---------------------------
The latest report from your
Fund's management team
---------------------------
SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
Patriot Global
Dividend Fund
JANUARY 31, 2000
[LOGO] JOHN HANCOCK FUNDS
A Global Investment Management Firm
<PAGE>
----------------------------------------------
TRUSTEES
Stephen L. Brown
James F. Carlin*
William H. Cunningham
Ronald R. Dion*
Maureen R. Ford
Anne C. Hodsdon
Charles L. Ladner
Steven R. Pruchansky*
Richard S. Scipione
Lt. Gen. Norman H. Smith, USMC (Ret.)
John P. Toolan
*Members of the Audit Committee
OFFICERS
Stephen L. Brown
Chairman
Maureen R. Ford
Vice Chairman and Chief Executive Officer
Anne C. Hodsdon
President, Chief Operating Officer
and Chief Investment Officer
Osbert M. Hood
Executive Vice President and
Chief Financial Officer
Susan S. Newton
Vice President and Secretary
James J. Stokowski
Vice President and Treasurer
Thomas H. Connors
Vice President and Compliance Officer
INVESTMENT ADVISER
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
CUSTODIAN AND TRANSFER AGENT
FOR COMMON SHAREHOLDERS
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
TRANSFER AGENT FOR DARTS
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
LEGAL COUNSEL
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Listed New York Stock Exchange Symbol: PGD
For Shareholder Assistance
Refer to Page 14
--------------------------------------------------
===================================CEO CORNER===================================
DEAR FELLOW SHAREHOLDERS:
As "The American Century" drew to a close this past year, the U.S. economy ended
the era on a high note. With robust growth continuing in 1999, our economy stood
poised to enter the history books for producing the longest expansion on record.
The stock market also rang out the century in style. For an unprecedented fifth
straight year, both the Dow Jones Industrial Average and the Standard & Poor's
500 Index produced 20%-plus returns. However, the market's advances were
restricted to a very select group of stocks, primarily in the technology sector.
Many others, including some of the household blue-chip names, languished or lost
ground as the result of investors' seemingly insatiable appetite for tech
stocks. The same conditions persisted in January 2000.
- --------------------------------------------------------------------------------
[A 1" x 1" photo of Maureen R. Ford, Vice Chairman and Chief Executive Officer,
flush right next to second paragraph.]
- --------------------------------------------------------------------------------
Bonds struggled through their second-worst year in more than two decades, as the
strength of the U.S. economy and the rebound of many others around the world
provoked inflation fears. Though their outlook from here looks brighter, in many
instances, bond mutual fund investors actually lost a little ground or made only
slight advances in 1999.
While we expect the market to broaden eventually, we also expect more
volatility. More than ever, this type of environment calls for investment
diversification. Since not all parts of your portfolio will perform equally well
all the time, we believe it is important to allocate your assets among different
types of investments and funds that target a variety of market segments. This
strategy, executed under the guidance of a seasoned investment professional,
could provide you with a better chance of both realizing results and weathering
the market's changing conditions.
The market's disappointingly narrow focus has created a widening gap in
investment performance. Keep that in mind as you read the report from your
fund's portfolio management team on the following pages. It's all too easy to
get caught up in the headlines and miss what lies underneath.
Sincerely,
/s/Maureen R. Ford
- ------------------
MAUREEN R. FORD, VICE CHAIRMAN AND CHIEF EXECUTIVE OFFICER
2
<PAGE>
================================================================================
By Gregory K. Phelps, for the Portfolio Management Team
John Hancock Patriot
Global Dividend Fund
Preferred and utility stocks tumble as rate fears
-------------------------------------------------
take center stage; January brings better news
---------------------------------------------
The first five of the past six months proved to be a pretty rotten time for both
preferred and utility stocks. Interest-rate jitters hampered preferreds and
utilities from the outset of the period last August. Investors were on edge,
worried about how many more times the Federal Reserve would raise interest rates
after just having done so at the end of June. Throughout the remainder of 1999,
continued signs of strong economic growth fanned fears of inflation, dreaded
because it eats into the returns of income-paying securities. As expected, the
Fed raised rates on two other occasions - in August and November - for an
additional one-half of a percentage point. Because of their high dividends,
preferred and utility stocks tend to be quite sensitive to interest rate
movements, and their prices fell significantly as interest rates climbed.
As if rising interest rates weren't trouble enough, preferred and utility stocks
faced separate challenges. In order to lock in relatively low rates before they
moved higher, and to sidestep potential market disruptions stemming from Y2K
problems, corporations issued near-record levels of debt and preferred stock in
the summer and early fall of 1999. Demand, however, didn't keep pace with
supply. In late 1999, preferreds also unsuccessfully battled an unprecedented
deluge of "tax-loss selling." Simply put, investors were dumping 1999's poorest
performers at a loss to offset capital gains incurred elsewhere in their
portfolios.
- --------------------------------------------------------------------------------
[A 3" x 2" photo at bottom right side of page of John Hancock Patriot Global
Dividend Fund. Caption below reads "Fund managment team members (l-r):
Sylvester Marquardt, Mark Maloney, Beverly Cleathero and Gregory Phelps."]
- --------------------------------------------------------------------------------
"...continued signs of strong economic growth fanned fears of inflation..."
3
<PAGE>
================================================================================
John Hancock Funds - Patriot Global Dividend Fund
"We found a number of compelling values during the period among non-DRD-eligible
preferred stocks..."
- --------------------------------------------------------------------------------
[Pie chart at top left hand column with heading "Portfolio Diversification."
The chart is divided into five sections (from top to left): Oil & Gas 5%, Short-
Term Investment & Other 9%, Preferred Stock Utilities 17%, Common Stock
Utilities 32% and Banks & Financials 37%. A note below the chart reads "As a
percentage of net assets on January 31, 2000."]
- --------------------------------------------------------------------------------
Furthermore, utility and preferred stocks struggled to gain the attention of
investors who were almost exclusively focused on high-flying growth and
technology stocks.
January 2000, however, signaled a significant change in sentiment.
Year-end tax-loss selling disappeared. In addition, the technology sector
suffered a significant sell-off and some investors sought safer harbor in
preferred and utility stocks. But the pivotal event came on January 13, when the
U.S. Treasury announced its plans to buy back up to $30 billion of its
long-maturity outstanding debt. The resulting decline in the 30-year Treasury
bond yield as its price rose on the news of shrinking supply helped perk up the
interest-rate driven preferred and utility stocks. To add further power behind
utility stocks, some high-profile investors - including famed value investor
Warren Buffett and Microsoft's leader
- --------------------------------------------------------------------------------
[Table at bottom of left hand column entitled "Scorecard". The header for the
left column is "Investment" and the header for the right column is "Recent
Performance...and What's Behind the Numbers". The first listing is Avista
followed by an up arrow with the phrase "Fuel cell business generates buzz."
The second listing is Western Resources followed by a down arow with the phrase
"Lack of regulatory approval for planned merger." The third listing is
Preferred stocks followed by a down arrow with the phrase "Heavy supply, higher
interest rates mute progress." A note below the table reads "See 'Schedule of
Investments.' Investment holdings are subject to change."]
- --------------------------------------------------------------------------------
Bill Gates - made headlines by making major investments in select utility
companies.
Performance review
The Fund's performance reflects the series of problems that plagued preferred
and utility stocks during most of the period. For the six months ended January
31, 2000, the Fund had a total return of -5.52% at net asset value. For the same
period, the 30-year U.S. Treasury bond returned -3.42% and the Dow Jones Utility
Average - an index of utility common stocks - returned 2.01%.
As we mentioned earlier, the vast majority of preferred and utility
stocks lost significant ground during the period. Our holdings in those two
categories were no exception, as rising interest rates overwhelmed the fact that
most of our holdings continued to post strong financial results.
Several stars amid the turmoil
There were some companies that weathered the storm better than others, although
their performance was not enough to lift the Fund into positive territory. Our
holdings in Avista, formerly Washington Water Power, performed well in response
to its successful Internet business, which processes utility customers. In
addition, the company is a leader in fuel cells, which produce low-cost
electricity without pollution and are generating a lot of excitement. More
recently, the company announced that it would convert its outstanding preferred
stock to common stock more quickly than expected.
Among our utility common stock holdings, some of the best performers were those
that are pursuing fiber-optic businesses as a way to boost their earnings, such
as NSTAR, Potomac Electric Power and Kansas City Power & Light. DTE
4
<PAGE>
================================================================================
John Hancock Funds - Patriot Global Dividend Fund
- --------------------------------------------------------------------------------
[Bar chart at top of left hand column with heading "Fund Performance". Under
the heading is a note that reads "For the six months ended January 31, 2000."
The chart is sclaed in increments of 1% with -8% at the bottom and 3% at the
top. The first bar represents the -5.52% total return for John Hancock Patriot
Global Dividend Fund. The second bar represents the -3.42% total return for
30-Year Treasury Bond. The third bar represents the 2.01% total return for Dow
Jones Utility Average. A note below the chart reads "The total return for John
Hancock Patriot Global Dividend Fund is at net asset value with all
distributions reinvested. The Dow Jones Utility Average is an unmanaged index
that measures the performance of the utility industry in the United States."]
- --------------------------------------------------------------------------------
Energy also performed reasonably well in response to enthusiasm about its
investment in a fuel-cell company. On the other hand, Western Resources
drastically underperformed other utility stocks due to losses at its security
monitoring unit and its inability to obtain regulatory approval to acquire
Kansas City Power & Light.
Financials
Anticipated merger and acquisition activity, coupled with their relatively high
yields, are the main reasons why we continued to hold onto some preferreds in
the financial sector, namely Lehman Brothers Holdings and Bear Stearns. With the
repeal of the Glass-Steagall Act, which once prevented banks, insurers and
securities brokers from merging, we believe the stage is set for many of our
financial services holdings to be merged or acquired.
Callable preferreds present opportunities
We found a number of compelling values during the period among non-DRD-eligible
preferred stocks, which were the main object of the wave of indiscriminate
tax-loss selling. Generally speaking, we prefer to concentrate on preferred
stocks eligible for the dividends received deduction (DRD), which offers
distinct advantages to corporate investors. As such, they remain in fairly
constant demand. More recently, however, some non-DRD-eligible preferreds that
are callable - or redeemable by their issuers - in the next six to 12 months
were priced so cheaply and offered such high yields that we felt they were too
good to pass up. We concentrated our purchases among those that sold at a
significant discount to their par value and offered almost unprecedented amounts
of yield as a result. These holdings offer the potential for appreciation to
their par value if they are called.
Outlook
As always, the fate of preferred and utility common stocks will be affected by
the direction of interest rates. Our view is that the Federal Reserve could
continue on its inflation-fighting course of raising interest rates over the
short term. But beyond that, we believe that interest-rate hikes will have their
intended effect of slowing the economy later this year.
From a valuation standpoint, preferred and utility stocks offer good
value because investors appear to have already factored much higher interest
rates into their stock prices than we believe will transpire. Add to that the
abatement of tax-loss selling and a more favorable supply and demand outlook,
and we believe the makings of better performance for the stocks in our universe
lie ahead.
- --------------------------------------------------------------------------------
This commentary reflects the views of the portfolio management team through the
end of the Fund's period discussed in this report. Of course, the team's views
are subject to change as market and other conditions warrant.
"...we believe the makings of better performance for the stocks in our univers
lie ahead."
5
<PAGE>
============================FINANCIAL STATEMENTS================================
John Hancock Funds - Patriot Global Dividend 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 January 31, 2000. You'll
also find the net asset value for each Common Share as of that date.
Statement of Assets and Liabilities
January 31, 2000 (Unaudited)
- --------------------------------------------------------------------------------
Assets:
Investments at value - Note C:
Preferred stocks (cost - $113,878,353)...................... $107,009,490
Common stocks (cost - $55,948,642) ......................... 53,544,821
Short-term investments (cost - $4,756,168) ................. 4,756,168
--------------
165,310,479
Dividend receivable ......................................... 500,743
Other assets ................................................ 27,907
--------------
Total Assets ......................... 165,839,129
------------------------------------------------------
Liabilities:
DARTS dividend payable - Note A ............................. 98,114
Payable to John Hancock Advisers, Inc.
and affiliates - Note B .................................... 161,048
Accounts payable and accrued expenses ....................... 76,297
--------------
Total Liabilities .................... 335,459
------------------------------------------------------
Net Assets:
Dutch Auction Rate Transferable Securities Preferred
Shares (DARTS) - Without par value, unlimited
number of shares of beneficial interest authorized,
600 shares issued, liquidation preference of
$100,000 per share - Note A ................................ 60,000,000
--------------
Common Shares - Without par value, unlimited
number of shares of beneficial interest authorized,
8,344,700 shares issued and outstanding .................... 113,802,243
Accumulated net realized gain on investments ................ 82,978
Net unrealized depreciation of investments .................. (9,272,684)
Undistributed net investment income ......................... 891,133
--------------
Net Assets applicable to
Common Shares ($12.64 per
share based on 8,344,700
shares outstanding) .................. 105,503,670
--------------
Net Assets ........................... $165,503,670
======================================================
The Statement of Operations summarizes the Fund's investment income earned and
expenses incurred in operating the Fund. It also shows net gains (losses) for
the period stated.
Statement of Operations
Six months ended January 31, 2000 (Unaudited)
- --------------------------------------------------------------------------------
Investment Income:
Dividends ................................................... $6,078,383
Interest .................................................... 104,836
--------------
6,183,219
--------------
Expenses:
Investment management fee - Note B ......................... 686,885
Administration fee - Note B ................................ 128,797
DARTS and auction fees ..................................... 90,558
Custodian fee .............................................. 26,811
Auditing fee ............................................... 22,599
Miscellaneous .............................................. 14,541
Printing ................................................... 13,933
Transfer agent fee ......................................... 13,255
Trustees' fees ............................................. 3,401
Legal fees ................................................. 1,702
--------------
Total Expenses ....................... 1,002,482
------------------------------------------------------
Net Investment Income ................ 5,180,737
------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments:
Net realized gain on investments sold ....................... 839,588
Change in net unrealized appreciation/depreciation
of investments ............................................. (12,142,751)
--------------
Net Realized and Unrealized
Loss on Investments .................. (11,303,163)
------------------------------------------------------
Net Decrease in Net Assets
Resulting from Operations ............ ($6,122,426)
======================================================
Distribution to DARTS ................ (1,258,000)
------------------------------------------------------
Net Decrease in Net Assets
Applicable to Common
Shareholders Resulting from
Operations Less DARTS
Distributions ........................ ($7,380,426)
======================================================
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
============================FINANCIAL STATEMENTS================================
John Hancock Funds - Patriot Global Dividend Fund
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
SIX MONTHS ENDED
YEAR ENDED JANUARY 31, 2000
JULY 31, 1999 (UNAUDITED)
------------- ----------------
<S> <C> <C>
Increase (Decrease) in Net Assets:
From Operations:
Net investment income .................................................................... $10,003,265 $5,180,737
Net realized gain on investments sold .................................................... 595,625 839,588
Change in net unrealized appreciation/depreciation of investments ........................ (8,817,817) (12,142,751)
------------- --------------
Net Increase (Decrease) in Net Assets Resulting from Operations ......................... 1,781,073 (6,122,426)
------------- --------------
Distributions to Shareholders:
DARTS ($3,972 and $2,097 per share, respectively) - Note A ............................... (2,383,285) (1,258,000)
Common Shares - Note A
Dividends from accumulated net investment income ($1.0434 and
$0.4860 per share, respectively) ....................................................... (8,706,985) (4,055,176)
------------- --------------
Total Distributions to Shareholders .................................................... (11,090,270) (5,313,176)
------------- --------------
Net Assets:
Beginning of period ...................................................................... 186,248,469 176,939,272
------------- --------------
End of period (including undistributed net investment income
of $1,023,572 and $891,133, respectively) .............................................. $176,939,272 $165,503,670
============= ==============
Analysis of Common Shareholder Transactions:
SIX MONTHS ENDED
YEAR ENDED JANUARY 31, 2000
JULY 31, 1999 (UNAUDITED)
--------------------------- ------------------------------
SHARES AMOUNT SHARES AMOUNT
------------ ------------ ----------- -------------
Beginning of period ............................................ 8,344,700 $113,816,397 8,344,700 $113,802,243
Reclassification of net realized long-term gains retained on
investments sold
(net of federal income taxes of $48,460 and none, respectively) - 89,997 - -
Reclassification of capital accounts ........................... - (104,151) - -
----------- ------------- ---------- --------------
End of period .................................................. 8,344,700 $113,802,243 8,344,700 $113,802,243
=========== ============= ========== ==============
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 due to the sale of Common Shares and DARTS. The
footnote illustrates any reclassification of capital accounts and the number of
Common Shares outstanding at the end of the last two periods, along with the
corresponding dollar value.
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE>
============================FINANCIAL STATEMENTS================================
John Hancock Funds - Patriot Global Dividend Fund
Financial Highlights
Selected data for a Common Share outstanding throughout each period indicated,
investment returns, key ratios and supplemental data are listed as follows:
- --------------------------------------------------------------------------------
YEAR ENDED JULY 31, SIX MONTHS ENDED
-------------------------------------------------- JANUARY 31, 2000
1995 1996 1997 1998 1999 (UNAUDITED)
------- -------- -------- -------- ---------- ----------------
Common Shares
Per Share Operating Performance
Net Asset Value, Beginning of Period................... $12.31 $13.04 $13.26 $14.33 $15.13 $14.01
-------- -------- ------- ------- -------- --------
Net Investment Income ................................. 1.55 1.43 1.41(1) 1.30(1) 1.20(1) 0.62(1)
Net Realized and Unrealized Gain (Loss) on Investments 0.67 0.15 1.01 0.85 (0.99) (1.35)
-------- -------- ------- ------- -------- --------
Total from Investment Operations .................... 2.22 1.58 2.42 2.15 0.21 (0.73)
-------- -------- ------- ------- -------- --------
Less Distributions:
Dividends to DARTS Shareholders ...................... (0.33) (0.31) (0.30) (0.30) (0.29) (0.15)
Dividends from Accumulated Net Investment Income to
Common Shareholders ................................. (1.16) (1.05) (1.05) (1.05) (1.04) (0.49)
-------- -------- ------- ------- -------- --------
Total Distributions ................................. (1.49) (1.36) (1.35) (1.35) (1.33) (0.64)
-------- -------- ------- ------- -------- --------
Net Asset Value, End of Period ........................ $13.04 $13.26 $14.33 $15.13 $14.01 $12.64
======== ======== ======= ======= ======== ========
Per Share Market Value, End of Period ................. $12.250 $12.375 $12.938 $13.188 $11.188 $10.063
Total Investment Return at Market Value (6) ........... 13.12% 9.65% 13.53% 10.30% (8.02%) (5.81%)(7)
Ratios and Supplemental Data
Net Assets Applicable to Common Shares, End of Period
(000s omitted) ....................................... $108,824 $110,651 $119,552 $126,248 $116,939 $105,504
Ratio of Expenses to Average Net Assets (2) ........... 2.00% 1.95% 1.93% 1.85% 1.85% 1.80%(8)
Ratio of Net Investment Income to Average Net Assets (3) 12.72% 10.60% 10.14% 8.72% 8.09% 9.31%(8)
Portfolio Turnover Rate ............................... 96% 38% 28% 43% 38% 17%
Senior Securities
Total DARTS Outstanding (000s omitted) ................ $60,000 $60,000 $60,000 $60,000 $60,000 $60,000
Asset Coverage per Unit (4) ........................... $278,812 $283,164 $295,948 $310,691 $296,112 $273,135
Involuntary Liquidation Preference per Unit (5) ....... $100,000 $100,000 $100,000 $100,000 $100,000 $100,000
Approximate Market Value per Unit (5) ................. $100,000 $100,000 $100,000 $100,000 $100,000 $100,000
(1) Based on the average of the shares outstanding at the end of each month.
(2) Ratios calculated on the basis of expenses applicable to common shares
relative to the average net assets of common shares. Without the exclusion of
preferred shares, the ratio of expenses would have been 1.26%, 1.27%, 1.27%,
1.25%, 1.25% and 1.17%, respectively.
(3) Ratios calculated on the basis of net investment income applicable to common
shares relative to the average net assets of common shares. Without the
exclusion of preferred shares, the ratio of net investment income would have
been 8.01%, 6.91%, 6.69%, 5.86%, 5.45% and 6.04%, respectively.
(4) Calculated by subtracting the Fund's total liabilities (not including the
DARTS) from the Fund's total assets and dividing such amount by the number of
DARTS outstanding, as of the applicable 1940 Act Evaluation Date.
(5) Plus accumulated and unpaid dividends.
(6) Assumes dividend reinvestment.
(7) Not annualized.
(8) Annualized.
The Financial Highlights summarizes the impact of the following factors on a
single Common Share for each period indicated: net investment income, gains
(losses) and distributions of the Fund. It shows how the Fund's net asset value
for a Common Share has changed since the end of the previous period. It also
shows the total investment return for the period based on the market value of
the Fund shares. Additionally, important relationships between some items
presented in the financial statements are expressed in ratio form, as well as
information about the DARTS.
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE>
============================FINANCIAL STATEMENTS================================
John Hancock Funds - Patriot Global Dividend Fund
Schedule of Investments
January 31, 2000 (Unaudited)
- --------------------------------------------------------------------------------
The Schedule of Investments is a complete list of all securities owned by the
Patriot Global Dividend Fund on January 31, 2000. It's divided into three main
categories: preferred stocks, common stocks and short-term investments. The
preferred and common stocks are further broken down by industry groups. Under
each industry group is a list of the stocks owned by the Fund. Short-term
investments, which represent the Fund's "cash" position, are listed last.
MARKET
ISSUER, DESCRIPTION NUMBER OF SHARES VALUE
- ------------------- ---------------- ------
PREFERRED STOCKS
Agricultural Operations (2.35%)
Ocean Spray Cranberries, Inc., 6.25% (R) ....... 45,000 $3,888,270
----------
Automobile/Trucks (1.78%)
General Motors Corp., 9.12%,
Depositary Shares, Ser G ...................... 113,414 2,948,764
----------
Banks - Foreign (2.92%)
Australia and New Zealand Banking
Group Ltd., 9.125% (Australia) ................ 99,900 2,497,500
Banco Bilbao Vizcaya International
(Gibraltar) Ltd., 9.75% (Spain) ............... 91,200 2,325,600
----------
4,823,100
----------
Banks - United States (9.14%)
ABN AMRO North America, Inc., 6.59%,
Ser H (R) ..................................... 2,000 1,881,600
ABN AMRO North America, Inc., 8.75%,
Ser A (R) ..................................... 540 579,139
Chase Manhattan Corp., 10.84%, Ser C ........... 179,700 4,919,288
FleetBoston Financial Corp., 6.75%,
Depositary Shares, Ser IV ..................... 40,000 1,900,000
HSBC USA, Inc., $2.858 ......................... 72,000 3,024,000
J.P. Morgan & Company, Inc., 6.625%,
Depositary Shares, Ser H ...................... 60,000 2,820,000
----------
15,124,027
----------
Broker Services (13.80%)
Bear Stearns Cos., Inc., 5.49%, Ser G .......... 103,500 3,933,000
Bear Stearns Cos., Inc., 5.72%, Ser F .......... 46,000 1,840,000
Lehman Brothers Holdings, Inc., 5.67%,
Depositary Shares, Ser D ...................... 144,950 5,942,950
MARKET
ISSUER, DESCRIPTION NUMBER OF SHARES VALUE
- ------------------- ---------------- ------
Broker Services (continued)
Lehman Brothers Holdings, Inc., 5.94%,
Ser C ......................................... 31,100 $1,321,750
Merrill Lynch & Co., Inc., 9.00%,
Depositary Shares, Ser A ...................... 168,000 4,788,000
Morgan Stanley Group, Inc., 7.75%,
Depositary Shares ............................. 100,000 5,012,500
----------
22,838,200
----------
Conglomerates (0.80%)
Grand Metropolitan Delaware, L.P.,
9.42%, Gtd Ser A .............................. 51,000 1,319,625
----------
Equipment Leasing (2.50%)
AMERCO, 8.50%, Ser A ........................... 162,000 4,131,000
----------
Finance (8.19%)
Citigroup, Inc., 6.231%,
Depositary Shares, Ser H ...................... 85,200 4,004,400
Citigroup, Inc., 8.40%,
Depositary Shares, Ser K ...................... 191,000 4,977,938
SLM Holding Corp., 6.97% ....................... 95,000 4,578,525
----------
13,560,863
----------
Media (1.32%)
Shaw Communications, Inc., 8.45%,
Ser A (Canada) ................................ 99,600 2,191,200
----------
Oil & Gas (4.74%)
Anadarko Petroleum Corp., 5.46%,
Depositary Shares ............................. 5,000 388,145
Apache Corp., 5.68%,
Depositary Shares, Ser B ...................... 11,300 879,988
Devon Energy Corp., 6.49%, Ser A ............... 50,000 4,458,250
Lasmo America Ltd., 8.15% (R) ................. 20,000 2,119,320
----------
7,845,703
----------
Utilities (17.12%)
Alabama Power Co., 5.20% ....................... 210,000 4,095,000
Avista Corp., $1.24, Ser L, Conv ............... 44,000 946,000
Baltimore Gas & Electric Co., 6.99%,
Ser 1995 ...................................... 10,000 1,051,875
El Paso Tennessee Pipeline Co., 8.25%,
Ser A ......................................... 146,000 7,665,000
Entergy London Capital, L.P., 8.625%,
Ser A ......................................... 67,500 1,565,156
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE>
============================FINANCIAL STATEMENTS================================
John Hancock Funds - Patriot Global Dividend Fund
MARKET
ISSUER, DESCRIPTION NUMBER OF SHARES VALUE
- ------------------- ---------------- ------
Utilities (continued)
FPC Capital I, 7.10%, Ser A .................... 80,400 $1,638,150
Pacific Enterprises, $4.50 ..................... 19,100 1,258,212
PSI Energy, Inc., 6.875% ....................... 42,500 4,438,594
Public Service Electric & Gas Co., 6.92% ....... 7,000 730,001
South Carolina Electric & Gas Co., 6.52% ....... 25,000 2,487,500
TDS Capital Trust II, 8.04% .................... 118,000 2,463,250
----------
28,338,738
----------
TOTAL PREFERRED STOCKS
(Cost $113,878,353) (64.66%) 107,009,490
-------- -----------
COMMON STOCKS
Utilities (32.35%)
Alliant Energy Corp. ........................... 127,420 3,798,708
Ameren Corp. ................................... 20,000 651,250
CH Energy Group, Inc. .......................... 83,300 2,582,300
CMP Group, Inc. ................................ 70,000 1,938,125
Consolidated Edison, Inc. ...................... 56,000 1,830,500
Dominion Resources, Inc. ....................... 47,500 1,983,125
DTE Energy Co. ................................. 79,900 2,776,525
Duke Energy Corp. .............................. 25,000 1,443,750
Eastern Enterprises ............................ 58,200 3,328,312
Florida Progress Corp. ......................... 35,000 1,483,125
Hawaiian Electric Industries, Inc. ............. 32,000 964,000
Kansas City Power & Light Co. .................. 45,000 1,094,063
KeySpan Corp. .................................. 59,000 1,382,813
Kinder Morgan, Inc. ............................ 37,500 986,719
LG&E Energy Corp. .............................. 96,500 1,640,500
New England Electric System .................... 66,150 3,497,680
Northern States Power Co. ...................... 40,000 770,000
NSTAR .......................................... 76,000 3,187,250
OGE Energy Corp. ............................... 90,000 1,828,125
Potomac Electric Power Co. ..................... 115,000 2,774,375
Public Service Enterprise Group, Inc. .......... 50,000 1,718,750
Puget Sound Energy, Inc. ....................... 112,800 2,538,000
Reliant Energy, Inc. ........................... 69,600 1,587,750
Sempra Energy .................................. 33,000 612,563
Sierra Pacific Resources ....................... 38,000 608,000
Southern Co. ................................... 20,000 512,500
Teco Energy, Inc. .............................. 133,700 2,623,863
UtiliCorp United, Inc. ......................... 30,000 586,875
Western Resources, Inc. ........................ 80,400 1,286,400
WPS Resources Corp. ............................ 60,400 1,528,875
----------
TOTAL COMMON STOCKS
(Cost $55,948,642) (32.35%) 53,544,821
-------- ----------
INTEREST PAR VALUE MARKET
ISSUER, DESCRIPTION RATE (000s OMITTED) VALUE
- ------------------- -------- -------------- ------
SHORT-TERM INVESTMENTS
Commercial Paper (2.87%)
Chevron USA, Inc.,
02-01-00 ................... 5.55% $4,756 $4,756,168
-----------
TOTAL SHORT-TERM INVESTMENTS (2.87%) 4,756,168
-------- -----------
TOTAL INVESTMENTS (99.88%) 165,310,479
-------- -----------
OTHER ASSETS AND LIABILITIES, NET (0.12%) 193,191
-------- -----------
TOTAL NET ASSETS (100.00%) $165,503,670
======== ============
(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 $8,468,329 or 5.12% of net assets as of January 31, 2000.
Parenthetical disclosure of a foreign country in the security description
represents country of a foreign issuer; however, security is U.S. dollar
denominated.
The percentage shown for each investment category is the total value of that
category as a percentage of the net assets of the Fund.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE>
==========================NOTES TO FINANCIAL STATEMENTS=========================
John Hancock Funds - Patriot Global Dividend Fund
(UNAUDITED)
NOTE A -
ACCOUNTING POLICIES
John Hancock Patriot Global Dividend Fund (the "Fund") is a closed-end
diversified management investment company registered under the Investment
Company Act of 1940. Significant accounting policies of the Fund are as follows:
VALUATION OF INVESTMENTS Securities in the Fund's portfolio are valued on the
basis of market quotations, valuations provided by independent pricing services,
or at fair value as determined in good faith in accordance with procedures
approved by the Trustees. Short-term debt investments maturing within 60 days
are valued at amortized cost, which approximates market value.
INVESTMENT TRANSACTIONS Investment transactions are recorded as of the date of
purchase, sale or maturity. Net realized gains and losses on sales of
investments are determined on the identified cost basis.
FEDERAL INCOME TAXES The Fund qualifies as a "regulated investment company" by
complying with the applicable provisions of the Internal Revenue Code and will
not be subject to federal income tax on taxable income which is distributed to
shareholders.
DIVIDENDS, DISTRIBUTIONS AND INTEREST Dividend income on investment securities
is recorded on the ex-dividend date. Interest income on investment securities is
recorded on the accrual basis. The Fund records all dividends and distributions
to shareholders from net investment income and realized gains on the ex-dividend
date. Such distributions are determined in conformity with federal income tax
regulations. Due to permanent book/tax differences in accounting for certain
transactions, this has the potential for treating certain distributions as
return of capital as opposed to distributions of net investment income or
realized capital gains. The Fund has adjusted for the cumulative effect of such
permanent book/tax differences through July 31, 1999, which has no effect on the
Fund's net assets, net investment income or net realized gains.
USE OF ESTIMATES The preparation of these financial statements in accordance
with generally accepted accounting principles incorporates estimates made by
management in determining the reported amounts of assets, liabilities, revenues
and expenses of the Fund.
DUTCH AUCTION RATE TRANSFERABLE SECURITIES PREFERRED SHARES (DARTS) The Fund
issued 600 shares of DARTS on October 16, 1992 in a public offering. The
underwriting discount was recorded as a reduction of the capital of the Common
Shares. Dividends on the DARTS, which accrue daily, are cumulative at a rate
which was established at the offering of the DARTS and has been reset every 49
days thereafter by an auction. Dividend rates ranged from 3.85% to 4.37% during
the period ended January 31, 2000.
The DARTS are redeemable at the option of the Fund, at a redemption
price equal to $100,000 per share, plus accumulated and unpaid dividends on any
dividend payment date. The DARTS are also subject to mandatory redemption at a
redemption price equal to $100,000 per share, plus accumulated and unpaid
dividends, if the Fund is in default on its asset coverage requirements with
respect to the DARTS. If the dividends on the DARTS shall remain unpaid in an
amount equal to two full years' dividends, the holders of the DARTS, as a class,
have the right to elect a majority of the Board of Trustees. In general, the
holders of the DARTS and the Common Shares have equal voting rights of one vote
per share, except that the holders of the DARTS, as a class, vote to elect two
members of the Board of Trustees, and separate class votes are required on
certain matters that affect the respective interests of the DARTS and Common
Shares. The DARTS have a liquidation preference of $100,000 per share, plus
accumulated and unpaid dividends. The Fund is required to maintain certain asset
coverage with respect to the DARTS, as defined in the Fund's By-Laws.
NOTE B -
MANAGEMENT FEE AND TRANSACTIONS
WITH AFFILIATES AND OTHERS
Under the investment management contract, the Fund pays a monthly management fee
to John Hancock Advisers, Inc. (the "Adviser"), a wholly owned subsidiary of The
Berkeley Financial Group, Inc., for a continuous investment program equivalent,
on an annual basis, to the sum of 0.80% of the Fund's average weekly net assets.
In addition, the Adviser had a sub-investment management contract with
John Hancock Advisers International Limited (the "Sub-Adviser"), a wholly owned
subsidiary of the Adviser. Under the Sub-Advisory
11
<PAGE>
==========================NOTES TO FINANCIAL STATEMENTS=========================
John Hancock Funds - Patriot Global Dividend Fund
Agreement between the Adviser and the Sub-Adviser, the Sub-Adviser furnished the
Adviser with international portfolio management assistance. The Adviser paid the
Sub-Adviser a monthly management fee equivalent, on an annual basis, to 0.05% of
the Fund's average weekly net assets. The Sub-Advisory contract was terminated
effective March 1, 2000.
The Fund has entered into an administrative agreement with Mitchell
Hutchins Asset Management, Inc. (the "Administrator"), under which the
Administrator, if requested by the Adviser, assists in preparing financial
information and reports, providing information for tax reporting purposes,
compliance, calculation of net asset values, etc. The Fund pays the
Administrator a monthly fee equivalent, on an annual basis, to the sum of 0.15%
of the Fund's average weekly net assets, with a minimum annual fee of $125,000.
The Administrator is an affiliate of PaineWebber Incorporated, which acted as an
underwriter of the Fund's Common Shares.
Each unaffiliated Trustee is entitled, as compensation for his or her
services, to an annual fee plus remuneration for attendance at various meetings.
Mr. Stephen L. Brown, Ms. Maureen R. Ford, Ms. Anne C. Hodsdon and Mr.
Richard S. Scipione are directors and/or officers of the Adviser and/or its
affiliates, as well as Trustees of the Fund. The compensation of unaffiliated
Trustees is borne by the Fund. The unaffiliated Trustees may elect to defer, for
tax purposes, their receipt of this compensation under the John Hancock Group of
Funds Deferred Compensation Plan. The Fund makes 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
are recorded on the Fund's books as an other asset. The deferred compensation
liability and the related other asset are always equal and are marked to market
on a periodic basis to reflect any income earned by the investment as well as
any unrealized gains or losses. The investment had no impact on the operations
of the 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 securities, during the period
ended January 31, 2000, aggregated $31,066,465 and $28,564,766, respectively.
There were no purchases or sales of obligations of the U.S. government and its
agencies during the period ended January 31, 2000.
The cost of investments owned at January 31, 2000 (including short-term
investments) for federal income tax purposes was $175,127,960. Gross unrealized
appreciation and depreciation of investments aggregated $3,382,256 and
$13,199,737, respectively, resulting in net unrealized depreciation of
$9,817,481.
12
<PAGE>
================================================================================
John Hancock Funds - Patriot Global Dividend Fund
INVESTMENT OBJECTIVE AND POLICY
The Fund's investment objective is to provide a high level of current income,
consistent with modest growth of capital, for holders of its Common Shares of
beneficial interest. The Fund will pursue its objective by investing in a
diversified portfolio of dividend paying preferred and common stocks of domestic
and foreign issuers, as well as debt obligations, with the Fund investing only
in U.S. dollar denominated securities.
The Fund's non-fundamental investment policy with respect to the
quality of ratings of its portfolio investments was changed by a vote of the
Fund's Trustees on September 13, 1994. The new policy, which became effective
October 15, 1994, stipulates that preferred stocks and debt obligations in which
the Fund will invest will be rated investment grade (at least "BBB" by S&P or
"Baa" by Moody's) at the time of investment or will be preferred stocks of
issuers of investment grade senior debt, some of which may have speculative
characteristics, or, if not rated, will be of comparable quality as determined
by the Adviser. The Fund will invest in common stocks of issuers whose senior
debt is rated investment grade or, in the case of issuers that have no rated
senior debt outstanding, whose senior debt is considered by the Adviser to be of
comparable quality. The new policy supersedes the requirement that at least 80%
of the Fund's total assets consist of preferred stocks and debt obligations
rated "A" or higher and dividend paying common stocks whose issuers have senior
debt rated "A" or higher.
DIVIDEND REINVESTMENT PLAN
The Fund provides shareholders with a Dividend Reinvestment Plan (the "Plan")
which offers the opportunity to earn compounded yields. Each holder of Common
Shares will automatically have all distributions of dividends and capital gains
reinvested by State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02210, as agent for the common shareholders, unless an election is
made to receive cash. Holders of Common Shares who elect not to participate in
the Plan will receive all distributions in cash, paid by check, mailed directly
to the shareholder of record (or if the Common Shares are held in street or
other nominee name then to the nominee) by the Plan Agent, as dividend
disbursing agent. Shareholders whose shares are held in the name of a broker or
nominee should contact the broker or nominee to determine whether and how they
may participate in the Plan.
The Plan Agent serves as agent for the holders of Common Shares in
administering the Plan. After the Fund declares a dividend or makes a capital
gain distribution, the Plan Agent will, as agent for the participants, receive
the cash payment and use it to buy Common Shares in the open market, on the New
York Stock Exchange or elsewhere, for the participants' accounts. The Fund will
not issue any new shares in connection with the Plan.
Participants in the Plan may withdraw from the Plan upon written notice
to the Plan Agent. Such withdrawal will be effective immediately if received not
less than ten days prior to a dividend record date; otherwise, it will be
effective for all subsequent dividend record dates. When a participant withdraws
from the Plan or upon termination of the Plan as provided below, certificates
for whole Common Shares credited to his or her account under the Plan will be
issued and a cash payment will be made for any fraction of a share credited to
such account.
The Plan Agent maintains each shareholder's account in the Plan and
furnishes monthly written confirmations of all transactions in the accounts,
including information needed by the shareholders for personal and tax records.
Common Shares in the account of each Plan participant will be held by the Plan
Agent in non-certificated form in the name of the participant. Proxy material
relating to the shareholder's meetings of the Fund will include those shares
purchased as well as shares held pursuant to the Plan.
The Plan Agent's fees for the handling of reinvestment of dividends and
other distributions will be paid by the Fund. Each participant will pay a pro
rata share of brokerage commissions incurred with respect to the Plan Agent's
open market purchases in connection with the reinvestment of dividends and
distributions. The cost per share of the shares purchased for each participant's
account will be the average cost, including brokerage commissions, of any shares
purchased on the open market. There are no other charges to participants for
reinvesting dividends or capital gain distributions, except for certain
brokerage commissions, as described above.
13
<PAGE>
================================================================================
John Hancock Funds - Patriot Global Dividend Fund
The automatic reinvestment of dividends and distributions will not
relieve participants of any federal income tax that may be payable or required
to be withheld on such dividends or distributions.
Experience under the Plan may indicate that changes are desirable.
Accordingly, the Fund reserves the right to amend or terminate the Plan as
applied to any dividend or distribution paid subsequent to written notice of the
change sent to all shareholders of the Fund at least 90 days before the record
date for the dividend or distribution. The Plan may be amended or terminated by
the Plan Agent at least 90 days after written notice to all shareholders of the
Fund. All correspondence or additional information concerning the Plan should be
directed to the Plan Agent, State Street Bank and Trust Company, at P.O. Box
8209, Boston, Massachusetts 02266-8209 (telephone 1-800-426-5523).
YEAR 2000 COMPLIANCE
The Adviser and the Fund's service providers have taken steps to
address any year 2000-related computer problems. However, there is some risk
that these problems could disrupt the Fund's operations or financial markets
generally.
SHAREHOLDER COMMUNICATION AND ASSISTANCE
If you have any questions concerning John Hancock Patriot Global Dividend Fund,
we will be pleased to assist you. If you hold shares in your own name and not
with a brokerage firm, please address all notices, correspondence, questions or
other communications regarding the Fund to the transfer agent at:
State Street Bank and Trust Company
P.O. Box 8200
Boston, Massachusetts 02266-8200
Telephone: (800) 426-5523
If your shares are help with a brokerage firm, you should contact that
firm, bank or other nominee for assistance.
14
<PAGE>
======================================NOTES=====================================
John Hancock Funds - Patriot Global Dividend Fund
15
<PAGE>
================================================================================
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