<PAGE>
[LOGO] M F S(R) SEMIANNUAL REPORT
INVESTMENT MANAGEMENT MARCH 31, 1999
75 YEARS
WE INVENTED THE MUTUAL FUND(R)
[Graphic Omitted]
MFS(R) INTERNATIONAL
OPPORTUNITIES FUND
MFS(R) INTERNATIONAL
STRATEGIC GROWTH FUND
MFS(R) INTERNATIONAL
VALUE FUND
<PAGE>
MFS(R) INTERNATIONAL OPPORTUNITIES FUND
MFS(R) INTERNATIONAL STRATEGIC GROWTH FUND
MFS(R) INTERNATIONAL VALUE FUND
<TABLE>
<S> <C>
TRUSTEES CUSTODIAN
Richard B. Bailey* - Private Investor; State Street Bank and Trust Company
Former Chairman and Director (until 1991),
MFS(R) Investment Management INVESTOR INFORMATION
For MFS stock and bond market outlooks, call toll
Peter G. Harwood - Private Investor free: 1-800-637-4458 anytime from a touch-tone
telephone.
J. Atwood Ives - Chairman and Chief Executive
Officer, Eastern Enterprises (diversified services For information on MFS mutual funds, call your
company) financial adviser or, for an information kit, call
toll free: 1-800-637-2929 any business day from 9
Lawrence T. Perera - Partner, Hemenway & Barnes a.m. to 5 p.m. Eastern time (or leave a message
(attorneys) anytime).
William J. Poorvu - Adjunct Professor, Harvard INVESTOR SERVICE
University Graduate School of Business MFS Service Center, Inc.
Administration P.O. Box 2281
Boston, MA 02107-9906
Charles W.Schmidt - PrivateInvestor
For general information, call toll free:
Arnold D. Scott* - Senior Executive Vice 1-800-225-2606 any business day from 8 a.m. to
President, Director, and Secretary, MFS Investment 8 p.m. Eastern time.
Management
For service to speech- or hearing-impaired, call
Jeffrey L. Shames* - Chairman, Chief Executive toll free: 1-800-637-6576 any business day from
Officer, and Director, MFS Investment Management 9 a.m. to 5 p.m. Eastern time. (To use this service,
your phone must be equipped with a
Elaine R. Smith - Independent Consultant Telecommunications Device for the Deaf.)
David B. Stone - Chairman and Director, North For share prices, account balances, and exchanges,
American Management Corp. (investment advisers) call toll free: 1-800-MFS-TALK (1-800-637-8255)
anytime from a touch-tone telephone.
INVESTMENT ADVISER
Massachusetts Financial Services Company WORLD WIDE WEB
500 Boylston Street www.mfs.com
Boston, MA 02116-3741
DISTRIBUTOR
MFS Fund Distributors, Inc.
500 Boylston Street
Boston, MA 02116-3741
PORTFOLIO MANAGERS
David A. Antonelli*
David R. Mannheim*
Frederick J. Simmons*
Treasurer
W. Thomas London*
ASSISTANT TREASURERS
Mark E. Bradley*
Ellen Moynihan*
James O. Yost*
SECRETARY
Stephen E. Cavan*
ASSISTANT SECRETARY
James R. Bordewick, Jr.*
</TABLE>
*Affiliated with the Investment Adviser
<PAGE>
LETTER FROM THE CHAIRMAN
Dear Shareholders,
Since we launched Massachusetts Investors Trust, the nation's first mutual fund,
75 years ago, MFS has weathered numerous market and economic cycles, from the
occasional recession to long periods of growth and prosperity. Throughout that
time, we have tried to give investors a realistic assessment of the investment
markets and, when necessary, to sound a note of caution -- even when market
conditions appear quite favorable.
Although the equity markets have overcome last year's volatility, we still think
stocks are overdue for a correction that will rid them of the excesses that have
developed. Perhaps the most glaring measure of those excesses is the high level
of valuations, that is, the amount equity investors are paying for each dollar
of earnings. By mid-March, the price-to-earnings (P/E) ratio of the average
stock in the Standard & Poor's 500 Composite Index, a popular, unmanaged index
of common stock total return performance, was almost 28% higher than it was a
year ago. While P/E ratios keep going up, earnings have essentially been flat,
and we believe they are likely to stay that way, for a few months at least. This
leaves stock prices vulnerable to negative events such as a domestic or
international crisis, a sudden increase in interest rates, or a slowing economy,
any of which could lead to lower corporate earnings.
While risks in the overall market have increased, one industry calls for
particular attention. For several months, Internet-related stocks have exhibited
extreme price volatility. The Internet's potential impact on the way individuals
and companies communicate and conduct business is certainly great, but we feel
that most of the recent run-up in the share prices of these companies is
unjustified. Many of them have not yet reported any profits, and there is no way
of knowing which of today's "hot" Internet stocks will be successful -- or even
in existence -- a few years from now. Therefore, we think the frenzy surrounding
even the best-known Internet stocks is purely speculative.
However, there are some established companies offering Internet-related products
and services that may generate revenue. These include companies that provide
networking equipment, that make servers to store information, and that help
customers make better use of Internet services. Because they already have
profitable businesses as well as the potential to use the Internet to increase
their opportunities to generate revenue, these companies have been the focus of
our research efforts.
Although we think valuations for the overall equity market, and especially for
Internet stocks, are excessive, we see this situation as an opportunity for our
portfolio managers to capitalize on MFS(R) Original Research(SM). This is a
fundamental, company-by-company process that helps us find investments that we
believe are most likely to achieve long-term earnings growth, through both
negative and positive market cycles.
We also rely heavily on our research process when investing in the fixed- income
markets. Last year, turmoil in emerging markets and volatility in the U.S. stock
market helped create a "flight to quality," meaning that investors moved toward
U.S. Treasury securities, which are seen as carrying less risk, and away from
almost everything else. As a result, yields on non-Treasury securities
increased, while yields on Treasuries fell. Some of these yield spreads, or
differentials, have narrowed, but they have not returned to the levels seen
before last year's market turmoil. We think this has created opportunities for
our portfolio managers to find attractive yields in these markets.
Individual investors, meanwhile, should keep in mind that the tremendous
increases in the broad stock market averages of the past several years are a
historical aberration and do not necessarily indicate future market performance.
If they are not already diversified across a range of investments, including
growth stock funds, value-oriented funds, and fixed- income funds, investors may
want to talk to their financial advisers about developing well-diversified
portfolios with greater potential to weather unexpected changes in the markets.
Doing so may help investors more effectively meet their long-term financial
goals. We appreciate your confidence and welcome any questions or comments you
may have.
Respectfully,
/s/ Jeffrey L. Shames
Jeffrey L. Shames
Chairman and Chief Executive Officer
MFS Investment Management(R)
April 16, 1999
<PAGE>
MANAGEMENT REVIEW AND OUTLOOK
MFS International Opportunities Fund
Dear Shareholders,
For the six months ended March 31, 1999, both Class A and Class I shares of the
Fund provided a total return of 21.68%. These returns, which include the
reinvestment of distributions but exclude the effects of any sales charges,
compare to a 22.52% return for the Morgan Stanley Capital International (MSCI)
Europe, Australia, Far East (EAFE) Index, a broad unmanaged index of non-U.S.
equities. During the period, the average international fund as tracked by Lipper
Analytical Services, an independent firm that reports mutual fund performance,
returned 18.22%.
The Fund seeks capital appreciation by investing in small-capitalization
companies that we believe can offer above-average growth. The Fund can invest up
to 35% of its assets in emerging market stocks, although our current weighting
there is lower.
The Fund benefited from investments in Europe's publishing and media sector.
Last year, fears of an economic slowdown hurt the share prices of those
companies and provided an excellent buying opportunity. We bought Taylor Nelson,
a British market research company; Aegis Group, a British advertising and media
consulting company; Mediaset, an Italian television broadcaster; and TFI, a
French television network. Recently each of these companies has shown
surprisingly strong revenue and earnings growth. Another sector helping
performance was telecommunications. The cellular communications industry has
exploded in Europe and around the world, raising prices of virtually all
cellular company stocks. Several such companies have benefited the Fund,
including Mannesmann in Germany and Helsinki Telephone in Finland. We also have
seen a sharp increase in revenues coming from data transmission. Equant, a Dutch
company, is a beneficiary of this trend and has contributed positively to
performance during the period.
Stocks that have not performed particularly well include some smaller Dutch
companies such as Hunter Douglas, which makes home decorating supplies, and
Ahrend, which makes office furniture. Both companies were impacted by concerns
about a slowing European economy. Two other Dutch companies, Fugro and IHC
Caland, are involved in oil services. Their stocks performed poorly last year
because oil prices declined. We still believe in the long-term prospects for
each of these companies and think their current prices are attractive based on
our earnings projections for them.
Respectfully,
/s/ David A. Antonelli
David A. Antonelli
Portfolio Manager
<PAGE>
MANAGEMENT REVIEW AND OUTLOOK - continued
MFS International Strategic Growth Fund
Dear Shareholders,
For the six months ended March 31, 1999, Class A shares of the Fund provided a
total return of 26.67% and Class I shares returned 26.72%. These returns,
which include the reinvestment of distributions but exclude the effects of any
sales charges, compare to a 22.52% return for the MSCI EAFE Index and to an
18.22% return for the average international fund as reported by Lipper.
The Fund seeks capital appreciation by investing predominantly in non-U.S.
companies. Though we can invest in U.S. companies, we'll only do so if a company
conducts the majority of its business outside the United States. We look for
global firms that we feel can sustain above-average growth and that also are
trading at attractive prices relative to their earnings. We use a strict
bottom-up, fundamental analysis of companies rather than top-down regional
allocations.
The Fund's strong performance was helped by the rebound in international
markets. The rebound began in early October as some Asian countries and other
emerging markets began to benefit from market and economic reforms. European
markets also advanced as governments continued taking deficit-cutting steps to
prepare for the January 1999 launch of the single European currency.
One beneficiary of this favorable environment was the European financial
services industry. Companies such as Union des Assurances Federales in France
and Storebrand in Sweden consolidated operations, cut costs and made other
structural changes, all of which produced increased profits and higher stock
prices. The Fund also earned good performance from its bank holdings, such as
Anglo Irish Bank and Banco Pinto & Sotto Mayor in Portugal, which are in smaller
markets and enjoy dominant positions.
Improvements in the international consumer sector also helped the Fund. For
example, the Fund has holdings in three Japanese Coca-Cola bottling companies,
Sanyo, Mikuni and Chukyo. In an effort to reduce costs, Coca-Cola is
consolidating its bottling operations in Japan. We believe these three companies
will either be among the survivors or be bought at premiums to their current
stock prices. Galileo International, which provides reservation systems to
travel agents, also contributed to performance. The company, whose revenue is
based on the number of passengers booked rather than on trip prices, has
benefited from increasing air travel.
Underperformers included three European aerospace companies: British
Aerospace, Saab in Sweden, and Thomson CSF in France. Their stocks declined
over uncertainty about consolidation in the European aircraft industry.
Respectfully,
/s/ David R. Mannheim
David R. Mannheim
Portfolio Manager
<PAGE>
MANAGEMENT REVIEW AND OUTLOOK - continued
MFS International Value Fund
Dear Shareholders,
For the six months ended March 31, 1999, Class A shares of the Fund provided a
total return of 18.43% and Class I shares returned 18.52%. These returns, which
include the reinvestment of distributions but exclude the effects of any sales
charges, compare to a 22.52% return for the MSCI EAFE Index and to an 18.22%
return for the average international fund as reported by Lipper.
We continue to favor European equities because we believe they offer good growth
prospects at reasonable prices. We expect good performance from Cable & Wireless
Communications of Great Britain and from UBS, a Swiss bank. Cable & Wireless is
taking advantage of European telecommunications growth. UBS weathered last
year's turmoil relatively well. Many financial services companies are benefiting
from consolidation, which could lead to cost cutting and strong earnings.
Within the utilities and communications sector, we favor communications
companies because we believe they stand to gain from the explosive growth of
cellular telephone and Internet services. Holdings include Sprint in the United
States, which has benefited from consolidation, and Mannesmann in Germany. The
cellular communications industry has transformed Mannesmann from an engineering
company to a cellular company.
We reduced or eliminated positions in a few companies that reported
disappointing earnings. We reduced Nestle, for example, because its sales in
less-developed countries were impacted more than expected. However, we still
think its long-term prospects are good. We sold Ciba, a specialty chemical
company, because increasing industry competition has hurt its pricing power.
Respectfully,
/s/ Frederick J. Simmons
Frederick J. Simmons
Portfolio Manager
The opinions expressed in this report are those of the portfolio managers and
are current only through the end of the period of the report as stated on the
cover. The managers' views are subject to change at any time based on market
and other conditions, and no forecasts can be guaranteed.
The portfolios are actively managed, and current holdings may be different.
It is not possible to invest directly in an index.
<PAGE>
PERFORMANCE SUMMARY
Currently each Fund offers only Class A and Class I shares, which are available
for purchase at net asset value only by certain retirement plans established for
the benefit of employees of MFS and its affiliates and certain of their family
members who are also residents of the Commonwealth of Massachusetts.
Because mutual funds are designed for investors with long-term goals, we have
provided cumulative results as well as the average annual total returns for the
applicable time periods.
AVERAGE ANNUAL AND CUMULATIVE TOTAL RATES OF RETURN AS OF MARCH 31, 1999
INTERNATIONAL OPPORTUNITIES FUND
CLASS A INVESTMENT RESULTS
(net asset value change including reinvested distributions)
6 Months 1 Year Life of Fund*
- -------------------------------------------------------------------------------
Cumulative Total Return +21.68% +2.89% +14.62%
- -------------------------------------------------------------------------------
Average Annual Total Return -- +2.89% + 9.70%
- -------------------------------------------------------------------------------
SEC Results -- -2.00% + 6.14%
- -------------------------------------------------------------------------------
CLASS I INVESTMENT RESULTS
(net asset value change including reinvested distributions)
6 Months 1 Year Life of Fund*
- -------------------------------------------------------------------------------
Cumulative Total Return +21.68% +2.89% +14.62%
- -------------------------------------------------------------------------------
Average Annual Total Return -- +2.89% + 9.70%
- -------------------------------------------------------------------------------
INTERNATIONAL STRATEGIC GROWTH FUND
CLASS A INVESTMENT RESULTS
(net asset value change including reinvested distributions)
6 Months 1 Year Life of Fund*
- -------------------------------------------------------------------------------
Cumulative Total Return +26.67% +7.18% +22.62%
- -------------------------------------------------------------------------------
Average Annual Total Return -- +7.18% +14.84%
- -------------------------------------------------------------------------------
SEC Results -- +2.09% +11.11%
- -------------------------------------------------------------------------------
CLASS I INVESTMENT RESULTS
(net asset value change including reinvested distributions)
6 Months 1 Year Life of Fund*
- -------------------------------------------------------------------------------
Cumulative Total Return +26.72% +7.45% +22.92%
- -------------------------------------------------------------------------------
Average Annual Total Return -- +7.45% +15.03%
- -------------------------------------------------------------------------------
INTERNATIONAL VALUE FUND
CLASS A INVESTMENT RESULTS
(net asset value change including reinvested distributions)
6 Months 1 Year Life of Fund*
- -------------------------------------------------------------------------------
Cumulative Total Return +18.43% +7.17% +24.00%
- -------------------------------------------------------------------------------
Average Annual Total Return -- +7.17% +15.71%
- -------------------------------------------------------------------------------
SEC Results -- +2.08% +11.95%
- -------------------------------------------------------------------------------
CLASS I INVESTMENT RESULTS
(net asset value change including reinvested distributions)
6 Months 1 Year Life of Fund*
- -------------------------------------------------------------------------------
Cumulative Total Return +18.52% +7.16% +24.09%
- -------------------------------------------------------------------------------
Average Annual Total Return -- +7.16% +15.77%
- -------------------------------------------------------------------------------
*For the period from the commencement of the Fund's investment operations,
October 9, 1997, through March 31, 1999.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PAST PERFORMANCE
IS NO GUARANTEE OF FUTURE RESULTS.
Investments in foreign and emerging market securities may provide superior
returns but also involve greater risk than U.S. investments. Investments in
foreign and emerging market securities may be favorably or unfavorably
affected by changes in interest rates and currency exchange rates, market
conditions, and the economic and political conditions of the countries where
investments are made. These risks may increase share price volatility. See the
prospectus for details.
<PAGE>
PORTFOLIO OF INVESTMENTS (Unaudited) - March 31, 1999
MFS INTERNATIONAL OPPORTUNITIES FUND
Stocks - 114.0%
- -----------------------------------------------------------------------------
ISSUER SHARES VALUE
- -----------------------------------------------------------------------------
Foreign Stocks - 109.8%
Australia - 1.5%
Australia & New Zealand Banking Group Ltd.
(Banks and Credit Cos.)* 800 $ 5,825
QBE Insurance Group Ltd. (Insurance)* 2,087 8,694
----------
$ 14,519
- -----------------------------------------------------------------------------
Bermuda - 0.2%
Dairy Farm International Holdings Ltd. (Supermarkets) 2,000 $ 2,320
- -----------------------------------------------------------------------------
Canada - 3.2%
BCE, Inc. (Telecommunications) 150 $ 6,647
Canadian National Railway Co. (Railroads) 200 11,125
CGI Group, Inc. (Technology)* 275 5,998
Newcourt Credit Group, Inc. (Finance) 200 5,413
Northern Telecom Ltd. (Telecommunications) 50 3,106
----------
$ 32,289
- -----------------------------------------------------------------------------
Chile - 0.9%
Administradora de Fondas de Pensiones Provida
(Financial Services) 500 $ 9,375
- -----------------------------------------------------------------------------
Estonia - 0.3%
Eesti Telekom (Telecommunications)* 110 $ 2,470
- -----------------------------------------------------------------------------
Finland - 6.6%
Helsingin Puhelin Oy (Telecommunications) 315 $ 15,422
Helsingin Puhelin Oy (Telecommunications)* 4 12,447
Nokia Ab Oy (Telecommunications) 55 8,863
Nokia Corp., ADR (Telecommunications) 25 3,894
Pohjola Group Insurance Corp. (Insurance) 110 5,826
Rapala Normark Corp. (Consumer Goods and Services)* 300 2,341
Sampo (Electronics) 180 5,642
Tieto Corp. (Computer Software - Systems) 290 11,957
----------
$ 66,392
- -----------------------------------------------------------------------------
France - 14.3%
Alcatel (Telecommunications) 55 $ 6,331
Banque Nationale de Paris (Banks and Credit Cos.) 40 3,485
Bouygues (Construction) 30 8,333
Castorama Dubois Investisse (Building Products) 40 8,387
Compagnie Generale de Geophysique S.A., ADR
(Oil Services)* 800 6,250
Pernod Ricard Co. (Beverages) 100 6,361
Renault Regie Nationale (Automobiles) 400 14,107
Sanofi S.A. (Medical and Health Products) 80 13,488
SEITA (Tobacco) 205 13,947
Societe Generale (Banks and Credit Cos.) 50 9,619
Television Francaise (Entertainment) 65 12,217
Total S.A., "B" (Oils) 170 20,964
Union des Assurances Federales S.A. (Insurance) 65 7,798
Valeo S.A. (Automotive) 155 12,145
----------
$ 143,432
- -----------------------------------------------------------------------------
Germany - 7.4%
Bayer Hypo Vereins (Banks and Credit Cos.) 175 $ 10,478
Henkel KGaA (Chemicals) 135 9,922
Mannesmann AG (Conglomerate) 275 35,161
Marschollek Lauten (Finance) 20 10,829
SAP AG, ADR (Computer Software -- Systems)## 150 3,975
Wella AG (Consumer Goods and Services)* 5 3,540
----------
$ 73,905
- -----------------------------------------------------------------------------
Greece - 2.1%
Antenna TV S.A., ADR (Broadcasting)* 200 $ 2,600
Hellenic Telecommunication Organization S.A., GDR
(Telecommunications) 493 12,002
Stet Hellas Telecommunications S.A., ADR
(Telecommunications)* 215 6,369
----------
$ 20,971
- -----------------------------------------------------------------------------
Hong Kong - 0.8%
Li & Fung Ltd. (Wholesale) 4,000 $ 8,466
- -----------------------------------------------------------------------------
Hungary - 2.5%
Magyar Tavkozlesi Rt., ADR (Telecommunications)* 750 $ 20,063
OTP Bank (Banks and Credit Cos.) 140 5,397
----------
$ 25,460
- -----------------------------------------------------------------------------
Ireland - 3.4%
Allied Irish Bank PLC (Banks and Credit Cos.) 431 $ 7,428
Anglo Irish Bank PLC (Banks and Credit Cos.)* 9,489 26,952
----------
$ 34,380
- -----------------------------------------------------------------------------
Italy - 8.4%
Banca Carige S.p.A. (Banks and Credit Cos.) 1,420 $ 12,646
Mediaset S.p.A. (Entertainment) 1,850 17,415
San Paolo Imi S.p.A (Banks and Credit Cos.)* 836 13,598
Telecom Italia Mobile S.p.A. (Telecommunications) 3,100 11,995
Telecom Italia S.p.A. (Telecommunications)* 2,700 28,715
----------
$ 84,369
- -----------------------------------------------------------------------------
Japan - 7.3%
Canon, Inc., ADR (Special Products and Services) 700 $ 16,712
Chugai Pharmaceutical Co., Ltd. (Pharmaceuticals) 1,000 11,554
Chukyo Coca-Cola Bottling Co., Ltd.
(Food and Beverage Products) 1,000 10,540
Mikuni Coca-Cola Bottling Co.
(Food and Beverage Products) 1,000 21,622
Olympus Optical Co. (Conglomerate) 1,000 13,176
----------
$ 73,604
- -----------------------------------------------------------------------------
Mexico - 1.8%
Cifra S.A., ADR (Retail)* 1,025 $ 15,503
Grupo Iusacell S.A. (Telecommunications)* 350 2,800
----------
$ 18,303
- -----------------------------------------------------------------------------
Netherlands - 13.0%
Akzo Nobel N.V. (Chemicals) 161 $ 5,968
Benckiser N.V., "B" (Consumer Goods and Services) 450 25,266
Equant N.V., (Computer Software - Services)* 150 11,287
Fugro N.V. (Engineering)* 737 17,126
Hunter Douglas N.V., ADR (Consumer Goods and
Services)* 495 14,445
IHC Caland N.V. (Marine Equipment)* 321 12,143
ING Groep N.V. (Financial Services)* 269 14,842
Koninklijke Ahold N.V. (Supermarkets)* 145 5,563
Koninklijke Ahrend Groep N.V. (Consumer Goods
and Services)* 753 13,144
United Pan- Europe Communications
(Telecommunications)* 200 7,847
Wolters Kluwer N.V. (Publishing)* 15 2,724
----------
$ 130,355
- -----------------------------------------------------------------------------
Poland - 0.7%
Agora S.A. (Entertainment)* 220 $ 2,376
Bank Rozwoju Eksportu S.A. (Banks and Credit Cos.) 260 4,985
----------
$ 7,361
- -----------------------------------------------------------------------------
Portugal - 2.1%
Banco Espirito Santo e Comercial de Lisboa S.A.
(Banks and Credit Cos.) 200 $ 5,391
Banco Pinto & Sotto Mayor S.A. (Banks and
Credit Cos.) 287 5,667
BPI SGPS, S.A. (Banks and Credit Cos.) 260 7,911
Telecel Comunicacaoes Pessoais S.A.
(Telecommunications) 15 2,391
----------
$ 21,360
- -----------------------------------------------------------------------------
Singapore - 1.9%
Hong Leong Finance Ltd. (Finance)+ 5,000 $ 8,169
Singapore Press Holdings Ltd. (Printing and
Publishing) 1,000 11,066
----------
$ 19,235
- -----------------------------------------------------------------------------
Spain - 2.4%
Banco Popular Espanol S.A. (Banks and Credit Cos.) 100 $ 6,442
Cortefiel S.A. (Retail) 170 3,950
Telefonica de Espana S.A., ADR (Telecommunications) 106 13,541
----------
$ 23,933
- -----------------------------------------------------------------------------
Sweden - 4.9%
Astra AB (Pharmaceuticals) 355 $ 8,071
Celsius AB (Aerospace) 1,200 19,750
Ericsson LM, "B" (Telecommunication Equipment) 250 6,096
Hennes & Mauritz (Consumer Goods and Services) 100 7,558
Saab AB, "B" (Aerospace)* 1,000 7,985
----------
$ 49,460
- -----------------------------------------------------------------------------
Switzerland - 5.0%
Barry Callebaut AG (Food and Beverage Products) 130 $ 26,180
Novartis AG (Medical and Health Products) 4 6,501
UBS AG (Banks and Credit Cos.)* 55 17,312
----------
$ 49,993
- -----------------------------------------------------------------------------
United Kingdom - 19.1%
Aegis Group PLC (Advertising) 3,100 $ 6,779
BP Amoco PLC (Oils)* 494 8,347
BP Amoco PLC, ADR (Oils) 106 10,699
British Aerospace PLC (Aerospace and Defense)* 1,695 11,325
Cable & Wireless Communication (Telecommunications)* 200 11,313
Capital Radio PLC (Broadcasting) 1,600 17,687
Colt Telecom Group PLC (Telecommunications)* 75 5,386
Compass Group (Restaurants and Food Service) 300 3,471
HSBC Holdings PLC (Financial Services)* 225 7,251
Kwik-Fit Holdings PLC (Automotive Repair Centers) 804 5,547
Lloyds TSB Group PLC (Banks and Credit Cos.) 550 8,281
Next PLC (Stores) 1,000 11,458
Rentokil Initial PLC (Environmental Services) 1,200 7,359
Sema Group PLC (Computer Software - Systems) 850 9,547
Taylor Nelson Sofres PLC (Market Research) 8,350 18,596
TeleWest Communications PLC (Entertainment) 5,000 21,625
Tomkins PLC (Conglomerate) 1,200 4,415
Williams PLC (Conglomerate) 2,410 15,557
Zeneca Group PLC (Medical and Health Products) 140 6,629
----------
$ 191,272
- -----------------------------------------------------------------------------
Total Foreign Stocks $1,103,224
- -----------------------------------------------------------------------------
U.S. Stocks - 4.2%
Business Services - 0.2%
IMRglobal Corp.* 100 $ 1,775
- -----------------------------------------------------------------------------
Conglomerates - 1.4%
Sodexho Marriott Services, Inc.* 640 $ 14,120
- -----------------------------------------------------------------------------
Consumer Goods and Services - 0.7%
Galileo International, Inc. 150 $ 7,256
- -----------------------------------------------------------------------------
Electronics - 0.6%
AMP, Inc. 119 $ 6,389
- -----------------------------------------------------------------------------
Medical and Health Products - 1.3%
Pharmacia & Upjohn, Inc. 200 $ 12,475
- -----------------------------------------------------------------------------
Total U.S. Stocks $ 42,015
- -----------------------------------------------------------------------------
Total Investments (Identified Cost, $1,113,688) $1,145,239
Other Assets, Less Liabilities - (14.0)% (141,062
- -----------------------------------------------------------------------------
Net Assets - 100.0% $1,004,177
- -----------------------------------------------------------------------------
* Non-income producing security.
## SEC Rule 144A restriction.
+ Restricted security.
See notes to financial statements
<PAGE>
PORTFOLIO OF INVESTMENTS (Unaudited) - March 31, 1999
MFS INTERNATIONAL STRATEGIC GROWTH FUND
Stocks - 91.3%
- ----------------------------------------------------------------------------
ISSUER SHARES VALUE
- ----------------------------------------------------------------------------
Foreign Stocks - 87.7%
Australia - 1.9%
QBE Insurance Group Ltd. (Insurance)* 3,693 $ 15,385
Seven Network Ltd. (Entertainment) 50 165
--------
$ 15,550
- ----------------------------------------------------------------------------
Canada - 1.6%
Canadian National Railway Co. (Railroads) 230 $ 12,794
- ----------------------------------------------------------------------------
Finland - 4.4%
Helsingin Puhelin Oyj (Telecommunications) 285 $ 13,954
Helsingin Puhelin Oyj (Telecommunications) 2 6,223
Pohjola Group Insurance Corp. (Insurance) 154 8,155
Tieto Corp. (Computer Software - Systems) 180 7,422
--------
$ 35,754
- ----------------------------------------------------------------------------
France - 12.9%
Castorama Dubois Investisse (Stores -
Building Products) 50 $ 10,484
Pernod Ricard Co. (Beverages) 210 13,357
Renault Regie Nationale (Automobiles) 140 4,937
Societe Generale (Banks and Credit Cos.) 80 15,391
Television Francaise (Entertainment) 90 16,916
Thomson CSF (Aerospace and Defense) 295 9,023
Total S.A., "B" (Oils) 170 20,964
Union des Assurances Federales S.A.
(Insurance) 110 13,196
--------
$104,268
- ----------------------------------------------------------------------------
Germany - 6.4%
Bayer Hypo Vereins (Banks and Credit Cos.) 155 $ 9,281
Henkel KGaA (Chemicals) 190 13,964
Mannesmann AG (Conglomerate) 170 21,736
Wella AG (Consumer Goods and Services)* 10 7,079
--------
$ 52,060
- ----------------------------------------------------------------------------
Greece - 2.0%
Antenna TV S.A., ADR (Broadcasting)* 200 $ 2,600
Hellenic Telecommunication Organization
S.A., GDR (Telecommunications) 350 8,521
Stet Hellas Telecommunications S.A., ADR
(Telecommunications)* 160 4,740
--------
$ 15,861
- ----------------------------------------------------------------------------
Ireland - 2.4%
Anglo Irish Bank PLC (Banks and Credit Cos.)* 6,885 $ 19,555
- ----------------------------------------------------------------------------
Italy - 5.7%
Banca Carige S.p.A. (Banks and Credit Cos.) 1,000 $ 8,906
ERG S.p.A. (Oils) 1,800 5,953
Mediaset S.p.A. (Entertainment) 1,670 15,721
Telecom Italia Mobile S.p.A., Saving Shares
(Telecommunications) 4,000 15,477
--------
$ 46,057
- ----------------------------------------------------------------------------
Japan - 13.0%
Canon, Inc., ADR (Special Products and Services) 440 $ 10,505
Chugai Pharmaceutical Co., Ltd. (Pharmaceuticals) 1,000 11,554
Chukyo Coca-Cola Bottling Co., Ltd. (Food
and Beverage Products) 1,000 10,541
Fujitsu Ltd. (Computer Hardware - Systems) 1,000 16,064
Mikuni Coca-Cola Bottling Co. (Food and Beverage
Products) 1,000 21,622
Olympus Optical Co. (Conglomerate) 1,000 13,176
Sanyo Coca-Cola (Food and Beverage Products) 1,000 21,959
--------
$105,421
- ----------------------------------------------------------------------------
Netherlands - 7.5%
Akzo Nobel N.V. (Chemicals) 250 $ 9,268
Benckiser N.V., "B" (Consumer Goods and Services) 490 27,512
Fugro N.V. (Engineering)* 166 3,857
IHC Caland N.V. (Marine Equipment)* 118 4,464
ING Groep N.V. (Financial Services)* 280 15,449
--------
$ 60,550
- ----------------------------------------------------------------------------
Norway - 2.1%
Sparebanken NOR (Banks and Credit Cos.) 440 $ 8,555
Storebrand ASA (Insurance) 1,200 8,866
--------
$ 17,421
- ----------------------------------------------------------------------------
Portugal - 1.9%
Banco Pinto & Sotto Mayor S.A. (Banks and
Credit Cos.) 572 $ 11,295
Telecel -- Comunicacaoes Pessoais S.A.
(Telecommunications) 25 3,985
--------
$ 15,280
- ----------------------------------------------------------------------------
Spain - 0.6%
Cortefiel S.A. (Retail) 200 $ 4,647
- ----------------------------------------------------------------------------
Sweden - 6.3%
Astra AB (Pharmaceuticals) 630 $ 14,324
Ericsson LM, "B" (Telecommunication Equipment) 630 15,361
Saab AB, "B" (Aerospace)* 2,700 21,560
--------
$ 51,245
- ----------------------------------------------------------------------------
Switzerland - 4.2%
Barry Callebaut AG (Food and Beverage Products) 65 $ 13,090
Novartis AG (Medical and Health Products) 3 4,876
UBS AG (Banks and Credit Cos.) 52 16,367
--------
$ 34,333
- ----------------------------------------------------------------------------
United Kingdom - 14.8%
BP Amoco PLC (Oils)* 1,071 $ 18,096
British Aerospace PLC (Aerospace and Defense)* 4,380 29,263
Cable & Wireless Communications PLC
(Telecommunications)* 1,350 15,251
Capital Radio PLC (Broadcasting) 550 6,080
LucasVarity PLC (Automotive) 1,800 8,315
Next PLC (Stores) 1,380 15,812
TeleWest Communications PLC (Entertainment) 3,200 13,840
Tomkins PLC (Conglomerate) 1,900 6,991
Zeneca Group PLC (Medical and Health Products) 140 6,629
--------
$120,277
- ----------------------------------------------------------------------------
Total Foreign Stocks $711,073
- ----------------------------------------------------------------------------
U.S. Stocks - 3.6%
Business Services - 3.6%
Galileo International, Inc. 600 $ 29,025
- ----------------------------------------------------------------------------
Total Stocks (Identified Cost, $690,887) $740,098
- ----------------------------------------------------------------------------
Short-Term Obligations - 6.8%
- ----------------------------------------------------------------------------
PRINCIPAL AMOUNT
(000 OMITTED)
- ----------------------------------------------------------------------------
Federal Home Loan Bank, due 4/01/99, at Amortized Cost $ 55 $ 55,000
- ----------------------------------------------------------------------------
Total Investments (Identified Cost, $745,887) $795,098
Other Assets, Less Liabilities - 1.9% 15,163
- ----------------------------------------------------------------------------
Net Assets - 100.0% $810,261
- ----------------------------------------------------------------------------
* Non-income producing security.
<PAGE>
PORTFOLIO OF INVESTMENTS (Unaudited) - March 31, 1999
MFS INTERNATIONAL VALUE FUND
Stocks - 90.7%
- -------------------------------------------------------------------------------
ISSUER SHARES VALUE
- -------------------------------------------------------------------------------
Foreign Stocks - 73.6%
Australia - 3.2%
Australia & New Zealand Banking Group Ltd.
(Banks and Credit Cos.)* 900 $ 6,553
QBE Insurance Group Ltd. (Insurance)* 6,055 25,224
Seven Network Ltd. (Entertainment) 1,463 4,837
----------
$ 36,614
- -------------------------------------------------------------------------------
Austria - 0.9%
Austria Tabak AG (Tobacco) 151 $ 10,184
- -------------------------------------------------------------------------------
Bermuda - 0.8%
Dairy Farm International Holdings Ltd.
(Retail Stores - Supermarkets) 8,000 $ 9,280
- -------------------------------------------------------------------------------
Canada - 2.2%
Canadian National Railway Co. (Railroads) 446 $ 24,809
- -------------------------------------------------------------------------------
Finland - 1.3%
Helsingin Puhelin Oyj (Telecommunications) 297 $ 14,541
- -------------------------------------------------------------------------------
France - 12.8%
Pernod Ricard Co. (Beverages) 100 $ 6,360
Pinault Printemps Redoute (Retailer) 187 29,872
Sanofi S.A. (Medical and Health Products) 64 10,791
SEITA (Tobacco) 524 35,651
Television Francaise (Entertainment) 101 18,983
Thomson CSF (Aerospace and Defense) 297 9,084
Total S.A., ADR (Oils) 77 4,697
Union des Assurances Federales S.A. (Insurance) 256 30,712
----------
$ 146,150
- -------------------------------------------------------------------------------
Germany - 3.9%
Bayer Hypo Vereins (Banks and Credit Cos.) 100 $ 5,988
Henkel KGaA (Chemicals) 147 10,804
Mannesmann AG (Conglomerate) 223 28,512
----------
$ 45,304
- -------------------------------------------------------------------------------
Greece - 1.2%
Hellenic Telecommunication Organization S.A., GDR
(Telecommunications) 574 $ 13,974
- -------------------------------------------------------------------------------
Ireland - 1.3%
Allied Irish Bank PLC (Banks and Credit Cos.) 483 $ 8,324
Jefferson Smurfit Group PLC (Paper Co.) 3,500 7,117
----------
$ 15,441
- -------------------------------------------------------------------------------
Italy - 5.7%
Instituto Nazionale delle Assicurazioni (Insurance) 5,413 $ 16,381
San Paolo Imi S.p.A (Banks and Credit Cos.)* 617 10,036
Telecom Italia S.p.A. (Telecommunications) 5,905 35,102
Unione Immobiliare (Real Estate)* 7,714 4,043
----------
$ 65,562
- -------------------------------------------------------------------------------
Japan - 8.4%
Canon, Inc. (Special Products and Services) 1,000 $ 24,747
Fujitsu Ltd. (Computer Hardware - Systems) 1,000 16,064
Olympus Optical Co. (Optical Goods) 1,000 13,176
Sanyo Coca Cola (Beverages) 1,000 21,959
Terumo Corp. (Pharmaceuticals) 1,000 19,975
----------
$ 95,921
- -------------------------------------------------------------------------------
Netherlands - 10.7%
Akzo Nobel N.V. (Chemicals) 367 $ 13,605
Benckiser N.V. "B" (Consumer Goods and Services) 297 16,676
Equant N.V. (Computer Software - Services)* 100 7,525
Hunter Douglas N.V., ADR (Consumer Goods and Services)* 688 20,077
IHC Caland N.V. (Marine Equipment)* 328 12,408
ING Groep N.V. (Financial Services)* 59 3,255
Koninklijke Ahold N.V., ADR (Food/Retail) 200 7,650
Royal Dutch Petroleum Co., ADR (Oils) 115 5,980
Unilever N.V. (Consumer Goods and Services) 120 7,972
Wolters Kluwer N.V. (Publishing)* 149 27,055
----------
$ 122,203
- -------------------------------------------------------------------------------
Portugal - 2.0%
Banco Pinto & Sotto Mayor S.A. (Banks and Credit Cos.) 713 $ 14,079
Electricidade de Portugal S.A. (Utilities - Electric) 446 8,812
----------
$ 22,891
- -------------------------------------------------------------------------------
Spain - 2.8%
Banco Popular Espanol S.A. (Banks And Credit Cos.) 100 $ 6,442
Telefonica de Espana (Utilities - Telephone) 595 25,266
----------
$ 31,708
- -------------------------------------------------------------------------------
Sweden - 3.1%
Astra AB (Pharmaceuticals) 345 $ 7,844
Ericsson LM, "B" (Telecommunication Equipment) 230 5,608
Saab AB, "B" (Aerospace)* 1,753 13,998
Skandia Forsakrings AB (Insurance) 460 8,580
----------
$ 36,030
- -------------------------------------------------------------------------------
Switzerland - 2.3%
Nestle S.A. (Food and Beverage Products) 6 $ 10,921
UBS AG (Banks and Credit Cos.)* 48 15,109
----------
$ 26,030
- -------------------------------------------------------------------------------
United Kingdom - 11.0%
Allied Zurich (Insurance)* 479 $ 6,455
Avis Europe PLC (Auto Rental) 1,447 5,488
BP Amoco PLC, ADR (Oils) 100 10,094
British Aerospace PLC (Aerospace and Defense)* 2,424 16,195
Cable & Wireless Communications PLC
(Telecommunications) 570 6,439
Compass Group (Consumer Goods & Services) 2,143 24,796
Rentokil Initial PLC, (Environmental Services) 859 5,268
Reuters Group PLC (Business Services) 1,230 18,024
Tomkins PLC (Conglomerate) 1,708 6,284
Williams PLC (Conglomerate) 4,201 27,118
----------
$ 126,161
- -------------------------------------------------------------------------------
Total Foreign Stocks $ 842,803
- -------------------------------------------------------------------------------
U.S. Stocks - 17.1%
Aerospace - 0.5%
Raytheon Co., "A" 100 $ 5,775
- -------------------------------------------------------------------------------
Automotive - 0.2%
Delphi Automotive Systems Corp.* 120 $ 2,130
- -------------------------------------------------------------------------------
Consumer Goods and Services - 2.2%
Newell Rubbermaid Inc.* 127 $ 6,032
Philip Morris Cos., Inc. 553 19,459
----------
$ 25,491
- -------------------------------------------------------------------------------
Electrical Equipment - 0.5%
Cooper Industries, Inc. 120 $ 5,115
- -------------------------------------------------------------------------------
Electronics - 1.8%
AMP, Inc. 392 $ 21,045
- -------------------------------------------------------------------------------
Food and Beverage Products - 1.5%
Anheuser-Busch Cos., Inc. 230 $ 17,523
- -------------------------------------------------------------------------------
Insurance - 2.9%
American International Group, Inc. 120 $ 14,475
ReliaStar Financial Corp. 446 19,011
----------
$ 33,486
- -------------------------------------------------------------------------------
Pharmaceuticals - 0.8%
Pharmacia & Upjohn, Inc. 140 $ 8,733
- -------------------------------------------------------------------------------
Special Products and Services - 5.0%
McDonald's Corp. 550 $ 24,922
Xerox Corp. 594 31,705
----------
$ 56,627
- -------------------------------------------------------------------------------
Stores - 0.7%
Rite Aid Corp. 297 $ 7,425
- -------------------------------------------------------------------------------
Telecommunications - 1.0%
Sprint Corp. 120 $ 11,775
- -------------------------------------------------------------------------------
Total U.S. Stocks $ 195,125
- -------------------------------------------------------------------------------
Total Stocks (Identified Cost, $950,261) $1,037,928
- -------------------------------------------------------------------------------
Short-Term Obligations - 7.4%
- -------------------------------------------------------------------------------
PRINCIPAL AMOUNT
(000 OMITTED)
- -------------------------------------------------------------------------------
Federal Home Loan Bank, due 4/01/99, at Amortized Cost $ 85 $ 85,000
- -------------------------------------------------------------------------------
Total Investments (Identified Cost, $1,035,261) $1,122,928
Other Assets, Less Liabilities - 1.9% 22,186
- -------------------------------------------------------------------------------
Net Assets - 100.0% $1,145,114
- -------------------------------------------------------------------------------
* Non-income producing security.
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Statements of Assets and Liabilities (Unaudited)
- ---------------------------------------------------------------------------------------------------------------
INTERNATIONAL
INTERNATIONAL STRATEGIC INTERNATIONAL
OPPORTUNITIES GROWTH VALUE
MARCH 31, 1999 FUND FUND FUND
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets:
Investments, at value (identified cost, $1,113,688,
$745,887 and $1,035,261, respectively) $1,145,239 $795,098 $1,122,928
Cash 13,583 1,636 1,818
Foreign currency, at value (identified cost $1,740,
$4,845 and $1,828, respectively) 1,607 4,642 1,683
Receivable for investments sold 60,453 25,270 23,636
Interest and dividends receivable 3,587 3,104 3,194
Other assets 15 13 7
---------- -------- ----------
Total assets $1,224,484 $829,763 $1,153,266
---------- -------- ----------
Liabilities:
Payable for Fund shares reacquired $ 203,266 $ -- $ --
Payable for investments purchased 16,992 19,458 8,098
Accrued expenses and other liabilities 49 44 54
---------- -------- ----------
Total liabilities $ 220,307 $ 19,502 $ 8,152
---------- -------- ----------
Net assets $1,004,177 $810,261 $1,145,114
========== ======== ==========
Net assets consist of:
Paid-in-capital $ 898,626 $636,945 $ 928,417
Unrealized appreciation on investments and
translation of assets and liabilities in foreign
currencies 31,433 48,977 87,518
Accumulated undistributed net realized gain on
investments and foreign currency transactions 78,818 127,624 134,072
Accumulated distributions in excess of net investment
income (4,700) (3,285) (4,893)
---------- -------- ----------
Total $1,004,177 $810,261 $1,145,114
========== ======== ==========
Shares of beneficial interest outstanding:
Class A 31,861 10,504 81,737
Class I 55,936 57,671 13,076
---------- -------- ----------
Total shares of beneficial interest outstanding 87,797 68,175 94,813
========== ======== ==========
Net assets:
Class A $ 364,318 $124,578 $ 987,098
Class I 639,859 685,683 158,016
---------- -------- ----------
Total net assets $1,004,177 $810,261 $1,145,114
========== ======== ==========
Class A shares:
Net asset value, offering price, and redemption price
per share (net assets / shares of beneficial interest
outstanding) $11.43 $11.86 $12.08
====== ====== ======
Class I shares:
Net asset value, offering price, and redemption price
per share (net assets / shares of beneficial interest
outstanding) $11.44 $11.89 $12.08
====== ====== ======
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Statements of Operations (Unaudited)
- ---------------------------------------------------------------------------------------------------------------
INTERNATIONAL
INTERNATIONAL STRATEGIC INTERNATIONAL
OPPORTUNITIES GROWTH VALUE
SIX MONTHS ENDED MARCH 31, 1999 FUND FUND FUND
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net investment loss:
Income -
Dividends $ 5,918 $ 6,099 $ 5,302
Interest 717 1,329 1,556
Foreign taxes withheld (452) (525) (321)
-------- -------- --------
Total investment income $ 6,183 $ 6,903 $ 6,537
-------- -------- --------
Expenses -
Management fee $ 5,885 $ 4,593 $ 6,083
Shareholder servicing agent fee 679 665 814
Distribution and service fee (Class A) 1,084 246 2,700
Administrative fee 133 109 132
Custodian fee 5,123 5,351 4,326
Printing 1,415 1,740 241
Postage 130 133 106
Auditing fees 5,007 6,407 5,714
Legal fees 1,934 1,716 1,454
Registration fees 2,886 3,161 1,484
Miscellaneous 546 412 21
-------- -------- --------
Total expenses $ 24,822 $ 24,533 $ 23,075
Fees paid indirectly (234) (70) (62)
Reduction of expenses by investment adviser and distributor (14,024) (16,219) (12,371)
-------- -------- --------
Net expenses $ 10,564 $ 8,244 $ 10,642
-------- -------- --------
Net investment loss $ (4,381) $ (1,341) $ (4,105)
-------- -------- --------
Realized and unrealized gain (loss) on investments:
Realized gain (identified cost basis) -
Investment transactions $ 98,121 $130,695 $148,361
Foreign currency transactions (2,701) (1,124) (461)
-------- -------- --------
Net realized gain on investments and foreign
currency transactions $ 95,420 $129,571 $147,900
-------- -------- --------
Change in unrealized appreciation (depreciation) -
Investments $143,130 $100,899 $61,218
Translation of assets and liabilities in foreign
currencies 741 335 (139)
-------- -------- --------
Net unrealized gain on investments and foreign
currency translation $143,871 $101,234 $ 61,079
-------- -------- --------
Net realized and unrealized gain on
investments and
foreign currency $239,291 $ 30,805 $208,979
-------- -------- --------
Increase in net assets from operations $234,910 $229,464 $204,874
======== ======== ========
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
- ---------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED PERIOD ENDED
MARCH 31, 1999 SEPTEMBER 30, 1998*
INTERNATIONAL OPPORTUNITIES FUND (UNAUDITED)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income (loss) $ (4,381) $ 7,483
Net realized gain (loss) on investments and foreign
currency transactions 95,420 (19,918)
Net unrealized gain (loss) on investments and foreign
currency translation 143,871 (112,438)
----------- -----------
Increase (decrease) in net assets from operations $ 234,910 $ (124,873)
----------- -----------
Distributions declared to shareholders -
From net investment income (Class A) $ (1,658) $ --
From net investment income (Class I) (2,828) --
----------- -----------
Total distributions declared to shareholders $ (4,486) $ --
----------- -----------
Net increase (decrease) in net assets from Fund share
transactions $ (491,521) $ 1,390,147
----------- -----------
Total increase (decrease) in net assets $ (261,097) $ 1,265,274
Net assets:
At beginning of period 1,265,274 --
----------- -----------
At end of period (including accumulated distributions in
excess of net investment income and accumulated
undistributed net investment income of $4,700 and $4,167,
respectively) $ 1,004,177 $ 1,265,274
=========== ===========
*For the period from the commencement of the Fund's investment operations, October 9, 1997, through September 30, 1998.
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
- ---------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED PERIOD ENDED
MARCH 31, 1999 SEPTEMBER 30, 1998*
INTERNATIONAL STRATEGIC GROWTH FUND (UNAUDITED)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income (loss) $ (1,341) $ 4,893
Net realized gain on investments and foreign currency
transactions 129,571 28,142
Net unrealized gain (loss) on investments and foreign currency
translation 101,234 (52,257)
----------- -----------
Increase (decrease) in net assets from operations $ 229,464 $ (19,222)
----------- -----------
Distributions declared to shareholders -
From net investment income (Class A) $ (335) $ --
From net investment income (Class I) (3,397) --
From net realized gain on investments and foreign currency
transactions
(Class A) (2,982) --
From net realized gain on investments and foreign currency
transactions
(Class I) (30,212) --
----------- -----------
Total distributions declared to shareholders $ (36,926) $ --
----------- -----------
Net increase (decrease) in net assets from Fund share
transactions $ (347,997) $ 984,942
----------- -----------
Total increase (decrease) in net assets $ (155,459) $ 965,720
Net assets:
At beginning of period 965,720 --
----------- -----------
At end of period (including accumulated distributions in
excess of net investment income and accumulated
undistributed net investment income of $(3,285) and $1,788,
respectively) $ 810,261 $ 965,720
=========== ===========
*For the period from the commencement of the Fund's investment operations, October 9, 1997, through September 30, 1998.
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
- ---------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED PERIOD ENDED
MARCH 31, 1999 SEPTEMBER 30, 1998*
INTERNATIONAL VALUE FUND (UNAUDITED)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income (loss) $ (4,105) $ 10,893
Net realized gain on investments and foreign currency
transactions 147,900 8,517
Net unrealized gain on investments and foreign
currency translation 61,079 26,439
----------- -----------
Increase in net assets from operations $ 204,874 $ 45,849
----------- -----------
Distributions declared to shareholders -
From net investment income (Class A) $ (10,246) $ --
From net investment income (Class I) (1,255) --
From net realized gain on investments and foreign
currency transactions
(Class A) (20,109) --
From net realized gain on investments and foreign
currency transactions
(Class I) (2,464) --
----------- -----------
Total distributions declared to shareholders $ (34,074) $ --
-----------
Net increase (decrease) in net assets from Fund share
transactions $ (140,029) $ 1,068,494
----------- -----------
Total increase in net assets $ 30,771 $ 1,114,343
Net assets:
At beginning of period 1,114,343 --
----------- -----------
At end of period (including accumulated distributions
in excess of net investment income and
undistributed net investment income of $(4,893) and
$10,713, respectively) $ 1,145,114 $ 1,114,343
=========== ===========
*For the period from the commencement of the Fund's investment operations, October 9, 1997, through September 30, 1998.
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights
- -----------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL OPPORTUNITIES FUND
- -----------------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED PERIOD ENDED SIX MONTHS ENDED PERIOD ENDED
MARCH, 31, 1999 SEPTEMBER 30, 1998* MARCH 31, 1999 SEPTEMBER 30, 1998*
(UNAUDITED) (UNAUDITED)
- -----------------------------------------------------------------------------------------------------------------------------
CLASS A CLASS I
- -----------------------------------------------------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
<S> <C> <C> <C> <C>
Net asset value - beginning of period $ 9.42 $ 10.00 $ 9.42 $ 10.00
------ ------- ------ --------
Income from investment operations# -
Net investment income (loss)(S) $(0.04) $ 0.06 $(0.04) $ 0.07
Net realized and unrealized gain (loss) on
investments and foreign currency 2.09 (0.64) 2.10 (0.65)
------ ------- ------ --------
Total from investment operations $ 2.05 $ (0.58) $ 2.06 $ (0.58)
------ ------- ------ --------
Less distributions declared to shareholders
from net investment income $(0.04) $ -- $(0.04) $ --
------ ------- ------ --------
Net asset value - end of period $11.43 $ 9.42 $11.44 $ 9.42
====== ======= ====== ========
Total return 21.68%++ (5.80)%++ 21.68%++ (5.80)%++
Ratios (to average net assets)/Supplemental data(S):
Expenses## 1.79%+ 1.75%+ 1.79%+ 1.75%+
Net investment income (loss) (0.72)%+ 0.54%+ (0.72)%+ 0.65%+
Portfolio turnover 88% 165% 88% 165%
Net assets at end of period (000 omitted) $ 364 $ 573 $ 640 $ 692
* For the period from the commencement of the Fund's investment operations, October 9, 1997, through September 30, 1998.
+ Annualized.
++ Not annualized.
# Per share data are based on average shares outstanding.
## The Fund has an expense offset arrangement which reduces the Fund's custodian fee based upon the amount of cash maintained
by the Fund with its custodian and dividend disbursing agent. The Fund's expenses are calculated without reduction for this
expense offset arrangement.
(S) Subject to reimbursement by the Fund, the investment adviser agreed to maintain the expenses of the Fund, exclusive of
management and distribution and service fees, at not more than 1.75% of average daily net assets. In addition, the investment
adviser and the distributor voluntarily waived their fees for certain of the periods indicated. To the extent actual expenses
were over this limitation and the waivers had not been in place, the net investment loss per share and the ratios would have
been:
Net investment loss $(0.18) $ (0.13) $(0.16) $ (0.07)
Ratios (to average net assets):
Expenses## 4.47%+ 3.57%+ 3.97%+ 3.07%+
Net investment loss (3.40)%+ (1.32)%+ (2.90)%+ (0.71)%+
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights - continued
- -----------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL STRATEGIC GROWTH FUND
- -----------------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED PERIOD ENDED SIX MONTHS ENDED PERIOD ENDED
MARCH, 31, 1999 SEPTEMBER 30, 1998* MARCH 31, 1999 SEPTEMBER 30, 1998*
(UNAUDITED) (UNAUDITED)
- -----------------------------------------------------------------------------------------------------------------------------
CLASS A CLASS I
- -----------------------------------------------------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
<S> <C> <C> <C> <C>
Net asset value - beginning of period $ 9.68 $10.00 $ 9.70 $10.00
------ ------ ------ ------
Income from investment operations# -
Net investment income (loss)(S) $(0.01) $ 0.04 $(0.02) $ 0.05
Net realized and unrealized gain (loss) on
investments and foreign currency 2.56 (0.36) 2.58 (0.35)
------ ------ ------ ------
Total from investment operations $ 2.55 $(0.32) $ 2.56 $(0.30)
------ ------ ------ ------
Less distributions declared to shareholders -
From net investment income $(0.04) $ -- $(0.04) $ --
From net realized gain on investments and
foreign currency transactions (0.33) -- (0.33) --
------ ------ ------ ------
Total distributions declared to
shareholders $(0.37) $ -- $(0.37) $ --
------ ------ ------ ------
Net asset value - end of period $11.86 $ 9.68 $11.89 $ 9.70
====== ====== ====== ======
Total return 26.67%++ (3.20)%++ 26.72%++ (3.00)%++
Ratios (to average net assets)/Supplemental data(S):
Expenses## 1.77%+ 1.77%+ 1.76%+ 1.77%+
Net investment income (loss) (0.29)%+ 0.34%+ (0.28)%+ 0.48%+
Portfolio turnover 77% 103% 77% 103%
Net assets at end of period (000 omitted) $124 $90 $686 $876
* For the period from the commencement of the Fund's investment operations, October 9, 1997, through September 30, 1998.
+ Annualized.
++ Not annualized.
# Per share data are based on average shares outstanding.
## The Fund has an expense offset arrangement which reduces the Fund's custodian fee based upon the amount of cash maintained
by the Fund with its custodian and dividend disbursing agent. The Fund's expenses are calculated without reduction for this
expense offset arrangement.
(S) Subject to reimbursement by the Fund, the investment adviser agreed to maintain the expenses of the Fund, exclusive of
management and distribution and service fees, at not more than 1.75% of average daily net assets. In addition, the
investment adviser and the distributor voluntarily waived their fees for certain of the periods indicated. To the extent
actual expenses were over this limitation and the waivers had not been in place, the net investment loss per share and the
ratios would have been:
Net investment loss $(0.21) $(0.20) $(0.21) $(0.13)
Ratios (to average net assets):
Expenses## 5.66%+ 3.88%+ 5.15%+ 3.38%+
Net investment loss (4.18)%+ (1.79)%+ (3.67)%+ (1.15)%+
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights - continued
- -----------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL VALUE FUND
- -----------------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED PERIOD ENDED SIX MONTHS ENDED PERIOD ENDED
MARCH, 31, 1999 SEPTEMBER 30, 1998* MARCH 31, 1999 SEPTEMBER 30, 1998*
(UNAUDITED) (UNAUDITED)
- -----------------------------------------------------------------------------------------------------------------------------
CLASS A CLASS I
- -----------------------------------------------------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
<S> <C> <C> <C> <C>
Net asset value - beginning of period $10.46 $10.00 $10.47 $10.00
------ ------ ------ ------
Income from investment operations# -
Net investment income (loss)(S) $(0.04) $ 0.10 $(0.04) $ 0.11
Net realized and unrealized gain on
investments and foreign currency 1.98 0.36 1.97 0.36
------ ------ ------ ------
Total from investment operations $ 1.94 $ 0.46 $ 1.93 $ 0.47
------ ------ ------ ------
Less distributions declared to shareholders -
From net investment income $(0.11) $ -- $(0.11) $ --
From net realized gain on investments and
foreign currency transactions (0.21) -- (0.21) --
------ ------ ------ ------
Total distributions declared to
shareholders $(0.32) $ -- $(0.32) $ --
------ ------ ------ ------
Net asset value - end of period $12.08 $10.46 $12.08 $10.47
====== ====== ====== ======
Total return 18.43%++ 4.70%++ 18.52%++ 4.70%++
Ratios (to average net assets)/Supplemental data(S):
Expenses## 1.76%+ 1.77%+ 1.76%+ 1.77%+
Net investment income (loss) (0.68)%+ 0.98%+ (0.66)%+ 1.00%+
Portfolio turnover 58% 71% 58% 71%
Net assets at end of period (000 omitted) $987 $1,002 $158 $112
* For the period from the commencement of the Fund's investment operations, October 9, 1997, through September 30, 1998.
+ Annualized.
++ Not annualized.
# Per share data are based on average shares outstanding.
## The Fund has an expense offset arrangement which reduces the Fund's custodian fee based upon the amount of cash maintained
by the Fund with its custodian and dividend disbursing agent. The Fund's expenses are calculated without reduction for this
expense offset arrangement.
(S) Subject to reimbursement by the Fund, the investment adviser agreed to maintain the expenses of the Fund, exclusive of
management and distribution and service fees, at not more than 1.75% of the average daily net assets. In addition, the
investment adviser and the distributor voluntarily waived their fees for certain of the periods indicated. To the extent
actual expenses were over this limitation and the waivers had not been in place, the net investment loss per share and the
ratios would have been:
Net investment loss $(0.16) $(0.13) $(0.13) $(0.07)
Ratios (to average net assets):
Expenses## 3.85%+ 3.92%+ 3.35%+ 3.42%+
Net investment loss (2.77)%+ (1.17)%+ (2.25)%+ (0.65)%+
</TABLE>
See notes to financial statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
(1) Business and Organization
MFS International Opportunities Fund, MFS International Strategic Growth Fund
and MFS International Value Fund (the Funds) are 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
General - The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. Investments
in foreign securities are vulnerable to the effects of changes in the relative
values of the local currency and the U.S. dollar and to the effects of changes
in each country's legal, political, and economic environment.
Investment Valuations - Equity securities listed on securities exchanges or
reported through the NASDAQ system are reported at market value using last sale
prices. Unlisted equity securities or listed equity securities for which last
sale prices are not available are reported at market value using last quoted bid
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 - Each 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. Each Fund may enter into
forward contracts for hedging purposes as well as for non-hedging purposes. For
hedging purposes, each Fund may enter into contracts to deliver or receive
foreign currency it will receive from or require for its normal investment
activities. They 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, each Fund may enter into
contracts with the intent of changing the relative exposure of each 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 as unrealized until the contract settlement date. On contract
settlement date, the gains or losses are recorded as realized gains or losses on
foreign currency transactions.
Investment Transactions and Income - Investment transactions are recorded on the
trade date. Interest income is recorded on the accrual basis. All discount is
accreted for financial statement and tax reporting purposes as required by
federal income tax regulations. Dividends received in cash are recorded on the
ex-dividend date. 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 - Each Fund's custody fee is calculated as a percentage of
the Fund's month end net assets. The fee is reduced according to an arrangement
that measures 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 - Each 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 taxable
income, including any net realized gain on investments. Accordingly, no
provision for federal income or excise tax is provided. Each 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.
Distributions to shareholders are recorded on the ex-dividend date. Each 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 distributions from paid-in
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 net realized gains.
Multiple Classes of Shares of Beneficial Interest - The Funds offer multiple
classes of shares, which differ in their respective distribution and service
fees. All shareholders bear the common expenses of the Fund based on 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 - Each 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 the following annual rates:
First $500 million of average net assets 0.975%
Average net assets in excess of $500 million 0.925%
The investment adviser has voluntarily agreed to waive its fee, which is
reflected as a reduction of expenses in the Statement of Operations.
Each Fund has a temporary expense reimbursement agreement whereby MFS has
voluntarily agreed to pay all of these Funds' operating expenses, exclusive of
management, and distribution and service fees. Each of these Funds in turn will
pay MFS an expense reimbursement fee not greater than 1.75% of average daily net
assets. To the extent that the expense reimbursement fee exceeds each Fund's
actual expenses, the excess will be applied to amounts paid by MFS in prior
years. At March 31, 1999, the aggregate unreimbursed expenses owed to MFS by the
Funds amounted to:
INTERNATIONAL INTERNATIONAL INTERNATIONAL
OPPORTUNITIES STRATEGIC GROWTH VALUE
FUND FUND FUND
----------------------------------------------------------------
$11,400 $18,517 $11,126
Each 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 officers and Trustees of the
Fund are officers or directors of MFS, MFS Fund Distributors, Inc. (MFD), and
MFS Service Center, Inc. (MFSC). The Trustees are currently not receiving any
payments for their services to each Fund.
Administrator - Each Fund has an administrative services agreement with MFS to
provide each Fund with certain financial, legal, shareholder servicing,
compliance, and other administrative services. As a partial reimbursement for
the cost of providing these services, each Fund pays MFS an administrative fee
at the following annual percentages of the Fund's average daily net assets:
First $1 billion 0.0150%
Next $1 billion 0.0125%
Next $1 billion 0.0100%
In excess of $3 billion 0.0000%
Distributor - MFD, a wholly owned subsidiary of MFS, as distributor, did not
receive any sales charges on sales on Class A shares of each Fund for the six
months ended March 31, 1999.
The Trustees have adopted a distribution plan for Class A shares pursuant to
Rule 12b-1 of the Investment Company Act of 1940 as follows:
Each Fund's distribution plan provides that each Fund will pay MFD up to 0.50%
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
paid to each securities dealer that enters into a sales agreement with MFD of up
to 0.25% per annum of each Fund's average daily net assets attributable to Class
A shares which are attributable to that securities dealer and a distribution fee
to MFD of up to 0.25% per annum of each Fund's average daily net assets
attributable to Class A shares. Distribution and service fees under the Class A
distribution plan are currently being waived.
Certain Class A shares are subject to a contingent deferred sales charge in the
event of a shareholder redemption within 12 months following purchase. There
were no contingent deferred sales charges imposed during the six months ended
March 31, 1999, on Class A shares of each Fund.
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 Fund's average daily net assets at an effective annual rate of
0.1125%.
(4) Portfolio Securities
Purchases and sales of investments, other than purchased option transactions and
short-term obligations, were as follows:
<TABLE>
<CAPTION>
INTERNATIONAL INTERNATIONAL INTERNATIONAL
OPPORTUNITIES STRATEGIC GROWTH VALUE
FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Purchases
Investments (non-U.S. government securities) $1,026,760 $ 659,909 $654,981
---------- ---------- --------
Sales
Investments (non-U.S. government securities) $1,224,739 $1,013,014 $841,401
---------- ---------- --------
The cost and unrealized appreciation and depreciation in the value of the investments owned by each Fund, as computed on a federal
income tax basis, are as follows:
<CAPTION>
INTERNATIONAL INTERNATIONAL INTERNATIONAL
OPPORTUNITIES STRATEGIC GROWTH VALUE
FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Aggregate cost $1,113,688 $745,887 $1,035,261
---------- -------- ----------
Gross unrealized appreciation $ 107,576 $ 78,523 $ 130,529
Gross unrealized depreciation (76,025) (29,312) (42,862)
---------- -------- ----------
Net unrealized appreciation $ 31,551 $ 49,211 $ 87,667
========== ======== ==========
</TABLE>
(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. Transactions in
Fund shares were as follows:
Class A Shares
SIX MONTHS ENDED MARCH 31, 1999
-----------------------------------------
INTERNATIONAL INTERNATIONAL
OPPORTUNITIES STRATEGIC GROWTH
FUND FUND
------------------- -------------------
SHARES AMOUNT SHARES AMOUNT
-----------------------------------------
Shares sold 64 $ 615 1,325 $ 14,919
Shares issued to shareholders in
reinvestment of distributions 159 1,657 320 3,315
Shares reacquired (29,168) (295,763) (423) (4,449)
------- --------- ------- ---------
Net increase (decrease) (28,945) $(293,491) 1,222 $ 13,785
======= ========= ======= =========
Class A Shares
INTERNATIONAL
VALUE FUND
-------------------
SHARES AMOUNT
-------------------
Shares sold 279 $ 3,220
Shares issued to shareholders in
reinvestment of distributions 2,693 30,353
Shares reacquired (16,990) (200,000)
------- ---------
Net decrease $
(14,018) (166,427)
======= =========
Class I Shares
SIX MONTHS ENDED MARCH 31, 1999
-----------------------------------------
INTERNATIONAL INTERNATIONAL
OPPORTUNITIES STRATEGIC GROWTH
FUND FUND
------------------- -------------------
SHARES AMOUNT SHARES AMOUNT
-----------------------------------------
Shares sold 5,606 $ 60,589 8,566 $ 94,808
Shares issued to shareholders in
reinvestment of distributions 271 2,828 3,241 33,607
Shares reacquired (23,398) (261,447) (44,443) (490,197)
------- --------- ------- ---------
Net decrease (17,521) $(198,030) (32,636) $(361,782)
======= ========= ======= =========
Class I Shares
INTERNATIONAL
VALUE FUND
-------------------
SHARES AMOUNT
-------------------
Shares sold 2,001 $ 22,681
Shares issued to shareholders in
reinvestment of distributions 330 3,717
------- ---------
Net increase 2,331 $ 26,398
======= =========
Class A Shares
PERIOD ENDED SEPTEMBER 30, 1998*
-----------------------------------------
INTERNATIONAL INTERNATIONAL
OPPORTUNITIES STRATEGIC GROWTH
FUND FUND
------------------- -------------------
SHARES AMOUNT SHARES AMOUNT
-----------------------------------------
Shares sold 75,967 $ 780,005 38,708 $ 388,757
Shares reacquired (15,161) (153,975) (29,426) (342,377)
------- --------- ------- ---------
Net increase 60,806 $ 626,030 9,282 $ 46,380
======= ========= ======= =========
Class A Shares
INTERNATIONAL
VALUE FUND
-------------------
SHARES AMOUNT
-------------------
Shares sold 96,025 $ 960,810
Shares reacquired (270) (3,059)
------- ---------
Net increase 95,755 $ 957,751
======= =========
Class I Shares
PERIOD ENDED SEPTEMBER 30, 1998*
-----------------------------------------
INTERNATIONAL INTERNATIONAL
OPPORTUNITIES STRATEGIC GROWTH
FUND FUND
------------------- -------------------
SHARES AMOUNT SHARES AMOUNT
-----------------------------------------
Shares sold 73,457 $ 764,117 92,832 $ 965,533
Shares reacquired -- -- (2,525) (26,971)
------- --------- ------- ---------
Net increase 73,457 $ 764,117 90,307 $ 938,562
======= ========= ======= =========
Class I Shares
INTERNATIONAL
VALUE FUND
-------------------
SHARES AMOUNT
-------------------
Shares sold 10,745 $ 110,743
------- ---------
Net increase 10,745 $ 110,743
======= =========
* For the period from the commencement of each Fund's investment operations,
October 9, 1997, through September 30, 1998.
(6) Line of Credit
Each Fund and other affiliated funds participate in a $720 million unsecured
line of credit provided by a syndication of banks under a line of credit
agreement. 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
each Fund for the six months ended March 31, 1999, were as follows:
INTERNATIONAL INTERNATIONAL INTERNATIONAL
OPPORTUNITIES STRATEGIC GROWTH VALUE
FUND FUND FUND
-----------------------------------------------------------------------
$5 $4 $4
(7) Restricted Security
Each Fund may invest not more than 15% of its net assets in securities which
are subject to legal or contractual restrictions on resale. At March 31, 1999,
the International Opportunities Fund owned the following restricted security
which may not be publicly sold without registration under the Securities Act
of 1933. The Fund does not have the right to demand that such security be
registered. The value of this security is determined by valuations furnished
by dealers or by a pricing service, or if not available, is valued at fair
value as determined in good faith by or at the direction of the Trustees.
<TABLE>
<CAPTION>
DATE OF % OF
DESCRIPTION ACQUISITION SHARE COST VALUE NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Hong Leong Finance 10/13/97 5,000 $8,002 $8,169 0.81%
</TABLE>
--------------------------------
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.
<PAGE>
MFS(R) INTERNATIONAL OPPORTUNITIES FUND
MFS(R) INTERNATIONAL STRATEGIC GROWTH FUND
MFS(R) INTERNATIONAL VALUE FUND
[LOGO] M F S(R)
INVESTMENT MANAGEMENT
We invented the mutual fund(R)
500 Boylston Street
Boston, MA 02116-3741
(C)1999 MFS Fund Distributors, Inc., 500 Boylston Street, Boston, MA 02116-3741
INCA-3 5/99 2M
