N-CSRS

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811- 2402

John Hancock Sovereign Bond Fund
(Exact name of registrant as specified in charter)

601 Congress Street, Boston, Massachusetts 02210

(Address of principal executive offices) (Zip code)

Alfred P. Ouellette
Senior Attorney and Assistant Secretary

601 Congress Street

Boston, Massachusetts 02210

(Name and address of agent for service)

Registrant's telephone number, including area code: 617-663-4324

Date of fiscal year end:	May 31
Date of reporting period:	November 30, 2006

ITEM 1. REPORT TO SHAREHOLDERS.

TABLE OF CONTENTS 

Your fund at a glance 

page 1 

Managers’ report 

page 2 

A look at performance 

page 6 

Your expenses 

page 8 

Fund’s investments 

page 1 0 

Financial statements 

page 2 5 

Notes to financial 

statements 

page 3 3 

For more information 

page 4 4 

CEO corner

To Our Shareholders,

The future has arrived at John Hancock Funds.

We have always been firm believers in the powerful role the Internet can play in providing fund information to our shareholders and prospective investors. Recently, we launched a redesigned, completely overhauled Web site that is more visually pleasing, easier to navigate and, most importantly, provides more fund information and learning tools without overwhelming the user.

Not long after we embarked on this major project, a study was released by the Investment Company Institute, the mutual fund industry’s main trade group, which found that an overwhelming majority of shareholders consider the Internet the “wave of the future” for accessing fund information.

Our new site sports fresher and faster ways to access account information. New innovations allow investors to view funds by risk level, track the performance of the John Hancock funds of their choice or sort funds by Morningstar, Inc.’s star ratings. Investors who own a John Hancock fund through a qualified retirement plan and don’t pay sales charges when making a purchase have the option of sorting by a “Load Waived” Morningstar Rating, thereby creating an apples-to-apples comparison with no-load funds that may also be available in their retirement plan.

The new site also has more educational tools and interactive modules to educate and assist investors with their financial goals, from college savings to retirement planning. A new “I want to…” feature allows investors to check performance, invest more money, update personal information or download prospectuses and forms quickly and easily.

In another of our ongoing efforts to provide our shareholders with top-notch service, we also redesigned our shareholder reports, as you may have noticed with this report. We hope the larger size, more colorful cover and redesigned presentation of the commentary and data tables will draw you in and make them easier to read.

After you’ve read your shareholder report, we encourage you to visit our new Web site — www.jhfunds.com — and take a tour. It’s easy, fast and fun and allows you to be in control of what you see and do. In short, it’s the wave of the future!

Sincerely,

Keith F. Hartstein,
President and Chief Executive Officer

This commentary reflects the CEO’s views as of November 30, 2006. They are subject to change at any time.

Your fund at a glance

The Fund seeks a high level of current income consistent with prudent investment
risk by investing at least 80% of its assets in a diversified portfolio of bonds and other
debt securities, including corporate bonds and U.S. government and agency securities.

Over the last six months

► The bond market rallied as moderating economic activity and lower inflation led
to falling interest rates.

► Corporate bonds produced the best returns, while Treasury bonds lagged.

► The Fund benefited from favorable security selection among corporate bonds and
judicious adjustments to the maturity structure of the portfolio.

Top 10 issuers
Federal National Mortgage Assn.	15.7%	JPMorgan	2.4%
Federal Home Loan Mortgage Corp.	8.0%	Goldman Sachs Group, Inc.	1.9%
U.S. Treasury	4.8%	Merrill Lynch & Co., Inc.	1.6%
Bank of America	2.8%	Citigroup Inc.	1.4%
Bear Stearns Cos., Inc. (The)	2.5%	Countrywide Home Loans, Inc.	1.3%

As a percentage of net assets on November 30, 2006.

1

Managers’ report

John Hancock
Bond Fund

The U.S. bond market enjoyed a solid rally during the six months ended November 30, 2006. The main catalyst for the bond market rally was evidence of slowing economic growth, including a downturn in the housing market, weaker consumer spending and tepid job growth. Lower inflation, largely the result of declining energy and commodity prices, also contributed favorably to bond market performance.

The moderating economic environment led the Federal Reserve to halt its program of short-term interest rate increases. After 17 rate hikes between June 2004 and June 2006, the Fed held rates steady during the last five months of the period.

As a result, interest rates, which had been rising steadily since bottoming in mid-2003, peaked in June and began a decline that lasted through the end of the six-month period, producing solid gains for bonds. Yields remained virtually equal across the maturity spectrum; as of November 30, 2006, the two-year Treasury note yield was 4.62%, while the 30-year Treasury bond yielded 4.56% .

Sector performance was fairly consistent, with every segment of the bond market posting similarly positive returns. Corporate bonds, including both investment grade and high yield, were the best

SCORECARD

INVESTMENT		PERIOD’S PERFORMANCE. . .  AND WHAT’S BEHIND THE NUMBERS
Time Warner	▲	Improvements across all operating segments, especially its cable
Entertainment		business
Nevada Power	▲	Electric utility in the fast-growing Las Vegas area gets credit-rating
		upgrade
KN Capital Trust	▼	Bond issued by Kinder Morgan, which is being taken private in a
		management-led leveraged buyout

2

Portfolio Managers, MFC Global Investment Management (U.S.), LLC
Howard C. Greene, CFA, Barry H. Evans, CFA and Jeffrey N. Given, CFA

performers. Mortgage-backed securities performed in line with the broad bond market, while Treasury and government agency bonds lagged.

“The main catalyst for the bond
  market rally was evidence of
  slowing economic growth,
  including a downturn in the
  housing market, weaker
  consumer spending and tepid
  job growth.”

Fund performance

For the six months ended November 30, 2006, John Hancock Bond Fund’s Class A, Class B, Class C, Class I and Class R shares posted total returns of 5.87%, 5.51%, 5.50%, 6.10% and 5.57%, respectively, at net asset value. The Fund’s performance was slightly behind the 6.03% return of the Lehman Government/Credit Index but ahead of the 5.46% average return of Morningstar, Inc.’s intermediate-term  bond category.¹ Keep in mind that your net asset value return will differ from the Fund’s performance if you were not invested in the Fund for the entire period and did not reinvest all distributions. See pages six and seven for historical performance information.

Maturity structure boosted results

Fund performance benefited from further adjustments we made to the maturity structure of the portfolio. We continued to shift assets into intermediate-term bonds — those maturing in seven to 10 years — while reducing our exposure to shorter- and longer-term bonds. This positioning tends to perform best when short-term bond yields adjust to levels lower than long-term bond yields. Although this divergence did not occur during the period, the strategy still added value as intermediate-term bonds enjoyed strong returns.

Bond Fund

3

We also increased the portfolio’s sensitivity to interest rates during the summer, which helped the portfolio benefit to a greater extent from the bond market rally. In the wake of the rally, however, we scaled back our interest-rate sensitivity to a more neutral level.

Sector allocation: emphasis on mortgage-backed securities

We continued to increase the portfolio’s exposure to mortgage-backed securities, which remained the largest sector weighting in the portfolio. In particular, we added substantially to our positions in commercial mortgage-backed securities during a period of increased issuance, when yields were relatively high. With high credit ratings, intermediate maturities and attractive yields, commercial mortgage-backed securities provided a way to add yield in a defensive manner. To make room for the additional mortgage-backed securities, we reduced our position in Treasury and government agency bonds.

In the corporate bond portion of the portfolio, we trimmed our investment-grade holdings, while adding selectively to our high yield position as we found attractive individual securities. We remained leery of the accelerating trend toward leveraged buy-outs and other stockholder-friendly actions that lead to higher corporate debt levels. Consequently, we maintained our focus on bonds issued by utilities, banks and other finance-related bonds. These companies are generally reluctant to take on additional leverage because they need to protect the quality of their balance sheets as an ongoing requirement of their businesses.

SECTOR DISTRIBUTION2
Government — U.S.
Agency	33%
Mortgage bonds	24%
Financials	13%
Consumer discretionary	6%
Utilities	5%
Government — U.S.	5%
Energy	3%
Industrials	2%
Materials	2%
Health care	2%
Consumer staples	1%
Telecommunication
services	1%

Security selection added value

The best individual performer in the portfolio was Provident Financing Trust 1, which is part of insurance firm UnumProvident. Although the struggling insurer has gradually improved its operating results, the main driver of its strong performance during the period was speculation about a potential buy-out of the company by a higher-rated entity.

Astoria Depositor Corporation, which also performed well during the period, represents a good example of our in-depth research capabilities. Astoria is a very small company that owns a single asset — a power plant in Queens, New York, that has contracted out its power supply to the New York grid. The

Bond Fund

4

bonds enjoyed a boost when the plant began operating in the spring, and it is now running at full capacity.

“We also increased the portfolio’s
  sensitivity to interest rates
  during the summer, which
  helped the portfolio benefit to
  a greater extent from the bond
  market rally.”

We also benefited from our positions in GMAC and Ford Motor Credit, the financing arms of the two largest U.S. automakers. The sale of 51% of GMAC to a consortium of private equity firms provided some positive momentum to the beleaguered auto sector.

On the downside, the weakest performer in the portfolio was Nova Chemicals Ltd. The commodity chemicals maker reported disappointing results amid a weaker economy, increased competitive pressures and higher raw materials prices.

QUALITY
DISTRIBUTION2
AAA	58%
AA	3%
A	8%
BBB	14%
BB	8%
B	5%
CCC	1%

Outlook

We expect the economy to continue to weaken as we move into 2007, although we do not foresee a recession. Corporate balance sheets remain strong, which should help credit quality hold up during the slowdown. We anticipate the Fed’s next move to be an interest rate cut, most likely in the first half of 2007.

Given this environment, we intend to maintain our current positioning, which should ultimately benefit from a widening of the gap between short- and long-term bond yields. We also believe that the higher yields of corporate bonds will help them continue to outperform going forward. However, individual security selection will become increasingly important.

This commentary reflects the views of the portfolio managers through the end of the Fund’s period discussed in this report. The managers’ statements reflect their own opinions. As such, they are in no way guarantees of future events and are not intended to be used as investment advice or a recommendation regarding any specific security. They are also subject to change at any time as market and other conditions warrant.

¹ Figures from Morningstar, Inc. include reinvested dividends and do not take into account sales charges. Actual load-adjusted performance is lower.

² As a percentage of net assets on November 30, 2006.

Bond Fund

5

A look at performance

For the periods ending November 30, 2006

		Average annual returns				Cumulative total returns					SEC 30-
		with maximum sales charge (POP)				with maximum sales charge (POP)					day yield
	Inception				Since					Since as	of
Class	date	1-year	5-year	10-year	inception	6 months	1-year	5-year	10-year	inception	11-30-06
A	11-9-73	1.09%	4.22%	5.39%	—	1.13%	1.09%	22.95%	69.02%	—	4.71%
B	11-23-93	0.11	4.11	5.29	—	0.51	0.11	22.30	67.44	—	4.23
C	10-1-98	4.11	4.45	—	4.43%	4.50	4.11	24.29	—	42.43%	4.23
I1	9-4-01	6.30	5.64	—	5.66	6.10	6.30	31.55	—	33.45	5.36
R1	8-5-03	4.96	—	—	4.72	5.57	4.96	—	—	16.54	4.56

Performance figures assume all distributions are reinvested. Returns with maximum sales charge reflect a sales charge on Class A shares of 4.5% and the applicable contingent deferred sales charge (CDSC) on Class B and Class C shares. The returns for Class C shares have been adjusted to reflect the elimination of the front-end sales charge effective July 15, 2004. The Class B shares’ CDSC declines annually between years 1–6 according to the following schedule: 5, 4, 3, 3, 2, 1%. No sales charge will be assessed after the sixth year. Class C shares held for less than one year are subject to a 1% CDSC. Sales charge is not applicable for Class I and Class R shares.

The returns reflect past results and should not be considered indicative of future performance. The return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, the Fund’s current performance may be higher or lower than the performance shown. For performance data current to the most recent month-end, please call 1-800-225-5291 or visit the Fund’s Web site at www.jhfunds.com.

The performance table above and the chart on the next page do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

The Fund’s performance results reflect any applicable expense reductions, without which the expenses would increase and results would have been less favorable.

¹For certain types of investors as described in the Fund’s Class I and Class R share prospectuses.

Bond Fund

6

Growth of $10,000

This chart shows what happened to a hypothetical $10,000 investment in Class A shares
for the period indicated. For comparison, we’ve shown the same investment in the
Lehman Brothers Government/Credit Bond Index.

			With maximum
Class	Period beginning	Without sales charge	sales charge	Index
B1	11-30-96	$16,744	$16,744	$18,290
C1	10-1-98	14,241	14,241	15,319
I 2	9-4-01	13,345	13,345	13,204
R 2	8-5-03	11,654	11,654	11,584

Assuming all distributions were reinvested for the period indicated, the table above shows the value of a $10,000 investment in the Fund’s Class B, Class C, Class I and Class R shares, respectively, as of November 30, 2006. The Class C shares investment with maximum sales charge has been adjusted to reflect the elimination of the front-end sales charge effective July 15, 2004. Performance of the classes will vary based on the difference in sales charges paid by shareholders investing in the different classes and the fee structure of those classes.

Lehman Brothers Government/Credit Bond Index is an unmanaged index that measures the performance of U.S. government bonds, U.S. corporate bonds and Yankee bonds.

It is not possible to invest directly in an index. Index figures do not reflect sales charges which would have resulted in lower values if they did.

¹ No contingent deferred sales charge applicable.

² For certain types of investors as described in the Fund’s Class I and Class R share prospectuses.

Bond Fund

7

Your expenses

These examples are intended to help you understand your ongoing operating expenses.

Understanding fund expenses

As a shareholder of the Fund, you incur two types of costs:

■Transaction costs which include sales charges (loads) on purchases or redemptions (varies by share class), minimum account fee charge, etc.

■Ongoing operating expenses including management fees, distribution and service fees (if applicable) and other fund expenses.

We are going to present only your ongoing operating expenses here.

Actual expenses/actual returns

This example is intended to provide information about your fund’s actual ongoing operating expenses, and is based on your fund’s actual return. It assumes an account value of $1,000.00 on June 1, 2006, with the same investment held until November 30, 2006.

	Account value	Ending value	Expenses paid during period
	on 6-1-06	on 11-30-06	ended 11-30-061
Class A	$1,000.00	$1,058.70	$5.47
Class B	1,000.00	1,055.10	9.07
Class C	1,000.00	1,055.00	9.07
Class I	1,000.00	1,061.00	3.26
Class R	1,000.00	1,055.70	8.46

Together with the value of your account, you may use this information to estimate the operating expenses that you paid over the period. Simply divide your account value at November 30, 2006 by $1,000.00, then multiply it by the “expenses paid” for your share class from the table above. For example, for an account value of $8,600.00, the operating expenses should be calculated as follows:

Bond Fund

8

Hypothetical example for comparison purposes

This table allows you to compare your fund’s ongoing operating expenses with those of any other fund. It provides an example of the Fund’s hypothetical account values and hypothetical expenses based on each class’s actual expense ratio and an assumed 5% annual return before expenses (which is not your fund’s actual return). It assumes an account value of $1,000.00 on June 1, 2006, with the same investment held until November 30, 2006. Look in any other fund shareholder report to find its hypothetical example and you will be able to compare these expenses.

	Account value	Ending value	Expenses paid during period
	on 6-1-06	on 11-30-06	ended 11-30-061
Class A	$1,000.00	$1,019.75	$5.37
Class B	1,000.00	1,016.24	8.90
Class C	1,000.00	1,016.24	8.90
Class I	1,000.00	1,021.91	3.20
Class R	1,000.00	1,016.84	8.30

Remember, these examples do not include any transaction costs, such as sales charges; therefore, these examples will not help you to determine the relative total costs of owning different funds. If transaction costs were included, your expenses would have been higher. See the prospectus for details regarding transaction costs.

¹ Expenses are equal to the Fund’s annualized expense ratio of 1.06%, 1.76%, 1.76%, 0.63% and 1.64% for Class A, Class B, Class C, Class I and Class R, respectively, multiplied by the average account value over the period, multiplied by number of days in most recent fiscal half-year/365 or 366 (to reflect the one-half year period).

Bond Fund

9

Fund’s investments

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

Securities owned by the Fund on 11-30-06 (unaudited)

This schedule is divided into five main categories: bonds, preferred stocks, tranche loans, U.S. government and agencies securities and short-term investments. Bonds, preferred stocks, tranche loans and U.S. government and agencies securities are further broken down by industry group. Short-term investments, which represent the Fund’s cash position, are listed last.

	Interest	Maturity	Credit	Par value
Issuer, description	rate	date	rating (A)	(000)	Value
Bonds 59.10%					$591,353,824
(Cost $578,534,465)
Airlines 0.34%					3,444,240
Continental Airlines, Inc.,
Pass Thru Ctf Ser 1999-1A (L)	6.545%	02-02-19	A–	$976	1,000,073
Pass Thru Ctf Ser 2000-2 Class B	8.307	04-02-18	BB–	1,284	1,297,190
Pass Thru Ctf Ser 2001-1 Class C	7.033	06-15-11	BB–	1,151	1,146,977
Asset Management & Custody Banks 0.47%					4,711,097
Rabobank Capital Fund II,
Perpetual Bond (5.260% to
12-31-13 then variable) (L)(S)	5.260	12-29-49	AA	4,755	4,711,097
Broadcasting & Cable TV 1.01%					10,054,262
Comcast Corp.,
Gtd Note	5.900	03-15-16	BBB+	1,860	1,894,377
Cox Communications, Inc.,
Note (S)	5.875	12-01-16	BBB–	1,875	1,882,712
Shaw Communications, Inc.,
Sr Note (Canada)	8.250	04-11-10	BB+	1,790	1,895,162
TCI Communications, Inc.,
Deb	9.800	02-01-12	BBB	1,690	2,015,911
XM Satellite Radio, Inc.,
Sr Note (L)	9.750	05-01-14	CCC	2,390	2,366,100
Casinos & Gaming 1.64%					16,360,943
Caesars Entertainment, Inc.,
Sr Note (L)	7.000	04-15-13	BBB–	1,305	1,348,172
Chukchansi Economic Development
Authority,
Sr Note (S)	8.000	11-15-13	BB–	570	588,525
Jacobs Entertainment, Inc.,
Gtd Sr Note	9.750	06-15-14	B–	1,970	1,970,000
Little Traverse Bay Bands of
Odawa Indians,
Sr Note (S)	10.250	02-15-14	B	1,895	1,904,475
Mashantucket West Pequot,
Bond (S)	5.912	09-01-21	BBB–	1,250	1,221,687
Mohegan Tribal Gaming Authority,
Sr Sub Note (L)	7.125	08-15-14	B+	1,050	1,057,875

See notes to financial statements

Bond Fund

10

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

	Interest	Maturity	Credit	Par value
Issuer, description	rate	date	rating (A)	(000)	Value
Casinos & Gaming (continued)
MTR Gaming Group, Inc.,
Gtd Sr Note Ser B	9.750%	04-01-10	B+	$1,595	$1,678,738
Sr Sub Note (S)	9.000	06-01-12	B–	420	428,400
Pokagon Gaming Authority,
Sr Note (S)	10.375	06-15-14	B	690	748,650
Seminole Tribe of Florida,
Bond (S)	6.535	10-01-20	BBB–	2,460	2,449,348
Turning Stone Casino Resort
Enterprise,
Sr Note (S)	9.125	09-15-14	B+	2,085	2,131,913
Waterford Gaming LLC,
Sr Note (S)	8.625	09-15-12	BB–	786	833,160
Commodity Chemicals 0.24%					2,366,400
Lyondell Chemical Co.,
Gtd Sr Sub Note	10.875	05-01-09	B	2,320	2,366,400
Construction & Engineering 0.13%					1,324,751
Owens Corning, Inc.,
Sr Note (S)	6.500	12-01-16	BBB–	1,285	1,324,751
Consumer Finance 1.24%					12,358,549
American General Finance Corp.,
Med Term Note Ser I	4.875	07-15-12	A+	2,950	2,897,546
GMAC LLC
Note (L)	6.750	12-01-14	BB	2,175	2,230,295
Household Finance Corp.,
Note	6.375	10-15-11	A	1,725	1,819,765
HSBC Finance Capital Trust IX,
Note (5.911% to 11-30-15 then
variable)	5.911	11-30-35	BBB+	2,000	2,034,958
HSBC Finance Corp.,
Sr Note	6.750	05-15-11	A	3,165	3,375,985
Department Stores 0.20%					1,997,559
J.C. Penney Corp., Inc.,
Deb	8.125	04-01-27	BBB–	1,935	1,997,559
Diversified Banks 1.85%					18,492,629
Banco Mercantil del Norte SA,
Sub Note (Mexico) (S)	6.862	10-13-21	Baa2	1,605	1,653,463
Bank of New York,
Cap Security (S)	7.780	12-01-26	A–	4,100	4,263,582
Chuo Mitsui Trust & Banking
Co., Ltd.,
Perpetual Sub Note (5.506% to
04-15-15 then variable)
(Japan) (S)	5.506	12-15-49	Baa2	2,530	2,455,254
HBOS Plc,
Perpetual Bond (6.413% to 10-1-35
then variable) (United Kingdom) (S)	6.413	09-29-49	A	2,910	2,968,669

See notes to financial statements

Bond Fund

11

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

	Interest	Maturity	Credit	Par value
Issuer, description	rate	date	rating (A)	(000)	Value
Diversified Banks (continued)
Lloyds TSB Group Plc,
Bond (6.267% to 11-30-16 then
variable) (United Kingdom) (S)	6.267%	11-14-16	A	$2,800	$2,838,623
Royal Bank of Scotland Group Plc,
Perpetual Bond (7.648% to
09-30-31 then variable)
(United Kingdom)	7.648	08-29-49	A	3,570	4,313,038
Diversified Chemicals 0.22%					2,242,625
Mosaic Co., (The),
Sr Note	7.375	12-01-14	BB–	1,100	1,117,875
Sr Note	7.625	12-01-16	BB–	1,100	1,124,750
Diversified Commercial Services 0.20%					1,993,305
Crane Co.,
Bond	6.550	11-15-36	BBB	1,970	1,993,305
Diversified Financial Services 3.48%					34,792,187
American Express Co.,
Note	6.800	09-01-66	A3	2,125	2,291,018
Capital One Capital III,
Gtd Jr Sub Note	7.686	08-15-36	BBB–	3,320	3,853,823
CIT Group, Inc.,
Note	5.850	09-15-16	A	4,735	4,870,629
Ford Motor Credit Co.,
Sr Note (S)	9.750	09-15-10	B	3,237	3,436,684
Sr Note	9.875	08-10-11	B+	1,135	1,214,287
JP Morgan Chase Capital XX,
Jr Sub Note Ser T	6.550	09-29-36	A–	2,880	3,039,880
Nelnet, Inc.,
Note (7.400% to 09-01-11 then
variable)	7.400	09-29-36	BBB–	2,595	2,652,303
Nissan Motor Acceptance Corp.,
Sr Note (S)	5.625	03-14-11	BBB+	2,625	2,650,741
Siemens Financierings NV,
Note (Netherlands) (L)(S)	6.125	08-17-26	AA–	3,715	3,931,391
St. George Funding Co.,
Perpetual Bond (8.485% to
06-30-17 then variable)
(Australia) (S)	8.485	12-31-49	Baa1	4,555	4,792,051
Sun Trust Banks, Inc.,
Bond (6.100% to 12-15-36 then
variable) (N)	6.100	12-01-66	A–	2,040	2,059,380
Diversified Metals & Mining 0.51%					5,101,444
Freeport-McMoRan Copper &
Gold, Inc.,
Sr Note	10.125	02-01-10	B+	2,000	2,110,000
Vale Overseas Ltd.,
Bond (Cayman Islands)	6.875	11-21-36	BBB	1,785	1,827,181
Vedanta Resources Plc,
Sr Note (United Kingdom) (S)	6.625	02-22-10	BB	1,185	1,164,263

See notes to financial statements

Bond Fund

12

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

	Interest	Maturity	Credit	Par value
Issuer, description	rate	date	rating (A)	(000)	Value
Electric Utilities 4.49%					$44,957,662
Abu Dhabi National Energy Co.,
Bond (United Arab Emirates) (S)	6.500%	10-27-36	A+	$3,585	3,805,961
AES Eastern Energy LP,
Pass Thru Ctf Ser 1999-A	9.000	01-02-17	BB+	3,617	4,051,552
Beaver Valley Funding Corp.,
Sec Lease Obligation Bond	9.000	06-01-17	BBB–	3,919	4,452,415
BVPS II Funding Corp.,
Collateralized Lease Bond	8.890	06-01-17	BB+	4,047	4,683,431
Dominion Resources, Inc.,
Jr Sub Note (6.300% to 09-30-11
then variable)	6.300	09-30-66	BB+	2,325	2,364,153
East Coast Power LLC,
Sr Sec Note Ser B	7.066	03-31-12	BBB–	3,062	3,181,383
FPL Group Capital, Inc.,
Jr Sec Sub Note (6.350% to
10-01-16 then variable)	6.350	10-01-66	BBB+	2,070	2,136,919
HQI Transelect Chile SA,
Sr Note (Chile)	7.875	04-15-11	A–	2,655	2,840,000
Indiantown Cogeneration LP,
1st Mtg Note Ser A-9	9.260	12-15-10	BB+	1,357	1,428,493
IPALCO Enterprises, Inc.,
Sr Sec Note	8.625	11-14-11	BB–	2,025	2,197,125
Monterrey Power SA de CV,
Sr Sec Bond (Mexico) (S)	9.625	11-15-09	BBB	2,445	2,671,474
PNPP II Funding Corp.,
Deb	9.120	05-30-16	BB+	208	237,434
System Energy Resources, Inc.,
Sec Bond (S)	5.129	01-15-14	BBB	3,117	3,061,725
TransAlta Corp.,
Note (Canada)	5.750	12-15-13	BBB–	2,640	2,668,800
Waterford 3 Funding Corp.,
Sec Lease Obligation Bond	8.090	01-02-17	BBB–	4,974	5,176,797
Electrical Components & Equipment 0.33%					3,339,197
AMETEK, Inc.,
Sr Note	7.200	07-15-08	BBB	2,425	2,476,097
NXP BV/NXP Funding LLC,
Sr Sec Bond (Netherlands) (S)	7.875	10-15-14	BB+	840	863,100
Gas Utilities 0.31%					3,133,132
KN Capital Trust I,
Cap Security	8.560	04-15-27	BB+	940	953,375
Southern Union Co.,
Jr Sub Note (7.200% to 11-01-11
then variable)	7.200	11-01-66	BB	2,165	2,179,757
Health Care Facilities 0.19%					1,904,531
Manor Care, Inc.,
Gtd Note	6.250	05-01-13	BBB	1,870	1,904,531

See notes to financial statements

Bond Fund

13

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

	Interest	Maturity	Credit	Par value
Issuer, description	rate	date	rating (A)	(000)	Value
Health Care Services 0.35%					$3,493,642
Alliance Imaging, Inc.,
Sr Sub Note (L)	7.250%	12-15-12	B–	$1,820	1,692,600
Nationwide Health Properties, Inc.,
Note	6.500	07-15-11	BBB–	1,745	1,801,042
Hotels, Resorts & Cruise Lines 0.16%					1,583,064
Hyatt Equities LLC,
Note (S)	6.875	06-15-07	BBB	1,575	1,583,064
Industrial Conglomerates 0.53%					5,337,213
General Electric Co.,
Note	5.000	02-01-13	AAA	5,340	5,337,213
Industrial Machinery 0.49%					4,885,877
Kennametal, Inc.,
Sr Note	7.200	06-15-12	BBB	2,415	2,574,801
Trinity Industries, Inc.,
Pass Thru Ctf (S)	7.755	02-15-09	Ba1	2,266	2,311,076
Integrated Oil & Gas 0.22%					2,239,745
Pemex Project Funding Master Trust,
Gtd Note	9.125	10-13-10	BBB	1,990	2,239,745
Integrated Telecommunication Services 0.36%					3,578,452
Intelsat Subsidiary Holding Co., Ltd.,
Gtd Floating Rate Sr Note
(Bermuda) (P)	10.484	01-15-12	B+	1,000	1,012,500
Sprint Capital Corp.,
Gtd Sr Note	6.875	11-15-28	BBB+	2,465	2,565,952
Investment Banking & Brokerage 1.29%					12,907,953
Bear Stearns Cos., Inc. (The),
Sub Note	5.550	01-22-17	A	1,825	1,842,719
Goldman Sachs Group, Inc. (The),
Sr Note	5.750	10-01-16	AA–	1,725	1,777,600
Sub Note	6.450	05-01-36	A+	2,745	2,944,674
Merrill Lynch & Co., Inc.,
Sub Note	6.050	05-16-16	A	2,500	2,625,610
Mizuho Finance,
Gtd Sub Bond (Cayman Islands)	8.375	12-29-49	A2	3,500	3,717,350
Leisure Facilities 0.48%					4,762,363
AMC Entertainment, Inc.,
Gtd Sr Note	9.624	08-15-10	Ba3	1,440	1,486,800
Sr Sub Note (L)	9.500	02-01-11	CCC+	1,450	1,453,625
TDS Investor Corp.,
Sr Note (S)	9.875	09-01-14	B–	1,845	1,821,938
Life & Health Insurance 0.61%					6,101,454
AmerUs Group Co.,
Sr Note	6.583	05-16-11	Baa3	1,870	1,952,598
Phoenix Cos., Inc. (The),
Bond	6.675	02-16-08	BBB	2,205	2,214,091
Provident Financing Trust I,
Gtd Cap Security (L)	7.405	03-15-38	B+	1,855	1,934,765

See notes to financial statements

Bond Fund

14

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

	Interest	Maturity	Credit	Par value
Issuer, description	rate	date	rating (A)	(000)	Value
Marine 0.27%					$2,699,325
CMA CGM SA,
Sr Note (France) (S)	7.250%	02-01-13	BB+	$2,790	2,699,325
Meat, Poultry & Fish 0.28%					2,848,000
ASG Consolidated LLC,
Sr Disc Note, (Zero to 11-01-08
then 11.500%) (L)(O)	Zero	11-01-11	B–	3,200	2,848,000
Metal & Glass Containers 0.20%					1,990,250
BWAY Corp.,
Gtd Sr Sub Note	10.000	10-15-10	B–	1,900	1,990,250
Movies & Entertainment 0.32%					3,161,959
Cinemark, Inc.,
Sr Disc Note	9.750	03-15-14	CCC+	920	754,400
Time Warner, Inc.,
Gtd Deb	6.500	11-15-36	BBB+	1,370	1,398,986
Note	5.875	11-15-16	BBB+	1,000	1,008,573
Multi-Line Insurance 1.42%					14,183,444
Genworth Financial, Inc.,
Jr Sub Note (6.150% to 11-15-16
then variable)	6.150	11-15-66	BBB+	1,640	1,667,975
Horace Mann Educators Corp.,
Sr Note	6.850	04-15-16	BBB	1,550	1,619,465
Liberty Mutual Group,
Bond (S)	7.500	08-15-36	BBB	3,235	3,653,085
Partnerre Finance,
Gtd Note (6.440% to 12-1-16 then
variable)	6.440	12-01-66	BBB+	2,045	2,078,080
Zurich Capital Trust I,
Gtd Cap Security (S)	8.376	06-01-37	A–	4,920	5,164,839
Multi-Media 0.55%					5,537,550
News America Holdings, Inc.,
Gtd Sr Deb	8.250	08-10-18	BBB–	2,625	3,145,162
Time Warner Entertainment Co., LP,
Sr Deb	8.375	03-15-23	BBB+	1,990	2,392,388
Multi-Utilities 0.60%					5,977,621
Dynegy-Roseton Danskamme,
Gtd Pass Thru Ctf Ser B	7.670	11-08-16	B	2,390	2,413,900
Salton Sea Funding Corp.,
Gtd Sr Sec Note Ser E	8.300	05-30-11	BB+	1,006	1,069,646
Sr Sec Bond Ser F	7.475	11-30-18	BB+	2,333	2,494,075
Office Services & Supplies 0.27%					2,732,887
Xerox Corp.,
Sr Note (L)	6.750	02-01-17	BB+	2,570	2,732,887
Oil & Gas Drilling 0.13%					1,337,148
Delek & Avner-Yam Tethys Ltd.,
Sr Sec Note (Israel) (S)	5.326	08-01-13	BBB–	1,368	1,337,148

See notes to financial statements

Bond Fund

15

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

	Interest	Maturity	Credit	Par value
Issuer, description	rate	date	rating (A)	(000)	Value
Oil & Gas Exploration & Production 0.15%					$1,545,416
Kerr-McGee Corp.,
Gtd Sec Note	6.950%	07-01-24	BBB–	$1,405	1,545,416
Oil & Gas Refining & Marketing 0.81%					8,109,467
Enterprise Products Operating LP,
Gtd Sr Note Ser B	6.375	02-01-13	BB+	4,265	4,440,680
Premcor Refining Group, Inc., (The),
Sr Note	9.500	02-01-13	BBB–	1,175	1,274,051
Gtd Sr Note	6.750	05-01-14	BBB	2,325	2,394,736
Oil & Gas Storage & Transportation 1.07%					10,688,472
Energy Transfer Partners LP,
Gtd Sr Note (L)	5.950	02-01-15	Baa3	2,790	2,851,160
Sr Note	6.625	10-15-36	Baa3	1,440	1,526,747
Magellan Midstream Partners LP,
Note	6.450	06-01-14	BBB	2,060	2,153,093
Markwest Energy Partners LP,
Sr Note (S)	8.500	07-15-16	B	2,090	2,110,900
ONEOK Partners LP,
Note	6.650	10-01-36	BBB	1,940	2,046,572
Packaged Foods & Meats 0.11%					1,146,068
General Foods Corp.,
Deb	7.000	06-15-11	A–	1,145	1,146,068
Paper Packaging 0.33%					3,342,749
MDP Acquisitions Plc,
Sr Note (Ireland)	9.625	10-01-12	B–	1,825	1,929,937
Stone Container Corp.,
Sr Note	9.750	02-01-11	CCC+	1,370	1,412,812
Paper Products 0.41%					4,062,063
Plum Creek Timber Co., Inc.,
Gtd Note	5.875	11-15-15	BBB–	1,910	1,909,263
Verso Paper Holdings LLC,
Sr Sec Note (S)	9.125	08-01-14	B+	2,070	2,152,800
Property & Casualty Insurance 0.25%					2,525,650
Ohio Casualty Corp.,
Sr Note	7.300	06-15-14	BBB–	2,330	2,525,650
Real Estate Management & Development 0.68%					6,839,524
Health Care REIT, Inc.,
Sr Note	6.200	06-01-16	BBB–	1,525	1,559,517
Healthcare Realty Trust, Inc.,
Sr Note	8.125	05-01-11	BBB–	2,215	2,431,173
Shimao Property Holdings Ltd.,
Gtd Sr Note (Cayman Islands) (S)	8.000	12-01-16	BB+	1,675	1,687,563
Socgen Real Estate Co., LLC,
Perpetual Bond Ser A (7.640% to
09-30-07 then variable) (S)	7.640	12-29-49	A	1,140	1,161,271

See notes to financial statements

Bond Fund

16

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

	Interest	Maturity	Credit	Par value
Issuer, description	rate	date	rating (A)	(000)	Value
Regional Banks 1.23%					$12,328,406
BankAmerica Institutional Bank,
Gtd Cap Security Ser B (S)	7.700%	12-31-26	A	$985	1,022,790
Mainstreet Capital Trust I,
Gtd Jr Sub Cap Security Ser B (G)	8.900	12-01-27	A3	2,380	2,537,939
NB Capital Trust IV,
Gtd Cap Security	8.250	04-15-27	A	3,030	3,168,186
State Street Institutional
Capital Trust,
Gtd Cap Security Ser A (S)	7.940	12-30-26	A	1,180	1,227,949
Wachovia Capital Trust II,
Gtd Floating Rate Cap
Security (P)	5.874	01-15-27	A–	2,420	2,320,432
Wells Fargo Capital X,
Gtd Sub Note	5.950	12-15-36	A+	2,040	2,051,110
Soft Drinks 0.14%					1,390,250
Panamerican Beverages, Inc.,
Sr Note (Panama)	7.250	07-01-09	BBB	1,340	1,390,250
Specialized Consumer Services 0.21%					2,104,620
Sovereign Capital Trust VI,
Gtd Note	7.908	06-13-36	BB+	1,840	2,104,620
Specialized Finance 1.58%					15,805,089
Astoria Depositor Corp.,
Pass Thru Ctf Ser B (G)(S)	8.144	05-01-21	BB	3,640	4,063,842
Bosphorous Financial Services,
Sec Floating Rate Note (P)(S)	7.174	02-15-12	Baa2	2,660	2,696,583
Drummond Co., Inc.,
Sr Note (L)(S)	7.375	02-15-16	BB–	1,330	1,276,800
ESI Tractebel Acquistion Corp.,
Gtd Sec Bond Ser B	7.990	12-30-11	BB	3,700	3,825,952
HRP Myrtle Beach Operations LLC,
Sr Sec Note (10.120% to 04-01-09
then variable) (S)	10.120	04-01-12	B	1,075	1,072,312
UCAR Finance, Inc.,
Gtd Sr Note (L)	10.250	02-15-12	B–	2,720	2,869,600
Specialized REIT’s 0.07%					660,563
Idearc, Inc.,
Sr Note (S)	8.000	11-15-16	B+	650	660,563
Specialty Chemicals 0.16%					1,576,350
Nova Chemicals Ltd.,
Note (Canada)	7.875	09-15-25	BB+	1,695	1,576,350
Steel 0.60%					6,011,295
Metallurg Holdings, Inc.,
Sr Sec Note (G)(S)	10.500	10-01-10	B–	2,460	2,496,900
Reliance Steel & Aluminum Co.,
Gtd Note (S)	6.850	11-15-36	BBB–	2,220	2,245,457
WCI Steel Acquisition, Inc.,
Sr Sec Note (G)	8.000	05-01-16	B+	1,285	1,268,938

See notes to financial statements

Bond Fund

17

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

	Interest	Maturity	Credit	Par value
Issuer, description	rate	date	rating (A)	(000)	Value
Thrifts & Mortgage Finance 24.14%					$241,539,210
Banc of America Commercial
Mortgage, Inc.,
Mtg Pass Thru Ctf Ser 2005-4
Class A5A	4.933%	07-10-45	AAA	$1,595	1,573,966
Mtg Pass Thru Ctf Ser 2005-6
Class A4 (P)	5.354	09-10-47	AAA	3,490	3,519,850
Mtg Pass Thru Ctf Ser 2006-2
Class A3 (P)	5.902	05-10-45	AAA	9,335	9,685,366
Mtg Pass Thru Ctf Ser 2006-3
Class A4	5.889	07-10-44	AAA	5,260	5,550,581
Mtg Pass Thru Ctf Ser 2006-5
Class A4	5.414	09-10-47	AAA	5,890	6,010,932
Banc of America Funding Corp.,
Mtg Pass Thru Ctf Ser 2006-B
Class 6A1 (P)	5.889	03-20-36	AAA	4,116	4,163,925
Mtg Pass Thru Ctf Ser 2006-D
Class 6B1 (P)	5.971	05-20-36	AA+	2,119	2,130,478
Bank of America Commercial
Mortgage, Inc.,
Mtg Pass Thru Ctf Ser 2006-4
Class A3A	5.600	08-10-13	AAA	4,845	4,983,795
Bear Stearns Alt-A Trust,
Mtg Pass Thru Ctf Ser 2005-3
Class B2 (P)	5.321	04-25-35	AA+	1,261	1,251,794
Mtg Pass Thru Ctf Ser 2006-1
Class 23A1 (P)	5.637	02-25-36	AAA	4,361	4,382,864
Mtg Pass Thru Ctf Ser 2006-3
Class 34A1 (P)	6.191	05-25-36	AAA	4,485	4,560,608
Bear Stearns Commercial Mortgage
Securities, Inc.,
Mtg Pass Thru Ctf Ser 2002-T0P8
Class A2	4.830	08-15-38	AAA	5,960	5,897,149
Mtg Pass Thru Ctf Ser 2003-T10
Class A2	4.740	03-13-40	AAA	5,190	5,103,867
Mtg Pass Thru Ctf Ser 2005-T20
Class A4A (P)	5.303	10-12-42	Aaa	1,640	1,653,055
Chaseflex Trust,
Mtg Pass Thru Ctf Ser 2005-2
Class 4A1	5.000	05-25-20	AAA	3,734	3,670,644
Citigroup Commercial
Mortgage Trust,
Mtg Pass Thru Ctf Ser 2006-C4
Class A3 (P)	5.911	03-15-49	Aaa	3,950	4,140,868
Citigroup/Deutsche Bank
Commercial Mortgage Trust,
Mtg Pass Thru Ctf Ser 2005-CD1
Class A4 (P)	5.400	07-15-44	AAA	2,470	2,500,771
Mtg Pass Thru Ctf Ser 2005-CD1
Class C (P)	5.400	07-15-44	AA	1,030	1,033,508

See notes to financial statements

Bond Fund

18

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

	Interest	Maturity	Credit	Par value
Issuer, description	rate	date	rating (A)	(000)	Value
Thrifts & Mortgage Finance (continued)
Citigroup Mortgage Loan
Trust, Inc.,
Mtg Pass Thru Ctf Ser 2005-5
Class 2A3	5.000%	08-25-35	AAA	$2,363	$2,328,905
Mtg Pass Thru Ctf Ser 2005-10
Class 1A5A (P)	5.877	12-25-35	AAA	3,517	3,552,256
Commercial Mortgage,
Mtg Pass Thru Ctf Ser 2006-C7
Class A3	5.900	06-10-46	AAA	3,775	3,915,547
ContiMortgage Home Equity
Loan Trust,
Mtg Pass Thru Ctf Ser 1995-2
Class A-5	8.100	08-15-25	AAA	523	540,030
Countrywide Alternative
Loan Trust,
Mtg Pass Thru Ctf Ser 2004-24CB
Class 1A1	6.000	11-25-34	AAA	3,370	3,383,624
Mtg Pass Thru Ctf Ser 2005-6
Class 2A1	5.500	04-25-35	Aaa	2,055	2,018,776
Mtg Pass Thru Ctf Ser 2005-J1
Class 3A1	6.500	08-25-32	AAA	2,090	2,115,209
Mtg Pass Thru Ctf Ser 2006-11CB
Class 3A1	6.500	05-25-36	Aaa	5,359	5,422,957
Crown Castle Towers LLC,
Mtg Pass Thru Ctf Ser 2006-1A
Class E (S)	6.065	11-15-36	Baa3	2,900	2,922,972
Mtg Pass Thru Ctf Ser 2006-1A
Class F	6.650	11-15-36	Ba1	3,655	3,683,481
CS First Boston Mortgage
Securities Corp.,
Mtg Pass Thru Ctf Ser 2003-CPN1
Class A2	4.597	03-15-35	AAA	7,665	7,482,067
DB Master Finance LLC,
Mtg Pass Thru Ctf Ser 2006-1
Class A2 (S)	5.779	06-20-31	AAA	3,840	3,921,757
Mtg Pass Thru Ctf Ser 2006-1
Class M1 (S)	8.285	06-20-31	BB	855	878,062
First Horizon Alternative
Mortgage Securities,
Mtg Pass Thru Ctf Ser 2004-AA5
Class B1 (P)	5.223	12-25-34	AA	1,408	1,396,123
Mtg Pass Thru Ctf Ser 2006-AA2
Class B1 (G)(P)	6.224	05-25-36	AA	1,329	1,351,392
Global Signal Trust,
Sub Bond Ser 2004-2A Class D (S)	5.093	12-15-14	Baa2	1,925	1,914,703
Sub Bond Ser 2006-1 Class E (S)	6.495	02-15-36	Baa3	1,850	1,889,937
GMAC Commercial Mortgage
Securities, Inc.,
Mtg Pass Thru Ctf Ser 2002-C1
Class A1	5.785	11-15-39	AAA	3,304	3,344,920

See notes to financial statements

Bond Fund

19

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

	Interest	Maturity	Credit	Par value
Issuer, description	rate	date	rating (A)	(000)	Value
Thrifts & Mortgage Finance	(continued)
GMAC Mortgage Corporation
Loan Trust,
Mtg Pass Thru Ctf Ser 2006-AR1
Class 2A1 (P)	5.648%	04-19-36	AAA	$2,915	$2,933,266
Greenwich Capital Commercial
Funding Corp.,
Mtg Pass Thru Ctf Ser 2005-GG5
Class A2	5.117	04-10-37	AAA	4,650	4,671,050
Mtg Pass Thru Ctf Ser 2006-GG7
Class A4 (P)	6.110	07-10-38	AAA	5,030	5,348,786
GS Mortgage Securities Corp. II,
Mtg Pass Thru Ctf Ser 2006-GG8
Class A2	5.479	11-10-39	Aaa	6,025	6,136,996
GSR Mortgage Loan Trust,
Mtg Pass Thru Ctf Ser 2004-9
Class B1 (G)(P)	4.590	08-25-34	AA	2,535	2,506,217
Mtg Pass Thru Ctf Ser 2006-AR1
Class 3A1 (P)	5.406	01-25-36	AAA	6,103	6,092,117
Indymac Index Mortgage
Loan Trust,
Mtg Pass Thru Ctf Ser 2004-AR13
Class B1	5.296	01-25-35	AA	1,651	1,646,677
Mtg Pass Thru Ctf Ser 2005-AR5
Class B1 (P)	5.388	05-25-35	AA	1,956	1,931,531
Mtg Pass Thru Ctf Ser 2006-AR19
Class 1B1 (P)	6.447	08-25-36	AA	1,786	1,834,682
JP Morgan Chase Commercial
Mortgage Security Corp.,
Mtg Pass Thru Ctf Ser 2005-LDP3
Class A4B	4.996	08-15-42	AAA	3,995	3,950,076
Mtg Pass Thru Ctf Ser 2005-LDP4
Class B	5.129	10-15-42	Aa2	2,126	2,108,758
Mtg Pass Thru Ctf Ser 2006-LDP7
Class A4 (P)	6.066	04-15-45	AAA	3,345	3,549,089
JP Morgan Mortgage Trust,
Mtg Pass Thru Ctf Ser 2005-S2
Class 2A16	6.500	09-25-35	AAA	3,248	3,362,026
Mtg Pass Thru Ctf Ser 2005-S3
Class 2A2	5.500	01-25-21	AAA	4,363	4,357,814
LB-UBS Commercial Mortgage Trust,
Mtg Pass Thru Ctf Ser 2006-C4
Class A4 (P)	6.098	06-15-38	AAA	3,950	4,196,360
Master Adjustable Rate
Mortgages Trust,
Mtg Pass Thru Ctf Ser 2006-2
Class 4A1 (P)	4.990	02-25-36	AAA	4,732	4,705,560
Merrill Lynch Mortgage Trust,
Mtg Pass Thru Ctf Ser 2005-CKI1
Class A6 (P)	5.417	11-12-37	AAA	3,685	3,733,821

See notes to financial statements

Bond Fund

20

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

	Interest	Maturity	Credit	Par value
Issuer, description	rate	date	rating (A)	(000)	Value
Thrifts & Mortgage Finance (continued)
Merrill Lynch/Countrywide
Commercial Mortgage Trust,
Mtg Pass Thru Ctf Ser 2006-2
Class A4 (P)	6.105%	06-12-46	AAA	$5,535	$5,874,876
Mtg Pass Thru Ctf Ser 2006-3
Class A4	5.414	07-12-46	Aaa	3,880	3,955,774
Morgan Stanley Capital I,
Mtg Pass Thru Ctf Ser 2005-HQ7
Class A4 (L)(P)	5.374	11-14-42	AAA	3,065	3,098,288
Mtg Pass Thru Ctf Ser 2005-IQ10
Class A4A	5.230	09-15-42	AAA	4,520	4,550,375
Mtg Pass Thru Ctf Ser 2006-T23
Class A4	5.983	08-12-41	AAA	3,085	3,262,247
Nomura Asset Acceptance Corp.,
Mtg Pass Thru Ctf Ser 2006-AF1
Class CB1	6.540	06-25-36	AA	1,614	1,665,237
Mtg Pass Thru Ctf Ser 2006-AF2
Class 4A	6.738	08-25-36	AAA	3,869	3,971,555
Provident Funding Mortgage
Loan Trust,
Mtg Pass Thru Ctf Ser 2005-1
Class B1 (P)	4.360	05-25-35	AA	1,615	1,582,426
Renaissance Home Equity
Loan Trust,
Mtg Pass Thru Ctf Ser 2005-2
Class AF3	4.499	08-25-35	AAA	2,080	2,054,376
Mtg Pass Thru Ctf Ser 2005-2
Class AF4	4.934	08-25-35	AAA	2,365	2,338,471
Residential Accredit Loans, Inc.,
Mtg Pass Thru Ctf Ser 2005-QA12
Class NB5 (P)	5.994	12-25-35	AAA	3,032	3,092,410
Residential Asset
Securitization Trust,
Mtg Pass Thru Ctf Ser 2006-A7CB
Class 2A1	6.500	07-25-36	AAA	4,889	4,955,611
SBA CMBS Trust,
Sub Bond Ser 2005-1A Class B (S)	5.565	11-15-35	Aa2	1,770	1,792,895
Sub Bond Ser 2005-1A Class D (S)	6.219	11-15-35	Baa2	850	869,582
Sub Bond Ser 2005-1A Class E (S)	6.706	11-15-35	Baa3	795	817,898
Sub Bond Ser 2006-1A Class H (S)	7.389	11-15-36	Ba3	1,035	1,047,574
Sub Bond Ser 2006-1A Class J (S)	7.825	11-15-36	B1	850	860,160
Sovereign Capital Trust I,
Gtd Cap Security	9.000	04-01-27	BB	3,840	4,006,913
Washington Mutual Alternative
Loan Trust,
Mtg Pass Thru Ctf Ser 2005-6
Class 1CB	6.500	08-25-35	AAA	2,331	2,358,878
Wells Fargo Mortgage Backed
Securities Trust,
Mtg Pass Thru Ctf Ser 2004-7
Class 2A2	5.000	07-25-19	AAA	2,476	2,442,099

See notes to financial statements

Bond Fund

21

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

	Interest	Maturity	Credit	Par value
Issuer, description	rate	date	rating (A)	(000)	Value
Tobacco 0.16%					$1,560,239
Reynolds American, Inc.,
Sr Sec Note (S)	7.250%	06-01-13	BB	$1,490	1,560,239
Wireless Telecommunication Service 1.62%					16,185,933
America Movil SA de CV,
Sr Note (Mexico)	5.750	01-15-15	BBB	1,860	1,857,485
AT&T Wireless Services , Inc.,
Sr Note	8.125	05-01-12	A	1,430	1,625,452
Citizens Communications Co.,
Sr Note	6.250	01-15-13	BB+	1,805	1,766,644
Crown Castle Towers LLC,
Sub Bond Ser 2005-1A Class A	4.643	06-15-35	Aaa	2,050	2,021,656
Sub Bond Ser 2005-1A Class D	5.612	06-15-35	Baa2	2,525	2,526,094
Embarq Corp.,
Sr Note	7.082	06-01-16	BBB–	2,405	2,490,902
Nextel Partners, Inc.,
Sr Note	8.125	07-01-11	BB–	2,540	2,641,600
Rogers Wireless, Inc.,
Sr Sub Note (Canada)	8.000	12-15-12	B+	1,185	1,256,100
			Credit
Issuer, description			rating (A)	Shares	Value
Preferred stocks 0.27%					$2,746,525
(Cost $2,706,000)
Agricultural Products 0.19%					1,906,845
Ocean Spray Cranberries, Inc.,
6.25%, Ser A (S)			BB+	23,000	1,906,845
Reinsurance 0.08%					839,680
Aspen Insurance Holdings, Ltd.,
7.401% (Bermuda)			BBB–	32,800	839,680
			Credit	Par value
Issuer, description, maturity date			rating (A)	(000)	Value
Tranche loans 0.15%					$1,500,000
(Cost $1,500,000)
Diversified Metals & Mining 0.15%					1,500,000
Thompson Creek Metals Co.,
Tranche A (First Lien Note),
9.380%, 11-01-12 (B)			B–	$1,500	1,500,000
	Interest	Maturity	Credit	Par value
Issuer, description	rate	date	rating (A)	(000)	Value
U.S. government and agencies securities 38.16%					$381,814,293
(Cost $379,083,998)
Government U.S. 4.80%					48,022,940
United States Treasury,
Bond (L)	6.875%	08-15-25	AAA	$14,190	18,062,323
Bond (L)	4.500	02-15-36	AAA	5,735	5,678,097

See notes to financial statements

Bond Fund

22

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

	Interest	Maturity	Credit	Par value
Issuer, description	rate	date	rating (A)	(000)	Value
Government U.S. (continued)
United States Treasury, (continued)
Note (L)	4.625%	11-15-16	AAA	$15,825	$16,032,703
Note (L)	4.250	11-15-13	AAA	8,345	8,249,817
Government U.S. Agency 33.36%					333,791,353
Federal Home Loan Mortgage Corp.,
20 Yr Pass Thru Ctf	11.250	01-01-16	AAA	51	52,995
30 Yr Adj Rate Pass Thru Ctf (P)	5.280	12-01-35	AAA	8,852	8,717,327
30 Yr Adj Rate Pass Thru Ctf (P)	5.161	11-01-35	AAA	9,252	9,069,923
30 Yr Pass Thru Ctf	6.000	01-01-36	AAA	21,601	21,842,439
30 Yr Pass Thru Ctf	5.000	07-01-35	AAA	10,044	9,819,305
30 Yr Pass Thru Ctf	5.000	09-01-35	AAA	1,176	1,149,353
CMO REMIC 2489-PE	6.000	08-15-32	AAA	2,785	2,840,247
CMO REMIC 2640-WA	3.500	03-15-33	AAA	1,251	1,203,505
CMO REMIC 3153-NE	5.500	05-15-34	AAA	5,160	5,171,850
CMO REMIC 3154-PM	5.500	05-15-34	AAA	4,435	4,421,022
CMO REMIC 3184-PD	5.500	07-15-34	AAA	15,145	15,238,496
Federal National Mortgage Assn.,
15 Yr Pass Thru Ctf	9.000	06-01-10	AAA	434	470,198
15 Yr Pass Thru Ctf	7.500	02-01-08	AAA	33	32,814
15 Yr Pass Thru Ctf	7.000	09-01-10	AAA	113	115,602
15 Yr Pass Thru Ctf	7.000	04-01-17	AAA	574	591,204
15 Yr Pass Thru Ctf	7.000	06-01-17	AAA	148	152,323
15 Yr Pass Thru Ctf	5.500	11-01-20	AAA	1,529	1,537,418
15 Yr Pass Thru Ctf	5.500	12-01-20	AAA	10,536	10,596,799
15 Yr Pass Thru Ctf	5.000	05-01-18	AAA	6,962	6,914,518
15 Yr Pass Thru Ctf	5.000	08-01-19	AAA	9,095	9,011,558
15 Yr Pass Thru Ctf	5.000	10-01-19	AAA	7,098	7,041,927
30 Yr Pass Thru Ctf	6.850	07-01-36	AAA	19,283	19,677,162
30 Yr Pass Thru Ctf	6.500	07-01-36	AAA	18,991	19,378,829
30 Yr Pass Thru Ctf	6.000	09-01-35	AAA	4,277	4,323,846
30 Yr Pass Thru Ctf	6.000	10-01-35	AAA	467	471,727
30 Yr Pass Thru Ctf	6.000	04-01-36	AAA	3,406	3,443,264
30 Yr Pass Thru Ctf	6.000	05-01-36	AAA	14,441	14,597,998
30 Yr Pass Thru Ctf	6.000	08-01-36	AAA	40,855	41,299,561
30 Yr Pass Thru Ctf	6.000	09-01-36	AAA	10,960	11,079,391
30 Yr Pass Thru Ctf	5.500	05-01-35	AAA	29,797	29,753,054
30 Yr Pass Thru Ctf	5.500	01-01-36	AAA	3,739	3,725,023
30 Yr Pass Thru Ctf	5.500	01-01-36	AAA	10,221	10,188,836
30 Yr Pass Thru Ctf	5.500	02-01-36	AAA	16,090	16,039,841
30 Yr Pass Thru Ctf	5.000	08-01-35	AAA	2,400	2,345,100
30 Yr Pass Thru Ctf	5.000	03-01-36	AAA	5,391	5,267,121
CMO REMIC 2003-33-AC	4.250	03-25-33	AAA	1,012	977,932
CMO REMIC 2003-49-JE	3.000	04-25-33	AAA	2,819	2,549,303
CMO REMIC 2003-58-AD	3.250	07-25-33	AAA	2,773	2,568,227
CMO REMIC 2003-63-PE	3.500	07-25-33	AAA	2,319	2,135,258
CMO REMIC 2006-57-PD	5.500	01-25-35	AAA	5,985	5,980,246
CMO REMIC 2006-64-PC	5.500	10-25-34	AAA	4,520	4,516,358
CMO REMIC 2006-65-HE	5.500	02-25-35	AAA	6,475	6,476,742
CMO REMIC 2006-67-PD	5.500	12-25-34	AAA	4,875	4,879,513
Financing Corp.,
Bond	10.350	08-03-18	Aaa	3,545	5,250,43

See notes to financial statements

Bond Fund

23

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

	Interest	Maturity	Credit	Par value
Issuer, description	rate	date	rating (A)	(000)	Value
Government U.S. Agency (continued)
Government National
Mortgage Assn.,
30 Yr Pass Thru Ctf	10.500%	01-15-16	AAA	$24	$26,399
30 Yr Pass Thru Ctf	10.000	06-15-20	AAA	28	31,437
30 Yr Pass Thru Ctf	10.000	11-15-20	AAA	11	12,635
30 Yr Pass Thru Ctf	9.500	03-15-20	AAA	37	40,110
30 Yr Pass Thru Ctf	9.500	06-15-20	AAA	9	9,652
30 Yr Pass Thru Ctf	9.500	01-15-21	AAA	45	49,369
30 Yr Pass Thru Ctf	9.500	05-15-21	AAA	21	23,158
CMO Remic 2003-42-XA	3.750	05-16-33	AAA	723	682,999
			Interest	Par value
Issuer, description, maturity date			rate	(000)	Value
Short-term investments 1.76%					$17,573,000
(Cost $17,573,000)
Joint Repurchase Agreement 1.76%					17,573,000
Investment in a joint repurchase agreement transaction with
UBS AG — Dated 11-30-06, due 12-1-06 (Secured by U.S. Treasury
Inflation Indexed Bonds 2.000%, due 1-15-26 and 3.625%, due
4-15-28 and U.S. Treasury Inflation Indexed Notes 0.875%,
due 4-15-10, 1.875%, due 7-15-15, 2.000%, due 7-15-14,
3.375%, due 1-15-07, 3.375%, due 1-15-12, and 4.250%,
due 1-15-10). Maturity value: $17,575,577			5.280%	$17,573	17,573,000
Total investments (Cost $979,397,463) 99.44%					$994,987,642
Other assets and liabilities, net 0.56%					$5,647,892
Total net assets 100.00%					$1,000,635,534

(A) Credit ratings are unaudited and are rated by Moody’s Investors Service where Standard & Poor’s ratings are not available unless indicated otherwise.

(B) This security is fair valued in good faith under procedures established by the Board of Trustees. These securities amounted to $1,500,000 or 0.15% of the Fund’s net assets as of November 30, 2006.

(G) Security rated internally by John Hancock Advisers, LLC.

(L) All or a portion of this security is on loan as of November 30, 2006.

(N) This security having an aggregate value of $2,059,380 or 0.21% of the Fund’s net assets, has been purchased on a when-issued basis. The purchase price and the interest rate of such securities are fixed at trade date, although the Fund does not earn any interest on such securities until settlement date. The Fund has instructed its custodian bank to segregate assets with a current value at least equal to the amount of its when issued commitments. Accordingly, the market value of $2,096,926 of Federal National Mortgage Association, 5.500%, 5-1-35 has been segregated to cover the when-issued commitments.

(O) Cash interest will be paid on this obligation at the stated rate beginning on the stated date.

(P) Represents rate in effect on November 30, 2006.

(S) These securities are exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be resold, normally to qualified institutional buyers, in transactions exempt from registration. Rule 144A securities amounted to $121,610,528 or 12.15% of the Fund’s net assets as of November 30, 2006.

Parenthetical disclosure of a foreign country in the security description represents country of a foreign issuer; however, security is U.S. dollar-denominated.

The percentage shown for each investment category is the total value of that category as a percentage of the net assets of the Fund.

See notes to financial statements

Bond Fund

24

Financial statements

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

Statement of assets and liabilities 11-30-06 (unaudited)

This Statement of Assets and Liabilities is the Fund’s balance sheet. It shows the value
of what the Fund owns, is due and owes. You’ll also find the net asset value and the
maximum offering price per share.

Assets
Investments at value (cost $979,397,463) including $67,345,223 of securities loaned	$994,987,642
Cash	16,600
Receivable for investments sold	9,171,739
Receivable for shares sold	280,219
Interest receivable	9,340,265
Receivable from affiliates	466
Other assets	126,041
Total assets	1,013,922,972
Liabilities
Payable for investments purchased	10,878,724
Payable for shares repurchased	1,117,076
Dividends payable	137,300
Payable to affiliates
Management fees	409,244
Distribution and service fees	70,038
Other	290,331
Other payables and accrued expenses	384,725
Total liabilities	13,287,438
Net assets
Capital paid-in	1,020,596,260
Accumulated net realized loss on investments and financial futures contracts	(34,689,857)
Net unrealized appreciation of investments and financial futures contracts	15,590,179
Distributions in excess of net investment income	(861,048)
Net assets	$1,000,635,534
Net asset value per share
Based on net asset values and shares outstanding — the Fund has an
unlimited number of shares authorized with no par value
Class A ($898,498,940 ÷ 60,028,940 shares)	$14.97
Class B ($73,895,381 ÷ 4,937,203 shares)	$14.97
Class C ($23,254,676 ÷ 1,553,660 shares)	$14.97
Class I ($4,214,695 ÷ 281,636 shares)	$14.97
Class R ($771,842 ÷ 51,570 shares)	$14.97
Maximum offering price per share
Class A1 ($14.97 ÷ 95.5%)	$15.68

¹ On single retail sales of less than $100,000. On sales of $100,000 or more and on group sales the offering price is reduced.

See notes to financial statements

Bond Fund

25

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

Statement of operations For the period ended 11-30-06 (unaudited).¹

This Statement of Operations summarizes the Fund’s investment income earned
and expenses incurred in operating the Fund. It also shows net gains (losses) for
the period stated.

Investment income
Interest	$30,513,116
Dividends	115,033
Securities lending	72,949
Total investment income	30,701,098
Expenses
Investment management fees (Note 2)	2,507,675
Distribution and service fees (Note 2)	1,864,126
Class A, B and C transfer agent fees (Note 2)	898,318
Class I transfer agent fees (Note 2)	1,039
Class R transfer agent fees (Note 2)	2,654
Accounting and legal services fees (Note 2)	71,218
Compliance fees	14,719
Custodian fees	110,690
Printing fees	71,981
Trustees’ fees	40,274
Blue sky fees	39,674
Professional fees	33,026
Interest	6,598
Securities lending fees	2,806
Miscellaneous	28,186
Total expenses	5,692,984
Less expense reductions (Note 2)	(14,129)
Net expenses	5,678,855
Net investment income	25,022,243
Realized and unrealized gain (loss)
Net realized gain (loss) on
Investments	(12,036,902)
Financial futures contracts	789,275
Change in net unrealized appreciation (depreciation) of
Investments	42,677,913
Financial futures contracts	12,416
Net realized and unrealized gain	31,442,702
Increase in net assets from operations	$56,464,945
1 Semiannual period from 6-1-06 through 11-30-06.

See notes to financial statements

Bond Fund

26

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

Statement of changes in net assets

These Statements of Changes in Net Assets show how the value of the Fund’s net assets
has changed during the last two periods. The difference reflects earnings less expenses,
any investment gains and losses, distributions, if any, paid to shareholders and the net of
Fund share transactions.

	Year	Period
	ended	ended
	5-31-06	11-30-061
Increase (decrease) in net assets
From operations
Net investment income	$49,345,936	$25,022,243
Net realized loss	(4,753,353)	(11,247,627)
Change in net unrealized appreciation (depreciation)	(49,716,305)	42,690,329
Increase (decrease) in net assets resulting from operations	(5,123,722)	56,464,945
Distributions to shareholders
From net investment income
Class A	(46,118,272)	(23,164,273)
Class B	(4,473,822)	(1,806,176)
Class C	(1,070,734)	(531,779)
Class I	(306,121)	(116,166)
Class R	(18,727)	(18,050)
From capital paid-in
Class A	(482,923)	—
Class B	(46,686)	—
Class C	(12,857)	—
Class I	(2,928)	—
Class R	(409)	—
	(52,533,479)	(25,636,444)
From Fund share transactions	(100,388,082)	(46,593,208)
Net assets
Beginning of period	1,174,445,524	1,016,400,241
End of period2	$1,016,400,241	$1,000,635,534

¹ Semiannual period from 6-1-06 through 11-30-06. Unaudited.

² Includes distributions in excess of net investment of $246,847 and $861,048, respectively.

See notes to financial statements

Bond Fund

27

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

Financial highlights

The Financial highlights show how the Fund’s net asset value for a share has changed
since the end of the previous period.

CLASS A SHARES
Period ended	5-31-021,2	5-31-03	5-31-04	5-31-05	5-31-06	11-30-063
Per share operating performance
Net asset value, beginning of period	$14.69	$14.71	$15.69	$14.98	$15.30	$14.51
Net investment income4	0.82	0.72	0.70	0.67	0.68	0.37
Net realized and unrealized
gain (loss) on investments	0.06	1.02	(0.65)	0.38	(0.74)	0.47
Total from investment operations	0.88	1.74	0.05	1.05	(0.06)	0.84
Less distributions
From net investment income	(0.86)	(0.76)	(0.76)	(0.73)	(0.72)	(0.38)
From capital paid-in	—	—	—	—	(0.01)	—
	(0.86)	(0.76)	(0.76)	(0.73)	(0.73)	(0.38)
Net asset value, end of period	$14.71	$15.69	$14.98	$15.30	$14.51	$14.97
Total return5 (%)	6.10	12.26	0.31	7.116	(0.45)6	5.877
Ratios and supplemental data
Net assets, end of period
(in millions)	$1,144	$1,192	$1,047	$1,012	$899	$898
Ratio of net expenses to average
net assets (%)	1.11	1.12	1.09	1.05	1.07	1.068
Ratio of gross expenses to average
net assets (%)	1.11	1.12	1.09	1.069	1.089	1.068
Ratio of net investment income
to average net assets (%)	5.51	4.84	4.55	4.41	4.56	5.068
Portfolio turnover (%)	189	273	241	139	135	597

See notes to financial statements

Bond Fund

28

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

Financial highlights

CLASS B SHARES
Period ended	5-31-021,2	5-31-03	5-31-04	5-31-05	5-31-06	11-30-063
Per share operating performance
Net asset value, beginning of period	$14.69	$14.71	$15.69	$14.98	$15.30	$14.51
Net investment income4	0.72	0.62	0.59	0.57	0.58	0.32
Net realized and unrealized
gain (loss) on investments	0.06	1.02	(0.65)	0.37	(0.74)	0.46
Total from investment operations	0.78	1.64	(0.06)	0.94	(0.16)	0.78
Less distributions
From net investment income	(0.76)	(0.66)	(0.65)	(0.62)	(0.62)	(0.32)
From capital paid-in	—	—	—	—	(0.01)	—
	(0.76)	(0.66)	(0.65)	(0.62)	(0.63)	(0.32)
Net asset value, end of period	$14.71	$15.69	$14.98	$15.30	$14.51	14.97
Total return5 (%)	5.37	11.48	(0.39)	6.37 6	(1.14)6	5.517
Ratios and supplemental data
Net assets, end of period
(in millions)	$236	$233	$164	$128	$87	$74
Ratio of net expenses to average
net assets (%)	1.81	1.82	1.79	1.75	1.77	1.768
Ratio of gross expenses to average
net assets (%)	1.81	1.82	1.79	1.769	1.789	1.768
Ratio of net investment income
to average net assets (%)	4.81	4.15	3.84	3.70	3.84	4.378
Portfolio turnover (%)	189	273	241	139	135	597

See notes to financial statements

Bond Fund

29

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

Financial highlights

CLASS C SHARES
Period ended	5-31-021,2	5-31-03	5-31-04	5-31-05	5-31-06	11-30-063
Per share operating performance
Net asset value, beginning of period	$14.69	$14.71	$15.69	$14.98	$15.30	$14.51
Net investment income4	0.72	0.62	0.59	0.57	0.58	0.32
Net realized and unrealized
gain (loss) on investments	0.06	1.02	(0.64)	0.37	(0.74)	0.46
Total from investment operations	0.78	1.64	(0.05)	0.94	(0.16)	0.78
Less distributions
From net investment income	(0.76)	(0.66)	(0.66)	(0.62)	(0.62)	(0.32)
From capital paid-in	—	—	—	—	(0.01)	—
	(0.76)	(0.66)	(0.66)	(0.62)	(0.63)	(0.32)
Net asset value, end of period	$14.71	$15.69	$14.98	$15.30	$14.51	$14.97
Total return5 (%)	5.36	11.48	(0.39)	6.37 6	(1.14)6	5.507
Ratios and supplemental data
Net assets, end of period
(in millions)	$44	$45	$32	$28	$24	$23
Ratio of net expenses to average
net assets (%)	1.81	1.82	1.79	1.75	1.77	1.768
Ratio of gross expenses to average
net assets (%)	1.81	1.82	1.79	1.76 9	1.789	1.768
Ratio of net investment income
to average net assets (%)	4.81	4.15	3.84	3.71	3.86	4.368
Portfolio turnover (%)	189	273	241	139	135	597

See notes to financial statements

Bond Fund

30

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

Financial highlights

CLASS I SHARES
Period ended	5-31-021,2,10	5-31-03	5-31-04	5-31-05	5-31-06	11-30-063
Per share operating performance
Net asset value, beginning of period	$14.96	$14.71	$15.69	$14.98	$15.30	$14.51
Net investment income4	0.66	0.78	0.76	0.73	0.75	0.40
Net realized and unrealized
gain (loss) on investments	(0.21)	1.02	(0.64)	0.38	(0.74)	0.47
Total from investment operations	0.45	1.80	0.12	1.11	0.01	0.87
Less distributions
From net investment income	(0.70)	(0.82)	(0.83)	(0.79)	(0.79)	(0.41)
From capital paid-in	—	—	—	—	(0.01)	—
	(0.70)	(0.82)	(0.83)	(0.79)	(0.80)	(0.41)
Net asset value, end of period	$14.71	$15.69	$14.98	$15.30	$14.51	$14.97
Total return5 (%)	3.04 7	12.71	0.78	7.55	(0.01)	6.107
Ratios and supplemental data
Net assets, end of period
(in millions)	—11	$9	$5	$5	$5	$4
Ratio of net expenses to average
net assets (%)	0.688	0.72	0.63	0.65	0.64	0.638
Ratio of net investment income
to average net assets (%)	5.948	5.23	4.98	4.82	4.99	5.498
Portfolio turnover (%)	1897	273	241	139	135	597

See notes to financial statements

Bond Fund

31

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

Financial highlights

CLASS R SHARES
Period ended	5-31-0410	5-31-05	5-31-06	11-30-063
Per share operating performance
Net asset value, beginning of period	$14.93	$14.98	$15.30	$14.51
Net investment income4	0.54	0.67	0.59	0.33
Net realized and unrealized
gain (loss) on investments	0.10	0.36	(0.75)	0.47
Total from investment operations	0.64	1.03	(0.16)	0.80
Less distributions
From net investment income	(0.59)	(0.71)	(0.62)	(0.34)
From capital paid-in	—	—	(0.01)	—
	(0.59)	(0.71)	(0.63)	(0.34)
Net asset value, end of period	$14.98	$15.30	$14.51	$14.97
Total return5 (%)	4.30 7	7.02	(1.09)	5.577
Ratios and supplemental data
Net assets, end of period
(in millions)	—11	—11	$1	$1
Ratio of net expenses to average
net assets (%)	1.388	1.12	1.76	1.648
Ratio of net investment income
to average net assets (%)	4.408	4.44	3.95	4.488
Portfolio turnover (%)	2417	139	135	597

¹ Audited by previous auditor.

² As required, effective June 1, 2001 the Fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies, as revised, relating to the amortization of premiums and accretion of discounts on debt securities. The effect of this change on per share amounts for the year ended May 31, 2002, was to decrease net investment income per share by $0.04, increase (decrease) net realized and unrealized gains (losses) per share by $0.04 and, had the Fund not made these changes to amortization and accretion, the annualized ratio of net investment income to average net assets would have been 5.81%, 5.11%, 5.09% and 6.24% for Class A, Class B, Class C and Class I shares, respectively. Per share ratios and supplemental data for periods prior to June 1, 2001 have not been restated to reflect this change in presentation.

³ Semiannual period from 6-1-06 through 11-30-06. Unaudited.

⁴ Based on the average of the shares outstanding.

⁵ Assumes dividend reinvestment and does not reflect the effect of sales charges.

⁶ Total return would have been lower had certain expenses not been reduced during the period shown.

⁷ Not annualized.

⁸ Annualized.

⁹ Does not take into effect expense reductions during the period shown.

¹⁰ Class I and Class R shares began operations on 9-4-01 and 8-5-03, respectively.

¹¹ Less than $500,000.

See notes to financial statements

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32

Notes to financial statements (unaudited)

Note 1
Accounting policies

John Hancock Bond Fund (the “Fund”) is a diversified series of John Hancock Sovereign Bond Fund, an open-end management investment company registered under the Investment Company Act of 1940 (the “1940 Act”), as amended. The investment objective of the Fund is to generate a high level of current income, consistent with prudent investment risk.

The Trustees have authorized the issuance of multiple classes of shares of the Fund, designated as Class A, Class B, Class C, Class I and Class R shares. The shares of each class represent an interest in the same portfolio of investments of the Fund and have equal rights as to voting, redemptions, dividends and liquidation, except that certain expenses, subject to the approval of the Trustees, may be applied differently to each class of shares in accordance with current regulations of the Securities and Exchange Commission and the Internal Revenue Service. Shareholders of a class that bears distribution and service expenses under the terms of a distribution plan have exclusive voting rights to that distribution plan. Class B shares will convert to Class A shares eight years after purchase.

Significant accounting policies of the Fund
are as follows:

Valuation of investments

Securities in the Fund’s portfolio are valued on the basis of market quotations, valuations provided by independent pricing services or at fair value as determined in good faith in accordance with procedures approved by the Trustees. Short-term debt investments which have a remaining maturity of 60 days or less may be valued at amortized cost, which approximates market value.

Joint repurchase agreement

Pursuant to an exemptive order issued by the Securities and Exchange Commission, the Fund, along with other registered investment companies having a management contract with John Hancock Advisers, LLC (the “Adviser”), a wholly owned subsidiary of John Hancock Financial Services, Inc., a subsidiary of Manulife Financial Corporation (“MFC”), may participate in a joint repurchase agreement transaction. Aggregate cash balances are invested in one or more large repurchase agreements, whose underlying securities are obligations of the U.S. government and/or its agencies. The Fund’s custodian bank receives delivery of the underlying securities for the joint account on the Fund’s behalf. The Adviser is responsible for ensuring that the agreement is fully collateralized at all times.

Investment transactions

Investment transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment transactions are reported on trade date. Net realized gains and losses on sales of investments are determined on the identified cost basis. Some securities may be purchased on a “when-issued” or “forward commitment” basis, which means that the securities will be delivered to the Fund at a future date, usually beyond the customary settlement date.

Discount and premium on securities

The Fund accretes discount and amortizes premium from par value on securities from either the date of issue or the date of purchase over the life of the security.

Class allocations

Income, common expenses and realized and unrealized gains (losses) are determined at the fund level and allocated daily to each class of shares based on the appropriate net asset value of the respective classes. Distribution

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33

and service fees, if any, and transfer agent fees for Class I and Class R shares are calculated daily at the class level based on the appropriate net asset value of each class and the specific expense rate(s) applicable to each class.

Expenses

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

Bank borrowings

The Fund is permitted to have bank borrowings for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. The Fund has entered into a syndicated line of credit agreement with various banks. This agreement enables the Fund to participate, with other funds managed by the Adviser, in an unsecured line of credit with banks, which permits borrowings of up to $150 million, collectively. Interest is charged to each fund based on its borrowing. In addition, a commitment fee is charged to each fund based on the average daily unused portion of the line of credit, and is allocated among the participating funds. The Fund had no borrowing activity under the line of credit during the period ended November 30, 2006.

Securities lending

The Fund may lend securities to certain qualified brokers who pay the Fund negotiated lender fees. The loans are collateralized at all times with cash or securities with a market value at least equal to the market value of the securities on loan. As with other extensions of credit, the Fund may bear the risk of delay of the loaned securities in recovery or even loss of rights in the collateral, should the borrower of the securities fail financially. At November 30, 2006, the Fund loaned securities having a market value of $67,345,223 collateralized by securities in the amount of $69,433,952. Securities lending expenses are paid by the Fund to the Adviser.

Financial futures contracts

The Fund may buy and sell financial futures contracts. Buying futures tends to increase the Fund’s exposure to the underlying instrument. Selling futures tends to decrease the Fund’s exposure to the underlying instrument or hedge other Fund’s instruments. At the time the Fund enters into a financial futures contract, it is required to deposit with its custodian a specified amount of cash or U.S. government securities, known as “initial margin,” equal to a certain percentage of the value of the financial futures contract being traded. Each day, the futures contract is valued at the official settlement price of the board of trade or U.S. commodities exchange on which it trades. Subsequent payments to and from the broker, known as “variation margin,” are made on a daily basis as the market price of the financial futures contract fluctuates. Daily variation margin adjustments arising from this “mark to market” are recorded by the Fund as unrealized gains or losses.

When the contracts are closed, the Fund recognizes a gain or loss. Risks of entering into financial futures contracts include the possibility that there may be an illiquid market and/or that a change in the value of the contracts may not correlate with changes in the value of the underlying securities. In addition, the Fund could be prevented from opening or realizing the benefits of closing out financial futures positions because of position limits or limits on daily price fluctuation imposed by an exchange.

For federal income tax purposes, the amount, character and timing of the Fund’s gains and/or losses can be affected as a result of financial futures contracts.

The Fund had no open financial futures contracts on November 30, 2006.

Federal income taxes

The Fund qualifies as a “regulated investment company” by complying with the applicable provisions of the Internal Revenue Code and will not be subject to federal income tax on taxable income that is distributed to shareholders. Therefore, no federal income tax provision is required. For federal income tax

Bond Fund

34

purposes, the Fund has $13,569,442 of a capital loss carryforward available, to the extent provided by regulations, to offset future net realized capital gains. To the extent that such carryforward is used by the Fund, no capital gain distributions will be made. The loss carryforward expires as follows: May 31, 2009 — $13,027,799, May 31, 2010 — $35,777 and May 31, 2014 — $505,866.

New accounting pronouncements

In June 2006, Financial Accounting Standards Board (“FASB”) Interpretation No. 48, Accounting for Uncertainty in Income Taxes (the “Interpretation”) was issued, and is effective for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. The Interpretation prescribes a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return, and requires certain expanded disclosures. Management is currently evaluating the application of the Interpretation to the Fund, and has not at this time quantified the impact, if any, resulting from the adoption of the Interpretation on the Fund’s financial statements.

In September 2006, FASB Standard No. 157, Fair Value Measurements (“FAS 157”) was issued, and is effective for fiscal years beginning after November 15, 2007. FAS 157 defines fair value, establishing a framework for measuring fair value and expands disclosure about fair value measurements. Management is currently evaluating the application of FAS 157 to the Fund, and its impact, if any, resulting from the adoption of FAS 157 on the Fund’s financial statements.

Dividends, interest and distributions

Dividend income on investment securities is recorded on the ex-dividend date or, in the case of some foreign securities, on the date thereafter when the Fund identifies the dividend. Interest income on investment securities is recorded on the accrual basis. The Fund may place a debt obligation on non-accrual status and reduce related interest income by ceasing current accruals and writing off interest receivables when the collection of interest has become doubtful. Foreign income may  be subject to foreign withholding taxes, which are accrued as applicable.

The Fund records distributions to shareholders from net investment income and net realized gains, if any, on the ex-dividend date. The Fund’s net investment income is declared daily as dividends to shareholders of record as of the close of business on the preceding day, and distributed monthly. During the year ended May 31, 2006, the tax character of distributions paid was as follows: ordinary income $51,987,676 and capital paid-in $545,803. Distributions paid by the Fund with respect to each class of shares are calculated in the same manner, at the same time and are in the same amount, except for the effect of expenses that may be applied differently to each class.

Such distributions, on a tax basis, are determined in conformity with income tax regulations, which may differ from accounting principles generally accepted in the United States of America. Distributions in excess of tax basis earnings and profits, if any, are reported in the Fund’s financial statements as a return of capital.

Use of estimates

The preparation of these financial statements, in accordance with accounting principles generally accepted in the United States of America, incorporates estimates made by management in determining the reported amount of assets, liabilities, revenues and expenses of the Fund. Actual results could differ from these estimates.

Note 2 
Management fee and transactions with
affiliates and others

The Fund has an investment management contract with the Adviser. Under the investment management contract, the Fund pays a monthly management fee to the Adviser equivalent, on an annual basis, to the sum of: (a) 0.50% of the first $1,500,000,000 of the Fund’s average daily net asset value, (b) 0.45% of the next $500,000,000, (c) 0.40% of the next $500,000,000 and (d) 0.35% of the Fund’s average daily net asset value in excess of $2,500,000,000.

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35

Effective December 31, 2005, the investment management teams of the Adviser were reorganized into Sovereign Asset Management LLC (“Sovereign”), a wholly owned indirect subsidiary of John Hancock Life Insurance Company (“JHLICO”), a subsidiary of MFC. The Adviser remains the principal advisor on the Fund and Sovereign acts as subadviser under the supervision of the Adviser. The restructuring did not have an impact on the Fund, which continues to be managed using the same investment philosophy and process. The Fund is not responsible for payment of the subadvisory fees.

Effective October 1, 2006, Sovereign changed its name to MFC Global Investment Management (U.S.), LLC.

The Fund has a Distribution Agreement with John Hancock Funds, LLC (“JH Funds”), a wholly owned subsidiary of the Adviser. The Fund has adopted Distribution Plans with respect to Class A, Class B, Class C and Class R, pursuant to Rule 12b-1 under the 1940 Act, as amended, to reimburse JH Funds for the services it provides as distributor of shares of the Fund. Accordingly, the Fund makes monthly payments to JH Funds at an annual rate not to exceed 0.30%, 1.00%, 1.00% and 0.50% of average daily net asset value of Class A, Class B, Class C and Class R, respectively. A maximum of 0.25% of such payments may be service fees, as defined by the Conduct Rules of the National Association of Securities Dealers. Under the Conduct Rules, curtailment of a portion of the Fund’s 12b-1 payments could occur under certain circumstances.

In addition, under a Service Plan for Class R shares, the Fund pays up to 0.25% of Class R average daily net asset value for certain other services.

Expenses under the agreements described above for the period ended November 30, 2006 were as follows:

	Distribution and
Share class	service fees
Class A	$1,340,780
Class B	402,800
Class C	118,584
Class R	1,962
Total	$1,864,126

Class A shares are assessed up-front sales charges. During the period ended November 30, 2006, JH Funds received net up-front sales charges of $140,733 with regard to sales of Class A shares. Of this amount, $14,981 was retained and used for printing prospectuses, advertising, sales literature and other purposes, $67,475 was paid as sales commissions to unrelated broker-dealers and $58,277 was paid as sales commissions to sales personnel of Signator Investors, Inc. (“Signator Investors”), a related broker-dealer. The Adviser’s indirect parent, JHLICO, is the indirect sole shareholder of Signator Investors.

Class B shares that are redeemed within six years of purchase are subject to a contingent deferred sales charge (“CDSC”) at declining rates, beginning at 5.00% of the lesser of the current market value at the time of redemption or the original purchase cost of the shares being redeemed. Class C shares that are redeemed within one year of purchase are subject to a CDSC at a rate of 1.00% of the lesser of the current market value at the time of redemption or the original purchase cost of the shares being redeemed. Proceeds from the CDSCs are paid to JH Funds and are used, in whole or in part, to defray its expenses for providing distribution-related services to the Fund in connection with the sale of Class B and Class C shares. During the period ended November 30, 2006, CDSCs received by JH Funds amounted to $90,269 for Class B shares and $396 for Class C shares.

The Fund has a transfer agent agreement with John Hancock Signature Services, Inc. (‘Signature Services”), an indirect subsidiary of JHLICO. For Class A, Class B and Class C shares, the Fund pays a monthly transfer

Bond Fund

36

agent fee at an annual rate of 0.015% of each class’s average daily net asset value, plus a fee based on the number of shareholder accounts and reimbursement for certain out-of-pocket expenses, aggregated and allocated to each class on the basis of its relative net asset value. For Class I shares, the Fund pays a monthly transfer agent fee at an annual rate of 0.05% of Class I average daily net asset value. For Class R shares, the Fund pays a monthly transfer agent fee at an annual rate of 0.05% of Class R average daily net asset value, plus a fee based on the number of shareholder accounts and reimbursement for certain out-of-pocket expenses. Signature Services agreed to voluntarily reduce the Fund’s asset-based portion of the transfer agent fee for Class A, Class B, Class C and Class R shares if the total transfer agent fee exceeded the median transfer agency fee for comparable mutual funds by greater than 0.05% . Accordingly, the transfer agent expense for C lass A, Class B, Class C and Class R shares was reduced by $14,129 during the period ended November 30, 2006. Signature Services terminated this reimbursement agreement June 30, 2006.

The Fund has an agreement with the Adviser and affiliates to perform necessary tax, accounting and legal services for the Fund. The compensation for the period amounted to $71,218. The Fund also reimbursed JHLICO for certain compliance costs, included in the Fund’s Statement of Operations.

The Adviser and other subsidiaries of JHLICO owned 6,698 Class R shares of beneficial interest of the Fund on November 30, 2006.

Mr. James R. Boyle is Chairman of the Adviser, as well as affiliated Trustee of the Fund, and is compensated by the Adviser and/or its affiliates. The compensation of unaffiliated Trustees is borne by the Fund. The unaffiliated Trustees may elect to defer, for tax purposes, their receipt of this compensation under the John Hancock Group of Funds Deferred Compensation Plan. The Fund makes investments into other John Hancock funds, as applicable, to cover its liability for the deferred compensation. Investments to cover the Fund’s deferred compensation liability are recorded on the Fund’s books as an other asset.

The deferred compensation liability and the related other asset are always equal and are marked to market on a periodic basis to reflect any income earned by the investments, as well as any unrealized gains or losses. The Deferred Compensation Plan investments had no impact on the operations of the Fund.

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37

Note 3
Fund share transactions

This listing illustrates the number of Fund shares sold, reinvested and repurchased during the last two periods, along with the corresponding dollar value.

	Year ended 5-31-06		Period ended 11-30-061
	Shares	Amount	Shares	Amount
Class A shares
Sold	3,238,500	$48,427,917	1,626,259	$23,872,881
Distributions reinvested	2,606,528	38,922,163	1,305,318	19,194,301
Repurchased	(10,053,324)	(150,082,572)	(4,873,857)	(71,429,165)
Net decrease	(4,208,296)	($62,732,492)	(1,942,280)	($28,361,983)
Class B shares
Sold	445,025	$6,675,996	163,323	$2,398,178
Distributions reinvested	223,855	3,345,898	89,853	1,320,536
Repurchased	(3,032,284)	(45,239,747)	(1,305,705)	(19,153,473)
Net decrease	(2,363,404)	($35,217,853)	(1,052,529)	($15,434,759)
Class C shares
Sold	216,577	$3,229,583	128,160	$1,883,881
Distributions reinvested	55,130	823,338	27,113	398,658
Repurchased	(483,725)	(7,223,363)	(251,816)	(3,705,122)
Net decrease	(212,018)	($3,170,442)	(96,543)	($1,422,583)
Class I shares
Sold	150,674	$2,256,458	66,648	$986,125
Distributions reinvested	18,683	278,345	6,797	99,662
Repurchased	(151,523)	(2,256,531)	(168,432)	(2,448,654)
Net increase (decrease)	17,834	$278,272	(94,987)	($1,362,867)
Class R shares
Sold	50,922	$757,098	18,680	$274,673
Distributions reinvested	791	11,695	1,045	15,369
Repurchased	(21,056)	(314,360)	(20,429)	(301,058)
Net increase (decrease)	30,657	$454,433	(704)	($11,016)
Net decrease	(6,735,227)	($100,388,082)	(3,187,043)	($46,593,208)

¹ Semiannual period from 6-1-06 through 11-30-06. Unaudited.

Note 4
Investment transactions

Purchases and proceeds from sales or maturities of securities, other than short-term securities and obligations of the U.S. government, during the period ended November 30, 2006, aggregated $402,399,757 and $379,193,338, respectively.

Purchases and proceeds from sales or maturities of obligations of U.S. government aggregated $179,091,336 and $271,593,090, respectively, during the period ended November 30, 2006.

The cost of investments owned on November 30, 2006, including short-term investments, for federal income tax purposes, was $981,109,417. Gross unrealized appreciation and depreciation of investments aggregated $19,296,230 and $5,418,005, respectively, resulting in net unrealized appreciation of $13,878,225. The difference between book basis and tax basis net unrealized depreciation of investments is attributable primarily to the tax deferral of losses on certain sales of securities and amortization of premiums and accretion of discounts on debt securities.

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38

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

The Investment Company Act of 1940 (the “1940 Act”), requires the Board of Trustees (the “Board”) of John Hancock Sovereign Bond Fund (the “Trust”), including a majority of the Trustees who have no direct or indirect interest in the investment advisory agreement and are not “interested persons” of the Trust, as defined in the 1940 Act (the “Independent Trustees”), annually to review and consider the continuation of: (i) the investment advisory agreement (the “Advisory Agreement”) with John Hancock Advisers, LLC (the “Adviser”) and (ii) the investment subadvisory agreement (the “Subadvisory Agreement”) with MFC Global Investment Management (U.S.), LLC (the “Subadviser”) for the John Hancock Bond Fund (the “Fund”). The Advisory Agreement and the Subadvisory Agreement are collectively referred to as the “Advisory Agreements.”

At meetings held on May 1–2 and June 5–6, 2006,¹ the Board considered the factors and reached the conclusions described below relating to the selection of the Adviser and Subadviser and the continuation of the Advisory Agreements. During such meetings, the Board’s Contracts/ Operations Committee and the Independent Trustees also met in executive sessions with their independent legal counsel.

In evaluating the Advisory Agreements, the Board, including the Contracts/Operations Committee and the Independent Trustees, reviewed a broad range of information requested for this purpose by the Independent Trustees, including: (i) the investment performance of the Fund relative to a category of relevant funds (the “Category”) and a peer group of comparable funds (the “Peer Group”) each selected by Morningstar Inc. (“Morningstar”), an independent provider of investment company data, for a range of periods ended December 31, 2005, (ii) advisory and other fees incurred by, and the expense ratios of, the Fund relative to a Category and a Peer Group, (iii) the advisory fees of comparable portfolios of other clients of the Adviser and the Subadviser, (iv) the Adviser’s financial  results and condition, including its and certain of its affiliates’ profitability from services performed for the Fund, ( v) breakpoints in the Fund’s and the Peer Group’s fees, and information about economies of scale, (vi) the Adviser’s and Subadviser’s record of compliance with applicable laws and regulations, with the Fund’s investment policies and restrictions, and with the applicable Code of Ethics, and the structure and responsibilities of the Adviser’s and Subadviser’s compliance department, (vii) the background and experience of senior management and investment professionals, and (viii) the nature, cost and character of advisory and non-investment management services provided by the Adviser and its affiliates and by the Subadviser.

The Board’s review and conclusions were based on a comprehensive consideration of all information presented to the Board and not the result of any single controlling factor. It was based on performance and other information as of December 31, 2005; facts may have changed between that date and the date of this shareholders report. The key factors considered by the Board and the conclusions reached are described below.

Nature, extent and quality of services

The Board considered the ability of the Adviser and the Subadviser, based on their resources, reputation and other attributes, to attract and retain qualified investment professionals, including research, advisory, and supervisory personnel. The Board further considered the compliance programs and compliance records of the Adviser and Subadviser. In addition, the Board took into account the administrative services provided to the Fund by the Adviser and its affiliates.

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

Fund performance

The Board considered the performance results for the Fund over various time periods

39

ended December 31, 2005. The Board also considered these results in comparison to the performance of the Category, as well as the Fund’s Peer Group and benchmark index. Morningstar determined the Category and the Peer Group for the Fund. The Board reviewed with a representative of Morningstar the methodology used by Morningstar to select the funds in the Category and the Peer Group.

The Board noted that the Fund’s performance during the periods under review was generally competitive with the performance of the Peer Group and Category medians, and its benchmark index, the Lehman Brothers Aggregate Bond Index. The Board noted that the Fund’s performance during the one-, five- and 10-year periods was lower than the performance of its benchmark index, but was higher than the performance of the Peer Group and Category medians. The Board viewed favorably that the performance of the Fund for the three-year period was higher than the median of its Category and Peer Group, and its benchmark index.

Investment advisory fee and subadvisory fee
rates and expenses

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

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

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

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

Profitability

The Board received and considered a detailed profitability analysis of the Adviser based on the Advisory Agreements, as well as on other relationships between the Fund and the Adviser and its affiliates, including the Subadviser. The Board concluded that, in light of the costs of providing investment management and other services to the Fund, the profits and other ancillary benefits reported by the Adviser were not unreasonable.

Economies of scale

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

40

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

Information about services to other clients

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

Other benefits to the Adviser

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

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

Other factors and broader review

As discussed above, the Board reviewed detailed materials received from the Adviser and Subadviser as part of the annual re-approval process. The Board also regularly reviews and assesses the quality of the services that the Fund receives throughout the year.

In this regard, the Board reviews reports of the Adviser and Subadviser at least quarterly, which include, among other things, fund performance reports and compliance reports. In addition, the Board meets with portfolio managers and senior investment officers at various times throughout the year.

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

¹ The Board previously considered information about the Subadvisory Agreement at the September and December 2005 Board meetings in connection with the Adviser’s reorganization.

41

For more information

The Fund’s proxy voting policies, procedures and records are available without charge, upon request:

By phone	On the Fund’s Web site	On the SEC’s Web site
1-800-225-5291	www.jhfunds.com/proxy	www.sec.gov
Trustees	Francis V. Knox, Jr.	Custodian
Ronald R. Dion, Chairman	Chief Compliance Officer	The Bank of New York
James R. Boyle†	Gordon M. Shone	One Wall Street
James F. Carlin	Treasurer	New York, NY 10286
Richard P. Chapman, Jr.*	John G. Vrysen
William H. Cunningham	Chief Financial Officer	Transfer agent
Charles L. Ladner*		John Hancock Signature
Dr. John A. Moore*	Investment adviser	Services, Inc.
Patti McGill Peterson*	John Hancock Advisers, LLC	1 John Hancock Way,
Steven R. Pruchansky	601 Congress Street	Suite 1000
*Members of the Audit Committee	Boston, MA 02210-2805	Boston, MA 02217-1000
†Non-Independent Trustee	Subadviser	Legal counsel
	MFC Global Investment	Kirkpatrick & Lockhart
Officers	Management (U.S.), LLC	Preston Gates Ellis LLP
Keith F. Hartstein	101 Huntington Avenue	1 Lincoln Street
President and	Boston, MA 02199	Boston, MA 02110-2950
Chief Executive Officer
Thomas M. Kinzler	Principal distributor
Secretary and	John Hancock Funds, LLC
Chief Legal Officer	601 Congress Street
	Boston, MA 02210-2805

The Fund’s investment objective, risks, charges and expenses are included in the prospectus and should be considered carefully before investing. For a prospectus, call your financial professional, call John Hancock Funds at 1-800-225-5291 or visit the Fund’s Web site at www.jhfunds.com. Please read the prospectus carefully before investing or sending money.

How to contact us
Internet	www.jhfunds.com
Mail	Regular mail:	Express mail:
	John Hancock	John Hancock
	Signature Services, Inc.	Signature Services, Inc.
	1 John Hancock Way, Suite 1000	Mutual Fund Image Operations
	Boston, MA 02217-1000	380 Stuart Street
		Boston, MA 02116
Phone	Customer service representatives	1-800-225-5291
	24-hour automated information	1-800-338-8080
	TDD line	1-800-554-6713

A listing of month-end portfolio holdings is available on our Web site, www.jhfunds.com. A more detailed portfolio holdings summary is available on a quarterly basis 60 days after the fiscal quarter on our Web site or upon request by calling 1-800-225-5291, or on the Securities and Exchange Commission’s Web site, www.sec.gov.

44

J O H N  H A N C O C K  F A M I L Y  O F  F U N D S

EQUITY	INTERNATIONAL
Balanced Fund	Greater China Opportunities Fund
Classic Value Fund	International Classic Value Fund
Classic Value Fund II	International Core Fund
Core Equity Fund	International Fund
Focused Equity Fund	International Growth Fund
Growth Fund
Growth Opportunities Fund	INCOME
Growth Trends Fund	Bond Fund
Intrinsic Value Fund	Government Income Fund
Large Cap Equity Fund	High Yield Fund
Large Cap Select Fund	Investment Grade Bond Fund
Mid Cap Equity Fund	Strategic Income Fund
Mid Cap Growth Fund
Multi Cap Growth Fund	TAX-FREE INCOME
Small Cap Equity Fund	California Tax-Free Income Fund
Small Cap Fund	High Yield Municipal Bond Fund
Small Cap Intrinsic Value Fund	Massachusetts Tax-Free Income Fund
Sovereign Investors Fund	New York Tax-Free Income Fund
U.S. Core Fund	Tax-Free Bond Fund
U.S. Global Leaders Growth Fund
Value Opportunities Fund	MONEY MARKET
	Money Market Fund
ASSET ALLOCATION & LIFESTYLE	U.S. Government Cash Reserve
Allocation Core Portfolio
Allocation Growth + Value Portfolio	CLOSED-END
Lifestyle Aggressive Portfolio	Bank & Thrift Opportunity
Lifestyle Balanced Portfolio	Financial Trends
Lifestyle Conservative Portfolio	Income Securities
Lifestyle Growth Portfolio	Investors Trust
Lifestyle Moderate Portfolio	Patriot Global Dividend
	Patriot Preferred Dividend
SECTOR	Patriot Premium Dividend I
Financial Industries Fund	Patriot Premium Dividend II
Health Sciences Fund	Patriot Select Dividend
Real Estate Fund	Preferred Income
Regional Bank Fund	Preferred Income II
Technology Fund	Preferred Income III
Technology Leaders Fund	Tax-Advantaged Dividend

For more complete information on any John Hancock Fund and an Open-End fund prospectus, which includes charges and expenses, call your financial professional, or John Hancock Funds at 1-800-225-5291 for Open-End fund information and 1-800-852-0218 for Closed-End fund information. Please read the Open-End fund prospectus carefully before investing or sending money.

1-800-225-5291
1-800-554-6713 (TDD)
1-800-338-8080 EASI-Line

www.jhfunds. com

Now available:electronicdelivery
www.jhfunds. com/edelivery

This report is for the information of the shareholders of John Hancock Bond Fund.

210SA 11/06
1/07

ITEM 2. CODE OF ETHICS.

As of the end of the period, November 30, 2006, the registrant has adopted a code of ethics, as defined in Item 2 of Form N-CSR, that applies to its Chief Executive Officer, Chief Financial Officer and Treasurer (respectively, the principal executive officer, the principal financial officer and the principal accounting officer, the “Senior Financial Officers”). A copy of the code of ethics is filed as an exhibit to this Form N-CSR.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

Not applicable at this time.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Not applicable at this time.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

Not applicable at this time.

ITEM 6. SCHEDULE OF INVESTMENTS.

Not applicable.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-
END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT
COMPANIES.

Not applicable.

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT
INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

Not applicable.

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

There were no material changes to previously disclosed John Hancock Funds - Administration Committee Charter and John Hancock Funds – Governance Committee Charter.

ITEM 11. CONTROLS AND PROCEDURES.

(a) Based upon their evaluation of the registrant's disclosure controls and procedures as conducted within 90 days of the filing date of this Form N-CSR, the registrant's principal executive officer and principal financial officer have concluded that those disclosure controls and procedures provide reasonable assurance that the material information required to be disclosed by the registrant on this report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.

(b) There were no changes in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-

year in the case of an annual report) that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting.

ITEM 12. EXHIBITS.

(a)(1) Code of Ethics for Senior Financial Officers is attached.

(a)(2) Separate certifications for the registrant's principal executive officer and principal financial officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940, are attached.

(b) Separate certifications for the registrant's principal executive officer and principal financial officer, as required by 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and Rule 30a-2(b) under the Investment Company Act of 1940, are attached. The certifications furnished pursuant to this paragraph are not deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section. Such certifications are not deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Registrant specifically incorporates them by reference.

(c)(1) Submission of Matters to a Vote of Security Holders is attached. See attached “John Hancock Funds – Governance Committee Charter”.

(c)(2) Contact person at the registrant.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

John Hancock Sovereign Bond Fund

By: /s/ Keith F. Hartstein
-------------------------------------
Keith F. Hartstein
President and Chief Executive Officer

Date: January 26, 2007

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By: /s/ Keith F. Hartstein
-------------------------------------
Keith F. Hartstein
President and Chief Executive Officer

Date: January 26, 2007

By: /s/ John G. Vrysen
-------------------------------------
John G. Vrysen
Chief Financial Officer

Date: January 26, 2007

EX-99.CERT

CERTIFICATION

I, Keith F. Hartstein, certify that:

1. I have reviewed this report on Form N-CSR of the John Hancock Sovereign Bond Fund (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

By: /s/ Keith F. Hartstein
-------------------------------------
Keith F. Hartstein
President and Chief Executive Officer

Date: January 26, 2007

CERTIFICATION

I, John G. Vrysen, certify that:

1. I have reviewed this report on Form N-CSR of the John Hancock Sovereign Bond Fund (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

By: /s/ John G. Vrysen
-------------------------------------
John G. Vrysen
Chief Financial Officer

Date: January 26, 2007

EX-99.906 CERT

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002

In connection with the attached Report of John Hancock Sovereign Bond Fund (the “registrant”) on Form N-CSR to be filed with the Securities and Exchange Commission (the "Report"), each of the undersigned officers of the registrant does hereby certify that, to the best of such officer's knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the registrant as of, and for, the periods presented in the Report.

/s/ Keith F. Hartstein
-------------------------------------
Keith F. Hartstein
President and Chief Executive Officer

Dated: January 26, 2007

/s/ John G. Vrysen
-------------------------------------
John G. Vrysen
Chief Financial Officer

Dated: January 26, 2007

A signed original of this written statement, required by Section 906, has been provided to the registrant and will be retained by the registrant and furnished to the Securities and Exchange Commission or its staff upon request.

EX-99.CODE ETH

JOHN HANCOCK FUNDS

CODE OF ETHICS

This is the code of ethics of:

• John Hancock Advisers, LLC

• MFC Global Investment Management (U.S.), LLC (formerly known as Sovereign Asset Management LLC)

• each open-end and closed-end fund advised by John Hancock Advisers, LLC

• John Hancock Funds, LLC

(together, called "John Hancock Funds" or "JHF")

1. General Principles

Each person within the John Hancock Funds organization is responsible for maintaining the very highest ethical standards when conducting our business.

This means that:

• You have a fiduciary duty at all times to place the interests of our clients and fund investors first.

• All of your personal securities transactions must be conducted consistent with the provisions of this code of ethics that apply to you and in such a manner as to avoid any actual or potential conflict of interest or other abuse of your position of trust and responsibility.

• You should not take inappropriate advantage of your position or engage in any fraudulent or manipulative practice (such as front-running or manipulative market timing) with respect to our clients' accounts or fund investors.

• You must treat as confidential any information concerning the identity of security holdings and financial circumstances of clients or fund investors.

• You must comply with all applicable federal securities laws.

• You must promptly report any violation of this code of ethics that comes to your attention to the Chief Compliance Officer of your company -see Appendix F.

The General Principles discussed above govern all conduct, whether or not

The General Principles discussed above govern all conduct, whether or not the conduct is also covered by more specific standards and procedures in this code of ethics. As described below under the heading "Interpretation and Enforcement", failure to comply with the code of ethics may result in disciplinary action, including termination of employment.

2. To Whom Does This Code Apply?

This code of ethics applies to you if you are a director, officer or employee of John Hancock Advisers, LLC, MFC Global Investment Management (U.S.), LLC, John Hancock Funds, LLC or a John Hancock open-end or closed-end fund registered under the Investment Company Act of 1940 (the "'40 Act") and advised by John Hancock Advisers, LLC ("John Hancock funds"). It also applies to you if you are trustee of the John Hancock Financial Trends Fund, Inc. or an employee of Manulife Financial Corporation or its subsidiaries who participates in making recommendations for, or receives information about, portfolio trades or holdings of the John Hancock funds or accounts. However, notwithstanding anything herein to the contrary, it does not apply to any trustees/directors of any open-end or closed-end funds advised by John Hancock Advisers, LLC who are not "interested persons" of such funds as defined in Section 2(a)(19) of the '40 Act, so long as they are subject to a separate Code of Ethics (each, an "Excluded Independent Director"). Also, in some cases only a limited number of provisions will apply to you, based on your access category. For example, only a limited number of provisions apply to directors of the John Hancock open-end funds and closed-end funds who are not Excluded Independent Directors-- see Appendix C for more information.

Please note that if a policy described below applies to you, it also applies to all accounts over which you have a beneficial interest. Normally, you will be deemed to have a beneficial interest in your personal accounts, those of a spouse, "significant other," minor children or family members sharing a household, as well as all accounts over which you have discretion or give advice or information. "Significant others" are defined for these purposes as two people who (1) share the same primary residence; (2) share living expenses; and (3) are in a committed relationship and intend to remain in the relationship indefinitely.

There are three main categories for persons covered by this code of ethics, taking into account their positions, duties and access to information regarding fund portfolio trades. You have been notified about which of these categories applies to you, based on the JHF Investment Compliance Department's understanding of your current role. If you have a level of investment access beyond your assigned category, or if you are promoted or change duties and as a result should more appropriately be included in a different category, it is your responsibility to notify the Chief Compliance Officer of your company.

The basic definitions of the three main categories, with examples, are provided below. The more detailed definitions of each category are attached as Appendix A.

“Investment Access” person		“Regular Access” person		“Non-Access” person
		A person who regularly has access
		to (1) fund portfolio trades or (2)		A person who does not regularly
A person who regularly participates		non-public information regarding		participate in a fund’s investment
in a fund’s investment process or		holdings or securities		process or obtain information
makes securities recommendations		recommendations to clients.		regarding fund portfolio trades
to clients.
			examples:		examples:
	examples:
		•	personnel in Investment	•	wholesalers
•	portfolio managers		Operations or Compliance
				•	inside wholesalers who
•	analysts	•	most FFM personnel		don’t attend investment
					“morning meetings”
•	traders	•	Technology personnel with
			access to investment	•	certain administrative
			systems		personnel
		•	attorneys and some legal
			administration personnel
		•	investment admin.
			personnel

3. Which Accounts and Securities are Subject to the Code's Personal Trading Restrictions?

If this code of ethics describes "Personal Trading Requirements" (i.e. John Hancock Mutual Fund reporting requirement and holding period, the preclearance requirement, the ban on short-term profits, the ban on IPOs, the disclosure of private placement conflicts and the reporting requirements) that apply to your access category as described above, then the requirements apply to trades for any account in which you have a beneficial interest. Normally, this includes your personal accounts, those of a spouse, "significant other," minor children or family members sharing your household, as well as all accounts over which you have discretion or give advice or information. This includes all brokerage accounts that contain securities (including brokerage accounts that only contain securities exempt from reporting). Accounts over which you have no direct or indirect influence or control are exempt. To prevent potential violations of this code of ethics, you are strongly encouraged to request clarification for any accounts that are in question.

These personal trading requirements do not apply to the following securities:

• Direct obligations of the U.S. government (e.g., treasury securities);

• Bankers' acceptances, bank certificates of deposit, commercial paper, and high quality short-term debt obligations, including repurchase agreements;

• Shares of open-end mutual funds registered under the '40 Act that are not advised or sub-advised by John Hancock Advisers, John Hancock Investment Management Services or another Manulife entity;

• Shares issued by money market funds; and

• Securities in accounts over which you have no direct or indirect influence or control.

Except as noted above, the Personal Trading Requirements apply to all securities, including:

• Stocks;

• Bonds;

• Government securities that are not direct obligations of the U.S. government, such as Fannie Mae or municipal securities;

• Closed-end funds;

• Options on securities, on indexes, and on currencies;

• Limited partnerships;

• Domestic unit investment trusts;

• Exchange traded funds;

• Non-US unit investment trusts and Non-US mutual funds;

• Private investment funds and hedge funds; and

• Futures, investment contracts or any other instrument that is considered a "security" under the Investment Advisers Act.

Different requirements apply to shares of open-end mutual funds that are advised or sub-advised by John Hancock Advisers, LLC or another Manulife entity--see the section below titled "John Hancock Mutual Funds Reporting Requirement and Holding Period".

4. Overview of Policies

	Investment Access	Regular Access	Non-Access Person
	Person	Person
General principles	yes	yes	yes
Policies outside the code
Conflict of interest policy	yes	yes	yes
Inside information policy	yes	yes	yes
Policy regarding dissemination of mutual fund	yes	yes	yes
portfolio information

Policies in the code
Restriction on gifts	yes	yes	yes
John Hancock mutual funds reporting	yes	yes	yes
requirement and holding period
Pre-clearance requirement	yes	yes	Limited
Heightened preclearance of securities	yes	yes	no
transactions for “Significant Personal
Positions”
Ban on short-term profits	yes	no	no
Ban on IPOs	yes	no	no
Disclosure of private placement conflicts	yes	no	no
Seven day blackout period	yes	no	no
Reports and other disclosures outside the code
Broker letter/duplicate confirms	yes	yes	yes
Reports and other disclosures in the code
Annual recertification form	yes	yes	yes
Initial/annual holdings reports	yes	yes	no
Quarterly transaction reports	yes	yes	no

5. Policies Outside of the Code of Ethics

John Hancock Funds have certain policies that are not part of the code of ethics, but are equally important. The two most important of these policies are (1) the Company Conflict and Business Practice Policy; and (2) the Inside Information Policy.

>> Company Conflict & Business Practice Policy

--------------------------------------------------------------------------------
Applies to: Investment Access Persons
Regular Access Persons
Non-Access Persons
--------------------------------------------------------------------------------

A conflict of interest occurs when your private interests interfere or could potentially interfere with your responsibilities at work. You must not place yourself or the company in a position of actual or potential conflict.

This Policy covers a number of important issues for officers and employees of John Hancock Funds. For example, you cannot serve as a director of any company without first obtaining the required written executive approval.

This Policy includes significant requirements to be followed if your personal securities holdings overlap with John Hancock funds investment activity. For example, if you or a member of your family own:

• a 5% or greater interest in a company, John Hancock Funds and its affiliates may not make any investment in that company;

• a 1% or greater interest in a company, you cannot participate in any decision by John Hancock Funds and its affiliates to buy or sell that company's securities;

• ANY interest in a company, you cannot recommend or participate in a decision by John Hancock Funds and its affiliates to buy or sell that company's securities unless your personal interest is fully disclosed at all stages of the investment decision.

(This is just a summary of these requirements--please read Section IV of the Company Conflict and Business Practices Policy for more detailed information.)

Other important issues in this Policy include:

• personal investments or business relationships

• misuse of inside information

• receiving or giving of gifts, entertainment or favors

• misuse or misrepresentation of your corporate position

• disclosure of confidential or proprietary information

• antitrust activities

• political campaign contributions and expenditures on public officials

>> Inside Information Policy and Procedures

--------------------------------------------------------------------------------
Applies to: Investment Access Persons
Regular Access Persons
Non-Access Persons
--------------------------------------------------------------------------------

The antifraud provisions of the federal securities laws generally prohibit persons with material non-public information from trading on or communicating the information to others. Sanctions for violations can include civil injunctions, permanent bars from the securities industry, civil penalties up to three times the profits made or losses avoided, criminal fines and jail sentences. While Investment Access persons are most likely to come in contact with material non-public information, the rules (and sanctions) in this area apply to all John Hancock Funds personnel and extend to activities both related and unrelated to your job duties.

The Inside Information Policy and Procedures covers a number of important issues, such as:

• The misuse of material non-public information

• The information barrier procedure

• The "restricted list" and the "watch list"

• broker letters and duplicate confirmation statements (see section 7 of this code of ethics)

>> Policy Regarding Dissemination of Mutual Fund Portfolio Information

--------------------------------------------------------------------------------
Applies to: Investment Access Persons
Regular Access Persons
Non-Access Persons
--------------------------------------------------------------------------------

Information about securities held in a mutual fund cannot be disclosed except in accordance with this Policy, which generally requires time delays of approximately one month and public posting of the information to ensure that it uniformly enters the public domain.

6. Policies in the Code of Ethics

>> Restriction on Gifts

--------------------------------------------------------------------------------
Applies to: Investment Access Persons
Regular Access Persons
Non-Access Persons
--------------------------------------------------------------------------------

You and your family cannot accept preferential treatment or favors (for example, gifts) from securities brokers or dealers or other organizations with which John Hancock Funds might transact business, except in accordance with the Company Conflict and Business Practice Policy. For the protection of both you and John Hancock Funds, the appearance of a possible conflict of interest must be avoided. You should exercise caution in any

instance in which business travel and lodging are paid for by someone other than John Hancock Funds. The purpose of this policy is to minimize the basis for any charge that you used your John Hancock Funds position to obtain for yourself opportunities which otherwise would not be offered to you. Please see the Company Conflict and Business Practice Policy's "Compensation and Gifts" section for additional details regarding restrictions on gifts and exceptions for "nominal value" gifts.

>> John Hancock Mutual Funds Reporting Requirement and Holding Period

--------------------------------------------------------------------------------
Applies to: Investment Access Persons
Regular Access Persons
Non-Access Persons
--------------------------------------------------------------------------------

You must follow the reporting requirement and the holding period requirement specified below if you purchase either:

• a "John Hancock Mutual Fund" (i.e. a '40 Act mutual fund that is advised by John Hancock Advisers, LLC, John Hancock Investment Management Services LLC or by another Manulife entity); or

• a "John Hancock Variable Product" (i.e. contracts funded by insurance company separate accounts that use one or more portfolios of John Hancock Trust). The John Hancock Mutual Funds reporting requirement and the holding period requirement are excluded for the money market funds and any dividend reinvestment, payroll deduction, systematic investment/withdrawal and/or other program trades.

Reporting Requirement: You must report your holdings and your trades in a John Hancock Mutual Fund or a John Hancock Variable Product. This is not a preclearance requirement--you can report your holdings after you trade by submitting duplicate confirmation statements to the JHF Investment Compliance Department. If you are an Investment Access Person or a Regular Access Person, you must also make sure that your holdings in a John Hancock fund or a John Hancock variable product are included in your Initial Holdings Report (upon hire) and Annual Holdings Report (each year end).

If you purchase a John Hancock Variable Product, you must notify the JHF Investment Compliance Department. The JHF Investment Compliance Department will then obtain directly from the contract administrators the personal trade and holdings information regarding the portfolios underlying the Manulife or John Hancock variable insurance contracts.

The JHF Investment Compliance Department will obtain personal securities trades and holdings information in the 401(k) plan for John Hancock funds directly from the plan administrators.

Holding Requirement: You cannot profit from the purchase and sale of a John Hancock Mutual Fund within 30 calendar days. The purpose of this policy is to address the risk, real or perceived, of manipulative market timing or other abusive practices involving short-term personal trading in the John Hancock Mutual Funds. Any profits realized on short-term trades must be surrendered by check payable to John Hancock Advisers, LLC and will be contributed by John Hancock Advisers, LLC to a charity, upon determination by the Compliance and Business Practices Committee. If you donate or gift a security, it is considered a sale. You may request an exemption from this policy for involuntary sales due to unforeseen corporate activity (such as a merger), or for sales due to hardship reasons (such as unexpected medical expenses) by sending an e-mail to the Chief Compliance Officer of your company.

>> Preclearance of Securities Transactions

--------------------------------------------------------------------------------
Applies to: Investment Access Persons
Regular Access Persons

Also, for a limited category of trades:
------------------------------------
Non-Access Persons
--------------------------------------------------------------------------------

Limited Category of Trades for Non-Access Persons: If you are a Non-Access person, you must preclear transactions in securities of any closed-end funds advised by John Hancock Advisers, LLC. A Non-Access person is not required to preclear other trades. However, please keep in mind that a Non-Access person is required to report securities transactions after every trade (even those that are not required to be precleared) by requiring your broker to submit duplicate confirmation statements, as described in section 7 of this code of ethics.

Investment Access persons and Regular Access persons: If you are an Investment Access person or Regular Access person, you must "preclear" (i.e.: receive advance approval of) any personal securities transactions in the categories described above in the section "Which Accounts and Securities are Subject to the Code's Personal Trading Restrictions". Due to this preclearance requirement, participation in investment clubs is prohibited.

Preclearance of private placements requires some special considerations--the decision will take into account whether, for example: (1) the investment opportunity should be reserved for John Hancock Funds clients; and (2) it is being offered to you because of your position with John Hancock Funds.

How to preclear: You preclear a trade by following the steps outlined in the preclearance procedures, which are attached as Appendix B. Please note that:

• You may not trade until clearance is received.

• Clearance approval is valid only for the date granted (i.e. the preclearance date and the trade date should be the same).

• A separate procedure should be followed for requesting preclearance of a private placement or a derivative, as detailed in Appendix B. The JHF Investment Compliance Department must maintain a five-year record of all clearances of private placement purchases by Investment Access persons, and the reasons supporting the clearances.

The preclearance policy is designed to proactively identify potential "problem trades" that raise front-running, manipulative market timing or other conflict of interest concerns (example: when an Investment Access person trades a security on the same day as a John Hancock fund).

Certain transactions in securities that would normally require pre-clearance are exempt from the pre-clearance requirement in the following situations; (1) shares are being purchased as part of an automatic investment plan; (2) shares are being purchased as part of a dividend reinvestment plan; or (3) transactions are being made in an account over which you have designated a third party as having discretion to trade (you must have approval from the Chief Compliance Officer to establish a discretionary account).

>> Heightened Preclearance of Securities Transactions for "Significant Personal Positions"

--------------------------------------------------------------------------------
Applies to: Investment Access Persons
Regular Access Persons
--------------------------------------------------------------------------------

If you are an Investment Access person or Regular Access person with a personal securities position that is worth $100,000 or more, this is deemed to be a "Significant Personal Position". This applies to any personal securities positions in the categories described above in the section "Which Accounts and Securities are Subject to the Code's Personal Trading Restrictions". Before you make personal trades to establish, increase or decrease a Significant Personal Position, you must notify either the Chief Fixed Income Officer or the Chief Equity Officer that (1) you intend to trade in a Significant Personal Position and (2) confirm that you are not aware of any clients for whom related trades should be completed first. You must receive their pre-approval to proceed--their approval will be based on their conclusion that your personal trade in a Significant Personal Position will not "front-run" any action that John Hancock Funds should take for a client. This Heightened Preclearance requirement is in addition to, not in place of, the regular preclearance requirement described above--you must also receive the regular preclearance before you trade.

>> Ban on Short-Term Profits

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Applies to: Investment Access Persons
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If you are an Investment Access person, you cannot profit from the purchase and sale (or sale and purchase) of the same (or equivalent) securities within 60 calendar days. This applies to any personal securities trades in the categories described above in the section "Which Accounts and Securities are Subject to the Code's Personal Trading Restrictions".

You may invest in derivatives or sell short provided the transaction period exceeds the 60-day holding period (30 days for '40 Act mutual funds advised by John Hancock Advisers, LLC, John Hancock Investment Management Services LLC or another Manulife entity). If you donate or gift a security, it is considered a sale.

The purpose of this policy is to address the risk, real or perceived, of front-running, manipulative market timing or other abusive practices involving short-term personal trading. Any profits realized on short-term trades must be surrendered by check payable to John Hancock Advisers, LLC and will be contributed by John Hancock Advisers, LLC to a charity, upon determination by the Compliance and Business Practices Committee.

You may request an exemption from this policy for involuntary sales due to unforeseen corporate activity (such as a merger), or for sales due to hardship reasons (such as unexpected medical expenses) from the JHF Investment Compliance Department.

>> Ban on IPOs

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Applies to: Investment Access Persons
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If you are an Investment Access person, you may not acquire securities in an initial public offering (IPO). You may not purchase any newly-issued securities until the next business (trading) day after the offering date. This applies to any personal securities trades in the categories described above in the section "Which Accounts and Securities are Subject to the Code's Personal Trading Restrictions".

There are two main reasons for this prohibition: (1) these purchases may suggest that persons have taken inappropriate advantage of their positions for personal profit; and (2) these purchases may create at least the appearance that an investment opportunity that should have been available to the John Hancock funds was diverted to the personal benefit of an individual employee.

You may request an exemption for certain investments that do not create a potential conflict of interest, such as: (1) securities of a mutual bank or mutual insurance company received as compensation in a demutualization and other similar non-voluntary stock acquisitions; (2) fixed rights offerings; or (3) a family member's participation as a form of employment compensation in their employer's IPO.

>> Disclosure of Private Placement Conflicts

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Applies to: Investment Access Persons
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If you are an Investment Access person and you own securities purchased in a private placement, you must disclose that holding when you participate in a decision to purchase or sell that same issuer's securities for a John Hancock fund. This applies to any private placement holdings in the categories described above in the section "Which Accounts and Securities are Subject to the Code's Personal Trading Restrictions". Private placements are securities exempt from SEC registration under section 4(2), section 4(6) or rules 504 -506 of the Securities Act of 1933.

The investment decision must be subject to an independent review by investment personnel with no personal interest in the issuer.

The purpose of this policy is to provide appropriate scrutiny in situations in which there is a potential conflict of interest.

>> Seven Day Blackout Period

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Applies to: Investment Access Persons
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If you are a portfolio manager (or were identified to the JHF Investment Compliance Department as part of a portfolio management team) you are prohibited from buying or selling a security within seven calendar days before and after that security is traded for a fund that you manage unless no conflict of interest exists in relation to that security (as determined by the Compliance and Ethics Committee).

In addition, all investment access persons are prohibited from knowingly buying or selling a security within seven calendar days before and after that security is traded for a John Hancock fund unless no conflict of interest exists in relation to that security. This applies to any personal securities trades in the categories described above in the section "Which Accounts and Securities are Subject to the Code's Personal Trading Restrictions". If a John Hancock fund trades in a security within seven calendar days before or after you trade in that security, you may be required to demonstrate that you did not know that the trade was being considered for that John Hancock fund.

You will be required to sell any security purchased in violation of this policy unless it is determined that no conflict of interest exists in relation to that security (as determined by the Compliance and Ethics Committee). Any profits realized on trades determined by the Compliance and Ethics Committee to be in violation of this policy must be surrendered by check payable to John Hancock Advisers, LLC and will be contributed by John Hancock Advisers, LLC to a charity.

7. Reports and Other Disclosures Outside the Code of Ethics

>> Broker Letter/Duplicate Confirm Statements

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Applies to: Investment Access Persons
Regular Access Persons
Non-Access Persons
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As required by the Inside Information Policy, you must inform your stockbroker that you are employed by an investment adviser or broker. Your broker is subject to certain rules designed to prevent favoritism toward your accounts. You may not accept negotiated commission rates that you believe may be more favorable than the broker grants to accounts with similar characteristics.

When a brokerage account is opened for which you have a beneficial interest, before any trades are made, you must:

• Notify the broker-dealer with which you are opening an account that you are a registered associate of John Hancock Funds;

• Ask the firm in writing to have duplicate written confirmations of any trade, as well as statements or other information concerning the account, sent to the John Hancock Funds Investment Compliance Department (contact: Fred Spring), 8th Floor, 101 Huntington Avenue, Boston, MA 02199; and

• Notify the JHF Investment Compliance Department, in writing, that you have an account before you place any trades.

This applies to any personal securities trades in the categories described above in the section "Which Accounts and Securities are Subject to the Code's Personal Trading Restrictions" as well as trades in John Hancock Mutual Funds and John Hancock Variable Products. The JHF Investment Compliance Department may rely on information submitted by your broker as part of your reporting requirements under this code of ethics.

8. Reports and Other Disclosures In the Code of Ethics

>> Initial Holdings Report and Annual Holdings Report

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Applies to: Investment Access Persons
Regular Access Persons
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You must file an initial holdings report within 10 calendar days after becoming an Investment Access person or a Regular Access person. The information must be current as of a date no more than 45 days prior to your becoming an Investment Access person or a Regular Access person.

You must also file an annual holdings report (as of December 31st) within 45 calendar days after the calendar year end. This applies to any personal securities holdings in the categories described above in the section "Which Accounts and Securities are Subject to the Code's Personal Trading Restrictions" as well as holdings in John Hancock Mutual Funds and John Hancock Variable Products.

Your reports must include:

• the title and type of security, and as applicable the exchange ticker symbol or CUSIP number, number of shares, and principal amount of each reportable security;

• the name of any broker, dealer or bank with which you maintain an account; and

• the date that you submit the report.

>> Quarterly Transaction Certification

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Applies to: Investment Access Persons
Regular Access Persons
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On a quarterly basis, Investment Access Persons and Regular Access persons are required to certify transactions in their brokerage accounts and the John Hancock Funds 401(k) Plan. Within 30 calendar days after the end of each calendar quarter you will be asked to log into the John Hancock Personal Trading and Reporting System to verify that the system has captured accurately all transactions for the preceding calendar quarter for accounts and trades which are required to be reported pursuant to the above noted section entitled "Which Accounts and Securities are Subject to the Code's Personal Trading Restrictions". Even if you have no transactions to report you will be asked to complete the certification.

For each transaction you must report the following information:

• the date of the transaction, the title, and as applicable the exchange ticker symbol or CUSIP number, interest rate and maturity date, number of shares, and principal amount of each reportable security involved;

• the nature of the transaction (i.e. purchase, sale or any other type of acquisition or disposition);

• the price at which the transaction was effected;

• the name of the broker, dealer or bank with or through which the transaction was effected; and

>> Quarterly Brokerage Account Certification

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Applies to: Investment Access Persons
Regular Access Persons
Non-Access Persons
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Each quarter, all Investment Access Persons, Regular Access Persons and Non-Access Persons will be required to provide a complete list of all brokerage accounts as described above in the section entitled "Which Accounts and Securities are Subject to the Code's Personal Trading Restrictions". This includes all brokerage accounts, including brokerage accounts that only contain securities exempt from reporting.

You will be asked to log into the John Hancock Personal Trading and Reporting System and verify that all brokerage accounts are listed and the following information is accurate:

• Account number;

• Account registration;

• Brokerage firm

>> Annual Certification

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Applies to: Investment Access Persons
Regular Access Persons
Non-Access Persons
Limited Access Persons
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At least annually (or additionally when the code of ethics has been significantly changed), you must provide a certification at a date designated by the Investment Compliance Department that:

(1) you have read and understood this code of ethics;

(2) you recognize that you are subject to its policies; and

(3) you have complied with its requirements.

You are required to make this certification to demonstrate that you understand the importance of these policies and your responsibilities under the code of ethics.

9. Limited Access Persons

There is an additional category of persons called "Limited Access" persons. This category consists only of directors of John Hancock Advisers, LLC, trustees of the John Hancock Financial Trends Fund, Inc. or an "interested person" of the John Hancock funds who:

(a) are not also officers of John Hancock Advisers, LLC; and

(b) do not ordinarily obtain information about fund portfolio trades

An "interested person" of the John Hancock funds has the meaning given to the term in Section 2(a)(19) of the '40 Act.

A more detailed definition of Limited Access persons, and a list of the policies that apply to them, is attached as Appendix C.

10. Subadvisers

A subadviser to a John Hancock fund has a number of code of ethics responsibilities, as described in Appendix D.

11. Reporting Violations

If you know of any violation of our code of ethics, you have a responsibility to promptly report it to the Chief Compliance Officer of your company. You should also report any deviations from the controls and procedures that safeguard John Hancock Funds and the assets of our clients. You can request confidential treatment of your reporting action.

12. Interpretation and Enforcement

This code of ethics cannot anticipate every situation in which personal interests may be in conflict with the interests of our clients and fund investors. You should be responsive to the spirit and intent of this code of ethics as well as its specific provisions.

When any doubt exists regarding any code of ethics provision or whether a conflict of interest with clients or fund investors might exist, you should

discuss the situation in advance with the Chief Compliance Officer of your company. The code of ethics is designed to detect and prevent fraud against clients and fund investors, and to avoid the appearance of impropriety. If you feel inequitably burdened by any policy, you should feel free to contact your Chief Compliance Officer or the Compliance and Business Practices Committee. Exceptions may be granted where warranted by applicable facts and circumstances. For example, exemption from some Personal Trading Requirements may be granted for transactions effected pursuant to an automatic investment plan.

To provide assurance that policies are effective, the JHF Investment Compliance Department will monitor and check personal securities transaction reports and certifications against fund portfolio transactions. Additional administration and recordkeeping procedures are described in Appendix E.

The Chief Compliance Officer of your company has general administrative responsibility for this code of ethics as it applies to the access persons of your company; an appropriate Compliance Department will administer procedures to review personal trading reports. The Compliance and Business Practices Committee of John Hancock Funds approves amendments to the code of ethics and dispenses employee/officer sanctions for violations of the code of ethics. The Boards of Trustees/Directors of the open-end mutual funds and closed-end funds also approve amendments to the code of ethics and dispenses sanctions for access persons of the Funds who are not employees/officers. Accordingly, the Investment Compliance Department will refer violations to the Compliance and Business Practices Committee and/or the Boards of Trustees/Directors of the John Hancock '40 Act funds, respectively, for review and appropriate action. The following factors will be considered when determining a fine or other disciplinary action:

• the person's position and function (senior personnel may be held to a higher standard);

• the amount of the trade;

• whether the funds or accounts hold the security and were trading the same day;

• whether the violation was by a family member.

• whether the person has had a prior violation and which policy was involved.

• whether the employee self-reported the violation.

You can request reconsideration of any disciplinary action by submitting a written request.

No less frequently than annually, a written report of all material violations and sanctions, significant conflicts of interest and other related issues will be submitted to the boards of directors of the John

Hancock funds for their review. Sanctions for violations could include (but are not limited to) fines, limitation of personal trading activity, suspension or termination of the violator's position with John Hancock Funds and/or a report to the appropriate regulatory authority.

13. Education of Employees

The JHF Investment Compliance Department will provide a paper copy or electronic version of the Code of Ethics (and any amendments) to each person subject to this Code of Ethics. The JHF Investment Compliance Department will also administer training of employees on the principles and procedures of the code of ethics.

Appendix A: Categories of Personnel

You have been notified about which of these categories applies to you, based on the JHF Investment Compliance Department's understanding of your current role. If you have a level of investment access beyond that category, or if you are promoted or change duties and as a result should more appropriately be included in a different category, it is your responsibility to immediately notify the Chief Compliance Officer of your company.

1) Investment Access person: You are an Investment Access person if you are an employee of John Hancock Advisers, LLC, MFC Global Investment Management (U.S.), LLC, a John Hancock fund, or Manulife Financial Corporation or its subsidiaries who, in connection with your regular functions or duties, makes or participates in making recommendations regarding the purchase or sale of securities by a John Hancock fund.

(examples: portfolio managers, analysts, traders)

2) Regular Access person: You are a Regular Access person if you do not fit the definition of Investment Access Person, but you do fit one of the following two sub-categories:

• You are an officer (vice president and higher) or director of John Hancock Advisers, LLC, MFC Global Investment Management (U.S.), LLC or a John Hancock fund, unless you qualify as a Limited Access person--please see Appendix C for this definition.)

• You are an employee of John Hancock Advisers, LLC, MFC Global Investment Management (U.S.), LLC, a John Hancock fund or Manulife Financial Corporation or its subsidiaries , or a director, officer (vice president and higher) or employee of John Hancock Funds, LLC who has access to nonpublic information regarding any clients' purchase or sale of securities, or nonpublic information regarding the portfolio holdings of any reportable fund or who is involved in making securities recommendations to clients, or who has access to such recommendations that are nonpublic.

(examples: Investment Operations personnel, Investment Compliance Department personnel, most Fund Financial Management personnel, investment administrative personnel, Technology Resources personnel with access to investment systems, attorneys and some legal administration personnel)

3) Non-Access person: You are a non-access person if you are an employee of John Hancock Advisers, LLC, MFC Global Investment Management (U.S.), LLC, John Hancock Funds, LLC or a John Hancock fund who does not fit the definitions of any of the other three categories (Investment Access Person, Regular Access Person or Limited Access Person). To be a non-access person, you must not have access to information regarding the purchase or sale of securities by a John Hancock fund or nonpublic information regarding the portfolio holdings in connection with your regular functions or duties.

(examples: wholesalers, inside wholesalers, certain administrative staff)

4) Limited Access Person: Please see Appendix C for this definition.

Appendix B: Preclearance Procedures

You should read the Code of Ethics to determine whether you must obtain a preclearance before you enter into a securities transaction. If you are required to obtain a preclearance, you should follow the procedures detailed below.

1. Pre-clearance for Public Securities including Derivatives, Futures, Options and Selling Short:

A request to pre-clear should be entered into the John Hancock Personal Trading & Reporting System.

The John Hancock Personal Trading & Reporting System is located under your Start Menu on your Desktop. It can be accessed by going to Programs/Personal Trading & Reporting/ Personal Trading & Reporting and by entering your Web Security Services user id and password.

If the John Hancock Personal Trading & Reporting System is not on your Desktop, please contact the HELP Desk at (617) 572-6950 for assistance.

The Trade Request Screen:

At times you may receive a message like "System is currently unavailable". The system is scheduled to be offline from 8:00 PM until 7:00 AM each night.

[GRAPHIC: Trade Request Screen]

Ticker/Security Cusip: Fill in either the ticker, cusip or security name with the proper information of the security you want to buy or sell. Then

click the [Lookup] button. Select one of the hyperlinks for the desired security, and the system will populate the proper fields Ticker, Security Cusip, Security Name and Security Type automatically on the Trade Request Screen.

If You Don't Know the Ticker, Cusip, or Security Name:

If you do not know the full ticker, you may type in the first few letters followed by an asterisk * and click the [Lookup] button. For example, let's say you want to buy some shares of Intel, but all you can remember of the ticker is that it begins with int, so you enter int* for Ticker. If any tickers beginning with int are found, they are displayed on a new screen. Select the hyperlink of the one you want, and the system will populate Security Cusip, Security Name and Security Type automatically on the Trade Request Screen. If you do not know the full cusip, you may type in the first few numbers followed by an asterisk * and click the [Lookup] button. For example, let's say you want to buy some shares of Microsoft, but all you can remember of the cusip is that it begins with 594918, so you enter 594918* for Ticker. If any cusips beginning with 594918 are found, they are displayed on a new screen. Select the hyperlink of the one you want, and the system will fill in Ticker, Security Name and Security Type automatically on the Trade Request Screen. If you do not know the Ticker but have an idea of what the Security Name is, you may type in an asterisk, a few letters of the name and an asterisk * and click the [Lookup] button. For example, let's say you want to buy some shares of American Brands, so you enter *amer* for Security Name. Any securities whose names have amer in them are displayed on a new screen, where you are asked to select the hyperlink of the one you want, and the system will fill in Ticker, Cusip and Security Type automatically on the Trade Request Screen.

Other Items on the Trade Request Screen:

Brokerage Account: Click on the dropdown arrow to the right of the Brokerage Account field to choose the account to be used for the trade.

Transaction Type: Choose one of the values displayed when you click the dropdown arrow to the right of this field.

Trade Date: You may only submit trade requests for the current date.

Note: One or more of these fields may not appear on the Request Entry screen if the information is not required. Required fields are determined by the Investment Compliance Department.

Click the [Submit Request] button to send the trade request to your Investment Compliance department.

Once you click the [Submit Request] button, you will be asked to confirm the values you have entered. Review the information and click the [Confirm] button if all the information is correct. After which, you will receive

immediate feedback in your web browser. (Note: We suggest that you print out this confirmation and keep it as a record of the trade you have made). After this, you can either submit another trade request or logout.

Attention Investment Access Persons: If the system identifies a potential violation of the Ban on Short Term Profits Rule, your request will be sent to the Investment Compliance Department for review and you will receive feedback via the e-mail system.

Starting Over:

To clear everything on the screen and start over, click the [Clear Screen] button.

Exiting Without Submitting the Trade Request:

If you decide not to submit the trade request before clicking the [Submit Request] button, simply exit from the browser by clicking the [X] button on the upper right or by pressing [Alt+F4], or by clicking the Logout hyperlink on the lower left side of the screen.

Ticker/Security Name Lookup Screen:

You arrive at this screen from the Trade Request Screen, where you've clicked the [Lookup] button (see above, "If You Don't Know the Ticker, Cusip, or Security Name"). If you see the security you want to trade, you simply select its corresponding hyperlink, and you will automatically return to the Trade Request Screen, where you finish making your trade request. If the security you want to trade is not shown, that means that it is not recognized by the system under the criteria you used to look it up. Keep searching under other names (click the [Return to Request] button) until you are sure that the security is not in the system. If you determine that the desired security is not in the system, please contact a member of the Investment Compliance department to add the security for you. Contacts are listed below:

Fred Spring (617) 375-4987

Adding Brokerage Accounts:

To access this functionality, click on the Add Brokerage Account hyperlink on the left frame of your browser screen. You will be prompted to enter the Brokerage Account Number, Brokerage Account Name, Date Opened, and Broker. When you click the [Create New Brokerage Account] button, you will receive a message that informs you whether the account was successfully created.

[GRAPHIC: Add Brokerage Account screen]

3. Pre-clearance for Private Placements and Initial Public Offerings:

You may request a preclearance of private placement securities or an Initial Public Offering by contacting Fred Spring via email (please "cc." Frank Knox on all such requests). Please keep in mind that the code of ethics prohibits Investment Access persons from purchasing securities in an initial public offering.

The request must include:

|_| the associate's name;

|_| the associate's John Hancock Funds' company;

|_| the complete name of the security;

|_| the seller (i.e the selling party if identified and/or the broker-dealer or placement agent) and whether or not the associate does business with those individuals or entities on a regular basis;

|_| the basis upon which the associate is being offered this investment opportunity;

|_| any potential conflict, present or future, with fund trading activity and whether the security might be offered as inducement to later recommend publicly traded securities for any fund or to trade through a particular broker-dealer or placement agent; and

|_| the date of the request.

Clearance of private placements or initial public offerings may be denied for any appropriate reason, such as if the transaction could create the appearance of impropriety. Clearance of initial public offerings will also be denied if the transaction is prohibited for a person due to his or her access category under the code of ethics.

Appendix C: Limited Access Persons

There are three types of Limited Access Persons--(1) Certain directors of the Adviser and (2) the trustees of the John Hancock Financial Trends Fund, Inc. and (3) the directors of the John Hancock open-end funds and closed-end funds who are not Excluded Independent Directors

(1) Certain Directors of the Adviser:

You are a Limited Access person if you are a director of John Hancock Advisers, LLC or MFC Global Investment Management (U.S.), LLC and you meet the three following criteria:

(a) you are not also an officer of John Hancock Advisers, LLC, MFC Global Investment Management (U.S.), LLC or a John Hancock fund;

(b) you do not have access to nonpublic information regarding any clients' purchase or sale of securities, or nonpublic information regarding the portfolio holdings of any John Hancock fund or account; and

(c) you are not involved in making securities recommendations to clients and do not have access to such recommendations that are nonpublic.

(examples: directors of John Hancock Advisers, LLC or MFC Global Investment Management (U.S.), LLC who are not involved in the daily operations of the adviser)

If you are a Limited Access Person who fits this definition, the following policies apply to your category. These policies are described in detail in the code of ethics.

• General principles

• Inside information policy and procedures

• Broker letter/Duplicate Confirms*

• Initial/annual holdings reports*

• Quarterly transaction reports*

• Annual recertification

• Preclearance requirement LIMITED: You only need to preclear any direct or indirect acquisition of beneficial ownership in any security in an initial public offering (an IPO) or in a limited offering (i.e. a private placement). To request preclearance of these securities, contact

Fredrick Spring at fspring@jhancock.com and/or Frank Knox at Frank_Knox@manulifeusa.com.

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*A Limited Access Person may complete this requirement under the code of
ethics of another Manulife/John Hancock adviser or fund by the applicable
regulatory deadlines and arrange for copies of the required information to
be sent to the John Hancock Funds Compliance Department.

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(2) The Independent Directors of the Funds: If you are a trustee of the John Hancock Financial Trends Fund, Inc. or a director to a John Hancock fund and an "interested person" of the fund within the meaning of the Investment Company Act of 1940, the following policies apply to your category. These policies are described in detail in the code of ethics.

• General principles

• Annual recertification

• Quarterly transaction report, but only if you knew (or should have known) that during the 15 calendar days before or after you trade a security, either:

(i) a John Hancock fund purchased or sold the same security, or

(ii) a John Hancock fund or John Hancock Advisers, LLC considered purchasing or selling the same security.

This policy applies to holdings in your personal accounts, those of a spouse, "significant other" or family members sharing your household, as well as all accounts over which you have discretion or give advice or information. If this situation occurs, it is your responsibility to contact the Chief Compliance Officer of your company and he will assist you with the requirements of the quarterly transaction report.

This means that the independent directors of the funds will not usually be required to file a quarterly transaction report--they are only required to file in the situation described above and only if they are not Excluded Independent Directors.

Appendix D: Subadvisers

Each subadviser to a John Hancock fund is subject to its own code of ethics, which must meet the requirements of Rule 17j-1 and Rule 204A-1.

Approval of Code of Ethics

Each subadviser to a John Hancock fund must provide a copy of its code of ethics to the trustees of the relevant John Hancock funds for approval initially and within 60 calendar days of any material amendment. The trustees will give their approval if they determine that the code:

• contains provisions reasonably necessary to prevent the subadviser's Access Persons (as defined in Rule 17j-1) from engaging in any conduct prohibited by Rule 17j-1;

• requires the subadviser's Access Persons to make reports to at least the extent required in Rule 17j-1(d);

• requires the subadviser to institute appropriate procedures for review of these reports by management or compliance personnel (as contemplated by Rule 17j-1(d)(3));

• provides for notification of the subadviser's Access Persons in accordance with Rule 17j-1(d)(4); and

• requires the subadviser's Access Persons who are Investment Personnel to obtain the pre-clearances required by Rule 17j-1(e);

Reports and Certifications

Each subadviser must provide an annual report and certification to John Hancock Advisers, LLC and the fund's trustees in accordance with Rule 17j-1(c)(2)(ii). The subadviser must also provide other reports or information that John Hancock Advisers, LLC may reasonably request.

Recordkeeping Requirements

The subadviser must maintain all records for its Access Persons as required by Rule 17j-1(f).

Appendix E: Administration and Recordkeeping

Adoption and Approval

The trustees of a John Hancock fund must approve the code of ethics of an adviser, subadviser or affiliated principal underwriter before initially retaining its services.

Any material change to a code of ethics of a John Hancock fund, John Hancock Funds, LLC, John Hancock Advisers, LLC or a subadviser to a fund must be approved by the trustees of the John Hancock funds, including a majority of trustees who are not interested persons, no later than six months after adoption of the material change.

Administration

No less frequently than annually, John Hancock Funds, LLC, John Hancock Advisers, LLC, each subadviser and each John Hancock fund will furnish to the trustees of each John Hancock fund a written report that:

• describes issues that arose during the previous year under the code of ethics or the related procedures, including, but not limited to, information about material code or procedure violations, and

• certifies that each entity has adopted procedures reasonably necessary to prevent its access persons from violating its code of ethics.

Recordkeeping

The Investment Compliance Department will maintain:

• a copy of the current code of ethics for John Hancock Funds, LLC, John Hancock Advisers, LLC, MFC Global Investment Management (U.S.), LLC, and each John Hancock fund, and a copy of each code of ethics in effect at any time within the past five years.

• a record of any violation of the code of ethics, and of any action taken as a result of the violation, for six years.

• a copy of each report made by an Access person under the code of ethics, for six years (the first two years in a readily accessible place).

• a record of all persons, currently or within the past five years, who are or were required to make reports under the code of ethics. This record will also indicate who was responsible for reviewing these reports.

• a copy of each code of ethics report to the trustees, for six years (the first two years in a readily accessible place).

• a record of any decision, and the reasons supporting the decision, to approve the acquisition by an Investment Access person of initial public offering securities or private placement securities, for six years.

Appendix F: Chief Compliance Officers

Entity	Chief Compliance Officer
John Hancock Advisers, LLC	Frank Knox
MFC Global Investment Management (U.S.), LLC	Frank Knox
Each open-end and closed-end fund advised	Frank Knox
by John Hancock Advisers, LLC
John Hancock Funds, LLC	Michael Mahoney

EX-99

JOHN HANCOCK FUNDS

GOVERNANCE COMMITTEE CHARTER

A. Composition. The Governance Committee shall be composed entirely of Trustees who are "independent" as defined in the rules of the New York Stock Exchange ("NYSE") and the NASDAQ Stock Market, Inc. ("NASDAQ") or any other exchange, as applicable, and are not "interested persons" as defined in the Investment Company Act of 1940 of any of the funds, or of any fund's investment adviser or principal underwriter (the "Independent Trustees") who are designated for membership from time to time by the Board of Trustees. The Chairman of the Board shall be a member of the Governance Committee.

B. Overview. The overall charter of the Governance Committee is to make recommendations to the Board on issues related to corporate governance applicable to the Independent Trustees and to the composition and operation of the Board, and to assume duties, responsibilities and functions to recommend nominees to the Board, together with such additional duties, responsibilities and functions as are delegated to it from time to time.

C. Specific Responsibilities. The Governance Committee shall have the following duties and powers, to be exercised at such times and in such manner as the Committee shall deem necessary or appropriate:

1. Except where the funds are legally required to nominate individuals recommended by others, to recommend to the Board of Trustees individuals for nomination to serve as Trustees.

2. To consider, as it deems necessary or appropriate, the criteria for persons to fill existing or newly created Trustee vacancies. The Governance Committee shall use the criteria and principles set forth in Annex A to guide its Trustee selection process.

3. To consider and recommend the amount of compensation to be paid by the funds to the Independent Trustees, including incremental amounts, if any, payable to Committee Chairmen, and to address compensation-related matters.

4. To consider and recommend the duties and compensation of the Chairman of the Board.

5. To consider and recommend changes to the Board regarding the size, structure, and composition of the Board.

6. To evaluate, from time to time, the retirement policies for the Independent Trustees.

7. To develop and recommend to the Board guidelines for corporate governance ("Corporate Governance Guidelines") for the funds that take into account the rules of the NYSE and any applicable law or regulation, and to periodically review and assess the Corporate Governance Guidelines and recommend any proposed changes to the Board for approval.

8. To monitor all expenditures of the Board or the Committees or the Independent Trustees not otherwise incurred and/or monitored by a particular Committee, including, but not limited to: legal, consulting, and D&O insurance costs; association dues, including Investment Company Institute membership dues; meeting expenditures and policies relating to

reimbursement of travel expenses and expenses associated with offsite meetings; expenses associated with Trustee attendance at educational or informational conferences; and publication expenses.

9. To consider, evaluate and make recommendations and necessary findings regarding independent legal counsel and any other advisers, experts or consultants, that may be engaged by the Board of Trustees, by the Trustees who are not "interested persons" as defined in the Investment Company Act of 1940 of any of the funds or any fund's investment adviser or principal underwriter, or by the Governance Committee, from time to time, other than as may be engaged directly by another Committee.

10. To periodically review the Board's committee structure and the charters of the Board's committees, and recommend to the Board of Trustees changes to the committee structure and charters as it deems appropriate.

11. To coordinate and administer an annual self-evaluation of the Board, which will include, at a minimum, a review of its effectiveness in overseeing the number of funds in the fund complex and the effectiveness of its committee structure.

12. To report its activities to Board of Trustees and to make such recommendations with respect to the matters described above and other matters as the Governance Committee may deem necessary or appropriate.

D. Additional Responsibilities. The Committee will also perform other tasks assigned to it from time to time by the Chairman of the Board or by the Board of Trustees, and will report findings and recommendations to the Board of Trustees, as appropriate.

E. Governance. One member of the Committee shall be appointed as chair. The chair shall be responsible for leadership of the Committee, including scheduling meetings or reviewing and approving the schedule for them, preparing agendas or reviewing and approving them before meetings, and making reports to the Board of Trustees, as appropriate.

F. Miscellaneous. The Committee shall meet as often as it deems appropriate, with or without management, as circumstances require. The Committee shall have the resources and authority appropriate to discharge its responsibilities, including the authority to retain special counsel and other advisers, experts or consultants, at the funds' expense, as it determines necessary to carry out its duties. The Committee shall have direct access to such officers of and service providers to the funds as it deems desirable.

G. Review. The Committee shall review this Charter periodically and recommend such changes to the Board of Trustees as it deems desirable.

ANNEX A

General Criteria

1. Nominees should have a reputation for integrity, honesty and adherence to high ethical standards.

2. Nominees should have demonstrated business acumen, experience and ability to exercise sound judgments in matters that relate to the current and long-term objectives of the funds and should be willing and able to contribute positively to the decision-making process of the funds.

3. Nominees should have a commitment to understand the funds, and the responsibilities of a trustee/director of an investment company and to regularly attend and participate in meetings of the Board and its committees.

4. Nominees should have the ability to understand the sometimes conflicting interests of the various constituencies of the funds, including shareholders and the management company, and to act in the interests of all shareholders.

5. Nominees should not have, nor appear to have, a conflict of interest that would impair their ability to represent the interests of all the shareholders and to fulfill the responsibilities of a director/trustee.

Application of Criteria to Existing Trustees

The renomination of existing Trustees should not be viewed as automatic, but should be based on continuing qualification under the criteria set forth above. In addition, the Governance Committee shall consider the existing Trustee's performance on the Board and any committee.

Review of Shareholder Nominations

Any shareholder nomination must be submitted in compliance with all of the pertinent provisions of Rule 14a-8 under the Securities Exchange Act of 1934 in order to be considered by the Governance Committee. In evaluating a nominee recommended by a shareholder, the Governance Committee, in addition to the criteria discussed above, may consider the objectives of the shareholder in submitting that nomination and whether such objectives are consistent with the interests of all shareholders. If the Board determines to include a shareholder's candidate among the slate of its designated nominees, the candidate's name will be placed on the funds' proxy card. If the Board determines not to include such candidate among its designated nominees, and the shareholder has satisfied the requirements of Rule 14a-8, the shareholder's candidate will be treated as a nominee of the shareholder who originally nominated the candidate. In that case, the candidate will not be named on the proxy card distributed with the funds' proxy statement.

As long as an existing Independent Trustee continues, in the opinion of the Governance Committee, to satisfy the criteria listed above, the Committee generally would favor the re-nomination of an existing Trustee rather than a new candidate. Consequently, while the Governance Committee will consider nominees recommended by shareholders to serve as trustees, the Governance Committee may only act upon such recommendations if there is a vacancy on the Board, or the Governance Committee determines that the selection of a new or additional Trustee is in the best interests of the fund. In the event that a vacancy arises or a change in Board membership is determined to be advisable, the Governance Committee will, in addition to any shareholder recommendations, consider candidates identified by other means, including candidates proposed by members of the Governance Committee. The Governance Committee may retain a consultant to assist the Committee in a search for a qualified candidate.

EX-99

JOHN HANCOCK FUNDS

PROXY VOTING POLICIES

John Hancock Advisers, LLC
MFC Global Investment Management (U.S.), LLC
(formerly known as Sovereign Asset Management LLC)
Proxy Voting Guidelines

We believe in placing our clients' interests first. Before we invest in a particular stock or bond, our team of portfolio managers and research analysts look closely at the company by examining its earnings history, its management team and its place in the market. Once we invest, we monitor all our clients' holdings, to ensure that they maintain their potential to produce results for investors.

As part of our active investment management strategy, we keep a close eye on each company we invest in. Routinely, companies issue proxies by which they ask investors like us to vote for or against a change, such as a new management team, a new business procedure or an acquisition. We base our decisions on how to vote these proxies with the goal of maximizing the value of our clients' investments.

Currently, John Hancock Advisers, LLC ("JHA") and MFC Global Investment Management (U.S.), LLC ("MFC") manage open-end funds, closed-end funds and portfolios for institutions and high-net-worth investors. Occasionally, we utilize the expertise of an outside asset manager by means of a subadvisory agreement. In all cases, JHA or MFC makes the final decision as to how to vote our clients' proxies. There is one exception, however, and that pertains to our international accounts. The investment management team for international investments votes the proxies for the accounts they manage. Unless voting is specifically retained by the named fiduciary of the client, JHA and MFC will vote proxies for ERISA clients.

In order to ensure a consistent, balanced approach across all our investment teams, we have established a proxy oversight group comprised of associates from our investment, operations and legal teams. The group has developed a set of policies and procedures that detail the standards for how JHA and MFC vote proxies. The guidelines of JHA have been approved and adopted by each fund client's board of trustees who have voted to delegate proxy voting authority to their investment adviser, JHA. JHA and MFC's other clients have granted us the authority to vote proxies in our advisory contracts or comparable documents.

JHA and MFC have hired a third party proxy voting service which has been instructed to vote all proxies in accordance with our established guidelines except as otherwise instructed.

In evaluating proxy issues, our proxy oversight group may consider information

from many sources, including the portfolio manager, management of a company presenting a proposal, shareholder groups, and independent proxy research services. Proxies for securities on loan through securities lending programs will generally not be voted, however a decision may be made to recall a security for voting purposes if the issue is material.

Below are the guidelines we adhere to when voting proxies. Please keep in mind that these are purely guidelines. Our actual votes will be driven by the particular circumstances of each proxy. From time to time votes may ultimately be cast on a case-by-case basis, taking into consideration relevant facts and circumstances at the time of the vote. Decisions on these matters (case-by-case, abstention, recall) will normally be made by a portfolio manager under the supervision of the chief investment officer and the proxy oversight group. We may abstain from voting a proxy if we conclude that the effect on our clients' economic interests or the value of the portfolio holding is indeterminable or insignificant.

Proxy Voting Guidelines

Board of Directors

We believe good corporate governance evolves from an independent board.

We support the election of uncontested director nominees, but will withhold our vote for any nominee attending less than 75% of the board and committee meetings during the previous fiscal year. Contested elections will be considered on a case by case basis by the proxy oversight group, taking into account the nominee's qualifications. We will support management's ability to set the size of the board of directors and to fill vacancies without shareholder approval but will not support a board that has fewer than 3 directors or allows for the removal of a director without cause.

We will support declassification of a board and block efforts to adopt a classified board structure. This structure typically divides the board into classes with each class serving a staggered term.

In addition, we support proposals for board indemnification and limitation of director liability, as long as they are consistent with corporate law and shareholders' interests. We believe that this is necessary to attract qualified board members.

Selection of Auditors

We believe an independent audit committee can best determine an auditor's qualifications.

We will vote for management proposals to ratify the board's selection of auditors, and for proposals to increase the independence of audit committees.

Capitalization

We will vote for a proposal to increase or decrease authorized common or preferred stock and the issuance of common stock, but will vote against a proposal to issue or convert preferred or multiple classes of stock if the board has unlimited rights to set the terms and conditions of the shares, or if the shares have voting rights inferior or superior to those of other shareholders.

In addition, we will support a management proposal to: create or restore preemptive rights; approve a stock repurchase program; approve a stock split or reverse stock split; and, approve the issuance or exercise of stock warrants

Acquisitions, mergers and corporate restructuring

Proposals to merge with or acquire another company will be voted on a case-by-case basis, as will proposals for recapitalization, restructuring, leveraged buyout, sale of assets, bankruptcy or liquidation. We will vote against a reincorporation proposal if it would reduce shareholder rights. We will vote against a management proposal to ratify or adopt a poison pill or to establish a supermajority voting provision to approve a merger or other business combination. We would however support a management proposal to opt out of a state takeover statutory provision, to spin-off certain operations or divisions and to establish a fair price provision.

Corporate Structure and Shareholder Rights

In general, we support proposals that foster good corporate governance procedures and that provide shareholders with voting power equal to their equity interest in the company.

To preserve shareholder rights, we will vote against a management proposal to restrict shareholders' right to: call a special meeting and to eliminate a shareholders' right to act by written consent. In addition, we will not support a management proposal to adopt a supermajority vote requirement to change certain by-law or charter provisions or a non-technical amendment to by-laws or a charter that reduces shareholder rights.

Equity-based compensation

Equity-based compensation is designed to attract, retain and motivate talented executives and independent directors, but should not be so significant as to materially dilute shareholders' interests.

We will vote against the adoption or amendment of a stock option plan if the:

• plan dilution is more than 10% of outstanding common stock,

• plan allows for non-qualified options to be priced at less than 85% of the fair market value on the grant date,

• company allows or has allowed the re-pricing or replacement of underwater options in the past fiscal year (or the exchange of underwater options).

With respect to the adoption or amendment of employee stock purchase plans or a stock award plan, we will vote against management if:

• the plan allows stock to be purchased at less than 85% of fair market value;

• this plan dilutes outstanding common equity greater than 10%;

• all stock purchase plans, including the proposed plan, exceed 15% of outstanding common equity.

Other Business

For routine business matters which are the subject of many proxy related questions, we will vote with management proposals to:

• change the company name;

• approve other business;

• adjourn meetings;

• make technical amendments to the by-laws or charters;

• approve financial statements;

• approve an employment agreement or contract.

Shareholder Proposals

Shareholders are permitted per SEC regulations to submit proposals for inclusion in a company's proxy statement. We will generally vote against shareholder proposals and in accordance with the recommendation of management except as

follows where we will vote for proposals:;

• calling for shareholder ratification of auditors;

• calling for auditors to attend annual meetings;

• seeking to increase board independence;

• requiring minimum stock ownership by directors;

• seeking to create a nominating committee or to increase the independence of the nominating committee;

• seeking to increase the independence of the audit committee.

Corporate and social policy issues

We believe that "ordinary business matters" are primarily the responsibility of management and should be approved solely by the corporation's board of directors.

Proposals in this category, initiated primarily by shareholders, typically request that the company disclose or amend certain business practices. We generally vote against business practice proposals and abstain on social policy issues, though we may make exceptions in certain instances where we believe a proposal has substantial economic implications.

John Hancock Advisers, LLC
MFC Global Investment Management (U.S.), LLC
(formerly known as Sovereign Asset Management LLC)
Proxy Voting Procedures

The role of the proxy voting service

John Hancock Advisers, LLC ("JHA") and MFC Global Investment Management (U.S.), LLC ("MFC") have hired a proxy voting service to assist with the voting of client proxies. The proxy service coordinates with client custodians to ensure that proxies are received for securities held in client accounts and acted on in a timely manner. The proxy service votes all proxies received in accordance with the proxy voting guidelines established and adopted by JHA and MFC. When it is unclear how to apply a particular proxy voting guideline or when a particular proposal is not covered by the guidelines, the proxy voting service will contact the proxy oversight group coordinator for a resolution.

The role of the proxy oversight group and coordinator

The coordinator will interact directly with the proxy voting service to resolve any issues the proxy voting service brings to the attention of JHA or MFC. When a question arises regarding how a proxy should be voted the coordinator contacts the firm's investment professionals and the proxy oversight group for a resolution. In addition the coordinator ensures that the proxy voting service receives responses in a timely manner. Also, the coordinator is responsible for identifying whether, when a voting issue arises, there is a potential conflict of interest situation and then escalating the issue to the firm's Executive Committee. For securities out on loan as part of a securities lending program, if a decision is made to vote a proxy, the coordinator will manage the return/recall of the securities so the proxy can be voted.

The role of mutual fund trustees

The boards of trustees of our mutual fund clients have reviewed and adopted the proxy voting guidelines of the funds' investment adviser, JHA. The trustees will periodically review the proxy voting guidelines and suggest changes they deem advisable.

Conflicts of interest

Conflicts of interest are resolved in the best interest of clients.

With respect to potential conflicts of interest, proxies will be voted in accordance with JHA's or MFC's predetermined policies. If application of the predetermined policy is unclear or does not address a particular proposal, a special internal review by the JHA Executive Committee or MFC Executive Committee will determine the vote. After voting, a report will be made to the client (in the case of an investment company, to the fund's board of trustees), if requested. An example of a conflict of interest created with respect to a proxy solicitation is when JHA or MFC must vote the proxies of companies that they provide investment advice to or are currently seeking to provide investment advice to, such as to pension plans.