Annual Report
for John Hancock Variable Series Trust I
December 31, 2003
[LOGO] John Hancock
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Not FDIC Insured Not Bank Guaranteed May Lose Value
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Not a Deposit Not Insured by Any Federal Government Agency
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Inception: May 1, 1998
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Emerging Markets Equity Fund
Van Kampen Narayan Ramachandran
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.. In 2003, the Fund returned 56.9% outperforming its benchmark, the MSCI EMF
Index.
.. The Fund outperformed its benchmark primarily due to favorable stock
selection and country allocation decisions. Sector allocation decisions
detracted, primarily due to the Fund's modest exposure to cash.
.. Stock selection exposures were most positive from the Fund's holdings in
Russia, South Korea and India and from overweight positions in
outperforming countries such Turkey and Thailand.
.. The Fund's exposure to the materials and financial sectors and to South
Africa, South Korea and Russia were some of the largest contributors to
absolute returns.
.. The top contributing stocks to absolute returns came from a variety of
sectors and included Samsung Electronics, Anglo American and Petrobras.
Stocks that detracted the most included LG Card Co. and SK Telecom.
.. The manager combines top-down country allocation decisions with bottom-up
fundamental stock selection. The manager selects stocks within undervalued
countries using fundamental proprietary research to identify companies with
strong earnings growth and reasonable valuations.
[CHART]
Line Chart
Historical Fund Return
$10,000
Investment made 5/1/98
(Fund Inception Date)
Emerging Markets MSCI Emerging Markets
Equity Fund Free Index (2)
---------------- ---------------------
5/01/1998 $10,000.00 $10,000.00
5/31/1998 8,687.98 8,630.00
6/30/1998 7,960.03 7,724.71
7/31/1998 8,533.05 7,969.59
8/31/1998 5,844.62 5,665.58
9/30/1998 6,556.15 6,024.78
10/31/1998 7,080.77 6,659.19
11/30/1998 7,667.81 7,213.23
12/31/1998 7,113.31 7,108.64
1/31/1999 6,933.57 6,994.19
2/28/1999 6,732.04 7,062.03
3/31/1999 7,577.83 7,992.81
4/30/1999 8,290.44 8,981.52
5/31/1999 7,990.48 8,929.43
6/30/1999 9,228.06 9,942.92
7/31/1999 8,932.36 9,672.47
8/31/1999 8,752.42 9,760.49
9/30/1999 8,575.24 9,430.58
10/31/1999 9,055.88 9,631.46
11/30/1999 10,560.14 10,495.40
12/31/1999 12,901.29 11,830.41
1/31/2000 12,556.47 11,901.39
2/29/2000 13,603.32 12,058.49
3/31/2000 13,829.75 12,117.58
4/30/2000 12,047.85 10,968.83
5/31/2000 11,235.00 10,515.82
6/30/2000 12,012.47 10,885.98
7/31/2000 11,066.32 10,326.44
8/31/2000 11,162.35 10,377.04
9/30/2000 9,707.19 9,471.12
10/31/2000 8,762.37 8,784.46
11/30/2000 7,692.06 8,016.70
12/31/2000 7,726.21 8,209.91
1/31/2001 8,827.46 9,340.41
2/28/2001 7,938.17 8,609.06
3/31/2001 7,092.43 7,763.65
4/30/2001 7,533.72 8,147.17
5/31/2001 7,613.46 8,244.12
6/30/2001 7,488.06 8,075.12
7/31/2001 7,035.61 7,564.77
8/31/2001 6,855.90 7,489.88
9/30/2001 5,800.53 6,330.45
10/31/2001 6,216.98 6,723.57
11/30/2001 6,947.56 7,425.51
12/31/2001 7,445.52 8,015.09
1/31/2002 7,710.67 8,286.80
2/28/2002 7,912.91 8,422.71
3/31/2002 8,414.89 8,929.75
4/30/2002 8,425.45 8,987.80
5/31/2002 8,339.70 8,844.89
6/30/2002 7,732.18 8,181.52
7/31/2002 7,180.60 7,558.91
8/31/2002 7,186.77 7,675.32
9/30/2002 6,437.58 6,847.15
10/31/2002 6,841.91 7,291.53
11/30/2002 7,280.03 7,793.19
12/31/2002 6,944.46 7,534.45
1/31/2003 6,806.33 7,501.30
2/28/2003 6,667.82 7,298.77
3/31/2003 6,440.33 7,091.48
4/30/2003 7,008.44 7,723.33
5/31/2003 7,541.39 8,277.87
6/30/2003 7,973.17 8,749.71
7/31/2003 8,454.58 9,297.44
8/31/2003 9,082.73 9,921.30
9/30/2003 9,205.9 9,993.72
10/31/2003 9,898.28 10,844.19
11/30/2003 10,103.15 10,977.57
12/31/2003 10,896.18 11,773.45
Value on 12/31/03:
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$10,896 Emerging Markets Equity Fund
$11,773 MSCI Emerging Markets Free Index (2)
MORNINGSTAR CATEGORY+:
.. Diversified Emerging Markets
MORNINGSTAR RISK+:
.. Above Average (VL/VUL)
.. Above Average (VA)
MORNINGSTAR RATING+:
.. *** (VL/VUL)
.. *** (VA)
TOP TEN HOLDINGS (as of December 31, 2003)
% of
Assets
------
Samsung 8.5%
Anglo American 4.1%
Petroleo Brasileiro SA 2.6%
JSC Norilsk Nickel 2.4%
America Movil SA de CV 2.0%
Surgutneftegaz 1.7%
Telefonos de Mexico SA 1.6%
Companhia Vale Do Rio Doce 1.6%
Lukoil Holding 1.6%
Standard Bank Investment Corp., Ltd. 1.5%
AVERAGE ANNUAL TOTAL RETURNS*
Emerging Markets MSCI Emerging
Equity Fund(1) Markets Free Index(2)
---------------- ---------------------
1 Year 56.90% 56.26%
3 Years 12.14 12.77
5 Years 8.90 10.62
Since Inception (5/1/98) 1.52 2.92
DIVERSIFICATION BY REGION AND COUNTRY(3) (as of December 31, 2003)
% of
Assets
------
Asia 51.2%
United States 23.6%
Middle East/Africa 20.5%
Latin America 2.8%
Europe 2.1%
DIVERSIFICATION BY REGION(4)
Developed Markets 0%
Emerging Markets 100%
(1) Returns reflect extra-ordinary capital contribution of $445.000 in June
1999.
(2) On May 31, MSCI implemented the final phase of its enhanced methodology
which shifts to a weighting system based on freely floated or publicly
available shares, rather than just market capitalization. South Africa and
South Korea market weight increased the most while Mexico, India and
Malaysia declined the most.
* Total returns are for the period ended December 31, 2003. Returns represent
past performance, assume reinvestment of all distributions and are not
indicative of future performance. Investment returns and principal value of
fund shares will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. International investing entails special
risks as outlined in the prospectus. The performance of the fund on this
page is reported net of Trust level charges (i.e. investment management
fees and operating expenses). It does not reflect expense and charges of
the applicable separate accounts and variable products, all of which vary
to a considerable extent and are described in your product prospectus.
Performance would be lower if expenses and charges of the separate accounts
and products were reflected.
+ Source: MorningStar, Inc. Data as of 12/31/03. VL represents Variable Life
subaccounts, VUL represents Variable Universal Life subaccounts and VA
represents Variable Annuity subaccounts Hancock VL/VUL subaccounts were
rated against 127 VL/VUL subaccounts and 227 VA subaccounts in the
Morningstar Diversified Emerging Markets category. This represents the
Morningstar 3 year rating.
"Van Kampen" is a registered trade name used by Morgan Stanley Investment
Management, Inc. in its role as a subadvisor to the Fund.
(3) Calculations based upon country in which security is traded (listed).
(4) Calculations based upon country in which security is domiciled.
STATEMENT OF ASSETS AND LIABILITIES
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 2003
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(000's Omitted)
ASSETS
Long term investments at cost ...................................... $ 47,315
Net unrealized appreciation of investments ......................... 16,144
Short-term investments at value .................................... 1,205
--------
Total investments ............................................ 64,664
Cash ............................................................... 1
Foreign currency at value (cost $261) .............................. 266
Receivable for:
Investments sold ................................................ 72
Dividends ....................................................... 222
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Total assets ....................................................... 65,225
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LIABILITIES
Payables for:
Investments purchased ........................................... 8
Fund shares purchased ........................................... 230
Other liabilities ............................................... 314
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Total liabilities .................................................. 552
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Net assets ......................................................... $ 64,673
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Shares of beneficial interest outstanding .......................... 7,263
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Net asset value per share .......................................... $ 8.90
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Composition of net assets:
Capital paid-in ................................................. $ 65,342
Accumulated net realized loss on investments, and
foreign currency transactions ................................ (16,376)
Undistributed net investment loss ............................... (134)
Net unrealized appreciation/(depreciation) of:
Investments .................................................. 16,144
Translation of assets and liabilities in foreign
currencies ................................................ (303)
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Net assets ......................................................... $ 64,673
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STATEMENT OF OPERATIONS
JOHN HANCOCK VARIABLE SERIES TRUST I
For the Year Ended December 31, 2003
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(000's Omitted)
INVESTMENT INCOME
Interest ...................................................... $ 21
Dividends ..................................................... 1,249
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Total investment income ............................................. 1,270
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EXPENSES
Investment advisory fee ....................................... 661
Auditors fees ................................................. 6
Custodian fees ................................................ 308
Legal fees .................................................... 3
Printing & mailing fees ....................................... 3
Trustees' fees ................................................ 1
Other fees .................................................... 9
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Total expenses ...................................................... 991
Less expenses reimbursed ...................................... (286)
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Net expenses ........................................................ 705
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Net investment income ............................................... 565
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REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain on:
Investments ................................................... 2,193
Foreign currency transactions ................................. 586
Change in unrealized appreciation (depreciation) on:
Investments ................................................... 18,424
Translation of assets and liabilities in foreign
currencies ................................................. (311)
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Net realized and unrealized gain .................................... 20,892
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Net increase in net assets resulting from
operations ....................................................... $21,457
=======
See notes to financial statements.
STATEMENT OF CHANGES IN NET ASSETS
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 2003
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(000's Omitted)
Year Ended Year Ended
December 31, December 31,
2003 2002
------------ ------------
INCREASE (DECREASE) IN NET ASSETS
From operations
Net investment income ................................................ $ 565 $ 99
Net realized gain (loss) ............................................. 2,779 (1,885)
Change in net unrealized appreciation (depreciation) ................. 18,113 (1,219)
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Net increase (decrease) in net assets resulting from operations ... 21,457 (3,005)
Distributions to shareholders from:
Net investment income ................................................ (803) (93)
Realized gains ....................................................... (2,285)
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Decrease in net assets resulting from distributions ............... (3,088) (93)
From fund share transactions:
Proceeds from shares sold ............................................ 82,919 98,743
Distributions reinvested ............................................. 3,088 93
Payment for shares redeemed .......................................... (74,209) (90,188)
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Increase in net assets from fund share transactions ............... 11,798 8,648
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NET INCREASE IN NET ASSETS .............................................. 30,167 5,550
NET ASSETS
Beginning of Period .................................................. 34,506 28,956
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End of Period ........................................................ $ 64,673 $ 34,506
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Analysis of fund share transactions:
Sold ................................................................. 12,330 15,252
Reinvested ........................................................... 376 14
Redeemed ............................................................. (11,202) (14,004)
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Net increase in fund shares outstanding ................................. 1,504 1,262
======== ========
See notes to financial statements.
FINANCIAL HIGHLIGHTS
JOHN HANCOCK VARIABLE SERIES TRUST I
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Selected data for each share of beneficial interest outstanding throughout the
period indicated:
Emerging Markets Fund
-----------------------------------------------------------
Year Ended December 31,
-----------------------------------------------------------
2003 2002 2001 2000 1999(c)
------- ------- ------- ------- -------
Net Assets Value at Beginning of Period ..................... $ 5.99 $ 6.44 $ 6.70 $ 12.26 $ 7.09
Income from Investment Operations:
Net Investment Income (Loss) ............................. 0.09 0.02 0.05 (0.02) 0.03
Net Realized and Unrealized Gain (Loss) on
Investments(a) ........................................ 3.27 (0.45) (0.29) (4.91) 5.35
------- ------- ------- ------- -------
Total From Investment Operations ......................... 3.36 (0.43) (0.24) (4.93) 5.38
Less Distributions:
Distribution from Net Investment Income .................. (0.12) (0.02) (0.01)
Distribution from Net Realized Gains on Investments ...... (0.33) (0.62) (0.10)
Distribution from Excess of Net Investment Income/Gains... (0.42)
Distribution from Capital Paid-in ........................ (0.02) (0.01)
------- ------- ------- ------- -------
Total Distributions ...................................... (0.45) (0.02) (0.02) (0.63) (0.53)
Capital Contributions .................................... 0.32
------- ------- ------- ------- -------
Net Assets Value at End of Period ........................... $ 8.90 $ 5.99 $ 6.44 $ 6.70 $ 12.26
======= ======= ======= ======= =======
Total Investment Return(b) .................................. 56.90% (6.73)% (3.63)% (40.11)% 81.37%(e)
Ratios/Supplemental Data:
Ratio of Operating Expenses to Average Net Assets ........ 1.60%(d) 1.60%(d) 1.40%(d) 1.32%(d) 1.39%(d)
Ratio of Net Investment Income (Loss) to Average Net
Assets ................................................ 1.28% 0.27% 0.77% (0.28)% 0.19%
Portfolio Turnover Rate .................................. 92.85% 88.40% 120.72% 103.90% 196.32%
Net Assets End of Period (000s Omitted) ..................... $64,673 $34,506 $28,956 $31,010 $32,596
(a) The amount shown at this caption for each share outstanding throughout the
year may not accord with the change in the aggregate gains and losses in
the portfolio securities for the year because of the timing of the
purchases and withdrawals of the shares in relation to the fluctuating
market values of the portfolio.
(b) The performance does not reflect expenses and charges of the applicable
separate accounts and variable products, all of which vary to a
considerable extent and are described in your product's prospectus.
(c) The Fund entered into a new Sub-Advisory Agreement with Morgan Stanley Dean
Witter Investment Management, Inc. during the period shown.
(d) Expense ratio is net of expense reimbursements. Had such reimbursements not
been made the expense ratio would have been 2.24%, 3.45%, 4.02%, 2.49%, and
3.44%, for the years ended December 31, 2003, 2002, 2001, 2000, and 1999,
respectively.
(e) The total investment return includes the effect of the capital contribution
of $.32 per share. The total investment return without the capital
contribution would have been 79.02%.
SCHEDULE OF INVESTMENTS
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 2003
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EMERGING MARKETS EQUITY FUND
Market
Name of Issuer Shares Value
-------------- --------- -------
(000's)
COMMON STOCK
Brazil - 0.5%
Aracruz Celulose SA - ADR * (BG) ...................... 9,100 $ 334
Egypt - 0.8%
Egypt Mobile Phone * (J2) ............................. 25,130 308
Orascom Construction Industries * (BJ) ................ 20,144 238
------
546
Hong Kong - 6.9%
ASIA Aluminum Holdings, Ltd. (BI) ..................... 418,000 83
Avichina Industry * (BV) .............................. 589,000 125
BYD Co. (BL) .......................................... 99,000 261
China Life Insurance Co., Ltd. * (JR) ................. 438,000 358
China Merchants Holdings
International Co., Ltd. * (BL) ..................... 98,000 129
China Oilfield Series * (BB) .......................... 768,000 272
China Petroleum (BB) .................................. 520,000 233
China Res Holdings (FB) ............................... 160,000 74
China Shipping Development * (BR) ..................... 322,000 236
China Telecom Corp. * (J2) ............................ 356,000 146
China Unicom, Ltd. (J2) ............................... 162,000 151
CNOOC, Ltd. * (BB) .................................... 436,000 856
Fountain Set Holdings (BY) ............................ 233,000 159
Grande Holdings (BW) .................................. 121,000 155
Hopewell Highway * (BT) ............................... 301,000 171
Huaneng Power International * (J3) .................... 144,000 249
Kingboard Chemical (JY) ............................... 89,000 137
Lianhua Supermarket * (JF) ............................ 125,000 132
Moulin International Holding * (JL) ................... 72,000 48
Norstar Founders * (BU) ............................... 216,000 70
PetroChina Company, Ltd. (BB) ......................... 274,000 157
PICC Property & Casualty (JR) ......................... 174,000 78
Shougang Concord (BF) ................................. 755,000 111
Victory City International (BY) ....................... 92,000 40
Wumart Stores, Inc. * (JD) ............................ 63,000 62
------
4,493
Hungary - 0.6%
Gedeon Richter * (JO) ................................. 3,503 412
India - 6.0%
Bharat Heavy Electricals, Ltd. (BK) ................... 31,450 351
Colgate Palmolive Co. * (JK) .......................... 19,051 67
Container Corp. of India, Ltd. (BJ) ................... 14,092 206
GlaxoSmithKline Pharmaceuticals (JO) .................. 7,000 88
Gujarat Ambuja Cements Ltd. (BD) ...................... 25,250 169
Hero Honda Motors, Ltd. (BV) .......................... 16,950 167
Hindlaco Industries (BD) .............................. 4,850 150
Hindustan Lever Ltd. (JJ) ............................. 29,700 134
Hindustan Petroleum Corp., Ltd. (BB) .................. 14,000 135
Indialnfo, Ltd. (JA) .................................. 10,639
Indiana Development Bank (JQ) ......................... 103,000 141
Infosys Technologies, Ltd. * (JU) ..................... 3,109 380
ITC, Ltd. (JI) ........................................ 6,500 141
Morgan Stanley Group (JQ) ............................. 705,000 261
Oil & Natural Gas (BB) ................................ 10,750 $ 189
Ranbaxy Laboratories, Ltd. (JO) ....................... 8,660 209
Reliance Industries, Inc. * (BC) ...................... 16,300 205
State Bank of India (JP) .............................. 19,600 263
Steel Author India * (BF) ............................. 129,000 145
Tata Ironsteel (BF) ................................... 20,000 195
Tata Engineering and Locomotive Co.,
Ltd. (BD) .......................................... 27,400 272
------
3,868
Indonesia - 3.1%
Astra International (BV) .............................. 650,961 386
Bank Central (JP) ..................................... 430,500 170
Bank Mandiri (JP) ..................................... 989,500 117
Bank Rakyat * (JP) .................................... 1,029,000 153
Bumi Resources Tbk (BB) ............................... 3,842,000 228
HM Sampoerna (JI) ..................................... 256,500 136
Indocement Tunggal * (BD) ............................. 593,000 150
Ramayana Lestari * (JD) ............................... 518,000 268
Telekomunikasi Indiana - Ser. B (J1) .................. 491,000 394
------
2,002
Jordan - 0.2%
Arab Bank (JP) ........................................ 300 129
Malaysia - 1.3%
Commerce Asset Holdings * (JP) ........................ 102,000 110
Magnum Corp. Berhad * (BZ) ............................ 259,000 189
Malayan Banking Berhad * (JP) ......................... 55,900 142
Resorts World Berhad * (BZ) ........................... 51,000 136
SP Setia (JS) ......................................... 168,499 155
YTL Corp., Berhad (J3) ................................ 81,000 92
------
824
Mexico - 1.4%
Cifra SA de CV - Ser. V * (JD) ........................ 125,472 358
GF BBVA Bancomer - Ser. B (JP) ........................ 372,861 319
Wal-Mart de Mexico SA de CV - Ser. C * (JD) ........... 81,706 218
------
895
Singapore - 0.4%
TPV Technology (JX) ................................... 453,000 240
South Africa - 13.1%
ABSA Group, Ltd. * (JP) ............................... 33,800 213
African Bank Investments, Ltd. * (JP) ................. 315,000 444
African Life Assured (JR) ............................. 146,600 335
Anglo American Platinum Corp., Ltd. * (BF) ............ 5,200 227
Anglo American plc * (BF) ............................. 84,827 1,813
Anglogold * (BF) ...................................... 9,100 427
Edgars Consolidated Stores * (JE) ..................... 10,100 193
FirstRand, Ltd. (JP) .................................. 451,698 602
Gold Fields Mining * (BF) ............................. 34,400 491
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 2003
- --------------------------------------------------------------------------------
EMERGING MARKETS EQUITY FUND
Market
Name of Issuer Shares Value
-------------- ----------- -------
(000's)
COMMON STOCK - Continued
South Africa - Continued
Harmony Gold Mining * (BF) .......................... 5,612 $ 91
Impala Platinum Holdings, Ltd. (BF) ................. 6,128 531
M-Cell, Ltd. (J2) ................................... 164,210 698
Massmart * (JF) ..................................... 41,100 187
Naspers, Ltd. - N Shares (BZ) ....................... 30,000 186
Pretoria Portland Cement (BD) ....................... 500 11
Shoprite Holdings, Ltd. (JF) ........................ 137,300 192
Standard Bank Investment Corp., Ltd. (JP) ........... 160,613 941
Steinhoff International Holdings (BW) ............... 108,000 124
Telkom Group, Ltd. (J1) ............................. 72,100 748
-------
8,454
South Korea - 15.7%
Cheil Industries (BY) ............................... 11,140 162
Daewoo Shipbuilding & Marine * (BM) ................. 35,860 460
Daishin Securities * (JQ) ........................... 22,290 327
Good Morning Securities Co., Ltd. (JQ) .............. 31,650 146
Handsome Corp. (BY) ................................. 24,870 253
Hankook Tire Co., Ltd. (BU) ......................... 33,190 251
Honam Petrochemical (BC) ............................ 6,530 337
Hyundai Department Store * (JE) ..................... 15,260 498
Hyundai Mobis (BM) .................................. 15,690 844
Kookmin Bank * (JP) ................................. 8,140 305
KT & G Corp. * (JI) ................................. 14,130 246
LG Card (JQ) ........................................ 5,810 15
LG Investment & Securities Co., Ltd. * (JQ) ......... 25,600 178
Pohang Iron & Steel Co., Ltd. (BF) .................. 500 68
Samsung Display Devices Co. (JY) .................... 15,000 1,769
Samsung Electronics * (JY) .......................... 8,750 3,312
Shinhan Financial (JP) .............................. 12,440 199
SK Telecom Co., Ltd. * (J2) ......................... 1,700 284
STX Corp. (BM) ...................................... 7,460 57
STX Shipbuilding * (BR) ............................. 16,510 220
Tongyang Cement Co. (BI) ............................ 2,940 216
-------
10,147
Taiwan - 10.4%
Acer, Inc. * (JX) ................................... 122,466 182
Asia Optical Co., Inc. (JL) ......................... 70,000 483
Catcher Technology Co., Ltd. (JY) ................... 30,000 108
China Trust Finance (JP) ............................ 360,109 362
CTCI Corp. (BJ) ..................................... 194,000 157
Cyberlink Corp. (JV) ................................ 31,000 128
Eva Airways (BQ) .................................... 255,655 104
Evergreen Marine Corp. (BR) ......................... 354,540 309
Fubon Financial HL (JQ) ............................. 282,000 270
Grand Hall Enterprises (BO) ......................... 12,000 56
Hon Hai Precision Insustry Co., Ltd. -
Cl. G * (JY) ..................................... 119,680 471
Infortrend Technologies (JT) ........................ 56,000 184
Kaulin Manufacturing (BO) ........................... 58,000 $ 84
Largan Precision Co. (BL) ........................... 26,450 257
Media Tekin Corp. (J0) .............................. 50,000 470
Nan Ya Plastic Corp. (BC) ........................... 151,180 218
Novatek Microelect * (J0) ........................... 48,500 137
Phoenixtec Power (J3) ............................... 216,695 254
Pihsiang Machinery (JL) ............................. 11,150 39
Polaris Securities (JQ) ............................. 623,680 292
Richtek Technologies * (J0) ......................... 9,792 53
Sunplus Technology * (J0) ........................... 59,000 110
Taishin Financial (JP) .............................. 216,000 160
Taiwan Cellular Corp. (J2) .......................... 222,000 193
Taiwan Cement (BD) .................................. 768,060 378
Taiwan Navigation (BO) .............................. 192,800 128
Taiwan Semiconductor * (J0) ......................... 99,114 185
Waffer Technology (BF) .............................. 81,000 247
Ya Hsing Indiana Co. * (JY) ......................... 343,000 444
Yuanta Core Pacific (JQ) ............................ 233,236 139
Zyxel Communication (JW) ............................ 46,000 96
-------
6,698
Thailand - 5.7%
Asian Property Development (JS) ..................... 880,800 120
Bangkok Bank Co., Ltd. * (JP) ....................... 290,000 842
Banpu Co. (BF) ...................................... 27,800 81
BEC World Public Co., Ltd. (JA) ..................... 11,000 68
Italian-Thai Development Public Co.,
Ltd. (BD) ........................................ 104,000 310
Kasikornbank plc (JP) ............................... 166,200 273
Land & Houses (BJ) .................................. 993,800 318
MBK PCL (JS) ........................................ 47,500 43
PTT Public Co. (BB) ................................. 52,400 211
Ratchaburi Electric (J3) ............................ 64,900 74
Seven Eleven * (JE) ................................. 45,300 64
Siam Cement Co. * (BD) .............................. 73,600 472
Siam Commercial Bank Public Co. *
(JP) ............................................. 149,800 210
Sino Thai Engineering * (BJ) ........................ 140,800 59
Thai Airways International plc (BQ) ................. 94,000 113
Thai Farmers Bank Public Co., Ltd. *
(JP) ............................................. 188,100 332
Thai Olefin Public * (BC) ........................... 52,100 58
Thai Plastic & Chemical Public Co.,
Ltd. (BC) ........................................ 14,300 71
-------
3,719
Turkey - 6.0%
Akbank TAS * (JP) ................................... 68,890,305 360
Akcansa Cimento SA (BD) ............................. 107,330,825 307
Arcelik AS (BW) ..................................... 58,868,750 327
Enka Insaat (BL) .................................... 9,803,129 255
Ford Otomotiv (BV) .................................. 5,505,000 37
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 2003
- --------------------------------------------------------------------------------
EMERGING MARKETS EQUITY FUND
Market
Name of Issuer Shares Value
-------------- ----------- -------
(000's)
COMMON STOCK - Continued
Turkey - Continued
Hurriyet Gazete * (JA) .............................. 114,886,700 $ 409
Migros Turk TAS (JF) ................................ 4,096,000 59
Tofas Otomobil (BV) ................................. 93,221,269 206
Trakya * (BI) ....................................... 64,478,650 142
Turkcell Iletisim Hizmetleri AS (J2) ................ 39,719,000 396
Turkiye Garanti Bankasi AS * (JP) ................... 177,759,700 519
Turkiye Is Bankasi - Cl. C * (JP) ................... 158,340,512 643
Yapi ve Kredi Bankasi AS * (JP) ..................... 102,596,000 212
-------
3,872
United Kingdom - 1.4%
Anglo American plc (BF) ............................. 23,420 505
Gazprom Oao * (BB) .................................. 16,500 427
-------
932
United States - 23.2%
Advanced Semiconductor Engineering, Inc. (JY) ....... 21,340 108
America Movil SA de CV - ADR Ser. L (J2) ........... 47,233 1,291
Banco Bradesco - ADR (JP) ........................... 6,039 160
Banco Itau SA - ADR * (JP) .......................... 8,594 419
Cemex SA de CV - ADR * (BD) ......................... 12,400 325
Check Point Software Technologies, Ltd. * (JT) ..... 36,512 614
Coca-Cola Co. - ADR (JG) ............................ 4,600 98
Companhia De Bebidas ADR (JG) ....................... 30,723 784
Companhia Energetica de Minas Gerias - ADR (J3) ..... 9,700 177
Companhia Siderurgica Nacional SA - ADR * (BF) ...... 4,300 230
Companhia Vale do Rio Doce - ADR (BF) ............... 15,547 793
Companhia Vale Do Rio Doce - ADR (BF) ............... 3,600 211
Compania Anonima Nacional
Telefonos De Venezuela - ADR (J1) ................ 10,056 153
Compania Brasileira de Distribuicao
Grupo Pao de Acucar - ADR (JF) ................... 8,100 204
Compania de Minas Buenaventura SA - ADR * (BF) ...... 15,500 438
ECI Telecommunications, Ltd. * (JW) ................. 7,073 41
Grupo Aeroportuario Sur - ADR * (BT) ................ 8,930 157
Grupo Financiero BBVA Bancomer,
SA de CV * (JP) .................................. 6,600 113
Grupo Televisa SA - GDR * (JA) ...................... 10,000 399
Harmony Gold Mining, Ltd. (BF) ...................... 1,200 19
JSC Norilsk Nickel - ADR (BF) ....................... 23,700 1,544
Lukoil Holding - ADR * (BB) ......................... 10,754 1,000
Magyar Tavkozlesi - ADR * (J1) ...................... 2,634 49
Marvell Technology Group, Ltd. * (J0) ............... 1
Mobile Systems - ADR * (J2) ......................... 4,100 339
Mobile Telesystems OJSC - GDR
144A (a) (J2) .................................... 3,000 238
OAO Gazprom - ADR * (BL) ............................ 4,200 $ 109
Orascom Construction Industries - GDR (BJ) .......... 10,110 195
Petroleo Brasileiro SA * (BB) ....................... 25,641 750
Petroleo Brasileiro SA - ADR (BB) ................... 33,828 896
Surgutneftegaz - ADR (BB) ........................... 37,064 1,103
Telefonos de Mexico SA - ADR (J1) ................... 30,480 1,007
Telesp Celular Participacoes SA - ADR * (J2) ........ 6,200 41
Telkom SA Ltd. - ADR * (J1) ......................... 2,600 110
Tenaris SA - ADR (BA) ............................... 4,100 137
Unibanco - Uniao de Bancos
Brasileiros SA - GDR * (JP) ...................... 11,200 279
Votorantim Celulose e Papel SA - ADR (BG) ........... 9,100 285
Wal-Mart de Mexico SA de CV - ADR (JD) .............. 3,016 86
Yukos Corp. - ADR * (BB) ............................ 2,096 88
-------
14,990
-------
TOTAL COMMON STOCK- ................................. 96.7% 62,555
PREFERRED STOCK
Brazil - 0.8%
Banco Bradesco SA (JP) .............................. 21,960,000 115
BCO Itau Holdings Financeira (JP) ................... 359,000 36
Companhia Energetica de Minas Gerais (J3) .......... 8,489,503 155
Telesp Celular Participacoes SA (J2) ................ 83,929,111 220
-------
526
South Korea - 0.6%
Daishin Securities (JQ) ............................. 5,840 42
Samsung Electronics (JY) ............................ 1,630 336
-------
378
-------
TOTAL PREFERRED STOCK- .............................. 1.4% 904
Par
Value
-------
(000's)
SHORT-TERM INVESTMENTS - 1.9%
Investment in joint trading account
(Note B)
1.061% due 01/02/04 .................................. $1,205 1,205
------ -------
TOTAL INVESTMENTS- ................................ 100.0% 64,664
Cash and Receivables, less payables- ................. 0.0% 9
------ -------
NET ASSETS- ....................................... 100.0% $64,673
====== =======
* Non-income producing security.
ADR-American Depository Receipt
GDR-Global Depository Receipt.
(a) Pursuant to Rule 144A under the Securities Act of 1993, these securities
may be resold in transactions exempt from registration, normally to
qualified institutional buyers. At December 31, 2003, securities aggregated
$238 or 0.4% of net assets of the Portfolio.
See notes to financial statements.
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 2003
- --------------------------------------------------------------------------------
EMERGING MARKETS EQUITY FUND
SUMMARY OF LONG-TERM SECURITIES BY INDUSTRY (UNAUDITED)
Market % of
Industry Value Long-Term
Industry Abbreviation (000s) Investments
-------- ------------ ------- -----------
Banks .................................. JP $ 9,141 14.4%
Metals & Mining ........................ BF 8,168 12.9%
Electronic Equipment & Instruments ..... JY 6,684 10.5%
Oil & Gas .............................. BB 6,546 10.3%
Wireless Telecommunications Services ... J2 4,306 6.8%
Construction Materials ................. BD 2,543 4.0%
Diversified Telecommunication
Services ............................ J1 2,461 3.9%
Diversified Financials ................. JQ 1,812 2.9%
Machinery .............................. BM 1,362 2.1%
Construction & Engineering ............. BJ 1,174 1.8%
Industrial Conglomerates ............... BL 1,010 1.6%
Electric Utilities ..................... J3 1,002 1.6%
Multiline Retail ....................... JD 991 1.6%
Semiconductor Equipment & Products ..... J0 956 1.5%
Automobiles ............................ BV 921 1.4%
Chemicals .............................. BC 890 1.4%
Beverages .............................. JG 881 1.4%
Media .................................. JA 875 1.4%
Internet Software & Services ........... JT 798 1.3%
Food & Drug Retailing .................. JF 774 1.2%
Insurance .............................. JR 771 1.2%
Marine ................................. BR 765 1.2%
Specialty Retail ....................... JE 755 1.2%
Pharmaceuticals ........................ JO 710 1.1%
Paper & Forest Products ................ BG 620 1.0%
Textiles & Apparel ..................... BY 614 1.0%
Household Durables ..................... BW 606 1.0%
Health Care Equipment & Supplies ....... JL 569 0.9%
Tobacco ................................ JI 522 0.8%
Hotels Restaurants & Leisure ........... BZ 511 0.8%
Building Products ...................... BI 441 0.7%
Computers & Peripherals ................ JX 422 0.7%
IT Consulting & Services ............... JU 380 0.6%
Electrical Equipment ................... BK 351 0.6%
Transportation Infrastructure .......... BT 328 0.5%
Auto Components ........................ BU 320 0.5%
Commercial Services & Supplies ......... BO 267 0.4%
Airlines ............................... BQ 217 0.3%
Real Estate Investment Trust ........... JS 155 0.2%
Communications Equipment ............... JW 137 0.2%
Energy Equipment & Services ............ BA 137 0.2%
Household Products ..................... JJ 134 0.2%
Software ............................... JV 128 0.2%
Real Estate Development ................ JS 120 0.2%
Finance ................................ FB 74 0.1%
Personal Products ...................... JK 67 0.1%
Real Estate Operations ................. JS 43 0.1%
------- -----
$63,459 100.0%
======= =====
NOTES TO FINANCIAL STATEMENTS
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 2003
- --------------------------------------------------------------------------------
(000's Omitted)
NOTE A--ORGANIZATION
John Hancock Emerging Markets Equity Fund (the "Fund") is a diversified
series of John Hancock Variable Series Trust I (the "Trust"), an open-end
investment management company registered under the Investment Company Act of
1940. The Trust is organized as a Massachusetts business trust and consists of
thirty different funds as of December 31, 2003. The results of this Fund are
included in this report. The results of the other Funds in the Trust are
presented under separate cover. The Trust may add or delete Funds in the future
to accommodate various investment objectives. The Trust has issued shares of
beneficial interest exclusively to John Hancock Variable Life Account U
("JHVLAU"), John Hancock Variable Life Account V ("JHVLAV"), John Hancock
Variable Life Account S ("JHVLAS"), and John Hancock Variable Annuity Account I
("JHVAAI") to fund policies and contracts issued by the John Hancock Variable
Life Insurance Company ("JHVLICO"), and to John Hancock Variable Annuity Account
U ("JHVAAU"), John Hancock Variable Annuity Account V ("JHVAAV"), John Hancock
Variable Life Account UV ("JHVLAUV"), John Hancock Variable Annuity Account H
("JHVAAH"), and John Hancock Variable Annuity Account JF ("JHVAAJF") to fund
contracts and policies issued by John Hancock Life Insurance Company ("John
Hancock" or "JHLICO"), to John Hancock Variable Life Account PPM-1 ("PPM-1"),
and to John Hancock Variable Life Account PPM-2 ("PPM-2").
NOTE B--ACCOUNTING POLICIES
Valuation of investments: Common stocks and other such securities traded on
national exchanges are normally valued on the basis of closing prices.
Securities traded in the over-the-counter market and securities with no sales on
the day of valuation are normally valued at their last available bid price.
Short-term investments, with a maturity not to exceed 60 days, are valued
at amortized cost, which approximates market value.
Fair value pricing, determined in good faith by the Board of Trustees, may
be used by the Fund when current market values are unavailable or when an event
occurs after the close of the exchange on which the Fund's portfolio securities
are principally traded that is likely to have changed the value of the
securities. The use of fair value pricing by the Fund may cause the net asset
value of its shares to differ significantly from the net asset value that would
be calculated using current market values. Securities for which prices are not
available from an independent pricing service, but where an active market
exists, are valued using market quotations obtained from one or more dealers
that make markets in the securities.
Investment security transactions are recorded on the date of purchase or
sale.
Repurchase agreements: The Fund may enter into repurchase agreements which
are contracts under which the Fund would acquire a security for a relatively
short period (usually not more than 7 days) subject to the obligation of the
seller to repurchase and the Fund to resell such security at a fixed time and
price (representing the Fund's cost plus interest). The Fund will enter into
repurchase agreements only with member banks of the Federal Reserve System and
with "primary dealers" in United States Government Securities. The underlying
securities, which represent the collateral of the agreement, must be marked to
market daily to ensure that each repurchase agreement is fully collateralized at
all times. The Fund will not invest more than 10% of its net assets in
repurchase agreements maturing in more than 7 days.
Joint trading account: Pursuant to an exemptive order issued by the
Securities and Exchange Commission, the order permits the Fund to pool daily
uninvested cash balances into a joint account for the purpose of investing the
cash balances in short-term repurchase agreements, commercial paper and other
short-term investments which in no event will have a maturity in excess of 7
days. Joint account holdings as of December 31, 2003 are as follows:
Name of Issuer Market Value
- ------------------------------------------------ ------------
Alpine Securitization Corp., 1.12%, due 01/07/04 $29,995
Alpine Securitization Corp., 1.12%, due 01/06/04 19,998
Barclays US Fund, 1.10%, due 01/05/04 29,997
Cargill Asia Pacific, 1.06%, due 01/02/04 20,000
Cargill Asia Pacific, 1.05%, due 01/02/04 25,000
Danske Corp., 1.07%, due 01/05/04 49,996
NOTES TO FINANCIAL STATEMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 2003
- --------------------------------------------------------------------------------
(000's Omitted)
NOTE B--ACCOUNTING POLICIES--Continued
Name of Issuer Market Value
- -------------- ------------
Greenwich CPL Holding Funding, 0.95%, due 01/02/04 $ 17,654
Merrill Lynch & Co., Inc., 1.04%, due 01/05/04 18,838
Merrill Lynch & Co., Inc., 1.05%, due 01/06/04 31,156
Mortgage Int. Networking, 0.98%, due 01/02/04 50,000
Three Pillars Funding Corp., 1.08%, due 01/06/04 49,994
UBS Finance LLC, 1.02%, due 01/02/04 3,917
UBS Finance LLC, 1.05%, due 01/02/04 4,088
UBS Finance LLC, 0.96%, due 01/02/04 35,000
--------
Joint Trading Account Totals $385,633
========
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. Unrealized exchange
adjustments are included in unrealized appreciation (depreciation) of
investments. Transactions affecting statement of operations accounts and net
realized gain (loss) on investments are translated at the rates prevailing at
the dates of 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 gains or losses
from investments.
Reported net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of forward foreign
currency contracts, disposition of foreign currencies, currency gains and losses
realized between trade and settlement dates of security transactions, and the
difference between the amounts of net investment income accrued and the U.S.
dollar amount actually received. 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 rate.
Expenses: Expenses directly attributable to the Fund are charged to the
Fund. Expenses not directly attributed to the Fund are allocated on the basis of
relative net assets of the Fund.
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 syndicated line of credit agreements with State Street Bank and
Trust Company ("SSBT"), the Trust's record keeper and custodian and the Bank of
New York. These agreements enable the Fund to participate in an unsecured line
of credit, which permits borrowings up to $125 and $75 million, respectively.
Interest is charged to the Fund, based on its borrowing. In addition, a
commitment fee is charged to the Fund based on the average daily unused portion
of the line of credit and is allocated among the participating Funds in the
Trust. Interest expense paid under the line of credit is included under the
caption "Other fees" in the Statement of Operations.
The Fund had borrowings under the line of credit during the year ended
December 31, 2003 as follows:
Average Daily Loan Balance
During the Period for which Weighted Average
Loans were Outstanding Interest Rate Interest Expense
- --------------------------- ---------------- ----------------
$69 1.75% $-
NOTES TO FINANCIAL STATEMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 2003
- --------------------------------------------------------------------------------
(000's Omitted)
NOTE B--ACCOUNTING POLICIES--Continued
Financial futures contracts: The Fund may buy and sell financial futures
contracts to hedge against the effects of fluctuations in interest rates and
other market conditions. At the time the Fund enters into a financial futures
contract, it will be required to deposit with its custodian a specified amount
of cash or U.S. government securities, known as "initial margin". Each day, the
futures contract is valued at the official settlement price of the Chicago Board
of Trade or U.S. commodities exchange. Daily adjustments, called variation
margin, arising from this "mark to market", are recorded by the Fund as
unrealized gains or losses.
When the contracts are closed, the Fund recognizes a gain or a loss. Risks
of entering into futures contracts include the possibility that there may be an
illiquid market and/or that a change in the value of the contract may not
correlate with changes in the value of the underlying securities. In addition,
the Fund could be prevented from opening or realizing the benefits of closing
out futures positions because of position limits or limits on daily price
fluctuations imposed by an exchange. At December 31, 2003, the Fund had no open
financial futures contracts.
Forward foreign currency contracts: The Fund may use forward foreign
currency contracts to facilitate transactions in foreign securities and to
manage Fund's currency exposure. Contracts to buy generally are used to acquire
exposure to foreign currencies, while contracts to sell are used to hedge the
Fund's investments against currency fluctuations. Neither type of forward
foreign currency transaction will eliminate fluctuations in the prices of the
Fund's securities or prevent loss if the price of such securities should
decline. The U.S. dollar value of a forward foreign currency contract is
determined using forward exchange rates supplied by a quotation service.
Realized gain (loss) on the purchases and sales of forward foreign currency
contracts is recognized on settlement date. At December 31, 2003, the Fund had
no open forward foreign currency contracts.
Federal income taxes: The Fund intends to comply with the requirements of
Subchapter M of the Internal Revenue Code applicable to regulated investment
companies and to distribute substantially all of its taxable income to
shareholders. Therefore, no federal income tax provision is required.
As of December 31, 2003, the the Fund had approximate net tax basis capital
loss carryforwards, which may be applied against any net taxable gains, as
follows: $12,716 and $3,211 which expire in 2009 and 2010, respectively.
In addition, from the period November 1, 2003 through December 31, 2003,
the Fund incurred no net realized capital losses.
Dividends, Interest and Distributions: Dividend income is recorded on the
ex-dividend date and interest income is recorded on the accrual basis. Dividend
income for the Fund is shown net of foreign taxes withheld of $131. Realized
gains and losses from security transactions are determined on the basis of
identified cost.
Dividends of net investment income will be declared and distributed monthly
by the Fund. The Fund will distribute all of its net realized capital gains
annually, at the end of its fiscal year.
Estimates: The preparation of the financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
NOTES TO FINANCIAL STATEMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 2003
- --------------------------------------------------------------------------------
(000's Omitted)
NOTE C--INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
On February 5, 2003, the Board of Trustees of the Trust renewed its
Investment Advisory Agreement with John Hancock. For its services, John Hancock
receives monthly compensation at the following rate on an annual basis of the
Fund's net assets:
Between
$10 Million and Excess Over
First $10 Million $150 Million $150 Million
- ----------------- --------------- ------------
1.65% 1.45% 1.35%
In the event that normal operating expenses of the Fund, exclusive of
investment advisory fees, taxes, interest, brokerage commissions and
extraordinary expenses, shall exceed 0.10% of the Fund's daily net asset value,
John Hancock and JHVLICO will reimburse the Fund for such excess. Accordingly,
for the year ended December 31, 2003, the reimbursements paid from John Hancock
and JHVLICO were $286 to the Fund.
John Hancock has entered into a Sub-Advisory Agreement with Morgan Stanley
Investment Management, Inc., with respect to the Fund. Morgan Stanley Investment
Management, Inc. is an affiliate of John Hancock, and under its supervision, is
responsible for the day-to-day investment management of the Fund.
Signator Investors, Inc., a wholly owned subsidiary of John Hancock is the
principal underwriter and transfer agent of the Trust. Certain officers and
trustees of the Trust are officers and directors of JHVLICO, JHVLAU, JHVLAV,
JHVLAS, JHVAAI, JHVLAUV, JHVAAV, JHVAAU, JHVAAH, JHVAAJF, PPM-1, and PPM-2, and
some are also officers of John Hancock. Fees for independent trustees are paid
by the Trust.
NOTE D--INVESTMENT TRANSACTIONS
Purchases and proceeds from sales and maturities of investments, excluding
short-term securities and obligations of the U.S. government, for the Fund for
the year ended December 31, 2003 were as follows:
Purchases Sales and Maturities
- --------- --------------------
$48,158 $39,509
The identified cost of investments owned by the Fund (including earned
discount on corporate short-term notes, and commercial paper) and their
respective gross unrealized appreciation and depreciation for Federal income tax
purposes at December 31, 2003 were as follows:
Identified Unrealized Unrealized Net Unrealized
Cost Appreciation Depreciation Appreciation
- ---------- ------------ ------------ --------------
$49,043 $16,200 $(579) $15,621
NOTES TO FINANCIAL STATEMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 2003
- --------------------------------------------------------------------------------
(000's Omitted)
NOTE D--INVESTMENT TRANSACTIONS--Continued
Distribution of Income and Gains: Distributions of net investment income,
if any, are made at least annually. Net realized gains from investment
transactions, in excess of available capital loss carryforwards, would be
taxable to the Fund if not distributed, and, therefore, will be distributed to
shareholders at least annually. Earnings and profits distributed to shareholders
on redemption of fund shares may be utilized by the Fund, to the extent
permissible, as part of the Fund's dividends-paid deduction on its federal
income tax return.
The timing and characterization of certain income and capital gains
distributions are determined annually in accordance with federal tax
regulations, which may differ from accounting principles generally accepted in
the United States of America. These differences primarily relate to certain
securities sold at a loss and gains and losses related to certain foreign equity
investments. Additionally, as a result, net investment income (loss) and net
realized gain (loss) on investment transactions for a reporting period may
differ significantly from distributions during such period. Accordingly, the
Fund may periodically make reclassifications among certain of its capital
accounts without impacting the net asset value of the Fund.
At December 31, 2003, the Fund's components of distributable earnings on a
tax basis were as follows:
Undistributed Undistributed
Ordinary Net Long-Term Capital Loss Net Unrealized
Income Capital Gain Carryforwards Appreciation
- ------------- ------------- ------------- --------------
$-- $-- $15,927 $15,621
In addition, the tax character of distributions paid by the Fund are summarized
as follows:
Distributions from Distributions from
Year Ordinary Income Long-Term Capital Gain Return of Capital
- ---- ------------------ ---------------------- -----------------
2003 $2,228 $-- $860
2002 93 -- --
Included in the Fund's 2003 distributions from ordinary income is $870 in
excess of investment company taxable income, which in accordance with applicable
US tax law, is taxable to shareholders as ordinary income distributions.
NOTE E--BOARD OF TRUSTEES AND OFFICERS OF THE TRUST (UNAUDITED)
The Board of Trustees of the Trust is responsible for overall management of
the Trust. The Board may exercise all powers of the Trust, except those powers
which are conferred solely upon or reserved to the shareholders. The Trust's
Statement of Additional Information (SAI) includes additional information about
the Trustees and is available without charge, upon request, by calling toll-free
at 1-800-576-2227.
NOTES TO FINANCIAL STATEMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 2003
- --------------------------------------------------------------------------------
NOTE E--BOARD OF TRUSTEES AND OFFICERS OF THE TRUST (UNAUDITED)--Continued
The following table provides information about the members of the Board of
Trustees and the officers of the Trust:
Disinterested Trustees
Positions Held Principal Occupation(s)
Name, Address and Age With Trust During Past Five Years
- -------------------------------- -------------- ---------------------------
Elizabeth G. Cook (age 66) Trustee Expressive Arts Therapist,
c/o John Hancock Variable Series Dana- Farber Cancer
Trust I Institute; President, The
John Hancock Place Advertising Club of Greater
Boston, Massachusetts 02117 Boston
Diane C. Kessler (age 57) Trustee Executive Director,
c/o John Hancock Variable Series Massachusetts Council of
Trust I Churches
John Hancock Place
Boston, Massachusetts 02117
Robert Verdonck (age 58) Trustee President and Chief
c/o John Hancock Variable Series Executive Officer, East
Trust I Boston Savings Bank
John Hancock Place
Boston, Massachusetts 02117
Hassell H. McClellan (age 58) Trustee Associate Professor and
c/o John Hancock Variable Series Graduate Dean, The Graduate
Trust I School of the Wallace G.
John Hancock Place Carroll School of
Boston, Massachusetts 02117 Management, Boston College
Trustees Affiliated with the Trust and Officers of the Trust
Positions Held Principal Occupation(s)
Name, Address and Age With Trust During Past Five Years
- -------------------------------- -------------- --------------------------
Michele G. Van Leer* (age 46) Chairman Senior Vice President,
John Hancock Place and Trustee Product Management, John
Boston, Massachusetts 02117 Hancock Life Insurance
Company; Vice Chairman,
President & Director, John
Hancock Variable Life
Insurance Company
Kathleen F. Driscoll* (age 47) Vice Chairman, Senior Vice President,
John Hancock Place President and Signator Brokerage, John
Boston, Massachusetts 02117 Trustee Hancock Life Insurance
Company; Vice President
Corporate Communications,
John Hancock Life Insurance
Company
NOTES TO FINANCIAL STATEMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 2003
- --------------------------------------------------------------------------------
NOTE E--BOARD OF TRUSTEES AND OFFICERS OF THE TRUST (UNAUDITED)--Continued
Trustee Affiliated with the Trust and Officers of the Trust--Continued
Positions Held Principal Occupation(s)
Name, Address and Age With Trust During Past Five Years
- -------------------------------- -------------- ----------------------------
Jude A. Curtis (age 45) Compliance Vice President and Chief
John Hancock Place Officer Investment Compliance
Boston, Massachusetts 02117 Officer, John Hancock Life
Insurance Company; formerly
Second Vice President and
Counsel, Office of Business
Conduct; John Hancock Life
Insurance Company; formerly
a Partner at Hale and Dorr
LLP (law firm)
Janet Wang (age 35) Assistant Compliance Specialist, John
John Hancock Place Compliance Hancock Life Insurance
Boston, Massachusetts 02117 Officer Company
Raymond F. Skiba (age 58) Treasurer Director of Fund Operations,
John Hancock Place John Hancock Life Insurance
Boston, Massachusetts 02117 Company
Gladys C. Millan (age 57) Assistant Manager of Fund Operations,
John Hancock Place Treasurer John Hancock Life Insurance
Boston, Massachusetts 02117 Company
Karen Q. Visconti (age 50) Secretary Director, Product & Market
John Hancock Place Management, John Hancock
Boston, Massachusetts 02117 Life Insurance Company
Arnold R. Bergman (age 53) Assistant Senior Counsel, Law
John Hancock Place Secretary Department, John Hancock
Boston, Massachusetts 02117 Life Insurance company;
formerly Vice President,
General Counsel and
Secretary, First Variable
Life Insurance Company
*Trustee who is an "interested person" as defined in the 1940 Act, due to
her position with John Hancock Life Insurance Company (or its affiliates), the
ultimate controlling parent of the investment advisor.
Because the Trust does not hold regular annual shareholders meetings, each
Trustee holds office for an indefinite term until his successor is duly elected
and qualified or until he dies, retires, resigns, is removed or becomes
disqualified. None of the Trustees is a director of other complexes except noted
above.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
To the Contractowners, Policyholders, and
Board of Trustees of
John Hancock Variable Series Trust I
We have audited the accompanying statement of assets and liabilities,
including the schedule of investments, of the Emerging Markets Equity Fund (a
portfolio included in the series of John Hancock Variable Series Trust I {the
"Trust"}) as of December 31, 2003, and the related statement of operations for
the year then ended, the statements of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each of the
five years in the period then ended. These financial statements and financial
highlights are the responsibility of the Trust's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of December 31, 2003, by correspondence with the custodian and brokers,
or by other appropriate auditing procedures where replies from brokers were not
received. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of the
Emerging Markets Equity Fund of John Hancock Variable Series Trust I at December
31, 2003, the results of its operations for the year then ended, the changes in
its net assets for each of the two years in the period then ended, and the
financial highlights for each of the five years in the period then ended, in
conformity with accounting principles generally accepted in the United States.
/s/ Ernst & Young LLP
Boston, Massachusetts
February 6, 2004
Officers and Trustees Investment Adviser
Michele G. Van Leer, John Hancock Life Insurance Company
Chairman of the Board of Trustees John Hancock Place
Kathleen F. Driscoll, P.O. Box 111
President and Vice Chairman Boston, MA 02117
of the Board of Trustees
Elizabeth G. Cook, Trustee
Reverend Diane C. Kessler, Trustee
Hassell H. McClellan, Trustee Independent Auditors
Robert F. Verdonck, Trustee Ernst & Young LLP
Karen Q. Visconti, Secretary 200 Clarendon Street
Arnold R. Bergman, Assistant Secretary Boston, MA 02116
Raymond F. Skiba, Treasurer
Gladys C. Millan, Assistant Treasurer
Ronald J. Bocage, Chief Legal Officer
Jude A. Curtis, Compliance Officer
Janet Wang, Assistant Compliance Officer
Sub-Investment Advisers
Capital Guardian Trust Company Pacific Investment Management Company LLC
Los Angeles, CA 90071 Newport Beach, CA 92660
Declaration Management & Research LLC RREEF America LLC
McLean, VA 22102 Chicago, IL 60611
Fidelity Management & Research Company SSgA Funds Management, Inc.
Boston, MA 02109 Boston, MA 02110
Goldman Sachs Asset Management, LP Standish Mellon Asset
New York, NY 10005 Management Company LLC
Pittsburgh, PA 15258
Independence Investment LLC T. Rowe Price Associates, Inc.
Boston, MA 02109 Baltimore, MD 21202
John Hancock Advisers, LLC T. Rowe Price International, Inc.
Boston, MA 02199 Baltimore, MD 21202
Morgan Stanley Investment Management Inc. Wellington Management Company, LLP
New York, NY 10020 Boston, MA 02109
The John Hancock Variable Series Trust I consists of funds used as investment
options for various John Hancock variable life and variable annuity contracts.
Investors are not able to invest directly in the John Hancock Variable Series
Trust I.
If the total investment return for any fund for any given year appears unusually
high, the return may be attributable to unusually favorable market conditions
which will probably not be sustainable. For instance, a high total investment
return may reflect participation in IPOs, "hot" industries (e.g.,
internet-related companies), private placements, and/or leveraging investment
techniques during the period indicated. There is no assurance that any of those
methods, or any other investment technique will continue to have the same impact
on the fund's total investment returns.
All of the funds (except bond funds and equity index funds) may participate in
initial public offerings (IPOs). Under certain market conditions, such
participation could significantly improve a fund's total investment return.
There is no assurance that such market conditions will continue and provide the
same favorable impact on future investment returns.
Please refer to the prospectus for your product for additional information about
the investment options available. Variable life insurance and variable annuities
are sold by prospectus. These reports may be used as sales literature when
preceeded or accompanied by the funds' prospectus, which detail charges,
investment objectives, and operating policies.
Insurance products are issued by John Hancock Life Insurance Company, or John
Hancock Variable Life Insurance Company* (*not licensed in New York), Boston, MA
02117. Securities products are distributed by Signator Investors, Inc., Member
NASD, SIPC, 197 Clarendon Street, Boston, MA 02116.
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