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John Hancock Funds III
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<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;"> <b>
Investment objective
</b></p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;">
The fund seeks total return, consisting of a high level of current income and capital appreciation.
</p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;"> <b>
Fees and expenses
</b></p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;">
This table describes the fees and expenses you may pay if you buy and hold shares of the fund.
</p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;"> <b>
Shareholder fees (%) (fees paid directly from your investment)</b></p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;"> <b>
Annual fund operating expenses (%) (expenses that you pay each year as a percentage of the value of your investment)</b></p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;"> <b>
Expense example
</b></p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;">
This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. Please see below a hypothetical example showing the expenses of a $10,000 investment in the fund for the time periods indicated (Kept column) and then assuming a redemption of all of your shares at the end of those periods (Sold column). The example assumes a 5% average annual return. The example assumes fund expenses will not change over the periods. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
</p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;"> <b>
Portfolio turnover
</b></p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;">
The fund pays transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the fund's performance. During its most recent fiscal year, the fund's portfolio turnover rate was 64% of the average value of its portfolio.
</p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;"> <b>
Principal investment strategies
</b></p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;">
Under normal market conditions, the fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in corporate debt securities that are rated, at the time of purchase, below investment-grade (debt securities rated Ba and below by Moody's Investors Service (Moody's) and BB and below by Standard & Poor's (S&P), and their unrated equivalents, are considered high-yield and junk bonds). Up to 30% of the total assets of the fund may be invested in debt securities of foreign issuers, including those in emerging markets. The fund may also invest up to 10% of its total assets in domestic and foreign equities of any market capitalization range.
</p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;">
The fund will invest in below-investment-grade (high-yield) securities that, at the time of purchase, offer the potential for higher returns, as they carry a higher yield to compensate for the higher risk. In deciding among securities to purchase, the subadviser may take into account the credit quality, country of issue, interest rate, liquidity, maturity and yield of a security as well as other factors, including the fund's duration and prevailing and anticipated market conditions. The corporate debt that the fund invests in includes traditional corporate bonds as well as bank loans. At the time of purchase, no more than 10% of the fund's total assets may be invested in securities that are rated in default by Moody's and S&P, and its unrated equivalents. There is no limit on the fund's average maturity. The fund may engage in derivatives transactions that include bond futures, interest-rate futures and swaps, and credit default swaps, in each case for the purpose of reducing risk and/or enhancing investment returns.
</p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;">
The subadviser uses a fundamentally driven research process that focuses on current income and capital appreciation, with the aim of managing for the potential loss of capital. The fund is constructed on a two-tier basis. The core, or first-tier, generally holds debt rated BB and B (and unrated equivalents). The second-tier holds more volatile debt, typically rated CCC and below, and, compared to the first tier, may be managed with a higher portfolio turnover or with shorter investment horizons.
</p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;"><b>
Principal risks
</b></p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;">
An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund's shares will go up and down in price, meaning that you could lose money by investing in the fund. Many factors influence a mutual fund's performance.
</p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;">
Instability in the financial markets has led many governments, including the United States government, to take a number of unprecedented actions designed to support certain financial institutions and segments of the financial markets that have experienced extreme volatility and, in some cases, a lack of liquidity. Federal, state and other governments, and their regulatory agencies or self-regulatory organizations, may take actions that affect the regulation of the instruments in which the fund invests, or the issuers of such instruments, in ways that are unforeseeable. Legislation or regulation may also change the way in which the fund itself is regulated. Such legislation or regulation could limit or preclude the fund's ability to achieve its investment objective.
</p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;">
Governments or their agencies may also acquire distressed assets from financial institutions and acquire ownership interests in those institutions. The implications of government ownership and disposition of these assets are unclear, and such a program may have positive or negative effects on the liquidity, valuation and performance of the fund's portfolio holdings. Furthermore, volatile financial markets can expose the fund to greater market and liquidity risk and potential difficulty in valuing portfolio instruments held by the fund.
</p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;">
The fund's main risk factors are listed below in alphabetical order. <i>Before investing, be sure to read the additional descriptions of these risks beginning on page 6 of the prospectus.</i>
</p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;">
<b>Active management risk</b> The subadviser's investment strategy may fail to produce the intended result.
</p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;">
<b>Changing distribution levels risk</b> The distribution amounts paid by the fund generally depend on the amount of income and/or dividends paid by the fund's investments.
</p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;">
<b>Credit and counterparty risk</b> The issuer or guarantor of a fixed-income security, the counterparty to an over-the-counter derivatives contract or a borrower of a fund's securities may be unable or unwilling to make timely principal, interest or settlement payments, or otherwise honor its obligations. Funds that invest in fixed-income securities are subject to varying degrees of risk that the issuers of the securities will have their credit rating downgraded or will default, potentially reducing a fund's share price and income level.
</p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;">
<b>Equity securities risk</b> The value of a company's equity securities is subject to changes in the company's financial condition, and overall market and economic conditions.
</p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;">
<b>Fixed-income securities risk</b> Fixed-income securities are affected by changes in interest rates and credit quality. A rise in interest rates typically causes bond prices to fall. The longer the average maturity of the bonds held by the fund, the more sensitive the fund is likely to be to interest-rate changes. There is the possibility that the issuer of the security will not repay all or a portion of the principal borrowed and will not make all interest payments.
</p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;">
<b>Foreign securities risk</b> As compared to U.S. companies, there may be less publicly available information relating to foreign companies. Foreign securities may be subject to foreign taxes. The value of foreign securities is subject to currency fluctuations and adverse political and economic developments. Investments in emerging-market countries are subject to greater levels of foreign investment risk.
</p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;">
<b>Hedging, derivatives and other strategic transactions risk</b> Hedging and other strategic transactions may increase the volatility of a fund and, if the transaction is not successful, could result in a significant loss to a fund. The use of derivative instruments could produce disproportionate gains or losses, more than the principal amount invested. Investing in derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments and, in a down market, could become harder to value or sell at a fair price. The following is a list of certain derivatives and other strategic transactions in which the fund may invest and the main risks associated with each of them:
</p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;margin-left: 40px;">
<b>Credit default swaps</b> Counterparty risk, liquidity risk (i.e., the inability to enter into closing transactions), interest-rate risk, risk of default of the underlying reference obligation and risk of disproportionate loss are the principal risks of engaging in transactions involving credit default swaps.
</p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;margin-left: 40px;">
<b>Futures contracts</b> Counterparty risk, liquidity risk (i.e., the inability to enter into closing transactions) and risk of disproportionate loss are the principal risks of engaging in transactions involving futures contracts.
</p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;margin-left: 40px;">
<b>Interest-rate swaps</b> Counterparty risk, liquidity risk (i.e., the inability to enter into closing transactions), interest-rate risk and risk of disproportionate loss are the principal risks of engaging in transactions involving interest-rate swaps.
</p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;">
<b>High portfolio turnover risk</b> Actively trading securities can increase transaction costs (thus lowering performance) and taxable distributions.
</p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;">
<b>Liquidity risk</b> Exposure exists when trading volume, lack of a market maker or legal restrictions impair the ability to sell particular securities or close derivative positions at an advantageous price.
</p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;">
<b>Lower-rated fixed-income securities risk and high-yield securities risk</b> Lower-rated fixed-income securities and high-yield fixed-income securities (commonly known as "junk bonds") are subject to greater credit quality risk and risk of default than higher-rated fixed-income securities. These securities may be considered speculative and the value of these securities can be more volatile due to increased sensitivity to adverse issuer, political, regulatory, market or economic developments and can be difficult to resell.
</p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;">
<b>Medium and smaller company risk</b> The prices of medium and smaller company stocks can change more frequently and dramatically than those of large company stocks. For purposes of the fund's investment policies, the market capitalization of a company is based on its market capitalization at the time the fund purchases the company's securities. Market capitalizations of companies change over time.
</p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;"><b>
Past performance
</b></p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;">
The following performance information in the bar chart and table below illustrates the variability of the fund's returns and provides some indication of the risks of investing in the fund by showing changes in the fund's performance from year to year. However, past performance (before and after taxes) does not indicate future results. All figures assume dividend reinvestment. Performance for the fund is updated daily, monthly and quarterly and may be obtained at our Web site: www.jhfunds.com/FundPerformance, or by calling 1-800-225-5291, Monday–Thursday between 8:00 A.M. and 7:00 P.M. and on Fridays between 8:00 A.M. and 6:00 P.M., Eastern Time.
</p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;">
<b>Calendar year total returns</b> These do not include sales charges and would have been lower if they did.
</p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;">
<b>Average annual total returns</b> Performance of a broad-based market index is included for comparison.
</p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;">
<b>After-tax returns</b> They reflect the highest individual federal marginal income tax rates in effect as of the date provided and do not reflect any state or local taxes. Your actual after-tax returns may be different. After-tax returns are not relevant to shares held in an IRA, 401(k) or other tax-advantaged investment plan.
</p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;">
Prior to March 12, 2012, the fund was not open to investment by the general public. Performance prior to this date does not reflect additional expenses associated with publicly offering the fund's shares. Because Class C shares of the fund had not commenced operations prior to the date of this prospectus, the returns shown are those of Class A shares that have been recalculated to apply the gross fees and expenses of Class C shares.
</p>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;"><b>
Calendar year total returns — Class C (%)
</b></p>
Best quarter:
0.1303
Worst quarter:
-0.0543
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0.0000
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0.0065
0.0100
0.0251
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<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;"> <b>Sold </b></p>
296
726
1283
2802
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;"> <b>Kept </b></p>
196
726
1283
2802
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However, past performance (before and after taxes) does not indicate future results.
The following performance information in the bar chart and table below illustrates the variability of the fund's returns and provides some indication of the risks of investing in the fund by showing changes in the fund's performance from year to year.
Average annual total returns Performance of a broad-based market index is included for comparison.
Calendar year total returns These do not include sales charges and would have been lower if they did.
Because Class C shares of the fund had not commenced operations prior to the date of this prospectus, the returns shown are those of Class A shares that have been recalculated to apply the gross fees and expenses of Class C shares.
0.0537
Year-to-date total return The fund's total return for the three months ended March 31, 2012 was 6.10%.
0.0610
2012-03-31
2009-09-30
2011-09-30
<pre>
Year-to-date total return The fund's total return for the three months ended March 31, 2012 was 6.10%.
Best quarter: Q3 '09, 13.03%
Worst quarter: Q3 '11, –5.43%
</pre>
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;"><b>
Average annual total returns (%) as of 12-31-11
</b></p>
After-tax returns They reflect the highest individual federal marginal income tax rates in effect as of the date provided and do not reflect any state or local taxes
Your actual after-tax returns may be different. After-tax returns are not relevant to shares held in an IRA, 401(k) or other tax-advantaged investment plan.
0.0446
0.0437
0.1826
0.2041
2009-04-30
2009-04-30
-0.0022
0.1167
0.0368
0.1200
2009-04-30
2009-04-30
The fund's shares will go up and down in price, meaning that you could lose money by investing in the fund.
An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
0.0100
<p style="font-size:12;padding-top:2;padding-bottom:0;padding-left:0;"> <b>
Expenses ($)
</b></p>
2014-06-30
0.64
"Other expenses" have been estimated for the first year of operations of the fund's Class C shares.
www.jhfunds.com/FundPerformance
1-800-225-5291
0.1919
JYICX
"Other expenses" have been estimated for the first year of operations of the fund's Class C shares.
The adviser has contractually agreed to reduce its management fee or, if necessary, make payment to the fund to the extent necessary to maintain the fund's total operating expenses at 1.93% for Class C shares, excluding certain expenses such as taxes, brokerage commissions, interest expense, litigation and indemnification expenses and other extraordinary expenses, acquired fund fees and expenses paid indirectly and short dividend expense. The current expense limitation agreement will remain in effect through June 30, 2014, unless renewed by mutual agreement of the fund and the adviser based upon a determination that this is appropriate under the circumstances at the time.