JHF III U.S. Growth Fund Class I (JSGIX) N-CSR Certified annual shareholder report (management investment company)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-21777
John Hancock Funds III
(Exact name of registrant as specified in charter)
601 Congress Street, Boston, Massachusetts 02210
(Address of principal executive offices) (Zip code)
Gordon M. Shone
Treasurer
601 Congress Street
Boston, Massachusetts 02210
(Name and address of agent for service)
Registrant's telephone number, including area code: 617-663-3000
Date of fiscal year end:	February 29
Date of reporting period:	February 29, 2008

ITEM 1. REPORT TO SHAREHOLDERS.

Discussion of Fund performance

By Grantham, Mayo, Van Otterloo & Co. LLC (GMO)

U.S. stocks went on a wild ride during the 12-month period, highlighted both by record highs for broad market indexes and conditions deemed poor enough to warrant numerous interventions by the Federal Reserve. For the period in full the S&P 500 Index returned –3.60%, a modest move that belied its frequent violent gyrations. Growth stocks outpaced value stocks during the period. Financials and consumer discretionary were the worst-performing sectors in the Russell 1000 Value Index, while energy stocks performed the best.

"U.S. stocks went on a wild ride
during the 12-month review
period…"

For the year ended February, 29, 2008, John Hancock Intrinsic Value Fund’s Class A, Class B, Class C, Class I, Class R1 and Class 1 shares returned –12.52%, –13.13%, –13.13%, –12.18%, –12.60% and –12.13%, respectively, at net asset value while the Russell 1000 Value Index returned –7.91% and the average large value fund monitored by Morningstar, Inc. returned –6.64% .

Sector selection added to relative returns while stock selection detracted. Sector weightings adding to relative returns included an underweight in financials, while sector weightings detracting from relative returns included an overweight in consumer discretionary. Stock selections in information technology added to relative returns, while picks in consumer discretionary and financials detracted. Individual names adding to returns versus the benchmark included overweight positions in Exxon Mobil Corp., Wal-Mart Stores, Inc. and Merck & Company, Inc., while overweight positions detracting from relative returns included Citigroup, Inc., Fannie Mae and Home Depot, Inc.

This commentary reflects the views of the portfolio management team through the end of the Fund’s period discussed in this report. The team’s statements reflect their own opinions. As such, they are in no way guarantees of future events and are not intended to be used as investment advice or a recommendation regarding any specific security. They are also subject to change at any time as market and other conditions warrant.

Intrinsic Value Fund | Annual report

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A look at performance

For the periods ended February 29, 2008

		Average annual returns				Cumulative total returns
		with maximum sales charge (POP)				with maximum sales charge (POP)
	Inception				Since				Since
Class	date	1-year	5-year	10-year	inception	1-year	5-year	10-year	inception
A	6-12-06	–16.88%	—	—	–2.50%	–16.88%	—	—	–4.26%
B	6-12-06	–17.14	—	—	–2.38	–17.14	—	—	–4.07
C	6-12-06	–13.93	—	—	–0.25	–13.93	—	—	–0.44
I 1	6-12-06	–12.18	—	—	0.83	–12.18	—	—	1.44
R11	6-12-06	–12.60	—	—	0.24	–12.60	—	—	0.41
1 1	6-12-06	–12.13	—	—	0.88	–12.13	—	—	1.52

Performance figures assume all distributions are reinvested. Public offering price (POP) figures reflect maximum sales charge on Class A shares of 5%, and the applicable contingent deferred sales charge (CDSC) on Class B and Class C shares. The Class B shares’ CDSC declines annually between years 1 to 6 according to the following schedule: 5, 4, 3, 3, 2, 1%. No sales charge will be assessed after the sixth year. Class C shares held for less than one year are subject to a 1% CDSC. Sales charge is not applicable for Class I, Class R1 and Class 1 shares.

The expense ratios of the Fund, both net (including any fee waivers or expense limitations) and gross (excluding any fee waivers or expense limitations), are set forth according to the most recent publicly available prospectuses for the Fund and may differ from the expense ratios disclosed in the Financial Highlights tables in this report. The waivers and expense limitations are contractual at least until 6-30-08. The net expenses are as follows: Class A — 1.34%, Class B — 2.04%, Class C — 2.04%, Class I — 0.95%, Class R1 — 1.69%, Class 1 — 0.90% . Had the fee waivers and expense limitations not been in place, the gross expenses would be as follows: Class A — 1.94%, Class B — 9.00%, Class C — 10.08%, Class I —17.60%, Class R1 — 20.85%, Class 1 — 1.44% .

The returns reflect past results and should not be considered indicative of future performance. The return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, the Fund’s current performance may be higher or lower than the performance shown. For performance data current to the most recent month end, please call 1-800-225-5291 or visit the Fund’s Web site at www.jhfunds.com.

The performance table above and the chart on the next page do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

The Fund’s performance results reflect any applicable expense reductions, without which the expenses increase and results would have been less favorable.

Performance is calculated with an opening price (prior day’s close) on the inception date.

¹ For certain types of investors as described in the Fund’s Class I, Class R1 and Class 1 share prospectuses.

Annual report | Intrinsic Value Fund

7

A look at performance

Growth of $10,000

This chart shows what happened to a hypothetical $10,000 investment in Intrinsic Value Fund Class A shares for the period indicated. For comparison, we’ve shown the same investment in the Russell 1000 Value Index.

			With maximum
Class	Period beginning	Without sales charge	sales charge	Index
B	6-12-06	$9,957	$9,593	$10,712
C 2	6-12-06	9,956	9,956	10,712
I 3	6-12-06	10,144	10,144	10,712
R13	6-12-06	10,041	10,041	10,712
1 3	6-12-06	10,152	10,152	10,712

Assuming all distributions were reinvested for the period indicated, the table above shows the value of a $10,000 investment in the Fund’s Class B, Class C, Class I, Class R1 and Class 1 shares, respectively, as of February 29, 2008. Performance of the classes will vary based on the difference in sales charges paid by shareholders investing in the different classes and the fee structure of those classes.

Russell 1000 Value Index is an unmanaged index containing those securities in the Russell 1000 Index with a less-than-average growth orientation.

It is not possible to invest directly in an index. Index figures do not reflect sales charges, which would have resulted in lower values if they did.

¹ NAV represents net asset value and POP represents public offering price.

² No contingent deferred sales charge applicable.

³ For certain types of investors as described in the Fund’s Class I, Class R1 and Class 1 share prospectuses.

Intrinsic Value Fund | Annual report

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Your expenses

These examples are intended to help you understand your ongoing operating expenses.

Understanding fund expenses

As a shareholder of the Fund, you incur two types of costs:

■ Transaction costs which include sales charges (loads) on purchases or redemptions (varies by share class), minimum account fee charge, etc.

■ Ongoing operating expenses including management fees, distribution and service fees (if applicable), and other fund expenses.

We are going to present only your ongoing operating expenses here.

Actual expenses/actual returns

This example is intended to provide information about your fund’s actual ongoing operating expenses, and is based on your fund’s actual return. It assumes an account value of $1,000.00 on September 1, 2007, with the same investment held until February 29, 2008.

	Account value	Ending value	Expenses paid during
	on 9-1-07	on 2-29-08	period on 2-29-081
Class A	$1,000.00	$858.12	$6.24
Class B	1,000.00	854.75	9.45
Class C	1,000.00	854.74	9.50
Class I	1,000.00	859.68	4.39
Class R1	1,000.00	858.80	5.45
Class 1	1,000.00	859.77	4.16

Together with the value of your account, you may use this information to estimate the operating expenses that you paid over the period. Simply divide your account value at February 29, 2008, by $1,000.00, then multiply it by the “expenses paid” for your share class from the table above. For example, for an account value of $8,600.00, the operating expenses should be calculated as follows:

Annual report | Intrinsic Value Fund

9

Your expenses

Hypothetical example for comparison purposes

This table allows you to compare your fund’s ongoing operating expenses with those of any other fund. It provides an example of the Fund’s hypothetical account values and hypothetical expenses based on each class’s actual expense ratio and an assumed 5% annualized return before expenses (which is not your fund’s actual return). It assumes an account value of $1,000.00 on September 1, 2007, with the same investment held until February 29, 2008. Look in any other fund shareholder report to find its hypothetical example and you will be able to compare these expenses.

	Account value on	Ending value on	Expenses paid during
	9-1-07	2-29-08	period on 2-29-081
Class A	$1,000.00	$1,018.15	$6.77
Class B	1,000.00	1,014.67	10.27
Class C	1,000.00	1,014.62	10.32
Class I	1,000.00	1,020.14	4.77
Class R1	1,000.00	1,019.00	5.92
Class 1	1,000.00	1,020.39	4.52

Remember, these examples do not include any transaction costs, such as sales charges; therefore, these examples will not help you to determine the relative total costs of owning different funds. If transaction costs were included, your expenses would have been higher. See the prospectus for details regarding transaction costs.

¹ Expenses are equal to the Fund’s annualized expense ratio of 1.35%, 2.05%, 2.06%, 0.95%, 1.18% and 0.90% for Class A, Class B, Class C, Class I, Class R1 and Class 1, respectively, multiplied by the average account value over the period, multiplied by the number of days in most recent fiscal half year/366 (to reflect the one-half year period).

Intrinsic Value Fund | Annual report

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Portfolio summary

Top 10 holdings1
Exxon Mobil Corp.	7.9%	Citigroup, Inc.	2.8%
Chevron Corp.	5.7%	Home Depot, Inc.	2.4%
ConocoPhillips	3.4%	UnitedHealth Group, Inc.	2.2%
Wal-Mart Stores, Inc.	3.4%	The Coca-Cola Company	2.0%
Pfizer, Inc.	2.9%	Merck & Company, Inc.	2.0%
Sector distribution1
Consumer non-cyclical	23%	Technology	6%
Energy	22%	Communications	6%
Financial	15%	Basic materials	2%
Consumer cyclical	14%	Utilities	2%
Industrial	7%	Other	3%

¹ As a percentage of net assets on February 29, 2008.

Annual report | Intrinsic Value Fund

11

F I N A N C I A L   S T A T E M E N T S

Fund’s investments

Securities owned by the Fund on 2-29-08

This schedule is divided into three main categories: common stocks, short-term investments and repurchase agreements. Common stocks are further broken down by industry group. Repurchase agreements, which represent the Fund’s cash position, are listed last.

Issuer	Shares	Value
Common stocks 96.51%		$17,953,838
(Cost $19,713,761)
Aerospace 0.83%		154,226
Alliant Techsystems, Inc. *	100	10,494
General Dynamics Corp.	500	40,925
Goodrich Corp.	200	11,846
Northrop Grumman Corp.	200	15,722
Rockwell Collins, Inc.	200	11,780
United Technologies Corp.	900	63,459
Aluminum 0.36%		66,852
Alcoa, Inc.	1,800	66,852
Apparel & Textiles 0.71%		132,976
Coach, Inc. *	1,100	33,352
Jones Apparel Group, Inc.	800	11,288
Liz Claiborne, Inc.	1,100	19,558
Mohawk Industries, Inc. *	200	14,282
NIKE, Inc. , Class B	400	24,080
VF Corp.	400	30,416
Auto Parts 0.79%		147,016
Autoliv, Inc.	100	4,990
AutoZone, Inc. *	200	23,016
BorgWarner, Inc.	400	17,244
Johnson Controls, Inc.	2,500	82,150
O’Reilly Automotive, Inc. *	400	10,784
TRW Automotive Holdings Corp. *	400	8,832
Auto Services 0.24%		45,343
AutoNation, Inc. *	1,700	24,769
Avis Budget Group, Inc. *	1,800	20,574
Automobiles 0.97%		180,604
Ford Motor Company *	11,300	73,789
General Motors Corp.	1,700	39,576
PACCAR, Inc.	1,550	67,239

See notes to financial statements

Intrinsic Value Fund | Annual report

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F I N A N C I A L   S T A T E M E N T S

Issuer	Shares	Value
Banking 3.11%		$578,854
Bank of America Corp.	8,100	321,894
BB&T Corp.	1,400	43,582
Comerica, Inc.	1,100	39,864
Fifth Third Bancorp	600	13,740
First Horizon National Corp.	800	12,992
National City Corp.	3,400	53,924
U. S. Bancorp	2,900	92,858
Biotechnology 0.58%		107,166
Amgen, Inc. *	700	31,864
Biogen Idec, Inc. *	800	46,688
Charles River Laboratories International, Inc. *	200	11,716
Invitrogen Corp. *	200	16,898
Broadcasting 0.18%		33,850
Discovery Holding Company *	1,000	22,570
Liberty Global, Inc. , Class A *	300	11,280
Building Materials & Construction 0.16%		29,982
Lennox International, Inc.	300	11,292
Masco Corp.	1,000	18,690
Business Services 0.67%		125,305
Affiliated Computer Services, Inc. , Class A *	500	25,375
Cadence Design Systems, Inc. *	700	7,434
FactSet Research Systems, Inc.	200	10,528
Fiserv, Inc. *	900	47,358
NCR Corp. *	700	15,512
R. R. Donnelley & Sons Company	600	19,098
Cellular Communications 0.05%		9,380
Telephone & Data Systems, Inc.	200	9,380
Chemicals 0.55%		102,268
Air Products & Chemicals, Inc.	200	18,266
Celanese Corp. , Series A	300	11,670
Dow Chemical Company	1,000	37,690
FMC Corp.	200	11,322
Lubrizol Corp.	400	23,320
Colleges & Universities 0.06%		11,880
Career Education Corp. *	800	11,880
Commercial Services 0.07%		12,876
Shaw Group, Inc. *	200	12,876
Computers & Business Equipment 3.89%		722,770
Cisco Systems, Inc. *	9,200	224,204
Dell, Inc. *	5,600	111,160
EMC Corp. *	5,700	88,578
Foundry Networks, Inc. *	600	7,122
Hewlett-Packard Company	1,000	47,770

See notes to financial statements

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F I N A N C I A L   S T A T E M E N T S

Issuer	Shares	Value
Computers & Business Equipment (continued)
Ingram Micro, Inc. , Class A *	1,000	$15,270
International Business Machines Corp.	1,300	148,018
Juniper Networks, Inc. *	600	16,092
Lexmark International, Inc. *	500	16,515
Tech Data Corp. *	700	23,345
Western Digital Corp. *	800	24,696
Construction & Mining Equipment 0.07%		12,093
Rowan Companies, Inc.	300	12,093
Construction Materials 0.10%		18,020
Trane, Inc.	400	18,020
Cosmetics & Toiletries 0.94%		174,641
Colgate-Palmolive Company	300	22,827
Kimberly-Clark Corp.	400	26,072
Procter & Gamble Company	1,900	125,742
Crude Petroleum & Natural Gas 2.77%		515,272
Apache Corp.	1,000	114,710
Cimarex Energy Company	300	15,810
Devon Energy Corp.	500	51,360
Forest Oil Corp. *	200	9,866
Hess Corp.	400	37,272
Occidental Petroleum Corp.	3,200	247,584
Patterson-UTI Energy, Inc.	600	14,238
Sunoco, Inc.	400	24,432
Drugs & Health Care 0.26%		47,982
Wyeth	1,100	47,982
Educational Services 0.22%		41,118
Apollo Group, Inc. , Class A *	400	24,552
ITT Educational Services, Inc. *	300	16,566
Electrical Utilities 1.46%		271,731
American Electric Power Company, Inc.	800	32,736
Constellation Energy Group, Inc.	400	35,340
Edison International	800	39,520
Entergy Corp.	300	30,822
FPL Group, Inc.	500	30,145
Mirant Corp. *	300	11,100
PPL Corp.	200	9,076
Public Service Enterprise Group, Inc.	1,200	52,920
Quanta Services, Inc. *	400	9,552
Reliant Energy, Inc. *	900	20,520
Electronics 0.62%		115,612
Arrow Electronics, Inc. *	400	13,044
Avnet, Inc. *	600	20,226
L-3 Communications Holdings, Inc.	600	63,774
Synopsys, Inc. *	800	18,568

See notes to financial statements

Intrinsic Value Fund | Annual report

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F I N A N C I A L   S T A T E M E N T S

Issuer	Shares	Value
Energy 0.09%		$16,508
NRG Energy, Inc. *	400	16,508
Financial Services 4.30%		799,169
Citigroup, Inc.	21,900	519,249
Countrywide Financial Corp. (a)	1,400	8,834
Federal Home Loan Mortgage Corp.	300	7,554
Federal National Mortgage Association	7,200	199,080
Janus Capital Group, Inc.	400	9,688
Leucadia National Corp.	300	13,578
T. Rowe Price Group, Inc. (c)	200	10,106
Washington Mutual, Inc.	2,100	31,080
Food & Beverages 3.55%		659,767
Coca-Cola Enterprises, Inc.	400	9,772
Kraft Foods, Inc. , Class A	1,222	38,090
PepsiAmericas, Inc.	500	12,650
PepsiCo, Inc.	2,700	187,812
Pilgrim’s Pride Corp. (a)	300	7,038
The Coca-Cola Company	6,400	374,144
Tyson Foods, Inc. , Class A	2,100	30,261
Forest Products 0.16%		30,600
Weyerhaeuser Company	500	30,600
Healthcare Products 3.27%		608,596
Johnson & Johnson	5,400	334,584
Medtronic, Inc.	1,100	54,296
Patterson Companies, Inc. *	600	21,120
Stryker Corp.	1,200	78,132
Zimmer Holdings, Inc. *	1,600	120,464
Healthcare Services 5.55%		1,032,455
Cardinal Health, Inc.	1,400	82,796
Coventry Health Care, Inc. *	900	46,683
Express Scripts, Inc. *	1,100	65,010
McKesson Corp.	3,000	176,280
Medco Health Solutions, Inc. *	2,000	88,620
Quest Diagnostics, Inc.	600	28,602
UnitedHealth Group, Inc.	9,000	418,320
WellPoint, Inc. *	1,800	126,144
Holdings Companies/Conglomerates 1.71%		318,144
General Electric Company	9,600	318,144
Homebuilders 0.45%		84,043
Centex Corp.	600	13,314
D. R. Horton, Inc.	1,500	21,045
KB Home (a)	300	7,179
Lennar Corp. , Class A (a)	700	13,027
M. D. C. Holdings, Inc.	400	16,752
Toll Brothers, Inc. *	600	12,726

See notes to financial statements

Annual report | Intrinsic Value Fund

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F I N A N C I A L   S T A T E M E N T S

Issuer	Shares	Value
Hotels & Restaurants 0.58%		$108,220
McDonald’s Corp.	2,000	108,220
Household Products 0.10%		18,566
Energizer Holdings, Inc. *	200	18,566
Industrial Machinery 1.51%		280,648
AGCO Corp. *	200	12,972
Cummins, Inc.	400	20,152
Deere & Company	1,600	136,336
Ingersoll-Rand Company, Ltd. , Class A	600	25,116
ITT Corp.	300	16,872
Kennametal, Inc.	400	12,148
Pall Corp.	300	11,811
Parker-Hannifin Corp.	700	45,241
Insurance 7.87%		1,464,450
ACE, Ltd.	1,100	61,864
Aetna, Inc.	1,500	74,400
AFLAC, Inc.	1,300	81,133
Allstate Corp.	5,100	243,423
Ambac Financial Group, Inc. (a)	800	8,912
American International Group, Inc.	6,200	290,532
Aon Corp.	800	33,288
Chubb Corp.	1,200	61,080
CIGNA Corp.	800	35,664
Commerce Group, Inc.	400	14,496
Everest Re Group, Ltd.	100	9,688
First American Corp.	700	24,381
Hartford Financial Services Group, Inc.	500	34,950
HCC Insurance Holdings, Inc.	400	9,624
MBIA, Inc. (a)	800	10,376
MGIC Investment Corp. (a)	800	11,848
Nationwide Financial Services, Inc. , Class A	400	16,500
Old Republic International Corp.	1,600	21,952
Progressive Corp. *	2,600	47,658
Protective Life Corp.	400	15,436
Prudential Financial, Inc.	900	65,673
SAFECO Corp.	500	23,130
The Travelers Companies, Inc.	3,300	153,153
Torchmark Corp.	700	42,182
Transatlantic Holdings, Inc.	200	13,480
UnumProvident Corp.	2,100	48,111
W. R. Berkley Corp.	400	11,516

See notes to financial statements

Intrinsic Value Fund | Annual report

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F I N A N C I A L   S T A T E M E N T S

Issuer	Shares	Value
International Oil 17.68%		$3,288,176
Anadarko Petroleum Corp.	1,100	70,114
Chevron Corp.	12,200	1,057,252
ConocoPhillips	7,700	636,867
Exxon Mobil Corp.	16,900	1,470,469
Murphy Oil Corp.	200	16,076
Noble Corp.	200	9,830
Weatherford International, Ltd. *	400	27,568
Internet Content 0.25%		47,118
Google, Inc. , Class A *	100	47,118
Internet Retail 0.44%		82,637
eBay, Inc. *	2,700	71,172
Expedia, Inc. *	500	11,465
Internet Software 0.22%		41,301
McAfee, Inc. *	300	9,981
VeriSign, Inc. *	900	31,320
Leisure Time 0.03%		4,887
Brunswick Corp.	300	4,887
Life Sciences 0.05%		9,928
PerkinElmer, Inc.	400	9,928
Liquor 0.13%		23,545
Anheuser-Busch Companies, Inc.	500	23,545
Manufacturing 1.87%		348,626
3M Company	1,600	125,440
Danaher Corp.	700	51,905
Eaton Corp.	200	16,126
Harley-Davidson, Inc.	800	29,728
Honeywell International, Inc.	1,000	57,540
Illinois Tool Works, Inc.	200	9,814
Pentair, Inc.	300	9,786
SPX Corp.	100	10,230
Tyco International, Ltd.	950	38,057
Metal & Metal Products 0.09%		16,638
Reliance Steel & Aluminum Company	300	16,638
Office Furnishings & Supplies 0.04%		7,959
Office Depot, Inc. *	700	7,959
Paper 0.06%		11,491
Smurfit-Stone Container Corp. *	1,100	8,745
Temple-Inland, Inc.	200	2,746
Petroleum Services 1.10%		203,766
Helmerich & Payne, Inc.	300	13,449
Tidewater, Inc.	200	11,230
Valero Energy Corp.	3,100	179,087

See notes to financial statements

Annual report | Intrinsic Value Fund

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F I N A N C I A L   S T A T E M E N T S

Issuer	Shares	Value
Pharmaceuticals 6.73%		$1,252,532
Abbott Laboratories	1,400	74,970
AmerisourceBergen Corp.	1,700	70,924
Bristol-Myers Squibb Company	900	20,349
Eli Lilly & Company	1,200	60,024
Forest Laboratories, Inc. *	1,300	51,701
Gilead Sciences, Inc. *	600	28,392
King Pharmaceuticals, Inc. *	1,400	14,840
Merck & Company, Inc.	8,400	372,120
Pfizer, Inc.	24,600	548,088
Watson Pharmaceuticals, Inc. *	400	11,124
Publishing 0.43%		79,687
Gannett Company, Inc.	2,100	63,315
McGraw-Hill Companies, Inc.	400	16,372
Railroads & Equipment 0.27%		49,904
Union Pacific Corp.	400	49,904
Real Estate 0.15%		27,810
Annaly Capital Management, Inc. , REIT	1,000	20,690
Thornburg Mortgage, Inc. , REIT	800	7,120
Retail Grocery 0.34%		62,825
SUPERVALU, Inc.	1,100	28,875
The Kroger Company	1,400	33,950
Retail Trade 9.84%		1,830,925
Abercrombie & Fitch Company, Class A	400	31,012
Advance Auto Parts, Inc.	300	10,062
American Eagle Outfitters, Inc.	600	12,822
Bed Bath & Beyond, Inc. *	1,100	31,174
Best Buy Company, Inc.	200	8,602
BJ’s Wholesale Club, Inc. *	600	18,936
Costco Wholesale Corp.	200	12,384
CVS Caremark Corp.	900	36,342
Dollar Tree Stores, Inc. *	1,300	34,879
Family Dollar Stores, Inc.	700	13,405
Home Depot, Inc.	16,800	446,040
Kohl’s Corp. *	1,100	48,884
Lowe’s Companies, Inc.	10,600	254,082
Staples, Inc.	2,100	46,725
Target Corp.	2,300	121,003
Tiffany & Company	400	15,056
Walgreen Company	1,500	54,765
Wal-Mart Stores, Inc.	12,800	634,752
Semiconductors 0.42%		78,718
Cypress Semiconductor Corp. *	400	8,696
Intel Corp.	1,600	31,920

See notes to financial statements

Intrinsic Value Fund | Annual report

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F I N A N C I A L   S T A T E M E N T S

Issuer	Shares	Value
Semiconductors (continued)
Intersil Corp. , Class A	400	$9,308
KLA-Tencor Corp.	400	16,804
Teradyne, Inc. *	1,000	11,990
Software 2.57%		478,487
CA, Inc.	800	18,304
Compuware Corp. *	1,700	13,532
Intuit, Inc. *	400	10,624
Microsoft Corp.	12,100	329,362
Novell, Inc. *	1,700	12,665
Oracle Corp. *	5,000	94,000
Telecommunications Equipment & Services 2.33%		432,684
ADC Telecommunications, Inc. *	700	9,569
QUALCOMM, Inc.	3,900	165,243
Verizon Communications, Inc.	7,100	257,872
Telephone 0.62%		115,312
AT&T, Inc.	3,127	108,913
Sprint Nextel Corp.	900	6,399
Tobacco 1.38%		255,990
Altria Group, Inc.	3,500	255,990
Toys, Amusements & Sporting Goods 0.23%		42,513
Hasbro, Inc.	900	23,193
Mattel, Inc.	1,000	19,320
Transportation 0.07%		12,544
Overseas Shipholding Group, Inc.	200	12,544
Trucking & Freight 0.37%		68,852
FedEx Corp.	400	35,252
United Parcel Service, Inc. , Class B	400	28,096
YRC Worldwide, Inc. *	400	5,504

See notes to financial statements

Annual report | Intrinsic Value Fund

19

F I N A N C I A L   S T A T E M E N T S

	Principal
Issuer, description, maturity date	amount	Value
Short-term investments 0.36%		$66,544
(Cost $66,544)
John Hancock Cash Investment Trust, 3.5681% (c)(f)	$66,544	$66,544
Repurchase agreements 3.30%		$614,000
(Cost $614,000)
Repurchase Agreement with State Street Corp. dated 2-29-08 at
2.35% to be repurchased at $614,120 on 3-3-08,
collateralized by $635,000 Federal National Mortgage
Association, 5.57%, due 7-14-28 (valued at $627,856,
including interest)	$614,000	$614,000
Total investments (cost $20,394,305)† 100.17%		$18,634,382
Liabilities in excess of other assets (0.17%)		(31,753)
Total net assets 100.00%		$18,602,629

Percentages are stated as a percent of net assets.

REIT Real Estate Investment Trust

* Non-income producing.

(a) All or a portion of this security was out on loan.

(c) Investment is an affiliate of the Trust’s adviser or subadviser.

(f) John Hancock Cash Investment Trust is managed by MFC Global Investment Management (U.S.), LLC. The rate shown is the seven-day effective yield at period end.

† At February 29, 2008, the aggregate cost of investment securities for federal income tax purposes was $20,445,250. Net unrealized depreciation aggregated $1,810,868, of which $821,067 related to appreciated investment securities and $2,631,935 related to depreciated investment securities.

See notes to financial statements

Intrinsic Value Fund | Annual report

20

F I N A N C I A L   S T A T E M E N T S

Financial statements

Statement of assets and liabilities 2-29-08

This Statement of Assets and Liabilities is the Fund’s balance sheet. It shows the value of what the Fund owns, is due and owes. You’ll also find the net asset value and the maximum public offering price per share.

Assets
Investments in unaffiliated issuers, at value (cost $19,713,761) including
$65,239 of securities loaned (Note 2)	$17,953,838
Repurchase agreement, at value (cost $614,000) (Note 2)	614,000
Investments in affiliated issuers, at value (cost $66,544) (Note 2)	66,544
Total investments, at value (cost $20,394,305)	18,634,382
Cash	795
Cash collateral at broker for futures contracts	45,360
Receivable for fund shares sold	14,248
Dividends and interest receivable (net of tax)	41,399
Receivable due from adviser	3,880
Other assets	96
Total assets	18,740,160
Liabilities
Payable for fund shares repurchased	8,899
Payable upon return of securities loaned (Note 2)	66,544
Payable for futures variation margin	10,350
Payable to affiliates
Fund administration fees	193
Transfer agent fees	2,816
Distribution and service fees	195
Trustees’ fees	73
Other payables and accrued expenses	48,461
Total liabilities	137,531
Net assets
Capital paid-in	$20,812,480
Undistributed net investment income	26,236
Accumulated undistributed net realized gain (loss) on investments and futures contracts	(464,411)
Net unrealized appreciation (depreciation) on investments and futures contracts	(1,771,676)
Net assets	$18,602,629

See notes to financial statements

Annual report | Intrinsic Value Fund

21

F I N A N C I A L   S T A T E M E N T S

Statement of assets and liabilities (continued)

Net asset value per share
The Funds have an unlimited number of shares authorized with no par value.
Net asset value is calculated by dividing the net assets of each class of shares
by the number of outstanding shares in the class.
Class A
Net assets	$17,554,568
Shares outstanding	964,495
Net asset value and redemption price per share	$18.20
Class B1
Net assets	$289,866
Shares outstanding	15,942
Net asset value and offering price per share	$18.18
Class C1
Net assets	$413,575
Shares outstanding	22,744
Net asset value and offering price per share	$18.18
Class I
Net assets	$134,704
Shares outstanding	7,396
Net asset value, offering price and redemption price per share	$18.21
Class R1
Net assets	$108,385
Shares outstanding	5,968
Net asset value, offering price and redemption price per share	$18.16
Class 1
Net assets	$101,531
Shares outstanding	5,575
Net asset value, offering price and redemption price per share	$18.21
Maximum public offering price per share
Class A (net asset value per share ÷ 95%)2	$19.16

¹ Redemption price per share is equal to the net asset value less any applicable contingent deferred sales charge.

² On single retail sales of less than $50,000. On sales of $50,000 or more and on group sales the offering price is reduced.

See notes to financial statements

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22

F I N A N C I A L   S T A T E M E N T S

Statement of operations For the year ended 2-29-08

This 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.

Investment income
Dividends	$470,439
Interest	32,387
Securities lending	849
Income from affiliated issuers	205
Total investment income	503,880
Expenses
Investment management fees (Note 3)	163,557
Distribution and service fees (Note 3)	68,124
Transfer agent fees (Note 3)	18,272
Fund administration fees (Note 3)	9,581
Blue sky fees (Note 3)	76,510
Audit and legal fees	66,930
Printing and postage fees (Note 3)	7,298
Custodian fees	27,821
Trustees’ fees (Note 3)	1,535
Registration and filing fees	24,473
Miscellaneous	295
Total expenses	464,396
Less expense reductions (Note 3)	(176,615)
Net expenses	287,781
Net investment income	216,099
Realized and unrealized gain (loss)
Net realized gain (loss) on
Investments in unaffiliated issuers	628,405
Futures contracts	(11,356)
	617,049
Change in net unrealized appreciation (depreciation) of
Investments in unaffiliated issuers	(3,482,374)
Futures contracts	(8,396)
	(3,490,770)
Net realized and unrealized gain (loss)	(2,873,721)
Increase (decrease) in net assets from operations	($2,657,622)

See notes to financial statements

Annual report | Intrinsic Value Fund

23

F I N A N C I A L   S T A T E M E N T S

Statement of changes in net assets

These Statements of Changes in Net Assets show how the value of the Fund’s net assets has changed during the last two periods. The difference reflects earnings less expenses, any investment gains and losses, distributions, if any, paid to shareholders and the net of Fund share transactions.

	Year	Year
	ended	ended
	2-28-071	2-29-08
Increase (decrease) in net assets
From operations
Net investment income	$143,510	$216,099
Net realized gain (loss)	526,061	617,049
Change in net unrealized appreciation (depreciation)	1,719,094	(3,490,770)
Increase (decrease) in net assets resulting from operations	2,388,665	(2,657,622)
Distributions to shareholders
From net investment income
Class A	(108,035)	(224,181)
Class B	(1,017)	(1,449)
Class C	(762)	(2,335)
Class I	(985)	(2,359)
Class R1	(620)	(1,273)
Class 1	(914)	(1,843)
From net realized gain
Class A	(179,361)	(1,330,407)
Class B	(3,802)	(23,393)
Class C	(2,850)	(37,862)
Class I	(1,241)	(10,289)
Class R1	(1,118)	(8,307)
Class 1	(1,118)	(7,782)
Total distributions	(301,823)	(1,651,480)
From Fund share transactions (Note 6)	18,224,388	2,600,501
Total increase (decrease)	20,311,230	(1,708,601)
Net assets
Beginning of year	—	20,311,230
End of year	$20,311,230	$18,602,629
Undistributed net investment income	$43,586	$26,236

¹ Period from 6-12-06 (commencement of operations) to 2-28-07.

See notes to financial statements

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F I N A N C I A L   S T A T E M E N T S

Financial highlights

The Financial Highlights show how the Fund’s net asset value for a share has changed since the end of the previous period.

CLASS A SHARES

Period ended	2-28-07 1	2-29-08
Per share operating performance
Net asset value, beginning of period	$20.00	$22.68
Net investment income (loss)2	0.18	0.24
Net realized and unrealized gain
(loss) on investments	2.85	(2.93)
Total from investment operations	3.03	(2.69)
Less distributions
From net investment income	(0.13)	(0.26)
From net realized gain	(0.22)	(1.53)
	(0.35)	(1.79)
Net asset value, end of period	$22.68	$18.20
Total return3,4 (%)	15.19 5	(12.52)
Ratios and supplemental data
Net assets, end of period (in millions)	$19	$18
Ratios (as a percentage of average net assets):
Expenses before reductions	1.94 6	1.89
Expenses net of fee waivers, if any	1.34 6	1.35
Expenses net of all fee waivers and credits	1.34 6	1.35
Net investment income (loss)	1.13 6	1.05
Portfolio turnover (%)	32 5	72

¹ Class A shares began operations on 6-12-06.

² Based on the average of the shares outstanding.

³ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁴ Assumes dividend reinvestment.

⁵ Not annualized.

⁶ Annualized.

See notes to financial statements

Annual report | Intrinsic Value Fund

25

F I N A N C I A L   S T A T E M E N T S

Financial highlights

CLASS B SHARES

Period ended	2-28-07 1	2-29-08
Per share operating performance
Net asset value, beginning of period	$20.00	$22.64
Net investment income (loss)2	0.07	0.08
Net realized and unrealized gain
(loss) on investments	2.85	(2.92)
Total from investment operations	2.92	(2.84)
Less distributions
From net investment income	(0.06)	(0.09)
From net realized gain	(0.22)	(1.53)
	(0.28)	(1.62)
Net asset value, end of period	$22.64	$18.18
Total return3,4 (%)	14.61 5	(13.13)
Ratios and supplemental data
Net assets, end of period (in millions)	— 6	— 6
Ratios (as a percentage of average net assets):
Expenses before reductions	9.00 7	6.13
Expenses net of fee waivers, if any	2.04 7	2.06
Expenses net of all fee waivers and credits	2.04 7	2.05
Net investment income (loss)	0.42 7	0.35
Portfolio turnover (%)	32 5	72

¹ Class B shares began operations on 6-12-06.

² Based on the average of the shares outstanding.

³ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁴ Assumes dividend reinvestment.

⁵ Not annualized.

⁶ Less than $500,000.

⁷ Annualized.

See notes to financial statements

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F I N A N C I A L   S T A T E M E N T S

Financial highlights

CLASS C SHARES

Period ended	2-28-07 1	2-29-08
Per share operating performance
Net asset value, beginning of period	$20.00	$22.64
Net investment income (loss)2	0.06	0.08
Net realized and unrealized gain
(loss) on investments	2.86	(2.92)
Total from investment operations	2.92	(2.84)
Less distributions
From net investment income	(0.06)	(0.09)
From net realized gain	(0.22)	(1.53)
	(0.28)	(1.62)
Net asset value, end of period	$22.64	$18.18
Total return3,4 (%)	14.61 5	(13.13)
Ratios and supplemental data
Net assets, end of period (in millions)	— 6	— 6
Ratios (as a percentage of average net assets):
Expenses before reductions	10.08 7	6.21
Expenses net of fee waivers, if any	2.04 7	2.06
Expenses net of all fee waivers and credits	2.04 7	2.05
Net investment income (loss)	0.37 7	0.36
Portfolio turnover (%)	32 5	72

¹ Class C shares began operations on 6-12-06.

² Based on the average of the shares outstanding.

³ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁴ Assumes dividend reinvestment.

⁵ Not annualized.

⁶ Less than $500,000.

⁷ Annualized.

See notes to financial statements

Annual report | Intrinsic Value Fund

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F I N A N C I A L   S T A T E M E N T S

Financial highlights

CLASS I SHARES

Period ended	2-28-07 1	2-29-08
Per share operating performance
Net asset value, beginning of period	$20.00	$22.70
Net investment income (loss)2	0.24	0.32
Net realized and unrealized gain
(loss) on investments	2.86	(2.93)
Total from investment operations	3.10	(2.61)
Less distributions
From net investment income	(0.18)	(0.35)
From net realized gain	(0.22)	(1.53)
	(0.40)	(1.88)
Net asset value, end of period	$22.70	$18.21
Total return3,4 (%)	15.50 5	(12.18)
Ratios and supplemental data
Net assets, end of period (in millions)	— 6	— 6
Ratios (as a percentage of average net assets):
Expenses before reductions	17.60 7	13.79
Expenses net of fee waivers, if any	0.95 7	0.95
Expenses net of all fee waivers and credits	0.95 7	0.95
Net investment income (loss)	1.53 7	1.45
Portfolio turnover (%)	32 5	72

¹ Class I shares began operations on 6-12-06.

² Based on the average of the shares outstanding.

³ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁴ Assumes dividend reinvestment.

⁵ Not annualized.

⁶ Less than $500,000.

⁷ Annualized.

See notes to financial statements

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F I N A N C I A L   S T A T E M E N T S

Financial highlights

CLASS R1 SHARES

Period ended	2-28-07 1	2-29-08
Per share operating performance
Net asset value, beginning of period	$20.00	$22.63
Net investment income (loss)2	0.12	0.21
Net realized and unrealized gain
(loss) on investments	2.85	(2.92)
Total from investment operations	2.97	(2.71)
Less distributions
From net investment income	(0.12)	(0.23)
From net realized gain	(0.22)	(1.53)
	(0.34)	(1.76)
Net asset value, end of period	$22.63	$18.16
Total return3,4 (%)	14.88 5	(12.60)
Ratios and supplemental data
Net assets, end of period (in millions)	— 6	— 6
Ratios (as a percentage of average net assets):
Expenses before reductions	20.85 7	15.27
Expenses net of fee waivers, if any	1.69 7	1.45
Expenses net of all fee waivers and credits	1.69 7	1.45
Net investment income (loss)	0.78 7	0.95
Portfolio turnover (%)	32 5	72

¹ Class R1 shares began operations on 6-12-06.

² Based on the average of the shares outstanding.

³ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁴ Assumes dividend reinvestment.

⁵ Not annualized.

⁶ Less than $500,000.

⁷ Annualized.

See notes to financial statements

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F I N A N C I A L   S T A T E M E N T S

Financial highlights

CLASS 1 SHARES

Period ended	2-28-07 1	2-29-08
Per share operating performance
Net asset value, beginning of period	$20.00	$22.70
Net investment income (loss)2	0.25	0.34
Net realized and unrealized gain
(loss) on investments	2.85	(2.94)
Total from investment operations	3.10	(2.60)
Less distributions
From net investment income	(0.18)	(0.36)
From net realized gain	(0.22)	(1.53)
	(0.40)	(1.89)
Net asset value, end of period	$22.70	$18.21
Total return3,4 (%)	15.53 5	(12.13)
Ratios and supplemental data
Net assets, end of period (in millions)	— 6	— 6
Ratios (as a percentage of average net assets):
Expenses before reductions	1.44 7	1.47
Expenses net of fee waivers, if any	0.90 7	0.90
Expenses net of all fee waivers and credits	0.90 7	0.90
Net investment income (loss)	1.58 7	1.50
Portfolio turnover (%)	32 5	72

¹ Class 1 shares began operations on 6-12-06.

² Based on the average of the shares outstanding.

³ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁴ Assumes dividend reinvestment.

⁵ Not annualized.

⁶ Less than $500,000.

⁷ Annualized

See notes to financial statements

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Notes to financial statements

1. Organization

John Hancock Intrinsic Value Fund (the Fund) is a non-diversified series of John Hancock Funds III (the Trust). The Trust was established as a Massachusetts business trust on June 9, 2005. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end investment management company. The investment objective of the Fund is to seek long-term capital growth.

John Hancock Life Insurance Company of New York (John Hancock New York) is a wholly owned subsidiary of John Hancock Life Insurance Company (U.S.A.) (John Hancock USA). John Hancock USA and John Hancock New York are indirect wholly owned subsidiaries of The Manufacturers Life Insurance Company (Manulife), which in turn is a wholly owned subsidiary of Manulife Financial Corporation (MFC), a publicly traded company. MFC and its subsidiaries are known collectively as “Manulife Financial.”

John Hancock Investment Management Services, LLC (the Adviser), a Delaware limited liability company controlled by John Hancock USA, serves as investment adviser for the Trust and John Hancock Funds, LLC (the Distributor), a Delaware limited liability company, an affiliate of the Adviser, serves as principal underwriter.

The Board of Trustees have authorized the issuance of multiple classes of shares of the Fund, including classes designated as Class A, Class B, Class C, Class I, Class R1 and Class 1 shares. Class A, Class B and Class C shares are open to all retail investors. Class I shares are offered without any sales charge to various institutional and certain individual investors. Class R1 shares are available only to certain retirement plans. Class 1 shares are sold only to certain exempt separate accounts of John Hancock USA and John Hancock New York. The shares of each class represent an interest in the same portfolio of investments of the Fund, and have equal rights as to voting, redemptions, dividends and liquidation, except that certain expenses, subject to the approval of the Board of Trustees, may be applied differently to each class of shares in accordance with current regulations of the Securities and Exchange Commission (SEC) and the Interna l Revenue Service. Shareholders of a class that bear distribution and service expenses under the terms of a distribution plan have exclusive voting rights to that distribution plan. Class B shares will convert to Class A shares eight years after purchase.

The Adviser and other affiliates of John Hancock USA owned 802,790, 5,571, 5,529 and 5,575 shares of beneficial interest of Class A, Class I, Class R1 and Class 1, respectively, on February 29, 2008.

2. Significant accounting policies

In the preparation of the financial statements, the Fund follows the policies described below. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results may differ from these estimates.

Security valuation

The net asset value of the shares of the Fund is determined daily as of the close of the New York Stock Exchange (NYSE), normally at 4:00 P.M., Eastern Time. Short-term debt investments that have a remaining maturity of 60 days or less are valued at amortized cost, and thereafter assume a constant amortization to maturity of any discount or premium, which approximates market value. Investments in John Hancock Cash Investment Trust (JHCIT),

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31

an affiliate of the John Hancock Advisers, LLC (JHA), a wholly owned subsidiary of John Hancock Financial Services, Inc., a subsidiary of MFC, are valued at their net asset value each business day. All other securities held by the Fund are valued at the last sale price or official closing price (closing bid price or last evaluated quote if no sale has occurred) as of the close of business on the principal securities exchange (domestic or foreign) on which they trade or, lacking any sales, at the closing bid price. Securities traded only in the over-the-counter market are valued at the last bid price quoted by brokers making markets in the securities at the close of trading. Securities for which there are no such quotations, principally debt securities, are valued based on the evaluated prices provided by an independent pricing service, which utilizes both dealer-supplied and electronic data processing techniques, which take into account factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other market data.

Other assets and securities for which no such quotations are readily available are valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees. Generally, trading in non-U.S. securities is substantially completed each day at various times prior to the close of trading on the NYSE. The values of such securities used in computing the net asset value of a Fund’s shares are generally determined as of such times. Occasionally, significant events that affect the values of such securities may occur between the times at which such values are generally determined and the close of the NYSE. Upon such an occurrence, these securities will be valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees.

In deciding whether to make a fair value adjustment to the price of a security, the Board of Trustees or their designee may review a variety of factors, including developments in foreign markets, the performance of U.S. securities markets and the performance of instruments trading in U.S. markets that represent foreign securities and baskets of foreign securities. The Fund may also fair value securities in other situations, for example, when a particular foreign market is closed, but the Fund is calculating the net asset value. In view of these factors, it is likely that Funds investing significant amounts of assets in securities in foreign markets will be fair valued more frequently than Funds investing significant amounts of assets in frequently traded, U.S. exchange listed securities of large-capitalization U.S. issuers.

For purposes of determining when fair value adjustments may be appropriate with respect to Funds that invest in securities in foreign markets that close prior to the NYSE, the Funds will, on an ongoing basis, monitor for “significant market events.” A significant market event may be a certain percentage change in the value of an index or of certain Exchange Traded Funds that track foreign markets in which Funds have significant investments. If a significant market event occurs due to a change in the value of the index or of Exchange Traded Funds, the pricing for the Fund will promptly be reviewed and potential adjustments to the net asset value of the Fund will be recommended to the Trust’s Pricing Committee when applicable.

Fair value pricing of securities is intended to help ensure that the net asset value of the Fund’s shares reflects the value of the Fund’s securities as of the close of the NYSE (as opposed to a value which is no longer accurate as of such close), thus limiting the opportunity for aggressive traders to purchase shares of the Fund at deflated prices, reflecting stale security valuations, and to promptly sell such shares at a gain. However, a security’s valuation may differ depending on the method used for determining value and no assurance can be given that fair value pricing of securities will successfully eliminate all potential opportunities for such trading gains.

New accounting pronouncements

In September 2006, Financial Accounting Standards Board (FASB) Standard No. 157, Fair Value Measurements (FAS 157), was issued and is effective for fiscal years beginning after

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November 15, 2007. FAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosure about fair value measurements. As of February 29, 2008, management does not believe the adoption of FAS 157 will impact the amounts reported in the financial statements; however, additional disclosures regarding pricing sources will be required about the inputs used to develop the measurements of fair value and the related realized and unrealized gain/loss for certain securities valued by significant unobservable market inputs.

In March 2008, FASB No. 161 (FAS 161), Disclosures about Derivative Instruments and Hedging Activities , an amendment of FASB Statement No. 133 (FAS 133), was issued and is effective for fiscal years beginning after November 15, 2008. FAS 161 amends and expands the disclosure requirements of FAS 133 in order to provide financial statement users an understanding of a company’s use of derivative instruments, how derivative instruments are accounted for under FAS 133 and related interpretations and how these instruments affect a company’s financial position, performance, and cash flows. FAS 161 requires companies to disclose information detailing the objectives and strategies for using derivative instruments, the level of derivative activity entered into by the company, and any credit risk-related contingent features of the agreements. Management is currently evaluating the adoption of FAS 161 on the Fund’s financial statement disclosures.

Guarantees and indemnifications

Under the Trust’s organizational documents, its Officers and Trustees are indemnified against certain liability arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust that have not yet occurred.

Repurchase agreements

The Fund may enter into repurchase agreements. When the Fund enters into a repurchase agreement through its custodian, it receives delivery of securities, the amount of which at the time of purchase and each subsequent business day is required to be maintained at such a level that the market value is generally at least 102% of the repurchase amount. The Fund will take constructive receipt of all securities underlying the repurchase agreements it has entered into until such agreements expire. If the seller defaults, the Fund would suffer a loss to the extent that proceeds from the sale of underlying securities were less than the repurchase amount. The Fund may enter into repurchase agreements maturing within seven days with domestic dealers, banks or other financial institutions deemed to be creditworthy by the Adviser. Collateral for certain tri-party repurchase agreements is held at the custodian bank in a segregated account for the benefi t of the Fund and the counterparty.

Security transactions and related investment income

Investment security transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment transactions are reported on trade date. Interest income is accrued as earned. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Foreign dividends are recorded on the ex-date or when the Fund becomes aware of the dividends from cash collections. Discounts/premiums are accreted/ amortized for financial reporting purposes. Non-cash dividends are recorded at the fair market value of the securities received. Debt obligations may be placed in a non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful, based upon consistently applied procedures.

From time to time, the Fund may invest in Real Estate Investment Trusts (REITs) and, as a result, will estimate the components of distributions from these securities. Distributions from REITs received in excess of income are recorded as a reduction of cost of investments and/or as a realized gain.

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33

The Fund uses the specific identification method for determining realized gain or loss on investments for both financial statement and federal income tax reporting purposes.

Allocations of income and expenses

All income, expenses (except class-specific expenses), and realized and unrealized gain/ loss are allocated to each class of shares based upon the relative net assets of each class. Dividends to shareholders from net investment income are determined at a class level and distributions from capital gains are determined at a Fund level.

Expenses not directly attributable to the Fund or share classes are allocated based on the relative share of net assets of the Fund or share class at the time the expense was incurred. Class-specific expenses, as detailed in Note 3, are accrued daily and charged directly to the respective share classes.

Securities lending

The Fund may lend portfolio securities from time to time in order to earn additional income. The Fund retains beneficial ownership of the securities it has loaned and continues to receive interest and dividends paid by the issuer of securities and to participate in any changes in their value. On the settlement date of the loan, the Fund receives collateral against the loaned securities and maintain collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. Any cash collateral received is invested in the JHCIT. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collat eral. The Fund receives compensation for lending its securities either in the form of fees, guarantees, and/or by retaining a portion of interest on the investment of any cash received as collateral.

The Fund has entered into an agreement with Morgan Stanley & Co. Incorporated and MS Securities Services Inc. (collectively, Morgan Stanley), which permits the Fund to lend securities to Morgan Stanley on a principal basis. Morgan Stanley is the primary borrower of fund securities of the Fund. The risk of having one primary borrower of securities (as opposed to several borrowers in an agency relationship) is that should Morgan Stanley fail financially, all securities lent will be affected by the failure and by any delays in recovery of the securities (or in the rare event, loss of rights in the collateral).

Prior to May 8, 2007, cash collateral was invested in the State Street Navigator Securities Lending Portfolio. At February 29, 2008, the Fund loaned securities having a market value of $65,239 collateralized by securities in the amount of $66,544.

Futures

The Fund may purchase and sell financial futures contracts and options on those contracts. The Fund invests in contracts based on financial instruments, such as U.S. Treasury Bonds or Notes, or on securities indices such as the Standard & Poor’s 500 Index, in order to hedge against a decline in the value of securities owned by the Fund.

Initial margin deposits required upon entering into futures contracts are satisfied by the delivery of specific securities or cash as collateral to the broker (the Fund’s agent in acquiring the futures position). If the position is closed out by taking an opposite position prior to the settlement date of the futures contract, a final determination of variation margin is made, cash is required to be paid to or released by the broker and the Fund realizes a gain or loss.

When the Fund sells a futures contract based on a financial instrument, the Fund becomes obligated to deliver that kind of instrument at an agreed upon date for a specified price. The Fund realizes a gain or loss depending on whether the price of an offsetting purchase is less or more than the price of the initial sale or on whether the price of an offsetting sale is more or less than the price of the initial purchase. The Fund could be exposed to risks if it could not close out futures positions because of an illiquid secondary market or the inability

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of counterparties to meet the terms of their contracts. Futures contracts are valued at the quoted daily settlement prices established by the exchange on which they trade.

The following is a summary of open futures contracts on February 29, 2008:

					UNREALIZED
	NUMBER OF		EXPIRATION	NOTIONAL	APPRECIATION
OPEN CONTRACTS	CONTRACTS	POSITION	DATE	AMOUNT	(DEPRECIATION)
S&P Mini 500 Index Futures	6	Long	Mar 2008	$399,390	($11,753)

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 that is distributed to shareholders. Therefore, no federal income tax provision is required. Net capital losses of $425,219 that are attributable to security transactions incurred after October 31, 2007, are treated as arising on March 1, 2008, the first day of the Fund’s next taxable year.

The Fund has adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes , an interpretation of FASB Statement 109 (FIN 48), at the beginning of the Fund’s fiscal year. FIN 48 prescribes a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not have a material impact on the Fund’s financial statements. Each of the Fund’s federal tax returns for the prior fiscal years remains subject to examination by the Internal Revenue Service.

Distribution of income and gains

The Fund records distributions to shareholders from net investment income and net realized gains, if any, on the ex-dividend date. During the year ended February 28, 2007, the tax character of distributions paid was as follows: ordinary income $270,360 and long-term capital gain $31,463. During the year ended February 29, 2008, the tax character of distributions paid was as follows: ordinary income $1,019,233 and long-term capital gain $632,247. Distributions paid by the Fund with respect to each class of shares are calculated in the same manner, at the same time and are in the same amount, except for the effect of expenses that may be applied differently to each class.

As of February 29, 2008, the components of distributable earnings on a tax basis included $26,236 of undistributed ordinary income.

Such distributions and distributable earnings, on a tax basis, are determined in conformity with income tax regulations, which may differ from accounting principles generally accepted in the United States of America. Distributions in excess of tax basis earnings and profits, if any, are reported in the Fund’s financial statements as a return of capital.

Capital accounts within financial statements are adjusted for permanent book/tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book/tax differences will reverse in a subsequent period. Permanent book/tax differences are primarily attributable to derivative transactions.

3. Investment advisory and
other agreements

The Trust has entered into an Investment Advisory Agreement with the Adviser. The Adviser is responsible for managing the corporate and business affairs of the Trust and for selecting and compensating subadvisers to handle the investment of the assets of the Fund, subject to the supervision of the Trust’s Board of Trustees. As compensation for its services, the Adviser receives an advisory fee from the Trust. Under the Advisory Agreement, the Fund pays a monthly management fee to the Adviser equivalent, on an annual basis, to the sum of: (a) 0.78% of the first $500,000,000 of the Fund’s aggregate daily net assets; (b) 0.76% of the next $500,000,000 of the Fund’s aggregate daily net assets; (c) 0.75% of the Fund’s next $1,500,000,000 of the Fund’s aggregate daily net assets; and (d) 0.74% of the Fund’s aggregate daily net assets in excess of $2,500,000,000. Aggregate net assets include

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the net assets of the Fund and Intrinsic Value Trust, a series of John Hancock Trust and Intrinsic Value Fund, a series of John Hancock Funds II. The Adviser has a subadvisory agreement with Grantham, Mayo, Van Otterloo & Co. LLC. The Fund is not responsible for payment of the subadvisory fees.

The investment management fees incurred for the year ended February 29, 2008, were equivalent to an annual effective rate of 0.78% of the Fund’s average daily net assets.

Expense reimbursements

The Adviser has contractually agreed to reimburse or limit certain Fund level expenses to 0.08% of the Fund’s average annual net assets which are allocated pro rata to all share classes. This agreement excludes taxes, portfolio brokerage commissions, interest, advisory fees, Rule 12b-1 fees, transfer agency fees, blue sky fees, printing and postage and litigation and indemnification expenses and other extraordinary expenses not incurred in the ordinary course of the Fund’s business. In addition, fees incurred under any agreement or plans of the Fund dealing with services for the shareholders and others with beneficial interest in shares of the Fund, are excluded.

In addition, the Adviser has agreed to reimburse or limit certain expenses for each share class. This agreement excludes taxes, portfolio brokerage commissions, interest and litigation and indemnification expenses and other extraordinary expenses not incurred in the ordinary course of the Fund’s business. In addition, fees incurred under any agreement or plans of the Fund dealing with services for the shareholders and others with beneficial interest in shares of the Fund, are excluded. The reimbursements and limits are such that these expenses will not exceed 1.35% for Class A shares, 2.05% for Class B, 2.05% for Class C, 0.95% for Class I, 1.45% for Class R1 and 0.90% for Class 1. Accordingly, the expense reductions or reimbursements related to this agreement were $107,537, $16,704, $16,870, $18,453, $16,037 and $664 for Class A, Class B, Class C, Class I, Class R1 and Class 1, respectively for the year ended February 29, 2008. The expense reimbursements and limits will continue in effect until June 30, 2008 and thereafter until terminated by the Adviser on notice to the Trust.

Fund administration fees

Pursuant to the Advisory Agreement, the Fund reimburses the Adviser for all expenses associated with providing the administrative, financial, legal, accounting and recordkeeping services of the Fund, including the preparation of all tax returns, annual, semiannual and periodic reports to shareholders and the preparation of all regulatory reports. These expenses are allocated based on the relative share of net assets of each class at the time the expense was incurred.

The fund administration fees incurred for the year ended February 29, 2008, were $9,581 with an annual effective rate of 0.05% of the Fund’s average daily net assets.

Distribution and shareholder servicing fees

The Trust has a Distribution Agreement with the Distributor. The Fund has adopted Distribution Plans with respect to Class A, Class B, Class C, Class R1 and Class 1, pursuant to Rule 12b-1 under the 1940 Act, to pay the Distributor for the services it provides as distributor of shares of the Fund. Accordingly, the Fund makes monthly payments to the Distributor at an annual rate not to exceed 0.30%, 1.00%, 1.00%, 0.50% and 0.05% of average daily net asset value of Class A, Class B, Class C, Class R1 and Class 1, respectively. A maximum of 0.25% of such payments may be service fees, as defined by the Conduct Rules of Financial Industry Regulatory Authority (formerly the National Association of Securities Dealers). Under the Conduct Rules, curtailment of a portion of the Fund’s 12b-1 payments could occur under certain circumstances.

In addition, the Fund has also adopted a Service Plan for Class R1 shares. Under the Service Plan, the Fund may pay up to 0.25% of Class R1 average daily net asset value for certain other services. There were no Service Plan fees incurred for the year ended February 29, 2008.

Sales charges

Class A shares are assessed up-front sales charges of up to 5.00% of net asset value of such shares. During the year ended

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February 29, 2008, the Fund was informed that the Distributor received net up-front sales charges of $22,389 with regard to sales of Class A shares. Of this amount, $3,598 was retained and used for printing prospectuses, advertising, sales literature and other purposes; $18,738 was paid as sales commissions to unrelated broker-dealers; and $53 was paid as sales commissions to sales personnel of Signator Investors, Inc. (Signator Investors), a related broker-dealer, an indirect subsidiary of MFC.

Class B shares that are redeemed within six years of purchase are subject to a contingent deferred sales charge (CDSC) at declining rates, beginning at 5.00% of the lesser of the current market value at the time of redemption or the original purchase cost of the shares being redeemed. Class C shares that are redeemed within one year of purchase are subject to a CDSC at a rate of 1.00% of the lesser of the current market value at the time of redemption or the original purchase cost of the shares being redeemed. Proceeds from the CDSCs are paid to the Distributor and are used, in whole or in part, to defray its expenses for providing distribution-related services to the Fund in connection with the sale of Class B and Class C shares. During the year ended February 29, 2008, CDSCs received by Distributor amounted to $216 for Class B shares and $664 for Class C shares.

Transfer agent fees

The Fund has a Transfer Agency Agreement with John Hancock Signature Services, Inc. (Signature Services), an indirect subsidiary of MFC. For Class A, Class B, Class C, Class I and Class R1 shares, the Fund pays a monthly transfer agent fee at an annual rate of 0.05% of each class’ average daily net assets, plus a fee based on the number of shareholder accounts and reimbursement for certain out-of-pocket expenses. Expenses not directly attributable to a particular class of shares are aggregated and allocated to each class on the basis of its relative net asset value. The Fund pays a monthly fee which is based on an annual rate of $15.00 for each Class A shareholder account, $17.50 for each Class B shareholder account, $16.50 for each Class C shareholder account and $15.00 for each Class R1 shareholder account.

Signature Services has agreed to limit the transfer agent fees so that such fees do not exceed 0.20% annually of Class A, Class B, Class C, Class I and Class R1 share average daily net assets. This agreement is effective until December 31, 2008. Signature Services reserves the right to terminate this limitation in the future. There were no transfer agent fee reductions for Class A, Class B, Class C, Class I and Class R1 shares, respectively, during the year ended February 29, 2008.

In addition, Signature Services has voluntarily agreed to further limit transfer agent fees for Class R1 shares so that such fees do not exceed 0.05% annually of each class’s average daily net assets. For the year ended February 29, 2008, the transfer agent fees reductions for Class R1 were $179.

In May 2007, the Fund began receiving earnings credits from its transfer agent as a result of uninvested cash balances. These credits are used to reduce a portion of the Fund’s transfer agent fees and out-of-pocket expenses. During the year ended February 29, 2008, the Fund’s transfer agent fees and out-of-pocket expenses were reduced by $171 for transfer agent credits earned.

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Class level expenses for the year ended February 29, 2008, were as follows:

	Distribution and	Transfer		Printing and
Share class	service fees	agent fees	Blue sky fees	postage fees
Class A	$59,322	$16,276	$14,643	$6,887
Class B	4,098	844	14,450	—
Class C	4,059	837	14,312	321
Class I	—	75	17,658	60
Class R1	587	240	15,447	3
Class 1	58	—	—	27
Total	$68,124	$18,272	$76,510	$7,298

4. Trustees’ fees

The Trust compensates each Trustee who is not an employee of the Adviser or its affiliates. Total Trustees’ expenses are allocated to the Fund based on its average daily net asset value.

5. Line of credit

The Fund has entered into an agreement which enables them to participate in a $100 million unsecured committed line of credit with State Street Corporation. Borrowings will be made solely to temporarily finance the repurchase of capital shares. Interest is charged to the Fund based on its borrowings at a rate per annum equal to the Federal Funds rate plus 0.50%. In addition, a commitment fee of 0.05% per annum, payable at the end of each calendar quarter, based on the average daily-unused portion of the line of credit, is charged to the Fund on a prorated basis based on average net assets. Effective October 15, 2007, the commitment fee was changed from 0.07% to 0.05%. For the year ended February 29, 2008, there were no borrowings under the line of credit.

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6. Fund share transactions

Share activities for the Fund for the years ended February 28, 2007, and February 29, 2008, were as follows:

		Year ended 2-28-071	Year ended 2-29-08
	Shares	Amount	Shares	Amount
Class A shares
Sold	838,725	$17,032,947	133,987	$2,940,726
Distributions reinvested	12,374	281,144	76,470	1,516,395
Repurchased	(4,497)	(101,945)	(92,564)	(2,053,477)
Net increase (decrease)	846,602	$17,212,146	117,893	$2,403,644
Class B shares
Sold	25,686	$554,475	5,662	$132,547
Distributions reinvested	201	4,563	1,131	22,436
Repurchased	(5,219)	(119,072)	(11,519)	(264,243)
Net increase (decrease)	20,668	$439,966	(4,726)	($109,260)
Class C shares
Sold	23,486	$503,103	16,074	$359,010
Distributions reinvested	135	3,064	1,822	36,151
Repurchased	(10,948)	(251,638)	(7,825)	(155,541)
Net increase (decrease)	12,673	$254,529	10,071	$239,620
Class I shares
Sold	5,547	$111,000	1,135	$26,925
Distributions reinvested	98	2,226	638	12,648
Repurchased	—	—	(22)	(500)
Net increase (decrease)	5,645	$113,226	1,751	$39,073
Class R1 shares
Sold	5,033	$100,750	407	$8,923
Distributions reinvested	76	1,738	484	9,580
Repurchased	—	—	(32)	(704)
Net increase (decrease)	5,109	$102,488	859	$17,799
Class 1 shares
Sold	5,000	$100,000	—	—
Distributions reinvested	90	2,033	485	9,625
Net increase (decrease)	5,090	$102,033	485	$9,625
Net increase (decrease)	895,787	$18,224,388	126,333	$2,600,501

¹Period from 6-12-06 (commencement of operations) to 2-28-07.

7. Purchases and sales of securities

Purchases and proceeds from sales or maturities of securities, other than short-term securities and obligations of the U.S. government, during the year ended February 29, 2008, aggregated $15,745,342 and $14,402,123, respectively.

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Auditors’ report

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of John Hancock Funds III and Shareholders of John Hancock Intrinsic Value Fund,

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of John Hancock Intrinsic Value Fund (the Fund) at February 29, 2008, and the results of its operations, the changes in its net assets and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of investments at February 29, 2008 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
Boston, Massachusetts
April 18, 2008

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Tax information

Unaudited

For federal income tax purposes, the following information is furnished with respect to the distributions of the Fund, if any, paid during its taxable year ended February 29, 2008.

The Fund has designated distributions to shareholders of $632,247 as a long-term capital gain dividend. With respect to the ordinary dividends paid by the Fund for the fiscal year ended February 29, 2008, 69.12% of the dividends qualifies for the corporate dividends-received deduction.

The Fund hereby designates the maximum amount allowable of its net taxable income as qualified dividend income as provided in the Jobs and Growth Tax Relief Reconciliation Act of 2003. This amount will be reflected on Form 1099-DIV for the calendar year 2008.

Shareholders will be mailed a 2008 U.S. Treasury Department Form 1099-DIV in January 2009. This will reflect the total of all distributions that are taxable for calendar year 2008.

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Trustees and Officers

This chart provides information about the Trustees and Officers who oversee your John Hancock fund. Officers elected by the Trustees manage the day-to-day operations of the Fund and execute policies formulated by the Trustees.

Independent Trustees

Name, Year of Birth		Number of
Position(s) held with Fund	Trustee	John Hancock
Principal occupation(s) and other	of Fund	Funds overseen
directorships during past 5 years	since 1	by Trustee
James F. Carlin, Born: 1940	2006	55
Chairman (since December 2007); Director and Treasurer, Alpha Analytical Laboratories, Inc. (chemical
analysis) (since 1985); Part Owner and Treasurer, Lawrence Carlin Insurance Agency, Inc. (since 1995);
Part Owner and Vice President, Mone Lawrence Carlin Insurance Agency, Inc. (until 2005); Chairman
and Chief Executive Officer, Carlin Consolidated, Inc. (management/investments) (since 1987); Trustee,
Massachusetts Health and Education Tax Exempt Trust (1993–2003) .
William H. Cunningham, Born: 1944	2006	55
Professor, University of Texas at Austin (since 1971); former Chancellor, University of Texas System and
former President, University of Texas at Austin (until 2001); Chairman and Chief Executive Officer, IBT
Technologies (until 2001); Director of the following: Hicks Acquisition Company I, Inc. (since 2007);
Hire.com (until 2004), STC Broadcasting, Inc. and Sunrise Television Corp. (until 2001), Symtx, Inc.
(electronic manufacturing) (since 2001), Adorno/Rogers Technology, Inc. (until 2004), Pinnacle
Foods Corporation (until 2003), rateGenius (until 2003), Lincoln National Corporation (insurance)
(since 2006), Jefferson-Pilot Corporation (diversified life insurance company) (until 2006), New
Century Equity Holdings (formerly Billing Concepts) (until 2001), eCertain (until 2001), ClassMap.com
(until 2001), Agile Ventures (until 2001), AskRed.com (until 2001), Southwest Airlines (since 2000),
Introgen (manufacturer of biopharmaceuticals) (since 2000) and Viasystems Group, Inc. (electronic
manufacturer) (until 2003); Advisory Director, Interactive Bridge, Inc. (college fundraising) (until 2001);
Advisory Director, Q Investments (until 2003); Advisory Director, JPMorgan Chase Bank (formerly Texas
Commerce Bank–Austin), LIN Television (until 2008), WilTel Communications (until 2003) and Hayes
Lemmerz International, Inc. (diversified automotive parts supply company) (since 2003) .
Charles L. Ladner,2 Born: 1938	2006	55
Chairman and Trustee, Dunwoody Village, Inc. (retirement services) (until 2003); Senior Vice President
and Chief Financial Officer, UGI Corporation (public utility holding company) (retired 1998); Vice
President and Director, AmeriGas, Inc. (retired 1998); Director, AmeriGas Partners, L. P. (gas distribution)
(until 1997); Director, EnergyNorth, Inc. (until 1997); Director, Parks and History Association (until 2005) .
John A. Moore, 2 Born: 1939	2006	55
President and Chief Executive Officer, Institute for Evaluating Health Risks (nonprofit institution)
(until 2001); Senior Scientist, Sciences International (health research) (until 2003); Former Assistant
Administrator and Deputy Administrator, Environmental Protection Agency; Principal, Hollyhouse
(consulting) (since 2000); Director, CIIT Center for Health Science Research (nonprofit research)
(until 2007) .

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Independent Trustees (continued)

Name, Year of Birth		Number of
Position(s) held with Fund	Trustee	John Hancock
Principal occupation(s) and other	of Fund	Funds overseen
directorships during past 5 years	since 1	by Trustee
Patti McGill Peterson,2 Born: 1943	2006	55
Senior Associate, Institute for Higher Education Policy (since 2007); Executive Director, Council for
International Exchange of Scholars and Vice President, Institute of International Education (until 2007);
Senior Fellow, Cornell Institute of Public Affairs, Cornell University, Ithaca, NY (until 1998); Former
President, Wells College, Aurora, NY, and St. Lawrence University, Canton, NY; Director, Niagara
Mohawk Power Corporation (until 2003); Director, Ford Foundation, International Fellowships Program
(since 2002); Director, Lois Roth Endowment (since 2002); Director, Council for International Educational
Exchange (since 2003) .
Steven R. Pruchansky, Born: 1944	2006	55
Chairman and Chief Executive Officer, Greenscapes of Southwest Florida, Inc. (since 2000); Director and
President, Greenscapes of Southwest Florida, Inc. (until 2000); Managing Director, JonJames, LLC (real
estate) (since 2000); Director, First Signature Bank & Trust Company (until 1991); Director, Mast Realty
Trust (until 1994); President, Maxwell Building Corp. (until 1991) .

Non-Independent Trustees ³

Name, Year of Birth		Number of
Position(s) held with Fund	Trustee	John Hancock
Principal occupation(s) and other	of Fund	Funds overseen
directorships during past 5 years	since 1	by Trustee
James R. Boyle, Born: 1959	2006	265
Executive Vice President, Manulife Financial Corporation (since 1999); President, John Hancock Variable
Life Insurance Company (since March 2007); Executive Vice President, John Hancock Life Insurance
Company (since 2004); Chairman and Director, John Hancock Advisers, LLC (the Adviser), John Hancock
Funds, LLC and The Berkeley Financial Group, LLC (The Berkeley Group) (holding company) (since 2005);
Senior Vice President, The Manufacturers Life Insurance Company (U. S. A. ) (until 2004) .

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Principal officers who are not Trustees

Name, Year of Birth
Position(s) held with Fund	Officer
Principal occupation(s) and other	of Fund
directorships during past 5 years	since
Keith F. Hartstein, Born: 1956	2006
President and Chief Executive Officer
Senior Vice President, Manulife Financial Corporation (since 2004); Director, President and Chief
Executive Officer, the Adviser, The Berkeley Group and John Hancock Funds, LLC (since 2005); Director,
MFC Global Investment Management (U. S. ), LLC (MFC Global (U. S. )) (since 2005); Director, John
Hancock Signature Services, Inc. (since 2005); President and Chief Executive Officer, John Hancock
Investment Management Services, LLC (since 2006); President and Chief Executive Officer, John Hancock
Funds, John Hancock Funds II, John Hancock Funds III and John Hancock Trust (since 2005); Director,
Chairman and President, NM Capital Management, Inc. (since 2005); Member, Investment Company
Institute Sales Force Marketing Committee (since 2003); President and Chief Executive Officer, MFC
Global (U.S. ) (2005–2006); Executive Vice President, John Hancock Funds, LLC (until 2005) .
Thomas M. Kinzler, Born: 1955	2006
Secretary and Chief Legal Officer
Vice President and Counsel, John Hancock Life Insurance Company (U. S. A. ) (since 2006); Secretary and
Chief Legal Officer, John Hancock Funds and John Hancock Funds II (since 2006); Chief Legal Officer
and Assistant Secretary, John Hancock Trust (since 2006); Vice President and Associate General Counsel,
Massachusetts Mutual Life Insurance Company (1999–2006); Secretary and Chief Legal Counsel, MML
Series Investment Fund (2000–2006); Secretary and Chief Legal Counsel, MassMutual Institutional Funds
(2000–2004); Secretary and Chief Legal Counsel, MassMutual Select Funds and MassMutual Premier
Funds (2004–2006) .
Francis V. Knox, Jr. , Born: 1947	2006
Chief Compliance Officer
Vice President and Chief Compliance Officer, John Hancock Investment Management Services, LLC,
the Adviser and MFC Global (U. S. ) (since 2005); Vice President and Chief Compliance Officer, John
Hancock Funds, John Hancock Funds II, John Hancock Funds III and John Hancock Trust (since 2005);
Vice President and Assistant Treasurer, Fidelity Group of Funds (until 2004); Vice President and Ethics &
Compliance Officer, Fidelity Investments (until 2001) .
Charles A. Rizzo, Born: 1957	2007
Chief Financial Officer
Chief Financial Officer, John Hancock Funds, John Hancock Funds II, John Hancock Funds III and John
Hancock Trust (since June 2007); Assistant Treasurer, Goldman Sachs Mutual Fund Complex (regis-
tered investment companies) (2005–June 2007); Vice President, Goldman Sachs (2005–June 2007);
Managing Director and Treasurer of Scudder Funds, Deutsche Asset Management (2003–2005);
Director, Tax and Financial Reporting, Deutsche Asset Management (2002–2003); Vice President and
Treasurer, Deutsche Global Fund Services (Deutsche Registered Investment Companies) (1999–2002) .
Gordon M. Shone, Born: 1956	2006
Treasurer
Senior Vice President, John Hancock Life Insurance Company (U.S. A. ) (since 2001); Treasurer, John
Hancock Funds (since 2006), John Hancock Funds II, John Hancock Funds III and John Hancock Trust
(since 2005); Vice President and Chief Financial Officer, John Hancock Trust (2003–2005); Vice President,
John Hancock Investment Management Services, Inc., John Hancock Advisers, LLC (since 2006) and The
Manufacturers Life Insurance Company (U. S. A. ) (1998–2000) .

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Principal officers who are not Trustees (continued)

Name, Year of Birth
Position(s) held with Fund	Officer
Principal occupation(s) and other	of Fund
directorships during past 5 years	since
John G. Vrysen, Born: 1955	2006
Chief Operating Officer
Senior Vice President, Manulife Financial Corporation (since 2006); Director, Executive Vice President
and Chief Operating Officer, the Adviser, The Berkeley Group and John Hancock Funds, LLC (since
June 2007); Executive Vice President and Chief Operating Officer, John Hancock Investment
Management Services, LLC (since December 2007); Chief Operating Officer, John Hancock Funds,
John Hancock Funds II, John Hancock Funds III and John Hancock Trust (since June 2007); Director,
Executive Vice President and Chief Financial Officer, the Adviser, The Berkeley Group and John Hancock
Funds, LLC (2005–2007); Executive Vice President and Chief Financial Officer, John Hancock Investment
Management Services, LLC (2005–2007); Executive Vice President and Chief Financial Officer, MFC
Global (U. S. ) (2005 until August 2007); Director, John Hancock Signature Services, Inc. (since 2005);
Chief Financial Officer, John Hancock Funds, John Hancock Funds II, John Hancock Funds III and John
Hancock Trust (2005 until June 2007); Vice President and General Manager, John Hancock Fixed
Annuities, U.S. Wealth Management (2004–2005); Vice President, Operations, Manulife Wood Logan
(2000–2004) .

The business address for all Trustees and Officers is 601 Congress Street, Boston, Massachusetts 02210-2805.

The Statement of Additional Information of the Fund includes additional information about members of the Board of Trustees of the Fund and is available without charge, upon request, by calling 1-800-225-5291.

¹ Each Trustee serves until resignation, retirement age or until his or her successor is elected.

² Member of Audit and Compliance Committee.

³ Non-Independent Trustee holds positions with the Fund’s investment adviser, underwriter and certain other affiliates.

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For more information

The Fund’s proxy voting policies, procedures and records are available without charge, upon request:

By phone	On the Fund’s Web site	On the SEC’s Web site
1-800-225-5291	www. jhfunds. com/proxy	www. sec. gov
Investment adviser	Custodian	Legal counsel
John Hancock Investment	State Street Bank & Trust Co.	Kirkpatrick & Lockhart
Management Services, LLC	2 Avenue de Lafayette	Preston Gates Ellis LLP
601 Congress Street	Boston, MA 02111	One Lincoln Street
Boston, MA 02210-2805		Boston, MA 02111-2950
	Transfer agent
Subadviser	John Hancock Signature	Independent registered
Grantham, Mayo, Van	Services, Inc.	public accounting firm
Otterloo & Co. LLC	P. O. Box 9510	PricewaterhouseCoopers LLP
40 Rowes Wharf	Portsmouth, NH 03802-9510	125 High Street
Boston, MA 02110		Boston, MA 02110
Principal distributor
John Hancock Funds, LLC
601 Congress Street
Boston, MA 02210-2805

How to contact us
Internet	www. jhfunds.com
Mail	Regular mail:	Express mail:
	John Hancock Signature	John Hancock Signature
	Services, Inc.	Services, Inc.
	P. O. Box 9510	Mutual Fund Image Operations
	Portsmouth, NH 03802-9510	164 Corporate Drive
		Portsmouth, NH 03801
Phone	Customer service representatives	1-800-225-5291
	EASI-Line	1-800-338-8080
	TDD line	1-800-554-6713

A listing of month-end portfolio holdings is available on our Web site, www.jhfunds.com. A more detailed portfolio holdings summary is available on a quarterly basis 60 days after the fiscal quarter on our Web site or upon request by calling 1-800-225-5291, or on the SEC’s Web site, www.sec.gov.

Intrinsic Value Fund | Annual report

46

1-800-225-5291
1-800-554-6713 TDD
1-800-338-8080 EASI-Line
www. jhfunds.com

Now available: electronic delivery

www. jhfunds.com/edelivery

This report is for the information of the shareholders of John Hancock Intrinsic Value Fund.	5100A	2/08
It is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus.		4/08

Discussion of Fund performance

By Grantham, Mayo, Van Otterloo & Co. LLC (GMO)

U.S. stocks went on a wild ride during the 12-month period highlighted both by record highs for broad market indexes and conditions deemed poor enough to warrant numerous interventions by the Federal Reserve. For the period in full the S&P 500 Index finished down 3.60%, a modest move which belied its frequent violent gyrations. Growth stocks outpaced value stocks during the period. Financials and consumer discretionary were the worst-performing sectors in the Russell 2500 Value Index, while energy stocks performed the best.

“U.S. stocks went on a wild ride
during the 12-month review
period…”

For the 12 months ended February, 29, 2008, John Hancock Value Opportunities Fund’s Class A, Class B, Class C, Class I, Class R1 and Class 1 shares returned –19.45%, –20.08%, –20.03%, –19.16%, –19.57% and –19.12%, respectively, at net asset value while the Russell 2500 Value Index returned –15.50% . Sector selection detracted from relative returns, while stock selection added. Sector weightings adding to relative returns included an overweight in consumer staples, while sector weightings detracting from relative returns included an overweight in consumer discretionary. Stock selections in consumer discretionary added to relative returns, while picks in industrials detracted. Individual names adding to returns versus the benchmark included overweight positions in Commerce Group, Inc., Annaly Capital Management, Inc. and CDW Corp., while overweight positions detracting from relative returns included Liz Claiborne, Inc., PMI Group Inc., and First Horizon National Corp.

This commentary reflects the views of the portfolio management team through the end of the Fund’s period discussed in this report. The team’s statements reflect their own opinions. As such, they are in no way guarantees of future events and are not intended to be used as investment advice or a recommendation regarding any specific security. They are also subject to change at any time as market and other conditions warrant.

Value Opportunities Fund | Annual report

6

A look at performance

For the periods ended February 29, 2008

		Average annual returns				Cumulative total returns
		with maximum sales charge (POP)				with maximum sales charge (POP)
	Inception				Since				Since
Class	date	1-year	5-year	10-year	inception	1-year	5-year	10-year	inception
A	6-12-06	–23.49%	—	—	–8.06%	–23.49%	—	—	–13.48%
B	6-12-06	–23.87	—	—	–8.04	–23.87	—	—	–13.45
C	6-12-06	–20.79	—	—	–5.93	–20.79	—	—	–10.01
I 1	6-12-06	–19.16	—	—	–4.91	–19.16	—	—	–8.31
R1 1	6-12-06	–19.57	—	—	–5.49	–19.57	—	—	–9.27
1 1	6-12-06	–19.12	—	—	–4.87	–19.12	—	—	–8.24

Performance figures assume all distributions are reinvested. Public offering price (POP) figures reflect maximum sales charge on Class A shares of 5%, and the applicable contingent deferred sales charge (CDSC) on Class B and Class C shares. The Class B shares’ CDSC declines annually between years 1 to 6 according to the following schedule: 5, 4, 3, 3, 2, 1%. No sales charge will be assessed after the sixth year. Class C shares held for less than one year are subject to a 1% CDSC. Sales charge is not applicable for Class I, Class R1 and Class 1 shares.

The expense ratios of the Fund, both net (including any fee waivers or expense limitations) and gross (excluding any fee waivers or expense limitations), are set forth according to the most recent publicly available prospectuses for the Fund and may differ from the expense ratios disclosed in the Financial Highlights tables in this report. The waivers and expense limitations are contractual at least until 06-30-08. The net expenses are as follows: Class A — 1.41%, Class B — 2.11%, Class C — 2.11%, Class I — 1.02%, Class R1 — 1.76%, Class 1 — 0.97% . Had the fee waivers and expense limitations not been in place, the gross expenses would be as follows: Class A — 2.16%, Class B — 11.34%, Class C — 5.12%, Class I — 12.66%, Class R1 — 21.72%, Class 1 — 1.70% .

The returns reflect past results and should not be considered indicative of future performance. The return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, the Fund’s current performance may be higher or lower than the performance shown. For performance data current to the most recent month end, please call 1-800-225-5291 or visit the Fund’s Web site at www.jhfunds.com.

The performance table above and the chart on the next page do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

The Fund’s performance results reflect any applicable expense reductions, without which the expenses increase and results would have been less favorable.

Performance is calculated with an opening price (prior day’s close) on the inception date.

¹ For certain types of investors as described in the Fund’s Class I, Class R1 and Class 1 share prospectuses.

Annual report | Value Opportunities Fund

7

A look at performance

Growth of $10,000

This chart shows what happened to a hypothetical $10,000 investment in Value Opportunities Fund Class A shares for the period indicated. For comparison, we’ve shown the same investment in the Russell 2500 Value Index.

			With maximum
Class	Period beginning	Without sales charge	sales charge	Index
B	6-12-06	$8,994	$8,655	$9,830
C 2	6-12-06	8,999	8,999	9,830
I 3	6-12-06	9,169	9,169	9,830
R1 3	6-12-06	9,073	9,073	9,830
1 3	6-12-06	9,176	9,176	9,830

Assuming all distributions were reinvested for the period indicated, the table above shows the value of a $10,000 investment in the Fund’s Class B, Class C, Class I, Class R1 and Class 1 shares, respectively, as of February 29, 2008. Performance of the classes will vary based on the difference in sales charges paid by shareholders investing in the different classes and the fee structure of those classes.

Russell 2500 Value Index is an unmanaged index containing those securities in the Russell 2500 Index with a less-than-average growth orientation.

It is not possible to invest directly in an index. Index figures do not reflect sales charges, which would have resulted in lower values if they did.

¹ NAV represents net asset value and POP represents public offering price.

² No contingent deferred sales charge applicable.

³ For certain types of investors as described in the Fund’s Class I, Class R1 and Class 1 share prospectuses.

Value Opportunities Fund | Annual report

8

Your expenses

These examples are intended to help you understand your ongoing operating expenses.

Understanding fund expenses

As a shareholder of the Fund, you incur two types of costs:

■ Transaction costs which include sales charges (loads) on purchases or redemptions (varies by share class), minimum account fee charge, etc.

■ Ongoing operating expenses including management fees, distribution and service fees (if applicable), and other fund expenses.

We are going to present only your ongoing operating expenses here.

Actual expenses/actual returns

This example is intended to provide information about your fund’s actual ongoing operating expenses, and is based on your fund’s actual return. It assumes an account value of $1,000.00 on September 1, 2007, with the same investment held until February 29, 2008.

	Account value	Ending value	Expenses paid during
	on 9-1-07	on 2-29-08	period on 2-29-081
Class A	$1,000.00	$853.17	$6.36
Class B	1,000.00	849.83	9.66
Class C	1,000.00	849.93	9.61
Class I	1,000.00	855.00	4.57
Class R1	1,000.00	853.68	5.62
Class 1	1,000.00	855.03	4.34

Together with the value of your account, you may use this information to estimate the operating expenses that you paid over the period. Simply divide your account value at February 29, 2008, by $1,000.00, then multiply it by the “expenses paid” for your share class from the table above. For example, for an account value of $8,600.00, the operating expenses should be calculated as follows:

Annual report | Value Opportunities Fund

9

Your expenses

Hypothetical example for comparison purposes

This table allows you to compare your fund’s ongoing operating expenses with those of any other fund. It provides an example of the Fund’s hypothetical account values and hypothetical expenses based on each class’s actual expense ratio and an assumed 5% annualized return before expenses (which is not your fund’s actual return). It assumes an account value of $1,000.00 on September 1, 2007, with the same investment held until February 29, 2008. Look in any other fund shareholder report to find its hypothetical example and you will be able to compare these expenses.

	Account value	Ending value	Expenses paid during
	on 9-1-07	on 2-29-08	period on 2-29-081
Class A	$1,000.00	$1,018.00	$6.92
Class B	1,000.00	1,014.42	10.52
Class C	1,000.00	1,014.47	10.47
Class I	1,000.00	1,019.94	4.97
Class R1	1,000.00	1,018.80	6.12
Class 1	1,000.00	1,020.19	4.72

Remember, these examples do not include any transaction costs, such as sales charges; therefore, these examples will not help you to determine the relative total costs of owning different funds. If transaction costs were included, your expenses would have been higher. See the prospectus for details regarding transaction costs.

¹ Expenses are equal to the Fund’s annualized expense ratio of 1.38%, 2.10%, 2.09%, 0.99%, 1.22% and 0.94% for Class A, Class B, Class C, Class I, Class R1 and Class 1, respectively, multiplied by the average account value over the period, multiplied by the number of days in most recent fiscal half year/366 (to reflect the one-half year period).

Value Opportunities Fund | Annual report

10

Portfolio summary

Top 10 holdings 1
Western Digital Corp.	1.4%	BorgWarner, Inc.	1.0%
Annaly Capital Management,. Inc., REIT	1.2%	Energizer Holdings, Inc.	1.0%
Commerce Group, Inc.	1.2%	First American Corp.	1.0%
AutoNation, Inc.	1.2%	Transatlantic Holdings, Inc.	0.9%
Reinsurance Group of America, Inc.	1.1%	Tech Data Corp.	0.9%
Sector distribution 1
Financial	25%	Basic materials	5%
Consumer, cyclical	21%	Energy	4%
Consumer, non-cyclical	18%	Communications	3%
Industrial	12%	Utilities	1%
Technology	5%	Others	6%

¹ As a percentage of net assets on February 29, 2008.

Annual report | Value Opportunities Fund

11

F I N A N C I A L   S T A T E M E N T S

Fund’s investments

Securities owned by the Fund on 2-29-08

This schedule is divided into three main categories: common stocks, short-term investments and repurchase agreements. Common stocks are further broken down by industry group. Repurchase agreements, which represent the Fund’s cash position, are listed last.

Issuer	Shares	Value
Common stocks 97.64%		$17,759,402
(Cost $20,057,523)
Aerospace 0.86%		156,029
Alliant Techsystems, Inc. *	1,000	104,940
Curtiss-Wright Corp.	500	21,030
Ducommun, Inc. *	500	13,865
Esterline Technologies Corp. *	200	10,480
Woodward Governor Company	200	5,714
Agriculture 0.37%		66,420
Fresh Del Monte Produce, Inc. *	2,000	66,420
Air Freight 0.01%		1,701
ExpressJet Holdings, Inc. *	700	1,701
Air Travel 0.15%		26,544
SkyWest, Inc.	1,200	26,544
Apparel & Textiles 1.68%		304,637
Columbia Sportswear Company (a)	1,500	61,995
Jones Apparel Group, Inc.	4,000	56,440
K-Swiss, Inc. , Class A	1,200	17,412
Liz Claiborne, Inc.	7,100	126,238
Oxford Industries, Inc.	500	10,570
Timberland Company, Class A *	1,600	24,032
Wolverine World Wide, Inc.	300	7,950
Auto Parts 3.57%		650,192
Aftermarket Technology Corp. *	200	3,750
American Axle & Manufacturing Holdings, Inc.	1,500	29,520
ArvinMeritor, Inc.	4,600	51,934
Autoliv, Inc.	2,200	109,780
BorgWarner, Inc.	4,200	181,062
CSK Auto Corp. *	2,700	24,489
Lear Corp. *	2,200	60,676
O’Reilly Automotive, Inc. *	2,500	67,400
Pep Boys — Manny, Moe & Jack	1,500	17,160
Tenneco, Inc. *	900	22,725
TRW Automotive Holdings Corp. *	3,700	81,696

See notes to financial statements

Value Opportunities Fund | Annual report

12

F I N A N C I A L   S T A T E M E N T S

Issuer	Shares	Value
Auto Services 1.92%		$348,996
AutoNation, Inc. *	14,500	211,265
Avis Budget Group, Inc. *	4,500	51,435
Copart, Inc. *	1,800	74,988
Lithia Motors, Inc. , Class A	1,100	11,308
Automobiles 1.22%		222,420
Asbury Automotive Group, Inc.	3,500	49,070
Group 1 Automotive, Inc.	2,100	51,450
Penske Auto Group, Inc.	6,100	110,044
Rush Enterprises, Inc. , Class A *	800	11,856
Banking 8.58%		1,561,169
AMCORE Financial, Inc.	800	15,536
Anchor BanCorp Wisconsin, Inc.	1,700	32,181
Associated Banc-Corp.	4,700	117,124
Astoria Financial Corp.	1,600	41,872
BancorpSouth, Inc.	2,200	49,456
Bank of Hawaii Corp.	800	38,416
Cathay General Bancorp, Inc. (a)	1,200	26,304
Central Pacific Financial Corp.	600	11,094
Chemical Financial Corp. (a)	1,200	26,664
Citizens Banking Corp.	300	3,339
City National Corp.	2,300	117,875
Colonial Bancgroup, Inc.	800	9,664
Commerce Bancshares, Inc.	1,664	69,306
Community Bank Systems, Inc.	1,300	28,730
Dime Community Bancorp, Inc.	800	12,176
Downey Financial Corp. (a)	1,800	47,142
F. N. B. Corp. (a)	600	8,226
First BanCorp Puerto Rico (a)	3,200	28,928
First Horizon National Corp. (a)	3,600	58,464
FirstMerit Corp.	3,400	63,818
Flagstar Bancorp, Inc. (a)	2,400	17,184
Hanmi Financial Corp.	1,200	9,156
Imperial Capital Bancorp, Inc.	500	11,180
International Bancshares Corp.	2,540	55,067
New York Community Bancorp, Inc.	400	6,532
Old National Bancorp	1,500	23,280
Oriental Financial Group, Inc.	900	18,738
Pacific Capital Bancorp	2,100	43,995
Park National Corp.	300	18,150
Popular, Inc. (a)	10,500	115,920
S & T Bancorp, Inc.	400	11,340
SVB Financial Group *	700	31,710
TCF Financial Corp.	7,200	133,992
The South Financial Group, Inc.	600	8,658

See notes to financial statements

Annual report | Value Opportunities Fund

13

F I N A N C I A L   S T A T E M E N T S

Issuer	Shares	Value
Banking (continued)
TrustCo Bank Corp. , NY (a)	1,100	$9,515
Trustmark Corp. (a)	2,400	47,424
United Bankshares, Inc.	800	21,016
Washington Federal, Inc.	2,000	45,400
Webster Financial Corp.	1,000	27,970
WestAmerica Bancorp (a)	1,100	52,063
Whitney Holding Corp.	400	9,604
Wilmington Trust Corp.	1,200	36,960
Biotechnology 1.32%		240,704
Bio-Rad Laboratories, Inc. , Class A *	200	18,888
Charles River Laboratories International, Inc. *	900	52,722
Immucor, Inc. *	400	11,920
Invitrogen Corp. *	1,400	118,286
Pharmanet Development Group, Inc. *	400	11,532
Techne Corp. *	400	27,356
Broadcasting 0.51%		92,496
Belo Corp. , Class A	2,700	31,779
Discovery Holding Company *	2,400	54,168
Westwood One, Inc.	3,700	6,549
Building Materials & Construction 0.29%		52,633
Dycom Industries, Inc. *	1,100	12,584
EMCOR Group, Inc. *	100	2,409
Lennox International, Inc.	1,000	37,640
Business Services 3.85%		701,041
ABM Industries, Inc.	1,600	31,776
Affiliated Computer Services, Inc. , Class A *	1,100	55,825
CDI Corp.	500	11,375
Convergys Corp. *	1,100	15,884
Deluxe Corp.	5,700	118,731
FactSet Research Systems, Inc.	900	47,376
FTI Consulting, Inc. *	100	6,350
Global Payments, Inc.	700	27,769
Insight Enterprises, Inc. *	2,500	43,825
Kelly Services, Inc. , Class A	2,800	53,788
Manpower, Inc.	700	39,690
MAXIMUS, Inc.	700	25,424
Pre-Paid Legal Services, Inc. *	400	19,060
R. H. Donnelley Corp. *	400	2,836
Resources Connection, Inc. *	900	14,490
ScanSource, Inc. *	600	20,382
SYNNEX Corp. *	1,600	33,296
Total Systems Services, Inc.	3,100	68,913
URS Corp. *	1,200	48,336
Watson Wyatt Worldwide, Inc. , Class A	300	15,915

See notes to financial statements

Value Opportunities Fund | Annual report

14

F I N A N C I A L   S T A T E M E N T S

Issuer	Shares	Value
Cellular Communications 0.31%		$56,280
Telephone & Data Systems, Inc.	1,200	56,280
Chemicals 3.56%		647,881
Albemarle Corp.	100	3,794
Cabot Corp.	500	13,700
Celanese Corp. , Series A	1,700	66,130
Cytec Industries, Inc.	400	22,912
Eastman Chemical Company	400	26,324
FMC Corp.	1,900	107,559
Lubrizol Corp.	2,700	157,410
Olin Corp.	2,000	38,440
PolyOne Corp. *	400	2,600
Rockwood Holdings, Inc. *	600	18,414
Sensient Technologies Corp.	1,900	51,186
Sigma-Aldrich Corp.	2,100	115,542
Stepan Company	700	23,870
Colleges & Universities 0.41%		74,610
Career Education Corp. *	3,900	57,915
Corinthian Colleges, Inc. *	2,100	16,695
Computers & Business Equipment 3.95%		718,533
CACI International, Inc. , Class A *	600	26,196
Diebold, Inc.	200	4,824
Foundry Networks, Inc. *	800	9,496
Ingram Micro, Inc. , Class A *	10,700	163,389
Lexmark International, Inc. *	2,400	79,272
Plexus Corp. *	500	12,385
Tech Data Corp. *	5,000	166,750
Western Digital Corp. *	8,300	256,221
Construction & Mining Equipment 0.12%		21,693
Kaman Corp. , Class A	400	9,600
Rowan Companies, Inc.	300	12,093
Construction Materials 0.38%		68,587
Applied Industrial Technologies, Inc.	100	2,764
Louisiana-Pacific Corp.	100	1,088
Simpson Manufacturing Company, Inc. (a)	2,000	47,920
Standex International Corp.	300	5,703
Universal Forest Products, Inc.	400	11,112
Containers & Glass 0.41%		74,292
Bemis Company, Inc.	700	17,374
Owens-Illinois, Inc. *	700	39,515
Sealed Air Corp.	100	2,421
Silgan Holdings, Inc.	200	9,348
Sonoco Products Company	200	5,634

See notes to financial statements

Annual report | Value Opportunities Fund

15

F I N A N C I A L   S T A T E M E N T S

Issuer	Shares	Value
Cosmetics & Toiletries 0.77%		$139,380
Alberto-Culver Company	2,400	64,320
Chattem, Inc. *	300	23,370
Elizabeth Arden, Inc. *	500	9,110
Estee Lauder Companies, Inc. , Class A	1,000	42,580
Crude Petroleum & Natural Gas 1.96%		356,742
Cimarex Energy Company	1,800	94,860
Forest Oil Corp. *	500	24,665
Patterson-UTI Energy, Inc.	4,600	109,158
Unit Corp. *	2,100	115,815
Whiting Petroleum Corp. *	200	12,244
Domestic Oil 1.04%		188,427
Berry Petroleum Company, Class A	700	28,777
Encore Acquisition Company *	300	11,040
Helix Energy Solutions Group, Inc. *	300	10,566
Holly Corp.	800	42,712
Oil States International, Inc. *	1,900	80,104
Stone Energy Corp. *	300	15,228
Drugs & Health Care 0.43%		78,174
Invacare Corp.	1,300	32,448
Molina Healthcare, Inc. * (a)	600	18,990
Perrigo Company	800	26,736
Educational Services 0.42%		76,312
ITT Educational Services, Inc. *	1,100	60,742
Strayer Education, Inc.	100	15,570
Electrical Equipment 0.47%		86,213
A. O. Smith Corp.	300	10,929
Anixter International, Inc. *	500	32,695
Hubbell, Inc. , Class B	700	31,759
Varian, Inc. *	200	10,830
Electrical Utilities 0.06%		10,486
Teco Energy, Inc.	700	10,486
Electronics 1.74%		316,348
Arrow Electronics, Inc. *	2,600	84,786
Avnet, Inc. *	2,900	97,759
Checkpoint Systems, Inc. *	900	21,780
Synopsys, Inc. *	100	2,321
Teleflex, Inc.	1,600	90,480
Zoran Corp. *	1,400	19,222
Energy 0.67%		122,157
Energen Corp.	1,200	72,000
Energy East Corp.	1,100	29,315
Headwaters, Inc. * (a)	1,700	20,842

See notes to financial statements

Value Opportunities Fund | Annual report

16

F I N A N C I A L   S T A T E M E N T S

Issuer	Shares	Value
Financial Services 1.20%		$218,398
AmeriCredit Corp. *	100	1,438
City Holding Company	300	11,172
Federal Agricultural Mortgage Corp. , Class C	600	14,424
Fulton Financial Corp.	3,800	44,194
Interactive Data Corp.	1,700	49,742
Nelnet, Inc. , Class A (a)	1,500	16,350
SEI Investments Company	2,800	70,028
Student Loan Corp.	100	11,050
Food & Beverages 3.73%		677,644
Chiquita Brands International, Inc. *	1,600	32,752
Corn Products International, Inc.	200	7,342
Dean Foods Company *	3,900	83,928
Del Monte Foods Company	1,400	12,572
Flowers Foods, Inc.	1,500	33,990
Hormel Foods Corp.	600	24,516
J. M. Smucker Company	1,500	76,785
PepsiAmericas, Inc.	2,700	68,310
Performance Food Group Company *	3,400	110,500
Pilgrim’s Pride Corp. (a)	1,200	28,152
Ralcorp Holdings, Inc. *	100	5,545
Sanderson Farms, Inc. (a)	1,200	41,832
Seaboard Corp.	13	20,670
Smithfield Foods, Inc. *	300	8,265
Tyson Foods, Inc. , Class A	8,500	122,485
Funeral Services 0.13%		23,022
Service Corporation International	1,800	19,440
Stewart Enterprises, Inc. , Class A	600	3,582
Furniture & Fixtures 0.84%		152,441
American Woodmark Corp. (a)	100	1,898
Ethan Allen Interiors, Inc. (a)	2,000	54,480
Furniture Brands International, Inc. (a)	2,700	35,100
La-Z-Boy, Inc.	100	843
Leggett & Platt, Inc.	3,600	60,120
Gas & Pipeline Utilities 0.20%		35,609
Equitable Resources, Inc.	200	12,324
ONEOK, Inc.	500	23,285
Healthcare Products 1.90%		344,856
CONMED Corp. *	1,400	37,744
IDEXX Laboratories, Inc. *	1,000	55,470
Kinetic Concepts, Inc. *	400	20,556
Owens & Minor, Inc.	2,200	94,534
Patterson Companies, Inc. *	2,200	77,440
Respironics, Inc. *	900	59,112

See notes to financial statements

Annual report | Value Opportunities Fund

17

F I N A N C I A L   S T A T E M E N T S

Issuer	Shares	Value
Healthcare Services 1.75%		$318,777
AMERIGROUP Corp. *	700	25,200
Apria Healthcare Group, Inc. *	3,900	84,669
Covance, Inc. *	400	33,764
Lincare Holdings, Inc. *	1,900	61,750
Omnicare, Inc.	1,000	20,980
Pediatrix Medical Group, Inc. *	1,400	92,414
Homebuilders 1.27%		230,874
D. R. Horton, Inc.	100	1,403
Lennar Corp. , Class A	100	1,861
M. D. C. Holdings, Inc.	2,700	113,076
Toll Brothers, Inc. *	5,400	114,534
Hotels & Restaurants 1.00%		182,293
Brinker International, Inc.	2,300	42,412
CBRL Group, Inc.	1,500	54,630
CEC Entertainment, Inc. *	1,500	40,245
Jack in the Box, Inc. *	1,000	26,270
O’Charley’s, Inc.	400	4,516
Ruby Tuesday, Inc.	2,000	14,220
Household Products 2.06%		375,259
Blyth, Inc.	3,800	75,354
Church & Dwight, Inc.	400	21,384
Energizer Holdings, Inc. *	1,900	176,377
Tupperware Brands Corp.	2,800	102,144
Industrial Machinery 1.23%		223,835
AGCO Corp. *	700	45,402
Albany International Corp. , Class A	300	10,299
Crane Company	1,400	57,722
EnPro Industries, Inc. *	400	11,812
Gardner Denver, Inc. *	300	11,073
Kennametal, Inc.	1,300	39,481
Middleby Corp. *	200	13,600
Pall Corp.	600	23,622
Tennant Company	300	10,824
Insurance 15.31%		2,784,144
Alfa Corp.	700	15,239
Alleghany Corp. *	100	36,100
American Financial Group, Inc.	3,700	95,719
American National Insurance Company	200	22,690
Arch Capital Group, Ltd. *	1,300	89,024
Aspen Insurance Holdings, Ltd.	400	11,576
Axis Capital Holdings, Ltd.	2,200	81,114
Brown & Brown, Inc.	2,000	35,660
Commerce Group, Inc.	6,000	217,440
Conseco, Inc. *	1,600	18,768

See notes to financial statements

Value Opportunities Fund | Annual report

18

F I N A N C I A L   S T A T E M E N T S

Issuer	Shares	Value
Insurance (continued)
Donegal Group, Inc.	400	$6,528
Endurance Specialty Holdings, Ltd.	900	35,370
Erie Indemnity Company, Class A	1,400	69,090
FBL Financial Group, Inc. , Class A	600	17,646
First American Corp.	5,000	174,150
Harleysville Group, Inc.	600	20,148
HCC Insurance Holdings, Inc.	4,600	110,676
Horace Mann Educators Corp.	3,300	57,354
Kansas City Life Insurance Company	200	8,266
Markel Corp. *	200	92,950
Max Re Capital, Ltd.	400	11,096
MBIA, Inc.	100	1,297
Mercury General Corp.	2,400	109,440
MGIC Investment Corp.	100	1,481
National Western Life Insurance Company, Class A	200	35,630
Nationwide Financial Services, Inc. , Class A	2,500	103,125
Navigators Group, Inc. *	200	10,946
Odyssey Re Holdings Corp.	800	28,944
Old Republic International Corp.	8,700	119,364
PartnerRe, Ltd.	800	61,512
Philadelphia Consolidated Holding Corp. *	4,400	149,248
Platinum Underwriters Holdings, Ltd.	300	10,350
PMI Group, Inc.	100	727
Presidential Life Corp.	500	8,380
Protective Life Corp.	2,100	81,039
Reinsurance Group of America, Inc.	3,600	196,956
RenaissanceRe Holdings, Ltd.	600	32,940
RLI Corp.	1,200	62,676
Safety Insurance Group, Inc.	1,300	48,217
Selective Insurance Group, Inc.	2,000	47,520
Stancorp Financial Group, Inc.	1,800	88,362
State Auto Financial Corp.	400	10,856
Stewart Information Services Corp.	2,100	62,517
Transatlantic Holdings, Inc.	2,500	168,500
United Fire & Casualty Company	700	24,045
Unitrin, Inc.	900	32,040
Universal American Financial Corp. *	600	10,308
Zenith National Insurance Corp.	1,500	51,120
Internet Content 0.06%		11,209
InfoSpace, Inc. *	1,100	11,209
Internet Service Provider 0.13%		23,859
Earthlink, Inc. *	3,300	23,859

See notes to financial statements

Annual report | Value Opportunities Fund

19

F I N A N C I A L   S T A T E M E N T S

Issuer	Shares	Value
Leisure Time 0.70%		$128,004
Brunswick Corp.	5,000	81,450
Callaway Golf Company	800	12,192
Polaris Industries, Inc. (a)	900	34,362
Life Sciences 0.77%		140,799
PerkinElmer, Inc.	2,000	49,640
Pharmaceutical Product Development, Inc.	700	31,549
Waters Corp. *	1,000	59,610
Liquor 0.42%		77,012
Constellation Brands, Inc. , Class A *	1,200	23,052
Molson Coors Brewing Company, Class B	1,000	53,960
Manufacturing 2.24%		407,994
AptarGroup, Inc.	1,700	63,716
Blout International, Inc. *	1,000	11,930
Ceradyne, Inc. *	1,100	34,221
Mine Safety Appliances Company	500	20,055
Pentair, Inc.	1,700	55,454
Snap-on, Inc.	500	24,960
SPX Corp.	1,600	163,680
Stanley Works	700	33,978
Medical-Hospitals 0.43%		77,555
Centene Corp. *	500	8,960
Health Management Associates, Inc. , Class A *	5,400	28,890
LifePoint Hospitals, Inc. *	1,200	30,072
VCA Antech, Inc. *	300	9,633
Metal & Metal Products 2.22%		403,990
Commercial Metals Company	1,200	36,552
Lawson Products, Inc.	300	7,620
Matthews International Corp. , Class A	600	26,916
Mueller Industries, Inc.	1,100	31,603
Quanex Corp.	2,400	123,480
Reliance Steel & Aluminum Company	2,500	138,650
Timken Company	1,300	39,169
Mobile Homes 0.34%		60,960
Thor Industries, Inc.	2,000	60,960
Newspapers 0.19%		34,409
AH Belo Corp. *	540	6,572
Lee Enterprises, Inc. (a)	2,700	27,837
Office Furnishings & Supplies 0.61%		110,812
Office Depot, Inc. *	2,800	31,836
United Stationers, Inc. *	1,600	78,976
Paper 0.21%		37,452
Rock-Tenn Company, Class A	200	5,366
Smurfit-Stone Container Corp. *	1,100	8,745
Temple-Inland, Inc.	1,700	23,341

See notes to financial statements

Value Opportunities Fund | Annual report

20

F I N A N C I A L   S T A T E M E N T S

Issuer	Shares	Value
Petroleum Services 1.01%		$184,551
Helmerich & Payne, Inc.	2,000	89,660
Tidewater, Inc.	1,300	72,995
World Fuel Services Corp.	700	21,896
Pharmaceuticals 1.40%		255,280
Endo Pharmaceutical Holdings, Inc. *	1,400	36,764
King Pharmaceuticals, Inc. *	14,700	155,820
Par Pharmaceutical Companies, Inc. *	400	7,076
Watson Pharmaceuticals, Inc. *	2,000	55,620
Publishing 0.63%		113,890
Scholastic Corp. *	100	3,487
The New York Times Company, Class A (a)	4,300	80,109
Valassis Communications, Inc. *	2,700	30,294
Real Estate 1.54%		280,509
Annaly Capital Management, Inc. , REIT	10,900	225,520
Anthracite Capital, Inc. , REIT (a)	2,500	15,975
Anworth Mortgage Asset Corp. , REIT	2,600	24,674
MFA Mortgage Investments, Inc. , REIT	1,500	14,340
Retail Grocery 0.99%		180,096
Ingles Markets, Inc.	1,900	45,619
Nash Finch Company	2,100	73,647
SUPERVALU, Inc.	1,700	44,625
Weis Markets, Inc.	500	16,205
Retail Trade 6.78%		1,234,104
Advance Auto Parts, Inc.	2,700	90,558
Aeropostale, Inc. *	900	24,174
American Eagle Outfitters, Inc.	2,900	61,973
Big Lots, Inc. *	700	11,795
BJ’s Wholesale Club, Inc. *	4,700	148,332
Borders Group, Inc.	1,200	11,112
Chico’s FAS, Inc. *	3,200	29,792
Dollar Tree Stores, Inc. *	5,600	150,248
Family Dollar Stores, Inc.	4,600	88,090
Foot Locker, Inc.	2,800	34,440
Fossil, Inc. *	1,100	35,398
Longs Drug Stores Corp.	800	38,424
NBTY, Inc. *	1,600	45,696
RadioShack Corp.	3,800	66,310
Regis Corp.	2,500	62,625
Rent-A-Center, Inc. *	3,600	61,740
Ross Stores, Inc.	2,500	69,625
Sonic Automotive, Inc.	2,800	49,784
The Men’s Wearhouse, Inc.	1,100	25,344
Tiffany & Company	400	15,056
Tuesday Morning Corp.	3,400	18,326

See notes to financial statements

Annual report | Value Opportunities Fund

21

F I N A N C I A L   S T A T E M E N T S

Issuer	Shares	Value
Retail Trade (continued)
Tween Brands, Inc. *	700	$20,720
United Rentals, Inc. *	700	14,070
Williams-Sonoma, Inc. (a)	1,100	25,696
Zale Corp. *	1,800	34,776
Semiconductors 0.72%		131,031
Cabot Microelectronics Corp. *	700	23,443
Intersil Corp. , Class A	3,200	74,464
Semtech Corp. *	2,600	33,124
Software 0.54%		98,049
Compuware Corp. *	4,400	35,024
Novell, Inc. *	3,100	23,095
Sybase, Inc. *	1,500	39,930
Steel 0.46%		84,488
Carpenter Technology Corp.	200	12,566
Schnitzer Steel Industries, Inc.	400	26,188
Worthington Industries, Inc.	2,600	45,734
Telecommunications Equipment & Services 0.92%		167,598
ADC Telecommunications, Inc. *	2,400	32,808
ADTRAN, Inc.	1,200	22,104
J2 Global Communications, Inc. *	900	19,368
Plantronics, Inc.	3,000	56,580
Telecommunications Equipment & Premiere Global Services, Inc. *	2,600	36,738
Telephone 0.60%		108,570
CenturyTel, Inc.	3,000	108,570
Tires & Rubber 0.24%		44,271
Cooper Tire & Rubber Company	2,300	41,561
Goodyear Tire & Rubber Company *	100	2,710
Tobacco 0.28%		51,219
Universal Corp.	900	51,219
Toys, Amusements & Sporting Goods 0.29%		52,630
Hasbro, Inc.	1,500	38,655
Jakks Pacific, Inc. *	500	13,975
Transportation 0.68%		124,072
Bristow Group, Inc. *	200	10,552
Golar LNG, Ltd. (a)	1,000	19,090
Overseas Shipholding Group, Inc.	1,300	81,536
Teekay Shipping Corp.	300	12,894
Trucking & Freight 0.59%		106,740
Arkansas Best Corp. (a)	1,600	42,736
Werner Enterprises, Inc.	1,200	21,348
YRC Worldwide, Inc. *	3,100	42,656

See notes to financial statements

Value Opportunities Fund | Annual report

22

F I N A N C I A L   S T A T E M E N T S

Issuer	Shares	Value
Short-term investments 5.42%		$986,503
(Cost $986,503)
John Hancock Cash Investment Trust, 3.5681% (c)(f)	986,503	986,503
	Principal
	amount
Repurchase agreements 2.35%		$427,790
(Cost $427,790)
Repurchase Agreement with State Street Corp. dated 2-29-08 at
2.35% to be repurchased at $427,874 on 3-3-08,
collateralized by $445,000 Federal National Mortgage
Association, 5.57%, due 7-14-08 (valued at $439,994,
including interest)	$427,790	427,790
Total investments (Cost $21,471,816) † 105.41%		$19,173,695
Liabilities in excess of other assets (5.41%)		($984,185)
Total net assets 100.00%		$18,189,510

Percentages are stated as a percent of net assets.

REIT Real Estate Investment Trust

* Non-income producing.

(a) All or a portion of this security was out on loan.

(c) Investment is an affiliate of the Trust’s adviser or subadviser.

(f) John Hancock Cash Investment Trust is managed by MFC Global Investment Management (U.S.), LLC. The rate shown is the seven-day effective yield at period end.

† At February 29, 2008, the aggregate cost of investment securities for federal income tax purposes was $21,495,776. Net unrealized depreciation aggregated $2,322,081, of which $886,964 related to appreciated investment securities and $3,209,045 related to depreciated investment securities.

See notes to financial statements

Annual report | Value Opportunities Fund

23

F I N A N C I A L   S T A T E M E N T S

Financial statements

Statement of assets and liabilities 2-29-08

This Statement of Assets and Liabilities is the Fund’s balance sheet. It shows the value of what the Fund owns, is due and owes. You’ll also find the net asset value and the maximum public offering price per share.

Assets
Investments in unaffiliated issuers, at value (cost $20,057,523) including
$967,160 of securities loaned (Note 2)	$17,759,402
Repurchase agreement, at value (cost $427,790) (Note 2)	427,790
Investments in affiliated issuers, at value (cost $986,503) (Note 2)	986,503
Total investments, at value (cost $21,471,816)	19,173,695
Cash collateral at broker for futures contracts	41,280
Receivable for fund shares sold	7,634
Dividends and interest receivable (net of tax)	21,245
Receivable for security lending income	819
Other assets	69
Total assets	19,244,742
Liabilities
Payable upon return of securities loaned (Note 2)	986,503
Payable for futures variation margin	6,255
Distributions payable	20
Payable to affiliates
Fund administration fees	228
Transfer agent fees	3,081
Distribution and service fees	173
Investment management fees	1,202
Trustees’ fees	79
Other payables and accrued expenses	57,691
Total liabilities	1,055,232
Net assets
Capital paid-in	$21,829,848
Undistributed net investment income	7,711
Accumulated undistributed net realized gain (loss)
on investments and futures contracts	(1,343,353)
Net unrealized appreciation (depreciation) on investments and futures contracts	(2,304,696)
Net assets	$18,189,510

See notes to financial statements

Value Opportunities Fund | Annual report

24

F I N A N C I A L   S T A T E M E N T S

Statement of assets and liabilities continued

Net asset value per share
The Fund has an unlimited number of shares authorized with no par value.
Net asset value is calculated by dividing the net assets of each class of
shares by the number of outstanding shares in the class.
Class A
Net assets	$16,079,031
Shares outstanding	945,981
Net asset value and redemption price per share	$17.00
Class B 1
Net assets	$300,831
Shares outstanding	17,756
Net asset value and offering price per share	$16.94
Class C 1
Net assets	$1,019,170
Shares outstanding	60,137
Net asset value and offering price per share	$16.95
Class I
Net assets	$99,946
Shares outstanding	5,873
Net asset value, offering price and redemption price per share	$17.02
Class R1
Net assets	$109,547
Shares outstanding	6,460
Net asset value, offering price and redemption price per share	$16.96
Class 1
Net assets	$580,985
Shares outstanding	34,140
Net asset value, offering price and redemption price per share	$17.02
Maximum public offering price per share
Class A (net asset value per share + 95%) 2	$17.89

¹ Redemption price per share is equal to the net asset value less any applicable contingent deferred sales charge.

² On single retail sales of less than $50,000. On sales of $50,000 or more and on group sales the offering price is reduced.

See notes to financial statements

Annual report | Value Opportunities Fund

25

F I N A N C I A L   S T A T E M E N T S

Statement of operations For the year ended 2-29-08

This 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.

Investment income
Dividends	$368,621
Interest	36,084
Securities lending	18,372
Income from affiliated issuers	5,051
Less foreign taxes withheld	(288)
Total investment income	427,840
Expenses
Investment management fees (Note 3)	175,481
Distribution and service fees (Note 3)	76,754
Transfer agent fees (Note 3)	19,927
Fund administration fees (Note 3)	10,054
Blue sky fees (Note 3)	80,141
Audit and legal fees	67,086
Printing and postage fees (Note 3)	6,768
Custodian fees	56,683
Trustees’ fees (Note 4)	1,579
Registration and filing fees	27,323
Miscellaneous	310
Total expenses	522,106
Less: expense reductions (Note 3)	(207,891)
Net expenses	314,215
Net investment income	113,625
Realized and unrealized gain (loss)
Net realized gain (loss) on
Investments in unaffiliated issuers	(598,344)
Futures contracts	(39,015)
	(637,359)
Change in net unrealized appreciation (depreciation) of
Investments in unaffiliated issuers	(4,115,974)
Futures contracts	(3,615)
	(4,119,589)
Net realized and unrealized gain (loss)	(4,756,948)
Increase (decrease) in net assets from operations	($4,643,323)

See notes to financial statements

Value Opportunities Fund | Annual report

26

F I N A N C I A L   S T A T E M E N T S

Statement of changes in net assets

These Statements of Changes in Net Assets show how the value of the Fund’s net assets has changed during the last two periods. The difference reflects earnings less expenses, any investment gains and losses, distributions, if any, paid to shareholders and the net of Fund share transactions.

	Year	Year
	ended	ended
	2-28-071	2-29-08
Increase (decrease) in net assets
From operations
Net investment income	60,627	$113,625
Net realized gain (loss)	437,545	(637,359)
Change in net unrealized appreciation (depreciation)	1,814,893	(4,119,589)
Increase (decrease) in net assets resulting from operations	2,313,065	(4,643,323)
Distributions to shareholders
From net investment income
Class A	(70,959)	(98,667)
Class B	(135)	—
Class C	(747)	—
Class I	(1,369)	(1,006)
Class R1	(372)	(547)
Class 1	(880)	(4,886)
From net realized gain
Class A	(135,189)	(875,720)
Class B	(1,747)	(16,516)
Class C	(9,633)	(64,954)
Class I	(1,755)	(5,327)
Class R1	(807)	(5,854)
Class 1	(1,083)	(24,644)
Total distributions	(224,676)	(1,098,121)
From Fund share transactions (Note 6)	20,103,746	1,738,819
Total increase (decrease)	22,192,135	(4,002,625)
Net assets
Beginning of year	—	22,192,135
End of year	$22,192,135	$18,189,510
Undistributed net investment income	—	$7,711

¹ Period from 6-12-06 (commencement of operations) to 2-28-07.

See notes to financial statements

Annual report | Value Opportunities Fund

27

F I N A N C I A L   S T A T E M E N T S

Financial highlights

The Financial Highlights show how the Fund’s net asset value for a share has changed since the end of the previous period.

CLASS A SHARES

Period ended	2-28-07 1	2-29-08
Per share operating performance
Net asset value, beginning of period	$20.00	$22.36
Net investment income (loss) 2	0.07 3	0.12
Net realized and unrealized gain
(loss) on investments	2.53	(4.41)
Total from investment operations	2.60	(4.29)
Less distributions
From net investment income	(0.08)	(0.11)
From net realized gain	(0.16)	(0.96)
	(0.24)	(1.07)
Net asset value, end of period	$22.36	$17.00
Total return 4,5 (%)	13.06 6	(19.45)
Ratios and supplemental data
Net assets, end of period (in millions)	$20	$16
Ratios (as a percentage of average net assets):
Expenses before reductions	2.13 7	2.04
Expenses net of fee waivers, if any	1.38 7	1.39
Expenses net of all fee waivers and credits	1.38 7	1.39
Net investment income (loss)	0.47 3,7	0.56
Portfolio turnover (%)	30 6	68

¹ Class A shares began operations on 6-12-06.

² Based on the average of the shares outstanding.

³ Net investment income per share and ratio of net investment income to average net assets reflects a special dividend received by the Fund which amounted to $0.02 per share and 0.09% of average net assets.

⁴ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁵ Assumes dividend reinvestment.

⁶ Not annualized.

⁷ Annualized.

See notes to financial statements

Value Opportunities Fund | Annual report

28

F I N A N C I A L   S T A T E M E N T S

Financial highlights

CLASS B SHARES

Period ended	2-28-07 1	2-29-08
Per share operating performance
Net asset value, beginning of period	$20.00	$22.33
Net investment income (loss) 2	(0.01) 3	(0.03)
Net realized and unrealized gain
(loss) on investments	2.51	(4.40)
Total from investment operations	2.50	(4.43)
Less distributions
From net investment income	(0.01)	—
From net realized gain	(0.16)	(0.96)
	(0.17)	(0.96)
Net asset value, end of period	$22.33	$16.94
Total return 4,5 (%)	12.54 6	(20.08)
Ratios and supplemental data
Net assets, end of period (in millions)	— 7	— 7
Ratios (as a percentage of average net assets):
Expenses before reductions	11.31 8	6.82
Expenses net of fee waivers, if any	2.08 8	2.10
Expenses net of all fee waivers and credits	2.08 8	2.09
Net investment income (loss)	(0.07) 3,8	(0.14)
Portfolio turnover (%)	30 6	68

¹ Class B shares began operations on 6-12-06.

² Based on the average of the shares outstanding.

³ Net investment loss per share and ratio of net investment loss to average net assets reflects a special dividend received by the Fund which amounted to $0.02 per share and 0.10% of average net assets.

⁴ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁵ Assumes dividend reinvestment.

⁶ Not annualized.

⁷ Less than $500,0000.

⁸ Annualized.

See notes to financial statements

Annual report | Value Opportunities Fund

29

F I N A N C I A L   S T A T E M E N T S

Financial highlights

CLASS C SHARES

Period ended	2-28-07 1	2-29-08
Per share operating performance
Net asset value, beginning of period	$20.00	$22.33
Net investment income (loss) 2	(0.01) 3	(0.03)
Net realized and unrealized gain
(loss) on investments	2.51	(4.39)
Total from investment operations	2.50	(4.42)
Less distributions
From net investment income	(0.01)	—
From net realized gain	(0.16)	(0.96)
	(0.17)	(0.96)
Net asset value, end of period	$22.33	$16.95
Total return 4,5 (%)	12.54 6	(20.03)
Ratios and supplemental data
Net assets, end of period (in millions)	$1	$1
Ratios (as a percentage of average net assets):
Expenses before reductions	5.09 7	3.88
Expenses net of fee waivers, if any	2.08 7	2.10
Expenses net of all fee waivers and credits	2.08 7	2.09
Net investment income (loss)	(0.07) 3,7	(0.14)
Portfolio turnover (%)	30 6	68

¹ Class C shares began operations on 6-12-06.

² Based on the average of the shares outstanding.

³ Net investment loss per share and ratio of net investment loss to average net assets reflects a special dividend received by the Fund which amounted to $0.02 per share and 0.10% of average net assets.

⁴ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁵ Assumes dividend reinvestment.

⁶ Not annualized.

⁷ Annualized.

See notes to financial statements

Value Opportunities Fund | Annual report

30

F I N A N C I A L   S T A T E M E N T S

Financial highlights

CLASS I SHARES

Period ended	2-28-07 1	2-29-08
Per share operating performance
Net asset value, beginning of period	$20.00	$22.39
Net investment income (loss) 2	0.15 3	0.18
Net realized and unrealized gain
(loss) on investments	2.53	(4.41)
Total from investment operations	2.68	(4.23)
Less distributions
From net investment income	(0.13)	(0.18)
From net realized gain	(0.16)	(0.96)
	(0.29)	(1.14)
Net asset value, end of period	$22.39	$17.02
Total return 4,5 (%)	13.42 6	(19.16)
Ratios and supplemental data
Net assets, end of period (in millions)	— 7	— 7
Ratios (as a percentage of average net assets):
Expenses before reductions	12.63 8	8.80
Expenses net of fee waivers, if any	0.99 8	0.99
Expenses net of all fee waivers and credits	0.99 8	0.99
Net investment income (loss)	0.96 3,8	0.86
Portfolio turnover (%)	30 6	68

¹ Class I shares began operations on 6-12-06.

² Based on the average of the shares outstanding.

³ Net investment income per share and ratio of net investment income to average net assets reflects a special dividend received by the Fund which amounted to $0.02 per share and 0.10% of average net assets.

⁴ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁵ Assumes dividend reinvestment.

⁶ Not annualized.

⁷ Less than $500,0000.

⁸ Annualized.

See notes to financial statements

Annual report | Value Opportunities Fund

31

F I N A N C I A L   S T A T E M E N T S

Financial highlights

CLASS R1 SHARES

Period ended	2-28-07 1	2-29-08
Per share operating performance
Net asset value, beginning of period	$20.00	$22.32
Net investment income (loss) 2	0.02 3	0.10
Net realized and unrealized gain
(loss) on investments	2.53	(4.41)
Total from investment operations	2.55	(4.31)
Less distributions
From net investment income	(0.07)	(0.09)
From net realized gain	(0.16)	(0.96)
	(0.23)	(1.05)
Net asset value, end of period	$22.32	$16.96
Total return 4,5 (%)	12.80 6	(19.57)
Ratios and supplemental data
Net assets, end of period (in millions)	— 7	— 7
Ratios (as a percentage of average net assets):
Expenses before reductions	21.69 8	15.22
Expenses net of fee waivers, if any	1.73 8	1.49
Expenses net of all fee waivers and credits	1.73 8	1.49
Net investment income (loss)	0.12 3,8	0.48
Portfolio turnover (%)	30 6	68

¹ Class R1 shares began operations on 6-12-06.

² Based on the average of the shares outstanding.

³ Net investment income per share and ratio of net investment income to average net assets reflects a special dividend received by the Fund which amounted to $0.02 per share and 0.09% of average net assets.

⁴ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁵ Assumes dividend reinvestment.

⁶ Not annualized.

⁷ Less than $500,0000.

⁸ Annualized.

See notes to financial statements

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F I N A N C I A L   S T A T E M E N T S

Financial highlights

CLASS 1 SHARES

Period ended	2-28-07 1	2-29-08
Per share operating performance
Net asset value, beginning of period	$20.00	$22.39
Net investment income (loss) 2	0.14 3	0.23
Net realized and unrealized gain
(loss) on investments	2.54	(4.45)
Total from investment operations	2.68	(4.22)
Less distributions
From net investment income	(0.13)	(0.19)
From net realized gain	(0.16)	(0.96)
	(0.29)	(1.15)
Net asset value, end of period	$22.39	$17.02
Total return 4,5 (%)	13.44 6	(19.12)
Ratios and supplemental data
Net assets, end of period (in millions)	— 7	$1
Ratios (as a percentage of average net assets):
Expenses before reductions	1.67 8	1.62
Expenses net of fee waivers, if any	0.94 8	0.94
Expenses net of all fee waivers and credits	0.94 8	0.94
Net investment income (loss)	0.89 3,8	1.14
Portfolio turnover (%)	30 6	68

¹ Class 1 shares began operations on 6-12-06.

² Based on the average of the shares outstanding.

³ Net investment income per share and ratio of net investment income to average net assets reflects a special dividend received by the Fund which amounted to $0.02 per share and 0.09% of average net assets.

⁴ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁵ Assumes dividend reinvestment.

⁶ Not annualized.

⁷ Less than $500,0000.

⁸ Annualized.

See notes to financial statements

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Notes to financial statements

1. Organization

John Hancock Value Opportunities Fund (the Fund) is a diversified series of John Hancock Funds III (the Trust). The Trust was established as a Massachusetts business trust on June 9, 2005. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end investment management company. The investment objective of the Fund is to seek long-term capital growth.

John Hancock Life Insurance Company of New York (John Hancock New York) is a wholly owned subsidiary of John Hancock Life Insurance Company (U.S.A.) (John Hancock USA). John Hancock USA and John Hancock New York are indirect wholly owned subsidiaries of The Manufacturers Life Insurance Company (Manulife), which in turn is a wholly owned subsidiary of Manulife Financial Corporation (MFC), a publicly traded company. MFC and its subsidiaries are known collectively as “Manulife Financial.”

John Hancock Investment Management Services, LLC (the Adviser), a Delaware limited liability company controlled by John Hancock USA, serves as investment adviser for the Trust and John Hancock Funds, LLC (the Distributor), a Delaware limited liability company, an affiliate of the Adviser, serves as principal underwriter.

The Board of Trustees have authorized the issuance of multiple classes of shares of the Fund, including classes designated as Class A, Class B, Class C, Class I, Class R1 and Class 1 shares. Class A, Class B and Class C shares are open to all retail investors. Class I shares are offered without any sales charge to various institutional and certain individual investors. Class R1 shares are available only to certain retirement plans. Class 1 shares are sold only to certain exempt separate accounts of John Hancock USA and John Hancock New York.

The shares of each class represent an interest in the same portfolio of investments of the Fund, and have equal rights as to voting, redemptions, dividends and liquidation, except that certain expenses, subject to the approval of the Board of Trustees, may be applied differently to each class of shares in accordance with current regulations of the Securities and Exchange Commission (SEC) and the Internal Revenue Service. Shareholders of a class that bear distribution and service expenses under the terms of a distribution plan have exclusive voting rights to that distribution plan. Class B shares will convert to Class A shares eight years after purchase.

The Adviser and other affiliates of John Hancock USA owned 776,719 and 5,350 shares of beneficial interest of Class A and Class R1, respectively, on February 29, 2008.

2. Significant accounting policies

In the preparation of the financial statements, the Fund follows the policies described below. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results may differ from these estimates.

Security valuation

The net asset value of the shares of the Fund is determined daily as of the close of the New York Stock Exchange (NYSE), normally at 4:00 p.m., Eastern Time. Short-term debt investments that have a remaining maturity of 60 days or less are valued at amortized cost, and thereafter assume a constant amortization to maturity of any discount or premium, which approximates market value. Investments in John Hancock Cash Investment Trust (JHCIT),

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an affiliate of the John Hancock Advisers, LLC (JHA), a wholly owned subsidiary of John Hancock Financial Services, Inc., a subsidiary of MFC, are valued at their net asset value each business day. All other securities held by the Fund are valued at the last sale price or official closing price (closing bid price or last evaluated quote if no sale has occurred) as of the close of business on the principal securities exchange (domestic or foreign) on which they trade or, lacking any sales, at the closing bid price. Securities traded only in the over-the-counter market are valued at the last bid price quoted by brokers making markets in the securities at the close of trading. Securities for which there are no such quotations, principally debt securities, are valued based on the evaluated prices provided by an independent pricing service, which utilizes both dealer-supplied and electronic data processing techniques, which take into account factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other market data.

Other assets and securities for which no such quotations are readily available are valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees. Generally, trading in non-U.S. securities is substantially completed each day at various times prior to the close of trading on the NYSE. The values of such securities used in computing the net asset value of a Fund’s shares are generally determined as of such times. Occasionally, significant events that affect the values of such securities may occur between the times at which such values are generally determined and the close of the NYSE. Upon such an occurrence, these securities will be valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees.

In deciding whether to make a fair value adjustment to the price of a security, the Board of Trustees or their designee may review a variety of factors, including developments in foreign markets, the performance of U.S. securities markets and the performance of instruments trading in U.S. markets that represent foreign securities and baskets of foreign securities. The Fund may also fair value securities in other situations, for example, when a particular foreign market is closed, but the Fund is calculating the net asset value. In view of these factors, it is likely that Funds investing significant amounts of assets in securities in foreign markets will be fair valued more frequently than Funds investing significant amounts of assets in frequently traded, U.S. exchange listed securities of large-capitalization U.S. issuers.

For purposes of determining when fair value adjustments may be appropriate with respect to Funds that invest in securities in foreign markets that close prior to the NYSE, the Fund will, on an ongoing basis, monitor for “significant market events.” A significant market event may be a certain percentage change in the value of an index or of certain Exchange Traded Funds that track foreign markets in which Funds have significant investments. If a significant market event occurs due to a change in the value of the index or of Exchange Traded Funds, the pricing for the Fund will promptly be reviewed and potential adjustments to the net asset value of the Fund will be recommended to the Trust’s Pricing Committee when applicable.

Fair value pricing of securities is intended to help ensure that the net asset value of the Fund’s shares reflects the value of the Fund’s securities as of the close of the NYSE (as opposed to a value which is no longer accurate as of such close), thus limiting the opportunity for aggressive traders to purchase shares of the Fund at deflated prices, reflecting stale security valuations, and to promptly sell such shares at a gain. However, a security’s valuation may differ depending on the method used for determining value and no assurance can be given that fair value pricing of securities will successfully eliminate all potential opportunities for such trading gains.

New accounting pronouncements

In September 2006, Financial Accounting Standards Board (FASB) Standard No. 157, Fair Value Measurements (FAS 157), was issued

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and is effective for fiscal years beginning after November 15, 2007. FAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosure about fair value measurements. As of February 29, 2008, management does not believe the adoption of FAS 157 will impact the amounts reported in the financial statements; however, additional disclosures regarding pricing sources will be required about the inputs used to develop the measurements of fair value and the related realized and unrealized gain/loss for certain securities valued by significant unobservable market inputs.

In March 2008, FASB No. 161 (FAS 161), Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133 (FAS 133), was issued and is effective for fiscal years beginning after November 15, 2008. FAS 161 amends and expands the disclosure requirements of FAS 133 in order to provide financial statement users an understanding of a company’s use of derivative instruments, how derivative instruments are accounted for under FAS 133 and related interpretations and how these instruments affect a company’s financial position, performance, and cash flows. FAS 161 requires companies to disclose information detailing the objectives and strategies for using derivative instruments, the level of derivative activity entered into by the company, and any credit risk-related contingent features of the agreements. Management is currently evaluating the adoption of FAS 161 on the Fund’s financial statement disclosures.

Guarantees and indemnifications

Under the Trust’s organizational documents, its Officers and Trustees are indemnified against certain liability arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust that have not yet occurred.

Repurchase agreements

The Fund may enter into repurchase agreements. When the Fund enters into a repurchase agreement through its custodian, it receives delivery of securities, the amount of which at the time of purchase and each subsequent business day is required to be maintained at such a level that the market value is generally at least 102% of the repurchase amount. The Fund will take constructive receipt of all securities underlying the repurchase agreements it has entered into until such agreements expire. If the seller defaults, the Fund would suffer a loss to the extent that proceeds from the sale of underlying securities were less than the repurchase amount. The Fund may enter into repurchase agreements maturing within seven days with domestic dealers, banks or other financial institutions deemed to be creditworthy by the Adviser. Collateral for certain tri-party repurchase agreements is held at the custodian bank in a segregated account for the benefit of the Fund and the counterpa rty.

Security transactions and related investment income

Investment security transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment transactions are reported on trade date. Interest income is accrued as earned. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Foreign dividends are recorded on the ex-date or when the Fund becomes aware of the dividends from cash collections. Discounts/premiums are accreted/ amortized for financial reporting purposes. Non-cash dividends are recorded at the fair market value of the securities received. Debt obligations may be placed in a non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful, based upon consistently applied procedures.

From time to time, the Fund may invest in Real Estate Investment Trusts (REITs) and, as a result, will estimate the components of distributions from these securities. Distributions from REITs

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received in excess of income are recorded as a reduction of cost of investments and/or as a realized gain.

The Fund uses the specific identification method for determining realized gain or loss on investments for both financial statement and federal income tax reporting purposes.

Allocations of income and expenses

All income, expenses (except class-specific expenses), and realized and unrealized gain/ loss are allocated to each class of shares based upon the relative net assets of each class. Dividends to shareholders from net investment income are determined at a class level and distributions from capital gains are determined at a Fund level.

Expenses not directly attributable to the Fund or share classes are allocated based on the relative share of net assets of the Fund or share class at the time the expense was incurred. Class-specific expenses, as detailed in Note 3, are accrued daily and charged directly to the respective share classes.

Securities lending

The Fund may lend portfolio securities from time to time in order to earn additional income. The Fund retains beneficial ownership of the securities it has loaned and continues to receive interest and dividends paid by the issuer of securities and to participate in any changes in their value. On the settlement date of the loan, the Fund receives collateral against the loaned securities and maintain collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. Any cash collateral received is invested in the JHCIT. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collat eral. The Fund receives compensation for lending its securities either in the form of fees, guarantees, and/or by retaining a portion of interest on the investment of any cash received as collateral.

The Fund has entered into an agreement with Morgan Stanley & Co. Incorporated and MS Securities Services Inc. (collectively, Morgan Stanley), which permits the Fund to lend securities to Morgan Stanley on a principal basis. Morgan Stanley is the primary borrower of securities of the Fund. The risk of having one primary borrower of Fund securities (as opposed to several borrowers in an agency relationship) is that should Morgan Stanley fail financially, all securities lent will be affected by the failure and by any delays in recovery of the securities (or in the rare event, loss of rights in the collateral).

Prior to May 8, 2007, cash collateral was invested in the State Street Navigator Securities Lending Portfolio. At February 29, 2008, the Fund loaned securities having a market value of $967,180 collateralized by securities in the amount of $986,503.

Futures

The Fund may purchase and sell financial futures contracts and options on those contracts. The Fund invests in contracts based on financial instruments, such as U.S. Treasury Bonds or Notes, or on securities indices such as the Standard & Poor’s 500 Index, in order to hedge against a decline in the value of securities owned by the Fund.

Initial margin deposits required upon entering into futures contracts are satisfied by the delivery of specific securities or cash as collateral to the broker (the Fund’s agent in acquiring the futures position). If the position is closed out by taking an opposite position prior to the settlement date of the futures contract, a final determination of variation margin is made, cash is required to be paid to or released by the broker and the Fund realizes a gain or loss.

When the Fund sells a futures contract based on a financial instrument, the Fund becomes obligated to deliver that kind of instrument at an agreed upon date for a specified price. The Fund realizes a gain or loss depending on whether the price of an offsetting purchase is less or more than the price of the initial sale

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or on whether the price of an offsetting sale is more or less than the price of the initial purchase. The Fund could be exposed to risks if it could not close out futures positions because of an illiquid secondary market or the inability of counterparties to meet the terms of their contracts. Futures contracts are valued at the quoted daily settlement prices established by the exchange on which they trade.

The following is a summary of open futures contracts at February 29, 2008:

					UNREALIZED
OPEN	NUMBER OF		EXPIRATION	NOTIONAL	APPRECIATION
CONTRACTS	CONTRACTS	POSITION	DATE	VALUE	(DEPRECIATION)
Russell 2000 Mini Index
Futures	1	Long	Mar 2008	$68,680	($6,913)
S&P Mid 400 E-mini
Index Futures	1	Long	Mar 2008	78,940	338
					($6,575)

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 that is distributed to shareholders. Therefore, no federal income tax provision is required. Net capital losses of $1,325,968 that are attributable to security transactions incurred after October 31, 2007, are treated as arising on March 1, 2008, the first day of the Fund’s next taxable year.

The Fund has adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement 109 (FIN 48), at the beginning of the Fund’s fiscal year. FIN 48 prescribes a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not have a material impact on the Fund’s financial statements. Each of the Fund’s federal tax returns for the prior fiscal years remains subject to examination by the Internal Revenue Service.

Distribution of income and gains

The Fund records distributions to shareholders from net investment income and net realized gains, if any, on the ex-dividend date. During the year ended February 28, 2007, the tax character of distributions paid was as follows: ordinary income $164,683 and long term capital gain $59,993. During the year ended February 29, 2008, the tax character of distributions paid was as follows: ordinary income $760,204 and long-term capital gain $337,917. Distributions paid by the Fund with respect to each class of shares are calculated in the same manner, at the same time and are in the same amount, except for the effect of expenses that may be applied differently to each class.

As of February 29, 2008, the components of distributable earnings on a tax basis included $7,711 of undistributed ordinary income.

Such distributions and distributable earnings, on a tax basis, are determined in conformity with income tax regulations, which may differ from accounting principles generally accepted in the United States of America. Distributions in excess of tax basis earnings and profits, if any, are reported in the Fund’s financial statements as a return of capital.

Capital accounts within financial statements are adjusted for permanent book/tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book/tax differences will reverse in a subsequent period. Permanent book/tax differences are primarily attributable to derivative transactions.

3. Investment advisory and
other agreements

The Trust has entered into an Investment Advisory Agreement with the Adviser. The Adviser is responsible for managing the corporate and business affairs of the Trust and

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for selecting and compensating subadvisers to handle the investment of the assets of the Fund, subject to the supervision of the Trust’s Board of Trustees. As compensation for its services, the Adviser receives an advisory fee from the Trust. Under the Advisory Agreement, the Fund pays a monthly management fee to the Adviser equivalent, on an annual basis, to the sum of: (a) 0.80% of the first $500,000,000 of the Fund’s aggregate daily net assets; (b) 0.78% of the next $500,000,000 of the Fund’s aggregate daily net assets; (c) 0.77% of the next $1,500,000,000 of the Fund’s aggregate daily net assets; and (d) 0.76% of the Fund’s aggregate daily net assets in excess of $2,500,000,000. Aggregate net assets include the net assets of the Fund and Value Opportunities Trust, a series of John Hancock Trust and Value Opportunities Fund, a series of John Hancock Funds II. The Adviser has a subadvisory agreement with Grantham, Mayo, Van Otterloo & Co. L LC. The Fund is not responsible for payment of the subadvisory fees.

The investment management fees incurred for the year ended February 29, 2008, were equivalent to an annual effective rate of 0.80% of the Fund’s average daily net assets.

Expense reimbursements

The Adviser has contractually agreed to reimburse or limit certain Fund level expenses to 0.09% of the Fund’s average annual net assets which are allocated pro rata to all share classes. This agreement excludes taxes, portfolio brokerage commissions, interest, advisory fees, Rule 12b-1 fees, transfer agency fees, blue sky fees, printing and postage and litigation and indemnification expenses and other extraordinary expenses not incurred in the ordinary course of the Fund’s business. In addition, fees incurred under any agreement or plans of the Fund dealing with services for the shareholders and others with beneficial interest in shares of the Fund, are excluded.

In addition, the Adviser has agreed to reimburse or limit certain expenses for each share class. This agreement excludes taxes, portfolio brokerage commissions, interest and litigation and indemnification expenses and other extraordinary expenses not incurred in the ordinary course of the Fund’s business. In addition, fees incurred under any agreement or plans of the Fund dealing with services for the shareholders and others with beneficial interest in shares of the Fund, are excluded. The reimbursements and limits are such that these expenses will not exceed 1.39% for Class A shares, 2.09% for Class B, 2.09% for Class C, 0.99% for Class I, 1.49% for Class R1 and 0.94% for Class 1. Accordingly, the expense reductions or reimbursements related to this agreement were $126,318, $17,010, $25,489, $19,345, $16,517 and $2,798 for Class A, Class B, Class C, Class I, Class R1 and Class 1, respectively for the year ended February 29, 2008. The expense reimbursements and limits will continue in effect until June 30, 2008 and thereafter until terminated by the Adviser on notice to the Trust.

Fund administration fees

Pursuant to the Advisory Agreement, the Fund reimburses the Adviser for all expenses associated with providing the administrative, financial, legal, accounting and recordkeeping services of the Fund, including the preparation of all tax returns, annual, semiannual and periodic reports to shareholders and the preparation of all regulatory reports. These expenses are allocated based on the relative share of net assets of each class at the time the expense was incurred.

The fund administration fees incurred for the year ended February 29, 2008, were $10,054 with an annual effective rate of 0.05% of the Fund’s average daily net assets.

Distribution and shareholder servicing fees

The Trust has a Distribution Agreement with the Distributor. The Fund has adopted Distribution Plans with respect to Class A, Class B, Class C, Class R1 and Class 1, pursuant to Rule 12b-1 under the 1940 Act, to pay the Distributor for the services it provides as distributor of shares of the Fund. Accordingly, the Fund makes monthly payments to the Distributor at an annual rate not to exceed 0.30%, 1.00%, 1.00%, 0.50% and 0.05% of average daily net asset value of Class A, Class B, Class C, Class R1 and Class 1, respectively. A maximum of 0.25% of such payments may be service fees, as defined by the Conduct Rules of Financial Industry

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Regulatory Authority (formerly the National Association of Securities Dealers). Under the Conduct Rules, curtailment of a portion of the Fund’s 12b-1 payments could occur under certain circumstances.

In addition, the Fund has also adopted a Service Plan for Class R1 shares. Under the Service Plan, the Fund may pay up to 0.25% of Class R1 average daily net asset value for certain other services. There were no Service Plan fees incurred for the year ended February 29, 2008.

Sales charges

Class A shares are assessed up-front sales charges of up to 5.00% of net asset value of such shares. During the year ended February 29, 2008, the Fund was informed that the Distributor received net up-front sales charges of $16,704 with regard to sales of Class A shares. Of this amount, $2,707 was retained and used for printing prospectuses, advertising, sales literature and other purposes; $13,952 was paid as sales commissions to unrelated broker-dealers; and $45 was paid as sales commissions to sales personnel of Signator Investors, Inc. (Signator Investors), a related broker-dealer, an indirect subsidiary of MFC.

Class B shares that are redeemed within six years of purchase are subject to a contingent deferred sales charge (CDSC) at declining rates, beginning at 5.00% of the lesser of the current market value at the time of redemption or the original purchase cost of the shares being redeemed. Class C shares that are redeemed within one year of purchase are subject to a CDSC at a rate of 1.00% of the lesser of the current market value at the time of redemption or the original purchase cost of the shares being redeemed. Proceeds from the CDSCs are paid to the Distributor and are used, in whole or in part, to defray its expenses for providing distribution-related services to the Fund in connection with the sale of Class B and Class C shares. During the year ended February 29, 2008, CDSCs received by Distributor amounted to $1,318 for Class B shares and $1,163 for Class C shares.

Transfer agent fees

The Fund has a Transfer Agency Agreement with John Hancock Signature Services, Inc. (Signature Services), an indirect subsidiary of MFC. For Class A, Class B, Class C, Class I and Class R1 shares, the Fund pays a monthly transfer agent fee at an annual rate of 0.05% of each class’ average daily net assets, plus a fee based on the number of shareholder accounts and reimbursement for certain out-of-pocket expenses. Expenses not directly attributable to a particular class of shares are aggregated and allocated to each class on the basis of its relative net asset value. The Fund pays a monthly fee which is based on an annual rate of $15.00 for each Class A shareholder account, $17.50 for each Class B shareholder account, $16.50 for each Class C shareholder account and $15.00 for each Class R1 shareholder account.

Signature Services has agreed to limit the transfer agent fees so that such fees do not exceed 0.20% annually of Class A, Class B, Class C, Class I and Class R1 share average daily net assets. This agreement is effective until December 31, 2008. Signature Services reserves the right to terminate this limitation in the future. There were no transfer agent fee reductions for Class A, Class B, Class C, Class I and Class R1 shares, respectively, during the year ended February 29, 2008.

In addition, Signature Services has voluntarily agreed to further limit transfer agent fees for Class R1 shares so that such fees do not exceed 0.05% annually of each class’s average daily net assets. For the year ended February 29, 2008, the transfer agent fees reductions for Class R1 were $187.

In May 2007, the Fund began receiving earnings credits from its transfer agent as a result of uninvested cash balances. These credits are used to reduce a portion of the Fund’s transfer agent fees and out-of-pocket expenses. During the year ended February 29, 2008, the Fund’s transfer agent fees and out-of-pocket expenses were reduced by $227 for transfer agent credits earned.

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Class level expenses for the year ended February 29, 2008, were as follows:

	Distribution and	Transfer	Blue sky	Printing and
Share class	service fees	agent fees	fees	postage fees
Class A	$58,094	$15,871	$16,909	$5,645
Class B	3,599	745	14,620	6
Class C	14,246	2,928	15,177	921
Class I	—	133	17,659	160
Class R1	608	250	15,776	3
Class 1	207	—	—	33
Total	$76,754	$19,927	$80,141	$6,768

4. Trustees’ fees

The Trust compensates each Trustee who is not an employee of the Adviser or its affiliates. Total Trustees’ expenses are allocated to the Fund based on its average daily net asset value.

5. Line of credit

The Fund has entered into an agreement which enables them to participate in a $100 million unsecured committed line of credit with State Street Corporation. Borrowings will be made solely to temporarily finance the repurchase of capital shares. Interest is charged to the Fund based on its borrowings at a rate per annum equal to the Federal Funds rate plus 0.50% . In addition, a commitment fee of 0.05% per annum, payable at the end of each calendar quarter, based on the average daily-unused portion of the line of credit, is charged to the Fund on a prorated basis based on average net assets. Effective October 15, 2007, the commitment fee was changed from 0.07% to 0.05% . For the year ended February 29, 2008, there were no borrowings under the line of credit.

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6. Fund share transactions

Share activities for the Fund for the years ended February 28, 2007, and February 29, 2008, were as follows:

		Year ended 2-28-07 1	Year ended 2-29-08
	Shares	Amount	Shares	Amount
Class A shares
Sold	941,272	$19,088,419	83,981	$1,839,886
Distributions reinvested	9,278	203,273	53,292	958,716
Repurchased	(60,859)	(1,306,606)	(80,983)	(1,597,867)
Net increase (decrease)	889,691	$17,985,086	56,290	$1,200,735
Class B shares
Sold	21,277	$445,406	7,022	$153,171
Distributions reinvested	78	1,721	795	14,285
Repurchased	(7,339)	(162,632)	(4,077)	(80,691)
Net increase (decrease)	14,016	$284,495	3,740	$86,765
Class C shares
Sold	69,790	$1,449,685	21,502	$466,603
Distributions reinvested	414	9,061	3,408	61,199
Repurchased	(7,105)	(155,548)	(27,872)	(538,229)
Net increase (decrease)	63,099	$1,303,198	(2,962)	($10,427)
Class I shares
Sold	11,800	$245,442	5,764	$129,736
Distributions reinvested	117	2,570	288	5,191
Repurchased	—	—	(12,096)	(243,103)
Net increase (decrease)	11,917	$248,012	(6,044)	($108,176)
Class R1 shares
Sold	5,000	$100,000	1,049	$24,953
Distributions reinvested	54	1,179	357	6,401
Net increase (decrease)	5,054	$101,179	1,406	$31,354
Class 1 shares
Sold	8,549	$179,825	37,501	$765,929
Distributions reinvested	90	1,963	1,640	29,511
Repurchased	(1)	(12)	(13,639)	(256,872)
Net increase (decrease)	8,638	$181,776	25,502	$538,568
Net increase (decrease)	992,415	$20,103,746	77,932	$1,738,819

¹Period from 6-12-06 (commencement of operations) to 2-28-07 for Class A, Class B, Class C, Class I and Class R1.

7. Purchases and sales of securities

Purchases and proceeds from sales or maturities of securities, other than short-term securities and obligations of the U.S. government, during the year ended February 29, 2008, aggregated $15,397,292 and $14,239,084, respectively.

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Auditors’ report

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of John Hancock Funds III and Shareholders of John Hancock Value Opportunities Fund,

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of John Hancock Value Opportunities Fund (the Fund) at February 29, 2008, and the results of its operations, the changes in its net assets and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of investments at February 29, 2008 by correspondence with the custodian, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
Boston, Massachusetts
April 18, 2008

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43

Tax information

Unaudited

For federal income tax purposes, the following information is furnished with respect to the distributions of the Fund, if any, paid during its taxable year ended February 29, 2008.

The Fund has designated distributions to shareholders of $337,917 as a long-term capital gain dividend. With respect to the ordinary dividends paid by the Fund for the fiscal year ended February 29, 2008, 100.00% of the dividends qualifies for the corporate dividends-received deduction.

The Fund hereby designates the maximum amount allowable of its net taxable income as qualified dividend income as provided in the Jobs and Growth Tax Relief Reconciliation Act of 2003. This amount will be reflected on Form 1099-DIV for the calendar year 2008.

Shareholders will be mailed a 2008 U.S. Treasury Department Form 1099-DIV in January 2009. This will reflect the total of all distributions that are taxable for calendar year 2008.

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Trustees and Officers

This chart provides information about the Trustees and Officers who oversee your John Hancock fund. Officers elected by the Trustees manage the day-to-day operations of the Fund and execute policies formulated by the Trustees.

Independent Trustees

Name, Year of Birth		Number of
Position(s) held with Fund	Trustee	John Hancock
Principal occupation(s) and other	of Fund	funds overseen
directorships during past 5 years	since1	by Trustee
James F. Carlin, Born: 1940	2006	55
Chairman (since December 2007); Director and Treasurer, Alpha Analytical Laboratories, Inc. (chemical
analysis) (since 1985); Part Owner and Treasurer, Lawrence Carlin Insurance Agency, Inc. (since 1995);
Part Owner and Vice President, Mone Lawrence Carlin Insurance Agency, Inc. (until 2005); Chairman
and Chief Executive Officer, Carlin Consolidated, Inc. (management/investments) (since 1987); Trustee,
Massachusetts Health and Education Tax Exempt Trust (1993–2003) .
William H. Cunningham, Born: 1944	2006	55
Professor, University of Texas at Austin (since 1971); former Chancellor, University of Texas System and
former President, University of Texas at Austin (until 2001); Chairman and Chief Executive Officer, IBT
Technologies (until 2001); Director of the following: Hicks Acquisition Company I, Inc. (since 2007);
Hire.com (until 2004), STC Broadcasting, Inc. and Sunrise Television Corp. (until 2001), Symtx, Inc.
(electronic manufacturing) (since 2001), Adorno/Rogers Technology, Inc. (until 2004), Pinnacle
Foods Corporation (until 2003), rateGenius (until 2003), Lincoln National Corporation (insurance)
(since 2006), Jefferson-Pilot Corporation (diversified life insurance company) (until 2006), New
Century Equity Holdings (formerly Billing Concepts) (until 2001), eCertain (until 2001), ClassMap.com
(until 2001), Agile Ventures (until 2001), AskRed.com (until 2001), Southwest Airlines (since 2000),
Introgen (manufacturer of biopharmaceuticals) (since 2000) and Viasystems Group, Inc. (electronic
manufacturer) (until 2003); Advisory Director, Interactive Bridge, Inc. (college fundraising) (until 2001);
Advisory Director, Q Investments (until 2003); Advisory Director, JPMorgan Chase Bank (formerly Texas
Commerce Bank–Austin), LIN Television (until 2008), WilTel Communications (until 2003) and Hayes
Lemmerz International, Inc. (diversified automotive parts supply company) (since 2003) .
Charles L. Ladner, 2 Born: 1938	2006	55
Chairman and Trustee, Dunwoody Village, Inc. (retirement services) (until 2003); Senior Vice President
and Chief Financial Officer, UGI Corporation (public utility holding company) (retired 1998); Vice
President and Director, AmeriGas, Inc. (retired 1998); Director, AmeriGas Partners, L. P. (gas distribution)
(until 1997); Director, EnergyNorth, Inc. (until 1997); Director, Parks and History Association (until 2005) .
John A. Moore, 2 Born: 1939	2006	55
President and Chief Executive Officer, Institute for Evaluating Health Risks (nonprofit institution)
(until 2001); Senior Scientist, Sciences International (health research) (until 2003); Former Assistant
Administrator and Deputy Administrator, Environmental Protection Agency; Principal, Hollyhouse
(consulting) (since 2000); Director, CIIT Center for Health Science Research (nonprofit research)
(until 2007) .

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45

Independent Trustees (continued)

Name, Year of Birth		Number of
Position(s) held with Fund	Trustee	John Hancock
Principal occupation(s) and other	of Fund	funds overseen
directorships during past 5 years	since1	by Trustee
Patti McGill Peterson,2 Born: 1943	2006	55
Senior Associate, Institute for Higher Education Policy (since 2007); Executive Director, Council for
International Exchange of Scholars and Vice President, Institute of International Education (until 2007);
Senior Fellow, Cornell Institute of Public Affairs, Cornell University, Ithaca, NY (until 1998); Former
President, Wells College, Aurora, NY, and St. Lawrence University, Canton, NY; Director, Niagara
Mohawk Power Corporation (until 2003); Director, Ford Foundation, International Fellowships Program
(since 2002); Director, Lois Roth Endowment (since 2002); Director, Council for International Educational
Exchange (since 2003) .
Steven R. Pruchansky, Born: 1944	2006	55
Chairman and Chief Executive Officer, Greenscapes of Southwest Florida, Inc. (since 2000); Director and
President, Greenscapes of Southwest Florida, Inc. (until 2000); Managing Director, JonJames, LLC (real
estate) (since 2000); Director, First Signature Bank & Trust Company (until 1991); Director, Mast Realty
Trust (until 1994); President, Maxwell Building Corp. (until 1991) .

Non-Independent Trustees ³

Name, Year of Birth		Number of
Position(s) held with Fund	Trustee	John Hancock
Principal occupation(s) and other	of Fund	funds overseen
directorships during past 5 years	since1	by Trustee
James R. Boyle, Born: 1959	2006	265
Executive Vice President, Manulife Financial Corporation (since 1999); President, John Hancock Variable
Life Insurance Company (since March 2007); Executive Vice President, John Hancock Life Insurance
Company (since 2004); Chairman and Director, John Hancock Advisers, LLC (the Adviser), John Hancock
Funds, LLC and The Berkeley Financial Group, LLC (The Berkeley Group) (holding company) (since 2005);
Senior Vice President, The Manufacturers Life Insurance Company (U.S. A. ) (until 2004) .

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Principal officers who are not Trustees

Name, Year of Birth
Position(s) held with Fund	Officer
Principal occupation(s) and other	of Fund
directorships during past 5 years	since
Keith F. Hartstein, Born: 1956	2006
President and Chief Executive Officer
Senior Vice President, Manulife Financial Corporation (since 2004); Director, President and Chief
Executive Officer, the Adviser, The Berkeley Group and John Hancock Funds, LLC (since 2005); Director,
MFC Global Investment Management (U.S. ), LLC (MFC Global (U.S. )) (since 2005); Director, John
Hancock Signature Services, Inc. (since 2005); President and Chief Executive Officer, John Hancock
Investment Management Services, LLC (since 2006); President and Chief Executive Officer, John Hancock
Funds, John Hancock Funds II, John Hancock Funds III and John Hancock Trust (since 2005); Director,
Chairman and President, NM Capital Management, Inc. (since 2005); Member, Investment Company
Institute Sales Force Marketing Committee (since 2003); President and Chief Executive Officer, MFC
Global (U.S. ) (2005–2006); Executive Vice President, John Hancock Funds, LLC (until 2005) .
Thomas M. Kinzler, Born: 1955	2006
Secretary and Chief Legal Officer
Vice President and Counsel, John Hancock Life Insurance Company (U.S. A. ) (since 2006); Secretary and
Chief Legal Officer, John Hancock Funds and John Hancock Funds II (since 2006); Chief Legal Officer
and Assistant Secretary, John Hancock Trust (since 2006); Vice President and Associate General Counsel,
Massachusetts Mutual Life Insurance Company (1999–2006); Secretary and Chief Legal Counsel, MML
Series Investment Fund (2000–2006); Secretary and Chief Legal Counsel, MassMutual Institutional Funds
(2000–2004); Secretary and Chief Legal Counsel, MassMutual Select Funds and MassMutual Premier
Funds (2004–2006) .
Francis V. Knox, Jr. , Born: 1947	2006
Chief Compliance Officer
Vice President and Chief Compliance Officer, John Hancock Investment Management Services, LLC,
the Adviser and MFC Global (U.S. ) (since 2005); Vice President and Chief Compliance Officer, John
Hancock Funds, John Hancock Funds II, John Hancock Funds III and John Hancock Trust (since 2005);
Vice President and Assistant Treasurer, Fidelity Group of Funds (until 2004); Vice President and Ethics &
Compliance Officer, Fidelity Investments (until 2001) .
Charles A. Rizzo, Born: 1957	2007
Chief Financial Officer
Chief Financial Officer, John Hancock Funds, John Hancock Funds II, John Hancock Funds III and John
Hancock Trust (since June 2007); Assistant Treasurer, Goldman Sachs Mutual Fund Complex (regis-
tered investment companies) (2005–June 2007); Vice President, Goldman Sachs (2005–June 2007);
Managing Director and Treasurer of Scudder Funds, Deutsche Asset Management (2003–2005);
Director, Tax and Financial Reporting, Deutsche Asset Management (2002–2003); Vice President and
Treasurer, Deutsche Global Fund Services (Deutsche Registered Investment Companies) (1999–2002) .
Gordon M. Shone, Born: 1956	2006
Treasurer
Senior Vice President, John Hancock Life Insurance Company (U.S. A. ) (since 2001); Treasurer, John
Hancock Funds (since 2006), John Hancock Funds II, John Hancock Funds III and John Hancock Trust
(since 2005); Vice President and Chief Financial Officer, John Hancock Trust (2003–2005); Vice President,
John Hancock Investment Management Services, Inc., John Hancock Advisers, LLC (since 2006) and The
Manufacturers Life Insurance Company (U.S. A. ) (1998–2000) .

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47

Principal officers who are not Trustees (continued)

Name, Year of Birth
Position(s) held with Fund	Officer
Principal occupation(s) and other	of Fund
directorships during past 5 years	since
John G. Vrysen, Born: 1955	2006
Chief Operating Officer
Senior Vice President, Manulife Financial Corporation (since 2006); Director, Executive Vice President
and Chief Operating Officer, the Adviser, The Berkeley Group and John Hancock Funds, LLC (since
June 2007); Executive Vice President and Chief Operating Officer, John Hancock Investment
Management Services, LLC (since December 2007); Chief Operating Officer, John Hancock Funds,
John Hancock Funds II, John Hancock Funds III and John Hancock Trust (since June 2007); Director,
Executive Vice President and Chief Financial Officer, the Adviser, The Berkeley Group and John Hancock
Funds, LLC (2005–2007); Executive Vice President and Chief Financial Officer, John Hancock Investment
Management Services, LLC (2005–2007); Executive Vice President and Chief Financial Officer, MFC
Global (U.S. ) (2005 until August 2007); Director, John Hancock Signature Services, Inc. (since 2005);
Chief Financial Officer, John Hancock Funds, John Hancock Funds II, John Hancock Funds III and John
Hancock Trust (2005 until June 2007); Vice President and General Manager, John Hancock Fixed
Annuities, U.S. Wealth Management (2004–2005); Vice President, Operations, Manulife Wood Logan
(2000–2004) .

The business address for all Trustees and Officers is 601 Congress Street, Boston, Massachusetts 02210-2805.

The Statement of Additional Information of the Fund includes additional information about members of the Board of Trustees of the Fund and is available without charge, upon request, by calling 1-800-225-5291.

¹ Each Trustee serves until resignation, retirement age or until his or her successor is elected.

² Member of Audit and Compliance Committee.

³ Non-Independent Trustee holds positions with the Fund’s investment adviser, underwriter and certain other affiliates

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For more information

The Fund’s proxy voting policies, procedures and records are available without charge, upon request:

By phone	On the Fund’s Web site	On the SEC’s Web site
1-800-225-5291	www. jhfunds. com/proxy	www. sec. gov
Investment adviser	Custodian	Legal counsel
John Hancock Investment	State Street Bank & Trust Co.	Kirkpatrick & Lockhart
Management Services, LLC	2 Avenue de Lafayette	Preston Gates Ellis LLP
601 Congress Street	Boston, MA 02111	One Lincoln Street
Boston, MA 02210-2805		Boston, MA 02111-2950
	Transfer agent
Subadviser	John Hancock Signature	Independent registered
Grantham, Mayo, Van	Services, Inc.	public accounting firm
Otterloo & Co. LLC	P. O. Box 9510	PricewaterhouseCoopers LLP
40 Rowes Wharf	Portsmouth, NH 03802-9510	125 High Street
Boston, MA 02110		Boston, MA 02110
Principal distributor
John Hancock Funds, LLC
601 Congress Street
Boston, MA 02210-2805

How to contact us
Internet	www. jhfunds.com
Mail	Regular mail:	Express mail:
	John Hancock Signature	John Hancock Signature
	Services, Inc.	Services, Inc.
	P. O. Box 9510	Mutual Fund Image Operations
	Portsmouth, NH 03802-9510	164 Corporate Drive
		Portsmouth, NH 03801
Phone	Customer service representatives	1-800-225-5291
	EASI-Line	1-800-338-8080
	TDD line	1-800-554-6713

A listing of month-end portfolio holdings is available on our Web site, www.jhfunds.com. A more detailed portfolio holdings summary is available on a quarterly basis 60 days after the fiscal quarter on our Web site or upon request by calling 1-800-225-5291, or on the SEC’s Web site, www.sec.gov.

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49

1-800-225-5291
1-800-554-6713 (TDD)
1-800-338-8080 EASI-Line
www. jhfunds.com

Now available: electronic delivery
www. jhfunds.com/edelivery

This report is for the information of the shareholders of John Hancock Value Opportunities Fund.	6300A	2/08
It is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus.		4/08

Discussion of Fund performance

By Grantham, Mayo, Van Otterloo & Co. LLC (GMO)

U.S. stocks went on a wild ride during the 12-month period, highlighted both by record highs for broad market indexes and conditions deemed poor enough to warrant numerous interventions by the Federal Reserve. For the period in full, the Standard & Poor’s 500 Index returned –3.60%, a modest move which belied its frequent violent gyrations. Growth stocks outpaced value stocks during the period. Financials and consumer discretionary were the worst-performing sectors in the S&P 500, while energy stocks performed the best.

“U.S. stocks went on a wild ride
during the 12-month review
period…”

For the 12 months ended February 29, 2008, John Hancock U.S. Core Fund’s Class A, Class B, Class C, Class I and Class R1 shares returned –8.16%, –8.84%, –8.84%, –7.82% and –8.32%, respectively, at net asset value, while the S&P 500 returned –3.60% . Sector selection added to relative returns, while stock selection detracted. Sector weightings adding to relative returns included an underweight in financials, while sector weightings detracting from relative returns included an overweight in consumer discretionary. Stock selections in telecommunication services added to relative returns, while picks in consumer discretionary and financials detracted. Individual names adding to returns versus the benchmark included overweight positions in Exxon Mobil Corp., Merck & Company, Inc. and Wal-Mart Stores, Inc., while overweight positions detracting from relative returns included Home Depot, Inc., Citigroup, Inc. and Lowe’s Companies, Inc.

This commentary reflects the views of the portfolio management team through the end of the Fund’s period discussed in this report. The team’s statements reflect their own opinions. As such, they are in no way guarantees of future events and are not intended to be used as investment advice or a recommendation regarding any specific security. They are also subject to change at any time as market and other conditions warrant.

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A look at performance

For the periods ended February 29, 2008

		Average annual returns				Cumulative total returns
		with maximum sales charge (POP)				with maximum sales charge (POP)
	Inception				Since				Since
Class	date	1-year	5-year	10-year	inception	1-year	5-year	10-year	inception
A	6-12-06	–12.75%	—	—	–1.00%	–12.75%	—	—	–1.71%
B	6-12-06	–13.21	—	—	–1.00	–13.21	—	—	–1.72
C	6-12-06	–9.71	—	—	1.28	–9.71	—	—	2.21
I1	6-12-06	–7.82	—	—	2.37	–7.82	—	—	4.12
R11	6-12-06	–8.32	—	—	1.75	–8.32	—	—	3.04

Performance figures assume all distributions are reinvested. Public offering price (POP) figures reflect maximum sales charge on Class A shares of 5%, and the applicable contingent deferred sales charge (CDSC) on Class B and Class C shares. The Class B shares’ CDSC declines annually between years 1 to 6 according to the following schedule:5, 4, 3, 3, 2, 1%. No sales charge will be assessed after the sixth year. Class C shares held for less than one year are subject to a 1% CDSC. Sales charge is not applicable for Class I and Class R1 shares.

The expense ratios of the Fund, both net (including any fee waivers or expense limitations) and gross (excluding any fee waivers or expense limitations), are set forth according to the most recent publicly available prospectuses for the Fund and may differ from the expense ratios disclosed in the Financial Highlights tables in this report. The waivers and expense limitations are contractual at least until 6-30-08. The net expenses are as follows:Class A — 1.34%, Class B — 2.04%, Class C — 2.04%, Class I — 0.95%, Class R1 — 1.69% . Had the fee waivers and expense limitations not been in place, the gross expenses would be as follows:Class A — 1.93%, Class B — 13.58%, Class C — 3.82%, Class I — 17.83%, Class R1 — 21.12% .

The returns reflect past results and should not be considered indicative of future performance. The return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, the Fund’s current performance may be higher or lower than the performance shown. For performance data current to the most recent month end, please call 1-800-225-5291 or visit the Fund’s Web site at www.jhfunds.com.

The performance table above and the chart on the next page do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

The Fund’s performance results reflect any applicable expense reductions, without which the expenses would increase and results would have been less favorable.

Performance is calculated with an opening price (prior day’s close) on the inception date.

¹ For certain types of investors as described in the Fund’s Class I and Class R1 share prospectuses.

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A look at performance

Growth of $10,000

This chart shows what happened to a hypothetical $10,000 investment in U.S. Core Fund Class A shares for the period indicated. For comparison, we’ve shown the same investment in the Standard & Poor’s 500 Index.

			With maximum
Class	Period beginning	Without sales charge	sales charge	Index
B	6-12-06	$10,216	$9,828	$10,982
C2	6-12-06	10,221	10,221	10,982
I3	6-12-06	10,412	10,412	10,982
R13	6-12-06	10,304	10,304	10,982

Assuming all distributions were reinvested for the period indicated, the table above shows the value of a $10,000 investment in the Fund’s Class B, Class C, Class I and Class R1 shares, respectively, as of February 29, 2008. Performance of the classes will vary based on the difference in sales charges paid by shareholders investing in the different classes and the fee structure of those classes.

Standard & Poor’s 500 Indexis an unmanaged index that includes 500 widely traded common stocks.

It is not possible to invest directly in an index. Index figures do not reflect sales charges, which would have resulted in lower values if they did.

¹ NAV represents net asset value and POP represents public offering price.

² No contingent deferred sales charge applicable.

³ For certain types of investors as described in the Fund’s Class I and Class R1 share prospectuses.

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Your expenses

These examples are intended to help you understand your ongoing operating expenses.

Understanding fund expenses

As a shareholder of the Fund, you incur two types of costs:

■Transaction costs which include sales charges (loads) on purchases or redemptions (varies by share class), minimum account fee charge, etc.

■Ongoing operating expenses including management fees, distribution and service fees (if applicable), and other fund expenses.

We are going to present only your ongoing operating expenses here.

Actual expenses/actual returns

This example is intended to provide information about your fund’s actual ongoing operating expenses, and is based on your fund’s actual return. It assumes an account value of $1,000.00 on September 1, 2007, with the same investment held until February 29, 2008.

	Account value	Ending value	Expenses paid during
	on 9-1-07	on 2-29-08	period on 2-29-081
Class A	$1,000.00	$896.23	$6.22
Class B	1,000.00	892.68	9.65
Class C	1,000.00	893.15	9.65
Class I	1,000.00	897.98	4.48
Class R1	1,000.00	896.62	5.56

Together with the value of your account, you may use this information to estimate the operating expenses that you paid over the period. Simply divide your account value at February 29, 2008, by $1,000.00, then multiply it by the “expenses paid” for your share class from the table above. For example, for an account value of $8,600.00, the operating expenses should be calculated as follows:

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9

Your expenses

Hypothetical example for comparison purposes

This table allows you to compare your fund’s ongoing operating expenses with those of any other fund. It provides an example of the Fund’s hypothetical account values and hypothetical expenses based on each class’s actual expense ratio and an assumed 5% annualized return before expenses (which is not your fund’s actual return). It assumes an account value of $1,000.00 on September 1, 2007, with the same investment held until February 29, 2008. Look in any other fund shareholder report to find its hypothetical example and you will be able to compare these expenses.

	Account value	Ending value	Expenses paid during
	on 9-1-07	on 2-29-08	period on 2-29-081
Class A	$1,000.00	$1,018.30	$6.62
Class B	1,000.00	1,014.67	10.27
Class C	1,000.00	1,014.67	10.27
Class I	1,000.00	1,020.14	4.77
Class R1	1,000.00	1,019.00	5.92

Remember, these examples do not include any transaction costs, such as sales charges; therefore, these examples will not help you to determine the relative total costs of owning different funds. If transaction costs were included, your expenses would have been higher. See the prospectus for details regarding transaction costs.

¹ Expenses are equal to the Fund’s annualized expense ratio of 1.32%, 2.05%, 2.05%, 0.95% and 1.18% for Class A, Class B, Class C, Class I and Class R1, respectively, multiplied by the average account value over the period, multiplied by the number of days in most recent fiscal half year/ 366 (to reflect the one-half year period).

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10

Portfolio summary

Top 10 holdings1
Exxon Mobil Corp.	5.8%	Johnson & Johnson	3.1%
Wal-Mart Stores, Inc.	3.9%	UnitedHealth Group, Inc.	3.0%
Pfizer, Inc.	3.8%	Microsoft Corp.	2.7%
Chevron Corp.	3.7%	Merck & Company, Inc.	2.6%
The Coca-Cola Company	3.3%	QUALCOMM, Inc.	2.0%
Sector distribution1
Consumer non-cyclical	32%	Industrial	7%
Energy	17%	Financial	6%
Consumer, cyclical	12%	Basic materials	3%
Technology	10%	Utilities	1%
Communications	9%	Other	3%

¹ As a percentage of net assets on February 29, 2008.

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11

F I N A N C I A L   S T A T E M E N T S

Fund’s investments

Securities owned by the Fund on 2-29-08

This schedule is divided into three main categories: common stocks, short-term investments and repurchase agreements. Common stocks are further broken down by industry group. Repurchase agreements, which represent the Fund’s cash position, are listed last.

Issuer	Shares	Value
Common stocks 96.62%		$20,636,960
(Cost $21,725,664)
Aerospace 0.77%		164,658
General Dynamics Corp.	200	16,370
Goodrich Corp.	400	23,692
Rockwell Collins, Inc.	200	11,780
United Technologies Corp.	1,600	112,816
Agriculture 1.08%		231,360
Monsanto Company	2,000	231,360
Aluminum 0.17%		37,140
Alcoa, Inc.	1,000	37,140
Apparel & Textiles 0.84%		178,590
Coach, Inc. *	2,100	63,672
Liz Claiborne, Inc.	400	7,112
NIKE, Inc., Class B	700	42,140
Polo Ralph Lauren Corp., Class A	200	12,438
VF Corp.	700	53,228
Auto Parts 0.51%		108,988
Autoliv, Inc.	200	9,980
AutoZone, Inc. *	300	34,524
BorgWarner, Inc.	200	8,622
Johnson Controls, Inc.	1,700	55,862
Auto Services 0.05%		11,656
AutoNation, Inc. *	800	11,656
Automobiles 0.58%		123,998
Ford Motor Company *	5,200	33,956
General Motors Corp.	700	16,296
PACCAR, Inc.	1,700	73,746
Banking 1.27%		270,901
Bank of America Corp.	4,800	190,752
BB&T Corp.	500	15,565
Comerica, Inc.	200	7,248
National City Corp.	2,000	31,720
U.S. Bancorp	800	25,616

See notes to financial statements

U.S. Core Fund | Annual report

12

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
Biotechnology 0.51%		$109,132
Amgen, Inc. *	1,500	68,280
Biogen Idec, Inc. *	700	40,852
Broadcasting 0.19%		40,947
Discovery Holding Company *	800	18,056
Liberty Global, Inc., Class A *	300	11,280
Liberty Media Corp., Capital, Series A *	100	11,611
Building Materials & Construction 0.02%		3,738
Masco Corp.	200	3,738
Business Services 1.07%		228,886
Affiliated Computer Services, Inc., Class A *	700	35,525
Fiserv, Inc. *	1,600	84,192
Fluor Corp.	400	55,700
Jacobs Engineering Group, Inc. *	500	40,145
NCR Corp. *	200	4,432
Total Systems Services, Inc.	400	8,892
Chemicals 0.49%		104,713
Air Products & Chemicals, Inc.	200	18,266
Celanese Corp., Series A	600	23,340
Dow Chemical Company	300	11,307
Lubrizol Corp.	200	11,660
Praxair, Inc.	500	40,140
Computers & Business Equipment 6.70%		1,430,100
Apple, Inc. *	2,400	300,048
Cisco Systems, Inc. *	14,900	363,113
Dell, Inc. *	10,800	214,380
EMC Corp. *	10,100	156,954
Hewlett-Packard Company	900	42,993
International Business Machines Corp.	2,800	318,808
Juniper Networks, Inc. *	800	21,456
Western Digital Corp. *	400	12,348
Construction Materials 0.14%		28,780
Martin Marietta Materials, Inc.	100	10,760
Trane, Inc.	400	18,020
Containers & Glass 0.19%		39,515
Owens-Illinois, Inc. *	700	39,515
Cosmetics & Toiletries 1.83%		391,107
Avon Products, Inc.	400	15,224
Colgate-Palmolive Company	700	53,263
Estee Lauder Companies, Inc., Class A	300	12,774
Kimberly-Clark Corp.	1,200	78,216
Procter & Gamble Company	3,500	231,630

See notes to financial statements

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13

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
Crude Petroleum & Natural Gas 1.75%		$374,779
Apache Corp.	800	91,768
Devon Energy Corp.	500	51,360
Hess Corp.	200	18,636
Marathon Oil Corp.	200	10,632
Occidental Petroleum Corp.	2,300	177,951
Sunoco, Inc.	400	24,432
Drugs & Health Care 0.43%		91,602
Wyeth	2,100	91,602
Educational Services 0.82%		174,306
Apollo Group, Inc., Class A *	2,300	141,174
ITT Educational Services, Inc. *	600	33,132
Electrical Equipment 0.05%		10,192
Emerson Electric Company	200	10,192
Electrical Utilities 0.68%		146,217
American Electric Power Company, Inc.	200	8,184
Constellation Energy Group, Inc.	300	26,505
Edison International	400	19,760
Entergy Corp.	100	10,274
FPL Group, Inc.	200	12,058
Mirant Corp. *	300	11,100
PPL Corp.	200	9,076
Public Service Enterprise Group, Inc.	600	26,460
Reliant Energy, Inc. *	1,000	22,800
Electronics 0.39%		83,670
Arrow Electronics, Inc. *	300	9,783
Avnet, Inc. *	300	10,113
L-3 Communications Holdings, Inc.	600	63,774
Energy 0.32%		68,452
Duke Energy Corp.	1,300	22,802
McDermott International, Inc. *	400	20,888
NRG Energy, Inc. *	600	24,762
Financial Services 1.81%		386,349
Charles Schwab Corp.	500	9,805
Citigroup, Inc.	12,300	291,633
Eaton Vance Corp.	300	9,555
Franklin Resources, Inc.	200	18,874
Leucadia National Corp.	300	13,578
Morgan Stanley	500	21,060
SEI Investments Company	400	10,004
Washington Mutual, Inc.	800	11,840
Food & Beverages 5.62%		1,201,315
Coca-Cola Enterprises, Inc.	500	12,215
Kraft Foods, Inc., Class A	1,522	47,441

See notes to financial statements

U.S. Core Fund | Annual report

14

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
Food & Beverages (continued)
PepsiCo, Inc.	5,800	$403,448
The Coca-Cola Company	12,000	701,520
Tyson Foods, Inc., Class A	1,300	18,733
William Wrigley Jr. Company	300	17,958
Forest Products 0.06%		12,240
Weyerhaeuser Company	200	12,240
Gas & Pipeline Utilities 0.64%		137,559
Transocean, Inc. *	979	137,559
Healthcare Products 6.16%		1,316,179
Baxter International, Inc.	100	5,902
Intuitive Surgical, Inc. *	200	56,384
Johnson & Johnson	10,800	669,168
Medtronic, Inc.	2,400	118,464
Patterson Companies, Inc. *	900	31,680
St. Jude Medical, Inc. *	600	25,788
Stryker Corp.	2,000	130,220
Zimmer Holdings, Inc. *	3,700	278,573
Healthcare Services 6.25%		1,334,838
Cardinal Health, Inc.	900	53,226
Cerner Corp. *	200	8,690
Coventry Health Care, Inc. *	1,400	72,618
Express Scripts, Inc. *	3,300	195,030
McKesson Corp.	1,500	88,140
Medco Health Solutions, Inc. *	2,100	93,051
Quest Diagnostics, Inc.	500	23,835
UnitedHealth Group, Inc.	13,900	646,072
WellPoint, Inc. *	2,200	154,176
Holdings Companies/Conglomerates 0.15%		32,502
Textron, Inc.	600	32,502
Homebuilders 0.03%		6,363
Toll Brothers, Inc. *	300	6,363
Hotels & Restaurants 0.49%		105,333
McDonald’s Corp.	1,600	86,576
Starbucks Corp. *	100	1,797
Wynn Resorts, Ltd. *	100	10,070
Yum! Brands, Inc.	200	6,890
Household Products 0.26%		55,698
Energizer Holdings, Inc. *	600	55,698
Industrial Machinery 1.50%		320,244
Cameron International Corp. *	700	29,736
Caterpillar, Inc.	1,000	72,330
Deere & Company	1,400	119,294
FMC Technologies, Inc. *	200	11,332

See notes to financial statements

Annual report | U.S. Core Fund

15

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
Industrial Machinery (continued)
Ingersoll-Rand Company, Ltd., Class A	500	$20,930
ITT Corp.	400	22,496
Pall Corp.	300	11,811
Parker-Hannifin Corp.	500	32,315
Industrials 0.06%		12,198
Fastenal Company	300	12,198
Insurance 3.22%		686,790
ACE, Ltd.	400	22,496
Aetna, Inc.	800	39,680
AFLAC, Inc.	900	56,169
Allstate Corp.	2,400	114,552
American International Group, Inc.	3,300	154,638
Aon Corp.	600	24,966
Brown & Brown, Inc.	400	7,132
Chubb Corp.	600	30,540
CIGNA Corp.	800	35,664
CNA Financial Corp.	300	7,995
First American Corp.	200	6,966
Hartford Financial Services Group, Inc.	200	13,980
Old Republic International Corp.	300	4,116
Progressive Corp.	1,200	21,996
Prudential Financial, Inc.	300	21,891
SAFECO Corp.	100	4,626
The Travelers Companies, Inc.	1,300	60,333
Torchmark Corp.	300	18,078
Transatlantic Holdings, Inc.	200	13,480
UnumProvident Corp.	1,200	27,492
International Oil 11.53%		2,463,122
Anadarko Petroleum Corp.	700	44,618
Chevron Corp.	9,200	797,272
ConocoPhillips	3,600	297,756
Exxon Mobil Corp.	14,200	1,235,542
Murphy Oil Corp.	200	16,076
Noble Corp.	200	9,830
Weatherford International, Ltd. *	900	62,028
Internet Content 1.10%		235,590
Google, Inc., Class A *	500	235,590
Internet Retail 1.46%		312,120
Amazon.com, Inc. *	1,700	109,599
eBay, Inc. *	6,900	181,884
Expedia, Inc. *	900	20,637
Internet Software 0.14%		30,708
McAfee, Inc. *	400	13,308
VeriSign, Inc. *	500	17,400

See notes to financial statements

U.S. Core Fund | Annual report

16

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
Leisure Time 0.20%		$43,154
Carnival Corp.	300	11,805
MGM MIRAGE * (a)	509	31,349
Liquor 0.29%		61,217
Anheuser-Busch Companies, Inc.	1,300	61,217
Manufacturing 2.60%		555,216
3M Company	3,600	282,240
Danaher Corp.	1,300	96,395
Eaton Corp.	200	16,126
Harley-Davidson, Inc.	800	29,728
Honeywell International, Inc.	1,800	103,572
Illinois Tool Works, Inc.	100	4,907
SPX Corp.	100	10,230
Tyco International, Ltd.	300	12,018
Metal & Metal Products 0.26%		55,195
Precision Castparts Corp.	500	55,195
Mining 0.14%		30,258
Freeport-McMoRan Copper & Gold, Inc., Class B	300	30,258
Office Furnishings & Supplies 0.17%		36,384
Office Depot, Inc. *	3,200	36,384
Paper 0.02%		4,119
Temple-Inland, Inc.	300	4,119
Petroleum Services 2.43%		518,028
Baker Hughes, Inc.	200	13,458
Diamond Offshore Drilling, Inc.	300	36,249
Halliburton Company	700	26,810
Schlumberger, Ltd.	3,400	293,930
Smith International, Inc.	600	37,818
Valero Energy Corp.	1,900	109,763
Pharmaceuticals 8.50%		1,815,711
Abbott Laboratories	2,500	133,875
AmerisourceBergen Corp.	900	37,548
Bristol-Myers Squibb Company	600	13,566
Eli Lilly & Company	2,200	110,044
Forest Laboratories, Inc. *	1,800	71,586
Gilead Sciences, Inc. *	400	18,928
Merck & Company, Inc.	12,600	558,180
Pfizer, Inc.	36,800	819,904
Schering-Plough Corp.	2,400	52,080
Publishing 0.19%		40,273
Gannett Company, Inc.	1,200	36,180
McGraw-Hill Companies, Inc.	100	4,093

See notes to financial statements

Annual report | U.S. Core Fund

17

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
Railroads & Equipment 0.14%		$29,804
CSX Corp.	100	4,852
Union Pacific Corp.	200	24,952
Retail Grocery 0.33%		71,365
Safeway, Inc.	1,000	28,740
SUPERVALU, Inc.	700	18,375
The Kroger Company	1,000	24,250
Retail Trade 8.97%		1,915,966
Abercrombie & Fitch Company, Class A	400	31,012
American Eagle Outfitters, Inc.	1,450	30,987
Bed Bath & Beyond, Inc. *	1,200	34,008
Best Buy Company, Inc.	200	8,602
Costco Wholesale Corp.	200	12,384
CVS Caremark Corp.	300	12,114
Family Dollar Stores, Inc.	700	13,405
GameStop Corp., Class A *	400	16,944
Home Depot, Inc.	15,300	406,215
Kohl’s Corp. *	1,200	53,328
Lowe’s Companies, Inc.	8,400	201,348
Nordstrom, Inc.	100	3,703
RadioShack Corp.	300	5,235
Staples, Inc.	1,900	42,275
Target Corp.	1,700	89,437
Tiffany & Company	300	11,292
Walgreen Company	3,300	120,483
Wal-Mart Stores, Inc.	16,600	823,194
Semiconductors 0.71%		151,963
Analog Devices, Inc.	100	2,692
Intel Corp.	5,900	117,705
KLA-Tencor Corp.	200	8,402
Texas Instruments, Inc.	400	11,984
Xilinx, Inc.	500	11,180
Software 3.82%		814,857
Autodesk, Inc. *	300	9,327
CA, Inc.	500	11,440
Citrix Systems, Inc. *	600	19,758
Intuit, Inc. *	200	5,312
Microsoft Corp.	21,000	571,620
Oracle Corp. *	10,500	197,400
Telecommunications Equipment & Services 3.70%		789,352
Corning, Inc.	1,200	27,876
QUALCOMM, Inc.	10,000	423,700
Verizon Communications, Inc.	9,300	337,776
Telephone 0.60%		128,000
AT&T, Inc.	3,675	128,000

See notes to financial statements

U.S. Core Fund | Annual report

18

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
Tires & Rubber 0.08%		$16,260
Goodyear Tire & Rubber Company *	600	16,260
Tobacco 1.78%		380,102
Altria Group, Inc.	4,900	358,386
UST, Inc.	400	21,716
Toys, Amusements & Sporting Goods 0.08%		17,391
Hasbro, Inc.	300	7,731
Mattel, Inc.	500	9,660
Trucking & Freight 0.28%		59,770
FedEx Corp.	200	17,626
United Parcel Service, Inc., Class B	600	42,144
	Principal
Issuer, description, maturity date	amount	Value
Short-term investments 0.13%		$26,879
(Cost $26,879)
John Hancock Cash Investment Trust, 3.5681% (c) (f)	$26,879	26,879
Repurchase agreements 3.27%		$699,000
(Cost $699,000)
Repurchase Agreement with State Street Corp. dated
2-29-08 at 2.35% to be repurchased at $699,137
on 3-3-08, collateralized by $615,000 Federal
National Mortgage Association, 6.25%, due
5-15-29 (valued at $713,400, including interest)	$699,000	699,000
Total investments (Cost $22,451,543)† 100.02%		$21,362,839
Liabilities in excess of other assets (0.02%)		($3,696)
Total net assets 100.00%		$21,359,143

Percentages are stated as a percent of net assets.

* Non-income producing.

(a) All or a portion of this security was out on loan.

(c) Investment is an affiliate of the Trust’s adviser or subadviser.

(f) John Hancock Cash Investment Trust is managed by MFC Global Investment Management (U.S.), LLC. The rate shown is the seven-day effective yield at period end.

† At February 29, 2008, the aggregate cost of investment securities for federal income tax purposes was $22,520,999. Net unrealized depreciation aggregated $1,158,160, of which $884,751 related to appreciated investment securities and $2,042,911 related to depreciated investment securities.

See notes to financial statements

Annual report | U.S. Core Fund

19

F I N A N C I A L  S T A T E M E N T S

Financial statements

Statement of assets and liabilities 2-29-08

This Statement of Assets and Liabilities is the Fund’s balance sheet. It shows the value of what the Fund owns, is due and owes. You’ll also find the net asset value and the maximum public offering price per share.

Assets
Investments in unaffiliated issuers, at value (cost $21,725,664) including
$26,352 of securities loaned (Note 2)	$20,636,960
Repurchase agreement, at value (cost $699,000) (Note 2)	699,000
Investments in affiliated issuers, at value (cost $26,879) (Note 2)	26,879
Total investments, at value (cost $22,451,543)	21,362,839
Cash	34
Cash collateral at broker for futures contracts	41,580
Receivable for investments sold	6,080
Dividends and interest receivable (net of tax)	45,575
Receivable due from adviser	6,112
Other assets	103
Total assets	21,462,323
Liabilities
Payable for fund shares repurchased	9,004
Payable upon return of securities loaned (Note 2)	26,879
Payable for futures variation margin	12,075
Payable to affiliates
Fund administration fees	212
Transfer agent fees	1,834
Distribution and service fees	193
Trustees’ fees	86
Other payables and accrued expenses	52,897
Total liabilities	103,180
Net assets
Capital paid-in	$22,732,737
Undistributed net investment income	19,301
Accumulated undistributed net realized gain (loss) on investments and futures contracts	(278,773)
Net unrealized appreciation (depreciation) on investments and futures contracts	(1,114,122)
Net assets	$21,359,143

See notes to financial statements

U.S. Core Fund | Annual report

20

F I N A N C I A L  S T A T E M E N T S

Statement of assets and liabilities (continued)

Net asset value per share
The Funds have an unlimited number of shares authorized with no par
value. Net asset value is calculated by dividing the net assets of each class
of shares by the number of outstanding shares in the class.
Class A
Net assets	$17,582,212
Shares outstanding	905,575
Net asset value and redemption price per share	$19.42
Class B1
Net assets	$337,116
Shares outstanding	17,392
Net asset value and offering price per share	$19.38
Class C1
Net assets	$3,159,503
Shares outstanding	162,981
Net asset value and offering price per share	$19.39
Class I
Net assets	$177,266
Shares outstanding	9,123
Net asset value, offering price and redemption price per share	$19.43
Class R1
Net assets	$103,046
Shares outstanding	5,319
Net asset value, offering price and redemption price per share	$19.37
Maximum public offering price per share
Class A (net asset value per share ÷ 95%)2	$20.44

¹ Redemption price per share is equal to the net asset value less any applicable contingent deferred sales charge.

² On single retail sales of less than $50,000. On sales of $50,000 or more and on group sales the offering price is reduced.

See notes to financial statements

Annual report | U.S. Core Fund

21

F I N A N C I A L  S T A T E M E N T S

Statement of operations For the year ended 2-29-08

This 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.

Investment income
Dividends	$459,865
Interest	36,863
Securities lending	109
Income from affiliated issuers	36
Total investment income	496,873
Expenses
Investment management fees (Note 3)	185,232
Distribution and service fees (Note 3)	100,628
Transfer agent fees (Note 3)	18,857
Fund administration fees (Note 3)	10,610
Blue sky fees (Note 3)	78,355
Audit and legal fees	78,038
Printing and postage fees (Note 3)	7,602
Custodian fees	35,646
Trustees’ fees (Note 3)	1,733
Registration and filing fees	25,734
Miscellaneous	342
Total expenses	542,777
Less expense reductions (Note 3)	(189,284)
Net expenses	353,493
Net investment income	143,380
Realized and unrealized gain (loss)
Net realized gain (loss) on
Investments in unaffiliated issuers	393,570
Futures contracts	(16,845)
	376,725
Change in net unrealized appreciation (depreciation) of
Investments in unaffiliated issuers	(2,499,212)
Futures contracts	(19,868)
	(2,519,080)
Net realized and unrealized gain (loss)	(2,142,355)
Increase (decrease) in net assets from operations	($1,998,975)

See notes to financial statements

U.S. Core Fund | Annual report

22

F I N A N C I A L  S T A T E M E N T S

Statement of changes in net assets

These Statements of Changes in Net Assets show how the value of the Fund’s net assets has changed during the last two periods. The difference reflects earnings less expenses, any investment gains and losses, distributions, if any, paid to shareholders and the net of Fund share transactions.

	Period	Year
	ended	ended
	2-28-071	2-29-08
Increase (decrease) in net assets
From operations
Net investment income	$98,228	$143,380
Net realized gain (loss)	531,494	376,725
Change in net unrealized appreciation (depreciation)	1,404,958	(2,519,080)
Increase (decrease) in net assets resulting from operations	2,034,680	(1,998,975)
Distributions to shareholders
From net investment income
Class A	(75,450)	(147,501)
Class B	(174)	(184)
Class C	(2,087)	(2,027)
Class I	(737)	(5,265)
Class R1	(400)	(756)
From net realized gain
Class A	(165,121)	(797,028)
Class B	(2,107)	(14,341)
Class C	(25,345)	(157,675)
Class I	(1,098)	(18,582)
Class R1	(990)	(4,722)
Total distributions	(273,509)	(1,148,081)
From Fund share transactions (Note 6)	21,350,742	1,394,286
Total increase (decrease)	23,111,913	(1,752,770)
Net assets
Beginning of year	—	23,111,913
End of year	$23,111,913	$21,359,143
Undistributed net investment income	$31,671	$19,301

¹ Period from 6-12-06 (commencement of operations) to 2-28-07.

See notes to financial statements

Annual report | U.S. Core Fund

23

F I N A N C I A L  S T A T E M E N T S

Financial highlights

The Financial Highlights show how the Fund’s net asset value for a share has changed since the end of the previous period.

CLASS A SHARES
Period ended	2-28-071	2-29-08
Per share operating performance
Net asset value, beginning of period	$20.00	$22.24
Net investment income (loss)2	0.12	0.16
Net realized and unrealized
gain (loss) on investments	2.41	(1.88)
Total from investment operations	2.53	(1.72)
Less distributions
From net investment income	(0.09)	(0.17)
From net realized gain	(0.20)	(0.93)
	(0.29)	(1.10)
Net asset value, end of period	$22.24	$19.42
Total return3,4 (%)	12.645	(8.16)
Ratios and supplemental data
Net assets, end of period (in millions)	$19	$18
Ratios (as a percentage of average net assets):
Expenses before reductions	1.936	1.86
Expenses net of fee waivers, if any	1.346	1.34
Expenses net of all fee waivers and credits	1.346	1.34
Net investment income (loss)	0.766	0.70
Portfolio turnover (%)	365	81

¹ Class A shares began operations on 6-12-06.

² Based on the average of the shares outstanding.

³ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁴ Assumes dividend reinvestment.

⁵ Not annualized.

⁶ Annualized.

See notes to financial statements

U.S. Core Fund | Annual report

24

F I N A N C I A L  S T A T E M E N T S

Financial highlights

CLASS B SHARES
Period ended	2-28-071	2-29-08
Per share operating performance
Net asset value, beginning of period	$20.00	$22.20
Net investment income (loss)2	0.02	—3
Net realized and unrealized
gain (loss) on investments	2.40	(1.88)
Total from investment operations	2.42	(1.88)
Less distributions
From net investment income	(0.02)	(0.01)
From net realized gain	(0.20)	(0.93)
	(0.22)	(0.94)
Net asset value, end of period	$22.20	$19.38
Total return4,5 (%)	12.076	(8.84)
Ratios and supplemental data
Net assets, end of period (in millions)	—7	—7
Ratios (as a percentage of average net assets):
Expenses before reductions	13.588	6.98
Expenses net of fee waivers, if any	2.048	2.05
Expenses net of all fee waivers and credits	2.048	2.05
Net investment income (loss)	0.128	—9
Portfolio turnover (%)	366	81

¹ Class B shares began operations on 6-12-06.

² Based on the average of the shares outstanding.

³ Less than $0.01 per share.

⁴ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁵ Assumes dividend reinvestment.

⁶ Not annualized.

⁷ Less than $500,000.

⁸ Annualized.

⁹ Less than 0.01% .

See notes to financial statements

Annual report | U.S. Core Fund

25

F I N A N C I A L   S T A T E M E N T S

Financial highlights

CLASS C SHARES
Period ended	2-28-071	2-29-08
Per share operating performance
Net asset value, beginning of period	$20.00	$22.21
Net investment income (loss)2	0.03	—3
Net realized and unrealized
gain (loss) on investments	2.40	(1.88)
Total from investment operations	2.43	(1.88)
Less distributions
From net investment income	(0.02)	(0.01)
From net realized gain	(0.20)	(0.93)
	(0.22)	(0.94)
Net asset value, end of period	$22.21	$19.39
Total return4,5 (%)	12.126	(8.84)
Ratios and supplemental data
Net assets, end of period (in millions)	$3	$3
Ratios (as a percentage of average net assets):
Expenses before reductions	3.827	2.94
Expenses net of fee waivers, if any	2.047	2.05
Expenses net of all fee waivers and credits	2.047	2.05
Net investment income (loss)	0.167	(0.01)
Portfolio turnover (%)	366	81

¹ Class C shares began operations on 6-12-06.

² Based on the average of the shares outstanding.

³ Less than $0.01 per share.

⁴ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁵ Assumes dividend reinvestment.

⁶ Not annualized.

⁷ Annualized.

See notes to financial statements

U.S. Core Fund | Annual report

26

F I N A N C I A L  S T A T E M E N T S

Financial highlights

CLASS I SHARES
Period ended	2-28-071	2-29-08
Per share operating performance
Net asset value, beginning of period	$20.00	$22.26
Net investment income (loss)2	0.18	0.25
Net realized and unrealized
gain (loss) on investments	2.41	(1.89)
Total from investment operations	2.59	(1.64)
Less distributions
From net investment income	(0.13)	(0.26)
From net realized gain	(0.20)	(0.93)
	(0.33)	(1.19)
Net asset value, end of period	$22.26	$19.43
Total return3,4 (%)	12.955	(7.82)
Ratios and supplemental data
Net assets, end of period (in millions)	—6	—6
Ratios (as a percentage of average net assets):
Expenses before reductions	17.837	12.79
Expenses net of fee waivers, if any	0.957	0.95
Expenses net of all fee waivers and credits	0.957	0.95
Net investment income (loss)	1.167	1.10
Portfolio turnover (%)	365	81

¹ Class I shares began operations on 6-12-06.

² Based on the average of the shares outstanding.

³ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁴ Assumes dividend reinvestment.

⁵ Not annualized.

⁶ Less than $500,000.

⁷ Annualized.

See notes to financial statements

Annual report | U.S. Core Fund

27

F I N A N C I A L  S T A T E M E N T S

Financial highlights

CLASS R1 SHARES
Period ended	2-28-071	2-29-08
Per share operating performance
Net asset value, beginning of period	$20.00	$22.20
Net investment income (loss)2	0.06	0.13
Net realized and unrealized
gain (loss) on investments	2.42	(1.88)
Total from investment operations	2.48	(1.75)
Less distributions
From net investment income	(0.08)	(0.15)
From net realized gain	(0.20)	(0.93)
	(0.28)	(1.08)
Net asset value, end of period	$22.20	$19.37
Total return3,4 (%)	12.385	(8.32)
Ratios and supplemental data
Net assets, end of period (in millions)	—6	—6
Ratios (as a percentage of average net assets):
Expenses before reductions	21.127	15.98
Expenses net of fee waivers, if any	1.697	1.45
Expenses net of all fee waivers and credits	1.697	1.45
Net investment income (loss)	0.417	0.59
Portfolio turnover (%)	365	81

¹ Class R1 shares began operations on 6-12-06.

² Based on the average of the shares outstanding.

³ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁴ Assumes dividend reinvestment.

⁵ Not annualized.

⁶ Less than $500,000.

⁷ Annualized.

See notes to financial statements

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Notes to financial statements

1. Organization

John Hancock U.S. Core Fund (the Fund) is a diversified series of John Hancock Funds III (the Trust). The Trust was established as a Massachusetts business trust on June 9, 2005. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end investment management company. The investment objective of the Fund is to seek high total return.

John Hancock Life Insurance Company of New York (John Hancock New York) is a wholly owned subsidiary of John Hancock Life Insurance Company (U.S.A.) (John Hancock USA). John Hancock USA and John Hancock New York are indirect wholly owned subsidiaries of The Manufacturers Life Insurance Company (Manulife), which in turn is a wholly owned subsidiary of Manulife Financial Corporation (MFC), a publicly traded company. MFC and its subsidiaries are known collectively as “Manulife Financial.”

John Hancock Investment Management Services, LLC (the Adviser), a Delaware limited liability company controlled by John Hancock USA, serves as investment adviser for the Trust and John Hancock Funds, LLC (the Distributor), a Delaware limited liability company, an affiliate of the Adviser, serves as principal underwriter.

The Board of Trustees have authorized the issuance of multiple classes of shares of the Fund, including classes designated as Class A, Class B, Class C, Class I and Class R1 shares. Class A, Class B and Class C shares are open to all retail investors. Class I shares are offered without any sales charge to various institutional and certain individual investors. Class R1 shares are available only to certain retirement plans. The shares of each class represent an interest in the same portfolio of investments of the Fund, and have equal rights as to voting, redemptions, dividends and liquidation, except that certain expenses, subject to the approval of the Board of Trustees, may be applied differently to each class of shares in accordance with current regulations of the Securities and Exchange Commission (SEC) and the Internal Revenue Service. Shareholders of a class that bear distribution and service expenses under the terms of a distribution plan have exclusive voting rights to that distribution plan. Class B shares will convert to Class A shares eight years after purchase.

The Adviser and other subsidiaries of John Hancock USA owned 777,709, 5,271, 5,359 and 5,319 shares of beneficial interest of Class A, Class B, Class I and Class R1, respectively, of the Fund on February 29, 2008.

2. Significant accounting policies

In the preparation of the financial statements, the Fund follows the policies described below. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results may differ from these estimates.

Security valuation

The net asset value of the shares of the Fund is determined daily as of the close of the New York Stock Exchange (NYSE), normally at 4:00 P.M., Eastern Time. Short-term debt investments that have a remaining maturity of 60 days or less are valued at amortized cost, and thereafter assume a constant amortization to maturity of any discount or premium, which approximates market value. Investments in John Hancock Cash Investment Trust (JHCIT), an affiliate of the John Hancock Advisers, LLC (JHA), a wholly owned subsidiary of John Hancock Financial Services, Inc., a subsidiary

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of MFC, are valued at their net asset value each business day. All other securities held by the Fund are valued at the last sale price or official closing price (closing bid price or last evaluated quote if no sale has occurred) as of the close of business on the principal securities exchange (domestic or foreign) on which they trade or, lacking any sales, at the closing bid price. Securities traded only in the over-the-counter market are valued at the last bid price quoted by brokers making markets in the securities at the close of trading. Securities for which there are no such quotations, principally debt securities, are valued based on the evaluated prices provided by an independent pricing service, which utilizes both dealer-supplied and electronic data processing techniques, which take into account factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other marke t data.

Other assets and securities for which no such quotations are readily available are valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees. Generally, trading in non-U.S. securities is substantially completed each day at various times prior to the close of trading on the NYSE. The values of such securities used in computing the net asset value of a Fund’s shares are generally determined as of such times. Occasionally, significant events that affect the values of such securities may occur between the times at which such values are generally determined and the close of the NYSE. Upon such an occurrence, these securities will be valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees.

In deciding whether to make a fair value adjustment to the price of a security, the Board of Trustees or their designee may review a variety of factors, including developments in foreign markets, the performance of U.S. securities markets and the performance of instruments trading in U.S. markets that represent foreign securities and baskets of foreign securities. The Fund may also fair value securities in other situations, for example, when a particular foreign market is closed, but the Fund is calculating the net asset value. In view of these factors, it is likely that Funds investing significant amounts of assets in securities in foreign markets will be fair valued more frequently than Funds investing signifi-cant amounts of assets in frequently traded, U.S. exchange-listed securities of large-capitalization U.S. issuers.

For purposes of determining when fair value adjustments may be appropriate with respect to Funds that invest in securities in foreign markets that close prior to the NYSE, the Funds will, on an ongoing basis, monitor for “significant market events.” A significant market event may be a certain percentage change in the value of an index or of certain Exchange Traded Funds that track foreign markets in which Funds have significant investments. If a significant market event occurs due to a change in the value of the index or of Exchange Traded Funds, the pricing for the Fund will promptly be reviewed and potential adjustments to the net asset value of the Fund will be recommended to the Trust’s Pricing Committee when applicable.

Fair value pricing of securities is intended to help ensure that the net asset value of the Fund’s shares reflects the value of the Fund’s securities as of the close of the NYSE (as opposed to a value which is no longer accurate as of such close), thus limiting the opportunity for aggressive traders to purchase shares of the Fund at deflated prices, reflecting stale security valuations, and to promptly sell such shares at a gain. However, a security’s valuation may differ depending on the method used for determining value and no assurance can be given that fair value pricing of securities will successfully eliminate all potential opportunities for such trading gains.

New accounting pronouncements

In September 2006, Financial Accounting Standards Board (FASB) Standard No. 157,  Fair Value Measurements (FAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. FAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosure about fair

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value measurements. As of February 29, 2008, management does not believe the adoption of FAS 157 will impact the amounts reported in the financial statements; however, additional disclosures regarding pricing sources will be required about the inputs used to develop the measurements of fair value and the related realized and unrealized gain/loss for certain securities valued by significant unobservable market inputs.

In March 2008, FASB No. 161 (FAS 161), Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133 (FAS 133), was issued and is effective for fiscal years beginning after November 15, 2008. FAS 161 amends and expands the disclosure requirements of FAS 133 in order to provide financial statement users an understanding of a company’s use of derivative instruments, how derivative instruments are accounted for under FAS 133 and related interpretations and how these instruments affect a company’s financial position, performance, and cash flows. FAS 161 requires companies to disclose information detailing the objectives and strategies for using derivative instruments, the level of derivative activity entered into by the company, and any credit risk-related contingent features of the agreements. Management is currently evaluating the adoption of FAS 161 on the Fund’s financial statement disclosures.

Guarantees and indemnifications

Under the Trust’s organizational documents, its Officers and Trustees are indemnified against certain liability arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust that have not yet occurred.

Repurchase agreements

The Fund may enter into repurchase agreements. When the Fund enters into a repurchase agreement through its custodian, it receives delivery of securities, the amount of which at the time of purchase and each subsequent business day is required to be maintained at such a level that the market value is generally at least 102% of the repurchase amount. The Fund will take constructive receipt of all securities underlying the repurchase agreements it has entered into until such agreements expire. If the seller defaults, the Fund would suffer a loss to the extent that proceeds from the sale of underlying securities were less than the repurchase amount. The Fund may enter into repurchase agreements maturing within seven days with domestic dealers, banks or other financial institutions deemed to be creditworthy by the Adviser. Collateral for certain tri-party repurchase agreements is held at the custodian bank in a segregated account for the benefi t of the Fund and the counterparty.

Security transactions and related investment income

Investment security transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment transactions are reported on trade date. Interest income is accrued as earned. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Foreign dividends are recorded on the ex-date or when the Fund becomes aware of the dividends from cash collections. Discounts/premiums are accreted/ amortized for financial reporting purposes. Non-cash dividends are recorded at the fair market value of the securities received. Debt obligations may be placed in a non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful, based upon consistently applied procedures.

From time to time, the Fund may invest in Real Estate Investment Trusts (REITs) and, as a result, will estimate the components of distributions from these securities. Distributions from REITs received in excess of income are recorded as a reduction of cost of investments and/or as a realized gain.

The Fund uses the specific identification method for determining realized gain or loss on investments for both financial statement and federal income tax reporting purposes.

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Allocations of income and expenses

All income, expenses (except class-specific expenses), and realized and unrealized gain/ loss are allocated to each class of shares based upon the relative net assets of each class. Dividends to shareholders from net investment income are determined at a class level and distributions from capital gains are determined at a Fund level.

Expenses not directly attributable to the Fund or share classes are allocated based on the relative share of net assets of the Fund or share class at the time the expense was incurred. Class-specific expenses, as detailed in Note 3, are accrued daily and charged directly to the respective share classes.

Securities lending

The Fund may lend portfolio securities from time to time in order to earn additional income. The Fund retains beneficial ownership of the securities it has loaned and continues to receive interest and dividends paid by the issuer of securities and to participate in any changes in their value. On the settlement date of the loan, the Fund receives collateral against the loaned securities and maintain collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. Any cash collateral received is invested in the JHCIT. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collat eral. The Fund receives compensation for lending its securities either in the form of fees, guarantees, and/or by retaining a portion of interest on the investment of any cash received as collateral.

The Fund has entered into an agreement with Morgan Stanley & Co. Incorporated and MS Securities Services Inc. (collectively, Morgan Stanley) which permits the Fund to lend securities to Morgan Stanley on a principal basis. Morgan Stanley is the primary borrower of fund securities of the Fund. The risk of having one primary borrower of securities (as opposed to several borrowers in an agency relationship) is that should Morgan Stanley fail financially, all securities lent will be affected by the failure and by any delays in recovery of the securities (or in the rare event, loss of rights in the collateral).

Prior to May 8, 2007, cash collateral was invested in the State Street Navigator Securities Lending Portfolio. At February 29, 2008, the Fund loaned securities having a market value of $26,352 collateralized by securities in the amount of $26,879.

Futures

The Fund may purchase and sell financial futures contracts and options on those contracts. The Fund invests in contracts based on finan-cial instruments, such as U.S. Treasury Bonds or Notes, or on securities indices such as the Standard & Poor’s 500 Index, in order to hedge against a decline in the value of securities owned by the Fund.

Initial margin deposits required upon entering into futures contracts are satisfied by the delivery of specific securities or cash as collateral to the broker (the Fund’s agent in acquiring the futures position). If the position is closed out by taking an opposite position prior to the settlement date of the futures contract, a final determination of variation margin is made, cash is required to be paid to or released by the broker and the Fund realizes a gain or loss.

When the Fund sells a futures contract based on a financial instrument, the Fund becomes obligated to deliver that kind of instrument at an agreed upon date for a specified price. The Fund realizes a gain or loss depending on whether the price of an offsetting purchase is less or more than the price of the initial sale or on whether the price of an offsetting sale is more or less than the price of the initial purchase. The Fund could be exposed to risks if it could not close out futures positions because of an illiquid secondary market or the inability of counterparties to meet the terms of their contracts. Futures contracts are valued at the quoted daily settlement prices established by the exchange on which they trade.

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The following is a summary of open futures contracts at February 29, 2008:

					UNREALIZED
	NUMBER OF		EXPIRATION	NOTIONAL	APPRECIATION
OPEN CONTRACTS	CONTRACTS	POSITION	DATE	VALUE	(DEPRECIATION)
S&P Mini 500
Index Futures	7	Long	Mar 2008	$465,955	($25,418)

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 that is distributed to shareholders. Therefore, no federal income tax provision is required. Net capital losses of $234,735 that are attributable to security transactions incurred after October 31, 2007, are treated as arising on March 1, 2008, the first day of the Fund’s next taxable year.

The Fund has adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement 109 (FIN 48), at the beginning of the Fund’s fiscal year. FIN 48 prescribes a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not have a material impact on the Fund’s financial statements. Each of the Fund’s federal tax returns for the prior fiscal years remains subject to examination by the Internal Revenue Service.

Distribution of income and gains

The Fund records distributions to shareholders from net investment income and net realized gains, if any, on the ex-dividend date. During the year ended February 28, 2007, the tax character of distributions paid was as follows: ordinary income $244,036 and long-term capital gain $29,472. During the year ended February 29, 2008, the tax character of distributions paid was as follows: ordinary income $761,252 and long-term capital gain $386,829. Distributions paid by the Fund with respect to each class of shares are calculated in the same manner, at the same time and are in the same amount, except for the effect of expenses that may be applied differently to each class.

As of February 29, 2008, the components of distributable earnings on a tax basis included $19,302 of undistributed ordinary income.

Such distributions and distributable earnings, on a tax basis, are determined in conformity with income tax regulations, which may differ from accounting principles generally accepted in the United States of America. Distributions in excess of tax basis earnings and profits, if any, are reported in the Fund’s financial statements as a return of capital.

Capital accounts within financial statements are adjusted for permanent book/tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book/tax differences will reverse in a subsequent period.

3. Investment advisory and other agreements

The Trust has entered into an Investment Advisory Agreement with the Adviser. The Adviser is responsible for managing the corporate and business affairs of the Trust and for selecting and compensating subadvisers to handle the investment of the assets of the Fund, subject to the supervision of the Trust’s Board of Trustees. As compensation for its services, the Adviser receives an advisory fee from the Trust. Under the Advisory Agreement, the Fund pays a monthly management fee to the Adviser equivalent, on an annual basis, to the sum of: (a) 0.78% of the first $500,000,000 of the Fund’s aggregate daily net assets; (b) 0.76% of the next $500,000,000 of the Fund’s aggregate daily net assets; (c) 0.75% of the next $1,500,000,000 of the Fund’s aggregate daily net assets; and (d) 0.74% of the Fund’s aggregate daily net assets in excess of $2,500,000,000. Aggregate net assets include the net assets of the Fund, U.S. Core Trust, Growth and Income Trust, and a portion of the net assets of the Managed Trust Series of John Hancock Trust, the U.S. Core Fund, a series of John Hancock

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Funds II, that are subadvised by Grantham, Mayo, Van Otterloo & Co. LLC. The Fund is not responsible for payment of the subadvisory fees.

The investment management fees incurred for the year ended February 29, 2008, were equivalent to an annual effective rate of 0.76% of the Fund’s average daily net assets.

Expense reimbursements

The Adviser has contractually agreed to reimburse or limit certain Fund level expenses to 0.10% of the Fund’s average annual net assets which are allocated pro rata to all share classes. This agreement excludes taxes, portfolio brokerage commissions, interest, advisory fees, Rule 12b-1 fees, transfer agency fees, blue sky fees, printing and postage and litigation and indemnification expenses and other extraordinary expenses not incurred in the ordinary course of the Fund’s business. In addition, fees incurred under any agreement or plans of the Fund dealing with services for the shareholders and others with beneficial interest in shares of the Fund, are excluded.

In addition, the Adviser has agreed to reimburse or limit certain expenses for each share class. This agreement excludes taxes, portfolio brokerage commissions, interest and litigation and indemnification expenses and other extraordinary expenses not incurred in the ordinary course of the Fund’s business. In addition, fees incurred under any agreement or plans of the Fund dealing with services for the shareholders and others with beneficial interest in shares of the Fund, are excluded. The reimbursements and limits are such that these expenses will not exceed 1.35% for Class A shares, 2.05% for Class B, 2.05% for Class C, 0.95% for Class I and 1.45% for Class R1. Accordingly, the expense reductions or reimbursements related to this agreement were $105,283, $16,541, $32,283, $18,472 and $16,429 for Class A, Class B, Class C, Class I and Class R1, respectively for the year ended February 29, 2008. The expense reimbursements and limits will continue in effect until Jun e 30, 2008 and thereafter until terminated by the Adviser on notice to the Trust.

Fund administration fees

Pursuant to the Advisory Agreement, the Fund reimburses the Adviser for all expenses associated with providing the administrative, financial, legal, accounting and recordkeeping services of the Fund, including the preparation of all tax returns, annual, semiannual and periodic reports to shareholders and the preparation of all regulatory reports. These expenses are allocated based on the relative share of net assets of each class at the time the expense was incurred.

The fund administration fees incurred for the year ended February 29, 2008, were $10,610 with an annual effective rate of 0.04% of the Fund’s average daily net assets.

Distribution and shareholder servicing fees

The Trust has a Distribution Agreement with the Distributor. The Fund has adopted Distribution Plans with respect to Class A, Class B, Class C and Class R1, pursuant to Rule 12b-1 under the 1940 Act, to pay the Distributor for the services it provides as distributor of shares of the Fund. Accordingly, the Fund makes monthly payments to the Distributor at an annual rate not to exceed 0.30%, 1.00%, 1.00% and 0.50% of average daily net asset value of Class A, Class B, Class C and Class R1, respectively. A maximum of 0.25% of such payments may be service fees, as defined by the Conduct Rules of Financial Industry Regulatory Authority (formerly the National Association of Securities Dealers). Under the Conduct Rules, curtailment of a portion of the Fund’s 12b-1 payments could occur under certain circumstances.

In addition, the Fund has also adopted a Service Plan for Class R1 shares. Under the Service Plan, the Fund may pay up to 0.25% of Class R1 average daily net asset value for certain other services. There were no Service Plan fees incurred for the year ended February 29, 2008.

Sales charges

Class A shares are assessed up-front sales charges of up to 5.00% of net asset value of such shares. During the year ended February 29, 2008, the Fund was informed that the Distributor received net up-front sales charges of $56,437 with regard to sales

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of Class A shares. Of this amount, $9,186 was retained and used for printing prospectuses, advertising, sales literature and other purposes; $47,209 was paid as sales commissions to unrelated broker-dealers; and $42 was paid as sales commissions to sales personnel of Signator Investors, Inc. (Signator Investors), a related broker-dealer, an indirect subsidiary of MFC.

Class B shares that are redeemed within six years of purchase are subject to a contingent deferred sales charge (CDSC) at declining rates, beginning at 5.00% of the lesser of the current market value at the time of redemption or the original purchase cost of the shares being redeemed. Class C shares that are redeemed within one year of purchase are subject to a CDSC at a rate of 1.00% of the lesser of the current market value at the time of redemption or the original purchase cost of the shares being redeemed. Proceeds from the CDSCs are paid to the Distributor and are used, in whole or in part, to defray its expenses for providing distribution-related services to the Fund in connection with the sale of Class B and Class C shares. During the year ended February 29, 2008, CDSCs received by Distributor amounted to $1,352 for Class B shares and $611 for Class C shares.

Transfer agent fees

The Fund has a Transfer Agency Agreement with John Hancock Signature Services, Inc. (Signature Services), an indirect subsidiary of MFC. For Class A, Class B, Class C, Class I and Class R1 shares, the Fund pays a monthly transfer agent fee at an annual rate of 0.05% of each class’ average daily net assets, plus a fee based on the number of shareholder accounts and reimbursement for certain out-of-pocket expenses. Expenses not directly attributable to a particular class of shares are aggregated and allocated to each class on the basis of its relative net asset value. The Fund pays a monthly fee which is based on an annual rate of $15.00 for each Class A shareholder account, $17.50 for each Class B shareholder account, $16.50 for each Class C shareholder account and $15.00 for each Class R1 shareholder account.

Signature Services has agreed to limit the transfer agent fees so that such fees do not exceed 0.20% annually of Class A, Class B, Class C, Class I and Class R1 share average daily net assets. This agreement is effective until December 31, 2008. Signature Services reserves the right to terminate this limitation in the future. There were no transfer agent fee reductions for Class A, Class B, Class C, Class I and Class R1 shares, respectively, during the year ended February 29, 2008.

In addition, Signature Services has voluntarily agreed to further limit transfer agent fees for Class R1 shares so that such fees do not exceed 0.05% annually of each class’s average daily net assets. For the year ended February 29, 2008, the transfer agent fees reductions for Class R1 were $175.

In May 2007, the Fund began receiving earnings credits from its transfer agent as a result of uninvested cash balances. These credits are used to reduce a portion of the Fund’s transfer agent fees and out-of-pocket expenses. During the year ended February 29, 2008, the Fund’s transfer agent fees and out-of-pocket expenses were reduced by $101 for transfer agent credits earned.

Class level expenses for the year ended February 29, 2008, were as follows:

	Distribution and	Transfer	Blue	Printing and
Share class	service fees	agent fees	sky fees	postage fees
Class A	$60,215	$14,155	$15,342	$6,099
Class B	3,359	683	14,720	3
Class C	36,483	3,706	14,719	1,438
Class I	—	80	17,698	59
Class R1	571	233	15,876	3
Total	$100,628	$18,857	$78,355	$7,602

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4. Trustees’ fees

The Trust compensates each Trustee who is not an employee of the Adviser or its affiliates. Total Trustees’ expenses are allocated to the Fund based on its average daily net asset value.

5. Line of credit

The Fund has entered into an agreement which enables them to participate in a $100 million unsecured committed line of credit with State Street Corporation. Borrowings will be made solely to temporarily finance the repurchase of capital shares. Interest is charged to the Fund based on its borrowings at a rate per annum equal to the Federal Funds rate plus 0.50% .

In addition, a commitment fee of 0.05% per annum, payable at the end of each calendar quarter, based on the average daily-unused portion of the line of credit, is charged to the Fund on a prorated basis based on average net assets. Effective October 15, 2007, the commitment fee was changed from 0.07% to 0.05% . For the year ended February 29, 2008, there were no borrowings under the line of credit.

6. Fund share transactions

Share activities for the Fund for the period ended February 28, 2007, and the year ended February 29, 2008, were as follows:

	Period ended 2-28-071		Year ended 2-29-08
	Shares	Amount	Shares	Amount
Class A shares
Sold	864,514	$17,543,185	106,396	$2,395,336
Distributions reinvested	10,725	239,263	43,986	939,554
Repurchased	(2,906)	(65,923)	(117,140)	(2,611,267)
Net increase (decrease)	872,333	$17,716,525	33,242	$723,623
Class B shares
Sold	13,046	$278,326	5,003	$110,340
Distributions reinvested	94	2,087	640	13,671
Repurchased	(292)	(6,586)	(1,099)	(25,142)
Net increase (decrease)	12,848	$273,827	4,544	$98,869
Class C shares
Sold	147,710	$3,240,381	31,279	$715,779
Distributions reinvested	1,205	26,878	7,433	158,760
Repurchased	(5,402)	(121,094)	(19,244)	(404,858)
Net increase (decrease)	143,513	$3,146,165	19,468	$469,681
Class I shares
Sold	5,545	$111,000	14,516	$326,350
Distributions reinvested	82	1,835	1,116	23,848
Repurchased	—	—	(12,136)	(253,563)
Net increase (decrease)	5,627	$112,835	3,496	$96,635
Class R1 shares
Sold	5,000	$100,000	—	—
Distributions reinvested	62	1,390	257	5,478
Net increase (decrease)	5,062	$101,390	257	$5,478
Net increase (decrease)	1,039,383	$21,350,742	61,007	$1,394,286

¹Period from 6-12-06 (commencement of operations) to 2-28-07.

7. Purchases and sales of securities and obligations of the U.S. government, during Purchases and proceeds from sales or maturities the year ended February 29, 2008, aggregated of securities, other than short-term securities $19,186,533 and $18,750,220, respectively.

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Auditors’ report

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of John Hancock Funds III and Shareholders of John Hancock U.S. Core Fund,

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of John Hancock U.S. Core Fund (the Fund) at February 29, 2008, and the results of its operations, the changes in its net assets and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standa rds require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of investments at February 29, 2008 by correspondence with the custodian, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
Boston, Massachusetts
April 18, 2008

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Tax information

Unaudited

For federal income tax purposes, the following information is furnished with respect to the distributions of the Fund, if any, paid during its taxable year ended February 29, 2008.

The Fund has designated distributions to shareholders of $386,839 as a long-term capital gain dividend. With respect to the ordinary dividends paid by the Fund for the fiscal year ended February 29, 2008, 100.00% of the dividends qualifies for the corporate dividends-received deduction.

The Fund hereby designates the maximum amount allowable of its net taxable income as qualified dividend income as provided in the Jobs and Growth Tax Relief Reconciliation Act of 2003. This amount will be reflected on Form 1099-DIV for the calendar year 2008.

Shareholders will be mailed a 2008 U.S. Treasury Department Form 1099-DIV in January 2009. This will reflect the total of all distributions that are taxable for calendar year 2008.

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Trustees and Officers

This chart provides information about the Trustees and Officers who oversee your John Hancock fund. Officers elected by the Trustees manage the day-to-day operations of the Fund and execute policies formulated by the Trustees.

Independent Trustees
Name, Year of Birth		Number of
Position(s) held with Fund	Trustee	John Hancock
Principal occupation(s) and other	of Fund	funds overseen
directorships during past 5 years	since1	by Trustee
James F. Carlin, Born: 1940	2006	55
Chairman (since December 2007); Director and Treasurer, Alpha Analytical Laboratories, Inc. (chemical
analysis) (since 1985); Part Owner and Treasurer, Lawrence Carlin Insurance Agency, Inc. (since 1995);
Part Owner and Vice President, Mone Lawrence Carlin Insurance Agency, Inc. (until 2005); Chairman
and Chief Executive Officer, Carlin Consolidated, Inc. (management/investments) (since 1987); Trustee,
Massachusetts Health and Education Tax Exempt Trust (1993–2003).
William H. Cunningham, Born: 1944	2006	55
Professor, University of Texas at Austin (since 1971); former Chancellor, University of Texas System and
former President, University of Texas at Austin (until 2001); Chairman and Chief Executive Officer, IBT
Technologies (until 2001); Director of the following: Hicks Acquisition Company I, Inc. (since 2007);
Hire.com (until 2004), STC Broadcasting, Inc. and Sunrise Television Corp. (until 2001), Symtx, Inc.
(electronic manufacturing) (since 2001), Adorno/Rogers Technology, Inc. (until 2004), Pinnacle
Foods Corporation (until 2003), rateGenius (until 2003), Lincoln National Corporation (insurance)
(since 2006), Jefferson-Pilot Corporation (diversified life insurance company) (until 2006), New
Century Equity Holdings (formerly Billing Concepts) (until 2001), eCertain (until 2001), ClassMap.com
(until 2001), Agile Ventures (until 2001), AskRed.com (until 2001), Southwest Airlines (since 2000),
Introgen (manufacturer of biopharmaceuticals) (since 2000) and Viasystems Group, Inc. (electronic
manufacturer) (until 2003); Advisory Director, Interactive Bridge, Inc. (college fundraising) (until 2001);
Advisory Director, Q Investments (until 2003); Advisory Director, JPMorgan Chase Bank (formerly Texas
Commerce Bank–Austin), LIN Television (until 2008), WilTel Communications (until 2003) and Hayes
Lemmerz International, Inc. (diversified automotive parts supply company) (since 2003).
Charles L. Ladner,2 Born: 1938	2006	55
Chairman and Trustee, Dunwoody Village, Inc. (retirement services) (until 2003); Senior Vice President
and Chief Financial Officer, UGI Corporation (public utility holding company) (retired 1998); Vice
President and Director, AmeriGas, Inc. (retired 1998); Director, AmeriGas Partners, L.P. (gas distribution)
(until 1997); Director, EnergyNorth, Inc. (until 1997); Director, Parks and History Association (until 2005).
John A. Moore,2 Born: 1939	2006	55
President and Chief Executive Officer, Institute for Evaluating Health Risks (nonprofit institution)
(until 2001); Senior Scientist, Sciences International (health research) (until 2003); Former Assistant
Administrator and Deputy Administrator, Environmental Protection Agency; Principal, Hollyhouse
(consulting) (since 2000); Director, CIIT Center for Health Science Research (nonprofit research)
(until 2007).

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39

Independent Trustees (continued)
Name, Year of Birth		Number of
Position(s) held with Fund	Trustee	John Hancock
Principal occupation(s) and other	of Fund	funds overseen
directorships during past 5 years	since1	by Trustee
Patti McGill Peterson,2 Born: 1943	2006	55
Senior Associate, Institute for Higher Education Policy (since 2007); Executive Director, Council for
International Exchange of Scholars and Vice President, Institute of International Education (until 2007);
Senior Fellow, Cornell Institute of Public Affairs, Cornell University, Ithaca, NY (until 1998); Former
President, Wells College, Aurora, NY, and St. Lawrence University, Canton, NY; Director, Niagara
Mohawk Power Corporation (until 2003); Director, Ford Foundation, International Fellowships Program
(since 2002); Director, Lois Roth Endowment (since 2002); Director, Council for International Educational
Exchange (since 2003).
Steven R. Pruchansky, Born: 1944	2006	55
Chairman and Chief Executive Officer, Greenscapes of Southwest Florida, Inc. (since 2000); Director and
President, Greenscapes of Southwest Florida, Inc. (until 2000); Managing Director, JonJames, LLC (real
estate) (since 2000); Director, First Signature Bank & Trust Company (until 1991); Director, Mast Realty
Trust (until 1994); President, Maxwell Building Corp. (until 1991).
Non-Independent Trustees3
Name, Year of Birth		Number of
Position(s) held with Fund	Trustee	John Hancock
Principal occupation(s) and other	of Fund	funds overseen
directorships during past 5 years	since1	by Trustee
James R. Boyle, Born: 1959	2006	265
Executive Vice President, Manulife Financial Corporation (since 1999); President, John Hancock Variable
Life Insurance Company (since March 2007); Executive Vice President, John Hancock Life Insurance
Company (since 2004); Chairman and Director, John Hancock Advisers, LLC (the Adviser), John Hancock
Funds, LLC and The Berkeley Financial Group, LLC (The Berkeley Group) (holding company) (since 2005);
Senior Vice President, The Manufacturers Life Insurance Company (U.S.A.) (until 2004).

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Principal officers who are not Trustees
Name, Year of Birth
Position(s) held with Fund	Officer
Principal occupation(s) and other	of Fund
directorships during past 5 years	since
Keith F. Hartstein, Born: 1956	2006
President and Chief Executive Officer
Senior Vice President, Manulife Financial Corporation (since 2004); Director, President and Chief
Executive Officer, the Adviser, The Berkeley Group and John Hancock Funds, LLC (since 2005); Director,
MFC Global Investment Management (U.S.), LLC (MFC Global (U.S.)) (since 2005); Director, John
Hancock Signature Services, Inc. (since 2005); President and Chief Executive Officer, John Hancock
Investment Management Services, LLC (since 2006); President and Chief Executive Officer, John Hancock
Funds, John Hancock Funds II, John Hancock Funds III and John Hancock Trust (since 2005); Director,
Chairman and President, NM Capital Management, Inc. (since 2005); Member, Investment Company
Institute Sales Force Marketing Committee (since 2003); President and Chief Executive Officer, MFC
Global (U.S.) (2005–2006); Executive Vice President, John Hancock Funds, LLC (until 2005).
Thomas M. Kinzler, Born: 1955	2006
Secretary and Chief Legal Officer
Vice President and Counsel, John Hancock Life Insurance Company (U.S.A.) (since 2006); Secretary and
Chief Legal Officer, John Hancock Funds and John Hancock Funds II (since 2006); Chief Legal Officer
and Assistant Secretary, John Hancock Trust (since 2006); Vice President and Associate General Counsel,
Massachusetts Mutual Life Insurance Company (1999–2006); Secretary and Chief Legal Counsel, MML
Series Investment Fund (2000–2006); Secretary and Chief Legal Counsel, MassMutual Institutional Funds
(2000–2004); Secretary and Chief Legal Counsel, MassMutual Select Funds and MassMutual Premier
Funds (2004–2006).
Francis V. Knox, Jr., Born: 1947	2006
Chief Compliance Officer
Vice President and Chief Compliance Officer, John Hancock Investment Management Services, LLC,
the Adviser and MFC Global (U.S.) (since 2005); Vice President and Chief Compliance Officer, John
Hancock Funds, John Hancock Funds II, John Hancock Funds III and John Hancock Trust (since 2005);
Vice President and Assistant Treasurer, Fidelity Group of Funds (until 2004); Vice President and Ethics &
Compliance Officer, Fidelity Investments (until 2001).
Charles A. Rizzo, Born: 1957	2007
Chief Financial Officer
Chief Financial Officer, John Hancock Funds, John Hancock Funds II, John Hancock Funds III and John
Hancock Trust (since June 2007); Assistant Treasurer, Goldman Sachs Mutual Fund Complex (regis-
tered investment companies) (2005–June 2007); Vice President, Goldman Sachs (2005–June 2007);
Managing Director and Treasurer of Scudder Funds, Deutsche Asset Management (2003–2005);
Director, Tax and Financial Reporting, Deutsche Asset Management (2002–2003); Vice President and
Treasurer, Deutsche Global Fund Services (Deutsche Registered Investment Companies) (1999–2002).
Gordon M. Shone, Born: 1956	2006
Treasurer
Senior Vice President, John Hancock Life Insurance Company (U.S.A.) (since 2001); Treasurer, John
Hancock Funds (since 2006), John Hancock Funds II, John Hancock Funds III and John Hancock Trust
(since 2005); Vice President and Chief Financial Officer, John Hancock Trust (2003–2005); Vice President,
John Hancock Investment Management Services, Inc., John Hancock Advisers, LLC (since 2006) and The
Manufacturers Life Insurance Company (U.S.A.) (1998–2000).

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41

Principal officers who are not Trustees(continued)

Name, Year of Birth
Position(s) held with Fund	Officer
Principal occupation(s) and other	of Fund
directorships during past 5 years	since
John G. Vrysen, Born: 1955	2006
Chief Operating Officer
Senior Vice President, Manulife Financial Corporation (since 2006); Director, Executive Vice President
and Chief Operating Officer, the Adviser, The Berkeley Group and John Hancock Funds, LLC (since
June 2007); Executive Vice President and Chief Operating Officer, John Hancock Investment
Management Services, LLC (since December 2007); Chief Operating Officer, John Hancock Funds,
John Hancock Funds II, John Hancock Funds III and John Hancock Trust (since June 2007); Director,
Executive Vice President and Chief Financial Officer, the Adviser, The Berkeley Group and John Hancock
Funds, LLC (2005–2007); Executive Vice President and Chief Financial Officer, John Hancock Investment
Management Services, LLC (2005–2007); Executive Vice President and Chief Financial Officer, MFC
Global (U.S.) (2005 until August 2007); Director, John Hancock Signature Services, Inc. (since 2005);
Chief Financial Officer, John Hancock Funds, John Hancock Funds II, John Hancock Funds III and John
Hancock Trust (2005 until June 2007); Vice President and General Manager, John Hancock Fixed
Annuities, U.S. Wealth Management (2004–2005); Vice President, Operations, Manulife Wood Logan
(2000–2004).

The business address for all Trustees and Officers is 601 Congress Street, Boston, Massachusetts 02210-2805.

The Statement of Additional Information of the Fund includes additional information about members of the Board of Trustees of the Fund and is available without charge, upon request, by calling 1-800-225-5291.

¹ Each Trustee serves until resignation, retirement age or until his or her successor is elected.

² Member of Audit and Compliance Committee.

³ Non-Independent Trustee holds positions with the Fund’s investment adviser, underwriter and certain other affiliates.

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For more information

The Fund’s proxy voting policies, procedures and records are available without charge, upon request:

By phone	On the Fund’s Web site	On the SEC’s Web site
1-800-225-5291	www.jhfunds.com/proxy	www.sec.gov
Investment adviser	Custodian	Legal counsel
John Hancock Advisers, LLC	State Street Bank & Trust Co.	Kirkpatrick & Lockhart
601 Congress Street	2 Avenue de Lafayette	Preston Gates Ellis LLP
Boston, MA 02210-2805	Boston, MA 02111	One Lincoln Street
		Boston, MA 02111-2950
Subadviser	Transfer agent
Grantham, Mayo,	John Hancock Signature	Independent registered
Van Otterloo & Co. LLC	Services, Inc.	public accounting firm
40 Rowes Wharf	P.O. Box 9510	PricewaterhouseCoopers LLP
Boston, MA 02110	Portsmouth, NH 03802-9510	125 High Street
		Boston, MA 02110
Principal distributor
John Hancock Funds, LLC
601 Congress Street
Boston, MA 02210-2805

How to contact us
Internet	www.jhfunds.com
Mail	Regular mail:	Express mail:
	John Hancock Signature	John Hancock Signature
	Services, Inc.	Services, Inc.
	P.O. Box 9510	Mutual Fund Image Operations
	Portsmouth, NH 03802-9510	164 Corporate Drive
		Portsmouth, NH 03801
Phone	Customer service representatives	1-800-225-5291
	EASI-Line	1-800-338-8080
	TDD line	1-800-554-6713

A listing of month-end portfolio holdings is available on our Web site, www.jhfunds.com. A more detailed portfolio holdings summary is available on a quarterly basis 60 days after the fiscal quarter on our Web site or upon request by calling 1-800-225-5291, or on the SEC’s Web site, www.sec.gov.

Annual report | U.S. Core Fund

43

1-800-225-5291
1-800-554-6713 TDD
1-800-338-8080 EASI-Line
www.jhfunds.com

Now available:electronicdelivery www.jhfunds. com/edelivery

This report is for the information of the shareholders of John Hancock U.S. Core Fund.	6500A	2/08
It is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus.		4/08

Discussion of Fund performance

By Grantham, Mayo, Van Otterloo & Co. LLC (GMO)

The year ended February 29, 2008, was a challenging one for international markets. While foreign stocks continued to outperform U.S. equities, share prices weakened notably in the final four months of the period, as a slew of unfavorable economic and corporate earnings data built a convincing case that a serious U.S.-centered slowdown was, in fact, occurring, and that the fallout from the subprime mortgage crisis was by no means as contained as investors had previously hoped. Against this backdrop, the MSCI EAFE Net Total Return Index returned 0.84%, while the average foreign large value fund monitored by Morningstar Inc. gained –1.23% .

“The year ended February 29,
2008, was a challenging one for
international markets. “

During the past year, John Hancock International Core Fund’s Class A, Class B, Class C, Class I, Class R1, Class 1 and Class NAV shares returned –0.76%, –1.48%, –1.48%, –0.33%, –0.82%, –0.25% and –0.20%, respectively, at net asset value. During this period, the Fund’s momentum criteria worked better than its valuation parameters.

Among countries, the Fund received its biggest boosts from Canada, Italy and Japan. The largest Canada-based contributor was fertilizer maker Potash Corp. of Saskatchewan, Inc. Another Canadian standout was Research In Motion, Ltd. (RIM), maker of the popular BlackBerry handheld messaging device. Other contributors included U.K.-based Rio Tinto PLC, a mining company, and Dutch bank ABM AMRO Holding N.V. Not owning benchmark component UBS AG, a Swiss bank hurt by the subprime mortgage crisis, was beneficial as well. Conversely, the Fund’s two largest detractors were U.K. holdings: Royal Bank of Scotland Group PLC and drug stock GlaxoSmithKline PLC. Another drug holding, France-based Sanofi-Aventis SA, struggled despite what we considered an attractive valuation. Underweighting strong-performing Australian mining stock BHP Billiton, Ltd. and overweighting Japanese automaker Honda Motor Company, Ltd. further hurt performance.

This commentary reflects the views of the portfolio management team through the end of the Fund’s period discussed in this report. The team’s statements reflect their own opinions. As such, they are in no way guarantees of future events and are not intended to be used as investment advice or a recommendation regarding any specific security. They are also subject to change at any time as market and other conditions warrant.

International Core Fund | Annual report

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A look at performance

For the periods ended February 29, 2008

		Average annual returns				Cumulative total returns
		with maximum sales charge (POP)				with maximum sales charge (POP)
	Inception				Since				Since
Class	date	1-year	5-year	10-year	inception	1-year	5-year	10-year	inception
A1,2	9-16-05	–5.72%	—	—	10.00%	–5.72%	—	—	26.33%
B	6-12-06	–5.99	—	—	8.57	–5.99	—	—	15.22
C	6-12-06	–2.38	—	—	10.75	–2.38	—	—	19.25
I3	6-12-06	–0.33	—	—	12.01	–0.33	—	—	21.58
R13	6-12-06	–0.82	—	—	11.33	–0.82	—	—	20.32
13	11-6-06	–0.25	—	—	5.91	–0.25	—	—	7.84
NAV3	8-29-06	–0.20	—	—	7.63	–0.20	—	—	11.68

Performance figures assume all distributions are reinvested. Public offering price (POP) figures reflect maximum sales charge on Class A shares of 5%, and the applicable contingent deferred sales charge (CDSC) on Class B and Class C shares. The Class B shares’ CDSC declines annually between years 1 to 6 according to the following schedule:5, 4, 3, 3, 2, 1%. No sales charge will be assessed after the sixth year. Class C shares held for less than one year are subject to a 1% CDSC. Sales charge is not applicable for Class I, Class R1, Class 1 and Class NAV shares.

The expense ratios of the Fund, both net (including any fee waivers or expense limitations) and gross (excluding any fee waivers or expense limitations), are set forth according to the most recent publicly available prospectuses for the Fund and may differ from the expense ratios disclosed in the Financial Highlights tables in this report. The waivers and expense limitations are contractual at least until 6-30-08. The net expenses are as follows:Class A — 1.61%, Class B — 2.39%, Class C — 2.39%, Class I — 1.20%, Class R1 — 1.94%, Class 1 — 1.14% . Had the fee waivers and expense limitations not been in place, the gross expenses would be as follows:Class A — 2.23%, Class B — 6.83%, Class C — 3.72%, Class I — 12.52%, Class R1 — ; 20.40%, Class 1 — 1.23% . For Class NAV, the net expense equals the gross expense and is 1.08% .

The returns reflect past results and should not be considered indicative of future performance. The return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, the Fund’s current performance may be higher or lower than the performance shown. For performance data current to the most recent month end, please call 1-800-225-5291 or visit the Fund’s Web site at www.jhfunds.com.

The performance table above and the chart on the next page do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

The Fund’s performance results reflect any applicable expense reductions, without which the expenses increase and results would have been less favorable.

Performance is calculated with an opening price (prior day’s close) on the inception date.

¹ Effective June 12, 2006, shareholders of the former GMO International Disciplined Equity Fund (the Predecessor Fund) became owners of that number of full and fractional shares of John Hancock International Core Fund Class A. Additionally, the accounting and performance history of the former GMO International Disciplined Equity Fund was redesignated as that of John Hancock International Core Fund Class A.

² Class A performance linked back to the Predecessor Fund.

³ For certain types of investors as described in the Fund’s Class I, Class R1, Class 1 and Class NAV share prospectuses.

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A look at performance

Growth of $10,000

This chart shows what happened to a hypothetical $10,000 investment in International Core Fund Class A¹ shares for the period indicated. For comparison, we’ve shown the same investment in the MSCI EAFE Net Total Return Index.

			With maximum
Class	Period beginning	Without sales charge	sales charge	Index
B	6-12-06	$11,922	$11,522	$12,254
C3	6-12-06	11,925	11,925	12,254
I4	6-12-06	12,158	12,158	12,254
R14	6-12-06	12,032	12,032	12,254
14	11-6-06	10,784	10,784	10,893
NAV4	8-29-06	11,168	11,168	11,399

Assuming all distributions were reinvested for the period indicated, the table above shows the value of a $10,000 investment in the Fund’s Class B, Class C, Class I, Class R1, Class 1 and Class NAV shares, respectively, as of February 29, 2008. Performance of the classes will vary based on the difference in sales charges paid by shareholders investing in the different classes and the fee structure of those classes.

MSCI EAFE Net Total Return Index(Europe, Australasia, Far East) is a free float-adjusted market capitalization index is designed to measure developed market equity performance, excluding the U.S. and Canada. As of June 2006, the MSCI EAFE Index consisted of the following 21 developed market country indexes:Australia, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland and United Kingdom. Returns are calculated and presented net of withholding tax.

It is not possible to invest directly in an index. Index figures do not reflect sales charges, which would have resulted in lower values if they did.

¹ Class A performance linked back to the Predecessor Fund.

² NAV represents net asset value and POP represents public offering price.

³ No contingent deferred sales charge applicable.

⁴ For certain types of investors as described in the Fund’s Class I, Class R1, Class 1 and Class NAV share prospectuses.

International Core Fund | Annual report

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Your expenses

These examples are intended to help you understand your ongoing operating expenses.

Understanding fund expenses

As a shareholder of the Fund, you incur two types of costs:

■ Transaction costs which include sales charges (loads) on purchases or redemptions (varies by share class), minimum account fee charge, etc.

■ Ongoing operating expenses including management fees, distribution and service fees (if applicable), and other fund expenses.

We are going to present only your ongoing operating expenses here.

Actual expenses/actual returns

This example is intended to provide information about your fund’s actual ongoing operating expenses, and is based on your fund’s actual return. It assumes an account value of $1,000.00 on September 1, 2007, with the same investment held until February 29, 2008.

	Account value	Ending value	Expenses paid during period
	on 9-1-07	on 2-29-08	on 2-29-081
Class A	$1,000.00	$930.10	$7.87
Class B	1,000.00	926.66	11.54
Class C	1,000.00	926.90	11.50
Class I	1,000.00	932.30	5.67
Class R1	1,000.00	931.03	7.06
Class 1	1,000.00	932.47	5.48
Class NAV	1,000.00	932.87	5.19

Together with the value of your account, you may use this information to estimate the operating expenses that you paid over the period. Simply divide your account value at February 29, 2008, by $1,000.00, then multiply it by the “expenses paid” for your share class from the table above. For example, for an account value of $8,600.00, the operating expenses should be calculated as follows:

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9

Your expenses

Hypothetical example for comparison purposes

This table allows you to compare your fund’s ongoing operating expenses with those of any other fund. It provides an example of the Fund’s hypothetical account values and hypothetical expenses based on each class’s actual expense ratio and an assumed 5% annualized return before expenses (which is not your fund’s actual return). It assumes an account value of $1,000.00 on September 1, 2007, with the same investment held until February 29, 2008. Look in any other fund shareholder report to find its hypothetical example and you will be able to compare these expenses.

	Account value	Ending value	Expenses paid during period
	on 9-1-07	on 2-29-08	on 2-29-081
Class A	$1,000.00	$1,016.71	$8.22
Class B	1,000.00	1,012.88	12.06
Class C	1,000.00	1,012.93	12.01
Class I	1,000.00	1,019.00	5.92
Class R1	1,000.00	1,017.55	7.37
Class 1	1,000.00	1,019.19	5.72
Class NAV	1,000.00	1,019.49	5.42

Remember, these examples do not include any transaction costs, such as sales charges; therefore, these examples will not help you to determine the relative total costs of owning different funds. If transaction costs were included, your expenses would have been higher. See the prospectus for details regarding transaction costs.

¹ Expenses are equal to the Fund’s annualized expense ratio of 1.64%, 2.41%, 2.40%, 1.18%, 1.47%, 1.14% and 1.08% for Class A, Class B, Class C, Class I, Class R1, Class 1 and Class NAV, respectively, multiplied by the average account value over the period, multiplied by the number of days in most recent fiscal half year/366 (to reflect the one-half year period).

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Portfolio summary

Top 10 holdings1
GlaxoSmithKline PLC	3.6%	Eni SpA	2.6%
Vodafone Group PLC	3.4%	Novartis AG	2.3%
Total SA	3.2%	Rio Tinto PLC	1.7%
Nokia AB Oyj	3.0%	Royal Bank of Scotland Group PLC	1.6%
Sanofi-Aventis SA	2.8%	ING Groep NV	1.4%
Sector distribution1
Consumer non-cyclical	16%	Basic materials	9%
Financial	14%	Industrial	8%
Consumer cyclical	12%	Utilities	4%
Energy	11%	Technology	2%
Communications	10%	Other	14%

¹As a percentage of net assets on February 29, 2008.

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11

F I N A N C I A L  S T A T E M E N T S

Fund’s investments

Securities owned by the Fund on 2-29-08

This schedule is divided into four main categories: common stocks, preferred stocks, short-term investments and repurchase agreements. Common stocks and preferred stocks are further broken down by country. Repurchase agreements, which represent the Fund’s cash position, are listed last.

Issuer	Shares	Value
Common stocks 94.10%		$1,558,995,008
(Cost $1,499,281,583)
Australia 4.85%		80,272,886
Australia and New Zealand Banking Group, Ltd. (a)	237,471	4,792,014
Australian Stock Exchange, Ltd.	24,466	940,659
BHP Billiton, Ltd.	322,683	11,675,552
Bluescope Steel, Ltd. (a)	321,766	3,218,669
CSL, Ltd. (a)	127,523	4,277,047
Fortescue Metals Group, Ltd. *	150,679	1,068,151
Foster’s Group, Ltd. (a)	346,465	1,706,984
Incitec Pivot, Ltd.	6,922	940,161
Leighton Holdings, Ltd. (a)	56,306	2,360,403
Macquarie Group, Ltd. (a)	21,259	1,061,683
Mirvac Group, Ltd.	596,676	2,115,061
Newcrest Mining, Ltd.	76,164	2,647,957
Qantas Airways, Ltd. (a)	300,772	1,169,781
QBE Insurance Group, Ltd.	40,666	841,125
Stockland Company, Ltd. (a)	750,276	4,855,452
Suncorp-Metway, Ltd. (a)	439,159	5,633,631
TABCORP Holdings, Ltd. (a)	226,226	3,189,167
Telstra Corp., Ltd. (a)	1,313,330	5,903,919
Westpac Banking Corp., Ltd. (a)	284,859	6,092,743
Woodside Petroleum, Ltd. (a)	191,463	10,011,878
Woolworths, Ltd.	153,635	4,103,146
Zinifex, Ltd.	165,755	1,667,703
Austria 0.12%		2,011,145
OMV AG	27,834	2,011,145
Belgium 1.16%		19,159,339
Belgacom SA	24,874	1,191,266
Colruyt SA	3,066	749,170
Delhaize Group	10,889	824,651
Dexia (a)	271,408	6,380,839
Fortis Group SA	340,709	7,527,067
Solvay SA (a)	8,778	1,103,141
UCB SA	29,180	1,383,205

See notes to financial statements

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F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
Canada 3.05%		$50,612,527
Barrick Gold Corp.	33,100	1,721,839
BCE, Inc.	50,388	1,826,101
Canadian Imperial Bank of Commerce	50,470	3,424,832
Canadian Natural Resources, Ltd.	45,537	3,412,557
Canadian Pacific Railway, Ltd.	11,500	835,875
EnCana Corp.	83,497	6,365,029
Magna International, Inc.	30,600	2,244,052
National Bank of Canada (a)	83,465	4,119,614
Potash Corp. of Saskatchewan, Inc.	86,100	13,688,522
Research In Motion, Ltd. *	99,300	10,344,149
Sun Life Financial, Inc.	54,900	2,629,957
Denmark 0.49%		8,117,656
A P Moller Maersk AS, Series A	87	897,996
FLS Industries AS, B Shares	29,550	2,758,987
Novo Nordisk AS	32,900	2,250,635
Vestas Wind Systems AS *	21,800	2,210,038
Finland 4.20%		69,583,976
Fortum Corp. Oyj	95,228	3,976,022
Metra Oyj, B Shares	19,800	1,353,458
Neste Oil Oyj (a)	82,084	2,872,050
Nokia AB Oyj	1,358,607	48,811,467
Outokumpu Oyj (a)	91,904	3,485,826
Rautaruukki Oyj (a)	81,209	3,540,742
Sampo Oyj, A Shares	204,287	5,544,411
France 10.01%		165,911,053
Air Liquide	11,615	1,643,792
Alstom	37,500	7,880,981
BNP Paribas SA	114,165	10,206,345
Bouygues SA	35,943	2,454,913
Casino Guich-Perrachon SA	34,335	3,883,537
Compagnie de Saint-Gobain SA	34,715	2,713,826
Compagnie Generale des Etablissements Michelin, Class B	15,410	1,517,736
Credit Agricole SA	33,770	916,006
Electricite de France	20,271	1,890,676
Essilor International SA	21,430	1,272,466
France Telecom SA	266,145	8,934,247
Hermes International SA	11,601	1,357,711
L’Oreal SA	21,622	2,565,922
Pernod-Ricard SA	14	1,481
PSA Peugeot Citroen SA	114,059	8,670,677
Renault Regie Nationale SA	48,565	5,188,999
Sanofi-Aventis SA	624,670	46,170,980
Societe Generale NV — New Shares*	10,582	1,162,790
Societe Generale	42,330	4,529,280
Total SA	703,132	52,948,688

See notes to financial statements

Annual report | International Core Fund

13

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
Germany 8.16%		$135,115,941
Adidas-Salomon AG	48,679	3,088,967
Allianz AG	21,271	3,682,646
BASF AG	95,384	12,136,584
Bayer AG	74,877	5,765,891
Bayerische Motoren Werke (BMW) AG	89,416	4,901,199
DaimlerChrysler AG (a)	161,050	13,517,845
Deutsche Bank AG	23,480	2,622,216
Deutsche Boerse AG	43,796	6,941,903
Deutsche Post AG	33,698	1,121,080
E.ON AG	69,370	13,037,597
K&S AG	14,071	4,094,299
Linde AG	14,299	1,902,475
MAN AG	35,314	4,648,369
Muenchener Rueckversicherungs-Gesellschaft AG	45,388	7,999,051
Q-Cells AG * (a)	34,896	2,803,785
RWE AG	36,306	4,391,000
Salzgitter AG	33,438	5,900,353
SAP AG	138,410	6,622,290
Siemens AG	72,334	9,313,734
Suedzucker AG (a)	49,851	1,095,980
Thyssen Krupp AG	99,321	5,713,189
Volkswagen AG	50,084	11,384,133
Wacker Chemie AG	11,397	2,431,355
Greece 0.13%		2,126,037
National Bank of Greece SA	39,238	2,126,037
Hong Kong 1.91%		31,677,154
CLP Holdings, Ltd. (a)	1,140,199	8,913,084
Esprit Holdings, Ltd.	179,000	2,233,782
Hang Seng Bank, Ltd.	59,700	1,131,516
Henderson Land Development Company, Ltd.	133,000	1,032,584
Hong Kong & China Gas Company, Ltd.	334,000	964,165
Hong Kong Electric Holdings, Ltd. (a)	873,854	4,915,395
Hong Kong Exchange & Clearing, Ltd.	346,500	6,586,829
Noble Group, Ltd. (a)	518,361	811,245
Sun Hung Kai Properties, Ltd.	230,000	4,022,502
Yue Yuen Industrial Holdings, Ltd. (a)	360,218	1,066,052
Ireland 0.49%		8,111,452
Bank of Ireland	113,392	1,595,113
CRH PLC	146,326	5,438,291
Kerry Group PLC	34,358	1,078,048

See notes to financial statements

International Core Fund | Annual report

14

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
Italy 3.09%		$51,214,190
Enel SpA	310,819	3,353,848
Eni SpA	1,254,342	43,313,919
Fiat SpA, RNC	39,512	660,327
Fondiaria-Sai SpA	20,600	626,974
Italcementi SpA, RNC	36,738	558,724
Luxottica Group SpA (a)	46,514	1,281,405
Mediaset SpA	157,127	1,418,993
Japan 19.90%		329,764,519
Acom Company, Ltd.	41,180	1,191,122
Aisin Seiki Company (a)	24,000	955,976
Alps Electric Company, Ltd. (a)	46	538
Asahi Breweries, Ltd.	53,200	994,414
Astellas Pharmaceuticals, Inc.	62,400	2,727,239
Cosmo Oil Company, Ltd. (a)	421,000	1,391,180
Daiichi Sankyo Company, Ltd.	201,053	6,239,374
Daikin Industries, Ltd.	101,000	4,544,745
Dena Company, Ltd. *	165	1,069,140
Denso Corp.	42,800	1,597,789
Eisai Company, Ltd.	56,280	2,029,705
Fanuc, Ltd.	26,100	2,433,272
Fast Retailing Company, Ltd. (a)	31,100	2,297,431
Fuji Heavy Industries, Ltd.	340,116	1,483,747
Haseko Corp. * (a)	130,847	197,350
Hitachi, Ltd.	384,000	2,782,394
Hokkaido Electric Power Company, Inc.	88,699	1,986,261
Honda Motor Company, Ltd.	633,812	19,347,316
Hoya Corp.	122,700	3,113,259
Ibiden Company, Ltd.	44,500	2,124,910
Inpex Holdings, Inc.	145	1,629,150
Isuzu Motors, Ltd.	141,542	644,545
Itochu Corp.	1,053,047	11,088,953
Japan Real Estate Investment Corp., REIT (a)	126	1,402,139
JFE Holdings, Inc.	90,800	4,045,846
Kao Corp. (a)	150,050	4,619,710
Kawasaki Kisen Kaisha, Ltd. (a)	593,000	6,015,400
Keyence Corp.	9,100	2,123,311
Komatsu, Ltd.	215,100	5,464,503
Konami Corp. (a)	51,323	1,699,449
Konica Minolta Holdings, Inc.	177,500	2,514,669
Kyushu Electric Power Company, Inc.	87,580	2,206,647
Marubeni Corp.	992,824	7,516,767
Matsushita Electric Industrial Company, Ltd.	111,000	2,337,814
Mitsubishi Corp.	519,095	15,837,829
Mitsubishi Electric Corp.	255,000	2,335,661

See notes to financial statements

Annual report | International Core Fund

15

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
Japan (continued)
Mitsubishi Estate Company, Ltd.	81,404	$1,983,854
Mitsui & Company, Ltd.	523,560	11,386,084
Mitsui O.S.K. Lines, Ltd.	399,000	5,182,162
Mitsui Trust Holdings, Inc.	675,553	4,656,880
Mitsumi Electric Company, Ltd. (a)	32,300	1,003,774
Murata Manufacturing Company, Ltd.	23,500	1,275,062
NGK INSULATORS, LTD. (a)	109,000	2,475,162
Nidec Corp.	15,600	1,033,739
Nikon Corp. (a)	119,000	3,333,191
Nintendo Company, Ltd.	32,900	16,380,754
Nippon Building Fund, Inc., REIT	137	1,685,509
Nippon Mining Holdings, Inc.	535,000	3,168,724
Nippon Oil Corp.	812,000	5,539,199
Nippon Steel Corp.	546,000	2,872,614
Nippon Telegraph & Telephone Corp.	1,565	6,824,548
Nippon Yusen Kabushiki Kaisha (a)	503,000	4,647,932
Nissan Motor Company, Ltd.	1,261,500	11,344,634
Nitto Denko Corp.	19,100	929,943
Nomura Research Institute, Ltd. (a)	40,700	1,159,180
NTT DoCoMo, Inc.	5,794	8,488,613
Olympus Optical Company, Ltd. (a)	48,000	1,405,518
Osaka Gas Company, Ltd.	1,740,120	6,981,967
Resona Holdings, Inc. (a)	4,188	6,774,150
Ricoh Company, Ltd.	257,000	4,127,452
Rohm Company, Ltd.	12,700	926,281
SBI Holdings, Inc. (a)	7,172	1,756,482
Secom Company, Ltd. (a)	22,100	1,114,481
SEGA SAMMY HOLDINGS, INC. (a)	208,300	2,298,201
Seven & I Holdings Company, Ltd. (a)	388,700	9,665,126
Shin-Etsu Chemical Company, Ltd.	153,800	8,300,022
Shinko Securities Company, Ltd.	196,000	672,668
Shiseido Company, Ltd.	41,000	934,345
Showa Shell Sekiyu K.K. (a)	158,800	1,611,063
Sojitz Holdings Corp.	1,326,000	4,970,544
Sony Corp.	69,000	3,259,780
Sumco Corp.	124,700	2,757,567
Sumitomo Chemical Company, Ltd.	182,000	1,259,863
Sumitomo Corp.	328,596	4,725,601
Sumitomo Electric Industries, Ltd.	68,200	1,009,225
Taisho Pharmaceuticals Company, Ltd.	44,790	912,747
Takeda Pharmaceutical Company, Ltd.	256,189	14,295,090
Takefuji Corp. (a)	118,290	2,987,773
TDK Corp.	51,600	3,667,867
Terumo Corp.	50,200	2,725,726
The Japan Steel Works, Ltd. (a)	166,000	2,697,637

See notes to financial statements

International Core Fund | Annual report

16

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
Japan (continued)
The Tokyo Electric Power Company, Ltd.	79,439	$2,040,951
Tokyo Gas Company, Ltd.	469,397	2,105,610
Tokyu Land Corp.	164,000	1,105,371
TonenGeneral Sekiyu K.K. (a)	121,133	1,149,972
Toshiba Corp.	408,000	3,060,298
Yahoo Japan Corp.	3,260	1,449,407
Yamada Denki Company, Ltd.	18,920	1,654,621
Luxembourg 0.69%		11,386,156
ArcelorMittal	149,959	11,386,156
Netherlands 3.78%		62,638,592
Aegon NV	665,325	9,936,252
DSM NV	59,695	2,626,963
Heineken Holding NV	28,268	1,437,191
Heineken NV	138,273	7,798,665
ING Groep NV	672,195	22,338,189
Reed Elsevier NV	219,299	4,074,150
Royal Dutch Shell PLC, A Shares EUR	327,014	11,693,875
TNT Post Group NV	37,942	1,494,249
TomTom NV * (a)	26,440	1,239,058
Norway 0.59%		9,794,032
Den Norske Bank ASA	97,700	1,429,116
Statoil ASA	274,518	8,364,916
Singapore 2.04%		33,724,663
Capitaland, Ltd. *	280,000	1,237,052
City Developments, Ltd.	72,000	604,278
Cosco Corp. Singapore, Ltd.	908,600	2,577,690
K-REIT Asia *	46,908	55,148
Neptune Orient Lines, Ltd. (a)	577,488	1,262,014
Oversea-Chinese Banking Corp., Ltd.	643,000	3,468,687
SembCorp Industries, Ltd.	396,802	1,334,181
SembCorp Marine, Ltd. (a)	1,157,573	2,964,554
Singapore Exchange, Ltd. (a)	437,000	2,542,745
Singapore Press Holdings, Ltd. (a)	769,000	2,396,267
Singapore Telecommunications, Ltd.	4,146,350	11,218,964
United Overseas Bank, Ltd.	193,000	2,447,118
Wilmar International, Ltd. (a)	522,000	1,615,965
Spain 1.92%		31,785,689
Gas Natural SDG SA	39,851	2,414,716
Iberdrola SA	246,931	3,566,379
Industria de Diseno Textil SA	55,517	2,862,103
Repsol YPF SA	259,557	8,953,851
Telefonica SA	483,424	13,988,640

See notes to financial statements

Annual report | International Core Fund

17

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
Sweden 1.26%		$20,952,916
Hennes & Mauritz AB, B shares (a)	98,450	5,521,877
Investor AB, B shares (a)	287,600	6,083,440
Scania AB, Series B *	120,100	2,897,454
SKF AB, B Shares * (a)	115,600	2,126,084
Svenska Handelsbanken AB, Series A (a)	67,100	1,869,327
Swedbank AB, A shares (a)	51,400	1,389,231
Tele2 AB, Series B	60,620	1,065,503
Switzerland 5.92%		98,002,005
ABB, Ltd. (a)	418,546	10,427,777
Compagnie Financiere Richemont AG, Series A *	57,283	3,316,037
Nestle SA	39,327	18,770,316
Novartis AG (a)	768,587	37,962,657
Roche Holdings AG — Genusschein	38,903	7,629,204
Swatch Group AG, BR shares	8,824	2,590,062
Swiss Re	66,385	5,320,983
Syngenta AG *	8,817	2,534,970
Synthes AG (a)	7,112	996,686
Zurich Financial Services AG	27,041	8,453,313
United Kingdom 20.34%		337,033,080
3i Group PLC	393,174	6,354,379
Alliance & Leicester PLC	95,433	1,058,410
AMEC PLC	179,435	2,737,169
Antofagasta PLC	110,784	1,765,708
Associated British Foods PLC	61,455	1,029,743
AstraZeneca Group PLC	509,680	19,050,494
Aviva PLC	315,781	3,806,239
Barclays PLC	700,199	6,562,476
BG Group PLC	587,891	13,857,180
BHP Billiton PLC	357,187	11,426,454
Biffa PLC	111	762
British American Tobacco PLC	93,057	3,489,332
Cadbury Schweppes PLC	162,871	1,812,945
Capita Group PLC *	179,156	2,321,384
Centrica PLC	70,541	450,384
Diageo PLC	188,305	3,847,987
GlaxoSmithKline PLC	2,749,055	60,008,031
HBOS PLC	654,888	7,782,025
Home Retail Group	553,425	2,826,932
ICAP PLC	78,176	973,407
Imperial Tobacco Group PLC	151,536	7,014,950
International Power PLC	330,279	2,481,328
Kingfisher PLC	512,023	1,321,736
Ladbrokes PLC	311,943	1,873,179
London Stock Exchange Group PLC	31,494	844,562

See notes to financial statements

International Core Fund | Annual report

18

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
United Kingdom (continued)
Next Group PLC	102,537	$2,600,527
Old Mutual PLC	1,139,012	2,813,439
Reckitt Benckiser PLC	76,953	4,150,931
Reed Elsevier PLC * (a)	146,035	1,837,981
Reuters Group PLC	215,756	2,548,080
Rio Tinto PLC	252,295	28,385,070
Royal Bank of Scotland Group PLC	3,419,466	25,852,923
Royal Dutch Shell PLC, A Shares, GBP	440,387	15,746,641
Royal Dutch Shell PLC, B Shares, GBP	162,810	5,711,679
SABMiller PLC	68,926	1,431,984
Scottish & Southern Energy PLC	121,440	3,550,987
Smith & Nephew PLC	106,314	1,381,351
Taylor Woodrow PLC	890,383	3,012,914
Tesco PLC	417,399	3,298,446
The Sage Group PLC	192,857	751,838
Tullow Oil PLC	84,957	1,053,155
Unilever PLC	154,381	4,863,964
United Utilities PLC	149,177	2,042,710
Vedanta Resources PLC	40,711	1,751,436
Vodafone Group PLC	17,589,501	56,628,722
Wolseley PLC	238,710	2,921,106
Preferred stocks 0.51%		$8,385,319
(Cost $5,866,028)
Germany 0.51%		8,385,319
Bayerische Motoren Werke (BMW) AG	10,400	481,090
Porsche Automobil Holding SE	2,297	3,937,016
Volkswagen AG	28,509	3,967,213
	Principal
	amount
Short-term investments 12.17%		$201,621,129
(Cost $201,621,129)
John Hancock Cash Investment Trust, 3.5681% (c)(f)	$201,621,129	201,621,129

See notes to financial statements

Annual report | International Core Fund

19

F I N A N C I A L  S T A T E M E N T S

	Principal
Issuer	amount	Value
Repurchase agreements 4.11%		$68,140,000
(Cost $68,140,000)
Repurchase Agreement with State Street Corp. dated 2-29-08
at 2.35% to be repurchased at $68,153,344 on 3-3-08,
collateralized by $69,245,000 Federal National Mortgage
Association, 6.30%, due 12-21-26 (valued at $69,504,669,
including interest)	$68,140,000	68,140,000
Total investments (Cost $1,774,908,740)† 110.89%		$1,837,141,456
Liabilities in excess of other assets (10.89%)		($180,483,109)
Total net assets 100.00%		$1,656,658,347

Percentages are stated as a percent of net assets.

The portfolio had the following five top industry concentrations as of February 29, 2008 (as a percentage of total net assets):

Telecommunications equipment & services	9.44%
International oil	9.02%
Pharmaceuticals	8.46%
Banking	6.31%
Automobiles	5.34%

ADR American Depositary Receipt

PLC Public Limited Company

REIT Real Estate Investment Trust

SBI Shares Beneficial Interest

* Non-income producing.

(a) All or a portion of this security was out on loan.

(c) Investment is an affiliate of the Trust’s adviser or subadviser.

(f) John Hancock Cash Investment Trust is managed by MFC Global Investment Management (U.S.), LLC. The rate shown is the seven-day effective yield at period end.

† At February 29, 2008, the aggregate cost of investment securities for federal income tax purposes was $1,777,068,135. Net unrealized appreciation aggregated $60,073,321, of which $183,406,564 related to appreciated investment securities and $123,333,243 related to depreciated investment securities.

See notes to financial statements

International Core Fund | Annual report

20

F I N A N C I A L  S T A T E M E N T S

Financial statements

Statement of assets and liabilities 2-29-08

This Statement of Assets and Liabilities is the Fund’s balance sheet. It shows the value of what the Fund owns, is due and owes. You’ll also find the net asset value and the maximum public offering price per share.

Assets
Investments in unaffiliated issuers, at value (cost $1,505,147,611)
including $192,020,123 of securities loaned (Note 2)	$1,567,380,327
Repurchase agreement, at value (cost $68,140,000) (Note 2)	68,140,000
Investments in affiliated issuers, at value (cost $201,621,129) (Note 2)	201,621,129
Total investments, at value (cost $1,774,908,740)	1,837,141,456
Cash	738
Foreign currency, at value (cost $521,164)	532,556
Cash collateral at broker for futures contracts	20,700,000
Receivable for forward foreign currency exchange contracts (Note 2)	11,555,061
Receivable for fund shares sold	227,456
Dividends and interest receivable (net of tax)	4,369,698
Receivable for security lending income	88,934
Receivable due from adviser	109,253
Other assets	14,208
Total assets	1,874,739,360
Liabilities
Payable for investments purchased	763,518
Payable for forward foreign currency exchange contracts (Note 2)	6,277,161
Payable for fund shares repurchased	6,904,658
Payable upon return of securities loaned (Note 2)	201,621,129
Payable for futures variation margin	1,468,547
Payable to affiliates
Fund administration fees	30,899
Transfer agent fees	88,686
Distribution and service fees	50,184
Trustees’ fees	4,530
Other payables and accrued expenses	871,701
Total liabilities	218,081,013
Net assets
Capital paid-in	$1,556,886,295
Undistributed net investment income	14,685,496
Accumulated undistributed net realized gain (loss) on investments,
futures contracts and foreign currency transactions	30,809,644
Net unrealized appreciation (depreciation) on investments,
futures contracts, and translation of assets and liabilities in foreign currencies	54,276,912
Net assets	$1,656,658,347

See notes to financial statements

Annual report | International Core Fund

21

F I N A N C I A L  S T A T E M E N T S

Statement of assets and liabilities (continued)

Net asset value per share
The Fund has an unlimited number of shares authorized with no par value.
Net asset value is calculated by dividing the net assets of each class of
shares by the number of outstanding shares in the class.
Class A
Net assets	$130,075,228
Shares outstanding	3,329,870
Net asset value and redemption price per share	$39.06
Class B1
Net assets	$19,563,497
Shares outstanding	504,201
Net asset value and offering price per share	$38.80
Class C1
Net assets	$15,386,093
Shares outstanding	396,486
Net asset value and offering price per share	$38.81
Class I
Net assets	$2,874,926
Shares outstanding	73,349
Net asset value, offering price and redemption price per share	$39.20
Class R1
Net assets	$164,876
Shares outstanding	4,235
Net asset value, offering price and redemption price per share	$38.942
Class 1
Net assets	$73,862,085
Shares outstanding	1,883,471
Net asset value, offering price and redemption price per share	$39.22
Class NAV
Net assets	$1,414,731,642
Shares outstanding	36,084,644
Net asset value, offering price and redemption price per share	$39.21
Maximum public offering price per share
Class A (net asset value per share ÷ 95%)3	$41.12

¹ Redemption price per share is equal to the net asset value less any applicable contingent deferred sales charge.

² Net assets and shares outstanding have been rounded for presentation purposes. The net asset value is as reported on February 29, 2008.

³ On single retail sales of less than $50,000. On sales of $50,000 or more and on group sales the offering price is reduced.

See notes to financial statements

International Core Fund | Annual report

22

F I N A N C I A L  S T A T E M E N T S

Statement of operations For the year ended 2-29-08

This 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.

Investment income
Dividends	$50,922,611
Interest	2,624,326
Securities lending	1,325,527
Income from affiliated issuers	221,730
Less foreign taxes withheld	(4,674,751)
Total investment income	50,419,443
Expenses
Investment management fees (Note 3)	14,353,461
Distribution and service fees (Note 3)	676,146
Transfer agent fees (Note 3)	270,229
Fund administration fees (Note 3)	546,691
Blue sky fees (Note 3)	91,680
Audit and legal fees	691,228
Printing and postage fees (Note 3)	47,455
Custodian fees	2,033,568
Trustees’ fees (Note 4)	102,117
Registration and filing fees	212,176
Miscellaneous	19,247
Total expenses	19,043,998
Less expense reductions (Note 3)	(422,236)
Net expenses	18,621,762
Net investment income	31,797,681
Realized and unrealized gain (loss)
Net realized gain (loss) on
Investments in unaffiliated issuers	140,187,611
Futures contracts	11,013,631
Foreign currency transactions	8,665,323
	159,866,565
Change in net unrealized appreciation (depreciation) of
Investments in unaffiliated issuers	(201,319,466)
Futures contracts	(13,608,559)
Translation of assets and liabilities in foreign currencies	3,955,638
	(210,972,387)
Net realized and unrealized gain (loss)	(51,105,822)
Increase (decrease) in net assets from operations	($19,308,141)

See notes to financial statements

Annual report | International Core Fund

23

F I N A N C I A L  S T A T E M E N T S

Statement of changes in net assets

These Statements of Changes in Net Assets show how the value of the Fund’s net assets has changed during the last two periods. The difference reflects earnings less expenses, any investment gains and losses, distributions, if any, paid to shareholders and the net of Fund share transactions.

	Year	Year
	ended	ended
	2-28-07	2-29-08
Increase (decrease) in net assets
From operations
Net investment income	$2,484,546	$31,797,681
Net realized gain (loss)	36,328,435	159,866,565
Change in net unrealized appreciation (depreciation)	101,813,528	(210,972,387)
Increase (decrease) in net assets resulting from operations	140,626,509	(19,308,141)
Distributions to shareholders
From net investment income
Class A	—	(1,428,621)
Class B	—	(84,722)
Class C	—	(64,270)
Class I	—	(34,527)
Class R1	—	(1,255)
Class 1	(56,793)	(1,180,905)
Class NAV	(986,755)	(20,701,580)
From net realized gain
Class A	(73,495)	(12,052,892)
Class B	(6,331)	(1,960,810)
Class C	(22,267)	(1,487,649)
Class I	(1,930)	(206,228)
Class R1	(1,056)	(10,954)
Class 1	(731,024)	(6,868,892)
Class NAV	(10,547,441)	(116,609,468)
Total distributions	(12,427,092)	(162,692,773)
From Fund share transactions (Note 6)	1,198,322,023	495,364,086
Total increase (decrease)	1,326,521,440	313,363,172
Net assets
Beginning of year	16,773,735	1,343,295,175
End of year	$1,343,295,175	$1,656,658,347
Undistributed net investment income (loss)	($4,292,153)	$14,685,496

See notes to financial statements

International Core Fund | Annual report

24

F I N A N C I A L  S T A T E M E N T S

Financial highlights

The Financial Highlights show how the Fund’s net asset value for a share has changed since the end of the previous period.

CLASS A SHARES
Period ended	2-28-061	2-28-072	2-29-08
Per share operating performance
Net asset value, beginning of period	$32.60	$36.26	$43.30
Net investment income (loss)3	0.19	0.63	0.35
Net realized and unrealized gain
(loss) on investments	3.47	6.79	(0.35)
Total from investment operations	3.66	7.42	—
Less distributions
From net investment income	—	—	(0.45)
From net realized gain	—	(0.38)	(3.79)
	—	(0.38)	(4.24)
Net asset value, end of period	$36.26	$43.30	$39.06
Total return4 (%)	11.235,6	20.486,7	(0.76)6
Ratios and supplemental data
Net assets, end of period (in millions)	$17	$12	$130
Ratios (as a percentage of average net assets):
Expenses before reductions	2.228	2.23	1.68
Expenses net of fee waivers, if any	0.558	1.40	1.65
Expenses net of all fee waivers and credits	0.558	1.40	1.65
Net investment income (loss)	1.238	1.58	0.78
Portfolio turnover (%)	225	37	509

¹ Class A shares began operations on 9-16-05.

² Effective June 12, 2006, shareholders of the former GMO International Disciplined Equity Fund (the Predecessor Fund) became owners of an equal number of full and fractional Class A shares of the John Hancock International Core Fund. Additionally, the accounting and performance history of the former GMO International Disciplined Equity Fund was redesignated as that of John Hancock International Core Fund Class A.

³ Based on the average of the shares outstanding.

⁴ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁵ Not annualized.

⁶ Assumes dividend reinvestment.

⁷ Class A returns linked back to the Predecessor Fund.

⁸ Annualized.

⁹ Excludes merger activity.

See notes to financial statements

Annual report | International Core Fund

25

F I N A N C I A L  S T A T E M E N T S

Financial highlights

CLASS B SHARES
Period ended	2-28-071	2-29-08
Per share operating performance
Net asset value, beginning of period	$35.92	$43.08
Net investment income (loss)2	(0.25)	— 3
Net realized and unrealized gain
(loss) on investments	7.79	(0.33)
Total from investment operations	7.54	(0.33)
Less distributions
From net investment income	—	(0.16)
From net realized gain	(0.38)	(3.79)
	(0.38)	(3.95)
Net asset value, end of period	$43.08	$38.80
Total return4,5 (%)	21.016	(1.48)
Ratios and supplemental data
Net assets, end of period (in millions)	$1	$20
Ratios (as a percentage of average net assets):
Expenses before reductions	6.837	2.48
Expenses net of fee waivers, if any	2.397	2.41
Expenses net of all fee waivers and credits	2.397	2.40
Net investment income (loss)	(0.84)7	— 8
Portfolio turnover (%)	376	509

¹ Class B shares began operations on 6-12-06.

² Based on the average of the shares outstanding.

³ Less than $0.01 per share.

⁴ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁵ Assumes dividend reinvestment.

⁶ Not annualized.

⁷ Annualized.

⁸ Less than 0.01% .

⁹ Excludes merger activity.

See notes to financial statements

International Core Fund | Annual report

26

F I N A N C I A L  S T A T E M E N T S

Financial highlights

CLASS C SHARES
Period ended	2-28-071	2-29-08
Per share operating performance
Net asset value, beginning of period	$35.92	$43.09
Net investment income (loss)2	(0.24)	0.13
Net realized and unrealized gain
(loss) on investments	7.79	(0.46)
Total from investment operations	7.55	(0.33)
Less distributions
From net investment income	—	(0.16)
From net realized gain	(0.38)	(3.79)
	(0.38)	(3.95)
Net asset value, end of period	$43.09	$38.81
Total return3,4 (%)	21.045	(1.48)
Ratios and supplemental data
Net assets, end of period (in millions)	$4	$15
Ratios (as a percentage of average net assets):
Expenses before reductions	3.726	2.49
Expenses net of fee waivers, if any	2.396	2.40
Expenses net of all fee waivers and credits	2.396	2.40
Net investment income (loss)	(0.79)6	0.28
Portfolio turnover (%)	375	507

¹ Class C shares began operations on 6-12-06.

² Based on the average of the shares outstanding.

³ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁴ Assumes dividend reinvestment.

⁵ Not annualized.

⁶ Annualized.

⁷ Excludes merger activity.

See notes to financial statements

Annual report | International Core Fund

27

F I N A N C I A L  S T A T E M E N T S

Financial highlights

CLASS I SHARES
Period ended	2-28-071	2-29-08
Per share operating performance
Net asset value, beginning of period	$35.92	$43.43
Net investment income (loss)2	0.16	0.55
Net realized and unrealized gain
(loss) on investments	7.73	(0.35)
Total from investment operations	7.89	0.20
Less distributions
From net investment income	—	(0.64)
From net realized gain	(0.38)	(3.79)
	(0.38)	(4.43)
Net asset value, end of period	$43.43	$39.20
Total return3,4 (%)	21.995	(0.33)
Ratios and supplemental data
Net assets, end of period (in millions)	— 6	$3
Ratios (as a percentage of average net assets):
Expenses before reductions	12.527	2.34
Expenses net of fee waivers, if any	1.207	1.18
Expenses net of all fee waivers and credits	1.207	1.18
Net investment income (loss)	0.567	1.24
Portfolio turnover (%)	375	508

¹ Class I shares began operations on 6-12-06.

² Based on the average of the shares outstanding.

³ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁴ Assumes dividend reinvestment.

⁵ Not annualized.

⁶ Less than $500,000.

⁷ Annualized.

⁸ Excludes merger activity.

See notes to financial statements

International Core Fund | Annual report

28

F I N A N C I A L  S T A T E M E N T S

Financial highlights

CLASS R1 SHARES
Period ended	2-28-071	2-29-08
Per share operating performance
Net asset value, beginning of period	$35.92	$43.19
Net investment income (loss)2	(0.03)	0.66
Net realized and unrealized gain
(loss) on investments	7.68	(0.69)
Total from investment operations	7.65	(0.03)
Less distributions
From net investment income	—	(0.43)
From net realized gain	(0.38)	(3.79)
	(0.38)	(4.22)
Net asset value, end of period	$43.19	$38.94
Total return3,4 (%)	21.325	(0.82)
Ratios and supplemental data
Net assets, end of period (in millions)	— 6	— 6
Ratios (as a percentage of average net assets):
Expenses before reductions	20.407	13.85
Expenses net of fee waivers, if any	1.947	1.70
Expenses net of all fee waivers and credits	1.947	1.70
Net investment income (loss)	(0.10)7	1.48
Portfolio turnover (%)	375	508

¹ Class R1 shares began operations on 6-12-06.

² Based on the average of the shares outstanding.

³ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁴ Assumes dividend reinvestment.

⁵ Not annualized.

⁶ Less than $500,000.

⁷ Annualized.

⁸ Excludes merger activity.

See notes to financial statements

Annual report | International Core Fund

29

F I N A N C I A L  S T A T E M E N T S

Financial highlights

CLASS 1 SHARES
Period ended	2-28-071	2-29-08
Per share operating performance
Net asset value, beginning of period	$40.56	$43.43
Net investment income (loss)2	0.02	0.95
Net realized and unrealized gain
(loss) on investments	3.26	(0.72)
Total from investment operations	3.28	0.23
Less distributions
From net investment income	(0.03)	(0.65)
From net realized gain	(0.38)	(3.79)
	(0.41)	(4.44)
Net asset value, end of period	$43.43	$39.22
Total return3,4 (%)	8.115	(0.25)
Ratios and supplemental data
Net assets, end of period (in millions)	$82	$74
Ratios (as a percentage of average net assets):
Expenses before reductions	1.236	1.16
Expenses net of fee waivers, if any	1.176	1.14
Expenses net of all fee waivers and credits	1.176	1.14
Net investment income (loss)	0.166	2.09
Portfolio turnover (%)	375	507

¹ Class 1 shares began operations on 11-6-06.

² Based on the average of the shares outstanding.

³ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁴ Assumes dividend reinvestment.

⁵ Not annualized.

⁶ Annualized.

⁷ Excludes merger activity.

See notes to financial statements

International Core Fund | Annual report

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F I N A N C I A L  S T A T E M E N T S

Financial highlights

CLASS NAV SHARES
Period ended	2-28-071	2-29-08
Per share operating performance
Net asset value, beginning of period	$39.18	$43.42
Net investment income (loss)2	0.08	0.95
Net realized and unrealized gain
(loss) on investments	4.58	(0.70)
Total from investment operations	4.66	0.25
Less distributions
From net investment income	(0.04)	(0.67)
From net realized gain	(0.38)	(3.79)
	(0.42)	(4.46)
Net asset value, end of period	$43.42	$39.21
Total return3 (%)	11.904	(0.20)5
Ratios and supplemental data
Net assets, end of period (in millions)	$1,244	$1,415
Ratios (as a percentage of average net assets):
Expenses before reductions	1.086	1.11
Expenses net of fee waivers, if any	1.086	1.08
Expenses net of all fee waivers and credits	1.086	1.08
Net investment income (loss)	0.386	2.09
Portfolio turnover (%)	374	507

¹ Class NAV shares began operations on 8-29-06.

² Based on the average of the shares outstanding.

³ Assumes dividend reinvestment.

⁴ Not annualized.

⁵ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁶ Annualized.

⁷ Excludes merger activity.

See notes to financial statements

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31

Notes to financial statements

1. Organization

John Hancock International Core Fund (the Fund) is a diversified series of John Hancock Funds III (the Trust). The Trust was established as a Massachusetts business trust on June 9, 2005. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end investment management company. The investment objective of the Fund is to seek high total return.

John Hancock Life Insurance Company of New York (John Hancock New York) is a wholly owned subsidiary of John Hancock Life Insurance Company (U.S.A.) (John Hancock USA). John Hancock USA and John Hancock New York are indirect wholly owned subsidiaries of The Manufacturers Life Insurance Company (Manulife), which in turn is a wholly owned subsidiary of Manulife Financial Corporation (MFC), a publicly traded company. MFC and its subsidiaries are known collectively as “Manulife Financial.”

John Hancock Investment Management Services, LLC (the Adviser), a Delaware limited liability company controlled by John Hancock USA, serves as investment adviser for the Trust and John Hancock Funds, LLC (the Distributor), a Delaware limited liability company, an affiliate of the Adviser, serves as principal underwriter.

The Board of Trustees have authorized the issuance of multiple classes of shares of the Fund, including classes designated as Class A, Class B, Class C, Class I, Class R1, Class 1 and Class NAV shares. Class A, Class B and Class C shares are open to all retail investors. Class I shares are offered without any sales charge to various institutional and certain individual investors. Class R1 shares are available only to certain retirement plans. Class 1 shares are sold only to certain exempt separate accounts of John Hancock USA and John Hancock New York.

Class NAV shares are sold to affiliated funds of funds, which are funds of funds within the John Hancock funds complex. The shares of each class represent an interest in the same portfolio of investments of the Fund, and have equal rights as to voting, redemptions, dividends and liquidation, except that certain expenses, subject to the approval of the Board of Trustees, may be applied differently to each class of shares in accordance with current regulations of the Securities and Exchange Commission (SEC) and the Internal Revenue Service. Shareholders of a class that bear distribution and service expenses under the terms of a distribution plan have exclusive voting rights to that distribution plan. Class B shares will convert to Class A shares eight years after purchase.

The Adviser and other affiliates of John Hancock USA owned 3,090 shares of beneficial interest of Class R1 on February 29, 2008.

The Fund is the accounting and performance successor to the GMO International Disciplined Equity Fund (the Predecessor Fund), a diver-sified open-end investment management company organized as a Massachusetts corporation on September 16, 2005. On June 12, 2006, the Fund acquired substantially all the assets and assumed the liabilities of the Predecessor Fund pursuant to an agreement and plan of reorganization, in exchange for Class A shares of the Fund.

2. Significant accounting policies

In the preparation of the financial statements, the Fund follows the policies described below. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during

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the reporting period. Actual results may differ from these estimates.

Security valuation

The net asset value of the shares of the Fund is determined daily as of the close of the New York Stock Exchange (NYSE), normally at 4:00 P.M., Eastern Time. Short-term debt investments that have a remaining maturity of 60 days or less are valued at amortized cost, and thereafter assume a constant amortization to maturity of any discount or premium, which approximates market value. Investments in John Hancock Cash Investment Trust (JHCIT), an affiliate of the John Hancock Advisers, LLC (JHA), a wholly owned subsidiary of John Hancock Financial Services, Inc., a subsidiary of MFC, are valued at their net asset value each business day. All other securities held by the Fund are valued at the last sale price or official closing price (closing bid price or last evaluated quote if no sale has occurred) as of the close of business on the principal securiti es exchange (domestic or foreign) on which they trade or, lacking any sales, at the closing bid price. Securities traded only in the over-the-counter market are valued at the last bid price quoted by brokers making markets in the securities at the close of trading. Securities for which there are no such quotations, principally debt securities, are valued based on the evaluated prices provided by an independent pricing service, which utilizes both dealer-supplied and electronic data processing techniques, which take into account factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other market data.

Other assets and securities for which no such quotations are readily available are valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees. Generally, trading in non-U.S. securities is substantially completed each day at various times prior to the close of trading on the NYSE. The values of such securities used in computing the net asset value of a Fund’s shares are generally determined as of such times. Occasionally, significant events that affect the values of such securities may occur between the times at which such values are generally determined and the close of the NYSE. Upon such an occurrence, these securities will be valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees.

In deciding whether to make a fair value adjustment to the price of a security, the Board of Trustees or their designee may review a variety of factors, including developments in foreign markets, the performance of U.S. securities markets and the performance of instruments trading in U.S. markets that represent foreign securities and baskets of foreign securities. The Fund may also fair value securities in other situations, for example, when a particular foreign market is closed, but the Fund is calculating the net asset value. In view of these factors, it is likely that Funds investing significant amounts of assets in securities in foreign markets will be fair valued more frequently than Funds investing significant amounts of assets in frequently traded, U.S. exchange listed securities of large-capitalization U.S. issuers.

For purposes of determining when fair value adjustments may be appropriate with respect to Funds that invest in securities in foreign markets that close prior to the NYSE, the Funds will, on an ongoing basis, monitor for “significant market events.” A significant market event may be a certain percentage change in the value of an index or of certain Exchange Traded Funds that track foreign markets in which Funds have significant investments. If a significant market event occurs due to a change in the value of the index or of Exchange Traded Funds, the pricing for the Fund will promptly be reviewed and potential adjustments to the net asset value of the Fund will be recommended to the Trust’s Pricing Committee when applicable.

Fair value pricing of securities is intended to help ensure that the net asset value of the Fund’s shares reflects the value of the Fund’s securities as of the close of the NYSE (as opposed to a value which is no longer accurate as of such close), thus limiting the opportunity for aggressive traders to purchase shares of the

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33

Fund at deflated prices, reflecting stale security valuations, and to promptly sell such shares at a gain. However, a security’s valuation may differ depending on the method used for determining value and no assurance can be given that fair value pricing of securities will successfully eliminate all potential opportunities for such trading gains.

New accounting pronouncements

In September 2006, Financial Accounting Standards Board (FASB) Standard No. 157,  Fair Value Measurements (FAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. FAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosure about fair value measurements. As of February 29, 2008, management does not believe the adoption of FAS 157 will impact the amounts reported in the financial statements; however, additional disclosures regarding pricing sources will be required about the inputs used to develop the measurements of fair value and the related realized and unrealized gain/loss for certain securities valued by significant unobservable market inputs.

In March 2008, FASB No. 161 (FAS 161),  Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133 (FAS 133), was issued and is effective for fiscal years beginning after November 15, 2008. FAS 161 amends and expands the disclosure requirements of FAS 133 in order to provide financial statement users an understanding of a company’s use of derivative instruments, how derivative instruments are accounted for under FAS 133 and related interpretations and how these instruments affect a company’s financial position, performance, and cash flows. FAS 161 requires companies to disclose information detailing the objectives and strategies for using derivative instruments, the level of derivative activity entered into by the company, and any credit risk-related contingent features of the agreements. Management is currently evaluating the adoption of FAS 1 61 on the Fund’s financial statement disclosures.

Guarantees and indemnifications

Under the Trust’s organizational documents, its Officers and Trustees are indemnified against certain liability arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust that have not yet occurred.

Repurchase agreements

The Fund may enter into repurchase agreements. When the Fund enters into a repurchase agreement through its custodian, it receives delivery of securities, the amount of which at the time of purchase and each subsequent business day is required to be maintained at such a level that the market value is generally at least 102% of the repurchase amount. The Fund will take constructive receipt of all securities underlying the repurchase agreements it has entered into until such agreements expire. If the seller defaults, the Fund would suffer a loss to the extent that proceeds from the sale of underlying securities were less than the repurchase amount. The Fund may enter into repurchase agreements maturing within seven days with domestic dealers, banks or other financial institutions deemed to be creditworthy by the Adviser. Collateral for certain tri-party repurchase agreements is held at the custodian bank in a segregated account for the benefit of the Fund and the counterpa rty.

Foreign currency transactions

The books and records of the Fund are maintained in U.S. dollars. Investment securities and other assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the prevailing exchange rates at period end. Purchases and sales of investment securities, income and expenses are translated into U.S. dollars at the prevailing exchange rates on the respective dates of the transactions.

Net realized and unrealized gains and losses on foreign currency transactions represent net gains and losses between trade and settlement dates on securities transactions,

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the disposition of forward foreign currency exchange contracts and foreign currencies, and the difference between the amount of net investment income accrued and the U.S. dollar amount actually received. That portion of both realized and unrealized gains and losses on investments that results from fluctuations in foreign currency exchange rates is not separately disclosed but is included with net realized and unrealized gain/appreciation and loss/depreciation on investments.

The Fund may be subject to capital gains and repatriation taxes imposed by certain countries in which it invests. Such taxes are generally based upon income and/or capital gains earned or repatriated. Taxes are accrued based upon net investment income, net realized gains and net unrealized appreciation.

The Fund may invest in securities of issuers based in countries with emerging markets or economies and may, therefore, be subject to greater market risk than Funds that invest principally in securities of issuers in more developed countries. Emerging markets securities may be more volatile and less liquid than securities of issuers in developed countries and may be subject to substantial currency fluctuations and affected by sudden economic, social and political developments in the emerging market country. The securities markets of emerging countries may have less government regulation and may be subject to less extensive accounting and financial reporting requirements than the securities markets of more developed countries. Emerging market countries may have currency controls or restrictions which may prevent or delay the Fund from taking money out of the country or may impose additional taxes on money removed from the country.

Security transactions and related investment income

Investment security transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment transactions are reported on trade date. Interest income is accrued as earned. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Foreign dividends are recorded on the ex-date or when the Fund becomes aware of the dividends from cash collections. Discounts/premiums are accreted/ amortized for financial reporting purposes. Non-cash dividends are recorded at the fair market value of the securities received. Debt obligations may be placed in a non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful, based upon consistently applied procedures.

From time to time, the Fund may invest in Real Estate Investment Trusts (REITs) and, as a result, will estimate the components of distributions from these securities. Distributions from REITs received in excess of income are recorded as a reduction of cost of investments and/or as a realized gain.

The Fund uses the specific identification method or determining realized gain or loss on investments for both financial statement and federal income tax reporting purposes.

Allocations of income and expenses

All income, expenses (except class-specific expenses), and realized and unrealized gain/ loss are allocated to each class of shares based upon the relative net assets of each class. Dividends to shareholders from net investment income are determined at a class level and distributions from capital gains are determined at a Fund level.

Expenses not directly attributable to the Fund or share classes are allocated based on the relative share of net assets of the Fund or share class at the time the expense was incurred. Class-specific expenses, as detailed in Note 3, are accrued daily and charged directly to the respective share classes.

Securities lending

The Fund may lend portfolio securities from time to time in order to earn additional income. The Fund retains beneficial ownership of the securities it has loaned and continues to receive interest and dividends paid by the issuer of securities and to participate in any changes in their value. On the settlement date of the loan, the Fund

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35

receives collateral against the loaned securities and maintain collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. Any cash collateral received is invested in the JHCIT. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. The Fund receives compensation for lending its securities either in the form of fees, guarantees, and/or by retaining a portion of interest on the investment of any cash received as collateral.

The Fund has entered into an agreement with Morgan Stanley & Co. Incorporated and MS Securities Services Inc. (collectively, Morgan Stanley), which permits the Fund to lend securities to Morgan Stanley on a principal basis. Morgan Stanley is the primary borrower of securities of the Fund. The risk of having one primary borrower of Fund securities (as opposed to several borrowers in an agency relationship) is that should Morgan Stanley fail financially, all securities lent will be affected by the failure and by any delays in recovery of the securities (or in the rare event, loss of rights in the collateral).

Prior to May 8, 2007, cash collateral was invested in the State Street Navigator Securities Lending Portfolio. At February 29, 2008 the Fund loaned securities having a market value of $192,020,123 collateralized by securities in the amount of $201,621,129.

Futures

The Fund may purchase and sell financial futures contracts and options on those contracts. The Fund invests in contracts based on finan-cial instruments, such as U.S. Treasury Bonds or Notes, or on securities indices such as the Standard & Poor’s 500 Index, in order to hedge against a decline in the value of securities owned by the Fund.

Initial margin deposits required upon entering into futures contracts are satisfied by the delivery of specific securities or cash as collateral to the broker (the Fund’s agent in acquiring the futures position). If the position is closed out by taking an opposite position prior to the settlement date of the futures contract, a final determination of variation margin is made, cash is required to be paid to or released by the broker and the Fund realizes a gain or loss.

When the Fund sells a futures contract based on a financial instrument, the Fund becomes obligated to deliver that kind of instrument at an agreed upon date for a specified price. The Fund realizes a gain or loss depending on whether the price of an offsetting purchase is less or more than the price of the initial sale or on whether the price of an offsetting sale is more or less than the price of the initial purchase. The Fund could be exposed to risks if it could not close out futures positions because of an illiquid secondary market or the inability of counterparties to meet the terms of their contracts. Futures contracts are valued at the quoted daily settlement prices established by the exchange on which they trade.

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The following is a summary of open futures contracts at February 29, 2008:

						UNREALIZED
	NUMBER OF		EXPIRATION			APPRECIATION
OPEN CONTRACTS	CONTRACTS	POSITION	DATE	NOTIONAL VALUE		(DEPRECIATION)
CAC 40 10 Euro
Index Futures	243	Long	Mar 2008	$17,698,491	($73,130)
DAX Index Futures	361	Long	Mar 2008	92,463,310	(13,316,567)
EOE Dutch Stock	12	Long	Mar 2008	1,630,494	21,012
Index Futures
FTSE 100 Index Futures	64	Long	Mar 2008	7,416,618	(24,294)
Hang Seng Stock	4	Long	Mar 2008	622,261	17,331
Index Futures
MSCI Singapore Stock	16	Long	Mar 2008	854,542	(24,197)
Index Futures
OMX 30 Stock	60	Long	Mar 2008	941,924	8,291
Index Futures
S&P/MIB Index Futures	7	Long	Mar 2008	1,788,906	(8,653)
Share Price 200	13	Long	Mar 2008	1,684,521	(21,251)
Index Futures
Topix Index Futures	68	Long	Mar 2008	8,643,180	58,626
IBEX 35 Index Futures	123	Short	Mar 2008	24,658,036	38,531
S&P/TSE 60	224	Short	Mar 2008	36,235,997	(391,322)
Index Futures
					($13,715,623)

Forward foreign currency contracts

The Fund may purchase and sell forward foreign currency contracts in order to hedge a specific transaction or Fund position. Forward foreign currency contracts are valued at forward foreign currency exchange rates and marked to market daily. Net realized gains (losses) on foreign currency and forward foreign currency contracts shown in the Statements of Operations include net gains or losses realized by the Fund on contracts that have matured.

The net U.S. dollar value of foreign currency underlying all contractual commitments held at the end of the period, the resulting net unrealized appreciation (depreciation) and related net receivable or payable amount are determined using forward foreign currency exchange rates supplied by a quotation service. The Fund could be exposed to risks in excess of amounts recognized on the Statements of Assets and Liabilities if the counterparties to the contracts are unable to meet the terms of their contracts or if the value of the forward foreign currency contract changes unfavorably.

At February 29, 2008, the Fund entered into forward foreign currency contracts, which contractually obligate the Fund to deliver currencies at future dates.

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37

Open forward foreign currency contracts as of February 29, 2008, were as follows:

				UNREALIZED
	PRINCIPAL AMOUNT	SETTLEMENT		APPRECIATION
CURRENCY	COVERED BY CONTRACT	DATE		(DEPRECIATION)
Buys
Australian Dollar	5,379,000	5/23/08	$185,298
Euro	4,868,000	5/23/08	323,605
Euro	10,619,000	5/23/08	565,409
Japanese Yen	2,437,234,042	5/23/08	772,398
Japanese Yen	1,847,022,042	5/23/08	580,178
Japanese Yen	1,847,022,042	5/23/08	620,039
Japanese Yen	1,847,022,042	5/23/08	629,791
Japanese Yen	615,788,000	5/23/08	150,015
New Zealand Dollar	7,389,165	5/23/08	907
New Zealand Dollar	7,389,165	5/23/08	1,867
New Zealand Dollar	7,613,079	5/23/08	858
Norwegian Krone	20,731,000	5/23/08	219,004
Pound Sterling	2,055,000	5/23/08	79,379
Swedish Krona	123,365,733	5/23/08	469,371
Swedish Krona	29,654,000	5/23/08	204,315
Swedish Krona	123,365,733	5/23/08	503,969
Swedish Krona	7,620,000	5/23/08	61,112
Swedish Krona	127,104,089	5/23/08	492,457
Swiss Franc	20,715,718	5/23/08	924,718
Swiss Franc	20,715,718	5/23/08	959,400
Swiss Franc	19,497,147	5/23/08	895,154
Swiss Franc	20,715,718	5/23/08	917,415
Swiss Franc	19,497,147	5/23/08	912,365
Swiss Franc	23,403,718	5/23/08	1,086,037
			$11,555,061
Sells
Australian Dollar	10,695,777	5/23/08	(131,071)
Australian Dollar	10,695,824	5/23/08	(131,025)
Australian Dollar	10,709,105	5/23/08	(117,744)
Australian Dollar	10,689,478	5/23/08	(137,371)
Canadian Dollar	8,891,555	5/23/08	(279,491)
Canadian Dollar	9,198,449	5/23/08	(250,508)
Canadian Dollar	8,891,030	5/23/08	(280,016)
Danish Kroner	2,053,866	5/23/08	(63,004)
Danish Kroner	2,053,422	5/23/08	(63,448)
Danish Kroner	2,115,170	5/23/08	(65,847)
Euro	18,548,956	5/23/08	(559,721)
Euro	18,552,062	5/23/08	(556,616)
Euro	19,104,867	5/23/08	(582,861)
Norwegian Krone	3,412,823	5/23/08	(81,326)
Norwegian Krone	3,513,342	5/23/08	(86,690)
Norwegian Krone	3,406,087	5/23/08	(88,062)
Pound Sterling	10,209,493	5/23/08	(128,166)
Pound Sterling	17,466,788	5/23/08	(320,793)
Pound Sterling	17,455,657	5/23/08	(331,924)
Pound Sterling	17,989,479	5/23/08	(337,120)
Swiss Franc	30,686,082	5/23/08	(1,684,357)
			($6,277,161)

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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 that is distributed to shareholders. Therefore, no federal income tax provision is required. For federal income tax purposes, the Fund had $5,573,841 of a capital loss carryforward available, to the extent provided by regulations, to offset future net realized capital gains. To the extent that such carryforward is used by the Fund, no capital gain distributions will be made. The loss carryforward expires as follows: February 28, 2009 — $2,640,620 and February 28, 2010 — $2,933,221. Availability of a certain amount of the loss carryforwards, which were acquired on May 25, 2007, in a merger with John Hancock International Fund, may be limited in a given year.

The Fund has adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement 109 (FIN 48), at the beginning of the Fund’s fiscal year. FIN 48 prescribes a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not have a material impact on the Fund’s financial statements. Each of the Fund’s federal tax returns for the prior fiscal years remains subject to examination by the Internal Revenue Service.

Distribution of income and gains

The Fund records distributions to shareholders from net investment income and net realized gains, if any, on the ex-dividend date. During the year ended February 28, 2007, the tax character of distributions paid was as follows: ordinary income $12,427,092. During the year ended February 29, 2008, the tax character of distributions paid was as follows: ordinary income $61,419,948 and long-term capital gain $101,272,825. Distributions paid by the Fund with respect to each class of shares are calculated in the same manner, at the same time and are in the same amount, except for the effect of expenses that may be applied differently to each class.

As of February 29, 2008, the components of distributable earnings on a tax basis included $20,684,100 of undistributed ordinary income and $37,525,761 of undistributed long-term gain.

Such distributions and distributable earnings, on a tax basis, are determined in conformity with income tax regulations, which may differ from accounting principles generally accepted in the United States of America. Distributions in excess of tax basis earnings and profits, if any, are reported in the Fund’s financial statements as a return of capital.

Capital accounts within financial statements are adjusted for permanent book/tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book/tax differences will reverse in a subsequent period. Permanent book/tax differences are primarily attributable to foreign currency transactions, derivative transactions, expiration of capital loss carryforwards, merger related transactions and investments in passive foreign investment companies.

3. Investment advisory and other agreements

The Trust has entered into an Investment Advisory Agreement with the Adviser. The Adviser is responsible for managing the corporate and business affairs of the Trust and for selecting and compensating subadvisers to handle the investment of the assets of the Fund, subject to the supervision of the Trust’s Board of Trustees. As compensation for its services, the Adviser receives an advisory fee from the Trust. Under the Advisory Agreement, the Fund pays a monthly management fee to the Adviser equivalent, on an annual basis, to the sum of: (a) 0.92% of the first $100,000,000 of the Fund’s aggregate daily net assets; (b) 0.895% of the next $900,000,000 of the Fund’s aggregate daily net assets; and (c) 0.880% of the Fund’s aggregate daily net assets in excess of $1,000,000,000. Aggregate net assets include the net assets of the Fund and International Core Trust, a series of John Hancock Trust and International Core Fund, a series of John Hancock Funds II. The Adviser has a subadvisory agreement with Grantham, Mayo, Van Otterloo & Co. LLC. The Fund is not responsible for payment of the subadvisory fees.

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The investment management fees incurred for the year ended February 29, 2008, were equivalent to an annual effective rate of 0.89% of the Fund’s average daily net assets.

Expense reimbursements

The Adviser has contractually agreed to reimburse or limit certain Fund level expenses to 0.20% of the Fund’s average annual net assets which are allocated pro rata to all share classes. This agreement excludes taxes, portfolio brokerage commissions, interest, advisory fees, Rule 12b-1 fees, transfer agency fees, blue sky fees, printing and postage and litigation and indem-nification expenses and other extraordinary expenses not incurred in the ordinary course of the Fund’s business. In addition, fees incurred under any agreement or plans of the Fund dealing with services for the shareholders and others with beneficial interest in shares of the Fund, are excluded.

In addition, the Adviser has agreed to reimburse or limit certain expenses for each share class. This agreement excludes taxes, portfolio brokerage commissions, interest and litigation and indemnification expenses and other extraordinary expenses not incurred in the ordinary course of the Fund’s business. In addition, fees incurred under any agreement or plans of the Fund dealing with services for the shareholders and others with beneficial interest in shares of the Fund, are excluded. The reimbursements and limits are such that these expenses will not exceed 1.70% for Class A shares, 2.40% for Class B, 2.40% for Class C, 1.18% for Class I, 1.70% for Class R1, 1.15% for Class 1 and 1.10% for Class NAV. Prior to September 28, 2007, the expense limitation for Class I was 1.20% . Accordingly, the expense reductions or reimbursements related to this agreement were $29,716, $12,954, $12,332, $18,253, $16,151, $17,392 and $307,069 for Class A, Class B, Class C, Class I, C lass R1, Class 1 and Class NAV, respectively for the year ended February 29, 2008. The expense reimbursements and limits will continue in effect until June 30, 2008 and thereafter until terminated by the Adviser on notice to the Trust.

Fund administration fees

Pursuant to the Advisory Agreement, the Fund reimburses the Adviser for all expenses associated with providing the administrative, financial, legal, accounting and recordkeeping services of the Fund, including the preparation of all tax returns, annual, semiannual and periodic reports to shareholders and the preparation of all regulatory reports. These expenses are allocated based on the relative share of net assets of each class at the time the expense was incurred.

The fund administration fees incurred for the year ended February 29, 2008, were $546,691 with an annual effective rate of 0.03% of the Fund’s average daily net assets.

Distribution and shareholder servicing fees

The Trust has a Distribution Agreement with the Distributor. The Fund has adopted Distribution Plans with respect to Class A, Class B, Class C, Class R1 and Class 1, pursuant to Rule 12b-1 under the 1940 Act, to pay the Distributor for the services it provides as distributor of shares of the Fund. Accordingly, the Fund makes monthly payments to the Distributor at an annual rate not to exceed 0.30%, 1.00%, 1.00%, 0.50% and 0.05% of average daily net asset value of Class A, Class B, Class C, Class R1 and Class 1, respectively. A maximum of 0.25% of such payments may be service fees, as defined by the Conduct Rules of Financial Industry Regulatory Authority (formerly the National Association of Securities Dealers). Under the Conduct Rules, curtailment of a portion of the Fund’s 12b-1 payments could occur under certain circumstances.

In addition, the Fund has also adopted a Service Plan for Class R1 shares. Under the Service Plan, the Fund may pay up to 0.25% of Class R1 average daily net asset value for certain other services. There were no Service Plan fees incurred for the year ended February 29, 2008.

Sales charges

Class A shares are assessed up-front sales charges of up to 5.00% of net asset value of such shares. During the year ended February 29, 2008, the Fund was informed that the Distributor received net up-front sales charges of $241,978 with regard to sales of Class A shares. Of this amount, $34,728 was retained and used for printing prospectuses, advertising, sales literature and other purposes;

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$194,404 was paid as sales commissions to unrelated broker-dealers; and $12,846 was paid as sales commissions to sales personnel of Signator Investors, Inc. (Signator Investors), a related broker-dealer, an indirect subsidiary of MFC.

Class B shares that are redeemed within six years of purchase are subject to a contingent deferred sales charge (CDSC) at declining rates, beginning at 5.00% of the lesser of the current market value at the time of redemption or the original purchase cost of the shares being redeemed. Class C shares that are redeemed within one year of purchase are subject to a CDSC at a rate of 1.00% of the lesser of the current market value at the time of redemption or the original purchase cost of the shares being redeemed. Proceeds from the CDSCs are paid to the Distributor and are used, in whole or in part, to defray its expenses for providing distribution-related services to the Fund in connection with the sale of Class B and Class C shares. During the year ended February 29, 2008, CDSCs received by Distributor amounted to $18,406 for Class B shares and $5,004 for Class C shares.

Transfer agent fees

The Fund has a Transfer Agency Agreement with John Hancock Signature Services, Inc. (Signature Services), an indirect subsidiary of MFC. For Class A, Class B, Class C, Class I and Class R1 shares, the Fund pays a monthly transfer agent fee at an annual rate of 0.05% of each class’ average daily net assets, plus a fee based on the number of shareholder accounts and reimbursement for certain out-of-pocket expenses. Expenses not directly attributable to a particular class of shares are aggregated and allocated to each class on the basis of its relative net asset value. The Fund pays a monthly fee which is based on an annual rate of $15.00 for each Class A shareholder account, $17.50 for each Class B shareholder account, $16.50 for each Class C shareholder account and $15.00 for each Class R1 shareholder account.

Signature Services has agreed to limit the transfer agent fees so that such fees do not exceed 0.30% annually of Class A, Class B, Class C, Class I and Class R1 share average daily net assets. This agreement is effective until December 31, 2008. Signature Services reserves the right to terminate this limitation in the future. There were no transfer agent fee reductions for Class A, Class B, Class C, Class I and Class R1 shares, respectively, during the year ended February 29, 2008.

In addition, Signature Services has voluntarily agreed to further limit transfer agent fees for Class R1 shares so that such fees do not exceed 0.05% annually of each class’s average daily net assets. For the year ended February 29, 2008, the transfer agent fees reductions for Class R1 were $335.

In May 2007, the Fund began receiving earnings credits from its transfer agent as a result of uninvested cash balances. These credits are used to reduce a portion of the Fund’s transfer agent fees and out-of-pocket expenses. During the year ended February 29, 2008, the Fund’s transfer agent fees and out-of-pocket expenses were reduced by $8,034 for transfer agent credits earned.

Class level expenses for the year ended February 29, 2008, were as follows:

	Distribution and	Transfer	Blue sky	Printing and
Share class	service fees	agent fees	fees	postage fees
Class A	$313,112	$200,121	$22,791	$33,051
Class B	184,814	41,816	16,005	5,295
Class C	134,786	27,083	19,019	3,916
Class I	—	804	17,658	557
Class R1	678	405	16,207	3
Class 1	42,756	—	—	4,633
Total	$676,146	$270,229	$91,680	$47,455

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4. Trustees’ fees

The Trust compensates each Trustee who is not an employee of the Adviser or its affiliates. Total Trustees’ expenses are allocated to the Fund based on its average daily net asset value.

5. Line of credit

The Fund has entered into an agreement which enables them to participate in a $100 million unsecured committed line of credit with State Street Corporation. Borrowings will be made solely to temporarily finance the repurchase of capital shares. Interest is charged to the Fund based on its borrowings at a rate per annum equal to the Federal Funds rate plus 0.50% . In addition, a commitment fee of 0.05% per annum, payable at the end of each calendar quarter, based on the average daily-unused portion of the line of credit, is charged to the Fund on a prorated basis based on average net assets. Effective October 15, 2007, the commitment fee was changed from 0.07% to 0.05% . For the year ended February 29, 2008, there were no borrowings under the line of credit.

6. Fund share transactions

Share activities for the Fund for the years ended February 28, 2007, and February 29, 2008, were as follows:

	Year ended 2-28-07		Year ended 2-29-08
	Shares	Amount	Shares	Amount
Class A shares
Sold	284,321	$11,617,841	1,465,538	$65,700,113
Issued in reorganization	—	—	2,188,767	102,289,840
Distributions reinvested	1,655	70,124	298,965	12,673,075
Repurchased	(468,712)	(19,816,280)	(903,245)	(38,268,180)
Net increase (decrease)	(182,736)	($8,128,315)	3,050,025	$142,394,848
Class B shares
Sold	27,188	$1,088,930	111,794	$5,054,286
Issued in reorganization	—	—	519,204	24,096,952
Distributions reinvested	145	6,146	45,949	1,937,144
Repurchased	(4,739)	(194,969)	(195,340)	(8,566,851)
Net increase (decrease)	22,594	$900,1071	481,607	$22,521,531
Class C shares
Sold	108,359	$4,434,998	239,764	$11,103,560
Issued in reorganization	—	—	123,192	5,718,520
Distributions reinvested	478	20,196	34,387	1,450,443
Repurchased	(4,754)	(197,095)	(104,940)	(4,451,373)
Net increase (decrease)	104,083	$4,258,0991	292,403	$13,821,150
Class I shares
Sold	5,134	$189,482	66,404	$3,070,600
Issued in reorganization	—	—	3,865	181,228
Distributions reinvested	45	1,930	4,834	205,394
Repurchased	(46)	(2,038)	(6,887)	(323,804)
Net increase (decrease)	5,133	$189,3741	68,216	$3,133,418
Class R1 shares
Sold	2,820	$101,500	1,245	$48,556
Distributions reinvested	25	1,056	289	12,209
Repurchased	—	—	(144)	(5,493)
Net increase (decrease)	2,845	$102,5561	1,390	$55,272

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	Year ended 2-28-07		Year ended 2-29-08
	Shares	Amount	Shares	Amount
Class 1 shares
Sold	48,304	$2,043,017	188,611	$8,598,212
Issued in reorganization	1,953,542	79,235,655	—	—
Distributions reinvested	18,537	787,817	189,362	8,049,797
Repurchased	(138,020)	(5,874,002)	(376,865)	(16,502,541)
Net increase (decrease)	1,882,363	$76,192,4872	1,108	$145,468
Class NAV shares
Sold	3,063,357	$123,822,093	6,108,534	$264,764,263
Issued in reorganization	26,094,263	1,022,391,188	—	—
Distributions reinvested	271,456	11,534,195	3,230,848	137,311,048
Repurchased	(788,527)	(32,939,761)	(1,895,287)	(88,782,912)
Net increase (decrease)	28,640,549	$1,124,807,7153	7,444,095	$313,292,399
Net increase (decrease)	30,474,831	$1,198,322,023	11,338,844	$495,364,086

¹Period from 6-12-06 (commencement of operations) to 2-28-07.

²Period from 11-6-06 (commencement of operations) to 2-28-07.

³Period from 8-29-06 (commencement of operations) to 2-28-07.

7. Purchases and sales of securities

Purchases and proceeds from sales or maturities of securities, other than short-term securities and obligations of the U.S. government, during the year ended February 29, 2008, aggregated $981,929,752 and $772,055,325, respectively.

8. Reorganization

On June 12, 2006, the Fund acquired substantially all of the assets and liabilities of the Predecessor Fund in exchange solely for Class A shares of the Fund. The acquisition was accounted for as a tax-free exchange of 462,581 Class A shares of the Fund for the net assets of the Predecessor Fund, which amounted to $16,617,195, including $884,271 of unrealized appreciation, after the close of business on June 9, 2006. Accounting and performance history of the Predecessor Fund was redesignated as that of Class A of the Fund.

On August 29, 2006, the Board of Trustees of John Hancock Funds II International Stock Fund (the International Stock Fund) approved an Agreement and Plan of Reorganization, which provided for the transfer of substantially all of the assets and liabilities of the International Stock Fund Class NAV in exchange for the Class NAV of the Fund. The acquisition was accounted for as a tax-free exchange of 26,094,263 of the Class NAV shares of the Fund for the net assets of the International Stock Fund Class NAV, which amounted to $1,022,391,188, including the total of $122,941,561 of unrealized appreciation, after the close of business on August 29, 2006.

In addition, on August 29, 2006, the Board of Trustees of International Stock Fund approved an agreement and Plan of Reorganization, which provided for the transfer of substantially all of the assets and liabilities of the International Stock Fund Class 1 in exchange for the Class 1 of the Fund. The acquisition was accounted for as a taxfree exchange of 1,953,542 of the Class 1 shares of the Fund for the net assets of the International Stock Fund Class 1, which amounted to $79,235,655, including the total of $14,608,110 of unrealized appreciation, after the close of business on November 6, 2006.

On April 18, 2007, the shareholders of John Hancock International Fund (International Fund) approved an Agreement and Plan of Reorganization, which provided for the transfer of substantially all of the assets and liabilities of the International Fund in exchange for Class A, Class B, Class C and Class I shares of the Fund. The acquisition was accounted for as a tax-free exchange of 2,188,767 Class A shares, 519,204 Class B shares, 123,192 Class C shares and 3,865 Class I shares of the Fund for the net assets of the International Fund, which amounted to $102,289,840,

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$24,096,952, $5,718,520 and $181,228 for Class A, Class B, Class C and Class I shares of the International Fund, respectively, including the total of $24,329,893 of unrealized appreciation, after the close of business on May 25, 2007.

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Auditors’ report

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of John Hancock Funds III and Shareholders of John Hancock International Core Fund,

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of John Hancock International Core Fund (the Fund) at February 29, 2008, and the results of its operations, the changes in its net assets and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of investments at February 29, 2008 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
Boston, Massachusetts
April 18, 2008

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Tax information

Unaudited

For federal income tax purposes, the following information is furnished with respect to the distributions of the Fund, if any, paid during its taxable year ended February 29, 2008.

The Fund has designated distributions to shareholders of $101,272,825 as a long-term capital gain dividend. As of February 29, 2008, the Fund designates the following as a foreign tax credit, which represents taxes paid on income derived from sources within foreign countries or possessions of the United States: $2,656,930.

The Fund hereby designates the maximum amount allowable of its net taxable income as qualified dividend income as provided in the Jobs and Growth Tax Relief Reconciliation Act of 2003. This amount will be reflected on Form 1099-DIV for the calendar year 2008.

Shareholders will be mailed a 2008 U.S. Treasury Department Form 1099-DIV in January 2009. This will reflect the total of all distributions that are taxable for calendar year 2008.

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Trustees and Officers

This chart provides information about the Trustees and Officers who oversee your John Hancock fund. Officers elected by the Trustees manage the day-to-day operations of the Fund and execute policies formulated by the Trustees.

Independent Trustees
Name, Year of Birth		Number of
Position(s) held with Fund	Trustee	John Hancock
Principal occupation(s) and other	of Fund	funds overseen
directorships during past 5 years	since1	by Trustee
James F. Carlin, Born: 1940	2006	55
Chairman (since December 2007); Director and Treasurer, Alpha Analytical Laboratories, Inc. (chemical
analysis) (since 1985); Part Owner and Treasurer, Lawrence Carlin Insurance Agency, Inc. (since 1995);
Part Owner and Vice President, Mone Lawrence Carlin Insurance Agency, Inc. (until 2005); Chairman
and Chief Executive Officer, Carlin Consolidated, Inc. (management/investments) (since 1987); Trustee,
Massachusetts Health and Education Tax Exempt Trust (1993–2003).
William H. Cunningham, Born: 1944	2006	55
Professor, University of Texas at Austin (since 1971); former Chancellor, University of Texas System and
former President, University of Texas at Austin (until 2001); Chairman and Chief Executive Officer, IBT
Technologies (until 2001); Director of the following: Hicks Acquisition Company I, Inc. (since 2007);
Hire.com (until 2004), STC Broadcasting, Inc. and Sunrise Television Corp. (until 2001), Symtx, Inc.
(electronic manufacturing) (since 2001), Adorno/Rogers Technology, Inc. (until 2004), Pinnacle
Foods Corporation (until 2003), rateGenius (until 2003), Lincoln National Corporation (insurance)
(since 2006), Jefferson-Pilot Corporation (diversified life insurance company) (until 2006), New
Century Equity Holdings (formerly Billing Concepts) (until 2001), eCertain (until 2001), ClassMap.com
(until 2001), Agile Ventures (until 2001), AskRed.com (until 2001), Southwest Airlines (since 2000),
Introgen (manufacturer of biopharmaceuticals) (since 2000) and Viasystems Group, Inc. (electronic
manufacturer) (until 2003); Advisory Director, Interactive Bridge, Inc. (college fundraising) (until 2001);
Advisory Director, Q Investments (until 2003); Advisory Director, JPMorgan Chase Bank (formerly Texas
Commerce Bank–Austin), LIN Television (until 2008), WilTel Communications (until 2003) and Hayes
Lemmerz International, Inc. (diversified automotive parts supply company) (since 2003).
Charles L. Ladner,2 Born: 1938	2006	55
Chairman and Trustee, Dunwoody Village, Inc. (retirement services) (until 2003); Senior Vice President
and Chief Financial Officer, UGI Corporation (public utility holding company) (retired 1998); Vice
President and Director, AmeriGas, Inc. (retired 1998); Director, AmeriGas Partners, L.P. (gas distribution)
(until 1997); Director, EnergyNorth, Inc. (until 1997); Director, Parks and History Association (until 2005).
John A. Moore,2 Born: 1939	2006	55
President and Chief Executive Officer, Institute for Evaluating Health Risks (nonprofit institution)
(until 2001); Senior Scientist, Sciences International (health research) (until 2003); Former Assistant
Administrator and Deputy Administrator, Environmental Protection Agency; Principal, Hollyhouse
(consulting) (since 2000); Director, CIIT Center for Health Science Research (nonprofit research)
(until 2007).

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Independent Trustees (continued)
Name, Year of Birth		Number of
Position(s) held with Fund	Trustee	John Hancock
Principal occupation(s) and other	of Fund	funds overseen
directorships during past 5 years	since1	by Trustee
Patti McGill Peterson,2 Born: 1943	2006	55
Senior Associate, Institute for Higher Education Policy (since 2007); Executive Director, Council for
International Exchange of Scholars and Vice President, Institute of International Education (until 2007);
Senior Fellow, Cornell Institute of Public Affairs, Cornell University, Ithaca, NY (until 1998); Former
President, Wells College, Aurora, NY, and St. Lawrence University, Canton, NY; Director, Niagara
Mohawk Power Corporation (until 2003); Director, Ford Foundation, International Fellowships Program
(since 2002); Director, Lois Roth Endowment (since 2002); Director, Council for International Educational
Exchange (since 2003).
Steven R. Pruchansky, Born: 1944	2006	55
Chairman and Chief Executive Officer, Greenscapes of Southwest Florida, Inc. (since 2000); Director and
President, Greenscapes of Southwest Florida, Inc. (until 2000); Managing Director, JonJames, LLC (real
estate) (since 2000); Director, First Signature Bank & Trust Company (until 1991); Director, Mast Realty
Trust (until 1994); President, Maxwell Building Corp. (until 1991).
Non-Independent Trustees3
Name, Year of Birth		Number of
Position(s) held with Fund	Trustee	John Hancock
Principal occupation(s) and other	of Fund	funds overseen
directorships during past 5 years	since1	by Trustee
James R. Boyle, Born: 1959	2006	265
Executive Vice President, Manulife Financial Corporation (since 1999); President, John Hancock Variable
Life Insurance Company (since March 2007); Executive Vice President, John Hancock Life Insurance
Company (since 2004); Chairman and Director, John Hancock Advisers, LLC (the Adviser), John Hancock
Funds, LLC and The Berkeley Financial Group, LLC (The Berkeley Group) (holding company) (since 2005);
Senior Vice President, The Manufacturers Life Insurance Company (U.S.A.) (until 2004).

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Principal officers who are not Trustees
Name, Year of Birth
Position(s) held with Fund	Officer
Principal occupation(s) and other	of Fund
directorships during past 5 years	since
Keith F. Hartstein, Born: 1956	2006
President and Chief Executive Officer
Senior Vice President, Manulife Financial Corporation (since 2004); Director, President and Chief
Executive Officer, the Adviser, The Berkeley Group and John Hancock Funds, LLC (since 2005); Director,
MFC Global Investment Management (U.S.), LLC (MFC Global (U.S.)) (since 2005); Director, John
Hancock Signature Services, Inc. (since 2005); President and Chief Executive Officer, John Hancock
Investment Management Services, LLC (since 2006); President and Chief Executive Officer, John Hancock
Funds, John Hancock Funds II, John Hancock Funds III and John Hancock Trust (since 2005); Director,
Chairman and President, NM Capital Management, Inc. (since 2005); Member, Investment Company
Institute Sales Force Marketing Committee (since 2003); President and Chief Executive Officer, MFC
Global (U.S.) (2005–2006); Executive Vice President, John Hancock Funds, LLC (until 2005).
Thomas M. Kinzler, Born: 1955	2006
Secretary and Chief Legal Officer
Vice President and Counsel, John Hancock Life Insurance Company (U.S.A.) (since 2006); Secretary and
Chief Legal Officer, John Hancock Funds and John Hancock Funds II (since 2006); Chief Legal Officer
and Assistant Secretary, John Hancock Trust (since 2006); Vice President and Associate General Counsel,
Massachusetts Mutual Life Insurance Company (1999–2006); Secretary and Chief Legal Counsel, MML
Series Investment Fund (2000–2006); Secretary and Chief Legal Counsel, MassMutual Institutional Funds
(2000–2004); Secretary and Chief Legal Counsel, MassMutual Select Funds and MassMutual Premier
Funds (2004–2006).
Francis V. Knox, Jr., Born: 1947	2006
Chief Compliance Officer
Vice President and Chief Compliance Officer, John Hancock Investment Management Services, LLC,
the Adviser and MFC Global (U.S.) (since 2005); Vice President and Chief Compliance Officer, John
Hancock Funds, John Hancock Funds II, John Hancock Funds III and John Hancock Trust (since 2005);
Vice President and Assistant Treasurer, Fidelity Group of Funds (until 2004); Vice President and Ethics &
Compliance Officer, Fidelity Investments (until 2001).
Charles A. Rizzo, Born: 1957	2007
Chief Financial Officer
Chief Financial Officer, John Hancock Funds, John Hancock Funds II, John Hancock Funds III and John
Hancock Trust (since June 2007); Assistant Treasurer, Goldman Sachs Mutual Fund Complex (regis-
tered investment companies) (2005–June 2007); Vice President, Goldman Sachs (2005–June 2007);
Managing Director and Treasurer of Scudder Funds, Deutsche Asset Management (2003–2005);
Director, Tax and Financial Reporting, Deutsche Asset Management (2002–2003); Vice President and
Treasurer, Deutsche Global Fund Services (Deutsche Registered Investment Companies) (1999–2002).
Gordon M. Shone, Born: 1956	2006
Treasurer
Senior Vice President, John Hancock Life Insurance Company (U.S.A.) (since 2001); Treasurer, John
Hancock Funds (since 2006), John Hancock Funds II, John Hancock Funds III and John Hancock Trust
(since 2005); Vice President and Chief Financial Officer, John Hancock Trust (2003–2005); Vice President,
John Hancock Investment Management Services, Inc., John Hancock Advisers, LLC (since 2006) and The
Manufacturers Life Insurance Company (U.S.A.) (1998–2000).

Annual report | International Core Fund

49

Principal officers who are not Trustees (continued)
Name, Year of Birth
Position(s) held with Fund	Officer
Principal occupation(s) and other	of Fund
directorships during past 5 years	since
John G. Vrysen, Born: 1955	2006
Chief Operating Officer
Senior Vice President, Manulife Financial Corporation (since 2006); Director, Executive Vice President
and Chief Operating Officer, the Adviser, The Berkeley Group and John Hancock Funds, LLC (since
June 2007); Executive Vice President and Chief Operating Officer, John Hancock Investment
Management Services, LLC (since December 2007); Chief Operating Officer, John Hancock Funds,
John Hancock Funds II, John Hancock Funds III and John Hancock Trust (since June 2007); Director,
Executive Vice President and Chief Financial Officer, the Adviser, The Berkeley Group and John Hancock
Funds, LLC (2005–2007); Executive Vice President and Chief Financial Officer, John Hancock Investment
Management Services, LLC (2005–2007); Executive Vice President and Chief Financial Officer, MFC
Global (U.S.) (2005 until August 2007); Director, John Hancock Signature Services, Inc. (since 2005);
Chief Financial Officer, John Hancock Funds, John Hancock Funds II, John Hancock Funds III and John
Hancock Trust (2005 until June 2007); Vice President and General Manager, John Hancock Fixed
Annuities, U.S. Wealth Management (2004–2005); Vice President, Operations, Manulife Wood Logan
(2000–2004).

The business address for all Trustees and Officers is 601 Congress Street, Boston, Massachusetts 02210-2805.

The Statement of Additional Information of the Fund includes additional information about members of the Board of Trustees of the Fund and is available without charge, upon request, by calling 1-800-225-5291.

¹ Each Trustee serves until resignation, retirement age or until his or her successor is elected.

² Member of Audit and Compliance Committee.

³ Non-Independent Trustee holds positions with the Fund’s investment adviser, underwriter and certain other affiliates.

International Core Fund | Annual report

50

For more information

The Fund’s proxy voting policies, procedures and records are available without charge, upon request:

By phone	On the Fund’s Web site	On the SEC’s Web site
1-800-225-5291	www.jhfunds.com/proxy	www.sec.gov
Investment adviser	Custodian	Legal counsel
John Hancock Advisers, LLC	State Street Bank & Trust Co.	Kirkpatrick & Lockhart
601 Congress Street	2 Avenue de Lafayette	Preston Gates Ellis LLP
Boston, MA 02210-2805	Boston, MA 02111	One Lincoln Street
		Boston, MA 02111-2950
Subadviser	Transfer agent
Grantham, Mayo,	John Hancock Signature	Independent registered
Van Otterloo & Co. LLC	Services, Inc.	public accounting firm
40 Rowes Wharf	P.O. Box 9510	PricewaterhouseCoopers LLP
Boston, MA 02110	Portsmouth, NH 03802-9510	125 High Street
		Boston, MA 02110
Principal distributor
John Hancock Funds, LLC
601 Congress Street
Boston, MA 02210-2805

How to contact us
Internet	www.jhfunds.com
Mail	Regular mail:	Express mail:
	John Hancock Signature	John Hancock Signature
	Services, Inc.	Services, Inc.
	P.O. Box 9510	Mutual Fund Image Operations
	Portsmouth, NH 03802-9510	164 Corporate Drive
		Portsmouth, NH 03801
Phone	Customer service representatives	1-800-225-5291
	EASI-Line	1-800-338-8080
	TDD line	1-800-554-6713

A listing of month-end portfolio holdings is available on our Web site, www.jhfunds.com. A more detailed portfolio holdings summary is available on a quarterly basis 60 days after the fiscal quarter on our Web site or upon request by calling 1-800-225-5291, or on the SEC’s Web site, www.sec.gov.

Annual report | International Core Fund

51

1-800-225-5291
1-800-554-6713 TDD
1-800-338-8080 EASI-Line
www.jhfunds.com

Now available:electronicdelivery
www.jhfunds.com/edelivery

This report is for the information of the shareholders of John Hancock International Core Fund.	6600A	2/08
It is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus.		4/08

Discussion of Fund performance

By Grantham, Mayo, Van Otterloo & Co. LLC (GMO)

U.S. stocks went on a wild ride during the 12-month period highlighted both by record highs for broad market indexes and conditions deemed poor enough to warrant numerous interventions by the Federal Reserve. For the period in full the S&P 500 Index returned –3.60%, a modest move which belied its frequent violent gyrations. Growth stocks outpaced value stocks during the period. Telecommunication services and consumer discretionary were the worst performing sectors in the Russell 2500 Growth Index while energy stocks performed the best.

”U.S. stocks went on a wild
ride during the 12-month period…”

For the year ended February, 29, 2008, John Hancock Growth Opportunities Fund’s Class A, Class B, Class C, Class I, Class R1, and Class 1 shares returned –14.69%, –15.29%, –15.25%, –14.36%, –14.77% and –14.31%, respectively, at net asset value, while the Russell 2500 Growth Index returned –4.27% and the average mid cap growth fund monitored by Morningstar, Inc. returned –0.09% . Sector and stock selection both detracted from relative returns. Sector weightings adding to relative returns included an overweight in materials, while sector weightings detracting from relative returns included an overweight in consumer discretionary. Stock selections in materials added to relative returns, while picks in consumer discretionary detracted. Individual names adding to returns versus the benchmark included overweight positions in Priceline. com, CF Industries Holdings and Cleveland-Cliffs, while overweight positions detracting from relat ive returns included ITT Education Services, Inc., The First Marblehead Corp. and American Eagle Outfitters, Inc.

This commentary reflects the views of the portfolio management team through the end of the Fund’s period discussed in this report. The team’s statements reflect their own opinions. As such, they are in no way guarantees of future events and are not intended to be used as investment advice or a recommendation regarding any specific security. They are also subject to change at any time as market and other conditions warrant.

Growth Opportunities Fund | Annual report

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A look at performance

For the periods ended February 29, 2008

		Average annual returns				Cumulative total returns
		with maximum sales charge (POP)				with maximum sales charge (POP)
	Inception				Since				Since
Class	date	1-year	5-year	10-year	inception	1-year	5-year	10-year	inception
A1,2	9-16-05	–18.95%	—	—	–2.70%	–18.95%	—	—	–6.49%
B	6-12-06	–19.53	—	—	–6.04	–19.53	—	—	–10.18
C	6-12-06	–16.10	—	—	–3.79	–16.10	—	—	–6.44
I3	6-12-06	–14.36	—	—	–2.79	–14.36	—	—	–4.76
R13	6-12-06	–14.77	—	—	–3.38	–14.77	—	—	–5.76
13	6-12-06	–14.31	—	—	–2.73	–14.31	—	—	–4.67

Performance figures assume all distributions are reinvested. Public offering price (POP) figures reflect maximum sales charge on Class A shares of 5%, and the applicable contingent deferred sales charge (CDSC) on Class B and Class C shares. The Class B shares’ CDSC declines annually between years 1 to 6 according to the following schedule:5, 4, 3, 3, 2, 1%. No sales charge will be assessed after the sixth year. Class C shares held for less than one year are subject to a 1% CDSC. Sales charge is not applicable for Class I, Class R1 and Class 1 shares.

The expense ratios of the Fund, both net (including any fee waivers or expense limitations) and gross (excluding any fee waivers or expense limitations), are set forth according to the most recent publicly available prospectuses for the Fund and may differ from the expense ratios disclosed in the Financial Highlights tables in this report. The waivers and expense limitations are contractual at least until 6-30-08. The net expenses are as follows:Class A — 1.54%, Class B — 2.23%, Class C — 2.23%, Class I — 1.14%, Class R1 — 1.89%, Class 1 — 1.10% . Had the fee waivers and expense limitations not been in place, the gross expenses would be as follows:Class A — 5. 60%, Class B — 14.63%, Class C — 10.44%, Class I — 16.26%, Class R1 — 24.21%, Class 1 — 3.82% .

The returns reflect past results and should not be considered indicative of future performance. The return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, the Fund’s current performance may be higher or lower than the performance shown. For performance data current to the most recent month end, please call 1-800-225-5291 or visit the Fund’s Web site at www.jhfunds.com.

The performance table above and the chart on the next page do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

The Fund’s performance results reflect any applicable expense reductions, without which the expenses would increase and results would have been less favorable.

Performance is calculated with an opening price (prior day’s close) on the inception date.

¹ Effective June 12, 2006, shareholders of the former GMO Small/Mid Cap Growth Fund (the Predecessor Fund) became owners of that number of full and fractional shares of John Hancock Growth Opportunities Fund. Additionally, the accounting and performance history of the former GMO Small/Mid Cap Growth Fund was redesignated as that of Class A of John Hancock Growth Opportunities Fund.

² Performance linked to the Predecessor Fund.

³ For certain types of investors as described in the Fund’s Class I, Class R1 and Class 1 share prospectuses.

Annual report | Growth Opportunities Fund

7

A look at performance

Growth of $10,000

This chart shows what happened to a hypothetical $10,000 investment in Growth Opportunities Fund Class A shares¹ for the period indicated. For comparison, we’ve shown the same investment in the Russell 2500 Growth Index.

			With maximum
Class	Period beginning	Without sales charge	sales charge	Index
B	6-12-06	$9,352	$8,982	$10,850
C3	6-12-06	9,356	9,356	10,850
I4	6-12-06	9,524	9,524	10,850
R14	6-12-06	9,424	9,424	10,850
14	6-12-06	9,533	9,533	10,850

Assuming all distributions were reinvested for the period indicated, the table above shows the value of a $10,000 investment in the Fund’s Class B, Class C, Class I, Class R1 and Class 1 shares, respectively, as of February 29, 2008. Performance of the classes will vary based on the difference in sales charges paid by shareholders investing in the different classes and the fee structure of those classes.

Russell 2500 Growth Indexis an unmanaged index containing those securities in the Russell 2500 Index with a greater-than-average growth orientation.

It is not possible to invest directly in an index. Index figures do not reflect sales charges, which would have resulted in lower values if they did.

¹ Performance linked to the Predecessor Fund.

² NAV represents net asset value and POP represents public offering price.

³ No contingent deferred sales charge applicable.

⁴ For certain types of investors as described in the Fund’s Class I, Class R1 and Class 1 share prospectuses.

Growth Opportunities Fund | Annual report

8

Your expenses

These examples are intended to help you understand your ongoing operating expenses.

Understanding fund expenses

As a shareholder of the Fund, you incur two types of costs:

■ Transaction costs which include sales charges (loads) on purchases or redemptions (varies by share class), minimum account fee charge, etc.

■Ongoing operating expenses including management fees, distribution and service fees (if applicable), and other fund expenses.

We are going to present only your ongoing operating expenses here.

Actual expenses/actual returns

This example is intended to provide information about your fund’s actual ongoing operating expenses, and is based on your fund’s actual return. It assumes an account value of $1,000.00 on September 1, 2007, with the same investment held until February 29, 2008.

	Account value	Ending value	Expenses paid during
	on 9-1-07	on 2-29-08	period on 2-29-081
Class A	$1,000.00	$863.38	$7.23
Class B	1,000.00	860.20	10.41
Class C	1,000.00	860.26	10.45
Class I	1,000.00	864.17	5.28
Class R1	1,000.00	863.65	6.72
Class 1	1,000.00	865.00	5.38

Together with the value of your account, you may use this information to estimate the operating expenses that you paid over the period. Simply divide your account value at February 29, 2008, by $1,000.00, then multiply it by the “expenses paid” for your share class from the table above. For example, for an account value of $8,600.00, the operating expenses should be calculated as follows:

Annual report | Growth Opportunities Fund

9

Your expenses

Hypothetical example for comparison purposes

This table allows you to compare your fund’s ongoing operating expenses with those of any other fund. It provides an example of the Fund’s hypothetical account values and hypothetical expenses based on each class’s actual expense ratio and an assumed 5% annualized return before expenses (which is not your fund’s actual return). It assumes an account value of $1,000.00 on September 1, 2007, with the same investment held until February 29, 2008. Look in any other fund shareholder report to find its hypothetical example and you will be able to compare these expenses.

	Account value	Ending value	Expenses paid during
	on 9-1-07	on 2-29-08	period on 2-29-081
Class A	$1,000.00	$1,017.11	$7.82
Class B	1,000.00	1,013.67	11.27
Class C	1,000.00	1,013.63	11.31
Class I	1,000.00	1,019.19	5.72
Class R1	1,000.00	1,017.65	7.27
Class 1	1,000.00	1,019.10	5.82

Remember, these examples do not include any transaction costs, such as sales charges; therefore, these examples will not help you to determine the relative total costs of owning different funds. If transaction costs were included, your expenses would have been higher. See the prospectus for details regarding transaction costs.

¹ Expenses are equal to the Fund’s annualized expense ratio of 1.56%, 2.25%, 2.26%, 1.14%, 1.45% and 1.16% for Class A, Class B, Class C, Class I, Class R1 and Class 1, respectively, multiplied by the average account value over the period, multiplied by the number of days in most recent fiscal half year/366 (to reflect the one-half year period).

Growth Opportunities Fund | Annual report

10

Portfolio summary

Top 10 holdings1
Jacobs Engineering Group, Inc.	2.0%	Mettler-Toldeo International, Inc.	1.5%
Intuitive Surgical, Inc.	1.9%	Priceline.com, Inc.	1.4%
FLIR Systems, Inc.	1.6%	Energizer Holdings, Inc.	1.3%
FMC Technologies, Inc.	1.6%	Waters Corp.	1.3%
CF Industries Holdings, Inc.	1.5%	Covance, Inc.	1.2%
Sector distribution1
Consumer non-cyclical	27%	Basic materials	5%
Industrial	21%	Financial	5%
Consumer cyclical	12%	Communications	5%
Technology	10%	Utilities	1%
Energy	6%	Other	8%

¹ As a percentage of net assets on February 29, 2008.

Annual report | Growth Opportunities Fund

11

F I N A N C I A L  S T A T E M E N T S

Fund’s investments

Securities owned by the Fund on 2-29-08

This schedule is divided into three main categories: common stocks, short-term investments and repurchase agreements. Common stocks are further broken down by industry group. Repurchase agreements, which represent the Fund’s cash position, are listed last.

Issuer	Shares	Value
Common stocks 97.82%		$85,604,551
(Cost $91,216,394)
Advertising 0.06%		51,456
Getty Images, Inc. *	1,600	51,456
Aerospace 1.19%		1,041,061
Alliant Techsystems, Inc. *	3,400	356,796
BE Aerospace, Inc. *	2,700	92,610
HEICO Corp. (a)	500	21,900
Innovative Solutions & Support, Inc. * (a)	1,800	16,290
Orbital Sciences Corp., Class A *	900	19,485
Spirit Aerosystems Holdings, Inc., Class A *	2,100	56,742
Teledyne Technologies, Inc. *	4,700	208,680
Woodward Governor Company	9,400	268,558
Agriculture 0.16%		139,482
Fresh Del Monte Produce, Inc. *	4,200	139,482
Air Travel 0.06%		50,554
Copa Holdings SA, Class A	1,400	50,554
Apparel & Textiles 2.23%		1,951,523
Bebe Stores, Inc.	4,000	48,840
Crocs, Inc. * (a)	11,800	286,976
Deckers Outdoor Corp. *	6,300	697,032
Guess?, Inc.	21,200	871,956
Maidenform Brands, Inc. *	900	11,133
Volcom, Inc. *	1,800	35,586
Auto Parts 1.36%		1,189,055
Amerigon, Inc. *	1,200	21,792
BorgWarner, Inc.	5,300	228,483
Gentex Corp.	23,400	377,208
LKQ Corp. *	10,700	227,268
O’Reilly Automotive, Inc. *	12,400	334,304
Auto Services 0.79%		691,556
Copart, Inc. *	16,600	691,556
Banking 0.31%		275,077
Bank of Hawaii Corp.	600	28,812

See notes to financial statements

Growth Opportunities Fund | Annual report

12

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
Banking (continued)
Frontier Financial Corp. (a)	1,400	$20,972
Greenhill & Company, Inc. (a)	300	19,503
S & T Bancorp, Inc.	900	25,515
SVB Financial Group *	2,100	95,130
TrustCo Bank Corp., NY (a)	2,800	24,220
Valley National Bancorp (a)	1,500	28,020
WestAmerica Bancorp (a)	500	23,665
Wilmington Trust Corp.	300	9,240
Biotechnology 2.87%		2,513,724
Applera Corp.	3,100	104,501
Bio-Rad Laboratories, Inc., Class A *	1,400	132,216
Charles River Laboratories International, Inc. *	5,600	328,048
Illumina, Inc. *	300	21,723
Immucor, Inc. *	21,200	631,760
Invitrogen Corp. *	10,800	912,492
Techne Corp. *	5,600	382,984
Broadcasting 0.41%		361,120
Discovery Holding Company *	16,000	361,120
Building Materials & Construction 0.17%		149,853
EMCOR Group, Inc. *	2,900	69,861
KBR, Inc. *	2,400	79,992
Business Services 7.78%		6,810,202
ABM Industries, Inc.	6,100	121,146
Affiliated Computer Services, Inc., Class A *	400	20,300
Alliance Data Systems Corp. *	1,100	55,693
DST Systems, Inc. *	1,400	98,364
Dun & Bradstreet Corp.	8,200	716,188
Equifax, Inc.	9,900	338,778
FactSet Research Systems, Inc.	19,400	1,021,216
Fair Isaac Corp.	900	20,880
FTI Consulting, Inc. *	9,200	584,200
Gartner Group, Inc., Class A *	1,700	32,147
Global Payments, Inc.	11,100	440,337
Global Sources, Ltd. * (a)	2,440	29,768
Healthcare Services Group, Inc.	9,500	187,910
Informatica Corp. *	3,000	52,380
Jacobs Engineering Group, Inc. *	21,800	1,750,322
Pre-Paid Legal Services, Inc. *	2,400	114,360
Resources Connection, Inc. *	5,200	83,720
ScanSource, Inc. *	700	23,779
SRA International, Inc., Class A *	600	14,400
Stanley, Inc. *	600	16,614
Syntel, Inc.	10,800	294,084
TeleTech Holdings, Inc. *	4,900	110,593

See notes to financial statements

Annual report | Growth Opportunities Fund

13

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
Business Services (continued)
Total Systems Services, Inc.	17,600	$391,248
Watson Wyatt Worldwide, Inc., Class A	5,500	291,775
Cellular Communications 0.03%		22,218
Novatel Wireless, Inc. *	2,100	22,218
Chemicals 4.04%		3,535,721
Albemarle Corp.	11,200	424,928
Celanese Corp., Series A	10,100	392,890
CF Industries Holdings, Inc.	10,900	1,330,672
ShengdaTech, Inc. * (a)	1,400	14,812
Sigma-Aldrich Corp.	16,200	891,324
Terra Industries, Inc. *	10,000	452,100
Valhi, Inc. (a)	1,500	28,995
Coal 0.19%		170,268
Alpha Natural Resources, Inc. *	4,200	170,268
Colleges & Universities 0.21%		179,685
Career Education Corp. * (a)	12,100	179,685
Commercial Services 0.55%		484,193
Chemed Corp.	6,200	295,802
Shaw Group, Inc. *	2,500	160,950
Team, Inc. *	900	27,441
Computers & Business Equipment 1.75%		1,534,827
Blue Coat Systems, Inc. *	3,000	70,440
CACI International, Inc., Class A *	600	26,196
Cogent, Inc. *	4,900	49,000
Foundry Networks, Inc. *	8,100	96,147
IHS, Inc., Class A *	400	24,660
Immersion Corp. *	2,300	19,389
Jack Henry & Associates, Inc.	7,900	185,887
MICROS Systems, Inc. *	11,800	378,072
National Instruments Corp.	1,500	38,790
NETGEAR, Inc. *	1,700	37,094
Radiant Systems, Inc. *	1,300	18,564
Stratasys, Inc. * (a)	7,100	133,196
Synaptics, Inc. *	2,900	77,691
Western Digital Corp. *	12,300	379,701
Construction & Mining Equipment 0.07%		58,422
Bucyrus International, Inc., Class A	400	39,952
Carbo Ceramics, Inc. (a)	500	18,470
Construction Materials 0.85%		745,900
Clarcor, Inc.	1,900	68,020
Martin Marietta Materials, Inc. (a)	6,300	677,880

See notes to financial statements

Growth Opportunities Fund | Annual report

14

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
Containers & Glass 0.27%		$234,355
Packaging Corp. of America	2,900	66,091
Silgan Holdings, Inc.	3,600	168,264
Correctional Facilities 0.06%		53,720
Corrections Corp. of America *	2,000	53,720
Cosmetics & Toiletries 1.24%		1,085,656
Alberto-Culver Company	6,200	166,160
Bare Escentuals, Inc. *	1,200	32,856
Chattem, Inc. * (a)	5,300	412,870
Estee Lauder Companies, Inc., Class A	1,200	51,096
International Flavors & Fragrances, Inc.	9,800	422,674
Crude Petroleum & Natural Gas 0.62%		542,663
Cabot Oil & Gas Corp.	1,500	74,625
Cimarex Energy Company	1,400	73,780
Contango Oil & Gas Company *	600	38,580
Patterson-UTI Energy, Inc.	2,300	54,579
Unit Corp. *	3,500	193,025
VAALCO Energy, Inc. *	1,900	8,474
Western Refining, Inc. (a)	5,000	99,600
Domestic Oil 2.51%		2,192,644
Atlas America, Inc.	1,000	60,470
Berry Petroleum Company, Class A	1,900	78,109
Continental Resources, Inc. *	800	22,464
Denbury Resources, Inc. *	20,200	644,178
Frontier Oil Corp.	19,600	699,916
Holly Corp.	8,300	443,137
Oil States International, Inc. *	4,200	177,072
Range Resources Corp.	1,100	67,298
Drugs & Health Care 0.62%		543,250
CV Therapeutics, Inc. * (a)	5,000	29,200
Meridian Bioscience, Inc.	15,000	514,050
Educational Services 2.24%		1,958,038
Capella Education Company *	600��	31,626
DeVry, Inc.	6,800	298,792
ITT Educational Services, Inc. *	18,000	993,960
Renaissance Learning, Inc. (a)	2,000	26,320
Strayer Education, Inc.	3,700	576,090
Universal Technical Institute, Inc. *	2,500	31,250
Electrical Equipment 2.51%		2,198,634
AMETEK, Inc.	8,300	353,497
Baldor Electric Company	1,300	37,271
FLIR Systems, Inc. *	48,800	1,388,848
General Cable Corp. *	1,400	86,408
Hubbell, Inc., Class B	3,000	136,110

See notes to financial statements

Annual report | Growth Opportunities Fund

15

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
Electrical Equipment (continued)
Universal Electronics, Inc. *	1,500	$34,050
Varian, Inc. *	3,000	162,450
Electrical Utilities 0.35%		310,164
Quanta Services, Inc. *	4,300	102,684
Reliant Energy, Inc. *	9,100	207,480
Electronics 1.82%		1,589,887
Amphenol Corp., Class A	10,100	373,397
AVX Corp.	1,400	17,556
Cynosure, Inc. *	1,200	28,716
II-VI, Inc. *	7,700	252,098
Itron, Inc. *	500	47,665
Multi-Fineline Electronix, Inc. *	2,000	42,540
Synopsys, Inc. *	3,100	71,951
Teleflex, Inc.	2,200	124,410
Trimble Navigation, Ltd. *	23,100	631,554
Energy 1.78%		1,561,009
Alon USA Energy, Inc.	4,100	64,329
Energen Corp.	9,000	540,000
First Solar, Inc. *	2,100	430,920
SunPower Corp., Class A. * (a)	8,000	525,760
Financial Services 4.51%		3,945,456
Bankrate, Inc. *	2,300	97,198
Broadridge Financial Solutions, Inc.	2,800	53,620
Cohen & Steers, Inc. (a)	5,000	125,900
Eaton Vance Corp.	30,400	968,240
FCStone Group, Inc. *	500	23,320
Federated Investors, Inc., Class B	10,800	438,264
Interactive Data Corp.	10,900	318,934
IntercontinentalExchange, Inc. *	2,400	312,720
Janus Capital Group, Inc.	11,000	266,420
Nasdaq Stock Market, Inc. *	600	24,906
Portfolio Recovery Associates, Inc. * (a)	800	29,216
SEI Investments Company	39,900	997,899
Stifel Financial Corp. * (a)	1,000	43,590
The First Marblehead Corp. (a)	4,100	49,323
Waddell & Reed Financial, Inc., Class A	4,700	147,298
World Acceptance Corp. *	1,600	48,608
Food & Beverages 2.42%		2,118,244
Coca-Cola Bottling Company	300	16,407
Flowers Foods, Inc.	11,600	262,856
Green Mountain Coffee Roasters, Inc. * (a)	5,700	173,907
Hansen Natural Corp. *	15,400	639,100
Hormel Foods Corp.	10,000	408,600
J.M. Smucker Company	2,300	117,737

See notes to financial statements

Growth Opportunities Fund | Annual report

16

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
Food & Beverages (continued)
M & F Worldwide Corp. *	3,400	$125,902
McCormick & Company, Inc.	9,400	323,830
Ralcorp Holdings, Inc. *	900	49,905
Funeral Services 0.16%		139,320
Service Corporation International	12,900	139,320
Gas & Pipeline Utilities 0.14%		121,658
Equitable Resources, Inc.	600	36,972
Global Industries, Ltd. *	4,600	84,686
Healthcare Products 8.58%		7,507,573
ArthroCare Corp. *	3,900	156,585
DENTSPLY International, Inc.	25,100	979,904
Edwards Lifesciences Corp. *	3,900	170,079
Gen-Probe, Inc. *	7,100	339,451
Haemonetics Corp. *	300	17,430
Henry Schein, Inc. *	11,100	664,002
Herbalife, Ltd.	2,200	92,026
IDEXX Laboratories, Inc. *	17,000	942,990
Intuitive Surgical, Inc. *	6,000	1,691,520
Kinetic Concepts, Inc. *	10,600	544,734
LifeCell Corp. *	4,300	173,505
Patterson Companies, Inc. *	16,100	566,720
ResMed, Inc. *	3,900	157,911
Respironics, Inc. *	11,900	781,592
USANA Health Sciences, Inc. * (a)	2,000	62,360
Varian Medical Systems, Inc. *	2,800	146,860
Zoll Medical Corp. *	800	19,904
Healthcare Services 3.04%		2,661,864
Cerner Corp. *	4,900	212,905
Covance, Inc. *	12,400	1,046,684
Emergency Medical Services Corp., Class A * (a)	3,600	89,028
Health Net, Inc. *	3,000	131,820
Lincare Holdings, Inc. *	6,800	221,000
Obagi Medical Products, Inc. *	1,300	20,228
Pediatrix Medical Group, Inc. *	9,900	653,499
Weight Watchers International, Inc.	6,100	286,700
Hotels & Restaurants 1.02%		896,283
Brinker International, Inc.	2,400	44,256
Buffalo Wild Wings, Inc. *	2,800	64,876
Chipotle Mexican Grill, Inc., Class A * (a)	1,600	158,880
Choice Hotels International, Inc.	9,200	298,540
Jack in the Box, Inc. *	11,900	312,613
P.F. Chang’s China Bistro, Inc. *	600	17,118
Household Appliances 0.29%		255,354
The Toro Company	5,300	255,354

See notes to financial statements

Annual report | Growth Opportunities Fund

17

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
Household Products 2.59%		$2,265,579
Church & Dwight, Inc.	12,100	646,866
Energizer Holdings, Inc. *	12,700	1,178,941
Tempur-Pedic International, Inc. (a)	7,600	132,392
Tupperware Brands Corp.	8,000	291,840
WD-40 Company	500	15,540
Industrial Machinery 6.04%		5,281,727
Dionex Corp. *	3,500	258,370
Donaldson Company, Inc.	6,900	290,904
Dresser-Rand Group, Inc. *	10,400	354,328
Flowserve Corp.	2,700	294,030
FMC Technologies, Inc. *	24,400	1,382,504
Graco, Inc.	6,300	218,673
IDEX Corp.	5,500	165,880
Middleby Corp. * (a)	5,000	340,000
Pall Corp.	18,800	740,156
The Manitowoc Company, Inc.	23,300	949,242
Valmont Industries, Inc.	3,600	287,640
Industrials 0.48%		421,811
Fastenal Company (a)	4,400	178,904
Harsco Corp.	4,300	242,907
Insurance 1.76%		1,542,405
Alleghany Corp. *	200	72,200
Amtrust Financial Services, Inc.	2,200	36,740
Brown & Brown, Inc.	16,600	295,978
Erie Indemnity Company, Class A	5,300	261,555
HCC Insurance Holdings, Inc.	3,000	72,180
Markel Corp. *	600	278,850
Odyssey Re Holdings Corp.	2,700	97,686
Philadelphia Consolidated Holding Corp. *	11,800	400,256
Transatlantic Holdings, Inc.	400	26,960
International Oil 0.09%		76,258
Cheniere Energy, Inc. *	2,600	76,258
Internet Content 0.40%		346,722
Sohu.com, Inc. * (a)	7,400	333,592
Travelzoo, Inc. * (a)	1,300	13,130
Internet Retail 1.75%		1,533,692
Blue Nile, Inc. * (a)	5,500	242,880
PetMed Express, Inc. *	2,200	25,190
Priceline.com, Inc. * (a)	11,100	1,265,622
Internet Software 0.98%		854,002
eResearch Technology, Inc. *	3,700	44,252
Interwoven, Inc. *	700	9,485
McAfee, Inc. *	20,100	668,727

See notes to financial statements

Growth Opportunities Fund | Annual report

18

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
Internet Software (continued)
S1 Corp. *	2,800	$19,824
Sapient Corp. *	1,200	8,856
VASCO Data Security International, Inc. *	9,300	102,858
Leisure Time 0.19%		163,606
Bally Technologies, Inc. *	400	15,164
Polaris Industries, Inc. (a)	3,600	137,448
Premier Exhibitions, Inc. *	2,300	10,994
Life Sciences 2.26%		1,976,863
Dawson Geophysical Company *	300	19,761
PerkinElmer, Inc.	4,400	109,208
Pharmaceutical Product Development, Inc.	16,400	739,148
Waters Corp. *	18,600	1,108,746
Liquor 0.47%		411,206
Boston Beer Company, Inc. *	3,700	131,942
Central European Distribution Corp. *	4,800	279,264
Manufacturing 2.81%		2,455,629
AptarGroup, Inc.	8,900	333,572
Ceradyne, Inc. *	3,300	102,663
Kaydon Corp.	500	21,355
Mettler-Toledo International, Inc. *	13,100	1,279,870
Mine Safety Appliances Company	3,400	136,374
Raven Industries, Inc. (a)	5,500	161,040
Roper Industries, Inc.	6,700	377,880
Spartan Motors, Inc. (a)	2,650	21,545
Sturm Ruger & Company, Inc. *	2,700	21,330
Medical-Hospitals 0.36%		317,689
Sunrise Senior Living, Inc. *	1,400	38,332
VCA Antech, Inc. *	8,700	279,357
Metal & Metal Products 0.38%		336,335
Dynamic Materials Corp.	3,100	176,669
Kaiser Aluminum Corp.	600	44,010
Matthews International Corp., Class A	1,900	85,234
Sun Hydraulics, Inc.	1,400	30,422
Mining 0.75%		654,518
Cleveland-Cliffs, Inc.	5,300	633,138
General Moly, Inc. * (a)	2,000	21,380
Mobile Homes 0.18%		161,544
Thor Industries, Inc.	5,300	161,544
Office Furnishings & Supplies 0.04%		38,779
Herman Miller, Inc.	1,300	38,779

See notes to financial statements

Annual report | Growth Opportunities Fund

19

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
Petroleum Services 2.06%		$1,799,310
Atwood Oceanics, Inc. *	3,400	316,506
Bolt Technology Corp. *	900	15,651
Delek US Holdings, Inc.	1,700	26,826
Flotek Industries, Inc. * (a)	2,500	56,825
GulfMark Offshore, Inc. *	500	25,330
Helmerich & Payne, Inc.	3,600	161,388
Oceaneering International, Inc. *	12,300	738,000
Tesoro Corp.	1,700	63,138
Tidewater, Inc.	4,900	275,135
W-H Energy Services, Inc. *	500	31,435
Willbros Group, Inc. *	2,600	89,076
Pharmaceuticals 0.73%		638,992
Barr Pharmaceuticals, Inc. *	2,400	113,160
Endo Pharmaceutical Holdings, Inc. *	11,250	295,425
Hi-Tech Pharmacal Company, Inc. *	1,400	15,596
Onyx Pharmaceuticals, Inc. *	4,100	112,012
United Therapeutics Corp. *	600	50,502
Warner Chilcott, Ltd., Class A *	3,100	52,297
Publishing 0.17%		149,568
John Wiley & Sons, Inc., Class A	4,100	149,568
Real Estate 0.21%		185,096
Alexander’s, Inc., REIT *	100	30,245
Entertainment Properties Trust, REIT	2,000	93,739
Jones Lang LaSalle, Inc.	800	61,112
Retail Trade 6.44%		5,639,705
Abercrombie & Fitch Company, Class A	1,700	131,801
Advance Auto Parts, Inc.	7,550	253,227
Aeropostale, Inc. *	16,800	451,248
American Eagle Outfitters, Inc.	12,100	258,577
Chico’s FAS, Inc. *	9,900	92,169
Dick’s Sporting Goods, Inc. *	1,500	41,370
Dollar Tree Stores, Inc. *	12,600	338,058
Family Dollar Stores, Inc.	1,000	19,150
First Cash Financial Services, Inc. *	1,000	9,350
Fossil, Inc. *	13,200	424,776
GameStop Corp., Class A *	20,100	851,436
Hibbett Sports, Inc. *	1,700	26,860
J. Crew Group, Inc. *	2,000	80,100
MSC Industrial Direct Company, Inc., Class A	11,900	482,902
PetSmart, Inc.	3,800	81,814
Ross Stores, Inc.	3,700	103,045
The Buckle, Inc.	4,350	197,490

See notes to financial statements

Growth Opportunities Fund | Annual report

20

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
Retail Trade (continued)
The Men’s Wearhouse, Inc.	4,600	$105,984
Tiffany & Company	23,000	865,720
Tractor Supply Company *	700	26,208
Urban Outfitters, Inc. *	26,200	754,036
Williams-Sonoma, Inc. (a)	1,900	44,384
Sanitary Services 1.16%		1,011,790
Darling International, Inc. *	3,300	45,870
Nalco Holding Company	4,800	103,680
Stericycle, Inc. *	16,000	862,240
Semiconductors 1.75%		1,528,708
Advanced Analogic Technologies, Inc. *	5,200	33,800
Cree, Inc. * (a)	8,800	271,920
Cypress Semiconductor Corp. *	1,200	26,088
Intersil Corp., Class A	8,000	186,160
Microsemi Corp. *	900	19,575
Netlogic Microsystems, Inc. *	800	18,880
ON Semiconductor Corp. *	25,600	153,600
Power Integrations, Inc. *	1,600	42,080
QLogic Corp. *	1,900	30,115
Semtech Corp. *	9,500	121,030
Silicon Laboratories, Inc. *	2,200	68,090
Varian Semiconductor Equipment Associates, Inc. *	16,500	557,370
Software 2.16%		1,891,483
Activision, Inc. *	2,500	68,125
Ansoft Corp. *	6,200	150,784
ANSYS, Inc. *	13,100	489,547
BMC Software, Inc. *	6,700	216,276
Citrix Systems, Inc. *	3,900	128,427
Concur Technologies, Inc. *	4,700	137,428
EPIQ Systems, Inc. *	1,500	20,400
FARO Technologies, Inc. *	1,100	36,025
Macrovision Corp. *	1,000	15,290
Manhattan Associates, Inc. *	2,900	63,974
NAVTEQ Corp. *	3,600	269,820
Nuance Communications, Inc. *	2,400	39,480
Omniture, Inc. *	2,500	57,450
Red Hat, Inc. *	900	16,047
Riverbed Technology, Inc. *	2,500	50,150
Solera Holdings, Inc. *	800	18,984
SPSS, Inc. *	1,000	38,030
Synchronoss Technologies, Inc. *	2,500	40,200
Websense, Inc. *	1,800	35,046

See notes to financial statements

Annual report | Growth Opportunities Fund

21

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
Steel 0.28%		$242,052
AK Steel Holding Corp. *	4,600	242,052
Telecommunications Equipment & Services 0.82%		714,251
ADTRAN, Inc.	5,900	108,678
Atheros Communications, Inc. *	700	17,024
CommScope, Inc. *	4,200	175,896
Comtech Telecommunications Corp. *	1,500	65,070
J2 Global Communications, Inc. *	2,500	53,800
NTELOS Holdings Corp.	1,100	23,463
Polycom, Inc. *	12,400	270,320
Toys, Amusements & Sporting Goods 0.91%		793,449
Hasbro, Inc.	18,200	469,014
Marvel Entertainment, Inc. *	12,900	324,435
Transportation 0.18%		155,463
Genco Shipping & Trading, Ltd. (a)	400	23,308
Horizon Lines, Inc. (a)	2,300	46,391
Kirby Corp. *	1,100	49,588
Ship Finance International, Ltd. (a)	1,400	36,176
Trucking & Freight 0.16%		144,650
Forward Air Corp.	700	20,545
J.B. Hunt Transport Services, Inc.	2,200	60,214
Landstar Systems, Inc.	600	27,828
Oshkosh Truck Corp.	900	36,063
	Principal
Issuer, description, maturity date	amount	Value
Short-term investments 7.52%		$6,584,591
(Cost $6,584,591)
John Hancock Cash Investment Trust, 3.5681% (c) (f)	$6,584,591	6,584,591
Repurchase agreements 2.25%		$1,966,000
(Cost $1,966,000)
Repurchase Agreement with State Street Corp. dated 2-29-08
at 2.35% to be repurchased at $1,966,385 on 3-3-08, collateralized
by $2,030,000 Federal National Mortgage Association, 5.57%, due
7-14-28 (valued at $2,007,163, including interest)	$1,966,000	1,966,000
Total investments (Cost $99,766,985)† 107.59%		$94,155,142
Liabilities in excess of other assets (7.59%)		(6,645,432)
Total net assets 100.00%		$87,509,710

See notes to financial statements

Growth Opportunities Fund | Annual report

22

F I N A N C I A L  S T A T E M E N T S

Notes to Schedule of Investments

Percentages are stated as a percent of net assets.

REIT Real Estate Investment Trust

* Non-income producing.

(a) All or a portion of this security was out on loan.

(c) Investment is an affiliate of the Trust’s adviser or subadviser.

(f) John Hancock Cash Investment Trust is managed by MFC Global Investment Management (U.S.), LLC. The rate shown is the seven-day effective yield at period end.

† At February 29, 2008, the aggregate cost of investment securities for federal income tax purposes was $100,252,463. Net unrealized depreciation aggregated $6,097,321, of which $4,185,905 related to appreciated investment securities and $10,283,226 related to depreciated investment securities.

See notes to financial statements

Annual report | Growth Opportunities Fund

23

F I N A N C I A L  S T A T E M E N T S

Financial statements

Statement of assets and liabilities 2-29-08

This Statement of Assets and Liabilities is the Fund’s balance sheet. It shows the value of what the Fund owns, is due and owes. You’ll also find the net asset value and the maximum public offering price per share.

Assets
Investments in unaffiliated issuers, at value (cost $91,216,394) including
$6,455,481 of securities loaned (Note 2)	$85,604,551
Repurchase agreement, at value (cost $1,966,000) (Note 2)	1,966,000
Investments in affiliated issuers, at value (cost $6,584,591) (Note 2)	6,584,591
Total investments, at value (cost $99,766,985)	94,155,142
Cash	720
Cash collateral at broker for futures contracts	124,320
Receivable for fund shares sold	21,730
Dividends and interest receivable (net of tax)	26,476
Receivable for security lending income	246
Receivable due from adviser	91,291
Other assets	460
Total assets	94,420,385
Liabilities
Payable for fund shares repurchased	116,353
Payable upon return of securities loaned (Note 2)	6,584,591
Payable for futures variation margin	22,538
Payable to affiliates
Fund administration fees	1,643
Transfer agent fees	35,724
Distribution and service fees	43,886
Trustees’ fees	584
Other payables and accrued expenses	105,356
Total liabilities	6,910,675
Net assets
Capital paid-in	$140,762,116
Accumulated undistributed net realized gain (loss) on investments
and futures contracts	(47,614,138)
Net unrealized appreciation (depreciation) on investments and futures contracts	(5,638,268)
Net assets	$87,509,710

See notes to financial statements

Growth Opportunities Fund | Annual report

24

F I N A N C I A L  S T A T E M E N T S

Statement of assets and liabilities (continued)

Net asset value per share
The Funds have an unlimited number of shares authorized with no par
value. Net asset value is calculated by dividing the net assets of each class
of shares by the number of outstanding shares in the class.
Class A
Net assets	$71,748,117
Shares outstanding	3,456,827
Net asset value and redemption price per share	$20.76
Class B1
Net assets	$12,609,287
Shares outstanding	614,447
Net asset value and offering price per share	$20.52
Class C1
Net assets	$2,512,411
Shares outstanding	122,386
Net asset value and offering price per share	$20.53
Class I
Net assets	$12,619
Shares outstanding	604
Net asset value, offering price and redemption price per share	$20.902
Class R1
Net assets	$119,592
Shares outstanding	5,784
Net asset value, offering price and redemption price per share	$20.68
Class 1
Net assets	$507,684
Shares outstanding	24,269
Net asset value, offering price and redemption price per share	$20.92
Maximum public offering price per share
Class A (net asset value per share ÷ 95%)3	$21.85

¹ Redemption price per share is equal to the net asset value less any applicable contingent deferred sales charge.

² Net assets and shares outstanding have been rounded for presentation purposes. The net asset value is as reported on February 29, 2008.

³ On single retail sales of less than $50,000. On sales of $50,000 or more and on group sales the offering price is reduced.

See notes to financial statements

Annual report | Growth Opportunities Fund

25

F I N A N C I A L  S T A T E M E N T S

Statement of operations For the year ended 2-29-08

This 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.

Investment income
Dividends	$532,740
Securities lending	133,929
Interest	71,699
Income from affiliated issuers	32,201
Total investment income	770,569
Expenses
Investment management fees (Note 3)	685,750
Distribution and service fees (Note 3)	364,568
Transfer agent fees (Note 3)	171,780
Fund administration fees (Note 3)	21,947
Blue sky fees (Note 3)	81,252
Audit and legal fees	164,695
Printing and postage fees (Note 3)	48,138
Custodian fees	135,727
Trustees’ fees (Note 4)	4,116
Registration and filing fees	38,930
Miscellaneous	4,951
Total expenses	1,721,854
Less expense reductions (Note 3)	(299,874)
Net expenses	1,421,980
Net investment loss	(651,411)
Realized and unrealized gain (loss)
Net realized gain (loss) on
Investments in unaffiliated issuers	5,956,467
Net increase from payments by affiliates (Note 9)	172,697
Futures contracts	(332,537)
	5,796,627
Change in net unrealized appreciation (depreciation) of
Investments in unaffiliated issuers	(27,274,276)
Futures contracts	(15,969)
	(27,290,245)
Net realized and unrealized gain (loss)	(21,493,618)
Increase (decrease) in net assets from operations	($22,145,029)

See notes to financial statements

Growth Opportunities Fund | Annual report

26

F I N A N C I A L  S T A T E M E N T S

Statement of changes in net assets

These Statements of Changes in Net Assets show how the value of the Fund’s net assets has changed during the last two periods. The difference reflects earnings less expenses, any investment gains and losses, distributions, if any, paid to shareholders and the net of Fund share transactions.

	Year	Year
	ended	ended
	2-28-07	2-29-08
Increase (decrease) in net assets
From operations
Net investment loss	($15,019)	($651,411)
Net realized gain (loss)	145,591	5,796,627
Change in net unrealized appreciation (depreciation)	223,455	(27,290,245)
Increase (decrease) in net assets resulting from operations	354,027	(22,145,029)
Distributions to shareholders
From net realized gain
Class A	(38,393)	(17,472)
Class B	(2,305)	(3,315)
Class C	(5,246)	(663)
Class I	(1,806)	(7)
Class R1	(1,078)	(26)
Class 1	(1,082)	(69)
Total distributions	(49,910)	(21,552)
From Fund share transactions (Note 6)	4,626,956	102,847,160
Total increase (decrease)	4,931,073	80,680,579
Net assets
Beginning of year	1,898,058	6,829,131
End of year	$6,829,131	$87,509,710

See notes to financial statements

Annual report | Growth Opportunities Fund

27

F I N A N C I A L  S T A T E M E N T S

Financial highlights

CLASS A SHARES
Period ended	2-28-061	2-28-072	2-29-08
Per share operating performance
Net asset value, beginning of period	$21.31	$23.29	$24.34
Net investment income (loss)3	0.04	(0.07)4	(0.15)
Net realized and unrealized
gain (loss) on investments	1.94	1.36	(3.43)
Total from investment operations	1.98	1.29	(3.58)
Less distributions
From net realized gain	—	(0.24)	— 5
Net asset value, end of period	$23.29	$24.34	$20.76
Total return6 (%)	9.297	5.578,9	(14.69)8
Ratios and supplemental data
Net assets, end of period (in millions)	$2	$5	$72
Ratios (as a percentage of average net assets):
Expenses before reductions	5.4510	5.59	1.81
Expenses net of fee waivers, if any	0.4810	1.32	1.55
Expenses net of all fee waivers and credits	0.4810	1.32	1.54
Net investment income (loss)	0.4110	(0.34)4	(0.64)
Portfolio turnover (%)	437	96	26211

¹ Class A shares began operations on 9-16-05.

² Effective June 12, 2006, shareholders of the former GMO Small/Mid Cap Growth Fund (the Predecessor Fund) became owners of an equal number of full and fractional Class A shares of the John Hancock Growth Opportunities Fund. Additionally, the accounting and performance history of the former GMO Small/Mid Cap Growth Fund was redesignated as that of John Hancock Growth Opportunities Fund Class A.

³ Based on the average of the shares outstanding.

⁴ Net investment loss per share and ratio of net investment loss to average net assets reflects a special dividend received by the Fund which amounted to $0.03 per share and 0.14% of average net assets.

⁵ Less than $0.01 per share.

⁶ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁷ Not annualized.

⁸ Assumes dividend reinvestment.

⁹ Class A returns linked back to the Predecessor Fund.

¹⁰ Annualized.

¹¹ Excludes merger activity.

See notes to financial statements

Growth Opportunities Fund | Annual report

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F I N A N C I A L  S T A T E M E N T S

Financial highlights

CLASS B SHARES
Period ended	2-28-071	2-29-08
Per share operating performance
Net asset value, beginning of period	$22.17	$24.23
Net investment income (loss)2	(0.20)3	(0.31)
Net realized and unrealized gain
(loss) on investments	2.50	(3.40)
Total from investment operations	2.30	(3.71)
Less distributions
From net realized gain	(0.24)	— 4
Net asset value, end of period	$24.23	$20.52
Total return5,6 (%)	10.407	(15.29)
Ratios and supplemental data
Net assets, end of period (in millions)	— 8	$13
Ratios (as a percentage of average net assets):
Expenses before reductions	14.629	2.61
Expenses net of fee waivers, if any	2.229	2.25
Expenses net of all fee waivers and credits	2.229	2.24
Net investment income (loss)	(1.21)3,9	(1.34)
Portfolio turnover (%)	967	26210

¹ Class B shares began operations on 6-12-06.

² Based on the average of the shares outstanding.

³ Net investment loss per share and ratio of net investment loss to average net assets reflects a special dividend received by the Fund which amounted to $0.02 per share and 0.11% of average net assets.

⁴ Less than $0.01 per share.

⁵ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁶ Assumes dividend reinvestment.

⁷ Not annualized.

⁸ Less than $500,000.

⁹ Annualized.

¹⁰ Excludes merger activity.

See notes to financial statements

Annual report | Growth Opportunities Fund

29

F I N A N C I A L  S T A T E M E N T S

Financial highlights

CLASS C SHARES
Period ended	2-28-071	2-29-08
Per share operating performance
Net asset value, beginning of period	$22.17	$24.23
Net investment income (loss)2	(0.19)3	(0.32)
Net realized and unrealized
gain (loss) on investments	2.49	(3.38)
Total from investment operations	2.30	(3.70)
Less distributions
From net realized gain	(0.24)	— 4
Net asset value, end of period	$24.23	$20.53
Total return5,6 (%)	10.407	(15.25)
Ratios and supplemental data
Net assets, end of period (in millions)	$1	$3
Ratios (as a percentage of average net assets):
Expenses before reductions	10.438	3.14
Expenses net of fee waivers, if any	2.228	2.25
Expenses net of all fee waivers and credits	2.228	2.24
Net investment income (loss)	(1.15)3,8	(1.35)
Portfolio turnover (%)	967	2629

¹ Class C shares began operations on 6-12-06.

² Based on the average of the shares outstanding.

³ Net investment loss per share and ratio of net investment loss to average net assets reflects a special dividend received by the Fund which amounted to $0.03 per share and 0.11% of average net assets.

⁴ Less than $0.01 per share.

⁵ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁶ Assumes dividend reinvestment.

⁷ Not annualized.

⁸ Annualized.

⁹ Excludes merger activity.

See notes to financial statements

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F I N A N C I A L   S T A T E M E N T S

Financial highlights

CLASS I SHARES
Period ended	2-28-071	2-29-08
Per share operating performance
Net asset value, beginning of period	$22.17	$24.41
Net investment income (loss)2	(0.02)3	(0.07)
Net realized and unrealized
gain (loss) on investments	2.50	(3.44)
Total from investment operations	2.48	(3.51)
Less distributions
From net realized gain	(0.24)	— 4
Net asset value, end of period	$24.41	$20.90
Total return5,6 (%)	11.227	(14.36)
Ratios and supplemental data
Net assets, end of period (in millions)	— 8	— 8
Ratios (as a percentage of average net assets):
Expenses before reductions	16.269	12.17
Expenses net of fee waivers, if any	1.139	1.04
Expenses net of all fee waivers and credits	1.139	1.04
Net investment income (loss)	(0.10)3,9	(0.30)
Portfolio turnover (%)	967	26210

¹ Class I shares began operations on 6-12-06.

² Based on the average of the shares outstanding.

³ Net investment loss per share and ratio of net investment loss to average net assets reflects a special dividend received by the Fund which amounted to $0.03 per share and 0.11% of average net assets.

⁴ Less than $0.01 per share.

⁵ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁶ Assumes dividend reinvestment.

⁷ Not annualized.

⁸ Less than $500,000.

⁹ Annualized.

¹⁰ Excludes merger activity.

See notes to financial statements

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F I N A N C I A L  S T A T E M E N T S

Financial highlights

CLASS R1 SHARES
Period ended	2-28-071	2-29-08
Per share operating performance
Net asset value, beginning of period	$22.17	$24.27
Net investment income (loss)2	(0.14)3	(0.19)
Net realized and unrealized
gain (loss) on investments	2.48	(3.40)
Total from investment operations	2.34	(3.59)
Less distributions
From net realized gain	(0.24)	— 4
Net asset value, end of period	$24.27	$20.68
Total return5,6 (%)	10.587	(14.77)
Ratios and supplemental data
Net assets, end of period (in millions)	— 8	— 8
Ratios (as a percentage of average net assets):
Expenses before reductions	24.209	15.83
Expenses net of fee waivers, if any	1.889	1.64
Expenses net of all fee waivers and credits	1.889	1.64
Net investment income (loss)	(0.86)3,9	(0.78)
Portfolio turnover (%)	967	26210

¹ Class R1 shares began operations on 6-12-06.

² Based on the average of the shares outstanding.

³ Net investment loss per share and ratio of net investment loss to average net assets reflects a special dividend received by the Fund which amounted to $0.02 per share and 0.11% of average net assets.

⁴ Less than $0.01 per share.

⁵ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁶ Assumes dividend reinvestment.

⁷ Not annualized.

⁸ Less than $500,000.

⁹ Annualized.

¹⁰ Excludes merger activity.

See notes to financial statements

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F I N A N C I A L  S T A T E M E N T S

Financial highlights

CLASS 1 SHARES
Period ended	2-28-071	2-29-08
Per share operating performance
Net asset value, beginning of period	$22.17	$24.42
Net investment income (loss)2	(0.02)3	(0.05)
Net realized and unrealized
gain (loss) on investments	2.51	(3.45)
Total from investment operations	2.49	(3.50)
Less distributions
From net realized gain	(0.24)	— 4
Net asset value, end of period	$24.42	$20.92
Total return5,6 (%)	11.267	(14.31)
Ratios and supplemental data
Net assets, end of period (in millions)	— 8	$1
Ratios (as a percentage of average net assets):
Expenses before reductions	3.819	1.81
Expenses net of fee waivers, if any	1.099	1.09
Expenses net of all fee waivers and credits	1.099	1.09
Net investment income (loss)	(0.10)3,9	(0.22)
Portfolio turnover (%)	967	26210

¹ Class 1 shares began operations on 6-12-06.

² Based on the average of the shares outstanding.

³ Net investment loss per share and ratio of net investment loss to average net assets reflects a special dividend received by the Fund which amounted to $0.02 per share and 0.10% of average net assets.

⁴ Less than $0.01 per share.

⁵ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁶ Assumes dividend reinvestment.

⁷ Not annualized.

⁸ Less than $500,000.

⁹ Annualized.

¹⁰ Excludes merger activity.

See notes to financial statements

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Notes to financial statements

1. Organization

John Hancock Growth Opportunities Fund (the Fund) is a non-diversified series of John Hancock Funds III (the Trust). The Trust was established as a Massachusetts business trust on June 9, 2005. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end investment management company. The investment objective of the Fund is to seek long-term capital growth.

John Hancock Life Insurance Company of New York (John Hancock New York) is a wholly owned subsidiary of John Hancock Life Insurance Company (U.S.A.) (John Hancock USA). John Hancock USA and John Hancock New York are indirect wholly owned subsidiaries of The Manufacturers Life Insurance Company (Manulife), which in turn is a wholly owned subsidiary of Manulife Financial Corporation (MFC), a publicly traded company. MFC and its subsidiaries are known collectively as “Manulife Financial.”

John Hancock Investment Management Services, LLC (the Adviser), a Delaware limited liability company controlled by John Hancock USA, serves as investment adviser for the Trust and John Hancock Funds, LLC (the Distributor), a Delaware limited liability company, an affiliate of the Adviser, serves as principal underwriter.

The Board of Trustees have authorized the issuance of multiple classes of shares of the Fund, including classes designated as Class A, Class B, Class C, Class I, Class R1 and Class 1 shares. Class A, Class B and Class C shares are open to all retail investors. Class I shares are offered without any sales charge to various institutional and certain individual investors. Class R1 shares are available only to certain retirement plans. Class 1 shares are sold only to certain exempt separate accounts of John Hancock USA and John Hancock New York.

The shares of each class represent an interest in the same portfolio of investments of the Fund, and have equal rights as to voting, redemptions, dividends and liquidation, except that certain expenses, subject to the approval of the Board of Trustees, may be applied differently to each class of shares in accordance with current regulations of the Securities and Exchange Commission (SEC) and the Internal Revenue Service. Shareholders of a class that bear distribution and service expenses under the terms of a distribution plan have exclusive voting rights to that distribution plan. Class B shares will convert to Class A shares eight years after purchase.

The Adviser and other affiliates of John Hancock USA owned 4,557 shares of beneficial interest of Class R1 on February 29, 2008.

The Fund is the accounting and performance successor to the GMO Small/Mid Cap Growth Fund (the Predecessor Fund), a diversified open-end management investment company organized as a Massachusetts business trust. On June 12, 2006, the Fund acquired substantially all the assets and assumed the liabilities of the Predecessor Fund pursuant to an agreement and plan of reorganization, in exchange for Class A shares of the Fund.

2. Significant accounting policies

In the preparation of the financial statements, the Fund follows the policies described below. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results may differ from these estimates.

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Security valuation

The net asset value of the shares of the Fund is determined daily as of the close of the New York Stock Exchange (NYSE), normally at 4:00 P.M., Eastern Time. Short-term debt investments that have a remaining maturity of 60 days or less are valued at amortized cost, and thereafter assume a constant amortization to maturity of any discount or premium, which approximates market value. Investments in John Hancock Cash Investment Trust (JHCIT), an affiliate of the John Hancock Advisers, LLC (JHA), a wholly owned subsidiary of John Hancock Financial Services, Inc., a subsidiary of MFC, are valued at their net asset value each business day. All other securities held by the Fund are valued at the last sale price or official closing price (closing bid price or last evaluated quote if no sale has occurred) as of the close of business on the principal securiti es exchange (domestic or foreign) on which they trade or, lacking any sales, at the closing bid price. Securities traded only in the over-the-counter market are valued at the last bid price quoted by brokers making markets in the securities at the close of trading. Securities for which there are no such quotations, principally debt securities, are valued based on the evaluated prices provided by an independent pricing service, which utilizes both dealer-supplied and electronic data processing techniques, which take into account factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other market data.

Other assets and securities for which no such quotations are readily available are valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees. Generally, trading in non-U.S. securities is substantially completed each day at various times prior to the close of trading on the NYSE. The values of such securities used in computing the net asset value of a Fund’s shares are generally determined as of such times. Occasionally, significant events that affect the values of such securities may occur between the times at which such values are generally determined and the close of the NYSE. Upon such an occurrence, these securities will be valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees.

In deciding whether to make a fair value adjustment to the price of a security, the Board of Trustees or their designee may review a variety of factors, including developments in foreign markets, the performance of U.S. securities markets and the performance of instruments trading in U.S. markets that represent foreign securities and baskets of foreign securities. The Fund may also fair value securities in other situations, for example, when a particular foreign market is closed, but the Fund is calculating the net asset value. In view of these factors, it is likely that Funds investing significant amounts of assets in securities in foreign markets will be fair valued more frequently than Funds investing signifi-cant amounts of assets in frequently traded, U.S. exchange listed securities of large-capitalization U.S. issuers.

For purposes of determining when fair value adjustments may be appropriate with respect to Funds that invest in securities in foreign markets that close prior to the NYSE, the Fund will, on an ongoing basis, monitor for “sig-nificant market events.” A significant market event may be a certain percentage change in the value of an index or of certain Exchange Traded Funds that track foreign markets in which Funds have significant investments. If a significant market event occurs due to a change in the value of the index or of Exchange Traded Funds, the pricing for the Fund will promptly be reviewed and potential adjustments to the net asset value of the Fund will be recommended to the Trust’s Pricing Committee when applicable.

Fair value pricing of securities is intended to help ensure that the net asset value of the Fund’s shares reflects the value of the Fund’s securities as of the close of the NYSE (as opposed to a value which is no longer accurate as of such close), thus limiting the opportunity for aggressive traders to purchase shares of the Fund at deflated prices, reflecting stale security

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valuations, and to promptly sell such shares at a gain. However, a security’s valuation may differ depending on the method used for determining value and no assurance can be given that fair value pricing of securities will successfully eliminate all potential opportunities for such trading gains.

New accounting pronouncements

In September 2006, Financial Accounting Standards Board (FASB) Standard No. 157,  Fair Value Measurements (FAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. FAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosure about fair value measurements. As of February 29, 2008, management does not believe the adoption of FAS 157 will impact the amounts reported in the financial statements; however, additional disclosures regarding pricing sources will be required about the inputs used to develop the measurements of fair value and the related realized and unrealized gain/loss for certain securities valued by significant unobservable market inputs.

In March 2008, FASB No. 161 (FAS 161),  Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133 (FAS 133), was issued and is effective for fiscal years beginning after November 15, 2008. FAS 161 amends and expands the disclosure requirements of FAS 133 in order to provide financial statement users an understanding of a company’s use of derivative instruments, how derivative instruments are accounted for under FAS 133 and related interpretations and how these instruments affect a company’s financial position, performance, and cash flows. FAS 161 requires companies to disclose information detailing the objectives and strategies for using derivative instruments, the level of derivative activity entered into by the company, and any credit risk-related contingent features of the agreements. Management is currently evaluating the adoption of FAS 1 61 on the Fund’s financial statement disclosures

Guarantees and indemnifications

Under the Trust’s organizational documents, its Officers and Trustees are indemnified against certain liability arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust that have not yet occurred.

Repurchase agreements

The Fund may enter into repurchase agreements. When the Fund enters into a repurchase agreement through its custodian, it receives delivery of securities, the amount of which at the time of purchase and each subsequent business day is required to be maintained at such a level that the market value is generally at least 102% of the repurchase amount. The Fund will take constructive receipt of all securities underlying the repurchase agreements it has entered into until such agreements expire. If the seller defaults, the Fund would suffer a loss to the extent that proceeds from the sale of underlying securities were less than the repurchase amount. The Fund may enter into repurchase agreements maturing within seven days with domestic dealers, banks or other finan-cial institutions deemed to be creditworthy by the Adviser. Collateral for certain tri-party repurchase agreements is held at the custodian bank in a segregated account for the benefit of the Fund and the counterp arty.

Security transactions and related investment income

Investment security transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment transactions are reported on trade date. Interest income is accrued as earned. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Foreign dividends are recorded on the ex-date or when the Fund becomes aware of the dividends from cash collections. Discounts/premiums are accreted/ amortized for financial reporting purposes.

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Non-cash dividends are recorded at the fair market value of the securities received. Debt obligations may be placed in a non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful, based upon consistently applied procedures.

From time to time, the Fund may invest in Real Estate Investment Trusts (REITs) and, as a result, will estimate the components of distributions from these securities. Distributions from REITs received in excess of income are recorded as a reduction of cost of investments and/or as a realized gain.

The Fund uses the specific identification method for determining realized gain or loss on investments for both financial statement and federal income tax reporting purposes.

Allocations of income and expenses

All income, expenses (except class-specific expenses), and realized and unrealized gain/ loss are allocated to each class of shares based upon the relative net assets of each class. Dividends to shareholders from net investment income are determined at a class level and distributions from capital gains are determined at a Fund level.

Expenses not directly attributable to the Fund or share classes are allocated based on the relative share of net assets of the Fund or share class at the time the expense was incurred. Class-specific expenses, as detailed in Note 3, are accrued daily and charged directly to the respective share classes.

Securities lending

The Fund may lend portfolio securities from time to time in order to earn additional income. The Fund retains beneficial ownership of the securities it has loaned and continues to receive interest and dividends paid by the issuer of securities and to participate in any changes in their value. On the settlement date of the loan, the Fund receives collateral against the loaned securities and maintain collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. Any cash collateral received is invested in the JHCIT. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. The Fund receives compensation for lending its securities either in the form of fees, guarantees, and/or by retaining a portion of interest on the investment of any cash received as collateral.

The Fund has entered into an agreement with Morgan Stanley & Co. Incorporated and MS Securities Services Inc. (collectively, Morgan Stanley), which permits the Fund to lend securities to Morgan Stanley on a principal basis. Morgan Stanley is the primary borrower of fund securities of the Fund. The risk of having one primary borrower of securities (as opposed to several borrowers in an agency relationship) is that should Morgan Stanley fail financially, all securities lent will be affected by the failure and by any delays in recovery of the securities (or in the rare event, loss of rights in the collateral).

Prior to May 8, 2007, cash collateral was invested in the State Street Navigator Securities Lending Portfolio. At February 29, 2008, the Fund loaned securities having a market value of $6,455,481 collateralized by securities in the amount of $6,584,591.

Futures

The Fund may purchase and sell financial futures contracts and options on those contracts. The Fund invests in contracts based on financial instruments, such as U.S. Treasury Bonds or Notes, or on securities indices, such as the Standard & Poor’s 500 Index, in order to hedge against a decline in the value of securities owned by the Fund.

Initial margin deposits required upon entering into futures contracts are satisfied by the delivery of specific securities or cash as collateral to the broker (the Fund’s agent in acquiring the futures position). If the position is closed out by taking an opposite position prior to the settlement date of the futures contract, a final

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determination of variation margin is made, cash is required to be paid to or released by the broker and the Fund realizes a gain or loss.

When the Fund sells a futures contract based on a financial instrument, the Fund becomes obligated to deliver that kind of instrument at an agreed upon date for a specified price. The Fund realizes a gain or loss depending on whether the price of an offsetting purchase is less or more than the price of the initial sale or on whether the price of an offsetting sale is more or less than the price of the initial purchase. The Fund could be exposed to risks if it could not close out futures positions because of an illiquid secondary market or the inability of counterparties to meet the terms of their contracts. Futures contracts are valued at the quoted daily settlement prices established by the exchange on which they trade.

The following is a summary of open futures contracts at February 29, 2008:

					UNREALIZED
	NUMBER OF		EXPIRATION	NOTIONAL	APPRECIATION
OPEN CONTRACTS	CONTRACTS	POSITION	DATE	VALUE	(DEPRECIATION)
Russell 2000 Mini
Index Futures	5	Long	Mar 2008	$343,400	($15,752)
S&P Mid 400 E-mini
Index Futures	5	Long	Mar 2008	394,700	(10,673)
					($26,425)

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 that is distributed to shareholders. Therefore, no federal income tax provision is required. For federal income tax purposes, the Fund had $33,521,041 of a capital loss car-ryforward available, to the extent provided by regulations, to offset future net realized capital gains. To the extent that such carryforward is used by the Fund, no capital gain distributions will be made. The loss carryforward expires as follows: February 28, 2009 — $8,514,595 and February 28, 2010 — $25,006,446. Availability of a certain amount of the loss carryforwards, which were acquired on May 25, 2007 in a merger with the John Hancock Mid Cap Growth Fund, may be limited in a given year. Net capital losses of $13,634,044 that are attributable to security transactions incurred after October 31, 2007 , are treated as arising on March 1, 2008, the first day of the Fund’s next taxable year.

The Fund has adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement 109 (FIN 48), at the beginning of the Fund’s fiscal year. FIN 48 prescribes a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not have a material impact on the Fund’s financial statements. Each of the Fund’s federal tax returns for the prior fiscal years remains subject to examination by the Internal Revenue Service.

Distribution of income and gains

The Fund records distributions to shareholders from net investment income and net realized gains, if any, on the ex-dividend date. During the year ended February 28, 2007, the tax character of distributions paid was as follows: ordinary income $37,434 and long-term capital gain $12,476. During the year ended February 29, 2008, the tax character of distributions paid was as follows: long-term capital gain $21,552. Distributions paid by the Fund with respect to each class of shares are calculated in the same manner, at the same time and are in the same amount, except for the effect of expenses that may be applied differently to each class.

As of February 29, 2008, there were no distributable earnings on a tax basis.

Such distributions and distributable earnings, on a tax basis, are determined in conformity with income tax regulations, which may differ from accounting principles generally accepted in the United States of America. Distributions

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in excess of tax basis earnings and profits, if any, are reported in the Fund’s financial statements as a return of capital.

Capital accounts within financial statements are adjusted for permanent book/tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book/ tax differences will reverse in a subsequent period. Permanent book/tax differences are primarily attributable to net operating losses, expiration of capital loss carryforwards and merger-related transactions.

3. Investment advisory and other agreements

The Trust has entered into an Investment Advisory Agreement with the Adviser. The Adviser is responsible for managing the corporate and business affairs of the Trust and for selecting and compensating subadvisers to handle the investment of the assets of the Fund, subject to the supervision of the Trust’s Board of Trustees. As compensation for its services, the Adviser receives an advisory fee from the Trust. Under the Advisory Agreement, the Fund pays a monthly management fee to the Adviser equivalent, on an annual basis, to the sum of: (a) 0.80% of the first $500,000,000 of the Fund’s aggregate daily net assets; (b) 0.78% of the next $500,000,000 of the Fund’s aggregate daily net assets; (c) 0.77% of the next $1,500,000,000 of the Fund’s aggregate daily net assets; and (d) 0.76% of the Fund’s aggregate daily net assets in excess of $2,500,000,000. Aggregate net assets include the net assets of the Fund and Growth Opportunities Trust, a series o f John Hancock Trust, and Growth Opportunities Fund, a series of John Hancock Funds II. The Adviser has a subadvisory agreement with Grantham, Mayo, Van Otterloo & Co. LLC. The Fund is not responsible for payment of the subadvisory fees.

The investment management fees incurred for the year ended February 29, 2008, were equivalent to an annual effective rate of 0.80% of the Fund’s average daily net assets.

Expense reimbursements

The Adviser has contractually agreed to reimburse or limit certain Fund level expenses to 0.24% of the Fund’s average annual net assets which are allocated pro rata to all share classes. Furthermore, the Adviser has voluntarily agreed to reimburse or limit these Fund level expenses to 0.20% for the period from May 26, 2007 to February 29, 2008. The agreements exclude taxes, portfolio brokerage commissions, interest, advisory fees, Rule 12b-1 fees, transfer agency fees, blue sky fees, printing and postage and litigation and indemnification expenses and other extraordinary expenses not incurred in the ordinary course of the Fund’s business. In addition, fees incurred under any agreement or plans of the Fund dealing with services for the shareholders and others with beneficial interest in shares of the Fund, are excluded.

In addition, the Adviser has agreed to reimburse or limit certain expenses for each share class. This agreement excludes taxes, portfolio brokerage commissions, interest and litigation and indemnification expenses and other extraordinary expenses not incurred in the ordinary course of the Fund’s business. In addition, fees incurred under any agreement or plans of the Fund dealing with services for the shareholders and others with beneficial interest in shares of the Fund, are excluded. The reimbursements and limits are such that these expenses will not exceed 1.54% for Class A shares, 2.24% for Class B, 2.24% for Class C, 1.00% for Class I, 1.64% for Class R1 and 1.09% for Class 1. Prior to September 28, 2007, the expense limitation for Class I was 1.14% . Accordingly, the expense reductions or reimbursements related to this agreement were $183,313, $45,918, $24,631, $19,164, $16,539 and $2,473 for Class A, Class B, Class C, Class I, Class R1 and Class 1, respective ly for the year ended February 29, 2008. The expense reimbursements and limits will continue in effect until June 30, 2008 and thereafter until terminated by the Adviser on notice to the Trust.

Fund administration fees

Pursuant to the Advisory Agreement, the Fund reimburses the Adviser for all expenses associated with providing the administrative, financial, legal, accounting and recordkeeping services of the Fund, including the preparation of all tax returns, annual, semiannual and periodic reports to shareholders and the

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preparation of all regulatory reports. These expenses are allocated based on the relative share of net assets of each class at the time the expense was incurred.

The fund administration fees incurred for the year ended February 29, 2008, were $21,947 with an annual effective rate of 0.03% of the Fund’s average daily net assets.

Distribution and shareholder servicing fees

The Trust has a Distribution Agreement with the Distributor. The Fund has adopted Distribution Plans with respect to Class A, Class B, Class C, Class R1 and Class 1, pursuant to Rule 12b-1 under the 1940 Act, to pay the Distributor for the services it provides as distributor of shares of the Fund. Accordingly, the Fund makes monthly payments to the Distributor at an annual rate not to exceed 0.30%, 1.00%, 1.00%, 0.50% and 0.05% of average daily net asset value of Class A, Class B, Class C, Class R1 and Class 1, respectively. A maximum of 0.25% of such payments may be service fees, as defined by the Conduct Rules of Financial Industry Regulatory Authority (formerly the National Association of Securities Dealers). Under the Conduct Rules, curtailment of a portion of the Fund’s 12b-1 payments could occur under certain circumstances.

In addition, the Fund has also adopted a Service Plan for Class R1 shares. Under the Service Plan, the Fund may pay up to 0.25% of Class R1 average daily net asset value for certain other services. There were no Service Plan fees incurred for the year ended February 29, 2008.

Sales charges

Class A shares are assessed up-front sales charges of up to 5.00% of net asset value of such shares. During the year ended February 29, 2008, the Fund was informed that the Distributor received net up-front sales charges of $49,772 with regard to sales of Class A shares. Of this amount, $5,770 was retained and used for printing prospectuses, advertising, sales literature and other purposes; $37,625 was paid as sales commissions to unrelated broker-dealers; and $6,377 was paid as sales commissions to sales personnel of Signator Investors, Inc. (Signator Investors), a related broker-dealer, an indirect subsidiary of MFC.

Class B shares that are redeemed within six years of purchase are subject to a contingent deferred sales charge (CDSC) at declining rates, beginning at 5.00% of the lesser of the current market value at the time of redemption or the original purchase cost of the shares being redeemed. Class C shares that are redeemed within one year of purchase are subject to a CDSC at a rate of 1.00% of the lesser of the current market value at the time of redemption or the original purchase cost of the shares being redeemed. Proceeds from the CDSCs are paid to the Distributor and are used, in whole or in part, to defray its expenses for providing distribution-related services to the Fund in connection with the sale of Class B and Class C shares. During the year ended February 29, 2008, CDSCs received by Distributor amounted to $26,428 for Class B shares and $420 for Class C shares.

Transfer agent fees

The Fund has a Transfer Agency Agreement with John Hancock Signature Services, Inc. (Signature Services), an indirect subsidiary of MFC. For Class A, Class B, Class C, Class I and Class R1 shares, the Fund pays a monthly transfer agent fee at an annual rate of 0.05% of each class’ average daily net assets, plus a fee based on the number of shareholder accounts and reimbursement for certain out-of-pocket expenses. Expenses not directly attributable to a particular class of shares are aggregated and allocated to each class on the basis of its relative net asset value. The Fund pays a monthly fee which is based on an annual rate of $15.00 for each Class A shareholder account, $17.50 for each Class B shareholder account, $16.50 for each Class C shareholder account and $15.00 for each Class R1 shareholder account.

Signature Services has agreed to limit the transfer agent fees so that such fees do not exceed 0.20% annually of Class A, Class B, Class C, Class I and Class R1 share average daily net assets. This agreement is effective until December 31, 2008. Signature Services reserves the right to terminate this limitation in the

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future. There were no transfer agent fee reductions for Class A, Class B, Class C, Class I and Class R1 shares, respectively, during the year ended February 29, 2008.

In addition, Signature Services has voluntarily agreed to further limit transfer agent fees for Class R1 shares so that such fees do not exceed 0.05% annually of each class’s average daily net assets. For the year ended February 29, 2008, the transfer agent fees reductions for Class R1 were $179.

In May 2007, the Fund began receiving earnings credits from its transfer agent as a result of uninvested cash balances. These credits are used to reduce a portion of the Fund’s transfer agent fees and out-of-pocket expenses. During the year ended February 29, 2008, the Fund’s transfer agent fees and out-of-pocket expenses were reduced by $7,657 for transfer agent credits earned.

Class level expenses for the year ended February 29, 2008, were as follows:

	Distribution and	Transfer		Printing and
Share class	service fees	agent fees	Blue sky fees	postage fees
Class A	$207,247	$136,441	$16,783	$39,243
Class B	128,950	29,279	15,557	6,611
Class C	27,611	5,726	15,396	1,687
Class I	—	94	17,637	321
Class R1	589	240	15,879	3
Class 1	171	—	—	273
Total	$364,568	$171,780	$81,252	$48,138

4. Trustees’ fees

The Trust compensates each Trustee who is not an employee of the Adviser or its affiliates. Total Trustees’ expenses are allocated to the Fund based on its average daily net asset value.

5. Line of credit

The Fund has entered into an agreement which enables them to participate in a $100 million unsecured committed line of credit with State Street Corporation. Borrowings will be made solely to temporarily finance the repurchase of capital shares. Interest is charged to the Fund based on its borrowings at a rate per annum equal to the Federal Funds rate plus 0.50%. In addition, a commitment fee of 0.05% per annum, payable at the end of each calendar quarter, based on the average daily-unused portion of the line of credit, is charged to the Fund on a prorated basis based on average net assets. Effective October 15, 2007, the commitment fee was changed from 0.07% to 0.05% . For the year ended February 29, 2008, there were no borrowings under the line of credit.

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6. Fund share transactions

Share activities for the Fund for the years ended February 28, 2007, and February 29, 2008, were as follows:

	Year ended 2-28-071		Year ended 2-29-08
	Shares	Amount	Shares	Amount
Class A shares
Sold	134,743	$3,150,486	199,710	$4,734,281
Issued in reorganization (Note 8)	—	—	3,812,316	97,964,692
Distributions reinvested	1,586	37,457	717	16,781
Repurchased	(4,238)	(100,934)	(769,487)	(18,231,640)
Net increase (decrease)	132,091	$3,087,009	3,243,256	$84,484,114
Class B shares
Sold	16,576	$380,025	44,734	$1,047,067
Issued in reorganization (Note 8)	—	—	781,214	19,954,400
Distributions reinvested	89	2,095	138	3,188
Repurchased	(64)	(1,503)	(228,240)	(5,308,318)
Net increase (decrease)	16,601	$380,617	597,846	$15,696,337
Class C shares
Sold	26,822	$617,497	23,285	$556,494
Issued in reorganization (Note 8)	—	—	126,693	3,236,288
Distributions reinvested	112	2,625	26	597
Repurchased	(1)	(14)	(54,551)	(1,266,527)
Net increase (decrease)	26,933	$620,108	95,453	$2,526,852
Class I shares
Sold	8,222	$183,402	1,206	$29,806
Issued in reorganization (Note 8)	—	—	2,191	56,536
Distributions reinvested	76	1,806	—	7
Repurchased	—	—	(11,091)	(267,783)
Net increase (decrease)	8,298	$185,208	(7,694)	($181,434)
Class R1 shares
Sold	4,574	$101,500	1,329	$30,792
Distributions reinvested	46	1,078	1	26
Repurchased	—	—	(166)	(3,725)
Net increase (decrease)	4,620	$102,578	1,164	$27,093
Class 1 shares
Sold	10,706	$250,671	27,623	$639,853
Distributions reinvested	46	1,082	3	69
Repurchased	(13)	(317)	(14,096)	(345,724)
Net increase (decrease)	10,739	$251,436	13,530	$294,198
Net increase (decrease)	199,282	$4,626,956	3,943,555	$102,847,160

¹Period from 6-12-06 (commencement of operations) to 2-28-07 for Class B, Class C, Class I and Class R1.

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7. Purchases and sales of securities

Purchases and proceeds from sales or maturities of securities, other than short-term securities and obligations of the U.S. government, during the year ended February 29, 2008, aggregated $217,661,800 and $238,928,994, respectively.

8. Reorganization

On June 12, 2006, the Fund acquired substantially all of the assets and liabilities of the Predecessor Fund in exchange solely for Class A shares of the Fund. The acquisition was accounted for as a tax-free exchange of 81,480 Class A shares of the Fund for the net assets of the Predecessor Fund, which amounted to $1,806,642, including $14,098 of unrealized depreciation, after the close of business on June 9, 2006. Accounting and performance history of the Predecessor Fund was redesignated as that of Class A of the Fund.

On May 9, 2007, the shareholders of John Hancock Mid Cap Growth Fund (Mid Cap Growth Fund) approved an Agreement and Plan of Reorganization, which provided for the transfer of substantially all of the assets and liabilities of the Mid Cap Growth Fund in exchange for Class A, Class B, Class C and Class I shares of the Fund. The acquisition was accounted for as a tax-free exchange of 3,812,316 Class A shares, 781,214 Class B shares, 126,693 Class C shares and 2,191 Class I shares of the Fund for the net assets of the Mid Cap Growth Fund, which amounted to $97,964,692, $19,954,400, $3,236,288 and $56,536 for Class A, Class B, Class C and Class I shares of the Mid Cap Growth Fund, respectively, including the total of $21,282,022 of unrealized appreciation, after the close of business on May 25, 2007.

9. Legal and regulatory matters

On June 25, 2007, the Adviser and the Distributor and two of their affiliates (collectively, the John Hancock Affiliates) reached a settlement with the SEC that resolved an investigation of certain practices relating to the John Hancock Affiliates’ variable annuity and mutual fund operations involving directed brokerage and revenue sharing. Under the terms of the settlement, each John Hancock Affiliate was censured and agreed to pay a $500,000 civil penalty to the United States Treasury. In addition, the Adviser and the Distributor agreed to pay disgorgement of $2,087,477 and prejudgment interest of $359,460 to entities, including certain John Hancock Funds, that participated in the Adviser’s directed brokerage program during the period from 2000 to October 2003. Collectively, all John Hancock Affiliates agreed to pay a total disgorgement of $16,926,420 and prejudgment interest of $2,361,460 to the entities advised or distributed by John Hancock Affiliates. The Adviser discontinued the use of directed brokerage in recognition of the sale of fund shares in October 2003. One of the parties to this settlement was the Mid Cap Growth Fund, which, as noted above, was acquired by the Fund in May 2007. As a result of this settlement, the Fund received $172,697, which was recorded as a realized gain to the Fund’s books on June 25, 2007.

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43

Auditors’ report

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of John Hancock Funds III and Shareholders of John Hancock Growth Opportunities Fund,

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of John Hancock Growth Opportunities Fund (the Fund) at February 29, 2008, and the results of its operations, the changes in its net assets and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of investments at February 29, 2008 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
Boston, Massachusetts
April 18, 2008

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Tax information

Unaudited

For federal income tax purposes, the following information is furnished with respect to the distributions of the Fund, if any, paid during its taxable year ended February 29, 2008.

The Fund has designated distributions to shareholders of $21,552 as a long-term capital gain dividend.

Shareholders will be mailed a 2008 U.S. Treasury Department Form 1099-DIV in January 2009. This will reflect the total of all distributions that are taxable for calendar year 2008.

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Trustees and Officers

This chart provides information about the Trustees and Officers who oversee your John Hancock fund. Officers elected by the Trustees manage the day-to-day operations of the Fund and execute policies formulated by the Trustees.

Independent Trustees
Name, Year of Birth		Number of
Position(s) held with Fund	Trustee	John Hancock
Principal occupation(s) and other	of Fund	funds overseen
directorships during past 5 years	since1	by Trustee
James F. Carlin, Born: 1940	2006	55
Chairman (since December 2007); Director and Treasurer, Alpha Analytical Laboratories, Inc. (chemical
analysis) (since 1985); Part Owner and Treasurer, Lawrence Carlin Insurance Agency, Inc. (since 1995);
Part Owner and Vice President, Mone Lawrence Carlin Insurance Agency, Inc. (until 2005); Chairman
and Chief Executive Officer, Carlin Consolidated, Inc. (management/investments) (since 1987); Trustee,
Massachusetts Health and Education Tax Exempt Trust (1993–2003).
William H. Cunningham, Born: 1944	2006	55
Professor, University of Texas at Austin (since 1971); former Chancellor, University of Texas System and
former President, University of Texas at Austin (until 2001); Chairman and Chief Executive Officer, IBT
Technologies (until 2001); Director of the following: Hicks Acquisition Company I, Inc. (since 2007);
Hire.com (until 2004), STC Broadcasting, Inc. and Sunrise Television Corp. (until 2001), Symtx, Inc.
(electronic manufacturing) (since 2001), Adorno/Rogers Technology, Inc. (until 2004), Pinnacle
Foods Corporation (until 2003), rateGenius (until 2003), Lincoln National Corporation (insurance)
(since 2006), Jefferson-Pilot Corporation (diversified life insurance company) (until 2006), New
Century Equity Holdings (formerly Billing Concepts) (until 2001), eCertain (until 2001), ClassMap.com
(until 2001), Agile Ventures (until 2001), AskRed.com (until 2001), Southwest Airlines (since 2000),
Introgen (manufacturer of biopharmaceuticals) (since 2000) and Viasystems Group, Inc. (electronic
manufacturer) (until 2003); Advisory Director, Interactive Bridge, Inc. (college fundraising) (until 2001);
Advisory Director, Q Investments (until 2003); Advisory Director, JPMorgan Chase Bank (formerly Texas
Commerce Bank–Austin), LIN Television (until 2008), WilTel Communications (until 2003) and Hayes
Lemmerz International, Inc. (diversified automotive parts supply company) (since 2003).
Charles L. Ladner,2 Born: 1938	2006	55
Chairman and Trustee, Dunwoody Village, Inc. (retirement services) (until 2003); Senior Vice President
and Chief Financial Officer, UGI Corporation (public utility holding company) (retired 1998); Vice
President and Director, AmeriGas, Inc. (retired 1998); Director, AmeriGas Partners, L.P. (gas distribution)
(until 1997); Director, EnergyNorth, Inc. (until 1997); Director, Parks and History Association (until 2005).
John A. Moore,2 Born: 1939	2006	55
President and Chief Executive Officer, Institute for Evaluating Health Risks (nonprofit institution)
(until 2001); Senior Scientist, Sciences International (health research) (until 2003); Former Assistant
Administrator and Deputy Administrator, Environmental Protection Agency; Principal, Hollyhouse
(consulting) (since 2000); Director, CIIT Center for Health Science Research (nonprofit research)
(until 2007).

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Independent Trustees (continued)
Name, Year of Birth		Number of
Position(s) held with Fund	Trustee	John Hancock
Principal occupation(s) and other	of Fund	funds overseen
directorships during past 5 years	since1	by Trustee
Patti McGill Peterson,2 Born: 1943	2006	55
Senior Associate, Institute for Higher Education Policy (since 2007); Executive Director, Council for
International Exchange of Scholars and Vice President, Institute of International Education (until 2007);
Senior Fellow, Cornell Institute of Public Affairs, Cornell University, Ithaca, NY (until 1998); Former
President, Wells College, Aurora, NY, and St. Lawrence University, Canton, NY; Director, Niagara
Mohawk Power Corporation (until 2003); Director, Ford Foundation, International Fellowships Program
(since 2002); Director, Lois Roth Endowment (since 2002); Director, Council for International Educational
Exchange (since 2003).
Steven R. Pruchansky, Born: 1944	2006	55
Chairman and Chief Executive Officer, Greenscapes of Southwest Florida, Inc. (since 2000); Director and
President, Greenscapes of Southwest Florida, Inc. (until 2000); Managing Director, JonJames, LLC (real
estate) (since 2000); Director, First Signature Bank & Trust Company (until 1991); Director, Mast Realty
Trust (until 1994); President, Maxwell Building Corp. (until 1991).
Non-Independent Trustees3
Name, Year of Birth		Number of
Position(s) held with Fund	Trustee	John Hancock
Principal occupation(s) and other	of Fund	funds overseen
directorships during past 5 years	since1	by Trustee
James R. Boyle, Born: 1959	2006	265
Executive Vice President, Manulife Financial Corporation (since 1999); President, John Hancock Variable
Life Insurance Company (since March 2007); Executive Vice President, John Hancock Life Insurance
Company (since 2004); Chairman and Director, John Hancock Advisers, LLC (the Adviser), John Hancock
Funds, LLC and The Berkeley Financial Group, LLC (The Berkeley Group) (holding company) (since 2005);
Senior Vice President, The Manufacturers Life Insurance Company (U.S.A.) (until 2004).

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Principal officers who are not Trustees
Name, Year of Birth
Position(s) held with Fund	Officer
Principal occupation(s) and other	of Fund
directorships during past 5 years	since
Keith F. Hartstein, Born: 1956	2006
President and Chief Executive Officer
Senior Vice President, Manulife Financial Corporation (since 2004); Director, President and Chief
Executive Officer, the Adviser, The Berkeley Group and John Hancock Funds, LLC (since 2005); Director,
MFC Global Investment Management (U.S.), LLC (MFC Global (U.S.)) (since 2005); Director, John
Hancock Signature Services, Inc. (since 2005); President and Chief Executive Officer, John Hancock
Investment Management Services, LLC (since 2006); President and Chief Executive Officer, John Hancock
Funds, John Hancock Funds II, John Hancock Funds III and John Hancock Trust (since 2005); Director,
Chairman and President, NM Capital Management, Inc. (since 2005); Member, Investment Company
Institute Sales Force Marketing Committee (since 2003); President and Chief Executive Officer, MFC
Global (U.S.) (2005–2006); Executive Vice President, John Hancock Funds, LLC (until 2005).
Thomas M. Kinzler, Born: 1955	2006
Secretary and Chief Legal Officer
Vice President and Counsel, John Hancock Life Insurance Company (U.S.A.) (since 2006); Secretary and
Chief Legal Officer, John Hancock Funds and John Hancock Funds II (since 2006); Chief Legal Officer
and Assistant Secretary, John Hancock Trust (since 2006); Vice President and Associate General Counsel,
Massachusetts Mutual Life Insurance Company (1999–2006); Secretary and Chief Legal Counsel, MML
Series Investment Fund (2000–2006); Secretary and Chief Legal Counsel, MassMutual Institutional Funds
(2000–2004); Secretary and Chief Legal Counsel, MassMutual Select Funds and MassMutual Premier
Funds (2004–2006).
Francis V. Knox, Jr., Born: 1947	2006
Chief Compliance Officer
Vice President and Chief Compliance Officer, John Hancock Investment Management Services, LLC,
the Adviser and MFC Global (U.S.) (since 2005); Vice President and Chief Compliance Officer, John
Hancock Funds, John Hancock Funds II, John Hancock Funds III and John Hancock Trust (since 2005);
Vice President and Assistant Treasurer, Fidelity Group of Funds (until 2004); Vice President and Ethics &
Compliance Officer, Fidelity Investments (until 2001).
Charles A. Rizzo, Born: 1957	2007
Chief Financial Officer
Chief Financial Officer, John Hancock Funds, John Hancock Funds II, John Hancock Funds III and John
Hancock Trust (since June 2007); Assistant Treasurer, Goldman Sachs Mutual Fund Complex (regis-
tered investment companies) (2005–June 2007); Vice President, Goldman Sachs (2005–June 2007);
Managing Director and Treasurer of Scudder Funds, Deutsche Asset Management (2003–2005);
Director, Tax and Financial Reporting, Deutsche Asset Management (2002–2003); Vice President and
Treasurer, Deutsche Global Fund Services (Deutsche Registered Investment Companies) (1999–2002).
Gordon M. Shone, Born: 1956	2006
Treasurer
Senior Vice President, John Hancock Life Insurance Company (U.S.A.) (since 2001); Treasurer, John
Hancock Funds (since 2006), John Hancock Funds II, John Hancock Funds III and John Hancock Trust
(since 2005); Vice President and Chief Financial Officer, John Hancock Trust (2003–2005); Vice President,
John Hancock Investment Management Services, Inc., John Hancock Advisers, LLC (since 2006) and The
Manufacturers Life Insurance Company (U.S.A.) (1998–2000).

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Principal officers who are not Trustees(continued)

Name, Year of Birth
Position(s) held with Fund	Officer
Principal occupation(s) and other	of Fund
directorships during past 5 years	since
John G. Vrysen, Born: 1955	2006
Chief Operating Officer
Senior Vice President, Manulife Financial Corporation (since 2006); Director, Executive Vice President
and Chief Operating Officer, the Adviser, The Berkeley Group and John Hancock Funds, LLC (since
June 2007); Executive Vice President and Chief Operating Officer, John Hancock Investment
Management Services, LLC (since December 2007); Chief Operating Officer, John Hancock Funds,
John Hancock Funds II, John Hancock Funds III and John Hancock Trust (since June 2007); Director,
Executive Vice President and Chief Financial Officer, the Adviser, The Berkeley Group and John Hancock
Funds, LLC (2005–2007); Executive Vice President and Chief Financial Officer, John Hancock Investment
Management Services, LLC (2005–2007); Executive Vice President and Chief Financial Officer, MFC
Global (U.S.) (2005 until August 2007); Director, John Hancock Signature Services, Inc. (since 2005);
Chief Financial Officer, John Hancock Funds, John Hancock Funds II, John Hancock Funds III and John
Hancock Trust (2005 until June 2007); Vice President and General Manager, John Hancock Fixed
Annuities, U.S. Wealth Management (2004–2005); Vice President, Operations, Manulife Wood Logan
(2000–2004).

The business address for all Trustees and Officers is 601 Congress Street, Boston, Massachusetts 02210-2805.

The Statement of Additional Information of the Fund includes additional information about members of the Board of Trustees of the Fund and is available without charge, upon request, by calling 1-800-225-5291.

¹ Each Trustee serves until resignation, retirement age or until his or her successor is elected.

² Member of Audit and Compliance Committee.

³ Non-Independent Trustee holds positions with the Fund’s investment adviser, underwriter and certain other affiliates.

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For more information

The Fund’s proxy voting policies, procedures and records are available without charge, upon request:

By phone	On the Fund’s Web site	On the SEC’s Web site
1-800-225-5291	www.jhfunds.com/proxy	www.sec.gov
Investment adviser	Custodian	Legal counsel
John Hancock Investment	State Street Bank & Trust Co.	Kirkpatrick & Lockhart
Management Services, LLC	2 Avenue de Lafayette	Preston Gates Ellis LLP
601 Congress Street	Boston, MA 02111	One Lincoln Street
Boston, MA 02210-2805		Boston, MA 02111-2950
	Transfer agent
Subadviser	John Hancock Signature	Independent registered public
Grantham, Mayo, Van	Services, Inc.	accounting firm
Otterloo & Co. LLC	P.O. Box 9510	PricewaterhouseCoopers LLP
40 Rowes Wharf	Portsmouth, NH 03802-9510	125 High Street
Boston, MA 02110		Boston, MA 02110
Principal distributor
John Hancock Funds, LLC
601 Congress Street
Boston, MA 02210-2805

How to contact us
Internet	www.jhfunds.com
Mail	Regular mail:	Express mail:
	John Hancock Signature	John Hancock Signature
	Services, Inc.	Services, Inc.
	P.O. Box 9510	Mutual Fund Image Operations
	Portsmouth, NH 03802-9510	164 Corporate Drive
		Portsmouth, NH 03801
Phone	Customer service representatives	1-800-225-5291
	EASI-Line	1-800-338-8080
	TDD line	1-800-554-6713

A listing of month-end portfolio holdings is available on our Web site, www.jhfunds.com. A more detailed portfolio holdings summary is available on a quarterly basis 60 days after the fiscal quarter on our Web site or upon request by calling 1-800-225-5291, or on the SEC’s Web site, www.sec.gov.

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1-800-225-5291
1-800-554-6713 TDD
1-800-338-8080 EASI-Line
www.jhfunds. com

Now available:electronicdelivery
www.jhfunds.com/edelivery

This report is for the information of the shareholders of John Hancock Growth Opportunities Fund.	8400A	2/08
It is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus.		4/08

Discussion of Fund performance

By Grantham, Mayo, Van Otterloo & Co. LLC (GMO)

U.S. stocks went on a wild ride during the 12-month period highlighted both by record highs for broad market indexes and conditions deemed poor enough to warrant numerous interventions by the Federal Reserve. For the period in full, the Standard & Poor’s 500 Index finished down 3.60%, a modest move that belied its frequent violent gyrations. Growth stocks outpaced value stocks during the period. Telecommunication services, financials and consumer discretionary were the worst-performing sectors in the Russell 1000 Growth Index, while energy stocks performed the best.

“U.S. stocks went on a wild
ride during the 12-month
period…”

For the year ended February, 29, 2008, John Hancock Growth Fund’s Class A, Class B, Class C, Class I and Class R1 shares returned –6.28%, –7.01%, –7.01%, –5.94% and –6.39%, respectively, at net asset value while the Russell 1000 Growth Index returned 0.40% and the average large growth fund monitored by Morningstar, Inc. returned 0.64% . Sector and stock selection both detracted from returns versus the benchmark. Sector weightings adding to relative returns included an overweight in energy, while sector weightings detracting from relative returns included an overweight in consumer discretionary. Stock selections in telecommunication services added to relative returns, while picks in consumer discretionary and financials detracted. Individual names adding to returns versus the benchmark included overweight positions in Exxon Mobil Corp., Chevron Corp. and McDonald’s Corp. while overweight positions detractin g from relative returns included Home Depot, Inc., Kohl’s Corp. and Coach, Inc.

This commentary reflects the views of the portfolio management team through the end of the Fund’s period discussed in this report. The team’s statements reflect their own opinions. As such, they are in no way guarantees of future events and are not intended to be used as investment advice or a recommendation regarding any specific security. They are also subject to change at any time as market and other conditions warrant.

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A look at performance

For the periods ended February 29, 2008
		Average annual returns				Cumulative total returns
		with maximum sales charge (POP)				with maximum sales charge (POP)
	Inception				Since				Since
Class	date	1-year	5-year	10-year	inception	1-year	5-year	10-year	inception
A	6-12-06	–10.97%	—	—	–1.42%	–10.97%	—	—	–2.44%
B	6-12-06	–11.41	—	—	–1.39	–11.41	—	—	–2.39
C	6-12-06	–7.89	—	—	0.82	–7.89	—	—	1.41
I1	6-12-06	–5.94	—	—	2.10	–5.94	—	—	3.64
R11	6-12-06	–6.39	—	—	1.32	–6.39	—	—	2.28

Performance figures assume all distributions are reinvested. Public offering price (POP) figures reflect maximum sales charge on Class A shares of 5%, and the applicable contingent deferred sales charge (CDSC) on Class B and Class C shares. The Class B shares’ CDSC declines annually between years 1 to 6 according to the following schedule:5, 4, 3, 3, 2, 1%. No sales charge will be assessed after the sixth year. Class C shares held for less than one year are subject to a 1% CDSC. Sales charge is not applicable for Class I and Class R1 shares.

The expense ratios of the Fund, both net (including any fee waivers or expense limitations) and gross (excluding any fee waivers or expense limitations), are set forth according to the most recent publicly available prospectuses for the Fund and may differ from the expense ratios disclosed in the Financial Highlights tables in this report. The waivers and expense limitations are contractual at least until 6-30-08. The net expenses are as follows:Class A — 1.39%, Class B — 2.09%, Class C — 2.10%, Class I — 1.00%, Class R1 — 1.74% . Had the fee waivers and expense limitations not been in place, the gross expenses would be as follows: Class A — 2.00%, Class B — 11.94%, Class C — 7.70%, Class I — 1.90%, Class R1 — 21.55% .

The returns reflect past results and should not be considered indicative of future performance. The return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, the Fund’s current performance may be higher or lower than the performance shown. For performance data current to the most recent month end, please call 1-800-225-5291 or visit the Fund’s Web site at www.jhfunds.com.

The performance table above and the chart on the next page do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

The Fund’s performance results reflect any applicable expense reductions, without which the expenses would increase and results would have been less favorable.

Performance is calculated with an opening price (prior day’s close) on the inception date.

¹ For certain types of investors as described in the Fund’s Class I and Class R1 share prospectuses.

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A look at performance

Growth of $10,000

This chart shows what happened to a hypothetical $10,000 investment in Growth Fund Class A shares for the period indicated. For comparison, we’ve shown the same investment in the Russell 1000 Growth Index.

	Period	Without	With maximum
Class	beginning	sales charge	sales charge	Index
B	6-12-06	$10,141	$9,761	$11,270
C2	6-12-06	10,141	10,141	11,270
I3	6-12-06	10,364	10,364	11,270
R13	6-12-06	10,228	10,228	11,270

Assuming all distributions were reinvested for the period indicated, the table above shows the value of a $10,000 investment in the Fund’s Class B, Class C, Class I and Class R1 shares, respectively, as of February 29, 2008. Performance of the classes will vary based on the difference in sales charges paid by shareholders investing in the different classes and the fee structure of those classes.

Russell 1000 Growth Indexis an unmanaged index containing those securities in the Russell 1000 Index with a greater-than-average growth orientation.

It is not possible to invest directly in an index. Index figures do not reflect sales charges, which would have resulted in lower values if they did.

¹ NAV represents net asset value and POP represents public offering price.

² No contingent deferred sales charge applicable.

³ For certain types of investors as described in the Fund’s Class I and Class R1 share prospectuses.

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Your expenses

These examples are intended to help you understand your ongoing operating expenses.

Understanding fund expenses

As a shareholder of the Fund, you incur two types of costs:

■ Transaction costs which include sales charges (loads) on purchases or redemptions (varies by share class), minimum account fee charge, etc.

■ Ongoing operating expenses including management fees, distribution and service fees (if applicable), and other fund expenses.

We are going to present only your ongoing operating expenses here.

Actual expenses/actual returns

This example is intended to provide information about your fund’s actual ongoing operating expenses, and is based on your fund’s actual return. It assumes an account value of $1,000.00 on September 1, 2007, with the same investment held until February 29, 2008.

	Account value	Ending value	Expenses paid during
	on 9-1-07	on 2-29-08	period on 2-29-081
Class A	$1,000.00	$905.38	$6.59
Class B	1,000.00	901.95	9.93
Class C	1,000.00	901.95	9.93
Class I	1,000.00	907.23	4.74
Class R1	1,000.00	905.88	5.92

Together with the value of your account, you may use this information to estimate the operating expenses that you paid over the period. Simply divide your account value at February 29, 2008, by $1,000.00, then multiply it by the “expenses paid” for your share class from the table above. For example, for an account value of $8,600.00, the operating expenses should be calculated as follows:

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9

Your expenses

Hypothetical example for comparison purposes

This table allows you to compare your fund’s ongoing operating expenses with those of any other fund. It provides an example of the Fund’s hypothetical account values and hypothetical expenses based on each class’s actual expense ratio and an assumed 5% annualized return before expenses (which is not your fund’s actual return). It assumes an account value of $1,000.00 on September 1, 2007, with the same investment held until February 29, 2008. Look in any other fund shareholder report to find its hypothetical example and you will be able to compare these expenses.

	Account value	Ending value	Expenses paid during
	on 9-1-07	on 2-29-08	period on 2-29-081
Class A	$1,000.00	$1,017.95	$6.97
Class B	1,000.00	1,014.42	10.52
Class C	1,000.00	1,014.42	10.52
Class I	1,000.00	1,019.89	5.02
Class R1	1,000.00	1,018.65	6.27

Remember, these examples do not include any transaction costs, such as sales charges; therefore, these examples will not help you to determine the relative total costs of owning different funds. If transaction costs were included, your expenses would have been higher. See the prospectus for details regarding transaction costs.

¹ Expenses are equal to the Fund’s annualized expense ratio of 1.39%, 2.10%, 2.10%, 1.00% and 1.25% for Class A, Class B, Class C, Class I and Class R1, respectively, multiplied by the average account value over the period, multiplied by the number of days in most recent fiscal half year/366 (to reflect the one-half year period).

Growth Fund | Annual report

10

Portfolio summary

Top 10 holdings1
Exxon Mobil Corp.	4.9%	International Business Machines Corp.	2.5%
Wal-Mart Stores, Inc.	3.4%	Schlumberger Ltd.	2.5%
Microsoft Corp.	3.2%	UnitedHealth Group, Inc.	2.5%
The Coca-Cola Company	2.8%	Altria Group, Inc.	2.4%
Apple, Inc.	2.5%	Cisco Systems, Inc.	2.3%
Sector distribution1
Consumer non-cyclical	30%	Industrial	10%
Technology	14%	Financial	3%
Consumer cyclical	14%	Basic materials	2%
Energy	14%	Utilities	1%
Communications	10%	Other	2%

¹As a percentage of net assets on February 29, 2008.

Annual report | Growth Fund

11

F I N A N C I A L  S T A T E M E N T S

Fund’s investments

Securities owned by the Fund on 2-29-08

This schedule is divided into three main categories: common stocks, short-term investments and repurchase agreements. Common stocks are further broken down by industry group. Repurchase agreements, which represent the Fund’s cash position, are listed last.

Issuer	Shares	Value
Common stocks 98.78%		$24,768,139
(Cost $25,520,551)
Advertising 0.16%		40,908
Interpublic Group of Companies, Inc. *	600	5,172
Omnicom Group, Inc.	800	35,736
Aerospace 1.32%		331,982
General Dynamics Corp.	400	32,740
Goodrich Corp.	1,100	65,153
Lockheed Martin Corp.	100	10,320
Northrop Grumman Corp.	200	15,722
Rockwell Collins, Inc.	300	17,670
United Technologies Corp.	2,700	190,377
Agriculture 1.61%		404,880
Monsanto Company	3,500	404,880
Aluminum 0.10%		25,998
Alcoa, Inc.	700	25,998
Apparel & Textiles 0.90%		224,435
Coach, Inc. *	2,000	60,640
Liz Claiborne, Inc.	600	10,668
Mohawk Industries, Inc. * (a)	400	28,564
NIKE, Inc., Class B	1,300	78,260
Polo Ralph Lauren Corp., Class A	500	31,095
VF Corp.	200	15,208
Auto Parts 0.62%		155,083
AutoZone, Inc. *	300	34,524
Genuine Parts Company	300	12,375
Johnson Controls, Inc.	2,800	92,008
O’Reilly Automotive, Inc. *	600	16,176
Auto Services 0.12%		30,597
AutoNation, Inc. *	2,100	30,597

See notes to financial statements

Growth Fund | Annual report

12

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
Automobiles 0.39%		$97,605
PACCAR, Inc.	2,250	97,605
Biotechnology 0.34%		84,661
Amgen, Inc. *	400	18,208
Genentech, Inc. *	500	37,875
Immucor, Inc. *	500	14,900
Techne Corp. *	200	13,678
Broadcasting 0.33%		83,820
Discovery Holding Company *	1,700	38,369
Liberty Global, Inc., Class A *	900	33,840
Liberty Media Corp., Capital, Series A *	100	11,611
Building Materials & Construction 0.05%		11,214
Masco Corp.	600	11,214
Business Services 1.65%		413,515
Accenture, Ltd., Class A	700	24,675
Affiliated Computer Services, Inc., Class A *	100	5,075
Automatic Data Processing, Inc.	1,000	39,950
FactSet Research Systems, Inc.	300	15,792
Fiserv, Inc. *	1,400	73,668
Fluor Corp.	700	97,475
Jacobs Engineering Group, Inc. *	1,000	80,290
Moody’s Corp.	700	26,586
NCR Corp. *	1,000	22,160
Pitney Bowes, Inc.	500	17,890
R.R. Donnelley & Sons Company	100	3,183
TeleTech Holdings, Inc. *	300	6,771
Cable & Television 0.12%		30,985
Comcast Corp., Class A *	850	16,609
DIRECTV Group, Inc. *	200	5,010
Time Warner, Inc.	600	9,366
Cellular Communications 0.04%		9,380
Telephone & Data Systems, Inc.	200	9,380
Chemicals 0.26%		65,712
Albemarle Corp.	200	7,588
Celanese Corp., Series A	1,400	54,460
Hercules, Inc.	200	3,664
Colleges & Universities 0.09%		22,275
Career Education Corp. *	1,500	22,275
Computers & Business Equipment 10.64%		2,667,987
Apple, Inc. *	5,100	637,602
Cisco Systems, Inc. *	23,900	582,443
Cognizant Technology Solutions Corp., Class A *	1,000	30,210
Dell, Inc. *	17,000	337,450
EMC Corp. *	17,700	275,058

See notes to financial statements

Annual report | Growth Fund

13

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
Computers & Business Equipment (continued)
Hewlett-Packard Company	1,900	$90,763
Ingram Micro, Inc., Class A *	1,100	16,797
International Business Machines Corp.	5,600	637,616
Juniper Networks, Inc. *	1,500	40,230
Lexmark International, Inc. *	600	19,818
Construction Materials 0.45%		112,298
Martin Marietta Materials, Inc. (a)	400	43,040
Sherwin-Williams Company	100	5,178
Trane, Inc.	800	36,040
Vulcan Materials Company	400	28,040
Containers & Glass 0.32%		79,030
Owens-Illinois, Inc. *	1,400	79,030
Cosmetics & Toiletries 3.36%		841,766
Avon Products, Inc.	1,000	38,060
Colgate-Palmolive Company	1,600	121,744
International Flavors & Fragrances, Inc.	200	8,626
Kimberly-Clark Corp.	1,700	110,806
Procter & Gamble Company	8,500	562,530
Crude Petroleum & Natural Gas 0.83%		206,800
Apache Corp.	500	57,355
Occidental Petroleum Corp.	1,300	100,581
Sunoco, Inc.	800	48,864
Drugs & Health Care 0.17%		43,620
Wyeth	1,000	43,620
Educational Services 0.57%		142,384
Apollo Group, Inc., Class A *	1,600	98,208
ITT Educational Services, Inc. *	800	44,176
Electrical Equipment 0.36%		90,804
Emerson Electric Company	1,000	50,960
FLIR Systems, Inc. *	1,400	39,844
Electrical Utilities 0.84%		209,998
American Electric Power Company, Inc.	300	12,276
CenterPoint Energy, Inc.	1,000	14,680
Constellation Energy Group, Inc.	500	44,175
Dynegy, Inc., Class A *	800	5,920
FPL Group, Inc.	100	6,029
Mirant Corp. *	900	33,300
PPL Corp.	300	13,614
Public Service Enterprise Group, Inc.	800	35,280
Quanta Services, Inc. *	1,300	31,044
Reliant Energy, Inc. *	600	13,680

See notes to financial statements

Growth Fund | Annual report

14

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
Electronics 0.37%		$92,519
Arrow Electronics, Inc. *	300	9,783
Avnet, Inc. *	1,200	40,452
Garmin, Ltd.	200	11,742
L-3 Communications Holdings, Inc.	200	21,258
Synopsys, Inc. *	400	9,284
Energy 0.25%		63,091
NRG Energy, Inc. *	1,400	57,778
Sempra Energy	100	5,313
Financial Services 1.12%		279,510
Citigroup, Inc.	3,700	87,727
Eaton Vance Corp.	1,100	35,035
Franklin Resources, Inc.	400	37,748
Goldman Sachs Group, Inc.	300	50,889
Janus Capital Group, Inc.	500	12,110
Merrill Lynch & Company, Inc.	200	9,912
SEI Investments Company	900	22,509
T. Rowe Price Group, Inc. (c)	300	15,159
The First Marblehead Corp. (a)	700	8,421
Food & Beverages 5.55%		1,392,211
General Mills, Inc.	700	39,193
H.J. Heinz Company	400	17,644
Kellogg Company	400	20,288
Kraft Foods, Inc., Class A	1,707	53,207
PepsiCo, Inc.	6,900	479,964
Sara Lee Corp.	1,100	13,893
Sysco Corp.	1,100	30,866
The Coca-Cola Company	12,200	713,212
William Wrigley Jr. Company	400	23,944
Gas & Pipeline Utilities 0.95%		237,321
Transocean, Inc. *	1,689	237,321
Healthcare Products 6.21%		1,556,221
Baxter International, Inc.	1,400	82,628
Becton, Dickinson & Company	300	27,126
IDEXX Laboratories, Inc. *	400	22,188
Intuitive Surgical, Inc. *	300	84,576
Johnson & Johnson	8,100	501,876
Kinetic Concepts, Inc. *	800	41,112
Medtronic, Inc.	4,000	197,440
Patterson Companies, Inc. *	800	28,160
Respironics, Inc. *	500	32,840
St. Jude Medical, Inc. *	1,100	47,278
Stryker Corp.	2,800	182,308
Zimmer Holdings, Inc. *	4,100	308,689

See notes to financial statements

Annual report | Growth Fund

15

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
Healthcare Services 5.14%		$1,289,753
Cardinal Health, Inc.	1,000	59,140
Coventry Health Care, Inc. *	700	36,309
Express Scripts, Inc. *	4,100	242,310
Lincare Holdings, Inc. *	$200	6,500
McKesson Corp.	800	47,008
Medco Health Solutions, Inc. *	4,200	186,102
Quest Diagnostics, Inc.	800	38,136
UnitedHealth Group, Inc.	13,300	618,184
WellPoint, Inc. *	800	56,064
Homebuilders 0.06%		14,030
D.R. Horton, Inc.	1,000	14,030
Hotels & Restaurants 0.66%		164,623
Jack in the Box, Inc. *	200	5,254
Marriott International, Inc., Class A	200	6,820
McDonald’s Corp.	2,000	108,220
Starbucks Corp. *	1,700	30,549
Yum! Brands, Inc.	400	13,780
Household Products 0.32%		81,392
Church & Dwight, Inc.	100	5,346
Clorox Company	200	11,638
Energizer Holdings, Inc. *	600	55,698
Tempur-Pedic International, Inc. (a)	500	8,710
Industrial Machinery 2.61%		654,729
Cameron International Corp. *	1,400	59,472
Caterpillar, Inc.	2,000	144,660
Crane Company	300	12,369
Cummins, Inc.	1,400	70,532
Deere & Company	2,400	204,504
Dresser-Rand Group, Inc. *	300	10,221
Flowserve Corp.	200	21,780
ITT Corp.	800	44,992
Lincoln Electric Holdings, Inc.	200	13,428
Pall Corp.	1,100	43,307
W.W. Grainger, Inc.	400	29,464
Insurance 1.76%		440,648
Aetna, Inc.	1,500	74,400
AFLAC, Inc.	1,500	93,615
Allstate Corp.	300	14,319
Ambac Financial Group, Inc.	200	2,228
American International Group, Inc.	1,600	74,976
Brown & Brown, Inc.	1,100	19,613
CIGNA Corp.	1,200	53,496
Hartford Financial Services Group, Inc.	200	13,980
MBIA, Inc. (a)	500	6,485

See notes to financial statements

Growth Fund | Annual report

16

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
Insurance (continued)
Prudential Financial, Inc.	500	$36,485
The Travelers Companies, Inc.	1,100	51,051
International Oil 7.84%		1,966,452
Anadarko Petroleum Corp.	500	31,870
Chevron Corp.	5,000	433,300
ConocoPhillips	2,200	181,962
Exxon Mobil Corp.	14,100	1,226,841
Noble Corp.	900	44,235
Weatherford International, Ltd. *	700	48,244
Internet Content 1.50%		376,944
Google, Inc., Class A *	800	376,944
Internet Retail 2.15%		538,050
Amazon.com, Inc. *	3,700	238,539
eBay, Inc. *	9,300	245,148
Expedia, Inc. *	1,700	38,981
IAC/InterActiveCorp. *	200	3,980
Priceline.com, Inc. *	100	11,402
Internet Software 0.31%		78,510
McAfee, Inc. *	1,000	33,270
VeriSign, Inc. *	1,300	45,240
Leisure Time 0.21%		52,290
MGM MIRAGE *	849	52,290
Life Sciences 0.10%		23,844
Waters Corp. *	400	23,844
Liquor 0.47%		117,725
Anheuser-Busch Companies, Inc.	2,500	117,725
Manufacturing 2.68%		670,743
3M Company	3,700	290,080
Danaher Corp.	1,000	74,150
Harley-Davidson, Inc.	1,400	52,024
Honeywell International, Inc.	3,400	195,636
Illinois Tool Works, Inc.	500	24,535
Mettler-Toledo International, Inc. *	300	29,310
Tyco International, Ltd.	125	5,008
Metal & Metal Products 0.47%		118,235
Crown Holdings, Inc. *	300	7,473
Precision Castparts Corp.	900	99,351
Southern Copper Corp.	100	11,411
Mobile Homes 0.09%		21,336
Thor Industries, Inc.	700	21,336
Petroleum Services 3.85%		966,543
Diamond Offshore Drilling, Inc.	500	60,415
Schlumberger, Ltd.	7,200	622,440

See notes to financial statements

Annual report | Growth Fund

17

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
Petroleum Services (continued)
Smith International, Inc.	1,400	$88,242
Tidewater, Inc.	600	33,690
Valero Energy Corp.	2,800	161,756
Pharmaceuticals 6.00%		1,503,470
Abbott Laboratories	5,200	278,460
Allergan, Inc.	300	17,769
Bristol-Myers Squibb Company	2,800	63,308
Eli Lilly & Company	2,100	105,042
Forest Laboratories, Inc. *	2,100	83,517
Gilead Sciences, Inc. *	800	37,856
Merck & Company, Inc.	9,600	425,280
Pfizer, Inc.	18,100	403,268
Schering-Plough Corp.	4,100	88,970
Publishing 0.11%		27,573
Gannett Company, Inc.	100	3,015
McGraw-Hill Companies, Inc.	600	24,558
Real Estate 0.01%		3,531
General Growth Properties, Inc., REIT	100	3,531
Retail Grocery 0.19%		48,720
Safeway, Inc.	500	14,370
SUPERVALU, Inc.	200	5,250
The Kroger Company	1,200	29,100
Retail Trade 10.11%		2,535,938
Abercrombie & Fitch Company, Class A	600	46,518
Advance Auto Parts, Inc.	900	30,186
American Eagle Outfitters, Inc.	1,200	25,644
Bed Bath & Beyond, Inc. *	1,700	48,178
Best Buy Company, Inc.	700	30,107
Big Lots, Inc. *	300	5,055
CarMax, Inc. * (a)	200	3,672
CVS Caremark Corp.	1,400	56,532
Dollar Tree Stores, Inc. *	1,000	26,830
Family Dollar Stores, Inc.	800	15,320
GameStop Corp., Class A *	700	29,652
Home Depot, Inc.	14,700	390,285
Kohl’s Corp. *	1,900	84,436
Lowe’s Companies, Inc.	13,000	311,610
Nordstrom, Inc.	100	3,703
RadioShack Corp.	1,900	33,155
Staples, Inc.	2,800	62,300
Target Corp.	4,500	236,745
The TJX Companies, Inc.	900	28,800
Tiffany & Company	1,300	48,932

See notes to financial statements

Growth Fund | Annual report

18

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
Retail Trade (continued)
Walgreen Company	4,800	$175,248
Wal-Mart Stores, Inc.	17,000	843,030
Sanitary Services 0.04%		10,800
Nalco Holding Company	500	10,800
Semiconductors 0.68%		171,186
Intel Corp.	4,100	81,795
Intersil Corp., Class A	1,000	23,270
KLA-Tencor Corp.	700	29,407
National Semiconductor Corp.	600	9,882
Xilinx, Inc.	1,200	26,832
Software 4.98%		1,249,418
Activision, Inc. *	200	5,450
Adobe Systems, Inc. *	1,200	40,380
Autodesk, Inc. *	500	15,545
BMC Software, Inc. *	200	6,456
CA, Inc.	400	9,152
Citrix Systems, Inc. *	400	13,172
Compuware Corp. *	2,200	17,512
Intuit, Inc. *	1,000	26,560
Microsoft Corp.	29,300	797,546
NAVTEQ Corp. *	300	22,485
Oracle Corp. *	15,700	295,160
Telecommunications Equipment & Services 2.63%		659,939
Corning, Inc.	2,300	53,429
QUALCOMM, Inc.	10,200	432,174
Verizon Communications, Inc.	4,800	174,336
Telephone 0.28%		69,660
AT&T, Inc.	2,000	69,660
Tires & Rubber 0.16%		40,650
Goodyear Tire & Rubber Company *	1,500	40,650
Tobacco 2.43%		608,721
Altria Group, Inc.	8,100	592,434
UST, Inc.	300	16,287
Toys, Amusements & Sporting Goods 0.07%		18,036
Hasbro, Inc.	400	10,308
Mattel, Inc.	400	7,728
Transportation 0.08%		20,308
C.H. Robinson Worldwide, Inc.	400	20,308
Trucking & Freight 0.70%		175,732
FedEx Corp.	400	35,252
United Parcel Service, Inc., Class B	2,000	140,480

See notes to financial statements

Annual report | Growth Fund

19

F I N A N C I A L  S T A T E M E N T S

	Principal
Issuer	Amount	Value
Short-term investments 0.33%		$83,311
(Cost $83,311)
John Hancock Cash Investment Trust, 3.5681% (c)(f)	$83,311	83,311
Repurchase agreements 1.52%		$381,000
(Cost $381,000)
Repurchase Agreement with State Street Corp. dated 2-29-08 at
2.35% to be repurchased at $381,075 on 3-3-08,
collateralized by $395,000 Federal National Mortgage
Association, 5.57%, due 7-14-28 (valued at $390,556,
including interest)	$381,000	381,000
Total investments (Cost $25,984,862)† 100.63%		$25,232,450
Liabilities in excess of other assets (0.63%)		($157,791)
Total net assets 100.00%		$25,074,659

Percentages are stated as a percent of net assets.

REIT Real Estate Investment Trust

* Non-income producing.

(a) All or a portion of this security was out on loan.

(c) Investment is an affiliate of the Trust’s adviser or subadviser.

(f) John Hancock Cash Investment Trust is managed by MFC Global Investment Management (U.S.), LLC. The rate shown is the seven-day effective yield at period end.

† At February 29, 2008, the aggregate cost of investment securities for federal income tax purposes was $26,022,911. Net unrealized depreciation aggregated $790,461, of which $1,325,295 related to appreciated investment securities and $2,115,756 related to depreciated investment securities.

See notes to financial statements

Growth Fund | Annual report

20

F I N A N C I A L  S T A T E M E N T S

Financial statements

Statement of assets and liabilities 2-29-08

This Statement of Assets and Liabilities is the Fund’s balance sheet. It shows the value of what the Fund owns, is due and owes. You’ll also find the net asset value and the maximum public offering price per share.

Assets
Investments in unaffiliated issuers, at value (cost $25,520,551)
including $81,677 of securities loaned (Note 2)	$24,768,139
Repurchase agreement, at value (cost $381,000) (Note 2)	381,000
Investments in affiliated issuers, at value (cost $83,311) (Note 9)	83,311
Total investments, at value (cost $25,984,862)	25,232,450
Cash	271
Cash collateral at brokers for futures contracts	67,200
Receivable for investments sold	10,880
Receivable for fund shares sold	12,246
Dividends and interest receivable (net of tax)	41,361
Receivable due from adviser	702
Other assets	116
Total assets	25,365,226
Liabilities
Payable for fund shares repurchased	143,477
Payable upon return of securities loaned (Note 2)	83,311
Payable for futures variation margin	3,885
Payable to affiliates
Fund administration fees	180
Transfer agent fees	4,524
Distribution and service fees	189
Trustees’ fees	90
Other payables and accrued expenses	54,911
Total liabilities	290,567
Net assets
Capital paid-in	$26,579,324
Accumulated undistributed net realized gain (loss) on investments and futures contracts	(750,815)
Net unrealized appreciation (depreciation) on investments and futures contracts	(753,850)
Net assets	$25,074,659

See notes to financial statements

Annual report | Growth Fund

21

F I N A N C I A L  S T A T E M E N T S

Statement of assets and liabilities (continued)

Net asset value per share
The Funds have an unlimited number of shares authorized with no par value.
Net asset value is calculated by dividing the net assets of each class of shares
by the number of outstanding shares in the class.
Class A
Net assets	$22,346,085
Shares outstanding	1,162,336
Net asset value and redemption price per share	$19.23
Class B1
Net assets	$710,832
Shares outstanding	37,367
Net asset value and offering price per share	$19.02
Class C1
Net assets	$1,832,119
Shares outstanding	96,304
Net asset value and offering price per share	$19.02
Class I
Net assets	$63,402
Shares outstanding	3,272
Net asset value, offering price and redemption price per share	$19.38
Class R1
Net assets	$122,221
Shares outstanding	6,380
Net asset value, offering price and redemption price per share	$19.16
Maximum public offering price per share
Class A (net asset value per share ÷ 95%)2	$20.24

¹ Redemption price per share is equal to the net asset value less any applicable contingent deferred sales charge.

² On single retail sales of less than $50,000. On sales of $50,000 or more and on group sales the offering price is reduced.

See notes to financial statements

Growth Fund | Annual report

22

F I N A N C I A L  S T A T E M E N T S

Statement of operations For the year ended 2-29-08

This 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.

Investment income
Dividends	$327,889
Interest	48,824
Securities lending	568
Income from affiliated issuers	217
Total investment income	377,498
Expenses
Investment management fees (Note 3)	210,900
Distribution and service fees (Note 3)	95,791
Transfer agent fees (Note 3)	25,347
Fund administration fees (Note 3)	11,948
Blue sky fees (Note 3)	81,231
Audit and legal fees	70,246
Printing and postage fees (Note 3)	6,694
Custodian fees	37,950
Trustees’ fees (Note 3)	2,075
Registration and filing fees	24,946
Miscellaneous	280
Total expenses	567,408
Less expense reductions (Note 3)	(182,888)
Net expenses	384,520
Net investment loss	(7,022)
Realized and unrealized gain (loss)
Net realized gain (loss) on
Investments in unaffiliated issuers	144,161
Futures contracts	(44,965)
	99,196
Change in net unrealized appreciation (depreciation) of
Investments in unaffiliated issuers	(2,064,828)
Futures contracts	11,524
	(2,053,304)
Net realized and unrealized gain (loss)	(1,954,108)
Increase (decrease) in net assets from operations	($1,961,130)

See notes to financial statements

Annual report | Growth Fund

23

F I N A N C I A L  S T A T E M E N T S

Statement of changes in net assets

These Statements of Changes in Net Assets show how the value of the Fund’s net assets has changed during the last two periods. The difference reflects earnings less expenses, any investment gains and losses, distributions, if any, paid to shareholders and the net of Fund share transactions.

	Year	Year
	ended	ended
	2-28-071	2-29-08
Increase (decrease) in net assets
From operations
Net investment income (loss)	$13,947	($7,022)
Net realized gain (loss)	863,241	99,196
Change in net unrealized appreciation (depreciation)	1,299,454	(2,053,304)
Increase (decrease) in net assets resulting from operations	2,176,642	(1,961,130)
Distributions to shareholders
From net investment income
Class A	(38,325)	—
Class I	(108)	—
Class R1	(163)	—
From net realized gain
Class A	(197,001)	(1,315,122)
Class B	(2,867)	(41,970)
Class C	(6,435)	(111,505)
Class I	(281)	(11,243)
Class R1	(1,108)	(6,262)
Total distributions	(246,288)	(1,486,102)
From Fund share transactions (Note 6)	20,208,114	6,383,423
Total increase	22,138,468	2,936,191
Net assets
Beginning of year	—	22,138,468
End of year	$22,138,468	$25,074,659

¹ Period from 6-12-06 (commencement of operations) to 2-28-07.

See notes to financial statements

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F I N A N C I A L  S T A T E M E N T S

Financial highlights

The Financial Highlights show how the Fund’s net asset value for a share has changed since the end of the previous period.

CLASS A SHARES
Period ended	2-28-071	2-29-08
Per share operating performance
Net asset value, beginning of period	$20.00	$21.65
Net investment income (loss)2	—3	0.01
Net realized and unrealized gain
(loss) on investments	1.91	(1.25)
Total from investment operations	1.91	(1.24)
Less distributions
From net investment income	(0.04)	—
From net realized gain	(0.22)	(1.18)
	(0.26)	(1.18)
Net asset value, end of period	$21.65	$19.23
Total return4,5 (%)	9.576	(6.28)
Ratios and supplemental data
Net assets, end of period (in millions)	$21	$22
Ratios (as a percentage of average net assets):
Expenses before reductions	2.007	1.85
Expenses net of fee waivers, if any	1.397	1.40
Expenses net of all fee waivers and credits	1.397	1.40
Net investment income (loss)	0.017	0.04
Portfolio turnover (%)	936	95

¹ Class A shares began operations on 6-12-06.

² Based on the average of the shares outstanding.

³ Less than $0.01 per share.

⁴ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁵ Assumes dividend reinvestment.

⁶ Not annualized.

⁷ Annualized.

See notes to financial statements

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25

F I N A N C I A L  S T A T E M E N T S

Financial highlights

CLASS B SHARES
Period ended	2-28-071	2-29-08
Per share operating performance
Net asset value, beginning of period	$20.00	$21.59
Net investment income (loss)2	(0.11)	(0.15)
Net realized and unrealized gain
(loss) on investments	1.92	(1.24)
Total from investment operations	1.81	(1.39)
Less distributions
From net realized gain	(0.22)	(1.18)
Net asset value, end of period	$21.59	$19.02
Total return3,4 (%)	9.055	(7.01)
Ratios and supplemental data
Net assets, end of period (in millions)	—6	$1
Ratios (as a percentage of average net assets):
Expenses before reductions	11.947	4.74
Expenses net of fee waivers, if any	2.097	2.10
Expenses net of all fee waivers and credits	2.097	2.10
Net investment income (loss)	(0.68)7	(0.68)
Portfolio turnover (%)	935	95

¹ Class B shares began operations on 6-12-06.

² Based on the average of the shares outstanding.

³ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁴ Assumes dividend reinvestment.

⁵ Not annualized.

⁶ Less than $500,000.

⁷ Annualized.

See notes to financial statements

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26

F I N A N C I A L  S T A T E M E N T S

Financial highlights

CLASS C SHARES
Period ended	2-28-071	2-29-08
Per share operating performance
Net asset value, beginning of period	$20.00	$21.59
Net investment income (loss)2	(0.10)	(0.15)
Net realized and unrealized gain
(loss) on investments	1.91	(1.24)
Total from investment operations	1.81	(1.39)
Less distributions
From net realized gain	(0.22)	(1.18)
Net asset value, end of period	$21.59	$19.02
Total return3,4 (%)	9.055	(7.01)
Ratios and supplemental data
Net assets, end of period (in millions)	$1	$2
Ratios (as a percentage of average net assets):
Expenses before reductions	7.706	3.46
Expenses net of fee waivers, if any	2.106	2.10
Expenses net of all fee waivers and credits	2.106	2.10
Net investment income (loss)	(0.66)6	(0.68)
Portfolio turnover (%)	935	95

¹ Class C shares began operations on 6-12-06.

² Based on the average of the shares outstanding.

³ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁴ Assumes dividend reinvestment.

⁵ Not annualized.

⁶ Annualized.

See notes to financial statements

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27

F I N A N C I A L  S T A T E M E N T S

Financial highlights

CLASS I SHARES
Period ended	2-28-071	2-29-08
Per share operating performance
Net asset value, beginning of period	$20.00	$21.73
Net investment income (loss)2	0.06	0.09
Net realized and unrealized gain
(loss) on investments	1.97	(1.26)
Total from investment operations	2.03	(1.17)
Less distributions
From net investment income	(0.08)	—
From net realized gain	(0.22)	(1.18)
	(0.30)	(1.18)
Net asset value, end of period	$21.73	$19.38
Total return3,4 (%)	10.185	(5.94)
Ratios and supplemental data
Net assets, end of period (in millions)	—6	—6
Ratios (as a percentage of average net assets):
Expenses before reductions	1.907	9.72
Expenses net of fee waivers, if any	1.007	1.00
Expenses net of all fee waivers and credits	1.007	1.00
Net investment income (loss)	0.437	0.40
Portfolio turnover (%)	935	95

¹ Class I shares began operations on 6-12-06.

² Based on the average of the shares outstanding.

³ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁴ Assumes dividend reinvestment.

⁵ Not annualized.

⁶ Less than $500,000.

⁷ Annualized.

See notes to financial statements

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F I N A N C I A L  S T A T E M E N T S

Financial highlights

CLASS R1 SHARES
Period ended	2-28-071	2-29-08
Per share operating performance
Net asset value, beginning of period	$20.00	$21.60
Net investment income (loss)2	(0.05)	(0.01)
Net realized and unrealized gain
(loss) on investments	1.90	(1.25)
Total from investment operations	1.85	(1.26)
Less distributions
From net investment income	(0.03)	—
From net realized gain	(0.22)	(1.18)
	(0.25)	(1.18)
Net asset value, end of period	$21.60	$19.16
Total return3,4 (%)	9.275	(6.39)
Ratios and supplemental data
Net assets, end of period (in millions)	—6	—6
Ratios (as a percentage of average net assets):
Expenses before reductions	21.557	15.85
Expenses net of fee waivers, if any	1.747	1.50
Expenses net of all fee waivers and credits	1.747	1.50
Net investment income (loss)	(0.34)7	(0.06)
Portfolio turnover (%)	935	95

¹ Class R1 shares began operations on 6-12-06.

² Based on the average of the shares outstanding.

³ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁴ Assumes dividend reinvestment.

⁵ Not annualized.

⁶ Less than $500,000.

⁷ Annualized.

See notes to financial statements

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Notes to financial statements

1. Organization

John Hancock Growth Fund (the Fund) is a non-diversified series of John Hancock Funds III (the Trust). The Trust was established as a Massachusetts business trust on June 9, 2005. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end investment management company. The investment objective of the Fund is to seek long-term capital growth.

John Hancock Life Insurance Company of New York (John Hancock New York) is a wholly owned subsidiary of John Hancock Life Insurance Company (U.S.A.) (John Hancock USA). John Hancock USA and John Hancock New York are indirect wholly owned subsidiaries of The Manufacturers Life Insurance Company (Manulife), which in turn is a wholly owned subsidiary of Manulife Financial Corporation (MFC), a publicly traded company. MFC and its subsidiaries are known collectively as “Manulife Financial.”

John Hancock Investment Management Services, LLC (the Adviser), a Delaware limited liability company controlled by John Hancock USA, serves as investment adviser for the Trust and John Hancock Funds, LLC (the Distributor), a Delaware limited liability company, an affiliate of the Adviser, serves as principal underwriter.

The Board of Trustees have authorized the issuance of multiple classes of shares of the Fund, including classes designated as Class A, Class B, Class C, Class I and Class R1. Class A, Class B and Class C shares are open to all retail investors. Class I shares are offered without any sales charge to various institutional and certain individual investors. Class R1 shares are available only to certain retirement plans. The shares of each class represent an interest in the same portfolio of investments of the Fund, and have equal rights as to voting, redemptions, dividends and liquidation, except that certain expenses, subject to the approval of the Board of Trustees, may be applied differently to each class of shares in accordance with current regulations of the Securities and Exchange Commission (SEC) and the Internal Revenue Service. Shareholders of a class that bear distribution and service expenses under the terms of a distribution pl an have exclusive voting rights to that distribution plan. Class B shares will convert to Class A shares eight years after purchase.

The Adviser and other affiliates of John Hancock USA owned 779,618 and 5,338 shares of beneficial interest of Class A and Class R1, respectively, on February 29, 2008.

2. Significant accounting policies

In the preparation of the financial statements, the Fund follows the policies described below. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results may differ from these estimates.

Security valuation

The net asset value of the shares of the Fund is determined daily as of the close of the New York Stock Exchange (NYSE), normally at 4:00 P.M., Eastern Time. Short-term debt investments that have a remaining maturity of 60 days or less are valued at amortized cost, and thereafter assume a constant amortization to maturity of any discount or premium, which approximates market value. Investments in John Hancock Cash Investment Trust (JHCIT), an affiliate of the John Hancock Advisers, LLC (JHA), a wholly owned subsidiary of John Hancock Financial Services, Inc., a subsidiary of MFC, are valued at their net asset value each business day. All other securities held by the

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Fund are valued at the last sale price or offi-cial closing price (closing bid price or last evaluated quote if no sale has occurred) as of the close of business on the principal securities exchange (domestic or foreign) on which they trade or, lacking any sales, at the closing bid price. Securities traded only in the over-the-counter market are valued at the last bid price quoted by brokers making markets in the securities at the close of trading. Securities for which there are no such quotations, principally debt securities, are valued based on the evaluated prices provided by an independent pricing service, which utilizes both dealer-supplied and electronic data processing techniques, which take into account factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other market data.

Other assets and securities for which no such quotations are readily available are valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees. Generally, trading in non-U.S. securities is substantially completed each day at various times prior to the close of trading on the NYSE. The values of such securities used in computing the net asset value of a Fund’s shares are generally determined as of such times. Occasionally, significant events that affect the values of such securities may occur between the times at which such values are generally determined and the close of the NYSE. Upon such an occurrence, these securities will be valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees.

In deciding whether to make a fair value adjustment to the price of a security, the Board of Trustees or their designee may review a variety of factors, including developments in foreign markets, the performance of U.S. securities markets and the performance of instruments trading in U.S. markets that represent foreign securities and baskets of foreign securities. The Fund may also fair value securities in other situations, for example, when a particular foreign market is closed, but the Fund is calculating the net asset value. In view of these factors, it is likely that Funds investing significant amounts of assets in securities in foreign markets will be fair valued more frequently than Funds investing significant amounts of assets in frequently traded, U.S. exchange listed securities of large-capitalization U.S. issuers.

For purposes of determining when fair value adjustments may be appropriate with respect to Funds that invest in securities in foreign markets that close prior to the NYSE, the Funds will, on an ongoing basis, monitor for “significant market events.” A significant market event may be a certain percentage change in the value of an index or of certain Exchange Traded Funds that track foreign markets in which Funds have significant investments. If a significant market event occurs due to a change in the value of the index or of Exchange Traded Funds, the pricing for the Fund will promptly be reviewed and potential adjustments to the net asset value of the Fund will be recommended to the Trust’s Pricing Committee when applicable.

Fair value pricing of securities is intended to help ensure that the net asset value of the Fund’s shares reflects the value of the Fund’s securities as of the close of the NYSE (as opposed to a value which is no longer accurate as of such close), thus limiting the opportunity for aggressive traders to purchase shares of the Fund at deflated prices, reflecting stale security valuations, and to promptly sell such shares at a gain. However, a security’s valuation may differ depending on the method used for determining value and no assurance can be given that fair value pricing of securities will successfully eliminate all potential opportunities for such trading gains.

New accounting pronouncements

In September 2006, Financial Accounting Standards Board (FASB) Standard No. 157,  Fair Value Measurements (FAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. FAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosure about fair value measurements. As of February 29, 2008, management does not believe the adoption of FAS 157 will impact the amounts reported in

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31

the financial statements; however, additional disclosures regarding pricing sources will be required about the inputs used to develop the measurements of fair value and the related realized and unrealized gain/loss for certain securities valued by significant unobservable market inputs.

In March 2008, FASB No. 161 (FAS 161),  Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133 (FAS 133), was issued and is effective for fiscal years beginning after November 15, 2008. FAS 161 amends and expands the disclosure requirements of FAS133 in order to provide financial statement users an understanding of a company’s use of derivative instruments, how derivative instruments are accounted for under FAS 133 and related interpretations and how these instruments affect a company’s financial position, performance, and cash flows. FAS 161 requires companies to disclose information detailing the objectives and strategies for using derivative instruments, the level of derivative activity entered into by the company, and any credit risk-related contingent features of the agreements. Management is currently evaluating the adoption of FAS 16 1 on the Fund’s financial statement disclosures.

Guarantees and indemnifications

Under the Trust’s organizational documents, its Officers and Trustees are indemnified against certain liability arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust that have not yet occurred.

Repurchase agreements

The Fund may enter into repurchase agreements. When the Fund enters into a repurchase agreement through its custodian, it receives delivery of securities, the amount of which at the time of purchase and each subsequent business day is required to be maintained at such a level that the market value is generally at least 102% of the repurchase amount. The Fund will take constructive receipt of all securities underlying the repurchase agreements it has entered into until such agreements expire. If the seller defaults, the Fund would suffer a loss to the extent that proceeds from the sale of underlying securities were less than the repurchase amount. The Fund may enter into repurchase agreements maturing within seven days with domestic dealers, banks or other financial institutions deemed to be creditworthy by the Adviser. Collateral for certain tri-party repurchase agreements is held at the custodian bank in a segregated account for the benefi t of the Fund and the counterparty.

Security transactions and related investment income

Investment security transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment transactions are reported on trade date. Interest income is accrued as earned. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Foreign dividends are recorded on the ex-date or when the Fund becomes aware of the dividends from cash collections. Discounts/premiums are accreted/ amortized for financial reporting purposes. Non-cash dividends are recorded at the fair market value of the securities received. Debt obligations may be placed in a non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful, based upon consistently applied procedures.

From time to time, the Fund may invest in Real Estate Investment Trusts (REITs) and, as a result, will estimate the components of distributions from these securities. Distributions from REITs received in excess of income are recorded as a reduction of cost of investments and/or as a realized gain.

The Fund uses the specific identification method for determining realized gain or loss on investments for both financial statement and federal income tax reporting purposes.

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Allocations of income and expenses

All income, expenses (except class-specific expenses), and realized and unrealized gain/ loss are allocated to each class of shares based upon the relative net assets of each class. Dividends to shareholders from net investment income are determined at a class level and distributions from capital gains are determined at a Fund level.

Expenses not directly attributable to the Fund or share classes are allocated based on the relative share of net assets of the Fund or share class at the time the expense was incurred. Class-specific expenses, as detailed in Note 3, are accrued daily and charged directly to the respective share classes.

Securities lending

The Fund may lend portfolio securities from time to time in order to earn additional income. The Fund retains beneficial ownership of the securities it has loaned and continues to receive interest and dividends paid by the issuer of securities and to participate in any changes in their value. On the settlement date of the loan, the Fund receives collateral against the loaned securities and maintain collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. Any cash collateral received is invested in the JHCIT. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collat eral. The Fund receives compensation for lending its securities either in the form of fees, guarantees, and/or by retaining a portion of interest on the investment of any cash received as collateral.

The Fund has entered into an agreement with Morgan Stanley & Co. Incorporated and MS Securities Services Inc. (collectively, Morgan Stanley), which permits the Fund to lend securities to Morgan Stanley on a principal basis. Morgan Stanley is the primary borrower of fund securities of the Fund. The risk of having one primary borrower of securities (as opposed to several borrowers in an agency relationship) is that should Morgan Stanley fail financially, all securities lent will be affected by the failure and by any delays in recovery of the securities (or in the rare event, loss of rights in the collateral).

Prior to May 8, 2007, cash collateral was invested in the State Street Navigator Securities Lending Portfolio. At February 29, 2008, the Fund loaned securities having a market value of $81,677 collateralized by securities in the amount of $83,311.

Futures

The Fund may purchase and sell financial futures contracts and options on those contracts. The Fund invests in contracts based on financial instruments, such as U.S. Treasury Bonds or Notes, or on securities indices such as the Standard & Poor’s 500 Index, in order to hedge against a decline in the value of securities owned by the Fund.

Initial margin deposits required upon entering into futures contracts are satisfied by the delivery of specific securities or cash as collateral to the broker (the Fund’s agent in acquiring the futures position). If the position is closed out by taking an opposite position prior to the settlement date of the futures contract, a final determination of variation margin is made, cash is required to be paid to or released by the broker and the Fund realizes a gain or loss.

When the Fund sells a futures contract based on a financial instrument, the Fund becomes obligated to deliver that kind of instrument at an agreed upon date for a specified price. The Fund realizes a gain or loss depending on whether the price of an offsetting purchase is less or more than the price of the initial sale or on whether the price of an offsetting sale is more or less than the price of the initial purchase. The Fund could be exposed to risks if it could not close out futures positions because of an illiquid secondary market or the inability of counterparties to meet the terms of their contracts. Futures contracts are valued at the quoted daily settlement prices established by the exchange on which they trade.

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The following is a summary of open futures contracts on February 29, 2008:

					UNREALIZED
	NUMBER OF		EXPIRATION	NOTIONAL	APPRECIATION
OPEN CONTRACTS	CONTRACTS	POSITION	DATE	AMOUNT	(DEPRECIATION)
S&P Mini 500 Index Futures	1	Long	Mar 2008	$66,565	($1,438)

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 that is distributed to shareholders. Therefore, no federal income tax provision is required. Net capital losses of $733,332 that are attributable to security transactions incurred after October 31, 2007, are treated as arising on March 1, 2008, the first day of the Fund’s next taxable year.

The Fund has adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement 109 (FIN 48), at the beginning of the Fund’s fiscal year. FIN 48 prescribes a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not have a material impact on the Fund’s financial statements. Each of the Fund’s federal tax returns for the prior fiscal years remains subject to examination by the Internal Revenue Service.

Distribution of income and gains

The Fund records distributions to shareholders from net investment income and net realized gains, if any, on the ex-dividend date. During the year ended February 28, 2007, the tax character of distributions paid was as follows: ordinary income $205,911 and long-term capital gain $40,377. During the year ended February 29, 2008, the tax character of distributions paid was as follows: ordinary income $1,248,461 and long-term capital gain $237,641. Distributions paid by the Fund with respect to each class of shares are calculated in the same manner, at the same time and are in the same amount, except for the effect of expenses that may be applied differently to each class.

As of February 29, 2008, the components of distributable earnings on a tax basis included $19,128 of undistributed ordinary income.

Such distributions and distributable earnings, on a tax basis, are determined in conformity with income tax regulations, which may differ from accounting principles generally accepted in the United States of America. Distributions in excess of tax basis earnings and profits, if any, are reported in the Fund’s financial statements as a return of capital.

Capital accounts within financial statements are adjusted for permanent book/tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book/tax differences will reverse in a subsequent period. Permanent book/tax differences are primarily attributable to net operating losses.

3. Investment advisory and other agreements

The Trust has entered into an Investment Advisory Agreement with the Adviser. The Adviser is responsible for managing the corporate and business affairs of the Trust and for selecting and compensating subadvisers to handle the investment of the assets of the Fund, subject to the supervision of the Trust’s Board of Trustees. As compensation for its services, the Adviser receives an advisory fee from the Trust. Under the Advisory Agreement, the Fund pays a monthly management fee to the Adviser equivalent, on an annual basis, to the sum of: (a) 0.80% of the first $500,000,000 of the Fund’s aggregate daily net assets; (b) 0.78% of the next $500,000,000 of the Fund’s aggregate daily net assets; (c) 0.77% of the next $1,500,000,000 of the Fund’s aggregate daily net assets; and (d) 0.76% of the Fund’s aggregate daily net assets in excess of $2,500,000,000. Aggregate net assets include the net assets of the Fund and Growth Trust, a series of John Hancock Trust and Growth Fund, a series of John Hancock Funds II. The Adviser has a subadvisory agreement with Grantham, Mayo, Van Otterloo & Co. LLC. The Fund is not responsible for payment of the subadvisory fees.

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The investment management fees incurred for the year ended February 29, 2008, were equivalent to an annual effective rate of 0.80% of the Fund’s average daily net assets.

Expense reimbursements

The Adviser has contractually agreed to reimburse or limit certain Fund level expenses to 0.11% of the Fund’s average annual net assets which are allocated pro rata to all share classes. This agreement excludes taxes, portfolio brokerage commissions, interest, advisory fees, Rule 12b-1 fees, transfer agency fees, blue sky fees, printing and postage and litigation and indemnification expenses and other extraordinary expenses not incurred in the ordinary course of the Fund’s business. In addition, fees incurred under any agreement or plans of the Fund dealing with services for the shareholders and others with beneficial interest in shares of the Fund, are excluded.

In addition, the Adviser has agreed to reimburse or limit certain expenses for each share class. This agreement excludes taxes, portfolio brokerage commissions, interest and litigation and indemnification expenses and other extraordinary expenses not incurred in the ordinary course of the Fund’s business. In addition, fees incurred under any agreement or plans of the Fund dealing with services for the shareholders and others with beneficial interest in shares of the Fund, are excluded. The reimbursements and limits are such that these expenses will not exceed 1.40% for Class A shares, 2.10% for Class B, 2.10% for Class C, 1.00% for Class I and 1.50% for Class R1. Accordingly, the expense reductions or reimbursements related to this agreement were $105,810, $18,036, $23,819, $18,464 and $16,302 for Class A, Class B, Class C, Class I and Class R1, respectively for the year ended February 29, 2008. The expense reimbursements and limits will continue in effect until Jun e 30, 2008 and thereafter until terminated by the Adviser on notice to the Trust.

Fund administration fees

Pursuant to the Advisory Agreement, the Fund reimburses the Adviser for all expenses associated with providing the administrative, financial, legal, accounting and recordkeeping services of the Fund, including the preparation of all tax returns, annual, semiannual and periodic reports to shareholders and the preparation of all regulatory reports. These expenses are allocated based on the relative share of net assets of each class at the time the expense was incurred.

The fund administration fees incurred for the year ended February 29, 2008, were $11,948 with an annual effective rate of 0.05% of the Fund’s average daily net assets.

Distribution and shareholder servicing fees

The Trust has a Distribution Agreement with the Distributor. The Fund has adopted Distribution Plans with respect to Class A, Class B, Class C and Class R1, pursuant to Rule 12b-1 under the 1940 Act, to pay the Distributor for the services it provides as distributor of shares of the Fund. Accordingly, the Fund makes monthly payments to the Distributor at an annual rate not to exceed 0.30%, 1.00%, 1.00% and 0.50% of average daily net asset value of Class A, Class B, Class C and Class R1, respectively. A maximum of 0.25% of such payments may be service fees, as defined by the Conduct Rules of Financial Industry Regulatory Authority (formerly the National Association of Securities Dealers). Under the Conduct Rules, curtailment of a portion of the Fund’s 12b-1 payments could occur under certain circumstances.

In addition, the Fund has also adopted a Service Plan for Class R1 shares. Under the Service Plan, the Fund may pay up to 0.25% of Class R1 average daily net asset value for certain other services. There were no Service Plan fees incurred for the year ended February 29, 2008.

Sales charges

Class A shares are assessed up-front sales charges of up to 5.00% of net asset value of such shares. During the year ended February 29, 2008, the Fund was informed that the Distributor received net up-front sales charges of $37,898 with regard to sales of Class A shares. Of this amount, $6,302 was retained and used for printing prospectuses; advertising, sales literature and other purposes; $31,521 was paid as sales commissions to unrelated broker-dealers; and $75 was paid as sales commissions to sales

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personnel of Signator Investors, Inc. (Signator Investors), a related broker-dealer, an indirect subsidiary of MFC.

Class B shares that are redeemed within six years of purchase are subject to a contingent deferred sales charge (CDSC) at declining rates, beginning at 5.00% of the lesser of the current market value at the time of redemption or the original purchase cost of the shares being redeemed. Class C shares that are redeemed within one year of purchase are subject to a CDSC at a rate of 1.00% of the lesser of the current market value at the time of redemption or the original purchase cost of the shares being redeemed. Proceeds from the CDSCs are paid to the Distributor and are used, in whole or in part, to defray its expenses for providing distribution-related services to the Fund in connection with the sale of Class B and Class C shares. During the year ended February 29, 2008, CDSCs received by Distributor amounted to $1,633 for Class B shares and $509 for Class C shares.

Transfer agent fees

The Fund has a Transfer Agency Agreement with John Hancock Signature Services, Inc. (Signature Services), an indirect subsidiary of MFC. For Class A, Class B, Class C, Class I and Class R1 shares, the Fund pays a monthly transfer agent fee at an annual rate of 0.05% of each class’ average daily net assets, plus a fee based on the number of shareholder accounts and reimbursement for certain out-of-pocket expenses. Expenses not directly attributable to a particular class of shares are aggregated and allocated to each class on the basis of its relative net asset value. The Fund pays a monthly fee which is based on an annual rate of $15.00 for each Class A shareholder account, $17.50 for each Class B shareholder account, $16.50 for each Class C shareholder account, and $15.00 for each Class R1 shareholder account.

Signature Services has agreed to limit the transfer agent fees so that such fees do not exceed 0.20% annually of Class A, Class B, Class C, Class I and Class R1 share average daily net assets. This agreement is effective until December 31, 2008. Signature Services reserves the right to terminate this limitation in the future. There were no transfer agent fee reductions for Class A, Class B, Class C, Class I and Class R1 shares, respectively, during the year ended February 29, 2008.

In addition, Signature Services has voluntarily agreed to further limit transfer agent fees for Class R1 shares so that such fees do not exceed 0.05% annually of each class’s average daily net assets. For the year ended February 29, 2008, the transfer agent fees reductions for Class R1 were $174.

In May 2007, the Fund began receiving earnings credits from its transfer agent as a result of uninvested cash balances. These credits are used to reduce a portion of the Fund’s transfer agent fees and out-of-pocket expenses. During the year ended February 29, 2008, the Fund’s transfer agent fees and out-of-pocket expenses were reduced by $283 for transfer agent credits earned.

Class level expenses for the year ended February 29, 2008, were as follows:

	Distribution and	Transfer	Blue sky	Printing and
Share class	service fees	agent fees	fees	postage fees
Class A	$70,763	$20,006	$18,354	$5,740
Class B	6,850	1,395	14,680	148
Class C	17,604	3,599	14,820	803
Class I	—	114	17,541	—
Class R1	574	233	15,836	3
Total	$95,791	$25,347	$81,231	$6,694

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4. Trustees’ fees

The Trust compensates each Trustee who is not an employee of the Adviser or its affiliates. Total Trustees’ expenses are allocated to the Fund based on its average daily net asset value.

5. Line of credit

The Fund has entered into an agreement which enables them to participate in a $100 million unsecured committed line of credit with State Street Corporation. Borrowings will be made solely to temporarily finance the repurchase of capital shares. Interest is charged to the Fund based on its borrowings at a rate per annum equal to the Federal Funds rate plus 0.50% . In addition, a commitment fee of 0.05% per annum, payable at the end of each calendar quarter, based on the average daily-unused portion of the line of credit, is charged to the Fund on a prorated basis based on average net assets. Effective October 15, 2007, the commitment fee was changed from 0.07% to 0.05% . For the year ended February 29, 2008, there were no borrowings under the line of credit.

6. Fund share transactions

Share activities for the Fund for the years ended February 28, 2007, and February 29, 2008, were as follows:

		Year ended 2-28-071	Year ended 2-29-08
	Shares	Amount	Shares	Amount
Class A shares
Sold	941,625	$19,160,734	253,211	$5,635,153
Distributions reinvested	10,718	232,682	60,442	1,296,476
Repurchased	(3,531)	(77,567)	(100,129)	(2,102,448)
Net increase (decrease)	948,812	$19,315,849	213,524	$4,829,181
Class B shares
Sold	19,722	$418,160	29,429	$643,344
Distributions reinvested	132	2,867	1,972	41,918
Repurchased	(217)	(4,845)	(13,671)	(298,183)
Net increase (decrease)	19,637	$416,182	17,730	$387,079
Class C shares
Sold	42,249	$911,629	71,331	$1,568,194
Distributions reinvested	277	6,002	4,932	104,855
Repurchased	(13)	(287)	(22,472)	(471,936)
Net increase (decrease)	42,513	$917,344	53,791	$1,201,113
Class I shares
Sold	368,724	$7,471,000	7,959	$180,651
Distributions reinvested	18	389	520	11,243
Repurchased	(362,143)	(8,013,922)	(11,806)	(252,855)
Net increase (decrease)	6,599	($542,533)	(3,327)	($60,961)
Class R1 shares
Sold	5,000	$100,000	1,028	$20,749
Distributions reinvested	59	1,272	293	6,262
Net increase (decrease)	5,059	$101,272	1,321	$27,011
Net increase (decrease)	1,022,620	$20,208,114	283,039	$6,383,423

¹Period from 6-12-06 (commencement of operations) to 2-28-07.

7. Purchases and sales of securities

Purchases and proceeds from sales or maturities of securities, other than short-term securities and obligations of the U.S. government, during the year ended February 29, 2008, aggregated $29,513,673 and $23,884,586, respectively.

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37

Auditors’ report

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of John Hancock Funds III and Shareholders of John Hancock Growth Fund,

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of John Hancock Growth Fund (the Fund) at February 29, 2008, and the results of its operations, the changes in its net assets and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of investments at February 29, 2008 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
Boston, Massachusetts
April 18, 2008

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Tax information

Unaudited

For federal income tax purposes, the following information is furnished with respect to the distributions of the Fund, if any, paid during its taxable year ended February 29, 2008.

The Fund has designated distributions to shareholders of $237,641 as a long-term capital gain dividend. With respect to the ordinary dividends paid by the Fund for the fiscal year ended February 29, 2008, 55.14% of the dividends qualifies for the corporate dividends-received deduction.

The Fund hereby designates the maximum amount allowable of its net taxable income as qualified dividend income as provided in the Jobs and Growth Tax Relief Reconciliation Act of 2003. This amount will be reflected on Form 1099-DIV for the calendar year 2008.

Shareholders will be mailed a 2008 U.S. Treasury Department Form 1099-DIV in January 2009. This will reflect the total of all distributions that are taxable for calendar year 2008.

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39

Trustees and Officers

This chart provides information about the Trustees and Officers who oversee your John Hancock fund. Officers elected by the Trustees manage the day-to-day operations of the Fund and execute policies formulated by the Trustees.

Independent Trustees
Name, Year of Birth		Number of
Position(s) held with Fund	Trustee	John Hancock
Principal occupation(s) and other	of Fund	funds overseen
directorships during past 5 years	since1	by Trustee
James F. Carlin, Born: 1940	2006	55
Chairman (since December 2007); Director and Treasurer, Alpha Analytical Laboratories, Inc. (chemical
analysis) (since 1985); Part Owner and Treasurer, Lawrence Carlin Insurance Agency, Inc. (since 1995);
Part Owner and Vice President, Mone Lawrence Carlin Insurance Agency, Inc. (until 2005); Chairman
and Chief Executive Officer, Carlin Consolidated, Inc. (management/investments) (since 1987); Trustee,
Massachusetts Health and Education Tax Exempt Trust (1993–2003).
William H. Cunningham, Born: 1944	2006	55
Professor, University of Texas at Austin (since 1971); former Chancellor, University of Texas System and
former President, University of Texas at Austin (until 2001); Chairman and Chief Executive Officer, IBT
Technologies (until 2001); Director of the following: Hicks Acquisition Company I, Inc. (since 2007);
Hire.com (until 2004), STC Broadcasting, Inc. and Sunrise Television Corp. (until 2001), Symtx, Inc.
(electronic manufacturing) (since 2001), Adorno/Rogers Technology, Inc. (until 2004), Pinnacle
Foods Corporation (until 2003), rateGenius (until 2003), Lincoln National Corporation (insurance)
(since 2006), Jefferson-Pilot Corporation (diversified life insurance company) (until 2006), New
Century Equity Holdings (formerly Billing Concepts) (until 2001), eCertain (until 2001), ClassMap.com
(until 2001), Agile Ventures (until 2001), AskRed.com (until 2001), Southwest Airlines (since 2000),
Introgen (manufacturer of biopharmaceuticals) (since 2000) and Viasystems Group, Inc. (electronic
manufacturer) (until 2003); Advisory Director, Interactive Bridge, Inc. (college fundraising) (until 2001);
Advisory Director, Q Investments (until 2003); Advisory Director, JPMorgan Chase Bank (formerly Texas
Commerce Bank–Austin), LIN Television (until 2008), WilTel Communications (until 2003) and Hayes
Lemmerz International, Inc. (diversified automotive parts supply company) (since 2003).
Charles L. Ladner,2 Born: 1938	2006	55
Chairman and Trustee, Dunwoody Village, Inc. (retirement services) (until 2003); Senior Vice President
and Chief Financial Officer, UGI Corporation (public utility holding company) (retired 1998); Vice
President and Director, AmeriGas, Inc. (retired 1998); Director, AmeriGas Partners, L.P. (gas distribution)
(until 1997); Director, EnergyNorth, Inc. (until 1997); Director, Parks and History Association (until 2005).
John A. Moore,2 Born: 1939	2006	55
President and Chief Executive Officer, Institute for Evaluating Health Risks (nonprofit institution)
(until 2001); Senior Scientist, Sciences International (health research) (until 2003); Former Assistant
Administrator and Deputy Administrator, Environmental Protection Agency; Principal, Hollyhouse
(consulting) (since 2000); Director, CIIT Center for Health Science Research (nonprofit research)
(until 2007).

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Independent Trustees (continued)
Name, Year of Birth		Number of
Position(s) held with Fund	Trustee	John Hancock
Principal occupation(s) and other	of Fund	funds overseen
directorships during past 5 years	since1	by Trustee
Patti McGill Peterson,2 Born: 1943	2006	55
Senior Associate, Institute for Higher Education Policy (since 2007); Executive Director, Council for
International Exchange of Scholars and Vice President, Institute of International Education (until 2007);
Senior Fellow, Cornell Institute of Public Affairs, Cornell University, Ithaca, NY (until 1998); Former
President, Wells College, Aurora, NY, and St. Lawrence University, Canton, NY; Director, Niagara
Mohawk Power Corporation (until 2003); Director, Ford Foundation, International Fellowships Program
(since 2002); Director, Lois Roth Endowment (since 2002); Director, Council for International Educational
Exchange (since 2003).
Steven R. Pruchansky, Born: 1944	2006	55
Chairman and Chief Executive Officer, Greenscapes of Southwest Florida, Inc. (since 2000); Director and
President, Greenscapes of Southwest Florida, Inc. (until 2000); Managing Director, JonJames, LLC (real
estate) (since 2000); Director, First Signature Bank & Trust Company (until 1991); Director, Mast Realty
Trust (until 1994); President, Maxwell Building Corp. (until 1991).
Non-Independent Trustees3
Name, Year of Birth		Number of
Position(s) held with Fund	Trustee	John Hancock
Principal occupation(s) and other	of Fund	funds overseen
directorships during past 5 years	since1	by Trustee
James R. Boyle, Born: 1959	2006	265
Executive Vice President, Manulife Financial Corporation (since 1999); President, John Hancock Variable
Life Insurance Company (since March 2007); Executive Vice President, John Hancock Life Insurance
Company (since 2004); Chairman and Director, John Hancock Advisers, LLC (the Adviser), John Hancock
Funds, LLC and The Berkeley Financial Group, LLC (The Berkeley Group) (holding company) (since 2005);
Senior Vice President, The Manufacturers Life Insurance Company (U.S.A.) (until 2004).

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Principal officers who are not Trustees
Name, Year of Birth
Position(s) held with Fund	Officer
Principal occupation(s) and other	of Fund
directorships during past 5 years	since
Keith F. Hartstein, Born: 1956	2006
President and Chief Executive Officer
Senior Vice President, Manulife Financial Corporation (since 2004); Director, President and Chief
Executive Officer, the Adviser, The Berkeley Group and John Hancock Funds, LLC (since 2005); Director,
MFC Global Investment Management (U.S.), LLC (MFC Global (U.S.)) (since 2005); Director, John
Hancock Signature Services, Inc. (since 2005); President and Chief Executive Officer, John Hancock
Investment Management Services, LLC (since 2006); President and Chief Executive Officer, John Hancock
Funds, John Hancock Funds II, John Hancock Funds III and John Hancock Trust (since 2005); Director,
Chairman and President, NM Capital Management, Inc. (since 2005); Member, Investment Company
Institute Sales Force Marketing Committee (since 2003); President and Chief Executive Officer, MFC
Global (U.S.) (2005–2006); Executive Vice President, John Hancock Funds, LLC (until 2005).
Thomas M. Kinzler, Born: 1955	2006
Secretary and Chief Legal Officer
Vice President and Counsel, John Hancock Life Insurance Company (U.S.A.) (since 2006); Secretary and
Chief Legal Officer, John Hancock Funds and John Hancock Funds II (since 2006); Chief Legal Officer
and Assistant Secretary, John Hancock Trust (since 2006); Vice President and Associate General Counsel,
Massachusetts Mutual Life Insurance Company (1999–2006); Secretary and Chief Legal Counsel, MML
Series Investment Fund (2000–2006); Secretary and Chief Legal Counsel, MassMutual Institutional Funds
(2000–2004); Secretary and Chief Legal Counsel, MassMutual Select Funds and MassMutual Premier
Funds (2004–2006).
Francis V. Knox, Jr., Born: 1947	2006
Chief Compliance Officer
Vice President and Chief Compliance Officer, John Hancock Investment Management Services, LLC,
the Adviser and MFC Global (U.S.) (since 2005); Vice President and Chief Compliance Officer, John
Hancock Funds, John Hancock Funds II, John Hancock Funds III and John Hancock Trust (since 2005);
Vice President and Assistant Treasurer, Fidelity Group of Funds (until 2004); Vice President and Ethics &
Compliance Officer, Fidelity Investments (until 2001).
Charles A. Rizzo, Born: 1957	2007
Chief Financial Officer
Chief Financial Officer, John Hancock Funds, John Hancock Funds II, John Hancock Funds III and John
Hancock Trust (since June 2007); Assistant Treasurer, Goldman Sachs Mutual Fund Complex (regis-
tered investment companies) (2005–June 2007); Vice President, Goldman Sachs (2005–June 2007);
Managing Director and Treasurer of Scudder Funds, Deutsche Asset Management (2003–2005);
Director, Tax and Financial Reporting, Deutsche Asset Management (2002–2003); Vice President and
Treasurer, Deutsche Global Fund Services (Deutsche Registered Investment Companies) (1999–2002).
Gordon M. Shone, Born: 1956	2006
Treasurer
Senior Vice President, John Hancock Life Insurance Company (U.S.A.) (since 2001); Treasurer, John
Hancock Funds (since 2006), John Hancock Funds II, John Hancock Funds III and John Hancock Trust
(since 2005); Vice President and Chief Financial Officer, John Hancock Trust (2003–2005); Vice President,
John Hancock Investment Management Services, Inc., John Hancock Advisers, LLC (since 2006) and The
Manufacturers Life Insurance Company (U.S.A.) (1998–2000).

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42

Principal officers who are not Trustees (continued)
Name, Year of Birth
Position(s) held with Fund	Officer
Principal occupation(s) and other	of Fund
directorships during past 5 years	since
John G. Vrysen, Born: 1955	2006
Chief Operating Officer
Senior Vice President, Manulife Financial Corporation (since 2006); Director, Executive Vice President
and Chief Operating Officer, the Adviser, The Berkeley Group and John Hancock Funds, LLC (since
June 2007); Executive Vice President and Chief Operating Officer, John Hancock Investment
Management Services, LLC (since December 2007); Chief Operating Officer, John Hancock Funds,
John Hancock Funds II, John Hancock Funds III and John Hancock Trust (since June 2007); Director,
Executive Vice President and Chief Financial Officer, the Adviser, The Berkeley Group and John Hancock
Funds, LLC (2005–2007); Executive Vice President and Chief Financial Officer, John Hancock Investment
Management Services, LLC (2005–2007); Executive Vice President and Chief Financial Officer, MFC
Global (U.S.) (2005 until August 2007); Director, John Hancock Signature Services, Inc. (since 2005);
Chief Financial Officer, John Hancock Funds, John Hancock Funds II, John Hancock Funds III and John
Hancock Trust (2005 until June 2007); Vice President and General Manager, John Hancock Fixed
Annuities, U.S. Wealth Management (2004–2005); Vice President, Operations, Manulife Wood Logan
(2000–2004).

The business address for all Trustees and Officers is 601 Congress Street, Boston, Massachusetts 02210-2805.

The Statement of Additional Information of the Fund includes additional information about members of the Board of Trustees of the Fund and is available without charge, upon request, by calling 1-800-225-5291.

¹ Each Trustee serves until resignation, retirement age or until his or her successor is elected.

² Member of Audit and Compliance Committee.

³ Non-Independent Trustee holds positions with the Fund’s investment adviser, underwriter and certain other affiliates.

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43

For more information

The Fund’s proxy voting policies, procedures and records are available without charge, upon request:

By phone	On the Fund’s Web site	On the SEC’s Web site
1-800-225-5291	www.jhfunds.com/proxy	www.sec.gov
Investment adviser	Custodian	Legal counsel
John Hancock Investment	State Street Bank & Trust Co.	Kirkpatrick & Lockhart
Management Services, LLC	2 Avenue de Lafayette	Preston Gates Ellis LLP
601 Congress Street	Boston, MA 02111	One Lincoln Street
Boston, MA 02210-2805		Boston, MA 02111-2950
	Transfer agent
Subadviser	John Hancock Signature	Independent registered
Grantham, Mayo, Van	Services, Inc.	public accounting firm
Otterloo & Co. LLC	P.O. Box 9510	PricewaterhouseCoopers LLP
40 Rowes Wharf	Portsmouth, NH 03802-9510	125 High Street
Boston, MA 02110		Boston, MA 02110
Principal distributor
John Hancock Funds, LLC
601 Congress Street
Boston, MA 02210-2805

How to contact us
Internet	www.jhfunds.com
Mail	Regular mail:	Express mail:
	John Hancock Signature	John Hancock Signature
	Services, Inc.	Services, Inc.
	P.O. Box 9510	Mutual Fund Image Operations
	Portsmouth, NH 03802-9510	164 Corporate Drive
		Portsmouth, NH 03801
Phone	Customer service representatives	1-800-225-5291
	EASI-Line	1-800-338-8080
	TDD line	1-800-554-6713

A listing of month-end portfolio holdings is available on our Web site, www.jhfunds.com. A more detailed portfolio holdings summary is available on a quarterly basis 60 days after the fiscal quarter on our Web site or upon request by calling 1-800-225-5291, or on the SEC’s Web site, www.sec.gov.

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44

1-800-225-5291 1-800-554-6713 TDD 1-800-338-8080 EASI-Line www.jhfunds. com

Now available:electronicdelivery
www.jhfunds.com/edelivery

This report is for the information of the shareholders of John Hancock Growth Fund.	8600A	2/08
It is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus.		4/08

Discussion of Fund performance

By Grantham, Mayo, Van Otterloo & Co. LLC (GMO)

The year ended February 29, 2008, was challenging for international markets. Share prices weakened significantly in the final four months of the period, as a slew of unfavorable data built a convincing case that a serious U.S.-centered slowdown was occurring and might be spreading to other developed countries as well. Against this backdrop, the S&P/Citigroup Primary Market Index (PMI) Europe, Pacific, Asia Composite (EPAC) Growth Style Index gained 3.54%, while the average foreign large blend fund monitored by Morningstar Inc. returned 2.31% . During this period, the Fund’s momentum criteria worked better than its valuation parameters.

“The year ended February 29,
2008, was challenging for
international markets.”

During the past year ended February 29, 2008, John Hancock International Growth Fund’s Class A, Class B, Class C, Class I, Class R1, Class 1 and Class NAV shares returned 2.85%, 2.03%, 1.99%, 3.27%, 2.73%, 3.28% and 3.34%, respectively, at net asset value. Among countries, the Fund received a significant boost from Canada, with lesser contributions from Hong Kong, Italy, Japan and Switzerland. The Fund’s largest contributor was Canada’s Research In Motion, Ltd., maker of the popular BlackBerry handheld messaging device. Fertilizer maker Potash Corp. of Saskatchewan, Inc. was another Canadian standout, along with U.K.-based mining company Rio Tinto PLC. Not owning benchmark components UBS AG, a Swiss bank hurt by the subprime mortgage crisis, and Japanese bank Mitsubishi UFJ Financial Group was beneficial as well. Conversely, our picks in Australia, along with our decision to carry an underweighted exposure to the Australian dollar, detracted from performan ce. For example, underweighting strong-performing mining company and benchmark component BHP Billiton, Ltd. was costly. In the case of Royal Bank of Scotland Group PLC, the stock fell due to the perception that the company overpaid for an acquisition. Two Japanese stocks — automaker Honda Motor Company Ltd. and semiconductor maker Sumco Corp., — further detracted, as did underweighting German electric utility E.ON AG.

This commentary reflects the views of the portfolio management team through the end of the Fund’s period discussed in this report. The team’s statements reflect their own opinions. As such, they are in no way guarantees of future events and are not intended to be used as investment advice or a recommendation regarding any specific security. They are also subject to change at any time as market and other conditions warrant.

International Growth Fund | Annual report

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A look at performance

For the periods ended February 29, 2008

		Average annual returns				Cumulative total returns
		with maximum sales charge (POP)				with maximum sales charge (POP)
	Inception				Since				Since
Class	date	1-year	5-year	10-year	inception	1-year	5-year	10-year	inception
A	6-12-06	–2.29%	—	—	10.83%	–2.29%	—	—	19.39%
B	6-12-06	–2.74	—	—	11.22	–2.74	—	—	20.11
C	6-12-06	1.04	—	—	13.30	1.04	—	—	24.01
I1	6-12-06	3.27	—	—	14.67	3.27	—	—	26.61
R11	6-12-06	2.73	—	—	13.96	2.73	—	—	25.25
11	6-12-06	3.28	—	—	14.70	3.28	—	—	26.66
NAV1	12-27-06	3.34	—	—	3.54	3.34	—	—	4.17

Performance figures assume all distributions are reinvested. Public offering price (POP) figures reflect maximum sales charge on Class A shares of 5%, and the applicable contingent deferred sales charge (CDSC) on Class B and Class C shares. The Class B shares’ CDSC declines annually between years 1 to 6 according to the following schedule:5, 4, 3, 3, 2, 1%. No sales charge will be assessed after the sixth year. Class C shares held for less than one year are subject to a 1% CDSC. Sales charge is not applicable for Class I, Class R1, Class 1 and Class NAV shares.

The expense ratios of the Fund, both net (including any fee waivers or expense limitations) and gross (excluding any fee waivers or expense limitations), are set forth according to the most recent publicly available prospectuses for the Fund and may differ from the expense ratios disclosed in the Financial Highlights tables in this report. The waivers and expense limitations are contractual at least until 06-30-08. The net expenses are as follows:Class A — 1.66%, Class B — 2.39%, Class C — 2.39%, Class I — 1.19%, Class R1 — 1.94%, Class 1 — 1.15%, Class NAV — 1.10% . Had the fee waivers and expense limitations not been in place, the gross expenses would be as follows:Class A — 2.28%, Class B — 10.94%, Class C — 6.71%, Class I
51; 17.20%, Class R1 — 20.78%, Class 1 — 2.00%, Class NAV — 2.75% .

The returns reflect past results and should not be considered indicative of future performance. The return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, the Fund’s current performance may be higher or lower than the performance shown. For performance data current to the most recent month end, please call 1-800-225-5291 or visit the Fund’s Web site at www.jhfunds.com.

The performance table above and the chart on the next page do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

The Fund’s performance results reflect any applicable expense reductions, without which the expenses increase and results would have been less favorable.

Performance is calculated with an opening price (prior day’s close) on the inception date.

¹ For certain types of investors as described in the Fund’s Class I, Class R1, Class 1 and Class NAV share prospectuses.

Annual report | International Growth Fund

7

A look at performance

Growth of $10,000

This chart shows what happened to a hypothetical $10,000 investment in International Growth Fund Class A shares for the period indicated. For comparison, we’ve shown the same investment in two separate indexes.

 

		Without	With maximum
Class	Period beginning	sales charge	sales charge	Index 1	Index 2
B	6-12-06	$12,411	$12,011	$12,273	$12,254
C2	6-12-06	12,401	12,401	12,273	12,254
I3	6-12-06	12,661	12,661	12,273	12,254
R13	6-12-06	12,525	12,525	12,273	12,254
13	6-12-06	12,666	12,666	12,273	12,254
NAV3	12-27-06	10,417	10,417	10,256	10,485

Assuming all distributions were reinvested for the period indicated, the table above shows the value of a $10,000 investment in the Fund’s Class B, Class C, Class I, Class R1, Class 1 and Class NAV shares, respectively, as of February 29, 2008. Performance of the classes will vary based on the difference in sales charges paid by shareholders investing in the different classes and the fee structure of those classes.

S&P/Citigroup Primary Market Index (PMI) Europe, Pacific, Asia Composite (EPAC) Growth Style Index — Index 1 — is an independently maintained and published index composed of stocks in the EPAC regions of the PMI that have a growth style. The PMI is the large-capitalization stock component of the S&P/Citigroup Broad Market Index (BMI) (which includes listed shares of companies from developed and emerging market countries with a total available market capitalization of at least the local equivalent of USD100 million), representing the top 80% of available capital of the BMI in each country.

MSCI EAFE (Europe, Australasia, Far East) Net Total Return Index — Index 2 — is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the U.S. and Canada. As of June 2006, the MSCI EAFE Index consisted of the following 21 developed market country indexes: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland and United Kingdom. Returns are calculated and presented net of withholding tax.

It is not possible to invest directly in an index. Index figures do not reflect sales charges, which would have resulted in lower values if they did.

¹ NAV represents net asset value and POP represents public offering price.

² No contingent deferred sales charge applicable.

³ For certain types of investors as described in the Fund’s Class I, Class R1, Class 1 and Class NAV share prospectuses.

International Growth Fund | Annual report

8

Your expenses

These examples are intended to help you understand your ongoing operating expenses.

Understanding fund expenses

As a shareholder of the Fund, you incur two types of costs:

■ Transaction costs which include sales charges (loads) on purchases or redemptions (varies by share class), minimum account fee charge, etc.

■ Ongoing operating expenses including management fees, distribution and service fees (if applicable), and other fund expenses.

We are going to present only your ongoing operating expenses here.

Actual expenses/actual returns

This example is intended to provide information about your fund’s actual ongoing operating expenses, and is based on your fund’s actual return. It assumes an account value of $1,000.00 on September 1, 2007, with the same investment held until February 29, 2008.

	Account value	Ending value	Expenses paid during
	on 9-1-07	on 2-29-08	period on 2-29-081
Class A	$1,000.00	$965.96	$7.48
Class B	1,000.00	962.00	11.76
Class C	1,000.00	961.59	11.71
Class I	1,000.00	967.70	5.87
Class R1	1,000.00	966.60	7.14
Class 1	1,000.00	967.82	5.63
Class NAV	1,000.00	968.22	5.38

Together with the value of your account, you may use this information to estimate the operating expenses that you paid over the period. Simply divide your account value at February 29, 2008, by $1,000.00, then multiply it by the “expenses paid” for your share class from the table above. For example, for an account value of $8,600.00, the operating expenses should be calculated as follows:

Annual report | International Growth Fund

9

Your expenses

Hypothetical example for comparison purposes

This table allows you to compare your fund’s ongoing operating expenses with those of any other fund. It provides an example of the Fund’s hypothetical account values and hypothetical expenses based on each class’s actual expense ratio and an assumed 5% annualized return before expenses (which is not your fund’s actual return). It assumes an account value of $1,000.00 on September 1, 2007, with the same investment held until February 29, 2008. Look in any other fund shareholder report to find its hypothetical example and you will be able to compare these expenses.

	Account value	Ending value	Expenses paid during
	on 9-1-07	on 2-29-08	period on 2-29-081
Class A	$1,000.00	$1,017.26	$7.67
Class B	1,000.00	1,012.88	12.06
Class C	1,000.00	1,012.93	12.01
Class I	1,000.00	1,018.90	6.02
Class R1	1,000.00	1,017.60	7.32
Class 1	1,000.00	1,019.14	5.77
Class NAV	1,000.00	1,019.39	5.52

Remember, these examples do not include any transaction costs, such as sales charges; therefore, these examples will not help you to determine the relative total costs of owning different funds. If transaction costs were included, your expenses would have been higher. See the prospectus for details regarding transaction costs.

¹ Expenses are equal to the Fund’s annualized expense ratio of 1.53%, 2.41%, 2.40%, 1.20%, 1.46%, 1.15% and 1.10% for Class A, Class B, Class C, Class I, Class R1, Class 1 and Class NAV, respectively, multiplied by the average account value over the period, multiplied by the number of days in most recent fiscal half year 366 (to reflect the one-half year period).

International Growth Fund | Annual report

10

Portfolio summary

Top 10 holdings1
Nokia AB Oyj	4.6%	BHP Billiton PLC	2.1%
Telelfonica SA	3.0%	Sanofi-Aventis SA	1.9%
Rio Tinto PLC	2.6%	Potash Corp. of Saskatchewan, Inc.	1.7%
Nestle SA	2.4%	Nintendo Company, Ltd.	1.7%
Vodafone Group PLC	2.2%	Roche Holdings AG-Genusschein	1.7%
Sector distribution1
Consumer non-cyclical	23%	Financial	9%
Industrial	14%	Energy	9%
Communications	13%	Technology	4%
Basic materials	13%	Utilities	3%
Consumer cyclical	10%	Other	2%

¹ As a percentage of net assets on February 29, 2008.

Annual report | International Growth Fund

11

F I N A N C I A L  S T A T E M E N T S

Fund’s investments

Securities owned by the Fund on 2-29-08

This schedule is divided into three main categories: common stocks, preferred stocks and repurchase agreements. Common stocks and preferred stocks are further broken down by country. Repurchase agreements, which represent the Fund’s cash position, are listed last.

Issuer	Shares	Value
Common stocks 97.49%		$39,956,295
(Cost $39,670,231)
Australia 6.67%		2,731,854
AMP, Ltd.	7,540	55,665
Australia and New Zealand Banking Group, Ltd.	3,551	71,657
Australian Stock Exchange, Ltd.	3,499	134,528
Babcock & Brown, Ltd.	2,148	33,648
BHP Billiton, Ltd.	9,065	327,997
Bluescope Steel, Ltd.	4,422	44,234
Brambles, Ltd.	6,714	64,474
CSL, Ltd.	8,823	295,918
CSR, Ltd.	17,494	54,504
Foster’s Group, Ltd.	16,592	81,747
Incitec Pivot, Ltd.	381	51,748
Leighton Holdings, Ltd.	923	38,693
Macquarie Group, Ltd.	2,346	117,160
Newcrest Mining, Ltd.	4,321	150,226
NRMA Insurance Group, Ltd.	5,363	18,619
QBE Insurance Group, Ltd.	3,164	65,443
Rio Tinto, Ltd.	502	62,551
St. George Bank, Ltd.	1,640	35,812
Suncorp-Metway, Ltd.	2,771	35,547
TABCORP Holdings, Ltd.	3,284	46,295
Telstra Corp., Ltd.	16,165	72,668
Toll Holdings, Ltd.	6,198	58,465
Wesfarmers, Ltd.	1,845	63,924
Westpac Banking Corp., Ltd.	5,868	125,509
Woodside Petroleum, Ltd.	5,907	308,886
Woolworths, Ltd.	6,913	184,626
WorleyParsons, Ltd.	2,954	101,116
Zinifex, Ltd.	3,001	30,194
Austria 0.30%		121,222
Immofinanz Immobilien Anlage AG	4,969	53,906
OMV AG	528	38,150
Voestalpine AG	464	29,166

See notes to financial statements

International Growth Fund | Annual report

12

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
Belgium 0.47%		$191,903
Belgacom SA	843	40,373
Colruyt SA	163	39,829
Dexia	1,027	24,145
Fortis Group SA	2,469	54,546
Interbrew	250	22,595
Umicore	205	10,415
Bermuda 0.15%		60,890
Frontline, Ltd.	1,335	60,890
Canada 5.56%		2,278,385
Canadian Imperial Bank of Commerce	800	54,287
Canadian National Railway Company	1,500	79,324
Canadian Natural Resources, Ltd.	1,300	97,422
Canadian Pacific Railway, Ltd.	600	43,611
EnCana Corp.	1,500	114,346
Goldcorp, Inc.	1,100	47,487
Husky Energy, Inc.	1,000	42,367
IGM Financial, Inc.	900	39,182
Penn West Energy Trust	1,500	42,337
Potash Corp. of Saskatchewan, Inc.	4,400	699,530
Research In Motion, Ltd. *	6,500	677,110
Royal Bank of Canada	2,600	130,469
Shoppers Drug Mart Corp.	1,100	56,227
Suncor Energy, Inc.	1,500	154,686
Denmark 2.66%		1,092,244
A P Moller Maersk AS, Series A	10	103,218
A P Moller Maersk AS	13	133,586
Carlsberg AS, B Shares	375	46,608
H. Lundbeck AS	2,600	62,087
Novo Nordisk AS	6,864	469,555
Rockwool International AS, B Shares	322	56,158
Sydbank AS	1,344	48,690
Vestas Wind Systems AS *	1,700	172,342
Finland 6.84%		2,805,060
Elisa Oyj, A Shares	701	21,366
Fortum Corp. Oyj	3,221	134,485
Kone Corp. Oyj	2,028	70,960
Metra Oyj, B Shares	646	44,158
Metso Oyj	1,069	55,618
Neste Oil Oyj	1,290	45,136
Nokia AB Oyj	52,237	1,876,749
Nokian Renkaat Oyj	4,470	183,776
Outotec Oyj	2,247	124,103
Rautaruukki Oyj	3,269	142,530
YIT Oyj	4,274	106,179

See notes to financial statements

Annual report | International Growth Fund

13

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
France 7.37%		$3,019,943
Alstom	849	178,425
BNP Paribas SA	529	47,293
Bouygues SA	1,111	75,881
Carrefour SA	902	63,434
Credit Agricole SA	3,060	83,002
Dassault Systemes SA	740	40,350
Electricite de France	1,328	123,862
Essilor International SA	1,210	71,847
Groupe DANONE	2,598	203,512
Hermes International SA	1,008	117,970
L’Oreal SA	1,539	182,636
LVMH Moet Hennessy SA	470	48,289
Neopost SA	406	42,142
PSA Peugeot Citroen SA	555	42,191
Sanofi-Aventis SA	10,528	778,152
Societe Generale NV – New Shares *	90	9,890
Societe Generale	361	38,627
Total SA	9,193	692,270
Veolia Environnement SA	1,504	133,816
Wendel, ADR	411	46,354
Germany 7.45%		3,053,432
Adidas-Salomon AG	1,802	114,348
Allianz AG	329	56,960
BASF AG	2,486	316,317
Bayer AG	499	38,425
Bilfinger Berger AG	738	58,658
Deutsche Bank AG	1,528	170,645
Deutsche Boerse AG	1,803	285,785
E.ON AG	956	179,673
K&S AG	412	119,881
MAN AG	757	99,644
Muenchener Rueckversicherungs – Gesellschaft AG	939	165,487
Premiere AG *	489	10,442
Puma AG	115	41,018
Q-Cells AG *	932	74,883
Salzgitter AG	1,082	190,926
SAP AG	8,244	394,438
SGL Carbon AG *	819	45,837
Siemens AG	4,252	547,488
Solarworld AG	1,515	68,704
Volkswagen AG	325	73,873
Greece 0.33%		135,398
Bank of Piraeus SA	935	27,830
Coca Cola Hellenic Bottling Company SA	991	43,372

See notes to financial statements

International Growth Fund | Annual report

14

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
Greece (continued)
Greek Organization of Football Prognostics	1,182	$38,668
Hellenic Telecommunications Organization SA	919	25,528
Hong Kong 1.50%		616,273
BOC Hong Kong Holdings, Ltd.	10,000	24,531
CLP Holdings, Ltd.	7,000	54,720
Esprit Holdings, Ltd.	11,600	144,759
Hang Seng Bank, Ltd.	3,500	66,337
Hong Kong & China Gas Company, Ltd.	35,000	101,035
Hong Kong Electric Holdings, Ltd.	17,000	95,625
Hong Kong Exchange & Clearing, Ltd.	4,500	85,543
Li & Fung, Ltd.	12,000	43,723
Ireland 0.69%		282,434
Allied Irish Banks PLC	2,426	49,110
Anglo Irish Bank Corp. PLC	6,507	92,157
Bank of Ireland	5,055	71,110
CRH PLC	1,885	70,057
Italy 0.83%		339,084
A2A SpA	2,952	11,942
Eni SpA	7,860	271,415
Saipem SpA	1,364	55,727
Japan 16.74%		6,859,521
Astellas Pharmaceuticals, Inc.	2,500	109,264
Canon, Inc.	8,800	394,462
Central Japan Railway Company, Ltd.	5	47,613
Daikin Industries, Ltd.	2,600	116,993
Denso Corp.	1,700	63,464
East Japan Railway Company	6	48,158
Eisai Company, Ltd.	1,600	57,703
Fanuc, Ltd.	1,200	111,875
Fast Retailing Company, Ltd.	600	44,323
Honda Motor Company, Ltd.	7,700	235,045
Hoya Corp.	5,400	137,014
Ibiden Company, Ltd.	1,600	76,401
Isuzu Motors, Ltd.	9,000	40,984
Japan Tobacco, Inc.	12	60,617
JFE Holdings, Inc.	1,700	75,748
Kao Corp.	3,000	92,363
Kawasaki Kisen Kaisha, Ltd.	13,000	131,872
Keyence Corp.	600	139,999
Komatsu, Ltd.	12,300	312,475
Konica Minolta Holdings, Inc.	3,500	49,585
Marubeni Corp.	8,000	60,569
Matsushita Electric Industrial Company, Ltd.	3,000	63,184
Mitsubishi Corp.	7,700	234,931

See notes to financial statements

Annual report | International Growth Fund

15

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
Japan (continued)
Mitsubishi Estate Company, Ltd.	3,000	$73,112
Mitsubishi Gas & Chemicals Company, Inc.	4,000	29,663
Mitsui & Company, Ltd.	7,000	152,232
Mitsui Fudosan Company, Ltd.	2,000	40,608
Mitsui O.S.K. Lines, Ltd.	17,000	220,794
Mitsui Trust Holdings, Inc.	11,000	75,828
Mizuho Financial Group, Inc.	13	53,756
Murata Manufacturing Company, Ltd.	800	43,406
NGK INSULATORS, LTD.	2,000	45,416
Nikon Corp.	4,000	112,040
Nintendo Company, Ltd.	1,400	697,053
Nippon Mining Holdings, Inc.	7,000	41,460
Nippon Oil Corp.	14,000	95,504
Nippon Steel Corp.	17,000	89,440
Nippon Yusen Kabushiki Kaisha	21,000	194,049
NTT DoCoMo, Inc.	38	55,673
Olympus Optical Company, Ltd.	2,000	58,563
Osaka Gas Company, Ltd.	3,000	12,037
Resona Holdings, Inc.	39	63,083
Rohm Company, Ltd.	500	36,468
SBI Holdings, Inc.	56	13,715
Secom Company, Ltd.	800	40,343
SEGA SAMMY HOLDINGS, INC.	3,000	33,099
Seven & I Holdings Company, Ltd.	8,600	213,841
Shimamura Company, Ltd.	500	36,255
Shin-Etsu Chemical Company, Ltd.	5,200	280,625
Shiseido Company, Ltd.	2,000	45,578
Sony Corp.	1,900	89,762
Sumco Corp.	2,900	64,130
Sumitomo Metal Industries, Ltd.	16,000	67,777
Sumitomo Mitsui Financial Group, Inc.	8	57,784
Takeda Pharmaceutical Company, Ltd.	7,700	429,652
TDK Corp.	1,000	71,083
Terumo Corp.	2,300	124,884
The Japan Steel Works, Ltd.	4,000	65,003
Tokyo Electron, Ltd.	900	55,784
Toyota Tsusho Corp.	1,000	25,386
Trend Micro, Inc.	1,500	51,676
Yahoo Japan Corp.	330	146,719
Yamada Denki Company, Ltd.	590	51,598
Netherlands 2.56%		1,047,677
DSM NV	377	16,591
Fugro NV – CVA	1,192	89,928
Heineken NV	4,795	270,440

See notes to financial statements

International Growth Fund | Annual report

16

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
Netherlands (continued)
Koninklijke (Royal) KPN NV	7,307	$137,942
Koninklijke Boskalis Westinster NV	874	48,257
Reed Elsevier NV	3,920	72,826
TNT Post Group NV	1,112	43,793
TomTom NV *	1,079	50,565
Unilever NV	9,059	280,116
Wolters Kluwer NV	1,439	37,219
Norway 0.69%		284,412
Renewable Energy Corp ASA *	2,403	58,772
Statoil ASA	6,350	193,493
Tandberg ASA	2,200	32,147
Portugal 0.13%		53,365
Portugal Telecom, SGPS, SA	4,181	53,365
Singapore 1.48%		608,271
Capitaland, Ltd. *	7,000	30,926
Cosco Corp. Singapore, Ltd.	7,000	19,859
Keppel Corp., Ltd.	5,000	37,676
Keppel Land, Ltd.	12,000	49,857
SembCorp Industries, Ltd.	20,000	67,247
SembCorp Marine, Ltd.	44,000	112,684
Singapore Airlines, Ltd.	1,800	19,525
Singapore Press Holdings, Ltd.	13,000	40,509
Singapore Telecommunications, Ltd.	85,000	229,988
Spain 3.97%		1,628,782
Abertis Infraestructuras SA	805	25,404
ACS Actividades SA	1,040	53,117
Bolsas y Mercados Espanoles	791	39,564
Gas Natural SDG SA	2,160	130,882
Industria de Diseno Textil SA	2,341	120,687
Repsol YPF SA	1,048	36,152
Telefonica SA	42,264	1,222,976
Sweden 1.99%		816,961
Alfa Laval AB	1,075	57,726
Hennes & Mauritz AB, B shares	4,185	234,729
Investor AB, B shares	1,200	25,383
Sandvik AB *	11,100	187,168
Scania AB, Series B *	2,300	55,488
SSAB Svenskt Stal AB, Series A	2,300	64,400
Tele2 AB, Series B	900	15,819
Volvo AB, Series A *	6,200	91,625
Volvo AB, Series B *	5,700	84,623

See notes to financial statements

Annual report | International Growth Fund

17

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
Switzerland 8.99%		$3,684,206
ABB, Ltd.	19,430	484,085
Actelion, Ltd. *	1,416	73,811
Compagnie Financiere Richemont AG, Series A *	2,871	166,198
Geberit AG, ADR	329	48,403
Nestle SA	2,051	978,918
Nobel Biocare Holding AG, Series BR	215	51,996
Novartis AG	13,487	666,161
Phonak Holding AG	294	27,861
Roche Holdings AG - Genusschein	3,550	696,185
Societe Generale de Surveillance Holdings AG	34	45,666
Swatch Group AG, BR shares	333	97,744
Swisscom AG	127	48,303
Syngenta AG *	164	47,151
Synthes AG	414	58,019
UBS AG	1,357	44,277
Zurich Financial Services AG	478	149,428
United Kingdom 20.12%		8,244,978
3i Group PLC	11,844	191,420
Antofagasta PLC	7,289	116,174
AstraZeneca Group PLC	9,117	340,769
Aviva PLC	4,149	50,010
Barclays PLC	11,957	112,065
BG Group PLC	29,189	688,014
BHP Billiton PLC	26,428	845,435
British American Tobacco PLC	6,040	226,480
British Sky Broadcasting Group PLC	4,325	48,529
BT Group PLC	8,155	36,700
Burberry Group PLC	4,055	33,673
Capita Group PLC *	3,133	40,595
Centrica PLC	8,793	56,141
Diageo PLC	13,188	269,495
EMAP PLC	2,230	40,711
Enterprise Inns PLC	8,229	67,561
GlaxoSmithKline PLC	29,223	637,897
HBOS PLC	4,270	50,740
Imperial Tobacco Group PLC	4,629	214,287
Kazakhmys PLC	1,688	51,418
Marks & Spencer Group PLC	8,669	68,718
Michael Page International PLC	6,669	36,903
National Grid PLC	4,027	58,391
Next Group PLC	2,458	62,339
Old Mutual PLC	10,248	25,313
Reckitt Benckiser PLC	5,424	292,577
Reed Elsevier PLC *	7,769	97,780
Reuters Group PLC	12,675	149,692

See notes to financial statements

International Growth Fund | Annual report

18

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
United Kingdom (continued)
Rio Tinto PLC	9,515	$1,070,508
Royal Bank of Scotland Group PLC	22,363	169,076
Royal Dutch Shell PLC, A Shares, GBP	7,372	263,596
Royal Dutch Shell PLC, B Shares, GBP	1,022	35,854
SABMiller PLC	5,893	122,431
Scottish & Southern Energy PLC	3,084	90,178
Smith & Nephew PLC	11,398	148,096
Tesco PLC	8,035	63,496
Travis Perkins PLC	2,014	43,054
Tullow Oil PLC	5,468	67,783
Unilever PLC	4,455	140,360
Vedanta Resources PLC	3,030	130,354
Vodafone Group PLC	277,364	892,963
William Hill PLC	5,045	37,523
William Morrison Supermarket PLC	3,973	23,290
Wolseley PLC	2,990	36,589
Preferred stocks 0.55%		$225,456
(Cost $174,466)
Germany 0.55%		225,456
Porsche Automobile Holding SE	92	157,687
Volkswagen AG	487	67,769
	Principal
Issuer, description, maturity date	amount	Value
Repurchase agreements 1.53%		$628,000
(Cost $628,000)
Repurchase Agreement with State Street Corp. dated 2-29-08
at 2.35% to be repurchased at $628,123 on 3-3-08,
collateralized by $650,000 Federal National Mortgage Association,
5.57%, due 7-14-28 (valued at $642,688, including interest)	$628,000	628,000
Total investments (Cost $40,472,697)† 99.57%		$40,809,751
Other assets in excess of liabilities 0.43%		$177,225
Total net assets 100.00%		$40,986,976

Percentages are stated as a percent of net assets.

The portfolio had the following five top industry concentrations as of February 29, 2008 (as a percentage of total net assets):

Telecommunications equipment & services	11.41%
Pharmaceuticals	7.95%
Mining	6.53%
International oil	4.27%
Drugs & health care	4.01%

ADR American Depositary Receipt

* Non-income producing.

† At February 29, 2008, the aggregate cost of investment securities for federal income tax purposes was $40,796,688. Net unrealized appreciation aggregated $13,063, of which $2,879,295 related to appreciated investment securities and $2,866,232 related to depreciated investment securities.

See notes to financial statements

Annual report | International Growth Fund

19

F I N A N C I A L  S T A T E M E N T S

Financial statements

Statement of assets and liabilities 2-29-08

This Statement of Assets and Liabilities is the Fund’s balance sheet. It shows the value of what the Fund owns, is due and owes. You’ll also find the net asset value and the maximum public offering price per share.

Assets
Investments in unaffiliated issuers, at value (cost $39,844,697)	$40,181,751
Repurchase agreement, at value (cost $628,000) (Note 2)	628,000
Total investments, at value (cost $40,472,697)	40,809,751
Cash	675
Foreign currency, at value (cost $184,313)	187,938
Cash collateral at broker for futures contracts	700,000
Receivable for forward foreign currency exchange contracts (Note 2)	348,228
Receivable for fund shares sold	16,705
Dividends and interest receivable (net of tax)	90,598
Receivable due from adviser	18,795
Other assets	152
Total assets	42,172,842
Liabilities
Payable for investments purchased	6,494
Payable for forward foreign currency exchange contracts (Note 2)	209,487
Payable for fund shares repurchased	871,645
Payable for futures variation margin	9,682
Payable to affiliates
Fund administration fees	687
Transfer agent fees	5,356
Distribution and service fees	200
Trustees’ fees	120
Other payables and accrued expenses	82,195
Total liabilities	1,185,866
Net assets
Capital paid-in	$41,320,420
Undistributed net investment income	312,354
Accumulated undistributed net realized gain (loss) on investments,
futures contracts and foreign currency transactions	(889,199)
Net unrealized appreciation (depreciation) on investments, futures
contracts and translation of assets and liabilities in foreign currencies	243,401
Net assets	$40,986,976

See notes to financial statements

International Growth Fund | Annual report

20

F I N A N C I A L  S T A T E M E N T S

Statement of assets and liabilities (continued)

Net asset value per share
The Funds have an unlimited number of shares authorized with no par
value. Net asset value is calculated by dividing the net assets of each class
of shares by the number of outstanding shares in the class.
Class A
Net assets	$26,320,300
Shares outstanding	1,151,456
Net asset value and redemption price per share	$22.86
Class B1
Net assets	$1,185,119
Shares outstanding	51,958
Net asset value and offering price per share	$22.81
Class C1
Net assets	$2,359,751
Shares outstanding	103,527
Net asset value and offering price per share	$22.79
Class I
Net assets	$593,338
Shares outstanding	25,911
Net asset value, offering price and redemption price per share	$22.90
Class R1
Net assets	$136,725
Shares outstanding	5,995
Net asset value, offering price and redemption price per share	$22.81
Class 1
Net assets	$2,815,968
Shares outstanding	123,028
Net asset value, offering price and redemption price per share	$22.89
Class NAV
Net assets	$7,575,775
Shares outstanding	331,666
Net asset value, offering price and redemption price per share	$22.84
Maximum public offering price per share
Class A (net asset value per share ÷ 95%)2	$24.06

¹ Redemption price per share is equal to the net asset value less any applicable contingent deferred sales charge.

² On single retail sales of less than $50,000. On sales of $50,000 or more and on group sales the offering price is reduced.

See notes to financial statements

Annual report | International Growth Fund

21

F I N A N C I A L  S T A T E M E N T S

Statement of operations For the year ended 2-29-08

This 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.

Investment income
Dividends	$933,118
Interest	64,554
Less foreign taxes withheld	(78,054)
Total investment income	919,618
Expenses
Investment management fees (Note 3)	332,899
Distribution and service fees (Note 3)	106,660
Transfer agent fees (Note 3)	26,645
Fund administration fees (Note 3)	14,164
Blue sky fees (Note 3)	78,839
Audit and legal fees	72,646
Printing and postage fees (Note 3)	7,661
Custodian fees	180,687
Trustees’ fees (Note 3)	2,279
Registration and filing fees	28,912
Miscellaneous	815
Total expenses	852,207
Less expense reductions (Note 3)	(297,427)
Net expenses	554,780
Net investment income	364,838
Realized and unrealized gain (loss)
Net realized gain (loss) on
Investments in unaffiliated issuers	1,521,735
Futures contracts	11,550
Foreign currency transactions	245,539
	1,778,824
Change in net unrealized appreciation (depreciation) of
Investments in unaffiliated issuers	(2,373,515)
Futures contracts	(215,598)
Translation of assets and liabilities in foreign currencies	135,985
	(2,453,128)
Net realized and unrealized gain (loss)	(674,304)
Increase (decrease) in net assets from operations	($309,466)

See notes to financial statements

International Growth Fund | Annual report

22

F I N A N C I A L  S T A T E M E N T S

Statement of changes in net assets

These Statements of Changes in Net Assets show how the value of the Fund’s net assets has changed during the last two periods. The difference reflects earnings less expenses, any investment gains and losses, distributions, if any, paid to shareholders and the net of Fund share transactions.

	Period	Year
	ended	ended
	2-28-071	2-29-08
Increase (decrease) in net assets
From operations
Net investment income (loss)	($12,185)	$364,838
Net realized gain (loss)	803,556	1,778,824
Change in net unrealized appreciation (depreciation)	2,696,529	(2,453,128)
Increase (decrease) in net assets resulting from operations	3,487,900	(309,466)
Distributions to shareholders
From net investment income
Class A	(70,554)	(202,592)
Class B	(221)	—
Class C	(267)	—
Class I	(805)	(5,357)
Class R1	(455)	(830)
Class 1	(786)	(26,034)
Class NAV	—	(90,102)
From net realized gain
Class A	(308,669)	(1,859,952)
Class B	(5,885)	(90,466)
Class C	(7,134)	(159,205)
Class I	(2,205)	(32,275)
Class R1	(1,991)	(9,214)
Class 1	(2,075)	(149,968)
Class NAV	—	(497,276)
Total distributions	(401,047)	(3,123,271)
From Fund share transactions (Note 6)	20,460,257	20,872,603
Total increase (decrease)	23,547,110	17,439,866
Net assets
Beginning of year	—	23,547,110
End of year	$23,547,110	$40,986,976
Undistributed net investment income (loss)	($28,697)	$312,354

¹ Period from 6-12-06 (commencement of operations) to 2-28-07.

See notes to financial statements

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23

F I N A N C I A L  S T A T E M E N T S

Financial highlights

The Financial Highlights show how the Fund’s net asset value for a share has changed since the end of the previous period.

CLASS A SHARES
Period ended	2-28-071	2-29-08
Per share operating performance
Net asset value, beginning of period	$20.00	$23.94
Net investment income (loss)2	(0.01)	0.26
Net realized and unrealized
gain (loss) on investments	4.44	0.53
Total from investment operations	4.43	0.79
Less distributions
From net investment income	(0.09)	(0.18)
From net realized gain	(0.40)	(1.69)
	(0.49)	(1.87)
Net asset value, end of period	$23.94	$22.86
Total return3,4 (%)	22.185	2.85
Ratios and supplemental data
Net assets, end of period (in millions)	$20	$26
Ratios (as a percentage of average net assets):
Expenses before reductions	2.286	2.21
Expenses net of fee waivers, if any	1.666	1.56
Expenses net of all fee waivers and credits	1.666	1.56
Net investment income (loss)	(0.06)6	1.02
Portfolio turnover (%)	415	97

¹ Class A shares began operations on 6-12-06.

² Based on the average of the shares outstanding.

³ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁴ Assumes dividend reinvestment.

⁵ Not annualized.

⁶ Annualized.

See notes to financial statements

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F I N A N C I A L  S T A T E M E N T S

Financial highlights

CLASS B SHARES
Period ended	2-28-071	2-29-08
Per share operating performance
Net asset value, beginning of period	$20.00	$23.91
Net investment income (loss)2	(0.16)	(0.01)
Net realized and unrealized
gain (loss) on investments	4.48	0.60
Total from investment operations	4.32	0.59
Less distributions
From net investment income	(0.01)	—
From net realized gain	(0.40)	(1.69)
	(0.41)	(1.69)
Net asset value, end of period	$23.91	$22.81
Total return3,4 (%)	21.645	2.03
Ratios and supplemental data
Net assets, end of period (in millions)	$1	$1
Ratios (as a percentage of average net assets):
Expenses before reductions	10.946	4.62
Expenses net of fee waivers, if any	2.396	2.41
Expenses net of all fee waivers and credits	2.396	2.40
Net investment income (loss)	(0.94)6	(0.03)
Portfolio turnover (%)	415	97

¹ Class B shares began operations on 6-12-06.

² Based on the average of the shares outstanding.

³ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁴ Assumes dividend reinvestment.

⁵ Not annualized.

⁶ Annualized.

See notes to financial statements

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F I N A N C I A L  S T A T E M E N T S

Financial highlights

CLASS C SHARES
Period ended	2-28-071	2-29-08
Per share operating performance
Net asset value, beginning of period	$20.00	$23.90
Net investment income (loss)2	(0.16)	0.05
Net realized and unrealized
gain (loss) on investments	4.47	0.53
Total from investment operations	4.31	0.58
Less distributions
From net investment income	(0.01)	—
From net realized gain	(0.40)	(1.69)
	(0.41)	(1.69)
Net asset value, end of period	$23.90	$22.79
Total return3,4 (%)	21.595	1.99
Ratios and supplemental data
Net assets, end of period (in millions)	$2	$2
Ratios (as a percentage of average net assets):
Expenses before reductions	6.716	3.73
Expenses net of fee waivers, if any	2.396	2.40
Expenses net of all fee waivers and credits	2.396	2.40
Net investment income (loss)	(0.98)6	0.21
Portfolio turnover (%)	415	97

¹ Class C shares began operations on 6-12-06.

² Based on the average of the shares outstanding.

³ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁴ Assumes dividend reinvestment.

⁵ Not annualized.

⁶ Annualized.

See notes to financial statements

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F I N A N C I A L  S T A T E M E N T S

Financial highlights

CLASS I SHARES
Period ended	2-28-071	2-29-08
Per share operating performance
Net asset value, beginning of period	$20.00	$23.97
Net investment income (loss)2	0.07	0.36
Net realized and unrealized
gain (loss) on investments	4.45	0.54
Total from investment operations	4.52	0.90
Less distributions
From net investment income	(0.15)	(0.28)
From net realized gain	(0.40)	(1.69)
	(0.55)	(1.97)
Net asset value, end of period	$23.97	$22.90
Total return3,4 (%)	22.605	3.27
Ratios and supplemental data
Net assets, end of period (in millions)	— 6	$1
Ratios (as a percentage of average net assets):
Expenses before reductions	17.207	5.07
Expenses net of fee waivers, if any	1.197	1.20
Expenses net of all fee waivers and credits	1.197	1.20
Net investment income (loss)	0.427	1.43
Portfolio turnover (%)	415	97

¹ Class I shares began operations on 6-12-06.

² Based on the average of the shares outstanding.

³ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁴ Assumes dividend reinvestment.

⁵ Not annualized.

⁶ Less than $500,000.

⁷ Annualized.

See notes to financial statements

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F I N A N C I A L  S T A T E M E N T S

Financial highlights

CLASS R1 SHARES
Period ended	2-28-071	2-29-08
Per share operating performance
Net asset value, beginning of period	$20.00	$23.89
Net investment income (loss)2	(0.05)	0.25
Net realized and unrealized
gain (loss) on investments	4.43	0.51
Total from investment operations	4.38	0.76
Less distributions
From net investment income	(0.09)	(0.15)
From net realized gain	(0.40)	(1.69)
	(0.49)	(1.84)
Net asset value, end of period	$23.89	$22.81
Total return3,4 (%)	21.925	2.73
Ratios and supplemental data
Net assets, end of period (in millions)	—6	—6
Ratios (as a percentage of average net assets):
Expenses before reductions	20.787	14.42
Expenses net of fee waivers, if any	1.947	1.70
Expenses net of all fee waivers and credits	1.947	1.70
Net investment income (loss)	(0.32)7	1.00
Portfolio turnover (%)	415	97

¹ Class R1 shares began operations on 6-12-06.

² Based on the average of the shares outstanding.

³ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁴ Assumes dividend reinvestment.

⁵ Not annualized.

⁶ Less than $500,000.

⁷ Annualized.

See notes to financial statements

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F I N A N C I A L  S T A T E M E N T S

Financial highlights

CLASS 1 SHARES
Period ended	2-28-071	2-29-08
Per share operating performance
Net asset value, beginning of period	$20.00	$23.97
Net investment income (loss)2	0.07	0.29
Net realized and unrealized
gain (loss) on investments	4.45	0.61
Total from investment operations	4.52	0.90
Less distributions
From net investment income	(0.15)	(0.29)
From net realized gain	(0.40)	(1.69)
	(0.55)	(1.98)
Net asset value, end of period	$23.97	$22.89
Total return3,4 (%)	22.635	3.28
Ratios and supplemental data
Net assets, end of period (in millions)	$1	$3
Ratios (as a percentage of average net assets):
Expenses before reductions	2.006	1.83
Expenses net of fee waivers, if any	1.156	1.15
Expenses net of all fee waivers and credits	1.156	1.15
Net investment income (loss)	0.416	1.14
Portfolio turnover (%)	415	97

¹ Class 1 shares began operations on 6-12-06.

² Based on the average of the shares outstanding.

³ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁴ Assumes dividend reinvestment.

⁵ Not annualized.

⁶ Annualized.

See notes to financial statements

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F I N A N C I A L  S T A T E M E N T S

Financial highlights

CLASS NAV SHARES
Period ended	2-28-071	2-29-08
Per share operating performance
Net asset value, beginning of period	$23.73	$23.92
Net investment income (loss)2	0.01	0.33
Net realized and unrealized
gain (loss) on investments	0.18	0.59
Total from investment operations	0.19	0.92
Less distributions
From net investment income	—	(0.31)
From net realized gain	—	(1.69)
	—	(2.00)
Net asset value, end of period	$23.92	$22.84
Total return3,4 (%)	0.805	3.34
Ratios and supplemental data
Net assets, end of period (in millions)	$1	$8
Ratios (as a percentage of average net assets):
Expenses before reductions	2.756	1.77
Expenses net of fee waivers, if any	1.136	1.10
Expenses net of all fee waivers and credits	1.136	1.10
Net investment income (loss)	0.146	1.33
Portfolio turnover (%)	415	97

¹ Class NAV shares began operations on 12-27-06.

² Based on the average of the shares outstanding.

³ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁴ Assumes dividend reinvestment.

⁵ Not annualized.

⁶ Annualized.

See notes to financial statements

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Notes to financial statements

1. Organization

John Hancock International Growth Fund (the Fund) is a diversified series of John Hancock Funds III (the Trust). The Trust was established as a Massachusetts business trust on June 9, 2005. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end investment management company. The investment objective of the Fund is to seek high total return.

John Hancock Life Insurance Company of New York (John Hancock New York) is a wholly owned subsidiary of John Hancock Life Insurance Company (U.S.A.) (John Hancock USA). John Hancock USA and John Hancock New York are indirect wholly owned subsidiaries of The Manufacturers Life Insurance Company (Manulife), which in turn is a wholly owned subsidiary of Manulife Financial Corporation (MFC), a publicly traded company. MFC and its subsidiaries are known collectively as “Manulife Financial.”

John Hancock Investment Management Services, LLC (the Adviser), a Delaware limited liability company controlled by John Hancock USA, serves as investment adviser for the Trust and John Hancock Funds, LLC (the Distributor), a Delaware limited liability company, an affiliate of the Adviser, serves as principal underwriter.

The Board of Trustees have authorized the issuance of multiple classes of shares of the Fund, including classes designated as Class A, Class B, Class C, Class I, Class R1, Class 1 and Class NAV shares. Class A, Class B and Class C shares are open to all retail investors. Class I shares are offered without any sales charge to various institutional and certain individual investors. Class R1 shares are available only to certain retirement plans. Class 1 shares are sold only to certain exempt separate accounts of John Hancock USA and John Hancock New York. Class NAV shares are sold to affiliated funds of funds, which are funds of funds within the John Hancock funds complex. The shares of each class represent an interest in the same portfolio of investments of the Fund, and have equal rights as to voting, redemptions, dividends and liquidation, except that certain expenses, subject to the approval of the Board of Trustees, may be applied differe ntly to each class of shares in accordance with current regulations of the Securities and Exchange Commission (SEC) and the Internal Revenue Service. Shareholders of a class that bear distribution and service expenses under the terms of a distribution plan have exclusive voting rights to that distribution plan. Class B shares will convert to Class A shares eight years after purchase.

The Adviser and other subsidiaries of John Hancock USA owned 4,561 shares of beneficial interest of Class NAV on February 29, 2008.

2. Significant accounting policies

In the preparation of the financial statements, the Fund follows the policies described below. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results may differ from these estimates.

Security valuation

The net asset value of the shares of the Fund is determined daily as of the close of the New York Stock Exchange (NYSE), normally at 4:00 P.M., Eastern Time. Short-term debt investments that have a remaining maturity of 60 days or less are valued at amortized cost,

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and thereafter assume a constant amortization to maturity of any discount or premium, which approximates market value. All other securities held by the Fund are valued at the last sale price or official closing price (closing bid price or last evaluated quote if no sale has occurred) as of the close of business on the principal securities exchange (domestic or foreign) on which they trade or, lacking any sales, at the closing bid price. Securities traded only in the over-the-counter market are valued at the last bid price quoted by brokers making markets in the securities at the close of trading. Securities for which there are no such quotations, principally debt securities, are valued based on the evaluated prices provided by an independent pricing service, which utilizes both dealer-supplied and electronic data processing techniques, which take into account factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity , type of issue, trading characteristics and other market data.

Other assets and securities for which no such quotations are readily available are valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees. Generally, trading in non-U.S. securities is substantially completed each day at various times prior to the close of trading on the NYSE. The values of such securities used in computing the net asset value of a Fund’s shares are generally determined as of such times. Occasionally, significant events that affect the values of such securities may occur between the times at which such values are generally determined and the close of the NYSE. Upon such an occurrence, these securities will be valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees.

In deciding whether to make a fair value adjustment to the price of a security, the Board of Trustees or their designee may review a variety of factors, including developments in foreign markets, the performance of U.S. securities markets and the performance of instruments trading in U.S. markets that represent foreign securities and baskets of foreign securities. The Fund may also fair value securities in other situations, for example, when a particular foreign market is closed, but the Fund is calculating the net asset value. In view of these factors, it is likely that Funds investing significant amounts of assets in securities in foreign markets will be fair valued more frequently than Funds investing signifi-cant amounts of assets in frequently traded, U.S. exchange-listed securities of large-capitalization U.S. issuers.

For purposes of determining when fair value adjustments may be appropriate with respect to Funds that invest in securities in foreign markets that close prior to the NYSE, the Funds will, on an ongoing basis, monitor for “significant market events.” A significant market event may be a certain percentage change in the value of an index or of certain Exchange Traded Funds that track foreign markets in which Funds have significant investments. If a significant market event occurs due to a change in the value of the index or of Exchange Traded Funds, the pricing for the Fund will promptly be reviewed and potential adjustments to the net asset value of the Fund will be recommended to the Trust’s Pricing Committee when applicable.

Fair value pricing of securities is intended to help ensure that the net asset value of the Fund’s shares reflects the value of the Fund’s securities as of the close of the NYSE (as opposed to a value which is no longer accurate as of such close), thus limiting the opportunity for aggressive traders to purchase shares of the Fund at deflated prices, reflecting stale security valuations, and to promptly sell such shares at a gain. However, a security’s valuation may differ depending on the method used for determining value and no assurance can be given that fair value pricing of securities will successfully eliminate all potential opportunities for such trading gains.

New accounting pronouncements

In September 2006, Financial Accounting Standards Board (FASB) Standard No. 157,  Fair Value Measurements (FAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. FAS 157 defines fair value, establishes a framework for measuring

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fair value and expands disclosure about fair value measurements. As of February 29, 2008, management does not believe the adoption of FAS 157 will impact the amounts reported in the financial statements; however, additional disclosures regarding pricing sources will be required about the inputs used to develop the measurements of fair value and the related realized and unrealized gain/loss for certain securities valued by significant unobservable market inputs.

In March 2008, FASB No. 161 (FAS 161),  Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133 (FAS 133), was issued and is effective for fiscal years beginning after November 15, 2008. FAS 161 amends and expands the disclosure requirements of FAS 133 in order to provide financial statement users an understanding of a company’s use of derivative instruments, how derivative instruments are accounted for under FAS 133 and related interpretations and how these instruments affect a company’s financial position, performance, and cash flows. FAS 161 requires companies to disclose information detailing the objectives and strategies for using derivative instruments, the level of derivative activity entered into by the company, and any credit risk-related contingent features of the agreements. Management is currently evaluating the adoption of FAS 1 61 on the Fund’s financial statement disclosures.

Guarantees and indemnifications

Under the Trust’s organizational documents, its Officers and Trustees are indemnified against certain liability arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust that have not yet occurred.

Repurchase agreements

The Fund may enter into repurchase agreements. When the Fund enters into a repurchase agreement through its custodian, it receives delivery of securities, the amount of which at the time of purchase and each subsequent business day is required to be maintained at such a level that the market value is generally at least 102% of the repurchase amount. The Fund will take constructive receipt of all securities underlying the repurchase agreements it has entered into until such agreements expire. If the seller defaults, the Fund would suffer a loss to the extent that proceeds from the sale of underlying securities were less than the repurchase amount. The Fund may enter into repurchase agreements maturing within seven days with domestic dealers, banks or other financial institutions deemed to be creditworthy by the Adviser. Collateral for certain tri-party repurchase agreements is held at the custodian bank in a segregated account for the benefi t of the Fund and the counterparty.

Foreign currency transactions

The books and records of the Fund are maintained in U.S. Dollars. Investment securities and other assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the prevailing exchange rates at period end. Purchases and sales of investment securities, income and expenses are translated into U.S. dollars at the prevailing exchange rates on the respective dates of the transactions.

Net realized and unrealized gains and losses on foreign currency transactions represent net gains and losses between trade and settlement dates on securities transactions, the disposition of forward foreign currency exchange contracts and foreign currencies, and the difference between the amount of net investment income accrued and the U.S. dollar amount actually received. That portion of both realized and unrealized gains and losses on investments that results from fluctuations in foreign currency exchange rates is not separately disclosed but is included with net realized and unrealized gain/appreciation and loss/depreciation on investments.

The Fund may be subject to capital gains and repatriation taxes imposed by certain countries in which it invests. Such taxes are generally based upon income and/or capital gains earned or repatriated. Taxes are accrued based upon net investment income, net realized gains and net unrealized appreciation.

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The Fund may invest in securities of issuers based in countries with emerging markets or economies and may, therefore, be subject to greater market risk than Funds that invest principally in securities of issuers in more developed countries. Emerging markets securities may be more volatile and less liquid than securities of issuers in developed countries and may be subject to substantial currency fluctuations and affected by sudden economic, social and political developments in the emerging market country. The securities markets of emerging countries may have less government regulation and may be subject to less extensive accounting and financial reporting requirements than the securities markets of more developed countries. Emerging market countries may have currency controls or restrictions which may prevent or delay the Fund from taking money out of the country or may impose additional taxes on money removed from the country.

Security transactions and related investment income

Investment security transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment transactions are reported on trade date. Interest income is accrued as earned. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Foreign dividends are recorded on the ex-date or when the Fund becomes aware of the dividends from cash collections. Discounts/premiums are accreted/ amortized for financial reporting purposes. Non-cash dividends are recorded at the fair market value of the securities received. Debt obligations may be placed in a non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful, based upon consistently applied procedures.

From time to time, the Fund may invest in Real Estate Investment Trusts (REITs) and, as a result, will estimate the components of distributions from these securities. Distributions from REITs received in excess of income are recorded as a reduction of cost of investments and/or as a realized gain.

The Fund uses the specific identification method for determining realized gain or loss on investments for both financial statement and federal income tax reporting purposes.

Allocations of income and expenses

All income, expenses (except class-specific expenses), and realized and unrealized gain/ loss are allocated to each class of shares based upon the relative net assets of each class. Dividends to shareholders from net investment income are determined at a class level and distributions from capital gains are determined at a Fund level.

Expenses not directly attributable to the Fund or share classes are allocated based on the relative share of net assets of the Fund or share class at the time the expense was incurred. Class-specific expenses, as detailed in Note 3, are accrued daily and charged directly to the respective share classes.

Futures

The Fund may purchase and sell financial futures contracts and options on those contracts. The Fund invests in contracts based on financial instruments, such as U.S. Treasury Bonds or Notes, or on securities indices such as the Standard & Poor’s 500 Index, in order to hedge against a decline in the value of securities owned by the Fund.

Initial margin deposits required upon entering into futures contracts are satisfied by the delivery of specific securities or cash as collateral to the broker (the Fund’s agent in acquiring the futures position). If the position is closed out by taking an opposite position prior to the settlement date of the futures contract, a final determination of variation margin is made, cash is required to be paid to or released by the broker and the Fund realizes a gain or loss.

When the Fund sells a futures contract based on a financial instrument, the Fund becomes obligated to deliver that kind of instrument at an agreed upon date for a specified price. The Fund realizes a gain or loss depending on whether the price of an offsetting purchase is less or more than the price of the initial sale

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or on whether the price of an offsetting sale is more or less than the price of the initial purchase. The Fund could be exposed to risks if it could not close out futures positions because of an illiquid secondary market or the inability of counterparties to meet the terms of their contracts. Futures contracts are valued at the quoted daily settlement prices established by the exchange on which they trade.

The following is a summary of open futures contracts at February 29, 2008:
							UNREALIZED
	NUMBER OF		EXPIRATION		NOTIONAL		APPRECIATION
OPEN CONTRACTS	CONTRACTS	POSITION	DATE		VALUE		(DEPRECIATION)
DAX Index Futures	6	Long	Mar 2008	$1,012,275		($270,501)
Hang Seng Index Futures	3	Long	Mar 2008	3,631,500		12,998
MSCI Singapore Stock
Index Futures	8	Long	Mar 2008	596,000		(12,099)
S&P MIB Index Futures	1	Short	Mar 2008	168,335		38,729
S&P TSE 60 Index Futures	7	Short	Mar 2008	1,114,540		(8,109)
						($238,982)

Forward foreign currency contracts

The Fund may purchase and sell forward foreign currency contracts in order to hedge a specific transaction or Fund position. Forward foreign currency contracts are valued at forward foreign currency exchange rates and marked to market daily. Net realized gains (losses) on foreign currency and forward foreign currency contracts shown in the Statements of Operations include net gains or losses realized by the Fund on contracts that have matured.

The net U.S. dollar value of foreign currency underlying all contractual commitments held at the end of the period, the resulting net unrealized appreciation (depreciation) and related net receivable or payable amount  are determined using forward foreign currency exchange rates supplied by a quotation service. The Fund could be exposed to risks in excess of amounts recognized on the Statements of Assets and Liabilities if the counterparties to the contracts are unable to meet the terms of their contracts or if the value of the forward foreign currency contract changes unfavorably.

At February 29, 2008, the Fund entered into forward foreign currency contracts, which contractually obligate the Fund to deliver currencies at future dates.

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Open forward foreign currency contracts as of February 29, 2008, were as follows:

			UNREALIZED
	PRINCIPAL AMOUNT	SETTLEMENT	APPRECIATION
CURRENCY	COVERED BY CONTRACT	DATE	(DEPRECIATION)
Buys
Canadian Dollar	61,000	5/23/08	$1,889
Danish Kroner	915,000	5/23/08	6,601
Euro	173,996	5/23/08	7,714
Euro	190,000	5/23/08	12,630
Japanese Yen	132,796,882	5/23/08	40,295
Japanese Yen	124,274,882	5/23/08	41,434
Japanese Yen	128,040,787	5/23/08	43,659
Japanese Yen	22,218,000	5/23/08	5,413
New Zealand Dollar	715,439	5/23/08	(1,086)
Norwegian Krone	2,758,000	5/23/08	27,092
Pound Sterling	181,000	5/23/08	4,432
Pound Sterling	41,000	5/23/08	1,584
Singapore Dollar	394,000	5/23/08	3,042
Swedish Krona	6,111,394	5/23/08	23,469
Swiss Franc	1,432,220	5/23/08	63,427
Swiss Franc	1,432,220	5/23/08	65,379
			$346,974
Sells
Australian Dollar	1,165,769	5/23/08	($12,469)
Australian Dollar	1,163,289	5/23/08	(14,949)
Danish Kroner	1,151,716	5/23/08	(35,269)
Euro	175,716	5/23/08	136
Hong Kong Dollar	400,226	5/23/08	(831)
Japanese Yen	140,634	5/23/08	(388)
Norwegian Krone	796,419	5/23/08	(20,591)
Pound Sterling	1,229,794	5/23/08	(23,405)
Pound Sterling	81,011	5/23/08	32
Pound Sterling	1,230,146	5/23/08	(23,053)
Swiss Franc	569,270	5/23/08	(33,047)
Swiss Franc	200,754	5/23/08	(11,546)
Swiss Franc	571,384	5/23/08	(32,853)
			($208,233)

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 that is distributed to shareholders. Therefore, no federal income tax provision is required. Net capital losses of $590,219 that are attributable to security transactions incurred after October 31, 2007, are treated as arising on March 1, 2008, the first day of the Fund’s next taxable year.

The Fund has adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement 109 (FIN 48), at the beginning of the Fund’s fiscal year. FIN 48 prescribes a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not have a material impact on the Fund’s financial statements. Each of the Fund’s federal tax returns for the prior fiscal years remains subject to examination by the Internal Revenue Service.

Distribution of income and gains

The Fund records distributions to shareholders from net investment income and net realized gains, if any, on the ex-dividend date. During the year ended February 28, 2007, the tax character of distributions paid was as follows: ordinary income $401,047. During the year ended February 29, 2008, the tax character of distributions paid was as follows: ordinary income $2,246,678 and long-term capital gain $876,593. Distributions paid by the Fund with

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respect to each class of shares are calculated in the same manner, at the same time and are in the same amount, except for the effect of expenses that may be applied differently to each class.

As of February 29, 2008, the components of distributable earnings on a tax basis included $502,563 of undistributed ordinary income.

Such distributions and distributable earnings, on a tax basis, are determined in conformity with income tax regulations, which may differ from accounting principles generally accepted in the United States of America. Distributions in excess of tax basis earnings and profits, if any, are reported in the Fund’s financial statements as a return of capital.

Capital accounts within financial statements are adjusted for permanent book/tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book/tax differences will reverse in a subsequent period. Permanent book/tax differences are primarily attributable to foreign currency transactions and investments in passive foreign investment companies.

3. Investment advisory and other agreements

The Trust has entered into an Investment Advisory Agreement with the Adviser. The Adviser is responsible for managing the corporate and business affairs of the Trust and for selecting and compensating subadvisers to handle the investment of the assets of the Fund, subject to the supervision of the Trust’s Board of Trustees. As compensation for its services, the Adviser receives an advisory fee from the Trust. Under the Advisory Agreement, the Fund pays a monthly management fee to the Adviser equivalent, on an annual basis, to the sum of: (a) 0.92% of the first $100,000,000 of the Fund’s aggregate daily net assets; (b) 0.895% of the next $900,000,000 of the Fund’s aggregate daily net assets; and (c) 0.880% of the Fund’s aggregate daily net assets in excess of $1,000,000,000. Aggregate net assets include the net assets of the Fund and International Growth Trust, a series of John Hancock Trust and International Growth Fund, a series of John Hancock Funds II. The Adviser has a subadvisory agreement with Grantham, Mayo, Van Otterloo & Co. LLC. The Fund is not responsible for payment of the subadvisory fees.

The investment management fees incurred for the year ended February 29, 2008, were equivalent to an annual effective rate of 0.92% of the Fund’s average daily net assets.

Expense reimbursements

The Adviser has contractually agreed to reimburse or limit certain Fund level expenses to 0.20% of the Fund’s average annual net assets which are allocated pro rata to all share classes. Furthermore, the Adviser has voluntarily agreed to reimburse or limit these Fund level expenses to 0.18% for the year ended February 29, 2008. The agreements exclude taxes, portfolio brokerage commissions, interest, advisory fees, Rule 12b-1 fees, transfer agency fees, blue sky fees, printing and postage and litigation and indemnification expenses and other extraordinary expenses not incurred in the ordinary course of the Fund’s business. In addition, fees incurred under any agreement or plans of the Fund dealing with services for the shareholders and others with beneficial interest in shares of the Fund, are excluded.

In addition, the Adviser has agreed to reimburse or limit certain expenses for each share class. This agreement excludes taxes, portfolio brokerage commissions, interest and litigation and indemnification expenses and other extraordinary expenses not incurred in the ordinary course of the Fund’s business. In addition, fees incurred under any agreement or plans of the Fund dealing with services for the shareholders and others with beneficial interest in shares of the Fund, are excluded. The reimbursements and limits are such that these expenses will not exceed 1.70% for Class A shares, 2.40% for Class B, 2.40% for Class C, 1.20% for Class I, 1.70% for Class R1, 1.15% for Class 1 and 1.10% for Class NAV. Accordingly, the expense reductions or reimbursements related to this agreement were $162,190, $21,310, $26,395, $20,979, $16,604, $11,173 and $38,174 for Class A, Class B, Class C, Class I, Class R1, Class 1 and Class NAV, respectively for the year ended February 29, 2008. The expense

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reimbursements and limits will continue in effect until June 30, 2008 and thereafter until terminated by the Adviser on notice to the Trust.

Fund administration fees

Pursuant to the Advisory Agreement, the Fund reimburses the Adviser for all expenses associated with providing the administrative, financial, legal, accounting and recordkeep-ing services of the Fund, including the preparation of all tax returns, annual, semi-annual and periodic reports to shareholders and the preparation of all regulatory reports. These expenses are allocated based on the relative share of net assets of each class at the time the expense was incurred.

The fund administration fees incurred for the year ended February 29, 2008, were $14,164 with an annual effective rate of 0.04% of the Fund’s average daily net assets.

Distribution and shareholder service fees

The Trust has a Distribution Agreement with the Distributor. The Fund has adopted Distribution Plans with respect to Class A, Class B, Class C, Class R1 and Class 1, pursuant to Rule 12b-1 under the 1940 Act, to pay the Distributor for the services it provides as distributor of shares of the Fund. Accordingly, the Fund makes monthly payments to the Distributor at an annual rate not to exceed 0.30%, 1.00%, 1.00%, 0.50% and 0.05% of average daily net asset value of Class A, Class B, Class C, Class R1 and Class 1, respectively. A maximum of 0.25% of such payments may be service fees, as defined by the Conduct Rules of Financial Industry Regulatory Authority (formerly the National Association of Securities Dealers). Under the Conduct Rules, curtailment of a portion of the Fund’s 12b-1 payments could occur under certain circumstances.

In addition, the Fund has also adopted a Service Plan for Class R1 shares. Under the Service Plan, the Fund may pay up to 0.25% of Class R1 average daily net asset value for certain other services. There were no Service Plan fees incurred for the year ended February 29, 2008.

Sales charges

Class A shares are assessed up-front sales charges of up to 5.00% of net asset value of such shares. During the year ended February 29, 2008, the Fund was informed that the Distributor received net up-front sales charges of $52,089 with regard to sales of Class A shares. Of this amount, $9,397 was retained and used for printing prospectuses, advertising, sales literature and other purposes; $42,678 was paid as sales commissions to unrelated broker-dealers; and $14 was paid as sales commissions to sales personnel of Signator Investors, Inc. (Signator Investors), a related broker-dealer, an indirect subsidiary of MFC.

Class B shares that are redeemed within six years of purchase are subject to a contingent deferred sales charge (CDSC) at declining rates, beginning at 5.00% of the lesser of the current market value at the time of redemption or the original purchase cost of the shares being redeemed. Class C shares that are redeemed within one year of purchase are subject to a CDSC at a rate of 1.00% of the lesser of the current market value at the time of redemption or the original purchase cost of the shares being redeemed. Proceeds from the CDSCs are paid to the Distributor and are used, in whole or in part, to defray its expenses for providing distribution-related services to the Fund in connection with the sale of Class B and Class C shares. During the year ended February 29, 2008, CDSCs received by Distributor amounted to $298 for Class B shares and $1,625 for Class C shares.

Transfer agent fees

The Fund has a Transfer Agency Agreement with John Hancock Signature Services, Inc. (Signature Services), an indirect subsidiary of MFC. For Class A, Class B, Class C, Class I and Class R1 shares, the Fund pays a monthly transfer agent fee at an annual rate of 0.05% of each class’ average daily net assets, plus a fee based on the number of shareholder accounts and reimbursement for certain out-of-pocket expenses. Expenses not directly attributable to a particular class of shares are aggregated and allocated to each class on the basis of its relative net asset value. The Fund pays a monthly fee which is based on an annual rate of $15.00

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for each Class A shareholder account, $17.50 for each Class B shareholder account, $16.50 for each Class C shareholder account and $15.00 for each Class R1 shareholder account.

Signature Services has agreed to limit the transfer agent fees so that such fees do not exceed 0.30% annually of Class A, Class B, Class C, Class I and Class R1 share average daily net assets. This agreement is effective until December 31, 2008. Signature Services reserves the right to terminate this limitation in the future. There were no transfer agent fee reductions for Class A, Class B, Class C, Class I and Class R1 shares, respectively, during the year ended February 29, 2008. In addition, Signature Services has voluntarily agreed to further limit transfer agent fees for Class R1 shares so that such fees do not exceed 0.05% annually of each class’s average daily net assets. For the year ended February 29, 2008, the transfer agent fees reductions for Class R1 were $334.

In May 2007, the Fund began receiving earnings credits from its transfer agent as a result of uninvested cash balances. These credits are used to reduce a portion of the Fund’s transfer agent fees and out-of-pocket expenses. During the year ended February 29, 2008, the Fund’s transfer agent fees and out-of-pocket expenses were reduced by $268 for transfer agent credits earned.

Class level expenses for the year ended February 29, 2008, were as follows:
	Distribution and	Transfer		Printing and
Share class	service fees	agent fees	Blue sky fees	postage fees
Class A	$75,588	$19,267	$15,390	$6,017
Class B	9,639	2,958	14,807	164
Class C	19,947	3,737	15,120	863
Class I	—	281	17,698	331
Class R1	666	402	15,824	3
Class 1	820	—	—	283
Class NAV	—	—	—	—
Total	$106,660	$26,645	$78,839	$7,661

4. Trustees’ fees

The Trust compensates each Trustee who is not an employee of the Adviser or its affiliates. Total Trustees’ expenses are allocated to the Fund based on its average daily net asset value.

5. Line of credit

The Fund has entered into an agreement which enables them to participate in a $100 million unsecured committed line of credit with State Street Corporation. Borrowings will be made solely to temporarily finance the repurchase of capital shares. Interest is charged to the Fund based on its borrowings at a rate per annum equal to the Federal Funds rate plus 0.50%. In addition, a commitment fee of 0.05% per annum, payable at the end of each calendar quarter, based on the average daily-unused portion of the line of credit, is charged to the Fund on a prorated basis based on average net assets. Effective October 15, 2007, the commitment fee was changed from 0.07% to 0.05% . For the year ended February 29, 2008, there were no borrowings under the line of credit.

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6. Fund share transactions

Share activities for the Fund for the period ended February 28, 2007, and the year ended February 29, 2008, were as follows:

	Period ended 2-28-07		Year ended 2-29-08
	Shares	Amount	Shares	Amount
Class A shares1
Sold	813,928	$16,553,865	414,385	$10,585,758
Distributions reinvested	15,834	374,467	80,686	1,966,314
Repurchased	(1,140)	(26,802)	(172,237)	(4,088,612)
Net increase (decrease)	828,622	$16,901,530	322,834	$8,463,460
Class B shares1
Sold	23,398	$520,275	49,493	$1,301,454
Distributions reinvested	247	5,833	3,261	79,442
Repurchased	(2,408)	(52,838)	(22,033)	(551,497)
Net increase (decrease)	21,237	$473,270	30,721	$829,399
Class C shares1
Sold	70,102	$1,611,040	55,553	$1,402,156
Distributions reinvested	313	7,402	4,414	107,446
Repurchased	(5,000)	(118,700)	(21,855)	(509,068)
Net increase (decrease)	65,415	$1,499,742	38,112	$1,000,534
Class I shares1
Sold	8,739	$188,288	148,817	$3,828,656
Distributions reinvested	127	3,010	1,455	35,510
Repurchased	—	—	(133,227)	(3,446,247)
Net increase (decrease)	8,866	$191,298	17,045	$417,919
Class R1 shares1
Sold	5,000	$100,000	482	$12,483
Distributions reinvested	104	2,445	413	10,043
Repurchased	—	—	(4)	(89)
Net increase (decrease)	5,104	$102,445	891	$22,437
Class 1 shares1
Sold	23,720	$544,869	124,068	$3,141,773
Distributions reinvested	121	2,861	7,219	176,002
Repurchased	(785)	(18,107)	(31,315)	(790,808)
Net increase (decrease)	23,056	$529,623	99,972	$2,526,967
Class NAV shares2
Sold	31,844	$770,789	299,764	$7,594,950
Distributions reinvested	—	—	24,142	587,378
Repurchased	(362)	(8,440)	(23,722)	(570,441)
Net increase (decrease)	31,482	$762,349	300,184	$7,611,887
Net increase (decrease)	983,782	$20,460,257	809,759	$20,872,603

¹Period from 6-12-06 (commencement of operations) to 2-28-07.

²Period from 12-27-06 (commencement of operation) to 2-28-07.

7. Purchases and sales of securities

Purchases and proceeds from sales or maturities of securities, other than short-term securities and obligations of the U.S. government, during the year ended February 29, 2008, aggregated $51,627,814 and $32,771,239, respectively.

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Auditors’ report

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of John Hancock Funds III and Shareholders of John Hancock International Growth Fund,

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of John Hancock International Growth Fund (the Fund) at February 29, 2008, and the results of its operations, the changes in its net assets and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). T hose standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of investments at February 29, 2008 by correspondence with the custodian, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
Boston, Massachusetts
April 18, 2008

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Tax information

Unaudited

For federal income tax purposes, the following information is furnished with respect to the distributions of the Fund, if any, paid during its taxable year ended February 29, 2008.

The Fund has designated distributions to shareholders of $876,593 as a long-term capital gain dividend.

The Fund hereby designates the maximum amount allowable of its net taxable income as qualified dividend income as provided in the Jobs and Growth Tax Relief Reconciliation Act of 2003. This amount will be reflected on Form 1099-DIV for the calendar year 2008.

Shareholders will be mailed a 2008 U.S. Treasury Department Form 1099-DIV in January 2009. This will reflect the total of all distributions that are taxable for calendar year 2008.

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Trustees and Officers

This chart provides information about the Trustees and Officers who oversee your John Hancock fund. Officers elected by the Trustees manage the day-to-day operations of the Fund and execute policies formulated by the Trustees.

Independent Trustees
Name, Year of Birth		Number of
Position(s) held with Fund	Trustee	John Hancock
Principal occupation(s) and other	of Fund	funds overseen
directorships during past 5 years	since1	by Trustee
James F. Carlin, Born: 1940	2006	55
Chairman (since December 2007); Director and Treasurer, Alpha Analytical Laboratories, Inc. (chemical
analysis) (since 1985); Part Owner and Treasurer, Lawrence Carlin Insurance Agency, Inc. (since 1995);
Part Owner and Vice President, Mone Lawrence Carlin Insurance Agency, Inc. (until 2005); Chairman
and Chief Executive Officer, Carlin Consolidated, Inc. (management/investments) (since 1987); Trustee,
Massachusetts Health and Education Tax Exempt Trust (1993–2003).
William H. Cunningham, Born: 1944	2006	55
Professor, University of Texas at Austin (since 1971); former Chancellor, University of Texas System and
former President, University of Texas at Austin (until 2001); Chairman and Chief Executive Officer, IBT
Technologies (until 2001); Director of the following: Hicks Acquisition Company I, Inc. (since 2007);
Hire.com (until 2004), STC Broadcasting, Inc. and Sunrise Television Corp. (until 2001), Symtx, Inc.
(electronic manufacturing) (since 2001), Adorno/Rogers Technology, Inc. (until 2004), Pinnacle
Foods Corporation (until 2003), rateGenius (until 2003), Lincoln National Corporation (insurance)
(since 2006), Jefferson-Pilot Corporation (diversified life insurance company) (until 2006), New
Century Equity Holdings (formerly Billing Concepts) (until 2001), eCertain (until 2001), ClassMap.com
(until 2001), Agile Ventures (until 2001), AskRed.com (until 2001), Southwest Airlines (since 2000),
Introgen (manufacturer of biopharmaceuticals) (since 2000) and Viasystems Group, Inc. (electronic
manufacturer) (until 2003); Advisory Director, Interactive Bridge, Inc. (college fundraising) (until 2001);
Advisory Director, Q Investments (until 2003); Advisory Director, JPMorgan Chase Bank (formerly Texas
Commerce Bank–Austin), LIN Television (until 2008), WilTel Communications (until 2003) and Hayes
Lemmerz International, Inc. (diversified automotive parts supply company) (since 2003).
Charles L. Ladner,2 Born: 1938	2006	55
Chairman and Trustee, Dunwoody Village, Inc. (retirement services) (until 2003); Senior Vice President
and Chief Financial Officer, UGI Corporation (public utility holding company) (retired 1998); Vice
President and Director, AmeriGas, Inc. (retired 1998); Director, AmeriGas Partners, L.P. (gas distribution)
(until 1997); Director, EnergyNorth, Inc. (until 1997); Director, Parks and History Association (until 2005).
John A. Moore,2 Born: 1939	2006	55
President and Chief Executive Officer, Institute for Evaluating Health Risks (nonprofit institution)
(until 2001); Senior Scientist, Sciences International (health research) (until 2003); Former Assistant
Administrator and Deputy Administrator, Environmental Protection Agency; Principal, Hollyhouse
(consulting) (since 2000); Director, CIIT Center for Health Science Research (nonprofit research)
(until 2007).

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Independent Trustees (continued)
Name, Year of Birth		Number of
Position(s) held with Fund	Trustee	John Hancock
Principal occupation(s) and other	of Fund	funds overseen
directorships during past 5 years	since1	by Trustee
Patti McGill Peterson,2 Born: 1943	2006	55
Senior Associate, Institute for Higher Education Policy (since 2007); Executive Director, Council for
International Exchange of Scholars and Vice President, Institute of International Education (until 2007);
Senior Fellow, Cornell Institute of Public Affairs, Cornell University, Ithaca, NY (until 1998); Former
President, Wells College, Aurora, NY, and St. Lawrence University, Canton, NY; Director, Niagara
Mohawk Power Corporation (until 2003); Director, Ford Foundation, International Fellowships Program
(since 2002); Director, Lois Roth Endowment (since 2002); Director, Council for International Educational
Exchange (since 2003).
Steven R. Pruchansky, Born: 1944	2006	55
Chairman and Chief Executive Officer, Greenscapes of Southwest Florida, Inc. (since 2000); Director and
President, Greenscapes of Southwest Florida, Inc. (until 2000); Managing Director, JonJames, LLC (real
estate) (since 2000); Director, First Signature Bank & Trust Company (until 1991); Director, Mast Realty
Trust (until 1994); President, Maxwell Building Corp. (until 1991).
Non-Independent Trustees3
Name, Year of Birth		Number of
Position(s) held with Fund	Trustee	John Hancock
Principal occupation(s) and other	of Fund	funds overseen
directorships during past 5 years	since1	by Trustee
James R. Boyle, Born: 1959	2006	265
Executive Vice President, Manulife Financial Corporation (since 1999); President, John Hancock Variable
Life Insurance Company (since March 2007); Executive Vice President, John Hancock Life Insurance
Company (since 2004); Chairman and Director, John Hancock Advisers, LLC (the Adviser), John Hancock
Funds, LLC and The Berkeley Financial Group, LLC (The Berkeley Group) (holding company) (since 2005);
Senior Vice President, The Manufacturers Life Insurance Company (U.S.A.) (until 2004).

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Principal officers who are not Trustees
Name, Year of Birth
Position(s) held with Fund	Officer
Principal occupation(s) and other	of Fund
directorships during past 5 years	since
Keith F. Hartstein, Born: 1956	2006
President and Chief Executive Officer
Senior Vice President, Manulife Financial Corporation (since 2004); Director, President and Chief
Executive Officer, the Adviser, The Berkeley Group and John Hancock Funds, LLC (since 2005); Director,
MFC Global Investment Management (U.S.), LLC (MFC Global (U.S.)) (since 2005); Director, John
Hancock Signature Services, Inc. (since 2005); President and Chief Executive Officer, John Hancock
Investment Management Services, LLC (since 2006); President and Chief Executive Officer, John Hancock
Funds, John Hancock Funds II, John Hancock Funds III and John Hancock Trust (since 2005); Director,
Chairman and President, NM Capital Management, Inc. (since 2005); Member, Investment Company
Institute Sales Force Marketing Committee (since 2003); President and Chief Executive Officer, MFC
Global (U.S.) (2005–2006); Executive Vice President, John Hancock Funds, LLC (until 2005).
Thomas M. Kinzler, Born: 1955	2006
Secretary and Chief Legal Officer
Vice President and Counsel, John Hancock Life Insurance Company (U.S.A.) (since 2006); Secretary and
Chief Legal Officer, John Hancock Funds and John Hancock Funds II (since 2006); Chief Legal Officer
and Assistant Secretary, John Hancock Trust (since 2006); Vice President and Associate General Counsel,
Massachusetts Mutual Life Insurance Company (1999–2006); Secretary and Chief Legal Counsel, MML
Series Investment Fund (2000–2006); Secretary and Chief Legal Counsel, MassMutual Institutional Funds
(2000–2004); Secretary and Chief Legal Counsel, MassMutual Select Funds and MassMutual Premier
Funds (2004–2006).
Francis V. Knox, Jr., Born: 1947	2006
Chief Compliance Officer
Vice President and Chief Compliance Officer, John Hancock Investment Management Services, LLC,
the Adviser and MFC Global (U.S.) (since 2005); Vice President and Chief Compliance Officer, John
Hancock Funds, John Hancock Funds II, John Hancock Funds III and John Hancock Trust (since 2005);
Vice President and Assistant Treasurer, Fidelity Group of Funds (until 2004); Vice President and Ethics &
Compliance Officer, Fidelity Investments (until 2001).
Charles A. Rizzo, Born: 1957	2007
Chief Financial Officer
Chief Financial Officer, John Hancock Funds, John Hancock Funds II, John Hancock Funds III and John
Hancock Trust (since June 2007); Assistant Treasurer, Goldman Sachs Mutual Fund Complex (regis-
tered investment companies) (2005–June 2007); Vice President, Goldman Sachs (2005–June 2007);
Managing Director and Treasurer of Scudder Funds, Deutsche Asset Management (2003–2005);
Director, Tax and Financial Reporting, Deutsche Asset Management (2002–2003); Vice President and
Treasurer, Deutsche Global Fund Services (Deutsche Registered Investment Companies) (1999–2002).
Gordon M. Shone, Born: 1956	2006
Treasurer
Senior Vice President, John Hancock Life Insurance Company (U.S.A.) (since 2001); Treasurer, John
Hancock Funds (since 2006), John Hancock Funds II, John Hancock Funds III and John Hancock Trust
(since 2005); Vice President and Chief Financial Officer, John Hancock Trust (2003–2005); Vice President,
John Hancock Investment Management Services, Inc., John Hancock Advisers, LLC (since 2006) and The
Manufacturers Life Insurance Company (U.S.A.) (1998–2000).

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45

Principal officers who are not Trustees (continued)
Name, Year of Birth
Position(s) held with Fund	Officer
Principal occupation(s) and other	of Fund
directorships during past 5 years	since
John G. Vrysen, Born: 1955	2006
Chief Operating Officer
Senior Vice President, Manulife Financial Corporation (since 2006); Director, Executive Vice President
and Chief Operating Officer, the Adviser, The Berkeley Group and John Hancock Funds, LLC (since
June 2007); Executive Vice President and Chief Operating Officer, John Hancock Investment
Management Services, LLC (since December 2007); Chief Operating Officer, John Hancock Funds,
John Hancock Funds II, John Hancock Funds III and John Hancock Trust (since June 2007); Director,
Executive Vice President and Chief Financial Officer, the Adviser, The Berkeley Group and John Hancock
Funds, LLC (2005–2007); Executive Vice President and Chief Financial Officer, John Hancock Investment
Management Services, LLC (2005–2007); Executive Vice President and Chief Financial Officer, MFC
Global (U.S.) (2005 until August 2007); Director, John Hancock Signature Services, Inc. (since 2005);
Chief Financial Officer, John Hancock Funds, John Hancock Funds II, John Hancock Funds III and John
Hancock Trust (2005 until June 2007); Vice President and General Manager, John Hancock Fixed
Annuities, U.S. Wealth Management (2004–2005); Vice President, Operations, Manulife Wood Logan
(2000–2004).

The business address for all Trustees and Officers is 601 Congress Street, Boston, Massachusetts 02210-2805.

The Statement of Additional Information of the Fund includes additional information about members of the Board of Trustees of the Fund and is available without charge, upon request, by calling 1-800-225-5291.

¹ Each Trustee serves until resignation, retirement age or until his or her successor is elected.

² Member of Audit and Compliance Committee.

³ Non-Independent Trustee holds positions with the Fund’s investment adviser, underwriter and certain other affiliates.

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For more information

The Fund’s proxy voting policies, procedures and records are available without charge, upon request:

By phone	On the Fund’s Web site	On the SEC’s Web site
1-800-225-5291	www.jhfunds.com/proxy	www.sec.gov
Investment adviser	Custodian	Legal counsel
John Hancock Investment	State Street Bank & Trust Co.	Kirkpatrick & Lockhart
Management Services, LLC	2 Avenue de Lafayette	Preston Gates Ellis LLP
601 Congress Street	Boston, MA 02111	One Lincoln Street
Boston, MA 02210-2805		Boston, MA 02111-2950
	Transfer agent
Subadviser	John Hancock Signature	Independent registered
Grantham, Mayo, Van	Services, Inc.	public accounting firm
Otterloo & Co. LLC	P.O. Box 9510	PricewaterhouseCoopers LLP
40 Rowes Wharf	Portsmouth, NH 03802-9510	125 High Street
Boston, MA 02110		Boston, MA 02110
Principal distributor
John Hancock Funds, LLC
601 Congress Street
Boston, MA 02210-2805

How to contact us
Internet	www.jhfunds.com
Mail	Regular mail:	Express mail:
	John Hancock Signature	John Hancock Signature
	Services, Inc.	Services, Inc.
	P.O. Box 9510	Mutual Fund Image Operations
	Portsmouth, NH 03802-9510	164 Corporate Drive
		Portsmouth, NH 03801
Phone	Customer service representatives	1-800-225-5291
	EASI-Line	1-800-338-8080
	TDD line	1-800-554-6713

A listing of month-end portfolio holdings is available on our Web site, www.jhfunds.com. A more detailed portfolio holdings summary is available on a quarterly basis 60 days after the fiscal quarter on our Web site or upon request by calling 1-800-225-5291, or on the SEC’s Web site, www.sec.gov.

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1-800-225-5291
1-800-554-6713 TDD
1-800-338-8080 EASI-Line
www.jhfunds. com

Now available:electronicdelivery
www.jhfunds.com/edelivery

This report is for the information of the shareholders of John Hancock International Growth Fund.	8700A	2/08
It is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus.		4/08

Discussion of Fund performance

By MFC Global Investment Management (U.S.A.) LLC

The year ended February 29, 2008, was a challenging one for international markets. While foreign stocks continued to outperform U.S. equities, highlighted by particularly strong results in emerging markets, share prices weakened notably in the final  four months of the period, as a slew of unfavorable economic and corporate earnings data built a convincing case that a serious U.S.-centered slowdown was, in fact, occurring, and that the fallout from the subprime mortgage crisis was  by no means as contained as investors had previously hoped. Against this backdrop, the MSCI EAFE Gross Total Return Index posted a modest 1.27% gain, topping the –3.60% return of the Standard & Poor’s 500 Index. Meanwhile, the MSCI Emerging Markets Index gained 27.69% . While the EAFE index trailed the S&P 500 in local currency terms, a weak U.S. dollar bolstered the benchmark’s dollar-based results.

“The year ended February 29,
2008, was a challenging one for
international markets.”

During the past year, John Hancock International Allocation Portfolio’s Class A, Class B, Class C and Class I shares returned 0.70%, –0.13%, –0.13% and 1.02%, respectively, at net asset value. The Portfolio’s performance was undermined by its position in International Classic Value, which registered a double-digit loss due to overweightings in the beleaguered financials sector and in Japan. Also detracting from our results was International Value, which lagged the benchmark by a much smaller margin but represented a much larger position. Positive factors included International Opportunities, which benefited from overweighting Hong Kong, Canada and Brazil, as well as from underweighting Japan. Among sectors, underweighting global financials helped. The other notable positive influence was Greater China Opportunities, which posted the largest gain of all our holdings but had a smaller overall impact on performance due to its relatively small position si ze of 2.6%, on average.

This commentary reflects the views of the portfolio managers through the end of the Portfolio’s period discussed in this report. The managers’ statements reflect their own opinions. As such, they are in no way guarantees of future events and are not intended to be used as investment advice or a recommendation regarding any specific security. They are also subject to change at any time as market and other conditions warrant.

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6

A look at performance

For the periods ended February 29, 2008

		Average annual returns				Cumulative total returns
		with maximum sales charge (POP)				with maximum sales charge (POP)
	Inception				Since				Since
Class	date	1-year	5-year	10-year	inception	1-year	5-year	10-year	inception
A	12-29-06	–4.30%	—	—	–4.08%	–4.30%	—	—	–4.75%
B	12-29-06	–4.88	—	—	–3.78	–4.88	—	—	–4.41
C	12-29-06	–1.08	—	—	–0.54	–1.08	—	—	–0.63
I1	12-29-06	1.02	—	—	0.61	1.02	—	—	0.71

Performance figures assume all distributions are reinvested. Public offering price (POP) figures reflect maximum sales charge on Class A shares of 5%, and the applicable contingent deferred sales charge (CDSC) on Class B and Class C shares. The Class B shares’ CDSC declines annually between years 1 to 6 according to the following schedule:5, 4, 3, 3, 2, 1%. No sales charge will be assessed after the sixth year. Class C shares held for less than one year are subject to a 1% CDSC. Sales charge is not applicable for Class I shares.

The expense ratios of the Portfolio, both net (including any fee waivers or expense limitations) and gross (excluding any fee waivers or expense limitations), are set forth according to the most recent publicly available prospectuses for the Portfolio and may differ from the expense ratios disclosed in the Financial Highlights tables in this report. The waivers and expense limitations are contractual at least until 06-30-08. The following expense ratios include expenses of the underlying affiliated funds in which the Portfolio invests. The net expenses are as follows:Class A — 1.70%, Class B — 2.40%, Class C — 2.40%, Class I — 1.25% . Had the fee waivers and expense limitations not been in place, the gross expenses would be as follows:Class A — 1.79%, Cl ass B — 2.67%, Class C — 2.55%, Class I — 1.39% .

The returns reflect past results and should not be considered indicative of future performance. The return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, the Portfolio’s current performance may be higher or lower than the performance shown. For performance data current to the most recent month end, please call 1-800-225-5291 or visit the Portfolio’s Web site at www.jhfunds.com.

The performance table above and the chart on the next page do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

The Portfolio’s performance results reflect any applicable expense reductions, without which the expenses increase and results would have been less favorable.

Performance is calculated with an opening price (prior day’s close) on the inception date.

¹ For certain types of investors as described in the Portfolio’s Class I share prospectus.

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7

A look at performance

Growth of $10,000

This chart shows what happened to a hypothetical $10,000 investment in International Allocation Portfolio Class A shares for the period indicated. For comparison, we’ve shown the same investment in two separate indexes.

		Without sales	With maximum
Class	Period beginning	charge	sales charge	Index 1	Index 2
B2	12-29-06	$9,937	$9,559	$10,280	$10,239
C2	12-29-06	9,937	9,937	10,280	10,239
I2,3	12-29-06	10,071	10,071	10,280	10,239

Assuming all distributions were reinvested for the period indicated, the table above shows the value of a $10,000 investment in the Portfolio’s Class B, Class C and Class I shares, respectively, as of February 29, 2008. Performance of the classes will vary based on the difference in sales charges paid by shareholders investing in the different classes and the fee structure of those classes.

MSCI EAFE Gross Total Return Index — Index 1 — is an unmanaged market capitalization weighted composite of securities in 21 developed markets outside of North America, in Europe, Australia and the Far East. The MSCI EAFE (gross) Index includes the maximum dividend reinvestment. The Composite Index figures do not reflect any deduction for fees, taxes or expenses.

MSCI EAFE Net Total Return Index (Europe, Australasia, Far East)— Index 2 — is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the U.S. and Canada. Since June 2006, the MSCI EAFE Index consisted of the following 21 developed market country indexes: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland and the United Kingdom. Returns are calculated and presented net of withholding tax.

It is not possible to invest directly in an index. Index figures do not reflect sales charges, which would have resulted in lower values if they did.

¹ NAV represents net asset value and POP represents public offering price.

² Index 1 figure as of closest month end to fund inception date.

³ For certain types of investors as described in the Portfolio’s Class I share prospectus.

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8

Your expenses

These examples are intended to help you understand your ongoing operating expenses.

Understanding fund expenses

As a shareholder of the Portfolio, you incur two types of costs:

■ Transaction costs which include sales charges (loads) on purchases or redemptions (varies by share class), minimum account fee charge, etc. 

■Ongoing operating expenses including management fees, distribution and service fees (if applicable), and other fund expenses.

We are going to present only your ongoing operating expenses here.

Actual expenses/actual returns

This example is intended to provide information about your fund’s actual ongoing operating expenses, and is based on your fund’s actual return. It assumes an account value of $1,000.00 on September 1, 2007, with the same investment held until February 29, 2008.

	Account value	Ending value	Expenses paid during
	on 9-1-07	on 2-29-08	period on 2-29-081
Class A	$1,000.00	$940.88	$2.70
Class B	1,000.00	937.48	6.46
Class C	1,000.00	936.55	6.40
Class I	1,000.00	942.12	0.92

Together with the value of your account, you may use this information to estimate the operating expenses that you paid over the period. Simply divide your account value at February 29, 2008, by $1,000.00, then multiply it by the “expenses paid” for your share class from the table above. For example, for an account value of $8,600.00, the operating expenses should be calculated as follows:

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9

Your expenses

Hypothetical example for comparison purposes

This table allows you to compare your fund’s ongoing operating expenses with those of any other fund. It provides an example of the Portfolio’s hypothetical account values and hypothetical expenses based on each class’s actual expense ratio and an assumed 5% annualized return before expenses (which is not your fund’s actual return). It assumes an account value of $1,000.00 on September 1, 2007, with the same investment held until February 29, 2008. Look in any other fund shareholder report to find its hypothetical example and you will be able to compare these expenses.

	Account value	Ending value	Expenses paid during
	on 9-1-07	on 2-29-08	period on 2-29-081
Class A	$1,000.00	$1,022.08	$2.82
Class B	1,000.00	1,018.20	6.72
Class C	1,000.00	1,018.25	6.67
Class I	1,000.00	1,023.92	0.96

Remember, these examples do not include any transaction costs, such as sales charges; therefore, these examples will not help you to determine the relative total costs of owning different funds. If transaction costs were included, your expenses would have been higher. See the prospectus for details regarding transaction costs.

¹ Expenses are equal to the Portfolio’s annualized expense ratio of 0.56%, 1.34%, 1.33% and 0.19% for Class A, Class B, Class C and Class I, respectively, multiplied by the average account value over the period, multiplied by the number of days in most recent fiscal half year/366 (to reflect the one-half year period). Ratios do not include expenses incurred from underlying funds whose annualized weighted average expense ratio was 1.02%, based on the mix of underlying funds held by the Portfolio.

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Portfolio summary

Asset allocation1	% of Total
International Large Cap	76.0%
International Small Cap	16.0%
Emerging Markets	6.0%
China	2.0%

¹ As a percentage of net assets on February 29, 2008.

11 Annual report | International Allocation Portfolio

F I N A N C I A L  S T A T E M E N T S

Portfolio’s investments

Securities owned by the Portfolio on 2-29-08

Portfolio of investments, showing all affiliated underlying funds.

Issuer	Shares	Value
Investment companies 100.13%		$41,074,409
(Cost $45,918,142)
John Hancock Funds 17.10%		7,015,603
Greater China Opportunities
(MFC Global Investment Management (U.S.A.) Ltd.) (f)	36,506	$799,111
International Classic Value
(Pzena Investment Management, LLC) (f)	706,419	6,216,492
John Hancock Funds II 64.81%		26,587,709
Emerging Markets Value
(Dimensional Fund Advisors, Inc.) (f)	209,581	2,332,641
International Opportunities
(Marsico Capital Management, LLC) (f)	528,469	9,105,512
International Small Company
(Dimensional Fund Advisors, Inc.) (f)	671,480	6,459,635
International Value
(Franklin® Templeton®) (f)	509,374	8,689,921
John Hancock Funds III 18.22%		7,471,097
International Growth
(Grantham, Mayo, Van Otterloo & Company) (f)	327,106	7,471,097
Total investments (Cost $45,918,142)† 100.13%		$41,074,409
Liabilities in excess of other assets (0.13%)		($51,621)
Total net assets 100.00%		$41,022,788

Percentages are stated as a percent of net assets.

(f) The underlying fund’s subadviser.

† At February 29, 2008, the aggregate cost of investment securities for federal income tax purposes was $46,441,526. Net unrealized depreciation aggregated $5,367,117, of which $81,281 related to appreciated investment securities and $5,448,398 related to depreciated investment securities.

See notes to financial statements

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F I N A N C I A L  S T A T E M E N T S

Financial statements

Statement of assets and liabilities 2-29-08

This Statement of Assets and Liabilities is the Portfolio’s balance sheet. It shows the value of what the Portfolio owns, is due and owes. You’ll also find the net asset value and the maximum public offering price per share.

Assets
Investments in affiliated funds, at value (cost $45,918,142) (Note 8)	$41,074,409
Total investments, at value (cost $45,918,142)	41,074,409
Receivable for investments sold	626,458
Receivable for fund shares sold	90,502
Receivable due from adviser	23,451
Other assets	228
Total assets	41,815,048
Liabilities
Due to custodian	62,217
Payable for investments purchased	6,903
Payable for fund shares repurchased	646,147
Payable to affiliates
Fund administration fees	630
Transfer agent fees	9,442
Trustees’ fees	60
Other payables and accrued expenses	66,861
Total liabilities	792,260
Net assets
Capital paid-in	$45,373,395
Accumulated undistributed net realized gain (loss) on investments	493,126
Net unrealized appreciation (depreciation) on investments	(4,843,733)
Net assets	$41,022,788

See notes to financial statements

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13

F I N A N C I A L  S T A T E M E N T S

Statement of assets and liabilities continued

Net asset value per share
The Portfolio has an unlimited number of shares authorized with no par
value. Net asset value is calculated by dividing the net assets of each class
of shares by the number of outstanding shares in the class.
Class A
Net assets	$30,219,567
Shares outstanding	3,187,026
Net asset value and redemption price per share	$9.48
Class B1
Net assets	$1,715,170
Shares outstanding	181,383
Net asset value and offering price per share	$9.46
Class C1
Net assets	$8,242,267
Shares outstanding	870,835
Net asset value and offering price per share	$9.46
Class I
Net assets	$845,784
Shares outstanding	89,099
Net asset value, offering price and redemption price per share	$9.49
Maximum public offering price per share
Class A (net asset value per share ÷ 95%)2	$9.98

¹ Redemption price per share is equal to the net asset value less any applicable contingent deferred sales charge.

² On single retail sales of less than $50,000. On sales of $50,000 or more and on group sales the offering price is reduced.

See notes to financial statements

14 International Allocation Portfolio | Annual report

F I N A N C I A L  S T A T E M E N T S

Statement of operations For the year ended 2-29-08

This Statement of Operations summarizes the Portfolio’s investment income earned and expenses incurred in operating the Portfolio. It also shows net gains (losses) for the period stated.

Investment income
Income distributions received from affiliated underlying funds	$608,654
Total investment income	608,654
Expenses
Investment management fees (Note 3)	43,023
Distribution and service fees (Note 3)	142,621
Transfer agent fees (Note 3)	41,823
Fund administration fees (Note 3)	9,769
Blue sky fees (Note 3)	124,211
Audit and legal fees	69,636
Printing and postage fees (Note 3)	15,367
Custodian fees	17,417
Trustees’ fees (Note 3)	1,440
Registration and filing fees	30,751
Miscellaneous	8,191
Total expenses	504,249
Less expense reductions (Note 3)	(267,516)
Net expenses	236,733
Net investment income	371,921
Realized and unrealized gain (loss)
Net realized gain (loss) on
Investments in affiliated underlying funds	(487,660)
Capital gain distributions received from affiliated underlying funds	2,814,726
	2,327,066
Change in net unrealized appreciation (depreciation) of
investments in affiliated underlying funds	(4,761,706)
	(4,761,706)
Net realized and unrealized gain (loss)	(2,434,640)
Increase (decrease) in net assets from operations	($2,062,719)

See notes to financial statements

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F I N A N C I A L  S T A T E M E N T S

Statement of changes in net assets

These Statements of Changes in Net Assets show how the value of the Portfolio’s net assets has changed during the last two periods. The difference reflects earnings less expenses, any investment gains and losses, distributions, if any, paid to shareholders and the net of Portfolio share transactions.

	Period	Year
	ended	ended
	2-28-071	2-29-08
Increase (decrease) in net assets
From operations
Net investment income (loss)	($1,551)	$371,921
Net realized gain (loss)	(547)	2,327,066
Change in net unrealized appreciation (depreciation)	(82,027)	(4,761,706)
Increase (decrease) in net assets resulting from operations	(84,125)	(2,062,719)
Distributions to shareholders
From net investment income
Class A	—	(368,791)
Class B	—	(8,046)
Class C	—	(36,417)
Class I	—	(11,786)
From net realized gain
Class A	—	(1,337,953)
Class B	—	(74,015)
Class C	—	(335,022)
Class I	—	(33,949)
Total distributions	—	(2,205,979)
From Fund share transactions (Note 6)	4,651,047	40,724,564
Total increase (decrease)	4,566,922	36,455,866
Net assets
Beginning of year	—	4,566,922
End of year	$4,566,922	$41,022,788

¹ Period from 12-29-06 (commencement of operations) to 2-28-07.

See notes to financial statements

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F I N A N C I A L  S T A T E M E N T S

Financial highlights

The Financial Highlights show how the Portfolio’s net asset value for a share has changed since the end of the previous period.

CLASS A SHARES
Period ended	2-28-071	2-29-08
Per share operating performance
Net asset value, beginning of period	$10.00	$9.96
Net investment income (loss)2,3	(0.01)	0.13
Net realized and unrealized gain
(loss) on investments	(0.03)	(0.03)
Total from investment operations	(0.04)	0.10
Less distributions
From net investment income	—	(0.13)
From net realized gain	—	(0.45)
	—	(0.58)
Net asset value, end of period	$9.96	$9.48
Total return4,5 (%)	(0.40)6	0.70
Ratios and supplemental data
Net assets, end of period (in millions)	$3	$30
Ratios (as a percentage of average net assets):
Expenses before reductions	8.537	1.118
Expenses net of fee waivers, if any	0.607	0.588
Expenses net of all fee waivers and credits	0.607	0.588
Net investment income (loss)3	(0.60)7	1.21
Portfolio turnover (%)	36	23

¹ Class A shares began operations on 12-29-06.

² Based on the average of the shares outstanding.

³ Recognition of net investment income by the Portfolio is affected by the timing of the declaration of dividends by the underlying funds in which the Portfolio invests.

⁴ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁵ Assumes dividend reinvestment.

⁶ Not annualized.

⁷ Annualized.

⁸ Ratios do not include expenses incurred from underlying funds whose annualized weighted average was 1.02%, based on the mix of underlying funds held by the Portfolio.

See notes to financial statements

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F I N A N C I A L  S T A T E M E N T S

Financial highlights

CLASS B SHARES

Period ended	2-28-071	2-29-08
Per share operating performance
Net asset value, beginning of period	$10.00	$9.95
Net investment income (loss)2,3	(0.02)	0.07
Net realized and unrealized gain
(loss) on investments	(0.03)	(0.06)
Total from investment operations	(0.05)	0.01
Less distributions
From net investment income	—	(0.05)
From net realized gain	—	(0.45)
	—	(0.50)
Net asset value, end of period	$9.95	$9.46
Total return4,5 (%)	(0.50)6	(0.13)
Ratios and supplemental data
Net assets, end of period (in millions)	— 7	$2
Ratios (as a percentage of average net assets):
Expenses before reductions	28.588	4.029
Expenses net of fee waivers, if any	1.268	1.349
Expenses net of all fee waivers and credits	1.268	1.339
Net investment income (loss)3	(1.26)8	0.70
Portfolio turnover (%)	36	23

¹ Class B shares began operations on 12-29-06.

² Based on the average of the shares outstanding.

³ Recognition of net investment income by the Portfolio is affected by the timing of the declaration of dividends by the underlying funds in which the Portfolio invests.

⁴ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁵ Assumes dividend reinvestment.

⁶ Not annualized.

⁷ Less than $500,000.

⁸ Annualized.

⁹ Ratios do not include expenses incurred from underlying funds whose annualized weighted average was 1.02%, based on the mix of underlying funds held by the Portfolio.

See notes to financial statements

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F I N A N C I A L  S T A T E M E N T S

Financial highlights

CLASS C SHARES
Period ended	2-28-071	2-29-08
Per share operating performance
Net asset value, beginning of period	$10.00	$9.95
Net investment income (loss)2,3	(0.02)	0.08
Net realized and unrealized gain
(loss) on investments	(0.03)	(0.07)
Total from investment operations	(0.05)	0.01
Less distributions
From net investment income	—	(0.05)
From net realized gain	—	(0.45)
	—	(0.50)
Net asset value, end of period	$9.95	$9.46
Total return4,5 (%)	(0.50)6	(0.13)
Ratios and supplemental data
Net assets, end of period (in millions)	$1	$8
Ratios (as a percentage of average net assets):
Expenses before reductions	18.627	2.318
Expenses net of fee waivers, if any	1.277	1.338
Expenses net of all fee waivers and credits	1.277	1.338
Net investment income (loss)3	(1.27)7	0.79
Portfolio turnover (%)	36	23

¹ Class C shares began operations on 12-29-06.

² Based on the average of the shares outstanding.

³ Recognition of net investment income by the Portfolio is affected by the timing of the declaration of dividends by the underlying funds in which the Portfolio invests.

⁴ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁵ Assumes dividend reinvestment.

⁶ Not annualized.

⁷ Annualized.

⁸ Ratios do not include expenses incurred from underlying funds whose annualized weighted average was 1.02%, based on the mix of underlying funds held by the Portfolio.

See notes to financial statements

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F I N A N C I A L  S T A T E M E N T S

Financial highlights

CLASS I SHARES
Period ended	2-28-071	2-29-08
Per share operating performance
Net asset value, beginning of period	$10.00	$9.97
Net investment income (loss)2,3	— 4	0.16
Net realized and unrealized gain
(loss) on investments	(0.03)	(0.03)
Total from investment operations	(0.03)	0.13
Less distributions
From net investment income	—	(0.16)
From net realized gain	—	(0.45)
	—	(0.61)
Net asset value, end of period	$9.97	$9.49
Total return5,6 (%)	(0.30)7	1.02
Ratios and supplemental data
Net assets, end of period (in millions)	— 8	$1
Ratios (as a percentage of average net assets):
Expenses before reductions	25.019	7.1710
Expenses net of fee waivers, if any	0.179	0.1810
Expenses net of all fee waivers and credits	0.179	0.1810
Net investment income (loss)3	(0.17)9	1.55
Portfolio turnover (%)	37	23

¹ Class I shares began operations on 12-29-06.

² Based on the average of the shares outstanding.

³ Recognition of net investment income by the Portfolio is affected by the timing of the declaration of dividends by the underlying funds in which the Portfolio invests.

⁴ Less than ($0.01) per share.

⁵ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁶ Assumes dividend reinvestment.

⁷ Not annualized.

⁸ Less than $500,000.

⁹ Annualized.

¹⁰ Ratios do not include expenses incurred from underlying funds whose annualized weighted average was 1.02%, based on the mix of underlying funds held by the Portfolio.

See notes to financial statements

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Notes to financial statements

1. Organization of the Trust

John Hancock International Allocation Portfolio (the Portfolio) is a diversified series of John Hancock Funds III (the Trust). The Trust was established as a Massachusetts business trust on June 9, 2005. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end investment management company. The investment objective of the Portfolio is to seek long term growth of capital.

The Portfolio operates as a “fund of funds”, investing in Class NAV shares of affiliated underlying funds of the Trust and John Hancock Funds II (JHF II) and also in other affiliated funds of the John Hancock funds complex. The Portfolio may also invest in unaffiliated underlying funds and other permitted investments.

The accounting policies of the affiliated underlying funds are outlined in the shareholder reports for such funds, available without charge by calling 1-800-225-5291 or on the Securities and Exchange Commission (SEC) Web site at www.sec.gov, File #811-21779, CIK 0001331971 for JHF II, File #811-21777, CIK 0001329954 for JHF III, File #811-01677, CIK 0000045291 for JH International Classic Value Fund and File #811-04630, CIK 0000791271 for JH Greater China Opportunities Fund. The affiliated underlying funds are not covered by this report.

John Hancock Investment Management Services, LLC (JHIMS or the Adviser), a Delaware limited liability company controlled by John Hancock Life Insurance Company (U.S.A.) (John Hancock USA) serves as investment adviser for the Trust and John Hancock Funds, LLC (the Distributor), an affiliate of the Adviser, serves as principal underwriter. John Hancock Life Insurance Company of New York (John Hancock New York) is a wholly owned subsidiary of John Hancock USA. John Hancock USA and John Hancock New York are indirect  wholly owned subsidiaries of the Manufactures Life Insurance Company (Manulife), which in turn is a wholly owned subsidiary of Manulife Financial Corporation (MFC), a publicly traded company. MFC and its subsidiaries are known collectively as “Manulife Financial.”

The JHF II funds are retail mutual funds advised by JHIMS and distributed by the Distributor.

The Board of Trustees have authorized the issuance of multiple classes of shares of the Portfolio, including classes designated as Class A, Class B, Class C and Class I shares. Class A, Class B and Class C shares are open to all retail investors. Class I shares are offered without any sales charge to various institutional and certain individual investors. The shares of each class represent an interest in the same portfolio of investments of the Portfolio, and have equal rights as to voting, redemptions, dividends and liquidation, except that certain expenses, subject to the approval of the Board of Trustees, may be applied differently to each class of shares in accordance with current regulations of the SEC and the Internal Revenue Service. Shareholders of a class that bears distribution and service expenses under the terms of a distribution plan have exclusive voting rights to that distribution plan. Class B shares will convert to Class A shares eight years after purcha se.

The Adviser and other affiliates of John Hancock USA owned 1,555,846, 10,505, 10,504 and 10,612 shares of beneficial interest of Class A, Class B, Class C and Class I, respectively, on February 29, 2008.

2. Significant accounting policies

In the preparation of the financial statements, the Portfolio follows the policies described below. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires

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21

management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results may differ from these estimates.

Securities valuation

The net asset value of the shares of the Portfolio is determined daily as of the close of the New York Stock Exchange (NYSE), normally at 4:00 P.M., Eastern Time. Investments by the Portfolio in underlying affiliated funds are valued at their respective net asset values each business day and securities in the underlying funds are valued in accordance with their respective valuation polices, as outlined in the underlying funds’ financial statements.

New accounting pronouncement

In September 2006, Financial Accounting Standards Board (FASB) Standard No. 157, Fair Value Measurements (FAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. FAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosure about fair value measurements. As of February 29, 2008, management does not believe the adoption of FAS 157 will impact the amounts reported in the financial statements; however, additional disclosures regarding pricing sources will be required about the inputs used to develop the measurements of fair value and the related realized and unrealized gain/loss for certain securities valued by significant unobservable market inputs.

Security transactions and related investment income

Investment security and underlying affiliated funds transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment transactions are reported on trade date. Interest income is accrued as earned. Dividend income is recorded by the underlying affiliated funds on the ex-dividend date. Distributions from the underlying affiliated funds are recorded on the ex-dividend date. Distributions to shareholders are recorded on the ex-dividend date.  The Portfolio uses the specific identification method for determining realized gain or loss on investments for both financial statement and federal income tax reporting purposes.

Guarantees and indemnifications

Under the Trust’s organizational documents, its Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust that have not yet occurred. However, based on experience, the Trust believes the risk of loss to be remote.

Allocations of income and expenses

All income, expenses (except class-specific expenses), and realized and unrealized gain/ loss are allocated to each class of shares based upon the relative net assets of each class. Dividends to shareholders from net investment income are determined at a class level and distributions from capital gains are determined at a Portfolio level.

Expenses not directly attributable to a particular Portfolio or share class are allocated based on the relative share of net assets of the Portfolio or share class at the time the expense was incurred. Class-specific expenses, as detailed in Note 3, transfer agency fees, blue sky fees, and printing and postage fees, are accrued daily and charged directly to the respective share classes. Expenses in the Portfolio’s Statement of Operations reflect the expenses of the Portfolio and do not include any indirect expenses related to the underlying affiliated funds. Because the affiliated underlying funds have varied expense levels and the Portfolio may own different proportions of the affiliated underlying funds at different times, the amount of fees and expenses incurred indirectly by the Portfolio will vary.

Federal income taxes

The Fund qualifies as a regulated investment company by complying with the applicable

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provisions of the Internal Revenue Code and will not be subject to federal income tax on taxable income that is distributed to shareholders. Therefore, no federal income tax provision is required.

The Fund has adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement 109 (FIN 48), at the beginning of the Fund’s fiscal year. FIN 48 prescribes a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not have a material impact on the Fund’s financial statements. Each of the Fund’s federal tax returns for the prior fiscal years remains subject to examination by the Internal Revenue Service.

Distribution of income and gains

The Fund records distributions to shareholders from net investment income and net realized gains, if any, on the ex-dividend date. During the year ended February 29, 2008, the tax character of distributions paid was as follows: ordinary income $2,153,570 and long-term capital gain $52,409. Distributions paid by the Fund with respect to each class of shares are calculated in the same manner, at the same time and are in the same amount, except for the effect of expenses that may be applied differently to each class.

As of February 29, 2008, the components of distributable earnings on a tax basis included $1,016,510 of undistributed long-term gain.

Such distributions and distributable earnings, on a tax basis, are determined in conformity with income tax regulations, which may differ from accounting principles generally accepted in the United States of America. Distributions in excess of tax basis earnings and profits, if any, are reported in the Fund’s financial statements as a return of capital.

Capital accounts within financial statements are adjusted for permanent book/tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book/tax differences will reverse in a subsequent period. Permanent book/tax differences are primarily  attributable to short-term distributions received from underlying funds.

3. Investment advisory and other agreements

Advisory fees

The Trust has entered into an Investment Advisory Agreement with the Adviser. The Adviser is responsible for managing the corporate and business affairs of the Trust and for selecting and compensating subad-visers to handle the investment of the assets of the Portfolio, subject to the supervision of the Board of Trustees. Under the Advisory Agreement the Portfolio pays the Adviser a management fee that has two components: (a) a fee on assets invested in the funds of the Trust or JHF II (Fund Assets) and (b) a fee on investments in other affiliated Funds of the John Hancock complex and assets invested in unaffiliated funds (Other Assets). The Portfolio pays a monthly management fee to the Adviser equivalent, on an annual basis, to the sum of: (a) 0.05% of the first $500,000,000 of the Portfolio’s Fund Assets, (b) 0.04% of the Portfolio’s Fund Assets in excess of $500,000,000, (c) 0.50% of the first $500,000,000 of the Portfolio’s Other Assets and (d) 0.49% of the Portfolio’s Other Assets in excess of $500,000,000. The Portfolio is not responsible for payment of the subadvisory fees.

MFC Global Investment Management (U.S.A.) Limited acts as subadviser to the Portfolio. Deutsche Investment Management Americas, Inc. serves as subadviser consultant.

The investment management fees incurred for the year ended February 29, 2008, were equivalent to an annual effective rate of 0.13% of the Fund’s average daily net assets.

Expense reimbursements

The Adviser has contractually agreed to reimburse or limit certain Fund level expenses to 0.13% of the Fund’s average annual net assets which are allocated pro rata to all share classes. This agreement excludes taxes, portfolio brokerage commissions, interest, Rule 12b-1 fees, transfer agency fees, blue sky fees, printing and postage and litigation and indemnification expenses and other extraordinary expenses not

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incurred in the ordinary course of the Fund’s business. In addition, fees incurred under any agreement or plans of the Fund dealing with services for the shareholders and others with beneficial interest in shares of the Fund, are excluded.

In addition, the Adviser has agreed to reimburse or limit certain expenses for each share class. This agreement excludes taxes, portfolio brokerage commissions, interest and litigation and indemnification expenses and other extraordinary expenses not incurred in the ordinary course of the Fund’s business. In addition, fees incurred under any agreement or plans of the Fund dealing with services for the shareholders and others with beneficial interest in shares of the Fund, are excluded. The reimbursements and limits are such that these expenses will not exceed 0.63% for Class A shares, 1.33% for Class B, 1.33% for Class C and 0.18% for Class I. Accordingly, the expense reductions or reimbursements related to this agreement were $134,448, $33,156, $52,397 and $46,855 for Class A, Class B, Class C and Class I, respectively for the year ended February 29, 2008. The expense reimbursements and limits will continue in effect until June 30, 2008 and thereafter until termina ted by the Adviser on notice to the Trust.

Fund administration fees

Pursuant to the Advisory Agreement, the Portfolio reimburses the Adviser for all expenses associated with providing the administrative, financial, legal, accounting and recordkeeping services of the Portfolio, including the preparation of all tax returns, annual, semiannual and periodic reports to shareholders and the preparation of all regulatory reports. These expenses are allocated based on the relative share of net assets of the class at the time the expense was incurred.

The fund administration fees incurred for the year ended February 29, 2008, were $9,769 with an annual effective rate of 0.03% of the Portfolio’s average daily net assets.

Distribution and shareholder servicing fees

The Trust has a Distribution Agreement with the Distributor. The Portfolio has adopted Distribution Plans with respect to Class A,  Class B and Class C, pursuant to Rule 12b-1 under the 1940 Act, to pay the Distributor for the services it provides as distributor of shares of the Portfolios. Accordingly, the Portfolio makes monthly payments to the Distributor at an annual rate not to exceed 0.30%, 1.00% and 1.00% of the average daily net assets of Class A, Class B and Class C, respectively. A maximum of 0.25% of such payments may be service fees, as defined by the Conduct Rules of the Financial Industry Regulatory Authority (formerly, National Association of Securities Dealers). Under the Conduct Rules, curtailment of a portion of the Portfolio’s 12b-1 payments could occur under certain circumstances.

Sales charges

Class A shares are assessed up-front sales charges of up to 5.00% of net asset value of such shares. During the year ended February 29, 2008, the Fund was informed that the Distributor received net up-front sales charges of $276,419 with regard to sales of Class A shares. Of this amount, $44,955 was retained and used for printing prospectuses, advertising, sales literature and other purposes; $230,352 was paid as sales commissions to unrelated broker-dealers; and $1,112 was paid as sales commissions to sales personnel of Signator Investors, Inc. (Signator Investors), a related broker-dealer, an indirect subsidiary of MFC.

Class B shares that are redeemed within six years of purchase are subject to a contingent deferred sales charge (CDSC) at declining rates, beginning at 5.00% of the lesser of the current market value at the time of redemption or the original purchase cost of the shares being redeemed. Class C shares that are redeemed within one year of purchase are subject to a CDSC at a rate of 1.00% of the lesser of the current market value at the time of redemption or the original purchase cost of the shares being redeemed. Proceeds from the CDSCs are paid to the Distributor and are used, in whole or in part, to defray its expenses for providing distribution-related services to the Fund in connection with the sale of Class B and Class C shares. During the year ended February 29, 2008, CDSCs received by

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Distributor amounted to $2,387 for Class B shares and $3,938 for Class C shares.

Transfer agent fees

The Portfolio has a Transfer Agency Agreement with John Hancock Signature Services, Inc. (Signature Services), an indirect subsidiary of MFC. For Class A, Class B, Class C and Class I shares, the Portfolio pays a monthly transfer agent fee at an annual rate of 0.05% of each class’s average daily net assets, plus a fee based on the number of shareholder accounts and reimbursement for certain out-of-pocket expenses. Expenses not directly attributable to a particular class of shares are aggregated and allocated to each class on the basis of its relative net asset value. The Fund pays a monthly fee which is based on an annual rate of $15.00 for each Class A shareholder account, $17.50 for each Class B shareholder account and $16.50 for each Class C shareholder account.

Signature Services has agreed to limit the transfer agent fees so that such fees do not exceed 0.30% annually of Class A, Class B, Class C and Class I share average daily net assets. This agreement is effective until December 31, 2008. Signature Services reserves the right to terminate this limitation in the future. There were no transfer agent fee reductions for Class A, Class B, Class C and Class I shares, respectively, during the year ended February 29, 2008.

In May 2007, the Portfolio began receiving earnings credits from its transfer agent as a result of uninvested cash balances. These credits are used to reduce a portion of the Portfolio’s transfer agent fees and out-of-pocket expenses. During the year ended February 29, 2008, the Portfolio’s transfer agent fees and out-of-pocket expenses were reduced by $660 for transfer agent credits earned.

Class level expenses for the year ended February 29, 2008, were as follows:

	Distribution and	Transfer	Blue	Printing and
Share class	service fees	agent fees	sky fees	postage fees
Class A	$76,736	$26,626	$27,166	$11,610
Class B	12,374	3,748	26,211	640
Class C	53,511	11,091	27,635	2,467
Class I	—	358	43,199	650
Total	$142,621	$41,823	$124,211	$15,367

4. Trustees’ fees

The Trust compensates each Trustee who is not an employee of the Adviser or its affiliates. Total Trustees’ expenses are allocated to the Portfolio based on its average daily net asset value.

5. Line of credit

The Portfolio has entered into an agreement which enables them to participate in a $100 million unsecured committed line of credit with State Street Corporation. Borrowings will be made solely to temporarily finance the repurchase of capital shares. Interest is charged to the Portfolio based on its borrowings at a rate per annum equal to the Federal Funds rate plus 0.50% . In addition, a commitment fee of 0.05% per annum, payable at the end of each calendar quarter, based on the average daily-unused portion of the line of credit, is charged to the Portfolio on a prorated basis based on average net assets. Effective October 15, 2007, the commitment fee was changed from 0.07% to 0.05% . For the year ended February 29, 2008, there were no borrowings under the line of credit.

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6. Fund share transactions

Share activities for the Portfolio for the period ended February 28, 2007, and the year ended February 29, 2008, were as follows:

	Period ended 2-28-071		Year ended 2-29-08
	Shares	Amount	Shares	Amount
Class A shares
Sold	326,619	$3,320,543	3,069,699	$32,165,731
Distributions reinvested	—	—	161,717	1,625,253
Repurchased	—	—	(371,009)	(3,794,178)
Net increase (decrease)	326,619	$3,320,543	2,860,407	$29,996,806
Class B shares
Sold	19,756	$198,648	181,757	$1,935,091
Distributions reinvested	—	—	6,812	68,388
Repurchased	(27)	(277)	(26,915)	(281,028)
Net increase (decrease)	19,729	$198,371	161,654	$1,722,451
Class C shares
Sold	91,833	$927,133	814,878	$8,637,166
Distributions reinvested	—	—	34,010	341,797
Repurchased	—	—	(69,886)	(711,703)
Net increase (decrease)	91,833	$927,133	779,002	$8,267,260
Class I shares
Sold	20,460	$205,000	94,013	$985,183
Distributions reinvested	—	—	4,530	45,522
Repurchased	—	—	(29,904)	(292,658)
Net increase (decrease)	20,460	$205,000	68,639	$738,047
Net increase (decrease)	458,641	$4,651,047	3,869,702	$40,724,564
1Period from 12-29-06 (commencement of operations) to 2-28-07.

7. Purchases and sales of securities

Purchases and proceeds from sales or maturities of securities, other than short-term securities and obligations of the U.S. government, during the year ended February 29, 2008, aggregated $49,948,885 and $7,660,691, respectively.

8. Investment in affiliated underlying funds

The Portfolio invests primarily in affiliated underlying funds that are managed by affiliates of the Adviser. The Portfolio does not invest in affiliated underlying funds for the purpose of exercising management or control; however, the Portfolio’s investments may represent a significant portion of each underlying fund’s net assets. A summary of the Portfolio’s investments in affiliated funds during the year ended February 29, 2008, is set forth below:

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					Capital gain
	Beginning			Ending	distribution
Affiliate —	share	Shares	Shares	share	from under-	Dividend	Sale	Ending
Class NAV	amount	purchased	sold	amount	lying Funds	income	proceeds	value
JHF Greater China
Opportunities Fund	6,802	51,734	22,030	36,506	$46,673	$6,827	$668,054	$799,111
JHF International
Classic Value Fund	55,898	686,357	35,836	706,419	158,150	120,035	354,009	6,216,492
JHF II Emerging
Markets Value Fund	—	221,506	11,925	209,581	11,871	11,140	136,440	2,332,641
JHF II International
Opportunities Fund	50,726	528,775	51,032	528,469	1,080,868	115,452	978,898	9,105,512
JHF II International
Small Company Fund	93,498	967,174	389,192	671,480	588,363	102,924	4,225,435	6,459,635
JHF II International
Value Fund	41,799	502,619	35,044	509,374	438,664	163,468	648,807	8,689,921
JHF III International
Growth Fund	27,268	326,585	26,747	327,106	490,137	88,808	649,049	7,471,097

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Auditors’ report

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of John Hancock Funds III and Shareholders of John Hancock International Allocation Portfolio,

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of John Hancock International Allocation Portfolio (the Portfolio) at February 29, 2008, and the results of its operations, the changes in its net assets and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Portfolio’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of investments at February 29, 2008 by correspondence with the transfer agent, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
Boston, Massachusetts
April 18, 2008

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Tax information

Unaudited

For federal income tax purposes, the following information is furnished with respect to the distributions of the Fund, if any, paid during its taxable year ended February 29, 2008.

The Fund has designated distributions to shareholders of $52,409 as a long-term capital gain dividend. With respect to the ordinary dividends paid by the Fund for the fiscal year ended February 29, 2008, 5.67% of the dividends qualifies for the corporate dividends-received deduction.

The Fund hereby designates the maximum amount allowable of its net taxable income as qualified dividend income as provided in the Jobs and Growth Tax Relief Reconciliation Act of 2003. This amount will be reflected on Form 1099-DIV for the calendar year 2008.

Shareholders will be mailed a 2008 U.S. Treasury Department Form 1099-DIV in January 2009. This will reflect the total of all distributions that are taxable for calendar year 2008.

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Trustees and Officers

This chart provides information about the Trustees and Officers who oversee your John Hancock fund. Officers elected by the Trustees manage the day-to-day operations of the Fund and execute policies formulated by the Trustees.

Independent Trustees
Name, Year of Birth		Number of
Position(s) held with Fund	Trustee	John Hancock
Principal occupation(s) and other	of Fund	funds overseen
directorships during past 5 years	since1	by Trustee
James F. Carlin, Born: 1940	2006	55
Chairman (since December 2007); Director and Treasurer, Alpha Analytical Laboratories, Inc. (chemical
analysis) (since 1985); Part Owner and Treasurer, Lawrence Carlin Insurance Agency, Inc. (since 1995);
Part Owner and Vice President, Mone Lawrence Carlin Insurance Agency, Inc. (until 2005); Chairman
and Chief Executive Officer, Carlin Consolidated, Inc. (management/investments) (since 1987); Trustee,
Massachusetts Health and Education Tax Exempt Trust (1993–2003).
William H. Cunningham, Born: 1944	2006	55
Professor, University of Texas at Austin (since 1971); former Chancellor, University of Texas System and
former President, University of Texas at Austin (until 2001); Chairman and Chief Executive Officer, IBT
Technologies (until 2001); Director of the following: Hicks Acquisition Company I, Inc. (since 2007);
Hire.com (until 2004), STC Broadcasting, Inc. and Sunrise Television Corp. (until 2001), Symtx, Inc.
(electronic manufacturing) (since 2001), Adorno/Rogers Technology, Inc. (until 2004), Pinnacle
Foods Corporation (until 2003), rateGenius (until 2003), Lincoln National Corporation (insurance)
(since 2006), Jefferson-Pilot Corporation (diversified life insurance company) (until 2006), New
Century Equity Holdings (formerly Billing Concepts) (until 2001), eCertain (until 2001), ClassMap.com
(until 2001), Agile Ventures (until 2001), AskRed.com (until 2001), Southwest Airlines (since 2000),
Introgen (manufacturer of biopharmaceuticals) (since 2000) and Viasystems Group, Inc. (electronic
manufacturer) (until 2003); Advisory Director, Interactive Bridge, Inc. (college fundraising) (until 2001);
Advisory Director, Q Investments (until 2003); Advisory Director, JPMorgan Chase Bank (formerly Texas
Commerce Bank–Austin), LIN Television (until 2008), WilTel Communications (until 2003) and Hayes
Lemmerz International, Inc. (diversified automotive parts supply company) (since 2003).
Charles L. Ladner,2 Born: 1938	2006	55
Chairman and Trustee, Dunwoody Village, Inc. (retirement services) (until 2003); Senior Vice President
and Chief Financial Officer, UGI Corporation (public utility holding company) (retired 1998); Vice
President and Director, AmeriGas, Inc. (retired 1998); Director, AmeriGas Partners, L.P. (gas distribution)
(until 1997); Director, EnergyNorth, Inc. (until 1997); Director, Parks and History Association (until 2005).
John A. Moore,2 Born: 1939	2006	55
President and Chief Executive Officer, Institute for Evaluating Health Risks (nonprofit institution)
(until 2001); Senior Scientist, Sciences International (health research) (until 2003); Former Assistant
Administrator and Deputy Administrator, Environmental Protection Agency; Principal, Hollyhouse
(consulting) (since 2000); Director, CIIT Center for Health Science Research (nonprofit research)
(until 2007).

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Independent Trustees (continued)
Name, Year of Birth		Number of
Position(s) held with Fund	Trustee	John Hancock
Principal occupation(s) and other	of Fund	funds overseen
directorships during past 5 years	since1	by Trustee
Patti McGill Peterson,2 Born: 1943	2006	55
Senior Associate, Institute for Higher Education Policy (since 2007); Executive Director, Council for
International Exchange of Scholars and Vice President, Institute of International Education (until 2007);
Senior Fellow, Cornell Institute of Public Affairs, Cornell University, Ithaca, NY (until 1998); Former
President, Wells College, Aurora, NY, and St. Lawrence University, Canton, NY; Director, Niagara
Mohawk Power Corporation (until 2003); Director, Ford Foundation, International Fellowships Program
(since 2002); Director, Lois Roth Endowment (since 2002); Director, Council for International Educational
Exchange (since 2003).
Steven R. Pruchansky, Born: 1944	2006	55
Chairman and Chief Executive Officer, Greenscapes of Southwest Florida, Inc. (since 2000); Director and
President, Greenscapes of Southwest Florida, Inc. (until 2000); Managing Director, JonJames, LLC (real
estate) (since 2000); Director, First Signature Bank & Trust Company (until 1991); Director, Mast Realty
Trust (until 1994); President, Maxwell Building Corp. (until 1991).
Non-Independent Trustees3
Name, Year of Birth		Number of
Position(s) held with Fund	Trustee	John Hancock
Principal occupation(s) and other	of Fund	funds overseen
directorships during past 5 years	since1	by Trustee
James R. Boyle, Born: 1959	2006	265
Executive Vice President, Manulife Financial Corporation (since 1999); President, John Hancock Variable
Life Insurance Company (since March 2007); Executive Vice President, John Hancock Life Insurance
Company (since 2004); Chairman and Director, John Hancock Advisers, LLC (the Adviser), John Hancock
Funds, LLC and The Berkeley Financial Group, LLC (The Berkeley Group) (holding company) (since 2005);
Senior Vice President, The Manufacturers Life Insurance Company (U.S.A.) (until 2004).

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Principal officers who are not Trustees
Name, Year of Birth
Position(s) held with Fund	Officer
Principal occupation(s) and other	of Fund
directorships during past 5 years	since
Keith F. Hartstein, Born: 1956	2006
President and Chief Executive Officer
Senior Vice President, Manulife Financial Corporation (since 2004); Director, President and Chief
Executive Officer, the Adviser, The Berkeley Group and John Hancock Funds, LLC (since 2005); Director,
MFC Global Investment Management (U.S.), LLC (MFC Global (U.S.)) (since 2005); Director, John
Hancock Signature Services, Inc. (since 2005); President and Chief Executive Officer, John Hancock
Investment Management Services, LLC (since 2006); President and Chief Executive Officer, John Hancock
Funds, John Hancock Funds II, John Hancock Funds III and John Hancock Trust (since 2005); Director,
Chairman and President, NM Capital Management, Inc. (since 2005); Member, Investment Company
Institute Sales Force Marketing Committee (since 2003); President and Chief Executive Officer, MFC
Global (U.S.) (2005–2006); Executive Vice President, John Hancock Funds, LLC (until 2005).
Thomas M. Kinzler, Born: 1955	2006
Secretary and Chief Legal Officer
Vice President and Counsel, John Hancock Life Insurance Company (U.S.A.) (since 2006); Secretary and
Chief Legal Officer, John Hancock Funds and John Hancock Funds II (since 2006); Chief Legal Officer
and Assistant Secretary, John Hancock Trust (since 2006); Vice President and Associate General Counsel,
Massachusetts Mutual Life Insurance Company (1999–2006); Secretary and Chief Legal Counsel, MML
Series Investment Fund (2000–2006); Secretary and Chief Legal Counsel, MassMutual Institutional Funds
(2000–2004); Secretary and Chief Legal Counsel, MassMutual Select Funds and MassMutual Premier
Funds (2004–2006).
Francis V. Knox, Jr., Born: 1947	2006
Chief Compliance Officer
Vice President and Chief Compliance Officer, John Hancock Investment Management Services, LLC,
the Adviser and MFC Global (U.S.) (since 2005); Vice President and Chief Compliance Officer, John
Hancock Funds, John Hancock Funds II, John Hancock Funds III and John Hancock Trust (since 2005);
Vice President and Assistant Treasurer, Fidelity Group of Funds (until 2004); Vice President and Ethics &
Compliance Officer, Fidelity Investments (until 2001).
Charles A. Rizzo, Born: 1957	2007
Chief Financial Officer
Chief Financial Officer, John Hancock Funds, John Hancock Funds II, John Hancock Funds III and John
Hancock Trust (since June 2007); Assistant Treasurer, Goldman Sachs Mutual Fund Complex (regis-
tered investment companies) (2005–June 2007); Vice President, Goldman Sachs (2005–June 2007);
Managing Director and Treasurer of Scudder Funds, Deutsche Asset Management (2003–2005);
Director, Tax and Financial Reporting, Deutsche Asset Management (2002–2003); Vice President and
Treasurer, Deutsche Global Fund Services (Deutsche Registered Investment Companies) (1999–2002).
Gordon M. Shone, Born: 1956	2006
Treasurer
Senior Vice President, John Hancock Life Insurance Company (U.S.A.) (since 2001); Treasurer, John
Hancock Funds (since 2006), John Hancock Funds II, John Hancock Funds III and John Hancock Trust
(since 2005); Vice President and Chief Financial Officer, John Hancock Trust (2003–2005); Vice President,
John Hancock Investment Management Services, Inc., John Hancock Advisers, LLC (since 2006) and The
Manufacturers Life Insurance Company (U.S.A.) (1998–2000).

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Principal officers who are not Trustees (continued)
Name, Year of Birth
Position(s) held with Fund	Officer
Principal occupation(s) and other	of Fund
directorships during past 5 years	since
John G. Vrysen, Born: 1955	2006
Chief Operating Officer
Senior Vice President, Manulife Financial Corporation (since 2006); Director, Executive Vice President
and Chief Operating Officer, the Adviser, The Berkeley Group and John Hancock Funds, LLC (since
June 2007); Executive Vice President and Chief Operating Officer, John Hancock Investment
Management Services, LLC (since December 2007); Chief Operating Officer, John Hancock Funds,
John Hancock Funds II, John Hancock Funds III and John Hancock Trust (since June 2007); Director,
Executive Vice President and Chief Financial Officer, the Adviser, The Berkeley Group and John Hancock
Funds, LLC (2005–2007); Executive Vice President and Chief Financial Officer, John Hancock Investment
Management Services, LLC (2005–2007); Executive Vice President and Chief Financial Officer, MFC
Global (U.S.) (2005 until August 2007); Director, John Hancock Signature Services, Inc. (since 2005);
Chief Financial Officer, John Hancock Funds, John Hancock Funds II, John Hancock Funds III and John
Hancock Trust (2005 until June 2007); Vice President and General Manager, John Hancock Fixed
Annuities, U.S. Wealth Management (2004–2005); Vice President, Operations, Manulife Wood Logan
(2000–2004).

The business address for all Trustees and Officers is 601 Congress Street, Boston, Massachusetts 02210-2805.

The Statement of Additional Information of the Fund includes additional information about members of the Board of Trustees of the Fund and is available without charge, upon request, by calling 1-800-225-5291.

¹ Each Trustee serves until resignation, retirement age or until his or her successor is elected.

² Member of Audit and Compliance Committee.

³ Non-Independent Trustee holds positions with the Fund’s investment adviser, underwriter and certain other affiliates.

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For more information

The Fund’s proxy voting policies, procedures and records are available without charge, upon request:

By phone	On the Fund’s Web site	On the SEC’s Web site
1-800-225-5291	www.jhfunds.com/proxy	www.sec.gov
Investment adviser	Custodian	Legal counsel
John Hancock Advisers, LLC	State Street Bank & Trust Co.	Kirkpatrick & Lockhart
601 Congress Street	2 Avenue de Lafayette	Preston Gates Ellis LLP
Boston, MA 02210-2805	Boston, MA 02111	One Lincoln Street
		Boston, MA 02111-2950
Subadviser	Transfer agent
MFC Global Investment	John Hancock Signature	Independent registered
Management (U.S.A.) Limited	Services, Inc.	public accounting firm
200 Bloor Street East	P.O. Box 9510	PricewaterhouseCoopers LLP
Toronto, Ontario, Canada	Portsmouth, NH 03802-9510	125 High Street
M4W 1E5		Boston, MA 02110
Principal distributor
John Hancock Funds, LLC
601 Congress Street
Boston, MA 02210-2805

How to contact us
Internet	www.jhfunds.com
Mail	Regular mail:	Express mail:
	John Hancock Signature	John Hancock Signature
	Services, Inc.	Services, Inc.
	P.O. Box 9510	Mutual Fund Image Operations
	Portsmouth, NH 03802-9510	164 Corporate Drive
		Portsmouth, NH 03801
Phone	Customer service representatives	1-800-225-5291
	EASI-Line	1-800-338-8080
	TDD line	1-800-554-6713

A listing of month-end portfolio holdings is available on our Web site, www.jhfunds.com. A more detailed portfolio holdings summary is available on a quarterly basis 60 days after the fiscal quarter on our Web site or upon request by calling 1-800-225-5291, or on the SEC’s Web site, www.sec.gov.

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1-800-225-5291
1-800-554-6713 TDD
1-800-338-8080 EASI-Line
www.jhfunds.com

Now available:electronicdelivery

www.jhfunds.com/edelivery

This report is for the information of the shareholders of John Hancock International Allocation Portfolio.	3180A	2/08
It is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus.		4/08

Discussion of Fund performance

By Epoch Investment Partners, Inc.

Global stock markets experienced sharp volatility during the 12 months ended February 29, 2008, when many U.S. and foreign stock indexes reached all-time highs before being brought down by the bursting U.S. housing bubble and related credit crunch. But despite widespread speculation that the world’s largest economy was headed for recession, economies in Europe and Asia appeared to be relatively healthy. Better growth and a slumping dollar made for better performance on overseas investments.

“Global stock markets experienced
sharp volatility during the 12
months ended February 29, 2008…”

For the 12 months ended February 29, 2008, John Hancock Global Shareholder Yield Fund’s Class A, Class B, Class C, Class I and Class R1 shares posted total returns of –1.84%, –2.54%, –2.54%, –1.43% and –2.01%, respectively, at net asset value. That compares with the –0.21% return of the S&P/Citigroup Broad Market Index–World Equity Index and the 0.94% average return of the world stock funds tracked by Morningstar, Inc.

Many of the leading contributors to performance came from the utility and telecommunication services sectors, including Terna SpA and Fortum Corp., as well as France Telecom SA, Belgacom SA and Far EasTone Telecommunications, Company, Ltd. Another group of key contributors came from the consumer staples sector, as the portfolio benefited from holdings in multinational European and U.S. companies with exposure to rapidly growing emerging-market economies. The portfolio also benefited from an underweight position and stock selection among financials shares, which were weighed down by worry about exposure to subprime loans.

The leading detractors from Fund performance were in the economically sensitive consumer discretionary sector, which suffered from a significant change in macroeconimc views and downward revisions to earnings estimates. In that environment, Idearc, Inc., a telephone directory business, and GateHouse Media, Inc. a local newspaper publishing concern, led detractors. As a result, we cut our exposure to U.S.-based discretionary stocks, preferring to maintain our discretionary holdings in companies based in growing overseas economies.

This commentary reflects the views of the portfolio managers through the end of the Fund’s period discussed in this report. The managers’ statements reflect their own opinions. As such, they are in no way guarantees of future events and are not intended to be used as investment advice or a recommendation regarding any specific security. They are also subject to change at any time as market and other conditions warrant.

Global Shareholder Yield Fund | Annual report

6

A look at performance

For the periods ended February 29, 2008

		Average annual returns				Cumulative total returns
		with maximum sales charge (POP)				with maximum sales charge (POP)
	Inception				Since				Since
Class	date	1-year	5-year	10-year	inception	1-year	5-year	10-year	inception
A	3-1-07	–6.78%	—	—	–6.78%	–6.78%	—	—	–6.78%
B	3-1-07	–7.30	—	—	–7.30	–7.30	—	—	–7.30
C	3-1-07	–3.49	—	—	–3.49	–3.49	—	—	–3.49
I 1	3-1-07	–1.43	—	—	–1.43	–1.43	—	—	–1.43
R1 1	3-1-07	–2.01	—	—	–2.01	–2.01	—	—	–2.01

Performance figures assume all distributions are reinvested. Public offering price (POP) figures reflect maximum sales charge on Class A shares of 5%, and the applicable contingent deferred sales charge (CDSC) on Class B and Class C shares. The Class B shares' CDSC declines annually between years 1 to 6 according to the following schedule: 5, 4, 3, 3, 2, 1%. No sales charge will be assessed after the sixth year. Class C shares held for less than one year are subject to a 1% CDSC. Sales charge is not applicable for Class I and Class R1 shares.

The expense ratios of the Fund, both net (including any fee waivers or expense limitations) and gross (excluding any fee waivers or expense limitations), are set forth according to the most recent publicly available prospectuses for the Fund and may differ from the expense ratios disclosed in the Financial Highlights tables in this report. The waivers and expense limitations are contractual at least until 02-29-08. The net expenses are as follows: Class A — 1.55%, Class B — 2.25%, Class C — 2.25%, Class I — 1.10%, Class R1 — 1.85% . Had the fee waivers and expense limitations not been in place, the gross expenses would be as follows: Class A — 1.65%, Class B — 2.58%, Class C — 2.41%, Class I — 1.26%, Class R1 — 2.53% .

The returns reflect past results and should not be considered indicative of future performance. The return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, the Fund's current performance may be higher or lower than the performance shown. For performance data current to the most recent month end, please call 1-800-225-5291 or visit the Fund's Web site at www.jhfunds.com.

The performance table above and the chart on the next page do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

The Fund's performance results reflect any applicable expense reductions, without which the expenses increase and results would have been less favorable.

Performance is calculated with an opening price (prior day's close) on the inception date.

¹ For certain types of investors as described in the Fund's Class I and Class R1 share prospectuses.

Annual report | Global Shareholder Yield Fund

7

A look at performance

Growth of $10,000

This chart shows what happened to a hypothetical $10,000 investment in Global Shareholder Yield Fund Class A shares for the period indicated. For comparison, we've shown the same investment in the S&P 500/Citigroup BMI World Index.

			With maximum
Class	Period beginning	Without sales charge	sales charge	Index
B	3-1-07	$9,746	$9,270	$9,979
C	3-1-07	9,746	9,651	9,979
I 2	3-1-07	9,857	9,857	9,979
R1 2	3-1-07	9,799	9,799	9,979

Assuming all distributions were reinvested for the period indicated, the table above shows the value of a $10,000 investment in the fund's Class B, Class C , Class I and Class R1 shares, respectively, as of February 29, 2008. Performance of the classes will vary based on the difference in sales charges paid by shareholders investing in the different classes and the fee structure of those classes.

S&P 500/Citigroup BMI World is an unmanaged subset of the BMI Global Index that reflects the stock markets of over 30 countries and over 9,000 securities with values expressed in U.S. dollars. The BMI World Index represents the developed market portion of the broader index.

It is not possible to invest directly in an index. Index figures do not reflect sales charges, which would have resulted in lower values if they did.

¹ NAV represents net asset value and POP represents public offering price.

² For certain types of investors as described in the Fund's Class I and Class R1 share prospectuses.

Global Shareholder Yield Fund | Annual report

8

Your expenses

These examples are intended to help you understand your ongoing operating expenses.

Understanding fund expenses

As a shareholder of the Fund, you incur two types of costs:

■ Transaction costs which include sales charges (loads) on purchases or redemptions (varies by share class), minimum account fee charge, etc.

■ Ongoing operating expenses including management fees, distribution and service fees (if applicable), and other fund expenses.

We are going to present only your ongoing operating expenses here.

Actual expenses/actual returns

This example is intended to provide information about your fund’s actual ongoing operating expenses, and is based on your fund’s actual return. It assumes an account value of $1,000.00 on September 1, 2007, with the same investment held until February 29, 2008.

	Account value	Ending value	Expenses paid during
	on 9-1-07	on 2-29-08	period on 2-29-081
Class A	$1,000.00	$930.38	$7.30
Class B	1,000.00	926.82	10.78
Class C	1,000.00	926.82	10.78
Class I	1,000.00	931.46	5.28
Class R1	1,000.00	929.67	7.92

Together with the value of your account, you may use this information to estimate the operating expenses that you paid over the period. Simply divide your account value at February 29, 2008, by $1,000.00, then multiply it by the “expenses paid” for your share class from the table above. For example, for an account value of $8,600.00, the operating expenses should be calculated as follows:

Annual report | Global Shareholder Yield Fund

9

Your expenses

Hypothetical example for comparison purposes

This table allows you to compare your fund’s ongoing operating expenses with those of any other fund. It provides an example of the Fund’s hypothetical account values and hypothetical expenses based on each class’s actual expense ratio and an assumed 5% annualized return before expenses (which is not your fund’s actual return). It assumes an account value of $1,000.00 on September 1, 2007, with the same investment held until February 29, 2008. Look in any other fund shareholder report to find its hypothetical example and you will be able to compare these expenses.

	Account value	Ending value	Expenses paid during
	on 9-1-07	on 2-29-08	period on 2-29-081
Class A	$1,000.00	$1,017.30	$7.62
Class B	1,000.00	1,013.67	11.27
Class C	1,000.00	1,013.67	11.27
Class I	1,000.00	1,019.39	5.52
Class R1	1,000.00	1,016.66	8.27

Remember, these examples do not include any transaction costs, such as sales charges; therefore, these examples will not help you to determine the relative total costs of owning different funds. If transaction costs were included, your expenses would have been higher. See the prospectus for details regarding transaction costs.

¹ Expenses are equal to the Fund's annualized expense ratio of 1.52%, 2.25%, 2.25%, 1.10% and 1.65% for Class A, Class B, Class C, Class I and Class R1, respectively, multiplied by the average account value over the period, multiplied by the number of days in most recent fiscal half year/366 (to reflect the one-half year period).

Global Shareholder Yield Fund | Annual report

10

Portfolio summary

Top 10 holdings 1
Reynolds American, Inc.	2.2%	E. I. Du Pont de Nemours & Company	2.1%
Nestle SA	2.2%	Duke Energy Corp.	2.0%
France Telecom SA	2.1%	Enel SpA	2.0%
Terna SpA	2.1%	StatoilHydro ASA	1.9%
UST, Inc.	2.1%	Windstream Corp.	1.9%
Sector distribution 1
Communications	30%	Industrial	5%
Consumer non-cyclical	16%	Diversified	1%
Utilities	14%	Technology	1%
Energy	11%	Consumer cyclical	0.5%
Financial	10%	Other	6.5%
Basic materials	5%

¹ As a percentage of net assets on February 29, 2008.

Annual report | Global Shareholder Yield Fund

11

F I N A N C I A L   S T A T E M E N T S

Fund’s investments

Securities owned by the Fund on 2-29-08

This schedule is divided into two main categories: common stocks and repurchase agreements. Common stocks are further broken down by country. Repurchase agreements, which represent the Fund’s cash position, are listed last.

Issuer	Shares	Value
Common stocks 91.75%		$33,352,374
(Cost $36,009,474)
Australia 5.70%		2,072,857
APN News & Media, Ltd.	97,500	446,928
Australia and New Zealand Banking Group, Ltd.	13,900	280,493
John Fairfax Holdings, Ltd.	146,700	524,593
NRMA Insurance Group, Ltd.	80,800	280,513
St. George Bank, Ltd.	17,300	377,776
Westpac Banking Corp. , Ltd.	7,600	162,554
Austria 0.90%		327,984
Telekom Austria AG	14,500	327,984
Belgium 3.15%		1,145,677
Belgacom SA	13,920	666,657
InBev	5,300	479,020
Canada 3.38%		1,229,855
Manitoba Telecom Services, Inc.	15,200	638,732
TransAlta Corp.	4,400	156,956
Yellow Pages Income Fund	39,900	434,167
Finland 0.80%		290,181
Fortum Corp. Oyj	6,950	290,181
France 5.13%		1,864,124
France Telecom SA	23,100	775,446
PagesJaunes Groupe SA	22,800	424,088
Total SA	3,000	225,912
Vivendi SA	11,100	438,678
Germany 2.21%		803,763
BASF AG	2,800	356,270
RWE AG	3,700	447,493
Hong Kong 0.16%		57,152
Vitasoy International Holdings, Ltd.	138,000	57,152
Ireland 2.03%		736,322
C&C Group PLC - London	4,300	28,741
C&C Group PLC	66,200	450,809
Independent News & Media PLC	85,200	256,772

See notes to financial statements

Global Shareholder Yield Fund | Annual report

12

F I N A N C I A L   S T A T E M E N T S

Issuer	Shares	Value
Italy 7.39%		$2,685,458
Enel SpA	68,000	733,744
Eni SpA, SADR	6,300	434,259
Intesa Sanpaolo SpA	26,200	175,972
Mondadori (Arnoldo) Editore SpA	33,800	273,243
Telecom Italia SpA	121,900	303,920
Terna SpA	176,700	764,320
Malaysia 0.22%		80,359
British American Tobacco Malaysia BHD	6,000	80,359
Netherlands 0.41%		150,015
Wolters Kluwer NV	5,800	150,015
New Zealand 1.50%		544,212
Telecom Corp. of New Zealand, SADR	35,686	544,212
Norway 3.09%		1,122,366
Den Norske Bank ASA	13,700	200,398
StatoilHydro ASA, SADR	22,200	677,988
Veidekke ASA	27,400	243,980
Philippines 0.59%		212,850
Philippine Long Distance Telephone Company, SADR	3,000	212,850
Singapore 1.11%		401,975
Singapore Press Holdings, Ltd.	129,000	401,975
South Korea 0.50%		182,175
KT Corp. , SADR *	7,500	182,175
Spain 0.54%		196,769
Telefonica SA	6,800	196,769
Sweden 0.57%		207,428
Swedish Match AB	8,900	207,428
Switzerland 2.23%		811,390
Nestle SA	1,700	811,390
Taiwan 0.86%		312,791
Far EasTone Telecommunications Company, Ltd.	224,000	312,791
United Kingdom 7.15%		2,600,460
Barclays PLC	19,900	186,509
Diageo PLC, SADR	6,300	517,230
GKN PLC	32,900	171,435
Legal & General Group PLC	59,400	146,142
Lloyds TSB Group PLC	37,470	334,917
National Grid PLC	35,800	519,095
Tomkins PLC	99,800	334,611
Vodafone Group PLC	121,300	390,521
United States 42.13%		15,316,211
AllianceBernstein Holding LP *	10,100	626,705
Altria Group, Inc.	6,900	504,666

See notes to financial statements

Annual report | Global Shareholder Yield Fund

13

F I N A N C I A L   S T A T E M E N T S

Issuer	Shares	Value
United States (continued)
AT&T, Inc.	19,100	$665,253
Automatic Data Processing, Inc.	8,000	319,600
Ball Corp.	9,800	432,180
Bristol-Myers Squibb Company	19,300	436,373
CBS Corp. , Class B	7,600	173,432
Citizens Communications Company	61,900	664,806
ConocoPhillips	5,100	421,821
DaVita, Inc. *	3,400	168,742
Diamond Offshore Drilling, Inc.	3,300	398,739
Dow Chemical Company	4,800	180,912
Duke Energy Corp.	42,000	736,680
E. I. Du Pont de Nemours & Company	16,300	756,646
GateHouse Media, Inc.	22,830	143,144
General Electric Company	15,900	526,926
General Maritime Corp.	4,100	96,514
Great Plains Energy, Inc.	19,900	506,057
HCP, Inc. , REIT	2,000	58,360
Idearc, Inc.	39,300	189,426
Magellan Midstream Partners LP	7,900	342,149
ONEOK Partners LP	7,800	483,834
Packaging Corp. of America	23,000	524,170
Pfizer, Inc.	12,400	276,272
Progress Energy, Inc.	11,600	486,156
Reynolds American, Inc.	12,800	815,616
SCANA Corp.	2,960	112,095
Southern Copper Corp.	5,100	581,961
Spectra Energy Corp.	3,400	78,574
Teco Energy, Inc.	22,700	340,046
The Laclede Group, Inc.	3,800	129,770
The Southern Company	9,900	341,847
U. S. Bancorp	15,700	502,714
UST, Inc.	14,000	760,060
Ventas, Inc. , REIT	4,300	179,827
Verizon Communications, Inc.	14,600	530,272
Westar Energy, Inc.	6,600	150,018
Windstream Corp.	57,300	673,848

See notes to financial statements

Global Shareholder Yield Fund | Annual report

14

F I N A N C I A L   S T A T E M E N T S

	Principal
Issuer, description, maturity date	amount	Value
Repurchase agreements 7.14%		$2,596,000
(Cost $2,596,000)
Repurchase Agreement with State Street Corp. dated 2-29-08 at
2.35% to be repurchased at $2,596,508 on 3-3-08,
collateralized by $2,095,000 Federal Home Loan Mortgage Corp. ,
6.75%, due 3-15-31 (valued at $2,650,175, including interest)	$2,596,000	2,596,000
Total investments (cost $38,605,474)† 98.89%		$35,948,374
Other assets in excess of liabilities 1.11%		$405,296
Total net assets 100.00%		$36,353,670

The portfolio had the following five top industry concentrations as of February 29, 2008 (as a percentage of total net assets):

Telecommunications
equipment & services	15.81%
Electrical utilities	9.66%
Tobacco	6.51%
Food & beverages	6.45%
Energy	6.23%

Percentages are stated as a percent of net assets.

PLC Public Limited Company

REIT Real Estate Investment Trust

SADR Sponsored American Depositary Receipt

* Non-income producing.

† At February 29, 2008, the aggregate cost of investment securities for federal income tax purposes was $38,723,849. Net unrealized depreciation aggregated $2,775,475, of which $1,380,133 related to appreciated investment securities and $4,155,608 related to depreciated investment securities.

See notes to financial statements

Annual report | Global Shareholder Yield Fund

15

F I N A N C I A L   S T A T E M E N T S

Financial statements

Statement of assets and liabilities 2-29-08

This Statement of Assets and Liabilities is the Fund’s balance sheet. It shows the value of what the Fund owns, is due and owes. You’ll also find the net asset value and the maximum public offering price per share.

Assets
Investments, at value (cost $36,009,474)	$33,352,374
Repurchase agreement, at value (cost $2,596,000) (Note 2)	2,596,000
Total investments, at value (cost $38,605,474)	35,948,374
Cash	318
Foreign currency, at value (cost $23,721)	24,322
Receivable for investments sold	292,473
Receivable for fund shares sold	122,306
Dividends and interest receivable (net of tax)	113,404
Other assets	126
Total assets	36,501,323
Liabilities
Payable for investments purchased	76,881
Payable for fund shares repurchased	5,049
Payable to affiliates
Fund administration fees	97
Transfer agent fees	7,723
Distribution and service fees	438
Investment management fees	5,234
Trustees’ fees	56
Other payables and accrued expenses	52,175
Total liabilities	147,653
Net assets
Capital paid-in	$39,611,380
Undistributed net investment income	55,884
Accumulated undistributed net realized gain (loss) on investments and
foreign currency transactions	(658,777)
Net unrealized appreciation (depreciation) on investments and translation
of assets and liabilities in foreign currencies	(2,654,817)
Net assets	$36,353,670

See notes to financial statements

Global Shareholder Yield Fund | Annual report

16

F I N A N C I A L   S T A T E M E N T S

Statement of assets and liabilities (continued)

Net asset value per share
The Fund has an unlimited number of shares authorized with no par value.
Net asset value is calculated by dividing the net assets of each class of
shares by the number of outstanding shares in the class.
Class A
Net assets	$27,373,863
Shares outstanding	2,875,294
Net asset value and redemption price per share	$9.52
Class B 1
Net assets	$1,266,247
Shares outstanding	133,131
Net asset value and offering price per share	$9.51
Class C 1
Net assets	$4,584,769
Shares outstanding	481,904
Net asset value and offering price per share	$9.51
Class I
Net assets	$3,030,841
Shares outstanding	317,924
Net asset value, offering price and redemption price per share	$9.53
Class R1
Net assets	$97,950
Shares outstanding	10,293
Net asset value, offering price and redemption price per share	$9.52
Maximum public offering price per share
Class A (net asset value per share ÷ 95%) 2	$10.02

¹ Redemption price per share is equal to the net asset value less any applicable contingent deferred sales charge.

² On single retail sales of less than $50,000. On sales of $50,000 or more and on group sales the offering price is reduced.

See notes to financial statements

Annual report | Global Shareholder Yield Fund

17

F I N A N C I A L   S T A T E M E N T S

Statement of operations For the year ended 2-29-08

This 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.

Investment income
Dividends	$1,382,962
Interest	125,968
Less foreign taxes withheld	(67,854)
Total investment income	1,441,076
Expenses
Investment management fees (Note 3)	292,547
Distribution and service fees (Note 3)	112,324
Transfer agent fees (Note 3)	32,996
Fund administration fees (Note 3)	9,126
Blue sky fees (Note 3)	70,571
Audit and legal fees	36,777
Printing and postage fees (Note 3)	10,803
Custodian fees	45,986
Trustees’ fees (Note 4)	1,348
Registration and filing fees	13,716
Miscellaneous	352
Total expenses	626,546
Less expense reductions (Note 3)	(157,762)
Net expenses	468,784
Net investment income	972,292
Realized and unrealized gain (loss)
Net realized gain (loss) on
Investments in unaffiliated issuers	(556,827)
Foreign currency transactions	12,816
	(544,011)
Change in net unrealized appreciation (depreciation) of
Investments in unaffiliated issuers	(2,657,100)
Translation of assets and liabilities in foreign currencies	2,283
	(2,654,817)
Net realized and unrealized gain (loss)	(3,198,828)
Increase (decrease) in net assets from operations	($2,226,536)

See notes to financial statements

Global Shareholder Yield Fund | Annual report

18

F I N A N C I A L   S T A T E M E N T S

Statement of changes in net assets

This Statement of Changes in Net Assets show how the value of the Fund’s net assets has changed since inception. The difference reflects earnings less expenses, any investment gains and losses, distributions, if any, paid to shareholders and the net of Fund share transactions.

	Year
	ended
	2-29-08
Increase (decrease) in net assets
From operations
Net investment income	$972,292
Net realized gain (loss)	(544,011)
Change in net unrealized appreciation (depreciation)	(2,654,817)
Increase (decrease) in net assets resulting from operations	(2,226,536)
Distributions to shareholders
From net investment income
Class A	(758,310)
Class B	(25,168)
Class C	(74,029)
Class I	(83,716)
Class R1	(2,790)
From net realized gain
Class A	(76,015)
Class B	(3,843)
Class C	(12,123)
Class I	(9,685)
Class R1	(288)
Total distributions	(1,045,967)
From Fund share transactions (Note 6)	39,626,173
Total increase (decrease)	36,353,670
Net assets
Beginning of year	—
End of year	$36,353,670
Undistributed net investment income	$55,884

See notes to financial statements

Annual report | Global Shareholder Yield Fund

19

F I N A N C I A L   S T A T E M E N T S

Financial highlights

The Financial Highlights show how the Fund’s net asset value for a share has changed since inception.

CLASS A SHARES

Period ended	2-29-08 1
Per share operating performance
Net asset value, beginning of period	$10.00
Net investment income 2	0.35
Net realized and unrealized gain
(loss) on investments	(0.51)
Total from investment operations	(0.16)
Less distributions
From net investment income	(0.29)
From net realized gain	(0.03)
	(0.32)
Net asset value, end of period	$9.52
Total return3,4 (%)	(1.84)
Ratios and supplemental data
Net assets, end of period (in millions)	$27
Ratios (as a percentage of average net assets):
Expenses before reductions	1.79
Expenses net of fee waivers, if any	1.45
Expenses net of all fee waivers and credits	1.45
Net investment income	3.31
Portfolio turnover (%)	24

¹ Class A shares began operations on 3-1-07.

² Based on the average of the shares outstanding.

³ Assumes dividend reinvestment.

⁴ Total returns would have been lower had certain expenses not been reduced during the period shown.

See notes to financial statements

Global Shareholder Yield Fund | Annual report

20

F I N A N C I A L   S T A T E M E N T S

Financial highlights

CLASS B SHARES

Period ended	2-29-08 1
Per share operating performance
Net asset value, beginning of period	$10.00
Net investment income 2	0.22
Net realized and unrealized gain
(loss) on investments	(0.45)
Total from investment operations	(0.23)
Less distributions
From net investment income	(0.23)
From net realized gain	(0.03)
	(0.26)
Net asset value, end of period	$9.51
Total return3,4 (%)	(2.54)
Ratios and supplemental data
Net assets, end of period (in millions)	$1
Ratios (as a percentage of average net assets):
Expenses before reductions	3.89
Expenses net of fee waivers, if any	2.23
Expenses net of all fee waivers and credits	2.23
Net investment income	2.11
Portfolio turnover (%)	24

¹ Class B shares began operations on 3-1-07.

² Based on the average of the shares outstanding.

³ Assumes dividend reinvestment.

⁴ Total returns would have been lower had certain expenses not been reduced during the period shown.

See notes to financial statements

Annual report | Global Shareholder Yield Fund

21

F I N A N C I A L   S T A T E M E N T S

Financial highlights

CLASS C SHARES

Period ended	2-29-08 1
Per share operating performance
Net asset value, beginning of period	$10.00
Net investment income 2	0.22
Net realized and unrealized gain
(loss) on investments	(0.45)
Total from investment operations	(0.23)
Less distributions
From net investment income	(0.23)
From net realized gain	(0.03)
	(0.26)
Net asset value, end of period	$9.51
Total return3,4 (%)	(2.54)
Ratios and supplemental data
Net assets, end of period (in millions)	$5
Ratios (as a percentage of average net assets):
Expenses before reductions	3.00
Expenses net of fee waivers, if any	2.23
Expenses net of all fee waivers and credits	2.22
Net investment income	2.08
Portfolio turnover (%)	24

¹ Class C shares began operations on 3-1-07.

² Based on the average of the shares outstanding.

³ Assumes dividend reinvestment.

⁴ Total returns would have been lower had certain expenses not been reduced during the period shown.

See notes to financial statements

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F I N A N C I A L   S T A T E M E N T S

Financial highlights

CLASS I SHARES

Period ended	2-29-08 1
Per share operating performance
Net asset value, beginning of period	$10.00
Net investment income 2	0.33
Net realized and unrealized gain
(loss) on investments	(0.44)
Total from investment operations	(0.11)
Less distributions
From net investment income	(0.33)
From net realized gain	(0.03)
	(0.36)
Net asset value, end of period	$9.53
Total return3,4 (%)	(1.43)
Ratios and supplemental data
Net assets, end of period (in millions)	$3
Ratios (as a percentage of average net assets):
Expenses before reductions	2.16
Expenses net of fee waivers, if any	1.09
Expenses net of all fee waivers and credits	1.09
Net investment income	3.14
Portfolio turnover (%)	24

¹ Class I shares began operations on 3-1-07.

² Based on the average of the shares outstanding.

³ Assumes dividend reinvestment.

⁴ Total returns would have been lower had certain expenses not been reduced during the period shown.

See notes to financial statements

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F I N A N C I A L   S T A T E M E N T S

Financial highlights

CLASS R1 SHARES

Period ended	2-29-08 1
Per share operating performance
Net asset value, beginning of period	$10.00
Net investment income 2	0.35
Net realized and unrealized gain
(loss) on investments	(0.52)
Total from investment operations	(0.17)
Less distributions
From net investment income	(0.28)
From net realized gain	(0.03)
	(0.31)
Net asset value, end of period	$9.52
Total return3,4 (%)	(2.01)
Ratios and supplemental data
Net assets, end of period (in millions)	— 5
Ratios (as a percentage of average net assets):
Expenses before reductions	16.23
Expenses net of fee waivers, if any	1.64
Expenses net of all fee waivers and credits	1.64
Net investment income	3.37
Portfolio turnover (%)	24

¹ Class R1 shares began operations on 3-1-07.

² Based on the average of the shares outstanding.

³ Assumes dividend reinvestment.

⁴ Total returns would have been lower had certain expenses not been reduced during the period shown.

⁵ Less than $500,000.

See notes to financial statements

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Notes to financial statements

1. Organization

John Hancock Global Shareholder Yield Fund (the Fund) is a diversified series of John Hancock Funds III (the Trust). The Trust was established as a Massachusetts business trust on June 9, 2005. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end investment management company. The investment objective of the Fund is to provide a high level of income. Capital appreciation is a secondary investment objective.

John Hancock Life Insurance Company of New York (John Hancock New York) is a wholly owned subsidiary of John Hancock Life Insurance Company (U.S.A.) (John Hancock USA). John Hancock USA and John Hancock New York are indirect wholly owned subsidiaries of The Manufacturers Life Insurance Company (Manulife), which in turn is a wholly owned subsidiary of Manulife Financial Corporation (MFC), a publicly traded company. MFC and its subsidiaries are known collectively as “Manulife Financial.”

John Hancock Investment Management Services, LLC (the Adviser), a Delaware limited liability company controlled by John Hancock USA, serves as investment adviser for the Trust and John Hancock Funds, LLC (the Distributor), a Delaware limited liability company, an affiliate of the Adviser, serves as principal underwriter.

The Board of Trustees have authorized the issuance of multiple classes of shares of the Fund, including classes designated as Class A, Class B, Class C, Class I and Class R1 shares. Class A, Class B and Class C shares are open to all retail investors. Class I shares are offered without any sales charge to various institutional and certain individual investors. Class R1 shares are available only to certain retirement plans. The shares of each class represent an interest in the same portfolio of investments of the Fund, and have equal rights as to voting, redemptions, dividends and liquidation, except that certain expenses, subject to the approval of the Board of Trustees, may be applied differently to each class of shares in accordance with current regulations of the Securities and Exchange Commission (SEC) and the Internal Revenue Service. Shareholders of a class that bear distribution and service expenses under the terms of a distribution plan have exclusive voting rights to that distribution plan. Class B shares will convert to Class A shares eight years after purchase.

The Adviser and other affiliates of John Hancock USA owned 1,128,768, 10,248, 10,248, 10,343 and 10,293 shares of beneficial interest of Class A, Class B, Class C, Class I and Class R1, respectively, on February 29, 2008.

2. Significant accounting policies

In the preparation of the financial statements, the Fund follows the policies described below. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results may differ from these estimates.

Security valuation

The net asset value of the shares of the Fund is determined daily as of the close of the New York Stock Exchange (NYSE), normally at 4:00 p.m., Eastern Time. Short-term debt investments that have a remaining maturity of 60 days or less are valued at amortized cost, and thereafter assume a constant amortization to maturity of any discount or premium, which approximates market value. All other securities held by the Fund are valued at the last sale price or official closing price (closing bid price

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or last evaluated quote if no sale has occurred) as of the close of business on the principal securities exchange (domestic or foreign) on which they trade or, lacking any sales, at the closing bid price. Securities traded only in the over-the-counter market are valued at the last bid price quoted by brokers making markets in the securities at the close of trading. Securities for which there are no such quotations, principally debt securities, are valued based on the evaluated prices provided by an independent pricing service, which utilizes both dealer-supplied and electronic data processing techniques, which take into account factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other market data.

Other assets and securities for which no such quotations are readily available are valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees. Generally, trading in non-U.S. securities is substantially completed each day at various times prior to the close of trading on the NYSE. The values of such securities used in computing the net asset value of a Fund’s shares are generally determined as of such times. Occasionally, significant events that affect the values of such securities may occur between the times at which such values are generally determined and the close of the NYSE. Upon such an occurrence, these securities will be valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees.

In deciding whether to make a fair value adjustment to the price of a security, the Board of Trustees or their designee may review a variety of factors, including developments in foreign markets, the performance of U.S. securities markets and the performance of instruments trading in U.S. markets that represent foreign securities and baskets of foreign securities. The Fund may also fair value securities in other situations, for example, when a particular foreign market is closed, but the Fund is calculating the net asset value. In view of these factors, it is likely that Funds investing significant amounts of assets in securities in foreign markets will be fair valued more frequently than Funds investing significant amounts of assets in frequently traded, U.S. exchange listed securities of large-capitalization U.S. issuers.

For purposes of determining when fair value adjustments may be appropriate with respect to Funds that invest in securities in foreign markets that close prior to the NYSE, the Fund will, on an ongoing basis, monitor for “significant market events.” A significant market event may be a certain percentage change in the value of an index or of certain Exchange Traded Funds that track foreign markets in which Funds have significant investments. If a significant market event occurs due to a change in the value of the index or of Exchange Traded Funds, the pricing for the Fund will promptly be reviewed and potential adjustments to the net asset value of the Fund will be recommended to the Trust’s Pricing Committee when applicable.

Fair value pricing of securities is intended to help ensure that the net asset value of the Fund’s shares reflects the value of the Fund’s securities as of the close of the NYSE (as opposed to a value which is no longer accurate as of such close), thus limiting the opportunity for aggressive traders to purchase shares of the Fund at deflated prices, reflecting stale security valuations, and to promptly sell such shares at a gain. However, a security’s valuation may differ depending on the method used for determining value and no assurance can be given that fair value pricing of securities will successfully eliminate all potential opportunities for such trading gains.

New accounting pronouncement

In September 2006, Financial Accounting Standards Board (FASB) Standard No. 157, Fair Value Measurements (FAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. FAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosure about fair value measurements. As of February 29, 2008, management does not believe the adoption of FAS 157 will impact the amounts reported in the financial statements; however, additional

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disclosures regarding pricing sources will be required about the inputs used to develop the measurements of fair value and the related realized and unrealized gain/loss for certain securities valued by significant unobservable market inputs.

Guarantees and indemnifications

Under the Trust’s organizational documents, its Officers and Trustees are indemnified against certain liability arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust that have not yet occurred.

Repurchase agreements

The Fund may enter into repurchase agreements. When the Fund enters into a repurchase agreement through its custodian, it receives delivery of securities, the amount of which at the time of purchase and each subsequent business day is required to be maintained at such a level that the market value is generally at least 102% of the repurchase amount. The Fund will take constructive receipt of all securities underlying the repurchase agreements it has entered into until such agreements expire. If the seller defaults, the Fund would suffer a loss to the extent that proceeds from the sale of underlying securities were less than the repurchase amount. The Fund may enter into repurchase agreements maturing within seven days with domestic dealers, banks or other financial institutions deemed to be creditworthy by the Adviser. Collateral for certain tri-party repurchase agreements is held at the custodian bank in a segregated account for the benefit of the Fund and the counterparty.

Foreign currency transactions

The books and records of the Fund are maintained in U.S. Dollars. Investment securities and other assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the prevailing exchange rates at period end. Purchases and sales of investment securities, income and expenses are translated into U.S. dollars at the prevailing exchange rates on the respective dates of the transactions.

Net realized and unrealized gains and losses on foreign currency transactions represent net gains and losses between trade and settlement dates on securities transactions, the disposition of forward foreign currency exchange contracts and foreign currencies, and the difference between the amount of net investment income accrued and the U.S. dollar amount actually received. That portion of both realized and unrealized gains and losses on investments that results from fluctuations in foreign currency exchange rates is not separately disclosed but is included with net realized and unrealized gain/appreciation and loss/depreciation on investments.

The Fund may be subject to capital gains and repatriation taxes imposed by certain countries in which it invests. Such taxes are generally based upon income and/or capital gains earned or repatriated. Taxes are accrued based upon net investment income, net realized gains and net unrealized appreciation.

The Fund may invest in securities of issuers based in countries with emerging markets or economies and may, therefore, be subject to greater market risk than Funds that invest principally in securities of issuers in more developed countries. Emerging markets securities may be more volatile and less liquid than securities of issuers in developed countries and may be subject to substantial currency fluctuations and affected by sudden economic, social and political developments in the emerging market country. The securities markets of emerging countries may have less government regulation and may be subject to less extensive accounting and financial reporting requirements than the securities markets of more developed countries. Emerging market countries may have currency controls or restrictions which may prevent or delay the Fund from taking money out of the country or may impose additional taxes on money removed from the country.

Security transactions and related investment income

Investment security transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment

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transactions are reported on trade date. Interest income is accrued as earned. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Foreign dividends are recorded on the ex-date or when the Fund becomes aware of the dividends from cash collections. Discounts/premiums are accreted/ amortized for financial reporting purposes. Non-cash dividends are recorded at the fair market value of the securities received. Debt obligations may be placed in a non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful, based upon consistently applied procedures.

From time to time, the Fund may invest in Real Estate Investment Trusts (REITs) and, as a result, will estimate the components of distributions from these securities. Distributions from REITs received in excess of income are recorded as a reduction of cost of investments and/or as a realized gain.

The Fund uses the specific identification method for determining realized gain or loss on investments for both financial statement and federal income tax reporting purposes.

Allocations of income and expenses

All income, expenses (except class-specific expenses), and realized and unrealized gain/loss are allocated to each class of shares based upon the relative net assets of each class. Dividends to shareholders from net investment income are determined at a class level and distributions from capital gains are determined at a Fund level.

Expenses not directly attributable to the Fund or share classes are allocated based on the relative share of net assets of the Fund or share class at the time the expense was incurred. Class-specific expenses, as detailed in Note 3, are accrued daily and charged directly to the respective share classes.

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 that is distributed to shareholders. Therefore, no federal income tax provision is required. Net capital losses of $540,402 that are attributable to security transactions incurred after October 31, 2007, are treated as arising on March 1, 2008, the first day of the Fund’s next taxable year.

The Fund has adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement 109 (FIN 48), at the beginning of the Fund’s fiscal year. FIN 48 prescribes a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not have a material impact on the Fund’s financial statements. The Fund’s federal tax return for this fiscal year remains subject to examination by the Internal Revenue Service.

Distribution of income and gains

The Fund records distributions to shareholders from net investment income and net realized gains, if any, on the ex-dividend date. During the year ended February 29, 2008, the tax character of distributions paid was as follows: ordinary income $1,045,967. Distributions paid by the Fund with respect to each class of shares are calculated in the same manner, at the same time and are in the same amount, except for the effect of expenses that may be applied differently to each class.

As of February 29, 2008, the components of distributable earnings on a tax basis included $55,884 of undistributed ordinary income.

Such distributions and distributable earnings, on a tax basis, are determined in conformity with income tax regulations, which may differ from accounting principles generally accepted in the United States of America. Distributions in excess of tax basis earnings and profits, if any, are reported in the Fund’s financial statements as a return of capital.

Capital accounts within financial statements are adjusted for permanent book/tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book/tax differences will reverse in a subsequent period. Permanent book/tax differences are primarily attributable to foreign currency transactions.

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3. Investment advisory and
other agreements

The Trust has entered into an Investment Advisory Agreement with the Adviser. The Adviser is responsible for managing the corporate and business affairs of the Trust and for selecting and compensating subadvisers to handle the investment of the assets of the Fund, subject to the supervision of the Trust’s Board of Trustees. As compensation for its services, the Adviser receives an advisory fee from the Trust. Under the Advisory Agreement, the Fund pays a monthly management fee to the Adviser equivalent, on an annual basis, to the sum of: (a) 0.950% of the first $500,000,000 of the Fund’s daily net assets; (b) 0.925% of the next $500,000,000 of the Fund’s daily net assets; and (c) 0.900% of the Fund’s daily net assets in excess of $1,000,000,000. The Adviser has a subadvisory agreement with Epoch Investment Partners, Inc. The Fund is not responsible for payment of the subadvisory fees.

The investment management fees incurred for the year ended February 29, 2008, were equivalent to an annual effective rate of 0.95% of the Fund’s average daily net assets.

Expense reimbursements

The Adviser has contractually agreed to reimburse or limit certain Fund level expenses to 0.10% of the Fund’s average annual net assets which are allocated pro rata to all share classes. This agreement excludes taxes, portfolio brokerage commissions, interest, advisory fees, Rule 12b-1 fees, transfer agency fees, blue sky fees, printing and postage and litigation and indemnification expenses and other extraordinary expenses not incurred in the ordinary course of the Fund’s business. In addition, fees incurred under any agreement or plans of the Fund dealing with services for the shareholders and others with beneficial interest in shares of the Fund, are excluded.

Additionally, the Adviser had a voluntary advisory fee waiver of 0.45% in effect from March 1, 2007 to May 31, 2007.

Finally, the Adviser has agreed to reimburse or limit certain expenses for each share class. This agreement excludes taxes, portfolio brokerage commissions, interest and litigation and indemnification expenses and other extraordinary expenses not incurred in the ordinary course of the Fund’s business. In addition, fees incurred under any agreement or plans of the Fund dealing with services for the shareholders and others with beneficial interest in shares of the Fund, are excluded. The reimbursements and limits are such that these expenses will not exceed 1.55% for Class A shares, 2.25% for Class B, 2.25% for Class C, 1.10% for Class I and 1.60% for Class R1. Accordingly, the expense reductions or reimbursements related to this agreement were $83,352, $15,148, $21,130, $22,142 and $15,278 for Class A, Class B, Class C, Class I and Class R1, respectively for the year ended February 29, 2008. The expense reimbursements and limits will co ntinue in effect until June 30, 2009 and thereafter until terminated by the Adviser on notice to the Trust.

Fund administration fees

Pursuant to the Advisory Agreement, the Fund reimburses the Adviser for all expenses associated with providing the administrative, financial, legal, accounting and recordkeeping services of the Fund, including the preparation of all tax returns, annual, semiannual and periodic reports to shareholders and the preparation of all regulatory reports. These expenses are allocated based on the relative share of net assets of each class at the time the expense was incurred.

The fund administration fees incurred for the year ended February 29, 2008, were $9,126 with an annual effective rate of 0.03% of the Fund’s average daily net assets.

Distribution and shareholder servicing fees

The Trust has a Distribution Agreement with the Distributor. The Fund has adopted Distribution Plans with respect to Class A, Class B, Class C and Class R1, pursuant to Rule 12b-1 under the 1940 Act, to pay the Distributor for the services it provides as distributor of shares of the Fund. Accordingly, the Fund makes monthly payments to the Distributor at an annual rate not to exceed 0.30%, 1.00%, 1.00% and 0.50% of average daily net asset value of Class A, Class B, Class C and Class R1, respectively. A maximum of 0.25% of such payments may be service fees, as defined by the Conduct Rules of Financial

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Industry Regulatory Authority (formerly the National Association of Securities Dealers). Under the Conduct Rules, curtailment of a portion of the Fund’s 12b-1 payments could occur under certain circumstances.

In addition, the Fund has also adopted a Service Plan for Class R1 shares. Under the Service Plan, the Fund may pay up to 0.25% of Class R1 average daily net asset value for certain other services. The Service Plan fees incurred for the year ended February 29, 2008, were equivalent to an annual effective rate of 0.15% of the Class R1 average daily net assets.

Sales charges

Class A shares are assessed up-front sales charges of up to 5.00% of net asset value of such shares. During the year ended February 29, 2008, the Fund was informed that the Distributor received net up-front sales charges of $221,015 with regard to sales of Class A shares. Of this amount, $35,356 was retained and used for printing prospectuses, advertising, sales literature and other purposes; $184,744 was paid as sales commissions to unrelated broker-dealers; and $915 was paid as sales commissions to sales personnel of Signator Investors, Inc. (Signator Investors), a related broker-dealer, an indirect subsidiary of MFC.

Class B shares that are redeemed within six years of purchase are subject to a contingent deferred sales charge (CDSC) at declining rates, beginning at 5.00% of the lesser of the current market value at the time of redemption or the original purchase cost of the shares being redeemed. Class C shares that are redeemed within one year of purchase are subject to a CDSC at a rate of 1.00% of the lesser of the current market value at the time of redemption or the original purchase cost of the shares being redeemed. Proceeds from the CDSCs are paid to the Distributor and are used, in whole or in part, to defray its expenses for providing distribution-related services to the Fund in connection with the sale of Class B and Class C shares. During the year ended February 29, 2008, CDSCs received by Distributor amounted to $1,410 for Class B shares and $2,013 for Class C shares.

Transfer agent fees

The Fund has a Transfer Agency Agreement with John Hancock Signature Services, Inc. (Signature Services), an indirect subsidiary of MFC. For Class A, Class B, Class C, Class I and Class R1 shares, the Fund pays a monthly transfer agent fee at an annual rate of 0.05% of each class’ average daily net assets, plus a fee based on the number of shareholder accounts and reimbursement for certain out-of-pocket expenses. Expenses not directly attributable to a particular class of shares are aggregated and allocated to each class on the basis of its relative net asset value. The Fund pays a monthly fee which is based on an annual rate of $15.00 for each Class A shareholder account, $17.50 for each Class B shareholder account, $16.50 for each Class C shareholder account and $15.00 for each Class R1 shareholder account.

Signature Services has agreed to limit the transfer agent fees so that such fees do not exceed 0.20% annually of Class A, Class B, Class C, Class I and Class R1 share average daily net assets. This agreement is effective until December 31, 2008. Signature Services reserves the right to terminate this limitation in the future. There were no transfer agent fee reductions for Class A, Class B, Class C, Class I and Class R1 shares, respectively, during the year ended February 29, 2008.

In addition, Signature Services has voluntarily agreed to further limit transfer agent fees for Class R1 shares so that such fees do not exceed 0.05% annually of each class’s average daily net assets. For the year ended February 29, 2008, the transfer agent fees reductions for Class R1 were $152.

In May 2007, the Fund began receiving earnings credits from its transfer agent as a result of uninvested cash balances. These credits are used to reduce a portion of the Fund’s transfer agent fees and out-of-pocket expenses. During the year ended February 29, 2008, the Fund’s transfer agent fees and out-of-pocket expenses were reduced by $560 for transfer agent credits earned.

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Class level expenses for the year ended February 29, 2008, were as follows:

	Distribution and	Transfer	Blue	Printing and
Share class	service fees	agent fees	sky fees	postage fees
Class A	$74,931	$24,181	$13,646	$8,978
Class B	9,128	1,877	12,572	195
Class C	27,576	5,641	13,228	812
Class I	—	1,091	16,329	729
Class R1	689	206	14,796	89
Total	$112,324	$32,996	$70,571	$10,803

4. Trustees’ fees

The Trust compensates each Trustee who is not an employee of the Adviser or its affiliates. Total Trustees’ expenses are allocated to the Fund based on its average daily net asset value.

5. Line of credit

The Fund has entered into an agreement which enables them to participate in a $100 million unsecured committed line of credit with State Street Corporation. Borrowings will be made solely to temporarily finance the repurchase of capital shares. Interest is charged to the Fund based on its borrowings at a rate per annum equal to the Federal Funds rate plus 0.50% . In addition, a commitment fee of 0.05% per annum, payable at the end of each calendar quarter, based on the average daily-unused portion of the line of credit, is charged to the Fund on a prorated basis based on average net assets. Effective October 15, 2007, the commitment fee was changed from 0.07% to 0.05% . For the year ended February 29, 2008, there were no borrowings under the line of credit.

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6. Fund share transactions

Share activities for the Fund for the year ended February 29, 2008, were as follows:

	Year ended 2-29-08
	Shares	Amount
Class A shares
Sold	3,579,005	$36,990,887
Distributions reinvested	74,870	786,460
Repurchased	(778,581)	(8,201,185)
Net increase (decrease)	2,875,294	$29,576,162
Class B shares
Sold	152,636	$1,617,383
Distributions reinvested	2,550	26,721
Repurchased	(22,055)	(222,085)
Net increase (decrease)	133,131	$1,422,019
Class C shares
Sold	545,185	$5,766,651
Distributions reinvested	7,254	75,951
Repurchased	(70,535)	(720,096)
Net increase (decrease)	481,904	$5,122,506
Class I shares
Sold	373,901	$3,986,954
Distributions reinvested	2,569	26,908
Repurchased	(58,546)	(611,454)
Net increase (decrease)	317,924	$3,402,408
Class R1 shares
Sold	10,000	$100,000
Distributions reinvested	293	3,078
Net increase (decrease)	10,293	$103,078
Net increase (decrease)	3,818,546	$39,626,173

7. Purchases and sales of securities

Purchases and proceeds from sales or maturities of securities, other than short-term securities and obligations of the U.S. government, during the year ended February 29, 2008, aggregated $43,551,383 and $6,978,600, respectively.

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Auditors’ report

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of John Hancock Funds III and Shareholders of John Hancock Global Shareholder Yield Fund,

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of John Hancock Global Shareholder Yield Fund (the Fund) at February 29, 2008, and the results of its operations, the changes in its net assets and the financial highlights for the period March 1, 2007 (commencement of operations), through February 29, 2008, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with the standards of the Public Company Account ing Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of investments at February 29, 2008 by correspondence with the custodian and brokers, provides a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
Boston, Massachusetts
April 18, 2008

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Tax information

Unaudited

For federal income tax purposes, the following information is furnished with respect to the distributions of the Fund, if any, paid during its taxable year ended February 29, 2008.

With respect to the ordinary dividends paid by the Fund for the fiscal year ended February 29, 2008, 100.00% of the dividends qualifies for the corporate dividends-received deduction.

The Fund hereby designates the maximum amount allowable of its net taxable income as qualified dividend income as provided in the Jobs and Growth Tax Relief Reconciliation Act of 2003. This amount will be reflected on Form 1099-DIV for the calendar year 2008.

Shareholders will be mailed a 2008 U.S. Treasury Department Form 1099-DIV in January 2009. This will reflect the total of all distributions that are taxable for calendar year 2008.

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Trustees and Officers

This chart provides information about the Trustees and Officers who oversee your John Hancock fund. Officers elected by the Trustees manage the day-to-day operations of the Fund and execute policies formulated by the Trustees.

Independent Trustees

Name, Year of Birth		Number of John
Position(s) held with Fund	Trustee	Hancock Funds
Principal occupation(s) and other	of Fund	overseen by
directorships during past 5 years	since 1	Trustee
James F. Carlin, Born: 1940	2007	55
Chairman (since December 2007); Director and Treasurer, Alpha Analytical Laboratories, Inc. (chemical
analysis) (since 1985); Part Owner and Treasurer, Lawrence Carlin Insurance Agency, Inc. (since 1995);
Part Owner and Vice President, Mone Lawrence Carlin Insurance Agency, Inc. (until 2005); Chairman
and Chief Executive Officer, Carlin Consolidated, Inc. (management/investments) (since 1987); Trustee,
Massachusetts Health and Education Tax Exempt Trust (1993–2003) .
William H. Cunningham, Born: 1944	2007	55
Professor, University of Texas at Austin (since 1971); former Chancellor, University of Texas System and
former President, University of Texas at Austin (until 2001); Chairman and Chief Executive Officer, IBT
Technologies (until 2001); Director of the following: Hicks Acquisition Company I, Inc. (since 2007);
Hire.com (until 2004), STC Broadcasting, Inc. and Sunrise Television Corp. (until 2001), Symtx, Inc.
(electronic manufacturing) (since 2001), Adorno/Rogers Technology, Inc. (until 2004), Pinnacle
Foods Corporation (until 2003), rateGenius (until 2003), Lincoln National Corporation (insurance)
(since 2006), Jefferson-Pilot Corporation (diversified life insurance company) (until 2006), New
Century Equity Holdings (formerly Billing Concepts) (until 2001), eCertain (until 2001), ClassMap.com
(until 2001), Agile Ventures (until 2001), AskRed.com (until 2001), Southwest Airlines (since 2000),
Introgen (manufacturer of biopharmaceuticals) (since 2000) and Viasystems Group, Inc. (electronic
manufacturer) (until 2003); Advisory Director, Interactive Bridge, Inc. (college fundraising) (until 2001);
Advisory Director, Q Investments (until 2003); Advisory Director, JPMorgan Chase Bank (formerly Texas
Commerce Bank–Austin), LIN Television (until 2008), WilTel Communications (until 2003) and Hayes
Lemmerz International, Inc. (diversified automotive parts supply company) (since 2003) .
Charles L. Ladner, 2 Born: 1938	2007	55
Chairman and Trustee, Dunwoody Village, Inc. (retirement services) (until 2003); Senior Vice President
and Chief Financial Officer, UGI Corporation (public utility holding company) (retired 1998); Vice
President and Director, AmeriGas, Inc. (retired 1998); Director, AmeriGas Partners, L. P. (gas distribution)
(until 1997); Director, EnergyNorth, Inc. (until 1997); Director, Parks and History Association (until 2005) .
John A. Moore, 2 Born: 1939	2007	55
President and Chief Executive Officer, Institute for Evaluating Health Risks (nonprofit institution)
(until 2001); Senior Scientist, Sciences International (health research) (until 2003); Former Assistant
Administrator and Deputy Administrator, Environmental Protection Agency; Principal, Hollyhouse
(consulting) (since 2000); Director, CIIT Center for Health Science Research (nonprofit research)
(until 2007) .

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35

Independent Trustees (continued)

Name, Year of Birth		Number of John
Position(s) held with Fund	Trustee	Hancock Funds
Principal occupation(s) and other	of Fund	overseen by
directorships during past 5 years	since 1	Trustee
Patti McGill Peterson, 2 Born: 1943	2007	55
Senior Associate, Institute for Higher Education Policy (since 2007); Executive Director, Council for
International Exchange of Scholars and Vice President, Institute of International Education (until 2007);
Senior Fellow, Cornell Institute of Public Affairs, Cornell University, Ithaca, NY (until 1998); Former
President, Wells College, Aurora, NY, and St. Lawrence University, Canton, NY; Director, Niagara
Mohawk Power Corporation (until 2003); Director, Ford Foundation, International Fellowships Program
(since 2002); Director, Lois Roth Endowment (since 2002); Director, Council for International Educational
Exchange (since 2003) .
Steven R. Pruchansky, Born: 1944	2007	55
Chairman and Chief Executive Officer, Greenscapes of Southwest Florida, Inc. (since 2000); Director and
President, Greenscapes of Southwest Florida, Inc. (until 2000); Managing Director, JonJames, LLC (real
estate) (since 2000); Director, First Signature Bank & Trust Company (until 1991); Director, Mast Realty
Trust (until 1994); President, Maxwell Building Corp. (until 1991) .

Non-Independent Trustees ³

Name, Year of Birth		Number of John
Position(s) held with Fund	Trustee	Hancock Funds
Principal occupation(s) and other	of Fund	overseen by
directorships during past 5 years	since 1	Trustee
James R. Boyle, Born: 1959	2007	265
Executive Vice President, Manulife Financial Corporation (since 1999); President, John Hancock Variable
Life Insurance Company (since March 2007); Executive Vice President, John Hancock Life Insurance
Company (since 2004); Chairman and Director, John Hancock Advisers, LLC (the Adviser), John Hancock
Funds, LLC and The Berkeley Financial Group, LLC (The Berkeley Group) (holding company) (since 2005);
Senior Vice President, The Manufacturers Life Insurance Company (U.S. A. ) (until 2004) .

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Principal officers who are not Trustees

Name, Year of Birth
Position(s) held with Fund	Officer
Principal occupation(s) and other	of Fund
directorships during past 5 years	since
Keith F. Hartstein, Born: 1956	2007
President and Chief Executive Officer
Senior Vice President, Manulife Financial Corporation (since 2004); Director, President and Chief
Executive Officer, the Adviser, The Berkeley Group and John Hancock Funds, LLC (since 2005); Director,
MFC Global Investment Management (U.S. ), LLC (MFC Global (U.S. )) (since 2005); Director, John
Hancock Signature Services, Inc. (since 2005); President and Chief Executive Officer, John Hancock
Investment Management Services, LLC (since 2006); President and Chief Executive Officer, John Hancock
Funds, John Hancock Funds II, John Hancock Funds III and John Hancock Trust (since 2005); Director,
Chairman and President, NM Capital Management, Inc. (since 2005); Member, Investment Company
Institute Sales Force Marketing Committee (since 2003); President and Chief Executive Officer, MFC
Global (U.S. ) (2005–2006); Executive Vice President, John Hancock Funds, LLC (until 2005) .
Thomas M. Kinzler, Born: 1955	2007
Secretary and Chief Legal Officer
Vice President and Counsel, John Hancock Life Insurance Company (U.S. A. ) (since 2006); Secretary and
Chief Legal Officer, John Hancock Funds and John Hancock Funds II (since 2006); Chief Legal Officer
and Assistant Secretary, John Hancock Trust (since 2006); Vice President and Associate General Counsel,
Massachusetts Mutual Life Insurance Company (1999–2006); Secretary and Chief Legal Counsel, MML
Series Investment Fund (2000–2006); Secretary and Chief Legal Counsel, MassMutual Institutional Funds
(2000–2004); Secretary and Chief Legal Counsel, MassMutual Select Funds and MassMutual Premier
Funds (2004–2006) .
Francis V. Knox, Jr. , Born: 1947	2007
Chief Compliance Officer
Vice President and Chief Compliance Officer, John Hancock Investment Management Services, LLC,
the Adviser and MFC Global (U.S. ) (since 2005); Vice President and Chief Compliance Officer, John
Hancock Funds, John Hancock Funds II, John Hancock Funds III and John Hancock Trust (since 2005);
Vice President and Assistant Treasurer, Fidelity Group of Funds (until 2004); Vice President and Ethics &
Compliance Officer, Fidelity Investments (until 2001) .
Charles A. Rizzo, Born: 1957	2007
Chief Financial Officer
Chief Financial Officer, John Hancock Funds, John Hancock Funds II, John Hancock Funds III and John
Hancock Trust (since June 2007); Assistant Treasurer, Goldman Sachs Mutual Fund Complex (regis-
tered investment companies) (2005–June 2007); Vice President, Goldman Sachs (2005–June 2007);
Managing Director and Treasurer of Scudder Funds, Deutsche Asset Management (2003–2005);
Director, Tax and Financial Reporting, Deutsche Asset Management (2002–2003); Vice President and
Treasurer, Deutsche Global Fund Services (Deutsche Registered Investment Companies) (1999–2002) .
Gordon M. Shone, Born: 1956	2007
Treasurer
Senior Vice President, John Hancock Life Insurance Company (U.S. A. ) (since 2001); Treasurer, John
Hancock Funds (since 2006), John Hancock Funds II, John Hancock Funds III and John Hancock Trust
(since 2005); Vice President and Chief Financial Officer, John Hancock Trust (2003–2005); Vice President,
John Hancock Investment Management Services, Inc., John Hancock Advisers, LLC (since 2006) and The
Manufacturers Life Insurance Company (U.S. A. ) (1998–2000) .

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37

Principal officers who are not Trustees (continued)

Name, Year of Birth
Position(s) held with Fund	Officer
Principal occupation(s) and other	of Fund
directorships during past 5 years	since
John G. Vrysen, Born: 1955	2007
Chief Operating Officer
Senior Vice President, Manulife Financial Corporation (since 2006); Director, Executive Vice President
and Chief Operating Officer, the Adviser, The Berkeley Group and John Hancock Funds, LLC (since
June 2007); Executive Vice President and Chief Operating Officer, John Hancock Investment
Management Services, LLC (since December 2007); Chief Operating Officer, John Hancock Funds,
John Hancock Funds II, John Hancock Funds III and John Hancock Trust (since June 2007); Director,
Executive Vice President and Chief Financial Officer, the Adviser, The Berkeley Group and John Hancock
Funds, LLC (2005–2007); Executive Vice President and Chief Financial Officer, John Hancock Investment
Management Services, LLC (2005–2007); Executive Vice President and Chief Financial Officer, MFC
Global (U.S. ) (2005 until August 2007); Director, John Hancock Signature Services, Inc. (since 2005);
Chief Financial Officer, John Hancock Funds, John Hancock Funds II, John Hancock Funds III and John
Hancock Trust (2005 until June 2007); Vice President and General Manager, John Hancock Fixed
Annuities, U.S. Wealth Management (2004–2005); Vice President, Operations, Manulife Wood Logan
(2000–2004) .

The business address for all Trustees and Officers is 601 Congress Street, Boston, Massachusetts 02210-2805.

The Statement of Additional Information of the Fund includes additional information about members of the Board of Trustees of the Fund and is available without charge, upon request, by calling 1-800-225-5291.

¹ Each Trustee serves until resignation, retirement age or until his or her successor is elected.

² Member of Audit and Compliance Committee.

³ Non-Independent Trustee holds positions with the Fund’s investment adviser, underwriter and certain other affiliates.

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For more information

The Fund’s proxy voting policies, procedures and records are available without charge, upon request:

By phone	On the Fund’s Web site	On the SEC’s Web site
1-800-225-5291	www. jhfunds. com/proxy	www. sec. gov
Investment adviser	Custodian	Legal counsel
John Hancock Investment	State Street Bank & Trust Co.	Kirkpatrick & Lockhart
Management Services, LLC	2 Avenue de Lafayette	Preston Gates Ellis LLP
601 Congress Street	Boston, MA 02111	One Lincoln Street
Boston, MA 02210-2805		Boston, MA 02111-2950
	Transfer agent
Subadviser	John Hancock Signature	Independent registered
Epoch Investment Partners, Inc.	Services, Inc.	public accounting firm
640 Fifth Avenue, 18th Floor	P. O. Box 9510	PricewaterhouseCoopers LLP
New York, NY 10019	Portsmouth, NH 03802-9510	125 High Street
		Boston, MA 02110
Principal distributor
John Hancock Funds, LLC
601 Congress Street
Boston, MA 02210-2805

How to contact us
Internet	www. jhfunds.com
Mail	Regular mail:	Express mail:
	John Hancock Signature	John Hancock Signature
	Services, Inc.	Services, Inc.
	P. O. Box 9510	Mutual Fund Image Operations
	Portsmouth, NH 03802-9510	164 Corporate Drive
		Portsmouth, NH 03801
Phone	Customer service representatives	1-800-225-5291
	EASI-Line	1-800-338-8080
	TDD line	1-800-554-6713

A listing of month-end portfolio holdings is available on our Web site, www.jhfunds.com. A more detailed portfolio holdings summary is available on a quarterly basis 60 days after the fiscal quarter on our Web site or upon request by calling 1-800-225-5291, or on the SEC’s Web site, www.sec.gov.

Annual report | Global Shareholder Yield Fund

39

1-800-225-5291
1-800-554-6713 TDD
1-800-338-8080 EASI-Line
www. jhfunds.com

Now available: electronic delivery
www. jhfunds.com/edelivery

This report is for the information of the shareholders of John Hancock Global Shareholder Yield Fund.	3200A	2/08
It is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus.		4/08

Discussion of Fund performance

By Pzena Investment Management, LLC

Market environment

U.S. stocks declined during the 12-month period ended February 29, 2008. The market rallied in the first four months of the period, but a meltdown in the subprime mortgage industry, a credit crunch in the financial sector and a slowing U.S. economy led to a sharp increase in volatility and a stock market decline over the last few months.

As growth stocks outperformed value over the past year, the valuation spread between the overall market and its most undervalued segment widened dramatically after several years at very narrow levels. In fact, we have seen large-cap valuation spreads this wide only five times in the last 40 years.

“U.S. stocks declined during the
12-month period ended
February 29, 2008.”

Fund performance

For the year ended February 29, 2008, John Hancock Classic Value Mega Cap Fund’s Class A, Class B, Class C, Class I and Class R1 shares posted total returns of –21.28%, –21.85%, –21.75%, –20.87% and –21.46%, respectively, at net asset value. The Fund trailed both the –7.91% return of the Russell 1000 Value Index and the –6.64% return of the average large value fund, according to Morningstar, Inc.

Portfolio review

The John Hancock Classic Value Mega Cap Fund lagged its benchmark index and peer group average during the period, with most of the underperformance occurring over the last eight months. The recent decline in financial stocks, which comprised the portfolio’s largest sector weighting, had the biggest negative impact on performance. Government-sponsored mortgage enterprises Fannie Mae and Freddie Mac, as well as diversified financial services provider Citigroup, Inc., were the most significant detractors. Outside of financials, telecommunications equipment maker Alcatel-Lucent was the weakest performer.

On the positive side, discount retailer Wal-Mart Stores, Inc. and defense contractor Northrop Grumman Corp. were among the best performance contributors. Railroad operator Union Pacific and software makers Microsoft Corp. and Oracle Corp. also generated solid returns.

This commentary reflects the views of the portfolio managers through the end of the Fund’s period discussed in this report. The managers’ statements reflect their own opinions. As such, they are in no way guarantees of future events and are not intended to be used as investment advice or a recommendation regarding any specific security. They are also subject to change at any time as market and other conditions warrant.

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A look at performance

For the periods ended February 29, 2008

		Average annual returns				Cumulative total returns
		with maximum sales charge (POP)				with maximum sales charge (POP)
	Inception				Since				Since
Class	date	1-year	5-year	10-year	inception	1-year	5-year	10-year	inception
A	3-1-07	–25.24%	—	—	–25.24%	–25.24%	—	—	–25.24%
B	3-1-07	–25.65	—	—	–25.65	–25.65	—	—	–25.65
C	3-1-07	–22.51	—	—	–22.51	–22.51	—	—	–22.51
I1	3-1-07	–20.87	—	—	–20.87	–20.87	—	—	–20.87
R11	3-1-07	–21.46	—	—	–21.46	–21.46	—	—	–21.46

Performance figures assume all distributions are reinvested. Public offering price (POP) figures reflect maximum sales charge on Class A shares of 5%, and the applicable contingent deferred sales charge (CDSC) on Class B and Class C shares. The Class B shares' CDSC declines annually between years 1 to 6 according to the following schedule:5, 4, 3, 3, 2, 1%. No sales charge will be assessed after the sixth year. Class C shares held for less than one year are subject to a 1% CDSC. Sales charge is not applicable for Class I and Class R1 shares.

The expense ratios of the Fund, both net (including any fee waivers or expense limitations) and gross (excluding any fee waivers or expense limitations), are set forth according to the most recent publicly available prospectuses for the Fund and may differ from the expense ratios disclosed in the Financial Highlights tables in this report. The waivers and expense limitations are contractual at least until 2-29-08. The net expenses are as follows:Class A — 1.37%, Class B — 2.12%, Class C — 2.12%, Class I — 0.97%, Class R1 — 1.72% . Had the fee waivers and expense limitations not been in place, the gross expenses would be as follows:Class A — 1.42%, Class B — 2.40%, Class C — 2.23%, Class I — 1.08%, Class R1 — 2.35% .

The returns reflect past results and should not be considered indicative of future performance. The return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, the Fund's current performance may be higher or lower than the performance shown. For performance data current to the most recent month end, please call 1-800-225-5291 or visit the Fund's Web site at www.jhfunds.com.

The performance table above and the chart on the next page do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

The Fund's performance results reflect any applicable expense reductions, without which the expenses increase and results would have been less favorable.

Performance is calculated with an opening price (prior day's close) on the inception date.

¹ For certain types of investors as described in the Fund's Class I and Class R1 share prospectuses.

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A look at performance

Growth of $10,000

This chart shows what happened to a hypothetical $10,000 investment in Classic Value Mega Cap Fund Class A shares for the period indicated. For comparison, we've shown the same investment in two separate indexes.

		Without sales	With maximum
Class	Period beginning	charge	sales charge	Index 1	Index 2
B	3-1-07	$7,815	$7,435	$9,209	$9,373
C	3-1-07	7,825	7,749	9,209	9,373
I2	3-1-07	7,913	7,913	9,209	9,373
R12	3-1-07	7,854	7,854	9,209	9,373

Assuming all distributions were reinvested for the period indicated, the table above shows the value of a $10,000 investment in the Fund's Class B, Class C, Class I and Class R1 shares, respectively, as of February 29, 2008. Performance of the classes will vary based on the difference in sales charges paid by shareholders investing in the different classes and the fee structure of those classes.

Russell 1000 Value — Index 1 — is an unmanaged index containing those securities in the Russell 1000 Index with a less-than-average growth orientation.

Russell Top 200 Value — Index 2 — is an unmanaged index which measures the performance of the largest 200 companies within the Russell 3000 Index with a less-than-average growth orientation.

It is not possible to invest directly in an index. Index figures do not reflect sales charges, which would have resulted in lower values if they did.

¹ NAV represents net asset value and POP represents public offering price.

² For certain types of investors as described in the Fund's Class I and Class R1 share prospectuses.

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Your expenses

These examples are intended to help you understand your ongoing operating expenses.

Understanding fund expenses

As a shareholder of the Fund, you incur two types of costs:

■ Transaction costs which include sales charges (loads) on purchases or redemptions (varies by share class), minimum account fee charge, etc.

■ Ongoing operating expenses including management fees, distribution and service fees (if applicable), and other fund expenses.

We are going to present only your ongoing operating expenses here.

Actual expenses/actual returns

This example is intended to provide information about your fund’s actual ongoing operating expenses, and is based on your fund’s actual return. It assumes an account value of $1,000.00 on September 1, 2007, with the same investment held until February 29, 2008.

	Account value	Ending value	Expenses paid during
	on 9-1-07	on 2-29-08	period on 2-29-081
Class A	$1,000.00	$795.14	$6.11
Class B	1,000.00	791.76	9.44
Class C	1,000.00	791.99	9.45
Class I	1,000.00	796.84	4.33
Class R1	1,000.00	794.16	6.87

Together with the value of your account, you may use this information to estimate the operating expenses that you paid over the period. Simply divide your account value at February 29, 2008, by $1,000.00, then multiply it by the “expenses paid” for your share class from the table above. For example, for an account value of $8,600.00, the operating expenses should be calculated as follows:

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9

Your expenses

Hypothetical example for comparison purposes

This table allows you to compare your fund’s ongoing operating expenses with those of any other fund. It provides an example of the Fund’s hypothetical account values and hypothetical expenses based on each class’s actual expense ratio and an assumed 5% annualized return before expenses (which is not your fund’s actual return). It assumes an account value of $1,000.00 on September 1, 2007, with the same investment held until February 29, 2008. Look in any other fund shareholder report to find its hypothetical example and you will be able to compare these expenses.

	Account value	Ending value	Expenses paid during
	on 9-1-07	on 2-29-08	period on 2-29-081
Class A	$1,000.00	$1,018.05	$6.87
Class B	1,000.00	1,014.32	10.62
Class C	1,000.00	1,014.32	10.62
Class I	1,000.00	1,020.04	4.87
Class R1	1,000.00	1,017.21	7.72

Remember, these examples do not include any transaction costs, such as sales charges; therefore, these examples will not help you to determine the relative total costs of owning different funds. If transaction costs were included, your expenses would have been higher. See the prospectus for details regarding transaction costs.

¹ Expenses are equal to the Fund's annualized expense ratio of 1.37%, 2.12%, 2.12%, 0.97% and 1.54% for Class A, Class B, Class C, Class I and Class R1, respectively, multiplied by the average account value over the period, multiplied by the number of days in most recent fiscal half year/ 366 (to reflect the one-half year period).

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Portfolio summary

Top 10 holdings1
Alcatel-Lucent	5.0%	Northrop Grumman Corp.	4.1%
Allstate Corp.	4.8%	Bank of America Corp.	4.1%
Citigroup, Inc.	4.5%	Johnson & Johnson	3.9%
Federal Home Loan Mortgage Corp.	4.3%	Federal National Mortgage Association	3.8%
Capital One Financial Corp.	4.2%	Wal-Mart Stores, Inc.	3.6%
Sector distribution1
Financial	44%	Industrial	5%
Consumer non-cyclical	27%	Technology	3%
Communications	8%	Utilities	3%
Consumer cyclical	8%	Energy	2%

¹As a percentage of net assets on February 29, 2008.

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11

F I N A N C I A L  S T A T E M E N T S

Fund’s investments

Securities owned by the Fund on 2-29-08

This schedule is divided into two main categories: common stocks and repurchase agreements. Common stocks are further broken down by industry group. Repurchase agreements, which represent the Fund’s cash position, are listed last.

Issuer	Shares	Value
Common stocks 99.69%		$5,344,852
(Cost $6,792,857)
Aerospace 4.10%		220,108
Northrop Grumman Corp.	2,800	220,108
Banking 4.08%		218,570
Bank of America Corp.	5,500	218,570
Biotechnology 2.80%		150,216
Amgen, Inc. *	3,300	150,216
Cable & Television 2.82%		151,050
Viacom, Inc., Class B *	3,800	151,050
Cosmetics & Toiletries 2.64%		141,767
Kimberly-Clark Corp.	2,175	141,767
Electronics 0.50%		26,715
Tyco Electronics, Ltd.	812	26,715
Energy 3.17%		170,016
Sempra Energy	3,200	170,016
Financial Services 28.31%		1,517,611
Capital One Financial Corp.	4,850	223,245
Citigroup, Inc.	10,125	240,064
Discover Financial Services	675	10,186
Federal Home Loan Mortgage Corp.	9,050	227,879
Federal National Mortgage Association	7,275	201,154
JP Morgan Chase & Company	4,125	167,681
Lehman Brothers Holdings, Inc.	2,950	150,420
Morgan Stanley	4,600	193,752
Washington Mutual, Inc.	6,975	103,230
Food & Beverages 3.36%		180,007
Kraft Foods, Inc., Class A	5,775	180,007
Healthcare Products 7.62%		408,499
Boston Scientific Corp. *	13,200	166,188
Covidien, Ltd.	812	34,745
Johnson & Johnson	3,350	207,566

See notes to financial statements

Classic Value Mega Cap Fund | Annual report

12

F I N A N C I A L  S T A T E M E N T S

Issuer	Shares	Value
Healthcare Services 3.31%		$177,420
Cardinal Health, Inc.	3,000	177,420
Insurance 11.89%		637,477
ACE, Ltd.	2,600	146,224
Allstate Corp.	5,425	258,935
Chubb Corp.	2,275	115,798
MetLife, Inc.	2,000	116,520
International Oil 1.97%		105,414
BP PLC, SADR	1,625	105,414
Manufacturing 0.61%		32,529
Tyco International, Ltd.	812	32,529
Pharmaceuticals 6.69%		358,996
Bristol-Myers Squibb Company	7,625	172,401
Pfizer, Inc.	8,375	186,595
Retail Trade 7.63%		408,982
Home Depot, Inc.	3,875	102,881
Lowe’s Companies, Inc.	4,650	111,460
Wal-Mart Stores, Inc.	3,925	194,641
Software 3.24%		173,858
Microsoft Corp.	3,400	92,548
Oracle Corp. *	4,325	81,310
Telecommunications Equipment & Services 4.95%		265,617
Alcatel-Lucent, SADR	45,250	265,617
	Principal
	amount	Value
Repurchase agreements 1.27%		$68,000
(Cost $68,000)
Repurchase Agreement with State Street Corp. dated 2-29-08 at
2.35% to be repurchased at $68,013 on 3-3-08, collateralized
by $65,000 Federal National Mortgage Association, 5.50%, due
7-18-16 (valued at $71,419, including interest)	$68,000	68,000
Total investments (Cost $6,860,857)† 100.96%		$5,412,852
Liabilities in excess of other assets (0.96%)		($51,551)
Total net assets 100.00%		$5,361,301

Percentages are stated as a percent of net assets.

SADR Sponsored American Depositary Receipt

* Non-income producing.

† At February 29, 2008, the aggregate cost of investment securities for federal income tax purposes was $6,866,490. Net unrealized depreciation aggregated $1,453,638, of which $44,548 related to appreciated investment securities and $1,498,186 related to depreciated investment securities.

See notes to financial statements

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13

F I N A N C I A L  S T A T E M E N T S

Financial statements

Statement of assets and liabilities 2-29-08

This Statement of Assets and Liabilities is the Fund’s balance sheet. It shows the value of what the Fund owns, is due and owes. You’ll also find the net asset value and the maximum public offering price per share.

Assets
Investments, at value (cost $6,792,857)	$5,344,852
Repurchase agreement, at value (cost $68,000) (Note 2)	68,000
Total investments, at value (cost $6,860,857)	5,412,852
Cash	2,961
Receivable for fund shares sold	48
Dividends and interest receivable (net of tax)	7,213
Other assets	2
Total assets	5,423,076
Liabilities
Payable for fund shares repurchased	7,898
Payable to affiliates
Fund administration fees	172
Transfer agent fees	1,248
Distribution and service fees	483
Investment management fees	10,383
Other payables and accrued expenses	41,591
Total liabilities	61,775
Net assets
Capital paid-in	$7,080,863
Undistributed net investment income	7,815
Accumulated undistributed net realized gain (loss) on investments	(279,372)
Net unrealized appreciation (depreciation) on investments	(1,448,005)
Net assets	$5,361,301

See notes to financial statements

Classic Value Mega Cap Fund | Annual report

14

F I N A N C I A L  S T A T E M E N T S

Statement of assets and liabilities continued

Net asset value per share
The Fund has an unlimited number of shares authorized with no par value.
Net asset value is calculated by dividing the net assets of each class of
shares by the number of outstanding shares in the class.
Class A
Net assets	$4,541,673
Shares outstanding	597,282
Net asset value and redemption price per share	$7.60
Class B1
Net assets	$145,430
Shares outstanding	19,125
Net asset value and offering price per share	$7.60
Class C1
Net assets	$459,587
Shares outstanding	60,407
Net asset value and offering price per share	$7.61
Class I
Net assets	$130,852
Shares outstanding	17,199
Net asset value, and offering price per share	$7.61
Class R1
Net assets	$83,759
Shares outstanding	11,032
Net asset value, offering price and redemption price per share	$7.59
Maximum public offering price per share
Class A (net asset value per share ÷ 95%)2	$8.00

¹ Redemption price per share is equal to the net asset value less any applicable contingent deferred sales charge.

² On single retail sales of less than $50,000. On sales of $50,000 or more and on group sales the offering price is reduced.

See notes to financial statements

Annual report | Classic Value Mega Cap Fund

15

F I N A N C I A L  S T A T E M E N T S

Statement of operations For the year ended 2-29-08

This 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.

Investment income
Dividends	$147,749
Interest	14,576
Less foreign taxes withheld	(615)
Total investment income	161,710
Expenses
Investment management fees (Note 3)	50,592
Distribution and service fees (Note 3)	18,695
Transfer agent fees (Note 3)	6,350
Fund administration fees (Note 3)	2,129
Blue sky fees (Note 3)	64,675
Audit and legal fees	34,358
Printing and postage fees (Note 3)	4,372
Custodian fees	14,178
Trustees’ fees (Note 4)	215
Registration and filing fees	10,606
Miscellaneous	95
Total expenses	206,265
Less expense reductions (Note 3)	(121,245)
Net expenses	85,020
Net investment income	76,690
Realized and unrealized gain (loss)
Net realized gain (loss) on investments in unaffiliated issuers	(144,795)
	(144,795)
Change in net unrealized appreciation (depreciation) of
investments in unaffiliated issuers	(1,448,005)
	(1,448,005)
Net realized and unrealized gain (loss)	(1,592,800)
Increase (decrease) in net assets from operations	($1,516,110)

See notes to financial statements

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F I N A N C I A L  S T A T E M E N T S

Statement of changes in net assets

This Statement of Changes in Net Assets show how the value of the Fund’s net assets has changed since inception. The difference reflects earnings less expenses, any investment gains and losses, distributions, if any, paid to shareholders and the net of Fund share transactions.

	Year
	ended
	2-29-08
Increase (decrease) in net assets
From operations
Net investment income	$76,690
Net realized gain (loss)	(144,795)
Change in net unrealized appreciation (depreciation)	(1,448,005)
Increase (decrease) in net assets resulting from operations	(1,516,110)
Distributions to shareholders
From net investment income
Class A	(65,289)
Class B	(691)
Class C	(2,761)
Class I	(2,886)
Class R1	(1,138)
From net realized gain
Class A	(114,341)
Class B	(2,856)
Class C	(11,361)
Class I	(3,867)
Class R1	(2,159)
Total distributions	(207,349)
From Fund share transactions (Note 6)	7,084,760
Total increase (decrease)	5,361,301
Net assets
Beginning of year	—
End of year	$5,361,301
Undistributed net investment income	$7,815

See notes to financial statements

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F I N A N C I A L  S T A T E M E N T S

Financial highlights

The Financial Highlights show how the Fund’s net asset value for a share has changed since inception.

CLASS A SHARES
Period ended	2-29-081
Per share operating performance
Net asset value, beginning of period	$10.00
Net investment income2	0.13
Net realized and unrealized gain
(loss) on investments	(2.23)
Total from investment operations	(2.10)
Less distributions
From net investment income	(0.11)
From net realized gain	(0.19)
	(0.30)
Net asset value, end of period	$7.60
Total return3,4 (%)	(21.28)
Ratios and supplemental data
Net assets, end of period (in millions)	$5
Ratios (as a percentage of average net assets):
Expenses before reductions	2.52
Expenses net of fee waivers, if any	1.37
Expenses net of all fee waivers and credits	1.37
Net investment income	1.34
Portfolio turnover (%)	38

¹ Class A shares began operations on 3-1-07.

² Based on the average of the shares outstanding.

³ Assumes dividend reinvestment.

⁴ Total returns would have been lower had certain expenses not been reduced during the period shown.

See notes to financial statements

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F I N A N C I A L  S T A T E M E N T S

Financial highlights

CLASS B SHARES
Period ended	2-29-081
Per share operating performance
Net asset value, beginning of period	$10.00
Net investment income2	0.05
Net realized and unrealized gain
(loss) on investments	(2.21)
Total from investment operations	(2.16)
Less distributions
From net investment income	(0.05)
From net realized gain	(0.19)
	(0.24)
Net asset value, end of period	$7.60
Total return3,4 (%)	(21.85)
Ratios and supplemental data
Net assets, end of period (in millions)	— 5
Ratios (as a percentage of average net assets):
Expenses before reductions	11.98
Expenses net of fee waivers, if any	2.12
Expenses net of all fee waivers and credits	2.12
Net investment income	0.58
Portfolio turnover (%)	38

¹ Class B shares began operations on 3-1-07.

² Based on the average of the shares outstanding.

³ Assumes dividend reinvestment.

⁴ Total returns would have been lower had certain expenses not been reduced during the period shown.

⁵ Less than $500,000.

See notes to financial statements

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F I N A N C I A L  S T A T E M E N T S

Financial highlights

CLASS C SHARES
Period ended	2-29-081
Per share operating performance
Net asset value, beginning of period	$10.00
Net investment income2	0.06
Net realized and unrealized gain
(loss) on investments	(2.21)
Total from investment operations	(2.15)
Less distributions
From net investment income	(0.05)
From net realized gain	(0.19)
	(0.24)
Net asset value, end of period	$7.61
Total return3,4 (%)	(21.75)
Ratios and supplemental data
Net assets, end of period (in millions)	— 5
Ratios (as a percentage of average net assets):
Expenses before reductions	6.38
Expenses net of fee waivers, if any	2.12
Expenses net of all fee waivers and credits	2.12
Net investment income	0.68
Portfolio turnover (%)	38

¹ Class C shares began operations on 3-1-07.

² Based on the average of the shares outstanding.

³ Assumes dividend reinvestment.

⁴ Total returns would have been lower had certain expenses not been reduced during the period shown.

⁵ Less than $500,000.

See notes to financial statements

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F I N A N C I A L  S T A T E M E N T S

Financial highlights

CLASS I SHARES
Period ended	2-29-081
Per share operating performance
Net asset value, beginning of period	$10.00
Net investment income2	0.17
Net realized and unrealized gain
(loss) on investments	(2.23)
Total from investment operations	(2.06)
Less distributions
From net investment income	(0.14)
From net realized gain	(0.19)
	(0.33)
Net asset value, end of period	$7.61
Total return3,4 (%)	(20.87)
Ratios and supplemental data
Net assets, end of period (in millions)	— 5
Ratios (as a percentage of average net assets):
Expenses before reductions	13.02
Expenses net of fee waivers, if any	0.97
Expenses net of all fee waivers and credits	0.97
Net investment income	1.80
Portfolio turnover (%)	38

¹ Class I shares began operations on 3-1-07.

² Based on the average of the shares outstanding.

³ Assumes dividend reinvestment.

⁴ Total returns would have been lower had certain expenses not been reduced during the period shown.

⁵ Less than $500,000.

See notes to financial statements

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F I N A N C I A L  S T A T E M E N T S

Financial highlights

CLASS R1 SHARES
Period ended	2-29-081
Per share operating performance
Net asset value, beginning of period	$10.00
Net investment income2	0.11
Net realized and unrealized gain
(loss) on investments	(2.23)
Total from investment operations	(2.12)
Less distributions
From net investment income	(0.10)
From net realized gain	(0.19)
	(0.29)
Net asset value, end of period	$7.59
Total return3,4 (%)	(21.46)
Ratios and supplemental data
Net assets, end of period (in millions)	— 5
Ratios (as a percentage of average net assets):
Expenses before reductions	13.76
Expenses net of fee waivers, if any	1.65
Expenses net of all fee waivers and credits	1.64
Net investment income	1.08
Portfolio turnover (%)	38

¹ Class R1 shares began operations on 3-1-07.

² Based on the average of the shares outstanding.

³ Assumes dividend reinvestment.

⁴ Total returns would have been lower had certain expenses not been reduced during the period shown.

⁵ Less than $500,000.

See notes to financial statements

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Notes to financial statements

1. Organization

John Hancock Classic Value Mega Cap Fund (the Fund) is a non-diversified series of John Hancock Funds III (the Trust). The Trust was established as a Massachusetts business trust on June 9, 2005. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end investment management company. The investment objective of the Fund is to seek long-term growth of capital.

John Hancock Life Insurance Company of New York (John Hancock New York) is a wholly owned subsidiary of John Hancock Life Insurance Company (U.S.A.) (John Hancock USA). John Hancock USA and John Hancock New York are indirect wholly owned subsidiaries of The Manufacturers Life Insurance Company (Manulife), which in turn is a wholly owned subsidiary of Manulife Financial Corporation (MFC), a publicly traded company. MFC and its subsidiaries are known collectively as “Manulife Financial.”

John Hancock Investment Management Services, LLC (the Adviser), a Delaware limited liability company controlled by John Hancock USA, serves as investment adviser for the Trust and John Hancock Funds, LLC (the Distributor), a Delaware limited liability company, an affiliate of the Adviser, serves as principal underwriter.

The Board of Trustees have authorized the issuance of multiple classes of shares of the Fund, including classes designated as Class A, Class B, Class C, Class I and Class R1 shares. Class A, Class B and Class C shares are open to all retail investors. Class I shares are offered without any sales charge to various institutional and certain individual investors. Class R1 shares are available only to certain retirement plans. The shares of each class represent an interest in the same portfolio of investments of the Fund, and have equal rights as to voting,  redemptions, dividends and liquidation, except that certain expenses, subject to the approval of the Board of Trustees, may be applied differently to each class of shares in accordance with current regulations of the Securities and Exchange Commission (SEC) and the Internal Revenue Service. Shareholders of a class that bear distribution and service expenses under the terms of a distrib ution plan have exclusive voting rights to that distribution plan. Class B shares will convert to Class A shares eight years after purchase.

The Adviser and other affiliates of John Hancock USA owned 476,456, 10,283, 10,282, 10,398 and 10,348 shares of beneficial interest of Class A, Class B, Class C, Class I and Class R1, respectively, on February 29, 2008.

2. Significant accounting policies

In the preparation of the financial statements, the Fund follows the policies described below. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results may differ from these estimates.

Security valuation

The net asset value of the shares of the Fund is determined daily as of the close of the New York Stock Exchange (NYSE), normally at 4:00 P.M., Eastern Time. Short-term debt investments that have a remaining maturity of 60 days or less are valued at amortized cost, and thereafter assume a constant amortization to maturity of any discount or premium, which approximates market value. All other securities held by the Fund are valued at the last sale price or official closing price (closing bid price or last evaluated quote if no sale has occurred)

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as of the close of business on the principal securities exchange (domestic or foreign) on which they trade or, lacking any sales, at the closing bid price. Securities traded only in the over-the-counter market are valued at the last bid price quoted by brokers making markets in the securities at the close of trading. Securities for which there are no such quotations, principally debt securities, are valued based on the evaluated prices provided by an independent pricing service, which utilizes both dealer-supplied and electronic data processing techniques, which take into account factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other market data.

Other assets and securities for which no such quotations are readily available are valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees. Generally, trading in non-U.S. securities is substantially completed each day at various times prior to the close of trading on the NYSE. The values of such securities used in computing the net asset value of a Fund’s shares are generally determined as of such times. Occasionally, significant events that affect the values of such securities may occur between the times at which such values are generally determined and the close of the NYSE. Upon such an occurrence, these securities will be valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees.

In deciding whether to make a fair value adjustment to the price of a security, the Board of Trustees or their designee may review a variety of factors, including developments in foreign markets, the performance of U.S. securities markets and the performance of instruments trading in U.S. markets that represent foreign securities and baskets of foreign securities. The Fund may also fair value securities in other situations, for example, when a particular foreign market is closed, but the Fund is calculating the net asset value. In view of these factors, it is likely that Funds investing significant amounts  of assets in securities in foreign markets will be fair valued more frequently than Funds investing significant amounts of assets in frequently traded, U.S. exchange listed securities of large-capitalization U.S. issuers.

For purposes of determining when fair value adjustments may be appropriate with respect to Funds that invest in securities in foreign markets that close prior to the NYSE, the Fund will, on an ongoing basis, monitor for “significant market events.” A significant market event may be a certain percentage change in the value of an index or of certain Exchange Traded Funds that track foreign markets in which Funds have significant investments. If a significant market event occurs due to a change in the value of the index or of Exchange Traded Funds, the pricing for the Fund will promptly be reviewed and potential adjustments to the net asset value of the Fund will be recommended to the Trust’s Pricing Committee when applicable.

Fair value pricing of securities is intended to help ensure that the net asset value of the Fund’s shares reflects the value of the Fund’s securities as of the close of the NYSE (as opposed to a value which is no longer accurate as of such close), thus limiting the opportunity for aggressive traders to purchase shares of the Fund at deflated prices, reflecting stale security valuations, and to promptly sell such shares at a gain. However, a security’s valuation may differ depending on the method used for determining value and no assurance can be given that fair value pricing of securities will successfully eliminate all potential opportunities for such trading gains.

New accounting pronouncement

In September 2006, Financial Accounting Standards Board (FASB) Standard No. 157,  Fair Value Measurements (FAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. FAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosure about fair value measurements. As of February 29, 2008, management does not believe the adoption of FAS 157 will impact the amounts reported in the financial statements; however, additional disclosures regarding pricing sources will be

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required about the inputs used to develop the measurements of fair value and the related realized and unrealized gain/loss for certain securities valued by significant unobservable market inputs.

Guarantees and indemnifications

Under the Trust’s organizational documents, its Officers and Trustees are indemnified against certain liability arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust that have not yet occurred.

Repurchase agreements

The Fund may enter into repurchase agreements. When the Fund enters into a repurchase agreement through its custodian, it receives delivery of securities, the amount of which at the time of purchase and each subsequent business day is required to be maintained at such a level that the market value is generally at least 102% of the repurchase amount. The Fund will take constructive receipt of all securities underlying the repurchase agreements it has entered into until such agreements expire. If the seller defaults, the Fund would suffer a loss to the extent that proceeds from the sale of underlying securities were less than the repurchase amount. The Fund may enter into repurchase agreements maturing within seven days with domestic dealers, banks or other financial institutions deemed to be creditworthy by the Adviser. Collateral for certain tri-party repurchase agreements is held at the custodian bank in a segregated account for the benefit of the Fund and the counterpa rty.

Security transactions and related investment income

Investment security transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment transactions are reported on trade date. Interest income is accrued as earned. Dividend income and distributions to shareholders are recorded  on the ex-dividend date. Foreign dividends are recorded on the ex-date or when the Fund becomes aware of the dividends from cash collections. Discounts/premiums are accreted/ amortized for financial reporting purposes. Non-cash dividends are recorded at the fair market value of the securities received. Debt obligations may be placed in a non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful, based upon consistently applied procedures.

From time to time, the Fund may invest in Real Estate Investment Trusts (REITs) and, as a result, will estimate the components of distributions from these securities. Distributions from REITs received in excess of income are recorded as a reduction of cost of investments and/or as a realized gain.

The Fund uses the specific identification method for determining realized gain or loss on investments for both financial statement and federal income tax reporting purposes.

Allocations of income and expenses

All income, expenses (except class-specific expenses), and realized and unrealized gain/ loss are allocated to each class of shares based upon the relative net assets of each class. Dividends to shareholders from net investment income are determined at a class level and distributions from capital gains are determined at a Fund level.

Expenses not directly attributable to the Fund or share classes are allocated based on the relative share of net assets of the Fund or share class at the time the expense was incurred. Class-specific expenses, as detailed in Note 3, are accrued daily and charged directly to the respective share classes.

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 that is distributed to shareholders. Therefore, no federal income tax provision is required. Net capital losses of $273,739 that are attributable to security transactions

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incurred after October 31, 2007, are treated as arising on March 1, 2008, the first day of the Fund’s next taxable year.

The Fund has adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement 109 (FIN 48), at the beginning of the Fund’s fiscal year. FIN 48 prescribes a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not have a material impact on the Fund’s financial statements. The Fund’s federal tax return for this fiscal year remains subject to examination by the Internal Revenue Service.

Distribution of income and gains

The Fund records distributions to shareholders from net investment income and net realized gains, if any, on the ex-dividend date. During the year ended February 29, 2008, the tax character of distributions paid was as follows: ordinary income $207,349. Distributions paid by the Fund with respect to each class of shares are calculated in the same manner, at the same time and are in the same amount, except for the effect of expenses that may be applied differently to each class.

As of February 29, 2008, the components of distributable earnings on a tax basis included $7,815 of undistributed ordinary income.

Such distributions and distributable earnings, on a tax basis, are determined in conformity with income tax regulations, which may differ from accounting principles generally accepted in the United States of America. Distributions in excess of tax basis earnings and profits, if any, are reported in the Fund’s financial statements as a return of capital.

Capital accounts within financial statements are adjusted for permanent book/tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book/tax differences will reverse in a subsequent period. Permanent book/tax differences are primarily attributable to derivative transactions, foreign currency transactions and investments in passive foreign investment companies.

3. Investment advisory and other agreements

The Trust has entered into an Investment Advisory Agreement with the Adviser. The Adviser is responsible for managing the corporate and business affairs of the Trust and for selecting and compensating subadvisers to handle the investment of the assets of the Fund, subject to the supervision of the Trust’s Board of Trustees. As compensation for its services, the Adviser receives an advisory fee from the Trust. Under the Advisory Agreement, the Fund pays a monthly management fee to the Adviser equivalent, on an annual basis, to the sum of: (a) 0.85% of the first $2,500,000,000 of the Fund’s daily net assets; (b) 0.825% of the next $2,500,000,000 of the Fund’s daily net assets; and (c) 0.80% of the Fund’s daily net assets in excess of $5,000,000,000. The Adviser has a subadvisory agreement with Pzena Investment Management, LLC. The Fund is not responsible for payment of the subadvisory fees.

The investment management fees incurred for the year ended February 29, 2008, were equivalent to an annual effective rate of 0.85% of the Fund’s average daily net assets.

Expense reimbursements

The Adviser has contractually agreed to reimburse or limit certain Fund level expenses to 0.07% of the Fund’s average annual net assets which are allocated pro rata to all share classes. This agreement excludes taxes, portfolio brokerage commissions, interest, advisory fees, Rule 12b-1 fees, transfer agency fees, blue sky fees, printing and postage and litigation and indemnification expenses and other extraordinary expenses not incurred in the ordinary course of the Fund’s business. In addition, fees incurred under any agreement or plans of the Fund dealing with services for the shareholders and others with beneficial interest in shares of the Fund, are excluded.

In addition, the Adviser has agreed to reimburse or limit certain expenses for each share class. This agreement excludes taxes, portfolio brokerage commissions, interest and litigation and indemnification expenses and other extraordinary expenses not incurred in

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the ordinary course of the Fund’s business. In addition, fees incurred under any agreement or plans of the Fund dealing with services for the shareholders and others with beneficial interest in shares of the Fund, are excluded. The reimbursements and limits are such that these expenses will not exceed 1.37% for Class A shares, 2.12% for Class B, 2.12% for Class C, 0.97% for Class I and 1.47% for Class R1. Accordingly, the expense reductions or reimbursements related to this agreement were $59,539, $12,724, $15,015, $18,023 and $15,667 for Class A, Class B, Class C, Class I and Class R1, respectively for the year ended February 29, 2008. The expense reimbursements and limits will continue in effect until June 30, 2009 and thereafter until terminated by the Adviser on notice to the Trust.

Fund administration fees

Pursuant to the Advisory Agreement, the Fund reimburses the Adviser for all expenses associated with providing the administrative, financial, legal, accounting and recordkeeping services of the Fund, including the preparation of all tax returns, annual, semiannual and periodic reports to shareholders and the preparation of all regulatory reports. These expenses are allocated based on the relative share of net assets of each class at the time the expense was incurred.

The fund administration fees incurred for the year ended February 29, 2008, were $2,129 with an annual effective rate of 0.04% of the Fund’s average daily net assets.

Distribution and shareholder servicing fees

The Trust has a Distribution Agreement with the Distributor. The Fund has adopted Distribution Plans with respect to Class A, Class B, Class C and Class R1, pursuant to Rule 12b-1 under the 1940 Act, to pay the Distributor for the services it provides as distributor of shares of the Fund. Accordingly, the Fund makes monthly payments to the Distributor at an annual rate not to exceed 0.30%, 1.00%, 1.00% and 0.50% of average daily net asset value of Class A, Class B, Class C and Class R1, respectively. The Trustees approved distribution and service fee payments of 0.25% of average net assets of Class A. A maximum of 0.25% of such payments may be  service fees, as defined by the Conduct Rules of Financial Industry Regulatory Authority (formerly the National Association of Securities Dealers). Under the Conduct Rules, curtailment of a portion of the Fund’s 12b-1 payments could occur under certain circumstances.

In addition, the Fund has also adopted a Service Plan for Class R1 shares. Under the Service Plan, the Fund may pay up to 0.25% of Class R1 average daily net asset value for certain other services. The Service Plan fees incurred for the year ended February 29, 2008, were equivalent to an annual effective rate of 0.17% of the Class R1 average daily net assets.

Sales charges

Class A shares are assessed up-front sales charges of up to 5.00% of net asset value of such shares. During the year ended February 29, 2008, the Fund was informed that the Distributor received net up-front sales charges of $28,227 with regard to sales of Class A shares. Of this amount, $4,584 was retained and used for printing prospectuses, advertising, sales literature and other purposes and $23,643 was paid as sales commissions to unrelated broker-dealers.

Class B shares that are redeemed within six years of purchase are subject to a contingent deferred sales charge (CDSC) at declining rates, beginning at 5.00% of the lesser of the current market value at the time of redemption or the original purchase cost of the shares being redeemed. Class C shares that are redeemed within one year of purchase are subject to a CDSC at a rate of 1.00% of the lesser of the current market value at the time of redemption or the original purchase cost of the shares being redeemed. Proceeds from the CDSCs are paid to the Distributor and are used, in whole or in part, to defray its expenses for providing distribution-related services to the Fund in connection with the sale of Class B and Class C shares. During the year ended February 29, 2008, CDSCs received by Distributor amounted to $152 for Class B shares and $931 for Class C shares.

Transfer agent fees

The Fund has a Transfer Agency Agreement with John Hancock Signature Services, Inc. (Signature

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Services), an indirect subsidiary of MFC. For Class A, Class B, Class C, Class I and Class R1 shares, the Fund pays a monthly transfer agent fee at an annual rate of 0.05% of each class’ average daily net assets, plus a fee based on the number of shareholder accounts and reimbursement for certain out-of-pocket expenses. Expenses not directly attributable to a particular class of shares are aggregated and allocated to each class on the basis of its relative net asset value. The Fund pays a monthly fee which is based on an annual rate of $15.00 for each Class A shareholder account, $17.50 for each Class B shareholder account, $16.50 for each Class C shareholder account and $15.00 for each Class R1 shareholder account.

Signature Services has agreed to limit the transfer agent fees so that such fees do not exceed 0.20% annually of Class A, Class B, Class C, Class I and Class R1 share average daily net assets. This agreement is effective until December 31, 2008. Signature Services reserves the right to terminate this limitation in the future. There were no transfer agent fee reductions for Class A, Class B, Class C, Class I and Class R1 shares, respectively, during the year ended February 29, 2008.

In addition, Signature Services has voluntarily agreed to further limit transfer agent fees for Class R1 shares so that such fees do not exceed 0.05% annually of each class’s average daily net assets. For the year ended February 29, 2008, the transfer agent fees reductions for Class R1 were $198.

In May 2007, the Fund began receiving earnings credits from its transfer agent as a result of uninvested cash balances. These credits are used to reduce a portion of the Fund’s transfer agent fees and out-of-pocket expenses. During the year ended February 29, 2008, the Fund’s transfer agent fees and out-of-pocket expenses were reduced by $79 for transfer agent credits earned.

Class level expenses for the year ended February 29, 2008, were as follows:

	Distribution and	Transfer	Blue	Printing and
Share class	service fees	agent fees	sky fees	postage fees
Class A	$12,991	$5,023	$11,555	$3,535
Class B	1,292	264	11,277	195
Class C	3,532	717	11,277	195
Class I	—	78	16,329	241
Class R1	880	268	14,237	206
Total	$18,695	$6,350	$64,675	$4,372

4. Trustees’ fees

The Trust compensates each Trustee who is not an employee of the Adviser or its affiliates. Total Trustees’ expenses are allocated to the Fund based on its average daily net asset value.

5. Line of credit

The Fund has entered into an agreement which enables them to participate in a $100 million unsecured committed line of credit with State Street Corporation. Borrowings will be made solely to temporarily finance the repurchase of capital shares. Interest is charged to the Fund based on its borrowings at a rate per annum equal to the Federal Funds rate plus 0.50% . In addition, a commitment fee of 0.05% per annum, payable at the end of each calendar  quarter, based on the average daily-unused portion of the line of credit, is charged to the Fund on a prorated basis based on average net assets. Effective October 15, 2007, the commitment fee was changed from 0.07% to 0.05% . For the year ended February 29, 2008, there were no borrowings under the line of credit.

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6. Fund share transactions

Share activities for the Fund for the year ended February 29, 2008, were as follows:

	Year ended 2-29-08
	Shares	Amount
Class A shares
Sold	644,426	$6,413,956
Distributions reinvested	20,663	172,537
Repurchased	(67,807)	(594,397)
Net increase (decrease)	597,282	$5,992,096
Class B shares
Sold	20,319	$195,176
Distributions reinvested	424	3,547
Repurchased	(1,618)	(13,795)
Net increase (decrease)	19,125	$184,928
Class C shares
Sold	72,248	$710,339
Distributions reinvested	1,482	12,408
Repurchased	(13,323)	(110,704)
Net increase (decrease)	60,407	$612,043
Class I shares
Sold	20,337	$205,270
Distributions reinvested	809	6,753
Repurchased	(3,947)	(30,867)
Net increase (decrease)	17,199	$181,156
Class R1 shares
Sold	15,442	$154,310
Distributions reinvested	362	3,018
Repurchased	(4,772)	(42,791)
Net increase (decrease)	11,032	$114,537
Net increase (decrease)	705,045	$7,084,760

7. Purchases and sales of securities 

Purchases and proceeds from sales or maturities of securities, other than short-term securities and obligations of the U.S. government, during the year ended February 29, 2008, aggregated $9,133,373 and $2,195,721, respectively.     

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Auditors’ report

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of John Hancock Funds III and Shareholders of John Hancock Classic Value Mega Cap Fund,

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of John Hancock Classic Value Mega Cap Fund (the Fund) at February 29, 2008, and the results of its operations, the changes in its net assets and the financial highlights for the period March 1, 2007 (commencement of operations), through February 29, 2008, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of investments at February 29, 2008 by correspondence with the custodian and brokers, provides a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
Boston, Massachusetts
April 18, 2008

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Tax information

Unaudited

For federal income tax purposes, the following information is furnished with respect to the distributions of the Fund, if any, paid during its taxable year ended February 29, 2008.

With respect to the ordinary dividends paid by the Fund for the fiscal year ended February 29, 2008, 63.16% of the dividends qualifies for the corporate dividends-received deduction.

The Fund hereby designates the maximum amount allowable of its net taxable income as qualified dividend income as provided in the Jobs and Growth Tax Relief Reconciliation Act of 2003. This amount will be reflected on Form 1099-DIV for the calendar year 2008.

Shareholders will be mailed a 2008 U.S. Treasury Department Form 1099-DIV in January 2009. This will reflect the total of all distributions that are taxable for calendar year 2008.

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Trustees and Officers

This chart provides information about the Trustees and Officers who oversee your John Hancock fund. Officers elected by the Trustees manage the day-to-day operations of the Fund and execute policies formulated by the Trustees.

Independent Trustees
Name, Year of Birth		Number of
Position(s) held with Fund	Trustee	John Hancock
Principal occupation(s) and other	of Fund	funds overseen
directorships during past 5 years	since1	by Trustee
James F. Carlin, Born: 1940	2007	55
Chairman (since December 2007); Director and Treasurer, Alpha Analytical Laboratories, Inc. (chemical
analysis) (since 1985); Part Owner and Treasurer, Lawrence Carlin Insurance Agency, Inc. (since 1995);
Part Owner and Vice President, Mone Lawrence Carlin Insurance Agency, Inc. (until 2005); Chairman
and Chief Executive Officer, Carlin Consolidated, Inc. (management/investments) (since 1987); Trustee,
Massachusetts Health and Education Tax Exempt Trust (1993–2003).
William H. Cunningham, Born: 1944	2007	55
Professor, University of Texas at Austin (since 1971); former Chancellor, University of Texas System and
former President, University of Texas at Austin (until 2001); Chairman and Chief Executive Officer, IBT
Technologies (until 2001); Director of the following: Hicks Acquisition Company I, Inc. (since 2007);
Hire.com (until 2004), STC Broadcasting, Inc. and Sunrise Television Corp. (until 2001), Symtx, Inc.
(electronic manufacturing) (since 2001), Adorno/Rogers Technology, Inc. (until 2004), Pinnacle
Foods Corporation (until 2003), rateGenius (until 2003), Lincoln National Corporation (insurance)
(since 2006), Jefferson-Pilot Corporation (diversified life insurance company) (until 2006), New
Century Equity Holdings (formerly Billing Concepts) (until 2001), eCertain (until 2001), ClassMap.com
(until 2001), Agile Ventures (until 2001), AskRed.com (until 2001), Southwest Airlines (since 2000),
Introgen (manufacturer of biopharmaceuticals) (since 2000) and Viasystems Group, Inc. (electronic
manufacturer) (until 2003); Advisory Director, Interactive Bridge, Inc. (college fundraising) (until 2001);
Advisory Director, Q Investments (until 2003); Advisory Director, JPMorgan Chase Bank (formerly Texas
Commerce Bank–Austin), LIN Television (until 2008), WilTel Communications (until 2003) and Hayes
Lemmerz International, Inc. (diversified automotive parts supply company) (since 2003).
Charles L. Ladner,2 Born: 1938	2007	55
Chairman and Trustee, Dunwoody Village, Inc. (retirement services) (until 2003); Senior Vice President
and Chief Financial Officer, UGI Corporation (public utility holding company) (retired 1998); Vice
President and Director, AmeriGas, Inc. (retired 1998); Director, AmeriGas Partners, L.P. (gas distribution)
(until 1997); Director, EnergyNorth, Inc. (until 1997); Director, Parks and History Association (until 2005).
John A. Moore,2 Born: 1939	2007	55
President and Chief Executive Officer, Institute for Evaluating Health Risks (nonprofit institution)
(until 2001); Senior Scientist, Sciences International (health research) (until 2003); Former Assistant
Administrator and Deputy Administrator, Environmental Protection Agency; Principal, Hollyhouse
(consulting) (since 2000); Director, CIIT Center for Health Science Research (nonprofit research)
(until 2007).

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Independent Trustees (continued)
Name, Year of Birth		Number of
Position(s) held with Fund	Trustee	John Hancock
Principal occupation(s) and other	of Fund	funds overseen
directorships during past 5 years	since1	by Trustee
Patti McGill Peterson,2 Born: 1943	2007	55
Senior Associate, Institute for Higher Education Policy (since 2007); Executive Director, Council for
International Exchange of Scholars and Vice President, Institute of International Education (until 2007);
Senior Fellow, Cornell Institute of Public Affairs, Cornell University, Ithaca, NY (until 1998); Former
President, Wells College, Aurora, NY, and St. Lawrence University, Canton, NY; Director, Niagara
Mohawk Power Corporation (until 2003); Director, Ford Foundation, International Fellowships Program
(since 2002); Director, Lois Roth Endowment (since 2002); Director, Council for International Educational
Exchange (since 2003).
Steven R. Pruchansky, Born: 1944	2007	55
Chairman and Chief Executive Officer, Greenscapes of Southwest Florida, Inc. (since 2000); Director and
President, Greenscapes of Southwest Florida, Inc. (until 2000); Managing Director, JonJames, LLC (real
estate) (since 2000); Director, First Signature Bank & Trust Company (until 1991); Director, Mast Realty
Trust (until 1994); President, Maxwell Building Corp. (until 1991).
Non-Independent Trustees3
Name, Year of Birth		Number of
Position(s) held with Fund	Trustee	John Hancock
Principal occupation(s) and other	of Fund	funds overseen
directorships during past 5 years	since1	by Trustee
James R. Boyle, Born: 1959	2007	265
Executive Vice President, Manulife Financial Corporation (since 1999); President, John Hancock Variable
Life Insurance Company (since March 2007); Executive Vice President, John Hancock Life Insurance
Company (since 2004); Chairman and Director, John Hancock Advisers, LLC (the Adviser), John Hancock
Funds, LLC and The Berkeley Financial Group, LLC (The Berkeley Group) (holding company) (since 2005);
Senior Vice President, The Manufacturers Life Insurance Company (U.S.A.) (until 2004).

Annual report | Classic Value Mega Cap Fund

Principal officers who are not Trustees
Name, Year of Birth
Position(s) held with Fund	Officer
Principal occupation(s) and other	of Fund
directorships during past 5 years	since
Keith F. Hartstein, Born: 1956	2007
President and Chief Executive Officer
Senior Vice President, Manulife Financial Corporation (since 2004); Director, President and Chief
Executive Officer, the Adviser, The Berkeley Group and John Hancock Funds, LLC (since 2005); Director,
MFC Global Investment Management (U.S.), LLC (MFC Global (U.S.)) (since 2005); Director, John
Hancock Signature Services, Inc. (since 2005); President and Chief Executive Officer, John Hancock
Investment Management Services, LLC (since 2006); President and Chief Executive Officer, John Hancock
Funds, John Hancock Funds II, John Hancock Funds III and John Hancock Trust (since 2005); Director,
Chairman and President, NM Capital Management, Inc. (since 2005); Member, Investment Company
Institute Sales Force Marketing Committee (since 2003); President and Chief Executive Officer, MFC
Global (U.S.) (2005–2006); Executive Vice President, John Hancock Funds, LLC (until 2005).
Thomas M. Kinzler, Born: 1955	2007
Secretary and Chief Legal Officer
Vice President and Counsel, John Hancock Life Insurance Company (U.S.A.) (since 2006); Secretary and
Chief Legal Officer, John Hancock Funds and John Hancock Funds II (since 2006); Chief Legal Officer
and Assistant Secretary, John Hancock Trust (since 2006); Vice President and Associate General Counsel,
Massachusetts Mutual Life Insurance Company (1999–2006); Secretary and Chief Legal Counsel, MML
Series Investment Fund (2000–2006); Secretary and Chief Legal Counsel, MassMutual Institutional Funds
(2000–2004); Secretary and Chief Legal Counsel, MassMutual Select Funds and MassMutual Premier
Funds (2004–2006).
Francis V. Knox, Jr., Born: 1947	2007
Chief Compliance Officer
Vice President and Chief Compliance Officer, John Hancock Investment Management Services, LLC,
the Adviser and MFC Global (U.S.) (since 2005); Vice President and Chief Compliance Officer, John
Hancock Funds, John Hancock Funds II, John Hancock Funds III and John Hancock Trust (since 2005);
Vice President and Assistant Treasurer, Fidelity Group of Funds (until 2004); Vice President and Ethics &
Compliance Officer, Fidelity Investments (until 2001).
Charles A. Rizzo, Born: 1957	2007
Chief Financial Officer
Chief Financial Officer, John Hancock Funds, John Hancock Funds II, John Hancock Funds III and John
Hancock Trust (since June 2007); Assistant Treasurer, Goldman Sachs Mutual Fund Complex (regis-
tered investment companies) (2005–June 2007); Vice President, Goldman Sachs (2005–June 2007);
Managing Director and Treasurer of Scudder Funds, Deutsche Asset Management (2003–2005);
Director, Tax and Financial Reporting, Deutsche Asset Management (2002–2003); Vice President and
Treasurer, Deutsche Global Fund Services (Deutsche Registered Investment Companies) (1999–2002).
Gordon M. Shone, Born: 1956	2007
Treasurer
Senior Vice President, John Hancock Life Insurance Company (U.S.A.) (since 2001); Treasurer, John
Hancock Funds (since 2006), John Hancock Funds II, John Hancock Funds III and John Hancock Trust
(since 2005); Vice President and Chief Financial Officer, John Hancock Trust (2003–2005); Vice President,
John Hancock Investment Management Services, Inc., John Hancock Advisers, LLC (since 2006) and The
Manufacturers Life Insurance Company (U.S.A.) (1998–2000).

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Principal officers who are not Trustees(continued)

Name, Year of Birth
Position(s) held with Fund	Officer
Principal occupation(s) and other	of Fund
directorships during past 5 years	since
John G. Vrysen, Born: 1955	2007
Chief Operating Officer
Senior Vice President, Manulife Financial Corporation (since 2006); Director, Executive Vice President
and Chief Operating Officer, the Adviser, The Berkeley Group and John Hancock Funds, LLC (since
June 2007); Executive Vice President and Chief Operating Officer, John Hancock Investment
Management Services, LLC (since December 2007); Chief Operating Officer, John Hancock Funds,
John Hancock Funds II, John Hancock Funds III and John Hancock Trust (since June 2007); Director,
Executive Vice President and Chief Financial Officer, the Adviser, The Berkeley Group and John Hancock
Funds, LLC (2005–2007); Executive Vice President and Chief Financial Officer, John Hancock Investment
Management Services, LLC (2005–2007); Executive Vice President and Chief Financial Officer, MFC
Global (U.S.) (2005 until August 2007); Director, John Hancock Signature Services, Inc. (since 2005);
Chief Financial Officer, John Hancock Funds, John Hancock Funds II, John Hancock Funds III and John
Hancock Trust (2005 until June 2007); Vice President and General Manager, John Hancock Fixed
Annuities, U.S. Wealth Management (2004–2005); Vice President, Operations, Manulife Wood Logan
(2000–2004).

The business address for all Trustees and Officers is 601 Congress Street, Boston, Massachusetts 02210-2805.

The Statement of Additional Information of the Fund includes additional information about members of the Board of Trustees of the Fund and is available without charge, upon request, by calling 1-800-225-5291.

¹ Each Trustee serves until resignation, retirement age or until his or her successor is elected.

² Member of Audit and Compliance Committee.

³ Non-Independent Trustee holds positions with the Fund’s investment adviser, underwriter and certain other affiliates.

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For more information

The Fund’s proxy voting policies, procedures and records are available without charge, upon request:

By phone	On the Fund’s Web site	On the SEC’s Web site
1-800-225-5291	www.jhfunds.com/proxy	www.sec.gov
Investment adviser	Custodian	Legal counsel
John Hancock Investment	State Street Bank & Trust Co.	Kirkpatrick & Lockhart
Management Services, LLC	2 Avenue de Lafayette	Preston Gates Ellis LLP
601 Congress Street	Boston, MA 02111	One Lincoln Street
Boston, MA 02210-2805		Boston, MA 02111-2950
	Transfer agent
Subadviser	John Hancock Signature	Independent registered
Pzena Investment	Services, Inc.	public accounting firm
Management, LLC	P.O. Box 9510	PricewaterhouseCoopers LLP
120 West 45th Street,	Portsmouth, NH 03802-9510	125 High Street
20th Floor		Boston, MA 02110
New York, NY 10036
Principal distributor
John Hancock Funds, LLC
601 Congress Street
Boston, MA 02210-2805

How to contact us
Internet	www.jhfunds.com
Mail	Regular mail:	Express mail:
	John Hancock Signature	John Hancock Signature
	Services, Inc.	Services, Inc.
	P.O. Box 9510	Mutual Fund Image Operations
	Portsmouth, NH 03802-9510	164 Corporate Drive
		Portsmouth, NH 03801
Phone	Customer service representatives	1-800-225-5291
	EASI-Line	1-800-338-8080
	TDD line	1-800-554-6713

A listing of month-end portfolio holdings is available on our Web site, www.jhfunds.com. A more detailed portfolio holdings summary is available on a quarterly basis 60 days after the fiscal quarter on our Web site or upon request by calling 1-800-225-5291, or on the SEC’s Web site, www.sec.gov.

Classic Value Mega Cap Fund | Annual report

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1-800-225-5291
1-800-554-6713 (TDD)
1-800-338-8080 EASI-Line
www.jhfunds.com

Now available:electronicdelivery

www.jhfunds.com/edelivery

This report is for the information of the shareholders of John Hancock Classic Value Mega Cap Fund.	3220A	2/08
It is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus.		4/08

ITEM 2. CODE OF ETHICS.

As of the end of the period, February 29, 2008, the registrant has adopted a code of ethics, as defined in Item 2 of Form N-CSR, that applies to its Chief Executive Officer and Chief Financial Officer (respectively, the principal executive officer, the principal financial officer, the “Covered Officers”). A copy of the code of ethics is filed as an exhibit to this Form N-CSR.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

The Board of Trustees of the Registrant has determined that it has one “audit committee financial expert” as that term is defined in Item 3(b) of Form N-CSR: Charles L. Ladner who is “independent” as that term is defined in Item 3(a) (2) of Form N-CSR.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

(a) Audit Fees
The aggregate fees billed for professional services rendered by the principal accountant, PricewaterhouseCoopers LLP (“PWC”) for the audits of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements amounted to $254,400 for the fiscal year ended February 29, 2008 (broken out as follows: John Hancock Classic Mega Cap Fund (commenced operations March 1, 2007) - $24,680, John Hancock Global Shareholder Yield Fund (commenced operations March 1, 2007) - $24,680, John Hancock Intrinsic Value Fund - $24,680, John Hancock Growth Opportunities Fund - $27,410, John Hancock Growth Fund $24,680, John Hancock International Growth Fund - $27,410, John Hancock Value Opportunities Fund - $24,680, John Hancock U.S. Core Fund - $24,680, John Hancock International Core Fund - $28,510 and John Hancock International Allocation Fund - $22,990) and $168,778 for the fisc al year ended February 28, 2007 (broken out as follows: John Hancock Intrinsic Value Fund - $19,913, John Hancock Growth Opportunities Fund - $19,913, John Hancock Growth Fund - $19,113, John Hancock International Growth Fund - $23,354, John Hancock Value Opportunities Fund - $19,913, John Hancock U.S. Core Fund - $19,113, John Hancock International Core Fund - $23,354 and John Hancock International Allocation Portfolio - $24,105).

(b) Audit-Related Services
Audit-related fees for assurance and related services by PWC amounted to $4,992 for the fiscal year ended February 29, 2008 for the 17f-2 count for the John Hancock International Allocation Fund and $34,744 for the fiscal year ended February 28, 2007 for out-of-pocket expenses (broken out as follows: John Hancock Intrinsic Value Fund - $4,343, John Hancock Growth Opportunities Fund - $4,343, John Hancock Growth Fund - $4,343, John Hancock International Growth Fund - $4,343, John Hancock Value Opportunities Fund - $4,343, John Hancock U.S. Core Fund - $4,343, John Hancock International Core Fund - $4,343 and John Hancock International Allocation Portfolio - $4,343) billed to the registrant or to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ong oing services to the registrant ("control affiliates"). The nature of the services comprising the out-of-pocket expenses was testing conversion of accounting records from one service provider to another involving multiple service providers in the registrant’s initial year.

(c) Tax Fees
The aggregate fees billed for professional services rendered by PWC for the tax compliance, tax advice and tax planning (“tax fees”) amounted to $74,200 for the fiscal year ended February 29, 2008 (broken out as follows: John Hancock Classic Mega Cap Fund - $7,360, John Hancock Global Shareholder Yield Fund - $7,360, John Hancock Intrinsic Value Fund - $7,360, John Hancock Growth Opportunities - $7,620, John Hancock Growth Fund - $7,360, John Hancock

International Growth Fund - $7,620, John Hancock Value Opportunities Fund - $7,360, John Hancock U.S. Core Fund - $7,360, John Hancock International Core Fund - $7,820 and John Hancock International Allocation Portfolio - $6,980) and $59,360 for the fiscal year ended February 28. 2007 (broken out as follows: John Hancock Intrinsic Value Fund - $7,420, John Hancock Growth Opportunities Fund - $7,420, John Hancock Growth Fund - $7,420, John Hancock International Growth Fund - $7,420, John Hancock Value Opportunities Fund - $7,420, John Hancock U.S. Core Fund - $7,420, John Hancock International Core Fund - $7,420 and John Hancock International Allocation Portfolio - $7,420). The nature of the services comprising the tax fees was the review of the registrant’s income and excise tax returns and tax distribution requirements.

(d) All Other Fees
There were no other fees for the fiscal year ended February 29, 2008. Other fees for the fiscal year ended February 28, 2007 amounted to $103,560 for review of merger activity; Growth Opportunities Fund - $45,280 and International Core Fund - $45,280 and $13,000 for the seed audit, billed to the registrant or to the control affiliates.

(e)(1) Audit Committee Pre-Approval Policies and Procedures:

The trust’s Audit Committee must pre-approve all audit and non-audit services provided by the independent registered public accounting firm (the “Auditor”) relating to the operations or financial reporting of the funds. Prior to the commencement of any audit or non-audit services to a fund, the Audit Committee reviews the services to determine whether they are appropriate and permissible under applicable law.

The trust’s Audit Committee has adopted policies and procedures to, among other purposes, provide a framework for the Committee’s consideration of audit-related and non-audit services by the Auditor. The policies and procedures require that any audit-related and non-audit service provided by the Auditor and any non-audit service provided by the Auditor to a fund service provider that relates directly to the operations and financial reporting of a fund are subject to approval by the Audit Committee before such service is provided. Audit-related services provided by the Auditor that are expected to exceed $50,000 per year/per fund are subject to specific pre-approval by the Audit Committee. Tax services provided by the Auditor that are expected to exceed $50,000 per year/per fund are subject to specific pre-approval by the Audit Committee. Other services provided by the Auditor that are expected to exceed $10,000 per year/per fund are subject to specific pre - -approval by the Audit Committee.

All audit services, as well as the audit-related and non-audit services that are expected to exceed the amounts stated above, must be approved in advance of provision of the service by formal resolution of the Audit Committee. At the regularly scheduled Audit Committee meetings, the Committee reviews a report summarizing the services, including fees, provided by the Auditor.

(e)(2) Services approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X:

Audit-Related Fees, Tax Fees and All Other Fees: There were no amounts that were approved by the Audit Committee pursuant to the de minimis exception under Rule 2-01 of Regulation S-X.

(f) According to PWC for the Reporting Period, the percentage of hours spent on the audit of the registrant's financial statements for the most recent fiscal year that were attributed to work performed by persons who were not full-time, permanent employees of principal accountant was less than 50%.

(g) The aggregate non-audit fees billed by PWC for non-audit services rendered to the registrant and rendered to the registrant's control affiliates for the fiscal year ended February 29, 2008 were $1,509,733 and for the fiscal year ended February 28, 2007 were $872,192.

(h) The registrant’s audit committee of the Board of Trustees has considered the provision of non-audit services that were rendered by PWC to the investment adviser and any control affiliate that provides services that were not pre-approved pursuant to paragraph (c) (7) (ii) of Rule 2-01 of Regulation S-X, to be compatible with maintaining PWC’s independence.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

The registrant has a separately-designated standing audit committee comprised of independent trustees. The members of the audit committee are as follows:

Dr. John A. Moore - Chairman
Charles L. Ladner
Patti McGill Peterson

ITEM 6. SCHEDULE OF INVESTMENTS.

Not applicable.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

Not applicable.

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

The registrant has adopted procedures by which shareholders may recommend nominees to the registrant's Board of Trustees. A copy of the procedures is filed as an exhibit to this Form N-CSR. See attached “John Hancock Funds – Governance Committee Charter”.

ITEM 11. CONTROLS AND PROCEDURES.

(a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. The registrant maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in this Form N-CSR is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such disclosure controls and procedures include controls and procedures designed to ensure that such information is accumulated and communicated to the registrant’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Within 90 days prior to the filing date of this Form N-CSR, the registrant had carried out an evaluation, under the supervision and with the participation of the registrant’s management, including the registrant's principal executive officer and the registrant’s principal financial officer, of the effectiveness of the design and operation of the registrant’s disclosure controls and procedures relating to information required to be disclosed on Form N-CSR. Based on such evaluation, the registrant’s principal executive officer and principal financial officer concluded that the registrant’s disclosure controls and procedures are operating effectively to ensure that:

(i) information required to be disclosed in this Form N-CSR is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission, and

(ii) information is accumulated and communicated to the registrant’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

(b) CHANGE IN REGISTRANT’S INTERNAL CONTROL: Not applicable.

ITEM 12. EXHIBITS.

(a)(1) See attached Code of Ethics.

(a)(2)(i) CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER.

(a)(2)(ii) CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER.

(b) CERTIFICATION PURSUANT TO Rule 30a-2(b) OF THE INVESTMENT COMPANY ACT OF 1940.

(c)(1) Submission of Matters to a Vote of Security Holders is attached. See attached “John Hancock Funds – Governance Committee Charter”.

(c)(2) Contact person at the registrant.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

John Hancock Funds III

By: /s/ Keith F. Hartstein
-------------------------------------
Keith F. Hartstein
President and Chief Executive Officer

Date: April 23, 2008

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By: /s/ Keith F. Hartstein
-------------------------------------
Keith F. Hartstein
President and Chief Executive Officer

Date: April 23, 2008

By: /s/ Charles A. Rizzo
-------------------------------------
Charles A. Rizzo
Chief Financial Officer

Date: April 23, 2008