---------------------------
The latest report from your
Fund's management team
---------------------------
ANNUAL REPORT
--------------------------------------------------------------------------------
[GRAPHIC OMITTED]
Patriot Global
Dividend Fund
JULY 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
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, President and
Chief Executive Officer
Osbert M. Hood
Executive Vice President and
Chief Financial Officer
William L. Braman
Executive Vice President and
Chief Investment 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
Bankers Trust Company
4 Albany Street
New York, New York 10005
LEGAL COUNSEL
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
INDEPENDENT AUDITORS
Deloitte & Touche LLP
200 Berkeley Street
Boston, Massachusetts 02116-5022
Listed New York Stock Exchange Symbol: PGD
For Shareholder Assistance
Refer to Page 15
------------------------------------------------
===================================CEO CORNER===================================
After four years of spectacular returns, the stock market succumbed in the first
seven months of 2000 largely to the pressures of rising interest rates, as the
Federal Reserve kept up its campaign to fight inflation. The red-hot economy has
begun to show signs of slowing, and investors are no longer blind to the real
possibility that rising rates could slow corporate profits. The result was
flat-to-negative results for the three main stock-market indexes through July.
Many bonds also suffered during this period, since their prices generally move
in the opposite direction of rates.
--------------------------------------------------------------------------------
[A 1" x 1" photo of Maureen R. Ford, Vice Chairman, President and Chief
Executive Officer, flush right next to second paragraph.]
--------------------------------------------------------------------------------
But there was good news, too. The Treasury market, where shrinking supply
bolstered prices thanks to the government's efforts to retire some of its debt,
performed well. And the Fed appears closer to the end of its tightening cycle,
which will be a strong positive if it can slow the economy to a level that
supports corporate earnings growth but keeps inflation at bay. The picture on
the global economy is brighter and technology continues to dominate as the
driver of ever-improving corporate productivity.
No matter what happens next in the financial markets, these past several months
only served to reinforce some of the important lessons for investors: Diversify,
invest in line with your tolerance for risk and maintain a long-term
perspective.
Since not all parts of your portfolio will perform equally well all the time, it
is important to allocate your assets among different types of investments and
funds that target a variety of stock- and bond-market segments. This strategy,
executed under the guidance of a seasoned investment professional, could provide
you with a better chance of both realizing longer-term results and weathering
the market's changing conditions.
Sincerely,
/s/Maureen R. Ford
------------------
MAUREEN R. FORD, VICE CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
2
<PAGE>
================================================================================
By Gregory K. Phelps, for the Portfolio Management Team
John Hancock Patriot
Global Dividend Fund
Utility stocks rebound in second half of Fund's fiscal year,
------------------------------------------------------------
while preferreds languish
-------------------------
After suffering through a dismal 1999, utility common stocks, which make up
about one third of the Fund, have done quite well so far in 2000. This dramatic
turnaround can be explained by a host of good tidings. First, utilities are
among a few stock-market sectors that pay handsome dividends, which have
resulted in yields that are quite high from a historical perspective. Second,
utilities began to shed their traditional reputation as being supersensitive to
interest-rate changes. In fact, most utilities no longer need to borrow large
amounts to fund the building of new generating capacity. Third, some investors
began to embrace the notion that deregulation is unlocking value for many
utilities. Fourth, weary investors were seeking safer haven from the volatility
that has marked the tech sector - and even some blue-chip stocks. Fifth, many
utility stocks were considered bargains after years of underperforming the stock
market overall. Finally, second quarter 2000 earnings - most of which were
announced in July - proved much better than expected, thanks to cost cutting and
merger savings, stock buybacks and higher usage of electricity and natural gas.
By the end of July, the Dow Jones Utility Average was nearing its all-time high.
In contrast to utility common stocks, preferred stocks remained under
pressure during most of the last 12 months, as worries about inflation and a
string of interest-rate hikes muted returns. In fact, the preferred category was
one
--------------------------------------------------------------------------------
[A 3" x 2" photo at bottom right side of page of John Hancock Patriot Global
Dividend Fund. Caption below reads "Fund management team members (l-r): Mark
Maloney, Beverly Cleathero and Gregory Phelps ."]
--------------------------------------------------------------------------------
"...worries about inflation and a string of interest-rate hikes muted returns."
3
<PAGE>
================================================================================
John Hancock Funds - Patriot Global Dividend Fund
"...strong individual performers during the period, especially among utility
common 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 3%, Short-Term
Investments & Other 7%, Preferred Stock Utilities 16%, Common Stock Utilities
36% and Banks & Financials 38%. A note below the chart reads "As a percentage of
net assets on July 31, 2000."]
--------------------------------------------------------------------------------
of the worst-performing sectors of the fixed-income universe. Because of their
high, mostly fixed, dividends, preferred stocks tend to be quite sensitive to
interest-rate movements. In an effort to put the brakes on the robust U.S.
economy's growth and a sky-high stock market, the Federal Reserve made five
short-term interest rate increases during the past 12 months. The most recent
rate hike was a half-percentage-point increase in May, the largest rate hike in
five years. As short-term interest rates soared, preferred stock prices moved
lower. Although June brought more uncertainty over whether the Fed would raise
interest rates, it didn't do so and preferreds perked up a bit through the end
of July, as investors opportunistically looked to them for their bargain prices
and high yields. Within the preferred market, preferred stocks eligible for the
dividends-received deduction (DRD), which
--------------------------------------------------------------------------------
[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 KeySpan Corp.
followed by an up arrow with the phrase "Planned merger generates excitement."
The second listing is LG&E Energy Corp. followed by an up arrow with the phrase
"Acquisition target." The third listing is Western Resources followed by a down
arrow with the phrase "Credit rating downgraded." A note below the table reads
"See `Schedule of Investments.' Investment holdings are subject to change."]
--------------------------------------------------------------------------------
offer distinct advantages to corporate investors, lagged their non-DRD-eligible
counterparts. The latter benefited from stronger demand from investors looking
for cheaper alternatives to corporate bonds.
Performance review
The Fund's second-half performance was significantly boosted by the rebound in
utility common stocks, but it was not enough to erase the losses suffered all
year by preferred stocks, which made up about two thirds of John Hancock Patriot
Global Dividend Fund. For the 12 months ended July 31, 2000, the Fund posted a
total return of -0.96% at net asset value. During the same period, the 30-year
U.S. Treasury bond returned 7.69%, as a shrinking supply pushed up demand and
prices. In the same period, the Dow Jones Utility Average - which tracks the
performance of 15 electric and natural gas companies - returned 7.50%.
Utility commons stand out
Although the Fund's overall result was disappointing for the year, we had some
strong individual performers during the period, especially among utility common
stocks. Electric utility company LG&E Energy got a significant boost when it was
announced that the company would be acquired by U.K.-based PowerGen. Potomac
Electric Power was another good performer, thanks to the company's sale of its
power-generating assets, the growth of its fiber-optic business and its stock
buy-back plan. KeySpan Corporation was another strong performer, thanks to its
planned merger with Eastern Enterprises, which will make the company one of the
largest gas distribution utilities in the United States. Furthermore, the
company enjoyed improved profitability. In contrast, Western Resources
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 year ended July 31, 2000." The chart is
scaled in increments of 2% with -2% at the bottom and 8% at the top. The first
bar represents the -0.96% total return for John Hancock Patriot Global Dividend
Fund. The second bar represents the 7.69% total return for 30-Year Treasury
Bond. The third bar represents the 7.50% 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."]
--------------------------------------------------------------------------------
drastically underperformed the utility group due to its inability to complete a
planned merger and problems with its Protection One home security business. The
company's credit rating was downgraded in response.
Most of our preferreds were lackluster, in line with the preferred
market as a whole. But there were a couple of bright spots, particularly among
our non-DRD preferred holdings. One was Telephone and Data Systems (TDS
Capital), which was upgraded to investment-grade status during the period. The
higher rating came in recognition of the strength of TDS' wireless telephone
business.
Growing biz lines = opportunities
Because they were cheap relative to their historic value, we've been adding more
utility common stocks to the Fund's portfolio. We continued to place an emphasis
on utilities pursuing high-growth fiber-optic and broadband businesses as a way
to boost their earnings. Examples include NSTAR, Montana Power, Potomac Electric
Power and Kansas City Power & Light. We also favored Alliant Energy Corp., due
to its large holdings in a competitive local exchange carrier, which has been
grabbing small company phone business away from bigger competitors. We also
occasionally looked for utility stocks that offered the potential for strong
returns resulting from being taken over or merging.
Outlook
We believe that the Federal Reserve may be nearing the end of its tightening
activities. That viewpoint is based on the fact that we're beginning to see
growing evidence that the economy is slowing. New-home sales have leveled off,
existing-home sales have declined, auto sales have flattened and employment
growth recently slowed. To the extent that investors recognize the value that
preferred stocks now offer, preferreds will benefit.
As for utility common stocks, we're optimistic. We anticipate continued
consolidation in the industry, which will likely be favorable for the group. We
are particularly bullish on the companies that offer unregulated services like
broadband and fiber optics. We believe that investors may continue to find these
companies increasingly attractive alternatives to some of the much more
expensive telecommunications and technology companies.
--------------------------------------------------------------------------------
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.
"...the Federal Reserve may be nearing the end of its tightening activities."
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 July 31, 2000. You'll also
find the net asset value for each common share as of that date.
Statement of Assets and Liabilities
July 31, 2000
--------------------------------------------------------------------------------
Assets:
Investments at value - Note C:
Preferred stocks (cost - $114,583,798)....................... $104,844,862
Common stocks (cost - $59,874,945) .......................... 60,045,326
Short-term investments (cost - $377,000) .................... 377,000
--------------
165,267,188
Dividends receivable ......................................... 603,640
Other assets ................................................. 47,237
--------------
Total Assets ................... 165,918,065
-----------------------------------------------
Liabilities:
Due to Custodian ............................................. 15,790
DARTS dividend payable - Note A .............................. 119
Payable to John Hancock Advisers, Inc.
and affiliates - Note B ..................................... 133,961
Accounts payable and accrued expenses ....................... 124,144
--------------
Total Liabilities .............. 274,014
-----------------------------------------------
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 ..................... 113,719,933
Accumulated net realized gain on investments ................. 775,410
Net unrealized depreciation of investments ................... (9,568,555)
Undistributed net investment income .......................... 717,263
--------------
Net Assets applicable to
Common Shares ($12.66 per
share based on 8,344,700
shares outstanding) ............ 105,644,051
--------------
Net Assets ..................... $165,644,051
===============================================
The Statement of Operations summarizes the Fund's investment income earned and
expenses incurred in operating the Fund. It also shows net gains (losses) for
the period stated.
Statement of Operations
Year ended July 31, 2000
--------------------------------------------------------------------------------
Investment Income:
Dividends .................................................... $12,196,792
Interest ..................................................... 203,539
--------------
12,400,331
--------------
Expenses:
Investment management fee - Note B .......................... 1,339,462
Administration fee - Note B ................................. 251,149
DARTS and auction fees ...................................... 170,851
Federal excise tax .......................................... 80,749
Auditing fee ................................................ 61,551
Custodian fee ............................................... 55,527
Printing .................................................... 40,094
Transfer agent fee .......................................... 25,629
Miscellaneous ............................................... 20,972
Trustees' fees .............................................. 8,097
Legal fees .................................................. 3,040
--------------
Total Expenses ................. 2,057,121
-----------------------------------------------
Net Investment Income .......... 10,343,210
-----------------------------------------------
Realized and Unrealized Gain (Loss) on Investments:
Net realized gain on investments sold ........................ 1,530,861
Change in net unrealized appreciation/depreciation
of investments .............................................. (12,438,622)
--------------
Net Realized and Unrealized
Loss on Investments ............ (10,907,761)
-----------------------------------------------
Net Decrease in Net Assets
Resulting from Operations ...... (564,551)
===============================================
Distribution to DARTS .......... (2,620,387)
-----------------------------------------------
Net Decrease in Net Assets
Applicable to Common
Shareholders Resulting from
Operations Less DARTS
Distributions .................. ($3,184,938)
===============================================
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
=============================FINANCIAL STATEMENTS===============================
John Hancock Funds - Patriot Global Dividend Fund
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
YEAR ENDED JULY 31,
-------------------------------
1999 2000
------------- -------------
<S> <C> <C>
Increase (Decrease) in Net Assets:
From Operations:
Net investment income......................................................................... $10,003,265 $10,343,210
Net realized gain on investments sold ........................................................ 595,625 1,530,861
Change in net unrealized appreciation/depreciation of investments ............................ (8,817,817) (12,438,622)
------------- -------------
Net Increase (Decrease) in Net Assets Resulting from Operations ............................. 1,781,073 (564,551)
------------- -------------
Distributions to Shareholders:
DARTS ($3,972 and $4,367 per share, respectively) - Note A ................................... (2,383,285) (2,620,387)
Common Shares - Note A
Dividends from accumulated net investment income ($1.0434 and
$0.9720 per share, respectively) ........................................................... (8,706,985) (8,110,283)
------------- -------------
Total Distributions to Shareholders ........................................................ (11,090,270) (10,730,670)
------------- -------------
Net Assets:
Beginning of period .......................................................................... 186,248,469 176,939,272
------------- -------------
End of period (including undistributed net investment income
of $1,023,572 and $717,263, respectively) ................................................... $176,939,272 $165,644,051
============= =============
Analysis of Common Shareholder Transactions:
YEAR ENDED JULY 31,
----------------------------------------------------------
1999 2000
------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
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 - Note D .................... - (104,151) - (82,310)
------------ ------------- ----------- --------------
End of period .................................................... 8,344,700 $113,802,243 8,344,700 $113,719,933
============ ============= =========== ==============
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 beginning and 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,
-----------------------------------------------------------
1996 1997 1998 1999 2000
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Common Shares
Per Share Operating Performance
Net Asset Value, Beginning of Period .................................. $13.04 $13.26 $14.33 $15.13 $14.01
-------- -------- -------- -------- --------
Net Investment Income ................................................. 1.43 1.41(1) 1.30(1) 1.20(1) 1.24
Net Realized and Unrealized Gain (Loss) on Investments ................ 0.15 1.01 0.85 (0.99) (1.31)
-------- -------- -------- -------- --------
Total from Investment Operations ..................................... 1.58 2.42 2.15 0.21 (0.07)
-------- -------- -------- -------- --------
Less Distributions:
Dividends to DARTS Shareholders ...................................... (0.31) (0.30) (0.30) (0.29) (0.31)
Dividends from Accumulated Net Investment Income to
Common Shareholders ................................................. (1.05) (1.05) (1.05) (1.04) (0.97)
-------- -------- -------- -------- --------
Total Distributions ................................................. (1.36) (1.35) (1.35) (1.33) (1.28)
-------- -------- -------- -------- --------
Net Asset Value, End of Period ........................................ $13.26 $14.33 $15.13 $14.01 $12.66
======= ======== ======== ======== ========
Per Share Market Value, End of Period ................................. $12.375 $12.938 $13.188 $11.188 $11.188
Total Investment Return at Market Value (6) ........................... 9.65% 13.53% 10.30% (8.02%) 9.51%
Ratios and Supplemental Data
Net Assets Applicable to Common Shares, End of Period (000s omitted) .. $110,651 $119,552 $126,248 $116,939 $105,644
Ratio of Expenses to Average Net Assets (2) ........................... 1.95% 1.93% 1.85% 1.85% 1.91%
Ratio of Net Investment Income to Average Net Assets (3) .............. 10.60% 10.14% 8.72% 8.09% 9.63%
Portfolio Turnover Rate ............................................... 38% 28% 43% 38% 24%
Senior Securities
Total DARTS Outstanding (000s omitted) ................................ $60,000 $60,000 $60,000 $60,000 $60,000
Asset Coverage per Unit (4) ........................................... $283,164 $295,948 $310,691 $296,112 $273,324
Involuntary Liquidation Preference per Unit (5) ....................... $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
(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 1.27%, 1.27%, 1.25%,
1.25% and 1.23%, 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 6.91%, 6.69%, 5.86%, 5.45% and 6.18%, 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.
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
July 31, 2000
--------------------------------------------------------------------------------
The Schedule of Investments is a complete list of all securities owned by the
Patriot Global Dividend Fund on July 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 (1.98%)
Ocean Spray Cranberries, Inc.,
6.25% (R) ................................ 45,000 $3,285,000
----------
Automobile/Trucks (1.74%)
General Motors Corp., 9.12%,
Depositary Shares, Ser G ................... 113,414 2,877,880
----------
Banks - Foreign (3.84%)
Australia and New Zealand Banking
Group Ltd., 9.125% (Australia) ............ 154,900 4,017,719
Banco Bilbao Vizcaya International
(Gibraltar) Ltd., 9.75% (Spain) ........... 91,200 2,337,000
----------
6,354,719
----------
Banks - United States (10.31%)
ABN AMRO North America, Inc.,
6.59%, Ser H (R) ......................... 2,000 1,817,500
ABN AMRO North America, Inc.,
8.75%, Ser A (R) ......................... 540 561,600
Chase Manhattan Corp., 10.84%, Ser C ....... 179,700 5,031,600
FleetBoston Financial Corp., 6.75%,
Depositary Shares, Ser IV ................. 80,000 3,760,000
HSBC USA, Inc., $2.8575 .................... 72,000 2,961,000
J.P. Morgan & Company, Inc., 6.625%,
Depositary Shares, Ser H .................. 60,000 2,940,000
----------
17,071,700
----------
Broker Services (13.44%)
Bear Stearns Cos., Inc., 5.72%, Ser F ...... 46,000 1,788,250
Bear Stearns Cos., Inc., 5.49%, Ser G ...... 103,500 3,726,000
Lehman Brothers Holdings, Inc., 5.67%,
Depositary Shares, Ser D .................. 144,950 5,653,050
MARKET
ISSUER, DESCRIPTION NUMBER OF SHARES VALUE
------------------- ---------------- -----
Broker Services (continued)
Lehman Brothers Holdings, Inc.,
5.94%, Ser C .............................. 31,100 $1,337,300
Merrill Lynch & Co., Inc., 9.00%,
Depositary Shares, Ser A .................. 168,000 4,861,500
Morgan Stanley Group, Inc., 7.75%,
Depositary Shares ......................... 100,000 4,900,000
----------
22,266,100
----------
Conglomerates (0.79%)
Grand Metropolitan Delaware, L.P.,
9.42%, Gtd Ser A .......................... 51,000 1,306,875
----------
Equipment Leasing (2.45%)
AMERCO, 8.50%, Ser A ....................... 162,000 4,050,000
----------
Finance (8.14%)
Citigroup, Inc., 6.231%, Depositary Shares,
Ser H ..................................... 85,200 3,876,600
Citigroup, Inc., 8.40%, Depositary Shares,
Ser K ..................................... 191,000 4,894,375
SLM Holding Corp., 6.97%, Ser A ............ 100,000 4,712,500
----------
13,483,475
----------
Media (1.33%)
Shaw Communications, Inc., 8.45%,
Ser A (Canada) ............................ 99,600 2,203,650
----------
Oil & Gas (3.34%)
Anadarko Petroleum Corp., 5.46%,
Depositary Shares ......................... 5,000 375,000
Apache Corp., 5.68%, Depositary Shares,
Ser B ..................................... 11,300 841,850
Devon Energy Corp., 6.49%, Ser A ........... 50,000 4,309,500
----------
5,526,350
----------
Utilities (15.94%)
Alabama Power Co., 5.20% ................... 210,000 4,095,000
Baltimore Gas & Electric Co., 6.99%,
Ser 1995 .................................. 10,000 954,500
El Paso Tennessee Pipeline Co., 8.25%,
Ser A ..................................... 146,000 7,373,000
Entergy London Capital, L.P., 8.625%,
Ser A ..................................... 67,500 1,611,563
FPC Capital I, 7.10%, Ser A ................ 80,400 1,693,425
Pacific Enterprises, $4.50 ................. 19,750 1,273,875
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)
PSI Energy, Inc., 6.875% ................... 42,500 $3,931,250
Public Service Electric & Gas Co.,
6.92% ..................................... 7,000 644,000
South Carolina Electric & Gas Co.,
6.52% ..................................... 25,000 2,261,250
TDS Capital Trust II, 8.04% ................ 118,000 2,581,250
----------
26,419,113
----------
TOTAL PREFERRED STOCKS
(Cost $114,583,798) (63.30%) 104,844,862
-------- -----------
COMMON STOCKS
Utilities (36.24%)
Alliant Energy Corp. ....................... 127,420 3,352,739
Ameren Corp. ............................... 20,000 723,750
CH Energy Group, Inc. ...................... 107,300 3,500,663
CMP Group, Inc. ............................ 70,000 2,038,750
Consolidated Edison, Inc. .................. 56,000 1,697,500
Dominion Resources, Inc. ................... 47,500 2,158,281
DTE Energy Co. ............................. 111,900 3,510,863
Duke Energy Corp. .......................... 25,000 1,542,188
Eastern Enterprises ........................ 58,200 3,644,775
Energy East Corp. .......................... 100,000 1,887,500
Florida Progress Corp. ..................... 35,000 1,715,000
Kansas City Power & Light Co. .............. 119,000 2,841,125
KeySpan Corp. .............................. 59,000 1,873,250
LG&E Energy Corp. .......................... 119,500 2,897,875
Montana Power Co. .......................... 30,000 868,125
Northern States Power Co. .................. 40,000 882,500
NSTAR ...................................... 76,000 3,078,000
OGE Energy Corp. ........................... 120,000 2,280,000
Potomac Electric Power Co. ................. 149,000 3,678,436
Puget Sound Energy, Inc. ................... 112,800 2,559,150
Reliant Energy, Inc. ....................... 69,600 2,331,600
Sempra Energy .............................. 33,000 618,750
Sierra Pacific Resources ................... 254,000 3,587,750
TECO Energy, Inc. .......................... 138,700 3,042,731
UtiliCorp United, Inc. ..................... 30,000 639,375
Western Resources, Inc. .................... 80,400 1,271,325
WPS Resources Corp. ........................ 60,400 1,823,325
----------
TOTAL COMMON STOCKS
(Cost $59,874,945) (36.24%) 60,045,326
-------- ----------
INTEREST PAR VALUE MARKET
ISSUER, DESCRIPTION RATE (000s OMITTED) VALUE
------------------- -------- -------------- ------
SHORT-TERM INVESTMENTS
Commercial Paper (0.23%)
Chevron USA, Inc.,
08-01-00 ......................... 6.48% $377 $377,000
------------
TOTAL SHORT-TERM INVESTMENTS (0.23%) 377,000
--------- ------------
TOTAL INVESTMENTS (99.77%) 165,267,188
--------- ------------
OTHER ASSETS AND LIABILITIES, NET (0.23%) 376,863
--------- ------------
TOTAL NET ASSETS (100.00%) $165,644,051
========= ============
(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 $5,664,100 or 3.42% of net assets as of July 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.
SEE NOTES TO FINANCIAL STATEMENTS.
10
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=========================NOTES TO FINANCIAL STATEMENTS==========================
John Hancock Funds - Patriot Global Dividend Fund
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. Therefore, no federal income tax provision is required.
Additionally, net capital losses of $212,687 attributable to security
transactions incurred after October 31, 1999 are treated as arising on the first
day (August 1, 2000) of the Fund's next taxable year.
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, 2000, which have 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 4.89% during
the year ended July 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
11
<PAGE>
=========================NOTES TO FINANCIAL STATEMENTS==========================
John Hancock Funds - Patriot Global Dividend Fund
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 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 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 year
ended July 31, 2000, aggregated $53,510,857 and $38,848,648, respectively. There
were no purchases or sales of obligations of the U.S. government and its
agencies during the year ended July 31, 2000.
The cost of investments owned at July 31, 2000 (including short-term
investments) for federal income tax purposes was $175,155,468. Gross unrealized
appreciation and depreciation of investments aggregated $3,941,745 and
$13,830,025, respectively, resulting in net unrealized depreciation of
$9,888,280.
NOTE D -
RECLASSIFICATION OF CAPITAL ACCOUNTS
During the year ended July 31, 2000, the Fund has reclassified amounts to
reflect an increase in undistributed net investment income of $81,151, an
increase in accumulated net realized gain on investments of $1,159 and a
decrease in capital paid-in of $82,310. This represents the amount necessary to
report these balances on a tax basis, excluding certain temporary differences,
as of July 31, 2000. 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 book/tax differences in
accounting for deferred compensation and federal excise tax. The calculation of
net investment income per share in the financial highlights excludes these
adjustments.
12
<PAGE>
================================================================================
John Hancock Funds - Patriot Global Dividend Fund
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders
John Hancock Patriot Global Dividend Fund
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of John Hancock Patriot Global Dividend Fund (the
"Fund") as of July 31, 2000, the related statement of operations for the year
then ended, the statement of changes in net assets for the years ended July 31,
1999 and 2000 and the financial highlights for each of the years in the
four-year period ended July 31, 2000. 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. The financial highlights for the year ended July 31, 1996
were audited by other auditors whose report, dated September 6, 1996, expressed
an unqualified opinion on those financial highlights.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. 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 at July 31, 2000 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, such financial statements and financial highlights
present fairly, in all material respects, the financial position of the Fund at
July 31, 2000, the results of its operations, the changes in its net assets, and
its financial highlights for the respective stated periods in conformity with
accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
August 25, 2000
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 July 31,
2000.
All of the dividends paid for the fiscal year are taxable as ordinary
income. Distributions to preferred and common shareholders were 92.94% qualified
for the dividends-received deduction available to corporations.
Shareholders will be mailed a 2000 U.S. Treasury Department Form
1099-DIV in January 2001. This will reflect the total of all distributions which
are taxable for calendar year 2000.
13
<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.
14
<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).
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 held with a brokerage firm, you should contact that
firm, bank or other nominee for assistance.
SHAREHOLDER MEETING
On March 16, 2000, the Annual Meeting of John Hancock Patriot Global Dividend
Fund (the "Fund") was held to elect four Trustees and to ratify the actions of
the Trustees in selecting independent auditors for the Fund.
The common shareholders elected the following Trustees to serve until
their respective successors are duly elected and qualified, with the votes
tabulated as follows:
WITHHELD
FOR AUTHORITY
--- ---------
Maureen R. Ford 7,399,809 257,208
Charles L. Ladner 7,400,599 256,418
The preferred shareholders elected Ronald R. Dion and Richard S.
Scipione to serve until their respective successors are duly elected and
qualified, with the votes tabulated as follows: 544 FOR and 0 WITHHELD
AUTHORITY.
The shareholders also ratified the Trustees' selection of Deloitte &
Touche LLP as the Fund's independent auditors for the fiscal year ending July
31, 2000, with the votes tabulated as follows: 7,542,563 FOR, 70,471 AGAINST and
44,527 ABSTAINING.
15
<PAGE>
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