JHF III U.S. Growth Fund Class I (JSGIX) N-CSRS Certified semi-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 28
Date of reporting period:	August 31, 2008

ITEM 1. REPORT TO SHAREHOLDERS.

John Hancock
Intrinsic Value Fund

Semiannual Report
8.31.08

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 March 1, 2008 with the same investment held until August 31, 2008.

Actual expenses/actual return
Account value				Expenses paid
$1,000.00		Ending value		during period
on 3-1-08		on 8-31-08		ending 8-31-08	1
Class A	$	948.40	$	6.63
Class B	$	945.00	$	10.05
Class C	$	945.50	$	10.06
Class I	$	950.60	$	4.67
Class R1	$	947.70	$	7.12
Class 1	$	950.60	$	4.42

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 August 31, 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:

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 March 1, 2008, with the same investment held until August 31, 2008. Look in any other fund shareholder report to find its hypothetical example and you will be able to compare these expenses.

Hypothetical example for comparison purposes
Account value				Expenses paid
$1,000.00		Ending value		during period
on 3-1-08		on 8-31-08		ending 8-31-08	1
Class A	$	1,018.40	$	6.87
Class B	$	1,014.90	$	10.41
Class C	$	1,014.90	$	10.41
Class I	$	1,020.40	$	4.84
Class R1	$	1,017.90	$	7.38
Class 1	$	1,020.70	$	4.58

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%, 2.05%, 0.95%, 1.45% 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 the most recent fiscal half year/365 (to reflect the one-half year period).

JOHN HANCOCK FUNDS III
PORTFOLIO OF INVESTMENTS - August 31, 2008 (Unaudited)
(showing percentage of total net assets)

Intrinsic Value Fund
	Shares or
	Principal
	Amount		Value
COMMON STOCKS - 96.81%
Aerospace - 1.61%
General Dynamics Corp.	1,700	$	156,910
Northrop Grumman Corp.	200		13,770
Raytheon Company	400		23,996
Rockwell Collins, Inc.	200		10,518
United Technologies Corp.	1,200		78,708
			283,902
Agriculture - 0.20%
Archer-Daniels-Midland Company	1,400		35,644
Apparel & Textiles - 0.32%
Coach, Inc. *	700		20,293
Jones Apparel Group, Inc.	100		1,986
Liz Claiborne, Inc.	500		8,105
Mohawk Industries, Inc. *	200		13,810
NIKE, Inc., Class B	200		12,122
			56,316
Auto Parts - 0.39%
AutoZone, Inc. *	180		24,701
BorgWarner, Inc.	100		4,135
Johnson Controls, Inc.	700		21,644
O'Reilly Automotive, Inc. *	400		11,648
TRW Automotive Holdings Corp. *	400		7,672
			69,800
Auto Services - 0.24%
AutoNation, Inc. *	1,700		19,295
Avis Budget Group, Inc. *	1,800		13,716
Copart, Inc. *	200		8,802
			41,813
Automobiles - 0.25%
General Motors Corp. (a)	1,700		17,000
PACCAR, Inc.	650		27,989
			44,989
Banking - 3.82%
Bank of America Corp.	11,355		353,595
BB&T Corp.	1,800		54,000
Comerica, Inc.	800		22,472
Fifth Third Bancorp	1,200		18,936
First Horizon National Corp.	800		8,984
Hudson City Bancorp, Inc.	1,700		31,348
KeyCorp	400		4,804
Marshall & Ilsley Corp.	700		10,780
Popular, Inc. (a)	900		7,335
SunTrust Banks, Inc.	200		8,378
U.S. Bancorp	3,000		95,580
UnionBanCal Corp.	400		29,472
Wachovia Corp.	1,400		22,246
Zions Bancorp	300		8,052
			675,982
Biotechnology - 1.21%
Amgen, Inc. *	1,500		94,275
Biogen Idec, Inc. *	1,300		66,209
Charles River Laboratories International, Inc. *	200		13,122
Genzyme Corp. *	300		23,490

Intrinsic Value Fund (continued)
	Shares or
	Principal
	Amount		Value
COMMON STOCKS (continued)
Biotechnology (continued)
Invitrogen Corp. *	400	$	16,984
			214,080
Broadcasting - 0.07%
Discovery Holding Company *	600		12,138
Building Materials & Construction - 0.12%
Lennox International, Inc.	300		11,100
Masco Corp.	500		9,530
			20,630
Business Services - 0.54%
Affiliated Computer Services, Inc., Class A *	100		5,324
FactSet Research Systems, Inc.	200		12,542
Fiserv, Inc. *	700		36,302
Global Payments, Inc.	200		9,642
Hewitt Associates, Inc., Class A *	300		12,063
Manpower, Inc.	200		9,612
URS Corp. *	200		9,592
			95,077
Cellular Communications - 0.04%
Telephone & Data Systems, Inc.	200		7,680
Chemicals - 0.31%
Air Products & Chemicals, Inc.	200		18,370
Dow Chemical Company	300		10,239
FMC Corp.	200		14,708
Sigma-Aldrich Corp.	200		11,352
			54,669
Colleges & Universities - 0.08%
Career Education Corp. *	800		15,000
Computers & Business Equipment - 2.79%
Cisco Systems, Inc. *	9,300		223,665
Dell, Inc. *	2,200		47,806
EMC Corp. *	800		12,224
Hewlett-Packard Company	800		37,536
Ingram Micro, Inc., Class A *	1,000		18,910
International Business Machines Corp.	600		73,038
Juniper Networks, Inc. *	600		15,420
Lexmark International, Inc. *	500		17,985
Tech Data Corp. *	400		13,656
Western Digital Corp. *	1,200		32,712
			492,952
Cosmetics & Toiletries - 2.45%
Avon Products, Inc.	300		12,849
Colgate-Palmolive Company	600		45,618
Estee Lauder Companies, Inc., Class A	200		9,954
Kimberly-Clark Corp.	600		37,008
Procter & Gamble Company	4,700		327,919
			433,348
Crude Petroleum & Natural Gas - 5.08%
Apache Corp.	1,690		193,302
Chesapeake Energy Corp.	1,100		53,240
Cimarex Energy Company	300		16,662
Devon Energy Corp.	1,200		122,460
EOG Resources, Inc.	500		52,210

The accompanying notes are an integral part of the financial statements. 

1

JOHN HANCOCK FUNDS III
PORTFOLIO OF INVESTMENTS - August 31, 2008 (Unaudited) - continued
(showing percentage of total net assets)

Intrinsic Value Fund (continued)
	Shares or
	Principal
	Amount		Value
COMMON STOCKS (continued)
Crude Petroleum & Natural Gas
(continued)
Forest Oil Corp. *	200	$	11,384
Hess Corp.	700		73,297
Newfield Exploration Company *	200		9,044
Noble Energy, Inc.	200		14,346
Occidental Petroleum Corp.	3,500		277,760
Patterson-UTI Energy, Inc.	900		25,578
Sunoco, Inc.	400		17,752
Unit Corp. *	200		13,546
W&T Offshore, Inc.	200		7,032
Whiting Petroleum Corp. *	100		9,624
			897,237
Domestic Oil - 0.08%
Encore Aquisition Company *	100		5,156
St. Mary Land & Exploration Company	200		8,444
			13,600
Drugs & Health Care - 0.37%
Wyeth	1,500		64,920
Educational Services - 0.14%
Apollo Group, Inc., Class A *	100		6,368
ITT Educational Services, Inc. *	200		17,782
			24,150
Electrical Equipment - 0.05%
Emerson Electric Company	200		9,360
Electrical Utilities - 0.08%
FirstEnergy Corp.	200		14,528
Electronics - 0.35%
L-3 Communications Holdings, Inc.	600		62,364
Financial Services - 3.27%
BlackRock, Inc.	200		43,450
Capital One Financial Corp.	400		17,656
Citigroup, Inc.	17,800		338,022
Federal Home Loan Mortgage Corp.	300		1,353
Federal National Mortgage Association	4,500		30,780
Goldman Sachs Group, Inc.	100		16,397
JP Morgan Chase & Company	300		11,547
Knight Capital Group, Inc. *	600		10,344
Leucadia National Corp.	600		27,774
Morgan Stanley	500		20,415
SLM Corp. *	500		8,255
State Street Corp.	100		6,767
Synovus Financial Corp.	1,100		10,120
T. Rowe Price Group, Inc.	200		11,872
Washington Mutual, Inc.	2,700		10,935
Wells Fargo & Company	400		12,108
			577,795
Food & Beverages - 4.18%
Coca-Cola Enterprises, Inc.	900		15,363
General Mills, Inc.	400		26,472
Kellogg Company	200		10,888
Kraft Foods, Inc., Class A	822		25,901
PepsiAmericas, Inc.	500		11,715
PepsiCo, Inc.	3,900		267,072

Intrinsic Value Fund (continued)
	Shares or
	Principal
	Amount		Value
COMMON STOCKS (continued)
Food & Beverages (continued)
The Coca-Cola Company	6,800	$	354,076
Tyson Foods, Inc., Class A	800		11,616
William Wrigley, Jr. Company	200		15,896
			738,999
Gas & Pipeline Utilities - 0.07%
Transocean, Inc. *	100		12,720
Healthcare Products - 5.09%
Johnson & Johnson	8,600		605,698
Medtronic, Inc.	1,300		70,980
Patterson Companies, Inc. *	300		9,762
Stryker Corp.	800		53,752
Zimmer Holdings, Inc. *	2,200		159,258
			899,450
Healthcare Services - 6.23%
Cardinal Health, Inc.	1,800		98,964
Coventry Health Care, Inc. *	1,500		52,530
Express Scripts, Inc. *	800		58,728
Health Net, Inc. *	400		11,060
Lincare Holdings, Inc. *	300		9,900
McKesson Corp.	3,000		173,340
Medco Health Solutions, Inc. *	500		23,425
Quest Diagnostics, Inc.	400		21,620
UnitedHealth Group, Inc.	14,834		451,695
WellPoint, Inc. *	3,800		200,602
			1,101,864
Holdings Companies/Conglomerates - 1.49%
General Electric Company	9,400		264,140
Homebuilders - 0.45%
Centex Corp.	600		9,732
D.R. Horton, Inc.	900		11,214
KB Home	300		6,240
Lennar Corp., Class A	700		9,205
M.D.C. Holdings, Inc.	400		16,580
Pulte Homes, Inc.	800		11,608
Toll Brothers, Inc. *	600		14,928
			79,507
Hotels & Restaurants - 0.18%
McDonald's Corp.	500		31,025
Household Appliances - 0.07%
Black & Decker Corp.	200		12,650
Household Products - 0.10%
Energizer Holdings, Inc. *	200		16,988
Industrial Machinery - 0.99%
AGCO Corp. *	200		12,326
Deere & Company	1,400		98,798
Ingersoll-Rand Company, Ltd., Class A	292		10,784
Kennametal, Inc.	400		14,092
Parker-Hannifin Corp.	600		38,442
			174,442
Insurance - 7.61%
ACE, Ltd. *	500		26,305
Aetna, Inc.	400		17,256

The accompanying notes are an integral part of the financial statements. 

2

JOHN HANCOCK FUNDS III
PORTFOLIO OF INVESTMENTS - August 31, 2008 (Unaudited) - continued
(showing percentage of total net assets)

Intrinsic Value Fund (continued)
	Shares or
	Principal
	Amount		Value
COMMON STOCKS (continued)
Insurance (continued)
AFLAC, Inc.	800	$	45,360
Allstate Corp.	5,300		239,189
American International Group, Inc.	9,600		206,304
Aon Corp.	400		18,996
Arch Capital Group, Ltd. *	200		13,952
Assurant, Inc.	400		23,372
Axis Capital Holdings, Ltd.	300		10,029
Chubb Corp.	2,900		139,229
Everest Re Group, Ltd.	200		16,426
First American Corp.	400		10,108
Hartford Financial Services Group, Inc.	1,100		69,388
HCC Insurance Holdings, Inc.	400		10,072
MBIA, Inc. (a)	1,300		21,086
MetLife, Inc.	400		21,680
MGIC Investment Corp.	800		6,728
Nationwide Financial Services, Inc., Class A	400		20,576
Old Republic International Corp.	1,600		17,488
PartnerRe, Ltd.	100		6,891
Progressive Corp.	3,100		57,257
Protective Life Corp.	400		14,516
SAFECO Corp.	300		20,280
The Travelers Companies, Inc.	4,900		216,384
Torchmark Corp.	500		29,870
Transatlantic Holdings, Inc.	200		12,020
Unum Group	600		15,246
W.R. Berkley Corp.	1,200		28,272
XL Capital, Ltd., Class A	500		10,050
			1,344,330
International Oil - 18.60%
Anadarko Petroleum Corp.	1,300		80,249
Chevron Corp.	11,400		984,048
ConocoPhillips	8,500		701,335
Exxon Mobil Corp.	17,800		1,424,178
Murphy Oil Corp.	500		39,265
Nabors Industries, Ltd. *	500		17,800
Noble Corp.	200		10,058
Weatherford International, Ltd. *	800		30,864
			3,287,797
Internet Content - 0.34%
Google, Inc., Class A *	130		60,228
Internet Retail - 0.44%
eBay, Inc. *	3,100		77,283
Internet Software - 0.05%
VeriSign, Inc. *	300		9,591
Manufacturing - 1.38%
3M Company	900		64,440
Danaher Corp.	1,000		81,570
Harley-Davidson, Inc.	500		19,890
SPX Corp.	100		11,925
Tyco International, Ltd.	1,550		66,464
			244,289
Metal & Metal Products - 0.11%
Commercial Metals Company	300		7,809

Intrinsic Value Fund (continued)
	Shares or
	Principal
	Amount		Value
COMMON STOCKS (continued)
Metal & Metal Products (continued)
Reliance Steel & Aluminum Company	200	$	11,402
			19,211
Mining - 0.10%
Newmont Mining Corp.	400		18,040
Office Furnishings & Supplies - 0.03%
Office Depot, Inc. *	700		4,928
Petroleum Services - 0.85%
Baker Hughes, Inc.	100		8,001
BJ Services Company	1,000		26,850
Helmerich & Payne, Inc.	200		11,424
Valero Energy Corp.	3,000		104,280
			150,555
Pharmaceuticals - 5.67%
Abbott Laboratories	1,200		68,916
AmerisourceBergen Corp.	1,700		69,717
Bristol-Myers Squibb Company	400		8,536
Eli Lilly & Company	2,100		97,965
Endo Pharmaceutical Holdings, Inc. *	400		9,088
Forest Laboratories, Inc. *	1,600		57,104
Gilead Sciences, Inc. *	1,500		79,020
King Pharmaceuticals, Inc. *	1,400		16,016
Merck & Company, Inc.	1,600		57,072
Pfizer, Inc.	28,200		538,902
			1,002,336
Publishing - 0.21%
Gannett Company, Inc.	2,100		37,359
Railroads & Equipment - 0.41%
Burlington Northern Santa Fe Corp.	230		24,702
CSX Corp.	500		32,340
Norfolk Southern Corp.	200		14,706
			71,748
Real Estate - 0.48%
Annaly Capital Management, Inc., REIT	1,000		14,960
Boston Properties, Inc., REIT	100		10,247
Equity Residential, REIT	500		21,100
HCP, Inc., REIT	300		10,866
Health Care, Inc., REIT	200		10,374
Public Storage, Inc., REIT	200		17,664
			85,211
Retail Grocery - 0.09%
SUPERVALU, Inc.	700		16,233
Retail Trade - 10.03%
Abercrombie & Fitch Company, Class A	400		20,980
Advance Auto Parts, Inc.	300		12,912
American Eagle Outfitters, Inc.	600		9,030
Bed Bath & Beyond, Inc. *	1,100		33,726
Best Buy Company, Inc.	200		8,954
Costco Wholesale Corp.	800		53,648
CVS Caremark Corp.	900		32,940
Dollar Tree, Inc. *	500		19,180
Family Dollar Stores, Inc.	700		17,444
Home Depot, Inc.	15,100		409,512
Kohl's Corp. *	900		44,253

The accompanying notes are an integral part of the financial statements. 

3

JOHN HANCOCK FUNDS III
PORTFOLIO OF INVESTMENTS - August 31, 2008 (Unaudited) - continued
(showing percentage of total net assets)

Intrinsic Value Fund (continued)
		Shares or
		Principal
		Amount		Value
COMMON STOCKS (continued)
Retail Trade (continued)
Lowe's Companies, Inc.		7,900	$	194,656
Staples, Inc.		3,000		72,600
Target Corp.		2,100		111,342
The Gap, Inc.		1,200		23,340
Walgreen Company		3,400		123,862
Wal-Mart Stores, Inc.		9,900		584,793
				1,773,172
Semiconductors - 0.27%
Cypress Semiconductor Corp. *		400		12,968
Intel Corp.		600		13,722
Lam Research Corp. *		300		11,028
QLogic Corp. *		500		9,340
				47,058
Software - 3.50%
Citrix Systems, Inc. *		300		9,081
Microsoft Corp.		14,300		390,247
Oracle Corp. *		9,500		208,335
Sybase, Inc. *		300		10,323
				617,986
Steel - 0.21%
Nucor Corp.		700		36,750
Telecommunications Equipment &
Services - 1.28%
QUALCOMM, Inc.		4,300		226,394
Telephone - 0.66%
AT&T, Inc.		1,427		45,650
Verizon Communications, Inc.		2,000		70,240
				115,890
Tobacco - 1.43%
Altria Group, Inc.		6,700		140,901
Philip Morris International, Inc.		1,900		102,030
UST, Inc.		200		10,718
				253,649
Transportation - 0.06%
C.H. Robinson Worldwide, Inc.		200		10,422
Trucking & Freight - 0.29%
FedEx Corp.		100		8,282
Ryder Systems, Inc.		100		6,452
United Parcel Service, Inc., Class B		400		25,648
YRC Worldwide, Inc. *		600		10,860
				51,242
TOTAL COMMON STOCKS (Cost $19,219,845)			$	17,111,461
SHORT TERM INVESTMENTS - 0.24%
John Hancock Cash
Investment Trust, 2.5657% (c)(f)	$	42,542	$	42,542
TOTAL SHORT TERM INVESTMENTS
(Cost $42,542)			$	42,542

Intrinsic Value Fund (continued)
		Shares or
		Principal
		Amount		Value
REPURCHASE AGREEMENTS - 3.17%
Repurchase Agreement with State
Street Corp. dated 08/29/2008 at
1.70% to be repurchased at
$561,106 on 09/02/2008,
collateralized by $565,000 Federal
National Mortgage Association,
3.375% due 03/05/2010 (valued at
$574,775, including interest)	$	561,000	$	561,000
TOTAL REPURCHASE AGREEMENTS
(Cost $561,000)			$	561,000
Total Investments (Intrinsic Value Fund)
(Cost $19,823,387) - 100.22%			$	17,715,003
Liabilities in Excess of Other Assets - (0.22)%				(39,248 )
TOTAL NET ASSETS - 100.00%			$	17,675,755

Percentages are stated as a percent of net assets.

Key to Security Abbreviations and Legend

REIT - Real Estate Investment Trust

Non-Income Producing

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

(c) The investment is an affiliate of the Fund, the adviser and/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.

The accompanying notes are an integral part of the financial statements. 

4

† At August 31, 2008, the aggregate cost of investment securities for federal income tax purposes was $19,874,332. Net unrealized depreciation aggregated $2,159,329, of which $788,997 related to appreciated investment securities and $2,948,326 related to depreciated investment securities.

The Fund had the following financial futures contracts open on August 31, 2008:

	NUMBER OF
OPEN CONTRACTS	CONTRACTS	POSITION	EXPIRATION	UNREALIZED APPRECIATION
S&P Mini 500 Index Futures	5	Long	Sep 2008	$6,173

John Hancock Funds III
Intrinsic Value Fund
Statements of Assets and Liabilities — August 31, 2008 (Unaudited))¹

Assets
Investments in unaffiliated issuers, at value
(Cost $19,780,845) including $41,708 of
securities loaned (Note 2)	$	17,672,461
Investments in affiliated issuers, at value (Cost
$42,542)		42,542
Total investments, at value (Cost
$19,823,387)		17,715,003
Cash		186
Cash collateral at broker for futures contracts		21,600
Receivable for fund shares sold		572
Dividends and interest receivable		47,003
Other assets		33,745
Total assets		17,818,109
Liabilities
Payable for fund shares repurchased		16,314
Payable upon return of securities loaned (Note
2)		42,542
Payable for futures variation margin		3,875
Payable to affiliates
Fund administration fees		133
Transfer agent fees		4,105
Trustees’ fees		935
Distribution and service fees		189
Investment management fees		2,489
Other payables and accrued expenses		71,772
Total liabilities		142,354
Net assets
Capital paid-in	$	20,862,305
Undistributed net investment income		106,050
Accumulated undistributed net realized loss on
investments and futures contracts		(1,190,389)
Net unrealized depreciation on investments and
futures		(2,102,211)
Net assets	$	17,675,755

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	$	16,757,558
Shares outstanding		970,909
Net asset value and redemption price per share	$	17.26
Class B1
Net assets	$	235,167
Shares outstanding		13,687
Net asset value and offering price per share	$	17.18
Class C1
Net assets	$	353,915
Shares outstanding		20,589
Net asset value and offering price per share	$	17.19
Class I
Net assets	$	129,042
Shares outstanding		7,456
Net asset value, offering price and redemption
price per share	$	17.31
Class R1

See notes to financial statements 

Net assets	$	103,572
Shares outstanding		6,017
Net asset value, offering price and redemption
price per share	$	17.21
Class 1
Net assets	$	96,501
Shares outstanding		5,575
Net asset value, offering price and redemption
price per share	$	17.31
Maximum public offering price per share
Class A (net asset value per share ÷ 95%)2	$	18.17

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 

John Hancock Funds III
Intrinsic Value Fund
Statements of Operations — August 31, 2008 (Unaudited)¹

Investment income
Dividends	$	200,382
Interest		5,178
Income from affiliated issuers		302
Securities lending		184
Less foreign taxes withheld		(14)
Total investment income		206,032
Expenses
Investment management fees (Note 3)		71,852
Distribution and service fees (Note 3)		29,714
Transfer agent fees (Note 3)		7,748
Blue sky fees (Note 3)		37,282
Fund administration fees (Note 3)		1,061
Audit and legal fees		19,693
Printing and postage fees (Note 3)		4,762
Custodian fees		12,636
Trustees' fees (Note 3)		1,275
Registration and filing fees		7,273
Miscellaneous		158
Total expenses		193,454
Less expense reductions (Note 3)		(67,216)
Transfer agent credits (Note 3)		(20)
Net expenses		126,218
Net investment loss		79,814
Realized and unrealized gain (loss)
Net realized loss on
Investments in unaffiliated issuers		(700,097)
Futures contracts		(25,881)
		(725,978)
Change in net unrealized appreciation
(depreciation) of
Investments in unaffiliated issuers		(348,461)
Futures contracts		17,926
		(330,535)
Net realized and unrealized gain (loss)		(1,056,513)
Decrease in net assets from operations	$	(976,699)

¹Semiannual period from 3-1-08 to 8-31-08. 

See notes to financial statements 

John Hancock Funds III
Intrinsic Value Fund

Statements of Changes in Net Assets

		Year ended		Period ended
		2-29-08		8-31-081
Increase (decrease) in net assets
From operations
Net investment income	$	216,099	$	79,814
Net realized gain (loss)		617,049		(725,978)
Change in net unrealized appreciation
(depreciation)		(3,490,770)		(330,535)
Decrease in net assets resulting from
operations		(2,657,622)		(976,699)
Distributions to shareholders
From net investment income
Class A		(224,181)		—
Class B		(1,449)		—
Class C		(2,335)		—
Class I		(2,359)		—
Class R1		(1,273)		—
Class 1		(1,843)		—
From net realized gain
Class A		(1,330,407)		—
Class B		(23,393)		—
Class C		(37,862)		—
Class I		(10,289)		—
Class R1		(8,307)		—
Class 1		(7,782)		—
Total distributions		(1,651,480)		—
From Fund share transactions (Note 5)		2,600,501		49,825
Total increase decrease		(1,708,601)		(926,874)
Net assets
Beginning of period		20,311,230		18,602,629
End of period	$	18,602,629	$	17,675,755
Undistributed net investment income	$	26,236	$	106,050

¹ Semiannual period from 3-1-08 to 8-31-08. Unaudited. 

See notes to financial statements 

Intrinsic Value Fund
Financial Highlights
Class A

Period ended		2-28-07	1	2-29-08	8-31-08	2
Per share operating performance
Net asset value, beginning of period		$20.00		$22.68	$18.20
Net investment income	3	0.18		0.24	0.08
Net realized and unrealized gain (loss) on investments		2.85		(2.93)	(1.02)
Total from investment operations		3.03		(2.69)	(0.94)
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	$17.26
Total return (%)	4,5	15.19	6	(12.52)	(5.16)	6
Ratios and supplemental data
Net assets, end of period (in millions)		$19		$18	$17
Ratios (as a percentage of average net assets):
Expenses before reductions		1.94	7	1.89	1.75	7
Expenses net of fee waivers		1.34	7	1.35	1.35	7
Expenses net of all fee waivers and credits		1.34	7	1.35	1.35	7
Net investment income		1.13	7	1.05	0.89	7
Portfolio turnover (%)		32		72	27

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

2 Semiannual period from 3-1-08 to 8-31-08. Unaudited.

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 Assumes dividend reinvestment.

6 Not annualized.

7 Annualized.

Intrinsic Value Fund
Financial Highlights
Class B

Period ended		2-28-07	1	2-29-08		8-31-08	2
Per share operating performance
Net asset value, beginning of period		$20.00		$22.64		$18.18
Net investment income	3	0.07		0.08		0.02
Net realized and unrealized gain (loss) on investments		2.85		(2.92)		(1.02)
Total from investment operations		2.92		(2.84)		(1.00)
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		$17.18
Total return (%)	4,5	14.61	6	(13.13)		(5.50)	6
Ratios and supplemental data
Net assets, end of period (in millions)		-	7	-	7	-	7
Ratios (as a percentage of average net assets):
Expenses before reductions		9.00	8	6.13		7.82	8
Expenses net of fee waivers		2.04	8	2.06		2.05	8
Expenses net of all fee waivers and credits		2.04	8	2.05		2.05	8
Net investment income		0.42	8	0.35		0.18	8
Portfolio turnover (%)		32		72		27

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

2 Semiannual period from 3-1-08 to 8-31-08. Unaudited.

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 Assumes dividend reinvestment.

6 Not annualized.

7 Less than $500,000.

8 Annualized.

Intrinsic Value Fund
Financial Highlights
Class C

Period ended		2-28-07	1	2-29-08		8-31-08	2
Per share operating performance
Net asset value, beginning of period		$20.00		$22.64		$18.18
Net investment income	3	0.06		0.08		0.02
Net realized and unrealized gain (loss) on investments		2.86		(2.92)		(1.01)
Total from investment operations		2.92		(2.84)		(0.99)
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		$17.19
Total return (%)	4,5	14.61	6	(13.13)		(5.45)	6
Ratios and supplemental data
Net assets, end of period (in millions)		-	7	-	7	-	7
Ratios (as a percentage of average net assets):
Expenses before reductions		10.08	8	6.21		6.33	8
Expenses net of fee waivers		2.04	8	2.06		2.05	8
Expenses net of all fee waivers and credits		2.04	8	2.05		2.05	8
Net investment income		0.37	8	0.36		0.18	8
Portfolio turnover (%)		32		72		27

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

2 Semiannual period from 3-1-08 to 8-31-08. Unaudited.

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 Assumes dividend reinvestment.

6 Not annualized.

7 Less than $500,000.

8 Annualized.

Intrinsic Value Fund
Financial Highlights
Class I

Period ended		2-28-07	1	2-29-08		8-31-08	2
Per share operating performance
Net asset value, beginning of period		$20.00		$22.70		$18.21
Net investment income	3	0.24		0.32		0.12
Net realized and unrealized gain (loss) on investments		2.86		(2.93)		(1.02)
Total from investment operations		3.10		(2.61)		(0.90)
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		$17.31
Total return (%)	4,5	15.50	6	(12.18)		(4.94)	6
Ratios and supplemental data
Net assets, end of period (in millions)		-	7	-	7	-	7
Ratios (as a percentage of average net assets):
Expenses before reductions		17.60	8	13.79		12.49	8
Expenses net of fee waivers		0.95	8	0.95		0.95	8
Expenses net of all fee waivers and credits		0.95	8	0.95		0.95	8
Net investment income		1.53	8	1.45		1.29	8
Portfolio turnover (%)		32		72		27

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

2 Semiannual period from 3-1-08 to 8-31-08. Unaudited.

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 Assumes dividend reinvestment.

6 Not annualized.

7 Less than $500,000.

8 Annualized.

Intrinsic Value Fund
Financial Highlights
Class R1

Period ended		2-28-07	1	2-29-08		8-31-08	2
Per share operating performance
Net asset value, beginning of period		$20.00		$22.63		$18.16
Net investment income	3	0.12		0.21		0.07
Net realized and unrealized gain (loss) on investments		2.85		(2.92)		(1.02)
Total from investment operations		2.97		(2.71)		(0.95)
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		$17.21
Total return (%)	4,5	14.88	6	(12.60)		(5.23)	6
Ratios and supplemental data
Net assets, end of period (in millions)		-	7	-	7	-	7
Ratios (as a percentage of average net assets):
Expenses before reductions		20.85	8	15.27		16.61	8
Expenses net of fee waivers		1.69	8	1.45		1.45	8
Expenses net of all fee waivers and credits		1.69	8	1.45		1.45	8
Net investment income		0.78	8	0.95		0.79	8
Portfolio turnover (%)		32		72		27

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

2 Semiannual period from 3-1-08 to 8-31-08. Unaudited.

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 Assumes dividend reinvestment.

6 Not annualized.

7 Less than $500,000.

8 Annualized.

Intrinsic Value Fund
Financial Highlights
Class 1

Period ended		2-28-07	1	2-29-08		8-31-08	2
Per share operating performance
Net asset value, beginning of period		$20.00		$22.70		$18.21
Net investment income	3	0.25		0.34		0.12
Net realized and unrealized gain (loss) on investments		2.85		(2.94)		(1.02)
Total from investment operations		3.10		(2.60)		(0.90)
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		$17.31
Total return (%)	4,5	15.53	6	(12.13)		(4.94)	6
Ratios and supplemental data
Net assets, end of period (in millions)		-	7	-	7	-	7
Ratios (as a percentage of average net assets):
Expenses before reductions		1.44	8	1.47		1.32	8
Expenses net of fee waivers		0.90	8	0.90		0.90	8
Expenses net of all fee waivers and credits		0.90	8	0.90		0.90	8
Net investment income		1.58	8	1.50		1.34	8
Portfolio turnover (%)		32		72		27

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

2 Semiannual period from 3-1-08 to 8-31-08. Unaudited.

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 Assumes dividend reinvestment.

6 Not annualized.

7 Less than $500,000.

8 Annualized.

Note 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 Internal Revenue Service. Shareho lders 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.

Note 2
Significant accounting policies

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:

Security valuation

The net asset value of Class A, Class B and Class C, Class I, Class R1 and Class 1 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 John Hancock Advisers, LLC (the Adviser), a wholly owned subsidiary of John Hancock Financial Services, Inc., a subsidiary of Manulife Financial Corporation (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 f oreign) 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 the 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 a Fund investing significant amounts of assets in securities in foreign markets will be fair valued more frequently than a Fund 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 investments 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 that tracks foreign markets in which the Fund has significant investments. If a significant market event occurs due to a change in the value of the index, the pricing for investments in foreign markets that have closed prior to the NYSE will promptly be reviewed and potential adjustments to the net asset value will be recommended to the Fund’s Pricing Committee where applicable.

Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity.

The Fund adopted Statement of Financial Accounting Standards No. 157 (FAS 157), Fair Value Measurements, effective with the beginning of the Fund’s fiscal year. FAS 157 established a three-tier hierarchy to prioritize the assumptions, referred to as inputs, used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below:

Level 1 – Quoted prices in active markets for identical securities.

Level 2 – Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants would use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.

Level 3 – Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable, such as when there is little or no market activity for an investment, unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors that market participants would use in pricing an investment and would be based on the best information available.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used to value the Fund’s net assets as of August 31, 2008:

	Investments in	Other Financial
Valuation Inputs	Securities	Instruments*
Level 1 – Quoted Prices	$17,154,003	$6,173
Level 2 – Other Significant Observable Inputs	561,000	-
Level 3 – Significant Unobservable Inputs	-	-
Total	$17,715,003	$6,173

* Other financial instruments are derivative instruments not reflected in the Portfolio of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

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 coun terparty.

Investment transactions

Investment transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment security transactions are reported on trade date. Interest income is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date net of foreign withholding taxes. Realized gains and losses from investment transactions are recorded on an identified cost basis.

Class allocations

Income, common expenses and realized and unrealized gains (losses) are determined at the fund level and allocated daily to each class of shares based on the appropriate net asset value of the respective classes. Distribution and service fees, if any, and transfer agent fees for Class A, Class B, Class C, Class I, Class R1 and Class 1 shares are calculated daily at the class level based on the appropriate net asset value of each class and the specific expense rate(s) applicable to each class.

Guarantees and indemnifications

Under the Fund’s organizational documents, its Officers and Trustees are indemnified against certain liability arising out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts with service providers that contain general indemnification clauses. The Fund’s maximum exposure under these

arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred.

Expenses

The majority of expenses are directly identifiable to an individual fund. Trust expenses that are not readily identifiable to a specific fund are allocated in such a manner as deemed equitable, taking into consideration, among other things, the nature and type of expense and the relative size of the funds.

Line of credit

The Fund has entered into an agreement which enables them to participate in a $150 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. For the period ended August 31, 2008, there were no significant borrowings under the line of credit.

Pursuant to the custodian agreement, the Custodian may, in its discretion, advance funds to the Fund to make properly authorized payments. When such payments result in an overdraft, the Fund is obligated to repay the Custodian for any overdraft, including any costs or expenses associated with the overdraft. The Custodian has a lien and security interest in any Fund property to the extent of any overdraft.

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 cash collateral against the loaned securities and maintains the cash 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 cash collateral is delivered to the Fund on the next business day. 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 may receive compensation for lending their 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., Inc. 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) 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).

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 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.

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 Financial Accounting Standards Board (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 three years remain subject to examination by the Internal Revenue Service.

New accounting pronouncements

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.

Distribution of income and gains

The Fund generally declares dividends and pays dividends annually. Capital gains, if any, are distributed annually. 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 $1,019,233 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.

Such distributions, 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.

Note 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 the net assets of the Fund and Intrinsic Value Trust , a series of John Hancock Trust. 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 period ended August 31, 2008, were equivalent to an annual effective rate of 0.78% of the Fund’s average daily net assets.

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 $35,061, $7,992, $8,119, $7,711, $8,082 and $210 for Class A, Class B, Class C, Class I, Class R1 and Class 1, respectively for the period ended August 31, 2008. The expense reimbursements and limits will continue in effect until December 31, 2008 and thereafter until terminated by the Adviser on notice to the Trust.

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 period ended August 31, 2008, were $1,061 with an annual effective rate of 0.01% of the Fund’s average daily net assets.

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 the 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 period ended August 31, 2008.

Class A shares are assessed up-front sales charges. During the period ended August 31, 2008, the Distributor received net up-front sales charges of $3,365 with regard to sales of Class A shares. Of this amount, $562 was retained and used for printing prospectuses, advertising, sales literature and other purposes, $2,698 was paid as sales commissions to unrelated broker-dealers and $105 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 period ended August 31, 2008, CDSCs received by JH Funds amounted to $85 for Class C shares. There were no CDSCs received for Class B shares.

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 $16.50 for each Class A, Class B, Class C, Class I and Class R1 shareholder accounts.

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 period ended August 31, 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 period ended August 31, 2008, the transfer agent fees reductions for Class R1 were $41.

The Fund receives 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 period ended August 31, 2008, the Fund’s transfer agent fees and out-of-pocket expenses were reduced by $20 for transfer agent credits earned.

Class level expenses including the allocation of the transfer agent fees for the period ended August 31, 2008, were as follows:

	Distribution and	Transfer		Printing and
Share class	service fees	agent fees	Blue sky fees	postage fees
Class A	$26,140	$6,984	$7,440	$4,364
Class B	1,384	280	7,331	122
Class C	1,897	383	7,267	117
Class I	-	33	7,430	55
Class R1	268	68	7,814	87
Class 1	25	-	-	17
Total	$29,714	$7,748	$37,282	$4,762

Note 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.

Note 5
Fund share transactions

The listing illustrates the number of Fund shares sold, reinvested and repurchased during the year ended February 28, 2007, and the period ended August 31, 2008, along with the corresponding dollar value:

	Year ended			Period ended
	2-29-08			8-31-081
	Shares		Amount	Shares		Amount
Class A shares
Sold	133,987	$	2,940,726	52,388	$	935,216
Distributions reinvested	76,470		1,516,395	—		—
Repurchased	(92,564)		(2,053,477)	(45,974)		(808,743)
Net increase	117,893	$	2,403,644	6,414	$	126,473
Class B shares
Sold	5,662	$	132,547	2,042	$	36,002
Distributions reinvested	1,131		22,436	—		—
Repurchased	(11,519)		(264,243)	(4,297)		(74,637)
Net decrease	(4,726)	$	(109,260)	(2,255)	$	(38,635)
Class C shares
Sold	16,074	$	359,010	3,031	$	54,947
Distributions reinvested	1,822		36,151	—		—
Repurchased	(7,825)		(155,541)	(5,186)		(94,810)
Net increase (decrease)	10,071	$	239,620	(2,155)	$	(39,863)
Class I shares
Sold	1,135	$	26,925	60	$	1,050
Distributions reinvested	638		12,648	—		—
Repurchased	(22)		(500)	—		—
Net increase	1,751	$	39,073	60	$	1,050
Class R1 shares
Sold	407	$	8,923	49	$	800
Distributions reinvested	484		9,580	—		—
Repurchased	(32)		(704)	—		—
Net increase	859	$	17,799	49	$	800
Class 1 shares
Distributions reinvested	485		9,625	—		—
Net increase	485	$	9,625	—	$	—
Net increase	126,333	$	2,600,501	2,113	$	49,825

¹Semiannual period from 3-1-08 to 8-31-08. Unaudited.

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 August 31, 2008.

Note 6
Purchase and sale 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 period ended August 31, 2008, aggregated $4,997,546 and $4,791,360, respectively.

Note 7
Subsequent event

On September 8, 2008, the Board of Trustees of the Fund approved the proposed liquidation of the Fund. The liquidation occurred on October 24, 2008.

INSERT TO SHAREHOLDER REPORTS 

Board Consideration of and Continuation of

Investment Advisory Agreement and Sub-Advisory Agreement: 

John Hancock Intrinsic Value Fund

   The Investment Company Act of 1940 (the “1940 Act”) requires the Board of Trustees (the “Board”) of John Hancock Funds III (the “Trust”), including a majority of the Trustees who have no direct or indirect interest in the investment advisory agreement and are not “interested persons” of the Trust, as defined in the 1940 Act (the “Independent Trustees”), annually to meet in person to review and consider the continuation of: (i) the investment advisory agreement (the “Advisory Agreement”) with John Hancock Investment Management Services, LLC (the “Adviser”) and (ii) the investment sub-advisory agreement (the “Sub-Advisory Agreement”) with Grantham, Mayo, Van Otterloo & Co. LLC (the “Sub-Adviser”) for the John Hancock Intrinsic Value Fund (the “Fund”). The Advisory Agreement and the Sub-Advisory Agreement are collectively referred to as the “Advisory Agreements .”

   At meetings held on May 5-6 and June 9-10, 2008, the Board considered the factors and reached the conclusions described below relating to the selection of the Adviser and Sub-Adviser and the continuation of the Advisory Agreements. During such meetings, the Board’s Contracts/Operations Committee and the Independent Trustees also met in executive sessions with their independent legal counsel.

   In evaluating the Advisory Agreements, the Board, including the Contracts/Operations Committee and its Independent Trustees, reviewed a broad range of information requested for this purpose. This information included:

   (i) the investment performance of the Fund relative to a category of relevant funds (the “Category”) and a peer group of comparable funds (the “Peer Group”). The funds within each Category and Peer Group were selected by Morningstar Inc. (“Morningstar”), an independent provider of investment company data. Data covered the period since the Fund’s inception through December 31, 2007,

   (ii) advisory and other fees incurred by, and the expense ratios of, the Fund relative to a Category and a Peer Group,

   (iii) the advisory fees of comparable portfolios of other clients of the Adviser and the Sub-Adviser,

   (iv) the Adviser’s financial results and condition, including its and certain of its affiliates’ profitability from services performed for the Fund,

   (v) breakpoints in the Fund’s and the Peer Group’s fees, and information about economies of scale,

  (vi) the Adviser’s and Sub-Adviser’s record of compliance with applicable laws and regulations, with the Fund’s investment policies and restrictions, and with the applicable Code of Ethics, and the structure and responsibilities of the Adviser’s and Sub-Adviser’s compliance department,

 (vii) the background and experience of senior management and investment professionals, and

1 

(viii) the nature, cost and character of advisory and non-investment management services provided by the Adviser and its affiliates and by the Sub-Adviser.

   The Independent Trustees considered the legal advice of independent legal counsel and relied on their own business judgment in determining the factors to be considered in evaluating the materials that were presented to them and the weight to be given to each such factor. The Board’s review and conclusions were based on a comprehensive consideration of all information presented to the Board and not the result of any single controlling factor. The Board principally considered data on performance and other information provided by Morningstar as of December 31, 2007. The Board also considered updated performance information provided to it by the Adviser or Sub-Adviser at its May and June 2008 meetings. Performance and other information may be quite different as of the date of this shareholders report. The key factors considered by the Board and the conclusions reached are described below.

Nature, Extent and Quality of Services

   The Board considered the ability of the Adviser and the Sub-Adviser, based on their resources, reputation and other attributes, to attract and retain qualified investment professionals, including research, advisory, and supervisory personnel. The Board considered the investment philosophy, research and investment decision-making processes of the Adviser and Sub-Adviser. The Board considered the Adviser’s execution of its oversight responsibilities. The Board further considered the culture of compliance, resources dedicated to compliance, compliance programs and compliance records of the Adviser and Sub-Adviser. In addition, the Board took into account the administrative and other non-advisory services provided to the Fund by the Adviser and its affiliates.

   Based on the above factors, together with those referenced below, the Board concluded that, within the context of its full deliberations, the nature, extent and quality of the investment advisory services provided to the Fund by the Adviser and Sub-Adviser supported renewal of the Advisory Agreements.

Fund Performance

   The Board noted that the Fund had less than two full years of operational history, and considered the performance results for the Fund since its inception through December 31, 2007. The Board also considered these results in comparison to the performance of the Category, as well as the Fund’s Peer Group and benchmark index. The Board reviewed with representatives of Morningstar the methodology used by Morningstar to select the funds in the Category and the Peer Group.

   The Board noted that the Fund’s performance was lower than the performance of the Category and Peer Group medians, and its benchmark index, the Russell 1000 Value Index, over the 1-year period. The Adviser discussed its plans with respect to the Fund. The Board recognized the short operational history of the Fund and indicated its intent to continue to monitor the Fund’s performance trends.

2 

Investment Advisory Fee and Sub-Advisory Fee Rates and Expenses

   The Board reviewed and considered the contractual investment advisory fee rate payable by the Fund to the Adviser for investment advisory services (the “Advisory Agreement Rate”). The Board received and considered information comparing the Advisory Agreement Rate with the advisory fees for the Peer Group and Category. The Board noted that the Advisory Agreement Rate was not appreciably higher than the median rates of the Peer Group and Category.

   The Board received and considered expense information regarding the Fund’s various components, including advisory fees, distribution and fees other than advisory and distribution fees, including transfer agent fees, custodian fees, and other miscellaneous fees (e.g., fees for accounting and legal services). The Board considered comparisons of these expenses to the Peer Group median. The Board also received and considered expense information regarding the Fund’s total operating expense ratio (“Gross Expense Ratio”) and total operating expense ratio after taking the fee waiver arrangement applicable to the Advisory Agreement Rate into account (“Net Expense Ratio”). The Board received and considered information comparing the Gross Expense Ratio and Net Expense Ratio of the Fund to that of the Peer Group and Category medians. The Board noted that the Fund’s Gross Expense Ratio was higher than the Peer Group and Category medians. The Board also noted that the Fund’s Net Expense Ratio was higher than the Category median, but lower than the Peer Group median.

   The Adviser also discussed the Morningstar data and rankings, and other relevant information, for the Fund. Based on the above-referenced considerations and other factors, the Board concluded that the Fund’s expenses and overall plans to improve performance supported the re-approval of the Advisory Agreements.

   The Board also received information about the investment sub-advisory fee rate (the “Sub-Advisory Agreement Rate”) payable by the Adviser to the Sub-Adviser for investment sub-advisory services. The Board concluded that the Sub-Advisory Agreement Rate was fair and equitable, based on its consideration of the factors described here.

Profitability

   The Board received and considered a detailed profitability analysis of the Adviser based on the Advisory Agreements, as well as on other relationships between the Fund and the Adviser and its affiliates. The Board also considered a comparison of the Adviser’s profitability to that of other similar investment advisers whose profitability information is publicly available. The Board concluded that, in light of the costs of providing investment management and other services to the Fund, the profits and other ancillary benefits reported by the Adviser were not unreasonable.

   The Board did not consider profitability information with respect to the Sub-Adviser, which is not affiliated with the Adviser. The Board considered that the Sub-Advisory Agreement Rate paid to the Sub-Adviser had been negotiated by the Adviser on an arm’s length basis and that the Sub-Adviser’s separate profitability from its relationship with the Fund was not a material factor in determining whether to renew the agreement.

3 

Economies of Scale

  The Board received and considered general information regarding economies of scale with respect to the management of the Fund, including the Fund’s ability to appropriately benefit from economies of scale under the Fund’s fee structure. The Board recognized the inherent limitations of any analysis of economies of scale, stemming largely from the Board’s understanding that most of the Adviser’s costs are not specific to individual Funds, but rather are incurred across a variety of products and services.

  To the extent the Board and the Adviser were able to identify actual or potential economies of scale from Fund-specific or allocated expenses, in order to ensure that any such economies continue to be reasonably shared with the Fund as its assets increase, the Adviser and the Board agreed to continue the existing breakpoints to the Advisory Agreement Rate.

Information About Services to Other Clients

   The Board also received information about the nature, extent and quality of services and fee rates offered by the Adviser and Sub-Adviser to their other clients, including other registered investment companies, institutional investors and separate accounts. The Board concluded that the Advisory Agreement Rate and the Sub-Advisory Agreement Rate were not unreasonable, taking into account fee rates offered to others by the Adviser and Sub-Adviser, respectively, after giving effect to differences in services.

Other Benefits to the Adviser

   The Board received information regarding potential “fall-out” or ancillary benefits received by the Adviser and its affiliates and the Sub-Adviser as a result of their relationship with the Fund. Such benefits could include, among others, benefits directly attributable to the relationship of the Adviser and Sub-Adviser with the Fund and benefits potentially derived from an increase in business as a result of their relationship with the Fund (such as the ability to market to shareholders other financial products offered by the Adviser and its affiliates).

   The Board also considered the effectiveness of the Adviser’s, Sub-Adviser’s and Fund’s policies and procedures for complying with the requirements of the federal securities laws, including those relating to best execution of portfolio transactions and brokerage allocation.

Other Factors and Broader Review

   As discussed above, the Board reviewed detailed materials received from the Adviser and Sub-Adviser as part of the annual re-approval process. The Board also regularly reviews and assesses the quality of the services that the Fund receives throughout the year. In this regard, the Board reviews reports of the Adviser at least quarterly, which include, among other things, fund performance reports and compliance reports. In addition, the Board meets with portfolio managers and senior investment officers at various times throughout the year.

After considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Board concluded that approval of the

4 

continuation of the Advisory Agreements for the Fund was in the best interest of the Fund and its shareholders. Accordingly, the Board unanimously approved the continuation of the Advisory Agreements.

5 

A look at performance

For the periods ended August 31, 2008

		Average annual returns (%)				Cumulative total returns (%)
		with maximum sales charge (POP)				with maximum sales charge (POP)
	Inception				Since	Six				Since
Class	date	1-year	5-year	10-year	inception	months	1-year	5-year	10-year	inception
A	6-12-06	–17.04	—	—	–5.31	–2.74	–17.04	—	—	–11.44
B	6-12-06	–17.43	—	—	–5.02	–2.99	–17.43	—	—	–10.85
C	6-12-06	–14.13	—	—	–3.77	1.01	–14.13	—	—	–8.20
I1	6-12-06	–12.29	—	—	–2.71	2.59	–12.29	—	—	–5.94
R11	6-12-06	–12.67	—	—	–3.29	2.30	–12.67	—	—	–7.18
11	6-12-06	–12.29	—	—	–2.68	2.59	–12.29	—	—	–5.87

Performance figures assume all distributions are reinvested. Public offering price (POP) figures reflect maximum sales charges 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 June 30, 2009. The net expenses are as follows: Class A — 1.39%, Class B — 2.09%, Class C —2.09%, Class I — 0.99%, Class R1 — 1.49%, Class 1 — 0.94%. Had the fee waivers and expense limitations not been in place, the gross expenses would be as follows: Class A — 2.04%, Class B —6.82%, Class C — 3.88%, Class I — 8.80%, Class R1 — 15.22%, Class 1 — 1.62%.

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 current to the most recent month end performance data, 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.

6  Value Opportunities Fund | Semiannual report 

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	$9,175	$8,915	$10,260
C2	6-12-06	9,180	9,180	10,260
I3	6-12-06	9,406	9,406	10,260
R13	6-12-06	9,282	9,282	10,260
13	6-12-06	9,413	9,413	10,260

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 August 31, 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.

Semiannual report | Value Opportunities Fund  7 

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 March 1, 2008 with the same investment held until August 31, 2008.

	Account value	Ending value	Expenses paid during
	on 3-1-08	on 8-31-08	period ended 8-31-081
Class A	$1,000.00	$1,023.50	$7.09
Class B	1,000.00	1,020.10	10.64
Class C	1,000.00	1,020.10	10.64
Class I	1,000.00	1,025.90	5.06
Class R1	1,000.00	1,023.00	7.60
Class 1	1,000.00	1,025.90	4.80

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 August 31, 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:

8  Value Opportunities Fund | Semiannual report 

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 March 1, 2008, with the same investment held until August 31, 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 3-1-08	on 8-31-08	period ended 8-31-081
Class A	$1,000.00	$1,018.20	$7.07
Class B	1,000.00	1,014.70	10.61
Class C	1,000.00	1,014.70	10.61
Class I	1,000.00	1,020.20	5.04
Class R1	1,000.00	1,017.70	7.58
Class 1	1,000.00	1,020.50	4.79

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%, 2.09%, 2.09%, 0.99%, 1.49% 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 number of days in most recent fiscal half-year/365 (to reflect the one-half year period).

Semiannual report | Value Opportunities Fund  9 

Portfolio summary

Top 10 holdings1
Patterson-UTI Energy, Inc.	1.4%	Lexmark International, Inc.	1.0%
Philadelphia Consolidated		Sigma-Aldrich Corp.	1.0%
Holding Corp.	1.4%
		Tech Data Corp.	1.0%
Ingram Micro, Inc.	1.2%
		King Pharmaceuticals, Inc.	1.0%
Cimarex Energy Company	1.1%
		Transatlantic Holdings, Inc.	1.0%
Annaly Capital Management, Inc.	1.1%
Sector distribution1,2
Financial	29%	Short-term Securities	7%
Consumer, Cyclical	18%	Technology	5%
Consumer, Non-cyclical	16%	Basic Materials	5%
Industrial	9%	Utilities	2%
Energy	8%	Communications	1%

¹ As a percentage of net assets on August 31, 2008.

² Sector investing is subject to greater risks than the market as a whole. Because the Fund may focus on particular sectors of the economy, its performance may depend on the performance of those sectors.

10  Value Opportunities Fund | Semiannual report 

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 8-31-08 (unaudited)

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 95.95%		$17,600,833
(Cost $18,685,452)
Aerospace 0.54%		99,690
Alliant Techsystems, Inc. *	600	63,138
Curtiss-Wright Corp.	100	5,387
Teledyne Technologies, Inc. *	500	31,165
Agriculture 0.25%		46,420
Fresh Del Monte Produce, Inc. *	2,000	46,420
Air Travel 0.22%		41,016
SkyWest, Inc.	2,400	41,016
Apparel & Textiles 2.04%		373,331
Cintas Corp.	2,300	70,840
Columbia Sportswear Company	1,200	48,468
Jones Apparel Group, Inc.	4,000	79,440
K-Swiss, Inc., Class A	1,300	22,295
Liz Claiborne, Inc.	5,000	81,050
Oxford Industries, Inc.	900	20,565
Timberland Company, Class A *	1,600	26,976
Wolverine World Wide, Inc.	900	23,697
Auto Parts 1.52%		279,419
ArvinMeritor, Inc.	900	13,509
Autoliv, Inc.	2,100	80,619
BorgWarner, Inc.	1,700	70,295
O’Reilly Automotive, Inc. *	2,500	72,800
TRW Automotive Holdings Corp. *	2,200	42,196
Auto Services 1.36%		249,051
AutoNation, Inc. * (a)	13,800	156,630
Copart, Inc. *	2,100	92,421
Automobiles 1.04%		189,943
Asbury Automotive Group, Inc.	3,800	46,132
Group 1 Automotive, Inc.	2,100	44,436
Penske Auto Group, Inc.	7,500	99,375

See notes to financial statements

Semiannual report | Value Opportunities Fund  11 

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

Issuer	Shares	Value
Banking 10.40%		$1,907,340
AMCORE Financial, Inc.	823	7,236
Anchor BanCorp Wisconsin, Inc.	2,400	18,432
Associated Banc Corp.	6,100	106,750
Astoria Financial Corp.	2,800	61,180
BancFirst Corp.	200	9,628
BancorpSouth, Inc.	2,500	57,550
Bank Mutual Corp.	1,100	13,255
Bank of Hawaii Corp.	1,000	52,880
BOK Financial Corp.	700	30,492
Cathay General Bancorp, Inc.	2,400	46,464
Central Pacific Financial Corp.	1,700	20,230
Chemical Financial Corp. (a)	1,200	34,596
City National Corp.	2,000	98,980
Commerce Bancshares, Inc.	2,364	106,380
Community Bank Systems, Inc.	1,800	40,680
Cullen Frost Bankers, Inc.	400	22,272
Dime Community Bancorp, Inc.	1,500	24,630
East West Bancorp, Inc. (a)	1,400	17,458
F.N.B. Corp.	600	7,038
First Niagara Financial Group, Inc.	1,600	23,936
FirstMerit Corp.	4,700	95,128
Flagstar Bancorp, Inc. (a)	1,000	4,430
Flushing Financial Corp.	1,300	22,607
Hancock Holding Company	800	39,240
Hanmi Financial Corp.	2,700	13,797
International Bancshares Corp.	3,840	99,226
Nara Bancorp, Inc.	900	9,855
New York Community Bancorp, Inc.	1,600	26,384
Northwest Bancorp, Inc.	900	24,966
Old National Bancorp	2,900	50,547
Oriental Financial Group, Inc.	1,700	29,376
Pacific Capital Bancorp (a)	900	13,239
Park National Corp. (a)	700	42,910
Popular, Inc. (a)	12,200	99,430
PrivateBancorp, Inc.	400	12,256
Provident Bankshares Corp. (a)	2,100	16,254
Provident Financial Services, Inc.	1,300	19,825
S & T Bancorp, Inc.	1,400	46,984
SVB Financial Group *	300	16,815
TCF Financial Corp.	7,200	113,400
Trustmark Corp.	3,100	59,489
United Bankshares, Inc.	800	20,600
Washington Federal, Inc.	1,400	24,122
Webster Financial Corp.	1,000	21,320
WestAmerica Bancorp	1,100	56,320

See notes to financial statements

12  Value Opportunities Fund | Semiannual report 

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

Issuer	Shares	Value
Banking (continued)
Whitney Holding Corp.	2,100	$45,465
Wilmington Trust Corp.	2,400	56,328
Wilshire Bancorp, Inc.	800	10,856
Zions Bancorp	600	16,104
Biotechnology 1.42%		259,987
Bio-Rad Laboratories, Inc., Class A *	400	43,040
Charles River Laboratories International, Inc. *	900	59,049
Invitrogen Corp. *	2,500	106,150
Pharmanet Development Group, Inc. *	800	20,880
Techne Corp. *	400	30,868
Building Materials & Construction 0.06%		11,100
Lennox International, Inc.	300	11,100
Business Services 4.07%		747,178
Affiliated Computer Services, Inc., Class A *	1,600	85,184
Convergys Corp. *	2,800	41,300
Core-Mark Holding Company, Inc. *	900	26,550
CSG Systems International, Inc. *	1,100	20,790
Deluxe Corp.	3,300	54,483
Ennis Business Forms, Inc.	600	9,906
FactSet Research Systems, Inc.	500	31,355
Global Payments, Inc.	1,600	77,136
Harte-Hanks, Inc.	1,000	12,350
Hewitt Associates, Inc., Class A *	300	12,063
Insight Enterprises, Inc. *	3,300	54,912
Kelly Services, Inc., Class A	2,800	54,152
Manpower, Inc.	1,200	57,672
MAXIMUS, Inc.	700	25,900
Pre-Paid Legal Services, Inc. * (a)	400	17,856
Resources Connection, Inc. *	900	21,762
SAIC, Inc. *	1,100	22,055
SRA International, Inc., Class A *	800	18,784
SYNNEX Corp. *	2,100	48,279
Total Systems Services, Inc.	1,300	25,896
Volt Information Sciences, Inc. *	800	11,216
Watson Wyatt Worldwide, Inc., Class A	300	17,577
Cellular Communications 0.16%		29,286
Brightpoint, Inc. *	1,100	9,471
Syniverse Holdings, Inc. *	500	8,295
Telephone & Data Systems, Inc.	300	11,520
Chemicals 3.28%		601,257
Arch Chemicals, Inc.	300	11,010
Celanese Corp., Series A	700	26,992
Cytec Industries, Inc.	600	30,480
Eastman Chemical Company	500	30,160

See notes to financial statements

Semiannual 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
Chemicals (continued)
FMC Corp.	2,100	$154,434
Lubrizol Corp.	900	47,691
Newmarket Corp.	600	40,764
Olin Corp.	400	10,764
PolyOne Corp. *	3,200	26,272
Sensient Technologies Corp.	600	17,526
Sigma-Aldrich Corp.	3,200	181,632
Stepan Company	400	23,532
Colleges & Universities 0.31%		57,029
Career Education Corp. *	2,900	54,375
Corinthian Colleges, Inc. *	200	2,654
Commercial Services 0.06%		11,050
CBIZ, Inc. *	1,300	11,050
Computers & Business Equipment 4.30%		788,924
Benchmark Electronics, Inc. *	700	11,543
CACI International, Inc., Class A *	300	15,195
Diebold, Inc.	500	19,825
Ingram Micro, Inc., Class A *	11,400	215,574
Lexmark International, Inc. *	5,200	187,044
Plexus Corp. *	900	25,227
Tech Data Corp. *	5,300	180,942
Western Digital Corp. *	4,900	133,574
Construction & Mining Equipment 0.12%		22,164
Rowan Companies, Inc.	600	22,164
Construction Materials 0.61%		111,449
Applied Industrial Technologies, Inc.	600	17,466
Clarcor, Inc.	300	11,979
Comfort Systems USA, Inc.	1,600	24,384
Simpson Manufacturing Company, Inc. (a)	1,600	44,480
Universal Forest Products, Inc.	400	13,140
Containers & Glass 0.45%		82,736
Ball Corp.	800	36,736
Bemis Company, Inc.	1,400	39,088
Sonoco Products Company	200	6,912
Cosmetics & Toiletries 0.48%		88,318
Alberto-Culver Company	1,200	31,392
Chattem, Inc. *	100	7,012
Estee Lauder Companies, Inc., Class A	700	34,839
Nu Skin Enterprises, Inc., Class A	900	15,075
Crude Petroleum & Natural Gas 4.44%		814,775
Cimarex Energy Company	3,600	199,944
Forest Oil Corp. *	900	51,228
Patterson-UTI Energy, Inc.	9,200	261,464

See notes to financial statements

14  Value Opportunities Fund | Semiannual report 

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 (continued)
Plains Exploration & Production Company *	200	$10,780
Swift Energy Company *	1,000	46,710
Unit Corp. *	2,500	169,325
W&T Offshore, Inc.	500	17,580
Whiting Petroleum Corp. *	600	57,744
Domestic Oil 1.91%		350,304
Berry Petroleum Company, Class A	900	37,458
Comstock Resources, Inc. *	300	19,482
Encore Aquisition Company *	1,100	56,716
Frontier Oil Corp.	900	17,433
Helix Energy Solutions Group, Inc. *	200	6,154
Holly Corp.	1,100	35,200
Natural Gas Services Group, Inc. *	500	12,970
Oil States International, Inc. *	1,500	83,445
St. Mary Land & Exploration Company	800	33,776
Stone Energy Corp. *	1,000	47,670
Drugs & Health Care 1.15%		211,550
Invacare Corp.	2,400	61,032
Landauer, Inc.	200	13,052
Molina Healthcare, Inc. *	2,000	62,940
Perrigo Company	1,800	62,982
Res-Care, Inc. *	600	11,544
Educational Services 0.41%		74,330
ITT Educational Services, Inc. *	600	53,346
Strayer Education, Inc.	100	20,984
Electrical Equipment 0.65%		119,688
A.O. Smith Corp.	300	12,351
Anixter International, Inc. *	200	14,762
FLIR Systems, Inc. *	800	28,560
Hubbell, Inc., Class B	700	30,457
W.H. Brady Company, Class A	600	22,026
Wesco International, Inc. *	300	11,532
Electrical Utilities 0.68%		124,311
Hawaiian Electric Industries, Inc.	2,000	52,900
IDACORP, Inc.	400	11,920
Teco Energy, Inc.	2,000	35,680
UIL Holding Corp.	300	9,780
Wisconsin Energy Corp.	300	14,031
Electronics 0.78%		143,891
Arrow Electronics, Inc. *	1,800	59,742
Avnet, Inc. *	400	11,740
Checkpoint Systems, Inc. *	100	2,129
Enersys *	300	8,436
Harman International Industries, Inc.	300	10,209

See notes to financial statements

Semiannual 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
Electronics (continued)
Jabil Circuit, Inc.	700	$11,802
Rogers Corp. *	200	8,002
Teleflex, Inc.	300	19,371
Zoran Corp. *	1,400	12,460
Energy 0.95%		174,825
Energen Corp.	1,200	67,008
Energy East Corp.	1,100	29,920
Headwaters, Inc. * (a)	2,700	41,553
MDU Resources Group, Inc.	1,100	36,344
Financial Services 2.15%		394,144
City Holding Company	900	37,629
Delphi Financial Group, Inc.	400	10,732
Encore Capital Group, Inc. *	800	10,160
Federal Agricultural Mortgage Corp., Class C	1,500	43,950
Fulton Financial Corp.	5,500	58,630
Knight Capital Group, Inc. *	1,200	20,688
NBT Bancorp, Inc.	600	15,054
SEI Investments Company	2,800	66,136
Student Loan Corp.	300	35,373
Synovus Financial Corp.	5,700	52,440
UMB Financial Corp.	400	20,812
Waddell & Reed Financial, Inc., Class A	700	22,540
Food & Beverages 2.39%		438,863
Chiquita Brands International, Inc. *	1,100	16,148
Dean Foods Company *	3,400	85,578
Flowers Foods, Inc.	1,900	50,236
Hormel Foods Corp.	600	21,396
J.M. Smucker Company	100	5,423
McCormick & Company, Inc.	800	32,360
Nash Finch Company	1,500	61,080
PepsiAmericas, Inc.	2,900	67,947
Seaboard Corp.	19	24,643
Tyson Foods, Inc., Class A	5,100	74,052
Furniture & Fixtures 0.95%		174,434
American Woodmark Corp. (a)	100	2,376
Ethan Allen Interiors, Inc. (a)	2,000	54,280
Furniture Brands International, Inc.	1,500	13,425
Hooker Furniture Corp.	500	8,420
Leggett & Platt, Inc.	4,300	95,933
Gas & Pipeline Utilities 0.48%		88,710
National Fuel Gas Company	600	28,386
ONEOK, Inc.	300	13,113
Piedmont Natural Gas, Inc.	400	11,540

See notes to financial statements

16  Value Opportunities Fund | Semiannual report 

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

Issuer	Shares	Value
Gas & Pipeline Utilities (continued)
The Laclede Group, Inc.	300	$13,479
Vectren Corp.	800	22,192
Healthcare Products 1.27%		233,284
CONMED Corp. *	100	3,196
IDEXX Laboratories, Inc. *	700	39,410
Merit Medical Systems, Inc. *	700	13,552
Owens & Minor, Inc.	2,500	115,300
Patterson Companies, Inc. *	1,900	61,826
Healthcare Services 2.61%		478,182
AMERIGROUP Corp. *	1,500	38,820
Apria Healthcare Group, Inc. *	2,300	45,494
Covance, Inc. *	600	56,604
Health Net, Inc. *	1,700	47,005
IMS Health, Inc.	1,100	24,442
Kindred Healthcare, Inc. *	1,300	40,209
Lincare Holdings, Inc. *	1,500	49,500
Omnicare, Inc.	2,600	83,850
Pediatrix Medical Group, Inc. *	1,400	79,730
WellCare Health Plans, Inc. *	300	12,528
Homebuilders 0.27%		49,740
M.D.C. Holdings, Inc.	1,200	49,740
Hotels & Restaurants 0.64%		116,913
Brinker International, Inc.	2,300	43,516
CBRL Group, Inc.	1,200	31,008
CEC Entertainment, Inc. *	1,100	37,686
O’Charley’s, Inc.	400	4,004
Ruby Tuesday, Inc. *	100	699
Household Appliances 0.36%		66,064
Black & Decker Corp.	800	50,600
National Presto Industries, Inc.	200	15,464
Household Products 1.07%		195,649
Blyth, Inc.	3,800	60,078
Energizer Holdings, Inc. *	800	67,952
Tupperware Brands Corp.	1,600	57,152
WD-40 Company	300	10,467
Industrial Machinery 0.84%		153,901
AGCO Corp. *	300	18,489
Crane Company	1,400	51,408
Flowserve Corp.	100	13,212
Gardner Denver, Inc. *	1,100	49,654
Kennametal, Inc.	600	21,138

See notes to financial statements

Semiannual 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
Insurance 16.82%		$3,084,848
Alleghany Corp. *	32	10,240
Allied World Assurance Holdings, Ltd.	300	11,586
American Financial Group, Inc.	4,900	139,797
American National Insurance Company	300	28,635
American Physicians Capital, Inc.	400	16,920
Arch Capital Group, Ltd. *	1,900	132,544
Aspen Insurance Holdings, Ltd.	2,400	65,040
Axis Capital Holdings, Ltd.	3,500	117,005
Brown & Brown, Inc.	1,400	28,448
Donegal Group, Inc.	400	7,192
Endurance Specialty Holdings, Ltd.	1,800	58,716
Erie Indemnity Company, Class A	1,200	55,500
FBL Financial Group, Inc., Class A	600	13,770
First American Corp.	3,700	93,499
Hanover Insurance Group, Inc.	700	33,061
Harleysville Group, Inc.	1,200	43,524
HCC Insurance Holdings, Inc.	6,600	166,188
Horace Mann Educators Corp.	3,300	49,170
Infinity Property & Casualty Corp.	300	13,950
IPC Holdings, Ltd.	400	12,668
Kansas City Life Insurance Company	200	9,516
Markel Corp. *	100	37,000
Max Re Capital, Ltd.	1,300	33,800
Mercury General Corp.	2,200	112,068
Montpelier Re Holdings, Ltd.	800	12,952
National Western Life Insurance Company, Class A	200	47,888
Nationwide Financial Services, Inc., Class A	1,700	87,448
Navigators Group, Inc. *	600	31,440
Odyssey Re Holdings Corp.	200	7,552
Old Republic International Corp.	7,000	76,510
PartnerRe, Ltd.	1,500	103,365
Philadelphia Consolidated Holding Corp. *	4,200	250,866
Platinum Underwriters Holdings, Ltd.	1,300	46,995
PMI Group, Inc.	100	359
Presidential Life Corp.	500	9,000
Protective Life Corp.	2,100	76,209
Reinsurance Group of America, Inc.	3,100	149,296
RenaissanceRe Holdings, Ltd.	1,000	50,710
RLI Corp.	1,600	89,456
SAFECO Corp.	800	54,080
Safety Insurance Group, Inc.	1,600	68,800
Selective Insurance Group, Inc.	3,100	74,834
Stancorp Financial Group, Inc.	2,100	102,921
State Auto Financial Corp.	800	24,696
Stewart Information Services Corp.	1,700	31,807

See notes to financial statements

18  Value Opportunities Fund | Semiannual report 

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

Issuer	Shares	Value
Insurance (continued)
Transatlantic Holdings, Inc.	2,900	$174,290
United Fire & Casualty Company	700	20,818
Unitrin, Inc.	1,200	30,636
W.R. Berkley Corp.	3,900	91,884
Zenith National Insurance Corp.	2,100	80,199
Internet Service Provider 0.17%		30,756
Earthlink, Inc. *	3,300	30,756
Leisure Time 0.55%		100,513
Brunswick Corp.	5,000	68,950
Polaris Industries, Inc. (a)	700	31,563
Life Sciences 0.46%		84,570
Pharmaceutical Product Development, Inc.	400	16,320
Waters Corp. *	1,000	68,250
Liquor 0.03%		4,765
Molson Coors Brewing Company, Class B	100	4,765
Manufacturing 1.76%		323,045
AptarGroup, Inc.	500	20,195
Ceradyne, Inc. *	1,400	63,084
Mine Safety Appliances Company	800	29,064
Pentair, Inc.	700	25,725
Snap-on, Inc.	500	28,510
SPX Corp.	910	108,517
Stanley Works	1,000	47,950
Medical-Hospitals 1.24%		228,034
Centene Corp. *	1,900	42,902
Health Management Associates, Inc., Class A *	6,800	39,508
LifePoint Hospitals, Inc. *	2,000	67,480
RehabCare Group, Inc. *	1,400	25,676
Universal Health Services, Inc., Class B	700	43,246
VCA Antech, Inc. *	300	9,222
Metal & Metal Products 1.53%		280,657
Commercial Metals Company	1,600	41,648
Lawson Products, Inc.	300	9,036
Matthews International Corp., Class A	600	30,156
Mueller Industries, Inc.	1,500	42,075
Reliance Steel & Aluminum Company	2,200	125,422
Timken Company	1,000	32,320
Mining 0.34%		63,073
AMCOL International Corp.	400	14,584
Compass Minerals International, Inc.	700	48,489
Mobile Homes 0.31%		57,450
Thor Industries, Inc. (a)	2,500	57,450

See notes to financial statements

Semiannual 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
Newspapers 0.01%		$2,250
Lee Enterprises, Inc.	600	2,250
Office Furnishings & Supplies 0.80%		146,780
HNI Corp.	1,200	27,768
IKON Office Solutions, Inc.	1,000	17,310
Office Depot, Inc. *	3,900	27,456
OfficeMax, Inc.	800	9,792
United Stationers, Inc. *	1,300	64,454
Petroleum Services 1.20%		220,843
Grey Wolf, Inc. *	3,000	26,130
Helmerich & Payne, Inc.	1,700	97,104
Hornbeck Offshore Services, Inc. *	200	8,812
Petroleum Development Corp. *	200	12,158
Pioneer Drilling Company *	700	11,732
Tidewater, Inc.	500	30,335
World Fuel Services Corp.	1,200	34,572
Pharmaceuticals 1.46%		266,804
Endo Pharmaceutical Holdings, Inc. *	2,800	63,616
King Pharmaceuticals, Inc. *	15,800	180,752
Mylan, Inc. *	800	10,312
Watson Pharmaceuticals, Inc. *	400	12,124
Publishing 0.28%		51,621
Meredith Corp.	400	11,352
The New York Times Company, Class A (a)	3,100	40,269
Real Estate 1.53%		279,825
Annaly Capital Management, Inc., REIT	12,900	192,984
Anthracite Capital, Inc., REIT	2,500	14,075
Anworth Mortgage Asset Corp., REIT	1,400	9,156
Health Care, Inc., REIT	200	10,374
Inland Real Estate Corp., REIT	700	10,528
LTC Properties, Inc., REIT	400	10,748
MFA Mortgage Investments, Inc., REIT	4,700	31,960
Retail Grocery 0.65%		118,546
Ingles Markets, Inc.	1,900	46,949
Ruddick Corp.	1,000	31,840
SUPERVALU, Inc.	1,300	30,147
United Natural Foods, Inc. *	500	9,610
Retail Trade 6.24%		1,144,119
Advance Auto Parts, Inc.	3,000	129,120
Aeropostale, Inc. *	900	31,374
American Eagle Outfitters, Inc.	3,800	57,190
BJ’s Wholesale Club, Inc. *	3,200	121,696
Casey’s General Stores, Inc.	1,400	40,600
Dollar Tree, Inc. *	2,600	99,736
Family Dollar Stores, Inc.	3,300	82,236

See notes to financial statements

20  Value Opportunities Fund | Semiannual report 

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)
Foot Locker, Inc.	2,800	$45,612
Longs Drug Stores Corp.	800	57,320
NBTY, Inc. *	1,600	53,184
Pantry, Inc. *	2,100	38,514
RadioShack Corp.	2,800	53,228
Regis Corp.	2,500	68,650
Rent-A-Center, Inc. *	3,600	81,576
Ross Stores, Inc.	1,900	76,399
Sonic Automotive, Inc.	2,800	30,128
The Dress Barn, Inc. *	600	9,756
The Men’s Wearhouse, Inc.	1,000	21,900
Tractor Supply Company *	300	12,786
Williams-Sonoma, Inc.	1,100	19,459
Zale Corp. * (a)	500	13,655
Semiconductors 0.78%		143,351
Actel Corp. *	800	11,024
Cabot Microelectronics Corp. *	400	15,448
Intersil Corp., Class A	600	14,058
QLogic Corp. *	4,000	74,720
Semtech Corp. *	1,900	28,101
Software 0.42%		77,157
ManTech International Corp. *	200	11,778
Sybase, Inc. *	1,900	65,379
Steel 0.75%		137,940
Carpenter Technology Corp.	800	31,048
Olympic Steel, Inc.	500	23,805
Schnitzer Steel Industries, Inc.	700	47,887
Worthington Industries, Inc.	2,000	35,200
Telecommunications Equipment & Services 0.39%		70,935
ADTRAN, Inc.	600	13,680
J2 Global Communications, Inc. *	900	22,203
Plantronics, Inc.	1,300	33,540
Premiere Global Services, Inc. *	100	1,512
Telephone 0.42%		77,260
CenturyTel, Inc.	2,000	77,260
Toys, Amusements & Sporting Goods 0.21%		38,655
Hasbro, Inc.	700	26,180
Jakks Pacific, Inc. *	500	12,475
Transportation 0.45%		82,132
Bristow Group, Inc. *	400	16,308
Overseas Shipholding Group, Inc.	800	57,392
Pacer International, Inc.	400	8,432

See notes to financial statements

Semiannual 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
Trucking & Freight 0.46%		$84,658
Ryder Systems, Inc.	1,100	70,972
Werner Enterprises, Inc.	600	13,686
	Principal
	amount
Short-term investments 3.32%		$608,741
(Cost $608,741)
John Hancock Cash Investment Trust, 2.5657% (c)(f)	$608,741	608,741
Repurchase agreements 4.13%		$758,000
(Cost $758,000)
Repurchase Agreement with State Street Corp. dated 8/29/2008
at 1.70% to be repurchased at $758,143 on 9/2/2008,
collateralized by $765,000 Federal National Mortgage Association,
3.375% due 3/5/2010 (valued at $778,235, including interest)	$758,000	758,000
Total investments (Cost $20,052,193)† 103.40%		$18,967,574
Liabilities in excess of other assets (3.40%)		($623,478)
Total net assets 100.00%		$18,344,096

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) The investment is an affiliate of the Fund, the adviser and/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 July 31, 2008, the aggregate cost of investment securities for federal income tax purposes was $20,076,153. Net unrealized depreciation aggregated $1,108,579, of which $1,234,140 related to appreciated investment securities and $2,342,719 related to depreciated investment securities.

The Fund had the following financial futures contracts open on August 31, 2008:

					UNREALIZED
OPEN	NUMBER OF		EXPIRATION	NOTIONAL	APPRECIATION
CONTRACTS	CONTRACTS	POSITION	DATE	VALUE	(DEPRECIATION)
Russell 2000 Mini	3	Long	Sep 2008	$244,800	$19,089
Index Futures
S&P Mid 400 E-Mini	3	Long	Sep 2008	221,970	(13,333)
Index Futures
					$5,756

See notes to financial statements

22  Value Opportunities Fund | Semiannual report 

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 8-31-08 (unaudited)

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 $19,443,452) including $596,805
of securities loaned (Note 2)	$18,358,833
Investments in affiliated issuers, at value (Cost $608,741) (Note 2)	608,741
Total investments, at value (Cost $20,052,193)	18,967,574
Cash	60
Cash collateral at broker for futures contracts	22,200
Receivable for fund shares sold	12,109
Dividends and interest receivable	19,560
Receivable for security lending income	846
Other assets	33,627
Total assets	19,055,976
Liabilities
Payable for fund shares repurchased	10,999
Payable upon return of securities loaned (Note 2)	608,741
Payable for futures variation margin	3,690
Payable to affiliates
Fund administration fees	147
Transfer agent fees	3,879
Distribution and service fees	148
Investment management fees	3,083
Trustees’ fees	984
Other payables and accrued expenses	80,209
Total liabilities	711,880
Net assets
Capital paid-in	$21,569,616
Undistributed net investment income	49,446
Accumulated undistributed net realized loss on investments
and futures contracts	(2,196,103)
Net unrealized appreciation (depreciation) on investments and futures contracts	(1,078,863)
Net assets	$18,344,096

See notes to financial statements

Semiannual report | Value Opportunities Fund  23 

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	$16,004,907
Shares outstanding	919,731
Net asset value and redemption price per share	$17.40
Class B1
Net assets	$256,490
Shares outstanding	14,843
Net asset value and offering price per share	$17.28
Class C1
Net assets	$805,929
Shares outstanding	46,613
Net asset value and offering price per share	$17.29
Class I
Net assets	$88,045
Shares outstanding	5,043
Net asset value, offering price and redemption price per share	$17.46
Class R1
Net assets	$118,326
Shares outstanding	6,819
Net asset value, offering price and redemption price per share	$17.35
Class 1
Net assets	$1,070,399
Shares outstanding	61,299
Net asset value, offering price and redemption price per share	$17.46
Maximum public offering price per share
Class A (net asset value per share + 95%)2	$18.32

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

24  Value Opportunities Fund | Semiannual 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 period ended 8-31-08 (unaudited)¹

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	$149,302
Securities lending	10,637
Income from affiliated issuers	6,309
Interest	5,365
Less foreign taxes withheld	(209)
Total investment income	171,404
Expenses
Investment management fees (Note 3)	73,234
Distribution and service fees (Note 3)	30,727
Transfer agent fees (Note 3)	7,795
Blue sky fees (Note 3)	37,194
Fund administration fees (Note 3)	1,032
Audit and legal fees	19,595
Printing and postage fees (Note 3)	4,896
Custodian fees	23,798
Trustees’ fees (Note 3)	1,309
Registration and filing fees	7,423
Miscellaneous	162
Total expenses	207,165
Less expense reductions (Note 3)	(77,466)
Less transfer agency credits (Note 3)	(30)
Net expenses	129,669
Net investment income	41,735
Realized and unrealized gain (loss)
Net realized loss on
Investments in unaffiliated issuers	(833,009)
Futures contracts	(19,741)
	(852,750)
Change in net unrealized appreciation (depreciation) of
Investments in unaffiliated issuers	1,213,502
Futures contracts	12,331
	1,225,833
Net realized and unrealized gain	373,083
Increase in net assets from operations	$414,818

¹ Semiannual period from 3-1-08 to 8-31-08.

See notes to financial statements

Semiannual report | Value Opportunities Fund  25 

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

Statements 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	Period
	ended	ended
	2-29-08	8-31-081
Increase (decrease) in net assets
From operations
Net investment income	$113,625	$41,735
Net realized loss	(637,359)	(852,750)
Change in net unrealized appreciation (depreciation)	(4,119,589)	1,225,833
Increase (decrease) in net assets resulting from operations	(4,643,323)	414,818
Distributions to shareholders
From net investment income
Class A	(98,667)	—
Class I	(1,006)	—
Class R1	(547)	—
Class 1	(4,886)	—
From net realized gain
Class A	(875,720)	—
Class B	(16,516)	—
Class C	(64,954)	—
Class I	(5,327)	—
Class R1	(5,854)	—
Class 1	(24,644)	—
Total distributions	(1,098,121)	—
From Fund share transactions (Note 5)	1,738,819	(260,232)
Total increase (decrease)	(4,002,625)	154,586
Net assets
Beginning of period	22,192,135	18,189,510
End of period	$18,189,510	$18,344,096
Undistributed net investment income	$7,711	$49,446

¹ Semiannual period from 3-1-08 to 8-31-08. Unaudited.

See notes to financial statements

26  Value Opportunities Fund | Semiannual report 

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	8-31-082
Per share operating performance
Net asset value, beginning of period	$20.00	$22.36	$17.00
Net investment income3	0.074	0.12	0.04
Net realized and unrealized
gain (loss) on investments	2.53	(4.41)	0.36
Total from investment operations	2.60	(4.29)	0.40
Less distributions
From net investment income	(0.08)	(0.11)	—
From net realized gain	(0.16)	(0.96)	—
Total distributions	(0.24)	(1.07)	—
Net asset value, end of period	$22.36	$17.00	$17.40
Total return (%)5,6	13.067	(19.45)	2.357
Ratios and supplemental data
Net assets, end of period (in millions)	$20	$16	$16
Ratios (as a percentage of average net assets):
Expenses before reductions	2.138	2.04	1.918
Expenses net of fee waivers, if any	1.388	1.39	1.398
Expenses net of all fee waivers and credits	1.388	1.39	1.398
Net investment income	0.474,8	0.56	0.488
Portfolio turnover (%)	30	68	34

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

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

³ Based on the average of the shares outstanding.

⁴ 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.

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

⁶ Assumes dividend reinvestment and does not reflect the effect of sales charges.

⁷ Not annualized.

⁸ Annualized.

See notes to financial statements

Semiannual 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

CLASS B SHARES
Period ended	2-28-071	2-29-08	8-31-082
Per share operating performance
Net asset value, beginning of period	$20.00	$22.33	$16.94
Net investment loss3	(0.01)4	(0.03)	(0.02)
Net realized and unrealized
gain (loss) on investments	2.51	(4.40)	0.36
Total from investment operations	2.50	(4.43)	0.34
Less distributions
From net investment income	(0.01)	—	—
From net realized gain	(0.16)	(0.96)	—
Total distributions	(0.17)	(0.96)	—
Net asset value, end of period	$22.33	$16.94	$17.28
Total return (%)5,6	12.547	(20.08)	2.017
Ratios and supplemental data
Net assets, end of period (in millions)	— 8	— 8	— 8
Ratios (as a percentage of average net assets):
Expenses before reductions	11.319	6.82	8.039
Expenses net of fee waivers, if any	2.089	2.10	2.099
Expenses net of all fee waivers and credits	2.089	2.09	2.099
Net investment loss	(0.07)4,9	(0.14)	(0.21)9
Portfolio turnover (%)	30	68	34

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

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

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 $0.02 per share and 0.10% of average net assets.

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 $500,0000.

⁹ Annualized.

See notes to financial statements

28  Value Opportunities Fund | Semiannual report 

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	8-31-082
Per share operating performance
Net asset value, beginning of period	$20.00	$22.33	$16.95
Net investment loss3	(0.01)4	(0.03)	(0.02)
Net realized and unrealized
gain (loss) on investments	2.51	(4.39)	0.36
Total from investment operations	2.50	(4.42)	0.34
Less distributions
From net investment income	(0.01)	—	—
From net realized gain	(0.16)	(0.96)	—
Total distributions	(0.17)	(0.96)	—
Net asset value, end of period	$22.33	$16.95	$17.29
Total return (%)5,6	12.547	(20.03)	2.017
Ratios and supplemental data
Net assets, end of period (in millions)	$1	$1	$1
Ratios (as a percentage of average net assets):
Expenses before reductions	5.098	3.88	4.268
Expenses net of fee waivers, if any	2.088	2.10	2.098
Expenses net of all fee waivers and credits	2.088	2.09	2.098
Net investment loss	(0.07)4,8	(0.14)	(0.21)8
Portfolio turnover (%)	30	68	34

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

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

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 $0.02 per share and 0.10% of average net assets.

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.

See notes to financial statements

Semiannual 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 I SHARES
Period ended	2-28-071	2-29-08	8-31-082
Per share operating performance
Net asset value, beginning of period	$20.00	$22.39	$17.02
Net investment income3	0.154	0.18	0.08
Net realized and unrealized
gain (loss) on investments	2.53	(4.41)	0.36
Total from investment operations	2.68	(4.23)	0.44
Less distributions
From net investment income	(0.13)	(0.18)	—
From net realized gain	(0.16)	(0.96)	—
Total distributions	(0.29)	(1.14)	—
Net asset value, end of period	$22.39	$17.02	$17.46
Total return (%)5,6	13.427	(19.16)	2.597
Ratios and supplemental data
Net assets, end of period (in millions)	— 8	— 8	— 8
Ratios (as a percentage of average net assets):
Expenses before reductions	12.639	8.80	17.059
Expenses net of fee waivers, if any	0.999	0.99	0.999
Expenses net of all fee waivers and credits	0.999	0.99	0.999
Net investment income	0.964,9	0.86	0.899
Portfolio turnover (%)	30	68	34

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

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

³ Based on the average of the shares outstanding.

⁴ 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.

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 $500,0000.

⁹ Annualized.

See notes to financial statements

30  Value Opportunities Fund | Semiannual report 

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	8-31-082
Per share operating performance
Net asset value, beginning of period	$20.00	$22.32	$16.96
Net investment income3	0.024	0.10	0.03
Net realized and unrealized
gain (loss) on investments	2.53	(4.41)	0.36
Total from investment operations	2.55	(4.31)	0.39
Less distributions
From net investment income	(0.07)	(0.09)	—
From net realized gain	(0.16)	(0.96)	—
Total distributions	(0.23)	(1.05)	—
Net asset value, end of period	$22.32	$16.96	$17.35
Total return (%)5,6	12.807	(19.57)	2.307
Ratios and supplemental data
Net assets, end of period (in millions)	— 8	— 8	— 8
Ratios (as a percentage of average net assets):
Expenses before reductions	21.699	15.22	15.539
Expenses net of fee waivers, if any	1.739	1.49	1.499
Expenses net of all fee waivers and credits	1.739	1.49	1.499
Net investment income	0.124,9	0.48	0.399
Portfolio turnover (%)	30	68	34

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

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

³ Based on the average of the shares outstanding.

⁴ 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.

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 $500,0000.

⁹ Annualized.

See notes to financial statements

Semiannual 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 1 SHARES
Period ended	2-28-071	2-29-08	8-31-082
Per share operating performance
Net asset value, beginning of period	$20.00	$22.39	$17.02
Net investment income3	0.144	0.23	0.08
Net realized and unrealized
gain (loss) on investments	2.54	(4.45)	0.36
Total from investment operations	2.68	(4.22)	0.44
Less distributions
From net investment income	(0.13)	(0.19)	—
From net realized gain	(0.16)	(0.96)	—
Total distribtions	(0.29)	(1.15)	—
Net asset value, end of period	$22.39	$17.02	$17.46
Total return (%)5,6	13.447	(19.12)	2.597
Ratios and supplemental data
Net assets, end of period (in millions)	— 8	$1	$1
Ratios (as a percentage of average net assets):
Expenses before reductions	1.679	1.62	1.439
Expenses net of fee waivers, if any	0.949	0.94	0.949
Expenses net of all fee waivers and credits	0.949	0.94	0.949
Net investment income	0.894,9	1.14	0.949
Portfolio turnover (%)	30	68	34

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

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

³ Based on the average of the shares outstanding.

⁴ 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.

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 $500,0000.

⁹ Annualized.

See notes to financial statements

32  Value Opportunities Fund | Semiannual report 

Notes to financial statements (unaudited)

Note 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 and the Internal Reve nue 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.

Note 2
Significant accounting policies

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:

Security valuation

The net asset value of Class A, Class B and Class C, Class I, Class R1 and Class 1 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 John Hancock Advisers, LLC (the Adviser), a wholly owned subsidiary of John Hancock Financial Services, Inc., a subsidiary of Manulife Financial Corporation (MFC), are valued at their net asset value each business

Semiannual report | Value Opportunities Fund  33 

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 the 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 a Fund investing significant amounts of assets in securities in foreign markets will be fair valued more frequently than a Fund 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 investments 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 that tracks foreign markets in which the Fund has significant investments. If a significant market event occurs due to a change in the value of the index, the pricing for investments in foreign markets that have closed prior to the NYSE will promptly be reviewed and potential adjustments to the net asset value will be recommended to the Fund’s Pricing Committee where applicable.

Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity.

The Fund adopted Statement of Financial Accounting Standards No. 157 (FAS 157), Fair Value Measurements, effective with the beginning of the Fund’s fiscal year. FAS 157 established a three-tier hierarchy to prioritize the assumptions, referred to as inputs, used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below:

Level 1 – Quoted prices in active markets for identical securities.

Level 2 – Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants would use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.

34  Value Opportunities Fund | Semiannual report 

Level 3 – Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable, such as when there is little or no market activity for an investment, unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors that market participants would use in pricing an investment and would be based on the best information available.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used to value the Fund’s net assets as of August 31, 2008:

	INVESTMENTS IN	OTHER FINANCIAL
VALUATION INPUTS	SECURITIES	INSTRUMENTS*
Level 1 — Quoted Prices	$18,209,574	$5,756
Level 2 — Other Significant Observable Inputs	758,000	—
Level 3 — Significant Unobservable Inputs	—	—
Total	$18,967,574	$5,756

*Other financial instruments are derivative instruments not reflected in the Portfolio of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/ depreciation on the instrument.

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.

Investment transactions

Investment transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment security transactions are reported on trade date. Interest income is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date net of foreign withholding taxes. Realized gains and losses from investment transactions are recorded on an identified cost basis.

Class allocations

Income, common expenses and realized and unrealized gains (losses) are determined at the fund level and allocated daily to each class of shares based on the appropriate net asset value of the respective classes. Distribution and service fees, if any, and transfer agent fees for Class A, Class B, Class C, Class I, Class R1 and Class 1 shares are calculated daily at the class level based on the appropriate net asset value of each class and the specific expense rate(s) applicable to each class.

Guarantees and indemnifications

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

Semiannual report | Value Opportunities Fund  35 

Expenses

The majority of expenses are directly identifiable to an individual fund. Trust expenses that are not readily identifiable to a specific fund are allocated in such a manner as deemed equitable, taking into consideration, among other things, the nature and type of expense and the relative size of the funds.

Line of credit

The Fund has entered into an agreement which enables them to participate in a $150 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. For the period ended August 31, 2008, there were no borrowings under the line of credit.

Pursuant to the custodian agreement, the Custodian may, in its discretion, advance funds to the Fund to make properly authorized payments. When such payments result in an overdraft, the Fund is obligated to repay the Custodian for any overdraft, including any costs or expenses associated with the overdraft. The Custodian has a lien and security interest in any Fund property to the extent of any overdraft.

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 cash collateral against the loaned securities and maintains the cash 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 cash collateral is delivered to the Fund on the next business day. 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 secur ities loaned or in gaining access to the collateral. The Fund may receive compensation for lending their 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., Inc. 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) 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).

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 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

36  Value Opportunities Fund | Semiannual report 

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.

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 Financial Accounting Standards Board (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 two years remain subject to examination by the Internal Revenue Service.

New accounting pronouncement

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 and interim reporting periods 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. Ma nagement is currently evaluating the adoption of FAS 161 on the Fund’s financial statement disclosures.

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 $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.

Such distributions, 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.

Note 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

Semiannual report | Value Opportunities Fund  37 

Fund’s aggregate daily net assets; (c) 0.77% of the Fund’s 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. 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 period ended August 31, 2008, were equivalent to an annual effective rate of 0.80% of the Fund’s average daily net assets.

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 $41,654, $8,012, $10,090, $7,745, $8,152 and $1,769 for Class A, Class B, Class C, Class I, Class R1 and Class 1, respectively, for the period ended August 31, 2008. The exp ense reimbursements and limits will continue in effect until June 30, 2009 and thereafter until terminated by the Adviser on notice to the Trust.

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 period ended August 31, 2008, were $1,032 with an annual effective rate of 0.01% of the Fund’s average daily net assets.

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 the average daily net asset value of Class A, Class B, Class C, Class R1 and Class 1 shares, 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 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 shares’ average daily net asset value for certain other services. There were no Service Plan fees incurred for the period ended August 31, 2008.

38  Value Opportunities Fund | Semiannual report 

Class A shares are assessed up-front sales charges. During the period ended August 31, 2008, the Distributor received net up-front sales charges of $2,187 with regard to sales of Class A shares. Of this amount, $348 was retained and used for printing prospectuses, advertising, sales literature and other purposes, $1,810 was paid as sales commissions to unrelated broker-dealers; and $29 was paid as sales commissions to sales personnel of Signator Investor, Inc. (Signator Investors), a related broker-dealer and 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 period ended August 31, 2008, CDSCs received by the Distributor amounted to $1,256 for Class B shares and $328 for Class C shares.

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 $16.50 for each Class A, Class B, Class C and 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 shares’ 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 period ended August 31, 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 period ended August 31, 2008, the transfer agent fees reductions for Class R1 were $44.

The Fund receives 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 period ended August 31, 2008, the Fund’s transfer agent fees and out-of-pocket expenses were reduced by $30 for transfer agent credits earned.

Class level expenses including the allocation of the Transfer Agent fees for the period ended August 31, 2008, were as follows:

	Distribution and	Transfer		Printing and
Share class	service fees	agent fees	Blue sky fees	postage fees
Class A	$24,259	$6,486	$7,368	$4,126
Class B	1,353	274	7,241	104
Class C	4,641	937	7,378	409
Class I	—	25	7,411	121
Class R1	293	73	7,796	96
Class 1	181	—	—	40
Total	$30,727	$7,795	$37,194	$4,896

Semiannual report | Value Opportunities Fund  39 

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 August 31, 2008.

Note 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.

Note 5
Fund share transactions

This listing illustrates the number of Fund shares sold, reinvested and repurchased during the year ended February 29, 2008, and the period ended August 31, 2008, along with the corresponding dollar value.

		Year ended 2-29-08	Period ended 8-31-081
	Shares	Amount	Shares	Amount
Class A shares
Sold	83,981	$1,839,886	21,563	$375,429
Distributions reinvested	53,292	958,716	—	—
Repurchased	(80,983)	(1,597,867)	(47,813)	(821,590)
Net increase (decrease)	56,290	$1,200,735	(26,250)	($446,161)
Class B shares
Sold	7,022	$153,171	1,530	$26,247
Distributions reinvested	795	14,285	—	—
Repurchased	(4,077)	(80,691)	(4,443)	(77,051)
Net increase (decrease)	3,740	$86,765	(2,913)	($50,804)
Class C shares
Sold	21,502	$466,603	8,744	$150,815
Distributions reinvested	3,408	61,199	—	—
Repurchased	(27,872)	(538,229)	(22,268)	(371,193)
Net decrease	(2,962)	($10,427)	(13,524)	($220,378)
Class I shares
Sold	5,764	$129,736	175	$3,000
Distributions reinvested	288	5,191	—	—
Repurchased	(12,096)	(243,103)	(1,005)	(17,600)
Net decrease	(6,044)	($108,176)	(830)	($14,600)
Class R1 shares
Sold	1,049	$24,953	551	$9,692
Distributions reinvested	357	6,401	—	—
Repurchased	—	—	(192)	(3,314)
Net increase	1,406	$31,354	359	$6,378
Class 1 shares
Sold	37,501	$765,929	37,999	$649,126
Distributions reinvested	1,640	29,511	—	—
Repurchased	(13,639)	(256,872)	(10,840)	(183,793)
Net increase	25,502	$538,568	27,159	$465,333
Net increase (decrease)	77,932	$1,738,819	(16,001)	($260,232)

¹Semiannual period from 3-1-08 to 8-31-08. Unaudited.

40  Value Opportunities Fund | Semiannual report 

Note 6
Purchase and sale 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 period ended August 31, 2008, aggregated $5,907,926 and $6,446,857, respectively.

Semiannual report | Value Opportunities Fund  41 

Board Consideration of and
Continuation of Investment Advisory
Agreement and Subadvisory
Agreement: John Hancock
Value Opportunities Fund

The Investment Company Act of 1940 (the 1940 Act) requires the Board of Trustees (the Board) of John Hancock Funds III (the Trust), including a majority of the Trustees who have no direct or indirect interest in the investment advisory agreement and are not “interested persons” of the Trust, as defined in the 1940 Act (the Independent Trustees), annually to meet in person to review and consider the continuation of: (i) the investment advisory agreement (the Advisory Agreement) with John Hancock Investment Management Services, LLC (the Adviser) and (ii) the investment subadvisory agreement (the Subadvisory Agreement) with Grantham, Mayo, Van Otterloo & Co. LLC (the Subadviser) for the John Hancock Value Opportunities Fund (the Fund). The Advisory Agreement and the Subadvisory Agreement are collectively referred to as the Advisory Agreements.

At meetings held on May 5–6 and June 9–10, 2008, the Board considered the factors and reached the conclusions described below relating to the selection of the Adviser and Subadviser and the continuation of the Advisory Agreements. During such meetings, the Board’s Contracts/Operations Committee and the Independent Trustees also met in executive sessions with their independent legal counsel.

In evaluating the Advisory Agreements, the Board, including the Contracts/Operations Committee and its Independent Trustees, reviewed a broad range of information requested for this purpose. This information included:

(i) the investment performance of the Fund relative to a category of relevant funds (the “Category”) and a peer group of comparable funds (the “Peer Group”). The funds within each Category and Peer Group were selected by Morningstar Inc. (“Morningstar”), an independent provider of investment company data. Data covered the period since the Fund’s inception through December 31, 2007,

(ii) advisory and other fees incurred by, and the expense ratios of, the Fund relative to a Category and a Peer Group,

(iii) the advisory fees of comparable portfolios of other clients of the Adviser and the Subadviser,

(iv) the Adviser’s financial results and condition, including its and certain of its affiliates’ profitability from services performed for the Fund,

(v) breakpoints in the Fund’s and the Peer Group’s fees, and information about economies of scale,

(vi) the Adviser’s and Subadviser’s record of compliance with applicable laws and regulations, with the Fund’s investment policies and restrictions, and with the applicable Code of Ethics, and the structure and responsibilities of the Adviser’s and Subadviser’s compliance department,

(vii) the background and experience of senior management and investment professionals, and

(viii) the nature, cost and character of advisory and non-investment management services provided by the Adviser and its affiliates and by the Subadviser.

The Independent Trustees considered the legal advice of independent legal counsel and relied on their own business judgment in determining the factors to be considered in evaluating the materials that were presented to them and the weight to be given to each such factor. The Board’s review and conclusions were based on a comprehensive consideration of all information presented to the Board and not the result of any single controlling factor. The Board principally considered data on performance and other information provided by Morningstar as of December 31, 2007. The Board also considered updated performance information provided to it by the Adviser or Subadviser at its May and June 2008 meetings. Performance and other information may be quite different as of the date of this shareholders report. The key factors considered by the Board and the conclusions reached are described below.

42  Value Opportunities Fund | Semiannual report 

Nature, extent and quality of services

The Board considered the ability of the Adviser and the Subadviser, based on their resources, reputation and other attributes, to attract and retain qualified investment professionals, including research, advisory, and supervisory personnel. The Board considered the investment philosophy, research and investment decision-making processes of the Adviser and Subadviser. The Board considered the Adviser’s execution of its oversight responsibilities. The Board further considered the culture of compliance, resources dedicated to compliance, compliance programs and compliance records of the Adviser and Subadviser. In addition, the Board took into account the administrative and other non-advisory services provided to the Fund by the Adviser and its affiliates.

Based on the above factors, together with those referenced below, the Board concluded that, within the context of its full deliberations, the nature, extent and quality of the investment advisory services provided to the Fund by the Adviser and Subadviser supported renewal of the Advisory Agreements.

Fund performance

The Board noted that the Fund had less than two full years of operational history, and considered the performance results for the Fund since its inception through December 31, 2007. The Board also considered these results in comparison to the performance of the Category, as well as the Fund’s Peer Group and benchmark index. The Board reviewed with representatives of Morningstar the methodology used by Morningstar to select the funds in the Category and the Peer Group.

The Board noted that the Fund’s performance was lower than the performance of the Category and Peer Group medians, and its benchmark index, the Russell 2500 Value Index, over the 1-year period. The Adviser discussed its plans with respect to the Fund. The Board recognized the short operational history of the Fund and indicated its intent to continue to monitor the Fund’s performance trends.

Investment advisory fee and subadvisory fee
rates and expenses

The Board reviewed and considered the contractual investment advisory fee rate payable by the Fund to the Adviser for investment advisory services (the Advisory Agreement Rate). The Board received and considered information comparing the Advisory Agreement Rate with the advisory fees for the Peer Group and Category. The Board noted that the Advisory Agreement Rate was not appreciably higher than the median rate of the Peer Group and equal to the median rate of the Category.

The Board received and considered expense information regarding the Fund’s various components, including advisory fees, distribution and fees other than advisory and distribution fees, including transfer agent fees, custodian fees, and other miscellaneous fees (e.g., fees for accounting and legal services). The Board considered comparisons of these expenses to the Peer Group median. The Board also received and considered expense information regarding the Fund’s total operating expense ratio (Gross Expense Ratio) and total operating expense ratio after taking the fee waiver arrangement applicable to the Advisory Agreement Rate into account (Net Expense Ratio). The Board received and considered information comparing the Gross Expense Ratio and Net Expense Ratio of the Fund to that of the Peer Group and Category medians. The Board noted that the Fund’s Gross Expense Ratio was higher than the median of the Peer Group and Category. The Board also noted that the Fund’s Net Expense Ratio was higher than the median of the Category but not appreciably higher than the Peer Group.

The Adviser also discussed the Morningstar data and rankings, and other relevant information, for the Fund. Based on the above-referenced considerations and other factors, the Board concluded that the Fund’s expenses and overall plans to improve performance supported the re-approval of the Advisory Agreements.

The Board also received information about the investment subadvisory fee rate (the Subadvisory Agreement Rate) payable by the Adviser to the Subadviser for investment subadvisory services. The Board concluded that the Subadvisory

Semiannual report | Value Opportunities Fund  43 

Agreement Rate was fair and equitable, based on its consideration of the factors described here.

Profitability

The Board received and considered a detailed profitability analysis of the Adviser based on the Advisory Agreements, as well as on other relationships between the Fund and the Adviser and its affiliates. The Board also considered a comparison of the Adviser’s profitability to that of other similar investment advisers whose profitability information is publicly available. The Board concluded that, in light of the costs of providing investment management and other services to the Fund, the profits and other ancillary benefits reported by the Adviser were not unreasonable.

The Board did not consider profitability information with respect to the Subadviser, which is not affiliated with the Adviser. The Board considered that the Subadvisory Agreement Rate paid to the Subadviser had been negotiated by the Adviser on an arm’s length basis and that the Subadviser’s separate profitability from its relationship with the Fund was not a material factor in determining whether to renew the agreement.

Economies of scale

The Board received and considered general information regarding economies of scale with respect to the management of the Fund, including the Fund’s ability to appropriately benefit from economies of scale under the Fund’s fee structure. The Board recognized the inherent limitations of any analysis of economies of scale, stemming largely from the Board’s understanding that most of the Adviser’s costs are not specific to individual Funds, but rather are incurred across a variety of products and services.

To the extent the Board and the Adviser were able to identify actual or potential economies of scale from Fund-specific or allocated expenses, in order to ensure that any such economies continue to be reasonably shared with the Fund as its assets increase, the Adviser and the Board agreed to continue the existing breakpoints to the Advisory Agreement Rate.

Information about services to other clients

The Board also received information about the nature, extent and quality of services and fee rates offered by the Adviser and Subadviser to their other clients, including other registered investment companies, institutional investors and separate accounts. The Board concluded that the Advisory Agreement Rate and the Subadvisory Agreement Rate were not unreasonable, taking into account fee rates offered to others by the Adviser and Subadviser, respectively, after giving effect to differences in services.

Other benefits to the Adviser

The Board received information regarding potential “fall-out” or ancillary benefits received by the Adviser and its affiliates and the Subadviser as a result of their relationship with the Fund. Such benefits could include, among others, benefits directly attributable to the relationship of the Adviser and Subadviser with the Fund and benefits potentially derived from an increase in business as a result of their relationship with the Fund (such as the ability to market to shareholders other financial products offered by the Adviser and its affiliates).

The Board also considered the effectiveness of the Adviser’s, Subadviser’s and Fund’s policies and procedures for complying with the requirements of the federal securities laws, including those relating to best execution of portfolio transactions and brokerage allocation.

Other factors and broader review

As discussed above, the Board reviewed detailed materials received from the Adviser and Subadviser as part of the annual re-approval process. The Board also regularly reviews and assesses the quality of the services that the Fund receives throughout the year. In this regard, the Board reviews reports of the Adviser at least quarterly, which include, among other things, fund performance reports and compliance reports. In addition, the Board meets with portfolio managers and senior investment officers at various times throughout the year.

After considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Board concluded that approval of the continuation of the Advisory Agreements for the Fund was in the best interest of the Fund and its shareholders. Accordingly, the Board unanimously approved the continuation of the Advisory Agreements.

44  Value Opportunities Fund | Semiannual report 

More information

Trustees	Investment adviser
James F. Carlin, Chairman	John Hancock Investment Management
James R. Boyle†	Services, LLC
William H. Cunningham
Deborah C. Jackson	Subadviser
Charles L. Ladner*	Grantham, Mayo, Van Otterloo & Co. LLC
Stanley Martin*
Dr. John A. Moore*	Principal distributor
Patti McGill Peterson*	John Hancock Funds, LLC
Steven R. Pruchansky
Gregory A. Russo*	Custodian
*Members of the Audit Committee	State Street Bank & Trust Company
†Non-Independent Trustee
	Transfer agent
Officers	John Hancock Signature Services, Inc.
Keith F. Hartstein
President and Chief Executive Officer	Legal counsel
	K&L Gates LLP
Thomas M. Kinzler
Secretary and Chief Legal Officer
Francis V. Knox, Jr.
Chief Compliance Officer
Charles A. Rizzo
Chief Financial Officer
Gordon M. Shone
Treasurer
John G. Vrysen
Chief Operating Officer

Additional information about your fund is available without charge in several ways. As required by the SEC, you can access proxy voting information and quarterly portfolio information on your fund. The proxy voting information includes a description of proxy voting policies, procedures and information regarding how the fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30. The quarterly portfolio information that includes a complete list of the fund’s holdings for the first and third quarters of the fund’s fiscal period is filed on Form N-Q. You have access to this information:

By phone	On the fund’s Website	At the SEC
1-800-225-5291	www.jhfunds.com	www.sec.gov
		1-800-SEC-0330
		SEC Public Reference Room

You can also contact us:
Regular mail	Express mail
John Hancock Signature Services, Inc.	John Hancock Signature Services, Inc.
P.O. Box 9510	Mutual Fund Image Operations
Portsmouth, NH 03802-9510	164 Corporate Drive
	Portsmouth, NH 03801

Month-end portfolio holdings are available at www.jhfunds.com.

Semiannual report | Value Opportunities Fund  45 

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.	630SA 8/08
It is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus.	10/08

A look at performance

For the periods ended August 31, 2008

		Average annual returns (%)				Cumulative total returns (%)
		with maximum sales charge (POP)				with maximum sales charge (POP)
	Inception				Since	Six				Since
Class	date	1-year	5-year	10-year	inception	months	1-year	5-year	10-year	inception
A	6-12-06	–16.53	—	—	–1.65	–6.85	–16.53	—	—	–3.64
B	6-12-06	–16.94	—	—	–1.36	–7.16	–16.94	—	—	–3.00
C	6-12-06	–13.59	—	—	–0.07	–3.30	–13.59	—	—	–0.16
I1	6-12-06	–11.77	—	—	1.02	–1.75	–11.77	—	—	2.29
R11	6-12-06	–12.10	—	—	0.45	–1.96	–12.10	—	—	1.01

Performance figures assume all distributions are reinvested. Public offering price (POP) figures reflect maximum sales charges 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 June 30, 2009. The net expenses are as follows: Class A — 1.34%, Class B — 2.05%, Class C — 2.05%, Class I — 0.95%, Class R1 — 1.45%. Had the fee waivers and expense limitations not been in place, the gross expenses would be as follows: Class A — 1.86%, Class B — 6.98%, Class C — 2.94%, Class I — 12.79%, Class R1 — 15.98%.

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 current to the most recent month end performance data, 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.

6  U.S. Core Fund | Semiannual report 

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	$9,984	$9,700	$10,699
C2	6-12-06	9,984	9,984	10,699
I3	6-12-06	10,229	10,229	10,699
R13	6-12-06	10,101	10,101	10,699

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 August 31, 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 Index is 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.

Semiannual report | U.S. Core Fund  7 

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 March 1, 2008 with the same investment held until August 31, 2008.

	Account value	Ending value	Expenses paid during
	on 3-1-08	on 8-31-08	period ended 8-31-081
Class A	$1,000.00	$980.40	$6.74
Class B	1,000.00	977.30	10.22
Class C	1,000.00	976.80	10.21
Class I	1,000.00	982.50	4.75
Class R1	1,000.00	980.40	7.24

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 August 31, 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:

8  U.S. Core Fund | Semiannual report 

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 March 1, 2008, with the same investment held until August 31, 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 3-1-08	on 8-31-08	period ended 8-31-081
Class A	$1,000.00	$1,018.40	$6.87
Class B	1,000.00	1,014.90	10.41
Class C	1,000.00	1,014.90	10.41
Class I	1,000.00	1,020.40	4.84
Class R1	1,000.00	1,017.90	7.38

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%, 2.05%, 0.95% and 1.45% for Class A, Class B, Class C, Class I and Class R1 respectively, multiplied by the average account value over the period, multiplied by number of days in most recent fiscal half-year/365 (to reflect the one-half year period).

Semiannual report | U.S. Core Fund  9 

Portfolio summary

Top 10 holdings1
Exxon Mobil Corp.	5.9%	Pfizer, Inc.	3.9%
Johnson & Johnson	4.7%	UnitedHealth Group, Inc.	3.2%
Microsoft Corp.	4.6%	The Coca-Cola Company	3.2%
Chevron Corp.	4.2%	PepsiCo, Inc.	3.0%
Wal-Mart Stores, Inc.	3.9%	Procter & Gamble Company	2.6%
Sector distribution1,2
Consumer Non-cyclical	36%	Financial	6%
Energy	19%	Industrial	6%
Consumer Cyclical	11%	Basic Materials	3%
Technology	11%	Short-term Investments & Other	1%
Communications	7%

¹ As a percentage of net assets on August 31, 2008.

² Sector investing is subject to greater risks than the market as a whole. Because the Fund may focus on particular sectors of the economy, its performance may depend on the performance of those sectors.

10  U.S. Core Fund | Semiannual report 

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 8-31-08 (unaudited)

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 99.06%		$18,265,286
(Cost $19,249,609)
Aerospace 1.63%		301,179
General Dynamics Corp.	1,700	156,910
Goodrich Corp.	200	10,250
Raytheon Company	200	11,998
Rockwell Collins, Inc.	200	10,518
United Technologies Corp.	1,700	111,503
Agriculture 1.28%		236,202
Archer-Daniels-Midland Company	1,200	30,552
Monsanto Company	1,800	205,650
Apparel & Textiles 0.21%		38,636
Coach, Inc. *	900	26,091
Liz Claiborne, Inc.	400	6,484
NIKE, Inc., Class B	100	6,061
Auto Parts 0.23%		41,900
AutoZone, Inc. *	200	27,446
BorgWarner, Inc.	200	8,270
Johnson Controls, Inc.	200	6,184
Auto Services 0.12%		22,283
AutoNation, Inc. *	800	9,080
Copart, Inc. *	300	13,203
Automobiles 0.13%		24,224
General Motors Corp. (a)	700	7,000
PACCAR, Inc.	400	17,224
Banking 1.57%		289,806
Bank of America Corp.	6,100	189,954
BB&T Corp.	900	27,000
Comerica, Inc.	200	5,618
Hudson City Bancorp, Inc.	1,400	25,816
U.S. Bancorp	1,300	41,418

See notes to financial statements

Semiannual report | U.S. Core Fund  11 

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

Issuer	Shares	Value
Biotechnology 1.07%		$196,873
Amgen, Inc. *	1,500	94,275
Biogen Idec, Inc. *	900	45,837
Genentech, Inc. *	200	19,750
Genzyme Corp. *	200	15,660
Illumina, Inc. *	100	8,613
Invitrogen Corp. *	300	12,738
Broadcasting 0.03%		6,069
Discovery Holding Company *	300	6,069
Building Materials & Construction 0.02%		3,812
Masco Corp.	200	3,812
Business Services 0.73%		135,460
Affiliated Computer Services, Inc., Class A *	500	26,620
Fiserv, Inc. *	900	46,674
Fluor Corp.	400	32,052
Jacobs Engineering Group, Inc. *	300	22,146
Total Systems Services, Inc.	400	7,968
Chemicals 0.44%		81,996
Air Products & Chemicals, Inc.	200	18,370
FMC Corp.	100	7,354
Praxair, Inc.	500	44,920
Sigma-Aldrich Corp.	200	11,352
Computers & Business Equipment 4.29%		790,901
Apple, Inc. *	1,400	237,342
Cisco Systems, Inc. *	12,000	288,600
Dell, Inc. *	2,900	63,017
EMC Corp. *	1,000	15,280
Hewlett-Packard Company	700	32,844
International Business Machines Corp.	1,000	121,730
Juniper Networks, Inc. *	400	10,280
Western Digital Corp. *	800	21,808
Construction & Mining Equipment 0.04%		7,104
Joy Global, Inc.	100	7,104
Containers & Glass 0.05%		8,920
Owens-Illinois, Inc. *	200	8,920
Cosmetics & Toiletries 3.87%		712,636
Avon Products, Inc.	400	17,132
Colgate-Palmolive Company	1,900	144,457
Estee Lauder Companies, Inc., Class A	300	14,931
Kimberly-Clark Corp.	1,000	61,680
Procter & Gamble Company	6,800	474,436

See notes to financial statements

12  U.S. Core Fund | Semiannual report 

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 4.89%		$902,429
Apache Corp.	1,320	150,982
Chesapeake Energy Corp.	1,100	53,240
Devon Energy Corp.	1,400	142,870
EOG Resources, Inc.	520	54,298
Hess Corp.	730	76,438
Noble Energy, Inc.	200	14,346
Occidental Petroleum Corp.	4,200	333,312
Patterson-UTI Energy, Inc.	400	11,368
Quicksilver Resources, Inc. *	400	9,676
Southwestern Energy Company *	700	26,859
Sunoco, Inc.	200	8,876
XTO Energy, Inc.	400	20,164
Domestic Oil 0.10%		19,240
Denbury Resources, Inc. *	400	9,956
Range Resources Corp.	200	9,284
Drugs & Health Care 0.59%		108,200
Wyeth	2,500	108,200
Educational Services 0.22%		40,731
Apollo Group, Inc., Class A *	500	31,840
ITT Educational Services, Inc. *	100	8,891
Electrical Equipment 0.21%		38,790
Emerson Electric Company	600	28,080
FLIR Systems, Inc. *	300	10,710
Electrical Utilities 0.12%		22,124
Exelon Corp.	100	7,596
FirstEnergy Corp.	200	14,528
Electronics 0.34%		62,364
L-3 Communications Holdings, Inc.	600	62,364
Financial Services 1.94%		357,477
BlackRock, Inc.	150	32,588
Charles Schwab Corp.	500	11,995
Citigroup, Inc.	10,000	189,900
Federal Home Loan Mortgage Corp.	900	4,059
Leucadia National Corp.	600	27,774
MasterCard, Inc., Class A	180	43,659
State Street Corp.	200	13,534
T. Rowe Price Group, Inc.	200	11,872
Western Union Company	800	22,096
Food & Beverages 6.66%		1,227,189
Coca-Cola Enterprises, Inc.	500	8,535
General Mills, Inc.	200	13,236
H.J. Heinz Company	200	10,064
Kellogg Company	200	10,888

See notes to financial statements

Semiannual report | U.S. 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
Food & Beverages (continued)
Kraft Foods, Inc., Class A	722	$22,750
PepsiCo, Inc.	8,100	554,688
The Coca-Cola Company	11,200	583,184
William Wrigley, Jr. Company	300	23,844
Gas & Pipeline Utilities 0.40%		73,649
Transocean, Inc. *	579	73,649
Gold 0.28%		52,095
Barrick Gold Corp.	1,500	52,095
Healthcare Products 7.34%		1,352,736
Becton, Dickinson & Company	100	8,738
C.R. Bard, Inc.	100	9,345
Intuitive Surgical, Inc. *	100	29,527
Johnson & Johnson	12,300	866,289
Medtronic, Inc.	2,100	114,660
Patterson Companies, Inc. *	200	6,508
Stryker Corp.	1,200	80,628
Varian Medical Systems, Inc. *	200	12,632
Zimmer Holdings, Inc. *	3,100	224,409
Healthcare Services 6.51%		1,200,577
Cardinal Health, Inc.	1,100	60,478
Covance, Inc. *	100	9,434
Coventry Health Care, Inc. *	1,600	56,032
Express Scripts, Inc. *	2,000	146,820
McKesson Corp.	2,200	127,116
Medco Health Solutions, Inc. *	800	37,480
Quest Diagnostics, Inc.	100	5,405
UnitedHealth Group, Inc.	19,166	583,605
WellPoint, Inc. *	3,300	174,207
Holdings Companies/Conglomerates 0.13%		24,660
Textron, Inc.	600	24,660
Hotels & Restaurants 0.24%		43,435
McDonald’s Corp.	700	43,435
Household Products 0.09%		16,988
Energizer Holdings, Inc. *	200	16,988
Industrial Machinery 0.93%		172,389
Cameron International Corp. *	300	13,977
Deere & Company	1,300	91,741
Flowserve Corp.	100	13,212
FMC Technologies, Inc. *	400	21,424
Parker-Hannifin Corp.	500	32,035
Insurance 3.53%		650,300
ACE, Ltd. *	100	5,261
Aetna, Inc.	100	4,314

See notes to financial statements

14  U.S. Core Fund | Semiannual report 

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

Issuer	Shares	Value
Insurance (continued)
AFLAC, Inc.	1,300	$73,710
Allstate Corp.	2,900	130,877
American International Group, Inc.	4,400	94,556
Aon Corp.	300	14,247
Assurant, Inc.	200	11,686
Chubb Corp.	2,300	110,423
First American Corp.	200	5,054
Hartford Financial Services Group, Inc.	400	25,232
Progressive Corp.	1,200	22,164
SAFECO Corp.	100	6,760
The Travelers Companies, Inc.	2,300	101,568
Torchmark Corp.	300	17,922
Transatlantic Holdings, Inc.	200	12,020
Unum Group	200	5,082
W.R. Berkley Corp.	400	9,424
International Oil 12.95%		2,388,343
Anadarko Petroleum Corp.	1,100	67,903
Chevron Corp.	8,900	768,248
ConocoPhillips	4,300	354,793
Exxon Mobil Corp.	13,600	1,088,136
Murphy Oil Corp.	500	39,265
Nabors Industries, Ltd. *	600	21,360
Noble Corp.	200	10,058
Weatherford International, Ltd. *	1,000	38,580
Internet Content 1.16%		213,113
Google, Inc., Class A *	460	213,113
Internet Retail 0.98%		180,013
Amazon.com, Inc. *	500	40,405
eBay, Inc. *	5,600	139,608
Internet Software 0.03%		6,394
VeriSign, Inc. *	200	6,394
Life Sciences 0.07%		13,650
Waters Corp. *	200	13,650
Manufacturing 1.52%		280,616
3M Company	1,500	107,400
Danaher Corp.	1,100	89,727
Harley-Davidson, Inc.	900	35,802
Honeywell International, Inc.	200	10,034
SPX Corp.	100	11,925
Tyco International, Ltd.	600	25,728
Office Furnishings & Supplies 0.03%		5,632
Office Depot, Inc. *	800	5,632

See notes to financial statements

Semiannual 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
Petroleum Services 1.19%		$218,761
Baker Hughes, Inc.	200	16,002
BJ Services Company	400	10,740
Diamond Offshore Drilling, Inc.	200	21,982
Halliburton Company	700	30,758
Schlumberger, Ltd.	740	69,723
Smith International, Inc.	200	13,940
Valero Energy Corp.	1,600	55,616
Pharmaceuticals 8.43%		1,554,607
Abbott Laboratories	2,100	120,603
AmerisourceBergen Corp.	900	36,909
Eli Lilly & Company	3,600	167,940
Forest Laboratories, Inc. *	2,000	71,380
Gilead Sciences, Inc. *	2,700	142,236
Merck & Company, Inc.	7,300	260,391
PDL BioPharma, Inc. *	2,400	28,968
Pfizer, Inc.	38,000	726,180
Publishing 0.12%		21,348
Gannett Company, Inc.	1,200	21,348
Railroads & Equipment 0.53%		98,218
Burlington Northern Santa Fe Corp.	260	27,924
CSX Corp.	600	38,808
Norfolk Southern Corp.	200	14,706
Union Pacific Corp.	200	16,780
Retail Grocery 0.04%		6,957
SUPERVALU, Inc.	300	6,957
Retail Trade 9.48%		1,747,801
Abercrombie & Fitch Company, Class A	400	20,980
American Eagle Outfitters, Inc.	250	3,762
Bed Bath & Beyond, Inc. *	800	24,528
Best Buy Company, Inc.	500	22,385
Costco Wholesale Corp.	800	53,648
CVS Caremark Corp.	300	10,980
Family Dollar Stores, Inc.	200	4,984
GameStop Corp., Class A *	200	8,774
Home Depot, Inc.	12,900	349,848
Kohl’s Corp. *	900	44,253
Lowe’s Companies, Inc.	5,600	137,984
Staples, Inc.	1,900	45,980
Target Corp.	1,500	79,530
The Gap, Inc.	700	13,615
The TJX Companies, Inc.	700	25,368
Urban Outfitters, Inc. *	300	10,686
Walgreen Company	4,500	163,935
Wal-Mart Stores, Inc.	12,300	726,561

See notes to financial statements

16  U.S. Core Fund | Semiannual report 

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

Issuer	Shares	Value
Semiconductors 0.44%		$80,701
Intel Corp.	3,100	70,897
Texas Instruments, Inc.	400	9,804
Software 6.38%		1,176,917
Citrix Systems, Inc. *	500	15,135
Microsoft Corp.	31,000	845,990
Oracle Corp. *	14,400	315,792
Steel 0.20%		36,750
Nucor Corp.	700	36,750
Telecommunications Equipment & Services 2.03%		373,815
QUALCOMM, Inc.	7,100	373,815
Telephone 0.91%		167,914
AT&T, Inc.	2,175	69,578
Verizon Communications, Inc.	2,800	98,336
Tobacco 1.86%		342,589
Altria Group, Inc.	7,100	149,313
Philip Morris International, Inc.	3,200	171,840
UST, Inc.	400	21,436
Transportation 0.20%		36,477
C.H. Robinson Worldwide, Inc.	700	36,477
Trucking & Freight 0.28%		51,296
United Parcel Service, Inc., Class B	800	51,296
	Principal
Issuer, description, maturity date	amount	Value
Short-term investments 0.04%		$7,383
(Cost $7,383)
John Hancock Cash Investment Trust, 2.5657% (c)(f)	$7,383	7,383
Repurchase agreements 1.36%		$250,000
(Cost $250,000)
Repurchase Agreement with State Street Corp. dated
8-29-08 at 1.70% to be repurchased at $250,047
on 9-2-08, collateralized by $200,000 Federal
National Mortgage Association, 7.125% due
1-15-30 (valued at $256,500, including interest)	$250,000	250,000
Total investments (Cost $19,506,992)† 100.46%		$18,522,669
Liabilities in excess of other assets (0.46%)		($84,369)
Total net assets 100.00%		$18,438,300

See notes to financial statements

Semiannual 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

Notes to financial statements

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) The investment is an affiliate of the Fund, the adviser and/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 July 31, 2008, the aggregate cost of investment securities for federal income tax purposes was $19,576,448. Net unrealized depreciation aggregated $1,053,779, of which $964,770 related to appreciated investment securities and $2,018,549 related to depreciated investment securities.

See notes to financial statements

18  U.S. Core Fund | Semiannual report 

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 8-31-08 (unaudited)

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 $19,249,609)
including $7,238 of securities loaned (Note 2)	$18,265,286
Repurchase agreement, at value (Cost $250,000) (Note 2)	250,000
Investments in affiliated issuers, at value (Cost $7,383) (Note 2)	7,383
Total investments, at value (Cost $19,506,992)	18,522,669
Cash	355
Cash collateral at broker for futures contracts	14,400
Dividends and interest receivable	49,760
Other assets	33,737
Total assets	18,620,921
Liabilities
Payable for fund shares repurchased	89,496
Payable upon return of securities loaned (Note 2)	7,383
Payable to affiliates
Fund administration fees	140
Transfer agent fees	1,454
Distribution and service fees	193
Investment management fees	4,920
Trustees’ fees	1,068
Other payables and accrued expenses	77,967
Total liabilities	182,621
Net assets
Capital paid-in	$20,182,612
Undistributed net investment income	77,144
Accumulated undistributed net realized loss on investments and futures contracts	(837,133)
Net unrealized depreciation on investments and futures contracts	(984,323)
Net assets	$18,438,300

See notes to financial statements

Semiannual 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

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	$16,871,256
Shares outstanding	886,103
Net asset value and redemption price per share	$19.04
Class B1
Net assets	$230,623
Shares outstanding	12,177
Net asset value and offering price per share	$18.94
Class C1
Net assets	$1,091,642
Shares outstanding	57,633
Net asset value and offering price per share	$18.94
Class I
Net assets	$143,777
Shares outstanding	7,531
Net asset value, offering price and redemption price per share	$19.09
Class R1
Net assets	$101,002
Shares outstanding	5,319
Net asset value, offering price and redemption price per share	$18.99
Maximum public offering price per share
Class A (net asset value per share ÷ 95%)2	$20.04

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

20  U.S. Core Fund | Semiannual 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 period ended 8-31-08 (unaudited)¹

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	$199,512
Interest	3,883
Income from affiliated issuers	18
Less foreign taxes withheld	(30)
Total investment income	203,383
Expenses
Investment management fees (Note 3)	77,660
Distribution and service fees (Note 3)	39,072
Transfer agent fees (Note 3)	7,405
Fund administration fees (Note 3)	1,186
Blue sky fees (Note 3)	37,354
Audit and legal fees	20,048
Custodian fees	13,908
Registration and filing fees	6,994
Printing and postage fees (Note 3)	5,167
Trustees’ fees (Note 3)	1,456
Miscellaneous	203
Total expenses	210,453
Less expense reductions (Note 3)	(64,897)
Less transfer agency credits (Note 3)	(16)
Net expenses	145,540
Net investment income	57,843
Realized and unrealized gain (loss)
Net realized loss on
Investments in unaffiliated issuers	(497,402)
Futures contracts	(60,958)
	(558,360)
Change in net unrealized appreciation (depreciation) of
Investments in unaffiliated issuers	104,381
Futures contracts	25,418
	129,799
Net realized and unrealized loss	(428,561)
Decrease in net assets from operations	($370,718)

¹ Semiannual period from 3-1-08 to 8-31-08.

See notes to financial statements

Semiannual 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

Statements 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	Period
	ended	ended
	2-29-08	8-31-081
Increase (decrease) in net assets
From operations
Net investment income	$143,380	$57,843
Net realized gain (loss)	376,725	(558,360)
Change in net unrealized appreciation (depreciation)	(2,519,080)	129,799
Decrease in net assets resulting from operations	(1,998,975)	(370,718)
Distributions to shareholders
From net investment income
Class A	(147,501)	—
Class B	(184)	—
Class C	(2,027)	—
Class I	(5,265)	—
Class R1	(756)	—
From net realized gain
Class A	(797,028)	—
Class B	(14,341)	—
Class C	(157,675)	—
Class I	(18,582)	—
Class R1	(4,722)	—
Total distributions	(1,148,081)	—
From Fund share transactions (Note 5)	1,394,286	(2,550,125)
Total decrease	(1,752,770)	(2,920,843)
Net assets
Beginning of period	23,111,913	21,359,143
End of period	$21,359,143	$18,438,300
Undistributed net investment income	$19,301	$77,144

¹ Semiannual period from 3-1-08 to 8-31-08. Unaudited.

See notes to financial statements

22  U.S. Core Fund | Semiannual report 

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	8-31-08 2
Per share operating performance
Net asset value, beginning of period	$20.00	$22.24	$19.42
Net investment income (loss)3	0.12	0.16	0.06
Net realized and unrealized
gain (loss) on investments	2.41	(1.88)	(0.44)
Total from investment operations	2.53	(1.72)	(0.38)
Less distributions
From net investment income	(0.09)	(0.17)	—
From net realized gain	(0.20)	(0.93)	—
Total distributions	(0.29)	(1.10)	—
Net asset value, end of period	$22.24	$19.42	$19.04
Total return (%)4,5	12.646	(8.16)	(1.96)6
Ratios and supplemental data
Net assets, end of period (in millions)	$19	$18	$17
Ratios (as a percentage of average net assets):
Expenses before reductions	1.937	1.86	1.707
Expenses net of fee waivers	1.347	1.34	1.357
Expenses net of all fee waivers and credits	1.347	1.34	1.357
Net investment income	0.767	0.70	0.667
Portfolio turnover (%)	36	81	26

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

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

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 Assumes dividend reinvestment and does not reflect the effect of sales charges.

⁶ Not annualized.

⁷ Annualized.

See notes to financial statements

Semiannual 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

CLASS B SHARES
Period ended	2-28-071	2-29-08	8-31-082
Per share operating performance
Net asset value, beginning of period	$20.00	$22.20	$19.38
Net investment income (loss)3	0.02	—4	—4
Net realized and unrealized
gain (loss) on investments	2.40	(1.88)	(0.44)
Total from investment operations	2.42	(1.88)	(0.44)
Less distributions
From net investment income	(0.02)	(0.01)	—
From net realized gain	(0.20)	(0.93)	—
Total distributions	(0.22)	(0.94)	—
Net asset value, end of period	$22.20	$19.38	$18.94
Total return (%)5,6	12.077	(8.84)	(2.27)7
Ratios and supplemental data
Net assets, end of period (in millions)	—8	—8	—8
Ratios (as a percentage of average net assets):
Expenses before reductions	13.589	6.98	8.369
Expenses net of fee waivers	2.049	2.05	2.059
Expenses net of all fee waivers and credits	2.049	2.05	2.059
Net investment income (loss)	0.129	—10	(0.01)9
Portfolio turnover (%)	36	81	26

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

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

³ Based on the average of the shares outstanding.

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 Less than 0.01%.

See notes to financial statements

24  U.S. Core Fund | Semiannual report 

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	8-31-082
Per share operating performance
Net asset value, beginning of period	$20.00	$22.21	$19.39
Net investment income (loss)3	0.03	—4	(0.01)
Net realized and unrealized
gain (loss) on investments	2.40	(1.88)	(0.44)
Total from investment operations	2.43	(1.88)	(0.45)
Less distributions
From net investment income	(0.02)	(0.01)	—
From net realized gain	(0.20)	(0.93)	—
Total distributions	(0.22)	(0.94)	—
Net asset value, end of period	$22.21	$19.39	$18.94
Total return (%)5,6	12.127	(8.84)	(2.32)7
Ratios and supplemental data
Net assets, end of period (in millions)	$3	$3	$1
Ratios (as a percentage of average net assets):
Expenses before reductions	3.828	2.94	3.008
Expenses net of fee waivers	2.048	2.05	2.058
Expenses net of all fee waivers and credits	2.048	2.05	2.058
Net investment income (loss)	0.168	(0.01)	(0.10)8
Portfolio turnover (%)	36	81	26

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

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

³ Based on the average of the shares outstanding.

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.

See notes to financial statements

Semiannual 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 I SHARES
Period ended	2-28-071	2-29-08	8-31-082
Per share operating performance
Net asset value, beginning of period	$20.00	$22.26	$19.43
Net investment income3	0.18	0.25	0.10
Net realized and unrealized
gain (loss) on investments	2.41	(1.89)	(0.44)
Total from investment operations	2.59	(1.64)	(0.34)
Less distributions
From net investment income	(0.13)	(0.26)	—
From net realized gain	(0.20)	(0.93)	—
Total distributions	(0.33)	(1.19)	—
Net asset value, end of period	$22.26	$19.43	$19.09
Total return (%)4,5	12.956	(7.82)	(1.75)6
Ratios and supplemental data
Net assets, end of period (in millions)	—7	—7	—7
Ratios (as a percentage of average net assets):
Expenses before reductions	17.838	12.79	8.768
Expenses net of fee waivers	0.958	0.95	0.958
Expenses net of all fee waivers and credits	0.958	0.95	0.958
Net investment income	1.168	1.10	1.058
Portfolio turnover (%)	36	81	26

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

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

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 Assumes dividend reinvestment.

⁶ Not annualized.

⁷ Less than $500,000.

⁸ Annualized.

See notes to financial statements

26  U.S. Core Fund | Semiannual report 

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	8-31-082
Per share operating performance
Net asset value, beginning of period	$20.00	$22.20	$19.37
Net investment income3	0.06	0.13	0.05
Net realized and unrealized
gain (loss) on investments	2.42	(1.88)	(0.43)
Total from investment operations	2.48 8	(1.75)	(0.38)
Less distributions
From net investment income	(0.08)	(0.15)	—
From net realized gain	(0.20)	(0.93)	—
Total distributions	(0.28)	(1.08)	—
Net asset value, end of period	$22.20	$19.37	$18.99
Total return (%)4,5	12.386	(8.32)	(1.96)6
Ratios and supplemental data
Net assets, end of period (in millions)	—7	—7	—7
Ratios (as a percentage of average net assets):
Expenses before reductions	21.128	15.98	17.128
Expenses net of fee waivers	1.698	1.45	1.458
Expenses net of all fee waivers and credits	1.698	1.45	1.458
Net investment income	0.418	0.59	0.578
Portfolio turnover (%)	36	81	26

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

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

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 Assumes dividend reinvestment.

⁶ Not annualized.

⁷ Less than $500,000.

⁸ Annualized.

See notes to financial statements

Semiannual report | U.S. Core Fund  27 

Notes to financial statements (unaudited)

Note 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.

Note 2
Significant accounting policies

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:

Security valuation

The net asset value of Class A, Class B, Class C, Class I and Class R1 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 John Hancock Advisers, LLC (the Adviser), a wholly owned subsidiary of John Hancock Financial Services, Inc., a subsidiary of Manulife Financial Corporation (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

28  U.S. Core Fund | Semiannual report 

(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 the 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 a Fund investing significant amounts of assets in securities in foreign markets will be fair valued more frequently than a Fund 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 investments 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 that tracks foreign markets in which the Fund has significant investments. If a significant market event occurs due to a change in the value of the index, the pricing for investments in foreign markets that have closed prior to the NYSE will promptly be reviewed and potential adjustments to the net asset value will be recommended to the Fund’s Pricing Committee where applicable.

Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity.

The Fund adopted Statement of Financial Accounting Standards No. 157 (FAS 157), Fair Value Measurements, effective with the beginning of the Fund’s fiscal year. FAS 157 established a three-tier hierarchy to prioritize the assumptions, referred to as inputs, used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below:

Level 1 — Quoted prices in active markets for identical securities.

Level 2 — Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants would use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.

Level 3 — Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable, such as when there is little or no market activity for an investment, unobservable inputs

Semiannual report | U.S. Core Fund  29 

may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors that market participants would use in pricing an investment and would be based on the best information available.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used to value the Fund’s net assets as of August 31, 2008:

	INVESTMENTS IN	OTHER FINANCIAL
VALUATION INPUTS	SECURITIES	INSTRUMENTS*
Level 1 — Quoted Prices	$18,272,669	$—
Level 2 — Other Significant Observable Inputs	250,000	—
Level 3 — Significant Unobservable Inputs	—	—
Total	$18,522,669	$—

*Other financial instruments are derivative instruments not reflected in the Portfolio of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/ depreciation on the instrument.

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.

Investment transactions

Investment transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment security transactions are reported on trade date. Interest income is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date net of foreign withholding taxes. Realized gains and losses from investment transactions are recorded on an identified cost basis.

Class allocations

Income, common expenses and realized and unrealized gains (losses) are determined at the fund level and allocated daily to each class of shares based on the appropriate net asset value of the respective classes. Distribution and service fees, if any, and transfer agent fees for Class A, Class B, Class C, Class I and Class R1 shares are calculated daily at the class level based on the appropriate net asset value of each class and the specific expense rate(s) applicable to each class.

Guarantees and indemnifications

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

Expenses

The majority of expenses are directly identifiable to an individual fund. Trust expenses that are not readily identifiable to a specific fund are allocated in such a manner as deemed equitable, taking into consideration, among other things,

30  U.S. Core Fund | Semiannual report 

the nature and type of expense and the relative size of the funds.

Line of credit

The Fund has entered into an agreement which enables them to participate in a $150 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 period ended August 31, 2008, there were no borrowings under the line of credit.

Pursuant to the custodian agreement, the Custodian may, in its discretion, advance funds to the Fund to make properly authorized payments. When such payments result in an overdraft, the Fund is obligated to repay the Custodian for any overdraft, including any costs or expenses associated with the overdraft. The Custodian has a lien and security interest in any Fund property to the extent of any overdraft.

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 cash collateral against the loaned securities and maintains the cash 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 cash collateral is delivered to the Fund on the next business day. 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 secur ities loaned or in gaining access to the collateral. The Fund may receive compensation for lending their 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., Inc. 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) 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).

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 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

Semiannual report | U.S. Core Fund  31 

close out futures positions because of an illiquid secondary market or the inability of counter-parties 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 Fund had no open financial futures contracts on August 31, 2008.

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 Financial Accounting Standards Board (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 remain subject to examination by the Internal Revenue Service.

New accounting pronouncement

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 and interim reporting periods 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. M anagement is currently evaluating the adoption of FAS 161 on the Fund’s financial statement disclosures.

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 $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.

Such distributions, 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.

Note 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

32  U.S. Core Fund | Semiannual report 

$2,500,000,000. Aggregate net assets include the net assets of the Fund, the 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 Funds II, that are subadvised by Grantham, Mayo, Van Otterloo & Co. LLC. 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 period ended August 31, 2008, were equivalent to an annual effective rate of 0.76% of the Fund’s average daily net assets.

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 1.35% 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 $30,259, $7,794, $10,843, $7,891 and $8,071 for Class A, Class B, Class C, Class I and Class R1, respectively for the period ended August 31, 2008. The expense reimbursements and limits will c ontinue in effect until June 30, 2009 and thereafter until terminated by the Adviser on notice to the Trust.

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 period ended August 31, 2008, were $1,186 with an annual effective rate of 0.01% of the Fund’s average daily net assets.

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 the 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 period ended August 31, 2008.

Class A shares are assessed up-front sales charges. During the period ended August 31, 2008, the Distributor received net up-front sales charges of $1,834 with regard to sales of Class A

Semiannual report | U.S. Core Fund  33 

shares. Of this amount, $266 was retained and used for printing prospectuses, advertising, sales literature and other purposes, $1,547 was paid as sales commissions to unrelated broker-dealers and $21 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 period ended August 31, 2008, CDSCs received by the Distributor amounted to $637 for Class B shares and $453 for Class C shares.

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 $16.50 for each Class A, Class B, Class C and 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 period ended August 31, 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 period ended August 31, 2008, the transfer agent fees reductions for Class R1 were $39.

The Fund receives 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 period ended August 31, 2008, the Fund’s transfer agent fees and out-of-pocket expenses were reduced by $16 for transfer agent credits earned.

Class level expenses including the allocation of the transfer agent fees for the period ended August 31, 2008, were as follows:

	Distribution and	Transfer		Printing and
Share class	service fees	agent fees	Blue sky fees	postage fees
Class A	$26,221	$6,130	$7,398	$4,162
Class B	1,234	249	7,291	78
Class C	11,358	910	7,291	799
Class I	—	51	7,528	54
Class R1	259	65	7,846	74
Total	$39,072	$7,405	$37,354	$5,167

34  U.S. Core Fund | Semiannual report 

The Adviser and other affiliates of John Hancock USA owned 777,709, 5,359 and 5,319 shares of beneficial interest of Class A, Class I and Class R1, respectively, on August 31, 2008.

Note 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.

Note 5
Fund share transactions

This listing illustrates the number of Fund shares sold, reinvested and repurchased during the year ended February 29, 2008, and the period ended August 31, 2008, along with the corresponding dollar value:

		Year ended 2-29-08	Period ended 8-31-081
	Shares	Amount	Shares	Amount
Class A shares
Sold	106,396	$2,395,336	14,289	$276,396
Distributions reinvested	43,986	939,554	—	—
Repurchased	(117,140)	(2,611,267)	(33,761)	(655,758)
Net increase (decrease)	33,242	$723,623	(19,472)	($379,362)
Class B shares
Sold	5,003	$110,340	1,269	$24,810
Distributions reinvested	640	13,671	—	—
Repurchased	(1,099)	(25,142)	(6,484)	(124,958)
Net increase (decrease)	4,544	$98,869	(5,215)	($100,148)
Class C shares
Sold	31,279	$715,779	672	$12,655
Distributions reinvested	7,433	158,760	—	—
Repurchased	(19,244)	(404,858)	(106,020)	(2,051,811)
Net increase (decrease)	19,468	$469,681	(105,348)	($2,039,156)
Class I shares
Sold	14,516	$326,350	1,367	$25,800
Distributions reinvested	1,116	23,848	—	—
Repurchased	(12,136)	(253,563)	(2,959)	(57,259)
Net increase (decrease)	3,496	$96,635	(1,592)	($31,459)
Class R1 shares
Distributions reinvested	257	5,478	—	—
Net increase	257	$5,478	—	—
Net increase (decrease)	61,007	$1,394,286	(131,627)	($2,550,125)

¹Semiannual period from 3-1-08 to 8-31-08. Unaudited..

Note 6
Purchase and sale 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 period ended August 31, 2008, aggregated $5,206,478 and $7,184,993, respectively.

Semiannual report | U.S. Core Fund  35 

Board Consideration of and
Continuation of Investment Advisory
Agreement and Subadvisory
Agreement: John Hancock U.S.
Core Fund

The Investment Company Act of 1940 (the 1940 Act) requires the Board of Trustees (the Board) of John Hancock Funds III (the Trust), including a majority of the Trustees who have no direct or indirect interest in the investment advisory agreement and are not “interested persons” of the Trust, as defined in the 1940 Act (the Independent Trustees), annually to meet in person to review and consider the continuation of: (i) the investment advisory agreement (the Advisory Agreement) with John Hancock Investment Management Services, LLC (the Adviser) and (ii) the investment subadvisory agreement (the Subadvisory Agreement) with Grantham, Mayo, Van Otterloo & Co. LLC (the Subadviser) for the John Hancock U.S. Core Fund (the Fund). The Advisory Agreement and the Subadvisory Agreement are collectively referred to as the Advisory Agreements.

At meetings held on May 5–6 and June 9–10, 2008, the Board considered the factors and reached the conclusions described below relating to the selection of the Adviser and Subadviser and the continuation of the Advisory Agreements. During such meetings, the Board’s Contracts/Operations Committee and the Independent Trustees also met in executive sessions with their independent legal counsel.

In evaluating the Advisory Agreements, the Board, including the Contracts/Operations Committee and its Independent Trustees, reviewed a broad range of information requested for this purpose. This information included:

(i) the investment performance of the Fund relative to a category of relevant funds (the Category) and a peer group of comparable funds (the Peer Group). The funds within each Category and Peer Group were selected by Morningstar, Inc. (Morningstar), an independent provider of investment company data. Data covered the period since the Fund’s inception through December 31, 2007;

(ii) advisory and other fees incurred by, and the expense ratios of, the Fund relative to a Category and a Peer Group;

(iii) the advisory fees of comparable portfolios of other clients of the Adviser and the Subadviser;

(iv) the Adviser’s financial results and condition, including its and certain of its affiliates’ profitability from services performed for the Fund;

(v) breakpoints in the Fund’s and the Peer Group’s fees, and information about economies of scale;

(vi) the Adviser’s and Subadviser’s record of compliance with applicable laws and regulations, with the Fund’s investment policies and restrictions, and with the applicable Code of Ethics, and the structure and responsibilities of the Adviser’s and Subadviser’s compliance department;

(vii) the background and experience of senior management and investment professionals; and

(viii) the nature, cost and character of advisory and non-investment management services provided by the Adviser and its affiliates and by the Subadviser.

The Independent Trustees considered the legal advice of independent legal counsel and relied on their own business judgment in determining the factors to be considered in evaluating the materials that were presented to them and the weight to be given to each such factor. The Board’s review and conclusions were based on a comprehensive consideration of all information presented to the Board and not the result of any single controlling factor. The Board principally considered data on performance and other information provided by Morningstar as of December 31, 2007. The Board also considered updated performance information provided to it by the Adviser or Subadviser at its May and June 2008 meetings. Performance and other information may be quite different as of the date of this shareholders report. The key factors

36  U.S. Core Fund | Semiannual report 

considered by the Board and the conclusions reached are described below.

Nature, extent and quality of services

The Board considered the ability of the Adviser and the Subadviser, based on their resources, reputation and other attributes, to attract and retain qualified investment professionals, including research, advisory, and supervisory personnel. The Board considered the investment philosophy, research and investment decision-making processes of the Adviser and Subadviser. The Board considered the Adviser’s execution of its oversight responsibilities. The Board further considered the culture of compliance, resources dedicated to compliance, compliance programs and compliance records of the Adviser and Subadviser. In addition, the Board took into account the administrative and other non-advisory services provided to the Fund by the Adviser and its affiliates.

Based on the above factors, together with those referenced below, the Board concluded that, within the context of its full deliberations, the nature, extent and quality of the investment advisory services provided to the Fund by the Adviser and Subadviser supported renewal of the Advisory Agreements.

Fund performance

The Board noted that the Fund had less than two full years of operational history, and considered the performance results for the Fund since its inception through December 31, 2007. The Board also considered these results in comparison to the performance of the Category, as well as the Fund’s Peer Group and benchmark indexes. The Board reviewed with representatives of Morningstar the methodology used by Morningstar to select the funds in the Category and the Peer Group.

The Board noted that the Fund’s performance was lower than the performance of the Category and Peer Group medians, and its benchmark indexes, the Standard & Poor’s 500 Index and the Russell 1000 TR Index, over the 1-year period. The Adviser discussed its plans with respect to the Fund. The Board recognized the short operational history of the Fund and indicated its intent to continue to monitor the Fund’s performance trends.

Investment advisory fee and subadvisory
fee rates and expenses

The Board reviewed and considered the contractual investment advisory fee rate payable by the Fund to the Adviser for investment advisory services (the Advisory Agreement Rate). The Board received and considered information comparing the Advisory Agreement Rate with the advisory fees for the Peer Group and Category. The Board noted that the Advisory Agreement Rate was lower than the median rate of the Peer Group and not appreciably higher than the median rate of the Category.

The Board received and considered expense information regarding the Fund’s various components, including advisory fees, distribution and fees other than advisory and distribution fees, including transfer agent fees, custodian fees, and other miscellaneous fees (e.g., fees for accounting and legal services). The Board considered comparisons of these expenses to the Peer Group median. The Board also received and considered expense information regarding the Fund’s total operating expense ratio (Gross Expense Ratio) and total operating expense ratio after taking the fee waiver arrangement applicable to the Advisory Agreement Rate into account (Net Expense Ratio). The Board received and considered information comparing the Gross Expense Ratio and Net Expense Ratio of the Fund to that of the Peer Group and Category medians. The Board noted that the Fund’s Gross Expense Ratio was higher than the median of the Peer Group and Category. The Board also noted that the Fund’s Net Expense Ratio was higher than the median of the Category but not appreciably higher than the Peer Group.

The Adviser also discussed the Morningstar data and rankings, and other relevant information, for the Fund. Based on the above-referenced considerations and other factors, the Board concluded that the Fund’s expenses and overall plans to improve performance supported the re-approval of the Advisory Agreements.

The Board also received information about the investment subadvisory fee rate (the Subadvisory Agreement Rate) payable by the Adviser to the Subadviser for investment subadvisory services. The Board concluded that the Subadvisory

Semiannual report | U.S. Core Fund  37 

Agreement Rate was fair and equitable, based on its consideration of the factors described here.

Profitability

The Board received and considered a detailed profitability analysis of the Adviser based on the Advisory Agreements, as well as on other relationships between the Fund and the Adviser and its affiliates. The Board also considered a comparison of the Adviser’s profitability to that of other similar investment advisers whose profitability information is publicly available. The Board concluded that, in light of the costs of providing investment management and other services to the Fund, the profits and other ancillary benefits reported by the Adviser were not unreasonable.

The Board did not consider profitability information with respect to the Subadviser, which is not affiliated with the Adviser. The Board considered that the Subadvisory Agreement Rate paid to the Subadviser had been negotiated by the Adviser on an arm’s length basis and that the Subadviser’s separate profitability from its relationship with the Fund was not a material factor in determining whether to renew the agreement.

Economies of scale

The Board received and considered general information regarding economies of scale with respect to the management of the Fund, including the Fund’s ability to appropriately benefit from economies of scale under the Fund’s fee structure. The Board recognized the inherent limitations of any analysis of economies of scale, stemming largely from the Board’s understanding that most of the Adviser’s costs are not specific to individual Funds, but rather are incurred across a variety of products and services.

To the extent the Board and the Adviser were able to identify actual or potential economies of scale from Fund-specific or allocated expenses, in order to ensure that any such economies continue to be reasonably shared with the Fund as its assets increase, the Adviser and the Board agreed to continue the existing breakpoints to the Advisory Agreement Rate.

Information about services to other clients

The Board also received information about the nature, extent and quality of services and fee rates offered by the Adviser and Subadviser to their other clients, including other registered investment companies, institutional investors and separate accounts. The Board concluded that the Advisory Agreement Rate and the Subadvisory Agreement Rate were not unreasonable, taking into account fee rates offered to others by the Adviser and Subadviser, respectively, after giving effect to differences in services.

Other benefits to the Adviser

The Board received information regarding potential “fall-out” or ancillary benefits received by the Adviser and its affiliates and the Subadviser as a result of their relationship with the Fund. Such benefits could include, among others, benefits directly attributable to the relationship of the Adviser and Subadviser with the Fund and benefits potentially derived from an increase in business as a result of their relationship with the Fund (such as the ability to market to shareholders other financial products offered by the Adviser and its affiliates).

The Board also considered the effectiveness of the Adviser’s, Subadviser’s and Fund’s policies and procedures for complying with the requirements of the federal securities laws, including those relating to best execution of portfolio transactions and brokerage allocation.

Other factors and broader review

As discussed above, the Board reviewed detailed materials received from the Adviser and Subadviser as part of the annual re-approval process. The Board also regularly reviews and assesses the quality of the services that the Fund receives throughout the year. In this regard, the Board reviews reports of the Adviser at least quarterly, which include, among other things, fund performance reports and compliance reports. In addition, the Board meets with portfolio managers and senior investment officers at various times throughout the year.

After considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Board concluded that approval of the continuation of the Advisory Agreements for the Fund was in the best interest of the Fund and its shareholders. Accordingly, the Board unanimously approved the continuation of the Advisory Agreements.

38  U.S. Core Fund | Semiannual report 

More information

Trustees	Investment adviser
James F. Carlin, Chairman	John Hancock Investment Management
James R. Boyle†	Services, LLC
William H. Cunningham
Deborah C. Jackson	Subadviser
Charles L. Ladner*	Grantham, Mayo, Van Otterloo & Co. LLC
Stanley Martin*
Dr. John A. Moore*	Principal distributor
Patti McGill Peterson*	John Hancock Funds, LLC
Steven R. Pruchansky
Gregory A. Russo*	Custodian
*Members of the Audit Committee	State Street Bank & Trust Company
†Non-Independent Trustee
	Transfer agent
Officers	John Hancock Signature Services, Inc.
Keith F. Hartstein
President and Chief Executive Officer	Legal counsel
	K&L Gates LLP
Thomas M. Kinzler
Secretary and Chief Legal Officer
Francis V. Knox, Jr.
Chief Compliance Officer
Charles A. Rizzo
Chief Financial Officer
Gordon M. Shone
Treasurer
John G. Vrysen
Chief Operating Officer

Additional information about your fund is available without charge in several ways. As required by the SEC, you can access proxy voting information and quarterly portfolio information on your fund. The proxy voting information includes a description of proxy voting policies, procedures and information regarding how the fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30. The quarterly portfolio information that includes a complete list of the fund’s holdings for the first and third quarters of the fund’s fiscal period is filed on Form N-Q. You have access to this information:

By phone	On the fund’s Website	At the SEC
1-800-225-5291	www.jhfunds.com	www.sec.gov
		1-800-SEC-0330
		SEC Public Reference Room

You can also contact us:
Regular mail	Express mail
John Hancock Signature Services, Inc.	John Hancock Signature Services, Inc.
P.O. Box 9510	Mutual Fund Image Operations
Portsmouth, NH 03802-9510	164 Corporate Drive
	Portsmouth, NH 03801

Month-end portfolio holdings are available at www.jhfunds.com.

Semiannual report | U.S. Core 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 U.S. Core Fund.	650SA 8/08
It is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus.	10/08

A look at performance

For the periods ended August 31, 2008

		Average annual returns (%)				Cumulative total returns (%)
		with maximum sales charge (POP)				with maximum sales charge (POP)
	Inception				Since	Six				Since
Class	date	1-year	5-year	10-year	inception	months	1-year	5-year	10-year	inception
A1,2	9-16-05	–18.58	—	—	5.27	–12.48	–18.58	—	—	16.40
B	6-12-06	–18.79	—	—	2.87	–12.76	–18.79	—	—	6.50
C	6-12-06	–15.68	—	—	4.15	–9 .11	–15.68	—	—	9.48
I3	6-12-06	–13.88	—	—	5.35	–7.63	–13.88	—	—	12.31
R13	6-12-06	–14.24	—	—	4.73	–7.88	–14.24	—	—	10.84
13	11-6-06	–13.86	—	—	–0.21	–7.62	–13.86	—	—	–0.38
NAV3	8-29-06	–13.80	—	—	1.58	–7.60	–13.80	—	—	3.19

Performance figures assume all distributions are reinvested. Public offering price (POP) figures reflect maximum sales charges 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 June 30, 2009. The net expenses are as follows: Class A — 1.65%, Class B — 2.40%, Class C —2.40%, Class I — 1.18%, Class R1 — 1.70%, Class 1 — 1.14%, Class NAV — 1.08%. Had the fee waivers and expense limitations not been in place, the gross expenses would be as follows: Class A —1.68%, Class B — 2.48%, Class C — 2.49%, Class I — 2.34%, Class R1 — 13.85%, Class 1 — 1.16%, Class NAV — 1.11%.

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 current to the most recent month end performance data, 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.

6  International Core Fund | Semiannual report 

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	$10,948	$10,650	$11,006
C3	6-12-06	10,948	10,948	11,006
I4	6-12-06	11,231	11,231	11,006
R14	6-12-06	11,084	11,084	11,006
14	11-6-06	9,962	9,962	9,785
NAV4	8-29-06	10,319	10,319	10,239

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 August 31, 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 the equity market performance of developed markets, excluding the U.S. and Canada. As of June 2007, the MSCI EAFE Index consisted of the following 21 developed market country indices Australia, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Italy, Japan, the 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 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.

Semiannual report | International Core Fund  7 

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 March 1, 2008, with the same investment held until August 31, 2008.

	Account value	Ending value	Expenses paid during
	on 3-1-08	on 8-31-08	period ended 8-31-081
Class A	$1,000.00	$921.40	$8.18
Class B	1,000.00	918.30	11.60
Class C	1,000.00	918.10	11.60
Class I	1,000.00	923.70	5.72
Class R1	1,000.00	921.20	8.23
Class 1	1,000.00	923.80	5.58
Class NAV	1,000.00	924.00	5.24

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 August 31, 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:

8  International Core Fund | Semiannual report 

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 March 1, 2008, with the same investment held until August 31, 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 3-1-08	on 8-31-08	period ended 8-31-081
Class A	$1,000.00	$1,016.70	$8.59
Class B	1,000.00	1,013.10	12.18
Class C	1,000.00	1,013.10	12.18
Class I	1,000.00	1,019.30	6.01
Class R1	1,000.00	1,016.60	8.64
Class 1	1,000.00	1,019.40	5.85
Class NAV	1,000.00	1,019.80	5.50

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 1.69%, 2.40%, 2.40%, 1.18%, 1.70, 1.15% 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 the most recent fiscal half year/365 (to reflect the one-half year period).

Semiannual report | International Core Fund  9 

Portfolio summary

Top 10 holdings1
GlaxoSmithKline PLC	4.6%	AstraZeneca Group PLC	1.8%
Total SA	3.5%	BG Group PLC	1.8%
Sanofi-Aventis SA	2.9%	Vodafone Group PLC	1.7%
Novartis AG	2.8%	Royal Bank of Scotland Group PLC	1.6%
Eni SpA	2.6%	Honda Motor Company, Ltd.	1.5%
Sector distribution1,2
Consumer Non-cyclical	22%	Communications	8%
Energy	13%	Industrial	7%
Financial	13%	Utilities	5%
Consumer Cyclical	12%	Technology	3%
Basic Materials	10%	Short-term Investments & Other	7%

¹ As a percentage of net assets on August 31, 2008.

² Sector investing is subject to greater risks than the market as a whole. Because the Fund may focus on particular sectors of the economy, its performance may depend on the performance of those sectors. International investing involves special risks such as political, economic and currency risks and differences in accounting standards and financial reporting.

10  International Core Fund | Semiannual report 

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 8-31-08 (unaudited)

This schedule is divided into five main categories: common stocks, preferred stocks, rights, 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 93.67%		$1,146,699,740
(Cost $1,238,814,211)
Australia 3.53%		43,243,440
Australia and New Zealand Banking Group, Ltd.	178,489	2,513,413
BHP Billiton, Ltd.	70,741	2,484,549
Bluescope Steel, Ltd.	240,047	1,887,498
CSL, Ltd.	95,596	3,336,327
Fortescue Metals Group, Ltd. *	223,556	1,452,368
Foster’s Group, Ltd.	318,706	1,521,128
Incitec Pivot, Ltd.	12,911	1,756,452
Leighton Holdings, Ltd.	23,910	943,531
Macquarie Infrastructure Group, Ltd.	312,479	582,333
Mirvac Group, Ltd.	548,870	1,346,662
Newcrest Mining, Ltd. *	27,750	650,752
Origin Energy, Ltd.	51,864	715,460
Rio Tinto, Ltd.	9,365	1,015,384
Stockland Company, Ltd.	690,164	3,088,699
Suncorp-Metway, Ltd.	282,809	2,745,775
TABCORP Holdings, Ltd.	208,101	1,520,181
Telstra Corp., Ltd.	973,827	3,614,925
Westpac Banking Corp., Ltd.	66,993	1,338,836
Woodside Petroleum, Ltd.	149,857	8,049,253
Woolworths, Ltd.	111,004	2,679,914
Austria 0.15%		1,771,119
OMV AG	27,645	1,771,119
Belgium 0.91%		11,154,240
Belgacom SA	22,881	911,101
Colruyt SA	4,465	1,217,338
Dexia SA	221,329	3,127,909
Fortis Group SA	286,314	3,964,374
Solvay SA	10,153	1,243,083
UCB SA	17,656	690,435
Canada 3.78%		46,267,396
Agrium, Inc.	31,300	2,647,441
Bank Nova Scotia Halifax	24,100	1,113,303

See notes to financial statements

Semiannual report | International Core Fund  11 

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

Issuer	Shares	Value
Canada (continued)
Bank of Montreal	102,900	$4,509,264
BCE, Inc.	22,888	867,192
Canadian Imperial Bank of Commerce	13,800	834,005
Canadian Natural Resources, Ltd.	29,437	2,512,874
Canadian Pacific Railway, Ltd.	32,500	1,982,812
EnCana Corp.	16,697	1,255,027
Fording Canadian Coal Trust	16,200	1,441,034
IGM Financial, Inc. *	17,900	748,334
Magna International, Inc.	28,100	1,613,805
National Bank of Canada *	76,765	3,616,298
Penn West Energy Trust	33,700	989,291
Petro-Canada	21,700	959,517
Potash Corp. of Saskatchewan, Inc.	74,800	13,015,679
Research In Motion, Ltd. *	44,100	5,373,156
Sun Life Financial, Inc.	72,300	2,788,364
Denmark 0.91%		11,156,133
FLS Industries AS, B Shares	8,350	669,482
Novo Nordisk AS	93,300	5,208,178
Vestas Wind Systems AS *	38,900	5,278,473
Finland 2.32%		28,441,939
Fortum Corp. Oyj	71,965	2,953,860
Kone Corp. Oyj	15,214	471,201
Neste Oil Oyj	75,507	1,800,456
Nokia AB Oyj	581,239	14,552,695
Nokian Renkaat Oyj	13,114	467,024
Outokumpu Oyj	84,541	2,024,396
Rautaruukki Oyj *	25,437	862,794
Sampo Oyj, A Shares	187,920	4,727,577
TietoEnator Oyj	29,639	581,936
France 11.94%		146,205,502
Air France KLM	36,910	888,017
Air Liquide	27,398	3,327,780
Alstom	44,104	4,480,177
BNP Paribas SA	130,708	11,725,176
Cap Gemini SA	17,309	1,021,930
Casino Guich-Perrachon SA	31,584	3,095,035
Compagnie de Saint-Gobain SA	17,325	1,058,487
Dassault Systemes SA	19,477	1,177,141
Eramet	1,343	735,385
Essilor International SA	37,411	1,990,178
France Telecom SA	233,569	6,886,774
Gaz de France	143,368	8,253,304
Hermes International SA	27,512	3,907,076
Lafarge SA	6,769	816,599

See notes to financial statements

12  International Core Fund | Semiannual report 

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

Issuer	Shares	Value
France (continued)
L’Oreal SA	19,890	$1,974,272
Pernod-Ricard SA	14	1,309
PSA Peugeot Citroen SA	33,911	1,611,163
Renault Regie Nationale SA	40,489	3,380,960
Sanofi-Aventis SA	491,884	34,896,976
Societe Generale	68,290	6,587,425
Suez Environnement SA *	16,661	478,585
Technip SA	10,155	833,419
Total SA	590,358	42,409,034
UbiSoft Entertainment SA *	15,760	1,470,088
Unibail-Rodamco, REIT	4,033	837,373
Vallourec SA	8,490	2,361,839
Germany 5.89%		72,119,229
Adidas-Salomon AG	60,788	3,558,673
Aixtron AG	68,997	725,264
Altana AG	41,796	666,751
BASF AG	68,954	3,978,238
Bayerische Motoren Werke (BMW) AG	72,419	2,962,686
Beiersdorf AG	17,815	1,034,713
Bilfinger Berger AG	14,308	1,006,114
Demag Cranes AG	6,586	358,635
Deutsche Boerse AG	31,890	3,012,790
Deutsche Post AG	30,998	725,974
E.ON AG	185,556	10,836,411
Gildemeister AG	32,706	787,938
Hannover Rueckversicherung AG	38,579	1,646,062
Heidelberger Druckmaschinen AG	38,403	785,626
K&S AG	51,776	6,248,717
Kloeckner & Company AG	22,967	915,597
Linde AG	18,815	2,366,631
Merck KGAA *	7,433	851,711
Norddeutsche Affinerie AG	46,094	2,133,490
Puma AG	2,764	868,306
Q-Cells AG *	23,417	2,358,781
RWE AG	17,998	1,941,502
Salzgitter AG	28,366	4,347,819
SAP AG	114,806	6,432,534
SGL Carbon AG *	32,494	1,950,099
Stada Arzneimittel AG	8,420	458,546
Suedzucker AG	45,857	777,284
Thyssen Krupp AG	28,644	1,429,071
Volkswagen AG	18,391	5,492,153
Wacker Chemie AG	7,952	1,461,113

See notes to financial statements

Semiannual 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
Greece 0.19%		$2,281,166
Coca-Cola Hellenic Bottling Company SA	30,184	743,368
Marfin Financial Group SA Holdings *	63,634	401,774
OPAP SA	32,439	1,136,024
Hong Kong 1.86%		22,778,734
CLP Holdings, Ltd. (a)	1,013,699	8,223,586
Esprit Holdings, Ltd.	164,700	1,359,642
Hang Seng Bank, Ltd.	121,800	2,402,295
Hong Kong & China Gas Company, Ltd. (a)	740,300	1,660,992
Hong Kong Electric Holdings, Ltd. (a)	847,854	5,383,229
Noble Group, Ltd.	571,633	772,395
Sun Hung Kai Properties, Ltd.	151,000	2,058,952
Yue Yuen Industrial Holdings, Ltd.	331,218	917,643
Ireland 0.39%		4,709,489
Bank of Ireland	104,307	836,134
CRH PLC	115,628	3,016,256
Kerry Group PLC	31,605	857,099
Italy 3.19%		39,052,398
Banco Popolare Societa Cooperativa	48,087	915,989
Eni SpA	962,830	31,231,601
Italcementi SpA, RNC	33,795	387,237
Luxottica Group SpA	42,787	1,073,676
Mediaset SpA	256,795	1,864,417
Snam Rete Gas SpA	187,746	1,172,860
Telecom Italia SpA	1,187,436	1,505,051
Terna SpA	224,383	901,567
Japan 21.50%		263,227,958
Acom Company, Ltd.	37,880	1,055,033
Aisin Seiki Company	29,400	773,989
Alps Electric Company, Ltd.	66,546	601,443
Asahi Breweries, Ltd.	111,400	2,063,438
Astellas Pharmaceuticals, Inc.	67,600	3,044,824
Canon, Inc.	117,700	5,278,109
Capcom Company, Ltd.	11,900	363,774
Cosmo Oil Company, Ltd.	387,000	1,130,319
CyberAgent, Inc. *	929	887,661
Dai Nippon Printing Company, Ltd.	52,000	734,162
Daiei, Inc. *	43,600	344,663
Daiichi Sankyo Company, Ltd.	210,053	6,319,430
Daikin Industries, Ltd.	59,900	2,019,134
Dena Company, Ltd.	225	1,097,748
Denso Corp.	39,400	1,021,385
Eisai Company, Ltd.	69,080	2,747,235
Familymart Company, Ltd.	25,500	1,032,823
Fanuc, Ltd.	39,800	2,961,056

See notes to financial statements

14  International Core Fund | Semiannual report 

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

Issuer	Shares	Value
Japan (continued)
Fast Retailing Company, Ltd.	40,600	$4,098,003
Fuji Heavy Industries, Ltd.	313,116	1,789,961
Fujitsu, Ltd.	131,000	905,454
GS Yuasa Corp. (a)	93,000	475,553
Hanwa Company, Ltd.	111,000	496,397
Haseko Corp.	601,000	610,005
Hirose Electric Company, Ltd.	9,500	921,433
Hitachi, Ltd.	356,000	2,621,920
Hokkaido Electric Power Company, Inc.	81,599	1,823,357
Honda Motor Company, Ltd.	567,912	18,444,446
Hoya Corp.	112,900	2,301,480
Inpex Holdings, Inc.	303	3,299,418
Itochu Corp.	278,047	2,236,824
Japan Real Estate Investment Corp., REIT	45	419,706
JFE Holdings, Inc.	83,500	3,528,707
JGC Corp.	29,000	555,330
Kao Corp.	193,050	5,465,823
Kawasaki Kisen Kaisha, Ltd.	326,000	2,311,255
Keyence Corp.	14,000	2,831,929
Kirin Brewery Company, Ltd.	75,000	1,122,139
Konami Corp.	47,223	1,442,047
Konica Minolta Holdings, Inc.	94,500	1,302,475
Kyocera Corp.	10,600	888,388
Kyushu Electric Power Company, Inc.	80,580	1,774,346
Marubeni Corp.	231,824	1,434,382
Matsushita Electric Industrial Company, Ltd.	338,000	6,947,196
Mazda Motor Corp.	335,000	1,783,148
Millea Holdings, Inc.	27,100	919,156
Mitsubishi Corp.	275,895	7,578,581
Mitsubishi Electric Corp.	169,000	1,433,271
Mitsui & Company, Ltd.	52,560	896,113
Mitsui Mining & Smelting Company, Ltd.	427,000	1,137,736
Mitsui O.S.K. Lines, Ltd.	138,000	1,635,586
Murata Manufacturing Company, Ltd.	41,200	1,810,403
NEC Corp.	127,000	585,273
Nidec Corp.	21,500	1,445,181
Nikon Corp.	62,000	2,012,281
Nintendo Company, Ltd.	20,200	9,483,084
Nippon Denko Company, Ltd.	130,000	1,118,780
Nippon Electric Glass Company, Ltd.	57,000	760,322
Nippon Mining Holdings, Inc.	592,000	3,288,316
Nippon Oil Corp.	747,000	4,658,968
Nippon Telegraph & Telephone Corp.	1,440	7,079,242
Nippon Yakin Kogyo Company, Ltd.	127,500	627,748

See notes to financial statements

Semiannual 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)
Nippon Yusen Kabushiki Kaisha	463,000	$3,694,856
Nissan Motor Company, Ltd.	1,160,400	8,814,499
Nissha Printing Company, Ltd.	7,500	405,056
Nisshinbo Industries, Inc.	34,000	374,345
Nitto Denko Corp.	35,300	1,059,613
Nomura Research Institute, Ltd.	37,400	848,664
NTT DoCoMo, Inc.	5,330	8,400,176
Ono Pharmaceutical Company, Ltd.	16,700	874,461
Orix Corp.	6,370	776,007
Osaka Gas Company, Ltd.	1,601,120	5,825,413
Resona Holdings, Inc.	1,912	2,225,402
Ricoh Company, Ltd.	131,000	2,162,366
Rohm Company, Ltd.	22,500	1,295,393
Ryohin Keikaku Company, Ltd.	14,700	788,781
SANKYO Company, Ltd.	40,500	1,917,615
SBI Holdings, Inc.	5,832	1,045,825
Secom Company, Ltd.	29,000	1,335,916
SEGA SAMMY HOLDINGS, Inc.	240,200	2,278,279
Seven & I Holdings Company, Ltd.	383,700	11,176,238
Sharp Corp.	47,000	597,983
Shin-Etsu Chemical Company, Ltd.	141,500	7,871,666
Shiseido Company, Ltd.	65,000	1,521,893
Showa Shell Sekiyu K.K.	146,100	1,651,672
Sojitz Holdings Corp.	1,008,300	2,876,947
Sumco Corp.	114,900	2,276,237
Sumitomo Chemical Company, Ltd.	167,000	1,024,730
Sumitomo Electric Industries, Ltd.	62,700	719,518
Sumitomo Metal Industries, Ltd.	555,000	2,451,741
T&D Holdings, Inc.	10,750	564,065
Taisho Pharmaceuticals Company, Ltd.	40,790	865,216
Takeda Pharmaceutical Company, Ltd.	235,689	12,312,459
Takefuji Corp. (a)	87,460	1,158,418
TDK Corp.	33,000	1,911,674
Terumo Corp.	60,500	3,365,754
The Japan Steel Works, Ltd.	153,000	2,634,956
Tokyo Gas Company, Ltd.	431,397	1,799,905
Tokyo Steel Manufacturing Company, Ltd.	98,400	1,038,933
TonenGeneral Sekiyu K.K.	111,133	894,190
Toyo Engineering Corp.	49,000	255,419
Toyota Motor Corp.	51,600	2,302,309
Trend Micro, Inc.	23,000	778,397
UNY Company, Ltd.	132,000	1,455,166
Yahoo Japan Corp.	6,712	2,572,378
Yamada Denki Company, Ltd.	17,400	1,250,038

See notes to financial statements

16  International Core Fund | Semiannual report 

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

Issuer	Shares	Value
Luxembourg 0.86%		$10,560,955
ArcelorMittal	134,617	10,560,955
Netherlands 3.24%		39,672,126
Aegon NV	573,262	6,753,036
DSM NV	54,912	3,160,441
Heineken NV (a)	109,548	5,135,925
ING Groep NV	569,271	17,735,251
Reed Elsevier NV	162,307	2,713,787
Royal Dutch Shell PLC, A Shares	75,539	2,628,847
TNT Post Group NV	41,415	1,544,839
New Zealand 0.07%		787,323
Telecom Corp. of New Zealand, Ltd.	343,984	787,323
Norway 0.69%		8,484,714
Den Norske Bank ASA	89,900	1,042,260
Statoil ASA	164,868	5,057,394
Yara International ASA	38,520	2,385,060
Singapore 1.87%		22,909,395
Cosco Corp. Singapore, Ltd.	403,600	645,097
DBS Group Holdings, Ltd.	66,000	834,536
Neptune Orient Lines, Ltd.	531,488	837,599
Oversea-Chinese Banking Corp., Ltd.	273,000	1,547,035
SembCorp Industries, Ltd.	364,802	1,058,927
SembCorp Marine, Ltd.	1,064,573	2,821,552
Singapore Exchange, Ltd.	327,000	1,443,974
Singapore Press Holdings, Ltd. (a)	856,000	2,476,118
Singapore Telecommunications, Ltd. (a)	3,264,350	8,056,636
United Overseas Bank, Ltd.	144,000	1,916,679
Wilmar International, Ltd.	480,000	1,271,242
Spain 1.61%		19,732,973
Gas Natural SDG SA	36,658	1,698,297
Iberdrola SA	147,168	1,773,277
Industria de Diseno Textil SA	51,069	2,375,055
Repsol YPF SA	215,399	6,662,391
Telefonica SA	292,367	7,223,953
Sweden 1.02%		12,490,619
Hennes & Mauritz AB, B shares	90,550	4,487,267
Investor AB, B shares	193,600	4,076,210
SKF AB, B Shares	106,400	1,611,346
Svenska Handelsbanken AB, Series A	61,700	1,484,601
Swedbank AB, A shares	47,300	831,195
Switzerland 6.54%		80,063,202
ABB, Ltd. *	204,186	5,008,216
Ciba Specialty Chemicals AG	35,267	868,658
Compagnie Financiere Richemont AG, Series A *	46,734	2,719,212

See notes to financial statements

Semiannual 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
Switzerland (continued)
Lonza Group AG	5,144	$726,159
Nestle SA	352,124	15,514,438
Novartis AG	623,626	34,741,282
Roche Holdings AG Genusschein	38,065	6,405,515
Swatch Group AG, BR shares	8,117	1,907,740
Syngenta AG	21,325	5,721,697
Synthes AG	18,228	2,522,375
UBS AG *	180,709	3,927,910
United Kingdom 21.21%		259,589,690
3i Group PLC	319,335	5,336,082
Alliance & Leicester PLC	87,787	520,599
AMEC PLC	165,059	2,531,876
Anglo American PLC	18,514	984,125
Associated British Foods PLC	56,531	829,345
AstraZeneca Group PLC	459,595	22,406,132
BAE Systems PLC	151,118	1,318,899
Barclays PLC	1,076,650	6,889,356
BG Group PLC	1,004,273	22,276,122
BHP Billiton PLC	31,970	995,735
British American Tobacco PLC	164,944	5,572,498
British Energy Group PLC	123,731	1,652,320
Cadbury PLC	170,762	1,959,690
Capita Group PLC	164,802	2,120,379
Cobham PLC	175,094	731,910
Compass Group PLC	281,548	1,873,673
Diageo PLC	287,551	5,310,761
Dixons Group PLC	1,544,146	1,387,514
Drax Group PLC	91,343	1,238,958
Game Group PLC	78,972	387,557
GlaxoSmithKline PLC	2,405,581	56,605,350
HBOS PLC	1,259,156	7,207,354
Home Retail Group	509,085	2,343,813
Imperial Tobacco Group PLC	60,886	2,007,465
Kingfisher PLC	471,000	1,137,701
Ladbrokes PLC	286,950	1,179,403
London Stock Exchange Group PLC	28,971	416,323
Man Group PLC, ADR	91,897	946,959
Next Group PLC	94,322	1,819,969
Old Mutual PLC	577,705	1,021,723
Reckitt Benckiser PLC	70,788	3,578,646
Reed Elsevier PLC	134,335	1,535,320
Rio Tinto PLC	188,169	17,862,654
Royal Bank of Scotland Group PLC	4,682,788	19,916,251
Royal Dutch Shell PLC, A Shares	378,868	13,240,398

See notes to financial statements

18  International Core Fund | Semiannual report 

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)
Royal Dutch Shell PLC, B Shares	52,074	$1,790,643
Scottish & Southern Energy PLC	111,710	2,942,368
Signet Group PLC	876,797	1,001,045
Smith & Nephew PLC	195,874	2,350,570
Taylor Woodrow PLC	819,046	804,972
Tesco PLC	266,920	1,850,121
The Sage Group PLC	326,548	1,245,059
Trinity Mirror PLC	121,182	236,732
Tullow Oil PLC	107,851	1,616,551
United Utilities Group PLC *	106,037	1,379,697
Vedanta Resources PLC	37,449	1,236,487
Vodafone Group PLC	8,189,261	20,928,010
William Hill PLC	142,345	732,251
Wolseley PLC	219,585	1,771,749
Xstrata PLC	45,927	2,560,575
Preferred stocks 0.29%		$3,580,528
(Cost $2,026,341)
Germany 0.29%		3,580,528
Bayerische Motoren Werke (BMW) AG (f)	9,567	327,284
Volkswagen AG (f)	21,123	3,253,244
Rights 0.00%		$16,367
(Cost $0)
Leighton Holdings, Ltd. (Expiration Date 9-11-08,
Strike Price AUD 35.35)	1,708	16,367
	Principal
	amount
Short term investments 2.14%		$26,187,653
(Cost $26,187,653)
John Hancock Cash Investment Trust, 2.5657% (c)(g)	$26,187,653	26,187,653
Repurchase agreements 4.62%		$56,567,000
(Cost $56,567,000)
Repurchase Agreement with State Street Corp. dated 8-29-08
at 1.70% to be repurchased at $56,577,685 on 9-02-08,
collateralized by $57,415,000 Federal Home Loan Bank,
3.00% due 06/30/2009 (valued at $57,702,075, including interest)	$56,567,000	56,567,000
Total investments (Cost $1,323,595,205)† 100.72%		$1,233,051,288
Liabilities in excess of other assets (0.72%)		($8,775,556)
Total net assets 100.00%		$1,224,275,732

See notes to financial statements

Semiannual report | International Core Fund  19 

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.

The portfolio had the following five top industry concentrations as of August 31, 2008 (as a percentage of total net assets):

Pharmaceuticals	10.44%
International oil	8.58%
Banking	6.45%
Telecommunications equipment & services	5.92%
Drugs & health care	5.66%

ADR American Depositary Receipts

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) The investment is an affiliate of the Fund, the adviser and/or subadviser.

(f) Variable Rate Preferred .

(g) 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 August 31, 2008, the aggregate cost of investment securities for federal income tax purposes was $1,325,754,600. Net unrealized depreciation aggregated $92,703,312, of which $68,401,382 related to appreciated investment securities and $161,104,694 related to depreciated investment securities.

The following is a summary of open futures contracts at August 31, 2008:

					UNREALIZED
	NUMBER OF		EXPIRATION	NOTIONAL	APPRECIATION
OPEN CONTRACTS	CONTRACTS	POSITION	DATE	AMOUNT	(DEPRECIATION)
S&P/MIB 30 Index Futures	13	Long	Sep 2008	1,874,145	$12,017
EOE Dutch Stock Index Futures	9	Long	Sep 2008	742,770	14,570
FTSE 100 Index Futures	46	Long	Sep 2008	2,598,310	159,449
Hang Seng Stock Index Futures	4	Long	Sep 2008	4,252,000	12,286
DAX Index Futures	176	Long	Sep 2008	28,320,600	(2,566,647)
OMX Stock Index Futures	41	Long	Sep 2008	3,568,025	3,841
MSCI Singapore Index Futures	149	Long	Sep 2008	10,117,100	104,119
CAC 4010 Euro Index Futures	106	Long	Sep 2008	4,754,100	66,225
Topix Index Futures	303	Long	Sep 2008	3,804,165,000	(2,311,891)
IBEX 35 Index Futures	90	Short	Sep 2008	10,553,850	248,686
S&P/Canada 60 Index Futures	87	Short	Sep 2008	14,311,500	1,164,216
SPI 200 Index Futures	136	Short	Sep 2008	17,489,600	252,821
Total					($2,840,308)

See notes to financial statements

20  International Core Fund | Semiannual report 

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

Open forward foreign currency contracts as of August 31, 2008, were as follows:

				UNREALIZED
	PRINCIPAL AMOUNT	SETTLEMENT		APPRECIATION
CURRENCY	COVERED BY CONTRACT	DATE		(DEPRECIATION)
Buys
Euro	7,300,000	Nov 2008	($82,379)
Japanese Yen	1,886,140,000	Nov 2008	215,075
Japanese Yen	1,886,140,000	Nov 2008	210,745
Japanese Yen	1,886,140,000	Nov 2008	223,100
Japanese Yen	1,886,140,000	Nov 2008	215,765
New Zealand Dollar	2,382,619	Nov 2008	(29,937)
New Zealand Dollar	2,382,619	Nov 2008	(27,116)
New Zealand Dollar	2,454,819	Nov 2008	(30,147)
Pound Sterling	5,047,705	Nov 2008	(620,569)
Swedish Krona	102,755,389	Nov 2008	(208,502)
Swedish Krona	102,755,389	Nov 2008	(240,017)
Swedish Krona	102,755,389	Nov 2008	(237,170)
Swedish Krona	102,755,389	Nov 2008	(221,958)
Swiss Franc	28,040,186	Nov 2008	(41,301)
Swiss Franc	34,162,186	Nov 2008	(74,259)
Swiss Franc	28,889,888	Nov 2008	(42,313)
Total			($990,983)
Sells
Australian Dollar	12,344,630	Nov 2008	179,882
Australian Dollar	12,713,404	Nov 2008	180,026
Australian Dollar	12,348,207	Nov 2008	183,459
Canadian Dollar	8,778,697	Nov 2008	22,991
Canadian Dollar	8,525,560	Nov 2008	27,374
Canadian Dollar	8,520,573	Nov 2008	22,387
Danish Kroner	2,104,559	Nov 2008	2,095
Danish Kroner	3,769,276	Nov 2008	177,134
Danish Kroner	2,044,630	Nov 2008	4,003
Danish Kroner	2,043,851	Nov 2008	3,224
Euro	10,498,291	Nov 2008	11,900
Euro	10,199,322	Nov 2008	21,354
Euro	10,187,999	Nov 2008	10,031
Norwegian Krone	2,107,658	Nov 2008	4,463
Norwegian Krone	2,165,928	Nov 2008	(1,000)
Norwegian Krone	2,105,169	Nov 2008	1,974
Pound Sterling	26,037,766	Nov 2008	569,588
Pound Sterling	26,052,467	Nov 2008	584,289
Pound Sterling	26,849,959	Nov 2008	610,017
			$2,615,191

See notes to financial statements

Semiannual report | International Core Fund  21 

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 8-31-08 (unaudited)

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 $1,297,407,552) including $24,940,622
of securities loaned (Note 2)	$1,206,863,635
Investments in affiliated issuers, at value (Cost $26,187,653) (Note 2)	26,187,653
Total investments, at value (Cost $1,323,595,205)	1,233,051,288
Cash	238
Foreign currency, at value (Cost $952,945)	946,484
Cash collateral at broker for futures contracts	12,200,000
Receivable for forward foreign currency exchange contracts (Note 2)	2,615,191
Receivable for fund shares sold	140,348
Receivable for futures variation margin	855,502
Dividends and interest receivable	3,243,303
Receivable from security lending income	157,889
Other assets	42,650
Total assets	1,253,252,893
Liabilities
Payable for forward foreign currency exchange contracts (Note 2)	990,983
Payable for fund shares repurchased	225,673
Payable for security lending income	110,518
Payable upon return of securities loaned (Note 2)	26,187,653
Payable to affiliates
Fund administration fees	17,813
Transfer agent fees	91,747
Distribution and service fees	435
Investment management fees	124,730
Trustees’ fees	63,543
Other payables and accrued expenses	1,164,066
Total liabilities	28,977,161
Net assets
Capital paid-in	$1,205,843,951
Undistributed net investment income	41,222,601
Accumulated undistributed net realized gain on investments,
futures contracts and foreign currency transactions	69,050,893
Net unrealized depreciation on investments, futures and translation of
assets and liabilities in foreign currencies	(91,841,713)
Net assets	$1,224,275,732

See notes to financial statements

22  International Core Fund | Semiannual report 

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	$114,081,838
Shares outstanding	3,169,590
Net asset value and redemption price per share	$35.99
Class B1
Net assets	$15,169,317
Shares outstanding	425,708
Net asset value and offering price	$35.63
Class C1
Net assets	$11,042,588
Shares outstanding	309,939
Net asset value and offering price	$35.63
Class I
Net assets	$1,525,302
Shares outstanding	42,126
Net asset value, offering price and redemption price per share	$36.21
Class R1
Net assets	$133,059
Shares outstanding	3,709
Net asset value, offering price and redemption price per share	$35.87
Class 1
Net assets	$64,502,759
Shares outstanding	1,780,249
Net asset value, offering price and redemption price per share	$36.23
Class NAV
Net assets	$1,017,820,869
Shares outstanding	28,089,581
Net asset value, offering price and redemption price per share	$36.23
Maximum public offering price per share
Class A (net asset value per share ÷ 95%)2	$37.88

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

Semiannual 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 operations For the period 8-31-08 (unaudited)¹

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	$36,523,335
Interest	693,355
Securities lending	813,870
Income from affiliated issuers	285,577
Less foreign taxes withheld	(3,225,608)
Total investment income	35,090,529
Expenses
Investment management fees (Note 3)	6,490,775
Distribution and service fees (Note 3)	371,333
Transfer agent fees (Note 3)	204,595
Blue sky fees (Note 3)	43,790
Fund administration fees (Note 3)	79,392
Audit and legal fees	199,220
Printing and postage fees (Note 3)	36,850
Custodian fees	972,817
Trustees’ fees (Note 3)	94,685
Registration and filing fees	82,522
Miscellaneous	12,156
Total expenses	8,588,135
Less expense reductions (Note 3)	(33,552)
Transfer agent credits (Note 3)	(1,159)
Net expenses	8,553,424
Net investment income	26,537,105
Realized and unrealized gain (loss)
Net realized gain (loss) on
Investments in unaffiliated issuers	57,020,762
Futures contracts	(18,380,926)
Foreign currency transactions	(398,587)
	38,241,249
Change in net unrealized appreciation (depreciation) of
Investments in unaffiliated issuers	(152,776,634)
Futures contracts	10,875,315
Translation of assets and liabilities in foreign currencies	(4,217,306)
	(146,118,625)
Net realized and unrealized gain (loss)	(107,877,376)
Decrease in net assets from operations	($81,340,271)

¹ Semiannual period from 3-1-08 to 8-31-08.

See notes to financial statements

24  International Core Fund | Semiannual report 

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

Statements 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	Period
	ended	ended
	2-29-08	8-31-081
Increase (decrease) in net assets
From operations
Net investment income	$31,797,681	$26,537,105
Net realized gain	159,866,565	38,241,249
Change in net unrealized appreciation (depreciation)	(210,972,387)	(146,118,625)
Increase (decrease) in net assets resulting from operations	(19,308,141)	(81,340,271)
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	(1,180,905)	—
Class NAV	(20,701,580)	—
From net realized gain
Class A	(12,052,892)	—
Class B	(1,960,810)	—
Class C	(1,487,649)	—
Class I	(206,228)	—
Class R1	(10,954)	—
Class 1	(6,868,892)	—
Class NAV	(116,609,468)	—
Total distributions	(162,692,773)	—
From Fund share transactions (Note 5)	495,364,086	(351,042,344)
Total increase (decrease)	313,363,172	(432,382,615)
Net assets
Beginning of period	1,343,295,175	1,656,658,347
End of period	$1,656,658,347	$1,224,275,732
Undistributed net investment income	$14,685,496	$41,222,601

¹ Semiannual period from 3-1-08 to 8-31-08. Unaudited.

See notes to financial statements

Semiannual 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

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	8-31-083
Per share operating performance
Net asset value, beginning of period	$32.60	$36.26	$43.30	$39.06
Net investment income4	0.19	0.63	0.35	0.59
Net realized and unrealized gain
(loss) on investments	3.47	6.79	(0.35)	(3.66)
Total from investment operations	3.66	7.42	—	(3.07)
Less distributions
From net investment income	—	—	(0.45)	—
From net realized gain	—	(0.38)	(3.79)	—
Total distributions	—	(0.38)	(4.24)	—
Net asset value, end of period	$36.26	$43.30	$39.06	$35.99
Total return (%)5,6	11.237	20.488	(0.76)	(7.86)7
Ratios and supplemental data
Net assets, end of period (in millions)	$17	$12	$130	$114
Ratios (as a percentage of average net assets):
Expenses before reductions	2.229	2.23	1.68	1.699
Expenses net of fee waivers	0.559	1.40	1.65	1.699
Expenses net of all fee waivers and credits	0.559	1.40	1.65	1.699
Net investment income	1.239	1.58	0.78	3.019
Portfolio turnover (%)	22	37	5010	24

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 Semiannual period from 3-1-08 to 8-31-08. Unaudited.

⁴ Based on the average of the shares outstanding.

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

⁶ Not annualized.

⁷ Assumes dividend reinvestment and does not reflect the effect of sales charges.

⁸ Class A returns linked back to the Predecessor Fund.

⁹ Annualized.

¹⁰ Excludes merger activity.

See notes to financial statements

26  International Core Fund | Semiannual report 

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	8-31-082
Per share operating performance
Net asset value, beginning of period	$35.92	$43.08	$38.80
Net investment income3	(0.25)	— 4	0.45
Net realized and unrealized gain
(loss) on investments	7.79	(0.33)	(3.62)
Total from investment operations	7.54	(0.33)	(3.17)
Less distributions
From net investment income	—	(0.16)	—
From net realized gain	(0.38)	(3.79)	—
Total distributions	(0.38)	(3.95)	—
Net asset value, end of period	$43.08	$38.80	$35.63
Total return (%)5,6	21.017	(1.48)	(8.17)7
Ratios and supplemental data
Net assets, end of period (in millions)	$1	$20	$15
Ratios (as a percentage of average net assets):
Expenses before reductions	6.838	2.48	2.538
Expenses net of fee waivers	2.398	2.41	2.408
Expenses net of all fee waivers and credits	2.398	2.40	2.408
Net investment income (loss)	(0.84)8	— 9	2.308
Portfolio turnover (%)	37	5010	24

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

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

³ Based on the average of the shares outstanding.

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 Less than 0.01%.

¹⁰ Excludes merger activity.

See notes to financial statements

Semiannual 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 C SHARES
Period ended	2-28-071	2-29-08	8-31-082
Per share operating performance
Net asset value, beginning of period	$35.92	$43.09	$38.81
Net investment income (loss)3	(0.24)	0.13	0.45
Net realized and unrealized gain
(loss) on investments	7.79	(0.46)	(3.63)
Total from investment operations	7.55	(0.33)	(3.18)
Less distributions
From net investment income	—	(0.16)	—
From net realized gain	(0.38)	(3.79)	—
Total distributions	(0.38)	(3.95)	—
Net asset value, end of period	$43.09	$38.81	$35.63
Total return (%)4,5	21.046	(1.48)	(8.19)6
Ratios and supplemental data
Net assets, end of period (in millions)	$4	$15	$11
Ratios (as a percentage of average net assets):
Expenses before reductions	3.727	2.49	2.457
Expenses net of fee waivers	2.397	2.40	2.407
Expenses net of all fee waivers and credits	2.397	2.40	2.407
Net investment income (loss)	(0.79)7	0.28	2.327
Portfolio turnover (%)	37	508	24

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

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

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 Assumes dividend reinvestment.

⁶ Not annualized.

⁷ Annualized.

⁸ Excludes merger activity.

See notes to financial statements

28  International Core Fund | Semiannual report 

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	8-31-082
Per share operating performance
Net asset value, beginning of period	$35.92	$43.43	$39.20
Net investment income3	0.16	0.55	0.69
Net realized and unrealized gain
(loss) on investments	7.73	(0.35)	(3.68)
Total from investment operations	7.89	0.20	(2.99)
Less distributions
From net investment income	—	(0.64)	—
From net realized gain	(0.38)	(3.79)	—
Total distributions	(0.38)	(4.43)	—
Net asset value, end of period	$43.43	$39.20	$36.21
Total return (%)4,5	21.996	(0.33)	(7.63)6
Ratios and supplemental data
Net assets, end of period (in millions)	— 7	$3	$2
Ratios (as a percentage of average net assets):
Expenses before reductions	12.528	2.34	2.188
Expenses net of fee waivers	1.208	1.18	1.188
Expenses net of all fee waivers and credits	1.208	1.18	1.188
Net investment income	0.568	1.24	3.498
Portfolio turnover (%)	37	509	24

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

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

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 Assumes dividend reinvestment.

⁶ Not annualized.

⁷ Less than $500,000.

⁸ Annualized.

⁹ Excludes merger activity.

See notes to financial statements

Semiannual 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 R1 SHARES
Period ended	2-28-071	2-29-08	8-31-08 2
Per share operating performance
Net asset value, beginning of period	$35.92	$43.19	$38.94
Net investment income (loss)3	(0.03)	0.66	0.58
Net realized and unrealized gain
(loss) on investments	7.68	(0.69)	(3.65)
Total from investment operations	7.65	(0.03)	(3.07)
Less distributions
From net investment income	—	(0.43)	—
From net realized gain	(0.38)	(3.79)	—
Total distributions	(0.38)	(4.22)	—
Net asset value, end of period	$43.19	$38.94	$35.87
Total return (%)4,5	21.326	(0.82)	(7.88)6
Ratios and supplemental data
Net assets, end of period (in millions)	— 7	— 7	—7
Ratios (as a percentage of average net assets):
Expenses before reductions	20.408	13.85	12.898
Expenses net of fee waivers	1.948	1.70	1.708
Expenses net of all fee waivers and credits	1.948	1.70	1.708
Net investment income (loss)	(0.10)8	1.48	2.948
Portfolio turnover (%)	37	509	24

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

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

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 Assumes dividend reinvestment.

⁶ Not annualized.

⁷ Less than $500,000.

⁸ Annualized.

⁹ Excludes merger activity.

See notes to financial statements

30  International Core Fund | Semiannual report 

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	8-31-082
Per share operating performance
Net asset value, beginning of period	$40.56	$43.43	$39.22
Net investment income3	0.02	0.95	0.70
Net realized and unrealized gain
(loss) on investments	3.26	(0.72)	(3.69)
Total from investment operations	3.28	0.23	(2.99)
Less distributions
From net investment income	(0.03)	(0.65)	—
From net realized gain	(0.38)	(3.79)	—
Total distributions	(0.41)	(4.44)	—
Net asset value, end of period	$43.43	$39.22	$36.23
Total return (%)4,5	8.116	(0.25)	(7.62)6
Ratios and supplemental data
Net assets, end of period (in millions)	$82	$74	$64
Ratios (as a percentage of average net assets):
Expenses before reductions	1.237	1.16	1.157
Expenses net of fee waivers	1.177	1.14	1.157
Expenses net of all fee waivers and credits	1.177	1.14	1.157
Net investment income	0.167	2.09	3.527
Portfolio turnover (%)	37	508	24

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

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

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 Assumes dividend reinvestment.

⁶ Not annualized.

⁷ Annualized.

⁸ Excludes merger activity.

See notes to financial statements

Semiannual report | International Core Fund  31 

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	8-31-082
Per share operating performance
Net asset value, beginning of period	$39.18	$43.42	$39.21
Net investment income3	0.08	0.95	0.74
Net realized and unrealized gain
(loss) on investments	4.58	(0.70)	(3.72)
Total from investment operations	4.66	0.25	(2.98)
Less distributions
From net investment income	(0.04)	(0.67)	—
From net realized gain	(0.38)	(3.79)	—
Total distributions	(0.42)	(4.46)	—
Net asset value, end of period	$43.42	$39.21	$36.23
Total return (%)4	11.905	(0.20)6	(7.60)
Ratios and supplemental data
Net assets, end of period (in millions)	$1,244	$1,415	$1,018
Ratios (as a percentage of average net assets):
Expenses before reductions	1.087	1.11	1.087
Expenses net of fee waivers	1.087	1.08	1.087
Expenses net of all fee waivers and credits	1.087	1.08	1.087
Net investment income	0.387	2.09	3.737
Portfolio turnover (%)	37	508	24

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

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

³ Based on the average of the shares outstanding.

⁴ Assumes dividend reinvestment.

⁵ Not annualized.

⁶ Total returns would have been lower had certain expenses not been reduced during the periods shown.

⁷ Annualized.

⁸ Excludes merger activity.

See notes to financial statements

32  International Core Fund | Semiannual report 

Notes to financial statements (unaudited)

Note 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 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 Fund is the accounting and performance successor to the GMO International Disciplined Equity Fund (the Predecessor Fund), a diversified 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.

Note 2
Significant accounting policies

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:

Security valuation

The net asset value of Class A, Class B, Class C, Class I, Class 1 and Class R1 shares of the Fund is determined daily as of the close of the

Semiannual report | International Core Fund  33 

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 John Hancock Advisers, LLC (the Adviser), a wholly owned subsidiary of John Hancock Financial Services, Inc., a subsidiary of Manulife Financial Corporation (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 the 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 a Fund investing significant amounts of assets in securities in foreign markets will be fair valued more frequently than a Fund 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 investments 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 that tracks foreign markets in which the Fund has significant investments. If a significant market event occurs due to a change in the value of the index, the pricing for investments in foreign markets that have closed prior to the NYSE will promptly be reviewed and potential adjustments to the net asset value will be recommended to the Fund’s Pricing Committee where applicable.

Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity.

The Fund adopted Statement of Financial Accounting Standards No. 157 (FAS 157), Fair Value Measurements, effective with the beginning of the Fund’s fiscal year. FAS 157 established a three-tier hierarchy to prioritize the assumptions, referred to as inputs, used in valuation techniques to measure fair value. The

34  International Core Fund | Semiannual report 

three-tier hierarchy of inputs is summarized in the three broad levels listed below:

Level 1 – Quoted prices in active markets for identical securities.

Level 2 – Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants would use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.

Level 3 – Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable, such as when there is little or no market activity for an investment, unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors that market participants would use in pricing an investment and would be based on the best information available.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used to value the Fund’s net assets as of August 31, 2008:

	INVESTMENTS IN	OTHER FINANCIAL
VALUATION INPUTS	SECURITIES	INSTRUMENTS*
Level 1 — Quoted Prices	$73,682,251	($3,005,163)
Level 2 — Other Significant Observable Inputs	1,159,369,037	—
Level 3 — Significant Unobservable Inputs	—	—
Total	$1,233,051,288	($3,005,163)

*Other financial instruments are derivative instruments not reflected in the Portfolio of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/ depreciation on the instrument.

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 translation

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.

Semiannual report | International Core Fund  35 

Investment transactions

Investment transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment security transactions are reported on trade date. Interest income is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date net of foreign withholding taxes. Realized gains and losses from investment transactions are recorded on an identified cost basis.

Class allocations

Income, common expenses and realized and unrealized gains (losses) are determined at the fund level and allocated daily to each class of shares based on the appropriate net asset value of the respective classes. Distribution and service fees, if any, and transfer agent fees for Class A, Class B, Class C, Class I, Class R1, Class 1 and Class NAV shares are calculated daily at the class level based on the appropriate net asset value of each class and the specific expense rate(s) applicable to each class.

Guarantees and indemnifications

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

Expenses

The majority of expenses are directly identifiable to an individual fund. Trust expenses that are not readily identifiable to a specific fund are allocated in such a manner as deemed equitable, taking into consideration, among other things, the nature and type of expense and the relative size of the funds.

Line of credit

The Fund has entered into an agreement which enables them to participate in a $150 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 period ended August 31, 2008, there were no borrowings under the line of credit.

Pursuant to the custodian agreement, the Custodian may, in its discretion, advance funds to the Fund to make properly authorized payments. When such payments result in an overdraft, the Fund is obligated to repay the Custodian for any overdraft, including any costs or expenses associated with the overdraft. The Custodian has a lien and security interest in any Fund property to the extent of any overdraft.

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 cash collateral against the loaned securities and maintains the cash 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 cash collateral is delivered to the Fund on the next business day. 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 acce ss to the collateral. The Fund may receive compensation for lending their 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.

36  International Core Fund | Semiannual report 

The Fund has entered into an agreement with Morgan Stanley & Co., Inc. 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) 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).

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 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.

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 August 31, 2008, the Fund entered into forward foreign currency contracts, which contractually obligate the Fund to deliver currencies at future dates.

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.

Semiannual report | International Core Fund  37 

The Fund has adopted the provisions of Financial Accounting Standards Board (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 three years remain subject to examination by the Internal Revenue Service.

Risks associated with foreign investments

Investing in securities issued by companies whose principal business activities are outside the United States may involve significant risks not present in domestic investments. For example, there is generally less publicly available information about foreign companies, particularly those not subject to the disclosure and reporting requirements of the U.S. securities laws. Foreign issuers are generally not bound by uniform accounting, auditing, and financial reporting requirements and standards of practice comparable to those applicable to domestic issuers. Investments in foreign securities also involve the risk of possible adverse changes in investment or exchange control regulations, expropriation or confiscatory taxation, limitation on the removal of funds or other assets of the Fund, political or financial instability or diplomatic and other developments which could affect such investments. Foreign stock markets, while growing in volume and sophistication, are general ly not as developed as those in the United States, and securities of some foreign issuers (particularly those located in developing countries) may be less liquid and more volatile than securities of comparable U.S. companies. In general, there is less overall governmental supervision and regulation of foreign securities markets, broker-dealers and issuers than in the United States.

New accounting pronouncement

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 and interim reporting periods 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. M anagement is currently evaluating the adoption of FAS 161 on the Fund’s financial statement disclosures.

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. The Fund declares income dividends at least annually and capital gains are distributed at least annually. 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.

Such distributions, 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.

Note 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

38  International Core Fund | Semiannual report 

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) 0.88% 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. 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 period ended August 31, 2008, were equivalent to an annual effective rate of 0.87% of the Fund’s average daily net assets.

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 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, 1.18% for Class I, 1.70% for Class R1, 1.15% for Class 1 and 1.12% for Class NAV. Accordingly, the expense reductions or reimbursements related to this agreement were $450, $11,587, $3,304, $9,890, $8,027, $218 and $0 for Class A, Class B, Class C, Class I, Class R1, Class 1 and Class NAV, respectively for the period ended August 31, 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.

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 period ended August 31, 2008, were $79,392 with an annual effective rate of 0.01% of the Fund’s average daily net assets.

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 the 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.

Semiannual report | International Core Fund  39 

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 period ended August 31, 2008.

Class A shares are assessed up-front sales charges. During the period ended August 31, 2008, the Distributor received net up-front sales charges of $28,438 with regard to sales of Class A shares. Of this amount, $3,841 was retained and used for printing prospectuses, advertising, sales literature and other purposes, $23,133 was paid as sales commissions to unrelated broker-dealers and $1,464 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 period ended August 31, 2008, CDSCs received by the Distributor amounted to $10,182 for Class B shares and $1,727 for Class C shares.

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 $16.50 for each Class A, Class B, Class C, Class 1 and 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 period ended August 31, 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 period ended August 31, 2008, the transfer agent fees reductions for Class R1 were $76.

The Fund receives 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 period ended August 31, 2008, the Fund’s transfer agent fees and out-of-pocket expenses were reduced by $1,159 for transfer agent credits earned.

40  International Core Fund | Semiannual report 

Class level expenses including the allocation of the transfer agent fees for the period ended August 31, 2008, were as follows:

	Distribution
	and service	Transfer	Blue	Printing and
Share class	fees	agent fees	sky fees	postage fees
Class A	$195,586	$163,869	$10,703	$23,027
Class B	90,503	27,353	7,896	4,961
Class C	66,787	12,763	9,294	2,346
Class I	—	497	7,914	2,439
Class R1	362	113	7,983	92
Class 1	18,095	—	—	3,985
Total	$371,333	$204,595	$43,790	$36,850

Note 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.

Note 5
Fund share transactions

The listing illustrates the number of Fund shares sold, issued in reorganization, reinvested and repurchased during the year ended February 29, 2008, and the period ended August 31, 2008, along with the corresponding dollar value.

		Year ended 2-29-08	Period ended 8-31-081
	Shares	Amount	Shares	Amount
Class A shares
Sold	1,465,538	$65,700,113	705,390	$27,106,463
Issued in reorganization	2,188,767	102,289,840	—	—
Distributions reinvested	298,965	12,673,075	—	—
Repurchased	(903,245)	(38,268,180)	(865,670)	(33,401,594)
Net increase (decrease)	3,050,025	$142,394,848	(160,280)	($6,295,131)
Class B shares
Sold	111,794	$5,054,286	19,156	$740,056
Issued in reorganization	519,204	24,096,952	—	—
Distributions reinvested	45,949	1,937,144	—	—
Repurchased	(195,340)	(8,566,851)	(97,649)	(3,723,287)
Net increase (decrease)	481,607	$22,521,531	(78,493)	($2,983,231)
Class C shares
Sold	239,764	$11,103,560	16,884	$655,372
Issued in reorganization	123,192	5,718,520	—	—
Distributions reinvested	34,387	1,450,443	—	—
Repurchased	(104,940)	(4,451,373)	(103,431)	(3,995,777)
Net increase (decrease)	292,403	$13,821,150	(86,547)	($3,340,405)
Class I shares
Sold	66,404	$3,070,600	14,164	$564,950
Issued in reorganization	3,865	181,228	—	—
Distributions reinvested	4,834	205,394	—	—
Repurchased	(6,887)	(323,804)	(45,387)	(1,770,919)
Net increase (decrease)	68,216	$3,133,418	(31,223)	($1,205,969)

Semiannual report | International Core Fund  41 

		Year ended 2-29-08	Period ended 8-31-081
	Shares	Amount	Shares	Amount
Class R1 shares
Sold	1,245	$48,556	82	$3,099
Distributions reinvested	289	12,209	—	—
Repurchased	(144)	(5,493)	(608)	(22,876)
Net increase (decrease)	1,390	$55,272	(526)	($19,777)
Class 1 shares
Sold	188,611	$8,598,212	40,020	$1,570,203
Distributions reinvested	189,362	8,049,797	—	—
Repurchased	(376,865)	(16,502,541)	(143,242)	(5,568,427)
Net increase (decrease)	1,108	$145,468	(103,222)	($3,998,224)
Class NAV shares
Sold	6,108,534	$264,764,263	1,704,143	$64,108,893
Distributions reinvested	3,230,848	137,311,048	—	—
Repurchased	(1,895,287)	(88,782,912)	(9,699,205)	(397,308,500)
Net increase (decrease)	7,444,095	$313,292,399	(7,995,062)	($333,199,607)
Net increase (decrease)	11,338,844	$495,364,086	(8,455,353)	($351,042,344)

¹Semiannual period from 3-1-08 to 8-31-08. Unaudited.

The Adviser and other affiliates of John Hancock USA owned 3,090 shares of beneficial interest of Class R1 on August 31, 2008.

Note 6
Purchase and sale 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 period ended August 31, 2008, aggregated $326,116,101 and $647,437,589, respectively.

Note 7
Reorganization

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, $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.

42  International Core Fund | Semiannual report 

Board Consideration of and
Continuation of Investment Advisory
Agreement and Subadvisory
Agreement: John Hancock
International Core Fund

The Investment Company Act of 1940 (the 1940 Act) requires the Board of Trustees (the Board) of John Hancock Funds III (the Trust), including a majority of the Trustees who have no direct or indirect interest in the investment advisory agreement and are not “interested persons” of the Trust, as defined in the 1940 Act (the Independent Trustees), annually to meet in person to review and consider the continuation of: (i) the investment advisory agreement (the Advisory Agreement) with John Hancock Investment Management Services, LLC (the Adviser) and (ii) the investment subadvisory agreement (the Subadvisory Agreement) with Grantham, Mayo, Van Otterloo & Co. LLC (the Subadviser) for the John Hancock International Core Fund (the Fund). The Advisory Agreement and the Subadvisory Agreement are collectively referred to as the Advisory Agreements.

At meetings held on May 5–6 and June 9–10, 2008, the Board considered the factors and reached the conclusions described below relating to the selection of the Adviser and Subadviser and the continuation of the Advisory Agreements. During such meetings, the Board’s Contracts/Operations Committee and the Independent Trustees also met in executive sessions with their independent legal counsel.

In evaluating the Advisory Agreements, the Board, including the Contracts/Operations Committee and its Independent Trustees, reviewed a broad range of information requested for this purpose. This information included:

(i) the investment performance of the Fund relative to a category of relevant funds (the “Category”) and a peer group of comparable funds (the “Peer Group”). The funds within each Category and Peer Group were selected by Morningstar Inc. (“Morningstar”), an independent provider of investment company data. Data covered the period since the Fund’s inception through December 31, 2007,

(ii) advisory and other fees incurred by, and the expense ratios of, the Fund relative to a Category and a Peer Group,

(iii) the advisory fees of comparable portfolios of other clients of the Adviser and the Subadviser,

(iv) the Adviser’s financial results and condition, including its and certain of its affiliates’ profitability from services performed for the Fund,

(v) breakpoints in the Fund’s and the Peer Group’s fees, and information about economies of scale,

(vi) the Adviser’s and Subadviser’s record of compliance with applicable laws and regulations, with the Fund’s investment policies and restrictions, and with the applicable Code of Ethics, and the structure and responsibilities of the Adviser’s and Subadviser’s compliance department,

(vii) the background and experience of senior management and investment professionals, and

(viii) the nature, cost and character of advisory and non-investment management services provided by the Adviser and its affiliates and by the Subadviser.

The Independent Trustees considered the legal advice of independent legal counsel and relied on their own business judgment in determining the factors to be considered in evaluating the materials that were presented to them and the weight to be given to each such factor. The Board’s review and conclusions were based on a comprehensive consideration of all information presented to the Board and not the result of any single controlling factor. The Board principally considered data on performance and other information provided by Morningstar as of December 31, 2007. The Board also considered updated performance information provided to it by the Adviser or Subadviser at its May and June 2008 meetings. Performance and other information may be quite different as of the date of this shareholders report. The

Semiannual report | International Core Fund  43 

key factors considered by the Board and the conclusions reached are described below.

Nature, extent and quality of services

The Board considered the ability of the Adviser and the Subadviser, based on their resources, reputation and other attributes, to attract and retain qualified investment professionals, including research, advisory, and supervisory personnel. The Board considered the investment philosophy, research and investment decision-making processes of the Adviser and Subadviser. The Board considered the Adviser’s execution of its oversight responsibilities. The Board further considered the culture of compliance, resources dedicated to compliance, compliance programs and compliance records of the Adviser and Subadviser. In addition, the Board took into account the administrative and other non-advisory services provided to the Fund by the Adviser and its affiliates.

Based on the above factors, together with those referenced below, the Board concluded that, within the context of its full deliberations, the nature, extent and quality of the investment advisory services provided to the Fund by the Adviser and Subadviser supported renewal of the Advisory Agreements.

Fund performance

The Board noted that the Fund had less than three full years of operational history, and considered the performance results for the Fund since its inception through December 31, 2007. The Board also considered these results in comparison to the performance of the Category, as well as the Fund’s Peer Group and benchmark index. The Board reviewed with representatives of Morningstar the methodology used by Morningstar to select the funds in the Category and the Peer Group.

The Board noted that the Fund’s performance during the 1-year period was lower than the performance its benchmark index, the MSCI EAFE Index, as was the Category and Peer Group medians. The Board viewed favorably that the Fund’s performance was higher than the performance of its Peer Group and Category medians.

Investment advisory fee and subadvisory fee
rates and expenses

The Board reviewed and considered the contractual investment advisory fee rate payable by the Fund to the Adviser for investment advisory services (the Advisory Agreement Rate). The Board received and considered information comparing the Advisory Agreement Rate with the advisory fees for the Peer Group and Category. The Board noted that the Advisory Agreement Rate was not appreciably higher than the median rate of the Peer Group and Category.

The Board received and considered expense information regarding the Fund’s various components, including advisory fees, distribution and fees other than advisory and distribution fees, including transfer agent fees, custodian fees, and other miscellaneous fees (e.g., fees for accounting and legal services). The Board considered comparisons of these expenses to the Peer Group median. The Board also received and considered expense information regarding the Fund’s total operating expense ratio (Gross Expense Ratio) and total operating expense ratio after taking the fee waiver arrangement applicable to the Advisory Agreement Rate into account (Net Expense Ratio). The Board received and considered information comparing the Gross Expense Ratio and Net Expense Ratio of the Fund to that of the Peer Group and Category medians. The Board noted that the Fund’s Gross and Net Expense Ratios were highe r than the medians of the Peer Group and Category.

The Adviser also discussed the Morningstar data and rankings, and other relevant information, for the Fund. Based on the above-referenced considerations and other factors, the Board concluded that the Fund’s overall performance and expenses supported the re-approval of the Advisory Agreements.

The Board also received information about the investment subadvisory fee rate (the Subadvisory Agreement Rate) payable by the Adviser to the Subadviser for investment subadvisory services. The Board concluded that the Subadvisory Agreement Rate was fair and equitable, based on its consideration of the factors described here.

44  International Core Fund | Semiannual report 

Profitability

The Board received and considered a detailed profitability analysis of the Adviser based on the Advisory Agreements, as well as on other relationships between the Fund and the Adviser and its affiliates. The Board also considered a comparison of the Adviser’s profitability to that of other similar investment advisers whose profitability information is publicly available. The Board concluded that, in light of the costs of providing investment management and other services to the Fund, the profits and other ancillary benefits reported by the Adviser were not unreasonable.

The Board did not consider profitability information with respect to the Subadviser, which is not affiliated with the Adviser. The Board considered that the Subadvisory Agreement Rate paid to the Subadviser had been negotiated by the Adviser on an arm’s length basis and that the Subadviser’s separate profitability from its relationship with the Fund was not a material factor in determining whether to renew the agreement.

Economies of scale

The Board received and considered general information regarding economies of scale with respect to the management of the Fund, including the Fund’s ability to appropriately benefit from economies of scale under the Fund’s fee structure. The Board recognized the inherent limitations of any analysis of economies of scale, stemming largely from the Board’s understanding that most of the Adviser’s costs are not specific to individual Funds, but rather are incurred across a variety of products and services.

To the extent the Board and the Adviser were able to identify actual or potential economies of scale from Fund-specific or allocated expenses, in order to ensure that any such economies continue to be reasonably shared with the Fund as its assets increase, the Adviser and the Board agreed to continue the existing breakpoints to the Advisory Agreement Rate.

Information about services to other clients

The Board also received information about the nature, extent and quality of services and fee rates offered by the Adviser and Subadviser to their other clients, including other registered investment companies, institutional investors and separate accounts. The Board concluded that the Advisory Agreement Rate and the Subadvisory Agreement Rate were not unreasonable, taking into account fee rates offered to others by the Adviser and Subadviser, respectively, after giving effect to differences in services.

Other benefits to the Adviser

The Board received information regarding potential “fall-out” or ancillary benefits received by the Adviser and its affiliates and the Subadviser as a result of their relationship with the Fund. Such benefits could include, among others, benefits directly attributable to the relationship of the Adviser and Subadviser with the Fund and benefits potentially derived from an increase in business as a result of their relationship with the Fund (such as the ability to market to shareholders other financial products offered by the Adviser and its affiliates).

The Board also considered the effectiveness of the Adviser’s, Subadviser’s and Fund’s policies and procedures for complying with the requirements of the federal securities laws, including those relating to best execution of portfolio transactions and brokerage allocation.

Other factors and broader review

As discussed above, the Board reviewed detailed materials received from the Adviser and Subadviser as part of the annual re-approval process. The Board also regularly reviews and assesses the quality of the services that the Fund receives throughout the year. In this regard, the Board reviews reports of the Adviser at least quarterly, which include, among other things, fund performance reports and compliance reports. In addition, the Board meets with portfolio managers and senior investment officers at various times throughout the year.

After considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Board concluded that approval of the continuation of the Advisory Agreements for the Fund was in the best interest of the Fund and its shareholders. Accordingly, the Board unanimously approved the continuation of the Advisory Agreements.

Semiannual report | International Core Fund  45 

More information

Trustees	Investment adviser
James F. Carlin, Chairman	John Hancock Investment Management
James R. Boyle†	Services, LLC
William H. Cunningham
Deborah C. Jackson	Subadviser
Charles L. Ladner*	Grantham, Mayo, Van Otterloo & Co. LLC
Stanley Martin*
Dr. John A. Moore*	Principal distributor
Patti McGill Peterson*	John Hancock Funds, LLC
Steven R. Pruchansky
Gregory A. Russo*	Custodian
*Members of the Audit Committee	State Street Bank & Trust Company
†Non-Independent Trustee
	Transfer agent
Officers	John Hancock Signature Services, Inc.
Keith F. Hartstein
President and Chief Executive Officer	Legal counsel
	K&L Gates LLP
Thomas M. Kinzler
Secretary and Chief Legal Officer
Francis V. Knox, Jr.
Chief Compliance Officer
Charles A. Rizzo
Chief Financial Officer
Gordon M. Shone
Treasurer
John G. Vrysen
Chief Operating Officer

Additional information about your fund is available without charge in several ways. As required by the SEC, you can access proxy voting information and quarterly portfolio information on your fund. The proxy voting information includes a description of proxy voting policies, procedures and information regarding how the fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30. The quarterly portfolio information that includes a complete list of the fund’s holdings for the first and third quarters of the fund’s fiscal period is filed on Form N-Q. You have access to this information:

By phone	On the fund’s Website	At the SEC
1-800-225-5291	www.jhfunds.com	www.sec.gov
		1-800-SEC-0330
		SEC Public Reference Room

You can also contact us:
Regular mail	Express mail
John Hancock Signature Services, Inc.	John Hancock Signature Services, Inc.
P.O. Box 9510	Mutual Fund Image Operations
Portsmouth, NH 03802-9510	164 Corporate Drive
	Portsmouth, NH 03801

Month-end portfolio holdings are available at www.jhfunds.com.

46  International Core Fund | Semiannual report 

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 International Core Fund.	660SA 8/08
It is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus.	10/08

A look at performance

		Average annual returns (%)				Cumulative total returns (%)
		with maximum sales charge (POP)				with maximum sales charge (POP)
	Inception				Since	Six				Since
Class	date	1-year	5-year	10-year	inception	months	1-year	5-year	10-year	inception
A1,2	9-16-05	–13.49	—	—	–0.46	0.23	–13.49	—	—	–1.35
B	6-12-06	–14.10	—	—	–2.10	0.12	–14.10	—	—	–4.62
C	6-12-06	–10.48	—	—	–0.74	4.11	–10.48	—	—	–1.65
I3	6-12-06	–8.58	—	—	0.34	5.79	–8.58	—	—	0.76
R13	6-12-06	–8.92	—	—	–0.27	5.46	–8.92	—	—	–0.61
13	6-12-06	–8.54	—	—	0.36	5.74	–8.54	—	—	0.80

Performance figures assume all distributions are reinvested. Public offering price (POP) figures reflect maximum sales charges 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 June 30, 2009. The net expenses are as follows: Class A — 1.54%, Class B — 2.24%, Class C — 2.24%, Class I — 1.14%, Class R1 — 1.64%, Class 1 — 1.09%. Had the fee waivers and expense limitations not been in place, the gross expenses would be as follows: Class A — 1.81%, Class B — 2.61%, Class C — 3.14%, Class I — 12.17%, Class R1 — 15.83%, Class 1 — 1.81%.

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 current to the most recent month end performance data, 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.

6  Growth Opportunities Fund | Semiannual report 

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	$9,830	$9,538	$11,253
C3	6-12-06	9,835	9,835	11,253
I4	6-12-06	10,076	10,076	11,253
R14	6-12-06	9,939	9,939	11,253
14	6-12-06	10,080	10,080	11,253

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 August 31, 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 Index is 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.

Semiannual report | Growth Opportunities Fund  7 

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 March 1, 2008 with the same investment held until August 31, 2008.

	Account value	Ending value	Expenses paid during
	on 3-1-08	on 8-31-08	period ended 8-31-081
Class A	$1,000.00	$1,054.90	$7.98
Class B	1,000.00	1,051.20	11.58
Class C	1,000.00	1,051.10	11.58
Class I	1,000.00	1,057.90	5.45
Class R1	1,000.00	1,054.60	8.49
Class 1	1,000.00	1,057.40	5.55

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 August 31, 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:

8  Growth Opportunities Fund | Semiannual report 

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 March 1, 2008, with the same investment held until August 31, 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 3-1-08	on 8-31-08	period ended 8-31-081
Class A	$1,000.00	$1,017.40	$7.83
Class B	1,000.00	1,013.90	11.37
Class C	1,000.00	1,013.90	11.37
Class I	1,000.00	1,019.90	5.35
Class R1	1,000.00	1,016.90	8.34
Class 1	1,000.00	1,019.80	5.45

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 1.54%, 2.24%, 2.24%, 1.05%, 1.64% and 1.07% 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 the most recent fiscal half-year/365 (to reflect the one-half year period).

Semiannual report | Growth Opportunities Fund  9 

Portfolio summary

Top 10 holdings1
FLIR Systems, Inc.	1.8%	ANSYS, Inc.	1.3%
Urban Outfitters, Inc.	1.5%	Covance, Inc.	1.3%
Cleveland-Cliffs, Inc.	1.5%	Strayer Education, Inc.	1.1%
Walter Industries, Inc.	1.4%	Ross Stores, Inc.	1.1%
Massey Energy Company	1.3%	Bucyrus International, Inc., Class A	1.1%
Sector distribution1,2
Consumer Non-cyclical	25%	Basic Materials	5%
Industrial	22%	Financial	4%
Consumer Cyclical	12%	Communications	4%
Energy	12%	Diversified	1%
Technology	10%	Short-term Investments & Other	5%

¹ As a percentage of net assets on August 31, 2008.

² Sector investing is subject to greater risks than the market as a whole. Because the Fund may focus on particular sectors of the economy, its performance may depend on the performance of those sectors.

10  Growth Opportunities Fund | Semiannual report 

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 8-31-08 (unaudited)

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 96.61%		$83,619,347
(Cost $79,076,471)
Aerospace 1.32%		1,140,392
Integral Systems, Inc. *	4,000	179,960
Orbital Sciences Corp., Class A *	1,800	47,591
Teledyne Technologies, Inc. *	5,800	361,514
Woodward Governor Company	11,900	551,327
Apparel & Textiles 1.16%		1,002,429
Columbia Sportswear Company	400	16,156
Deckers Outdoor Corp. *	2,200	250,118
Gymboree Corp. *	4,000	157,000
Jos. A. Bank Clothiers, Inc. *	1,800	46,782
True Religion Apparel, Inc. *	6,600	179,190
Warnaco Group, Inc. *	4,500	232,065
Wolverine World Wide, Inc.	4,600	121,118
Auto Parts 1.01%		875,941
Autoliv, Inc.	1,000	38,390
BorgWarner, Inc.	4,100	169,535
Exide Technologies *	6,800	83,912
Gentex Corp.	10,800	172,044
LKQ Corp. *	22,000	412,060
Auto Services 0.96%		831,789
Copart, Inc. *	18,900	831,789
Banking 0.50%		431,495
Capitol Federal Financial	3,000	131,160
First Financial Bankshares, Inc.	900	44,163
Greenhill & Company, Inc.	1,000	66,100
Oritani Financial Corp. *	5,200	87,672
WestAmerica Bancorp	2,000	102,400
Biotechnology 2.84%		2,459,590
Acorda Therapeutics, Inc. *	3,600	101,340
Bio-Rad Laboratories, Inc., Class A *	1,700	182,920
Charles River Laboratories International, Inc. *	4,600	301,806
Illumina, Inc. *	9,900	852,687

See notes to financial statements

Semiannual report | Growth Opportunities Fund  11 

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

Issuer	Shares	Value
Biotechnology (continued)
Immucor, Inc. *	4,900	$157,829
Invitrogen Corp. *	4,000	169,840
Martek Biosciences Corp. *	2,500	83,525
Techne Corp. *	7,900	609,643
Broadcasting 0.12%		96,490
World Wrestling Entertainment, Inc., Class A	6,400	104,128
Building Materials & Construction 0.11%		96,490
Quanex Building Products Corp.	3,500	57,610
RPM International, Inc.	1,800	38,880
Business Services 6.32%		5,473,951
Arbitron, Inc.	2,700	129,492
Brinks Company	700	48,846
Corporate Executive Board Company	500	18,200
Dun & Bradstreet Corp.	500	45,985
Exponent, Inc. *	3,100	95,356
EZCORP, Inc., Class A *	1,300	20,267
FactSet Research Systems, Inc.	8,700	545,577
Forrester Research, Inc. *	4,200	145,278
FTI Consulting, Inc. *	11,700	858,780
Global Payments, Inc.	15,300	737,613
Healthcare Services Group, Inc.	8,500	165,580
Hewitt Associates, Inc., Class A *	6,600	265,386
Informatica Corp. *	13,500	227,745
Jacobs Engineering Group, Inc. *	5,500	406,010
Kendle International, Inc. *	1,100	54,395
Navigant Consulting Company *	3,000	51,930
Net 1 UEPS Technologies, Inc. *	4,000	107,280
Pre-Paid Legal Services, Inc. * (a)	2,200	98,208
Quest Software, Inc. *	3,600	53,244
Rollins, Inc.	9,300	165,261
ScanSource, Inc. *	2,700	81,243
SRA International, Inc., Class A *	3,600	84,528
Stanley, Inc. *	2,100	71,526
Syntel, Inc.	10,700	353,849
Total Systems Services, Inc.	14,600	290,832
Watson Wyatt Worldwide, Inc., Class A	6,000	351,540
Cellular Communications 0.09%		74,655
Syniverse Holdings, Inc. *	4,500	74,655
Chemicals 2.47%		2,139,596
Airgas, Inc.	2,800	165,872
Balchem Corp.	4,300	117,347
Calgon Carbon Corp. * (a)	2,800	59,724
CF Industries Holdings, Inc.	600	91,440
FMC Corp.	2,200	161,788

See notes to financial statements

12  Growth Opportunities Fund | Semiannual report 

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

Issuer	Shares	Value
Chemicals (continued)
Intrepid Potash, Inc. *	1,100	$52,096
Newmarket Corp.	4,100	278,554
ShengdaTech, Inc. * (a)	4,100	38,950
Sigma-Aldrich Corp.	2,500	141,900
Terra Industries, Inc.	17,800	894,450
Valhi, Inc. (a)	7,500	137,475
Coal 3.23%		2,792,058
Alpha Natural Resources, Inc. *	6,000	594,600
Foundation Coal Holdings, Inc.	8,400	496,860
International Coal Group, Inc. *	7,400	75,702
James River Coal Company *	5,600	236,152
Massey Energy Company	17,600	1,160,896
Patriot Coal Corp. *	3,800	227,848
Commercial Services 0.19%		166,983
Team, Inc. *	3,300	125,763
TNS, Inc. *	1,800	41,220
Computers & Business Equipment 1.89%		1,635,355
CACI International, Inc., Class A *	900	45,585
IHS, Inc., Class A *	1,400	89,824
Jack Henry & Associates, Inc.	8,100	162,243
MICROS Systems, Inc. *	16,400	505,448
National Instruments Corp.	6,200	200,136
Parametric Technology Corp. *	1,800	36,144
Plexus Corp. *	2,300	64,469
Radiant Systems, Inc. *	5,000	45,600
STEC, Inc. *	4,200	42,546
Stratasys, Inc. *	6,100	101,626
Synaptics, Inc. *	3,300	172,722
Western Digital Corp. *	6,200	169,012
Construction & Mining Equipment 1.29%		1,113,249
Bucyrus International, Inc., Class A	13,100	915,035
Carbo Ceramics, Inc.	1,700	102,170
Rowan Companies, Inc.	2,600	96,044
Construction Materials 0.39%		336,648
Applied Industrial Technologies, Inc.	2,100	61,131
Clarcor, Inc.	6,900	275,517
Containers & Glass 0.29%		249,202
Greif, Inc., Class A	3,000	207,330
Silgan Holdings, Inc.	800	41,872
Cosmetics & Toiletries 0.33%		280,946
Alberto-Culver Company	1,100	28,776
Chattem, Inc. *	2,100	147,252
Intermediate Parfums, Inc.	2,200	31,218
Nu Skin Enterprises, Inc., Class A	4,400	73,700

See notes to financial statements

Semiannual 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
Crude Petroleum & Natural Gas 3.71%		$3,212,648
Arena Resources, Inc. *	9,300	415,431
Bill Barrett Corp. *	900	35,442
Cabot Oil & Gas Corp.	11,200	497,728
Carrizo Oil & Gas, Inc. *	600	29,784
Concho Resources, Inc. *	3,300	107,811
Contango Oil & Gas Company *	3,200	227,584
Goodrich Petroleum Corp. *	600	30,510
Patterson-UTI Energy, Inc.	16,300	463,246
Penn Virginia Corp.	1,200	79,416
Petroquest Energy, Inc. *	4,800	88,752
Quicksilver Resources, Inc. *	4,100	99,179
Unit Corp. *	4,500	304,785
W&T Offshore, Inc.	11,100	390,276
Whiting Petroleum Corp. *	4,600	442,704
Domestic Oil 2.79%		2,410,564
Berry Petroleum Company, Class A	2,700	112,374
Comstock Resources, Inc. *	7,800	506,532
Continental Resources, Inc. *	5,300	265,901
Denbury Resources, Inc. *	18,800	467,932
Encore Aquisition Company *	4,400	226,864
Mariner Energy, Inc. *	4,200	122,178
McMoran Exploration Company *	6,100	166,835
Oil States International, Inc. *	4,400	244,772
Range Resources Corp.	2,900	134,618
St. Mary Land & Exploration Company	2,700	113,994
Williams Clayton Energy, Inc. *	600	48,564
Drugs & Health Care 3.18%		2,750,255
Abaxis, Inc. *	2,200	43,758
Abiomed, Inc. *	5,900	106,318
BioMarin Pharmaceutical, Inc. *	6,800	204,952
Datascope Corp.	1,200	60,000
ImClone Systems, Inc. *	1,600	103,040
Landauer, Inc.	2,200	143,572
Luminex Corp. *	6,800	173,332
Meridian Bioscience, Inc.	19,000	539,980
Parexel International Corp. *	5,800	184,266
Perrigo Company	25,400	888,746
Savient Pharmaceuticals, Inc. *	10,700	243,211
Vital Signs, Inc.	800	59,080
Educational Services 1.74%		1,504,273
Capella Education Company *	1,800	89,478
DeVry, Inc.	4,000	206,320
ITT Educational Services, Inc. *	1,900	168,929

See notes to financial statements

14  Growth Opportunities Fund | Semiannual report 

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

Issuer	Shares	Value
Educational Services (continued)
Renaissance Learning, Inc.	4,200	$53,298
Strayer Education, Inc.	4,700	986,248
Electrical Equipment 2.77%		2,397,529
AMETEK, Inc.	9,300	451,422
AZZ, Inc. *	1,600	69,520
FLIR Systems, Inc. *	43,500	1,552,950
GrafTech International, Ltd. *	2,700	54,864
Powell Industries, Inc. *	600	26,508
Universal Electronics, Inc. *	4,500	117,990
Varian, Inc. *	2,500	124,275
Electronics 1.57%		1,362,075
Axsys Technologies, Inc. *	1,300	88,309
Dolby Laboratories, Inc., Class A *	3,800	154,660
II-VI, Inc. *	7,500	329,325
Itron, Inc. *	1,600	165,728
Trimble Navigation, Ltd. *	15,300	517,905
Zebra Technologies Corp., Class A *	3,400	106,148
Energy 0.98%		848,561
Energen Corp.	1,600	89,344
Energy Conversion Devices, Inc. *	10,100	759,217
Financial Services 3.38%		2,927,934
Bankrate, Inc. * (a)	1,200	38,712
Broadridge Financial Solutions, Inc.	2,100	41,937
Cass Information Systems, Inc.	1,000	36,420
Cohen & Steers, Inc. (a)	2,400	69,840
Eaton Vance Corp.	18,200	649,922
Federated Investors, Inc., Class B	12,700	424,688
GAMCO Investors, Inc.	1,500	71,100
Interactive Data Corp.	5,300	159,530
Investment Technology Group, Inc. *	1,900	60,800
Knight Capital Group, Inc. *	7,200	124,128
optionsXpress Holdings, Inc.	4,700	108,429
SEI Investments Company	20,000	472,400
Waddell & Reed Financial, Inc., Class A	17,900	576,380
World Acceptance Corp. *	2,400	93,648
Food & Beverages 1.34%		1,161,440
Cal-Maine Foods, Inc. (a)	7,600	300,124
Flowers Foods, Inc.	15,300	404,532
Green Mountain Coffee Roasters, Inc. * (a)	4,900	178,801
J & J Snack Foods Corp.	1,200	40,428
M & F Worldwide Corp. *	1,100	48,422
McCormick & Company, Inc.	2,100	84,945
National Beverage Corp. *	3,900	35,568
Sanderson Farms, Inc. (a)	2,000	68,620

See notes to financial statements

Semiannual 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
Funeral Services 0.21%		$180,728
Hillenbrand, Inc.	7,600	180,728
Healthcare Products  5.30%		4,590,113
ArthroCare Corp. * (a)	3,600	92,304
Beckman Coulter, Inc.	2,000	147,640
Bruker BioSciences Corp. *	3,300	50,952
CardioNet, Inc. *	2,300	70,150
Cyberonics, Inc. *	5,300	113,685
DENTSPLY International, Inc.	4,700	184,193
Edwards Lifesciences Corp. *	7,500	444,075
Gen-Probe, Inc. *	3,500	209,125
Haemonetics Corp. *	3,000	188,160
Henry Schein, Inc. *	5,400	315,792
Herbalife, Ltd.	3,400	160,140
IDEXX Laboratories, Inc. *	9,800	551,740
Intuitive Surgical, Inc. *	1,600	472,432
Kensey Nash Corp. *	2,300	82,823
Merit Medical Systems, Inc. *	7,400	143,264
Natus Medical, Inc. *	3,400	83,640
Owens & Minor, Inc.	6,700	309,004
Patterson Companies, Inc. *	11,200	364,448
ResMed, Inc. *	1,400	65,520
STERIS Corp.	5,700	209,589
SurModics, Inc. * (a)	1,900	74,043
The Medicines Company *	4,600	112,056
USANA Health Sciences, Inc. *	900	34,074
Zoll Medical Corp. *	3,200	111,264
Healthcare Services 2.79%		2,415,697
Amedisys, Inc. *	6,600	351,252
CorVel Corp. *	3,600	104,796
Covance, Inc. *	11,500	1,084,910
Emergency Medical Services Corp., Class A *	2,100	69,888
Healthextras, Inc. *	3,200	104,320
Healthways, Inc. *	3,400	64,770
Hill-Rom Holdings, Inc.	1,600	47,904
Lincare Holdings, Inc. *	1,700	56,100
National Healthcare Corp.	800	39,776
Pediatrix Medical Group, Inc. *	6,400	364,480
The Advisory Board Company *	3,100	95,821
Weight Watchers International, Inc.	800	31,680
Homebuilders 1.46%		1,260,413
NVR, Inc. *	100	59,773
Walter Industries, Inc.	12,800	1,200,640

See notes to financial statements

16  Growth Opportunities Fund | Semiannual report 

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

Issuer	Shares	Value
Hotels & Restaurants 1.06%		$914,860
Chipotle Mexican Grill, Inc. *	700	45,549
Choice Hotels International, Inc.	7,000	188,930
Jack in the Box, Inc. *	6,400	151,872
P.F. Chang’s China Bistro, Inc. *	1,900	49,362
Panera Bread Company, Class A *	6,100	327,814
Papa John’s International, Inc. *	3,500	97,720
Sonic Corp. *	3,700	53,613
Household Products 0.97%		841,735
Church & Dwight, Inc.	7,500	468,750
Tupperware Brands Corp.	8,000	285,760
WD-40 Company	2,500	87,225
Industrial Machinery 5.09%		4,401,215
AGCO Corp. *	800	49,304
Badger Meter, Inc. (a)	3,300	151,932
Chart Industries, Inc. *	1,800	83,124
Circor International, Inc.	800	48,208
Dionex Corp. *	3,200	208,608
Donaldson Company, Inc.	10,600	465,446
Flowserve Corp.	5,400	713,448
FMC Technologies, Inc. *	6,300	337,428
Gorman-Rupp Company	5,000	201,150
Graco, Inc.	6,900	263,235
IDEX Corp.	3,000	111,210
Lincoln Electric Holdings, Inc.	2,100	169,617
Lindsay Corp.	5,100	417,741
Lufkin Industries, Inc.	1,800	167,022
Middleby Corp. *	1,900	101,384
Pall Corp.	5,200	211,172
Robbins & Myers, Inc.	1,500	67,275
Rofin-Sinar Technologies, Inc. *	4,900	198,058
Sauer-Danfoss, Inc.	1,900	62,263
Valmont Industries, Inc.	3,500	373,590
Industrials 0.57%		492,136
Clean Harbors, Inc. *	3,600	292,104
Harsco Corp.	3,800	200,032
Insurance 0.40%		345,221
Brown & Brown, Inc.	1,100	22,352
Erie Indemnity Company, Class A	600	27,750
HCC Insurance Holdings, Inc.	900	22,662
PartnerRe, Ltd.	400	27,564
Philadelphia Consolidated Holding Corp. *	4,100	244,893

See notes to financial statements

Semiannual 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
International Oil 0.11%		$98,500
BPZ Energy, Inc. *	5,000	98,500
Internet Content 1.01%		873,480
Sohu.com, Inc. *	11,600	873,480
Internet Retail 1.25%		1,080,368
1-800-Flowers.com, Inc. *	7,100	43,594
Netflix, Inc. *	9,800	302,232
Priceline.com, Inc. *	7,900	734,542
Internet Service Provider 0.02%		20,504
Earthlink, Inc. *	2,200	20,504
Internet Software 0.55%		474,497
Digital River, Inc. *	2,900	126,875
eResearch Technology, Inc. *	9,400	126,806
McAfee, Inc. *	1,900	75,164
Salesforce.com, Inc. *	2,600	145,652
Leisure Time 0.35%		303,183
Bally Technologies, Inc. *	4,200	143,766
Polaris Industries, Inc. (a)	1,300	58,617
WMS Industries, Inc. *	3,000	100,800
Life Sciences 1.24%		1,075,764
American Ecology Corp.	4,700	152,562
Dawson Geophysical Company *	600	37,638
PerkinElmer, Inc.	900	25,569
Pharmaceutical Product Development, Inc.	17,900	730,320
Waters Corp. *	1,900	129,675
Liquor 0.96%		826,779
Boston Beer Company, Inc. *	5,300	238,341
Central European Distribution Corp. *	10,200	588,438
Manufacturing 2.25%		1,947,887
Acuity Brands, Inc.	2,100	91,371
AptarGroup, Inc.	2,200	88,858
Ceradyne, Inc. *	600	27,036
Colfax Corp. *	1,400	34,426
ESCO Technologies, Inc. *	2,200	104,742
Koppers Holdings, Inc.	800	36,648
Lancaster Colony Corp.	1,700	59,126
Mettler-Toledo International, Inc. *	6,700	704,840
Mine Safety Appliances Company	3,200	116,256
Nordson Corp.	4,600	246,698
Polypore International, Inc. *	6,400	175,552
Raven Industries, Inc.	5,800	262,334

See notes to financial statements

18  Growth Opportunities Fund | Semiannual report 

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

Issuer	Shares	Value
Medical-Hospitals 0.31%		$270,993
Centene Corp. *	1,700	38,386
Exactech, Inc. *	2,000	51,740
Tenet Healthcare Corp. *	17,700	106,731
Universal Health Services, Inc., Class B	1,200	74,136
Metal & Metal Products 0.55%		479,011
Dynamic Materials Corp.	3,200	98,464
L.B. Foster Company *	1,200	46,272
Matthews International Corp., Class A	5,400	271,404
Sun Hydraulics, Inc.	1,900	62,871
Mining 1.65%		1,431,357
Cleveland-Cliffs, Inc.	12,600	1,275,372
Compass Minerals International, Inc.	1,400	96,978
Royal Gold, Inc. (a)	1,700	59,007
Mobile Homes 0.06%		55,152
Thor Industries, Inc. (a)	2,400	55,152
Petroleum Services 2.05%		1,774,620
Atwood Oceanics, Inc. *	9,200	374,072
Hercules Offshore, Inc. *	1,700	37,519
Oceaneering International, Inc. *	8,300	518,003
PetroHawk Energy Corp. *	9,400	325,334
Petroleum Development Corp. *	1,600	97,264
RPC, Inc.	5,600	102,088
Superior Energy Services, Inc. *	4,000	188,160
T-3 Energy Services, Inc. *	1,700	94,911
Willbros Group, Inc. *	900	37,269
Pharmaceuticals 0.83%		715,227
Auxilium Pharmaceuticals, Inc. *	8,400	330,204
Endo Pharmaceutical Holdings, Inc. *	1,250	28,400
Isis Pharmaceuticals, Inc. *	2,800	49,504
Rigel Pharmaceuticals, Inc. *	4,700	111,202
Valeant Pharmaceuticals International *	10,700	195,917
Publishing 0.25%		214,110
John Wiley & Sons, Inc., Class A	4,500	214,110
Railroads & Equipment 0.81%		699,251
Genesee & Wyoming, Inc., Class A *	3,000	129,030
Kansas City Southern *	5,000	257,150
Wabtec Corp.	5,300	313,071
Real Estate 0.59%		510,920
Essex Property Trust, Inc., REIT	500	58,675
Health Care, Inc., REIT	2,500	129,675
Home Properties, Inc., REIT	2,200	116,050
Nationwide Health Properties, Inc., REIT	6,000	206,520

See notes to financial statements

Semiannual 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
Retail Grocery 0.11%		$95,530
Arden Group, Inc.	400	66,700
United Natural Foods, Inc. *	1,500	28,830
Retail Trade 6.30%		5,451,370
Aaron Rents, Inc., Class B	1,100	31,416
Advance Auto Parts, Inc.	10,450	449,768
Aeropostale, Inc. *	17,600	613,536
Big Lots, Inc. *	8,600	254,302
Cash America International, Inc.	3,700	153,143
Children’s Place Retail Stores, Inc. *	2,800	117,460
Dollar Tree, Inc. *	7,300	280,028
Family Dollar Stores, Inc.	2,900	72,268
Finish Line, Inc.	7,400	89,466
Fossil, Inc. *	9,500	284,240
MSC Industrial Direct Company, Inc., Class A	8,500	432,905
Ross Stores, Inc.	23,900	961,019
The Buckle, Inc.	6,050	314,177
Titan Machinery, Inc. *	3,200	83,264
Urban Outfitters, Inc. *	36,900	1,314,378
Sanitary Services 1.02%		883,252
Darling International, Inc. *	16,300	223,799
Stericycle, Inc. *	9,100	539,630
Waste Connections, Inc. *	3,300	119,823
Semiconductors 1.91%		1,656,387
Cree, Inc. *	6,000	139,860
Hittite Microwave Corp. *	1,100	38,929
IXYS Corp. *	5,700	72,561
Micrel, Inc.	11,400	104,994
Microsemi Corp. *	6,400	176,000
Netlogic Microsystems, Inc. *	2,000	69,460
Novellus Systems, Inc. *	1,400	31,738
Power Integrations, Inc. *	1,600	47,088
QLogic Corp. *	18,400	343,712
Rambus, Inc. *	1,800	31,662
Semtech Corp. *	7,600	112,404
Silicon Image, Inc. *	14,900	103,257
Silicon Laboratories, Inc. *	3,600	121,356
Skyworks Solutions, Inc. *	13,700	132,890
Volterra Semiconductor Corp. *	8,300	130,476
Software 3.74%		3,239,023
ANSYS, Inc. *	24,786	1,099,259
Blackbaud, Inc.	6,000	121,140
Compuware Corp. *	6,800	77,724
Concur Technologies, Inc. *	5,800	254,910

See notes to financial statements

20  Growth Opportunities Fund | Semiannual report 

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

Issuer	Shares	Value
Software (continued)
FARO Technologies, Inc. *	2,900	$68,498
ManTech International Corp. *	8,800	518,232
MSCI, Inc. *	1,300	38,805
Pegasystems, Inc.	6,200	90,892
Progress Software Corp. *	3,000	87,630
Quality Systems, Inc.	2,200	94,204
Solera Holdings, Inc. *	8,700	268,221
Sybase, Inc. *	12,400	426,684
Websense, Inc. *	4,100	92,824
Steel 0.69%		601,143
AK Steel Holding Corp.	5,800	305,138
Olympic Steel, Inc.	1,300	61,893
Schnitzer Steel Industries, Inc.	700	47,887
Steel Dynamics, Inc.	7,500	186,225
Telecommunications Equipment & Services 0.32%		275,321
ADTRAN, Inc.	3,100	70,680
Atheros Communications, Inc. *	1,500	48,915
InterDigital, Inc. *	1,100	29,194
J2 Global Communications, Inc. *	2,800	69,076
Premiere Global Services, Inc. *	3,800	57,456
Toys, Amusements & Sporting Goods 0.76%		659,701
Hasbro, Inc.	6,500	243,100
Marvel Entertainment, Inc. *	12,300	416,601
Transportation 1.32%		1,139,380
Con-way, Inc.	1,400	68,740
Frontline, Ltd.	8,500	513,485
Genco Shipping & Trading, Ltd.	600	37,644
Golar LNG, Ltd. (a)	2,400	38,496
Kirby Corp. *	5,500	251,845
Knightsbridge Tankers, Ltd.	2,200	63,756
Pacer International, Inc.	2,800	59,024
PHI, Inc. *	1,000	38,410
Ship Finance International, Ltd.	1,300	36,179
TBS International, Ltd. *	1,100	31,801
Trucking & Freight 1.78%		1,544,343
Forward Air Corp.	3,500	123,515
Heartland Express, Inc.	5,700	94,164
Hub Group, Inc., Class A *	3,300	131,802
J.B. Hunt Transport Services, Inc.	16,900	616,005
Knight Transportation, Inc.	2,300	41,147
Landstar Systems, Inc.	7,000	343,140
Old Dominion Freight Lines, Inc. *	1,000	33,270
Ryder Systems, Inc.	2,500	161,300

See notes to financial statements

Semiannual report | Growth Opportunities Fund  21 

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 1.24%		$1,071,718
(Cost $1,071,718)
John Hancock Cash Investment Trust, 2.5657% (c)(f)	$1,071,718	1,071,718
Repurchase agreements 3.29%		$2,851,000
(Cost $2,851,000)
Repurchase Agreement with State Street Corp. dated 08/29/2008
at 1.70% to be repurchased at $2,851,539 on 09/02/2008,
collateralized by $2,945,000 Federal Home Loan Bank, 5.70% due
04/03/2028 (valued at $2,908,188, including interest)	$2,851,000	2,851,000
Total investments (Cost $82,999,189)† 101.14%		$87,542,065
Liabilities in Excess of Other Assets (1.14)%		(986,165)
Total net assets 100.00%		$86,555,900

 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) The investment is an affiliate of the Fund, the adviser and/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 August 31, 2008, the aggregate cost of investment securities for federal income tax purposes was $83,484,667. Net unrealized appreciation aggregated $4,507,398, of which $7,217,945 related to appreciated investment securities and $3,160,547 related to depreciated investment securities.

The Fund had the following financial futures contracts open on August 31, 2008:

	NUMBER OF			NOTIONAL	UNREALIZED
OPEN CONTRACTS	CONTRACTS	POSITION	EXPIRATION	VALUE	APPRECIATION
Russell 2000 Mini Index Futures	12	Long	Sep 2008	$887,800	$42,998
S&P Mid 400 E-mini Index Futures	11	Long	Sep 2008	897,600	20,532
					$63,530

See notes to financial statements

22  Growth Opportunities Fund | Semiannual report 

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 8-31-08 (unaudited)

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 $81,927,471) including
$1,050,704 of securities loaned (Note 2)	$86,470,347
Investments in affiliated issuers, at value (Cost $1,071,718)	1,071,718
Total investments, at value (Cost $82,999,189)	87,542,065
Cash	814
Cash collateral at broker for futures contracts	118,400
Receivable for investments sold	2,725,091
Receivable for fund shares sold	17,021
Dividends and interest receivable	29,851
Receivable for security lending income	255
Other assets	34,618
Total assets	90,468,115
Liabilities
Payable for investments purchased	2,575,174
Payable for fund shares repurchased	47,680
Payable upon return of securities loaned (Note 2)	1,071,718
Payable for futures variation margin	14,040
Payable to affiliates
Fund administration fees	1,030
Transfer agent fees	49,815
Distribution and service fees	259
Investment management fees	17,666
Trustees’ fees	2,786
Other payables and accrued expenses	132,047
Total liabilities	3,912,215
Net assets
Capital paid-in	$135,166,501
Accumulated net investment loss	(398,785)
Accumulated undistributed net realized loss on investments
and futures contracts	(52,818,222)
Net unrealized appreciation on investments and futures contracts	4,606,406
Net assets	$86,555,900

See notes to financial statements

Semiannual report | Growth Opportunities Fund  23 

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	$72,115,470
Shares outstanding	3,293,340
Net asset value and redemption price per share	$21.90
Class B1
Net assets	$10,827,262
Shares outstanding	501,872
Net asset value and offering price	$21.57
Class C1
Net assets	$2,445,414
Shares outstanding	113,336
Net asset value and offering price	$21.58
Class I
Net assets	$13,879
Shares outstanding	628
Net asset value, offering price and redemption price per share	$22.112
Class R1
Net assets	$128,653
Shares outstanding	5,900
Net asset value, offering price and redemption price per share	$21.81
Class 1
Net assets	$1,025,222
Shares outstanding	46,343
Net asset value, offering price and redemption price per share	$22.12
Maximum public offering price per share
Class A (net asset value per share ÷ 95%)3	$23.05

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 August 31, 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

24  Growth Opportunities Fund | Semiannual 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 period ended 8-31-08 (unaudited)¹

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	$239,948
Securities lending	40,570
Income from affiliated issuers	31,248
Interest	20,634
Total investment income	332,400
Expenses
Investment management fees (Note 3)	354,663
Distribution and service fees (Note 3)	182,279
Transfer agent fees (Note 3)	88,971
Fund administration fees (Note 3)	4,674
Custodian fees	62,921
Blue sky fees (Note 3)	38,685
Audit and legal fees	28,696
Printing and postage fees (Note 3)	21,161
Registration and filing fees	14,293
Trustees’ fees (Note 4)	4,169
Miscellaneous	964
Total expenses	801,476
Less: expense reductions (Note 3)	(69,248)
Less: transfer agency credits (Note 3)	(1,043)
Net expenses	731,185
Net investment loss	(398,785)
Realized and unrealized gain (loss)
Net realized gain (loss) on
Investments in unaffiliated issuers	(5,277,228)
Futures contracts	73,144
	(5,204,084)
Change in net unrealized appreciation (depreciation) of
Investments in unaffiliated issuers	10,154,719
Futures contracts	89,955
	10,244,674
Net realized and unrealized gain	5,040,590
Increase in net assets from operations	$4,641,805

¹ Semiannual period from 3-1-08 to 8-31-08.

See notes to financial statements

Semiannual report | Growth Opportunities Fund  25 

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

Statements 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	Period
	ended	ended
	2-29-08	8-31-081
Increase (decrease) in net assets
From operations
Net investment loss	($651,411)	($398,785)
Net realized gain (loss)	5,796,627	(5,204,084)
Change in net unrealized appreciation (depreciation)	(27,290,245)	10,244,674
Increase (decrease) in net assets resulting from operations	(22,145,029)	4,641,805
Distributions to shareholders
From net realized gain
Class A	(17,472)	—
Class B	(3,315)	—
Class C	(663)	—
Class I	(7)	—
Class R1	(26)	—
Class 1	(69)	—
Total distributions	(21,552)	—
From Fund share transactions (Note 5)	102,847,160	(5,595,615)
Total increase (decrease)	80,680,579	(953,810)
Net assets
Beginning of period	6,829,131	87,509,710
End of period	$87,509,710	$86,555,900
Accumulated net investment loss	—	$398,785

¹ Semiannual period from 3-1-08 to 8-31-08. Unaudited.

See notes to financial statements

26  Growth Opportunities Fund | Semiannual report 

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	8-31-083
Per share operating performance
Net asset value, beginning of period	$21.31	$23.29	$24.34	$20.76
Net investment income (loss)4	0.04	(0.07)5	(0.15)	(0.09)
Net realized and unrealized
gain (loss) on investments	1.94	1.36	(3.43)	1.23
Total from investment operations	1.98	1.29	(3.58)	1.14
Less distributions
From net realized gain	—	(0.24)	— 6	—
Net asset value, end of period	$23.29	$24.34	$20.76	$21.90
Total return (%)7,8	9.299	5.5710	(14.69)	5.499
Ratios and supplemental data
Net assets, end of period (in millions)	$2	$5	$72	$72
Ratios (as a percentage of average net assets):
Expenses before reductions	5.4511	5.59	1.81	1.6311
Expenses net of fee waivers	0.4811	1.32	1.55	1.5411
Expenses net of all fee waivers and credits	0.4811	1.32	1.54	1.5411
Net investment income (loss)	0.4111	(0.34)5	(0.64)	(0.79)11
Portfolio turnover (%)	43	96	26212	80

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 Semiannual period from 3-1-08 to 8-31-08. Unaudited.

⁴ Based on the average of the shares outstanding.

⁵ 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.

⁶ Less than $0.01 per share.

⁷ Total returns would have been lower had certain expenses not been reduced during the periods shown..

⁸ Assumes dividend reinvestment and does not reflect the effect of sales charges.

⁹ Not annualized.

¹⁰ Class A returns linked back to the Predecessor Fund.

¹¹ Annualized.

¹² Excludes merger activity.

See notes to financial statements

Semiannual 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 B SHARES
Period ended	2-28-071	2-29-08	8-31-082
Per share operating performance
Net asset value, beginning of period	$22.17	$24.23	$20.52
Net investment loss3	(0.20)4	(0.31)	(0.16)
Net realized and unrealized gain
(loss) on investments	2.50	(3.40)	1.21
Total from investment operations	2.30	(3.71)	1.05
Less distributions
From net realized gain	(0.24)	—5	—
Net asset value, end of period	$24.23	$20.52	$21.57
Total return (%)6,7	10.408	(15.29)	5.128
Ratios and supplemental data
Net assets, end of period (in millions)	—9	$13	$11
Ratios (as a percentage of average net assets):
Expenses before reductions	14.6210	2.61	2.4510
Expenses net of fee waivers	2.2210	2.25	2.2410
Expenses net of all fee waivers and credits	2.2210	2.24	2.2410
Net investment loss	(1.21)4,10	(1.34)	(1.49)10
Portfolio turnover (%)	96	26211	80

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

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

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 $0.02 per share and 0.11% 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 Assumes dividend reinvestment.

⁸ Not annualized.

⁹ Less than $500,000.

¹⁰ Annualized.

¹¹ Excludes merger activity.

See notes to financial statements

28  Growth Opportunities Fund | Semiannual report 

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	8-31-082
Per share operating performance
Net asset value, beginning of period	$22.17	$24.23	$20.53
Net investment loss3	(0.19)4	(0.32)	(0.16)
Net realized and unrealized
gain (loss) on investments	2.49	(3.38)	1.21
Total from investment operations	2.30	(3.70)	1.05
Less distributions
From net realized gain	(0.24)	—5	—
Net asset value, end of period	$24.23	$20.53	$21.58
Total return (%)6,7	10.408	(15.25)	5.118
Ratios and supplemental data
Net assets, end of period (in millions)	$1	$3	$2
Ratios (as a percentage of average net assets):
Expenses before reductions	10.439	3.14	2.919
Expenses net of fee waivers	2.229	2.25	2.249
Expenses net of all fee waivers and credits	2.229	2.24	2.249
Net investment loss	(1.15)4,9	(1.35)	(1.49)9
Portfolio turnover (%)	96	26210	80

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

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

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 0.11% 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 Assumes dividend reinvestment.

⁸ Not annualized.

⁹ Annualized.

¹⁰ Excludes merger activity.

See notes to financial statements

Semiannual 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 I SHARES
Period ended	2-28-071	2-29-08	8-31-082
Per share operating performance
Net asset value, beginning of period	$22.17	$24.41	$20.90
Net investment loss3	(0.02)4	(0.07)	(0.03)
Net realized and unrealized
gain (loss) on investments	2.50	(3.44)	1.24
Total from investment operations	2.48	(3.51)	1.21
Less distributions
From net realized gain	(0.24)	— 5	—
Net asset value, end of period	$24.41	$20.90	$22.11
Total return (%)6,7	11.228	(14.36)	5.798
Ratios and supplemental data
Net assets, end of period (in millions)	— 9	— 9	— 9
Ratios (as a percentage of average net assets):
Expenses before reductions	16.2610	12.17	116.9110
Expenses net of fee waivers	1.1310	1.04	1.0510
Expenses net of all fee waivers and credits	1.1310	1.04	1.0510
Net investment loss	(0.10)4,10	(0.30)	(0.31)10
Portfolio turnover (%)	96	26211	80

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

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

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 0.11% 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 Assumes dividend reinvestment.

⁸ Not annualized.

⁹ Less than $500,000.

¹⁰ Annualized.

¹¹ Excludes merger activity.

See notes to financial statements

30  Growth Opportunities Fund | Semiannual report 

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	8-31-082
Per share operating performance
Net asset value, beginning of period	$22.17	$24.27	$20.68
Net investment loss3	(0.14)4	(0.19)	(0.10)
Net realized and unrealized
gain (loss) on investments	2.48	(3.40)	1.23
Total from investment operations	2.34	(3.59)	1.13
Less distributions
From net realized gain	(0.24)	— 5	—
Net asset value, end of period	$24.27	$20.68	$21.81
Total return (%)6,7	10.588	(14.77)	5.468
Ratios and supplemental data
Net assets, end of period (in millions)	— 9	— 9	— 9
Ratios (as a percentage of average net assets):
Expenses before reductions	24.2010	15.83	14.2210
Expenses net of fee waivers	1.8810	1.64	1.6410
Expenses net of all fee waivers and credits	1.8810	1.64	1.6410
Net investment loss	(0.86)4,10	(0.78)	(0.89)10
Portfolio turnover (%)	96	26211	80

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

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

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 $0.02 per share and 0.11% 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 Assumes dividend reinvestment.

⁸ Not annualized.

⁹ Less than $500,000.

¹⁰ Annualized.

¹¹ Excludes merger activity.

See notes to financial statements

Semiannual report | Growth 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 1 SHARES
Period ended	2-28-071	2-29-08	8-31-082
Per share operating performance
Net asset value, beginning of period	$22.17	$24.42	$20.92
Net investment loss3	(0.02)4	(0.05)	(0.04)
Net realized and unrealized
gain (loss) on investments	2.51	(3.45)	1.24
Total from investment operations	2.49	(3.50)	1.20
Less distributions
From net realized gain	(0.24)	— 5	—
Net asset value, end of period	$24.42	$20.92	$22.12
Total return (%)6,7	11.268	(14.31)	5.748
Ratios and supplemental data
Net assets, end of period (in millions)	— 9	$1	$1
Ratios (as a percentage of average net assets):
Expenses before reductions	3.8110	1.81	1.1010
Expenses net of fee waivers	1.0910	1.09	1.0710
Expenses net of all fee waivers and credits	1.0910	1.09	1.0710
Net investment loss	(0.10)4,10	(0.22)	(0.33)10
Portfolio turnover (%)	96	26211	80

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

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

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 $0.02 per share and 0.10% 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 Assumes dividend reinvestment.

⁸ Not annualized.

⁹ Less than $500,000.

¹⁰ Annualized.

¹¹ Excludes merger activity.

See notes to financial statements

32  Growth Opportunities Fund | Semiannual report 

Notes to financial statements (unaudited)

Note 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 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.

Note 2
Significant accounting policies

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:

Security valuation

The net asset value of Class A, Class B, Class C, Class I, Class R1 and Class 1 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,

Semiannual report | Growth Opportunities Fund  33 

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 John Hancock Advisers, LLC (the Adviser), a wholly owned subsidiary of John Hancock Financial Services, Inc., a subsidiary of Manulife Financial Corporation (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 val ued 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 the 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 a Fund investing significant amounts of assets in securities in foreign markets will be fair valued more frequently than a Fund 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 investments 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 that tracks foreign markets in which the Fund has significant investments. If a significant market event occurs due to a change in the value of the index, the pricing for investments in foreign markets that have closed prior to the NYSE will promptly be reviewed and potential adjustments to the net asset value will be recommended to the Fund’s Pricing Committee where applicable.

Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity.

The Fund adopted Statement of Financial Accounting Standards No. 157 (FAS 157), Fair Value Measurements, effective with the beginning of the Fund’s fiscal year. FAS 157 established a three-tier hierarchy to prioritize the assumptions, referred to as inputs, used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below:

34  Growth Opportunities Fund | Semiannual report 

Level 1 — Quoted prices in active markets for identical securities.

Level 2 — Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants would use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.

Level 3 — Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable, such as when there is little or no market activity for an investment, unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors that market participants would use in pricing an investment and would be based on the best information available.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used to value the Fund’s net assets as of August 31, 2008:

	INVESTMENTS IN	OTHER FINANCIAL
VALUATION INPUTS	SECURITIES	INSTRUMENTS*
Level 1 — Quoted Prices	$84,691,065	$63,530
Level 2 — Other Significant Observable Inputs	2,851,000	—
Level 3 — Significant Unobservable Inputs	—	—
Total	$87,542,065	$63,530

*Other financial instruments are derivative instruments not reflected in the Portfolio of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/ depreciation on the instrument

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.

Investment transactions

Investment transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment security transactions are reported on trade date. Interest income is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date net of foreign withholding taxes. Realized gains and losses from investment transactions are recorded on an identified cost basis.

Class allocations

Income, common expenses and realized and unrealized gains (losses) are determined at the fund level and allocated daily to each class of shares based on the appropriate net asset value of the respective classes. Distribution and service fees, if any, and transfer agent fees for Class A, Class B, Class C, Class I, Class R1 and Class 1 shares are calculated daily at the class level based on the appropriate net asset value of each class and the specific expense rate(s) applicable to each class.

Guarantees and indemnifications

Under the Fund’s organizational documents, its Officers and Trustees are indemnified against certain liability arising out of the performance of their duties to the Fund. Additionally, in the normal course of business,

Semiannual report | Growth Opportunities Fund  35 

the Fund enters into contracts with service providers that contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred.

Expenses

The majority of expenses are directly identifiable to an individual fund. Trust expenses that are not readily identifiable to a specific fund are allocated in such a manner as deemed equitable, taking into consideration, among other things, the nature and type of expense and the relative size of the funds.

Line of credit

The Fund has entered into an agreement which enables them to participate in a $150 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. For the period ended August 31, 2008, there were no borrowings under the line of credit.

Pursuant to the custodian agreement, the Custodian may, in its discretion, advance funds to the Fund to make properly authorized payments. When such payments result in an overdraft, the Fund is obligated to repay the Custodian for any overdraft, including any costs or expenses associated with the overdraft. The Custodian has a lien and security interest in any Fund property to the extent of any overdraft.

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 cash collateral against the loaned securities and maintains the cash 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 cash collateral is delivered to the Fund on the next business day. 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 secur ities loaned or in gaining access to the collateral. The Fund may receive compensation for lending their 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., Inc. 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) 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).

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 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.

36  Growth Opportunities Fund | Semiannual report 

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.

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 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 — $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 Financial Accounting Standards Board (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 year remain subject to examination by the Internal Revenue Service.

New accounting pronouncements

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 and interim reporting periods 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 evaluati ng the adoption of FAS 161 on the Fund’s financial statement disclosures.

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. The Fund declares income dividends and capital gains dividends, if any, annually. 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.

Such distributions, 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.

Semiannual report | Growth Opportunities Fund  37 

Note 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. 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 period ended August 31, 2008, were equivalent to an annual effective rate of 0.80% of the Fund’s average daily net assets.

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, 2009. 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, 1.14% for Class I, 1.64% for Class R1 and 1.09% for Class 1. Accordingly, the expense reductions or reimbursements related to this agreement were $32,609, $12,298, $8,475, $7,801, $7,921 and $98 for Class A, Class B, Class C, Class I, Class R1 and Class 1, respectively for the period ended August 31, 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.

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 period ended August 31, 2008, were $4,674 with an annual effective rate of 0.01% of the Fund’s average daily net assets.

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,

38  Growth Opportunities Fund | Semiannual report 

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 the 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 period ended August 31, 2008.

Class A shares are assessed up-front sales charges of up to 5.00% of the net asset value of such shares. During the period ended August 31, 2008 the Distributor received net up-front sales charges of $14,077 with regard to sales of Class A shares. Of this amount, $2,000 was retained and used for printing prospectuses, advertising, sales literature and other purposes, $8,545 was paid as sales commissions to unrelated broker-dealers and $3,532 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 period ended August 31, 2008, CDSCs received by the Distributor amounted to $8,191 for Class B shares and $76 for Class C shares.

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 $16.50 for each Class A, Class B, Class C, Class I and 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 period ended August 31, 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 period ended August 31, 2008, the transfer agent fees reductions for Class R1 were $46.

The Fund receives 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 period ended August 31, 2008, the Fund’s transfer agent fees and out-of-pocket expenses were reduced by $1,043 for transfer agent credits earned.

Semiannual report | Growth Opportunities Fund  39 

Class level expenses including the allocation of the transfer agent fees for the period ended August 31, 2008, were as follows:

	Distribution and	Transfer		Printing and
Share class	service fees	agent fees	Blue sky fees	postage fees
Class A	$110,331	$74,371	$7,858	$17,116
Class B	58,741	11,948	7,704	3,196
Class C	12,720	2,570	7,557	647
Class I	—	4	7,715	82
Class R1	317	78	7,851	89
Class 1	170	—	—	31
Total	$182,279	$88,971	$38,685	$21,161

The Adviser and other affiliates of John Hancock USA owned 4,557 shares of beneficial interest of Class R1 respectively, on August 31, 2008.

Note 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.

40  Growth Opportunities Fund | Semiannual report 

Note 5
Fund share transactions

This listing illustrates the number of Fund shares sold, reinvested and repurchased during the year ended February 29, 2008, and the period ended August 31, 2008, along with the corresponding dollar value.

		Year ended 2-29-08	Period ended 8-31-081
	Shares	Amount	Shares	Amount
Class A shares
Sold	199,710	$4,734,281	140,144	$3,003,917
Issued in reorganization	3,812,316	97,964,692	—	—
Distributions reinvested	717	16,781	—	—
Repurchased	(769,487)	(18,231,640)	(303,631)	(6,524,360)
Net increase (decrease)	3,243,256	$84,484,114	(163,487)	($3,520,443)
Class B shares
Sold	44,734	$1,047,067	23,577	$501,035
Issued in reorganization	781,214	19,954,400	—	—
Distributions reinvested	138	3,188	—	—
Repurchased	(228,240)	(5,308,318)	(136,152)	(2,874,696)
Net increase (decrease)	597,846	$15,696,337	(112,575)	($2,373,661)
Class C shares
Sold	23,285	$556,494	11,133	$236,770
Issued in reorganization	126,693	3,236,288	—	—
Distributions reinvested	26	597	—	—
Repurchased	(54,551)	(1,266,527)	(20,183)	(432,318)
Net increase (decrease)	95,453	$2,526,852	(9,050)	($195,548)
Class I shares
Sold	1,206	$29,806	25	$540
Issued in reorganization	2,191	56,536	—	—
Distributions reinvested	—	7	—	—
Repurchased	(11,091)	(267,783)	(1)	(11)
Net increase (decrease)	(7,694)	($181,434)	24	$529
Class R1 shares
Sold	1,329	$30,792	236	$5,037
Distributions reinvested	1	26	—	—
Repurchased	(166)	(3,725)	(120)	(2,468)
Net increase	1,164	$27,093	116	$2,569
Class 1 shares
Sold	27,623	$639,853	26,849	$593,909
Distributions reinvested	3	69	—	—
Repurchased	(14,096)	(345,724)	(4,775)	(102,970)
Net increase	13,530	$294,198	22,074	$490,939
Net increase (decrease)	3,943,555	$102,847,160	(262,898)	($5,595,615)
1Semiannual period from 3-1-08 to 8-31-08. Unaudited.

Semiannual report | Growth Opportunities Fund  41 

Note 6
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 period ended August 31, 2008, aggregated $68,429,242 and $74,717,054, respectively.

Note 7
Reorganization

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.

42  Growth Opportunities Fund | Semiannual report 

Board Consideration of and
Continuation of Investment Advisory
Agreement and Subadvisory
Agreement: John Hancock Growth
Opportunities Fund

The Investment Company Act of 1940 (the 1940 Act) requires the Board of Trustees (the Board) of John Hancock Funds III (the Trust), including a majority of the Trustees who have no direct or indirect interest in the investment advisory agreement and are not “interested persons” of the Trust, as defined in the 1940 Act (the Independent Trustees), annually to meet in person to review and consider the continuation of: (i) the investment advisory agreement (the Advisory Agreement) with John Hancock Investment Management Services, LLC (the Adviser) and (ii) the investment subadvisory agreement (the Subadvisory Agreement) with Grantham, Mayo, Van Otterloo & Co. LLC (the Subadviser) for the John Hancock Growth Opportunities Fund (the Fund). The Advisory Agreement and the Subadvisory Agreement are collectively referred to as the Advisory Agreements.

At meetings held on May 5–6 and June 9–10, 2008, the Board considered the factors and reached the conclusions described below relating to the selection of the Adviser and Subadviser and the continuation of the Advisory Agreements. During such meetings, the Board’s Contracts/Operations Committee and the Independent Trustees also met in executive sessions with their independent legal counsel.

In evaluating the Advisory Agreements, the Board, including the Contracts/Operations Committee and its Independent Trustees, reviewed a broad range of information requested for this purpose. This information included:

(i) the investment performance of the Fund relative to a category of relevant funds (the Category) and a peer group of comparable funds (the Peer Group). The funds within each Category and Peer Group were selected by Morningstar, Inc. (Morningstar), an independent provider of investment company data. Data covered the period since the Fund’s inception through December 31, 2007;

(ii) advisory and other fees incurred by, and the expense ratios of, the Fund relative to a Category and a Peer Group;

(iii) the advisory fees of comparable portfolios of other clients of the Adviser and the Subadviser;

(iv) the Adviser’s financial results and condition, including its and certain of its affiliates’ profitability from services performed for the Fund;

(v) breakpoints in the Fund’s and the Peer Group’s fees, and information about economies of scale;

(vi) the Adviser’s and Subadviser’s record of compliance with applicable laws and regulations, with the Fund’s investment policies and restrictions, and with the applicable Code of Ethics, and the structure and responsibilities of the Adviser’s and Subadviser’s compliance department;

(vii) the background and experience of senior management and investment professionals; and

(viii) the nature, cost and character of advisory and non-investment management services provided by the Adviser and its affiliates and by the Subadviser.

The Independent Trustees considered the legal advice of independent legal counsel and relied on their own business judgment in determining the factors to be considered in evaluating the materials that were presented to them and the weight to be given to each such factor. The Board’s review and conclusions were based on a comprehensive consideration of all information presented to the Board and not the result of any single controlling factor. The Board principally considered data on performance and other information provided by Morningstar as of December 31, 2007. The Board also considered updated performance information provided to it by the Adviser or Subadviser at its May and June 2008 meetings. Performance and other information may be quite different as of the date of this shareholders’ report. The key factors considered by the Board and the conclusions reached are described below.

Semiannual report | Growth Opportunities Fund  43 

Nature, extent and quality of services

The Board considered the ability of the Adviser and the Subadviser, based on their resources, reputation and other attributes, to attract and retain qualified investment professionals, including research, advisory, and supervisory personnel. The Board considered the investment philosophy, research and investment decision-making processes of the Adviser and Subadviser. The Board considered the Adviser’s execution of its oversight responsibilities. The Board further considered the culture of compliance, resources dedicated to compliance, compliance programs and compliance records of the Adviser and Subadviser. In addition, the Board took into account the administrative and other non-advisory services provided to the Fund by the Adviser and its affiliates.

Based on the above factors, together with those referenced below, the Board concluded that, within the context of its full deliberations, the nature, extent and quality of the investment advisory services provided to the Fund by the Adviser and Subadviser supported renewal of the Advisory Agreements.

Fund performance

The Board noted that the Fund had less than two full years of operational history, and considered the performance results for the Fund since its inception through December 31, 2007. The Board also considered these results in comparison to the performance of the Category, as well as the Fund’s Peer Group and benchmark index. The Board reviewed with representatives of Morningstar the methodology used by Morningstar to select the funds in the Category and the Peer Group.

The Board noted that the Fund’s performance was lower than the performance of the Category and Peer Group medians, and its benchmark index, the Russell 2500 Growth Index, over the 1-year period. The Adviser discussed its plans with respect to the Fund. The Board recognized the short operational history of the Fund and indicated its intent to continue to monitor the Fund’s performance trends.

Investment advisory fee and subadvisory fee rates and expenses

The Board reviewed and considered the contractual investment advisory fee rate payable by the Fund to the Adviser for investment advisory services (the Advisory Agreement Rate). The Board received and considered information comparing the Advisory Agreement Rate with the advisory fees for the Peer Group and Category. The Board noted that the Advisory Agreement Rate was equal to the median rate of the Peer Group and lower than the median rate of the Category.

The Board received and considered expense information regarding the Fund’s various components, including advisory fees, distribution and fees other than advisory and distribution fees, including transfer agent fees, custodian fees, and other miscellaneous fees (e.g., fees for accounting and legal services). The Board considered comparisons of these expenses to the Peer Group median. The Board also received and considered expense information regarding the Fund’s total operating expense ratio (Gross Expense Ratio) and total operating expense ratio after taking the fee waiver arrangement applicable to the Advisory Agreement Rate into account (Net Expense Ratio). The Board received and considered information comparing the Gross Expense Ratio and Net Expense Ratio of the Fund to that of the Peer Group and Category medians. The Board noted that the Fund’s Gross Expense Ratio was higher than the median of the Peer Group and Category. The Board also noted that the Fund’s Net Expense Ratio was higher than the median of the Category but not appreciably higher than the Peer Group.

The Adviser also discussed the Morningstar data and rankings, and other relevant information, for the Fund. Based on the above-referenced considerations and other factors, the Board concluded that the Fund’s expenses and overall plans to improve performance supported the re-approval of the Advisory Agreements.

The Board also received information about the investment subadvisory fee rate (the Subadvisory Agreement Rate) payable by the Adviser to the Subadviser for investment subadvisory services. The Board concluded that the Subadvisory

44  Growth Opportunities Fund | Semiannual report 

Agreement Rate was fair and equitable, based on its consideration of the factors described here.

Profitability

The Board received and considered a detailed profitability analysis of the Adviser based on the Advisory Agreements, as well as on other relationships between the Fund and the Adviser and its affiliates. The Board also considered a comparison of the Adviser’s profitability to that of other similar investment advisers whose profitability information is publicly available. The Board concluded that, in light of the costs of providing investment management and other services to the Fund, the profits and other ancillary benefits reported by the Adviser were not unreasonable.

The Board did not consider profitability information with respect to the Subadviser, which is not affiliated with the Adviser. The Board considered that the Subadvisory Agreement Rate paid to the Subadviser had been negotiated by the Adviser on an arm’s length basis and that the Subadviser’s separate profitability from its relationship with the Fund was not a material factor in determining whether to renew the agreement.

Economies of scale

The Board received and considered general information regarding economies of scale with respect to the management of the Fund, including the Fund’s ability to appropriately benefit from economies of scale under the Fund’s fee structure. The Board recognized the inherent limitations of any analysis of economies of scale, stemming largely from the Board’s understanding that most of the Adviser’s costs are not specific to individual Funds, but rather are incurred across a variety of products and services.

To the extent the Board and the Adviser were able to identify actual or potential economies of scale from Fund-specific or allocated expenses, in order to ensure that any such economies continue to be reasonably shared with the Fund as its assets increase, the Adviser and the Board agreed to continue the existing breakpoints to the Advisory Agreement Rate.

Information about services to other clients

The Board also received information about the nature, extent and quality of services and fee rates offered by the Adviser and Subadviser to their other clients, including other registered investment companies, institutional investors and separate accounts. The Board concluded that the Advisory Agreement Rate and the Subadvisory Agreement Rate were not unreasonable, taking into account fee rates offered to others by the Adviser and Subadviser, respectively, after giving effect to differences in services.

Other benefits to the Adviser

The Board received information regarding potential “fall-out” or ancillary benefits received by the Adviser and its affiliates and the Subadviser as a result of their relationship with the Fund. Such benefits could include, among others, benefits directly attributable to the relationship of the Adviser and Subadviser with the Fund and benefits potentially derived from an increase in business as a result of their relationship with the Fund (such as the ability to market to shareholders other financial products offered by the Adviser and its affiliates).

The Board also considered the effectiveness of the Adviser’s, Subadviser’s and Fund’s policies and procedures for complying with the requirements of the federal securities laws, including those relating to best execution of portfolio transactions and brokerage allocation.

Other factors and broader review

As discussed above, the Board reviewed detailed materials received from the Adviser and Subadviser as part of the annual re-approval process. The Board also regularly reviews and assesses the quality of the services that the Fund receives throughout the year. In this regard, the Board reviews reports of the Adviser at least quarterly, which include, among other things, fund performance reports and compliance reports. In addition, the Board meets with portfolio managers and senior investment officers at various times throughout the year.

After considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Board concluded that approval of the continuation of the Advisory Agreements for the Fund was in the best interest of the Fund and its shareholders. Accordingly, the Board unanimously approved the continuation of the Advisory Agreements.

Semiannual report | Growth Opportunities Fund  45 

More information

Trustees	Investment adviser
James F. Carlin, Chairman	John Hancock Investment Management
James R. Boyle†	Services, LLC
William H. Cunningham
Deborah C. Jackson	Subadviser
Charles L. Ladner*	Grantham, Mayo, Van Otterloo & Co. LLC
Stanley Martin*
Dr. John A. Moore*	Principal distributor
Patti McGill Peterson*	John Hancock Funds, LLC
Steven R. Pruchansky
Gregory A. Russo*	Custodian
*Members of the Audit Committee	State Street Bank & Trust Company
†Non-Independent Trustee
	Transfer agent
Officers	John Hancock Signature Services, Inc.
Keith F. Hartstein
President and Chief Executive Officer	Legal counsel
	K&L Gates LLP
Thomas M. Kinzler
Secretary and Chief Legal Officer
Francis V. Knox, Jr.
Chief Compliance Officer
Charles A. Rizzo
Chief Financial Officer
Gordon M. Shone
Treasurer
John G. Vrysen
Chief Operating Officer

Additional information about your fund is available without charge in several ways. As required by the SEC, you can access proxy voting information and quarterly portfolio information on your fund. The proxy voting information includes a description of proxy voting policies, procedures and information regarding how the fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30. The quarterly portfolio information that includes a complete list of the fund’s holdings for the first and third quarters of the fund’s fiscal period is filed on Form N-Q. You have access to this information:

By phone	On the fund’s Website		At the SEC
1-800-225-5291	www.jhfunds.com		www.sec.gov
			1-800-SEC-0330
			SEC Public Reference Room
You can also contact us:
Regular mail		Express mail
John Hancock Signature Services, Inc.		John Hancock Signature Services, Inc.
P.O. Box 9510		Mutual Fund Image Operations
Portsmouth, NH 03802-9510		164 Corporate Drive
		Portsmouth, NH 03801

46  Growth Opportunities Fund | Semiannual report 

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 Growth Opportunities Fund.	840SA 8/08
It is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus.	10/08

John Hancock
Growth Fund

Semiannual Report
8.31.08

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 March 1, 2008 with the same investment held until August 31, 2008.

Actual expenses/actual return
Account value				Expenses paid
$1,000.00		Ending value		during period
on 3-1-08		on 8-31-08		ended 8-31-08	1
Class A	$	1,005.70	$	7.08
Class B	$	1,002.60	$	10.60
Class C	$	1,002.60	$	10.60
Class I	$	1,007.70	$	5.06
Class R1	$	1,005.20	$	7.58

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 August 31, 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:

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 March 1, 2008, with the same investment held until August 31, 2008. Look in any other fund shareholder report to find its hypothetical example and you will be able to compare these expenses.

Hypothetical example for comparison purposes
Account value				Expenses paid
$1,000.00		Ending value		during period
on 3-1-08		on 8-31-08		ended 8-31-08	1
Class A	$	1,018.10	$	7.12
Class B	$	1,014.60	$	10.66
Class C	$	1,014.60	$	10.66
Class I	$	1,020.20	$	5.09
Class R1	$	1,017.60	$	7.63

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 1.40%, 2.10%, 2.10%, 1.00% and 1.50% 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 the most recent fiscal half year/365 (to reflect the one-half year period).

JOHN HANCOCK FUNDS III

PORTFOLIO OF INVESTMENTS - August 31, 2008 (Unaudited)
(showing percentage of total net assets)

Growth Fund
	Shares or
	Principal
	Amount		Value
COMMON STOCKS - 98.06%
Advertising - 0.10%
Omnicom Group, Inc.	500	$	21,195
Aerospace - 1.82%
Alliant Techsystems, Inc. *	100		10,523
Boeing Company	200		13,112
General Dynamics Corp.	1,300		119,990
Goodrich Corp.	300		15,375
Lockheed Martin Corp.	300		34,932
Raytheon Company	200		11,998
Rockwell Collins, Inc.	300		15,777
United Technologies Corp.	2,700		177,093
			398,800
Agriculture - 1.92%
Archer-Daniels-Midland Company	900		22,914
Monsanto Company	3,480		397,590
			420,504
Apparel & Textiles - 0.44%
Coach, Inc. *	1,000		28,990
Mohawk Industries, Inc. *	200		13,810
NIKE, Inc., Class B	900		54,549
			97,349
Auto Parts - 0.34%
AutoZone, Inc. *	200		27,446
Johnson Controls, Inc.	600		18,552
LKQ Corp. *	600		11,238
O'Reilly Automotive, Inc. *	600		17,472
			74,708
Auto Services - 0.14%
AutoNation, Inc. *	400		4,540
Copart, Inc. *	600		26,406
			30,946
Automobiles - 0.11%
PACCAR, Inc.	550		23,683
Banking - 0.27%
Bank of America Corp.	500		15,570
Hudson City Bancorp, Inc.	1,900		35,036
Northern Trust Corp.	100		8,039
			58,645
Biotechnology - 1.59%
Amgen, Inc. *	1,400		87,990
Biogen Idec, Inc. *	1,200		61,116
Genentech, Inc. *	1,200		118,500
Genzyme Corp. *	500		39,150
Illumina, Inc. *	200		17,226
Invitrogen Corp. *	400		16,984
Techne Corp. *	100		7,717
			348,683
Business Services - 1.24%
Accenture, Ltd., Class A	700		28,952
Automatic Data Processing, Inc.	1,000		44,380
FactSet Research Systems, Inc.	100		6,271
Fiserv, Inc. *	800		41,488
Fluor Corp.	700		56,091

Growth Fund (continued)
	Shares or
	Principal
	Amount		Value
COMMON STOCKS (continued)
Business Services (continued)
FTI Consulting, Inc. *	200	$	14,680
Global Payments, Inc.	300		14,463
Iron Mountain, Inc. *	400		11,564
Jacobs Engineering Group, Inc. *	400		29,528
Manpower, Inc.	200		9,612
Total Systems Services, Inc.	700		13,944
			270,973
Cable & Television - 0.05%
DIRECTV Group, Inc. *	400		11,284
Chemicals - 0.50%
Air Products & Chemicals, Inc.	200		18,370
FMC Corp.	200		14,708
Praxair, Inc.	600		53,904
Sigma-Aldrich Corp.	400		22,704
			109,686
Coal - 0.16%
Arch Coal, Inc.	200		10,848
Foundation Coal Holdings, Inc.	200		11,830
Peabody Energy Corp.	200		12,590
			35,268
Colleges & Universities - 0.06%
Career Education Corp. *	700		13,125
Computers & Business Equipment - 8.14%
Apple, Inc. *	2,780		471,294
Cisco Systems, Inc. *	23,400		562,770
Cognizant Technology Solutions Corp.,
Class A *	100		2,932
Dell, Inc. *	5,300		115,169
EMC Corp. *	1,100		16,808
Hewlett-Packard Company	4,000		187,680
Ingram Micro, Inc., Class A *	300		5,673
International Business Machines Corp.	2,980		362,755
Juniper Networks, Inc. *	600		15,420
Lexmark International, Inc. *	200		7,194
Western Digital Corp. *	1,300		35,438
			1,783,133
Construction & Mining Equipment - 0.13%
Joy Global, Inc.	200		14,208
National Oilwell Varco, Inc. *	200		14,746
			28,954
Containers & Glass - 0.08%
Owens-Illinois, Inc. *	400		17,840
Cosmetics & Toiletries - 4.89%
Avon Products, Inc.	1,000		42,830
Colgate-Palmolive Company	2,900		220,487
Estee Lauder Companies, Inc., Class A	300		14,931
Kimberly-Clark Corp.	1,300		80,184
Procter & Gamble Company	10,200		711,654
			1,070,086
Crude Petroleum & Natural Gas - 3.63%
Apache Corp.	1,000		114,380
Cabot Oil & Gas Corp.	200		8,888

The accompanying notes are an integral part of the financial statements. 

1

JOHN HANCOCK FUNDS III

PORTFOLIO OF INVESTMENTS - August 31, 2008 (Unaudited) - continued
(showing percentage of total net assets)

Growth Fund (continued)
	Shares or
	Principal
	Amount		Value
COMMON STOCKS (continued)
Crude Petroleum & Natural Gas
(continued)
Chesapeake Energy Corp.	1,200	$	58,080
Devon Energy Corp.	300		30,615
EOG Resources, Inc.	900		93,978
Hess Corp.	1,120		117,275
Noble Energy, Inc.	200		14,346
Occidental Petroleum Corp.	2,300		182,528
Patterson-UTI Energy, Inc.	400		11,368
Pioneer Natural Resources Company	200		12,634
Quicksilver Resources, Inc. *	300		7,257
Southwestern Energy Company *	1,300		49,881
Sunoco, Inc.	400		17,752
Unit Corp. *	200		13,546
W&T Offshore, Inc.	200		7,032
Whiting Petroleum Corp. *	100		9,624
XTO Energy, Inc.	900		45,369
			794,553
Domestic Oil - 0.23%
Comstock Resources, Inc. *	200		12,988
Denbury Resources, Inc. *	700		17,423
Encore Aquisition Company *	200		10,312
Range Resources Corp.	200		9,284
			50,007
Drugs & Health Care - 0.57%
BioMarin Pharmaceutical, Inc. *	300		9,042
Perrigo Company	700		24,493
Wyeth	2,100		90,888
			124,423
Educational Services - 0.33%
Apollo Group, Inc., Class A *	600		38,208
DeVry, Inc.	100		5,158
ITT Educational Services, Inc. *	200		17,782
Strayer Education, Inc.	50		10,492
			71,640
Electrical Equipment - 0.55%
Emerson Electric Company	2,100		98,280
FLIR Systems, Inc. *	600		21,420
			119,700
Electrical Utilities - 0.07%
Exelon Corp.	100		7,596
FirstEnergy Corp.	100		7,264
			14,860
Electronics - 0.28%
Amphenol Corp., Class A	200		9,504
Itron, Inc. *	100		10,358
L-3 Communications Holdings, Inc.	400		41,576
			61,438
Financial Services - 2.03%
BlackRock, Inc.	200		43,450
Capital One Financial Corp.	200		8,828
Charles Schwab Corp.	700		16,793
Citigroup, Inc.	3,200		60,768
Goldman Sachs Group, Inc.	340		55,750

Growth Fund (continued)
	Shares or
	Principal
	Amount		Value
COMMON STOCKS (continued)
Financial Services (continued)
JP Morgan Chase & Company	300	$	11,547
Leucadia National Corp.	200		9,258
MasterCard, Inc., Class A	360		87,318
Merrill Lynch & Company, Inc.	500		14,175
Morgan Stanley	700		28,581
Nasdaq Stock Market, Inc. *	300		9,807
SEI Investments Company	400		9,448
SLM Corp. *	700		11,557
State Street Corp.	200		13,534
T. Rowe Price Group, Inc.	300		17,808
Western Union Company	1,700		46,954
			445,576
Food & Beverages - 6.15%
General Mills, Inc.	900		59,562
H.J. Heinz Company	400		20,128
Kellogg Company	400		21,776
Kraft Foods, Inc., Class A	1,107		34,881
Pepsi Bottling Group, Inc.	400		11,832
PepsiCo, Inc.	7,700		527,296
Sysco Corp.	1,100		35,013
The Coca-Cola Company	11,600		604,012
William Wrigley, Jr. Company	400		31,792
			1,346,292
Gas & Pipeline Utilities - 0.63%
Transocean, Inc. *	1,089		138,521
Healthcare Products - 6.88%
Baxter International, Inc.	1,200		81,312
Becton, Dickinson & Company	600		52,428
C.R. Bard, Inc.	300		28,035
DENTSPLY International, Inc.	300		11,757
Gen-Probe, Inc. *	200		11,950
IDEXX Laboratories, Inc. *	200		11,260
Intuitive Surgical, Inc. *	150		44,290
Johnson & Johnson	9,800		690,214
Medtronic, Inc.	3,600		196,560
Patterson Companies, Inc. *	500		16,270
Stryker Corp.	2,000		134,380
Varian Medical Systems, Inc. *	500		31,580
Zimmer Holdings, Inc. *	2,700		195,453
			1,505,489
Healthcare Services - 4.58%
Cardinal Health, Inc.	1,200		65,976
Covance, Inc. *	300		28,302
Coventry Health Care, Inc. *	1,200		42,024
Express Scripts, Inc. *	2,300		168,843
Humana, Inc. *	200		9,280
McKesson Corp.	1,200		69,336
Medco Health Solutions, Inc. *	1,100		51,535
Quest Diagnostics, Inc.	200		10,810
UnitedHealth Group, Inc.	15,500		471,975
WellPoint, Inc. *	1,600		84,464
			1,002,545
Holdings Companies/Conglomerates - 0.11%
Textron, Inc.	600		24,660

The accompanying notes are an integral part of the financial statements. 

2

JOHN HANCOCK FUNDS III

PORTFOLIO OF INVESTMENTS - August 31, 2008 (Unaudited) - continued
(showing percentage of total net assets)

Growth Fund (continued)
	Shares or
	Principal
	Amount		Value
COMMON STOCKS (continued)
Homebuilders - 0.04%
D.R. Horton, Inc.	100	$	1,246
Lennar Corp., Class A	600		7,890
			9,136
Hotels & Restaurants - 0.42%
McDonald's Corp.	1,000		62,050
Starbucks Corp. *	1,000		15,560
Yum! Brands, Inc.	400		14,272
			91,882
Household Products - 0.13%
Clorox Company	200		11,820
Energizer Holdings, Inc. *	200		16,988
			28,808
Industrial Machinery - 1.36%
AGCO Corp. *	200		12,326
Cameron International Corp. *	500		23,295
Deere & Company	2,300		162,311
Donaldson Company, Inc.	300		13,173
Flowserve Corp.	300		39,636
FMC Technologies, Inc. *	400		21,424
Parker-Hannifin Corp.	400		25,628
			297,793
Industrials - 0.12%
Fastenal Company	300		15,579
Harsco Corp.	200		10,528
			26,107
Insurance - 1.54%
Aetna, Inc.	200		8,628
AFLAC, Inc.	2,100		119,070
Allstate Corp.	300		13,539
American International Group, Inc.	1,900		40,831
Assurant, Inc.	200		11,686
Brown & Brown, Inc.	400		8,128
Chubb Corp.	300		14,403
MetLife, Inc.	200		10,840
Philadelphia Consolidated Holding Corp. *	400		23,892
Prudential Financial, Inc.	200		14,742
The Travelers Companies, Inc.	1,400		61,824
W.R. Berkley Corp.	400		9,424
			337,007
International Oil - 8.59%
Anadarko Petroleum Corp.	300		18,519
Chevron Corp.	5,500		474,760
ConocoPhillips	1,800		148,518
Exxon Mobil Corp.	13,600		1,088,136
Murphy Oil Corp.	500		39,265
Nabors Industries, Ltd. *	800		28,480
Noble Corp.	400		20,116
Weatherford International, Ltd. *	1,600		61,728
			1,879,522
Internet Content - 1.54%
Google, Inc., Class A *	730		338,202
Internet Retail - 0.99%
Amazon.com, Inc. *	700		56,567

Growth Fund (continued)
	Shares or
	Principal
	Amount		Value
COMMON STOCKS (continued)
Internet Retail (continued)
eBay, Inc. *	6,400	$	159,552
			216,119
Internet Software - 0.11%
Salesforce.com, Inc. *	200		11,204
VeriSign, Inc. *	400		12,788
			23,992
Leisure Time - 0.03%
International Game Technology	300		6,429
Life Sciences - 0.18%
Applied Biosystems, Inc.	400		14,596
Pharmaceutical Product Development, Inc.	300		12,240
Waters Corp. *	200		13,650
			40,486
Liquor - 0.46%
Anheuser-Busch Companies, Inc.	1,400		95,004
Central European Distribution Corp. *	100		5,769
			100,773
Manufacturing - 1.24%
3M Company	2,200		157,520
Danaher Corp.	1,000		81,570
Harley-Davidson, Inc.	500		19,890
SPX Corp.	100		11,925
			270,905
Metal & Metal Products - 0.10%
Precision Castparts Corp.	100		10,326
Reliance Steel & Aluminum Company	200		11,402
			21,728
Mining - 0.24%
Compass Minerals International, Inc.	100		6,927
Freeport-McMoRan Copper & Gold, Inc.,
Class B	100		8,932
Newmont Mining Corp.	800		36,080
			51,939
Mobile Homes - 0.03%
Thor Industries, Inc.	300		6,894
Office Furnishings & Supplies - 0.03%
Office Depot, Inc. *	800		5,632
Petroleum Services - 1.52%
Atwood Oceanics, Inc. *	200		8,132
Baker Hughes, Inc.	400		32,004
BJ Services Company	800		21,480
Diamond Offshore Drilling, Inc.	300		32,973
ENSCO International, Inc.	100		6,778
Halliburton Company	900		39,546
Helmerich & Payne, Inc.	200		11,424
Oceaneering International, Inc. *	200		12,482
Schlumberger, Ltd.	850		80,087
Smith International, Inc.	300		20,910
Valero Energy Corp.	1,900		66,044
			331,860

The accompanying notes are an integral part of the financial statements. 

3

JOHN HANCOCK FUNDS III

PORTFOLIO OF INVESTMENTS - August 31, 2008 (Unaudited) - continued
(showing percentage of total net assets)

Growth Fund (continued)
	Shares or
	Principal
	Amount		Value
COMMON STOCKS (continued)
Pharmaceuticals - 6.34%
Abbott Laboratories	4,300	$	246,949
Allergan, Inc.	300		16,761
AmerisourceBergen Corp.	300		12,303
Barr Pharmaceuticals, Inc. *	200		13,508
Bristol-Myers Squibb Company	3,600		76,824
Eli Lilly & Company	2,500		116,625
Forest Laboratories, Inc. *	2,100		74,949
Gilead Sciences, Inc. *	6,100		321,348
Merck & Company, Inc.	3,900		139,113
OSI Pharmaceuticals, Inc. *	200		10,100
Pfizer, Inc.	18,800		359,268
			1,387,748
Publishing - 0.06%
McGraw-Hill Companies, Inc.	300		12,852
Railroads & Equipment - 0.76%
Burlington Northern Santa Fe Corp.	500		53,700
CSX Corp.	1,100		71,148
Norfolk Southern Corp.	100		7,353
Union Pacific Corp.	400		33,560
			165,761
Real Estate - 0.05%
Annaly Capital Management, Inc., REIT	700		10,472
Retail Grocery - 0.05%
The Kroger Company	400		11,048
Retail Trade - 11.11%
Abercrombie & Fitch Company, Class A	600		31,470
Advance Auto Parts, Inc.	500		21,520
American Eagle Outfitters, Inc.	600		9,030
Bed Bath & Beyond, Inc. *	1,400		42,924
Best Buy Company, Inc.	1,000		44,770
Costco Wholesale Corp.	1,100		73,766
CVS Caremark Corp.	1,200		43,920
Dollar Tree, Inc. *	300		11,508
Family Dollar Stores, Inc.	200		4,984
GameStop Corp., Class A *	400		17,548
Home Depot, Inc.	7,700		208,824
Kohl's Corp. *	1,300		63,921
Lowe's Companies, Inc.	6,400		157,696
Ross Stores, Inc.	300		12,063
Staples, Inc.	3,300		79,860
Target Corp.	3,000		159,060
The Gap, Inc.	600		11,670
The TJX Companies, Inc.	900		32,616
Urban Outfitters, Inc. *	400		14,248
Walgreen Company	5,400		196,722
Wal-Mart Stores, Inc.	20,200		1,193,214
			2,431,334
Sanitary Services - 0.14%
Ecolab, Inc.	300		13,722
Stericycle, Inc. *	300		17,790
			31,512
Semiconductors - 0.75%
Cypress Semiconductor Corp. *	500		16,210

Growth Fund (continued)
	Shares or
	Principal
	Amount		Value
COMMON STOCKS (continued)
Semiconductors (continued)
Intel Corp.	4,300	$	98,341
Lam Research Corp. *	300		11,028
QLogic Corp. *	600		11,208
Silicon Laboratories, Inc. *	400		13,484
Texas Instruments, Inc.	600		14,706
			164,977
Software - 6.60%
Adobe Systems, Inc. *	900		38,547
ANSYS, Inc. *	300		13,305
BMC Software, Inc. *	300		9,768
Citrix Systems, Inc. *	800		24,216
Microsoft Corp.	32,400		884,196
Oracle Corp. *	21,700		475,881
			1,445,913
Steel - 0.17%
Nucor Corp.	700		36,750
Telecommunications Equipment &
Services - 2.07%
QUALCOMM, Inc.	8,600		452,790
Telephone - 0.55%
AT&T, Inc.	1,700		54,383
Verizon Communications, Inc.	1,900		66,728
			121,111
Tobacco - 2.01%
Altria Group, Inc.	8,900		187,167
Philip Morris International, Inc.	4,400		236,280
UST, Inc.	300		16,077
			439,524
Transportation - 0.22%
C.H. Robinson Worldwide, Inc.	800		41,688
Frontline, Ltd.	100		6,041
			47,729
Trucking & Freight - 0.49%
FedEx Corp.	200		16,564
United Parcel Service, Inc., Class B	1,400		89,768
			106,332
TOTAL COMMON STOCKS (Cost $21,216,159)		$	21,465,633

The accompanying notes are an integral part of the financial statements. 

4

JOHN HANCOCK FUNDS III

PORTFOLIO OF INVESTMENTS - August 31, 2008 (Unaudited) - continued
(showing percentage of total net assets)

Growth Fund (continued)
		Shares or
		Principal
		Amount		Value
REPURCHASE AGREEMENTS - 1.79%
Repurchase Agreement with State
Street Corp. dated 08/29/2008 at
1.70% to be repurchased at
$393,074 on 09/02/2008,
collateralized by $315,000 Federal
National Mortgage Association,
7.125% due 01/15/2030 (valued at
$403,988, including interest)	$	393,000	$	393,000
TOTAL REPURCHASE AGREEMENTS
(Cost $393,000)			$	393,000
Total Investments (Growth Fund)
(Cost $21,609,159) - 99.85%			$	21,858,633
Other Assets in Excess of Liabilities - 0.15%				32,469
TOTAL NET ASSETS - 100.00%			$	21,891,102

Footnotes

Percentages are stated as a percent of net assets.

Key to Security Abbreviations and Legend

REIT - Real Estate Investment Trust

* Non-Income Producing

The accompanying notes are an integral part of the financial statements. 

5

† At August 31, 2008, the aggregate cost of investment securities for federal income tax purposes was $21,647,208. Net unrealized appreciation aggregated $211,425, of which $1,789,879 related to appreciated investment securities and $1,578,454 related to depreciated investment securities.

The Fund had the following financial futures contracts open on August 31, 2008:

OPEN CONTRACTS	NUMBER OF		EXPIRATION
	CONTRACTS	POSITION	DATE	UNREALIZED DEPRECIATION
S&P Mini 500 Index Futures	2	Long	Sep 2008	$2,720

John Hancock Funds III
Funds III Growth Fund
Statements of Assets and Liabilities — August 31, 2008 (Unaudited)

Assets
Investments, at value (Cost $21,609,159)	$	21,858,633
Cash		566
Cash collateral at brokers for futures contracts		21,600
Receivable for fund shares sold		18,331
Dividends and interest receivable		44,513
Receivable due from adviser		613
Other assets		34,227
Total assets		21,978,483
Liabilities
Payable for fund shares repurchased		425
Payable for futures variation margin		1,540
Payable to affiliates
Fund administration fees		129
Transfer agent fees		5,387
Distribution and service fees		185
Other payables and accrued expenses		79,715
Total liabilities		87,381
Net assets
Capital paid-in	$	23,208,947
Undistributed net investment income		11,983
Accumulated undistributed net realized loss on
investments and futures contracts		(1,576,582)
Net unrealized appreciation on investments and
futures		246,754
Net assets	$	21,891,102
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	$	19,763,646
Shares outstanding		1,022,108
Net asset value and redemption price per share	$	19.34
Class B1
Net assets	$	644,091
Shares outstanding		33,782
Net asset value and offering price per share	$	19.07
Class C1
Net assets	$	1,290,987
Shares outstanding		67,715
Net asset value and offering price per share	$	19.07
Class I
Net assets	$	69,126
Shares outstanding		3,540
Net asset value, offering price and redemption
price per share	$	19.53
Class R1��
Net assets	$	123,252
Shares outstanding		6,400
Net asset value, offering price and redemption
price per share	$	19.26
Maximum public offering price per share
Class A (net asset value per share ÷ 95%)2	$	20.36

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.

1 

John Hancock Funds III
Funds III Growth Fund
Statements of Operations — August 31, 2008 (Unaudited)¹

Investment income
Dividends	$	180,815
Interest		3,486
Total investment income		184,301
Expenses
Investment management fees (Note 3)		93,728
Distribution and service fees (Note 3)		43,531
Transfer agent fees (Note 3)		10,866
Blue sky fees (Note 3)		38,240
Fund administration fees (Note 3)		1,392
Audit and legal fees		20,179
Printing and postage fees (Note 3)		5,638
Custodian fees		17,102
Trustees' fees (Note 4)		1,698
Registration and filing fees		6,909
Miscellaneous		199
Total expenses		239,482
Less expense reductions (Note 3)		(67,120)
Transfer agent credits (Note 3)		(44)
Net expenses		172,318
Net investment income		11,983
Realized and unrealized gain (loss)
Net realized gain (loss) on
Investments		(826,738)
Futures contracts		971
		(825,767)
Change in net unrealized appreciation
(depreciation) of
Investments		1,001,886
Futures contracts		(1,282)
		1,000,604
Net realized and unrealized gain		174,837
Increase in net assets from operations	$	186,820

¹Semiannual period from 3-1-08 to 8-31-08.

See notes to financial statements.

1 

John Hancock Funds III
Funds III Growth Fund
Statements of Changes in Net Assets

		Year ended		Period ended
		2-29-08		8-31-08 1
Increase (decrease) in net assets
From operations
Net investment income (loss)	$	(7,022)	$	11,983
Net realized gain (loss)		99,196		(825,767)
Change in net unrealized appreciation
(depreciation)		(2,053,304)		1,000,604
Increase (decrease) in net assets resulting
from operations		(1,961,130)		186,820
Distributions to shareholders
From net realized gain
Class A		(1,315,122)		—
Class B		(41,970)		—
Class C		(111,505)		—
Class I		(11,243)		—
Class R1		(6,262)		—
Total distributions		(1,486,102)		—
From Fund share transactions (Note 5)		6,383,423		(3,370,377)
Total increase (decrease)		2,936,191		(3,183,557)
Net assets
Beginning of period		22,138,468		25,074,659
End of period	$	25,074,659	$	21,891,102
Undistributed net investment income	$	—	$	11,983

1 Semiannual period from 3-1-08 to 8-31-08. Unaudited.

See notes to financial statements.

Growth Fund
Financial Highlights
Class A

Period ended		2-28-07	1	2-29-08	8-31-08	2
Per share operating performance
Net asset value, beginning of period		$20.00		$21.65	$19.23
Net investment income	3	-	4	0.01	0.02
Net realized and unrealized gain (loss) on investments		1.91		(1.25)	0.09
Total from investment operations		1.91		(1.24)	0.11
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	$19.34
Total return (%)	5,6	9.57	7	(6.28)	0.57	7
Ratios and supplemental data
Net assets, end of period (in millions)		$21		$22	$20
Ratios (as a percentage of average net assets):
Expenses before reductions		2.00	8	1.85	1.71	8
Expenses net of fee waivers		1.39	8	1.40	1.40	8
Expenses net of all fee waivers and credits		1.39	8	1.40	1.40	8
Net investment income		0.01	8	0.04	0.17	8
Portfolio turnover (%)		93		95	32

1 Class A shares began operations on 6-12-06.
2 Semiannual period from 3-1-08 to 8-31-08. Unaudited.
3 Based on the average of the shares outstanding.
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 and does not reflect the effect of sales charges.
7 Not annualized.
8 Annualized.

Growth Fund
Financial Highlights
Class B

Period ended		2-28-07	1	2-29-08	8-31-08	2
Per share operating performance
Net asset value, beginning of period		$20.00		$21.59	$19.02
Net investment loss	3	(0.11)		(0.15)	(0.05)
Net realized and unrealized gain (loss) on investments		1.92		(1.24)	0.10
Total from investment operations		1.81		(1.39)	0.05
Less distributions
From net realized gain		(0.22)		(1.18)	-
Net asset value, end of period		$21.59		$19.02	$19.07
Total return (%)	4,5	9.05	6	(7.01)	0.26	6
Ratios and supplemental data
Net assets, end of period (in millions)		-	7	$1	$1
Ratios (as a percentage of average net assets):
Expenses before reductions		11.94	8	4.74	4.58	8
Expenses net of fee waivers		2.09	8	2.10	2.10	8
Expenses net of all fee waivers and credits		2.09	8	2.10	2.10	8
Net investment income (loss)		(0.68)	8	(0.68)	(0.53)	8
Portfolio turnover (%)		93		95	32

1 Class B shares began operations on 6-12-06.
2 Semiannual period from 3-1-08 to 8-31-08. Unaudited.
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 Assumes dividend reinvestment and does not reflect the effect of sales charges.
6 Not annualized.
7 Less than $500,000.
8 Annualized.

Growth Fund
Financial Highlights
Class C

Period ended		2-28-07	1	2-29-08	8-31-08	2
Per share operating performance
Net asset value, beginning of period		$20.00		$21.59	$19.02
Net investment loss	3	(0.10)		(0.15)	(0.05)
Net realized and unrealized gain (loss) on investments		1.91		(1.24)	0.10
Total from investment operations		1.81		(1.39)	0.05
Less distributions
From net realized gain		(0.22)		(1.18)	-
Net asset value, end of period		$21.59		$19.02	$19.07
Total return (%)	4,5	9.05	6	(7.01)	0.26	6
Ratios and supplemental data
Net assets, end of period (in millions)		$1		$2	$1
Ratios (as a percentage of average net assets):
Expenses before reductions		7.70	7	3.46	3.31	7
Expenses net of fee waivers		2.10	7	2.10	2.10	7
Expenses net of all fee waivers and credits		2.10	7	2.10	2.10	7
Net investment loss		(0.66)	7	(0.68)	(0.52)	7
Portfolio turnover (%)		93		95	32

1 Class C shares began operations on 6-12-06.
2 Semiannual period from 3-1-08 to 8-31-08. Unaudited.
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 Assumes dividend reinvestment and does not reflect the effect of sales charges.
6 Not annualized.
7 Annualized.

Growth Fund
Financial Highlights
Class I

Period ended		2-28-07	1	2-29-08		8-31-08	2
Per share operating performance
Net asset value, beginning of period		$20.00		$21.73		$19.38
Net investment income	3	0.06		0.09		0.06
Net realized and unrealized gain (loss) on investments		1.97		(1.26)		0.09
Total from investment operations		2.03		(1.17)		0.15
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		$19.53
Total return (%)	4,5	10.18	6	(5.94)		0.77	6
Ratios and supplemental data
Net assets, end of period (in millions)		-	7	-	7	-	7
Ratios (as a percentage of average net assets):
Expenses before reductions		1.90	8	9.72		28.55	8
Expenses net of fee waivers		1.00	8	1.00		1.00	8
Expenses net of all fee waivers and credits		1.00	8	1.00		1.00	8
Net investment income		0.43	8	0.40		0.58	8
Portfolio turnover (%)		93		95		32

1 Class I shares began operations on 6-12-06.
2 Semiannual period from 3-1-08 to 8-31-08. Unaudited.
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 Assumes dividend reinvestment and does not reflect the effect of sales charges.
6 Not annualized.
7 Less than $500,000.
8 Annualized.

Growth Fund
Financial Highlights
Class R1

Period ended		2-28-07	1	2-29-08		2-29-08	2
Per share operating performance
Net asset value, beginning of period		$20.00		$21.60		$19.16
Net investment income (loss)	3	(0.05)		(0.01)		0.01
Net realized and unrealized gain (loss) on investments		1.90		(1.25)		0.09
Total from investment operations		1.85		(1.26)		0.10
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		$19.26
Total return (%)	4,5	9.27	6	(6.39)		0.52	6
Ratios and supplemental data
Net assets, end of period (in millions)		-	7	-	7	-	7
Ratios (as a percentage of average net assets):
Expenses before reductions		21.55	8	15.85		14.56	8
Expenses net of fee waivers		1.74	8	1.50		1.50	8
Expenses net of all fee waivers and credits		1.74	8	1.50		1.50	8
Net investment income (loss)		(0.34)	8	(0.06)		0.08	8
Portfolio turnover (%)		93		95		32

1 Class R1 shares began operations on 6-12-06.
2 Semiannual period from 3-1-08 to 8-31-08. Unaudited.
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 Assumes dividend reinvestment and does not reflect the effect of sales charges.
6 Not annualized.
7 Less than $500,000.
8 Annualized.

Note 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 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.

Note 2
Significant accounting policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:

Security valuation
The net asset value of Class A, Class B and Class C, Class I and Class R1 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 John Hancock Advisers, LLC (the Adviser), a wholly owned subsidiary of John Hancock Financial Services, Inc., a subsidiary of Manulife Financial Corporation (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 w hich 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 the 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 a Fund investing significant amounts of assets in securities in foreign markets will be fair valued more frequently than a Fund 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 investments 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 that tracks foreign markets in which

the Fund has significant investments. If a significant market event occurs due to a change in the value of the index, the pricing for investments in foreign markets that have closed prior to the NYSE will promptly be reviewed and potential adjustments to the net asset value will be recommended to the Fund’s Pricing Committee where applicable.

Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity.

The Fund adopted Statement of Financial Accounting Standards No. 157 (FAS 157), Fair Value Measurements, effective with the beginning of the Fund’s fiscal year. FAS 157 established a three-tier hierarchy to prioritize the assumptions, referred to as inputs, used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below:

Level 1 – Quoted prices in active markets for identical securities.

Level 2 – Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants would use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.

Level 3 – Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable, such as when there is little or no market activity for an investment, unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors that market participants would use in pricing an investment and would be based on the best information available.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used to value the Fund’s net assets as of August 31, 2008:

	Investments in	Other Financial
Valuation Inputs	Securities	Instruments*
Level 1 – Quoted Prices	$21,465,633	($2,720)
Level 2 – Other Significant Observable Inputs	393,000	-
Level 3 – Significant Unobservable Inputs	-	-
Total	$21,858,633	($2,720)

* Other financial instruments are derivative instruments not reflected in the Portfolio of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

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 counter party.

Investment transactions
Investment transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment security transactions are reported on trade date. Interest income is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date net of foreign withholding taxes. Realized gains and losses from investment transactions are recorded on an identified cost basis.

Class allocations
Income, common expenses and realized and unrealized gains (losses) are determined at the fund level and allocated daily to each class of shares based on the appropriate net asset value of the respective classes. Distribution and service fees, if any, and transfer agent fees for Class A, Class B, Class C, Class I and Class R1 shares are calculated daily at the class level based on the appropriate net asset value of each class and the specific expense rate(s) applicable to each class.

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

Expenses
The majority of expenses are directly identifiable to an individual fund. Trust expenses that are not readily identifiable to a specific fund are allocated in such a manner as deemed equitable, taking into consideration, among other things, the nature and type of expense and the relative size of the funds.

Line of credit
The Fund has entered into an agreement which enables them to participate in a $150 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. For the period ended August 31, 2008, there were no significant borrowings under the line of credit.

Pursuant to the custodian agreement, the Custodian may, in its discretion, advance funds to the Fund to make properly authorized payments. When such payments result in an overdraft, the Fund is obligated to repay the Custodian for any overdraft, including any costs or expenses associated with the overdraft. The Custodian has a lien and security interest in any Fund property to the extent of any overdraft.

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 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.

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 Financial Accounting Standards Board (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 three fiscal years remain subject to examination by the Internal Revenue Service.

New accounting pronouncement
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 and interim reporting periods 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 curren tly evaluating the adoption of FAS 161 on the Fund’s financial statement disclosures.

Distribution of income and gains
The Fund declares and pays dividends annually. Capital gains, if any, are distributed annually. 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 $1,248,461 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.

Such distributions, 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.

Note 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 Hanco ck Trust. 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 period ended August 31, 2008, were equivalent to an annual effective rate of 0.80% of the Fund’s average daily net assets.

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 $32,468, $8,467, $10,332, $7,745 and $8,062 for Class A, Class B, Class C, Class I and Class R1, respectively for the period August 31, 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.

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 period ended August 31, 2008, were $1,392 with an annual effective rate of 0.01% of the Fund’s average daily net assets.

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 the 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 August 31, 2008.

Class A shares are assessed up-front sales charges. During the period ended August 31, 2008, the Distributor received net up-front sales charges of $6,943 with regard to sales of Class A shares. Of this amount, $1,049 was retained and used for printing prospectuses, advertising, sales literature and other purposes, $5,894 was paid as sales commissions to unrelated broker-dealers and there were no sales commissions paid 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 period ended August 31, 2008, CDSCs received by the Distributor amounted to $2,722 for Class B shares and there were no CDSCs for Class C shares.

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 $16.50 for each Class A, Class B, Class C, Class I and Class R1 shareholder accounts.

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 period ended August 31, 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 period ended August 31, 2008, the transfer agent fees reductions for Class R1 were $46.

The Fund receives 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 period ended August 31, 2008, the Fund’s transfer agent fees and out-of-pocket expenses were reduced by $44 for transfer agent credits earned.

Class level expenses including the allocation of the transfer agent fees for the period ended August 31, 2008, were as follows:

	Distribution and	Transfer		Printing and
Share class	service fees	agent fees	Blue sky fees	postage fees
Class A	$31,303	$8,375	$8,369	$4,761
Class B	3,408	685	7,271	154
Class C	8,510	1,713	7,338	413
Class I	-	15	7,437	234
Class R1	310	78	7,825	76
Total	$43,531	$10,866	$38,240	$5,638

Note 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.

Note 5
Fund share transactions
This listing illustrates the number of Fund shares sold, reinvested and repurchased during the year ended February 29, 2008, and the period ended August 31, 2008, along with the corresponding dollar value.

	Year ended			Period ended1
	2-29-08			8-31-08
	Shares		Amount	Shares		Amount
Class A shares
Sold	253,211	$	5,635,153	36,032	$	696,127
Distributions reinvested	60,442		1,296,476	—		—
Repurchased	(100,129)		(2,102,448)	(176,260)		(3,450,541)
Net increase (decrease)	213,524	$	4,829,181	(140,228)	$	(2,754,414)
Class B shares
Sold	29,429	$	643,344	3,136	$	60,242
Distributions reinvested	1,972		41,918	—		—
Repurchased	(13,671)		(298,183)	(6,721)		(129,677)
Net increase (decrease)	17,730	$	387,079	(3,585)	$	(69,435)
Class C shares
Sold	71,331	$	1,568,194	11,443	$	219,149
Distributions reinvested	4,932		104,855	—		—
Repurchased	(22,472)		(471,936)	(40,032)		(770,943)
Net increase (decrease)	53,791	$	1,201,113	(28,589)	$	(551,794)
Class I shares
Sold	7,959	$	180,651	2,898	$	56,824
Distributions reinvested	520		11,243	—		—
Repurchased	(11,806)		(252,855)	(2,630)		(52,028)
Net increase	(3,327)	$	(60,961)	268	$	4,796
Class R1 shares
Sold	1,028	$	20,749	188	$	3,640
Distributions reinvested	293		6,262	—		—
Repurchased	—		—	(168)		(3,170)
Net increase	1,321	$	27,011	20	$	470
Net increase (decrease)	283,039	$	6,383,423	(172,114)	$	(3,370,377)

¹Semiannual period from 3-1-08 to 8-31-08. Unaudited.

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 August 31, 2008.

Note 6
Purchase and sale 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 period ended August 31, 2008, aggregated $7,372,720 and $10,849,696, respectively.

Note 7
Subsequent event
On September 8, 2008, the Board of Trustees of the Fund approved the proposed liquidation of the Fund. The liquidation occurred on October 24, 2008.

INSERT TO SHAREHOLDER REPORTS

Board Consideration of and Continuation of

Investment Advisory Agreement and Subadvisory Agreement: 

John Hancock Growth Fund

   The Investment Company Act of 1940 (the “1940 Act”) requires the Board of Trustees (the “Board”) of John Hancock Funds III (the “Trust”), including a majority of the Trustees who have no direct or indirect interest in the investment advisory agreement and are not “interested persons” of the Trust, as defined in the 1940 Act (the “Independent Trustees”), annually to meet in person to review and consider the continuation of: (i) the investment advisory agreement (the “Advisory Agreement”) with John Hancock Investment Management Services, LLC (the “Adviser”) and (ii) the investment subadvisory agreement (the “Subadvisory Agreement”) with Grantham, Mayo, Van Otterloo & Co. LLC (the “Subadviser”) for the John Hancock Growth Fund (the “Fund”). The Advisory Agreement and the Subadvisory Agreement are collectively referred to as the “Advisory Agreements.”

   At meetings held on May 5-6 and June 9-10, 2008, the Board considered the factors and reached the conclusions described below relating to the selection of the Adviser and Subadviser and the continuation of the Advisory Agreements. During such meetings, the Board’s Contracts/Operations Committee and the Independent Trustees also met in executive sessions with their independent legal counsel.

   In evaluating the Advisory Agreements, the Board, including the Contracts/Operations Committee and its Independent Trustees, reviewed a broad range of information requested for this purpose. This information included:

   (i) the investment performance of the Fund relative to a category of relevant funds (the “Category”) and a peer group of comparable funds (the “Peer Group”). The funds within each Category and Peer Group were selected by Morningstar Inc. (“Morningstar”), an independent provider of investment company data. Data covered the period since the Fund’s inception through December 31, 2007,

   (ii) advisory and other fees incurred by, and the expense ratios of, the Fund relative to a Category and a Peer Group,

   (iii) the advisory fees of comparable portfolios of other clients of the Adviser and the Subadviser,

   (iv) the Adviser’s financial results and condition, including its and certain of its affiliates’ profitability from services performed for the Fund,

   (v) breakpoints in the Fund’s and the Peer Group’s fees, and information about economies of scale,

   (vi) the Adviser’s and Subadviser’s record of compliance with applicable laws and regulations, with the Fund’s investment policies and restrictions, and with the applicable Code of Ethics, and the structure and responsibilities of the Adviser’s and Subadviser’s compliance department,

   (vii) the background and experience of senior management and investment professionals, and

1 

   (viii) the nature, cost and character of advisory and non-investment management services provided by the Adviser and its affiliates and by the Subadviser.

   The Independent Trustees considered the legal advice of independent legal counsel and relied on their own business judgment in determining the factors to be considered in evaluating the materials that were presented to them and the weight to be given to each such factor. The Board’s review and conclusions were based on a comprehensive consideration of all information presented to the Board and not the result of any single controlling factor. The Board principally considered data on performance and other information provided by Morningstar as of December 31, 2007. The Board also considered updated performance information provided to it by the Adviser or Subadviser at its May and June 2008 meetings. Performance and other information may be quite different as of the date of this shareholders report. The key factors considered by the Board and the conclusions reached are described below.

Nature, Extent and Quality of Services

   The Board considered the ability of the Adviser and the Subadviser, based on their resources, reputation and other attributes, to attract and retain qualified investment professionals, including research, advisory, and supervisory personnel. The Board considered the investment philosophy, research and investment decision-making processes of the Adviser and Subadviser. The Board considered the Adviser’s execution of its oversight responsibilities. The Board further considered the culture of compliance, resources dedicated to compliance, compliance programs and compliance records of the Adviser and Subadviser. In addition, the Board took into account the administrative and other non-advisory services provided to the Fund by the Adviser and its affiliates.

   Based on the above factors, together with those referenced below, the Board concluded that, within the context of its full deliberations, the nature, extent and quality of the investment advisory services provided to the Fund by the Adviser and Subadviser supported renewal of the Advisory Agreements.

Fund Performance

   The Board noted that the Fund had less than two full years of operational history, and considered the performance results for the Fund since its inception through December 31, 2007. The Board also considered these results in comparison to the performance of the Category, as well as the Fund’s Peer Group and benchmark index. The Board reviewed with representatives of Morningstar the methodology used by Morningstar to select the funds in the Category and the Peer Group.

   The Board noted that the Fund’s performance was lower than the performance of the Category and Peer Group medians, and its benchmark index, the Russell 1000 Growth Index, over the 1-year period. The Adviser discussed its plans with respect to the Fund. The Board recognized the short operational history of the Fund and indicated its intent to continue to monitor the Fund’s performance trends.

2 

Investment Advisory Fee and Subadvisory Fee Rates and Expenses

   The Board reviewed and considered the contractual investment advisory fee rate payable by the Fund to the Adviser for investment advisory services (the “Advisory Agreement Rate”). The Board received and considered information comparing the Advisory Agreement Rate with the advisory fees for the Peer Group and Category. The Board noted that the Advisory Agreement Rate was not appreciably higher than the median rate of the Peer Group or Category.

   The Board received and considered expense information regarding the Fund’s various components, including advisory fees, distribution and fees other than advisory and distribution fees, including transfer agent fees, custodian fees, and other miscellaneous fees (e.g., fees for accounting and legal services). The Board considered comparisons of these expenses to the Peer Group median. The Board also received and considered expense information regarding the Fund’s total operating expense ratio (“Gross Expense Ratio”) and total operating expense ratio after taking the fee waiver arrangement applicable to the Advisory Agreement Rate into account (“Net Expense Ratio”). The Board received and considered information comparing the Gross Expense Ratio and Net Expense Ratio of the Fund to that of the Peer Group and Category medians. The Board noted that the Fund’s Gross Expense Ratio was higher than the median of the Peer Group and Category. The Board also noted that the Fund’s Net Expense Ratio was higher than the median of the Category but not appreciably higher than the Peer Group.

   The Adviser also discussed the Morningstar data and rankings, and other relevant information, for the Fund. Based on the above-referenced considerations and other factors, the Board concluded that the Fund’s expenses and overall plans to improve performance supported the re-approval of the Advisory Agreements.

   The Board also received information about the investment subadvisory fee rate (the “Subadvisory Agreement Rate”) payable by the Adviser to the Subadviser for investment subadvisory services. The Board concluded that the Subadvisory Agreement Rate was fair and equitable, based on its consideration of the factors described here.

Profitability

   The Board received and considered a detailed profitability analysis of the Adviser based on the Advisory Agreements, as well as on other relationships between the Fund and the Adviser and its affiliates. The Board also considered a comparison of the Adviser’s profitability to that of other similar investment advisers whose profitability information is publicly available. The Board concluded that, in light of the costs of providing investment management and other services to the Fund, the profits and other ancillary benefits reported by the Adviser were not unreasonable.

   The Board did not consider profitability information with respect to the Subadviser, which is not affiliated with the Adviser. The Board considered that the Subadvisory Agreement Rate paid to the Subadviser had been negotiated by the Adviser on an arm’s length basis and that the Subadviser’s separate profitability from its relationship with the Fund was not a material factor in determining whether to renew the agreement.

3 

Economies of Scale

   The Board received and considered general information regarding economies of scale with respect to the management of the Fund, including the Fund’s ability to appropriately benefit from economies of scale under the Fund’s fee structure. The Board recognized the inherent limitations of any analysis of economies of scale, stemming largely from the Board’s understanding that most of the Adviser’s costs are not specific to individual Funds, but rather are incurred across a variety of products and services.

   To the extent the Board and the Adviser were able to identify actual or potential economies of scale from Fund-specific or allocated expenses, in order to ensure that any such economies continue to be reasonably shared with the Fund as its assets increase, the Adviser and the Board agreed to continue the existing breakpoints to the Advisory Agreement Rate.

Information About Services to Other Clients

   The Board also received information about the nature, extent and quality of services and fee rates offered by the Adviser and Subadviser to their other clients, including other registered investment companies, institutional investors and separate accounts. The Board concluded that the Advisory Agreement Rate and the Subadvisory Agreement Rate were not unreasonable, taking into account fee rates offered to others by the Adviser and Subadviser, respectively, after giving effect to differences in services.

Other Benefits to the Adviser

   The Board received information regarding potential “fall-out” or ancillary benefits received by the Adviser and its affiliates and the Subadviser as a result of their relationship with the Fund. Such benefits could include, among others, benefits directly attributable to the relationship of the Adviser and Subadviser with the Fund and benefits potentially derived from an increase in business as a result of their relationship with the Fund (such as the ability to market to shareholders other financial products offered by the Adviser and its affiliates).

   The Board also considered the effectiveness of the Adviser’s, Subadviser’s and Fund’s policies and procedures for complying with the requirements of the federal securities laws, including those relating to best execution of portfolio transactions and brokerage allocation.

Other Factors and Broader Review

   As discussed above, the Board reviewed detailed materials received from the Adviser and Subadviser as part of the annual re-approval process. The Board also regularly reviews and assesses the quality of the services that the Fund receives throughout the year. In this regard, the Board reviews reports of the Adviser at least quarterly, which include, among other things, fund performance reports and compliance reports. In addition, the Board meets with portfolio managers and senior investment officers at various times throughout the year.

   After considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Board concluded that approval of the continuation of the Advisory Agreements for the Fund was in the best interest of the Fund and its

4 

shareholders. Accordingly, the Board unanimously approved the continuation of the Advisory Agreements.

5 

A look at performance

For the periods ended August 31, 2008

		Average annual returns (%)				Cumulative total returns (%)
		with maximum sales charge (POP)				with maximum sales charge (POP)
	Inception				Since	Six				Since
Class	date	1-year	5-year	10-year	inception	months	1-year	5-year	10-year	inception
A	6-12-06	–15.74	—	—	4.21	–12.76	–15.74	—	—	9.62
B	6-12-06	–16.14	—	—	4.59	–13.12	–16.14	—	—	10.50
C	6-12-06	–12.85	—	—	5.83	–9.43	–12.85	—	—	13.45
I1	6-12-06	–10.96	—	—	7.09	–7.99	–10.96	—	—	16.49
R11	6-12-06	–11.31	—	—	6.45	–8.24	–11.31	—	—	14.93
11	6-12-06	–10.91	—	—	7.13	–7.95	–10.91	—	—	16.58
NAV1	12-27-06	–10.85	—	—	–2.46	–7.92	–10.85��	—	—	–4.09

Performance figures assume all distributions are reinvested. Public offering price (POP) figures reflect maximum sales charges 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 June 30, 2009. The net expenses are as follows: Class A — 1.56%, Class B — 2.40%, Class C —2.40%, Class I — 1.20%, Class R1 — 1.70%, 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 —2.21%, Class B — 4.62%, Class C — 3.73%, Class I — 5.07%, Class R1 — 14.42%, Class 1 — 1.83%, Class NAV — 1.77%.

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 current to the most recent month end performance data, 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.

6  International Growth Fund | Semiannual report 

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 sales	With maximum
Class	Period beginning	charge	sales charge	Index 1	Index 2
B	6-12-06	$11,350	$11,050	$11,055	$11,006
C2	6-12-06	11,345	11,345	11,055	11,006
I3	6-12-06	11,649	11,649	11,055	11,006
R13	6-12-06	11,493	11,493	11,055	11,006
13	6-12-06	11,658	11,658	11,055	11,006
NAV3	12-27-06	9,591	9,591	9,444	9,212

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 August 31, 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 USD 100 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 the equity market performance of developed markets, excluding the U.S. and Canada. As of June 2007, 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, the 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 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.

Semiannual report | International Growth Fund  7 

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 March 1, 2008 with the same investment held until August 31, 2008.

	Account value	Ending value	Expenses paid during
	on 3-1-08	on 8-31-08	period ended 8-31-081
Class A	$1,000.00	$918.20	$7.54
Class B	1,000.00	914.50	11.58
Class C	1,000.00	914.90	11.58
Class I	1,000.00	920.10	5.81
Class R1	1,000.00	917.60	8.22
Class 1	1,000.00	920.50	5.57
Class NAV	1,000.00	920.80	5.33

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 August 31, 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:

8  International Growth Fund | Semiannual report 

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 March 1, 2008, with the same investment held until August 31, 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 3-1-08	on 8-31-08	period ended 8-31-081
Class A	$1,000.00	$1,017.30	$7.93
Class B	1,000.00	1,013.10	12.18
Class C	1,000.00	1,013.10	12.18
Class I	1,000.00	1,019.20	6.11
Class R1	1,000.00	1,016.60	8.64
Class 1	1,000.00	1,019.40	5.85
Class NAV	1,000.00	1,019.70	5.60

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%, 2.40%, 2.40%, 1.20%, 1.70%, 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 the most recent fiscal half-year/365 (to reflect the one-half year period).

Semiannual report | International Growth Fund  9 

Portfolio summary

Top 10 holdings1
GlaxoSmithKline PLC	4.5%	Potash Corp. of Saskatchewan, Inc.	2.6%
BG Group PLC	3.4%	Roche Holdings AG Genusschein	2.1%
Nestle SA	3.4%	Total SA	2.1%
Novartis AG	2.8%	Nokia AB Oyj	1.9%
Telefonica SA	2.6%	Rio Tinto PLC	1.8%
Sector distribution1,2
Consumer Non-cyclical	29%	Industrial	9%
Basic Materials	13%	Technology	4%
Consumer Cyclical	10%	Financial	4%
Energy	10%	Utilities	3%
Communications	9%	Short-term Investments & Other	9%

¹ As a percentage of net assets on August 31, 2008.

² Sector investing is subject to greater risks than the market as a whole. Because the Fund may focus on particular sectors of the economy, its performance may depend on the performance of those sectors. International investing involves special risks such as political, economic and currency risks and differences in accounting standards and financial reporting.

10  International Growth Fund | Semiannual report 

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 8-31-08 (unaudited)

This schedule is divided into four main categories: common stocks, preferred stocks, rights 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 89.39%		$43,749,360
(Cost $46,180,435)
Australia 5.14%		2,516,248
AMP, Ltd.	7,540	44,638
Australian Stock Exchange, Ltd.	3,499	104,980
BHP Billiton, Ltd.	4,898	172,026
Brambles, Ltd.	12,040	78,999
CSL, Ltd.	6,863	239,521
CSR, Ltd.	17,494	39,698
Foster’s Group, Ltd.	16,592	79,191
Incitec Pivot, Ltd.	916	124,615
Leighton Holdings, Ltd.	923	36,423
Macquarie Group, Ltd.	662	24,548
Newcrest Mining, Ltd. *	4,321	101,330
Oil Search, Ltd.	6,837	34,930
Origin Energy, Ltd.	6,083	83,915
QBE Insurance Group, Ltd.	1,124	22,860
Rio Tinto, Ltd.	1,236	134,011
St. George Bank, Ltd.	1,640	42,294
TABCORP Holdings, Ltd.	3,284	23,990
Telstra Corp., Ltd.	27,131	100,712
Toll Holdings, Ltd.	6,198	36,697
Virgin Blue Holdings, Ltd.	6,198	3,040
Wesfarmers, Ltd.	2,075	54,402
Westpac Banking Corp., Ltd.	1,338	26,740
Woodside Petroleum, Ltd.	8,144	437,438
Woolworths, Ltd.	15,585	376,261
WorleyParsons, Ltd.	2,954	92,989
Austria 0.26%		127,771
Immofinanz Immobilien Anlage AG	4,969	45,133
Oesterreichische Elektrizitaets AG, Class A	1,096	82,638
Belgium 0.16%		78,008
Belgacom SA	843	33,568
Colruyt SA	163	44,440

See notes to financial statements

Semiannual report | International Growth Fund  11 

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

Issuer	Shares	Value
Bermuda 0.22%		$105,166
Frontline, Ltd.	435	26,024
SeaDrill, Ltd., GDR	2,900	79,142
Canada 5.66%		2,771,087
Agrium, Inc.	2,000	169,166
Canadian National Railway Company	3,500	183,636
Canadian Natural Resources, Ltd.	1,200	102,437
Canadian Pacific Railway, Ltd.	1,200	73,211
Enbridge, Inc.	1,000	41,938
EnCana Corp.	1,200	90,198
Husky Energy, Inc.	1,900	83,995
IGM Financial, Inc. *	900	37,626
Penn West Energy Trust	1,500	44,034
Potash Corp. of Saskatchewan, Inc.	7,300	1,270,247
Research In Motion, Ltd. *	2,700	328,969
Royal Bank of Canada	2,600	119,373
Shoppers Drug Mart Corp.	2,800	146,091
Suncor Energy, Inc.	1,400	80,166
Denmark 2.60%		1,274,179
A P Moller Maersk AS, Series A	7	78,440
A P Moller Maersk AS	2	22,375
H. Lundbeck AS	2,600	60,397
Novo Nordisk AS	9,114	508,760
Rockwool International AS, B Shares	322	31,211
Sydbank AS	1,344	43,792
Vestas Wind Systems AS *	3,900	529,204
Finland 2.77%		1,354,083
Fortum Corp. Oyj	2,325	95,431
Kone Corp. Oyj	2,028	62,810
Nokia AB Oyj	37,185	931,015
Nokian Renkaat Oyj	3,688	131,339
Outokumpu Oyj	2,157	51,651
Outotec Oyj	338	15,355
YIT Oyj	4,274	66,482
France 5.72%		2,799,140
Air Liquide	1,160	140,894
Alstom	1,438	146,075
Dassault Systemes SA	740	44,724
Electricite de France	797	68,163
Eramet	68	37,235
Essilor International SA	2,803	149,113
Groupe DANONE	2,692	187,650
Hermes International SA	1,008	143,150
Lafarge SA	240	28,953
L’Oreal SA	2,020	200,504

See notes to financial statements

12  International Growth Fund | Semiannual report 

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

Issuer	Shares	Value
France (continued)
LVMH Moet Hennessy SA	470	$49,913
Neopost SA	406	42,328
Sanofi-Aventis SA	4,029	285,839
Total SA	14,050	1,009,298
UbiSoft Entertainment SA *	909	84,791
Vallourec SA	196	54,525
Veolia Environnement SA	1,504	80,670
Wendel, ADR	411	45,315
Germany 5.80%		2,839,865
Adidas-Salomon AG	2,578	150,922
BASF AG	690	39,809
Beiersdorf AG	1,771	102,861
Bilfinger Berger AG	703	49,434
Deutsche Boerse AG	3,142	296,839
E.ON AG	3,759	219,524
Fresenius SE	585	47,648
K&S AG	3,365	406,114
Kloeckner & Company AG	1,722	68,649
Linde AG	1,124	141,381
Muenchener Rueckversicherungs – Gesellschaft AG	87	13,507
Norddeutsche Affinerie AG	1,022	47,304
Puma AG	115	36,127
Q-Cells AG *	932	93,880
RWE AG	675	72,814
Salzgitter AG	456	69,894
SAP AG	13,494	756,063
SGL Carbon AG *	2,161	129,691
Solarworld AG	579	30,015
Stada Arzneimittel AG	566	30,824
Wacker Chemie AG	199	36,565
Greece 0.54%		264,698
Alpha Bank A.E.	1,263	32,138
Bank of Piraeus SA	935	25,201
Coca-Cola Hellenic Bottling Company SA	1,948	47,975
National Bank of Greece SA	1,798	79,258
OPAP SA	2,288	80,126
Hong Kong 1.58%		772,264
CLP Holdings, Ltd.	18,000	146,024
Esprit Holdings, Ltd.	11,600	95,761
Hang Seng Bank, Ltd.	8,400	165,676
Hong Kong & China Gas Company, Ltd.	38,500	86,382
Hong Kong Electric Holdings, Ltd.	17,000	107,937
Hong Kong Exchange & Clearing, Ltd.	4,500	58,129

See notes to financial statements

Semiannual 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
Hong Kong (continued)
Li & Fung, Ltd.	12,000	$36,489
Sun Hung Kai Properties, Ltd.	3,000	40,906
Swire Pacific, Ltd., Class A	3,500	34,960
Ireland 0.10%		48,102
CRH PLC	1,844	48,102
Italy 0.20%		99,202
A2A SpA	2,952	9,226
Eni SpA	1,376	44,634
Intesa Sanpaolo SpA	8,447	45,342
Japan 17.44%		8,535,227
Aisin Seiki Company	2,600	68,448
Asahi Breweries, Ltd.	2,500	46,307
Astellas Pharmaceuticals, Inc.	3,500	157,646
Canon, Inc.	12,200	547,094
Central Japan Railway Company, Ltd.	10	103,879
Daiichi Sankyo Company, Ltd.	4,900	147,416
Daikin Industries, Ltd.	3,800	128,092
Dena Company, Ltd.	13	63,425
Denso Corp.	1,700	44,070
East Japan Railway Company	17	135,219
Eisai Company, Ltd.	2,900	115,330
Fanuc, Ltd.	1,700	126,477
Fast Retailing Company, Ltd.	1,600	161,498
Fujitsu, Ltd.	7,000	48,383
Hisamitsu Pharmaceutical Company, Inc.	1,100	48,858
Hitachi Metals, Ltd.	3,000	44,546
Honda Motor Company, Ltd.	8,300	269,564
Hoya Corp.	5,400	110,080
Inpex Holdings, Inc.	17	185,116
Japan Tobacco, Inc.	30	142,377
JFE Holdings, Inc.	700	29,582
JGC Corp.	2,000	38,299
Kao Corp.	10,000	283,130
Keyence Corp.	800	161,825
Komatsu, Ltd.	1,100	23,022
Konica Minolta Holdings, Inc.	6,000	82,697
Marubeni Corp.	8,000	49,499
Matsushita Electric Industrial Company, Ltd.	36,000	739,938
Mazda Motor Corp.	8,000	42,583
Mitsubishi Corp.	15,900	436,758
Mitsubishi Estate Company, Ltd.	3,000	66,267
Mitsubishi Gas & Chemicals Company, Inc.	4,000	22,655
Mitsui Fudosan Company, Ltd.	2,000	41,678
Mitsui O.S.K. Lines, Ltd.	4,000	47,408

See notes to financial statements

14  International Growth Fund | Semiannual report 

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

Issuer	Shares	Value
Japan (continued)
Mitsui Trust Holdings, Inc.	5,000	$27,566
Mizuho Financial Group, Inc.	13	55,340
Murata Manufacturing Company, Ltd.	1,700	74,701
NGK INSULATORS, Ltd.	2,000	24,003
Nidec Corp.	700	47,052
Nikon Corp.	4,000	129,825
Nintendo Company, Ltd.	1,100	516,406
Nippon Electric Glass Company, Ltd.	6,000	80,034
Nippon Yusen Kabushiki Kaisha	8,000	63,842
Nitto Denko Corp.	2,800	84,049
NTT DoCoMo, Inc.	68	107,169
Olympus Optical Company, Ltd.	2,000	64,980
Orix Corp.	240	29,237
Osaka Gas Company, Ltd.	3,000	10,915
Rakuten, Inc.	84	46,787
Resona Holdings, Inc.	10	11,639
Rohm Company, Ltd.	500	28,786
SANKYO Company, Ltd.	700	33,144
SBI Holdings, Inc.	56	10,042
Secom Company, Ltd.	1,700	78,312
SEGA SAMMY HOLDINGS, Inc.	3,000	28,455
Seven & I Holdings Company, Ltd.	9,000	262,148
Shimamura Company, Ltd.	500	28,001
Shin-Etsu Chemical Company, Ltd.	6,200	344,907
Shiseido Company, Ltd.	4,000	93,655
Sojitz Holdings Corp.	13,400	38,234
Sumco Corp.	900	17,830
Sumitomo Metal Industries, Ltd.	26,000	114,856
Takeda Pharmaceutical Company, Ltd.	10,700	558,971
Terumo Corp.	3,400	189,150
The Japan Steel Works, Ltd.	4,000	68,888
Tokyo Electron, Ltd.	900	50,920
Toshiba Corp.	13,000	72,512
Toyota Motor Corp.	1,000	44,618
Toyota Tsusho Corp.	1,000	17,099
Trend Micro, Inc.	1,500	50,765
Yahoo Japan Corp.	479	183,577
Yamada Denki Company, Ltd.	1,220	87,646
Luxembourg 1.63%		798,483
ArcelorMittal	10,178	798,483
Netherlands 1.73%		846,238
Fugro NV	1,192	91,928
Heineken NV	2,664	124,896
Koninklijke (Royal) KPN NV	10,034	170,248

See notes to financial statements

Semiannual 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
Netherlands (continued)
Koninklijke Boskalis Westinster NV	874	$51,623
Reed Elsevier NV	3,920	65,543
TNT Post Group NV	1,112	41,479
Unilever NV	9,622	265,498
Wolters Kluwer NV	1,439	35,023
Norway 0.65%		316,944
Statoil ASA	5,550	170,249
Telenor ASA	2,400	37,720
Yara International ASA	1,760	108,975
Portugal 0.09%		43,682
Portugal Telecom, SGPS, SA	4,181	43,682
Singapore 0.99%		485,837
Keppel Corp., Ltd.	5,000	34,723
Keppel Land, Ltd.	12,000	32,595
SembCorp Industries, Ltd.	20,000	58,055
SembCorp Marine, Ltd.	31,000	82,163
Singapore Exchange, Ltd.	7,000	30,911
Singapore Press Holdings, Ltd.	13,000	37,604
Singapore Telecommunications, Ltd.	85,000	209,786
Spain 3.36%		1,645,576
Banco Bilbao Vizcaya Argentaria SA	2,583	43,585
Corporacion Mapfre SA	9,315	44,548
Gas Natural SDG SA	769	35,626
Iberdrola SA	3,312	39,907
Industria de Diseno Textil SA	2,341	108,873
Red Electrica De Espana	1,463	86,317
Telefonica SA	52,076	1,286,720
Sweden 0.68%		330,915
Hennes & Mauritz AB, B shares	5,260	260,663
Lundin Petroleum AB, Series A *	3,600	39,269
Sandvik AB	2,500	30,983
Switzerland 11.35%		5,556,603
ABB, Ltd. *	15,717	385,502
Compagnie Financiere Richemont AG, Series A *	3,849	223,954
Credit Suisse Group AG	947	43,924
Geberit AG, ADR	329	47,887
Lonza Group AG	327	46,161
Nestle SA	37,811	1,665,937
Novartis AG	24,796	1,381,349
Roche Holdings AG Genusschein	6,062	1,020,103
Societe Generale de Surveillance Holdings AG	34	43,565
Swatch Group AG, BR shares	193	45,361
Swisscom AG	127	40,695

See notes to financial statements

16  International Growth Fund | Semiannual report 

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

Issuer	Shares	Value
Switzerland (continued)
Syngenta AG	1,739	$466,590
Synthes AG	1,052	145,575
United Kingdom 20.72%		10,140,042
3i Group PLC	3,590	59,989
Antofagasta PLC	4,725	53,109
AstraZeneca Group PLC	10,507	512,236
BAE Systems PLC	10,007	87,337
BG Group PLC	75,369	1,671,785
BHP Billiton PLC	4,495	140,001
British American Tobacco PLC	13,250	447,640
British Energy Group PLC	3,524	47,060
British Sky Broadcasting Group PLC	4,325	36,645
BT Group PLC	21,998	69,041
Burberry Group PLC	9,004	73,290
Cadbury PLC	6,591	75,639
Cairn Energy PLC *	879	47,557
Capita Group PLC	6,200	79,771
Centrica PLC	2,343	13,948
Diageo PLC	36,414	672,528
Drax Group PLC	3,707	50,281
Enterprise Inns PLC	3,027	16,653
GlaxoSmithKline PLC	94,078	2,213,735
ICAP PLC	4,136	35,613
Imperial Tobacco Group PLC	5,125	168,976
Kazakhmys PLC	391	9,175
Man Group PLC, ADR	6,791	69,978
Marks & Spencer Group PLC	3,497	16,666
Michael Page International PLC	6,669	44,433
Next Group PLC	3,364	64,909
Petrofac, Ltd. *	3,750	44,479
Prudential PLC	4,409	43,784
Reckitt Benckiser PLC	9,144	462,270
Reed Elsevier PLC	15,353	175,470
Rio Tinto PLC	9,364	888,913
Scottish & Southern Energy PLC	6,164	162,356
Smith & Nephew PLC	10,653	127,840
Smiths Group PLC	2,064	42,916
Tesco PLC	13,525	93,747
The Sage Group PLC	12,288	46,852
Thomson Reuters PLC *	3,107	86,792
Travis Perkins PLC	2,014	24,527
Tullow Oil PLC	5,468	81,958
Unilever PLC	3,019	80,976
Vedanta Resources PLC	777	25,655

See notes to financial statements

Semiannual 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
United Kingdom (continued)
Vodafone Group PLC	268,625	$686,483
William Hill PLC	5,045	25,953
Wolseley PLC	2,990	24,125
Xstrata PLC	4,250	236,951
Preferred stocks 0.15%		$75,005
(Cost $48,666)
Germany 0.15%		75,005
Volkswagen AG (f)	487	75,005
Rights 0.00%		$632
(Cost $0)
Leighton Holdings, Ltd. (Expiration Date
9-11-08, Strike Price AUD 35.35)	66	632
	Principal
Issuer, description, maturity date	amount	Value
Repurchase agreements 8.23%		$4,026,000
(Cost $4,026,000)
Repurchase Agreement with State Street Corp. dated
8-29-08 at 1.70% to be repurchased at $4,026,760
on 9-2-08, collateralized by $4,045,000 Federal Home
Loan Mortgage Corp., 4.25% due 7-15-09 (valued at
$4,110,731, including interest)	$4,026,000	4,026,000
Total investments (Cost $50,255,101)† 97.77%		$47,850,997
Other assets in excess of liabilities 2.23%		$1,089,260
Total net assets 100.00%		$48,940,257

Percentages are stated as a percent of net assets.

The portfolio had the following five top industry concentrations as of August 31, 2008 (as a percentage of total net assets):

Pharmaceuticals	10.18%
Telecommunications Equipment & Services	7.38%
Chemicals	6.21%
Drugs & Health Care	5.52%
Food & Beverages	4.30%

ADR American Depositary Receipts

GDR Global Depositary Receipts

* Non-Income Producing

(f) Variable Rate Preferred.

† At August 31, 2008, the aggregate cost of investment securities for federal income tax purposes was $50,579,092. Net unrealized depreciation aggregated $2,728,095, of which $1,557,325 related to appreciated investment securities and $4,285,420 related to depreciated investment securities.

See notes to financial statements

18  International Growth Fund | Semiannual report 

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

The Fund had the following futures contracts open on August 31, 2008:
					UNREALIZED
	NUMBER OF		EXPIRATION	NOTIONAL	APPRECIATION
OPEN CONTRACTS	CONTRACTS	POSITION	DATE	VALUE	(DEPRECIATION)
DAX Index Futures	8	Long	Sep 2008	1,287,300	($5,301)
CAC 4010 Euro Index Futures	6	Long	Sep 2008	269,100	6,406
FTSE 100 Index Futures	6	Long	Sep 2008	338,910	24,423
IBEX 35 Index Futures	1	Long	Sep 2008	117,265	4,718
OMX 30 Stock Index Futures	4	Long	Sep 2008	348,100	434
MSCI Singapore Stock
Index Futures	9	Long	Sep 2008	611,100	6,326
TOPIX Index Futures	4	Long	Sep 2008	50,200,000	5,836
Share Price 200 Index Futures	2	Short	Sep 2008	257,200	(15,422)
Total					$27,420

Open forward foreign currency contracts as of August 31, 2008, were as follows:

			UNREALIZED
	PRINCIPAL AMOUNT	SETTLEMENT	APPRECIATION
CURRENCY	COVERED BY CONTRACT	DATE	(DEPRECIATION)
Buys
Canadian Dollar	279,000	Nov 2008	$214
Euro	243,000	Nov 2008	(2,202)
Euro	129,000	Nov 2008	(3,275)
Euro	1,310,213	Nov 2008	(13,240)
Japanese Yen	166,621,318	Nov 2008	19,151
Japanese Yen	22,188,000	Nov 2008	1,753
Japanese Yen	152,008,318	Nov 2008	16,984
Japanese Yen	156,614,631	Nov 2008	17,916
New Zealand Dollar	194,745	Nov 2008	(2,392)
Pound Sterling	198,000	Nov 2008	(6,539)
Pound Sterling	50,000	Nov 2008	(2,319)
Pound Sterling	86,000	Nov 2008	(8,221)
Singapore Dollar	394,000	Nov 2008	(943)
Swedish Krona	7,001,336	Nov 2008	(16,353)
Swedish Krona	7,001,336	Nov 2008	(16,160)
Swiss Franc	225,000	Nov 2008	(4,077)
Swiss Franc	251,000	Nov 2008	(1,770)
Swiss Franc	767,295	Nov 2008	(1,124)
			($22,597)
Sells
Australian Dollar	207,325	Nov 2008	$11,349
Australian Dollar	2,081,542	Nov 2008	25,422
Canadian Dollar	722,079	Nov 2008	7,628
Danish Kroner	4,662,927	Nov 2008	910
Danish Kroner	736,405	Nov 2008	7,457
Hong Kong Dollar	3,116,000	Nov 2008	(340)
Japanese Yen	66,364,029	Nov 2008	5,050
Norwegian Krone	1,808,034	Nov 2008	12,026
Pound Sterling	100,964	Nov 2008	12,975
Pound Sterling	844,000	Nov 2008	35,555
Swiss Franc	765,040	Nov 2008	30,638
			$148,670

See notes to financial statements

Semiannual 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 8-31-08 (unaudited)

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 $50,255,101)	$47,850,997
Cash	609
Cash collateral at broker for futures contracts	400,000
Foreign currency, at value (Cost $153,310)	152,292
Receivable for forward foreign currency exchange contracts (Note 2)	205,047
Receivable for fund shares sold	390,008
Dividends and interest receivable (net of tax)	95,806
Receivable for futures variation margin	23,089
Receivable due from adviser	3,304
Other assets	34,328
Total assets	49,155,480
Liabilities
Payable for forward foreign currency exchange contracts (Note 2)	78,974
Payable for fund shares repurchased	37,356
Payable to affiliates
Fund administration fees	470
Transfer agent fees	5,364
Distribution and service fees	192
Trustees’ fee	1,338
Other payables and accrued expenses	91,529
Total liabilities	215,223
Net assets
Capital paid-in	$53,094,598
Accumulated net investment income	770,046
Accumulated undistributed net realized loss on investments, futures
contracts and foreign currency transactions	(2,668,172)
Net unrealized depreciation on investments, futures contract and
translation of assets and liabilities in foreign currencies	(2,256,215)
Net assets	$48,940,257

See notes to financial statements

20  International Growth Fund | Semiannual report 

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	$23,903,625
Shares outstanding	1,138,588
Net asset value and redemption price per share	$20.99
Class B1
Net assets	$1,009,638
Shares outstanding	48,407
Net asset value and offering price per share	$20.86
Class C1
Net assets	$1,339,598
Shares outstanding	64,263
Net asset value and offering price per share	$20.85
Class I
Net assets	$12,411,755
Shares outstanding	588,953
Net asset value, offering price and redemption price per share	$21.07
Class R1
Net assets	$128,858
Shares outstanding	6,155
Net asset value, offering price and redemption price per share	$20.932
Class 1
Net assets	$3,316,228
Shares outstanding	157,418
Net asset value, offering price and redemption price per share	$21.07
Class NAV
Net assets	$6,830,555
Shares outstanding	324,838
Net asset value, offering price and redemption price per share	$21.03
Maximum public offering price per share
Class A (net asset value per share ÷ 95%)3	$22.09

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 August 31, 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

Semiannual 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 period ended 8-31-08 (unaudited)¹

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	$836,965
Interest	16,292
Less foreign taxes withheld	(69,204)
Total investment income	784,053
Expenses
Investment management fees (Note 3)	203,163
Distribution and service fees (Note 3)	56,205
Transfer agent fees (Note 3)	13,746
Fund administration fees (Note 3)	2,312
Blue sky fees (Note 3)	37,428
Custodian fees	69,512
Audit and legal fees	22,722
Registration and filing fees	8,807
Printing and postage fees (Note 3)	5,444
Trustees’ fees (Note 4)	2,131
Miscellaneous	266
Total expenses	421,736
Less expense reductions (Note 3)	(95,319)
Less transfer agency credits (Note 3)	(56)
Net expenses	326,361
Net investment income	457,692
Realized and unrealized loss
Net realized loss on
Investments in unaffiliated issuers	(1,236,471)
Futures contracts	(357,701)
Foreign currency transactions	(184,801)
	(1,778,973)
Change in net unrealized appreciation (depreciation) of
Investments in unaffiliated issuers	(2,741,158)
Futures contracts��	266,402
Translation of assets and liabilities in foreign currencies	(24,860)
	(2,499,616)
Net realized and unrealized loss	(4,278,589)
Decrease in net assets from operations	($3,820,897)

¹ Semiannual period from 3-1-08 to 8-31-08.

See notes to financial statements

22  International Growth Fund | Semiannual report 

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

Statements 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	Period
	ended	ended
	2-29-08	8-31-081
Increase (decrease) in net assets
From operations
Net investment income	$364,838	$457,692
Net realized gain (loss)	1,778,824	(1,778,973)
Change in net unrealized appreciation (depreciation)	(2,453,128)	(2,499,616)
Decrease in net assets resulting from operations	(309,466)	(3,820,897)
Distributions to shareholders
From net investment income
Class A	(202,592)	—
Class I	(5,357)	—
Class R1	(830)	—
Class 1	(26,034)	—
Class NAV	(90,102)	—
From net realized gain
Class A	(1,859,952)	—
Class B	(90,466)	—
Class C	(159,205)	—
Class I	(32,275)	—
Class R1	(9,214)	—
Class 1	(149,968)	—
Class NAV	(497,276)	—
Total distributions	(3,123,271)	—
From Fund share transactions (Note 5)	20,872,603	11,774,178
Total increase	17,439,866	7,953,281
Net assets
Beginning of period	23,547,110	40,986,976
End of period	$40,986,976	$48,940,257
Accumulated net investment income	312,354	770,046

¹ Semiannual period from 3-1-08 to 8-31-08. Unaudited.

See notes to financial statements

Semiannual report | International Growth 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	8-31-082
Per share operating performance
Net asset value, beginning of period	$20.00	$23.94	$22.86
Net investment income (loss)3	(0.01)	0.26	0.25
Net realized and unrealized
gain (loss) on investments	4.44	0.53	(2.12)
Total from investment operations	4.43	0.79	(1.87)
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	$20.99
Total return (%)4,5	22.186	2.85	(8.18)6
Ratios and supplemental data
Net assets, end of period (in millions)	$20	$26	$24
Ratios (as a percentage of average net assets):
Expenses before reductions	2.287	2.21	1.867
Expenses net of fee waivers	1.667	1.56	1.567
Expenses net of all fee waivers and credits	1.667	1.56	1.567
Net investment income (loss)	(0.06)7	1.02	2.147
Portfolio turnover (%)	41	97	37

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

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

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 Assumes dividend reinvestment and does not reflect the effect of sales charges.

⁶ Not annualized.

⁷ Annualized.

See notes to financial statements

24  International Growth Fund | Semiannual report 

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	8-31-082
Per share operating performance
Net asset value, beginning of period	$20.00	$23.91	$22.81
Net investment income (loss)3	(0.16)	(0.01)	0.14
Net realized and unrealized
gain (loss) on investments	4.48	0.60	(2.09)
Total from investment operations	4.32	0.59	(1.95)
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	$20.86
Total return (%)4,5	21.646	2.03	(8.55)6
Ratios and supplemental data
Net assets, end of period (in millions)	$1	$1	$1
Ratios (as a percentage of average net assets):
Expenses before reductions	10.947	4.62	3.987
Expenses net of fee waivers	2.397	2.41	2.407
Expenses net of all fee waivers and credits	2.397	2.40	2.407
Net investment income (loss)	(0.94)7	(0.03)	1.277
Portfolio turnover (%)	41	97	37

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

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

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 Assumes dividend reinvestment.

⁶ Not annualized.

⁷ Annualized.

See notes to financial statements

Semiannual report | International Growth 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	8-31-082
Per share operating performance
Net asset value, beginning of period	$20.00	$23.90	$22.79
Net investment income (loss)3	(0.16)	0.05	0.17
Net realized and unrealized
gain (loss) on investments	4.47	0.53	(2.11)
Total from investment operations	4.31	0.58	(1.94)
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	$20.85
Total return (%)4,5	21.596	1.99	(8.51)6
Ratios and supplemental data
Net assets, end of period (in millions)	$2	$2	$1
Ratios (as a percentage of average net assets):
Expenses before reductions	6.717	3.73	3.367
Expenses net of fee waivers	2.397	2.40	2.407
Expenses net of all fee waivers and credits	2.397	2.40	2.407
Net investment income (loss)	(0.98)7	0.21	1.467
Portfolio turnover (%)	41	97	37

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

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

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 Assumes dividend reinvestment.

⁶ Not annualized.

⁷ Annualized.

See notes to financial statements

26  International Growth Fund | Semiannual report 

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	8-31-082
Per share operating performance
Net asset value, beginning of period	$20.00	$23.97	$22.90
Net investment income3	0.07	0.36	0.09
Net realized and unrealized
gain (loss) on investments	4.45	0.54	(1.92)
Total from investment operations	4.52	0.90	(1.83)
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	$21.07
Total return (%)4,5	22.606	3.27	(7.99)6
Ratios and supplemental data
Net assets, end of period (in millions)	— 7	$1	$12
Ratios (as a percentage of average net assets):
Expenses before reductions	17.208	5.07	1.888
Expenses net of fee waivers	1.198	1.20	1.208
Expenses net of all fee waivers and credits	1.198	1.20	1.208
Net investment income	0.428	1.43	0.818
Portfolio turnover (%)	41	97	37

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

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

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 Assumes dividend reinvestment.

⁶ Not annualized.

⁷ Less than $500,000.

⁸ Annualized.

See notes to financial statements

Semiannual report | International Growth 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	8-31-082
Per share operating performance
Net asset value, beginning of period	$20.00	$23.89	$22.81
Net investment income (loss)3	(0.05)	0.25	0.22
Net realized and unrealized
gain (loss) on investments	4.43	0.51	(2.10)
Total from investment operations	4.38	0.76	(1.88)
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	$20.93
Total return (%)4,5	21.926	2.73	(8.24)6
Ratios and supplemental data
Net assets, end of period (in millions)	—7	—7	—7
Ratios (as a percentage of average net assets):
Expenses before reductions	20.788	14.42	13.478
Expenses net of fee waivers	1.948	1.70	1.708
Expenses net of all fee waivers and credits	1.948	1.70	1.708
Net investment income (loss)	(0.32)8	1.00	1.978
Portfolio turnover (%)	41	97	37

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

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

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 Assumes dividend reinvestment.

⁶ Not annualized.

⁷ Less than $500,000.

⁸ Annualized.

See notes to financial statements

28  International Growth Fund | Semiannual report 

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	8-31-082
Per share operating performance
Net asset value, beginning of period	$20.00	$23.97	$22.89
Net investment income3	0.07	0.29	0.28
Net realized and unrealized
gain (loss) on investments	4.45	0.61	(2.10)
Total from investment operations	4.52	0.90	(1.82)
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	$21.07
Total return (%)4,5	22.636	3.28	(7.95)6
Ratios and supplemental data
Net assets, end of period (in millions)	$1	$3	$3
Ratios (as a percentage of average net assets):
Expenses before reductions	2.007	1.83	1.457
Expenses net of fee waivers	1.157	1.15	1.157
Expenses net of all fee waivers and credits	1.157	1.15	1.157
Net investment income	0.417	1.14	2.457
Portfolio turnover (%)	41	97	37

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

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

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 Assumes dividend reinvestment.

⁶ Not annualized.

⁷ Annualized.

See notes to financial statements

Semiannual report | International Growth Fund  29 

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	8-31-082
Per share operating performance
Net asset value, beginning of period	$23.73	$23.92	$22.84
Net investment income3	0.01	0.33	0.30
Net realized and unrealized
gain (loss) on investments	0.18	0.59	(2.11)
Total from investment operations	0.19	0.92	(1.81)
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	$21.03
Total return (%)4,5	0.806	3.34	(7.92)6
Ratios and supplemental data
Net assets, end of period (in millions)	$1	$8	$7
Ratios (as a percentage of average net assets):
Expenses before reductions	2.757	1.77	1.407
Expenses net of fee waivers	1.137	1.10	1.107
Expenses net of all fee waivers and credits	1.137	1.10	1.107
Net investment income	0.147	1.33	2.597
Portfolio turnover (%)	41	97	37

¹ Class NAV shares began operations on 12-27-06.

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

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 Assumes dividend reinvestment.

⁶ Not annualized.

⁷ Annualized.

See notes to financial statements

30  International Growth Fund | Semiannual report 

Notes to financial statements (unaudited)

Note 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 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.

Note 2
Significant accounting policies

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:

Security valuation

The net asset value of Class A, Class B, Class C, Class I, Class R1, Class 1 and Class NAV 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) as of the close of business on the

Semiannual report | International Growth Fund  31 

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 the 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 a Fund investing significant amounts of assets in securities in foreign markets will be fair valued more frequently than a Fund 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 investments 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 that tracks foreign markets in which the Fund has significant investments. If a significant market event occurs due to a change in the value of the index, the pricing for investments in foreign markets that have closed prior to the NYSE will promptly be reviewed and potential adjustments to the net asset value will be recommended to the Fund’s Pricing Committee where applicable.

Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity.

The Fund adopted Statement of Financial Accounting Standards No. 157 (FAS 157), Fair Value Measurements, effective with the beginning of the Fund’s fiscal year. FAS 157 established a three-tier hierarchy to prioritize the assumptions, referred to as inputs, used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below:

Level 1 — Quoted prices in active markets for identical securities.

Level 2 — Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants would use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.

Level 3 — Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable, such as when there is little or no market activity for an investment, unobservable inputs may be used. Unobservable inputs reflect the Fund’s own

32  International Growth Fund | Semiannual report 

assumptions about the factors that market participants would use in pricing an investment and would be based on the best information available.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used to value the Fund’s net assets as of August 31, 2008:

	INVESTMENTS IN	OTHER FINANCIAL
VALUATION INPUTS	SECURITIES	INSTRUMENTS*
Level 1 — Quoted Prices	$2,797,671	$27,420
Level 2 — Other Significant Observable Inputs	45,053,326	126,073
Level 3 — Significant Unobservable Inputs	—	—
Total	$47,850,997	$153,493

*Other financial instruments are derivative instruments not reflected in the Portfolio of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/ depreciation on the instrument.

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 translation

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.

Investment transactions

Investment transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment security transactions are reported on trade date. Interest income is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date net of foreign withholding taxes. Realized gains and losses from investment transactions are recorded on an identified cost basis.

Class allocations

Income, common expenses and realized and unrealized gains (losses) are determined at the fund level and allocated daily to each class of shares based on the appropriate net asset value of the respective classes. Distribution and service fees, if any, and transfer agent fees for Class A, Class B, Class C, Class I, Class R1, Class 1 and Class NAV shares

Semiannual report | International Growth Fund  33 

are calculated daily at the class level based on the appropriate net asset value of each class and the specific expense rate(s) applicable to each class.

Guarantees and indemnifications

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

Expenses

The majority of expenses are directly identifiable to an individual fund. Trust expenses that are not readily identifiable to a specific fund are allocated in such a manner as deemed equitable, taking into consideration, among other things, the nature and type of expense and the relative size of the funds.

Line of credit

The Fund has entered into an agreement which enables them to participate in a $150 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. For the period ended August 31, 2008, there were no borrowings under the line of credit.

Pursuant to the custodian agreement, the Custodian may, in its discretion, advance funds to the Fund to make properly authorized payments. When such payments result in an overdraft, the Fund is obligated to repay the Custodian for any overdraft, including any costs or expenses associated with the overdraft. The Custodian has a lien and security interest in any Fund property to the extent of any overdraft.

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 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.

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

34  International Growth Fund | Semiannual report 

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.

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 Financial Accounting Standards Board (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 two years remain subject to examination by the Internal Revenue Service.

Risks associated with foreign investments

Investing in securities issued by companies whose principal business activities are outside the United States may involve significant risks not present in domestic investments. For example, there is generally less publicly available information about foreign companies, particularly those not subject to the disclosure and reporting requirements of the U.S. securities laws. Foreign issuers are generally not bound by uniform accounting, auditing, and financial reporting requirements and standards of practice comparable to those applicable to domestic issuers. Investments in foreign securities also involve the risk of possible adverse changes in investment or exchange control regulations, expropriation or confiscatory taxation, limitation on the removal of funds or other assets of the Fund, political or financial instability or diplomatic and other developments which could affect such investments. Foreign stock markets, while growing in volume and sophistication, are generally not as developed as those in the United States, and securities of some foreign issuers (particularly those located in developing countries) may be less liquid and more volatile than securities of comparable U.S. companies. In general, there is less overall governmental supervision and regulation of foreign securities markets, broker-dealers and issuers than in the United States.

New accounting pronouncement

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 and interim reporting periods 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. M anagement is currently evaluating the adoption of FAS 161 on the Fund’s financial statement disclosures.

Semiannual report | International Growth Fund  35 

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. The Fund declares income dividends and capital gains dividends, if any, annually. 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 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.

Such distributions, 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.

Note 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 subadvis-ers 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) 0.88% 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. 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 period ended August 31, 2008, were equivalent to an annual effective rate of 0.92% of the Fund’s average daily net assets.

The Adviser has contractually agreed to reimburse or limit certain Fund level expenses to 0.18% of the Fund’s average annual net assets which are allocated pro rata to all share classes. The agreements exclude taxes, portfolio brokerage commissions, interest, advisory fees, Rule 12b-1 fees, transfer agency fees, blue sky fees, printing and postage, 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 $39,287, $9,272, $9,349, $12,969, $8,083, $5,029 and $11,241 for Class A, Class B, Class C, Class I, Class R1, Class 1 and Class NAV, respectively for the period ended August 31, 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.

36  International Growth Fund | Semiannual report 

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 period ended August 31, 2008, were $2,312 with an annual effective rate of 0.01% of the Fund’s average daily net assets.

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 the 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 period ended August 31, 2008.

Class A shares are assessed up-front sales charges of up to 5.00% of the net asset value of such shares. During the period ended August 31, 2008, the Distributor received net up-front sales charges of $6,340 with regard to sales of Class A shares. Of this amount, $1,008 was retained and used for printing prospectuses, advertising, sales literature and other purposes, $5,265 was paid as sales commissions to unrelated broker-dealers and $67 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 period ended August 31, 2008, CDSCs received by the Distributor amounted to $1,532 for Class B shares and $627 for Class C shares.

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 $16.50 for each Class A, Class B, Class C, Class I and 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

Semiannual report | International Growth Fund  37 

reductions for Class A, Class B, Class C, Class I and Class R1 shares, respectively, during the period ended August 31, 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 period ended August 31, 2008, the transfer agent fees reductions for Class R1 were $89.

The Fund receives 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 period ended August 31, 2008, the Fund’s transfer agent fees and out-of-pocket expenses were reduced by $56 for transfer agent credits earned.

Class level expenses including the allocation of the transfer agent fees for the period ended August 31, 2008, were as follows:

	Distribution and	Transfer		Printing and
Share class	service fees	agent fees	Blue sky fees	postage fees
Class A	$39,408	$9,226	$7,420	$4,422
Class B	5,876	1,776	7,334	195
Class C	9,746	1,667	7,352	391
Class I	—	953	7,502	226
Class R1	347	124	7,820	91
Class 1	828	—	—	119
Total	$56,205	$13,746	$37,428	$5,444

The Adviser and other subsidiaries of John Hancock USA owned 797,040 and 5,491 shares of beneficial interest of Class A and Class R1 on August 31, 2008.

Note 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.

38  International Growth Fund | Semiannual report 

Note 5
Fund share transactions

This listing illustrates the number of Fund shares sold, reinvested and repurchased during the year ended February 29, 2008, and the period ended August 31, 2008, along with the corresponding dollar value.

		Year ended 2-29-08	Period ended 8-31-081
	Shares	Amount	Shares	Amount
Class A shares
Sold	414,385	$10,585,758	81,426	$1,842,497
Distributions reinvested	80,686	1,966,314	—	—
Repurchased	(172,237)	(4,088,612)	(94,294)	(2,201,093)
Net increase (decrease)	322,834	$8,463,460	(12,868)	($358,596)
Class B shares
Sold	49,493	$1,301,454	5,730	$132,380
Distributions reinvested	3,261	79,442	—	—
Repurchased	(22,033)	(551,497)	(9,281)	(204,843)
Net increase (decrease)	30,721	$829,399	(3,551)	($72,463)
Class C shares
Sold	55,553	$1,402,156	2,608	$57,341
Distributions reinvested	4,414	107,446	—	—
Repurchased	(21,855)	(509,068)	(41,872)	(930,961)
Net increase (decrease)	38,112	$1,000,534	(39,264)	($873,620)
Class I shares
Sold	148,817	$3,828,656	567,688	$12,548,863
Distributions reinvested	1,455	35,510	—	—
Repurchased	(133,227)	(3,446,247)	(4,646)	(104,035)
Net increase	17,045	$417,919	563,042	$12,444,828
Class R1 shares
Sold	482	$12,483	215	$4,955
Distributions reinvested	413	10,043	—	—
Repurchased	(4)	(89)	(55)	(1,271)
Net increase	891	$22,437	160	$3,684
Class 1 shares
Sold	124,068	$3,141,773	66,994	$1,520,170
Distributions reinvested	7,219	176,002	—	—
Repurchased	(31,315)	(790,808)	(32,604)	(740,202)
Net increase	99,972	$2,526,967	34,390	$779,968
Class NAV shares
Sold	299,764	$7,594,950	34,518	$781,718
Distributions reinvested	24,142	587,378	—	—
Repurchased	(23,722)	(570,441)	(41,346)	(931,341)
Net increase (decrease)	300,184	$7,611,887	(6,828)	($149,623)
Net increase	809,759	$20,872,603	535,081	$11,774,178
1 Semiannual period from 3-1-08 to 8-31-08. Unaudited.

Note 6
Purchase and sale 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 period ended August 31, 2008, aggregated $22,808,465 and $15,187,590, respectively.

Semiannual report | International Growth Fund  39 

Board Consideration of and Continuation
of Investment Advisory Agreement and
Subadvisory Agreement: John Hancock
International Growth Fund

The Investment Company Act of 1940 (the 1940 Act) requires the Board of Trustees (the Board) of John Hancock Funds III (the Trust), including a majority of the Trustees who have no direct or indirect interest in the investment advisory agreement and are not “interested persons” of the Trust, as defined in the 1940 Act (the Independent Trustees), annually to meet in person to review and consider the continuation of: (i) the investment advisory agreement (the Advisory Agreement) with John Hancock Investment Management Services, LLC (the Adviser) and (ii) the investment subadvisory agreement (the Subadvisory Agreement) with Grantham, Mayo, Van Otterloo & Co. LLC (the Subadviser) for the John Hancock International Growth Fund (the Fund). The Advisory Agreement and the Subadvisory Agreement are collectively referred to as the Advisory Agreements.

At meetings held on May 5–6 and June 9–10, 2008, the Board considered the factors and reached the conclusions described below relating to the selection of the Adviser and Subadviser and the continuation of the Advisory Agreements. During such meetings, the Board’s Contracts/ Operations Committee and the Independent Trustees also met in executive sessions with their independent legal counsel.

In evaluating the Advisory Agreements, the Board, including the Contracts/Operations Committee and its Independent Trustees, reviewed a broad range of information requested for this purpose. This information included:

(i) the investment performance of the Fund relative to a category of relevant funds (the “Category”) and a peer group of comparable funds (the “Peer Group”). The funds within each Category and Peer Group were selected by Morningstar Inc. (“Morningstar”), an independent provider of investment company data. Data covered the period since the Fund’s inception through December 31, 2007,

(ii) advisory and other fees incurred by, and the expense ratios of, the Fund relative to a Category and a Peer Group,

(iii) the advisory fees of comparable portfolios of other clients of the Adviser and the Subadviser,

(iv) the Adviser’s financial results and condition, including its and certain of its affiliates’ profitability from services performed for the Fund,

(v) breakpoints in the Fund’s and the Peer Group’s fees, and information about economies of scale,

(vi) the Adviser’s and Subadviser’s record of compliance with applicable laws and regulations, with the Fund’s investment policies and restrictions, and with the applicable Code of Ethics, and the structure and responsibilities of the Adviser’s and Subadviser’s compliance department,

(vii) the background and experience of senior management and investment professionals, and

(viii) the nature, cost and character of advisory and non-investment management services provided by the Adviser and its affiliates and by the Subadviser.

The Independent Trustees considered the legal advice of independent legal counsel and relied on their own business judgment in determining the factors to be considered in evaluating the materials that were presented to them and the weight to be given to each such factor. The Board’s review and conclusions were based on a comprehensive consideration of all information presented to the Board and not the result of any single controlling factor. The Board principally considered data on performance and other information provided by Morningstar as of December 31, 2007. The Board also considered updated performance information provided to it by the Adviser or Subadviser at its May and June 2008 meetings. Performance and other information may be quite different as of the date of this shareholders report. The key factors

40  International Growth Fund | Semiannual report 

considered by the Board and the conclusions reached are described below.

Nature, extent and quality of services

The Board considered the ability of the Adviser and the Subadviser, based on their resources, reputation and other attributes, to attract and retain qualified investment professionals, including research, advisory, and supervisory personnel. The Board considered the investment philosophy, research and investment decision-making processes of the Adviser and Subadviser. The Board considered the Adviser’s execution of its oversight responsibilities. The Board further considered the culture of compliance, resources dedicated to compliance, compliance programs and compliance records of the Adviser and Subadviser. In addition, the Board took into account the administrative and other non-advisory services provided to the Fund by the Adviser and its affiliates.

Based on the above factors, together with those referenced below, the Board concluded that, within the context of its full deliberations, the nature, extent and quality of the investment advisory services provided to the Fund by the Adviser and Subadviser supported renewal of the Advisory Agreements.

Fund performance

The Board noted that the Fund had less than two full years of operational history, and considered the performance results for the Fund since its inception through December 31, 2007. The Board also considered these results in comparison to the performance of the Category, as well as the Fund’s Peer Group and benchmark indices. The Board reviewed with representatives of Morningstar the methodology used by Morningstar to select the funds in the Category and the Peer Group.

The Board noted that the Fund’s performance during the 1-year period was lower than the performance of the Category median, and its benchmark indices, the Standard & Poor’s/ Citigroup PMI EPAC Growth Index and the MSCI World Ex US NR Index. The Board viewed favorably that the Fund’s performance was higher than the performance of its Peer Group median.

Investment advisory fee and subadvisory fee rates and expenses

The Board reviewed and considered the contractual investment advisory fee rate payable by the Fund to the Adviser for investment advisory services (the Advisory Agreement Rate). The Board received and considered information comparing the Advisory Agreement Rate with the advisory fees for the Peer Group and Category. The Board noted that the Advisory Agreement Rate was lower than the median rate of the Peer Group and not appreciably higher than the median rate of the Category.

The Board received and considered expense information regarding the Fund’s various components, including advisory fees, distribution and fees other than advisory and distribution fees, including transfer agent fees, custodian fees, and other miscellaneous fees (e.g., fees for accounting and legal services). The Board considered comparisons of these expenses to the Peer Group median. The Board also received and considered expense information regarding the Fund’s total operating expense ratio (Gross Expense Ratio) and total operating expense ratio after taking the fee waiver arrangement applicable to the Advisory Agreement Rate into account (Net Expense Ratio). The Board received and considered information comparing the Gross Expense Ratio and Net Expense Ratio of the Fund to that of the Peer Group and Category medians. The Board noted that the Fund’s Gross Expense Ratio was higher than the median of the Peer Group and Category. The Board also noted that the Fund’s Net Expense Ratio was higher than the Category median but lower than the Peer Group median.

The Adviser also discussed the Morningstar data and rankings, and other relevant information, for the Fund. Based on the above-referenced considerations and other factors, the Board concluded that the Fund’s overall performance and expenses supported the re-approval of the Advisory Agreements.

The Board also received information about the investment subadvisory fee rate (the Subadvisory Agreement Rate) payable by the Adviser to the Subadviser for investment sub-advisory services. The Board concluded that the Subadvisory Agreement Rate was fair and

Semiannual report | International Growth Fund  41 

equitable, based on its consideration of the factors described here.

Profitability

The Board received and considered a detailed profitability analysis of the Adviser based on the Advisory Agreements, as well as on other relationships between the Fund and the Adviser and its affiliates. The Board also considered a comparison of the Adviser’s profitability to that of other similar investment advisers whose profitability information is publicly available. The Board concluded that, in light of the costs of providing investment management and other services to the Fund, the profits and other ancillary benefits reported by the Adviser were not unreasonable.

The Board did not consider profitability information with respect to the Subadviser, which is not affiliated with the Adviser. The Board considered that the Subadvisory Agreement Rate paid to the Subadviser had been negotiated by the Adviser on an arm’s length basis and that the Subadviser’s separate profitability from its relationship with the Fund was not a material factor in determining whether to renew the agreement.

Economies of scale

The Board received and considered general information regarding economies of scale with respect to the management of the Fund, including the Fund’s ability to appropriately benefit from economies of scale under the Fund’s fee structure. The Board recognized the inherent limitations of any analysis of economies of scale, stemming largely from the Board’s understanding that most of the Adviser’s costs are not specific to individual Funds, but rather are incurred across a variety of products and services.

To the extent the Board and the Adviser were able to identify actual or potential economies of scale from Fund-specific or allocated expenses, in order to ensure that any such economies continue to be reasonably shared with the Fund as its assets increase, the Adviser and the Board agreed to continue the existing breakpoints to the Advisory Agreement Rate.

Information about services to other clients

The Board also received information about the nature, extent and quality of services and fee rates offered by the Adviser and Subadviser to their other clients, including other registered investment companies, institutional investors and separate accounts. The Board concluded that the Advisory Agreement Rate and the Subadvisory Agreement Rate were not unreasonable, taking into account fee rates offered to others by the Adviser and Subadviser, respectively, after giving effect to differences in services.

Other benefits to the Adviser

The Board received information regarding potential “fall-out” or ancillary benefits received by the Adviser and its affiliates and the Subadviser as a result of their relationship with the Fund. Such benefits could include, among others, benefits directly attributable to the relationship of the Adviser and Subadviser with the Fund and benefits potentially derived from an increase in business as a result of their relationship with the Fund (such as the ability to market to shareholders other financial products offered by the Adviser and its affiliates).

The Board also considered the effectiveness of the Adviser’s, Subadviser’s and Fund’s policies and procedures for complying with the requirements of the federal securities laws, including those relating to best execution of portfolio transactions and brokerage allocation.

Other factors and broader review

As discussed above, the Board reviewed detailed materials received from the Adviser and Subadviser as part of the annual re-approval process. The Board also regularly reviews and assesses the quality of the services that the Fund receives throughout the year. In this regard, the Board reviews reports of the Adviser at least quarterly, which include, among other things, fund performance reports and compliance reports. In addition, the Board meets with portfolio managers and senior investment officers at various times throughout the year.

After considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Board concluded that approval of the continuation of the Advisory Agreements for the Fund was in the best interest of the Fund and its shareholders. Accordingly, the Board unanimously approved the continuation of the Advisory Agreements.

42  International Growth Fund | Semiannual report 

More information

Trustees	Investment adviser
James F. Carlin, Chairman	John Hancock Investment Management
James R. Boyle†	Services, LLC
William H. Cunningham
Deborah C. Jackson	Subadviser
Charles L. Ladner*	Grantham, Mayo, Van Otterloo & Co. LLC
Stanley Martin*
Dr. John A. Moore*	Principal distributor
Patti McGill Peterson*	John Hancock Funds, LLC
Steven R. Pruchansky
Gregory A. Russo*	Custodian
*Members of the Audit Committee	State Street Bank & Trust Company
†Non-Independent Trustee
	Transfer agent
Officers	John Hancock Signature Services, Inc.
Keith F. Hartstein
President and Chief Executive Officer	Legal counsel
	K&L Gates LLP
Thomas M. Kinzler
Secretary and Chief Legal Officer
Francis V. Knox, Jr.
Chief Compliance Officer
Charles A. Rizzo
Chief Financial Officer
Gordon M. Shone
Treasurer
John G. Vrysen
Chief Operating Officer

Additional information about your fund is available without charge in several ways. As required by the SEC, you can access proxy voting information and quarterly portfolio information on your fund. The proxy voting information includes a description of proxy voting policies, procedures and information regarding how the fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30. The quarterly portfolio information that includes a complete list of the fund’s holdings for the first and third quarters of the fund’s fiscal period is filed on Form N-Q. You have access to this information:

By phone	On the fund’s Website		At the SEC
1-800-225-5291	www.jhfunds.com		www.sec.gov
			1-800-SEC-0330
			SEC Public Reference Room
You can also contact us:
Regular mail		Express mail
John Hancock Signature Services, Inc.		John Hancock Signature Services, Inc.
P.O. Box 9510		Mutual Fund Image Operations
Portsmouth, NH 03802-9510		164 Corporate Drive
		Portsmouth, NH 03801

Month-end portfolio holdings are available at www.jhfunds.com.

Semiannual report | International Growth Fund  43 

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 International Growth Fund.	870SA 8/08
It is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus.	10/08

A look at performance

For the periods ended August 31, 2008

		Average annual returns (%)				Cumulative total returns (%)
		with maximum sales charge (POP)				with maximum sales charge (POP)
	Inception				Since	Six				Since
Class	date	1-year	5-year	10-year	inception	months	1-year	5-year	10-year	inception
A	12-29-06	–20.13	—	—	–9.19	–15.13	–20.13	—	—	–14.90
B	12-29-06	–20.53	—	—	–9.20	–15.44	–20.53	—	—	–14.92
C	12-29-06	–17.34	—	—	–7.01	–11.78	–17.34	—	—	–11.45
I1	12-29-06	–15.62	—	—	–5.97	–10.43	–15.62	—	—	–9.79

Performance figures assume all distributions are reinvested. Public offering price (POP) figures reflect maximum sales charges 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 June 30, 2009. The following expense ratios include expenses of the underlying affiliated funds in which the Portfolio invests. The net expenses are as follows: Class A — 1.67%, Class B —2.37%, Class C — 2.37%, Class I — 1.22%. Had the fee waivers and expense limitations not been in place, the gross expenses would be as follows: Class A — 2.15%, Class B — 5.06%, Class C — 3.35%, Class I — 8.21%.

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 current to the most recent month end performance data, 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.

6  International Allocation Portfolio | Semiannual report 

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 in the MSCI EAFE Gross Total Return Index.

			With maximum
Class	Period beginning	Without sales charge	sales charge	Index
B2	12-29-06	$8,845	$8,508	$9,272
C2,3	12-29-06	8,855	8,855	9,272
I2,4	12-29-06	9,021	9,021	9,272

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 August 31, 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 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.

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 figure as of closest month end to fund inception date.

³ No contingent deferred sales charge applicable.

⁴ For certain types of investors as described in the Portfolio’s Class I share prospectus.

Semiannual report | International Allocation Portfolio  7 

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 March 1, 2008 with the same investment held until August 31, 2008.

	Account value	Ending value	Expenses paid during
	on 3-1-08	on 8-31-08	period ended 8-31-081
Class A	$1,000.00	$893.50	$2.91
Class B	1,000.00	890.10	6.34
Class C	1,000.00	891.10	6.34
Class I	1,000.00	895.70	0.86

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 August 31, 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:

8  International Allocation Portfolio | Semiannual report 

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 March 1, 2008, with the same investment held until August 31, 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 3-1-08	on 8-31-08	period ended 8-31-081
Class A	$1,000.00	$1,022.10	$3.11
Class B	1,000.00	1,018.50	6.77
Class C	1,000.00	1,018.50	6.77
Class I	1,000.00	1,024.30	0.92

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 0.61%, 1.33%, 1.33% and 0.18% 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 the most recent fiscal half-year/365 (to reflect the one-half year period).

Semiannual report | International Allocation Portfolio  9 

Portfolio summary

Asset allocation1	% of Total
International Large Cap	77%
International Small Cap	14%
Emerging Markets	7%
China	2%

As a percentage of net assets on August 31, 2008.

¹ International investing involves special risks such as political, economic and currency risks and differences in accounting standards and financial reporting. See the prospectus for the risks of investing in small-cap stocks. See the prospectus for the risks of investing in high-yield bonds.

10  International Allocation Portfolio | Semiannual report 

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 8-31-08 (unaudited)

Portfolio investments, showing all affiliated underlying funds.

Issuer	Shares	Value
Investment companies 100.11%		$37,415,026
(Cost $45,481,144)
John Hancock Funds 17.17%		6,416,456
Greater China Opportunities
(MFC Global Investment Management (U.S.A.) Ltd.) (c)(f)	40,932	730,221
International Classic Value
(Pzena Investment Management, LLC) (f)	717,054	5,686,235
John Hancock Funds II 64.72%		24,187,625
Emerging Markets Value
(Dimensional Fund Advisors, Inc.) (f)	277,716	2,629,967
International Opportunities
(Marsico Capital Management, LLC) (f)	546,753	8,310,646
International Small Company
(Dimensional Fund Advisors, Inc.) (f)	625,597	5,311,319
International Value
(Franklin® Templeton®) (f)	507,397	7,935,693
John Hancock Funds III 18.22%		6,810,945
International Growth
(Grantham, Mayo, Van Otterloo & Company) (f)	323,868	6,810,945
Total investments (Cost $45,481,144)† 100.11%		$37,415,026
Liabilities in excess of other assets (0.11%)		($42,943)
Total net assets 100.00%		$37,372,083

Percentages are stated as a percent of net assets.

(c) The investment is an affiliate of the Fund’s subadviser.

(f) The underlying fund’s subadviser.

† At August 31, 2008, the aggregate cost of investment securities for federal income tax purposes was $46,004,528. Net unrealized depreciation aggregated $8,589,502, of which $0 related to appreciated investment securities and $8,589,502 related to depreciated investment securities.

See notes to financial statements

Semiannual report | International Allocation Portfolio  11 

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 8-31-08 (unaudited)

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 $45,481,144)	$37,415,026
Cash	31,962
Receivable for investments sold	141,294
Receivable for fund shares sold	7,159
Receivable due from adviser	34,209
Other assets	5,700
Total assets	37,635,350
Liabilities
Payable for fund shares repurchased	172,540
Payable to affiliates
Fund administration fees	778
Transfer agent fees	8,331
Trustees’ fee	831
Other payables and accrued expenses	80,787
Total liabilities	263,267
Net assets
Capital paid-in	$46,275,650
Accumulated net investment loss	(160,828)
Accumulated undistributed net realized loss on investments	(676,621)
Net unrealized depreciation on investments	(8,066,118)
Net assets	$37,372,083

See notes to financial statements

12  International Allocation Portfolio | Semiannual report 

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	$27,359,942
Shares outstanding	3,228,623
Net asset value and redemption price per share	$8.47
Class B1
Net assets	$1,373,025
Shares outstanding	163,076
Net asset value and offering price per share	$8.42
Class C1
Net assets	$7,962,162
Shares outstanding	944,652
Net asset value and offering price per share	$8.43
Class I
Net assets	$676,954
Shares outstanding	79,627
Net asset value, offering price and redemption price per share	$8.50
Maximum public offering price per share
Class A (net asset value per share ÷ 95%)2	$8.92

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

Semiannual report | International Allocation Portfolio  13 

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

Statement of operations For the period ended 8-31-08 (unaudited)¹

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
Total investment income	—
Expenses
Investment management fees (Note 3)	27,020
Distribution and service fees (Note 3)	96,522
Transfer agent fees (Note 3)	24,173
Fund administration fees (Note 3)	2,596
Blue sky fees (Note 3)	29,382
Audit and legal fees	22,004
Registration and filing fees	9,516
Custodian fees	8,567
Printing and postage fees (Note 3)	6,221
Trustees’ fees (Note 4)	1,677
Miscellaneous	666
Total expenses	228,344
Less expense reductions (Note 3)	(67,380)
Less transfer agency credits (Note 3)	(136)
Net expenses	160,828
Net investment loss	(160,828)
Realized and unrealized loss
Net realized loss on investments in affiliated underlying funds	(1,169,747)
Change in net unrealized appreciation (depreciation) of
Investments in affiliated underlying funds	(3,222,385)
Net realized and unrealized loss	(4,392,132)
Decrease in net assets from operations	($4,552,960)

¹ Semiannual period from 3-1-08 to 8-31-08.

See notes to financial statements

14  International Allocation Portfolio | Semiannual report 

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

Statements 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.

	Year	Period
	ended	ended
	2-29-08	8-31-081
Increase (decrease) in net assets
From operations
Net investment income (loss)	$371,921	($160,828)
Net realized gain (loss)	2,327,066	(1,169,747)
Change in net unrealized appreciation (depreciation)	(4,761,706)	(3,222,385)
Decrease in net assets resulting from operations	(2,062,719)	(4,552,960)
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 5)	40,724,564	902,255
Total increase (decrease)	36,455,866	(3,650,705)
Net assets
Beginning of period	4,566,922	41,022,788
End of period	$41,022,788	$37,372,083
Accumulated net investment loss	—	160,828

¹ Semiannual period from 3-1-08 to 8-31-08. Unaudited.

See notes to financial statements

Semiannual report | International Allocation Portfolio  15 

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	8-31-082
Per share operating performance
Net asset value, beginning of period	$10.00	$9.96	$9.48
Net investment income (loss)3,4	(0.01)	0.13	(0.03)
Net realized and unrealized
loss on investments	(0.03)	(0.03)	(0.98)
Total from investment operations	(0.04)	0.10	(1.01)
Less distributions
From net investment income	—	(0.13)	—
From net realized gain	—	(0.45)	—
Total distributions	—	(0.58)	—
Net asset value, end of period	$9.96	$9.48	$8.47
Total return (%)5,6	(0.40)7	0.70	(10.65)7
Ratios and supplemental data
Net assets, end of period (in millions)	$3	$30	$27
Ratios (as a percentage of average net assets):
Expenses before reductions	8.538	1.119	0.838,9
Expenses net of fee waivers	0.608	0.589	0.618,9
Expenses net of all fee waivers and credits	0.608	0.589	0.618,9
Net investment income (loss)4	(0.60)8	1.21	(0.61)8
Portfolio turnover (%)	3	23	13

¹ Class A shares began operations on 12-29-06.

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

³ Based on the average of the shares outstanding.

⁴ 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.

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

⁶ Assumes dividend reinvestment and does not reflect the effect of sales charges.

⁷ Not annualized.

⁸ Annualized.

⁹ Ratios do not include expenses incurred from underlying funds whose annualized weighted average was 1.02% and 0.92% to 1.12%, for the year ended 2-29-08 and the period ended 8-31-08, respectively, based on the mix of underlying funds held by the Portfolio.

See notes to financial statements

16  International Allocation Portfolio | Semiannual report 

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	8-31-082
Per share operating performance
Net asset value, beginning of period	$10.00	$9.95	$9.46
Net investment income (loss)3,4	(0.02)	0.07	(0.06)
Net realized and unrealized
loss on investments	(0.03)	(0.06)	(0.98)
Total from investment operations	(0.05)	0.01	(1.04)
Less distributions
From net investment income	—	(0.05)	—
From net realized gain	—	(0.45)	—
Total distributions	—	(0.50)	—
Net asset value, end of period	$9.95	$9.46	$8.42
Total return (%)5,6	(0.50)7	(0.13)	(10.99)7
Ratios and supplemental data
Net assets, end of period (in millions)	— 8	$2	$1
Ratios (as a percentage of average net assets):
Expenses before reductions	28.589	4.0210	2.609,10
Expenses net of fee waivers	1.269	1.3410	1.339,10
Expenses net of all fee waivers and credits	1.269	1.3310	1.339,10
Net investment income (loss)4	(1.26)9	0.70	(1.33)9
Portfolio turnover (%)	3	23	13

¹ Class B shares began operations on 12-29-06.

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

³ Based on the average of the shares outstanding.

⁴ 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.

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% and 0.92% to 1.12%, for the year ended 2-29-08 and the period ended 8-31-08, respectively, based on the mix of underlying funds held by the Portfolio.

See notes to financial statements

Semiannual report | International Allocation Portfolio  17 

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	8-31-082
Per share operating performance
Net asset value, beginning of period	$10.00	$9.95	$9.46
Net investment income (loss)3,4	(0.02)	0.08	(0.06)
Net realized and unrealized
loss on investments	(0.03)	(0.07)	(0.97)
Total from investment operations	(0.05)	0.01	(1.03)
Less distributions
From net investment income	—	(0.05)	—
From net realized gain	—	(0.45)	—
Total distributions	—	(0.50)	—
Net asset value, end of period	$9.95	$9.46	$8.43
Total return (%)5,6	(0.50)7	(0.13)	(10.89)7
Ratios and supplemental data
Net assets, end of period (in millions)	$1	$8	$8
Ratios (as a percentage of average net assets):
Expenses before reductions	18.628	2.319	1.778,9
Expenses net of fee waivers	1.278	1.339	1.338,9
Expenses net of all fee waivers and credits	1.278	1.339	1.338,9
Net investment income (loss)4	(1.27)8	0.79	(1.33)8
Portfolio turnover (%)	3	23	13

¹ Class C shares began operations on 12-29-06.

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

³ Based on the average of the shares outstanding.

⁴ 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.

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 Ratios do not include expenses incurred from underlying funds whose annualized weighted average was 1.02% and 0.92% to 1.12%, for the year ended 2-29-08 and the period ended 8-31-08, respectively, based on the mix of underlying funds held by the Portfolio.

See notes to financial statements

18  International Allocation Portfolio | Semiannual report 

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	8-31-082
Per share operating performance
Net asset value, beginning of period	$10.00	$9.97	$9.49
Net investment income (loss)3,4	— 5	0.16	(0.01)
Net realized and unrealized
loss on investments	(0.03)	(0.03)	(0.98)
Total from investment operations	(0.03)	0.13	(0.99)
Less distributions
From net investment income	—	(0.16)	—
From net realized gain	—	(0.45)	—
Total distributions	—	(0.61)	—
Net asset value, end of period	$9.97	$9.49	$8.50
Total return (%)6.7	(0.30)8	1.02	(10.43)8
Ratios and supplemental data
Net assets, end of period (in millions)	— 9	$1	$1
Ratios (as a percentage of average net assets):
Expenses before reductions	25.0110	7.1711	1.5010,11
Expenses net of fee waivers	0.1710	0.1811	0.1810,11
Expenses net of all fee waivers and credits	0.1710	0.1811	0.1810,11
Net investment income (loss)4	(0.17)10	1.55	(0.18)10
Portfolio turnover (%)	3	23	13

¹ Class I shares began operations on 12-29-06.

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

³ Based on the average of the shares outstanding.

⁴ 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.

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 Assumes dividend reinvestment.

⁸ Not annualized.

⁹ Less than $500,000.

¹⁰ Annualized.

¹¹ Ratios do not include expenses incurred from underlying funds whose annualized weighted average was 1.02% and 0.92% to 1.12%, for the year ended 2-29-08 and the period ended 8-31-08, respectively, based on the mix of underlying funds held by the Portfolio.

See notes to financial statements

Semiannual report | International Allocation Portfolio  19 

Notes to financial statements (unaudited)

Note 1
Organization

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.

Note 2
Significant accounting policies

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following

20  International Allocation Portfolio | Semiannual report 

summarizes the significant accounting policies of the Portfolio:

Security valuation

The net asset value of Class A, Class B, Class C and Class I 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 policies, as outlined in the underlying funds’ financial statements. Securities held by the Portfolio and by the underlying affiliated funds 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.

Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity.

The Fund adopted Statement of Financial Accounting Standards No. 157 (FAS 157), Fair Value Measurements, effective with the beginning of the Fund’s fiscal year. FAS 157 established a three-tier hierarchy to prioritize the assumptions, referred to as inputs, used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below:

Level 1 — Quoted prices in active markets for identical securities.

Level 2 — Prices determined using other sig-nificant observable inputs. Observable inputs are inputs that other market participants would use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.

Level 3 — Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable, such as when there is little or no market activity for an investment, unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors that market participants would use in pricing an investment and would be based on the best information available.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used to value the Fund’s net assets as of August 31, 2008:

	INVESTMENTS IN	OTHER FINANCIAL
VALUATION INPUTS	SECURITIES	INSTRUMENTS*
Level 1 — Quoted Prices	$37,415,026	—
Level 2 — Other Significant Observable Inputs	—	—
Level 3 — Significant Unobservable Inputs	—	—
Total	$37,415,026	—

*Other financial instruments are derivative instruments not reflected in the Portfolio of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/ depreciation on the instrument.

Semiannual report | International Allocation Portfolio  21 

Investment transactions

Investment transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment security transactions are reported on trade date. Interest income is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date net of foreign withholding taxes. Realized gains and losses from investment transactions are recorded on an identified cost basis.

Class allocations

Income, common expenses and realized and unrealized gains (losses) are determined at the Portfolio level and allocated daily to each class of shares based on the appropriate net asset value of the respective classes. Distribution and service fees, if any, and transfer agent fees for Class A, Class B, Class C and Class I shares are calculated daily at the class level based on the appropriate net asset value of each class and the specific expense rate(s) applicable to each class.

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.

Expenses

The majority of expenses are directly identifiable to an individual fund. Trust expenses that are not readily identifiable to a specific fund are allocated in such a manner as deemed equitable, taking into consideration, among other things, the nature and type of expense and the relative size of the funds.

Line of credit

The Portfolio has entered into an agreement which enables it to participate in a $150 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. For the period ended August 31, 2008, there were no borrowings under the line of credit.

Pursuant to the custodian agreement, the Custodian may, in its discretion, advance funds to the Fund to make properly authorized payments. When such payments result in an overdraft, the Fund is obligated to repay the Custodian for any overdraft, including any costs or expenses associated with the overdraft. The Custodian has a lien and security interest in any Fund property to the extent of any overdraft.

Federal income taxes

The Portfolio 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.

The Portfolio has adopted the provisions of Financial Accounting Standards Board (FASB) Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement 109 (FIN 48), at the beginning of the Portfolio’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 Portfolio’s financial statements. Each of the Portfolio’s federal tax returns for the prior two years remain subject to examination by the Internal Revenue Service.

New accounting pronouncements

In March 2008, FASB No. 161 (FAS 161), Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133 (FAS 133),

22  International Allocation Portfolio | Semiannual report 

was issued and is effective for fiscal years and interim reporting periods 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 Portfolio’s financial statement disclosures.

Distribution of income and gains

The Portfolio records distributions to shareholders from net investment income and net realized gains, if any, on the ex-dividend date. The Portfolio declares income dividend and capital gains dividends, if any, annually. 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.

Such distributions, 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 Portfolio’s financial statements as a return of capital.

Note 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 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 assets invested in investments other than the Trust or JHF II (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 Fund Assets, (b) 0.04% of the Fund Assets in excess of $500,000,000, (c) 0.50% of the first $500,000,000 of the Other Assets and (d) 0.49% of the 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 period ended August 31, 2008, were equivalent to an annual effective rate of 0.05% of the Fund Assets and 0.08% of the Other Assets for an aggregate effective rate of 0.13%.

The Adviser has contractually agreed to reimburse or limit certain Portfolio level expenses to 0.09% of the Portfolio’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 incurred in the ordinary course of the Portfolio’s business. In addition, fees incurred under any agreement or plans of the Portfolio dealing with services for the shareholders and others with beneficial interest in shares of the Portfolio, 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

Semiannual report | International Allocation Portfolio  23 

and other extraordinary expenses not incurred in the ordinary course of the Portfolio’s business. In addition, fees incurred under any agreement or plans of the Portfolio dealing with services for the shareholders and others with beneficial interest in shares of the Portfolio, are excluded. The reimbursements and limits are such that these expenses will not exceed 0.50% for Class A shares, 1.20% for Class B, 1.20% for Class C and 0.05% for Class I. Accordingly, the expense reductions or reimbursements related to this agreement were $32,779, $10,056, $19,175 and $5,370 for Class A, Class B, Class C and Class I, respectively for the period ended August 31, 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.

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 period ended August 31, 2008, were $2,596 with an annual effective rate of 0.01% of the Portfolio’s average daily net assets.

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.

Class A shares are assessed up-front sales charges of up to 5.00% of net asset value of such shares. During the period ended August 31, 2008 the Distributor received net up-front sales charges of $43,222 with regard to sales of Class A shares. Of this amount, $7,134 was retained and used for printing prospectuses, advertising, sales literature and other purposes, $34,921 was paid as sales commissions to unrelated broker-dealers and $1,167 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 Portfolio in connection with the sale of Class B and Class C shares. During the period ended August 31, 2008, CDSCs received by the Distributor amounted to $2,306 for Class B shares and $1,963 for Class C shares.

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 Portfolio pays a monthly

24  International Allocation Portfolio | Semiannual report 

fee which is based on an annual rate of $16.50 for each Class A, Class B, Class C and Class I 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 period ended August 31, 2008.

The Portfolio receives 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 period ended August 31, 2008, the Portfolio’s transfer agent fees and out-of-pocket expenses were reduced by $136 for transfer agent credits earned.

Class level expenses including the allocation of the transfer agent fees for the period ended August 31, 2008, were as follows:

	Distribution and	Transfer		Printing and
Share class	service fees	agent fees	Blue sky fees	postage fees
Class A	$45,290	$13,664	$8,488	$4,558
Class B	7,907	1,596	8,023	312
Class C	43,325	8,707	8,720	1,052
Class I	—	206	4,151	309
Total	$96,522	$24,173	$29,382	$6,221

The Adviser and other affiliates of John Hancock USA owned 1,545,196 shares of beneficial interest of Class A, respectively, on August 31, 2008.

Note 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.

Semiannual report | International Allocation Portfolio  25 

Note 5
Fund share transactions

This listing illustrates the number of Portfolio shares sold, reinvested and repurchased during the year ended February 29, 2008, and the period ended August 31, 2008, along with the corresponding dollar value.

		Year ended 2-29-08	Period ended 8-31-081
	Shares	Amount	Shares	Amount
Class A shares
Sold	3,069,699	$32,165,731	408,641	$3,855,180
Distributions reinvested	161,717	1,625,253	—	—
Repurchased	(371,009)	(3,794,178)	(367,044)	(3,451,305)
Net increase	2,860,407	$29,996,806	41,597	$403,875
Class B shares
Sold	181,757	$1,935,091	25,956	$245,683
Distributions reinvested	6,812	68,388	—	—
Repurchased	(26,915)	(281,028)	(44,263)	(407,352)
Net increase (decrease)	161,654	$1,722,451	(18,307)	($161,669)
Class C shares
Sold	814,878	$8,637,166	186,626	$1,780,692
Distributions reinvested	34,010	341,797	—	—
Repurchased	(69,886)	(711,703)	(112,809)	(1,030,025)
Net increase	779,002	$8,267,260	73,817	$750,667
Class I shares
Sold	94,013	$985,183	172,110	$1,569,460
Distributions reinvested	4,530	45,522	—	—
Repurchased	(29,904)	(292,658)	(181,582)	(1,660,078)
Net increase (decrease)	68,639	$738,047	(9,472)	($90,618)
Net increase	3,869,702	$40,724,564	87,635	$902,255

¹ Semiannual period from 3-1-08 to 8-31-08. Unaudited.

Note 6
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 period ended August 31, 2008, aggregated $6,095,832 and $5,363,084, respectively.

Note 7
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 period ended August 31, 2008, is set forth below:

	Percent of
Affiliate —	underlying fund’s
Class NAV	net assets
International Classic
Value Fund	27.51%
International Growth
Fund	13.92%

26  International Allocation Portfolio | Semiannual report 

Board Consideration of and
Continuation of Investment
Advisory Agreement: John Hancock
International Allocation Portfolio

The Investment Company Act of 1940 (the 1940 Act) requires the Board of Trustees (the Board) of John Hancock Funds III (the Trust), including a majority of the Trustees who have no direct or indirect interest in the investment advisory agreement and are not “interested persons” of the Trust, as defined in the 1940 Act (the Independent Trustees), annually to meet in person to review and consider the continuation of: (i) the investment advisory agreement (the Advisory Agreement) with John Hancock Investment Management Services, LLC (the Adviser), (ii) the investment subadvisory agreement (the Subadvisory Agreement) with MFC Global Investment Management (U.S.A.) Limited (MFC Global USA) and (iii) the investment subadvisory consultant agreement (the Consultant Agreement) with Deutsche Asset Management, Inc. (DeAM) for the John Hancock International Allocation Portfolio (the Fund). MFC Global USA and DeAM are each referred to as a Subadviser, and collectively, the S ubadvisers. The Advisory Agreement, the Subadvisory Agreement and the Consultant Agreement are collectively referred to as the Advisory Agreements. The Fund invests in a combination of certain John Hancock mutual funds (the Underlying Funds).

The Fund may at any time allocate any percentage of its assets among any of the Underlying Funds. MFC Global USA may from time to time adjust the percentage of assets allocated to each Underlying Fund. The considerations made in approving the investment advisory and subadvisory agreements of each Underlying Fund are disclosed in each Underlying Fund’s shareholder report.

At meetings held on May 5–6 and June 9–10, 2008, the Board considered the factors and reached the conclusions described below relating to the selection of the Adviser and Subadvisers and the continuation of the Advisory Agreements. During such meetings, the Board’s Contracts/Operations Committee and the Independent Trustees also met in executive sessions with their independent legal counsel.

In evaluating the Advisory Agreements, the Board, including the Contracts/ Operations Committee and its Independent Trustees, reviewed a broad range of information requested for this purpose. This information included:

(i) the investment performance of the Fund relative to a category of relevant funds (the Category) and a peer group of comparable funds (the Peer Group). The funds within each Category and Peer Group were selected by Morningstar Inc. (Morningstar), an independent provider of investment company data. Data covered the period since the Fund’s inception through December 31, 2007,

(ii) fees incurred by, and the expense ratios of, the Fund relative to a Category and a Peer Group,

(iii) the Adviser’s financial results and condition, including its profitability from services performed for the Fund complex as a whole,

(iv) the Adviser’s and each Subadviser’s record of compliance with applicable laws and regulations, with the Fund’s investment policies and restrictions, and with the applicable Code of Ethics, and the structure and responsibilities of the Adviser’s and each Subadviser’s compliance department,

(v) the background and experience of senior management and investment professionals, and

(vi) the nature, cost and character of advisory and non-investment management services provided by the Adviser and its affiliates and by each Subadviser.

The Independent Trustees considered the legal advice of their counsel and relied on their own business judgment in determining the material factors to be considered in evaluating the materials that were presented to them and the weight to be given to each such factor.

Semiannual report | International Allocation Portfolio  27 

The Board principally considered data on performance and other information provided by Morningstar as of December 31, 2007. The Board also considered updated performance information provided to it by the Adviser at its May and June 2008 meetings. Performance and other information may be quite different as of the date of this shareholders report. The key factors considered by the Board and the conclusions reached are described below.

Nature, extent and quality of services

The Board considered the narrow scope of services for which the Adviser is engaged, which consists of determining and adjusting investment allocations among the Underlying Funds. The Board considered the ability of the Adviser and each Subadviser, based on their resources, reputation and other attributes, to attract and retain qualified investment professionals, including research, advisory, and supervisory personnel. The Board considered the investment philosophy, research and investment decision-making processes of the Adviser and each Subadviser. The Board considered the Adviser’s execution of its oversight responsibilities. The Board further considered the culture of compliance, resources dedicated to compliance, compliance programs and compliance records of the Adviser and each Subadviser. In addition, the Board took into account the administrative and other non-advisory services provided to the Fund by the Adviser and its affiliates.

Based on the above factors, together with those referenced below, the Board concluded that, within the context of its full deliberations, the nature, extent and quality of the investment advisory services provided to the Fund by the Adviser and each Subadviser supported renewal of the Advisory Agreements.

Fund performance

The Board noted that the Fund had less than two full years of operational history, and considered the performance results for the Fund since its inception through December 31, 2007. The Board also considered these results in comparison to the performance of the Category, as well as the Fund’s Peer Group and benchmark indices. The Board reviewed with representatives of Morningstar the methodology used by Morningstar to select the funds in the Category and the Peer Group.

The Board noted that the Fund’s performance was lower than the performance of the Category and Peer Group medians, and its benchmark indices, the MSCI World Ex US NR Index and the MSCI EAFE GR Index, for the 1-year period. The Adviser discussed factors that contributed to the Fund’s performance results. The Board recognized the short operational history of the Fund and indicated its intent to continue to monitor the Fund’s performance trends.

Investment advisory fee rate and expenses

The Board reviewed and considered the contractual investment advisory fee rate payable by the Fund to the Adviser for investment advisory services (the Advisory Agreement Rate). The Board received and considered information comparing the Advisory Agreement Rate with the advisory fees for the Peer Group and Category. The Board noted that the Advisory Agreement Rate was equal to the median rate of the Peer Group and the Category.

The Board received and considered expense information regarding the Fund’s various components, including distribution and fees other than distribution fees, including transfer agent fees, custodian fees, and other miscellaneous fees (e.g., fees for accounting and legal services). The Board considered comparisons of these expenses to the Peer Group median. The Board also received and considered expense information regarding the Fund’s total operating expense ratio (Gross Expense Ratio) and total operating expense ratio after taking the advisory fee waiver arrangement into account (Net Expense Ratio). The Board received and considered information comparing the Gross Expense Ratio and Net Expense Ratio of the Fund to that of the Peer Group and Category medians. The Board noted that the Fund’s Gross and Net Expense Ratios were higher than the median of the Peer Group and Category. The Board g ave limited consideration to the expense analysis because it did not distinguish between Fund-level and Underlying Fund-level expenses, and thus presented a

28  International Allocation Portfolio | Semiannual report 

comparison of the expenses information that was of limited utility.

The Adviser also discussed the Morningstar data and rankings, and other relevant information, for the Fund. Based on the above-referenced considerations and other factors, the Board supported the re-approval of the Advisory Agreement.

The Board also received information about the investment subadvisory fee rate (the Subadvisory Agreement Rate) payable by the Adviser to MFC Global USA for investment subadvisory services. The Board concluded that the Subadvisory Agreement Rate was fair and equitable, based on its consideration of the factors described here.

Profitability

The Board received and considered a detailed profitability analysis of the Adviser based on the various relationships between the Fund and the Fund complex, on the one hand, and the Adviser and its affiliates on the other. The Board also considered publicly available industry information comparing the Adviser’s profitability to that of other similar investment advisers. The Board concluded that, in light of the absence of any advisory fees and in light of the costs of providing other services to the Fund and the Fund complex as a whole, the profits and other ancillary benefits reported by the Adviser were not unreasonable.

Economies of scale

The Board received and considered general information regarding economies of scale with respect to the management of the Fund, including the Fund’s ability to appropriately benefit from economies of scale under the Fund’s fee structure. The Board observed that the Advisory Agreement did not provide for the payment of any fees and so did not determine that it needed to impose breakpoints.

Other benefits to the Adviser

The Board received information regarding potential “fall-out” or ancillary benefits received by the Adviser and its affiliates and the Subadvisers as a result of their relationship with the Fund. Such benefits could include, among others, benefits directly attributable to the relationship of the Adviser and Subadvisers with the Fund and benefits potentially derived from an increase in business as a result of their relationship with the Fund (such as the ability to market to shareholders other financial products offered by the Adviser and its affiliates).

The Board also considered the effectiveness of the Adviser’s, Subadvisers’ and Fund’s policies and procedures for complying with the requirements of the federal securities laws, including those relating to best execution of portfolio transactions and brokerage allocation.

Other factors and broader review

As discussed above, the Board reviewed detailed materials received from the Adviser as part of the annual re-approval process. The Board also regularly reviews and assesses the quality of the services that the Fund receives throughout the year. In this regard, the Board reviews reports of the Adviser at least quarterly.

After considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Board concluded that approval of the continuation of the Advisory Agreement for the Fund was in the best interest of the Fund and its shareholders. Accordingly, the Board unanimously approved the continuation of the Advisory Agreement.

Semiannual report | International Allocation Portfolio  29 

More information

Trustees	Investment adviser
James F. Carlin, Chairman	John Hancock Investment Management
James R. Boyle†	Services, LLC
William H. Cunningham
Deborah C. Jackson	Subadviser
Charles L. Ladner*	MFC Global Investment Management
Stanley Martin*	(U.S.A.) Limited
Dr. John A. Moore*
Patti McGill Peterson*	Principal distributor
Steven R. Pruchansky	John Hancock Funds, LLC
Gregory A. Russo*	Custodian
* Members of the Audit Committee	State Street Bank & Trust Company
† Non-Independent Trustee
	Transfer agent
Officers	John Hancock Signature Services, Inc.
Keith F. Hartstein
President and Chief Executive Officer	Legal counsel
	K&L Gates LLP
Thomas M. Kinzler
Secretary and Chief Legal Officer
Francis V. Knox, Jr.
Chief Compliance Officer
Charles A. Rizzo
Chief Financial Officer
Gordon M. Shone
Treasurer
John G. Vrysen
Chief Operating Officer

Additional information about your fund is available without charge in several ways. As required by the SEC, you can access proxy voting information and quarterly portfolio information on your fund. The proxy voting information includes a description of proxy voting policies, procedures and information regarding how the fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30. The quarterly portfolio information that includes a complete list of the fund’s holdings for the first and third quarters of the fund’s fiscal period is filed on Form N-Q. You have access to this information:

By phone	On the fund’s Website	At the SEC
1-800-225-5291	www.jhfunds.com	www.sec.gov
		1-800-SEC-0330
		SEC Public Reference Room

You can also contact us:
Regular mail	Express mail
John Hancock Signature Services, Inc.	John Hancock Signature Services, Inc.
P.O. Box 9510	Mutual Fund Image Operations
Portsmouth, NH 03802-9510	164 Corporate Drive
	Portsmouth, NH 03801

Month-end portfolio holdings are available at www.jhfunds.com.

30  International Allocation Portfolio | Semiannual report 

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 International Allocation Portfolio.	318SA 8/08
It is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus.	10/08

A look at performance

For the periods ended August 31, 2008

		Average annual returns (%)				Cumulative total returns (%)
		with maximum sales charge (POP)				with maximum sales charge (POP)
												SEC 30-  day yield
	Inception				Since	Six				Since		(%) as of
Class	date	1-year	5-year	10-year	inception	months	1-year	5-year	10-year	inception		8-31-08
A	3-1-07	–16.10	—	—	–7.81	–9.81	–16.10	—	—	–11.51	2.80
B	3-1-07	–16.64	—	—	–7.74	–10.14	–16.64	—	—	–11.42	2.27
C	3-1-07	–13.21	—	—	–5.28	–6.37	–13.21	—	—	–7.83	2.28
I1	3-1-07	–11.38	—	—	–4.18	–4.86	–11.38	—	—	–6.22	3.42
R11	3-1-07	–11.78	—	—	–4.72	–5.10	–11.78	—	—	–7.01	2.92
NAV1	4-28-08	—	—	—	—	—	—	—	—	–6.85	3.47

Performance figures assume all distributions are reinvested. Public offering price (POP) figures reflect maximum sales charges 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 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 June 30, 2009. The net expenses are as follows: Class A — 1.55%, Class B — 2.25%, Class C — 2.25%, Class I — 1.10%, Class R1 — 1.75%, Class NAV — 1.05%. Had the fee waivers and expense limitations not been in place, the gross expenses would be as follows: Class A — 1.79%, Class B — 3.89%, Class C — 3.00%, Class I — 2.16%, Class R1 — 16.23%, Class NAV — 1.30%.

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 current to the most recent month end performance data, 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 NAV share prospectuses.

6  Global Shareholder Yield Fund | Semiannual report 

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	$9,217	$8,858	$9,349
C2	3-1-07	9,217	9,217	9,349
I3	3-1-07	9,378	9,378	9,349
R13	3-1-07	9,299	9,299	9,349
NAV3	4-28-08	9,315	9,315	8,956

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 NAV shares, respectively, as of August 31, 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 No contingent deferred sales charge applicable.

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

Semiannual report | Global Shareholder Yield Fund  7 

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 March 1, 2008 with the same investment held until August 31, 2008.

	Account value	Ending value	Expenses paid during
	on 3-1-08	on 8-31-08	period ended 8-31-081
Class A	$1,000.00	$949.20	$7.57
Class B	1,000.00	945.70	11.03
Class C	1,000.00	945.70	11.03
Class I	1,000.00	951.40	5.41
Class R1	1,000.00	949.00	7.86
Class NAV	1,000.00	931.50	3.47

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 August 31, 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:

8  Global Shareholder Yield Fund | Semiannual report 

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 March 1, 2008, with the same investment held until August 31, 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 3-1-08	on 8-31-08	period ended 8-31-081
Class A	$1,000.00	$1,017.40	$7.83
Class B	1,000.00	1,013.90	11.42
Class C	1,000.00	1,013.90	11.42
Class I	1,000.00	1,019.70	5.60
Class R1	1,000.00	1,017.10	8.13
Class NAV	1,000.00	1,020.00	5.30

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 1.54%, 2.25%, 2.25%, 1.10%, 1.60% and 1.04% for Class A, Class B, Class C, Class I, Class R1 and Class NAV respectively, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year/365 (to reflect the one-half year period).

Semiannual report | Global Shareholder Yield Fund  9 

Portfolio summary

Top 10 holdings1
Reynolds American, Inc.	2.1%	France Telecom SA	1.8%
Verizon Communications, Inc.	2.0%	E.I. Du Pont de Nemours & Company	1.8%
Astra Zeneca PLC	2.0%	AT&T, Inc.	1.8%
UST, Inc.	2.0%	Diageo PLC	1.7%
Duke Energy Corp.	1.9%	Nestle SA	1.7%
Sector distribution1,2
Communications	24%	Industrial	3%
Consumer Non-cyclical	19%	Technology	3%
Utilities	16%	Consumer, Cyclical	2%
Energy	12%	Diversified	1%
Basic Materials	7%	Short-term Investments	9%
Financial	4%

 

¹ As a percentage of net assets on August 31, 2008.

² Sector investing is subject to greater risks than the market as a whole. Because the Fund may focus on particular sectors of the economy, its performance may depend on the performance of those sectors.

10  Global Shareholder Yield Fund | Semiannual report 

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 8-31-08 (unaudited)

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 90.61%		$163,299,364
(Cost $175,754,135)
Australia 2.92%		5,260,891
APN News & Media, Ltd.	31,290	88,561
Australia and New Zealand Banking Group, Ltd.	58,400	822,366
John Fairfax Holdings, Ltd.	446,217	1,072,989
Lion Nathan, Ltd.	142,300	1,088,326
St. George Bank, Ltd.	51,700	1,333,303
Westpac Banking Corp., Ltd.	42,800	855,346
Austria 1.09%		1,956,006
Telekom Austria AG	91,000	1,956,006
Belgium 2.53%		4,554,644
Belgacom SA	44,920	1,788,674
Inbev NV	39,900	2,765,970
Canada 1.54%		2,779,996
Manitoba Telecom Services, Inc.	46,300	1,818,337
Yellow Pages Income Fund	101,500	961,659
Finland 1.93%		3,480,084
Fortum Corp. Oyj	53,450	2,193,897
Nokia Oyj, SADR	51,100	1,286,187
France 4.06%		7,325,673
France Telecom SA	112,600	3,320,007
Total SA	30,700	2,205,369
Vivendi SA	46,600	1,800,297
Germany 2.97%		5,361,545
BASF AG	46,000	2,653,928
RWE AG	25,100	2,707,617
Ireland 0.40%		718,732
Independent News & Media PLC	330,900	718,732
Italy 4.77%		8,589,837
Enel SpA	293,500	2,694,849
Eni SpA, SADR	32,200	2,094,610
Intesa Sanpaolo SpA	153,200	822,355
Mondadori (Arnoldo) Editore SpA	154,600	846,081
Terna SpA	530,600	2,131,942

See notes to financial statements

Semiannual 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

Issuer	Shares	Value
Malaysia 0.04%		$69,670
British American Tobacco Malaysia BHD	6,000	69,670
Norway 1.52%		2,730,403
Den Norske Bank ASA	72,500	840,532
StatoilHydro ASA, SADR	61,700	1,889,871
Philippines 0.99%		1,781,724
Philippine Long Distance Telephone Company, SADR	30,051	1,781,724
Singapore 0.69%		1,252,522
Singapore Press Holdings, Ltd.	433,000	1,252,522
South Korea 0.84%		1,506,640
KT Corp., SADR	74,000	1,506,640
Spain 1.04%		1,877,847
Telefonica SA	76,000	1,877,847
Sweden 0.72%		1,291,594
Swedish Match AB	65,500	1,291,594
Switzerland 2.92%		5,259,917
Nestle SA	69,200	3,048,923
Swisscom AG	6,900	2,210,994
Taiwan 2.61%		4,706,901
Chunghwa Telecom Company, Ltd., ADR *	73,800	1,825,812
Far EasTone Telecommunications Company, Ltd.	826,981	1,202,628
Taiwan Semiconductor Manufacturing Company, Ltd., SADR	172,859	1,678,461
United Kingdom 10.41%		18,768,390
AstraZeneca PLC, SADR	72,900	3,550,230
Diageo PLC, SADR	42,300	3,147,120
GKN PLC	390,200	1,740,397
Imperial Tobacco Group PLC	81,200	2,677,235
National Grid PLC	196,800	2,561,711
Tomkins PLC	635,300	1,716,173
United Utilities Group PLC *	157,963	2,055,330
Vodafone Group PLC	516,600	1,320,194
United States 46.62%		84,026,348
Altria Group, Inc.	130,700	2,748,621
AT&T, Inc.	100,600	3,218,194
Automatic Data Processing, Inc.	39,700	1,761,886
Ball Corp.	49,200	2,259,264
Bristol-Myers Squibb Company	41,500	885,610
CBS Corp., Class B	64,000	1,035,520
CenturyTel, Inc.	70,800	2,735,004
Chevron Corp.	10,600	914,992
ConocoPhillips	30,900	2,549,559
DaVita, Inc. *	17,100	981,369
Diamond Offshore Drilling, Inc.	16,300	1,791,533
Dow Chemical Company	52,100	1,778,173

See notes to financial statements

12  Global Shareholder Yield Fund | Semiannual report 

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)
Duke Energy Corp.	200,800	$3,501,952
E.I. Du Pont de Nemours & Company	74,000	3,288,560
Exxon Mobil Corp.	11,200	896,112
Frontier Communications Corp. *	146,500	1,841,505
General Electric Company	46,100	1,295,410
Genuine Parts Company	31,500	1,336,230
Great Plains Energy, Inc.	75,000	1,758,750
International Flavors & Fragrances, Inc.	22,300	896,683
Kinder Morgan Energy Partners LP	37,200	2,136,768
Lorillard, Inc.	37,200	2,687,328
Magellan Midstream Partners LP	35,300	1,312,454
Microchip Technology, Inc.	43,400	1,389,234
NSTAR	53,000	1,793,520
Nucor Corp.	31,200	1,638,000
ONEOK Partners LP	22,900	1,375,145
Packaging Corp. of America	115,700	2,979,275
Philip Morris International, Inc.	43,600	2,341,320
Progress Energy, Inc.	40,100	1,751,568
Reynolds American, Inc.	69,800	3,698,004
Royal Dutch Shell PLC, ADR	12,300	855,096
SCANA Corp.	50,300	1,971,760
Southern Copper Corp.	68,100	1,738,593
Teco Energy, Inc.	90,900	1,621,656
The Laclede Group, Inc.	13,300	597,569
The Southern Company	63,900	2,396,889
U.S. Bancorp	57,000	1,816,020
UST, Inc.	66,200	3,547,658
Ventas, Inc., REIT	40,000	1,816,800
Verizon Communications, Inc.	101,500	3,564,680
Westar Energy, Inc.	77,800	1,762,170
Windstream Corp.	141,700	1,759,914
	Principal
Issuer, description, maturity date	amount	Value
Repurchase agreements 8.54%		$15,388,000
(Cost $15,388,000)
Repurchase Agreement with State Street Corp. dated 08/29/2008 at
1.70% to be repurchased at $15,390,907 on 09/02/2008,
collateralized by $15,775,000 Federal Home Loan Bank, 5.00%
due 06/11/2018 (valued at $15,696,125, including interest)	$15,388,000	15,388,000
Total investments (cost $191,142,135)† 99.15%		178,687,364
Other assets in excess of liabilities 0.85%		1,531,740
Total net assets 100.00%		$180,219,104

See notes to financial statements

Semiannual 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

Notes to Schedule of Investments

The portfolio had the following five top industry concentrations as of August 31, 2008 (as a percentage of total net assets):

Telecommunications
equipment & services	12.15%
Tobacco	10.58%
Electrical utilities	9.28%
Telephone	7.28%
Energy	6.27%

Percentages are stated as a percent of net assets.

ADR American Depository Receipts

PLC Public Limited Company

REIT Real Estate Investment Trust

SADR Sponsored American Depository Receipts

* Non-Income Producing

† At August 31, 2008, the aggregate cost of investment securities for federal income tax purposes was $191,260,510. Net unrealized depreciation aggregated $12,573,146, of which $1,883,463 related to appreciated investment securities and $14,456,609 related to depreciated investment securities.

See notes to financial statements

14  Global Shareholder Yield Fund | Semiannual report 

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 8-31-08 (unaudited)

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 $191,142,135)	$178,687,364
Cash	371
Foreign currency, at value (Cost $618,720)	617,530
Receivable for investments sold	164,431
Receivable for fund shares sold	292,325
Dividends and interest receivable	591,132
Receivable due from adviser	3,696
Other assets	12,242
Total assets	180,369,091
Liabilities
Payable for fund shares repurchased	66,446
Payable to affiliates
Fund administration fees	851
Transfer agent fees	12,829
Distribution and service fees	288
Trustees’ fees	797
Other payables and accrued expenses	68,776
Total liabilities	149,987
Net assets
Capital paid-in	$197,302,960
Undistributed net investment income	1,778,164
Accumulated undistributed net realized loss on investments
and foreign currency transactions	(6,400,671)
Net unrealized depreciation on investments and translation
of assets and liabilities in foreign currencies	(12,461,349)
Net assets	$180,219,104

See notes to financial statements

Semiannual 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

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	$16,407,592
Shares outstanding	1,829,514
Net asset value and redemption price per share	$8.97
Class B1
Net assets	$976,664
Shares outstanding	108,969
Net asset value, offering price and redemption price per share	$8.96
Class C1
Net assets	$4,473,702
Shares outstanding	499,024
Net asset value, offering price and redemption price per share	$8.96
Class I
Net assets	$70,500,473
Shares outstanding	7,848,583
Net asset value, offering price and redemption price per share	$8.98
Class R1
Net assets	$92,950
Shares outstanding	10,367
Net asset value, offering price and redemption price per share	$8.97
Class NAV
Net assets	$87,767,723
Shares outstanding	9,765,510
Net asset value, offering price and redemption price per share	$8.99
Maximum public offering price per share
Class A (net asset value per share ÷ 95%)2	$9.44

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

16  Global Shareholder Yield Fund | Semiannual 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 period ended 8-31-08 (unaudited)¹

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	$3,608,055
Interest	126,607
Less foreign taxes withheld	(207,409)
Total investment income	3,527,253
Expenses
Investment management fees (Note 3)	549,983
Distribution and service fees (Note 3)	59,778
Transfer agent fees (Note 3)	23,403
Fund administration fees (Note 3)	5,613
Blue sky fees (Note 3)	33,812
Audit and legal fees	20,759
Custodian fees	15,378
Registration and filing fees	7,358
Printing and postage fees (Note 3)	5,033
Trustees’ fees (Note 4)	1,755
Miscellaneous	240
Total expenses	723,112
Less: expense reductions (Note 3)	(30,628)
Less: transfer agency credits (Note 3)	(104)
Net expenses	692,380
Net investment income	2,834,873
Realized and unrealized loss
Net realized loss on
Investments in unaffiliated issuers	(5,587,491)
Foreign currency transactions	(154,403)
	(5,741,894)
Changes in net unrealized appreciation (depreciation) of
Investments in unaffiliated issuers	(9,797,671)
Translation of assets and liabilities in foreign currencies	(8,861)
	(9,806,532)
Net realized and unrealized loss	(15,548,426)
Decrease in net assets from operations	($12,713,553)

¹ Semiannual period from 3-1-08 to 8-31-08.

See notes to financial statements

Semiannual 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

Statements 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	Period
	ended	ended
	2-29-08	8-31-081
Increase (decrease) in net assets
From operations
Net investment income	$972,292	$2,834,873
Net realized loss	(544,011)	(5,741,894)
Change in net unrealized appreciation (depreciation)	(2,654,817)	(9,806,532)
Decrease in net assets resulting from operations	(2,226,536)	(12,713,553)
Distributions to shareholders
From net investment income
Class A	(758,310)	(153,162)
Class B	(25,168)	(4,145)
Class C	(74,029)	(17,776)
Class I	(83,716)	(427,499)
Class R1	(2,790)	(691)
Class NAV	—	(509,320)
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)	(1,112,593)
From Fund share transactions (Note 5)	39,626,173	157,691,580
Total increase	36,353,670	143,865,434
Net assets
Beginning of period	—	36,353,670
End of period	$36,353,670	$180,219,104
Undistributed net investment income	$55,884	$1,778,164

¹ Semiannual period from 3-1-08 to 8-31-08. Unaudited.

See notes to financial statements

18  Global Shareholder Yield Fund | Semiannual report 

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	8-31-082
Per share operating performance
Net asset value, beginning of period	$10.00	$9.52
Net investment income3	0.35	0.24
Net realized and unrealized loss
on investments	(0.51)	(0.50)
Total from investment operations	(0.16)	(0.26)
Less distributions
From net investment income	(0.29)	(0.26)
From net realized gain	(0.03)	(0.03)
Total distributions	(0.32)	(0.29)
Net asset value, end of period	$9.52	$8.97
Total return (%) 4,5	(1.84)	(5.08)6
Ratios and supplemental data
Net assets, end of period (in millions)	$27	$16
Ratios (as a percentage of average net assets)
Expenses before reductions	1.79	1.597
Expenses net of fee waiver	1.45	1.547
Expenses net of all fee waivers
and credits	1.45	1.547
Net investment income	3.31	5.027
Portfolio turnover (%)	24	23

¹ Class A shares began operations on 3-1-07.

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

³ Based on the average of the shares outstanding.

⁴ Assumes dividend reinvestment and does not reflect the effect of sales charges.

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

⁶ Not annualized.

⁷ Annualized.

See notes to financial statements

Semiannual 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

CLASS B SHARES

Period ended	2-29-081	8-31-082
Per share operating performance
Net asset value, beginning of period	$10.00	$9.51
Net investment income3	0.22	0.21
Net realized and unrealized loss
on investments	(0.45)	(0.54)
Total from investment operations	(0.23)	(0.33)
Less distributions
From net investment income	(0.23)	(0.19)
From net realized gain	(0.03)	(0.03)
Total distributions	(0.26)	(0.22)
Net asset value, end of period	$9.51	$8.96
Total return (%) 4,5	(2.54)	(5.43)6
Ratios and supplemental data
Net assets, end of period (in millions)	$1	$1
Ratios (as a percentage of average net assets)
Expenses before reductions	3.89	3.467
Expenses net of fee waiver	2.23	2.257
Expenses net of all fee waivers and credits	2.23	2.257
Net investment income	2.11	4.327
Portfolio turnover (%)	24	23

¹ Class B shares began operations on 3-1-07.

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

³ Based on the average of the shares outstanding.

⁴ Assumes dividend reinvestment.

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

⁶ Not annualized.

⁷ Annualized.

See notes to financial statements

20  Global Shareholder Yield Fund | Semiannual report 

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	8-31-082
Per share operating performance
Net asset value, beginning of period	$10.00	$9.51
Net investment income3	0.22	0.20
Net realized and unrealized loss
on investments	(0.45)	(0.53)
Total from investment operations	(0.23)	(0.33)
Less distributions
From net investment income	(0.23)	(0.19)
From net realized gain	(0.03)	(0.03)
Total distributions	(0.26)	(0.22)
Net asset value, end of period	$9.51	$8.96
Total return (%) 4,5	(2.54)	(5.43)6
Ratios and supplemental data
Net assets, end of period (in millions)	$5	$4
Ratios (as a percentage of average net assets)
Expenses before reductions	3.00	2.587
Expenses net of fee waiver	2.23	2.257
Expenses net of all fee waivers and credits	2.22	2.257
Net investment income	2.08	4.307
Portfolio turnover (%)	24	23

¹ Class C shares began operations on 3-1-07.

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

³ Based on the average of the shares outstanding.

⁴ Assumes dividend reinvestment.

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

⁶ Not annualized.

⁷ Annualized.

See notes to financial statements

Semiannual 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 I SHARES
Period ended	2-29-081	8-31-082
Per share operating performance
Net asset value, beginning of period	$10.00	$9.53
Net investment income3	0.33	0.20
Net realized and unrealized loss
on investments	(0.44)	(0.41)
Total from investment operations	(0.11)	(0.21)
Less distributions
From net investment income	(0.33)	(0.31)
From net realized gain	(0.03)	(0.03)
Total distributions	(0.36)	(0.34)
Net asset value, end of period	$9.53	$8.98
Total return (%) 4,5	(1.43)	(4.86)6
Ratios and supplemental data
Net assets, end of period (in millions)	$3	$71
Ratios (as a percentage of average net assets)
Expenses before reductions	2.16	1.127
Expenses net of fee waiver	1.09	1.107
Expenses net of all fee waivers and credits	1.09	1.107
Net investment income	3.14	4.387
Portfolio turnover (%)	24	23

¹ Class I shares began operations on 3-1-07.

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

³ Based on the average of the shares outstanding.

⁴ Assumes dividend reinvestment.

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

⁶ Not annualized.

⁷ Annualized.

See notes to financial statements

22  Global Shareholder Yield Fund | Semiannual report 

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	8-31-082
Per share operating performance
Net asset value, beginning of period	$10.00	$9.52
Net investment income3	0.35	0.23
Net realized and unrealized loss
on investments	(0.52)	(0.50)
Total from investment operations	(0.17)	(0.27)
Less distributions
From net investment income	(0.28)	(0.25)
From net realized gain	(0.03)	(0.03)
Total distributions	(0.31)	(0.28)
Net asset value, end of period	$9.52	$8.97
Total return (%) 4,5	(2.01)	(5.10)6
Ratios and supplemental data
Net assets, end of period (in millions)	—7	—7
Ratios (as a percentage of average net assets)
Expenses before reductions	16.23	15.828
Expenses net of fee waiver	1.64	1.608
Expenses net of all fee waivers and credits	1.64	1.608
Net investment income	3.37	4.968
Portfolio turnover (%)	24	23

¹ Class R1 shares began operations on 3-1-07.

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

³ Based on the average of the shares outstanding.

⁴ Assumes dividend reinvestment.

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

⁶ Not annualized.

⁷ Less than $500,000.

⁸ Annualized.

See notes to financial statements

Semiannual report | Global Shareholder Yield Fund  23 

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	8-31-081,2
Per share operating performance
Net asset value, beginning of period	$9.71
Net investment income3	0.17
Net realized and unrealized loss
on investments	(0.83)
Total from investment operations	(0.66)
Less distributions
From net investment income	(0.06)
Total distributions	(0.06)
Net asset value, end of period	$8.99
Total return (%) 4,5	(6.85)6
Ratios and supplemental data
Net assets, end of period (in millions)	$88
Ratios (as a percentage of average net assets)
Expenses before reductions	1.047
Expenses net of fee waiver	1.047
Expenses net of all fee waivers and credits	1.047
Net investment income	5.307
Portfolio turnover (%)	23

¹ Class NAV shares began operations on 4-28-08.

² Semiannual period from 4-28-08 to 8-31-08. Unaudited.

³ Based on the average of the shares outstanding.

⁴ Assumes dividend reinvestment.

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

⁶ Not annualized.

⁷ Annualized.

See notes to financial statements

24  Global Shareholder Yield Fund | Semiannual report 

Notes to financial statements (unaudited)

Note 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, Class R1 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. 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 di stribution plan have exclusive voting rights to that distribution plan. Class B shares will convert to Class A shares eight years after purchase.

Note 2
Significant accounting policies

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:

Security valuation

The net asset value of Class A, Class B, Class C, Class I, Class R1 and Class NAV 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) 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,

Semiannual report | Global Shareholder Yield Fund  25 

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 the 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 a Fund investing significant amounts of assets in securities in foreign markets will be fair valued more frequently than a Fund 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 investments 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 that tracks foreign markets in which the Fund has significant investments. If a significant market event occurs due to a change in the value of the index, the pricing for investments in foreign markets that have closed prior to the NYSE will promptly be reviewed and potential adjustments to the net asset value will be recommended to the Fund’s Pricing Committee where applicable.

Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity.

The Fund adopted Statement of Financial Accounting Standards No. 157 (FAS 157), Fair Value Measurements, effective with the beginning of the Fund’s fiscal year. FAS 157 established a three-tier hierarchy to prioritize the assumptions, referred to as inputs, used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below:

Level 1 — Quoted prices in active markets for identical securities.

Level 2 — Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants would use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.

Level 3 — Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable, such as when there is little or no market activity for an investment, unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors that market participants would use in pricing an investment and would be based on the best information available.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

26  Global Shareholder Yield Fund | Semiannual report 

The following is a summary of the inputs used to value the Fund’s net assets as of August 31, 2008:

	INVESTMENTS IN	OTHER FINANCIAL
VALUATION INPUTS	SECURITIES	INSTRUMENTS*
Level 1 — Quoted Prices	$105,566,999	—
Level 2 — Other Significant Observable Inputs	73,120,365	—
Level 3 — Significant Unobservable Inputs	—	—
Total	$178,687,364	—

*Other financial instruments are derivative instruments not reflected in the Portfolio of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/ depreciation on the instrument.

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 translation

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.

Investment transactions

Investment transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment security transactions are reported on trade date. Interest income is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date net of foreign withholding taxes. Discounts/premiums are accreted/amortized for financial reporting purposes. Realized gains and losses from investment transactions are recorded on an identified cost basis.

Broker commission rebates

The Fund may direct certain security trades to brokers who have agreed to rebate a portion of the related brokerage commission to the Fund. Commission rebates are reflected as a realized gain on securities in the Statement of Operations and amounted to $6,235.

Class allocations

Income, common expenses and realized and unrealized gains (losses) are determined at the fund level and allocated daily to each class of shares based on the appropriate net asset value of the respective classes. Distribution and service fees, if any, and transfer agent fees for Class A, Class B, Class C,

Semiannual report | Global Shareholder Yield Fund  27 

Class I, Class R1 and Class NAV shares are calculated daily at the class level based on the appropriate net asset value of each class and the specific expense rate(s) applicable to each class.

Guarantees and indemnifications

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

Expenses

The majority of expenses are directly identifiable to an individual fund. Trust expenses that are not readily identifiable to a specific fund are allocated in such a manner as deemed equitable, taking into consideration, among other things, the nature and type of expense and the relative size of the funds.

Line of credit

The Fund has entered into an agreement which enables them to participate in a $150 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. For the period ended August 31, 2008, there were no borrowings under the line of credit.

Pursuant to the custodian agreement, the Custodian may, in its discretion, advance funds to the Fund to make properly authorized payments. When such payments result in an overdraft, the Fund is obligated to repay the Custodian for any overdraft, including any costs or expenses associated with the overdraft. The Custodian has a lien and security interest in any Fund property to the extent of any overdraft.

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 Financial Accounting Standards Board (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 year remain subject to examination by the Internal Revenue Service.

New accounting pronouncements

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 and interim reporting periods 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 evaluati ng the adoption of FAS 161 on the Fund’s financial statement disclosures.

28  Global Shareholder Yield Fund | Semiannual report 

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. The Fund declares income dividends and capital gains dividends, if any, annually. 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.

Such distributions, 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.

Note 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 period ended August 31, 2008, were equivalent to an annual effective rate of 0.95% of the Fund’s average daily net assets.

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.

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, 1.60% for Class R1 and 1.05% for Class NAV. Accordingly, the expense reductions or reimbursements related to this agreement were $5,185, $6,698, $7,676, $4,107, $6,925 and $0 for Class A, Class B, Class C, Class I, Class R1 and Class NAV, respectively for the period ended August 31, 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.

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

Semiannual report | Global Shareholder Yield Fund  29 

share of net assets of each class at the time the expense was incurred.

The fund administration fees incurred for the period ended August 31, 2008, were $5,613 with an annual effective rate of 0.01% of the Fund’s average daily net assets.

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 the 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 period ended August 31, 2008, were equivalent to an annual effective rate of 0.15% of the Class R1 average daily net assets.

Class A shares are assessed up-front sales charges. During the period ended August 31, 2008 the Distributor received net up-front sales charges of $24,113 with regard to sales of Class A shares. Of this amount, $3,553 was retained and used for printing prospectuses, advertising, sales literature and other purposes, $20,319 was paid as sales commissions to unrelated broker-dealers and $241 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 period ended August 31, 2008, CDSCs received by the Distributor amounted to $1,837 for Class B shares and $2,158 for Class C shares.

The Fund has a transfer agent 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’s average daily net asset value, plus a fee based on the number of shareholder accounts and reimbursement for certain out-of-pocket expenses, 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 $16.50 for each Class A, Class B, Class C, Class I and Class R1 shareholder account. Signature Services had agreed to limit Class A, Class B, Class C, Class I and Class R1 transfer agent fee to 0.20% of each respective class’s average daily net asset value until December 31, 2008. Signature Services reserves the right to terminate this limitation in the future. There were no transfer agent fee reducti ons during the period ended August 31, 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 period ended August 31, 2008, the transfer agent fees reductions for Class R1 were $37.

The Fund receives earnings credits from its transfer agent as a result of uninvested cash

30  Global Shareholder Yield Fund | Semiannual report 

balances. These credits are used to reduce a portion of the Fund’s transfer agent fees and out-of-pocket expenses. During the period ended August 31, 2008, the Fund’s transfer agent fees and out-of-pocket expenses were reduced by $104 for transfer agent credits earned.

Class level expenses including the allocation of the transfer agent fees for the period ended August 31, 2008, were as follows:

	Distribution and	Transfer		Printing and
Share class	service fees	agent fees	Blue sky fees	postage fees
Class A	$30,389	$9,179	$6,925	$3,991
Class B	5,541	1,118	6,402	142
Class C	23,603	4,744	6,722	396
Class I	—	8,300	6,901	453
Class R1	245	62	6,862	51
Total	$59,778	$23,403	$33,812	$5,033

The Adviser and other affiliates of John Hancock USA owned 10,367 shares of beneficial interest of Class R1 respectively, on August 31, 2008.

Note 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.

Semiannual report | Global Shareholder Yield Fund  31 

Note 5
Fund share transactions

This listing illustrates the number of Fund shares sold, reinvested and repurchased during the year ended February 29, 2008, and the period ended August 31, 2008, along with the corresponding dollar value.

		Year ended 2-29-08	Period ended 8-31-081
	Shares	Amount	Shares	Amount
Class A shares
Sold	3,579,005	$36,990,887	329,580	$3,094,457
Distributions reinvested	74,870	786,460	14,187	133,348
Repurchased	(778,581)	(8,201,185)	(1,389,547)	(13,378,688)
Net increase (decrease)	2,875,294	$29,576,162	(1,045,780)	($10,150,883)
Class B shares
Sold	152,636	$1,617,383	4,075	$38,991
Distributions reinvested	2,550	26,721	402	3,774
Repurchased	(22,055)	(222,085)	(28,639)	(271,436)
Net increase (decrease)	133,131	$1,422,019	(24,162)	($228,671)
Class C shares
Sold	545,185	$5,766,651	104,509	$993,507
Distributions reinvested	7,254	75,951	1,227	11,521
Repurchased	(70,535)	(720,096)	(88,616)	(838,410)
Net increase	481,904	$5,122,506	17,120	$166,618
Class I shares
Sold	373,901	$3,986,954	8,063,282	$77,972,838
Distributions reinvested	2,569	26,908	44,200	414,191
Repurchased	(58,546)	(611,454)	(576,823)	(5,307,994)
Net increase	317,924	$3,402,408	7,530,659	$73,079,035
Class R1 shares
Sold	10,000	$100,000	—	—
Distributions reinvested	293	3,078	74	691
Net increase	10,293	$103,078	74	$691
Class NAV shares
Sold	—	—	9,712,256	$94,326,410
Distributions reinvested	—	—	54,356	509,320
Repurchased	—	—	(1,102)	(10,940)
Net increase	—	—	9,765,510	$94,824,790
Net increase	3,818,546	$39,626,173	16,243,421	$157,691,580

¹Semiannual period from 3-1-08 to 8-31-08. Unaudited.

Note 6
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 period ended August 31, 2008, aggregated $168,370,659 and $23,032,272, respectively.

32  Global Shareholder Yield Fund | Semiannual report 

Board Consideration of and
Continuation of Investment Advisory
Agreement and Subadvisory
Agreement: John Hancock Global
Shareholder Yield Fund

The Investment Company Act of 1940 (the 1940 Act) requires the Board of Trustees (the Board) of John Hancock Capital Series (the Trust), including a majority of the Trustees who have no direct or indirect interest in the investment advisory agreement and are not “interested persons” of the Trust, as defined in the 1940 Act (the Independent Trustees), annually to meet in person to review and consider the continuation of: (i) the investment advisory agreement (the Advisory Agreement) with John Hancock Investment Management Services, LLC (the Adviser) and (ii) the investment subadvisory agreement (the Subadvisory Agreement) with Epoch Investment Partners, Inc. (the Subadviser) for the John Hancock Global Shareholder Yield Fund (the Fund). The Advisory Agreement and the Subadvisory Agreement are collectively referred to as the Advisory Agreements.

At meetings held on May 5–6 and June 9–10, 2008, the Board considered the factors and reached the conclusions described below relating to the selection of the Adviser and Subadviser and the continuation of the Advisory Agreements. During such meetings, the Board’s Contracts/ Operations Committee and the Independent Trustees also met in executive sessions with their independent legal counsel.

In evaluating the Advisory Agreements, the Board, including the Contracts/Operations Committee and its Independent Trustees, reviewed a broad range of information requested for this purpose. This information included:

(i) the Adviser’s financial results and condition, including its and certain of its affiliates’ profitability from services performed for the Fund;

(ii) the Adviser’s and Subadviser’s record of compliance with applicable laws and regulations, with the Fund’s investment policies and restrictions, and with the applicable Code of Ethics, and the structure and responsibilities of the Adviser’s and Subadviser’s compliance department;

(iii) the background and experience of senior management and investment professionals; and

(iv) the nature, cost and character of advisory and non-investment management services provided by the Adviser and its affiliates and by the Subadviser.

The Board noted that the Fund had less than one year of operations. Due to the Fund’s short operational history, the Board did not obtain an analysis comparing the Fund’s investment performance, advisory and other fees and expense ratios to a peer group or category of comparative funds from Morningstar, Inc. (Morningstar), an independent provider of investment company data.

The Independent Trustees considered the legal advice of independent legal counsel and relied on their own business judgment in determining the factors to be considered in evaluating the materials that were presented to them and the weight to be given to each such factor. The Board’s review and conclusions were based on a comprehensive consideration of all information presented to the Board and not the result of any single controlling factor. The Board considered performance information provided to it by the Adviser or Subadviser at its May and June 2008 meetings. Performance and other information may be quite different as of the date of this shareholder’s report. The key factors considered by the Board and the conclusions reached are described below.

Nature, extent and quality of services

The Board considered the ability of the Adviser and the Subadviser, based on their resources, reputation and other attributes, to attract and retain qualified investment professionals, including research, advisory, and supervisory personnel. The Board considered the investment philosophy, research and investment decision-making processes of the Adviser, Subadviser and representatives of the Subadviser that are responsible for the daily investment activities of the Fund. The Board considered the representatives’ history and

Semiannual report | Global Shareholder Yield Fund  33 

experience with the Fund. The Board considered the Adviser’s execution of its oversight responsibilities. The Board further considered the culture of compliance, resources dedicated to compliance, compliance programs and compliance records of the Adviser and Subadviser. In addition, the Board took into account the administrative and other non-advisory services provided to the Fund by the Adviser and its affiliates.

Based on the above factors, together with those referenced below, the Board concluded that, within the context of its full deliberations, the nature, extent and quality of the investment advisory services provided to the Fund by the Adviser and Subadviser supported renewal of the Advisory Agreements.

Fund performance

The Board noted that the Fund had less than one full year of operational history, and considered the performance results for the Fund presented by the Adviser as of April 30 and May 31, 2008. The Board also considered these results in comparison to the performance of several benchmark indexes. The Board noted that the Fund’s performance was lower than the performance of all of the benchmark indexes except the MS World Stock Index for the periods under review. The Board recognized the short operational history of the Fund and indicated its intent to continue to monitor the Fund’s performance trends.

Investment advisory fee and subadvisory fee rates and expenses

The Board reviewed and considered the contractual investment advisory fee rate payable by the Fund to the Adviser for investment advisory services (the Advisory Agreement Rate). The Board did not obtain information comparing the Advisory Agreement Rate, other fees or expense ratios with other comparative fees and expenses of a peer group or category of funds at its May and June 2008 meetings. However, the Board obtained and considered comparative fee data based on funds in a respective Morningstar category prior to the initial approval of the Advisory Agreement. The Board concluded that the Advisory Agreement Rate was not unreasonable.

The Board also obtained information about the investment subadvisory fee rate (the Subadvisory Agreement Rate) payable by the Adviser to the Subadviser for investment subadvisory services. The Board concluded that the Subadvisory Agreement Rate was not unreasonable.

Profitability

The Board received and considered a detailed profitability analysis of the Adviser based on the Advisory Agreements, as well as on other relationships between the Fund and the Adviser and its affiliates. The Board also considered a comparison of the Adviser’s profitability to that of other similar investment advisers whose profitability information is publicly available. The Board concluded that, in light of the costs of providing investment management and other services to the Fund, the profits and other ancillary benefits reported by the Adviser were not unreasonable.

The Board did not consider profitability information with respect to the Subadviser, which is not affiliated with the Adviser. The Board considered that the Subadvisory Agreement Rate paid to the Subadviser had been negotiated by the Adviser on an arm’s length basis and that the Subadviser’s separate profitability from its relationship with the Fund was not a material factor in determining whether to renew the agreement.

Economies of scale

The Board received and considered general information regarding economies of scale with respect to the management of the Fund, including the Fund’s ability to appropriately benefit from economies of scale under the Fund’s fee structure. The Board recognized the inherent limitations of any analysis of economies of scale, stemming largely from the Board’s understanding that most of the Adviser’s costs are not specific to individual Funds, but rather are incurred across a variety of products and services.

To the extent the Board and the Adviser were able to identify actual or potential economies of scale from Fund-specific or allocated expenses, in order to ensure that any such economies continue to be reasonably shared with the Fund as its assets increase, the Adviser

34  Global Shareholder Yield Fund | Semiannual report 

and the Board agreed to continue the existing breakpoints to the Advisory Agreement Rate.

Information about services to other clients

The Board also received information about the nature, extent and quality of services and fee rates offered by the Adviser and Subadviser to their other clients, including other registered investment companies, institutional investors and separate accounts. The Board concluded that the Advisory Agreement Rate and the Subadvisory Agreement Rate were not unreasonable, taking into account fee rates offered to others by the Adviser and Subadviser, respectively, after giving effect to differences in services.

Other benefits to the Adviser

The Board received information regarding potential “fall-out” or ancillary benefits received by the Adviser and its affiliates and the Subadviser as a result of their relationship with the Fund. Such benefits could include, among others, benefits directly attributable to the relationship of the Adviser and Subadviser with the Fund and benefits potentially derived from an increase in business of the Adviser and Subadviser as a result of their relationship with the Fund (such as the ability to market to shareholders other financial products offered by the Adviser and its affiliates).

The Board also considered the effectiveness of the Adviser’s, Subadviser’s and Fund’s policies and procedures for complying with the requirements of the federal securities laws, including those relating to best execution of portfolio transactions and brokerage allocation.

Other factors and broader review

As discussed above, the Board reviewed detailed materials received from the Adviser and Subadviser as part of the annual re-approval process. The Board also regularly reviews and assesses the quality of the services that the Fund receives throughout the year. In this regard, the Board reviews reports of the Adviser at least quarterly, which include, among other things, fund performance reports and compliance reports. In addition, the Board meets with portfolio managers and senior investment officers at various times throughout the year.

After considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Board concluded that approval of the continuation of the Advisory Agreements for the Fund was in the best interest of the Fund and its shareholders. Accordingly, the Board unanimously approved the continuation of the Advisory Agreements.

Semiannual report | Global Shareholder Yield Fund  35 

More information

Trustees	Investment adviser
James F. Carlin, Chairman	John Hancock Investment Management
James R. Boyle†	Services, LLC
William H. Cunningham
Deborah C. Jackson	Subadviser
Charles L. Ladner*	Epoch Investment Partners, Inc.
Stanley Martin*	Principal distributor
Dr. John A. Moore*	John Hancock Funds, LLC
Patti McGill Peterson*
Steven R. Pruchansky	Custodian
Gregory A. Russo*	State Street Bank & Trust Company
* Members of the Audit Committee
† Non-Independent Trustee	Transfer agent
	John Hancock Signature Services, Inc.
Officers
Keith F. Hartstein	Legal counsel
President and Chief Executive Officer	K&L Gates LLP
Thomas M. Kinzler
Secretary and Chief Legal Officer
Francis V. Knox, Jr.
Chief Compliance Officer
Charles A. Rizzo
Chief Financial Officer
Gordon M. Shone
Treasurer
John G. Vrysen
Chief Operating Officer

Additional information about your fund is available without charge in several ways. As required by the SEC, you can access proxy voting information and quarterly portfolio information on your fund. The proxy voting information includes a description of proxy voting policies, procedures and information regarding how the fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30. The quarterly portfolio information that includes a complete list of the fund’s holdings for the first and third quarters of the fund’s fiscal period is filed on Form N-Q. You have access to this information:

By phone	On the fund’s Website	At the SEC
1-800-225-5291	www.jhfunds.com	www.sec.gov
		1-800-SEC-0330
		SEC Public Reference Room

You can also contact us:
Regular mail	Express mail
John Hancock Signature Services, Inc.	John Hancock Signature Services, Inc.
P.O. Box 9510	Mutual Fund Image Operations
Portsmouth, NH 03802-9510	164 Corporate Drive
	Portsmouth, NH 03801

Month-end portfolio holdings are available at www.jhfunds.com.

36  Global Shareholder Yield Fund | Semiannual report 

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.	320SA 8/08
It is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus.	10/08

A look at performance

For the periods ended August 31, 2008
		Average annual returns (%)				Cumulative total returns (%)
		with maximum sales charge (POP)				with maximum sales charge (POP)
	Inception	One	Five	Ten	Since	Six	One	Five	Ten	Since
Class	date	year	years	years	inception	months	year	years	years	inception
A	3-1-07	–31.81	—	—	–23.01	–14.25	–31.81	—	—	–32.52
B	3-1-07	–32.31	—	—	–23.00	–14.63	–32.31	—	—	–32.50
C	3-1-07	–29.51	—	—	–20.86	–11.02	–29.51	—	—	–29.67
I1	3-1-07	–27.96	—	—	–19.96	–9.59	–27.96	—	—	–28.46
R11	3-1-07	–28.33	—	—	–20.45	–9.75	–28.33	—	—	–29.12

Performance figures assume all distributions are reinvested. Public offering price (POP) figures reflect maximum sales charges 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 June 30, 2009. The net expenses are as follows: Class A — 1.37%, Class B — 2.12%, Class C — 2.12%, Class I — 0.97%, Class R1 — 1.64%. Had the fee waivers and expense limitations not been in place, the gross expenses would be as follows: Class A — 2.52%, Class B — 11.98%, Class C — 6.38%, Class I — 13.02%, Class R1 — 13.76%.

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 current to the most recent month end performance data, 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.

6  Classic Value Mega Cap Fund | Semiannual report 

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	$7,023	$6,750	$8,769	$8,750
C2	3-1-07	7,033	7,033	8,769	8,750
I3	3-1-07	7,154	7,154	8,769	8,750
R13	3-1-07	7,088	7,088	8,769	8,750

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 August 31, 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 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.

Semiannual report | Classic Value Mega Cap Fund  7 

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 March 1, 2008 with the same investment held until August 31, 2008.

	Account value	Ending value	Expenses paid during
	on 3-1-08	on 8-31-08	period ended 8-31-081
Class A	$1,000.00	$902.60	$6.57
Class B	1,000.00	$898.70	10.15
Class C	1,000.00	$898.80	10.15
Class I	1,000.00	$904.10	4.66
Class R1	1,000.00	$902.50	7.43

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 August 31, 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:

8  Classic Value Mega Cap Fund | Semiannual report 

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 March 1, 2008, with the same investment held until August 31, 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 3-1-08	on 8-31-08	period ended 8-31-081
Class A	$1,000.00	$1,018.30	$6.97
Class B	1,000.00	1,014.50	10.76
Class C	1,000.00	1,014.50	10.76
Class I	1,000.00	1,020.30	4.94
Class R1	1,000.00	1,017.40	7.88

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 1.47% 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 the most recent fiscal half-year/365 (to reflect the one-half year period).

Semiannual report | Classic Value Mega Cap Fund  9 

Portfolio summary

Top 10 holdings1
Northrop Grumman Corp.	4.9%	Microsoft Corp.	4.2%
Citigroup, Inc.	4.9%	Motorola, Inc.	3.8%
Capital One Financial Corp.	4.7%	Kohl’s Corp.	3.8%
Alcatel-Lucent	4.6%	Kimberly-Clark Corp.	3.5%
Allstate Corp.	4.5%	Bank of America Corp.	3.4%
Sector distribution1,2
Financial	34%	Technology	5%
Consumer, Non-cyclical	21%	Energy	3%
Communications	10%	Utilities	3%
Consumer Cyclical	9%	Short-term Investments	10%
Industrial	6%

¹ As a percentage of net assets on August 31, 2008.

² Sector investing is subject to greater risks than the market as a whole. Because the Fund may focus on particular sectors of the economy, its performance may depend on the performance of those sectors.

10  Classic Value Mega Cap Fund | Semiannual report 

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 8-31-08 (unaudited)

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 97.89%		$9,090,677
(Cost $10,786,738)
Aerospace 4.89%		454,410
Northrop Grumman Corp.	6,600	454,410
Banking 6.81%		632,250
Bank of America Corp.	10,200	317,628
Wachovia Corp.	19,800	314,622
Biotechnology 2.42%		224,689
Amgen, Inc. *	3,575	224,689
Cable & Television 2.53%		235,103
Viacom, Inc., Class B *	7,975	235,103
Cellular Communications 3.76%		349,011
Motorola, Inc.	37,050	349,011
Cosmetics & Toiletries 3.49%		323,820
Kimberly-Clark Corp.	5,250	323,820
Electronics 1.52%		141,085
Tyco Electronics, Ltd.	4,287	141,085
Energy 2.96%		275,120
Sempra Energy	4,750	275,120
Financial Services 19.02%		1,766,164
Capital One Financial Corp.	9,800	432,572
Citigroup, Inc.	23,825	452,437
Federal Home Loan Mortgage Corp.	20,575	92,793
Federal National Mortgage Association	11,625	79,515
JP Morgan Chase & Company	6,900	265,581
Lehman Brothers Holdings, Inc.	9,400	151,246
Morgan Stanley	5,875	239,876
Washington Mutual, Inc.	12,875	52,144
Food & Beverages 2.91%		270,198
Kraft Foods, Inc., Class A	8,575	270,198
Healthcare Products 5.92%		549,550
Boston Scientific Corp. *	22,025	276,634
Johnson & Johnson	3,875	272,916

See notes to financial statements

Semiannual report | Classic Value Mega Cap Fund  11 

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

Issuer	Shares	Value
Healthcare Services 2.96%		$274,900
Cardinal Health, Inc.	5,000	274,900
Insurance 11.08%		1,029,110
ACE, Ltd. *	4,550	239,375
Allstate Corp.	9,200	415,196
Chubb Corp.	3,850	184,839
MetLife, Inc.	3,500	189,700
International Oil 2.99%		277,546
BP PLC, SADR	3,150	181,534
Exxon Mobil Corp.	1,200	96,012
Manufacturing 0.56%		51,971
Tyco International, Ltd.	1,212	51,971
Pharmaceuticals 4.69%		435,946
Bristol-Myers Squibb Company	8,525	181,923
Pfizer, Inc.	3,750	71,663
Schering-Plough Corp.	9,400	182,360
Retail Trade 9.87%		916,245
Home Depot, Inc.	10,075	273,234
Kohl’s Corp. *	6,700	329,439
Lowe’s Companies, Inc.	9,250	227,920
Wal-Mart Stores, Inc.	1,450	85,652
Software 4.91%		455,903
Microsoft Corp.	14,275	389,565
Oracle Corp. *	3,025	66,338
Telecommunications Equipment & Services 4.60%		427,656
Alcatel-Lucent, SADR *	69,200	427,656
	Principal
Issuer, description, maturity date	amount	Value
Repurchase agreements 10.81%		$1,004,000
(Cost $1,004,000)
Repurchase Agreement with State Street Corp. dated 08/29/2008 at
1.70% to be repurchased at $1,004,190 on 09/02/2008, collateralized
by $1,010,000 Federal Farm Credit Bank, 5.38% due 03/11/2019
(valued at $1,025,150, including interest)	$1,004,000	1,004,000
Total investments (Cost $11,790,738)† 108.70%		$10,094,677
Liabilities in excess of other assets (8.70%)		(808,338)
Total net assets 100.00%		$9,286,339

Percentages are stated as a percent of net assets.

SADR Sponsored American Depositary Receipts

* Non-Income Producing

† At July 31, 2008, the aggregate cost of investment securities for federal income tax purposes was $11,796,371. Net unrealized depreciation aggregated $1,701,694, of which $267,872 related to appreciated investment securities and $1,969,566 related to depreciated investment securities.

See notes to financial statements

12  Classic Value Mega Cap Fund | Semiannual report 

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 8-31-08 (unaudited)

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 $11,790,738)	$10,094,677
Cash	439
Receivable for fund shares sold	47
Dividends and interest receivable	13,947
Receivable due from adviser	3,233
Other assets	11,010
Total assets	10,123,353
Liabilities
Payable for investments purchased	757,180
Payable for fund shares repurchased	21,538
Payable to affiliates
Fund administration fees	304
Transfer agent fees	1,460
Distribution and service fees	263
Trustees’ fees	87
Other payables and accrued expenses	56,183
Total liabilities	837,014
Net assets
Capital paid-in	$11,460,457
Undistributed net investment income	50,711
Accumulated undistributed net realized loss on investments	(528,768)
Net unrealized depreciation on investments	(1,696,061)
Net assets	$9,286,339

See notes to financial statements

Semiannual report | Classic Value Mega Cap Fund  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 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	$8,733,232
Shares outstanding	1,273,135
Net asset value and redemption price per share	$6.86
Class B1
Net assets	$121,688
Shares outstanding	17,807
Net asset value and offering price per share	$6.83
Class C1
Net assets	$263,368
Shares outstanding	38,520
Net asset value and offering price per share	$6.84
Class I
Net assets	$92,532
Shares outstanding	13,459
Net asset value and offering price per share	$6.88
Class R1
Net assets	$75,519
Shares outstanding	11,032
Net asset value, offering price and redemption price per share	$6.85
Maximum public offering price per share
Class A (net asset value per share + 95%)2	$7.22

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  Classic Value Mega Cap Fund | Semiannual 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 period ended 8-31-08 (unaudited)¹

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	$84,631
Interest	2,215
Total investment income	86,846
Expenses
Investment management fees (Note 3)	26,217
Distribution and service fees (Note 3)	9,553
Blue sky fees (Note 3)	30,599
Audit and legal fees	18,062
Custodian fees	7,094
Registration and filing fees	5,245
Printing and postage fees (Note 3)	4,750
Transfer agent fees (Note 3)	2,782
Fund administration fees (Note 3)	472
Trustees’ fees (Note 3)	221
Miscellaneous	44
Total expenses	105,039
Less expense reductions (Note 3)	(61,047)
Less transfer agency credits (Note 3)	(42)
Net expenses	43,950
Net investment income	42,896
Realized and unrealized loss
Net realized loss on investments in unaffiliated issuers	(249,396)
Change in net unrealized appreciation (depreciation) of
investments in unaffiliated issuers	(248,056)
Net realized and unrealized loss	(497,452)
Decrease in net assets from operations	($454,556)

¹ Semiannual period from 3-1-08 to 8-31-08.

See notes to financial statements

Semiannual 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

Statements of changes in net assets

These Statements 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	Period
	ended	ended
	2-29-08	8-31-081
Increase (decrease) in net assets
From operations
Net investment income	$76,690	$42,896
Net realized loss	(144,795)	(249,396)
Change in net unrealized appreciation (depreciation)	(1,448,005)	(248,056)
Decrease in net assets resulting from operations	(1,516,110)	(454,556)
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 5)	7,084,760	4,379,594
Total increase	5,361,301	3,925,038
Net assets
Beginning of period	—	5,361,301
End of period	$5,361,301	$9,286,339
Undistributed net investment income	$7,815	$50,711

¹ Semiannual period from 3-1-08 to 8-31-08. Unaudited.

See notes to financial statements

16  Classic Value Mega Cap Fund | Semiannual report 

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	8-31-082
Per share operating performance
Net asset value, beginning of period	$10.00	$7.60
Net investment income3	0.13	0.05
Net realized and unrealized loss
on investments	(2.23)	(0.79)
Total from investment operations	(2.10)	(0.74)
Less distributions
From net investment income	(0.11)	—
From net realized gain	(0.19)	—
Total distributions	(0.30)	—
Net asset value, end of period	$7.60	$6.86
Total return (%)4,5	(21.28)	(9.74)6
Ratios and supplemental data
Net assets, end of period (in millions)	$5	$9
Ratios (as a percentage of average net assets):
Expenses before reductions	2.52	2.557
Expenses net of fee waivers	1.37	1.377
Expenses net of fee waivers and credits	1.37	1.377
Net investment income	1.34	1.447
Portfolio turnover (%)	38	18

¹ Class A shares began operations on 3-1-07.

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

³ Based on the average of the shares outstanding.

⁴ Assumes dividend reinvestment and does not reflect the effect of sales charges.

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

⁶ Not annualized.

⁷ Annualized.

See notes to financial statements

Semiannual report | Classic Value Mega Cap Fund  17 

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	8-31-082
Per share operating performance
Net asset value, beginning of period	$10.00	$7.60
Net investment income3	0.05	0.03
Net realized and unrealized loss
on investments	(2.21)	(0.80)
Total from investment operations	(2.16)	(0.77)
Less distributions
From net investment income	(0.05)	—
From net realized gain	(0.19)	—
Total distributions	(0.24)	—
Net asset value, end of period	$7.60	$6.83
Total return (%)4,5	(21.85)	(10.13)6
Ratios and supplemental data
Net assets, end of period (in millions)	—7	—7
Ratios (as a percentage of average net assets):
Expenses before reductions	11.98	11.858
Expenses net of fee waivers	2.12	2.128
Expenses net of fee waivers and credits	2.12	2.128
Net investment income	0.58	0.748
Portfolio turnover (%)	38	18

¹ Class B shares began operations on 3-1-07.

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

³ Based on the average of the shares outstanding.

⁴ Assumes dividend reinvestment.

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

⁶ Not annualized.

⁷ Less than $500,000.

⁸ Annualized.

See notes to financial statements

18  Classic Value Mega Cap Fund | Semiannual report 

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	8-31-082
Per share operating performance
Net asset value, beginning of period	$10.00	$7.61
Net investment income3	0.06	0.03
Net realized and unrealized loss
on investments	(2.21)	(0.80)
Total from investment operations	(2.15)	(0.77)
Less distributions
From net investment income	(0.05)	—
From net realized gain	(0.19)	—
Total distributions	(0.24)	—
Net asset value, end of period	$7.61	$6.84
Total return (%)4,5	(21.75)	(10.12)6
Ratios and supplemental data
Net assets, end of period (in millions)	—7	—7
Ratios (as a percentage of average net assets):
Expenses before reductions	6.38	6.408
Expenses net of fee waivers	2.12	2.128
Expenses net of fee waivers and credits	2.12	2.128
Net investment income	0.68	0.748
Portfolio turnover (%)	38	18

¹ Class C shares began operations on 3-1-07.

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

³ Based on the average of the shares outstanding.

⁴ Assumes dividend reinvestment.

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

⁶ Not annualized.

⁷ Less than $500,000.

⁸ Annualized.

See notes to financial statements

Semiannual report | Classic Value Mega Cap Fund  19 

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	8-31-082
Per share operating performance
Net asset value, beginning of period	$10.00	$7.61
Net investment income3	0.17	0.07
Net realized and unrealized loss
on investments	(2.23)	(0.80)
Total from investment operations	(2.06)	(0.73)
Less distributions
From net investment income	(0.14)	—
From net realized gain	(0.19)	—
Total distributions	(0.33)	—
Net asset value, end of period	$7.61	$6.88
Total return (%)4,5	(20.87)	(9.59)6
Ratios and supplemental data
Net assets, end of period (in millions)	—7	—7
Ratios (as a percentage of average net assets):
Expenses before reductions	13.02	13.378
Expenses net of fee waivers	0.97	0.978
Expenses net of fee waivers and credits	0.97	0.978
Net investment income	1.80	1.928
Portfolio turnover (%)	38	18

¹ Class I shares began operations on 3-1-07.

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

³ Based on the average of the shares outstanding.

⁴ Assumes dividend reinvestment.

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

⁶ Not annualized.

⁷ Less than $500,000.

⁸ Annualized.

See notes to financial statements

20  Classic Value Mega Cap Fund | Semiannual report 

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	8-31-082
Per share operating performance
Net asset value, beginning of period	$10.00	$7.59
Net investment income3	0.11	0.05
Net realized and unrealized loss
on investments	(2.23)	(0.52)
Total from investment operations	(2.12)	(0.74)
Less distributions
From net investment income	(0.10)	—
From net realized gain	(0.19)	—
Total distributions	(0.29)	—
Net asset value, end of period	$7.59	$6.85
Total return (%)4,5	(21.46)	(9.75)6
Ratios and supplemental data
Net assets, end of period (in millions)	—7	—7
Ratios (as a percentage of average net assets):
Expenses before reductions	13.59	19.028
Expenses net of fee waivers	1.65	1.558
Expenses net of fee waivers and credits	1.64	1.478
Net investment income	1.08	1.388
Portfolio turnover (%)	38	18

¹ Class R1 shares began operations on 3-1-07.

² Semiannual period from 3-1-08 to 8-31-08. Unaudited.

³ Based on the average of the shares outstanding.

⁴ Assumes dividend reinvestment.

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

⁶ Not annualized.

⁷ Less than $500,000.

⁸ Annualized.

See notes to financial statements

Semiannual report | Classic Value Mega Cap Fund  21 

Notes to financial statements (unaudited)

Note 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 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 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.

Note 2
Significant accounting policies

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:

Security valuation

The net asset value of Class A, Class B and Class C, Class I and Class R1 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) 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

22  Classic Value Mega Cap Fund | Semiannual report 

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 the 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 a Fund investing significant amounts of assets in securities in foreign markets will be fair valued more frequently than a Fund 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 investments 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 that tracks foreign markets in which the Fund has significant investments. If a significant market event occurs due to a change in the value of the index, the pricing for investments in foreign markets that have closed prior to the NYSE will promptly be reviewed and potential adjustments to the net asset value will be recommended to the Fund’s Pricing Committee where applicable.

Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity.

The Fund adopted Statement of Financial Accounting Standards No. 157 (FAS 157), Fair Value Measurements, effective with the beginning of the Fund’s fiscal year. FAS 157 established a three-tier hierarchy to prioritize the assumptions, referred to as inputs, used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below:

Level 1 – Quoted prices in active markets for identical securities.

Level 2 – Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants would use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.

Level 3 – Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable, such as when there is little or no market activity for an investment, unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors that market participants would use in pricing an investment and would be based on the best information available.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

Semiannual report | Classic Value Mega Cap Fund  23 

The following is a summary of the inputs used to value the Fund’s net assets as of August 31, 2008:

	INVESTMENTS IN	OTHER FINANCIAL
VALUATION INPUTS	SECURITIES	INSTRUMENTS*
Level 1 — Quoted Prices	$9,090,677	$—
Level 2 — Other Significant Observable Inputs	1,004,000	—
Level 3 — Significant Unobservable Inputs	—	—
Total	$10,094,677	$—

*Other financial instruments are derivative instruments not reflected in the Portfolio of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/ depreciation on the instrument.

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.

Investment transactions

Investment transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment security transactions are reported on trade date. Interest income is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date net of foreign withholding taxes. Realized gains and losses from investment transactions are recorded on an identified cost basis.

Broker commission rebates

The Fund may direct certain security trades to brokers who have agreed to rebate a portion of the related brokerage commission to the Fund. Commission rebates are reflected as a realized gain on securities in the Statement of Operations and amounted to $1,262.

Class allocations

Income, common expenses and realized and unrealized gains (losses) are determined at the fund level and allocated daily to each class of shares based on the appropriate net asset value of the respective classes. Distribution and service fees, if any, and transfer agent fees for Class A, Class B, Class C, Class I and Class R1 shares are calculated daily at the class level based on the appropriate net asset value of each class and the specific expense rate(s) applicable to each class.

Guarantees and indemnifications

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

Expenses

The majority of expenses are directly identifiable to an individual fund. Trust expenses that are not readily identifiable to a specific fund are allocated in such a manner as deemed equitable, taking into consideration, among other things, the nature and type of expense and the relative size of the funds.

24  Classic Value Mega Cap Fund | Semiannual report 

Line of credit

The Fund has entered into an agreement which enables them to participate in a $150 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. For the period ended August 31, 2008, there were no borrowings under the line of credit.

Pursuant to the custodian agreement, the Custodian may, in its discretion, advance funds to the Fund to make properly authorized payments. When such payments result in an overdraft, the Fund is obligated to repay the Custodian for any overdraft, including any costs or expenses associated with the overdraft. The Custodian has a lien and security interest in any Fund property to the extent of any overdraft.

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 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 Financial Accounting Standards Board (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 remain subject to examination by the Internal Revenue Service.

New accounting pronouncements

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 and interim reporting periods 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 evaluatin g the adoption of FAS 161 on the Fund’s financial statement disclosures.

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. The Fund declares and pays income dividends and capital gains dividends, if any, at least annually. 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.

Such distributions, 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.

Semiannual report | Classic Value Mega Cap Fund  25 

Note 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 aggregate daily net assets; (b) 0.825% of the next $2,500,000,000 of the Fund’s aggregate daily net assets; and (c) 0.80% of the Fund’s aggregate daily net assets in excess of $5,000,000,000. 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 period ended August 31, 2008, were equivalent to an annual effective rate of 0.85% of the Fund’s average daily net assets.

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, 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 1.37% 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 $32,330, $6,479, $7,928, $7,215 and $7,095 for Class A, Class B, Class C, Class I and Class R1, respectively, for the period ended August 31, 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.

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 period ended August 31, 2008, were $472 with an annual effective rate of 0.02% of the Fund’s average daily net assets.

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 the Financial Industry Regulatory Authority (formerly the National Association of Securities Dealers). Under the Conduct Rules, curtailment

26  Classic Value Mega Cap Fund | Semiannual report 

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 period ended August 31, 2008.

Class A shares are assessed up-front sales charges. During the period ended August 31, 2008, JH Funds received net up-front sales charges of $1,460 with regard to sales of Class A shares. Of this amount, $56 was retained and used for printing prospectuses, advertising, sales literature and other purposes, $1,404 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 period ended August 31, 2008, CDSCs received by the Distributor amounted to $35 for Class C shares.

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 $16.50 for each Class A, Class B, Class C and 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 period ended August 31, 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 period ended August 31, 2008, the transfer agent fees reductions for Class R1 were $32.

The Fund receives 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 period ended August 31, 2008, the Fund’s transfer agent fees and out-of-pocket expenses were reduced by $10 for transfer agent credits earned.

Class level expenses including the allocation of the transfer agent fees for the period ended August 31, 2008, were as follows:

	Distribution
	and service	Transfer	Blue	Printing and
Share class	fees	agent fees	sky fees	postage fees
Class A	$6,835	$2,194	$5,906	$4,174
Class B	665	134	5,771	58
Class C	1,851	372	5,771	325
Class I	—	30	6,561	80
Class R1	202	52	6,590	113
Total	$9,553	$2,782	$30,599	$4,750

Semiannual report | Classic Value Mega Cap Fund  27 

The Adviser and other affiliates of John Hancock USA owned 476,456, 10,283, 10,398 and 10,348 shares of beneficial interest of Class A, Class B, Class I and Class R1, respectively, on February 29, 2008.

Note 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.

Note 5
Fund share transactions

This listing illustrates the number of Funds shares sold, reinvested and repurchased during the year ended February 29, 2008, and the period ended August 31, 2008, along with the corresponding dollar value.

		Year ended 2-29-08	Period ended 8-31-081
	Shares	Amount	Shares	Amount
Class A shares
Sold	644,426	$6,413,956	809,125	$5,462,817
Distributions reinvested	20,663	172,537	—	—
Repurchased	(67,807)	(594,397)	(133,272)	(896,034)
Net increase	597,282	$5,992,096	675,853	$4,566,783
Class B shares
Sold	20,319	$195,176	52	$371
Distributions reinvested	424	3,547	—	—
Repurchased	(1,618)	(13,795)	(1,370)	(10,176)
Net increase (decrease)	19,125	$184,928	(1,318)	($9,805)
Class C shares
Sold	72,248	$710,339	2,664	$20,165
Distributions reinvested	1,482	12,408	—	—
Repurchased	(13,323)	(110,704)	(24,551)	(172,647)
Net increase (decrease)	60,407	$612,043	(21,887)	($152,482)
Class I shares
Sold	20,337	$205,270	671	$5,025
Distributions reinvested	809	6,753	—	—
Repurchased	(3,947)	(30,867)	(4,411)	(29,927)
Net increase (decrease)	17,199	$181,156	(3,740)	($24,902)
Class R1 shares
Sold	15,442	$154,310	—	—
Distributions reinvested	362	3,018	—	—
Repurchased	(4,772)	(42,791)	—	—
Net increase	11,032	$114,537	—	—
Net increase	705,045	$7,084,760	648,908	$4,379,594

¹Semiannual period from 3-1-08 to 8-31-08. Unaudited.

Note 6
Purchase and sale 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 period ended August 31, 2008, aggregated $5,330,916 and $1,086,377, respectively.

28  Classic Value Mega Cap Fund | Semiannual report 

Board Consideration of and
Continuation of Investment Advisory
Agreement and Subadvisory
Agreement: John Hancock
Classic Value Mega Cap Fund

The Investment Company Act of 1940 (the 1940 Act) requires the Board of Trustees (the Board) of John Hancock Capital Series (the Trust), including a majority of the Trustees who have no direct or indirect interest in the investment advisory agreement and are not “interested persons” of the Trust, as defined in the 1940 Act (the Independent Trustees), annually to meet in person to review and consider the continuation of: (i) the investment advisory agreement (the Advisory Agreement) with John Hancock Investment Management Services, LLC (the Adviser) and (ii) the investment subadvisory agreement (the Subadvisory Agreement) with Pzena Investment Management, LLC (the Subadviser) for the John Hancock Classic Value Mega Cap Fund (the Fund). The Advisory Agreement and the Subadvisory Agreement are collectively referred to as the Advisory Agreements.

At meetings held on May 5–6 and June 9–10, 2008, the Board considered the factors and reached the conclusions described below relating to the selection of the Adviser and Subadviser and the continuation of the Advisory Agreements. During such meetings, the Board’s Contracts/Operations Committee and the Independent Trustees also met in executive sessions with their independent legal counsel.

In evaluating the Advisory Agreements, the Board, including the Contracts/Operations Committee and its Independent Trustees, reviewed a broad range of information requested for this purpose. This information included:

(i) the Adviser’s financial results and condition, including its and certain of its affiliates’ profitability from services performed for the Fund;

(ii) the Adviser’s and Subadviser’s record of compliance with applicable laws and regulations, with the Fund’s investment policies and restrictions, and with the applicable Code of Ethics, and the structure and responsibilities of the Adviser’s and Subadviser’s compliance department;

(iii) the background and experience of senior management and investment professionals; and

(iv) the nature, cost and character of advisory and non-investment management services provided by the Adviser and its affiliates and by the Subadviser.

The Board noted that the Fund had less than one year of operations. Due to the Fund’s short operational history, the Board did not obtain an analysis comparing the Fund’s investment performance, advisory and other fees and expense ratios to a peer group or category of comparative funds from Morningstar, Inc. (Morningstar), an independent provider of investment company data.

The Independent Trustees considered the legal advice of independent legal counsel and relied on their own business judgment in determining the factors to be considered in evaluating the materials that were presented to them and the weight to be given to each such factor. The Board’s review and conclusions were based on a comprehensive consideration of all information presented to the Board and not the result of any single controlling factor. The Board considered performance information provided to it by the Adviser or Subadviser at its May and June 2008 meetings. Performance and other information may be quite different as of the date of this shareholders’ report. The key factors considered by the Board and the conclusions reached are described below.

Nature, extent and quality of services

The Board considered the ability of the Adviser and the Subadviser, based on their resources, reputation and other attributes, to attract and retain qualified investment professionals, including research, advisory, and supervisory personnel. The Board considered the investment philosophy, research and investment decision-making processes of the Adviser, Subadviser and representatives of the Subadviser that are responsible for the daily investment activities of the Fund. The Board considered the representatives’ history and

Semiannual report | Classic Value Mega Cap Fund  29 

experience with the Fund. The Board considered the Adviser’s execution of its oversight responsibilities. The Board further considered the culture of compliance, resources dedicated to compliance, compliance programs and compliance records of the Adviser and Subadviser. In addition, the Board took into account the administrative and other non-advisory services provided to the Fund by the Adviser and its affiliates.

Based on the above factors, together with those referenced below, the Board concluded that, within the context of its full deliberations, the nature, extent and quality of the investment advisory services provided to the Fund by the Adviser and Subadviser supported renewal of the Advisory Agreements.

Fund performance

The Board noted that the Fund had less than one full year of operational history, and considered the performance results for the Fund presented by the Adviser as of April 30 and May 31, 2008. The Board also considered these results in comparison to the performance of the benchmark index. The Board noted that the Fund’s performance was lower than the performance of its benchmark index, the Russell 1000 Value Index, for the periods under review. The Board recognized the short operational history of the Fund and indicated its intent to continue to monitor the Fund’s performance trends.

Investment advisory fee and subadvisory fee rates and expenses

The Board reviewed and considered the contractual investment advisory fee rate payable by the Fund to the Adviser for investment advisory services (the Advisory Agreement Rate). The Board did not obtain information comparing the Advisory Agreement Rate, other fees or expense ratios with other comparative fees and expenses of a peer group or category of funds at its May and June 2008 meetings. However, the Board obtained and considered comparative fee data based on funds in a respective Morningstar category prior to the initial approval of the Advisory Agreement. The Board concluded that the Advisory Agreement Rate was not unreasonable.

The Board also obtained information about the investment subadvisory fee rate (the Subadvisory Agreement Rate) payable by the Adviser to the Subadviser for investment subadvisory services. The Board concluded that the Subadvisory Agreement Rate was not unreasonable.

Profitability

The Board received and considered a detailed profitability analysis of the Adviser based on the Advisory Agreements, as well as on other relationships between the Fund and the Adviser and its affiliates. The Board also considered a comparison of the Adviser’s profitability to that of other similar investment advisers whose profitability information is publicly available. The Board concluded that, in light of the costs of providing investment management and other services to the Fund, the profits and other ancillary benefits reported by the Adviser were not unreasonable.

The Board did not consider profitability information with respect to the Subadviser, which is not affiliated with the Adviser. The Board considered that the Subadvisory Agreement Rate paid to the Subadviser had been negotiated by the Adviser on an arm’s length basis and that the Subadviser’s separate profitability from its relationship with the Fund was not a material factor in determining whether to renew the agreement.

Economies of scale

The Board received and considered general information regarding economies of scale with respect to the management of the Fund, including the Fund’s ability to appropriately benefit from economies of scale under the Fund’s fee structure. The Board recognized the inherent limitations of any analysis of economies of scale, stemming largely from the Board’s understanding that most of the Adviser’s costs are not specific to individual Funds, but rather are incurred across a variety of products and services.

To the extent the Board and the Adviser were able to identify actual or potential economies of scale from Fund-specific or allocated expenses, in order to ensure that any such economies continue to be reasonably shared with the Fund as its assets increase, the Adviser

30  Classic Value Mega Cap Fund | Semiannual report 

and the Board agreed to continue the existing breakpoints to the Advisory Agreement Rate.

Information about services to other clients

The Board also received information about the nature, extent and quality of services and fee rates offered by the Adviser and Subadviser to their other clients, including other registered investment companies, institutional investors and separate accounts. The Board concluded that the Advisory Agreement Rate and the Subadvisory Agreement Rate were not unreasonable, taking into account fee rates offered to others by the Adviser and Subadviser, respectively, after giving effect to differences in services.

Other benefits to the Adviser

The Board received information regarding potential “fall-out” or ancillary benefits received by the Adviser and its affiliates and the Subadviser as a result of their relationship with the Fund. Such benefits could include, among others, benefits directly attributable to the relationship of the Adviser and Subadviser with the Fund and benefits potentially derived from an increase in business of the Adviser and Subadviser as a result of their relationship with the Fund (such as the ability to market to shareholders other financial products offered by the Adviser and its affiliates).

The Board also considered the effectiveness of the Adviser’s, Subadviser’s and Fund’s policies and procedures for complying with the requirements of the federal securities laws, including those relating to best execution of portfolio transactions and brokerage allocation.

Other factors and broader review

As discussed above, the Board reviewed detailed materials received from the Adviser and Subadviser as part of the annual re-approval process. The Board also regularly reviews and assesses the quality of the services that the Fund receives throughout the year. In this regard, the Board reviews reports of the Adviser at least quarterly, which include, among other things, fund performance reports and compliance reports. In addition, the Board meets with portfolio managers and senior investment officers at various times throughout the year.

After considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Board concluded that approval of the continuation of the Advisory Agreements for the Fund was in the best interest of the Fund and its shareholders. Accordingly, the Board unanimously approved the continuation of the Advisory Agreements.

Semiannual report | Classic Value Mega Cap Fund  31 

More information

Trustees	Investment adviser
James F. Carlin, Chairman	John Hancock Investment Management
James R. Boyle†	Services, LLC
William H. Cunningham
Deborah C. Jackson	Subadviser
Charles L. Ladner*	Pzena Investment Management, LLC
Stanley Martin*
Dr. John A. Moore*	Principal distributor
Patti McGill Peterson*	John Hancock Funds, LLC
Steven R. Pruchansky
Gregory A. Russo*	Custodian
*Members of the Audit Committee	State Street Bank & Trust Company
†Non-Independent Trustee
	Transfer agent
Officers	John Hancock Signature Services, Inc.
Keith F. Hartstein
President and Chief Executive Officer	Legal counsel
	K&L Gates LLP
Thomas M. Kinzler
Secretary and Chief Legal Officer
Francis V. Knox, Jr.
Chief Compliance Officer
Charles A. Rizzo
Chief Financial Officer
Gordon M. Shone
Treasurer
John G. Vrysen
Chief Operating Officer

Additional information about your fund is available without charge in several ways. As required by the SEC, you can access proxy voting information and quarterly portfolio information on your fund. The proxy voting information includes a description of proxy voting policies, procedures and information regarding how the fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30. The quarterly portfolio information that includes a complete list of the fund’s holdings for the first and third quarters of the fund’s fiscal period is filed on Form N-Q. You have access to this information:

By phone	On the fund’s Website	At the SEC
1-800-225-5291	www.jhfunds.com	www.sec.gov
		1-800-SEC-0330
		SEC Public Reference Room
You can also contact us:
Regular mail	Express mail
John Hancock Signature Services, Inc.	John Hancock Signature Services, Inc.
P.O. Box 9510	Mutual Fund Image Operations
Portsmouth, NH 03802-9510	164 Corporate Drive
	Portsmouth, NH 03801

Month-end portfolio holdings are available at www.jhfunds.com.

32  Classic Value Mega Cap Fund | Semiannual report 

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 Classic Value Mega Cap Fund.	322SA 8/08
It is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus.	10/08

ITEM 2. CODE OF ETHICS.

Not applicable at this time.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

Not applicable at this time.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Not applicable at this time.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

Not applicable at this time.

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 time periods specified in the rules and forms of the Securities and Exchange

Commission. Such disclosure 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)(i) CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER.

(a)(1)(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: October 30, 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: October 30, 2008

By: /s/ Charles A. Rizzo
-------------------------------------
Charles A. Rizzo
Chief Financial Officer

Date: October 30, 2008