0000045288 jhnbx-20081002:S000000646 2008-10-02 0000045288 jhnbx-20081002:C000001854 2008-10-02 0000045288 jhnbx-20081002:C000001855 2008-10-02 0000045288 jhnbx-20081002:C000001856 2008-10-02 0000045288 jhnbx-20081002:C000001857 2008-10-02 0000045288 ici-rr:Registrant_item 2008-10-02 0000045288 jhnbx-20081002:C000001858 2008-10-02 xbrli:pure iso4217:USD
Goal and strategy To seek a high level of current income consistent with prudent investment risk. Under normal market conditions, the fund invests at least 80% of its assets in a diversified portfolio of bonds. These may include, but are not limited to, corporate bonds and debentures, as well as U.S. government and agency securities. Most of these securities are investment grade, although the fund may invest up to 25% of assets in high-yield bonds rated as low as CC/Ca and their unrated equivalents. There is no limit on the fund's average maturity. In managing the fund's portfolio, the subadviser concentrates on sector allocation, industry allocation and securities selection: deciding which types of bonds and industries to emphasize at a given time, and then which individual bonds to buy. When making sector and industry allocations, the subadviser tries to anticipate shifts in the business cycle, using top-down analysis to determine which sectors and industries may benefit over the next 12 months. In choosing individual securities, the subadviser uses bottom-up research to find securities that appear comparatively undervalued. The subadviser looks at bonds of all quality levels and maturities from many different issuers, potentially including foreign governments and corporations denominated in U.S. dollars or foreign currencies. The fund will not invest more than 10% of its total assets in securities denominated in foreign currencies. The fund intends to keep its exposure to interest rate movements generally in line with those of its peers. The fund may invest in mortgage-related securities and certain other derivatives (investments whose value is based on indexes, securities or currencies). The fund's investments in U.S. government and agency securities may or may not be supported by the full faith and credit of the United States. Under normal circumstances, the fund may not invest more than 10% of assets in cash or cash equivalents. In abnormal circumstances, the fund may temporarily invest extensively in investment-grade short-term securities. In these and other cases, the fund might not achieve its goal. The fund may trade securities actively, which could increase its transaction costs (thus lowering performance) and increase your taxable distributions. Main risks An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund's shares will go up and down in price, meaning that you could lose money by investing in the fund. Many factors influence a mutual fund's performance. The fund's main risk factors are listed below. Before investing, be sure to read the additional descriptions of these risks beginning on page 4. Active management risk The fund teams investment strategy may fail to produce the intended result. Credit and counterparty risk The issuer or guarantor of a fixed income security, the counterparty to an over-the-counter derivatives contract, or a borrower of a funds securities, will be unable or unwilling to make timely principal, interest or settlement payments, or otherwise to honor its obligations. U.S. government securities are subject to varying degrees of credit risk depending upon the nature of their support. Fixed-income securities risk A rise in interest rates typically causes bond prices to fall. The longer the average maturity of the bonds held by the fund, the more sensitive the fund is likely to be to interest rate changes. There is the possibility that the issuer of the security will not repay all or a portion of the principal borrowed and will not make all interest payments. Lower-rated fixed-income securities and high-yield securities involve a higher degree of risk than fixed-income securities in higher-rated categories. Foreign securities risk As compared to U.S. companies, there may be less publicly available information relating to foreign companies. Foreign securities may be subject to foreign taxes. The value of foreign securities is subject to currency fluctuations and adverse political and economic developments. Hedging, derivatives and other strategic transactions risk investing in derivatives can magnify losses incurred by the underlying assets. Mortgage-backed and asset-backed securities risk Different types of mortgage-backed securities and asset-backed securities are subject to different combinations of prepayment, extension, interest rate and/or other market risks. t t Past performance They are shown only for Class I and would be different for other classes. How the fund's returns vary from year to year can give an idea of its risk; however, as always, past performance (before and after taxes) does not indicate future results. All figures assume dividend reinvestment. t Calendar year total returns ? Class I (%) 1 1998 0.0794 1999 0.0097 2000 0.1085 2001 0.0761 2002 0.0783 2003 0.0808 2004 0.0503 2005 0.0278 2006 0.0491 2007 0.0534 1 November 9, 1973 is the inception date for the Class A shares. Class I shares were first offered on September 4, 2001; the returns prior to this date are those of Class A shares that have been recalculated to apply the fees and expenses of Class I shares. Year to Date 0.0129 2008-06-30 Highest Quarter 0.0414 2000-12-31 Lowest Quarter 0.0244 2004-06-30 Average annual total returns Average annual total returns (%) 1 Average Annual Return 0.0534 0.0522 0.0589 2007-12-31 Average Annual Return After Taxes on Distributions 2 0.0325 0.0325 0.036 2007-12-31 Average Annual Return After Taxes on Distributions and Sales 2 0.0344 0.033 0.0362 2007-12-31 Lehman Brothers Government/Credit Bond Index 3 0.0723 0.0444 0.0601 1 November 9, 1973 is the inception date for the Class A shares. Class I shares were first offered on September 4, 2001; the returns prior to this date are those of Class A shares that have been recalculated to apply the fees and expenses of Class I shares. 2 After-tax returns These are shown only for Class I and would be different for other classes. They reflect the highest individual federal marginal income tax rates in effect at the time and do not reflect any state or local taxes. Your actual after-tax returns may be different. After-tax returns are not relevant to shares held in an IRA, 401(k) or other tax-advantaged investment plan. 3 Lehman Brothers Government/Credit Bond Index is an unmanaged index of U.S.government, U.S. corporate and Yankee bonds. Average annual total returns (%) Average Annual Return 0.0081 0.037 0.0486 1998-10-01 1998-10-01 1998-10-01 Lehman Brothers Government/Credit Bond Index 2 0.0723 0.0444 0.0601 0.0543 2 Lehman Brothers Government/Credit BondIndex is an unmanaged index of U.S.government, U.S. corporate and Yankee bonds. Average annual total returns (%) Average Annual Return 0.0317 0.0403 0.0431 1998-10-01 1998-10-01 1998-10-01 Lehman Brothers Government/Credit Bond Index 2 0.0723 0.0444 0.0601 0.0543 2 Lehman Brothers Government/Credit BondIndex is an unmanaged index of U.S.government, U.S. corporate and Yankee bonds. Past performance These do not include sales charges and would have been lower if they did. They are shown only for Class A and would be different for other classes. How the fund's returns vary from year to year can give an idea of its risk; however, as always, past performance (before and after taxes) does not indicate future results. All figures assume dividend reinvestment. t Calendar year total returns ? Class A (%) 1998 0.075 1999 0.0136 2000 0.1039 2001 0.0712 2002 0.0736 2003 0.0762 2004 0.0453 2005 0.0238 2006 0.0445 2007 0.049 Year to Date 0.015 2008-06-30 Highest Quarter 0.0403 2000-12-31 Lowest Quarter 0.0256 2004-06-30 Average annual total returns These include sales charges. Performance of broad-based market indexes is included for comparison. Indexes have no sales charges and you cannot invest in them directly. All figures assume dividend reinvestment. Average annual total returns (%) 1 Average Annual Return 0.0017 0.038 0.0496 1998-10-01 Average Annual Return After Taxes on Distributions 0.0167 0.0201 0.0278 1998-10-01 Average Annual Return After Taxes on Distributions and Sales 0.0008 0.0218 0.0287 1998-10-01 Lehman Brothers Government/Credit Bond Index 2 0.0723 0.0444 0.0601 0.0543 1 After-tax returns These are shown only for Class A and would be different for other classes. They reflect the highest individual federal marginal income tax rates in effect at the time and do not reflect any state or local taxes. Your actual after-tax returns may be different. After-tax returns are not relevant to shares held in an IRA, 401(k) or other tax-advantaged investment plan. 2 Lehman Brothers Government/Credit BondIndex is an unmanaged index of U.S.government, U.S. corporate and Yankee bonds. Past performance They are shown only for Class R1 and would be different for other classes. How the fund's returns vary from year to year can give an idea of its risk; however, as always, past performance (before and after taxes) does not indicate future results. All figures assume dividend reinvestment. t Calendar year total returns ? Class R1 (%) 1 1998 0.0699 1999 0.0185 2000 0.0987 2001 0.0664 2002 0.0687 2003 0.0719 2004 0.0437 2005 0.021 2006 0.0368 2007 0.039 1 November 9, 1973 is the inception date for the Class A shares. Class I shares were first offered on September 4, 2001; the returns prior to this date are those of Class A shares that have been recalculated to apply the fees and expenses of Class I shares. Year to Date 0.0119 2008-06-30 Highest Quarter 0.0391 2000-12-31 Lowest Quarter 0.0262 2004-06-30 Average annual total returns 1 Average annual total returns (%) Average Annual Return 0.039 0.0424 0.0493 2007-12-31 Average Annual Return After Taxes on Distributions 0.0233 0.026 0.0284 2007-12-31 Average Annual Return After Taxes on Distributions and Sales 0.0251 0.0266 0.0291 2007-12-31 Lehman Brothers Government/Credit Bond Index 0.0723 0.0444 0.0601 1 After-tax returnsThese are shown only for Class R1 and would be different for other classes. They reflect the highest individual federal marginal income tax rates in effect at the time and do not reflect any state or local taxes. Your actual after-tax returns may be different. After-tax returns are not relevant to shares held in an IRA, 401(k) or other tax advantaged investment plan. 2 Lehman Brothers Government/Credit BondIndex is an unmanaged index of U.S.government, U.S. corporate and Yankee bonds. Investor costs Maximum Cumulative Sales Charge / Offering Price Maximum Deferred Sales Charge / Offering Price Annual operating expenses (%) 1 Management fee 0.005 Distribution and service (12b-1) fees 0.005 Service plan fee 2 0.0009 Other expenses 0.0025 Total fund operating expenses 0.0134 1 These are paid from fund assets; shareholders, therefore, pay these costs indirectly. 2 Under the service plan, the fund may pay a fee of up to 0.25% for certain other services to retirement plans or participants. Service plan fees shown are actual fees paid for the previous fiscal year. Expense example A hypothetical example showing the expenses on a $10,000 investment during the various time frames indicated. The example assumes a 5% average annual return and the reinvestment of all dividends. The example is for comparison only and does not reflect actual expenses and returns, either past or future. Expenses ($) 1 Year 136 3 Years 425 5 Years 734 10 Years 1613 Shareholder transaction expenses (%) 1 Maximum front-end sales charge (load) on purchases as a % of purchase price 0 Maximum deferred sales charge (load) as a % of purchase or sale price, whichever is less 0.05 1 A $4.00 fee will be charged for wire redemptions. Annual operating expenses (%) 1 Management fee 0.005 Distribution and service (12b-1) fees 0.01 Distribution or Similar Non 12b-1 Fees / Assets Other expenses 3 0.0026 Total fund operating expenses 3 0.0176 3 The fund receives credits from its transfer agent as a result of uninvested cash balances; these credits (which may differ from class to class depending on the number and size of shareholder accounts in the class) are used to reduce a portion of the funds transfer agent fees. Such fee reduction is not reflected in the table. Had this fee reduction been taken into account, total fund operating expenses would have been 1.75% for Class B. 1 These are paid from fund assets; shareholders, therefore, pay these costs indirectly. Expense example A hypothetical example showing the expenses on a $10,000 investment during the various time frames indicated. The example assumes a 5% average annual return and the reinvestment of all dividends. The example is for comparison only and does not reflect actual expenses and returns, either past or future. Expenses ($) 1 Year 679 3 Years 854 5 Years 1154 10 Years 4 1886 1 Year 179 3 Years 554 5 Years 954 10 Years 4 1886 4 Reflects conversion of Class B shares to Class A shares after eight years. 4 Reflects conversion of Class B shares to Class A shares after eight years. Shareholder transaction expenses (%) 1 Maximum front-end sales charge (load) on purchases as a % of purchase price 0 Maximum deferred sales charge (load) as a % of purchases or sale price, whichever is less 0.01 1 A $4.00 fee will be charged for wire redemptions. Annual operating expenses (%) 1 Management fee 0.005 Distribution and service (12b-1) fees 0.01 Distribution or Similar Non 12b-1 Fees / Assets Other expenses 0.0025 Total fund operating expenses 0.0175 1 These are paid from fund assets; shareholders, therefore, pay these costs indirectly. Expense example A hypothetical example showing the expenses on a $10,000 investment during the various time frames indicated. The example assumes a 5% average annual return and the reinvestment of all dividends. The example is for comparison only and does not reflect actual expenses and returns, either past or future. Expenses ($) 1 Year 278 3 Years 551 5 Years 949 10 Years 2062 1 Year 178 3 Years 551 5 Years 949 10 Years 2062 Investor costs These are paid from fund assets; shareholders, therefore, pay these costs indirectly. Shareholder transaction expenses1 (%) 1 Maximum front-end sales charge (load) on purchases as a % of purchase price 0.045 Maximum deferred sales charge (load) as a % of purchase or sale price, whichever is less 2 0 1 A $4.00 fee will be charged for wire redemptions. 2 Except for investments of $1 million or more; see "How sales charges are calculated." Annual operating expenses (%) 1 Management fee 0.005 Distribution and service (12b-1) fees 0.003 Distribution or Similar Non 12b-1 Fees / Assets Other expenses 0.0025 Total fund operating expenses 0.0105 1 These are paid from fund assets; shareholders, therefore, pay these costs indirectly. Expense example A hypothetical example showing the expenses on a $10,000 investment during the various time frames indicated. The example assumes a 5% average annual return and the reinvestment of all dividends. The example is for comparison only and does not reflect actual expenses and returns, either past or future. Expenses ($) 1 Year 552 3 Years 769 5 Years 1003 10 Years 1675 Investor costs Maximum Cumulative Sales Charge / Offering Price Maximum Deferred Sales Charge / Offering Price Annual operating expenses (%) 1 Management fee 0.005 Distribution and service (12b-1) fees Distribution or Similar Non 12b-1 Fees / Assets Other expenses 0.0012 Total fund operating expenses 0.0062 1 These are paid from fund assets; shareholders, therefore, pay these costs indirectly. Expense example A hypothetical example showing the expenses on a $10,000 investment during the various time frames indicated. The example assumes a 5% average annual return and the reinvestment of all dividends. The example is for comparison only and does not reflect actual expenses and returns, either past or future. Expenses ($) 1 Year 63 3 Years 199 5 Years 346 10 Years 774 2008-10-02 2008-10-02 The purpose of submitting the tagged exhibit is to test the related format and technology and, as a result, investors should not rely on this exhibit in making investment decisions.