's")) or if not so rated, determined to be of equivalent quality in
the opinion of the Adviser;

5
<PAGE> 75

provided that the Fund may invest up to 10% of its total assets in securities
which may be rated B or better by a nationally recognized rating
organization.
2. invest in other "asset backed securities" which are not included as
"government asset backed" securities and are rated in one of the two highest
rating categories by a nationally recognized credit rating organization or if
not so rated, determined to be of equivalent investment quality in the
opinion of the Adviser;
3. engage in hedging transactions, including options, interest rate futures
contracts and options thereon, subject to certain limitations described below
(see "Investments, Techniques and Risk Factors");
4. enter into repurchase agreements and reverse repurchase agreements and invest
in when issued securities and restricted securities, subject to certain
limitations described below (see "Investments, Techniques and Risk Factors");
and
5. invest in (for liquidity purposes) high quality, short-term debt securities
with remaining maturities of one year or less ("money market instruments")
such as certificates of deposit, bankers' acceptances, corporate debt
securities, commercial paper and related repurchase agreements.

Asset backed securities, like Ginnie Mae certificates, are securities which
represent a participation in or are secured by and payable from, a stream of
payments generated by particular assets, most often a pool of assets similar to
one another. Types of other asset backed securities include automobile
receivable securities, credit card receivable securities and mortgage backed
securities such as collateralized mortgage obligations ("CMOs") and real estate
mortgage investment conduits ("REMICs"). See "Investments, Techniques and Risk
Factors" and the Statement of Additional Information for a discussion of
government and non-government asset backed securities and for a description of
securities lending, short-term obligations, government securities, options,
futures and forward contracts, as well as the ratings of various fixed income
securities by Moody's and S&P. See "Investments, Techniques and Risk Factors."

The U.S. Government guarantees the payment of principal and interest of the
Fund's U.S. Government securities, but does not guarantee the value or yield of
such securities or the Fund's shares of common stock. To the extent the Fund
invests in government asset backed (e.g., Ginnie Mae Certificates) and non-
government asset backed securities, it may experience a high rate of repayment
when interest rates decline and may therefore face the necessity of reinvesting
at a time when rates of return are relatively low which could result in a
reduction in principal if the securities were acquired at a premium. See
"Certain Investment Practices" in the Statement of Additional Information for
further discussion.

The value of the securities held by the Fund, and therefore the net asset value
per share, will fluctuate with interest rate changes. Generally, a rise in
interest rates will result in a decrease in the Fund's net asset value, while a
decline will result in an increase in the Fund's net asset value. Therefore at
the time of redemption, your shares may be worth more or less than the value at
the time of purchase.

6
<PAGE> 76

The Fund will employ certain hedging techniques to seek to reduce risks
associated with changes in interest rates. However, these hedging techniques
will result in transaction costs to the Fund and there can be no assurance the
interest rate risks will be eliminated. Zero coupon bonds are issued at a
significant discount from their principal amount in lieu of paying interest
periodically; therefore, their value is subject to greater fluctuation in
response to changes in market interest rates than bonds which pay interest
currently. See "Investments, Techniques and Risk Factors."

Foreign government obligations which are appropriate for investment by the Fund
may be subject to risks generally applicable to foreign securities. See
"Investments, Techniques and Risk Factors."

The Fund has adopted certain investment restrictions which are enumerated in
detail in the Statement of Additional Information where they are classified as
fundamental or nonfundamental. Those restrictions designated as fundamental may
not be changed without shareholder approval. The Fund's investment objective to
invest (under normal market conditions) 80% of its assets in U.S. Government
securities and its investment policies are nonfundamental and may be changed by
a vote of the Board of Directors without shareholder approval, upon 30 days'
prior written notice to shareholders. Notwithstanding the Fund's fundamental
investment restriction prohibiting investments in other investment companies,
the Fund may, pursuant to an order granted by the SEC, invest in other
investment companies in connection with a deferred compensation plan for the
non-interested Trustees of the John Hancock funds. There can be no assurance
that the Fund will achieve its investment objective.

ORGANIZATION AND MANAGEMENT OF THE FUND
The Fund is organized as a separate, diversified portfolio of the Company, an
open-end management investment company organized as a Maryland corporation in
1987. The Company reserves the right to create and issue a number of series of
shares, or funds or classes thereof, which are separately managed and have
different investment objectives. The Board of Directors has authorized the
issuance of two classes of the Fund, designated Class A and Class B. The shares
of each class represent an interest in the same portfolio of investments of the
Fund. Each class has equal rights as to voting, redemption, dividends and
liquidation. However, each class bears different distribution and transfer agent
fees and other expenses. Also, Class A and Class B shareholders have exclusive
voting rights with respect to their distribution plans. The Company does not
intend to hold annual meetings of shareholders, except when required by federal
or state law, although special meetings may be held for such purposes as
electing or removing Directors, changing fundamental policies or approving a
management contract. The Company, under certain circumstances, will assist in
shareholder communications with other shareholders.

7
<PAGE> 77

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 brokers that have agreements with John Hancock Funds ("Selling
Brokers"). Certain Fund officers are also officers of the Adviser and John
Hancock Funds.

- -------------------------------------------------------------------------------

JOHN HANCOCK ADVISERS, INC. ADVISES
INVESTMENT COMPANIES HAVING A TOTAL ASSET
VALUE OF MORE THAN $16 BILLION.

- -------------------------------------------------------------------------------

Barry Evans is Vice President and Portfolio Manager of the Fund and also leads a
team of managers on several other Hancock funds. Mr. Evans has managed both
funds since he joined John Hancock in 1986.

ALTERNATIVE PURCHASE ARRANGEMENTS

- -------------------------------------------------------------------------------
AN ALTERNATIVE PURCHASE PLAN ALLOWS YOU TO
CHOOSE THE METHOD OF PAYMENT THAT IS BEST
FOR YOU.
- -------------------------------------------------------------------------------

8
<PAGE> 78

FACTORS TO CONSIDER IN CHOOSING AN ALTERNATIVE

9
<PAGE> 79

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.

THE FUND'S EXPENSES

For managing its investment and business affairs, the Fund pays a fee to the
Adviser which for the 1995 fiscal year was 0.625% of the Fund's average daily
net assets. The advisory fee paid by the Fund is higher than that of most other
funds but is comparable to fees paid by funds that invest in similar 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 0.25% of the Class A shares' average daily
net assets and an aggregate annual rate of 1.00% of the Class B shares' average
daily net assets. In each case, up to 0.25% for both Class A and Class B shares
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; (iii) unreimbursed distribution expenses under the Fund's prior
distribution plans; (iv) distribution expenses incurred by other investment
companies which sell all or substantially all of their assets to, merge with or
otherwise engage in a reorganization transaction with the Fund; and (v) with
respect to Class B shares only, interest expenses on unreimbursed distribution
expenses. The service fees will be used to compensate Selling Brokers and others
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. 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 October 31, 1995, an
aggregate of $8,575,319 of distribution expenses or 3.69% of the average net
assets of the Fund's Class B shares was not reimbursed or recovered by John
Hancock Funds through the receipt of deferred sales charges or Rule 12b-1 fees
in prior periods.

10
<PAGE> 80

Information on the Fund's total expenses is in the Financial Highlights section
of this Prospectus.

DIVIDENDS AND TAXES

DIVIDENDS. The Fund generally declares dividends daily and distributes them
monthly, representing all or substantially all of its net investment income. The
Fund will distribute net realized capital gains, if any, annually.

Dividends are reinvested in additional shares of your class unless you elect the
option to receive 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."

- -------------------------------------------------------------------------------

THE FUND GENERALLY DECLARES DIVIDENDS
DAILY AND DISTRIBUTES THEM MONTHLY.

- -------------------------------------------------------------------------------

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 you take them in
cash or reinvest in additional shares. Certain dividends may be paid in January
of a given year but may be taxable as if you received them the previous
December.

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 or 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
taxpayer identification number you provide is correct and that you are not
subject to back-up withholding of Federal income tax. If you do not provide this
information or are otherwise subject to this withholding, the Fund may be
required to withhold 31% of your dividends and the proceeds of redemptions or
exchanges.

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.
Non-U.S. shareholders and tax-exempt shareholders are subject to different tax
treatment not described above. A state income (and possibly local income and/or
intangible property) tax exemption is generally available to the extent the
Fund's distributions are derived from interest on (or, in the case of
intangibles taxes, the value of its assets is attributable to) certain U.S.
Government obligations, provided in some states that certain thresholds for
holdings of such obligations and/or reporting requirements are satisfied. You
should consult your tax adviser for specific advice.

PERFORMANCE
Yield reflects the Fund's rate of income on portfolio investments as a
percentage of its share price. Yield is computed by annualizing the result of
dividing the
- -------------------------------------------------------------------------------
THE FUND MAY ADVERTISE ITS YIELD AND TOTAL
RETURN.
- -------------------------------------------------------------------------------

11
<PAGE> 81
net investment income per share over a 30 day period by the maximum offering
price per share on the last day of that period. Yield is also calculated
according to accounting methods that are standardized for all stock and bond
funds. Because yield accounting methods differ from the methods used for
other accounting purposes, the Fund's yield may not equal the income paid on
shares or the income reported in the Fund's financial statements.

The Fund's 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.

Both total return and yield 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 and yield calculations for the Class B
shares reflect 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 and yield of Class A and Class B shares will be
calculated separately and, because each class is subject to different expenses,
the total return and yield may differ with respect to that 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. Both yield and total return is an
historical calculation, and are not an indication of future performance. See
"Alternative Purchase Arrangements -- Factors to Consider in Choosing an
Alternative."

12
<PAGE> 82
HOW TO BUY SHARES

<TABLE>
- ------------------------------------------------------------------------------------

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.

- --------------------------------------------------------------------------------
OPENING AN ACCOUNT
[/R]
- --------------------------------------------------------------------------------

<S> <C> <C>
- --------------------------------------------------------------------------------------
BY CHECK 1. Make your check payable to John Hancock Investor Services
Corporation, P.O. Box 9115, Boston, MA 02205-9115.
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 Government Income 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 designating a
ACCUMULATION bank account from which funds may be drawn.
</TABLE>

- -------------------------------------------------------------------------------

<TABLE>
BUYING ADDITIONAL CLASS A AND CLASS B
SHARES

- -------------------------------------------------------------------------------

<S> <C> <C>
PROGRAM 2. The amount you elect to invest will be withdrawn automatically
(MAAP) 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 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.
- --------------------------------------------------------------------------------------
</TABLE>

13
<PAGE> 83

<TABLE>
- --------------------------------------------------------------------------------------
<S> <C> <C>
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.

- -------------------------------------------------------------------------------

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 Government Income 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 Investor Services 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.
- --------------------------------------------------------------------------------------
</TABLE>

- -------------------------------------------------------------------------------
YOU WILL RECEIVE ACCOUNT STATEMENTS THAT
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 Board of Directors. Short-term debt
investments maturing within 60 days are valued at amortized cost which the Board
has determined to approximate 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 Board of Directors believes 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.

14
<PAGE> 84

<TABLE>
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:

(*) 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 or who receives these incentives 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 CDSC 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 aggregate as follows:
1% on sales to $4,999,999, 0.50% on the next $5 million and 0.25% on
amounts of $10 million and over.

(+) At the time of sale, John Hancock Funds pays to Selling Brokers the first
year's service fee in advance in an amount equal to 0.25% of the net
assets invested in the Fund. Thereafter, it pays the service fee
periodically in arrears in an amount up to 0.25% of the Fund's average
annual net assets. Selling Brokers receive the fee as compensation for
providing personal and account maintenance services to shareholders.

</TABLE>

Sales charges ARE NOT APPLIED to any dividends 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> 85

12 months after the end of the calendar month in which the purchase was made
(the CDSC period), a CDSC 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 CDSC will be imposed at the above rate.

QUALIFYING FOR A REDUCED SALES CHARGE. If you invest more than $100,000 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 the 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

- -------------------------------------------------------------------------------
YOU MAY QUALIFY FOR A REDUCED SALES CHARGE
ON YOUR INVESTMENT IN
CLASS A SHARES.
- -------------------------------------------------------------------------------

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."
EXAMPLE:

16
<PAGE> 86

is the rate that would otherwise be applicable to investments of less than
$100,000. 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 Director or officer of the Fund; 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 type of
depository institution, its trust departments or common trust funds if it is
purchasing $1 million or more for non-discretionary customers or accounts.*

- - A member of an approved affinity group financial services plan.*

- ------------------
*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 be purchased without an initial sales charge in
connection with certain liquidation, merger or acquisition transactions
involving other investment companies or personal holding companies.

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, and next from the shares you have held the longest
during the six-year

17
<PAGE> 87

period. The CDSC is waived on redemptions in certain circumstances. See the
discussion "Waiver of Contingent Deferred Sales Charges" below.

<TABLE>
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:

<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>

<TABLE>
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 the 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.

<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 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:
- - Redemptions of Class B shares made under 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 establish your Systematic Withdrawal Plan
and 10% of the value of your subsequent investments (less redemptions) in that
account at the time you notify Investor Services. This
- -------------------------------------------------------------------------------
UNDER CERTAIN CIRCUMSTANCES, THE CDSC ON
CLASS B AND CERTAIN CLASS A SHARE
REDEMPTIONS WILL BE WAIVED.
- -------------------------------------------------------------------------------

18
<PAGE> 88

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
the 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
have less than $1,000 invested in the Fund.

- - 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.

19
<PAGE> 89

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 it is reasonably satisfied that investments recently made
by check or Invest-by-Phone have been collected (which may take up to 10
calendar days).

<TABLE>
- --------------------------------------------------------------------------------------
<S> <C>
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 Exchange is closed.
Investor Services employs the following procedures to
confirm that instructions received by telephone are
genuine. Your name, the account number, taxpayer
identification number applicable to the account and other
relevant information may be requested. In addition,
telephone instructions are recorded.

You may redeem up to $100,000 by telephone, but the address
on the account must not have changed for the last thirty
days. A check will be mailed to the exact name(s) and
address shown on the account.

Telephone redemption is not available for IRAs or other
tax-qualified retirement plans or shares of the Fund that
are in certificated 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
use EASI-Line. EASI-Line's telephone number is
1-800-338-8080.
- --------------------------------------------------------------------------------------
BY WIRE If you have a telephone redemption form on file with the
Fund, redemption proceeds of $1,000 or more can be wired on
the next business day to your designated bank account, and
a fee (currently $4.00) will be deducted. You may also use
electronic funds transfer to your assigned bank account,
and the funds are usually collectable after two business
days. Your bank may or may not charge 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
attached to the Prospectus.
- --------------------------------------------------------------------------------------
</TABLE>

20
<PAGE> 90
<TABLE>
- --------------------------------------------------------------------------------------
<S> <C>
IN WRITING Send a stock power or "letter of instruction" specifying
the name of the Fund, the dollar amount or the number of
shares to be redeemed, your name, class of shares, your
account number and the additional requirements listed below
that apply to your particular account.
- --------------------------------------------------------------------------------------
</TABLE>

</TABLE>

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 instructions. 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 less than $1,000 (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 or if the value of the
account falls below the required minimum as a result of market action. 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 60 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 dividend reinvestments exceeds the
number of shares redeemed, repeated redemptions from a smaller account may
eventually trigger this policy.
- -------------------------------------------------------------------------------

21
<PAGE> 91

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.

Exchanges between funds with shares that 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 Limited-Term Government Fund and Intermediate Maturity
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.

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

22
<PAGE> 92

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.

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:

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 a John Hancock fund 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 the purpose 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 THE FUND OR ANOTHER JOHN
HANCOCK FUND WITHOUT PAYING AN ADDITIONAL
SALES CHARGE.
- -------------------------------------------------------------------------------

2. Any portion of your redemption may be reinvested in the Fund shares or in
shares of 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.

23
<PAGE> 93

SYSTEMATIC WITHDRAWAL PLAN

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 OF
FUNDS 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 initial sales charges on your purchases of Class A shares or to 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)

- -------------------------------------------------------------------------------
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 plan 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.

- -------------------------------------------------------------------------------
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.

24
<PAGE> 94

RETIREMENT PLANS

INVESTMENTS, TECHNIQUES AND RISK FACTORS
RESTRICTED AND ILLIQUID SECURITIES. The Fund may invest up to 10% of its total
assets in illiquid investments, which include repurchase agreements maturing in
more than seven days, restricted securities and securities not readily
marketable. Although the Fund may purchase restricted securities which can be
offered and sold to "qualified institutional buyers" under Rule 144A of the
Securities Act, its present investment restriction limits such investment to the
foregoing 10% limitation.
LENDING OF SECURITIES AND REPURCHASE AGREEMENTS. For the purpose of realizing
additional income, the Fund may lend to broker-dealers portfolio securities
amounting to not more than 33% of its total assets taken at current value or may
enter into repurchase agreements. In a repurchase agreement, the Fund buys a
security subject to the right and obligation to sell it back to the counterparty
at the same price plus accrued interest. These transactions must be fully
collateralized at all times. The Fund may reinvest any cash collateral in
short-term, liquid debt securities. However, these transactions may involve some
credit risk to the Fund if the other party should default on its obligation and
the Fund is delayed in or prevented from recovering the collateral. Securities
loaned by the Fund will remain subject to fluctuations of market value.
REVERSE REPURCHASE AGREEMENTS. A reverse repurchase agreement involves the sale
of a security by the Fund and its agreement to repurchase the instrument at a
specified time and price. The Fund will maintain a segregated account consisting
of liquid, high grade debt securities to cover its obligations under reverse
repurchase agreements with selected firms approved in advance by the Board of
Directors. The Fund will use the proceeds to purchase other investments. Reverse
repurchase agreements are considered to be borrowings by the Fund and as an
investment practice may be considered speculative. Repurchase agreements magnify
the potential for gain or loss on the portfolio securities of the Fund and
therefore increase the possibility of fluctuation in the Fund's net asset value.
The Fund may borrow money for temporary administrative or emergency purposes. To
avoid the potential leveraging effects of the Fund's borrowings, additional
investments will not be made while borrowings are in excess of 5% of the Fund's
total assets. The Fund will limit its investments in reverse repurchase
agreements and other borrowings to no more than 33 1/3% of it total assets.
WHEN-ISSUED, DELAYED DELIVERY AND FORWARD COMMITMENT SECURITIES. The Fund may
purchase securities on a forward or "when-issued" or "delayed delivery" basis

25
<PAGE> 95

and may purchase or sell securities on a forward commitment basis to hedge
against anticipated changes in interest rates and prices. When the Fund engages
in such transactions, it relies on the seller or the buyer, as the case may be,
to consummate the transaction. Failure to consummate the transaction may result
in the Fund's losing the opportunity to obtain an advantageous price and yield.
If the Fund chooses to dispose of the right to acquire a when-issued or delayed
delivery security prior to its acquisition or dispose of its right to deliver or
receive against a forward commitment, it can incur a gain or a loss.
SECURITIES OF FOREIGN ISSUERS. The Fund may invest in securities issued or
guaranteed by foreign governments or any of the political subdivisions,
instrumentalities, authorities or agencies of these governments. Investments in
foreign securities may involve a greater degree of risk than those 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 governments are not generally subject to the same
uniform accounting, auditing and financial reporting requirements as the U.S.
government; also foreign regulation may differ considerably from domestic
regulation of stock exchanges, brokers and securities. Security trading
practices abroad may offer less protection to investors such as the Fund.
Securities transactions undertaken in some foreign markets may not be settled
promptly. Therefore, the Fund's investments on foreign exchanges may be less
liquid and subject to the risk of fluctuating currency exchange rates pending
settlement.
The Fund may also invest in so-called "Brady Bonds" and other sovereign debt
securities of countries that have restructured or are in the process of
restructuring sovereign debt pursuant to the Brady Plan. The Brady Plan
contemplates the exchange of commercial bank debt for newly issued bonds (Brady
Bonds). Multilateral institutions such as the World Bank and the International
Monetary Fund the ("IMF") support the restructuring by providing funds pursuant
to loan agreements or other arrangements which enable the debtor nation to
collateralize the new Brady Bonds or to repurchase outstanding bank debt at a
discount. Brady Bonds may involve a high degree of risk or present the risk of
default. As of the date of this Prospectus, the Fund is not aware of the
occurrence of any payment defaults on Brady Bonds. Investors should recognize
however, that Brady Bonds have been issued only recently, and accordingly, they
do not have a long payment history. Although Brady Bonds may be collateralized
by U.S. Government securities, repayment of principal and interest is not
guaranteed by the U.S. Government.
INVESTMENT GRADE AND LOWER RATED SECURITIES. The Fund may invest in securities
that are rated in the lowest category of "investment grade" (BBB by S&P or Baa
by Moody's) or, with respect to 10% of its total assets, in lower rated
securities or unrated securities determined to be of comparable quality.
Securities in the lowest investment grade are considered medium grade
obligations and normally exhibit adequate protection parameters. However, these
securities also have speculative characteristics. Adverse changes in economic
conditions or other circumstances are more likely to lead to weakened capacity
to make principal and

26
<PAGE> 96

interest payments than in the case of higher grade obligations. Debt obligations
rated in the lower ratings categories, or which are unrated, involve greater
volatility of price and risk of loss of principal and income. In addition, lower
ratings reflect a greater possibility of an adverse change in financial
condition affecting the ability of the issuer to make payments of interest and
principal. The market price and liquidity of lower rated fixed-income securities
generally respond to short-term economic and market developments to a greater
extent than do the price and liquidity of higher rated securities, because these
developments are perceived to have a more direct relationship to the ability of
an issuer of lower rated securities to meet its ongoing debt obligations. See
the Statement of Additional Information for a description of the risks
associated with investing in high-yield, high-risk securities.
SHORT TERM TRADING AND PORTFOLIO TURNOVER. Short-term trading means the
purchase and subsequent sale of a security after it has been held for a
relatively brief period of time. Short-term trading of fixed-income securities
should not increase direct transaction costs since fixed-income securities are
normally traded on a principal basis without brokerage commissions. Short-term
trading may have the effect of increasing portfolio turnover and may increase
net short-term capital gains, distributions from which would be taxable to
shareholders as ordinary income. The Fund does not intend to invest for the
purpose of seeking short-term profits. The Fund's portfolio securities may be
changed, however, without regard to the holding period of these securities
(subject to certain tax restrictions), when the Adviser deems that this action
will help achieve the Fund's objective given a change in an issuer's operations
or changes in general market conditions. The Fund's portfolio turnover rate is
set forth in the table under the caption "The Fund's Financial Highlights."
TEMPORARY DEFENSIVE INVESTMENTS. During periods of unusual market conditions
when the Adviser believes that investing for temporary defensive purposes is
appropriate, part or all of the assets of the Fund may be invested in cash or
cash equivalents consisting of (i) obligations of banks (including certificates
of deposit, bankers' acceptances and repurchase agreements) with assets of
$100,000,000 or more; (ii) commercial paper rated within the two highest rating
categories of a nationally recognized rating organization; (iii) investment
grade short-term notes; and (iv) related repurchase agreements.
OPTIONS AND FUTURES TRANSACTIONS. The Fund may write (sell) covered call and
cash secured put options and purchase call and put options on debt securities
and may enter into interest rate futures contracts and options on such futures
contracts. Options and futures contracts are bought and sold to manage the
Fund's exposure to changing interest rates and security prices. Some options and
futures strategies, including selling futures, buying puts and writing calls,
tend to hedge a Fund's investment against price fluctuations. Other strategies,
including buying futures, writing puts, and buying calls, tend to increase
market exposure. Options and futures may be combined with each other or with
forward contracts in order to adjust the risk and return characteristics of the
overall strategy. The Fund may also write straddles, which are combinations of
put and call options on the same security. The Fund does not currently engage in
the writing of options for the

27
<PAGE> 97

purpose of enhancing its total return and has undertaken not to commence such
investment activity without having first given 60 days' written notice to
shareholders in advance thereof.
The Fund will not engage in a transaction in futures or options on futures if,
immediately thereafter, the sum of initial margin deposits and premiums required
to establish positions in futures contracts and options on futures would exceed
5% of the Fund's total assets. The Fund will not purchase a call or put option
if as a result the premium paid for the option together with premiums paid for
all other options, interest rate futures contracts and options thereon then held
by the Fund, exceed 10% of the Fund's total net assets. The loss incurred by the
Fund investing in futures contracts and in writing options on futures is
potentially unlimited and may exceed the amount of any premium received. The
Fund's transactions in options and futures contracts may be limited by the
requirements of the Code for qualification as a regulated investment company.
See the Statement of Additional Information for further discussion of options
and futures transactions, including tax effects and investment risks.
MORTGAGE-BACKED SECURITIES. The Fund may invest in mortgage-backed securities.
A mortgage-backed security may be an obligation of the issuer backed by a
mortgage or pool of mortgages or a direct interest in an underlying pool of
mortgages. Some mortgage-backed securities, such as collateralized mortgage
obligations (CMOs), make payments of both principal and interest at a variety of
intervals; others make semiannual interest payments at a predetermined rate and
pay principal at maturity (like a typical bond). Mortgage-backed securities are
based on different types of mortgages including those on commercial real estate
or residential properties. Mortgage-backed securities often have stated
maturities of up to thirty years when they are issued, depending upon the length
of the mortgages underlying the securities. In practice, however, unscheduled or
early payments of principal and interest on the underlying mortgages may make
the securities effective maturity shorter than this, and the prevailing interest
rates may be higher or lower than the current yield of the Fund's portfolio at
the time the Fund receives the payments for reinvestment. Mortgage-backed
securities may have less potential for capital appreciation than comparable
fixed-income securities, due to the likelihood of increased prepayments of
mortgages as interest rates decline. If the Fund buys mortgage-backed securities
at a premium, mortgage foreclosures and prepayments of principal by mortgagors
(which may be made at any time without penalty) may result in some loss of the
Fund's principal investment to the extent of the premium paid.
The value of mortgage-backed securities may also change due to shifts in the
market's perception of issuers. In addition, regulatory or tax changes may
adversely affect the mortgage securities market as a whole. Non-government
mortgage-backed securities may offer higher yields than those issued by
government entities, but also may be subject to greater price changes than
government issues.
"Stripped" mortgage-backed securities are created when a U.S. Government agency
or a financial institution separates the interest and principal components of a
mortgage-backed security and sells them as individual securities. The holder of

28
<PAGE> 98

the "principal-only" security ("PO") receives the principal payments made by the
underlying mortgage-backed security, while the holder of the "interest-only"
security ("IO") receives interest payments from the same underlying security.
The Fund has no present intention of investing in IO's and PO's.
Other types of mortgage-backed securities will likely be developed in the future
and the Fund may invest in them if the Adviser determines they are consistent
with the Fund's investment objectives and policies.
ZERO COUPON BONDS. Zero coupon Treasury securities are (i) U.S. Treasury bills,
and both notes and bonds which have been stripped of their unmatured interests
coupons and receipts or (ii) certificates representing interest in such stripped
obligations. A zero coupon security pays no interest in cash to its holder
during its life although interest is accrued currently for federal income tax
purposes. Its value to an investor consists of the difference between its face
value at the time of maturity and the price for which it was acquired, which is
generally an amount significantly less than its face value (sometimes referred
to as a "deep discount" price). Investing in "zero coupon" Treasury securities
may help to preserve capital during periods of declining interest rates. For
example, if interest rates decline, Ginnie Mae certificates owned by the Fund
which were purchased at greater than par are more likely to be prepaid, which
would cause a loss of principal. In anticipation of this, the Fund might
purchase zero coupon Treasury securities, the value of which would be expected
to increase when interest rates decline. Zero coupon Treasury securities do not
entitle the holder to any periodic payments of interest prior to maturity.
Accordingly, such securities usually trade at a deep discount from their face or
par value and will be subject to greater fluctuations of market value in
response to changing interest rates than debt obligations of comparable
maturities which make periodic distributions of interest. On the other hand,
because there are not periodic interest payments to be reinvested prior to
maturity, zero coupon securities eliminate the reinvestment risk and lock in a
rate of return to maturity. Current federal tax law requires that a holder (such
as the Fund) of a zero coupon security accrue a portion of the discount at which
the security was purchased as income each year even though the Fund receives no
interest payment in cash on the security during the year.
In order to satisfy the income distribution requirements applicable to regulated
investment companies under the Code, the Fund may therefore be required to
obtain cash for distribution corresponding to such accrued income by selling
portfolio securities, possibly under disadvantageous circumstances, or through
borrowing.
RISKS ASSOCIATED WITH OPTIONS, FUTURES AND OTHER DERIVATIVE INSTRUMENTS. The
risks associated with the Fund's transactions in options, futures and other
derivative instruments including mortgaged and asset back securities may include
some or all of the following:
Market Risk. Options and futures transactions, as well as other derivative
instruments, involve the risk that the applicable market will move against the
Fund's derivative position and that the Fund will incur a loss. For derivative
contracts other than purchased options, this loss may exceed the amount of the
initial investment made or the premium received by the Fund. Investments in

29
<PAGE> 99

mortgage-backed and indexed securities are subject to the prepayment, extension,
interest rate and other market risks described above.
Leverage and Volatility Risk. Derivative instruments may increase or leverage
the Fund's exposure to a particular market risk, which may increase the
volatility of the Fund's net assets value. The Fund may partially offset the
leverage inherent in derivative instruments by maintaining a segregated account
consisting of cash and liquid, high grade debt securities, by holding offsetting
portfolio securities or currency positions or by covering written options.
Correlation Risk. The Fund's success in using derivative instruments to hedge
portfolio assets depends on the degree of price correlation between the
derivative instrument and the hedged asset. Imperfect correlation may be caused
by several factors, including temporary price disparities among the trading
markets for the derivative instruments, the assets underlying the derivative
instrument and the Fund's portfolio assets.
Credit Risk. Over-the-counter instruments involve a risk that the issuer or
counterparty will fail to perform its contractual obligations.
Liquidity and Valuation Risk. Some derivative instruments are not readily
marketable or may become illiquid under adverse market conditions. In addition,
during periods of extreme market volatility, an exchange may suspend or limit
trading in an exchange-traded derivative instrument, which may make the contract
temporarily illiquid and difficult to price. The staff of the SEC takes the
position that certain over-the-counter options are subject to the Fund's 10%
limit on illiquid investments. The Fund's ability to terminate over-the-counter
derivative instruments may depend on the cooperation of the counterparties to
these instruments. For derivative instruments that are not heavily traded, the
only source of price quotations may be the selling dealer or counterparty.

30
<PAGE> 100

(NOTES)

<PAGE> 101

JOHN HANCOCK JOHN HANCOCK
GOVERNMENT INCOME FUND GOVERNMENT
INCOME FUND
INVESTMENT ADVISER
John Hancock Advisers, Inc. CLASS A AND CLASS B SHARES
101 Huntington Avenue PROSPECTUS
Boston, Massachusetts 02199-7603
MARCH 1, 1996
PRINCIPAL DISTRIBUTOR
John Hancock Funds, Inc. A MUTUAL FUND SEEKING TO EARN
101 Huntington Avenue A HIGH LEVEL OF CURRENT
Boston, Massachusetts 02199-7603 INCOME CONSISTENT WITH
PRESERVATION OF CAPITAL BY
CUSTODIAN INVESTING IN U.S. GOVERNMENT
Investors Bank & Trust Company SECURITIES.
24 Federal Street
Boston, Massachusetts 02110 101 HUNTINGTON AVENUE
BOSTON, MASSACHUSETTS 02199-7603
TRANSFER AGENT TELEPHONE 1-800-225-5291
John Hancock Investor Services
Corporation
P.O. Box 9116
Boston, Massachusetts 02205-9116

INDEPENDENT AUDITORS
Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

HOW TO OBTAIN INFORMATION
ABOUT THE FUND

For Service Information
For Telephone Exchange call
1-800-225-5291
For Investment-by-Phone
For Telephone Redemption

For TDD call 1-800-554-6713

5600P 3/96 (LOGO) Printed on Recycled Paper
<PAGE> 102

JOHN HANCOCK

HIGH YIELD
BOND FUND

CLASS A AND CLASS B SHARES
PROSPECTUS

MARCH 1, 1996

<TABLE>
- ----------------------------------------------------------------------------------------------
TABLE OF CONTENTS

<CAPTION>
Page
----
<S> <C>
Expense Information................................................................... 2
The Fund's Financial Highlights....................................................... 3
Investment Objective and Policies..................................................... 5
Organization and Management of the Fund............................................... 8
Alternative Purchase Arrangements..................................................... 9
The Fund's Expenses................................................................... 11
Dividends and Taxes................................................................... 11
Performance........................................................................... 12
How to Buy Shares..................................................................... 14
Share Price........................................................................... 16
How to Redeem Shares.................................................................. 22
Additional Services and Programs...................................................... 24
Investments, Techniques and Risk Factors.............................................. 27
Appendix A............................................................................ A-1
</TABLE>

This Prospectus sets forth the information about John Hancock High Yield Bond
Fund (the "Fund"), a diversified series of John Hancock Series, Inc. (the
"Company"), that you should know before investing. Please read and retain it for
future reference.

Additional information about the Fund and the Company has been filed with the
Securities and Exchange Commission (the "SEC"). You can obtain a copy of the
Fund's Statement of Additional Information, dated March 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).

THE FUND INVESTS PRIMARILY (AND IS PERMITTED TO INVEST UP TO 100% OF ITS
ASSETS) IN NON-INVESTMENT GRADE DEBT SECURITIES ISSUED BY DOMESTIC ISSUERS
(COMMONLY KNOWN AS "JUNK BONDS") AND FOREIGN ISSUERS, WHICH SECURITIES (I)
ENTAIL PRICE VOLATILITY, DEFAULT AND OTHER RISKS GREATER THAN THOSE ASSOCIATED
WITH HIGHER RATED SECURITIES AND (II) MAY PRESENT PROBLEMS OF LIQUIDITY AND
VALUATION. INVESTORS SHOULD CAREFULLY CONSIDER THESE RISKS BEFORE INVESTING. SEE
"INVESTMENTS, TECHNIQUES AND RISK FACTORS."

EXPENSE INFORMATION

<TABLE>
<CAPTION>
CLASS A CLASS B
SHARES SHARES
------- -------
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum sales charge imposed on purchases (as a percentage of offering price)......................... 4.50% None
Maximum sales charge imposed on reinvested dividends.................................................. None None
Maximum deferred sales charge......................................................................... None* 5.00%
Redemption fee+....................................................................................... None None
Exchange fee.......................................................................................... None None
ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets)
Management fee++...................................................................................... 0.58% 0.58%
12b-1 fee**........................................................................................... 0.25% 1.00%
Other expenses***..................................................................................... 0.33% 0.33%
Total Fund operating expenses......................................................................... 1.16% 1.91%
<FN>

++ The calculation of the management fee is based on average net assets for the
fiscal year ended October 31, 1995. See "The Fund Expenses".
</TABLE>

<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.............................................................. $ 56 $80 $ 106 $180
Class B Shares
-- Assuming complete redemption at end of period........................ $ 69 $90 $ 123 $204
-- Assuming no redemption............................................... $ 19 $60 $ 103 $204
</TABLE>

(This example should not be considered a representation of past or future
expenses. Actual expenses may be greater or less than those shown.)

2
<PAGE> 104

THE FUND'S FINANCIAL HIGHLIGHTS

The information in the following table of financial highlights has been
audited by Ernst & Young LLP, the Fund's independent auditors, whose unqualified
report is included in the Fund's 1995 Annual Report and 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 ("Investor Services") at the address or telephone number
listed on the front page of this Prospectus.

<TABLE>
Selected data for Class A shares outstanding throughout each period is as
follows:

<CAPTION>
FOR THE PERIOD
FROM JUNE 30,
1993
YEAR ENDED OCTOBER (COMMENCEMENT
31, OF OPERATIONS)
--------------------- TO OCTOBER 31,
1995(B) 1994(2) 1993
------- ------- --------------
<S> <C> <C> <C>
CLASS A
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period............................................ $7.33 $8.23 $8.10
------- ------- ------
Net Investment Income........................................................... 0.72 0.80(a) 0.33
Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency
Transactions................................................................... (0.12) (0.83) 0.09
------- ------- ------
Total from Investment Operations................................................ 0.60 (0.03) 0.42
------- ------- ------
Less Distributions:
Dividends from Net Investment Income............................................ (0.73) (0.82) (0.29)
Distributions from Net Realized Gain on Investments Sold........................ -- (0.05) --
------- ------- ------
Total Distributions............................................................. (0.73) (0.87) (0.29)
------- ------- ------
Net Asset Value, End of Period.................................................. $7.20 $7.33 $8.23
======= ======= ======
Total Investment Return at Net Asset Value(c)................................... 8.83% (0.59)% 4.96%(d)
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted)....................................... $26,452 $11,696 $2,344
Ratio of Expenses to Average Net Assets......................................... 1.16% 1.16% 0.91%*
Ratio of Net Investment Income to Average Net Assets............................ 10.23% 10.14% 12.89%*
Portfolio Turnover Rate......................................................... 98% 153% 204%
</TABLE>

- ---------------

<PAGE> 105
<TABLE>
Selected data for Class B shares outstanding throughout each period is as
follows:

<CAPTION>
YEAR ENDED OCTOBER 30, PERIOD ENDED
-------------------------------------------------------------------------------------- OCTOBER 31
1995(B) 1994 1993 1992 1991 1990 1989 1988 1987(1)
-------- -------- ------- ------- ------- ------- ------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS B
PER SHARE OPERATING
PERFORMANCE
Net Asset Value,
Beginning of Period.... $ 7.33 $ 8.23 $ 7.43 $ 7.44 $ 6.45 $ 8.14 $ 9.70 $ 9.94 $ 9.95
-------- -------- -------- ------- ------- ------- ------- ------- ------
Net Investment Income.... 0.67 0.74(a) 0.80 0.87 0.98 1.09 1.16 1.07(a) 0.01
Net Realized and
Unrealized
Gain (Loss) on
Investments and
Foreign Currency
Transactions........... (0.13) (0.83) 0.75 (0.04) 1.06 (1.68) (1.55) (0.14) (0.02)
-------- -------- -------- ------- ------- ------- ------- ------- ------
Total from Investment
Operations............. (0.54) (0.09) 1.55 0.83 2.04 (0.59) (0.39) 0.93 (0.01)
-------- -------- -------- ------- ------- ------- ------- ------- ------
Less Distributions
Dividends from net
Investment Income...... (0.67) (0.76) (0.75) (0.84) (0.98) (1.09) (1.14) (1.17) --
Distributions from Net
Realized Gain on
Investments Sold....... -- (0.05) -- -- -- -- -- -- --
Distributions from
Capital Paid-In........ -- -- -- -- (0.07) (0.01) (0.03) -- --
-------- -------- -------- ------- ------- ------- ------- ------- ------
Total Distributions...... (0.67) (0.81) (0.75) (0.84) (1.05) (1.10) (1.17) (1.17) --
-------- -------- -------- ------- ------- ------- ------- ------- ------
Net Asset Value, End of
Period................. $7.20 $7.33 $8.23 $7.43 $7.44 $6.45 $8.14 $9.70 $9.94
======== ======== ======== ======= ======= ======= ======= ======= ======
Total Investment Return
on Net Asset
Value(c)............... 7.97% (1.33)% 21.76% 11.56% 34.21% (8.04)% (4.51)% 9.77% (0.10)%
Total Adjusted Investment
Return at Net Asset
Value(e)(g)............ -- -- -- -- -- (8.07)% (4.82)% 9.01% (0.41)%

RATIOS AND SUPPLEMENTAL
DATA
Net Assets, End of Period
(000's omitted)........ $180,586 $160,739 $154,214 $98,560 $72,023 $37,097 $33,964 $20,852 $ 110
Ratio of Expenses to
Average Net Assets..... 1.89% 1.91% 2.08% 2.25% 2.24% 2.22% 2.20% 2.00% 0.03%
Ratio of Adjusted
Expenses to Average Net
Assets(e).............. -- -- -- -- -- 2.25% 2.51% 2.76% 0.34%
-------- -------- -------- ------- ------- ------- ------- ------- ------
Ratio of Net Investment
Income to Average Net
Assets................. 9.42% 9.39% 10.07% 11.09% 13.73% 14.59% 12.23% 10.97% 0.09%
Ratio of Adjusted Net
Investment Income
(Loss) to Average Net
Assets(e).............. -- -- -- -- -- 14.56% 11.92% 10.21% (0.22)%
Portfolio Turnover
Rate................... 98% 153% 204% 206% 93% 96% 100% 60% 0%
<FN>

- ---------------

* On an annualized basis.

(1) Financial highlights, including total return, are for the period October 26,
1987 (date of the Fund's initial offering of shares to the public) to
October 31, 1987 and have not been annualized.

(a) On average month end shares outstanding.

(b) On December 22, 1994, John Hancock Advisers, Inc. became the Investment
adviser of the Fund.

(d) Not annualized.

(e) On an unreimbursed basis without expense reduction.

(g) An estimated total return calculation takes into consideration fees and
expenses waived or borne by the Adviser during the periods shown.

</TABLE>

4
<PAGE> 106

INVESTMENT OBJECTIVE AND POLICIES
The Fund's primary investment objective is to maximize current income without
assuming undue risk by investing in a diversified portfolio consisting primarily
of lower-rated, high yielding, fixed income securities, such as (1) domestic and
foreign corporate bonds; (2) debentures and notes; (3) convertible securities;
(4) preferred stocks; and (5) domestic and foreign government obligations. As a
secondary objective, the Fund seeks capital appreciation, but only when it is
consistent with the primary objective of maximizing current income. There is no
assurance that the Fund will achieve its investment objectives.

- -------------------------------------------------------------------------------
THE FUND SEEKS TO MAXIMIZE CURRENT INCOME
WITHOUT ASSUMING UNDUE RISK.
- -------------------------------------------------------------------------------

The higher yields sought by the Fund are generally obtainable from securities
rated in the lower categories by recognized rating services, i.e. rated lower
than "Baa" by Moody's Investors Service, Inc. ("Moody's") or "BBB" by Standard
and Poor's Ratings Group ("S&P"), or unrated securities determined by John
Hancock Advisers, Inc. (the "Adviser") to be of comparable credit quality
(commonly called "junk bonds"). While providing higher yields, these lower
quality securities generally involve greater volatility of price and greater
risk of principal and income than securities in the higher rating categories
and, accordingly, may be considered speculative. In general, these risks
include: (1) substantial market price volatility; (2) changes in credit status,
including weaker overall credit condition of issuers and risks of default; and
(3) industry, market and economic risks, including limited liquidity and
secondary market support. The risks of lower rated securities are discussed in
greater detail under "Investments, Techniques and Risk Factors" and should be
carefully considered by investors.

Under normal market conditions, at least 65% of the Fund's total assets may be
invested in bonds or debentures rated "Baa" or lower by Moody's, or "BBB" or
lower by S&P; however, no more than 10% of the Fund's total assets may be
invested in securities that are rated as low as "CC" by S&P or "Ca" by Moody's.
Unrated securities will also be considered for investment by the Fund when the
Adviser believes that the issuer's financial condition, or the protection
afforded by the terms of the securities themselves, limits the risk to the Fund
to a degree comparable to that of rated securities consistent with the Fund's
objectives and policies. The rating limitations applicable to the Fund's
investments apply at the time of acquisition of a security; any subsequent
change in the rating or quality of a security will not require the Fund to sell
the security. A general description of Moody's and S&P's ratings and the
distribution of the Fund's assets across the various ratings categories are set
forth in Appendix A.

The Fund's investments in debt securities may at times include zero coupon bonds
and payment-in-kind bonds. Zero coupon bonds are issued at a significant
discount from their principal amount in lieu of paying interest periodically.
Payment-in-kind bonds allow the issuer, at its option, to make current interest
payments on the bonds either in cash or in additional bonds. The market prices
of zero coupon and payment-in-kind bonds are affected to a greater extent by
interest rate changes, and thereby tend to be more volatile than securities
which pay interest periodically and in cash. The Fund accrues income on these
securities for tax and accounting purposes, and this income is required to be
distributed to

5
<PAGE> 107

shareholders. Because no cash is received at the time income accrues on these
securities, the Fund may be forced to liquidate other investments to make
distributions. At times when the Fund invests in zero-coupon and payment-in-kind
bonds, it will not be pursuing its primary objective of maximizing current
income.

Although the Fund intends to maintain investment emphasis in debt securities of
domestic issuers, the Fund may invest without limitation in debt securities of
foreign issuers, including those issued by supranational entities (such as the
World Bank). The Fund may also purchase debt securities issued in any country,
developed or undeveloped. Investments in securities of issuers in
non-industrialized countries generally involve more risk and may be considered
speculative. The Fund may also enter into forward foreign currency exchange
contracts for the purchase or sale of foreign currency for hedging purposes. The
risks of foreign investments should be carefully considered by investors. See
"Investments, Techniques and Risk Factors."

Included among domestic debt securities eligible for purchase by the Fund are
adjustable and variable or floating rate securities, mortgage related securities
(including stripped securities, collateralized mortgage obligations and
multi-class pass-through securities), asset-backed securities and callable
bonds. Callable bonds have a provision permitting the issuer, at its option to
"call" or redeem the bonds. If an issuer were to redeem bonds held by the Fund
during a time of declining interest rates, the Fund might not be able to
reinvest the proceeds in bonds providing the same coupon return as the bonds
redeemed.

To the extent that the Fund does not invest in the securities described above,
the Fund may:

1. invest (for liquidity purposes) in high quality, short-term debt securities
with remaining maturities of one year or less ("money market instruments"),
including government obligations, certificates of deposit, bankers'
acceptances, short-term corporate debt securities, commercial paper and
related repurchase agreements;

2. invest up to 10% of its total assets in municipal obligations, including
municipal bonds issued at a discount, in circumstances where the Adviser
determines that investing in such obligations would facilitate the Fund's
ability to accomplish its investment objectives;

3. lend its portfolio securities, enter into repurchase agreements and reverse
repurchase agreements, purchase restricted and illiquid securities and
purchase securities on a when-issued or forward commitment basis.

4. write (sell) covered call and put options and purchase call and put options
on debt securities and securities indices in an effort to increase current
income and for hedging purposes; and

5. purchase and sell interest rate futures contracts on debt securities and
securities index futures contracts, and write and purchase options on such
futures contracts for hedging purposes.

6
<PAGE> 108

During periods of unusual market conditions when the Adviser believes that
investing for temporary defensive purposes is appropriate, part or all of the
assets of the Fund may be invested in cash or cash equivalents consisting of:

1. obligations of banks (including certificates of deposit, bankers' acceptances
and repurchase agreements) with assets of $100,000,000 or more;

2. commercial paper rated within the two highest rating categories of a
nationally recognized rating organization;

3. investment grade short-term notes;

4. obligations issued or guaranteed by the U.S. Government or any of its
agencies or instrumentalities; and

5. related repurchase agreements.

As a matter of fundamental policy, the Fund will not invest more than 25% of its
total assets (taken at market value) in the securities of issuers engaged in any
one industry, except that the Fund may invest up to 40% of the value of its
total assets in the securities of issuers engaged in the electric utility and
telephone industries. The Adviser follows a policy under which it will not cause
the Fund to invest more than 25% of its total assets in the securities of
issuers engaged in the electric utility industry or the telephone industry
unless yields available for four consecutive weeks in the four highest rating
categories on new issue bonds in this industry (issue size of $50 million or
more) have averaged greater than the yields of new issue long-term industrial
bonds similarly rated (issue size of $50 million or more) and, in the opinion of
the Adviser, the relative return available from the electric utility or
telephone industry and the relative risk, marketability, quality and
availability of securities of this industry justifies such an investment.
Obligations issued or guaranteed by the U.S. Government or its agencies and
instrumentalities are not subject to the foregoing 25% limitation. In addition,
for purposes of this limitation, determinations of what constitutes an industry
are made in accordance with specific industry codes set forth in the Standard
Industrial Classification Manual and without considering groups of industries
(e.g., all utilities) to be an industry.

The Fund has adopted certain investment restrictions which are enumerated in
detail in the Statement of Additional Information where they are classified as
fundamental or nonfundamental. Those restrictions designated as fundamental may
not be changed without shareholder approval. The Fund's investment objectives
and investment policies (except for its policy on concentration) are
nonfundamental, which means that they may be changed by the Board of Directors
without shareholder approval. However, the Fund's investment objectives may not
be changed without 30 days' prior written notice first having been given to
shareholders. If there is a change in the Fund's investment objectives, you
should consider whether the Fund remains an appropriate investment in light of
your current financial position and needs. Notwithstanding the Fund's
fundamental investment restriction prohibiting investments in other investment
companies, the Fund may, pursuant to an order granted by the SEC, invest in
other investment companies in connection with a deferred compensation plan for
the non-interested Trustees of the John Hancock funds.

7
<PAGE> 109

RISK FACTORS. An investment in the Fund is intended for long-term investors who
can accept the risks associated with investing primarily in lower rated
fixed-income securities. The Fund's investments will be subject to market
fluctuation and other risks inherent in all securities. The yield, return and
price volatility of the Fund depend on the type and quality of its investments
as well as market and other factors. In addition, the Fund's potential
investments and management techniques may entail specific risks. For additional
information about risks associated with an investment in the Fund, see
"Investments, Techniques and Risk Factors."

ORGANIZATION AND MANAGEMENT OF THE FUND
The Fund is a diversified series of the Company, an open-end management
investment company organized as a Maryland corporation in 1987. The Company
reserves the right to create and issue a number of series of shares, or funds or
classes thereof, which are separately managed and have different investment
objectives. The Board of Directors has authorized the issuance of two classes of
the Fund, designated Class A and Class B. The shares of each class represent an
interest in the same portfolio of investments of the Fund. Each class has equal
rights as to voting, redemption, dividends and liquidation. However, each class
bears different distribution and transfer agent fees and other expenses. Also,
Class A and Class B shareholders have exclusive voting rights with respect to
their distribution plans. The Company is not required to and does not intend to
hold annual meetings of shareholders, although special meetings may be held for
such purposes as electing or removing Directors, changing fundamental policies
or approving a management contract. The Company, under certain circumstances,
will assist in shareholder communications with other shareholders.

- -------------------------------------------------------------------------------

JOHN HANCOCK ADVISERS, INC. ADVISES
INVESTMENT COMPANIES HAVING A TOTAL ASSET
VALUE OF MORE THAN $16 BILLION.

- -------------------------------------------------------------------------------

8
<PAGE> 110

Investment decisions are made by the Fund's portfolio manager, Arthur N.
Calavritinos. He is also responsible for coverage of the industrial group for
the Adviser's fixed-income funds.

ALTERNATIVE PURCHASE ARRANGEMENTS

- -------------------------------------------------------------------------------
AN ALTERNATIVE PURCHASE PLAN ALLOWS YOU TO
CHOOSE THE METHOD OF PAYMENT THAT IS BEST
FOR YOU.
- -------------------------------------------------------------------------------

9
<PAGE> 111

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."

10
<PAGE> 112

THE FUND'S EXPENSES

For managing its investment and business affairs, the Fund pays a fee to the
Adviser which for the 1995 fiscal year was 0.58% of the Fund's average daily net
assets. The advisory fee paid by the Fund is higher than that of most other
funds but is comparable to fees paid by funds that invest in similar 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 0.25% of the Class A shares' average daily
net assets and an aggregate annual rate of 1.00% of the Class B shares' average
daily net assets. Up to 0.25% for Class A shares and Class B shares 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; (iii) unreimbursed distribution expenses under the Fund's prior
distribution plans; (iv) distribution expenses incurred by other investment
companies which sell all or substantially all of their assets to, merge with or
otherwise engage in a reorganization transaction with the Fund; and (v) with
respect to Class B shares only, interest expenses on unreimbursed distribution
expenses. The service fees will be used to compensate Selling Brokers and others
for providing personal and account maintenance services to shareholders.

- -------------------------------------------------------------------------------
THE FUND PAYS DISTRIBUTION AND SERVICE
FEES FOR MARKETING AND SALES RELATED
SHAREHOLDER SERVICING.
- -------------------------------------------------------------------------------

For the fiscal year ended October 31, 1995, an aggregate of $6,471,589 of
distribution expenses or 3.90% of the average net assets of the Fund's Class B
shares was not reimbursed or recovered by John Hancock Funds through the receipt
of deferred sales charges or Rule 12b-1 fees in prior periods.

Information on the Fund's total expenses is in the Financial Highlights section
of this Prospectus.

DIVIDENDS AND TAXES

DIVIDENDS. The Fund generally declares dividends daily and distributes them
monthly representing all or substantially all net investment income. The Fund
will distribute net short-term and long-term capital gains, if any, at least
annually.

Dividends are reinvested in additional shares of your class unless you elect the
option to receive 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."

- -------------------------------------------------------------------------------

THE FUND GENERALLY DECLARES DIVIDENDS
DAILY AND DISTRIBUTES THEM MONTHLY.

- -------------------------------------------------------------------------------

11
<PAGE> 113

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. 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 may be taxable as if you received them the previous December.

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 or 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.

The Fund anticipates that it will be subject to foreign withholding taxes or
other foreign taxes on income (possibly including capital gains) on certain
foreign investments, which will reduce the yield or return from those
investments. The Fund expects that it usually will not qualify to pass these
taxes and any associated deductions or credits through to its shareholders.

On the account application you must certify that the social security or other
taxpayer identification number you provide is your 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 or
exchanges.

PERFORMANCE

Yield reflects the Fund's rate of income on portfolio investments as a
percentage of its share price. Yield is computed by annualizing the result of
dividing the net investment income per share over a 30 day period by the maximum
offering price per share on the last day of that period. Yield is also
calculated according to accounting methods that are standardized for all stock
and bond funds. Because yield accounting methods differ from the methods used
for other accounting purposes, the Fund's yield may not equal the income paid on
shares or the income reported in the Fund's financial statements.

- -------------------------------------------------------------------------------
THE FUND MAY ADVERTISE ITS YIELD AND TOTAL
RETURN.
- -------------------------------------------------------------------------------

12
<PAGE> 114

The Fund's 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 by 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.

Both total return and yield 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. The total return and yield calculations for the
Class B shares reflect the deduction of the applicable CDSC imposed on a
redemption of shares held for the applicable period (except as shown in "The
Fund's Financial Highlights"). All calculations assume that all dividends are
reinvested at net asset value on the reinvestment dates during the periods. The
total return and yield of Class A and Class B shares will be calculated
separately and, because each class is subject to different expenses, the total
return and yield 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. Both yield and total return is an historical calculation,
and are not an indication of future performance. See "Factors to Consider in
Choosing an Alternative."

13
<PAGE> 115
HOW TO BUY SHARES
- --------------------------------------------------------------------------------

[S] [C]
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.

- -------------------------------------------------------------------------------

OPENING AN ACCOUNT

- -------------------------------------------------------------------------------

<TABLE>
<S> <C> <C>
- ---------------------------------------------------------------------------------------
BY CHECK 1. Make your check payable to John Hancock Investor Services
Corporation, P.O. Box 9115, Boston, MA, 02205-9115.
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 High Yield Bond 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 designating a
ACCUMULATION bank account from which funds may be drawn.

- -------------------------------------------------------------------------------

BUYING ADDITIONAL CLASS A AND CLASS B
SHARES

- -------------------------------------------------------------------------------

PROGRAM 2. The amount you elect to invest will be withdrawn automatically
(MAAP) 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 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.
- ---------------------------------------------------------------------------------------
</TABLE>

14
<PAGE> 116
<TABLE>
- ---------------------------------------------------------------------------------------

<S> <C> <C>
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.
- ---------------------------------------------------------------------------------------
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 High Yield Bond 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 Investor Services 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.
- ---------------------------------------------------------------------------------------
</TABLE>

- -------------------------------------------------------------------------------
YOU WILL RECEIVE ACCOUNT STATEMENTS THAT
YOU SHOULD KEEP TO HELP WITH YOUR PERSONAL
RECORDKEEPING.
- -------------------------------------------------------------------------------

15
<PAGE> 117

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 Board of Directors. Short-term debt
investments maturing within 60 days are valued at amortized cost which the Board
of Directors has determined to approximate 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 values
have been materially affected by events occurring after the closing of a foreign
market, assets are valued by a method that the Board believes 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.

<TABLE>
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:
<CAPTION>
COMBINED
SALES CHARGE AS REALLOWANCE REALLOWANCE TO
SALES CHARGE AS A PERCENTAGE OF AND SERVICE FEE AS SELLING BROKERS AS
AMOUNT INVESTED A PERCENTAGE OF THE AMOUNT A PERCENTAGE OF A PERCENTAGE OF
(INCLUDING SALES CHARGE) OFFERING PRICE INVESTED OFFERING PRICE(+) THE OFFERING PRICE(*)
- ------------------------ --------------- --------------- ------------------ ---------------------
<S> <C> <C> <C> <C>
Less than $100,000...... 4.50% 4.71% 4.00% 3.76%
$100,000 to $249,999.... 3.75% 3.90% 3.25% 3.01%
$250,000 to $499,999.... 2.75% 2.83% 2.30% 2.06%
$500,000 to $999,999.... 2.00% 2.04% 1.75% 1.51%
$1,000,000 and over..... 0.00%(**) 0.00(**) (***) 0.00(***)
<FN>

(**) No sales charge is payable at the time of purchase of Class A shares of $1
million or more, but a CDSC 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
</TABLE>

16
<PAGE> 118

responsible for purchases of $1 million or more in aggregate as follows:
1% on sales to $4,999,999, 0.50% on the next $5 million and 0.25% on
amounts of $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."

<TABLE>
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 CDSC period), a CDSC will be imposed. The rate of the CDSC will depend on
the amount invested as follows:

<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, but if
the shares are redeemed within 12 months after the end of the calendar year in
which the purchase was made, a CDSC will be imposed at the above rate.

17
<PAGE> 119

redemptions in certain circumstances. See "Waiver of Contingent Deferred Sales
Charges" below.

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 $80,000 in Class A shares of the Fund, the
sales charge on this subsequent investment would be 3.75% and not 4.50%. This is
the rate that would otherwise be applicable to investments of less than
$100,000. See "Initial Sales Charge Alternative -- Class A Shares".

18
<PAGE> 120

- - A member of an approved affinity group financial service plan.*

[FN]
- ------------------
* 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.

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, 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>

19
<PAGE> 121

<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>

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:
- - Redemptions of Class B shares made under 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 establish your Systematic Withdrawal Plan
and 10% of the value of your 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
the 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.

20
<PAGE> 122

- - Redemptions made pursuant to the Fund's right to liquidate your account if you
have less than $1,000 invested in the Fund.

21
<PAGE> 123

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 it is reasonably satisfied that investments recently made
by check or Invest-by-Phone have been collected (which may take up to 10
calendar days).

<TABLE>
- -----------------------------------------------------------------------------------------

<S> <C>
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 Exchange is closed. Investor Services
employs the following procedures to confirm that instructions
received by telephone are genuine. Your name, the account number,
taxpayer identification number applicable to the account and
other relevant information may be requested. In addition,
telephone instructions are recorded.
You may redeem up to $100,000 by telephone, but the address on
the account must not have changed for the last thirty 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
certificated 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 use 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.
- -----------------------------------------------------------------------------------------
</TABLE>

22
<PAGE> 124
<TABLE>
- -----------------------------------------------------------------------------------------
<S> <C>
IN WRITING Send a stock power or "letter of instruction" specifying the name
of the Fund, the dollar amount or the number of shares to be
redeemed, your name, class of shares, your account number and the
additional requirements listed below that apply to your
particular account.
- -----------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
TYPE OF REGISTRATION REQUIREMENTS
--------------------------------- --------------------------------------------
<S> <C>
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, 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(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.

- -----------------------------------------------------------------------------------------
If you have certificates for your shares, you must submit them with your stock
power or a letter of instructions. 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 less than $1,000 (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 or if the value of the account falls below the required
minimum as a result of market action. 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 60 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 dividend reinvestments, exceeds the
number of shares redeemed, repeated redemptions from a smaller account may
eventually trigger this policy.
- -----------------------------------------------------------------------------------------
</TABLE>

23
<PAGE> 125

ADDITIONAL SERVICES AND PROGRAMS

EXCHANGE PRIVILEGE

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.

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> 126

BY TELEPHONE

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> 127

REINVESTMENT PRIVILEGE

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

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.

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.

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)

26
<PAGE> 128

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 plan 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

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

INVESTMENTS, TECHNIQUES AND RISK FACTORS

LOWER RATED SECURITIES. Debt obligations that are rated in the lower ratings
categories, or which are unrated, involve greater volatility of price and risk
of loss of principal and income. In addition, lower ratings reflect a greater
possibility of an adverse change in financial condition affecting the ability of
the issuer to make payments of interest and principal.

The market price and liquidity of lower rated fixed income securities generally
respond to short-term corporate and market developments to a greater extent than
the price and liquidity of higher rated securities, because these developments
are perceived to have a more direct relationship to the ability of an issuer of
lower rated securities to meet its ongoing debt obligations.

27
<PAGE> 129

Reduced volume and liquidity in the high yield high risk bond market or the
reduced availability of market quotations may make it more difficult to dispose
of the bonds and to value accurately the Fund's assets. The reduced availability
of reliable, objective data may increase the Fund's reliance on management's
judgment in valuing high yield high risk bonds. In addition, the Fund's
investments in high yield high risk securities may be susceptible to adverse
publicity and investor perceptions, whether or not justified by fundamental
factors. The Fund's investments, and consequently its net asset value, will be
subject to the market fluctuations and risk inherent in all securities.

28
<PAGE> 130

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 custodian
or other arrangements before making certain investments in these countries.
Securities of issuers located in these countries may have limited marketability
and may be subject to more abrupt or erratic price movements.

Certain realized gains or losses on the sale of international bonds and debt
held by the Fund, to the extent attributable to fluctuations in foreign currency
exchange rates, as well as certain other gains or losses attributable to
exchange rate fluctuations, may be treated as ordinary income or loss. Such
income or loss may increase or decrease (or possibly eliminate) the Fund's
income available for distribution to shareholders.

FOREIGN CURRENCY TRANSACTIONS. The Fund may purchase securities quoted or
denominated in foreign currencies. The value of investments in these securities
and the value of dividends and interest earned may be significantly affected by
changes in currency exchange rates. Some foreign currency values may be
volatile, and there is the possibility of governmental controls on currency
exchange or governmental intervention in currency markets, which could adversely
affect the Fund. As a result, the Fund may enter into forward foreign currency
exchange contracts to protect against changes in foreign currency exchange
rates. The Fund will not speculate in foreign currencies or in forward foreign
currency exchange contracts, but will enter into these transactions only in
connection with its hedging strategies. 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 certain
strategies could minimize the risk of loss due to a decline in the value of the
hedged foreign currency, they could also limit any potential gain which might
result from an increase in the value of the currency. See the Statement of
Additional Information for further discussion of the uses and risks of forward
foreign currency exchange contracts.

MORTGAGE-BACKED SECURITIES. The Fund may invest in mortgage-backed securities,
including real estate mortgage investment conduits (REMICs), collateralized
mortgage obligations (CMOs) and multi-class pass-through securities. A
mortgage-backed security may be an obligation of the issuer backed by a mortgage
or pool of mortgages or a direct interest in an underlying pool of mortgages.
Some mortgage-backed securities, such as CMOs, make payments of both principal
and interest at a variety of intervals; others make semiannual interest payments
at a predetermined rate and repay principal at maturity (like a typical bond).
Mortgage-backed securities may have less potential for capital appreciation than
comparable fixed-income securities, due to the likelihood of increased
prepayments of mortgages as interest rates decline. If the Fund buys
mortgage-backed securities at a premium, mortgage foreclosures and prepayments
of principal by mortgagors

29
<PAGE> 131

(which may be made at any time without penalty) may result in some loss of the
Fund's principal investment to the extent of the premium paid.

The value of mortgage-backed securities may also change due to shifts in the
market's perception of issuers. In addition, regulatory or tax changes may
adversely affect the mortgage securities market as a whole. Non-government
mortgage-backed securities may offer higher yields than those issued by
government entities, but also may be subject to greater price changes than
government issues. Non-government mortgage-backed securities are not considered
U.S. Government securities for purposes of the investment policies of the Fund.
Non-government CMOs, REMICs and multi-class pass-through securities may be
purchased only if they are rated at the time of purchase in the two highest
grades by either Moody's or S&P.

"Stripped" mortgage-backed securities are created when a U.S. Government agency
or a financial institution separates the interest and principal components of a
mortgage-backed security and sells them as individual securities. The holder of
the "principal-only" security ("PO") receives the principal payments made by the
underlying mortgage-backed security, while the holder of the "interest-only"
security ("IO") receives interest payments from the same underlying security.
The prices of stripped mortgage-backed securities may be particularly affected
by changes in interest rates. As interest rates fall, prepayment rates tend to
increase, which tends to reduce prices of IOs and increase prices of POs. Rising
interest rates can have the opposite effect. Although the market for such
securities is increasingly liquid, the Adviser may, in accordance with
guidelines adopted by the Board of Directors, determine that certain stripped
mortgage-backed securities issued by the U.S. Government, its agencies or
instrumentalities are not readily marketable. If so, these securities, together
with privately-issued stripped mortgage-backed securities, will be considered
illiquid for purposes of the Fund's limitation of investments in illiquid
securities.

Other types of mortgage-backed securities will likely be developed in the future
and the Fund may invest in them if the Adviser determines they are consistent
with the Fund's investment objectives and policies.

ZERO COUPON BONDS. Zero coupon Treasury securities are (i) U.S. Treasury bills,
and both notes and bonds which have been stripped of their unmatured interest
coupons and receipts or (ii) certificates representing interests in such
stripped obligations. A zero coupon security pays no interest in cash to its
holder during its life although interest is accrued for Federal income tax
purposes. Its value to an investor consists of the difference between its face
value at the time of maturity and the price for which it was acquired, which is
generally an amount significantly less than its face value (sometimes referred
to as a "deep discount" price). Investing in "zero coupon" Treasury securities
may help to preserve capital during periods of declining interest rates. For
example, if interest rates decline, Ginnie Mae certificates owned by the Fund
which were purchased at greater than par are more likely to be prepaid, which
would cause a loss of principal. In anticipation of this, the Fund might
purchase zero coupon Treasury securities, the value of which would be expected
to increase when interest rates decline. Zero coupon Treasury

30
<PAGE> 132

securities do not entitle the holder to any periodic payments of interest prior
to maturity. Accordingly, such securities usually trade at a deep discount from
their face or par value and will be subject to greater fluctuations of market
value in response to changing interest rates than debt obligations of comparable
maturities which make periodic distributions of interest. On the other hand,
because there are no periodic interest payments to be reinvested prior to
maturity, zero coupon securities eliminate the reinvestment risk and lock in a
rate of return to maturity. Current Federal tax law requires that a holder (such
as the Fund) of a zero coupon security accrue a portion of the discount at which
the security was purchased as income each year even though the Fund received no
interest payment in cash on the security during the year. The Fund must
distribute all or substantially all of its income for each taxable year,
including this accrued income, in order to satisfy certain requirements of the
Code and may be required to sell securities under disadvantageous circumstances
or leverage itself to obtain the cash necessary for this purpose.

ASSET-BACKED SECURITIES. The Fund may invest in securities that represent
individual interests in pools of consumer loans and trade receivables similar in
structure to mortgage-backed securities. The assets are securitized either in a
pass-through structure (similar to a mortgage pass-through structure) or in a
pay-through structure (similar to a CMO structure). Although the collateral
supporting asset-backed securities generally is of a shorter maturity than
mortgage loans and historically has been less likely to experience substantial
prepayments, no assurance can be given as to the actual maturity of an
asset-backed security because prepayments of principal may be made at any time.
Payments of principal and interest typically are supported by some form of
credit enhancement, such as a letter of credit, surety bond, limited guarantee
by another entity or having a priority to certain of the borrower's other
securities. The degree of credit enhancement varies, and generally applies to
only a fraction of the asset-backed security's par value until exhausted. If the
credit enhancement of an asset-backed security held by the Fund has been
exhausted, and if any required payments of principal and interest are not made
with respect to the underlying loans, the Fund may experience losses or delays
in receiving payment.

Asset-backed securities entail certain risks not presented by mortgage-backed
securities. Asset-backed securities do not have the benefit of the same type of
security interest in the related collateral. Credit card receivables are
generally unsecured and a number of state and Federal consumer credit laws give
debtors the right to set off certain amounts owed on the credit cards, thereby
reducing the outstanding balance. In the case of automobile receivables, there
is a risk that the holders may not have either a proper or first security
interest in all of the obligations backing such receivables due to the large
number of vehicles involved in typical issuance, and technical requirements
under state laws. Therefore, recoveries on repossessed collateral may not always
be available to support payments on these securities. For a further discussion
of the risks of investing in asset-backed securities, see the Statement of
Additional Information. The Fund will invest in asset-backed securities only if
they are rated at the time of purchase in the two highest grades by a
nationally-recognized rating agency.

31
<PAGE> 133

RESTRICTED AND ILLIQUID SECURITIES. The Fund may invest up to 10% of its net
assets in illiquid investments, which include repurchase agreements maturing in
more than seven days, restricted securities and securities that are not readily
marketable. The Fund's investments in restricted securities eligible for resale
to certain institutional investors pursuant to Rule 144A under the Securities
Act of 1933 are subject to the foregoing limitation.

REVERSE REPURCHASE AGREEMENTS. The Fund may enter into reverse repurchase
agreements, which involve the sale of a security by the Fund to a bank or
securities firm and its agreement to repurchase the instrument at a specified
time and price plus an agreed amount of interest. The Fund will use the proceeds
of reverse repurchase agreements to purchase other investments. Reverse
repurchase agreements are considered to be borrowings by the Fund and as an
investment practice may be considered speculative. The Fund will enter into a
reverse repurchase agreement only when the Adviser determines that the interest
income to be earned from the investment of the proceeds is greater than the
interest expense of the transaction. To minimize various risks associated with
reverse repurchase agreements, the Fund will establish and maintain with the
Custodian a separate account consisting of cash or liquid, high grade debt
securities in an amount at least equal to the repurchase prices of the
securities (plus any accrued interest thereon) under such agreements. In
addition, the Fund's investment restrictions provide that the Fund will not
enter into reverse repurchase agreements exceeding, in the aggregate, 33 1/3% of
the value of its total assets (including for this purpose other borrowings of
the Fund). The Fund will enter into reverse repurchase agreements only with
selected registered broker/dealers or with federally insured banks or savings
and loan associations which are approved in advance as being creditworthy by the
Board of Directors. Under procedures established by the Board of Directors, the
Adviser will monitor the creditworthiness of the firms involved.

32
<PAGE> 134

transactions to the Fund, the net asset value of the Fund would fall faster than
would otherwise be the case.

WHEN-ISSUED AND FORWARD COMMITMENT SECURITIES. The Fund may purchase securities
on a forward or "when-issued" basis and may purchase or sell securities on a
forward commitment basis to hedge against anticipated changes in interest rates
and prices. When the Fund engages in such transactions, it relies on the seller
or the buyer, as the case may be, to consummate the transaction. Failure to
consummate the transaction may result in the Fund's losing the opportunity to
obtain an advantageous price and yield. If the Fund chooses to dispose of the
right to acquire a when-issued security prior to its acquisition or dispose of
its right to deliver or receive against a forward commitment, it can incur a
gain or a loss.

SHORT TERM TRADING AND PORTFOLIO TURNOVER. Short-term trading means the
purchase and subsequent sale of a security after it has been held for a
relatively brief period of time. Short term trading may have the effect of
increasing portfolio turnover, may increase net short-term capital gains,
distributions from which would be taxable to shareholders as ordinary income and
may under certain circumstances make it more difficult for the Fund to qualify
as a regulated investment company under the Code. The Fund does not intend to
invest for the purpose of seeking short-term profits. The Fund's portfolio
securities may be changed, however, without regard to the holding period of
these securities (subject to certain tax restrictions), when the Adviser deems
that this action will help achieve the Fund's objective given a change in an
issuer's operations or changes in general market conditions. A rate of turnover
of 100% would occur if the value of the lesser of purchases and sales of
portfolio securities for a particular year equaled the average monthly value of
portfolio securities owned during the year (excluding short-term securities). A
high rate of portfolio turnover (100% or more) involves a correspondingly
greater amount of brokerage commissions and other costs which must be borne
directly by the Fund and thus indirectly by its shareholders. The Fund's
portfolio turnover rate is set forth in the table under the caption "The Fund's
Financial Highlights."

OPTIONS AND FUTURES TRANSACTIONS. The Fund may buy and sell options contracts
on debt securities and securities indices, interest rate and securities index
futures contracts and options on such futures contracts. The Fund may also write
straddles, which are combinations of put and call options on the same security.
Options and futures contracts are bought and sold to manage the Fund's exposure
to changing interest rates and security prices. Some options and futures
strategies, including selling futures, buying puts and writing calls, tend to
hedge the Fund's investments against price fluctuations. Other strategies,
including buying futures, writing puts, and buying calls, tend to increase
market exposure. Options and futures may be combined with each other or with
forward contracts in order to adjust the risk and return characteristics of the
overall strategy. All of the Fund's futures contracts and options on futures
contracts will be traded on a U.S. commodity exchange or board of trade. The
Fund's transactions in options and futures contracts may be limited by the
requirements of the Code for qualification as a regulated investment company.
See the Statement of Additional Information

33
<PAGE> 135

for further discussion of options and futures transactions, including tax
effects and investment risks.

INDEXED SECURITIES. The Fund may invest in indexed securities, including
floating rate securities that are subject to a maximum interest rate ("capped
floaters") and leveraged inverse floating rate securities ("inverse floaters")
(up to 10% of the Fund's total assets). The interest rate or, in some cases, the
principal payable at the maturity of an indexed security may change positively
or inversely in relation to one or more interest rates, financial indices or
other financial indicators ("reference prices"). An indexed security may be
leveraged to the extent that the magnitude of any change in the interest rate or
principal payable on an indexed security is a multiple of the change in the
reference price. Thus, indexed securities may decline in value due to adverse
market changes in interest rates or other reference prices.

RISKS ASSOCIATED WITH OPTIONS, FUTURES AND OTHER DERIVATIVE
INSTRUMENTS. Options and futures contracts are generally considered to be
"derivative" instruments because they derive their value from the performance of
an underlying asset, index or other economic benchmark. Certain mortgage-backed
securities and indexed securities in which the Fund may invest also are
considered to be derivative instruments. The risks associated with the Fund's
transactions in options, futures and other derivative instruments may include
some or all of the following:

Correlation Risk. A Fund's success in using derivative instruments to hedge
portfolio assets depends on the degree of price correlation between the
derivative instrument and the hedged asset. Imperfect correlation may be caused
by several factors, including temporary price disparities among the trading
markets for the derivative instruments, the assets underlying the derivative
instrument and the Fund's portfolio assets.

34
<PAGE> 136

Credit Risk. Over-the-counter instruments involve a risk that the issuer or
counterparty will fail to perform its contractual obligations.

35
<PAGE> 137

APPENDIX A

DESCRIPTION OF BOND RATINGS AND FUND'S ASSET COMPOSITION

The ratings of Moody's Investors Service, Inc. and Standard & Poor's Ratings
Group represent their opinions as to the quality of various debt instruments
they undertake to rate. It should be emphasized that ratings are not absolute
standards of quality. Consequently, debt instruments with the same maturity,
coupon and rating may have different yields while debt instruments of the same
maturity and coupon with different ratings may have the same yield.

MOODY'S INVESTORS SERVICE, INC.

AAA: 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.

AA: 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 fluctuations 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.

A: 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 at some time in the future.

BAA: 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.

BA: 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.

B: Bonds which are rated B generally lack the characteristics of 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.

CAA: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.

CA: Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.

A-1
<PAGE> 138

STANDARD & POOR'S RATINGS GROUP
AAA: Debt rated AAA has the highest level 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 highest 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 effect of changes in
circumstances and economic conditions than debt in higher rated categories.
BBB: Debt rated BBB is regarded as having an 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.
BB, B, CCC, CC: Debt rated BB, B, CCC and CC is regarded, on balance, as
predominantly speculative with respect to capacity to pay interest and repay
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
are outweighed by large uncertainties or major risk exposures to adverse
conditions.

QUALITY DISTRIBUTION

<TABLE>
The average weighted quality distribution of the securities in the portfolio for
the year ended October 31, 1995.

<CAPTION>
RATING RATING
AVERAGE % OF ASSIGNED % OF ASSIGNED % OF
SECURITY RATINGS VALUE PORTFOLIO BY ADVISER PORTFOLIO BY SERVICE PORTFOLIO
---------------- ------- --------- ---------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
AAA.................. $ 3,699,093 2.0% 0 0.0% $ 3,699,093 2.0%
AA................... 0 0.0% 0 0.0% 0 0.0%
A.................... 0 0.0% 0 0.0% 0 0.0%
BAA.................. 1,332,214 0.7% 0 0.0% 1,332,214 0.7%
BA................... 27,357,061 14.7% $ 4,336,684 2.3% 23,020,376 12.4%
B.................... 118,495,746 63.7% 34,760,401 18.7% 83,735,345 45.0%
CAA.................. 10,365,627 5.6% 0 0.0% 10,365,627 5.6%
CA................... 0 0.0% 0 0.0% 0 0.0%
C.................... 0 0.0% 0 0.0% 0 0.0%
D.................... 0 0.0% 0 0.0% 0 0.0%
------------ ----------- ------------
0
Debt Securities...... 161,249,741 86.7% $39,097,085 21.0% $122,152,655 65.7%
0
Equity Securities.... 17,541,214 9.4%
0
Short-Term
Securities......... 7,276,093 3.9%
------------
0
Total Portfolio...... 186,067,048 100.0%
0
Other
Assets -- Net...... 3,651,968
------------
0
Net Assets........... $189,719,016
============
<FN>

- ---------------

* Based on average of month end portfolio holdings during fiscal year ended
10/31/95. Asset composition does not represent actual holdings on 10/31/95
nor does it imply that the overall quality of portfolio holdings is fixed.

</TABLE>

A-2

<PAGE> 139

(NOTES)
<PAGE> 140

(NOTES)
<PAGE> 141

JOHN HANCOCK
HIGH YIELD BOND 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
Investors Bank & Trust Company
24 Federal Street
Boston, Massachusetts 02110

TRANSFER AGENT
John Hancock Investor Services
Corporation
P.O. Box 9116
Boston, Massachusetts 02205-9116

INDEPENDENT AUDITORS
Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

HOW TO OBTAIN INFORMATION
ABOUT THE FUND

For Service Information
For Telephone Exchange call
1-800-225-5291
For Investment-by-Phone
For Telephone Redemption

For TDD call 1-800-554-6713

5700P 3/96 (LOGO) Printed on Recycled Paper

JOHN HANCOCK
HIGH YIELD
BOND FUND

CLASS A AND CLASS B SHARES
PROSPECTUS

MARCH 1, 1996

A MUTUAL FUND SEEKING
TO MAXIMIZE CURRENT
INCOME WITHOUT
ASSUMING UNDUE RISK.

101 HUNTINGTON AVENUE
BOSTON, MASSACHUSETTS 02199-7603
TELEPHONE 1-800-225-5291
<PAGE> 142

JOHN HANCOCK

HIGH YIELD
TAX-FREE FUND

CLASS A AND CLASS B SHARES
PROSPECTUS

MARCH 1, 1996

<TABLE>
- ----------------------------------------------------------------------------------------------
TABLE OF CONTENTS

<CAPTION>
Page
----
<S> <C>
Expense Information................................................................... 2
The Fund's Financial Highlights....................................................... 3
Investment Objective and Policies..................................................... 5
Organization and Management of the Fund............................................... 8
Alternative Purchase Arrangements..................................................... 8
The Fund's Expenses................................................................... 10
Dividends and Taxes................................................................... 11
Performance........................................................................... 12
How to Buy Shares..................................................................... 14
Share Price........................................................................... 15
How to Redeem Shares.................................................................. 21
Additional Services and Programs...................................................... 23
Investments, Techniques and Risk Factors.............................................. 26
Appendix A............................................................................ A-1
Appendix B............................................................................ B-1
</TABLE>

This Prospectus sets forth the information about John Hancock High Yield
Tax-Free Fund (the "Fund"), a diversified series of John Hancock Series, Inc.
(the "Company"), that you should know before investing. Please read and retain
it for future reference.

Additional information about the Fund and the Company has been filed with the
Securities and Exchange Commission (the "SEC"). You can obtain a copy of the
Fund's Statement of Additional Information, dated March 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).

THE FUND MAY INVEST PRIMARILY (AND IS PERMITTED TO INVEST UP TO 100% OF ITS
ASSETS) IN LOWER RATED (I.E., BELOW INVESTMENT GRADE) OR UNRATED (AND DETERMINED
TO BE NON-INVESTMENT GRADE) MUNICIPAL OBLIGATIONS COMMONLY KNOWN AS "JUNK BONDS"
WHICH ENTAIL PRICE VOLATILITY, DEFAULT AND OTHER RISKS GREATER THAN THOSE
ASSOCIATED WITH HIGHER RATED/HIGHER QUALITY SECURITIES. INVESTORS SHOULD
CAREFULLY CONSIDER THESE RISKS BEFORE INVESTING. SEE "INVESTMENTS, TECHNIQUES
AND RISK FACTORS."
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 GOVERNMENT
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> 143

EXPENSE INFORMATION

<TABLE>
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 October 31, 1995
adjusted to reflect current fees and expenses. Actual fees and expenses may be
greater or less than those indicated.

<CAPTION>
CLASS A CLASS B
SHARES SHARES
------- -------
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum sales charge imposed on purchases (as a percentage of offering price)....................... 4.50% None
Maximum sales charge imposed on reinvested dividends................................................ None None
Maximum deferred sales charge....................................................................... None* 5.00%
Redemption fee+..................................................................................... None None
Exchange fee........................................................................................ None None
ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets)
Management fee...................................................................................... 0.58% 0.58%
12b-1 fee**......................................................................................... 0.25% 1.00%
Other expenses***................................................................................... 0.22% 0.22%
Total Fund operating expenses....................................................................... 1.05% 1.80%
<FN>

<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............................................................... $ 55 $77 $ 100 $167
Class B Shares
-- Assuming complete redemption at end of period......................... $ 68 $87 $ 117 $192
-- Assuming no redemption................................................ $ 18 $57 $ 97 $192
</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 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> 144

THE FUND'S FINANCIAL HIGHLIGHTS

The information in the following table of financial highlights has been
audited by Ernst & Young LLP, the Fund's independent auditors, whose unqualified
report is included in the Fund's 1995 Annual Report and 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 ("Investor Services") at the address or telephone number
listed on the front page of this Prospectus.

<TABLE>

Selected data for Class A shares outstanding throughout each period is as
follows:

<CAPTION>
PERIOD FROM
DECEMBER 31, 1993
YEAR ENDED (COMMENCEMENT OF
OCTOBER 31, OPERATIONS) TO
1995(B) OCTOBER 31, 1994
----------- ------------------
<S> <C> <C>
CLASS A
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period........................................................... $ 8.82 $ 9.85
------- -------
Net Investment Income.......................................................................... 0.57 0.48(a)
Net Realized and Unrealized Gain (Loss) on Investments Sold and Financial Futures Contracts.... 0.70 (0.94)
------- -------
Total from Investment Operations............................................................... 1.27 (0.46)
------- -------
LESS DISTRIBUTIONS
Dividends from Net Investment Income........................................................... (0.58) (0.48)
Distributions in Excess of Net Investment Income............................................... (0.04) (0.09)
------- -------
Total Distributions............................................................................ (0.62) (0.57)
------- -------
Net Asset Value, End of Period................................................................. $ 9.47 $ 8.82
======= =======
Total Investment Return at Net Asset Value(c).................................................. 14.85% 4.96%(d)
======= =======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted)...................................................... $14,225 $15,401
Ratio of Expenses to Average Net Assets........................................................ 1.06% 1.15%*
Ratio of Net Investment Income to Average Net Assets........................................... 6.36% 6.08%*
Portfolio Turnover Rate........................................................................ 64% 62%
<FN>

- ---------------

* On an annualized basis.

(a) On average month end shares outstanding.

(b) On December 22, 1994, John Hancock Advisers, Inc. became the investment
adviser of the Fund.

(d) Not annualized.

</TABLE>

3
<PAGE> 145

Selected data for Class B shares outstanding throughout each period is as
follows:

<TABLE>
<CAPTION>
PERIODS ENDED
YEAR ENDED OCTOBER 31, -------------------------
-------------------------------------------------------------------------------- OCTOBER 31, APRIL 30,
1995(B) 1994 1993 1992 1991 1990 1989 1988 1987(1)(3) 1987(2)(3)
-------- -------- -------- ------- ------- ------- ------- ------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS B
PER SHARE
OPERATING
PERFORMANCE
Net Asset Value,
Beginning of
Period.......... $ 8.82 $ 9.98 $ 9.39 $ 9.31 $ 9.07 $ 9.29 $ 9.25 $ 8.62 $ 9.49 $ 10.00
INCOME FROM
INVESTMENT
OPERATIONS
Net Investment
Income.......... 0.51 0.48 0.53 0.55 0.54 0.55 0.55 0.62 0.37 0.53
Net Realized and
Unrealized Gain
(Loss) on
Investments..... 0.69 (0.90) 0.72 0.17 0.34 (0.14) 0.13 0.70 (0.87) (0.51)
-------- -------- -------- ------- ------- ------- ------- ------- ------ -------
Total from
Investment
Operations...... 1.20 (0.42) 1.25 0.72 0.88 0.41 0.68 1.32 (0.50) 0.02
LESS
DISTRIBUTIONS
Dividends from
Net Investment
Income.......... (0.51) (0.48) (0.56) (0.55) (0.54) (0.55) (0.51) (0.66) (0.37) (0.53)
Dividends in
Excess of Net
Investment
Income.......... (0.04) (0.07) -- -- -- -- -- -- -- --
Distributions
from Net
Realized Gains
on Investments
Sold............ -- (0.19) (0.10) (0.09) -- -- -- (0.03) -- --
Distribution from
Capital
Paid-in......... -- -- -- -- (0.10) (0.08) (0.13) -- -- --
-------- -------- -------- ------- ------- ------- ------- ------- ------ -------
Total
Distributions... (0.55) (0.74) (0.66) (0.64) (0.64) (0.63) (0.64) (0.69) (0.37) (0.53)
Net Asset Value,
End of Period... $ 9.47 $ 8.82 $ 9.98 $ 9.39 $ 9.31 $ 9.07 $ 9.29 $ 9.25 $ 8.62 $ 9.49
-------- -------- -------- ------- ------- ------- ------- ------- ------ -------
TOTAL
RETURN(c)....... 13.99% (4.44)% 13.69% 7.89% 10.07% 4.60% 7.54% 15.88% (5.13)% 0.12%
======== ======== ======== ======= ======= ======= ======= ======= ====== =======
RATIOS AND
SUPPLEMENTAL
DATA
Net Assets, End
of Period (000's
omitted)........ $155,234 $151,069 $113,442 $65,933 $51,467 $35,820 $29,841 $24,278 $15,026 $15,753
-------- -------- -------- ------- ------- ------- ------- ------- ------- -------
Ratio of Expenses
to Average
Net Assets...... 1.79% 1.85% 2.06% 2.17% 2.36% 2.20% 2.32% 2.05% 0.82% 1.07%
Ratio of Expense
Reimbursement to
Average
Net Assets...... -- -- -- -- -- -- -- -- (0.21)% (0.51)%
-------- -------- -------- ------- ------- ------- ------- ------- ------ -------
Ratio of Net
Expenses to
Average Net
Assets.......... 1.79% 1.85% 2.06% 2.17% 2.36% 2.20% 2.32% 2.05% 0.61% 0.56%
======== ======== ======== ======= ======= ======= ======= ======= ====== =======
Ratio of Net
Investment
Income to
Average
Net Assets...... 5.61% 5.36% 5.23% 5.78% 5.61% 5.96% 5.79% 6.66% 4.05% 4.96%
Portfolio
Turnover........ 64% 62% 100% 40% 83% 41% 29% 82% 42% 153%
<FN>

- ---------------

* On an annualized basis.

(1) Financial highlights, including total return, are for the period from May 1,
1987 (date of Fund's initial offering of shares to the public as a Portfolio
of the Company) to October 31, 1987 and have not been annualized.
(2) Financial highlights, including total return, are for the period from August
25, 1986 (date of Fund's initial offering of shares to the public) to April
30, 1987 and have not been annualized.

(3) Financial highlights, including total return, have not been annualized. Per
share information has been calculated using the average number of shares
outstanding. Portfolio turnover is for the year ended October 31, 1994.

(a) On average month-end shares outstanding.

(b) On December 22, 1994, John Hancock Advisers, Inc. became the investment
adviser of the Fund.

(d) Not annualized.

</TABLE>

4
<PAGE> 146

INVESTMENT OBJECTIVE AND POLICIES
The Fund's primary investment objective is to obtain a high level of current
income that is largely exempt from federal income taxes and is consistent with
the preservation of capital. The Fund pursues this objective by normally
investing substantially all of its assets in medium and lower quality
obligations, including bonds, notes and commercial paper, issued by or on behalf
of states, territories and possessions of the United States, the District of
Columbia and their political subdivisions, agencies or instrumentalities, the
interest on which is exempt from federal income tax ("tax-exempt securities").
The Fund seeks as its secondary objective preservation of capital by purchasing
and selling interest rate futures contracts ("financial futures") and tax-exempt
bond index futures contracts ("index futures"), and by purchasing and writing
put and call options on debt securities, financial futures, tax-exempt bond
indices and index futures to hedge against changes in the general level of
interest rates.

- -------------------------------------------------------------------------------
THE FUND SEEKS TO OBTAIN A HIGH LEVEL OF
CURRENT INCOME THAT IS LARGELY EXEMPT FROM
FEDERAL INCOME TAXES AND IS CONSISTENT
WITH THE PRESERVATION OF CAPITAL.
- -------------------------------------------------------------------------------

As a fundamental policy, the Fund invests, in normal circumstances, at least 80%
of its total assets in municipal bonds ("Municipal Bonds") rated, at the time of
purchase, "A", "Baa" or "Ba" by Moody's Investor Services, Inc. ("Moody's"); or
"A", "BBB" or "BB" by Standard and Poor's Ratings Group ("S&P"); or, if unrated,
that are of comparable quality as determined by John Hancock Advisers, Inc. (the
"Adviser"). Municipal Bonds rated lower than "Ba" or "BB" may be bought by the
Fund. However, the Fund will limit its investments in such securities to not
more than 5% of its total assets at the time of purchase. The Fund may invest in
Municipal Bonds with ratings as low as "CC" by S&P or "Ca" by Moody's, but will
invest in securities rated lower than "Ba" or "BB" only where, in the opinion of
the Adviser, the rating does not accurately reflect the true quality of the
credit of the issuer and the quality of such securities is comparable to that of
securities rated at least "Ba" or "BB". The rating limitations applicable to the
Fund's investments apply at the time of acquisition of a security; any
subsequent change in the rating or quality of a security will not require the
Fund to sell the security. A general description of Moody's and S&P's ratings
and the distribution of the Fund's assets across the various rating categories
are set forth in Appendix B.

Municipal Bonds rated lower than Baa or BBB by Moody's or S&P, respectively, and
unrated Municipal Bonds of comparable quality (commonly called "junk bonds")
generally have larger price fluctuations and involve increased risks to the
principal and interest than do higher rated securities. Many of these securities
are considered to be speculative investments. In general, these risks include:
(1) substantial market price volatility; (2) changes in credit status, including
weaker overall credit condition of issuers and risks of default; and (3)
industry, market and economic risks, including limited liquidity and secondary
market support. The risks of lower rated and unrated securities are discussed in
greater detail under "Investments, Techniques and Risk Factors" and should be
carefully considered by investors.

"Tax-exempt securities" are debt obligations generally issued by or on behalf of
states, territories and possessions of the United States, the District of
Columbia

5
<PAGE> 147

and their political subdivisions, agencies or instrumentalities the interest on
which, in the opinion of the bond issuer's counsel (not the Fund's counsel), is
excluded from gross income for federal income tax purposes. These securities
consist of Municipal Bonds, municipal notes and municipal commercial paper as
well as variable or floating rate obligations and participation interests.

In addition to the hedging strategies employed by the Fund in pursuit of its
secondary objective of preservation of capital, the Fund can purchase bonds
rated "BBB" and "BB" or "Baa" and "Ba," where based upon price, yield and the
Adviser's assessment of quality, investment in such bonds is determined to be
consistent with the Fund's secondary objective of preserving capital. To the
extent that the Fund purchases, retains or disposes of such bonds for this
purpose, the Fund may not earn as high a yield as might otherwise be obtainable
from lower quality securities.

While the Fund normally will invest primarily in medium and lower quality
Municipal Bonds as indicated above, it may invest in higher quality tax-exempt
securities, particularly when the difference in returns between rating
classifications is very narrow.

To the extent that the Fund does not invest in medium and lower quality
Municipal Bonds, it will attempt to invest its assets in tax-exempt securities
that are rated at least as high as follows:

(1) Municipal Commercial Paper rated "MIG-3" by Moody's, or "A-3" by S&P;

(2) Municipal Notes rated "MIG-3" by Moody's or "SP-2" by S&P; and

(3) Municipal Variable Rate Demand Obligations rated "VMIG3" by Moody's, or
"SP2/A-3" and "A/A-3" by S&P.

The Fund may write (sell) covered call and put options on debt securities and
interest rate and tax-exempt bond index futures contracts. The Fund may purchase
call and put options on these securities, futures and indices. The Fund may also
write straddles, which are combinations of put and call options on the same
security. The Fund may buy and sell interest rate and tax-exempt bond index
futures contracts and options on such futures contracts to hedge against changes
in interest rates.

The Fund may invest in variable rate and floating rate obligations, including
inverse floating rate obligations, on which the interest rate is adjusted at
predesignated periodic intervals or when there is a change in the market rate of
interest on which the interest rate payable on the obligation is based.

Options, futures contracts and variable and floating rate instruments are
generally considered to be "derivative" instruments because they derive their
value from the performance of an underlying asset, index or other economic
benchmark. See "Investments, Techniques and Risk Factors" for additional
discussion of derivative instruments and certain other investments.

The Fund may purchase tax-exempt participation interests and certificates of
participation ("COPs"), lend its portfolio securities, enter into repurchase
agree-

6
<PAGE> 148

ments, purchase restricted and illiquid securities and purchase securities on a
when-issued or forward commitment basis. See "Investments, Techniques and Risk
Factors" for more information about the Fund's investments.

For temporary purposes (such as pending new investments) or liquidity purposes
(such as to meet redemption obligations), the Fund may invest up to 20% of its
total assets in taxable short-term debt securities with remaining maturities of
one year or less ("money market instruments"), including obligations guaranteed
or issued by the U.S. Government, its agencies or instrumentalities ("U.S.
Government securities"), high quality corporate debt securities, high quality
commercial paper, certificates of deposit, bankers' acceptances and related
repurchase agreements.

For defensive purposes, the Fund may temporarily invest more than 20% of the
value of its total assets in taxable money market instruments to enhance
liquidity or preserve capital when, in the Adviser's opinion, it is advisable to
do so because of prevailing market conditions so long as at the end of any
quarter of its taxable year, tax-exempt securities comprise at least 50% of the
Fund's total assets.

The Fund has adopted certain investment restrictions which are enumerated in
detail in the Statement of Additional Information where they are classified as
fundamental or nonfundamental. Those restrictions designated as fundamental may
not be changed without shareholder approval. The Fund's investment objectives
and its policy to invest (under normal circumstances) 80% of its total assets in
Municipal Bonds rated "A," "Baa" or "Ba" by Moody's; "A" "BBB" or "BB" by S&P;
or, if unrated, that are of comparable quality, are fundamental and may not be
changed without the approval of the Fund's shareholders. The Fund's other
investment policies and its nonfundamental restrictions, however, may be changed
by a vote of the Board of Directors without shareholder approval.
Notwithstanding the Fund's fundamental investment restriction prohibiting
investments in other investment companies, the Fund may, pursuant to an order
granted by the SEC, invest in other investment companies in connection with a
deferred compensation plan for the non-interested Trustees of the John Hancock
funds.

RISK FACTORS. An investment in the Fund is intended for long-term investors who
can accept the risks associated with investing primarily in fixed-income
securities. The Fund's investments will be subject to market fluctuation and
other risks inherent in all securities. The yield, return and price volatility
of the Fund depend on the type and quality of its investments as well as market
and other factors. In addition, the Fund's potential investments and management
techniques may entail specific risks. For additional information about risks
associated with an investment in the Fund, see "Investments, Techniques and Risk
Factors."

7
<PAGE> 149
Incorporated, Sutro & Company, Inc. and John Hancock Distributors, Inc.,
which are indirectly owned by the John Hancock Mutual Life Insurance Company
(the "Life Company"), which in turn indirectly owns the Adviser.

- -------------------------------------------------------------------------------

JOHN HANCOCK ADVISERS, INC. ADVISES
INVESTMENT COMPANIES HAVING A TOTAL ASSET
VALUE OF MORE THAN $16 BILLION.

- -------------------------------------------------------------------------------

Frank A. Lucibella is the portfolio manager of the New York Portfolio and John
Hancock Managed-Tax Exempt Fund. He joined the Adviser in 1988 after six years
of investment experience with Eaton Vance and The Travelers Corporation.

ALTERNATIVE PURCHASE ARRANGEMENTS

- -------------------------------------------------------------------------------
AN ALTERNATIVE PURCHASE PLAN ALLOWS YOU TO
CHOOSE THE METHOD OF PAYMENT THAT IS BEST
FOR YOU.
- -------------------------------------------------------------------------------

8
<PAGE> 150
the class of shares you are purchasing, it will be assumed that you are
investing in Class A shares.

9
<PAGE> 151

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.

THE FUND'S EXPENSES

For managing its investment and business affairs, the Fund pays a fee to the
Adviser which for the 1995 fiscal year was 0.58% of the Fund's average net
assets. The advisory fee paid by the Fund is higher than that of most other
funds but is comparable to fees paid by funds that invest in similar 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 0.25% of the Class A shares' average daily
net assets and an aggregate annual rate of 1.00% of the Class B shares' average
daily net assets. Up to 0.25% for Class A shares and Class B shares 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; (iii) unreimbursed distribution expenses under the Fund's prior
distribution plans; (iv) distribution expenses incurred by other investment
companies which sell all or substantially all of their assets to, merge with or
otherwise engage in a reorganization transaction with the Fund; and (v) with
respect to Class B shares only, interest expenses on unreimbursed distribution
expenses. The service fees will be used to compensate

10
<PAGE> 152
Selling Brokers and others for providing personal and account maintenance
services to shareholders.

In the event John Hancock Funds is not fully reimbursed for payments made or
expenses incurred by it under the Class A Plan, these expenses will not be
carried beyond one year from the date they were incurred. 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 October 31,
1995, an aggregate of $5,853,826 of distribution expenses or 3.77% of the
average net assets of the Fund's Class B shares was not reimbursed or recovered
by John Hancock Funds through the receipt of deferred sales charges or Rule
12b-1 fees in prior periods.

Information on the Fund's total expenses is in the Financial Highlights section
of this Prospectus.

DIVIDENDS AND TAXES

DIVIDENDS. The Fund generally declares dividends daily and distributes them
monthly, representing all or substantially all of its net investment income. The
Fund may distribute net short-term and long-term capital gains, if any, at least
annually.

- -------------------------------------------------------------------------------

THE FUND GENERALLY DECLARES DIVIDENDS
DAILY AND DISTRIBUTES THEM MONTHLY.

- -------------------------------------------------------------------------------

Dividends are reinvested in additional shares of your class unless you elect the
option to receive 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. The Fund intends to meet certain federal tax requirements so that its
distributions of the tax-exempt interest it earns may be treated as
"exempt-interest dividends," which you are entitled to treat as tax-exempt
interest. That portion of exempt-interest dividends, if any, attributable to
interest on certain tax-exempt obligations that are "private activity bonds" may
increase certain shareholders' alternative minimum tax. Any exempt-interest
dividend may increase a corporate shareholder's alternative minimum tax.

Shareholders receiving social security benefits and certain railroad retirement
benefits may be subject to Federal income tax on a portion of such benefits as a
result of receiving investment income, including tax-exempt income (such as
exempt-interest dividends) and other dividends paid by the Fund. Shares of the
Fund may not be an appropriate investment for persons who are "substantial
users" of facilities financed by industrial development or private activity
bonds, or persons related to "substantial users." Consult your tax adviser if
you think this may apply to you.

Certain of the Fund's permitted investments may produce taxable income or
taxable capital gains. Dividends from the Fund's net taxable income, if any,
including any accrued market discount included in the Fund's income, and from
the

11
<PAGE> 153

Fund's 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 by the Fund in
January of a given year but may be treated as if you received them the previous
December.

On the account application you must certify that the social security or other
taxpayer identification number you provide is your correct number 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 taxable dividends and the proceeds of
redemptions or exchanges.

In addition to Federal taxes with respect to any distributions that are not
exempt-interest dividends, you may be subject to state, local or foreign taxes
with respect to your investment in and distributions from the Fund. A state
income (and possibly local income and/or intangible property) tax exemption is
generally available to the extent the Fund's distributions are derived from
interest on (or, in the case of intangibles taxes, the value of its assets is
attributable to) certain U.S. Government obligations and/or tax-exempt municipal
obligations issued by or on behalf of the particular state, or a political
subdivision thereof in which you are subject to tax, provided in some states
that certain thresholds for holdings of such obligations and/or reporting
requirements are satisfied. You will receive tax information each year showing
the percentage of the Fund's exempt-interest dividends attributable to each
state. You should consult your tax adviser for specific advice.

PERFORMANCE
Yield reflects the Fund's rate of income on portfolio investments as a
percentage of its share price. Yield is computed by annualizing the result of
dividing the net investment income per share over a 30 day period by the maximum
offering price per share on the last day of that period. Yield is also
calculated according to accounting methods that are standardized for all stock
and bond funds. Because yield accounting methods differ from the methods used
for other accounting purposes, the Fund's yield may not equal the income paid on
shares or the income reported in the Fund's financial statements. The Fund may
also utilize tax equivalent yields of its Class A and Class B shares computed in
the same manner, with adjustment for assumed Federal income tax rates. For a
comparison of yields on municipal securities and taxable securities, see the
Taxable Equivalent Yield Table in Appendix A.

12
<PAGE> 154

The Fund's 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 by 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.

Both total return and yield 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. The total return and yield calculations for the
Class B shares reflect 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 and yield of Class A and Class B shares
will be calculated separately and, because each class is subject to different
expenses, the total return and yield may differ with respect to that 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 of shares 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. Both yield and total return is an
historical calculations, and are not an indication of future performance. See
"Factors to Consider in Choosing an Alternative."

13
<PAGE> 155
HOW TO BUY SHARES
- --------------------------------------------------------------------------------

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.

- -------------------------------------------------------------------------------

OPENING AN ACCOUNT

- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
BY CHECK 1. Make your check payable to John Hancock Investor Services
Corporation, P.O. Box 9115, Boston, MA 02205-9115.
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 High Yield Tax-Free 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 funds may be drawn.

- -------------------------------------------------------------------------------
BUYING ADDITIONAL CLASS A AND CLASS B
SHARES
- -------------------------------------------------------------------------------

PROGRAM 2. The amount you elect to invest will be withdrawn
automatically from your bank or credit union account.
(MAAP)
- -------------------------------------------------------------------------------
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 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> 156
<TABLE>
- -------------------------------------------------------------------------------------
<S> <C> <C>
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.

- -------------------------------------------------------------------------------
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 High Yield Tax-Free 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 Investor Services 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.
- -------------------------------------------------------------------------------------
</TABLE>

- -------------------------------------------------------------------------------
YOU WILL RECEIVE ACCOUNT STATEMENTS THAT
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 Board of Directors. Short-term debt
investments maturing within 60 days are valued at amortized cost, which the
Board of Directors has determined to approximate market value. If quotations are
not readily available, assets are valued by a method that the Board believes
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.

15
<PAGE> 157

your investment before the close of regular trading on the 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>
COMBINED
SALES CHARGE AS REALLOWANCE REALLOWANCE TO
SALES CHARGE AS A PERCENTAGE OF AND SERVICE FEE AS SELLING BROKERS AS
AMOUNT INVESTED A PERCENTAGE OF THE AMOUNT A PERCENTAGE OF A PERCENTAGE OF
(INCLUDING SALES CHARGE) OFFERING PRICE INVESTED OFFERING PRICE(+) THE OFFERING PRICE(*)
- ------------------------ --------------- --------------- ------------------ ---------------------
<S> <C> <C> <C> <C>
Less than $100,000 4.50% 4.71% 4.00% 3.76%
$100,000 to $249,999 3.75% 3.90% 3.25% 3.01%
$250,000 to $499,999 3.00% 3.09% 2.50% 2.26%
$500,000 to $999,999 2.00% 2.04% 1.75% 1.51%
$1,000,000 and over 0.00%(**) 0.00%(**) (***) 0.00%(***)
<FN>

(**) No sales charge is payable at the time of purchase of Class A shares of $1
million or more, but a CDSC 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 aggregate as follows:
1% on sales to $4,999,999, 0.50% on the next $5 million and 0.25% on
amounts of $10 million and over.

(+) At the time of sale, John Hancock Funds pays to Selling Brokers the first
year's service fee in advance in an amount equal to 0.25% of the net
assets invested in the Fund. Thereafter, it pays the service fee
periodically in arrears in an amount up to 0.25% of the Fund's average
annual net assets. Selling Brokers receive the fee as compensation for
providing personal and account maintenance services to shareholders.

</TABLE>

Sales charges ARE NOT APPLIED to any dividends 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."

16
<PAGE> 158

12 months after the end of the calendar month in which the purchase was made
(the CDSC period), a CDSC 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 may purchase Class A shares with no
initial sales charge, but if the shares are redeemed within 12 months after the
end of the calendar year in which the purchase was made, a CDSC will be imposed
at the above rate.

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:

17
<PAGE> 159

is the rate that would otherwise be applicable to investments of less than
$100,000. 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 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.

- - A member of an approved affinity group financial service plan.*

[FN]
- ------------------
*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 BE PURCHASED WITHOUT AN INITIAL SALES CHARGE IN
CONNECTION WITH CERTAIN LIQUIDATION, MERGER OR ACQUISITION TRANSACTIONS
INVOLVING OTHER INVESTMENT COMPANIES OR PERSONAL HOLDING COMPANIES.

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

18
<PAGE> 160

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, and next from the shares you have held the longest
during the six-year period. The CDSC is waived on redemptions in certain
circumstances. See the discussion "Waiver of Contingent Deferred Sales Charges"
below.
EXAMPLE:
You have purchased 100 shares at $10 per share. The second year after your
purchase, your investment's net asset value per share has increased by $2 to
$12, and you have gained 10 additional shares through dividend reinvestment. If
you redeem 50 shares at this time, your CDSC will be calculated as follows:

<TABLE>
<S> <C>
- - Proceeds of 50 shares redeemed at $12 per share $ 600
- - Minus proceeds of 10 shares not subject to CDSC because they were
acquired through dividend reinvestment (10 X $12) -120
- - Minus appreciation on remaining shares, also not subject to CDSC (40 X
$2) - 80
------
- - Amount subject to CDSC $ 400
</TABLE>

19
<PAGE> 161

- - 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 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
have less than $1,000 invested in the Fund.

- - 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.

20
<PAGE> 162

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 it is reasonably satisfied that investments recently made
by check or Invest-by-Phone have been collected (which may take up to 10
calendar days).

<TABLE>
- --------------------------------------------------------------------------------------

<S> <C>
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 Exchange is closed.
Investor Services employs the following procedures to
confirm that instructions received by telephone are
genuine. Your name, the account number, taxpayer
identification number applicable to the account and other
relevant information may be requested. In addition,
telephone instructions are recorded.
You may redeem up to $100,000 by telephone, but the address
on the account must not have changed for the last thirty
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 shares of the
Fund that are in certificated 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
use 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.
- --------------------------------------------------------------------------------------
</TABLE>

21
<PAGE> 163
<TABLE>
- --------------------------------------------------------------------------------------
<S> <C>
IN WRITING Send a stock power or "letter of instruction" specifying
the name of the Fund, the dollar amount or the number of
shares to be redeemed, your name, class of shares, your
account number and the additional requirements listed below
that apply to your particular account.
- --------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
TYPE OF REGISTRATION REQUIREMENTS
-------------------- ------------
<S> <C>
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 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.

- --------------------------------------------------------------------------------------
If you have certificates for your shares, you must submit them with your stock
power or a letter of instructions. 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 less than $1,000 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 or if the value of the
account falls below the required minimum as a result of market action. 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 60 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 dividend reinvestments, exceeds the number
of shares redeemed, repeated redemptions from a smaller account may eventually
trigger this policy.
- --------------------------------------------------------------------------------------
</TABLE>

22
<PAGE> 164

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.

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.

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

23
<PAGE> 165

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:

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> 166

REINVESTMENT PRIVILEGE

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

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.

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.

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)

25
<PAGE> 167

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 plan 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.

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.

INVESTMENTS, TECHNIQUES AND RISK FACTORS
LOWER RATED SECURITIES. Debt obligations that are rated in the lower ratings
categories, or which are unrated, involve greater volatility of price and risk
of loss of principal and income. In addition, lower ratings reflect a greater
possibility of an adverse change in financial condition affecting the ability of
the issuer to make payments of interest and principal.

UNRATED SECURITIES. Many issuers of fixed income securities choose not to have
their obligations rated. Although unrated securities eligible for purchase by
the

26
<PAGE> 168

Fund must be determined to be comparable in quality to securities having
specified ratings, the market for unrated securities may not be as broad as for
rated securities since many investors rely on rating agencies for credit
appraisal.
In evaluating the creditworthiness of an issue, whether rated or unrated, the
Adviser will take various factors into consideration, which may include the
issuer's financial resources, its sensitivity to economic conditions and trends,
the operating history of and the community support for the facility financed by
the issue, the ability of the issuer's management and regulatory matters.
RESTRICTED AND ILLIQUID SECURITIES. The Fund may invest up to 10% of its total
assets in illiquid investments, which include repurchase agreements maturing in
more than seven days, restricted securities and securities that are not readily
marketable. The Fund's investments in restricted securities eligible for resale
to certain institutional investors pursuant to Rule 144A under the Securities
Act of 1933 are subject to the foregoing limitation. To the extent that the
Fund's holdings of participation interests, COPs and inverse floaters are
determined to be illiquid, such holdings will be subject to the 10% restriction
on illiquid investments.
LENDING OF SECURITIES AND REPURCHASE AGREEMENTS. For the purpose of realizing
additional (taxable) income, the Fund may lend to broker-dealers portfolio
securities amounting to not more than 33% of its total assets taken at current
value or may enter into repurchase agreements. In a repurchase agreement, the
Fund buys a security subject to the right and obligation to sell it back to the
counterparty at the same price plus accrued interest. These transactions must be
fully collateralized at all times. The Fund may reinvest any cash collateral in
short-term, liquid debt securities. However, these transactions may involve some
credit risk to the Fund if the other party should default on its obligation and
the Fund is delayed in or prevented from recovering the collateral. Securities
loaned by the Fund will remain subject to fluctuations of market value.
REVERSE REPURCHASE AGREEMENTS. The Fund may enter into reverse repurchase
agreements, which involve the sale of a security by the Fund to a bank or
securities firm and its agreement to repurchase the instrument at a specified
time and price plus an agreed amount of interest. The Fund will use the proceeds
of reverse repurchase agreements to purchase other investments. Reverse
repurchase agreements are considered to be borrowings by the Fund and as an
investment practice may be considered speculative. The Fund will enter into a
reverse repurchase agreement only when the Adviser determines that the interest
income to be earned from the investment of the proceeds is greater than the
interest expense of the transaction. To minimize various risks associated with
reverse repurchase agreements, the Fund will establish and maintain with the
Custodian a separate account consisting of cash or liquid, high grade debt
securities in an amount at least equal to the repurchase prices of the
securities (plus any accrued interest thereon) under such agreements. In
addition, the Fund's investment restrictions provide that the Fund will not
enter into reverse repurchase agreements exceeding, in the aggregate, 33 1/3% of
the value of its total assets (including for this purpose other borrowings of
the Fund). The Fund will enter into reverse repurchase agreements only with
selected registered broker/ dealers or with federally insured banks or savings
and loan associations which are

27
<PAGE> 169

approved in advance as being creditworthy by the Board of Directors. Under
procedures established by the Board of Directors, the Adviser will monitor the
creditworthiness of the firms involved.
The use of reverse repurchase agreements involves leverage. Leverage allows any
investment gains made with the additional monies received (in excess of the
costs of the reverse repurchase agreement) to increase the net asset value of
the Fund's shares faster than would otherwise be the case. On the other hand, if
the additional monies received are invested in ways that do not fully recover
the costs of such transactions to the Fund, the net asset value of the Fund
would fall faster than would otherwise be the case.

SHORT-TERM TRADING AND PORTFOLIO TURNOVER. Short-term trading means the
purchase and subsequent sale of a security after it has been held for a
relatively brief period of time. Short-term trading may have the effect of
increasing portfolio turnover and may increase net short-term capital gains,
distributions from which would be taxable to shareholders as ordinary income.
The Fund does not intend to invest for the purpose of seeking short-term
profits. The Fund's portfolio securities may be changed, however, without regard
to the holding period of these securities (subject to certain tax restrictions),
when the Adviser deems that this action will help achieve the Fund's objective
given a change in an issuer's operations or changes in general market
conditions. The Fund's portfolio turnover rate is set forth in the table under
the caption "The Fund's Financial Highlights."

OPTIONS AND FUTURES TRANSACTIONS. The Fund may buy and sell options contracts
on debt securities and tax-exempt bond indices, interest rate and tax-exempt
bond index futures contracts and options on such futures contracts. Options and
futures contracts are bought and sold to manage the Fund's exposure to changing
interest rates and security prices. Some options and futures strategies,
including selling futures, buying puts and writing calls, tend to hedge a Fund's
investments against price fluctuations. Other strategies, including buying
futures, writing puts, and buying calls, tend to increase market exposure.
Options and futures may be combined with each other or with forward contracts in
order to adjust the risk and return characteristics of the overall strategy. The
Fund's transactions in options and futures contracts may be limited by the
requirements of the Code for qualification as a regulated investment company.
See the Statement of Additional Information for further discussion of options
and futures transactions, including tax effects and investment risks.

28
<PAGE> 170

MUNICIPAL LEASE OBLIGATIONS. The Fund may purchase participation interests
which give the Fund an undivided pro rata interest in a tax-exempt security. For
certain participation interests, the Fund will have the right to demand payment,
on a specified number of days' notice for all or any part of the Fund's
participation interest in the tax exempt security plus accrued interest.
Participation interests which are determined to be not readily marketable will
be considered illiquid for purposes of the Fund's 10% restriction on investment
in illiquid securities.

The Fund may also invest in COPs, which provide participation interests in lease
revenues. Each COP represents a proportionate interest in or right to the lease-
purchase payment made under municipal lease obligations or installment sales
contracts. Municipal lease obligations are issued by a state or municipal
financing authority to provide funds for the construction of facilities (e.g.,
schools, dormitories, office buildings or prisons) or the acquisition of
equipment. Certain municipal lease obligations may trade infrequently.
Accordingly, COPs will be monitored pursuant to analysis by the Adviser and
reviewed according to procedures adopted by the Board of Directors, which
consider various factors in determining liquidity risk. COPs will not be
considered illiquid for purposes of the Fund's 10% limitation on illiquid
securities, provided the Adviser determines that there is a readily available
market for such securities. An investment in COPs is subject to the risk that a
municipality may not appropriate sufficient funds to meet payments on the
underlying lease obligation. See the Statement of Additional Information for
additional discussion of participation interests and municipal lease
obligations.

CALLABLE BONDS. The Fund may purchase and hold callable Municipal Bonds which
contain a provision in the indenture permitting the issuer to redeem the bonds
prior to their maturity dates at a specified price which typically reflects a
premium over the bonds' original issue price. These bonds generally have call-
protection (a period of time during which the bonds may not be called) which
usually lasts for 7 to 10 years, after which time such bonds may be called away.
An issuer may generally be expected to call its bonds, or a portion of them
during periods of relatively declining interest rates, when borrowings may be
replaced at lower rates than those obtained in prior years. If the proceeds of a
bond called under such circumstances are reinvested, the result may be a lower
overall yield due to lower current interest rates. If the purchase price of such
bonds included a premium related to the appreciated value of the bonds, some or
all of that premium may not be recovered by bondholders, such as the Fund,
depending on the price at which such bonds were redeemed.

29
<PAGE> 171

instruments. The risks associated with the Fund's transactions in options,
futures and other derivative instruments may include some or all of the
following:

Credit Risk. Over-the-counter instruments involve a risk that the issuer or
counterparty will fail to perform its contractual obligations.

30
<PAGE> 172

APPENDIX A
EQUIVALENT YIELDS:
TAX EXEMPT VS. TAXABLE YIELD

The table below shows the effect of the tax status of municipal obligations on
the yield received by their holders under the regular federal income tax laws
that apply to 1996. It gives the approximate yield a taxable security must earn
at various income brackets to produce after-tax yields.

<TABLE>
TAX-FREE YIELDS 1996 TAX TABLE

SINGLE RETURN JOINT RETURN MARGINAL TAX-EXEMPT YIELD
- ---------------- ---------------- INCOME TAX ----------------------------------------------------------------------
(TAXABLE INCOME) RATE 4% 5% 6% 7% 8% 9% 10%
- ------------------------------------- ---------- ----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0-24,000 $ 0-40,100 15.0% 4.71% 5.88% 7.06% 8.24% 9.41% 10.59% 11.76%
$ 24,001-58,150 $ 40,101-96,900 28.0% 5.56% 6.94% 8.33% 9.72% 11.11% 12.50% 13.89%
$ 58,151-121,300 $ 96,901-147,700 31.0% 5.80% 7.25% 8.70% 10.14% 11.59% 13.04% 14.49%
$121,301-263,750 $147,701-263,750 36.0% 6.25% 7.81% 9.38% 10.94% 12.50% 14.06% 15.63%
Over $263,750 Over $263,750 39.6% 6.62% 8.28% 9.93% 11.59% 13.25% 14.90% 16.56%
</TABLE>

It is assumed that an investor filing a single return is not a "head of
household," a "married individual filing a separate return," or a "surviving
spouse." The table does not take into account the effects of reductions in the
deductibility of itemized deductions or the phaseout of personal exemptions for
taxpayers with adjusted gross incomes in excess of specified amounts. Further,
the table does not attempt to show any alternative minimum tax consequences,
which will depend on each shareholder's particular tax situation and may vary
according to what portion, if any, of the Fund's exempt-interest dividends is
attributable to interest on certain private activity bonds for any particular
taxable year. No assurance can be given that the Fund will achieve any specific
tax-exempt yield or that all of its income distributions will be tax-exempt.
Distributions attributable to any taxable income or capital gains realized by
the Fund will not be tax-exempt.

The information set forth above is as of the date of this Prospectus. Subsequent
tax law changes could result in prospective or retroactive changes in the tax
brackets, tax rates, and tax-equivalent yields set forth above.

This table is for illustrative purposes only and is not intended to imply or
guarantee any particular yield from the John Hancock High Yield Tax-Free Fund.
While it is expected that a substantial portion of the interest income
distributed to the Fund's shareholders will be exempt from federal income taxes,
portions of such distributions from time to time may be subject to federal
income taxes.

A-1
<PAGE> 173

APPENDIX B
DESCRIPTION OF BOND RATINGS AND FUND'S ASSET COMPOSITION

MOODY'S INVESTORS SERVICE, INC.
Aaa: 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.

Aa: 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 fluctuations 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.

A: 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 at some time in the future.

Baa: 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.

Ba: 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.

Caa: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.

Ca: Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.

STANDARD & POOR'S RATINGS GROUP
AAA: Debt rated AAA has the highest level 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 highest rated issues only in small degree.

B-1
<PAGE> 174

A: Debt rated A has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effect of changes in
circumstances and economic conditions than debt in higher rated categories.

BBB: Debt rated BBB is regarded as having an 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.

BB, B, CCC, CC: Debt rated BB, B, CCC and CC is regarded, on balance, as
predominantly speculative with respect to capacity to pay interest and repay
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
are outweighed by large uncertainties or major risk exposures to adverse
conditions.

QUALITY DISTRIBUTION
<TABLE>

The average weighted quality distribution of the securities in the portfolio
for the year ended October 31, 1995:

<CAPTION>
RATING RATING
AVERAGE % OF ASSIGNED % OF ASSIGNED % OF
SECURITY RATINGS VALUE PORTFOLIO BY ADVISER PORTFOLIO BY SERVICE PORTFOLIO
- ---------------- ------- --------- ------------ --------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
AAA............................ $ 16,810,022 9.9% $ 8,901,688 5.2% $ 7,908,334 4.7%
AA............................. 3,676,180 2.2% 0 0.0% 3,676,180 2.2%
A.............................. 9,501,060 5.6% 1,439,996 0.8% 8,061,064 4.8%
BBB............................ 40,489,400 23.9% 21,276,391 12.6% 19,213,009 11.3%
BB............................. 91,377,847 54.0% 69,498,871 41.1% 21,878,976 12.9%
B.............................. 5,428,379 3.2% 844,133 0.5% 4,584,246 2.7%
CCC............................ 0 0.0% 0 0.0% 0 0.0%
CC............................. 0 0.0% 0 0.0% 0 0.0%
C.............................. 0 0.0% 0 0.0% 0 0.0%
D.............................. 0 0.0% 0 0.0% 0 0.0%
------------ ------ ------------ ----- ----------- -----
Debt Securities................ 167,282,888 98.8% $101,961,079 60.2% $65,321,809 38.6%
Equity Securities.............. 0 0.0%
Short-Term Securities.......... 2,032,200 1.2%
------------ ------
Total Portfolio................ $169,315,088 100.0%
------------ ------
Other Assets -- Net............ $ 2,455,482
------------
Net Assets..................... $171,770,570
============
</TABLE>

The ratings are described in the Statement of Additional Information.

B-2
<PAGE> 175

(NOTES)

<PAGE> 176

(NOTES)

<PAGE> 177
JOHN HANCOCK
JOHN HANCOCK HIGH YIELD
HIGH YIELD TAX-FREE FUND TAX-FREE FUND

INVESTMENT ADVISER CLASS A AND CLASS B SHARES
John Hancock Advisers, Inc. PROSPECTUS
101 Huntington Avenue
Boston, Massachusetts 02199-7603 MARCH 1, 1996

PRINCIPAL DISTRIBUTOR A MUTUAL FUND SEEKING
John Hancock Funds, Inc. TO OBTAIN A HIGH LEVEL
101 Huntington Avenue OF CURRENT INCOME THAT
Boston, Massachusetts 02199-7603 IS LARGELY EXEMPT FROM
FEDERAL INCOME TAXES
CUSTODIAN AND IS CONSISTENT WITH
Investors Bank & Trust Company PRESERVATION OF
24 Federal Street CAPITAL.
Boston, Massachusetts 02110
101 HUNTINGTON AVENUE
TRANSFER AGENT BOSTON, MASSACHUSETTS 02199-7603
John Hancock Investor Services TELEPHONE 1-800-225-5291
Corporation
P.O. Box 9116
Boston, Massachusetts 02205-9116

INDEPENDENT AUDITORS
Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

HOW TO OBTAIN INFORMATION
ABOUT THE FUND

For Service Information
For Telephone Exchange call
1-800-225-5291
For Investment-by-Phone
For Telephone Redemption
For TDD call 1-800-554-6713

5900P 3/96 (LOGO) Printed on Recycled Paper
<PAGE> 178

JOHN HANCOCK

EMERGING GROWTH FUND

CLASS A AND CLASS B SHARES
PROSPECTUS

MARCH 1, 1996

<TABLE>
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<CAPTION>
Page
----
<S> <C>
Expense Information........................................................ 2
The Fund's Financial Highlights............................................ 3
Investment Objective and Policies.......................................... 5
Organization and Management of the Fund.................................... 7
Alternative Purchase Arrangements.......................................... 8
The Fund's Expenses........................................................ 9
Dividends and Taxes........................................................ 10
Performance................................................................ 11
How to Buy Shares.......................................................... 12
Share Price................................................................ 14
How to Redeem Shares....................................................... 19
Additional Services and Programs........................................... 21
Investments, Techniques and Risk Factors................................... 25

</TABLE>

This Prospectus sets forth the information about John Hancock Emerging Growth
Fund (the "Fund"), a diversified series of John Hancock Series, Inc. (the
"Company"), that you should know before investing. Please read and retain it for
future reference.

Additional information about the Fund and the Company has been filed with the
Securities and Exchange Commission (the "SEC"). You can obtain a copy of the
Fund's Statement of Additional Information, dated March 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).

EXPENSE INFORMATION

ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets)
Management fee....................................................................................... 0.75% 0.75%
12b-1 fee**.......................................................................................... 0.25% 1.00%
Other expenses***.................................................................................... 0.38% 0.38%
Total Fund operating expenses........................................................................ 1.38% 2.13%
<FN>
* 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 Rule 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.
*** Other Expenses include transfer agent, legal, audit, custody and other expenses.
+ Redemption by wire fee (currently $4.00) not included.
</TABLE>

<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............................................................... $63 $92 $122 $207
Class B Shares
-- Assuming complete redemption at end of period......................... $72 $97 $134 $227
-- Assuming no redemption................................................ $22 $67 $114 $227
(This example should not be considered a representation of past or future expenses. Actual expenses may be greater or less
than those shown.)
</TABLE>

2
<PAGE> 180

THE FUND'S FINANCIAL HIGHLIGHTS

The information in the following table of financial highlights has been
audited by Ernst & Young LLP, the Fund's independent auditors, whose unqualified
report is included in the Fund's 1995 Annual Report and 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 ("Investor Services") at the address or telephone number
listed on the front page of this Prospectus.

<TABLE>
Selected data for Class A shares outstanding throughout each period is as follows:
<CAPTION>
FOR THE PERIOD
AUGUST 22, 1991
(COMMENCEMENT
YEAR ENDED OCTOBER 31, OF OPERATIONS)
----------------------------------------------------- TO OCTOBER 31,
1995(B) 1994 1993 1992 1991
-------- -------- -------- -------- ----------------
<S> <C> <C> <C> <C> <C>
CLASS A
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period.............. $ 26.82 $ 25.89 $ 20.60 $ 19.26 $ 18.12
-------- -------- ------- ------- -------
Net Investment Loss(a)............................ (0.25) (0.18) (0.16) (0.20) (0.03)
Net Realized and Unrealized Gain on Investments... 9.52 1.11 5.45 1.60 1.17
-------- -------- ------- ------- -------
Total from Investment Operations.............. 9.27 0.93 5.29 1.40 1.14
-------- -------- ------- ------- -------
Less Distributions
Distributions From Net Realized Gain on
Investments Sold................................ -- -- -- (0.06) --
-------- -------- ------- ------- -------
Net Asset Value, End of Period.................... $ 36.09 $ 26.82 $ 25.89 $ 20.60 $ 19.26
======== ======== ======= ======= =======
Total Investment Return at Net Asset Value(c)..... 34.56% 3.59% 25.68% 7.32% 6.29%(d)
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's Omitted)......... $179,481 $131,053 $81,263 $46,137 $38,859
Ratio of Expenses to Average Net Assets........... 1.38% 1.44% 1.40% 1.67% 0.33%
Ratio of Net Investment Loss to Average Net
Assets.......................................... (0.83)% (0.71)% (0.70)% (1.03)% (0.15)%*
Portfolio Turnover Rate........................... 23% 25% 29% 48% 66%
</TABLE>

3
<PAGE> 181

<TABLE>
Selected data for Class B shares outstanding throughout each period is as follows:

<CAPTION>
PERIOD
ENDED
YEAR ENDED OCTOBER 31, OCT.
-------------------------------------------------------------------------------------------- 31,
1995(b) 1994 1993 1992 1991 1990 1989 1988 1987(e)
-------- -------- -------- ------- ------- ------- ------ ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS B
PER SHARE OPERATING
PERFORMANCE
Net Asset Value,
Beginning of
Period............. $ 26.04 $ 25.33 $ 20.34 $ 19.22 $ 11.06 $ 12.76 $10.54 $ 7.89 $ 7.89
-------- -------- -------- ------- ------- ------- ------ ------ ---------
Net Investment
Loss(a)............ (0.45) (0.36) (0.36) (0.38) (0.30) (0.22) (0.08) 0.09 (0.0021)
Net Realized and
Unrealized Gain
(Loss) on
Investments........ 9.20 1.07 5.35 1.56 8.46 (1.26) 2.83 2.56 0.0021
-------- -------- -------- ------- ------- ------- ------ ------ --------
Total from Investment
Operations......... 8.75 0.71 4.99 1.18 8.16 (1.48) 2.75 2.65 0.0000
-------- -------- -------- ------- ------- ------- ------ ------ --------
Less Distributions
Dividends from Net
Investment
Income............. -- -- -- -- -- -- (0.04) -- --
Distributions from
Net Realized Gain
on Investments
Sold............... -- -- -- (0.06) -- (0.22) (0.49) -- --
-------- -------- -------- ------- ------- ------- ------ ------ --------
Total
Distributions...... -- -- -- (0.06) -- (0.22) (0.53) -- --
-------- -------- -------- ------- ------- ------- ------ ------ --------
Net Asset Value, End
of Period.......... $ 34.79 $ 26.04 $ 25.33 $ 20.34 $ 19.22 $ 11.06 $12.76 $10.54 $ 7.89
======== ======== ======== ======= ======= ======= ====== ====== ========
Total Investment
Return at Net Asset
Value(c)........... 33.60% 2.80% 24.53% 6.19% 73.78% (11.82)% 27.40% 33.59% 0.00%
Total Adjusted
Investment Return
at Net Asset Value
(f)(g)............. -- -- -- -- -- -- 27.37% 31.00% (0.41)%

RATIOS AND
SUPPLEMENTAL DATA
Net Assets, End of
Period (000's
Omitted)........... $393,478 $283,435 $219,484 $86,923 $52,743 $11,668 $7,877 $3,232 $ 79
Ratio of Expenses to
Average Net
Assets............. 2.11% 2.19% 2.28% 2.64% 2.85% 3.11% 3.48% 3.05% 0.03%
Ratio of Adjusted Net
Investment (Loss)
to Average Net
Assets (f)......... -- -- -- -- -- -- (0.70)% (1.78)% (0.44)%
Ratio of Net
Investment Income
(Loss) to Average
Net Assets......... (1.55)% (1.46)% (1.58)% (1.99)% (1.83)% (1.64)% (0.67)% 0.81% (0.03)%
Ratio of Adjusted
Expenses to Average
Net Assets (f)..... -- -- -- -- -- -- 3.51% 5.64% 0.44%
Portfolio Turnover
Rate............... 23% 25% 29% 48% 66% 82% 90% 252% 0%
<FN>
- ---------------
* On an annualized basis.
(a) On average month end shares outstanding.
(b) On December 22, 1994, John Hancock Advisers, Inc. became the investment adviser of the Fund.
(c) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charge.
(d) Not annualized.
(e) Financial highlights, including total return, are for the period October 26, 1987 (date of the Fund's initial offering of
shares to the public) to October 31, 1987 and have not been annualized.
(f) On an unreimbursed basis without expense reduction.
(g) An estimated total return calculation takes into consideration fees and expense reduced or borne by the Adviser during the
periods shown.
</TABLE>

4
<PAGE> 182

INVESTMENT OBJECTIVE AND POLICIES

The Fund seeks long-term growth of capital through investing primarily (at least
80% of its assets in normal circumstances) in the common stocks of rapidly
growing small-sized companies (those with a market capitalization of $500
million or less) to medium-sized companies (those with a market capitalization
of up to $1 billion). Current income is not a factor of consequence in the
selection of stocks for the Fund.

In order to achieve its objective, the Fund invests in a diversified group of
companies whose growth rates are expected to significantly exceed that of the
average industrial company. It invests in these companies early in their
corporate life cycle before they become widely recognized and well known, and
while their reputations and track records are still emerging ("emerging growth
companies"). Consequently, the Fund invests in the stocks of emerging growth
companies whose capitalization, sales and earnings are smaller than those of the
Fortune 500 companies. Further, the Fund's investments in emerging growth stocks
may include those of more established companies which offer the possibility of
rapidly accelerating earnings because of revitalized management, new products,
or structural changes in the economy.

- -------------------------------------------------------------------------------
THE FUND SEEKS LONG-TERM GROWTH OF CAPITAL
THROUGH INVESTING PRIMARILY IN THE COMMON
STOCKS OF RAPIDLY GROWING SMALL TO
MEDIUM-SIZED COMPANIES.
- -------------------------------------------------------------------------------

The nature of investing in emerging growth companies involves greater risk than
is customarily associated with investments in more established companies. In
particular, the value of securities of emerging growth companies tends to
fluctuate more widely than other types of investments. Because emerging growth
companies may be in the early stages of their development, they may be dependent
on a relatively few products or services. They may also lack adequate capital
reserves or may be dependent on one or two management individuals. Their stocks
are often traded "over-the-counter" or on a regional exchange, and may not be
traded in volumes typical of trading on a national exchange. Consequently, the
investment risk is higher than that normally associated with larger, older,
better-known companies. In order to help reduce this risk, the Fund allocates
its investments among different industries.

Most of the Fund's investments will be in equity securities of U.S. companies.
However, since many emerging growth companies are located outside the United
States, a significant portion of the Fund's investments may occasionally be
invested in equity securities of non-U.S. companies. See "Investments,
Techniques and Risk Factors" for a discussion of foreign securities and their
risks.

While the Fund will invest primarily in emerging growth companies, the balance
of the Fund's assets may be invested in: (1) other common stocks; (2) preferred
stocks; (3) convertible securities (up to 10% of the Fund's total assets may be
invested in convertible securities rated as low as "B" by Standard & Poor's
Ratings Group ("S&P") or Moody's Investors Service, Inc. ("Moody's") or, if
unrated, determined by John Hancock Advisers, Inc. (the "Adviser") to be
comparable in quality to those rated "B"); (4) warrants; and (5) debt
obligations of the U.S. Government, its agencies and instrumentalities.

5
<PAGE> 183

In order to provide liquidity for the purchase of new investments and to effect
redemptions of its shares, the Fund will invest a portion of its assets in high
quality, short-term debt securities with remaining maturities of one year or
less, including U.S. Government securities, certificates of deposit, bankers'
acceptances, commercial paper, corporate debt securities and related repurchase
agreements.

The Fund may lend its portfolio securities, enter into repurchase agreements and
reverse repurchase agreements, and purchase restricted and illiquid securities.

In addition, the Fund may write (sell) covered call and put options on equity
securities, stock indices and stock index futures. The Fund may purchase call
and put options on these securities, indices and futures. The Fund may also
write straddles, which are combinations of put and call options on the same
security. The Fund may buy and sell stock index futures contracts for hedging
purposes. Options and futures contracts are generally considered to be
"derivative" instruments because they derive their value from the performance of
an underlying asset, index or other economic benchmark. See "Investments,
Techniques and Risk Factors" for additional discussion of derivative
instruments.

During periods of unusual market conditions when the Adviser believes that
investing for temporary defensive purposes is appropriate, part or all of the
Fund's assets may be invested in cash or cash equivalents consisting of:
(1) obligations of banks (including certificates of deposit, bankers'
acceptances and repurchase agreements) with assets of $100,000,000 or more;
(2) commercial paper rated within the two highest rating categories of a
nationally recognized rating organization; (3) investment grade short-term
notes; (4) obligations issued or guaranteed by the U.S. Government or any of its
agencies or instrumentalities; and (5) related repurchase agreements. See
"Investments, Techniques and Risk Factors" for more information about the Fund's
investments.

The Fund has adopted certain investment restrictions which are enumerated in
detail in the Statement of Additional Information where they are classified as
fundamental or nonfundamental. Those restrictions designated as fundamental may
not be changed without shareholder approval. The Fund's investment objective and
investment policies are nonfundamental, which means that they may be changed by
the Board of Directors without shareholder approval. However, the Fund's
investment objective may not be changed without 30 days' prior written notice
first having been given to shareholders. If there is a change in the Fund's
investment objective, you should consider whether the Fund remains an
appropriate investment in light of your current financial position and needs.
Notwithstanding the Fund's fundamental investment restriction prohibiting
investments in other investment companies, the Fund may, pursuant to an order
granted by the SEC, invest in other investment companies in connection with a
deferred compensation plan for the non-interested Trustees of the John Hancock
funds.

RISK FACTORS. Because the value of the Fund's portfolio securities and
therefore the Fund's net asset value per share will fluctuate with changes in
general economic and market conditions, the net asset value per share at the
time an

6
<PAGE> 184

investor's shares are redeemed may be more or less than the value at the time of
purchase. An investment in the Fund is intended for long-term investors who can
accept the risks associated with investing primarily in emerging growth
companies. For additional information about risks associated with an investment
in the Fund, see "Investments, Techniques and Risk Factors."

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 determined by the Board of Directors, the Adviser may place
securities transactions with brokers affiliated with the Adviser. These brokers
include Tucker Anthony Incorporated, Sutro & Company, Inc. and John Hancock
Distributors, Inc., which are indirectly owned by the John Hancock Mutual Life
Insurance Company (the "Life Company"), which in turn indirectly owns the
Adviser.

ORGANIZATION AND MANAGEMENT OF THE FUND
The Fund is a diversified portfolio of the Company, an open-end management
investment company organized as a Maryland corporation in 1987. The Company
reserves the right to create and issue a number of series of shares, or funds or
classes thereof, which are separately managed and have different investment
objectives. The Board of Directors has authorized the issuance of two classes of
the Fund, designated Class A and Class B. The shares of each class represent an
interest in the same portfolio of investments of the Fund. Each class has equal
rights as to voting, redemption, dividends and liquidation. However, each class
bears different distribution and transfer agent fees and other expenses. Also,
Class A and Class B shareholders have exclusive voting rights with respect to
their distribution plans. The Company is not required to and does not intend to
hold annual meetings of shareholders, although special meetings may be held for
such purposes as electing or removing Directors, changing fundamental policies
or approving a management contract. The Company, under certain circumstances,
will assist in shareholder communications with other shareholders.

Investment decisions are made by the Fund's co-portfolio managers, Edgar M.
Larsen and Benjamin A. Hock, Jr. Mr. Larsen has served as portfolio manager
since the Fund's inception in 1987. Mr. Hock was previously a portfolio manager
at Transamerica Fund Company and served in similar positions at Securities
Management Research and Interfirst Investment Management.

7
<PAGE> 185

ALTERNATIVE PURCHASE ARRANGEMENTS

- -------------------------------------------------------------------------------
AN ALTERNATIVE PURCHASE PLAN ALLOWS YOU TO
CHOOSE THE METHOD OF PAYMENT THAT IS BEST
FOR YOU.
- -------------------------------------------------------------------------------

FACTORS TO CONSIDER IN CHOOSING AN ALTERNATIVE

8
<PAGE> 186

THE FUND'S EXPENSES

9
<PAGE> 187
- -------------------------------------------------------------------------------
THE FUND PAYS DISTRIBUTION AND SERVICE
FEES FOR MARKETING AND SALES-RELATED
SHAREHOLDER SERVICING.
- -------------------------------------------------------------------------------

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 0.25% of the Class A shares' average daily
net assets and an aggregate annual rate of 1.00% of the Class B shares' average
daily net assets. In each case, up to 0.25% for Class A shares and Class B
shares 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; (iii) unreimbursed distribution expenses under the Fund's prior
distribution plans; (iv) distribution expenses incurred by other investment
companies which sell all or substantially all of their assets to, merge with or
otherwise engage in a reorganization transaction with the Fund; and (v) with
respect to Class B shares only, interest expenses on unreimbursed distribution
expenses. The service fees will be used to compensate Selling Brokers and others
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. 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 October 31, 1995, an
aggregate of $9,697,401 of distribution expenses or 3.02% of the average net
assets of the Fund's Class B shares was not reimbursed or recovered by John
Hancock Funds through the receipt of deferred sales charges or Rule 12b-1 fees
in prior periods.

Information on the Fund's total expenses is in the Financial Highlights section
of this Prospectus.

DIVIDENDS AND TAXES

DIVIDENDS. The Fund generally declares and distributes dividends representing
all or substantially all net investment income, if any, annually. The Fund will
distribute net short-term or long-term capital gains, if any, at least annually.

Dividends are reinvested on the record dates in additional shares of your class
unless you elect the option to receive 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."

10
<PAGE> 188

term capital gains. These dividends are taxable whether received in cash or
reinvested in additional shares. Certain dividends paid by the Fund in January
of a given year may be taxable to you as if you received them the prior
December. Corporate shareholders may be entitled to take the corporate dividends
received deduction for dividends received from the Fund that are attributable to
dividends received by the Fund from U.S. domestic corporations, subject to
certain restrictions under the Internal Revenue Code of 1986, as amended (the
"Code").

The Fund may be subject to foreign withholding taxes or other foreign taxes on
income (possibly including capital gains) on certain of its foreign investments,
if any, which will reduce the yield or return from those investments. The Fund
expects that it will generally not qualify to pass these taxes through to its
shareholders, who consequently will generally not include them in income or be
entitled to associated foreign tax credits or deductions.

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. A
state income (and possibly local income and/or intangible property) tax
exemption is generally available to the extent the Fund's distributions are
derived from interest on (or, in the case of intangibles taxes, the value of its
assets is attributable to) certain U.S. Government obligations, provided in some
states that certain thresholds for holdings of such obligations and/or reporting
requirements are satisfied. Non-U.S. shareholders and tax-exempt shareholders
are subject to different tax treatment not described above. You should consult
your tax adviser for specific advice.

PERFORMANCE

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 High-

11
<PAGE> 189

lights"). Investments at a lower sales charge would result in higher performance
figures. The total return calculations for the Class B shares reflect deduction
of the applicable CDSC imposed on a redemption of shares held for the applicable
period (except as shown in "The Fund's Financial Highlights"). All calculations
assume that dividends are reinvested at net asset value on the reinvestment
dates during the periods. The total return for 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."

HOW TO BUY SHARES
- --------------------------------------------------------------------------------
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.

- --------------------------------------------------------------------------------
OPENING AN ACCOUNT
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
BY CHECK 1. Make your check payable to John Hancock Investor Services
Corporation, P.O. Box 9115, Boston, MA, 02205-9115.
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 Emerging Growth 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 funds may be drawn.
PROGRAM 2. The amount you elect to invest will be withdrawn
(MAAP) automatically from your bank or credit union account.
- --------------------------------------------------------------------------------

12
<PAGE> 190

- --------------------------------------------------------------------------------

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 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.
- --------------------------------------------------------------------------------

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 Emerging Growth 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
Investor Services 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 ACCOUNT STATEMENTS THAT
YOU SHOULD KEEP TO HELP WITH YOUR PERSONAL
RECORDKEEPING.
- -------------------------------------------------------------------------------

13
<PAGE> 191

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 Board of Directors. Short-term debt
investments maturing within 60 days are valued at amortized cost, which the
Board of Directors has determined to approximate 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 values have been materially affected by events occurring after the closing
of a foreign market, assets are valued by a method that the Board believes
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.

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>
COMBINED
SALES CHARGE AS REALLOWANCE REALLOWANCE TO
AMOUNT INVESTED SALES CHARGE AS A PERCENTAGE OF AND SERVICE FEE AS SELLING BROKERS AS
(INCLUDING SALES A PERCENTAGE OF THE AMOUNT A PERCENTAGE OF A PERCENTAGE OF
CHARGE) OFFERING PRICE INVESTED OFFERING PRICE(+) THE OFFERING PRICE(*)
- ---------------- ----------------- --------------- ------------------ -------------------------
<S> <C> <C> <C> <C>
Less than $50,000 5.00% 5.26% 4.25% 4.01%
$50,000 to $99,999 4.50% 4.71% 3.75% 3.51%
$100,000 to $249,999 3.50% 3.63% 2.85% 2.61%
$250,000 to $499,999 2.50% 2.56% 2.10% 1.86%
$500,000 to $999,999 2.00% 2.04% 1.60% 1.36%
$1,000,000 and over 0.00%(**) 0.00%(**) (***) 0.00%(***)
<FN>
(*) Upon notice to Selling Brokers with whom it has sales agreements, John Hancock Funds may reallow an
amount up to the full applicable sales charge. A Selling Broker to whom substantially the entire
sales charge is reallowed or who receives these incentives 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 CDSC
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
</TABLE>

14
<PAGE> 192

responsible for purchases of $1 million or more in aggregate as follows:
1% on sales to $4,999,999, 0.50% on the next $5 million and 0.25% on
amounts of $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."

<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>

15
<PAGE> 193

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 are in one of the following categories, you may purchase Class A shares
of the Fund without paying a sales charge:

16
<PAGE> 194

- - A member of an approved affinity group financial service plan.*

--------------------
*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.

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, 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:

- - 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

17
<PAGE> 195

<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>

- - Redemptions made to effect mandatory distributions under the Code after age
70 1/2 from a tax-deferred retirement plan.

- - Redemptions due to death or disability.

18
<PAGE> 196

- - 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
have less than $1,000 invested in the Fund.

- - 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.

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 it is reasonably satisfied that investments recently made
by check or Invest-by-Phone have been collected (which may take up to 10
calendar days).

19
<PAGE> 197

- --------------------------------------------------------------------------------

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 Exchange is closed. Investor
Services employs the following procedures to confirm that
instructions received by telephone are genuine. Your name, the
account number, taxpayer identification number applicable to
the account and other relevant information may be requested.
In addition, telephone instructions are recorded.

You may redeem up to $100,000 by telephone, but the address on
the account must not have changed for the last thirty 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
certificated 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 use 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.
- -------------------------------------------------------------------------------
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, 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(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.
- --------------------------------------------------------------------------------

20
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- --------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
WHO MAY GUARANTEE YOUR SIGNATURE.
- -------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
THROUGH YOUR BROKER. Your broker may be able to initiate the redemption.
Contact your broker for instructions.

Shareholders will be notified before these redemptions are to be made or
this fee is imposed, and will have 60 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 dividend reinvestments,
exceeds the number of shares redeemed, repeated redemptions from a smaller
account may eventually trigger this policy.

- --------------------------------------------------------------------------------

ADDITIONAL SERVICES AND PROGRAMS

21
<PAGE> 199

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.

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.

BY TELEPHONE

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.

22
<PAGE> 200

IN WRITING

1. In a letter, request an exchange and list the following:

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 a John Hancock fund 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 the purpose of computing the CDSC payable
upon a subsequent redemption will include the holding period of the redeemed
shares.

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

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.

23
<PAGE> 201

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.

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)

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 plan 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

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

2. The initial investment minimum or aggregate minimum for any of the above
plans is $250. However, accounts being established as group IRA, SEP,

24
<PAGE> 202

SARSEP, TSA, 401(k) and Section 457 Plans will be accepted without an initial
minimum investment.

INVESTMENTS, TECHNIQUES AND RISK FACTORS

FOREIGN CURRENCY TRANSACTIONS. The Fund may purchase securities quoted or
denominated in foreign currencies. The value of investments in these securities
and the value of dividends and interest earned, if any, may be significantly
affected by changes in currency exchange rates. Some foreign currency values may
be volatile, and there is the possibility of governmental control on currency
exchange or governmental intervention in currency markets, which could adversely
affect the Fund. As a result, the Fund may enter into forward foreign currency
exchange contracts to protect against changes in foreign currency exchange
rates. The Fund will not speculate in foreign currencies or in forward foreign
currency exchange contracts, but will enter into these transactions only in
connection with its hedging strategies. 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 certain
strategies could minimize the risk of loss due to a decline in the value of the
hedged foreign currency, they could also limit any potential gain which might
result from an increase in the value of the currency. See the Statement of
Additional Information for further discussion of the uses and risks of forward
foreign currency exchange contracts.

CONVERTIBLE SECURITIES. The Fund may invest in convertible securities. Up to
10% of the Fund's total assets may be invested in convertible securities rated
as low as

25
<PAGE> 203

"B" by S&P or Moody's or, if unrated, determined by the Adviser to be comparable
in quality to those rated "B." Convertible securities rated less than "BBB" by
S&P or "Baa" by Moody's, which are included in the category of securities
commonly called "junk bonds," generally involve greater volatility of price and
risk of loss of principal and income than securities in the higher rating
categories and these securities are considered speculative by S&P and Moody's.
The secondary market for "lower rated" convertible securities may be less liquid
than for higher rated securities. The limited liquidity of the market may
adversely affect the ability of the Board of Directors to arrive at a fair value
for certain securities at certain times and could make it difficult for the Fund
to sell the securities. See "Convertible Securities" in the Statement of
Additional Information for a further discussion of convertible securities.

RESTRICTED AND ILLIQUID SECURITIES. The Fund may invest up to 10% of its net
assets in illiquid investments, which include repurchase agreements maturing in
more than seven days, restricted securities and securities that are not readily
marketable. Without regard to this limitation, the Fund may invest in restricted
securities eligible for resale to certain institutional investors pursuant to
Rule 144A under the Securities Act of 1933 as long as such securities meet
liquidity guidelines established by the Board of Directors.

REVERSE REPURCHASE AGREEMENTS. The Fund may enter into reverse repurchase
agreements which involve the sale of a security by the Fund to a bank or
securities firm and its agreement to repurchase the instrument at a specified
time and price plus an agreed amount of interest. The Fund will use the proceeds
to purchase other investments. Reverse repurchase agreements are considered to
be borrowings by the Fund and as an investment practice may be considered
speculative. The Fund will enter into a reverse repurchase agreement only when
the Adviser determines that the interest income to be earned from the investment
of the proceeds is greater than the interest expense of the transaction. To
minimize various risks associated with reverse repurchase agreements, the Fund
will establish and maintain with the Custodian a separate account consisting of
cash or liquid, high grade debt securities in an amount at least equal to the
repurchase prices of the securities (plus any accrued interest thereon) under
such agreements. In addition, the Fund's investment restrictions provide that
the Fund would not enter into reverse repurchase agreements exceeding, in the
aggregate, 33 1/3%

26
<PAGE> 204

of the value of its total assets (including for this purpose other borrowings of
the Fund). The Fund will enter into reverse repurchase agreements only with
selected registered broker/dealers or with federally insured banks or savings
and loan associations which are approved in advance as being creditworthy by the
Board of Directors. Under procedures established by the Board of Directors, the
Adviser will monitor the creditworthiness of the firms involved.

OPTIONS AND FUTURES TRANSACTIONS. The Fund may buy and sell options contracts
on equity securities and stock indices, stock index futures contracts and
options on such futures contracts. Options and futures contracts are bought and
sold to enhance return or to manage the Fund's exposure to changing security
prices. Some options and futures strategies, including selling futures, buying
puts and writing calls, tend to hedge a Fund's investments against price
fluctuations. Other strategies, including buying futures, writing puts, and
buying calls, tend to increase market exposure. Options and futures may be
combined with each other or with forward contracts in order to adjust the risk
and return characteristics of the overall strategy. All of the Fund's futures
contracts and options on futures contracts will be traded on a U.S. commodity
exchange or board of trade. The Fund's transactions in options and futures
contracts may be limited by the requirements of the Code for qualification as a
regulated investment company. See the Statement of Additional Information for
further discussion of options and futures transactions, including tax effects
and investment risks.

Market Risk. Options and futures transactions, as well as other derivative
instruments, involve the risk that the applicable market will move against the

27
<PAGE> 205

Fund's derivative position and that the Fund will incur a loss. For derivative
contracts other than purchased options, this loss may exceed the amount of the
initial investment made or the premium received by the Fund.

Leverage and Volatility Risk. Derivative instruments may increase or leverage
the Fund's exposure to a particular market risk, which may increase the
volatility of the Fund's net asset value. The Fund may partially offset the
leverage inherent in derivative instruments by maintaining a segregated account
consisting of cash and liquid, high grade debt securities, by holding offsetting
portfolio securities or currency positions or by covering written options.

Credit Risk. Over-the-counter instruments involve a risk that the issuer or
counterparty will fail to perform its contractual obligations.

28
<PAGE> 206

(NOTES)
<PAGE> 207

(NOTES)
<PAGE> 208

(NOTES)
<PAGE> 209

JOHN HANCOCK
EMERGING GROWTH 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
Investors Bank & Trust Company
24 Federal Street
Boston, Massachusetts 02110

TRANSFER AGENT
John Hancock Investor Services
Corporation
P.O. Box 9116
Boston, Massachusetts 02205-9116

INDEPENDENT AUDITORS
Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

HOW TO OBTAIN INFORMATION
ABOUT THE FUND

For Service Information
For Telephone Exchange call 1-800-225-5291
For Investment-by-Phone
For Telephone Redemption
For TDD call 1-800-554-6713

6000P 3/96 (LOGO) Printed on Recycled Paper

JOHN HANCOCK
EMERGING
GROWTH FUND

CLASS A AND CLASS B SHARES
PROSPECTUS
MARCH 1, 1996

A MUTUAL FUND SEEKING
LONG-TERM GROWTH OF
CAPITAL THROUGH INVESTING
PRIMARILY IN THE COMMON
STOCKS OF RAPIDLY GROWING
SMALL-SIZED COMPANIES TO
MEDIUM-SIZED COMPANIES.

101 HUNTINGTON AVENUE
BOSTON, MASSACHUSETTS 02199-7603
TELEPHONE 1-800-225-5291
<PAGE> 210
JOHN HANCOCK SERIES, INC.
101 Huntington Avenue
Boston, Massachusetts 02199-7603

consisting of six series,

JOHN HANCOCK MONEY MARKET FUND
JOHN HANCOCK GLOBAL RESOURCES FUND
JOHN HANCOCK GOVERNMENT INCOME FUND
JOHN HANCOCK HIGH YIELD BOND FUND
JOHN HANCOCK HIGH YIELD TAX-FREE FUND
JOHN HANCOCK EMERGING GROWTH FUND

(each, a "Fund" and collectively, the "Funds")

CLASS A AND CLASS B SHARES

STATEMENT OF ADDITIONAL INFORMATION
MARCH 1, 1996

This Statement of Additional Information ("SAI") provides information
about John Hancock Series, Inc. (the "Corporation") and the Funds, in addition
to the information that is contained in the Fund's Prospectuses dated March 1,
1996.

This SAI is not a prospectus. It should be read in conjunction with the
Funds' Prospectuses, copies 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

<PAGE> 211

<TABLE>
TABLE OF CONTENTS
<CAPTION>

Page
----

<S> <C>
Organization of the Corporation. . . . . . . . . . . . . . . . . . 3
Investment Objectives and Policies . . . . . . . . . . . . . . . . 3
Certain Investment Practices . . . . . . . . . . . . . . . . . . . 5
Investment Restrictions. . . . . . . . . . . . . . . . . . . . . . 6
Those Responsible for Management . . . . . . . . . . . . . . . . . 33
Investment Advisory and Other Services . . . . . . . . . . . . . . 43
Distribution Contract. . . . . . . . . . . . . . . . . . . . . . . 47
Net Asset Value. . . . . . . . . . . . . . . . . . . . . . . . . . 51
Initial Sales Charge on Class A Shares . . . . . . . . . . . . . . 53
Deferred Sales Charge on Class B Shares. . . . . . . . . . . . . . 54
Special Redemptions. . . . . . . . . . . . . . . . . . . . . . . . 55
Additional Services and Programs . . . . . . . . . . . . . . . . . 55
Description of the Corporation's Shares. . . . . . . . . . . . . . 57
Tax Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Calculation of Performance . . . . . . . . . . . . . . . . . . . . 64
Brokerage Allocation . . . . . . . . . . . . . . . . . . . . . . . 69
Transfer Agent Services. . . . . . . . . . . . . . . . . . . . . . 71
Custody of Portfolio . . . . . . . . . . . . . . . . . . . . . . . 72
Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . 72
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . F-1

</TABLE>

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<PAGE> 212

ORGANIZATION OF THE CORPORATION

The Corporation is an open-end management investment company organized
as a Maryland corporation on June 22, 1987. The Corporation currently has six
series: John Hancock Emerging Growth Fund, John Hancock Global Resources Fund,
John Hancock Government Income Fund, John Hancock High Yield Bond Fund, John
Hancock High Yield Tax-Free Fund and John Hancock Money Market Fund. Prior to
September 12, 1995, the John Hancock Money Market Fund was called John Hancock
Money Market Fund B. Prior to December 22, 1994, the Funds were called
Transamerica Emerging Growth Fund, Transamerica Global Resources Fund,
Transamerica Government Income Fund, Transamerica High Yield Bond Fund,
Transamerica High Yield Tax-Free Fund and Transamerica Money Market Fund B.

Each Fund is managed by John Hancock Advisers, Inc. (the "Adviser"), a
wholly-owned indirect subsidiary of John Hancock Mutual Life Insurance Company
(the "Life Company"), chartered in 1862 with national headquarters at John
Hancock Place, Boston, Massachusetts. John Hancock Funds, Inc. ("John Hancock
Funds") acts as principal distributor of the shares of the Funds.

INVESTMENT OBJECTIVES AND POLICIES

JOHN HANCOCK MONEY MARKET FUND ("Money Market Fund") seeks to provide maximum
current income consistent with capital preservation and liquidity. The Fund's
investments will be subject to the market fluctuation and risks inherent in all
securities.

JOHN HANCOCK GLOBAL RESOURCES FUND'S ("Global Resources Fund") investment
objectives are to protect the purchasing power of shareholders' capital and to
achieve growth of capital. The first of these objectives means that the Fund
seeks to protect generally shareholders' invested capital against erosion of
the value of the U.S. dollar through inflation. Current income will not be a
primary consideration in selecting securities. However, it will be an important
factor in making selections among securities believed otherwise comparable by
the Adviser.

INVESTMENT PHILOSOPHY OF GLOBAL RESOURCES FUND. The Adviser believes
that, based upon past performance, the securities of specific companies that
hold different types of substantial resource assets or engage in resource-
related or energy-related activities may move relatively independently of one
another during different stages of inflationary or deflationary cycles because
of different degrees of demand for, or market values of, their respective
resource holdings or resource-related or energy-related business during
particular portions of such cycles. For example, during the period 1976 to
1980, the prices of oil company stocks increased relatively more than the
prices of coal company stocks when compared to the performance of relevant
stock market indices. The Adviser will seek to identify companies or
asset-based securities which it believes are attractively priced relative to
the intrinsic value of the underlying resource assets or resource-related or
energy-related business or are especially well positioned to benefit during
particular portions of inflationary or deflationary cycles. It is expected that
when management of the Fund anticipates significant economic, political or
financial instability, such as high inflationary or deflationary pressures or
major dislocations in the foreign currency exchange markets, the Fund

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<PAGE> 213

may, in seeking to protect the purchasing power of shareholders' capital,
invest a majority of its assets in companies that explore for, extract,
process or deal in gold or in asset-based securities indexed to the value of
gold bullion. Such a switch in investment strategies could result in
substantial liquidation of portfolio securities and significant transaction
costs. The Fund's approach of active investment management enables it to switch
its emphasis among various industry groups, depending upon the Adviser's
outlook with respect to prevailing trends and developments. The Fund may seek
to hedge its portfolio partially by writing covered call options or purchasing
put options on its portfolio holdings.

JOHN HANCOCK GOVERNMENT INCOME FUND'S ("Government Income Fund") investment
objective is to earn a high level of current income consistent with
preservation of capital by investing primarily in securities that are issued or
guaranteed as to principal and interest by the U.S. Government, its agencies or
instrumentalities. The Fund may seek to enhance its current return and may seek
to hedge against changes in interest rates by engaging in transactions
involving options (subject to certain limits), futures and options on futures.
The Fund expects that under normal market conditions it will invest at least
80% of its total assets in U.S. Government securities (and related repurchase
agreements and forward commitments).

JOHN HANCOCK HIGH YIELD BOND FUND'S ("High Yield Bond Fund") primary
investment objective is to maximize current income without assuming undue risk
by investing in a diversified portfolio consisting primarily of lower-rated,
high yielding, fixed income securities, such as: domestic and foreign corporate
bonds; debentures and notes; convertible securities; preferred stocks; and
domestic and foreign government obligations. As a secondary objective, the Fund
seeks capital appreciation, but only when it is consistent with the primary
objective of maximizing current income.

JOHN HANCOCK HIGH YIELD TAX-FREE FUND'S ("High Yield Tax-Free Fund") primary
investment objective is to obtain a high level of current income that is
largely exempt from federal income taxes and is consistent with the
preservation of capital. The Fund pursues this objective by normally investing
substantially all of its assets in medium and lower quality obligations,
including bonds, notes and commercial paper, issued by or on behalf of states,
territories and possessions of the United States, The District of Columbia and
their political subdivisions, agencies or instrumentalities, the interest on
which is exempt from federal income tax ("tax-exempt securities"). The Fund
seeks as its secondary objective preservation of capital by purchasing and
selling interest rate futures contracts ("financial futures") and tax-exempt
bond index futures contracts ("index futures"), and by purchasing and writing
put and call options on debt securities, financial futures, tax-exempt bond
indices and index futures to hedge against changes in the general level of
interest rates.

JOHN HANCOCK EMERGING GROWTH FUND ("Emerging Growth Fund") seeks long-term
growth of capital through investing primarily (at least 80% of its assets
in normal circumstances) in the common stocks of rapidly growing small-sized
companies (those with a market capitalization of $500 million or less) to
medium-sized companies (those with a market capitalization of up to $1
billion.) Current income is not a factor of consequence in the selection of
stocks for the Fund.

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<PAGE> 214

There can be no assurance that the Funds will achieve their respective
investment objectives.

CERTAIN INVESTMENT PRACTICES

GOVERNMENT SECURITIES. Each Fund may invest in U.S. Government
securities, which are obligations issued or guaranteed by the U.S. Government
and its agencies, authorities or instrumentalities. Certain U.S. Government
securities, including U.S. Treasury bills, notes and bonds, and Government
National Mortgage Association certificates ("Ginnie Maes"), are supported by
the full faith and credit of the United States. Certain other U.S. Government
securities, issued or guaranteed by Federal agencies or government sponsored
enterprises, are not supported by the full faith and credit of the United
States, but may be supported by the right of the issuer to borrow from the U.S.
Treasury. These securities include obligations of the Federal Home Loan
Mortgage Corporation ("Freddie Macs"), and obligations supported by the credit
of the instrumentality, such as Federal National Mortgage Association Bonds
("Fannie Maes"). No assurance can be given that the U.S. Government will
provide financial support to such Federal agencies, authorities,
instrumentalities and government sponsored enterprises in the future.

CUSTODIAL RECEIPTS. The Funds may each acquire custodial receipts in
respect of U.S. government securities. Such custodial receipts evidence
ownership of future interest payments, principal payments or both on certain
notes or bonds. These custodial receipts are known by various names, including
Treasury Receipts, Treasury Investors Growth Receipts ("TIGRs"), and
Certificates of Accrual on Treasury Securities ("CATS"). For certain securities
law purposes, custodial receipts are not considered U.S. government securities.

BANK AND CORPORATE OBLIGATIONS. Each of the Funds may invest in
commercial paper. Commercial paper represents short-term unsecured promissory
notes issued in bearer form by banks or bank holding companies, corporations
and finance companies. The commercial paper purchased by the Funds consists of
direct U.S. dollar denominated obligations of domestic or foreign issuers. Bank
obligations in which a Fund may invest include certificates of deposit,
bankers' acceptances and fixed time deposits. Certificates of deposit are
negotiable certificates issued against funds deposited in a commercial bank for
a definite period of time and earning a specified return.

Bankers' acceptances are negotiable drafts or bills of exchange,
normally drawn by an importer or exporter to pay for specific merchandise,
which are "accepted" by a bank, meaning, in effect, that the bank
unconditionally agrees to pay the face value of the instrument on maturity.
Fixed time deposits are bank obligations payable at a stated maturity date and
bearing interest at a fixed rate. Fixed time deposits may be withdrawn on
demand by the investor, but may be subject to early withdrawal penalties which
vary depending upon market conditions and the remaining maturity of the
obligation. There are no contractual restrictions on the right to transfer a
beneficial interest in a fixed time deposit to a third party, although there is
no market for such deposits. Bank notes and bankers' acceptances rank junior to
domestic deposit liabilities of the bank and pari passu with other senior,
unsecured obligations of the bank. Bank notes are not insured by the Federal
Deposit Insurance Corporation or any other insurer. Deposit notes are

-5-
<PAGE> 215

insured by the Federal Deposit Insurance Corporation only to the extent of
$100,000 per depositor per bank.

MUNICIPAL OBLIGATIONS. Money Market Fund, High Yield Bond Fund and High
Yield Tax- Free Fund may invest in a variety of municipal obligations which
consist of municipal bonds, municipal notes and municipal commercial paper.

MUNICIPAL BONDS. Municipal bonds are issued to obtain funds for various
public purposes including the construction of a wide range of public facilities
such as airports, highways, bridges, schools, hospitals, housing, mass
transportation, streets and water and sewer works. Other public purposes for
which municipal bonds may be issued include refunding outstanding obligations,
obtaining funds for general operating expenses and obtaining funds to lend to
other public institutions and facilities. In addition, certain types of
industrial development bonds are issued by or on behalf of public authorities
to obtain funds for many types of local, privately operated facilities. Such
debt instruments are considered municipal obligations if the interest paid on
them is exempt from federal income tax. The payment of principal and interest
by issuers of certain obligations purchased by a Fund may be guaranteed by a
letter of credit, note repurchase agreement, insurance or other credit facility
agreement offered by a bank or other financial institution. Such guarantees and
the creditworthiness of guarantors will be considered by the Adviser in
determining whether a municipal obligation meets the Fund's investment quality
requirements. No assurance can be given that a municipality or guarantor will
be able to satisfy the payment of principal or interest on a municipal
obligation.

MUNICIPAL NOTES. Municipal notes are short-term obligations of
municipalities, generally with a maturity ranging from six months to three
years. The principal types of such notes include tax, bond and revenue
anticipation notes and project notes.

MUNICIPAL COMMERCIAL PAPER. Municipal commercial paper is a short-term
obligation of a municipality, generally issued at a discount with a maturity of
less than one year. Such paper is likely to be issued to meet seasonal working
capital needs of a municipality or interim construction financing. Municipal
commercial paper is backed in many cases by letters of credit, lending
agreements, note repurchase agreements or other credit facility agreements
offered by banks and other institutions.

Federal tax legislation enacted in the 1980's placed substantial new
restrictions on the issuance of the bonds described above and in some cases
eliminated the ability of state or local governments to issue municipal
obligations for some of the above purposes. Such restrictions do not affect the
Federal income tax treatment of municipal obligations in which a Fund may
invest which were issued prior to the effective dates of the provisions
imposing such restrictions. The effect of these restrictions may be to reduce
the volume of newly issued municipal obligations.

Issuers of municipal obligations are subject to the provisions of
bankruptcy, insolvency and other laws affecting the rights and remedies of
creditors, such as the Federal Bankruptcy Act, and laws, if any, which may be
enacted by Congress or state legislatures extending the time for payment of
principal or interest, or both, or imposing other constraints upon enforcement
of such obligations. There is also the possibility that as a result of
litigation or other conditions the power

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or ability of any one or more issuers to pay when due the principal of and
interest on their municipal obligations may be affected.

The yields of municipal bonds depend upon, among other things, general
money market conditions, general conditions of the municipal bond market, size
of a particular offering, the maturity of the obligation and rating of the
issue. The ratings of Standard & Poor's Ratings Group ("S&P"), Moody's
Investors Service, Inc. ("Moody's") and Fitch Investors Service ("Fitch")
represent their respective opinions on the quality of the municipal bonds they
undertake to rate. It should be emphasized, however, that ratings are general
and not absolute standards of quality. Consequently, municipal bonds with the
same maturity, coupon and rating may have different yields and municipal bonds
of the same maturity and coupon with different ratings may have the same yield.
See the Appendix for a description of ratings. Many issuers of securities
choose not to have their obligations rated. Although unrated securities
eligible for purchase by a Fund must be determined to be comparable in quality
to securities having certain specified ratings, the market for unrated
securities may not be as broad as for rated securities since many investors
rely on rating organizations for credit appraisal.

MORTGAGE-BACKED SECURITIES. Government Income Fund and High Yield Bond
Fund may invest in mortgage pass-through certificates and multiple-class
pass-through securities, such as real estate mortgage investment conduits
("REMIC") pass-through certificates, collateralized mortgage obligations
("CMOs") and stripped mortgage-backed securities ("SMBS"), and other types of
"Mortgage-Backed Securities" that may be available in the future.

GUARANTEED MORTGAGE PASS-THROUGH SECURITIES. Guaranteed mortgage
pass-through securities represent participation interests in pools of
residential mortgage loans and are issued by U.S. Governmental or private
lenders and guaranteed by the U.S. Government or one of its agencies or
instrumentalities, including but not limited to the Government National
Mortgage Association ("Ginnie Mae"), the Federal National Mortgage Association
("Fannie Mae") and the Federal Home Loan Mortgage Corporation ("Freddie Mac").
Ginnie Mae certificates are guaranteed by the full faith and credit of the U.S.
Government for timely payment of principal and interest on the certificates.
Fannie Mae certificates are guaranteed by Fannie Mae, a federally chartered and
privately owned corporation, for full and timely payment of principal and
interest on the certificates. Freddie Mac certificates are guaranteed by
Freddie Mac, a corporate instrumentality of the U.S. Government, for timely
payment of interest and the ultimate collection of all principal of the related
mortgage loans.

MULTIPLE-CLASS PASS-THROUGH SECURITIES AND COLLATERALIZED MORTGAGE
OBLIGATIONS. CMOs and REMIC pass-through or participation certificates may be
issued by, among others, U.S. Government agencies and instrumentalities as well
as private lenders. CMOs and REMIC certificates are issued in multiple classes
and the principal of and interest on the mortgage assets may be allocated among
the several classes of CMOs or REMIC certificates in various ways. Each class
of CMOs or REMIC certificates, often referred to as a "tranche," is issued at a
specific adjustable or fixed interest rate and must be fully retired no later
than its final distribution date. Generally, interest is paid or accrues on
all classes of CMOs or REMIC certificates on a monthly basis.

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Typically, CMOs are collateralized by Ginnie Mae, Fannie Mae or Freddie
Mac certificates but also may be collateralized by other mortgage assets such
as whole loans or private mortgage pass-through securities. Debt service on
CMOs is provided from payments of principal and interest on collateral of
mortgaged assets and any reinvestment income thereon.

A REMIC is a CMO that qualifies for special tax treatment under the
Internal Revenue Code of 1986, as amended (the "Code") and invests in certain
mortgages primarily secured by interests in real property and other permitted
investments.

STRIPPED MORTGAGE-BACKED SECURITIES. SMBS are derivative
multiple-class mortgage-backed securities. SMBS are usually structured with two
classes that receive different proportions of interest and principal
distributions on a pool of mortgage assets. A typical SMBS will have one class
receiving some of the interest and most of the principal, while the other class
will receive most of the interest and the remaining principal. In the most
extreme case, one class will receive all of the interest (the "interest only"
class) while the other class will receive all of the principal (the "principal
only" class). The yields and market risk of interest only and principal only
SMBS, respectively, may be more volatile than those of other fixed income
securities. The staff of the SEC considers privately issued SMBS to be
illiquid.

STRUCTURED OR HYBRID NOTES. Government Income Fund, High Yield Bond
Fund and High Yield Tax-Free Fund may invest in "structured" or "hybrid" notes.
The distinguishing feature of a structured or hybrid note is that the amount of
interest and/or principal payable on the note is based on the performance of a
benchmark asset or market other than fixed income securities or interest rates.
Examples of these benchmarks include stock prices, currency exchange rates and
physical commodity prices. Investing in a structured note allows a Fund to gain
exposure to the benchmark market while fixing the maximum loss that the Fund
may experience in the event that market does not perform as expected. Depending
on the terms of the note, a Fund may forego all or part of the interest and
principal that would be payable on a comparable conventional note; a Fund's
loss cannot exceed this foregone interest and/or principal. An investment in
structured or hybrid notes involves risks similar to those associated with a
direct investment in the benchmark asset.

RISK FACTORS ASSOCIATED WITH MORTGAGE-BACKED SECURITIES. Investing in
Mortgage-Backed Securities involves certain risks, including the failure of a
counter-party to meet its commitments, adverse interest rate changes and the
effects of prepayments on mortgage cash flows. In addition, investing in the
lowest tranche of CMOs and REMIC certificates involves risks similar to those
associated with investing in equity securities. Further, the yield
characteristics of Mortgage-Backed Securities differ from those of traditional
fixed income securities. The major differences typically include more frequent
interest and principal payments (usually monthly), the adjustability of
interest rates, and the possibility that prepayments of principal may be made
substantially earlier than their final distribution dates.

Prepayment rates are influenced by changes in current interest rates
and a variety of economic, geographic, social and other factors and cannot be
predicted with certainty. Both adjustable rate mortgage loans and fixed rate
mortgage loans may be subject to a greater rate of principal prepayments in a
declining interest rate environment and to a lesser rate of principal

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prepayments in an increasing interest rate environment. Under certain interest
rate and prepayment rate scenarios, a Fund may fail to recoup fully its
investment in Mortgage-Backed Securities notwithstanding any direct or indirect
governmental, agency or other guarantee. When a Fund reinvests amounts
representing payments and unscheduled prepayments of principal, it may receive
a rate of interest that is lower than the rate on existing adjustable rate
mortgage pass-through securities. Thus, Mortgage-Backed Securities, and
adjustable rate mortgage pass-through securities in particular, may be less
effective than other types of U.S. Government securities as a means of "locking
in" interest rates.

Conversely, in a rising interest rate environment, a declining
prepayment rate will extend the average life of many Mortgage-Backed
Securities. This possibility is often referred to as extension risk. Extending
the average life of a Mortgage-Backed Security increases the risk of
depreciation due to future increases in market interest rates.

RISK ASSOCIATED WITH SPECIFIC TYPES OF DERIVATIVE DEBT SECURITIES.
Different types of derivative debt securities are subject to different
combinations of prepayment, extension and/or interest rate risk. Conventional
mortgage pass-through securities and sequential pay CMOs are subject to all of
these risks, but are typically not leveraged. Thus, the magnitude of exposure
may be less than for more leveraged Mortgage-Backed Securities.

The risk of early prepayments is the primary risk associated with
interest only debt securities ("IOs"), super floaters, other leveraged floating
rate instruments and Mortgage-Backed Securities purchased at a premium to their
par value. In some instances, early prepayments may result in a complete loss
of investment in certain of these securities. The primary risks associated with
certain other derivative debt securities are the potential extension of average
life and/or depreciation due to rising interest rates.

These securities include floating rate securities based on the Cost of
Funds Index ("COFI floaters"), other "lagging rate" floating rate securities,
floating rate securities that are subject to a maximum interest rate ("capped
floaters"), Mortgage-Backed Securities purchased at a discount, leveraged
inverse floating rate securities ("inverse floaters"), principal only debt
securities ("POs"), certain residual or support tranches of CMOs and index
amortizing notes. Index amortizing notes are not Mortgage-Backed Securities,
but are subject to extension risk resulting from the issuer's failure to
exercise its option to call or redeem the notes before their stated maturity
date. Leveraged inverse IOs combine several elements of the Mortgage-Backed
Securities described above and thus present an especially intense combination
of prepayment, extension and interest rate risks.

Planned amortization class ("PAC") and target amortization class
("TAC") CMO bonds involve less exposure to prepayment, extension and interest
rate risk than other Mortgage-Backed Securities, provided that prepayment rates
remain within expected prepayment ranges or "collars." To the extent that
prepayment rates remain within these prepayment ranges, the residual or support
tranches of PAC and TAC CMOs assume the extra prepayment, extension and
interest rate risk associated with the underlying mortgage assets.

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Other types of floating rate derivative debt securities present more
complex types of interest rate risks. For example, range floaters are subject
to the risk that the coupon will be reduced to below market rates if a
designated interest rate floats outside of a specified interest rate band or
collar. Dual index or yield curve floaters are subject to depreciation in the
event of an unfavorable change in the spread between two designated interest
rates. X-reset floaters have a coupon that remains fixed for more than one
accrual period. Thus, the type of risk involved in these securities depends on
the terms of each individual X-reset floater.

ASSET-BACKED SECURITIES. Government Income Fund and High Yield Bond
Fund may invest a portion of their assets in asset-backed securities which are
rated in one of the two highest rating categories by a nationally recognized
statistical rating organization (e.g., S&P or Moody's) or if not so rated, of
equivalent investment quality in the opinion of the Adviser.

Asset-backed securities are often subject to more rapid repayment than
their stated maturity date would indicate as a result of the pass-through of
prepayments of principal on the underlying loans. During periods of declining
interest rates, prepayment of loans underlying asset-backed securities can be
expected to accelerate. Accordingly, a Fund's ability to maintain positions in
such securities will be affected by reductions in the principal amount of such
securities resulting from prepayments, and its ability to reinvest the returns
of principal at comparable yields is subject to generally prevailing interest
rates at that time.

Credit card receivables are generally unsecured and the debtors on such
receivables are entitled to the protection of a number of state and federal
consumer credit laws, many of which give such debtors the right to set-off
certain amounts owed on the credit cards, thereby reducing the balance due.
Automobile receivables generally are secured, but by automobiles rather than
residential real property. Most issuers of automobile receivables permit the
loan servicers to retain possession of the underlying obligations. If the
servicer were to sell these obligations to another party, there is a risk that
the purchaser would acquire an interest superior to that of the holders of the
asset-backed securities. In addition, because of the large number of vehicles
involved in a typical issuance and technical requirements under state laws, the
trustee for the holders of the automobile receivables may not have a proper
security interest in the underlying automobiles. Therefore, there is the
possibility that, in some cases, recoveries on repossessed collateral may not
be available to support payments on these securities.

ASSET-BASED SECURITIES. Global Resources Fund may invest in debt
securities, preferred stocks or convertible securities, the principal amount,
redemption terms or conversion terms of which are related to the market price
of some resource asset such as gold bullion. For the purposes of the Fund's
investment policies, these securities are referred to as asset-based
securities.

If the asset-based security is backed by a bank letter of credit or
other similar facility, the Adviser may take such backing into account in
determining the credit quality of the asset-based security. Although an
asset-based security and the related natural resource asset generally are
expected to move in the same direction, there may not be perfect correlation in
the two price movements. Asset-based securities may not be secured by a
security interest in or claim on the underlying natural resource assets. The
Fund's holdings of such securities may not generate

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appreciable current income and the return from such securities primarily will
be from any profit on the sale, maturity or conversion thereof at a time
when the price of the related asset is higher than it was when the Fund
purchased such securities.

The asset-based securities in which the Fund may invest may bear
interest or pay preferred dividends at below market (or even relatively
nominal) rates. Certain asset-based securities may be payable at maturity in
cash at the stated principal amount or, at the option of the holder, directly
in a stated amount of the asset to which it is related. In such instance,
because the Fund presently does not intend to invest directly in natural
resource assets other than gold bullion, the Fund would sell the asset-based
security in the secondary market, to the extent one exists, prior to maturity
if the value of the stated amount of the asset exceeds the stated principal
amount and thereby realize the appreciation in the underlying asset.

The Fund will not acquire asset-based securities for which no
established secondary trading market exists if at the time of acquisition more
than 10% of its total assets are invested in securities which are not readily
marketable. The Fund may invest in asset-based securities without limit when it
has the right to sell such securities to the issuer or a stand-by bank or
broker and receive the principal amount or redemption price thereof less
transaction costs on no more than seven days notice or when the Fund has the
right to convert such securities into a readily marketable security in which it
could otherwise invest upon not more than seven days notice.

SPECIAL CONSIDERATIONS RELATED TO INVESTMENT IN GOLD. Under certain
circumstances, Global Resources Fund may invest a majority of its assets in
gold, gold related securities or securities of gold-related companies. Based on
historic experience, during periods of economic or financial instability the
securities of such companies may be subject to extreme price fluctuations,
reflecting the high volatility of gold prices during such periods. Gold may be
affected by unpredictable international monetary and political policies, social
conditions within a particular country, trade imbalances or trade or currency
restrictions between countries. In addition, the instability of gold prices
may result in volatile earnings of gold-related companies which, in turn, may
affect adversely the financial condition of such companies. Gold mining
companies also are subject to the risks generally associated with mining
operations.

The major producers of gold include the Republic of South Africa,
Russia, Canada, the United States, Brazil and Australia. Sales of gold by
Russia are largely unpredictable and often relate to political and economic
considerations rather than to market forces. Economic, social and political
developments within South Africa may affect significantly South African gold
production and the markets for South African gold which may in turn
significantly affect the price of gold.

The Fund is currently authorized to invest up to 10% of its assets in
gold bullion and coins, although it does not currently intend to invest in
coins. The Fund may seek to increase this limit to 25% through negotiation with
a certain state which imposes the 10% limit as a condition for qualifying the
shares of the Fund for sale in that state.

Investments in gold may help to hedge against inflation and major
fluctuations in the Fund's shares because at certain times the price of gold
has fluctuated less widely than the value of the securities which are permitted
investments. When the Fund purchases bullion, the Adviser

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currently intends that it will be only in a form that is readily marketable and
that it will be delivered to and stored with a qualified U.S. bank. An
investment in bullion earns no investment income and involves higher custody
and transaction costs than investments in securities. The Fund will also incur
the cost of insurance in connection with holding gold. The market for gold
bullion is presently unregulated which could affect the ability of the Fund to
acquire or dispose of gold bullion. In order to qualify as a regulated
investment company for federal income taxes, the Fund may receive no more than
10% of its yearly gross income from gains caused by selling gold bullion or
coins and from certain other sources that do not produce "qualifying" income.
The Fund may be required, therefore, either to hold its gold bullion or sell it
at a loss, or to sell its portfolio securities at a gain, when it would not
otherwise do so for investment reasons. The Fund may also purchase precious
metal warehouse receipts that may be convertible into cash or gold bullion as
an alternative to a direct investment in gold. Whereas gold bullion is traded
in the form of contracts to buy or sell bullion which are in the nature of
futures or commodities contracts, warehouse receipts represent ownership of a
specified quantity of identified gold bars held in storage. Although ownership
of gold in this manner entails storage and insurance expense, there is an
active over-the-counter market in such receipts so that they are a liquid
investment. For purposes of the Fund's investment limitations, such warehouse
receipts would be considered to be equivalent to direct investments in the
precious metals.

FOREIGN SECURITIES AND EMERGING COUNTRIES. Emerging Growth Fund, Global
Resources Fund and High Yield Bond Fund may invest in securities of foreign
issuers. These Funds may also invest in debt and equity securities of corporate
and governmental issuers of countries with emerging economies or securities
markets. Government Income Fund may invest in foreign currency denominated
securities of foreign governments considered stable by the Adviser and may
hedge such investments through various options and futures transactions
involving foreign currencies. Money Market Fund may invest in foreign
securities and in certificates of deposit, bankers' acceptances and fixed time
deposits and other obligations issued by foreign banks and their U.S. and
foreign branches and foreign branches of U.S. banks. Money Market Fund may also
invest in municipal instruments backed by letters of credit issued by certain
of such banks. Under current Securities and Exchange Commission ("SEC") rules
relating to the use of the amortized cost method of portfolio securities
valuation, Money Market Fund is restricted to purchasing U.S. dollar
denominated securities.

Investing in obligations of non-U.S. issuers and foreign banks,
particularly securities of issuers located in emerging countries, may entail
greater risks than investing in similar securities of U.S. issuers. These risks
include (i) social, political and economic instability; (ii) the small current
size of the markets for many such securities and the currently low or
nonexistent volume of trading, which may result in a lack of liquidity and in
greater price volatility; (iii) certain national policies which may restrict a
Fund's investment opportunities, including restrictions on investment in
issuers or industries deemed sensitive to national interests; (iv) foreign
taxation; and (v) the absence of developed structures governing private or
foreign investment or allowing for judicial redress for injury to private
property.

Investing in securities of non-U.S. companies may entail additional
risks due to the potential political and economic instability of certain
countries and the risks of expropriation, nationalization, confiscation or the
imposition of restrictions on foreign investment and on

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repatriation of capital invested. In the event of such expropriation,
nationalization or other confiscation by any country, a Fund could lose
its entire investment in any such country.

In addition, even though opportunities for investment may exist in
foreign countries, and in particular emerging markets, any change in the
leadership or policies of the governments of those countries or in the
leadership or policies of any other government which exercises a significant
influence over those countries, may halt the expansion of or reverse the
liberalization of foreign investment policies now occurring and thereby
eliminate any investment opportunities which may currently exist.

Investors should note that upon the accession to power of authoritarian
regimes, the governments of a number of Latin American countries previously
expropriated large quantities of real and personal property similar to the
property which may be represented by the securities purchased by the Funds. The
claims of property owners against those governments were never finally settled.
There can be no assurance that any property represented by foreign securities
purchased by a Fund will not also be expropriated, nationalized, or otherwise
confiscated. If such confiscation were to occur, a Fund could lose a
substantial portion of its investments in such countries. A Fund's investments
would similarly be adversely affected by exchange control regulation in any of
those countries.

Certain countries in which the Funds may invest may have vocal
minorities that advocate radical religious or revolutionary philosophies or
support ethnic independence. Any disturbance on the part of such individuals
could carry the potential for widespread destruction or confiscation of
property owned by individuals and entities foreign to such country and could
cause the loss of a Fund's investment in those countries.

Certain countries prohibit or impose substantial restrictions on
investments in their capital markets, particularly their equity markets, by
foreign entities such as the Funds. As illustrations, certain countries require
governmental approval prior to investments by foreign persons, or limit the
amount of investment by foreign persons in a particular company, or limit the
investment by foreign persons to only a specific class of securities of a
company that may have less advantageous terms than securities of the company
available for purchase by nationals. Moreover, the national policies of
certain countries may restrict investment opportunities in issuers or
industries deemed sensitive to national interests. In addition, some countries
require governmental approval for the repatriation of investment income,
capital or the proceeds of securities sales by foreign investors. A Fund could
be adversely affected by delays in, or a refusal to grant, any required
governmental approval for repatriation, as well as by the application to it of
other restrictions on investments.

Foreign companies are subject to accounting, auditing and financial
standards and requirements that differ, in some cases significantly, from those
applicable to U.S. companies. In particular, the assets, liabilities and
profits appearing on the financial statements of such a company may not reflect
its financial position or results of operations in the way they would be
reflected had such financial statements been prepared in accordance with U.S.
generally accepted accounting principles. Most foreign securities held by the
Funds will not be registered with the SEC and such issuers thereof will not be
subject to the SEC's reporting requirements. Thus, there

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will be less available information concerning foreign issuers of securities
held by the Funds than is available concerning U.S. issuers. In instances where
the financial statements of an issuer are not deemed to reflect accurately the
financial situation of the issuer, the Adviser or Subadviser will take
appropriate steps to evaluate the proposed investment, which may include
on-site inspection of the issuer, interviews with its management and
consultations with accountants, bankers and other specialists. There is
substantially less publicly available information about foreign companies than
there are reports and ratings published about U.S. companies and the U.S.
government. In addition, where public information is available, it may be less
reliable than such information regarding U.S. issuers.

Because the Funds (other than Money Market Fund) may invest, and Global
Resources Fund will (under normal circumstances) invest a substantial portion
of their total assets, in securities which are denominated or quoted in foreign
currencies, the strength or weakness of the U.S. dollar against such currencies
may account for part of the Funds' investment performance. A decline in the
value of any particular currency against the U.S. dollar will cause a decline
in the U.S. dollar value of a Fund's holdings of securities denominated in such
currency and, therefore, will cause an overall decline in the Fund's net asset
value and any net investment income and capital gains to be distributed in U.S.
dollars to shareholders of the Fund.

The rate of exchange between the U.S. dollar and other currencies is
determined by several factors including the supply and demand for particular
currencies, central bank efforts to support particular currencies, the movement
of interest rates, the pace of business activity in certain other countries and
the U.S., and other economic and financial conditions affecting the world
economy.

Although the Funds value their respective assets daily in terms of U.S.
dollars, the Funds do not intend to convert their holdings of foreign
currencies into U.S. dollars on a daily basis. However, the Funds may do so
from time to time, and investors should be aware of the costs of currency
conversion. Although currency dealers do not charge a fee for conversion, they
do realize a profit based on the difference ("spread") between the prices at
which they are buying and selling various currencies. Thus, a dealer may offer
to sell a foreign currency to a Fund at one rate, while offering a lesser rate
of exchange should the Fund desire to sell that currency to the dealer.

Securities of foreign issuers, and in particular many emerging country
issuers, may be less liquid and their prices more volatile than securities of
comparable U.S. issuers. In addition, foreign securities exchanges and brokers
are generally subject to less governmental supervision and regulation than in
the U.S., and foreign securities exchange transactions are usually subject to
fixed commissions, which are generally higher than negotiated commissions on
U.S. transactions. In addition, foreign securities exchange transactions may be
subject to difficulties associated with the settlement of such transactions.
Delays in settlement could result in temporary periods when assets of a Fund
are uninvested and no return is earned thereon. The inability of a Fund to make
intended security purchases due to settlement problems could cause the Fund to
miss attractive investment opportunities. Inability to dispose of a portfolio
security due to settlement problems either could result in losses to a Fund due
to subsequent declines in value of the portfolio security

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or, if the Fund has entered into a contract to sell the security could result
in possible liability to the purchaser.

The Funds' investment income or, in some cases, capital gains from
foreign issuers may be subject to foreign withholding or other taxes, thereby
reducing the Funds' net investment income and/or net realized capital gains.
See "Tax Status."

DEPOSITARY RECEIPTS. As discussed in the Prospectuses, Emerging Growth
Fund, Global Resources Fund and High Yield Bond Fund may invest in the
securities of foreign issuers in the form of American Depositary Receipts
("ADRs"), European Depositary 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.

OPTIONS ON FOREIGN CURRENCIES. Global Resources Fund may purchase and
write put and call options on foreign currencies for the purpose of protecting
against declines in the dollar value of portfolio securities and against
increases in the dollar cost of securities to be acquired.

As in the case of other types of options, however, the writing of an
option on foreign currency will constitute only a partial hedge, such as the
amount of the premium received and the Fund could be required to purchase or
sell foreign currencies at disadvantageous exchange rates, thereby incurring
losses. The purchase of an option on foreign currency may constitute an
effective hedge against fluctuations in exchange rates although, in the event
of rate movements adverse to the Fund's position, it may forfeit the entire
amount of the premium plus related transaction costs.

Options on foreign currencies are traded in a manner substantially
similar to options on securities. In particular, an option on foreign currency
provides the holder with the right to purchase, in the case of a call option,
or to sell, in the case of a put option, a stated quantity of a particular
currency for a fixed price up to a stated expiration date. The writer of the
option undertakes the obligation to deliver, in the case of a call option, or
to purchase, in the case of a put option, the quantity of the currency called
for in the option, upon exercise of the option by the holder.

As in the case of other types of options, the holder of an option on
foreign currency is required to pay a one-time, non-refundable premium, which
represents the cost of purchasing the option. The holder can lose the entire
amount of this premium, as well as related transaction costs, but not more than
this amount. The writer of the option, in contrast, generally is required to
make initial and variation margin payments similar to margin deposits required
in the trading of futures contracts and the writing of other types of options.
The writer is therefore subject to risk of loss beyond the amount originally
invested and above the value of the option at the time it is

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entered into. Certain options on foreign currencies like forward contracts are
traded over-the-counter through financial institutions acting as market-makers
in such options and the underlying currencies. Such transactions therefore
involve risks not generally associated with exchange-traded instruments.
Options on foreign currencies may also be traded on national securities
exchanges regulated by the SEC or commodities exchanges regulated by the
Commodity Futures Trading Commission.

FORWARD FOREIGN CURRENCY CONTRACTS. Emerging Growth Fund, Global
Resources Fund and High Yield Bond Fund may engage in forward foreign currency
transactions. Generally, the foreign currency exchange transactions of the
Funds 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. A
Fund may also deal in forward foreign currency exchange contracts involving
currencies of the different countries in which it may 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 Funds' dealings in forward foreign currency exchange contracts will be
limited to hedging either specified transactions or portfolio positions.
Transaction hedging is the purchase or sale of forward foreign currency
contracts with respect to specific receivables or payables of a 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. A 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. The Board of Directors
has adopted a policy of monitoring the Funds' foreign currency contract income
to assure that the Funds qualify as regulated investment companies under the
Code. The Fund will not engage in speculative forward foreign currency exchange
transactions.

If a Fund purchases a forward contract, its custodian bank will
segregate cash or high grade liquid 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 securities in the separate account
declines, additional cash or securities will be placed in the account so that
the value of the account will be equal to the amount of the Fund's commitment
with respect to such contracts.

Hedging against a decline in the value of 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 a 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 a Fund of engaging in foreign currency exchange
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.

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REPURCHASE AGREEMENTS. Each Fund may enter into repurchase agreements.
A repurchase agreement is a contract under which the Fund would acquire a
security for a relatively short period (generally not more than seven 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 securities dealers. 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 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. The Fund
will not invest in a repurchase agreement maturing in more than seven days, if
such investment, together with other illiquid securities held by the Fund
(including restricted securities) would exceed 10% of the Fund's total assets.

REVERSE REPURCHASE AGREEMENTS. Each Fund may also enter into reverse
repurchase agreements which involve the sale of government securities held in
its portfolio to a bank or securities firm with an agreement that the Fund will
buy back the securities at a fixed future date at a fixed price plus an agreed
amount of "interest" which may be reflected in the repurchase price. Reverse
repurchase agreements are considered to be borrowings by the Fund. The Fund
will use proceeds obtained from the sale of securities pursuant to reverse
repurchase agreements to purchase other investments. The use of borrowed funds
to make investments is a practice known as "leverage," which is considered
speculative. Use of reverse repurchase agreements is an investment technique
that is intended to increase income. Thus, a Fund will enter into a reverse
repurchase agreement only when the Adviser determines that the interest income
to be earned from the investment of the proceeds is greater than the interest
expense of the transaction. However, there is a risk that interest expense will
nevertheless exceed the income earned. Reverse repurchase agreements involve
the risk that the market value of securities purchased by a Fund with proceeds
of the transaction may decline below the repurchase price of the securities
sold by the Fund which it is obligated to repurchase. A Fund will also continue
to be subject to the risk of a decline in the market value of the securities
sold under the agreements because it will reacquire those securities upon
effecting their repurchase. To minimize various risks associated with reverse
repurchase agreements, a Fund will establish and maintain with the Fund's
custodian a separate account consisting of highly liquid, marketable securities
in an amount at least equal to the repurchase prices of the securities (plus
any accrued interest thereon) under such agreements. In addition, a Fund will
not enter into reverse repurchase agreements and other borrowings exceeding in
the aggregate more than 33 1/3% of the market value of its total net assets. A
Fund will enter into reverse repurchase agreements only with selected
registered broker/dealers or with federally insured banks or savings and loan
associations which are approved in advance as being creditworthy by the Board
of Directors. Under procedures established by the Board of Directors, the
Adviser will monitor the creditworthiness of the firms involved.

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FORWARD COMMITMENT AND WHEN-ISSUED SECURITIES. Each Fund may purchase
securities on a when-issued or forward commitment basis. "When-issued" refers
to securities whose terms are available and for which a market exists, but
which have not been issued. A Fund will engage in when-issued transactions with
respect to securities purchased for its portfolio in order to obtain what is
considered to be an advantageous price and yield at the time of the
transaction. For when-issued transactions, no payment is made until delivery is
due, often a month or more after the purchase. In a forward commitment
transaction, a Fund contracts to purchase securities for a fixed price at a
future date beyond customary settlement time.

When a Fund engages in forward commitment and when-issued transactions,
it relies on the seller to consummate the transaction. The failure of the
issuer or seller to consummate the transaction may result in the Funds losing
the opportunity to obtain a price and yield considered to be advantageous. The
purchase of securities on a when-issued and forward commitment basis also
involves a risk of loss if the value of the security to be purchased declines
prior to the settlement date.

On the date a Fund enters into an agreement to purchase securities on a
when-issued or forward commitment basis, the Fund will segregate in a separate
account cash or liquid, high grade debt securities equal in value to the Fund's
commitment. These assets will be valued daily at market, and additional cash or
securities will be segregated in a separate account to the extent that the
total value of the assets in the account declines below the amount of the
when-issued commitments. Alternatively, a Fund may enter into offsetting
contracts for the forward sale of other securities that it owns.

SHORT SALES. Global Resources 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 or dividends 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 SEC, if the Fund
engages in short sales, 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 (a) the market value of the securities sold short at the time they were
sold short and (b) any cash or U.S. Government securities required to be

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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 (1) 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 (2) 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 be less than 30% of the Fund's gross income in order
for the Fund to qualify as a regulated investment company under the Code.

LOWER RATED HIGH YIELD DEBT OBLIGATIONS. Emerging Growth Fund,
Government Income Fund, High Yield Bond Fund and High Yield Tax-Free Fund may
invest in high yielding, fixed income securities rated below investment grade
(e.g., rated Baa or lower by Moody's or BBB or lower by S&P.

Ratings are based largely on the historical financial condition of the
issuer. Consequently, the rating assigned to any particular security is not
necessarily a reflection of the issuer's current financial condition, which may
be better or worse than the rating would indicate.

See the Appendix to this SAI which describes the characteristics of
corporate bonds in the various rating categories. The Fund may invest in
comparable quality unrated securities which, in the opinion of the Adviser,
offer comparable yields and risks to those securities which are rated.

Debt obligations rated in the lower ratings categories, or which are
unrated, involve greater volatility of price and risk of loss of principal and
income. In addition, lower ratings reflect a greater possibility of an adverse
change in financial condition affecting the ability of the issuer to make
payments of interest and principal. The high yield fixed income market is
relatively new and its growth occurred during a period of economic expansion.
The market has not yet been fully tested by an economic recession.

The market price and liquidity of lower rated fixed income securities
generally respond to short term corporate and market developments to a greater
extent than do the price and liquidity of higher rated securities because such
developments are perceived to have a more direct relationship to the ability of
an issuer of such lower rated securities to meet its ongoing debt obligations.

Reduced volume and liquidity in the high yield bond market or the
reduced availability of market quotations will make it more difficult to
dispose of the bonds and to value accurately a Fund's assets. The reduced
availability of reliable, objective data may increase a Fund's reliance on
management's judgment in valuing high yield bonds. In addition, a Fund's
investments in high yield securities may be susceptible to adverse publicity
and investor perceptions, whether or not justified by fundamental factors. A
Fund's investments, and consequently its net asset value, will be subject to
the market fluctuations and risks inherent in all securities.

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CREDIT AND INTEREST RATE RISKS. In addition to the information
contained in the Prospectuses, investors should note that while ratings by a
rating institution provide a generally useful guide to credit risks, they do
not, nor do they purport to, offer any criteria for evaluating interest rate
risk. Changes in the general level of interest rates cause fluctuations in the
prices of fixed-income securities already outstanding and will therefore result
in fluctuation in net asset value of the shares of Funds to the extent the
Funds invest in these securities. The extent of the fluctuation is determined
by a complex interaction of a number of factors. The Adviser will evaluate
those factors it considers relevant and will make portfolio changes when it
deems it appropriate in seeking to reduce the risk of depreciation in the value
of a Fund's portfolio. However, in seeking to achieve a Fund's primary
objectives, there will be times, such as during periods of rising interest
rates, when depreciation and realization of comparable losses on securities in
the portfolio will be unavoidable. Moreover, medium and lower-rated securities
and unrated securities of comparable quality tend to be subject to wider
fluctuations in yield and market values than higher rated securities. Such
fluctuations after a security is acquired do not affect the cash income
received from that security but are reflected in the net asset value of the
Fund's portfolio. Other risks of lower quality securities include:

(i) subordination to the prior claims of banks and other senior
lenders and

(ii) the operation of mandatory sinking fund or call/redemption
provisions during periods of declining interest rates whereby the
Funds may reinvest premature redemption proceeds in lower yielding
portfolio securities.

In determining which securities to purchase or hold in a Fund's
portfolio (including, in the case of High Yield Bond Fund, investments in
either unrated or rated securities which are in default) and in seeking to
reduce credit and interest rate risk consistent with a Fund's investment
objective and policies, the Adviser will rely on information from various
sources, including: the rating of the security; research, analysis and
appraisals of brokers and dealers; the views of the Fund's Directors and others
regarding economic developments and interest rate trends; and the Adviser's own
analysis of factors it deems relevant as it pertains to achieving a Fund's
investment objective(s).

PURCHASES OF WARRANTS. Emerging Growth Fund's and Global Resources
Fund's investment policies permit the purchase of rights and warrants, which
represent rights to purchase the common stock of companies at designated
prices. No such purchase will be made by a Fund, however, if the Fund's
holdings of warrants (valued at lower of cost or market) would exceed 5% of the
value of the Fund's total net assets as a result of the purchase. In addition,
no Fund will purchase a warrant or right which is not listed on the New York or
American Stock Exchanges if the purchase would result in the Fund's owning
unlisted warrants in an amount exceeding 2% of its net assets.

CONVERTIBLE SECURITIES. Emerging Growth Fund, Global Resources Fund and
High Yield Bond Fund may invest in convertible securities. Convertible
securities are securities that may be converted at either a stated price or
stated rate into underlying shares of common stock of the same issuer.
Convertible securities have general characteristics similar to both fixed
income and equity securities. Although to a lesser extent than with straight
debt securities, the market value

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of convertible securities tends to decline as interest rates increase, and,
conversely, tends to increase as interest rates decline. In addition, because
of the conversion feature, the market value of convertible securities tends to
vary with fluctuations in the market value of the underlying common stocks and
therefore will also react to variations in the general market for equity
securities. A unique feature of convertible securities is that as the market
price of the underlying common stock declines, convertible securities tend to
trade increasingly on a yield basis, and consequently may not experience market
value declines to the same extent as the underlying common stock. When the
market price of the underlying common stock increases, the prices of the
convertible securities tend to rise as a reflection of the value of the
underlying common stock. While no securities investments are without risk,
investments in convertible securities generally entail less risk than
investments in common stock of the same issuer. However, the issuers of
convertible securities may default on their obligations.

MORTGAGE "DOLLAR ROLL" TRANSACTIONS. Government Income Fund and High
Yield Bond Fund may enter into mortgage "dollar roll" transactions with
selected banks and broker-dealers pursuant to which a Fund sells
Mortgage-Backed Securities for delivery in the future (generally within 30
days) and simultaneously contracts to repurchase substantially similar (same
type, coupon and maturity) securities on a specified future date. These Funds
will only enter into covered rolls. A "covered roll" is a specific type of
dollar roll for which there is an offsetting cash position or a cash equivalent
security position which matures on or before the forward settlement date of the
dollar roll transaction. Covered rolls are not treated as a borrowing or other
senior securities. Dollar rolls in which the Funds may invest will be limited
to covered rolls.

For financial reporting and tax purposes, the Funds propose to treat
mortgage dollar rolls as two separate transactions; one involving the purchase
of a security and a separate transaction involving a sale. The Funds do not
currently intend to enter into mortgage dollar rolls that are accounted for as
a financing. Mortgage dollar rolls involve certain risks including the
following: if the broker-dealer to whom a Fund sells the security becomes
insolvent, the Fund's right to purchase or repurchase the Mortgage-Backed
Securities subject to the mortgage dollar roll may be restricted and the
instrument which the Fund is required to repurchase may be worth less than an
instrument which the Fund originally held. Successful use of mortgage dollar
rolls will depend upon the Adviser's ability to predict correctly interest
rates and mortgage prepayments. For these reasons, there is no assurance that
mortgage dollar rolls can be successfully employed.

FINANCIAL FUTURES CONTRACTS. To the extent set forth in their
Prospectuses, the Funds (other than Money Market Fund) may buy and sell futures
contracts (and related options) on stocks, stock indices, debt securities,
currencies, interest rate indices, and other instruments. Each Fund may hedge
its portfolio by selling or purchasing financial futures contracts as an offset
against the effects of changes in interest rates or in security or foreign
currency values. Although other techniques could be used to reduce exposure to
interest rate fluctuations, a Fund may be able to hedge its exposure more
effectively and perhaps at a lower cost by using financial futures contracts.
The Funds may enter into financial futures contracts for hedging and other
non-speculative purposes to the extent permitted by regulations of the
Commodity Futures Trading Commission ("CFTC").

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Financial futures contracts have been designed by boards of trade which
have been designated "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. Currently,
financial futures contracts are based on interest rate instruments such as
long-term U.S. Treasury bonds, U.S. Treasury notes, Government National
Mortgage Association ("GNMA") modified pass-through mortgage-backed securities,
three-month U.S. Treasury bills, 90-day commercial paper, bank certificates of
deposit and Eurodollar certificates of deposit. It is expected that if other
financial futures contracts are developed and traded the Funds may engage in
transactions in such contracts.

Although some financial futures contracts by their terms call for
actual delivery or acceptance of financial instruments, in most cases the
contracts are closed out prior to delivery by offsetting purchases or sales of
matching financial futures contracts (same exchange, underlying security and
delivery month). Other financial futures contracts, such as futures contracts
on securities indices, by their terms call for cash settlements. If the
offsetting purchase price is less than a Fund's original sale price, the Fund
realizes a gain, or if it is more, the Fund realizes a loss. Conversely, if the
offsetting sale price is more than a 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. Each Fund will pay a
commission in connection with each purchase or sale of financial futures
contracts, including a closing transaction. For a discussion of the Federal
income tax considerations of trading in financial futures contracts, see the
information under the caption "Tax Status" below.

At the time a 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," ranging upward from 1.1% of
the value of the financial futures contract being traded. The margin required
for a financial 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 financial futures contract which is returned to the Fund
upon termination of the contract, assuming all contractual obligations have
been satisfied. The Funds expect to earn interest income on their 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 financial futures contract
fluctuates. This process is known as "mark to market." Variation margin does
not represent a borrowing or lending by the Funds but is instead settlement
between the Funds and the broker of the amount one would owe the other if the
financial futures contract expired. In computing net asset value, the Funds
will mark to market their respective open financial futures positions.

Successful hedging depends on a strong correlation between the market
for the underlying securities and the futures contract market for those
securities. There are several factors that will probably prevent this
correlation from being a perfect one, and even a correct forecast of general
interest rate trends may not result in a successful hedging transaction. There
are significant differences between the securities and futures markets which
could create an imperfect correlation between the markets and which could
affect the success of a given hedge. The degree of

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imperfection of correlation depends on circumstances such as: variations in
speculative market demand for financial futures and debt securities,
including technical influences in futures trading and differences between the
financial instruments being hedged and the instruments underlying the standard
financial futures contracts available for trading in such respects as interest
rate levels, maturities and creditworthiness of issuers. The degree of
imperfection may be increased where the underlying debt securities 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 trends. The
Funds will bear the risk that the price of the securities being hedged will not
move in complete correlation with the price of the futures contracts used as a
hedging instrument. Although the Adviser believes that the use of financial
futures contracts will benefit the Funds, an incorrect prediction could result
in a loss on both the hedged securities in the respective 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. The low margin deposits required for futures transactions
permit an extremely high degree of leverage. A relatively small movement in 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 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 Funds engage in financial 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 Funds 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 a 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. To the extent set forth in
their Prospectuses, the Funds (other than Money Market Fund) may buy and sell
options on financial futures contracts on stocks, stock indices, debt
securities, currencies, interest rate indices, and other

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instruments. 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 Funds would be required to deposit with their
custodian initial and variation margin with respect to put and call options on
futures contracts written by them. Options on futures contracts involve risks
similar to the risks relating to transactions in financial futures contracts.
Also, an option purchased by a Fund may expire worthless, in which case a Fund
would lose the premium it paid for the option.

OTHER CONSIDERATIONS. The Funds will engage in futures and options
transactions for bona fide hedging or other non-speculative purposes to the
extent permitted by CFTC regulations. A 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 Funds'
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 Funds own, or futures contracts will be purchased to
protect the Funds against an increase in the price of securities, or the
currency in which they are denominated, the Fund intends to purchase. As
evidence of this hedging intent, the Funds expect that on 75% or more of the
occasions on which they take a long futures or option position (involving the
purchase of futures contracts), the Funds 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 contract 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 Funds to elect to comply with a
different test, under which the aggregate initial margin and premiums required
to establish nonhedging positions in futures contracts and options on futures
will not exceed 5% of the net asset value of the respective 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 Funds will engage in transactions in futures contracts only to
the extent such transactions are consistent with the requirements of the Code
for maintaining their qualifications as regulated investment companies for
Federal income tax purposes.

When the Funds purchase financial futures contracts, or write put
options or purchase call options thereon, cash or liquid, high grade debt
securities will be deposited in a segregated account with the Funds' custodian
in an amount that, together with the amount of initial and variation margin
held in the account of its broker, equals the market value of the futures
contracts.

OPTIONS TRANSACTIONS. To the extent set forth in their Prospectuses,
the Funds (other than Money Market Fund) may write listed and over-the-counter
covered call options and covered put options on securities in order to earn
additional income from the premiums received. In addition, the Funds may
purchase listed and over-the-counter call and put options. The extent

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to which covered options will be used by the Funds will depend upon market
conditions and the availability of alternative strategies.

A 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 underlying the options without additional cash
consideration upon conversion or exchange of other securities held in its
portfolio. A call option written by a Fund may also be "covered" if the Fund
holds on a share-for-share basis a covering call on the same securities where
(i) the exercise price of the covering call held is equal to or less than the
exercise price of the call written if the difference is maintained by the Fund
in cash, U.S. Treasury bills or high grade liquid debt obligations in a
segregated account with the Fund's custodian, and (ii) the covering call
expires at the same time as the call written. If a covered call option is not
exercised, a Fund would keep both the option premium and the underlying
security. If the covered call option written by a Fund is exercised and the
exercise price, less the transaction costs, exceeds the cost of the underlying
security, the Fund would realize a gain in addition to the amount of the option
premium it received. If the exercise price, less transaction costs, is less
than the cost of the underlying security, a Fund's loss would be reduced by the
amount of the option premium.

As the writer of a covered put option, each Fund will write a put
option only with respect to securities it intends to acquire for its portfolio
and will maintain in a segregated account with its custodian bank cash, U.S.
Government securities or high-grade liquid debt securities with a value equal
to the price at which the underlying security may be sold to the Fund in the
event the put option is exercised by the purchaser. The Funds may also write a
"covered" put option by purchasing on a share-for-share basis a put on the same
security 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.

When writing listed and over-the-counter covered put options on
securities, the Funds would earn income from the premiums received. If a
covered put option is not exercised, the Funds 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, a Fund would realize a loss, but the amount of the
loss would be reduced by the amount of the option premium.

If the writer of an exchange-traded option wishes to terminate its
obligation prior to its exercise, it 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 a Fund's
position will be offset by the Options Clearing Corporation. The Funds may not
effect a closing purchase transaction after they have been notified of the
exercise of an option. There is no guarantee that a closing purchase
transaction can be effected. Although the Funds 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.

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In the case of a written call option, effecting a closing transaction
will permit a Fund to write another call option on the underlying security with
either a different exercise price, expiration date or both. In the case of a
written put option, it will permit a Fund to write another put option to the
extent that the exercise price thereof is secured by deposited cash or
short-term securities. Also, effecting a closing transaction will permit the
cash or proceeds from the concurrent sale of any securities subject to the
option to be used for other investments. If a 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 concurrent with the sale of the
security.

A 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 Funds 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, any
loss resulting from the repurchase of a call option is likely to be offset in
whole or in part by appreciation of the underlying security owned by the Fund.

OVER-THE-COUNTER OPTIONS. Funds that may engage in options transactions
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. A 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 Funds 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 has taken the position that OTC options are illiquid
securities subject to each Fund's restriction that illiquid securities are
limited to not more than 10% of the Fund's net assets. The SEC, however, has a
partial exemption from the above restrictions on transactions in OTC options.
The SEC allows a Fund to exclude from the 10% limitation on illiquid securities
a portion of the value of the OTC options written by the Fund, provided that
certain conditions are met. First, the other party to the OTC options has to 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,
a Fund may 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.

INVESTMENT RESTRICTIONS

FUNDAMENTAL INVESTMENT RESTRICTIONS

Each Fund has adopted certain fundamental investment restrictions upon
its investments as set forth below which cannot be changed as to any Fund
without the approval of the holders of a

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<PAGE> 236

majority of that Fund's outstanding shares. A majority for this purpose means:
(a) more than 50% of the outstanding shares of a Fund, or (b) 67% or more of
the shares represented at a meeting where more than 50% of the outstanding
shares of a Fund are represented, whichever is less. If a percentage
restriction or rating restriction on investment or utilization of assets is
adhered to at the time an investment is made or assets are so utilized, a later
change in percentage resulting from changes in the value of a Fund's portfolio
securities or a later change in the rating of a portfolio security will not be
considered a violation of policy.

For the purpose of these restrictions, High Yield Bond Fund, Government
Income Fund and Money Market Fund are referred to as the "Fixed Income Funds"
and Emerging Growth Fund and Global Resources Fund are referred to as the
"Equity Funds." The restrictions applicable to High Yield Tax-Free Fund are
set out subsequently.

Each Fixed Income Fund and each Equity Fund may not:

(1) Borrow money in an amount in excess of 33-1/3% of its total
assets, and then only as a temporary measure for extraordinary or emergency
purposes (except that it may enter into a reverse repurchase agreement within
the limits described in the Prospectus or this SAI), or pledge, mortgage or
hypothecate an amount of its assets (taken at market value) in excess of 15% of
its total assets, in each case taken at the lower of cost or market value. For
the purpose of this restriction, collateral arrangements with respect to
options, futures contracts, options on futures contracts and collateral
arrangements with respect to initial and variation margins are not considered a
pledge of assets.

(2) Underwrite securities issued by other persons except insofar as
such Fund may technically be deemed an underwriter under the Securities Act of
1933 in selling a portfolio security.

(3) Purchase or retain real estate (including limited partnership
interests but excluding securities of companies, such as real estate investment
trusts, which deal in real estate or interests therein and securities secured
by real estate), or mineral leases, commodities or commodity contracts except,
in the case of Resources Fund, precious metals (except contracts for the future
delivery of fixed income securities, stock index and currency futures and
options on such futures) in the ordinary course of its business. Each Fund
reserves the freedom of action to hold and to sell real estate or mineral
leases, commodities or commodity contracts acquired as a result of the
ownership of securities.

(4) Invest in direct participation interests in oil, gas or other
mineral exploration or development programs.

(5) Make loans to other persons except by the purchase of obligations
in which such Fund is authorized to invest and by entering into repurchase
agreements; provided that a Fund may lend its portfolio securities not in
excess of 30% of its total assets (taken at market value). Not more than 10%
of a Fund's total assets (taken at market value) will be subject to repurchase
agreements maturing in more than seven days. For these purposes the purchase of
all or a portion of an issue of debt securities shall not be considered the
making of a loan. In addition, the Equity

-27-
<PAGE> 237

Funds may purchase a portion of an issue of debt securities of types commonly
distributed privately to financial institutions.

(6) Purchase the securities of any issuer if such purchase, at the
time thereof, would cause more than 5% of its total assets (taken at market
value) to be invested in the securities of such issuer, other than securities
issued or guaranteed by the United States or, in the case of the Fixed Income
Funds, any state or political subdivision thereof, or any political subdivision
of any such state, or any agency or instrumentality of the United States, any
state or political subdivision thereof, or any political subdivision of any
such state. In applying these limitations, a guarantee of a security will not
be considered a security of the guarantor, provided that the value of all
securities issued or guaranteed by that guarantor, and owned by the Fund, does
not exceed 10% of the Fund's total assets. In determining the issuer of a
security, each state and each political subdivision agency, and instrumentality
of each state and each multi-state agency of which such state is a member is a
separate issuer. Where securities are backed only by assets and revenues of a
particular instrumentality, facility or subdivision, such entity is considered
the issuer.

(7) Invest in companies for the purpose of exercising control or
management.

(8) Purchase or retain in its portfolio any securities issued by an
issuer any of whose officers, directors, trustees or security holders is an
officer or Director of such Fund, or is a member, partner, officer or Director
of the Adviser, if after the purchase of the securities of such issuer by such
Fund one or more of such persons owns beneficially more than 1/2 of 1% of the
shares or securities, or both, all taken at market value, of such issuer, and
such persons owning more than 1/2 of 1% of such shares or securities together
own beneficially more than 5% of such shares or securities, or both, all taken
at market value.

(9) Purchase any securities or evidences of interest therein on
margin, except that each Fund may obtain such short-term credit as may be
necessary for the clearance of purchases and sales of securities and each Fund
(other than the Money Market Fund) may make deposits on margin in connection
with Futures Contracts and related options.

(10) Sell any security which such Fund does not own unless by virtue of
its ownership of other securities it has at the time of sale a right to obtain
securities without payment of further consideration equivalent in kind and
amount to the securities sold and provided that if such right is conditional
the sale is made upon equivalent conditions.

(11) Purchase securities issued by any other investment company or
investment trust except by purchase in the open market where no commission or
profit to a sponsor or dealer results from such purchase other than the
customary broker's commission, or except when such purchase, though not made in
the open market, is part of a plan of merger or consolidation; provided,
however, that a Fund will not purchase such securities if such purchase at the
time thereof would cause more than 10% of its total assets (taken at market
value) to be invested in the securities of such issuers; and, provided,
further, that a Fund will not purchase securities issued by an open-end
investment company.

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<PAGE> 238

(12) Knowingly invest in securities which are subject to legal or
contractual restrictions on resale or for which there is no readily available
market (e.g., trading in the security is suspended or market makers do not
exist or will not entertain bids or offers), except for repurchase agreements,
if, as a result thereof more than 10% of such Fund's total assets (taken at
market value) would be so invested. (The Staff of the Securities and Exchange
Commission has taken the position that a money market fund may not invest more
than 10% of its net assets in illiquid securities. The Money Market Fund has
undertaken with the Staff to require, that as a matter of operating policy, it
will not invest in illiquid securities in an amount exceeding 10% of its net
assets.)

(13) Issue any senior security (as that term is defined in the
Investment Company Act of 1940 (the "1940 Act")) if such issuance is
specifically prohibited by the 1940 Act or the rules and regulations
promulgated thereunder. For the purpose of this restriction, collateral
arrangements with respect to options, Futures Contracts and Options on futures
contracts and collateral arrangements with respect to initial and variation
margins are not deemed to be the issuance of a senior security.

In addition, no Fixed Income Fund (except for Money Market Fund and
High Yield Bond Fund) may invest more than 25% of its total assets (taken at
market value) in the securities of issuers engaged in any one industry. Money
Market Fund may not invest more than 25% of its total assets in obligations
issued by (i) foreign banks or (ii) foreign branches of U.S. banks where the
Adviser has determined that the U.S. bank is not unconditionally responsible
for the payment obligations of the foreign branch. High Yield Bond Fund may not
invest more than 25% of its total assets (taken at market value) in the
securities of issuers engaged in any one industry, except that High Yield Bond
Fund may invest up to 40% of the value of its total assets in the securities of
issuers engaged in the electric utility and telephone industries. Obligations
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities are not subject to the Fixed Income Fund's limitations on
industry concentration. Determinations of industries for purposes of the
foregoing limitations are made in accordance with specific industry codes set
forth in the Standard Industrial Classification Manual and without considering
groups of industries (e.g., all utilities or all finance companies) to be an
industry. Also, a Fixed Income Fund may not purchase securities of any issuer
(other than securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities) if such purchase, at the time thereof, would
cause a Fund to hold more than 10% of any class of securities of such issuer.
For this purpose, all indebtedness of an issuer (for the Money Market Fund, all
indebtedness of an issuer maturing in less than one year) shall be deemed a
single class and all preferred stock of an issuer shall be deemed a single
class.

In addition, an Equity Fund may not:

(1) Concentrate its investments in any particular industry, but if it
is deemed appropriate for the attainment of its investment objective, such Fund
may invest up to 25% of its assets (taken at market value at the time of each
investment) in securities of issuers in any one industry.

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<PAGE> 239

(2) Purchase voting securities of any issuer if such purchase, at the
time thereof, would cause more than 10% of the outstanding voting securities of
such issuer to be held by such Fund; or purchase securities of any issuer if
such purchase at the time thereof would cause more than 10% of any class of
securities of such issuer to be held by such Fund. For this purpose all
indebtedness of an issuer shall be deemed a single class and all preferred
stock of an issuer shall be deemed a single class. In applying these
limitations, a guarantee of a security will not be considered a security of the
guarantor, provided that the value of all securities issued or guaranteed by
that guarantor, and owned by the Fund, does not exceed 10% of the Fund's total
assets. In determining the issuer of a security, each state and each political
subdivision agency, and instrumentality of each state and each multi-state
agency of which such state is a member is a separate issuer. Where securities
are backed only by assets and revenues of a particular instrumentality,
facility or subdivision, such entity is considered the issuer.

High Yield Tax-Free Fund may not:

(1) Borrow money except from banks for temporary or emergency (not
leveraging) purposes, including the meeting of redemption requests that might
otherwise require the untimely disposition of securities, in an amount up to
15% of the value of the Fund's total assets (including the amount borrowed)
valued at market less liabilities (not including the amount borrowed) at the
time the borrowing was made. While borrowings exceed 5% of the value of the
Fund's total assets, the Fund will not purchase any additional securities.
Interest paid on borrowings will reduce the Fund's net investment income. The
borrowing restriction set forth above does not prohibit the use of reverse
repurchase agreements, in an amount (including any borrowings) not to exceed
33-1/3% of net assets.

(2) Pledge, hypothecate, mortgage or otherwise encumber its assets,
except in an amount up to 10% of the value of its total assets but only to
secure borrowings for temporary or emergency purposes as may be necessary in
connection with maintaining collateral in connection with writing put or call
options or making initial margin deposits in connection with the purchase or
sale of financial futures or index futures contracts and related options.

(3) Purchase securities (except obligations issued or guaranteed by
the U.S. Government, its agencies or instrumentalities) if the purchase would
cause the Fund at the time to have more than 5% of the value of its total
assets invested in the securities of any one issuer or to own more than 10% of
the outstanding debt securities of any one issuer; provided, however, that up
to 25% of the value of the Fund's asset may be invested without regard to these
restrictions.

(4) Purchase or retain the securities of any issuer, if to the
knowledge of the Fund, any officer or director of the Fund or its Adviser owns
more than 1/2 of 1% of the outstanding securities of such issuer, and all such
officers and directors own in the aggregate more than 5% of the outstanding
securities of such issuer.

(5) Write, purchase or sell puts, calls or combinations thereof,
except put and call options on debt securities, futures contracts based on debt
securities, indices of debt securities and futures contracts based on indices
of debt securities, sell securities on margin or make short sales

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<PAGE> 240

of securities or maintain a short position, unless at all times when a short
position is open it 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, and unless not more than 10% of the Fund's net assets (taken at
current value) is held as collateral for such sales at any one time.

(6) Underwrite the securities of other issuers, except insofar as the
Fund may be deemed an underwriter under the Securities Act of 1933 in disposing
of a portfolio security.

(7) Purchase the securities of any issuer if as a result more than 10%
of the value of the Fund's total assets would be invested in securities that
are subject to legal or contractual restrictions on resale ("restricted
securities") and in securities for which there are no readily available market
quotations; or enter into a repurchase agreement maturing in more than seven
days, if as a result such repurchase agreement together with restricted
securities and securities for which there are no readily available market
quotations would constitute more than 10% of the Fund's total assets.

(8) Purchase or sell real estate, real estate investment trust
securities, commodities or commodity contracts, except commodities and
commodities contracts which are necessary to enable the Fund to engage in
permitted futures and options transactions necessary to implement hedging
strategies, or oil and gas interests, but this shall not prevent the Fund from
investing in municipal obligations secured by real estate or interests in real
estate.

(9) Make loans to others, except insofar as the Fund may enter in
repurchase agreements as set forth in the Prospectus or this SAI. The purchase
of an issue of publicly distributed bonds or other securities, whether or not
the purchase was made upon the original issuance of securities, is not to be
considered the making of a loan.

(10) Invest more than 25% of its assets in the securities of the
"issuers" in any single industry; provided that there shall be no limitation on
the purchase of municipal obligations and obligations issued or guaranteed by
the United States Government, its agencies or instrumentalities. For purposes
of this limitation and that set forth in investment restriction (3) above, when
the assets and revenues of an agency, authority, instrumentality or other
political subdivision are separate from those of the government creating the
issuing entity and a security is backed only by the assets and revenues of the
entity, the entity would be deemed to be the sole issuer of the security.
Similarly, in the case of an industrial development or pollution control bond,
if that bond is backed only by the assets and revenues of the nongovernmental
user, then such non governmental user would be deemed to be the sole issuer.
If, however, in either case, the creating government or some other entity
guarantees a security, such a guarantee would be considered a separate security
and would be treated as an issue of such government or other entity.

(11) Invest in securities of other investment companies, except as they
may be acquired as part of a merger, consolidation or acquisition of assets,
and except for the purchase, to the extent permitted by Section 12 of the 1940
Act, of shares of registered unit investment trusts whose assets consist
substantially of municipal obligations.

-31-
<PAGE> 241

(12) Invest more than 5% of the value of its total assets in the
securities of issuers having a record, including predecessors, of fewer than
three years of continuous operation, except obligations issued or guaranteed by
the United States Government, its agencies or instrumentalities, unless the
securities are rated by a nationally recognized rating service.

(13) Invest for the purpose of exercising control or management of
another company.

(14) Issue any senior security (as that term is defined in the 1940
Act) if such issuance is specifically prohibited by the 1940 Act or the rules
and regulations promulgated thereunder. For the purpose of this restriction,
collateral arrangements with respect to options, futures contracts and options
on futures contracts and collateral arrangements with respect to initial and
variation margins are not deemed to be the issuance of a senior security.

OTHER OPERATING POLICIES

Each of the Equity Funds (whose investment restrictions permit holdings
in warrants not to exceed 10% of its assets) may, due to an undertaking with a
state in which the Fund's shares are currently qualified for sale, purchase
warrants not to exceed 5% of such Fund's net assets. Included within that
amount, but not exceeding 2% of a Fund's net assets, may be warrants for which
there is no public market. Any such warrants which are attached to securities
at the time such securities are acquired by a Fund will be deemed to be without
value for the purpose of this restriction.

Each Fund (other than High Yield Tax-Free Fund) will not invest more
than 5% of its total assets in companies which, including their respective
predecessors, have a record of less than three years' continuous operation.

In order to comply with certain state regulatory policies, no Fund
will, as a matter of operating policy, pledge, mortgage or hypothecate its
portfolio securities if the percentage of securities so pledged, mortgaged or
hypothecated would exceed 15%.

In order to comply with certain state regulatory policies, the cost of
investments in options, financial futures, stock index futures and currency
futures, other than those acquired for hedging purposes, may not exceed 10% of
a Fund's total net assets.

These operating policies are not fundamental and may be changed without
shareholder approval. In order to comply with certain state regulatory
practices, certain policies, if changed, would require advance written notice
to shareholders.

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<PAGE> 242

(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.

THOSE RESPONSIBLE FOR MANAGEMENT

The business of the Corporation is managed by its Directors who elect
officers who are responsible for the day-to-day operations of the Corporation
and the Funds and who execute policies formulated by the Directors. Several of
the officers and Directors of the Corporation are also officers and directors
of the Adviser or officers and directors of John Hancock Funds.

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<PAGE> 243
<TABLE>

Set forth below is the principal occupation or employment of the
Directors and principal officers of the Corporation during the past five years:

<CAPTION>
POSITION HELD
WITH THE PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS CORPORATION DURING PAST FIVE YEARS
- ---------------- ----------- -----------------------

<S> <C> <C>
Edward J. Boudreau, Jr.* Director, Chairman and Chief Executive
101 Huntington Avenue Chairman and Officer, the Adviser and The
Boston, MA 02199 Chief Executive Berkeley Financial Group ("The
Officer(1)(2) Berkeley Group"); Chairman, NM
Capital Management, Inc. ("NM
Capital"); John Hancock Advisers
International Limited ("Advisers
International"); John Hancock Funds,
Inc.; John Hancock Investor Services
Corporation ("Investor Services");
and Sovereign Asset Management
Corporation ("SAMCorp");
(hereinafter the Adviser, the Berkeley
Group, NM Capital, Advisers
International, John Hancock Funds,
Inc., Investor Services and SAMCorp
are collectively referred to as the
"Affiliated Companies"); Chairman,
First Signature Bank & Trust;
Director, John Hancock Freedom
Securities Corporation, John
Hancock Capital Corporation, New
England/ Canada Business Council;
Member, Investment Company
Institute Board of Governors;
Trustee, Museum of Science;
President, the Adviser (until July
1992); and Chairman, John Hancock
Distributors, Inc. (until April, 1994).
<FN>

</TABLE>

-34-
<PAGE> 244

<TABLE>
<CAPTION>
POSITION HELD
WITH THE PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS CORPORATION DURING PAST FIVE YEARS
- ---------------- ----------- -----------------------

James F. Carlin Director(3) Chairman and CEO, Carlin
233 West Central Street Consolidated, Inc. (insurance);
Natick, MA 01760 Chairman, Massachusetts Higher
Education Coordinating Council
(since 1995); Trustee, Massachusetts
Health and Education Tax-Exempt
Trust (Financial); Director, Rizzo
Associates, Inc. (Engineering),
Arbella Mutual Insurance Company
(insurance), Consolidated Group Trust
(group health plan), Carlin Insurance
Agency, Inc., West Insurance Agency,
Inc., Allied American Agency, Inc.
(insurance); Treasurer, Alpha
Analytical, Inc. (Chemistry Lab);
Receiver, the City of Chelsea (until
August 1992).

William H. Cunningham Director(3) Chancellor, University of Texas
601 Colorado Street System and former President of the
O'Henry Hall University of Texas, Austin, Texas;
Austin, TX 78701 Regents Chair for Free Enterprise;
Director, LaQuinta Motor Inns, Inc.
(hotel management company);
Director, Jefferson-Pilot Corporation
(diversified life insurance company);
Director, Freeport-McMoran Inc. (oil
and gas company); LBJ Foundation
Board (education foundation); and
Advisory Director, Texas Commerce
Bank - Austin.

Harold R. Hiser, Jr. Director(3) Executive Vice President, Schering-
Schering-Plough Corporation Plough Corporation (pharmaceuticals)
One Giralda Farms (until 1995); Director, ReCapital
Madison, NJ 07940-1000 Corporation (reinsurance).
<FN>

</TABLE>

-35-
<PAGE> 245

<TABLE>
<CAPTION>
POSITION HELD
WITH THE PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS CORPORATION DURING PAST FIVE YEARS
- ---------------- ----------- -----------------------

<S> <C> <C>
Charles L. Ladner Director(3) Director, Energy North, Inc. (public
UGI Corporation utility holding company)(until
460 North Gulph Road 1992); Senior Vice President,
King of Prussia, PA 19406 Senior Vice President, Finance
UGI Corp. (public utility
holding company).

Leo E. Linbeck, Jr. Director(3) Chairman, President, Chief
3810 W. Alabama Executive Officer and Director,
Houston, TX 77027 Linbeck Corporation (a holding
company engaged in various phases
of the construction industry and
warehousing interests); Director and
Chairman, Federal Reserve Bank of
Dallas; Chairman of the Board and
Chief Executive Officer, Linbeck
Construction Corporation; Director,
Panhandle Eastern Corporation (a
diversified energy company), Daniel
Industries, Inc. (manufacturer of gas
measuring products and energy
related equipment), GeoQuest
International, Inc. (a geophysical
consulting firm); and Director,
Greater Houston Partnership.

Patricia P. McCarter Director(3) Director and Secretary, the
Swedesford Road McCarter Corp. (machine
RD #3, Box 121 manufacture).
Malvern, PA 19355

Steven R. Pruchansky Director(1)(3) Director and President, Mast
360 Horse Creek Drive, #208 Holdings, Inc.; Director, First
Naples, FL 33942 Signature Bank & Trust Company
(until August 1991); General Partner,
Mast Realty Trust (until 1994);
President, Maxwell Building Corp.
(until 1991).
<FN>

</TABLE>

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<PAGE> 246

<TABLE>
<CAPTION>
POSITION HELD
WITH THE PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS CORPORATION DURING PAST FIVE YEARS
- ---------------- ----------- -----------------------

<S> <C> <C>
Norman H. Smith Director(3) Lieutenant General, USMC, Deputy
Rt. 1, Box 249 E Chief of Staff for Manpower and
Linden, VA 22642 Reserve Affairs, Headquarters Marine
Corps; Commanding General III
Marine Expeditionary Force/3rd
Marine Division (retired 1991).

John P. Toolan Director(3) Director, The Smith Barney Muni
13 Chadwell Place Bond Funds, The Smith Barney Tax-
Morristown, NJ 07960 Free Money Fund, Inc., Vantage
Money Market Funds (mutual funds),
The Inefficient-Market Fund, Inc.
(closed-end investment company) and
Smith Barney Trust Company of
Florida; Chairman, Smith Barney
Trust Company (retired December,
1991); Director, Smith Barney, Inc.,
Mutual Management Company and
Smith, Barney Advisers, Inc.
(investment advisers) (retired 1991);
and Senior Executive Vice President,
Director and member of the Executive
Committee, Smith Barney, Harris
Upham & Co., Incorporated
(investment bankers) (until 1991).

Robert G. Freedman* Vice Chairman and Vice Chairman and Chief
101 Huntington Avenue Chief Investment Investment Officer, the Adviser;
Boston, MA 02199 Officer(2) President, the Adviser (until
December 1994).

Anne C. Hodsdon* President(2) President and Chief Operating
101 Huntington Avenue Officer, the Adviser; Executive Vice
Boston, MA 02199 President, the Adviser (until
December 1994); Senior Vice
President, the Adviser (until
December 1993; Vice President, the
Adviser (until 1991).
<FN>

</TABLE>

-37-
<PAGE> 247

<TABLE>
<CAPTION>
POSITION HELD
WITH THE PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS CORPORATION DURING PAST FIVE YEARS
- ---------------- ----------- -----------------------

<S> <C> <C>
James B. Little* Senior Vice President Senior Vice President, the Adviser
101 Huntington Avenue and Chief Financial
Boston, MA 02199 Officer

Thomas H. Drohan* Senior Vice President Senior Vice President and Secretary,
101 Huntington Avenue and Secretary the Adviser.
Boston, MA 02199

James J. Stokowski* Vice President and Vice President, the Adviser.
101 Huntington Avenue Treasurer
Boston, MA 02199

Susan S. Newton* Vice President and Vice President and Assistant
101 Huntington Avenue Compliance Officer Secretary, the Adviser.
Boston, MA 02199

John A. Morin* Vice President Vice President, the Adviser.
101 Huntington Avenue
Boston, MA 02199
<FN>

- ----------------------------
* An "interested person" of the Portfolio, as such term is defined in the 1940 Act.
(1) Member of the Executive Committee. Under the Trust's Declaration of Trust,
the Executive Committee may generally exercise most of the powers of the
Board of Directors.
(2) A Member of the Investment Committee of the Adviser.
(3) All of the officers listed are officers or employees of the Adviser or
affiliated companies. Some of the Directors 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.

</TABLE>

-38-
<PAGE> 248

<TABLE>
As of February 2, 1996 there were 423,110,226 shares of the
Corporation outstanding and officers and Directors as a group beneficially
owned less than 1% of the outstanding shares of the Corporation and of each of
the Funds. On such date, the following shareholders were the only record
holders and beneficial owners of 5% or more of the shares of the respective
Funds:

NUMBER OF SHARES HELD (EXPRESSED AS PERCENTAGE
OF FUND'S OUTSTANDING SHARES)
<CAPTION>
<S> <C>
Emerging Growth Fund:

Class A

758,924 Shares National Westminster Bank PLC as Trustee of
15.05 % American Smaller Companies Trust
Juno Court
24 Prescott Street
London, England E18BB

713,078 Shares Merrill Lynch Pierce Fenner & Smith
14.14 % 4800 Deerlake Drive East
Jacksonville, Florida 32246-6484

Class B

3,016,085 Shares Merrill Lynch Pierce Fenner & Smith
25.63 % 4800 Deerlake Drive East
Jacksonville, Florida 32246-6484

Global Resources Fund:

Class B

113,006 Shares Merrill Lynch Pierce Fenner & Smith
6.28 % 4800 Deerlake Drive East
Jacksonville, Florida 32246-6484

Government Income
Fund:

Class B

2,998,359 Shares Merrill Lynch Pierce Fenner & Smith
12.69 % 4800 Deerlake Drive East
Jacksonville, Florida 32246-6484

</TABLE>

-39-
<PAGE> 249

<TABLE>
<S> <C>
High Yield Bond Fund:

Class A

700,333 Shares Novell Incorporated
16.88% 1555 North Technology Way
Orem, Utah 84057

234,994 Shares National City Bank TTEE
5.66% FBO Building Laborers Local
310 Pension Plan
P.O. Box 94777
Cleveland, Ohio

Class B

2,342,503 Shares Merrill Lynch Pierce Fenner & Smith
9.05 % 4800 Deerlake Drive East
Jacksonville, Florida 32246-6484

High Yield Tax-Free
Fund:

Class B

2,959,178 Shares Merrill Lynch Pierce Fenner & Smith
17.99 % 4800 Deerlake Drive East
Jacksonville, Florida 32246-6484

</TABLE>

At such date, no other person(s), owned of record or was known by the
Corporation to beneficially own as much as 5% of the outstanding shares of the
Corporation or of any of the Funds.

As of December 22, 1994, the Directors have established an Advisory
Board which acts to facilitate a smooth transition of management over a
two-year period (between Transamerica Fund Management Company ("TFMC"), the
prior investment adviser, and the Adviser). The members of the Advisory Board
are distinct from the Board of Directors, do not serve the Funds in any other
capacity and are persons who have no power to determine what securities are
purchased or sold and behalf of the Funds. Each member of the Advisory Board
may be contacted at 101 Huntington Avenue, Boston, Massachusetts 02199.

Members of the Advisory Board and their respective principal
occupations during the past five years are as follows:

R. Trent Campbell, President, FMS, Inc. (financial and management services);
former Chairman of the Board, Mosher Steel Company.

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<PAGE> 250

Mrs. Lloyd Bentsen, Formerly National Democratic Committeewoman from Texas;
co-founder, Houston Parents' League; former board member of various
civic and cultural organizations in Houston, including the Houston
Symphony, Museum of Fine Arts and YWCA. Mrs. Bentsen is presently
active in various civic and cultural activities in the Washington, D.C.
area, including membership on the Area Board for The March of Dimes and
is a National Trustee for the Botanic Gardens of Washington, D. C.

Thomas R. Powers, Formerly Chairman of the Board, President and Chief Executive
Officer, TFMC; Director, West Central Advisory Board, Texas Commerce
Bank; Trustee, Memorial Hospital System; Chairman of the Board of
Regents of Baylor University; Member, Board of Governors, National
Association of Securities Dealers, Inc.; Formerly, Chairman, Investment
Company Institute; formerly, President, Houston Chapter of Financial
Executive Institute.

Thomas B. McDade, Chairman and Director, TransTexas Gas Company; Director,
Houston Industries and Houston Lighting and Power Company; Director,
TransAmerican Companies (natural gas producer and transportation);
Member, Board of Managers, Harris County Hospital District; Advisory
Director, Commercial State Bank, El Campo; Advisory Director, First
National Bank of Bryan; Advisory Director, Sterling Bancshares; Former
Director and Vice Chairman, Texas Commerce Bancshares; and Vice
Chairman, Texas Commerce Bank.

COMPENSATION OF THE BOARD OF DIRECTORS AND ADVISORY BOARD. The
following tables provide information regarding the compensation paid by the
Fund and the other investment companies in the John Hancock Fund Complex to the
Independent Directors and the Advisory Board members for their services. Mr.
Boudreau, a non-Independent Director, and each of the officers of the Funds are
interested persons of the Adviser, are compensated by the Adviser and received
no compensation from the Funds for their services.

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<PAGE> 251

<TABLE>
<CAPTION>
Pension or Total Compensation
Retirement from all Funds in
Aggregate Benefits Accrued John Hancock
Compensation as Part of the Fund Complex to
Directors from the Funds* Funds' Expenses* Directors**
- --------- --------------- ---------------- -----------

<S> <C> <C> <C>
James F. Carlin $ 8,411 $ 0 $ 60,700
William H. Cunningham 6,080 16,964 $ 69,700
Charles F. Fretz 789 0 $ 56,200
Harold R. Hiser. Jr. 0 1,099 $ 60,200
Charles L. Ladner 10,776 0 $ 60,700
Leo E. Linbeck, Jr. 25,263 0 $ 73,200
Patricia P. McCarter 10,776 0 $ 60,700
Steven R. Pruchansky 11,157 0 $ 62,700
Norman H. Smith 11,142 0 $ 62,700
John P. Toolan 56 8,340 $ 60,700
------- ------- --------
Total $84,450 $26,403 $627,500
<FN>

* Compensation made pursuant to different compensation arrangements then in effect for
the fiscal year ended October 31, 1995.

** The total compensation paid by the John Hancock Fund Complex to the Independent
Trustees is $627,500 as of the calendar year ended December 31, 1995. All Trustees/Directors
except Messrs. Cunningham and Linbeck are Trustees/Directors of 32 funds in the John Hancock
Fund Complex. Messrs. Cunningham and Linbeck are Trustees/Directors of 30 funds.
</TABLE>

<S> <C> <C> <C>
R. Trent Campbell $ 29,238 $0 $ 70,000
Mrs. Lloyd Bentsen $ 25,683 $0 $ 63,000
Thomas R. Powers $ 26,237 $0 $ 63,000
Thomas B. McDade $ 26,737 $0 $ 63,000

TOTAL $107,895 $0 $216,000
<FN>

* For the fiscal year ended October 31, 1995.
** As of December 31, 1995.
</TABLE>

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<PAGE> 252

INVESTMENT ADVISORY AND OTHER SERVICES

As described in the Funds' Prospectuses, the Funds receive their
investment advice from the Adviser. Investors should refer to the Prospectuses
for a description of certain information concerning the Funds' investment
management contracts. Each of the Directors and principal officers affiliated
with the Corporation who is also an affiliated person of the Adviser is named
above, together with the capacity in which such person is affiliated with the
Corporation and the Adviser.

The Adviser, located at 101 Huntington Avenue, Boston, Massachusetts
02199-7603, was organized in 1968 and has more than $16 billion in total assets
under management in its capacity as investment adviser to the Funds and the
other mutual funds and publicly traded investment companies in the John Hancock
group of funds having a combined total of over 1,080,000 shareholders. The
Adviser is a wholly-owned subsidiary of The Berkeley Financial Group, which is
in turn a wholly-owned subsidiary of John Hancock Subsidiaries, Inc., which is
in turn a wholly-owned subsidiary of John Hancock Mutual Life Insurance Company
(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 the 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.

As described in the Prospectuses, the Corporation, on behalf of each
Fund, has entered into investment management contracts with the Adviser. Under
each investment management contract, the Adviser provides the Funds with (i) a
continuous investment program, consistent with each Fund's stated investment
objective and policies, (ii) supervision of all aspects of each 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 their business. The
Adviser is responsible for the day-to-day management of each Fund's portfolio
assets.

No person other than the Adviser and its directors and employees
regularly furnish advice to the Funds with respect to the desirability of a Fund
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 contracts with the
Corporation, on behalf of each Fund, the Adviser provides the Corporation with
office space, equipment and supplies and other facilities required for the
business of the Funds. The Adviser pays the compensation of all officers and
employees of the Corporation, and pays the expenses of clerical services
relating to the administration of the Funds. All expenses which are not
specifically paid by the Adviser and which are incurred in the operation of the
Funds including, but not limited to, (i) the fees of the Directors of the
Corporation who are not "interested persons," as such term is defined in the
1940 Act (the "Independent Directors"), (ii) the fees of the members of the
Corporation's Advisory

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<PAGE> 253
Board (described above) and (iii) the continuous public offering of the shares
of each Fund are borne by the Funds.

As provided by the investment management contracts, each Fund pays the
Adviser an investment management fee, which is accrued daily and paid monthly
in arrears at the following rates of the Funds' average daily net assets:

<TABLE>
JOHN HANCOCK EMERGING GROWTH FUND FEE
JOHN HANCOCK GLOBAL RESOURCES FUND (ANNUAL RATE)
-------------
<S> <C>
Average Daily Net Assets 0.75%
</TABLE>

<TABLE>
JOHN HANCOCK GOVERNMENT INCOME FUND
<CAPTION>
FEE
AVERAGE DAILY NET ASSETS (ANNUAL RATE)
- ------------------------ -------------
<S> <C>
The first $200 million 0.65%
The next $300 million 0.625%
Over $500 million 0.60%
</TABLE>

<TABLE>
JOHN HANCOCK HIGH YIELD TAX-FREE FUND
JOHN HANCOCK HIGH YIELD BOND FUND
<CAPTION>
FEE
AVERAGE DAILY NET ASSETS (ANNUAL RATE)
- ------------------------ -------------
<S> <C>
The first $75 million 0.625%
The next $75 million 0.5625%
Over $150 million 0.50%
</TABLE>

<TABLE>
JOHN HANCOCK MONEY MARKET FUND
<CAPTION>
FEE
AVERAGE DAILY NET ASSETS (ANNUAL RATE)
- ------------------------ -------------
<S> <C>
The first $500 million 0.50%*
The next $250 million 0.425%
The next $250 million 0.375%
The next $500 million 0.35%
The next $500 million 0.325%
The next $500 million 0.30%
Over $2.5 billion 0.275%

<FN>
*The Adviser has reduced the fee to 0.40% of the Fund's average daily net
assets and can not reinstate the fee to 0.50% without the Trustees' consent.

</TABLE>

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<PAGE> 254

The Adviser may temporarily reduce its advisory fee or make other
arrangements to reduce a Fund's expenses to a specified percentage of average
daily net assets. The Adviser retains the right to re-impose the advisory fee
and recover any other payments to the extent that, at the end of any fiscal
year, a Fund's annual expenses fall below this limit.

In the event normal operating expenses of a Fund, exclusive of certain
expenses prescribed by state law, are in excess of any state limit where such
Fund is registered to sell shares of common stock, 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. The most restrictive limit applicable to the Funds is 2.5% of the
first $30,000,000 of a Fund's average daily net asset value, 2% of the next
$70,000,000 of such assets and 1.5% of the remaining average daily net asset
value.

Pursuant to the investment management contracts, the Adviser is not
liable for any error of judgment or mistake of law or for any loss suffered by a
Fund in connection with the matters to which their respective contracts relate,
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 its reckless
disregard of the obligations and duties under the applicable contract.

The initial term of the investment management contracts expires on
December 22, 1996, and will continue in effect from year to year thereafter if
approved annually by a vote of a majority of the Independent Directors, cast in
person at a meeting called for the purpose of voting on such approval, and by
either a majority of the Directors or the holders of a majority of the affected
Fund's outstanding voting securities. Each management contract may be terminated
without penalty on 60 days' notice at the option of either party or by vote of a
majority of the outstanding voting securities of the Fund. Each management
contract terminates automatically in the event of its assignment.

Securities held by a Fund may also be held by other funds or investment
advisory clients for which the Adviser or its 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 Funds 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 its affiliates may increase the demand for securities being purchased or the
supply of securities being sold, there may be an adverse effect on price.

Under the investment management contracts, the Funds may use the name
"John Hancock" or any name derived from or similar to it only for as long as the
investment management contract or any extension, renewal or amendment thereof
remains in effect. If a Fund's investment management contract is no longer in
effect, the Fund (to the extent that it lawfully can) will cease to use such
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
non-exclusive right to use the name "John Hancock" or any similar name to any
other

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<PAGE> 255

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.

For the period from November 1, 1994 to December 22, 1994(a) and for
the fiscal years ended October 31, 1994(b), and 1993(c) advisory fees payable
by the Funds to TFMC, each Fund's former investment adviser, were as follows:

(1) Emerging Growth Fund - (a) $496,208 (b) $2,706,438 and (c)
$1,668,514

(2) Global Resources Fund - (a) $50,516 (b) $220,869 and (c) $95,411

(3) Government Income Fund - (a) $256,721 (b) $1,728,997 and (c)
$1,698,937

(4) High Yield Bond Fund - (a) $162,374 (b) $976,834 and (c) $777,673

(5) High Yield Tax-Free Fund - (a) $161,643 (b) $886,380 and (c)
$541,737

(6) Money Market Fund - (a) $50,611 (b) $214,088 and (c) $142,298

For the period from December 22, 1994 to October 31, 1995 advisory fees
payable by the Funds to the Adviser, were as follows:

(1) Emerging Growth Fund - $2,978,791

(2) Global Resources Fund - $212,918

(3) Government Income Fund - $1,612,806

(4) High Yield Bond Fund - $897,349

(5) High Yield Tax-Free Fund - $830,016

(6) Money Market Fund - $221,171

During the period of December 22, 1994 to April 17, 1995, the Adviser
paid subadvisory fees to Transamerica Investment Services, Inc. $147,903.

ADMINISTRATIVE SERVICES AGREEMENT. The Corporation, on behalf of each
Fund, was a party to an administrative services agreement with TFMC (the
"Services Agreement"), pursuant to which TFMC performed bookkeeping and
accounting services and functions, including preparing and maintaining various
accounting books, records and other documents and keeping such general ledgers
and portfolio accounts as are reasonably necessary for the operation of the
Funds. Other administrative services included communications in response to
shareholder inquiries and certain printing expenses of various financial
reports. In addition, such staff and

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<PAGE> 256

office space, facilities and equipment was provided as necessary to provide
administrative services to the Funds. The Services Agreement was amended
in connection with the appointment of the Adviser as adviser to the Fund to
permit services under the Agreement to be provided to the Funds by the Adviser
and its affiliates. The Services Agreement was terminated during the fiscal year
1995.

The following amounts for each of the following Funds for their
respective periods reflect (a) the total of administrative services fees paid to
TFMC ( and to the Adviser during the period December 22, 1994 to January 16,
1995):

EMERGING GROWTH FUND- For the fiscal years ended October 31, 1995, 1994 and
1993 fees paid were $34,231, $222,044, and $157,911, respectively.

GLOBAL RESOURCES FUND -For the fiscal years ended October 31, 1995, 1994 and
1993 fees paid were $9,309, $54,259 and $44,306, respectively.

GOVERNMENT INCOME FUND - For the fiscal years ended October 31, 1995, 1994
and 1993 fees paid were $16,694, $132,786 , and $116,354, respectively.

HIGH YIELD BOND FUND -For the fiscal years ended October 31, 1995, 1994,
and 1993 fees paid were $13,697, $100,822, and $82,030.

HIGH YIELD TAX-FREE FUND -For the fiscal years ended October 31, 1995 , 1994
and 1993 fees paid were $10,565, $88,709, and $69,485, respectively.

MONEY MARKET FUND - For the fiscal years ended October 31, 1995, 1994 and
1993 fee paid were $7,517, $46,621, and $42,511, respectively.

DISTRIBUTION CONTRACT

DISTRIBUTION AGREEMENT. As discussed in the Prospectuses, each Fund's
shares are sold on a continuous basis at the public offering price. John Hancock
Funds, a wholly-owned subsidiary of the Adviser, has the exclusive right,
pursuant to the Distribution Agreement dated December 22, 1994 (the
"Distribution Agreement"), to purchase shares from the Funds at net asset value
for resale to the public or to broker-dealers at the public offering price. Upon
notice to all broker-dealers with whom it has sales agreements ("Selling
Brokers"), John Hancock Funds may allow such Selling Brokers up to the full
applicable sales charge during periods specified in such notice. During these
periods, such Selling Brokers may be deemed to be underwriters as that term is
defined in the Securities Act of 1933.

The Distribution Agreement was initially adopted by the affirmative vote
of the Corporation's Board of Directors including the vote of a majority of
Directors who are not parties to the agreement or interested persons of any such
party, cast in person at a meeting called for such purpose. The Distribution
Agreement shall continue in effect with respect to each Fund until

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<PAGE> 257

December 22, 1996 and from year to year if approved by either the vote of the
Fund's shareholders or the Board of Directors including the vote of a majority
of the Directors who are not parties to the agreement or interested persons of
any such party, cast in person at a meeting called for such purpose. The
Distribution Agreement may be terminated at any time as to one or more of the
Funds, without penalty, by either party upon sixty (60) days' written notice or
by a vote of a majority of the outstanding voting securities of the affected
Fund and terminates automatically in the case of an assignment by John Hancock
Funds.

For the fiscal year ended October 31, 1995, the following amounts for
each of Emerging Growth and High Yield Bond Fund reflect (a) the total
underwriting commissions for sales of the Fund's Class A shares and (b) the
portion of such amount retained by the Fund's distributor, John Hancock Funds
Inc. and the former distributor, Transamerica Fund Distributors, Inc. In each
case, the remainder of such underwriting commissions was reallowed to dealers.

EMERGING GROWTH FUND
(a) $604,527 and (b) $67,705

HIGH YIELD BOND FUND
(a) $239,238 and (b) $19,285

GLOBAL RESOURCES FUND
(a) $13,467 and (b) $2,273

HIGH YIELD TAX FREE FUND
(a) $118,032 and (b) $15,719

GOVERNMENT INCOME FUND
(a) $35,314 and (b) $6,442

DISTRIBUTION PLAN. The Board of Directors approved distribution plans
pursuant to Rule 12b-1 under the 1940 Act for Class A Shares ("Class A Plans")
and Class B Shares ("Class B Plans") of each Fund. Such Plans were approved by a
majority of the outstanding shares of each respective class of each Fund (except
for the Class A Plan for Money Market Fund) on December 16, 1994 and became
effective on December 22, 1994. The Class A Plan for Money Market Fund was
approved by the sole shareholder of the Class A shares of the Fund on September
12, 1995 and became effective on September 12, 1995.

Under each Class A Plan, the distribution or service fee will not exceed
an annual rate of 0.25% of the average daily net asset value of the Class A
shares of a Fund (determined in accordance with the Fund's Prospectus as from
time to time in effect). Money Market Fund has determined that it will pay
distribution and service fees of 0.15% to John Hancock Funds but may in the
future determine to pay up to 0.25% under the Class A Plan. Any expenses under
the Class A Plan not reimbursed within 12 months of being presented to the Fund
for repayment are forfeited and not carried over to future years. Under each
Class B Plan, the distribution or services fee to be paid by the applicable Fund
will not exceed an annual rate of 1.00% of the average daily net assets of the
Class B shares of the Fund (in each case, determined in accordance

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<PAGE> 258

with such Fund's prospectus as from time to time in effect); provided that the
portion of such fee used to cover Service Expenses (described below) shall
not exceed an annual rate of 0.25% of the average daily net asset value of the
Class B Shares of the Fund. In accordance with generally accepted accounting
principles, the Fund does not treat unreimbursed distribution expenses
attributable to Class B shares as a liability of the Fund and does not reduce
the current net assets of Class B by such amount although the amount may be
payable under the Class B Plan in the future.

Under the Plans, expenditures shall be calculated and accrued daily and
paid monthly or at such other intervals as the Directors shall determine. The
fee may be spent by John Hancock Funds on Distribution Expenses or Service
Expenses. "Distribution Expenses" include any activities or expenses primarily
intended to result in the sale of shares of the relevant class of the Fund,
including, but not limited to: (i) initial and ongoing sales compensation
payable out of such fee as such compensation is received by John Hancock Funds
or by Selling Brokers, (ii) direct out-of-pocket expenses incurred in connection
with the distribution of shares, including expenses related to printing of
prospectuses and reports; (iii) preparation, printing and distribution of sales
literature and advertising material; (iv) an allocation of overhead and other
branch office expenses of John Hancock Funds related to the distribution of Fund
Shares; (v) distribution expenses that were incurred by the Fund's former
distributor and not recovered through payments under the Class A or Class B
former plans or through receipt of contingent deferred sales charges ("CDSCs");
and (vi) in the event that any other investment company (the "Acquired Fund")
sells all or substantially all of its assets, merges with or otherwise engages
in a combination with the Fund, distribution expenses originally incurred in
connection with the distribution of the Acquired Fund's shares. Service Expenses
under the Plans include payments made to, or on account of, account executives
of selected broker-dealers (including affiliates of John Hancock Funds) and
others who furnish personal and shareholder account maintenance services to
shareholders of the relevant class of the Fund.

During the fiscal year ended October 31, 1995, the Funds paid the Distributors
the following amounts of expenses with respect to the Class A shares and Class
B shares of each of the Funds:

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<PAGE> 259

<TABLE>

Expense Items
-------------
<CAPTION>

Printing and Interest,
Mailing of Compensation Expenses of Carrying or
Prospectuses to to ----------- Other Finance
Advertising New Selling Brokers John Hancock Charges
----------- --- --------------- ------------ -------
Shareholders Funds
------------ -----

<S> <C> <C> <C> <C> <C>
Money Market Fund
- -----------------
Class A Shares 0 0 $ 7,724 $ 6,107 NONE
Class B Shares $ 5,434 $ 766 $ 226,733 $ 3,472 $ 203,757

Global Resources Fund
- ---------------------
Class A Shares $ 2,777 $ 157 $ 934 $ 4,414 NONE
Class B Shares $ 19,510 $ 9,541 $ 112,225 $ 48,249 $ 116,252

Government Income Fund
- ----------------------
Class A Shares $ 18,322 $ 5,106 $ 65,653 $ 58,444 NONE
Class B Shares $ 41,081 $ 3,224 $ 985,054 $153,626 $1,109,310

High Yield Bond Fund
- --------------------
Class A Shares $ 11,193 $ 1,229 $ 3,830 $ 30,680 NONE
Class B Shares $113,854 $10,183 $ 529,660 $365,331 $ 601,737

Emerging Growth Fund
- --------------------
Class A Shares $ 60,215 $ 6,025 $ 86,447 $205,221 NONE
Class B Shares $191,492 $22,622 $1,142,644 $690,198 $1,093,651

High Yield Tax Free
- -------------------
Class A Shares $ 5,882 $ 1,187 $ 5,714 $ 24,657 NONE
Class B Shares $ 62,187 $ 6,679 $ 525,782 $258,750 $ 666,273
</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
Directors and the Independent Directors. Each of the Plans provides that it may
be terminated without penalty (a) by vote of a majority of the Independent
Directors, (b) by a majority of the respective Class' outstanding voting
securities 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. Each of the Plans provides that no material amendment to the Plan will, in
any event, be effective unless it is approved by a majority vote of the
Directors and the Independent Directors of the Corporation. The holders of Class
A Shares and Class B Shares have exclusive voting rights with respect to the
Plan applicable to their respective class of shares. In adopting the Plans, the
Board of Directors has determined that, in their judgment, there is a reasonable
likelihood that each Plan will benefit the holders of the applicable class of
shares of the affected Fund.

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<PAGE> 260

Information regarding the services rendered under the Plans and the
Distribution Agreement and the amounts paid therefore by the respective Class of
the Funds are provided to, and reviewed by, the Board of Directors on a
quarterly basis. In its quarterly review, the Board of Directors considers the
continued appropriateness of the Plans and the Distribution Agreement and the
level of compensation provided therein.

NET ASSET VALUE

For purposes of calculating the net asset value ("NAV") of the shares of
the Funds, 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 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 mean
between the current closing bid and asked prices.

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 Directors.

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 the Fund's NAV.

The Funds will not price their 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.

AMORTIZED COST METHOD OF PORTFOLIO VALUATION

Money Market Fund utilizes the amortized cost valuation method of
valuing portfolio instruments in the absence of extraordinary or unusual
circumstances. Under the amortized cost method, assets are valued by constantly
amortizing over the remaining life of an instrument the

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<PAGE> 261

difference between the principal amount due at maturity and the cost of the
instrument to the Fund. The Directors will from time to time review the
extent of any deviation of the net asset value, as determined on the basis of
the amortized cost method, from net asset value as it would be determined on the
basis of available market quotations. If any deviation occurs which may result
in unfairness either to new investors or existing shareholders, the Directors
will take such actions as they deem appropriate to eliminate or reduce such
unfairness to the extent reasonably practicable. These actions may include
selling portfolio instruments prior to maturity to realize gains or losses or to
shorten the Fund's average portfolio maturity, withholding dividends, splitting,
combining or otherwise recapitalizing outstanding shares or utilizing available
market quotations to determine net asset value per share.

Since a dividend is declared to shareholders each time net asset value
is determined, the net asset value per share of each class of the Money Market
Fund will normally remain constant at $1.00 per share. There is no assurance
that the Fund can maintain the $1.00 per share value. Monthly, any increase in
the value of a shareholder's investment in either class from dividends is
reflected as an increase in the number of shares of such class in the
shareholder's account or is distributed as cash if a shareholder has so
elected.

It is expected that the Fund's net income will be positive each time it
is determined. However, if because of a sudden rise in interest rates or for
any other reason the net income of the Fund determined at any time is a negative
amount, the Fund will offset the negative amount against income and accrued
during the month for each shareholder account. If at the time of payment of a
distribution such negative amount exceeds a shareholder's portion of accrued
income, the Fund may reduce the number of its outstanding shares by treating the
shareholder as having contributed to the capital of the Fund that number of full
or fractional shares which represent the amount of excess. By investing in
either class of shares of the Fund, shareholders are deemed to have agreed to
make such a contribution. This procedure permits the Fund to maintain its net
asset value at $1.00 per share.

If in the view of the Directors it is inadvisable to continue the
practice of maintaining net asset value at $1.00 per share, the Directors
reserve the right to alter the procedures for determining net asset value. The
Fund will notify shareholders of any such alteration.

The Fund is permitted to redeem shares of either class in kind.
Nevertheless, the Fund has filed with the Securities and Exchange Commission a
notification of election committing itself to pay in cash on redemption by a
shareholder of record, limited during any 90-day period to the lesser of
$250,000 or 1% of the net asset value of the Fund at the beginning of such
period.

The 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.

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<PAGE> 262
INITIAL SALES CHARGE ON CLASS A SHARES

Class A shares of the Funds (except for Money Market Fund) are offered
at a price equal to their net asset value plus a sales charge which, at the
option of the purchaser, may be imposed either at the time of purchase (the
"initial sales charge alternative") or on a contingent deferred basis (the
"deferred sales charge alternative"). Class A shares of Money Market Fund will
be sold at their net asset value without a sales charge. Share certificates will
not be issued unless requested by the shareholder in writing, and then only will
be issued for full shares. The Directors reserve the right to change or waive a
Fund's minimum investment requirements and to reject any order to purchase
shares (including purchase by exchange) when in the judgment of the Adviser such
rejection is in the Fund's best interest.

The sales charges applicable to purchases of Class A shares of the Funds
are described in each Fund's Prospectus. Methods of obtaining reduced sales
charges referred to generally in the Prospectuses are described in detail below.
In calculating the sales charge applicable to current purchases of Class A
shares, 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 or her spouse and their children under the age of
21 purchasing securities for his or her 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 Prospectuses, Class A shares
of the Funds may be sold without a sales charge to persons described in the
Prospectuses.

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 value of the Class A shares already held
by such person.

COMBINATION PRIVILEGE. Reduced sales charges (according to the schedule
set forth in the Prospectuses) also are available to an investor based on the
aggregate amount of his concurrent and prior investments in Class A shares of a
Fund and shares of all other John Hancock funds which carry a sales charge.

LETTER OF INTENTION. The reduced sales loads are also applicable to
investments made over a specified period pursuant to a Letter of Intention
(LOI), which should be read carefully prior to its execution by an investor.
Each Fund (other than Money Market Fund) offers two options regarding the
specified period for making investments under the LOI. All investors have

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the option of making their investments over a 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
IRA's, SEP, SARSEP, TSA, 401(k) plans, TSA plans and Section 457 plans. Such an
investment (including accumulations and combinations) must aggregate $100,000 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 ($50,000 in the case of Emerging Growth Fund and Global Resources
Fund). 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 with the specified period (either 13 or 48 months), the sales charge
applicable will not be higher than that which would have been 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 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 charges 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 a 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 a 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 CDSC at the rates set forth in
the Funds' respective Prospectuses 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. Class B shares of Money Market Fund, not purchased

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directly, will be subject upon redemption to the CDSC set forth in the
Prospectus of the John Hancock fund from which the investor initially exchanged
his/her shares.

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 Prospectuses for additional information regarding the CDSC.

SPECIAL REDEMPTIONS

Although the Funds would not normally do so, each 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 Directors. When the shareholder sells portfolio
securities received in this fashion, he would incur a brokerage charge. Any such
security would be valued for the purpose of making such payment at the same
value as used in determining the Fund's net asset value. Each Fund has elected
to be governed by Rule 18f-1 under the 1940 Act, pursuant to which the Fund is
obligated to redeem shares solely in cash up to the lesser of $250,000 or 1% of
the net asset value of the Fund during any 90-day period for any one account.

ADDITIONAL SERVICES AND PROGRAMS

EXCHANGE PRIVILEGE. As described more fully in the Prospectuses, the
Funds permit exchanges of shares of any class for shares of the same class in
any other John Hancock fund offering that class.

SYSTEMATIC WITHDRAWAL PLAN. As described briefly in the Prospectuses,
the Funds permit 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 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 (except with respect to the
Money Market Fund) or Class B shares of a 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
Fund shares at the same time as a Systematic Withdrawal Plan is in effect. Each
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.

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MONTHLY AUTOMATIC ACCUMULATION PROGRAM ("MAAP"). This program is
explained fully in each Fund's Prospectus and the Account Privileges
Application. 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.

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 Fund shares 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 another John Hancock mutual fund, 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 another John Hancock mutual fund. If a CDSC was
paid upon a redemption, a shareholder may reinvest the proceeds from that
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 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."

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DESCRIPTION OF THE CORPORATION'S SHARES

Each Fund operates as one series of the Corporation. All shares of stock
of the Corporation ($.01 par value per share) have equal voting rights among
shares of the same series (except that each class of shares within a series has
sole voting rights with respect to matters solely affecting that class). On
September 12, 1995, the Corporation's Articles of Incorporation were amended to
increase the authorized common stock of the Corporation from 375,000,000 to
2,500,000,000 shares of Class A Common Stock, from 625,000,000 to 3,000,000,000
shares of Class B Common Stock; and from 0 to 1,000,000,000 shares of Class S
Common Stock. No shares of any series or class have pre-emptive or conversion
rights. Each series of shares represents interests in a separate portfolio of
investments. Each is entitled to all income and gains (or losses) and bears all
of the expenses associated with the operations of that portfolio except that
each class of a series bears its own distribution expenses. Common expenses of
the Corporation are allocated among the series, based upon the respective net
assets or ratably or a combination of both whichever is more appropriate, of
each series.

The Board of Directors is authorized to create additional series of
shares and classes within any series at any time without approval by
shareholders. Six series of shares representing interests in the Corporation are
presently authorized.

Each share of each series or class of the Corporation represents an
equal proportionate interest with each other share in that series or class, none
having priority or preference over other shares of the same series or class. The
interest of investors in the various series or classes of the Corporation is
separate and distinct. All consideration received for the sales of shares of a
particular series or class of the Corporation, all assets in which such
consideration is invested and all income, earnings and profits derived from such
investments will be allocated to and belong to that series or class. As such,
each share is entitled to dividends and distributions out of the net income
belonging to that series or class as declared by the Board of Directors. The
assets of each series are charged with the liabilities of that series and with a
share of the Corporation's general liabilities.

The Board of Directors determines those assets and liabilities deemed to
be general assets or liabilities of the Corporation, and these items are
allocated among each series in proportion to the relative total net assets of
each series. In the unlikely event that the liabilities allocable to a series
exceed the assets of that series, the amount to be deemed available for
distribution to each affected series shall be determined by the Board of
Directors in order to effect an equitable allocation among each series of the
Corporation.

The directors of the Corporation have authorized the issuance of two
classes of common stock for each Fund, designated as Class A and Class B shares,
and, in the case of the Money Market Fund has authorized the issuance of a third
class of common stock, designated as Class S shares. Class A, Class B shares
and, in the case of Money Market Fund, Class S shares each represent an
interest in the same assets of the respective Funds and are identical in all
respects except that each class bears certain expenses related to the
distribution of such shares and certain expenses related to transfer agency
services. Class S shares of Money Market Fund are available

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exclusively to investors who maintain brokerage accounts with certain brokers
who offer shares of Money Market Fund as part of a sweep account arrangement.
Class S shares of Money Market Fund are not subject to a sales charge on
purchases, redemptions or reinvested dividends, nor are they subject to deferred
sales charges or an exchange fee. The holders of Class A and Class B shares and,
in the case of Money Market Fund, Class S shares have certain exclusive voting
rights on matters relating to their respective distribution plans. The different
classes of the Funds may bear different expenses relating to the cost of holding
shareholder meetings necessitated by the exclusive voting rights of any class of
shares. The Directors of the Corporation may classify and reclassify the shares
of all Funds into additional classes of common stock at a future date.

VOTING RIGHTS. Each shareholder of the Corporation is entitled to a full
vote for each full share held (and fractional votes for fractional shares).
Shareholders of each series or class vote separately from other shareholders of
the Corporation with respect to all matters which affect solely the interests of
that series or class. After Directors have been elected by shareholders, they
will continue to serve indefinitely and they may appoint their own successors,
provided that always at least a majority of the Directors have been elected by
the Corporation's shareholders. The voting rights of stockholders are not
cumulative, so that the holders of more than 50 percent of the shares voting
can, if they choose, elect all Directors being selected, while the holders of
the remaining shares would be unable to elect any Directors. It is the intention
of the Corporation not to hold annual meetings of shareholders. The Directors
may call annual or special meetings of shareholders of the Corporation or any
class of a series for action by shareholder vote as may be required by the
Investment Company Act of 1940. Pursuant to an undertaking to the Securities and
Exchange Commission, the Corporation will call a meeting of shareholders for any
purpose, including voting to remove one or more Directors, on the written
request of the holders of at least 10% of the outstanding shares of the
Corporation. The Funds, under certain circumstances, will assist shareholders
with communications including shareholder proposals.

DIRECTOR AND OFFICER LIABILITY. Under the Corporation's Articles of
Incorporation and the Maryland General Corporation Law, the directors, officers,
employees and agents of the Corporation are entitled to indemnification under
certain circumstances against liabilities, claims and expenses arising from any
threatened, pending or completed action, suit or proceeding to which they are
made parties by reason of the fact that they are or were such directors,
officers, employees or agents of the Corporation except as such liability may
arise from their own bad faith, willful misfeasance, gross negligence or
reckless disregard of duties.

The Corporation is not required to issue stock certificates. The
Corporation shall continue without limitation of time subject to the provisions
in the Articles of Incorporation concerning termination by action of the
shareholders.

TAX STATUS

Each Fund is treated as a separate entity for accounting and tax
purposes. Each Fund has qualified and elected to be treated as a "regulated
investment company" under Subchapter M of 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

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distributions, and the diversification of its assets, each 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.

Each Fund will be subject to a 4% non-deductible 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. Each
Fund intends under normal circumstances to avoid liability for such tax by
satisfying such distribution requirements.

Distributions from a Fund's current or accumulated earnings and profits
("E&P"), as computed for Federal income tax purposes, will be taxable as
described in such Fund's Prospectus whether taken in shares or in cash.
Distributions, if any, in excess of E&P will constitute a return of capital,
which will first reduce an investor's tax basis in Fund shares and thereafter
(after such basis is reduced to zero) will generally give rise to capital
gains. 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 they would have received had
they elected to receive the distributions in cash, divided by the number of
shares received.

Distributions of tax-exempt interest ("exempt-interest dividends")
timely designated as such by High Yield Tax-Free Fund will be treated as
tax-exempt interest under the Code, provided that such Fund qualifies as a
regulated investment company and at least 50% of the value of its assets at the
end of each quarter of its taxable year is invested in tax-exempt obligations.
Shareholders are required to report their receipt of tax-exempt interest,
including such distributions, on their Federal income tax returns. The portion
of High Yield Tax-Free Fund's distributions designated as exempt-interest
dividends may differ from the actual percentage that its tax-exempt income
comprised of its total income during the period of any particular shareholder's
investment. High Yield Tax-Free Fund will report to shareholders the amount
designated as exempt-interest dividends for each year.

Interest income from certain types of tax-exempt bonds that are private
activity bonds in which High Yield Tax-Free Fund may invest is treated as an
item of tax preference for purposes of the Federal alternative minimum tax. To
the extent that High Yield Tax-Free Fund invests in these types of tax-exempt
bonds, shareholders will be required to treat as an item of tax preference for
Federal alternative minimum purposes that part of such Fund's exempt-interest
dividends which is derived from interest on these tax-exempt bonds.
Exempt-interest dividends derived from interest income from all tax-exempt bonds
may be included in corporate "adjusted current earnings" for purposes of
computing the alternative minimum tax liability, if any, of corporate
shareholders of High Yield Tax-Free Fund.

If Global Resources Fund or Emerging Growth Fund acquires stock in
certain non-U.S. corporations that receive at least 75% of their annual gross
income from passive sources (such as interest, dividends, rents, royalties or
capital gain) or hold at least 50% of their assets in investments producing such
passive income ("passive foreign investment companies"), that Fund could be
subject to Federal income tax and additional interest charges on "excess
distributions" received from such companies or gain from the sale of stock in
such companies, even if all income or gain actually received by the Fund is
timely distributed to its shareholders. The Fund would

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not be able to pass through to its shareholders any credit or deduction for such
a tax. Certain elections may, if available, ameliorate these adverse tax
consequences, but any such election would require the applicable Fund to
recognize taxable income or gain without the concurrent receipt of cash. Any
Fund that is permitted to acquire stock in foreign corporations may limit and/or
manage its holdings in passive foreign investment companies to minimize its tax
liability or maximize its return from these investments.

Foreign exchange gains and losses realized by Emerging Growth Fund,
Global Resources Fund, Government Income Fund or High Yield Bond Fund in
connection with certain transactions involving foreign currency-denominated debt
securities, certain foreign currency futures and options, foreign currency
forward 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 a Fund's investment in stock
or securities, possibly including speculative currency positions or currency
derivatives not used for hedging purposes, 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 could 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. Income from investments in commodities,
such as gold and certain related derivative instruments, is also not treated as
qualifying income under this test. If the net foreign exchange loss for a year
treated as ordinary loss under Section 988 were to exceed a Fund's investment
company taxable income computed without regard to such loss but after
considering the post-October loss regulations (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.

Global Resources Fund, Emerging Growth Fund, Government Income Fund and
High Yield Bond Fund may be subject to withholding and other taxes imposed by
foreign countries with respect to their 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 a 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 by them, and (ii) treat such respective pro rata
portions as foreign income taxes paid by them. Global Resources Fund or Emerging
Growth Fund may, but the other Funds probably will not satisfy this 50%
requirement.

If a Fund makes this election, 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

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deduct their pro rata portion of foreign income taxes paid by the Fund, although
such shareholders will be required to include their share 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 a 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. A Fund that cannot or does not
make this election may deduct such taxes in computing its taxable income.

The amount of a Fund's net realized capital gains, if any, in any given
year will vary depending upon the Adviser's current investment strategy and
whether the Adviser believes it to be in the best interest of such Fund to
dispose of portfolio securities or enter into options or futures transactions
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, in the case of Global
Resources Fund and Emerging Growth Fund, to undistributed taxable income of the
Fund. Consequently, subsequent distributions 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 of a Fund (including by exercise of the
exchange privilege) a shareholder may realize a taxable gain or loss depending
upon his basis in his shares, except that a redemption of shares of Money Market
Fund may not result in a gain or loss if the Fund always successfully maintains
a constant net asset value per share, although a loss may still arise if a CDSC
is paid. Any 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 a Fund cannot be taken into
account for purposes of determining gain or loss on the redemption or exchange
of such shares within 90 days after their purchase to the extent shares of the
Fund or another John Hancock fund are subsequently acquired without payment of a
sales charge pursuant to the reinvestment or exchange privilege. Such
disregarded load 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 same 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
an election to reinvest dividends in additional shares. 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 disallowed (in the case of High Yield Tax-Free Fund) to
the extent of all exempt-interest dividends paid with respect to such shares
and, if not thus disallowed, will (in the case of any Fund) 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, each Fund reserves the right to retain and reinvest all or any portion
of the excess, as computed for Federal

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income tax purposes, of net long-term capital gain over net short-term capital
loss in any year. The Funds 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 such 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 such Fund, and (c) be
entitled to increase the adjusted tax basis for his shares in such 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, each Fund is generally permitted to
carry forward a net capital loss in any year to offset its own 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 applicable Fund and, as noted
above, would not be distributed as such to shareholders. As of October 31, 1995,
Emerging Growth Fund had capital loss carryforwards of $6,354,280, which will
expire in 2003. As of October 31, 1995, Global Resources Fund had capital loss
carryforwards of $421,721, of which $16,520 will expire in 2000, $90,341 will
expire in 2002 and $314,860 will expire in 2003. As of December 31, 1995, High
Yield Bond Fund had capital loss carryforwards of $20,325,151, of which
$9,184,152 expires in 2002 and $11,140,999 expires in 2003, Yield Tax-Free Fund
had capital loss carryforwards of $3,699,525, of which $2,785,979 expires in
2002 and $913,546 expires in 2003 and Government Income Fund had capital loss
carryforwards of $116,730,193 of which $19,146,203 expires in 1996, $6,921,927
expires in 1997, $66,593,890 expires in 2000, $6,699,901 expires in 2001,
$15,347,195 expires in 2002 and $2,021,077 expires in 2003. All of the capital
loss carryforwards expiring in 1996, 1997, 2000 and 2001, respectively, were
acquired on September 15, 1995, in the merger with John Hancock Government
Securities Trust. Their availability maybe limited in a given year.

Interest on indebtedness incurred by a shareholder to purchase or carry
shares of High Yield Tax-Free Fund will not be deductible for Federal income tax
purposes to the extent it is deemed related to exempt-interest dividends paid by
such Fund. Pursuant to published guidelines, the Internal Revenue Service may
deem indebtedness to have been incurred for the purpose of purchasing or
carrying shares of this Fund even though the borrowed funds may not be directly
traceable to the purchase of shares.

For purposes of the dividends-received deduction available to
corporations, dividends received by a Fund, if any, from U.S. domestic
corporations in respect of the stock of such corporations 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. Only Emerging Growth Fund or Global Resources
Fund may sometimes have any significant portion of its distributions treated as
qualifying dividends. Corporate shareholders must meet the minimum holding
period requirement stated above (46 or 91 days)

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with respect to their shares of the applicable Fund in order to qualify for the
deduction and, if they borrow to acquire such 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 the
excess (if any) of a corporate shareholder's adjusted current earnings over its
alternative minimum taxable income, which may increase its alternative minimum
tax liability. Additionally, 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
redemption or other disposition of the shares.

Each Fund that invests in certain PIKs, zero coupon securities or
certain increasing rate securities (and, in general, any other securities with
original issue discount or with market discount if the Fund elects to include
market discount in income currently) must accrue income on such investments
prior to the receipt of the corresponding cash payments. However, each Fund must
distribute, at least annually, all or substantially all of its net income,
including such accrued income, to shareholders to qualify as a regulated
investment company under the Code and avoid Federal income and excise taxes.
Therefore, a Fund may have to dispose of its portfolio securities under
disadvantageous circumstances to generate cash, or may have to leverage itself
by borrowing the cash, to satisfy distribution requirements.

Investments in debt obligations that are at risk of or are in default
present special tax issues for any Fund that may hold such obligations, such as
High Yield Bond Fund and High Yield Tax-Free Fund. Tax rules are not entirely
clear about issues such as when the Funds may cease to accrue interest, original
issue discount, or market discount, when and to what extent deductions may be
taken for bad debts or worthless securities, how payments received on
obligations in default should be allocated between principal and income, and
whether exchanges of debt obligations in a workout context are taxable. These
and other issues will be addressed by any Fund that may hold such obligations in
order to reduce the risk of distributing insufficient income to preserve its
status as a regulated investment company and seek to avoid becoming subject to
Federal income or excise tax.

Limitations imposed by the Code on regulated investment companies like
the Funds may restrict a Fund's ability to enter into futures, options and
currency forward transactions.

Certain options, futures and forward foreign currency transactions
undertaken by a Fund may cause such Fund to recognize gains or losses from
marking to market even though its positions have not been sold or terminated and
affect the character as long-term or short-term (or, in the case of certain
currency forwards, options and futures, as ordinary income or loss) and timing
of some capital gains and losses realized by the Fund. Also, certain of a Fund's
losses on its transactions involving options, futures and forward foreign
currency contracts and/or offsetting portfolio positions may be deferred rather
than being taken into account currently in calculating the Fund's taxable income
or gains. These transactions may therefore affect the amount, timing and
character of a Fund's distributions to shareholders. Certain of the applicable
tax rules may be modified if the Fund is eligible and chooses to make one or
more of certain tax elections that may be available. The Funds will take into
account the special tax rules (including consideration of

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available elections) applicable to options, futures or forward contracts in
order to minimize any potential adverse tax consequences.

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, a Fund in their particular
circumstances.

Non-U.S. investors not engaged in a U.S. trade or business with which
their investment in a Fund 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 nonresident alien withholding tax at the rate of 30%
(or a lower rate under an applicable tax treaty) on amounts treated as ordinary
dividends from a 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 Funds.

Provided that each Fund qualifies as a regulated investment company
under the Code, it will not be required to pay any Massachusetts income,
corporate excise or franchise taxes.

CALCULATION OF PERFORMANCE

YIELD (EXCEPT FOR THE MONEY MARKET FUND). For the 30-day period ended
October 31, 1995, the yields of (a) High Yield Bond Fund's Class A and Class B
shares were 9.35% and 9.09%, respectively, (b) High Yield Tax-Free Fund's Class
A and Class B shares were 5.78% and 5.35%, respectively and (c) Government
Income Fund's Class A and Class B shares were 5.36% and 4.91%, respectively.

Each Fund's yield (except for Money Market Fund) is computed by dividing
net investment income per share determined for a 30-day period by the maximum
offering price per share (which includes the full sales charge) on the last day
of the period, according to the following standard formula:

Yield = 2 [ (a-b + 1 )6 -1]
---
cd

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Where:

a = dividends and interest earned during the period.

b = net expenses accrued during the period.

c = the average daily number of fund shares outstanding during the period
that would be entitled to receive dividends.

d = the maximum offering price per share on the last day of the period
(NAV where applicable).

High Yield Tax-Free Fund may advertise a tax-equivalent yield, which is
computed by dividing that portion of the yield of that Fund which is tax-exempt
by one minus a stated income tax rate and adding the product to that portion, if
any, of the yield of the Fund that is not tax-exempt. The tax-equivalent yields
for the High Yield Tax-Free Fund's Class A and Class B Shares at the 36% federal
income tax rate for the 30-day period ended October 31, 1995 were 9.03% and
8.36%, respectively.

MONEY MARKET FUND YIELD. For the purposes of calculating yield for both
classes of Money Market Fund, daily income per share consists of interest and
discount earned on the Fund's investments less provision for amortization of
premiums and applicable expenses, divided by the number of shares outstanding,
but does not include realized or unrealized appreciation or depreciation.

In any case in which the Fund reports its annualized yield, it will also
furnish information as to the average portfolio maturities of the Fund. It will
also report any material effect of realized gains or losses or unrealized
appreciation on dividends which have been excluded from the computation of
yield.

Yield calculations are based on the value of a hypothetical preexisting
account with exactly one share at the beginning of the seven day period. Yield
is computed by determining the net change in the value of the account during the
base period and dividing the net change by the value of the account at the
beginning of the base period to obtain the base period return. Base period is
multiplied by 365/7 and the resulting figure is carried to the nearest 100th of
a percent. Net change in account value during the base period includes
dividends declared on the original share, dividends declared on any shares
purchased with dividends of that share and any account or sales charges that
would affect an account of average size, but excludes any capital changes.

Effective yield is computed by determining the net change, exclusive of
capital changes, in the value of a hypothetical preexisting account having a
balance of one share at the beginning of the period, subtracting a hypothetical
charge reflecting deductions from shareholder accounts, and dividing the
difference by the value of the account at the beginning of the base period to
obtain the base period return, and then compounding the base period return by
adding 1, raising the sum to a power equal to 365 divided by 7, and subtracting
1 from the result, according to the following formula:

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EFFECTIVE YIELD = [(BASE PERIOD RETURN + 1)365/7]-1

The yield of the Fund is not fixed or guaranteed. Yield quotations
should not be considered to be representations of yield of the Fund for any
period in the future. The yield of the Fund is a function of available interest
rates on money market instruments, which can be expected to fluctuate, as well
as of the quality, maturity and types of portfolio instruments held by the Fund
and of changes in operating expenses. The Fund's yield may be affected if,
through net sales of its shares, there is a net investment of new money in the
Fund which the Fund invests at interest rates different from that being earned
on current portfolio instruments. Yield could also vary if the Fund experiences
net redemptions, which may require the disposition of some of the Fund's
current portfolio instruments.

TOTAL RETURN. Average annual total return is determined separately for
each class of shares.

Set forth below are tables showing the performance on a total return
basis (i.e., with all dividends and distributions reinvested) of a hypothetical
$1,000 investment in the Class A and Class B shares of the Global Resources,
Government Income, High Yield Bond, High Yield Tax-Free and Emerging Growth
Fund. The performance information for each Fund is stated for the fiscal year
ended October 31, 1995 and for the five year period ended October 31, 1995 with
respect to the Class B shares of each Fund for the one year period of Class A
shares of each Fund and for the period from the commencement of operations
(indicated by an asterisk), or the ten year period, of the Class A and Class B
shares of each Fund to October 31, 1995.

<TABLE>
Global Resources Fund
---------------------
<CAPTION>
Class A Shares Class A Shares Class B Shares Class B Shares Class B Shares
One Year Ended 6/15/94* to One Year Five Years Ended 10/31/87* to
10/31/95 10/31/95 Ended 10/31/95 10/31/95
-------- -------- 10/31/95 -------- --------
--------
<S> <C> <C> <C> <C>
(14.84%) (7.87%) (15.49%) 4.43% 7.39%

Government Income Fund
----------------------

<CAPTION>
Class A Shares Class A Shares Class B Shares Class B Shares Class B Shares
One Year Ended 9/30/94* to One Year Ended Five Years Ended 2/23/88* to
10/31/95 10/31/95 10/31/95 10/31/95 10/31/95
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
10.13% 8.15% 9.47% 7.64% 7.27%

</TABLE>

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<TABLE>

High Yield Bond Fund
--------------------
<CAPTION>
Class A Shares Class A Shares Class B Shares Class B Shares Class B Shares
One Year Ended 6/30/93* to One Year Ended Five Years Ended 10/26/87* to
10/31/95 10/31/95 10/31/95 10/31/95 10/31/95
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
3.85% 3.54% 2.94% 13.95% 8.13%

High Yield Tax-Free Fund
------------------------
<CAPTION>
Class A Shares Class A Shares Class B Shares Class B Shares Class B Shares
One Year Ended 12/31/93* to One Year Ended Five Years Ended 8/29/86* to
10/31/95 10/31/95 10/31/95 10/31/95 10/31/95
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
9.61% 2.39% 8.96% 7.72% 6.71%

Emerging Growth Fund
--------------------

<CAPTION>
Class A Shares Class A Shares Class B Shares Class B Shares Class B Shares
One Year Ended 8/22/91* to One Year Ended Five Years Ended 10/26/87* to
10/31/95 10/31/95 10/31/95 10/31/95 10/31/95
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
27.84% 16.53% 28.60% 25.69% 21.43%
<FN>
* Commencement of operations.
</TABLE>

TOTAL RETURN. Each 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:

P(1+T)n = ERV

P = a hypothetical initial payment 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 and life-of-fund periods.

In the case of Class A shares or Class B shares, this calculation
assumes the maximum sales charge is included in the initial investment or the
CDSC is applied at the end of the period. This calculation also 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 a Fund during the
period stated by the maximum offering price or net asset value at the end of the
period.

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<PAGE> 277

The total return in the case of Class B shares of each Fund is
calculated by determining the net asset value of all shares held at the end of
the period for each share held from the beginning of the period (assuming
reinvestment of all dividends and distributions at net asset value during the
period and the deduction of any applicable contingent deferred sales charge as
if the shares were redeemed at the end of the period), subtracting the maximum
offering price per share (net asset value per share) at the beginning of such
period and then dividing the result by the maximum offering price per share (net
asset value per share) at the beginning of the same period. Total return for
Class A shares of each of Emerging Growth Fund, Global Resources Fund,
Government Income Fund, High Yield Bond Fund and High Yield Tax-Free Fund is
calculated in the same manner except the maximum offering price reflects the
deduction of the maximum initial sales charge and the redemption value is at net
asset value.

In addition to average annual total returns, a 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 maximum sales
charge on Class A shares or the CDSC on Class B shares into account. A Fund's
"distribution rate" is determined by annualizing the result of dividing the
declared dividends of the Fund during the stated period by the maximum offering
price or net asset value at the end of the period. Excluding a 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, a Fund's yield
and total return will be compared to indices of mutual funds and bank deposit
vehicles such as Lipper Analytical Services, Inc.'s "Lipper--Fixed Income Fund
Performance Analysis," a monthly publication which tracks net assets, total
return, and yield on fixed income 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 and BARRON'S, etc. will
also be utilized. A Fund's promotional and sales literature may make reference
to the Fund's "beta." Beta reflects the market-related risk of the Fund by
showing how responsive the Fund is to the market.

The performance of a Fund is not fixed or guaranteed. Performance
quotations should not be considered to be representations of performance of a
Fund for any period in the future. The performance of a 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 a
Fund's performance.

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<PAGE> 278

BROKERAGE ALLOCATION

Decisions concerning the purchase and sale of portfolio securities and
the allocation of brokerage commissions are made by the Adviser and officers of
the Corporation pursuant to recommendations made by its investment committee,
which consists of officers and directors of the Adviser and affiliates and
officers and Directors who are interested persons of the Funds. Orders for
purchases and sales of securities are placed in a manner which, in the opinion
of the Adviser, 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.

Each 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 NASD and other policies that the
Directors may determine, the Adviser may consider sales of shares of the Funds
as a factor in the selection of broker-dealers to execute a Fund's portfolio
transactions.

Purchase of securities for Government Income Fund, High Yield Bond Fund
and High Yield Tax-Free Fund are normally principal transactions made directly
from the issuer or from an underwriter or market maker for which no brokerage
commissions are usually paid. Purchases from underwriters will include a
commission or concession paid by the issuer to the underwriter, and purchases
and sales from dealers serving as market makers will usually include a mark up
or mark down. Purchases and sales of options and futures will be effected
through brokers who charge a commission for their services and are reflected in
amounts for Government Income Fund and High Yield Bond Fund below.

To the extent consistent with the foregoing, each 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 Funds. The Funds will make no commitments to allocate
portfolio transactions upon any prescribed basis. While the Adviser's officers
will be primarily responsible for the allocation of each Fund's brokerage
business, their policies and practices of the Adviser in this

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<PAGE> 279

regard must be consistent with the foregoing and will at all times be subject
to review by the Directors.

Brokerage commissions of those Funds which pay such commissions for
their respective reporting periods, as follows, amounted to:

EMERGING GROWTH FUND - (a) $263,019 for the fiscal year ended October
31, 1995; (b) $318,023 for the fiscal year ended October 31, 1994;
and (c) $330,454 for the fiscal year ended October 31, 1993.

GLOBAL RESOURCES FUND - (a) $214,507 for the fiscal year ended October
31, 1995; (b) $148,469 for the fiscal year ended October 31, 1994;
and (c) $54,463 for the fiscal year ended October 31, 1993.

GOVERNMENT INCOME FUND - (a) $15,814 for the fiscal year ended October
31, 1995; (b) $96,931 for the fiscal year ended October 31, 1994;
and (c) $254,859 for the fiscal year ended October 31, 1993.

HIGH YIELD BOND FUND - (a) $40,228 for the fiscal year ended October 31,
1995; (b) $2,320 for the fiscal year ended October 31, 1994; and (c)
$13,320 for the fiscal year ended October 31, 1993.

HIGH YIELD TAX FREE FUND - (a) $6,650 for the fiscal year ended October
31, 1995, no commissions were paid for 1994 and 1993.

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 Directors that the price is
reasonable in light of the services provided and to policies that the Directors
may adopt from time to time. During the fiscal year ended October 31, 1995, John
Hancock Emerging Growth Fund directed commissions in the amount of $10,036 and
John Hancock Global Resources Fund directed commissions in the amount of $4,542
to compensate 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 Freedom Securities Corporation and its subsidiaries,
three of which, Tucker Anthony Incorporated ("Tucker Anthony") John Hancock
Distributors, Inc. ("John Hancock Distributors") and Sutro & Company, Inc.
("Sutro"), 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
Tucker Anthony, Sutro or John Hancock Distributors. During the year ended
October 31, 1995, the Fund did not execute any portfolio transactions with then
affiliated brokers.

Any of the Affiliated Brokers may act as broker for a Fund on exchange
transactions, subject, however, to the general policy of the Fund set forth
above and the procedures adopted by

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<PAGE> 280

the Directors pursuant to the 1940 Act. Commissions paid to an Affiliated
Broker must be at least as favorable as those which the Directors 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 a clearing broker for another brokerage firm, and any customers of the
Affiliated Broker not comparable to a Fund as determined by a majority of the
Directors who are not "interested persons" (as defined in the 1940 Act) of the
Funds, the Adviser or the Affiliated Brokers. 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 Brokers as a basis for negotiating
commissions at a rate higher than that determined in accordance with the above
criteria. The Funds will not effect principal transactions with Affiliated
Brokers. The Funds may, however, purchase securities from other members of
underwriting syndicates of which Tucker Anthony and Sutro are members, but only
in accordance with the policy set forth above and procedures adopted and
reviewed periodically by the Directors.

Brokerage or other transactions costs of a Fund are generally
commensurate with the rate of portfolio activity. The portfolio turnover rates
for each of the following Funds for (a) the fiscal year ended October 31, 1995
and (b) the fiscal year ended October 31, 1994 were:

EMERGING GROWTH FUND - (a) 23% and (b) 25%.

GLOBAL RESOURCES FUND - (a) 101% and (b) 96%.

GOVERNMENT INCOME FUND - (a) 102% and (b) 92%.

HIGH YIELD BOND FUND - (a) 98% and (b) 153%*.

HIGH YIELD TAX-FREE FUND - (a) 64% and (b) 62%.

* Higher turnover rates were due to volatile market conditions.

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 Funds. Emerging Growth Fund and
Global Resources Fund pay Investor Services monthly a transfer agent fee equal
to $16 per account for the Class A Shares and $18.50 per account for the Class B
shares on an annual basis, plus out-of-pocket expenses. Government Income Fund
and High Yield Bond Fund pay Investor Services monthly a transfer agent fee
equal to $20 per account for the Class A shares and $22.50 per account for the
Class B shares on an annual basis, plus out-of-pocket expenses. High Yield
Tax-Free Fund pays Investor Services

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monthly a transfer agent fee of $19 per account for the Class A shares and
$21.50 per account for the Class B shares on an annual basis, plus
out-of-pocket expenses. Money Market Fund pays Investor Services monthly a
transfer agent fee of $25 per account for the Class A shares and $27 per account
for the Class B shares on an annual basis, plus 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 Money Market Fund are held pursuant to a
custodian agreement between the Corporation and State Street Bank and Trust
Company, 225 Franklin Street, Boston, Massachusetts 02110. Portfolio securities
of the Emerging Growth Fund, Global Resources Fund, Government Income Fund, High
Yield Bond Fund and High Yield Tax-Free Fund are held pursuant to a custodian
agreement between the Corporation and Investors Bank & Trust Company, 24 Federal
Street, Boston, Massachusetts. Under the custodian agreements, the custodians
perform custody, portfolio and fund accounting services.

INDEPENDENT AUDITORS

The independent auditors of the Funds are Ernst & Young LLP, 200
Clarendon Street, Boston, Massachusetts 02116. The independent auditors audit
and render an opinion on the Funds' annual financial statements and review the
Funds' annual income tax returns. The financial statements of the Funds included
in the Prospectuses and this Statement of Additional Information have been
audited by Ernst & Young LLP for the periods indicated in their report thereon
appearing elsewhere herein, and are included in reliance upon such report given
upon the authority of such firm as experts in accounting and auditing.

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APPENDIX A

CORPORATE AND TAX-EXEMPT BOND RATINGS

MOODY'S INVESTORS SERVICE, INC. ("MOODY'S)

Aaa, Aa, A AND Baa - Tax-exempt bonds rated Aaa are judged to be of the
"best quality." The rating of Aa is assigned to bonds that are of "high quality
by all standards," but long-term risks appear somewhat larger than Aaa rated
bonds. The Aaa and Aa rated bonds are generally known as "high grade bonds."
The foregoing ratings for tax-exempt bonds are rated conditionally. Bonds for
which the security depends upon the completion of some act or upon the
fulfillment of some condition are rated conditionally. These are bonds secured
by (a) earnings of projects under construction, (b) earnings of projects
unseasoned in operation experience, (c) rentals that begin when facilities are
completed, or (d) payments to which some other limiting condition attaches. Such
conditional ratings denote the probable credit stature upon completion of
construction or elimination of the basis of the condition. Bonds rated A are
considered as upper medium grade obligations. Principal and interest are
considered adequate, but elements may be present which suggest a susceptibility
to impairment sometime in the future. Bonds rated Baa are considered a medium
grade obligations; i.e., they are neither highly protected or 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.

STANDARD & POOR'S RATINGS GROUP ("S&P")

AAA, AA, A AND BBB - Bonds rated AAA bear the highest rating assigned to
debt obligations, which indicates an extremely strong capacity to pay principal
and interest. Bonds rated AA are considered "high grade," are only slightly less
marked than those of AAA ratings and have the second strongest capacity for
payment of debt service. Bonds rated A have a strong capacity to pay principal
and interest, although they are somewhat susceptible to the adverse effects of
changes in circumstances and economic conditions. The foregoing ratings are
sometimes followed by a "p" indicating that the rating is provisional. A
provisional rating assumes the successful completion of the project financed by
the bonds being rated and indicates that payment of debt service requirements is
largely or entirely dependent upon the successful and timely completion of the
project. Although a provisional rating addresses credit quality subsequent to
completion of the project, it makes no comment on the likelihood of, or the risk
of default upon failure of, such completion. Bonds rated BBB are regarded as
having an adequate capacity to repay principal and pay interest. Whereas they
normally exhibit protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to repay principal
and pay interest for bonds in this category than for bonds in the A category.

A-1
<PAGE> 283

FITCH INVESTORS SERVICE ("FITCH")

AAA, AA, A, BBB - Bonds rated AAA are considered to be investment grade
and of the highest quality. The obligor has an extraordinary ability to pay
interest and repay principal, which is unlikely to be affected by reasonably
foreseeable events. Bonds rated AA are considered to be investment grade and of
high quality. The obligor's ability to pay interest and repay principal, while
very strong, is somewhat less than for AAA rated securities or more subject to
possible change over the term of the issue. Bonds rated A are considered to be
investment grade and of good quality. The obligor's ability to pay interest and
repay principal is considered to be strong, but may be more vulnerable to
adverse changes in economic conditions and circumstances than bonds with higher
ratings. Bonds rated BBB are considered to be investment grade and of
satisfactory quality. The obligor's ability to pay interest and repay principal
is considered to be adequate. Adverse changes in economic conditions and
circumstances, however, are more likely to weaken this ability than bonds with
higher ratings.

TAX-EXEMPT NOTE RATINGS

MOODY'S - MIG-1 AND MIG-2. Notes rated MIG-1 are judged to be of the
best quality, enjoying strong protection from established cash flow or funds for
their services or from established and broad-based access to the market for
refinancing or both. Notes rated MIG-2 are judged to be of high quality with
ample margins of protection, though not as large as MIG-1.

S&P - SP-1 AND SP-2. SP-1 denotes a very strong or strong capacity to
pay principal and interest. Issues determined to possess overwhelming safety
characteristics are given a plus (+) designation (SP-1+). SP-2 denotes a
satisfactory capacity to pay principal and interest.

FITCH - FIN-1 AND FIN-2. Notes assigned FIN-1 are regarded as having the
strongest degree of assurance for timely payment. A plus symbol may be used to
indicate relative standing. Notes assigned FIN-2 reflect a degree of assurance
for timely payment only slightly less in degree than the highest category.

CORPORATE AND TAX-EXEMPT COMMERCIAL PAPER RATINGS

MOODY'S - Commercial Paper ratings are opinions of the ability of
issuers to repay punctually promissory obligations not having an original
maturity in excess of nine months. Prime-1, indicates highest quality repayment
capacity of rated issue and Prime-2 indicates higher quality.

S&P - Commercial Paper ratings are a current assessment of the
likelihood of timely payment of debts having an original maturity of no more
than 365 days. Issues rated A have the greatest capacity for a timely payment
and the designation 1, 2 and 3 indicates the relative degree of safety. Issues
rated "A-1+" are those with an "overwhelming degree of credit protection."

FITCH - Commercial Paper ratings reflect current appraisal of the degree
of assurance of timely payment. F-1 issues are regarded as having the strongest
degree of assurance for timely

A-2
<PAGE> 284

payment. (+) is used to designate the relative position of an issuer within the
rating category. F-2 issues reflect an assurance of timely payment only
slightly less in degree than the strongest issues. The symbol (LOC) may follow
either category and indicates that a letter of credit issued by a commercial
bank is attached to the commercial paper note.

OTHER CONSIDERATIONS - The ratings of S&P, Moody's, and Fitch represent
their respective opinions of the quality of the municipal securities they
undertake to rate. It should be emphasized, however, that ratings are general
and are not absolute standards of quality. Consequently, municipal securities
with the same maturity, coupon and ratings may have different yields and
municipal securities of the same maturity and coupon with different ratings may
have the same yield.

A-3
<PAGE> 285

FINANCIAL STATEMENTS
--------------------

F-1
<PAGE> 286
FINANCIAL STATEMENTS

JOHN HANCOCK FUNDS - MONEY MARKET 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 OCTOBER 31, 1995. YOU'LL
ALSO FIND THE NET ASSET VALUE AS OF THAT DATE.

<TABLE>
Statement of Assets and Liabilities
October 31, 1995
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
<S> <C>
ASSETS:
Investments, in money market instruments, at value - Note C:
Commercial paper (cost - $46,988,126) ....................... $46,988,126
Negotiable bank certificates of deposit
(cost - $3,000,000) ....................................... 3,000,000
Corporate interest-bearing obligations
(cost - $14,107,087) ...................................... 14,107,087
U.S. government obligations (cost - $10,000,000) ............ 10,000,000
Joint repurchase agreement (cost - $653,000) ................ 653,000
-----------
74,748,213
Cash ......................................................... 590,823
Interest receivable .......................................... 397,572
Miscellaneous assets ......................................... 4,721
Prepaid expenses ............................................. 125,479
-----------
Total Assets ............................... 75,866,808
------------------------------------------------------------
LIABILITIES:
Payable for fund shares repurchased .......................... 550,000
Dividend payable ............................................. 8,764
Payable to John Hancock Advisers, Inc. and
affiliates - Note B ....................................... 36,704
Accounts payable and accrued expenses ........................ 16,333
-----------
Total Liabilities .......................... 611,801
------------------------------------------------------------
NET ASSETS:
Capital paid-in .............................................. 75,255,007
-----------
Net Assets ................................. $75,255,007
============================================================

NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE:
(Based on net asset values and shares of beneficial
interest outstanding - 3,500,000,000 shares
authorized with $0.01 per share par value)
Class A** - $20,942,062/20,942,062 ........................... $ 1.00
==============================================================================
Class B - $54,312,945/54,312,945 ............................. $ 1.00
==============================================================================
</TABLE>

** Class A shares commenced operations on September 12, 1995.

THE STATEMENT OF OPERATIONS SUMMARIZES THE FUND'S INVESTMENT INCOME EARNED AND
EXPENSES INCURRED IN OPERATING THE FUND.

<TABLE>
STATEMENT OF OPERATIONS
Year ended October 31, 1995
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
<S> <C>
INVESTMENT INCOME:
Interest .................................................. $3,223,760
----------
Expenses:
Distribution/service fee - Note B
Class A ** ............................................. 2,145
Class B ................................................ 516,163
Investment management fee - Note B ....................... 271,782
Transfer agent fee - Note B .............................. 95,135
Custodian fee ............................................ 45,512
Registration and filing fees ............................. 44,811
Auditing fee ............................................. 23,210
Printing ................................................. 12,729
Trustees' fees ........................................... 10,078
Shareholder service fee .................................. 7,461
Advisory board fee ....................................... 4,250
Legal fees ............................................... 3,262
Miscellaneous ............................................ 3,121
----------
Total Expenses .......................... 1,039,659
------------------------------------------------------------
Net Investment Income ................... 2,184,101
------------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations ............... $2,184,101
============================================================
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

5
<PAGE> 287
FINANCIAL STATEMENTS

JOHN HANCOCK FUNDS - MONEY MARKET FUND

STATEMENT OF CHANGES IN NET ASSETS
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
--------------------------------
1995 1994
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income ..................................... $ 2,184,101 $ 842,207
------------ ------------
Distributions to Shareholders:
Dividends from net investment income
Class A** - ($0.0066 and none per share, respectively) ... (71,384) --
Class B - ($0.0401 and $0.0180 per share, respectively) .. (2,112,717) (842,207)
------------ ------------
Total Distributions to Shareholders .................... (2,184,101) (842,207)
------------ ------------
FROM FUND SHARE TRANSACTIONS-- NET* ......................... 16,889,418 26,819,423
------------ ------------
NET ASSETS:
Beginning of year ......................................... 58,365,589 31,546,166
------------ ------------
End of year ............................................... $ 75,255,007 $ 58,365,589
============ ============
</TABLE>

* ANALYSIS OF FUND SHARE TRANSACTIONS:

<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
-------------------------------
1995 1994
------------- -------------
<S> <C> <C>
CLASS A **
Shares sold....................................................... $ 47,205,231 --
Shares issued to shareholders in reinvestment of distributions.... 55,602 --
------------- -------------
47,260,833 --
Less shares repurchased........................................... (26,318,771) --
------------- -------------
Net increase...................................................... 20,942,062 --
============= =============
CLASS B
Shares sold....................................................... 223,741,024 $237,416,247
Shares issued to shareholders in reinvestment of distributions.... 1,684,942 683,416
------------- -------------
225,425,966 238,099,663
Less shares repurchased........................................... (229,478,610) (211,280,240)
------------- -------------
Net increase (decrease)........................................... $ (4,052,644) $26,819,423
============= =============
</TABLE>

** Class A shares commenced operations on September 12, 1995.

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, 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 LAST TWO
PERIODS.

SEE NOTES TO FINANCIAL STATEMENTS.

6
<PAGE> 288
FINANCIAL STATEMENTS

JOHN HANCOCK FUNDS - MONEY MARKET 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 12, 1995
(COMMENCEMENT OF
OPERATIONS) TO
OCTOBER 31, 1995
------------------
<S> <C>
CLASS A
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period............................. $ 1.00
--------
Net Investment Income............................................ 0.01
--------
Less Distributions:
Dividends from Net Investment Income............................. (0.01)
--------
Net Asset Value, End of Period................................... $ 1.00
========
Total Investment Return at Net Asset Value (d)................... 0.64%(e)

RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted)........................ $ 20,942
Ratio of Expenses to Average Net Assets.......................... 1.07%(*)
Ratio of Net Investment Income to Average Net Assets............. 4.94%(*)
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
--------------------------------------------------
1995(b) 1994 1993 1992 1991
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
CLASS B
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ............................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- -------
Net Investment Income ........................................... 0.04 0.02 0.01 0.02 0.05
------- ------- ------- ------- -------
Less Distributions:
Dividends from Net Investment Income ............................ (0.04) (0.02) (0.01) (0.02) (0.05)
------- ------- ------- ------- -------
Net Asset Value, End of Period .................................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= =======
Total Investment Return at Net Asset Value (d) .................. 4.07% 1.87% 0.85% 1.73% 4.61%
Total Adjusted Investment Return at Net Asset Value (a) (c) ..... -- -- -- -- 4.49%

RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted) ....................... $54,313 $58,366 $31,546 $31,480 $20,763
Ratio of Expenses to Average Net Assets ......................... 1.92% 2.06% 2.44% 2.47% 2.11%
Ratio of Adjusted Expenses to Average Net Assets (a) ............ -- -- -- -- 2.23%(a)
Ratio of Net Investment Income to Average Net Assets ............ 3.96% 1.97% 0.85% 1.69% 4.57%
Ratio of Adjusted Net Investment Income to Average Net Assets (a) -- -- -- -- 4.45%(a)

<FN>
* On an annualized basis
(a) On an unreimbursed basis without expense reduction.
(b) On December 22, 1994 John Hancock Advisers, Inc. became the Investment
Adviser of the Fund.
(c) An estimated total return calculation takes into consideration fees and
expenses waived or borne by the adviser during the periods shown.
(d) Total investment return assumes dividend reinvestment and does not reflect
the effect of sales charges.
(e) Not annualized.
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

7
<PAGE> 289
FINANCIAL STATEMENTS

JOHN HANCOCK FUNDS - MONEY MARKET FUND

SCHEDULE OF INVESTMENTS
October 31, 1995
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

THE SCHEDULE OF INVESTMENTS IS A COMPLETE LIST OF ALL SECURITIES OWNED BY MONEY
MARKET FUND ON OCTOBER 31, 1995. IT'S DIVIDED INTO FIVE TYPES OF SHORT-TERM
INVESTMENTS. MOST CATEGORIES OF SHORT-TERM INVESTMENTS ARE FURTHER BROKEN DOWN
BY INDUSTRY GROUP.

<TABLE>
<CAPTION>
PAR VALUE
INTEREST QUALITY (000'S
ISSUER, DESCRIPTION RATE RATINGS(*) OMITTED) VALUE
- ------------------- -------- ---------- --------- -----
<S> <C> <C> <C> <C>
COMMERCIAL PAPER
AUTOMOTIVE (2.92%)
Ford Motor Credit Co.,
11-03-95 ......................... 5.730% Tier 1 $1,000 $ 999,682
General Motors Acceptance Corp.,
11-03-95 ......................... 5.800 Tier 1 1,200 1,199,613
----------
2,199,295
----------
BANKING - FOREIGN (2.64%)
Swedish Export Credit Corp.,
12-05-95 ......................... 5.750 Tier 1 2,000 1,989,139
----------
BROKER SERVICES (11.92%)
Bear Stearns Cos., Inc.,
11-02-95 ......................... 5.760 Tier 1 400 399,936
Bear Stearns Cos., Inc.,
11-22-95 ......................... 5.750 Tier 1 1,700 1,694,298
Goldman Sachs Group, L.P.,
11-02-95 ......................... 5.720 Tier 1 2,000 1,999,682
Goldman Sachs Group, L.P.,
11-20-95 ......................... 5.730 Tier 1 1,300 1,296,069
Merrill Lynch & Co., Inc.,
11-06-95 ......................... 5.730 Tier 1 800 799,363
Merrill Lynch & Co., Inc.,
11-15-95 ......................... 5.750 Tier 1 485 483,916
Merrill Lynch & Co., Inc.,
11-20-95 ......................... 5.750 Tier 1 2,300 2,293,020
----------
8,966,284
----------
BUILDING SUPPLIES (0.66%)
Halifax Building Society,
11-06-95 ......................... 5.750 Tier 1 500 499,601
----------
FINANCE (8.58%)
American Honda Finance Corp.,
11-01-95 ......................... 5.800 Tier 1 900 900,000
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

8
<PAGE> 290
<TABLE>
<CAPTION>
PAR VALUE
INTEREST QUALITY (000'S
ISSUER, DESCRIPTION RATE RATINGS(*) OMITTED) VALUE
- ------------------- -------- ---------- --------- -----
<S> <C> <C> <C> <C>
FINANCE (CONTINUED)
American Honda Finance Corp.,
11-06-95 ............................. 5.800% Tier 1 $ 700 $ 699,436
American Honda Finance Corp.,
11-15-95 ............................. 5.800 Tier 1 1,300 1,297,068
American Honda Finance Corp.,
12-08-95 ............................. 5.780 Tier 1 1,600 1,590,495
General Electric Capital Corp.,
11-14-95 ............................. 5.730 Tier 1 1,500 1,496,896
International Business Machines,
11-13-95 ............................. 5.730 Tier 1 470 469,102
----------
6,452,997
----------
MORTGAGE BANKING (5.57%)
Countrywide Funding Corp.,
11-01-95 ............................. 5.770 Tier 1 1,000 1,000,000
Countrywide Funding Corp.,
11-10-95 ............................. 5.780 Tier 1 1,300 1,298,122
Countrywide Funding Corp.,
11-17-95 ............................. 5.800 Tier 1 1,900 1,895,102
----------
4,193,224
----------
RETAIL STORES (11.54%)
Melville Corp.,
11-13-95 ............................. 5.740 Tier 1 3,000 2,994,260
Melville Corp.,
11-13-95 ............................. 5.750 Tier 1 500 499,042
Melville Corp.,
11-16-95 ............................. 5.770 Tier 1 700 698,317
Sears Roebuck Acceptance Corp.,
11-06-95 ............................. 5.760 Tier 1 1,200 1,199,040
Sears Roebuck Acceptance Corp.,
11-10-95 ............................. 5.750 Tier 1 2,700 2,696,119
Sears Roebuck Acceptance Corp.,
12-06-95 ............................. 5.750 Tier 1 600 596,646
----------
8,683,424
----------
UTILITIES - ELECTRIC (10.61%)
Pacific Gas and Electric Co.,
11-07-95 ............................. 5.720 Tier 1 500 499,523
Pennsylvania Power & Light Co.,
11-07-95 ............................. 5.850 Tier 1 1,000 999,025
Pennsylvania Power & Light Co.,
11-08-95 ............................. 5.850 Tier 1 2,000 1,997,725
Public Service Electric and Gas Co.,
11-09-95 ............................. 5.770 Tier 1 2,200 2,197,179
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

9
<PAGE> 291
<TABLE>
<CAPTION>
PAR VALUE
INTEREST QUALITY (000'S
ISSUER, DESCRIPTION RATE RATINGS(*) OMITTED) VALUE
- ------------------- -------- ---------- --------- -----
<S> <C> <C> <C> <C>
UTILITIES - ELECTRIC (CONTINUED)
Public Service Electric and Gas Co.,
11-15-95.............................. 5.750% Tier 1 $ 1,400 $ 1,396,870
Public Service Electric and Gas Co.,
11-28-95.............................. 5.760 Tier 1 900 896,112
-----------
7,986,434
-----------
UTILITIES - TELEPHONE (8.00%)
American Telephone & Telegraph Co.,
11-01-95.............................. 5.860 Tier 1 220 220,000
American Telephone & Telegraph Co.,
11-13-95.............................. 5.720 Tier 1 3,000 2,994,280
GTE Northwest Inc.,
11-15-95.............................. 5.720 Tier 1 1,010 1,007,753
GTE Northwest Inc.,
11-16-95.............................. 5.740 Tier 1 1,800 1,795,695
-----------
6,017,728
-----------
TOTAL COMMERCIAL PAPER
(Cost $46,988,126) (62.44%) 46,988,126
------- -----------

NEGOTIABLE BANK CERTIFICATES OF DEPOSIT
BANKING (3.98%)
Morgan Guaranty Trust Co., NY
10-30-96.............................. 6.000 Tier 1 3,000 3,000,000
-----------
TOTAL NEGOTIABLE BANK
CERTIFICATES OF DEPOSIT
(Cost $3,000,000) (3.98%) 3,000,000
------- -----------
CORPORATE INTEREST BEARING OBLIGATIONS
AUTOMOTIVE (2.95%)
General Motors Acceptance Corp.,
04-04-96.............................. 8.800 Tier 1 1,200 1,212,102
General Motors Acceptance Corp.,
04-10-96.............................. 8.700 Tier 1 1,000 1,010,235
-----------
2,222,337
-----------
BANKING (6.84%)
NationsBank of Texas,
08-28-96.............................. 6.150 Tier 1 2,300 2,300,000
NBD Bancorp, Inc.,
06-03-96.............................. 6.125 Tier 1 250 250,115
PNC Bank NA,
09-18-96.............................. 5.650 Tier 1 2,600 2,595,663
-----------
5,145,778
-----------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

10
<PAGE> 292
<TABLE>
<CAPTION>
PAR VALUE
INTEREST QUALITY (000'S
ISSUER, DESCRIPTION RATE RATINGS(*) OMITTED) VALUE
- ------------------- -------- ---------- --------- -----
<S> <C> <C> <C> <C>
CHEMICAL (2.67%)
duPont (E.I.) de Nemours & Co.,
12-15-95.................................... 8.480% Tier 1 $ 2,000 $ 2,005,493
-----------
DIVERSIFIED (1.34%)
General Electric Co.,
05-01-96.................................... 7.875 Tier 1 1,000 1,009,754
-----------
FINANCE (4.95%)
Associates Corp. of North America,
03-01-96.................................... 8.800 Tier 1 2,700 2,724,233
General Electric Capital Corp.,
11-15-95.................................... 5.250 Tier 1 1,000 999,492
-----------
3,723,725
-----------
TOTAL CORPORATE INTEREST
BEARING OBLIGATIONS
(Cost $14,107,087) (18.75%) 14,107,087
------- -----------
U. S. GOVERNMENT OBLIGATIONS
GOVERNMENTAL - U. S. AGENCIES (13.29%)
Federal Farm Credit Bank,
11-01-95.................................... 5.730 Tier 1 10,000 10,000,000
-----------
TOTAL U. S. GOVERNMENT OBLIGATIONS
(Cost $10,000,000) (13.29%) 10,000,000
------- -----------
JOINT REPURCHASE AGREEMENT
Investment in a joint repurchase agreement
transaction with SBC Capital Markets -
Dated 10-31-95, Due 11-01-95 (secured
by U.S. Treasury Bond, 8.750%
Due 05-15-17, and by U.S. Treasury
Note, 5.750% Due 09-30-97) Note A........... 5.890 653 653,000
-----------
TOTAL JOINT REPURCHASE AGREEMENT
(Cost $653,000) (0.87%) 653,000
------- -----------
TOTAL INVESTMENTS (99.33%) $74,748,213
======= ===========
</TABLE>

* Quality ratings indicate the categories of eligible securities, as defined by
Rule 2a-7 of the U.S. Securities and Exchange Commission, owned by the Fund.
The percentage shown for each investment category is the total value of that
category expressed as a percentage of total net assets of the Fund.

SEE NOTES TO FINANCIAL STATEMENTS.

11
<PAGE> 293
NOTES TO FINANCIAL STATEMENTS

JOHN HANCOCK FUNDS - MONEY MARKET FUND

NOTE A --
ACCOUNTING POLICIES

John Hancock Series, Inc. (Corporation) is a diversified, open-end management
investment company, registered under the Investment Company Act of 1940, as
amended. The Corporation consists of six series portfolios: John Hancock Money
Market Fund (the "Fund"), John Hancock Emerging Growth Fund, John Hancock Global
Resources Fund, John Hancock High Yield Tax Free Fund, John Hancock High Yield
Bond Fund and John Hancock Government Income Fund (collectively, the "Funds").
The Board of Directors may authorize the creation of additional Funds from time
to time to satisfy various investment objectives. Effective December 22, 1994
(see Note B), the Corporation and Funds changed names by replacing the word
Transamerica with John Hancock. Prior to September 12, 1995, the Fund was known
as John Hancock Money Market Fund B.

The Board of Directors have authorized the issuance of multiple classes of
shares of the Fund, designated as Class A, Class B and Class S 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 Board
of Directors, 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. No
Class S shares had been issued as of October 31, 1995. Significant accounting
policies of the Fund are as follows:

VALUATION OF INVESTMENTS The Board of Directors have determined appropriate
methods for valuing portfolio securities. Accordingly, portfolio securities are
valued at amortized cost, in accordance with Rule 2a-7 of the Investment Company
Act of 1940, which approximates market value. The amortized cost method involves
valuing a security at its cost on the date of purchase and thereafter assuming a
constant amortization to maturity of the difference between the principal amount
due at maturity and the cost of the security to the Fund. Interest income on
certain portfolio securities such as negotiable bank certificates of deposit and
interest bearing notes is accrued daily and included in interest receivable.

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 for both financial
reporting and federal income tax purposes.

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. It
will not be subject to Federal income tax on taxable earnings which are
distributed to shareholders.

DIVIDENDS The Fund records all distributions to shareholders from net investment
income on the ex-dividend date. Such distributions are determined in conformity
with income tax regulations, which may differ from generally accepted accounting
principles. 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 Corporation 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 Fund.

CLASS ALLOCATIONS Income, common expenses and realized and unrealized gains
(losses) are calculated at the Fund level and allocated daily

12
<PAGE> 294
NOTES TO FINANCIAL STATEMENTS

JOHN HANCOCK FUNDS - MONEY MARKET FUND

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.

NOTE B --
MANAGEMENT FEE, ADMINISTRATIVE SERVICES AND TRANSACTIONS WITH AFFILIATES AND
OTHERS

On December 22, 1994, the Adviser became the investment adviser for the Fund
with approval of the Board of Directors and shareholders of the Fund. The Fund's
former investment manager was Transamerica Fund Management Company ("TFMC").

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) 0.50% of the first $500,000,000 of the Fund's
average daily net asset value, (b) 0.425% of the next $250,000,000 and (c)
0.375% of the Fund's average daily net asset value in excess of $750,000,000.
This fee structure is consistent with the former agreement with TFMC. For the
period ended October 31, 1995, the advisory fee earned by the Adviser and TFMC
amounted to $221,171 and $50,611, respectively, resulting in a total fee of
$271,782.

TFMC, for its respective period, provided administrative services to the
Fund pursuant to an administrative service agreement through January 16, 1995 on
which day the agreement was terminated.

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.

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, formerly TFD, 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
October 31,1995, contingent deferred sales charges amounted to $969,561.

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 shares 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
0.15% of Class A average daily net assets and 1.00% of Class B average daily net
assets. As of October 27, 1995, the Fund has temporarily limited the
distribution and service fees attributable to Class B shares to 0.90% of average
daily net assets. Under the amended Rules of Fair Practice, curtailment of a
portion of the Fund's 12b-1 payments could occur under certain circumstances.
This fee structure and plan is similar to the former arrangement with TFD.

13
<PAGE> 295
NOTES TO FINANCIAL STATEMENTS

JOHN HANCOCK FUNDS - MONEY MARKET FUND

Services. Prior to this date The Shareholder Services Group was the transfer
agent. The Fund will pay Investor Services a fee based on transaction volume and
number of shareholder accounts.

A partner with Baker & Botts was an officer of the Trust until December 22,
1994. During the period ended October 31, 1995, legal fees paid to Baker & Botts
amounted to $688.

Mr. Edward J. Boudreau, Jr. is a director and officer of the Adviser and
its affiliates as well as Director of the Fund. The compensation of unaffiliated
Directors is borne by the Fund. Effective with the fees paid for 1995, the
unaffiliated Directors may elect to defer 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 in
other assets. 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.

The Fund has an independent advisory board composed of certain retired
Directors who provide advice to the current Board of Directors in order to
facilitate a smooth management transition. The Fund pays the advisory board and
its counsel a fee.

NOTE C --
INVESTMENT TRANSACTIONS

Purchases and proceeds from sales and maturities, including discount earned on
investment securities, other than obligations of the U.S. government and its
agencies, for the period ended October 31, 1995 aggregated $2,620,334,872 and
$2,536,962,220, respectively. Purchases and proceeds from maturities of
obligations of the U.S. government and its agencies for the period ended October
31, 1995, aggregated $80,835,727 and $90,184,471, respectively. The cost of
investments owned at October 31, 1995 for Federal income tax purposes was
$74,748,213.

NOTE D --
PLAN OF REORGANIZATION

On November 15, 1995, the shareholders of John Hancock Cash Management Fund
("CMF") approved a plan of reorganization between CMF and the Fund providing for
the transfer of substantially all of the assets and liabilities of CMF to the
Fund in exchange solely for Class A shares of the Fund to be distributed to
CMF's Class A shareholders, receptively.

14
<PAGE> 296
JOHN HANCOCK FUNDS - MONEY MARKET FUND

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

To the Board of Directors and Shareholders of
John Hancock Series, Inc. --
John Hancock Money Market Fund

We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of the John Hancock Money Market Fund (the "Fund"),
(formerly the Transamerica Money Market Fund B), one of the portfolios
constituting John Hancock Series, Inc. (formerly Transamerica Series, Inc.) as
of October 31, 1995, and the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the periods
indicated therein. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.

We conducted our audits in accordance with generally accepted accounting
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1995, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of the
John Hancock Money Market Fund portfolio of John Hancock Series, Inc., at
October 31, 1995, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended,
and the financial highlights for each of the indicated periods, in conformity
with generally accepted accounting principles.

ERNST & YOUNG LLP

Boston, Massachusetts
December 15, 1995

TAX INFORMATION NOTICE (UNAUDITED)

For Federal income tax purposes, the following information is furnished with
respect to the dividends of the Fund during its fiscal year ended October 31,
1995. All of the dividends paid for the fiscal year are taxable as ordinary
income. None of the 1995 dividends qualify for the dividends received deduction
available to corporations.

Shareholders will be mailed 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 calendar year 1995.

15
<PAGE> 297

FINANCIAL STATEMENTS

John Hancock Funds - Emerging Growth Fund

<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1995
- --------------------------------------------------------------------------------
<S> <C>
ASSETS:
Investments at value - Note C:
Common stocks and warrants (cost - $315,147,300) .......... $ 560,712,711
Joint repurchase agreement (cost - $13,738,000) ........... 13,738,000
Corporate savings account ................................. 477,189
-------------
574,927,900
Receivable for shares sold ................................. 1,051,401
Receivable for investments sold ............................ 1,112,500
Dividends receivable ....................................... 153,011
Interest receivable ........................................ 2,372
Other assets ............................................... 40,603
-------------
Total Assets ............................. 577,287,787
-----------------------------------------------------------
LIABILITIES:
Payable for shares repurchased ............................. 111,403
Payable for investments purchased .......................... 3,706,000
Payable to John Hancock Advisers, Inc. and
affiliates - Note B ...................................... 386,877

Accounts payable and accrued expenses ...................... 124,750
-------------
Total Liabilities ........................ 4,329,030
-----------------------------------------------------------
NET ASSETS:
Capital paid-in ............................................ 333,863,246
Accumulated net realized loss on investments ............... (6,469,900)
Net unrealized appreciation of investments ................. 245,565,411
-------------
Net Assets ............................... $ 572,958,757
===========================================================
NET ASSET VALUE PER SHARE:
(Based on net assets and shares of beneficial
interest outstanding - 125,000,000 shares
authorized with $.01 per share par value, respectively)
Class A - $179,481,007/4,973,680 ........................... $ 36.09
=============================================================================
Class B - $393,477,750/11,309,413 .......................... $ 34.79
=============================================================================
MAXIMUM OFFERING PRICE PER SHARE*
Class A - ($36.09 x 105.26%) ............................... $ 37.99
=============================================================================
</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 FOR THE PERIOD
STATED.

<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS YEAR ENDED
October 31, 1995
- --------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Dividends .............................................. $ 2,174,731
Interest ............................................... 403,533
-------------
2,578,264
-------------
Expenses:
Investment management fee - Note B .................... 3,474,999
Distribution/service fee - Note B
Class A ............................................. 357,908
Class B ............................................. 3,140,608
Transfer agent fee .................................... 1,140,068
Registration and filing fees .......................... 155,596
Custodian fee ......................................... 153,848
Printing .............................................. 98,467
Auditing fee .......................................... 63,340
Trustees' fees ........................................ 49,191
Legal fees ............................................ 38,145
Advisory board fee .................................... 34,540
Miscellaneous ......................................... 28,284
-------------
Total Expenses ....................... 8,734,994
-----------------------------------------------------------
Net Investment Loss .................. (6,156,730)
-----------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments sold .................. 10,693,222
Change in net unrealized appreciation/depreciation
of investments ....................................... 134,216,496
-------------
Net Realized and Unrealized
Gain on Investments .................. 144,909,718
-----------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations ............ $ 138,752,988
===========================================================
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

9
<PAGE> 298
FINANCIAL STATEMENTS

John Hancock Funds - Emerging Growth Fund

<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
YEAR ENDED OCTOBER 31,
--------------------------------------
1995 1994
------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment loss ............................................................ $ (6,156,730) $ (4,439,725)
Net realized gain (loss) on investments sold ................................... 10,693,222 (8,817,307)
Change in net unrealized appreciation/depreciation of investments .............. 134,216,496 27,047,214
------------- -------------
Net Increase in Net Assets Resulting from Operations .......................... 138,752,988 13,790,182
------------- -------------
FROM FUND SHARE TRANSACTIONS -- NET* ............................................. 19,718,122 99,950,356
------------- -------------
NET ASSETS:
Beginning of period ............................................................ 414,487,647 300,747,109
------------- -------------
End of period .................................................................. $ 572,958,757 $ 414,487,647
============= =============
</TABLE>

* Analysis of Fund Share Transactions:

<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
-------------------------------------------------------------------------------
1995 1994
----------------------------------- -----------------------------------
CLASS A SHARES AMOUNT SHARES AMOUNT
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Shares sold .............................. 5,389,301 $ 177,314,439 4,169,752 $ 107,936,683
Less shares repurchased .................. (5,302,592) (171,990,271) (2,421,719) (62,106,008)
------------- ------------- ------------- -------------
Net increase ............................. 86,709 $ 5,324,168 1,748,033 $ 45,830,675
============= ============= ============= =============
CLASS B
Shares sold .............................. 7,378,294 $ 212,291,363 10,731,824 $ 265,135,236
Less shares repurchased .................. (6,952,481) (197,897,409) (8,513,937) (211,015,555)
------------- ------------- ------------- -------------
Net increase ............................. 425,813 $ 14,393,954 2,217,887 $ 54,119,681
============= ============= ============= =============
</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 YEAR. THE DIFFERENCE REFLECTS
EARNINGS LESS EXPENSES, ANY INVESTMENT 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 VALUE.

SEE NOTES TO FINANCIAL STATEMENTS.

10
<PAGE> 299
FINANCIAL STATEMENTS

John Hancock Funds - Emerging Growth Fund

FOR THE PERIOD
AUGUST 22, 1991
(COMMENCEMENT
YEAR ENDED OCTOBER 31, OF OPERATIONS)
------------------------------------------------------- OCTOBER 31,
1995(b) 1994 1993 1992 1991
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
CLASS A
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period .................. $ 26.82 $ 25.89 $ 20.60 $ 19.26 $ 18.12
----------- ----------- ----------- ----------- -----------
Net Investment Loss (a) ............................... (0.25) (0.18) (0.16) (0.20) (0.03)
Net Realized and Unrealized Gain on Investments ....... 9.52 1.11 5.45 1.60 1.17
----------- ----------- ----------- ----------- -----------
Total from Investment Operations ..................... 9.27 0.93 5.29 1.40 1.14
----------- ----------- ----------- ----------- -----------
Less Distributions
Distributions from Net Realized Gain on
Investments Sold .................................... -- -- -- (0.06) --
----------- ----------- ----------- ----------- -----------
Net Asset Value, End of Period ........................ $ 36.09 $ 26.82 $ 25.89 $ 20.60 $ 19.26
=========== =========== =========== =========== ===========
Total Investment Return at Net Asset Value (c) ........ 34.56% 3.59% 25.68% 7.32% 6.29%(d)

RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's Omitted) ............. $ 179,481 $ 131,053 $ 81,263 $ 46,137 $ 38,859
Ratio of Expenses to Average Net Assets ............... 1.38% 1.44% 1.40% 1.67% 0.33%*
Ratio of Net Investment Loss to Average Net Assets .... (0.83)% (0.71)% (0.70)% (1.03)% (0.15)%*
Portfolio Turnover Rate ............................... 23% 25% 29% 48% 66%
</TABLE>

THE FINANCIAL HIGHLIGHTS SUMMARIZES THE IMPACT OF THE FOLLOWING FACTORS ON A
SINGLE SHARE FOR THE PERIOD INDICATED: INCOME, EXPENSES, DISTRIBUTIONS AND GAINS
(LOSSES) 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.

11
<PAGE> 300
FINANCIAL STATEMENTS

John Hancock Funds - Emerging Growth Fund

PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ................... $ 26.04 $ 25.33 $ 20.34 $ 19.22 $ 11.06
----------- ----------- ----------- ----------- -----------

Net Investment Loss (a) ................................ (0.45) (0.36) (0.36) (0.38) (0.30)
Net Realized and Unrealized Gain on Investments ........ 9.20 1.07 5.35 1.56 8.46
----------- ----------- ----------- ----------- -----------
Total from Investment Operations ...................... 8.75 0.71 4.99 1.18 8.16
----------- ----------- ----------- ----------- -----------
Less Distributions
Distributions from Net Realized Gain on Investments Sold -- -- -- (0.06) --
----------- ----------- ----------- ----------- -----------
Net Asset Value, End of Period ......................... $ 34.79 $ 26.04 $ 25.33 $ 20.34 $ 19.22
=========== =========== =========== =========== ===========
Total Investment Return at Net Asset Value (c) ......... 33.60% 2.80% 24.53% 6.19% 73.78%
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's Omitted) .............. $ 393,478 $ 283,435 $ 219,484 $ 86,923 $ 52,743
Ratio of Expenses to Average Net Assets ................ 2.11% 2.19% 2.28% 2.64% 2.85%
Ratio of Net Investment Loss to Average Net Assets ..... (1.55)% (1.46)% (1.58)% (1.99)% (1.83)%
Portfolio Turnover Rate ................................ 23% 25% 29% 48% 66%
</TABLE>

* On an annualized basis.
(a) On average month end shares outstanding.
(b) On December 22, 1994, John Hancock Advisers, Inc. became the investment
adviser of the Fund.
(c) Total investment return assumes dividend reinvestment and does not reflect
the effect of sales charge.
(d) Not annualized.

SEE NOTES TO FINANCIAL STATEMENTS.

12
<PAGE> 301
FINANCIAL STATEMENTS

John Hancock Funds - Emerging Growth Fund

THE SCHEDULE OF INVESTMENTS IS A COMPLETE LIST OF ALL SECURITIES OWNED BY THE
EMERGING GROWTH FUND ON OCTOBER 31, 1995. IT'S DIVIDED INTO TWO MAIN
CATEGORIES:COMMON STOCKS AND WARRANTS AND SHORT-TERM INVESTMENTS. COMMON STOCKS
ARE FURTHER BROKEN DOWN BY INDUSTRY GROUP. SHORT-TERM INVESTMENTS, WHICH
REPRESENT THE FUND'S "CASH" POSITION, ARE LISTED LAST.

<TABLE>
SCHEDULE OF INVESTMENTS
October 31, 1995
- --------------------------------------------------------------------------------
<CAPTION>
MARKET
ISSUER, DESCRIPTION NUMBER OF SHARES VALUE
- ------------------- ---------------- -----
<S> <C> <C>
COMMON STOCKS
ADVERTISING (0.32%)
Catalina Marketing Corp.** ................ 27,000 $1,363,500
Katz Media Group ** ....................... 25,000* 450,000
----------
1,813,500
----------
AUTOMOBILE/TRUCK (0.73%)
APS Holding Corp. (Class A) ** ............ 10,000 205,000
Copart, Inc. ** ........................... 50,000 1,137,500
Detroit Diesel Corp. ** ................... 20,000 355,000
Discount Auto Parts, Inc. ** .............. 30,000 802,500
Edelbrock Corp. ** ........................ 10,000 152,500
Pep Boys - Manny, Moe & Jack .............. 20,000 437,500
Rollins Truck Leasing Corp. ............... 22,500 216,562
Stewart & Stevenson Services, Inc. ........ 15,000 341,250
Thompson PBE, Inc. ** ..................... 30,000* 547,500
----------
4,195,312
----------
BANKS (0.03%)
Hibernia Corp. (Class A) ** ............... 15,000 148,125
----------
BEVERAGES (0.06%)
Pepsi-Cola Puerto Rico
Bottling Co. (Class B) .................. 25,000* 340,625
----------
BROADCASTING (1.28%)
American Radio Systems Corp. ** ........... 1,300* 29,250
Clear Channel Communications, Inc. ** ..... 30,075 2,466,150
E-Z Communications, Inc. (Class A) ** ..... 10,000 162,500
Gaylord Entertainment Co. (Class A) ....... 27,300 702,975
Heftel Broadcasting Corp. (Class A) ** .... 125,000 2,281,250
Lodgenet Entertainment Corp. ** ........... 5,000 57,500
SFX Broadcasting, Inc. (Class A) ** ....... 40,000 1,080,000
United International
Holdings, Inc. (Class A)** .............. 6,400 100,800
Westcott Communications, Inc. ** .......... 20,000* 275,000
Young Broadcasting Corp. (Class A) ** ..... 5,100* 155,550
----------
7,310,975
----------
BUILDING PRODUCTS (0.06%)
NCI Building Systems, Inc. ** ............ 15,000 348,750
----------
CHEMICAL (0.22%)
Arcadian Corp. ** ......................... 50,000* 1,031,250
Mallinckrodt Group, Inc. .................. 6,000 208,500
----------
1,239,750
----------
COMPUTERS (24.71%)
Adaptec, Inc. ** .......................... 110,000 $4,895,000
Adobe Systems, Inc. ....................... 70,000 3,990,000
Alantec Corp. ** .......................... 7,500 268,125
American Business Information, Inc. ** .... 7,500 131,250
Applied Voice Technology, Inc. ** ......... 35,000* 406,875
Applix, Inc. ** ........................... 8,000* 222,000
ArcSys, Inc. ** ........................... 2,500* 105,000
Aspen Technology, Inc. ** ................. 5,000 137,500
Astea International, Inc. ** .............. 10,000* 180,000
Auspex Systems, Inc.** .................... 5,000 70,625
Autodesk, Inc. ............................ 29,000 986,000
Bann Co., N.V. ** ......................... 10,000* 425,000
Banyan Systems, Inc.** .................... 25,000 195,312
Bay Networks, Inc. ** ..................... 50,000 3,312,500
BDM International, Inc. ** ................ 10,000* 250,000
Bell & Howell Holdings Co. ** ............ 25,000* 625,000
BISYS Group, Inc. (The)** ................. 41,835* 1,171,380
BMC Software, Inc.** ...................... 34,000 1,211,250
Broderbund Software, Inc. ** .............. 19,000 1,318,125
Cabletron Systems, Inc.** ................. 22,500 1,769,062
Cadence Design Systems, Inc.** ............ 112,544 3,629,528
C*ATS Software, Inc. ** ................... 4,000* 29,500
Cerner Corp. ** ........................... 40,000 1,060,000
CFI ProServices, Inc. ** .................. 35,000 476,875
Cheyenne Software, Inc.** ................. 22,000 459,250
Computer Management Sciences, Inc. ** ..... 10,000* 205,000
Computron Software, Inc. ** ............... 7,500* 127,500
Compuware Corp. ** ........................ 26,600 605,150
Computervision Corp. ** ................... 100,000* 1,175,000
Concentra Corp. ** ........................ 10,000* 95,000
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

<PAGE> 302
FINANCIAL STATEMENTS

John Hancock Funds - Emerging Growth Fund
<TABLE>
<CAPTION>
MARKET
ISSUER, DESCRIPTION NUMBER OF SHARES VALUE
- ------------------- ---------------- -----
<S> <C> <C>
COMPUTERS (continued)
Conner Peripherals, Inc. ** ................... 25,000* $ 450,000
Continuum, Inc. ** ............................ 75,000 2,953,125
Cornerstone Imaging, Inc. ** .................. 7,000 157,500
Cybex Computer Products Corp. ** .............. 11,500* 235,750
Datalogix International, Inc. ** .............. 10,000* 100,000
Datastream Systems, Inc. ** ................... 20,000* 445,000
Dataware Technologies, Inc. ** ................ 3,000 30,750
Dell Computer Corp. ** ........................ 140,000 6,527,500
Dendrite International, Inc. ** ............... 10,000* 173,750
Diamond Multimedia Systems, Inc. ** ........... 20,000* 590,000
Digital Biometrics, Inc. ** ................... 11,000 68,750
Discreet Logic, Inc. ** ....................... 10,000* 570,000
DST Systems, Inc. ** .......................... 130,000* 2,730,000
Electroglas, Inc. ** .......................... 106,000 7,446,500
Electronic Arts, Inc. ** ...................... 5,000 183,125
EPIC Design Technology, Inc. ** ............... 500 23,000
Expert Software, Inc. ** ...................... 8,000* 166,000
FileNet Corp. ** .............................. 7,000 317,625
Firefox Communications, Inc. ** ............... 3,500* 60,375
Frame Technology Corp. ** ..................... 2,500 69,687
Gateway 2000, Inc. ** ......................... 50,000 1,668,750
General Magic, Inc. ** ........................ 5,000* 63,125
Global Village Communication ** ............... 2,000 34,000
HCIA, Inc. ** ................................. 200* 5,450
HNC Software, Inc. ** ......................... 4,500* 114,750
HPR, Inc. ** .................................. 12,500* 325,000
Hyperion Software Corp. ** .................... 40,000* 1,970,000
Information Resources, Inc. ** ................ 35,000* 380,625
Informix Corp.** .............................. 250,000 7,281,250
Inso Corp. ** (formerly Infosoft
International, Inc.) ........................ 10,000 357,500
Integrated Measurement Systems, Inc. ** ....... 10,000* 135,000
Intuit, Inc. ** ............................... 8,000* 576,000
Kronos, Inc. ** ............................... 21,500 989,000
Lannet Data Communications, Ltd. ** ........... 55,000* 1,581,250
Legato System, Inc. ** ........................ 5,000* 182,500
Logic Works, Inc. ** .......................... 5,000* 76,250
Loronix Information Systems, Inc. ** .......... 265,000 811,563
Madge, N.V. ** ................................ 270,000 11,306,250
MapInfo Corp. ** .............................. 6,000 120,750
Maxis, Inc. ** ................................ 4,000* 177,000
Measurex Corp. ................................ 20,500 630,375
Mercury Interactive Corp. ** .................. 95,000 1,947,500
Micropolis Corp. ** ........................... 96,500 398,063
Minnesota Educational Computing Corp. ** ...... 7,500 232,500
Mustang Software, Inc. ** ..................... 8,000* $ 58,000
National Instruments Corp. ** ................. 6,000* 112,500
NetManage, Inc. ** ............................ 12,000 244,500
Network General Corp.** ....................... 95,000 3,942,500
Norand Corp. ** ............................... 2,500 42,500
Novadigm, Inc. ** ............................. 12,000* 246,000
Oak Technology, Inc. ** ....................... 24,000* 1,314,000
ON Technology Corp. ** ........................ 15,000* 180,000
Open Environment Corp. ** ..................... 20,000* 195,000
OPTi, Inc. ** ................................. 120,000 1,200,000
Parametric Technology Corp.** ................. 70,000 4,681,250
PeopleSoft, Inc. ** ........................... 50,400 4,334,400
Performance Systems International, Inc. ** .... 20,000* 355,000
Phamis, Inc. ** ............................... 5,500* 138,875
Physician Computer Network, Inc. ** ........... 25,000* 171,875
Pinnacle Systems, Inc. ** ..................... 35,000* 1,098,125
PixTech, Inc. ** .............................. 16,500* 162,937
Platinum Technology, Inc. ** .................. 195,000 3,558,750
Policy Management Systems Corp. ** ............ 2,300 108,387
Premenos Technology Corp. ** .................. 12,000* 471,000
PRI Automation, Inc. ** ....................... 27,500 1,017,500
Printronix, Inc. ** ........................... 25,000 475,000
Progress Software Corp.** ..................... 28,500 1,866,750
Project Software & Development, Inc. ** ....... 37,500 993,750
Pure Software, Inc. ** ........................ 5,000* 183,750
Pyxis Corp. ** ................................ 95,000 1,199,375
Quantum Corp. ** .............................. 20,000 347,500
QuickResponse Services, Inc.** ................ 6,000 150,000
Read-Rite Corp. ** ............................ 51,000 1,778,625
Renaissance Solutions, Inc. ** ................ 9,000* 184,500
Seagate Technology, Inc.** .................... 50,000 2,237,500
Security Dynamics Technologies, Inc. ** ....... 10,000* 315,000
Seer Technologies, Inc. ** .................... 27,500* 412,500
Sierra On-Line, Inc. ** ....................... 40,000 1,490,000
Smith Micro Software, Inc. ** ................ 20,000* 245,000
Softdesk, Inc. ** ............................. 40,000 930,000
Software Artistry, Inc. ** .................... 2,500* 41,250
Software Spectrum, Inc. ** .................... 5,000 107,500
SPSS, Inc. ** ................................. 70,000 1,181,250
StorMedia, Inc. ** ............................ 10,000* 460,000
Sybase, Inc.** ................................ 56,000 2,198,000
Symantec Corp. ** ............................. 14,000 340,375
TGV Software, Inc. ** ......................... 3,000* 27,000
3COM Corp.** .................................. 234,770 11,034,190
3D Systems Corp. ** ........................... 2,000* 34,250
Tivoli Systems, Inc. ** ....................... 5,000* 160,625
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

14
<PAGE> 303
FINANCIAL STATEMENTS

John Hancock Funds - Emerging Growth Fund
<TABLE>
<CAPTION>
MARKET
ISSUER, DESCRIPTION NUMBER OF SHARES VALUE
- ------------------- ---------------- -----
<S> <C> <C>
COMPUTERS (continued)
Transaction Systems Architects, Inc. ......
(Class A) ** ............................ 10,000* $ 260,000
Unison Software, Inc. ** .................. 17,500* 218,750
Vantive Corp. ** .......................... 15,000* 240,000
Verity, Inc. ** ........................... 22,500* 826,875
Videoserver, Inc. ** ...................... 4,000* 122,000
Western Digital Corp. ** ................. 35,000 542,500
Wind River Systems ** ..................... 10,000* 270,000
Wonderware Corp. ** ....................... 20,000 635,000
Zebra Technologies Corp. (Class A)** ...... 2,200 130,900
Zilog, Inc. ** ............................ 60,000 2,130,000
------------
141,598,509
------------
COMPUTER SERVICES (1.55%)
America Online, Inc. ** ................... 12,000 960,000
Hogan Systems, Inc. ** .................... 90,000 798,750
Learning Co. (The) ** ..................... 15,000 885,000
NETCOM On-Line Communication
Services, Inc. ** ....................... 10,000* 582,500
7th Level, Inc. ** ........................ 40,000 590,000
Sterling Software, Inc. ** ................ 105,000 4,843,125
Sylvan Learning Systems, Inc. ** .......... 5,600 134,400
VMARK Software, Inc. ** ................... 10,000* 68,750
------------
8,862,525
------------
CONTAINERS (0.03%)
Mobile Mini, Inc. ** ...................... 40,000* 175,000
------------
COSMETICS & TOILETRIES (0.42%)
Maybelline Inc. ........................... 65,006 1,535,767
Playtex Products, Inc. ** ................. 125,000 875,000
------------
2,410,767
------------
DRUGS (1.99%)
ALZA Corp. ** ............................. 24,600 541,200
Big B, Inc. ............................... 10,000 147,500
Centocor, Inc. ** ......................... 35,500 399,375
Chronimed, Inc. ** ........................ 20,000 305,000
Eckerd (Jack) Corp. ** .................... 85,000 3,368,125
Elan Corp., PLC, American
Depositary Receipt, (ADR) ** ............ 5,250 210,656
Martek Biosciences Corp. ** ............... 25,000* 478,125
Mylan Laboratories, Inc. .................. 127,500 2,422,500
North American Vaccine, Inc. ** ........... 40,000 420,000
OraVax, Inc. ** ........................... 25,000* 321,875
Syncor International Corp. ** ............ 16,500 132,000
Teva Pharmaceutical Industries Ltd., ADR .. 10,000* 392,500
Watson Pharmaceuticals, Inc. ** ........... 50,000 2,237,500
------------
11,376,356
------------
ELECTRONICS (9.22%)
American Sensors, Inc. ** ................. 25,000* $ 178,125
ANADIGICS, Inc. ** ........................ 6,350* 141,288
Analog Devices, Inc. ** ................... 20,000* 722,500
Atmel Corp. ** ............................ 100,000 3,125,000
Burr-Brown Corp. ** ....................... 12,500* 406,250
C-Cube Microsystems, Inc. ** .............. 15,000 1,036,875
CIDCO, Inc. ** ............................ 15,200 450,300
Cirrus Logic, Inc. ** ..................... 80,000 3,370,000
Clare (C.P.) Corp. ** ..................... 13,500* 349,312
Exar Corp. ** ............................. 96,000 2,280,000
GaSonics International Corp.** ............ 18,000 594,000
General Instrument Corp. ** ............... 26,000 494,000
Integrated Circuit Systems, Inc. ** ....... 42,500* 576,406
Integrated Silicon Solution, Inc. ** ...... 5,000* 156,563
Itron, Inc. ** ............................ 15,000* 435,000
LAM Research Corp.** ...................... 100,000 6,087,500
Level One Communications, Inc.** .......... 4,500 101,250
Mackie Designs, Inc. ** ................... 5,000* 63,750
Macromedia, Inc. ** ....................... 10,000* 370,000
Mattson Technology, Inc. ** ............... 4,000 88,000
Maxim Integrated Products, Inc. ** ........ 54,000 4,036,500
Megatest Corp. ** ......................... 160,000 4,720,000
Micrel, Inc. ** ........................... 17,500* 398,125
PSC, Inc. ** .............................. 70,000* 717,500
Quickturn Design System, Inc. ** .......... 25,000 259,375
SDL, Inc. ** .............................. 25,000* 637,500
S3, Inc.** ................................ 30,000 513,750
Sonic Solutions, Inc. ** .................. 10,000 81,250
Tektronix, Inc. ........................... 2,000 118,500
TelCom Semiconductor, Inc. ** ............ 5,000* 39,375
Tencor Instruments ** ..................... 195,000 8,311,875
Teradyne, Inc. ** ......................... 220,000 7,342,500
Ultratech Stepper, Inc. ** ................ 30,000 1,200,000
VeriFone, Inc.** .......................... 25,000 675,000
Xilinx, Inc.** ............................ 60,000 2,760,000
------------
52,837,369
----------
ENGINEERING (0.13%)
J. Ray Mcdermott, S. A. ** ................ 50,000* 756,250
----------
FINANCE (3.22%)
ADVANTA Corp. (Class A) ** ................ 7,500 290,625
ADVANTA Corp. (Class B) ................... 6,750 241,313
Alex Brown, Inc. ** ....................... 3,000 146,625
Alliance Capital Management, L.P. ......... 110,000 2,310,000
Bear Stearns Cos., Inc. ................... 4,896 97,311
Capital One Financial Corp. ............... 30,000* 735,000
Capital RE Corp. .......................... 30,000 847,500
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

<PAGE> 304
FINANCIAL STATEMENTS

John Hancock Funds - Emerging Growth Fund
<TABLE>
<CAPTION>
MARKET
ISSUER, DESCRIPTION NUMBER OF SHARES VALUE
- ------------------- ---------------- -----
<S> <C> <C>
FINANCE (CONTINUED)
Concord EFS, Inc. ** ........................ 6,750 $ 232,875
CUC International, Inc. ** .................. 30,000 1,038,750
Donaldson Lufkin & Jenrette, Inc. ........... 20,000* 595,000
Eaton Vance Corp. ........................... 25,000 912,500
Franklin Resources, Inc. .................... 32,000 1,624,000
KBK Capital Corp. ** ........................ 100,000 600,000
Lehman Brothers Holdings, Inc. .............. 25,000* 543,750
Oppenheimer Capital, L.P. ................... 60,000 1,612,500
Price (T. Rowe) & Associates, Inc. .......... 66,000 3,283,500
Raymond James Financial, Inc. ............... 84,750 1,822,125
SEI Corp. ................................... 18,000 382,500
SunAmerica, Inc. ............................ 7,000 435,750
US Order, Inc. ** ........................... 2,500* 37,500
WFS Financial, Inc. ** ...................... 40,000* 665,000
-----------
18,454,124
-----------
FUNERAL SERVICES (0.54%)
Service Corp. International ................. 50,000 2,006,250
Stewart Enterprises, Inc. (Class A) ......... 32,250 1,088,437
-----------
3,094,687
-----------
HEALTHCARE (4.81%)
AHI Healthcare Systems, Inc. ** ............. 25,000* 350,000
American Oncology Resources, Inc. ** ........ 5,500* 192,500
Apogee, Inc. ** ............................. 5,000 43,750
Applied Bioscience International, Inc. ** ... 40,000 255,000
Apria Healthcare Group, Inc. ** ............. 88,200* 1,907,325
Arbor Health Care Co. ** .................... 3,000 51,000
Beverly Enterprises, Inc. ** ................ 25,000 293,750
Cardinal Health, Inc. ....................... 3,750 192,656
Caremark International, Inc. ................ 140,000 2,887,500
Community Care of America, Inc. ** .......... 65,000* 877,500
CorVel Corp. ** ............................. 20,000 640,000
Enterprise Systems, Inc. .................... 4,000* 93,500
Express Scripts, Inc. (Class A) ** .......... 25,000 950,000
Health Care & Retirement Corp. ** ........... 57,100 1,677,312
Health Management Associates, Inc. ..........
(Class A) ** .............................. 25,312 544,219
Health Management Systems, Inc. ** .......... 30,000 960,000
Horizon Healthcare Corp. ** ................. 85,000 1,721,250
Horizon Mental Health Management, Inc. ** ... 5,000* 78,125
Integrated Health Services, Inc. ............ 2,000 45,750
Interim Services, Inc. ** ................... 15,000 446,250
Living Centers Of America, Inc. ** .......... 41,500 1,073,812
Manor Care, Inc. ............................ 37,500 1,228,125
Mariner Health Group, Inc.** ................ 50,000 487,500
MedPartners, Inc. ** ........................ 15,000* 420,000
Mid Atlantic Medical Services ** ............ 20,000* $ 397,500
Multicare Cos., Inc. ** ..................... 50,000 937,500
NovaCare, Inc. ** ........................... 40,000 250,000
OccuSystems, Inc. ** ........................ 15,000* 310,313
OrNda Healthcorp ** ......................... 20,000* 352,500
PhyCor, Inc. ** ............................. 7,875 289,406
Physician Reliance Network ** .............. 10,000* 332,500
Renal Treatment Centers, Inc. ** ............ 15,000 540,000
Summit Care Corp. ** ........................ 40,000 830,000
Sun Healthcare Group, Inc. ** .............. 20,000* 237,500
Surgical Care Affiliates, Inc. .............. 41,000 1,214,625
TheraTx, Inc. ** ............................ 50,000 562,500
Total Renal Care Holdings, Inc. ** .......... 20,000 407,500
Value Health, Inc. ** ....................... 49,750* 1,138,031
Vencor, Inc. ** ............................. 8,437 234,127
Vivra, Inc. ** .............................. 65,000 2,145,000
-----------
27,595,826
-----------
HOTELS & MOTELS (0.44%)
Equity Inns, Inc. ....................... 30,000 352,500
Marcus Corp. ............................ 25,000 865,625
Marriott International, Inc. ............ 10,000 368,750
Primadonna Resorts, Inc. ** ............. 41,000 640,625
Red Lion Hotels, Inc. ** ................ 15,000* 296,250
---------
2,523,750
---------
INSURANCE (5.05%)
ACE, Ltd. ............................... 50,000 1,700,000
Acordia, Inc. ........................... 7,500 206,250
American RE Corp. ....................... 57,000 2,180,250
Berkley (W. R.), Corp. .................. 20,000 865,000
Capital Guaranty Corp. .................. 10,000 221,250
CMAC Investment Corp. ................... 15,000 712,500
Enhance Financial Services
Group, Inc. ........................... 5,000 101,875
Exel Ltd. ............................... 10,500 561,750
Gallagher (Arthur J.) & Co. ............. 15,000 530,625
Guaranty National Corp. ................. 35,000 498,750
HCC Insurance Holdings, Inc.** .......... 27,000 938,250
Hilb, Rogal & Hamilton Co. .............. 10,000 137,500
Horace Mann Educators Corp. ............. 75,000 1,996,875
Insurance Auto Auctions, Inc.** ......... 29,500 199,125
Life Partners Group, Inc. ............... 65,000 1,178,125
Life RE Co. ............................. 5,000 103,750
Maxicare Health Plans, Inc. ** .......... 125,000 2,171,875
MBIA, Inc. .............................. 28,000 1,949,500
Mid Ocean Ltd. .......................... 4,000 141,500
NAC Re Corp. ............................ 30,050 1,055,506
National RE Corp. ....................... 78,000 2,622,750
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

<PAGE> 305
FINANCIAL STATEMENTS

John Hancock Funds - Emerging Growth Fund
<TABLE>
<CAPTION>
MARKET
ISSUER, DESCRIPTION NUMBER OF SHARES VALUE
- ------------------- ---------------- -----
<S> <C> <C>

INSURANCE (continued)
Oxford Health Plans, Inc. ** .............. 10,000 $ 782,500
PacifiCare Health Systems, Inc. ** ........ 5,000 352,500
PartnerRe Holdings, Ltd. .................. 10,000 265,625
Philadelphia Consolidated Holding
Corp. ** ................................ 75,000 1,406,250
Physicians Health Services, Inc. ..........
(Class A) ** ............................ 7,500 249,375
Prudential Reinsurance Holdings, Inc.** ... 12,500* 254,688
PXRE Corp. ................................ 5,000 127,500
RenaissanceRe Holdings, Ltd. .............. 6,500* 176,313

Sierra Health Services, Inc. ** ........... 35,000 1,001,875
TIG Holdings, Inc. ........................ 10,000* 253,750
Transatlantic Holdings, Inc. .............. 17,000 1,145,375
UNUM Corp. ................................ 27,500 1,447,187
Vesta Insurance Group, Inc. ............... 10,000* 403,750
Western National Corp. .................... 75,000* 1,031,250
-----------
28,970,944
-----------
LEISURE & RECREATION (0.66%)
Aztar Corp. ** ............................ 20,000* 162,500
Circus Circus Enterprises, Inc.** ......... 5,050 134,456
Coleman Co., Inc. ** ...................... 5,000 171,250
KingWorld Productions, Inc. ** ............ 25,000* 871,875
Rawlings Sporting Goods Co. ** ............ 10,000* 80,000
Royal Caribbean Cruises Ltd. .............. 40,000 920,000
Trump Hotels & Casino Resorts, Inc. ** .... 85,000* 1,445,000
-----------
3,785,081
-----------
MACHINERY (2.53%)
Asyst Technologies, Inc. ** ............... 20,000 840,000
Bridgeport Machines, Inc. ** .............. 25,000* 437,500
Credence Systems Corp.** .................. 175,000 6,540,625
Duracraft Corp. ** ........................ 9,000 195,750
KLA Instruments Corp. ** .................. 30,000 1,282,500
Novellus Systems, Inc. ** ................. 65,000 4,476,875
Opal, Inc. ** ............................. 15,000* 226,875
Veeco Instruments, Inc. ** ................ 20,000* 480,000
-----------
14,480,125
-----------
MEDICAL/DENTAL (3.66%)
Benson Eyecare Corp. ** ................... 20,000 187,500
BioWhittaker, Inc. ** ..................... 120,000 900,000
Cognex Corp. ** ........................... 42,000* 2,509,500
Cordis Corp. ** ........................... 20,000 2,210,000
EP Technologies, Inc. ** .................. 10,000* 123,750
Forest Laboratories, Inc. ** .............. 10,000 413,750
Gulf South Medical Supply, Inc. ** ........ 20,000 415,000
Haemonetics Corp. ** ...................... 30,000 566,250
HemaSure, Inc. ** ......................... 30,000* 382,500
ICU Medical, Inc. ** ...................... 40,000* $ 510,000
IDEXX Laboratories, Inc. ** ............... 5,000* 203,750
InStent, Inc. ** .......................... 29,500* 497,813
Isolyser Co., Inc. ** ..................... 10,000 178,750
i-STAT Corp. ** ........................... 10,000* 310,000
IVAX Corp. ................................ 32,000 728,000
Liposome Co., Inc. ** ..................... 45,000* 691,875
MAXXIM Medical, Inc. ** ................... 40,000 555,000
MedCath, Inc. ** .......................... 20,000* 470,000
MiniMed, Inc. ** .......................... 60,000* 555,000
Pall Corp. ................................ 6,666 162,484
Patterson Dental, Inc. ** ................. 28,500 712,500
Perrigo Co.** ............................. 60,000 735,000
Rotech Medical Corp. ** ................... 36,000 819,000
Scherer (R.P.) Corp.** .................... 22,000 979,000
Steris Corp. ** ........................... 28,000 945,000
Stryker Corp. ............................. 6,100 275,262
Target Therapeutics, Inc. ** .............. 8,500 658,750
Tecnol Medical Products, Inc. ** .......... 90,000 1,710,000
United Dental Care, Inc. ** ............... 10,000* 305,000
Uromed Corp. ** ........................... 50,000* 531,250
Ventritex, Inc. ** ........................ 15,000 294,375
Vital Signs, Inc. ......................... 25,000* 456,250
-----------
20,992,309
-----------
OFFICE EQUIPMENT & SUPPLIES (0.32%)
Indigo N. V. ** ............................. 45,000* 410,625
Staples, Inc. ** ............................ 54,000 1,437,750
---------
1,848,375
---------
OIL & GAS (4.03%)
Alexander Energy Corp. ** ................... 25,000* 96,875
Anadarko Petroleum Corp. .................... 12,500 542,188
Apache Corp. ................................ 50,000 1,275,000
Baker Hughes, Inc. .......................... 10,000 196,250
Barrett Resources Corp. ** .................. 12,500 290,625
B.J. Services Co. ** ........................ 6,000 141,000
Brown (Tom), Inc. ** ........................ 115,000 1,279,375
Cabot Oil & Gas Corp. (Class A) ** .......... 60,000 802,500
Cairn Energy USA, Inc. ** ................... 52,000 624,000
Camco International, Inc. ................... 20,000* 457,500
Cross Timbers Oil Co. ** .................... 40,000 580,000
Energy Ventures, Inc. ** .................... 40,000* 760,000
Enron Oil & Gas Co. ......................... 65,000 1,300,000
ENSCO International, Inc. ** (formerly
Energy Service Co., Inc.) ................. 20,000 337,500
Falcon Drilling Co., Inc. ** ................ 100,000* 1,037,500
Halliburton Co. ............................. 5,000* 207,500
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

<PAGE> 306
FINANCIAL STATEMENTS

John Hancock Funds - Emerging Growth Fund
<TABLE>
<CAPTION>
MARKET
ISSUER, DESCRIPTION NUMBER OF SHARES VALUE
- ------------------- ---------------- -----
<S> <C> <C>
OIL & GAS (CONTINUED)
Hornbeck Offshore Services, Inc. ** ......... 10,000 $ 146,250
HS Resources, Inc. ** ....................... 10,000* 138,750
Landmark Graphics Corp. ** .................. 10,000 217,500
Mitchell Energy & Development
Corp. (Class B) ........................... 10,000 162,500
Natural Gas Clearinghouse ................... 65,000* 585,000
Newfield Exploration Co. ** ................. 73,000 2,153,500
Noble Affiliates, Inc. ...................... 70,000 1,732,500
Noble Drilling Corp. ** ..................... 15,000* 105,000
Nuevo Energy Co. ** ......................... 80,000 1,770,000
Oceaneering International, Inc.** ........... 23,000 218,500
Parker & Parsley Petroleum Co. .............. 30,000 555,000
PetroCorp, Inc. ** .......................... 20,000 155,000
Pogo Producing Co. .......................... 75,000 1,509,375
Smith International, Inc. ** ................ 50,000 800,000
Snyder Oil Corp. ............................ 19,000 194,750
Stone Energy Corp. ** ....................... 20,000 227,500
Tidewater, Inc. ............................. 10,000 263,750
Tuboscope Vetco International Corp. ** ...... 90,000 528,750
Weatherford International, Inc. ** .......... 70,000 1,688,750
-----------
23,080,188
-----------
PAPER PRODUCTS (0.20%)
Mercer International, Inc. ** .............. 50,000 1,150,000
-----------
POLLUTION CONTROL (0.52%)
GNI Group, Inc. ** .......................... 125,000 875,000
IMCO Recycling, Inc. ........................ 48,500 1,042,750
Safety-Kleen Corp. .......................... 10,000* 153,750
Tetra Tech, Inc. ** ......................... 15,625 339,844
TRC Companies ** ............................ 30,000 176,250
U.S. Filter Corp. ** ........................ 17,500* 406,875
-----------
2,994,469
-----------
PRINTING (0.56%)
Harte-Hanks Communications, Inc. ............ 50,000 1,512,500
International Imaging Materials, Inc. ** .... 35,000 883,750
Mecklermedia Corp. ** ....................... 70,000 822,500
-----------
3,218,750
-----------
PROTECTION (0.46%)
Checkpoint Systems, Inc. ** ................. 5,000* 144,375
First Alert, Inc. ** ........................ 85,000 1,317,500
Koala Corp. ** .............................. 35,000 319,375
Protection One, Inc. ** ..................... 100,000 787,500
Sensormatic Electronics Corp. ............... 2,250 48,094
-----------
2,616,844
-----------
PUBLISHING (0.73%)
Desktop Data, Inc. ** ....................... 10,500* 375,375
Franklin Electronic Publishers, Inc. ** ..... 19,500 806,812
PUBLISHING (CONTINUED)
Readers Digest Association, Inc. (Class A) .. 20,000 $ 1,005,000
Scholastic Corp.** .......................... 32,500 2,006,875
-----------
4,194,062
-----------
REAL ESTATE (3.68%)
Beacon Properties Corp. ................... 10,000 217,500
Camden Property Trust ..................... 30,000 622,500
Cavaliar Homes, Inc. ...................... 25,000* 425,000
Champion Enterprises, Inc. ** ............ 30,000* 776,250
Clayton Homes, Inc. ....................... 112,546 2,954,332
Crescent Real Estate Equities, Inc. ....... 20,300 649,600
Equity Residential Properties Trust ....... 20,000 560,000
Evans Withycombe Residential, Inc. ........ 5,000* 94,375
Factory Stores Of America, Inc. ........... 30,000 577,500
HGI Realty, Inc. .......................... 17,500* 387,188
Highwoods Properties, Inc. ................ 5,000 133,125
Insignia Financial Group, Inc. ............
(Class A) ** ............................ 25,000 675,000
Liberty Property Trust .................... 10,000 202,500
Manufactured Home Communities, Inc. ....... 40,000 660,000
Mid-America Apartment Communities,
Inc ..................................... 25,400 584,200
NHP, Inc. ** .............................. 25,000* 356,250
Oakwood Homes Corp. ....................... 80,000 3,000,000
Oasis Residential, Inc. ................... 20,000 435,000
Post Properties, Inc. ..................... 11,100 333,000
Redman Industries, Inc. ** ................ 170,000 4,420,000
Regency Realty Corp. ...................... 25,000 425,000
RFS Hotel Investors, Inc. ................. 10,000 151,250
ROC Communities, Inc. ..................... 25,000 562,500
Security Capital Industrial Trust ......... 15,000 245,625
Security Capital Pacific Trust ............ 20,000* 357,500
Storage USA, Inc. ......................... 10,400 304,200
Tanger Factory Outlet Centers, Inc. ....... 18,000 423,000
Vornado Realty Trust ...................... 15,000 538,125
----------
21,070,520
----------
RETAIL (12.60%)
ADFlex Solutions, Inc. ** ................. 54,000 1,431,000
AmeriSource Health Corp. ** ............... 75,000* 2,043,750
Apple South, Inc. ......................... 77,062 1,579,771
Applebee's International, Inc.** .......... 25,000 703,125
Arbor Drugs, Inc. ......................... 9,000 166,500
Au Bon Pain Co., Inc. (Class A) ** ........ 5,000 38,125
Barnes & Noble, Inc. ** ................... 11,000 401,500
Bed Bath & Beyond, Inc. ** ................ 60,000 1,875,000
Best Buy Co., Inc.** ...................... 75,000 1,556,250
Blyth Industries, Inc. ** ................. 10,000 505,000
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

<PAGE> 307
FINANCIAL STATEMENTS

John Hancock Funds - Emerging Growth Fund
<TABLE>
<CAPTION>
MARKET
ISSUER, DESCRIPTION NUMBER OF SHARES VALUE
- ------------------- ---------------- -----
<S> <C> <C>
RETAIL (CONTINUED)
Borders Group, Inc. ** .................... 65,000* $ 1,113,125
Brookstone, Inc. ** ....................... 50,000 331,250
Campo Electronics, Appliances and
Computers, Inc. ** ...................... 150,000 693,750
Catherine's Stores Corp. ** ............... 10,000 92,500
Chart House Enterprises, Inc. ** .......... 76,000 522,500
Claire's Stores, Inc. ..................... 9,000 176,625
Consolidated Stores Corp. ** .............. 24,000 555,000
Corporate Express, Inc. ** ................ 25,000 653,125
Creative Computers, Inc. ** ............... 25,000* 725,000
Daisytek International Corp. ** ........... 25,000* 706,250
De Rigo S.p.A., ADR ....................... 13,000* 268,125
Department 56, Inc.** ..................... 20,000 907,500
DF & R Restaurants, Inc. ** ............... 10,000 305,000
Dollar Tree Stores, Inc. ** ............... 1,000* 27,000
Dreyer's Grand Ice Cream, Inc. ............ 15,000 517,500
El Chico Restaurants, Inc. ** ............ 110,000 1,086,250
Ellett Brothers, Inc. ..................... 81,000 617,625
Ethan Allen Interiors, Inc.** ............ 41,000 809,750
Federated Department Stores, Inc. ** ...... 90,000 2,283,750
Fingerhut Cos., Inc. ...................... 16,000 218,000
Franklin Quest Co. ** ..................... 41,000 978,875
Friedman's, Inc. (Class A) ** ............ 10,000 202,500
Gadzooks, Inc. ** ......................... 25,000* 462,500
Garden Ridge Corp. ** ..................... 10,000* 357,500
General Nutrition Cos., Inc. ** ........... 4,000 99,500
Global DirectMail Corp. ** ................ 65,000* 1,771,250
Good Times Restaurants, Inc. ** ........... 120,000 116,244
Gymboree Corp. ** ......................... 22,000 497,750
Hollywood Entertainment Corp.** ........... 10,000 267,500
HomeTown Buffet, Inc. ** .................. 40,000 525,000
IHOP Corp. ** ............................. 130,000 2,795,000
Intimate Brands, Inc. ..................... 40,000* 670,000
Just For Feet, Inc. ** .................... 5,625 132,891
Landry's Seafood Restaurants, Inc. ** ..... 90,000 1,215,000
Little Switzerland, Inc. ** ............... 100,000 375,000
Lone Star Steakhouse & Saloon, Inc. ** .... 13,500 521,437
Media Arts Group, Inc. ** ................. 15,000* 49,688
Men's Wearhouse, Inc. (The) ** ............ 12,750 497,250
Michael's Stores, Inc. ** ................. 50,000 681,250
Moovies, Inc. ** .......................... 15,000 245,625
Movie Gallery, Inc. ** .................... 15,000* 577,500
Neiman Marcus Group, Inc. ................. 30,000* 513,750
Neostar Retail Group, Inc. ** ............ 20,000* 305,000
Nine West Group, Inc. ** .................. 75,000 3,337,500
Oakley, Inc. ** ........................... 10,200* 351,900
Office Depot, Inc.** ...................... 35,009 1,002,133
RETAIL (CONTINUED)
OfficeMax, Inc. ** ........................ 39,300* $ 972,675
Oshman's Sporting Goods, Inc. ** .......... 10,000* 135,000
Outback Steakhouse, Inc. ** ............... 105,000 3,294,375
Papa John's International, Inc. ** ........ 2,500 96,250
PetSmart, Inc.** .......................... 12,000 402,000
Pier 1 Imports, Inc. ...................... 145,750 1,402,844
Quality Dining, Inc. ** ................... 31,000 604,500
Revco D.S., Inc. ** ....................... 205,454 4,879,532
Rite-Aid Corp. ............................ 65,000 1,755,000
Sonic Corp. ** ............................ 64,500 1,419,000
Sports Authority, Inc. (The) ** ........... 21,900* 476,325
Sports & Recreation, Inc. ** .............. 50,000 368,750
Starbucks Corp. ** ........................ 10,000 392,500
Sunglass Hut International, Inc.** ........ 190,000 5,177,500
Talbots, Inc. ............................. 50,000 1,212,500
Tiffany & Co. ............................. 31,000 1,352,375
USA Detergents, Inc. ** ................... 30,000* 765,000
U.S. Delivery Systems, Inc. ** ............ 14,000 290,500
Urban Outfitters, Inc. ** ................. 18,000 391,500
Wall Street Deli, Inc. ** ................. 7,500 50,625
Wendy's International, Inc. ............... 145,000 2,881,875
West Marine, Inc. ** ...................... 45,000 1,372,500
Whole Foods Market, Inc. ** ............... 20,000 245,000
Williams-Sonoma, Inc. ** .................. 12,000 208,500
Zale Corp. ** ............................. 40,000 590,000
-----------
72,195,815
-----------
TELECOMMUNICATIONS (9.18%)
ACC Corp. ................................. 12,000 225,000
ACT Networks, Inc. ** ..................... 12,500* 90,625
ANTEC Corp. ** ............................ 40,000 495,000
Applied Digital Access, Inc. ** ........... 5,000 60,000
Ascend Communications, Inc. ** ............ 148,000 9,620,000
Black Box Corp. ** ........................ 25,000* 406,250
BroadBand Technologies, Inc. ** ........... 25,000 437,500
Checkfree Corp. ** ........................ 15,000* 316,875
Communications Center, Inc. ** ............ 15,000 82,500
DSC Communications Corp.** ................ 17,500 647,500
Equifax, Inc. ............................. 71,500 2,788,500
Geoworks ** ............................... 60,000 1,282,500
Gilat Satellite Networks Ltd.** ........... 2,500* 55,625
HighwayMaster Communications, Inc. ** ..... 75,000* 600,000
International Cabletel, Inc. ** ........... 26,666 706,649
Metrocall, Inc. ** ........................ 41,000 1,025,000
MFS Communications Co., Inc. ** ........... 11,200 452,200
MIDCOM Communications, Inc. ** ............ 50,000* 750,000
MobileMedia Corp. ** ...................... 47,500* 1,246,875
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

19
<PAGE> 308
FINANCIAL STATEMENTS

John Hancock Funds - Emerging Growth Fund
<TABLE>
<CAPTION>
MARKET
ISSUER, DESCRIPTION NUMBER OF SHARES VALUE
- ------------------- ---------------- -----
<S> <C> <C>
TELECOMMUNICATIONS (continued)
Mobile Telecommunications
Technologies Corp. ** ................... 30,000 $ 851,250
NFO Research, Inc. ** ..................... 25,000 568,750
Octel Communication Corp. ** .............. 20,000 682,500
Paging Network, Inc. ** ................... 7,500 172,500
Pairgain Technologies, Inc. ** ............ 45,000* 1,923,750
PriCellular Corp. (Class A) ** ............ 31,250* 406,250
ProNet, Inc. ** ........................... 40,000 1,020,000
QUALCOMM, Inc. ** ......................... 5,000 192,500
Scientific-Atlanta, Inc. .................. 50,000 618,750
Sitel Corp. ** ............................ 10,500* 238,875
Stanford Telecommunications, Inc. ** ...... 11,000 225,500
Tellabs, Inc. ** .......................... 180,000 6,120,000
Telular Corp. ** .......................... 5,000 69,375
Transaction Network Services, Inc. ** ..... 15,000 352,500
US Long Distance Corp. ** ................. 40,000 515,000
U. S. Robotics, Inc. ** ................... 135,000 12,487,500
UUNET Technologies, Inc. ** ............... 3,000* 182,250
WorldCom, Inc. (formerly
LDDS Communications, Inc.)** ............ 127,996 4,175,869
Zoom Telephonics, Inc.** .................. 30,000 487,500
-----------
52,579,218
-----------
TEXTILES (0.52%)
Ashworth, Inc. ** ......................... 25,000 168,750
Cutter & Buck, Inc. ** .................... 30,000* 195,000
Gucci Group, NV ** (Registered Shares) .... 5,000* 150,000
Haggar Corp. .............................. 8,000 132,000
Nautica Enterprises, Inc. ** .............. 60,000 2,055,000
St. John Knits, Inc. ...................... 5,000 239,375
Tandy Brands Accessories, Inc. ** ......... 6,750 48,938
-----------
2,989,063
-----------
TOYS/GAMES/HOBBY PRODUCTS (1.20%)
Acclaim Entertainment, Inc. ** ............ 30,000 708,750
Callaway Golf Co. ......................... 52,000 851,500
Cannondale Corp. ** ....................... 20,200* 323,200
Cobra Golf, Inc. ** ....................... 37,000 962,000
GTECH Holdings Corp.** .................... 10,000 245,000
Happiness Express, Inc. ** ................ 55,000* 288,750
Intergold Ltd. ** ......................... 100,000 126,390
Players International, Inc. ** ............ 169,000 1,816,750
Station Casinos, Inc. ** .................. 110,000 1,430,000
Toy Biz, Inc. ** .......................... 5,000* 111,875
-----------
6,864,215
-----------
TRANSPORTATION (2.17%)
Alaska Air Group, Inc. ** ................. 25,000 371,875
American Medical Response, Inc. ** ........ 10,000* 288,750
TRANSPORTATION (CONTINUED)
Atlantic Southeast Airlines, Inc. ......... 65,000 $ 1,608,750
Comair Holdings, Inc. ..................... 85,950 2,411,972
Continental Airlines, Inc. (Class B) ** ... 10,000 356,250
Fritz Cos., Inc. ** ....................... 11,300* 395,500
Frontier Airlines, Inc. ** ................ 250,000 1,281,250
Greenbrier Cos., Inc. ..................... 20,000 217,500
Mesa Airlines, Inc.** ..................... 100,000 950,000
Northwest Airlines Corp. ** ............... 70,000 2,808,750
Offshore Logistics, Inc. ** ............... 11,500 142,314
Rural/Metro Corp.** ....................... 15,000 360,000
Skywest, Inc. ............................. 20,000 342,500
Southwest Airlines Co. .................... 45,000 900,000
-----------
12,435,411
-----------
UTILITIES (0.03%)
York Research Corp. ** .................... 22,000* 159,500
-----------
COMMON STOCKS
(Cost $315,097,152) .......... 97.86% 560,707,089
----------- -----------

WARRANTS
--------
WARRANTS
Retail (0.00%)
Good Times Restaurants, Inc. ** ......... 60,000 5,622
-----------
TOTAL WARRANTS
(Cost $50,148) .......... 0.00% 5,622
----------- -----------
TOTAL COMMON STOCKS
AND WARRANTS
(Cost $315,147,300) .......... 97.86% 560,712,711
----------- -----------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

<PAGE> 309
FINANCIAL STATEMENTS

John Hancock Funds - Emerging Growth Fund

<TABLE>
<CAPTION>
INTEREST PAR VALUE MARKET
ISSUER, DESCRIPTION RATE (000'S OMITTED) VALUE
- ------------------- ---- --------------- -----
<S> <C> <C>
SHORT-TERM INVESTMENTS
joint repurchase agreement (2.40%)
Investment in a joint repurchase
agreement transaction with
SBC Capital Market, Inc. -
Dated 10-31-95, due 11-01-95
(secured by U.S. Treasury Bond,
8.75%, due 05-15-17 and
U.S. Treasury Note 5.75%
due 09-30-97) - Note A ....... 5.89% $ 13,738 $ 13,738,000
------------
corporate savings account (0.08%)
Investors Bank & Trust Company
Daily Interest Savings Account
Current Rate 3.00% ........... 477,189
------------
TOTAL SHORT-TERM INVESTMENTS . 2.48% 14,215,189
------------ ------------
TOTAL INVESTMENTS . 100.34% $574,927,900
============ ============
</TABLE>

** Securities, other than short-term investments, newly added to the portfolio
during the year ended October 31, 1995

** Non-income producing security.

+ Denotes an affiliated company in which the Fund has ownership of at least 5%
of the voting securities. Investments in affiliates at October 31, 1995 were
as follows:

<TABLE>
<CAPTION>
AFFILIATE COST DIVIDEND INCOME
- --------------------------------- ---------- ---------------
<S> <C> <C>
Frontier Airlines, Inc. $1,133,125 --
Loronix Information Systems, Inc. $1,595,000 --
</TABLE>

The percentage shown for each investment category is the total value of the
category as a percentage of the net assets of the Fund.

SEE NOTES TO FINANCIAL STATEMENTS.

21
<PAGE> 310
NOTES TO FINANCIAL STATEMENTS

John Hancock Funds - Emerging Growth Fund

NOTE A --
ACCOUNTING POLICIES

John Hancock Series, Inc. (the "Corporation") is a diversified, open-end
management investment company, registered under the Investment Company Act of
1940, as amended. The Corporation consists of six series portfolios: John
Hancock Emerging Growth Fund (the "Fund"), John Hancock Global Resources Fund,
John Hancock High Yield Tax Free Fund, John Hancock High Yield Bond Fund, John
Hancock Money Market Fund and John Hancock Government Income Fund (collectively,
the "Funds"). The Board of Directors may authorize the creation of additional
Funds from time to time to satisfy various investment objectives. Effective
December 22, 1994 (see Note B), the Corporation and Funds changed names by
replacing the word Transamerica with John Hancock.

The Board of Directors have authorized the issuance of two classes of shares
of the Fund, designated as Class A and Class B. The shares of each class
represent an interest in the same portfolio of investments of the Fund and have
equal rights to voting, redemption, dividends, and liquidation, except that
certain expenses, subject to the approval of the Board of Directors, 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
the terms of a distribution plan have exclusive voting rights regarding such
distribution plan. Class A Shares are subject to an initial sales charge of up
to 5.00% and a 12b-1 distribution plan. Prior to May 15, 1995, the maximum sales
charge was 5.75%. Class B Shares are subject to a contingent deferred sales
charge and a separate 12b-1 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 Board of Directors. Short-term debt investments maturing within
60 days are valued at amortized cost which approximates market value.

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, resulting
from changes in the exchange rate.

INVESTMENT TRANSACTIONS Investment transactions are recorded as of the date of
purchase, sale or maturity. Net realized gains and

22
<PAGE> 311
NOTES TO FINANCIAL STATEMENTS

John Hancock Funds - Emerging Growth Fund

losses on sales of investments are determined on the identified cost basis for
both financial reporting and federal income tax purposes.

DIVIDENDS, DISTRIBUTIONS AND INTEREST Interest income on investment securities
is recorded on the accrual basis. 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. 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 principles. 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 will
be in the same amount, except for effect of expenses that may be applied
differently to each class as explained previously.

CLASS ALLOCATIONS Income, common expenses and realized and unrealized gains
(losses) are determined 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 appropriated net assets of each class and the specific expense rate(s)
applicable to each class.

NOTE B --
MANAGEMENT FEE, ADMINISTRATIVE SERVICES AND TRANSACTIONS WITH AFFILIATES AND
OTHERS

On December 22, 1994, John Hancock Advisers, Inc. became the investment adviser
for the Fund with approval of the Board of Directors and shareholders of the
Fund. The Fund's former investment manager was Transamerica Fund Management
Company ("TFMC").

Under the present investment management contract, the Fund pays a monthly
management fee to the Adviser for a continuous investment program equivalent, to
0.75% of the Fund's average daily net assets. This fee structure is consistent
with the former agreement with TFMC. For the period ended October 31, 1995, the
advisory fee earned by the Adviser and TFMC amounted to $2,978,791 and $496,208,
respectively, resulting in a total fee of $3,474,999.

The Adviser and TFMC, for their respective periods, provided administrative
services to the Fund pursuant to an administrative service agreement through
January 16, 1995 on which day the agreement was terminated.

23
<PAGE> 312
NOTES TO FINANCIAL STATEMENTS

John Hancock Funds - Emerging Growth Fund

the Fund. For the period ended October 31, 1995, JH Funds and TFD received net
sales charges of $604,527 with regard to sales of Class A shares. Out of this
amount, $67,705 was retained and used for printing prospectuses, advertising,
sales literature and other purposes, $489,876 was paid as sales commissions to
unrelated broker-dealers and $46,946 was paid as sales commissions to sales
personnel of John Hancock Distributors, Inc. ("Distributors"), Tucker Anthony,
Incorporated ("Tucker Anthony") and Sutro & Co., Inc. ("Sutro"). 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 Tucker Anthony and Sutro, all of which are
broker-dealers.

Class B shares which are redeemed within six years of purchase will be
subject to a contingent deferred sales charge ("CDSC") at declining rates
beginning at 5.0% of the lesser of the current market value at the time of
redemption or the original purchase cost of the shares being redeemed. Proceeds
from the CDSC are paid to JH Funds, formerly TFD, 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
October 31, 1995, contingent deferred sales charges amounted to $934,403.

In addition, to compensate JH Funds for the services it provides as
distributor of shares of the Fund, the Fund has adopted a Distribution Plan with
respect to Class A and Class B shares pursuant to Rule 12b-1 under the
Investment Company Act of 1940. Accordingly, the Fund will make payments for
distribution and service expenses which in total will not exceed on an annual
basis 0.25% of the Fund's average daily net assets attributable to Class A
shares and 1.00% (0.90% effective December 1, 1995) of the Fund's average daily
net assets attributable to Class B shares, to reimburse JH Funds for its
distribution/service costs. Up to a maximum of 0.25% of such payments may be
service fees as defined by the amended Rules of Fair Practice of the National
Association of Securities Dealers. Under the amended Rules of Fair Practice,
curtailment of a portion of the Fund's 12b-1 payments could occur under certain
circumstances. In order to comply with this rule, the 12b-1 fee on Class B
shares was decreased to 0.95% at various times during the fiscal year.
This fee structure and plan is similar to the former arrangement with TFD.

The Board of Directors approved a shareholder servicing agreement between the
Fund and John Hancock Investor Services Corporation ("Investor Services"), a
wholly owned subsidiary of The Berkeley Financial Group, for the period between
December 22, 1994 and May 12, 1995, inclusive under which Investor Services
processed telephone transactions on behalf of the Fund. As of May 15, 1995, the
Fund entered into a full service transfer agent agreement with Investor
Services. Prior to this date The Shareholder Services Group was the transfer
agent. The Fund paid Investor Services a fee based on the number of shareholder
accounts and certain out-of-pocket expenses.

A partner with Baker & Botts was an officer of the Corporation until December
22, 1994. During the period ended October 31, 1995, legal fees paid to Baker &
Botts amounted to $4,849.

Mr. Edward J. Boudreau, Jr. is a director and officer of the Adviser and its
affiliates as well as Director of the Corporation. The compensation of
unaffiliated Directors is borne by the Fund. Effective with the fees paid for
1995, the unaffiliated Directors may elect to defer 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.

<PAGE> 313
NOTES TO FINANCIAL STATEMENTS

John Hancock Funds -- Emerging Growth Fund

NOTE C --
INVESTMENT TRANSACTIONS

Purchases and proceeds from sales of securities, other than obligations of the
U.S. government and its agencies and short-term obligations, during the period
ended October 31, 1995 aggregated $110,148,117 and $103,491,275, respectively.
There were no purchases or sales of long-term obligations of the U.S. government
and its agencies during the period ended October 31, 1995.

The cost of investments owned at October 31, 1995 for Federal income tax
purposes was $329,000,920. Gross unrealized appreciation and depreciation of
investments aggregated $262,700,162 and $17,250,371, respectively, resulting in
net unrealized appreciation of $245,449,791.

NOTE D --
RECLASSIFICATION OF CAPITAL ACCOUNTS

During the year ended October 31, 1995, the Fund has reclassified the
accumulated net investment loss in the amount of $6,156,730 to capital paid-in.
This represents the cumulative amount necessary to report these balances on a
tax basis, excluding certain temporary differences, as of October 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.

25
<PAGE> 314
John Hancock Funds - Emerging Growth Fund

REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS
To the Board of Trustees and Shareholders of
John Hancock Series, Inc. --
John Hancock Emerging Growth Fund

We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of the John Hancock Emerging Growth Fund (the
"Fund"), (formerly the Transamerica Emerging Growth Fund), one of the portfolios
constituting John Hancock Series, Inc. (the "Corporation") (formerly
Transamerica Series, Inc.), as of October 31, 1995, and the related statement of
operations for the year then ended, the statements of changes in net assets for
each of the two years in the period then ended, and the financial highlights for
each of the five years in the period then ended. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1995, by correspondence with the custodian and brokers, or other
appropriate auditing procedures when replies from brokers were not received. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
John Hancock Emerging Growth Fund portfolio of John Hancock Series, Inc. at
October 31, 1995, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended,
and the financial highlights for each of the five years in the period then
ended, in conformity with generally accepted accounting principles.

ERNST & YOUNG LLP

Boston, Massachusetts
December 15, 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 October
31, 1995.

The Fund has not paid any distributions of dividends or net realized gains
during the fiscal year.

26
<PAGE> 315
FINANCIAL STATEMENTS

John Hancock Funds - Global Resources Fund
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1995
- --------------------------------------------------------------------------------
<S> <C>
ASSETS:
Investments at value - Note C:
Common stocks and warrants (cost - $27,819,286) ........... $28,363,048
Receivable for shares sold ................................. 902
Receivable for investments sold ............................ 540,732
Dividend receivable ........................................ 11,059
Foreign tax receivable ..................................... 5,029
Miscellaneous receivable ................................... 10,317
Other assets ............................................... 2,881
-----------
Total Assets ............................. 28,933,968
-----------------------------------------------------------
LIABILITIES:
Payable for shares repurchased ............................. 35,221
Temporary overdraft of cash ................................ 103,818
Payable to John Hancock Advisers, Inc. and
affiliates - Note B ...................................... 19,537
Accounts payable and accrued expenses ...................... 49,222
-----------
Total Liabilities ........................ 207,798
-----------------------------------------------------------

NET ASSETS:
Capital paid-in ............................................ 28,604,072
Accumulated net realized loss on investments and
foreign currency transactions .............................. (421,721)
Net unrealized appreciation of investments and
foreign currency transactions ............................ 543,819
-----------
Net Assets ............................... $28,726,170
===========================================================

NET ASSET VALUE PER SHARE:
(Based on net asset values and shares of beneficial
interest outstanding - 75,000,000 shares authorized
with $0.01 per share par value, respectively)
Class A - $2,323,988 / 165,952 ............................. $ 14.00
=============================================================================
Class B - $26,402,182 / 1,905,178 .......................... $ 13.86
=============================================================================
MAXIMUM OFFERING PRICE PER SHARE*
Class A - $(14.00 x 105.26)% ............................... $ 14.74
=============================================================================
</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>
<CAPTION>
STATEMENT OF OPERATIONS
Year Ended October 31, 1995
- --------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes of $28,795) ...... $ 404,349
Interest ..................................................... 40,530
-----------
444,879
-----------
Expenses:
Investment management fee - Note B .......................... 263,434
Distribution/service fee - Note B
Class A ................................................... 8,283
Class B ................................................... 305,777
Transfer agent fee .......................................... 132,727
Custodian fee ............................................... 68,885
Printing .................................................... 43,195
Auditing fee ................................................ 36,134
Registration and filing fees ................................ 34,089
Legal fees .................................................. 8,791
Trustees' fees .............................................. 8,081
Advisory board fee .......................................... 3,848
Miscellaneous ............................................... 3,821
-----------
Total Expenses ............................. 917,065
-----------------------------------------------------------
Net Investment Loss ........................ (472,186)
-----------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Net realized loss on investments sold ........................ (314,860)
Net realized gain on foreign currency transactions ........... 2,682
Change in net unrealized appreciation/depreciation
of investments ............................................. (3,606,930)
Change in net unrealized appreciation/depreciation of
foreign currency transactions .............................. 57
-----------
Net Realized and Unrealized
Loss on Investments and
Foreign Currency Transactions .............. (3,919,051)
-----------------------------------------------------------
Net Decrease in Net Assets
Resulting from Operations .................. $(4,391,237)
===========================================================
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE> 316
FINANCIAL STATEMENTS

John Hancock Funds - Global Resources Fund

<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
YEAR ENDED OCTOBER 31,
----------------------------
1995 1994
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment loss .............................................................................. $ (472,186) $ (441,384)
Net realized loss on investments sold and foreign currency transactions .......................... (312,178) (90,344)
Change in net unrealized appreciation/depreciation of investments and foreign
currency transactions ........................................................................... (3,606,873) 553,900
------------ ------------
Net Increase (Decrease) in Net Assets Resulting from Operations ................................. (4,391,237) 22,172
------------ ------------
FROM FUND SHARE TRANSACTIONS -- NET* ............................................................... (9,191,467) 22,788,288
------------ ------------
NET ASSETS:
Beginning of period .............................................................................. 42,308,874 19,498,414
------------ ------------
End of period .................................................................................... $ 28,726,170 $ 42,308,874
============ ============
* ANALYSIS OF FUND SHARE TRANSACTIONS:
</TABLE>
<TABLE>
<CAPTION>

YEAR ENDED OCTOBER 31,
------------------------------------------------------
1995 1994
------------------------ --------------------------
SHARES AMOUNT SHARES AMOUNT
-------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
CLASS A**
Shares sold ............................................................ 106,612 $ 1,595,642 419,756 $ 6,352,382
Less shares repurchased ................................................ (284,537) (4,070,740) (75,879) (1,159,547)
-------- ------------ ---------- ------------
Net increase (decrease) ................................................ (177,925) $ (2,475,098) 343,877 $ 5,192,835
======== ============ ========== ============
CLASS B
Shares sold ............................................................ 497,933 $ 7,105,217 1,781,599 $ 27,695,930
Less shares repurchased ................................................ (964,221) (13,821,586) (652,737) (10,100,477)
-------- ------------ ---------- ------------
Net increase (decrease) ................................................ (466,288) $ (6,716,369) 1,128,862 $ 17,595,453
======== ============ ========== ============
</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 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> 317
FINANCIAL STATEMENTS

John Hancock Funds - Global Resources Fund

<TABLE>
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:
- ---------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
FOR THE PERIOD
JUNE 15, 1994
YEAR ENDED (COMMENCEMENT OF
OCTOBER 31, OPERATIONS) TO
1995(a) OCTOBER 31, 1994
---------- ----------------
<S> <C> <C>
CLASS A
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ........................................................ $ 15.62 $ 14.89
--------- ---------
Net Investment Loss (b) ..................................................................... (0.08) (0.08)
Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency Transactions .... (1.54) 0.81
--------- ---------
Total from Investment Operations ........................................................... (1.62) 0.73
--------- ---------
Net Asset Value, End of Period .............................................................. $ 14.00 $ 15.62
========= =========
Total Investment Return at Net Asset Value (c) .............................................. (10.37)% 4.90%(d)

RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted) ................................................... $ 2,324 $ 5,372
Ratio of Expenses to Average Net Assets ..................................................... 1.93% 0.73%*
Ratio of Net Investment Loss to Average Net Assets .......................................... (0.53)% (0.42)%*
Portfolio Turnover Rate ..................................................................... 101% 96%
</TABLE>

THE FINANCIAL HIGHLIGHTS SUMMARIZE THE IMPACT OF THE FOLLOWING FACTORS ON A
SINGLE SHARE FOR THE PERIODS INDICATED: THE 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> 318
FINANCIAL STATEMENTS
John Hancock Funds - Global Resources Fund

<TABLE>
FINANCIAL HIGHLIGHTS (continued)
- ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
YEAR ENDED OCTOBER 31,
------------------------------------------------------------------
1995(a) 1994 1993 1992 1991
-------- -------- -------- --------- -----------
<S> <C> <C> <C> <C> <C>
CLASS B
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ..................... $ 15.58 $ 15.69 $ 12.41 $ 12.20 $ 11.57
-------- -------- -------- --------- ----------
Net Investment Loss (b) .................................. (0.21) (0.23) (0.24) (0.24) (0.17)

Net Realized and Unrealized Gain (Loss) on Investments and
Foreign Currency Transactions .......................... (1.51) 0.12 3.52 0.58 1.24
-------- -------- -------- --------- ----------

Total from Investment Operations ........................ (1.72) (0.11) 3.28 0.34 1.07
-------- -------- -------- --------- ----------
Less Distributions
Dividends from Net Investment Income ..................... -- -- -- -- --
Distributions from Realized Gains on Investments Sold .... -- -- -- (0.13) (0.44)
-------- -------- -------- --------- ----------
Total Distributions to Shareholders ..................... -- -- -- (0.13) (0.44)
-------- -------- -------- --------- ----------
Net Asset Value, End of Period ........................... $ 13.86 $ 15.58 $ 15.69 $ 12.41 $ 12.20
======== ======== ======== ========= ==========
Total Investment Return at Net Asset Value (c) ........... (11.04)% (0.70)% 26.43% 2.93% 9.81%
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted) ................ $ 26,402 $ 36,937 $ 19,498 $ 7,428 $ 10,766
Ratio of Expenses to Average Net Assets .................. 2.68% 2.54% 2.92% 3.75% 3.64%
Ratio of Net Investment Loss to Average Net Assets ....... (1.43)% (1.52)% (1.65)% (2.01)% (1.47)%
Portfolio Turnover Rate .................................. 101% 96% 83% 59% 93%

<FN>
* On an annualized basis.
(a) On December 22, 1994, John Hancock Advisers, Inc. became the investment adviser of the Fund.
(b) Per share information has been calculated using the average number of shares outstanding.
(c) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges.
(d) Not annualized.
</FN>
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.
11

<PAGE> 319
FINANCIAL STATEMENTS

John Hancock Funds - Global Resources Fund

<TABLE>
SCHEDULE OF INVESTMENTS
October 31, 1995
- --------------------------------------------------------------------------------
<CAPTION>
MARKET
ISSUER, DESCRIPTION NUMBER OF SHARES VALUE
<S> <C> <C>
COMMON STOCKS
CONSUMER GOODS & SERVICES (1.98)%
Reliance Industries Ltd. American
Depositary Receipt (ADR) (India)** ........... 40,000 $ 568,416
----------
ENERGY - EQUIPMENT (3.19)%
Camco International Inc. ...................... 40,000 915,000
----------
ENERGY - EXPLORATION AND PRODUCTION (20.87)%
Abacan Resource Corp.(Canada)** ............... 350,000* 858,725
Bellwether Exploration Co. .................... 190,000 1,021,250
Benton Oil & Gas Co.** ........................ 80,000* 970,000
International Petroleum Corp.(Canada)** ....... 500,000* 1,187,500
Newscope Resources Ltd.(Canada)** ............. 255,200* 733,700
Noble Affiliates Inc.** ....................... 175,000 1,225,000
----------
5,996,175
----------
ENERGY - SERVICES (23.51)%
Amercian Ecology Corp. ........................ 95,000 332,500
Cairn Energy USA, Inc.** ...................... 100,000 1,200,000
Energy Ventures Inc.** ........................ 50,000* 950,000
Global Industries Ltd** ....................... 45,000 1,181,250
Nuevo Energy Co.** ............................ 55,000 1,216,875
Reading and Bates Corp.** ..................... 90,000* 1,035,000
Transocean AS(Norway)** ....................... 55,000* 838,811
----------
6,754,436
----------
ENTERTAINMENT (2.66)%
Brassie Golf Corp.(Canada)** .................. 407,900 764,813
----------
INDUSTRIAL - INTERMEDIATE MATERIALS (11.54)%
Concordia Paper Holdings, (ADR)
(Hong Kong)** ................................ 40,000* 370,000
Hindalco Industries Ltd.(India)** ............. 20,000 637,600
Kymmene Oy(Finland) ........................... 20,000 546,253
PT Indah Kiat Pulp & Paper Corp. ..............
(Indonesia) .................................. 614,400 601,928
PT Indocement Tunggal Prakar
(Indonesia) .................................. 170,000* 628,796
Venezolana de Prerreducidos Caroni
(Venezuela)** ................................ 101,000 530,250
----------
3,314,827
----------

INDUSTRIAL - MISCELLANEOUS (11.78)%
Eastern Aluminium Ltd.(Austrailia)** .......... 620,000 570,586
Grupo Mexico S.A. B (Mexico) .................. 120,000* 501,048
</TABLE>

THE SCHEDULE OF INVESTMENTS IS A COMPLETE LIST OF ALL SECURITIES OWNED BY GLOBAL
RESOURCES FUND ON OCTOBER 31, 1995. IT'S DIVIDED INTO TWO MAIN CATEGORIES:COMMON
STOCKS AND WARRANTS. THE COMMON STOCKS ARE FURTHER BROKEN DOWN BY INDUSTRY
GROUPS.

<TABLE>
<CAPTION>
MARKET
ISSUER, DESCRIPTION NUMBER OF SHARES VALUE
<S> <C> <C>
INDUSTRIAL - MISCELLANEOUS (CONTINUED)
Holderbank Financiere Glarus
AG (Switzerland)** .......................... 712 $ 571,348
York Research Corp.** ......................... 240,000 1,740,000
-----------
3,382,982
-----------
MINING (21.50)%
Amax Gold Inc.** .............................. 150,000* 843,750
Barrick Gold Corp.(Canada) .................... 35,000* 809,375
Battle Mountain Gold Co. ...................... 100,000* 762,500
Cambior Inc.(Canada) .......................... 80,000* 790,000
Hemlo Gold Mines Inc.(Canada) ................. 100,000* 825,000
Freeport-McMoRan Copper & Gold Inc. ........... 40,000 915,000
Newmont Gold Co. .............................. 15,000 540,000
Santa Fe Pacific Corp. ........................ 70,000* 691,250
-----------
6,176,875
-----------
UTILITIES (1.69)%
OEMV AG(Austria)** ............................ 5,625 485,295
-----------
TOTAL COMMON STOCKS
(Cost $27,819,286) (98.72)% 28,358,819
-------- -----------
WARRANTS
INDUSTRIAL - MISCELLANEOUS (0.01)%
Holderbank Financiere Glarus AG
(Switzerland)** ................................ 3,560* 4,229
-----------
TOTAL WARRANTS
(Cost $0) (0.01)% 4,229
-------- -----------
TOTAL INVESTMENTS (98.73)% $28,363,048
======== ===========
<FN>
* Securities, other than short-term investments, newly added to the portfolio
during the period ended October 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.
</FN>
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE> 320
FINANCIAL STATEMENTS

John Hancock Funds - Global Resources Fund

PORTFOLIO CONCENTRATION
- --------------------------------------------------------------------------------

THE GLOBAL RESOURCES FUND INVESTS PRIMARILY IN EQUITY SECURITIES OF ISSUERS IN
THE NATURAL RESOURCE 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 OCTOBER 31, 1995 ASSIGNED TO THE VARIOUS
COUNTRY CATEGORIES.

MARKET VALUE AS A
COUNTRY DIVERSIFICATION % OF NET ASSETS
- ----------------------- ---------------
<S> <C>
Australia ................................................. 1.99%
Austria ................................................... 1.69
Canada .................................................... 20.78
Finland ................................................... 1.90
Hong Kong ................................................. 1.29
India ..................................................... 4.20
Indonesia ................................................. 4.28
Mexico .................................................... 1.74
Norway .................................................... 2.92
Switzerland ............................................... 2.00
United States ............................................. 54.09
Venezuela ................................................. 1.85
-----
TOTAL INVESTMENTS 98.73%
=====
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE> 321
NOTES TO FINANCIAL STATEMENTS

John Hancock Funds - Global Resources Fund

NOTE A --
ACCOUNTING POLICIES

John Hancock Series, Inc. (the "Corporation") is a diversified, open-end
management investment company, registered under the Investment Company Act of
1940, as amended. The Corporation consists of six series portfolios: John
Hancock Global Resources Fund (the "Fund"), John Hancock Emerging Growth Fund,
John Hancock High Yield Tax Free Fund, John Hancock High Yield Bond Fund, John
Hancock Money Market Fund and John Hancock Government Income Fund (collectively
the "Funds"). The Board of Directors may authorize the creation of additional
Funds from time to time to satisfy various investment objectives. Effective
December 22, 1994 (see Note B), the Corporation and Funds changed names by
replacing the word Transamerica with John Hancock.

The Board of Directors have authorized the issuance of two classes of shares
of the Fund, designated as Class A and Class B. The shares of each class
represent an interest in the same portfolio of investments of the Fund and have
equal rights to voting, redemption, dividends, and liquidation, except that
certain expenses, subject to the approval of the Board of Directors, 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
the terms of a distribution plan have exclusive voting rights regarding such
distribution plan. Class A Shares are subject to an initial sales charge of up
to 5.00% and a 12b-1 distribution plan. Prior to May 15, 1995, the maximum sales
charge was 5.75%. Class B Shares are subject to a contingent deferred sales
charge and a separate 12b-1 distribution plan. On June 15, 1994, Class A shares
were sold to commence class activity. Significant accounting policies of the
Fund are as follows:

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. 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 October 31, 1995, there were no open forward foreign currency exchange
contracts.

14
<PAGE> 322
NOTES TO FINANCIAL STATEMENTS

John Hancock Funds - Global Resources 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.

DISCOUNT ON SECURITIES The Fund accretes discount from par value on securities
from either the date of issue or the date of purchase over the life of the
security, as required by the Internal Revenue Code.

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
investments, to its shareholders. Therefore, no federal income tax provision is
required. For federal income tax purposes, at October 31, 1995, the Fund has
$421,721 of capital loss carryforwards available, to the extent provided by
regulations, to offset future net realized capital gains. If such carryforwards
are used by the Fund, no capital gain distributions will be made. The
carryforwards expire as follows: October 31, 2000 -- $16,520, October 31, 2002
- -- $90,341 and October 31, 2003 -- $314,860. For Federal income tax purposes,
net currency exchange gains and losses from sale 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 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.

NOTE B --
MANAGEMENT FEE, ADMINISTRATIVE
SERVICES AND TRANSACTIONS WITH AFFILIATES
AND OTHERS

On December 22, 1994, John Hancock Advisers, Inc. (the "Adviser"), a wholly
owned subsidiary of The Berkeley Financial Group, became the investment adviser
for the Fund with approval of the Board of Directors and shareholders of the
Fund. The Fund's former investment manager was Transamerica Fund Management
Company ("TFMC").

15
<PAGE> 323
NOTES TO FINANCIAL STATEMENTS

John Hancock Funds - Global Resources Fund

Under the present investment management contract, the Fund pays a monthly
management fee to the Adviser for a continuous investment program equivalent, to
0.75% of the Fund's average daily net assets. This fee structure is consistent
with the former agreement with TFMC. For the period ended October 31, 1995, the
advisory fee earned by the Adviser and TFMC amounted to $212,918 and $50,516,
respectively, resulting in a total fee of $263,434.

On December 22, 1994 John Hancock Funds, Inc. ("JH Funds"), a wholly-owned
subsidiary of the Adviser, became the principal underwriter of the Fund. Prior
to this date, Transamerica Fund Distributors, Inc. ("TFD") served as the
principal underwriter and distributor of the Fund. For the period ended October
31, 1995, JH Funds and TFD received net sales charges of $13,467 with regard to
sales of Class A shares. Out of this amount, $2,273 was retained and used for
printing prospectuses, advertising, sales literature and other purposes, $10,959
was paid as sales commissions to unrelated broker-dealers and $235 was paid as
sales commissions to sales personnel of John Hancock Distributors, Inc.
("Distributors"), Tucker Anthony, Incorporated ("Tucker Anthony") and Sutro
&Co., Inc. ("Sutro"). 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
Tucker Anthony and Sutro, all of which are broker-dealers.

Class B shares which are redeemed within six years of purchase will be
subject to a contingent deferred sales charge ("CDSC") at declining rates
beginning at 5.0% of the lesser of the current market value at the time of
redemption or the original purchase cost of the shares being redeemed. Proceeds
from the CDSC are paid to JH Funds, formerly TFD, 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
October 31, 1995, contingent deferred sales charges amounted to $99,592.

In addition, to compensate JH Funds for the services it provides as
distributor of shares of the Fund, the Fund has adopted a Distribution Plan 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 for distribution
and service expenses which in total will not exceed on an annual basis 0.25% of
the Fund's average daily net assets attributable to Class A shares and 1.00%
(0.95% effective December 1, 1995) of the Fund's average daily net assets
attributable to Class B shares, to reimburse JHFunds 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. This fee structure and plan is similar to the former arrangement
with TFD.

The Board of Directors approved a shareholder servicing agreement between the
Fund and John Hancock Investor Services Corporation ("Investor Services"), a
wholly owned subsidiary of The Berkeley Financial Group, for the period between
December 22, 1994 and May 12, 1995, inclusive, under which Investor Services
processed telephone transactions on behalf of the Fund. As of May 15, 1995, the
Fund entered into a full service transfer agent agreement with Investor
Services. Prior to this date The Shareholder Services Group was the transfer
agent. The Fund will pay Investor Services a fee based on the number of
shareholder accounts and certain out-of-pocket expenses.

16
<PAGE> 324
NOTES TO FINANCIAL STATEMENTS

John Hancock Funds - Global Resources Fund

A partner with Baker & Botts was an officer of the Corporation until December
22, 1994. During the period ended October 31, 1995, legal fees paid to Baker &
Botts amounted to $460.

The Fund has an independent advisory board composed of certain retired
Directors who provide advice to the current Trustees in order to facilitate a
smooth management transition. The Fund pays the advisory board and its counsel
a fee.

NOTE C --
INVESTMENT TRANSACTIONS

Purchases and proceeds from sales of securities, other than obligations of the
U.S. government and its agencies and short-term obligations, during the period
ended October 31, 1995 aggregated $34,964,923 and $45,488,648, respectively.
There were no purchases or sales of long-term obligations of the U.S. government
and its agencies during the period ended October 31, 1995.

The cost of investments owned at October 31, 1995 for Federal income tax
purposes was $27,819,286. Gross unrealized appreciation and depreciation of
investments aggregated $3,554,147 and $3,010,385, respectively, resulting in net
unrealized appreciation of $543,762.

NOTE D --
RECLASSIFICATION OF CAPITAL ACCOUNTS

During the year ended October 31, 1995, the Fund has reclassified amounts to
reflect a decrease in accumulated net investment loss of $472,186, an increase
in accumulated net realized loss on investments of $2,682 and a decrease in
capital paid-in of $469,504. This represents the cumulative amount necessary to
report these balances on a tax basis, excluding certain temporary differences,
as of October 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.

17
<PAGE> 325
John Hancock Funds - Global Resources Fund

REPORT OF ERNST & YOUNG LLP,
INDEPENDENT AUDITORS
To the Board of Directors and Shareholders of
John Hancock Series, Inc. --
John Hancock Global Resources Fund

We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of the John Hancock Global Resources Fund (the
"Fund"), (formerly the Transamerica Global Resources Fund), one of the
portfolios constituting John Hancock Series, Inc. (the "Corporation") (formerly
Transamerica Series, Inc.), as of October 31, 1995, and the related statement of
operations for the year then ended, the statements of changes in net assets for
each of the two years in the period then ended, and the financial highlights for
each of the periods indicated therein. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1995, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
John Hancock Global Resources Fund portfolio of John Hancock Series, Inc. at
October 31, 1995, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended,
and the financial highlights for each of the indicated periods, in conformity
with generally accepted accounting principles.

/s/ Ernst & Young LLP

Boston, Massachusetts
December 15, 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 October 31,
1995.

The Fund has not paid any distributions of ordinary income dividends or net
long-term capital gains during the fiscal year.

18
<PAGE> 326

FINANCIAL STATEMENTS

John Hancock Funds - Government Income Fund

<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1995
- --------------------------------------------------------------------------------
<S> <C>
ASSETS:
Investments at value - Note C:
U.S. government and agencies securities
(cost - $603,825,785) ...................................... $625,777,653
Foreign government bonds (cost - $50,166,236) ................ 47,443,518
Multi-family mortgage backed bonds
(cost - $9,790,279) ........................................ 9,832,500
Joint repurchase agreement ($97,000) ......................... 97,000
Corporate savings account .................................... 105,421
------------
683,256,092

Receivable for shares sold .................................... 103,183
Receivable for investments sold ............................... 18,642,062
Interest receivable ........................................... 12,206,152
Receivable for variation margin - Note A ...................... 10,031
Other assets .................................................. 115,586
------------
Total Assets ................................ 714,333,106
-----------------------------------------------------------
LIABILITIES:
Dividend payable .............................................. 129,004
Payable for shares repurchased ................................ 361,030
Payable for investments purchased ............................. 15,785,402
Payable to John Hancock Advisers, Inc. and
affiliates - Note B .......................................... 434,850
Accounts payable and accrued expenses ......................... 99,462
------------
Total Liabilities ........................... 16,809,748
-----------------------------------------------------------
NET ASSETS:
Capital paid-in ............................................... 697,686,152
Accumulated net realized loss on investments and
financial futures contracts .................................. (19,491,372)
Net unrealized appreciation of investments and
financial futures contracts .................................. 19,323,152
Undistributed net investment income ........................... 5,426
------------
Net Assets .................................. $697,523,358
===========================================================

NET ASSET VALUE PER SHARE:
(Based on net assets and shares of beneficial
interest outstanding - $1,000,000,000 shares
authorized with $0.01 par value, respectively)
Class A - $470,569,527/50,496,527 ............................ $ 9.32
=============================================================================
Class B - $226,953,831/24,341,348 ............................. $ 9.32
=============================================================================
MAXIMUM OFFERING PRICE PER SHARE*
Class A - ($9.32 x 104.71%) ................................... $ 9.76
=============================================================================
</TABLE>
* On single retail sales of less than $100,000. On sales of $100,000 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>
<CAPTION>
STATEMENT OF OPERATIONS
Year ended October 31, 1995
- --------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Interest ...................................................... $ 26,331,033
------------

Expenses:
Investment management fee - Note B ........................... 1,869,527
Distribution/service fee - Note B
Class A .................................................... 147,525
Class B .................................................... 2,292,294
Transfer agent fee ........................................... 484,392
Custodian fee ................................................ 76,872
Auditing fee ................................................. 65,587
Printing ..................................................... 44,872
Trustees' fees ............................................... 30,993
Advisory board fee ........................................... 25,219
Legal fees ................................................... 23,474
Registration and filing fees ................................. 23,362
Miscellaneous ................................................ 21,275
------------
Total Expenses .............................. 5,105,392
-----------------------------------------------------------
Net Investment Income ....................... 21,225,641
-----------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investments sold ......................... (7,005,257)
Net realized gain on financial futures contracts .............. 236,316
Change in net unrealized appreciation/depreciation
of investments ............................................... 49,821,652
Change in net unrealized appreciation/depreciation
of financial futures contracts ............................... (518,532)
------------
Net Realized and Unrealized
Gain on Investments ......................... 42,534,179
-----------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations ................... $ 63,759,820
===========================================================
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

8
<PAGE> 327
FINANCIAL STATEMENTS

John Hancock Funds - Government Income Fund

<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
------------------------------
1995 1994
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income............................................................................ $ 21,225,641 $ 18,739,100
Net realized loss on investments sold............................................................ (6,768,941) (12,072,264)
Change in net unrealized appreciation/depreciation of investments................................ 49,303,120 (24,904,672)
------------ ------------
Net Increase (Decrease) in Net Assets Resulting from Operations................................. 63,759,820 (18,237,836)
------------ ------------

DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income
Class A - ($0.7182 and $0.0600 per share, respectively)......................................... (4,353,217) (1,228)
Class B - ($0.6528 and $0.6500 per share, respectively)......................................... (16,866,998) (18,621,004)
Distributions from net realized gain on investments sold and financial futures contracts
Class B - (none and $0.0200 per share, respectively)............................................ ...... (730,403)
------------ ------------
Total Distributions to Shareholders............................................................. (21,220,215) (19,352,635)
------------ ------------

FROM FUND SHARE TRANSACTIONS-- NET*................................................................ 413,699,323 (14,538,382)
------------ ------------

NET ASSETS:
Beginning of period.............................................................................. 241,284,430 293,413,283
------------ ------------
End of period (including undistributed net investment income of $5,426 and none, respectively)... $697,523,358 $241,284,430
============ ============
</TABLE>

* ANALYSIS OF FUND SHARE TRANSACTIONS:

<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------
1995 1994
---------------------------- ------------------------------
SHARES AMOUNT SHARES AMOUNT
CLASS A** ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Shares sold..................................................... 316,821 $ 2,814,999 25,409 $ 223,359
Shares issued in reorganization - Note D........................ 51,435,148 464,795,225 ...... ......
Shares issued to shareholders in reinvestment of distributions.. 217,963 2,023,104 69 606
---------- ------------ ------------ ------------
51,969,932 469,633,328 25,478 223,965
Less shares repurchased......................................... (1,498,883) (13,909,339) ...... ......
---------- ------------ ------------ ------------
Net increase.................................................... 50,471,049 $455,723,989 25,478 $ 223,965
========== ============ ============ ============
CLASS B
Shares sold..................................................... 2,414,651 $ 21,569,979 4,611,686 $ 43,702,215
Shares issued in reorganization - Note D........................ 243,005 2,166,726 ...... ......
Shares issued to shareholders in reinvestment of distributions.. 973,020 8,764,619 1,061,434 9,872,309
---------- ------------ ------------ ------------
3,630,676 32,501,324 5,673,120 53,574,524
Less shares repurchased......................................... (6,837,005) (74,525,990) (7,326,339) (68,336,871)
---------- ------------ ------------ ------------
Net decrease.................................................... (3,206,329) $(42,024,666) (1,653,219) $(14,762,347)
========== ============ ============ ============
</TABLE>

** Class A shares commenced operations on September 30, 1994.

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 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> 328
FINANCIAL STATEMENTS

John Hancock Funds - Government Income 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 30, 1994
(COMMENCEMENT OF
YEAR ENDED OPERATIONS) TO
OCTOBER 31, 1995(a) OCTOBER 31, 1994
------------------- ------------------
<S> <C> <C>
CLASS A
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period........................ $ 8.75 $ 8.85
-------- ------
Net Investment Income....................................... 0.72 0.06
Net Realized and Unrealized Gain (Loss) on

Investments and Financial Futures Contracts................ 0.57 (0.10)
-------- ------
Total from Investment Operations........................... 1.29 (0.04)
-------- ------
Less Distributions:
Dividends from Net Investment Income........................ (0.72) (0.06)
-------- ------
Net Asset Value, End of Period.............................. $ 9.32 $ 8.75
======== ======
Total Investment Return at Net Asset Value (b)(c)........... 15.32% (0.45%)**
Total Adjusted Investment Return at Net Asset Value (c)..... 15.28% (0.46%)**

RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted)................... $470,569 $ 223
Ratio of Expenses to Average Net Assets (b)................. 1.19% 0.12%*
Ratio of Net Investment Income to Average Net Assets (b).... 7.38% 0.71%*
Portfolio Turnover Rate..................................... 102% 92%
</TABLE>

THE FINANCIAL HIGHLIGHTS SUMMARIZE THE IMPACT OF THE FOLLOWING FACTORS ON A
SINGLE SHARE FOR THE PERIODS INDICATED: THE NET INVESTMENT INCOME, GAINS
(LOSSES), DISTRIBUTIONS, 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> 329
FINANCIAL STATEMENTS

John Hancock Funds - Government Income Fund

FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
-------------------------------------------------------
1995(a) 1994 1993 1992 1991
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
CLASS B
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period.......................... $ 8.75 $ 10.05 $ 9.83 $ 9.79 $ 9.37
-------- --------- -------- -------- --------
Net Investment Income......................................... 0.65 0.65 0.70 0.80 0.89
Net Realized and Unrealized Gain (Loss) on
Investments and Financial Futures Contracts.................. 0.57 (1.28) 0.24 0.03 0.40
-------- -------- -------- -------- --------
Total from Investment Operations............................. 1.22 (0.63) 0.94 0.83 1.29
-------- -------- -------- -------- --------
Less Distributions:
Dividends from Net Investment Income.......................... (0.65) (0.65) (0.72) (0.79) (0.87)
Distributions from Net Realized Gains on Investments
Sold and Financial Futures Contracts......................... ...... (0.02) ...... ...... ......
-------- -------- -------- -------- --------
Total Distributions.......................................... (0.65) (0.67) (0.72) (0.79) (0.87)
-------- -------- -------- -------- --------
Net Asset Value, End of Period................................ $ 9.32 $ 8.75 $ 10.05 $ 9.83 $ 9.79
======== ======== ======== ======== ========
Total Investment Return at Net Asset Value (b)(c)............. 14.49% (6.42%) 9.86% 8.81% 14.38%
Total Adjusted Investment Return at Net Asset Value (c)....... 14.47% (6.43%) 9.85% 8.66% ......

RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted)..................... $226,954 $241,061 $293,413 $225,540 $129,014
Ratio of Expenses to Average Net Assets (b)................... 1.89% 1.93% 2.00% 2.00% 2.00%
Ratio of Net Investment Income to Average Net Assets (b)...... 7.26% 6.98% 7.06% 8.03% 9.09%
Portfolio Turnover Rate....................................... 102% 92% 138% 112% 162%
</TABLE>

*Annualized
**Not annualized

(a) On December 22, 1994, John Hancock Advisers, Inc. became the investment
adviser of the Fund.
(b) Excluding interest expense, which equalled 0.04% for Class A for the year
ended October 31, 1995 and 0.02%, 0.01%, 0.01% and 0.15% for Class B
for the years ended October 31, 1995, 1994, 1993 and 1992, respectively.
(c) Total investment return assumes dividend reinvestment and does not reflect
the effect of sales charges.

SEE NOTES TO FINANCIAL STATEMENTS.

11
<PAGE> 330
FINANCIAL STATEMENTS

John Hancock Funds - Government Income Fund

<TABLE>
SCHEDULE OF INVESTMENTS
October 31, 1995
- ------------------------------------------------------------------------------------------------------------------------
<CAPTION>

THE SCHEDULE OF INVESTMENTS IS A COMPLETE LIST OF ALL SECURITIES OWNED BY
GOVERNMENT INCOME FUND ON OCTOBER 31, 1995. IT'S DIVIDED INTO FOUR MAIN
CATEGORIES: U.S. GOVERNMENT AND AGENCIES SECURITIES, FOREIGN GOVERNMENT BONDS,
MULTI-FAMILY MORTGAGE BACKED BONDS AND SHORT-TERM INVESTMENTS. SHORT-TERM
INVESTMENTS, WHICH REPRESENT THE FUND'S "CASH" POSITION, ARE LISTED LAST.

PAR VALUE
INTEREST MATURITY (000'S MARKET
ISSUER, DESCRIPTION RATE DATE OMITTED) VALUE
- ------------------- -------- -------- --------- ------
<S> <C> <C> <C> <C>
U.S. GOVERNMENT AND AGENCIES SECURITIES
GOVERNMENTAL - U.S. (50.06%)
Financing Corp.,
Bond.................................. 9.400% 02-08-18 $ 4,000 $ 5,201,880
Bond.................................. 9.650 11-02-18 1,600 2,134,000
Tennessee Valley Authority,
Pwr Bond 1994 Ser A................... 7.850 06-15-44 13,500 13,927,680
United States Treasury,
Bond.................................. 15.750 11-15-01 44,340 66,309,140
Bond.................................. 11.625 11-15-02* 23,500 31,122,695
Bond.................................. 11.875 11-15-03* 6,000 8,216,220
Bond**................................ 11.625 11-15-04* 21,150 29,259,756
Bond.................................. 12.750 11-15-10* 7,250 10,797,933
Bond.................................. 12.000 08-15-13* 48,700 73,057,792
Bond.................................. 9.250 02-15-16* 8,000 10,584,960
Bond.................................. 8.875 08-15-17* 3,500 4,498,060
Bond.................................. 8.125 08-15-19* 5,000 6,018,750
Bond.................................. 7.500 11-15-24* 3,000 3,427,500
Bond.................................. 7.625 02-15-25* 6,000 6,965,640
Note.................................. 9.375 04-15-96* 64,700 65,771,432
Note.................................. 6.500 08-15-05* 11,500 11,909,630
------------
349,203,068
------------
GOVERNMENTAL - U.S. AGENCIES (39.65%)
Federal Home Loan Mortgage Corp.,
CMO REMIC 1094-K...................... 7.000 06-15-21 2,300 2,306,463
CMO REMIC 1218-G...................... 4.500 05-15-14 2,000 1,857,500
CMO REMIC 1408-H...................... 6.500 10-15-19 4,754 4,651,848
CMO REMIC 1634-PN..................... 4.500 12-15-23* 10,575 7,841,997
CMO REMIC 1667-PE..................... 6.000 03-15-08* 11,750 11,474,580
Federal Judiciary Office Building,
Zero Coupon Bond...................... 0.000 02-15-01 250 180,325
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

12
<PAGE> 331
FINANCIAL STATEMENTS

John Hancock Funds - Government Income Fund

<TABLE>
<CAPTION>
PAR VALUE
INTEREST MATURITY (000'S MARKET
ISSUER, DESCRIPTION RATE DATE OMITTED) VALUE
- ------------------- -------- -------- --------- ------
<S> <C> <C> <C> <C>
GOVERNMENTAL - U.S. AGENCIES (CONTINUED)
Federal National Mortgage Association,
30 Yr SF Pass Thru Ctf.................................. 8.000% 11-01-24 to* $10,449 $ 10,712,994
05-01-25

30 Yr SF Pass Thru Ctf.................................. 8.500 09-01-24 to 18,042 18,700,954
10-01-24

30 Yr SF Pass Thru Ctf.................................. 11.875 05-19-00* 6,800 8,348,020
GTD REMIC Pass Thru Ctf X-225C-TK....................... 6.500 12-25-23* 5,032 4,756,800
GTD REMIC Pass Thru Ctf 1990-51-H....................... 7.500 05-25-20 200 205,062
GTD REMIC Pass Thru Ctf 1990-58-J....................... 7.000 05-25-20 3,700 3,675,691

GTD REMIC Pass Thru Ctf 1990-94-D....................... 6.500 08-25-20 1,660 1,623,165
GTD REMIC Pass Thru Ctf 1991-56-M....................... 6.750 06-25-21 4,000 3,943,720
GTD REMIC Pass Thru Ctf 1992-210-H...................... 6.500 03-25-19* 10,000 9,821,800
GTD REMIC Pass Thru Ctf 1994-36-N....................... 6.500 03-25-24* 18,645 17,380,496
GTD REMIC Pass Thru Ctf 1994-48-E....................... 6.000 11-25-08* 3,685 3,535,278
GTD REMIC Pass Thru Ctf 1994-51-PV...................... 6.000 03-25-04* 20,926 18,663,272
GTD REMIC Pass Thru Ctf 1994-72-K....................... 6.000 04-25-24 6,389 5,697,835
Government National Mortgage Association,

30 Yr SF Pass Thru Ctf.................................. 7.000 08-15-23* 15,162 15,068,047
30 Yr SF Pass Thru Ctf.................................. 7.500 05-15-23 to* 75,193 76,245,566
09-01-25

30 Yr SF Pass Thru Ctf.................................. 8.000 07-15-23 to* 32,977 33,964,191
08-15-24

30 Yr SF Pass Thru Ctf.................................. 8.500 02-15-25* 3,036 3,164,311
30 Yr SF Pass Thru Ctf.................................. 11.000 01-15-14 to* 11,348 12,754,670
12-15-15 ------------
276,574,585
------------
TOTAL U.S. GOVERNMENT AND AGENCIES SECURITIES
(Cost $603,825,785) (89.71%) 625,777,653
------ ------------
FOREIGN GOVERNMENT BONDS
U.S. DOLLAR DENOMINATED FOREIGN GOVERNMENT BONDS (6.80%)
Brazil, Republic of,
Bond DISC ZL............................................ 6.812# 04-15-24* 5,000 2,975,000
British Columbia Hydro and Power Auth.
Bond Ser FG............................................. 15.000 04-15-11 3,900 4,250,103
Bond Ser FJ............................................. 15.500 11-15-11 1,700 1,964,299
Hydro-Quebec Corp.,
Deb Ser IF.............................................. 7.375 02-01-03* 5,500 5,689,255
Deb Ser HK.............................................. 9.375 04-15-30 2,000 2,401,060
Deb Ser HS.............................................. 9.400 02-01-21* 5,000 5,986,350
Deb Ser FU.............................................. 11.750 02-01-12 270 384,218
International Bank for Reconstruction and Development,
Thirty Year Bond Ser 1987............................... 9.250 07-15-17* 4,000 5,072,640
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

13
<PAGE> 332
FINANCIAL STATEMENTS

John Hancock Funds - Government Income Fund

<TABLE>
<CAPTION>
PAR VALUE
INTEREST MATURITY (000'S MARKET
ISSUER, DESCRIPTION RATE DATE OMITTED) VALUE
- ------------------- -------- -------- --------- ------
<S> <C> <C> <C> <C>
U.S. DOLLAR DENOMINATED FOREIGN GOVERNMENT BONDS (CONTINUED)
Landeskreditbank Baden-Wuerttemberg
Sub Notes........................................................... 7.625% 02-01-23* $ 7,050 $ 7,640,085
Ontario, Province of,
30 Year Deb......................................................... 15.125 05-01-11 1,345 1,477,738
30 Year Deb......................................................... 17.000 11-05-11 5,000 5,835,250
Saskatchewan, Province of,
30 Year Deb......................................................... 9.375 12-15-20* 3,000 3,767,520
------------
TOTAL FOREIGN GOVERNMENT BONDS

(Cost $50,166,236) (6.80%) 47,443,518
------ ------------

MULTI-FAMILY MORTGAGE BACKED BONDS (1.41%)
DLJ Mortgage Acceptance Corp.,
CMO REMIC 1993-M10-A2............................................... 7.200 07-15-03 4,732 4,849,791
4,849,791
CMO REMIC 1993-MF7-A1............................................... 7.400 06-18-03 4,833 4,982,709
------------
TOTAL MULTI-FAMILY MORTGAGE BACKED BONDS
(Cost $9,790,279) (1.41%) 9,832,500
------- ------------
TOTAL LONG TERM BONDS
(Cost $663,782,300) (97.92%) 683,053,671
------- ------------

SHORT-TERM INVESTMENTS
JOINT REPURCHASE AGREEMENT (0.01%)
Investment in a joint repurchase agreement transaction with
SBC Capital Markets Inc., Dated 10-31-95, Due 11-01-95
(secured by U. S. Treasury Bond, 8.750% Due 05-15-17 and
U.S. Treasury Note, 5.750% Due 09-30-97) Note A................... 5.89 11-01-95 97 97,000
CORPORATE SAVINGS ACCOUNT (0.02%)
Investors Bank & Trust Company
Daily Interest Savings
Account Current Rate 3.00%........................................ 105,421
------------
TOTAL SHORT-TERM INVESTMENTS (0.03%) 202,421
------- ------------
TOTAL INVESTMENTS (97.95%) $683,256,092
======= ============
</TABLE>

* Securities, other than short-term investments, newly added to the portfolio
during the year ended October 31, 1995.
** U.S. Treasury Bonds with a value of $182,614 owned by the Fund were
designated as margin deposits for futures contracts at October 31, 1995.
# Represents rate in effect on October 31, 1995.
The percentage shown for each investment category is the total value of that
category as a percentage of the net assets of the Fund.

SEE NOTES TO FINANCIAL STATEMENTS.

14
<PAGE> 333
NOTES TO FINANCIAL STATEMENTS

John Hancock Funds - Government Income Fund

NOTE A --
ACCOUNTING POLICIES

John Hancock Series, Inc. (the "Corporation") is a diversified, open-end
management investment company, registered under the Investment Company Act of
1940, as amended. The Corporation consists of six series portfolios: John
Hancock Government Income Fund (collectively the "Fund"), John Hancock Emerging
Growth Fund, John Hancock High Yield Tax Free Fund, John Hancock High Yield Bond
Fund, John Hancock Money Market Fund and John Hancock Global Resources Fund
(collectively the "Funds"). The Board of Directors may authorize the creation of
additional Funds from time to time to satisfy various investment objectives.
Effective December 22, 1994 (see Note B), the Corporation and Funds changed
names by replacing the word Transamerica with John Hancock.

The Board of Directors have authorized the issuance of two 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, redemption, dividends, and liquidation, except that
certain expenses, subject to the approval of the Board of Directors, 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
the terms of a distribution plan have exclusive voting rights regarding such
distribution plan. Class A Shares are subject to an initial sales charge of up
to 4.50% and a 12b-1 distribution plan. Class B Shares are subject to a
contingent deferred sales charge and a separate 12b-1 distribution plan.
Significant accounting policies of the Fund are as follows:

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., 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.

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
investments, to its shareholders. Therefore, no federal income tax provision is
required. For federal income tax purposes, the Fund has $15,347,195 of a capital
loss carryforward available, to the extent provided by regulations, to offset
future net realized capital gains. If such carryforwards are used by the Fund,
no capital gain distribution will be made. The carryforward expires 12/31/2002.
The Fund's tax year end is December 31.

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 principles. 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 will be in the same amount, except for effect of expenses that
may be applied differently to each class as explained previously.

15
<PAGE> 334
NOTES TO FINANCIAL STATEMENTS

John Hancock Funds - Government Income Fund

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.

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 October 31, 1995, there were no open forward foreign currency exchange
contracts.

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
will be 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 will be 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 will be 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", will be recorded by the
Fund as unrealized gains or losses.

16
<PAGE> 335
NOTES TO FINANCIAL STATEMENTS

John Hancock Funds - Government Income Fund

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 October 31, 1995, open positions in financial futures contracts were as
follows:

<TABLE>
<CAPTION>
UNREALIZED
APPRECIATION/
EXPIRATION OPEN CONTRACTS POSITION (DEPRECIATION)
- ---------- ------------- -------- --------------
<S> <C> <C> <C>
DEC 95 69 Treasury Bond LONG $51,781
=======
</TABLE>

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, to
0.650% of the first $200,000,000 of the Fund's average daily net asset value,
0.625% of the next $300,000,000 and 0.600% of the Fund's average daily net asset
value in excess of $500,000,000. This fee structure is consistent with the
former agreement with TFMC. For the period ended October 31, 1995, the advisory
fee earned by the Adviser and TFMC amounted to $1,612,806 and $256,721,
respectively, resulting in a total fee of $1,869,527.

On December 22, 1994 John Hancock Funds, Inc. ("JH Funds"), a wholly-owned
subsidiary of the Adviser, became the principal underwriter of the Fund. Prior
to this date, Transamerica Fund Distributors, Inc. ("TFD") served as the
principal underwriter and distributor of the Fund. For the period ended October
31, 1995, JH Funds and TFD received net sales charges of $35,314 with regard to
sales of Class A shares. Out of this amount, $6,442 was retained and used for
printing prospectuses, advertising, sales literature and other purposes, $27,090
was paid as commissions to unrelated broker dealers and $1,782 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 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, formerly TFD, 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
October 31, 1995, contingent deferred sales charges amounted to $308,083.

17
<PAGE> 336
NOTES TO FINANCIAL STATEMENTS

John Hancock Funds - Government Income Fund

In addition, to reimburse JH Funds for the services it provides as
distributor of shares of the Fund, the Fund has adopted a Distribution Plan 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 for distribution
and service expenses at an annual rate not to exceed 0.25% 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. This fee structure and plan is similar to the
former arrangement with TFD.

The Board of Directors approved a shareholder servicing agreement between
the Fund and John Hancock Investor Services Corporation ("Investor Services"), a
wholly owned subsidiary of The Berkeley Financial Group, for the period between
December 22, 1994 and May 12, 1995, inclusive under which Investor Services
processed telephone transactions on behalf of the Fund. As of May 15, 1995, the
Fund entered into a full service transfer agent agreement with Investor
Services. Prior to this date The Shareholder Services Group was the transfer
agent. The Fund will pay Investor Services a fee based on transaction volume and
number of shareholder accounts.

A partner with Baker & Botts was an officer of the Corporation until
December 22, 1994. During the period ended October 31, 1995, legal fees paid to
Baker & Botts amounted to $2,864.

Edward J. Boudreau, Jr. is a director and officer of the Adviser and its
affiliates as well as Director of the Fund. The compensation of unaffiliated
Directors is borne by the Fund. Effective with the fees paid for 1995, the
unaffiliated Directors may elect to defer 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
obligations, during the period ended October 31, 1995 aggregated $757,830,084
and $343,733,984, respectively.

The cost of investments (excluding the corporate savings account) owned at
October 31, 1995 for Federal income tax purposes was $663,879,300. Gross
unrealized appreciation and depreciation of investments aggregated $27,506,612
and $8,235,241, respectively, resulting in net unrealized appreciation of
$19,271,371.

NOTE D --
REORGANIZATION

On September 8, 1995, the shareholders of John Hancock Government Securities
Trust (JHGST) approved a plan of reorganization between JHGST and the Fund
providing for the transfer of substantially all of the assets and liabilities of
JHGST to the Fund in exchange solely for Class A shares and Class B shares of
the Fund. The acquisition was accounted for as a tax free exchange of 51,435,148
Class A shares, and 243,005 Class B shares of John Hancock Government Income
Fund for the net assets of JHGST, which amounted to $477,611,353 and $2,257,707
for Class A and Class B shares, respectively, including $12,907,109 of
unrealized appreciation, after the close of business at September 15, 1995.

18
<PAGE> 337
John Hancock Funds - Government Income Fund

REPORT OF ERNST & YOUNG LLP,
INDEPENDENT AUDITORS

To the Board of Directors and Shareholders of
John Hancock Series, Inc. --
John Hancock Government Income Fund

We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of the John Hancock Government Income Fund (the
"Fund"), (formerly the Transamerica Government Income Fund), one of the
portfolios constituting John Hancock Series, Inc. (the "Corporation") (formerly
Transamerica Series, Inc.), as of October 31, 1995, and the related statement of
operations for the year then ended, the statements of changes in net assets for
each of the two years in the period then ended, and the financial highlights for
each of the periods indicated therein. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.

In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of the
John Hancock Government Income Fund portfolio of John Hancock Series, Inc. at
October 31, 1995, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended,
and the financial highlights for each of the indicated periods, in conformity
with generally accepted accounting principles.

/s/ Ernst & Young LLP

Boston, Massachusetts
December 15, 1995

19
<PAGE> 338
FINANCIAL STATEMENTS

John Hancock Funds - High Yield Bond Fund

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 ASSETS AND LIABILITIES
October 31, 1995
- -------------------------------------------------------------------------------

<TABLE>
<S> <C>
ASSETS:
Investments at value - Note C:
Bonds (cost - $174,275,586).................................. $174,895,660
Common stocks, preferred stocks
and warrants (cost - $11,926,485).......................... 15,917,273
Joint repurchase agreement (cost - $6,605,000)............... 6,605,000
Corporate savings account.................................... 126,996
------------
197,544,929
Dividends receivable.......................................... 85,076
Receivable for investments sold............................... 6,520,562
Interest receivable........................................... 5,870,417
Receivable for shares sold.................................... 214,328
Other assets.................................................. 69,226
------------
Total Assets................................ 210,304,538
-----------------------------------------------------------

LIABILITIES:
Payable for investments purchased............................. 2,640,800
Payable for shares repurchased................................ 283,098
Dividend payable.............................................. 51,919
Payable for forward foreign currency exchange
contracts bought - Note A.................................... 113,542
Payable to John Hancock Advisers, Inc. and
affiliates - Note B.......................................... 102,933
Accounts payable and accrued expenses......................... 74,193
------------
Total Liabilities........................... 3,266,485
-----------------------------------------------------------

NET ASSETS:
Capital paid-in............................................... 223,773,206
Accumulated net realized loss on investments and
foreign currency transactions................................ ( 21,253,679)
Net unrealized appreciation of investments and
foreign currency transactions................................ 4,497,320
Undistributed net investment income........................... 21,206
------------
Net Assets.................................. $207,038,053
===========================================================

NET ASSET VALUE PER SHARE:
(Based on net asset values and shares of beneficial
interest outstanding - 125,000,000 shares
authorized with $0.01 per share par value, respectively)
Class A - $26,452,279/3,674,039............................... $ 7.20
=============================================================================
Class B - $180,585,774/25,087,383............................. $ 7.20
=============================================================================

MAXIMUM OFFERING PRICE PER SHARE*
Class A - ($7.20 x 104.71%)................................... $ 7.54
=============================================================================
</TABLE>

* On single retail sales of less than $100,000. On sales of $100,000 or more and
on group sales the offering price is reduced.

STATEMENT OF OPERATIONS
Year ended October 31, 1995
- -------------------------------------------------------------------------------

<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest (net of foreign withholding taxes of $43,437)........ $19,807,076
Dividends..................................................... 1,006,279
-----------
20,813,355
-----------
Expenses:
Investment management fee - Note B........................... 1,059,723
Distribution/service fee - Note B
Class A.................................................... 46,932
Class B.................................................... 1,620,766
Transfer agent fee........................................... 305,670
Custodian fee................................................ 77,621
Registration and filing fees................................. 62,478
Auditing fee................................................. 52,671
Printing..................................................... 46,750
Trustees' fees............................................... 28,202
Legal fees................................................... 20,725
Miscellaneous................................................ 16,486
Advisory board fee........................................... 13,213
-----------
Total Expenses.............................. 3,351,237
-----------------------------------------------------------
Net Investment Income....................... 17,462,118
-----------------------------------------------------------

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Net realized loss on investments sold......................... ( 11,655,371)
Net realized loss on foreign currency transactions............ ( 353,504)
Change in net unrealized appreciation/depreciation
of investments............................................... 9,416,135
Change in net unrealized appreciation/depreciation
of foreign currency transactions............................. ( 113,542)
-----------
Net Realized and Unrealized
Loss on Investments and
Foreign Currency Transactions............... ( 2,706,282)
-----------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations................... $14,755,836
===========================================================
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

8
<PAGE> 339
FINANCIAL STATEMENTS

John Hancock Funds - High Yield Bond Fund

<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
- ----------------------------------------------------------------------------------------------------------------------------------

YEAR ENDED OCTOBER 31,
------------------------------
1995 1994
-------------- --------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income.......................................................................... $ 17,462,118 $ 15,754,523
Net realized loss on investments sold and foreign currency transactions........................ ( 12,008,875) ( 8,882,766)
Change in net unrealized appreciation/depreciation of investments and foreign
currency transactions......................................................................... 9,302,593 ( 9,524,936)
------------ ------------
Net Increase (Decrease) in Net Assets Resulting from Operations............................... 14,755,836 ( 2,653,179)
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income:
Class A - ($0.7310 and $0.8200 per share, respectively)..................................... ( 1,845,748) ( 821,430)
Class B - ($0.6738 and $0.7600 per share, respectively)..................................... ( 15,681,410) ( 15,331,034)
Distributions from net realized gain on investments
Class A - (none and $0.0465 per share, respectively)........................................ -- ( 18,900)
Class B - (none and $0.0465 per share, respectively)........................................ -- ( 870,444)
------------ ------------
Total Distributions to Shareholders........................................................ ( 17,527,158) ( 17,041,808)
------------ ------------

FROM FUND SHARE TRANSACTIONS -- NET*............................................................. 37,374,759 35,571,332
------------ ------------
NET ASSETS:
Beginning of period............................................................................ 172,434,616 156,558,271
------------ ------------
End of period (including undistributed net investment income of $21,206 and $86,246,
respectively)............................................................................... $207,038,053 $172,434,616
============ ============
</TABLE>

* ANALYSIS OF FUND SHARE TRANSACTIONS:

<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
--------------------------------------------------------
1995 1994
--------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
------------ ------------- ------------ -------------
<S> <C> <C> <C> <C>
CLASS A
Shares sold......................................................... 6,078,825 $43,382,586 3,865,973 $30,826,064
Shares issued to shareholders in reinvestment of distributions...... 135,872 966,256 56,266 435,342
---------- ----------- ---------- -----------
6,214,697 44,348,842 3,922,239 31,261,406
Less shares repurchased............................................. ( 4,135,476) ( 29,488,564) ( 2,612,061) ( 20,718,136)
---------- ----------- ---------- -----------
Net increase........................................................ 2,079,221 $14,860,278 1,310,178 $10,543,270
========== =========== ========== ===========
CLASS B
Shares sold......................................................... 10,103,871 $71,810,000 10,695,100 $84,645,545
Shares issued to shareholders in reinvestment of distributions...... 1,007,375 7,154,628 949,832 7,453,158
---------- ----------- ---------- -----------
11,111,246 78,964,628 11,644,932 92,098,703
Less shares repurchased............................................. ( 7,937,826) ( 56,450,147) ( 8,472,714) ( 67,070,641)
---------- ----------- ---------- -----------
Net increase........................................................ 3,173,420 $22,514,481 3,172,218 $25,028,062
========== =========== ========== ===========
</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 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 LAST TWO PERIODS, ALONG WITH THE CORRESPONDING DOLLAR
VALUES.

SEE NOTES TO FINANCIAL STATEMENTS.

9
<PAGE> 340
FINANCIAL STATEMENTS

John Hancock Funds - High Yield Bond 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
FROM JUNE 30,
1993
(COMMENCEMENT
YEAR ENDED OCTOBER 31, OF OPERATIONS)
---------------------- TO OCTOBER 31,
1995(b) 1994 1993
--------- --------- --------------
<S> <C> <C> <C>
CLASS A
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period............................................... $ 7.33 $ 8.23 $ 8.10
------- ------- -------
Net Investment Income ............................................................. 0.72 0.80(a) 0.33
Net Realized and Unrealized Gain (Loss) on Investments and
Foreign Currency Transactions..................................................... ( 0.12) ( 0.83) 0.09
------- ------- -------
Total from Investment Operations ................................................. 0.60 ( 0.03) 0.42
------- ------- -------
Less Distributions:
Dividends from Net Investment Income............................................... ( 0.73) ( 0.82) ( 0.29)
Distributions from Net Realized Gain on Investments Sold........................... -- ( 0.05) --
------- ------- -------
Total Distributions .............................................................. ( 0.73) ( 0.87) ( 0.29)
------- ------- -------
Net Asset Value, End of Period..................................................... $ 7.20 $ 7.33 $ 8.23
======= ======= =======
Total Investment Return at Net Asset Value (c)..................................... 8.83% ( 0.59%) 4.96%(d)

Ratios and Supplemental Data
Net Assets, End of Period (000's omitted).......................................... $26,452 $11,696 $ 2,344
Ratio of Expenses to Average Net Assets............................................ 1.16% 1.16% 0.91%*
Ratio of Net Investment Income to Average Net Assets............................... 10.23% 10.14% 12.89%*
Portfolio Turnover Rate ........................................................... 98% 153% 204%
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

10
<PAGE> 341
FINANCIAL STATEMENTS

John Hancock Funds - High Yield Bond Fund

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (continued)
- -------------------------------------------------------------------------------------------------------------------------------

YEAR ENDED OCTOBER 31,
------------------------------------------------------------
1995(b) 1994 1993 1992 1991
---------- ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
CLASS B
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period......................... $ 7.33 $ 8.23 $ 7.43 $ 7.44 $ 6.45
-------- -------- -------- -------- --------
Net Investment Income ....................................... 0.67 0.74(a) 0.80 0.87 0.98
Net Realized and Unrealized Gain (Loss) on Investments and
Foreign Currency Transactions............................... ( 0.13) ( 0.83) 0.75 ( 0.04) 1.06
-------- -------- -------- -------- --------
Total from Investment Operations ........................... 0.54 ( 0.09) 1.55 0.83 2.04
-------- -------- -------- -------- --------
Less Distributions
Dividends from Net Investment Income......................... ( 0.67) ( 0.76) ( 0.75) ( 0.84) ( 0.98)
Distributions from Net Realized Gain on Investments Sold..... -- ( 0.05) -- -- --
Distributions from Capital Paid-in........................... -- -- -- -- ( 0.07)
-------- -------- -------- -------- --------
Total Distributions ........................................ ( 0.67) ( 0.81) ( 0.75) ( 0.84) ( 1.05)
-------- -------- -------- -------- --------
Net Asset Value, End of Period............................... $ 7.20 $ 7.33 $ 8.23 $ 7.43 $ 7.44
======== ======== ======== ======== =========
Total Investment Return at Net Asset Value (c)............... 7.97% ( 1.33%) 21.76% 11.56% 34.21%

RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted).................... $180,586 $160,739 $154,214 $ 98,560 $ 72,023
Ratio of Expenses to Average Net Assets...................... 1.89% 1.91% 2.08% 2.25% 2.24%
Ratio of Net Investment Income to Average Net Assets......... 9.42% 9.39% 10.07% 11.09% 13.73%
Portfolio Turnover Rate ..................................... 98% 153% 204% 206% 93%
</TABLE>

* On an annualized basis.

(a) On average month end shares outstanding.
(b) On December 22, 1994, John Hancock Advisers, Inc. became the investment
adviser of the Fund.
(c) Total investment return assumes dividend reinvestment and does not reflect
the effect of sales charges.
(d) Not annualized.

SEE NOTES TO FINANCIAL STATEMENTS.

11
<PAGE> 342
FINANCIAL STATEMENTS

John Hancock Funds - High Yield Bond Fund

THE SCHEDULE OF INVESTMENTS IS A COMPLETE LIST OF ALL SECURITIES OWNED BY THE
HIGH YIELD BOND FUND ON OCTOBER 31, 1995. IT'S DIVIDED INTO THREE MAIN
CATEGORIES: PUBLICLY TRADED BONDS, COMMON AND PREFERRED STOCKS AND WARRANTS, AND
SHORT-TERM INVESTMENTS. SHORT-TERM INVESTMENTS, WHICH REPRESENT THE FUND'S
"CASH" POSITION, ARE LISTED LAST.

SCHEDULE OF INVESTMENTS
October 31, 1995

- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
PAR VALUE
INTEREST S+P (000'S MARKET
ISSUER, DESCRIPTION RATE RATING** OMITTED) VALUE
- ------------------- -------- -------- --------- ------
<S> <C> <C> <C> <C>
PUBLICLY TRADED BONDS
AEROSPACE (2.42%)
GPA Group PLC
*Loan participation 09-30-97 (Ireland) (F)+...................... 7.180% B $ 1,856 $ 1,785,979
Rohr, Inc.,
*Sr Note 05-15-03................................................ 11.625 BB- 3,000 3,217,500
------------
5,003,479
------------
AUTOMOBILE/TRUCK (4.54%)
Fruehauf Trailer Corp.,
*Sr Note 04-30-02 (R)............................................ 14.750 B 4,000 4,060,000
Great Dane Holdings,
*Sr Sub Deb 08-01-01............................................. 12.750 B- 2,435 2,337,600
*Sub Deb 01-01-06................................................ 14.500 CCC 3,132 3,006,720
------------
9,404,320
------------
CABLE TV (4.99%)
Adelphia Communications Corp.,
*Sr Note 05-15-02................................................ 12.500 B 2,500 2,437,500
Australis Media Ltd.,
*Unit (Sr Sub Disc Note 05-15-03 & Warr.) (Australia) (F)........ Zero CCC 3,000 2,175,000
Cablevision Systems Corp.,
Sr Sub Deb 02-15-13............................................. 9.875 B 2,000 2,080,000
CF Cable TV Inc.,
Sr Sec 2nd Priority Note 02-15-05 (Canada) (F).................. 11.625 BB+ 1,000 1,080,000
Le Groupe Videotron Ltee,
*Sr Note 02-15-05 (Canada) (F)................................... 10.625 BB+ 1,000 1,060,000
Marcus Cable Co., L.P.,
*Sr Disc Note 12-15-05........................................... Zero B 1,500 890,625
Scandinavian Broadcasting System SA,
*Conv Sub Deb 08-01-05 (Netherlands) (F)......................... 7.250 B 555 593,850
------------
10,316,975
------------
COMPUTERS (1.82%)
Computervision Corp.,
*Sr Sub Note 08-15-99............................................ 11.375 CCC+ 2,000 2,090,000
Unisys Corp.,
*Credit Sensitive Note 07-01-97.................................. 13.500 BB- 850 858,500
*Sr Note 10-01-99................................................ 10.625 BB- 900 819,000
------------
3,767,500
------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

12
<PAGE> 343
FINANCIAL STATEMENTS

John Hancock Funds - High Yield Bond Fund

<TABLE>
<CAPTION>
PAR VALUE
INTEREST S+P (000'S MARKET
ISSUER, DESCRIPTION RATE RATING** OMITTED) VALUE
- ------------------- -------- -------- --------- ------
<S> <C> <C> <C> <C>
CONSTRUCTION (1.24%)
Primeco Inc.,
*Sr Sub Note 03-01-05............................................ 12.750% B $ 2,500 $ 2,575,000
------------
CONTAINERS (3.30%)
Gaylord Container Corp.,
*Sr Sub Disc Deb 05-15-05........................................ Zero B- 6,000 5,850,000
Stone Container Corp.,
*Sr Note 02-01-01................................................ 9.875 B+ 1,000 990,000
------------
6,840,000
------------
COSMETICS & TOILETRIES (0.96%)
Renaissance Cosmetics,
*Sr Note 08-15-01................................................ 13.750 B 2,000 1,990,000
------------
DRUGS (1.06%)
Amerisource Distribution Corp.,
Deb 07-15-05.................................................... 11.250 B 1,116 1,202,127
J.B. Williams Holdings, Inc.,
Sr Note 03-01-04................................................ 12.000 B 1,000 990,000
------------
2,192,127
------------
ELECTRONICS (1.67%)
Alliant Techsystems, Inc.,
*Sr Sub Note 03-01-03............................................ 11.750 B 1,375 1,505,625
Dictaphone Corp.,
*Sr Sub Note 08-01-05............................................ 11.750 B- 2,000 1,950,000
------------
3,455,625
------------
FOODS (1.14%)
Di Giorgio Corp.,
*Sr Note 02-15-03................................................ 12.000 B 3,000 2,370,000
------------
GLASS PRODUCTS (0.84%)
Owens-Illinois, Inc.,
*Sr Sub Note 04-01-99............................................ 10.250 B+ 1,700 1,746,750
------------
GOVERNMENTAL -- FOREIGN (0.94%)
Land & Agricultural Bank of South Africa,
*Bond 11-15-96 (South Africa) #.................................. 16.000 BB 7,000 1,943,437
------------
GOVERNMENTAL -- U.S. (0.97%)
United States Treasury,
*Bond 11-15-95................................................... 11.500 AAA 2,000 2,004,060
------------
INSURANCE (0.85%)
Home Holdings Inc.,
*Sr Note 12-15-98................................................ 7.750 B- 2,000 1,760,000
------------
LEISURE & RECREATION (8.43%)
Alliance Entertainment Corp.,
*Sr Sub Note 07-15-05 (R)........................................ 11.250 B- 500 502,500
GB Property Funding Corp.,
*1st Mtg Note 01-15-04........................................... 10.875 B+ 3,000 2,535,000
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

13
<PAGE> 344
FINANCIAL STATEMENTS

John Hancock Funds - High Yield Bond Fund

<TABLE>
<CAPTION>
PAR VALUE
INTEREST S+P (000'S MARKET
ISSUER, DESCRIPTION RATE RATING** OMITTED) VALUE
- ------------------- -------- -------- --------- ------
<S> <C> <C> <C> <C>
LEISURE & RECREATION (CONTINUED)
GNF Corp.,
*1st Mtg 04-01-03................................................ 10.625% BB $ 3,000 $ 2,617,500
Hollywood Casino Corp.,
*Sr Sec Note 11-01-03............................................ 12.750 B+ 2,000 1,875,000
Mohegan Tribal Gaming Authority,
*Sr Sec Note 11-15-02 (R)........................................ 13.500 B 1,800 1,885,500
Showboat, Inc.,
*Sr Sub Note 08-01-09............................................ 13.000 B 2,000 2,200,000
Station Casinos, Inc.,
*Sr Sub Note 06-01-03............................................ 9.625 B+ 1,000 955,000
Stratosphere Corp.,
*1st Mtg Note 05-15-02........................................... 14.250 B 600 640,500
Trump Taj Mahal Funding, Inc.,
*Deb 11-15-99.................................................... 11.350 CAA 5,000 4,250,000
------------
17,461,000
------------
METALS (4.34%)
Alpine Group, Inc., (The),
*Sr Note 07-15-03 (R)............................................ 12.250 B 4,000 3,790,000
Interlake Corp. (The),
*Sr Sub Deb 03-01-02............................................. 12.125 CCC+ 2,000 1,880,000
Kaiser Aluminum & Chemical Corp.,
*Sr Sub Note 02-01-03............................................ 12.750 B- 3,000 3,307,500
------------
8,977,500
------------
MOTION PICTURES (0.52%)
Act III Theaters, Inc.,
*Sr Sub Note 02-01-03............................................ 11.875 B- 1,000 1,070,000
------------
OIL & GAS (11.14%)
Dual Drilling Co.,
Sr Sub Note 01-15-04............................................ 9.875 B- 3,750 3,562,500
Falcon Drilling Co., Inc.,
Sr Note 01-15-01................................................ 9.750 B 2,500 2,550,000
Maxus Energy Corp.,
Deb 11-15-15.................................................... 11.500 BB- 2,000 2,055,000
Mesa Capital Corp.,
Discount Note 06-30-96.......................................... 12.750 CCC 516 482,460
Discount Note 06-30-98.......................................... 12.750 CCC+ 4,000 3,630,000
Nuevo Energy Co.,
Sr Sub Note 06-15-02............................................ 12.500 B- 4,000 4,350,000
TransAmerican Refining Corp.,
*Unit (1st Mtg Note 02-15-05 & Warr.)............................ 16.500 B- 1,500 1,665,000
TransTexas Gas Corp.,
*Sr Sec Note 06-15-02............................................ 11.500 BB- 2,500 2,612,500
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

14
<PAGE> 345
FINANCIAL STATEMENTS

John Hancock Funds - High Yield Bond Fund

<TABLE>
<CAPTION>
PAR VALUE
INTEREST S+P (000'S MARKET
ISSUER, DESCRIPTION RATE RATING** OMITTED) VALUE
- ------------------- -------- -------- --------- ------
<S> <C> <C> <C> <C>
OIL & GAS (CONTINUED)
Wilrig AS,
Sr Sec Note 03-15-04 (Norway) (F)............................... 11.250% B $ 2,000 $ 2,160,000
------------
23,067,460
------------
PAPER (4.38%)
APP International Finance Co. B.V.
*Gtd Sec Note 10-01-05 (Indonesia) (F)........................... 11.750 BB 750 763,125
Container Corp. Of America,
Sr Note Ser A 05-01-04.......................................... 11.250 B+ 2,000 2,105,000
Crown Packaging Holdings Ltd.,
Sr Note 11-01-00 (Canada) (F)................................... 10.750 B3 1,500 1,436,250
Data Documents Inc.,
*Sr Sec Note 07-15-02............................................ 13.500 B+ 2,000 2,170,000
Indah Kiat International Finance Co.
Sr Sec Note 06-15-06 (Indonesia) (F)............................ 12.500 BB 2,500 2,600,000
------------
9,074,375
------------
PUBLISHING (1.49%)
American Media Operation, Inc.,
*Sr Sub Note 11-15-04............................................ 11.625 B 3,000 3,090,000
------------
RETAIL (6.38%)
Decorative Home Accents, Inc.,
*Unit (Sr Note 06-30-02 & Common Stock, Class F) (R)............. 13.000 B 1,000 1,000,000
Flagstar Corp.,
*Sr Sub Deb 11-01-04............................................. 11.250 CCC+ 2,750 1,966,250
Grand Union Corp.,
*Sr Note 09-01-04................................................ 12.000 B- 5,000 4,825,000
Petro PSC / Properties, L.P.,
*Sr Note 06-01-02................................................ 12.500 B 950 947,625
Specialty Retailers, Inc.,
*Sr Sub Note 08-15-03............................................ 11.000 B- 2,000 1,870,000
Star Markets Co.,
*Sr Sub Note 11-01-04............................................ 13.000 CCC+ 2,600 2,600,000
------------
13,208,875
------------
STEEL (4.80%)
Geneva Steel Co.,
Sr Note 01-15-04................................................ 9.500 B 2,000 1,450,000
GS Technologies Operating Co., Inc.,
*Sr Note 10-01-05................................................ 12.250 B 1,000 1,010,000
NS Group, Inc.,
*Unit (Sr Sec Note 07-15-03 & Warr.)............................. 13.500 B- 2,000 1,660,000
Sheffield Steel Corp.,
Sr Note 11-01-01................................................ 12.000 B 2,000 1,830,000
Weirton Steel Corp.,
Sr Note 03-01-98................................................ 11.500 B 1,500 1,541,250
*Sr Note 06-01-05 (R)............................................ 10.750 B 2,650 2,444,625
------------
9,935,875
------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

15
<PAGE> 346
FINANCIAL STATEMENTS

John Hancock Funds - High Yield Bond Fund

<TABLE>
<CAPTION>
PAR VALUE
INTEREST S+P (000'S MARKET
ISSUER, DESCRIPTION RATE RATING** OMITTED) VALUE
- ------------------- -------- -------- --------- ------
<S> <C> <C> <C> <C>
TELECOMMUNICATIONS (2.60%)
A+ Communications Inc.,
*Sr Sub Note 11-01-05............................................ 11.875% CCC+ $ 1,500 $ 1,500,000
Century Communications, Corp.,
Sr Sub Deb 10-15-03............................................. 11.875 B+ 700 743,750
NEXTEL Communications, Inc.,
Sr Discount Note 08-15-04....................................... Zero CCC- 2,000 1,010,000
ProNet Inc.,
*Sr Sub Deb 06-15-05 (R)......................................... 11.875 B- 2,000 2,135,000
------------
5,388,750
------------
TEXTILES (0.58%)
Apparel Ventures Inc.,
*Sr Note 12-31-00................................................ 12.250 B- 1,500 1,200,000
------------
TRANSPORTATION (8.39%)
AM General Corp.,
*Sr Note 05-01-02 (R)............................................ 12.875 B+ 2,000 2,000,000
Burlington Motor Holdings Inc.,
*Sr Sub Note 11-01-03............................................ 11.500 CCC- 2,000 640,000
CHC Helicopter Corp.,
Sr Sub Note 07-15-02 (Canada) (F)............................... 11.500 B- 1,250 1,103,125
Jet Equipment Trust Ser. 1995-B,
*Cert 08-15-14 (R)............................................... 10.910 BB+ 1,500 1,581,300
Johnstown America Industries, Inc.,
*Sr Sub Note 08-15-05............................................ 11.750 B 2,000 1,860,000
NWA Trust,
*Sub Note 06-21-08............................................... 13.875 B 4,075 4,686,250
OMI Corp.,
*Sr Note 11-01-03................................................ 10.250 B- 3,000 2,655,000
USAir Inc.,
*Sr Deb 04-01-00................................................. 12.875 CCC+ 1000 1,020,000
*Sr Note 02-01-01................................................ 9.625 CCC+ 2,000 1,820,000
------------
17,365,675
------------
UTILITIES (4.68%)
Columbia Gas System, Inc. (The),
*Deb 08-01-93 (A)................................................ 9.000 D 3,000 4,290,000
Eskom
*Bond 05-01-96 (South Africa) #.................................. 12.000 B 13,000 3,522,627
Petroleum Heat & Power Co., Inc.,
*Sub Deb 02-01-05................................................ 12.250 B+ 1,700 1,874,250
------------
9,686,877
------------
TOTAL PUBLICLY TRADED BONDS
(Cost $174,275,586) (84.47%) 174,895,660
------- ------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.

16
<PAGE> 347

FINANCIAL STATEMENTS

John Hancock Funds - High Yield Bond Fund

<TABLE>
<CAPTION>
NUMBER OF SHARES MARKET
ISSUER, DESCRIPTION UNITS OR WARRANTS VALUE
- ------------------- ----------------- ------
<S> <C> <C>
COMMON AND PREFERRED STOCKS AND WARRANTS
*AVI Holdings, Inc., Warrants (R) ***.................................................... 1,500 $ 7,500
Browne Bottling Co., Warrants ***....................................................... 237 237
Casino Magic Finance Corp., Warrants ***................................................ 9,000 90
CHC Helicopter Corp., Warrants (Canada) (F) ***......................................... 16,000 16,000
*Chevy Chase Savings Bank FSB, 13.00% Ser A Pref Stock................................... 35,000 1,054,375
Crown Packaging Holdings Ltd., Common Stock (Canada) (F) ***............................ 2,750 52,250
*Data Documents Inc., Warrants ***....................................................... 2,000 170,000
Farm Fresh Holdings Corp., Common Stock (Class B) ***................................... 1,000 15,000
*Grand Union Co., Common Stock ***....................................................... 37,000 397,750
*Northwest Airlines Corp., Common Stock (Class A) ***.................................... 120,000 4,815,000
*PanAmSat Corp., 12.75% Mandatory Exchangeable Sr Red Pref Stock......................... 1,802 1,964,180
*Qantas Airways Ltd., Common Stock American Depositary Shares (ADS)(Australia) (F)(R).... 32,200 555,450
*Renaissance Cosmetics, Warrants ***..................................................... 4,000 90,000
Sheffield Steel Corp., Warrants ***..................................................... 22,500 67,500
*Swissair Schweizerische Luftverkehr AG Reg Shares, (Switzerland) (F)***................. 3,400 2,139,003
*UAL Corp., 12.25% Ser B Depositary Shares Pref Stock.................................... 75,000 2,259,375
*USX-Delhi Group, Common Stock........................................................... 60,000 532,500
Valero Energy Corp., 6.50% Pref Stock................................................... 35,400 1,781,063
-----------
15,917,273
-----------
TOTAL COMMON AND PREFERRED STOCKS AND WARRANTS
(Cost $11,926,485) (7.69%) 15,917,273
------- -----------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

17
<PAGE> 348

FINANCIAL STATEMENTS

John Hancock Funds - High Yield Bond Fund

<TABLE>
<CAPTION>
PAR VALUE
INTEREST (000'S MARKET
ISSUER, DESCRIPTION RATE OMITTED) VALUE
- ------------------- -------- --------- ------
<S> <C> <C> <C>
SHORT-TERM INVESTMENTS
JOINT REPURCHASE AGREEMENT (3.19%)
Investment in a joint repurchase agreement transaction
with SBC Capital Markets Inc., Dated 10-31-95, Due 11-01-95
(secured by U.S. Treasury Bond, 8.750%, due 05-15-17,
and U.S. Treasury Note, 5.750% , due 09-30-97) - Note A......................... 5.890% $6,605 $ 6,605,000
------------
CORPORATE SAVINGS ACCOUNT (0.06%)
Investors Bank & Trust Company
Daily Interest Savings Account
Current Rate 3.00%.............................................................. 126,996
------------
TOTAL SHORT-TERM INVESTMENTS ( 3.25%) 6,731,996
------ ------------
TOTAL INVESTMENTS (95.41%) $197,544,929
====== ============
</TABLE>

NOTES TO THE SCHEDULE OF INVESTMENTS
(A)Non-income producing - issuer filed for protection under the Federal
Bankruptcy Code and has filed a comprehensive reorganization plan.
(F)Parenthetical disclosure of a foreign country in the security description
represents country of a foreign issuer, however, security is U.S. dollar
denominated.
#Par value of foreign bonds is expressed in local currency, as shown
parenthetically in security description.
(R)These securities are exempt from registration under Rule 144A of the
Securities Act of 1933. Such securities may be resold, normally to qualified
institutional buyers, in transactions exempt from registration. Rule 144A
securities amounted to $19,961,875 as of October 31, 1995. See note A of the
Notes to Financial Statements for valuation policy.
+A portion of this security having an aggregate value of $378,435 or 0.18% of
the Fund's net assets, has been purchased on a where required basis.
The Fund has instructed its Custodian Bank to segregate assets with a current
value at least equal to its unfunded commitment. Accordingly, the market
value of $400,812 of U.S. Treasury Bond 11.50%, 11/15/95 has been segregated
to cover the unfunded commitment. The sale of this security has certain
restrictions.
*Securities, other than short-term investments, newly added to the portfolio
during the year ended October 31, 1995.
**Credit ratings are rated by Moody's Investor Services or John Hancock
Advisers, Inc. where Standard and Poors ratings are not available and are
unaudited.
***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.

SEE NOTES TO FINANCIAL STATEMENTS.

18
<PAGE> 349
FINANCIAL STATEMENTS

John Hancock Funds - High Yield Bond Fund

PORTFOLIO CONCENTRATION
- -------------------------------------------------------------------------------

THE HIGH YIELD BOND FUND INVESTS PRIMARILY IN SECURITIES ISSUED IN THE UNITED
STATES OF AMERICA. THE PERFORMANCE OF THIS FUND IS CLOSELY TIED TO THE ECONOMIC
AND FINANCIAL CONDITIONS OF THE COUNTRIES WITHIN WHICH IT INVESTS. 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
OCTOBER 31, 1995 ASSIGNED TO COUNTRY CATEGORIES.

<TABLE>
<CAPTION>
MARKET VALUE
AS A PERCENTAGE
OF FUND'S
COUNTRY DIVERSIFICATION NET ASSETS
- ----------------------- ---------------
<S> <C>
Australia........................................................................................ 1.33%
Canada........................................................................................... 2.29
Indonesia........................................................................................ 1.62
Ireland.......................................................................................... 0.86
Netherlands...................................................................................... 0.29
Norway........................................................................................... 1.04
South Africa..................................................................................... 2.64
Switzerland...................................................................................... 1.03
United States.................................................................................... 84.31
-----
TOTAL INVESTMENTS 95.41%
=====
</TABLE>

<TABLE>
<CAPTION>
MARKET VALUE
AS A PERCENTAGE
OF FUND'S
QUALITY DISTRIBUTION NET ASSETS
- -------------------- ---------------
<S> <C>
AAA.............................................................................................. 0.97%
BAA.............................................................................................. 1.26
BA............................................................................................... 11.17
B................................................................................................ 63.90
CAA.............................................................................................. 7.17
-----
TOTAL BONDS 84.47%
=====
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

19
<PAGE> 350
NOTES TO FINANCIAL STATEMENTS

John Hancock Funds - High Yield Bond Fund

NOTE A --
ACCOUNTING POLICIES
John Hancock Series, Inc. (the "Corporation") is a diversified, open-end
management investment company, registered under the Investment Company Act of
1940. The Corporation consists of six series portfolios: John Hancock High
Yield Bond Fund (the "Fund"), John Hancock Emerging Growth Fund, John Hancock
Global Resources Fund, John Hancock Government Income Fund, John Hancock High
Yield Tax-Free Fund, and John Hancock Money Market Fund (collectively the
"Funds"). The Board of Directors may authorize the creation of additional Funds
from time to time to satisfy various investment objectives. Effective December
22, 1994 (see Note B), the Corporation and Funds changed names by replacing the
word Transamerica with John Hancock.

The Board of Directors have authorized the issuance of two classes of the
Fund, designated as Class A and Class B. The shares of each class represent an
interest in the same portfolio of investments of the Fund and have equal rights
to voting, redemption, dividends, and liquidation, except that certain expenses,
subject to the approval of the Board of Directors, 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 the terms of a
distribution plan have exclusive voting rights regarding such distribution plan.
Class A Shares are subject to an initial sales charge of up to 4.50% and a 12b-1
distribution plan. Prior to May 15, 1995, the maximum sales charge was 4.75%.
Class B Shares are subject to a contingent deferred sales charge and a separate
12b-1 distribution plan. Significant accounting policies of the Fund are as
follows:

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.

At October 31, 1995, open forward foreign currency buy contracts were as
follows:

<TABLE>
<CAPTION>
PRINCIPAL AMOUNT EXPIRATION UNREALIZED
CURRENCY COVERED BY CONTRACT MONTH DEPRECIATION
- -------- ------------------- ---------- ------------
<S> <C> <C> <C>
SWISS FRANC 3,000,000 NOV 95 (106,769)
SOUTH AFRICAN RAND 988,666 NOV 95 ( 824)
SOUTH AFRICAN RAND 3,967,459 NOV 95 ( 5,949)
-------
(113,542)
=======
</TABLE>

20
<PAGE> 351
NOTES TO FINANCIAL STATEMENTS

John Hancock Funds - High Yield Bond Fund

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.

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
investments, to its shareholders. Therefore, no federal income tax provision is
required. For federal income tax purposes, the Fund has $9,184,252 of a capital
loss carryforward available, to the extent provided by regulations, to offset
future net realized capital gains. If such carryforwards are used by the Fund,
no capital gain distribution will be made. The carryforward expires 12/31/2002.
The Fund's tax year end is December 31.

DIVIDENDS, DISTRIBUTIONS AND INTEREST Interest income on investment securities
is recorded on the accrual basis. Foreign income may be subject to foreign
withholding tax and is 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 principles. 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 will be in the same amount, except for effect of expenses that
may be applied differently to each class as explained previously.

CLASS ALLOCATIONS Income, common expenses and realized and unrealized gains
(losses) are determined 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 appropriated net assets of each class and the specific expense rate(s)
applicable to each class.

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, to
0.6250% of the first $75,000,000 of the

21
<PAGE> 352
NOTES TO FINANCIAL STATEMENTS

John Hancock Funds - High Yield Bond Fund

Fund's average daily net asset value, 0.5625% of the next $75,000,000, and
0.5000% of the Fund's average daily net asset value in excess of $150,000,000.
This fee structure is consistent with the former agreement with TFMC. For the
period ended October 31, 1995, the advisory fee earned by the Adviser and TFMC
amounted to $897,349 and $162,374, respectively, resulting in a total fee of
$1,059,723.

On December 22, 1994 John Hancock Funds, Inc. ("JH Funds"), a wholly-owned
subsidiary of the Adviser, became the principal underwriter of the Fund. Prior
to this date, Transamerica Fund Distributors, Inc. ("TFD") served as the
principal underwriter and distributor of the Fund. For the period ended October
31, 1995, JH Funds and TFD received net sales charges of $239,378 with regard to
sales of Class A shares. Out of this amount, $19,285 was retained and used for
printing prospectuses, advertising, sales literature and other purposes, $93,088
was paid as sales commissions to unrelated broker-dealers and $127,005 was paid
as sales commissions to sales personnel of John Hancock Distributors, Inc.
("Distributors"), Tucker Anthony, Incorporated ("Tucker Anthony") and Sutro &
Co., Inc. ("Sutro"). 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
Tucker Anthony and Sutro, all of which are broker-dealers.

Class B shares which are redeemed within six years of purchase will be
subject to a contingent deferred sales charge ("CDSC") at declining rates
beginning at 4.75% 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, formerly TFD, 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
October 31, 1995, contingent deferred sales charges amounted to $418,834.

In addition, to compensate JH Funds for the services it provides as
distributor of shares of the Fund, the Fund has adopted a Distribution Plan with
respect to Class A and Class B shares pursuant to Rule 12b-1 under the
Investment Company Act of 1940. Accordingly, the Fund will make payments for
distribution and service expenses which in total will not exceed on an annual
basis 0.25% of the Fund's average daily net assets attributable to Class A
shares and 1.00% of the Fund's average daily net assets attributable to Class B
shares, to reimburse JHFunds 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. In order to comply with this
rule, the 12b-1 fee on Class B shares were decreased to 0.95% effective July 1,
1995. This fee structure and plan is similar to the former arrangement with TFD.

The Board of Directors approved a shareholder servicing agreement between
the Fund and John Hancock Investor Services Corporation ("Investor Services"), a
wholly owned subsidiary of The Berkeley Financial Group, for the period between
December 22, 1994 and May 12, 1995, inclusive under which Investor Services
processed telephone transactions on behalf of the Fund. As of May 15, 1995, the
Fund entered into a full service transfer agent agreement with Investor
Services. Prior to this date The Shareholder Services Group was the

22
<PAGE> 353
NOTES TO FINANCIAL STATEMENTS

John Hancock Funds - High Yield Bond Fund

transfer agent. The Fund will pay Investor Services a fee based on the number of
shareholder accounts and certain out-of pocket expenses.

A partner with Baker & Botts was an officer of the Corporation until
December 22, 1994. During the period ended October 31, 1995, legal fees paid to
Baker & Botts amounted to $2,081.

Mr. Edward J. Boudreau, Jr. is a director and officer of the Adviser and
its affiliates as well as Director of the Corporation. The compensation of
unaffiliated Directors is borne by the Fund. Effective with the fees paid for
1995, the unaffiliated Directors 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 obligations of the
U.S. government and its agencies and short-term obligations, during the period
ended October 31, 1995 aggregated $196,154,072 and $172,954,652, respectively.
Purchases and proceeds from sales of obligations of the U.S. government and its
agencies, during the period ended October 31, 1995 aggregated $15,228,125 and
$13,144,980, respectively.

The cost of investments owned at October 31, 1995 for Federal income tax
purposes was $192,807,071. Gross unrealized appreciation and depreciation of
investments aggregated $9,964,856, and $5,353,994, respectively, resulting in
net unrealized appreciation of $4,610,862.

23
<PAGE> 354
John Hancock Funds - High Yield Bond Fund

REPORT OF ERNST & YOUNG LLP,
INDEPENDENT AUDITORS
To the Board of Directors and Shareholders
of John Hancock Series, Inc. --
John Hancock High Yield Bond Fund

We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of the John Hancock High Yield Bond Fund (the
"Fund"), (formerly the Transamerica High Yield Bond Fund), one of the portfolios
constituting John Hancock Series, Inc. (the "Corporation") (formerly
Transamerica Series, Inc.), as of October 31, 1995, and the related statement of
operations for the year then ended, the statements of changes in net assets for
each of the two years in the period then ended, and the financial highlights for
each of the periods indicated therein. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.

In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of the
John Hancock High Yield Bond Fund portfolio of John Hancock Series, Inc. at
October 31, 1995, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended,
and the financial highlights for each of the indicated periods, in conformity
with generally accepted accounting principles.

/s/Ernst & Young LLP

Boston, Massachusetts
December 15, 1995

24
<PAGE> 355

FINANCIAL STATEMENTS

John Hancock Funds - High Yield Tax-Free Fund

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 ASSETS AND LIABILITIES
October 31, 1995

- -------------------------------------------------------------------------------

<TABLE>
<S> <C>
ASSETS:
Investments at value -- Note C:
Bonds (cost -- $164,870,949).......................... $170,574,382
Short-term investments (cost -- $2,032,000)........... 2,032,000
Corporate savings account............................. 57,675
------------
172,664,057

Receivable for shares sold............................. 23,977
Interest receivable.................................... 3,665,664
Prepaid expenses....................................... 30,848
Other assets........................................... 7,940
------------
Total Assets......................... 176,392,486
===================================================

LIABILITIES:
Payable for investments purchased...................... 6,792,819
Payable for shares repurchased......................... 305
Dividend payable....................................... 25,707
Payable to John Hancock Advisers, Inc. and
affiliates -- Note B.................................. 113,923
------------
Total Liabilities.................... 6,932,754
===================================================

NET ASSETS:
Capital paid-in........................................ 167,739,546
Accumulated net realized loss on investments and
financial futures contracts........................... (3,983,247)
Net unrealized appreciation of investments 5,703,433
------------
Net Assets........................... $169,459,732
===================================================
---------------------------------------------------

NET ASSET VALUE PER SHARE:
(Based on net asset values and shares of beneficial
interest outstanding -- 125,000,000 shares
authorized with $0.01 per share par value,
respectively) Class A -- $14,225,390/1,502,547......... $ 9.47
=====================================================================
---------------------------------------------------------------------

Class B -- $155,234,342/16,392,624..................... $ 9.47
=====================================================================
---------------------------------------------------------------------
MAXIMUM OFFERING PRICE PER SHARE*
Class A -- ($9.47 x 104.71%)........................... $ 9.92
=====================================================================
---------------------------------------------------------------------
</TABLE>

* On single retail sales of less than $100,000. On sales of $100,000 or more and
on group sales the offering price is reduced.

STATEMENT OF OPERATIONS
Year ended October 31, 1995

- -------------------------------------------------------------------------------

<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest................................................ $12,608,702
-----------
Expenses:
Investment management fee -- Note B.................... 991,659
Distribution/service fee -- Note B
Class A.............................................. 37,440
Class B.............................................. 1,519,671
Transfer agent fee..................................... 160,834
Custodian fee.......................................... 48,182
Registration and filing fees........................... 46,326
Auditing fee........................................... 40,910
Printing............................................... 30,961
Trustees' fees......................................... 22,735
Advisory board fee..................................... 17,219
Miscellaneous.......................................... 13,260
Legal fees............................................. 12,158
-----------
Total Expenses........................ 2,941,355
---------------------------------------------------
Net Investment Income................. 9,667,347
===================================================

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FINANCIAL FUTURES CONTRACTS
Net realized loss on investments sold................... (808,622)
Net realized loss on financial futures contracts (1,254,931)
Change in net unrealized appreciation/depreciation
of investments......................................... 15,034,119
-----------
Net Realized and Unrealized
Gain on Investments and
Financial Futures Contracts........... 12,970,566
---------------------------------------------------
Net Increase in Net Assets
Resulting from Operations............. $22,637,913
===================================================
---------------------------------------------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

8
<PAGE> 356

FINANCIAL STATEMENTS

John Hancock Funds - High Yield Tax-Free Fund

STATEMENT OF CHANGES IN NET ASSETS

- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
------------------------------
1995 1994
------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income .................................................. $ 9,667,347 $ 8,040,548
Net realized loss on investments sold and financial futures contracts .. ( 2,063,553) ( 1,459,716)
Change in net unrealized appreciation/depreciation of investments ...... 15,034,119 ( 14,473,003)
------------- -------------
Net Increase (Decrease) in Net Assets Resulting from Operations ....... 22,637,913 ( 7,892,171)
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income:
Class A** -- ($0.5780 and $0.4800 per share, respectively) ............ (952,176) ( 369,015)
Class B -- ($0.5130 and $0.4800 per share, respectively) .............. ( 8,715,173) ( 7,671,533)
Distributions from net realized gain on investments
Class B -- (none and $0.19 per share, respectively) ................... -- ( 1,980,359)
Distributions in excess of net investment income
Class A** -- ($0.0384 and $0.0900 per share, respectively) ............ (63,196) (67,471)
Class B -- ($0.0340 and $0.0700 per share, respectively) .............. (578,424) ( 1,136,918)
------------- -------------
Total Distributions to Shareholders ................................. ( 10,308,969) ( 11,225,296)
------------- -------------

FROM FUND SHARE TRANSACTIONS -- NET* ..................................... ( 9,338,914) 72,145,259
------------- -------------

NET ASSETS:
Beginning of period .................................................... 166,469,702 113,441,910
------------- -------------
End of period .......................................................... $169,459,732 $166,469,702
============= =============
</TABLE>

* ANALYSIS OF FUND SHARE TRANSACTIONS:

<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
--------------------------------------------------------
1995 1994
-------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
CLASS A **
Shares sold.................................................. 471,510 $ 4,304,187 1,811,428 $16,937,949
Shares issued to shareholders in reinvestment
of distributions........................................... 40,880 373,017 14,913 136,310
---------- ------------ ----------- ------------
512,390 4,677,204 1,826,341 17,074,259
Less shares repurchased...................................... ( 755,291) ( 6,954,380) ( 80,893) ( 741,733)
---------- ------------ ----------- ------------
Net increase (decrease)...................................... ( 242,901) ($ 2,277,176) 1,745,448 $16,332,526
========== ============ =========== ============
CLASS B
Shares sold.................................................. 2,984,185 $26,948,744 7,988,008 $76,547,531
Shares issued to shareholders in reinvestment
of distributions........................................... 341,251 3,125,237 446,841 4,233,508
---------- ------------ ----------- ------------
3,325,436 30,073,981 8,434,849 80,781,039
Less shares repurchased...................................... (4,059,955) ( 37,135,719) ( 2,671,603) ( 24,968,306)
---------- ------------ ----------- ------------
Net increase (decrease)...................................... ( 734,519) ($ 7,061,738) 5,763,246 $55,812,733
========== ============ =========== ============
</TABLE>

** Class A shares commenced operations on December 31, 1993

SEE NOTES TO FINANCIAL STATEMENTS.

9
<PAGE> 357
FINANCIAL STATEMENTS

John Hancock Funds - High Yield Tax-Free Fund

FINANCIAL HIGHLIGHTS

Selected data for a share of beneficial interest outstanding throughout the
periods indicated, investment returns, key ratios and supplemental data are
listed as follows:

- -------------------------------------------------------------------------------

<TABLE>
<CAPTION>
PERIOD FROM
DECEMBER 31, 1993
(COMMENCEMENT OF
YEAR ENDED OPERATIONS)TO
OCTOBER 31, OCTOBER 31,
1995(b) 1994
------- -------
<S> <C> <C>
CLASS A
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ...................................................... $ 8.82 $ 9.85
-------- --------
Net Investment Income ..................................................................... 0.57 0.48(a)
Net Realized and Unrealized Gain (Loss) on Investments Sold and
Financial Futures Contracts ............................................................. 0.70 ( 0.94)
-------- --------
Total from Investment Operations ......................................................... 1.27 ( 0.46)
-------- --------
Less Distributions:
Dividends from Net Investment Income ...................................................... ( 0.58) ( 0.48)
Distributions in Excess of Net Investment Income .......................................... ( 0.04) ( 0.09)
-------- --------
Total Distributions ...................................................................... ( 0.62) ( 0.57)
-------- --------
Net Asset Value, End of Period ............................................................ $ 9.47 $ 8.82
======== ========
Total Investment Return at Net Asset Value (c) ............................................ 14.85% 4.96%(d)

RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted) ................................................. $14,225 $15,401
Ratio of Expenses to Average Net Assets ................................................... 1.06% 1.15%*
Ratio of Net Investment Income to Average Net Assets ...................................... 6.36% 6.08%*
Portfolio Turnover Rate ................................................................... 64% 62%
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

<PAGE> 358

FINANCIAL STATEMENTS

John Hancock Funds - High Yield Tax-Free Fund

FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
-------------------------------------------------------
1995(b) 1994 1993 1992 1991
-------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
CLASS B
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period .......................... $ 8.82 $ 9.98 $ 9.39 $ 9.31 $ 9.07
-------- -------- -------- ------- -------
Net Investment Income ......................................... 0.51 0.48 0.53 0.55 0.54
Net Realized and Unrealized Gain (Loss) on Investments Sold and
Financial Futures Contracts .................................. 0.69 ( 0.90) 0.72 0.17 0.34
-------- -------- -------- ------- -------
Total from Investment Operations ............................. 1.20 ( 0.42) 1.25 0.72 0.88
-------- -------- -------- ------- -------
Less Distributions
Dividends from Net Investment Income .......................... ( 0.51) ( 0.48) ( 0.56) ( 0.55) ( 0.54)
Distributions in Excess of Net Investment Income .............. ( 0.04) ( 0.07) -- -- --
Distributions from Net Realized Gain on Investments Sold ...... -- ( 0.19) ( 0.10) ( 0.09) PPP
Distributions from Capital Paid-in ............................ -- -- -- -- (0.10)
-------- -------- -------- ------- -------
Total Distributions .......................................... ( 0.55) ( 0.74) ( 0.66) ( 0.64) ( 0.64)
-------- -------- -------- ------- -------
Net Asset Value, End of Period ................................ $ 9.47 $ 8.82 $ 9.98 $ 9.39 $ 9.31
======== ======== ======== ======= =======
Total Investment Return at Net Asset Value (c) ............... 13.99% ( 4.44%) 13.69% 7.89% 10.07%

RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted) ..................... $155,234 $151,069 $113,442
Ratio of Expenses to Average Net Assets ....................... 1.79% 1.85% 2.06%
Ratio of Net Investment Income to Average Net Assets .......... 5.61% 5.36% 5.23%
Portfolio Turnover Rate ....................................... 64% 62% 100%
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

11
<PAGE> 359

FINANCIAL STATEMENTS

John Hancock Funds - High Yield Tax-Free Fund

SCHEDULE OF INVESTMENTS

October 31, 1995

- -------------------------------------------------------------------------------

THE SCHEDULE OF INVESTMENTS IS A COMPLETE LIST OF ALL SECURITIES OWNED BY HIGH
YIELD TAX-FREE FUND ON OCTOBER 31, 1995. IT'S DIVIDED INTO TWO MAIN CATEGORIES:
TAX-EXEMPT LONG-TERM BONDS AND SHORT-TERM INVESTMENTS. THE BONDS ARE FURTHER
BROKEN DOWN BY STATES. UNDER EACH STATE IS A LIST OF THE SECURITIES OWNED BY THE
FUND. SHORT-TERM INVESTMENTS, WHICH REPRESENT THE FUND'S "CASH" POSITION, ARE
LISTED LAST.

<TABLE>
<CAPTION>
PAR VALUE YIELD
INTEREST MATURITY S&P (000'S MARKET AT
STATE, ISSUER, DESCRIPTION RATE DATE RATING OMITTED) VALUE MARKET+
- -------------------------- -------- -------- ------ -------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
TAX-EXEMPT LONG-TERM BONDS
CALIFORNIA (14.98%)
Fontana, County of,
Special Tax Rev Community Facility District No 90-3 Empire
Center..................................................... 8.500% 04-01-21 B+*** $7,775 $ 7,444,562 8.88%
Foothill/Eastern Transportation Corridor Agency,
Toll Rd Rev Sr Lien Cap Allocation Ser A................... 0.000 01-01-18 BBB- *7,950 1,771,101 6.89
Toll Rd Rev Fixed Rate Current Int Ser 1995A............... 6.000 01-01-34 BBB- *4,850 4,580,340 6.35
San Bernardino, County of,
Cert of Part Medical Center Fin Proj....................... 5.500 08-01-17 A- *4,500 4,066,515 6.09
South Orange County Public Financing Auth,
Spec Tax Rev Levrrs Inflos................................. 5.700# 08-15-17 AAA*** *7,500 7,528,125 5.68
----------
25,390,643
----------
COLORADO (6.29%)
Arapahoe County Capital Improvement Trust Fund,
Highway Rev Ser E-470...................................... 6.950 08-31-20 Baa*** *5,000 5,269,050 6.60
Denver, City And County of,
Airport Sys Rev Ser 1992A.................................. 7.250 11-15-25 BBB 5,000 5,387,450 6.73
----------
10,656,500
----------
DISTRICT OF COLUMBIA (0.60%)
District of Columbia,
Cert of Part............................................... 7.300 01-01-13 B- 1,000 1,024,660 7.12
----------
FLORIDA (8.35%)
Florida Housing Finance Agency,
Southlake Apartments Proj Ser D Remarketed 6-1-1993........ 8.400 10-01-12 BBB-*** 3,300 3,429,459 8.08
Hillsborough County Aviation Auth,
Rev Special Purpose Facility Improv US Air Proj............ 8.600 01-15-22 B- 3,900 4,224,909 7.94
Homestead, City of,
Ind'L Development Rev Community Rehab Proj Ser A........... 7.950 11-01-18 BB*** 4,290 4,351,948 7.84
South Indian River Water Control District,
Rev Egret Landing Proj Section 15 Phase 1.................. 7.500 11-01-18 BB+*** 2,000 2,148,440 6.98
----------
14,154,756
----------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

12
<PAGE> 360

FINANCIAL STATEMENTS

John Hancock Funds - High Yield Tax-Free Fund

<TABLE>
<CAPTION>
PAR VALUE YIELD
INTEREST MATURITY S&P (000'S MARKET AT
STATE, ISSUER, DESCRIPTION RATE DATE RATING OMITTED) VALUE MARKET+
- -------------------------- -------- -------- ------ -------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
ILLINOIS (7.18%)
Bedford Park, City of,
Tax Increment Rev Sr Lien Mark IV Proj..................... 9.750% 03-01-12 BB*** $1,000 $ 1,138,640 8.56%
Chicago, City of,
Chicago-O'Hare Int'L Airport Spec Facil Rev Ref American
Airlines Inc............................................... 8.200 12-01-24 BB+ *1,500 1,725,345 7.13
Illinois Development Finance Auth,
Solid Waste Disposal Rev Facility Ford Heights Waste
Tire Proj.................................................. 7.875 04-01-11 BB-*** 3,035 2,949,231 8.10
Illinois Health Facilities Auth,
Rev Fairview Obligated Group Proj Ser A.................... 9.500 10-01-22 BB*** 2,500 2,715,300 8.75
Rev Fairview Obligated Group Proj Ser B.................... 9.000 10-01-22 BB*** 1,500 1,584,375 8.52
Round Lake Beach, City of,
Tax Increment Rev Ref...................................... 7.500 12-01-13 BB+*** 2,000 2,057,600 7.29
-----------
12,170,491
-----------
IOWA (0.13%)
Iowa Finance Auth,
Hlth Care Facil Rev Mercy Health - Health
Initiatives Proj........................................... 9.950 07-01-19 BB*** 200 213,808 9.31
-----------
KANSAS (1.25%)
Prairie Village, City of,
Rev Ser A Claridge Court Proj.............................. 8.750 08-15-23 BBB-*** 2,000 2,125,200 8.23
-----------
KENTUCKY (3.14%)
Kenton County Airport Board,
Rev Spec Facil Delta Airlines Inc Ser 1985................. 7.800 12-01-15 BB 2,500 2,669,000 7.31
Rev Spec Facil Delta Airlines Proj Ser B................... 7.250 02-01-22 BB 2,500 2,644,050 6.86
-----------
5,313,050
-----------
MARYLAND (1.22%)
Baltimore, County of,
Poll Control Rev Ref Bethlehem Steel Corp Proj............. 7.500 06-01-15 BB-*** 2,000 2,072,200 7.24
-----------
MASSACHUSETTS (3.27%)
Massachusetts Industrial Finance Agency,
Rev Ser A Southeastern Mass Proj........................... 9.000 07-01-15 BB*** 2,800 3,067,680 8.21
Massachusetts Port Auth,
Spec Proj Rev Harborside Hyatt Hotel Remarketed 6-20-1991.. 10.000 03-01-26 BB*** 2,200 2,467,410 8.92
-----------
5,535,090
-----------
MICHIGAN (7.16%)
Michigan State Strategic Fund Ltd,
Resource Recovery Rev Great Lakes Pulp & Fibre Proj........ 10.250 12-01-16 BB*** *3,000 3,137,010 9.80
Monroe, County of,
Poll Control Rev Ser A Detroit Edison Co................... 10.500 12-01-16 BBB 250 258,815 10.14
Waterford Township Economic Development Corp,
Rev Ltd Oblig Canterbury Hlth Care......................... 8.375 07-01-23 BB+*** 3,500 3,615,080 8.11
Wayne Charter County Airport,
Spec Airport Facil Rev Ser 1995**.......................... 6.750 12-01-15 BB+*** *5,125 5,125,000 6.75
-----------
12,135,905
-----------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

13
<PAGE> 361

FINANCIAL STATEMENTS

John Hancock Funds - High Yield Tax-Free Fund

<TABLE>
<CAPTION>
PAR VALUE YIELD
INTEREST MATURITY S&P (000'S MARKET AT
STATE, ISSUER, DESCRIPTION RATE DATE RATING OMITTED) VALUE MARKET+
- -------------------------- -------- -------- ------ --------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
MISSOURI (0.63%)
Lees Summit Industrial Development Auth,
Hlth Facil Ref Rev & Imp John Knox Vlg Proj........ 7.125% 08-15-12 A-*** $1,000 $ 1,060,130 6.72%
-----------
NEW HAMPSHIRE (1.88%)
New Hampshire Economic Development Auth,
Rev Ref Poll Control Central Maine Pwr............. 7.375 05-01-14 BB *3,000 3,176,880 6.96
-----------
NEW JERSEY (1.49%)
New Jersey Economic Development Auth,
Rev Ref Ser J Holt Hauling Proj.................... 8.500 11-01-23 BBB-*** *2,500 2,529,975 8.40
-----------
NEW MEXICO (2.83%)
Farmington, County of,
Poll Control Rev Ref Ser A Pub Serv Co
of New Mexico San Juan Proj........................ 6.400 08-15-23 BB* 5,000 4,799,200 6.67
-----------
NEW YORK (1.60%)
New York, City of,
GO Ser 1995 D**.................................... 6.000 02-15-25 BBB+ *1,725 1,667,178 6.21
GO Ser B........................................... 7.300 08-15-11 BBB+ *950 1,036,212 6.69
-----------
2,703,390
-----------
OHIO (5.03%)
Bedford, County of,
Rev Ref Community Hosp Bedford Inc................. 8.500 05-15-09 AAA*** 1,465 1,673,235 7.44
Cleveland, City of,
Parking Facil Imp Rev.............................. 8.000 09-15-12 BBB*** 1,000 1,072,410 7.46
Parking Facil Imp Rev.............................. 8.100 09-15-22 BBB*** *2,000 2,145,620 7.55
Lorain, County of,
Rev First Mtg Kendal At Oberlin Proj Ser A......... 8.625 02-01-22 BB+*** 3,300 3,627,690 7.85
-----------
8,518,955
-----------
OKLAHOMA (1.27%)
Tulsa Municipal Airport Trust, Trustees of,
Rev American Airlines Inc.......................... 7.350 12-01-11 BB+ 2,000 2,146,280 6.85
-----------
OREGON (2.63%)
Western Generation Agency,
Rev 1994 Ser A Wauna Cogeneration Proj............. 7.125 01-01-21 BB+*** 4,300 4,453,725 6.88
-----------
PENNSYLVANIA (13.70%)
Beaver County Industrial Development Auth,
Coll Poll Control Rev Ref Toledo Edison Co
Beaver Valley Proj Ser 1995A....................... 7.750 05-01-20 BB *2,500 2,599,050 7.45
Coll Poll Control Rev Ref Cleveland Elec Proj...... 7.625 05-01-25 BB *4,600 4,762,058 7.37
Chester County Industrial Development Auth,
Rev First Mtg Rha/Pa Nursing Home.................. 10.125 05-01-19 BB*** 200 219,446 9.23
Montgomery County Higher Education & Health Auth,
Hosp Rev Ser A Utd Hosp Original Iss............... 7.500 11-01-14 Ba1*** 1,055 1,065,835 7.42
Hosp Rev Ser B Utd Hosp Original Iss............... 7.500 11-01-13 Ba1*** 3,030 3,065,300 7.41
Montgomery County Redevelopment Auth,
Multifamily Housing Rev Ser A KBF Assoc L.P. Proj.. 6.375 07-01-12 BBB+*** *2,000 2,003,340 6.36
Multifamily Housing Rev Ser A KBF Assoc L.P. Proj.. 6.500 07-01-25 BBB+*** *3,500 3,379,355 6.73
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

14
<PAGE> 362

FINANCIAL STATEMENTS

John Hancock Funds - High Yield Tax-Free Fund

<TABLE>
<CAPTION>
PAR VALUE YIELD
INTEREST MATURITY S&P (000'S MARKET AT
STATE, ISSUER, DESCRIPTION RATE DATE RATING OMITTED) VALUE MARKET+
- -------------------------- -------- -------- ------ --------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
PENNSYLVANIA (CONTINUED)
Northampton County Industrial Development Auth,
Poll Control Rev Ref Bethlehem Steel Proj.................. 7.550% 06-01-17 BB-*** $*2,000 $ 2,067,500 7.30%
Philadelphia Auth For Industrial Development,
Rev First Mtg Rha Care Pavilion Proj....................... 10.250 02-01-18 BB*** 285 296,508 9.85
Philadelphia Hospitals And Higher Education Facilities Auth,
Hosp Rev 1991 Ser A Philadelphia Protestant Home Proj...... 8.625 07-01-21 BB*** 2,300 2,388,757 8.30
Hosp Rev Methodist Hosp Ser 1987A.......................... 9.000 07-01-10 BB 1,295 1,369,709 8.51
----------
23,216,858
----------
RHODE ISLAND (1.42%)
Providence Redevelopment Agency,
Cert of Part Ser A......................................... 8.000 09-01-24 BB-*** 2,250 2,409,705 7.47
----------
SOUTH CAROLINA (0.06%)
McCormick, County of,
Hosp Facil Rev McCormick County Nursing Center Proj........ 10.500 03-01-18 BB*** 100 103,650 10.13
----------
TEXAS (0.23%)
Houston Housing Finance Corp,
Single Family Mtg Rev...................................... 9.750 09-15-03 B 390 390,398 9.74
----------
UTAH (2.47%)
Carbon, County of,
Solid Waste Disposal Rev Ref East Carbon Development
Corp Ser A................................................. 9.000 07-01-12 BBB-*** 2,000 2,114,340 8.51
Solid Waste Disposal Rev Ref Sunnyside Cogeneration Proj... 9.250 07-01-18 BB-*** 1,900 2,078,258 8.46
----------
4,192,598
----------
VIRGINIA (3.54%)
Hopewell Industrial Development Auth,
Poll Control Rev Stone Container Corp Proj................. 8.250 05-01-10 BB*** 1,000 1,089,070 7.58
Resource Recovery Rev Ref Stone Container Corp Proj........ 8.250 06-01-16 BB*** 4,500 4,903,065 7.57
----------
5,992,135
----------
WASHINGTON (4.75%)
Port of Walla Walla Public Corp,
Solid Waste Recycling Rev Ser 1995 Ponderosa Fibres Proj... 9.125 01-01-26 BB-*** *8,000 8,047,760 9.07
----------
WEST VIRGINIA (2.04%)
Marion, County of,
Community Solid Waste Disposal Rev American Power Paper
Recycling Proj............................................. 7.750 12-01-11 BB*** 4,000 3,457,640 8.97
----------
WYOMING (1.52%)
Sweetwater, County of,
Solid Waste Disposal Rev Ser A FMC Corp Proj................ 7.000 06-01-24 BBB *2,500 2,582,800 6.78
----------
TOTAL TAX-EXEMPT LONG-TERM BONDS
(COST $164,870,949) (100.66%) 170,574,382
------ -----------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

15
<PAGE> 363

FINANCIAL STATEMENTS

John Hancock Funds - High Yield Tax-Free Fund

<TABLE>
<CAPTION>
PAR VALUE
INTEREST MATURITY (000'S MARKET
STATE, ISSUER, DESCRIPTION RATE DATE OMITTED) VALUE
- -------------------------- -------- -------- -------- ------
<S> <C> <C> <C> <C>
SHORT TERM INVESTMENTS
JOINT REPURCHASE AGREEMENT (1.20%)
Investment in a joint repurchase agreement with SBC Capital
Markets Inc., Dated 10-31-95, Due 11-01-95 (secured by
U.S. Treasury Bond, 8.75% Due 05-15-17, U.S. Treasury Note,
5.75% Due 09-30-97) Note A.............. 5.89% 11-01-95 $2,032 $ 2,032,000
-----------
CORPORATE SAVINGS ACCOUNT (0.03%)
Investors Bank & Trust Company
Daily Interest Savings
Account Current Rate 3.00%................................. 57,675
------------
TOTAL SHORT-TERM INVESTMENTS ( 1.23%) 2,089,675
------ ------------
TOTAL INVESTMENTS (101.89%) $172,664,057
======= ============
</TABLE>

* Securities, other than short term investments, newly added to the
portfolio, during the period ended October 31, 1995.
** These securities having an aggregate value of $6,792,178 or 4.01% of the
Fund's net asset value, have been purchased as forward commitments -- that
is, the Fund has agreed on trade date, to take delivery of and make payment
for such securities on a delayed basis subsequent to the date of this
schedule. The purchase price and interest rate of such securities is fixed
at trade date, although the Fund does not earn any interest on such
securities until settlement date. The Fund has instructed its Custodian
Bank to segregate assets with a current value at least equal to the amount
of its forward commitment. Accordingly, the market values of $1,787,273 of
Baltimore, County of, Poll Control Rev Ref Bethlehem Steel Corp Proj,
7.50%, 06-01-05, $4,762,058 of Beaver County Industrial Development Auth,
Poll Control Rev Ref Cleveland Elec Proj, 7.625%, 05-01-25, and $678,825 of
Illinois Health Facilities Auth, Rev Fairview Obligated Group Proj Ser A,
9.500%, 10-01-22, has been segregated to cover the forward commitments.
*** Credit Ratings are rated by Moody's Investors Services, Fitch or John
Hancock Advisers, Inc. where Standard & Poor's ratings are not available
and are unaudited.
+ The yield is not calculated with guidelines established by the U.S.
Securities Exchange Commission and is unaudited.
# Represents rate in effect on October 31, 1995.

The percentages shown for each investment category is the total value of that
category as a percentage of the net assets of the Fund.

SEE NOTES TO FINANCIAL STATEMENTS.

16
<PAGE> 364

FINANCIAL STATEMENTS

John Hancock Funds - High Yield Tax-Free Fund

PORTFOLIO CONCENTRATION

- --------------------------------------------------------------------------------

THE HIGH YIELD TAX-FREE FUND INVESTS PRIMARILY IN SECURITIES ISSUED BY THE
VARIOUS STATES AND THEIR VARIOUS POLITICAL SUBDIVISIONS. THE PERFORMANCE OF THE
FUND IS CLOSELY TIED TO ECONOMIC CONDITIONS WITHIN THE APPLICABLE STATES AND THE
FINANCIAL CONDITION OF THE STATES AND THEIR AGENCIES AND MUNICIPALITIES. THE
CONCENTRATION OF INVESTMENTS BY STATES AND CREDIT RATINGS FOR INDIVIDUAL
SECURITIES HELD BY THE FUND ARE SHOWN IN THE SCHEDULE OF INVESTMENTS. IN
ADDITION, THE CONCENTRATION OF INVESTMENTS CAN BE AGGREGATED BY VARIOUS SECTOR
CATEGORIES.

THE TABLE BELOW SHOWS THE PERCENTAGES OF THE FUND'S INVESTMENTS AT OCTOBER 31,
1995 ASSIGNED TO THE VARIOUS SECTOR CATEGORIES.

<TABLE>
<CAPTION>
MARKET VALUE AS A PERCENTAGE OF
SECTOR DISTRIBUTION THE FUND'S NET ASSETS:
- ------------------- -------------------------------
<S> <C>
General Obligation.............................................................. 1.60%
Revenue Bonds - Certificate of Participation.................................... 4.43
Revenue Bonds - Electric Power.................................................. 2.63
Revenue Bonds - Health.......................................................... 8.99
Revenue Bonds - Housing......................................................... 5.43
Revenue Bonds - Industrial Development Bond..................................... 10.86
Revenue Bonds - Other........................................................... 16.02
Revenue Bonds - Pollution Control Facilities.................................... 32.86
Revenue Bonds - Transportation.................................................. 16.57
Revenue Bonds - Water & Sewer................................................... 1.27
------
TOTAL TAX-EXEMPT LONG-TERM BONDS 100.66%
======
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

17
<PAGE> 365

NOTES TO FINANCIAL STATEMENTS

John Hancock Funds - High Yield Tax-Free Fund

NOTE A --
ACCOUNTING POLICIES

John Hancock Series, Inc. (the "Corporation") is a diversified, open-end
management investment company, registered under the Investment Company Act of
1940. The Corporation consists of six series portfolios: John Hancock High Yield
Tax-Free Fund (the "Fund"), John Hancock Emerging Growth Fund, John Hancock
Global Resources Fund, John Hancock Government Income Fund, John Hancock High
Yield Bond Fund and John Hancock Money Market Fund (collectively the "Funds").
The Board of Directors may authorize the creation of additional Funds from time
to time to satisfy various investment objectives. Effective December 22, 1994
(see Note B), the Corporation and Funds changed names by replacing the word
Transamerica with John Hancock.

FINANCIAL FUTURES CONTRACTS The Fund may buy and sell financial futures
contracts 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 will be 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 will be 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 will be 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", will be recorded by the Fund as unrealized gains or
losses.

When the contracts are closed, the Fund will recognize 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 October 31, 1995, there were no open positions in financial futures
contracts.

18
<PAGE> 366

NOTES TO FINANCIAL STATEMENTS

John Hancock Funds - High Yield Tax-Free Fund

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
investments, to its shareholders. Therefore, no federal income tax provision is
required. For federal income tax purposes, the Fund has $2,785,979 of a capital
loss carryforward available, to the extent provided by regulations, to offset
future net realized capital gains. If such carryforwards are used by the Fund,
no capital gain distribution will be made. The carryforward expires 12/31/2002.
The Fund's tax year end is December 31.

DIVIDENDS, DISTRIBUTIONS AND INTEREST Interest income on investment securities
is recorded on the accrual basis.

CLASS ALLOCATIONS Income, common expenses and realized and unrealized gains
(losses) are determined 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.

RECLASSIFICATION OF ACCOUNTS During the year ended October 31, 1995, the Fund
has reclassified $641,622 from distributions in excess of net investment income
to capital paid-in. This represents the amount necessary to report these
balances on a tax basis, excluding certain temporary differences, as of October
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.

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, to
0.6250% of the first $75,000,000 of the Fund's average daily net asset value,
0.5625% of the next $75,000,000, and 0.5000% of the Fund's average daily net
asset value in excess of $150,000,000. This fee structure is consistent with the
former agreement with TFMC. For the period ended October 31, 1995, the advisory
fee earned by the Adviser and TFMC amounted to $830,016 and $161,643,
respectively, resulting in a total fee of $991,659.

In the event normal operating expenses of the Fund, exclusive
of certain expenses prescribed by state law, are in excess of the most

19
<PAGE> 367

NOTES TO FINANCIAL STATEMENTS

John Hancock Funds - High Yield Tax-Free Fund

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.

On December 22, 1994 John Hancock Funds, Inc. ("JH Funds"), a wholly-owned
subsidiary of the Adviser, became the principal underwriter of the Fund. Prior
to this date, Transamerica Fund Distributors, Inc. ("TFD") served as the
principal underwriter and distributor of the Fund. For the period ended October
31, 1995, JH Funds and TFD received net sales charges of $118,032 with regard to
sales of Class A shares. Out of this amount, $15,719 was retained and used for
printing prospectuses, advertising, sales literature and other purposes, $91,111
was paid as sales commissions to unrelated broker-dealers and $11,202 was paid
as sales commissions to sales personnel of John Hancock Distributors, Inc.
("Distributors"), Tucker Anthony, Incorporated ("Tucker Anthony") and Sutro &
Co., Inc. ("Sutro"). 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
Tucker Anthony and Sutro, all of which are broker-dealers.

Class B shares which are redeemed within six years of purchase will be
subject to a contingent deferred sales charge ("CDSC") at declining rates
beginning at 5.0% of the lesser of the current market value at the time of
redemption or the original purchase cost of the shares being redeemed. Proceeds
from the CDSC are paid to JH Funds, formerly TFD, 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
October 31, 1995, contingent deferred sales charges amounted to $470,502.

In addition, to compensate JH Funds for the services it provides as
distributor of shares of the Fund, the Fund has adopted a Distribution Plan with
respect to Class A and Class B shares pursuant to Rule 12b-1 under the
Investment Company Act of 1940. Accordingly, the Fund will make payments for
distribution and service expenses which in total will not exceed on an annual
basis 0.25% of the Fund's average daily net assets attributable to Class A
shares and 1.00% (0.90% effective December 1, 1995) of the Fund's average daily
net assets attributable to Class B shares, to reimburse JH Funds for its
distribution/service costs. Up to a maximum of 0.25% of such payments may be
service fees as defined by the amended Rules of Fair Practice of the National
Association of Securities Dealers. Under the amended Rules of Fair Practice,
curtailment of a portion of the Fund's 12b-1 payments could occur under certain
circumstances. This fee structure and plan is similar to the former arrangement
with TFD.

The Board of Directors approved a shareholder servicing agreement between the
Fund and John Hancock Investor Services Corporation ("Investor Services"), a
wholly owned subsidiary of The Berkeley Financial Group, for the period between
December 22, 1994 and May 12, 1995, inclusive under which Investor Services
processed telephone transactions on behalf of the Fund. As of May 15, 1995, the
Fund entered into a full service transfer agent agreement with Investor
Services. Prior to this date The Shareholder Services Group was the transfer
agent. The Fund will pay Investor Services a fee based on the number of
shareholder accounts and certain out-of-pocket expenses.

A partner with Baker & Botts was an officer of the Corporation until December
22, 1994. During the period ended October 31, 1995, legal fees paid to Baker &
Botts amounted to $2,023.

20
<PAGE> 368

NOTES TO FINANCIAL STATEMENTS

John Hancock Funds - High Yield Tax-Free Fund

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 obligations of the
U.S. government and its agencies and short-term obligations, during the period
ended October 31, 1995 aggregated $106,192,835 and $110,403,905, respectively.
There were no purchases or sales of long-term obligations of the U.S. government
and its agencies during the period ended October 31, 1995.

The cost of investments owned at October 31, 1995 for Federal income tax
purposes was $166,902,949. Gross unrealized appreciation and depreciation of
investments aggregated $7,369,143, and $1,665,710, respectively, resulting in
net unrealized appreciation of $5,703,433.

21
<PAGE> 369

John Hancock Funds - High Yield Tax-Free Fund

REPORT OF ERNST & YOUNG LLP,
INDEPENDENT AUDITORS

To the Board of Directors and Shareholders of
John Hancock Series, Inc. --
John Hancock High Yield Tax-Free Fund

We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of the John Hancock High Yield Tax-Free Fund (the
"Fund"), (formerly the Transamerica High Yield Tax-Free Fund), one of the
portfolios constituting John Hancock Series, Inc. (the "Corporation") (formerly
Transamerica Series, Inc.), as of October 31, 1995, and the related statement of
operations for the year then ended, the statements of changes in net assets for
each of the two years in the period then ended, and the financial highlights for
each of the periods indicated therein. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1995, by correspondence with the custodian and brokers, and other
appropriate auditing procedures when replies from brokers were not received. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
John Hancock High Yield Tax-Free Fund portfolio of John Hancock Series, Inc. at
October 31, 1995, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended,
and the financial highlights for each of the indicated periods, in conformity
with generally accepted accounting principles.

/s/ Ernst & Young LLP

Boston, Massachusetts
December 15, 1995

22
<PAGE> 370
JOHN HANCOCK MONEY MARKET FUND

CLASS S SHARES

STATEMENT OF ADDITIONAL INFORMATION

MARCH 1, 1996

-------------

This Statement of Additional Information ("SAI") provides information
about John Hancock Money Market Fund (the "Fund"), a diversified series of John
Hancock Series, Inc. (the "Corporation"), in addition to the information that
is contained in the Fund's Class S Prospectus, dated MARCH 1, 1996 (the
"Prospectus").

This SAI is not a prospectus. It should be read in conjunction with the
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 02205-5291
1-800-225-5291
<TABLE>
TABLE OF CONTENTS
<CAPTION>

Page
----
<S> <C>
Organization of the Corporation. . . . . . . . . . . . . . . . . . 2
Investment Objective and Policies. . . . . . . . . . . . . . . . . 2
Certain Investment Practices . . . . . . . . . . . . . . . . . . . 2
Investment Restrictions. . . . . . . . . . . . . . . . . . . . . . 7
Those Responsible for Management . . . . . . . . . . . . . . . . . 10
Investment Advisory and Other Services . . . . . . . . . . . . . . 19
Distribution Contract. . . . . . . . . . . . . . . . . . . . . . . 22
Amortized Cost Method of Portfolio Valuation . . . . . . . . . . . 24
Special Redemptions. . . . . . . . . . . . . . . . . . . . . . . . 25
Description of the Corporation's Shares. . . . . . . . . . . . . . 25
Tax Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Calculation of Performance . . . . . . . . . . . . . . . . . . . . 29
Brokerage Allocation . . . . . . . . . . . . . . . . . . . . . . . 30
Transfer Agent Services. . . . . . . . . . . . . . . . . . . . . . 32
Custody of Portfolio . . . . . . . . . . . . . . . . . . . . . . . 32
Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . 33
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . F-1
</TABLE>
<PAGE> 371

ORGANIZATION OF THE CORPORATION

The Corporation is an open-end management investment company organized
as a Maryland corporation on June 22, 1987. The Corporation currently has six
series: John Hancock Emerging Growth Fund, John Hancock Global Resources Fund,
John Hancock Government Income Fund, John Hancock High Yield Bond Fund, John
Hancock High Yield Tax-Free Fund and John Hancock Money Market Fund (the
"Fund"). Prior to September 12, 1995, the Fund was called John Hancock Money
Market Fund B. Prior to December 22, 1994, the Fund was called Transamerica
Money Market Fund B.

The Fund is managed by John Hancock Advisers, Inc. (the "Adviser"), a
wholly-owned indirect subsidiary of John Hancock Mutual Life Insurance Company
(the "Life Company"), chartered in 1862 with national headquarters at John
Hancock Place, Boston, Massachusetts. John Hancock Funds, Inc. ("John Hancock
Funds") acts as principal distributor of the shares of the Fund.

INVESTMENT OBJECTIVE AND POLICIES

The Fund seeks to provide maximum current income consistent with the
preservation of capital and liquidity. Securities in which the Fund invests may
not earn as high a level of current income as longer term or lower quality
securities, which generally have less liquidity, greater market risk, and more
fluctuation in market value. There can be no assurance that the Fund's
investment objective will be realized.

CERTAIN INVESTMENT PRACTICES

GOVERNMENT SECURITIES. The Fund may invest in U.S. Government
securities, which are obligations issued or guaranteed by the U.S. Government
and its agencies, authorities or instrumentalities. Certain U.S. Government
securities, including U.S. Treasury bills, notes and bonds, and Government
National Mortgage Association certificates ("Ginnie Maes"), are supported by
the full faith and credit of the United States. Certain other U.S. Government
securities, issued or guaranteed by Federal agencies or government sponsored
enterprises, are not supported by the full faith and credit of the United
States, but may be supported by the right of the issuer to borrow from the U.S.
Treasury. These securities include obligations of the Federal Home Loan
Mortgage Corporation ("Freddie Macs"), and obligations supported by the credit
of the instrumentality, such as Federal National Mortgage Association Bonds
("Fannie Maes"). No assurance can be given that the U.S. Government will
provide financial support to such Federal agencies, authorities,
instrumentalities and government sponsored enterprises in the future.

2
<PAGE> 372

CUSTODIAL RECEIPTS. The Fund may acquire custodial receipts in respect
of U.S. Government securities. Such custodial receipts evidence ownership of
future interest payments, principal payments or both on certain notes or bonds.
These custodial receipts are known by various names, including Treasury
Receipts, Treasury Investors Growth Receipts ("TIGRs"), and Certificates of
Accrual on Treasury Securities ("CATS"). For certain securities law purposes,
custodial receipts are not considered U.S. government securities.

BANK AND CORPORATE OBLIGATIONS. The Fund may invest in commercial
paper. Commercial paper represents short-term unsecured promissory notes
issued in bearer form by banks or bank holding companies, corporations and
finance companies. The commercial paper purchased by the Fund consists of
direct U.S. dollar denominated obligations of domestic or foreign issuers. Bank
obligations in which the Fund may invest include certificates of deposit,
bankers' acceptances and fixed time deposits. Certificates of deposit are
negotiable certificates issued against funds deposited in a commercial bank for
a definite period of time and earning a specified return.

MUNICIPAL OBLIGATIONS. The Fund may invest in a variety of municipal
obligations which consist of municipal bonds, municipal notes and municipal
commercial paper.

Municipal Bonds. Municipal bonds are issued to obtain funds for various
public purposes including the construction of a wide range of public facilities
such as airports, highways, bridges, schools, hospitals, housing, mass
transportation, streets and water and sewer works. Other public purposes for
which municipal bonds may be issued include refunding outstanding obligations,
obtaining funds for general operating expenses and obtaining funds to lend to
other public institutions and facilities. In addition, certain types of
industrial development bonds are issued by

3
<PAGE> 373

or on behalf of public authorities to obtain funds for many types of
local, privately operated facilities. These debt instruments are considered
municipal obligations if the interest paid on them is exempt from federal
income tax. The payment of principal and interest by issuers of certain
obligations purchased by the Fund may be guaranteed by a letter of credit, note
repurchase agreement, insurance or other credit facility agreement offered by a
bank or other financial institution. Such guarantees and the creditworthiness
of guarantors will be considered by the Adviser in determining whether a
municipal obligation meets the Fund's investment quality requirements. No
assurance can be given that a municipality or guarantor will be able to satisfy
the payment of principal or interest on a municipal obligation.

Municipal Notes. Municipal notes are short-term obligations of
municipalities, generally with a maturity ranging from six months to three
years. The principal types of such notes include tax, bond and revenue
anticipation notes and project notes.

Municipal Commercial Paper. Municipal commercial paper is a short-term
obligation of a municipality, generally issued at a discount with a maturity of
less than one year. Such paper is likely to be issued to meet seasonal working
capital needs of a municipality or interim construction financing. Municipal
commercial paper is backed in many cases by letters of credit, lending
agreements, note repurchase agreements or other credit facility agreements
offered by banks and other institutions.

Federal tax legislation enacted in the 1980's placed substantial new
restrictions on the issuance of the bonds described above and in some cases
eliminated the ability of state or local governments to issue municipal
obligations for some of the above purposes. Such restrictions do not affect the
Federal income tax treatment of municipal obligations in which the Fund may
invest which were issued prior to the effective dates of the provisions
imposing such restrictions. The effect of these restrictions may be to reduce
the volume of newly issued municipal obligations.

4
<PAGE> 374

("Fitch") represent their respective opinions on the quality of the
municipal bonds they undertake to rate. It should be emphasized, however, that
ratings are general and not absolute standards of quality. Consequently,
municipal bonds with the same maturity, coupon and rating may have different
yields and municipal bonds of the same maturity and coupon with different
ratings may have the same yield. See the Appendix for a description of ratings.
Many issuers of securities choose not to have their obligations rated.
Although unrated securities eligible for purchase by the Fund must be
determined to be comparable in quality to securities having certain specified
ratings, the market for unrated securities may not be as broad as for rated
securities since many investors rely on rating organizations for credit
appraisal.

FOREIGN SECURITIES. The Fund may invest in foreign securities and in
certificates of deposit, bankers' acceptances and fixed time deposits and other
obligations issued by foreign banks and their U.S. and foreign branches and
foreign branches of U.S. banks. The Fund may also invest in municipal
instruments backed by letters of credit issued by certain of such banks. Under
current Securities and Exchange Commission ("SEC") rules relating to the use of
the amortized cost method of portfolio securities valuation, the Fund is
restricted to purchasing U.S. dollar denominated securities.

Investing in obligations of non-U.S. issuers and banks, may entail
greater risks than investing in similar securities of U.S. issuers. These risks
include (i) social, political and economic instability; (ii) the small current
size of the markets for many such securities and the currently low or
nonexistent volume of trading, which may result in a lack of liquidity and in
greater price volatility; (iii) certain national policies which may restrict
the Fund's investment opportunities, including restrictions on investment in
issuers or industries deemed sensitive to national interests; (iv) foreign
taxation; and (v) the absence of developed structures governing private or
foreign investment or allowing for judicial redress for injury to private
property.

REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements. A
repurchase agreement is a contract under which the Fund would acquire a
security for a relatively short period (generally not more than seven 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 securities dealers. 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

5
<PAGE> 375
securities during the period 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. The Fund will not
invest in a repurchase agreement maturing in more than seven days, if such
investment, together with other illiquid securities held by the Fund (including
restricted securities) would exceed 10% of the Fund's total assets.

REVERSE REPURCHASE AGREEMENTS. The Fund may also enter into reverse
repurchase agreements which involve the sale of government securities held in
its portfolio to a bank or securities firm with an agreement that the Fund will
buy back the securities at a fixed future date at a fixed price plus an agreed
amount of "interest" which may be reflected in the repurchase price. Reverse
repurchase agreements are considered to be borrowings by the Fund. The Fund
will use proceeds obtained from the sale of securities pursuant to reverse
repurchase agreements to purchase other investments. The use of borrowed funds
to make investments is a practice known as "leverage," which is considered
speculative. Use of reverse repurchase agreements is an investment technique
that is intended to increase income. Thus, the Fund will enter into a reverse
repurchase agreement only when the Adviser determines that the interest income
to be earned from the investment of the proceeds is greater than the interest
expense of the transaction. However, there is a risk that interest expense will
nevertheless exceed the income earned. Reverse repurchase agreements involve
the risk that the market value of securities purchased by the Fund with
proceeds of the transaction may decline below the repurchase price of the
securities sold by the Fund which it is obligated to repurchase. The Fund will
also continue to be subject to the risk of a decline in the market value of the
securities sold under the agreements because it will reacquire those securities
upon effecting their repurchase. To minimize various risks associated with
reverse repurchase agreements, the Fund will establish and maintain with the
Fund's custodian a separate account consisting of highly liquid, marketable
securities in an amount at least equal to the repurchase prices of the
securities (plus any accrued interest thereon) under such agreements. In
addition, the Fund will not enter into reverse repurchase agreements and other
borrowings exceeding in the aggregate more than 33 1/3% of the market value of
its total net assets. The Fund will enter into reverse repurchase agreements
only with selected registered broker/dealers or with federally insured banks or
savings and loan associations which are approved in advance as being
creditworthy by the Board of Directors. Under procedures established by the
Board of Directors, the Adviser will monitor the creditworthiness of the firms
involved.

FORWARD COMMITMENT AND WHEN-ISSUED SECURITIES. The Fund may purchase
securities on a when-issued or forward commitment basis. "When-issued" refers
to securities whose terms are available and for which a market exists, but
which have not been issued. The Fund will engage in when-issued transactions
with respect to securities purchased for its portfolio in order

<PAGE> 376

to obtain what is considered to be an advantageous price and yield at the
time of the transaction. For when-issued transactions, no payment is made
until delivery is due, often a month or more after the purchase. In a forward
commitment transaction, the Fund contracts to purchase securities for a fixed
price at a future date beyond customary settlement time.

When the Fund engages in forward commitment and when-issued
transactions, it relies on the seller to consummate the transaction. The
failure of the issuer or seller to consummate the transaction may result in the
Fund losing the opportunity to obtain a price and yield considered to be
advantageous. The purchase of securities on a when-issued and forward
commitment basis also involves a risk of loss if the value of the security to
be purchased declines prior to the settlement date.

On the date the Fund enters into an agreement to purchase securities on
a when-issued or forward commitment basis, the Fund will segregate in a
separate account cash or liquid, high grade debt securities equal in value to
the Fund's commitment. These assets will be valued daily at market, and
additional cash or securities will be segregated in a separate account to the
extent that the total value of the assets in the account declines below the
amount of the when-issued commitments. Alternatively, the Fund may enter into
offsetting contracts for the forward sale of other securities that it owns.

INVESTMENT RESTRICTIONS

FUNDAMENTAL INVESTMENT RESTRICTIONS

The Fund has adopted certain fundamental investment restrictions upon
its investments as set forth below which may not be changed without the
approval of the holders of a majority of the outstanding shares of the Fund. A
majority for this purpose means: (a) more than 50% of the outstanding shares of
the Fund or (b) 67% or more of the shares represented at a meeting where more
than 50% of the outstanding shares of the Fund are represented, whichever is
less. If a percentage restriction or rating restriction on investment or
utilization of assets is adhered to at the time an investment is made or assets
are so utilized, a later change in percentage resulting from changes in the
value of the Fund's portfolio securities or a later change in the rating of a
portfolio security would not be considered a violation of policy.

The Fund may not:

<PAGE> 377

each case taken at the lower of cost or market value. For the purpose of this
restriction, collateral arrangements with respect to options, futures
contracts, options on futures contracts and collateral arrangements with
respect to initial and variation margins are not considered a pledge of assets.

(2) Underwrite securities issued by other persons except insofar as
the Fund may technically be deemed an underwriter under the Securities Act of
1933 in selling a portfolio security.

(3) Purchase or retain real estate (including limited partnership
interests but excluding securities of companies, such as real estate investment
trusts, which deal in real estate or interests therein and securities secured
by real estate), or mineral leases, commodities or commodity contracts (except
contracts for the future delivery of fixed income securities, stock index and
currency futures and options on such futures) in the ordinary course of its
business. The Fund reserves the freedom of action to hold and to sell real
estate or mineral leases, commodities or commodity contracts acquired as a
result of the ownership of securities.

(4) Invest in direct participation interests in oil, gas or other
mineral exploration or development programs.

(5) Make loans to other persons except by the purchase of obligations
in which the Fund is authorized to invest and by entering into repurchase
agreements; provided that the Fund may lend its portfolio securities not in
excess of 30% of its total assets (taken at market value). Not more than 10% of
the Fund's total assets (taken at market value) will be subject to repurchase
agreements maturing in more than seven days. For these purposes the purchase of
all or a portion of an issue of debt securities shall not be considered the
making of a loan.

(7) Invest in companies for the purpose of exercising control or
management.

(8) Purchase or retain in its portfolio any securities issued by an
issuer any of whose officers, directors, trustees or security holders is an
officer or Director of the Fund, or is a member, partner, officer or Director
of the Adviser, if after the purchase of the securities of such

<PAGE> 378

issuer by the Fund one or more of such persons owns beneficially more
than 1/2 of 1% of the shares or securities, or both, all taken at market value,
of such issuer, and such persons owning more than 1/2 of 1% of such shares or
securities together own beneficially more than 5% of such shares or securities,
or both, all taken at market value.

(9) Purchase any securities or evidences of interest therein on
margin, except that the Fund may obtain such short-term credit as may be
necessary for the clearance of purchases and sales of securities.

(10) Sell any security which the Fund does not own unless by virtue of
its ownership of other securities it has at the time of sale a right to obtain
securities without payment of further consideration equivalent in kind and
amount to the securities sold and provided that if such right is conditional
the sale is made upon equivalent conditions.

(11) Purchase securities issued by any other investment company or
investment trust except by purchase in the open market where no commission or
profit to a sponsor or dealer results from such purchase other than the
customary broker's commission, or except when such purchase, though not made in
the open market, is part of a plan of merger or consolidation; provided,
however, that the Fund will not purchase such securities if such purchase at
the time thereof would cause more than 10% of its total assets (taken at market
value) to be invested in the securities of such issuers; and, provided,
further, that the Fund will not purchase securities issued by an open-end
investment company.

(12) Knowingly invest in securities which are subject to legal or
contractual restrictions on resale or for which there is no readily available
market (e.g., trading in the security is suspended or market makers do not
exist or will not entertain bids or offers), except for repurchase agreements,
if, as a result thereof more than 10% of the Fund's total assets (taken at
market value) would be so invested. (The Staff of the Securities and Exchange
Commission ("SEC") has taken the position that a money market fund may not
invest more than 10% of its net assets in illiquid securities. The Fund has
undertaken with the Staff to require, that as a matter of operating policy, it
will not invest in illiquid securities in an amount exceeding 10% of its net
assets.)

(13) Issue any senior security (as that term is defined in the
Investment Company Act of 1940 ("1940 Act")) if such issuance is specifically
prohibited by the 1940 Act or the rules and regulations promulgated thereunder.
For the purpose of this restriction, collateral arrangements with respect to
options, futures contracts and options on futures contracts and collateral
arrangements with respect to initial and variation margins are not deemed to be
the issuance of a senior security.

<PAGE> 379
In addition, the Fund may not invest more than 25% of its total assets
in obligations issued by (i) foreign banks or (ii) foreign branches of U.S.
banks where the Adviser, has determined that the U.S. bank is not
unconditionally responsible for the payment obligations of the foreign branch.
Also, the Fund may not purchase securities of any issuer (other than securities
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities) if such purchase, at the time thereof, would cause the Fund
to hold more than 10% of any class of securities of such issuer. For this
purpose, all indebtedness of an issuer maturing in less than one year) shall be
deemed a single class and all preferred stock of an issuer shall be deemed a
single class.

OTHER OPERATING POLICIES

The Fund will not invest more than 5% of its total assets in companies
which, including their respective predecessors, have a record of less than
three years' continuous operation.

In order to comply with certain state regulatory policies, the Fund
will not, as a matter of operating policy, pledge, mortgage or hypothecate its
portfolio securities if the percentage of securities so pledged, mortgaged or
hypothecated would exceed 15%.

The Corporation's Board of Directors has approved the following
nonfundamental investment policy pursuant to an order of the SEC:
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.

THOSE RESPONSIBLE FOR MANAGEMENT

The business of the Corporation is managed by its Directors who elect
officers who are responsible for the day-to-day operations of the Corporation
and the Fund and who execute policies formulated by the Directors. Several of
the officers and Directors of the Corporation are also officers and directors
of the Adviser or officers and directors of John Hancock Funds.

10
<PAGE> 380
<TABLE>

Set forth below is the principal occupation or employment of the
Directors and principal officers of the Corporation during the past five years:
<CAPTION>

POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH THE COMPANY DURING THE PAST FIVE YEARS
- ---------------- ---------------- --------------------------
<S> <C> <C>
Edward J. Boudreau, Jr.* Chairman (1,2) Chairman and Chief Executive Officer,
101 Huntington Avenue the Adviser and The Berkeley Financial
Boston, MA 02199 Group ("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
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. ("Distributors") (until April 1994).

<FN>
- --------------------
* An "interested person" of the Company as such term is defined in the Investment Company Act of
1940, as amended ("The Investment Company Act").
(1) Member of the Executive Committee. Under the Company's charter, the Executive Committee may
generally exercise most of the powers of the Board of Directors.
(2) A member of the Investment Committee of the Adviser.
(3) Member of the Audit Committee and the Committee on Administration.
</TABLE>

11
<PAGE> 381
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH THE COMPANY DURING THE PAST FIVE YEARS
- ---------------- ---------------- --------------------------

<S> <C> <C>
James F. Carlin Director(3) Chairman and CEO, Carlin Consolidated,
233 West Central Street Inc. (insurance); Chairman,
Natick, MA 01760 Massachusetts Higher Education
Coordinating Council (since 1995);
Trustee, Massachusetts Health and
Education Tax-Exempt Trust (Financial);
Director, Rizzo Associates, Inc.
(Engineering), Arbella Mutual Insurance
Company (insurance), Consolidated
Group Trust (group health plan), Carlin
Insurance Agency, Inc., West Insurance
Agency, Inc., Allied American Agency,
Inc. (insurance); Treasurer, Alpha
Analytical, Inc. (Chemistry Lab);
Receiver, the City of Chelsea (until
August

William H. Cunningham Trustee(3) Chancellor, University of Texas System
601 Colorado Street and former President of the University of
O'Henry Hall Texas, Austin, Texas; Regents Chair for
Austin, TX 78701 Free Enterprise; Director, LaQuinta
Motor Inns, Inc. (hotel management
company); Director, Jefferson-Pilot
Corporation (diversified life insurance
company); Director, Freeport-McMoran
Inc. (oil and gas company); LBJ
Foundation Board (education
foundation); and Advisory Director,
Texas Commerce Bank - Austin.

<FN>

- --------------------
* An "interested person" of the Company as such term is defined in the Investment Company Act of
1940, as amended ("The Investment Company Act").
(1) Member of the Executive Committee. Under the Company's charter, the Executive Committee may
generally exercise most of the powers of the Board of Directors.
(2) A member of the Investment Committee of the Adviser.
(3) Member of the Audit Committee and the Committee on Administration.

</TABLE>
12
<PAGE> 382
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH THE COMPANY DURING THE PAST FIVE YEARS
- ---------------- ---------------- --------------------------
<S> <C> <C>
Charles F. Fretz Director (3) Consultant, self employed; Vice
RD #5, Box 300B President and Director, Towers, Perrin,
Clothier Springs Road Foster & Crosby, Inc. (international
Malvern, PA 19355 management consultants) (until 1985).

Harold R. Hiser, Jr. Director (3) Executive Vice President, Schering-
123 Highland Avenue Plough Corporation (pharmaceuticals)
Short Hill, NJ 07078 (until 1995); Director, ReCapital
Corporation (reinsurance).

Charles L. Ladner Director (3) Director, Energy North, Inc. (public
UGI Corporation utility holding company) (until 1992);
P.O. Box 858 Senior Vice President and Chief
Valley Forge, PA 19482 Financial Officer of UGI Corp. (public
utility holding company).

Leo E. Linbeck, Jr. Director (3) Chairman, President, Chief Executive
3810 W. Alabama Officer and Director, Linbeck
Houston, TX 77027 Corporation (a holding company engaged
in various phases of the construction
industry and warehousing interests);
Director and Chairman, Federal Reserve
Bank of Dallas; Chairman of the Board
and Chief Executive Officer, Linbeck
Construction Corporation; Director,
Panhandle Eastern Corporation (a
diversified energy company), Daniel
Industries, Inc. (manufacturer of gas
measuring products and energy related
equipment), GeoQuest International, Inc.
(a geophysical consulting firm) and
Greater Houston Partnership.

<FN>
- --------------------------
* An "interested person" of the Company as such term is defined in the Investment Company Act of
1940, as amended ("The Investment Company Act").
(1) Member of the Executive Committee. Under the Company's charter, the Executive Committee may
generally exercise most of the powers of the Board of Directors.
(2) A member of the Investment Committee of the Adviser.
(3) Member of the Audit Committee and the Committee on Administration.

</TABLE>
13

POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH THE COMPANY DURING THE PAST FIVE YEARS
- ---------------- ---------------- --------------------------
<S> <C> <C>
Patricia P. McCarter Director (3) Director and Secretary of the McCarter
1230 Brentford Road Corp. (machine manufacturer).
Malvern, PA 19355

Steven R. Pruchansky Director (1,3) Director and President, Mast Holdings,
6920 Daniel Road Inc.; Director, First Signature Bank &
Naples, FL 33942 Trust Company (until August
1991); Trustee, Mast Realty Trust (until
1994); President, Maxwell Building Corp.
(until 1991).

Norman H. Smith Director (3) Retired. Lieutenant General, United States
243 Mt. Oriole Lane Marine Corps; Deputy Chief of Staff for
Linden, VA 22642 Manpower and Reserve Affairs,
Headquarters Marine Corps; Commanding
General, III Marine Expeditionary
Force/3rd Marine Division (retired 1991).

John P. Toolan Director (3) Director, The Muni Bond Funds, National
13 Chadwell Place Liquid Reserves, Inc., The Tax Free
Morristown, NJ 07960 Money Fund, Inc. and Vantage Money
Market Funds (mutual funds), and The
Inefficient-Market Fund, Inc. (closed-end
investment company; Chairman, Smith
Barney Trust Company (retired December,
1991); Director, Smith Barney, Inc.,
Mutual Management Company and Smith
Barney Advisers, Inc. (investment
advisers) (until December 1991).
<FN>
- -----------------------
* An "interested person" of the Company as such term is defined in the 1940 Act.
(1) Member of the Executive Committee. Under the Company's charter, the Executive Committee may
generally exercise most of the powers of the Board of Directors.
(2) A member of the Investment Committee of the Adviser.
(3) Member of the Audit Committee and the Committee on Administration.

</TABLE>
14
<PAGE> 384
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH THE COMPANY DURING THE PAST FIVE YEARS
- ---------------- ---------------- --------------------------
<S> <C> <C>
Robert G. Freedman* Vice Chairman and Vice Chairman and Chief Investment
101 Huntington Avenue Chief Investment Officer, the Adviser; President, the Adviser
Boston, MA 02199 Officer (2) (until December 1994).

Anne C. Hodsdon* President (2) President and Chief Operating Officer, the
101 Huntington Avenue Adviser; Executive Vice President, the
Boston, MA 02199 Adviser (until December 1994); Senior
Vice President; the Adviser (until
December 1993); Vice President, the
Adviser, (until 1991).

Thomas H. Drohan* Senior Vice President Senior Vice President and Secretary of the
101 Huntington Avenue and Secretary Adviser.
Boston, MA 02199

James B. Little* Senior Vice President Senior Vice President, the Adviser.
101 Huntington Avenue and Chief Financial
Boston, MA 02199 Officer

Susan S. Newton* Vice President, Vice President and Assistant Secretary, the
101 Huntington Avenue Assistant Secretary Adviser.
Boston, MA 02199 and Compliance
Officer

John A. Morin* Vice President Vice President, the Adviser.
101 Huntington Avenue
Boston, MA 02199

James J. Stokowski* Vice President and Vice President, the Adviser.
101 Huntington Avenue Treasurer
Boston, MA 02199

<FN>
* An "interested person" of the Company as such term is defined in the Investment Company Act of
1940, as amended ("The Investment Company Act").
(1) Member of the Executive Committee. Under the Company's charter, the Executive Committee may
generally exercise most of the powers of the Board of Directors.
(2) A member of the Investment Committee of the Adviser.
(3) Member of the Audit Committee and the Committee on Administration.
</TABLE>
15

<PAGE> 385

All of the officers listed are officers or employees of the Adviser or
affiliated companies. Some of the Directors 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.

As of January 31, 1996 there were 265,680,969 shares outstanding of the
Fund, respectively, and the officers and Directors as a group beneficially owned
less than 1% of the outstanding shares of the Fund. As of February 2, 1996,
John Hancock Advisers, Inc., 101 Huntington Avenue, Boston, Massachusetts held
25 Class S shares representing 100% of the Funds Class S shares. At such date,
no other person owned of record or was known by the Corporation to beneficially
own as much as 5% or more of the outstanding Class A and B shares of the Fund.

As of December 22, 1994, the Directors established an Advisory Board
which acts to facilitate a smooth transition of management over a two-year
period (between Transamerica Fund Management Company ("TFMC"), the prior
investment adviser, and the Adviser). The members of the Advisory Board are
distinct from the Board of Directors, do not serve the Fund in any other
capacity and are persons who have no power to determine what securities are
purchased or sold and behalf of the Fund. Each member of the Advisory Board may
be contacted at 101 Huntington Avenue, Boston, Massachusetts 02199.

Members of the Advisory Board and their respective principal occupations
during the past five years are as follows:

R. Trent Campbell, President, FMS, Inc. (financial and management
services); former Chairman of the Board, Mosher Steel Company.

Mrs. Lloyd Bentsen, Formerly National Democratic Committeewoman
from Texas; co-founder, Houston Parents' League; former board member of
various civic and cultural organizations in Houston, including the Houston
Symphony, Museum of Fine Arts and YWCA. Mrs. Bentsen is presently active in
various civic and cultural activities in the Washington, D.C. area, including
membership on the Area Board for The March of Dimes and is a National Trustee
for the Botanic Gardens of Washington, D.C.

Thomas R. Powers, Formerly Chairman of the Board, President and
Chief Executive Officer, TFMC; Director, West Central Advisory Board,
Texas Commerce Bank; Trustee, Memorial Hospital System; Chairman of the Board of
Regents of Baylor University; Member, Board of Governors, National Association
of Securities Dealers, Inc.; Formerly, Chairman, Investment Company Institute;
formerly, President, Houston Chapter of Financial Executive Institute.

17
<PAGE> 386

National Bank of Bryan; Advisory Director, Sterling Bancshares; Former
Director and Vice Chairman, Texas Commerce Bancshares; and Vice Chairman, Texas
Commerce Bank.

COMPENSATION OF THE BOARD OF DIRECTORS AND ADVISORY BOARD. 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
Directors and the Advisory Board members for their services. Mr. Boudreau, a
non-Independent Director, and each of the officers of the Fund who are
interested persons of the Adviser, are compensated by the Adviser and received
no compensation from the Fund for their services.

Pension or Total
Retirement Compensation
Benefits Accrued from all Funds in
Aggregate as Part of the John Hancock
Compensation Fund's Fund Complex to
Trustees from the Fund* Expenses* Trustees**
- -------- -------------- --------- ----------
<S> <C> <C> <C>
James F. Carlin $ 346 $ 0 $ 60,700
William H. Cunningham 402 696 69,700
Charles F. Fretz 29 0 56,200
Harold R. Hiser, Jr. -- 48 60,200
Charles L. Ladner 454 0 60,700
Leo E. Linbeck, Jr. 1,348 0 73,200
Patricia P. McCarter 454 0 60,700
Steven R. Pruchansky 470 0 62,700
Norman H. Smith 470 0 62,700
John P. Toolan 4 342 60,700
------ ------ --------
Total $3,977 $1,086 $627,500

<FN>
* Compensation is for the fiscal year ended October 31, 1995.

** The total compensation paid by the John Hancock Fund Complex to the
Independent Trustees/Directors was $627,500 as of the calendar year ended
December 31, 1995. All Trustees/Directors except Messrs. Cunningham and
Linbeck are Trustees/Directors of 32 funds in the John Hancock Fund Complex.
Messrs. Cunningham and Linbeck are Trustees/Directors of 30 funds.
</TABLE>

18
<PAGE> 387

<TABLE>
<CAPTION>
Pension or Total Compensation
Retirement from all Funds in
Aggregate Benefits Accrued John Hancock
Compensation as Part of the Fund Complex to
Advisory Board*** from the Fund* Fund's Expenses Advisory Board**
- -------------- -------------- --------------- ----------------
<S> <C> <C> <C>
R. Trent Campbell $1,675 $0 $ 70,000
Mrs. Lloyd Bentsen $1,204 $0 $ 63,000
Thomas R. Powers $1,175 $0 $ 63,000
Thomas B. McDade $1,675 $0 $ 63,000
------ --------
TOTAL $5,729 $0 $259,000

<FN>
* Compensation is for the Fiscal year ended October 31, 1995.
** As of December 31, 1995
</TABLE>

INVESTMENT ADVISORY AND OTHER SERVICES

As described in the 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
Directors and principal officers affiliated with the Fund who is also an
affiliated person of the Adviser is named above, together with the capacity in
which such person is affiliated with the Fund, the Adviser or TFMC (the Fund's
prior investment adviser).

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
the other mutual funds and publicly traded investment companies in the John
Hancock group of funds having a combined total of over 1,080,000 shareholders.
The Adviser is a wholly-owned subsidiary of The Berkeley Financial Group, which
is in turn a wholly-owned subsidiary of John Hancock Subsidiaries, Inc., which
is in turn a wholly-owned subsidiary 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 the 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.

As described in the Prospectus under the caption "Organization and
Management of the Fund," the Fund has entered into an investment management
contract with the Adviser. Under the investment management contract, the Adviser
provides the Fund with (i) a continuous investment program, consistent with the
Fund's stated investment objective and policies, (ii) supervision of all

<PAGE> 388

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 day-to-day
management of the Fund's portfolio assets.

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 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, equipment and supplies and other
facilities and personnel required for the business of the Fund. The Adviser pays
the compensation of all officers and employees of the Fund and pays the expenses
of clerical services relating to the administration of the Fund. All expenses
which are not specifically paid by the Adviser and which are incurred in the
operation of the Fund including, but not limited to, (i) the fees of the
Directors of the Fund who are not "interested persons," as such term is defined
in the 1940 Act (the "Independent Directors"), (ii) the fees of the members of
the Fund's Advisory Board (described above) and (iii) the continuous public
offering of the shares of the Fund are borne by the Fund.

<TABLE>
As provided by the investment management contract, the Fund pays the
Adviser an investment management fee, which is accrued daily and paid monthly in
arrears, equal on an annual basis to a percentage of the Fund's average daily
net asset value as follows:

<CAPTION>
Fee
Average Daily Net Assets of the Fund (annual rate)
- ------------------------------------ -------------
<S> <C>
First $500 million . . . . . . . . . . . . . . . . . . . . . . 0.500%*
Next $250 million. . . . . . . . . . . . . . . . . . . . . . . 0.425%
Next $250 million. . . . . . . . . . . . . . . . . . . . . . . 0.375%
Next $500 million. . . . . . . . . . . . . . . . . . . . . . . 0.350%
Next $500 million. . . . . . . . . . . . . . . . . . . . . . . 0.325%
Next $500 million. . . . . . . . . . . . . . . . . . . . . . . 0.300%
Amount Over $2.5 billion . . . . . . . . . . . . . . . . . . . 0.275%

<FN>
* The Adviser has reduced the fee to 0.40% of the Fund's average daily net assets and can not
reinstate the fee to 0.50% without Trustees' consent.
</TABLE>

The Adviser may temporarily reduce its advisory fee or make other
arrangements to reduce the Fund's expenses to a specified percentage of average
daily net assets. The Adviser retains the right to re-impose the advisory 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.

<PAGE> 389
In the event normal operating expenses of the Fund, exclusive of certain
expenses prescribed by state law, are in excess of any 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
any additional arrangements necessary to eliminate any remaining excess
expenses. Currently, the most restrictive limit applicable to the Fund is 2.5%
of the first $30,000,000 of the Fund's average daily net asset value, 2% of the
next $70,000,000 and 1.5% of the remaining average daily net asset value.

Pursuant to the investment management contract, the Adviser is not
liable to the Fund or its shareholders 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 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 its reckless disregard of the obligations and duties under the
applicable contract.

The investment management contract initially expires on December 22,
1996 and will continue in effect from year to year thereafter if approved
annually by a vote of a majority of the Independent Directors of the Fund, cast
in person at a meeting called for the purpose of voting on such approval, and by
either a majority of the Directors or the holders of a majority of the Fund's
outstanding voting securities. The management contract may, on 60 days' written
notice, be terminated at any time without the payment of any penalty to the Fund
by vote of a majority of the outstanding voting securities of the Fund, by the
Directors or by the Adviser. The management contract terminates automatically
in the event of its assignment.

Securities held by the Fund may also be held by other funds or
investment advisory clients for which the Adviser or its 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 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 its
respective affiliates may increase the demand for securities being purchased or
the supply of securities being sold, there may be an adverse effect on price.

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
investment management contract or any extension, renewal or amendment thereof
remains in effect. If the Fund's investment management contract is no longer in
effect, the Fund (to the extent that it lawfully can) will cease to use such
name or any other name indicating that it is advised by or otherwise connected
with the Adviser. In

<PAGE> 390

addition, the Adviser or the 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 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.

For the fiscal years ended October 31, 1993 and 1994 advisory fees
payable by the Fund to TFMC, the Fund's former investment adviser, amounted to
$142,298 and $214,088, respectively. For the fiscal year ended October 31, 1995
advisory fees paid by the Fund to the Adviser was $271,782.

DISTRIBUTION CONTRACT

DISTRIBUTION CONTRACT. As discussed in the Prospectus, the Fund's
shares are sold on a continuous basis at the public offering price. John Hancock
Funds, a wholly-owned subsidiary of the Adviser, has the exclusive right,
pursuant to the Distribution Contract dated December 22, 1994 (the "Distribution
Contract"), to purchase shares from the Fund at net asset value for resale to
the public or to broker-dealers at the public offering price.

The Distribution Contract was initially adopted by the affirmative vote
of the Fund's Board of Directors including the vote of a majority of Independent
Directors, cast in person at a meeting called for such purpose. The
Distribution Contract shall continue in effect until December 22, 1996 and from
year to year thereafter if approved by either the vote of the Fund's
shareholders or the Board of Directors including the vote of a majority of
Independent Directors, cast in person at a meeting called for such purpose. The
Distribution Contract may be terminated at any time, without penalty, by either
party upon sixty (60) days' written notice or by a vote of a majority of the
outstanding voting securities of the Fund and terminates automatically in the
case of an assignment by John Hancock Funds.

DISTRIBUTION PLAN. The Board of Directors, including the Independent
Directors of the Fund, approved a new distribution plan pursuant to Rule 12b-1
under the 1940 Act for Class S shares of the Fund (the "Plan"). The Plan was
approved by the sole shareholder of Class S shares of the Fund on September 12,
1995 and became effective on September 12, 1995.

Under the Plan, the distribution or service fee will not exceed an
annual rate of 0.40% of the average daily net asset value of the Fund
attributable to Class S shares (determined in accordance with the Fund's
Prospectus as from time to time in effect). In accordance with generally
accepted accounting principles, the Fund does not treat unreimbursed
distribution expenses attributable to Class S shares as a liability of the Fund
and does not reduce the current net assets of Class B by such amount although
the amount may be payable under the Plan in the future.

<PAGE> 391

Under the Plan, expenditures shall be calculated and accrued daily and
paid monthly or at such other intervals as the Directors shall determine. The
fee may be spent by John Hancock Funds on Distribution Expenses or Service
Expenses. "Distribution Expenses" include any activities or expenses primarily
intended to result in the sale of Class S shares of the Fund, including, but not
limited to: (i) initial and ongoing sales compensation payable out of such fee
as such compensation is received by John Hancock Funds, other brokers or
financial service firms who have arrangements with John Hancock Funds engaged in
the sale of Class S shares, (ii) direct out-of-pocket expenses incurred in
connection with the distribution of Class S shares, including expenses related
to printing of prospectuses and reports; (iii) preparation, printing and
distribution of sales literature and advertising material; (iv) an allocation of
overhead and other branch office expenses of John Hancock Funds related to the
distribution of Class S shares; and (v) in the event that any other investment
company (the "Acquired Fund") sells all or substantially all of its assets to,
merges with or otherwise engages in a combination with the Fund, distribution
expenses originally incurred in connection with the distribution of the Acquired
Fund's shares. Service Expenses under the Plan include payments made to, or on
account of, account executives of selected broker-dealers (including affiliates
of John Hancock Funds) and others who furnish personal and shareholder account
maintenance services to Class S shareholders of the Fund.

The Plan provides that it will continue in effect only as long as its
continuance is approved at least annually by a majority of both the Directors
and the Independent Directors. The Plan provides that it may be terminated (a)
at any time by vote of a majority of the Directors, a majority of the
Independent Directors, or a majority of the outstanding voting securities of
the Class S shares of the Fund or (b) by John Hancock Funds on 60 days' notice
in writing to the Fund. The Plan 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 Class S shares of the
Fund. The Plan provides that no material amendment to the Plan will, in any
event, be effective unless it is approved by a majority vote of the Directors
and the Independent Directors of the Fund. In adopting the Plans, the Board of
Directors has determined that, in their judgment, there is a reasonable
likelihood that the Plan will benefit the holders of the Class S shares of the
Fund.

Information regarding the services rendered under the Plan and the
Distribution Contract and the amounts paid therefor by the Fund is provided to,
and reviewed by, the Board of Directors on a quarterly basis. In its quarterly
review, the Board of Directors considers the continued appropriateness of the
Plan and the Distribution Contract and the level of compensation provided
therein.

<PAGE> 392

When the Fund seeks an Independent Director to fill a vacancy or as a
nominee for election by shareholders, the selection or nomination of the
Independent Director is, under resolutions adopted by the Directors
contemporaneously with their adoption of the Plan, committed to the discretion
of the Committee on Administration of the Directors. The members of the
Committee on Administration are all Independent Directors and identified in this
Statement of Additional Information under the heading "Those Responsible for
Management."

AMORTIZED COST METHOD OF PORTFOLIO VALUATION

The Fund utilizes the amortized cost valuation method of valuing
portfolio instruments in the absence of extraordinary or unusual circumstances.
Under the amortized cost method, assets are valued by constantly amortizing over
the remaining life of an instrument the difference between the principal amount
due at maturity and the cost of the instrument to the Fund. The Directors will
from time to time review the extent of any deviation of the net asset value, as
determined on the basis of the amortized cost method, from net asset value as it
would be determined on the basis of available market quotations. If any
deviation occurs which may result in unfairness either to new investors or
existing shareholders, the Directors will take such actions as they deem
appropriate to eliminate or reduce such unfairness to the extent reasonably
practicable. These actions may include selling portfolio instruments prior to
maturity to realize gains or losses or to shorten the Fund's average portfolio
maturity, withholding dividends, splitting, combining or otherwise
recapitalizing outstanding shares or utilizing available market quotations to
determine net asset value per share.

Since a dividend is declared to shareholders each time net asset value
is determined, the net asset value per share of the Fund will normally remain
constant at $1.00 per share. There is no assurance that the Fund can maintain
the $1.00 per share value. Monthly, any increase in the value of a shareholder's
investment from dividends is reflected as an increase in the number of shares in
the shareholder's account or is distributed as cash if a shareholder has so
elected.

It is expected that the Fund's net income will be positive each time it
is determined. However, if because of a sudden rise in interest rates or for any
other reason the net income of the Fund determined at any time is a negative
amount, the Fund will offset the negative amount against income accrued during
the month for each shareholder account. If at the time of payment of a
distribution such negative amount exceeds a shareholder's portion of accrued
income, the Fund may reduce the number of its outstanding shares by treating the
shareholder as having contributed to the capital of the Fund that number of full
or fractional shares which represents the amount of excess. By investing in the
Fund, shareholders are deemed to have agreed to make such a contribution. This
procedure is intended to permit the Fund to maintain its net asset value at
$1.00 per share.

24
<PAGE> 393

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 Directors. 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 elected to be
governed by Rule 18f-1 under the 1940 Act, pursuant to which the Fund is
obligated to redeem shares solely in cash up to the lesser of $250,000 or 1% of
the net asset value of the Fund during any 90 day period for any one account.

DESCRIPTION OF THE CORPORATION'S SHARES

The Fund operates as one series of the Corporation. All shares of stock
of the Corporation ($.01 par value per share) have equal voting rights among
shares of the same series (except that each class of shares within a series has
sole voting rights with respect to matters solely affecting that class). On
September 12, 1995, the Corporation's Articles of Incorporation were amended to
increase the authorized common stock of the Corporation from 375,000,000 to
2,500,000,000 shares of Class A Common Stock, from 625,000,000 to 3,000,000,000
shares of Class B Common Stock; and from 0 to 1,000,000,000 shares of Class S
Common Stock. No shares of any series or class have pre-emptive or conversion
rights. Each series of shares represents interests in a separate portfolio of
investments. Each is entitled to all income and gains (or losses) and bears all
of the expenses associated with the operations of that portfolio except that
each class of a series bears its own DISTRIBUTION EXPENSES. Common expenses of
the Corporation are allocated among the series, based upon the respective net
assets or ratably or a combination of both whichever is more appropriate, of
each series.

<PAGE> 394

series or class of the Corporation, all assets in which such consideration is
invested and all income, earnings and profits derived from such investments
will be allocated to and belong to that series or class. As such, each share is
entitled to dividends and distributions out of the net income belonging to that
series or class as declared by the Board of Directors. The assets of each
series are charged with the liabilities of that series and with a share of the
Corporation's general liabilities.

The Corporation has authorized the issuance of three classes of common
stock for the Fund, designated as Class A, Class B and Class S shares. Class A,
Class B and Class S shares each represent an interest in the same assets of the
Fund and are identical in all respects except that each class bears certain
expenses related to the distribution of such shares and certain expenses related
to transfer agency services. Like Class S shares, Class A shares are not subject
to a sales charge on purchases, redemptions or reinvested dividends, nor are
they subject to deferred sales charges or an exchange fee. While Class B shares
are not subject to a sales charge on purchases or reinvested dividends, nor
subject to an exchange fee, Class B shares are subject to a contingent deferred
sales charge if redeemed within six years of purchase. The holders of Class A,
Class B and Class S 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. The
Directors of the Corporation may classify and reclassify the shares of the Fund
into additional classes of common stock at a future date.

<PAGE> 395

Corporation or any class of a series for action by shareholder vote as
may be required by the 1940 Act. Pursuant to an undertaking to the Securities
and Exchange Commission, the Corporation will call a meeting of shareholders for
any purpose, including voting to remove one or more Directors, on the written
request of the holders of at least 10% of the outstanding shares of the
Corporation. The Fund will assist shareholders with any communications including
shareholder proposals.

DIRECTOR AND OFFICER LIABILITY. Under the Corporation's Articles of
Incorporation and the Maryland General Company Law, the directors, officers,
employees and agents of the Corporation are entitled to indemnification under
certain circumstances against liabilities, claims and expenses arising from any
threatened, pending or completed action, suit or proceeding to which they are
made parties by reason of the fact that they are or were such directors,
officers, employees or agents of the Corporation except as such liability may
arise from their own bad faith, willful misfeasance, gross negligence or
reckless disregard of duties.

TAX STATUS

The Fund has qualified and has elected to be treated as a "regulated
investment company" under Subchapter M of the Code, and intends to continue to
so qualify in the future. 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, if any) which is distributed to shareholders at least annually in
accordance with the timing requirements of the Code.

The Fund will be subject to a 4% non-deductible 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 include original issue
discount and accrued, recognized market discount) and any net realized
short-term capital gains, as computed for Federal income tax purposes, will be
taxable as described in the Prospectus whether taken in shares or in cash.
Although the Fund does not expect to realize any net long-term capital gains,
distributions from such gains, if any, would be taxable as long-term capital
gains. 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 they would have received had they taken the
distribution in cash, divided by the number of shares received.

27
<PAGE> 396

Upon a redemption of shares (including by exercise of the exchange
privilege) a shareholder ordinarily will not realize a taxable gain or loss if,
as anticipated, the Fund maintains a constant net asset value per share. If the
Fund is not successful in maintaining a constant net asset value per share, a
redemption may produce a taxable gain or loss.

Distributions from the Fund will not qualify for the dividends-received
deduction for corporate shareholders.

For Federal income tax purposes, the Fund is permitted to carry forward
a net 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 would not be distributed as such to shareholders.

The foregoing discussion relates solely to U.S. Federal income tax laws
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 (if any), and ownership of
or gains realized (if any) on the redemption of shares of the Fund 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 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 nonresident alien withholding tax at the rate of 31%
(or a lower rate under an applicable tax treaty) on amounts treated as ordinary
dividends 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.

Provided that the Fund qualifies as a regulated investment company under
the Code, the Fund will also not be required to pay any Massachusetts income
tax.

28
<PAGE> 397

CALCULATION OF PERFORMANCE

For the purposes of calculating yield, daily income per share consists
of interest and discount earned on the Fund's investments less provision for
amortization of premiums and applicable expenses, divided by the number of
shares outstanding, but does not include realized or unrealized appreciation or
depreciation.

Yield calculations are based on the value of a hypothetical preexisting
account with exactly one share at the beginning of the seven day period. Yield
is computed by determining the net change in the value of the account during the
base period and dividing the net change by the value of the account at the
beginning of the base period to obtain the base period return. Base period is
multiplied by 365/7 and the resulting figure is carried to the nearest 100th of
a percent. Net change in account value during the base period includes dividends
declared on the original share, dividends declared on any shares purchased with
dividends of that share and any account or sales charges that would affect an
account of average size, but excludes any capital changes.

EFFECTIVE YIELD = [(BASE PERIOD RETURN + 1)365/7]-1

<PAGE> 398

From time to time, in reports and promotional literature, the Fund's
yield and total return will be ranked or compared to indices of mutual funds and
bank deposit vehicles such as Lipper Analytical Services, Inc. "Lipper-Fixed
Income Fund Performance Analysis," a monthly publication which tracks net
assets, total return, and yield on fixed income mutual funds in the United
States or "IBC/Donahue's Money Fund Report," a similar publication. Comparisons
may also be made to bank Certificates of Deposit, which differ from mutual
funds, like the Fund, in several ways. The interest rate established by the
sponsoring bank is fixed for the term of a CD, there are penalties for early
withdrawal from CD's and the principal on a CD is insured. Unlike CD's, which
are insured as to principal, an investment in the Fund is not insured or
guaranteed.

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 BARRONS, will also be
utilized. The Fund's promotional and sales literature may make reference to the
Fund's "beta." Beta is a reflection of the market-related risk of the Fund by
showing how responsive the Fund is to the market.

BROKERAGE ALLOCATION

Decisions concerning the purchase and sale of portfolio securities are
made by the Adviser pursuant to recommendations made by its investment
committee, which consists of officers and directors of the Adviser and
affiliates and officers and Directors 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 Adviser 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 NASD and other policies that the
Directors 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.

<PAGE> 399

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 make no commitments to allocate portfolio
transactions upon any prescribed basis. While the adviser'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 Directors. For the fiscal years
ended October 31, 1995, 1994 and 1993, no negotiated brokerage commissions were
paid on portfolio transactions.

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 Directors that the price is
reasonable in light of the services provided and to policies that the Directors
may adopt from time to time. During the fiscal year ended October 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 Freedom Securities Corporation and its subsidiaries,
three of which, Tucker Anthony Incorporated ("Tucker Anthony"), John Hancock
Distributors, Inc. ("John Hancock Distributors") and Sutro & Company, Inc.
("Sutro"), are broker-dealers ("Affiliated Brokers"). Pursuant to procedures
determined by the Directors and consistent with the above policy of obtaining
best net results, the Fund may execute portfolio transactions with or through
Tucker Anthony, Sutro or John Hancock Distributors. During the year ended
October 31, 1995, the Fund did not execute any portfolio transactions with then
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 Directors pursuant to the 1940 Act.
Commissions paid to an Affiliated Broker must be at least as favorable as those
which the Directors believe to be contemporaneously charged by other brokers in
connection with comparable transactions involving similar securities being
purchased or sold. A

<PAGE> 400

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 a 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
Directors who are not interested persons (as defined in the 1940 Act) of the
Fund, the Adviser or the Affiliated Brokers. 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 Brokers 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. The Fund may, however, purchase securities from other members of
underwriting syndicates of which Tucker Anthony, Sutro and John Hancock
Distributors are members, but only in accordance with the policy set forth above
and procedures adopted and reviewed periodically by the Directors.

TRANSFER AGENT SERVICES

CUSTODY OF PORTFOLIO

Effective September 30, 1995, portfolio securities of the Fund are held
pursuant to a custodian agreement between the Fund and State Street Bank and
Trust Company, 225 Franklin Street, Boston, Massachusetts 02110. Prior to such
date, portfolio securities of the Fund are held pursuant to a custodian
agreement between the Fund and Investors Bank and Trust Company, 24 Federal
Street, Boston, Massachusetts. Under the custodian agreement, the custodian
performs custody, portfolio and fund accounting services.

<PAGE> 401

INDEPENDENT AUDITORS

Ernst & Young LLP, 200 Clarendon Street, Boston, Massachusetts 02116,
has been selected as the independent auditors of the Fund. The financial
statements of the Fund included in the Prospectus and this Statement of
Additional Information have been audited by Ernst & Young LLP for the periods
indicated in their report thereon appearing elsewhere herein, and are included
in reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.

<PAGE> 402

APPENDIX A

CORPORATE AND TAX-EXEMPT BOND RATINGS

MOODY'S INVESTORS SERVICE, INC. ("MOODY'S)

AAA, AA, A AND BAA - Tax-exempt bonds rated Aaa are judged to be of the
"best quality." The rating of Aa is assigned to bonds that are of "high quality
by all standards," but long-term risks appear somewhat larger than Aaa rated
bonds. The Aaa and Aa rated bonds are generally known as "high grade bonds."
The foregoing ratings for tax-exempt bonds are rated conditionally. Bonds for
which the security depends upon the completion of some act or upon the
fulfillment of some condition are rated conditionally. These are bonds secured
by (a) earnings of projects under construction, (b) earnings of projects
unseasoned in operation experience, (c) rentals that begin when facilities are
completed, or (d) payments to which some other limiting condition attaches. Such
conditional ratings denote the probable credit stature upon completion of
construction or elimination of the basis of the condition. Bonds rated A are
considered as upper medium grade obligations. Principal and interest are
considered adequate, but elements may be present which suggest a susceptibility
to impairment sometime in the future. Bonds rated Baa are considered a medium
grade obligations; i.e., they are neither highly protected or 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.

STANDARD & POOR'S RATINGS GROUP ("S&P")

A-1

<PAGE> 403

comment on the likelihood of, or the risk of default upon failure of,
such completion. Bonds rated BBB are regarded as having an adequate capacity to
repay principal and pay interest. Whereas they normally exhibit protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to repay principal and pay interest for
bonds in this category than for bonds in the A category.

FITCH INVESTORS SERVICE ("FITCH")

TAX-EXEMPT NOTE RATINGS

A-2
<PAGE> 404
CORPORATE AND TAX-EXEMPT COMMERCIAL PAPER RATINGS

FITCH - Commercial Paper ratings reflect current appraisal of the degree
of assurance of timely payment. F-1 issues are regarded as having the strongest
degree of assurance for timely payment. (+) is used to designate the relative
position of an issuer within the rating category. F-2 issues reflect an
assurance of timely payment only slightly less in degree than the strongest
issues. The symbol (LOC) may follow either category and indicates that a letter
of credit issued by a commercial bank is attached to the commercial paper note.

A-3

<PAGE> 405

FINANCIAL STATEMENTS

F-1

<PAGE> 406
FINANCIAL STATEMENTS

JOHN HANCOCK FUNDS - MONEY MARKET FUND

** Class A shares commenced operations on September 12, 1995.

THE STATEMENT OF OPERATIONS SUMMARIZES THE FUND'S INVESTMENT INCOME EARNED AND
EXPENSES INCURRED IN OPERATING THE FUND.

SEE NOTES TO FINANCIAL STATEMENTS.

5
<PAGE> 407
FINANCIAL STATEMENTS

JOHN HANCOCK FUNDS - MONEY MARKET FUND

STATEMENT OF CHANGES IN NET ASSETS
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

* ANALYSIS OF FUND SHARE TRANSACTIONS:

** Class A shares commenced operations on September 12, 1995.

SEE NOTES TO FINANCIAL STATEMENTS.

6
<PAGE> 408
FINANCIAL STATEMENTS

JOHN HANCOCK FUNDS - MONEY MARKET 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:

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

SEE NOTES TO FINANCIAL STATEMENTS.

7
<PAGE> 409
FINANCIAL STATEMENTS

JOHN HANCOCK FUNDS - MONEY MARKET FUND

SCHEDULE OF INVESTMENTS
October 31, 1995
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

SEE NOTES TO FINANCIAL STATEMENTS.

8
<PAGE> 410
<TABLE>
<CAPTION>
PAR VALUE
INTEREST QUALITY (000'S
ISSUER, DESCRIPTION RATE RATINGS(*) OMITTED) VALUE
- ------------------- -------- ---------- --------- -----
<S> <C> <C> <C> <C>
FINANCE (CONTINUED)
American Honda Finance Corp.,
11-06-95 ............................. 5.800% Tier 1 $ 700 $ 699,436
American Honda Finance Corp.,
11-15-95 ............................. 5.800 Tier 1 1,300 1,297,068
American Honda Finance Corp.,
12-08-95 ............................. 5.780 Tier 1 1,600 1,590,495
General Electric Capital Corp.,
11-14-95 ............................. 5.730 Tier 1 1,500 1,496,896
International Business Machines,
11-13-95 ............................. 5.730 Tier 1 470 469,102
----------
6,452,997
----------
MORTGAGE BANKING (5.57%)
Countrywide Funding Corp.,
11-01-95 ............................. 5.770 Tier 1 1,000 1,000,000
Countrywide Funding Corp.,
11-10-95 ............................. 5.780 Tier 1 1,300 1,298,122
Countrywide Funding Corp.,
11-17-95 ............................. 5.800 Tier 1 1,900 1,895,102
----------
4,193,224
----------
RETAIL STORES (11.54%)
Melville Corp.,
11-13-95 ............................. 5.740 Tier 1 3,000 2,994,260
Melville Corp.,
11-13-95 ............................. 5.750 Tier 1 500 499,042
Melville Corp.,
11-16-95 ............................. 5.770 Tier 1 700 698,317
Sears Roebuck Acceptance Corp.,
11-06-95 ............................. 5.760 Tier 1 1,200 1,199,040
Sears Roebuck Acceptance Corp.,
11-10-95 ............................. 5.750 Tier 1 2,700 2,696,119
Sears Roebuck Acceptance Corp.,
12-06-95 ............................. 5.750 Tier 1 600 596,646
----------
8,683,424
----------
UTILITIES - ELECTRIC (10.61%)
Pacific Gas and Electric Co.,
11-07-95 ............................. 5.720 Tier 1 500 499,523
Pennsylvania Power & Light Co.,
11-07-95 ............................. 5.850 Tier 1 1,000 999,025
Pennsylvania Power & Light Co.,
11-08-95 ............................. 5.850 Tier 1 2,000 1,997,725
Public Service Electric and Gas Co.,
11-09-95 ............................. 5.770 Tier 1 2,200 2,197,179
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

9
<PAGE> 411
<TABLE>
<CAPTION>
PAR VALUE
INTEREST QUALITY (000'S
ISSUER, DESCRIPTION RATE RATINGS(*) OMITTED) VALUE
- ------------------- -------- ---------- --------- -----
<S> <C> <C> <C> <C>
UTILITIES - ELECTRIC (CONTINUED)
Public Service Electric and Gas Co.,
11-15-95.............................. 5.750% Tier 1 $ 1,400 $ 1,396,870
Public Service Electric and Gas Co.,
11-28-95.............................. 5.760 Tier 1 900 896,112
-----------
7,986,434
-----------
UTILITIES - TELEPHONE (8.00%)
American Telephone & Telegraph Co.,
11-01-95.............................. 5.860 Tier 1 220 220,000
American Telephone & Telegraph Co.,
11-13-95.............................. 5.720 Tier 1 3,000 2,994,280
GTE Northwest Inc.,
11-15-95.............................. 5.720 Tier 1 1,010 1,007,753
GTE Northwest Inc.,
11-16-95.............................. 5.740 Tier 1 1,800 1,795,695
-----------
6,017,728
-----------
TOTAL COMMERCIAL PAPER
(Cost $46,988,126) (62.44%) 46,988,126
------- -----------

SEE NOTES TO FINANCIAL STATEMENTS.

10
<PAGE> 412
<TABLE>
<CAPTION>
PAR VALUE
INTEREST QUALITY (000'S
ISSUER, DESCRIPTION RATE RATINGS(*) OMITTED) VALUE
- ------------------- -------- ---------- --------- -----
<S> <C> <C> <C> <C>
CHEMICAL (2.67%)
duPont (E.I.) de Nemours & Co.,
12-15-95.................................... 8.480% Tier 1 $ 2,000 $ 2,005,493
-----------
DIVERSIFIED (1.34%)
General Electric Co.,
05-01-96.................................... 7.875 Tier 1 1,000 1,009,754
-----------
FINANCE (4.95%)
Associates Corp. of North America,
03-01-96.................................... 8.800 Tier 1 2,700 2,724,233
General Electric Capital Corp.,
11-15-95.................................... 5.250 Tier 1 1,000 999,492
-----------
3,723,725
-----------
TOTAL CORPORATE INTEREST
BEARING OBLIGATIONS
(Cost $14,107,087) (18.75%) 14,107,087
------- -----------
U. S. GOVERNMENT OBLIGATIONS
GOVERNMENTAL - U. S. AGENCIES (13.29%)
Federal Farm Credit Bank,
11-01-95.................................... 5.730 Tier 1 10,000 10,000,000
-----------
TOTAL U. S. GOVERNMENT OBLIGATIONS
(Cost $10,000,000) (13.29%) 10,000,000
------- -----------
JOINT REPURCHASE AGREEMENT
Investment in a joint repurchase agreement
transaction with SBC Capital Markets -
Dated 10-31-95, Due 11-01-95 (secured
by U.S. Treasury Bond, 8.750%
Due 05-15-17, and by U.S. Treasury
Note, 5.750% Due 09-30-97) Note A........... 5.890 653 653,000
-----------
TOTAL JOINT REPURCHASE AGREEMENT
(Cost $653,000) (0.87%) 653,000
------- -----------
TOTAL INVESTMENTS (99.33%) $74,748,213
======= ===========
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

11
<PAGE> 413
NOTES TO FINANCIAL STATEMENTS

JOHN HANCOCK FUNDS - MONEY MARKET FUND

NOTE A --
ACCOUNTING POLICIES

CLASS ALLOCATIONS Income, common expenses and realized and unrealized gains
(losses) are calculated at the Fund level and allocated daily

12
<PAGE> 414
NOTES TO FINANCIAL STATEMENTS

JOHN HANCOCK FUNDS - MONEY MARKET FUND

NOTE B --
MANAGEMENT FEE, ADMINISTRATIVE SERVICES AND TRANSACTIONS WITH AFFILIATES AND
OTHERS

TFMC, for its respective period, provided administrative services to the
Fund pursuant to an administrative service agreement through January 16, 1995 on
which day the agreement was terminated.

13
<PAGE> 415
NOTES TO FINANCIAL STATEMENTS

JOHN HANCOCK FUNDS - MONEY MARKET FUND

Services. Prior to this date The Shareholder Services Group was the transfer
agent. The Fund will pay Investor Services a fee based on transaction volume and
number of shareholder accounts.

A partner with Baker & Botts was an officer of the Trust until December 22,
1994. During the period ended October 31, 1995, legal fees paid to Baker & Botts
amounted to $688.

NOTE C --
INVESTMENT TRANSACTIONS

NOTE D --
PLAN OF REORGANIZATION

14
<PAGE> 416
JOHN HANCOCK FUNDS - MONEY MARKET FUND

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

To the Board of Directors and Shareholders of
John Hancock Series, Inc. --
John Hancock Money Market Fund

ERNST & YOUNG LLP

Boston, Massachusetts
December 15, 1995

TAX INFORMATION NOTICE (UNAUDITED)

Shareholders will be mailed 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 calendar year 1995.

15
<PAGE> 417

JOHN HANCOCK SERIES, INC.

PART C.

OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS

(a) Financial Statements included in the Registration Statement:

John Hancock Emerging Growth Fund
John Hancock High Yield Tax-Free Fund
John Hancock High Yield Bond Fund
John Hancock Global Resources Fund
John Hancock Government Income Fund
John Hancock Money Market Fund

Statement of Assets and Liabilities as of October 31, 1995.
Statement of Operations for the year ended October 31, 1995.
Statement of Changes in Net Assets for the years ended October 31, 1994
and 1995.
Notes to Financial Statements.
Financial Highlights.
Schedule of Investments as of October 31, 1995.

(b) Exhibits:

The exhibits to this Registration Statement are listed in the Exhibit
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.

<TABLE>
ITEM 26. NUMBER OF HOLDERS OF SECURITIES

As of January 31, 1996, the number of record holders of shares of the
Registrant were as follows:

<CAPTION>
TITLE OF CLASS NUMBER OF RECORD HOLDERS
-------------- ------------------------

<S> <C>
John Hancock Emerging Growth Fund
Class A Shares 11,338
Class B Shares 24,094

John Hancock High Yield Tax-Free Fund
Class A Shares 478
Class B Shares 2,998

</TABLE>

C-1
<PAGE> 418

<TABLE>
<CAPTION>
TITLE OF CLASS NUMBER OF RECORD HOLDERS
-------------- ------------------------

<S> <C>
John Hancock High Yield Bond Fund
Class A Shares 906
Class B Shares 7,152

John Hancock Money Market Fund
Class A Shares 27,613
Class B Shares 2,933
Class S Shares 2

John Hancock Global Resources Fund
Class A Shares 280
Class B Shares 3,185

John Hancock Government Income Fund
Class A Shares 23,701
Class B Shares 7,837

</TABLE>

ITEM 27. INDEMNIFICATION

(a) Indemnification provisions relating to the Registrant's Directors,
officers, employees and agents is set forth in Article V of the Registrant's By
Laws included as Exhibit 2 herein.

(b) Under Section 12 of the Distribution Agreement, John Hancock
Funds, Inc. ("John Hancock Funds") has agreed to indemnify the Registrant and
its Directors, officers and controlling persons against claims arising out of
certain acts and statements of John Hancock Funds.

Section 9(a) of the By-Laws of the John Hancock Mutual Life Insurance
Company (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
Director 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 John
Hancock Advisers, Inc. (the "Adviser") provide as follows:

C-2
<PAGE> 419

"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 director, officer, employee or agent of the
Corporation, or is or was at any time since the inception of the Corporation
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 a person."

Insofar as indemnification for liabilities under the Securities Act of 1933
(the "Act") may be permitted to Directors, officers and controlling persons of
the Registrant pursuant to the Registrant's Amended and Restated Articles of
Incorporation and By-Laws, the Distribution Agreement, the By-Laws of John
Hancock Funds, the Adviser, or the Insurance Company or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
Directors, officer or controlling person in connection with the securities
being registered, the 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 Adviser,
reference is made to Form ADV (801-8124) filed under the Investment Advisers
Act of 1940, which is incorporated herein by reference.

ITEM 29. PRINCIPAL UNDERWRITERS

(a) John Hancock Funds acts as principal underwriter for the Registrant and
also serves as principal underwriter or distributor of shares for John Hancock
Cash Reserve, Inc., John Hancock Bond Fund, John Hancock Current Interest, John
Hancock Series, Inc., John Hancock Tax-Free Bond Fund, John Hancock California
Tax-Free Income Fund, John Hancock Capital Series, John Hancock Limited-Term
Government Fund, John Hancock Tax-Exempt Income Fund, John Hancock Sovereign
Investors Fund, Inc.

C-3
<PAGE> 420

John Hancock Special Equities Fund, John Hancock Sovereign Bond Fund, John
Hancock Tax-Exempt Series, John Hancock Strategic Series, John Hancock
Technology Series, Inc., John Hancock World Fund, John Hancock Investment
Trust, John Hancock Institutional Series Trust, Freedom Investment Trust,
Freedom Investment Trust II and Freedom Investment Trust III.

<TABLE>
(b) The following table lists, for each director and officer of John Hancock
Funds, the information indicated.

<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
------------------ --------------------- ---------------------
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT
---------------- ---------------- ---------------
<S> <C> <C>
Edward J. Boudreau, Jr. President, Chief Chairman
101 Huntington Avenue Executive Officer and
Boston, Massachusetts Director

Robert H. Watts Director, Executive None
John Hancock Place Vice President, and
P.O. Box 111 Compliance Officer
Boston, Massachusetts

Robert G. Freedman Director Vice President, Chief
101 Huntington Avenue Investment Officer
Boston, Massachusetts

Stephen M. Blair Executive Vice None
101 Huntington Avenue President
Boston, Massachusetts

Thomas H. Drohan Senior Vice President Senior Vice President
101 Huntington Avenue and Secretary
Boston, Massachusetts

James W. McLaughlin Senior Vice President None
101 Huntington Avenue and
Boston, Massachusetts Chief Financial Officer

David A. King Senior Vice President None
101 Huntington Avenue and Director
Boston, Massachusetts

James B. Little Senior Vice President Senior Vice President
101 Huntington Avenue and Chief Financial
Boston, Massachusetts Officer

William S. Nichols Senior Vice President None
101 Huntington Avenue
Boston, Massachusetts

</TABLE>

C-4
<PAGE> 421

<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
------------------ --------------------- ---------------------
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT
---------------- ---------------- ---------------
<S> <C> <C>
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

Christopher M. Meyer Treasurer None
101 Huntington Avenue
Boston, Massachusetts

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 Director
John Hancock Place
P.O. Box 111
Boston, Massachusetts

John Goldsmith Director None
One Beacon St.
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

</TABLE>

C-5
<PAGE> 422
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
------------------ --------------------- ---------------------
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT
---------------- ---------------- ---------------
<S> <C> <C>
Foster Aborn Director None
John Hancock Place
P.O. Box 111
Boston, Massachusetts

David F. D'Alessandro Director None
John Hancock Place
P.O. Box 111
Boston, Massachusetts

William C. Fletcher Director None
53 State Street
Boston, Massachusetts

James V. Bowhers Executive Vice President None
101 Huntington avenue
Boston, Massachusetts

Michael T. Carpenter Senior Vice President None
1000 Louisiana Street
Houston, Texas
</TABLE>

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
--------------------------------

The Registrant maintains the records required to be maintained by it under
Rules 31a-1(a), 31a-1(b), and 31a-2(a) under the Investment Company
Act of 1940 at 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 offices
of Registrant's Transfer Agent and Custodian.

ITEM 31. MANAGEMENT SERVICES
-------------------

Not applicable.

ITEM 32. UNDERTAKINGS
------------

(a) Not applicable.

(b) Not applicable.

(c) Registrant hereby undertakes to furnish each person to whom a
prospectus with respect to a series of the Registrant is delivered with a
copy of the latest annual report to shareholders with respect to that
series upon request and without charge.

C-6
<PAGE> 423

(d) Registrant undertakes to comply with Section 16(c) of the Investment
Company Act of 1940, as amended, which relates to the assistance to be
rendered to shareholders by the Trustees of the Registrant in calling a
meeting of shareholders for the purpose of voting upon the question of the
removal of a trustee.

C-7
<PAGE> 424

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 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
28th day of February, 1996.

JOHN HANCOCK SERIES, INC.

By: *
--------------------------------
Edward J. Boudreau, Jr.
Chairman and Chief
Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Chairman and Chief
- ------------------------- Executive Officer
Edward J. Boudreau, Jr. (Principal Executive
Officer)

/s/James B. Little Senior Vice President February 28, 1996
- ------------------------- and Chief Financial
James B. Little Officer (Principal
Financial and
Accounting Officer)

* Director
- -------------------------
James F. Carlin

* Director
- -------------------------
William H. Cunningham

* Director
- -------------------------
Charles L. Ladner

</TABLE>

C-8
<PAGE> 425

<TABLE>
EXHIBIT INDEX
-------------

<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE NUMBER
- ---------- ----------- -----------
<S> <C>
99.B1 Articles of Amendment and Restatement dated June 29, 1987;
Articles of Amendment dated July 23, 1987; Articles Supplementary
dated August 5, 1987; Articles of Amendment dated October 5,
1987; Articles of Amendment dated June 14, 1989; Articles
Supplementary dated June 5, 1991; Articles Supplementary dated
October 22, 1993; Articles Supplementary dated May 17, 1994;
Articles of Amendment dated May 20, 1994; Articles of Amendment
dated December 16, 1994; Articles Supplementary dated September
11, 1995.+

99.B2 Amended and Restated By-Laws dated December 22, 1994.*

99.B3 Not Applicable.

99.B4 Specimen share certificate for Emerging Growth Fund, High Yield
Tax-Free Fund, High Yield Bond Fund, Global Resources Fund and
Government Income Fund (Classes A and B).+

99.B5 Investment Management Contract between John Hancock Advisers,
Inc. and the Registrant on behalf of Global Resources Fund dated
December 22, 1994.*

99.B5.1 Investment Management Contract between John Hancock Advisers,
Inc. and the Registrant on behalf of Emerging Growth Fund dated
December 22, 1994.*

99.B5.2 Investment Management Contract between John Hancock Advisers,
Inc. and the Registrant on behalf of High Yield Bond Fund dated
December 22, 1994.*

99.B5.3 Investment Management Contract between John Hancock Advisers,
Inc. and the Registrant on behalf of High Yield Tax-Free Fund dated
December 22, 1994.*

99.B5.4 Investment Management Contract between John Hancock Advisers,
Inc. and the Registrant on behalf of Government Income Fund dated
December 22, 1994.*

99.B5.5 Investment Management Contract between John Hancock Advisers,
Inc. and the Registrant on behalf of Money Market Fund Fund.*
</TABLE>

<PAGE> 426

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE NUMBER
- ---------- ----------- -----------
<S> <C>
99.B6 Distribution Agreement between Registrant and John Hancock
Broker Distribution Services, Inc.*

99.B6.1 Form of Soliciting Dealer Agreement between John Hancock Funds,
Inc. and the John Hancock funds.*

99.B6.2 Form of Financial Institution Sales and Service Agreement between
John Hancock Fund's, Inc. and the John Hancock funds.*

99.B7 Not Applicable

99.B8 Master Custodian agreement between the John Hancock funds and
Investor Bank & Trust Company.*

99.B9 Transfer Agency and Service Agreement with John Hancock Fund
Services, Inc.*

99.B10 None

99.B11 Consent of Independent Auditors.+

99.B12 Financial Statement of the Global Resources Fund for the year ended
October 31, 1995 filed herewith in Part A and Part B.+

99.B12.1 Financial Statement of the Emerging Growth Fund for the year
ended October 31, 1995 filed herewith in Part A and Part B.+

99.B12.2 Financial Statement of the Government Income Fund for the year
ended October 31, 1995 filed herewith in Part A and Part B.+

99.B12.3 Financial Statement of the High Yield Bond Fund for the year ended
October 31, 1995 filed herewith in Part A and Part B.+

99.B12.4 Financial Statement of the High Yield Tax-Free Fund for the year
ended October 31, 1995 filed herewith in Part A and Part B.+

99.B12.5 Financial Statement of the Money Market Fund for the year ended
October 31, 1995 filed herewith in Part A and Part B.+

99.B13 None

99.B15 Plan of Distribution pursuant to Rule 12b-1 as amended and restated
January 1, 1994.*

99.B15.1 Class A and Class B Distribution Plan between Global Resources
Fund and John Hancock Funds, Inc.*
</TABLE>

<PAGE> 427
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE NUMBER
- ---------- ----------- -----------
<S> <C>
99.B15.2 Class A and Class B Distribution Plan between Emerging Growth
Fund and John Hancock Funds, Inc.*

99.B15.3 Class A and Class B Distribution Plan between Government Income
Fund and John Hancock Funds, Inc.*

99.B15.4 Class A and Class B Distribution Plan between High Yield Bond
Fund and John Hancock Funds, Inc.*

99.B15.5 Class A and Class B Distribution Plan between High Yield Tax Free
Fund and John Hancock Funds, Inc.*

99.B15.6 Class B Distribution Plan between Money Market Fund and John
Hancock Funds, Inc.*

99.B15.7 Class A and Class S Distribution Plan between Money Market Fund
and John Hancock Funds, Inc.+

99.B16 Schedule for computation of each performance quotation provided
in the Registration Statement in response to Item 22 for each series
of the Registrant.+

27.1A John Hancock Global Resources Fund
27.1B John Hancock Global Resources Fund
27.2A John Hancock Emerging Growth Fund
27.2B John Hancock Emerging Growth Fund
27.3A John Hancock Government Income Fund
27.3B John Hancock Government Income Fund
27.4A John Hancock High Yield Bond Fund
27.4B John Hancock High Yield Bond Fund
27.5A John Hancock High Yield Tax-Free Fund
27.5B John Hancock High Yield Tax-Free Fund
27.6A John Hancock Money Market Fund
27.6B John Hancock Money Market Fund

<FN>
*Previously filed with Registration Statement and/or post-effective amendment and incorporated
by reference herein.

+Filed herewith.
</TABLE>

<PAGE> 1
EXHIBIT 99.B1

CRITERION SPECIAL SERIES INC.

ARTICLES OF AMENDMENT AND RESTATEMENT

Criterion Special Series, Inc., a Maryland corporation,
having its principal office in Baltimore City, Maryland
(which is hereinafter called the "Corporation"), hereby
certifies to the State Department of Assessments and
Taxation of Maryland that:

FIRST: The Charter of the Corporation is hereby
amended and restated to read in its entirety as follows:

ARTICLES OF INCORPORATION

CRITERION SPECIAL SERIES, INC.

ARTICLE I
---------

The undersigned, Bonnie D. Podolsky, whose post office
address is 101 Park Avenue, New York, New York 10178, and
who is of full legal age does hereby declare that (s)he is
an incorporator intending to form a corporation under and by
virtue of the Maryland General Corporation Law authorizing
the formation of corporations.

ARTICLE II
----------

The name of the Corporation is Criterion Special
Series, Inc.

ARTICLE III
-----------

Purposes and Powers
-------------------

The purposes for which the Corporation is formed, and
its objects, rights, powers and privileges are:

(1) To conduct and carry on the business of an
investment company of the open-end management type;

<PAGE> 2

(2) To subscribe for, or otherwise acquire, purchase,
pledge, sell, assign, transfer, exchange, distribute or
otherwise dispose of, and generally deal in and hold all
forms of securities and other investments, including, but
not by way of limitation, stocks (preferred and common),
notes, bonds, debentures, scrip, warrants, participation
certificates, futures, options of all types on securities
and futures, mortgages, commercial paper, choses in action,
evidences of indebtedness and other obligations of every
kind and description, precious metals and contracts and
rights to acquire or dispose of precious metals, and in
connection therewith to hold part or all of its assets in
cash or cash equivalents or money market instruments;

(3) To issue and sell shares of its own capital stock
in such amount and on such terms and conditions, for such
purposes and for such amount or kind of consideration now or
hereafter permitted by the Maryland General Corporation Law
and by the Charter of the Corporation, as its Board of
Directors may determine;

<PAGE> 3

(4) To redeem, purchase or otherwise acquire, hold,
dispose of, resell, transfer, reissue, retire or cancel (all
without the vote or consent of the stockholders of the
Corporation) shares of its capital stock, in any manner and
to the extent now or hereafter permitted by the laws of
Maryland and the Charter of the Corporation;

(5) To borrow or raise money for any purpose of the
Corporation and from time to time draw, make, accept,
endorse, execute and issue promissory notes, drafts, bills
of exchange, warrants, bonds, debentures and other
negotiable and nonnegotiable instruments and evidences of
indebtedness, and to pledge, hypothecate and borrow upon the
credit of the assets of the Corporation;

(6) To take such action as shall be desirable and
necessary to cause its shares to be licensed or registered
for sale under the laws of the United States and in any
state, county, city or other municipality of the United
States, the territories thereof, the District of Columbia or
in any foreign country and in any town, city or subdivision
thereof;

(7) To make contracts and generally to do any and all
acts and things necessary or desirable in furtherance of any
of the corporate purposes or designed to protect, preserve
and/or enhance the value of the corporate assets, all to the
extent permitted to business corporations authorized under
the laws of the State of Maryland as now or may in the
future be authorized by said laws;

(8) To do all and everything necessary, suitable and
proper for the accomplishment of any of the purposes,
objects or powers hereinbefore set forth to the same extent
and as fully as a natural person might or could do, in any
part of the world and either alone or in association or
partnership with other corporations, firms or individuals;

(9) To have all the rights, powers and privileges now
or hereafter conferred by the laws of the State of Maryland
upon a corporation organized under the Maryland General
Corporation Law, or under any act amendatory thereof,
supplemental thereto or in substitution therefor;

(10) To do any and all such further acts or things and
to exercise any and all such further powers or rights as may
be necessary, incidental, relative, conducive, appropriate
or desirable for the accomplishment, carrying out or
attainment of all or any of the foregoing purposes, objects
or powers.

<PAGE> 4

The foregoing clauses shall be construed both as
objects and powers, and it is hereby expressly provided that
the enumeration herein of any specific objects and powers
shall not be held to limit or restrict in any way the
general powers of the Corporation, nor shall such objects
and powers, except when otherwise expressly provided, be in
any way limited or restricted by reference to, or inference
from, the terms of any other clause of the Charter of the
Corporation but the objects and powers specified in each of
the foregoing clauses of this Article shall be regarded as
independent objects and powers.

ARTICLE IV
----------

Principal Office and Resident Agent
-----------------------------------

The post-office address of the principal office of the
Corporation in the State of Maryland is c/o The Prentice-
Hall Corporation System, Maryland, 929 North Howard Street,
Baltimore, Maryland 21201. The resident agent of the
Corporation in the State of Maryland is The Prentice-Hall
Corporation System, Maryland, a corporation of the State of
Maryland, whose post-office address is 929 North Howard
Street, Baltimore, Maryland 21201.

ARTICLE V
---------

Capital Stock
-------------

(1) The total number of shares of stock which the
Corporation initially shall have authority to issue is Five
Hundred Million (500,000,000) shares of common stock of the
par value of one cent ($.01) each, to be classified as
"Common Shares", and of the aggregate par value of Five
Million dollars ($5,000,000). Unless otherwise prohibited
by law, so long as the Corporation is registered as an open-
end investment company under the Investment Company Act of
1940, as amended, the total number of shares which the
Corporation is authorized to issue may be increased or
decreased by the Board of Directors in accordance with the
applicable provisions of the Maryland General Corporation
Law.

(2) The Corporation is authorized to issue its shares
in two or more series or two or more classes, and, subject
to the requirements of the Investment Company Act of 1940,
as amended, particularly Section 18(f) thereof and Rule 18f-
2 thereunder, the different series or classes shall be
established and designated, and the variations in the
relative preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends,
qualifications and terms and conditions of redemption as
between the different series or classes shall be fixed and
determined by the Board of Directors; provided that the
Board of Directors shall not classify or reclassify any of
such shares into any class or series of stock which is prior
to any class or series of stock then outstanding

<PAGE> 5

with respect to rights upon the liquidation, dissolution or
winding up of the affairs of, or upon any distribution of
the general assets of, the Corporation, except that there
may be variations so fixed and determined between different
series or classes as to investment objective, purchase
price, right of redemption, special rights as to dividends
and on liquidation with respect to assets belonging to a
particular series or class, voting powers and conversion
rights. All references to Common Shares in these Articles
shall be deemed to be shares of any or all series and
classes as the context may require.

The following is a description of the preferences,
conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms and
conditions of redemption of the series designated as the
Criterion Blue Chip Fund (of which there are initially
authorized 50,000,000 shares) and the Criterion Resources
Fund (of which there are initially authorized 50,000,000
shares) and any additional class or series of Common Stock
of the Corporation (unless provided otherwise by the Board
of Directors with respect to any such additional class or
series at the time of establishing and designating such
additional class or series).

(a) The number of authorized Common Shares and the
number of Common Shares of each series or of each class that
may be issued shall be in such number as may be determined
by the Board of Directors. The Directors may classify or
reclassify any unissued Common Shares or any Common 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 Directors
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 Common Shares of
any series or any class reacquired by the Corporation at
their discretion from time to time.

(b) All consideration received by the Corporation for
the issue or sale of Common Shares of a particular series or
class, 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 or class for all purposes, subject only to
the rights of creditors, and shall be so recorded upon the
books of account of the Corporation. 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 or class,
the Directors shall allocate them among any one or more of
the series or classes 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 Corporation shall be conclusive and
binding upon the stockholders of all series or classes for
all purposes. The Directors shall have full discretion, to
the extent not inconsistent with the Investment Company Act
of 1940, as amended, and the Maryland General Corporation
Law to determine which items shall be treated as income and
which items shall be treated as capital; and each such
determination and allocation shall be conclusive and binding
upon the stockholders.

<PAGE> 6

(c) The assets belonging to each particular series
shall be charged with the liabilities of the Corporation in
respect of that series and all expenses, costs, charges and
reserves attributable to that series, and any general
liabilities, expenses, costs, charges or reserves of the
Corporation which are not readily identifiable as belonging
to any particular series shall be allocated and charged by
the Directors 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 Directors in their sole discretion
deem fair and equitable. Each allocation of liabilities,
expenses, costs, charges and reserves by the Directors shall
be conclusive and binding upon the stockholders of all
series or classes for all purposes.

(d) Dividends and distributions on Common Shares of a
particular series or class may be paid with such frequency
as the Directors may determine, which may be daily or
otherwise, pursuant to a standing resolution or resolutions
adopted only once or with such frequency as the Board of
Directors may determine, to the holders of Common shares of
that series or class, from such of the income and capital
gains, accrued or realized, from the assets belonging to
that series or class, as the Directors may determine, after
providing for actual and accrued liabilities belonging to
that series or class. All dividends and distributions on
Common Shares of a particular series or class shall be
distributed pro rata to the holders of that series or class
in proportion to the number of Common Shares of that series
or class held by such holders at the date and time of record
established for the payment of such dividends or
distributions except that in connection with any dividend or
distribution program or procedure, the Board of Directors
may determine that no dividend or distribution shall be
payable on shares as to which the stockholder's purchase
order and/or payment have not been received by the time or
times established by the Board of Directors under such
program or procedure.

The Corporation intends to have each separate series
qualify as a "regulated investment company" under the
Internal Revenue Code of 1986, or any successor comparable
statute thereto, and regulations promulgated thereunder.
Inasmuch as the computation of net income and gains for
Federal income tax purposes may vary from the computation
thereof on the books of the Corporation, the Board of
Directors shall have the power, in its sole discretion, to
distribute in any fiscal year as dividends, including
dividends designated in whole or in part as capital gains
distributions, amounts sufficient, in the opinion of the
Board of Directors, to enable each respective series to
qualify as regulated investment company and to avoid
liability of such series for Federal income tax in respect
of that year. However, nothing in the foregoing shall limit
the authority of the Board of Directors to make
distributions greater than or less than the amount necessary
to qualify the series as regulated investment companies and
to avoid liability of such series for such tax.

<PAGE> 7

Dividends and distributions may be made in cash,
property or additional shares of the same or another class
or series, or a combination thereof, as determined by the
Board of Directors or pursuant to any program that the Board
of Directors may have in effect at the time for the election
by each stockholder of the mode of the making of such
dividend or distribution to that stockholder. Any such
dividend or distribution paid in shares will be paid at the
net asset value thereof as defined in section (3) below.

(f) In the event of the liquidation or dissolution of
the Corporation or of a particular class or series, the
stockholders of each class or series that has been
established and designated and is being liquidated shall be
entitled to receive, as a class or series, when and as
declared by the Board of Directors, the excess of the assets
belonging to that class or series over the liabilities
belonging to that class or series. The holders of shares of
any particular class or series shall not be entitled thereby
to any distribution upon liquidation of any other class or
series. The assets so distributable to the stockholders of
any particular class or series shall be distributed among
such stockholders in proportion to the number of shares of
that class or series held by them and recorded on the books
of the Corporation. The liquidation of any particular class
or series in which there are shares then outstanding may be
authorized by vote of a majority of the Board of Directors
then in office, subject to the approval of a majority of the
outstanding securities of that class or series, as defined
in the Investment Company Act of 1940, as amended, and
without the vote of the holders of any other class or
series. The liquidation or dissolution of a particular
class or series may be accomplished, in whole or in part, by
the transfer of assets of such class or series to another
class or series or by the exchange of shares of such class
or series for the shares of another class or series.

(g) On each matter submitted to a vote of the
stockholders, each holder of a share shall be entitled to
one vote for each share standing in his name on the books of
the Corporation, irrespective of the class or series
thereof, and all shares of all classes or series shall vote
as a single class or series ("Single Class Voting");
provided, however, that (i) as to any matter with respect to
which a separate vote of any class or series is required by
the Investment Company Act of 1940, as amended, or by the
Maryland General Corporation Law, such requirement as to a
separate vote by that class or series shall apply in lieu of
Single Class Voting as described above; (ii) in the event
that the separate vote requirements referred to in (i) above
apply with respect to one or more classes or series, then,
subject to (iii) below, the shares of all other classes or
series shall vote as a single class or series; and (iii) as
to any matter which does not affect the interest of a
particular class or series, only the holders of shares of
the one or more affected classes shall be entitled to vote.

<PAGE> 8

(h) The establishment and designation of any series or
class of Common Shares shall be effective upon the adoption
by a majority of the then Directors of a resolution setting
forth such establishment and designation and the relative
rights and preferences of such series or class, or as
otherwise provided in such instrument and the filing with
the proper authority of the State of Maryland of Articles
Supplementary setting forth such establishment and
designation and relative rights and preferences.

(3) The Corporation shall, upon due presentation of a
share or shares of stock for redemption, redeem such share
or shares of stock at a redemption price prescribed by the
Board of Directors in accordance with applicable laws and
regulations; provided that in no event shall such price be
less than the applicable net asset value per share of such
class or series as determined in accordance with the
provisions of this section (3), less such redemption charge
as is determined by the Board of Directors, which redemption
charge shall not exceed eight percent (8.00%) of such net
asset value per share. The Corporation may redeem, at
current net asset value, shares of any series not offered
for redemption held by any shareholder whose shares have a
value of less than $1,000, or such lesser amount as may be
fixed by the Board of Directors; provided that before the
Corporation redeems such shares it must notify the
shareholder that the value of his shares is less than $1,000
(or such lesser amount, if applicable) and allow him 60 days
to make an additional investment in an amount which will
increase the value of his account to $1,000 (or such lesser
amount, if applicable) or more. The Corporation shall pay
redemption prices in cash, except that the Corporation may
pay redemption prices in kind in such manner as is
consistent with and not in contravention of Section 18(f) of
the Investment Company Act of 1940, as amended, and any
Rules or Regulations thereunder. Redemption prices shall be
paid exclusively out of the assets of the series whose
shares are being redeemed.

Notwithstanding the foregoing, the Corporation may
postpone payment of the redemption price and may suspend the
right of the holders of shares of any class or series to
require the Corporation to redeem shares of that class or
series during any period or at any time when and to the
extent permissible under the Investment Act of 1940, as
amended, or any rule or order thereunder.

The net asset value of a share of any class or series
of Common Stock of the Corporation shall be determined in
accordance with applicable laws and regulations under the
supervision of such persons and at such time or times as
shall from time to time be prescribed by the Board of
Directors.

<PAGE> 9

(4) The Corporation may issue, sell, redeem,
repurchase and otherwise deal in and with shares of its
stock in fractional denominations and such fractional
denominations shall, for all purposes, be shares of common
stock having proportionately to the respective fractions
represented thereby all the rights of whole shares,
including without limitation, the right to vote, the right
to receive dividends and distributions, and the right to
participate upon liquidation of the Corporation; provided
that the issue of shares in fractional denominations shall
be limited to such transactions and be made upon such terms
as may be fixed by or under authority of the by-laws.

(5) The Corporation shall not be obligated to issue
certificates representing shares of any class or series
unless it shall receive a written request therefor from the
record holder thereof in accordance with procedures
established in the By-Laws or by the Board of Directors.

ARTICLE VI
----------

Preemptive Rights
-----------------

No stockholder of the Corporation of any class, whether
now or hereafter authorized, shall have any preemptive or
preferential or other right of purchase of or subscription
to any shares of any class of stock, or securities
convertible into, exchangeable for or evidencing the right
to purchase stock of any class whatsoever, whether or not
the stock in question be of the same class as may be held by
such stockholders, and whether now or hereafter authorized
and whether issued for cash, property, services or
otherwise, other than such, if any, as the Board of
Directors in its discretion may from time to time fix.

ARTICLE VII
-----------

Number and Powers of Directors
------------------------------

(1) The number of directors of the Corporation shall
be three (3) or such other number not less than three (3) as
may from time to time be specified in or fixed in the manner
prescribed by the by-laws of the Corporation. The by-laws
of the Corporation shall also specify the number of
directors which shall be necessary to and shall constitute a
quorum; provided, however that in no case shall a quorum be
less than one-third (1/3) of the total number of directors
or less than two (2) directors. Unless otherwise provided
by the by-laws of the corporation, directors need not be
stockholder thereof.

<PAGE> 10

(2) The names of the directors who shall act until the
first annual meeting or until their successors are duly
chosen and qualify are:

Clive Runnells
Mrs. Lloyd Bentsen, Jr.
R. Trent Campbell
Leo E. Linbeck, Jr.
Thomas B. McDade
Robert C. Thompson
William H. Cunningham

(3) The Board of Directors of the Corporation is
hereby empowered to authorize the issuance from time to time
of shares of capital stock whether now or hereafter
authorized, for such consideration as the Board of Directors
may deem advisable, subject to such limitations as may be
set forth in the Charter or the by-laws of the Corporation
or in the Maryland General Corporation Law.

(4) Each Director and each officer of the Corporation
shall be indemnified by the Corporation to the full extent
permitted by the Maryland General Corporation Law and the by-
laws of the Corporation, as such Law and by-laws may now or
in the future may be in effect, subject only to such
limitations as may be required by the Investment Company Act
of 1940, as amended.

(5) The Board of Directors of the Corporation may
make, alter or repeal from time to time any of the by-laws
of the Corporation except any particular by-law which is
specified as not subject to alteration or repeal by the
Board of Directors.

ARTICLE VIII
------------

Stockholder Vote
----------------

Notwithstanding any provisions of Maryland law
requiring a greater proportion than a majority of the votes
of all classes or of any class of stock entitled to be cast,
to take or authorize any action, the Corporation may take or
authorize any such action upon the concurrence of a majority
of the aggregate number of the votes entitled to be cast
thereon.

<PAGE> 11

ARTICLE IX
----------

Perpetual Existence
-------------------

The duration of the Corporation shall be perpetual.

ARTICLE X
---------

Amendment
---------

The Corporation reserves the right from time to time to
make any amendment of its Charter now or hereafter
authorized by law, including any amendment which alters the
contract rights, as expressly set forth in its Charter, of
any outstanding stock by classification, reclassification or
otherwise, but no such amendment which changes such terms or
contract rights of any of its outstanding stock shall be
valid unless such amendment shall have been authorized by
not less than a majority of the aggregate number of the
votes entitled to be cast thereon, by a vote at a meeting or
in writing with or without a meeting.

IN WITNESS WHEREOF, I have signed these Articles of
Incorporation this 20th day of June, 1987.

/s/: Bonnie D. Podolsky
----------------------------------
Bonnie D. Podolsky
Incorporator

WITNESS:

/s/: George Sutton
- --------------------------

<PAGE> 12

SECOND: The amendment does not increase the
authorized stock of the Corporation.

THIRD: The foregoing amendment and restatement of
the Charter of the Corporation has been approved by a
majority of the entire Board of Directors and no stock
entitled to be voted on the matter was outstanding at the
time of approval.

IN WITNESS WHEREOF, Criterion Special Series, Inc. has
caused these presents to be signed in its name and on its
behalf by its President and witnessed by its Secretary on
June 29, 1987.

WITNESS: CRITERION SPECIAL SERIES, INC.

/s/ Robert L. Stillwell By: /s/ Clive Runnells
- ----------------------- ------------------
Secretary President

THE UNDERSIGNED, President of Criterion Special Series,
Inc., who executed on behalf of the Corporation the
foregoing Articles of Amendment and Restatement of which
this Certificate is made a part, hereby acknowledges in the
name and on behalf of said Corporation the foregoing
Articles of Amendment and Restatement to be the corporate
act of said Corporation and hereby certifies that to the
best of his knowledge, information, and belief the matters
and facts set forth therein with respect to the
authorization and approval thereof are true in all material
respects under the penalties of perjury.

/s/ Clive Runnells
------------------
President

<PAGE> 13
CRITERION SPECIAL SERIES, INC.

ARTICLES OF AMENDMENT

Criterion Special Series, Inc., a Maryland Corporation
having its principal office in Baltimore City, Maryland
(which is hereinafter called the "Corporation"), hereby
certifies to the State Department of Assessments and
Taxation of Maryland that:

FIRST: the CHARTER of the Corporation is hereby
amended by deleting the second paragraph of Article V,
Section 2 and inserting in lieu thereof the following:

"The following is a description of the
preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends,
qualifications and terms and conditions of
redemption of the series designated as Criterion
Special Money Market Fund, Criterion Special
Government Income Fund, Criterion Special High
Yield Tax Free Fund, Criterion Special Convertible
Securities Fund, Criterion Special Blue Chip Fund,
Criterion Special Emerging Growth Fund, Criterion
Special Global Growth Fund, Criterion Special
Resources Fund (for each of which there are
initially authorized 50,000,000 shares) and any
additional class or series of Common Stock of the
Corporation (unless provided otherwise by the
Board of Directors with respect to any such
additional class or series at the time of
establishing and designating such additional class
or series)."

SECOND: These ARTICLES OF AMENDMENT to not increase
the authorized stock of the Corporation.

THIRD: The foregoing amendment to the Charter has been
declared advisable by a majority of the entire Board of
Directors and approved by the sole stockholder.

IN WITNESS WHEREOF, Criterion Special Series, Inc. has
caused these presents to be signed in its name and on its
behalf of its Vice President and witnessed by its Assistant
Secretary on July 23, 1987.

WITNESS: CRITERION SPECIAL SERIES, INC.

/s/ Curtis W. Barnes By: /s/ Thomas J. Press
- -------------------- -------------------
Assistant Secretary Vice President

<PAGE> 14

THE UNDERSIGNED, Vice President of Criterion Special
Series, Inc., who executed on behalf of the Corporation the
foregoing ARTICLES OF AMENDMENT of which this certificate is
made a part, hereby acknowledges in the name and on behalf
of said Corporation the foregoing ARTICLES OF AMENDMENT to
be the corporate act of the said Corporation and hereby
certifies that to the best of his knowledge, information,
and belief the matters and facts set forth therein with
respect to the authorization and approval thereof are true
in all material respects under the penalties of perjury.

/s/Thomas J. Press
------------------
Vice President

<PAGE> 15
CRITERION SPECIAL SERIES, INC.

ARTICLES SUPPLEMENTARY

Criterion Special Series, Inc., a Maryland corporation,
having its principal office in Baltimore City, Maryland
(hereinafter called the "Corporation"), hereby certifies to
the State Department of Assessments and Taxation of Maryland
that:

Pursuant to authority expressly vested in the Board of
Directors of the Corporation by Article V of the Charter of
the Corporation, the Board of Directors has duly dividend
and classified 50,000,000 shares of the common stock of the
Corporation into a series designated the "Criterion Special
High Yield Bond Fund" and has provided for the issuance of
such series. The terms of this series is as provided in the
Articles of Amendment and Restatement of the Corporation
filed on July 1, 1987.

IN WITNESS WHEREOF, Criterion Special Series, Inc. has
caused these presents to be signed in its name and on its
behalf by its Vice President and witnessed by its Assistant
Secretary on August 5, 1987.

WITNESS: CRITERION SPECIAL SERIES, INC.

/s/ Pamela A. Vlates /s/ Thomas R. Powers
- ------------------------------------- --------------------------------
Pamela A. Vlates, Assistant Secretary Thomas R. Powers, Vice President

THE UNDERSIGNED, Vice President of Criterion Special
Series, Inc., who executed on behalf of the Corporation
Articles Supplementary of which this Certificate is made a
part, hereby acknowledges in the name and on behalf of said
Corporation the foregoing Articles Supplementary to be the
corporate act of said Corporation and hereby certifies that
the matters and facts set for herein with respect to the
authorization and approval thereof are true in all material
respects under the penalties of perjury.

/s/ Thomas R. Powers
--------------------------------
Thomas R. Powers, Vice President

<PAGE> 16
CRITERION SPECIAL SERIES, INC.

ARTICLES OF AMENDMENT

FIRST: The charter of the Corporation is hereby
amended as follows:

Article V, Section 2 of the Charter is amended to
provide that the series of the Corporation's Common Stock
designated as the "Criterion Special Resources Fund" shall
be redesignated as the "Criterion Special Natural Resources
Fund."

SECOND: The amendment does not increase the
authorized stock of the Corporation.

THIRD: The foregoing amendment to the Charter of the
Corporation has been approved by a majority of the entire
Board of Directors and has been approved by the sole
stockholder of the Corporation.

WITNESS: CRITERION SPECIAL SERIES, INC.

/s/ Pamela A. Vlates By: /s/ Thomas R. Powers
- ---------------------------- ----------------------
Pamela A. Vlates Thomas R. Powers
Assistant Secretary Vice President

THE UNDERSIGNED, Vice President of Criterion Special
Series, Inc., who executed on behalf of the Corporation the
foregoing Articles of Amendment of which this certificate is
made a part, hereby acknowledges in the name and on behalf
of said Corporation the foregoing Articles of Amendment to
be the corporate act of said Corporation and hereby
certifies that to the best of his knowledge, information,
and belief the matters and facts set forth therein with
respect to the authorization and approval thereof are true
in all matters respect under the penalties of perjury.

/s/ Thomas R. Powers
------------------------
Thomas R. Powers
Vice President

<PAGE> 17
CRITERION SPECIAL SERIES, INC.

ARTICLES OF AMENDMENT

Criterion Special Series, Inc. a Maryland corporation,
having its principal office in Baltimore City, Maryland
(which is hereinafter called the "Corporation") hereby
certifies to the State Department of Assessment and Taxation
of Maryland that:

FIRST: The CHARTER OF THE CORPORATION is hereby
amended by deleting Article II in its entirety and inserting
in lieu there of the following:

ARTICLE II
----------

The name of the Corporation is Transamerica Special
Series, Inc.

SECOND: The second paragraph of Article V, Section 2
of the CHARTER OF THE CORPORATION is hereby amended to
change the name of the presently designated series of shares
of the Corporation as follows:

<TABLE>
<CAPTION>
Present Name New Name
------------ --------

<S> <C>
Criterion Special Money Market Fund Transamerica Special Money Market Fund

Criterion Special Government Transamerica Special Government
Income Fund Income Fund

Criterion Special High Yield Transamerica Special High Yield
Bond Fund Bond Fund

Criterion Special High Yield Transamerica Special High Yield
Tax Free Fund Tax Free Fund

Criterion Special Convertible Transamerica Special Convertible
Securities Fund Securities Fund

Criterion Special Blue Chip Fund Transamerica Special Blue Chip Fund
</TABLE>

<PAGE> 18

<TABLE>
<S> <C>
Criterion Special Emerging Transamerica Special Emerging
Growth Fund Growth Fund

Criterion Special Global Growth Fund Transamerica Special Global Growth Fund

Criterion Special Natural Transamerica Special Natural
Resources Fund Resources Fund
</TABLE>

THIRD: These ARTICLES OF AMENDMENT do not increase
the authorized stock of the Corporation.

FOURTH: The foregoing amendments to the Charter has
been declared advisable by a majority of the entire Board of
Directors and approved by the affirmative vote of the
holders of a majority of the outstanding Shares of each
Series of Shares of the Corporation.

WITNESS: CRITERION SPECIAL SERIES, INC.

/s/ Pamela A. Vlates By: /s/ Carrol R. McGinnis
- ---------------------------- ----------------------------
Assistant Secretary Carrol R. McGinnis
Vice President

THE UNDERSIGNED, Vice President of Criterion Special
Series, Inc., who executed on behalf of the Corporation the
foregoing ARTICLES OF AMENDMENT of which this Certificate is
made a part, hereby acknowledges in the name and on behalf
of said Corporation and hereby certifies that to the best of
his knowledge, information, and belief the matters and facts
set forth therein with respect to the authorization and
approval thereof are true in all material respects under the
penalty of perjury.

/s/ Carrol R. McGinnis
---------------------------

<PAGE> 19
TRANSAMERICA SPECIAL SERIES, INC.

ARTICLES SUPPLEMENTARY

Transamerica Special Series, Inc., a Maryland
corporation, having its principal office in Baltimore City,
Maryland (hereinafter called the "Corporation"), hereby
certifies to the State Department of Assessments and
Taxation of Maryland that:

Pursuant to authority expressly vested in the Board of
Directors of the Corporation by Article V of the articles of
Incorporation (as amended and restated), the Board of
Directors of this Corporation has duly:

1. Authorized reclassification of the Common Stock of
the Corporation into 250,000,000 shares of Class A Common
Stock and 250,000,000 shares of Class B Common Stock, all of
the par value of one cent ($0.01) each, and the
reclassification of all shares issued and outstanding on or
before the effective date of Articles Supplementary filed
with the State of Maryland as Class B Common Stock of each
respective Series.

2. Authorized each of the Series of shares of the
Corporation to be represented by shares of Class A Common
Stock and shares of Class B Common Stock of such Series,
with such Class A and Class B shares to be identical in all
substantive respects except that (a) expenses related to the
distribution of shares of each Class may be borne solely by
such Class and each Class may have exclusive voting rights
with respect to matters relating to the expenses being borne
solely by such Class, and (b) the bearing of expense solely
by a Class shall be appropriately reflected (in the manner
and for the duration determined by the Board of Directors,
including, without limitation, automatic conversion of Class
B shares to Class A shares upon satisfaction of contingent
deferred sales charges relating to such Class B shares) in
the net asset value, dividends and liquidation rights of the
shares of such Class.

3. Created, dividend and classified, and provided for
the issuance of, shares of Class A Common Stock and Class B
Common Stock of the Corporation with respect to each Series
of shares of the Corporation, as follows:

<TABLE>
<CAPTION>
Series No. Authorized Shares
------ ---------------------

<S> <C> <C>
Transamerica Special Class A 25 million
Government Income Fund Class B 25 million

Transamerica Special High Class A 25 million
Yield Tax Free Fund Class B 25 million

Transamerica Special High Class A 25 million
Yield Bond Fund Class B 25 million
</TABLE>

<PAGE> 20

<TABLE>
<S> <C> <C>
Transamerica Special Class A 25 million
Convertible Securities Fund Class B 25 million

Transamerica Special Blue Class A 25 million
Chip Fund Class B 25 million

Transamerica Special Class A 25 million
Emerging Growth Fund Class B 25 million

Transamerica Special Class A 25 million
Global Growth Fund Class B 25 million

Transamerica Special Class A 25 million
Natural Resources Fund Class B 25 million

Transamerica Special Class A None
Money Market Fund Class B 50 million
</TABLE>

4. Determined that, except as hereinabove set forth
with respect to the separate bearing of expenses and
appropriate related matters (in the manner and for the
duration determined by the Board of Directors, including,
without limitation, automatic conversion of Class B shares
to Class A shares upon satisfaction of contingent deferred
sales charges relating to such Class B shares), the terms of
all shares of such Class A Common Stock and Class B Common
Stock of each Series shall be as provided in the Articles of
Incorporation (as amended and restated) of the Corporation.

These Articles Supplementary do not increase the
authorized stock of the Corporation.

IN WITNESS WHEREOF, Transamerica Special Series, Inc.
has caused these presents to be signed in its name and on
its behalf by its Vice President and witnessed by its
Assistant Secretary on June 5, 1991.

WITNESS: TRANSAMERICA SPECIAL SERIES, INC.

/s/ Pamela A. Vlatas /s/ Thomas J. Press
- ------------------------ -----------------------------
Pamela A. Vlatas Thomas J. Press
Assistant Secretary Vice President

<PAGE> 21

THE UNDERSIGNED, Vice President of Transamerica Special
Series, Inc., who executed on behalf of the Corporation
Articles Supplementary of which this Certificate is made a
part, hereby acknowledges in the name and on behalf of said
Corporation the foregoing Articles Supplementary to be the
corporate act of said Corporation and hereby certifies that
the matters and facts set forth herein with respect to the
authorization and approval thereof are true in all material
respects under the penalties of perjury.

/s/ Thomas J. Press
-------------------------------
Thomas J. Press
Vice President

<PAGE> 22
TRANSAMERICA SPECIAL SERIES, INC.

ARTICLES SUPPLEMENTARY

Transamerica Special Series, Inc., a Maryland
Corporation having its principal office in Baltimore City,
Maryland (hereinafter called the "Corporation"), hereby
certifies to the State Department of Assessments and
Taxation of Maryland that:

Pursuant to authority expressly vested in the Board of
Directors of the Corporation by Article V of the Articles of
Incorporation (as amended and restated), the Board of
Directors of this Corporation hereby:

1. Confirms its intention and meaning in adopting
Articles Supplementary heretofore duly filed
(containing authorization of the issuance of Class A
and Class B shares of each Series designated therein by
the Board of Directors, with such Class A and Class B
shares to be identical in all substantive respects
except the bearing of certain distribution expenses)
that the number of authorized shares of each such Class
shall be the same as the total number authorized for
such Series, to be divided between the two Classes to
the extent necessary based on the sale of shares of
each Class, provided that (i) the total issued and
outstanding shares of both Classes combined of each
Series shall never exceed the total authorized shares
for such Series; and (ii) the total issued and
outstanding shares of all Classes of all Series shall
never exceed the previously authorized 250,000,000
Class A shares and 250,000,000 Class B shares.

These Articles Supplementary do not increase the
authorized stock of the Corporation.

IN WITNESS WHEREOF, Transamerica Special Series, Inc.
has caused these presents to be signed in its name and on
its behalf its Vice President and witnessed by its Assistant
Secretary on October 22, 1993.

WITNESS: TRANSAMERICA SPECIAL SERIES, INC.

/s/ Pamela A. Vlatas /s/ Thomas J. Press
- -------------------------- ------------------------------
Pamela A. Vlatas Thomas J. Press
Assistant Secretary Vice President

<PAGE> 23

I, Thomas J. Press, Vice President of Transamerica
Special Series, Inc., who executed on behalf of the
Corporation Articles Supplementary of which this Certificate
is made a part, hereby acknowledges in the name and on
behalf of said Corporation the foregoing Articles
Supplementary to be the corporate act of said Corporation
and hereby certifies that the matters and facts set forth
herein with respect to the authorization and approval
thereof are true in all material respects under the
penalties of perjury.

/s/ Thomas J. Press
--------------------------------------
Thomas J. Press, Vice President

<PAGE> 24
TRANSAMERICA SPECIAL SERIES, INC.

ARTICLES SUPPLEMENTARY

Transamerica Special Series, Inc., a Maryland
corporation, having its principal office in Baltimore City,
Maryland (which is hereinafter called the "Corporation"),
hereby certifies to the State Department of Assessments and
Taxation of Maryland that:

A. Pursuant to authority expressly vested in the Board of
Directors of the Corporation by Section 2-105(c) of the
Maryland General Corporation Law and Article V of the
Articles of Incorporations (as amended and restated),
the Board of Directors of the Corporation has duly:

1. Increased the authorized Common Stock of the
Corporation from 250,000,000 to 375,000,000 shares of
Class A Common Stock and from 250,000,000 to
625,000,000 shares of Class B Common Stock, all of the
par value of one cent ($0.01) each both before and
after such increase.

2. Increased the authorized number of shares of
certain Series of Common Stock of the Corporation, and
certain Classes of such Series from and to the amounts
specified below:
<TABLE>
<CAPTION>
Number of Number of
Authorized Shares Authorized Shares
Series Before Increase After Increase
------ --------------- --------------

<S> <C> <C> <C>
Transamerica Special Government Income Fund Class A 25 million 175 million
Class B 25 million 175 million

Transamerica Special High Yield Tax Free Fund Class A 25 million 50 million
Class B 25 million 75 million

Transamerica Special High Yield Bond Fund Class A 25 million 50 million
Class B 25 million 75 million

Transamerica Special Blue Chip Fund Class A 25 million 25 million
Class B 25 million 25 million

Transamerica Special Emerging Growth Fund Class A 25 million 50 million
Class B 25 million 75 million

Transamerica Special Natural Resources Class A 25 million 25 million
Class B 25 million 50 million

Transamerica Special Money Market Fund Class A None None
Class B 25 million 150 million
</TABLE>

Provided however, that the number of authorized shares
of each such Class shall be the same as the total number
authorized for such Series, to be divided between the two
Classes to the extent necessary based on the sale of shares
of each Class provided that (i)

<PAGE> 25

the total issued and outstanding shares of both Classes
combined of each Series shall never exceed the total
authorized shares for such Series; and (ii) the total issued
and outstanding shares of all Classes of all Series shall
never exceed the authorized 375,000,000 Class A and
625,000,000 Class B Shares.

B. The total number of shares of stock of all Classes
which the Corporation presently has authority to issue,
and will have authority to issue following this
amendment, is set forth in A above.

C. The number of authorized shares of each Series, and
each Class of each Series, both before and after this
amendment, is set forth in A above.

D. All shares have par value of one cent ($0.01) per
shares, both and after the increase.

E. The Corporation is a registered open-end investment
company under the Investment Company Act of 1940.

F. The increase in authorized shares of Common Stock, and
of certain Series and certain Classes of each Series,
set forth herein has been duly adopted by the Board of
Directors of the Corporation in accordance with Section
2-105(c) of the Maryland General Corporation Law.

IN WITNESS WHEREOF, Transamerica Special Series, Inc.
has caused these presents to be signed in its name and on
its behalf of its Vice President and witnessed by its
Assistant Secretary on May 17, 1994.

WITNESS: TRANSAMERICA SPECIAL SERIES, INC.

/s/ Pamela A. Vlatas /s/ Thomas J. Press
- ------------------------ -----------------------------
Pamela A. Vlatas Thomas J. Press
Assistant Secretary Vice President

THE UNDERSIGNED, Vice President of Transamerica Special
Series, Inc., who executed on behalf of the Corporation
Articles Supplementary of which this Certificate is made a
part, hereby acknowledges in the name and on behalf of said
Corporation the foregoing Articles Supplementary to be the
Corporate Act of said Corporation and hereby certifies that
to the best of his knowledge, information and belief the
matters and facts set forth therein with respect to the
authorization and approval hereof are true and all material
respects under the penalties of perjury.

/s/ Thomas J. Press
-------------------------------
Thomas J. Press, Vice President

<PAGE> 26
TRANSAMERICA SPECIAL SERIES, INC.

ARTICLES OF AMENDMENT

Transamerica Special Series, Inc., a Maryland
Corporation, having its principal office in Baltimore City,
Maryland (which is hereinafter called the "Corporation")
hereby certifies to the State Department of Assessment and
Taxation of Maryland that:

FIRST: THE CHARTER OF THE CORPORATION is hereby
amended by deleting Article II in its entirety and inserting
in lieu thereof the following for the purpose of changing
the name of the Corporation:

ARTICLE II
----------

Effective June 15, 1994 the name of the Corporation is
Transamerica Series Inc.

SECOND: The second paragraph of Article V, Section 2
of the CHARTER OF THE CORPORATION is hereby amended to
delete certain names of Series no longer in existence and to
change the name of the remaining designated Series of Shares
of the Corporation, effective June 15, 1994, as follows:

<TABLE>
<S> <C>
Transamerica Special Money Market Fund Transamerica Money Market Fund B
Transamerica Special Government Income Fund Transamerica Government Income Fund
Transamerica Special High Yield Bond Fund Transamerica High Yield Bond Fund
Transamerica Special High Yield Tax Free Fund Transamerica High Yield Tax-Free Fund
Transamerica Special Convertible Securities Fund (deleted)
Transamerica Special Blue Chip Fund (deleted)
Transamerica Special Emerging Growth Fund Transamerica Emerging Growth Fund
Transamerica Special Global Growth Fund (deleted)
Transamerica Special Natural Resources Fund Transamerica Global Resources Fund
</TABLE>

THIRD: These ARTICLES OF AMENDMENT do not increase
the authorized stock of the Corporation.

FOURTH: The foregoing amendments to the Charter of
the Corporation have been declared advisable by a majority
of the entire Board of Directors and approved by the
affirmative vote of the holders of a majority of the
outstanding Shares of both the Corporation and of each
Series of Shares of the Corporation.

IN WITNESS WHEREOF, Transamerica Special Series, Inc.
has caused these present to be signed in its name and on its
behalf of its Vice President and witnessed by its Assistant
Secretary this 20th day of May, 1994.

WITNESS: TRANSAMERICA SPECIAL SERIES, INC.

/s/ Pamela A. Vlatas By: /s/ Thomas J. Press
- ---------------------- --------------------------------
Pamela A. Vlatas Thomas J. Press
Assistant Secretary Vice President

<PAGE> 27

THE UNDERSIGNED, Vice President of Transamerica Special
Series, Inc., who executed on behalf of the Corporation the
foregoing ARTICLES OF AMENDMENT of which this Certificate is
made a part, hereby acknowledges in the name and on behalf
of said Corporation the foregoing ARTICLES OF AMENDMENT to
be the corporate act of said Corporation and hereby
certifies that to the best of his knowledge, information,
and belief the matters and facts set forth therein with
respect to the authorization and approval thereof are true
in all material respects under the penalty of perjury.

/s/ Thomas J. Press
------------------------------
Thomas J. Press

<PAGE> 28
TRANSAMERICA SERIES, INC.

ARTICLES OF AMENDMENT

Transamerica Series, Inc. a Maryland corporation,
having its principal office in Baltimore City, Maryland
(which is hereinafter called the "Corporation") hereby
certifies to the State Department of Assessment and Taxation
of Maryland that:

FIRST: The CHARTER OF THE CORPORATION is hereby
amended by deleting Article II in its entirety and inserting
in lieu thereof the following for the purpose of changing
the name of the Corporation:

ARTICLE II
----------

The name of the Corporation is "John Hancock Series,
Inc."

SECOND: The second paragraph of Article V, Section 2
of the CHARTER OF THE CORPORATION is hereby amended to
change the name of the designated Series of Shares of the
Corporation as follows:

<TABLE>
<CAPTION>
Present Name New Name
------------ --------

<S> <C>
Transamerica Money Market Fund B John Hancock Money Market Fund
Transamerica Government Income Fund John Hancock Government Income Fund
Transamerica High Yield Bond Fund John Hancock High Yield Bond Fund
Transamerica High Yield Tax Free Fund John Hancock High Yield Tax Free Fund
Transamerica Emerging Growth Fund John Hancock Emerging Growth Fund
Transamerica Global Resources Fund John Hancock Global Resources Fund
</TABLE>

THIRD: These ARTICLES OF AMENDMENT do not increase the
authorized stock of the Corporation.

FOURTH: The foregoing amendments to the Charter of
the Corporation have been declared advisable by a majority
of the entire Board of Directors and approved by the
affirmative vote of the holders of a majority of the
outstanding Shares of the Corporation and of each Series of
Shares of the Corporation.

<PAGE> 29

IN WITNESS WHEREOF, Transamerica Series, Inc. has
caused these presents to be signed in its name and on its
behalf by its Vice President and witnessed by its Assistant
Secretary this 16th Day of December 1994.

WITNESS: TRANSAMERICA SERIES, INC.

/s/ Curtis Barnes By: /s/ Thomas J. Press
- --------------------------- ----------------------------
Assistant Secretary Thomas J. Press
Vice President

/s/ Thomas J. Press
--------------------------------
Thomas J. Press

<PAGE> 30

JOHN HANCOCK SERIES, INC.
ARTICLES SUPPLEMENTARY
----------------------

John Hancock Series, Inc., a Maryland corporation having its
principal office in Baltimore City, Maryland and an open-end
investment company registered under the Investment Company Act of
1940 (hereinafter, the "Corporation"), hereby certifies to the
State Department of Assessments and Taxation of Maryland that:

FIRST: The second paragraph of Article V, Section 2 of the
Articles of Incorporation of the Corporation is hereby amended to
change the name of John Hancock Money Market Fund B, an existing
Series of the Corporation (the "Money Market Fund"), to "John
Hancock Money Market Fund."

SECOND: Pursuant to authority expressly vested in the Board
of Directors of the Corporation by Section 2.105 of the Maryland
General Corporation Law and Article V of the Articles of
Incorporation (as amended and restated), the Board of Directors
of this Corporation has duly:

1.Created and authorized the issuance of three classes of
shares of Common Stock of the Money Market Fund to be known as
"Class A Common Stock," "Class B Common Stock" and "Class S
Common Stock," with each such Class to be identical except that
(a) expenses related to the distribution of shares, personal and
account maintenance service fees and transfer agency costs of
each Class may be borne solely by such Class, and (b) the bearing
of expenses solely by a Class shall be appropriately reflected
(in the manner and for the period determined by the Board of
Directors) in the net asset value, dividends and liquidation
rights of the shares of such Class.

2.Determined that all issued and outstanding shares of
Common Stock of the Money Market Fund shall be classified as
shares of Class B Common Stock.

3.Increased the authorized Common Stock of the Corporation
from 375,000,000 to 2,500,000,000 shares of Class A Common Stock;
from 625,000,000 to 3,000,000,000 shares of Class B Common Stock;
and from 0 to 1,000,000,000 shares of Class S Common Stock, all
with a par value of one cent ($0.01) per share both before and
after such increase.

4.Increased the authorized Common Stock of the Money Market
Fund from 150,000,000 shares of Class B Common Stock to
3,500,000,000 shares of Common Stock of the Money Market Fund,
all with a par value of one cent ($0.01) per share both before
and after such increase; and determined that the total number of
authorized shares of each Class of the Money Market Fund shall be
the same as the total number authorized for the Money Market
Fund, to be divided among the three Classes to the extent
necessary based on the sale of shares of each Class, provided
that (i) the total issued and outstanding shares of all three
Classes combined shall never exceed the total authorized shares
of the Money Market Fund and (ii) the total issued and
outstanding shares of all Classes of each Series of the
Corporation shall never exceed the number of shares of each Class
authorized in paragraph 3 hereof.

5.Increased the authorized Common Stock of John Hancock
Government Income Fund, an existing Series of the Corporation
(the "Government Fund"), from 175,000,000 shares of Class A
Common Stock and 175,000,000 shares of Class B Common Stock to
1,000,000,000 shares of Common Stock of the Government Fund, all
with a par value of one cent ($0.01) per share both

-1-
<PAGE> 31

before and after such increase; and determined that the total
number of authorized shares of each Class of the Government Fund
shall be the same as the total number authorized for the
Government Fund, to be divided among the two Classes to the
extent necessary based on the sale of shares of each Class,
provided that (i) the total issued and outstanding shares of
both Classes combined shall never exceed the total authorized
shares of the Government Fund and (ii) the total issued and
outstanding shares of all Classes of each Series of the
Corporation shall never exceed the number of shares of each Class
authorized in paragraph 3 hereof.

IN WITNESS WHEREOF, John Hancock Series, Inc. has caused
these Articles Supplementary to be signed in its name and on its
behalf by its Senior Vice President and witnessed by its
Assistant Secretary on September 11, 1995.

JOHN HANCOCK SERIES, INC.

WITNESS: By:

/s/ Alfred P. Ouellette /s/ Thomas H. Drohan
- ----------------------- --------------------
Alfred P. Ouellette Thomas H. Drohan
Assistant Secretary Senior Vice President and
Secretary

THE UNDERSIGNED, Senior Vice President of the Corporation,
who executed on behalf of the Corporation the foregoing Articles
Supplementary of which this Certificate is made a part, hereby
acknowledges, in the name of and on behalf of the Corporation,
the foregoing Articles Supplementary to be the corporate act of
the Corporation and hereby certifies under the penalties of
perjury that, to the best of his/her knowledge, information and
belief, the matters and facts set forth therein with respect to
the authorization and approval thereof are true in all material
respects.

/s/ Thomas H. Drohan
-------------------------
Thomas H. Drohan
Senior Vice President and
Secretary

-2-

<PAGE> 1
EXHIBIT 99.B4

JOHN HANCOCK SERIES, INC.
JOHN HANCOCK GLOBAL RESOURCES FUND- B

fully paid and non-assessable Common Shares of JOHN HANCOCK SERIES, INC.,
Class B, in respect of JOHN HANCOCK GLOBAL RESOURCES FUND - B, par value
$0.01 per share, transferable on the books of the Corporation by the holder in
person, or by duly authorized attorney, upon surrender of this certificate
properly endorsed. Pursuant to Article VI of the Articles of Incorporation, no
holder of any shares of the Trust has any preemptive rights to acquire unissued
or treasury shares of the Corporation. This certificate is not valid unless
countersigned by the Transfer Agent.

Change date 5/15/95...jxr TEST

Mass Fund

Signed by Boudreau, Chairman

<PAGE> 2
JOHN HANCOCK SERIES, INC.
JOHN HANCOCK GLOBAL RESOURCES FUND- A

fully paid and non-assessable Common Shares, of JOHN HANCOCK GLOBAL RESOURCES
FUND - A, a series of JOHN HANCOCK SERIES, INC. Class- A Common Shares,
par value $0.01 per share, transferable on the books of the Corporation by the
holder in person, or by duly authorized attorney, upon surrender of this
certificate properly endorsed. Pursuant to Article VI of the Articles of
Incorporation, no holder of any shares of the Corporation has any preemptive
rights to acquire unissued or treasury shares of the Corporation. This
certificate is not valid unless countersigned by the Transfer Agent.

Change date 5/15/95...jxr TEST

Mass Fund

Signed by Boudreau, Chairman

<PAGE> 3
JOHN HANCOCK SERIES, INC.
JOHN HANCOCK EMERGING GROWTH FUND- B

fully paid and non-assessable Common Shares of JOHN HANCOCK SERIES, INC.,
Class- B, in respect of JOHN HANCOCK EMERGING GROWTH FUND - B, par value $0.01
per share, transferable on the books of the Corporation by the holder in
person, or by duly authorized attorney, upon surrender of this certificate
properly endorsed. Pursuant to Article VI of the Articles of Incorporation, no
holder of any shares of the Corporation has any preemptive rights to acquire
unissued or treasury shares of the Corporation. This certificate is not valid
unless countersigned by the Transfer Agent.

Change date 5/15/95...jxr TEST

Mass Fund

Signed by Boudreau, Chairman

<PAGE> 4
JOHN HANCOCK SERIES, INC.
JOHN HANCOCK EMERGING GROWTH FUND- A

fully paid and non-assessable Common Shares, of JOHN HANCOCK SERIES, INC.,
Class-A, in respect of JOHN HANCOCK EMERGING GROWTH FUND - A, par value $0.01
per share, transferable on the books of the Corporation by the holder in
person, or by duly authorized attorney, upon surrender of this certificate
properly endorsed. Pursuant to Article VI of the Articles of Incorporation, no
holder of any shares of the Corporation has any preemptive rights to acquire
unissued or treasury shares of the Corporation. This certificate is not valid
unless countersigned by the Transfer Agent.

Change date 5/15/95...jxr TEST

Mass Fund

Signed by Boudreau, Chairman

<PAGE> 5
JOHN HANCOCK SERIES, INC.
JOHN HANCOCK HIGH YIELD TAX FREE FUND- A

fully paid and non-assessable Common Shares, of JOHN HANCOCK SERIES, INC.,
Class- A, in respect of JOHN HANCOCK HIGH YIELD TAX FREE FUND - A, par value
$0.01 per share, transferable on the books of the Corporation by the holder in
person, or by duly authorized attorney, upon surrender of this certificate
properly endorsed. Pursuant to Article VI of the Articles of Incorporation, no
holder of any shares of the Corporation has any preemptive rights to acquire
unissued or treasury shares of the Corporation. This certificate is not valid
unless countersigned by the Transfer Agent.

Change date 5/15/95...jxr TEST

Mass Fund

Signed by Boudreau, Chairman

<PAGE> 6
JOHN HANCOCK SERIES, INC.
JOHN HANCOCK HIGH YIELD TAX FREE FUND- B

fully paid and non-assessable Common Shares, of JOHN HANCOCK SERIES, INC.,
Class- B, in respect of JOHN HANCOCK HIGH YIELD TAX FREE FUND - B, par
value $0.01 per share, transferable on the books of the Corporation by the
holder in person, or by duly authorized attorney, upon surrender of this
certificate properly endorsed. Pursuant to Article VI of the Articles of
Incorporation, no holder of any shares of the Corporation has any preemptive
rights to acquire unissued or treasury shares of the Corporation. This
certificate is not valid unless countersigned by the Transfer Agent.

Change date 5/15/95...jxr TEST

Mass Fund

Signed by Boudreau, Chairman

<PAGE> 7

JOHN HANCOCK SERIES, INC.
JOHN HANCOCK HIGH YIELD BOND FUND- A

fully paid and non-assessable Common Shares, of JOHN HANCOCK SERIES, INC.,
Class- A, in respect of JOHN HANCOCK HIGH YIELD BOND FUND - A, par
value $0.01 per share, transferable on the books of the Corporation by the
holder in person, or by duly authorized attorney, upon surrender of this
certificate properly endorsed. Pursuant to Article VI of the Articles of
Incorporation, no holder of any shares of the Corporation has any preemptive
rights to acquire unissued or treasury shares of the Corporation. This
certificate is not valid unless countersigned by the Transfer Agent.

Change date 5/15/95...jxr TEST

Mass Fund

Signed by Boudreau, Chairman

<PAGE> 8
JOHN HANCOCK SERIES, INC.
JOHN HANCOCK HIGH YIELD BOND FUND- B

fully paid and non-assessable Common Shares, of JOHN HANCOCK SERIES, INC.,
Class- B, in respect of JOHN HANCOCK HIGH YIELD BOND FUND - B, par
value $0.01 per share, transferable on the books of the Corporation by the
holder in person, or by duly authorized attorney, upon surrender of this
certificate properly endorsed. Pursuant to Article VI of the Articles of
Incorporation, no holder of any shares of the Corporation has any preemptive
rights to acquire unissued or treasury shares of the Corporation. This
certificate is not valid unless countersigned by the Transfer Agent.

Change date 5/15/95...jxr TEST

Mass Fund

Signed by Boudreau, Chairman

<PAGE> 9

JOHN HANCOCK SERIES, INC.
JOHN HANCOCK GOVERNMENT INCOME FUND- A

fully paid and non-assessable Common Shares, of JOHN HANCOCK SERIES, INC.,
Class-A, a series of JOHN HANCOCK GOVERNMENT INCOME FUND - A, par value
$0.01 per share, transferable on the books of the Corporation by the holder in
person, or by duly authorized attorney, upon surrender of this certificate
properly endorsed. Pursuant to Article VI of the Articles of Incorporation, no
holder of any shares of the Corporation has any preemptive rights to acquire
unissued or treasury shares of the Corporation. This certificate is not valid
unless countersigned by the Transfer Agent.

Change date 5/15/95...jxr TEST

Mass Fund

Signed by Boudreau, Chairman

<PAGE> 10

JOHN HANCOCK SERIES, INC.
JOHN HANCOCK GOVERNMENT INCOME FUND- B

fully paid and non-assessable Common Shares, of JOHN HANCOCK SERIES, INC.,
Class- B, in respect of JOHN HANCOCK GOVERNMENT INCOME FUND - B, par value
$0.01 per share, transferable on the books of the Corporation by the holder in
person, or by duly authorized attorney, upon surrender of this certificate
properly endorsed. Pursuant to Article VI of the Articles of Incorporation, no
holder of any shares of the Corporation has any preemptive rights to acquire
unissued or treasury shares of the Corporation. This certificate is not valid
unless countersigned by the Transfer Agent.

Change date 5/15/95...jxr TEST

Mass Fund

Signed by Boudreau, Chairman

<PAGE> 1
EXHIBIT 99.B11
Auditors
Consents

CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

We consent to the references to our firm under the captions "The Fund's
Financial Highlights" in the Prospectus and "Independent Auditors" in the
Statement of Additional Information in Post-Effective Amendment No. 21 to
Registration Statement No. 33-16048 on Form N1-A of John Hancock Series, Inc.

We also consent to the use of our report dated December 15, 1995, with
respect to the financial statements and financial highlights of John Hancock
High Yield Tax-Free Fund, a series of John Hancock Series, Inc. included in
this form N1-A.

/s/ERNST & YOUNG LLP

Boston, Massachusetts
February 23, 1996
<PAGE> 2

CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

We also consent to the use of our report dated December 15, 1995, with
respect to the financial statements and financial highlights of John Hancock
Government Income Fund, a series of John Hancock Series, Inc. included in this
form N1-A.

/s/ERNST & YOUNG LLP

Boston, Massachusetts
February 23, 1996
<PAGE> 3

CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

We also consent to the use of our report dated December 15, 1995, with
respect to the financial statements and financial highlights of John Hancock
Emerging Growth, a series of John Hancock Series, Inc. included in this
form N1-A.

/s/ERNST & YOUNG LLP

Boston, Massachusetts
February 23, 1996

<PAGE> 4

CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

We also consent to the use of our report dated December 15, 1995, with
respect to the financial statements and financial highlights of John Hancock
Global Resources Fund, a series of John Hancock Series, Inc. included in this
form N1-A.

/s/ERNST & YOUNG LLP

Boston, Massachusetts
February 23, 1996
<PAGE> 5

CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

We also consent to the use of our report dated December 15, 1995, with
respect to the financial statements and financial highlights of John Hancock
Money Market Fund, a series of John Hancock Series, Inc. included in this
form N1-A.

/s/ERNST & YOUNG LLP

Boston, Massachusetts
February 23, 1996

<PAGE> 6

CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

We also consent to the use of our report dated December 15, 1995, with
respect to the financial statements and financial highlights of John Hancock
High Yield Bond Fund, a series of John Hancock Series, Inc. included in this
form N1-A.

/s/ERNST & YOUNG LLP

Boston, Massachusetts
February 23, 1996

<PAGE> 1
EXHIBIT 99B.15

JOHN HANCOCK MONEY MARKET FUND

Form of
Distribution Plan

Class A Shares

ARTICLE I. THIS PLAN

This Distribution Plan (the "Plan") sets forth the terms and conditions
on which John Hancock Series, Inc. (the "Company"), on behalf of John Hancock
Money Market Fund (the "Fund"), on behalf of its Class A shares, will, after
the effective date hereof, pay certain amounts to John Hancock Funds, Inc.
("John Hancock Funds") in connection with the provision by John Hancock Funds
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 Fund and John Hancock Funds heretofore
entered into a Distribution Agreement, dated December 22, 1994 as amended (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 John Hancock Funds a fee in the amount specified
in Article III hereof. Such fee may be spent by John Hancock Funds 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 John Hancock Funds or
other broker-dealers ("Selling Brokers") that have entered into an agreement
with John Hancock Funds 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, (c) an allocation of overhead and other branch office expenses of
John Hancock Funds related to the distribution of Class A shares of the Fund;
and (d) expenses incurred in connection with the distribution of a
corresponding class of any open-end, registered investment company which sells
all or substantially all of its assets to the Fund or which which merges or
otherwise combines with the Fund.

Service Expenses include payments made to, or on account of, account
executives of selected broker-dealers (including affiliates of John Hancock
Funds) and others who furnish personal and shareholder account maintenance
services to Class A shareholders of the Fund.
<PAGE> 2

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 an annual rate of 0.25%
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) 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 Board of Directors shall determine.
In the event John Hancock Funds 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 John Hancock Funds under this Plan during any fiscal year of the Fund
and not expended or allocated by John Hancock Funds 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 Company, 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 December 22, 1994 (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 Company 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 DIRECTORS, 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
members of the Board of Directors of the Company and (b) those members of the
Board of Directors of the Company 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 Directors").

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.

2
<PAGE> 3

ARTICLE VII. INFORMATION

John Hancock Funds shall furnish the Fund and its Board of Directors
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 Board of Directors may request.

ARTICLE VIII. TERMINATION

This Plan may be terminated (a) at any time by vote of a majority of
the Board of Directors, a majority of the Independent Directors, or a majority
of the Fund's outstanding voting Class A shares, or (b) by John Hancock Funds
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 Directors 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.

3
<PAGE> 4

IN WITNESS WHEREOF, the Company, on behalf of the Fund, has executed
this Distribution Plan effective as of the 12th day of September, 1995 in
Boston, Massachusetts.

JOHN HANCOCK SERIES, INC.

By /s/ Anne C. Hodsdon
-------------------------
President

JOHN HANCOCK FUNDS, INC.

By /s/ C. Troy Shauer, Jr.
-------------------------
President

<PAGE> 1
EXHIBIT 99.B15.7

JOHN HANCOCK MONEY MARKET FUND

Distribution Plan

Class S Shares

ARTICLE I. THIS PLAN

This Distribution Plan (the "Plan") sets forth the terms and conditions
on which John Hancock Series, Inc. (the "Company"), on behalf of John Hancock
Money Market Fund (the "Fund"), on behalf of its Class S shares, will, after
the effective date hereof, pay certain amounts to John Hancock Funds, Inc.
("John Hancock Funds") in connection with the provision by John Hancock Funds
of certain services to the Fund and its Class S 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 Fund and John Hancock Funds heretofore
entered into a Distribution Agreement, dated December 22, 1994, as amended
(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 John Hancock Funds a fee in the amount specified
in Article III hereof. Such fee may be spent by John Hancock Funds on any
activities or expenses primarily intended to result in the sale of Class S
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 John Hancock Funds,
other broker-dealers or financial service firms ("Selling Brokers") that have
entered into an agreement with John Hancock Funds for the sale of Class S
shares of the Fund, (b) direct out-of-pocket expenses incurred in connection
with the distribution of Class S shares of the Fund, including expenses related
to printing of prospectuses and reports to other than existing Class S
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 John Hancock Funds related to the distribution of
Class S shares of the Fund; (d) expenses incurred in connection with the
distribution of a corresponding class of any open-end, registered investment
company which sells all or substantially all of its assets to the Fund or
which which merges or otherwise combines with the Fund; and (e) interest
expenses on unreimbursed distribution expenses related to Class S shares as
described in Article III hereof.

<PAGE> 2

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 an annual rate of 0.40%
of the average daily net asset value of the Class S shares of the Fund
(determined in accordance with the Fund's prospectus as from time to time in
effect) 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 S shares
of the Fund. Such expenditures shall be calculated and accrued daily and paid
monthly or at such other intervals as the Board of Directors shall determine.
In the event John Hancock Funds is not fully reimbursed for payments made or
other expenses incurred by it under this Plan, John Hancock Funds shall be
entitled to carry forward such expenses to subsequent fiscal years for
submission to the Class S shares of the Fund for payment, subject always to
the annual maximum expenditures set forth in this Article III; provided,
however, that nothing herein shall prohibit or limit the Board of Directors
from terminiating this Plan and all payments hereunder at any time pursuant to
Article VIII hereof.

ARTICLE IV. EXPENSES BORNE BY THE FUND

ARTICLE V. APPROVAL BY DIRECTORS, ETC.

ARTICLE VI. CONTINUANCE

2
<PAGE> 3

ARTICLE VII. INFORMATION

ARTICLE VIII. TERMINATION

This Plan may be terminated (a) at any time by vote of a majority of
the Board of Directors, a majority of the Independent Directors, or a majority
of the Fund's outstanding voting Class S shares, or (b) by John Hancock Funds
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 Directors or by vote of a majority
of the Fund's then outstanding voting Class S 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 S 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.

3
<PAGE> 4

IN WITNESS WHEREOF, the Company, on behalf of the Fund, has executed
this Distribution Plan effective as of the 12th day of September, 1995 in
Boston, Massachusetts.

JOHN HANCOCK SERIES, INC.

By /s/ Anne C. Hodsdon
-------------------------
President

JOHN HANCOCK FUNDS, INC.

By /s/ C. Troy Shauer, Jr.
-------------------------
President

<PAGE> 1
EXHIBIT 99.B16

TRANSAMERICA HIGH YIELD TAX-FREE FUND - CLASS A SEC TOTAL RETURN FORMULA

Initial Investment: $1,000.00

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Average Annual Total Return Rate Investment Value at End of Period CUMULATIVE
<S> <C> <C> <C> <C> <C>

10 Year Return: N/A 10 Year Value: $ 0.00 -100.00%

5 Year Return: N/A 5 Year Value: $ 0.00 -100.00%

1.83 Year Return: 2.39% 2.17 Year Value: $1,044.10 4.41%

1 Year Return: 9.61% 1 Year Value: $1,096.06 9.61%
- -------------------------------------------------------------------------------------------------
</TABLE>

Accr Since Last Paid $0.0000

Constant Sales Charge: 4.50% Monthly Declared Div $0.0531

<TABLE>
<CAPTION>
3-Year
---------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shs Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. O/S
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/93 $9.85 $10.31 4.50% 96.993
01/31/94 $9.91 $10.38 4.50% 1/31/94 0.05700000 $9.91 $5.5286 0.558 97.551
02/28/94 $9.73 $10.19 4.50% 2/28/94 0.05700000 $9.73 $5.5604 0.571 98.122
03/31/94 $9.29 $ 9.73 4.50% 3/31/94 0.05700000 $9.29 $5.5930 0.602 98.724
04/29/94 $9.28 $ 9.72 4.50% 4/29/94 0.05700000 $9.28 $5.6273 0.606 99.330
05/31/94 $9.28 $ 9.72 4.50% 5/31/94 0.05700000 $9.28 $5.6618 0.610 99.940
06/30/94 $9.24 $ 9.68 4.50% 6/30/94 0.05700000 $9.24 $5.6966 0.617 100.557
07/29/94 $9.32 $ 9.76 4.50% 7/29/94 0.05700000 $9.32 $5.7317 0.615 101.172
08/31/94 $9.27 $ 9.71 4.50% 8/31/94 0.05700000 $9.27 $5.7668 0.622 101.794
09/30/94 $9.06 $ 9.49 4.50% 9/30/94 0.05700000 $9.06 $5.8023 0.640 102.434
10/31/94 $8.82 $ 9.24 4.50% 10/31/94 0.05700000 $8.82 $5.8387 0.662 103.096
11/30/94 $8.56 $ 8.96 4.50% 11/30/94 0.05700000 $8.56 $5.8765 0.687 103.783
12/31/94 $8.69 $ 9.10 4.50% 12/30/94 0.05700000 $8.69 $5.9156 0.681 104.464
01/31/95 $8.93 $ 9.35 4.50% 1/31/95 0.05700000 $8.93 $5.9544 0.667 105.131
02/28/95 $9.16 $ 9.59 4.50% 2/28/95 0.05700000 $9.16 $5.9925 0.654 105.785
03/31/95 $9.21 $ 9.64 4.50% 3/31/95 0.04526190 $9.21 $4.7880 0.520 106.305
04/30/95 $9.26 $ 9.70 4.50% 4/28/95 0.04739877 $9.26 $5.0387 0.544 106.849
05/31/95 $9.45 $ 9.90 4.50% 5/31/95 0.04777852 $9.45 $5.1051 0.540 107.389
06/30/95 $9.35 $ 9.79 4.50% 6/29/95 0.04797401 $9.35 $5.1519 0.551 107.940
07/31/95 $9.36 $ 9.80 4.50% 7/28/95 0.04730178 $9.36 $5.1058 0.545 108.485
08/31/95 $9.45 $ 9.90 4.50% 8/30/95 0.05324983 $9.42 $5.7768 0.613 109.098
09/30/95 $9.40 $ 9.84 4.50% 9/28/95 0.04974977 $9.37 $5.4276 0.579 109.677
10/31/95 $9.47 $ 9.92 4.50% 10/30/95 0.04967191 $9.46 $5.4479 0.576 110.253
<CAPTION>
1-Year
--------------------------
Month Dividend # of Shs Shares
Ended Received Reinv. O/S
- ------------------------------------
<S> <C> <C> <C>
12/31/93
01/31/94
02/28/94
03/31/94
04/29/94
05/31/94
06/30/94
07/29/94
08/31/94
09/30/94
10/31/94 108.225
11/30/94 $6.1688 0.721 108.946
12/31/94 $6.2099 0.715 109.661
01/31/95 $6.2507 0.700 110.361
02/28/95 $6.2906 0.687 111.048
03/31/95 $5.0262 0.546 111.594
04/30/95 $5.2894 0.571 112.165
05/31/95 $5.3591 0.567 112.732
06/30/95 $5.4082 0.578 113.310
07/31/95 $5.3598 0.573 113.883
08/31/95 $6.0643 0.644 114.527
09/30/95 $5.6977 0.608 115.135
10/31/95 $5.7190 0.605 115.740
</TABLE>
<PAGE> 2
TRANSAMERICA HIGH YIELD TAX-FREE FUND (CLASS B) - SEC TOTAL RETURN

Initial Investment: $1,000.00 HIGH YIELD TAX FREE BOND CLASS B

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return Investment Value at End of Period

CDSC CUMULATIVE PLOT POINTS
Excluding With Excluding % CDSC Ending Excluding With Excluding With
CDSC CDSC CDSC CDSC Amount Value CDSC CDSC CDSC CDSC
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9.18 Year Return: 6.71% 6.71% $1,815.83 0.00% $ 0.00 $1,815.83 81.58% 81.58% $10,000.00 $ 10,000.00
Initial Initial
5 Year Return: 8.02% 7.72% $1,470.43 2.00% $20.00 $1,450.43 47.04% 45.04% Investment Investment

$18,158.30 $18,158.30
Since Inception Since Inception
1 Year Return: 13.96% 8.96% $1,139.60 5.00% $50.00 $1,089.60 13.96% 8.96% or 10 years or 10 years
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
# Since Inception NOTE: YTD includes Ex-dividend for the period Monthly Declared Div
$0.0000 $0.0474
Constant Sales Charge: N/A

10-Year
---------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shs Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. O/S
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
08/29/86 $10.00 $10.00 0.00% 100.000
08/29/86 $10.00 $10.00 0.00% 8/29/86 0.00617 $10.00 $0.6170 0.062 100.062
09/30/86 $ 9.75 $ 9.75 0.00% 9/30/86 0.06745 $ 9.75 $6.7492 0.692 100.754
10/31/86 $ 9.84 $ 9.84 0.00% 10/31/86 0.07043 $ 9.84 $7.0961 0.721 101.475
11/28/86 $ 9.99 $ 9.99 0.00% 11/28/86 0.06888 $ 9.99 $6.9896 0.700 102.175
12/31/86 $ 9.88 $ 9.88 0.00% 12/31/86 0.07134 $ 9.88 $7.2892 0.738 102.913
01/30/87 $10.10 $10.10 0.00% 1/30/87 0.06645 $10.10 $6.8386 0.677 103.590
02/27/87 $10.11 $10.11 0.00% 2/27/87 0.05604 $10.11 $5.8052 0.574 104.164
03/31/87 $10.05 $10.05 0.00% 3/31/87 0.06374 $10.05 $6.6394 0.661 104.825
04/30/87 $ 9.49 $ 9.49 0.00% 4/30/87 0.06149 $ 9.49 $6.4457 0.679 105.504
05/29/87 $ 9.35 $ 9.35 0.00% 5/29/87 0.06390 $ 9.35 $6.7417 0.721 106.225
06/30/87 $ 9.27 $ 9.27 0.00% 6/30/87 0.06181 $ 9.27 $6.5658 0.708 106.933
07/31/87 $ 9.35 $ 9.35 0.00% 7/31/87 0.06417 $ 9.35 $6.8619 0.734 107.667
08/31/87 $ 9.29 $ 9.29 0.00% 8/31/87 0.06417 $ 9.29 $6.9090 0.744 108.411
09/30/87 $ 8.88 $ 8.88 0.00% 9/30/87 0.06417 $ 8.88 $6.9567 0.783 109.194
10/30/87 $ 8.62 $ 8.62 0.00% 10/30/87 0.05500 $ 8.62 $6.0057 0.697 109.891
11/30/87 $ 8.69 $ 8.69 0.00% 11/30/87 0.05840 $ 8.69 $6.4176 0.739 110.630
12/24/87 $ 8.77 $ 8.77 0.00% 12/24/87 0.03300 $ 8.75 $3.6508 0.417 111.047
12/31/87 $ 8.77 $ 8.77 0.00% 12/31/87 0.05840 $ 8.77 $6.4851 0.739 111.786
01/29/88 $ 9.06 $ 9.06 0.00% 1/29/88 0.05840 $ 9.06 $6.5283 0.721 112.507
02/29/88 $ 9.17 $ 9.17 0.00% 2/29/88 0.05840 $ 9.17 $6.5704 0.717 113.224
03/31/88 $ 9.05 $ 9.05 0.00% 3/31/88 0.05500 $ 9.05 $6.2273 0.688 113.912
04/29/88 $ 9.04 $ 9.04 0.00% 4/29/88 0.05500 $ 9.04 $6.2652 0.693 114.605
05/31/88 $ 8.99 $ 8.99 0.00% 5/31/88 0.05300 $ 8.99 $6.0741 0.676 115.281
06/30/88 $ 9.10 $ 9.10 0.00% 6/30/88 0.05300 $ 9.10 $6.1099 0.671 115.952
07/29/88 $ 9.02 $ 9.02 0.00% 7/29/88 0.05300 $ 9.02 $6.1455 0.681 116.633
08/31/88 $ 8.99 $ 8.99 0.00% 8/31/88 0.05300 $ 8.99 $6.1815 0.688 117.321
09/30/88 $ 9.15 $ 9.15 0.00% 9/30/88 0.05300 $ 9.15 $6.2180 0.680 118.001
10/31/88 $ 9.25 $ 9.25 0.00% 10/31/88 0.05300 $ 9.25 $6.2541 0.676 118.677
11/30/88 $ 9.16 $ 9.16 0.00% 11/30/88 0.05300 $ 9.16 $6.2899 0.687 119.364
12/31/88 $ 9.27 $ 9.27 0.00% $0.0000 0.000 119.364
01/03/89 $ 9.29 $ 9.29 0.00% 1/3/89 0.05300 $ 9.21 $6.3263 0.687 120.051
01/31/89 $ 9.29 $ 9.29 0.00% 1/31/89 0.05300 $ 9.29 $6.3627 0.685 120.736
02/28/89 $ 9.19 $ 9.19 0.00% 2/28/89 0.05300 $ 9.19 $6.3990 0.696 121.432
03/31/89 $ 9.13 $ 9.13 0.00% 3/31/89 0.05300 $ 9.13 $6.4359 0.705 122.137
04/28/89 $ 9.23 $ 9.23 0.00% 4/28/89 0.05300 $ 9.23 $6.4733 0.701 122.838
05/31/89 $ 9.35 $ 9.35 0.00% 5/31/89 0.05300 $ 9.35 $6.5104 0.696 123.534
06/30/89 $ 9.41 $ 9.41 0.00% 6/30/89 0.05300 $ 9.41 $6.5473 0.696 124.230
07/31/89 $ 9.45 $ 9.45 0.00% 7/31/89 0.05300 $ 9.45 $6.5842 0.697 124.927
08/31/89 $ 9.33 $ 9.33 0.00% 8/31/89 0.05300 $ 9.33 $6.6211 0.710 125.637
09/29/89 $ 9.25 $ 9.25 0.00% 9/29/89 0.05300 $ 9.25 $6.6588 0.720 126.357
<CAPTION>

5-Year 1-Year
----------------------------------------------------------------------
Month Dividend # of Shs Shares Dividend # of Shs Shares
Ended Received Reinv. O/S Received Reinv. O/S
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
08/29/86
08/29/86
09/30/86
10/31/86
11/28/86
12/31/86
01/30/87
02/27/87
03/31/87
04/30/87
05/29/87
06/30/87
07/31/87
08/31/87
09/30/87
10/30/87
11/30/87
12/24/87
12/31/87
01/29/88
02/29/88
03/31/88
04/29/88
05/31/88
06/30/88
07/29/88
08/31/88
09/30/88
10/31/88
11/30/88
12/31/88
01/03/89
01/31/89
02/28/89
03/31/89
04/28/89
05/31/89
06/30/89
07/31/89
08/31/89
09/29/89
</TABLE>
<PAGE> 3
TRANSAMERICA HIGH YIELD TAX-FREE FUND (CLASS B) - SEC TOTAL RETURN

Initial Investment: $1,000.00 HIGH YIELD TAX FREE BOND CLASS B

<TABLE>
<CAPTION>
# Since Inception NOTE: YTD includes Ex-dividend for the period Monthly Declared Div
$0.0000 $0.0474
Constant Sales Charge: N/A

10-Year
-----------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shs Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. O/S
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10/31/89 $9.29 $9.29 0.00% 10/31/89 0.05300 $9.29 $ 6.6969 0.721 127.078
11/30/89 $9.33 $9.33 0.00% 11/30/89 0.05300 $9.33 $ 6.7351 0.722 127.800
12/29/89 $9.30 $9.30 0.00% 12/29/89 0.05300 $9.30 $ 6.7734 0.728 128.528
01/31/90 $9.21 $9.21 0.00% 1/31/90 0.05300 $9.21 $ 6.8120 0.740 129.268
02/28/90 $9.22 $9.22 0.00% 2/28/90 0.05300 $9.22 $ 6.8512 0.743 130.011
03/30/90 $9.20 $9.20 0.00% 3/30/90 0.05300 $9.20 $ 6.8906 0.749 130.760
04/30/90 $9.06 $9.06 0.00% 4/30/90 0.05300 $9.06 $ 6.9303 0.765 131.525
05/31/90 $9.19 $9.19 0.00% 5/31/90 0.05300 $9.19 $ 6.9708 0.759 132.284
06/29/90 $9.23 $9.23 0.00% 6/29/90 0.05300 $9.23 $ 7.0111 0.760 133.044
07/31/90 $9.30 $9.30 0.00% 7/31/90 0.05300 $9.30 $ 7.0513 0.758 133.802
08/31/90 $9.13 $9.13 0.00% 8/31/90 0.05300 $9.13 $ 7.0915 0.777 134.579
09/28/90 $9.11 $9.11 0.00% 9/28/90 0.05300 $9.11 $ 7.1327 0.783 135.362
10/31/90 $9.07 $9.07 0.00% 10/31/90 0.05300 $9.07 $ 7.1742 0.791 136.153
11/30/90 $9.10 $9.10 0.00% 11/30/90 0.05300 $9.10 $ 7.2161 0.793 136.946
12/31/90 $9.01 $9.01 0.00% 12/31/90 0.05300 $9.01 $ 7.2581 0.806 137.752
01/31/91 $8.95 $8.95 0.00% 1/31/91 0.05300 $8.95 $ 7.3009 0.816 138.568
02/28/91 $8.96 $8.96 0.00% 2/28/91 0.05300 $8.96 $ 7.3441 0.820 139.388
03/22/91 $8.94 $8.94 0.00% 3/22/91 0.05300 $8.92 $ 7.3876 0.828 140.216
04/24/91 $9.07 $9.07 0.00% 4/24/91 0.05300 $9.03 $ 7.4314 0.823 141.039
05/24/91 $9.12 $9.12 0.00% 5/24/91 0.05300 $9.09 $ 7.4751 0.822 141.861
06/24/91 $9.08 $9.08 0.00% 6/24/91 0.05300 $9.04 $ 7.5186 0.832 142.693
07/25/91 $9.15 $9.15 0.00% 7/25/91 0.05300 $9.13 $ 7.5627 0.828 143.521
08/26/91 $9.22 $9.22 0.00% 8/26/91 0.05300 $9.19 $ 7.6066 0.828 144.349
09/24/91 $9.29 $9.29 0.00% 9/24/91 0.05300 $9.25 $ 7.6505 0.827 145.176
10/25/91 $9.31 $9.31 0.00% 10/25/91 0.05300 $9.28 $ 7.6943 0.829 146.005
11/25/91 $9.28 $9.28 0.00% 11/25/91 0.05300 $9.26 $ 7.7383 0.836 146.841
12/26/91 $9.43 $9.43 0.00% 12/26/91 0.05300 $9.39 $ 7.7826 0.829 147.670
01/27/92 $9.39 $9.39 0.00% 1/27/92 0.05300 $9.41 $ 7.8265 0.832 148.502
02/24/92 $9.36 $9.36 0.00% 2/24/92 0.05300 $9.32 $ 7.8706 0.844 149.346
03/25/92 $9.32 $9.32 0.00% 3/25/92 0.05300 $9.30 $ 7.9153 0.851 150.197
04/24/92 $9.35 $9.35 0.00% 4/24/92 0.05300 $9.35 $ 7.9604 0.851 151.048
05/22/92 $9.40 $9.40 0.00% 5/22/92 0.05300 $9.39 $ 8.0055 0.853 151.901
06/24/92 $9.48 $9.48 0.00% 6/24/92 0.05300 $9.44 $ 8.0508 0.853 152.754
07/27/92 $9.70 $9.70 0.00% 7/27/92 0.05300 $9.66 $ 8.0960 0.838 153.592
08/31/92 $9.57 $9.57 0.00% 8/31/92 0.05300 $9.57 $ 8.1404 0.851 154.443
09/30/92 $9.53 $9.53 0.00% 9/30/92 0.05300 $9.53 $ 8.1855 0.859 155.302
10/30/92 $9.39 $9.39 0.00% 10/30/92 0.05300 $9.39 $ 8.2310 0.877 156.179
11/30/92 $9.51 $9.51 0.00% 11/30/92 0.05300 $9.51 $ 8.2775 0.870 157.049
12/31/92 $9.53 $9.53 0.00% 12/31/92 0.08533 $9.53 $13.4010 1.406 158.455
01/29/93 $9.57 $9.57 0.00% 1/29/93 0.05300 $9.57 $ 8.3981 0.878 159.333
02/26/93 $9.80 $9.80 0.00% 2/26/93 0.05300 $9.80 $ 8.4446 0.862 160.195
03/31/93 $9.68 $9.68 0.00% 3/31/93 0.05300 $9.68 $ 8.4903 0.877 161.072
<CAPTION>

5-Year 1-Year
-------------------------------------------------------------------
Month Dividend # of Shs Shares Dividend # of Shs Shares
Ended Received Reinv. O/S Received Reinv. O/S
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
10/31/89
11/30/89
12/29/89
01/31/90
02/28/90
03/30/90
04/30/90
05/31/90
06/29/90
07/31/90
08/31/90
09/28/90
10/31/90 110.254
11/30/90 $ 5.8435 0.642 110.896
12/31/90 $ 5.8775 0.652 111.548
01/31/91 $ 5.9120 0.661 112.209
02/28/91 $ 5.9471 0.664 112.873
03/22/91 $ 5.9823 0.671 113.544
04/24/91 $ 6.0178 0.666 114.210
05/24/91 $ 6.0531 0.666 114.876
06/24/91 $ 6.0884 0.673 115.549
07/25/91 $ 6.1241 0.671 116.220
08/26/91 $ 6.1597 0.670 116.890
09/24/91 $ 6.1952 0.670 117.560
10/25/91 $ 6.2307 0.671 118.231
11/25/91 $ 6.2662 0.677 118.908
12/26/91 $ 6.3021 0.671 119.579
01/27/92 $ 6.3377 0.674 120.253
02/24/92 $ 6.3734 0.684 120.937
03/25/92 $ 6.4097 0.689 121.626
04/24/92 $ 6.4462 0.689 122.315
05/22/92 $ 6.4827 0.690 123.005
06/24/92 $ 6.5193 0.691 123.696
07/27/92 $ 6.5559 0.679 124.375
08/31/92 $ 6.5919 0.689 125.064
09/30/92 $ 6.6284 0.696 125.760
10/30/92 $ 6.6653 0.710 126.470
11/30/92 $ 6.7029 0.705 127.175
12/31/92 $10.8518 1.139 128.314
01/29/93 $ 6.8006 0.711 129.025
02/26/93 $ 6.8383 0.698 129.723
03/31/93 $ 6.8753 0.710 130.433
</TABLE>
<PAGE> 4
TRANSAMERICA HIGH YIELD TAX-FREE FUND (CLASS B) - SEC TOTAL RETURN

Initial Investment: $1,000.00 HIGH YIELD TAX FREE BOND CLASS B

<TABLE>
<CAPTION>
# Since Inception NOTE: YTD includes Ex-dividend for the period Monthly Declared Div
$0.0000 $0.0474
Constant Sales Charge: N/A

10-Year
-----------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shs Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. O/S
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
04/30/93 $9.72 $9.72 0.00% 4/30/93 0.05300 $9.72 $ 8.5368 0.878 161.950
05/28/93 $9.75 $9.75 0.00% 5/28/93 0.05300 $9.75 $ 8.5834 0.880 162.830
06/30/93 $9.83 $9.83 0.00% 6/30/93 0.05100 $9.83 $ 8.3043 0.845 163.675
07/30/93 $9.80 $9.80 0.00% 7/30/93 0.05100 $9.80 $ 8.3474 0.852 164.527
08/31/93 $9.90 $9.90 0.00% 8/31/93 0.05100 $9.90 $ 8.3909 0.848 165.375
09/30/93 $9.99 $9.99 0.00% 9/30/93 0.05100 $9.99 $ 8.4341 0.844 166.219
10/29/93 $9.98 $9.98 0.00% 10/29/93 0.05100 $9.98 $ 8.4772 0.849 167.068
11/30/93 $9.91 $9.91 0.00% 11/30/93 0.05100 $9.91 $ 8.5205 0.860 167.928
12/22/93 $9.85 $9.85 0.00% 12/22/93 0.13150 $9.84 $22.0825 2.244 170.172
12/31/93 $9.85 $9.85 0.00% 12/31/93 0.05100 $9.85 $ 8.6788 0.881 171.053
01/31/94 $9.91 $9.91 0.00% 1/31/94 0.05100 $9.91 $ 8.7237 0.880 171.933
02/28/94 $9.73 $9.73 0.00% 2/28/94 0.05100 $9.73 $ 8.7686 0.901 172.834
03/31/94 $9.29 $9.29 0.00% 3/31/94 0.05100 $9.29 $ 8.8145 0.949 173.783
04/29/94 $9.28 $9.28 0.00% 4/29/94 0.05100 $9.28 $ 8.8629 0.955 174.738
05/31/94 $9.28 $9.28 0.00% 5/31/94 0.05100 $9.28 $ 8.9116 0.960 175.698
06/30/94 $9.24 $9.24 0.00% 6/30/94 0.05100 $9.24 $ 8.9606 0.970 176.668
07/29/94 $9.32 $9.32 0.00% 7/29/94 0.05100 $9.32 $ 9.0101 0.967 177.635
08/31/94 $9.27 $9.27 0.00% 8/31/94 0.05100 $9.27 $ 9.0594 0.977 178.612
09/30/94 $9.06 $9.06 0.00% 9/30/94 0.05100 $9.06 $ 9.1092 1.005 179.617
10/31/94 $8.82 $8.82 0.00% 10/31/94 0.05100 $8.82 $ 9.1605 1.039 180.656
11/30/94 $8.57 $8.57 0.00% 11/30/94 0.05100 $8.57 $ 9.2135 1.075 181.731
12/31/94 $8.69 $8.69 0.00% 12/30/94 0.05100 $8.69 $ 9.2683 1.067 182.798
01/31/95 $8.93 $8.93 0.00% 1/31/95 0.05100 $8.93 $ 9.3227 1.044 183.842
02/28/95 $9.17 $9.17 0.00% 2/28/95 0.05100 $9.17 $ 9.3759 1.022 184.864
03/31/95 $9.21 $9.21 0.00% 3/31/95 0.03941 $9.21 $ 7.2855 0.791 185.655
04/30/95 $9.26 $9.26 0.00% 4/28/95 0.04136 $9.26 $ 7.6786 0.829 186.484
05/31/95 $9.45 $9.45 0.00% 5/31/95 0.04179 $9.45 $ 7.7931 0.825 187.309
06/30/95 $9.36 $9.36 0.00% 6/29/95 0.04258 $9.35 $ 7.9764 0.853 188.162
07/31/95 $9.36 $9.36 0.00% 7/28/95 0.04209 $9.36 $ 7.9188 0.846 189.008
08/31/95 $9.45 $9.45 0.00% 8/30/95 0.04735 $9.42 $ 8.9495 0.950 189.958
09/30/95 $9.40 $9.40 0.00% 9/28/95 0.04450 $9.37 $ 8.4528 0.902 190.860
10/31/95 $9.47 $9.47 0.00% 10/30/95 0.04388 $9.46 $ 8.3749 0.885 191.745

- -----------------------------------------------------------------------------------------------------------
$9.47 191.745
- -----------------------------------------------------------------------------------------------------------
<CAPTION>

5-Year 1-Year
------------------------------------------------------------------
Month Dividend # of Shs Shares Dividend # of Shs Shares
Ended Received Reinv. O/S Received Reinv. O/S
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
04/30/93 $ 6.9129 0.711 131.144
05/28/93 $ 6.9506 0.713 131.857
06/30/93 $ 6.7247 0.684 132.541
07/30/93 $ 6.7596 0.690 133.231
08/31/93 $ 6.7948 0.686 133.917
09/30/93 $ 6.8298 0.684 134.601
10/29/93 $ 6.8647 0.688 135.289
11/30/93 $ 6.8997 0.696 135.985
12/22/93 $17.8820 1.817 137.802
12/31/93 $ 7.0279 0.713 138.515
01/31/94 $ 7.0643 0.713 139.228
02/28/94 $ 7.1006 0.730 139.958
03/31/94 $ 7.1379 0.768 140.726
04/29/94 $ 7.1770 0.773 141.499
05/31/94 $ 7.2164 0.778 142.277
06/30/94 $ 7.2561 0.785 143.062
07/29/94 $ 7.2962 0.783 143.845
08/31/94 $ 7.3361 0.791 144.636
09/30/94 $ 7.3764 0.814 145.450
10/31/94 $ 7.4180 0.841 146.291 113.379
11/30/94 $ 7.4608 0.871 147.162 $5.7823 0.675 114.054
12/31/94 $ 7.5053 0.864 148.026 $5.8168 0.669 114.723
01/31/95 $ 7.5493 0.845 148.871 $5.8509 0.655 115.378
02/28/95 $ 7.5924 0.828 149.699 $5.8843 0.642 116.020
03/31/95 $ 5.8996 0.641 150.340 $4.5723 0.496 116.516
04/30/95 $ 6.2180 0.671 151.011 $4.8190 0.520 117.036
05/31/95 $ 6.3107 0.668 151.679 $4.8909 0.518 117.554
06/30/95 $ 6.4591 0.691 152.370 $5.0059 0.535 118.089
07/31/95 $ 6.4125 0.685 153.055 $4.9698 0.531 118.620
08/31/95 $ 7.2472 0.769 153.824 $5.6167 0.596 119.216
09/30/95 $ 6.8449 0.731 154.555 $5.3049 0.566 119.782
10/31/95 $ 6.7819 0.717 155.272 $5.2560 0.556 120.338

- -----------------------------------------------------------------------------
155.272 120.338
- -----------------------------------------------------------------------------
</TABLE>

<PAGE> 5
JOHN HANCOCK HIGH YIELD BOND FUND - CLASS B
Initial Investment: $10,000
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------- ----------
Average Annual Total Return Investment Value at End of Period

CDSC CDSC
Excluding With Excluding % CDSC Ending Cumulative
CDSC CDSC CDSC CDSC Amount Value Returns

<S> <C> <C> <C> <C> <C> <C> <C>
8.01 Year Return: 8.13% 8.13% $18,696.87 0.00% $ 0.00 $18,696.87 86.97%

5 Year Return: 14.19% 13.95% $19,415.59 2.00 $200.00 $19,215.59 92.16%

1 Year Return: 7.94% 2.94% $10,793.85 5.00 $500.00 $10,293.85 2.94%
- ----------------------------------------------------------------------------------- ----------
</TABLE>
<TABLE>
<CAPTION>
N/A Accrued Dividend $0.00000
October Dividend $0.05693

<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>
Sept-95 $138.0086 19.088 2,575.750 $143.3137 19.822 2,674.763
Oct-95 $151.6859 21.038 2,596.788 $157.5168 21.847 2,696.610

<CAPTION> -------------------------------------------------------------------------
1-Year
Month Dividend # of Shares Shares $ $ Value
Ended Received Reinv. Outstanding Value W/ CDSC
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sept-95 $79.6734 11.020 1,487.000 $18,648.43 $50.00 $18,598.43
Oct-95 $87.5694 12.146 1,499.146 $18,696.87 $50.00 $18,646.87
- -------------------------------------------------------------------------------------
</TABLE>
<PAGE> 6
JOHN HANCOCK GOVERNMENT INCOME FUND - SEC TOTAL RETURN - CLASS A
- ----------------------------------------------------------------

Initial Investment: $1,000.00
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN RATE INVESTMENT VALUE AT END OF PERIOD CUMULATIVE RETURN $10,000.00
INITIAL
INVESTMENT
<S> <C> <C> <C> <C> <C>
10 Year Return: N/A 10 Year Value: $ 0.00 N/A

5 Year Return: N/A 5 Year Value: $ 0.00 N/A

1.08 Year Return: 8.15% 3 Year Value: $1,088.28 $10,882.80
Since Inception
1 Year Return: 10.13% 1 Year Value: $1,101.34 10.13%
- --------------------------------------------------------------------------------------------------------------------
<FN>
# Since Inception
NOTE: YTD includes Ex-dividend for the period Monthly Declared Div
$0.0000 $0.0583
</TABLE>

<TABLE>
Constant Sales Charge: 4.50%

10 / 94 $8.75 $9.16 4.50% 10/31/94 $0.0600 $8.75
11 / 94 $8.68 $9.09 4.50% 11/30/94 $0.0600 $8.68
12 / 94 $8.67 $9.08 4.50% 12/30/94 $0.0600 $8.67
1 / 95 $8.75 $9.16 4.50% 1/31/95 $0.0600 $8.75
2 / 95 $8.89 $9.31 4.50% 2/28/95 $0.0600 $8.89
3 / 95 $8.88 $9.30 4.50% 3/31/95 $0.0600 $8.88
4 / 95 $8.95 $9.37 4.50% 4/30/95 $0.0600 $8.95
5 / 95 $9.29 $9.73 4.50% 5/31/95 $0.0600 $9.29
6 / 95 $9.28 $9.72 4.50% 6/29/95 $0.0597 $9.26
7 / 95 $9.17 $9.60 4.50% 7/28/95 $0.0576 $9.16
8 / 95 $9.22 $9.65 4.50% 8/30/95 $0.0655 $9.20
9 / 95 $9.25 $9.69 4.50% 9/28/95 $0.0552 $9.22
10 / 95 $9.32 $9.76 4.50% 10/30/95 $0.0585 $9.31
11 / 95 $9.42 $9.86 4.50% 11/29/95 $0.0541 $9.37
12 / 95 $9.51 $9.96 4.50% 12/28/95 $0.0513 $9.49
1 / 96 $9.49 $9.94 4.50% 1/30/96 $0.0583 $9.48
- --------------------------------------------------------------------------------------------
End of Period (update for formulas above):

9.320
- --------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
Marketing
3-Year 1-Year Plot Points
- ---------------------------------------------------------------------------------- $10,000.00
Dividend # of Shares Shares Dividend # of Shares Shares Initial
Received Reinv. Outstanding Received Reinv. Outstanding Investment
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
107.875 $ 0.00
$ 0.00
$0.0000 0.000 107.875 109.170 $ 9,546.97
$6.4725 0.746 108.621 $6.5502 0.755 109.925 $ 9,428.30
$6.5173 0.752 109.373 $6.5955 0.761 110.686 $ 9,482.64
$6.5624 0.750 110.123 $6.6412 0.759 111.445 $ 9,635.76
$6.6074 0.743 110.866 $6.6867 0.752 112.197 $ 9,855.99
$6.6520 0.749 111.615 $6.7318 0.758 112.955 $ 9,911.41
$6.6969 0.748 112.363 $6.7773 0.757 113.712 $10,056.49
$6.7418 0.726 113.089 $6.8227 0.734 114.446 $10,505.97
$6.7514 0.729 113.818 $6.8324 0.738 115.184 $10,562.31
$6.5582 0.716 114.534 $6.6369 0.725 115.909 $10,502.77
$7.4997 0.815 115.349 $7.5897 0.825 116.734 $10,635.18
$6.3661 0.690 116.039 $6.4425 0.699 117.433 $10,733.61
$6.7836 0.729 116.768 $6.8651 0.737 118.170 $10,882.78
$6.3207 0.675 117.443 $6.3965 0.683 118.853 $11,063.13
$6.0190 0.634 118.077 $6.0912 0.642 119.495 $11,229.12
$6.8839 0.726 118.803 $6.9666 0.735 120.230 $11,274.40
- ----------------------------------------------------------------------------------------------
END OF PERIOD (UPDATE FOR FORMULAS ABOVE):

116.768 118.170
- ----------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 7
JOHN HANCOCK GOVERNMENT INCOME FUND - SEC TOTAL RETURN - CLASS B
Initial Investment: $1,000.00
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------- ---------------
Average Annual Total Return Investment Value at End of Period Cumulative Return $10,000.00
CDSC
Excluding With Excluding % CDSC Ending Excluding Including Initial
CDSC CDSC CDSC CDSC Amount Value CDSC CDSC Investment
---- ---- ---- ---- ------ ----- ---- ---- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7.68 Year Return: # 7.27% 7.27% $1,714.26 0.00% $ 0.00 $1,714.26 71.43% 71.43% $17,142.60

5 Year Return: 7.93% 7.64% $1,464.68 2.00% $20.00 $1,444.68 46.47% 44.47% Since inception
or 10 years
---------------

1 Year Return: 14.47% 9.47% $1,144.69 5.00% $50.00 $1,094.69 14.47% 9.47%
- -------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>

# Since Inception NOTE: YTD includes Ex-dividend for the period Monthly Declared Div
$0.0000 0.05274

Constant Sales Charge: N/A

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>
2 / 23 /88 $10.58 $10.58 N/A
2 / 88 $10.58 $10.58 N/A
3 / 88 $10.31 $10.31 N/A 3/2/88 0.17000000 $10.44 0.17000000
3 / 88 $10.31 $10.31 N/A 4/7/88 0.08500000 $10.31
4 / 88 $10.18 $10.18 N/A 5/6/88 0.08500000 $10.18
5 / 88 $10.05 $10.05 N/A 6/7/88 0.07500000 $10.05
6 / 88 $10.13 $10.13 N/A 7/7/88 0.07500000 $10.13
7 / 88 $10.02 $10.02 N/A 8/3/88 0.07500000 $10.02
8 / 88 $9.97 $9.97 N/A 9/6/88 0.07500000 $9.97
9 / 88 $9.98 $9.98 N/A 10/5/88 0.08330000 $9.98
10 / 88 $10.01 $10.01 N/A 11/3/88 0.08330000 $10.01
11 / 88 $10.05 $10.05 N/A 12/5/88 0.08330000 $10.05
12 / 88 $9.98 $9.98 N/A
1 / 89 $9.93 $9.93 N/A 1/4/89 0.08330000 $9.90
1 / 89 $9.93 $9.93 N/A 2/3/89 0.08330000 $9.93
2 / 89 $9.79 $9.79 N/A 3/3/89 0.08330000 $9.79
3 / 89 $9.76 $9.76 N/A 4/5/89 0.08330000 $9.76
4 / 89 $9.80 $9.80 N/A 5/3/89 0.08330000 $9.80
5 / 89 $9.92 $9.92 N/A 6/5/89 0.08330000 $9.92
6 / 89 $10.09 $10.09 N/A 7/6/89 0.08330000 $10.09
7 / 89 $10.15 $10.15 N/A 8/3/89 0.08330000 $10.15
8 / 89 $9.93 $9.93 N/A 9/6/89 0.08330000 $9.93
9 / 89 $9.84 $9.84 N/A 10/4/89 0.08330000 $9.84
10 / 89 $9.98 $9.98 N/A 11/3/89 0.08330000 $9.98
11 / 89 $9.99 $9.99 N/A 12/5/89 0.08330000 $9.99
12 / 89 $9.98 $9.98 N/A
1 / 90 $9.60 $9.60 N/A 1/4/90 0.08330000 $9.90
1 / 90 $9.60 $9.60 N/A 2/5/90 0.08330000 $9.60
2 / 90 $9.52 $9.52 N/A 3/5/90 0.08330000 $9.52
3 / 90 $9.41 $9.41 N/A 4/4/90 0.08330000 $9.41
4 / 90 $9.18 $9.18 N/A 5/3/90 0.08330000 $9.18
5 / 90 $9.41 $9.41 N/A 6/5/90 0.07500000 $9.41
6 / 90 $9.53 $9.53 N/A 7/5/90 0.07500000 $9.53

10-Year 5-Year 1-Year

</TABLE>
<PAGE> 8
JOHN HANCOCK GOVERNMENT INCOME FUND - SEC TOTAL RETURN - CLASS B
Initial Investment: $1,000.00
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------- ---------------
Average Annual Total Return Investment Value at End of Period Cumulative Return $10,000.00
CDSC
Excluding With Excluding % CDSC Ending Excluding Including Initial
CDSC CDSC CDSC CDSC Amount Value CDSC CDSC Investment
---- ---- ---- ---- ------ ----- ---- ---- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7.68 Year Return: # 7.27% 7.27% $1,714.26 0.00% $0.00 $1,714.26 71.43% 71.43% $17,142.60

5 Year Return: 7.93% 7.64% $1,464.68 2.00% $20.00 $1,444.68 46.47% 44.47% Since inception
or 10 years
---------------

# Since Inception NOTE: YTD includes Ex-dividend for the period Monthly Declared Div
$0.0000 0.05274

Constant Sales Charge: N/A

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>
7 / 90 $9.61 $9.61 N/A 8/3/90 0.07500000 $9.61
8 / 90 $9.29 $9.29 N/A 9/5/90 0.07500000 $9.29
9 / 90 $9.30 $9.30 N/A 10/3/90 0.07500000 $9.30
10 / 90 $9.37 $9.37 N/A 11/5/90 0.07500000 $9.37
11 / 90 $9.56 $9.56 N/A 12/5/90 0.07500000 $9.56
12 / 90 $9.67 $9.67 N/A 1/8/91 0.07500000 $9.67 0.06790000
1 / 91 $9.70 $9.70 N/A 2/5/91 0.07500000 $9.70
2 / 91 $9.68 $9.68 N/A 3/5/91 0.07500000 $9.68
3 / 91 $9.62 $9.62 N/A 3/28/91 0.07500000 $9.54
4 / 91 $9.66 $9.66 N/A 4/30/91 0.07100000 $9.63
5 / 91 $9.56 $9.56 N/A 5/31/91 0.07100000 $9.52
6 / 91 $9.43 $9.43 N/A 6/28/91 0.07100000 $9.37
7 / 91 $9.50 $9.50 N/A 7/31/91 0.07100000 $9.46
8 / 91 $9.67 $9.67 N/A 8/30/91 0.07100000 $9.61
9 / 91 $9.83 $9.83 N/A 9/30/91 0.07100000 $9.77
10 / 91 $9.79 $9.79 N/A 10/31/91 0.07100000 $9.68
11 / 91 $9.76 $9.76 N/A 11/29/91 0.07100000 $9.73
12 / 91 $10.09 $10.09 N/A 12/31/91 0.07100000 $10.02
1 / 92 $9.81 $9.81 N/A 1/31/92 0.07100000 $9.84
2 / 92 $9.75 $9.75 N/A 2/28/92 0.06500000 $9.60
3 / 92 $9.57 $9.57 N/A 3/31/92 0.06500000 $9.57
4 / 92 $9.51 $9.51 N/A 4/30/92 0.06500000 $9.52
5 / 92 $9.67 $9.67 N/A 5/29/92 0.06500000 $9.65
6 / 92 $9.78 $9.78 N/A 6/30/92 0.06500000 $9.72
7 / 92 $10.05 $10.05 N/A 7/31/92 0.06500000 $10.05
8 / 92 $10.05 $10.05 N/A 8/31/92 0.06250000 $10.05
9 / 92 $10.08 $10.08 N/A 9/30/92 0.06250000 $10.08
10 / 92 $9.83 $9.83 N/A 10/30/92 0.06250000 $9.83
11 / 92 $9.72 $9.72 N/A 11/30/92 0.06250000 $9.72
12 / 92 $9.82 $9.82 N/A 12/31/92 0.06250000 $9.82
1 / 93 $9.89 $9.89 N/A 1/29/93 0.06250000 $9.89
2 / 93 $9.97 $9.97 N/A 2/26/93 0.06250000 $9.97
3 / 93 $9.94 $9.94 N/A 3/31/93 0.05900000 $9.94
4 / 93 $9.91 $9.91 N/A 4/30/93 0.05900000 $9.91

10-Year 5-Year 1-Year

</TABLE>
<PAGE> 9
JOHN HANCOCK GOVERNMENT INCOME FUND - SEC TOTAL RETURN - CLASS B
Initial Investment: $1,000.00
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------- ---------------
Average Annual Total Return Investment Value at End of Period Cumulative Return $10,000.00
CDSC
Excluding With Excluding % CDSC Ending Excluding Including Initial
CDSC CDSC CDSC CDSC Amount Value CDSC CDSC Investment
---- ---- ---- ---- ------ ----- ---- ---- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7.68 Year Return: # 7.27% 7.27% $1,714.26 0.00% $ 0.00 $1,714.26 71.43% 71.43% $17,142.60

5 Year Return: 7.93% 7.64% $1,464.68 2.00% $20.00 $1,444.68 46.47% 44.47% Since inception
or 10 years
---------------

# Since Inception NOTE: YTD includes Ex-dividend for the period Monthly Declared Div
$0.0000 0.05274

Constant Sales Charge: N/A

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>
5 / 93 $9.82 $9.82 N/A 5/28/93 0.05900000 $9.82
6 / 93 $9.94 $9.94 N/A 6/30/93 0.05900000 $9.94
7 / 93 $9.94 $9.94 N/A 7/30/93 0.05900000 $9.94
8 / 93 $10.11 $10.11 N/A 8/31/93 0.05900000 $10.11
9 / 93 $10.06 $10.06 N/A 9/30/93 0.05600000 $10.06
10 / 93 $10.05 $10.05 N/A 10/29/93 0.05600000 $10.05
11 / 93 $9.86 $9.86 N/A 11/30/93 0.05600000 $9.86
12 / 93 $9.84 $9.84 N/A 12/31/93 0.01130000 $9.88 0.01130000
12 / 93 $9.84 $9.84 N/A 12/31/93 0.05600000 $9.84
1 / 94 $9.95 $9.95 N/A 1/31/94 0.05600000 $9.95
2 / 94 $9.64 $9.64 N/A 2/28/94 0.05600000 $9.64
3 / 94 $9.33 $9.33 N/A 3/31/94 0.05600000 $9.33
4 / 94 $9.18 $9.18 N/A 4/29/94 0.05450000 $9.18
5 / 94 $9.08 $9.08 N/A 5/31/94 0.05450000 $9.08
6 / 94 $8.99 $8.99 N/A 6/30/94 0.05450000 $8.99
7 / 94 $9.08 $9.08 N/A 7/29/94 0.05450000 $9.08
8 / 94 $9.01 $9.01 N/A 8/31/94 0.05450000 $9.01
9 / 94 $8.85 $8.85 N/A 9/30/94 0.05450000 $8.85
10 / 94 $8.75 $8.75 N/A 10/31/94 0.05450000 $8.75
11 / 94 $8.68 $8.68 N/A 11/30/94 0.05450000 $8.68
12 / 94 $8.67 $8.67 N/A 12/30/94 0.05450000 $8.67
1 / 95 $8.75 $8.75 N/A 1/31/95 0.05450000 $8.75
2 / 95 $8.89 $8.89 N/A 2/28/95 0.05450000 $8.89
3 / 95 $8.88 $8.88 N/A 3/31/95 0.05450000 $8.88
4 / 95 $8.95 $8.95 N/A 4/30/95 0.05450000 $8.95
5 / 95 $9.29 $9.29 N/A 5/31/95 0.05450000 $9.29
6 / 95 $9.28 $9.28 N/A 6/29/95 0.05415000 $9.26
7 / 95 $9.18 $9.18 N/A 7/28/95 0.05315000 $9.16
8 / 95 $9.23 $9.23 N/A 8/30/95 0.05970000 $9.21
9 / 95 $9.26 $9.26 N/A 9/28/95 0.05004000 $9.22
10 / 95 $9.32 $9.32 N/A 9/28/95 0.05270000 $9.31

10-Year 5-Year 1-Year

-----------------------------------------------------------------------------------------------------------------
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>
5 / 93 $9.0739 0.924 154.719 $7.7529 0.790 132.195
6 / 93 $9.1284 0.918 155.637 $7.7995 0.785 132.980
7 / 93 $9.1826 0.924 156.561 $7.8458 0.789 133.769
8 / 93 $9.2371 0.914 157.475 $7.8924 0.781 134.550
9 / 93 $8.8186 0.877 158.352 $7.5348 0.749 135.299
10 / 93 $8.8677 0.882 159.234 $7.5767 0.754 136.053
11 / 93 $8.9171 0.904 160.138 $7.6190 0.773 136.826
12 / 93 $1.8096 0.183 160.321 $1.5461 0.156 136.982
12 / 93 $8.9780 0.912 161.233 $7.6710 0.780 137.762
1 / 94 $9.0290 0.907 162.140 $7.7147 0.775 138.537
2 / 94 $9.0798 0.942 163.082 $7.7581 0.805 139.342
3 / 94 $9.1326 0.979 164.061 $7.8032 0.836 140.178
4 / 94 $8.9413 0.974 165.035 $7.6397 0.832 141.010
5 / 94 $8.9944 0.991 166.026 $7.6850 0.846 141.856
6 / 94 $9.0484 1.006 167.032 $7.7312 0.860 142.716
7 / 94 $9.1032 1.003 168.035 $7.7780 0.857 143.573
8 / 94 $9.1579 1.016 169.051 $7.8247 0.868 144.441
9 / 94 $9.2133 1.041 170.092 $7.8720 0.889 145.330
10 / 94 $9.2700 1.059 171.151 $7.9205 0.905 146.235 114.286
11 / 94 $9.3277 1.075 172.226 $7.9698 0.918 147.153 $6.2286 0.718 115.004
12 / 94 $9.3863 1.083 173.309 $8.0198 0.925 148.078 $6.2677 0.723 115.727
1 / 95 $9.4453 1.079 174.388 $8.0703 0.922 149.000 $6.3071 0.721 116.448
2 / 95 $9.5041 1.069 175.457 $8.1205 0.913 149.913 $6.3464 0.714 117.162
3 / 95 $9.5624 1.077 176.534 $8.1703 0.920 150.833 $6.3853 0.719 117.881
4 / 95 $9.6211 1.075 177.609 $8.2204 0.918 151.751 $6.4245 0.718 118.599
5 / 95 $9.6797 1.042 178.651 $8.2704 0.890 152.641 $6.4636 0.696 119.295
6 / 95 $9.6740 1.045 179.696 $8.2655 0.893 153.534 $6.4598 0.698 119.993
7 / 95 $9.5508 1.043 180.739 $8.1603 0.891 154.425 $6.3776 0.696 120.689
8 / 95 $10.7901 1.172 181.911 $9.2192 1.001 155.426 $7.2051 0.782 121.471
9 / 95 $9.1028 0.987 182.898 $7.7775 0.844 156.270 $6.0784 0.659 122.130
10 / 95 $9.6387 1.035 183.933 $8.2354 0.885 157.155 $6.4363 0.691 122.821
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 10
JOHN HANCOCK GOVERNMENT INCOME FUND - SEC TOTAL RETURN - CLASS B
Initial Investment: $1,000.00
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------- ----------------
Average Annual Total Return Investment Value at End of Period Cumulative Return $10,000.00
CDSC
Excluding With Excluding % CDSC Ending Excluding Including Initial
CDSC CDSC CDSC CDSC Amount Value CDSC CDSC Investment
---- ---- ---- ---- ------ ----- ---- ---- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7.68 Year Return: # 7.27% 7.27% $1,714.26 0.00% $ 0.00 $1,714.26 71.43% 71.43% $17,142.60

5 Year Return: 7.93% 7.64% $1,464.68 2.00% $20.00 $1,444.68 46.47% 44.47% Since inception
or 10 years
------------------

# Since Inception NOTE: YTD includes Ex-dividend for the period Monthly Declared Div
$0.0000 0.05274

Constant Sales Charge: N/A

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>
9.320
- ----------------------------------------------------------------------------------------------------
<CAPTION>

10-Year 5-Year 1-Year

----------------------------------------------------------------------------------------------------------------
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>
183.933 157.155 122.821
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE> 11
Initial Investment: $1,000.00 TRANSAMERICA GLOBAL RESOURCES - CLASS A

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------- --------------------
Average Annual Total Return Investment Value at End of Period
<S> <C> <C> <C> <C>
10 Year Return: N/A 10 Year Value: N/A

5 Year Return: N/A 5 Year Value: N/A

1.38 Year Return: -7.87% 3 Year Value: $893.42 Cumm Return YTD

1 Year Return: -14.84% 1 Year Value: $851.58 -14.84%

- ------------------------------------------------------------------------------------- ---------------------

</TABLE>

<TABLE>
<CAPTION>
Constant Sales Charge: 5.00%
10-Year
-----------
Capital
Month Offering Sales Ex-Div Dividend Reinv. Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Info Received Reinv. Outstanding
- -------- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
06/15/94 $14.89 $15.67 5.00%

06/94 $14.60 $15.37 5.00%
07/94 $15.04 $15.83 5.00%
08/94 $15.53 $16.35 5.00%
09/94 $15.84 $16.67 5.00%
10/94 $15.62 $16.44 5.00%
11/94 $14.65 $15.42 5.00%
12/94 $14.32 $15.07 5.00%
01/95 $13.42 $14.13 5.00%
02/95 $13.31 $14.01 5.00%
03/95 $13.87 $14.60 5.00%
04/95 $14.49 $15.25 5.00%
05/95 $14.65 $15.42 5.00%
06/95 $15.16 $15.96 5.00%
07/95 $15.35 $16.16 5.00%
08/95 $15.35 $16.16 5.00%
09/95 $15.25 $16.05 5.00%
10/95 $14.00 $14.74 5.00%
End of Period (update for formulas above):

$14.00
- ----------------------------------------------------------------------------------------------------------------------
<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>
06/15/94 63.816

06/94 $0.0000 0.000 63.816
07/94 $0.0000 0.000 63.816
08/94 $0.0000 0.000 63.816
09/94 $0.0000 0.000 63.816
10/94 $0.0000 0.000 63.816
11/94 $0.0000 0.000 63.816
12/94 $0.0000 0.000 63.816
01/95 $0.0000 0.000 63.816
02/95 $0.0000 0.000 63.816
03/95 $0.0000 0.000 63.816
04/95 $0.0000 0.000 63.816
05/95 $0.0000 0.000 63.816
06/95 $0.0000 0.000 63.816
07/95 $0.0000 0.000 63.816
08/95 $0.0000 0.000 63.816
09/95 $0.0000 0.000 63.816
10/95 $0.0000 0.000 63.816
End of Period (update for formulas above):
$63.816
- ----------------------------------------------------------------------------------------------------------------------

<CAPTION>
1-Year
-----------
Month Dividend # of Shares Shares Dividend
Ended Received Reinv. Outstanding Received $ Value
- -------- ---------------------------------------------------------
<S> <C> <C> <C> <C> <C>
06/15/94 $0.00

06/94 $0.00
07/94 $0.00
08/94 $0.00
09/94 $0.00
10/94 60.827 $9,501.18
11/94 0.000 60.827 $8,911.16
12/94 $0.0000 0.000 60.827 $8,710.43
01/95 $0.0000 0.000 60.827 $0.0000 $8,162.98
02/95 $0.0000 0.000 60.827 $0.0000 $8,096.07
03/95 $0.0000 0.000 60.827 $0.0000 $8,436.70
04/95 $0.0000 0.000 60.827 $0.0000 $8,813.83
05/95 $0.0000 0.000 60.827 $0.0000 $8,911.16
06/95 $0.0000 0.000 60.827 $0.0000 $9,221.37
07/95 $0.0000 0.000 60.827 $0.0000 $9,336.94
08/95 $0.0000 0.000 60.827 $0.0000 $9,336.94
09/95 $0.0000 0.000 60.827 $0.0000 $9,276.12
10/95 $0.0000 0.000 60.827 $0.0000 $8,515.78
End of Period (update for formulas above):
60.827
- ----------------------------------------------------------------------------
</TABLE>
<PAGE> 12
Initial Investment $1,000.00 TRANSAMERICA GLOBAL RESOURCES - CLASS B

CDSC
Excluding With Excluding % CDSC Ending
CDSC CDSC CDSC CDSC Amount Value Cumulative cdsc
<S> <C> <C> <C> <C> <C> <C> <C> <C>
8.01 Year Return: 7.39% 7.39% $1,770.24 0.00% $0.00 $1,770.24 77.02% 77.02%

5 Year Return: 4.77% 4.43% $1,262.29 2.00% $20.00 $1,242.29 26.23% 24.23%

1 Year Return: -11.04% -15.49% $889.60 5.00% $44.48 $845.12 -11.04% -15.49%

- -------------------------------------------------------------------------------------------------------------------------
</TABLE>

10 / 87 $8.91 $8.91 N/A $0.0000 0.000 114.811
11 / 87 $8.85 $8.85 N/A $0.0000 0.000 114.811
12 / 87 $9.08 $9.08 N/A $0.0000 0.000 114.811
1 / 88 $9.06 $9.06 N/A $0.0000 0.000 114.811
2 / 88 $9.44 $9.44 N/A $0.0000 0.000 114.811
3 / 88 $9.75 $9.75 N/A $0.0000 0.000 114.811
4 / 88 $9.90 $9.90 N/A $0.0000 0.000 114.811
5 / 88 $9.69 $9.69 N/A $0.0000 0.000 114.811
6 / 88 $10.16 $10.16 N/A $0.0000 0.000 114.811
7 / 88 $10.21 $10.21 N/A $0.0000 0.000 114.811
8 / 88 $10.21 $10.21 N/A $0.0000 0.000 114.811
9 / 88 $10.36 $10.36 N/A $0.0000 0.000 114.811
10 / 88 $10.29 $10.29 N/A $0.0000 0.000 114.811
11 / 88 $10.20 $10.20 N/A $0.0000 0.000 114.811
12 / 88 $10.17 $10.17 N/A 12/23/88 $0.1800 $10.10 $0.1800 $20.6660 2.046 116.857
1 / 89 $10.68 $10.68 N/A $0.0000 0.000 116.857
2 / 89 $10.75 $10.75 N/A $0.0000 0.000 116.857
3 / 89 $10.93 $10.93 N/A $0.0000 0.000 116.857
4 / 89 $11.49 $11.49 N/A $0.0000 0.000 116.857
5 / 89 $11.80 $11.80 N/A $0.0000 0.000 116.857
6 / 89 $11.61 $11.61 N/A $0.0000 0.000 116.857
7 / 89 $12.17 $12.17 N/A $0.0000 0.000 116.857
8 / 89 $12.73 $12.73 N/A $0.0000 0.000 116.857
9 / 89 $12.43 $12.43 N/A $0.0000 0.000 116.857
10 / 89 $11.99 $11.99 N/A $0.0000 0.000 116.857
11 / 89 $12.56 $12.56 N/A $0.0000 0.000 116.857
12 / 89 $12.85 $12.85 N/A 12/20/89 $0.4710 $12.64 $0.4710 $55.0396 4.354 121.211
1 / 90 $12.08 $12.08 N/A $0.0000 0.000 121.211
2 / 90 $12.38 $12.38 N/A $0.0000 0.000 121.211
3 / 90 $12.79 $12.79 N/A $0.0000 0.000 121.211
4 / 90 $12.28 $12.28 N/A $0.0000 0.000 121.211
5 / 90 $12.94 $12.94 N/A $0.0000 0.000 121.211
6 / 90 $13.04 $13.04 N/A $0.0000 0.000 121.211
7 / 90 $13.15 $13.15 N/A $0.0000 0.000 121.211
8 / 90 $12.36 $12.36 N/A $0.0000 0.000 121.211
9 / 90 $12.47 $12.47 N/A $0.0000 0.000 121.211
10 / 90 $11.57 $11.57 N/A $0.0000 0.000 121.211
11 / 90 $11.40 $11.40 N/A $0.0000 0.000 121.211
12 / 90 $10.48 $10.48 N/A 12/21/90 $0.4350 $10.52 $0.4350 $52.7268 5.012 126.223
1 / 91 $10.48 $10.48 N/A $0.0000 0.000 126.223
2 / 91 $11.68 $11.68 N/A $0.0000 0.000 126.223
3 / 91 $11.78 $11.78 N/A $0.0000 0.000 126.223

<CAPTION>
5-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>
10/26/ 87

10 / 87
11 / 87
12 / 87
1 / 88
2 / 88
3 / 88
4 / 88
5 / 88
6 / 88
7 / 88
8 / 88
9 / 88
10 / 88
11 / 88
12 / 88
1 / 89
2 / 89
3 / 89
4 / 89
5 / 89
6 / 89
7 / 89
8 / 89
9 / 89
10 / 89
11 / 89
12 / 89
1 / 90
2 / 90
3 / 90
4 / 90
5 / 90
6 / 90
7 / 90
8 / 90
9 / 90
10 / 90 86.430
11 / 90 $0.0000 0.000 86.430
12 / 90 $37.5971 3.574 90.004
1 / 91 $0.0000 0.000 90.004
2 / 91 $0.0000 0.000 90.004
3 / 91 $0.0000 0.000 90.004
</TABLE>
<PAGE> 13
Initial Investment $1,000.00 TRANSAMERICA GLOBAL RESOURCES - CLASS B

5 Year Return: 4.77% 4.43% $1,262.29 2.00% $20.00 $1,242.29 26.23% 24.23%

1 Year Return: -11.04% -15.49% $889.60 5.00% $44.48 $845.12 -11.04% -15.49%

- -------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
Constant Sales Charge: N/A
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>
4 / 91 $11.90 $11.90 N/A $0.0000 0.000 126.223
5 / 91 $12.39 $12.39 N/A $0.0000 0.000 126.223
6 / 91 $11.83 $11.83 N/A $0.0000 0.000 126.223
7 / 91 $11.44 $11.44 N/A $0.0000 0.000 126.223
8 / 91 $11.93 $11.93 N/A $0.0000 0.000 126.223
9 / 91 $11.73 $11.73 N/A $0.0000 0.000 126.223
10 / 91 $12.20 $12.20 N/A $0.0000 0.000 126.223
11 / 91 $11.53 $11.53 N/A $0.0000 0.000 126.223
12 / 91 $11.82 $11.82 N/A 12/20/91 $0.1330 $11.19 $0.1330 $16.7877 1.500 127.723
1 / 92 $12.32 $12.32 N/A $0.0000 0.000 127.723
2 / 92 $12.71 $12.71 N/A $0.0000 0.000 127.723
3 / 92 $12.47 $12.47 N/A $0.0000 0.000 127.723
4 / 92 $12.46 $12.46 N/A $0.0000 0.000 127.723
5 / 92 $12.58 $12.58 N/A $0.0000 0.000 127.723
6 / 92 $11.89 $11.89 N/A $0.0000 0.000 127.723
7 / 92 $12.28 $12.28 N/A $0.0000 0.000 127.723
8 / 92 $12.29 $12.29 N/A $0.0000 0.000 127.723
9 / 92 $12.38 $12.38 N/A $0.0000 0.000 127.723
10 / 92 $12.41 $12.41 N/A $0.0000 0.000 127.723
11 / 92 $12.51 $12.51 N/A $0.0000 0.000 127.723
12 / 92 $12.74 $12.74 N/A $0.0000 0.000 127.723
1 / 93 $13.00 $13.00 N/A $0.0000 0.000 127.723
2 / 93 $13.10 $13.10 N/A $0.0000 0.000 127.723
3 / 93 $13.95 $13.95 N/A $0.0000 0.000 127.723
4 / 93 $14.23 $14.23 N/A $0.0000 0.000 127.723
5 / 93 $14.81 $14.81 N/A $0.0000 0.000 127.723
6 / 93 $14.69 $14.69 N/A $0.0000 0.000 127.723
7 / 93 $14.84 $14.84 N/A $0.0000 0.000 127.723
8 / 93 $15.46 $15.46 N/A $0.0000 0.000 127.723
9 / 93 $15.33 $15.33 N/A $0.0000 0.000 127.723
10 / 93 $15.69 $15.69 N/A $0.0000 0.000 127.723
11 / 93 $14.99 $14.99 N/A $0.0000 0.000 127.723
12 / 93 $15.78 $15.78 N/A $0.0000 0.000 127.723
1 / 94 $16.66 $16.66 N/A $0.0000 0.000 127.723
2 / 94 $16.07 $16.07 N/A $0.0000 0.000 127.723
3 / 94 $14.80 $14.80 N/A $0.0000 0.000 127.723
4 / 94 $14.85 $14.85 N/A $0.0000 0.000 127.723
5 / 94 $14.84 $14.84 N/A $0.0000 0.000 127.723
6 / 94 $14.59 $14.59 N/A $0.0000 0.000 127.723
7 / 94 $15.02 $15.02 N/A $0.0000 0.000 127.723
8 / 94 $15.51 $15.51 N/A $0.0000 0.000 127.723
9 / 94 $15.80 $15.80 N/A $0.0000 0.000 127.723
10 / 94 $15.58 $15.58 N/A $0.0000 0.000 127.723
11 / 94 $14.60 $14.60 N/A $0.0000 0.000 127.723

<CAPTION>
5-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>
4 / 91 $0.0000 0.000 90.004
5 / 91 $0.0000 0.000 90.004
6 / 91 $0.0000 0.000 90.004
7 / 91 $0.0000 0.000 90.004
8 / 91 $0.0000 0.000 90.004
9 / 91 $0.0000 0.000 90.004
10 / 91 $0.0000 0.000 90.004
11 / 91 $0.0000 0.000 90.004
12 / 91 $11.9705 1.070 91.074
1 / 92 $0.0000 0.000 91.074
2 / 92 $0.0000 0.000 91.074
3 / 92 $0.0000 0.000 91.074
4 / 92 $0.0000 0.000 91.074
5 / 92 $0.0000 0.000 91.074
6 / 92 $0.0000 0.000 91.074
7 / 92 $0.0000 0.000 91.074
8 / 92 $0.0000 0.000 91.074
9 / 92 $0.0000 0.000 91.074
10 / 92 $0.0000 0.000 91.074
11 / 92 $0.0000 0.000 91.074
12 / 92 $0.0000 0.000 91.074
1 / 93 $0.0000 0.000 91.074
2 / 93 $0.0000 0.000 91.074
3 / 93 $0.0000 0.000 91.074
4 / 93 $0.0000 0.000 91.074
5 / 93 $0.0000 0.000 91.074
6 / 93 $0.0000 0.000 91.074
7 / 93 $0.0000 0.000 91.074
8 / 93 $0.0000 0.000 91.074
9 / 93 $0.0000 0.000 91.074
10 / 93 $0.0000 0.000 91.074
11 / 93 $0.0000 0.000 91.074
12 / 93 $0.0000 0.000 91.074
1 / 94 $0.0000 0.000 91.074
2 / 94 $0.0000 0.000 91.074
3 / 94 $0.0000 0.000 91.074
4 / 94 $0.0000 0.000 91.074
5 / 94 $0.0000 0.000 91.074
6 / 94 $0.0000 0.000 91.074
7 / 94 $0.0000 0.000 91.074
8 / 94 $0.0000 0.000 91.074
9 / 94 $0.0000 0.000 91.074
10 / 94 $0.0000 0.000 91.074 64.185
11 / 94 $0.0000 0.000 91.074 $0.0000 0.000 64.185
</TABLE>
<PAGE> 14
Initial Investment $1,000.00 TRANSAMERICA GLOBAL RESOURCES - CLASS B

5 Year Return: 4.77% 4.43% $1,262.29 2.00% $20.00 $1,242.29 26.23% 24.23%

1 Year Return: -11.04% -15.49% $889.60 5.00% $44.48 $845.12 -11.04% -15.49%

- -------------------------------------------------------------------------------------------------------------------------
</TABLE>

DETAIL INFORMATION: INCOME,EXPENSES,SHARES OUTSTANDING & MAX OFFERING PRICE

<CAPTION>
DAY DATE INCOME EXPENSES SHARES MAX OFFERING PRICE YIELD

<S> <C> <C> <C> <C> <C> <C>
01 10/02/95 88,466.3968 13,903.59 51,415,562.983
02 10/03/95 88,181.8006 13,897.53 51,343,569.036
03 10/04/95 88,352.9513 13,912.66 51,305,630.043
04 10/05/95 88,183.1709 13,916.11 51,277,853.775
05 10/06/95 88,122.2160 13,920.77 51,249,525.967
06 10/07/95 88,122.2160 13,917.56 51,249,525.967
07 10/08/95 88,122.2160 13,917.56 51,249,525.967
08 10/09/95 88,024.5565 13,917.56 51,201,245.822
09 10/10/95 88,237.0744 13,894.42 51,156,133.851
10 10/11/95 87,956.6318 13,878.06 51,112,993.108
11 10/12/95 87,750.7211 13,850.35 51,036,854.208
12 10/13/95 87,407.3639 13,852.40 50,963,491.765
13 10/14/95 87,407.3639 13,911.76 50,963,461.765
14 10/15/95 87,407.3639 13,911.76 50,963,461.765
15 10/16/95 86,900.9123 13,911.76 50,923,746.538
16 10/17/95 87,301.7316 13,889.04 50,893,269.853
17 10/18/95 87,718.2782 13,878.47 50,739,070.253
18 10/19/95 87,375.9927 13,826.37 50,718,074.012
19 10/20/95 88,031.7632 13,819.35 50,651,371.394
20 10/21/95 88,031.7632 13,764.98 50,651,371.394
21 10/22/95 88,031.7632 13,764.98 50,651,371.394
22 10/23/95 87,389.7530 13,764.98 50,628,055.349
23 10/24/95 87,242.8988 16,703.13 50,586,778.472
24 10/25/95 87,200.5189 16,703.13 50,559,861.633
25 10/26/95 87,292.1183 16,726.96 50,495,853.604
26 10/27/95 87,472.6599 16,667.00 50,459,749.535
27 10/28/95 87,472.6599 16,658.68 50,459,749.535
28 10/29/95 87,472.6599 16,658.68 50,459,749.535
29 10/30/95 87,440.4391 16,658.68 50,415,752.584
30 10/31/95 86,458.1344 16,651.53 50,522,916.675

TOTAL: 2,630,576.0897 438,649.81 1,526,305,577.782 9.76 5.35589%

AVERAGE SHARES: 50,876,852.593

</TABLE>
<PAGE> 16
<TABLE>
FUND# 99939 11/1/95
JH GOVT. INC CL B DAILY SUMMARY AND DETAIL REPORT

DETAIL INFORMATION: INCOME,EXPENSES,SHARES OUTSTANDING & MAX OFFERING PRICE
<CAPTION>
DAY DATE INCOME EXPENSES SHARES MAX OFFERING PRICE YIELD

<S> <C> <C> <C> <C> <C> <C>
01 10/02/95 42,271.6121 11,013.63 24,575,311.124
02 10/03/95 42,207.9910 11,018.52 24,562,177.714
03 10/04/95 42,180.9871 11,016.34 24,480,805.691
04 10/05/95 42,101.8296 11,007.40 24,468,678.337
05 10/06/95 42,088.4573 11,015.16 24,464,314.100
06 10/07/95 42,088.4573 11,018.97 24,464,314.100
07 10/08/95 42,088.4573 11,018.97 24,464,314.100
08 10/09/95 42,066.8415 11,018.97 24,455,796.023
09 10/10/95 42,184.6430 11,002.12 24,443,786.390
10 10/11/95 42,035.7256 10,990.61 24,414,523.033
11 10/12/95 41,910.6844 10,962.67 24,362,663.235
12 10/13/95 41,774.8010 10,970.52 24,344,041.559
13 10/14/95 41,774.8010 11,020.55 24,344,041.559
14 10/15/95 41,774.8010 11,020.55 24,344,041.559
15 10/16/95 41,538.8700 11,020.55 24,328,656.044
16 10/17/95 41,742.1501 11,005.62 24,320,892.378
17 10/18/95 42,045.9776 11,012.84 24,307,743.191
18 10/19/95 41,891.2506 10,982.89 24,303,058.977
19 10/20/95 42,322.5707 10,995.33 24,338,340.713
20 10/21/95 42,322.5707 10,969.96 24,338,340.713
21 10/22/95 42,322.5707 10,969.96 24,338,340.713
22 10/23/95 42,035.1440 10,969.96 24,339,390.047
23 10/24/95 41,967.7916 12,379.02 24,321,457.584
24 10/25/95 41,950.6602 12,379.02 24,310,411.099
25 10/26/95 41,998.0799 12,399.44 24,281,577.591
26 10/27/95 42,124.2541 12,364.00 24,286,873.220
27 10/28/95 42,124.2541 12,365.35 24,286,873.220
28 10/29/95 42,124.2541 12,365.35 24,286,873.220
29 10/30/95 42,141.2943 12,365.35 24,284,434.715
30 10/31/95 41,682.0825 12,364.48 24,344,381.555

TOTAL: 1,260,883.8644 341,004.10 731,206,453.504 9.32 4.90880%

AVERAGE SHARES: 24,373,548.450
</TABLE>
<PAGE> 17
<TABLE>
FUND# 99918 11/1/95
JH HIGH YLD TF CL A DAILY SUMMARY AND DETAIL REPORT

DETAIL INFORMATION: INCOME,EXPENSES,SHARES OUTSTANDING & MAX OFFERING PRICE
<CAPTION>
DAY DATE INCOME EXPENSES SHARES MAX OFFERING PRICE YIELD
<S> <C> <C> <C> <C> <C> <C>
01 10/02/95 2,841.7266 369.74 1,477,313.809
02 10/03/95 2,849.8422 512.43 1,476,972.054
03 10/04/95 2,847.5215 794.46 1,476,974.589
04 10/05/95 2,841.6972 512.75 1,476,785.571
05 10/06/95 2,866.6726 515.16 1,482,108.769
06 10/07/95 2,866.6726 515.80 1,482,108.769
07 10/08/95 2,866.6726 515.80 1,482,108.769
08 10/09/95 2,856.7734 515.80 1,483,323.411
09 10/10/95 2,853.8869 515.66 1,482,792.625
10 10/11/95 2,857.5729 516.54 1,483,986.310
11 10/12/95 2,860.7410 517.94 1,487,025.714
12 10/13/95 2,853.3280 518.77 1,487,511.171
13 10/14/95 2,853.3280 521.14 1,487,511.171
14 10/15/95 2,853.3280 521.14 1,487,511.171
15 10/16/95 2,856.1012 521.14 1,488,657.700
16 10/17/95 2,865.2575 521.97 1,493,711.765
17 10/18/95 2,864.9731 522.25 1,492,139.246
18 10/19/95 2,859.0919 521.57 1,488,978.024
19 10/20/95 2,860.7301 520.44 1,488,304.515
20 10/21/95 2,860.7301 521.29 1,488,304.515
21 10/22/95 2,860.7301 521.29 1,488,304.515
22 10/23/95 2,875.5136 521.29 1,492,760.160
23 10/24/95 2,873.5193 520.58 1,492,442.700
24 10/25/95 2,870.7262 521.19 1,492,442.700
25 10/26/95 2,887.6324 523.37 1,498,473.726
26 10/27/95 2,889.9982 522.66 1,499,032.648
27 10/28/95 2,889.9982 522.30 1,499,032.648
28 10/29/95 2,889.9982 522.30 1,499,032.648
29 10/30/95 2,891.9972 522.30 1,498,632.946
30 10/31/95 2,879.2072 522.32 1,502,041.651

TOTAL: 85,945.9680 15,711.39 44,656,326.010 9.92 5.77597%

AVERAGE SHARES: 1,488,544.200
</TABLE>
<PAGE> 18
<TABLE>
FUND# 99919 11/1/95
JH HIGH YLD TF CL B DAILY SUMMARY AND DETAIL REPORT

DETAIL INFORMATION: INCOME,EXPENSES,SHARES OUTSTANDING & MAX OFFERING PRICE
<CAPTION>
DAY DATE INCOME EXPENSES SHARES MAX OFFERING PRICE YIELD
<S> <C> <C> <C> <C> <C> <C>
01 10/02/95 31,551.7852 7,064.29 16,398,722.083
02 10/03/95 31,666.2760 8,658.45 16,407,568.432
03 10/04/95 31,637.2332 11,784.99 16,405,925.615
04 10/05/95 31,571.0508 8,654.69 16,403,062.795
05 10/06/95 31,704.7406 8,665.73 16,387,856.357
06 10/07/95 31,704.7406 8,665.98 16,387,856.357
07 10/08/95 31,704.7406 8,665.98 16,387,856.357
08 10/09/95 31,551.2950 8,665.98 16,378,467.837
09 10/10/95 31,529.7787 8,663.61 16,377,990.112
10 10/11/95 31,553.1153 8,670.04 16,382,168.443
11 10/12/95 31,519.5511 8,669.53 16,380,133.104
12 10/13/95 31,428.0517 8,677.06 16,380,330.434
13 10/14/95 31,428.0517 8,710.99 16,380,330.434
14 10/15/95 31,428.0517 8,710.99 16,380,330.434
15 10/16/95 31,412.5853 8,710.99 16,368,994.314
16 10/17/95 31,408.5199 8,708.08 16,369,964.127
17 10/18/95 31,423.7567 8,710.40 16,362,323.063
18 10/19/95 31,418.8845 8,704.25 16,358,722.171
19 10/20/95 31,507.2815 8,704.84 16,387,936.684
20 10/21/95 31,507.2815 8,701.81 16,387,936.684
21 10/22/95 31,507.2815 8,701.81 16,387,936.684
22 10/23/95 31,572.3314 8,701.81 16,386,265.127
23 10/24/95 31,526.9029 8,678.49 16,370,552.566
24 10/25/95 31,488.0179 8,681.32 16,366,239.910
25 10/26/95 31,529.0681 8,687.51 16,357,453.606
26 10/27/95 31,548.2088 8,672.66 16,360,079.397
27 10/28/95 31,548.2088 8,667.35 16,360,079.397
28 10/29/95 31,548.2088 8,667.35 16,360,079.397
29 10/30/95 31,573.8087 8,667.35 16,357,689.697
30 10/31/95 31,425.9381 8,667.41 16,390,584.490

TOTAL: 945,924.7466 261,961.74 491,371,436.108 9.47 5.35013%

AVERAGE SHARES: 16,379,047.870
</TABLE>
<PAGE> 19
<TABLE>
FUND# 99926 11/1/95
JH High Yield Bond Cl A DAILY SUMMARY AND DETAIL REPORT

DETAIL INFORMATION: INCOME,EXPENSES,SHARES OUTSTANDING & MAX OFFERING PRICE
<CAPTION>
DAY DATE INCOME EXPENSES SHARES MAX OFFERING PRICE YIELD
<S> <C> <C> <C> <C> <C> <C>
01 10/02/95 6,819.0056 722.81 3,137,487.646
02 10/03/95 6,711.6474 717.76 3,136,142.423
03 10/04/95 6,766.6425 726.04 3,147,269.538
04 10/05/95 6,794.5249 726.42 3,147,906.946
05 10/06/95 6,734.6427 729.61 3,159,914.007
06 10/07/95 6,734.6427 732.64 3,159,914.007
07 10/08/95 6,734.6427 732.64 3,159,914.007
08 10/09/95 6,758.2436 732.64 3,177,631.316
09 10/10/95 6,830.7449 735.62 3,185,865.580
10 10/11/95 6,861.7652 734.11 3,180,231.649
11 10/12/95 6,837.3143 815.25 3,168,499.027
12 10/13/95 6,839.5095 814.83 3,174,253.089
13 10/14/95 6,839.5095 814.71 3,174,253.089
14 10/15/95 6,839.5095 814.71 3,174,253.089
15 10/16/95 6,859.9895 814.71 3,174,599.208
16 10/17/95 6,972.9716 818.31 3,193,416.811
17 10/18/95 6,941.2696 823.59 3,182,918.254
18 10/19/95 7,023.4010 822.82 3,201,051.973
19 10/20/95 7,027.9711 823.96 3,201,587.168
20 10/21/95 7,027.9711 823.57 3,201,587.168
21 10/22/95 7,027.9711 823.57 3,201,587.168
22 10/23/95 7,034.4569 823.57 3,201,753.610
23 10/24/95 7,145.1829 826.43 3,222,632.076
24 10/25/95 7,098.3494 827.70 3,224,122.378
25 10/26/95 8,016.2439 910.79 3,694,019.408
26 10/27/95 6,646.9935 818.50 3,006,710.702
27 10/28/95 6,646.9935 890.16 3,006,710.702
28 10/29/95 6,646.9935 890.16 3,006,710.702
29 10/30/95 8,043.8801 890.16 3,687,803.254
30 10/31/95 8,010.3159 940.69 3,701,479.168

TOTAL: 209,273.2996 24,118.48 96,392,225.163 7.54 9.34818%

AVERAGE SHARES: 3,213,074.172
</TABLE>
<PAGE> 20
FUND# 99927 11/1/95
JH High Yield Bond Cl B DAILY SUMMARY AND DETAIL REPORT

DETAIL INFORMATION: INCOME, EXPENSES, SHARES OUTSTANDING & MAX OFFERING PRICE

<TABLE>
<CAPTION>
DAY DATE INCOME EXPENSES SHARES MAX OFFERING PRICE YIELD

<S> <C> <C> <C> <C> <C> <C>
01 10/02/95 53,787.0205 9,139.43 24,753,034.315
02 10/03/95 53,493.8139 9,145.44 25,001,200.534
03 10/04/95 53,791.8727 9,262.14 25,024,744.139
04 10/05/95 54,078.4384 9,271.97 25,059,895.247
05 10/06/95 53,475.7832 9,298.83 25,096,321.072
06 10/07/95 53,475.7832 9,305.90 25,096,321.072
07 10/08/95 53,475.7832 9,305.90 25,096,321.072
08 10/09/95 53,471.3444 9,305.90 25,146,780.859
09 10/10/95 53,930.6749 9,319.24 25,158,587.170
10 10/11/95 54,317.4832 9,315.54 25,179,848.965
11 10/12/95 54,301.6841 9,984.94 25,169,344.755
12 10/13/95 54,282.6815 9,978.74 25,198,170.923
13 10/14/95 54,282.6815 9,993.10 25,198,170.923
14 10/15/95 54,282.6815 9,993.10 25,198,170.923
15 10/16/95 54,589.7398 9,993.10 25,267,768.837
16 10/17/95 55,184.0110 9,989.60 25,277,893.512
17 10/18/95 54,564.3529 9,991.03 25,025,691.740
18 10/19/95 54,791.8915 9,911.43 24,977,460.933
19 10/20/95 54,840.0221 9,907.31 24,987,317.849
20 10/21/95 54,840.0221 9,905.04 24,987,317.849
21 10/22/95 54,840.0221 9,905.04 24,987,317.849
22 10/23/95 54,904.0153 9,905.04 24,994,678.602
23 10/24/95 55,360.9858 9,883.30 24,973,928.364
24 10/25/95 54,974.3158 9,888.76 24,974,695.762
25 10/26/95 54,188.7995 9,793.28 24,976,103.563
26 10/27/95 55,188.6232 9,989.38 24,970,414.727
27 10/28/95 55,188.6232 9,723.17 24,970,414.727
28 10/29/95 55,188.6232 9,723.17 24,970,414.727
29 10/30/95 54,482.9473 9,723.17 24,983,544.876
30 10/31/95 54,249.4061 9,827.61 25,073,339.463

TOTAL: 1,631,824.1271 290,679.60 751,775,215.349 7.20 9.08726%

AVERAGE SHARES: 25,059,173.845
</TABLE>
<PAGE> 21
Initial Investment: $1,000.00
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Average Annual Total Return Rate Investment Value at End of Period Cumulative
Total Return
<S> <C> <C> <C> <C>
10 Year Return: N/A 10 Year Value: N/A

4.19 Year Return: 16.53% 5 Year Value: $1,898.95 89.90%

1 Year Return: 27.84% 1 Year Value: $1,278.42 27.84%
- -------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
Constant Sales Charge: 5.00%
5.750% Eff. 5/15 5%
<CAPTION>

8 / 91 $18.53 $19.51 5.00%
9 / 91 $18.53 $19.51 5.00%
10 / 91 $19.26 $20.27 5.00%
11 / 91 $17.93 $18.87 5.00%
12 / 91 $20.44 $21.52 5.00% 12/16/91 $0.0640 $18.71 $0.06
1 / 92 $21.83 $22.98 5.00%
2 / 92 $22.27 $23.44 5.00%
3 / 92 $20.83 $21.93 5.00%
4 / 92 $19.24 $20.25 5.00%
5 / 92 $19.10 $20.11 5.00%
6 / 92 $18.03 $18.98 5.00%
7 / 92 $19.12 $20.13 5.00%
8 / 92 $18.84 $19.83 5.00%
9 / 92 $19.33 $20.35 5.00%
10 / 92 $20.60 $21.68 5.00%
11 / 92 $22.65 $23.84 5.00%
12 / 92 $23.17 $24.39 5.00%
1 / 93 $23.60 $24.84 5.00%
2 / 93 $22.35 $23.53 5.00%
3 / 93 $22.98 $24.19 5.00%
4 / 93 $21.99 $23.15 5.00%
5 / 93 $23.35 $24.58 5.00%
6 / 93 $23.29 $24.52 5.00%
7 / 93 $23.48 $24.72 5.00%
8 / 93 $24.82 $26.13 5.00%
9 / 93 $25.61 $26.96 5.00%
10 / 93 $25.89 $27.25 5.00%
11 / 93 $24.77 $26.07 5.00%
12 / 93 $26.13 $27.51 5.00%
1 / 94 $26.96 $28.38 5.00%
2 / 94 $27.14 $28.57 5.00%
3 / 94 $25.20 $26.53 5.00%
4 / 94 $25.17 $26.49 5.00%
5 / 94 $24.62 $25.92 5.00%
6 / 94 $23.46 $24.69 5.00%
7 / 94 $23.92 $25.18 5.00%
8 / 94 $25.90 $27.26 5.00%
9 / 94 $26.09 $27.46 5.00%
10 / 94 $26.82 $28.23 5.00%
11 / 94 $25.69 $27.04 5.00%
12 / 94 $25.94 $27.31 5.00%
1 / 95 $25.46 $26.80 5.00%
2 / 95 $26.78 $28.19 5.00%
3 / 95 $28.27 $29.76 5.00%
4 / 95 $28.84 $30.36 5.00%
5 / 95 $29.53 $31.08 5.00%
6 / 95 $32.23 $33.93 5.00%
7 / 95 $35.42 $37.28 5.00%
8 / 95 $35.81 $37.69 5.00%
9 / 95 $36.92 $38.86 5.00%
10 / 95 $36.09 $37.99 5.00%
- ----------------------------------------------------------------------------------------
End of Period (update for formulas above):
36.090
- ----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
5-Year 1-Year
- ----------------------------------------------------------------------------
Dividend # of Shares Shares Dividend # of Shares Shares VALUE
Received Reinv. Outstanding Received Reinv. Outstanding $
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 0.00
52.438 $ 9,501.77
$ 0.00
$0.0000 0.000 52.438 $ 9,716.76
$0.0000 0.000 52.438 $ 9,716.76
$0.0000 0.000 52.438 $10,099.56
$0.0000 0.000 52.438 $ 9,402.13
$3.3560 0.179 52.617 $10,754.91
$0.0000 0.000 52.617 $11,486.29
$0.0000 0.000 52.617 $11,717.81
$0.0000 0.000 52.617 $10,960.12
$0.0000 0.000 52.617 $10,123.51
$0.0000 0.000 52.617 $10,049.85
$0.0000 0.000 52.617 $ 9,486.85
$0.0000 0.000 52.617 $10,060.37
$0.0000 0.000 52.617 $ 9,913.04
$0.0000 0.000 52.617 $10,170.87
$0.0000 0.000 52.617 $10,839.10
$0.0000 0.000 52.617 $11,917.75
$0.0000 0.000 52.617 $12,191.36
$0.0000 0.000 52.617 $12,417.61
$0.0000 0.000 52.617 $11,759.90
$0.0000 0.000 52.617 $12,091.39
$0.0000 0.000 52.617 $11,570.48
$0.0000 0.000 52.617 $12,286.07
$0.0000 0.000 52.617 $12,254.50
$0.0000 0.000 52.617 $12,354.47
$0.0000 0.000 52.617 $13,059.54
$0.0000 0.000 52.617 $13,475.21
$0.0000 0.000 52.617 $13,622.54
$0.0000 0.000 52.617 $13,033.23
$0.0000 0.000 52.617 $13,748.82
$0.0000 0.000 52.617 $14,185.54
$0.0000 0.000 52.617 $14,280.25
$0.0000 0.000 52.617 $13,259.48
$0.0000 0.000 52.617 $13,243.70
$0.0000 0.000 52.617 $12,954.31
$0.0000 0.000 52.617 $12,343.95
$0.0000 0.000 52.617 $12,585.99
$0.0000 0.000 52.617 $13,627.80
$0.0000 0.000 52.617 $13,727.78
$0.0000 0.000 52.617 35.423 $14,111.88
$0.0000 0.000 52.617 $0.0000 0.000 35.423 $13,517.31
$0.0000 0.000 52.617 $0.0000 0.000 35.423 $13,648.85
$0.0000 0.000 52.617 $0.0000 0.000 35.423 $13,396.29
$0.0000 0.000 52.617 $0.0000 0.000 35.423 $14,090.83
$0.0000 0.000 52.617 $0.0000 0.000 35.423 $14,874.83
$0.0000 0.000 52.617 $0.0000 0.000 35.423 $15,174.74
$0.0000 0.000 52.617 $0.0000 0.000 35.423 $15,537.80
$0.0000 0.000 52.617 $0.0000 0.000 35.423 $16,958.46
$0.0000 0.000 52.617 $0.0000 0.000 35.423 $18,636.94
$0.0000 0.000 52.617 $0.0000 0.000 35.423 $18,842.15
$0.0000 0.000 52.617 $0.0000 0.000 35.423 $19,426.20
$0.0000 0.000 52.617 $0.0000 0.000 35.423 $18,989.48
- ----------------------------------------------------------------------------------------
End of Period (update for formulas above):
52.617 35.423
- ----------------------------------------------------------------------------------------
</TABLE>
<PAGE> 22
TRANSAMERICA EMERGING GROWTH - CLASS A

Initial Investment: $1,000.00

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return Rate Investment Value at End of Period Cumulative
Total Return
<S> <C> <C> <C> <C>
10 Year Return: N/A 10 Year Value: N/A

4.19 Year Return: 16.53% 5 Year Value: $1,898.95 89.90%

1 Year Return: 27.84% 1 Year Value: $1,278.42 27.84%
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
Constant Sales Charge: 5.00%
5.750% Eff. 5/15 5%
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>
8/22/91 $18.12 $19.07 5.00% 52.438

8 / 91 $18.53 $19.51 5.00% $0.0000 0.000 52.438
9 / 91 $18.53 $19.51 5.00% $0.0000 0.000 52.438
10 / 91 $19.26 $20.27 5.00% $0.0000 0.000 52.438
11 / 91 $17.93 $18.87 5.00% $0.0000 0.000 52.438
12 / 91 $20.44 $21.52 5.00% 12/16/91 $0.0640 $18.71 $0.06 $3.3560 0.179 52.617
1 / 92 $21.83 $22.98 5.00% $0.0000 0.000 52.617
2 / 92 $22.27 $23.44 5.00% $0.0000 0.000 52.617
3 / 92 $20.83 $21.93 5.00% $0.0000 0.000 52.617
4 / 92 $19.24 $20.25 5.00% $0.0000 0.000 52.617
5 / 92 $19.10 $20.11 5.00% $0.0000 0.000 52.617
6 / 92 $18.03 $18.98 5.00% $0.0000 0.000 52.617
7 / 92 $19.12 $20.13 5.00% $0.0000 0.000 52.617
8 / 92 $18.84 $19.83 5.00% $0.0000 0.000 52.617
9 / 92 $19.33 $20.35 5.00% $0.0000 0.000 52.617
10 / 92 $20.60 $21.68 5.00% $0.0000 0.000 52.617
11 / 92 $22.65 $23.84 5.00% $0.0000 0.000 52.617
12 / 92 $23.17 $24.39 5.00% $0.0000 0.000 52.617
1 / 93 $23.60 $24.84 5.00% $0.0000 0.000 52.617
2 / 93 $22.35 $23.53 5.00% $0.0000 0.000 52.617
3 / 93 $22.98 $24.19 5.00% $0.0000 0.000 52.617
4 / 93 $21.99 $23.15 5.00% $0.0000 0.000 52.617
5 / 93 $23.35 $24.58 5.00% $0.0000 0.000 52.617
6 / 93 $23.29 $24.52 5.00% $0.0000 0.000 52.617
7 / 93 $23.48 $24.72 5.00% $0.0000 0.000 52.617
8 / 93 $24.82 $26.13 5.00% $0.0000 0.000 52.617
9 / 93 $25.61 $26.96 5.00% $0.0000 0.000 52.617
10 / 93 $25.89 $27.25 5.00% $0.0000 0.000 52.617
11 / 93 $24.77 $26.07 5.00% $0.0000 0.000 52.617
12 / 93 $26.13 $27.51 5.00% $0.0000 0.000 52.617
1 / 94 $26.96 $28.38 5.00% $0.0000 0.000 52.617
2 / 94 $27.14 $28.57 5.00% $0.0000 0.000 52.617
3 / 94 $25.20 $26.53 5.00% $0.0000 0.000 52.617
4 / 94 $25.17 $26.49 5.00% $0.0000 0.000 52.617
5 / 94 $24.62 $25.92 5.00% $0.0000 0.000 52.617
6 / 94 $23.46 $24.69 5.00% $0.0000 0.000 52.617
7 / 94 $23.92 $25.18 5.00% $0.0000 0.000 52.617
8 / 94 $25.90 $27.26 5.00% $0.0000 0.000 52.617
9 / 94 $26.09 $27.46 5.00% $0.0000 0.000 52.617
10 / 94 $26.82 $28.23 5.00% $0.0000 0.000 52.617
11 / 94 $25.69 $27.04 5.00% $0.0000 0.000 52.617
12 / 94 $25.94 $27.31 5.00% $0.0000 0.000 52.617
1 / 95 $25.46 $26.80 5.00% $0.0000 0.000 52.617
2 / 95 $26.78 $28.19 5.00% $0.0000 0.000 52.617
3 / 95 $28.27 $29.76 5.00% $0.0000 0.000 52.617
4 / 95 $28.84 $30.36 5.00% $0.0000 0.000 52.617
5 / 95 $29.53 $31.08 5.00% $0.0000 0.000 52.617
6 / 95 $32.23 $33.93 5.00% $0.0000 0.000 52.617
7 / 95 $35.42 $37.28 5.00% $0.0000 0.000 52.617
8 / 95 $35.81 $37.69 5.00% $0.0000 0.000 52.617
9 / 95 $36.92 $38.86 5.00% $0.0000 0.000 52.617
10 / 95 $36.09 $37.99 5.00% $0.0000 0.000 52.617

<CAPTION>
1-Year
----------------------------------
Month Dividend # of Shares Shares VALUE
Ended Received Reinv. Outstanding $
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
$0.00
8/22/91 $9,501.77
$0.00
8 / 91 $9,716.76
9 / 91 $9,716.76
10 / 91 $10,099.56
11 / 91 $9,402.13
12 / 91 $10,754.91
1 / 92 $11,486.29
2 / 92 $11,717.81
3 / 92 $10,960.12
4 / 92 $10,123.51
5 / 92 $10,049.85
6 / 92 $9,486.85
7 / 92 $10,060.37
8 / 92 $9,913.04
9 / 92 $10,170.87
10 / 92 $10,839.10
11 / 92 $11,917.75
12 / 92 $12,191.36
1 / 93 $12,417.61
2 / 93 $11,759.90
3 / 93 $12,091.39
4 / 93 $11,570.48
5 / 93 $12,286.07
6 / 93 $12,254.50
7 / 93 $12,354.47
8 / 93 $13,059.54
9 / 93 $13,475.21
10 / 93 $13,622.54
11 / 93 $13,033.23
12 / 93 $13,748.82
1 / 94 $14,185.54
2 / 94 $14,280.25
3 / 94 $13,259.48
4 / 94 $13,243.70
5 / 94 $12,954.31
6 / 94 $12,343.95
7 / 94 $12,585.99
8 / 94 $13,627.80
9 / 94 $13,727.78
10 / 94 35.423 $14,111.88
11 / 94 $0.0000 0.000 35.423 $13,517.31
12 / 94 $0.0000 0.000 35.423 $13,648.85
1 / 95 $0.0000 0.000 35.423 $13,396.29
2 / 95 $0.0000 0.000 35.423 $14,090.83
3 / 95 $0.0000 0.000 35.423 $14,874.83
4 / 95 $0.0000 0.000 35.423 $15,174.74
5 / 95 $0.0000 0.000 35.423 $15,537.80
6 / 95 $0.0000 0.000 35.423 $16,958.46
7 / 95 $0.0000 0.000 35.423 $18,636.94
8 / 95 $0.0000 0.000 35.423 $18,842.15
9 / 95 $0.0000 0.000 35.423 $19,426.20
10 / 95 $0.0000 0.000 35.423 $18,989.48
</TABLE>

<ARTICLE> 6
<SERIES>
<NUMBER> 071
<NAME> JOHN HANCOCK GLOBAL RESOURCES -A

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> NOV-01-1994
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 27,819,286
<INVESTMENTS-AT-VALUE> 28,363,048
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<NET-ASSETS> 28,726,170
<DIVIDEND-INCOME> 404,349
<INTEREST-INCOME> 40,530
<OTHER-INCOME> 0
<EXPENSES-NET> 917,065
<NET-INVESTMENT-INCOME> (472,186)
<REALIZED-GAINS-CURRENT> (312,178)
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<NUMBER-OF-SHARES-SOLD> 106,612
<NUMBER-OF-SHARES-REDEEMED> 284,537
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<NET-CHANGE-IN-ASSETS> (13,582,704)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (106,861)
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<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 267,282
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 917,065
<AVERAGE-NET-ASSETS> 35,116,902
<PER-SHARE-NAV-BEGIN> 15.62
<PER-SHARE-NII> (0.08)
<PER-SHARE-GAIN-APPREC> (1.54)
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<PER-SHARE-NAV-END> 14.00
<EXPENSE-RATIO> 1.93
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<SERIES>
<NUMBER> 072
<NAME> JOHN HANCOCK GLOBAL RESOURCES - B

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> NOV-01-1994
<PERIOD-END> OCT-31-1995
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<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 543,819
<NET-ASSETS> 28,726,170
<DIVIDEND-INCOME> 404,349
<INTEREST-INCOME> 40,530
<OTHER-INCOME> 0
<EXPENSES-NET> 917,065
<NET-INVESTMENT-INCOME> (472,186)
<REALIZED-GAINS-CURRENT> (312,178)
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<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
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<NUMBER-OF-SHARES-SOLD> 497,933
<NUMBER-OF-SHARES-REDEEMED> 964,221
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (13,582,704)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (106,861)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 267,282
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 917,065
<AVERAGE-NET-ASSETS> 35,116,902
<PER-SHARE-NAV-BEGIN> 15.58
<PER-SHARE-NII> (0.21)
<PER-SHARE-GAIN-APPREC> (1.51)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.86
<EXPENSE-RATIO> 2.68
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<SERIES>
<NUMBER> 101
<NAME> JOHN HANCOCK EMERGING GROWTH - A

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> NOV-01-1994
<PERIOD-END> OCT-31-1995
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<INVESTMENTS-AT-VALUE> 574,927,900
<RECEIVABLES> 2,319,284
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<PAID-IN-CAPITAL-COMMON> 333,863,246
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<ACCUM-APPREC-OR-DEPREC> 245,565,411
<NET-ASSETS> 572,958,757
<DIVIDEND-INCOME> 2,174,731
<INTEREST-INCOME> 403,533
<OTHER-INCOME> 0
<EXPENSES-NET> 8,734,994
<NET-INVESTMENT-INCOME> (6,156,730)
<REALIZED-GAINS-CURRENT> 10,693,222
<APPREC-INCREASE-CURRENT> 134,216,496
<NET-CHANGE-FROM-OPS> 138,752,988
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,389,301
<NUMBER-OF-SHARES-REDEEMED> 5,302,592
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 158,471,110
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (17,163,122)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,509,539
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 463,333,235
<PER-SHARE-NAV-BEGIN> 26.82
<PER-SHARE-NII> (0.25)
<PER-SHARE-GAIN-APPREC> 9.52
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 36.09
<EXPENSE-RATIO> 1.38
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<SERIES>
<NUMBER> 102
<NAME> JOHN HANCOCK EMERGING GROWTH FUND - B

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> NOV-01-1994
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<ACCUMULATED-NII-CURRENT> 0
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<NET-ASSETS> 572,958,757
<DIVIDEND-INCOME> 2,174,731
<INTEREST-INCOME> 403,533
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<EXPENSES-NET> 8,734,994
<NET-INVESTMENT-INCOME> (6,156,730)
<REALIZED-GAINS-CURRENT> 10,693,222
<APPREC-INCREASE-CURRENT> 134,216,496
<NET-CHANGE-FROM-OPS> 138,752,988
<EQUALIZATION> 0
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<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 7,378,294
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<NET-CHANGE-IN-ASSETS> 158,471,110
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (17,163,122)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,509,539
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 463,333,235
<PER-SHARE-NAV-BEGIN> 26.04
<PER-SHARE-NII> (0.45)
<PER-SHARE-GAIN-APPREC> 9.20
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 34.79
<EXPENSE-RATIO> 2.11
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<SERIES>
<NUMBER> 091
<NAME> JOHN HANCOCK GOVERNMENT INCOME FUND - A

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> NOV-01-1994
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 663,879,300
<INVESTMENTS-AT-VALUE> 683,150,671
<RECEIVABLES> 30,961,428
<ASSETS-OTHER> 169,226
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<PAID-IN-CAPITAL-COMMON> 697,686,152
<SHARES-COMMON-STOCK> 50,496,527
<SHARES-COMMON-PRIOR> 25,478
<ACCUMULATED-NII-CURRENT> 5,426
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (19,323,152)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 19,323,152
<NET-ASSETS> 697,523,358
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 26,331,033
<OTHER-INCOME> 0
<EXPENSES-NET> 5,105,392
<NET-INVESTMENT-INCOME> 21,225,641
<REALIZED-GAINS-CURRENT> (6,768,941)
<APPREC-INCREASE-CURRENT> 49,303,120
<NET-CHANGE-FROM-OPS> 63,759,820
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 4,353,217
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 316,821
<NUMBER-OF-SHARES-REDEEMED> 1,498,883
<SHARES-REINVESTED> 217,963
<NET-CHANGE-IN-ASSETS> 456,238,928
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (12,722,431)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,869,527
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5,105,392
<AVERAGE-NET-ASSETS> 59,009,395
<PER-SHARE-NAV-BEGIN> 8.75
<PER-SHARE-NII> 0.72
<PER-SHARE-GAIN-APPREC> 0.57
<PER-SHARE-DIVIDEND> 0.72
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.32
<EXPENSE-RATIO> 1.19
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<SERIES>
<NUMBER> 092
<NAME> JOHN HANCOCK GOVERNMENT INCOME - B

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> NOV-01-1994
<PERIOD-END> OCT-31-1995
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<INVESTMENTS-AT-VALUE> 683,150,671
<RECEIVABLES> 30,961,428
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<PAID-IN-CAPITAL-COMMON> 697,686,152
<SHARES-COMMON-STOCK> 24,341,348
<SHARES-COMMON-PRIOR> 27,547,677
<ACCUMULATED-NII-CURRENT> 5,426
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (19,491,372)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 19,323,152
<NET-ASSETS> 697,523,358
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 26,331,033
<OTHER-INCOME> 0
<EXPENSES-NET> 5,105,392
<NET-INVESTMENT-INCOME> 21,225,641
<REALIZED-GAINS-CURRENT> (6,768,941)
<APPREC-INCREASE-CURRENT> 49,303,120
<NET-CHANGE-FROM-OPS> 63,759,820
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 16,866,998
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,414,651
<NUMBER-OF-SHARES-REDEEMED> 6,837,005
<SHARES-REINVESTED> 973,020
<NET-CHANGE-IN-ASSETS> 456,238,928
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (12,722,421)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,869,527
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5,105,392
<AVERAGE-NET-ASSETS> 232,407,476
<PER-SHARE-NAV-BEGIN> 8.75
<PER-SHARE-NII> 0.65
<PER-SHARE-GAIN-APPREC> 0.57
<PER-SHARE-DIVIDEND> 0.65
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.32
<EXPENSE-RATIO> 1.89
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<SERIES>
<NUMBER> 111
<NAME> JOHN HANCOCK HIGH YIELD BOND FUND - A

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> NOV-01-1994
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 192,807,071
<INVESTMENTS-AT-VALUE> 197,544,929
<RECEIVABLES> 12,742,103
<ASSETS-OTHER> 144,502
<OTHER-ITEMS-ASSETS> 4,610,862
<TOTAL-ASSETS> 210,304,538
<PAYABLE-FOR-SECURITIES> 2,640,800
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 625,685
<TOTAL-LIABILITIES> 3,266,485
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 223,773,206
<SHARES-COMMON-STOCK> 3,674,039
<SHARES-COMMON-PRIOR> 1,594,818
<ACCUMULATED-NII-CURRENT> 21,206
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (21,253,679)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4,497,320
<NET-ASSETS> 207,038,053
<DIVIDEND-INCOME> 1,006,279
<INTEREST-INCOME> 19,807,076
<OTHER-INCOME> 0
<EXPENSES-NET> 3,351,237
<NET-INVESTMENT-INCOME> 17,462,118
<REALIZED-GAINS-CURRENT> (12,008,875)
<APPREC-INCREASE-CURRENT> 9,302,593
<NET-CHANGE-FROM-OPS> 14,755,836
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,845,748
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 6,078,825
<NUMBER-OF-SHARES-REDEEMED> 4,135,476
<SHARES-REINVESTED> 135,872
<NET-CHANGE-IN-ASSETS> 34,603,437
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (9,244,804)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,072,936
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 183,819,589
<PER-SHARE-NAV-BEGIN> 7.33
<PER-SHARE-NII> 0.72
<PER-SHARE-GAIN-APPREC> (0.12)
<PER-SHARE-DIVIDEND> 0.73
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 7.20
<EXPENSE-RATIO> 1.16
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<SERIES>
<NUMBER> 112
<NAME> JOHN HANCOCK HIGH YIELD BOND FUND -B

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> NOV-01-1994
<PERIOD-END> OCT-31-1995
<INVESTMENTS-AT-COST> 192,807,071
<INVESTMENTS-AT-VALUE> 197,544,929
<RECEIVABLES> 12,742,103
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<TOTAL-ASSETS> 210,304,538
<PAYABLE-FOR-SECURITIES> 2,640,800
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<OTHER-ITEMS-LIABILITIES> 625,685
<TOTAL-LIABILITIES> 3,266,485
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<SHARES-COMMON-STOCK> 25,087,383
<SHARES-COMMON-PRIOR> 21,913,963
<ACCUMULATED-NII-CURRENT> 21,206
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (21,253,679)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4,497,320
<NET-ASSETS> 207,038,053
<DIVIDEND-INCOME> 1,006,279
<INTEREST-INCOME> 19,807,076
<OTHER-INCOME> 0
<EXPENSES-NET> 3,351,237
<NET-INVESTMENT-INCOME> 17,462,118
<REALIZED-GAINS-CURRENT> (12,008,875)
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<EQUALIZATION> 0
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<NUMBER-OF-SHARES-SOLD> 10,103,871
<NUMBER-OF-SHARES-REDEEMED> 7,937,826
<SHARES-REINVESTED> 1,007,375
<NET-CHANGE-IN-ASSETS> 34,603,437
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<ACCUMULATED-GAINS-PRIOR> (9,244,804)
<OVERDISTRIB-NII-PRIOR> 0
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<GROSS-ADVISORY-FEES> 1,072,936
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<GROSS-EXPENSE> 0
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<PER-SHARE-NAV-BEGIN> 7.33
<PER-SHARE-NII> 0.67
<PER-SHARE-GAIN-APPREC> (0.13)
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<NAME> JOHN HANCOCK HIGH YIELD TAX-FREE FUND - A

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<NAME> JOHN HANCOCK HIGH YIELD TAX-FREE FUND - B

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<ARTICLE> 6
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<NAME> JOHN HANCOCK MONEY MARKET FUND - A

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</TABLE>

<ARTICLE> 6
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<NAME> JOHN HANCOCK MONEY MARKET FUND - B

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</TABLE>