[Front Cover]
[MFS logo]
[Photo of train tracks]
Annual Report for
Year Ended
September 30, 1995
MFS(R) Total Return Fund
<PAGE>
[Back Cover]
MFS(R) Total
Return Fund
500 Boylston Street
Boston, MA 02116
[MFS logo--25th anniversary medallion]
Bulk Rate
U.S. Postage
P A I D
Permit #55638
Boston, MA
MTR-2 11/95 285M 15/215/315
<PAGE>
MFS(R) TOTAL RETURN FUND
Trustees
A. Keith Brodkin* - Chairman and President
Richard B. Bailey* - Private Investor;
Former Chairman and Director
(until 1991), Massachusetts Financial
Services Company
Peter G. Harwood - Private Investor
J. Atwood Ives - Chairman and Chief
Executive Officer, Eastern
Enterprises
Lawrence T. Perera - Partner,
Hemenway & Barnes
William J. Poorvu - Adjunct Professor,
Harvard University Graduate School of
Business Administration
Charles W. Schmidt - Private Investor
Arnold D. Scott* - Senior Executive Vice
President, Director and Secretary,
Massachusetts Financial Services Company
Jeffrey L. Shames* - President and Director,
Massachusetts Financial Services Company
Elaine R. Smith - Independent Consultant
David B. Stone - Chairman, North
American Management Corp.
(investment adviser)
Investment Adviser
Massachusetts Financial Services Company
500 Boylston Street
Boston, MA 02116-3741
Distributor
MFS Fund Distributors, Inc.
500 Boylston Street
Boston, MA 02116-3741
Investor Service
MFS Service Center, Inc.
P.O. Box 2281
Boston, MA 02107-9906
Head of the Portfolio Team
David M. Calabro*
Treasurer
W. Thomas London*
Assistant Treasurer
James O. Yost*
Secretary
Stephen E. Cavan*
Assistant Secretary
James R. Bordewick, Jr.*
Custodian
Investors Bank & Trust Company
Auditors
Deloitte & Touche llp
-----------------------------------------------------------------------------
[BOXED TEXT]
[(NUMBER 1 DALBAR) LOGO]
For the second year in a row,
MFS earned a #1 ranking in
DALBAR, Inc.'s Broker/
Dealer Survey, Main Office
Operations Service Quality
category. The firm achieved a
3.49 overall score--on a scale of 1 to 4--in
the 1995 survey. A total of 71 firms respond-
ed, offering input on the quality of service
they receive from 36 mutual fund companies
nationwide. The survey contained questions
about service quality in 17 categories, including
"knowledge of phone service contacts,"
"accuracy of transaction processing," and
"overall ease of doing business with the firm."
(Source: 1995 DALBAR Survey)
-----------------------------------------------------------------------------
*Affiliated with the Investment Adviser
<PAGE>
Letter to Shareholders
Dear Shareholders:
As has been the case for several quarters, we are managing the Fund in a
conservative manner due to high stock market valuations. As of September 30,
1995, 8% of the Fund's assets was invested in cash and cash equivalents, 47%
in common stocks, 9% in convertibles, and 36% in bonds. This compares to
October 1, 1994, when 21% was invested in cash and cash equivalents. Early in
1995, we reduced the cash position and increased the weighting in bonds.
Throughout the year, we continued to increase the bond weighting,
concentrating on longer-term corporate issues. This allowed us to increase
the monthly dividend throughout the year. For the year ended September 30,
1995, Class A shares provided a total return of +18.36%, Class B shares
+17.46% and Class C shares +17.66%. All these returns assume the reinvestment
of distributions but exclude the effects of any sales charges. A discussion
of our strategy for the Fund may be found in the Portfolio Performance and
Strategy section of this letter.
Economic Outlook
Moderate, but sustainable growth appears to be the hallmark of the economic
expansion's fifth year. After slowing earlier in the summer, consumer
spending and homebuying were making modest gains by September 30, although
consumer spending was still showing areas of weakness. Businesses, meanwhile,
continued to work off excess inventories and reduce factory output. At the
same time, overseas economies, particularly those of Germany and Japan, have
not recovered as expected, limiting U.S. export growth. However, we believe
the Federal Reserve Board's consistent and, so far, successful efforts to
fight inflation seem to be giving consumers and businesses enough confidence
to help maintain 2-1/2% to 3% real (adjusted for inflation) growth in gross
domestic product, at least through 1995.
Interest Rates
Although the Federal Reserve implemented a one-quarter percentage point
decrease in short-term interest rates in July, the effects of its seven rate
increases, which began in early 1994 and ended in February of this year, are
still being felt throughout the economy. While there have been some increases
in commodity prices, companies have not been able to pass along most of those
higher costs. This was partly due to the need to keep fighting for market
share, and also because wages and benefits of U.S. workers are still growing
at a pace that is near or perhaps below the inflation rate, limiting consumer
buying power. At the end of July, the nation's employment cost index had
risen at a rate of just 2.8% over the previous year, helping to contain cost
pressures. At the same time, the bond markets have apparently become
convinced that
1
<PAGE>
Letter to Shareholders - continued
economic growth will be contained for the near future, allowing long-term
interest rates to decline slightly. Although previous monetary easing by the
Federal Reserve has been followed by additional rate reductions, prospects
for further decreases in the current environment are uncertain. Still, with
long-term government bonds yielding approximately 6.5%, in an environment of
2-1/2% to 3% inflation, real rates of return in the fixed-income markets
remain relatively attractive.
Stock Market
After a nearly 30% increase through most of 1995 in the Standard & Poor's 500
Composite Index (the S&P 500), a popular, unmanaged index of common stock
performance, the stock market became somewhat volatile in the last few weeks
before September 30 due to concerns about slow earnings growth for corporate
America. Most of this volatility took place in technology and cyclical
stocks. While we see a deceleration of corporate earnings growth as the
inevitable consequence of traditional business cycles, we remain encouraged
by the high absolute level of profitability among U.S. companies. Also,
companies' increasing emphasis on cost-containment, coupled with their
growing use of technology, have helped keep them competitive and reasonably
profitable. Finally, we have been watching with interest the recent series of
corporate mergers in such industries as banking, entertainment, health care
and consumer products. Unlike previous merger waves, which were often
intended to build conglomerates of loosely related or unrelated businesses,
this year's mergers of similar companies seem to be more rationally based on
the goals of helping the merged companies reduce costs and, in general, be
more competitive. Looking ahead, we believe these factors, along with a
stabilizing interest rate environment and a continuation of favorable
earnings reports, will help maintain the stock market's long-term positive
momentum.
Portfolio Performance and Strategy
Following a soft 1994, the stock market has rocketed ahead in 1995. U.S.
companies increased profits by 20% or more and stock prices followed. In
addition, low inflation and falling interest rates added to the
attractiveness of financial services assets. The Fund continues to seek good
values in the energy, financial services and telecommunications sectors. We
have reduced our technology weighting and continue to be cautious in the more
economically sensitive sectors.
Our equity weighting continues to be somewhat below normal. While we
believe corporate profits will likely remain at high absolute levels, the
rate of earnings growth is clearly decelerating. Meanwhile, valuations are
still above historical levels and the dividend yield on the S&P 500 is just
2.5%.
2
<PAGE>
Letter to Shareholders - continued
While the overall market will inevitably pause and correct at some point, we
remain quite positive on the long-term outlook for equities. We will use any
correction to increase our equity positions.
Over the past six months, our major changes in the portfolio were to
increase the bond weighting from 31% to 36% and increase the equity position
from 44% to 47%. Bonds continue to look attractive due to the weakening
economy and our generally positive outlook for inflation. Our high weighting
in bonds allowed us to increase the dividend significantly during 1995. While
the Fund's average monthly dividend was $0.045 per share for the year ended
September 30, 1994, for the year ended September 30, 1995, the average
monthly dividend stood at $0.051 per share.
We appreciate your support and welcome any questions or comments you may
have.
Respectfully,
/s/ A. Keith Brodkin
- ------------------------------------
A. Keith Brodkin
Chairman and President
October 12, 1995
/s/ David Calabro
- ------------------------------------
David Calabro
(on behalf of the
MFS Total Return Team)
Portfolio Managers' Profiles
David Calabro, Vice President; Geoffrey L. Kurinsky, Senior Vice President;
Judith N. Lamb, Vice President; Lisa B. Nurme, Vice President; and Maura A.
Shaughnessy, Vice President, are the Fund's portfolio managers. Mr. Calabro
is the head of this portfolio management team and a manager of the common
stock portion of the Fund's portfolio. Mr. Calabro has been employed by MFS
since 1992. Mr. Kurinsky, the manager of the Fund's fixed-income securities,
has been employed by MFS since 1987. Ms. Lamb, the manager of the Fund's
convertible securities, has been employed by MFS since 1992. Ms. Nurme, a
manager of the common stock portion of the Fund's portfolio, has been
employed by MFS since 1987. Ms. Shaughnessy, also a manager of the common
stock portion of the Fund's portfolio, has been employed by MFS since 1991.
3
<PAGE>
Tax Form Summary
In January 1996, shareholders will be mailed a Tax Form Summary reporting the
federal tax status of all distributions paid during the calendar year 1995.
For the year ended September 30, 1995, the amount of distributions from
income eligible for the 70% dividends-received deduction for corporations
came to 39%.
Federal Income Tax Information on Distributions
For the year ended September 30, 1995, distributions from long-term capital
gains were $2,145,562.
Performance
The information below and on the following page illustrates the historical
performance of MFS Total Return Fund Class A shares in comparison to various
market indicators. Class A results reflect the deduction of the 4.75% maximum
sales charge. Benchmark comparisons are unmanaged and do not reflect any fees
or expenses. You cannot invest in an index. All results reflect the
reinvestment of all dividends and capital gains.
Class B shares were offered effective August 23, 1993. Information on Class B
share performance appears on the next page.
Class C shares were offered effective August 1, 1994. Information on Class C
share performance appears on the next page.
-----------------------------------------------------------------------------
Growth of a Hypothetical $10,000 Investment
(For the 5-Year Period Ended September 30, 1995)
[Line graph representing the growth of a $10,000 investment for the five-year
period ended September 30, 1995. The graph is scaled from $5,000 to $30,000 in
$5,000 segments. The years are marked in 12-month segments from 1990 to 1995.
There are four lines drawn to scale. One is a solid line representing MFS Total
Return Fund (Class A), a second line of short dashes represents the S&P 500, a
third line of very-short dashes represents the Lehman Brothers Gov't/Corporate
Bond Index, and a fourth line of medium-short dashes represents the Consumer
Price Index.]
MFS Total Return Fund (Class A) $18,112
S&P 500 $22,115
Lehman Brothers Gov't/Corporate Bond Index $16,026
Consumer Price Index $11,545
-----------------------------------------------------------------------------
4
<PAGE>
- -----------------------------------------------------------------------------
Growth of a Hypothetical $10,000 Investment
(For the 10-Year Period Ended September 30, 1995)
[Line graph representing the growth of a $10,000 investment for the ten-year
period ended September 30, 1995. The graph is scaled from $0 to $5,000 in
$10,000 segments. The years are marked in 12-month segments from 1985 to 1995.
There are four lines drawn to scale. One is a solid line representing MFS Total
Return Fund (Class A), a second line of short dashes represents the S&P 500, a
third line of very-short dashes represents the Lehman Brothers Gov't/Corporate
Bond Index, and a fourth line of medium-short dashes represents the Consumer
Price Index.]
MFS Total Return Fund (Class A) $33,552
S&P 500 $44,171
Lehman Brothers Gov't/Corporate Bond Index $25,819
Consumer Price Index $14,143
-----------------------------------------------------------------------------
Average Annual Total Returns
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MFS Total Return Fund (Class A) including 4.75%
sales charge +12.72% +9.68% +12.61% +12.87%
-------------------------------------------------------------------------------------------------
MFS Total Return Fund (Class A) at net asset
value +18.36% +11.47% +13.71% +13.42%
-------------------------------------------------------------------------------------------------
MFS Total Return Fund (Class B) with CDSC* +13.46% -- -- +6.45%+
-------------------------------------------------------------------------------------------------
MFS Total Return Fund (Class B) without CDSC +17.46% -- -- +7.77%+
-------------------------------------------------------------------------------------------------
MFS Total Return Fund (Class C) +17.66% -- -- +14.58%#
-------------------------------------------------------------------------------------------------
Average balanced fund +19.04% +10.75% +13.63% +12.30%
-------------------------------------------------------------------------------------------------
Lehman Brothers Government Corporate Bond Index +14.35% +6.90% +9.89% +9.95%
-------------------------------------------------------------------------------------------------
Standard & Poor's 500 Composite Index +29.71% +14.96% +17.20% +16.01%
-------------------------------------------------------------------------------------------------
Consumer Price IndexS. +2.54% +2.73% +2.91% +3.53%
=================================================================================================
</TABLE>
*These returns reflect the current maximum Class B contingent deferred sales
charge (CDSC) of 4%.
+For the period from the commencement of offering of Class B shares, August
23, 1993 to September 30, 1995.
#For the period from the commencement of offering of Class C shares, August
1, 1994 to September 30, 1995.
Class C shares have no initial sales charge or CDSC but, along with Class B
shares, have higher annual fees and expenses than Class A shares.
S.The Consumer Price Index is a popular measure of change in prices.
++The Lehman Index is an unmanaged, market-value weighted index of U.S.
Treasury and government agency securities (excluding mortgage-backed
securities) and investment-grade debt obligations of domestic corporations.
5
<PAGE>
Average Annual Total Returns - continued
In the table on the previous page, we have included the average annual total
returns of all balanced funds (including the Fund) tracked by Lipper
Analytical Services, Inc. (an independent firm which rates mutual fund
performance) for the applicable time periods (190, 84, 59 and 30 funds for
the 1-, 3-, 5- and 10-year periods ended September 30, 1995, respectively).
Because these returns do not reflect any applicable sales charges, we have
also included the Fund's results at net asset value (no sales charge) for
comparison.
All results are historical and, therefore, are not an indication of future
results. The principal value and income return of an investment in a mutual
fund will vary with changes in market conditions, and shares, when redeemed,
may be worth more or less than their original cost. All Class A results
reflect the applicable expense subsidy which is explained in the Notes to
Financial Statements. Had the subsidy not been in effect, the results would
have been less favorable.
Objectives and Policies
The Fund's primary objective is to provide above-average current income
(compared to a portfolio entirely invested in equity securities) consistent
with prudent employment of capital. As a secondary objective, the Fund seeks
opportunities for growth of capital and income because many securities that
offer a better-than-average yield may possess growth potential.
The Fund's investment policies are to vary its investments in types of
securities in accordance with its interpretation of economic and money market
conditions, fiscal and monetary policies and underlying security values.
Generally, at least 40% of the Fund's assets is invested in equity
securities. The Fund's debt securities may include non-investment-grade
bonds. The Fund may also invest in foreign securities.
6
<PAGE>
Portfolio of Investments - September 30, 1995
Non-Convertible Bonds - 35.2%
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Banks and Credit Companies - 1.9%
ABN Amro Global, 7.25s, 2005 $ 11,500 $11,821,655
Banco Central, 8.25s, 2004 2,260 2,379,238
Banco Central, 7.5s, 2005 5,000 5,011,000
Banponce Financial Corp., 7.72s, 2000 1,500 1,549,395
Capital One Bank, 8.125s, 2000 2,605 2,736,135
Chase Manhattan Corp., 8.8s, 2000 5,440 5,613,808
Coastal Bancorp, Inc., 10s, 2002 1,380 1,352,400
Den Danske Bank, 7.25s, 2005## 5,000 5,022,350
First USA Corp., 7.65s, 2003 12,790 12,856,764
Riggs National Corp., 8.5s, 2006 11,350 11,860,750
Sovereign Bancorp, Inc., 6.75s, 2000 2,590 2,518,775
--------------
$62,722,270
- ---------------------------------------------------------------------------------------------------
Corporate Asset Backed - 1.5%
Chase Manhattan Credit Card Master Trust, Floating
Rate, 2001 $ 30,000 $30,000,000
Merrill Lynch Home Equity Loan, 91-1, "B", 9.3s, 2016+ 3,800 3,923,500
Merrill Lynch Mortgage Investors, Inc., 9.7s, 2010 482 495,193
Merrill Lynch Mortgage Investors, Inc., 8.9s, 2011 2,319 2,468,171
Merrill Lynch Mortgage Investors, Inc., 9s, 2011 997 1,028,802
Merrill Lynch Mortgage Investors, Inc., 9.25s, 2011 363 374,428
Merrill Lynch Mortgage Investors, Inc., 8.227s, 2021+ 4,000 3,024,640
Standard Credit Card Master Trust, Floating Rate, 2000 6,140 6,145,710
--------------
$47,460,444
- ---------------------------------------------------------------------------------------------------
Financial Institutions - 1.8%
Alex Brown, Inc., 7.625s, 2005 $ 6,640 $ 6,782,030
General Motors Acceptance Corp., 7.4s, 2025 9,500 9,454,210
Goldman Sachs Group, 7.25s, 2005 2,530 2,542,650
K Mart Funding Corp., 8.8s, 2010 5,550 5,950,765
Lehman Brothers Holdings, Inc., 7.375s, 2007 5,500 5,625,895
Lehman Brothers, Inc., 7.125s, 2002 5,250 5,243,438
Leucadia National Corp., 8.25s, 2005 1,000 1,003,400
Navistar Financial Corp., 9.5s, 1996 4,935 5,009,025
Phoenix Re Corp., 9.75s, 2003 1,000 1,040,000
RHG Finance Corp., 8.875s, 2005 5,000 4,995,050
Salton Sea Funding Corp., 7.37s, 2005## 5,250 5,267,850
Salton Sea Funding Corp., 7.84s, 2010## 5,250 5,248,215
--------------
$58,162,528
- ---------------------------------------------------------------------------------------------------
Foreign - U.S. Dollar Denominated - 2.2%
Banco Santander S.A., 7.875s, 2005 $ 6,000 $ 6,325,020
Financiera Energetica Nacional S.A., 6.625s, 1996## 5,360 5,319,800
Hanson Overseas, 6.75s, 2005 7,715 7,698,035
Hidroelectrica Alicura, 8.375s, 1999## 6,244 5,619,600
Korea Electric Power Corp., 7.75s, 2013 20,675 21,037,640
Ocensa, 9.35s, 2005## 3,500 3,517,500
Petronas Malaysia, 6.875s, 2003## 1,000 1,002,080
</TABLE>
7
<PAGE>
Portfolio of Investments - continued
Non-Convertible Bonds - continued
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Foreign - U.S. Dollar Denominated - continued
Province of Ontario, 7s, 2005 $ 7,880 $ 8,027,758
Province of Quebec, 8.8s, 2003 3,500 3,890,705
Province of Saskatchewan, 9.375s, 2020 500 615,135
Republic of Argentina, Floating Rate, 2023 1,000 573,750
Republic of Argentina, 5s, 2023 2,000 960,000
Republic of Colombia, 8.75s, 1999 3,640 3,776,500
Republic of Greece, 9.75s, 1999 3,070 3,330,612
--------------
$71,694,135
- ---------------------------------------------------------------------------------------------------
Industrials - 11.5%
Building - 0.2%
American Standard, Inc., 0s to 1998, 10.5s to 2005 $ 1,750 $ 1,421,875
Black & Decker Corp., 8.44s, 1999 1,690 1,785,823
Nortek, Inc., 9.875s, 2004 500 453,750
Owens Corning Fiberglass Corp., 8.875s, 2002 1,390 1,510,291
Owens Corning Fiberglass Corp., 9.9s, 2015## 2,500 2,757,092
USG Corp., 9.25s, 2001 250 264,375
--------------
$ 8,193,206
- ---------------------------------------------------------------------------------------------------
Chemicals - 0.1%
Koppers Industries, Inc., 8.5s, 2004 $ 2,000 $ 1,865,000
NL Industries, Inc., 11.75s, 2003 750 791,250
--------------
$ 2,656,250
- ---------------------------------------------------------------------------------------------------
Consumer Goods and Services - 0.1%
ADT Operations, Inc., 9.25s, 2003 $ 1,000 $ 1,042,500
Sealy Corp., 9.5s, 2003 1,000 990,000
Westpoint Stevens, Inc., 9.375s, 2005 2,000 1,945,000
--------------
$ 3,977,500
- ---------------------------------------------------------------------------------------------------
Containers - 0.3%
Container Corp. of America, 10.75s, 2002 $ 750 $ 789,375
Container Corp. of America, 9.75s, 2003 250 251,250
Owens-Illinois, Inc., 9.75s, 2004 4,500 4,612,500
Stone Container Corp., 9.875s, 2001 1,900 1,876,250
Stone Container Corp., 10.75s, 2002 2,100 2,178,750
--------------
$ 9,708,125
- ---------------------------------------------------------------------------------------------------
Entertainment - 0.9%
Time Warner, Inc., 7.75s, 2005 $ 4,382 $ 4,406,276
Time Warner, Inc., 9.125s, 2013 15,000 16,280,550
Time Warner, Inc., 9.15s, 2023 8,000 8,680,880
--------------
$29,367,706
- ---------------------------------------------------------------------------------------------------
Food and Beverage Products - 1.4%
Borden, Inc., 9.875s, 1997 $ 4,500 $ 4,744,485
Borden, Inc., 9.2s, 2021 7,900 8,599,703
Borden, Inc., 7.875s, 2023 3,500 3,330,670
Canandaigua Wine, Inc., 8.75s, 2003 2,700 2,673,000
Coca-Cola Bottling Group Southwest, Inc., 9s, 2003 1,000 990,000
</TABLE>
8
<PAGE>
Portfolio of Investments - continued
Non-Convertible Bonds - continued
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Industrials - continued
Food and Beverage Products - continued
Nabisco, Inc., 7.55s, 2015 $ 9,160 $ 9,114,566
RJR Nabisco, Inc., 8s, 2000 2,500 2,533,700
RJR Nabisco, Inc., 8.75s, 2005 4,255 4,292,359
RJR Nabisco, Inc., 8.75s, 2007 10,000 9,958,000
--------------
$46,236,483
- ---------------------------------------------------------------------------------------------------
Forest and Paper Products - 0.9%
Avenor, Inc., 9.375s, 2004 $ 5,350 $ 5,855,147
Brascan, 7.375s, 2002 6,000 5,992,500
Canadian Pacific Forest, 10.25s, 2003 3,700 4,170,529
Georgia-Pacific Corp., 9.875s, 2021 8,215 9,265,206
Georgia-Pacific Corp., 8.125s, 2023 1,550 1,562,974
Georgia Pacific Corp., 8.625s, 2025 3,190 3,377,636
--------------
$30,223,992
- ---------------------------------------------------------------------------------------------------
Medical and Health Technology and Services - 0.1%
OrNda Healthcorp, 12.25s, 2002 $ 2,250 $ 2,486,250
- ---------------------------------------------------------------------------------------------------
Metals and Minerals - 0.3%
ASARCO, Inc., 8.5s, 2025 $ 7,000 $ 7,547,260
Kaiser Aluminum & Chemical Corp., 9.875s, 2002 1,000 1,000,000
--------------
$ 8,547,260
- ---------------------------------------------------------------------------------------------------
Oils - 1.9%
Enron Corp., 7.125s, 2007 $ 7,000 $ 7,144,340
Gulf Canada Resources Ltd., 9.25s, 2004 1,000 990,000
Louisiana Land & Exploration, 7.65s, 2023 13,520 13,261,903
Noram Energy Corp., 7.5s, 2000 10,750 10,819,122
Oryx Energy Co., 6.23s, 1995 5,000 4,998,050
Oryx Energy Co., 9.3s, 1996 14,650 14,819,208
USX-Marathon Group, 8.875s, 1997 5,000 5,210,250
Union Texas Petroleum Holdings, 8.5s, 2007 5,340 5,871,597
--------------
$63,114,470
- ---------------------------------------------------------------------------------------------------
Pollution Control - 0.1%
Laidlaw, Inc., 8.75s, 2025 $ 3,040 $ 3,383,915
- ---------------------------------------------------------------------------------------------------
Precious Metals and Minerals - 0.2%
Santa Fe Pacific Gold, 8.375s, 2005 $ 5,250 $ 5,240,182
- ---------------------------------------------------------------------------------------------------
Printing and Publishing - 0.9%
News America Holdings, Inc., 7.45s, 2000 $ 3,400 $ 3,483,436
News America Holdings, Inc., 7.5s, 2000 1,700 1,745,985
News America Holdings, Inc., 10.125s, 2012 10,000 11,639,700
News America Holdings, Inc., 9.5s, 2024 3,000 3,529,920
Valassis Inserts, 9.375s, 1999 7,499 7,621,684
--------------
$28,020,725
- ---------------------------------------------------------------------------------------------------
Restaurants and Lodging
Four Seasons Hotels, Inc., 9.125s, 2000## $ 1,000 $ 973,750
- ---------------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
Portfolio of Investments - continued
Non-Convertible Bonds - continued
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Industrials - continued
Special Products and Services - 0.2%
Eagle Industries, Inc., 0s, 2003 $ 500 $ 390,000
IMC Fertilizer Group, 9.25s, 2000 4,000 4,120,000
Mark IV Industries, Inc., 8.75s, 2003 400 408,000
OSI Specialties, Inc., 9.25s, 2003 500 545,000
--------------
$ 5,463,000
- ---------------------------------------------------------------------------------------------------
Steel - 0.1%
AK Steel Holdings Corp., 10.75s, 2004 $ 2,000 $ 2,137,500
Weirton Steel Corp., 10.75s, 2005## 1,750 1,618,750
--------------
$ 3,756,250
- ---------------------------------------------------------------------------------------------------
Stores - 1.1%
Dayton-Hudson Corp., 9s, 2021 $ 10,000 $ 11,508,900
Eckerd (Jack) Corp., 9.25s, 2004 500 526,250
Finlay Enterprises, Inc., 12s, 2005 1,500 1,035,000
Finlay Fine Jewelry, 10.625s, 2003 1,000 990,000
K Mart Corp., 8.125s, 2006 5,490 5,696,040
K Mart Corp., 8.99s, 2010 4,000 4,169,156
K Mart Corp., 9.35s, 2020 13,000 13,016,250
--------------
$ 36,941,596
- ---------------------------------------------------------------------------------------------------
Supermarkets - 0.4%
Kroger Co., 8.5s, 2003 $ 750 $ 776,250
Kroger Co., 9.25s, 2005 4,250 4,568,750
Purity Supreme, Inc., 11.75s, 1999 750 819,375
Safeway Stores, Inc., 9.65s, 2004 4,000 4,440,000
Stop & Shop Cos., Inc., 9.75s, 2002 1,700 1,853,000
--------------
$ 12,457,375
- ---------------------------------------------------------------------------------------------------
Telecommunications - 1.7%
MFS Communications, Inc., 0s, 2004 $ 2,850 $ 2,158,875
Paging Network, Inc., 8.875s, 2006 3,000 2,917,500
Rogers Cablesystems Ltd., 9.625s, 2002 350 360,500
TCI Communications, Inc., 8.75s, 2015 6,749 7,042,379
Tele Communications, Inc., 7.38s, 2001 5,250 5,317,252
Tele Communications, Inc., 9.8s, 2012 4,760 5,418,546
Tele Communications, Inc., 9.25s, 2023 15,741 16,529,782
USA Mobile Communication, 9.5s, 2004 500 465,000
Viacom, Inc., 7.75s, 2005 15,000 15,289,800
--------------
$ 55,499,634
- ---------------------------------------------------------------------------------------------------
Other - 0.6%
FHP International Corp., 7s, 2003 $ 3,000 $ 2,961,630
McDonnell Douglas Co., 9.25s, 2002 8,380 9,423,394
Raytheon Co., 7.375s, 2025 3,550 3,518,866
Rouse Co., 8.5s, 2003 4,000 4,240,480
--------------
$ 20,144,370
- ---------------------------------------------------------------------------------------------------
Total Industrials $376,392,039
- ---------------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
Portfolio of Investments - continued
Non-Convertible Bonds - continued
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Insurance - 0.3%
CCP Insurance, Inc., 10.5s, 2004 $ 4,180 $ 4,475,024
Travelers Group, Inc., 7.875s, 2025 5,200 5,418,504
--------------
$ 9,893,528
- ---------------------------------------------------------------------------------------------------
Transportation - 1.0%
Delta Air Lines, Inc., 9.75s, 2021 $ 3,680 $ 4,140,846
Delta Air Lines, Inc., 10.375s, 2022 5,000 5,977,800
Jet Equipment Trust, 10.91s, 2006## 7,489 8,443,204
Jet Equipment Trust, 9.71s, 2014## 2,000 2,104,780
Jet Equipment Trust, 10.69s, 2015## 1,250 1,398,275
Northwest Airlines Trust, 9.25s, 2014 3,901 4,432,948
Qantas Airways Ltd., 7.5s, 2003## 5,000 5,067,700
--------------
$31,565,553
- ---------------------------------------------------------------------------------------------------
U.S. Government Agencies - 2.6%
Federal National Mortgage Association - 2.1%
FNMA, 8.5s, 2003 $ 75 $ 77,350
FNMA, 8.5s, 2005 17,000 18,248,480
FNMA, 8.5s, 2005 163 168,717
FNMA, 8.5s, 2006 1,289 1,335,867
FNMA, 8.5s, 2007 74 76,353
FNMA, 9s, 2001 55 57,537
FNMA, 9s, 2002 5 5,366
FNMA, 9s, 2004 131 136,916
FNMA, 9s, 2005 543 567,912
FNMA, 9s, 2006 1,046 1,092,100
FNMA, 9.5s, 2024 4,043 4,274,074
FNMA, 9.5s, 2025 41,151 43,503,680
--------------
$69,544,352
- ---------------------------------------------------------------------------------------------------
Other - 0.5%
Resolution Funding Corp., Strips, 0s, 2020 $ 90,900 $16,478,352
- ---------------------------------------------------------------------------------------------------
Total U.S. Government Agencies $86,022,704
- ---------------------------------------------------------------------------------------------------
U.S. Government Guaranteed - 6.3%
Government National Mortgage Association
GNMA, 9s, 2017 $ 525 $ 552,970
- ---------------------------------------------------------------------------------------------------
Small Business Administration
SBA, 8.8s, 2000 $ 558 $ 615,979
- ---------------------------------------------------------------------------------------------------
U.S. Treasury Obligations - 6.3%
Stripped Principal Payments, 0s, 2020 $126,800 $24,038,744
U.S. Treasury Notes, 7.25s, 1996 89,500 90,855,070
U.S. Treasury Notes, 7.375s, 1997 46,500 47,858,730
U.S. Treasury Notes, 6.75s, 1999 13,500 13,833,315
U.S. Treasury Notes, 7.5s, 1999 900 947,673
U.S. Treasury Notes, 6.25s, 2000 4,285 4,323,822
U.S. Treasury Notes, 7.125s, 2000 12,375 12,893,141
U.S. Treasury Notes, 7.75s, 2000 1,500 1,597,035
</TABLE>
11
<PAGE>
Portfolio of Investments - continued
Non-Convertible Bonds - continued
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. Government Guaranteed - continued
U.S. Treasury Obligations - continued
U.S. Treasury Notes, 7.25s, 2004 $ 6,500 $ 6,949,930
U.S. Treasury Notes, 7.875s, 2004 1,048 1,165,407
U.S. Treasury Bonds, 7.5s, 2024 1,575 1,752,928
--------------
$206,215,795
- ---------------------------------------------------------------------------------------------------
Total U.S. Government Guaranteed $207,384,744
- ---------------------------------------------------------------------------------------------------
Utilities - Electric - 4.9%
BVPS II Funding Corp., 8.33s, 2007 $ 7,500 $ 7,368,075
Central Maine Power Co., 7.98s, 1996 5,000 5,080,700
Central Maine Power Co., 7.45s, 1999 2,500 2,506,250
Cleveland Electric Illumination, 9.5s, 2005 3,950 3,955,530
Commonwealth Edison Co., 9.5s, 2016 5,245 5,505,991
Commonwealth Edison Co., 8.5s, 2022 3,000 3,147,090
Commonwealth Edison Co., 8.375s, 2023 14,630 15,239,632
First PV Funding Corp., 10.3s, 2014 3,310 3,363,788
First PV Funding Corp., 10.15s, 2016 13,493 13,493,000
Gulf States Utilities Co., 8.25s, 2004 4,750 5,071,432
Long Island Lighting Co., 8.75s, 1997 8,000 8,203,040
Long Island Lighting Co., 7.625s, 1998 5,400 5,493,366
Long Island Lighting Co., 8.9s, 2019 16,000 15,857,120
Long Island Lighting Co., 9.625s, 2024 2,500 2,559,375
Louisiana Power & Light Co., 10.67s, 2017 2,065 2,220,618
Louisiana Power & Light Co., 10.67s, 2017 1,000 1,075,360
Midland Cogeneration Venture Corp., 10.33s, 2002 3,458 3,561,319
Midland Funding Corp. II, "A", 11.75s, 2005 6,140 6,447,000
Niagara Mohawk Power Co., 9.25s, 2001 4,390 4,825,664
Niagara Mohawk Power Co., 6.875s, 2003 2,500 2,451,700
Niagara Mohawk Power Co., 8s, 2004 2,800 2,929,696
Niagara Mohawk Power Co., 9.75s, 2005 6,500 7,582,705
Niagara Mohawk Power Co., 7.75s, 2006 12,260 12,589,058
Niagara Mohawk Power Co., 8.75s, 2022 7,880 8,129,008
Ohio Edison Co., 7.375s, 2002 1,855 1,897,999
PNPP II Funding Corp., 8.51s, 2006 4,361 4,373,385
Texas & New Mexico Power Co., 12.5s, 1999 3,623 4,075,875
--------------
$159,003,776
- ---------------------------------------------------------------------------------------------------
Utilities - Gas - 1.1%
ANR Pipeline Co., 7s, 2005 $ 8,220 $ 8,464,463
California Energy Co., 0s, 2004 4,400 3,872,000
Coastal Corp., 10.375s, 2000 4,645 5,276,581
Northwest Pipeline Co., 9s, 2022 1,580 1,702,260
Panhandle Eastern Corp., 8.625s, 2025 3,765 4,053,700
Parker & Parsley Petroleum, 8.25s, 2007 3,070 3,181,288
Southern Union Co., 7.6s, 2024 9,500 9,420,010
Texas Eastern Corp., 9s, 1997 1,000 1,032,500
--------------
$ 37,002,802
- ---------------------------------------------------------------------------------------------------
</TABLE>
12
<PAGE>
Portfolio of Investments - continued
Non-Convertible Bonds - continued
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Utilities - Telephone - 0.1%
Century Telephone Enterprises, 8.25s, 2024 $ 4,400 $ 4,636,104
- ---------------------------------------------------------------------------------------------------
Total Non-Convertible Bonds (Identified Cost,
$1,085,097,487) $1,151,940,627
- ---------------------------------------------------------------------------------------------------
Convertible Bonds - 3.8%
- ---------------------------------------------------------------------------------------------------
Banks and Credit Companies - 0.2%
Bank of New York Co., Inc., 7.5s, 2001 $ 3,000 $ 7,061,250
- ---------------------------------------------------------------------------------------------------
Chemicals - 0.3%
Sandoz, 2s, 2002## $ 2,240 $ 1,818,208
Valhi, Inc., 0s, 1997 19,889 7,408,652
--------------
$ 9,226,860
- ---------------------------------------------------------------------------------------------------
Computer Software - Personal Computers - 0.1%
Altera Corp., 5.75s, 2002## $ 1,400 $ 1,967,000
- ---------------------------------------------------------------------------------------------------
Conglomerates - 0.1%
Cooper Industries, 7.05s, 2015 $ 3,000 $ 3,018,750
- ---------------------------------------------------------------------------------------------------
Consumer Goods and Services - 0.1%
Coleman Worldwide Corp., 0s, 1998 $ 6,250 $ 1,914,062
Fieldcrest Cannon Industries, 6s, 2012 3,000 2,527,500
--------------
$ 4,441,562
- ---------------------------------------------------------------------------------------------------
Electrical Equipment - 0.1%
National Semiconductor, 6.5s, 2002## $ 2,000 $ 2,000,000
- ---------------------------------------------------------------------------------------------------
Electronics - 0.3%
ADT Operations, Inc., 0s, 2010 $ 9,475 $ 4,133,469
VLSI Technology, Inc., 8.25s, 2005 4,600 4,646,000
--------------
$ 8,779,469
- ---------------------------------------------------------------------------------------------------
Entertainment - 0.1%
Time Warner, Inc., 8.75s, 2015 $ 2,742 $ 2,851,212
- ---------------------------------------------------------------------------------------------------
Financial Institutions
Mitsubishi Bank, 3s, 2002 $ 1,200 $ 1,200,000
- ---------------------------------------------------------------------------------------------------
Food and Beverage Products - 0.1%
Grand Metropolitan, 6.5s, 2000## $ 3,000 $ 3,393,750
- ---------------------------------------------------------------------------------------------------
Insurance - 0.4%
Equitable Cos., Inc., 6.125s, 2024 $ 10,500 $ 11,970,000
- ---------------------------------------------------------------------------------------------------
Machinery - 0.4%
Aktiebolaget, 0s, 2002## ECU 18,100 $ 13,653,509
- ---------------------------------------------------------------------------------------------------
Medical and Health Products - 1.1%
Alza Corp., 0s, 1999 $ 10,000 $ 3,850,000
Ciba-Geigy Corp., 6.25s, 2016## 1,600 1,584,000
Roche Holdings, Inc., 0s, 2008## 32,500 23,887,500
Roche Holdings, Inc., 0s, 2010## 19,770 7,932,712
---------------
$ 37,254,212
- ---------------------------------------------------------------------------------------------------
Pollution Control - 0.1%
U.S. Filter Corp., 6s, 2005## $ 2,000 $ 2,202,500
- ---------------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE>
Portfolio of Investments - continued
Convertible Bonds - continued
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Real Estate Investment Trusts--0.2%
Liberty Property Trust, 8s, 2001 $ 6,000 $ 6,322,500
- ---------------------------------------------------------------------------------------------------
Special Products and Services - 0.1%
Cemex S.A., 4.25s, 1997## $ 5,500 $ 4,585,625
- ---------------------------------------------------------------------------------------------------
Stores
Federated Department Stores, 5s, 2003 $ 1,000 $ 1,000,000
Staples, Inc., 4.5s, 2000## 500 521,250
--------------
$ 1,521,250
- ---------------------------------------------------------------------------------------------------
Telecommunications - 0.1%
LDDS Communications, Inc., 5s, 2003 $ 1,000 $ 1,028,750
Turner Broadcasting Systems, Inc., 0s, 2007## 3,000 1,342,500
--------------
$ 2,371,250
- ---------------------------------------------------------------------------------------------------
Total Convertible Bonds (Identified Cost, $118,067,804) $123,820,699
- ---------------------------------------------------------------------------------------------------
Preferred Stocks - 0.9%
- ---------------------------------------------------------------------------------------------------
Shares
- ---------------------------------------------------------------------------------------------------
Aetna Capital LLC, 9.5% 200,000 $ 5,400,000
Bank United of Texas, "B", 9.6% 200,000 5,025,000
Boise Cascade Corp., "F", 9.4% 140,000 3,710,000
Conagra Capital, "A", 9% 200,000 5,375,000
Nevada Power Co., 9.9% 20,000 2,165,000
USX Capital LLC, 8.75% 376,800 9,325,800
- ---------------------------------------------------------------------------------------------------
Total Preferred Stocks (Identified Cost, $29,744,330) $ 31,000,800
- ---------------------------------------------------------------------------------------------------
Common Stocks - 47.2%
- ---------------------------------------------------------------------------------------------------
U.S. Stocks - 46.8%
Aerospace - 1.1%
Allied Signal, Inc. 100,000 $ 4,412,500
Lockheed Martin Corp. 96,000 6,444,000
United Technologies Corp. 277,424 24,517,346
--------------
$ 35,373,846
- ---------------------------------------------------------------------------------------------------
Airlines
Midwest Express Holdings* 13,500 $ 303,750
- ---------------------------------------------------------------------------------------------------
Apparel and Textiles - 0.1%
Springs Industries, Inc. 45,000 $ 1,766,250
- ---------------------------------------------------------------------------------------------------
Automotive - 2.1%
Daimler Benz, ADR 203,500 $ 10,098,688
Dana Corp. 200,000 5,775,000
Ford Motor Co. 525,677 16,361,697
General Motors Corp. 608,269 28,512,609
Goodyear Tire & Rubber Co. 178,000 7,008,750
--------------
$ 67,756,744
- ---------------------------------------------------------------------------------------------------
Banks and Credit Companies - 4.6%
Bank of Boston Corp. 383,500 $ 18,264,188
</TABLE>
14
<PAGE>
Portfolio of Investments - continued
Common Stocks - continued
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Issuer Shares Value
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. Stocks - continued
Banks and Credit Companies - continued
Bank of New York, Inc. 165,000 $ 7,672,500
Chase Manhattan Corp. 396,200 24,217,725
Citicorp 165,400 11,702,050
Comerica, Inc. 50,000 1,818,750
Corestates Financial Corp. 150,000 5,493,750
First Bank System, Inc. 250,000 12,031,250
First Union Corp. 120,000 6,120,000
National City Corp. 580,000 17,907,500
NationsBank Corp. 350,000 23,537,500
Northern Trust Co. 420,000 19,320,000
Norwest Corp. 81,700 2,675,675
--------------
$150,760,888
- ---------------------------------------------------------------------------------------------------
Business Machines - 0.9%
Hewlett-Packard Co. 45,000 $ 3,751,875
Texas Instruments, Inc. 95,000 7,588,125
Xerox Corp. 135,000 18,140,625
--------------
$ 29,480,625
- ---------------------------------------------------------------------------------------------------
Cellular Telephones - 0.1%
AirTouch Communications, Inc.* 107,812 $ 3,301,743
- ---------------------------------------------------------------------------------------------------
Chemicals - 1.6%
Dow Chemical Co. 200,000 $ 14,900,000
du Pont (E.I.) de Nemours & Co. 180,000 12,375,000
Grace (W.R.) & Co. 373,900 24,957,825
--------------
$ 52,232,825
- ---------------------------------------------------------------------------------------------------
Conglomerates - 0.9%
Eastern Enterprises 350,000 $ 11,243,750
Textron, Inc. 250,000 17,062,500
--------------
$ 28,306,250
- ---------------------------------------------------------------------------------------------------
Consumer Goods and Services - 1.6%
Colgate-Palmolive Co. 151,900 $ 10,120,338
Gillette Co. 85,600 4,076,700
Philip Morris Cos., Inc. 410,400 34,268,400
Rubbermaid, Inc. 101,200 2,795,650
--------------
$ 51,261,088
- ---------------------------------------------------------------------------------------------------
Defense Electronics - 0.2%
Loral Corp. 135,900 $ 7,746,300
- ---------------------------------------------------------------------------------------------------
Electrical Equipment - 1.4%
Alcatel Alsthom Compagnie, ADR 330,000 $ 5,610,000
Emerson Electric Co. 100,000 7,150,000
General Electric Co. 215,372 13,729,965
Honeywell, Inc. 431,000 18,479,125
--------------
$ 44,969,090
- ---------------------------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
Portfolio of Investments - continued
Common Stocks - continued
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Issuer Shares Value
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. Stocks - continued
Electronics - 0.3%
AMP, Inc. 60,000 $ 2,310,000
Perkin-Elmer Corp. 230,000 8,193,750
--------------
$ 10,503,750
- ---------------------------------------------------------------------------------------------------
Financial Institutions - 1.1%
Bear Stearns Cos., Inc. 170,490 $ 3,665,556
Dean Witter Discover & Co., Inc. 225,796 12,701,025
Federal Home Loan Mortgage Corp. 215,000 14,861,875
Integra Financial Corp. 90,000 5,231,250
--------------
$ 36,459,706
- ---------------------------------------------------------------------------------------------------
Food and Beverage Products - 2.3%
Anheuser-Busch Cos., Inc. 130,000 $ 8,108,750
Campbell Soup Co. 27,500 1,396,942
CPC International, Inc. 235,000 15,510,000
Coca-Cola Co. 120,000 8,280,000
General Mills, Inc. 318,000 17,728,500
Kellog Co. 80,000 5,790,000
McCormick & Co. Inc. 41,700 995,588
PepsiCo, Inc. 355,000 18,105,000
--------------
$ 75,914,780
- ---------------------------------------------------------------------------------------------------
Forest and Paper Products - 0.8%
Bowater, Inc. 227,914 $ 10,626,490
Georgia-Pacific Corp. 34,500 3,018,750
Kimberly Clark Corp. 20,000 1,342,500
Scott Paper Co. 30,000 1,453,050
Weyerhaeuser Co. 220,000 10,037,500
--------------
$ 26,478,290
- ---------------------------------------------------------------------------------------------------
Insurance - 4.5%
Aetna Life & Casualty Co. 460,600 $ 33,796,525
Allstate Corp. 279,779 9,897,182
American General Corp. 400,000 14,950,000
CIGNA Corp. 324,800 33,819,800
Lincoln National Corp. 91,000 4,288,375
MBIA, Inc. 160,000 11,280,000
Reliastar Financial Corp. 275,000 11,171,875
Torchmark Corp. 125,000 5,265,625
Travelers, Inc. 286,269 15,208,041
UNUM Corp. 156,000 8,229,000
--------------
$147,906,423
- ---------------------------------------------------------------------------------------------------
Machinery - 0.5%
Caterpillar, Inc. 70,008 $ 3,981,705
Deere & Co., Inc. 86,000 6,998,250
Ingersoll Rand Co. 119,000 4,462,500
--------------
$ 15,442,455
- ---------------------------------------------------------------------------------------------------
</TABLE>
16
<PAGE>
Portfolio of Investments - continued
Common Stocks - continued
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Issuer Shares Value
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. Stocks - continued
Medical and Health Products - 2.0%
American Home Products Corp. 260,000 $ 22,067,500
Baxter International, Inc. 257,300 10,581,463
Lilly (Eli) & Co. 205,000 18,424,375
SmithKline Beecham PLC, ADR 250,000 12,656,250
Warner Lambert Co. 30,000 2,857,500
--------------
$ 66,587,088
- ---------------------------------------------------------------------------------------------------
Metals and Minerals - 0.6%
Cyprus Amax Minerals 300,000 $ 8,437,500
Phelps Dodge Corp. 192,560 12,059,070
--------------
$ 20,496,570
- ---------------------------------------------------------------------------------------------------
Oil Services - 0.5%
Dresser Industries, Inc. 100,000 $ 2,387,500
Schlumberger Ltd. 222,512 14,518,908
--------------
$ 16,906,408
- ---------------------------------------------------------------------------------------------------
Oils - 5.9%
Amoco Corp. 324,500 $ 20,808,563
Atlantic Richfield Co. 102,300 10,984,463
British Petroleum PLC, ADR 207,922 18,687,032
Chevron Corp. 245,400 11,932,575
Exxon Corp. 270,836 19,567,901
Mobil Corp. 200,000 19,925,000
Occidental Petroleum Corp. 700,000 15,400,000
Royal Dutch Petroleum Co., ADR 260,000 31,915,000
Sun, Inc. 204,582 5,267,986
TOTAL S.A., ADR 343,000 10,332,875
USX-Marathon Group 799,400 15,788,150
Ultramar Corp. 280,000 6,650,000
YPF Sociedad Anonima, ADR 280,000 5,040,000
--------------
$192,299,545
- ---------------------------------------------------------------------------------------------------
Photographic Products - 0.6%
Eastman Kodak Co. 320,500 $ 18,989,625
- ---------------------------------------------------------------------------------------------------
Pollution Control - 0.2%
WMX Technologies, Inc. 200,000 $ 5,700,000
- ---------------------------------------------------------------------------------------------------
Precious Metals and Minerals - 0.1%
Freeport-McMoRan Copper & Gold, Inc. 156,483 $ 4,009,877
- ---------------------------------------------------------------------------------------------------
Railroads - 0.6%
CSX Corp. 164,000 $ 13,796,500
Illinois Central Corp. 120,000 4,695,000
--------------
$ 18,491,500
- ---------------------------------------------------------------------------------------------------
</TABLE>
17
<PAGE>
Portfolio of Investments - continued
Common Stocks - continued
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Issuer Shares Value
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. Stocks - continued
Real Estate Investment Trusts - 1.4%
Beacon Properties Corp. 303,400 $ 6,485,175
Equity Residential Properties 54,000 1,626,750
Health Care Property Investors, Inc. 107,400 3,638,175
Hospitality Properties Trust 380,000 9,975,000
Kimco Realty Corp. 48,800 1,945,900
Meditrust Corp. 254,800 8,822,450
National Health Investors, Inc. 244,400 7,393,100
Oasis Residential 100,000 2,250,000
Omega Healthcare Investors 80,000 2,140,000
Storage Equities, Inc. 49,200 916,350
Sun Communities, Inc. 85,800 2,230,800
--------------
$47,423,700
- ---------------------------------------------------------------------------------------------------
Special Products and Services - 0.4%
Minnesota Mining & Manufacturing Co. 80,000 $ 4,520,000
Pennsylvania Enterprises, Inc. 105,000 3,622,500
Stanley Works 130,000 5,638,750
--------------
$13,781,250
- ---------------------------------------------------------------------------------------------------
Stores - 1.7%
Dayton-Hudson Corp. 122,100 $ 9,264,338
May Department Stores Co. 619,760 27,114,500
Penney (J.C.), Inc. 120,000 5,955,000
Sears, Roebuck & Co. 358,400 13,216,000
--------------
$55,549,838
- ---------------------------------------------------------------------------------------------------
Utilities - Electric - 1.9%
CMS Energy Corp. 300,000 $ 7,875,000
FPL Group, Inc. 420,000 17,167,500
General Public Utilities Co. 125,000 3,890,625
Pacific Gas & Electric Co. 300,600 8,980,425
PECO Energy Co. 350,000 10,018,750
Pinnacle West Capital Corp. 50,000 1,312,500
Portland General Electric Corp. 57,700 1,481,349
Rochester Gas & Electric Corp. 71,800 1,696,275
Texas Utilities Co. 60,000 2,092,500
Unicom Corp. 223,900 6,772,975
--------------
$61,287,899
- ---------------------------------------------------------------------------------------------------
Utilities - Gas - 3.3%
British Gas PLC, ADR 75,000 $ 3,131,250
Coastal Corp. 195,000 6,556,875
Enron Corp. 270,000 9,045,000
Pacific Enterprises 676,400 16,994,550
Panhandle Eastern Corp. 218,000 5,940,500
Questar Corp. 35,000 1,124,375
Sonat, Inc. 420,000 13,440,000
Tenneco, Inc. 350,000 16,187,500
</TABLE>
18
<PAGE>
Portfolio of Investments - continued
Common Stocks - continued
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Issuer Shares Value
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. Stocks - continued
Utilities - Gas - continued
UGI Corp. 410,000 $ 8,456,250
Williams Cos., Inc. 720,012 28,080,468
--------------
$ 108,956,768
- ---------------------------------------------------------------------------------------------------
Utilities - Telephone - 3.5%
AT & T Corp. 409,000 $ 26,891,750
Ameritech Corp. 211,416 11,020,059
Frontier Corp. 199,600 5,314,350
GTE Corp. 422,000 16,563,500
MCI Communications Corp. 453,000 11,806,312
NYNEX Corp. 268,800 12,835,200
Pacific Telesis Group 150,000 4,612,500
SBC Communications, Inc. 126,600 6,963,000
Sprint Corp. 377,900 13,226,500
Tele Danmark, ADR 155,000 4,010,625
--------------
$ 113,243,796
- ---------------------------------------------------------------------------------------------------
Total U.S. Stocks (Identified Cost, $1,090,951,534) $1,529,688,667
- ---------------------------------------------------------------------------------------------------
Foreign Stocks - 0.4%
Spain - 0.2%
Iberdrola (Utilities - Electric) 750,000 $ 5,686,275
- ---------------------------------------------------------------------------------------------------
United Kingdom - 0.2%
National Power PLC (Utilities - Electric) 1,132,000 $ 4,049,051
PowerGen PLC (Utilities - Electric) 729,000 2,872,916
--------------
$ 6,921,967
- ---------------------------------------------------------------------------------------------------
Total Foreign Stocks (Identified Cost, $10,904,269) $ 12,608,242
- ---------------------------------------------------------------------------------------------------
Total Common Stocks (Identified Cost, $1,101,855,803) $1,542,296,909
- ---------------------------------------------------------------------------------------------------
Convertible Preferred Stocks - 5.0%
- ---------------------------------------------------------------------------------------------------
Agricultural Products - 0.2%
Case Corp., $4.50 70,000 $ 7,131,250
- ---------------------------------------------------------------------------------------------------
Apparel and Textiles - 0.1%
Owens Corning Capital LLC, 6.5%## 55,000 $ 3,245,000
- ---------------------------------------------------------------------------------------------------
Automotive - 0.3%
General Motors Corp., $3.25 140,000 $ 9,082,500
- ---------------------------------------------------------------------------------------------------
Banks and Credit Companies - 0.8%
Citicorp, 10.75% 100,000 $ 19,550,000
Washington Mutual, Inc., "D", $6.00 52,000 5,473,000
------------
$ 25,023,000
- ---------------------------------------------------------------------------------------------------
Business Services
ALCO Standard Corp., $5.04 15,000 $ 1,263,750
- ---------------------------------------------------------------------------------------------------
Construction Services - 0.1%
Southdown, Inc., "D", $2.875 48,700 $ 1,893,212
- ---------------------------------------------------------------------------------------------------
</TABLE>
19
<PAGE>
Portfolio of Investments - continued
Convertible Preferred Stocks - continued
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Issuer Shares Value
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Entertainment - 0.1%
Bally Entertainment, 8% 195,000 $ 2,193,750
- ---------------------------------------------------------------------------------------------------
Financial Institutions - 0.5%
Advanta Corp., 6.75%* 30,000 $ 1,263,750
First Chicago Corp., "B", 5.75% 176,100 11,314,425
Merrill Lynch & Co., 6.50% 66,600 3,646,350
------------
$16,224,525
- ---------------------------------------------------------------------------------------------------
Food and Beverage Products - 0.2%
RJR Nabisco Holdings, "C", 9.25% 1,100,700 $ 7,429,725
- ---------------------------------------------------------------------------------------------------
Insurance - 0.2%
Allstate Corp., 6.76% 10,000 $ 426,250
St. Paul Capital LLC, 6% 101,700 5,949,450
------------
$ 6,375,700
- ---------------------------------------------------------------------------------------------------
Medical and Health Technology and Services
SCI Finance LLC, "A", $3.125 15,000 $ 1,049,025
- ---------------------------------------------------------------------------------------------------
Oil Services - 0.1%
Reading & Bates Corp., $1.625 95,200 $ 3,427,200
- ---------------------------------------------------------------------------------------------------
Oils - 0.6%
Atlantic Richfield Co., 9% 429,551 $10,953,550
Occidental Petroleum Corp., $3.875 140,000 8,050,000
------------
$19,003,550
- ---------------------------------------------------------------------------------------------------
Pollution Control - 0.3%
Browning-Ferris Industries, 7.25%* 275,000 $ 9,143,750
- ---------------------------------------------------------------------------------------------------
Precious Metals and Minerals - 0.3%
Freeport-McMoRan Copper & Gold, Inc., 7% 120,000 $ 3,300,000
Freeport-McMoRan Copper & Gold, Inc., 5% 200,000 5,150,000
------------
$ 8,450,000
- ---------------------------------------------------------------------------------------------------
Real Estate Investment Trusts - 0.2%
Catellus Development Corp., $3.75 13,200 $ 631,950
Oasis Residential, "A", 9% 70,000 1,811,250
Security Capital Pacific, "A", $1.75 164,000 3,956,500
Wellsford Residential Property Trust, "A", 7% 90,000 1,766,250
------------
$ 8,165,950
- ---------------------------------------------------------------------------------------------------
Special Products and Services - 0.2%
Ceridian Corp., 5.5% 68,000 $ 6,596,000
- ---------------------------------------------------------------------------------------------------
Steel - 0.2%
AK Steel Holdings Corp., 7% 216,500 $ 6,549,125
- ---------------------------------------------------------------------------------------------------
Utilities - Electric - 0.1%
Williams Cos., Inc., 7%## 58,000 $ 3,994,750
- ---------------------------------------------------------------------------------------------------
Utilities - Gas - 0.1%
Western Gas Resources, Inc., $2.625 61,000 $ 2,226,500
- ---------------------------------------------------------------------------------------------------
</TABLE>
20
<PAGE>
Portfolio of Investments - continued
Convertible Preferred Stocks - continued
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Issuer Shares Value
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Utilities - Telephone - 0.4%
Cointel, 7%## 299,800 $ 14,727,675
- ---------------------------------------------------------------------------------------------------
Total Convertible Preferred Stocks (Identified Cost, $154,774,892) $ 163,195,937
-------------------------------------------------------------------------------------------------
</TABLE>
Short-Term Obligations - 7.9%
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Principal Amount
(000 Omitted)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
AT&T Corp., due 11/28/95 $ 7,400 $ 7,331,599
du Pont (E.I.) de Nemours & Co., due 10/25/95 15,000 14,941,041
Federal Farm Credit Bank, due 11/03/95 - 11/06/95 6,500 6,465,368
Federal Home Loan Bank, due 10/10/95 - 11/30/95 25,800 25,670,904
Federal Home Loan Mortgage Corp., due 10/20/95 - 11/20/95 84,093 83,676,574
Federal National Mortgage Assn., due 10/02/95 - 11/17/95 65,175 64,979,913
Ford Motor Credit Co., due 10/27/95 10,500 10,454,719
GTE South, due 10/04/95 7,800 7,795,016
Heinz (H.J.) Co., due 10/03/95 - 10/13/95 16,354 16,340,773
PepsiCo, Inc., due 10/03/95 12,300 12,294,168
Wal Mart Stores, due 11/21/95 7,400 7,339,073
- ---------------------------------------------------------------------------------------------------
Total Short-Term Obligations, at Amortized Cost $ 257,289,148
- ---------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $2,746,829,464) $3,269,544,120
Other Assets, Less Liabilities 1,164,726
- ---------------------------------------------------------------------------------------------------
Net Assets - 100.0% $3,270,708,846
- ---------------------------------------------------------------------------------------------------
</TABLE>
* Non-income producing security.
## SEC Rule 144A security.
+ Restricted security.
ECU = Principal amount of security denominated in European Currency Units.
See notes to financial statements
21
<PAGE>
Financial Statements
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
September 30, 1995
- -----------------------------------------------------------------------------------------
<S> <C>
Assets:
Investments, at value (identified cost, $2,746,829,464) $3,269,544,120
Cash 16,688
Receivable for investments sold 48,388,417
Receivable for Fund shares sold 3,664,095
Interest and dividends receivable 29,056,870
Receivable from investment adviser 93,132
Other assets 58,151
-----------
Total assets $3,350,821,473
===========
Liabilities:
Distributions payable $ 1,667,599
Payable for investments purchased 69,267,792
Payable for Fund shares reacquired 7,245,963
Payable to affiliates -
Management fee 52,437
Shareholder servicing agent fee 24,598
Distribution fee 1,227,748
Accrued expenses and other liabilities 626,490
-----------
Total liabilities $ 80,112,627
-----------
Net assets $3,270,708,846
===========
Net assets consist of:
Paid-in capital $2,648,454,101
Unrealized appreciation on investments and translation of assets and
liabilities in foreign currencies 522,715,383
Accumulated undistributed net realized gain on investments and foreign
currency transactions 98,017,011
Accumulated undistributed net investment income 1,522,351
-----------
Total $3,270,708,846
===========
Shares of beneficial interest outstanding 226,115,458
===========
Class A shares:
Net asset value and redemption price per share
(net assets of $2,242,435,897 / 155,030,940 shares of beneficial
interest outstanding) $14.46
===========
Offering price per share (100/95.25) $15.18
===========
Class B shares:
Net asset value and offering price per share
(net assets of $1,005,413,281 / 69,507,266 shares of beneficial
interest outstanding) $14.46
===========
Class C shares:
Net asset value, offering price and redemption price
(net assets of $22,859,668 / 1,577,252 shares of beneficial interest
outstanding) $14.49
===========
</TABLE>
On sales of $100,000 or more, the offering price of Class A shares is
reduced. A contingent deferred sales charge may be imposed on redemptions of
Class A and Class B shares.
See notes to financial statements
22
<PAGE>
Financial Statements - continued
Statement of Operations
<TABLE>
<CAPTION>
<S> <C>
- -----------------------------------------------------------------------------------------
Year Ended September 30, 1995
- -----------------------------------------------------------------------------------------
Net investment income:
Income -
Interest $105,318,026
Dividends 59,076,808
Foreign taxes withheld (478,396)
-----------
Total investment income $163,916,438
-----------
Expenses -
Management fee $ 11,256,389
Trustees' compensation 101,257
Shareholder servicing agent fee (Class A) 2,237,146
Shareholder servicing agent fee (Class B) 1,822,990
Shareholder servicing agent fee (Class C) 11,855
Distribution and service fee (Class A) 6,927,348
Distribution and service fee (Class B) 9,013,390
Distribution and service fee (Class C) 79,034
Custodian fee 629,779
Postage 554,164
Printing 267,348
Auditing fees 79,600
Legal fees 22,496
Miscellaneous 1,717,103
-----------
Total expenses $ 34,719,899
Reduction of expenses by distributor (1,978,583)
Fees paid indirectly (227,012)
-----------
Net expenses $ 32,514,304
-----------
Net investment income $131,402,134
-----------
Realized and unrealized gain (loss) on investments:
Realized gain (identified cost basis) -
Investment transactions $120,747,175
Foreign currency transactions 39,733
-----------
Net realized gain on investments $120,786,908
-----------
Change in unrealized appreciation (depreciation) -
Investments $242,713,291
Translation of assets and liabilities in foreign
currencies (88,386)
-----------
Net unrealized gain on investments $242,624,905
-----------
Net realized and unrealized gain on investments and
foreign currency $363,411,813
-----------
Increase in net assets from operations $494,813,947
===========
</TABLE>
See notes to financial statements
23
<PAGE>
Financial Statements - continued
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
Year Ended September 30, 1995 1994
<S> <C> <C>
- -----------------------------------------------------------------------------------------
Increase (decrease) in net assets:
From operations -
Net investment income $ 131,402,134 $ 100,428,299
Net realized gain (loss) on investments and
foreign currency transactions 120,786,908 (27,333,507)
Net unrealized gain (loss) on investments and
foreign currency translation 242,624,905 (106,132,819)
--------- -----------
Increase (decrease) in net assets from
operations $ 494,813,947 $ (33,038,027)
--------- -----------
Distributions declared to shareholders -
From net investment income (Class A) $ (91,296,492) $ (73,642,097)
From net investment income (Class B) (33,884,609) (22,924,892)
From net investment income (Class C) (302,945) (2,881)
From net realized gain on investments and
foreign currency transactions (Class A) (1,471,111) (13,216,281)
From net realized gain on investments and
foreign currency transactions (Class B) (672,401) (4,649,374)
From net realized gain on investments and
foreign currency transactions (Class C) (2,050) --
In excess of net realized gain on investments
and foreign currency transactions (Class A) -- (13,629,891)
In excess of net realized gain on investments
and foreign currency transactions (Class B) -- (4,794,879)
--------- -----------
Total distributions declared to shareholders $ (127,629,608) $ (132,860,295)
--------- -----------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 620,581,586 $ 875,180,059
Net asset value of shares issued to shareholders
in reinvestment of distributions 108,185,007 109,317,882
Cost of shares reacquired (526,677,345) (351,427,892)
--------- -----------
Increase in net assets from Fund share
transactions $ 202,089,248 $ 633,070,049
--------- -----------
Total increase in net assets $ 569,273,587 $ 467,171,727
Net assets:
At beginning of period 2,701,435,259 2,234,263,532
--------- -----------
At end of period (including accumulated
undistributed (distributions in excess of) net
investment income of $(1,522,351) and
$(7,440,916), respectively) $3,270,708,846 $2,701,435,259
========= ===========
</TABLE>
See notes to financial statements
24
<PAGE>
Financial Statements - continued
Financial Highlights
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
Year Ended September 30, 1995 1994 1993 1992 1991
- ----------------------------------------------------------------------------------------------
Class A
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share data (for a share outstanding
throughout each period):
Net asset value - beginning of period $12.80 $13.70 $12.42 $11.82 $10.25
------ ------ ---- ---- ------
Income from investment operations+++ -
Net investment income*** $ 0.64 $ 0.54 $ 0.45 $ 0.65 $ 0.67
Net realized and unrealized gain
(loss) on investments and foreign
currency transactions 1.64 (0.69) 1.74 0.75 1.57
------ ------ ---- ---- ------
Total from investment operations $ 2.28 $(0.15) $ 2.19 $ 1.40 $ 2.24
------ ------ ---- ---- ------
Less distributions declared to
shareholders -
From net investment income**** $(0.61) $(0.54) $(0.59) $(0.66) $(0.61)
In excess of net investment income++ -- -- -- -- --
From net realized gain on
investments and foreign currency
transactions (0.01) (0.10) (0.32) (0.14) (0.06)
In excess of net realized gain on
investments and foreign currency
transactions -- (0.11) -- -- --
------ ------ ---- ---- ------
Total distributions declared to
shareholders $(0.62) $(0.75) $(0.91) $(0.80) $(0.67)
------ ------ ---- ---- ------
Net asset value - end of period $14.46 $12.80 $13.70 $12.42 $11.82
====== ====== ==== ==== ======
Total return# 18.36% (1.07)% 18.32% 12.26% 22.25%
Ratios (to average net assets)/Supplemental data:***
Expenses## 0.87% 0.85% 0.84% 0.84% 0.87%
Net investment income 4.82% 4.26% 4.51% 5.40% 5.89%
Portfolio turnover 102% 91% 95% 84% 74%
Net assets at end of period
(000,000 omitted) $2,242 $1,857 $1,702 $1,198 $909
***The distributor waived a portion of its distribution fee for the periods
indicated. If this fee had been incurred by the Fund, the net investment income
per share and ratios would have been:
Net investment income $0.63 $ 0.52 -- -- --
Ratios (to average net assets):
Expenses## 0.97% 0.95% -- -- --
Net investment income 4.72% 4.16% -- -- --
</TABLE>
# Total returns for Class A shares do not include the sales charge (except
for reinvested dividends prior to October 1, 1989). If the charge had
been included, the results would have been lower.
+++ Per share data for the periods subsequent to September 30, 1993 is based
on average shares outstanding.
++ For the year ended September 30, 1993, the per share distribution in
excess of net investment income on Class A shares was $0.0035.
**** For the years ended September 30, 1992 and 1991, $0.0508 and
$0.0596, respectively, of per share distributions from net investment
income have been redesignated as distributions from capital gains.
## For fiscal years ending after September 1, 1995, the Fund's expenses are
calculated without reduction for fees paid indirectly.
See notes to financial statements
25
<PAGE>
Financial Statements - continued
Financial Highlights -- continued
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
Year Ended September 30, 1990 1989 1988 1987 1986
- --------------------------------------------------------------------------------------------
Class A
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $11.58 $10.13 $11.47 $ 9.77 $ 8.73
---- ---- ---- ---- ------
Income from investment operations -
Net investment income $ 0.64 $ 0.65 $ 0.62 $ 0.56 $ 0.60
Net realized and unrealized gain
(loss) on investments and foreign
currency transactions (1.25) 1.71 (1.07) 2.07 1.91
---- ---- ---- ---- ------
Total from investment
operations $(0.61) $ 2.36 $(0.45) $ 2.63 $ 2.51
---- ---- ---- ---- ------
Less distributions declared to
shareholders -
From net investment income $(0.66) $(0.63) $(0.60) $(0.56) $(0.59)
From net realized gain on
investments and foreign currency
transactions (0.06) (0.28) (0.08) (0.36) (0.88)
From paid-in capital -- -- (0.21) (0.01) --
---- ---- ---- ---- ------
Total distributions declared to
shareholders $(0.72) $(0.91) $(0.89) $(0.93) $(1.47)
---- ---- ---- ---- ------
Net asset value - end of period $10.25 $11.58 $10.13 $11.47 $ 9.77
==== ==== ==== ==== ======
Total return# (5.59)% 23.46% (3.93)% 26.81% 28.45%
Ratios (to average net assets)/Supplemental data:
Expenses 0.85% 0.72% 0.71% 0.63% 0.67%
Net investment income 5.71% 5.97% 6.06% 5.05% 5.67%
Portfolio turnover 50% 53% 52% 58% 94%
Net assets at end of period
(000,000 omitted) $707 $628 $508 $551 $309
</TABLE>
# Total returns for Class A shares do not include the sales charge (except
for reinvested dividends prior to October 1, 1989). If the charge had been
included, the results would have been lower.
See notes to financial statements
26
<PAGE>
Financial Statements - continued
Financial Highlights -- continued
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
Year Ended September 30, 1995 1994 1993* 1995 1994**
- --------------------------------------------------------------------------------------------
Class B Class C
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning
of period $12.80 $13.70 $13.53 $12.80 $12.92
------ ------ ------ ------ ------
Income from investment
operations++ -
Net investment income $ 0.53 $ 0.39 $ 0.06 $ 0.54 $ 0.08
Net realized and unrealized
gain (loss) on investments
and foreign currency
transactions 1.64 (0.65) 0.16 1.66 (0.13)
------ ------ ------ ------ ------
Total from investment
operations $ 2.17 $(0.26) $ 0.22 $ 2.20 $(0.05)
------ ------ ------ ------ ------
Less distributions declared to
shareholders -
From net investment income $(0.50) $(0.43) $(0.05) $(0.50) $(0.07)
From net realized gain on
investments and foreign
currency transactions (0.01) (0.10) -- (0.01) --
In excess of net realized
gain on investments and
foreign currency
transactions -- (0.11) -- -- --
------ ------ ------ ------ ------
Total distributions
declared to shareholders $(0.51) $(0.64) $(0.05) $(0.51) $(0.07)
------ ------ ------ ------ ------
Net asset value - end of
period $14.46 $12.80 $13.70 $14.49 $12.80
====== ====== ====== ====== ======
Total return 17.46% (1.93)% 15.24%+ 17.66% (0.41)%
Ratios (to average net
assets)/ Supplemental data:
Expenses## 1.71% 1.70% 1.75%+ 1.67% 1.76%+
Net investment income 3.97% 3.45% 3.98%+ 4.14% 4.08%+
Portfolio turnover 102% 91% 95% 102% 91%
Net assets at end of period
(000,000 omitted) $1,005 $843 $532 $23 $1
</TABLE>
* For the period from commencement of offering of Class B shares. August
23, 1993 to September 30, 1993.
** For the period from commencement of offering of Class C shares. August 1,
1994 to September 30, 1994.
+ Annualized.
++ Per share data for the periods subsequent to September 30, 1993 is based
on average shares outstanding.
## For fiscal years ending after September 1, 1995, the Fund's expenses are
calculated without reduction for fees paid indirectly.
See notes to financial statements
27
<PAGE>
Notes to Financial Statements
(1) Business and Organization
MFS Total Return Fund (the Fund) is a diversified series of MFS Series Trust
V (the Trust). The Trust is organized as a Massachusetts business trust and
is registered under the Investment Company Act of 1940, as amended, as an
open-end management investment company.
(2) Significant Accounting Policies
Investment Valuations - Equity securities listed on securities exchanges or
reported through the NASDAQ system are valued at last sale prices. Unlisted
equity securities or listed equity securities for which last sale prices are
not available are valued at last quoted bid prices. Debt securities (other
than short-term obligations which mature in 60 days or less), including
listed issues and forward contracts, are valued on the basis of valuations
furnished by dealers or by a pricing service with consideration to 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, without exclusive reliance upon exchange or
over-the-counter prices. Short-term obligations, which mature in 60 days or
less, are valued at amortized cost, which approximates market value.
Securities for which there are no such quotations or valuations are valued at
fair value as determined in good faith by or at the direction of the
Trustees.
Foreign Currency Translation - Investment valuations, other assets, and
liabilities initially expressed in foreign currencies are converted each
business day into U.S. dollars based upon current exchange rates. Purchases
and sales of foreign investments, income and expenses are converted into U.S.
dollars based upon currency exchange rates prevailing on the respective dates
of such transactions. Gains and losses attributable to foreign currency
exchange rates on sales of securities are recorded for financial statement
purposes as net realized gains and losses on investments. Gains and losses
attributable to foreign exchange rate movements on income and expenses are
recorded for financial statement purposes as foreign currency transaction
gains and losses. That portion of both realized and unrealized gains and
losses on investments that results from fluctuations in foreign currency
exchange rates is not separately disclosed.
Forward Foreign Currency Exchange Contracts - The Fund may enter into forward
foreign currency exchange contracts for the purchase or sale of a specific
foreign currency at a fixed price on a future date. Risks may arise upon
entering into these contracts from the potential inability of counterparties
to meet the terms of their contracts and from unanticipated movements in the
value of a foreign currency relative to the U.S. dollar. The Fund will enter
into forward contracts for hedging purposes as well as for non-hedging
purposes. For hedging purposes, the Fund may enter into contracts to deliver
or receive foreign currency it will receive from or require for its normal
investment activities. It may also use contracts in a manner intended to
protect foreign currency-denominated securities from declines in value due to
unfavorable exchange rate movements. For non-hedging purposes, the Fund may
enter into contracts with the intent of changing the relative
28
<PAGE>
Notes to Financial Statements - continued
exposure of the Fund's portfolio of securities to different currencies to
take advantage of anticipated changes. The forward foreign currency exchange
contracts are adjusted by the daily exchange rate of the underlying currency
and any gains or losses are recorded for financial statement purposes as
unrealized until the contract settlement date.
Investment Transactions and Income - Investment transactions are recorded on
the trade date. Interest income is recorded on the accrual basis. All premium
and original issue discount are amortized or accreted for financial statement
and tax reporting purposes as required by federal income tax regulations.
Dividend income is recorded on the ex-dividend date for dividends received in
cash. Dividend and interest payments received in additional securities are
recorded on the ex-dividend or ex-interest date in an amount equal to the
value of the security on such date.
Fees Paid Indirectly - The Fund's custodian bank calculates its fee based on
the Fund's average daily net assets. This fee is reduced according to an
expense offset arrangement with State Street Bank, the dividend disbursing
agent, which provides for partial reimbursement of custody fees based on a
formula developed to measure the value of cash deposited by the Fund with the
custodian and with the dividend disbursing agent. This amount is shown as a
reduction of expenses on the Statement of Operations.
Tax Matters and Distributions - The Fund's policy is to comply with the
provisions of the Internal Revenue Code (the Code) applicable to regulated
investment companies and to distribute to shareholders all of its net income,
including any net realized gain on investments. Accordingly, no provision for
federal income or excise tax is provided. The Fund files a tax return
annually using tax accounting methods required under provisions of the Code
which may differ from generally accepted accounting principles, the basis on
which these financial statements are prepared. Accordingly, the amount of net
investment income and net realized gain reported on these financial
statements may differ from that reported on the Fund's tax return, and
consequently, the character of distributions to shareholders reported in the
financial highlights may differ from that reported to shareholders on Form
1099-DIV. Foreign taxes have been provided for on interest and dividend
income earned on foreign investments in accordance with the applicable
country's tax rates and to the extent unrecoverable are recorded as a
reduction of investment income. Distributions to shareholders are recorded on
the ex-dividend or ex-interest date.
The Fund distinguishes between distributions on a tax basis and a financial
reporting basis and requires that only distributions in excess of tax basis
earnings and profits are reported in the financial statements as a return of
capital. Differences in the recognition or classification of income between
the financial statements and tax earnings and profits which result in
temporary over-distributions for financial statement purposes, are
classified as distributions in
29
<PAGE>
Notes to Financial Statements - continued
excess of net investment income or accumulated net realized gains. During the
year ended September 30, 1995, $3,045,179 was reclassified from accumulated
undistributed net realized gain on investments to accumulated undistributed
net investment income due to differences between book and tax accounting for
government-backed securities and currency transactions. This change had no
effect on the net assets or net asset value per share.
Multiple Classes of Shares of Beneficial Interest - The Fund offers Class A,
Class B, and Class C shares. The three classes of shares differ in their
respective shareholder servicing agent, distribution and service fees. All
shareholders bear the common expenses of the Fund pro rata based on the
average daily net assets of each class, without distinction between share
classes. Dividends are declared separately for each class. No class has
preferential dividend rights; differences in per share dividend rates are
generally due to differences in separate class expenses.
(3) Transactions with Affiliates
Investment Adviser - The Fund has an investment advisory agreement with
Massachusetts Financial Services Company (MFS) to provide overall investment
advisory and administrative services, and general office facilities. The
management fee is computed daily and paid monthly at an effective annual rate
of 0.22% of average daily net assets and 3.09% of net investment income.
The Fund pays no compensation directly to its Trustees who are officers of
the investment adviser, or to officers of the Fund, all of whom receive
remuneration for their services to the Fund from MFS. Certain of the officers
and Trustees of the Fund are officers or directors of MFS, MFS Fund
Distributors, Inc. (MFD) and MFS Service Center, Inc. (MFSC). The Fund has an
unfunded defined benefit plan for all of its independent Trustees and Mr.
Bailey. Included in Trustees' compensation is a net periodic pension expense
of $27,090 for the year ended September 30, 1995.
Distributor - MFD, a wholly owned subsidiary of MFS, as distributor, received
$862,946 for the year ended September 30, 1995, as its portion of the sales
charge on sales of Class A shares of the Fund.
The Trustees have adopted separate distribution plans for Class A, Class B
and Class C shares pursuant to Rule 12b-1 of the Investment Company Act of
1940 as follows:
The Class A distribution plan provides that the Fund will pay MFD up to 0.35%
per annum of its average daily net assets attributable to Class A shares in
order that MFD may pay expenses on behalf of the Fund related to the
distribution and servicing of its shares. These expenses include a service
fee to each securities dealer that enters into a sales agreement with MFD of
up to 0.25% per annum of the Fund's average daily net assets attributable to
Class A shares which are attributable to that securities dealer, a
distribution fee to MFD of up to 0.10% per annum of the Fund's average daily
net assets attributable to Class A shares, commissions to
30
<PAGE>
Notes to Financial Statements - continued
dealers and payments to MFD wholesalers for sales at or above a certain
dollar level, and other such distribution-related expenses that are approved
by the Fund. MFD retains the service fee for accounts not attributable to a
securities dealer which amounted to $703,057 for the year ended September 30,
1995. MFD is waiving the 0.10% distribution fee for an indefinite period.
Fees incurred under the distribution plan during the year ended September 30,
1995 were 0.25% of average daily net assets attributable to Class A shares on
an annualized basis.
The Class B and Class C distribution plans provide that the Fund will pay MFD
a distribution fee of 0.75% per annum, and a service fee of up to 0.25% per
annum, of the Fund's average daily net assets attributable to Class B and
Class C shares. MFD will pay to securities dealers that enter into a sales
agreement with MFD all or a portion of the service fee attributable to Class
B and Class C shares, and will pay to such securities dealers all of the
distribution fee attributable to Class C shares. The service fee is intended
to be additional consideration for services rendered by the dealer with
respect to Class B and Class C shares. MFD retains the service fee for
accounts not attributable to a securities dealer, which amounted to $97,899
and $535 for Class B and Class C shares, respectively, for the year ended
September 30, 1995. Fees incurred under the distribution plans during the
year ended September 30, 1995 were 1.00% of average daily net assets
attributable to Class B and Class C shares on an annualized basis.
A contingent deferred sales charge is imposed on shareholder redemptions of
Class A shares, on purchases of $1 million or more, in the event of a
shareholder redemption within twelve months following the share purchase. A
contingent deferred sales charge is imposed on shareholder redemptions of
Class B shares in the event of a shareholder redemption within six years of
purchase. MFD receives all contingent deferred sales charges.
Contingent deferred sales charges imposed during the year ended September 30,
1995 were $27,736 and $1,756,259 for Class A and Class B shares,
respectively.
Shareholder Servicing Agent - MFSC, a wholly owned subsidiary of MFS, earns a
fee for its services as shareholder servicing agent. The fee is calculated as
a percentage of the average daily net assets of each class of shares at an
effective annual rate of up to 0.15%, up to 0.22%, and up to 0.15%
attributable to Class A, Class B, and Class C shares, respectively.
31
<PAGE>
Notes to Financial Statements - continued
(4) Portfolio Securities
Purchases and sales of investments, other than purchased option transactions
and short-term obligations, were as follows:
Purchases Sales
- --------------------------------------------------------------------------------
U.S. government securities $1,131,816,758 $1,213,055,715
============= =============
Investments (non-U.S. government securities) $1,875,901,630 $1,291,206,317
============= =============
The cost and unrealized appreciation or depreciation in value of the
investments owned by the Fund, as computed on a federal income tax basis, are
as follows:
Aggregate cost $2,746,941,281
=============
Gross unrealized appreciation $ 540,958,801
Gross unrealized depreciation 18,355,962
-------------
Net unrealized appreciation $ 522,602,839
=============
(5) Shares of Beneficial Interest
The Fund's Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest (without par
value). Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
Class A Shares Year Ended September 30, 1995 Year Ended September 30, 1994
--------------------------------- -----------------------------------
Shares Amount Shares Amount
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 27,571,191 $ 366,257,248 32,302,120 $ 426,179,879
Shares issued to
shareholders in
reinvestment of
distributions 5,805,766 77,216,013 6,185,236 80,887,784
Shares reacquired (23,436,000) (309,567,243) (17,636,558) (231,605,258)
------------- ------------- ------------- --------------
Net increase 9,940,957 $ 133,906,018 20,850,798 $ 275,462,405
============= ============= ============= ==============
Class B Shares Year Ended September 30, 1995 Year Ended September 30, 1994
--------------------------------- -----------------------------------
Shares Amount Shares Amount
- -----------------------------------------------------------------------------------------------
Shares sold 17,488,663 $ 232,234,181 33,915,337 $ 447,401,529
Shares issued to
shareholders in
reinvestment of
distributions 2,308,539 30,683,046 2,174,267 28,427,804
Shares reacquired (16,113,302) (214,915,122) (9,135,051) (119,551,014)
------------- ------------- ------------- --------------
Net increase 3,683,900 $ 48,002,105 26,954,553 $ 356,278,319
============= ============= ============= ==============
Class C Shares Year Ended September 30, 1995 Year Ended September 30, 1994
--------------------------------- -----------------------------------
Shares Amount Shares Amount
- -----------------------------------------------------------------------------------------------
Shares sold 1,619,700 $ 22,090,157 123,851 $ 1,598,651
Shares issued to
shareholders in
reinvestment of
distributions 20,825 285,948 178 2,294
Shares reacquired (163,091) (2,194,980) (24,211) (311,620)
------------- ------------- ------------- --------------
Net increase 1,477,434 $ 20,181,125 99,818 $ 1,289,325
============= ============= ============= ==============
</TABLE>
* For the period from commencement of offering of Class C shares, August 1,
1994 to September 30, 1994.
32
<PAGE>
Notes to Financial Statements - continued
(6) Line of Credit
The Fund entered into an agreement which enables it to participate with other
funds managed by MFS in an unsecured line of credit with a bank which permits
borrowings up to $350 million, collectively. Borrowings may be made to
temporarily finance the repurchase of Fund shares. Interest is charged to
each fund, based on its borrowings, at a rate equal to the bank's base rate.
In addition, a commitment fee, based on the average daily unused portion of
the line of credit, is allocated among the participating funds at the end of
each quarter. The commitment fee allocated to the Fund for the year ended
September 30, 1995 was $42,229.
(7) Financial Instruments
The Fund regularly trades financial instruments with off-balance sheet risk
in the normal course of its investing activities in order to manage exposure
to market risks such as interest rates and foreign currency exchange rates.
These financial instruments include written options, forward foreign currency
exchange contracts and futures contracts. The notional or contractual amounts
of these instruments represent the investment the Fund has in particular
classes of financial instruments and does not necessarily represent the
amounts potentially subject to risk. The measurement of the risks associated
with these instruments is meaningful only when all related and offsetting
transactions are considered. At September 30, 1995, the Fund did not hold any
of these financial instruments.
(8) Restricted Securities
The Fund may invest not more than 15% of its net assets in securities which
are subject to legal or contractual restrictions on resale. At September 30,
1995, the Fund owned the following restricted securities (constituting 4.75%
of net assets) which may not be publicly sold without registration under the
Securities Act of 1933 (the 1933 Act). The Fund does not have the right to
demand that such securities be registered. The value of these securities is
determined by valuations supplied by a pricing service or brokers or, if not
available, in good faith by or at the direction of the Trustees. Certain of
these securities may be offered and sold to "qualified institutional buyers"
under Rule 144A of the 1933 Act.
<TABLE>
<CAPTION>
Share/
Description Date of Acquisition Par Amount Cost Value
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Aktiebolaget, 0s, 2002+ 5/12/92-5/13/92 18,100,000 $12,152,460 $13,653,509
Altera Corp., 5.75s, 2002+ 6/16/95 1,400,000 1,400,000 1,967,000
Cemex S.A., 4.25s, 1997+ 9/28/94 5,500,000 5,500,000 4,585,625
Ciba-Geigy Corp., 6.25s, 2016+ 11/12/91-1/22/92 1,600,000 2,068,000 1,584,000
Cointel, 7%+ 2/24/94-2/24/95 299,800 20,809,350 14,727,675
Den Danske Bank, 7.25s, 2005+ 6/14/95 5,000,000 4,995,550 5,022,350
</TABLE>
+SEC Rule 144A restriction.
33
<PAGE>
Notes to Financial Statements - continued
Restricted Securities -- continued
<TABLE>
<CAPTION>
Share/
Description Date of Acquisition Par Amount Cost Value
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Financiera Energetica Nacional S.A.,
6.625s, 1996+ 3/22/95-3/23/95 5,360,000 $ 5,209,062 $ 5,319,800
Four Seasons Hotels, Inc., 9.125s,
2000+ 6/23/93 1,000,000 959,100 973,750
Grand Metropolitan, 6.5s, 2000+ 4/19/95 3,000,000 3,000,000 3,393,750
Hidroelectrica Alicura, 8.375s, 1999+ 4/08/95 6,244,000 5,849,829 5,619,600
Jet Equipment Trust, 10.91s, 2006+ 4/07/95-4/18/95 7,488,695 7,941,794 8,443,204
Jet Equipment Trust, 9.71s, 2014+ 7/19/95 2,000,000 2,000,000 2,104,780
Jet Equipment Trust, 10.69s, 2015+ 4/07/95 1,250,000 1,250,000 1,398,275
Merrill Lynch Home Equity Loan, 91-1,
"B", 9.3s, 2016 12/16/92 3,800,000 3,814,250 3,923,500
Merrill Lynch Mortgage Investors, Inc.,
8.227s, 2021 6/22/94 4,000,000 2,772,500 3,024,640
National Semiconductor, 6.5s, 2002+ 9/22/95 2,000,000 2,000,000 2,000,000
Occidental Petroleum Corp., 7.75%+ 2/11/93 140,000 7,065,000 8,050,000
Ocensa, 9.35s, 2005+ 6/21/95 3,500,000 3,500,000 3,517,500
Owens Corning Capital LLC, 6.5%+ 9/06/95 55,000 3,180,622 3,245,000
Owens Corning Fiberglass Corp., 9.9s,
2015+ 4/05/95 2,500,000 2,500,000 2,757,092
Petronas Malaysia, 6.875s, 2003+ 6/22/93 1,000,000 1,000,000 1,002,080
Qantas Airways Ltd., 7.5s, 2003+ 6/24/93 5,000,000 4,998,820 5,067,700
Roche Holdings, Inc., 0s, 2008+ 9/16/93 32,500,000 17,660,890 23,887,500
Roche Holdings, Inc., 0s, 2010+ 4/12/95 19,770,000 7,263,843 7,932,712
Salton Sea Funding Corp., 7.37s, 2005+ 7/18/95 5,250,000 5,250,000 5,267,850
Salton Sea Funding Corp., 7.84s, 2010+ 7/18/95 5,250,000 5,250,000 5,248,215
Sandoz, 2s, 2002+ 9/28/95 2,240,000 1,818,208 1,818,208
Staples, Inc., 4.5s, 2000+ 9/12/95 500,000 500,000 521,250
Turner Broadcasting Systems, Inc., 0s,
2007+ 12/18/92-3/08/93 3,000,000 1,282,724 1,342,500
U.S. Filter Corp., 6s, 2005+ 9/13/95 2,000,000 2,000,000 2,202,500
Weirton Steel Corp., 10.75s, 2005+ 6/05/95 1,750,000 1,723,750 1,618,750
Williams Cos., Inc., 7%+ 4/03/95 58,000 2,900,000 3,994,750
-----------
$155,215,065
===========
</TABLE>
+SEC Rule 144A restriction.
34
<PAGE>
Independent Auditors' Report
To the Trustees of MFS Series Trust V and Shareholders of MFS Total Return
Fund:
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of MFS Total Return Fund (one of the
series constituting MFS Series Trust V) as of September 30, 1995, the related
statement of operations for the year then ended, the statement of changes in
net assets for the years ended September 30, 1995 and 1994, and the financial
highlights for each of the years in the ten-year period ended September 30,
1995. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of the
securities owned at September 30, 1995 by correspondence with the custodian
and brokers; where replies were not received from brokers, we performed other
auditing procedures. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of MFS Total Return
Fund at September 30, 1995, the results of its operations, the changes in its
net assets, and its financial highlights for the respective stated periods in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
November 3, 1995
----------
This report is prepared for the general information of shareholders. It is
authorized for distribution to prospective investors only when preceded or
accompanied by a current prospectus.
35
<PAGE>
MFS Investment Opportunities
Mutual Funds
The MFS Family of Funds(R), shown on the facing page, falls into the eight
general categories below. All offer full-time professional management, a
diversified portfolio, and a wide array of shareholder services.
Stock funds seek growth of capital rather than income through investments in
stocks.
Stock and bond funds seek current income and growth of capital through
investments in both stocks and bonds.
Bond funds seek current income through investments in debt securities.
World funds seek stock, balanced, and bond fund objectives through
investments in U.S. and foreign stocks and bonds.
Limited-maturity bond funds seek current income and preservation of capital
through investments in debt securities with remaining maturities of five
years or less.
National tax-free bond funds seek current income exempt from federal income
tax through investments in debt securities issued by states and
municipalities.(1)
State tax-free bond funds seek current income exempt from federal and state
income taxes through investments in debt securities issued by a single state
and its municipalities.(1)
Money market funds seek preservation of capital and current income through
investments in short-term debt securities.(2)
To determine which MFS fund may be appropriate for you, please contact your
financial adviser, who can help you relate these investment opportunities to
your financial goals. If you prefer, you may call MFS Investor Information
for literature(3) on MFS products and services: 1-800-637-2929, from 9 a.m.
to 5 p.m. Eastern time any business day (leave a message anytime).
(1) A small portion of the income may be subject to federal, state and/or
alternative minimum tax.
(2) Investments in money market funds are not issued or guaranteed by the
U.S. government and there is no assurance that the fund will be able to
maintain a stable net asset value.
(3) Including a prospectus containing more complete information including
charges and expenses. Read the prospectus carefully before investing.
36
<PAGE>
The MFS Family of Funds(R)
America's Oldest Mutual Fund Group
The members of the MFS Family of Funds are grouped below according to the
types of securities in their portfolios. For free prospectuses containing
more complete information, including the exchange privilege and all charges
and expenses, please contact your financial adviser or call MFS at
1-800-637-2929 any business day from 9 a.m. to 5 p.m. Eastern time (or, leave
a message any time). This material should be read carefully before investing
or sending money.
Stock
- --------------------------------------------
Massachusetts Investors Trust
Massachusetts Investors Growth Stock Fund
MFS(R) Capital Growth Fund
MFS(R) Emerging Growth Fund
MFS(R) Gold & Natural Resources Fund
MFS(R) Growth Opportunities Fund
MFS(R) Managed Sectors Fund
MFS(R) OTC Fund
MFS(R) Research Fund
MFS(R) Value Fund
Stock and Bond
- --------------------------------------------
MFS(R) Total Return Fund
MFS(R) Utilities Fund
Bond
- --------------------------------------------
MFS(R) Bond Fund
MFS(R) Government Mortgage Fund
MFS(R) Government Securities Fund
MFS(R) High Income Fund
MFS(R) Intermediate Income Fund
MFS(R) Strategic Income Fund
(formerly MFS(R) Income & Opportunity Fund)
- --------------------------------------------
Limited Maturity Bond
- --------------------------------------------
MFS(R) Government Limited Maturity Fund
MFS(R) Limited Maturity Fund
MFS(R) Municipal Limited Maturity Fund
World
- --------------------------------------------
MFS(R) World Asset Allocation Fund
MFS(R) World Equity Fund
MFS(R) World Governments Fund
MFS(R) World Growth Fund
MFS(R) World Total Return Fund
National Tax-Free Bond
- --------------------------------------------
MFS(R) Municipal Bond Fund
MFS(R) Municipal High Income Fund
(closed to new investors)
MFS(R) Municipal Income Fund
State Tax-Free Bond
- --------------------------------------------
Alabama, Arkansas, California, Florida,
Georgia, Louisiana, Maryland, Massachusetts,
Mississippi, New York, North Carolina,
Pennsylvania, South Carolina, Tennessee,
Texas, Virginia, Washington, West Virginia
Money Market
- --------------------------------------------
MFS(R) Cash Reserve Fund
MFS(R) Government Money Market Fund
MFS(R) Money Market Fund
- --------------------------------------------
