<PAGE>
MFS RESEARCH FUND
(A SERIES OF MFS SERIES TRUST V)
500 BOYLSTON STREET o BOSTON o MASSACHUSETTS 02116-3741
617 o 954-5000
November 22, 1995
VIA EDGAR
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, DC 20549
Re: MFS Series Trust V (File No. 811-2031), on Behalf of MFS Research Fund
Ladies and Gentlemen:
Pursuant to the requirements of Section 30(b) of the Investment Company Act of
1940 and Rule 30b2-1 thereunder, we hereby file a copy of the Annual Report to
Shareholders dated September 30, 1995 of MFS Research Fund.
Very truly yours,
LORRAINE K. GRIP
Lorraine K. Grip
Senior Production Editor
\lkg
<PAGE>
[LOGO] MFS [R] Annual Report for
THE FIRST NAME IN MUTUAL FUNDS Year Ended
September 31, 1995
MFS [R] Research Fund
[A photo of computer disks.]
<PAGE>
[LOGO] MFS [R] RESEARCH FUND
TRUSTEES
A. Keith Brodkin* - Chairman and President
Richard B. Bailey* - Private Investor;
Former Chairman and Director (until 1991),
Massachusetts Financial Services Company; Director, Cambridge Bancorp;
Director, Cambridge Trust 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
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
INVESTOR INFORMATION
For MFS stock and bond market outlooks, call toll free: 1-800-637-4458 anytime
from a touch-tone telephone.
For information on MFS mutual funds, call your financial adviser or, for an
information kit, call toll free: 1-800-637-2929 any business day from 9 a.m. to
5 p.m. Eastern time (or leave a message anytime).
Investor Service
MFS Service Center, Inc.
P.O. Box 2281
Boston, MA 02107-9906
For general information, call toll free:
1-800-225-2606 any business day from
8 a.m. to 8 p.m. Eastern time.
For service to speech- or hearing-impaired, call toll free: 1-800-637-6576 any
business day from 9 a.m. to 5 p.m. Eastern time. (To use this service, your
phone must be equipped with a Telecommunications Device for the Deaf.)
For share prices, account balances and exchanges, call toll free: 1-800-MFS-TALK
(1-800-637-8255) anytime from a touch-tone telephone.
TOP-RATED SERVICE
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 responded, 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:
For the year ended September 30, 1995, Class A shares of the Fund experienced a
total return of +24.49%, Class B shares +23.55%, and Class C shares +23.58%,
while the Standard &Poor's 500 Composite Index (the S&P 500), a popular,
unmanaged index of common stock performance, reported a total return of +29.71%.
All of the Fund's returns assume the reinvestment of distributions but exclude
the effects of any sales charges. Strong performance by the technology and
financial services sectors helped the Fund during the year, although some of
those gains were offset by underperformance in the cellular telephone and health
care industries. A further 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, homebuying was
making modest gains by September 30, although consumer spending was still
showing some areas of weakness. Businesses, meanwhile, continued to work off
excess in ventories 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 consume rs 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.
Stock Market
For a number of growth sectors, such as technology, leisure and household
products, the longer-term outlook remains favorable, as do the prospects for
many small-company stocks because of their growth potential relative to larger
companies. Also, companies' increasing emphasis on cost-containment, coupled
with their growing use of technology, has 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 goal
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.
1
<PAGE>
LETTER TO SHAREHOLDERS - continued
Portfolio Performance and Strategy
The underperformance of the Fund was primarily due to three factors. First, the
portfolio's holdings in the cellular telephone industry underperformed, due to
changing market conditions related to the acquisition of Lin
Broadcasting by AT&T. This acquisition caused a reassessment of the value of
cellular licenses, and the Fund's holdings in this sector have been reduced in
the past year. Second, the Fund's holdings in the health care sector, primarily
in health maintenance organizations, underperformed the market, due to increased
price competition in some regional markets. However, we increased the Fund's
holdings in this area, due to our confidence in the long-term growth potential
of the diversified and well-managed companies in this industry. Stocks purchased
in this category include United Healthcare and Pacificare. The third reason for
underperformance lies in the past year's stock market rally, which has been
concentrated in the largest-market capitalization companies (as represented by
the S&P 500), while the Fund is diversified among our committee of analysts' top
stock selections across all market capitalizations.
The Fund has been overweighted in the technology sector for the past 12
months and has benefited from the strong earnings of such companies as Intel,
Microsoft and Cadence Design. The financial services sector has benefited from
lower interest rates, strong earnings and improving valuations. In particular,
the Fund benefited from its holdings in PennCorp Financial, Advanta and Capital
One.
The Fund is currently overweighted in the technology, consumer staples and
health care sectors. We believe that selected companies in these groups will
continue to demonstrate strong earnings, despite the slowing economy. In
technology, our emphasis is on selected computer software companies, such as
Microsoft, Oracle and Informix, where we believe current profitability levels
are sustainable due to the proprietary nature of these companies' products. The
Fund is underweighted in the commodity-cyclical, automotive, transportation and
energy sectors, because we believe the slow economy will lead to earnings
disappointments for many of the companies in those groups.
2
<PAGE>
LETTER TO SHAREHOLDERS - continued
We appreciate your support and welcome any questions or
comments you may have.
Respectfully,
[A PHOTO OF A. KEITH BRODKIN, [A PHOTO OF KEVIN R. PARKE,
CHAIRMAN AND PRESIDENT] PORTFOLIO MANAGER]
/s/ A. Keith Brodkin /s/ Kevin R. Parke
A. Keith Brodkin Kevin R. Parke
Chairman and President Director of Research
October 12, 1995
The MFS Research Analysts are responsible for the day-to-day management of the
Fund under the general supervision of Mr. Parke.
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 100%.
Objective and Policies
The Fund's investment objective is to provide long-term growth of capital and
future income.
The Fund's policy is to invest a substantial proportion of its assets in common
stocks, or securities convertible into common stocks, of companies believed to
possess better-than-average prospects for long-term growth. A smaller proportion
of the assets may be invested in bonds, short-term obligations, preferred stocks
or common stocks whose principal characteristic is income production rather than
growth. The Fund may also invest in foreign securities.
3
<PAGE>
<TABLE>
PORTFOLIO CONCENTRATION
<CAPTION>
Percent of Percent of
Five Largest Industries Net Assets Ten Largest Holdings Net Assets
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Consumer Goods And Services 9.6 United Healthcare Corp. 1.9
Insurance 6.8 McDonnell Douglas Corp. 1.9
Medical And Health Technology And Services 6.5 Xilinx, Inc. 1.8
Computer Software - Systems 6.2 Intel 1.8
Electronics 4.7 Medisense, Inc. 1.7
International Business Machines Corp. 1.7
Kimberly Clark Corp. 1.6
Oracle Systems Corp. 1.6
Colgate-Palmolive Co. 1.5
Loral Corp. 1.5
</TABLE>
PERFORMANCE
The information below and on the following page illustrates the historical
performance of MFSResearch Fund Class A shares in comparison to various
market indicators. Fund results in the graph reflect the deduction of the
5.75% 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 September 7, 1993. Information on Class B
share performance appears on the next page.
Please note that effective January 3, 1994, Class C shares were offered.
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]
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 three lines drawn to scale. One is a solid line representing MFS
Research Fund (Class A), a second line of short dashes represents the S&P 500,
and a third line of medium-short dashes represents the Consumer Price Index.
MFS Research Fund (Class A) $22,840
S&P 500 $22,115
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]
Line graph representing the growth of a $10,000 investment for the ten-year
period ended September 30, 1995. The graph is caled from $0 to $50,000 in
$10,000 segments. The years are marked in 12-month segments from 1985 to 1995.
There are three lines drawn to scale. One is a solid line representing MFS
Research Fund (Class A), a second line of short dashes represents the S&P 500,
and a third line of medium-short dashes represents the Consumer Price Index.
MFS Research Fund (Class A) $44,171
S&P 500 $40,154
Consumer Price Index $14,143
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MFS Research Fund (Class A) Including
5.75% Sales Charge +17.32% +17.49% +17.96% +14.92%
MFS Research Fund (Class A) At Net
Asset Value +24.49% +19.82% +19.37% +15.60%
MFS Research Fund (Class B) With CDSC* +19.55% -- -- +14.83%**
MFS Research Fund (Class B) Without CDSC +23.55% -- -- +16.49%**
MFS Research Fund (Class C) +23.58% -- -- +15.79%#
Average Capital Appreciation Fund +25.22% +15.93% +17.83% +13.76%
Average Growth And Income Fund +23.06% +13.65% +15.95% +13.62%
Standard & Poor's 500 Composite Index +29.71% +14.96% +17.20% +16.01%
Consumer Price Index## +2.54% +2.73% +2.91% +3.53%
<FN>
*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, September 7, 1993 to September 30, 1995.
#For the period from the commencement of offering of Class C shares, January 3, 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.
##The Consumer Price Index is a popular measure of change in prices.
</FN>
</TABLE>
5
<PAGE>
AVERAGE ANNUAL TOTAL RETURNS - continued
In the table on the previous page, we have included the average annual total
returns of all growth and income funds (including the Fund) (394, 241, 186 and
116 funds) as well as all capital appreciation funds (152, 98, 85 and 49 funds)
tracked by Lipper Analytical Services, Inc. (an independent firm which rates
mutual fund performance) 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 share 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. The subsidy may be rescinded by MFS at any time.
6
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS - September 30, 1995
Common Stocks - 96.5%
================================================================================
ISSUER SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
U.S. Common Stocks - 91.1%
Aerospace - 3.3%
Lockheed-Martin Corp. 105,800 $ 7,101,825
McDonnell Douglas Corp. 161,150 13,335,163
United Technologies Corp. 33,000 2,916,375
-----------
$23,353,363
- --------------------------------------------------------------------------------
Agricultural Products - 2.6%
AGCO Corp. 173,400 $ 7,889,700
Case Corp. 288,700 10,609,725
-----------
$18,499,425
- --------------------------------------------------------------------------------
Airlines
Midwest Express Holdings, Inc.* 4,500 $ 101,250
- --------------------------------------------------------------------------------
Apparel And Textiles - 2.3%
Deckers Outdoor Corp.* 135,600 $ 1,101,750
Nike, Inc., "B" 66,000 7,334,250
Nine West Group, Inc.* 172,300 7,839,650
-----------
$16,275,650
- --------------------------------------------------------------------------------
Automotive - 0.2%
Jason, Inc.*# 187,500 $ 1,370,625
- --------------------------------------------------------------------------------
Banks And Credit Companies - 2.0%
Chase Manhattan Corp. 134,100 $ 8,196,863
Northern Trust Co. 134,100 6,168,600
-----------
$14,365,463
- --------------------------------------------------------------------------------
Business Machines - 2.5%
Affiliated Computer Co.* 82,500 $ 2,413,125
International Business Machines Corp. 124,900 11,787,438
Motorola, Inc. 46,900 3,581,987
-----------
$17,782,550
- --------------------------------------------------------------------------------
Business Services - 2.2%
Ceridian Corp.* 208,200 $ 9,238,875
Interim Services, Inc.* 123,900 3,345,300
Technology Solutions Co.* 168,300 3,029,400
-----------
$15,613,575
- --------------------------------------------------------------------------------
Cellular Phones - 1.0%
Cellular Communications of Puerto Rico* 126,416 $ 3,855,688
Telephone & Data Systems, Inc. 73,300 3,078,600
-----------
$ 6,934,288
- --------------------------------------------------------------------------------
CHEMICALS - 2.8%
Air Products & Chemicals, Inc. 66,000 $ 3,440,250
Grace (W.R.) & Co. 152,600 10,186,050
Hanna (M.A.) Co. 77,850 2,053,294
Uniroyal Chemical Corp.* 430,800 3,877,200
-----------
$19,556,794
- --------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS - continued
Common Stocks - continued
================================================================================
ISSUER SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
U.S. Common Stocks - Continued
Computer Software - Personal Computers - 2.9%
Electronic Arts, Inc.* 162,700 $ 5,979,225
Learning Co.* 65,100 3,938,550
Microsoft Corp.* 100,600 9,104,300
Network Peripherals* 112,900 1,778,175
-----------
$20,800,250
- --------------------------------------------------------------------------------
Computer Software - Systems - 6.2%
Adobe Systems, Inc. 73,400 $ 3,798,450
Cadence Design Systems, Inc.* 254,100 9,973,425
Compaq Computer Corp.* 114,100 5,519,588
Compuware Corp.* 175,400 3,858,800
Informix Corp.* 237,700 7,725,250
Oracle Systems Corp.* 293,750 11,272,656
Sybase, Inc.* 62,100 1,994,962
-----------
$44,143,131
- --------------------------------------------------------------------------------
Construction Services - 0.9%
Champion International Corp. 120,500 $ 6,491,938
- --------------------------------------------------------------------------------
Consumer Goods And Services - 9.6%
Colgate-Palmolive Co. 160,700 $10,706,638
Duracell International, Inc. 163,300 7,328,087
Gillette Co. 177,200 8,439,150
Leggett & Platt, Inc. 76,200 1,876,425
Philip Morris Cos., Inc. 120,700 10,078,450
Procter & Gamble Co. 134,800 10,379,600
RJR Nabisco Holdings Corp. 230,540 7,463,733
Service Corporation International 116,300 4,550,238
Tyco International Ltd. 118,800 7,484,400
-----------
$68,306,721
- --------------------------------------------------------------------------------
Defense Electronics - 1.5%
Loral Corp. 189,200 $10,784,400
- --------------------------------------------------------------------------------
Electronics - 4.7
Intel Corp. 212,100 $12,752,512
LSI Logic Corp.* 65,400 3,776,850
National Semiconductor Corp.* 134,500 3,715,562
Xilinx, Inc.* 272,900 13,133,312
-----------
$33,378,236
- --------------------------------------------------------------------------------
Entertainment - 2.7%
Aztar Corp.* 624,400 $ 5,229,350
Boyd Gaming Corp.* 9,200 137,402
Harrah's Entertainment, Inc.* 242,000 7,078,500
Showboat, Inc. 281,500 6,087,438
Starsight Telecast, Inc.* 150,000 562,500
-----------
$19,095,190
- --------------------------------------------------------------------------------
Financial Institutions - 1.5%
Advanta Corp., "B" 148,000 $6,290,000
Integra Financial Corp. 74,600 4,336,125
-----------
$10,626,125
- --------------------------------------------------------------------------------
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS - continued
Common Stocks - continued
================================================================================
ISSUER SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
U.S. Common Stocks - Continued
Food And Beverage Products - 4.5%
CPC International, Inc. 106,300 $ 7,015,800
Kellogg Co. 93,300 6,752,588
PepsiCo, Inc. 159,000 8,109,000
Pioneer Hi-Bred International, Inc. 129,800 5,970,800
Universal Foods Corp. 116,100 4,048,987
-----------
$31,897,175
- --------------------------------------------------------------------------------
Forest And Paper Products - 2.5%
International Paper Co. 140,400 $ 5,896,800
Kimberly Clark Corp. 174,400 11,706,600
-----------
$17,603,400
- --------------------------------------------------------------------------------
Insurance - 6.8%
AFLAC, Inc. 115,100 $ 4,776,650
American Re Corp. 153,100 5,894,350
CIGNA Corp. 70,200 7,309,575
Equitable of Iowa Cos 193,300 7,152,100
MBIA, Inc. 103,000 7,261,500
Penncorp Financial Group, Inc. 417,100 9,958,263
Travelers, Inc. 109,700 5,827,812
-----------
$48,180,250
- --------------------------------------------------------------------------------
Machinery - 0.5%
IDEX Corp. 18,000 $ 643,500
York International Corp. 74,100 3,121,463
-----------
$ 3,764,963
- --------------------------------------------------------------------------------
Medical And Health Products - 4.1%
Johnson & Johnson 40,100 $ 2,972,412
Medisense, Inc.* 500,400 12,072,150
Pfizer, Inc. 79,000 4,216,625
Uromed Corp.* 755,500 7,555,000
Zoll Medical Corp.* 208,100 1,950,938
-----------
$28,767,125
- --------------------------------------------------------------------------------
Medical And Health Technology And ServiceS - 6.5%
Community Health Systems* 90,100 $ 3,637,788
Integrated Health Services, Inc. 54,000 1,525,500
Living Centers of America* 96,300 3,201,975
Mariner Health Group, Inc.* 100,200 1,415,325
Pacificare Health Systems, Inc., "A"* 9,800 641,900
Pacificare Health Systems, Inc., "B"* 99,100 6,738,800
Renal Treatment Centers, Inc.* 134,000 4,958,000
St. Jude Medical, Inc.* 156,100 9,873,325
United Healthcare Corp. 286,500 14,002,687
-----------
$45,995,300
- --------------------------------------------------------------------------------
Oil Services - 0.5%
BJ Services Co.* 144,400 $3,646,100
- --------------------------------------------------------------------------------
Oils - 2.0%
Mitchell Energy & Development Corp. 268,300 $ 4,728,788
Mobil Corp. 96,300 9,593,887
-----------
$14,322,675
- --------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS - continued
Common Stocks - continued
================================================================================
ISSUER SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
U.S. Common Stocks - Continued
Pollution Control - 1.2%
WMX Technologies, Inc. 282,400 $ 8,048,400
Western Waste Industries* 36,400 728,000
------------
$ 8,776,400
- --------------------------------------------------------------------------------
Railroads - 1.1%
Wisconsin Central Transportation Corp.* 117,500 $ 7,843,125
- --------------------------------------------------------------------------------
Restaurants And Lodging - 2.3%
Applebee's International, Inc. 103,100 $ 2,809,475
Buffets, Inc.* 77,800 972,500
HFS, Inc.* 44,300 2,320,212
Hammons (John Q) Hotels, Inc.* 25,700 330,888
Lone Star Steakhouse and Saloon, Inc.* 67,000 2,747,000
Promus Hotel Corp.* 149,750 3,406,813
Quantum Restaurant Group, Inc.* 100,000 1,337,500
Sonic Corp.* 100,350 2,282,962
------------
$ 16,207,350
- --------------------------------------------------------------------------------
Special Products And Services - 2.4%
Intertape Polymer Group, Inc. 211,800 $ 6,195,150
Sphere Drake Holdings Ltd. 246,800 3,702,000
Stanley Works 164,300 7,126,513
------------
$ 17,023,663
- --------------------------------------------------------------------------------
Stores - 3.2%
Circuit City Stores, Inc. 203,000 $ 6,419,875
Dayton-Hudson Corp. 95,100 7,215,713
Lowe's Companies, Inc. 94,200 2,826,000
Office Depot, Inc.* 208,100 6,269,012
------------
$ 22,730,600
- --------------------------------------------------------------------------------
Telecommunications - 1.8%
Cabletron Systems, Inc.* 119,900 $ 7,898,412
Rogers Communications, Inc., "B"* 519,600 5,130,167
------------
$ 13,028,579
- --------------------------------------------------------------------------------
Utilities - Electric
Sithe Energies, Inc.* 24,200 $ 193,600
- --------------------------------------------------------------------------------
Utilities - Gas - 1.8%
Coastal Corp. 211,700 $ 7,118,412
Enron Corp. 179,400 6,009,900
------------
$ 13,128,312
- --------------------------------------------------------------------------------
Utilities - Telephone - 1.0%
MCI Communications Corp. 273,700 $ 7,133,306
- --------------------------------------------------------------------------------
Total U.S. Common Stocks (Identified Cost, $528,360,997) $647,720,897
- --------------------------------------------------------------------------------
Foreign Stocks - 5.4%
Denmark - 0.4%
Tele Danmark, ADR (Utilities - Telephone) 110,500 $ 2,859,188
- --------------------------------------------------------------------------------
Finland - 0.5%
Nokia, AB (Telecommunications Equipment) 48,800 $ 3,425,921
- --------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS - continued
Common Stocks - continued
================================================================================
ISSUER SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
Foreign Stocks - Continued
France - 0.8%
Pinault-Printemps (Retail) 27,000 $ 5,722,288
- --------------------------------------------------------------------------------
Italy - 0.7%
Telecom Italia (Telecommunications) 2,110,200 $ 2,761,197
Telecom Italia Mobile SpA (Telecommunications) 2,110,200 2,329,240
------------
$ 5,090,437
- --------------------------------------------------------------------------------
Malaysia - 0.5%
New Straits Times Press (Publishing) 1,280,000 $ 3,614,848
- --------------------------------------------------------------------------------
Sweden - 2.3%
Astra AB, Free Shares, "B"
(Medical and Health Products) 254,960 $ 8,964,904
Hennes & Mauritz, "B" (Retail) 116,900 7,513,351
------------
$ 16,478,255
- --------------------------------------------------------------------------------
United Kingdom - 0.2%
Invesco Fund Managers (Finance) 429,200 $ 1,498,466
- --------------------------------------------------------------------------------
Total Foreign Stocks (Identified Cost, $33,493,026) $ 38,689,403
- --------------------------------------------------------------------------------
Preferred Stocks - 0.3%
- --------------------------------------------------------------------------------
Cellular Communications, Inc., Cv.
(IDENTIFIED COST, $1,224,813) 44,000 $ 2,398,000
- --------------------------------------------------------------------------------
Total Common Stocks (Identified Cost, $563,078,836) $688,808,300
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Short-Term Obligations - 3.5%
- --------------------------------------------------------------------------------
PRINCIPAL AMOUNT
ISSUER (000 OMITTED) VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
Federal Home Loan Bank, due 10/25/95 $ 7,000 $ 6,972,876
Federal National Mortgage Association, due 10/03/95 3,355 3,353,434
Federal National Mortgage Association, due 10/05/95 5,000 4,996,111
Ford Motor Credit, due 10/02/95 8,850 8,846,803
GTE South, Inc., due 10/04/95 1,045 1,044,333
- --------------------------------------------------------------------------------
Total Short-term Obligations, At Amortized Cost And Value $ 25,213,557
Total Investments (Identified Cost, $588,292,393) $714,021,857
Other Assets, Less Liabilities - (0.3%) (2,383,923)
- --------------------------------------------------------------------------------
NET ASSETS - 100.0% $711,637,934
- --------------------------------------------------------------------------------
<FN>
+ Restricted security.
* Non-income producing security.
# Security priced by management.
</FN>
</TABLE>
See notes to financial statements
11
<PAGE>
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Statement of Assets and Liabilities
================================================================================
September 30, 1995
- --------------------------------------------------------------------------------
<S> <C>
ASSETS:
Investments, at value (identified cost, $588,292,393) $714,021,857
Cash 15,718
Receivable for investments sold 4,892,389
Receivable for Fund shares sold 5,257,943
Dividends and interest receivable 982,322
Other assets 5,160
------------
Total assets $725,175,389
Liabilities:
Payable for investments purchased $12,730,698
Payable for Fund shares reacquired 377,003
Payable to affiliates -
Management fee 14,270
Shareholder servicing agent fee 4,332
Distribution fee 220,828
Accrued expenses and other liabilities 190,324
------------
Total liabilities $13,537,455
------------
Net Assets $711,637,934
============
Net Assets Consist Of:
Paid-in capital $537,626,146
Unrealized appreciation on investments and translation of
assets and liabilities in foreign currencies 125,730,254
Accumulated undistributed net realized gain on investments
and foreign currency transactions 46,863,005
Accumulated undistributed net investment income 1,418,529
------------
Total $711,637,934
============
Shares of Beneficial Interest Outstanding 45,769,252
============
Class A Shares:
Net Asset Value And Redemption Price Per Share
(net assets of $507,783,815 / 32,534,587 shares of
beneficial interest outstanding) $15.61
======
Offering Price Per Share (100/94.25) $16.56
======
Class B Shares:
Net Asset Value And Offering Price Per Share
(net assets of $178,116,815 / 11,565,395 shares of
beneficial interest outstanding) $15.40
======
Class C Shares:
Net Asset Value, Offering Price And Redemption Price Per Share
(net assets of $25,737,304 / 1,669,270 shares of
beneficial interest outstanding) $15.42
======
</TABLE>
On sales of $50,000 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
12
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Statement of Operations
================================================================================
Year Ended September 30, 1995
- --------------------------------------------------------------------------------
<S> <C>
Net Investment Income:
Income -
Dividends $ 5,521,009
Interest 1,763,021
Foreign taxes withheld (108,803)
------------
Total investment income $ 7,175,227
------------
Expenses -
Management fee $ 1,910,078
Trustees' compensation 34,491
Shareholder servicing agent fee (Class A) 566,439
Shareholder servicing agent fee (Class B) 177,743
Shareholder servicing agent fee (Class C) 17,241
Distribution and service fee (Class A) 1,312,892
Distribution and service fee (Class B) 807,085
Distribution and service fee (Class C) 114,386
Custodian fee 210,356
Postage 58,944
Printing 55,127
Auditing fees 36,800
Legal fees 11,405
Miscellaneous 265,798
------------
Total expenses $ 5,578,785
Reduction of expenses by distributor (377,515)
Fees paid indirectly (31,373)
------------
Net expenses $ 5,169,897
------------
Net investment income $ 2,005,330
------------
Realized and Unrealized Gain (Loss)on Investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $ 47,491,369
Foreign currency transactions (36,682)
------------
Net realized gain on investments $ 47,454,687
------------
Change in unrealized appreciation -
Investments $ 68,894,140
Translation of assets and liabilities in foreign currencies 201
------------
Net unrealized gain on investments $ 68,894,341
------------
Net realized and unrealized gain on
investments and foreign currency $116,349,028
------------
Increase in net assets from operations $118,354,358
============
</TABLE>
See notes to financial statements
13
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
Year Ended September 30, 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
Increase In Net Assets:
From operations -
Net investment income $ 2,005,330 $ 341,364
Net realized gain on investments and
foreign currency transactions 47,454,687 34,277,386
Net unrealized gain (loss) on investments
and foreign currency 68,894,341 (11,035,216)
---------- -----------
Increase in net assets from operations $118,354,358 $23,583,534
------------ -----------
Distributions declared to shareholders -
From net investment income (Class A) $ (481,316) $ (700,869)
From net investment income (Class B) (14,893) (1,857)
From net realized gain on investments and
foreign currency transactions (Class A) (820,736) (61,514,987)
From net realized gain on investments and
foreign currency transactions (Class B) (118,230) (2,437,162)
From net realized gain on investments and
foreign currency transactions (Class C) (16,120) (411,703)
In excess of net investment income (Class A) -- (72,504)
In excess of net investment income (Class B) -- (192)
----------- ------------
Total distributions declared
to shareholders $(1,451,295) $(65,139,274)
----------- ------------
Fund share (principal) transactions -
Net proceeds from sale of shares $353,872,982 $ 89,603,156
Net asset value of shares issued to
shareholders in reinvestment
of distributions 1,571,633 54,945,985
----------- ------------
Cost of shares reacquired (109,372,045) (48,796,609)
----------- ------------
Increase in net assets from
Fund share transactions $246,072,570 $ 95,752,532
----------- ------------
Total increase in net assets $362,975,633 $ 54,196,792
Net Assets:
At beginning of period 348,662,301 294,465,509
----------- ------------
At end of period (including accumulated
undistributed net investment income
(accumulated distributions in excess of
net investment income of $1,418,529 and
$(72,628), respectively) $711,637,934 $348,662,301
============ ============
</TABLE>
See notes to financial statements
14
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights
- -----------------------------------------------------------------------------------------------------------------------------------
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 $ 12.59 $ 14.47 $ 12.18 $ 11.84 $ 9.62
-------- -------- -------- -------- --------
Income from investment operations# -
Net investment income* $ 0.08 $ 0.02 $ 0.11 $ 0.07 $ 0.27
Net realized and unrealized gain on
investments and foreign currency
transactions 2.99 1.01 3.15 1.27 2.21
-------- -------- -------- -------- --------
Total from investment operations $ 3.07 $ 1.03 $ 3.26 $ 1.34 $ 2.48
-------- -------- -------- -------- --------
Less distributions declared to shareholders -
From net investment income $ (0.02) $ (0.03) $ (0.07) $ -- $ (0.26)
In excess of net realized gain on investments -- (0.01) -- -- --
From net realized gain on investments (0.03) (2.87) (0.90) (1.00) --
-------- -------- -------- -------- --------
Total distributions declared to
shareholders $ (0.05) $ (2.91) $ (0.97) $ (1.00) $ (0.26)
-------- -------- -------- -------- --------
Net asset value - end of period $ 15.61 12.59 $ 14.47 12.18 $ 11.84
-------- -------- -------- -------- --------
Total return++ 24.49% 7.72% 28.87% 11.79 25.87%
Ratios (to average net assets)/Supplemental data:
Expenses## 0.95% 0.91% 0.90% 0.84% 0.95%
Net investment income 0.58% 0.14% 0.36% 0.59% 2.48%
Portfolio turnover 94% 79% 93% 74% 177%
Net assets at end of period (000 omitted) $507,784 $318,170 $294,019 $240,366 $231,316
-------- -------- -------- -------- --------
<FN>
++Total returns for Class A shares do not include the applicable 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 fiscal years ending after September 1, 1995, the Fund's expenses are calculated without reduction for fees paid indirectly.
*The distributor did not impose a portion of its distribution fees for the periods indicated. If this fee had been incurred by the
Fund, the net investment income per share and the ratios would have been:
Net investment income# $ 0.07 $ 0.01 -- -- --
Ratios (to average net assets):
Expenses## 1.05% 1.01% -- -- --
Net investment income 0.48% 0.04% -- -- --
</FN>
</TABLE>
See notes to financial statements
15
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights - continued
- ------------------------------------------------------------------------------------------------------------------------------------
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 $ 11.49 $ 10.20 $ 12.54 $ 10.42 $ 10.36
Income from investment operations -
Net investment income $ 0.36 $ 0.39 $ 0.23 $ 0.19 $ 0.25
Net realized and unrealized gain (loss) on
investments and foreign currency
transactions (1.52) 2.30 (2.19) 4.43 2.50
-------- -------- -------- ------ --------
Total from investment operations $ (1.16) $ 2.69 $ (1.96) $ 4.62 $ 2.75
-------- -------- -------- ------ --------
Less distributions declared to shareholders -
From net investment income $ (0.36) $ (0.39) $ (0.24) $ (0.19) $ (0.24)
From net realized gain on investments (0.35)* (1.01) (0.14) (2.31) (2.45)
-------- -------- -------- ------ --------
Total distributions declared to
shareholders $ (0.71) $ (1.40) $ (0.38) $(2.50) $ (2.69)
-------- -------- -------- ------ --------
Net asset value - end of period $ 9.62 $ 11.49 $ 10.20 $12.54 $ 10.42
======== ======== ======== ====== ========
Total return** (12.73)% 26.91% (15.60)% 44.80% 26.65%
Ratios (to average net assets)/Supplemental data:
Expenses 0.83% 0.88% 0.86% 0.73% 0.77%
Net investment income 3.21% 3.48% 2.36% 1.51% 1.88%
Portfolio turnover 79% 99% 116% 101% 102%
Net assets at end of period (000 omitted) $202,377 $251,857 $239,616 $321,050 $234,804
<FN>
* For the year ended September 30, 1990, the per share distribution from paid-in capital was $0.0009.
** Total returns for Class A shares do not include the applicable sales charge (except for reinvested dividends prior to October 1,
1989). If the charge had been included, the results would have been lower.
</FN>
</TABLE>
See notes to financial statements
16
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights - continued
- ------------------------------------------------------------------------------------------------------------------------------------
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 $ 12.50 $ 14.47 $ 13.95 $ 12.51 $ 13.18
-------- -------- -------- -------- --------
Income from investment operations# -
Net investment income (loss)+ $ (0.03) $ (0.08) $ (0.04) $ (0.02) $ (0.04)
Net realized and unrealized gain (loss) on
investments and foreign currency
transactions 2.96 1.00 0.56 2.96 0.62
-------- -------- -------- -------- --------
Total from investment operations $2.93 $ 0.92 $ 0.52 $ 2.94 $ 0.58
-------- -------- -------- -------- --------
Less distributions declared to shareholders -
From net investment income $ -- $ (0.02) $ -- $ -- $ --
From net realized gain on investments (0.03) (2.87) -- (0.03) (1.25)
-------- -------- -------- -------- --------
Total distributions declared to
shareholders $ (0.03) $ (2.89) $ -- $ (0.03) $ (1.25)
-------- -------- -------- -------- --------
Net asset value - end of period $ 15.40 $ 12.50 $ 14.47 $ 15.42 $ 12.51
======== ======== ======== ======== ========
Total return 23.55% 6.91% 3.73% 23.58% 4.43%
======== ======== ======== ======== ========
Ratios (to average net assets)/Supplemental data:
Expenses## 1.78% 1.82% 2.33 1.71% 1.74%
Net investment income (loss) (0.21)% (0.65)% (0.89)% (0.15)% (0.54)%
Portfolio turnover 94% 79% 93% 94% 79%
Net assets at end of period (000 omitted) $178,117 $25,672 $447 $25,737 $4,821
<FN>
* For the year ended September 30, 1995, the per share distribution from net investment income was $0.00003.
** For the period from the commencement of offering of Class B shares, September 7, 1993, to September 30, 1993.
*** For the period from the commencement of offering of Class C shares, January 3, 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.
</FN>
</TABLE>
See notes to financial statements
17
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(1) Business and Organization
MFS Research 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 n
ot 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. Non-U.S. dollar denominated short-term
obligations are valued at amortized cost as calculated in the base currency and
translated into U.S. dollars at the closing daily exchange rate. 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.
REPURCHASE AGREEMENTS - The Fund may enter into repurchase agreements with
institutions that the Fund's investment adviser has determined are creditworthy.
Each repurchase agreement is recorded at cost. The Fund requires that the
securities purchased in a repurchase transaction be transferred to the custodian
in a manner sufficient to enable the Fund to obtain those securities in the
event of a default under the repurchase agreement. The Fund monitors, on a daily
basis, the value of the securities transferred to ensure that the value,
including accrued interest, of the securities under each repurchase agreement is
greater than amounts owed to the Fund under each such repurchase agreement.
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 att ributable 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.
18
<PAGE>
NOTES TO FINANCIAL STATEMENTS - continued
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 payments received in additional securities are recorded on the
ex-dividend 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. The fee is reduced according to a fee
arrangement, which provides for custody fees to be reduced based on a formula
developed to measure the value of cash deposited with the custodian by the Fund.
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 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 excess of net investment income or accumulated net realized
gains. During the year ended September 30, 1995, $17,964 was reclassified from
accumulated undistributed net investment income to accumulated net realized gain
on investments, due to differences between book and tax accounting for 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
19
<PAGE>
NOTES TO FINANCIAL STATEMENTS - continued
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
0.34% of average daily net assets and 4.28% of 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 $9,811 for the year ended
September 30, 1995.
Distributor - MFD, a wholly owned subsidiary of MFS, as distributor, received
$218,078 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 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 $175,008 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
20
<PAGE>
NOTES TO FINANCIAL STATEMENTS - continued
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 $6,633
and $1,558 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 $654 and $109,742
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.
(4) Portfolio Securities
Purchases and sales of investments, other than U.S. government securities,
purchased option transactions and short-term obligations, aggregated
$662,260,814 and $421,920,228, respectively. 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:
<TABLE>
<CAPTION>
<S> <C>
Aggregate cost $ 588,802,903
=============
Gross unrealized appreciation $ 139,337,502
Gross unrealized depreciation (14,118,548)
-------------
Net unrealized appreciation $ 125,218,954
=============
</TABLE>
21
<PAGE>
NOTES TO FINANCIAL STATEMENTS - continued
(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 12,798,218 $172,943,634 3,839,136 $ 51,599,673
Shares issued to shareholders in
reinvestment of distributions 119,182 1,423,980 4,069,118 52,350,489
Shares reacquired (5,659,542) (74,912,826) (2,955,596) (40,221,505)
---------- ------------ --------- ------------
Net increase 7,257,858 $ 99,454,788 4,952,658 $ 63,728,657
Class B Shares Year Ended September 30,1995 Year Ended September 30,1994
---------------------------- ----------------------------
Shares Amount Shares Amount
- -----------------------------------------------------------------------------------------------
Shares sold 11,678,569 $158,403,133 2,171,868 $ 29,076,136
Shares issued to shareholders in
reinvestment of distributions 11,368 135,681 183,200 2,292,393
Shares reacquired (2,178,275) (29,569,820) (332,192) (4,402,426)
---------- ------------ --------- ------------
Net increase 9,511,662 $128,968,994 2,022,876 $ 26,966,103
Class C Shares Year Ended September 30,1995 Year Ended September 30,1994+
---------------------------- ----------------------------
Shares Amount Shares Amount
- -----------------------------------------------------------------------------------------------
Shares sold 1,642,158 $22,526,215 673,209 $ 8,927,347
Shares issued to shareholders in
reinvestment of distributions 1,007 11,972 24,307 303,103
Shares reacquired (359,369) (4,889,399) (312,042) (4,172,678)
---------- ------------ --------- ------------
Net increase 1,283,796 $17,648,788 385,474 $ 5,057,772
<FN>
+For the period from the commencement of offering of Class C shares, January 3, 1994 to September 30, 1994.
</FN>
</TABLE>
(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 $4,511.
22
<PAGE>
NOTES TO FINANCIAL STATEMENTS - continued
(7) Restricted Security
The Fund may invest not more than 10% of its total net assets in securities
which are subject to legal or contractual restrictions on resale. At September
30, 1995, the Fund owned the following restricted security (constituting 0.19%
of total assets) which may not be publicly sold without registration under the
Securities Act of 1933 (the 1993 Act). The Fund does not have the right to
demand that such securities be registered. The value of this security is
determined by valuations supplied by a pricing service or brokers or, if not
available, in good faith or at the direction of the Trustees.
<TABLE>
<CAPTION>
Date of Share
Description Acquisition Amount Cost Value
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Jason, Inc. 1/21/94 187,500 $1,650,000 $1,370,625
</TABLE>
23
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Trustees of MFS Series Trust V and Shareholders of MFS Research Fund:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of MFS Research Fund (a series of 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 Research 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.
24
<PAGE>
IT'S EASY TO CONTACT US
MFS AUTOMATED INFORMATION
ACCOUNT INFORMATION:
Call 1-800-MFS-TALK (1-800-637-8255)
anytime.
MARKET OUTLOOK:
Call 1-800-637-4458 anytime for the MFS outlook
on the bond and stock markets.
MFS PERSONAL SERVICE
ACCOUNT SERVICE:
Call 1-800-225-2606 any business day
from 8 a.m. to 8 p.m. Eastern time.
PRODUCT INFORMATION:
Call 1-800-637-2929 any business day
from 9 a.m. to 5 p.m. Eastern time.
IRA SERVICE:
Call 1-800-637-1255 any business day
from 8 a.m. to 6 p.m. Eastern time.
SERVICE FOR THE HEARING-IMPAIRED:
Call 1-800-637-6576 any business day
from 9 a.m. to 5 p.m. Eastern time (TDD required).
MFS MAILING ADDRESSES
FOR PERSONAL ACCOUNTS:
MFS Service Center, Inc.
P.O. Box 2281
Boston, MA 02107-9906
FOR IRA ACCOUNTS:
MFS Service Center, Inc.
J.W. McCormack Station
P.O. Box 4501
Boston, MA 02101-9817
25
<PAGE>
A WORD ABOUT MFS PRODUCTS AND SERVICES
MAKING ADDITIONAL INVESTMENTS AT YOUR CONVENIENCE
There are several easy ways to make additional single investments of at least
$50:
o send a check with the lower portion of your account statement
o contact your financial adviser to purchase shares on your behalf
o wire additional investments through your bank; call us first for
instructions.
MAKING ADDITIONAL INVESTMENTS AUTOMATICALLY
By investing a set amount at regular intervals, over time you will buy more
shares when prices are low, and fewer shares when prices are high. Because
dollar cost averaging involves periodic purchases regardless of fluctuating
share prices, you should consider your financial ability to continue investing
in periods of low prices. MFS offers two dollar-cost-averaging programs. See the
prospectus for further details. Dollar cost averaging does not assure a profit
or avoid a loss.
THE AUTOMATIC INVESTMENT PLAN offers a simple way to make regular investments of
at least $50 through automatic withdrawals from your checking account.
THE AUTOMATIC EXCHANGE PLAN automatically exchanges shares from any MFS fund
with $5,000 or more into the same class of shares in up to four other MFS funds.
You choose the amounts of the exchanges (as little as $50) and their frequency.
<TABLE>
<CAPTION>
A Hypothetical Example of Automatic Monthly Investing Compounding at 8% a Year
Amount 5 Years 10 15 20 25
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 50 3,671 9,064 16,989 28,633 45,742
$ 75 5,506 13,596 25,483 42,950 68,613
$ 100 7,341 18,128 33,978 57,266 91,484
$ 200 14,683 36,257 67,956 114,532 182,968
</TABLE>
For illustration only. Not indicative of future performance of any MFS fund.
For applications or further information call 1-800-225-2606 any business day
from 8 a.m. to 8 p.m. Eastern time.
If you are a participant in a retirement plan, check with your plan sponsor
regarding the availability of these options.
26
<PAGE>
A FINANCIAL ADVISER CAN HELP YOU BE A BETTER INVESTOR
Financial advisers can be valuable resources for their clients, providing
ongoing education and guidance about investments, as well as a wide range of
services. Here are just some of the ways your financial adviser may be able to
help you be a better investor:
# Day-to-day monitoring of your portfolio
# Tax recordkeeping
# In-depth information on fund managers, their track records and their tenure
# Risk/reward analyses of current or potential holdings
# Asset allocation advice
# Construction of a detailed personal financial profile
# Order and confirmation processing
# Information on a fund group's range of shareholder services
# Portfolio adjustments based on lifestyle changes
# Assistance with business retirement planning
# Evaluation of lump-sum distribution options
# Recommendations on a selection of fund groups
# Specialized research and investment information not readily available to
individuals
# In-depth knowledge of markets and products, kept current by ongoing tracking
# Estate, tax, insurance, and business planning
# Help with possible savings on sales charges through breakpoints, rights of
accumulation, and letters of intent
27
<PAGE>
MFS INVESTMENT OPPORTUNITIES
MUTUAL FUNDS
The MFS Family of Funds, 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 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.
28
<PAGE>
THE MFS FAMILY OF FUNDS [Register mark]
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
- --------------------------------------------------------------------------------
<PAGE>
MFS [R] RESEARCH FUND BULK RATE
U.S. POSTAGE
P A I D
500 Boylston Street U.S. POSTAGE
Boston, MA 02116 BOSTON, MA
[DALBAR LOGO]
MFR-2 11/95/62.5M 14/214/314
