Subject: IC940712: SPECIAL - JH Bank Fund

From: "Gray Zhu, 800-289-2498, 212-279-6700" <[email-masked]>
Date: Mon, 11 Jul 94 22:21:48 CDT

==================    IC940712: Investment Club  ======================

            John Hancock Freedom Regional Bank Fund Special
            ===============================================

 (I have got a lot of phone calls and E-mail messages concerning the JH
  Bank Fund. I'd like to summarize the questions and contributions here.)

1. "A" share and "B" share (Front or back load, choose one)
2. Minimum purchase ($2000)
3. Is the price too high (P/E=9.5)
4. Where to buy (JH or broker)
5. Commission
6. Comparison with others
7. Fund size ($540 Million, doubled in last 2 months, inception 1985)
8. About John Hancock 
   (A financial services company in Boston, over 20 funds)
9. Why close, does close means close-end Fund? (NO)
_______________________________________________________________________
   (be sure to read the Disclaimer in the end if you have not read)

1. "A" share and "B" share

There are two kinds of shares, "A" and "B". they are just two
different ways of buying it. - same fund.  A share has a front load of
5%, and B share has a decreasing sales charge (back-load or redemption
fee) of

5% if redeem 1st year
4% if redeem 2nd year
3% if redeem 3rd year
3% if redeem 4th year
2% if redeem 5th year
1% if redeem 6th year
0 after

after 8 years, B share will be converted into A share. 

A shares has less charge on management fee, A: 1.4%, B: 2.1%.  

Both A and B are selling around $22 (NAV) a share.

Buying A or B is a matter of "5/10" or "8/16". Comparing them you have
to know how the fund performs, where it goes, nobody can predict
that. I respect customer's choice.  You can flip a coin to decide.  I
would buy A for myself. But as a matter of fact, most of my clients
bought B. Because most people do not want to pay a charge, they put
money to make money.

2. Minimum purchase

My minimum order is $2000, JH's minimum is $1000.

3. Is the price too high.

Someone says the fund has appreciated a lot, is it at high price?
Consider its P/E ratio at 9.5 and S&P 500 P/E is about 17 or 18. the
while bank group is selling at a discount vs S&P 500.

Mutual funds are not sold by shares, you can have fractional shares
(like 90.879506007 shares).

4. Where to buy

You can buy either through me or from John Hancock. If you do not want
to buy through me, I can still provide you information (free).

5. Commission

>From: [email-masked] (Zhiqiang Zhou)
>You said that your commission is about 1%-5%. Does that apply to
>closed-end funds? Say, 10 share of CHN, what's your commission?

Close end funds are actually stocks. So it applies stock commission
rate. If your purchase is like $2000-$3000, the commission is likely
$90 or so.  10 shares of CHN would be $75 (I personally get $0).

6. Comparison with others

There are other funds which have better yield than this one. As a
matter of fact, Fedelity has two similar funds. My suggestion was
based on a) low risk - low volitility, b) best risk-adjusted return
Alpha, c) overall past performance and management (JH Bank Fund Jim
Schmit's profile is on the New York times July 3 1994). I may promote
the other funds as well. You can check them out for yourself, if you
really find the others beat this one, I can sell them to you, or you
can buy for yourself.

7. Fund size

The total asset is about $540 currently (July 3, NY TIMES). It has
doubled in the past two months.

Inception was 1985.

8. About John Hancock

JH is a life insurance company and financial services company. It is
the 3rd most recognized name in the financial industry.

They are a number of good funds in the family, such as Special Equity
Fund which closed earlier, the manager Mike Dicarlo, a musician, said
to be the second Peter Lynch, small stock wiz. He started another
similar fund Special Opportunity Fund (relatively stable than the
Special Equity Fund, because this new one has a lot of blue chips)
which is down a lot this year, currently selling at about IPO price;
Soverign Investor Fund (Blue chip like) has made gain in each of the
past 15 years - very consistent.

9. Why close, does close means close-end Fund?

Because the fund double size last 2 months, it has some uninvested
cash, which doesn't make money. It is like 7 people's production
shared by 10. Close to new investor, the manage can arrange jobs for
the 3 free guys.

This is a perfect example of load vs no-load. The market is down,
people like to withdraw money from no-loads, while this one doubled in
size in the last two months.

The fund will still be called open-ended. Close-end fund is really a
company like GM, the difference is that GM deals with cars, and
closed-end fund deals with stocks. There is no tight relation between
GM and its stocks except dividend or new offering. But open-ended fund
is directly invest your money. Close-end fund could be selling below
NAV(Net Asset Value) and it cannot happen for open-ended funds.

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