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SEMI ANNUAL REPORT
John Hancock
Global Fund
APRIL 30, 2003
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John Hancock Global Fund
Schedule of Investments
April 30, 2003
(unaudited)
ISSUER SHARES VALUE
- ------ ------ -----
COMMON STOCKS
(Cost $29,844,451)
Australia (1.74%)
Australia & New Zealand Banking Group Ltd. (Banks - Foreign) 38,400 $ 447,995
Woolworths Ltd. (Retail) 37,900 306,312
--------------
754,307
--------------
Canada (4.15%)
Biovail Corp.* (Medical) 5,500 198,825
Cott Corp.* (Beverages) 18,200 333,970
EnCana Corp. (Oil & Gas) 6,300 207,270
Royal Bank of Canada (Banks - Foreign) 11,000 459,250
Telus Corp. (Telecommunications) 29,600 431,228
WestJet Airlines Ltd.* (Transport) 14,950 171,947
--------------
1,802,490
--------------
China (0.39%)
Jiangsu Expressway Co., Ltd. (Transport) 500,000 168,290
--------------
France (4.86%)
Alcatel SA* (Telecommunications) 46,100 377,624
Axa SA (Insurance) 25,000 379,718
BNP Paribas SA (Banks - Foreign) 10,800 506,939
France Telecom SA (Telecommunications) 12,800 295,695
JC Decaux SA* (Advertising) 30,000 289,601
Vivendi Universal SA (Media) 15,800 257,438
--------------
2,107,015
--------------
Germany (1.42%)
BASF AG (Chemicals) 6,000 265,496
Muenchener Rueckversicherungs-Gesellschaft AG (Insurance) 3,500 348,414
--------------
613,910
--------------
Hong Kong (0.76%)
CNOOC Ltd. (Oil & Gas) 250,000 328,566
--------------
Ireland (2.10%)
Bank of Ireland (Banks - Foreign) 39,600 483,919
Ryanair Holdings Plc* American Depositary Receipts (ADR) (Transport) 10,800 428,436
--------------
912,355
--------------
Israel (0.97%)
Teva Pharmaceutical Industries Ltd. (ADR) (Medical) 9,000 420,300
--------------
Japan (4.03%)
Dai Nippon Printing Co., Ltd. (Printing - Commercial) 41,000 398,105
Fanuc Ltd. (Electronics) 10,000 409,190
Japan Telecom Holdings Co., Ltd. (Telecommunications) 100 273,352
Kao Corp. (Cosmetics & Personal Care) 18,000 328,274
Mitsubishi Tokyo Financial Group, Inc. (Banks - Foreign) 100 338,756
--------------
1,747,677
--------------
Netherlands (1.16%)
Aegon NV (Insurance) 23,400 237,901
ING Groep NV (Insurance) 16,300 264,675
--------------
502,576
--------------
See notes to financial statements.
1
ISSUER SHARES VALUE
- ------ ------ -----
Russia (1.21%)
YUKOS (ADR) (Oil & Gas) 3,000 $ 526,500
--------------
South Korea (1.66%)
LG Electronics, Inc. (Electronics) 10,000 344,856
Samsung Electronics Co., Ltd. (Electronics) 1,500 376,543
--------------
721,399
--------------
Sweden (0.52%)
Hennes & Mauritz AB (B Shares) (Retail) 10,150 225,840
--------------
Switzerland (3.30%)
Alcon, Inc.* (Medical) 9,200 405,260
Roche Holding AG (Medical) 3,600 229,064
UBS AG (Banks - Foreign) 16,800 797,080
--------------
1,431,404
--------------
Taiwan (0.86%)
Nanya Technology Corp.* (Electronics) 365,000 198,994
Taiwan Semiconductor Manufacturing Co., Ltd.* (ADR) (Electronics) 21,000 175,770
--------------
374,764
--------------
United Kingdom (9.34%)
British Sky Broadcasting Group Plc* (Media) 55,900 579,388
GlaxoSmithKline Plc (Medical) 18,900 378,797
HBOS Plc (Banks - Foreign) 22,200 260,079
Imperial Tobacco Group Plc (Tobacco) 17,800 297,862
Lloyds TSB Group Plc (ADR) (Banks - Foreign) 10,000 266,400
Lloyds TSB Group Plc (Banks - Foreign) 16,500 108,518
Man Group Plc (Finance) 22,700 382,760
Royal Bank of Scotland Group Plc (Banks - Foreign) 24,905 653,195
Shell Transport & Trading Co. Plc (Oil & Gas) 32,600 195,257
Smith & Nephew Plc (Medical) 34,200 228,071
Vodafone Group Plc (ADR) (Telecommunications) 35,500 701,480
--------------
4,051,807
--------------
United States (34.52%)
Adobe Systems, Inc. (Computers) 8,500 293,760
AdvancePCS* (Medical) 4,500 135,270
Affiliated Computer Services, Inc.* (Computers) 3,000 143,100
Allergan, Inc. (Medical) 1,500 105,375
Allstate Corp. (The) (Insurance) 3,300 124,707
Amdocs Ltd.* (Telecommunications) 34,300 605,738
Amgen, Inc.* (Medical) 10,400 637,624
Anadarko Petroleum Corp. (Oil & Gas) 1,900 84,360
Anheuser-Busch Cos., Inc. (Beverages) 3,100 154,628
Anthem, Inc.* (Medical) 2,500 171,600
Apache Corp. (Oil & Gas) 3,410 195,223
Apollo Group, Inc. (Class A)* (Schools / Education) 11,200 607,029
Applied Materials, Inc.* (Electronics) 21,600 315,360
AutoZone, Inc.* (Retail) 1,500 121,215
Bank of America Corp. (Banks - United States) 6,100 451,705
Barr Laboratories, Inc.* (Medical) 7,300 405,880
Comcast Corp. (Special Class A)* (Media) 17,100 514,026
Dell Computer Corp.* (Computers) 15,500 448,105
eBay, Inc.* (Diversified Operations) 3,200 296,864
EchoStar Communicaitons Corp. (Class A)* (Media) 2,800 83,888
EMC Corp.* (Computers) 10,700 97,263
Fannie Mae (Mortgage Banking) 2,800 202,692
General Electric Co. (Diversified Operations) 40,800 1,201,560
Gilead Sciences, Inc.* (Medical) 14,800 682,872
Intel Corp. (Electronics) 12,100 222,640
International Business Machines Corp. (Computers) 7,400 628,260
See notes to financial statements.
2
ISSUER SHARES VALUE
- ------ ------ -----
United States (continued)
Johnson & Johnson (Medical) 16,500 $ 929,940
Lowe's Cos., Inc. (Retail) 10,300 452,067
Merck & Co., Inc. (Medical) 12,600 733,068
Microsoft Corp. (Computers) 40,600 1,038,142
Noble Corp.* (Oil & Gas) 4,700 145,465
Patterson-UTI Energy, Inc.* (Oil & Gas) 2,700 89,343
Pfizer, Inc. (Medical) 29,700 913,275
Procter & Gamble Co. (The) (Cosmetics & Personal Care) 2,300 206,655
Tribune Co. (Media) 2,200 107,756
Univision Communications, Inc. (Class A)* (Media) 2,800 84,784
VERITAS Software Corp.* (Computers) 21,500 473,215
Wal-Mart Stores, Inc. (Retail) 9,400 529,408
Williams Cos., Inc. (The) (Oil & Gas) 12,400 86,180
Zimmer Holdings, Inc.* (Medical) 5,500 257,950
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14,977,992
--------------
TOTAL COMMON STOCKS (72.99%) 31,667,192
--------------
SHARES,
ISSUER OR WARRANTS VALUE
- ------ ----------- -----
RIGHTS AND WARRANTS
(Cost $361,372)
Netherlands (0.02%)
Aegon NV* (Insurance), Right 23,400 9,516
--------------
Taiwan (0.36%)
Taiwan Semiconductor Manufacturing Co., Ltd.* (Electronics), Warrant 113,800 156,087
United Kingdom (0.33%)
United Microelectronics Corp.* (Electronics), Warrant 251,000 144,046
--------------
TOTAL RIGHTS AND WARRANTS (0.71%) 309,649
--------------
INTEREST PAR VALUE
ISSUER, DESCRIPTION, MATURITY DATE RATE (000'S OMITTED) VALUE
- ---------------------------------- ---- --------------- -----
SHORT-TERM INVESTMENTS
(Cost $1,922,000)
Joint Repurchase Agreement (4.43%)
Investment in a joint repurchase agreement
transaction with State Street Bank & Trust Co.-
Dated 04-30-03, due 05-01-03 (Secured by U.S. Treasury
Inflation Indexed Bond 3.875% due 04-15-29, U.S. Treasury
Inflation Indexed Notes 3.375% due 01-15-07 and 3.000% due 07-15-12) 1.28% $1,922 1,922,000
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TOTAL SHORT-TERM INVESTMENTS (4.43%) 1,922,000
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TOTAL INVESTMENTS (78.13%) 33,898,841
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OTHER ASSETS AND LIABILITIES, NET (21.87%) 9,486,057
----------------
TOTAL NET ASSETS (100%) $ 43,384,898
================
* Non-income producing security.
The percentage shown for each investment category is the total value of that
category as a percentage of the net assets of the Fund.
See notes to financial statements.
3
Portfolio Concentration
(unaudited)
This table shows the percentages of the Fund's investments aggregated by various
industries as of April 30, 2003.
VALUE
AS A PERCENTAGE
INVESTMENT CATEGORIES OF NET ASSETS
- --------------------- ---------------
Advertising 0.67%
Banks - Foreign 9.96
Banks - United States 1.04
Beverages 1.13
Chemicals 0.61
Computers 7.19
Cosmetics & Personal Care 1.23
Diversified Operations 3.45
Electronics 5.40
Finance 0.88
Insurance 3.15
Media 3.75
Medical 15.75
Mortgage Banking 0.47
Oil & Gas 4.28
Printing - Commercial 0.92
Retail 3.77
Schools/Education 1.40
Telecommunications 6.19
Tobacco 0.69
Transport 1.77
Short-term investments 4.43
------
Total Investments 78.13%
======
See notes to financial statements.
4
John Hancock Global Fund
ASSETS AND ASSETS
LIABILITIES Investments at value (cost - $ 32,127,823 ) $ 33,898,841
April 30, 2003 Cash 480
Unaudited Foreign cash at value (cost - $ 4,074 ) 4,074
Receivable for investments sold 15,238,650
Receivable for shares sold 300
Dividends and interest receivable 123,054
Other assets 10,562
Total assets 49,275,961
LIABILITIES
Payable for investments purchased 5,739,651
Payable for shares repurchased 17,393
Payable to affiliates 91,731
Other payables and accrued expenses 42,288
Total liabilities 5,891,063
NET ASSETS
Capital paid-in 96,296,247
Accumulated net realized loss on investments and
foreign currency transactions (54,369,606)
Net unrealized appreciation of investments and
translation of assets and liabilities in foreign currencies 1,766,477
Accumulated net investment loss (308,220)
Net assets $43,384,898
NET ASSET VALUE PER SHARE
Based on net asset values and shares outstanding
Class A ($33,756,308 / 5,332,273 shares) $6.33
Class B ( $9,000,253 / 1,597,873 shares) $5.63
Class C ( $628,337 / 111,527 shares) $5.63
MAXIMUM OFFERING PRICE PER SHARE
Class A(1) ( $6.33 / 95%) $6.66
Class C ( $5.63 / 99%) $5.69
(1) 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.
5
John Hancock Global Fund
OPERATIONS INVESTMENT INCOME
For the period ended Dividends (net of foreign withholding taxes of $25,013) $ 293,633
April 30, 2003 Interest 4,966
Unaudited.(1) Total investment income 298,599
EXPENSES
Investment management fee 204,030
Class A distribution and service fee 52,741
Class B distribution and service fee 47,640
Class C distribution and service fee 3,258
Transfer agent fee 225,491
Printing 22,632
Custodian fee 15,502
Registration and filing fee 10,046
Accounting and legal services fee 9,783
Auditing fee 2,560
Trustees' fee 2,555
Miscellaneous 2,233
Interest expense 1,662
Legal fee 660
Total expenses 600,793
Net investment loss (302,194)
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized loss on
Investments (3,377,459)
Foreign currency transactions (27,579)
Change in net unrealized appreciation (depreciation) of
Investments 1,506,752
Translation of assets and liabilties in foreign currencies (3,903)
Net realized and unrealized loss (1,902,189)
Decrease in net assets from operations ($2,204,383)
(1) Semiannual period from 11-1-02 through 4-30-03.
See notes to financial statements.
6
John Hancock Global Fund
YEAR ENDED PERIOD ENDED
10-31-02 4-30-03(1)
CHANGES IN INCREASE (DECREASE) IN NET ASSETS
NET ASSETS From operations
Net investment loss ($951,314) ($302,194)
Net realized loss (10,161,375) (3,405,038)
Change in net unrealized appreciation (depreciation) 2,769,567 1,502,849
Decrease in net assets resulting from operations (8,343,122) (2,204,383)
From Fund share transactions (10,750,858) (4,806,714)
NET ASSETS
Beginning of period 69,489,975.00 50,395,995
End of period(2) $50,395,995 $43,384,898
(1) Semiannual period from 11-1-02 through 4-30-03. Unaudited.
(2) Includes accumulated net investment loss of $6,026 and
$308,220, respectively.
See notes to financial statements.
7
John Hancock Global Fund
Financial Highlights
CLASS A
PERIOD ENDED 10-31-98 10-31-99 10-31-00 10-31-01 10-31-02 4-30-03(1)
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $12.94 $13.46 $15.24 $13.64 $7.71 $6.60
Net investment loss(2) (0.05) (0.03) (0.08) (0.11) (0.10) (0.04)
Net realized and unrealized gain (loss) on investments 1.53 2.67 (0.91) (5.82) (1.01) (0.23)
Total from investment operations 1.48 2.64 (0.99) (5.93) (1.11) (0.27)
Less distributions
>From net realized gain (0.96) (0.86) (0.61) -- -- --
Net asset value, end of period $13.46 $15.24 $13.64 $7.71 $6.60 $6.33
Total return(3)(%) 11.88 20.90 (6.90) (43.48) (14.40) (4.09)(4)
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in millions) $121 $128 $105 $51 $39 $34
Ratio of expenses to average net assets (%) 1.82 1.78 1.87 2.14 2.35 2.49(5)
Ratio of net investment loss to average net assets (%) (0.33) (0.23) (0.52) (1.01) (1.31) (1.18)(5)
Portfolio turnover (%) 160 176 182 297 264 125
See notes to financial statements.
8
John Hancock Global Fund
Financial Highlights
CLASS B
PERIOD ENDED 10-31-98 10-31-99 10-31-00 10-31-01 10-31-02 4-30-03(1)
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $12.39 $12.76 $14.30 $12.67 $6.93 $5.90
Net investment loss(2) (0.13) (0.11) (0.18) (0.17) (0.14) (0.05)
Net realized and unrealized gain (loss) on investments 1.46 2.51 (0.84) (5.57) (0.89) (0.22)
Total from investment operations 1.33 2.40 (1.02) (5.74) (1.03) (0.27)
Less distributions
>From net realized gain (0.96) (0.86) (0.61) -- -- --
Net asset value, end of period $12.76 $14.30 $12.67 $6.93 $5.90 $5.63
Total return(3)(%) 11.15 20.12 (7.60) (45.30) (14.86) (4.58)(4)
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in millions) $55 $54 $41 $17 $11 $9
Ratio of expenses to average net assets (%) 2.46 2.37 2.57 2.84 3.05 3.19(5)
Ratio of net investment loss to average net assets (%) (0.97) (0.82) (1.25) (1.72) (2.01) (1.87)(5)
Portfolio turnover (%) 160 176 182 297 264 125
See notes to financial statements.
9
John Hancock Global Fund
Financial Highlights
CLASS C
PERIOD ENDED 10-31-99(6) 10-31-00 10-31-01 10-31-02 4-30-03(1)
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $12.88 $14.30 $12.67 $6.93 $5.90
Net investment loss(2) (0.10) (0.15) (0.17) (0.14) (0.05)
Net realized and unrealized gain (loss) on investments 1.52 (0.87) (5.57) (0.89) (0.22)
Total from investment operations 1.42 (1.02) (5.74) (1.03) (0.27)
Less distributions
>From net realized gain -- (0.61) -- -- --
Net asset value, end of period $14.30 $12.67 $6.93 $5.90 $5.63
Total return(3)(%) 11.02(4) (7.60) (45.30) (14.86) (4.58)(4)
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in millions) --(7) $1 $1 $1 $1
Ratio of expenses to average net assets (%) 2.48(5) 2.57 2.84 3.05 3.19(5)
Ratio of net investment loss to average net assets (%) (1.01)(5) (1.06) (1.72) (2.01) (1.86)(5)
Portfolio turnover (%) 176 182 297 264 125
(1) Semiannual period from 11-1-02 through 4-30-03. Unaudited.
(2) Based on the average of the shares outstanding.
(3) Assumes dividend reinvestment and does not reflect the effect of sales
charges.
(4) Not annualized.
(5) Annualized.
(6) Class C shares began operations on 3-1-99.
(7) Less than $500,000.
See notes to financial statements.
10
NOTES TO FINANCIAL STATEMENTS
Unaudited.
NOTE A
Accounting policies
John Hancock Global Fund (the "Fund") is a diversified series of John Hancock
Investment Trust III, an open-end management investment company registered under
the Investment Company Act of 1940. The investment objective of the Fund is to
achieve long-term growth of capital.
The Trustees have authorized the issuance of multiple classes of shares of the
Fund, designated as Class A, Class B and Class C shares. 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 Trustees, may be applied
differently 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 bears distribution and service expenses under terms
of a distribution plan have exclusive voting rights to that distribution plan.
Significant accounting policies of the Fund are as follows:
Valuation of investments
Securities in the Fund's portfolio are valued on the basis of market quotations,
valuations provided by independent pricing services or, if quotations are not
readily available, or the value has been materially affected by events occurring
after the closing of a foreign market, at fair value as determined in good faith
in accordance with procedures approved by the Trustees. Short-term debt
investments maturing within 60 days are valued at amortized cost, which
approximates market value. All portfolio transactions initially expressed in
terms of foreign currencies have been translated into U.S. dollars as described
in "Foreign currency translation" below.
Joint repurchase agreement
Pursuant to an exemptive order issued by the Securities and Exchange Commission,
the Fund, along with other registered investment companies having a management
contract with John Hancock Advisers, LLC (the "Adviser"), a wholly owned
subsidiary of The Berkeley Financial Group, LLC, may participate in a joint
repurchase agreement transaction. Aggregate cash balances are invested in one or
more large repurchase agreements, whose underlying securities are obligations of
the U.S. government and/or its agencies. The Fund's custodian bank receives
delivery of the underlying securities for the joint account on the Fund's
behalf. The Adviser is responsible for ensuring that the agreement is fully
collateralized at all times.
Foreign currency translation
All assets or liabilities initially expressed in terms of foreign currencies are
translated into U.S. dollars based on London currency exchange quotations as of
5:00 p.m., London time, on the date of any determination of the net asset value
of the Fund. Transactions affecting statement of operations accounts and net
realized gain (loss) on investments are translated at the rates prevailing at
the dates of the transactions.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from sales of
foreign currency, currency gains or losses realized between the trade and
settlement dates on securities transactions and the difference between the
amounts of dividends, interest and foreign
11
withholding taxes recorded on the Fund's books and the U.S. dollar equivalent of
the amounts actually received or paid. Net unrealized foreign exchange gains and
losses arise from changes in the value of assets and liabilities, other than
investments in securities, resulting from changes in the exchange rates.
Investment transactions
Investment transactions are recorded as of the date of purchase, sale or
maturity. Net realized gains and losses on sales of investments are determined
on the identified cost basis. Capital gains realized on some foreign securities
are subject to foreign taxes, which are accrued as applicable.
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 assets of the respective classes.
Distribution and service fees, if any, are calculated daily at the class level
based on the appropriate net assets of each class and the specific expense
rate(s) applicable to each class.
Expenses
The majority of the expenses are directly identifiable to an individual fund.
Expenses that are not readily identifiable to a specific fund will be allocated
in such a manner as deemed equitable, taking into consideration, among other
things, the nature and type of expense and the relative sizes of the funds.
Bank borrowings
The Fund is permitted to have bank borrowings for temporary or emergency
purposes, including the meeting of redemption requests that otherwise might
require the untimely disposition of securities. The Fund has entered into a
syndicated line of credit agreement with various banks. This agreement enables
the Fund to participate with other funds managed by the Adviser in an unsecured
line of credit with banks, which permits borrowings of up to $250 million,
collectively. Interest is charged to each fund, based on its borrowing. In
addition, a commitment fee is charged to each fund based on the average daily
unused portion of the line of credit and is allocated among the participating
funds. The Fund had no borrowing activity under the line of credit during the
period ended April 30, 2003.
Forward foreign currency exchange contracts
The Fund may enter into forward foreign currency exchange contracts as a hedge
against the effect of fluctuations in currency exchange rates. A forward foreign
currency exchange contract involves an obligation to purchase or sell a specific
currency at a future date at a set price. The aggregate principal amounts of the
contracts are marked to market daily at the applicable foreign currency exchange
rates. Any resulting unrealized gains and losses are included in the
determination of the Fund's daily net assets. The Fund records realized gains
and losses at the time the forward foreign currency exchange contracts are
closed out. Risks may arise upon entering these contracts from the potential
inability of counterparties to meet the terms of the contracts and from
unanticipated movements in the value of a foreign currency relative to the U.S.
dollar. These contracts involve market or credit risk in excess of the
unrealized gain or loss reflected in the Fund's statement of assets and
liabilities.
The Fund may also purchase and sell forward contracts to facilitate the
settlement of foreign currency denominated portfolio transactions, under which
it intends to take delivery of the foreign currency. Such contracts normally
involve no market risk if they are offset by the currency amount of the
underlying transactions. The Fund had no open forward foreign currency exchange
contracts on April 30, 2003.
12
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 has $50,475,789 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: October
31, 2009 - $39,619,964 and October 31, 2010 - $10,855,825.
Dividends, interest and distributions
Dividend income on investment securities is recorded on the ex-dividend date or,
in the case of some foreign securities, on the date thereafter when the Fund
identifies the dividend. Interest income on investment securities is recorded on
the accrual basis. Foreign income may be subject to foreign withholding taxes,
which are accrued as applicable.
The Fund records distributions to shareholders from net investment income and
net realized gains on the ex-dividend date. 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.
Use of estimates
The preparation of these financial statements, in accordance with accounting
principles generally accepted in the United States of America, incorporates
estimates made by management in determining the reported amount of assets,
liabilities, revenues and expenses of the Fund. Actual results could differ from
these estimates.
NOTE B
Management fee and transactions
with affiliates and others
The Fund has an investment management contract with the Adviser. Under the
investment management contract, the Fund pays a monthly management fee to the
Adviser equivalent, on an annual basis, to the sum of: (a) 0.90% of the first
$100,000,000 of the Fund's average daily net asset value, (b) 0.80% of the next
$200,000,000, (c) 0.75% of the next $200,000,000 and (d) 0.625% of the Fund's
average daily net asset value in excess of $500,000,000. The Adviser has a
subadvisory agreement with Nicholas-Applegate Capital Management LP. The Fund is
not responsible for the payment of the subadviser's fees.
The Fund has Distribution Plans with John Hancock Funds, LLC ("JH Funds"), a
wholly owned subsidiary of the Adviser. The Fund has adopted Distribution Plans
with respect to Class A, Class B and Class C pursuant to Rule 12b-1 under the
Investment Company Act of 1940 to reimburse JH Funds for the services it
provides as distributor of shares of the Fund. Accordingly, the Fund makes
monthly payments to JH Funds at an annual rate not to exceed 0.30% of Class A
average daily net assets and 1.00% of Class B and Class C average daily net
assets. A maximum of 0.25% of such payments may be service fees as defined by
the Conduct Rules of 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.
Class A and Class C shares are assessed up-front sales charges. During the
period ended April 30, 2003, JH Funds received net up-front sales charges of
$14,958 with regard to sales of Class A shares. Of this amount, $1,631 was
retained and used for printing prospectuses, advertising, sales literature and
other purposes, $7,261 was paid as sales commissions to unrelated broker-
13
dealers and $6,066 was paid as sales commissions to sales personnel of Signator
Investors, Inc. ("Signator Investors"), a related broker-dealer. The Adviser's
indirect parent, John Hancock Life Insurance Company ("JHLICo"), is the indirect
sole shareholder of Signator Investors. During the period ended April 30, 2003,
JH Funds received net up-front sales charges of $1,395 with regard to sales of
Class C shares. Of this amount, $1,358 was paid as sales commissions to
unrelated broker-dealers and $37 was paid as sales commissions to sales
personnel of Signator Investors.
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
JH Funds 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 April 30, 2003, CDSCs received by JH
Funds amounted to $15,582 for Class B shares and $129 for Class C shares.
The Fund has a transfer agent agreement with John Hancock Signature Services,
Inc., an indirect subsidiary of JHLICo. The Fund pays a monthly transfer agent
fee at an annual rate of 0.05% of the average daily net asset value, plus a fee
based on the number of shareholder accounts and reimbursement for certain
out-of-pocket expenses.
The Fund has an agreement with the Adviser to perform necessary tax, accounting
and legal services for the Fund. The compensation for the period was at an
annual rate of approximately 0.04% of the average net assets of the Fund.
Ms. Maureen R. Ford and Mr. John M. DeCiccio are directors and/or officers of
the Adviser and/or its affiliates, as well as Trustees of the Fund. The
compensation of unaffiliated Trustees is borne by the Fund. The unaffiliated
Trustees may elect to defer for tax purposes their receipt of this compensation
under the John Hancock Group of Funds Deferred Compensation Plan. The Fund makes
investments into other John Hancock funds, as applicable, to cover its liability
for the deferred compensation. Investments to cover the Fund's deferred
compensation liability are recorded on the Fund's books as an other asset. The
deferred compensation liability and the related other asset are always equal and
are marked to market on a periodic basis to reflect any income earned by the
investments as well as any unrealized gains or losses. The Deferred Compensation
Plan investments had no impact on the operations of the Fund.
14
Note C
Fund share transactions
This listing illustrates the number of Fund shares sold and repurchased during
the last two periods, along with the corresponding dollar value. The Fund has an
unlimited number of shares authorized with no par value.
YEAR ENDED 10-31-02 PERIOD ENDED 4-30-03(1)
SHARES AMOUNT SHARES AMOUNT
CLASS A SHARES
Sold 1,786,452 $13,544,533 51,002 $303,860
Repurchased (2,543,191) (19,528,993) (638,004) (3,955,188)
Net decrease (756,739) ($5,984,460) (587,002) ($3,651,328)
CLASS B SHARES
Sold 311,157 $2,161,259 121,009 $677,661
Repurchased (1,010,948) (7,061,861) (325,267) (1,813,656)
Net decrease (699,791) ($4,900,602) (204,258) ($1,135,995)
CLASS C SHARES
Sold 78,832 $540,982 37,183 $207,924
Repurchased (64,039) (406,778) (41,061) (227,315)
Net increase (decrease) 14,793 $134,204 (3,878) ($19,391)
NET DECREASE (1,441,737) ($10,750,858) (795,138) ($4,806,714)
(1) Semiannual period from 11-1-02 through 4-30-03. Unaudited.
NOTE D
Investment transactions
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 April 30, 2003, aggregated $54,533,038 and $68,626,849, respectively
The cost of investments owned on April 30, 2003, including short-term
investments, for federal income tax purposes was $32,290,917. Gross unrealized
appreciation and depreciation of investments aggregated $2,620,631 and
$1,012,707, respectively, resulting in net unrealized appreciation of
$1,607,924. The difference between book basis and tax basis net unrealized
appreciation of investments is attributable primarily to the tax deferral of
losses on wash sales.
NOTE E
Proposed reorganization
On November 19, 2002, the Trustees approved the reorganization of John Hancock
European Equity Fund and John Hancock Global Fund into John Hancock
International Fund, subject to the approval by shareholders.
15
John Hancock Global Fund
Trustees
Dennis S. Aronowitz
Richard P. Chapman, Jr.
William J. Cosgrove
John M. DeCiccio
Richard A. Farrell
Maureen R. Ford
William F. Glavin*
Dr. John A. Moore*
Patti McGill Peterson*
John W. Pratt
* Members of the Audit Committee
Officers
William L. Braman
Executive Vice President and
Chief Investment Officer
Richard A. Brown
Senior Vice President and
Chief Financial Officer
Susan S. Newton
Senior Vice President and Secretary
William H. King
Vice President and Treasurer
Thomas H. Connors
Vice President and
Compliance Officer
Investment Adviser
John Hancock Advisers, LLC.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
Principal Distributor
John Hancock Funds, LLC.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
Transfer Agent
John Hancock Signature Services, Inc.
1 John Hancock Way, Suite 1000
Boston, Massachusetts 02217-1000
Legal Counsel
Hale and Dorr
60 State Street
Boston, Massachusetts 02109-1803
John Hancock
Large Cap
Growth
Fund
SEMI
ANNUAL
REPORT
4.30.03
Sign up for electronic delivery at
www.jhancock.com/funds/edelivery
[A 2" x 1" John Hancock (Signature)/John Hancock Funds logo in lower,
center middle of page. A tag line below reads "JOHN HANCOCK FUNDS."]
[A photo of Maureen R. Ford, Chairman and Chief Executive Officer, flush
left next to first paragraph.]
WELCOME
Table of contents
Your fund at a glance
page 1
Managers' report
page 2
A look at performance
page 6
Growth of $10,000
page 7
Fund's investments
page 8
Financial statements
page 12
For your information
page 25
Dear Fellow Shareholders,
After a strong start to 2003, the stock market succumbed to the
pressures of a weak economy, rising oil prices, concerns about corporate
earnings and uncertainties about the war in Iraq. The tide turned in
April, when the war ended and first-quarter corporate earnings came in
better than expected. As a result, the major indexes all gained some
ground year to date through April 30, 2003, with the Dow Jones
Industrial Average returning 2.50%, the Standard & Poor's 500 Index
returning 4.82% and the tech-heavy Nasdaq Composite Index up 9.64%.
Bonds, which have outperformed stocks for the last three years,
continued their upward trend this year, as investors still sought their
relative safety.
After the jarring stock market losses of the last three years, it's a
relief for investors to be reminded that the market is indeed cyclical,
and does eventually move up -- not just down. But while the stock market
has been clawing its way back, the ride has been extremely volatile.
Uncertainty still abounds about the strength of the economy,
geopolitical issues, corporate governance problems, rising unemployment
and the sustainability of corporate earnings growth. And despite rallies
late last year and in April, many investors are still so bruised and
skeptical that they have remained on the sidelines. Even though the
statistics suggest we might be emerging from this long, difficult bear
market, we're not quite ready to call it history.
While no one can predict when this bear market cycle will turn,
investors can take charge of how they maneuver through such uncertain
times. First, take a look at how your portfolio is allocated among
stocks, bonds and cash to make sure it's in the proper balance. Work
with your investment professional, who knows your long-term goals and
can help keep you on the right track, rather than being lured by today's
stars, which could wind up tomorrow's laggards. And as always, keep a
long-term investment horizon. We believe this offers the best way for
you to survive the tough times and reach your investment objectives.
Sincerely,
/S/ MAUREEN R. FORD
Maureen R. Ford,
Chairman and Chief Executive Officer
This commentary reflects the chairman's views as of April 30, 2003. They
are subject to change at any time.
YOUR FUND
AT A GLANCE
The Fund seeks
long-term capital
appreciation
through invest-
ments in large-
capitalization
companies with
above-average
projected earnings
growth.
Over the last six months
* The stock market remained volatile, but moved higher.
* Large-cap growth stocks benefited from overseas exposure as the U.S.
dollar weakened.
* The Fund was positioned to take advantage of an economic recovery.
[Bar chart with heading "John Hancock Large Cap Growth Fund." Under the
heading is a note that reads "Fund performance for the six months ended
April 30, 2003." The chart is scaled in increments of 1% with 0% at the
bottom and 2% at the top. The first bar represents the 1.23% total
return for Class A. The second bar represents the 0.93% total return for
Class B. The third bar represents the 0.93% total return for Class C. A
note below the chart reads "Total returns for the Fund are at net asset
value with all distributions reinvested."]
Top 10 holdings
5.7% General Electric Co.
5.2% Pfizer, Inc.
4.4% Microsoft Corp.
2.8% Johnson & Johnson
2.2% Medtronic, Inc.
2.2% Colgate-Palmolive Co.
2.2% Cisco Systems, Inc.
1.9% EMC Corp.
1.9% Citigroup, Inc.
1.9% Wal-Mart Stores, Inc.
As a percentage of net assets on April 30, 2003.
MANAGERS'
REPORT
BY PAUL J. BERLINGUET, ROBERT J. UEK, CFA, AND THOMAS P. NORTON, CFA,
PORTFOLIO MANAGERS
John Hancock
Large Cap Growth Fund
War with Iraq, tensions in North Korea, the SARS virus and a weak U.S.
economy combined to create unrest in the stock market during the six
months ended April 30, 2003. Skittish investors shifted in and out of
sectors in search of cheap stocks with less downside risk. After making
little headway, stocks finally rebounded in April, fueled by the "de
facto" victory in Iraq, declining oil prices, rising consumer
confidence, improved first-quarter earnings and somewhat encouraging
economic data. The Standard & Poor's 500 Index, a broad measure of stock
market performance, returned 4.47% for the six-month period, with
large-cap, multinational stocks benefiting from the weak U.S. dollar.
PERFORMANCE AND STRATEGY REVIEW
John Hancock Large Cap Growth Fund's Class A, Class B, and Class C
shares returned 1.23%, 0.93% and 0.93%, respectively, at net asset
value, for the six months ended April 30, 2003. These returns were
slightly behind the average large-cap growth fund, which returned 2.77%
over the same period, according to Lipper, Inc.1 The Russell Top 200
Growth Index, which tracks the largest growth stocks, returned 3.33%.
Keep in mind that your net asset value return will be different from the
Fund's if you were not invested in the Fund for the entire period and
did not reinvest all distributions. Long-term performance information
can be found on pages six and seven.
"...stocks finally
rebounded in April..."
The Fund remained diversified across industries, targeting companies
with strong managements, steady cash flows and demonstrated earnings
growth. Performance modestly lagged that of our benchmark, the Russell
Top 200 Growth Index, due to both stock selection and minor variations
in sector weights. Our strict sell discipline -- which involves setting
price targets and then exiting investments that reach those targets --
helped us in a volatile market.
[Photos of Paul Berlinguet, Robert Uek and Thomas Norton flush right
next to first paragraph.]
MORE ECONOMIC SENSITIVITY
Last fall, we started increasing the Fund's exposure to stocks that we
believed would benefit from an economic recovery. We added to
technology, which became our largest sector concentration. After sliding
late last year, tech stocks rebounded in the new year, buoyed by cheap
valuations, extensive cost cutting and a more stable business
environment. Companies with improved efficiencies and operating
leverage, such as Cisco Systems, a leader in networking technology, and
EMC, a leader in the growing field of data storage, were among our top
performers.
We lightened up on financials, moving away from banks and toward more
economically sensitive brokers. Merrill Lynch was a particularly strong
performer, rallying as investors rewarded its cost-cutting efforts.
Offsetting these gains, however, were declines at State Street, the
world's largest back-office processor, and American International Group,
a global insurer that surprised investors with higher-than-expected
claims costs. We reduced our investments in both companies.
"Our strict sell disci-
pline ... helped us in a
volatile market."
HEALTH-CARE GAINS AND LOSSES
In health care, our focus was on health-service companies, generic
pharmaceuticals and medical equipment companies. We mostly avoided big,
branded pharmaceuticals due to concerns over patent expirations. We did,
however, own Merck, whose earnings appeared, in our opinion, to have
bottomed, and Pfizer, which we believe has the potential for cost
savings from its merger with Pharmacia. Merck was one of our better
performers, as was Mylan Laboratories, a generic pharmaceutical company
benefiting as patents expire for many branded drugs.
[Table at top left-hand side of page entitled "Top five industry
groups." The first listing is Medical 20%, the second is Computers 17%,
the third Retail 8%, the fourth Diversified operations 7%, and the fifth
Oil & gas 6%.]
Conversely, Cardinal Health, a drug distributor; Baxter International,
which makes blood products; and HCA, a for-profit hospital company,
posted sharp declines for individual reasons. We sold our stakes in
each, fearing that their problems would linger. We also pared back on
our health-services names, believing these companies could have less
power to raise prices going forward.
[Pie chart at middle of page with heading "Portfolio diversification As
a percentage of net assets on 4-30-03." The chart is divided into two
sections (from top to left): Common stocks 98%, and Short-term
investments & other 2%.]
MIXED RESULTS FOR CONSUMER STOCKS
In the consumer discretionary sector, our focus was on more economically
sensitive media stocks. We trimmed our stake in Viacom, an industry
giant, when it hit our price target, and added to Comcast, a leading
cable provider. Comcast generated strong returns as it integrated AT&T
Broadband and focused on improving its balance sheet and generating
positive free cash flow. We also invested in office supply stores,
including Staples, which benefited from a remodeling program that
boosted sales, and Office Depot, which weakened when its sales numbers
fell below expectations, and we sold it.
[Table at top of page entitled "SCORECARD." The header for the left
column is "INVESTMENT" and the header for the right column is "PERIOD'S
PERFORMANCE...AND WHAT'S BEHIND THE NUMBERS." The first listing is
General Electric followed by an up arrow with the phrase "Cheap
valuation, high dividend yield." The second listing is Johnson & Johnson
followed by a sideways arrow with the phrase "Awaiting approval of new
drug-coated stents." The third listing is American International Group
followed by a down arrow with the phrase "Higher-than-expected claims,
weak equity markets."]
We avoided most apparel retailers and department stores due to our
concerns about competitive positioning and fears that consumer spending
might slow. Our stake in the more defensive consumer staples group was
also light as we found most of these stocks too expensive relative to
expected growth rates. We did, however, add Colgate-Palmolive, a
well-run company with significant overseas exposure and a history of
consistent earnings growth.
"In our view, stock
valuations seem
attractive..."
IMPROVING OUTLOOK
We are encouraged that the economy, although still sluggish, has not
gotten worse. In addition, the war has ended, consumer confidence has
risen and oil prices have declined. Our outlook is for inflation to
remain low and interest rates benign. We think this backdrop bodes well
for the economy and the stock market. High unemployment levels and weak
corporate spending, however, remain concerns.
In our view, stock valuations seem attractive, especially given
valuations for other asset classes, very low interest-rate levels and
the current economic cycle. We are optimistic about large-cap growth
stocks because they are among the higher quality names in the market.
Many are also trading at valuations that are below average and some
offer attractive dividend yields.
This commentary reflects the views of the portfolio managers through the
end of the Fund's period discussed in this report. The managers'
statements reflect their own opinions. As such, they are in no way
guarantees of future events, and are not intended to be used as
investment advice or a recommendation regarding any specific security.
They are also subject to change at any time as market and other
conditions warrant.
1 Figures from Lipper, Inc. include reinvested dividends and do not take
into account sales charges. Actual load-adjusted performance is lower.
A LOOK AT
PERFORMANCE
For the period ended
April 30, 2003
The index used for
comparison is the
Russell Top 200
Growth Index, an
unmanaged index
containing growth-
oriented stocks from
the Russell Top 200
index.
It is not possible to
invest in an index.
Class A Class B Class C Index
Inception date 12-24-68 1-3-94 6-1-98 --
Average annual returns with maximum sales charge (POP)
One year -24.33% -24.87% -22.44% -13.82%
Five years -15.03% -14.99% -- -6.04%
Ten years -0.35% -- -- 8.32%
Since inception -- -2.01% --14.42% --
Cumulative total returns with maximum sales charge (POP)
Six months -3.85% -4.07% -1.12% 3.34%
One year -24.33% -24.87% -22.44% -13.82%
Five years -55.70% -55.61% -- -26.77%
Ten years -3.40% -- -- 122.28%
Since inception -- -17.26% -53.47% --
Performance figures assume all distributions are reinvested. Returns
with maximum sales charge reflect a sales charge on Class A shares of 5%
and Class C shares of 1%, and the applicable contingent deferred sales
charge (CDSC) on Class B and Class C shares. The Class B shares' CDSC
declines annually between years 1-6 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. The return and principal value of an investment in the Fund
will fluctuate, so that shares, when redeemed, may be worth more or less
than the original cost. Index figures do not reflect sales charges and
would be lower if they did.
The returns reflect past results and should not be considered indicative
of future performance. 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.
GROWTH OF
$10,000
This chart shows what happened to a hypothetical $10,000 investment in
Class A shares for the period indicated. For comparison, we've shown the
same investment in the Russell Top 200 Growth Index.
Line chart with the heading "GROWTH OF $10,000." Within the chart are
three lines. The first line represents the Index and is equal to $22,228
as of April 30, 2003. The second line represents the value of the
hypothetical $10,000 investment made in the John Hancock Large Cap
Growth Fund, before sales charge, and is equal to $10,168 as of April
30, 2003. The third line represents the value of the same hypothetical
$10,000 investment made in the John Hancock Large Cap Growth Fund, after
sales charge, and is equal to $9,660 as of April 30, 2003.
Class B 1 Class C 1
Period beginning 1-3-94 6-1-98
Without sales charge $8,274 $4,701
With maximum sales charge -- $4,654
Index $21,067 $7,505
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 and Class C shares, respectively, as of April 30, 2003. 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.
1 No contingent deferred sales charge applicable.
FINANCIAL STATEMENTS
FUND'S
INVESTMENTS
Securities owned
by the Fund on
April 30, 2003
(unaudited)
This schedule is divided into two main categories: common stocks and
short-term investments. Common stocks are further broken down by
industry group. Short-term investments, which represent the Fund's cash
position, are listed last.
SHARES ISSUER VALUE
COMMON STOCKS 98.49% $179,886,791
(Cost $161,837,344)
Advertising 1.46% 2,661,700
43,000 Omnicom Group, Inc. 2,661,700
Banks -- United States 2.93% 5,353,363
27,250 Bank of America Corp. 2,017,863
50,000 State Street Corp. 1,751,500
40,000 TCF Financial Corp. 1,584,000
Beverages 3.43% 6,261,230
50,163 Anheuser-Busch Cos., Inc. 2,502,130
60,000 Coca-Cola Co. (The) 2,424,000
65,000 Pepsi Bottling Group, Inc. (The) 1,335,100
Broker Services 3.83% 7,003,440
34,100 Goldman Sachs Group, Inc. (The) 2,588,190
55,000 Merrill Lynch & Co., Inc. 2,257,750
250,000 Schwab (Charles) Corp. (The) 2,157,500
Business Services -- Misc. 1.02% 1,868,400
60,000 Paychex, Inc. 1,868,400
Computers 17.10% 31,230,434
50,000 Affiliated Computer Services, Inc.*+ 2,385,000
270,000 BEA Systems, Inc.*+ 2,891,700
264,500 Cisco Systems, Inc.* 3,978,080
50,000 Dell Computer Corp.* 1,445,500
30,000 Electronic Arts, Inc.* 1,778,100
390,000 EMC Corp.* 3,545,100
150,000 Hewlett-Packard Co. 2,445,000
35,000 International Business Machines Corp. 2,971,500
312,200 Microsoft Corp. 7,982,954
100,000 Oracle Corp.* 1,188,000
25,000 Yahoo! Inc.* 619,500
Cosmetics & Personal Care 3.72% 6,790,300
20,000 Avon Products, Inc. 1,163,400
70,000 Colgate-Palmolive Co. 4,001,900
50,000 Estee Lauder Cos., Inc. (The) (Class A) 1,625,000
Diversified Operations 7.03% 12,841,729
20,000 3M Co. 2,520,800
350,456 General Electric Co. 10,320,929
Electronics 6.25% 11,424,250
70,000 Analog Devices, Inc.*+ 2,318,400
100,000 Applied Materials, Inc.* 1,460,000
251,000 Flextronics International Ltd. (Singapore)* 2,196,250
144,000 Intel Corp. 2,649,600
40,000 KLA-Tencor Corp.*+ 1,640,000
100,000 Teradyne, Inc.* 1,160,000
Fiber Optics 0.88% 1,615,000
500,000 JDS Uniphase Corp.*+ 1,615,000
Finance 3.62% 6,607,730
15,000 BlackRock, Inc. * 682,200
90,000 Citigroup, Inc. 3,532,500
61,000 First Data Corp.+ 2,393,030
Household 0.83% 1,524,000
50,000 Newell Rubbermaid, Inc. 1,524,000
Insurance 2.04% 3,727,820
20,000 American International Group, Inc. 1,159,000
58,000 RenaissanceRe Holdings Ltd. (Bermuda) 2,568,820
Leisure 1.18% 2,157,500
25,000 International Game Technology*+ 2,157,500
Manufacturing 0.76% 1,379,600
20,000 Danaher Corp. 1,379,600
Media 5.44% 9,931,400
80,000 Clear Channel Communications, Inc.* 3,128,800
35,000 Comcast Corp. (Class A)* 1,116,850
102,500 Comcast Corp. (Special Class A)* 3,081,150
60,000 Viacom, Inc. (Class B)* 2,604,600
Medical 19.85% 36,259,880
40,000 Abbott Laboratories 1,625,200
50,000 Amgen, Inc.* 3,065,500
55,000 Biovail Corp. (Canada)* 1,988,250
35,000 Forest Laboratories, Inc.*+ 1,810,200
40,000 IDEC Pharmaceuticals Corp.*+ 1,310,000
90,017 Johnson & Johnson 5,073,358
84,776 Medtronic, Inc. 4,047,206
50,000 Merck & Co., Inc. 2,909,000
62,500 Mylan Laboratories, Inc. 1,766,875
40,000 Novartis AG, American Depositary Receipt (ADR) (Switzerland) 1,579,200
306,561 Pfizer, Inc. 9,426,751
18,000 UnitedHealth Group, Inc. 1,658,340
Oil & Gas 6.28% 11,461,600
50,000 Anadarko Petroleum Corp. 2,220,000
60,000 BJ Services Co.* 2,190,600
105,000 ENSCO International, Inc. 2,667,000
80,000 Exxon Mobil Corp. 2,816,000
40,000 Nabors Industries Ltd. (Bermuda)*+ 1,568,000
Retail 8.04% 14,681,415
40,000 Best Buy Co., Inc.* 1,383,200
115,000 Home Depot, Inc. (The) 3,234,950
145,000 McDonald's Corp. 2,479,500
105,000 Staples, Inc.* 1,999,200
65,000 Target Corp. 2,173,600
60,564 Wal-Mart Stores, Inc. 3,410,965
Steel 0.56% 1,021,250
25,000 Nucor Corp.+ 1,021,250
Telecommunications 2.24% 4,084,750
145,000 Nokia Oyj (ADR) (Finland)+ 2,402,650
45,000 Verizon Communications, Inc. 1,682,100
INTEREST PAR VALUE
ISSUER, DESCRIPTION, MATURITY DATE RATE (000s OMITTED) VALUE
SHORT-TERM INVESTMENTS 15.97% $29,158,411
(Cost $29,158,411)
Joint Repurchase Agreement 3.15%
Investment in a joint repurchase agreement transaction with
State Street Bank & Trust Co. -- Dated 04-30-03, due 05-01-03
(Secured by U.S. Treasury Inflation Indexed Bond 3.875% due
04-15-29, U.S. Treasury Inflation Indexed Notes 3.375%
due 01-15-07 and 3.000% due 07-15-12) 1.28% $5,743 5,743,000
SHARES
Cash Equivalents 12.82%
AIM Cash Investment Trust** 23,415,411 23,415,411
TOTAL INVESTMENTS 114.46% $209,045,202
OTHER ASSETS AND LIABILITIES, NET (14.46%) ($26,403,815)
TOTAL NET ASSETS 100.00% $182,641,387
Notes to Schedule of Investments
+ All or a portion of this security is on loan on April 30, 2003.
* Non-income-producing security.
** Represents investment of security lending collateral.
Parenthetical disclosure of a foreign country in the security
description represents country of a foreign issuer.
The percentage shown for each investment category is the total value of
that category as a percentage of the net assets of the Fund.
See notes to
financial statements.
ASSETS AND
LIABILITIES
April 30, 2003
(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
offering price
per share.
ASSETS
Investments at value (cost $190,995,755), including
$22,732,490 of securities loaned $209,045,202
Cash 794
Receivable for investments sold 2,216,264
Receivable for shares sold 1,627
Dividends and interest receivable 66,221
Other assets 47,822
Total assets 211,377,930
LIABILITIES
Payable for investments purchased 4,945,284
Payable for shares repurchased 67,540
Payable for securities on loan 23,415,411
Payable to affiliates 230,220
Other payables and accrued expenses 78,088
Total liabilities 28,736,543
NET ASSETS
Capital paid-in 445,580,493
Accumulated net realized loss on investments (280,059,652)
Net unrealized appreciation of investments 18,049,447
Accumulated net investment loss (928,901)
Net assets $182,641,387
NET ASSET VALUE PER SHARE
Based on net asset values and shares outstanding
Class A ($132,973,836 [DIV] 16,129,553 shares) $8.24
Class B ($46,673,615 [DIV] 6,173,169 shares) $7.56
Class C ($2,993,936 [DIV] 396,200 shares) $7.56
MAXIMUM OFFERING PRICE PER SHARE
Class A 1 ($8.24 [DIV] 95%) $8.67
Class C ($7.56 [DIV] 99%) $7.64
1 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.
OPERATIONS
For the period ended
April 30, 2003
(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 (net of foreign withholding taxes of $6,604) $960,494
Interest (including securities lending income of $17,552) 52,991
Total investment income 1,013,485
EXPENSES
Investment management fee 680,386
Class A distribution and service fee 197,387
Class B distribution and service fee 234,913
Class C distribution and service fee 14,311
Transfer agent fee 649,092
Accounting and legal services fee 38,784
Printing 23,677
Registration and filing fee 22,815
Custodian fee 20,272
Auditing fee 17,758
Trustees' fee 6,194
Miscellaneous 5,236
Interest expense 1,833
Legal fee 1,249
Total expenses 1,913,907
Net investment loss (900,422)
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized loss on investments (5,077,877)
Change in net unrealized appreciation (depreciation)
of investments 7,772,943
Net realized and unrealized gain 2,695,066
Increase in net assets from operations $1,794,644
1 Semiannual period from 11-1-02 through 4-30-03.
See notes to
financial statements.
CHANGES IN
NET ASSETS
This Statement
of Changes in
Net Assets
shows how the
value of the
Fund's net assets
has changed
since the end of
the previous
period. The dif-
ference reflects
earnings less
expenses, any
investment gains
and losses, distri-
butions paid to
shareholders, if
any, and any
increase or
decrease in
money share-
holders invested
in the Fund.
INCREASE (DECREASE) IN NET ASSETS
From operations
YEAR PERIOD
ENDED ENDED
10-31-02 4-30-03 1
Net investment loss ($3,115,869) ($900,422)
Net realized loss (53,440,499) (5,077,877)
Change in net unrealized
appreciation (depreciation) (984,611) 7,772,943
Increase (decrease) in net assets
resulting from operations (57,540,979) 1,794,644
From Fund share transactions (48,397,414) (13,086,407)
NET ASSETS
Beginning of period 299,871,543 193,933,150
End of period 2 $193,933,150 $182,641,387
1 Semiannual period from 11-1-02 through 4-30-03. Unaudited.
2 Includes accumulated net investment loss of $28,479 and $928,901,
respectively.
See notes to
financial statements.
FINANCIAL
HIGHLIGHTS
CLASS A SHARES
The Financial Highlights show how the Fund's net asset value for a share
has changed since the end of the previous period.
PERIOD ENDED 10-31-98 10-31-99 10-31-00 10-31-01 10-31-02 4-30-03 1
PER SHARE OPERATING PERFORMANCE
Net asset value,
beginning of period $24.37 $22.27 $25.04 $20.73 $10.38 $8.14
Net investment loss 2 (0.11) (0.17) (0.23) (0.13) (0.10) (0.03)
Net realized and unrealized
gain (loss) on investments 2.17 5.65 (1.48) (9.42) (2.14) 0.13
Total from
investment operations 2.06 5.48 (1.71) (9.55) (2.24) 0.10
Less distributions
From net realized gain (4.16) (2.71) (2.60) (0.80) -- --
Net asset value,
end of period $22.27 $25.04 $20.73 $10.38 $8.14 $8.24
Total return 3 (%) 9.80 27.58 (8.15) (47.77) (21.58) 1.23 4
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period
(in millions) $382 $484 $421 $209 $140 $133
Ratio of expenses to
average net assets (%) 1.40 1.35 1.36 1.59 1.75 1.92 5
Ratio of net investment
loss to average
net assets (%) (0.50) (0.70) (0.97) (0.99) (0.96) (0.80) 5
Portfolio turnover (%) 153 6 183 162 131 228 84
See notes to
financial statements.
FINANCIAL
HIGHLIGHTS
CLASS B SHARES
PERIOD ENDED 10-31-98 10-31-99 10-31-00 10-31-01 10-31-02 4-30-03 1
PER SHARE OPERATING PERFORMANCE
Net asset value,
beginning of period $23.70 $21.38 $23.74 $19.40 $9.62 $7.49
Net investment loss 2 (0.25) (0.31) (0.37) (0.21) (0.15) (0.05)
Net realized and unrealized
gain (loss) on investments 2.09 5.38 (1.37) (8.77) (1.98) 0.12
Total from
investment operations 1.84 5.07 (1.74) (8.98) (2.13) 0.07
Less distributions
From net realized gain (4.16) (2.71) (2.60) (0.80) -- --
Net asset value,
end of period $21.38 $23.74 $19.40 $9.62 $7.49 $7.56
Total return 3 (%) 9.04 26.70 (8.79) (48.12) (22.14) 0.93 4
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period
(in millions) $217 $312 $239 $88 $51 $47
Ratio of expenses to
average net assets (%) 2.08 2.02 2.05 2.24 2.45 2.62 5
Ratio of net investment
loss to average
net assets (%) (1.16) (1.37) (1.66) (1.65) (1.66) (1.50) 5
Portfolio turnover (%) 153 6 183 162 131 228 84
FINANCIAL
HIGHLIGHTS
CLASS C SHARES
PERIOD ENDED 10-31-98 7 10-31-99 10-31-00 10-31-01 10-31-02 4-30-03 1
PER SHARE OPERATING PERFORMANCE
Net asset value,
beginning of period $21.43 $21.37 $23.73 $19.39 $9.61 $7.49
Net investment loss 2 (0.10) (0.31) (0.37) (0.20) (0.15) (0.06)
Net realized and unrealized
gain (loss) on investments 0.04 5.38 (1.37) (8.78) (1.97) 0.13
Total from
investment operations (0.06) 5.07 (1.74) (8.98) (2.12) 0.07
Less distributions
From net realized gain -- (2.71) (2.60) (0.80) -- --
Net asset value,
end of period $21.37 $23.73 $19.39 $9.61 $7.49 $7.56
Total return 3 (%) (0.28) 4 26.72 (8.80) (48.15) (22.06) 0.93 4
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period
(in millions) $1 $1 $3 $4 $3 $3
Ratio of expenses to
average net assets (%) 2.10 5 2.05 2.06 2.29 2.45 2.62 5
Ratio of net investment
loss to average
net assets (%) (1.14) 5 (1.36) (1.71) (1.68) (1.66) (1.50) 5
Portfolio turnover (%) 153 6 183 162 131 228 84
1 Semiannual period from 11-1-02 through 4-30-03. Unaudited.
2 Based on the average of the shares outstanding.
3 Assumes dividend reinvestment and does not reflect the effect of sales charges.
4 Not annualized.
5 Annualized.
6 Excludes merger activity.
7 Class C shares began operations on 6-1-98.
See notes to
financial statements.
NOTES TO
STATEMENTS
Unaudited
NOTE A
Accounting policies
John Hancock Large Cap Growth Fund (the "Fund") is a diversified series
of John Hancock Investment Trust III, an open-end management investment
company registered under the Investment Company Act of 1940. The
investment objective of the Fund is to seek long-term capital
appreciation.
The Trustees have authorized the issuance of multiple classes of shares
of the Fund, designated as Class A, Class B and Class C shares. 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 Trustees, may be applied differently 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 bears distribution and service expenses under terms of a
distribution plan have exclusive voting rights to that distribution
plan.
Significant accounting policies of the Fund are as follows:
Valuation of investments
Securities in the Fund's portfolio are valued on the basis of market
quotations, valuations provided by independent pricing services or at
fair value as determined in good faith in accordance with procedures
approved by the Trustees. Short-term debt investments maturing within 60
days are valued at amortized cost, which approximates market value.
Investments in AIM Cash Investment Trust are valued at their net asset
value each business day.
Joint repurchase agreement
Pursuant to an exemptive order issued by the Securities and Exchange
Commission, the Fund, along with other registered investment companies
having a management contract with John Hancock Advisers, LLC (the
"Adviser"), a wholly owned subsidiary of The Berkeley Financial Group,
LLC, may participate in a joint repurchase agreement transaction.
Aggregate cash balances are invested in one or more large repurchase
agreements, whose underlying securities are obligations of the U.S.
government and/or its agencies. The Fund's custodian bank receives
delivery of the underlying securities for the joint account on the
Fund's behalf. The Adviser is responsible for ensuring that the
agreement is fully collateralized at all times.
Investment transactions
Investment transactions are recorded as of the date of purchase, sale or
maturity. Net realized gains and losses on sales of investments are
determined on the identified cost basis.
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 assets of the respective classes. Distribu
tion and service fees, if any, are calculated daily at the class level
based on the appropriate net assets of each class and the specific
expense rate(s) applicable to each class.
Expenses
The majority of the expenses are directly identifiable to an individual
fund. Expenses that are not readily identifiable to a specific fund will
be allocated in such a manner as deemed equitable, taking into
consideration, among other things, the nature and type of expense and
the relative sizes of the funds.
Bank borrowings
The Fund is permitted to have bank borrowings for temporary or emergency
purposes, including the meeting of redemption requests that otherwise
might require the untimely disposition of securities. The Fund has
entered into a syndicated line of credit agreement with various banks.
This agreement enables the Fund to participate with other funds managed
by the Adviser in an unsecured line of credit with banks, which permits
borrowings of up to $250 million, collectively. Interest is charged to
each fund, based on its borrowing. In addition, a commitment fee is
charged to each fund based on the average daily unused portion of the
line of credit and is allocated among the participating funds. The Fund
had no borrowing activity under the line of credit during the period
ended April 30, 2003.
Securities lending
The Fund may lend securities to certain qualified brokers who pay the
Fund negotiated lender fees. These fees are included in interest income.
The loans are collateralized at all times with cash or securities with a
market value at least equal to the market value of the securities on
loan. As with other extensions of credit, the Fund may bear the risk of
delay of the loaned securities in recovery or even loss of rights in the
collateral, should the borrower of the securities fail financially. On
April 30, 2003, the Fund loaned securities having a market value of
$22,732,490 collateralized by cash in the amount of $23,415,411. The
cash collateral was invested in a short-term instrument.
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 has $274,017,101 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: October 31, 2009 --
$218,821,116 and October 31, 2010 -- $55,195,985.
Dividends, interest and distributions
Dividend income on investment securities is recorded on the ex-dividend
date or, in the case of some foreign securities, on the date thereafter
when the Fund identifies the dividend. Interest income on investment
securities is recorded on the accrual basis. Foreign income may be
subject to foreign withholding taxes, which are accrued as applicable.
The Fund records distributions to shareholders from net investment
income and net realized gains on the ex-dividend date. 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.
Use of estimates
The preparation of these financial statements, in accordance with
accounting principles generally accepted in the United States of
America, incorporates estimates made by management in determining the
reported amount of assets, liabilities, revenues and expenses of the
Fund. Actual results could differ from these estimates.
NOTE B
Management fee and transactions with affiliates and others
The Fund has an investment management contract with the Adviser. Under
the investment management contract, the Fund pays a monthly management
fee to the Adviser equivalent, on an annual basis, to the sum of: (a)
0.75% of the first $750,000,000 of the Fund's average daily net asset
value and (b) 0.70% of the Fund's average daily net asset value in
excess of $750,000,000.
The Fund has Distribution Plans with John Hancock Funds, LLC ("JH
Funds"), a wholly owned subsidiary of the Adviser. The Fund has adopted
Distribution Plans with respect to Class A, Class B and Class C pursuant
to Rule 12b-1 under the Investment Company Act of 1940 to reimburse JH
Funds for the services it provides as distributor of shares of the Fund.
Accord ingly, the Fund makes monthly payments to JH Funds at an annual
rate not to exceed 0.30% of Class A average daily net assets and 1.00%
of Class B and Class C average daily net assets. A maximum of 0.25% of
such payments may be service fees as defined by the Con duct Rules of
the National Association of Securities Dealers. Under the Conduct Rules,
curtailment of a portion of the Fund's 12b-1 pay ments could occur under
certain circumstances.
Class A and Class C shares are assessed up-front sales charges. During
the period ended April 30, 2003, JH Funds received net up-front sales
charges of $62,616 with regard to sales of Class A shares. Of this
amount, $8,519 was retained and used for printing prospectuses,
advertising, sales literature and other purposes, $30,263 was paid as
sales commissions to unrelated broker-dealers and $23,834 was paid as
sales commissions to sales personnel of Signator Investors, Inc.
("Signator Investors"), a related broker-dealer. The Adviser's indirect
parent, John Hancock Life Insurance Company ("JHLICo"), is the indirect
sole shareholder of Signator Investors. During the period ended April
30, 2003, JH Funds received net up-front sales charges of $3,059 with
regard to sales of Class C shares. Of this amount, $2,450 was paid as
sales commissions to unrelated broker-dealers and $609 was paid as sales
commissions to sales personnel of Signator Investors.
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 JH Funds
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 April 30, 2003,
CDSCs received by JH Funds amounted to $57,521 for Class B shares and
$322 for Class C shares.
The Fund has a transfer agent agreement with John Hancock Signature
Services, Inc., an indirect subsidiary of JHLICo. The Fund pays a
monthly transfer agent fee at an annual rate of 0.05% of the average
daily net asset value, plus a fee based on the number of shareholder
accounts and reimbursement for certain out-of-pocket expenses.
The Fund has an agreement with the Adviser to perform necessary tax,
accounting and legal services for the Fund. The compensation for the
period was at an annual rate of approximately 0.04% of the average net
assets of the Fund.
Ms. Maureen R. Ford and Mr. John M. DeCiccio are directors and/or
officers of the Adviser and/or its affiliates, as well as Trustees of
the Fund. The compensation of unaffiliated Trustees is borne by the
Fund. The unaffiliated Trustees may elect to defer for tax purposes
their receipt of this compensation under the John Hancock Group of Funds
Deferred Compensation Plan. The Fund makes investments into other John
Hancock funds, as applicable, to cover its liability for the deferred
compensation. Investments to cover the Fund's deferred compensation
liability are recorded on the Fund's books as an other asset. The
deferred compensation liability and the related other asset are always
equal and are marked to market on a periodic basis to reflect any income
earned by the investments as well as any unrealized gains or losses. The
Deferred Compensation Plan investments had no impact on the
operations of the Fund.
NOTE C
Fund share transactions
This listing illustrates the number of Fund shares sold and repurchased
during the last two periods, along with the corresponding dollar value.
The Fund has an unlimited number of shares authorized with no par value.
YEAR ENDED 10-31-02 PERIOD ENDED 4-30-03 1
SHARES AMOUNT SHARES AMOUNT
CLASS A SHARES
Sold 1,947,091 $19,544,311 673,693 $5,405,056
Repurchased (4,847,316) (47,395,047) (1,764,446) (14,105,215)
Net decrease (2,900,225) ($27,850,736) (1,090,753) ($8,700,159)
CLASS B SHARES
Sold 1,608,344 $15,305,021 619,870 $4,550,557
Repurchased (3,934,461) (36,201,222) (1,228,289) (9,002,535)
Net decrease (2,326,117) ($20,896,201) (608,419) ($4,451,978)
CLASS C SHARES
Sold 151,406 $1,482,455 63,148 $467,894
Repurchased (128,882) (1,132,932) (54,962) (402,164)
Net increase 22,524 $349,523 8,186 $65,730
NET DECREASE (5,203,818) ($48,397,414) (1,690,986) ($13,086,407)
1 Semiannual period from 11-1-02 through 4-30-03. Unaudited.
NOTE D
Investment transactions
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 April 30, 2003, aggregated $151,388,214 and
$157,113,125, respectively.
The cost of investments owned on April 30, 2003, including short-term
investments, for federal income tax purposes was $191,960,428. Gross
unrealized appreciation and depreciation of investments aggregated
$20,274,114 and $3,189,340, respectively, resulting in net unrealized
appreciation of $17,084,774. The difference between book basis and tax
basis net unrealized appreciation of investments is attributable
primarily to the tax deferral of losses on wash sales.
OUR FAMILY
OF FUNDS
- -------------------------------------------------------
Equity Balanced Fund
Classic Value Fund
Core Equity Fund
Focused Equity Fund
Growth Trends Fund
Large Cap Equity Fund
Large Cap Growth Fund
Large Cap Spectrum Fund
Mid Cap Growth Fund
Multi Cap Growth Fund
Small Cap Equity Fund
Small Cap Growth Fund
Sovereign Investors Fund
U.S. Global Leaders Growth Fund
- -------------------------------------------------------
Sector Biotechnology Fund
Financial Industries Fund
Health Sciences Fund
Real Estate Fund
Regional Bank Fund
Technology Fund
- -------------------------------------------------------
Income Bond Fund
Government Income Fund
High Income Fund
High Yield Bond Fund
Investment Grade Bond Fund
Strategic Income Fund
- -------------------------------------------------------
International International Fund
Pacific Basin Equities Fund
- -------------------------------------------------------
Tax-Free Income California Tax-Free Income Fund
High Yield Municipal Bond Fund
Massachusetts Tax-Free Income Fund
New York Tax-Free Income Fund
Tax-Free Bond Fund
- -------------------------------------------------------
Money Market Money Market Fund
U.S. Government Cash Reserve
For more complete information on any John Hancock Fund
and a prospectus, which includes charges and expenses,
call your financial professional, or John Hancock Funds at
1-800-225-5291. Please read the prospectus carefully before
investing or sending money.
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FOR YOUR
INFORMATION
TRUSTEES
Dennis S. Aronowitz
Richard P. Chapman, Jr.
William J. Cosgrove
John M. DeCiccio
Richard A. Farrell
Maureen R. Ford
William F. Glavin*
Dr. John A. Moore*
Patti McGill Peterson*
John W. Pratt
*Members of the Audit Committee
OFFICERS
Maureen R. Ford
Chairman, President
and Chief Executive Officer
William L. Braman
Executive Vice President
and Chief Investment Officer
Richard A. Brown
Senior Vice President
and Chief Financial Officer
Susan S. Newton
Senior Vice President and Secretary
William H. King
Vice President and Treasurer
Thomas H. Connors
Vice President and Compliance Officer
INVESTMENT ADVISER
John Hancock Advisers, LLC
101 Huntington Avenue
Boston, Massachusetts 02199-7603
PRINCIPAL DISTRIBUTOR
John Hancock Funds, LLC
101 Huntington Avenue
Boston, Massachusetts 02199-7603
CUSTODIAN
The Bank of New York
One Wall Street
New York, New York 10286
TRANSFER AGENT
John Hancock Signature Services, Inc.
1 John Hancock Way, Suite 1000
Boston, Massachusetts 02217-1000
LEGAL COUNSEL
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109-1803
HOW TO
CONTACT US
On the Internet www.jhfunds.com
By regular mail John Hancock Signature Services, Inc.
1 John Hancock Way, Suite 1000
Boston, MA 02217-1000
By express mail John Hancock Signature Services, Inc.
Attn: Mutual Fund Image Operations
529 Main Street
Charlestown, MA 02129
Customer service representatives 1-800-225-5291
24-hour automated information 1-800-338-8080
TDD line 1-800-554-6713
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A tag line below reads "JOHN HANCOCK FUNDS."]
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Now available: electronic delivery
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This report is for the information of
the shareholders of the John Hancock
Large Cap Growth Fund.
200SA 4/03
6/03
John Hancock
Mid Cap
Growth
Fund
SEMI
ANNUAL
REPORT
4.30.03
Sign up for electronic delivery at
www.jhancock.com/funds/edelivery
[A 2" x 1" John Hancock (Signature)/John Hancock Funds logo in lower,
center middle of page. A tag line below reads "JOHN HANCOCK FUNDS."]
[A photo of Maureen R. Ford, Chairman and Chief Executive Officer,
flush left next to first paragraph.]
WELCOME
Table of contents
Your fund at a glance
page 1
Managers' report
page 2
A look at performance
page 6
Growth of $10,000
page 7
Fund's investments
page 8
Financial statements
page 11
For your information
page 25
Dear Fellow Shareholders,
After a strong start to 2003, the stock market succumbed to the
pressures of a weak economy, rising oil prices, concerns about corporate
earnings and uncertainties about the war in Iraq. The tide turned in
April, when the war ended and first-quarter corporate earnings came in
better than expected. As a result, the major indexes all gained some
ground year to date through April 30, 2003, with the Dow Jones
Industrial Average returning 2.50%, the Standard & Poor's 500 Index
returning 4.82% and the tech-heavy Nasdaq Composite Index up 9.64%.
Bonds, which have outperformed stocks for the last three years,
continued their upward trend this year, as investors still sought their
relative safety.
After the jarring stock market losses of the last three years, it's a
relief for investors to be reminded that the market is indeed cyclical,
and does eventually move up -- not just down. But while the stock market
has been clawing its way back, the ride has been extremely volatile.
Uncertainty still abounds about the strength of the economy,
geopolitical issues, corporate governance problems, rising unemployment
and the sustainability of corporate earnings growth. And despite rallies
late last year and in April, many investors are still so bruised and
skeptical that they have remained on the sidelines. Even though the
statistics suggest we might be emerging from this long, difficult bear
market, we're not quite ready to call it history.
While no one can predict when this bear market cycle will turn,
investors can take charge of how they maneuver through such uncertain
times. First, take a look at how your portfolio is allocated among
stocks, bonds and cash to make sure it's in the proper balance. Work
with your investment professional, who knows your long-term goals and
can help keep you on the right track, rather than being lured by today's
stars, which could wind up tomorrow's laggards. And as always, keep a
long-term investment horizon. We believe this offers the best way for
you to survive the tough times and reach your investment objectives.
Sincerely,
/S/ MAUREEN R. FORD
Maureen R. Ford,
Chairman and Chief Executive Officer
This commentary reflects the chairman's views as of April 30, 2003. They
are subject to change at any time.
YOUR FUND
AT A GLANCE
The Fund seeks
long-term capital
appreciation by
investing primar-
ily in stocks of
medium capital
ization companies
(in the capitaliza-
tion range of the
Russell Midcap
Growth Index)
with above-
average earnings
growth.
Over the last six months
* The stock market rallied as the war with Iraq ended and earnings
reports came in better than expected.
* The Fund's emphasis was on quality companies.
* The Fund's tilt toward economically sensitive areas, including
technology and industrials, helped performance.
[Bar chart with heading "John Hancock Mid Cap Growth Fund." Under the
heading is a note that reads "Fund performance for the six months ended
April 30, 2003." The chart is scaled in increments of 1% with 0% at the
bottom and 5% at the top. The first bar represents the 4.17% total
return for Class A. The second bar represents the 3.85% total return for
Class B. The third bar represents the 3.67% total return for Class C.
The fourth bar represents the 4.45% total return for Class I. A note
below the chart reads "Total returns for the Fund are at net asset value
with all distributions reinvested."]
Top 10 holdings
3.8% Affiliated Computer Services, Inc.
3.6% BEA Systems, Inc.
3.2% Caremark Rx, Inc.
2.9% Performance Food Group Co.
2.6% Gilead Sciences, Inc.
2.4% Danaher Corp.
2.4% Pactiv Corp.
2.3% BJ Services Co.
2.3% MedImmune, Inc.
2.3% Electronic Arts, Inc.
As a percentage of net assets on April 30, 2003.
BY PAUL J. BERLINGUET, THOMAS P. NORTON, CFA, AND ROBERT J. UEK, CFA,
PORTFOLIO MANAGERS
John Hancock
Mid Cap Growth Fund
MANAGERS'
REPORT
Stocks finally rewarded patient investors. The Standard & Poor's 500
Index returned 4.47% for the six months ended April 30, 2003, but its
gains did not come easily. Stocks rallied late last year, then fizzled
in the new year amid worrisome headline news that included war with
Iraq, the SARS virus and the weak economy. Strong sector rotations
resulted, as investors reacted to the changing environment. Fortunately,
the war came to a swift end, first-quarter earnings were better than
expected and consumer confidence rose, boosting stock returns in April.
The Russell Midcap Growth Index returned 8.19% for the six-month period,
benefiting in part from lower headline risk than large-cap names.
"Stocks finally rewarded
patient investors."
PERFORMANCE REVIEW
The Fund remained broadly diversified across industries, focusing on
quality companies that would benefit from an economic recovery. We
followed our disciplined buying and selling process, setting price
targets for each investment that helped us lock in profits and minimize
losses in a volatile market. John Hancock Mid Cap Growth Fund's Class A,
Class B, Class C and Class I shares posted total returns of 4.17%,
3.85%, 3.67% and 4.45%, respectively, at net asset value for the six
months ended April 30, 2003. By comparison, the average mid-cap growth
fund returned 4.04%, according to Lipper, Inc.1 Keep in mind that your
net asset value return will be different from the Fund's if you were not
invested in the Fund for the entire period and did not reinvest all
distributions. Long-term performance information can be found on pages
six and seven.
[Photos of Paul Berlinguet, Thomas Norton and Robert Uek flush right
next to first paragraph.]
TECHNOLOGY CONCENTRATION
Technology, which enjoyed a nice comeback from depressed levels, was the
Fund's largest sector. At certain points, our buy and sell discipline
caused our stake to fall slightly below that of our benchmark, the
Russell Midcap Growth Index. This hindered the Fund when tech stocks
were climbing. On the positive side, our tech stocks were among the
Fund's best performers. We focused on software companies, some of which
posted especially strong gains as sales and earnings came in better than
expected.
Both Mercury Interactive, which sells testing and monitoring software,
and BEA Systems, which develops systems software for application
servers, posted robust returns for the portfolio. We sold Mercury, as it
reached what we thought was full valuation. The Fund also benefited from
owning Electronic Arts, which provides video game programming, and
Precise Software Solutions, which was bought out during the period by
Veritas Software. Disappointments included RF Micro Devices, a company
that makes semiconductors for cell phones, and Tellabs, which supplies
switches for routing telecommunications in metropolitan areas. Both
stocks sank amid weak demand, causing us to sell. We held on, however,
to our large stake in Affiliated Computer Services, which is a leader in
the growing field of business processing outsourcing. It declined as
competitors' disappointments hurt the group.
"...our tech stocks
were among the Fund's
best performers."
GAINS IN INDUSTRIALS AND FINANCIALS
Our industrial and financial stock selection, which focused on more
economically sensitive companies, gave a nice boost to returns. Danaher,
which manufactures Craftsman tools as well as processing and
environmental controls for factories, benefited from strong execution
and steady demand. In the finance sector, we owned a mix of banks,
brokers and property and casualty insurers. Legg Mason, a broker, did
especially well as business stabilized, while insurer RenaissanceRe
benefited from improved industry pricing. Our energy stocks also did
well. We focused on oil services companies, which we expect to benefit
from increased drilling activity.
[Table at top left-hand side of page entitled "Top five industry
groups." The first listing is Medical 21%, the second is Computers 16%,
the third Retail 10%, the fourth Oil & gas 8%, and the fifth Media 6%.]
[Pie chart at middle of page with heading "Portfolio diversification As
a percentage of net assets on 4-30-03." The chart is divided into two
sections (from top to left): Common stocks 94% and Short-term
investments & other 6%.]
HEALTH CARE AND CONSUMER
Our health-care stocks lagged the benchmark. We emphasized biotechnology
and pharmaceuticals and largely avoided medical services and technology
companies. Disappointments included King Pharmaceuticals, which tumbled
amid missed earnings and a pricing investigation. We added to our stake,
believing investors had overreacted. However, we sold Charles River
Laboratories International, a medical research company that suffered due
to slowing demand for its products and services. Some of these losses
were offset by strong gains at Gilead Sciences, a biotech company
specializing in HIV drugs, and MedImmune, a biotech company that
recently launched an aerosol flu vaccine. Caremark Rx, a pharmaceutical
benefits management company, also did well as demand remained strong.
[Table at top of page entitled "SCORECARD." The header for the left
column is "INVESTMENT" and the header for the right column is "PERIOD'S
PERFORMANCE...AND WHAT'S BEHIND THE NUMBERS." The first listing is
Mercury Interactive followed by an up arrow with the phrase
"Better-than-expected sales, rally in tech stocks." The second listing
is Electronic Arts followed by an up arrow with the phrase "Strong
balance sheet, good management, reasonable valuation." The third listing
is RF Micro Devices followed by a down arrow with the phrase
"Weaker-than-expected demand and pricing."]
In aggregate, consumer stocks were disappointing. We focused on
specialty retailers and media, downplaying leisure. Unfortunately, a
couple of our investments missed earnings, resulting in sharp declines.
Among them were Monster Worldwide, which does on-line recruiting, and
Office Depot. We cut our losses and eliminated both from the portfolio.
We maintained a large stake in Performance Food Group, however, as a
competitor's problems hurt the group. Select retailers -- including
Coach, a leather goods company with good profit margins, and Staples,
the office supply store -- rallied nicely. We trimmed our stake in Coach
when it reached our price target and added Williams-Sonoma, an upscale
home goods retailer with a lower valuation.
"We believe the outlook for
the market in general and
mid-cap stocks in particular
is favorable."
IMPROVING OUTLOOK
We believe the outlook for the market in general and mid-cap stocks in
particular is favorable. We believe the economy will slowly and steadily
improve through 2003 and 2004. As conditions stabilize, we think
companies will be more apt to increase capital spending. This is key,
given that weak capital spending has contributed heavily to the sluggish
economy.
This commentary reflects the views of the portfolio managers through the
end of the Fund's period discussed in this report. The managers'
statements reflect their own opinions. As such, they are in no way
guarantees of future events, and are not intended to be used as
investment advice or a recommendation regarding any specific security.
They are also subject to change at any time as market and other
conditions warrant.
1 Figures from Lipper, Inc. include reinvested dividends and do not take
into account sales charges. Actual load-adjusted performance is lower.
A LOOK AT
PERFORMANCE
For the period ended
April 30, 2003
The index used for
comparison is the
Standard & Poor's 500
Index, Index 1, an
unmanaged index that
includes 500 widely
traded common stocks.
Also shown on page 7
is the Russell Midcap
Growth Index, Index 2,
an unmanaged index
that contains those
stocks from the Russell
Midcap Index with a
greater-than-average
growth orientation.
It is not possible to
invest in an index.
Class A Class B Class C Class I 1 Index 1
Inception date 11-1-93 11-1-93 6-1-98 3-1-02 --
Average annual returns with maximum sales charge (POP)
One year -21.08% -21.65% -19.21% -16.36% -13.30%
Five years -8.41% -8.43% -- -- -2.42%
Since inception 1.56% 1.40% -7.16% -14.49% --
Cumulative total returns with maximum sales charge (POP)
Six months -1.03% -1.15% 1.65% 4.45% 4.47%
One year -21.08% -21.65% -19.21% -16.36% -13.30%
Five years -35.55% -35.62% -- -- -11.54%
Since inception 15.87% 14.14% -30.56% -16.67% --
Performance figures assume all distributions are reinvested. Returns
with maximum sales charge reflect a sales charge on Class A shares of 5%
and Class C shares of 1%, and the applicable contingent deferred sales
charge (CDSC) on Class B and Class C shares. The Class B shares' CDSC
declines annually between years 1-6 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 return
and principal value of an investment in the Fund will fluctuate, so that
shares, when redeemed, may be worth more or less than the original cost.
Index figures do not reflect sales charges and would be lower if they
did.
The returns reflect past results and should not be considered indicative
of future performance. 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.
1 For certain types of investors as described in the Fund's prospectus
for Class I shares.
GROWTH OF
$10,000
This chart shows what happened to a hypothetical $10,000 investment in
Class A shares for the period indicated. For comparison, we've shown the
same investment in the two indexes described on page 6.
Line chart with the heading "GROWTH OF $10,000." Within the chart are
four lines. The first line represents Index 1 and is equal to $23,317 as
of April 30, 2003. The second line represents Index 2 and is equal to
$18,675 as of April 30, 2003. The third line represents the value of the
hypothetical $10,000 investment made in the John Hancock Mid Cap Growth
Fund, before sales charge, and is equal to $12,200 as of April 30, 2003.
The fourth line represents the value of the same hypothetical investment
made in the John Hancock Mid Cap Growth Fund, after sales charge, and is
equal to $11,587 as of April 30, 2003.
Class B 1 Class C 1 Class I 2
Period beginning 11-1-93 6-1-98 3-1-02
Without sales charge $11,414 $7,013 $9,333
With maximum sales charge -- $6,943 --
Index 1 $23,317 $9,000 $8,451
Index 2 $18,675 $8,955 $8,494
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 and Class I shares, respectively, as of April 30, 2003.
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.
1 No contingent deferred sales charge applicable.
2 For certain types of investors as described in the Fund's prospectus
for Class I shares.
FINANCIAL STATEMENTS
FUND'S
INVESTMENTS
Securities owned
by the Fund on
April 30, 2003
(unaudited)
This schedule is divided into two main categories: common stocks and
short-term investments. Common stocks are further broken down by
industry group. Short-term investments, which represent the Fund's cash
position, are listed last.
SHARES ISSUER VALUE
COMMON STOCKS 93.73% $124,101,407
(Cost $112,765,596)
Advertising 2.19% 2,897,849
46,815 Omnicom Group, Inc. 2,897,849
Beverages 1.41% 1,871,040
96,000 Coca-Cola Enterprises, Inc. 1,871,040
Business Services -- Misc. 4.35% 5,762,152
43,597 ChoicePoint, Inc.* 1,538,102
54,200 Corporate Executive Board Co. (The)*+ 2,221,658
60,900 Manpower, Inc. 2,002,392
Computers 16.39% 21,706,425
105,933 Affiliated Computer Services, Inc.*+ 5,053,004
97,500 Alliance Data Systems Corp.* 2,047,500
443,600 BEA Systems, Inc.* 4,750,956
51,100 Electronic Arts, Inc.*+ 3,028,697
66,600 Intuit, Inc.* 2,582,748
136,000 McDATA Corp. (Class B)*+ 1,430,720
64,000 Symantec Corp.* 2,812,800
Containers 2.40% 3,170,340
154,500 Pactiv Corp.* 3,170,340
Cosmetics & Personal Care 0.52% 682,500
21,000 Estee Lauder Cos., Inc. (The) (Class A) 682,500
Electronics 4.16% 5,508,685
139,900 Flextronics International Ltd.* (Singapore) 1,224,125
88,800 Jabil Circuit, Inc.*+ 1,660,560
64,000 KLA-Tencor Corp.*+ 2,624,000
Finance 5.33% 7,050,450
60,098 Eaton Vance Corp. 1,790,920
38,785 Legg Mason, Inc. 2,106,025
33,500 State Street Corp. 1,173,505
50,000 TCF Financial Corp. 1,980,000
Insurance 1.72% 2,269,863
51,250 RenaissanceRe Holdings Ltd. (Bermuda) 2,269,863
Leisure 1.11% 1,467,100
17,000 International Game Technology* 1,467,100
Manufacturing 2.40% 3,181,013
46,115 Danaher Corp. 3,181,013
Media 5.81% 7,696,840
60,000 Cablevision Systems New York Group (Class A)*+ 1,345,200
41,000 Entercom Communications Corp.*+ 1,992,190
136,500 Radio One, Inc. (Class D)*+ 2,088,450
75,000 Univision Communications, Inc. (Class A)*+ 2,271,000
Medical 20.72% 27,439,426
32,000 Aetna, Inc. 1,593,600
24,000 Barr Laboratories, Inc.* 1,334,400
35,000 Biogen, Inc.*+ 1,329,650
68,800 Biomet, Inc. 2,095,648
32,000 Biovail Corp.* (Canada) 1,156,800
214,500 Caremark Rx, Inc.* 4,270,695
39,500 Cephalon, Inc. *+ 1,613,180
12,700 Forest Laboratories, Inc.* 656,844
75,000 Gilead Sciences, Inc.*+ 3,460,500
75,000 IDEC Pharmaceuticals Corp.* 2,456,250
60,000 King Pharmaceuticals, Inc.* 756,600
86,100 MedImmune, Inc.* 3,036,747
31,200 Stryker Corp.+ 2,090,712
34,000 Teva Pharmaceutical Industries Ltd.
American Depositary Receipts (Israel) 1,587,800
Metal 2.26% 2,993,705
564,850 Crown Holdings Inc.* 2,993,705
Oil & Gas 7.82% 10,351,855
83,500 BJ Services Co.*+ 3,048,585
39,000 Nabors Industries Ltd.* (Bermuda)+ 1,528,800
48,450 Patterson-UTI Energy, Inc.* 1,603,210
138,000 Pride International, Inc.* 2,141,760
99,000 Rowan Cos., Inc.* 2,029,500
Retail 9.51% 12,596,229
33,700 Bed Bath & Beyond, Inc.* 1,331,487
48,700 Best Buy Co., Inc.* 1,684,046
55,200 Fastenal Co.+ 1,909,368
108,600 Performance Food Group Co.*+ 3,809,688
90,000 Staples, Inc.* 1,713,600
83,000 Williams-Sonoma, Inc.* 2,148,040
Steel 1.48% 1,960,800
48,000 Nucor Corp. 1,960,800
Telecommunications 1.37% 1,806,993
83,000 UTStarcom, Inc.*+ 1,806,993
Textile 1.12% 1,488,042
34,200 Coach, Inc.* 1,488,042
Transportation 1.66% 2,200,100
70,000 JetBlue Airways Corp.*+ 2,200,100
INTEREST PAR VALUE
ISSUER, DESCRIPTION, MATURITY DATE RATE (000s OMITTED) VALUE
SHORT-TERM INVESTMENTS 37.78% $50,027,506
(Cost $50,027,506)
Joint Repurchase Agreement 7.24%
Investment in a joint repurchase agreement
transaction with State Street Bank & Trust
Co. -- Dated 04-30-03, due 05-01-03 (Secured by
U.S. Treasury Inflation Indexed Bond 3.875%
due 04-15-29, U.S. Treasury Inflation Indexed
Notes 3.375% due 01-15-07 and 3.000%
due 07-15-12) 1.280% $9,592 9,592,000
SHARES
Cash Equivalents 30.54%
AIM Cash Investment Trust ** 40,435,506 40,435,506
TOTAL INVESTMENTS 131.51% $174,128,913
OTHER ASSETS AND LIABILITIES, NET (31.51%) ($41,719,186)
TOTAL NET ASSETS 100.00% $132,409,727
* Non-income-producing security.
** Represents investment of security lending collateral.
+ All or a portion of this security is on loan as of April 30, 2003.
Parenthetical disclosure of a foreign country in the security
description represents country of a foreign issuer.
The percentage shown for each investment category is the total value
of that category as a percentage of the net assets of the Fund.
See notes to
financial statements.
FINANCIAL STATEMENTS
ASSETS AND
LIABILITIES
April 30, 2003
(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
offering price
per share.
ASSETS
Investments at value (cost $162,793,102)
including $39,642,653 of securities loaned $174,128,913
Cash 2
Receivable for investments sold 1,686,089
Receivable for shares sold 1,956
Dividends and interest receivable 31,165
Other assets 31,443
Total assets 175,879,568
LIABILITIES
Payable for investments purchased 2,757,373
Payable for shares repurchased 53,341
Payable for securities on loan 40,435,506
Payable to affiliates 122,014
Other payables and accrued expenses 101,607
Total liabilities 43,469,841
NET ASSETS
Capital paid-in 251,699,914
Accumulated net realized loss on investments (129,346,627)
Net unrealized appreciation of investments 11,335,811
Accumulated net investment loss (1,279,371)
Net assets $132,409,727
NET ASSET VALUE PER SHARE
Based on net asset values and shares outstanding
Class A ($85,829,191 [DIV] 12,739,154 shares) $6.74
Class B ($41,285,553 [DIV] 6,651,047 shares) $6.21
Class C ($2,586,784 [DIV] 416,615 shares) $6.21
Class I ($2,708,199 [DIV] 398,413 shares) $6.80
MAXIMUM OFFERING PRICE PER SHARE
Class A 1 ($6.74 [DIV] 95%) $7.09
Class C ($6.21 [DIV] 99%) $6.27
1 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.
OPERATIONS
For the period ended
April 30, 2003
(unaudited) 1
This Statement
of Operations
summarizes the
Fund's investment
income earned
and expenses
incurred in operat-
ing the Fund.
It also shows net
gains (losses) for
the period stated.
INVESTMENT INCOME
Dividends (net of foreign withholding taxes of $776) $172,265
Interest 34,804
Securities lending 28,349
Total investment income 235,418
EXPENSES
Investment management fee 521,238
Class A distribution and service fee 123,917
Class B distribution and service fee 206,768
Class C distribution and service fee 12,501
Class A, B and C transfer agent fee 486,183
Class I transfer agent fee 5,893
Registration and filing fee 43,509
Accounting and legal services fee 27,831
Printing 18,902
Auditing fee 17,474
Custodian fee 16,445
Trustees' fee 5,084
Miscellaneous 4,962
Interest expense 2,359
Legal fee 1,049
Total expenses 1,494,115
Net investment loss (1,258,697)
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized loss on investments (2,127,872)
Change in net unrealized appreciation (depreciation)
of investments 8,233,527
Net realized and unrealized gain 6,105,655
Increase in net assets from operations $4,846,958
1 Semiannual period from 11-1-02 through 4-30-03.
See notes to
financial statements.
CHANGES IN
NET ASSETS
This Statement
of Changes in
Net Assets
shows how the
value of the
Fund's net assets
has changed
since the end of
the previous
period. The dif-
ference reflects
earnings less
expenses, any
investment gains
and losses,
distributions, if
any, paid to
shareholders and
any increase or
decrease in
money share-
holders invested
in the Fund.
YEAR PERIOD
ENDED ENDED
10-31-02 4-30-03 1
INCREASE (DECREASE) IN NET ASSETS
From operations
Net investment loss ($3,202,072) ($1,258,697)
Net realized loss (24,492,579) (2,127,872)
Change in net unrealized
appreciation (depreciation) 791,079 8,233,527
Increase (decrease) in net assets
resulting from operations (26,903,572) 4,846,958
From Fund share transactions 25,804,343 (9,000,108)
NET ASSETS
Beginning of period 189,270,792 136,562,877
End of period 2 $136,562,877 $132,409,727
1 Semiannual period from 11-1-02 through 4-30-03. Unaudited.
2 Includes accumulated net investment loss of $20,674 and $1,279,371,
respectively.
See notes to
financial statements.
FINANCIAL
HIGHLIGHTS
CLASS A SHARES
The Financial Highlights show how the Fund's net asset value for a share
has changed since the end of the previous period.
PERIOD ENDED 10-31-98 10-31-99 10-31-00 10-31-01 10-31-02 4-30-03 1
PER SHARE OPERATING PERFORMANCE
Net asset value,
beginning of period $11.40 $9.11 $12.85 $16.03 $7.66 $6.47
Net investment loss 2 (0.09) (0.12) (0.17) (0.12) (0.11) (0.05)
Net realized and unrealized
gain (loss) on investments (0.89) 3.86 4.23 (7.48) (1.08) 0.32
Total from investment
operations (0.98) 3.74 4.06 (7.60) (1.19) 0.27
Less distributions
From net realized gain (1.31) -- (0.88) (0.77) -- --
Net asset value,
end of period $9.11 $12.85 $16.03 $7.66 $6.47 $6.74
Total return 3 (%) (9.40) 41.05 33.26 (49.87) (15.54) 4.17 4
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period
(in millions) $101 $112 $176 $85 $85 $86
Ratio of expenses
to average net assets (%) 1.59 1.60 1.46 1.63 1.89 2.07 5
Ratio of net investment loss
to average net assets (%) (0.86) (1.14) (1.08) (1.13) (1.52) (1.71) 5
Portfolio turnover (%) 168 153 146 211 267 6 121
See notes to
financial statements.
FINANCIAL
HIGHLIGHTS
CLASS B SHARES
PERIOD ENDED 10-31-98 10-31-99 10-31-00 10-31-01 10-31-02 4-30-03 1
PER SHARE OPERATING PERFORMANCE
Net asset value,
beginning of period $11.03 $8.72 $12.22 $15.08 $7.13 $5.98
Net investment loss 2 (0.15) (0.18) (0.27) (0.18) (0.16) (0.07)
Net realized and unrealized
gain (loss) on investments (0.85) 3.68 4.01 (7.00) (0.99) 0.30
Total from investment
operations (1.00) 3.50 3.74 (7.18) (1.15) 0.23
Less distributions
From net realized gain (1.31) -- (0.88) (0.77) -- --
Net asset value,
end of period $8.72 $12.22 $15.08 $7.13 $5.98 $6.21
Total return 3 (%) (9.97) 40.14 32.30 (50.24) (16.13) 3.85 4
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period
(in millions) $134 $146 $241 $101 $46 $41
Ratio of expenses to
average net assets (%) 2.27 2.23 2.16 2.33 2.56 2.75 5
Ratio of net investment loss
to average net assets (%) (1.54) (1.77) (1.78) (1.83) (2.20) (2.39) 5
Portfolio turnover (%) 168 153 146 211 267 6 121
See notes to
financial statements.
FINANCIAL
HIGHLIGHTS
CLASS C SHARES
PERIOD ENDED 10-31-98 7 10-31-99 10-31-00 10-31-01 10-31-02 6 4-30-03 1
PER SHARE OPERATING PERFORMANCE
Net asset value,
beginning of period $9.99 $8.72 $12.21 $15.07 $7.13 $5.99
Net investment loss 2 (0.06) (0.19) (0.27) (0.18) (0.16) (0.07)
Net realized and unrealized gain
(loss) on investments (1.21) 3.68 4.01 (6.99) (0.98) 0.29
Total from investment
operations (1.27) 3.49 3.74 (7.17) (1.14) 0.22
Less distributions
From net realized gain -- -- (0.88) (0.77) -- --
Net asset value,
end of period $8.72 $12.21 $15.07 $7.13 $5.99 $6.21
Total return 3 (%) 12.71 4 40.02 32.32 (50.21) (15.99) 3.67 4
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period
(in millions) -- 8 -- 8 $5 $3 $2 $3
Ratio of expenses to
average net assets (%) 2.29 5 2.30 2.16 2.33 2.58 2.77 5
Ratio of net investment loss
to average net assets (%) (1.66) 5 (1.82) (1.80) (1.83) (2.21) (2.41) 5
Portfolio turnover (%) 168 153 146 211 267 6 121
See notes to
financial statements.
FINANCIAL
HIGHLIGHTS
CLASS I SHARES
PERIOD ENDED 10-31-02 7 4-30-03 1
PER SHARE OPERATING PERFORMANCE
Net asset value,
beginning of period $8.16 $6.51
Net investment loss 2 (0.06) (0.03)
Net realized and unrealized
gain (loss) on investments (1.59) 0.32
Total from investment operations (1.65) 0.29
Net asset value,
end of period $6.51 $6.80
Total return 3 (%) (20.22) 4 4.45 4
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period
(in millions) $3 $3
Ratio of expenses to
average net assets (%) 1.46 5 1.44 5
Ratio of net investment loss
to average net assets (%) (1.00) 5 (1.07) 5
Portfolio turnover (%) 267 6 121
1 Semiannual period from 11-1-02 through 4-30-03. Unaudited.
2 Based on the average of the shares outstanding.
3 Assumes dividend reinvestment and does not reflect the effect of sales charges.
4 Not annualized.
5 Annualized.
6 Excludes merger activity.
7 Class C and Class I shares began operations on 6-1-98 and 3-1-02, respectively.
8 Less than $500,000.
See notes to
financial statements.
NOTES TO
STATEMENTS
Unaudited
NOTE A
Accounting policies
John Hancock Mid Cap Growth Fund (the "Fund") is a diversified series of
John Hancock Investment Trust III, an open-end management investment
company registered under the Investment Company Act of 1940. The
investment objective of the Fund is to achieve long-term capital
appreciation.
The Trustees have authorized the issuance of multiple classes of shares
of the Fund, designated as Class A, Class B, Class C and Class I shares.
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 Trustees, may be applied differently 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 bears distribution and service expenses under terms of a
distribution plan have exclusive voting rights to that distribution
plan.
Significant accounting policies of the Fund are as follows:
Valuation of investments
Securities in the Fund's portfolio are valued on the basis of market
quotations, valuations provided by independent pricing services or at
fair value as determined in good faith in accordance with procedures
approved by the Trustees. Short-term debt investments maturing within 60
days are valued at amortized cost, which approximates market value.
Investments in AIM Cash Investment Trust are valued at their net asset
value each business day.
Joint repurchase agreement
Pursuant to an exemptive order issued by the Securities and Exchange
Commission, the Fund, along with other registered investment companies
having a management contract with John Hancock Advisers, LLC (the
"Adviser"), a wholly owned subsidiary of The Berkeley Financial Group,
LLC, may participate in a joint repurchase agreement transaction.
Aggregate cash balances are invested in one or more large repurchase
agreements, whose underlying securities are obligations of the U.S.
government and/or its agencies. The Fund's custodian bank receives
delivery of the underlying securities for the joint account on the
Fund's behalf. The Adviser is responsible for ensuring that the
agreement is fully collateralized at all times.
Investment transactions
Investment transactions are recorded as of the date of purchase, sale or
maturity. Net realized gains and losses on sales of investments are
determined on the identified cost basis.
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 assets of the respective classes. Distri
bution and service fees, if any, and transfer agent fees for Class I
shares, are calculated daily at the class level based on the appropriate
net assets of each class and the specific expense rate(s) applicable to
each class.
Expenses
The majority of the expenses are directly identifiable to an individual
fund. Expenses that are not readily identifiable to a specific fund will
be allocated in such a manner as deemed equitable, taking into
consideration, among other things, the nature and type of expense and
the relative sizes of the funds.
Bank borrowings
The Fund is permitted to have bank borrowings for temporary or emergency
purposes, including the meeting of redemption requests that otherwise
might require the untimely disposition of securities. The Fund has
entered into a syndicated line of credit agreement with various banks.
This agreement enables the Fund to participate with other funds managed
by the Adviser in an unsecured line of credit with banks, which permits
borrowings of up to $250 million, collectively. Interest is charged to
each fund, based on its borrowing. In addition, a commitment fee is
charged to each fund based on the average daily unused portion of the
line of credit and is allocated among the participating funds. The Fund
had no borrowing activity under the line of credit during the period
ended April 30, 2003.
Securities lending
The Fund may lend securities to certain qualified brokers who pay the
Fund negotiated lender fees. The loans are collateralized at all times
with cash or securities with a market value at least equal to the market
value of the securities on loan. As with other extensions of credit, the
Fund may bear the risk of delay of the loaned securities in recovery or
even loss of rights in the collateral, should the borrower of the
securities fail financially. On April 30, 2003, the Fund loaned
securities having a market value of $39,642,653 collateralized by cash
in the amount of $40,435,506. The cash collateral was invested in a
short-term instrument.
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 has $127,218,756 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: October 31, 2008-
$2,538,691, October 31, 2009 -- $99,673,619 and October 31, 2010 --
$25,006,446.
Dividends, interest and distributions
Dividend income on investment securities is recorded on the ex-dividend
date or, in the case of some foreign securities, on the date thereafter
when the Fund identifies the dividend. Interest income on investment
securities is recorded on the accrual basis. Foreign income may be
subject to foreign withholding taxes, which are accrued as applicable.
The Fund records distributions to shareholders from net investment
income and net realized gains on the ex-dividend date. 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.
Use of estimates
The preparation of these financial statements, in accordance with
accounting principles generally accepted in the United States of
America, incorporates estimates made by management in determining the
reported amount of assets, liabilities, revenues and expenses of the
Fund. Actual results could differ from these estimates.
NOTE B
Management fee and transactions with affiliates and others
The Fund has an investment management contract with the Adviser. Under
the investment management contract, 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 average daily net asset
value, (b) 0.75% of the next $500,000,000 and (c) 0.70% of the Fund's
average daily net asset value in excess of $1,000,000,000.
The Fund has Distribution Plans with John Hancock Funds, LLC ("JH
Funds"), a wholly owned subsidiary of the Adviser. The Fund has adopted
Distribution Plans with respect to Class A, Class B and Class C pursuant
to Rule 12b-1 under the Investment Company Act of 1940 to reimburse JH
Funds for the services it provides as distributor of shares of the Fund.
Accordingly, the Fund makes monthly payments to JH Funds at an annual
rate not to exceed 0.30% of Class A average daily net assets and 1.00%
of Class B and Class C average daily net assets. A maximum of 0.25% of
such payments may be service fees as de fined by the Conduct Rules of
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.
Class A and Class C shares are assessed up-front sales charges. During
the period ended April 30, 2003, JH Funds received net up-front sales
charges of $39,363 with regard to sales of Class A shares. Of this
amount, $4,151 was retained and used for printing prospectuses,
advertising, sales literature and other purposes, $23,960 was paid as
sales commissions to unrelated broker-dealers and $11,252 was paid as
sales commissions to sales personnel of Signator Investors, Inc.
("Signator Investors"), a related broker-dealer. The Adviser's indirect
parent, John Hancock Life Insurance Company ("JHLICo"), is the indirect
sole shareholder of Signator Investors. During the period ended April
30, 2003, JH Funds received net up-front sales charges of $3,805 with
regard to sales of Class C shares. Of this amount, $3,425 was paid as
sales commissions to unrelated broker-dealers and $380 was paid as sales
commissions to sales personnel of Signator Investors.
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 JH Funds
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 April 30, 2003,
CDSCs received by JH Funds amounted to $43,438 for Class B shares and
$133 for Class C shares.
The Fund has a transfer agent agreement with John Hancock Signature
Services, Inc., an indirect subsidiary of JHLICo. For Class A, B and C
shares, the Fund pays a monthly transfer agent fee at an annual rate of
0.05% of the 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. For Class I shares, the Fund pays
a monthly transfer agent fee at an an nual rate of 0.05% of the average
daily net asset value, plus certain out-of-pocket expenses attributable
to Class I shares.
The Fund has an agreement with the Adviser to perform necessary tax,
accounting and legal services for the Fund. The compensation for the
period was at an annual rate of approximately 0.04% of the average net
assets of the Fund.
Ms. Maureen R. Ford and Mr. John M. DeCiccio are directors and/or
officers of the Adviser and/or its affiliates, as well as Trustees of
the Fund. The compensation of unaffiliated Trustees is borne by the
Fund. The unaffiliated Trustees may elect to defer for tax purposes
their receipt of this compensation under the John Hancock Group of Funds
Deferred Compensation Plan. The Fund makes investments into other
John Hancock funds, as applicable, to cover its liability for the
deferred compensation. Investments to cover the Fund's deferred
compensation liability are recorded on the Fund's books as an other
asset. The deferred compensation liability and the related other asset
are always equal and are marked to market on a periodic basis to reflect
any income earned by the investments as well as any unrealized gains or
losses. The Deferred Compensation Plan investments had no impact on the
operations of the Fund.
NOTE C
Fund share transactions
This listing illustrates the number of Fund shares sold, issued in
reorganization and repurchased during the last two periods, along with
the corresponding dollar value. The Fund has an unlimited number of
shares authorized with no par value.
YEAR ENDED 10-31-02 PERIOD ENDED 4-30-03 1
SHARES AMOUNT SHARES AMOUNT
CLASS A SHARES
Sold 6,779,923 $53,607,931 1,162,602 $7,440,085
Repurchased (4,712,845) (36,297,979) (1,580,633) (10,043,728)
Net increase (decrease) 2,067,078 $17,309,952 (418,031) ($2,603,643)
CLASS B SHARES
Sold 951,215 $6,872,300 341,880 $2,040,988
Repurchased (7,448,783) (53,300,949) (1,384,565) (8,191,150)
Net decrease (6,497,568) ($46,428,649) (1,042,685) ($6,150,162)
CLASS C SHARES
Sold 138,670 $1,002,856 74,293 $448,778
Repurchased (170,318) (1,164,263) (68,236) (404,853)
Net increase (decrease) (31,648) ($161,407) 6,057 $43,925
CLASS I SHARES 2
Sold 41,324 $272,525 103,999 $671,467
Issued in reorganization 533,703 4,100,229 -- --
Repurchased (131,455) (896,993) (149,158) (961,695)
Net increase (decrease) 443,572 $3,475,761 (45,159) ($290,228)
NET DECREASE (4,018,566) ($25,804,343) (1,499,818) ($9,000,108)
1 Semiannual period from 11-1-02 through 4-30-03. Unaudited.
2 Class I shares began operations on 3-1-02.
NOTE D
Investment transactions
Purchases and proceeds from sales or maturities of securities, other
than short-term securities and obli gations of the U.S. government,
during the period ended April 30, 2003, aggregated $154,662,812 and
$174,067,908, respectively.
The cost of investments owned on April 30, 2003, including short-term
investments, for federal income tax purposes was $162,793,102. Gross
unrealized appreciation and depreciation of investments aggregated
$13,096,391 and $1,760,580, respectively, resulting in net unrealized
appreciation of $11,335,811. The difference between book basis and tax
basis net unrealized appreciation of investments is attributable
primarily to the tax deferral of losses on wash sales.
NOTE E
Reorganization
On May 29, 2002, the shareholders of the John Hancock Medium
Capitalization Growth Fund ("Medium Capitalization Growth Fund")
approved an Agreement and Plan of Reorganization, which provided for the
transfer of substantially all of the assets and liabilities of the
Medium Capitalization Growth Fund in exchange solely for Class I shares
of the Fund. The acquisition was accounted for as a tax-free exchange of
533,703 Class I shares of the Fund for the net assets of the Medium
Capitalization Growth Fund, which amounted to $4,100,229, including
$120,950 of unrealized appreciation, after the close of business on June
7, 2002.
OUR FAMILY
OF FUNDS
- -------------------------------------------------------
Equity Balanced Fund
Classic Value Fund
Core Equity Fund
Focused Equity Fund
Growth Trends Fund
Large Cap Equity Fund
Large Cap Growth Fund
Large Cap Spectrum Fund
Mid Cap Growth Fund
Multi Cap Growth Fund
Small Cap Equity Fund
Small Cap Growth Fund
Sovereign Investors Fund
U.S. Global Leaders Growth Fund
- -------------------------------------------------------
Sector Biotechnology Fund
Financial Industries Fund
Health Sciences Fund
Real Estate Fund
Regional Bank Fund
Technology Fund
- -------------------------------------------------------
Income Bond Fund
Government Income Fund
High Income Fund
High Yield Bond Fund
Investment Grade Bond Fund
Strategic Income Fund
- -------------------------------------------------------
International International Fund
Pacific Basin Equities Fund
- -------------------------------------------------------
Tax-Free Income California Tax-Free Income Fund
High Yield Municipal Bond Fund
Massachusetts Tax-Free Income Fund
New York Tax-Free Income Fund
Tax-Free Bond Fund
- -------------------------------------------------------
Money Market Money Market Fund
U.S. Government Cash Reserve
For more complete information on any John Hancock Fund
and a prospectus, which includes charges and expenses,
call your financial professional, or John Hancock Funds at
1-800-225-5291. Please read the prospectus carefully before
investing or sending money.
FOR YOUR
INFORMATION
TRUSTEES
Dennis S. Aronowitz
Richard P. Chapman, Jr.
William J. Cosgrove
John M. DeCiccio
Richard A. Farrell
Maureen R. Ford
William F. Glavin*
Dr. John A. Moore*
Patti McGill Peterson*
John W. Pratt
*Members of the Audit Committee
OFFICERS
Maureen R. Ford
Chairman, President
and Chief Executive Officer
William L. Braman
Executive Vice President
and Chief Investment Officer
Richard A. Brown
Senior Vice President
and Chief Financial Officer
Susan S. Newton
Senior Vice President
and Secretary
William H. King
Vice President and Treasurer
Thomas H. Connors
Vice President and
Compliance Officer
INVESTMENT ADVISER
John Hancock Advisers, LLC
101 Huntington Avenue
Boston, Massachusetts 02199-7603
PRINCIPAL DISTRIBUTOR
John Hancock Funds, LLC
101 Huntington Avenue
Boston, Massachusetts 02199-7603
CUSTODIAN
The Bank of New York
One Wall Street
New York, New York 10286
TRANSFER AGENT
John Hancock Signature Services, Inc.
1 John Hancock Way, Suite 1000
Boston, Massachusetts 02217-1000
LEGAL COUNSEL
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109-1803
HOW TO
CONTACT US
On the Internet www.jhfunds.com
By regular mail John Hancock Signature Services, Inc.
1 John Hancock Way, Suite 1000
Boston, MA 02217-1000
By express mail John Hancock Signature Services, Inc.
Attn: Mutual Fund Image Operations
529 Main Street
Charlestown, MA 02129
Customer service representatives 1-800-225-5291
24-hour automated information 1-800-338-8080
TDD line 1-800-554-6713
[A 1 1/2" x 1/2" John Hancock (Signature) logo in upper left hand corner.
A tag line below reads "JOHN HANCOCK FUNDS."]
1-800-225-5291
1-800-554-6713 (TDD)
1-800-338-8080 EASI-Line
www.jhfunds.com
Now available: electronic delivery
www.jhancock.com/funds/edelivery
This report is for the information of
the shareholders of the John Hancock
Mid Cap Growth Fund.
390SA 4/03
6/03
John Hancock
International
Fund
SEMI
ANNUAL
REPORT
4.30.03
Sign up for electronic delivery at
www.jhancock.com/funds/edelivery
[A 2" x 1" John Hancock (Signature)/John Hancock Funds logo in lower,
center middle of page. A tag line below reads "JOHN HANCOCK FUNDS."]
[A photo of Maureen R. Ford, Chairman and Chief Executive Officer,
flush left next to first paragraph.]
WELCOME
Table of contents
Your fund at a glance
page 1
Managers' report
page 2
A look at performance
page 6
Growth of $10,000
page 7
Fund's investments
page 8
Financial statements
page 14
For your information
page 29
Dear Fellow Shareholders,
After a strong start to 2003, the stock market succumbed to the
pressures of a weak economy, rising oil prices, concerns about corporate
earnings and uncertainties about the war in Iraq. The tide turned in
April, when the war ended and first-quarter corporate earnings came in
better than expected. As a result, the major indexes all gained some
ground year to date through April 30, 2003, with the Dow Jones
Industrial Average returning 2.50%, the Standard & Poor's 500 Index
returning 4.82% and the tech-heavy Nasdaq Composite Index up 9.64%.
Bonds, which have outperformed stocks for the last three years,
continued their upward trend this year, as investors still sought their
relative safety.
After the jarring stock market losses of the last three years, it's a
relief for investors to be reminded that the market is indeed cyclical,
and does eventually move up -- not just down. But while the stock market
has been clawing its way back, the ride has been extremely volatile.
Uncertainty still abounds about the strength of the economy,
geopolitical issues, corporate governance problems, rising unemployment
and the sustainability of corporate earnings growth. And despite rallies
late last year and in April, many investors are still so bruised and
skeptical that they have remained on the sidelines. Even though the
statistics suggest we might be emerging from this long, difficult bear
market, we're not quite ready to call it history.
While no one can predict when this bear market cycle will turn,
investors can take charge of how they maneuver through such uncertain
times. First, take a look at how your portfolio is allocated among
stocks, bonds and cash to make sure it's in the proper balance. Work
with your investment professional, who knows your long-term goals and
can help keep you on the right track, rather than being lured by today's
stars, which could wind up tomorrow's laggards. And as always, keep a
long-term investment horizon. We believe this offers the best way for
you to survive the tough times and reach your investment objectives.
Sincerely,
/S/ MAUREEN R. FORD
Maureen R. Ford,
Chairman and Chief Executive Officer
This commentary reflects the chairman's views as of April 30, 2003. They
are subject to change at any time.
YOUR FUND
AT A GLANCE
The Fund seeks
long-term growth
of capital by
investing primarily
in stocks of foreign
companies.
Over the last six months
* The buildup to the U.S.-led war against Iraq created uncertainty and
unsettled the international stock markets.
* Global economic growth remained sluggish.
* Growth stocks appeared to be coming back into favor.
[Bar chart with heading "John Hancock International Fund." Under the
heading is a note that reads "Fund performance for the six months ended
April 30, 2003." The chart is scaled in increments of 1% with -1% at the
bottom and 1% at the top. The first bar represents the 0.00% total
return for Class A. The second bar represents the -0.62% total return
for Class B. The third bar represents the -0.62% total return for Class
C. The fourth bar represents the 0.59% total return for Class I. A note
below the chart reads "Total returns for the Fund are at net asset value
with all distributions reinvested."]
Top 10 holdings
2.2% Royal Bank of Scotland Group Plc
2.0% Vodafone Group Plc
1.8% Teva Pharmaceutical Industries Ltd.
1.8% GlaxoSmithKline Plc
1.7% Australia & New Zealand Banking Group Ltd.
1.6% ING Groep NV
1.5% Credit Suisse Group
1.5% Gallaher Group Plc
1.5% Diageo Plc
1.4% Novartis AG
As a percentage of net assets on April 30, 2003.
BY LORETTA MORRIS FOR THE NICHOLAS-APPLEGATE CAPITAL MANAGEMENT
PORTFOLIO MANAGEMENT TEAM
John Hancock
International Fund
MANAGERS'
REPORT
Upon shareholder approval, John Hancock Global Fund and John Hancock
European Equity Fund were merged into John Hancock International Fund at
the close of business on May 9, 2003.
The international stock markets endured yet another challenging period
during the six months ended April 30, 2003. Sluggish economic growth
worldwide, the specter of war in Iraq and deteriorating conditions in
the German and Japanese financial systems dampened investor sentiment.
Despite these issues, international equities held up remarkably well.
"The international
stock markets
endured yet another
challenging period..."
The international equity market became sharply oversold in the third
quarter and into the fourth quarter of 2002, with investor sentiment
dampened by anemic growth rates, pessimism over financial services
companies (particularly in Germany), the overhang of the Iraq situation
and terrorism, and debt downgrades from credit-rating agencies. Then, in
early October, international equities rallied sharply as many
beaten-down stocks rebounded. In December, international stocks
retreated somewhat as concerns arose that per-share earnings estimates
remained high.
The year opened with a steady drumbeat of news surrounding the prospect
of U.S.-led military action in Iraq. The international stock markets
came under pressure in the first quarter of 2003 as a combination of war
worries and weak economic data spurred a sell-off in equities. A
snap-back in late March erased almost all of January and February's
losses. In April, the international stock markets staged a strong rally
as the situation in Iraq appeared to be nearing resolution, energy
prices moderated and earnings -- although still weak -- came in slightly
better than anticipated.
FUND PERFORMANCE EXPLAINED
For the six months ended April 30, 2003, the Fund's Class A, Class B,
Class C and Class I shares posted total returns of 0.00%, -0.62%,
- -0.62% and 0.59%, respectively, at net asset value. During the same
period, the average international fund returned 0.92%, according to
Lipper, Inc.1, while the benchmark MSCI All-Country World Free Ex-U.S.
Index advanced 3.08%. Keep in mind that your net asset value return will
be different from the Fund's performance if you were not invested in the
Fund for the entire period and did not reinvest all distributions. See
pages six and seven for historical performance information.
The portfolio's underperformance relative to both peers and the
benchmark is attributable to disappointing stock selection in the
consumer durables sector and underweight holdings in financial services
companies, which had been under pressure but snapped back late in the
period. Specifically, the portfolio's holdings in money center banks and
companies classified as "other financial" lagged their counterparts in
the benchmark. By country, stock selection in Japan and Australia
negatively influenced performance.
"Integrated oil companies
and food chains in the
Fund performed especially
well..."
On the positive side, both relative and absolute portfolio returns were
driven by strong stock selection and slightly overweight holdings in the
retail trade, technology and energy sectors. Integrated oil companies
and food chains in the Fund performed especially well on a relative
basis, as did industrial engineering holdings on an absolute basis.
Holdings in France and Germany -- where many hard-hit financial services
firms that staged a late-period recovery are domiciled -- contributed to
relative returns, as did Brazilian stocks. Brazil's stock market surged
more than 40% on positive signs of reform from its recently elected
leadership.
[Table at top left-hand side of page entitled "Top five industry
groups." The first listing is Banks-Foreign 18%, the second is
Telecommunications 13%, the third Oil & gas 10%, the fourth Medical 8%,
and the fifth Utilities 7%.]
Gainers included Ryanair, an Irish discount airline that benefited from
increased market share; Teva Pharmaceutical, a generic drug maker based
in Israel that advanced on steady demand and firming prices; and Royal
Bank of Scotland, which gained due to solid organic growth, cost control
and its diversity of brands and businesses. Decliners included a number
of Japanese companies, such as Nomura Securities, Mitsubishi Tokyo and
Sony, all of which traded lower on concerns over the state of Japan's
overall economy.
[Bar chart at middle of page with heading "Top countries As a
percentage of net assets on 4-30-03." The chart is divided into
five sections: United Kingdom 23%, Japan 13%, Netherlands 6%,
Switzerland 5% and Canada 5%.]
FUND MOVES
During the period, as a result of our bottom-up assessment of individual
stocks' appreciation potential, assets were shifted out of Italy and
Japan in favor of opportunities identified in the United Kingdom and the
Netherlands. By sector, we increased our weighting in financial services
stocks as a result of their improved outlook, and reduced exposure to
the energy, producers/manufacturing and consumer durables sectors.
At period's end, relative to its benchmark, the Fund was overweight
stocks in the transportation and utilities sector and underweight
producers/manufacturing and consumer durables stocks. By country,
overweights included Ireland and Brazil while underweights included
France and Japan.
[Table at top of page entitled "SCORECARD." The header for the left
column is "INVESTMENT" and the header for the right column is "PERIOD'S
PERFORMANCE...AND WHAT'S BEHIND THE NUMBERS." The first listing is
Ryanair followed by an up arrow with the phrase "Surging passenger load
amid cutbacks by long-haul carriers." The second listing is Corus Group
followed by a down arrow with the phrase "Failed to sell aluminum unit;
carbon steel unit is losing money." The third listing is Credit Suisse
Group followed by an up arrow with the phrase "Bounced back from an
oversold condition."]
OUTLOOK
Overall, our outlook is becoming more positive. First-quarter corporate
earnings were better than expected, but against lowered expectations;
the overhang of Iraq has been removed; and developed economies appear to
be strengthening somewhat. We believe that, absent an extraordinary
event, we are in a bottoming process. In Asia, we continue to monitor
the SARS outbreak closely, but believe aggressive action by health
ministers and the World Health Organization seems to be impeding its
spread.
"Overall, our outlook is
becoming more positive."
A more selective environment focusing on fundamental strength bodes well
for our style, which is predicated on identifying companies that are
benefiting from positive, sustainable change and investing in them just
as the market is recognizing strength. Currently, we are looking closely
for stocks that will benefit over the intermediate term and continue to
strengthen when higher-growth stocks come back into favor.
As we look forward, we believe better times lie ahead for the
international equity markets. We appreciate your patience and com-
mend you for staying the course throughout this difficult period.
This commentary reflects the views of the portfolio management team
through the end of the Fund's period discussed in this report. The
team's statements reflect their own opinions. As such, they are in no
way guarantees of future events, and are not intended to be used as
investment advice or a recommendation regarding any specific security.
They are also subject to change at any time as market and other
conditions warrant.
International investing involves special risks such as political,
economic and currency risks and differences in accounting standards and
financial reporting.
1 Figures from Lipper, Inc. include reinvested dividends and do not take
into account sales charges. Actual load-adjusted performance is lower.
A LOOK AT
PERFORMANCE
For the period ended
April 30, 2003
The index used for
comparison is the
Morgan Stanley
Capital International
(MSCI) All Country
World Free Ex-U.S.
Index, an unmanaged
index of freely
traded stocks of
foreign companies.
It is not possible to
invest in an index.
Class A Class B Class C Class I 1 Index
Inception date 1-3-94 1-3-94 6-1-98 3-1-02 --
Average annual returns with maximum sales charge (POP)
One year -24.22% -24.82% -22.42% -19.53% -15.23%
Five years -12.31% -12.39% -- -- -4.95%
Since inception -5.25% -5.42% -12.21% -14.49% --
Cumulative total returns with maximum sales charge (POP)
Six months -5.03% -5.59% -2.63% 0.59% 3.08%
One year -24.22% -24.82% -22.42% -19.53% -15.23%
Five years -48.15% -48.38% -- -- -22.40%
Since inception -39.53% -40.49% -47.26% -16.67% --
Performance figures assume all distributions are reinvested. Returns
with maximum sales charge reflect a sales charge on Class A shares of 5%
and Class C shares of 1%, and the applicable contingent deferred sales
charge (CDSC) on Class B and Class C shares. The Class B shares' CDSC
declines annually between years 1-6 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 return
and principal value of an investment in the Fund will fluctuate, so that
shares, when redeemed, may be worth more or less than the original cost.
Index figures do not reflect sales charges and would be lower if they
did.
The returns reflect past results and should not be considered indicative
of future performance. 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. These reductions can be terminated in the
future. See the prospectus for details.
1 For certain types of investors as described in the Fund's prospectus
for Class I shares.
GROWTH OF
$10,000
This chart shows what happened to a hypothetical $10,000 investment in
Class A shares for the period indicated. For comparison, we've shown the
same investment in the MSCI All Country World Free Ex-U.S. Index.
Line chart with the heading "GROWTH OF $10,000." Within the chart are
three lines. The first line represents the Index and is equal to $11,336
as of April 30, 2003. The second line represents the value of the
hypothetical $10,000 investment made in the John Hancock International
Fund, before sales charge, and is equal to $6,367 as of April 30, 2003.
The third line represents the value of the same hypothetical investment
made in the John Hancock International Fund, after sales charge, and is
equal to $6,047 as of April 30, 2003.
Class B 1 Class C 1 Class I 2
Period beginning 1-3-94 6-1-98 3-1-02
Without sales charge $5,951 $5,325 $8,333
With maximum sales charge -- $5,272 --
Index $11,336 $7,903 $8,996
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 and Class I shares, respectively, as of April 30, 2003.
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.
1 No contingent deferred sales charge applicable.
2 For certain types of investors as described in the Fund's prospectus
for Class I shares.
FINANCIAL STATEMENTS
FUND'S
INVESTMENTS
Securities owned
by the Fund on
April 30, 2003
(unaudited)
This schedule is divided into five main categories: common stocks,
preferred stocks, options, rights and short-term investments. Common
stocks, preferred stocks, options and rights are further broken down by
country. Short-term investments, which represent the Fund's cash
position, are listed last.
SHARES ISSUER VALUE
COMMON STOCKS 95.08% $10,344,064
(Cost $9,727,491)
Australia 3.94% 428,700
15,700 Australia & New Zealand Banking Group Ltd.
(Banks -- Foreign) 183,165
20,000 Foster's Group Ltd. (Beverages) 56,049
15,000 News Corp., Ltd. (The) (Media) 106,782
10,233 Woolworths Ltd. (Retail) 82,704
Belgium 1.03% 111,600
5,000 Interbrew SA (Beverages) 111,600
Bermuda 0.32% 35,280
900 Nabors Industries Ltd.* (Oil & Gas) 35,280
Brazil 2.55% 276,827
2,300 Aracruz Celulose SA American Depositary
Receipts (ADR) (Paper & Paper Products) 48,300
3,900 Companhia de Bebidas das Americas (ADR) (Beverages) 77,571
2,600 Petroleo Brasileiro SA (ADR) (Oil & Gas) 44,486
6,300 Tele Norte Leste Participacoes SA (ADR) (Telecommunications) 68,355
2,100 Uniao de Bancos Brasileiros SA (ADR) (Banks -- Foreign) 38,115
Canada 5.20% 565,216
1,300 Biovail Corp.* (Medical) 46,995
2,100 Canadian National Railway Co. (Transportation) 102,123
1,800 Loblaw Cos., Ltd. (Retail) 70,263
1,500 Petro-Canada (Oil & Gas) 49,425
4,300 Placer Dome, Inc. (Metal) 42,527
3,000 Shoppers Drug Mart Corp.* (Retail) 49,874
3,800 Suncor Energy, Inc. (Oil & Gas) 62,486
1,600 Talisman Energy, Inc. (Oil & Gas) 63,824
1,900 Telus Corp. (Telecommunications) 27,680
3,718 Telus Corp. (Non-Voting Shares) (Telecommunications) 50,019
China 1.09% 118,374
454,000 China Telecom Corp., Ltd. (H Shares)
(Telecommunications) 86,736
94,000 Jiangsu Expressway Co., Ltd. (H Shares) (Transportation) 31,638
Denmark 0.46% 49,755
2,000 TDC AS (Telecommunications) 49,755
Finland 1.47% 159,978
2,600 Nokia Oyj (ADR) (Telecommunications) 43,988
7,000 Nokia Oyj (Telecommunications) 115,990
France 3.72% 404,740
7,500 Alcatel SA (Telecommunications) 61,436
2,600 BNP Paribas SA (Banks -- Foreign) 122,041
1,900 France Telecom SA (Telecommunications) 43,892
700 Michelin (CGDE) (B Shares) (Rubber -- Tires & Misc.) 25,897
5,000 Suez SA (Pollution Control) 81,412
4,300 Vivendi Universal SA (Media) 70,062
Germany 3.78% 411,639
1,700 BASF AG (Chemicals) 75,224
5,100 Deutsche Telekom AG (Telecommunications) 68,185
2,100 E.ON AG (Utilities) 99,603
800 Muenchener Rueckversicherungs-Gesellschaft AG
(Insurance) 79,637
1,800 Siemens AG (Diversified Operations) 88,990
Hong Kong 1.91% 208,217
10,000 Cheung Kong (Holdings) Ltd. (Real Estate Operations) 55,442
20,000 CLP Holdings Ltd. (Utilities) 81,805
54,000 CNOOC Ltd. (Oil & Gas) 70,970
Hungary 0.67% 73,005
6,800 OTP Bank Rt. (Banks -- Foreign) 73,005
Ireland 2.20% 239,393
7,000 Allied Irish Banks Plc (Banks -- Foreign) 107,415
10,800 Bank of Ireland (Banks -- Foreign) 131,978
Israel 1.80% 196,140
4,200 Teva Pharmaceutical Industries Ltd. (ADR) (Medical) 196,140
Italy 3.42% 372,279
7,300 ENI SpA (Oil & Gas) 104,034
6,300 Mediaset SpA (Media) 53,856
29,800 Snam Rete Gas SpA (Utilities) 108,084
24,300 UniCredito Italiano SpA (Banks -- Foreign) 106,305
Japan 12.55% 1,365,343
11,000 Asahi Glass Co., Ltd. (Building) 58,569
2,000 CANON, Inc. (Office) 80,832
10,000 Dai Nippon Printing Co., Ltd. (Printing -- Commercial) 97,099
16 East Japan Railway Co. (Transportation) 72,447
1,900 Fanuc Ltd. (Electronics) 77,746
1,500 Hoya Corp. (Electronics) 88,672
30 Japan Telecom Holdings Co., Ltd. (Telecommunications) 82,006
4,000 Kao Corp. (Cosmetics & Personal Care) 72,950
30 KDDI Corp. (Telecommunications) 91,062
550 Keyence Corp. (Electronics) 88,408
11 Millea Holdings, Inc.* (Insurance) 71,390
19 Mitsubishi Tokyo Financial Group, Inc. (Banks -- Foreign) 64,364
3,000 Shin-Etsu Chemical Co., Ltd. (Chemicals) 89,804
2,500 Takeda Chemical Industries Ltd. (Medical) 91,607
3,200 Tokyo Electric Power Co., Inc. (Utilities) 64,934
22,000 Tokyo Gas Co., Ltd. (Utilities) 71,575
4,500 Toyota Motor Corp. (Automobiles/Trucks) 101,878
Netherlands 5.81% 632,381
7,500 Aegon NV (Insurance) 76,250
6,500 ASML Holding NV (NY Reg Shares)* (Electronics) 57,265
10,700 ING Groep NV (Insurance) 173,744
2,700 Royal Dutch Petroleum Co. (Oil & Gas) 110,433
7,300 TPG NV (Transportation) 113,892
1,600 Unilever NV (Food) 100,797
Norway 0.54% 58,690
7,400 Statoil ASA (Oil & Gas) 58,690
Russia 1.05% 114,606
900 LUKOIL (ADR) (Oil & Gas) 61,956
300 YUKOS (ADR) (Oil & Gas) 52,650
Singapore 0.68% 74,341
8,000 Singapore Press Holdings Ltd. (Media) 74,341
South Korea 3.42% 371,905
2,700 Korea Electric Power Corp. (Utilities) 45,444
2,850 LG Electronics, Inc. (Electronics) 98,284
800 Samsung Electronics Ltd.* Global Depositary Receipt
(GDR) (Electronics) (R) 100,411
2,000 SK Telecom Co., Ltd. (ADR) (Telecommunications) 30,400
700 SK Telecom Co., Ltd. (Telecommunications) 97,366
Spain 3.33% 361,852
1,400 Banco Popular Espanol SA (Banks -- Foreign) 67,870
9,000 Endesa SA (Utilities) 127,659
2,900 Repsol YPF, SA (Oil & Gas) 42,235
11,220 Telefonica SA* (Telecommunications) 124,088
Sweden 2.86% 311,160
5,900 Hennes & Mauritz AB (B Shares) (Retail) 131,276
13,400 Skandinaviska Enskilda Banken AB (A Shares)
(Banks -- Foreign) 139,247
1,200 Svenska Cellulosa AB (B Shares) (Paper & Paper Products) 40,637
Switzerland 5.31% 577,953
1,200 Converium Holding AG* (Insurance) 54,192
7,000 Credit Suisse Group (Banks -- Foreign) 167,220
3,932 Novartis AG (Medical) 155,100
1,600 Roche Holding AG (Medical) 101,806
2,100 UBS AG (Banks -- Foreign) 99,635
Taiwan 1.14% 124,236
59,000 Nanya Technology Corp.* (Electronics) 32,166
Taiwan Semiconductor Manufacturing Co., Ltd.*
11,000 (ADR) (Electronics) 92,070
United Kingdom 22.85% 2,485,493
3,000 AstraZeneca Plc (Medical) 117,712
400 Barclays Plc (ADR) (Banks -- Foreign) 11,208
20,858 Barclays Plc (Banks -- Foreign) 144,097
17,963 BHP Billiton Plc (Metal) 91,871
18,700 BP Plc (Oil & Gas) 118,504
11,100 British Sky Broadcasting Group Plc* (Media) 115,048
14,400 Diageo Plc (Beverages) 159,724
16,900 Gallaher Group Plc (Tobacco) 160,038
9,500 GlaxoSmithKline Plc (Medical) 190,401
10,600 HBOS Plc (Banks -- Foreign) 124,182
6,779 InterContinental Hotels Group Plc* (Leisure) 41,171
20,000 Kingfisher Plc (Retail) 78,155
14,900 Lloyds TSB Group Plc (Banks -- Foreign) 97,995
7,800 Man Group Plc (Finance) 131,521
6,779 Mitchells & Butler Plc* (Retail) 22,969
101,000 mm02 Plc* (Telecommunications) 89,994
16,500 National Grid Transco Plc (Utilities) 108,386
3,400 Reckitt Benckiser Plc (Soap & Cleaning Preparations) 59,965
9,122 Royal Bank of Scotland Group Plc (Banks -- Foreign) 239,247
28,100 Tesco Plc (Retail) 88,924
3,700 Vodafone Group Plc (ADR) (Telecommunications) 73,112
112,100 Vodafone Group Plc (Telecommunications) 221,269
United States 1.98% 214,961
2,400 GlobalSantaFe Corp. (Oil & Gas) 50,784
2,300 Noble Corp.* (Oil & Gas) 71,185
1,400 Schlumberger Ltd. (Oil & Gas) 58,702
1,800 Transocean, Inc.* (Oil & Gas) 34,290
OPTIONS 0.57% $61,570
(Cost $57,232)
Ireland 0.57% 61,570
9,000 Ryanair Holdings Plc (Transportation)
Zero Strike Call Expiration 2-27-04 61,570
PREFERRED STOCKS 0.83% $89,931
(Cost $91,758)
Germany 0.67% 72,763
200 Porsche AG (Automobiles/Trucks) 72,763
Japan 0.16% 17,168
3,000,000 SMFG Finance Ltd. (Banks -- Foreign) (R) 17,168
RIGHTS 0.05% 5,531
(Cost $0)
Netherlands 0.05% 5,531
13,600 Aegon NV* (Insurance) 5,531
INTEREST PAR VALUE
ISSUER, DESCRIPTION, MATURITY DATE RATE (000s OMITTED) VALUE
SHORT-TERM INVESTMENTS 4.08% $444,000
(Cost $444,000)
Joint Repurchase Agreement 4.08%
Investment in a joint repurchase agreement transaction
with State Street Bank & Trust Co. -- Dated 04-30-03,
due 05-01-03 (Secured by U.S. Treasury Inflation Indexed
Bond, 3.875% due 04-15-29 and U.S. Treasury Inflation
Indexed Notes, 3.000% thru 3.875%, due 01-15-07
thru 07-15-12) 1.280% $444 444,000
TOTAL INVESTMENTS 100.61% $10,945,096
OTHER ASSETS & LIABILITIES, NET (0.61%) ($66,175)
TOTAL NET ASSETS 100.00% $10,878,921
* Non-income-producing security.
(R) These securities are exempt from registration under rule 144A of the
Securities Act of 1933. Such securities may be resold, normally to
qualified institutional buyers, in transactions exempt from
registration. Rule 144A securities amounted to $117,579 or 1.08% of net
assets as of April 30, 2003.
The percentage shown for each investment category is the total value
of that category as a percentage of the net assets of the Fund.
See notes to
financial statements.
PORTFOLIO
CONCENTRATION
April 30, 2003
(unaudited)
This table shows
the percentages
of the Fund's
investments
aggregated
by various
industry groups.
VALUE AS A PERCENTAGE
INVESTMENT DISTRIBUTION OF NET ASSETS
Automobiles/Trucks 1.60%
Banks -- Foreign 17.78
Beverages 3.72
Building 0.54
Chemicals 1.52
Cosmetics & Personal Care 0.67
Diversified Operations 0.82
Electronics 5.84
Finance 1.21
Food 0.93
Insurance 4.23
Leisure 0.38
Media 3.86
Medical 8.27
Metal 1.24
Office 0.74
Oil & Gas 10.02
Paper & Paper Products 0.82
Pollution Control 0.75
Printing -- Commercial 0.89
Real Estate Operations 0.51
Retail 4.82
Rubber -- Tires & Misc. 0.24
Short-Term Investments 4.08
Soap & Cleaning Preparations 0.55
Telecommunications 13.10
Tobacco 1.47
Transportation 3.51
Utilities 6.50
Total investments 100.61%
See notes to
financial statements.
FINANCIAL STATEMENTS
ASSETS AND
LIABILITIES
April 30, 2003
(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
offering price
per share.
ASSETS
Investments at value (cost $10,320,481) $10,945,096
Cash 783
Foreign cash at value (cost $19,628) 19,628
Receivable for investments sold 496,829
Receivable for shares sold 30,412
Dividends and interest receivable 69,769
Other assets 2,243
Total assets 11,564,760
LIABILITIES
Payable for investments purchased 593,909
Payable for shares repurchased 4,797
Payable to affiliates 14,299
Other payables and accrued expenses 72,834
Total liabilities 685,839
NET ASSETS
Capital paid-in 25,485,530
Accumulated net realized loss on investments and
foreign currency transactions (15,163,284)
Net unrealized appreciation of investments and
translation of assets and liabilities in foreign currencies 625,761
Accumulated net investment loss (69,086)
Net assets $10,878,921
NET ASSET VALUE PER SHARE
Based on net asset values and shares outstanding
Class A ($5,193,899 [DIV] 1,018,621 shares) $5.10
Class B ($3,955,911 [DIV] 827,019 shares) $4.78
Class C ($847,707 [DIV] 177,160 shares) $4.78
Class I ($881,404 [DIV] 171,282 shares) $5.15
MAXIMUM OFFERING PRICE PER SHARE
Class A 1 ($5.10 [DIV] 95%) $5.37
Class C ($4.78 [DIV] 99%) $4.83
1 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.
OPERATIONS
For the period ended
April 30, 2003
(unaudited)1
This Statement
of Operations
summarizes the
Fund's investment
income earned
and expenses
incurred in operat-
ing the Fund.
It also shows net
gains (losses) for
the period stated.
INVESTMENT INCOME
Dividends (net of foreign withholding taxes of $19,431) $132,470
Interest 2,275
Total investment income 134,745
EXPENSES
Investment management fee 55,689
Class A distribution and service fee 7,833
Class B distribution and service fee 20,917
Class C distribution and service fee 3,888
Class A, B and C transfer agent fee 115,115
Class I transfer agent fee 5,333
Registration and filing fee 33,383
Auditing fee 17,964
Custodian fee 13,006
Printing 8,284
Accounting and legal services fee 1,492
Miscellaneous 1,337
Trustees' fee 369
Legal fee 166
Total expenses 284,776
Less expense reductions (81,569)
Net expenses 203,207
Net investment loss (68,462)
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized loss on
Investments (1,176,145)
Foreign currency transactions (21,103)
Change in net unrealized appreciation (depreciation) of
Investments 1,181,811
Translation of assets and liabilities in foreign currencies 1,694
Net realized and unrealized loss (13,743)
Decrease in net assets from operations ($82,205)
1 Semiannual period from 11-1-02 through 4-30-03.
See notes to
financial statements.
CHANGES IN
NET ASSETS
This Statement
of Changes in
Net Assets
shows how the
value of the
Fund's net assets
has changed
since the end of
the previous
period. The dif-
ference reflects
earnings less
expenses, any
investment gains
and losses,
distributions, if
any, paid to
shareholders and
any increase or
decrease in
money share-
holders invested
in the Fund.
YEAR PERIOD
ENDED ENDED
10-31-02 4-30-03 1
INCREASE (DECREASE) IN NET ASSETS
From operations
Net investment loss ($144,114) ($68,462)
Net realized loss 2,546,024) (1,197,248)
Change in net unrealized appreciation
(depreciation) 56,756 1,183,505
Decrease in net assets resulting
from operations 2,633,382) (82,205)
From Fund share transactions (280,938) (1,103,231)
NET ASSETS
Beginning of period 4,978,677 12,064,357
End of period 2 2,064,357 $10,878,921
1 Semiannual period from 11-1-02 through 4-30-03. Unaudited.
2 Includes accumulated net investment loss of $624 and $69,086, respectively.
See notes to
financial statements.
FINANCIAL
HIGHLIGHTS
CLASS A SHARES
The Financial Highlights show how the Fund's net asset value for a share
has changed since the end of the previous period.
PERIOD ENDED 10-31-98 10-31-99 10-31-00 10-31-01 10-31-02 4-30-03 1
PER SHARE OPERATING PERFORMANCE
Net asset value,
beginning of period $8.41 $8.81 $10.95 $9.45 $6.18 $5.10
Net investment loss 2 -- 3 (0.02) (0.04) (0.05) (0.04) (0.03)
Net realized and unrealized
gain (loss) on investments 0.47 2.16 (1.01) (3.22) (1.04) 0.03
Total from
investment operations 0.47 2.14 (1.05) (3.27) (1.08) --
Less distributions
From net realized gain (0.07) -- (0.45) -- -- --
Net asset value,
end of period $8.81 $10.95 $9.45 $6.18 $5.10 $5.10
Total return 4,5 (%) 5.61 24.29 (10.15) (34.60) (17.48) 0.00 6
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period
(in millions) $6 $7 $15 $8 $6 $5
Ratio of expenses
to average net assets (%) 1.79 1.96 1.88 2.23 2.38 3.46 7
Ratio of adjusted expenses
to average net assets 8 (%) 3.65 3.81 3.44 3.83 4.43 4.91 7
Ratio of net investment income
(loss) to average net assets (%) 0.04 (0.20) (0.43) (0.65) (0.68) (1.04) 7
Portfolio turnover (%) 129 113 163 278 228 9 98
See notes to
financial statements.
FINANCIAL
HIGHLIGHTS
CLASS B SHARES
PERIOD ENDED 10-31-98 10-31-99 10-31-00 10-31-01 10-31-02 4-30-03 1
PER SHARE OPERATING PERFORMANCE
Net asset value,
beginning of period $8.22 $8.55 $10.55 $9.04 $5.86 $4.81
Net investment loss 2 (0.06) (0.09) (0.12) (0.10) (0.08) (0.04)
Net realized and unrealized
gain (loss) on investments 0.46 2.09 (0.94) (3.08) (0.97) 0.01
Total from
investment operations 0.40 2.00 (1.06) (3.18) (1.05) (0.03)
Less distributions
From net realized gain (0.07) -- (0.45) -- -- --
Net asset value,
end of period $8.55 $10.55 $9.04 $5.86 $4.81 $4.78
Total return 4,5 (%) 4.88 23.39 (10.65) (35.18) (17.92) (0.62) 6
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period
(in millions) $10 $9 $12 $6 $5 $4
Ratio of expenses
to average net assets (%) 2.49 2.63 2.57 2.93 3.08 4.16 7
Ratio of adjusted expenses
to average net assets 8 (%) 4.35 4.48 4.13 4.53 5.13 5.62 7
Ratio of net investment loss
to average net assets (%) (0.66) (0.91) (1.13) (1.34) (1.38) (1.76) 7
Portfolio turnover (%) 129 113 163 278 228 9 98
See notes to
financial statements.
FINANCIAL
HIGHLIGHTS
CLASS C SHARES
PERIOD ENDED 10-31-98 10 10-31-99 10-31-00 10-31-01 10-31-02 4-30-03 1
PER SHARE OPERATING PERFORMANCE
Net asset value,
beginning of period $9.36 $8.55 $10.57 $9.05 $5.87 $4.81
Net investment loss 2 (0.03) (0.10) (0.11) (0.10) (0.08) (0.04)
Net realized and unrealized
gain (loss) on investments (0.78) 2.12 (0.96) (3.08) (0.98) 0.01
Total from
investment operations (0.81) 2.02 (1.07) (3.18) (1.06) (0.03)
Less distributions
From net realized gain -- -- (0.45) -- -- --
Net asset value,
end of period $8.55 $10.57 $9.05 $5.87 $4.81 $4.78
Total return 4,5 (%) (8.65) 6 23.63 (10.72) (35.14) (18.06) (0.62) 6
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period
(in millions) -- 11 -- 11 $1 $1 $1 $1
Ratio of expenses
to average net assets (%) 2.29 7 2.66 2.57 2.93 3.08 4.16 7
Ratio of adjusted expenses
to average net assets 8 (%) 4.15 7 4.51 4.13 4.53 5.13 5.66 7
Ratio of net investment loss
to average net assets (%) (1.27) 7 (1.04) (1.07) (1.35) (1.38) (1.62)7
Portfolio turnover (%) 129 113 163 278 228 9 98
See notes to
financial statements.
FINANCIAL
HIGHLIGHTS
CLASS I SHARES
PERIOD ENDED 10-31-02 10 4-30-03 1
PER SHARE OPERATING PERFORMANCE
Net asset value,
beginning of period $6.18 $5.12
Net investment income (loss) 2 (0.01) 0.01
Net realized and unrealized
gain (loss) on investments (1.05) 0.02
Total from
investment operations (1.06) 0.03
Net asset value,
end of period $5.12 $5.15
Total return 4,5 (%) (17.15) 6 0.59 6
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period
(in millions) $1 $1
Ratio of expenses
to average net assets (%) 2.04 7 2.02 7
Ratio of adjusted expenses
to average net assets 8 (%) 4.09 7 3.48 7
Ratio of net investment income (loss)
to average net assets (%) (0.34) 7 0.39 7
Portfolio turnover (%) 228 9 98
1 Semiannual period from 11-1-02 through 4-30-03. Unaudited.
2 Based on the average of the shares outstanding.
3 Less than $0.01 per share.
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.
8 Does not take into consideration expense reductions during the periods shown.
9 Excludes merger activity.
10 Class C and Class I shares began operations on 6-1-98 and 3-1-02, respectively.
11 Less than $500,000.
See notes to
financial statements.
NOTES TO
STATEMENTS
Unaudited
NOTE A
Accounting policies
John Hancock International Fund (the "Fund") is a diversified series of
John Hancock Investment Trust III, an open-end management investment
company registered under the Investment Company Act of 1940. The
investment objective of the Fund is to achieve long-term growth of
capital.
The Trustees have authorized the issuance of multiple classes of shares
of the Fund, designated as Class A, Class B, Class C and Class I shares.
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 Trustees, may be applied differently 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 bears distribution and service expenses under terms of a
distribution plan have exclusive voting rights to that distribution
plan.
Significant accounting policies of the Fund are as follows:
Valuation of investments
Securities in the Fund's portfolio are valued on the basis of market
quotations, valuations provided by independent pricing services or, if
quotations are not readily available, or the value has been materially
affected by events occurring after the closing of a foreign market, at
fair value as determined in good faith in accordance with procedures
approved by the Trustees. Short-term debt investments maturing within 60
days are valued at amortized cost, which approximates market value. All
portfolio transactions initially expressed in terms of foreign
currencies have been translated into U.S. dollars as described in
"Foreign currency translation" below.
Joint repurchase agreement
Pursuant to an exemptive order issued by the Securities and Exchange
Commission, the Fund, along with other registered investment companies
having a management contract with John Hancock Advisers, LLC (the
"Adviser"), a wholly owned subsidiary of The Berkeley Financial Group,
LLC, may participate in a joint repurchase agreement transaction.
Aggregate cash balances are invested in one or more large repurchase
agreements, whose underlying securities are obligations of the U.S.
government and/or its agencies. The Fund's custodian bank receives
delivery of the underlying securities for the joint account on the
Fund's behalf. The Adviser is responsible for ensuring that the
agreement is fully collateralized at all times.
Foreign currency translation
All assets or liabilities initially expressed in terms of foreign
currencies are translated into U.S. dollars based on London currency
exchange quotations as of 5:00 P.M., London time, on the date of any
determination of the net asset value of the Fund. Transactions affecting
statement of operations accounts and net realized gain (loss) on
investments are translated at the rates prevailing at the dates of the
transactions.
The Fund does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held.
Such fluctuations are included with the net realized and unrealized gain
or loss from investments.
Reported net realized foreign exchange gains or losses arise from sales
of foreign currency, currency gains or losses realized between the trade
and settlement dates on securities transactions and the difference
between the amounts of dividends, interest and foreign withholding taxes
recorded on the Fund's books and the U.S. dollar equivalent of the
amounts actually received or paid. Net unrealized foreign exchange gains
and losses arise from changes in the value of assets and liabilities,
other than investments in securities, resulting from changes in the
exchange rates.
Investment transactions
Investment transactions are recorded as of the date of purchase, sale or
maturity. Net realized gains and losses on sales of investments are
determined on the identified cost basis. Capital gains realized on some
foreign securities are subject to foreign taxes, which are accrued as
applicable.
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 assets of the respective classes. Distri
bution and service fees, if any, and transfer agent fees for Class I
shares, are calculated daily at the class level based on the appropriate
net assets of each class and the specific expense rate(s) applicable to
each class.
Expenses
The majority of the expenses are directly identifiable to an individual
fund. Expenses that are not readily identifiable to a specific fund will
be allocated in such a manner as deemed equitable, taking into
consideration, among other things, the nature and type of expense and
the relative sizes of the funds.
Bank borrowings
The Fund is permitted to have bank borrowings for temporary or emergency
purposes, including the meeting of redemption requests that otherwise
might require the untimely disposition of securities. The Fund has
entered into a syndicated line of credit agreement with various banks.
This agreement enables the Fund to participate with other funds managed
by the Adviser in an unsecured line of credit with banks, which permits
borrowings of up to $250 million, collectively. Interest is charged to
each fund, based on its borrowing. In addition, a commitment fee is
charged to each fund based on the average daily unused portion of the
line of credit and is allocated among the participating funds. The Fund
had no borrowing activity under the line of credit during the period
ended April 30, 2003.
Forward foreign currency exchange contracts
The Fund may enter into forward foreign currency exchange contracts as a
hedge against the effect of fluctuations in currency exchange rates. A
forward foreign currency exchange contract involves an obligation to
purchase or sell a specific currency at a future date at a set price.
The aggregate principal amounts of the contracts are marked to market
daily at the applicable foreign currency exchange rates. Any resulting
unrealized gains and losses are included in the determination of the
Fund's daily net assets. The Fund records realized gains and losses at
the time the forward foreign currency exchange contracts are closed out.
Risks may arise upon entering these contracts from the potential
inability of counterparties to meet the terms of the contracts and from
unanticipated movements in the value of a foreign currency relative to
the U.S. dollar. These contracts involve market or credit risk in excess
of the unrealized gain or loss reflected in the Fund's statement of
assets and liabilities.
The Fund may also purchase and sell forward contracts to facilitate the
settlement of foreign currency denominated portfolio transactions, under
which it intends to take delivery of the foreign currency. Such
contracts normally involve no market risk if they are offset by the
currency amount of the underlying transactions. The Fund had no open
forward foreign currency exchange contracts on April 30, 2003.
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 has $13,871,763 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: October 31, 2007 --
$636,448, October 31, 2008 -- $2,888,578, October 31, 2009 -- $7,757,736
and October 31, 2010 -- $2,589,001. Availability of a certain amount of
this loss carryforward that was acquired on June 7, 2002 in a merger
with John Hancock International Equity Fund may be limited in a given
year.
Dividends, interest and distributions
Dividend income on investment securities is recorded on the ex-dividend
or, in the case of some foreign securities, on the date thereafter when
the Fund identifies the dividend. Interest income on investment
securities is recorded on the accrual basis. Foreign income may be
subject to foreign withholding taxes, which are accrued as applicable.
The Fund records distributions to shareholders from net investment
income and net realized gains on the ex-dividend date. 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.
Use of estimates
The preparation of these financial statements, in accordance with
accounting principles generally accepted in the United States of
America, incorporates estimates made by management in determining the
reported amount of assets, liabilities, revenues and expenses of the
Fund. Actual results could differ from these estimates.
NOTE B
Management fee and transactions with affiliates and others
The Fund has an investment management contract with the Adviser. Under
the investment management contract, the Fund pays a monthly management
fee to the Adviser equivalent, on an annual basis, to the sum of: (a)
1.00% of the first $250,000,000 of the Fund's average daily net asset
value, (b) 0.80% of the next $250,000,000, (c) 0.75% of the next
$250,000,000 and (d) 0.625% of the Fund's average daily net asset value
in excess of $750,000,000. The Adviser has a subadvisory agreement with
Nicholas-Applegate Capital Management LP. The Fund is not responsible
for the payment of the subadvisory fees.
The Adviser has agreed to limit the Fund's expenses, excluding the
distribution and service fees and transfer agent fee, to 0.90% of the
Fund's average daily net assets, at least until February 24, 2004.
Accordingly, the expense reduction amounted to $81,569 for the period
ended April 30, 2003. The Adviser reserves the right to terminate this
limitation in the future.
The Fund has Distribution Plans with John Hancock Funds, LLC ("JH
Funds"), a wholly owned subsidiary of the Adviser. The Fund has adopted
Distribution Plans with respect to Class A, Class B and Class C pursuant
to Rule 12b-1 under the Investment Company Act of 1940 to reimburse JH
Funds for the services it provides as distributor of shares of the Fund.
Accordingly, the Fund makes monthly payments to JH Funds at an annual
rate not to exceed 0.30% of Class A average daily net assets and 1.00%
of Class B and Class C average daily net assets. A maximum of 0.25% of
such payments may be service fees as defined by the Conduct Rules of 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.
Class A and Class C shares are assessed up-front sales charges. During
the period ended April 30, 2003, JH Funds received net up-front sales
charges of $6,991 with regard to sales of Class A shares. Of this
amount, $632 was retained and used for printing prospectuses,
advertising, sales literature and other purposes, $5,198 was paid as
sales commissions to unrelated broker-dealers and $1,161 was paid as
sales commissions to sales personnel of Signator Investors, Inc.
("Signator Investors"), a related broker-dealer. The Adviser's indirect
parent, John Hancock Life Insurance Company ("JHLICo"), is the indirect
sole shareholder of Signator Investors. During the period ended April
30, 2003, JH Funds received net up-front sales charges of $2,128 with
regard to sales of Class C shares. Of this amount, $1,984 was paid as
sales commissions to unrelated broker-dealers and $144 was paid as sales
commissions to sales personnel of Signator Investors.
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 JH Funds
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 April 30, 2003,
CDSCs received by JH Funds amounted to $11,440 for Class B shares and
$43 for Class C shares.
The Fund has a transfer agent agreement with John Hancock Signature
Services, Inc., an indirect subsidiary of JHLICo. For Class A, B and C
shares, The Fund pays a monthly transfer agent fee at an annual rate of
0.05% of the 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. For Class I shares, the Fund pays
a monthly transfer agent fee at an annual rate of 0.05% of the average
daily net asset value, plus certain out-of-pocket expenses attributable
to Class I shares.
The Fund has an agreement with the Adviser to perform necessary tax,
accounting and legal services for the Fund. The compensation for the
period was at an annual rate of approximately 0.03% of the average net
assets of the Fund.
Ms. Maureen R. Ford and Mr. John M. DeCiccio are directors and/or
officers of the Adviser and/or its affiliates, as well as Trustees of
the Fund. The compensation of unaffiliated Trustees is borne by the
Fund. The unaffiliated Trustees may elect to defer for tax purposes
their receipt of this compensation under the John Hancock Group of Funds
Deferred Compensation Plan. The Fund makes investments into other John
Hancock funds, as applicable, to cover its liability for the deferred
compensation. Investments to cover the Fund's deferred compensation
liability are recorded on the Fund's books as an other asset. The
deferred compensation liability and the related other asset are always
equal and are marked to market on a periodic basis to reflect any income
earned by the investments as well as any unrealized gains or losses. The
Deferred Compensation Plan investments had no impact on the operations
of the Fund.
NOTE C
Fund share transactions
This listing illustrates the number of Fund shares sold, issued in
reorganization and repurchased during the last two periods, along with
the corresponding dollar value. The Fund has an unlimited number of
shares authorized with no par value.
YEAR ENDED 10-31-02 PERIOD ENDED 4-30-03 1
SHARES AMOUNT SHARES AMOUNT
CLASS A SHARES
Sold 1,608,472 $9,646,755 357,443 $1,807,695
Repurchased (1,773,317) (10,715,750) (430,981) (2,154,643)
Net decrease (164,845) ($1,068,995) (73,538) ($346,948)
CLASS B SHARES
Sold 397,117 $2,291,714 113,489 $527,437
Repurchased (510,300) (2,891,269) (265,029) (1,231,276)
Net decrease (113,183) ($599,555) (151,540) ($703,839)
CLASS C SHARES
Sold 295,202 $1,675,337 85,635 $394,959
Repurchased (271,816) (1,534,260) (71,294) (331,576)
Net increase 23,386 $141,077 14,341 $63,383
CLASS I SHARES 2
Sold 34,945 $187,366 21,795 $107,664
Issued in reorganization 257,801 1,609,274 -- --
Repurchased (96,794) (550,105) (46,465) (223,491)
Net increase (decrease) 195,952 $1,246,535 (24,670) ($115,827)
NET DECREASE (58,690) ($280,938) (235,407) ($1,103,231)
1 Semiannual period from 11-1-02 through 4-30-03. Unaudited.
2 Class I shares began operations on 3-1-02.
NOTE D
Investment transactions
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 April 30, 2003, aggregated $10,676,133 and
$11,437,691, respectively.
The cost of investments owned on April 30, 2003, including short-term
investments, for federal income tax purposes was $10,414,006. Gross
unrealized appreciation and depreciation of investments aggregated
$913,559 and $382,469, respectively, resulting in net unrealized
appreciation of $531,090. The difference between book basis and tax
basis net unrealized appreciation of investments is attributable
primarily to the tax deferral of losses on wash sales and the
realization for tax purposes of unrealized gains on certain forward
foreign currency contracts.
NOTE E
Reorganization
On May 29, 2002, the shareholders of John Hancock International Equity
Fund ("International Equity Fund") approved an Agreement and Plan of
Reorganization, which provided for the transfer of substantially all of
the assets and liabilities of International Equity Fund in exchange
solely for Class I shares of the Fund. The acquisition was accounted for
as a tax-free exchange of 257,801 Class I shares of the Fund for the net
assets of the International Equity Fund, which amounted to $1,609,274,
including $62,490 of unrealized appreciation, after the close of
business on June 7, 2002.
NOTE F
Proposed reorganization
On November 19, 2002, the Trustees approved the reorganization of John
Hancock European Equity Fund and John Hancock Global Fund into John
Hancock International Fund, subject to the approval by shareholders.
OUR FAMILY
OF FUNDS
- -------------------------------------------------------
Equity Balanced Fund
Classic Value Fund
Core Equity Fund
Focused Equity Fund
Growth Trends Fund
Large Cap Equity Fund
Large Cap Growth Fund
Large Cap Spectrum Fund
Mid Cap Growth Fund
Multi Cap Growth Fund
Small Cap Equity Fund
Small Cap Growth Fund
Sovereign Investors Fund
U.S. Global Leaders Growth Fund
- -------------------------------------------------------
Sector Biotechnology Fund
Financial Industries Fund
Health Sciences Fund
Real Estate Fund
Regional Bank Fund
Technology Fund
- -------------------------------------------------------
Income Bond Fund
Government Income Fund
High Income Fund
High Yield Bond Fund
Investment Grade Bond Fund
Strategic Income Fund
- -------------------------------------------------------
International International Fund
Pacific Basin Equities Fund
- -------------------------------------------------------
Tax-Free Income California Tax-Free Income Fund
High Yield Municipal Bond Fund
Massachusetts Tax-Free Income Fund
New York Tax-Free Income Fund
Tax-Free Bond Fund
- -------------------------------------------------------
Money Market Money Market Fund
U.S. Government Cash Reserve
For more complete information on any John Hancock Fund
and a prospectus, which includes charges and expenses,
call your financial professional, or John Hancock Funds at
1-800-225-5291. Please read the prospectus carefully before
investing or sending money.
FOR YOUR
INFORMATION
TRUSTEES
Dennis S. Aronowitz
Richard P. Chapman, Jr.
William J. Cosgrove
John M. DeCiccio
Richard A. Farrell
Maureen R. Ford
William F. Glavin*
Dr. John A. Moore*
Patti McGill Peterson*
John W. Pratt
*Members of the Audit Committee
OFFICERS
Maureen R. Ford
Chairman, President
and Chief Executive Officer
William L. Braman
Executive Vice President
and Chief Investment Officer
Richard A. Brown
Senior Vice President
and Chief Financial Officer
Susan S. Newton
Senior Vice President
and Secretary
William H. King
Vice President and Treasurer
Thomas H. Connors
Vice President and
Compliance Officer
INVESTMENT ADVISER
John Hancock Advisers, LLC
101 Huntington Avenue
Boston, Massachusetts 02199-7603
SUBADVISER
Nicholas-Applegate Capital Management LP
600 West Broadway
San Diego, California 92101
PRINCIPAL DISTRIBUTOR
John Hancock Funds, LLC
101 Huntington Avenue
Boston, Massachusetts 02199-7603
CUSTODIAN
The Bank of New York
One Wall Street
New York, New York 10286
TRANSFER AGENT
John Hancock Signature Services, Inc.
1 John Hancock Way, Suite 1000
Boston, Massachusetts 02217-1000
LEGAL COUNSEL
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109-1803
HOW TO
CONTACT US
On the Internet www.jhfunds.com
By regular mail John Hancock Signature Services, Inc.
1 John Hancock Way, Suite 1000
Boston, MA 02217-1000
By express mail John Hancock Signature Services, Inc.
Attn: Mutual Fund Image Operations
529 Main Street
Charlestown, MA 02129
Customer service representatives 1-800-225-5291
24-hour automated information 1-800-338-8080
TDD line 1-800-554-6713
[A 1 1/2" x 1/2" John Hancock (Signature) logo in upper left hand corner.
A tag line below reads "JOHN HANCOCK FUNDS."]
1-800-225-5291
1-800-554-6713 (TDD)
1-800-338-8080 EASI-Line
www.jhfunds.com
Now available: electronic delivery
www.jhancock.com/funds/edelivery
This report is for the information of
the shareholders of the John Hancock
International Fund.
400SA 4/03
6/03
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.
By:
- -----------------------
Maureen R. Ford
hairman, President and Chief Executive Officer
Date: June 24, 2003
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:
- -----------------------
Maureen R. Ford
Chairman, President and Chief Executive Officer
Date: June 24, 2003
By:
- -----------------------
Richard A. Brown
Senior Vice President and Chief Financial Officer
Date: June 24, 2003