File Nos. 333-105825
811-4630
As filed with the Securities and Exchange Commission on June 30, 2003.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
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REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /____/
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Pre-Effective Amendment No. _1_ /_X__/
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Post-Effective Amendment No. ___ /____/
(Check appropriate box or boxes)
JOHN HANCOCK INVESTMENT TRUST III
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
101 Huntington Avenue, Boston, Massachusetts 02199-7603
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(Address of principal executive office) Zip Code
(617) 375-1702
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(Registrant's Telephone Number, including Area Code)
Susan S. Newton, Esq.
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, MA 02199
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(Name and address of agent for service)
Title of Securities Being Registered: shares of beneficial interest of John
Hancock Investment Trust III.
Approximate Date of Proposed Public Offering: As soon as practicable after the
effectiveness of the registration statement.
No filing fee is required because an indefinite number of shares has previously
been registered pursuant to Rule 24f-2 under the Investment Company Act of 1940,
as amended. This Registration Statement relates to shares previously registered
on Form N-1A (File Nos. 33-4559 and 811-4630).
JOHN HANCOCK INVESTMENT TRUST III
STATEMENT OF INCORPORATION BY REFERENCE
Part A, Part B and Part C of the registrant's registration statement on Form
N-14, File Nos. 333-105825 and 811-4630, dated June 4, 2003, are incorporated by
reference in their entirety herein.
EXPLANATORY NOTE
This Pre-Effective Amendment is being filed for the sole purpose of adding the
Semi Annual Report to Shareholders of John Hancock International Fund and John
Hancock Pacific Basin Equities Fund both dated April 30, 2003 to Part B of the
registration statement.
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
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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
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
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The Bank of New York
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New York, New York 10286
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John Hancock Signature Services, Inc.
1 John Hancock Way, Suite 1000
Boston, Massachusetts 02217-1000
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Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109-1803
HOW TO
CONTACT US
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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
John Hancock
Pacific Basin
Equities 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 13
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 growth
of capital by
investing
primarily in stocks
of companies
located in the
Pacific Basin.
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 Pacific Basin Equities 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 7%
with -14% at the bottom and 0% at the top. The first bar represents the
- -11.81% total return for Class A. The second bar represents the -12.16%
total return for Class B. The third bar represents the -12.16% 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
3.4% Samsung Electronics Co., Ltd.
3.3% Toyota Motor Corp.
3.1% BYD Co., Ltd.
2.5% Hyundai Department Store Co., Ltd.
2.5% Hoya Corp.
2.5% Shinsegae Co., Ltd.
2.4% Shinhan Financial Group Co., Ltd.
2.3% Taiwan Semiconductor Manufacturing Co. Ltd.
2.3% Ssangyong Motor Co.
2.3% Chartered Semiconductor Manufacturing Ltd.
As a percentage of net assets on April 30, 2003.
BY SHU NUNG LEE, CFA, FOR THE NICHOLAS-APPLEGATE CAPITAL MANAGEMENT
PORTFOLIO MANAGEMENT TEAM
John Hancock
Pacific Basin Equities Fund
MANAGERS'
REPORT
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.
Amid such uncertainty, Pacific Rim equities lost ground in the period,
with the representative MSCI All Country Pacific Free Index returning
- -4.98%.
In early October, shortly before the period began, international
equities, which became sharply oversold in the third quarter, rallied as
many beaten-down stocks rebounded. Late in 2002, international stocks
retreated somewhat as concerns arose that per-share earnings estimates
remained high.
"Amid such uncertainty,
Pacific Rim equities lost
ground in the period..."
The new year opened with investors holding high hopes, but declines in
each month of the first quarter dashed those hopes, as a combination of
war worries and weak economic data spurred a sell-off in stocks. In
developed markets, European equities outperformed Japanese equities, in
part due to a somewhat stronger euro and slightly weaker yen. Asian
performance was hurt most by negative returns in Korea, India and China.
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. However, Pacific Rim equities advanced significantly
less than their counterparts in the United States and Europe.
FUND PERFORMANCE EXPLAINED
For the six months ended April 30, 2003, John Hancock Pacific Basin
Equities Fund's Class A, Class B and Class C shares posted total returns
of -11.81%, -12.16% and -12.16%, respectively, at net asset value.
During the same period, the average Pacific region fund returned
- -6.57%, according to Lipper, Inc.,1 while the benchmark MSCI All
Country Pacific Free Index fell 4.98%. 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 Fund's underperformance relative to its peers and benchmark was
largely the result of disappointing stock selection in the
producers/manufacturing, financial services and consumer services
sectors. In particular, holdings in Japanese financial firms negatively
influenced both absolute and relative returns, as did investments in
leisure/gaming companies and electronic instruments manufacturers. By
country, Japanese and Australian stocks hurt the portfolio despite
underweight positions in both nations.
"...stock selection and over
weight exposure to the
consumer nondurables
sector...proved to be the
lone bright spot..."
On the positive side, stock selection and overweight exposure to the
consumer nondurables sector, while down slightly in absolute terms,
proved to be the lone bright spot for the portfolio. Industry holdings
that supported performance included agriculture, telephone companies and
advertising firms. By country, our overweight positions in Indonesia,
whose stock market rose 37%, and stock selection in Thailand and the
Philippines proved positive.
Top-performing holdings during the reporting period included Philippine
Long Distance Telephone Co., the leading supplier of domestic and
international telecommunications services in the Philippines, and Thai
Union Frozen Products, which specializes in frozen packaged seafood
products. Philippine Long Distance benefited from continuing
stronger-than-expected results at its Smart subsidiary, the removal of
provisions for its Piltel subsidiary, and lower compensation expenses as
it continues to substantially reduce headcount. Thai Union gained on
strong sales growth of its tuna products, particularly in the European
Union and the Middle East. The company is the only supplier of tuna
products to the U.S. military, so it also advanced on the prospect of
increased war-related spending. Decliners included numerous Japanese
companies, such as Nomura Securities, Mitsubishi Tokyo, Sony and
Hitachi.
[Table at top left-hand side of page entitled "Top five industry
groups." The first listing is Electronics 25%, the second is
Automobiles/trucks 9%, the third Retail 6%, the fourth Finance 5%, and
the fifth Leisure 4%.]
FUND MOVES
During the period, based on our assessment of individual stocks'
appreciation potential, we shifted assets out of Japan and Australia in
favor of opportunities in South Korea and China. We believe easing of
tensions with North Korea should help the South Korean stock market
regain its footing. Meanwhile, China -- despite the impact of Severe
Acute Respiratory Syndrome, or SARS -- continues to experience strong
export growth.
[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:
Japan 37%, South Korea 17%, Taiwan 8%, Hong Kong 6% and Singapore 6%. ]
OUTLOOK
On a macro level, geopolitical concerns are currently driving the equity
markets. Fundamentals remain weak, especially in Germany, France and
Japan. Capital equipment spending is beginning to stabilize, which bodes
well for future growth, and inflation remains tame. Although U.S.
companies generally have been meeting or beating earnings expectations,
international companies are not yet doing so. Positive developments
include a stability pact in the European Union that allows higher budget
deficits and government spending during exceptional periods, as well as
a reform package in Germany tightening unemployment and insurance
benefits. Japan was under selling pressure because its fiscal year ended
March 31, but we believe this pressure should be abating now that its
new fiscal year has begun.
[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
Philippine Long Distance Telephone followed by an up arrow with the
phrase "Stronger-than-expected performance; successful cost-control
measures. " The second listing is Sony Corp. followed by a down arrow
with the phrase "Weak sales and uncertainty regarding planned
restructuring." The third listing is Thai Union Frozen Products followed
by an up arrow with the phrase "Accelerating sales of tuna products."]
"Currently, Asia is
posting attractive
relative trade figures."
Currently, Asia is posting attractive relative trade figures. China, in
particular, is experiencing strong export growth. China is a source of
production for Taiwan, which has the technological know-how and the
customer base while China supplies the manufacturing capacity and labor.
Recently, Thailand has been the best-performing market in Asia.
Thailand's financial sector is undergoing recovery and the government
has placed a fiscal stimulus package in place.
Now that the overhang of Iraq is behind us, we believe the financial
markets should begin to normalize and investors should once again reward
fundamental strength.
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
Pacific Free Index, an
unmanaged index
composed of compa
nies in Australia, Japan
and certain other
Pacific Basin countries.
It is not possible to
invest in an index.
Class A Class B Class C Index
Inception date 9-8-87 3-7-94 3-1-99 --
Average annual returns with maximum sales charge (POP)
One year -32.22% -32.74% -30.55% -20.97%
Five years -4.74% -4.81% -- -5.83%
Ten years -3.22% -- -- -5.78%
Since inception -- -6.47% -3.78% --
Cumulative total returns with maximum sales charge (POP)
Six months -16.26% -16.55% -13.92% -4.98%
One year -32.22% -32.74% -30.55% -20.97%
Five years -21.55% -21.85% -- -25.94%
Ten years -27.88% -- -- -44.87%
Since inception -- -45.79% -14.82% --
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 Morgan Stanley Capital International (MSCI) All
Country Pacific Free Index.
Line chart with the heading "GROWTH OF $10,000." Within the chart are
three lines. The first line represents the value of the hypothetical
$10,000 investment made in the John Hancock Pacific Basin Equities Fund,
before sales charge, and is equal to $7,590 as of April 30, 2003. The
second line represents the value of the same hypothetical investment
made in the John Hancock Pacific Basin Equities Fund, after sales
charge, and is equal to $7,212 as of April 30, 2003. The third line
represents the Index and is equal to $5,513 as of April 30, 2003.
Class B 1 Class C 1
Period beginning 3-7-94 3-1-99
Without sales charge $5,421 $8,603
With maximum sales charge -- $8,517
Index $5,350 $7,795
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
This schedule is divided into four main categories: common stocks,
preferred stocks, warrants and short-term investments. Common and
preferred stocks and warrants are further broken down by country.
Short-term investments, which represent the Fund's cash position, are
listed last.
Securities owned
by the Fund on
April 30, 2003
(unaudited)
SHARES ISSUER VALUE
COMMON STOCKS 86.21% $14,802,491
(Cost $16,118,391)
Australia 1.82% 311,960
38,900 Aristocrat Leisure, Ltd. (Leisure) 37,961
10,200 Australia & New Zealand Banking Group Ltd. (Banks -- Foreign) 118,999
7,000 Commonwealth Bank of Australia (Banks -- Foreign) 119,193
18,000 Qantas Airways Ltd. (Transportation) 35,807
China 5.30% 910,687
273,000 BYD Co., Ltd. (Electronics) 540,816
2,384,000 Sinopec Shanghai Petrochemical Co., Ltd.* (Chemicals) 369,871
Hong Kong 5.90% 1,014,020
342,000 China Resources Enterprise Ltd. (Diversified Operations) 271,879
25,500 CLP Holdings Ltd. (Utilities) 104,301
661,500 Dickson Concepts International Ltd. (Retail) 100,085
60,000 Henderson Land Development Co., Ltd. (Real Estate Operations) 148,864
794,000 Ngai Lik Industrial Holding Ltd. (Electronics) 185,289
177,000 TCL International Holdings Cos., Ltd. (Electronics) 33,135
78,000 Tingyi Holding Corp. (Food) 14,102
271,000 VTech Holdings Ltd. (Telecommunications) 156,365
Indonesia 2.38% 408,716
5,325,000 PT Bank Pan Indonesia Tbk (Banks -- Foreign) 144,276
5,255,500 PT Bentoel Internasional Investama Tbk* (Tobacco) 69,682
3,490,500 PT Perusahaan Perkebunan London Sumatra Indonesia Tbk*
(Agricultural Operations) 152,924
88,500 PT Telekomunikasi Indonesia (Telecommunications) 41,834
Japan 36.71% 6,302,698
1,000 Aderans Co., Ltd. (Cosmetics & Personal Care) 18,321
67,000 Asahi Glass Co., Ltd. (Building) 356,742
3,000 Bridgestone Corp. (Rubber -- Tires & Misc) 34,035
6,000 Daiwa House Industry Co., Ltd. (Building) 36,223
54,000 Dowa Mining Co., Ltd. (Metal) 178,853
43 East Japan Railway Co. (Transportation) 194,701
5,600 Eneserve Corp. (Utilities) 196,277
2,100 Fanuc Ltd. (Electronics) 85,930
2,000 Funai Electric Co., Ltd. (Electronics) 201,241
101,000 Hitachi Ltd. (Electronics) 337,062
3,400 Hogy Medical Co., Inc. (Medical) 143,971
5,600 Honda Motor Co., Ltd. (Automobiles/Trucks) 185,477
7,300 Hoya Corp. (Electronics) 431,536
54,000 Jeol Ltd. (Instruments -- Scientific) 131,310
5,000 Kao Corp. (Cosmetics & Personal Care) 91,187
27,000 Kikkoman Corp. (Food) 168,212
620 Kose Corp. (Cosmetics & Personal Care) 19,651
7,300 Kyocera Corp. (Electronics) 356,247
1,200 Mabuchi Motor Co., Ltd. (Electronics) 89,653
44 Millea Holdings, Inc.* (Insurance) 285,561
87 Mitsubishi Tokyo Financial Group, Inc. (Banks -- Foreign) 294,717
1,200 Nintendo Co., Ltd. (Leisure) 93,778
4,800 Nissan Motor Co., Ltd. (Automobiles/Trucks) 36,827
700 Nitto Denko Corp. (Chemicals) 20,133
24 NTT DoCoMo, Inc. (Telecommunications) 49,505
5,000 Olympus Optical Co., Ltd. (Leisure) 86,576
6,000 Ricoh Co., Ltd. (Office) 92,017
9,900 Shin-Etsu Chemical Co., Ltd. (Chemicals) 296,353
800 SMC Corp. (Machinery) 60,238
36 Sparx Asset Management Co., Ltd. (Finance) 152,440
7,800 Takeda Chemical Industries, Ltd. (Medical) 285,813
14,500 THK Co., Ltd. (Machinery) 133,741
19,000 Tokai Rika Co., Ltd. (Automobiles/Trucks) 102,440
36,000 TonenGeneral Sekiyu K.K. (Oil & Gas) 228,811
24,700 Toyota Motor Corp. (Automobiles/Trucks) 559,198
500 Uni-Charm Corp. (Cosmetics & Personal Care) 19,914
1,500 Yamaichi Electronics Co., Ltd. (Electronics) 19,810
3,000 Yamato Transport Co., Ltd. (Transportation) 33,557
14,400 Yushin Precision Equipment Co., Ltd. (Machinery) 194,640
Malaysia 3.07% 526,815
205,000 Perusahaan Otomobil Nasional Berhad (Automobiles/Trucks) 339,868
96,000 Telekom Malaysia Berhad (Telecommunications) 186,947
Philippine Islands 2.47% 423,903
2,215,300 Ayala Land, Inc. (Real Estate Operations) 211,081
915,300 Manila Electric Co.* (Utilities) 178,787
4,700 Philippine Long Distance Telephone Co.* (Telecommunications) 34,035
Singapore 5.67% 973,310
1,013,000 Chartered Semiconductor Manufacturing Ltd.* (Electronics) 393,653
86,000 City Developments, Ltd. (Real Estate Operations) 163,708
343,000 Singapore Exchange Ltd. (Finance) 235,672
19,400 Singapore Press Holdings Ltd. (Media) 180,277
South Korea 13.51% 2,319,215
66,600 Hotel Shilla Co., Ltd. (Leisure) 254,889
26,700 Hyundai Department Store Co., Ltd. (Retail) 437,309
3,210 LG Ad, Inc. (Advertising) 42,668
680 LG Home Shopping, Inc. (Retail) 38,673
11,280 LG Household & Health Care Ltd. (Soap & Cleaning Preparations) 160,148
41,400 Shinhan Financial Group Co., Ltd. (Finance) 408,889
3,570 Shinsegae Co., Ltd. (Retail) 426,049
8,000 SK Telecom Co., Ltd. American Depositary Receipts (ADR)
(Telecommunications) 121,600
91,940 Ssangyong Motor Co.* (Automobiles/Trucks) 395,002
1,780 You Eal Electronics Co., Ltd. (Telecommunications) 33,988
Taiwan 8.31% 1,427,672
579,000 Eva Airways Corp.* (Transportation) 177,719
44,000 Largan Precision Co., Ltd. (Leisure) 271,371
27,000 Nanya Technology Corp.* (Electronics) 14,716
112,000 Optimax Technology Corp.* (Electronics) 128,514
375,000 Siliconware Precision Industries Co.* (Electronics) 177,496
108,300 Siliconware Precision Industries Co.* (ADR) (Electronics) 258,837
291,000 Taiwan Semiconductor Manufacturing Co. Ltd.* (Electronics) 399,019
Thailand 1.07% 183,495
104,000 Bangkok Expressway Pcl (Building) 36,147
300,800 Thai Union Frozen Products Pcl (Food) 147,348
PREFERRED STOCKS 3.56% $611,942
(Cost $556,575)
Japan 0.20% 34,337
6,000,000 SMFG Finance Ltd. (Banks -- Foreign) (R) 34,337
South Korea 3.36% 577,605
4,710 Samsung Electronics Co., Ltd. (Electronics) 577,605
WARRANTS 4.21% 722,338
(Cost $739,482)
India 4.21% 722,338
115,000 Hindustan Lever Ltd.* (Soap & Cleaning Preparations) 350,808
6,300 Infosys Technologies Ltd.* (Computers) 371,530
INTEREST PAR VALUE
ISSUER, DESCRIPTION, MATURITY DATE RATE (000s OMITTED) VALUE
SHORT-TERM INVESTMENTS 2.91% $499,000
(Cost $499,000)
Joint Repurchase Agreement 2.91%
Investment in a joint repurchase agreement transaction
with State Street Bank & Trust Co. -- Date 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 3.875% due 01-15-07 and
3.000% due 07-15-12) 1.280% $499 499,000
TOTAL INVESTMENTS 96.89% $16,635,771
OTHER ASSETS AND LIABILITIES, NET 3.11% $533,888
TOTAL NET ASSETS 100.00% $17,169,659
* Non-income-producing security.
(R) This security is exempt from registration under rule 144A of the
Securities Act of 1933. Such security may be resold, normally to
qualified institutional buyers, in transactions exempt from
registration. Rule 144A securities amounted to $34,337 or 0.20% 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
industries.
VALUE AS A PERCENTAGE
INVESTMENT CATEGORIES OF NET ASSETS
Advertising 0.25%
Agricultural Operations 0.89
Automobiles/Trucks 9.43
Banks -- Foreign 4.14
Building 2.50
Chemicals 4.00
Computers 2.16
Cosmetics & Personal Care 0.87
Diversified Operations 1.58
Electronics 24.64
Finance 4.64
Food 1.92
Instruments -- Scientific 0.76
Insurance 1.66
Leisure 4.34
Machinery 2.26
Media 1.05
Medical 2.50
Metal 1.04
Office 0.54
Oil & Gas 1.33
Real Estate Operations 3.05
Retail 5.84
Rubber -- Tires & Misc. 0.20
Soap & Cleaning Preparations 2.98
Telecommunications 3.64
Tobacco 0.41
Transportation 2.57
Utilities 2.79
Short-term investments 2.91
Total investments 96.89%
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 $17,913,448) $16,635,771
Cash 670
Foreign cash at value (cost $527,101) 528,259
Receivable for investments sold 449,526
Receivable for shares sold 95,000
Dividends and interest receivable 78,248
Other assets 4,144
Total assets 17,791,618
LIABILITIES
Payable for investments purchased 497,385
Payable for shares repurchased 2,130
Payable to affiliates 58,681
Other payables and accrued expenses 63,763
Total liabilities 621,959
NET ASSETS
Capital paid-in 34,384,832
Accumulated net realized loss on investments
and foreign currency transactions (15,848,143)
Net unrealized depreciation of investments and translation
of assets and liabilities in foreign currencies (1,274,216)
Accumulated net investment loss (92,814)
Net assets $17,169,659
NET ASSET VALUE PER SHARE
Based on net asset values and shares outstanding
Class A ($9,032,368 [DIV] 1,110,201 shares) $8.14
Class B ($7,489,200 [DIV] 978,115 shares) $7.66
Class C ($648,091 [DIV] 84,640 shares) $7.66
MAXIMUM OFFERING PRICE PER SHARE
Class A 1 ($8.14 [DIV] 95%) $8.57
Class C ($7.66 [DIV] 99%) $7.74
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 $37,850) $239,603
Interest 3,938
Total investment income 243,541
EXPENSES
Investment management fee 81,090
Class A distribution and service fee 15,256
Class B distribution and service fee 46,337
Class C distribution and service fee 4,171
Transfer agent fee 98,246
Custodian fee 35,982
Registration and filing fee 20,390
Auditing fee 16,282
Printing 8,735
Accounting and legal services fee 4,363
Interest expense 1,081
Trustee's fee 698
Miscellaneous 460
Legal fee 176
Total expenses 333,267
Net investment loss (89,726)
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized loss on
Investments (2,111,563)
Foreign currency transactions (162,904)
Change in unrealized appreciation (depreciation) of
Investments (26,106)
Translation of assets and liabilities in foreign currencies 19
Net realized and unrealized loss (2,300,554)
Decrease in net assets from operations ($2,390,280)
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 ($368,514) ($89,726)
Net realized gain (loss) 476,358 (2,274,467)
Change in net unrealized appreciation
(depreciation) (1,094,526) (26,087)
Decrease in net assets
resulting from operations (986,682) (2,390,280)
From Fund share transactions (2,622,422) (2,616,983)
NET ASSETS
Beginning of period 25,786,026 22,176,922
End of period 2 $22,176,922 $17,169,659
1 Semiannual period from 11-1-02 through 4-30-03. Unaudited.
2 Includes accumulated net investment loss of $3,088 and $92,814,
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 $11.63 $8.76 $14.46 $14.02 $9.62 $9.23
Net investment income (loss)2 0.02 (0.09) (0.14) (0.08) (0.10) (0.02)
Net realized and unrealized
gain (loss) on investments (2.89) 5.79 0.08 (4.32) (0.29) (1.07)
Total from
investment operations (2.87) 5.70 (0.06) (4.40) (0.39) (1.09)
Less distributions
From net investment income -- -- (0.37) -- -- --
In excess of net investment income -- -- (0.01) -- -- --
-- -- (0.38) -- -- --
Net asset value,
end of period $8.76 $14.46 $14.02 $9.62 $9.23 $8.14
Total return 3 (%) (24.68) 65.07 (0.57) (31.38) (4.05) (11.81) 4
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period
(in millions) $15 $33 $23 $12 $11 $9
Ratio of expenses to
average net assets (%) 2.46 2.37 2.06 2.67 2.57 2.94 5
Ratio of net investment
income (loss) to average
net assets (%) 0.22 (0.77) (0.81) (0.64) (0.99) (0.52) 5
Portfolio turnover (%) 230 174 258 448 293 148
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 $11.32 $8.47 $13.89 $13.43 $9.15 $8.72
Net investment loss 2 (0.04) (0.17) (0.25) (0.15) (0.17) (0.05)
Net realized and unrealized
gain (loss) on investments (2.81) 5.59 0.09 (4.13) (0.26) (1.01)
Total from
investment operations (2.85) 5.42 (0.16) (4.28) (0.43) (1.06)
Less distributions
From net investment income -- -- (0.29) -- -- --
In excess of net investment income -- -- (0.01) -- -- --
-- -- (0.30) -- -- --
Net asset value,
end of period $8.47 $13.89 $13.43 $9.15 $8.72 $7.66
Total return 3 (%) (25.18) 63.99 (1.30) (31.87) (4.70) (12.16) 4
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period
(in millions) $13 $37 $29 $14 $10 $7
Ratio of expenses to
average net assets (%) 3.16 3.07 2.77 3.37 3.27 3.64 5
Ratio of net investment
loss to average
net assets (%) (0.48) (1.47) (1.51) (1.36) (1.69) (1.25) 5
Portfolio turnover (%) 230 174 258 448 293 148
See notes to
financial statements.
FINANCIAL
HIGHLIGHTS
CLASS C SHARES
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 $9.09 $13.89 $13.43 $9.15 $8.72
Net investment loss 2 (0.13) (0.24) (0.17) (0.17) (0.05)
Net realized and unrealized
gain (loss) on investments 4.93 0.08 (4.11) (0.26) (1.01)
Total from
investment operations 4.80 (0.16) (4.28) (0.43) (1.06)
Less distributions
From net investment income -- (0.29) -- -- --
In excess of net investment income -- (0.01) -- -- --
-- (0.30) -- -- --
Net asset value,
end of period $13.89 $13.43 $9.15 $8.72 $7.66
Total return 3 (%) 52.81 4 (1.30) (31.87) (4.70) (12.16) 4
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period
(in millions) $1 $1 -- 7 $1 $1
Ratio of expenses to
average net assets (%) 3.14 5 2.77 3.37 3.27 3.64 5
Ratio of net investment
loss to average
net assets (%) (1.76) 5 (1.48) (1.48) (1.69) (1.28) 5
Portfolio turnover (%) 174 258 448 293 148
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.
NOTES TO
STATEMENTS
Unaudited
NOTE A
Accounting policies
John Hancock Pacific Basin Equities Fund (the "Fund") is a diversified
series of John Hancock World Fund, 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, 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.
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.
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 $13,280,111 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 entire amount of the loss carryforward expires October 31,
2009.
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, capital gains and repatriation
taxes imposed by certain countries in which the Fund invests, 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 quarterly management
fee to the Adviser equivalent, on an annual basis, to the sum of: (a)
0.80% of the first $200,000,000 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 $200,000,000. The Adviser has a subadvisory agreement with
Nicholas-Applegate Capital Management LP. The Fund is not responsible
for payment of the subadvisory 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 $5,073 with regard to sales of Class A shares. Of this
amount, $619 was retained and used for printing prospectuses,
advertising, sales literature and other purposes, $3,075 was paid as
sales commissions to unrelated broker-dealers and $1,379 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 $1,632 with
regard to sales of Class C shares. Of this amount, $1,626 was paid as
sales commissions to unrelated broker-dealers and $6 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 $11,702 for Class B shares and
$523 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 1,121,272 $11,813,825 606,875 $5,327,726
Repurchased (1,180,930) (12,396,555) (662,588) (5,889,872)
Net decrease (59,658) ($582,730) (55,713) ($562,146)
CLASS B SHARES
Sold 508,893 $5,177,571 33,473 $282,745
Repurchased (794,841) (7,929,140) (254,031) (2,124,914)
Net decrease (285,948) ($2,751,569) (220,558) ($1,842,169)
CLASS C SHARES
Sold 369,684 $3,661,327 46,586 $408,780
Repurchased (304,259) (2,949,450) (71,767) (621,448)
Net increase (decrease) 65,425 $711,877 (25,181) ($212,668)
NET DECREASE (280,181) ($2,622,422) (301,452) ($2,616,983)
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, including
short-term securities and obligations of the U.S. government, during the
period ended April 30, 2003, aggregated $28,757,593 and $31,686,830,
respectively.
The cost of investments owned on April 30, 2003, including short-term
investments, for federal income tax purposes was $18,207,013. Gross
unrealized appreciation and depreciation of investments aggregated
$564,675 and $2,135,917, respectively, resulting in net unrealized
depreciation of $1,571,242. The difference between book basis and tax
basis net unrealized depreciation 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.
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
Pacific Basin Equities Fund.
580SA 4/03
6/03
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Boston and The
Commonwealth of Massachusetts, on the 30th day of June, 2003.
JOHN HANCOCK INVESTMENT TRUST III
By: *
-----------------------------
Maureen R. Ford
Chairman, President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, the
Registration has been signed below by the following persons in the capacities
and on the dates indicated.
Signature Title Date
--------- ----- ----
* Chairman, President and Chief Executive Officer
- ----------------------- (Principal Executive Officer)
Maureen R. Ford
* Senior Vice President and Chief
- ----------------------- Financial Officer
Richard A. Brown
/s/William H. King Senior Vice President, Treasurer June 30, 2003
- ----------------------- (Chief Accounting Officer)
William H. King
* Trustee
- -----------------------
Dennis S. Aronowitz
* Trustee
- -----------------------
John M. DeCiccio
* Trustee
- -----------------------
Richard P. Chapman, Jr.
* Trustee
- -----------------------
William J. Cosgrove
* Trustee
- -----------------------
Richard A. Farrell
* Trustee
- -----------------------
William F. Glavin
* Trustee
- -----------------------
Dr. John A. Moore
* Trustee
- -----------------------
Patti McGill Peterson
* Trustee
- -----------------------
John W. Pratt
*By: /s/Susan S. Newton June 30, 2003
-------------------
Susan S. Newton
Attorney-in-Fact under
Powers of Attorney dated
June 23, 2001 and
September 12, 2001 filed herewith.
John Hancock Capital Series John Hancock Strategic Series
John Hancock Declaration Trust John Hancock Tax-Exempt Series Fund
John Hancock Income Securities Trust John Hancock World Fund
John Hancock Investors Trust John Hancock Investment Trust II
John Hancock Equity Trust John Hancock Investment Trust III
John Hancock Sovereign Bond Fund
POWER OF ATTORNEY
The undersigned Trustee/Officer of each of the above listed Trusts,
each a Massachusetts business trust or Maryland corporation, does hereby
severally constitute and appoint Susan S. Newton, WILLIAM h. KING, and AVERY P.
MAHER, and each acting singly, to be my true, sufficient and lawful attorneys,
with full power to each of them, and each acting singly, to sign for me, in my
name and in the capacity indicated below, any Registration Statement on Form
N-1A and any Registration Statement on Form N-14 to be filed by the Trust under
the Investment Company Act of 1940, as amended (the "1940 Act"), and under the
Securities Act of 1933, as amended (the "1933 Act"), and any and all amendments
to said Registration Statements, with respect to the offering of shares and any
and all other documents and papers relating thereto, and generally to do all
such things in my name and on my behalf in the capacity indicated to enable the
Trust to comply with the 1940 Act and the 1933 Act, and all requirements of the
Securities and Exchange Commission thereunder, hereby ratifying and confirming
my signature as it may be signed by said attorneys or each of them to any such
Registration Statements and any and all amendments thereto.
IN WITNESS WHEREOF, I have hereunder set my hand on this Instrument as
of the 12th day of September, 2001.
/s/ Maureen R. Ford /s/Gail D. Fosler
- ------------------- -----------------
Maureen R. Ford, as Chairman and Chief Gail D. Fosler
Exective Officer
/s/John M. DeCiccio /s/William F. Glavin
- ------------------- --------------------
John M. DeCiccio, as Trustee William F. Glavin
/s/Dennis S. Aronowitz /s/John A. Moore
- ---------------------- ----------------
Dennis S. Aronowitz John A. Moore
/s/Richard P. Champman, Jr. /s/Patti McGill Peterson
- --------------------------- ------------------------
Richard P. Chapman, Jr. Patti McGill Peterson
/s/William J. Cosgrove /s/John W. Pratt
- ---------------------- ----------------
William J. Cosgrove John W. Pratt
/s/Richard A. Farell
- --------------------
Richard A. Farrell
COMMONWEALTH OF MASSACHIUSETTS)
- ------------------------------
)ss
COUNTY OF SUFFOLK )
- -----------------
Then personally appeared the above-named Richard A. Brown, who
acknowledged the foregoing instrument to be his free act and deed, before me,
this 23rd day of June, 2001.
/s/Erika Nager
--------------
Notary Public
My Commission Expires: June 14, 2007
-------------
s:\general\prwattn\01Sept12.doc
Panel A
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John Hancock Capital Series John Hancock Strategic Series
John Hancock Declaration Trust John Hancock Tax-Exempt Series Fund
John Hancock Income Securities Trust John Hancock World Fund
John Hancock Investors Trust John Hancock Investment Trust II
John Hancock Equity Trust John Hancock Investment Trust III
John Hancock Sovereign Bond Fund
Panel B
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John Hancock Bank and Thrift Opportunity Fund John Hancock Patriot Global Dividend Fund
John Hancock Bond Trust John Hancock Patriot Preferred Dividend Fund
John Hancock California Tax-Free Income Fund John Hancock Patriot Premium Dividend Fund I
John Hancock Current Interest John Hancock Patriot Premium Dividend Fund II
John Hancock Institutional Series Trust John Hancock Patriot Select Dividend Trust
John Hancock Investment Trust John Hancock Series Trust
John Hancock Cash Reserve, Inc. John Hancock Tax-Free Bond Trust
POWER OF ATTORNEY
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The undersigned Officer of each of the above listed Trusts, each a
Massachusetts business trust, or Maryland Corporation, does hereby severally
constitute and appoint SUSAN S. NEWTON, WILLIAM H. KING, AND AVERY P. MAHER, and
each acting singly, to be my true, sufficient and lawful attorneys, with full
power to each of them, and each acting singly, to sign for me, in my name and in
the capacity indicated below, any Registration Statement on Form N-1A and any
Registration Statement on Form N-14 to be filed by the Trust under the
Investment Company Act of 1940, as amended (the "1940 Act"), and under the
Securities Act of 1933, as amended (the "1933 Act"), and any and all amendments
to said Registration Statements, with respect to the offering of shares and any
and all other documents and papers relating thereto, and generally to do all
such things in my name and on my behalf in the capacity indicated to enable the
Trust to comply with the 1940 Act and the 1933 Act, and all requirements of the
Securities and Exchange Commission thereunder, hereby ratifying and confirming
my signature as it may be signed by said attorneys or each of them to any such
Registration Statements and any and all amendments thereto.
IN WITNESS WHEREOF, I have hereunder set my hand on this Instrument as
of the 23rd day of June, 2001.
/s/Richard A. Brown
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Richard A. Brown
Chief Financial Officer
Commonwealth of Massachusetts )ss
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COUNTY OF Suffolk )
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Then personally appeared the above-named Richard A. Brown, who
acknowledged the foregoing instrument to be his free act and deed, before me,
this 23rd day of June, 2001.
/s/Erika L. Nager
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Notary Public
My Commission Expires: June 14, 2007
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