-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, F7Wi/Jg5WPSgA9mZg8GdGgbAULTREViYhlY8QUK35EgZe1aRvBBF2F//vFp5PTgh KJJbvalmoFNvEZSPGRgZ6g== 0000950135-96-000059.txt : 19960104 0000950135-96-000059.hdr.sgml : 19960104 ACCESSION NUMBER: 0000950135-96-000059 CONFORMED SUBMISSION TYPE: N-30B-2 PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19951031 FILED AS OF DATE: 19960103 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HANCOCK JOHN SERIES INC CENTRAL INDEX KEY: 0000819300 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: MA FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-30B-2 SEC ACT: 1940 Act SEC FILE NUMBER: 811-05254 FILM NUMBER: 96500694 BUSINESS ADDRESS: STREET 1: 101 HUNTINGTON AVENUE STREET 2: STE 6000 CITY: BOSTON STATE: MA ZIP: 02199 BUSINESS PHONE: 7137512400 MAIL ADDRESS: STREET 1: 101 HUNTINGTON AVENUE STREET 2: 10TH FLOOR CITY: BOSTON STATE: MA ZIP: 02199 FORMER COMPANY: FORMER CONFORMED NAME: TRANSAMERICA SERIES INC DATE OF NAME CHANGE: 19940729 FORMER COMPANY: FORMER CONFORMED NAME: TRANSAMERICA SPECIAL SERIES INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: CRITERION SPECIAL SERIES INC DATE OF NAME CHANGE: 19890718 N-30B-2 1 JH MONEY MARKET FUND ANNUAL REPORT 1 JOHN HANCOCK FUNDS - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - MONEY MARKET FUND ANNUAL REPORT October 31, 1995 2 TRUSTEES Edward J. Boudreau, Jr. James F. Carlin* William H. Cunningham* Charles L. Ladner* Leo E. Linbeck* Patricia P. McCarter* Steven R. Pruchansky* Lt. Gen. Norman H. Smith, USMC (Ret.)* John P. Toolan* *Members of the Audit Committee OFFICERS Edward J. Boudreau, Jr. Chairman and Chief Executive Officer Robert G. Freedman Vice Chairman and Chief Investment Officer Anne C. Hodsdon President Thomas H. Drohan Senior Vice President and Secretary James B. Little Senior Vice President and Chief Financial Officer Susan S. Newton Vice President and Compliance Officer James J. Stokowski Vice President and Treasurer CUSTODIAN State Street Bank & Trust Company 225 Franklin Street Boston, Massachusetts 02110 TRANSFER AGENT John Hancock Investor Services Corporation P.O. Box 9116 Boston, Massachusetts 02205-9116 INVESTMENT ADVISER John Hancock Advisers, Inc. 101 Huntington Avenue Boston, Massachusetts 02199-7603 PRINCIPAL DISTRIBUTOR John Hancock Funds, Inc. 101 Huntington Avenue Boston, Massachusetts 02199-7603 LEGAL COUNSEL Hale and Dorr 60 State Street Boston, Massachusetts 02109 INDEPENDENTAUDITORS Ernst & Young LLP 200 Clarendon Street Boston, Massachusetts 02116 CHAIRMAN'S MESSAGE DEAR FELLOW SHAREHOLDERS: [1 1/4" x 1" photo of Edward J. Boudreau, Jr., Chairman and Chief Executive Officer, flush right, next to second paragraph.] Investors around the world have been watching Wall Street in awe for the better part of 1995. Through October, the Standard & Poor's 500-Stock Index, a widely-used barometer of stock performance, had grown by more than 25%. Investors who stayed in the market after a disappointing 1994 have been rewarded. On another street, Pennsylvania Avenue, one of the hot topics many people are watching is Medicare reform. While there's no clear-cut solution on the horizon, today's Medicare debate should serve as another wake-up call to all Americans about the need to have a financial plan and to save for retirement. Whether or not the government changes the way health-care benefits are allotted to senior citizens, the message is clear: your future security and well-being lies in your own hands -- not Uncle Sam's. We know you've heard it a hundred times. Pick up almost any financial periodical today, and you'll see cover stories on retirement. Many of them will perhaps scare you or make you think that the task of saving for retirement is just too daunting. But take heart. We don't believe that and neither do many financial experts. Yet retirement planning is not to be taken lightly. To live the way you want to -- the way you deserve to after all those years of hard work -- you need to plan and save now, on a regular basis, no matter what your other costs, no matter how small the amount, no matter what your current age. It may be easier if you start earlier, but it's never too late. Building a secure nest egg is indeed doable. Talk to your financial adviser about establishing your retirement planning roadmap, if you haven't already. And educate yourself by reading some of the many articles about how to save for retirement. Take control of your future by saving today. That way, when it comes time for retirement, you shouldn't have to think about any street but Easy Street. Sincerely, /s/ EDWARD J. BOUDREAU, JR. - --------------------------- EDWARD J. BOUDREAU, JR., CHAIRMAN AND CHIEF EXECUTIVE OFFICER 2 3 BY DAWN BAILLIE, PORTFOLIO MANAGER JOHN HANCOCK MONEY MARKET FUND Rising yields benefit money market funds in 1995 In November 1995, shareholders of John Hancock Cash Management Fund approved the merger of their fund with the John Hancock Money Market Fund. The merger was effective November 17, 1995. Throughout John Hancock Money Market Fund's fiscal year, money market yields have approached their highest levels in almost four years. This is a result of the Federal Reserve's seven interest-rate increases in 1994 and early 1995. Currently, the Federal Funds rate -- the interest rate banks charge each other for overnight loans and which serves as the benchmark for pricing most money market securities -- stands at 5.75%. With yields between 5% and 6%, money market investors are earning a real rate of return -- that is, the return after inflation -- of 2.5% to 3%. As a result, many investors have returned to money market funds in 1995, recognizing that these funds present more than just a "safe haven," but also are an attractive alternative to more risky stock and bond funds. On October 31, 1995, John Hancock Money Market Fund had a 7-day average yield of 4.78% for Class A shares and 4.03% for Class B shares. By comparison, the average taxable money fund had a 7-day average yield of 5.18%, according to IBC/Donoghue's Money Fund Report. [A 2 1/2" x 2 1/2" photo of Dawn Baillie, bottom center. Caption reads: "Dawn Baillie, Portfolio Manager."] MATURITY LENGTHENS After the last interest-rate hike in early February 1995, the market began to anticipate that the Fed would soon be done raising rates. That expectation, coupled with signs of a slowing economy and positive technical factors in the market, caused short-term rates to drop off slightly. In response, money fund managers began to take a slightly more aggressive approach by lengthening their average maturities. [CAPTION] "...money market yields have approached their highest levels in almost four years..." 3 4 JOHN HANCOCK FUNDS - MONEY MARKET FUND [Bar chart with heading "7-Day Yield" at top of left hand column. Under the heading is the footnote "As of October 31, 1995." The chart is scaled in increments of 2% from top to bottom with 6% at the top and 0% at the bottom. Within the chart, there are three solid bars. The first represents the 4.78% 7-day yield for John Hancock Money Management Fund, Class A. The second represents the 4.03% 7-day yield for John Hancock Money Management Fund, Class B. The third represents the 5.18% yield for the average taxable money fund. Footnote below reads: "The average money market fund is tracked by IBC/Donoghue's Money Fund Report."] We did this gradually throughout the year, extending from an average 25- to 30-day range in the last quarter of 1994 to 58 days by the end of October 1995. That was slightly longer than the 54-day maturity for the average taxable money market fund, mostly because we locked in some high-yielding securities before the Federal Reserve responded to a slower economy by lowering the Federal Funds rate to 5.75% in July. HIGHER QUALITY ISSUES The Fund actively manages its investments to assure that all of its money market securities are high quality. In that regard, we have temporarily stopped buying Japanese bank obligations until the Japanese government completes its bank bailout package. Once we're comfortable that Japan's banking crisis has been resolved, we'll resume investing in those banks that have the best loan quality and offer the Fund additional yield. Until then, we've increased our holdings in higher-quality domestic bank obligations, corporate obligations and commercial paper to keep our yield competitive. OUTLOOK We don't expect short-term rates to stray much from their current levels in the months ahead. While it's possible that the Fed could lower rates again, it probably wouldn't be by much more than a quarter of a percentage point. On the fiscal front, we're keeping our eyes on Washington and efforts to tackle the budget deficit. We're also following the great theoretical debate about whether the Federal Reserve should begin to ease credit now in anticipation of Congressional budget cuts. In theory, if the Fed believes that Congress will implement sizable budget cuts by year-end, it should begin lowering interest rates in advance to give the economy time to generate enough activity to offset any slowdown that spending cuts would cause. But therein lies the problem: it's just not clear what Congress will do. For now, we plan to stick to our current strategy of buying high-quality securities and maintaining an average maturity of 55-60 days. We will keep a close eye on the economy as we expect growth to remain mild and inflation to remain in check. If growth remains too sluggish and it looks like a deficit reduction plan may be put in place, the Fund may begin to lengthen its average maturity to protect against a rate decline. However, the Fund will have some interesting technical opportunities at the end of the year, when there is usually a strong demand for financing, which in turn drives up short-term yields. With this in mind, we will watch carefully for the best time to lock in higher yields. - -------------- The Fund is neither insured nor guaranteed by the U.S. government. There can be no assurance that the Fund will be able to maintain a net asset value of $1.00 per share. [CAPTION] "...we expect growth to remain mild and inflation to remain in check." 4 5 FINANCIAL STATEMENTS JOHN HANCOCK FUNDS - MONEY MARKET FUND THE STATEMENT OF ASSETS AND LIABILITIES IS THE FUND'S BALANCE SHEET AND SHOWS THE VALUE OF WHAT THE FUND OWNS, IS DUE AND OWES ON OCTOBER 31, 1995. YOU'LL ALSO FIND THE NET ASSET VALUE AS OF THAT DATE. Statement of Assets and Liabilities October 31, 1995 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ASSETS: Investments, in money market instruments, at value - Note C: Commercial paper (cost - $46,988,126) ....................... $46,988,126 Negotiable bank certificates of deposit (cost - $3,000,000) ....................................... 3,000,000 Corporate interest-bearing obligations (cost - $14,107,087) ...................................... 14,107,087 U.S. government obligations (cost - $10,000,000) ............ 10,000,000 Joint repurchase agreement (cost - $653,000) ................ 653,000 ----------- 74,748,213 Cash ......................................................... 590,823 Interest receivable .......................................... 397,572 Miscellaneous assets ......................................... 4,721 Prepaid expenses ............................................. 125,479 ----------- Total Assets ............................... 75,866,808 ------------------------------------------------------------ LIABILITIES: Payable for fund shares repurchased .......................... 550,000 Dividend payable ............................................. 8,764 Payable to John Hancock Advisers, Inc. and affiliates - Note B ....................................... 36,704 Accounts payable and accrued expenses ........................ 16,333 ----------- Total Liabilities .......................... 611,801 ------------------------------------------------------------ NET ASSETS: Capital paid-in .............................................. 75,255,007 ----------- Net Assets ................................. $75,255,007 ============================================================ NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE: (Based on net asset values and shares of beneficial interest outstanding - 3,500,000,000 shares authorized with $0.01 per share par value) Class A** - $20,942,062/20,942,062 ........................... $ 1.00 ============================================================================== Class B - $54,312,945/54,312,945 ............................. $ 1.00 ==============================================================================
** Class A shares commenced operations on September 12, 1995. THE STATEMENT OF OPERATIONS SUMMARIZES THE FUND'S INVESTMENT INCOME EARNED AND EXPENSES INCURRED IN OPERATING THE FUND. STATEMENT OF OPERATIONS Year ended October 31, 1995 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - INVESTMENT INCOME: Interest .................................................. $3,223,760 ---------- Expenses: Distribution/service fee - Note B Class A ** ............................................. 2,145 Class B ................................................ 516,163 Investment management fee - Note B ....................... 271,782 Transfer agent fee - Note B .............................. 95,135 Custodian fee ............................................ 45,512 Registration and filing fees ............................. 44,811 Auditing fee ............................................. 23,210 Printing ................................................. 12,729 Trustees' fees ........................................... 10,078 Shareholder service fee .................................. 7,461 Advisory board fee ....................................... 4,250 Legal fees ............................................... 3,262 Miscellaneous ............................................ 3,121 ---------- Total Expenses .......................... 1,039,659 ------------------------------------------------------------ Net Investment Income ................... 2,184,101 ------------------------------------------------------------ Net Increase in Net Assets Resulting from Operations ............... $2,184,101 ============================================================
SEE NOTES TO FINANCIAL STATEMENTS. 5 6 FINANCIAL STATEMENTS JOHN HANCOCK FUNDS - MONEY MARKET FUND STATEMENT OF CHANGES IN NET ASSETS - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
YEAR ENDED OCTOBER 31, -------------------------------- 1995 1994 ------------ ------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income ..................................... $ 2,184,101 $ 842,207 ------------ ------------ Distributions to Shareholders: Dividends from net investment income Class A** - ($0.0066 and none per share, respectively) ... (71,384) -- Class B - ($0.0401 and $0.0180 per share, respectively) .. (2,112,717) (842,207) ------------ ------------ Total Distributions to Shareholders .................... (2,184,101) (842,207) ------------ ------------ FROM FUND SHARE TRANSACTIONS-- NET* ......................... 16,889,418 26,819,423 ------------ ------------ NET ASSETS: Beginning of year ......................................... 58,365,589 31,546,166 ------------ ------------ End of year ............................................... $ 75,255,007 $ 58,365,589 ============ ============
* ANALYSIS OF FUND SHARE TRANSACTIONS:
YEAR ENDED OCTOBER 31, ------------------------------- 1995 1994 ------------- ------------- CLASS A ** Shares sold....................................................... $ 47,205,231 -- Shares issued to shareholders in reinvestment of distributions.... 55,602 -- ------------- ------------- 47,260,833 -- Less shares repurchased........................................... (26,318,771) -- ------------- ------------- Net increase...................................................... 20,942,062 -- ============= ============= CLASS B Shares sold....................................................... 223,741,024 $237,416,247 Shares issued to shareholders in reinvestment of distributions.... 1,684,942 683,416 ------------- ------------- 225,425,966 238,099,663 Less shares repurchased........................................... (229,478,610) (211,280,240) ------------- ------------- Net increase (decrease)........................................... $ (4,052,644) $26,819,423 ============= =============
** Class A shares commenced operations on September 12, 1995. THE STATEMENT OF CHANGES IN NET ASSETS SHOWS HOW THE VALUE OF THE FUND'S NET ASSETS HAS CHANGED SINCE THE END OF THE PREVIOUS PERIOD. THE DIFFERENCE REFLECTS EARNINGS LESS EXPENSES, DISTRIBUTIONS PAID TO SHAREHOLDERS AND ANY INCREASE OR DECREASE IN MONEY SHAREHOLDERS INVESTED IN THE FUND. THE FOOTNOTE ILLUSTRATES THE NUMBER OF FUND SHARES SOLD, REINVESTED AND REDEEMED DURING THE LAST TWO PERIODS. SEE NOTES TO FINANCIAL STATEMENTS. 6 7 FINANCIAL STATEMENTS JOHN HANCOCK FUNDS - MONEY MARKET FUND FINANCIAL HIGHLIGHTS Selected data for a share of beneficial interest outstanding throughout the period indicated, investment returns, key ratios and supplemental data are as follows: - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
FOR THE PERIOD SEPTEMBER 12, 1995 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1995 ------------------ CLASS A PER SHARE OPERATING PERFORMANCE Net Asset Value, Beginning of Period............................. $ 1.00 -------- Net Investment Income............................................ 0.01 -------- Less Distributions: Dividends from Net Investment Income............................. (0.01) -------- Net Asset Value, End of Period................................... $ 1.00 ======== Total Investment Return at Net Asset Value (d)................... 0.64%(e) RATIOS AND SUPPLEMENTAL DATA Net Assets, End of Period (000's omitted)........................ $ 20,942 Ratio of Expenses to Average Net Assets.......................... 1.07%(*) Ratio of Net Investment Income to Average Net Assets............. 4.94%(*)
YEAR ENDED OCTOBER 31, -------------------------------------------------- 1995(b) 1994 1993 1992 1991 ------- ------- ------- ------- ------- CLASS B PER SHARE OPERATING PERFORMANCE Net Asset Value, Beginning of Period ............................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ------- ------- ------- ------- ------- Net Investment Income ........................................... 0.04 0.02 0.01 0.02 0.05 ------- ------- ------- ------- ------- Less Distributions: Dividends from Net Investment Income ............................ (0.04) (0.02) (0.01) (0.02) (0.05) ------- ------- ------- ------- ------- Net Asset Value, End of Period .................................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======= ======= ======= ======= ======= Total Investment Return at Net Asset Value (d) .................. 4.07% 1.87% 0.85% 1.73% 4.61% Total Adjusted Investment Return at Net Asset Value (a) (c) ..... -- -- -- -- 4.49% RATIOS AND SUPPLEMENTAL DATA Net Assets, End of Period (000's omitted) ....................... $54,313 $58,366 $31,546 $31,480 $20,763 Ratio of Expenses to Average Net Assets ......................... 1.92% 2.06% 2.44% 2.47% 2.11% Ratio of Adjusted Expenses to Average Net Assets (a) ............ -- -- -- -- 2.23%(a) Ratio of Net Investment Income to Average Net Assets ............ 3.96% 1.97% 0.85% 1.69% 4.57% Ratio of Adjusted Net Investment Income to Average Net Assets (a) -- -- -- -- 4.45%(a) * On an annualized basis (a) On an unreimbursed basis without expense reduction. (b) On December 22, 1994 John Hancock Advisers, Inc. became the Investment Adviser of the Fund. (c) An estimated total return calculation takes into consideration fees and expenses waived or borne by the adviser during the periods shown. (d) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charges. (e) Not annualized.
SEE NOTES TO FINANCIAL STATEMENTS. 7 8 FINANCIAL STATEMENTS JOHN HANCOCK FUNDS - MONEY MARKET FUND SCHEDULE OF INVESTMENTS October 31, 1995 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - THE SCHEDULE OF INVESTMENTS IS A COMPLETE LIST OF ALL SECURITIES OWNED BY MONEY MARKET FUND ON OCTOBER 31, 1995. IT'S DIVIDED INTO FIVE TYPES OF SHORT-TERM INVESTMENTS. MOST CATEGORIES OF SHORT-TERM INVESTMENTS ARE FURTHER BROKEN DOWN BY INDUSTRY GROUP.
PAR VALUE INTEREST QUALITY (000'S ISSUER, DESCRIPTION RATE RATINGS(*) OMITTED) VALUE - ------------------- -------- ---------- --------- ----- COMMERCIAL PAPER AUTOMOTIVE (2.92%) Ford Motor Credit Co., 11-03-95 ......................... 5.730% Tier 1 $1,000 $ 999,682 General Motors Acceptance Corp., 11-03-95 ......................... 5.800 Tier 1 1,200 1,199,613 ---------- 2,199,295 ---------- BANKING - FOREIGN (2.64%) Swedish Export Credit Corp., 12-05-95 ......................... 5.750 Tier 1 2,000 1,989,139 ---------- BROKER SERVICES (11.92%) Bear Stearns Cos., Inc., 11-02-95 ......................... 5.760 Tier 1 400 399,936 Bear Stearns Cos., Inc., 11-22-95 ......................... 5.750 Tier 1 1,700 1,694,298 Goldman Sachs Group, L.P., 11-02-95 ......................... 5.720 Tier 1 2,000 1,999,682 Goldman Sachs Group, L.P., 11-20-95 ......................... 5.730 Tier 1 1,300 1,296,069 Merrill Lynch & Co., Inc., 11-06-95 ......................... 5.730 Tier 1 800 799,363 Merrill Lynch & Co., Inc., 11-15-95 ......................... 5.750 Tier 1 485 483,916 Merrill Lynch & Co., Inc., 11-20-95 ......................... 5.750 Tier 1 2,300 2,293,020 ---------- 8,966,284 ---------- BUILDING SUPPLIES (0.66%) Halifax Building Society, 11-06-95 ......................... 5.750 Tier 1 500 499,601 ---------- FINANCE (8.58%) American Honda Finance Corp., 11-01-95 ......................... 5.800 Tier 1 900 900,000
SEE NOTES TO FINANCIAL STATEMENTS. 8 9
PAR VALUE INTEREST QUALITY (000'S ISSUER, DESCRIPTION RATE RATINGS(*) OMITTED) VALUE - ------------------- -------- ---------- --------- ----- FINANCE (CONTINUED) American Honda Finance Corp., 11-06-95 ............................. 5.800% Tier 1 $ 700 $ 699,436 American Honda Finance Corp., 11-15-95 ............................. 5.800 Tier 1 1,300 1,297,068 American Honda Finance Corp., 12-08-95 ............................. 5.780 Tier 1 1,600 1,590,495 General Electric Capital Corp., 11-14-95 ............................. 5.730 Tier 1 1,500 1,496,896 International Business Machines, 11-13-95 ............................. 5.730 Tier 1 470 469,102 ---------- 6,452,997 ---------- MORTGAGE BANKING (5.57%) Countrywide Funding Corp., 11-01-95 ............................. 5.770 Tier 1 1,000 1,000,000 Countrywide Funding Corp., 11-10-95 ............................. 5.780 Tier 1 1,300 1,298,122 Countrywide Funding Corp., 11-17-95 ............................. 5.800 Tier 1 1,900 1,895,102 ---------- 4,193,224 ---------- RETAIL STORES (11.54%) Melville Corp., 11-13-95 ............................. 5.740 Tier 1 3,000 2,994,260 Melville Corp., 11-13-95 ............................. 5.750 Tier 1 500 499,042 Melville Corp., 11-16-95 ............................. 5.770 Tier 1 700 698,317 Sears Roebuck Acceptance Corp., 11-06-95 ............................. 5.760 Tier 1 1,200 1,199,040 Sears Roebuck Acceptance Corp., 11-10-95 ............................. 5.750 Tier 1 2,700 2,696,119 Sears Roebuck Acceptance Corp., 12-06-95 ............................. 5.750 Tier 1 600 596,646 ---------- 8,683,424 ---------- UTILITIES - ELECTRIC (10.61%) Pacific Gas and Electric Co., 11-07-95 ............................. 5.720 Tier 1 500 499,523 Pennsylvania Power & Light Co., 11-07-95 ............................. 5.850 Tier 1 1,000 999,025 Pennsylvania Power & Light Co., 11-08-95 ............................. 5.850 Tier 1 2,000 1,997,725 Public Service Electric and Gas Co., 11-09-95 ............................. 5.770 Tier 1 2,200 2,197,179
SEE NOTES TO FINANCIAL STATEMENTS. 9 10
PAR VALUE INTEREST QUALITY (000'S ISSUER, DESCRIPTION RATE RATINGS(*) OMITTED) VALUE - ------------------- -------- ---------- --------- ----- UTILITIES - ELECTRIC (CONTINUED) Public Service Electric and Gas Co., 11-15-95.............................. 5.750% Tier 1 $ 1,400 $ 1,396,870 Public Service Electric and Gas Co., 11-28-95.............................. 5.760 Tier 1 900 896,112 ----------- 7,986,434 ----------- UTILITIES - TELEPHONE (8.00%) American Telephone & Telegraph Co., 11-01-95.............................. 5.860 Tier 1 220 220,000 American Telephone & Telegraph Co., 11-13-95.............................. 5.720 Tier 1 3,000 2,994,280 GTE Northwest Inc., 11-15-95.............................. 5.720 Tier 1 1,010 1,007,753 GTE Northwest Inc., 11-16-95.............................. 5.740 Tier 1 1,800 1,795,695 ----------- 6,017,728 ----------- TOTAL COMMERCIAL PAPER (Cost $46,988,126) (62.44%) 46,988,126 ------- ----------- NEGOTIABLE BANK CERTIFICATES OF DEPOSIT BANKING (3.98%) Morgan Guaranty Trust Co., NY 10-30-96.............................. 6.000 Tier 1 3,000 3,000,000 ----------- TOTAL NEGOTIABLE BANK CERTIFICATES OF DEPOSIT (Cost $3,000,000) (3.98%) 3,000,000 ------- ----------- CORPORATE INTEREST BEARING OBLIGATIONS AUTOMOTIVE (2.95%) General Motors Acceptance Corp., 04-04-96.............................. 8.800 Tier 1 1,200 1,212,102 General Motors Acceptance Corp., 04-10-96.............................. 8.700 Tier 1 1,000 1,010,235 ----------- 2,222,337 ----------- BANKING (6.84%) NationsBank of Texas, 08-28-96.............................. 6.150 Tier 1 2,300 2,300,000 NBD Bancorp, Inc., 06-03-96.............................. 6.125 Tier 1 250 250,115 PNC Bank NA, 09-18-96.............................. 5.650 Tier 1 2,600 2,595,663 ----------- 5,145,778 -----------
SEE NOTES TO FINANCIAL STATEMENTS. 10 11
PAR VALUE INTEREST QUALITY (000'S ISSUER, DESCRIPTION RATE RATINGS(*) OMITTED) VALUE - ------------------- -------- ---------- --------- ----- CHEMICAL (2.67%) duPont (E.I.) de Nemours & Co., 12-15-95.................................... 8.480% Tier 1 $ 2,000 $ 2,005,493 ----------- DIVERSIFIED (1.34%) General Electric Co., 05-01-96.................................... 7.875 Tier 1 1,000 1,009,754 ----------- FINANCE (4.95%) Associates Corp. of North America, 03-01-96.................................... 8.800 Tier 1 2,700 2,724,233 General Electric Capital Corp., 11-15-95.................................... 5.250 Tier 1 1,000 999,492 ----------- 3,723,725 ----------- TOTAL CORPORATE INTEREST BEARING OBLIGATIONS (Cost $14,107,087) (18.75%) 14,107,087 ------- ----------- U. S. GOVERNMENT OBLIGATIONS GOVERNMENTAL - U. S. AGENCIES (13.29%) Federal Farm Credit Bank, 11-01-95.................................... 5.730 Tier 1 10,000 10,000,000 ----------- TOTAL U. S. GOVERNMENT OBLIGATIONS (Cost $10,000,000) (13.29%) 10,000,000 ------- ----------- JOINT REPURCHASE AGREEMENT Investment in a joint repurchase agreement transaction with SBC Capital Markets - Dated 10-31-95, Due 11-01-95 (secured by U.S. Treasury Bond, 8.750% Due 05-15-17, and by U.S. Treasury Note, 5.750% Due 09-30-97) Note A........... 5.890 653 653,000 ----------- TOTAL JOINT REPURCHASE AGREEMENT (Cost $653,000) (0.87%) 653,000 ------- ----------- TOTAL INVESTMENTS (99.33%) $74,748,213 ======= ===========
* Quality ratings indicate the categories of eligible securities, as defined by Rule 2a-7 of the U.S. Securities and Exchange Commission, owned by the Fund. The percentage shown for each investment category is the total value of that category expressed as a percentage of total net assets of the Fund. SEE NOTES TO FINANCIAL STATEMENTS. 11 12 NOTES TO FINANCIAL STATEMENTS JOHN HANCOCK FUNDS - MONEY MARKET FUND NOTE A -- ACCOUNTING POLICIES John Hancock Series, Inc. (Corporation) is a diversified, open-end management investment company, registered under the Investment Company Act of 1940, as amended. The Corporation consists of six series portfolios: John Hancock Money Market Fund (the "Fund"), John Hancock Emerging Growth Fund, John Hancock Global Resources Fund, John Hancock High Yield Tax Free Fund, John Hancock High Yield Bond Fund and John Hancock Government Income Fund (collectively, the "Funds"). The Board of Directors may authorize the creation of additional Funds from time to time to satisfy various investment objectives. Effective December 22, 1994 (see Note B), the Corporation and Funds changed names by replacing the word Transamerica with John Hancock. Prior to September 12, 1995, the Fund was known as John Hancock Money Market Fund B. The Board of Directors have authorized the issuance of multiple classes of shares of the Fund, designated as Class A, Class B and Class S shares. The shares of each class represent an interest in the same portfolio of investments of the Fund and have equal rights to voting, redemptions, dividends, and liquidation, except that certain expenses subject to the approval of the Board of Directors, may be applied differently to each class of shares in accordance with current regulations of the Securities and Exchange Commission. Shareholders of a class which bears distribution/service expenses under terms of a distribution plan have exclusive voting rights to such distribution plan. No Class S shares had been issued as of October 31, 1995. Significant accounting policies of the Fund are as follows: VALUATION OF INVESTMENTS The Board of Directors have determined appropriate methods for valuing portfolio securities. Accordingly, portfolio securities are valued at amortized cost, in accordance with Rule 2a-7 of the Investment Company Act of 1940, which approximates market value. The amortized cost method involves valuing a security at its cost on the date of purchase and thereafter assuming a constant amortization to maturity of the difference between the principal amount due at maturity and the cost of the security to the Fund. Interest income on certain portfolio securities such as negotiable bank certificates of deposit and interest bearing notes is accrued daily and included in interest receivable. 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, Inc. (the "Adviser"), a wholly-owned subsidiary of The Berkeley Financial Group, may participate in a joint repurchase agreement transaction. Aggregate cash balances are invested in one or more repurchase agreements, whose underlying securities are obligations of the U.S. government and/or its agencies. The Fund's custodian bank receives delivery of the underlying securities for the joint account on the Fund's behalf. The Adviser is responsible for ensuring that the agreement is fully collateralized at all times. INVESTMENT TRANSACTIONS Investment transactions are recorded as of the date of purchase, sale or maturity. Net realized gains and losses on sales of investments are determined on the identified cost basis for both financial reporting and federal income tax purposes. FEDERAL INCOME TAXES The Fund's policy is to comply with the requirements of the Internal Revenue Code that are applicable to regulated investment companies. It will not be subject to Federal income tax on taxable earnings which are distributed to shareholders. DIVIDENDS The Fund records all distributions to shareholders from net investment income on the ex-dividend date. Such distributions are determined in conformity with income tax regulations, which may differ from generally accepted accounting principles. Dividends paid by the Fund with respect to each class of shares will be calculated in the same manner, at the same time and will be in the same amount, except for the effect of expenses that may be applied differently to each class as explained previously. EXPENSES The majority of the expenses of the Corporation are directly identifiable to an individual Fund. Expenses which 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 Fund. CLASS ALLOCATIONS Income, common expenses and realized and unrealized gains (losses) are calculated at the Fund level and allocated daily 12 13 NOTES TO FINANCIAL STATEMENTS JOHN HANCOCK FUNDS - MONEY MARKET FUND to each class of shares based on the appropriate net assets of the respective classes. Distribution/service fees, if any, are calculated daily at the class level based on the appropriate net assets of each class and the specific expense rate(s) applicable to each class. NOTE B -- MANAGEMENT FEE, ADMINISTRATIVE SERVICES AND TRANSACTIONS WITH AFFILIATES AND OTHERS On December 22, 1994, the Adviser became the investment adviser for the Fund with approval of the Board of Directors and shareholders of the Fund. The Fund's former investment manager was Transamerica Fund Management Company ("TFMC"). Under the present investment management contract, the Fund pays a monthly management fee to the Adviser for a continuous investment program equivalent, on an annual basis, to the sum of (a) 0.50% of the first $500,000,000 of the Fund's average daily net asset value, (b) 0.425% of the next $250,000,000 and (c) 0.375% of the Fund's average daily net asset value in excess of $750,000,000. This fee structure is consistent with the former agreement with TFMC. For the period ended October 31, 1995, the advisory fee earned by the Adviser and TFMC amounted to $221,171 and $50,611, respectively, resulting in a total fee of $271,782. TFMC, for its respective period, provided administrative services to the Fund pursuant to an administrative service agreement through January 16, 1995 on which day the agreement was terminated. In the event normal operating expenses of the Fund, exclusive of certain expenses prescribed by state law, are in excess of the most restrictive state limit where the Fund is registered to sell shares of beneficial interest, the fee payable to the Adviser will be reduced to the extent of such excess and the Adviser will make additional arrangements necessary to eliminate any remaining excess expenses. The current limits are 2.5% of the first $30,000,000 of the Fund's average daily net asset value, 2.0% of the next $70,000,000 and 1.5% of the remaining average daily net asset value. On December 22, 1994 John Hancock Funds, Inc. ("JH Funds"), a wholly-owned subsidiary of the Adviser, became the principal underwriter of the Fund. Prior to this date, Transamerica Fund Distributors, Inc. ("TFD") served as the principal underwriter and distributor of the Fund. Class B shares which are redeemed within six years of purchase will be subject to a contingent deferred sales charge ("CDSC") at declining rates beginning at 5.0% 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 CDSC are paid to JH Funds, formerly TFD, and are used in whole or in part to defray its expenses related to providing distribution related services to the Fund in connection with the sale of Class B shares. For the period ended October 31,1995, contingent deferred sales charges amounted to $969,561. In addition, to compensate JH Funds for the services it provides as distributor of shares of the Fund, the Fund has adopted Distribution Plans with respect to Class A and Class B shares pursuant to Rule 12b-1 under the Investment Company Act of 1940. Accordingly, the Fund will make payments to JH Funds for distribution and service expenses at an annual rate not to exceed 0.15% of Class A average daily net assets and 1.00% of Class B average daily net assets. As of October 27, 1995, the Fund has temporarily limited the distribution and service fees attributable to Class B shares to 0.90% of average daily net assets. Under the amended Rules of Fair Practice, curtailment of a portion of the Fund's 12b-1 payments could occur under certain circumstances. This fee structure and plan is similar to the former arrangement with TFD. The Board of Directors approved a shareholder servicing agreement between the Fund and John Hancock Investor Services Corporation ("Investor Services"), a wholly owned subsidiary of The Berkeley Financial Group, for the period between December 22, 1994 and May 12, 1995, inclusive under which Investor Services processed telephone transactions on behalf of the Fund. As of May 15, 1995, the Fund entered into a full service transfer agent agreement with Investor 13 14 NOTES TO FINANCIAL STATEMENTS JOHN HANCOCK FUNDS - MONEY MARKET FUND Services. Prior to this date The Shareholder Services Group was the transfer agent. The Fund will pay Investor Services a fee based on transaction volume and number of shareholder accounts. A partner with Baker & Botts was an officer of the Trust until December 22, 1994. During the period ended October 31, 1995, legal fees paid to Baker & Botts amounted to $688. Mr. Edward J. Boudreau, Jr. is a director and officer of the Adviser and its affiliates as well as Director of the Fund. The compensation of unaffiliated Directors is borne by the Fund. Effective with the fees paid for 1995, the unaffiliated Directors may elect to defer their receipt of this compensation under the John Hancock Group of Funds Deferred Compensation Plan. The Fund will make investments into other John Hancock funds, as applicable, to cover its liability with regard to the deferred compensation. Investments to cover the Fund's deferred compensation liability will be recorded on the Fund's books in other assets. The deferred compensation liability will be marked to market on a periodic basis and income earned by the investment will be recorded on the Fund's books. The Fund has an independent advisory board composed of certain retired Directors who provide advice to the current Board of Directors in order to facilitate a smooth management transition. The Fund pays the advisory board and its counsel a fee. NOTE C -- INVESTMENT TRANSACTIONS Purchases and proceeds from sales and maturities, including discount earned on investment securities, other than obligations of the U.S. government and its agencies, for the period ended October 31, 1995 aggregated $2,620,334,872 and $2,536,962,220, respectively. Purchases and proceeds from maturities of obligations of the U.S. government and its agencies for the period ended October 31, 1995, aggregated $80,835,727 and $90,184,471, respectively. The cost of investments owned at October 31, 1995 for Federal income tax purposes was $74,748,213. NOTE D -- PLAN OF REORGANIZATION On November 15, 1995, the shareholders of John Hancock Cash Management Fund ("CMF") approved a plan of reorganization between CMF and the Fund providing for the transfer of substantially all of the assets and liabilities of CMF to the Fund in exchange solely for Class A shares of the Fund to be distributed to CMF's Class A shareholders, receptively. 14 15 JOHN HANCOCK FUNDS - MONEY MARKET FUND REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS To the Board of Directors and Shareholders of John Hancock Series, Inc. -- John Hancock Money Market Fund We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of the John Hancock Money Market Fund (the "Fund"), (formerly the Transamerica Money Market Fund B), one of the portfolios constituting John Hancock Series, Inc. (formerly Transamerica Series, Inc.) as of October 31, 1995, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods indicated therein. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted accounting standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 1995, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the John Hancock Money Market Fund portfolio of John Hancock Series, Inc., at October 31, 1995, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the indicated periods, in conformity with generally accepted accounting principles. ERNST & YOUNG LLP Boston, Massachusetts December 15, 1995 TAX INFORMATION NOTICE (UNAUDITED) For Federal income tax purposes, the following information is furnished with respect to the dividends of the Fund during its fiscal year ended October 31, 1995. All of the dividends paid for the fiscal year are taxable as ordinary income. None of the 1995 dividends qualify for the dividends received deduction available to corporations. Shareholders will be mailed a 1995 U.S. Treasury Department Form 1099-DIV in January of 1996. This will reflect the total of all distributions which are taxable for calendar year 1995. 15 16 ADDITIONAL INFORMATION JOHN HANCOCK FUNDS - MONEY MARKET FUND On December 16, 1994 , a special meeting of John Hancock (formerly Transamerica) Series, Inc. (the "Trust") in respect of John Hancock (formerly Transamerica) Money Market Fund (the "Fund") was held involving the election of trustees and certain other matters concerning the Fund. Specifically, shareholder's first approved a new investment management agreement between the Trust on behalf of the Fund and John Hancock Advisers, Inc. on substantially similar terms of the prior investment management agreement, to take effect on December 22, 1994, the date of the consummation of Transamerica Fund Management Company by The Berkeley Financial Group. The shareholder votes tallied were 28,010,195 FOR, 429,634 AGAINST and 1,543,584 ABSTAINING. The shareholders next approved new Plans of Distribution for the Fund, also effective on December 22, 1994, and also on substantially the same terms as the prior Plans of Distribution. The shareholder votes tallied were 27,864,397 FOR, 324,983 AGAINST and 1,794,033 ABSTAINING The shareholders also voted to ratify the selection of Ernst & Young, LLP as independent auditors for the Fund for the fiscal year ending October 31, 1995, and the votes tallied were 38,745,493 FOR, 65,395 AGAINST and 1,428,713 ABSTAINING. Lastly, the following trustees were elected to serve until their respective successors shall become duly elected and qualified, with the votes tabulated as indicated:
NAME OF DIRECTOR FOR WITHHOLD - -------------------------------------------------------------------------------- Edward J. Boudreau, Jr ................. 26,514,487 3,468,927 James F. Carlin ........................ 26,515,928 3,467,485 William H. Cunningham .................. 26,510,272 3,473,142 Charles L. Ladner ...................... 26,510,272 3,473,142 Leo E. Linbeck, Jr ..................... 26,497,012 3,486,401 Patricia P. McCarter ................... 26,510,272 3,473,142 Steven R. Pruchansky ................... 26,510,272 3,473,142 Norman H. Smith ........................ 26,507,782 3,475,632 John P. Toolan ......................... 26,510,272 3,473,142
16 17 NOTES JOHN HANCOCK FUNDS - MONEY MARKET FUND 17 18 NOTES JOHN HANCOCK FUNDS - MONEY MARKET FUND 18 19 NOTES JOHN HANCOCK FUNDS - MONEY MARKET FUND 19 20 Bulk Rate [LOGO] JOHN HANCOCK FUNDS U.S. Postage A GLOBAL INVESTMENT MANAGEMENT FIRM PAID 101 HUNTINGTON AVENUE BOSTON, MA 02199-7603 Brockton, MA Permit No. 582 [A 1/2" x 1/2" John Hancock Funds logo in upper left hand corner of the page. A box sectioned in quadrants with a triangle in upper left, a circle in upper right, a cube in lower left and a diamond in lower right. A tag line below reads "A Global Investment Management Firm."] - -------------------------------------------------------------------------------- This report is for the information of shareholders of the John Hancock Money Market Fund. It may be used as sales literature when preceded or accompanied by the current prospectus, which details charges, investment objectives and operating policies. [A recycled logo in lower left hand corner with caption "Printed on Recycled Paper."] JHD 4400A 10/95 -----END PRIVACY-ENHANCED MESSAGE-----