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HALE AND DORR

1940 Act/Rule 22d-1

Form N-1A under both Acts

COUNSELLORS AT LAW

60 STATE STREET, BOSTON, MASSACHUSETTS 02109

ßE

; / 0 crts

617-526-5000

Aa ~ -rç; \~ 617-526-6000. FAX

RUL ,

~~~lo"Zo- ~

June 25, 1996

Heidi Stam

Associate Director

O£fice of the Chief Counsel

Division of Investment Management

Securities and Exchange Commission

450 Fifth Street N.W.

Washington, DC 20549

Re: No-action request concerning a new simplified form of prospectus for the

registered open-end management investment companies and series (the

"Funds") managed or sponsored by John Hancock Advisers, Inc. (" JHA ") and

distributed by John Hancock Funds, Inc. (collectively, the "Applicants")

Dear Ms. Stam:

Enclosed is a prototype for a new simplified prospectus to be used by the

Funds. The enclosed form of consolidated prospectus (the "prototype prospec

tus ") pertains to the growth Funds. The prototype prospectus is being used as

a model for preparing consolidated prospectuses for the global/ international

Funds, the growth and income Funds, the income Funds, the tax-exempt bond Funds

dnd the money market Funds. The Applicants filed the prototype prospectus in

post-effective amendments to the growth Funds' registration statements with the

Commission in the middle of April, 1996. Pursuant to Rule 485 (a) under the

Securities Act of 1933 (the "1933 Act"), the prototype prospectus will auto

matically become effective on July 1, 1996. The Applicants have filed most of

the other prospectuses in post-effective amendments to the respective Funds'

registration statements with the Commission in. June, 1996. These prospectuses

will automatically become effective on or after August 30, 1996.

The

Applicants ' prospectus simplification project was inspired in part by

recent appeals for more readable prospectuses by members of the Commission and

the Commission's staff. The prototype prospectus was prepared by a team con

sisting of JHA personnel from various departments and outside consultants spe

cializing in written communications and graphic design. In making decisions

about the formt of and disclosure in the prospectus, this team focused prima

rily on the goal of making the prospectus clearer, more accessible and less

intimidating to the average investor.

One of the innovative features of the prototype prospectus is the inclu

sion of an "Overview" section on page 3 of the prospectus. This Overview iden

tifies the investment objective ("goal"), primary investments and investment

WASHINGTON, DC

BOSTON, MA

HALE AND DORR IS A PAKTNERSHIP INCLUDING PROFESIONAL CORPORATIONS

MANCHESTER, NH

Heidi Stam

Securities and Exchange commission

June 25, 1996

Page 2

adviser of the Funds, which are the most important characteristics common to

all of the Funds. The Overview also discusses who mayor may not be appropri

ate investors in the Funds and provides a key to the symols or icons used in

the two-page spread devoted to each of the Funds. The Overview is designed to

deal with the greater complexity of a prospectus that covers multiple Funds and

to help investors compare the similarities and differences among these Funds.

It is intended to provide a context for the two-page Fund-specific sections

that immediately follow the Overview. Thus, the Overview is intended to be an

. introduction to the prospectus' investment disclosure, not a sumry of the en

tire prospectus.

One of the team's strategies was to eliminate non-essential or repetitive

disclosure and technical language that would conceal the most material disclo

sure or impede a reader's progress in reaching and understanding that disclo

sure. The amount of disclosure about anyone topic was also affected by the

team's effort to present information in manageable segments that would not

strain the attention span of the average reader. Accordingly, the Applicants

respectfully request that the staff of the Commission advise them that it will

not recommend enforcement action to the Commission if the Funds' prospectuses

comply with Form N-IA in the manner described in the table set forth below.

Requirement of

Form N-lA or Rule

Innovative

Rationale

Prospectus Feature

for New Feature

Cover Pacre

Form N-IA, Items

1 (a) (iii) and 3 (d)

The outs ide cover page

is required to include

The substance of

The clause (A) and (B) disclo

clause (A) and (B)

a statement that (A)"

appears on the front

cover of the prototype prospectus, but

not in the same

sure in the prototype prospectus

is more forceful and direct than

the language of Form N-IA. The

back cover is the most logical

the prospectus sets

forth concisely the

informtion about the

registrant that a prospective investor ought

to know before investing; (B) the prospectus

words.1 The substance of clause (C)

and the last sentence appears on the

place to discuss the availability of additional inform

tion and shareholder reports.

More space can be devoted to

this discussion if it is located

The exact language of this disclosure is as follows:

This prospectus 9ives vital information about these

funds. For your own benefit and protection, please

read it before you invest, and keep it on hand for fu

ture reference.

Heidi Stam

Securities and Exchange Commission

June 2S( 1996

Page 3

Requirement of

Innovative

Rationale

Form N-lA or Rule

Prospectus Feature

for New Feature

should be retained for

future reference; and

ditional information

back cover of the

prototype prospectus

under the heading

"For further infor

on the back cover. This extra

space and the isolation of this

disclosure from other text give

("SAI') has been- filed

mation."2 It is

with the Commission and

is available upon re

quest and without

accompanied by

reports to

charge. . The cover page

shareholders and how

should also include

instructions for ob

taining an SAI and a

statement that the SAI

has been incorporated

by reference into the

to obtain them. 3

information about

prospectus.

i t roughly equal prominence wi th

shorter, more crowded disclosure

on the front cover page or the

financial highlights page.

An investor who does not read

past the cover page of a prospectus is probably not very

interested in obtaining the SAI.

This is borne out by the infre

quency with which investors currently request SAIs, in spite of

the existing requirement for

The exact language of this disclosure is as follows:

The SAI contains more detailed informtion on all as

pects of the funds. The current annual/semi-annual

report is included in the SAI.

A current SAI has been filed with the Securities and

Exchange Commission and is incorporated by reference

into this prospectus (is legally a part of this pro

spectus) .

To request a free 'copy of the current annual/semi

annual report or SAI, please write or call: (name, ad

dress and phone numer of transfer and shareholder ser

vice agent) .

3 The exact language of this disclosure is as stated in the last sentence in

footnote 2 and as follows:

Two documents are available that offer further informa

tion on John Hancock Growth Funds:

ANAL/SEMI-ANAL REPORT TO SHAHOLDERS

Includes financial statements, detailed performance

information, portfolio holdings, a statement from port

folio management and the auditor's report.

Heidi Stam

Securities and Exchange Commission

June 25, 1996

Page 4

Requirement of

Innovative

Rationale

Form N-lA or Rule

Prospectus Feature

for New Feature

cover page disclosure. Thus,

this requirement appears not to

be advancing the Commission's

goal of encouraging requests for

Item 3 (d) requires a

statement about the

availability of share

holder reports to be

located in the finan

cial highlights section

of a próspectus.

SAIs.

The back outside cover page is a

more prominent location for dis

closing the availability of

shareholder reports than the

financial highlights page. If

this disclosure is located in

the financial highlights section

of a multiple fund prospectus,

it is likely to be overlooked by

investors. Thus, Form N-IA's

disclosure goals could be served

just as or more effectively with

back cover disclosure concerning

the availability of the SAI and

shareholder reports.

Item 1 (iv)

Requires the date of

the prospectus and SAI

to be disclosed on the

outside cover page.

The date of the' pro

spectus, but not the

SAI, is disclosed on

the front cover of

the prototype pro

spectus. Instead,

the back cover wi 1 1

contain at least one

reference to the

"current" SAI.

Although the date of

the SAI will usually

be identical to the

prospectus date, the

SAI date will be

disclosed on the

back cover whenever

it differs from the

prospectus date.

As a practical matter, the date

of the SAI is virtually always

the same as the prospectus date.

Any request for an SAI would be

interpreted as a request for the

currently effective SAI. The

use of the word "current" before

the word SAI will alert

investors who may have-an

outdated SAI that their original

SAI may have been superseded by

a more current SAI. Thus, it is

not necessary to specify the

date of the SAI if it is the

same as the prospectus date.

Including too many dates on the

prospectus cover tends to give

it a more legalistic and

cluttered appearance, which can

be intimidating to investors.

Heidi Stam

Securities and Exchange Commission

June 25! 1996

Page 5

Requirement of

Form N-lA or Rule

Innovative

Rationale

Prospectus Feature

for New Feature

The Rule 481 (b) (1)

Several studies have shown that

all upper case text is

measurably harder to read than

ordinary upper and lower case

text. Lower case words have

distinctive shapes that enable

readers to read groups of

letters. Words printed all in

capitals must be read letter by

letter because these words do

not have distinctive shapes.

Therefore, it is less efficient

and more tiring to read all

capitals text. Miles A. Tinker,

Legibility of Print (1963);

Miles A. Tinker, Prolonged

Item 1 (v)

Incorporates the re

quirements of Rule

481(b)

(1) under the

Securities Act of 1933

(the "1933 Act"). Rule

481 (b) (1) requires the

following legend in

legend appears on

the cover page of

the prototype pro

spectus in bold face

type, but not in all

upper case letters.

capital letters printed

in ten point Roman

type. "THESE SECUI

TIES HAVE NOT BEEN AP

PROVED OR DISAPPROVED

BY THE SECUITIES AN

EXCHAGE COMMISSION OR

AN STATE SECUITIES

COMMISSION NOR HA THE

SECUITIES AN EXCHAGE

Reading Tasks and Visual

COMMISSION OR AN STATE

SECUITIES COMMISSION

Research, 39 J. appl. Psycho.

(1955); M.A. Tinker and D.G.

Paterson, Influence of Tye Form

'on Speed of Reading, 12 J. appl.

Psycho. (1928) at 359-68.

PASSED UPON

TH AC

CURCY OR ADEQUACY OF

THIS PROSPECTUS. AN

REPRESENTATION TO THE

The use of all capitals may even

cause some readers to skip over

all caps text entirely.

Although the use of all capitals

in the legend was originally

intended to emphasize the

legend's importance, it instead

has the counterproductive effect

of making the legend less acces

sible to investors. The use of

bold face type, together with

the relatively uncluttered de

sign of the prototype prospec

tus' cover page, makes the leg

end nearly as prominent as an

all capitals format.

CONTRAY IS A CRIMINA

OFFENSE. H

Items 2 and 3; Item G

of General Instructions

Instruction 1 under

Item G requires thdt

The expense tables

required by Item

The Applicants believe that

investors benefit from receiving

Heidi Stam

Securities and Exch~nge Commission

June 25, 1996

Page 6

Requirement of

Innovative

Rationale

Form N-lA or Rule

Prospectus Feature

for New Feature

disclosure responding

to Items 1, 2 and 3 of

Form N-1A appear in

2 (a) and the con

a consolidated prospectus

offering a spectrum of similar

Funds. A consolidated

numerical sequence in

mutual fund prospec

informtion tables

required by Item 3

for all the Funds do

not precede

disclosure about the

Funds' particular

investment policies

and characteristics.

In addition, on a

tuses. Also, this dis

closure may not be pre

ceded or separated by

any other item.

densed financial

Fund by Fund basis,

the Item 4

disclosure will

precede Items 2 and

3 for a particular

Fund. Thus, Item 4

disclosure for each

Fund immediately

precedes and appears

together with that

Fund's expense table

and financial high

lights on a two-page

spread that can be

viewed all at one

prospectus enhances inves tors'

awareness of the range of

available Funds and may enable

investors to make abetter

informed investment decision.

The two-page spread format

groups together all the inform

tion that applies to a particu

lar Fund. This formt makes a

valuable connection between a

Fund's disclosure about invest

ment goals and permissible in

vestments and the Fund's his

torical record in achieving

those goals. Also, the two-page

spread combines text and figures

in a way that is less impen

etrable to average investors.

With this format, the required

expense and financial data still

appear in a very prominent and

more accessible location. The

time. Each Fund's

disclosure required by Item 4 of

financial highlights

Form N-1A precedes the

disclosure required by ¡tern 2

and 3. However, the Funds

believe that placing text before

statistical tables if more

attractive and less intimidating

to investors. The ability to

see both types of disclosure

simultaneously on the same twopage spread is consistent with

the policy underlying the Form

N-1A requirement that the

expense table and financial

highlights precede a fund's

investment disclosure. The use

of icons and the introduction of

page includes a bar

chart showing the

historic performnce

volatility of that

class of the Fund

which has the long

est performnce his

tory.

The alternative to

this formt would

have been to locate

the expense tables

and financial

highlights of the

s even growth Funds

before any

investment

disclosure. Such a

Heidi Stam

Securities and Exchange commission

June 25" 1996

Page 7

Requirement of

Innovative

Rationale

Form N-lA or Rule

Prospectus Feature

for New Feature

format would require

investors to wade

a performance volatility bar

chart, together with the graphic

design of the two-page spread,

further enhance the prominence,

clarity and user friendliness of

the Funds' expense and financial

through 14 pages of

statistical tables

and footnotes to

find the Funds'

investment

data.

disclosure. This

format would

discourage many

investors,

especially those who

are less comfortable

with figures, from

continuing to read

the prospectus. In

addition, this

format isolates each

Fund's expense and

financial data from

the other disclosure

pertaining

specifically to that

Fund.

Item 3 (c)

If a registrant

advertises any

performance data, the

The disclosure

required by Item

prospectus must include

appear in the

3 (c) would not

a brief explanation of

prototype

how performnce is

prospectus, even

though the Funds may

calculated, whether the

data reflect sales

charges or other non

recurring charges and

the effect on

performance of

excluding those

charges. If the

registrant advertises

performance calculated

in more than one

manner, the prospectus

should briefly explain

advertise

performnce data.

Any required Item

3 (c) disclosure

would be moved to

the SAIs to the

extent that it does

not already appear

in the SAIs. This

disclosure would be

incorporated by

reference into the

The Applicants believe that

prospectus disclosure about how

performnce data are calculated

for purposes of a separate

advertisement has no material

bear ing on an inves tor's

decision whether to purchase

Fund shares. This disclosure

would only be meaningful to

investors if accompanied by

actual performnce figures.

However, the prototype

prospectus contains no

performance figures other than

those required to be included in

the financial highlights

section. Although incorporating

the content of a Fund's SAI

performance disclosure by

Heidi Stam

Securities and Exchange Commission

June 25, 1996

Page 8

Innovative

Rationale

Form N-lA or Rule

Prospectus Feature

for New Feature

the material

differences between the

prospectus by virtue

of the incorporation

reference into its prospectus

does not satisfy the provisions

of Instrùction E, the required

Item 3 (c) disclosure may not

really be necessary to comply

with the requirements of Rule

Requirement of

calculations. As

statement that

indicated in the second

appears on the back

paragraph of

Instruction E to Form

N-1A, these prospectus

disclosure requirements

are not met by

incorporating by

reference the

disclosure appearing in

the SAIs.

cover.

482 under the 1933 Act. 4

Therefore, the Applicants

beiieve that it would be

appropriate to put all

disclosure explaining

performance calculations in the

Funds' SAIs.

4 A similar rationale was used to justify a proposed amendment to Form N-1A

that would allow money market funds to move prospectus disclosure explaining

the methodology for calculating performance data to their SAIs. Release No.

33-7196, IC-21216 discusses the proposed amendment as follows:

Item 3 (c) currently requires a brief explanation in the

prospectus of how the fund calculates performance data

that it advertises. 25 Because money fund yields are

calculated in a uniform manner prescribed by the Com

mission, an investor is unlikely to use these descrip

tions when evaluating advertisements from the fund.

The Commission therefore proposed to permit a money

fund to place its response to this item in the SAI if

the r~sponse is incorporated by reference into the pro

spectus .26 The Commission requests comment on whether

this option should be made available to other mutual

funds.

25 This disclosure provides a basis for inclusion of

performnce informtion in advertisements. Rule 482

advertisements may only include information the "sub

stance of which is set forth in the prospectus. (Cita

tions omitted)

26 Proposed Instruction to Item 3 (d). Because infor

mation incorporated by reference from the SAI is deemed

to be included in the prospectus, the legal requirement

that the substance of the information in an advertise

ment be contained in the statutory prospectus would be

met. If adopted, the response to this ~tem would be

the only response to a prospectus item that could be

Heidi Stam

Securities and Exchange Commission

June 25, 1996

Page 9

Requirement of

Innovative

Rationale

Form N-lA or Rule

Prospectus Feature

for New Feature

The prototype pro

spectus does not

contain this infor

mation, which will

The seven Funds covered by the

prototype prospectus are series

,be transferred to

corporations with different

organization dates and juris

dictions. Although this disclo

sure would occupy a significant

amount of space, the collective

experience of the team suggests

that most investors (other than

lawyers) do not find this dis

closure interesting or meaning

ful. The technical nature of

this disclosure suggests that it

belongs in the Funds' SAIs.

However, the Applicants believe

that investors are interested in

Item 4 (a)

Requires disclosure of

the date, form and ju

risdiction of organi

zation of the regis

trant.

the Funds' SAIs.

Page 25 of the pro

totype prospectus

provides an unusu

ally clear and de

tailed description

of, and diagram ex

plaining, the duties

of the Funds' Boards

and the various en

tities that provide

services to the

Funds. In addition,

the prospectus will

disclose the name

of each investment

company registrant

of which any Fund is

a series.

of several registered investment

companies that are trusts

the. service providers that they

are indirectly hiring by

investing in the Funds. This

disclosure appears in the space

that would otherwise be occupied

by Fund organization data.

Item 7 (c); Rule 22d-1

under the ,1940 Act

Requires disclosure, if

applicable, of the

registrant's ability to

wai ve sales charges in

connection with a

merger, acquisition or

other reorganization.

This disclosure

will

appear in the Funds'

SAIs instead of the

prototype

prospectus.

Unlike other sales charge waiv

ers, waivers in connection with

a Fund reorganization do not

involve favoring particular cat

egories of investors or share

holders. Accordingly, informa

tion about this type of waiver

is not very material to most

investors. The technical and

legalistic nature of this infor

matión suggests that it belongs

in the Funds' SAIs.

incorporated by reference from the SAI.

Heidi Stam

Securities and Exchange Commission

Juhe 25, 1996

Page 10

Requirement of

Innovative

Rationale

Form N-lA or Rule

Prospectus Feature

for New Feature

Application for

Exemption Concerning a

Deferred Compensation

P Ian for Fund Trus tees

The Funds and the other

investment

companies

managed by JHA applied

for and .obtained an

exemption (File no.

812-9256) authorizing

them to invest in other

John Hancock Funds to

the extent necessary to

value deferred Trustee

compensation by

reference to a

hypothetical or actual

investment in these

other Funds. This

exemption provided the

Funds with an exception

to their fundamental

investment policies

prohibiting investments

in other investment

companies and

eliminated the need to

have Fund shareholders

approve an amendment to

the these fundamental

investment policies.

The body of the

application, but not

the notice published in

the Federal Register,

represents that the

Funds' prospectuses

will disclose this

exception to their

fundamental policies

restricting investments

The disclosure

referred to in the

application for

exemption will

appear in the Funds'

SAIs, but does not

appear in the

prototype

prospectus.

The Funds' investment

restrictions on investments in

other investment companies and

information about Trustees'

compensation are currently

disclosed in their SAIs rather

than their prospectuses. It

seems incongruous to disclose

the exception in the prospectus

when the actual restriction and

information about Trustee

compensation appear in the

Funds' SAIs. Given the

technical nature of the

disclosure and the difficulty of

understanding it in isolation

from the related SAI disclosure,

the Applicants believe that it

is appropriate to move this

to the Funds' SAIs.

disclosure

Heidi Stam

Securities and Exchange Commission

June 25., 1996

Page 11

Requirement of

Innovative

Rationale

Form N-lA or Rule

Prospectus Feature

for New Feature

in other investment

companies.5 However,

the inclusion of this

disclosure in the

prospectus is not an

express condition of

the notice or the

exemptive order issued

by the Commission.

For the reasons set forth above, the Funds respectfully request that the

staff of the Commission advise them that it wìll not recommend enforcement ac

tion to the Commission if the Funds use a consolidated simplified prospectus

that satisfies the provisions of Form N-1A in the manner described above and

that is in substantially the same format as the enclosed prototype prospectus.

The exact language of the application was as follows:

The Applicants submit that it is appropriate,

in the public interest and consistent with the

protection of investors and the purposes

fairly intended by the policy and provisions

of the 1940 Act to grant an exemption from the

provisions of Section 13 (a) (3), so as to en

able the above-referenced Funds to invest in

Underlying Securities without a shareholder

vote; provided that each such Fund ap

propriately discloses to investors in its pro

spectus, the exception to its fundamental in

vestment restriction that such Fund may in

vest, pursuant to an order granted by the Com

mission and in accordance with applicable law,

in another investment company to the extent

that Deferred Compensation under the Plan is

valued in the Accounts by reference to an hy

pothetical investment in the Investment Funds.

Heidi Stam

Securities and Exchange Commission

June 25, 1996

Page 12

For the convenience of the staff in reviewing this request, four ad

ditional copies of this letter are enclosed. If the staff has any comments or

this request or if for any reason the staff determines

questions concerning

that it cannot grant the request as proposed, it is requested that the staff

contact the undersigned at (617) 526-6371 or Thomas Connors at (617) 375-1724

before any written response is issued.

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P'OBL'lC

EdUN, 2 8 1996 .

RESPONSE OF THE OFFCE OF

DISCLOSUR AN REVIW

DMSION OF INSTMNT MANAGEMENT

Our Reference No. DR 1-96

John Hancock Funds. Inc.

By letter dated June 25, 1996, you request assurance that we would not recommend

enforcement action to the Commssion if the prospetuses of open-end management

companes and their series manged or sponsored by John Hancock Advisers, Inc. and

distrbuted by John Hancock Funds, Inc. ("Fund" and collectively, the "Funds") satisfy

certin requirements of Form N-1A and a prior exemptive order in the maner described in

your letter.

You state that the Funds undertook a prospectus simplification project that was

inpired in part by recent appeals for more readable prospectuses by the Commssion. The

priar goal of the project was to create a clearer, more accessible, and less intimdating

selling document for investors. You state that consolidated prospectuses coverig a group of

"growt" Funds have been filed with the Commssion as par of post-effective amendments to

the Funds' registration statements on Form N-1A under Rule 485(a) of the Securities Act of

1933 ("Prototye Prospectus"). i It is expected that upon the automatic effectiveness of these

post-effective amendments, the Prototye Prospectus for the "growt" Funds wil serve as the

model for the preparation of consolidated prospectuses coverig other groups of John

Hancock Funds.

You state that one of the strategies employed in preparg the Prototye Prospectus

language in the current

prospectuses tht was found to adversely affect the reader's abilty to find relevant, material

was the elimination of non-essential, repetitive, and techncal

disclosure, or impede the reader's understading of that disclosure. Another strategy was to

create a concise format.

that presented disclosure in mangeable ségments.

We address each of the issues you raise below in generaly the same order as they

appear in your lettr; however, (or convenience in addressing your request we have grouped

simar items together under separate headings.

i More than one post-effective amendment was fied for the "growt" group of Funds

beause the Funds are series of several registered investment companes. These

amendments were filed on Apri

16 and 17, 1996, and wil be effective automatically

on July 1, 1996. Other Funds filed post-effective amendments on June 13, 1996 that

wil become effective automatically on August 30, 1996.

A. Proposed Changes to the Prospectus Cover and Back Cover Pages

1. Retention of Prospectus Information

Item l(a)(ii) of Form N-IA requires the outside cover page of the prospectus to

include a statement tht'the prospectus sets fort concisely inormation about the registrant

tht a prospective investor ought to know before investing. The item also requires a

statement tht the prospectus should be retained for futue reference. You propose to include

the substace of these requirements on the front cover page of the Prototye Prospectus, but

not in the same words contained in the item. You believe that your proposed language wil

be "more forceful and direct. "2

We recognie that it has become customary for registrants to use language tht

explicitly tracks the form's requirements to convey these concepts. Item l(a)(ii), however,

does not require any particular language. Your proposal contain the substace of the

disclosure required by the item and in our view satisfies its requirements.

2. Availabilty of Other Information

Form N-IA requires a prospectus to disclose that other inormation about the fud is

available. Item l(a)(ii) of the form requires that the front cover state that a Statement of

Additional Information ("SA!") has been fied with the Commssion and is available upon

request and without chage. Item l(a)(iv) requires the reference to the SA! to include its

date. Item 3(d) requires a statement in the fincial highlights section of the prospectus

inormg shareholders about the availabilty of the mangement's discussion of pedormance

for the most recent fiscal year.

You propose to move these statements to the back cover page of the Prototye

Prospectus. Furer, intead of disclosing the date of the SA!, you propose to state on the

back cover page tht a curent SA! is available upon request. In your view, the back cover

page is the most logical place to discuss the availabilty of additiona inormtion and

shaeholder report . You state tht more space ca be devote to ths discussion oñ the back

cover page. Because the date of the SA! is usuy the same as the date of the prospetus,

you propose to include the date of the SA! only when it differs from the date of the

prospectus.

2 According to the Prototye Prospectus, the cover of the prospetus wil state that:

"Ths prospectus gives vital inormation about these funds. For your own benefit and

protection, please read it before you invest, and keep it on hand for future reference. "

With regard to the availabilty of shareholder report, you believe that Form N-IA's

disclosure goals could be served just as, or more, effectively by back cover page disclosure

of the availabilty of such report. You also state that disclosure on the back cover page is

more promient than disclosure that is contained in the fmacial highlights section and, in the

case of a multiple fud consolidate prospectus, is less likely to be overlooked by investors.

Whe we do not necessary agree with all of yöur anlysis of these issues, we agree

tht the back cover page can be used to alert investors concerng the availabilty of both the

SA! and shareholder report. Furer, we do not object if the date of the SA! is omitted,

provided that the date of the cUrent SA! is the same as the prospectus. If the SA! does not

have the 'same date as the prospectus, you represent tht the date of the SA! wil be included

with the statement of availabilty of the SA! on the back cover page.

3. Legend Concerng Approval/Disapproval of Offered Securities

Item l(a)(v) of Form N-IA and Rule 481(b)(1) under the Securities Act require a

legend on the front cover page of the prospectus. That legend, explaing that the securities

offered by the prospectus have not been approved or disapproved by the Commssion, must

appear in bold face and capital

letters. You propose tht the legend appear on the front

cover page of the Prototye Prospectus in bold face, but not in all capita

letters; the wording

of the legend wil remain the same. You suggest that the use of all upper case letters is

difficult to read and, intead of emphasizing the importce of the legend, has made the

legend more diffcult to read. Furer, you state that the use of bold-face type, together with

the relatively uncluttred design of the Prototype Prospectus' cover page, makes the legend

as promient as ~t would be in an all capitals format.

We do not object to your proposal to use a combintion of upper and lower case

lettrs in bold-face tye together with an uncluttred cover page design because your

proposal would provide the same inormation in an equally promient maner.

B. Sequence Requirements of Form N-IA

The General Intrctions for Par A in Form N-IA state tht the inormation in the

prospectus nee not be in any order, except tht disclosue responding to Items 1 (cover

page), 2 (synopsis, including the fee table), and 3 (fmacial highlights table) must be in

numerica order in the prospectus and may not be preced or separte by any other item.

You state tht the Prototy Prospectus wil not present the fee and fmacial highlights tables

for all Funds imediately prior to the disclosure required by Item 4 concerng the Funds'

investment objectives and policies. You also state tht on a fund-by-fud basis the Item 4

disclosue wil prece Items 2 and 3 for a paricular Fund. Under your proposal, the

Prototye Prospectus wil present Items 2, 3, and 4 together in a two page format that wil

permt examtion of all the inormation for a Fund in one location, on two adjoing pages

that can be viewed at the same time.

You assert that the current Form N-1A requirements hamper the readabilty of a

consolidated prospectus by requirg that all Funds' expense and fmacial inormation

precede any disclosure about the Funds' investment objectives and policies. In support of

your assertion, you state tht ths mean that investors have to wade though 14 pages of

statistical tables and footnotes to find the discussion of the Funds' investment objectives and

policies. You state tht ths format may discourage many investors, especially those who are

less comfortble with figues and fmacial inormation, from continuing to read the

prospectus. In a consolidate prospectus, ths format results in a separation of each Fund's

expense and fmacial data from the other disclosure perting specifically to tht Fund.

You believe tht your proposed two page format måkes a valuable connection between

a Fund's disclosure about investment goals and permssible investments and the Fund's

historical record in achieving those goals. You also argue that the two page format combines

text and figures in a way tht is less impenetrable to the investor.

We recognie that the sequence requirements of Fol1 N-1A may in some intances

have the unitended effect of complicating disclosure presentation in consolidated

prospectuses. When the form was adopted, prospectuses generally contained disclosure

concerng one fud, and the form does not address many issues raised by the use of

consolidated prospectuses.3 However, the use of one prospectus for multiple fuds has

become a common practice in recent years. The sequence requirements generally have been

interpreted to require a consolidated prospectus to contain all the fee and the fmacial

highlights tables for all the fuds together at the beging of the prospectus before the

discussion of the funds' objectives and policies. Ths format may, in certin cases, unduly

complicate the disclosure and could discourage some shareholders from reading the

prospectus.

The purose of the sequencing requirements is to put certin importt inormation

about a fud in a stadardizd format at the beging of the prospetus, and to ine tht

the inormation about the fud's expenses and fmacial highlights is not made less clear by

putting cha, graphs and other disclosue prior to those tables. 4 You propose to

place the

fee and fmacial highlights tables for each Fund together with the disclosue concerng tht

Fund's iivestment objectives and policies in a two page format. We believe your proposal

is consistent with the purose of the sequencing requirements of the form. Ou decision not

to object to your proposal is based in paricular upon your representation tht the inormtion

for each Fund wil be presented together on two adjoing pages.

3 See generally, Investment Company Act Release Nos. 12927 (Dec. 21, 1982)

(proposing Form N-1A) and 13436 (Aug. 12, 1983) (adopting Form N-1A).

4 See Investment Company Act Release No. 16244 (Feb. I, 1988) (adopting

amendments to Form N-1A that require a fee table in the prospectus).

C. Relocating Prospectus Information to the Statement of Additional Information

1. Advertisement of Performance Data

Item 3(c) of Form N-1A requires disclosure in the prospectus of how performance is

calculated whenever a registrant advertises any performance data. You believe that it is not

necessar to disclose in the prospectus the tehncal method by which a Fund calculates

performance because it is not a material factor to an investor's decision to purchase Fund

shaes. You propose to move ths inormation to the SA! and incorporate it into the

prospectus by reference.

The purpose of Item 3(c) is to remid registrants intending to advertise performance'

that they must describe in the prospectus their method of calculating performance in order to

. comply with Rule 482 under the Secunties Act. Rule 482 provides tht advertisements may

only include inormation the' "substace of which" is included in the fund's statutory

prospectus. For performance quotations. ths requirement is met if the methodology for

calculating performance is set fort in the prospectus.5 We would not object if the Funds

move the description of the method for calculating the Funds' performance to the SA! and

rely on Rule 482 to use advertisements that include performance data, if ths inormation is

incorporated into tle prospectus by reference.

2. Relocation of Other Information to the Statement of Additional Information

You propose to move to the SA! responses to two items that Form N -1A currently

requires to be included in the prospectus.- -These items and your supporting anlysis are

sumarized below.

5 The Commssion recently proposed an amendment to Item 3(c) tht would permt a

money market fud tht advertses to move the description of the method for

calculating performance to the SA! and incorporate ths inormation into the

prospetus by reference. In proposing ths chage, the Commssion acknowledged

tht investors are unikely to consider the method of calculatig the performance of

tht ty of fud when evaluatig the fud's advertsements. Investment Company

Act Release No. 21216 (July 19, 1995).

6 Ths response is limted to the incorporation by reference of the performance

calculation that wil be in the SA!. General Instrction E to Form N-1A does not

permt registrants to incorporate by reference into the prospetus any statements from

the SA! for puroses of responding to a specific item requirement of the prospectus.

If recently proposed amendments to Form N-1A for money market fuds are adopted,

the response to Item 3(c) would be the only response to a prospectus item that could

be incorporated by reference from the SA!. See Investment Company Act Release

No. 21216 at note 26.

Item 4(a) of Form N-1A requires disclosure in the prospectus of the date, form and

jurisdiction of organtion of the registrant. You state that the seven Funds covered by the

Prototype Prospectus are series of several different registered companes that are trsts or

corporations with different organtion dates and jurisdictions. You believe that ths type of

inormation, which is techncal in nature and requires a significant amount of space, is not

interesting or meangful to most investors. 7

Item 7(c) of Form N-1A and Rule 22d-1 under the Investment Company Act of 1940

require disclosure, if applicable, of the waiver of sales charges in connection with a merger,

acquisition, or other reorgantion. You state that ths inormation is techncal and legal in

nature, and is not material to most investors in the Funds.

Without necessary agreeing with your legal anlysis as to materiality of the

inormation at issue, we do not object to your proposal to move the disclosure required by

those items to the SAI, which wil be available to any investor that wants ths inormation.

D. Exemptive Order Disclosure Requirement

The Funds received an exemptive order under the Investment Company Act that

permts an arangement under which the Funds' non-interested directors or trstees may

defer the receipt of all or par of their fees ("Prior Order").8 Under the arangement, the

deferred fees are maintained in an account established by the Fund tht accrues value by

reference to an actual or hypothetical investment in shares of the Funds or other investment

companes as selected by the paricular director or trstee. Such a practice may involve

investment in other investment companies. The Prior Order allows the Funds to deviate

from their fudamenta investment policy that restricts investments in other investment

companes without a shareholder vote.

In the application requesting the exemption, the Funds represented tht their

prospectuses would contain disclosue about the exception to the fudaental policy . You

state tht disclosue of the deferred compensation arangements is tehnca in natue, and

would be more easily understood if combined with a more complete discussion of the

restrctions on investments and the deferred compensation argements curently contained

in the - SAI. You fuer state tht the inclusion of ths disclosure in the prospetu is not an

express condition of the Prior Order.

7 Because the organtional details wil not be in the, prospectu, the Prototye

Prospectus wil state the nae of each investment company registrant of which any

Fund is a series.

8 Investment Company Act Release Nos. 20794 (Dec. 23, 1994) (notice) and 20843

(Jan. 18, 1995) (order).

We would not object if the disclosure concerng the exception to the Funds'

fundamental investment policy is moved to the SA!. Prospectus disclosure of the exception

is not a condition of the order, and the notice of the application states that the value of these

investment company shares wil be de minis. Furter, the exemption granted by the Prior

Order pertin to a negative investment policy that prohibits the Funds from investing in

other investment companes. Such a policy is not required by Form N-1A to be included in

the prospectus.

* * * * * *

For the reasons discussed above, we would not recommend enforcement action to the

Commssion under the Securties Act and the Investment Company Act if the Prototye

Prospectus for the Funds satisfies the requirements of Form N-1A and the Prior Order in the

maner described above. Our response does not address the adequacy or accuracy of the

disclosures contained in any of the registration statements fied by the Funds with the

Commssion. Because ths position is based on the particular facts and circumstances set

fort above, different facts or circumstaces may result in a different conclusion.

response to your request is issued under our authority to provide inormal advice

as codified in the Commssion's Rules of Practice.10 As you know, inormal advice

rendered by the staff does not represent the views of the Commission. In the event that there

Our

are Commssion developments tht we believe affect the positions taen in ths letter, we

may determe to revise or withdraw ths lettr.

Bar . Miler

Assistat Director

9 Item 4(b)(i) of Form N-1A.

10 17 C.F.R. 202.1(d) and 202.2.

JOHN HANCOCK

Growth

Funds

~)'i,O

,..v......

".~ ......' ... ...

.:".:,..;,::. '"-:':','"

::~'::,:~':Y '-;;.~~ ::

Prospectus

July 1, 1996

Disciplined Growth Fund

Discovery Fund

This prospectus gives vital

information about these funds.

For your own benefit and

protection, please read it before

you invest, and keep it on hand

Emerging Growth Fund

Growth Fund

for future reference.

Please note that these funds:

· are not bank deposits

· are not federally insured

· are not endorsed by any bank

or government agency

· are not guaranteed to achieve

their goal (s)

Regional Bank Fund

Special Equities

Fund

Special Opportunities Fund

Like all mutual fund shares, these

securities have not been approved

or disapproved by the Securities

and Exchange Commission or any

state securities commission, nor

has the Securities and Exchange

Commission or any state securities

commission passed' upon the accu

racy or adequacy of this prospectus.

Any representation to the contrary

is a criminal offense.

.. A Global

Investment

ManagementFus

Firm '

JOHN

HANCOCK

101 Huntington Avenue, Boston, Massachusetts 02199-7603

Overview

GOAL OF THE GROWTH FUNDS

John Hancock growth funds seek long~term growth by investing

primarily in common stocks. Each fund employs its own

strategy and has its own risk/reward profie. Because you could

lose money by investing in these funds, be sure to read all risk

disclosure carefully before investing.

WHO MAY WANT TO INVEST

These funds may be appropriate for investors who:

· have longer time horizons

· are wiling to accept higher short~term risk along with

FUND INFORMATION KEY

Concise fund-by-fund descriptions begin

on the next page. Each description pro

vides the following information:

,.;

~.Goal and strategy The fund's

~ particular investment goals' and the

strategies it intends to use in pursuing

those goals,

~ Portfolio securities The primary

_ types of securities in which the '

fund invests, Secondary investments are

described in "More about risk" at the

end of the prospectus,

.. Risk

factors

associated

The major

with the

risk

fund.

higher potentiallong~term returns

· want to diversify their portfolios

· are seeking funds for the growth portion of an asset

allocation portfolio

· are investing for retirement or other goals that are many

years in the future

Growth funds may NOT be appropriate if you:

· are investing with a shorter time horizon in mind

· are uncomfortable with an investment that wil go up and

down in value

. Portfolio management The

. individual or group (including sub-

advisers, if any) designated by the

THE MANAGEMENT FIRM

investment adviser to handle the fund's

day-to-day management.

All John Hancock growth funds are managed by John Hancock

~ Expenses The overall costs borne

7'0 by an investor in the fund, including

sales charges and annual expenses.

Advisers, Inc. Founded in 1968, John Hancock Advisers is a

wholly owned subsidiary of John Hancock Mutual Life Insurance

Company and manages more than $19 bilion in assets.

$ Financial

highlights

A table

showing the

fund's financial

perfor

mance for up to ten years, by share class.

A bar chart showing total return allows

you to compare the fund's historical risk

evel to those of other funds.

Disciplined Growth Fund

TICKER SYMBOL CLASS A: SVAAX CLASS B: FEQVX

REGISTRANT NAME: FREEDOM INVESTMENT TRUST

,)AL AND STRATEGY

capital apprecíation. To

this goal,

the fund

(gL The pursue

fund seeks

long-term

preferred stocks and investmentgrade convertible debt securities.

The fund expects any foreign

investments to

remain below 10%

invests in established, growing

of assets.

companies that have demonstrated

superior earnings growth and stability. Under normal círcumstances,

the fund wil invest at least 65% of

assets in these companies, without

concentration in anyone industry.

The fund also looks for the following characteristics:

· predictability of earnings

· a low level of debt

· seasoned management

PORTFOLIO MANAGEMENT

. John F. Snyder II and

. J ere E. Estes are the leaders

of the fund's portfolio

management team. Mr. Snyder is

For liquidity and flexibility, the

fund may place up to 15% of net

assets in cash or in investmentgrade short-term securities. In

abnormal market conditions, it may

invest up to 80% in these securities

as a defensive tactic. The fund also

may invest in certain higher-risk

securities, and may engage in other

investment practices.

· a strong market position

RISK FACTORS

Many of the fund's investments are

in medium or large capitalization

companies. The fund invests for

income as a secondary goal.

II As with

mentany

wil growth

fluctuatefund,

an executive vice president of the

adviser and has been a team member

since July 1992. He has been an

investment manager since 1971.

Mr. Estes has been a part of the

fund's management team since

joining John Hancock in July 1992.

He has been in the investment

business since i 967.

..ni

If the value of your invest-

response to stock market movements.

To the extent that the fund invests

PORTFOLIO SECURITIES

in higher-risk securities, it takes on

additional risks that could adversely

in the common stocks

II The fund

of U.S.

invests

companies.

primarily

may also invest in warrants,

affect its penormance. Before you

invest, please read "More about

risk" starting on page 28.

INVESTOR EXPENSES

% Fund investors pay various expenses, either

directly or indirectly. The figures below show

D the expenses for the past year, adjusted to reflect

any changes. Future expenses may be greater or less.

Example The table below shows what you would pay

if you invested $1,000 over the various time frames

indicated. The example assumes you reinvested all

dividends and that

the average annual return was 5%.

Shareholder transaction expenses Class A Class B

Share class Year 1 Year 3 Year S Year 10

Maximum sales charge imposed on purchases

Class A shares

(as a percentage of offering price) 5.00% none

:"~"".

H~¡¡

1~~;mp~gg~~~-mt!~~~~~~;~:Ir~t~~~l;~êrt~G~:~!irr!2~"

none

Annual fund operating expenses (as a % of average net assets)

Management fee

$94

$125

S215

~1à~~1!2i~~~~~~~~r~i~;~~~..t:~~1:~~~~i~7;;~:~~~.

Assuming redemption

t~L~",-"

Maximum deferred sales charge none!l) 5.00%

Exchange fee

$64

0.75%

at end of

period $72 $97 $135 $231

~E~qm1E.~~g?B§2fcß~i¡¡~~¥i(Sjls~'i&?$~~f;..~; .

This example is for comparison purposes only and is not a representation of

the fund's actual expenses and returns, either past or future.

0,75%

(1) Except for investments of $1 milion or more; see 'How sales charges

Other expenses 0.40% 0.40%

.'::f()JåIß~n-aR¡;~i:a~ì!g:~:XêrI~;;1¡t;.;;~;;iv'~t~0~t~;m1rl~I~~ltfs~l~..

are calculated, .

(2) Does not include wire redemption fee (currently $4.00),

(3) Because of the 12b-l fee, long-term shareholders may indirectly pay

more than the equivalent of the maximum permitted front.end sales

charge.

4 DISCIPLINED GROWTH FUND

.NCIAL HIGHLIGHTS

by the fuiid's independent auditors,

:$ The Price

figures

Waterhouse

below have

LLP. been audited

12.34

Volatilty, as indicated by Class B

11.51

Investment return (%)

year-by.year total

(16,44)(4)

(16.46)

Class A - year ended October 31, 1992(1) 1993 1994 1995

Per share operating performance

rt'it:aŠS ;Milri!t~i!lrtr~~f ~jì8~lS~:O¡!i~-;~~i~::;..

=Ne~~i;::"íncome'

(loss) 0.06(2 0.08(2

0.10 0.08(2)

fN".e.1iJ1ll.ïe~.!an

,~Ûî-¡re.â.lÌè'.nãlimíl~ve~~~~Q~....

...,~~~~Ól07~t~1Jï~\,

..-"-.....,...,T'=~;;~¥~~~.~:i~~a. ~~~~~~""IoØ-...~~~,..._~,~-".""-". .,'

lb~;I~f~~~ i~vest~ent oper~tions ' . . 0.00 1.42 0.17 1,37

~ê'W~I~1l~..~_~~_~~;;r~t;~i11;;~r~5i;;i"':

,'c'Divid;;dS f;;;;'~~t~i~~~t inc~me (0,07) (0.02) (0.10) (0.10)

:;:'j,i~¡iil$Èim~fæm1B£~l;!ê!g:.__~~~jl~~~~it~~_~E1~~-r&G.l~~i~,(9J:.wl~;;¡I((i¡.~~):.

Distributions from capital paid-in (0.01)

Net asset value, end of period . .._. . _,._.. ... ..... .. ...., ,~ ~10,~?_ $!~.39 $12.02

$12,77

~í~~iIn-~~S:im!~!!NInt!ì!~;îlri;ì!~;~~'1t~~li~ìl~~lj;~~~~¿~§,_~~~~t%ii,\~¡:;~trT~~~~t:1~?;i~1t;.0:;j~~~1~~£lf~~~~äj,~~~~'1~~91...:.;..,;2~~35"

_12.21

':~:~~~~~1.iQ~~*tW~m~t~i~~i~fi~~æl~~~¡~~;~l~~.j5;~;~;ti~r¡;¡,;':~'0:J~J~2~~~,~~;~¿~~~ïiJ;:~;~~,3I~.,",;,2l,292

-' ~;~ of expe~ses to average net assets (%) 1.73(5) 1,60 1.53

27.692

. .folio turnover rate (%) 246 71 60

'~t~n~tlml~~fi;tlQè,9~~lI~~iltI~~~~~¥#í~itt~~~~~i~~~~j1t~~~t1£~idi\t~l~1&~§~~1£i~o.§4d,'.:.:dO.83

0:69

.'N1A

N1A

1,46

Class B - year ended October 31, 1987(1) 1988 1989 1990 1991 1992 1993 1994 1995

Per share operating performance

. Net;~ss~i~~Q~r~~~~g')~!I,~i;,~~lig~l;~.1i~li;E~:JiJ:~~ÇRji'~~a~1~:~iìR:j~~t¿i~)~~~I-~~~lfi~!tgiij5:ÚE:;siO';~.I$),~;S-.1' $,1.1.,95

Net

investment

income

(loss) 0.06 0.13 0.19 0,18 0.07 0.01(2 0,02(2 0.03 0.01l2

.Net're~fiz~~!~H~:a#f~~f¡~~lQS~lig~ii.ê!i~lñ~'¡_~tlIl(~9.Üi¡¡~~g~~~~~~r~m.~i!i~~1i~t~~l.ii9s~?;~il~;i,:~i~';'i,:,g:9?~.:i.1;2_8,

Total from investment operations (1.64) 2.18 1.44 (1.82) 2.74 1.06 1.5 0.10 1.29

Dividends from netinvestment income (0.02) (0.09) (0.12) (0.20) (0.20) (0.03) (0.01) (0.02)

Distributions from capital paid-in (0.01)

.jl)i.~d~ûtCíiW;jr~mji~~lt~~lgafK¡gñt!~Sl~a~~ijiiK~~:¡'~;il-:'t~_~2::77(~9:0~Jii-Jti:(Ò1l~~~~a)E::~7.,(~P:Sl-~t()GÜ~tF~~~;~:'~~~_:(Q~~). ':'~

(0.03)

(0;52) ,

, ':,~,:TótaIj~1~§.~cis~:i;Y~~~~~~~~§~~feff;2r£l!~~~,~LifJ9.~i~í~JBtgâIÜf::~~3rjt§~~~ì~~:#11;~~g~!;~IO~ö,~f',:"'5~,~6): , (O~S.5)

Net asset value, end of period $8.34 $10.29 $11.52 $9.22 $11.71 $10.97 $12.31 $11.95 $12.69

" .~ .~.i..=t.-~;t~::--:~",~,~==~?',,i~~--~~~""='-'~~-r=¡r.",,,,,~~.i~~..~--_,*~..___..,_.......~~.___,.~____

TotaU!tV!l.~!!.!.nl~r1!~~.!;~~\..,~~~~¿;:;,,~m~)~. :,~~~";,14;27~k(W46) ";.~iO~1ii,';~t7;Y;;..1.H~;";.k_a;Zl-.;:".;:1;H.1

Ratios and supplemental data

Neraš~tS~~d~T~rl~~!!gQ9.i~è~).~lllt':~ùß~Jjf;:ç~~f.WJ¡r(~:yg.,..iF!oJi ,..'),~;~~??fTh~¡a~~;Wæ.ï:glirÇj~I2fi~i~;s~~::-,~~:.a~3";,.:"94,.i3i;.:,:,

Ratio

of expenses

to average

86;1fR

netassets(%) 2.56(5.7) 2.61(7) 2.30 2,13 2.24 2.27 2,09 2.10 2.11

Ra,tipgti!1eti,n,yestni:¡iQtInt~~~:(¡9~~H9;~,Y.~Xa,g~.p~i:a,s,s,~~:l%ri~,,"',.,::;;'.d:iJ)~~3(S.7),,=:~..4§~/-:aJii~,;:"~~;J~~â;~~'i9~~~~¿:t.:9;.iR;~~~Rj1?:::.,..LO.:2-Š. .;,O,O~"

Portfolio turnover rate (%) 40(51 54 94 165 217 246 71 ' 60 65

~p'vêragl!br()kêrage_ c:gn'rn.iSSJarira,t~.i~(~lSJ~.£~.:~ii~~:;~,.~~~¡;'ÏÄ:~¡,i..j\?:,,:,.. '. -N1,A. '...' '.'Nl~:L,;t-A:~J¡~:;:£&~BI~FN(A"g':Ü,;'.,Nll.i:Ú;; ¿.NlA , _;;,~ N1A " N1A

(1' Class A and Class 8 shares commenced operations on January 3, 1992 and

'pril 22, 1987, respectively.

ased on ,the average of the shares outstanding at the end of each month.

(6) Per portfolio share traded. Required for fiscal years that began September 1,

1995 or later. '

(7) Net of advisory expense reimbursements per share of $0.01 for the fiscal

1"1 Assumes dividend reinvestment and does not reflect the effect of sales charges,

year ended October 31, 1988 and less than $0,01 for the fiscal year ended

(4) Not annualized.

October 31, 1987,

(5) Annualized.

DISCIPLINED GROWTH FUND 5

Discovery Fund

REGISTRANT NAME: FREEDOM INVESTMENT TRUST III

'OAL AND STRATEGY

TICKER SYMBOL CLASS A: FRDAX CLASS B: FRDIX

PORTFOLIO SECURITIES

capital appreciation. To

RISK FACTORS

U.S.

in common stocks of

. 'I .

.ni the value of your invest

this goal,

the fund

(!L The pursue

fund seeks

long-term

lI The fund

invests

companies

andprimarily

may also

II As with

mentany

wil fluctuate

growth fund,

invests in companies that appear to

offer superior growth prospects.

Under normal circumstances, the

fund wil invest at least 65% of

assets in these companies. The fund

looks for companies, including small-

invest in warrants, preferred stocks

and investment-grade convertible

response to stock market movements.

and medium-sized companies, that

have broad market opportunities

and .consistent or accelerating earnings growth. These companies may:

· occupy a profitable market niche

· have products or technologies that

are new, unique or proprietary

· are in an industry that has a favor

able long-term growth outlook

· have a capable management team

with a significant equity stake

debt securities.

To the extent that the fund invests

in small- and medium-sized company

For liquidity and flexibility, the

fund may place up to 15% of net

assets in cash or in investmentgrade short-term securities. In

abnormal market conditions, it

may invest up to 80% in these

securities as a defensive tactic. The

fund may invest up to 25% of assets

in foreign securities, which carry

additional risks. The fund also may

inv~st in certain higher-risk

securities, and may engage in other

investment practices.

stocks, foreign securities and other

higher-risk securities, it takes on

additional risks that could adversely

affect its performance. The fund

may experience higher volatility

than many other types of growth

funds. Before you invest, please

read "More about risk" starting on

page 28.

PORTFOLIO MANAGEMENT

. Bernice S. Behar, leader of

. the fund's portfolio manage

ment team since March

1994, is a senior vice president of

These companies may be in a

relatively early stage of development,

lIt wil usually have established a

.ecord of profitability and a strong

financial position. The fund does not

invest for income.

the adviser. She joined the adviser

in 1991 and has been in the invest

ment business since 1986.

I NVESTOR EXPENSES

% Fund investors pay various expenses, either

W' directly or indirectly. The figures below show

" the expenses for the past year, adjusted to reflect

Example The table below shows what you would pay

if you invested $1,000 over the various time frames

indicated. The example assumes you reinvested all

any changes. Future expenses may be greater or less.

dividends and that the average annual return was 5%.

Shareholder transaction expenses Class A Class B

Share class Year 1 Year 3 Year S Year 10

Maximum sales charge imposed on purchases

(as a percentage of offering price)

Class A shares

5.00%

none

$68

$105

$145

$256

r§1~1,;!!i!!!!liI~~~~~~~~~~¥~~~.~~~~:t~ii£~i~::'.~ ~:~:~::':-~." .

Assuming redemption

Maximum deferred sales charge none!') 5.00%

tl~_¡2E!!I~~~~~~¡ëf"§§le;;%C

Exchan.ge fee none none

Annual fund operating expenses (as a % of average net assets)

Management fee

0,75%

at end of period ,$76 $ 1 09 $ 155 $271

~~-r~Jtjf.!ö~)t4.~,~~Jt~!?,j#~J.id'$~Ù5::l:?Š~1)..'

This example is for comparison purposes only and is not a representation of

the fund's actual expenses and returns, either past or future.

0.75%

(1) Except for investments of $1 milion or more; see 'How sales charges

Other expenses 0.80% 0.80%

~ì~t~lrf9ndope~a~rÌ¡¡;~X¡n~i~~~d£.iflltJ:s.s~~~1~~~~_ss~'d .

are calculated. '

(2) Does not include wire redemption fee (currently $4.00).

(3) Because of the 12b-l fee, long-term shareholders may indirectly pay-

more than the equivalent of the maximum permitted front-end sales

charge,

6 DISCOVERY FUND

\NCIAL HIGHLIGHTS

Juiy 31, 1992, were audited by the

:$ The fund's

figures

former

below

independent

for the period

auditors,

ended

Price Waterhouse LLP. Figures for subsequent

years have been audited by the fund's current

independent auditors, Ernst & Young LLP.

21.63

Volatilty, as Indicated by Class B

year.by.year total

. .

54.97

10.88(5)

Investment return ("I)

3,15(5

(7.18)

Class A - year ended July 31, 1992(1) 1993 1994 1995 1996(2)

~ft~t~~~lt~~QIf~'f£À!ji~3,.

Per share operating performance

Net investment income (loss) (0.05) (0.16) (0.16)(3) (0.17)(3) (0.10)(3)

Total from investment operations (0.45) 1.99 (0.59) 4,66 0.45

~~~;I~íf*1Jfl!CS-~~~Wl~Sll!;4iY~~~~~~~3i1~=r~;Xd~~t~~1~~~.:.:.~....,~.

Distributions from net realized gain on investments sold (0.13) (1.66) (0.27) (0.13)

tN~r;~~~~lml~t~i-.l~~~~:litil~f~l;l~_nT~1,QTS:1T;¿~$¡$Gj="~lf~':i~Sl~.~~7.

Investment return at net asset value(4) (%) (4.79)(5) 22.33 (6.45) 55.80 3.52(5)

"~t assets, end of period (OOOs omitted) (S) 3,866 4,692 3,226 5,075 6,583

Total

'm~~n~~Ka9;~m~j:ml\ì~)~~",~~~~~ti~Æ~~~1lr-t1~1%Ii~Jii7.1~Ý'~i;1;7;1~¥~lõ!~;.?J:~:2;l'd.'.

,.0 of net investment income (loss) to average net assets (%) (1,20)(6) (1.61) (1.64) (1.73)

,1:74(6)

(1:51)(6)

:;t~ni~f&t.t~1Ii~1E~~Æ'~~l1-mli'i~~~!~~i~~~~liitli~~~lfj~~1~wÆt¡l¡t~of2:~J~~ri11.!ESG'"§8,1~",:118

Average brokerage commission rate(7) (S) N/A N/A N/A N/A

Class B - year ended July 31, ' , , . 1992(1) 1993 1994 1995 1996(2)

N/A

Per share operating performance

;N~i:~~~~~~~i~llB¡.ñ~~êigG.i~~~l~~~~-i;ig~lfÊ1J~;~~;g~;~D;~:L2~:iQi§¿g¿f.~¿~D~G~;1~~;~~~8;q~~J~¿~iö.6l-.;~.~,~s:.~~..

S12.54

-~ --_.~..."-~.,~.......~.+

Net investment income (loss) (0,11) (0.23) (0.22)(3) (0.22)(3)

;:¡'~t;re_

".~.1'?-è' , (.¡:,:?r;'::~"7":C,C..

i.a...ll...d.lfo._.. ;,£,.;,;2;; 4,,,;:;;(0.43) ",:'. . 4.69 . ,. - 0.53

(0.14)(3)

Total from investment operations 0.87 1,91 (0.65) 4.47 0.39

Distributions from net realized gain on investments sold (0,13) (1.66) (0,27) (0.13)

~irl¡1mN7~'ãT~~~~~~~~..~~r,'!f,?š;;.;t".'\~h~';~~'i~":~t~J,~-l;;mg~~~š:ä~ll~i1r~~..~g'~4'''.,~li.S4:-'';s'1iäo~

E..;:-;J~:c.~~~~~..~;~i.~b;..~~.$~~~~N~i~~:;;-;~:w;t.c;i:~.Jff5~~~.~r~:itr;;.:;'i:~.~."¡;.::r,;:::l..~~~::,~J,~~_rt~~::~~~~~4fA~A~_,._..~~~~":,-i..,..~......;~,~~~~ .__~.~, ~"7:~: .", ~_..:

Total investment return at net asset value(4) (%) 10.88(5) 21.63 (7.18) 54.97 3.15(5)

~!;tiiiir~S;i;pll~~'t~~~~~~~~~~~~r!if¿~~ff~~~~~~t~l~~;~~r~"PTÆJ~~l:t"~iti:l:~~&~~:;~:.~.~.

Net assets, end of period (OOO's omitted) (S) 34,636 38,672 26,537 31,645 34,452

Ratio of net investment income (loss) to average net assets (%) (1.56)(6) (2.26) (2.24) (2.34) (2.20)(6)

Average brokerage commission rate(7 (S) N/A N/A N/A N/A N/A

::l2fit!~¡ê~~I~~a~~l?i~~ITrf:lfii~~i3i:~~:~:..~~~tî~~~Æf¿1~~;~\'1¿!it,r!;I~~;~f;~f.~¿,~~~&;;f~7fXitJ1i~Ytilfi~.?7tf~:If~;::"!r~".1.Q8 .....;:~18.. 73

-:Iass A and Class B shares commenced operations on January 3, 1992 and

,ugust 30, 1991, respectively.

\_, Six months ended January 31, 1996. (Unaudited.)

(3) Based on the average of the shares outstanding at the end of each month.

(5) Not annualized.

(6) Annualized.

(7) Per portfolio share traded. Required for fiscal years that began September 1,

1995 or later.

(4) Assumes dividend reinvestment and does not reflect the effect of sales charges,

DISCOVERY FUND 7

Emerging Growth Fund

TICKER SYMBOL CLASS A: TAEMX CLASS B: TSEGX

REGISTRANT NAME: JOHN HANCOCK SERIES, INC.

ìOAL AND STRATEGY

€jL The fund seeks long-term

capital appreciation. To

pursue this goal, the fund

invests in emerging companies

(market capitalization of less than

$1 billion). Under normal circum

stances, the fund will invest at least

80% of assets in a diversified

portfolio of these companies. The

fund looks for companies that show

rapid growth but are not yet widely

recognized. The fund also may

invest in established companies

that, because of new management,

products or opportunities, offer the

possibility of accelerating earnings.

The fund does not invest for income.

PORTFOLIO SECURITIE,S,

in the common stocks of

li The fund

primarily

U.S. invests

and foreign

emerging

growth companies, although it may

'nvest up to 20% of assets in other

types of companies. The fund may

also invest in warrants, preferred

stocks and investment-grade

convertible debt securities.

For liquidity and flexibility, the

fund may place up to 20% of assets

in cash or in investment-grade

short-term securities. In abnormal

market conditions, it may invest

more assets in these securities as a

defensive tactic. The fund also may

invest in certain higher-risk securi

ties, and may engage in other

investment practices.

· may lack substantial capital

reserves

· do not have proven track records

In addition, stocks of emerging

companies are often traded in low

volumes, which can increase market

and liquidity risks. Before you

invest, please read "More about

risk" starting on page 28.

PORTFOLIO MANAGEMENT

. Bernice S. Behar, leader of

. the fund's portfolio manage

ment team since April

1996, is a senior vice president of

RISK FACTORS

.n1 the value of your invest

. 'i'

the adviser. She joined the adviser

II As with

mentany

will growth

fluctuatefund,

in 1991 and has been in the invest

response to stock market movements.

Stocks of emerging growth companies

carry higher risks than stocks of

larger companies. This is because

ment business since 1986.

emerging growth companies:

· may be in the early stages of

development

· may be dependent on a small

number of products or services

INVESTOR EXPENSES

% Fund investors pay various e:Kpenses, either

directly or indirectly. The figures below show

Example The table below shows what you would pay

. . Ð the expenses for the past year, adjusted to reflect

if you invested $1,000 over the v~rious time frames

indicated. The example assumes you reinvested all

any changes. Future expenses may be greater or less.

dividends and that the average annual return was 5%.

Shareholder transaction expenses Class A Class B

Share class Year 1 Year 3 Year 5 Year 10

Maximum sales charge imposed on purchases

Class A shares

~. m

(as a percentage of offering price) 5.00% none

Maximum deferred sales charge nonel') 5.00%

S64

S92

S123

S210

~£!~rt~~~:~~rJ~:f~i~C~ltl~~;~rrg~~2)~'~8'~:~~.:;~~::~:'.

Assuming redemption

at end of period S72 S97 S 135 S229

t~~~Q1'$!;i1ffjf9Pii~2iti¥i;5lï§?£:21.:::'~).~~,~~1\~.2.~?"..

~~Ka~~t¡a~rf~~§~r.I!'..":2:1tÊ~~:'!f~;:_::~~~~~l~it~q~21Il1F!jBn~:.~"

Exchange fee none none

This example is for comparison purposes only and is not a representation of

the fund's actual expenses and returns, either past or future.

Annual fund operating expenses (as a % of average net assets)

Management fee 0.75% 0.75%

;~!~~m~~i;;:';;:r~j.~Kf:~:...,~ië7C;~:E;;;';;~'gt~~I~~~%ji~:i?~~)~,'

Other expenses 0.40% 0.40%

STöt~i¡furìd.opërätT¡¡~ :êxpbSès"E)¿;;;::r~;-7s*¡~~nI~9~7t~~1~%,.:t..

(1) Except for investments of $1 million or more; see "How sales charges

are calculated. "

(2) Does not include wire redemption fee (currently $4.00).

(3) Because of the 12b-l fee, long-term shareholders may indirectly pay

more, than the equivalent of the maximum permitted front-end sales

charge.

8 EMERGING GROWTH FUND

NCIAL HIGHLIGHTS

. by the fund's independent auditors,

:$ The Ernst

figures

& Young

belowLLP.

have been audited

Volatility, as indicated by Class B

yea..by.year total

Investment return (%)

33.59

0.00

73.78

27,40

(11.82)

6,19

24.53

33.60

2,80

Class A - year ended October 31, 1991(') 1992 1993 1994 1995(2)

Per share operating performance

l",~,d_¡tlr,Ss_'~.'~~_,u~.,i5.:'-""ii.lnn.n nllnffn.~~øã~~ _ -. .~"'.. ~ ... ", ,...~.~~::. ... ...0 .",41ê~~iP.lìxm~iõ~li~få'g!f¥s26;8i

_ . "'..~=-~~__ll~ . _. - ~~~~~-. ;;~~S-~~"''i:'!3'!~':~o'~",::.J_,.",_~':c"",,,.:-""'.':

Net investment income (loss)(3) (0.03) (0.20) (0.16) (0,18) . (0.25)

~!i~~íl~~iße,i¡~~A~~~__¥.~m-~li~¿~~~~.

Total from investment operations 1.14 1.40 5.29 0.93 9,27

C~itif~~1l~1~~_~~~~~f~~~~~~~\S,;:i!;~E"

Distributions from net realized gain on investments sold (0.06)

~l1~i~ihi2iimr2~'gd:~L~-- ~ .'-''"-~~:__.~ :~~~~_~~iiP~Yai~gWBi~jilii1l~$l~itl~ji§~99.;,'

Total investment return at net asset valuel.) (%) 6.29 7.32 25.68 3.59 34.56

i!.:y'K!¡l!~p.~Em~~!m!1.~~~~'7f;1~~i¥~~l~!17~1k1~~1'~~.~~E~~~$+Wllif0~~~~~gd:~:7:Xf":::./"'...".,

Net assets, end of period (OOOs omitted) (S) 38,859 46,137 81,263 131,053 179,481

(~ipt~1ilx.Flsf~tq~Jl!ií.;;.mm~~!~~~Jf~!lm~;t-~ts~¡fj&~4t;;:~~~~,~lli\~i¥lt~~liiiiWj~3~I~¡Ù~.ii~;;~~.iiqf,.. '., 1:44' 1.;38

Ratio of net investment income (loss) to net assets (%) (0.15) (1.03) (0.71) (0.83)

. "age brokerage commission rate(S) (S) N/A N/A N/A N/A N/A

s B - year ended October 31, 1987(1) 1988 1989 1990 1991 1992 1993 1994 1995(2)

Per share operating performance

...Net~IsetNal~~lj~~9i;¡1!~frîi~~j~~~~~ì~1€~.1i~~~0Jji;3E~7;8~';Z~;T~J:89;T~I19;54~t';;s"~~§~\~ll~jJi~~Lj~E~;~~.:;-:'$20:34'.. ..S25.33..

S26.04

Net investment income (loss)(3) (0.0021) 0.09 (0.08) (0,22) (0.30) (0.38) (0.36) (0.36)

(0.45)

dN'~tS~~~J.~~gí~iit1Q¿~~lrít~¡~~ii~l~~§-?~~~~i~irE59:g§,~J.,'.,;:;~:~.~::át~;:~~§,Ifi~j;cit~Gi~¡;i#~~~Ä';~;~lI5W;~.'::ç:S;~S:~::;.....:i:,07,

..,9.2Q

Total from investment operations 0.0000 2.65 2.75 '(1.48) 8.16 1,18 4.99, 0.71

8.75

Dividends from net investment income (0.04)

~!~DJ~1~~~'Es¡ii9gjta~~l~lirêS~sl~¡~Q1ij~"i~rl-m~l~;ii~'ft'".iil~~j.~¿¡-;rcq;:::,i2;~ß(§6s£T(iÉ2fr~:s,~:J~hfaf96)!i~~~.:.~T..~:'.':..."....~è;':c..",,-,~7:,

Total distributions (0.53) (0.22) (0.06)

;N~l\2.~ti'L~ìinP:9lTi~~~i~-;i~J;l&llfgt~~~rç,~i.~~~~:XT~!9::.¥l::.:~g':i~~!G~;tilq~i~ì~J.?)~b:r;Bê,rll4G~~*1l3j~~;.:li~~Q1~....1~~;1~.

Total investment return at netasset valuec.) (%) 0.00 33.59 27.40 (11.82) 73.78 6.19 24.53 2.80 33.60

,iÎn~f~:~í~~Itil~1f;~iLq¡!&~t~~~1'~.!V?iRY;'(a~jX~d::r~lhç,9ff!:E2%lt1~1;,;g¡~,;.~~tg~~il~1l~:~~2rS~~:cç3:~~2t~~.

Ratios and supplemental data

;N~t;~~i$~i!~19~RG:a%i¡§i~lti~9Xê~~~l~~~~Ìi:t-:Zd~~l~;':~~a~;fE;tÍisZi~l;~t!~s~f~s~0~~'t~:8.¥~~23~g~i~J4ll't!~l;~i?t,~,9,~;4?i..

Ratioofexpensestoaveragenetassets(%) 0.03 3.05 3.48 3,11 2.85 2.64 2.28 2.19 2.11

~ati?'~~~~~"'~~'~~!~;d~t~,~C?~~(I?SS~ ~~,~verage net assets (%)._.. . ..., (~Æ)... 0;81.. (0.67) . (1.64),(1.83) . (1.99) . 0.58) (1.46) (1.55)

Portfolio turnover rate (%) 0 252 90 82 66 48 29

~:~j¡à'2f¿â9iII~t~(~fl,n~kf11We"~lE~~~lìet~~~~j!~:'i.ê::(a.¥f'....:t~(1.:78t'.'.;s(g~tgr;.~-'r:-?;::ß:~.':.~.:.¿,.~~:i:~:.:,:,,:~,~.'-;..d;"

N/A

Fi!e:rê,ciûctj§ri:¡;ei;:;~re'(~));:;t~3~J~:rèd':. ': 'dO:29':~dd'O.O~'.0~F'\:2'~b~'.:.~;:' '.:'-::""': '. ...,---_ '

Average brokerage commission ratel) ($) N/A N/A N/A N1A N/A N/A N/A

(1 \ Class A and Class B shares commenced operations on August 22, 1991 and

'ctober 26, 1987, respectively. (Not annualized.)

m December 22. 1994, John Hancock Advisers, Inc. became the investment

adviser of the fund.

(3) Based on the average of the shares outstanding at the end of each month.

(5) Per portfolio share traded. Required for fiscal years that began September I,

1995 or later.

(6) An estimated total return calculation, which does not take into consideration

fee reductions by the adviser 'during the periods shown,

(7) Unreimbursed, without fee. reduction.

(4) Assumes dividend reinvestment and does not reflect the effect of sales charges,

EMERGING GROWTH FUND 9

Growth Fund

REGISTRANT NAME: FREEDOM INVESTMENT TRUST II

iOAL AND STRATEGY

capital appreciation. To

this goal,

the fund

(!L The pursue

fund seeks

long-term

invests in stocks that are diversified

with regard to industries and

issuers. The fund favors stocks of

companies whose operating earn

ings and revenues have grown more

than twice as fast as the gross

domestic product (OOP) over the

past five years, although not all

stocks in the fund's portfolio wil

meet this criterion.

PORTFOLIO SECURITIES

_The portfolio invests

primarily in the common

U.S. companies.

stocks of

It may also invest in warrants,

preferred stocks and convertible

debt securities.

TICKER SYMBOL CLASS A: JHNGX CLASS B: JHGBX

For liquidity and flexibility, the

fund may invest up to 35% of net

assets in investment-grade shortterm securities. In abnormal

market conditions, it may invest

more than 35% in these securities

as a defensive tactic. The fund

may also invest in certain higherrisk securities, and may engage in

other investment practices.

PORTFOLIO MANAGEMENT

. Bernice S. Behar, leader of

. the fund's portfolio manage

ment team since August

1995, is a senior vice president of

the adviser. She joined the adviser

in 1991 and has been in the invest

ment business since 1986.

RISK FACTORS

.ni the value of your invest. 'I

II As with

mentany

wil growth

fluctuatefund,

response to stock market movements.

To the extent that the fund invests

in higher-risk securities, it takes on

additional risks that could adversely

affect its performance. Before you

invest, please read "More about

risk" starting on page 28.

INVESTOR EXPENSES

% Fund investors pay various expenses, either

directly or indirectly. The figures below show

D the expenses for the past year, adjusted to reflect

Example The table below shows what you would pay

if you invested $1,000 over the various time frames

indicated. The example assumes you reinvested all

any changes. Future expenses may be greater or less.

dividends and that the average annual return was 5%.

Shareholder transaction expenses Class A Class B

Share class Year 1 Year 3 Year 5 Year 10

Maxim'um sales charge imposed on purchases

(as a percentage of offering price) 5.00% none

f-Mi.

Èm\.

Maximum deferred sales charge none(l) 5.00%

~~~~~~§ïìJJ~~~~~~~if1fsl;~:'i8~igfr;¡t:;~Ifuii~llgiE~~i1B;;.

Exchange fee none none

Class A shares 565 595 5128 $220

rEJâšI~~~~~35~t~t~':dL:.:d=~::::¡:d',"'

Assuming redemption

at end of period 572. 599 $ 138 $236

~~g£~-l1.~~~p.~r~mP1g-ìf~T~~.~t't~ll'':;j~tU.IC~1;:l;S236.

This example is for comparison purposes only and is not a representation of

the fund's actual expenses and returns, either past or future.

Annual fund operating expenses (as a % of average net assets)

Management fee 0,80% 0.80%

'12b-1ífuoj-ec ....d:;:.~5!jiIdd..:;~:;:;j:;~'t~~rf~!.!IT;~~~~~%I2

Other expenses 0.40% 0.40%

Total.fúnd, 0'p~råtirig-expense~:::?:~lf~;~ii;~1;~F;.,;~?'¥1:5Ql;f~;7~::i:2Õ~r

(1) Except for investments of $1 milion or more; see "How sales charges

are calculated, "

(2) Does not include wire redemption fee (currently $4.00).

(3) Because of the 12b-1 fee, long-term shareholders may indirectly pay

more than the equivalent of the maximum permitted front-end sales

charge.

10 GROWTH FUND

NCIAL HIGHLIGHTS

:¡ The figures below have been audited

by the fund's independent auditors,

Ernst & Young LLP.

41.68

Volatilty, as indicated by Class A

year-by-year total

13,83

Investment return (%)

(8.34)

27.17

6.06

13.03

(7.50)

Class A - year ended December 31, 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995

Per share operating performance

~H~lIá~~Jgl~trílgiql~;~L&~._~iq_l~1I-i_1limmm~~l;¡l~!~8~i.

Net Investment income (loss) 0.11 0.22 0.23. 0.28 0.16 0.04 (0.06) (0.11) (0.10) (0,09)(')

i~flÇim~_n~~fl~~~~~_~~1ìl!~il~lÜLGXBi~:~g'

Total from investment operations 1.90 0.86 1.39 4.09 (1.31) 5.40 1.04 2.22 (1.31) 4.31

~~l~#~a~l~iD~lf~~~.~ _~æ!~.š~¡~p~~~~i~~1.~1~r;rtit~~:~;~~~~::~::.:~~;

Dividends from net investment income (0.17) (0.28) (0.23) (0.29) (0.16) (0.04)

~¡~Qi~øB~1l.gltti'&1IBlt__._.?iÎ9i~.._Q1š~J9ait~~~iqSi~lgl;j~g\ì:q)....::.d.fo.~~)

Total distributions (2.37) (2.55) (0.40) (2.24) (0.94) (0.85) (1.20) (2.14) (0.20) (0.69)

'N,et:ås~liX!r~~€m.1E¡lTh~atl"i:a1!.~tlgmi!lalilliê-l~~lt1sBl¥~!1?r~'!liz-rf~~~JÌ;1§;i.'Sjs~~~. ..... S;9.51

Total investment return at net asset value(2) (%) 13.83 6.03 11.23 30.96 (8.34) 41.68 6.06 13.03 (7.50) 27.17

Net assets. end of period (ODDs omitted) (S) 87,468 86,426 101,497 105,014 102,416 145,287 153,057 162,937 146,466 241,700

...Ratio of.~~êê~~~~ft$'~y~i;.9~l~~t'~~I~~t(~l?~:ti~?,E"~'¡~llØ!~Q~~~f3Ai9¡i~:li;;~Eil~~l¥Q;,~6~t1t~ì:;1§1i0J:~f~~;~ltiE~Q,~1~t~m:5~..:",',l :65.

1;48

- '."1 of net investment income (loss) to average net assets (%) 0.77 1.41 1.76 1.73 1.12 0.27 (0,36) (0.67) (0.64)

(0,46)

liô.:i~Ìñ9ie!i¡:~t~1tC!ølTJf~~e~~lB'1is~~~~~;itij.;k~"N1it~L~il§tfFi2'5~ë9~lti.E:~lS~:~~:;Zi:iE~;,:~i:.,~:,~8 .... S2

..dge brokerage commission rate(') ($) N/A N/A N/A N/A N/A N/A N/A N/A N/A

..68(3)

N/A

Class B - year ended December 31, 1994(5) 1995

Per share operating performance

..Net.ass¥i.i~~I¡¡ê,~~~~j~2îT~~~JiPß~!9il~~~5kidifit~~~1È;~ftjt£;itÆJ:~i':,;- .'.

S17:16 $15,83

Net investment income (loss)

(0.20)(1) (0.26)(11

. Net. rea¡i~~~darId~~ìl(~~j~~lgaTnÍm;~~)~aå;¡RV~~P~~~L~i21~:~ t,;"~'....,

"(0~93) -4.37

Total from investment operations

(1,13) 4,11

less

Distributions from net realized gain on investments sold (0.20)

(0.69)

Total investment return at net asset value(2) (%) (6.56)(6)

26.01

NetâsSe.:,l,7.\l,.~,ì~è:.;tri1i,~.I.o.",J".dí),è...l¡P,.'..d_.',.'!.,;.:t~..~_.~,l',.,d.r:.i.d~.~-,¡.,.;.r...0&iF_.::.,'.~_i..r=_C,ii~,d,:.r'.:,t,;;.~,.Pm""~~._;:.'.;)L,\f~.:-£,"..~,'.....;.'..'

,.,' ,. '. ";.:ô;~,,,".:."J'::'7":7.'':~i': C:~.:-.":~d:'.'c~":;'.::

... .__:.$.,.1,.5_:..8,.,',3.,..,."

S19,25

~. - .- ~"-~ - - '"~* _.. ...~~__.~-¡::,....~~..-~. .. ,. _._:..~,:~-,;~J~.;¿r.~:~;.¡~-:o/,\i.t~5~~;::::-:~':::~~~~;~_"

;.:'-.::~::~:"~':.........'.~:~.;.~;.;:

. .~: . .

a-~t~ei~~~~:~~pl~m!~~~~~~.æ:æl~~li~~~:~~~.~~~7 ,\-, :.,.:~~~~~:£;~.~0~~L:l~:j~:2:;~i~¿:li;i:~i~~;~~i_:,¡i,&~:.t..~-..:~f~;~~~~..¡.~:~~:~.:;.~:~~~i~:;~~Ä;~....~

N~t.~~:!~,~~~~~f"peric:d(Oo~=-o.i:it~~~(~) ~___",. .... .". . ... ..... .... .,.... .. '. . 3,807 .15,913

"Ra!!9;~fl~~ii~;!~f~1!~~~f~f$1,~.ilWt~~f,Æ~~~j~.¡~£:~~DÚ:t.~:l~;;t,;;.~:~?E~~¡~i;~:~~~¡f~liffrtii¿~k~i.~~~~ç,':~~~i.li~~fi~gi!'ii~'~~.~~.~:~;

Ratio of net investment income (loss) to average net assets (%) (1,25)(7 (1,39)

,68(3)

Average brokerage commission rate(') ($)

~ 'sed on the average of the shares outstanding at the end of each month.

sumes dividend reinvestment and does not reflect the effect of sales charges,

\'" Excludes merger activity.

N/A

(5) Class B shares commenced operations on January 3, 1994,

(6) Not annualized.

(7) Annualized,

(4) Per portfolio share traded. Required for fiscal years that began September 1.

1995 or later.

GROWTH FUND 11

Regional Bank Fund

TICKER SYMBOL CLASS A: FRBAX CLASS B: FRBFX

REGISTRANT NAME: FREEDOM INVESTMENT TRUST

OAL AND STRATEGY

PORTFOLIO SECURITIES

in the common stocks of

capital appreciation. To

pursueseeks

this goal,

the fund

eL The fund

long-term

tI The fund

primarily

U.S. invests

companies.

It may

invests in regional banks and lending

institutions, including:

· commercial and industrial banks

· savings and loan associations

· bank holding companies

also invest in warrants, preferred

stocks and investment-grade

convertible debt securities, as well

as foreign stocks.

These financial institutions provide

full-service banking, have primarily

domestic assets and are typically

New York City and

based outside of

Chicago. They mayor may not be

members of the Federal Reserve,

and their deposits mayor may not

be FDIC-insured. Under normal

circumstances, the fund wil invest

at least 65% of assets in these com

panies; it may invest up to 35%

of assets in other financial services

companies, including lending

companies and money center banks.

1ecause regional banks typically pay

.egular dividends, moderate income

is an investment goal.

performance, which may differ in

direction and degree from that of

For liquidity and flexibility, the fund

may place up to 15%

of net assets

in cash or in investment-grade

short-term securities. In abnormal

market conditions, it may invest up

to 80% in these securities as a

defensive tactic. The fund may also

the overall stock market. Falling

interest rates or deteriorating

economic conditions can adversely

affect the performance of bank

stocks, while rising interest rates

will cause a decline in the value of

any debt securities the fund holds.

Before you invest, please read "More

about risk" starting on page 28.

PORTFOLIO MANAGEMENT

e James K. Schmidt joined

. John Hancock in 1985 and

has served as the fund's

invest in certain higher-risk securi

portfolio manager since its inception

ties, and may engage in other

investment practices.

that year. A senior vice president

RISK FACTORS

investment business since 1974.

of the adviser, he has been in the

,ni the value of your invest. 'I

II As with

growth fund,

mentany

wil fluctuate

response to stock market movements.

Because the fund concentrates in a

single industry, its performance is

largely dependent on the industry's

INVESTOR EXPENSES

~ Fund investors pay various expenses, either

directly or indirectly. The figures below show

D the expenses for the past year, adjusted to reflect

Example The table below shows what you would pay

if you invested $1,000 over the various time frames

indicated. The example assumes you reinvested all

any changes. Future expenses may be greater or less.

dividends and that the average annual return was 5%.

Shareholder transaction expenses Class A Class B

Share class Year 1 Year 3 Year 5 Year 10

Maximum sales charge imposed on purchases

Class A shares 563 592 5122

(as a percentage of offering price) 5.00% none

~1l~l~taì~L. 1f~'''~Sia;~

Maximum deferred sales charge none(') 5.00%

;ll~~~~a~;,tè~~7t~'t;l0'::'~:t-~1ifJ;~~E?~T,~2t~~~~r':;~;s~t(~nfT"7.'

Exchange fee none none

5209

~Titii6.~ri,ti?Æ~¥;tE~:;£~~åi'~i~.Y::~'¡:::i'ió:..:d'.:.':E;~-'.:d..

Assuming redemption

at end of period 571 595 5132

5224

~;'~~~~~!ijij:Jik,1~a~~P~Rti~f/j2iil::'~g;-65,; "-':51:1 2,

5224

This example is for comparison purposes only and is not a representation of

the fund's actual expenses and returns, either past or future,

Annual fund operating expenses (as a % of average net assets)

Management fee 0.78% 0.78%

. -,",",,,;:.~".,.",,~~,,.t;¡illJ?~1.2;l~~Î~tlllé.9~? .

Other expenses 0.31 % 0,31 %

~ltot~!~Nnd'ppèråti~g "êXjiïsê"iidE;:-d.d,'?,~;; j~~;i2~t.¥.~îTi~!i;1ÍË£~iQ'~.%!s='

(1) Except for investments of $1 million or more; see "How sales charges

are calculated, "

(2) Does not include wire redemption fee (currently $4.00).

(3) Because of the 12b-l fee, long-term shareholders may indirectly pay

more than the equivalent of the maximum permitted front-end sales

charge,

12 REGIONAL BANK FUND

NCIAL HIGHLIGHTS

:, The figures below have been audited

by the fund's independent auditors,

Price Waterhouse LLP.

Volatilty, as indicated by Class B

37.20

36.89

36.71

year.by-year total investment return ("/)

(32.29)

Class A - year ended October 31, 1992(1) 1993 1994 1995

~S:

~£~$ìl~s?~

~i;F~íf~øijl.!g~(¡~nD"I~_i9~~~jSi~jL.

Per share operating performance

Net investment income (loss) 0.21 0.26(2) 0.39(2 0.52(2)

Total

'from investment operations 4.19 6.10 1.30, 6,44

;~~Eïi~ri&~~~1L~~JIr.im~~~~~~t~~~it~~\TI3~f~id~t:~.~,~

Dividends from net investment income (0.19) (0.26) (0,34) (0.48)

~~ttf~r~~~llqñ~ft£;n~~l!~~il;~lfi~!!l\lnfxt~n~~~~'lf~tI=r~~~!!!f~:~Ji_~~llirl~~~~!:Jr\;;;(§~3,4)è'~.'

Total distributions (0.19) (1.95) (1.40) (0.82)

Total investment return at net asset value(l) (%) 31.26(4) 37.45 6.44 31.00

'N:~tr~~~!!Hl~rr~rÖJprmV~~~_IRï:f;g~'1i~~1~~I~~¡ti~l.íí'i¡'S~iflij~~~~il!lli~~Îtt~~$~~J~i~~~~t~~íïd:s~.~:::.#i;'1~4 .

Net assets, end of period (OOOs omitted)($) 31,306 94,158 216.978 486.631

~-.;l) of net investment income to average net assets (%) 1.64(5) 1.29 1.78 2,23

'\j$l~r6~léflr~t~liL,~~I:~t~if4t~i-ili'~~r~l1T;~d~1~ji~I~;;ftìl~1~iÉ~l~iøllfl~§~~~~r3.~sIfsl;;;~i3.' . .14.

..ge brokerage commission rate(6) ($) N/A N/A N/A N/A

Class B - year ended October 31, 1987(7) 1987(8) 1988 1989 1990 1991 1992 1993 1994 1995

Per share operating performance

'.tJ~f;~~~rt~I~~~g~hibg1~m~ÎiéfiIt~~~~~lt~-':f~¿~lt~l#.~!;r~t~~!TtIfa'~~j's;1§to-~~-n~11~.1fgi.1~i§§~~~~j,~t~rflIEi~)~.~~!ïZ~~':~';~~~:(56'

521:43

Net investment income (loss) 0.20 0.05 0.16 0,20 0.30 0.29 0.18 0.15(2 0.23(21

0,36(2)

N~fr~~li~l~¡:~ii~:~nr~'~lfz~rg'â\niQ8~i:ir.n:aQ~SiIni~~lltCf.~~t:;i-..ilI;t;.l?~tl),: .', ~:;.:3;:?~~:L-;i¡,§~.~i;iJ~I19I;JÀ¡~:~§'ttâ~Z£r~G:;:::~5:83':,:," ''''0.91.

5,89

Total from investment operations 1.94 (2.12) 3.28 2.22 (3.89) 5.97 4.74 5.98 1.14

6.25

Dividends from net investment income (0.26) (0.04) (0.15) (0.16) (0,19) (0.34) (0.28) (0.17) (0.21)

(0.32)

.:i;j?JSi,~lm1iiíff~ffó~:nët~~lí~~~;gi¡m~~:¡~~.ttn~;~f~~li~§jI~5i~l§~~9L:,:;~~ì1â~:~~~&i~1JJf~~W~):~1TI;t:;)£iiit:(Q:zs);2~IE~~'~';';;(1.Ó6.l,,, .,' (0;34).,

Distributions from capital paid.in . (0.03)

..,.~.~.To~I~1~ìt¡~ry~:0L~i;~;~:;:;,~1Jf*)~f~~1~Nii§i-;g~&11m~il~-l~X¿j:,mJ;11i~1L~2i~Q;9j)~Jo~~illl7a~%i~&:(1:I~~l..:~3.i,~~1).:; .i_(~:~6)"

Net

asset

value. end of

period $12.68 $10.02 $11.89 $13.00 $8.13 513.76 517.44 521.56 521,43 $27.02

,;ti.i~~~~~i~tjmii~:~r~~~~$y~~i:rri'j~,çl!r~~~l~Jg(t?I~I~~~dl4l!9~~~,9!~~~~))~~s~a~g~Æ~::'9It~71I~9;#/

Ratios and

supplemental data

':N~t~iiè:~~~;af,'P1!~~(òõ:ômift~r:(Š~~~I5;~i.f,~I:i~I~1~¡¡S4!6ìfWi~:a-å;721'...,..:.50;96S~~8'l~1¡igl.J3il~z!!i¡íff~560f(#;)~ôã;tS2ì;ì07..:1¡236;447.

,R~!i~~fe~£:Fs~~-t~"~~;ra~g"e~!tas~~~(%l--'-~--A8~-~2Ä7~5) ..2.17' ...1.99... 1.99... '..2:04 .. ,...1.96, 1.88 ..... . 2.06'''-i~Ò9''

'Rati~9t;,i~jijri~~tÖentJisPfu~;(ï£i~Yit~~v~rng~bit.~~~1~I;Il.;§~I*;;~i9;7~(~L~i'\.;~:;~~i0i¥'Úi~?4J:~~~!?,i.fi~"2~¡~:~~SS;t7Ù~~,,:i;al6=.,'d:~~',1.;07 " ,,1 ;53

Portfolio turnover rate (%) 89 58(5) 87 85 56 75 53 35 13 14

'A~~(áQ~'~;~ke£agVsV~irl~~òiir~t~~B~rr:~2~~~07~~lI;:S~WA:':~:;:JBl~=L~;j:w~~t2:fl&12;:;;~Nl~~J.g:N?A~?;~~~":ÑiA .i..:-"'~-N¡,,:" N1A

"ass A shares commenced operations on January 3. 7992,

Jsed on the average of the shares outstanding at the end of each month.

(6) Per portfolio share traded. Required for fiscal years that began September I,

1995 or later.

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

(7) Year ended March 31, 1987.

(4) Not annualized,

(8) For the period April

1 , 1987 to October 31, 1987,

(5) Annualized,

REGIONAL BANK FUND 13

Special Equities Fund

REGISTRANT NAME: JOHN HANCOCK SPECIAL EQUITIES FUND

TICKER SYMBOL CLASS A: JHNSX CLASS B: SPQBX

OAL AND STRATEGY

" For liquidity and flexibility, the

fund may place up to 35% of assets

capital appreciation. To

in cash or in investment-grade

this goal,

the fund

81. The pursue

fund seeks

long-term

short-term securities. In abnormal

invests in small-capitalization commarket conditions, it may invest

panies and companies in situations

more than 35% in these securities

offering unusual or non-recurring

as a defensive tactic. The fund also

opportunities. Under normal

may invest in certain higher-risk

circumstances, the fund wil invest

securities, and may engage in other

at least65% of assets in a diversified

investment practices.

portfolio of these companies. The

RISK FACTORS

fund looks for companies that

response to stock market movements.

larger companies. This is because

This fund will be closed to new investors at the

these companies:

end of the day its total assets reach $2.5 billon,

· may lack proven track records

Further investments will be limited to existing

· may be dependent on a small

tlanies. It may also invest in

warrants,

preferred stocks and investmentgrade convertible debt securities.

day-to-day investment

subadviser to the fund.

demonstrated annual earnings and

revenue growth of at least 25%,

self-financing capabilities and strong

management. The fund does not

invest for income.

in the common stocks

. Michael P. DiCarlo is

. responsible for the fund's

carry higher risks than stocks of

fragmented industry, and that have

lI The fund

of U.S.

invests

and foreign

primarily

com

MAN AG EME NTIS U BADVIS E R

Stocks of small-capitalization

and special-situation companies

.ini

If the value of your invest-

II As with

growth fund,

mentany

wil fluctuate

PORTFOLIO SECURITIES

which can increase market and

liquidity risks. Before you invest,

please read "More about risk"

starting on page 28.

management. He has served as the

fund's portfolio manager since

January 1988, and has been in the

investment business since 1984.

He is currently one of three princi

pals in DFS Advisors, LLC, which

was founded in 1996 and serves as

dominate an emerging industry or

hold a growing market share in a

In addition, stocks of these compa

nies are often traded in low volumes,

accounts,

number of products or services

· may be undercapitalized

· may have highly priced stocks that

are sensitive to adverse news

I NVESTOR EXPENSES

% Fund investors pay various expenses, either

directly or indirectly. The figures below show

D the expenses for the past year, adjusted to reflect

Example The table below shows what you would pay

if you invested $1,000 over the va~ious time frames

indicated. The example assumes you reinvested all

any changes. Future expenses may be greater or less.

dividends and that the average annual return was 5%.

Shareholder transaction expenses Class A Class B

Share class Year 1 Year 3 Year S Year 10

Maximum sales charge imposed on purchases

Class A shares $65 $95 $ 128 $220

(as a percentage of offering price) 5.00% none

~~~Wi;~~f~~r""~~~~iir;i1~~ll\lKr~~l~r~¡~~;. .

Maximum deferred sales charge none(') 5.00%

ft'í~~~ifŠ-R~~!:5~r'6¿'¡~:fgr~~g.~!2iìE~1;li¡~~ff~~:~!::.':: ..

Assuming redemption

at end of period $73 $99 $ 139 S237

:'..'~ÁSš~!nìng::ií'~~'r~~miWAA~l~îi;':~H;:;h~$~9,~t~~~~~lt9d:d~;;,?;S~37 ....

:R~~è;i¡:pi'9~)t~~~:~;~2;:0~;'?iE:;;r!:~;t;.i;::5~B~.æ~êië:~~!i.~ò1i~;~~:_.

Exchange fee none none

This example is for comparison purposes only and is not a representation of

the fund's actual expenses and returns, either past or future.

Annual fund operating expenses (as a % of average net assets)

Management fee(3)

0.82%

(1) Except for investments of $1 mil/ion or more; see "How sales charges

Other expenses 0.38% 0.40%

:fajåljf!ìcr:oPërãtiriif~x¡iì~iR:;';'.::;':'Ä~~'~'~:'~ttt~lj~Æ~;t~,J~~~~%i'

are calculated. "

(2) Does not include wire redemption fee (currently $4,00).

(3) Includes a subadviser fee equal to 0.25% of the fund's net assets,

(4) Because of the 12b-1 fee, long-term shareholders may indirectly pay

more than the equivalent of the maximum permitted front-end sales

charge.

14 SPECIAL EQUITIES FUND

\ICIAL HIGHLIGHTS

~4 The figures below have been audited

by the fund's independent auditors,

Ernst & Young LLP.

. .

95.37

31.82

Volatility, as indicated by Class A

year-by-year total Investment return (%)

(28.68)

47.83

37,49

20,25

(0,12)

Class A - year ended October 31, 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995

Per share operating perfrmance

~~'U~~~~~

~ ~_.___ ----...~~~r..,..._....~_.~_._

Net investment income (loss) (0.03) (0.03) 0.04 0.01 (0.12) (0.10) (0.19)1') (0.20)11) (0.21 )~1) (0.18)11)

~gf~~'1f~ilg~f~~~_.~,;, . .'~ø "8~'~~~rl_ipj:$ill$1ßã~~$'i6~j~f:'

;,f4..'et5ièal.i~~a;!Iõ¡l.fifn~~. aJžI.8:\9ãih1(ì~¡a~1!-l.~.'k ~~. .'. 'il !9~~6\:~)'1~;¡~H'fl!::J~)""~~~'"I4_~Y,~1i~fr~~i-2I'_

~,o"'~~""lii"_:i""'£,~¡-"~_",=--v'~'L_,-_~m;..~~...~.""~..,,~~~~_

_~ ~_~~Hri¡;""",~"~,,,,,,_.,,;,,,,,_.,

Total from investment operations 0.90 (1.29) 0.59 1.54 (1.39) 4.74 1.95 5,23 (0.02) 6,04

Dividends from net investment income (0.02) (0.05) (0.02)

,jii~J~lI~lmi:IDm~~~~sQlliii.-iq~~i~='5::;.~~~_!:1f:æQlsill~~R~;:g9,i"r;~~i~;c::i~'.... -",

Distributions from capital paid-in (0.04)

m~it9lI!lIwlÌ1fM~lta_.¿~I;~-''._olq3fi;ta¡~r§:;~~glg~~~t;~~I§~§V~:;'~lBg;q~I:~2~~;f;'.~.'~,'..

Net asset value, end of period $6.08 $4.30 $4.89 $6,38 $4.97 $9.71 $10,99 $16.13 $16,11 $22.15

i.Ï~iiEi~,~ßíjMiÍ~l~ffm!l!lii~¡lllimibjt.~1i!fi~12mi1j1¡¡!(a1.~!!lfi~~,~~líf~i~~a;i~\I;:":t~!;8~;;;to.ji):..:. ......37;49

Total adjusted investmentreturn at net asset value(2,3) 15.41 (29.41) 12,28 30.75 (22,21) 95,33

N".'~sets,endofperiod(OOOsomitted)($) 13,780 10,637 11,714 12,285 8,166 19,713 44,665 296,793 310,625 555,655

;;~~~~s~líg!~~!lQ1J1ta~!~ij~~~:~~;iJ~1r¡~~~~gI~~~;~T~QJ;,~;~~~tr~q~1~~(~f~i§g1~I:i-~§rtr~;~Iis.~b0~;~:~(~::'i:'J.:¥

',.. J:~i~. U8

A adjusted expenses to average net assetsl') (%) 3.47 2.23 2,94 2.57 2,95 2,79

.Rãif?~r~!1~~~~t~,~£§~i~'W~~:~~g!~~~:6lt~$iiq!lì2¿i~~:~q~~zj:~;ttr§§'i~i~lt;~~§;1t;~~J~~ùs~i;1~sß:I*J;;';i;(~.~9)i:;.~:~'(1_.49l~.'~.'(lA,O)..:...

(0.97)

Ratio of adjusted net investment income (loss) to average

net assets(') (%) (2,54) (1.30) (0,62) (0.60) (1.90) (2.16)

pcirl-G!~:~grn?~~EY~lfit~r:ti~~i~¡lì%1f~~t~~¥1~tJ1I~1~~1~~~J¡i:~;;~l&~Æi2¡::~s1:ti1¡~L;f;i~:~rf;'i-¡~'EJ~:~'~&Elif~F: c:-;~li4 ;,.:'.' ',33.,. .- .. .66 .

:.AYIi~~~€~2.~~t~~~f~~~ph~D:il~~~Ntl~~Aî~\~if¥~filr;!c~Af~?i:~iWA~t~~rNlM¡:~~BÆ~~~;;Ì:¡¡,~:i¥A~~~*¿ 'N1Aò.'

NfA

Fee reduction per share ($) 0.09 0.04 0.07 0.03 0.02 0,002

Class B - year ended October 31, 1993(6) 1994 1995

Per share operating performance

~~~~~~mM~~lä~~"!~~j~~~~~Æ#~~~~il~~ifl~;;~¡lk~r.t~l%~ff~;¡~t~Æ;ig~m:'j-~2~;~~;~o:1:~~6:;~~~'~~äš:~f

.Neti.~~estm!n~!ncome~loss-i .__.. .. _ ... .,.. .... .. . . . (0,18)(1) (0.30)(1) (0.31)(1)

'N~;;(~~lépl;à~~HrriIDi~~Å\ffig~jì~i:~1W~~G?~~~.i~~i4t,~t;t~:,l¿.~~~~~%~j~~1~~~~~f'~fá;f:f2;o,~t,i:;;J;t,t¡h~~lf~,~WE~iQ~!~~i~;~'t:,t5,...

!~!~I~~~~~.:~me~i-~.:atio~._ . . .,., _ 3.78 (0.11) 5.84

:~,ltt;~i~~1ì~~~1M~§!æ~~~~~~f.j¡ti~Éi~0I~;:~:tifi~$l~R~~?tR&~;k::;~j:~~'.;::S:;~~!'~E4~¿i,1ilrfì£~f~ir~~Íšrr~'lS~1f2::s~;t~i6:0~3¥11I9ir\;,:$i1;š'(~'

Total

investment

return

net

asset

value(2)(%) . ... .. .. .. . . . .30,73(7j'(Ö:68) ... '36:57

;,R~~!.;rt-~~ajap'_¡r~m'tntira!æ~~~,~t;:~~t~~:~¡?a:!j;~~S.Ëf~~é:-':ió,:~::;Íf~Jf¡;f1i.;~m:riJl~f~~~2~S~~;S:~~it;;~;:~~;;t,;çE~~fD¡;::'~

.~et,a~s:ts,. en~. o!J?eriod (OOOs omitted) ($) . . . 158,281 191,979 454,934

'~~22R!Ii~i~lí~~~tt~t~;a~a~¥$'~~Æ~;t'.:~W:,~:l~~:;';.'.~~.:~~~f;:B(:~';;¿,~:-'~;::~¿:x?g'~;~:~rn;~~:=:~.:'::'=F:::::.;;::-;:'!ìj4(ei~;c:~:2:iS':,~;C')ï:i.öd'..

Ratio of net inv~~t~~~me'(i~;i';;;;; n~t a;;ets (%) -~'_._-,",._-~.,_."-,,;--,,,-,,,,--,,,,..~-"~,,,..,.,,.,_..~._"~"~-"'.'''M''li:o3~âl-'-(2:Õ:ž)'-'''(l:69)''

Average brokerage commission rate(5) ($) N/A N/A NIP. .

oed on the average of the shares outstanding at the end of each month.

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

G:i¡ An estimated total return calculation which does not take into consideration fee

reductions by the adviser during the periods shown.

(4) Unreimbursed, without fee reduction.

(5) Per portfolio share traded. Required for fiscal years that began September 1,

1995 or later,

(6) Class 8 shares commenced operations on March 1, 1993,

(7) Not annualized,

(8) Annualized.

SPECIAL EQUITES FUND 15

Special Opportunities Fund

TICKER SYMBOL CLASS A: SPOAX CLASS B: SPOBX

REGISTRANT NAME: FREEDOM INVESTMENT TRUST II

1AL AND STRATEGY

PORTFOLIO SECURITIES

number of sectors or issuers, the

_The fund invests primarily

fund runs the risk that any factor

invests in those economic sectors

that appear to have a higher than

in common stocks of U.S.

and foreign companies of

any size. It may also invest in war

rants, preferred stocks, convertible

average earning potentiaL.

debt securities, U.S. Government

influencing those sectors or issuers

wil have a major effect on perfor

mance. The fund may invest in

companies with smaller market capi

talizations, which represent higher

securities and corporate bonds rated

near-term risks than larger capitaliza

at least BBB/Baa, or equivalent.

tion companies. These factors make

the fund likely to experience higher

volatility than most other types of

growth funds. Before you invest,

please read "More about risk" start

ing on page 28.

capital appreciation. To

goal,

the fund

€I&., Thepursue

fund this

seeks

long-term

Under normal circumstances, at

least 90% of the fund's equity

securities wil be invested within

five or fewer sectors (e.g., financial

services, energy, technology). At

times, the fund may focus on a single

sector. The fund first determines the

inclusion and weighting of sectors,

using macroeconomic as well as

other factors, then selects portfolio

securities by seeking the most attrac

tive companies. The fund may add

or drop sectors. Becausethe fund

may invest more than 5% of assets

in a single issuer, it is classified as a

The fund also may invest in certain

higher-risk securities, and may

engage in other investment practices.

For liquidity and flexibility, the

fund may place up to 10% of net

assets in cash or investment-grade

short-term securities. In abnormal

market conditions, it may invest

more than 10% in these securities

as a defensive tactic.

RISK FACTORS

."1 the value o. f your invest-

non-diversified fund.

BAs with

any

ment

willgrowth

fluctuatefund,

. 'I

PORTFOLIO MANAGEMENT

e Kevin R. Baker is leader of

. the portfolio management

team for the fund. A second

vice president of the adviser, he has

been a member of the management

team since joining the adviser in

January 1994. He has been in the

investment business since 1986.

response to stock market movements.

By focusing on a relatively small .

I NVESTOR EXPENSES

% Fund investors pay various expenses, either

directly or indirectly. The figures below show

Example The table below shows what you would pay

any changes. Future experies may be greater or less.

if you invested $1,000 over the various time frames

indicated. The

example assumes you reinvested all

dividends and that the average annual return was 5%.

Shareholder transaction expenses Class A Class B

Share class Year 1 Year 3 Year 5 Year 10

Maximum sales charge imposed on purChases

Class A shares

D the expenses for the past year, adjusted to reflect

, (as a percentage of offering price) 5.00% none

tM~mu'šã""

J~in~w!~tgl~'

Maximum deferred sales charge nonel') 5,00%

~~~~;mR~~n¡t~~~1~iij~~~Z~~i~~rr~i~;r~9!1~.;~.

Exchange fee none none

Annual fund operating expenses (as a % of average net assets)

Management fee

0.80%

565

598

51~2 '

.5229

ri£Î~1.~~r.~si~~t~~~tJl1l1tJÊj~~!~ils~~~~~T¿.~~~~.~:: .

Assuming redemption

end

period 573 5102 5143

$245

~r(~SLrYl~~1fêd~llt§&ilf~~;f£:~R~~i~;Jl~lli~~:.~ $245,

This example is for comparison purposes only and is not a representation of

the fund's actual expenses and returns, either past or future.

0.80%

(1) Except for investments of $1 millon or more; see "How sales charges

Other expenses

, Tòtal:fun~.op;r~tiíig:e~nses;,:'..:'

0.49% 0.49%

. ";,~Rc~~~;S~1:59'%:~r~%~ï:ï9%,Z.'.

are calculated. "

(2) Does not include wire redemption fee (currently $4.00).

(3) Because of the 12b-l fee, long-term shareholders may indirectly pay

more than the equivalent of the maximum permitted front-end safes

charge,

16 SPEC IAL OPPORTUNITIES FUND

l\NCIAL HIGHLIGHTS

~ The figures below have been audited

by the fund's independent auditors,

Price Waterhouse LLP.

17.53

Volatility, as indicated by Class A

year-by-year total

Investment return (%)

(6.71)

Class A - year ended October 31, 1994(1) 1995

Per share operating performance

rNßttlimxãW§:;r~'lñlfm__p~_~~2~~~~~ti1.Q!Æfii,:ri¡~~.'

Net investment income (loss) (0.03)(2) (0,07)(2)

~lltI~lI~~~$:~if~1~llø~.~~&'~~~_~~~~~~'i.l~18!,š;JI~~i;fi€

6~~

Total from investment operations (0.57) 1.39

~E~l:r~l~aKi¡~~~.E~'%~~: . ~H"'.;~"'i¡'"~"'~~~~.Æii-€~I~~~g~~l!~~;E'.;~~~~~

Total investment return at net asset value(3) (%) (6.71) 17.53

;Æc?¥i1Rß!lt~rtBlii.~~~'i!~~=--m~W1!!!~~11;~~t;f~~L(~~:~~ll(6Imli,:~,7dS;dP.

Ratios and supplemental data

Ratio of expenses to average net assets (%) 1.50 1.59

;~ä.~~¡9lga¡H~f~~t~~i~!9~~~ñ~liltt¡1rt%Î~~~~i~~~~t~i.~i~i;#\tilf~i;tl,l~~i?)¡¡:t;~a~\1;!"ii~~':~~Jj~;'tp£:~::tf,r~~~,:\;~i~;',::.'C';"!~~~;,.:.,_"~,,,:- _

Ratio of net investment income (loss) to average net assets (%) (0.41) (0.87)

Portfolio turnover rate (%) 57 155

r¡¡itici9f:,â~jus,t~~:n-~Ei¡V~st~~:n.tW~~l.¡!2~V;~~~L~I£~~§~~ir~~~l~lfl~J!E'i¥~~I~;s7J.g~d:~'t~~';;f:0r .. ","". .',;; ;..".. ,~.." , ,(O~S3)

dge brokerage commission rate(6) ($) N/A N/A

Class B - year ended October 31, 1994(1) 1995

~0.01 (2)'

Per share operating performance

"S~:5q.

Net investment income (loss)

'.'Net.r~¡¡¡¡~~~~;nd'~o.~~iz.ed~å'n:;QoISl'9~!fY~~.iJg~~~1~T~~~ifg~~.:,~B:'::::::'.(

_ ~n_._... ~~..~.

- .--' ".' . ''',' ".",... ~~

Total from investment operations

- .. .....

. "_.

".--...,.....

S7~87

(0.09)(2;

(0,13)(2

.(0.54) .

.,1.45

(0.63)

1,32

-7J7;~7::. ~. ~S9~.1 ,9

Total investment return at net asset (%)

(7.41 )(4)

16.77

:tö-t~~~l~šf~ÇTìwe~t.m~RtT~~~~~I~îi~~1l~J~iill~~:;$lt~TI~fJ;;'.~';Ci':'

Ratios and supplemental dáta

Ratio of. expenses to average net assets (%) 2,22 2,30

;,~~t~s~~.!~Qgi~K&!il¥f2Q91r~;¡nfqi;iji~~~~~f~gg:E~;~if;:-;L;;;.;::,:~-,,; "" ,., i'~;.::t3l,9'8.~; ,137,363

!R~ti~i?E~4j~~~§~~n-~i~ifug~If\~1¥'~i~~~~r~r~;lF~fi1:tjj;;;~H~~-,.:c:;;~'?;Ú¡~fl~r.;.;;fl,,~~g¡~~~~~,¡~ii.~;S;It&;::,!",S~t~~;~~'~¿t~2¿:~ß,~;-~:;..~....; ..'

R~~? ofn:~.~~.::.~~ent income (Io~s) to averagenetassets (%). ....... .. . (1.13) (1.55)

Portf?~?~~r_n?ve! r~te, (%) 57

'R~ti~pfa~jiJS!~d'n~t~in';tferif(iô~2!ò:~§r~~lEil~l~~~~~Ujil;~1$L:;::.:~,:-d:-:.-,dd: · .'~1..25)

Feered~ctìòiii)er share:(S) . 0.01(2)

Average brokerage commission rate(6) ($) N/A

-lass A and B shares commenced operations on November 1. 1993,

ased on the average of the shares outstanding at the end of each month.

Assumes dividend rem

vestment and does not reflect the effect of sales charges.

(4) An estimated total return calculation which does not take into consideration

fee reductions by the adviser during the periodS shown.

155

N/A

(5) Unreimbursed, without fee reduction.

(6) Per portfolio share traded, Required for fiscal years that began September 1,

1995 or later.

SPECIAL OPPORTUNITES FUND 17

ALES CHARGE REDUCTIONS AND WAIVERS

Reducing your Class A sales charges There are several

ways you can combine multiple purchases of Class A

shares in John Hancock funds to take advantage of the

breakpoints in the sales charge schedule. The first three

ways can be combined in any manner.

. Accumulation Privilege - lets you add the value of

any Class A shares you already own to the amount

of your next Class A investment for purposes of

calculating the sales charge.

· Letter of Intention - lets you purchase Class A

shares of a fund over a 13-month period and

receive the same sales charge as if all shares had been

purchased at once.

· Combination Privilege - lets you combine Class A

shares of multiple funds for purposes of calculating

the sales charge.

To utilize: complete the appropriate section on your application, or contact

your financial representative or Investor Services to add these options to an

existmg account.

Group Investment Program Allows established groups

')f four or more investors to invest as a group. Each has

n individual account, but for sales charge purposes,

their investments are lumped together, making the

investors potentially eligible for reduced sales charges.

There is no charge, no obligation to invest (although

initial aggregate investments must be at least $250) and

you may terminate the program at any time.

To utilize: contact your financial representative or Investor Services to find

out how to qualify.

CDSC waivers In general, the CDSC for either share

class may be waived on shares y.ou sell for the following

reasons:

· to make payments through certain systematic

withdrawal plans

· to make certain distributions from a retirement plan

Waivers for certain investors Class A shares may be

offered withoudront-end sales charges or CDSCs to

and institutions, tncluding:

. government entities that are prohibited from paying

mutual fund sales charges

various individuals

· financial institutions or common trust funds investing

$ i milion or more for non-discretionary accounts

· selling brokers and their employees and sales

representatives

· financial representatives utilizing fund shares in fee-,

based investment products under agreement with

John Hancock Funds

· fund trustees and other individuals who are affiliated

with these or other John Hancock funds

· individuals transferring assets to a John Hancock

growth fund from an employee benefit pl.an that has

John Hancock funds

· members of an approved affinity group financial

services program

· certain insurance company contract.

holders (one

year CDSC applies)

· participants in certain plans with at least 100 members

(one-year CDSC applies)

To utilize: if you think you may be eligible for a sales charge waiver. contact

Investor Services or consult the SAI.

OPENING AN ACCOUNT

1 Read this prospectus carefully.

2 Determine how much you want to invest. The

minimum initial investments for the John Hancock

growth funds are as follows:

· non-retirement account: $ i ,000

· retirement account: $250

· gi:oup investments: $250

· Monthly Automatic Accumulation Plan (MAAP):

$25 to open; you must invest at least $25 a month

3 Complete the appropriate parts of the account applica

To utilize: contact your financial representative or Investor Services, or con

tion, carefully following the instructions. If you have

questions, please contact your financial representative

sult the SAI (see the back cover of this prospectus).

or call

· because of shareholder death

or disability

Reinstatement privilege If you sell shares of a John

Investor Services at 1-800-225-529L.

4 Complete the appropriate parts of the account privileges

Hancock fund, you may invest some or all of the proceeds

in the same share class of any John Hancock fund

within 120 days without a sales charge. If you paid a

CDSC when you sold your shares, you wil be credited

section of the application. By applying for privileges

now, you can avoid the delay and inconvenience of

having to fie an additional application if you want to

with the amount of the CDSC. All accounts involved

must have the Same registration.

5 Make your initial investment using the table on the

next page. You can initiate any purchase, exchange or

sale of shares through your financial representative.

To utilize: contact your financial representative or Investor Services.

add privileges later.

YOUR ACCOUNT 19

uying shares

Opening an account

Adding to an account

. Make out a check for the investment amount payable

to "John Hancock Investor Services Corporation."

~.J to "John Hancock Investor Services Corporation."

8f · Make out

a check

for the

investment

payable

· Deliver

the check

and your

completedamount,

application

· Fill out the detachable investment slip from an account

your financial representative, or mail them to Investor

statement. If no slip is available, include a note specifying

Services (address on next page).

the fund name, your share class, your account number,

and the name(s) in which the account is registered.

· Deliver the check and your investment slip or note to

your financial representative, or mail them to Investor

Services (address on next page).

Call your financial, representative or Investor Services to

request an exchange.

· Call Investor Services to request an exchange.

~.. Deliver your completed application to your financial repre

· Instruct your bank to wire the amount of your

investment to: ,

~ sentative, or mail it to Investor Services.

· Obtain your account number by calling your financial

representative or Investor Services.

· Instruct your bank to wire the amount of your

investment to:

First Signature Bank & Trust

Account # 900000260

Routing # 211475000

Specify the fund name, your choice of share class, the new

account number and the name(s) in which the account is

First Signature Bank & Trust

Account # 900000260

Routing # 211475000

Specify the fund name, your share class, your account

number and the name(s) in which the account is regis

tered. Your bank may charge a fee to wire funds.

registered. Your bank may charge a fee to wire funds,

See "By wire" and "By exchange,"

· Verify that your bank or credit union is a member of

the Automated Clearing House (ACH) system.

· Complete the "Invest-By-Phone" and "Bank Information"

sections on your account application.

· Call Investor Services to verify that these features are in

place on your account.

· Tell the Investor Services representative the fund name,

your share class, your account number, the name(s) in

which the account is registered and the amount of

your investment.

To open or add to an account using the Monthly Automatic Accumulation Program, see "Additional investor services,"

20 YOUR ACCOUNT

ellng shares

Designed for

~. . Accounts of any type,

~ · Sales of any amount.

To sell some or all of your shares

. Write a letter of instruction or complete a stock power

indicating the fund name, your share class, your account

number, the name(s) in which the account is registered

and the dollar value or number of shares you wish to selL.

· Include all signatures and any additional documents

that may be required (see next page),

· Mail the materials to Investor Services.

· A check wil be mailed to the name(s) and address in

which the account is registered, or otherwise according

to your letter of instruction.

· For automated service 24 hours a day USing your

· Sales of up to $100,000.

touch-tone phone, call the John Hancock Funds

EASI-Line at 1-800-338-8080,

· To place your order with a representative at John Han

Investor Services between 8 A,M, and

4 P.M. on most business days.

cock Funds, call

;n~;.¡ir;!ir~;I~Ç£~~nT~;,tgK~,!1!f~njI~ltif¥:~!;i~i,t;',~~JcJ~;!~,~~lY~J~)~~~(d'j;t.i~~';T:;jc:O&;;~;,;E,;1=,;,i~0,.....; ..-'

.~ · Requests by letter to sell any amount (accounts of · Fill out the "Telephone Redemption" section of your

~ any type). new account application,

· Requests by phone to sell up to $100,000 (accounts · To verify that the telephone redemption privilege is in

with telephone redemption privileges). place on an account, or to request the forms to add it

to an existing account, call

Investor Services,

· Amounts of $1,000 or more will be wired on the next

business day, A $4 fee will be deducted from your

account. .

$1,000 may be sent by EFT or by

check. Funds from EFT transactions are generally avail

able by the second business day. Your bank may charge

· Amounts of less than

a fee for this service.

· Accounts of any type.

· Sales of any amount,

· Obtain a current prospectus for the fund into which

you are exchanging by callng your financial representa

tive or Investor Services.

· Call

Investor Services to request an exchange.

To sell shares through a systematic withdrawal plan, see' Additional investor services. .

YOUR ACCOUNT 21

ailng shares in writing In certain Órcumstances, you

will need to make your request to sell shares in writing.

You may need to include additional items with your

request, as shown in the table below. You may also need

to include a signature guarantee, which protects you

against fraudulent orders. You wil need a signature

guarantee if:

· your address of record has changed within the past

You can generally obtain a signature guarantee from the

following sources:

· a broker or securities dealer

. a federal savings, cooperative or other type of bank

· a savings and loan or other thrift institution

· a credit union

· a securities exchange or clearing agency

A notary public CANNOT provide a signature guarantee.

30 days

· you are selling more than $100,000 worth of shares

· you are requesting payment other than by a check

mailed to the address of record and payable to the

registered owner(s)

Seller Requirements for written requests

Owners of individual, joint, sole proprietorship, UGMAIUTMA

(custodial accounts for minors) or general partner accounts.

· Letter of instruction,

. On the letter, the signatures and titles of all persons authorized

to sign for the account, exactly as the account is registered.

· Signature guarantee if applicable (see above).

Owners or trustees of trust accounts.

· Letter of instruction.

· On the letter, the signature(s) of the trustee(s).

· If the names of all trustees are not registered on the account.

please also provide a copy of the trust document certified

within the past 60 days.

· Signature guarantee if applicable (see above).

Executors of shareholder estates,

· Letter of instruction signed by executor.

· Copy of order appointing executor.

· Signature guarantee if applicable (see above).

f.:.:,.:.:.",.~.~,rm,.;.i~l,'..~.'.~~ty~pi~.~.d~~.~,~,~....~,.:,.;..-,...~,a,;,se.št,-..,;',.,'.:~_'~.~,'.~.~_~,..~,:.-,~.b.',.~.,.~..~.ò.'.;.~,.,'.:;,~.','.'.'.'.-.~., ,;.~..-..,'...~.',:~".,'.; .:L,_...'....'..~~_~-,.~,.";n~=~)~=:.." ':,~i¡l~lr~l~~~~¡¡Jit~J¡~~~;i~t~AS:::,.::',.:,:.'

. "___.. ._ .". .... .." . _=~.."-,. ... . ;:::""-~~;';:h,;-,:;..:~~-_-:;:--.:,:.-....~,:-..'.:h;-'.¡:.::;.,._-.:.;,:..:...:_.,.;..;~--~.-..--,,;-..i..~~;-.'~~.::.. U:-"r .

;;¡'"c L'Ä; :"''i:..:.~'Ù''" _'~,=.~:;.:. '':~e.;;~~'''-'' ;".~~~¡r#~~6-;:~=:'.~~,;,,=~~:,::;=::-::';:;-:..~.';~~::';'~:~i:;;~~~7'i.-~~~;;:~;;r:;.-~:'~':~ ._...._,. "0".-. 7'

22 YOUR ACCOUNT

To protect the interests of other investors in the fund, a

iRANSACTION PC)L1CIES

any parties

fund may cancel the exchange privileges of

Valuation of shares The net asset value per share (NAY)

for each fund and class is determined each business day

at the close of regular trading on the New York Stock

Exchange (typically 4 P.M. Eastern TIme) by dividing a

class's net assets by the number of its shares outstanding.

that, in the opinion of the fund, are using market timing

strategies or making more than seven exchanges per

owner or controlling party per calendar year. A fund

may change or cancel its exchange privilege at any

time, upon 60 days' notice to its shareholders. A fund

may also refuse any exchange order.

Buy and sell prices When you buy shares, you pay

the NAY plus any applicable sales charges, as described

earlier. When you sell shares, you receive the NAY

minus any applicable deferred sales charges.

Execution of requests Each fund is open on those days

when the New York Stock Exchange is open, typically

Monday - Friday. Buy and sell requests are executed at

the next NAY to be calculated after your request is

accepted by Investor Services.

At times of peak activity, it may be difficult to place

requests by phone. During these times, consider using

EASI-Line or sending your request in writing.

In unusual circumstances, any fund may temporarily

suspend the processing of sell requests, or may postpone

payment of proceeds for up to three business days or

Certificated shares Most shares are electronically

recorded. If you wish to have certificates for your

shares, please write to Investor Services. Certificated

shares can only be sold by returning the certificates to

Investor Services, along with a letter of instruction or a

stock power and a signature guarantee.

Sales in advance of purchase payments When you

place a request to sell shares for which the purchase

money has not yet been collected, the request will be

executed in a timely fashion, but the fund will not release

the proceeds to you until your purchase payment clears.

This may take up to ten calendar days after the purchase.

Eligibilty by state You may only invest in, or exchange

into, fund shares legally available in your state.

longer, as allowed by federal securities laws.

Telephone transactions For your protection, telephone

requests may be recorded in order to verify their accuracy.

In addition, Investor Services will take measures to

verify the identity of the caller, such as asking for name,

account number, Social Security or taxpayer ID number

and other relevant information. If these measures are

not taken, Investor Services is responsible for any losses

that may occur to any account due to an unauthorized

telephone calL. Also for your protection, telephone

transactions are not permitted

on accounts whose

names or addresses have changed within the past 30

DIVIDENDS AND ACCOUNT POLICIES

Account statements In general, you wil receive

account statements as follows:

· After every transaction (except a dividend reinvest

ment) that affects your account balance.

· After any changes of name or address of the regis

tered owner(s).

· In all other circumstances, every quarter.

Every year you should also receive, if applicable, a Form

1099 tax information statement, m'ailed by January 31.

days. Proceeds from telephone transactions can only

be mailed to the address of record.

Dividends The funds generally

distribute most or all of

their net earnings in the form of dividends. Any capital

Exchanges You may exchange shares of one John

gains are distributed annually. Most of the funds do not

Hancock fund for shares of the same class of any other,

generally without paying any additional sales charges.

Class B shares will continue to age from the original

date and wil retain the same CDSC rate as they had

before the exchange, except that the rate wil change to

that of the new fund if the new fund's rate is higher.

A CDSC rate that has increased will drop again with a

future exchange into a fund with a lower rate.

typically pay income dividends, with the exception of

Disciplined Growth Fund and Regional Bank Fund,

which typically pay ir:come dividends semi-annually

and quarterly, respectively.

YOUR ACCOUNT 23

ividend reinvestments Most investòrs have their div

idends reinvested in' additional shares of the same fund

and class. If you choose this option, or if you do not

indicate any choice, your dividends wil be reinvested

on the dividend record date. Alternatively, you can

choose to have a check for your dividends mailed to you.

However, if the check is not deliverable, your dividends

wil be reinvested.

Taxabilty of dividends As long as a fund meets the

requirements for being a tax-qualified regulated invest

ment company, which each fund has in the past and

intends to in the future, it pays no federal income tax

on the earnings it distributes to shareholders.

ADDITIONAL INVESTOR SERVICES

Monthly Automatic Accumulation Program (MAAP)

MAAP lets you set up regular investments from your

paycheck or bank account to the John Hancock fund(s)

of your choice. You determine the frequency and amount

of your investments, and you can terminate your program

at any time. To establish:

. Complete the appropriate parts of your Account

Application.

· If you are using MAAP to open an account, make

out a check ($25 minimum) for your first investment

amount payable to "John Hancock Investor Services

Corporation." Deliver your check and application to

your financial representative or Investor Services.

Consequently, dividends you receive from a fund,

whether reinvested or taken as cash, are generally

considered taxable. Dividends from a fund's long-term

capital gains are taxable as capital gains; dividends from

other sources are generally taxable as ordinary income.

Some dividends paid in January may be taxable as if they

had been paid the previous December. Corporations may

be entitled to take a dividends-received deduction for a

Dortion of certåin dividends they receive.

The Form 1099 that is mailed to you every January

details your dividends and their federal tax category,

although you should verify your tax liability with your

tax professionaL.

Systematic withdrawal plan This plan may be used for

routine bil payment or periodic withdrawals from your

account. To establish:

· Make sure you have at least $5,000 worth of shares in

your account.

· Make sure you are not planning to invest more

money in this account (buying shares during a period

when you are also selling shares of the same fund is

not advantageous to you, because of sales charges).

· Specify the payee(s). The payee may be yourself or

any other party, and there is no limit to the number

of payees you may have, as long as they are all on the

same payment schedule.

· Determine the schedule: monthly, quarterly, semi

Taxability of transactions Any time you sell or

exchange shares, it is considered a taxable event for you.

Depending on the purchase price and the sale price of

the shares you sell or exchange, you may have a gain or

a loss on the transaction. You are responsible for any tax

liabilities generated by your transactions.

Small accounts (non-retirement only) If you draw down

a non-retirement account so that its total value is less

than $1,000, you

may be asked to purchase more shares

within 30 days. If you do not take action, your fund may

close out your account and mail you. the proce~ds.

Alternatively, Investor Services may charge you $10 a

year to maintain your account~ You wil not be charged

a CDSC if your account is closed for this reason, and

your account wil not be closed if its drop in value is

due to fund performance or the effects of sales charges.

24 YOUR ACCOUNT

annually, annually or in certain selected months.

· Fill out the relevant part of the account application.

To add a systematic withdrawal plan to an existing

account, contact your financial representative or

Investor Services.

Retirement plans John Hancock Funds offers a range

of qualified retirement plans, including IRAs, SEPs,

SARSEPs, 401(k) plans, 403(b) plans (including TSAs)

anæ other pension and profit-sharing plans. Using these

plans, you can invest in any John Hancock fund with a

low minimum investment of $250 or, for some group

plans, no minimum investment at all. To find out more,

call Investor Services at 1-800-225-5291.

Fund details

At a mutual fund's inception, the initial shareholder

(typically the adviser) appoints the fund's board. There

after, the board and the shareholders determine the

USINESS STRUCTURE

Each John Hancock

growth fund is an open-end management investment

company or a series of such a company.

How the funds are organized

board's membership. The boards of the John Hancock

growth funds may include individuals who are affiliated

Each fund is supervised by a board of trustees or a board

of directors, an independent body which has ultimate

with the investment adviser. However, the majority of

board members must be independent.

responsibility for the fund's activities. The board retains

various companies to carry out the fund's operations,

including the investment adviser, custodian, transfer

agent and others (see diagram). The board has the right,

and the obligation, to terminate the fund's relationship

with any of these companies and to retain a different

company if the board believes that it is in the share

The funds do not hold annual shareholder meetings,

but may hold special meetings for such purposes as

electing or removing board members, changing funda

mental policies, approving a management contract or

approving a 12b-l plan (12b-l fees are explained in

"Sales compensation").

holders' best interests. .

.i~1~~T'::)1'~G..t,~~~~::';~:~;"~t,;:_.:~~:.. .

Shareholders

Financial services firms and

Distribution and

shareholder services

their representatives

5L"..~.,".:,#..~..~c:.,:'~;,¡;~

Advise current and prospecive share-

holders on their fund investments, often

in the context of an overall financial plan.

Principal distributor

Transfer agent

John Hancock Funds, Inc.

John Hancock Investor Services Corporation

1 01 Huntington Avenue

P.O. Box 9116

Boston, MA 02205-9116

Boston, MA 02199-7603

Markets the funds and distributes shares

through sellng brokers, financial planners

and other financial representatives.

Handles shareholder services, including recordkeeping and statements, distribution of dividends,

and processing of buy and sell requests.

~:r:.o~'~~~:i~',:t..~_ _~".-" '~,.~;

:-~,=-"..~-,..:.:::'''~-''''';''

Custodian

Subadviser

Investment adviser

DFS Advisors LLC

John Hancock Advisers, Inc.

24 Federal Street

101 Huntington Avenue

Asset

Boston, MA 02110

management

75 State Street

Investors Bank & Trust Co.

Boston, MA 02109

Boston, MA 02199-7603

Provides portolio management

Holds the funds' assets, settes all

Manages the funds' business and

investment activities,

portfolio trades and collects most of

seNÏces'to Special Equities Fund.

the valuation data required for

calculating each fund's NA V.

~~:~~¡wr"";~':'! ";¡-;,- 7"' ",~ ....,._.~i--.~..-2f:-:O..:~~~.::..':!~:"!~-~

Trustees/Directors

Supervise the funds' activities.

FUND DETAILS 25

,ccounting compensation The funds compensate the

adviser for performing tax and financial management

Class B unreimbursed distribution expenses(')

Unreimbursed As a % of

services. Annual compensation for 1996 will not exceed

0.02% of each fund's average net assets.

i~gQiQ~~~~~~~z¡g~lt~l~Q1§ät';¿~~~~i~~o/~. .

Fund expenses net assets

Discovery $ 552,329 1.75%

Portfolio trades In placing portfolio trades, the adviser

may use brokerage firms that market the fund's shares or

are affiliated with John Hancock Mutual Life Insurance

Company, but only when the adviser believes no other

firm offers a better combination of quality execution

(i.e., timeliness and completeness) and favorable price.

rt:11tfñ~tèiifíì~Th'~~li~!itm~Q11~'ii;t:-¿?iaf~~

Growth $ 165,787 2.01%

i~¡a~~.iiJr~~i~s~~~~_..'..'

Special Equities $ 15,131,619 5,42%

IPBl&Ãtl1J-m~~ßI~~l'E~~~.(...

Investment goals Except for Discovery Fund, Special

(1) As of the most recent fiscal year end covered by each fund's financial

Opportunities Fund and Emerging Growth Fund, each

highlights, These expenses may be carried forward indefinitely.

fund's investment goal is fundamental and may only be

Initial compensation Whenever you make an invest

changed with shareholder approvaL.

ment in a fund or funds, the financial services firm

Diversification Except for Special Opportunities Fund,

all growth funds are diversified.

receives either a reallowance from the initial sales

charge or a: commission, as described below. The firm

also receives the first year's service fee at this time.

SALES COMPENSATION

Annual compensation Beginning with

As part of their business strategies, the funds, along

with John Hancock Funds, pay compensation to financial

ervices firms that sell the funds' shares. These firms

typically pass along a portion of this compensation to

your financial representative.

Compensation payments originate from two sources:

from sales charges and from 12b-1 fees that are paid out

of the fund's assets (u12b_1" refers to the federal securi

ties regulation authorizing annual fees'ofthis type). The

12b-1 fee rates vary by fund and by share class, according

to Rule l2b-l plans adopted by the funds. The sales

charges and 12b-l fees paid by investors are detailed in

the fund-by-fund information. The portions of these

expenses that are reallowed to financial services firms

are shown on the next page.

Distribution fees may be used to pay for sales compensa

tionto financial services firms, marketing and overhead

expenses and, for Class B shares, interest expenses.

26 FUND DETAILS

the second

year after an investment is made, the financial services

firm receives an annual service fee of 0.25% of its total

eligible net assets. This fee is paid quarterly in arrears.

Firms affiiated with John Hancock, which include

Tucker Anthony, Sutro & Company and John Hancock

Distributors, may receive an additional fee of up to

0.05% a year of their total eligible net assets.

lass A investments

Maximum

Sales charge reallowance First year Maximum

paid by investors or commission service fee total compensation(')

(% of offering price) (% of offering price) (% of net investment) (% of offering price)

;;~Ji~t~ij~~l~g~£~i;:~;:~~ii;~"g¡Z~~!~~~~~~,'I!~~'t~pgt!~iIl~ii~;:f2à~~'~Y,\'.,'

$50,000 - $99,999 4.50% 3.51 % 0.25% 3.75%

~~1~QiQW-Jni.l19~~1K~1I~9,~_~A~1~_~g-~~~~~~~lr~~?¡§'l:;, '

$250,000 - $499,999 2.50% 1.86% 0.25% 2.10%

";S'ê""5'::O".'0":':0~0'0~?9"a'9--9"9'''9.,~''~jj¥~:i~#i''O'l~""--6."ö',""~,i~~5ctÍ-~-~"~¥~~'t~1"'6'':O'-a~2~';;':'~7¿,C,',,:,':":..,.',

~~~,i:~~),,~,~~,~'~-~~1l.Á~~¿i"~;"l!_~~:¡~l~~~-'" _ ::."~. -:~ ~-, -- -~ - - - -_~. :__~#,~~~~~~~~~~~~~~~~~~~;~~~g:ijÄ~~~~.~:tt~~';~cii(.~L:'~;:J~:.-~---.

Regular investments of

$1 millon or more

mi~!~Jlj~~1~:~-l~_~~Yf~~_~~¡;~J!~lêi~1,~'.r&if~;t;:Ii~:8!:~~' .

Next $1 - S5M above that 0.50% 0.25% 0.74%

tN~~H~ñ~Jml~a~~!litpl0~;rft~t~tê~~fl~fil~:øílÕij!¡jiii'l1i.~l9't~~~llr*~$;~~j!ii~ro,i~~i&li,~:,~;:;;,'.,.;::. ..

Waiver investmentsl2 0.00% 0.25% 0.25%

Class B investments

Maximum

reallowance

or commission

(% of offering price)

All

amounts ..

First year

service fee

Maximum

total compensation

(% of net investment)

(% of offering price)

.0.25%

4.00%

.1) Reallowance/commission percentages and service fee percentages are calculated from different amounts, and therefore may not equal total

compensation percentages if combined using simple addition,

(2) Refers to any investments made by municipalities, financial institutions, trusts and affinity group members that take advantage of the sales charge

waivers described earlier in this prospe~tus.

CDSC revenues collected by John Hancock Funds may be used to fund commission payments when there /s no initial sales charge.

FUND DETAILS 27

.lORE ABOUT RISK

A fund's risk profie is largely defined by the fund's

primary securities and investment practices. You may

find the most concise description of each fund's risk

profile in the fund-by-fund information.

The funds are permitted to utilize - within limits

established by the trustees - certain other securities

and investment practices that have higher risks and

opportunities associated with them. To the extent a

fund utilizes these securities or practices, its overall

performance may be affected, either positively or

negatively. On the following page are brief descriptions

of these securities and practices, along with the risks

associated with them. The funds follow certain policies

that may reduce these risks.

As with any mutual fund, there is no guarantee that the

performance of a John Hancock growth fund wil be

positive over any period of time - days, months or years.

However, stock funds as a category have historically

performed better over the long term than bond or

money market funds.

lYPES OF I NVESTMENT RISK

Correlation risk The risk that changes in the value of a

wil not match those of the asset

hedging instrument

being hedged (hedging is the use of one investment to

offset the effects of another investment). Incomplete

correlation can result in unanticipated risks.

Credit risk The risk that the issuer of a security, or the

counterparty to a contract, wil default or otherwise

become;unable to honor a financial obligation.

Currency risk The risk that fluctuations in the exchange

rates between the U.S. dollar and foreign currencies

may negatively affect an investment. Adverse changes

. in exchange rates may erode or reverse any gains

produced by foreign currency denominated investments

and may widen any losses.

Leverage risk Associated with securities or practices

(such as borrowing) that multiply small index or market

movements into large changes in value.

. Hedged When a derivative (a security

whose value is

based on another security or index) is used as a hedge

against an opposite position which the fund also holds,

any loss generated by the derivative should be sub

stantially offset by gains on the hedged investment,

and vice versa. While hedging can reduce or eliminate

losses, it can also reduce or eliminate gains.

. Speculative To the extent that a derivative is not

used as a hedge, the fund is directly exposed to the

risks of that derivative. Gains or losses from speculative

positions in a derivative may be substantially greater

than the derivative's original cost.

Liquidity risk The risk that certain securities may be

difficult or impossible to sell at the time and the price

that the seller would like. The seller may have to lower

the price, sell other securities instead, or forego an

investment opportunity, any of which could have a

negative effect on fund management or performance.

Management risk The risk that a strategy used by a

fund's management may fail to produce the intended

result. Common to all mutual funds.

Market risk The risk that the market value of a security

may move up and down, sometimes rapidly and unpre

dictably. These fluctuations may cause a security to be

worth less than the price originally paid for it, or less

than it was worth at an earlier time. Market risk may

affect a single issuer, industry, sector of the economy or

the market as a whole. Common to all stocks and bonds

and the mutual funds that invest in them.

Natural event risk The risk of losses attributable

natural disasters, crop failures and similar events.

Opportunity risk The risk of missing out on an

investment opportunity because the assets necessary to

take advantage of it are tied up in other investments.

Information risk The risk that key information about a

Political risk The risk of losses directly attibutable to

government or political actions of any sort. These

security or market is inaccurate or unavailable.

actions may range from changes in, tax or trade statutes

Interest rate risk The risk of market losses attributable

to expropriation, governmental collapse and war.

to changes in interest rates. With fixed-rate securities, a

Valuation risk The risk that a fund has valued certain

rise in interest rates typically causes a fall in values,

of its securities at a higher price than it can sell them for.

while a fall in rates typically causes a rise in values.

28 fUND DETAILS

igher-risk securities and practices

This table shows each fund's investment limitations as a percentage of portfolio assets.

In each case the principal types of risk are listed (see previous page for definitions).

Cl '::i:

~8.

10 Percent of total assets (italic type)

10 Percent of net assets (roman type)

iZ ,'. 2~

. No policy limitation on usage; fund may be using currently

iã

o Permitted, but has not typically been used

IIc.

Not permitted

Investment practices

Borrowing; reverse repurchase agreements The borrowing of money from banks

or through reverse repurchase agreements. Leverage, credit risks.

Repurchase agreements The purchase of a security that must later be sold back to

the seller at the same price plus interest. Credit risk.

Securities lending The lending of securities to financial institutions, which provide cash

or government securities as collateraL. Credit risk.

Short sales 'The selling of securities which have been borrowed on the expectation

that the market price will drop.

· Hedged, Hedged leverage, market, correlation, liquidity, opportunity risks.

· Speculative, Speculative leverage, market, liquidity risks.

Short-term trading Selling a security soon after purchase. A portfolio engaging in

short-term trading will have higher turnover and transaction expenses. Market risk.

When-issued securities and forward commitments The purchase or sale of securities :'.

. .

for delivery at a future date; market value may change before delivery, Market,

opportunity, leverage risks.~c~.;: . ,i. .; '.

, ..

Conventional securities

Non-investment-grade convertible securities Debt securities that convert into equity

securitie's at a future time. Convertibles rated below BBB/Baa are considered "junk"

bonds, Credit, market, interest rate, liquidity valuation and information risks.

Foreign equities

· Stocks issued by foreign companies. Market, currency, information, natural event,

poliical risks.

· American or European depository receipts, which are dollar-denominated securities

'.::

. .

Lis

typically issued by American or European banks and are based on ownership of

securities issued by foreign companies. Market, currency, information, natural

event, political risks,

,~:::(Ö:

Restricted and iliquid securities Securities not traded on the open market. May

-'.-_.-".'

include illquid Rule 144A securities. Liquidity market risks.

i~'.t5;,

~~t.~..":,,:

Leveraged derivative securities

:":TO

_. --"

Financial futures and options; securities and index options Contracts involving

the right or obligation to deliver or receive assets or money depending on the

performance of one or more assets or an economic index,

· Futures and related options. Interest rate, currency, market, hedged or speculative

(..

leverage, correlation. liquidity, opportunity risks,

· Options on securities and indices. Interest rate, currency, market, hedged or

speculative leverage, correlation, liquidity credit, opportunity risks.

5(1)

St')

.:1 0(1

". SIll

. -. .

Currency contracts Contracts involving the right or obligation to buy or sell a given

amount of foreign currency at a specified price and future date.

-". .'

· Hedged. Currency, hedged leverage, correlation, liquidity, opportunity risks.

· Speculative. Currency, speculative leverage, liquidity risks,

;

(1) Applies to purchased options only.

FUND DETAILS 29

For more information

Two documents are available that

offer further information on John

Hancock Growth Funds:

To request a free copy of the cur

AN N UAL/SEM I.AN NUAL

REPORT TO SHAREHOLDERS

John Hancock Investor Services

Corporation

Includes financial statements,

detailed performance information,

portfolio holdings, a statement from

portfolio management and the

P.O. Box 9116

auditor's report.

TDD: 1-800-544-6713

rent annual/semi-annual report or

SAI, please write or call:

Boston, MA 02205-91 16

Telephone: 1-800-225-5291

EASI-Line: 1-800-338-8080

STATEMENT OF ADDITIONAL

INFORMATION (SAI)

The SAI contains more detailed

information on all aspects of the

funds. The current annual!

semi-annual report is included

in the SA!.

A current SAI has been fied with

the Securities and Exchange

':ommission and is incorporated

by reference into this prospectus

(is legally a part of this prospectus).

JOHN HANCOK FUNDS

O. A Global Invetment Management Finn

101 Huntington Avenue

Boston, Massachusetts 02199-7603

(Q 1996 John Hancock Funds, Inc.

GROPN 7/96

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.