N-CSR 1 a_munisecuritiestrust.htm JOHN HANCOCK MUNICIPAL SECURITIES TRUST a_munisecuritiestrust.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- 5968 
 
John Hancock Municipal Securities Trust 
(Exact name of registrant as specified in charter) 
 
601 Congress Street, Boston, Massachusetts 02210 
(Address of principal executive offices) (Zip code) 
 
Michael J. Leary
Treasurer
 
601 Congress Street 
 
Boston, Massachusetts 02210 
 
(Name and address of agent for service) 
 
Registrant's telephone number, including area code: 617-663-4490 
 
Date of fiscal year end:  May 31 
 
 
Date of reporting period:  May 31, 2009 

ITEM 1. REPORT TO SHAREHOLDERS.


Discussion of Fund performance

By MFC Global Investment Management (U.S.), LLC

The Fund’s fiscal year-end recently changed from August 31 to May 31. As a result, this report covers the period from September 1, 2008, to May 31, 2009.

Municipal bonds posted positive returns for the nine months ended May 31, 2009, despite an unprecedented level of volatility. Municipal bonds fell sharply throughout the last four months of 2008 as a crisis in the credit markets and a deepening economic downturn led investors to shun risk-related assets. However, municipal bonds bounced back in the latter half of the period as unprecedented government intervention helped ease the credit crunch and the economy began to show early signs of stabilization. The credit environment remained challenging as the severe downturn in the U.S. economy led to a substantial drop in tax revenues, resulting in budget shortfalls. After expending their reserve funds, state governments are now facing hard choices on spending cuts and tax hikes.

For the nine months ended May 31, 2009, John Hancock Tax-Free Bond Fund’s Class A shares posted a total return of 0.66% at net asset value. By comparison, Morningstar, Inc.’s muni national long fund category produced an average return of 0.10%, while the much broader-based Barclays Capital Municipal Bond Index, the Fund’s benchmark, returned 3.15%. It lagged its benchmark index, which is more dominated by large, more liquid issues that held up better. We believe that the Fund’s outperformance of its Morningstar peer group average resulted from its defensive positioning, with an emphasis on high-quality municipal bonds and shorter-term securities. This added value during the municipal market sell-off in late 2008 but detracted in the last half of the period as longer-term bonds and lower-quality securities led the municipal market rebound in early 2009. The best performers were essential-services revenue bonds, which finance basic services such as utilities, water and sewer. Conversely, widening credit spreads during most of the period hurt the performance of lower-quality credits, although considerable spread tightening at the end of the period mitigated some of the losses.

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.

Past performance is no guarantee of future results.

Investments concentrated in one industry may fluctuate more widely than investments diversified across industries. Because the Fund may focus on particular industries, its performance may depend on the performance of those industries.

The major factors in this Fund’s performance are interest rates and credit risk. When interest rates rise, bond prices usually fall. Generally, an increase in the Fund’s average maturity will make it more sensitive to interest-rate risk.

6  Tax-Free Bond Fund | Annual report 

A look at performance

For the period ended May 31, 2009

    Average annual returns (%)  Cumulative total returns (%)  SEC 30-   
    with maximum sales charge (POP)  with maximum sales charge (POP)  day yield   
  Inception 
(%) as of   
Class  date  1-year  5-year  10-year  1-year  5-year  10-year  5-31-09   
A  1-5-90  –3.76  2.79  3.32  –3.76  14.72  38.60  4.25 
B  12-31-91  –4.75  2.62  3.18  –4.75  13.80  36.75  3.70 
C  4-1-99  –0.91  2.96  2.99  –0.91  15.71  34.31  3.69 

Performance figures assume all distributions are reinvested. Public offering price (POP) figures reflect maximum sales charges on Class A shares of 4.5% and the applicable contingent deferred sales charge (CDSC) on Class B and Class C shares. The returns for Class C shares have been adjusted to reflect the elimination of the front-end sales charge effective July 15, 2004. The Class B shares’ CDSC declines annually between years 1 to 6 according to the following schedule: 5, 4, 3, 3, 2, 1%. No sales charge will be assessed after the sixth year. Class C shares held for less than one year are subject to a 1% CDSC.

The expense ratios of the Fund, both net (including any fee waivers or expense limitations) and gross (excluding any fee waivers or expense limitations), are set forth according to the most recent publicly available prospectus for the Fund and may differ from the expense ratios disclosed in the Financial Highlights tables in this report. The net expenses equal the gross expenses and are as follows: Class A — 1.02%, Class B — 1.77% and Class C — 1.77%. Expenses for the current period may be higher than those shown in the “Annual operating expenses” table for one or more of the following reasons: (i) a significant decrease in average net assets may result in a higher advisory fee rate if advisory fee breakpoints are not achieved; (ii) a significant decrease in average net assets may result in an increase in the expense ratio because certain fund expenses do not decrease as asset levels decrease; or (iii) the termination of voluntary expense cap reimbursements and/or fee waivers, as applicable.

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

The performance table above and the chart on the next page do not reflect the deduction of taxes that a shareholder may pay on fund distributions or on the redemption of fund shares. Please note that a portion of the Fund’s income may be subject to taxes, and some investors may be subject to the Alternative Minimum Tax (AMT). Also note that capital gains are taxable.

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

Annual report | Tax-Free Bond Fund  7 

A look at performance

Growth of $10,000

This chart shows what happened to a hypothetical $10,000 investment in John Hancock Tax-Free Bond Fund Class A shares for the period indicated. For comparison, we’ve shown the same investment in the Barclays Capital Municipal Bond Index.


 

      With maximum   
Class  Period beginning  Without sales charge  sales charge  Index 
B2  5-31-99  $13,675  $13,675  $16,209 
C2  5-31-99  13,431  13,431  16,209 

Assuming all distributions were reinvested for the period indicated, the table above shows the value of a $10,000 investment in the Fund’s Class B and Class C shares, respectively, as of May 31, 2009. The Class C shares investment with maximum sales charge has been adjusted to reflect the elimination of the front-end sales charge effective July 15, 2004. Performance of the classes will vary based on the difference in sales charges paid by shareholders investing in the different classes and the fee structure of those classes.

Barclays Capital Municipal Bond Index is an unmanaged index that includes municipal bonds and is commonly used as a measure of bond performance.

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

1 NAV represents net asset value and POP represents public offering price.

2 No contingent deferred sales charge applicable.

8  Tax-Free Bond Fund | Annual report 

Your expenses

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

Understanding fund expenses

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

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

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

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

Actual expenses/actual returns

This example is intended to provide information about your fund’s actual ongoing operating expenses, and is based on your fund’s actual return. It assumes an account value of $1,000.00 on March 1, 2009 with the same investment held until May 31, 2009.

  Account value  Ending value  Expenses paid during 
  on 3-1-09  on 5-31-09  period ended 5-31-091 
Class A  $1,000.00  $1,035.10  $2.82 
Class B  1,000.00  1,033.20  4.71 
Class C  1,000.00  1,033.20  4.71 

Together with the value of your account, you may use this information to estimate the operating expenses that you paid over the period. Simply divide your account value at May 31, 2009, by $1,000.00, then multiply it by the “expenses paid” for your share class from the table above. For example, for an account value of $8,600.00, the operating expenses should be calculated as follows:


1 Expenses are equal to the Fund’s annualized expense ratio of 1.10%, 1.84% and 1.84% for Class A, Class B and Class C shares, respectively, multiplied by the average account value over the period, multiplied by 92/365 (to reflect the three month period).

Annual report | Tax-Free Bond Fund  9 

Your expenses

Hypothetical example for comparison purposes

This table allows you to compare your fund’s ongoing operating expenses with those of any other fund. It provides an example of the Fund’s hypothetical account values and hypothetical expenses based on each class’s actual expense ratio and an assumed 5% annualized return before expenses (which is not your fund’s actual return). It assumes an account value of $1,000.00 on December 1, 2008, with the same investment held until May 31, 2009. Look in any other fund shareholder report to find its hypothetical example and you will be able to compare these expenses.

  Account value  Ending value  Expenses paid during 
  on 12-1-08  on 5-31-09  period ended 5-31-091 
Class A  $1,000.00  $1,019.40  $5.54 
Class B  1,000.00  1,015.80  9.25 
Class C  1,000.00  1,015.80  9.25 

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

1 Expenses are equal to the Fund’s annualized expense ratio of 1.10%, 1.84% and 1.84% for Class A, Class B and Class C shares, respectively, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period).

10  Tax-Free Bond Fund | Annual report 

Portfolio summary

Top 10 holdings1   
Alabama Public School & College Authority, 12-1-24, 5.000%  4.7% 
Foothill Eastern Transportation Corridor Agency, 1-1-19, Zero  4.7% 
Commonwealth of Puerto Rico, 7-1-11, 9.532%  3.4% 
Madera County Certificates of Participation, 3-15-15, 6.500%  3.2% 
Foothill Eastern Transportation Corridor Agency, 1-1-16, 6.000%  2.3% 
San Bernardino County, 8-1-17, 5.500%  2.2% 
Commonwealth of Massachusetts, 12-1-24, 5.500%  2.1% 
Triborough Bridge & Tunnel Authority, 11-15-33, 5.000%  2.0% 
San Joaquin Hills Transportation Corridor Agency, 1-15-17, 5.650%  1.9% 
Puerto Rico Aqueduct & Sewer Authority, 7-1-11, 10.021%  1.7% 

Industry composition2,3       
General obligation bonds  8%  Development  5% 
Revenue bonds    Pollution  5% 
Other revenue  20%  Airport  3% 
Transportation  18%  Utilities  3% 
Education  17%  Tobacco  2% 
Power  9%  Miscellaneous  3% 
Health care  7%     
Quality composition2       
AAA  23%  BB  4% 
AA  47%  CCC  1% 
A  11%  Miscellaneous  3% 
BBB  11%     
 

1 As a percentage of net assets on May 31, 2009. Excludes cash and cash equivalents.

2 As a percentage of net assets on May 31, 2009.

3 Investments concentrated in one industry may fluctuate more widely than investments diversified across industries. Because the Fund may focus on particular industries, its performance may depend on the performance of those industries.

Annual report | Tax-Free Bond Fund  11 

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

Fund’s investments

Securities owned by the Fund on 5-31-09

  Interest  Maturity Par value   
State, issuer, description  rate  date  (000)  Value 
Bonds 1.30%        $5,861,910 
(Cost $7,000,000)         
 
Diversified Financial Services 0.62%        2,799,600 
Municipal Mortgage & Equity, LLC,         
 Bond (P)(S)  6.875%  06-30-49  4,000  2,799,600 
 
Thrifts & Mortgage Finance 0.68%        3,062,310 
Charter MAC Equity Issuer Trust,         
 Ser. A–4-1 (S)  5.750  04-30-15  3,000  3,062,310 
 
  Interest  Maturity  Par value  
State, issuer, description  rate  date  (000)  Value 
Tax-exempt long-term bonds 97.50%        $438,690,594 
(Cost $416,087,058)         
 
Alabama 4.71%        21,196,000 
Alabama Public School & College Authority  5.000%  12-01-24  $20,000  21,196,000 
 
Arizona 2.90%        13,056,010 
Arizona Health Facilities Authority,         
 Vanguard Health Systems, Inc. (H)  8.200  06-01-21  2,150  2,150 
Maricopa County Pollution         
 Control Corp.,         
 El Paso Electric Co. Project, Ser. B  7.250  04-01-40  1,000  1,058,980 
Phoenix Civic Improvement         
 Corp. District,         
 Civic Plaza, Ser. B (D)  Zero  07-01-28  1,000  828,690 
Salt River Project Agricultural Improvement         
 & Power District Electric System,         
 Ser. A  5.000  01-01-33  7,000  7,126,910 
 Ser. A  5.000  01-01-39  4,000  4,039,280 
 
California 19.40%        87,271,602 
California Economic Recovery,         
 General Obligation Ser C–5 (V)  Zero  07-01-23  1,500  1,500,000 
California General Obligation,         
 Daily Kindergarten University, Ser. A–4 (V)  Zero  05-01-34  600  600,000 
Foothill Eastern Transportation         
 Corridor Agency,         
 Capital Appreciation  Zero  01-15-25  5,000  1,478,600 
 Capital Appreciation, Ser. A  Zero  01-01-19  30,000  21,068,400 
 Prerefunded, Ser. A  6.000  01-01-16  10,000  10,329,600 

See notes to financial statements

12  Tax-Free Bond Fund | Annual report 

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

  Interest  Maturity  Par value  
State, issuer, description  rate  date  (000)  Value 
California (continued)         
Madera County Certificates         
 of Participation,         
 Valley Children’s Hospital (D)   6.500%  03-15-15  $13,185  $14,254,961 
Millbrae Residential Facility Revenue,         
 Magnolia of Millbrae Project, Ser. A  7.375  09-01-27  1,750  1,502,568 
Sacramento City Financing Authority,         
 Convention Center Hotel, Ser. A  6.250  01-01-30  4,000  4,099,400 
San Bernardino County,         
 Certificates of Participation, Medical         
 Center Project  5.500  08-01-22  2,500  2,488,225 
 Medical Center Financing Project (D)  5.500  08-01-17  9,130  9,728,654 
San Diego Redevelopment Agency,         
 City Heights, Ser. A  5.750  09-01-23  25  20,596 
San Joaquin Hills Transportation         
 Corridor Agency,         
 Toll Road Revenue  Zero  01-01-14  5,000  4,485,600 
 Toll Road Revenue  Zero  01-01-17  4,900  3,827,978 
 Toll Road Revenue,  Zero  01-01-20  2,000  1,330,020 
 Toll Road Revenue, Ser. A  5.650  01-15-17  10,000  8,363,400 
Santa Ana Financing Authority,         
 Police Admin & Holding Facility, Ser. A (D)  6.250  07-01-19  2,000  2,193,600 
 
Colorado 2.72%        12,249,655 
Colorado Springs Utilities Revenue,         
 Ser. C  5.250  11-15-42  2,825  2,833,277 
E-470 Public Highway Authority,         
 Capital Appreciation, Ser. B  Zero  09-01-34  7,000  1,134,490 
 Ser. B1 (D)  5.500  09-01-24  2,000  1,795,540 
Northwest Parkway Public         
 Highway Authority,         
 Prerefunded Ser. D  7.125  06-15-41  2,900  3,091,313 
Public Authority for Colorado Energy,         
 Natural Gas Purchase Revenue  6.250  11-15-28  3,500  3,395,035 
 
Connecticut 0.69%        3,086,130 
Connecticut State Health & Educational         
 Facility Authority,         
 Yale University, Ser. Z3  5.050  07-01-42  3,000  3,086,130 
 
District of Columbia 1.65%        7,435,930 
District of Columbia,         
 Georgetown University  5.500  04-01-36  3,000  3,023,730 
District of Columbia,         
 Tobacco Settlement Financing Corp.  6.500  05-15-33  5,000  4,412,200 
 
Florida 5.84%        26,276,022 
Bonnet Creek Resort Community         
 Development District,         
 Special Assessment  7.375  05-01-34  1,500  1,216,695 
 Special Assessment  7.250  05-01-18  1,000  889,050 
Capital Projects Finance Authority,         
 Student Housing Revenue, Ser. A  7.850  08-15-31  3,500  3,892,595 
 Student Housing Revenue, Ser. G  9.125  10-01-11  900  910,575 
Capital Trust Agency,         
 Seminole Tribe Convention, Ser. A  8.950  10-01-33  3,000  3,756,420 
Crossings At Fleming Island Community         
 Development District, Ser. C  7.100  05-01-30  1,000  833,640 

See notes to financial statements

Annual report | Tax-Free Bond Fund  13 

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

  Interest  Maturity   Par value   
State, issuer, description  rate  date  (000)  Value 
Florida (continued)         
Hernando County, Criminal Justice         
 Complex Financing (D)   7.650%  07-01-16  $500  $616,695 
Miami-Dade County Aviation Revenue,         
 Ser. A  5.500  10-01-36  4,250  4,109,750 
Orange County School Board,         
 Ser. A (D)  Zero  08-01-13  5,000  4,444,650 
Orlando Urban Community         
 Development District,         
 Ser. A  6.950  05-01-33  2,400  2,641,560 
Orlando Utilities Commission,         
 Water & Electric Revenue, Ser. D  6.750  10-01-17  2,200  2,635,842 
Stoneybrook West Community         
 Development District,         
 Ser. A  7.000  05-01-32  310  328,550 
 
Georgia 5.10%        22,957,900 
Atlanta Tax Allocation,         
 Eastside Project, Ser. B  5.600  01-01-30  1,000  733,250 
Georgia Municipal Electric Authority,         
 Prerefunded, Ser. 2005 (D)  6.500  01-01-17  60  72,337 
 Prerefunded, Ser. Z (D)  5.500  01-01-20  150  164,651 
 Refunded, Ser. Y (D)  6.500  01-01-17  145  171,480 
 Ser. BB  5.700  01-01-19  1,000  1,104,720 
 Ser. C (D)  5.700  01-01-19  5,000  5,523,600 
 Ser. EE (D)  7.250  01-01-24  2,000  2,478,560 
 Unrefunded, Ser. 2005 (D)  6.500  01-01-17  4,635  5,287,654 
 Unrefunded, Ser. Z (D)  5.500  01-01-20  5,690  6,321,988 
Monroe County Development Authority,         
 Oglethorpe Power Corp., Ser. A  6.800  01-01-12  1,000  1,099,660 
 
Illinois 6.53%        29,368,340 
Chicago Board of Education,         
 Capital Appreciation, City Colleges (D)  Zero  01-01-16  2,850  2,285,244 
 Capital Appreciation, Ser. A (D)  Zero  12-01-18  5,440  3,619,722 
 General Obligation, Ser. A (D)  5.500  12-01-30  3,650  3,964,630 
Chicago Tax Increment Revenue,         
 Pilsen Redevelopment, Ser. B  6.750  06-01-22  3,000  2,744,280 
Illinois Development Finance Authority,         
 Pollution Control Revenue,         
 Edison Project (D)  5.850  01-15-14  3,000  3,123,840 
Illinois Finance Authority,         
 Rush-Copley Medical Center, Inc.,         
 Ser. A  7.250  11-01-38  1,500  1,618,800 
Kane County Community Unit School         
 District No. 304,         
 Ser. A (D)  Zero  01-01-17  4,705  3,473,231 
Lake County Community Consolidated         
 School District No. 24,         
 General Obligation (D)  Zero  01-01-22  2,440  1,230,882 
Round Lake Lakewood Grove Special         
 Service Area No. 1,         
   Prerefunded  6.700  03-01-33  1,000  1,166,080 
Will County Community Unit School         
 District No. 365,         
 General Obligation (D)  Zero  11-01-21  5,780  3,144,898 
 General Obligation, Ser. B (D)  Zero  11-01-14  3,510  2,996,733 

See notes to financial statements

14  Tax-Free Bond Fund | Annual report 

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

  Interest  Maturity  Par value   
State, issuer, description  rate  date  (000)  Value 
Kansas 0.22%        $1,008,020 
Burlington Environmental Improvement,         
 Kansas City Power & Light, Ser. B (D)   5.375%  09-01-35  $1,000  1,008,020 
 
Kentucky 2.17%        9,759,056 
Kentucky Economic Development         
 Finance Authority,         
 Louisville Arena Project, Ser. A–1 (D)  6.000  12-01-33  1,000  1,036,570 
 Prerefunded, Norton Healthcare,         
 Ser. C (D)  6.100  10-01-21  1,770  2,083,095 
 Unrefunded, Norton Healthcare,         
 Ser. C (D)  6.100  10-01-21  3,230  3,254,516 
Kentucky State Property &         
 Buildings Commission,         
 Project No. 93 (D)  5.250  02-01-29  3,250  3,384,875 
 
Louisiana 0.56%        2,499,702 
Jefferson Parish Home         
 Mortgage Authority,         
 Single Family Mortgage Revenue,         
 Ser. B–1  6.750  06-01-30  490  504,852 
Louisiana Local Government         
 Environmental Facilities,         
 Westlake Chemical Corp. Project  6.750  11-01-32  2,500  1,994,850 
 
Massachusetts 4.37%        19,657,403 
Commonwealth of Massachusetts,         
 General Obligation, Ser. C (D)  5.500  12-01-24  8,000  9,437,760 
Massachusetts Bay         
 Transportation Authority,         
 Ser. A–2  Zero  07-01-26  13,595  5,626,291 
Massachusetts Health & Educational         
 Facilities Authority,         
 Civic Investments, Ser. B  9.200  12-15-31  3,500  4,431,770 
 Unrefunded, Partners Healthcare,         
 Ser. C  5.750  07-01-32  85  86,241 
Massachusetts Water         
 Pollution Abatement,         
 Unrefunded, Ser. A  6.375  02-01-15  75  75,341 
 
Michigan 0.81%        3,633,140 
Detroit Water Supply System Revenue,         
 Ser. B (D)  7.000  07-01-36  1,000  1,116,540 
Michigan Strategic Fund Ltd,         
 Dow Chemical Project  6.250  06-01-14  2,500  2,516,600 
 
Missouri 0.24%        1,084,469 
Fenton Tax Increment Revenue,         
 Gravois Bluffs Improvements  7.000  10-01-21  955  1,084,469 
 
Nebraska 1.33%        6,000,535 
Central Plains Energy Project Revenue,         
 Project No. 1, Ser. A  5.250  12-01-20  4,970  4,575,283 
Omaha Public Power District,         
 Ser. B  6.200  02-01-17  1,200  1,425,252 

See notes to financial statements

Annual report | Tax-Free Bond Fund  15 

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

  Interest  Maturity  Par value   
State, issuer, description  rate  date  (000)  Value 
Nevada 0.01%        $25,126 
State of Nevada,         
 General Obligation, Unrefunded,         
 Ser. A   6.750%  07-01-09  $25  25,126 
 
New Hampshire 0.72%        3,235,798 
New Hampshire Business         
 Finance Authority,         
 Public Service Co., Ser. C (D)  5.450  05-01-21  $2,000  1,974,060 
New Hampshire Health & Education         
 Facilities Authority, Exeter Project  6.000  10-01-24  1,250  1,261,738 
 
New Jersey 4.12%        18,527,332 
New Jersey Economic         
 Development Authority,         
 Newark Marriott Hotel  7.000  10-01-14  1,000  907,460 
New Jersey Health Care Facilities         
 Financing Authority, Care Institute,         
 Inc., Cherry Hill Project  8.000  07-01-27  1,120  905,744 
New Jersey State Turnpike Authority,         
 Ser. E  5.250  01-01-40  2,500  2,537,525 
Tobacco Settlement Financing Corp.,         
 Prerefunded  6.750  06-01-39  5,000  5,959,400 
 Prerefunded  6.250  06-01-43  4,000  4,704,080 
 Ser. 1A  4.500  06-01-23  3,995  3,513,123 
 
New Mexico 0.44%        2,001,160 
Farmington Pollution Control Revenue,         
 Tucson Electric Power Co., Ser. A  6.950  10-01-20  2,000  2,001,160 
 
New York 11.30%        50,849,741 
New York City Industrial         
 Development Agency,         
 Terminal One Group Project  5.500  01-01-24  1,500  1,386,495 
 World Trade Center Project, Ser. A  6.250  03-01-15  2,000  1,742,920 
New York City Municipal Water         
 Finance Authority,         
 Ser. 2009-EE  5.250  06-15-40  3,000  3,074,070 
 Unrefunded, Ser. B  6.000  06-15-33  375  396,431 
New York City Transitional         
 Finance Authority,         
 Ser. A  Zero  11-01-29  5,000  4,750,750 
 Ser. S-3  5.375  01-15-34  2,000  2,008,060 
 Ser. S-3  5.250  01-15-39  3,000  2,937,990 
 Ser. S-4  5.500  01-15-39  2,995  3,032,737 
New York Liberty Development Corp.,         
 Goldman Sachs Group, Inc.  5.250  10-01-35  3,000  2,782,170 
New York State Dormitory Authority,         
 City University Systems, Ser. A  5.750  07-01-09  515  517,245 
 Prerefunded, Ser. B  7.500  05-15-11  90  95,325 
 State University Facilities, Ser. A  5.500  05-15-19  1,000  1,116,270 
 Unrefunded, Ser. B  7.500  05-15-11  145  160,370 
New York State Housing Finance Agency, Ser. A  8.000  05-01-11  915  986,672 
Port Authority of New York & New Jersey,         
 144th Construction Project  5.000  10-01-29  3,500  3,603,740 
 KICA Partners  6.750  10-01-19  8,700  6,791,568 

See notes to financial statements

16  Tax-Free Bond Fund | Annual report 

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

  Interest  Maturity  Par value  
State, issuer, description  rate  date  (000)  Value 
New York (continued)         
Triborough Bridge & Tunnel Authority,         
 General Purpose   5.000%  11-15-33  $9,025  $9,109,203 
 Ser. A  5.000  11-15-22  3,545  3,801,445 
Westchester Tobacco Asset         
 Securitization Corp.,         
 Capital Appreciation  Zero  07-15-39  2,000  2,556,280 
 
Ohio 1.34%        6,013,937 
Buckeye Ohio Tobacco Settlement         
 Financing Authority,         
 Ser A–2  5.125  06-01-24  5,775  4,971,467 
Ohio Air Quality Development Authority,         
 FirstEnergy Solutions Corp., Ser. C  7.250  11-01-32  1,000  1,042,470 
 
Oklahoma 0.41%        1,832,620 
Tulsa Municipal Airport Trust Trustees,         
 AMR Corp., Ser. A (P)  7.750  06-01-35  2,000  1,832,620 
 
Oregon 0.86%        3,883,317 
Clackamas County School District No. 12,         
 General Obligation, Ser. B (D)  Zero  06-15-28  3,130  2,888,521 
Western Generation Agency,         
 Wauna Cogeneration Project, Ser. B  5.000  01-01-14  1,100  994,796 
 
Pennsylvania 3.81%        17,144,455 
Allegheny County Hospital         
 Development Authority,         
 West Penn Health Systems, Ser. A  5.000  11-15-28  3,500  2,196,565 
Allegheny County Industrial         
 Development Authority,         
 US Steel Corp.  5.500  11-01-16  2,500  2,241,475 
Allegheny County         
 Redevelopment Authority,         
 Pittsburgh Mills Project  5.600  07-01-23  1,000  769,780 
Carbon County Industrial         
 Development Authority,         
 Panther Creek Partners Project  6.700  05-01-12  4,960  4,901,670 
Philadelphia Authority for         
 Industrial Development,         
 Commerical Development  7.750  12-01-17  3,250  2,802,605 
Philadelphia School District,         
 General Obligation, Ser. E  6.000  09-01-38  4,000  4,232,360 
 
Puerto Rico 5.18%        23,317,176 
Commonwealth of Puerto Rico,         
 Inverse Floater (D)(P)  9.532  07-01-11  14,000  15,259,160 
Puerto Rico Aqueduct & Sewer Authority,         
 Inverse Floater (D)  10.021  07-01-11  6,500  7,837,440 
 Inverse Floater (D)  6.000  07-01-11  200  220,576 
 
Rhode Island 0.19%        871,546 
Town of Tiverton, Tax         
 Increment Revenue,         
 Mount Hope Bay Village, Ser. A  6.875  05-01-22  960  871,546 

See notes to financial statements

Annual report | Tax-Free Bond Fund  17 

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

  Interest  Maturity   Par value   
State, issuer, description  rate  date  (000)  Value 
South Carolina 1.32%        $5,951,698 
Richland County,         
 International Paper Co.   6.100%  04-01-23  $3,325  2,796,658 
South Carolina State Public         
 Service Authority,         
 Santee Cooper, Ser. A  5.500  01-01-38  3,000  3,155,040 
 
South Dakota 0.98%        4,421,150 
Educational Enhancement         
 Funding Corp.,         
 Tobacco Settlement Pierre, Ser. B  6.500  06-01-32  5,000  4,421,150 
 
Texas 4.86%        21,865,986 
Bexar County Health Facilities         
 Development Corp.,         
 Army Retirement Residence Project  6.300  07-01-32  1,000  1,141,780 
Brazos River Authority, Pollution         
 Control Revenue,         
 TXU Energy Co., Ser. A  8.250  10-01-30  2,000  1,069,980 
 TXU Energy Co., Ser. A  7.700  04-01-33  1,500  780,000 
Dallas-Fort Worth International         
 Airport Revenue,         
 Ser. A–1 (D)  6.100  11-01-24  1,600  1,603,312 
Harris County,         
 General Obligation (D)  Zero  08-15-19  3,000  2,007,720 
 Ser. A  5.000  08-15-38  2,000  1,999,840 
Houston Independent School District         
 Public Financing Corp.,         
 Cesar Chavez Project, Ser. A (D)  Zero  09-15-16  900  703,881 
Mission Economic Development Corp.,         
 Allied Waste, Inc., Ser. A  5.200  04-01-18  1,000  937,820 
North Texas Tollway Authority,         
 Ser. A  6.000  01-01-25  3,000  3,181,440 
 Ser. K-2  6.000  01-01-38  4,000  4,043,320 
Texas A&M University, Ser. B  5.000  07-01-31  2,500  2,636,050 
Texas Economic Development Bank,         
 General Obligation  5.750  08-01-31  1,700  1,760,843 
 
Utah 0.85%        3,823,563 
Mountain Regional Water Service District         
 No: 2002-1, Special Assessment  7.000  12-01-18  660  605,959 
Salt Lake City,         
 IHC Hospital Inc., Ser. A  8.125  05-15-15  760  899,331 
Utah Transit Authority,         
 Ser. A (D)  5.000  06-15-35  2,265  2,318,273 
 
Washington 0.68%        3,039,815 
State of Washington,         
 General Obligation, Ser. A  6.750  02-01-15  1,000  1,151,750 
Washington Public Power         
 Supply Systems,         
 Nuclear Project No. 1, Ser. B  7.125  07-01-16  1,500  1,888,065 

See notes to financial statements

18  Tax-Free Bond Fund | Annual report 

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

  Interest  Maturity  Par value   
State, issuer, description  rate  date  (000)  Value 
West Virginia 0.72%        $3,250,860 
West Virginia State Hospial         
 Finance Authority,         
 Prerefunded, Charleston         
 Medical Center   6.750%  09-01-22  $2,400  2,600,688 
 Unrefunded, Charleston         
 Medical Center  6.750  09-01-22  600  650,172 
Wisconsin 0.47%        2,095,400 
State of Wisconsin,         
 General Obligation  5.750  05-01-33  2,000  2,095,400 
 
Total investments (Cost $423,087,058) † 98.80%      $444,552,504 
 
Other assets and liabilities, net 1.20%        $5,393,573 
 
Total net assets 100.00%        $449,946,077 

The percentage shown for each investment category is the total value of that category as a percentage of the net assets applicable to common shareholders.

(D) Bond is insured by one of these companies:

Insurance coverage  As a % of total investments 
Ambac Financial Group, Inc.    3.73% 
Assured Guaranty Ltd.    0.99% 
Financial Guaranty Insurance Company    2.93% 
Financial Security Assurance, Inc.    2.28% 
Municipal Bond Insurance Association    0.52% 
National Public Finance Guaranty Insurance Corp.  19.65% 

(H) Issuer has filed for protection under the Federal Bankruptcy Code or is in default of interest payment.

(P) Variable rate obligation. The coupon rate shown represents the rate at period end.

(S) These securities are exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be resold, normally to qualified institutional buyers, in transactions exempt from registration.

(V) Variable rate demand notes are securities whose interest rates are reset periodically at market levels. These securities are often payable on demand and are shown at their current rates as of May 31, 2009.

† At May 31, 2009, the aggregate cost of investment securities for federal income tax purposes was $421,017,245. Net unrealized appreciation aggregated $23,535,259, of which $36,928,174 related to appreciated investment securities and $13,392,915 related to depreciated investment securities.

See notes to financial statements

Annual report | Tax-Free Bond Fund  19 

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

Financial statements

Statement of assets and liabilities 5-31-09

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

Assets   
Investments, at value (Cost $423,087,058)  $444,552,504 
Receivable for fund shares sold  1,503,273 
Interest receivable  6,999,743 
Receivable from affiliates  865 
Other receivables and prepaid assets  105,373 
 
Total assets  453,161,758 
 
Liabilities   
Due to custodian  130,357 
Payable for investments purchased  2,525,000 
Payable for fund shares repurchased  86,108 
Payable to affiliates   
 Accounting and legal services fees  11,391 
 Distribution and service fees  118,985 
 Trustees’ fees  82,439 
 Management fees  201,826 
Other liabilities and accrued expenses  59,575 
 
Total liabilities  3,215,681 
  
Net assets   
Capital paid-in  $454,643,245 
Accumulated net investment income  1,533,590 
Accumulated net realized loss on investments  (27,696,204) 
Net unrealized appreciation on investments  21,465,446 
 
Net assets  $449,946,077 
  
Net asset value per share   
Class A ($411,233,807 ÷ 43,132,852 shares)  $9.53 
Class B ($11,434,556 ÷ 1,199,291 shares)1  $9.53 
Class C ($27,277,714 ÷ 2,861,258 shares)1  $9.53 
 
Maximum offering price per share   
Class A (net asset value per share ÷ 95.5%)2  $9.98 

1 Redemption price is equal to net asset value less any applicable contingent deferred sales charge.

2 On single retail sales of less than $50,000. On sales of $50,000 or more and on group sales the offering price is reduced.

See notes to financial statements

20  Tax-Free Bond Fund | Annual report 

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

Statement of operations For the periods ended 5-31-09 and 8-31-08

These Statements of Operations summarize the Fund’s investment income earned and expenses incurred in operating the Fund. It also shows net gains (losses) for the periods stated.

  Period  Year 
  ended  ended 
  5-31-091  8-31-08 
 
Investment income     
 
 
Interest  $19,358,815  $25,096,583 
 
Expenses     
Investment management fees (Note 5)  1,753,684  2,455,139 
Distribution and service fees (Note 5)  972,584  1,293,936 
Transfer agent fees (Note 5)  278,733  367,638 
Accounting and legal services fees (Note 5)  50,152  51,330 
Trustees’ fees  18,578  20,722 
State registration fees  39,223  — 
Printing and postage fees  27,031  34,770 
Professional fees  78,056  54,333 
Custodian fees  45,798  101,300 
Registration and filing fees  —  51,332 
Interest expense and fees on inverse floaters  —  253,662 
Proxy fees  133,886  — 
Miscellaneous  43,978  16,567 
 
Total expenses  3,441,703  4,700,729 
Less expense reductions (Note 5)  (1,104)  (7,468) 
 
Net expenses  3,440,599  4,693,261 
 
Net investment income  15,918,216  20,403,322 
  
Realized and unrealized gain (loss)     
Net realized loss on investments  (10,078,446)  (1,960,315) 
 
Change in net unrealized appreciation (depreciation)     
 on investments  (3,883,768)  (4,001,767) 
 
Net realized and unrealized loss  (13,962,214)  (5,962,082) 
 
Increase in net assets from operations  $1,956,002  $14,441,240 

1 For the nine month period ended May 31, 2009, the Fund changed its fiscal year end from August 31 to May 31.

See notes to financial statements

Annual report | Tax-Free Bond Fund  21 

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

 

Statements 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 three 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.

  Period  Year  Year 
  ended  ended  ended 
  5-31-091  8-31-08  8-31-07 
 
Increase (decrease) in net assets       
 
From operations       
Net investment income  $15,918,216  $20,403,322  $21,012,388 
Net realized loss  (10,078,446)  (1,960,315)  (660,264) 
Change in net unrealized appreciation       
 (depreciation)  (3,883,768)  (4,001,767)  (13,017,511) 
 
Increase in net assets resulting       
  from operations  1,956,002  14,441,240  7,334,613 
 
Distributions to shareholders       
From net investment income       
Class A  (14,433,986)  (19,028,985)  (19,973,612) 
Class B  (352,283)  (534,537)  (689,098) 
Class C  (612,034)  (336,964)  (255,262) 
 
Total distributions  (15,398,303)  (19,900,486)  (20,917,972) 
 
From Fund share transactions (Note 6)  20,314,234  (9,106,347)  (15,389,465) 
 
Total increase (decrease)  6,871,933  (14,565,593)  (28,972,824) 
  
Net assets       
Beginning of period  443,074,144  457,639,737  486,612,561 
 
Period ended  $449,946,077  $443,074,144  $457,639,737 
 
Accumulated net investment income  $1,533,590  $1,227,578  $1,109,271 

1 For the nine month period ended May 31, 2009, the Fund changed its fiscal year end from August 31 to May 31.

See notes to financial statements

22  Tax-Free Bond Fund | Annual report 

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

Financial highlights

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

CLASS A SHARES Period ended  5-31-091  8-31-08  8-31-07  8-31-06  8-31-052  8-31-042 
 
Per share operating performance             
Net asset value, beginning of period  $9.82  $9.95  $10.24  $10.41  $10.22  $9.96 
Net investment income3  0.35  0.45  0.45  0.47  0.48  0.49 
Net realized and unrealized             
 gain (loss) on investments  (0.30)  (0.13)  (0.29)  (0.18)  0.19  0.26 
Total from investment operations  0.05  0.32  0.16  0.29  0.67  0.75 
Less distributions             
From net investment income  (0.34)  (0.45)  (0.45)  (0.46)  (0.48)  (0.49) 
Net asset value, end of period  $9.53  $9.82  $9.95  $10.24  $10.41  $10.22 
Total return (%)4  0.665  3.256  1.556  2.876  6.72  7.706 
 
Ratios and supplemental data             
Net assets, end of year (in millions)  $411  $417  $434  $459  $487  $492 
Ratios (as a percentage of average             
 net assets):             
 Expenses before reductions     1.027,8  0.96  0.95  0.96  0.99  0.97 
 Interest and fees9  —  0.06  0.08  —  —  — 
 Expenses net of fee waivers     1.027,8  1.02  1.03  0.96  0.99  0.96 
 Expenses net of all fee waivers             
    and credits     1.027,8  1.02  1.03  0.96  0.99  0.96 
 Net investment income  5.057  4.53  4.45  4.54  4.71  4.87 
Portfolio turnover (%)  36  36  40  54  32  49 
 

1 For the nine month period ended May 31, 2009, the Fund changed its fiscal year end from August 31 to May 31.

2 Audited by previous Independent Registered Public Accounting Firm.

3 Based on the average of the shares outstanding.

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

5 Not annualized.

6 Total returns would have been lower had certain expenses not been reduced during the periods shown.

7 Annualized.

8 Includes proxy fees. The impact of this expense to the gross and net expense ratios was 0.04%.

9 Interest expenses and fees are related to the Fund’s investment in inverse floater rate investments. Under accounting rules, the Fund recognizes additional income in an amount equal to these expenses.

See notes to financial statements

Annual report | Tax-Free Bond Fund  23 

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

CLASS B SHARES Period ended  5-31-091  8-31-08  8-31-07  8-31-06  8-31-052  8-31-042 
 
Per share operating performance             
Net asset value, beginning of period  $9.82  $9.95  $10.24  $10.41  $10.22  $9.96 
Net investment income3  0.29  0.38  0.38  0.39  0.41  0.42 
Net realized and unrealized             
 gain (loss) on investments  (0.29)  (0.14)  (0.30)  (0.18)  0.18  0.26 
Total from investment operations  —  0.24  0.08  0.21  0.59  0.68 
Less distributions             
From net investment income  (0.29)  (0.37)  (0.37)  (0.38)  (0.40)  (0.42) 
Net asset value, end of period  $9.53  $9.82  $9.95  $10.24  $10.41  $10.22 
Total return (%)4  0.105  2.476  0.806  2.106  5.93  6.896 
 
Ratios and supplemental data             
Net assets, end of year (in millions)  $11  $13  $16  $21  $32  $39 
Ratios (as a percentage of average             
 net assets):             
 Expenses before reductions     1.777,8  1.71  1.70  1.71  1.74  1.73 
 Interest and fees9  —  0.06  0.08  —  —  — 
 Expenses net of fee waivers     1.777,8  1.77  1.78  1.71  1.74  1.72 
 Expenses net of all fee waivers             
   and credits     1.777,8  1.77  1.78  1.71  1.74  1.72 
 Net investment income  4.297  3.77  3.69  3.79  3.96  4.11 
Portfolio turnover (%)  36  36  40  54  32  49 
 

1 For the nine month period ended May 31, 2009, the Fund changed its fiscal year end from August 31 to May 31.

2 Audited by previous Independent Registered Public Accounting Firm.

3 Based on the average of the shares outstanding.

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

5 Not annualized.

6 Total returns would have been lower had certain expenses not been reduced during the periods shown.

7 Annualized.

8 Includes proxy fees. The impact of this expense to the gross and net expense ratios was 0.04%.

9 Interest expenses and fees are related to the Fund’s investment in inverse floater rate investments. Under accounting rules, the Fund recognizes additional income in an amount equal to these expenses.

See notes to financial statements

24  Tax-Free Bond Fund | Annual report 

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

CLASS C SHARES Period ended  5-31-091  8-31-08  8-31-07  8-31-06  8-31-052  8-31-042 
Per share operating performance             
Net asset value, beginning of period  $9.82  $9.95  $10.24  $10.41  $10.22  $9.96 
Net investment income3  0.29  0.38  0.37  0.39  0.41  0.42 
Net realized and unrealized             
 gain (loss) on investments  (0.29)  (0.14)  (0.29)  (0.18)  0.18  0.26 
Total from investment operations  —  0.24  0.08  0.21  0.59  0.68 
Less distributions             
From net investment income  (0.29)  (0.37)  (0.37)  (0.38)  (0.40)  (0.42) 
Net asset value, beginning of period  $9.53  $9.82  $9.95  $10.24  $10.41  $10.22 
Total return (%)4  0.105  2.476  0.806  2.106  5.93  6.896 
 
Ratios and supplemental data             
Net assets, end of year (in millions)  $27  $13  $7  $7  $7  $8 
Ratios (as a percentage of average             
 net assets):             
 Expenses before reductions     1.777,8  1.71  1.70  1.71  1.74  1.72 
 Interest and fees9  —  0.06  0.08  —  —  — 
 Expenses net of fee waivers     1.777,8  1.77  1.78  1.71  1.74  1.71 
 Expenses net of all fee waivers             
   and credits     1.777,8  1.77  1.78  1.71  1.74  1.71 
 Net investment income  4.317  3.78  3.70  3.79  3.96  4.11 
Portfolio turnover (%)  36  36  40  54  32  49 
 

1 For the nine month period ended May 31, 2009, the Fund changed its fiscal year end from August 31 to May 31.

2 Audited by previous Independent Registered Public Accounting Firm.

3 Based on the average of the shares outstanding.

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

5 Not annualized.

6 Total returns would have been lower had certain expenses not been reduced during the periods shown.

7 Annualized.

8 Includes proxy fees. The impact of this expense to the gross and net expense ratios was 0.04%.

9 Interest expenses and fees are related to the Fund’s investment in inverse floater rate investments. Under accounting rules, the Fund recognizes additional income in an amount equal to these expenses.

See notes to financial statements

Annual report | Tax-Free Bond Fund  25 

Notes to financial statements

Note 1
Organization

John Hancock Tax-Free Bond Fund (the Fund) is a diversified series of John Hancock Municipal Securities Trust (the Trust), an open-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act). The investment objective of the Fund is to provide as high a level of interest income exempt from federal income taxes as is consistent with preservation of capital.

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

Note 2
Significant accounting policies

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:

Security valuation

Investments are stated at value as of the close of the regular trading on the New York Stock Exchange (NYSE), normally at 4:00 P.M., Eastern Time. Debt obligations are valued based on the evaluated prices provided by an independent pricing service, which utilizes both dealer-supplied and electronic data processing techniques, which take into account factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other market data as well as broker quotes. Securities traded only in the over-the-counter market are valued at the last bid price quoted by brokers making markets in the securities at the close of trading. Debt obligations, for which there are no prices available from an independent pricing service, are valued based on broker quotes or fair valued as described below. Short-term debt investments that have a remaining maturity of 60 days or less are valued at amortized cost, and thereafter assume a constant amortization to maturity of any discount or premium, which approximates market value.

Other portfolio securities and assets for which market quotations are not readily available are valued at fair value as determined in good faith by the Fund’s Pricing Committee in accordance with procedures adopted by the Board of Trustees.

Municipal valuations change in response to many factors including tax receipts and budget disbursements of the municipalities, general economic conditions, interest rates, investor perceptions and market liquidity.

The Fund adopted Statement of Financial Accounting Standards No. 157 (FAS 157), Fair Value Measurements, effective with the beginning of the Fund’s fiscal year. FAS 157 established a three-tier hierarchy to prioritize the assumptions, referred to as inputs, used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below:

Level 1 – Quoted prices in active markets for identical securities.

Level 2 – Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants

26  Tax-Free Bond Fund | Annual report 

would use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.

Level 3 – Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable, such as when there is little or no market activity for an investment, unobservable inputs may be used. Unobservable inputs reflect the Fund’s Pricing Committee’s own assumptions about the factors that market participants would use in pricing an investment and would be based on the best information available.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used to value the Fund’s net assets as of May 31, 2009:

  INVESTMENTS IN  OTHER FINANCIAL 
VALUATION INPUTS  SECURITIES  INSTRUMENTS* 
Level 1 — Quoted Prices  —  — 
Level 2 — Other Significant Observable Inputs  $444,552,504  — 
Level 3 — Significant Unobservable Inputs  —  — 
Total  $444,552,504  — 

*Other financial instruments are derivative instruments not reflected in the Portfolio of Investments, such as futures, forwards, options and swap contracts, which are stated at value based upon futures’ settlement prices, foreign currency exchange forward rates, option prices and swap prices.

Security transactions and related
investment income

Investment security 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. Interest income is accrued as earned. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Discounts/premiums are accreted/amortized for financial reporting purposes. Non-cash dividends are recorded at the fair market value of the securities received. Debt obligations may be placed in a non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful. The Fund uses the identified cost method for determining realized gain or loss on investments for both financial statement and federal income tax reporting purposes.

Expenses

The majority of expenses are directly identifiable to an individual fund. Trust 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 size of the funds. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.

Class allocations

Income, common expenses and realized and unrealized gains (losses) are determined at the fund level and allocated daily to each class of shares based on the appropriate net asset value of the respective classes. Distribution and service fees, if any, and transfer agent fees for all classes are calculated daily at the class level based on the appropriate net asset value of each class and the specific expense rate(s) applicable to each class.

Line of credit

The Fund and other affiliated funds have entered into an agreement which enables it to participate in a $150 million unsecured committed line of credit with State Street Corporation (the Custodian). The Fund is permitted to have bank borrowings for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. Interest is charged to each participating fund

Annual report | Tax-Free Bond Fund  27 

based on its borrowings at a rate per annum equal to the Federal Funds rate plus 0.50%. In addition, a commitment fee of 0.08% per annum, payable at the end of each calendar quarter, based on the average daily-unused portion of the line of credit, is charged to each participating fund on a prorated basis based on average net assets. Prior to February 19, 2009, the commitment fee was 0.05% per annum. For the period ended May 31, 2009, there were no borrowings under the line of credit by the Fund.

Pursuant to the custodian agreement, the Custodian may, in its discretion, advance funds to the Fund to make properly authorized payments. When such payments result in an overdraft, the Fund is obligated to repay the Custodian for any overdraft, including any costs or expenses associated with the overdraft. The Custodian has a lien, security interest or security entitlement in any Fund property, that is not segregated, to the maximum extent permitted by law to the extent of any overdraft.

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 a $20,118,770 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, it will reduce the amount of capital gain distribution to be paid. The loss carryforward expires as follows: May 31, 2011 — $7,431,104, May 31, 2012 —$6,837,618, May 31, 2015 — $257,214, May 31, 2016 — $209,653 and May 31, 2017 — $5,383,181. Additionally, net capital losses of $6,925,840 that are attributable to security transactions incurred after October 31, 2008, are treated as arising on June 1, 2009, the first day of the Fund’s next taxable year. As of May 31, 2009, the Fund had no uncertain tax positions that would require financial statement recognition, de-recognition, or disclosure. Each of the Fund’s federal tax returns filed in the 3-year period ended May 31, 2009 remains subject to examination by the Internal Revenue Service.

Distribution of income and gains

The Fund records distributions to shareholders from net investment income and net realized gains, if any, on the ex-dividend date. The Fund generally declares dividends daily and pays them monthly. Capital gain distributions, if any, are distributed annually. During the year ended August 31, 2007, the tax character of distributions paid was as follows: ordinary income $14,449 and tax exempt income $20,903,523. During the year ended August 31, 2008, the tax character of distributions paid was as follows: ordinary income $180,250 and tax exempt income $19,720,236. During the period ended May 31, 2009, the tax character of distributions paid was as follows: ordinary income $2,249 and tax exempt income $15,396,054. Distributions paid by the Fund with respect to each class of shares are calculated in the same manner, at the same time and are in the same amount, except for the effect of expenses that may be applied differently to each class.

As of May 31, 2009, the components of distributable earnings on a tax basis included $1,716,669 of undistributed exempt income.

Such distributions and distributable earnings, 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.

Capital accounts within financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period. Permanent book-tax differences are primarily attributable to amortization and accretion on debt securities.

28  Tax-Free Bond Fund | Annual report 

Note 3
Risk and uncertainties
State concentration risk

The Fund may concentrate its investments in a single state and its performance is affected by local, state and regional factors. The risks may include economic or policy changes, erosion of the tax base, and state legislative changes (especially those regarding budgeting and taxes). Although the Fund invests mainly in investment-grade bonds, which generally have a relatively low level of credit risk, any factors that might lead to a credit decline statewide would be likely to cause widespread decline in the credit quality of the Fund’s holdings.

Insurance concentration risk

The Fund may hold insured municipal obligations which are insured as to their scheduled payment of principal and interest under an insurance policy obtained by the issuer or underwriter of the obligation at the time of its original issuance. Since there are a limited number of municipal obligation insurers, a Fund may have a concentration of investments covered by one insurer. Accordingly, the concentration may make the Fund’s value more volatile and investment values may rise and fall more rapidly. In addition, the credit quality of companies which provide the insurance may affect the value of those securities and insurance does not guarantee the market value of the insured obligation.

Municipal bond risk

The Fund generally invests in general obligation or revenue municipal bonds. The bonds are backed by the municipal issuers and have the risk that the issuer’s credit quality will decline. General obligation bonds are backed by the municipal issuer’s ability to levy taxes. In extreme cases, a municipal issuer could declare bankruptcy or otherwise become unable to honor its commitments to bondholders which may be caused by many reasons, including fiscal mismanagement and erosion of the tax base. Revenue bonds are backed only by income associated with a specific facility. Any circumstance that reduces or threatens the economic viability of that particular facility can affect the bond’s credit quality.

Fixed income risk

Fixed income securities are subject to credit and interest rate risk and involve some risk of default in connection with principal and interest payments.

Note 4
Guarantees and indemnifications

Under the Fund’s organizational documents, its Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts with service providers that contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred.

Note 5
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 equivalent, on an annual basis, to the sum of: (a) 0.55% of the first $500,000,000 of the Fund’s average daily net asset value, (b) 0.50% of the next $500,000,000 and (c) 0.45% of the Fund’s average daily net assets in excess of $1,000,000,000. The Adviser has a subadvisory agreement with MFC Global Investment Management (U.S.), LLC, an indirectly owned subsidiary of MFC and an affiliate of the Adviser. The Fund is not responsible for payment of subadvisory fees.

The investment management fees incurred for the period ended May 31, 2009, were equivalent to an annual effective rate of 0.55% of the Fund’s average daily net assets.

Annual report | Tax-Free Bond Fund  29 

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

Pursuant to the Advisory Agreement, the Fund reimburses the Adviser for all expenses associated with providing the administrative, financial, legal, accounting and recordkeeping services of the Fund, including the preparation of all tax returns, annual, semiannual and periodic reports to shareholders and the preparation of all regulatory reports. These expenses are allocated based on the relative share of net assets of each class at the time the expense was incurred.

The accounting and legal services fees incurred for the period ended May 31, 2009, were equivalent to an annual effective rate of less than 0.02% of the Fund’s average daily net assets.

The Fund has an agreement with its custodian bank, under which custody fees are reduced by balance credits applied during the period. The expense reductions related to custody fee offsets amounted to $1,025.

Class A shares are assessed up-front sales charges. During the period ended May 31, 2009, JH Funds received net up-front sales charges of $376,325 with regard to sales of Class A shares. Of this amount, $44,159 was retained and used for printing prospectuses, advertising, sales literature and other purposes, $300,904 was paid as sales commissions to unrelated broker-dealers and $31,262 was paid as sales commissions to sales personnel of Signator Investors, Inc. (Signator Investors), a related broker-dealer. The Adviser’s indirect parent, John Hancock Life Insurance Company (JHLICO), is the indirect sole shareholder of Signator Investors.

Class B shares that are redeemed within six years of purchase are subject to a contingent deferred sales charge (CDSC) at declining rates, beginning at 5.00% of the lesser of the current market value at the time of redemption or the original purchase cost of the shares being redeemed. Class C shares that are redeemed within one year of purchase are subject to a CDSC at a rate of 1.00% of the lesser of the current market value at the time of redemption or the original purchase cost of the shares being redeemed. Proceeds from the CDSCs are paid to JH Funds and are used in whole or in part to defray its expenses for providing distribution-related services to the Fund in connection with the sale of Class B and Class C shares. During the period ended May 31, 2009, CDSCs received by JH Funds amounted to $10,971 for Class B shares and $9,204 for Class C shares.

The Fund has a transfer agent agreement with John Hancock Signature Services, Inc. (Signature Services), an indirect subsidiary of JHLICO. The transfer agent fees are made up of three components:

• The Fund pays amonthly transfer agent fee at an annual rate of 0.01% for all classes based on each class’s average daily net assets.

• All classes of the Fund paid a monthly fee based on an annual rate of $17.50 per shareholder account.

• In addition, Signature Services is reimbursed for certain out-of-pocket expenses.

The Fund receives earnings credits from its transfer agent as a result of uninvested cash balances. These credits are used to reduce a portion of the Fund’s transfer agent fees and out-of-pocket expenses. During the period ended May 31, 2009, the Fund’s transfer agent

30  Tax-Free Bond Fund | Annual report 

fees and out-of-pocket expenses were reduced by $79 for transfer agent credits earned.

Class level expenses for the period ended
May 31, 2009 were as follows:

  Distribution and  Transfer 
Share class  service fees  agent fees 
 
Class A  $738,644  $258,166 
Class B  85,349  7,445 
Class C  148,591  13,122 
Total  $972,584  $278,733 

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. Mr. John G. Vrysen is a Board member of the Adviser, as well as affiliated Trustee of the Fund, and is compensated by the Adviser and/or its affiliates. The compensation of unaffiliated Trustees is borne by the Fund. The unaffiliated Trustees may elect to defer, for tax purposes, their receipt of this compensation under the John Hancock Group of Funds Deferred Compensation Plan. The Fund makes investments into other John Hancock funds, as applicable, to cover its liability for the deferred compensation. Investments to cover the Fund’s deferred compensation liability are recorded on the Fund’s books as an other asset. The deferred compensation liability and the related other asset are always equal and are marked to market on a periodic basis to reflect any income earned by the investments, as well as any unrealized gains or losses. The Deferred Compensation Plan investments had no impact on the operations of the Fund.

Note 6
Fund share transactions

This listing illustrates the number of Fund shares sold, reinvested and repurchased during the period ended May 31, 2009, and the years ended August 31, 2008 and August 31, 2007, along with the corresponding dollar value.

  Period ended 5-31-091  Year ended 8-31-08  Year ended 8-31-07 
   
  Shares  Amount  Shares  Amount  Shares  Amount 
Class A shares             
Sold  4,449,118  $41,649,296  2,871,529  $28,467,107  2,034,449  $20,755,106 
Distributions             
reinvested  1,145,256  10,610,551  1,419,271  14,057,101  1,429,483  14,585,320 
   
Repurchased  (4,879,213)  (44,933,709) (5,517,877)  (54,881,160)  (4,598,208)  (46,872,840) 
Net increase             
(decrease)  715,161  $7,326,138  (1,227,077)   ($12,356,952)  (1,134,276) ($11,532,414) 
 
Class B shares             
Sold  316,450  $2,954,933  169,785  $1,690,375  91,785  $938,458 
Distributions             
reinvested  23,296  215,750  34,446  341,308  42,045  429,254 
   
Repurchased  (448,484)  (4,147,111)  (500,005)  (4,984,103)  (585,219)  (5,971,686) 
Net decrease  (108,738)  ($976,428)  (295,774)  ($2,952,420)  (451,389)  ($4,603,974) 
 
Class C shares             
Sold  1,787,141  $16,684,166  733,348  $7,224,800  200,261  $2,026,548 
Distributions             
reinvested  34,007  314,984  22,661  224,610  15,230  155,331 
   
Repurchased  (332,690)  (3,034,626)  (126,097)  (1,246,385)  (140,322)  (1,434,956) 
Net increase  1,488,458  $13,964,524  629,912  $6,203,025  75,169  $746,923 
 
Net increase             
(decrease)  2,094,881  $20,314,234  (892,939)  ($9,106,347)  (1,510,496) ($15,389,465) 

1 For the nine month period ended May 31, 2009, the Fund changed its fiscal year end from August 31 to May 31.

Annual report | Tax-Free Bond Fund  31 

Note 7
Purchase and sale of securities

Purchases and proceeds from sales or maturities of securities, including purchases and sales of variable rate demand notes of $35,555,000 and $34,555,000, respectively, during the period ended May 31, 2009, aggregated $170,474,838 and $154,511,546, respectively. Short-term securities are excluded from these amounts.

Note 8
Change in fiscal year end

On March 12, 2009, the Board of Trustees approved to change the Fund’s fiscal year end from August 31 to May 31.

32  Tax-Free Bond Fund | Annual report 

Auditors’ report

Report of Independent Registered Public Accounting Firm

To the Board of Trustees and Shareholders of John Hancock Tax-Free Bond Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of John Hancock Tax-Free Bond Fund (the “Fund”) at May 31, 2009, and the results of its operations, the changes in its net assets and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at May 31, 2009 by correspondence with the custodian and brokers, and the application of alternative auditing procedures where securities purchased confirmations had not been received, provide a reasonable basis for our opinion. The financial highlights for each of the periods ended on or before August 31, 2005 were audited by other auditors whose report expressed an unqualified opinion thereon.

PricewaterhouseCoopers LLP
Boston, Massachusetts
July 17, 2009

Annual report | Tax-Free Bond Fund  33 

Tax information

Unaudited

For federal income tax purposes, the following information is furnished with respect to the distributions of the Fund, if any, paid during its taxable year ended May 31, 2009.

The Fund designates 99.99% of dividends from net investment income as exempt-interest dividends. The percentage of dividends subject to the alternative minimum tax is 8.77%.

For specific information on exception provisions in your state, consult your local state tax office or your tax adviser. Shareholders will be mailed a 2009 U.S. Treasury Department Form 1099-DIV in January 2010. This will reflect the total of all distributions that are taxable for calendar year 2009.

34  Tax-Free Bond Fund | Annual report 

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

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

At meetings held on May 5–6 and June 9–10, 2008, 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 its Independent Trustees, reviewed a broad range of information requested for this purpose. This information included: (i) the investment performance of the Fund relative to a category of relevant funds (the Category) and a peer group of comparable funds (the Peer Group). The funds within each Category and Peer Group were selected by Morningstar Inc. (Morningstar), an independent provider of investment company data. Data covered a range of periods ended December 31, 2007, (ii) advisory and other fees incurred by, and the expense ratios of, the Fund relative to a Category and a Peer Group, (iii) the advisory fees of comparable portfolios of other clients of the Adviser and the Subadviser, (iv) the Adviser’s financial results and condition, including its and certain of its affiliates’ profitability from services performed for the Fund, (v) breakpoints in the Fund’s and the Peer Group’s fees, and information about economies of scale, (vi) the Adviser’s and Subadviser’s record of compliance with applicable laws and regulations, with the Fund’s investment policies and restrictions, and with the applicable Code of Ethics, and the structure and responsibilities of the Adviser’s and Subadviser’s compliance department, (vii) the background and experience of senior management and investment professionals, and (viii) the nature, cost and character of advisory and non-investment management services provided by the Adviser and its affiliates and by the Subadviser.

The Independent Trustees considered the legal advice of independent legal counsel and relied on their own business judgment in determining the factors to be considered in evaluating the materials that were presented to them and the weight to be given to each such factor. 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. The Board principally considered data on performance and other information provided by Morningstar as of December 31, 2007. The Board also considered updated performance information provided to it by the Adviser or Subadviser at its May and June 2008 meetings. Performance and other information may be quite different as of 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 considered the investment philosophy, research and

Annual report | Tax-Free Bond Fund  35 

investment decision-making processes of the Adviser and Subadviser. The Board considered the Adviser’s execution of its oversight responsibilities. The Board further considered the culture of compliance, resources dedicated to compliance, compliance programs and compliance records of the Adviser and Subadviser. In addition, the Board took into account the administrative and other non-advisory 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 supported renewal of the Advisory Agreements.

Fund performance

The Board considered the performance results for the Fund over various time periods ended December 31, 2007. The Board also considered these results in comparison to the performance of the Category, as well as the Fund’s Peer Group and benchmark index. The Board reviewed with representatives of Morningstar the methodology used by Morningstar to select the funds in the Category and the Peer Group.

The Board noted that, for the 1- and 10-year periods under review, the Fund’s performance was lower than the performance of its benchmark index, the Lehman Brothers Municipal Bond Index. The Board also noted that the Fund’s performance for the 3- and 5-year periods was generally in line with its benchmark index. The Board also noted that the Fund’s performance for the 1- and 10-year periods was generally in line with the performance of the Peer Group and Category medians. The Board viewed favorably that the Fund’s performance during the 3- and 5-year periods under review was higher than the performance of the Peer Group and Category medians.

Investment advisory fee and subadvisory
fee rates and expenses

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

The Board received and considered expense information regarding the Fund’s various components, including advisory fees, distribution and fees other than advisory and distribution fees, including transfer agent fees, custodian fees, and other miscellaneous fees (e.g., fees for accounting and legal services). The Board considered comparisons of these expenses to the Peer Group median. The Board also received and considered expense information regarding the Fund’s total operating expense ratio (Expense Ratio). The Board noted that, unlike the Fund, several funds in the Peer Group employed fee waivers or reimbursements. The Board received and considered information comparing the Expense Ratio of the Fund to that of the Peer Group and Category medians before the application of fee waivers and reimbursements (Gross Expense Ratio) and after the application of such waivers and reimbursement (Net Expense Ratio). The Board noted that the Fund’s Gross Expense Ratio was not appreciably higher than the Category median and was lower than the Peer Group median. The Board also noted that the Fund’s Net Expense Ratio was higher than the Category and Peer Group medians.

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

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

36  Tax-Free Bond Fund | Annual report 

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 also considered a comparison of the Adviser’s profitability to that of other similar investment advisers whose profitability information is publicly available. The Board concluded that, in light of the costs of providing investment management and other services to the Fund, the profits and other ancillary benefits reported by the Adviser were not unreasonable.

Economies of scale

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

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

Information about services to other clients

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

Other benefits to the Adviser

The Board received information regarding potential “fall-out” or ancillary benefits received by the Adviser and its affiliates, including the Subadviser, as a result of their relationship with the Fund. Such benefits could include, among others, benefits directly attributable to the relationship of the Adviser and Subadviser with the Fund and benefits potentially derived from an increase in business as a result of their 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 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.

Board Consideration of Amendments to
Investment Advisory Agreement

In approving the proposed new form of Advisory Agreement at the December 8–9, 2008 meeting (which is subject to shareholder approval), the Board determined that it was appropriate to rely upon its recent consideration at its June 10, 2008 meeting of such factors as:

Annual report | Tax-Free Bond Fund  37 

fund performance; the realization of economies of scale; profitability of the Advisory Agreement to the Adviser; and comparative advisory fee rates (as well as its conclusions with respect to those factors). The Board noted that it had, at the June 10, 2008 meeting, concluded that these factors, taken as a whole, supported the continuation of the Advisory Agreement. The Board, at the December 8–9, 2008 meeting, revisited particular factors to the extent relevant to the proposed new form of Agreement. In particular, the Board noted the skill and competency of the Adviser in its past management of the Fund’s affairs and subadvisory relationships, the qualifications of the Adviser’s personnel who perform services for the Trust and the Fund, including those who served as officers of the Trust, and the high level and quality of services that the Adviser may reasonably be expected to continue to provide the Fund and concluded that the Adviser may reasonably be expected to perform its services ably under the proposed new form of Advisory Agreement. The Board also took into consideration the extensive analysis and effort undertaken by a working group comprised of a subset of the Board’s Independent Trustees, which met several times, both with management representatives and separately, prior to the Board’s December 8–9, 2008 meeting. The Board considered the differences between the current Advisory Agreement and proposed new form of Agreement, and agreed that the new Advisory Agreement structure would more clearly delineate the Adviser’s duties under the Agreement by separating the Adviser’s non-advisory functions from its advisory functions. The enhanced delineation is expected to facilitate oversight of the Adviser’s advisory and non-advisory activities without leading to any material increase in the Fund’s overall expense ratios.

38  Tax-Free Bond Fund | Annual report 

Special Shareholder Meeting (Unaudited)

On April 16, 2009, a Special Meeting of the Shareholders of John Hancock Municipal Securities Trust and its series, John Hancock Tax-Free Bond Fund, was held at 601 Congress Street, Boston, Massachusetts for the purpose of considering and voting on the proposals listed below:

Proposal 1: Election of eleven Trustees as members of the Board of Trustees of John Hancock Municipal Securities Trust.

PROPOSAL 1 PASSED FOR ALL TRUSTEES ON APRIL 16, 2009.

1. Election of eleven Trustees as members of the Board of Trustees of each of the Trusts (all Trusts):

    % of Outstanding  % of Shares 
  No. of Shares         Shares   Present 
James R. Boyle       
Affirmative  38,496,265.7600  61.895%  95.248% 
Withhold  1,920,578.4220  3.088%  4.752% 
TOTAL  40,416,844.1820  64.983%  100.000% 
 
John G. Vrysen       
Affirmative  38,476,014.7600  61.863%  95.198% 
Withhold  1,940,829.4220  3.120%  4.802% 
TOTAL  40,416,844.1820  64.983%  100.000% 
 
James F. Carlin       
Affirmative  38,426,291.2820  61.783%  95.075% 
Withhold  1,990,552.9000  3.200%  4.925% 
TOTAL  40,416,844.1820  64.983%  100.000% 
 
William H. Cunningham       
Affirmative  38,465,617.4970  61.846%  95.172% 
Withhold  1,951,226.6850  3.137%  4.828% 
TOTAL  40,416,844.1820  64.983%  100.000% 
 
Deborah Jackson       
Affirmative  38,417,390.9940  61.768%  95.053% 
Withhold  1,999,453.1880  3.215%  4.947% 
TOTAL  40,416,844.1820  64.983%  100.000% 
 
Charles L. Ladner       
Affirmative  38,409,621.1310  61.756%  95.034% 
Withhold  2,007,223.0510  3.227%  4.966% 
TOTAL  40,416,844.1820  64.983%  100.000% 
 
Stanley Martin       
Affirmative  38,462,185.7870  61.840%  95.164% 
Withhold  1,954,658.3950  3.143%  4.836% 
TOTAL  40,416,844.1820  64.983%  100.000% 
 
Patti McGill Peterson       
Affirmative  38,382,793.7560  61.713%  94.967% 
Withhold  2,034,050.4260  3.270%  5.033% 
TOTAL  40,416,844.1820  64.983%  100.000% 

39 

    % of Outstanding  % of Shares 
  No. of Shares         Shares   Present 
John A. Moore       
Affirmative  38,382,058.7750  61.711%  94.965% 
Withhold  2,034,785.4070  3.272%  5.035% 
TOTAL  40,416,844.1820  64.983%  100.000% 
 
Steven R. Pruchansky       
Affirmative  38,472,426.3320  61.857%  95.189% 
Withhold  1,944,417.8500  3.126%  4.811% 
TOTAL  40,416,844.1820  64.983%  100.000% 
 
Gregory A. Russo       
Affirmative  38,465,242.6020  61.845%  95.171% 
Withhold  1,951,601.5800  3.138%  4.829% 
TOTAL  40,416,844.1820  64.983%  100.000% 

Proposal 6: To revise merger approval requirements for John Hancock Municipal Securities Trust.

PROPOSAL 6 PASSED ON APRIL 16, 2009.

6. Revision to merger approval requirements (all Trusts).

    % of Outstanding  % of Shares 
  No. of Shares         Shares   Present 
Affirmative  30,468,487.9750  48.987%  75.386% 
Against  1,699,149.5760  2.732%  4.204% 
Abstain  2,564,095.6310  4.123%  6.344% 
Broker Non-Votes  5,685,111.0000  9.141%  14.066% 
TOTAL  40,416,844.1820  64.983%  100.000% 

On May 5, 2009, an adjourned session of a Special Meeting of the Shareholders of John Hancock Municipal Securities Trust and its series, John Hancock Tax-Free Bond Fund, held at 601 Congress Street, Boston, Massachusetts for the purpose of considering and voting on the proposals listed below:

Proposal 2: To approve a new form of Advisory Agreement between John Hancock Municipal Securities Trust and John Hancock Advisers, LLC.

PROPOSAL 2 PASSED ON MAY 5, 2009.

2. Approval of a new form of Advisory Agreement between each Trust and John Hancock Advisers, LLC (all Funds).

    % of Outstanding  % of Shares 
  No. of Shares         Shares   Present 
Affirmative  23,394,856.2310  51.582%  79.785% 
Against  1,012,384.2690  2.232%  3.453% 
Abstain  1,843,904.0380  4.066%  6.288% 
Broker Non-Votes  3,071,167.0000  6.772%  10.474% 
TOTAL  29,322,311.5380  64.652%  100.000% 

40  Tax-Free Bond Fund | Annual report 

Proposal 3: To approve the following changes to fundamental investment restrictions:

PROPOSALS 3A-3F PASSED ON MAY 5, 2009.

3. Approval of the following changes to fundamental investment restrictions (See Proxy Statement for Fund(s) voting on this Proposal):

    % of Outstanding  % of Shares 
  No. of Shares         Shares   Present 
3A. Revise: Concentration       
 
Affirmative  23,077,259.3470  50.882%  78.702% 
Against  1,115,858.7400  2.460%  3.805% 
Abstain  2,058,028.4510  4.538%  7.019% 
Broker Non-Votes  3,071,165.0000  6.772%  10.474% 
TOTAL  29,322,311.5380  64.552%  100.000% 
 
3B. Revise: Diversification       
 
Affirmative  23,331,506.8790  51.442%  79.569% 
Against  958,585.4090  2.114%  3.269% 
Abstain  1,961,054.2500  4.324%  6.688% 
Broker Non-Votes  3,071,165.0000  6.772%  10.474% 
TOTAL  29,322,311.5380  64.552%  100.000% 
 
3C. Revise: Underwriting       
 
Affirmative  23,215,671.8540  51.187%  79.174% 
Against  1,009,583.7830  2.226%  3.443% 
Abstain  2,025,889.9010  4.467%  6.909% 
Broker Non-Votes  3,071,166.0000  6.772%  10.474% 
TOTAL  29,322,311.5380  64.552%  100.000% 
 
3D. Revise: Real Estate       
 
Affirmative  23,004,152.5010  50.721%  78.453% 
Against  1,211,970.9960  2.672%  4.133% 
Abstain  2,035,021.0410  4.487%  6.940% 
Broker Non-Votes  3,071,167.0000  6.772%  10.474% 
TOTAL  29,322,311.5380  64.652%  100.000% 
 
3E. Revise: Loans       
 
Affirmative  22,905,142.6040  50.503%  78.115% 
Against  1,261,466.4530  2.781%  4.302% 
Abstain  2,084,537.4810  4.596%  7.109% 
Broker Non-Votes  3,071,165.0000  6.772%  10.474% 
TOTAL  29,322,311.5380  64.625%  100.000% 
 
3F. Revise: Senior Securities       
 
Affirmative  23,074,896.4890  50.877%  78.693% 
Against  1,113,531.4720  2.455%  3.798% 
Abstain  2,062,716.5770  4.548%  7.035% 
Broker Non-Votes  3,071,167.0000  6.772%  10.474% 
TOTAL  29,322,311.5380  64.652%  100.000% 

Annual report | Tax-Free Bond Fund  41 

Proposal 4: To approve amendments changing Rule 12b-1 Plans for certain classes of the Fund from “reimbursement” to compensation plans.

PROPOSAL 4 PASSED FOR A AND B CLASSES ONLY ON MAY 5, 2009.

Class A

4. Approval of amendments changing Rule 12b-1 Plans for certain classes of the Funds from “reimbursement” to “compensation” Plans.

    % of Outstanding  % of Shares 
  No. of Shares         Shares   Present 
Affirmative  21,593,324.8480  51.201%  78.460% 
Against  1,272,004.1410  3.016%  4.622% 
Abstain  2,019,663.9710  4.789%  7.339% 
Broker Non-Votes  2,636,378.0000  6.251%  9.579% 
TOTAL  27,521,370.9600  65.257%  100.000% 

Class B

4. Approval of amendments changing Rule 12b-1 Plans for certain classes of the Funds from “reimbursement” to “compensation” Plans.

    % of Outstanding  % of Shares 
  No. of Shares         Shares   Present 
Affirmative  532,917.4940  45.500%  69.865% 
Against  45,563.1790  3.890%  5.973% 
Abstain  44,847.1110  3.829%  5.879% 
Broker Non-Votes  139,456.0000  11.907%  18.283% 
TOTAL  762,783.7840  65.126%  100.000% 

Class C

4. Approval of amendments changing Rule 12b-1 Plans for certain classes of the Funds from “reimbursement” to “compensation” Plans.

    % of Outstanding  % of Shares 
  No. of Shares         Shares   Present 
Affirmative  631,165.5120  31.421%  60.797% 
Against  25,260.0000  1.258%  2.433% 
Abstain  86,399.2820  4.301%  8.322% 
Broker Non-Votes  295,332.0000  14.702%  28.448% 
TOTAL  1,038,156.7940  51.682%  100.000% 

Proposal 5: To adopt a manager of manager structure.

PROPOSAL 5 PASSED ON MAY 5, 2009.

5. Proposal adopting a manager of manager structure.

    % of Outstanding  % of Shares 
  No. of Shares         Shares   Present 
Affirmative  22,643,058.5390  49.925%  77.221% 
Against  1,603,264.0500  3.535%  5.468% 
Abstain  2,004,820.9490  4.420%  6.837% 
Broker Non-Votes  3,071,168.0000  6.772%  10.474% 
TOTAL  29,322,311.5380  64.652%  100.000% 

42  Tax-Free Bond Fund | Annual report 

Trustees and Officers

This chart provides information about the Trustees and Officers who oversee your John Hancock fund. Officers elected by the Trustees manage the day-to-day operations of the Fund and execute policies formulated by the Trustees.

Independent Trustees

Name, Year of Birth    Number of John 
Position(s) held with Fund  Trustee  Hancock funds 
Principal occupation(s) and other  of Fund  overseen by 
directorships during past 5 years  since1  Trustee 
 
Patti McGill Peterson, Born: 1943  2005  48 
Chairperson (since December 2008); Principal, PMP Globalinc (consulting) (since 2007); Senior 
Associate, Institute for Higher Education Policy (since 2007); Executive Director, CIES (international 
education agency) (until 2007); Vice President, Institute of International Education (until 2007); Senior 
Fellow, Cornell University Institute of Public Affairs, Cornell University (until 1998); Former President 
Wells College, St. Lawrence University and the Association of Colleges and Universities of the State 
of New York. Director of the following: Niagara Mohawk Power Corporation (until 2003); Security 
Mutual Life (insurance) (until 1997); ONBANK (until 1993). Trustee of the following: Board of Visitors, 
The University of Wisconsin, Madison (since 2007); Ford Foundation, International Fellowships Program 
(until 2007); UNCF, International Development Partnerships (until 2005); Roth Endowment (since 2002); 
Council for International Educational Exchange (since 2003).     
 
James F. Carlin, Born: 1940  1994  48 
Director and Treasurer, Alpha Analytical Laboratories, Inc. (chemical analysis) (since 1985); Part Owner 
and Treasurer, Lawrence Carlin Insurance Agency, Inc. (since 1995); Part Owner and Vice President, 
Mone Lawrence Carlin Insurance Agency, Inc. (until 2005); Chairman and Chief Executive Officer, 
Carlin Consolidated, Inc. (management/investments) (since 1987); Trustee, Massachusetts Health and 
Education Tax Exempt Trust (1993–2003).     
 
William H. Cunningham,2 Born: 1944  1987  48 
Professor, University of Texas at Austin (since 1971); former Chancellor, University of Texas System and 
former President, University of Texas at Austin (until 2001); Chairman and Chief Executive Officer, IBT 
Technologies (until 2001); Director of the following: Hicks Acquisition Company I, Inc. (since 2007); 
Hire.com (until 2004), STC Broadcasting, Inc. and Sunrise Television Corp. (until 2001), Symtx, Inc. 
(electronic manufacturing) (since 2001), Adorno/Rogers Technology, Inc. (until 2004), Pinnacle Foods 
Corporation (until 2003), rateGenius (until 2003), Lincoln National Corporation (insurance) (since 2006), 
Jefferson-Pilot Corporation (diversified life insurance company) (until 2006), New Century Equity 
Holdings (formerly Billing Concepts) (until 2001), eCertain (until 2001), ClassMap.com (until 2001), Agile 
Ventures (until 2001), AskRed.com (until 2001), Southwest Airlines (since 2000), Introgen (manufacturer 
of biopharmaceuticals) (since 2000) and Viasystems Group, Inc. (electronic manufacturer) (until 
2003); Advisory Director, Interactive Bridge, Inc. (college fundraising) (until 2001); Advisory Director, 
Q Investments (until 2003); Advisory Director, JPMorgan Chase Bank (formerly Texas Commerce 
Bank–Austin), LIN Television (until 2008), WilTel Communications (until 2003) and Hayes Lemmerz 
International, Inc. (diversified automotive parts supply company) (since 2003).   
 
Deborah C. Jackson,2,4 Born: 1952  2008  48 
Chief Executive Officer, American Red Cross of Massachusetts Bay (since 2002); Board of Directors of 
Eastern Bank Corporation (since 2001); Board of Directors of Eastern Bank Charitable Foundation (since 
2001); Board of Directors of American Student Association Corp. (since 1996); Board of Directors of 
Boston Stock Exchange (2002–2008); Board of Directors of Harvard Pilgrim Healthcare (since 2007). 

Annual report | Tax-Free Bond Fund  43 

Independent Trustees (continued)

Name, Year of Birth    Number of John 
Position(s) held with Fund  Trustee  Hancock funds 
Principal occupation(s) and other  of Fund  overseen by 
directorships during past 5 years  since1  Trustee 
 
Charles L. Ladner, Born: 1938  1994  48 
Chairman and Trustee, Dunwoody Village, Inc. (retirement services); Senior Vice President and Chief 
Financial Officer, UGI Corporation (public utility holding company) (retired 1998); Vice President and 
Director, AmeriGas, Inc. (retired 1998); Director, AmeriGas Partners, L.P. (gas distribution) (until 1997); 
Director, EnergyNorth, Inc. (until 1997); Director, Parks and History Association (until 2005). 
 
Stanley Martin,2,4 Born: 1947  2008  48 
Senior Vice President/Audit Executive, Federal Home Loan Mortgage Corporation (2004–2006); 
Executive Vice President/Consultant, HSBC Bank USA (2000–2003); Chief Financial Officer/Executive 
Vice President, Republic New York Corporation and Republic National Bank of New York (1998–2000); 
Partner, KPMG LLP (1971–1998).     
 
Dr. John A. Moore, Born: 1939  2005  48 
President and Chief Executive Officer, Institute for Evaluating Health Risks (nonprofit institution) 
(until 2001); Senior Scientist, Sciences International (health research) (until 2003); Former   
Assistant Administrator and Deputy Administrator, Environmental Protection Agency; Principal, 
Hollyhouse (consulting) (since 2000); Director, CIIT Center for Health Science Research (nonprofit 
research) (until 2007).     
 
Steven R. Pruchansky, Born: 1944  1994  48 
Chairman and Chief Executive Officer, Greenscapes of Southwest Florida, Inc. (since 2000); Director 
and President, Greenscapes of Southwest Florida, Inc. (until 2000); Member, Board of Advisors, First 
American Bank (since 2008); Managing Director, JonJames, LLC (real estate) (since 2000); Director, 
First Signature Bank & Trust Company (until 1991); Director, Mast Realty Trust (until 1994); President, 
Maxwell Building Corp. (until 1991).     
 
Gregory A. Russo,4 Born: 1949  2009  48 
Vice Chairman, Risk & Regulatory Matters, KPMG LLP (KPMG) (2002–2006); Vice Chairman, Industrial 
Markets, KPMG (1998–2002).     

44  Tax-Free Bond Fund | Annual report 

Non-Independent Trustees3

Name, Year of Birth    Number of John 
Position(s) held with Fund  Trustee  Hancock funds 
Principal occupation(s) and other  of Fund  overseen by 
directorships during past 5 years  since1  Trustee 
 
James R. Boyle, Born: 1959  2005  264 
Executive Vice President, Manulife Financial Corporation (since 1999); Director and President, John 
Hancock Variable Life Insurance Company (since 2007); Director and Executive Vice President, John 
Hancock Life Insurance Company (since 2004); Chairman and Director, John Hancock Advisers, LLC (the 
Adviser), John Hancock Funds, LLC (John Hancock Funds) and The Berkeley Financial Group, LLC (The 
Berkeley Group) (holding company) (since 2005); Chairman and Director, John Hancock Investment 
Management Services, LLC (since 2006); Senior Vice President, The Manufacturers Life Insurance 
Company (U.S.A.) (until 2004).     
 
John G. Vrysen,4 Born: 1955  2009  48 
Chief Operating Officer (since 2005)     
Senior Vice President, Manulife Financial Corporation (since 2006); Director, Executive Vice President 
and Chief Operating Officer, the Adviser, The Berkeley Group, John Hancock Investment Management 
Services, LLC and John Hancock Funds, LLC (since 2007); Chief Operating Officer, John Hancock Funds, 
John Hancock Funds II, John Hancock Funds III and John Hancock Trust (since 2007); Director, John 
Hancock Signature Services, Inc. (since 2005); Chief Financial Officer, the Adviser, The Berkeley Group, 
Manulife Financial Corporation Global Investment Management (U.S.), LLC, John Hancock Investment 
Management Services, LLC, John Hancock Funds, LLC, John Hancock Funds, John Hancock Funds II, 
John Hancock Funds III and John Hancock Trust (2005–2007); Vice President, Manulife Financial 
Corporation (until 2006).     

Principal officers who are not Trustees

Name, Year of Birth   
Position(s) held with Fund  Officer 
Principal occupation(s) and other  of Fund 
directorships during past 5 years  since 
 
Keith F. Hartstein, Born: 1956  2005 
President and Chief Executive Officer   
Senior Vice President, Manulife Financial Corporation (since 2004); Director, President and Chief   
Executive Officer, the Adviser, The Berkeley Group and John Hancock Funds, LLC (since 2005); Director, 
MFC Global Investment Management (U.S.), LLC (MFC Global (U.S.)) (since 2005); Chairman and   
Director, John Hancock Signature Services, Inc. (since 2005); Director, President and Chief Executive 
Officer, John Hancock Investment Management Services, LLC (since 2006); President and Chief   
Executive Officer, John Hancock Funds and John Hancock Funds III (since 2005); Director, Chairman 
and President, NM Capital Management, Inc. (since 2005); Member and former Chairman, Investment 
Company Institute Sales Force Marketing Committee (since 2003); President and Chief Executive   
Officer, John Hancock Funds II and John Hancock Trust (2005–July 2009); Director, President and Chief 
Executive Officer, MFC Global (U.S.) (2005–2006); Executive Vice President, John Hancock Funds,   
LLC (until 2005).   

Annual report | Tax-Free Bond Fund  45 

Principal officers who are not Trustees (continued)

Name, Year of Birth   
Position(s) held with Fund  Officer 
Principal occupation(s) and other  of Fund 
directorships during past 5 years  since 
 
Thomas M. Kinzler, Born: 1955  2006 
Secretary and Chief Legal Officer   
Vice President and Counsel, John Hancock Life Insurance Company (U.S.A.) (since 2006); Secretary 
and Chief Legal Officer, John Hancock Funds, John Hancock Funds II and John Hancock Trust (since 
2006); Vice President and Associate General Counsel, Massachusetts Mutual Life Insurance Company 
(1999–2006); Secretary and Chief Legal Counsel, MML Series Investment Fund (2000–2006); Secretary 
and Chief Legal Counsel, MassMutual Institutional Funds (2000–2004); Secretary and Chief Legal   
Counsel, MassMutual Select Funds and MassMutual Premier Funds (2004–2006).   
 
Francis V. Knox, Jr., Born: 1947  2005 
Chief Compliance Officer   
Vice President and Chief Compliance Officer, John Hancock Investment Management Services, LLC, 
the Adviser and MFC Global (U.S.) (since 2005); Chief Compliance Officer, John Hancock Funds, John 
Hancock Funds II, John Hancock Funds III and John Hancock Trust (since 2005); Vice President and 
Assistant Treasurer, Fidelity Group of Funds (until 2004); Vice President and Ethics & Compliance Officer, 
Fidelity Investments (until 2001).   
 
Michael J. Leary, Born: 1965  2007 
Treasurer   
Vice President, John Hancock Life Insurance Company (U.S.A.) and Treasurer for John Hancock Funds, 
John Hancock Funds II, John Hancock Funds III and John Hancock Trust (since May 2009); Assistant 
Treasurer, John Hancock Funds, John Hancock Funds II, John Hancock Funds III and John Hancock   
Trust (2007–2009); Vice President and Director of Fund Administration, JP Morgan (2004–2007); Vice 
President and Senior Manager of Fund Administration, JP Morgan (1993–2004); Manager, Ernst & 
Young, LLC (1988–1993).   
 
Charles A. Rizzo, Born: 1957  2007 
Chief Financial Officer   
Chief Financial Officer, John Hancock Funds, John Hancock Funds II, John Hancock Funds III and John 
Hancock Trust (since 2007); Assistant Treasurer, Goldman Sachs Mutual Fund Complex (registered 
investment companies) (2005–2007); Vice President, Goldman Sachs (2005–2007); Managing Director 
and Treasurer of Scudder Funds, Deutsche Asset Management (2003–2005); Director, Tax and Financial 
Reporting, Deutsche Asset Management (2002–2003); Vice President and Treasurer, Deutsche Global 
Fund Services (1999–2002).   

The business address for all Trustees and Officers is 601 Congress Street, Boston, Massachusetts 02210-2805.

The Statement of Additional Information of the Fund includes additional information about members of the Board of Trustees of the Fund and is available without charge, upon request, by calling 1-800-225-5291.

1 Each Trustee serves until resignation, retirement age or until his or her successor is elected.

2 Member of Audit Committee.

3 Non-Independent Trustees hold positions with the Fund’s investment adviser, underwriter and certain other affiliates.

4 Mr. Martin was appointed by the Board as Trustee on September 8, 2008 and Ms. Jackson was appointed effective October 1, 2008. Mr. Russo and Mr. Vrysen were elected by the shareholders at a special meeting on April 16, 2009.

46  Tax-Free Bond Fund | Annual report 

More information

Trustees  Investment adviser 
Patti McGill Peterson, Chairperson  John Hancock Advisers, LLC 
James R. Boyle†   
James F. Carlin  Subadviser 
William H. Cunningham*  MFC Global Investment 
Deborah C. Jackson*    Management (U.S.), LLC 
Charles L. Ladner 
Stanley Martin*  Principal distributor 
Dr. John A. Moore  John Hancock Funds, LLC  
Steven R. Pruchansky 
Gregory A. Russo  Custodian 
John G. Vrysen†  State Street Bank and Trust Company 
*Member of the Audit Committee 
†Non-Independent Trustee  Transfer agent 
  John Hancock Signature Services, Inc.  
Officers 
Keith F. Hartstein  Legal counsel 
President and Chief Executive Officer  K&L Gates LLP  
 
Thomas M. Kinzler  Independent registered 
Secretary and Chief Legal Officer  public accounting firm 
  PricewaterhouseCoopers LLP   
Francis V. Knox, Jr. 
Chief Compliance Officer 
 
Michael J. Leary   
Treasurer   
 
Charles A. Rizzo   
Chief Financial Officer   
 
John G. Vrysen   
Chief Operating Officer   

The Fund’s proxy voting policies and procedures, as well as the Fund’s proxy voting record for the most recent twelve month period ended June 30, are available free of charge on the Securities and Exchange Commission (SEC) Website at sec.gov or on our Website.

The Fund’s complete list of portfolio holdings, for the first and third fiscal quarters, is filed with the SEC on Form N-Q. The Fund’s Form N-Q is available on our Website and the SEC’s Website, www.sec.gov, and can be reviewed and copied (for a fee) at the SEC’s Public Reference Room in Washington, DC. Call 1-800-SEC-0330 to receive information on the operation of the SEC’s Public Reference Room.

We make this information on your fund, as well as monthly portfolio holdings, and other fund details available on our Website www.jhfunds.com or by calling 1-800-225-5291.

You can also contact us:     
1-800-225-5291  Regular mail:  Express mail: 
jhfunds.com  John Hancock Signature Services, Inc.  John Hancock Signature Services, Inc. 
  P.O. Box 9510  Mutual Fund Image Operations 
  Portsmouth, NH 03802-9510  164 Corporate Drive 
    Portsmouth, NH 03801 

Annual report | Tax-Free Bond Fund  47 


1-800-225-5291
1-800-554-6713 TDD
1-800-338-8080 EASI-Line
www.jhfunds.com

Now available:electronic delivery
www.jhfunds.com/edelivery

This report is for the information of the shareholders of John Hancock Tax-Free Bond Fund.  5200A 5/09 
It is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus.  7/09 


Discussion of Fund performance
By MFC Global Investment Management (U.S.), LLC

The Fund’s fiscal year-end recently changed from August 31 to May 31. As a result, this report covers the period from September 1, 2008, to May 31, 2009.

High-yield municipal bonds suffered double-digit declines during the nine months ended May 31, 2009, with much of the decline occurring in the last four months of 2008, as a crisis in the credit markets and a deepening economic downturn led investors to shun riskier securities. High-yield municipal bonds led a market rebound in the latter half of the period as unprecedented government intervention helped ease the credit crunch and the economy began to show early signs of stabilization. But it wasn’t enough to recapture the ground lost in late 2008. The credit environment remained challenging as the severe downturn in the U.S. economy led to a substantial drop in tax revenues, resulting in budget shortfalls. After expending their reserve funds, state governments are now facing hard choices on spending cuts and tax hikes.

For the nine months ended May 31, 2009, John Hancock High Yield Municipal Bond Fund’s Class A shares posted a total return of –3.04% at net asset value. By comparison, Morningstar, Inc.’s high-yield municipal bond fund category produced an average return of –10.27%, while the much broader-based Barclays Capital Municipal Bond Index, the Fund’s benchmark, returned 3.15%. The Fund underperformed the index because of its greater focus than the index on lower-quality bonds, which fared poorly in the first half of the period. We believe that the Fund’s outperformance of its Morningstar peer group average resulted from its defensive positioning, with an emphasis on higher-quality municipal bonds. This contributed to significant outperformance during the sharp municipal market sell-off in late 2008, though we gave back some performance late in the period as lower-quality securities led a municipal market rebound. The best performers were essential-services revenue bonds, which finance basic services such as utilities, water and sewer. Tobacco-related municipal bonds were among the weaker performers, though they staged a sharp recovery late in the period.

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.

Past performance is no guarantee of future results.

Investments concentrated in one industry may fluctuate more widely than investments diversified across industries. Because the Fund may focus on particular industries, its performance may depend on the performance of those industries.

The Fund is non-diversified, which generally means that it may invest a greater percentage of its total assets in the securities of fewer issuers than a diversified fund. As a result, credit, market and other risks associated with the Fund’s investment strategies or techniques may be more pronounced for the Fund than for funds that are diversified.

The major factors in this Fund’s performance are interest rates and credit risk. When interest rates rise, bond prices usually fall. Generally, an increase in the Fund’s average maturity will make it more sensitive to interest-rate risk.

6  High Yield Municipal Bond Fund | Annual report 

A look at performance

For the period ended May 31, 2009         
 
    Average annual returns (%)  Cumulative total returns (%) 
SEC 30-

day yield

(%) as of

5-31-09 
with maximum sales charge (POP)  with maximum sales charge (POP) 
Inception 
Class  date  1-year  5-year  10-year  1-year  5-year  10-year 
A  12-31-93  –7.59  2.31  2.78  –7.59  12.12  31.50  4.92 
B  8-25-86  –8.57  2.15  2.64  –8.57  11.24  29.79  4.41 
C  4-1-99  –4.91  2.48  2.48  –4.91  13.05  27.74  4.40 

Performance figures assume all distributions are reinvested. Public offering price (POP) figures reflect maximum sales charges on Class A shares of 4.5% and the applicable contingent deferred sales charge (CDSC) on Class B and Class C shares. The returns for Class C shares have been adjusted to reflect the elimination of the front-end sales charge, effective July 15, 2004. The Class B shares’ CDSC declines annually between years 1 to 6 according to the following schedule: 5, 4, 3, 3, 2, 1%. No sales charge will be assessed after the sixth year. Class C shares held for less than one year are subject to a 1% CDSC.

The expense ratios of the Fund, both net (including any fee waivers or expense limitations) and gross (excluding any fee waivers or expense limitations), are set forth according to the most recent publicly available prospectus for the Fund and may differ from the expense ratios disclosed in the Financial Highlights tables in this report. The net expenses equal the gross expenses and are as follows: Class A — 1.25%, Class B — 2.00% and Class C — 2.00%. Expenses for the current period may be higher than those shown in the “Annual operating expenses” table for one or more of the following reasons: (i) a significant decrease in average net assets may result in a higher advisory fee rate if advisory fee breakpoints are not achieved; (ii) a significant decrease in average net assets may result in an increase in the expense ratio because certain fund expenses do not decrease as asset levels decrease; or (iii) the termination of voluntary expense cap reimbursements and/or fee waivers, as applicable.

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

The performance table above and the chart on the next page do not reflect the deduction of taxes that a shareholder may pay on fund distributions or on the redemption of fund shares. Please note that a portion of the Fund’s income may be subject to taxes, and some investors may be subject to the Alternative Minimum Tax (AMT). Also note that capital gains are taxable.

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

  Annual report | High Yield Municipal Bond Fund  7 

A look at performance

Growth of $10,000

This chart shows what happened to a hypothetical $10,000 investment in John Hancock High Yield Municipal Bond Fund Class A shares for the period indicated. For comparison, we’ve shown the same investment in the Barclays Capital Municipal Bond Index.


      With maximum   
Class  Period beginning  Without sales charge  sales charge  Index 
B2  5-31-99  $12,979  $12,979  $16,209 
C2  5-31-99  12,774  12,774  16,209 

Assuming all distributions were reinvested for the period indicated, the table above shows the value of a $10,000 investment in the Fund’s Class B and Class C shares, respectively, as of May 31, 2009. The Class C shares investment with maximum sales charge has been adjusted to reflect the elimination of the front-end sales charge, effective July 15, 2004. Performance of the classes will vary based on the difference in sales charges paid by shareholders investing in the different classes and the fee structure of those classes.

Barclays Capital Municipal Bond Index is an unmanaged index that includes municipal bonds and is commonly used as a measure of bond performance.

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

1 NAV represents net asset value and POP represents public offering price.

2 No contingent deferred sales charge applicable.

8  High Yield Municipal Bond Fund | Annual report 

Your expenses

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

Understanding fund expenses

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

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

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

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

Actual expenses/actual returns

This example is intended to provide information about your fund’s actual ongoing operating expenses, and is based on your fund’s actual return. It assumes an account value of $1,000.00 on March 1, 2009 with the same investment held until May 31, 2009.

  Account value  Ending value  Expenses paid during 
  on 3-1-09  on 5-31-09  period ended 5-31-091 
Class A  $1,000.00  $1,075.80  $3.06 
Class B  1,000.00  1,073.80  5.02 
Class C  1,000.00  1,073.80  4.99 

Together with the value of your account, you may use this information to estimate the operating expenses that you paid over the period. Simply divide your account value at May 31, 2009, by $1,000.00, then multiply it by the “expenses paid” for your share class from the table above. For example, for an account value of $8,600.00, the operating expenses should be calculated as follows:


1 Expenses are equal to the Fund’s annualized expense ratio of 1.17%, 1.92% and 1.91% for Class A, Class B and Class C shares, respectively, multiplied by the average account value over the period, multiplied by 92/365 (to reflect the three month period).

  Annual report | High Yield Municipal Bond Fund  9 

Your expenses

Hypothetical example for comparison purposes

This table allows you to compare your fund’s ongoing operating expenses with those of any other fund. It provides an example of the Fund’s hypothetical account values and hypothetical expenses based on each class’s actual expense ratio and an assumed 5% annualized return before expenses (which is not your fund’s actual return). It assumes an account value of $1,000.00 on December 1, 2008, with the same investment held until May 31, 2009. Look in any other fund shareholder report to find its hypothetical example and you will be able to compare these expenses.

  Account value  Ending value  Expenses paid during 
  on 12-1-08  on 5-31-09  period ended 5-31-091 
Class A  $1,000.00  $1,019.10  $5.89 
Class B  1,000.00  1,015.40  9.65 
Class C  1,000.00  1,015.40  9.60 

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

1 Expenses are equal to the Fund’s annualized expense ratio of 1.17%, 1.92% and 1.91% for Class A, Class B and Class C shares, respectively, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period).

10  High Yield Municipal Bond Fund | Annual report 

Portfolio summary

Top 10 holdings1   
Atlanta Water & Waste Water Revenue, 11-1-19, 5.000%  5.7% 
Foothill Eastern Transportation Corridor Agency, 1-1-18, Zero  3.2% 
Golden State Tobacco Securitization Corp., 6-1-27, 4.500%  3.1% 
North Texas Tollway Authority, 1-1-38, 5.750%  2.4% 
Buckeye Ohio Tobacco Settlement Financing Authority, 6-1-24, 5.125%  2.0% 
Massachusetts Health & Educational Facilities Authority, 12-15-31, 9.200%  1.7% 
Maricopa County Industrial Development Authority, 7-1-39, 6.000%  1.7% 
New York Liberty Development Corp., 10-1-35, 5.250%  1.5% 
San Bernardino County, 8-1-17, 5.500%  1.5% 
Long Island Power Authority, 4-1-39, 5.750%  1.5% 

Industry composition2,3       
General obligation bonds  2%  Transportation  8% 
Revenue bonds    Power  7% 
Other revenue  22%  Education  7% 
Pollution  14%  Water & sewer  6% 
Development  14%  Airport  6% 
Health care  10%  Health care services  4% 
 
Quality composition2       
AAA  12%  BB  5% 
AA  5%  B  5% 
A  37%  CCC  1% 
BBB  35%     
  

 

1 As a percentage of net assets on May 31, 2009. Excludes cash and cash equivalents.

2 As a percentage of net assets on May 31, 2009.

3 Investments concentrated in one industry may fluctuate more widely than investments diversified across industries. Because the Fund may focus on particular industries, its performance may depend on the performance of those industries.

  Annual report | High Yield Municipal Bond Fund  11 

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

Fund’s investments

Securities owned by the Fund on 5-31-09

  Interest  Maturity  Par value   
State, issuer, description  rate  date  (000)  Value 
Bonds 0.57%        $1,030,570 
(Cost $1,000,000)         
 
Thrifts & Mortgage Finance 0.57%        1,030,570 
Charter MAC Equity Centerline Equity         
 Issuer Trust (S)   6.000%  05-15-19  $1,000  1,030,570 
 
  Interest  Maturity  Par value   
State, issuer, description  rate  date  (000)  Value 
Tax-exempt long-term bonds 98.99%        $180,074,710 
(Cost $179,625,933)         
 
Alabama 0.82%        1,497,680 
Courtland Industrial Development Board,         
 International Paper Co., Ser. A   5.200%  06-01-25  $2,000  1,497,680 
 
Arizona 2.84%        5,163,110 
Maricopa County Industrial         
 Development Authority,         
 Catholic Healthcare West, Ser. A  6.000  07-01-39  3,000  3,045,150 
Maricopa County Pollution         
 Control Corp.,         
 El Paso Electric Co. Project, Ser. B  7.250  04-01-40  2,000  2,117,960 
 
California 12.46%        22,657,457 
California Economic Recovery,         
 General Obligation, Ser. C–5 (V)  0.280  07-01-23  900  900,000 
California General Obligation  6.000  04-01-38  2,000  2,053,620 
California Pollution Control         
 Financing Authority,         
 Browning-Ferris Industries, Inc.  6.750  09-01-19  1,000  1,000,870 
California State Public Works Board,         
 California State University, Ser. D  6.250  04-01-34  1,000  1,017,310 
California Statewide Communities         
 Development Authority,         
 Thomas Jefferson School, Ser. A  7.250  10-01-38  1,000  833,730 
Foothill Eastern Transportation         
 Corridor Agency,         
 Capital Appreciation  Zero  01-15-36  4,000  489,080 
 Capital Appreciation, Ser. A  Zero  01-01-18  7,950  5,896,277 
Golden State Tobacco         
 Securitization Corp., Ser. A–1  4.500  06-01-27  6,420  5,540,845 
Millbrae Residential Facility Revenue,         
 Magnolia of Millbrae Project, Ser. A  7.375  09-01-27  1,000  858,610 

See notes to financial statements

12  High Yield Municipal Bond Fund | Annual report 

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

  Interest  Maturity  Par value   
State, issuer, description  rate  date  (000)  Value 
California (continued)         
San Bernardino County,         
 Medical Center Financing Project (D)   5.500%  08-01-17  $2,500  $2,663,925 
Southern California Public         
 Power Authority,         
 Natural Gas Project No: 1, Ser. A  5.250  11-01-26  1,500  1,403,190 
 
Colorado 3.50%        6,368,522 
Colorado Health Facilities Authority,         
 Christian Living Community Project,         
 Ser. A  9.000  01-01-34  750  761,340 
 Ser. A  5.750  01-01-26  1,000  823,860 
E-470 Public Highway Authority,         
 Ser B  Zero  09-01-35  15,700  2,358,297 
Public Authority for Colorado Energy,         
 Natural Gas Purchase Revenue  6.250  11-15-28  2,500  2,425,025 
 
District Of Columbia 1.11%        2,015,820 
District of Columbia,         
 Georgetown University  5.500  04-01-36  2,000  2,015,820 
 
Florida 13.09%        23,803,940 
Bonnet Creek Resort Community         
 Development District,         
 Special Assessment  7.375  05-01-34  1,055  855,742 
 Special Assessment  7.250  05-01-18  1,445  1,284,677 
Capital Projects Finance Authority,         
 Student Housing Revenue, Ser. A  7.850  08-15-31  2,000  2,224,340 
 Student Housing Revenue, Ser. G  9.125  10-01-11  985  996,574 
Capital Region Community         
 Development District, Ser. A  7.000  05-01-39  1,250  895,975 
Capital Trust Agency,         
 Seminole Tribe Convention, Ser. A (S)  8.950  10-01-33  1,000  1,252,140 
Crossings At Fleming Island Community         
 Development District, Ser. C  7.100  05-01-30  1,000  833,640 
Heritage Harbour North Community         
 Development District,         
 Special Assessment  6.375  05-01-38  1,250  845,613 
Live Oak Community Development         
 District No: 1, Ser. A  6.300  05-01-34  1,000  983,890 
Miami Beach Health Facilities Authority,         
 Mt. Sinai Medical Center, Ser. A  6.125  11-15-11  565  549,406 
Miami-Dade County Aviation Revenue,         
 Miami International Airport,         
 Ser. A (D)  5.000  10-01-38  2,000  1,638,020 
 Ser. A  5.500  10-01-36  2,000  1,934,000 
Orlando Urban Community         
 Development District,         
 Special Assessment  6.250  05-01-34  1,000  686,750 
 Special Assessment  6.000  05-01-20  635  504,577 
Pensacola Airport Revenue,         
 AMT  6.000  10-01-28  2,000  2,008,320 
Poinciana Community         
 Development District, Ser. A  7.125  05-01-31  1,200  1,101,384 

See notes to financial statements

  Annual report | High Yield Municipal Bond Fund  13 

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

  Interest  Maturity  Par value   
State, issuer, description  rate  date  (000)  Value 
Florida (continued)         
Seminole Indian Tribe of Florida, Ser. A (S)   5.250%  10-01-27  $1,000  $834,250 
South Kendall Community         
 Development District, Ser. A  5.900  05-01-35  945  749,026 
Tolomato Community         
 Development District,         
 Special Assessment  6.650  05-01-40  1,000  683,330 
 Special Assessment  6.450  05-01-23  1,000  751,370 
Village Community Development District         
 No: 5, Ser. A  6.500  05-01-33  1,420  1,434,754 
Village Community Development District         
 No: 8, Special Assessment  6.375  05-01-38  900  756,162 
 
Georgia 8.51%        15,482,438 
Atlanta Tax Allocation,         
 Eastside Project, Ser. B  5.600  01-01-30  1,500  1,099,875 
Atlanta Water & Waste Water Revenue (D)  5.000  11-01-19  10,000  10,421,400 
Gainesville & Hall County         
 Development Authority,         
 Acts Retirement, Ser. A–2  6.625  11-15-39  1,100  1,106,963 
Marietta Development Authority,         
 Life University, Inc. Project  7.000  06-15-30  1,500  1,315,455 
Municipal Electric Authority of Georgia,         
 Ser. D  5.500  01-01-26  1,500  1,538,745 
 
Illinois 2.67%        4,862,890 
Chicago Tax Increment Revenue,         
 Pilsen Redevelopment, Ser. B  6.750  06-01-22  2,000  1,829,520 
Illinois Finance Authority,         
 Rush-Copley Medical Center, Inc.,         
 Ser. A  7.250  11-01-38  2,000  2,158,400 
 Ser. C1  5.950  08-15-26  1,000  874,970 
 
Indiana 0.29%        522,281 
St. Joseph County,         
 Holy Cross Village Notre Dame Project,         
 Ser. A  6.000  05-15-26  230  183,715 
 Ser. A  6.000  05-15-38  475  338,566 
 
Iowa 0.64%        1,163,114 
Altoona Urban Renewal Tax Increment         
 Revenue  6.000  06-01-34  1,000  946,860 
Iowa Finance Authority,         
 Care Initiatives Project  9.250  07-01-25  185  216,254 
 
Kansas 0.83%        1,512,030 
Burlington Environmental Improvement,         
 Kansas City Power & Light, Ser. B (D)  5.375  09-01-35  1,500  1,512,030 
 
Louisiana 2.03%        3,692,780 
Louisiana Local Government         
 Environmental Facilities,         
 Westlake Chemical Corp. Project  6.750  11-01-32  2,000  1,595,880 
St. John Baptist Parish Revenue,         
 Marathon Oil Corp., Ser. A  5.125  06-01-37  2,500  2,096,900 

See notes to financial statements

14  High Yield Municipal Bond Fund | Annual report 

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

  Interest  Maturity  Par value   
State, issuer, description  rate  date  (000)  Value 
Maryland 2.23%        $4,062,100 
Baltimore County,         
 East Baltimore Resh Project, Ser. A   7.000%  09-01-38  $1,000  763,430 
Maryland Economic Development Corp.,         
 Potomac Electric Power Co.  6.200  09-01-22  2,000  2,152,900 
Prince Georges County,         
 National Harbor Project  5.200  07-01-34  1,000  615,960 
 Victoria Falls Project  5.250  07-01-35  1,000  529,810 
 
Massachusetts 5.22%        9,488,268 
Massachusetts Development         
 Finance Agency,         
 Dominion Energy Brayton Point  5.000  02-01-36  1,000  829,660 
 Linden Ponds, Inc., Ser. A  5.750  11-15-42  1,500  906,210 
 Ogden Haverhill Project, Ser. B  5.500  12-01-19  1,700  1,399,763 
Massachusetts Health & Educational         
 Facilities Authority,         
 Caregroup, Ser. E-1  5.125  07-01-33  1,000  879,980 
 Civic Investments, Ser. B  9.200  12-15-31  2,500  3,165,550 
 Jordan Hospital, Ser. E  6.750  10-01-33  1,000  781,590 
Massachusetts State College         
 Building Authority, Ser. A  5.500  05-01-49  1,500  1,525,515 
 
Michigan 1.10%        2,005,350 
Michigan Strategic Fund Ltd.,         
 Detroit Education  5.625  07-01-20  1,000  999,940 
 Dow Chemical, Ser. A–1  6.750  12-01-28  1,000  1,005,410 
 
Minnesota 0.47%        857,030 
North Oak Senior Housing Revenue,         
 Presbyterian Homes North Oaks  6.000  10-01-27  1,000  857,030 
 
Mississippi 0.51%        922,640 
Mississippi Business Finance Corp.,         
 System Energy Resources, Inc.  5.875  04-01-22  1,000  922,640 
 
Missouri 0.56%        1,018,170 
Missouri Joint Municipal Electric         
 Utility Commission,         
 Iatan 2 Project, Ser. A  6.000  01-01-39  1,000  1,018,170 
 
Nevada 0.40%        731,270 
Sparks Tourism Improvement District         
 No: 1, Ser. A (S)  6.750  06-15-28  1,000  731,270 
 
New Hampshire 1.31%        2,387,730 
New Hampshire Business         
 Finance Authority,         
 Public Service Co., Ser. B (D)  4.750  05-01-21  1,500  1,351,350 
 United Illuminating Co., Ser. A  6.875  12-01-29  1,000  1,036,380 
 
New Jersey 5.23%        9,520,471 
New Jersey Economic         
 Development Authority,         
 Continental Airlines, Inc.  6.625  09-15-12  2,460  2,332,793 
 Continental Airlines, Inc.  6.250  09-25-29  1,000  781,660 
New Jersey Health Care Facilities         
 Financing Authority,         
 Care Institute, Inc., Cherry Hill         
 Project  8.000  07-01-27  1,250  1,010,875 
 St. Peters University Hospital, Ser. A  6.875  07-01-30  1,000  985,160 

See notes to financial statements

  Annual report | High Yield Municipal Bond Fund  15 

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

  Interest  Maturity  Par value   
State, issuer, description  rate  date  (000)  Value 
New Jersey (continued)         
New Jersey State Educational         
 Facilities Authority,         
 University of Medicine and Dentistry   7.500%  12-01-32  $1,000  $1,039,910 
Tobacco Settlement Financing Corp.,         
 Prerefunded  6.250  06-01-43  1,000  1,176,020 
 Ser. 1A  4.500  06-01-23  2,495  2,194,053 
 
New York 6.36%        11,560,497 
Long Island Power Authority,         
 Ser. A  5.750  04-01-39  2,500  2,635,775 
 Ser. C (D)  5.250  09-01-29  1,475  1,508,247 
New York City Industrial         
 Development Agency,         
 American Airlines-JFK Airport  7.500  08-01-16  2,000  1,893,860 
 World Trade Center Project, Ser. A  6.250  03-01-15  1,500  1,307,190 
New York City Municipal Water         
 Finance Authority, Ser. F (V)  0.170  06-15-35  1,000  1,000,000 
New York Liberty Development Corp.,         
 Goldman Sachs Group, Inc.  5.250  10-01-35  3,000  2,782,170 
Port Authority of New York &         
 New Jersey, KICA Partners  6.750  10-01-19  555  433,255 
 
North Carolina 1.18%        2,140,640 
North Carolina Eastern Municipal         
 Power Agency,         
 Ser. A  5.500  01-01-26  1,000  1,021,620 
 Ser. C  6.750  01-01-24  1,000  1,119,020 
 
Ohio 3.85%        6,999,928 
Buckeye Ohio Tobacco Settlement         
 Financing Authority, Ser A–2  5.125  06-01-24  4,190  3,607,003 
Hickory Chase Community Authority,         
 Hickory Chase Project  7.000  12-01-38  1,000  815,970 
Ohio Air Quality Development Authority,         
 FirstEnergy Solutions Corp., Ser. A  5.750  06-01-33  1,500  1,534,485 
 FirstEnergy Solutions Corp., Ser. C  7.250  11-01-32  1,000  1,042,470 
 
Oklahoma 2.09%        3,806,769 
Oklahoma Municipal Power Authority,         
 Ser. A  6.000  01-01-38  1,685  1,796,564 
Tulsa Municipal Airport Trust Trustees,         
 American Airlines Project  6.250  06-01-20  1,375  1,093,895 
 AMR Corp., Ser. A  7.750  06-01-35  1,000  916,310 
 
Oregon 0.79%        1,431,698 
Western Generation Agency,         
 Wauna Cogeneration Project,         
 Ser. B  5.000  01-01-14  1,105  999,318 
 Ser. B  5.000  01-01-16  500  432,380 
 
Pennsylvania 0.84%        1,524,180 
Allegheny County Hospital         
 Development Authority,         
 West Penn Health Systems, Ser. A  5.000  11-15-28  1,000  627,590 
Allegheny County Industrial         
 Development Authority,         
 US Steel Corp.  5.500  11-01-16  1,000  896,590 

See notes to financial statements

16  High Yield Municipal Bond Fund | Annual report 

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

  Interest  Maturity  Par value   
State, issuer, description  rate  date  (000)  Value 
Puerto Rico 1.79%        $3,261,557 
Puerto Rico Aqueduct & Sewer Authority,         
 Ser. A   6.000%  07-01-38  $1,000  965,310 
 Ser. A  Zero  07-01-24  1,500  1,184,310 
Puerto Rico Electric Power Authority,         
 Ser. TT  5.000  07-01-32  1,250  1,111,937 
 
Rhode Island 0.30%        546,543 
Tobacco Settlement Financing Corp.,         
 Ser. A  6.000  06-01-23  250  242,410 
Town of Tiverton, Tax         
 Increment Revenue,         
 Mount Hope Bay Village, Ser. A  6.875  05-01-22  335  304,133 
 
South Carolina 0.82%        1,496,244 
Lancaster County,         
 Edenmoor Improvements District,         
 Ser. A  5.750  12-01-37  985  496,204 
Tobacco Settlement Revenue         
 Management Authority  5.000  06-01-18  1,000  1,000,040 
 
Tennessee 1.44%        2,625,945 
Johnson City Health &         
 Educational Facilities,         
 Mountain States Health Alliance  7.500  07-01-33  1,000  1,135,410 
Tennessee Energy Acquisition Corp.,         
 Ser. C  5.000  02-01-25  1,720  1,490,535 
 
Texas 10.55%        19,186,368 
Bexar County Health Facilities         
 Development Corp.,         
 Army Retirement Residence Project  6.300  07-01-32  150  171,267 
Brazos Harbor Industrial         
 Development Corp.,         
 Dow Chemical Project  5.900  05-01-38  1,500  1,252,725 
Brazos River Authority,         
 TXU Energy Co., Ser. A  7.700  04-01-33  3,500  1,820,000 
Guadalupe-Blanco River Authority,         
 E.I. Dupont De Nemours Project  6.400  04-01-26  1,000  998,870 
Gulf Coast Industrial         
 Development Authority,         
 Citgo Petroleum Corp.  8.000  04-01-28  2,100  2,054,577 
Gulf Coast Waste Disposal Authority,         
 International Paper Co., Ser. A  6.100  08-01-24  1,500  1,242,735 
Harris County Health Facilities         
 Development Corp.,         
 Memorial Hermann Healthcare, Ser. B  7.250  12-01-35  1,000  1,077,540 
Metro Health Facilities         
 Development Corp.,         
 Wilson N. Jones Memorial Hospital  7.250  01-01-31  1,000  836,150 
Mission Economic Development Corp.,         
 Allied Waste, Inc., Ser. A  5.200  04-01-18  1,500  1,406,730 
 Waste Management Inc  6.000  08-01-20  975  982,039 
North Texas Tollway Authority,         
 Ser. F  5.750  01-01-38  4,500  4,413,105 
 Ser. K-2  6.000  01-01-38  1,000  1,010,830 
Texas Municipal Gas Acquisition &         
 Supply Corp., Ser. D  6.250  12-15-26  2,000  1,919,800 

See notes to financial statements

  Annual report | High Yield Municipal Bond Fund  17 

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

  Interest  Maturity  Par value   
State, issuer, description  rate  date  (000)  Value 
Virginia 1.73%        $3,151,910 
Chesterfield County Economic         
 Development Authority,         
 Virginia Electric & Power Co., Ser. A   5.000%  05-01-23  $1,000  1,014,030 
Washington County Industrial         
 Development Authority,         
 Blue Ridge Medical Corp., Ser. C  7.750  07-01-38  2,000  2,137,880 
 
Washington 0.55%        1,009,540 
Washington Health Care         
 Facilities Authority,         
 Swedish Health Services, Ser. A  6.500  11-15-33  1,000  1,009,540 
Wyoming 0.88%        1,597,800 
Sweetwater County,         
 FMC Corp.  5.600  12-01-35  2,000  1,597,800 
 
 
Total investments (Cost $180,625,933)† 99.56%      $181,105,280 
 
Other assets and liabilities, net 0.44%        $800,059 
 
Total net assets 100.00%        $181,905,339 

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

(D) Bond is insured by one of these companies:

Insurance coverage  As a % of total investments 
CIFG Holding Limited  1.74% 
Financial Guaranty Insurance Company  0.83% 
Financial Security Assurance, Inc.  5.75% 
National Public Finance Guaranty Insurance Corp.  2.22% 

(S) These securities are exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be resold, normally to qualified institutional buyers, in transactions exempt from registration.

(V) Variable rate demand notes are securities whose interest rates are reset periodically at market levels. These securities are often payable on demand and are shown at their current rates as of May 31, 2009.

† At May 31, 2009, the aggregate cost of investment securities for federal income tax purposes was $179,761,814. Net unrealized appreciation aggregated $1,343,466, of which $10,925,340 related to appreciated investment securities and $9,581,874 related to depreciated investment securities.

See notes to financial statements

18  High Yield Municipal Bond Fund | Annual report 

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

Financial statements

Statement of assets and liabilities 5-31-09

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

Assets   
Investments, at value (Cost $180,625,933)  $181,105,280 
Cash  1,735,769 
Receivable for fund shares sold  2,760,067 
Interest receivable  2,871,222 
Receivable from affiliates  10,863 
Other receivables and prepaid assets  34,272 
 
Total assets  188,517,473 
 
Liabilities   
Payable for investments purchased  6,268,860 
Payable for fund shares repurchased  154,210 
Payable to affiliates   
 Accounting and legal services fees  9,974 
 Distribution and service fees  60,849 
 Trustees’ fees  16,620 
 Management fees  83,986 
Other liabilities and accrued expenses  17,635 
 
Total liabilities  6,612,134 
 
Net assets   
Capital paid-in  $197,577,425 
Distributions in excess of net investment income  (15,708) 
Accumulated net realized loss on investments  (16,135,725) 
Net unrealized appreciation on investments  479,347 
 
Net assets  $181,905,339 
 
Net asset value per share   
Class A ($138,660,745 ÷ 18,662,712 shares)  $7.43 
Class B ($8,177,600 ÷ 1,100,659 shares)1  $7.43 
Class C ($35,066,994 ÷ 4,720,013 shares)1  $7.43 
 
Maximum offering price per share   
Class A (net asset value per share ÷ 95.5%)2  $7.78 

1 Redemption price is equal to net asset value less any applicable contingent deferred sales charge.

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

See notes to financial statements

  Annual report | High Yield Municipal Bond Fund  19 

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 5-31-09

These Statements of Operations summarize the Fund’s investment income earned and expenses incurred in operating the Fund. It also shows net gains (losses) for the periods stated.

  Period  Year 
  ended  ended 
  5-31-091  8-31-08 
 
Investment income     
 
Interest  $7,002,431  $6,186,013 
 
Expenses     
Investment management fees (Note 5)  579,427  602,797 
Distribution and service fees (Note 5)  414,005  428,030 
Transfer agent fees (Note 5)  59,963  61,596 
Accounting and legal services fees (Note 5)  10,994  11,478 
State registration fees  44,405  38,966 
Interest expense and fees on inverse floaters  —  158,712 
Trustees’ fees  5,912  4,301 
Printing and postage fees  33,520  26,188 
Professional fees  63,344  37,513 
Custodian fees  22,642  43,987 
Proxy fees  37,334  — 
Miscellaneous  19,726  8,052 
 
Total expenses  1,291,272  1,421,620 
Less expense reductions (Note 5)  (568)  (1,241) 
 
Net expenses  1,290,704  1,420,379 
 
Net investment income  5,711,727  4,765,634 
 
Realized and unrealized gain (loss)     
Net realized loss on investments  (5,100,008)  (2,343,261) 
 
Change in net unrealized appreciation (depreciation)     
 of investments  (1,063,863)  (1,963,817) 
 
Net realized and unrealized loss  (6,163,871)  (4,307,078) 
 
Increase (decrease) in net assets from operations  ($452,144)  $458,556 

1 For the nine month period ended May 31, 2009, the Fund changed its fiscal year end from August 31 to May 31.

See notes to financial statements

20  High Yield Municipal Bond Fund | Annual report 

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

Statements 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 three 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.

  Period  Year  Year 
  ended  ended  ended 
  5-31-091  8-31-08  8-31-07 
Increase (decrease) in net assets       
From operations       
Net investment income  $5,711,727  $4,765,634  $4,495,676 
Net realized loss  (5,100,008)  (2,343,261)  (500,700) 
Change in net unrealized       
 appreciation (depreciation)  (1,063,863)  (1,963,817)  (3,372,287) 
 
Increase (decrease) in net assets resulting       
 from operations  (452,144)  458,556  622,689 
Distributions to shareholders       
From net investment income       
Class A  (4,087,284)  (3,699,573)  (3,535,927) 
Class B  (261,655)  (387,707)  (525,790) 
Class C  (824,023)  (626,760)  (387,413) 
 
Total distributions  (5,172,962)  (4,714,040)  (4,449,130) 
 
From Fund share transactions (Note 6)  62,887,615  38,375,589  (3,476,825) 
 
Total increase (decrease)  57,262,509  34,120,105  (7,303,266) 
 
Net assets       
Beginning of period  124,642,830  90,522,725  97,825,991 
 
Period ended  $181,905,339  $124,642,830  $90,522,725 
 
Distributions in excess of       
 net investment income  ($15,708)  ($4,074)  ($13,237) 

1 For the nine month period ended May 31, 2009, the Fund changed its fiscal year end from August 31 to May 31.

See notes to financial statements

  Annual report | High Yield Municipal Bond Fund  21 

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

Financial highlights

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

CLASS A SHARES Period ended  5-31-091  8-31-08  8-31-07  8-31-06  8-31-052  8-31-042 
Per share operating performance             
Net asset value, beginning of period  $7.99  $8.33  $8.68  $8.62  $8.27  $8.14 
Net investment income3  0.32  0.41  0.41  0.42  0.43  0.47 
Net realized and unrealized gain (loss)             
 on investments  (0.58)  (0.34)  (0.35)  0.05  0.35  0.12 
Total from investment operations  (0.26)  0.07  0.06  0.47  0.78  0.59 
Less distributions             
From net investment income  (0.30)  (0.41)  (0.41)  (0.41)  (0.43)  (0.46) 
Net asset value, end of period  $7.43  $7.99  $8.33  $8.68  $8.62  $8.27 
Total return (%)4  (3.04)5  0.816  0.606  5.616  9.64  7.416 
Ratios and supplemental data             
Net assets, end of period (in millions)  $139  $94  $71  $72  $72  $69 
Ratios (as a percentage of average net             
 assets):             
 Expenses before reductions  1.157,8  1.09  1.13  1.09  1.14  1.10 
 Interest and fees9  —  0.16  0.20  —  —  — 
 Expenses net of fee waivers  1.157,8  1.25  1.33  1.09  1.14  1.09 
 Expenses net of all fee waivers             
   and credits  1.157,8  1.25  1.33  1.09  1.14  1.09 
 Net investment income  6.077  4.85  4.77  4.71  5.09  5.67 
Portfolio turnover (%)  49  75  63  52  65  57 
 

1 For the nine month period ended May 31, 2009, the Fund changed its fiscal year end from August 31 to May 31.

2 Audited by previous Independent Registered Public Accounting Firm.

3 Based on the average of the shares outstanding.

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

5 Not annualized.

6 Total returns would have been lower had certain expenses not been reduced during the periods shown.

7 Annualized.

8 Includes proxy fees. The impact of this expense to the gross and net expense ratios was 0.04%.

9 Interest expenses and fees are related to the Fund’s investment in inverse floater rate investments. Under accounting rules, the Fund recognizes additional income in an amount equal to these expenses.

See notes to financial statements

22  High Yield Municipal Bond Fund | Annual report 

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

CLASS B SHARES Period ended  5-31-091  8-31-08  8-31-07  8-31-06  8-31-052  8-31-042 
Per share operating performance             
Net asset value, beginning of period  $7.99  $8.33  $8.68  $8.62  $8.27  $8.14 
Net investment income3  0.28  0.35  0.35  0.36  0.37  0.41 
Net realized and unrealized gain (loss)             
 on investments  (0.58)  (0.34)  (0.36)  0.04  0.35  0.12 
Total from investment operations  (0.30)  0.01  (0.01)  0.40  0.72  0.53 
Less distributions             
From net investment income  (0.26)  (0.35)  (0.34)  (0.34)  (0.37)  (0.40) 
Net asset value, end of period  $7.43  $7.99  $8.33  $8.68  $8.62  $8.27 
Total return (%)4  (3.59)5  0.066  (0.15)6  4.836  8.84  6.626 
 
Ratios and supplemental data             
Net assets, end of period (in millions)  $8  $8  $11  $16  $24  $31 
Ratios (as a percentage of average net             
 assets):             
 Expenses before reductions  1.907,8  1.84  1.88  1.84  1.87  1.84 
 Interest and fees9  —  0.16  0.20  —  —  — 
 Expenses net of fee waivers  1.907,8  2.00  2.08  1.84  1.87  1.83 
 Expenses net of all fee waivers             
   and credits  1.907,8  2.00  2.08  1.84  1.87  1.83 
 Net investment income  5.347  4.09  4.05  4.11  4.35  4.93 
Portfolio turnover (%)  49  75  63  52  65  57 
 

1 For the nine month period ended May 31, 2009, the Fund changed its fiscal year end from August 31 to May 31.

2 Audited by previous Independent Registered Public Accounting Firm.

3 Based on the average of the shares outstanding.

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

5 Not annualized.

6 Total returns would have been lower had certain expenses not been reduced during the periods shown.

7 Annualized.

8 Includes proxy fees. The impact of this expense to the gross and net expense ratios was 0.04%.

9 Interest expenses and fees are related to the Fund’s investment in inverse floater rate investments. Under accounting rules, the Fund recognizes additional income in an amount equal to these expenses.

See notes to financial statements

  Annual report | High Yield Municipal Bond Fund  23 

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

CLASS C SHARES Period ended  5-31-091  8-31-08  8-31-07  8-31-06  8-31-052  8-31-042 
Per share operating performance             
Net asset value, beginning of period  $7.99  $8.33  $8.68  $8.62  $8.27  $8.14 
Net investment income3  0.28  0.34  0.34  0.35  0.36  0.40 
Net realized and unrealized gain (loss)             
 on investments  (0.58)  (0.33)  (0.35)  0.05  0.36  0.13 
Total from investment operations  (0.30)  0.01  (0.01)  0.40  0.72  0.53 
Less distributions             
From net investment income  (0.26)  (0.35)  (0.34)  (0.34)  (0.37)  (0.40) 
Net asset value, beginning of period  $7.43  $7.99  $8.33  $8.68  $8.62  $8.27 
Total return (%)4  (3.59)5  0.066  (0.15)6  4.836  8.82  6.616 
 
Ratios and supplemental data             
Net assets, end of period (in millions)  $35  $23  $9  $9  $8  $8 
Ratios (as a percentage of average net             
 assets):             
 Expenses before reductions  1.907,8  1.84  1.88  1.84  1.89  1.84 
 Interest and fees9  —  0.16  0.20  —  —  — 
 Expenses net of fee waivers  1.907,8  2.00  2.08  1.84  1.89  1.83 
 Expenses net of all fee waivers             
   and credits  1.907,8  2.00  2.08  1.84  1.89  1.83 
 Net investment income  5.297  4.11  4.02  4.09  4.33  4.88 
Portfolio turnover (%)  49  75  63  52  65  57 
 

1 For the nine month period ended May 31, 2009, the Fund changed its fiscal year end from August 31 to May 31.

2 Audited by previous Independent Registered Public Accounting Firm.

3 Based on the average of the shares outstanding.

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

5 Not annualized.

6 Total returns would have been lower had certain expenses not been reduced during the periods shown.

7 Annualized.

8 Includes proxy fees. The impact of this expense to the gross and net expense ratios was 0.04%.

9 Interest expenses and fees are related to the Fund’s investment in inverse floater rate investments. Under accounting rules, the Fund recognizes additional income in an amount equal to these expenses.

See notes to financial statements

24  High Yield Municipal Bond Fund | Annual report 

Notes to financial statements

Note 1
Organization

John Hancock High Yield Municipal Bond Fund (the Fund) is a non-diversified series of John Hancock Municipal Securities Trust (the Trust), an open-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act). The investment objective of the Fund is to seek a high level of current income that is largely exempt from federal income tax, consistent with preservation of capital.

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

Note 2
Significant accounting policies

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:

Security valuation

Investments are stated at value as of the close of the regular trading on the New York Stock Exchange (NYSE), normally at 4:00 P.M., Eastern Time. Equity securities held by the Fund are valued at the last sale price or official closing price (closing bid price or last evaluated price if no sale has occurred) as of the close of business on the principal securities exchange (domestic or foreign) on which they trade. Debt obligations are valued based on the evaluated prices provided by an independent pricing service, which utilizes both dealer-supplied and electronic data processing techniques, which take into account factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other market data as well as broker quotes. Securities traded only in the over-the-counter market are valued at the last bid price quoted by brokers making markets in the securities at the close of trading. Debt obligations are valued based on broker quotes or fair valued as described below. Short-term debt investments that have a remaining maturity of 60 days or less are valued at amortized cost, and thereafter assume a constant amortization to maturity of any discount or premium, which approximates market value.

Other portfolio securities and assets for which market quotations are not readily available are valued at fair value as determined in good faith by the Fund’s Pricing Committee in accordance with procedures adopted by the Board of Trustees.

Municipal valuations change in response to many factors including tax receipts and budget disbursements of the municipalities, general economic conditions, interest rates, investor perceptions and market liquidity.

The Fund adopted Statement of Financial Accounting Standards No. 157 (FAS 157), Fair Value Measurements, effective with the beginning of the Fund’s fiscal year. FAS 157 established a three-tier hierarchy to prioritize the assumptions, referred to as inputs, used in valuation techniques to measure fair value.

The three-tier hierarchy of inputs is summarized in the three broad levels listed below:

  Annual report | High Yield Municipal Bond Fund  25 

Level 1 – Quoted prices in active markets for identical securities.

Level 2 – Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants would use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.

Level 3 – Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable, such as when there is little or no market activity for an investment, unobservable inputs may be used. Unobservable inputs reflect the Fund’s Pricing Committee’s own assumptions about the factors that market participants would use in pricing an investment and would be based on the best information available.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used to value the Fund’s net assets as of May 31, 2009:

  INVESTMENTS IN  OTHER FINANCIAL 
VALUATION INPUTS  SECURITIES  INSTRUMENTS* 
Level 1 — Quoted Prices  —  — 
Level 2 — Other Significant Observable Inputs  $181,105,280  — 
Level 3 — Significant Unobservable Inputs  —  — 
Total  $181,105,280  — 

*Other financial instruments are derivative instruments not reflected in the Portfolio of Investments, such as futures, forwards, options and swap contracts, which are stated at value based upon futures’ settlement prices, foreign currency exchange forward rates, option prices and swap prices.

Security transactions and related
investment income

Investment security 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. Interest income is accrued as earned. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Discounts/premiums are accreted/amortized for financial reporting purposes. Non-cash dividends are recorded at the fair market value of the securities received. Debt obligations may be placed in a non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful. The Fund uses the identified cost method for determining realized gain or loss on investments for both financial statement and federal income tax reporting purposes.

Line of credit

The Fund and other affiliated funds have entered into an agreement which enables it to participate in a $150 million unsecured committed line of credit with State Street Corporation (the Custodian). The Fund is permitted to have bank borrowings for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. Interest is charged to each participating fund based on its borrowings at a rate per annum equal to the Federal Funds rate plus 0.50%. In addition, a commitment fee of 0.08% per annum, payable at the end of each calendar quarter, based on the average daily-unused portion of the line of credit, is charged to each participating fund on a prorated basis based on average net assets. Prior to February 19, 2009, the commitment fee was 0.05% per annum. For the period ended May 31, 2009, there were no borrowings under the line of credit by the Fund.

26  High Yield Municipal Bond Fund | Annual report 

Pursuant to the custodian agreement, the Custodian may, in its discretion, advance funds to the Fund to make properly authorized payments. When such payments result in an overdraft, the Fund is obligated to repay the Custodian for any overdraft, including any costs or expenses associated with the overdraft. The Custodian has a lien, security interest or security entitlement in any Fund property, that is not segregated, to the maximum extent permitted by law to the extent of any overdraft.

Expenses

The majority of expenses are directly identifiable to an individual fund. Trust 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 size of the funds. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.

Class allocations

Income, common expenses and realized and unrealized gains (losses) are determined at the fund level and allocated daily to each class of shares based on the appropriate net asset value of the respective classes. Distribution and service fees, if any, and transfer agent fees for all classes are calculated daily at the class level based on the appropriate net asset value of each class and the specific expense rate(s) applicable to each class.

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 a $13,356,451 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, it will reduce the amount of capital gain distribution to be paid. The loss carryforward expires as follows: May 31, 2010 — $1,227,272, May 31, 2011 —$2,540,698, May 31, 2012 — $2,816,241, May 31, 2013 — $1,681,342, May 31, 2014 — $119,574, May 31, 2015 —$1,176,656, May 31, 2016 — $502,278 and May 31, 2017 — $3,292,390. Additionally, net capital losses of $3,604,024 that are attributable to security transactions incurred after October 31, 2008, are treated as arising on June 1, 2009, the first day of the Fund’s next taxable year.

As of May 31, 2009, the Fund had no uncertain tax positions that would require financial statement recognition, de-recognition, or disclosure. Each of the Fund’s federal tax returns filed in the 3-year period ended May 31, 2009 remains subject to examination by the Internal Revenue Service.

Distribution of income and gains

The Fund records distributions to shareholders from net investment income and net realized gains, if any, on the ex-dividend date. The Fund generally declares dividends daily and pays them monthly. Capital gain distributions, if any, are distributed annually. During the year ended August 31, 2007, the tax character of distributions paid was as follows: ordinary income $16,035 and tax exempt income $4,433,095. During the year ended August 31, 2008, the tax character of distributions paid was as follows: ordinary income $85,708 and tax exempt income $4,648,369. During the period ended May 31, 2009, the tax character of distributions paid was as follows: ordinary income $40,454 and tax exempt income $5,132,508. Distributions paid by the Fund with respect to each class of shares are calculated in the same manner, at the same time and are in the same amount, except for the effect of expenses that may be applied differently to each class.

Such distributions and distributable earnings, 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.

  Annual report | High Yield Municipal Bond Fund  27 

Capital accounts within financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period. Permanent book-tax differences are primarily attributable to amortization and accretion on debt securities.

Note 3
Risk and uncertainties

Non-diversified risk

The Fund is allowed to invest in the securities of a relatively small number of issuers, which may result in greater susceptibility to associated risks. As a result, credit, market and other risks associated with a fund’s investment strategies or techniques may be more pronounced for the Fund than for funds that are diversified.

Fixed income risk

Fixed income securities are subject to credit and interest rate risk and involve some risk of default in connection with principal and interest payments.

Insurance concentration risk

The Fund may hold insured municipal obligations which are insured as to their scheduled payment of principal and interest under an insurance policy obtained by the issuer or underwriter of the obligation at the time of its original issuance. Since there are a limited number of municipal obligation insurers, a Fund may have a concentration of investments covered by one insurer. Accordingly, the concentration may make the Fund’s value more volatile and investment values may rise and fall more rapidly. In addition, the credit quality of companies which provide the insurance may affect the value of those securities and insurance does not guarantee the market value of the insured obligation.

Investing in high yield securities

Investing in high yield securities may involve greater risks and considerations not typically associated with investing in U.S. government bonds and other high quality fixed-income securities. These securities are non-investment grade securities, often referred to as “junk bonds.” Economic downturns may disrupt the high yield market and impair the ability of issuers to repay principal and interest. Also, an increase in interest rates would likely have an adverse impact on the value of such obligations. Moreover, high yield securities may be less liquid due to the extent that there is no established retail secondary market and because of a decline in the value of such securities. The Fund may not be able to sell bonds at desired prices and that large purchases or sales of certain high-yield bond issues may cause substantial fluctuations in share price, yield and total return.

Municipal bond risk

The Fund generally invests in general obligation or revenue municipal bonds. The bonds are backed by the municipal issuers and have the risk that the issuer’s credit quality will decline. General obligation bonds are backed by the municipal issuer’s ability to levy taxes. In extreme cases, a municipal issuer could declare bankruptcy or otherwise become unable to honor its commitments to bondholders which may be caused by many reasons, including fiscal mismanagement and erosion of the tax base. Revenue bonds are backed only by income associated with a specific facility. Any circumstance that reduces or threatens the economic viability of that particular facility can affect the bond’s credit quality.

State concentration risk

The Fund may concentrate its investments in a single state and its performance is affected by local, state and regional factors. The risks may include economic or policy changes, erosion of the tax base, and state legislative changes (especially those regarding budgeting and taxes). Although the Fund invests mainly in investment-grade bonds, which generally have a relatively low level of credit risk, any factors that might lead to a credit decline statewide would be likely to cause widespread decline in the credit quality of the Fund’s holdings.

Note 4
Guarantees and indemnifications

Under the Fund’s organizational documents, its Officers and Trustees are indemnified against certain liabilities arising out of the performance

28  High Yield Municipal Bond Fund | Annual report 

of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts with service providers that contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred.

Note 5
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 equivalent, on an annual basis, to the sum of: (a) 0.625% of the first $75,000,000 of the Fund’s average daily net asset value, (b) 0.5625% of the next 75,000,000 and (c) 0.50% of the Fund’s average daily net asset value in excess of $150,000,000. The Adviser has a subadvisory agreement with MFC Global Investment Management (U.S.), LLC, an indirectly owned subsidiary of MFC and an affiliate of the Adviser. The Fund is not responsible for payment of subadvisory fees.

The investment management fees incurred for the period ended May 31, 2009, were equivalent to an annual effective rate of 0.60% of the Fund’s average daily net assets.

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

Pursuant to the Advisory Agreement, the Fund reimburses the Adviser for all expenses associated with providing the administrative, financial, legal, accounting and recordkeeping services of the Fund, including the preparation of all tax returns, annual, semiannual and periodic reports to shareholders and the preparation of all regulatory reports. These expenses are allocated based on the relative share of net assets of each class at the time the expense was incurred.

The accounting and legal services fees incurred for the period ended May 31, 2009, were equivalent to an annual effective rate of less than 0.01% of the Fund’s average daily net assets.

The Fund has an agreement with its custodian bank, under which custody fees are reduced by balance credits applied during the period. The expense reductions related to custody fee offsets amounted to $554.

Class A shares are assessed up-front sales charges. During the period ended May 31, 2009, JH Funds received net up-front sales charges of $521,077 with regard to sales of Class A shares. Of this amount, $62,141 was retained and used for printing prospectuses, advertising, sales literature and other purposes, $458,896 was paid as sales commissions to unrelated broker-dealers and $40 was paid as sales commissions to sales personnel of Signator Investors, Inc. (Signator Investors), a related broker-dealer. The Adviser’s indirect parent, John Hancock Life Insurance Company (JHLICO), is the indirect sole shareholder of Signator Investors.

Class B shares that are redeemed within six years of purchase are subject to a contingent deferred sales charge (CDSC) at declining rates, beginning at 5.00% of the lesser of the current market value at the time of redemption or the original purchase cost of the shares being redeemed. Class C shares that are redeemed within one year of purchase are subject to a

  Annual report | High Yield Municipal Bond Fund  29 

CDSC at a rate of 1.00% of the lesser of the current market value at the time of redemption or the original purchase cost of the shares being redeemed. Proceeds from the CDSCs are paid to JH Funds and are used in whole or in part to defray its expenses for providing distribution-related services to the Fund in connection with the sale of Class B and Class C shares. During the period ended May 31, 2009, CDSCs received by JH Funds amounted to $15,316 for Class B shares and $7,057 for Class C shares.

The Fund has a transfer agent agreement with John Hancock Signature Services, Inc. (Signature Services), an indirect subsidiary of JHLICO. The transfer agent fees are made up of three components:

• The Fund pays a monthly transfer agent fee at an annual rate of 0.01% for all classes based on each class’s average daily net assets.

• All classes oft he Fund paid a monthly fee based on an annual rate of $17.50 per shareholder account.

• In addition, Signature Services is reimbursed for certain out-of-pocket expenses.

The Fund receives earnings credits from its transfer agent as a result of uninvested cash balances. These credits are used to reduce a portion of the Fund’s transfer agent fees and out-of-pocket expenses. During the period ended May 31, 2009, the Fund’s transfer agent fees and out-of-pocket expenses were reduced by $14 for transfer agent credits earned.

Class level expenses for the period ended May 31, 2009 were as follows:

  Distribution and  Transfer 
Share class  service fees  agent fees 
Class A  $185,391  $45,834 
Class B  54,664  3,360 
Class C  173,950  10,769 
Total  $414,005  $59,963 

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. Mr. John G. Vrysen is a Board member of the Adviser, as well as affiliated Trustee of the Fund, and is compensated by the Adviser and/or its affiliates. The compensation of unaffiliated Trustees is borne by the Fund. The unaffiliated Trustees may elect to defer, for tax purposes, their receipt of this compensation under the John Hancock Group of Funds Deferred Compensation Plan. The Fund makes investments into other John Hancock funds, as applicable, to cover its liability for the deferred compensation. Investments to cover the Fund’s deferred compensation liability are recorded on the Fund’s books as an other asset. The deferred compensation liability and the related other asset are always equal and are marked to market on a periodic basis to reflect any income earned by the investments, as well as any unrealized gains or losses. The Deferred Compensation Plan investments had no impact on the operations of the Fund.

30  High Yield Municipal Bond Fund | Annual report 

Note 6

Fund share transactions

This listing illustrates the number of Fund shares sold, reinvested and repurchased during the period ended May 31, 2009, and years ended August 31, 2008 and August 31, 2007, along with the corresponding dollar value.

  Period ended 5-31-091  Year ended 8-31-08  Year ended 8-31-07 
  Shares  Amount  Shares  Amount  Shares  Amount 
Class A shares             
Sold  10,137,109  $71,928,971  4,915,022  $39,839,099  1,580,206  $13,718,967 
Distributions             
reinvested  380,106  2,686,707  250,989  2,041,557  199,960  1,732,127 
Repurchased  (3,589,611)  (25,647,418)   (1,894,507)  (15,471,342)  (1,666,172)  (14,391,723) 
 
Net increase  6,927,604  $48,968,260  3,271,504  $26,409,314  113,994  $1,059,371 
 
Class B shares             
Sold  317,921  $2,263,883  211,312  $1,716,618  124,185  $1,074,189 
Distributions             
reinvested  17,646  124,577  21,935  179,122  26,263  227,789 
Repurchased  (283,524)  (2,014,533)  (458,316)  (3,769,732)  (732,391)  (6,367,545) 
 
Net increase             
(decrease)  52,043  $373,927  (225,069)  ($1,873,992)  (581,943)  ($5,065,567) 
 
Class C shares             
Sold  2,814,002  $19,992,868  2,153,756  $17,641,134  232,043  $2,019,466 
Distributions             
reinvested  68,219  481,885  41,481  336,595  23,094  199,968 
Repurchased  (982,496)  (6,929,325)  (502,921)  (4,137,462)  (195,597)  (1,690,063) 
 
Net increase  1,899,725  $13,545,428  1,692,316  $13,840,267  59,540  $529,371 
 
Net increase             
(decrease)  8,879,372  $62,887,615  4,738,751  $38,375,589  (408,409)  ($3,476,825) 

1 For the nine month period ended May 31, 2009, the Fund changed its fiscal year end from August 31 to May 31.

Note 7
Purchase and sale of securities

Purchases and proceeds from sales or maturities of securities, including purchases and sales of variable rate demand notes of $21,690,000 and $23,030,000, respectively, during the period ended May 31, 2009, aggregated $127,528,708 and $64,003,512, respectively. Short-term securities are excluded from these amounts.

Note 8
Change in fiscal year end

On March 12, 2009, the Board of Trustees approved to change the Fund’s fiscal year-end from August 31 to May 31.

  Annual report | High Yield Municipal Bond Fund  31 

Auditors’ report

Report of Independent Registered Public Accounting Firm

To the Board of Trustees and Shareholders of John Hancock High Yield Municipal Bond Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of John Hancock High Yield Municipal Bond Fund (the “Fund”) at May 31, 2009, and the results of its operations, the changes in its net assets and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at May 31, 2009 by correspondence with the custodian and brokers, and the application of alternative auditing procedures where securities purchased confirmations had not been received, provide a reasonable basis for our opinion. The financial highlights for each of the periods ended on or before August 31, 2005 were audited by other auditors whose report expressed an unqualified opinion thereof.

PricewaterhouseCoopers LLP
Boston, Massachusetts
July 17, 2009

32  High Yield Municipal Bond Fund | Annual report 

Tax information

Unaudited

For federal income tax purposes, the following information is furnished with respect to the distributions of the Fund, if any, paid during its taxable year ended May 31, 2009.

The Fund designates 99.23% of dividends from net investment income as exempt-interest dividends. The percentage of dividends subject to the alternative minimum tax is 13.39%.

For specific information on exception provisions in your state, consult your local state tax office or your tax adviser. Shareholders will be mailed a 2009 U.S. Treasury Department Form 1099-DIV in January 2010. This will reflect the total of all distributions that are taxable for calendar year 2009.

  Annual report | High Yield Municipal Bond Fund  33 

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

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

At meetings held on May 5–6 and June 9–10, 2008, 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 its Independent Trustees, reviewed a broad range of information requested for this purpose. This information included: (i) the investment performance of the Fund relative to a category of relevant funds (the Category) and a peer group of comparable funds (the Peer Group). The funds within each Category and Peer Group were selected by Morningstar Inc. (Morningstar), an independent provider of investment company data. Data covered a range of periods ended December 31, 2007, (ii) advisory and other fees incurred by, and the expense ratios of, the Fund relative to a Category and a Peer Group, (iii) the advisory fees of comparable portfolios of other clients of the Adviser and the Subadviser, (iv) the Adviser’s financial results and condition, including its and certain of its affiliates’ profitability from services performed for the Fund, (v) breakpoints in the Fund’s and the Peer Group’s fees, and information about economies of scale, (vi) the Adviser’s and Subadviser’s record of compliance with applicable laws and regulations, with the Fund’s investment policies and restrictions, and with the applicable Code of Ethics, and the structure and responsibilities of the Adviser’s and Subadviser’s compliance department, (vii) the background and experience of senior management and investment professionals, and (viii) the nature, cost and character of advisory and non-investment management services provided by the Adviser and its affiliates and by the Subadviser.

The Independent Trustees considered the legal advice of independent legal counsel and relied on their own business judgment in determining the factors to be considered in evaluating the materials that were presented to them and the weight to be given to each such factor. 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. The Board principally considered data on performance and other information provided by Morningstar as of December 31, 2007. The Board also considered updated performance information provided to it by the Adviser or Subadviser at its May and June 2008 meetings. Performance and other information may be quite different as of 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 considered the investment philosophy, research and

34  High Yield Municipal Bond Fund | Annual report 

investment decision-making processes of the Adviser and Subadviser. The Board considered the Adviser’s execution of its oversight responsibilities. The Board further considered the culture of compliance, resources dedicated to compliance, compliance programs and compliance records of the Adviser and Subadviser. In addition, the Board took into account the administrative and other non-advisory 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 supported renewal of the Advisory Agreements.

Fund performance

The Board considered the performance results for the Fund over various time periods ended December 31, 2007. The Board also considered these results in comparison to the performance of the Category, as well as the Fund’s Peer Group and benchmark index. The Board reviewed with representatives of Morningstar the methodology used by Morningstar to select the funds in the Category and the Peer Group.

The Board noted that the Fund’s performance for the 1- and 10-year periods was lower than the performance of its benchmark index, the Lehman Brothers Municipal Bond Index, as was the Category and Peer Group medians. The Board also noted that the Fund’s performance was higher than the benchmark index for the 3- and 5-year periods. The Board favorably viewed that the Fund’s performance has higher than the Category and Peer Group medians for the 1-, 3- and 5-year periods.

Investment advisory fee and subadvisory
fee rates and expenses

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

The Board received and considered expense information regarding the Fund’s various components, including advisory fees, distribution and fees other than advisory and distribution fees, including transfer agent fees, custodian fees, and other miscellaneous fees (e.g., fees for accounting and legal services). The Board considered comparisons of these expenses to the Peer Group median. The Board also received and considered expense information regarding the Fund’s total operating expense ratio (Expense Ratio). The Board noted that, unlike the Fund, several funds in the Peer Group employed fee waivers or reimbursements. The Board received and considered information comparing the Expense Ratio of the Fund to that of the Peer Group and Category medians before the application of fee waivers and reimbursements (Gross Expense Ratio) and after the application of such waivers and reimbursement (Net Expense Ratio). The Board noted that the Fund’s Gross Expense Ratio and Net Expense Ratio were higher than the Category and Peer Group medians.

The Adviser also discussed the Morningstar data and rankings, and other relevant information, for the Fund. Based on the above-referenced considerations and other factors, the Board concluded that the Fund’s overall expense results and performance 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

  Annual report | High Yield Municipal Bond Fund  35 

Subadviser. The Board also considered a comparison of the Adviser’s profitability to that of other similar investment advisers whose profitability information is publicly available. The Board concluded that, in light of the costs of providing investment management and other services to the Fund, the profits and other ancillary benefits reported by the Adviser were not unreasonable.

Economies of scale

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

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

Information about services to other clients

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

Other benefits to the Adviser

The Board received information regarding potential “fall-out” or ancillary benefits received by the Adviser and its affiliates, including the Subadviser, as a result of their relationship with the Fund. Such benefits could include, among others, benefits directly attributable to the relationship of the Adviser and Subadviser with the Fund and benefits potentially derived from an increase in business as a result of their 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 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.

Board Consideration of Amendments
to Investment Advisory Agreement

In approving the proposed new form of Advisory Agreement at the December 8–9, 2008 meeting (which is subject to shareholder approval), the Board determined that it was appropriate to rely upon its recent consideration at its June 10, 2008 meeting of such factors as: fund performance; the realization of economies of scale; profitability of the Advisory Agreement to the Adviser; and comparative advisory fee

36  High Yield Municipal Bond Fund | Annual report 

rates (as well as its conclusions with respect to those factors). The Board noted that it had, at the June 10, 2008 meeting, concluded that these factors, taken as a whole, supported the continuation of the Advisory Agreement. The Board, at the December 8–9, 2008 meeting, revisited particular factors to the extent relevant to the proposed new form of Agreement. In particular, the Board noted the skill and competency of the Adviser in its past management of the Fund’s affairs and subadvisory relationships, the qualifications of the Adviser’s personnel who perform services for the Trust and the Fund, including those who served as officers of the Trust, and the high level and quality of services that the Adviser may reasonably be expected to continue to provide the Fund and concluded that the Adviser may reasonably be expected to perform its services ably under the proposed new form of Advisory Agreement. The Board also took into consideration the extensive analysis and effort undertaken by a working group comprised of a subset of the Board’s Independent Trustees, which met several times, both with management representatives and separately, prior to the Board’s December 8–9, 2008 meeting. The Board considered the differences between the current Advisory Agreement and proposed new form of Agreement, and agreed that the new Advisory Agreement structure would more clearly delineate the Adviser’s duties under the Agreement by separating the Adviser’s non-advisory functions from its advisory functions. The enhanced delineation is expected to facilitate oversight of the Adviser’s advisory and non-advisory activities without leading to any material increase in the Fund’s overall expense ratios.

  Annual report | High Yield Municipal Bond Fund  37 

Special Shareholder Meeting (Unaudited)

On January 28, 2009 a Special Meeting of the Shareholders of John Hancock Municipal Series Trust and its series, John Hancock High Yield Municipal Bond Fund, was held at 601 Congress Street, Boston, Massachusetts for the purpose of considering and voting on the proposal listed below:

To approve a revised fundamental investment policy concerning tax-exempt investments.

PROPOSAL PASSED ON JANUARY 28, 2009

    % of Outstanding  % of Shares 
  No. of Shares  Shares  Present 
 
Affirmative  7,182,191.679  44.998%  88.467% 
Against  558,514.315  3.499%  6.880% 
Abstain  377,778.019  2.367%  4.653% 
Total  8,118,484.013  50.864%  100% 

On April 16, 2009, a Special Meeting of the Shareholders of John Hancock Municipal Series Trust and its series, John Hancock High Yield Municipal Bond Fund, was held at 601 Congress Street, Boston, Massachusetts for the purpose of considering and voting on the proposals listed below:

Proposal 1: Election of eleven Trustees as members of the Board of Trustees of John Hancock Municipal Securities Trust.

PROPOSAL 1 PASSED FOR  ALL TRUSTEES ON APRIL 16, 2009.

1. Election of eleven Trustees as members of the Board of Trustees of each of the Trusts (all Trusts):

    % of Outstanding  % of Shares 
  No. of Shares  Shares  Present 
 
James R. Boyle       
Affirmative  38,496,265.7600  61.895%  95.248% 
Withhold  1,920,578.4220  3.088%  4.752% 
 
TOTAL  40,416,844.1820  64.983%  100.000% 
 
John G. Vrysen       
Affirmative  38,476,014.7600  61.863%  95.198% 
Withhold  1,940,829.4220  3.120%  4.802% 
 
TOTAL  40,416,844.1820  64.983%  100.000% 
 
James F. Carlin       
Affirmative  38,426,291.2820  61.783%  95.075% 
Withhold  1,990,552.9000  3.200%  4.925% 
 
TOTAL  40,416,844.1820  64.983%  100.000% 
 
William H. Cunningham       
Affirmative  38,465,617.4970  61.846%  95.172% 
Withhold  1,951,226.6850  3.137%  4.828% 
 
TOTAL  40,416,844.1820  64.983%  100.000% 
 
Deborah Jackson       
Affirmative  38,417,390.9940  61.768%  95.053% 
Withhold  1,999,453.1880  3.215%  4.947% 
 
TOTAL  40,416,844.1820  64.983%  100.000% 

38  High Yield Municipal Bond Fund | Annual report 

    % of Outstanding  % of Shares 
  No. of Shares  Shares  Present 
 
Charles L. Ladner       
Affirmative  38,409,621.1310  61.756%  95.034% 
Withhold  2,007,223.0510  3.227%  4.966% 
 
TOTAL  40,416,844.1820  64.983%  100.000% 
 
Stanley Martin       
Affirmative  38,462,185.7870  61.840%  95.164% 
Withhold  1,954,658.3950  3.143%  4.836% 
 
TOTAL  40,416,844.1820  64.983%  100.000% 
 
Patti McGill Peterson       
Affirmative  38,382,793.7560  61.713%  94.967% 
Withhold  2,034,050.4260  3.270%  5.033% 
 
TOTAL  40,416,844.1820  64.983%  100.000% 
 
John A. Moore       
Affirmative  38,382,058.7750  61.711%  94.965% 
Withhold  2,034,785.4070  3.272%  5.035% 
 
TOTAL  40,416,844.1820  64.983%  100.000% 
 
Steven R. Pruchansky       
Affirmative  38,472,426.3320  61.857%  95.189% 
Withhold  1,944,417.8500  3.126%  4.811% 
 
TOTAL  40,416,844.1820  64.983%  100.000% 
 
Gregory A. Russo       
Affirmative  38,465,242.6020  61.845%  95.171% 
Withhold  1,951,601.5800  3.138%  4.829% 
 
TOTAL  40,416,844.1820  64.983%  100.000% 

Proposal 6: To revise merger approval requirements for John Hancock Municipal Securities Trust.

PROPOSAL 6 PASSED ON APRIL 16, 2009.

6. Revision to merger approval requirements (all Trusts).

    % of Outstanding  % of Shares 
  No. of Shares  Shares  Present 
 
Affirmative  30,468,487.9750  48.987%  75.386% 
Against  1,699,149.5760  2.732%  4.204% 
Abstain  2,564,095.6310  4.123%  6.344% 
Broker Non-Votes  5,685,111.0000  9.141%  14.066% 
 
TOTAL  40,416,844.1820  64.983%  100.000% 

On May 5, 2009, an adjourned session of a Special Meeting of the Shareholders of John Hancock Municipal Series Trust and its series, John Hancock High Yield Municipal Bond Fund, held at 601 Congress Street, Boston, Massachusetts for the purpose of considering and voting on the proposals listed below:

  Annual report | High Yield Municipal Bond Fund  39 

Proposal 2: To approve a new form of Advisory Agreement between John Hancock Municipal Securities Trust and John Hancock Advisers, LLC.

PROPOSAL 2 PASSED ON MAY 5, 2009.

2. Approval of a new form of Advisory Agreement between each Trust and John Hancock Advisers, LLC (all Funds).

    % of Outstanding  % of Shares 
  No. of Shares  Shares  Present 
 
Affirmative  7,770,808.6010  46.140%  70.041% 
Against  289,752.5620  1.720%  2.612% 
Abstain  420,029.4810  2.494%  3.786% 
Broker Non-Votes  2,613,942.0000  15.520%  23.561% 
 
TOTAL  11,094,532.6440  65.874%  100.000% 

Proposal 3: To approve the following changes to fundamental investment restrictions:

PROPOSALS 3A and 3C-3F PASSED ON MAY 5, 2009.

3. Approval of the following changes to fundamental investment restrictions (See Proxy Statement for Fund(s) voting on this Proposal):

    % of Outstanding  % of Shares 
  No. of Shares  Shares  Present 
 
3A. Revise: Concentration       
 
Affirmative  7,733,982.8160  45.921%  69.709% 
Against  310,265.9240  1.842%  2.797% 
Abstain  436,339.9040  2.591%  3.933% 
Broker Non-Votes  2,613,944.0000  15.520%  23.561% 
 
TOTAL  11,094,532.6440  65.874%  100.000% 
 
3C. Revise: Underwriting       
 
Affirmative  7,706,269.3400  45.756%  69.460% 
Against  321,322.1450  1.908%  2.896% 
Abstain  452,997.1590  2.690%  4.083% 
Broker Non-Votes  2,613,944.0000  15.520%  23.561% 
 
TOTAL  11,094,532.6440  65.874%  100.000% 
 
3D. Revise: Real Estate       
 
Affirmative  7,673,172.9570  45.560%  69.161% 
Against  365,413.7090  2.170%  3.294% 
Abstain  442,003.9780  2.624%  3.984% 
Broker Non-Votes  2,613,942.0000  15.520%  23.561% 
 
TOTAL  11,094,532.6440  65.874%  100.000% 
 
3E. Revise: Loans       
 
Affirmative  7,657,563.4910  45.468%  69.020% 
Against  360,644.2840  2.141%  3.251% 
Abstain  462,383.8690  2.745%  4.168% 
Broker Non-Votes  2,613,941.0000  15.520%  23.561% 
 
TOTAL  11,094,532.6440  65.874%  100.000% 

40  High Yield Municipal Bond Fund | Annual report 

    % of Outstanding  % of Shares 
  No. of Shares  Shares  Present 
 
3F. Revise: Senior Securities       
 
Affirmative  7,727,797.2200  45.884%  69.653% 
Against  308,514.3640  1.832%  2.781% 
Abstain  444,280.0600  2.638%  4.005% 
Broker Non-Votes  2,613,941.0000  15.520%  23.561% 
 
TOTAL  11,094,532.6440  65.874%  100.000% 

Proposal 4: To approve amendments changing Rule 12b-1 Plans for certain classes of the Fund from “reimbursement” to compensation plans.

PROPOSAL 4 PASSED FOR ONLY CLASSES A AND B ON MAY 5, 2009.

Class A

4. Approval of amendments changing Rule 12b-1 Plans for certain classes of the Funds from “reimbursement” to “compensation” Plans.

    % of Outstanding  % of Shares 
  No. of Shares  Shares  Present 
 
Affirmative  6,079,536.4270  46.772%  69.967% 
Against  245,125.9900  1.886%  2.821% 
Abstain  360,632.4680  2.775%  4.150% 
Broker Non-Votes  2,003,888.0000  15.417%  23.062% 
 
TOTAL  8,689,182.8850  66.850%  100.000% 
 
Class B       

4. Approval of amendments changing Rule 12b-1 Plans for certain classes of the Funds from “reimbursement” to “compensation” Plans.

    % of Outstanding  % of Shares 
  No. of Shares  Shares  Present 
 
Affirmative  453,239.9450  46.641%  76.018% 
Against  20,767.0000  2.137%  3.483% 
Abstain  37,065.9510  3.814%  6.217% 
Broker Non-Votes  85,151.0000  8.763%  14.282% 
 
TOTAL  596,223.8960  61.355%  100.000% 
 
Class C       

4. Approval of amendments changing Rule 12b-1 Plans for certain classes of the Funds from “reimbursement” to “compensation” Plans.

    % of Outstanding  % of Shares 
  No. of Shares  Shares  Present 
 
Affirmative  1,099,001.9790  38.259%  60.748% 
Against  124,227.5910  4.325%  6.867% 
Abstain  60,991.2930  2.123%  3.371% 
Broker Non-Votes  524,905.0000  18.274%  29.014% 
 
TOTAL  1,809,125.8630  62.981%  100.000% 

  Annual report | High Yield Municipal Bond Fund  41 

 

Proposal 5: To adopt a manager of manager structure.

PROPOSAL 5 DID NOT PASS ON MAY 5, 2009.

5. Proposal adopting a manager of manager structure.

    % of Outstanding  % of Shares 
  No. of Shares  Shares  Present 
 
Affirmative  7,376,003.8970  43.796%  66.483% 
Against  636,323.1420  3.778%  5.735% 
Abstain  468,259.6050  2.780%  4.221% 
Broker Non-Votes  2,613,946.0000  15.520%  23.561% 
 
TOTAL  11,094,532.6440  65.874%  100.000% 

42  High Yield Municipal Bond Fund | Annual report 

Trustees and Officers

This chart provides information about the Trustees and Officers who oversee your John Hancock fund. Officers elected by the Trustees manage the day-to-day operations of the Fund and execute policies formulated by the Trustees.

Independent Trustees     
Name, Year of Birth    Number of John 
Position(s) held with Fund  Trustee  Hancock funds 
Principal occupation(s) and other  of Fund  overseen by 
directorships during past 5 years  since1  Trustee 
 
Patti McGill Peterson, Born: 1943  2005  48 
Chairperson (since December 2008); Principal, PMP Globalinc (consulting) (since 2007); Senior 
Associate, Institute for Higher Education Policy (since 2007); Executive Director, CIES (international 
education agency) (until 2007); Vice President, Institute of International Education (until 2007); Senior 
Fellow, Cornell University Institute of Public Affairs, Cornell University (until 1998); Former President 
Wells College, St. Lawrence University and the Association of Colleges and Universities of the State 
of New York. Director of the following: Niagara Mohawk Power Corporation (until 2003); Security 
Mutual Life (insurance) (until 1997); ONBANK (until 1993). Trustee of the following: Board of Visitors, 
The University of Wisconsin, Madison (since 2007); Ford Foundation, International Fellowships Program 
(until 2007); UNCF, International Development Partnerships (until 2005); Roth Endowment (since 2002); 
Council for International Educational Exchange (since 2003).     
 
James F. Carlin, Born: 1940  1994  48 
Director and Treasurer, Alpha Analytical Laboratories, Inc. (chemical analysis) (since 1985); Part Owner 
and Treasurer, Lawrence Carlin Insurance Agency, Inc. (since 1995); Part Owner and Vice President, 
Mone Lawrence Carlin Insurance Agency, Inc. (until 2005); Chairman and Chief Executive Officer, 
Carlin Consolidated, Inc. (management/investments) (since 1987); Trustee, Massachusetts Health and 
Education Tax Exempt Trust (1993–2003).     
 
William H. Cunningham,2 Born: 1944  1987  48 
Professor, University of Texas at Austin (since 1971); former Chancellor, University of Texas System and 
former President, University of Texas at Austin (until 2001); Chairman and Chief Executive Officer, IBT 
Technologies (until 2001); Director of the following: Hicks Acquisition Company I, Inc. (since 2007); 
Hire.com (until 2004), STC Broadcasting, Inc. and Sunrise Television Corp. (until 2001), Symtx, Inc. 
(electronic manufacturing) (since 2001), Adorno/Rogers Technology, Inc. (until 2004), Pinnacle Foods 
Corporation (until 2003), rateGenius (until 2003), Lincoln National Corporation (insurance) (since 2006), 
Jefferson-Pilot Corporation (diversified life insurance company) (until 2006), New Century Equity 
Holdings (formerly Billing Concepts) (until 2001), eCertain (until 2001), ClassMap.com (until 2001), Agile 
Ventures (until 2001), AskRed.com (until 2001), Southwest Airlines (since 2000), Introgen (manufacturer 
of biopharmaceuticals) (since 2000) and Viasystems Group, Inc. (electronic manufacturer) (until 
2003); Advisory Director, Interactive Bridge, Inc. (college fundraising) (until 2001); Advisory Director, 
Q Investments (until 2003); Advisory Director, JPMorgan Chase Bank (formerly Texas Commerce 
Bank–Austin), LIN Television (until 2008), WilTel Communications (until 2003) and Hayes Lemmerz 
International, Inc. (diversified automotive parts supply company) (since 2003).   
 
Deborah C. Jackson,2,4 Born: 1952  2008  48 
Chief Executive Officer, American Red Cross of Massachusetts Bay (since 2002); Board of Directors of 
Eastern Bank Corporation (since 2001); Board of Directors of Eastern Bank Charitable Foundation (since 
2001); Board of Directors of American Student Association Corp. (since 1996); Board of Directors of 
Boston Stock Exchange (2002–2008); Board of Directors of Harvard Pilgrim Healthcare (since 2007). 

  Annual report | High Yield Municipal Bond Fund  43 

Independent Trustees (continued)     
 
Name, Year of Birth    Number of John 
Position(s) held with Fund  Trustee  Hancock funds 
Principal occupation(s) and other  of Fund  overseen by 
directorships during past 5 years  since1  Trustee 
 
Charles L. Ladner, Born: 1938  1994  48 
Chairman and Trustee, Dunwoody Village, Inc. (retirement services); Senior Vice President and Chief 
Financial Officer, UGI Corporation (public utility holding company) (retired 1998); Vice President and 
Director, AmeriGas, Inc. (retired 1998); Director, AmeriGas Partners, L.P. (gas distribution) (until 1997); 
Director, EnergyNorth, Inc. (until 1997); Director, Parks and History Association (until 2005). 
 
Stanley Martin,2,4 Born: 1947  2008  48 
Senior Vice President/Audit Executive, Federal Home Loan Mortgage Corporation (2004–2006); 
Executive Vice President/Consultant, HSBC Bank USA (2000–2003); Chief Financial Officer/Executive 
Vice President, Republic New York Corporation and Republic National Bank of New York (1998–2000); 
Partner, KPMG LLP (1971–1998).     
 
Dr. John A. Moore, Born: 1939  2005  48 
President and Chief Executive Officer, Institute for Evaluating Health Risks (nonprofit institution) 
(until 2001); Senior Scientist, Sciences International (health research) (until 2003); Former   
Assistant Administrator and Deputy Administrator, Environmental Protection Agency; Principal, 
Hollyhouse (consulting) (since 2000); Director, CIIT Center for Health Science Research (nonprofit 
research) (until 2007).     
 
Steven R. Pruchansky, Born: 1944  1994  48 
Chairman and Chief Executive Officer, Greenscapes of Southwest Florida, Inc. (since 2000); Director 
and President, Greenscapes of Southwest Florida, Inc. (until 2000); Member, Board of Advisors, First 
American Bank (since 2008); Managing Director, JonJames, LLC (real estate) (since 2000); Director, 
First Signature Bank & Trust Company (until 1991); Director, Mast Realty Trust (until 1994); President, 
Maxwell Building Corp. (until 1991).     
 
Gregory A. Russo,4 Born: 1949  2009  48 
Vice Chairman, Risk & Regulatory Matters, KPMG LLP (KPMG) (2002–2006); Vice Chairman, Industrial 
Markets, KPMG (1998–2002).     

44  High Yield Municipal Bond Fund | Annual report 

Non-Independent Trustees3     
Name, Year of Birth    Number of John 
Position(s) held with Fund  Trustee  Hancock funds 
Principal occupation(s) and other  of Fund  overseen by 
directorships during past 5 years  since1  Trustee 
 
James R. Boyle, Born: 1959  2005  264 
Executive Vice President, Manulife Financial Corporation (since 1999); Director and President, John 
Hancock Variable Life Insurance Company (since 2007); Director and Executive Vice President, John 
Hancock Life Insurance Company (since 2004); Chairman and Director, John Hancock Advisers, LLC (the 
Adviser), John Hancock Funds, LLC (John Hancock Funds) and The Berkeley Financial Group, LLC (The 
Berkeley Group) (holding company) (since 2005); Chairman and Director, John Hancock Investment 
Management Services, LLC (since 2006); Senior Vice President, The Manufacturers Life Insurance 
Company (U.S.A.) (until 2004).     
 
John G. Vrysen,4 Born: 1955  2009  48 
Chief Operating Officer (since 2005)     
Senior Vice President, Manulife Financial Corporation (since 2006); Director, Executive Vice President 
and Chief Operating Officer, the Adviser, The Berkeley Group, John Hancock Investment Management 
Services, LLC and John Hancock Funds, LLC (since 2007); Chief Operating Officer, John Hancock Funds, 
John Hancock Funds II, John Hancock Funds III and John Hancock Trust (since 2007); Director, John 
Hancock Signature Services, Inc. (since 2005); Chief Financial Officer, the Adviser, The Berkeley Group, 
Manulife Financial Corporation Global Investment Management (U.S.), LLC, John Hancock Investment 
Management Services, LLC, John Hancock Funds, LLC, John Hancock Funds, John Hancock Funds II, 
John Hancock Funds III and John Hancock Trust (2005–2007); Vice President, Manulife Financial 
Corporation (until 2006).     
 
Principal officers who are not Trustees     
Name, Year of Birth     
Position(s) held with Fund    Officer 
Principal occupation(s) and other    of Fund 
directorships during past 5 years    since 
 
Keith F. Hartstein, Born: 1956    2005 
President and Chief Executive Officer     
Senior Vice President, Manulife Financial Corporation (since 2004); Director, President and Chief 
Executive Officer, the Adviser, The Berkeley Group and John Hancock Funds, LLC (since 2005); Director, 
MFC Global Investment Management (U.S.), LLC (MFC Global (U.S.)) (since 2005); Chairman and 
Director, John Hancock Signature Services, Inc. (since 2005); Director, President and Chief Executive 
Officer, John Hancock Investment Management Services, LLC (since 2006); President and Chief 
Executive Officer, John Hancock Funds and John Hancock Funds III (since 2005); Director, Chairman 
and President, NM Capital Management, Inc. (since 2005); Member and former Chairman, Investment 
Company Institute Sales Force Marketing Committee (since 2003); President and Chief Executive 
Officer, John Hancock Funds II and John Hancock Trust (2005–July 2009); Director, President and Chief 
Executive Officer, MFC Global (U.S.) (2005–2006); Executive Vice President, John Hancock Funds, 
LLC (until 2005).     

  Annual report | High Yield Municipal Bond Fund  45 

Principal officers who are not Trustees (continued)   
 
Name, Year of Birth   
Position(s) held with Fund  Officer 
Principal occupation(s) and other  of Fund 
directorships during past 5 years  since 
 
Thomas M. Kinzler, Born: 1955  2006 
Secretary and Chief Legal Officer   
Vice President and Counsel, John Hancock Life Insurance Company (U.S.A.) (since 2006); Secretary 
and Chief Legal Officer, John Hancock Funds, John Hancock Funds II and John Hancock Trust (since 
2006); Vice President and Associate General Counsel, Massachusetts Mutual Life Insurance Company 
(1999–2006); Secretary and Chief Legal Counsel, MML Series Investment Fund (2000–2006); Secretary 
and Chief Legal Counsel, MassMutual Institutional Funds (2000–2004); Secretary and Chief Legal   
Counsel, MassMutual Select Funds and MassMutual Premier Funds (2004–2006).   
 
Francis V. Knox, Jr., Born: 1947  2005 
Chief Compliance Officer   
Vice President and Chief Compliance Officer, John Hancock Investment Management Services, LLC, 
the Adviser and MFC Global (U.S.) (since 2005); Chief Compliance Officer, John Hancock Funds, John 
Hancock Funds II, John Hancock Funds III and John Hancock Trust (since 2005); Vice President and 
Assistant Treasurer, Fidelity Group of Funds (until 2004); Vice President and Ethics & Compliance Officer, 
Fidelity Investments (until 2001).   
 
Michael J. Leary, Born: 1965  2007 
Treasurer   
Vice President, John Hancock Life Insurance Company (U.S.A.) and Treasurer for John Hancock Funds, 
John Hancock Funds II, John Hancock Funds III and John Hancock Trust (since May 2009); Assistant 
Treasurer, John Hancock Funds, John Hancock Funds II, John Hancock Funds III and John Hancock   
Trust (2007–2009); Vice President and Director of Fund Administration, JP Morgan (2004–2007); Vice 
President and Senior Manager of Fund Administration, JP Morgan (1993–2004); Manager, Ernst & 
Young, LLC (1988–1993).   
 
Charles A. Rizzo, Born: 1957  2007 
Chief Financial Officer   
Chief Financial Officer, John Hancock Funds, John Hancock Funds II, John Hancock Funds III and John 
Hancock Trust (since 2007); Assistant Treasurer, Goldman Sachs Mutual Fund Complex (registered 
investment companies) (2005–2007); Vice President, Goldman Sachs (2005–2007); Managing Director 
and Treasurer of Scudder Funds, Deutsche Asset Management (2003–2005); Director, Tax and Financial 
Reporting, Deutsche Asset Management (2002–2003); Vice President and Treasurer, Deutsche Global 
Fund Services (1999–2002).   

The business address for all Trustees and Officers is 601 Congress Street, Boston, Massachusetts 02210-2805.

The Statement of Additional Information of the Fund includes additional information about members of the Board of Trustees of the Fund and is available without charge, upon request, by calling 1-800-225-5291.

1 Each Trustee serves until resignation, retirement age or until his or her successor is elected.

2 Member of Audit Committee.

3 Non-Independent Trustees hold positions with the Fund’s investment adviser, underwriter and certain other affiliates.

4 Mr. Martin was appointed by the Board as Trustee on September 8, 2008 and Ms. Jackson was appointed effective October 1, 2008. Mr. Russo and Mr. Vrysen were elected by the shareholders at a special meeting on April 16, 2009.

46  High Yield Municipal Bond Fund | Annual report 

More information

Trustees  Investment adviser 
Patti McGill Peterson, Chairperson  John Hancock Advisers, LLC 
James R. Boyle†   
James F. Carlin  Subadviser 
William H. Cunningham*  MFC Global Investment 
Deborah C. Jackson*    Management (U.S.), LLC 
Charles L. Ladner   
Stanley Martin*  Principal distributor 
Dr. John A. Moore  John Hancock Funds, LLC 
Steven R. Pruchansky   
Gregory A. Russo  Custodian 
John G. Vrysen†  State Street Bank and Trust Company 
*Member of the Audit Committee   
†Non-Independent Trustee  Transfer agent 
  John Hancock Signature Services, Inc.  
Officers   
Keith F. Hartstein  Legal counsel 
President and Chief Executive Officer  K&L Gates LLP  
   
Thomas M. Kinzler  Independent registered 
Secretary and Chief Legal Officer  public accounting firm 
  PricewaterhouseCoopers LLP  
Francis V. Knox, Jr. 
Chief Compliance Officer   
 
Michael J. Leary   
Treasurer   
 
Charles A. Rizzo   
Chief Financial Officer   
 
John G. Vrysen   
Chief Operating Officer   

The Fund’s proxy voting policies and procedures, as well as the Fund’s proxy voting record for the most recent twelve month period ended June 30, are available free of charge on the Securities and Exchange Commission (SEC) Website at sec.gov or on our Website.

The Fund’s complete list of portfolio holdings, for the first and third fiscal quarters, is filed with the SEC on Form N-Q. The Fund’s Form N-Q is available on our Website and the SEC’s Website, www.sec.gov, and can be reviewed and copied (for a fee) at the SEC’s Public Reference Room in Washington, DC. Call 1-800-SEC-0330 to receive information on the operation of the SEC’s Public Reference Room.

We make this information on your fund, as well as monthly portfolio holdings, and other fund details available on our Website www.jhfunds.com or by calling 1-800-225-5291.

You can also contact us:     
1-800-225-5291  Regular mail:  Express mail: 
jhfunds.com  John Hancock Signature Services, Inc.  John Hancock Signature Services, Inc. 
  P.O. Box 9510  Mutual Fund Image Operations 
  Portsmouth, NH 03802-9510  164 Corporate Drive 
    Portsmouth, NH 03801 

  Annual report | High Yield Municipal Bond Fund  47 


1-800-225-5291
1-800-554-6713 TDD
1-800-338-8080 EASI-Line
www.jhfunds.com

Now available: electronic delivery
www.jhfunds.com/edelivery

This report is for the information of the shareholders of John Hancock High Yield Municipal Bond Fund.  5900A 5/09 
It is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus.  7/09 

ITEM 2. CODE OF ETHICS.

As of the end of the period, May 31, 2009, 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.

Stanley Martin is the audit committee financial expert and is “independent”, pursuant to general instructions on Form N-CSR Item 3.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

(a) Audit Fees
The aggregate fees billed for professional services rendered by the principal accountant(s) for the audit of the registrant’s annual financial statements or services that are normally provided by the accountant(s) in connection with statutory and regulatory filings or engagements amounted to $70,304 for the fiscal year ended May 31, 2009 (the funds of the registrant changed the fiscal year end to May 31) (broken out as follows: John Hancock High Yield Municipal Bond Fund -$34,108 and John Hancock Tax-Free Bond Fund - $36,196) and $53,050 for the fiscal year ended August 31, 2008 (broken out as follows: John Hancock High Yield Municipal Bond Fund -$25,450 and John Hancock Tax-Free Bond Fund - $27,600). These fees were billed to the registrant and were approved by the registrant’s audit committee.

(b) Audit-Related Services
There were no audit-related fees during the fiscal year ended May 31, 2009 and fiscal year ended August 31, 2008 billed to the registrant or to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant ("control affiliates").

(c) Tax Fees
The aggregate fees billed for professional services rendered by the principal accountant(s) for the tax compliance, tax advice and tax planning (“tax fees”) amounted to $6,366 for the fiscal year ended May 31, 2009 (broken out as follows: John Hancock High Yield Municipal Bond Fund -$3,054 and John Hancock Tax-Free Bond Fund - $3,312) and $6,700 for the fiscal year ended August 31, 2008 (broken out as follows: John Hancock High Yield Municipal Bond Fund - $3,200 and John Hancock Tax-Free Bond Fund - $3,500). The nature of the services comprising the tax fees was the review of the registrant’s income tax returns and tax distribution requirements. These fees were billed to the registrant and were approved by the registrant’s audit committee. There were no tax fees billed to the control affiliates.

(d) All Other Fees
There were no other fees during the fiscal year ended May 31, 2009 and fiscal year ended August 31, 2008 billed to the registrant or to the control affiliates.

(e)(1) Audit Committee Pre-Approval Policies and Procedures:

The trust’s Audit Committee must pre-approve all audit and non-audit services provided by the independent registered public accounting firm (the “Auditor”) relating to the operations or financial reporting of the funds. Prior to the commencement of any audit or non-audit services to a fund, the Audit Committee reviews the services to determine whether they are appropriate and permissible under applicable law.

The trust’s Audit Committee has adopted policies and procedures to, among other purposes, provide a framework for the Committee’s consideration of audit-related and non-audit services by the Auditor. The policies and procedures require that any audit-related and non-audit service provided by the Auditor and any non-audit service provided by the Auditor to a fund service provider that relates directly to the operations and financial reporting of a fund are subject to approval by the Audit Committee before such service is provided. Audit-related services provided by the Auditor that are expected to exceed $25,000 per instance/per fund are subject to specific pre-approval by the Audit Committee. Tax services provided by the Auditor that are expected to exceed $30,000 per instance/per fund are subject to specific pre-approval by the Audit Committee.

All audit services, as well as the audit-related and non-audit services that are expected to exceed the amounts stated above, must be approved in advance of provision of the service by formal resolution of the Audit Committee. At the regularly scheduled Audit Committee meetings, the Committee reviews a report summarizing the services, including fees, provided by the Auditor.

(e)(2) Services approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X:

Audit-Related Fees, Tax Fees and All Other Fees:

There were no amounts that were approved by the Audit Committee pursuant to the de minimis exception under Rule 2-01 of Regulation S-X.

(f) According to the registrant’s principal accountant, for the fiscal year ended May 31, 2009, the percentage of hours spent on the audit of the registrant's financial statements for the most recent fiscal year that were attributed to work performed by persons who were not full-time, permanent employees of principal accountant was less than 50%.

(g) The aggregate non-audit fees billed by the registrant's accountant(s) for services rendered to the registrant and rendered to the registrant's control affiliates for each of the last two fiscal years of the registrant were $8,872,111 for the fiscal year ended May 31, 2009, and $869,145 for the fiscal year ended August 31, 2008.

(h) The audit committee of the registrant has considered the non-audit services provided by the registrant’s principal accountant(s) to the control affiliates and has determined that the services that were not pre-approved are compatible with maintaining the principal accountant(s)' independence.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

The registrant has a separately-designated standing audit committee comprised of independent trustees. The members of the audit committee are as follows:

Stanley Martin - Chairman
William H. Cunningham
Deborah C. Jackson

ITEM 6. SCHEDULE OF INVESTMENTS.

(a) Not applicable.
(b) 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.

Not applicable.

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) 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 Municipal Securities Trust

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

Date: July 15, 2009

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
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Keith F. Hartstein
President and Chief Executive Officer

Date: July 15, 2009

By: /s/ Charles A. Rizzo
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Charles A. Rizzo
Chief Financial Officer

Date: July 15, 2009