JOHN HANCOCK INSTITUTIONAL SERIES TRUST
Supplements to Prospectus dated December 2, 1996
John Hancock International Equity Fund
The paragraph under the following heading in the "Organization and Management of
the Funds" section on page 23 of the prospectus is replaced as follows:
International Equity Fund
Miren Etcheverry, John L.F. Wills and Gerardo J. Espinoza lead the portfolio
management team. Ms. Etcheverry and Mr. Espinoza, senior vice presidents, joined
John Hancock Funds in December 1996; they have analyzed and managed
international investments since 1978 and 1979, respectively. Mr. Wills is a
senior vice president of the Adviser and managing director of the subadviser,
John Hancock Advisers International, Ltd. He joined John Hancock Funds in 1987
and has been in the investment business since 1969.
January 16, 1997
John Hancock Fundamental Value Fund
Replace the first five paragraphs on page 15 of the Prospectus with the
following:
In selecting equity securities for the Fund, the Adviser emphasizes issuers
whose equity securities trade at valuation ratios lower than comparable issuers
or the Standard and Poor's Composite Index. Some of the valuation tools used
include price to earnings, price to cash flow and price to sales ratios and
earnings discount models. The Fund's portfolio will also include securities that
the Adviser considers to have the potential for capital appreciation, due to
potential recognition of earnings power or asset value which is not fully
reflected in the securities' current market value. The Adviser attempts to
identify investments which possess characteristics, such as high relative value,
intrinsic value, going concern value, net asset value and replacement book
value, which are believed to limit sustained downside price risk, generally
referred to as the "margin of safety" concept. The Adviser also considers an
issuer's financial strength, competitive position, projected future earnings and
dividends and other investment criteria. These securities are collectively
referred to as "fundamental value" securities.
The Fund's investment policy reflects the Adviser's belief that while the
securities markets tend to be efficient, sufficiently persistent price anomalies
exist which the strategically disciplined active equity manager can exploit in
seeking to achieve an above-average rate of return.
The Fund's investments may include securities of both large, widely traded
companies and smaller, less well known issuers. Higher risks are often
associated with investments in companies with smaller market capitalizations.
See "Smaller Capitalization Companies."
The Fund's investments in fixed-income securities may include U.S. Government
securities and convertible and non-convertible corporate preferred stocks and
debt securities of U.S. and foreign issuers. Under normal market conditions, the
Fund's investments in fixed-income securities are not expected to exceed 15% of
the Fund's net assets. The market value of fixed-income securities varies
inversely with changes in the prevailing levels of interest rates. The market
value of convertible securities, while influenced by the prevailing level of
interest rates, is also affected by the changing value of the equity securities
into which they are convertible. The Fund may purchase fixed-income debt
securities with stated maturities of up to thirty years.
The fixed-income securities in which the Fund may invest, may be rated as low as
CC by S&P or Ca by Moody's and unrated securities of comparable credit quality
as determined by the Adviser. Fixed-income securities that are rated below BBB
by S&P or Baa by Moody's indicate obligations that are speculative to a high
degree and are often in default. Securities rated lower than BBB or Baa are high
risk securities generally referred to as "junk bonds." See "Lower Rated
Securities." See Appendix A to the Statement of Additional Information for a
description of the characteristics of obligations in the various rating
categories. The Fund is not obligated to dispose of securities whose issuers
subsequently are in default of which are downgraded below the above-stated
ratings.
Add Fundamental Value Fund to the first sentence of the paragraph entitled
"Lower Rated Securities" on page 30 and to the first sentence of the last
paragraph on page 30, of the Prospectus.
December 3, 1996
KB00S 1/97
