-----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, SxvLtMFv4CCEdbKTHJ1G9lLV0HmesNWbfj3tiqVMbhRsiTQyoTIZ1Xug4qYhlRl/ ZwuS6DJNCEoU45E73s5BvQ== 0000928816-07-000066.txt : 20070126 0000928816-07-000066.hdr.sgml : 20070126 20070126142909 ACCESSION NUMBER: 0000928816-07-000066 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 13 CONFORMED PERIOD OF REPORT: 20061130 FILED AS OF DATE: 20070126 DATE AS OF CHANGE: 20070126 EFFECTIVENESS DATE: 20070126 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HANCOCK JOHN PATRIOT PREFERRED DIVIDEND FUND CENTRAL INDEX KEY: 0000899581 IRS NUMBER: 043190056 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-07590 FILM NUMBER: 07555968 BUSINESS ADDRESS: STREET 1: C/O JOHN HANCOCK FUNDS STREET 2: 601 CONGRESS STREET CITY: BOSTON STATE: MA ZIP: 02210 BUSINESS PHONE: 617-663-3000 MAIL ADDRESS: STREET 1: C/O JOHN HANCOCK FUNDS STREET 2: 601 CONGRESS STREET CITY: BOSTON STATE: MA ZIP: 02210 FORMER COMPANY: FORMER CONFORMED NAME: PATRIOT PREFERRED DIVIDEND FUND DATE OF NAME CHANGE: 19930714 N-CSRS 1 a_patprefdivtrust.htm JOHN HANCOCK PATRIOT PREFERRED DIVIDEND FUND a_patprefdivtrust.htm

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- 7590

John Hancock Patriot Preferred Dividend 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 

Fund’s investments 
page 6 

Financial statements 
page 9 

Notes to financial 
statements 
page 1 4 

For more information 
page 2 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 to provide high current income, consistent with preservation of capital, by normally investing at least 80% of its assets in dividend-paying securities.

Over the last six months

Preferred stocks and utility common stocks posted strong gains, fueled by waning inflation fears and the cessation of interest rate hikes.

The Fund performed in line with its peers on a net asset value basis.

Utility common stock holdings performed best.




Top 10 issuers       
Lehman Brothers Holdings, Inc.  5.0%  HSBC USA, Inc.  4.1% 

Citigroup, Inc.  4.6%  Devon Energy Corp.                 4.1% 

Bear Stearns Cos. Inc.  4.5%  Apache Corp.  3.9% 

MetLife, Inc.  4.3%  Alabama Power Co.  3.9% 

Southern California Edison Co.                          4.2%  SLM Corp.  3.5% 


As a percentage of net assets plus the value of preferred shares on November 30, 2006.

1


Managers’ report

John Hancock

Patriot Preferred Dividend Fund

Preferred stocks and utility common stocks — the two primary areas of emphasis for John Hancock Patriot Preferred Dividend Fund — posted solid gains for the six-month period ended November 30, 2006. In the early months of the period, fixed income investments — including preferred stocks — performed poorly, hurt by news of strong economic growth and mounting inflation pressures, which in turn fueled concerns about more interest rate hikes. Because preferreds make fixed income payments in the form of dividends, their prices tend to move higher and lower in response to expectations for interest rates and inflation. Preferreds also were forced to contend with a glut of new issuance, which typically came to market with higher yields than already-outstanding securities, making older issues less attractive and putting pressure on their prices.

But beginning in August, preferreds and utility commons began to rally strongly, bolstered by renewed optimism that the Federal Reserve Board would hold interest rates steady. A series of reports indicating that the housing market and other parts of the economy were slowing provided investors evidence that inflation wasn’t the same concern it had been just a few months earlier. The rally gathered even more steam when the Fed held interest rates steady at each of its final three Open Market Committee meetings of the period in August, September and October. Against that backdrop, preferred stocks that offered a certain

SCORECARD

INVESTMENT    PERIOD’S PERFORMANCE. . . AND WHAT’S BEHIND THE NUMBERS 
Alliant Energy    Renewed focus on core regulated business drives earnings and 
    dividends higher 
Bank of America    Preferreds are coveted amid scarcity for high-quality, tax-advantaged 
    securities 
Ocean Spray  Lack of liquidity causes stock to languish 

2



Portfolio Managers, MFC Global Investment Management (U.S.), LLC
Gregory K. Phelps and Mark T. Maloney

tax advantage known as the dividends received deduction (DRD) outpaced those without the tax benefit. Utility common stocks also were helped by a mini wave of merger and acquisition activity, as well as by growing investor interest in defensive industries that tend to perform well amid slowing economic conditions. Even a decline in energy prices in the final two months of the period didn’t really hurt utility common stocks, which had been viewed by many investors as hidden energy plays.

“Preferred stocks and utility
  common stocks…posted solid
  gains for the six-month period
  ended November 30, 2006.”

Performance

For the six months ended November 30, 2006, John Hancock Patriot Preferred Dividend Fund returned 11.28% at net asset value (NAV) and 17.23% at market value. The difference in the Fund’s NAV performance and its market performance stems from the fact that the market share price is subject to the dynamics of secondary market trading, which could cause it to trade at a discount or premium to the Fund’s NAV share price at any time. The Fund’s yield at closing market price on November 30, 2006 was 6.38%. By comparison, the average closed-end mid-cap value fund returned 12.34% at net asset value, according to Morningstar, Inc. For the same six-month period, the Lehman Brothers Aggregate Bond Index gained 5.93%, the Merrill Lynch Preferred Stock, DRD Eligible Index rose 8.51% and the S&P 400 Mid-Cap Utilities Index returned 16.91%.

Common stock leaders

Our utility common stock holdings provided the biggest boost to the Fund’s performance. Among the most significant contributors was KeySpan Corp., which operates regulated gas utilities throughout the northeastern United States. It was buoyed by news that it would be acquired by British network

Patriot Preferred Dividend Fund

3


operator National Grid. Another big winner was Alliant Energy Corp., pushed higher by renewed investor interest after the company decided to resume growing its dividend, to rid itself of money-losing foreign investments and to renew its focus on core regulated utility businesses. NiSource, Inc. also performed well, thanks in large part to investors’ upward revaluation of natural gas pipeline and storage assets. Peoples Energy Corp. also helped boost returns, soaring on news that the company — which sells and transports natural gas to residential, commercial and industrial customers in the Chicago area — will be taken over by Wisconsin-based WPS Resources. Our holdings in telecommunications giant AT&T, Inc. also fared well due to growing recognition that the company’s stock provided attractive dividend yields, that its merger was working and that it was gaining market share in the broadband and wireless segments.

Preferred standouts

Among our preferred holdings, we enjoyed good gains from MetLife, Inc. It served us well, aided by strong demand for DRD-eligible preferreds. Bank of America Corp.’s preferred holdings, which we purchased recently, also did well, helped by investor demand for attractively priced tax-advantaged preferred stocks issued by high-quality companies amid a dearth of such securities. Likewise, our stake in PPL Electric Utilities Corp., a Pennsylvania-based electric provider, worked in our favor as the securities were in strong demand amid a scarcity of other investment-grade, tax-advantaged utility preferred stocks.

INDUSTRY DISTRIBUTION1 
Electric utilities  22% 
Multi-utilities  14% 
Oil & gas exploration   
& production  13% 
Investment banking   
& brokerage  12% 
Consumer finance  8% 
Other diversified financial   
services  7% 
Gas utilities  5% 
Life & health insurance  4% 
Agricultural products  3% 
Trucking  3% 
Diversified chemicals  2% 
All others  4% 

Another group of preferred stocks that performed particularly well were our brokerage holdings, led by Goldman Sachs Group, Inc. and Merrill Lynch & Co., Inc. The brokers benefited from their ability to fire on all cylinders in their key businesses, including stocks, mergers and acquisitions, asset management and private equity. They also benefited from providing services to the thriving hedge fund industry, as well as gains from trading with their own money.

Laggards

In contrast, we lost ground with our stake in Ocean Spray Cranberries, Inc., an agricultural cooperative owned by more than 650 cranberry growers in Massachusetts, Wisconsin, New Jersey, Oregon, Washington, British Columbia, and other parts

Patriot Preferred Dividend Fund

4


of Canada, as well as more than 100 Florida grapefruit growers. Our holdings were part of a private placement, whereby the company sold securities to a relatively small number of institutional investors rather than to the public at large. Despite the preferred stocks’ sought-after tax-advantaged status, their prices languished as investors increasingly went for more liquid (meaning easily traded) securities. We continue to hold onto our Ocean Spray stake because we believe that this high-quality company has the potential to be taken over by a larger multinational food company at an attractive premium to the price we paid for it.

“Our utility common stock
  holdings provided the biggest
  boost to the Fund’s performance.”

Outlook

At the end of the period, the bond market was pricing in at least two rate cuts by mid-2007. While we agree with the notion that the Fed’s next move will be to lower rates, rather than raise them further, we believe that such action will come later than the market currently anticipates. For that reason, we believe the Treasury market could be due for a sell off amid any signs of economic strength, which likely would weigh on preferred and utility common stocks as well over the short term. Over the longer term, however, we remain quite optimistic that gradually slowing economic conditions will bode well for fixed income investments, including preferred and utility common stocks. We also believe that long-term demand — driven by the baby boom generation’s increasing need for income-producing investments — will continue to provide support for preferred and utility stocks.


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.

The Fund normally will invest at least 25% of its managed assets in securities of companies in the utilities industry. Such an investment concentration makes the Fund more susceptible to factors adversely affecting the utilities industry than a more broadly diversified fund. Sector investing is subject to greater risks than the market as a whole.

1 As a percentage of the Fund’s portfolio on November 30, 2006.

Patriot Preferred Dividend Fund

5


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 three main categories: common stocks, preferred stocks
and short-term investments. Stocks are further broken down by industry group. Short-term
investments, which represent the Fund’s cash position, are listed last.

Issuer    Shares  Value 

Common stocks 18.31%      $19,113,136 
(Cost $14,841,932)       
Electric Utilities 0.01%      11,625 

Progress Energy, Inc., (Contingent Value Obligation) (B)(I)    37,500  11,625 
Gas Utilities 1.16%      1,214,920 

Peoples Energy Corp.    28,000  1,214,920 
Integrated Telecommunication Services 0.73%      764,670 

AT&T, Inc.    22,550  764,670 
Multi-Utilities 16.41%      17,121,921 

Alliant Energy Corp.    52,000  2,022,800 

Dominion Resources, Inc.    27,500  2,220,350 

DTE Energy Co.    30,000  1,412,700 

KeySpan Corp.    91,550  3,756,297 

NiSource, Inc.    46,400  1,144,224 

NSTAR    100,000  3,518,000 

SCANA Corp.    15,500  639,530 

TECO Energy, Inc.    62,000  1,053,380 

Xcel Energy, Inc.    59,000  1,354,640 
 
  Credit     
Issuer, description  rating (A)  Shares  Value 

Preferred stocks 129.39%      $135,030,204 
(Cost $132,961,350)       
Agricultural Products 4.77%      4,974,378 

Ocean Spray Cranberries, Inc., 6.25%, Ser A (S)  BB+  60,000  4,974,378 
Consumer Finance 12.38%      12,918,736 

HSBC Finance Corp., 6.36%, Depositary Shares, Ser B  A  35,600  923,820 

HSBC USA, Inc., $2.8575 (G)  A1  131,700  6,494,456 

SLM Corp., 6.97%, Ser A  BBB+  101,000  5,500,460 
Diversified Banks 0.94%      979,600 

Royal Bank of Scotland Group Plc, 5.75%, Ser L       
(United Kingdom)  A  40,000  979,600 
Diversified Chemicals 2.81%      2,932,350 

Du Pont (E.I.) de Nemours & Co., $4.50, Ser B  BBB+  33,900  2,932,350 

See notes to financial statements

Patriot Preferred Dividend Fund

6


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

  Credit     
Issuer, description  rating (A)  Shares Value 
Electric Utilities 33.10%      $34,540,151 

Alabama Power Co., 5.20%  BBB+  251,400  6,053,712 

Boston Edison Co., 4.78%  A–  19,380  1,787,805 

Duquesne Light Co., 6.50%  BB+  100,000  5,050,000 

Entergy Arkansas, Inc., 6.45%  BB+  100,000  2,571,880 

Entergy Mississippi, Inc., 6.25%  BB+  140,000  3,460,632 

Interstate Power & Light Co., 7.10%, Ser C  BBB–  32,000  838,400 

PPL Electric Utilities Corp., 6.25%, Depositary Shares  BBB  200,000  5,306,260 

PPL Energy Supply, LLC, 7.00%  BBB  50,000  1,324,500 

Southern California Edison Co., 6.00%, Ser C  BBB–  14,000  1,431,063 

Southern California Edison Co., 6.125%  BBB–  50,000  5,145,315 

Union Electric Co., $3.70  BB+  12,262  936,894 

Wisconsin Public Service Corp., 6.76%  A–  6,095  633,690 
Gas Utilities 6.83%      7,131,487 

Southern Union Co., 7.55%, Depositary Shares, Ser A  BB  201,400  5,216,260 

Southwest Gas Capital II, 7.70%  BB  72,300  1,915,227 
Investment Banking & Brokerage 17.97%      18,754,605 

Bear Stearns Cos., Inc. (The), 5.72%, Depositary Shares, Ser F  BBB+  40,000  1,992,000 

Bear Stearns Cos., Inc. (The), 6.15%, Depositary Shares, Ser E  BBB+  100,600  5,095,390 

Goldman Sachs Group, Inc., 6.20%, Ser B  A  47,800  1,242,800 

Lehman Brothers Holdings, Inc., 5.67%, Depositary Shares, Ser D  A–  48,000  2,496,000 

Lehman Brothers Holdings, Inc., 5.94%, Depositary Shares, Ser C  A–  102,500  5,201,875 

Merrill Lynch & Co., Inc., 6.375%, Depositary Shares, Ser 3  A  105,150  2,726,540 
Life & Health Insurance 6.50%      6,780,800 

MetLife, Inc., 6.50%, Ser B  BBB  260,000  6,780,800 
Multi-Utilities 4.76%      4,969,932 

Baltimore Gas & Electric Co., 6.99%, Ser 1995  Ba1  20,000  2,101,250 

PSEG Funding Trust II, 8.75%  BB+  30,000  795,900 

Public Service Electric & Gas Co., 6.92%  BB+  19,000  2,072,782 
Oil & Gas Exploration & Production 20.22%      21,107,174 

Anadarko Petroleum Corp., 5.46%, Depositary Shares, Ser B  BB  34,567  3,301,148 

Apache Corp., 5.68%, Depositary Shares, Ser B  BBB  62,200  6,188,900 

Devon Energy Corp., 6.49%, Ser A  BB+  63,500  6,490,894 

Nexen, Inc., 7.35% (Canada)  BB+  200,400  5,126,232 
Other Diversified Financial Services 10.47%      10,924,425 

Bank of America Corp., 6.204%, Despositary Shares, Ser D  A  140,000  3,684,800 

Citigroup, Inc., 6.213%, Depositary Shares, Ser G  A  52,000  2,649,400 

Citigroup, Inc., 6.231%, Depositary Shares, Ser H  A  88,700  4,590,225 
Specialized Finance 1.50%      1,563,000 

CIT Group, Inc., 6.35%, Ser A  BBB+  60,000  1,563,000 
Thrifts & Mortgage Finance 1.85%      1,931,566 

Sovereign Bancorp, Inc., 7.30%, Depositary Shares, Ser C  BB+  70,000  1,931,566 

See notes to financial statements

Patriot Preferred Dividend Fund

7


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

  Credit     
Issuer, description  rating (A)  Shares  Value 
Trucking 4.33%      $4,518,000 

AMERCO, 8.50%, Ser A  B  180,000  4,518,000 
Wireless Telecommunication Services 0.96%      1,004,000 

Telephone & Data Systems, Inc., 6.625%  BBB  40,000  1,004,000 

   Interest  Par value   
Issuer, description, maturity date  rate  (000)  Value 

Short-term investments 2.45%      $2,562,000 
(Cost $2,562,000)       
Commercial Paper 2.45%      2,562,000 

Chevron Funding Corp. 12/01/06  5.170%  $2,562  2,562,000 

Total investments (Cost $150,365,282) 150.15%      $156,705,340 

 
Other assets and liabilities, net 0.25%      $259,977 

 
Fund preferred shares, at value (50.40%)      ($52,600,406) 

 
Total net assets 100.00%      $104,364,911 

(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 $11,625 or 0.01% of the Fund’s net assets as of November 30, 2006.

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

(I) Non-income-producing security.

(S) This security is exempt from registration under Rule 144A of the Securities Act of 1933. Such security may be resold, normally to qualified institutional buyers, in transactions exempt from registration. Rule 144A securities amounted to $4,974,378 or 4.77% 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.

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

Patriot Preferred Dividend Fund

8


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 for each
common share.

Assets   

Investments at value (cost $150,365,282)  $156,705,340 
Cash  290 
Dividends receivable  460,808 
Other assets  20,752 
Total assets  157,187,190 
Liabilities   

Payable to affiliates   
Management fees  102,690 
Other  21,051 
Other payables and accrued expenses  98,132 
Total liabilities  221,873 
Auction Rate Preferred Shares (ARPS), and accrued dividends,   
unlimited number of shares of beneficial interest authorized   
with no par value, 525 shares issued, liquidation preference   
of $100,000 per share  52,600,406 
Net assets   

Common shares capital paid-in  98,767,513 
Accumulated net realized loss on investments  (2,925,802) 
Net unrealized depreciation of investments  6,340,058 
Accumulated net investment income  2,183,142 
Net assets applicable to common shares  $104,364,911 
Net asset value per common share   

Based on 7,257,200 shares of beneficial interest   
outstanding — unlimited number of shares   
authorized with no par value  $14.38 

See notes to financial statements

Patriot Preferred Dividend Fund

9


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   

Dividends  $4,676,333 
Interest  101,870 
Total investment income  4,778,203 
Expenses   

Investment management fees (Note 2)  612,979 
Administration fees (Note 2)  114,934 
Compliance fees  1,195 
ARPS auction fees  69,546 
Transfer agent fees  21,568 
Printing  18,241 
Custodian fees  17,506 
Professional fees  14,381 
Registration and filing fees  11,631 
Trustees’ fees  3,768 
Interest  26 
Miscellaneous  12,201 
Total expenses  897,976 
Net investment income  3,880,227 
Realized and unrealized gain (loss)   

Net realized gain on investments  146,499 
Change in net unrealized appreciation (depreciation) of investments  7,624,525 
Net realized and unrealized gain  7,771,024 
Distributions to ARPS  (1,091,503) 
Increase in net assets from operations  $10,559,748 

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

See notes to financial statements

Patriot Preferred Dividend Fund

10


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  $7,631,668  $3,880,227 
Net realized gain  1,573,440  146,499 
Change in net unrealized appreciation (depreciation)  (8,814,605)  7,624,525 
Distributions to ARPS  (1,740,378)  (1,091,503) 
Increase (decrease) in net assets     
resulting from operations  (1,349,875)  10,559,748 
Distributions to common shareholders     
From net investment income  (6,270,221)  (3,135,110) 
Net assets     

Beginning of period  104,560,369  96,940,273 
End of period2  $96,940,273  $104,364,911 

1 Semiannual period from 6-1-06 through 11-30-06. Unaudited.
2 Includes accumulated net investment income of $2,529,528 and $2,183,142, respectively.

See notes to financial statements

Patriot Preferred Dividend Fund

11


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.

COMMON SHARES             
 
Period ended  5-31-021  5-31-031  5-31-041  5-31-051  5-31-06  11-30-062 

Per share operating performance             
Net asset value,             
beginning of period  $12.96  $12.39  $13.06  $12.97  $14.41  $13.36 
Net investment income3  1.18  1.08  1.02  1.13  1.05  0.53 
Net realized and unrealized             
gain (loss) on investments  (0.73)  0.56  0.08  1.32  (1.00)  1.07 
Distributions to ARPS  (0.16)  (0.11)  (0.08)  (0.15)  (0.24)  (0.15) 
Total from             
investment operations  0.29  1.53  1.02  2.30  (0.19)  1.45 
Less distributions to             
common shareholders             
From net investment income  (0.86)  (0.86)  (1.11)  (0.86)  (0.86)  (0.43) 
Net asset value, end of period  $12.39  $13.06  $12.97  $14.41  $13.36  $14.38 
Per share market value,             
end of period  $12.47  $13.07  $12.00  $13.58  $11.95  $13.55 
Total return at market value4 (%)  13.76  12.50  (0.24)  20.77  (6.11)  17.235 
Ratios and supplemental data             

Net assets applicable to common             
shares, end of period (in millions)  $90  $95  $94  $105  $97  $104 
Ratio of net expenses to average             
net assets6 (%)  1.96  2.11  1.88  1.81  1.90  1.967 
Ratio of net investment income to             
average net assets 8 (%)  9.09  9.21  7.60  8.19  7.52  8.467 
Portfolio turnover (%)  16  9  7  11  16  95 
Senior securities             

Total value of ARPS outstanding             
(in millions)  $53  $53  $53  $53  $53  $53 
Involuntary liquidation preference             
per unit (in thousands)  $100  $100  $100  $100  $100  $100 
Average market value per unit             
(in thousands)  $100  $100  $100  $100  $100  $100 
Asset coverage per unit 9  $270,318  $277,801   $276,094   $298,017   $283,075          $297,417  

See notes to financial statements

Patriot Preferred Dividend Fund

12


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

Notes to Financial Highlights

1 Audited by previous auditor.

2 Semiannual period from 6-1-06 to 11-30-06. Unaudited.

3 Based on the average of the shares outstanding.

4 Assumes dividend reinvestment.

5 Not annualized.

6 Ratios calculated on the basis of expenses relative to the average net assets of common shares. Without the exclusion of preferred shares, the ratio of expenses would have been 1.26%, 1.30%, 1.22%, 1.19%, 1.25% and 1.24%, respectively.

7 Annualized.

8 Ratios calculated on the basis of net investment income relative to the average net assets of common shares. Without the exclusion of preferred shares, the ratio of net investment income would have been 5.84%, 5.70%, 4.94%, 5.38, 4.96% and 5.38%, respectively.

9 Calculated by subtracting the Fund’s total liabilities from the Fund’s total assets and dividing such amount by the number of ARPS outstanding as of the applicable 1940 Act Evaluation Date, which may differ from the financial reporting date.

See notes to financial statements

Patriot Preferred Dividend Fund

13


Notes to financial statements (unaudited)

Note 1
Accounting policies

John Hancock Patriot Preferred Dividend Fund (the “Fund”) is a diversified closed-end management investment company registered under the Investment Company Act of 1940, as amended.

Significant accounting policies of the Fund
are as follows:

Valuation of investments

Securities in the Fund’s portfolio are valued on the basis of market quotations, valuations provided by independent pricing services or if quotations are not readily available, or the value has been materially affected by events occurring after the closing of a foreign market, at fair value as determined in good faith in accordance with procedures approved by the Trustees. Short-term debt investments which have a remaining maturity of 60 days or less may be valued at amortized cost, which approximates market value. The Fund determines the net asset value of the common shares each business day.

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.

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.

Federal income taxes

The Fund qualifies as a “regulated investment company” by complying with the applicable provisions of the Internal Revenue Code and will not be subject to federal income tax on taxable income that is distributed to shareholders. Therefore, no federal income tax provision is required. For federal income tax purposes, the Fund has $2,890,287 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, 2010 — $1,226,894, May 31, 2011 — $1,075,016, May 31, 2012 — $79,976, May 31, 2013 — $51,881 and May 31, 2014 — $456,520.

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

Patriot Preferred Dividend Fund

14


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 exdividend date or, in the case of some foreign securities, on the date thereafter when the Fund identifies the dividend. Interest income on investment securities is recorded on the accrual basis. Foreign income may be subject to foreign withholding taxes, 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. During the year ended May 31, 2006, the tax character of distributions paid was as follows: ordinary income $8,010,599.

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 John Hancock Advisers, LLC (the “Adviser”), a wholly owned subsidiary of John Hancock Financial Services, Inc., a subsidiary of Manulife Financial Corporation (“MFC”). Under the investment management contract, the Fund pays a monthly management fee to the Adviser at an annual rate of 0.80% of the Fund’s average weekly net asset value and the value attributable to the Auction Rate Preferred Shares (collectively, “managed assets”).

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 principle 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 an administrative agreement with the Adviser under which the Adviser oversees the custodial, auditing, valuation, accounting, legal, stock transfer and dividend disbursing services, and maintains Fund communications with shareholders. The Fund pays the Adviser a monthly administration fee at an annual rate of 0.15% of the Fund’s average weekly managed assets. The compensation for the period amounted to $114,934. The Fund also reimbursed John Hancock Life Insurance Company for certain compliance costs, included in the Fund’s Statement of Operations.

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

Patriot Preferred Dividend Fund

15


Compensation Plan investments had no impact on the operations of the Fund.

The Fund is listed for trading on the New York Stock Exchange (“NYSE”) and has filed with the NYSE its chief executive officer certification regarding compliance with the NYSE’s listing standards. The Fund also files with the Securities and Exchange Commission the certification of its chief executive officer and chief accounting officer required by Section 302 of the Sarbanes-Oxley Act.

Note 3
Fund share transactions

Common shares

The Fund had no common share transactions during the last two fiscal periods.

Auction Rate Preferred Shares

The Fund issued 525 shares of Auction Rate Preferred Shares (“ARPS”) on July 29, 1993, in a public offering. The underwriting discount and the offering costs were recorded as a reduction of the capital of common shares.

Dividends on the ARPS, which accrue daily, are cumulative at a rate that was established at the offering of the ARPS and has been reset every 49 days thereafter by an auction. Dividend rates on ARPS ranged from 3.79% to 4.21% during the period ended November 30, 2006. Accrued dividends on ARPS are included in the value of ARPS on the Fund’s Statement of Assets and Liabilities.

The ARPS are redeemable at the option of the Fund, at a redemption price equal to $100,000 per share, plus accumulated and unpaid dividends on any dividend payment date. The ARPS are subject to mandatory redemption at a redemption price equal to $100,000 per share, plus accumulated and unpaid dividends, if the Fund is in default on its asset coverage requirements with respect to the ARPS, as defined in the Fund’s bylaws. If the dividends on the ARPS shall remain unpaid in an amount equal to two full years’ dividends, the holders of the ARPS, as a class, have the right to elect a majority of the Board of Trustees. In general, the holders of the ARPS and the common shareholders have equal voting rights of one vote per share, except that the holders of the ARPS, as a class, vote to elect two members of the Board of Trustees, and separate class votes are required on certain matters that affect the respective interests of the ARPS and common shareholders.

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 $13,116,440 and $12,824,772, respectively.

The cost of investments owned on November 30, 2006, including short-term investments, for federal income tax purposes, was $150,530,023. Gross unrealized appreciation and depreciation of investments aggregated $8,811,561 and $2,636,244, respectively, resulting in net unrealized appreciation of $6,175,317. 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.

Patriot Preferred Dividend Fund

16


Investment objective and policy

The Fund’s investment objective is to provide high current income consistent with preservation of capital. The Fund will pursue its objective by investing in preferred stocks that, in the opinion of the Adviser, may be undervalued relative to similar securities in the marketplace.

The Fund’s nonfundamental investment policy, with respect to the quality of ratings of its portfolio investments, was changed by a vote of the Fund’s Trustees on September 13, 1994. The policy, which became effective October 15, 1994, stipulates that preferred stocks and debt obligations in which the Fund will invest will be rated investment grade (at least “BBB” by S&P or “Baa” by Moody’s) at the time of investment or will be preferred stocks of issuers of investment grade senior debt, some of which may have speculative characteristics, or, if not rated, will be of comparable quality as determined by the Adviser. The Fund will invest in common stocks of issuers whose senior debt is rated investment grade or, in the case of issuers that have no rated senior debt outstanding, whose senior debt is considered by the Adviser to be of comparable quality.

On November 20, 2001, the Fund’s Trustees approved the following investment policy investment restric-tion change, effective December 15, 2001. Under normal circumstances the Fund will invest at least 80% of its assets in dividend-paying securities. The “Assets” are defined as net assets including the liquidation preference amount of the ARPS plus borrowings for investment purposes. The Fund will notify shareholders at least 60 days prior to any change in this 80% investment policy.

Bylaws

In November 2002, the Board of Trustees adopted several amendments to the Fund’s bylaws, including provisions relating to the calling of a special meeting and requiring advance notice of shareholder proposals or nominees for Trustee. The advance notice provisions in the bylaws require shareholders to notify the Fund in writing of any proposal that they intend to present at an annual meeting of shareholders, including any nominations for Trustee, between 90 and 120 days prior to the first anniversary of the mailing date of the notice from the prior year’s annual meeting of shareholders. The notification must be in the form prescribed by the bylaws. The advance notice provisions provide the Fund and its Trustees with the opportunity to thoughtfully consider and address the matters proposed before the Fund prepares and mails its proxy statement to shareholders. Other amendments set forth the procedures that must be followed in order for a shareholder to call a special meeting of shareholders. Please contact the Secretary of the Fund for additional information about the advance notice requirements or the other amendments to the bylaws.

On December 16, 2003, the Trustees approved the following change to the Fund’s bylaws. The auction preferred section of the Fund’s bylaws was changed to update the rating agency requirements, in keeping with recent changes to the agencies’ basic maintenance reporting requirements for leveraged closed-end funds. Bylaws now require an independent accountant’s confirmation only once per year, at the Fund’s fiscal year end, and changes to the agencies’ basic maintenance reporting requirements that include modifications to the eligible assets and their respective discount factors. These revisions bring the Fund’s bylaws in line with current rating agency requirements.

On September 14, 2004, the Trustees approved an amendment to the Fund’s bylaws increasing the maximum applicable dividend rate ceiling on the preferred shares to conform with the modern calculation methodology used by the industry and other John Hancock funds.

17


Dividends and distributions

During the period ended November 30, 2006, dividends from net investment income totaling $0.432 per share were paid to shareholders. The dates of payments and the amounts per share are as follows:

                                                                                           INCOME 
PAYMENT DATE  DIVIDEND 

June 30, 2006  $0.072 
July 31, 2006  0.072 
August 31, 2006  0.072 
September 29, 2006  0.072 
October 31, 2006  0.072 
November 30, 2006  0.072 

Dividend reinvestment plan

The Fund offers its shareholders a Dividend Reinvestment Plan (the “Plan”), which offers the opportunity to earn compounded yields. Each holder of common shares may elect to have all distributions of dividends and capital gains reinvested by Mellon Investor Services, as plan agent for the common shareholders (the “Plan Agent”). Holders of common shares who do not elect to participate in the Plan will receive all distributions in cash, paid by check mailed directly to the shareholder of record (or, if the common shares are held in street or other nominee name, then to the nominee) by the Plan Agent, as dividend disbursing agent.

Shareholders may join the Plan by filling out and mailing an authorization card, by notifying the Plan Agent by telephone or by visiting the Plan Agent’s Web site at www.melloninvestor.com. Shareholders must indicate an election to reinvest all or a portion of dividend payments. If received in proper form by the Plan Agent before the record date of a dividend, the election will be effective with respect to all dividends paid after such record date. Shareholders whose shares are held in the name of a broker or nominee should contact the broker or nominee to determine whether and how they may participate in the Plan.

If the Fund declares a dividend payable either in common shares or in cash, nonparticipants will receive cash, and participants in the Plan will receive the equivalent in common shares. If the market price of the common shares on the payment date of the dividend is equal to or exceeds their net asset value as determined on the payment date, participants will be issued common shares (out of authorized but unissued shares) at a value equal to the higher of net asset value or 95% of the market price. If the net asset value exceeds the market price of the common shares at such time, or if the Board of Trustees declares a dividend payable only in cash, the Plan Agent will, as agent for Plan participants, buy shares in the open market, on the New York Stock Exchange or elsewhere, for the participants’ accounts. Such purchases will be made promptly after the payable date for such dividend and, in any event, prior to the next ex-dividend date after such date, except where necessary to comply with federal securities laws. If, before the Plan Agent has completed its purchases, the market price exceeds the net asset value of the common shares, the average per share purchase price paid by the Plan Agent may exceed the net asset value of the common shares, resulting in the acquisition of fewer shares than if the dividend had been paid in shares issued by the Fund.

Each participant will pay a pro rata share of brokerage commissions incurred with respect to the Plan Agent’s open market purchases in connection with the reinvestment of dividends and distributions. In each case, the cost per share of the shares purchased for each participant’s account will be the average cost, including brokerage commissions, of any shares purchased on the open market plus the cost of any shares issued by the Fund. There will be no brokerage charges with respect to common shares issued directly by the Fund. There are no other charges to participants for reinvesting dividends or capital gain distributions. Participants in the Plan may withdraw from the Plan at any time by contacting the Plan Agent by telephone, in writing or by visiting the Plan Agent’s Web site at www.melloninvestor.com. Such withdrawal will be effective immediately if received not less than ten days prior to a dividend record date; otherwise, it will be effective for al l subsequent dividend record dates. When a participant withdraws from the Plan or upon termination of the Plan, as provided below, certificates for

18


whole common shares credited to his or her account under the Plan will be issued, and a cash payment will be made for any fraction of a share credited to such account.

The Plan Agent maintains each shareholder’s account in the Plan and furnishes monthly written confirmations of all transactions in the accounts, including information needed by the shareholders for personal and tax records. The Plan Agent will hold common shares in the account of each Plan participant in noncertificated form in the name of the participant. Proxy material relating to the shareholders’ meetings of the Fund will include those shares purchased as well as shares held pursuant to the Plan. The reinvestment of dividends and distributions will not relieve participants of any federal income tax that may be payable or required to be withheld on such dividends or distributions. Participants under the Plan will receive tax information annually. The amount of dividend to be reported on 1099-DIV should be (1) in the case of shares issued by the Fund, the fair market value of such shares on the dividend payment date and (2) in t he case of shares purchased by the Plan Agent in the open market, the amount of cash used by the Plan Agent to purchase shares in the open market, including the amount of cash allocated to brokerage commissions paid on such purchases.

Experience under the Plan may indicate that changes are desirable. Accordingly, the Fund reserves the right to amend or terminate the Plan as applied to any dividend or distribution paid subsequent to written notice of the change sent to all shareholders of the Fund at least 90 days before the record date for the dividend or distribution. The Plan may be amended or terminated by the Plan Agent after at least 90 days’ written notice to all shareholders of the Fund. All correspondence or additional information concerning the Plan should be directed to the Plan Agent, Mellon Bank, N.A., c/o Mellon Investor Services, P.O. Box 3338, South Hackensack, NJ 07606-1938 (Telephone: 1-800-852-0218).

Shareholder communication
and assistance

If you have any questions concerning the Fund, we will be pleased to assist you. If you hold shares in your own name and not with a brokerage firm, please address all notices, correspondence, questions or other communications regarding the Fund to the transfer agent at:

Mellon Investor Services
Newport Office Center VII
480 Washington Boulevard
Jersey City, NJ 07310
Telephone: 1-800-852-0218

If your shares are held with a brokerage firm, you should contact that firm, bank or other nominee for assistance.

19


Board Consideration of and
Continuation of Investment Advisory
Agreement and Subadvisory
Agreement: John Hancock Patriot
Preferred Dividend Fund

The Investment Company Act of 1940 (the “1940 Act”) requires the Board of Trustees (the “Board”) of John Hancock Patriot Preferred Dividend Fund (the “Fund”), 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 Fund, 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”). 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 and a peer group of comparable funds (the “Peer Group”) selected by Morningstar Inc. (“Morningstar”), an independent provider of investment company data, for a range of periods ended December 31, 2005,2 (ii) advisory and other fees incurred by, and the expense ratios of, the Fund relative to a Peer Group, (iii) the Adviser’s financial results and condition, including its and certain of its affiliates’ profitability from services performed for the Fund, (iv) breakpoints in the Fund’s and the Peer Group’s fees and information about economies of scale, (v) the Advi ser’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, (vi) the background and experience of senior management and investment professionals, and (vii) 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 ended December 31, 2005. The Board also considered these results in comparison to the performance of the Peer Group, as well as the

20


Fund’s benchmark index. Morningstar determined 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 Peer Group. The Board noted the imperfect comparability of the Peer Group and that Morningstar was not able to select a comparative Category for the Fund.

The Board noted that the Fund’s performance during the five-year period was lower than the performance of the median of the Peer Group, but was higher than the performance of its benchmark index, the Merrill Lynch Preferred Stock DRD Eligible Index. The Board also noted that Fund’s performance during the three-year period was appreciably higher than the performance of the Peer Group median, and its benchmark index. The Board noted that the Fund’s more recent performance during the one-year period was lower than, but generally competitive with, the performance of the benchmark index, and was higher than the performance of the Peer Group median. The Adviser discussed planned changes designed to improve the Fund’s performance. The Board indicated its intent to continue to monitor the Fund’s performance trends to assess whether other remedial changes are warranted.

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. The Board noted that the Advisory Agreement Rate was not appreciably higher than the median rate of the Peer Group.

The Board received and considered expense information regarding the Fund’s various components, including advisory fees, and other non-advisory fees, including administrative fees, 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 (“Expense Ratio”). The Board received and considered information comparing the Expense Ratio of the Fund to that of the Peer Group median. The Board noted that the Fund’s Expense Ratio was higher than the Peer Group median.

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 plans for improving overall performance and lowering the Expense Ratio 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 and Subadviser’s costs are not specific to individual Funds, but rather are incurred across a variety of products and services.

The Board observed that the Advisory Agreements did not offer breakpoints.

21


However, the Board considered the limited relevance of economies of scale in the context of a closed-end fund that, unlike an open-end fund, does not continuously offer its shares. The Board noted that the Fund, as a closed-end investment company, was not expected to increase materially in size and that its assets would grow (if at all) through the investment performance of the Fund. Therefore, the Board did not consider potential economies of scale as a principal factor in assessing the fees payable under the Advisory Agreements, but concluded that the fees were fair and equitable based on relevant factors.

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.

2 Morningstar also provided a comparative analysis for most, but not all of the John Hancock Funds, of the investment performance and advisory and other fees incurred by, and the expense ratios of, the John Hancock Funds relative to a broader category of relevant funds (the “Category”). Morningstar advised the Board that it was not able to select a comparative Category for the John Hancock Patriot Preferred Dividend Fund. Therefore, Morningstar did not provide a broader Category analysis; instead, it provided only the narrower Peer Group analysis.

22



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  Gordon M. Shone  Transfer agent for 
Ronald R. Dion, Chairman  Treasurer  common shareholders 
James R. Boyle†  John G. Vrysen  Mellon Investor Services 
James F. Carlin  Chief Financial Officer  Newport Office Center VII 
Richard P. Chapman, Jr.*    480 Washington Boulevard 
William H. Cunningham  Investment adviser  Jersey City, NJ 07310 
Charles L. Ladner*  John Hancock Advisers, LLC   
Dr. John A. Moore*  601 Congress Street  Transfer agent for 
Patti McGill Peterson*  Boston, MA 02210-2805  preferred shareholders 
Steven R. Pruchansky    Deutsche Bank Trust 
*Members of the Audit Committee  Subadviser  Company Americas 
†Non-Independent Trustee  MFC Global Investment  280 Park Avenue 
  Management (U.S.), LLC  New York, NY 10017 
Officers  101 Huntington Avenue   
Keith F. Hartstein  Boston, MA 02199  Legal counsel 
President and    Kirkpatrick & Lockhart 
Chief Executive Officer  Principal distributor  Preston Gates Ellis LLP 
  John Hancock Funds, LLC  1 Lincoln Street 
Thomas M. Kinzler  601 Congress Street  Boston, MA 02111-2950 
Secretary and  Boston, MA 02210-2805   
Chief Legal Officer    Stock symbol 
Francis V. Knox, Jr.  Custodian  Listed New York Stock 
Chief Compliance Officer  The Bank of New York  Exchange: 
  One Wall Street  PPF 
  New York, NY 10286  For shareholder assistance 
    refer to page 19 

How to contact us   

 
Internet  www.jhfunds.com   

 
Mail  Regular mail:   
  Mellon Investor Services   
  Newport Office Center VII   
  480 Washington Boulevard   
  Jersey City, NJ 07310   

 
Phone  Customer service representatives  1-800-852-0218 
  Portfolio commentary  1-800-344-7054 
  24-hour automated information  1-800-843-0090 
  TDD line  1-800-231-5469 

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.

24


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.



PRESORTED
STANDARD
U.S. POSTAGE
PAID
MIS

1-800-852-0218
1-800-843-0090 EASI-Line
1-800-231-5469 (TDD)

www.jhfunds. com

P70SA 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 Patriot Preferred Dividend 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 2 b_exnn.htm CERTIFICATION b_exnn.htm

CERTIFICATION

I, Keith F. Hartstein, certify that:

1. I have reviewed this report on Form N-CSR of the John Hancock Patriot Preferred Dividend 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 Patriot Preferred Dividend 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 3 c_xnnos.htm CERTIFICATION 906 c_xnnos.htm

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 Patriot Preferred Dividend 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 4 d_codeofethics.htm CODE OF ETHICS d_codeofethics.htm

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

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

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 5 e_governcommcharter.htm GOVERNANCE COMMITTEE CHARTER e_governcommcharter.htm

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 6 f_proxyvotingpolicies.htm PROXY VOTING POLICIES f_proxyvotingpolicies.htm

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.


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