MFS GOVERNMENT SECURITIES FUND, 485B24E, 1996-06-27

MFS GOVERNMENT SECURITIES FUND
485B24E, 1996-06-27

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<PAGE>

As filed with the Securities and Exchange Commission on June 27, 1996

1933 Act File No. 2-74959
1940 Act File No. 811-3327

===============================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM N-1A
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 19
AND
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 20

MFS GOVERNMENT SECURITIES FUND
(Exact name of Registrant as specified in Charter)

500 Boylston, Street, Boston, Massachusetts 02116
(Address of principal executive offices)

Registrant's Telephone Number, Including Area Code: 617-954-5000
Stephen E. Cavan, Massachusetts Financial Services Company,
500 Boylston Street, Boston, Massachusetts 02116
(Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering:
It is proposed that this filing will become effective (check appropriate box)

|_| immediately upon filing pursuant to paragraph (b)
|X| on June 28, 1996 pursuant to paragraph (b)

|_| 60 days after filing pursuant to paragraph (a)(i)
|_| on [date] pursuant to paragraph (a)(i)
|_| 75 days after filing pursuant to paragraph (a)(ii)
|_| on [date] pursuant to paragraph (a)(ii) of rule 485.

If appropriate, check the following box:
|_| this post-effective amendment designates a new effective date for a
previously filed post-effective amendment

Pursuant to Rule 24f-2, the Registrant has registered an indefinite number of
its Shares of Beneficial Interest (without par value), under the Securities Act
of 1933. The Registrant filed a Rule 24f-2 Notice with respect to its fiscal
year ended February 28, 1996 on April 25, 1996.

<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- --------------------------- -------------------- -------------------------- --------------------------- --------------------
TITLE OF SECURITIES NUMBER OF SHARES PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
BEING REGISTERED BEING REGISTERED OFFERING PRICE PER SHARE AGGREGATE OFFERING PRICE REGISTRATION FEE
- --------------------------- -------------------- -------------------------- --------------------------- --------------------
<S> <C> <C> <C> <C>
Shares of Beneficial
Interest (without par $1,519,408 $9.25 $290,000 $100
value)
- --------------------------- -------------------- -------------------------- --------------------------- --------------------
Registrant elects to calculate the maximum aggregate offering price pursuant to Rule 24e-2. 14,656,218 shares were
redeemed during the fiscal year ended February 28, 1996. 13,168,161 shares were used for reductions pursuant to
paragraph (c) of Rule 24f-2 during the current fiscal year. 1,488,057 shares is the amount of redeemed shares used for
reduction in this Amendment. Pursuant to Rule 457(d) under the Securities Act of 1933, the maximum public offering price
of $9.25 per share on June 14, 1996 is the price used as the basis for calculating the registration fee. While no fee is
required for the 1,488,057 shares, Registrant has elected to register, for $100, an additional $290,000 of shares (31,351
shares at $9.25 per share).
===========================================================================================================================
</TABLE>

<PAGE>
MFS GOVERNMENT SECURITIES FUND

CROSS REFERENCE SHEET

(Pursuant to Rule 404 showing location in Prospectus and/or Statement
of Additional Information of the responses to the Items in Parts A and B of Form
N-1A)

<TABLE>
<CAPTION>
ITEM NUMBER STATEMENT OF ADDITIONAL
FORM N-1A, PART A PROSPECTUS CAPTION INFORMATION
- ----------------- ------------------ -----------------------
<C> <S> <C>
1 (a), (b) Front Cover Page *

2 (a) Expense Summary *

(b), (c) * *

3 (a) Condensed Financial Information *

(b) * *

(d) Performance Information *

4 (a) The Fund; Investment Objective and *
Policies

(b), (c) Investment Objective and Policies *

5 (a) The Fund; Management of the Fund - *
Investment Adviser

(b) Front Cover Page; Management of *
the Fund - Investment Adviser;
Back Cover Page

(d) * *

(e) Management of the Fund - Investment *
Adviser; Back Cover Page

(f) Expense Summary; Condensed *
Financial Information
<FN>
- -----------------------------
* Not Applicable
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
ITEM NUMBER STATEMENT OF ADDITIONAL
FORM N-1A, PART A PROSPECTUS CAPTION INFORMATION
- ----------------- ------------------ -----------------------
<C> <S> <C>
(g) Investment Objective and Policies; *
Information Concerning Shares
of the Fund - Purchases

5A (a), (b), (c) ** **

6 (a) Information Concerning Shares of
the Fund - Purchases; Information
Concerning Shares of the Fund -
Exchanges; Information Concerning
Shares of the Fund - Description of
Shares, Voting Rights and Liabilities;
Information Concerning Shares of
the Fund - Redemptions and
Repurchases

(b), (c), (d) * *

(e) Shareholder Services *

(f) Information Concerning Shares of *
the Fund - Distributions; Shareholder
Services - Distribution Options

(g) Information Concerning Shares of *
the Fund - Tax Status; Information
Concerning Shares of the Fund -
Distributions

(h) * *

7 (a) Front Cover Page; Management of *
the Fund - Distributor; Back Cover
Page

(b) Information Concerning Shares of *
the Fund - Purchases; Information
Concerning Shares of the Fund -
Net Asset Value

(c) Information Concerning Shares of *
the Fund - Purchases; Information
Concerning Shares of the Fund -
Exchanges; Shareholder Services

<FN>
- -----------------------------
* Not Applicable
** Contained in annual report
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
ITEM NUMBER STATEMENT OF ADDITIONAL
FORM N-1A, PART A PROSPECTUS CAPTION INFORMATION
- ----------------- ------------------ -----------------------
<C> <S> <C>
(d) Front Cover Page; Information Concerning *
Shares of the Fund - Purchases;
Shareholder Services

(e) Information Concerning Shares of *
the Fund - Distribution Plans;
Expense Summary; Information
Concerning Shares of the Fund -
Purchases

(f) Information Concerning Shares of *
the Fund - Distribution Plans

8 (a) Information Concerning Shares of *
the Fund - Redemptions and
Repurchases; Information
Concerning Shares of the Fund -
Purchases; Shareholder Services

(b), (c), (d) Information Concerning Shares of *
the Fund - Redemptions and
Repurchases

9 * *
<FN>
- -----------------------------
* Not Applicable
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
ITEM NUMBER STATEMENT OF ADDITIONAL
FORM N-1A, PART B PROSPECTUS CAPTION INFORMATION
- ----------------- ------------------ -----------------------
<C> <S> <C>
10 (a), (b) * Front Cover Page

11 * Front Cover Page

12 The Fund Definitions; The Fund

13 (a), (b), (c), * Investment Objective,Policies and
Restrictions

(d) * *

14 (a), (b), (c) * Management of the Fund -Trustees
and Officers; Management of the
Fund -Trustees and Officers;
Appendix A

15 (a) * *

(b), (c) * Management of the Fund - Trustees
and Officers

16 (a) Management of the Fund - Management of the Fund -
Investment Adviser Investment Adviser; Management
of the Fund - Trustees and Officers

(b) Management of the Fund - Management of the Fund -
Investment Adviser Investment Adviser; Management

(d) * Management of the Fund -
Investment Adviser

(e) * Portfolio Trading

(f) Information Concerning Shares Distribution Plans
of the Fund - Distribution Plans

(g) * *

(h) * Management of the Fund -
Custodian; Independent
Accountants and Financial
Statements; Back Cover Page

<FN>
- -----------------------------
* Not Applicable
</TABLE>

17 (a), (b), (c) * Portfolio Trading
(d), (e)

18 (a) Information Concerning Shares Description of Shares, Voting
of the Fund - Description of Rights and Liabilities
Shares, Voting Rights and
Liabilities

(b) * *

19 (a) Information Concerning Shares Shareholder Services
of the Fund - Purchases;
Shareholder Services

(b) Information Concerning Shares Management of the Fund -
of the Fund - Net Asset Value; Distributor; Determination of
Information Concerning Shares Net Assets Value and
of the Fund - Purchases Performance - Net Asset Value

20 * Tax Status

21 (a), (b) * Management of the Fund -
Distributor; Distribution Plans

22 (a) * *

(b) * Determination of Net Asset Value
and Performance

23 * Independent Accountants and
Financial Statements

<FN>
- -----------------------------
* Not Applicable
</TABLE>
<PAGE>

PROSPECTUS
July 1, 1996
MFS(R) GOVERNMENT Class A Shares of Beneficial Interest
SECURITIES FUND Class B Shares of Beneficial Interest
(A member of the MFS Family of Funds(R)) Class C Shares of Beneficial Interest
- -------------------------------------------------------------------------------
Page
----
1. Expense Summary .............................................. 2
2. The Fund ..................................................... 3
3. Condensed Financial Information .............................. 4
4. Investment Objective and Policies ............................ 5
5. Management of the Fund ....................................... 8
6. Information Concerning Shares of the Fund .................... 10
Purchases ................................................. 10
Exchanges ................................................. 13
Redemptions and Repurchases ............................... 14
Distribution Plans ........................................ 17
Distributions ............................................. 19
Tax Status ................................................ 19
Net Asset Value ........................................... 19
Description of Shares, Voting Rights and Liabilities ...... 20
Performance Information ................................... 20
7. Shareholder Services ......................................... 21
Appendix A ................................................... A-1
Appendix B ................................................... B-1

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

MFS GOVERNMENT SECURITIES FUND
500 Boylston Street, Boston, MA 02116 (617) 954-5000
The investment objective of MFS Government Securities Fund (the "Fund") is to
provide current income and preservation of principal. The Fund seeks to
achieve this objective by investing in securities that are issued or
guaranteed as to principal and interest by the U.S. Government, its agencies,
authorities or instrumentalities ("Government Securities") and by investing in
obligations that are fully collateralized or otherwise fully secured by
Government Securities (see "Investment Objective and Policies" below). The
minimum initial investment is generally $1,000 per account (see "Purchases"
below).

The Fund's investment adviser and distributor are Massachusetts Financial
Services Company ("MFS" or the "Adviser") and MFS Fund Distributors, Inc.
("MFD"), respectively, both of which are located at 500 Boylston Street,
Boston, Massachusetts 02116.

INVESTMENT PRODUCTS ARE NOT INSURED BY THE FDIC OR ANY OTHER GOVERNMENT
AGENCY, AND ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR GUARANTEED BY, ANY
FINANCIAL INSTITUTION. SHARES OF MUTUAL FUNDS ARE SUBJECT TO INVESTMENT RISK,
INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED, AND WILL FLUCTUATE
IN VALUE. YOU MAY RECEIVE MORE OR LESS THAN YOU PAID WHEN YOU REDEEM YOUR
SHARES.

This Prospectus sets forth concisely the information concerning the Fund that
a prospective investor ought to know before investing. The Fund has filed with
the Securities and Exchange Commission ("SEC") a Statement of Additional
Information, dated July 1, 1996, as amended or supplemented from time to time
(the "SAI"), which contains more detailed information about the Fund and is
incorporated into this Prospectus by reference. See page 22 for a further
description of the information set forth in the SAI. A copy of the SAI may be
obtained without charge by contacting the Shareholder Servicing Agent (see
back cover for address and phone number).

INVESTORS SHOULD READ THIS PROSPECTUS AND RETAIN IT FOR FUTURE REFERENCE.
<PAGE>
<TABLE>
<CAPTION>
1. EXPENSE SUMMARY
CLASS A CLASS B CLASS C
------- ------- -------
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Initial Sales Charge Imposed on Purchases of Fund Shares
(as a percentage of offering price) ............................ 4.75% 0.00% 0.00%
Maximum Contingent Deferred Sales Charge (as a percentage of
original purchase price or redemption proceeds, as applicable) . See Below(1) 4.00% 1.00%

ANNUAL OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS):
Management Fees (after applicable fee reduction)(2)............... 0.25% 0.25% 0.25%
Rule 12b-1 Fees .................................................. 0.35%(3) 1.00%(4) 1.00%(4)
Other Expenses(5) ................................................ 0.30% 0.37% 0.30%
--- --- ---
Total Operating Expenses (after applicable fee reduction)(6) ..... 0.90% 1.62% 1.55%
</TABLE>
- ----------
(1)Purchases of $1 million or more and certain purchases by retirement plans
are not subject to an initial sales charge; however, a contingent deferred
sales charge ("CDSC") of 1% will be imposed on such purchases in the event
of certain redemption transactions within 12 months following such
purchases (see "Information Concerning Shares of the Fund -- Purchases"
below).
(2)The Adviser has voluntarily reduced its management fee to 0.25% per annum
of the Fund's average daily net assets for an indefinite period of time.
Absent such reduction, "Management Fees" would have been 0.40%.
(3)The Fund has adopted a Distribution Plan for its Class A shares in
accordance with Rule 12b-1 under the Investment Company Act of 1940, as
amended (the "1940 Act"), which provides that it will pay distribution/
service fees aggregating up to (but not necessarily all of) 0.35% per annum
of the average daily net assets attributable to Class A shares (see
"Information Concerning Shares of the Fund -- Distribution Plans" below).
Distribution expenses paid under this plan, together with the initial sales
charge, may cause long-term shareholders to pay more than the maximum sales
charge that would have been permissible if imposed entirely as an initial
sales charge.
(4)The Fund has adopted Distribution Plans for its Class B and its Class C
shares in accordance with Rule 12b-1 under the 1940 Act, which provide that
the Fund will pay distribution/service fees aggregating up to (but not
necessarily all of) 1.00% per annum of the average daily net assets
attributable to the Class B shares under the Class B Distribution Plan and
Class C shares under the Class C Distribution Plan (see "Information
Concerning Shares of the Fund -- Distribution Plans" below). Distribution
expenses paid under these plans, together with any CDSC payable upon
redemption of Class B and Class C shares, may cause long-term shareholders
to pay more than the maximum sales charge that would have been permissible
if imposed entirely as an initial sales charge.
(5)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, and may enter into other such
arrangements and directed brokerage arrangements (which would also have the
effect of reducing the Fund's expenses). Any such fee reductions are not
reflected under "Other Expenses."
(6)Absent the reduction in the Fund's management fees, "Total Operating
Expenses" for Class A, Class B and Class C shares of the Fund would have
been 1.05%, 1.77% and 1.70%, respectively, of the Fund's average daily net
assets attributable to such shares on an annualized basis.
<PAGE>
EXAMPLE OF EXPENSES
-------------------

An investor would pay the following dollar amounts of expenses on a $1,000
investment in the Fund, assuming (a) 5% annual return and (b) redemption at
the end of each of the time periods indicated (unless otherwise noted):

<TABLE>

<CAPTION>
PERIOD CLASS A CLASS B CLASS C
------ ---- ----------------------------- -----------------------------
<S> <C> <C> <C> <C> <C>
(1) (1)
1 year ....................................... $ 56 $ 56 $ 16 $ 26 $ 16
3 years ...................................... 75 81 51 49 49
5 years ...................................... 95 108
10 years ...................................... 153 173(2)
</TABLE>

- ----------
(1) Assumes no redemption.
(2) Class B shares convert to Class A shares approximately eight years after
purchase; therefore, years nine and ten reflect Class A expenses.

The purpose of the expense table above is to assist investors in understanding
the various costs and expenses that a shareholder of the Fund will bear
directly or indirectly. More complete descriptions of the following expenses
of the Fund are set forth in the following sections of this Prospectus: (i)
varying sales charges on share purchases -- "Purchases"; (ii) varying CDSCs --
"Purchases"; (iii) management fees -- "Investment Adviser"; and (iv) Rule 12b-
1 (i.e., distribution plan) fees -- "Distribution Plans."

THE "EXAMPLE" SET FORTH ABOVE SHOULD NOT BE CONSIDERED A REPRESENTATION OF
PAST OR FUTURE EXPENSES OF THE FUND; ACTUAL EXPENSES MAY BE GREATER OR LESS
THAN THOSE SHOWN.

2. THE FUND
The Fund is an open-end, diversified management investment company which was
organized as a business trust under the laws of The Commonwealth of
Massachusetts in 1981, but which commenced business with its current
investment objective in 1984. Shares of the Fund are sold continuously to the
public and the Fund then uses the proceeds to buy securities for its
portfolio. Three classes of shares of the Fund currently are offered for sale
to the general public. Class A shares are offered at net asset value plus an
initial sales charge up to a maximum of 4.75% of the offering price (or a CDSC
upon redemption of 1.00% during the first year in the case of purchases of $1
million or more and certain purchases by retirement plans) and subject to an
annual distribution fee and service fee up to a maximum of 0.35% per annum.
Class B shares are offered at net asset value without an initial sales charge
but subject to a CDSC upon redemption (declining from 4.00% during the first
year to 0% after six years) and an annual distribution fee and service fee up
to a maximum of 1.00% per annum; Class B shares will convert to Class A shares
approximately eight years after purchase. Class C shares are offered at net
asset value without an initial sales charge but are subject to a CDSC upon
redemption of 1.00% during the first year and an annual distribution fee and
service fee up to a maximum of 1.00% per annum. Class C shares do not convert
to any other class of shares of the Fund.

The Board of Trustees provides broad supervision over the affairs of the Fund.
MFS is the Fund's investment adviser. A majority of the Trustees are not
affiliated with the Adviser. The Adviser is responsible for the management of
the Fund's assets and the officers of the Fund are responsible for its
operations. The Adviser manages the portfolio from day to day in accordance
with the Fund's investment objective and policies. The selection of
investments and the way they are managed depend on the conditions and trends
in the economy and the financial marketplaces. The Fund also offers to buy
back (redeem) its shares from its shareholders at any time at net asset value
less any applicable CDSC.
<PAGE>

3. CONDENSED FINANCIAL INFORMATION
The following information has been audited for at least the latest five fiscal
years of the Fund and should be read in conjunction with the financial
statements included in the Fund's Annual Report to shareholders which are
incorporated by reference into the SAI in reliance upon the report of the Fund's
independent auditors given upon their authority as experts in accounting and
auditing. The Fund's current independent auditors are Deloitte & Touche LLP.
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS

ELEVEN MONTHS
YEAR ENDED YEAR ENDED ENDED YEAR ENDED MARCH 31,
FEBRUARY 29, FEBRUARY 28, FEBRUARY 28, ---------------------------------------
1996 1995 1994 1993 1992 1991 1990
- ------------------------------------------------------------------------------------------------------------------
CLASS A
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD):
Net asset value --
beginning of period $ 9.22 $ 9.79 $10.00 $ 9.43 $ 9.29 $ 9.10 $ 9.05
------ ------ ------ ------ ------ ------ ------
Income from investment operations<F3> --
Net investment income<F6> $ 0.66 $ 0.67 $ 0.63 $ 0.67 $ 0.75 $ 0.78 $ 0.82
Net realized and unrealized
gain (loss) on investments 0.45 (0.58) (0.20) 0.60 0.14 0.19 0.04
------ ------ ------ ------ ------ ------ ------
Total from investment
operations $ 1.11 $ 0.09 $ 0.43 $ 1.27 $ 0.89 $ 0.97 $ 0.86
------ ------ ------ ------ ------ ------ ------
Less distributions declared to shareholders --
From net investment income $(0.66) $(0.66) $(0.58)<F5> $(0.70) $(0.75) $(0.78) $(0.81)
In excess of net realized
gains on investments -- -- (0.06) -- -- -- --
------ ------ ------ ------ ------ ------ ------
Total distributions
declared to shareholders $(0.66) $(0.66) $(0.64) $(0.70) $(0.75) $(0.78) $(0.81)
------ ------ ------ ------ ------ ------ ------
Net asset value --
end of period $ 9.67 $ 9.22 $ 9.79 $10.00 $ 9.43 $ 9.29 $ 9.10
====== ====== ====== ====== ====== ====== ======
Total return<F2> 12.29% 1.21% 6.57%<F1> 13.94% 9.96% 11.13% 9.72%

RATIOS (TO AVERAGE NET ASSETS)/SUPPLEMENTAL DATA(S):
Expenses<F4> 0.84% 0.79% 0.68%<F1> 1.20% 1.25% 1.28% 1.29%
Net investment income 6.83% 7.24% 6.83%<F1> 7.18% 7.95% 8.56% 8.81%
PORTFOLIO TURNOVER 352% 385% 167% 264% 270% 95% 260%
NET ASSETS AT END OF
PERIOD (000 OMITTED) $322,740 $318,116 $372,702 $356,735 $356,366 $323,612 $327,877
<FN>
- ----------
<F1> Annualized.
<F2> Total returns for Class A shares do not include the applicable sales charge (except for reinvestment
dividends prior to October 1, 1989). If the charge had been included, the results would have been lower.
<F3> Per share data for the periods subsequent to February 28, 1994 is based on average shares outstanding.
<F4> For fiscal years ending after September 1, 1995, the Fund's expenses are calculated without reduction for
fees paid indirectly.
<F5> Amount includes distribution in excess of net investment income of less than $0.001 per share for the
period indicated.
<F6> The investment adviser did not impose a portion of its management fee for certain of the periods
indicated. If this fee had been incurred by the Fund, the net investment income per share and ratios
would have been:

Net investment income $ 0.64 $ 0.65 $ 0.59
RATIOS (TO AVERAGE NET ASSETS):
Expenses 1.05% 1.05% 1.17%+
Net investment income 6.62% 6.98% 6.34%+
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS -- CONTINUED
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31, YEAR ENDED YEAR ENDED PERIOD ENDED
---------------------------------------- FEBRUARY 29, FEBRUARY 28, FEBRUARY 28,
1989 1988 1987 1986 1996 1995 1994<F1>
- -----------------------------------------------------------------------------------------------------------------------
CLASS A CLASS B
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD):
Net asset value --
beginning of period $ 9.56 $10.22 $10.53 $ 9.95 $ 9.22 $ 9.78 $10.16
------ ------ ------ ------ ------ ------ ------
Income from investment operations<F4> --
Net investment income<F7> $ 0.86 $ 0.87 $ 0.94 $ 1.07 $ 0.59 $ 0.59 $ 0.30
Net realized and unrealized
gain (loss) on investments (0.51) (0.59) (0.20) 0.68 0.44 (0.56) (0.43)
------ ------ ------ ------ ------ ------ ------
Total from investment
operations $ 0.35 $ 0.28 $ 0.74 $ 1.75 $ 1.03 $ 0.03 $(0.13)
------ ------ ------ ------ ------ ------ ------
Less distributions declared to shareholders --
From net investment income $(0.86) $(0.88) $(0.94) $(1.08) $(0.59) $(0.59) $(0.25)<F6>
In excess of net realized
gain on investments -- (0.06) (0.11) (0.09) -- -- --
------ ------ ------ ------ ------ ------ ------
Total distributions
declared to shareholders $(0.86) $(0.94) $(1.05) $(1.17) $(0.59) $(0.59) $(0.25)
------ ------ ------ ------ ------ ------ ------
Net asset value --
end of period $ 9.05 $ 9.56 $10.22 $10.53 $ 9.66 $ 9.22 $ 9.78
------ ------ ------ ------ ------ ------ ------
Total return<F3> 3.84% 3.11% 7.48% 18.70% 11.46% 0.57% (1.29)%<F2>
RATIOS (TO AVERAGE NET ASSETS)/SUPPLEMENTAL DATA<F7>:
Expenses<F5> 1.40% 1.18% 1.18% 1.09% 1.56% 1.51% 1.39%<F2>
Net investment income 9.25% 9.10% 9.14% 10.43% 6.09% 6.52% 5.92%<F2>
PORTFOLIO TURNOVER 346% 417% 191% 128% 352% 385% 167%
NET ASSETS AT END OF PERIOD
(000 OMITTED) $348,617 $397,239 $487,975 $343,270 $124,921 $105,178 $113,107

<FN>
- ----------
<F1> For the period from the commencement of offering of Class B shares, August 30, 1993 to February 28, 1994.
<F2> Annualized.
<F3> Total returns for Class A shares do not include the applicable sales charge (except for reinvestment dividends
prior to October 1, 1989). If the charge had been included, the results would have been lower.
<F4> Per share data for the period subsequent to February 28, 1994 is based on average shares outstanding.
<F5> For fiscal years ending after September 1, 1995, the Fund's expenses are calculated without reduction for fees
paid indirectly.
<F6> Amount includes distribution in excess of net investment income of less than $0.001 per share for the period
indicated.
<F7> The investment adviser did not impose a portion of its management fee for certain of the periods indicated. If
this fee had been incurred by the Fund, the net investment income per share and ratios would have been:

Net investment income -- -- -- -- $ 0.57 $ 0.57 $ 0.28
RATIOS (TO AVERAGE NET ASSETS):
Expenses -- -- -- -- 1.77% 1.77% 1.87%+
Net investment income -- -- -- -- 5.88% 6.26% 5.44%+
</TABLE>

<PAGE>
4. INVESTMENT OBJECTIVE AND POLICIES
Investment Objective-- The Fund's investment objective is to provide current
income and preservation of principal. Any investment involves risk and there can
be no assurance that the Fund will achieve its investment objective.

INVESTMENT POLICIES -- The Fund seeks to achieve its investment objective by
investing in Government Securities and by investing in obligations that are
fully collateralized or otherwise fully secured by Government Securities as
described below. Government Securities include (1) U.S. Treasury obligations,
which differ only in their interest rates, maturities and times of issuance:
U.S. Treasury bills (maturity of one year or less); U.S. Treasury notes
(maturities of one to 10 years); and U.S. Treasury bonds (generally maturities
of greater than 10 years), all of which are backed by the full faith and
credit of the U.S. Government; and (2) obligations issued or guaranteed by
U.S. Government agencies, authorities or instrumentalities; some of which are
backed by the full faith and credit of the U.S. Treasury, e.g., direct pass-
through certificates of the Government National Mortgage Association ("GNMA");
some of which are supported by the right of the issuer to borrow from the U.S.
Government, e.g., obligations of Federal Home Loan Banks; some of which are
backed only by the credit of the issuer itself, e.g., obligations of the
Student Loan Marketing Association; and some of which are supported by the
discretionary authority of the U.S. Government to purchase the agency's
obligations, e.g. obligations of the Federal National Mortgage Association
("FNMA"). No assurance can be given that the U.S. Government will provide
financial support to these entities because it is not obligated by law, in
certain instances, to do so. The primary types of Government Securities in
which the Fund invests are listed in Appendix B.

The Fund may invest a significant portion of its assets in GNMA Certificates.
Such Certificates are mortgage-backed securities which represent a partial
ownership interest in a pool of mortgage loans issued by lenders such as
mortgage bankers, commercial banks and savings and loan associations. Each
mortgage loan included in the pool is either insured by the Federal Housing
Administration or guaranteed by the Veterans Administration. For a further
description of these and other such obligations and of the consequences of the
prepayment of mortgages underlying these Certificates, see "Mortgage Pass-
Through Securities" below and Appendix B.

When and if available, Government Securities may be purchased at a discount
from face value. However, the Fund does not intend to hold such securities to
maturity for the purpose of achieving potential capital gains, unless current
yields on these securities remain attractive.

Government Securities do not generally involve the credit risks associated
with other types of fixed income securities. However, like other fixed income
securities, the values of Government Securities change as interest rates
fluctuate. THE NET ASSET VALUE OF THE SHARES OF AN OPEN-END INVESTMENT COMPANY
SUCH AS THE FUND, WHICH INVESTS IN FIXED INCOME SECURITIES, CHANGES AS THE
GENERAL LEVELS OF INTEREST RATES FLUCTUATE. WHEN INTEREST RATES DECLINE, THE
VALUE OF A PORTFOLIO INVESTED AT HIGHER YIELDS CAN BE EXPECTED TO RISE.
CONVERSELY, WHEN INTEREST RATES RISE, THE VALUE OF A PORTFOLIO INVESTED AT
LOWER YIELDS CAN BE EXPECTED TO DECLINE. Although changes in the value of the
Fund's portfolio securities subsequent to their acquisition are reflected in
the net asset value of shares of the Fund, such changes will not affect the
income received by the Fund from such securities. However, since available
yields vary over time, no specific level of income can ever be assured. The
dividends paid by the Fund will increase or decrease in relation to the income
received by the Fund from its investments, which will in any case be reduced
by the Fund's expenses before being distributed to the Fund's shareholders.

In order to make the Fund an eligible investment for Federal Credit Unions
("FCUs") and national banks, the Fund will invest in Government Securities
that are eligible for investment by such institutions without limitation, and
will also generally be managed so as to qualify as an eligible investment for
such institutions. The Fund will comply with all investment limitations
applicable to FCUs including the requirement that a FCU may only purchase
Collateralized Mortgage Obligations (as described below) which would be
eligible under the high risk securities test of Part 703 of the National
Credit Union Administration Rules and Regulations.

ALTHOUGH THE FUND INVESTS IN GOVERNMENT SECURITIES, SHARES OF THE FUND ARE
NEITHER GUARANTEED NOR INSURED BY THE U.S. GOVERNMENT OR ITS AGENCIES,
AUTHORITIES OR INSTRUMENTALITIES.

ZERO COUPON SECURITIES: Government Securities may also include zero coupon
Government Securities which are debt obligations which do not require the
periodic payment of interest and are issued at a significant discount from
face value. The discount approximates the total amount of interest the
Government Securities will accrue and compound over the period until maturity
or the first interest payment date at a rate of interest reflecting the market
rate of the security at the time of issuance. Such investments benefit the
issuer by mitigating its need for cash to meet debt service, but also require
a higher rate of return to attract investors who are willing to defer receipt
of such cash. Such investments may experience greater volatility in market
value due to changes in interest rates than Government Securities which make
regular payments of interest. The Fund will accrue income on such investments
for tax and accounting purposes, as required, which is distributable to
shareholders and which, because no cash is received at the time of accrual,
may require the liquidation of other portfolio securities to satisfy the
Fund's distribution obligations. The Fund will not invest in zero coupon
Government Securities with maturities that exceed 10 years.

MORTGAGE PASS-THROUGH SECURITIES: The Fund may invest in mortgage pass-through
securities where the payment of principal and interest on the mortgage pass-
through securities or the underlying mortgages is guaranteed by the U.S.
Government, its agencies, authorities or instrumentalities. Mortgage pass-
through securities are securities representing interests in "pools" of
mortgage loans. Monthly payments of interest and principal by the individual
borrowers on mortgages are passed through to the holders of the securities
(net of fees paid to the issuer or guarantor of the securities) as the
mortgages in the underlying mortgage pools are paid off. The average lives of
mortgage pass-throughs are variable when issued because their average lives
depend on prepayment rates. The average life of these securities is likely to
be substantially shorter than their stated final maturity as a result of
unscheduled principal prepayments. Prepayments on underlying mortgages result
in a loss of anticipated interest, and all or part of a premium if any has
been paid, and the actual yield (or total return) to the Fund may be different
than the quoted yield on the securities. Mortgage prepayments generally
increase with falling interest rates and decrease with rising interest rates.
Like other fixed income securities, when interest rates rise the value of a
mortgage pass-through security generally will decline; however, when interest
rates are declining, the value of mortgage pass-through securities with
prepayment features may not increase as much as that of other fixed income
securities. For a further description of mortgage pass-through securities, see
the SAI.

The Fund may also invest in obligations that are fully collateralized or
otherwise fully secured by Government Securities, some of which are described
below.

COLLATERALIZED MORTGAGE OBLIGATIONS AND MULTICLASS PASS-THROUGH SECURITIES:
The Fund may invest a portion of its assets in collateralized mortgage
obligations or "CMOs," which are debt obligations collateralized by mortgage
loans or mortgage pass-through securities. Typically, CMOs are collateralized
by certificates issued by GNMA, FNMA or the Federal Home Loan Mortgage
Corporation and, in the case of the Fund, must be collateralized by Government
Securities (such collateral collectively hereinafter referred to as "Mortgage
Assets"). CMOs also include multiclass pass-through securities which are
interests in a trust composed of Mortgage Assets, unless otherwise noted. CMOs
may be issued by U.S. agencies, authorities or instrumentalities or by private
originators of, or investors in, mortgage loans, including savings and loan
associations, mortgage banks, commercial banks, investment banks and special
purpose subsidiaries of the foregoing. Payments of principal of and interest
on the Mortgage Assets, and any reinvestment income thereon, provide the funds
to pay debt service on the CMOs or make scheduled distributions on the
multiclass pass-through securities. In a CMO, a series of bonds or
certificates are usually issued in multiple classes with different maturities.
Each class of CMOs, often referred to as a "tranche," is issued at a specific
fixed or floating coupon rate and has a stated maturity or final distribution
date. Principal prepayments on the Mortgage Assets may cause the CMOs to be
retired substantially earlier than their stated maturities or final
distribution dates, resulting in a loss of all or part of the premium, if any
has been paid. The Fund may also invest in parallel pay CMOs and Planned
Amortization Class CMOs ("PAC Bonds"). Parallel pay CMOs are structured to
provide payments of principal on each payment date to more than one class. PAC
Bonds generally require payments of a specified amount of principal on each
payment date. PAC Bonds are always parallel pay CMOs with the required
principal payment on such securities having the highest priority after
interest has been paid to all classes. For a further description of CMOs and
the risks related to transactions therein, see the SAI.

REPURCHASE AGREEMENTS: The Fund may enter into repurchase agreements with
primary reporting dealers that report to the Federal Reserve Bank of New York
and with the 100 largest U.S. commercial banks in order to earn income on
available cash or as a temporary defensive measure. Under a repurchase
agreement, the Fund acquires securities subject to the seller's agreement to
repurchase at a specified time and price. If the seller becomes subject to a
proceeding under the bankruptcy laws or its assets are otherwise subject to a
stay order, the Fund's right to liquidate the securities may be restricted
(during which time the value of the securities could decline). As discussed in
the SAI, the Fund has adopted certain procedures intended to minimize risk.

LENDING OF SECURITIES: The Fund may seek to increase its income by lending
portfolio securities. Such loans will usually be made to member firms (and
subsidiaries thereof) of the New York Stock Exchange (the "Exchange") and to
member banks of the Federal Reserve System, and would be required to be
secured continuously by collateral in cash, U.S. Government securities or an
irrevocable letter of credit maintained on a current basis at an amount at
least equal to the market value of the securities loaned. The Fund will
continue to collect the equivalent of interest on the securities loaned and
will also receive either interest (through investment of cash collateral) or a
fee (if the collateral is Government Securities or a letter of credit). If the
Adviser determines to make securities loans, it is intended that the value of
the securities loaned would not exceed 30% of the value of the total assets of
the Fund.

"WHEN-ISSUED" SECURITIES: Some Government Securities may be purchased on a
"when-issued" or on a "forward delivery" basis, which means that the
obligations will be delivered to the Fund at a future date beyond customary
settlement time. The commitment to purchase an obligation for which payment
will be made on a future date may be deemed a separate security. Although the
Fund is not limited as to the amount of Government Securities for which it may
have commitments to purchase on such bases, it is expected that under normal
circumstances the Fund will not commit more than 30% of its total assets to
such purchases. The Fund does not pay for such obligations until received, and
does not start earning interest on the obligations until the contractual
settlement date. In order to invest its assets immediately, while awaiting
delivery of the obligations purchased on such bases, the Fund will invest in
cash, cash equivalents or Government Securities. For additional information
concerning these securities, see the Fund's SAI.

MORTGAGE "DOLLAR ROLL" TRANSACTIONS: The Fund may enter into mortgage "dollar
roll" transactions with selected banks and broker-dealers pursuant to which
the Fund sells mortgage-backed securities for delivery in the future
(generally within 30 days) and simultaneously contracts to repurchase
substantially similar (same type, coupon and maturity) securities on a
specified future date. The Fund will only enter into covered rolls. A "covered
roll" is a specific type of dollar roll for which there is an offsetting cash
position or a cash equivalent security position which matures on or before the
forward settlement date of the dollar roll transaction.

PORTFOLIO MANAGEMENT: The Fund intends to fully manage its portfolio by buying
and selling Government Securities, as well as holding selected obligations to
maturity. The Fund seeks to maximize the return on its portfolio by taking
advantage of market developments and yield disparities. For a description of
the strategies which may be used by the Fund in managing its portfolio, see
the SAI.

The primary consideration in placing portfolio security transactions with
broker-dealers is to obtain, and maintain the availability of, execution at
the most favorable prices and in the most effective manner possible.
Consistent with the foregoing primary consideration, the Rules of Fair
Practice of the National Association of Securities Dealers, Inc. (the "NASD")
and such other policies as the Trustees may determine, the Adviser may
consider sales of shares of the Fund and of the other investment company
clients of MFD as a factor in the selection of broker-dealers to execute the
Fund's portfolio transactions. From time to time, the Adviser may direct
certain portfolio transactions to broker-dealer firms which, in turn, have
agreed to pay a portion of the Fund's operating expenses (e.g., fees charged
by the custodian of the Fund's assets). For the fiscal year ended February 29,
1996, the Fund had a portfolio turnover rate of over 100%. Transaction costs
incurred by the Fund and the realized capital gains and losses of the Fund may
be greater than that of a fund with a lesser portfolio turnover rate. For a
further discussion of portfolio trading, see the SAI.

--------------------

The investment objective and the policies described above may be changed
without shareholder approval.

The SAI includes a discussion of other investment policies and a listing of
specific investment restrictions which govern the Fund's investment policies.
The specific investment restrictions listed in the SAI may be changed without
shareholder approval unless indicated otherwise. The Fund's investment
limitations and policies are adhered to at the time of purchase or utilization
of assets; a subsequent change in circumstances will not be considered to
result in a violation of policy.

5. MANAGEMENT OF THE FUND
Investment Adviser-- The Adviser manages the assets of the Fund pursuant to an
Investment Advisory Agreement, dated July 18, 1984 as amended February 1, 1994
(the "Advisory Agreement"). The Adviser provides the Fund with overall
investment advisory and administrative services, as well as general office
facilities. Steven E. Nothern, a Senior Vice President of the Adviser, has been
the Fund's portfolio manager since January 1991. Mr. Nothern has been employed
as a portfolio manager by the Adviser since 1986. Subject to such policies as
the Trustees may determine, the Adviser makes investment decisions for the Fund.
For these services and facilities, the Adviser receives a management fee equal
to the lesser of (i) 0.40% of the Fund's average daily net assets or (ii) 0.25%
of the Fund's average daily net assets plus 3.40% of the Fund's gross income
(i.e., income other than from the sale of securities), in each case on an
annualized basis for the Fund's then- current fiscal year. Effective March 1,
1996, the Adviser has voluntarily agreed to reduce the Fund's management fee to
0.25% of the Fund's average daily net assets for an indefinite period of time.
This arrangement may be revised or terminated at any time without notice to
shareholders.

For the fiscal year ended February 29, 1996, MFS received management fees
under the Advisory Agreement of $1,769,675 equivalent to 0.40% of the Fund's
average daily net assets. Due to the voluntary reduction of management fees,
$930,351 of management fees were not imposed on the Fund.

MFS also serves as investment adviser to each of the other funds in the MFS
Family of Funds (the "MFS Funds"), MFS Institutional Trust, MFS Municipal
Income Trust, MFS Multimarket Income Trust, MFS Government Markets Income
Trust, MFS Intermediate Income Trust, MFS Charter Income Trust, MFS Special
Value Trust, MFS Union Standard Trust, MFS Variable Insurance Trust, Sun
Growth Variable Annuity Fund, Inc., MFS/Sun Life Series Trust and seven
variable accounts, each of which is a registered investment company
established by Sun Life Assurance Company of Canada (U.S.) ("Sun Life of
Canada (U.S.)") in connection with the sale of various fixed/variable annuity
contracts. MFS and its wholly owned subsidiary, MFS Asset Management, Inc.,
provide investment advice to substantial private clients.

MFS is America's oldest mutual fund organization. MFS and its predecessor
organizations have a history of money management dating from 1924 and the
founding of the first mutual fund in the United States, Massachusetts
Investors Trust. Net assets under the management of the MFS organization were
approximately $46.8 billion on behalf of approximately 2.0 million investor
accounts as of May 31, 1996. As of such date, the MFS organization managed
approximately $1.4 billion of assets in equity securities and approximately
$19.5 billion of assets in fixed income securities. MFS is a subsidiary of Sun
Life of Canada (U.S.), which in turn is a wholly owned subsidiary of Sun Life
Assurance Company of Canada ("Sun Life"). The Directors of MFS are A. Keith
Brodkin, Jeffrey L. Shames, John R. Gardner, John D. McNeil and Arnold D.
Scott. Mr. Brodkin is the Chairman, Mr. Shames is the President and Mr. Scott
is the Secretary and a Senior Executive Vice President of MFS. Messrs. McNeil
and Gardner are the Chairman and President, respectively, of Sun Life. Sun
Life, a mutual life insurance company, is one of the largest international
life insurance companies and has been operating in the United States since
1895, establishing a headquarters office here in 1973. The executive officers
of MFS report to the Chairman of Sun Life.

A. Keith Brodkin, the Chairman of MFS, is also the Chairman, President and a
Trustee of the Fund. W. Thomas London, James O. Yost, Stephen E. Cavan and
James R. Bordewick, Jr. all of whom are officers of MFS, are officers of the
Fund.

MFS has established a strategic alliance with Foreign & Colonial Management
Ltd. ("Foreign & Colonial"). Foreign & Colonial is a subsidiary of two of the
world's oldest financial services institutions, the London-based Foreign &
Colonial Investment Trust PLC, which pioneered the idea of investment
management in 1868, and HYPO-BANK (Bayerische Hypotheken-und Wechsel-Bank AG),
the oldest publicly listed bank in Germany, founded in 1835. As part of this
alliance, the portfolio managers and investment analysts of MFS and Foreign &
Colonial share their views on a variety of investment related issues, such as
the economy, securities markets, portfolio securities and their issuers,
investment recommendations, strategies and techniques, risk analysis, trading
strategies and other portfolio management matters. MFS has access to the
extensive international equity investment expertise of Foreign & Colonial, and
Foreign & Colonial has access to the extensive U.S. equity investment
expertise of MFS. Certain MFS investment analysts are working for an extended
period with Foreign & Colonial's portfolio managers and investment analysts at
their offices in London. In return, one or more Foreign & Colonial employees
are expected to work in a similar manner at MFS' Boston offices.

In certain instances there may be securities which are suitable for the Fund's
portfolio as well as for portfolios of other clients of MFS or clients of
Foreign & Colonial. Some simultaneous transactions are inevitable when several
clients receive investment advice from MFS and Foreign & Colonial,
particularly when the same security is suitable for more than one client.
While in some cases this arrangement could have a detrimental effect on the
price or availability of the security as far as the Fund is concerned, in
other cases, however, it may produce increased investment opportunities for
the Fund.

DISTRIBUTOR -- MFD, a wholly owned subsidiary of MFS, is the distributor of
shares of the Fund and each of the other MFS Funds.

SHAREHOLDER SERVICING AGENT -- MFS Service Center, Inc. (the "Shareholder
Servicing Agent"), a wholly owned subsidiary of MFS, performs transfer agency,
certain dividend disbursing agency and other services for the Fund.

6. INFORMATION CONCERNING SHARES OF THE FUND
PURCHASES
Shares of the Fund may be purchased at the public offering price through any
dealer and other financial institution ("dealers") having a selling agreement
with MFD. Dealers may also charge their customers fees relating to investments
in the Fund.

The Fund offers three classes of shares (Class A, B and C shares) which bear
sales charges and distribution fees in different forms and amounts, as
described below:

CLASS A SHARES: Class A shares are generally offered at net asset value plus
an initial sales charge, but in certain cases are offered at net asset value
without an initial sales charge but subject to a CDSC.

PURCHASES SUBJECT TO INITIAL SALES CHARGE. Class A shares are offered at
net asset value plus an initial sales charge as follows:

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
SALES CHARGE* AS PERCENTAGE OF:
------------------------------------------ DEALER ALLOWANCE
NET AMOUNT AS A PERCENTAGE
AMOUNT OF PURCHASE OFFERING PRICE INVESTED OF OFFERING PRICE
------------------ -------------- ---------- -----------------
<S> <C> <C> <C>
Less than $100,000 .................................. 4.75% 4.99% 4.00%
$100,000 but less than $250,000 ..................... 4.00 4.17 3.20
$250,000 but less than $500,000 ..................... 2.95 3.04 2.25
$500,000 but less than $1,000,000 ................... 2.20 2.25 1.70
$1,000,000 or more .................................. None** None** See Below**
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Because of rounding in the calculation of offering price, actual sales
charges may be more or less than those calculated using the percentages
above.

**A CDSC will apply to such purchases, as discussed below.

MFD allows discounts to dealers (which are alike for all dealers) from the
applicable public offering price, as shown in the above table. In the case of
the maximum sales charge, the dealer retains 4% and MFD retains approximately
3/4 of 1% of the public offering price. The sales charge may vary depending on
the number of shares of the Fund as well as certain other MFS Funds owned or
being purchased, the existence of an agreement to purchase additional shares
during a 13-month period (or 36-month period for purchases of $1 million or
more) or other special purchase programs. A description of the Right of
Accumulation, Letter of Intent and Group Purchase privileges by which the
sales charge may be reduced is set forth in the SAI.

PURCHASES SUBJECT TO A CDSC (but not subject to an initial sales charge).
In the following two circumstances, Class A shares are offered at net asset
value without an initial sales charge but subject to a CDSC, equal to 1% of
the lesser of the value of the shares redeemed (exclusive of reinvested
dividend and capital gain distributions) or the total cost of such shares, in
the event of a share redemption within 12 months following the purchase:

(i) on investments of $1 million or more in Class A shares; and

(ii) on investments in Class A shares by certain retirement plans subject
to the Employee Retirement Income Security Act of 1974, as amended,
if the sponsoring organization demonstrates to the satisfaction of
MFD that either (a) the employer has at least 25 employees or (b) the
aggregate purchases by the retirement plan of Class A shares of the
MFS Funds will be in an amount of at least $250,000 within a
reasonable period of time, as determined by MFD in its sole
discretion.

In the case of such purchases, MFD will pay commissions to dealers on new
investments in Class A shares made through such dealers as follows:

COMMISSION PAID BY MFD TO DEALERS CUMULATIVE PURCHASE AMOUNT
- --------------------------------- --------------------------

1.00% On the first $2,000,000, plus
0.80% Over $2,000,000 to $3,000,000, plus
0.50% Over $3,000,000 to $50,000,000, plus
0.25% Over $50,000,000

For purposes of determining the level of commissions to be paid to dealers
with respect to a shareholder's new investment in Class A shares made on or
after April 1, 1996, purchases for each shareholder account (and certain other
accounts for which the shareholder is a record or beneficial holder) will be
aggregated over a 12-month period (commencing from the date of the first such
purchases).

See "Redemptions and Repurchases -- Contingent Deferred Sales Charge" for
further discussion of the CDSC.

WAIVERS OF INITIAL SALES CHARGE AND CDSC. In certain circumstances, the
initial sales charge imposed upon purchases of Class A shares and the CDSC
imposed upon redemptions of Class A shares is waived. These circumstances are
described in Appendix A to this Prospectus.

CLASS B SHARES: Class B shares are offered at net asset value without an
initial sales charge but subject to a CDSC as follows:

YEAR OF CONTINGENT
REDEMPTION DEFERRED SALES
AFTER PURCHASE CHARGE
-------------- --------------

First ......................................... 4%
Second ........................................ 4%
Third ......................................... 3%
Fourth ........................................ 3%
Fifth ......................................... 2%
Sixth ......................................... 1%
Seventh and following ......................... 0%

The CDSC imposed is assessed against the lesser of the value of the shares
redeemed (exclusive of reinvested dividends and capital gain distributions) or
the total cost of such shares. No CDSC is assessed against shares acquired
through the automatic reinvestment of dividends or capital gain distributions.
See "Redemptions and Repurchases -- Contingent Deferred Sales Charge" for
further discussion of the CDSC.

MFD will pay commissions to dealers of 3.75% of the purchase price of Class B
shares purchased through dealers. MFD will also advance to dealers the first
year service fee payable under the Fund's Class B Distribution Plan (see
"Distribution Plans" below) at a rate equal to 0.25% of the purchase price of
such shares. Therefore, the total amount paid to a dealer upon the sale of
Class B shares is 4% of the purchase price of the shares (commission rate of
3.75% plus a service fee equal to 0.25% of the purchase price).

WAIVERS OF CDSC. In certain circumstances, the CDSC imposed upon
redemption of Class B shares is waived. These circumstances are described in
Appendix A to this Prospectus.

CONVERSION OF CLASS B SHARES. Class B shares of the Fund that remain
outstanding for approximately eight years will convert to Class A shares of
the same Fund. Shares purchased through the reinvestment of distributions paid
in respect of Class B shares will be treated as Class B shares for purposes of
the payment of the distribution and service fees under the Distribution Plan
applicable to Class B shares. See "Distribution Plans" below. However, for
purposes of conversion to Class A shares, all shares in a shareholder's
account that were purchased through the reinvestment of dividends and
distributions paid in respect of Class B shares (and which have not converted
to Class A shares as provided in the following sentence) will be held in a
separate sub-account. Each time any Class B shares in the shareholder's
account (other than those in the sub-account) convert to Class A shares, a
portion of the Class B shares then in the sub-account will also convert to
Class A shares. The portion will be determined by the ratio that the
shareholder's Class B shares not acquired through reinvestment of dividends
and distributions that are converting to Class A shares bear to the
shareholder's total Class B shares not acquired through reinvestment. The
conversion of Class B shares to Class A shares is subject to the continuing
availability of a ruling from the Internal Revenue Service or an opinion of
counsel that such conversion will not constitute a taxable event for federal
tax purposes. There can be no assurance that such ruling or opinion will be
available, and the conversion of Class B shares to Class A shares will not
occur if such ruling or opinion is not available. In such event, Class B
shares would continue to be subject to higher expenses than Class A shares for
an indefinite period.

CLASS C SHARES: Class C shares are offered at net asset value without an
initial sales charge but are subject to a CDSC upon redemption of 1.00% during
the first year. Class C shares do not convert to any other class of shares of
the Fund. The maximum investment in Class C shares that may be made is up to
$1,000,000 per transaction.

The CDSC imposed is assessed against the lesser of the value of the shares
redeemed (exclusive of reinvested dividend and capital gain distributions) or
the total cost of such shares. No CDSC is assessed against shares acquired
through the automatic reinvestment of dividend or capital gain distributions.
See "Redemptions and Repurchases -- Contingent Deferred Sales Charge" below
for further discussion of the CDSC.

MFD will pay dealers 1.00% of the purchase price of Class C shares purchased
through dealers and, as compensation therefor, MFD will retain the 1.00% per
annum distribution and service fee paid under the Class C Distribution Plan by
the Fund to MFD for the first year after purchase (see "Distribution Plans"
below).

Class C shares are not currently available for purchase by any retirement plan
qualified under Sections 401(a) or 403(b) of the Internal Revenue Code of
1986, as amended (the "Code") if the retirement plan and/or the sponsoring
organization subscribe to the MFS FUNDamental 401(k) Plan or another similar
recordkeeping program made available by the Shareholder Servicing Agent.

WAIVERS OF CDSC. In certain circumstances, the CDSC imposed upon
redemption of Class C shares is waived. These circumstances are described in
Appendix A to this Prospectus.

GENERAL: The following information applies to purchases of all classes of the
Fund's shares.

MINIMUM INVESTMENT. Except as described below, the minimum initial
investment is $1,000 per account and the minimum additional investment is $50
per account. Accounts being established for monthly automatic investments and
under payroll savings programs and tax deferred retirement programs (other
than IRAs) involving the submission of investments by means of group remittal
statements are subject to a $50 minimum on initial and additional investments
per account. The minimum initial investment for IRAs is $250 per account and
the minimum additional investment is $50 per account. Accounts being
established for participation in the Automatic Exchange Plan are subject to a
$50 minimum on initial and additional investments per account. There are also
other limited exceptions to these minimums for certain tax-deferred retirement
programs. Any minimums may be changed at any time at the discretion of MFD.
The Fund reserves the right to cease offering its shares at any time.

RIGHT TO REJECT PURCHASE ORDERS/MARKET TIMING. Purchases and exchanges
should be made for investment purposes only. The Fund and MFD each reserve the
right to reject any specific purchase order or to restrict purchases by a
particular purchaser (or group of related purchasers). The Fund or MFD may
reject or restrict any purchases by a particular purchaser or group, for
example, when such purchase is contrary to the best interests of the Fund's
other shareholders or otherwise would disrupt the management of the Fund.

MFD may enter into an agreement with shareholders who intend to make exchanges
among certain classes of shares of certain MFS Funds (as determined by MFD)
which follow a timing pattern, and with individuals or entities acting on such
shareholders' behalf (collectively, "market timers"), setting forth the terms,
procedures and restrictions with respect to such exchanges. In the absence of
such an agreement, it is the policy of the Fund and MFD to reject or restrict
purchases by market timers if (i) more than two exchange purchases are
effected in a timed account in the same calendar quarter or (ii) a purchase
would result in shares being held in timed accounts by market timers
representing more than (x) one percent of the Fund's net assets or (y)
specified dollar amounts in the case of certain MFS Funds which may include
the Fund and which may change from time to time. The Fund and MFD each reserve
the right to request market timers to redeem their shares at net asset value,
less any applicable CDSC, if either of these restrictions is violated.

DEALER CONCESSIONS. Dealers may receive different compensation with
respect to sales of Class A, Class B and Class C shares. In addition, from
time to time, MFD may pay dealers 100% of the applicable sales charge on sales
of Class A shares of certain specified MFS Funds sold by such dealer during a
specified sales period. In addition, MFD or its affiliates may, from time to
time, pay dealers an additional commission equal to 0.50% of the net asset
value of all of the Class B and/or Class C shares of certain specified MFS
Funds sold by such dealer during a specified sales period. In addition, from
time to time, MFD, at its expense, may provide additional commissions,
compensation or promotional incentives ("concessions") to dealers which sell
shares of the Fund. Such concessions provided by MFD may include financial
assistance to dealers in connection with preapproved conferences or seminars,
sales or training programs for invited registered representatives, payment for
travel expenses, including lodging, incurred by registered representatives for
such seminars or training programs, seminars for the public, advertising and
sales campaigns regarding one or more MFS Funds, and/or other dealer-sponsored
events. From time to time, MFD may make expense reimbursements for special
training of a dealer's registered representatives in group meetings or to help
pay the expenses of sales contests. Other concessions may be offered to the
extent not prohibited by state laws or any self-regulatory agency, such as the
NASD.

SPECIAL INVESTMENT PROGRAMS. For shareholders who elect to participate in
certain investment programs (e.g., the Automatic Investment Plan) or other
shareholder services, MFD or its affiliates may either (i) give a gift of
nominal value, such as a hand-held calculator, or (ii) make a nominal
charitable contribution on their behalf.

RESTRICTIONS ON ACTIVITIES OF NATIONAL BANKS. The Glass-Steagall Act
prohibits national banks from engaging in the business of underwriting,
selling or distributing securities. Although the scope of the prohibition has
not been clearly defined, MFD believes that such Act should not preclude banks
from entering into agency agreements with MFD. If, however, a bank were
prohibited from so acting, the Trustees would consider what actions, if any,
would be necessary to continue to provide efficient and effective shareholder
services in respect of shareholders who invested in the Fund through a
national bank. It is not expected that shareholders would suffer any adverse
financial consequence as a result of these occurrences. In addition, state
securities laws on this issue may differ from the interpretation of federal
law expressed herein and banks and financial institutions may be required to
register as broker-dealers pursuant to state law.

------------------------------

A shareholder whose shares are held in the name of, or controlled by, a dealer
might not receive many of the privileges and services from the Fund (such as
Right of Accumulation, Letter of Intent and certain recordkeeping services)
that the Fund ordinarily provides.

EXCHANGES
Subject to the requirements set forth below, some or all of the shares in an
account with the Fund for which payment has been received by the Fund (i.e.,
an established account) may be exchanged for shares of the same class of any
of the other MFS Funds in the MFS Family of Funds (the "MFS Funds") at net
asset value (if available for sale). Shares of one class may not be exchanged
for shares of any other class.

EXCHANGES AMONG MFS FUNDS (EXCLUDING EXCHANGES FROM MFS MONEY MARKET FUNDS):
No initial sales charges or CDSC will be imposed in connection with an
exchange from shares of an MFS Fund to shares of any other MFS Fund, except
with respect to exchanges from an MFS money market fund to another MFS Fund
which is not an MFS money market fund (discussed below). With respect to an
exchange involving shares subject to a CDSC, the CDSC will be unaffected by
the exchange and the holding period for purposes of calculating the CDSC will
carry over to the acquired shares.

EXCHANGES FROM AN MFS MONEY MARKET FUND: Special rules apply with respect to
the imposition of an initial sales charge or a CDSC for exchanges from an MFS
money market fund to another MFS Fund which is not an MFS money market fund.
These rules are described under the caption "Exchanges" in the Prospectuses of
those MFS money market funds.

EXCHANGES INVOLVING THE MFS FIXED FUND: Class A shares of any MFS Fund held by
certain qualified retirement plans may be exchanged for units of participation
of the MFS Fixed Fund (a bank collective investment fund) (the "Units"), and
Units may be exchanged for Class A shares of any MFS Fund. With respect to
exchanges between Class A shares subject to a CDSC and Units, the CDSC will
carry over to the acquired shares or Units and will be deducted from the
redemption proceeds when such shares or Units are subsequently redeemed,
assuming the CDSC is then payable (the period during which the Class A shares
and the Units were held will be aggregated for purposes of calculating the
applicable CDSC). In the event that a shareholder initially purchases Units
and then exchanges into Class A shares subject to an initial sales charge of
an MFS Fund, the initial sales charge shall be due upon such exchange, but
will not be imposed with respect to any subsequent exchanges between such
Class A shares and Units with respect to shares on which the initial sales
charge has already been paid. In the event that a shareholder initially
purchases Units and then exchanges into Class A shares subject to a CDSC of an
MFS Fund, the CDSC period will commence upon such exchange, and the
applicability of the CDSC with respect to subsequent exchanges shall be
governed by the rules set forth above in this paragraph.

GENERAL: A shareholder should read the prospectus of the other MFS Fund into
which an exchange is made and consider the differences in objectives, policies
and restrictions before making any exchange. Exchanges will be made only after
instructions in writing or by telephone (an "Exchange Request") are received
for an established account by the Shareholder Servicing Agent in proper form
(i.e., if in writing -- signed by the record owner(s) exactly as the shares
are registered; if by telephone -- proper account identification is given by
the dealer or shareholder of record) and each exchange must involve either
shares having an aggregate value of at least $1,000 ($50 in the case of
retirement plan participants whose sponsoring organizations subscribe to the
MFS FUNDamental 401(k) Plan or another similar 401(k) recordkeeping system
made available by the Shareholder Servicing Agent) or all the shares in the
account. If an Exchange Request is received by the Shareholder Servicing Agent
on any business day prior to the close of regular trading on the New York
Stock Exchange (generally, 4:00 p.m., Eastern time) (the "Exchange"), the
exchange will occur on that day if all the requirements set forth above have
been complied with at that time and subject to the Fund's right to reject
purchase orders. No more than five exchanges may be made in any one Exchange
Request by telephone. Additional information concerning this exchange
privilege and prospectuses for any of the other MFS Funds may be obtained from
dealers or the Shareholder Servicing Agent. For federal and (generally) state
income tax purposes, an exchange is treated as a sale of the shares exchanged
and, therefore, an exchange could result in a gain or loss to the shareholder
making the exchange. Exchanges by telephone are automatically available to
most non-retirement plan accounts and certain retirement plan accounts. For
further information regarding exchanges by telephone, see "Redemptions by
Telephone." The exchange privilege (or any aspect of it) may be changed or
discontinued and is subject to certain limitations, including certain
restrictions on purchases by market timers. Special procedures, privileges and
restrictions with respect to exchanges may apply to market timers who enter
into an agreement with MFD, as set forth in such agreement. See "Purchases --
General -- Right to Reject Purchase Orders/Market Timing."

REDEMPTIONS AND REPURCHASES
A shareholder may withdraw all or any portion of the value of his account on
any date on which the Fund is open for business by redeeming shares at their
net asset value (a redemption) or by selling such shares to the Fund through a
dealer (a repurchase). Certain redemptions and repurchases are, however,
subject to a CDSC. See "Contingent Deferred Sales Charge" below. Because the
net asset value of shares of the account fluctuates, redemptions or
repurchases, which are taxable transactions, are likely to result in gains or
losses to the shareholder. When a shareholder withdraws an amount from his
account, the shareholder is deemed to have tendered for redemption a
sufficient number of full and fractional shares in his account to cover the
amount withdrawn. The proceeds of a redemption or repurchase will normally be
available within seven days, except for shares purchased or received in
exchange for shares purchased by check (including certified checks or
cashier's checks). Payment of redemption proceeds may be delayed for up to 15
days from the purchase date in an effort to assure that such check has
cleared. See "Tax Status" below.

REDEMPTION BY MAIL: Each shareholder may redeem all or any portion of the
shares in his account by mailing or delivering to the Shareholder Servicing
Agent (see back cover for address) a stock power with a written request for
redemption or letter of instruction, together with his share certificates (if
any were issued), all in "good order" for transfer. "Good order" generally
means that the stock power, written request for redemption, letter of
instruction or certificate must be endorsed by the record owner(s) exactly as
the shares are registered and the signature(s) must be guaranteed in the
manner set forth below under the caption "Signature Guarantee." In addition,
in some cases "good order" will require the furnishing of additional
documents. The Shareholder Servicing Agent may make certain de minimis
exceptions to the above requirements for redemption. Within seven days after
receipt of a redemption request in "good order" by the Shareholder Servicing
Agent, the Fund will make payment in cash of the net asset value of the shares
next determined after such redemption request was received, reduced by the
amount of any applicable CDSC described above and the amount of any income tax
required to be withheld, except during any period in which the right of
redemption is suspended or date of payment is postponed because the Exchange
is closed or trading on such Exchange is restricted or to the extent otherwise
permitted by the 1940 Act if an emergency exists.

REDEMPTION BY TELEPHONE: Each shareholder may redeem an amount from his
account by telephoning the Shareholder Servicing Agent toll-free at (800) 225-
2606. Shareholders wishing to avail themselves of this telephone redemption
privilege must so elect on their Account Application, designate thereon a bank
and account number to receive the proceeds of such redemption, and sign the
Account Application Form with the signature(s) guaranteed in the manner set
forth below under the caption "Signature Guarantee." The proceeds of such a
redemption, reduced by the amount of any applicable CDSC and the amount of any
income tax required to be withheld, are mailed by check to the designated
account, without charge, if the redemption proceeds do not exceed $1,000, and
are wired in federal funds to the designated account if the redemption
proceeds exceed $1,000. If a telephone redemption request is received by the
Shareholder Servicing Agent by the close of regular trading on the Exchange on
any business day, shares will be redeemed at the closing net asset value of
the Fund on that day. Subject to the conditions described in this section,
proceeds of a redemption are normally mailed or wired on the next business day
following the date of receipt of the order for redemption. The Shareholder
Servicing Agent may be liable for any losses resulting from unauthorized
telephone transactions if it does not follow reasonable procedures designed to
verify the identity of the caller. The Shareholder Servicing Agent will
request personal or other information from the caller, and will normally also
record calls. Shareholders should verify the accuracy of confirmation
statements immediately after their receipt.

REPURCHASE THROUGH A DEALER: If a shareholder desires to sell his shares
through his dealer (a repurchase), the shareholder can place a repurchase
order with his dealer, who may charge the shareholder a fee. IF THE DEALER
RECEIVES THE SHAREHOLDER'S ORDER PRIOR TO THE CLOSE OF REGULAR TRADING ON THE
EXCHANGE AND COMMUNICATES IT TO MFD BEFORE THE CLOSE OF BUSINESS ON THE SAME
DAY, THE SHAREHOLDER WILL RECEIVE THE NET ASSET VALUE CALCULATED ON THAT DAY,
REDUCED BY THE AMOUNT OF ANY APPLICABLE CDSC AND THE AMOUNT OF ANY INCOME TAX
REQUIRED TO BE WITHHELD.

REDEMPTION BY CHECK: Only Class A and Class C shares may be redeemed by check.
A shareholder owning Class A or Class C shares of the Fund may elect to have a
special account with State Street Bank and Trust Company (the "Bank") for the
purpose of redeeming Class A or Class C shares from his or her account by
check. The Bank will provide each Class A or Class C shareholder, upon
request, with forms of checks drawn on the Bank. Only shareholders having
accounts in which no share certificates have been issued will be permitted to
redeem shares by check. Checks may be made payable in any amount not less than
$500. Shareholders wishing to avail themselves of this redemption by check
privilege should so request on their Account Application, must execute
signature cards (for additional information, see the Account Application) with
signature guaranteed in the manner set forth under the caption "Signature
Guarantee" below, and must return any Class A or Class C share certificates
issued to them. Additional documentation will be required from corporations,
partnerships, fiduciaries or other such institutional investors. All checks
must be signed by the shareholder(s) of record exactly as the account is
registered before the Bank will honor them. The shareholders of joint accounts
may authorize each shareholder to redeem by check. The check may not draw on
monthly dividends which have been declared but not distributed. SHAREHOLDERS
WHO PURCHASE CLASS A AND CLASS C SHARES BY CHECK (INCLUDING CERTIFIED CHECKS
OR CASHIER'S CHECKS) MAY WRITE CHECKS AGAINST THOSE SHARES ONLY AFTER THEY
HAVE BEEN ON THE FUND'S BOOKS FOR 15 DAYS. WHEN SUCH A CHECK IS PRESENTED TO
THE BANK FOR PAYMENT, A SUFFICIENT NUMBER OF FULL AND FRACTIONAL SHARES WILL
BE REDEEMED TO COVER THE AMOUNT OF THE CHECK, ANY APPLICABLE CDSC AND THE
AMOUNT OF ANY INCOME TAX REQUIRED TO BE WITHHELD. IF THE AMOUNT OF THE CHECK,
PLUS ANY APPLICABLE CDSC AND THE AMOUNT OF ANY INCOME TAX REQUIRED TO BE
WITHHELD IS GREATER THAN THE VALUE OF CLASS A OR CLASS C SHARES HELD IN THE
SHAREHOLDER'S ACCOUNT, THE CHECK WILL BE RETURNED UNPAID, AND THE SHAREHOLDER
MAY BE SUBJECT TO EXTRA CHARGES. TO AVOID DISHONOR OF CHECKS DUE TO
FLUCTUATIONS IN ACCOUNT VALUE, SHAREHOLDERS ARE ADVISED AGAINST REDEEMING ALL
OR MOST OF THEIR ACCOUNT BY CHECK. CHECKS SHOULD NOT BE USED TO CLOSE A FUND
ACCOUNT BECAUSE WHEN THE CHECK IS WRITTEN, THE SHAREHOLDER WILL NOT KNOW THE
EXACT TOTAL VALUE OF THE ACCOUNT ON THE DAY THE CHECK CLEARS. There is
presently no charge to the shareholder for the maintenance of this special
account or for the clearance of any checks, but the Fund and the Bank reserve
the right to impose such charges or to modify or terminate the redemption by
check privilege at any time.

CONTINGENT DEFERRED SALES CHARGE: Investments in Class A, Class B and Class C
shares ("Direct Purchases") will be subject to a CDSC for a period of: (i)
with respect to Class A and Class C shares, 12 months (however, the CDSC on
Class A shares is only imposed with respect to purchases of $1 million or more
of Class A shares or purchases by certain retirement plans of Class A shares);
or (ii) with respect to Class B shares, six years. Purchases of Class A shares
made during a calendar month, regardless of when during the month the
investment occurred, will age one month on the last day of the month and each
subsequent month. Class C shares and Class B shares purchased on or after
January 1, 1993 will be aggregated on a calendar month basis -- all
transactions made during a calendar month, regardless of when during the month
they have occurred, will age one year at the close of business on the last day
of such month in the following calendar year and each subsequent year. For
Class B shares of the Fund purchased prior to January 1, 1993, transactions
will be aggregated on a calendar year basis -- all transactions made during a
calendar year, regardless of when during the year they have occurred, will age
one year at the close of business on December 31 of that year and each
subsequent year. Prior to April 1, 1996, Class C shares of the MFS Funds were
not subject to a CDSC upon redemption. In no event will Class C shares of the
MFS Funds purchased prior to this date be subject to a CDSC. For the purpose
of calculating the CDSC upon redemption of shares acquired in an exchange on
or after April 1, 1996, the purchase of shares acquired in one or more
exchanges is deemed to have occurred at the time of the original purchase of
the exchanged shares (if such original purchase occurred prior to April 1,
1996, then no CDSC would be imposed upon such a redemption).

At the time of a redemption, the amount by which the value of a shareholder's
account for a particular class of shares represented by Direct Purchases
exceeds the sum of the six calendar year aggregations (12 months in the case
of purchases of Class C shares and of purchases of $1 million or more of Class
A shares or purchases by certain retirement plans of Class A shares) of Direct
Purchases may be redeemed without charge ("Free Amount"). Moreover, no CDSC is
ever assessed on additional shares acquired through the automatic reinvestment
of dividends or capital gain distributions ("Reinvested Shares"). Therefore,
at the time of redemption of a particular class, (i) any Free Amount is not
subject to the CDSC and (ii) the amount of the redemption equal to the then-
current value of Reinvested Shares is not subject to the CDSC, but (iii) any
amount of the redemption in excess of the aggregate of the then-current value
of Reinvested Shares and the Free Amount is subject to a CDSC. The CDSC will
first be applied against the amount of Direct Purchases which will result in
any such charge being imposed at the lowest possible rate. The CDSC to be
imposed upon redemptions of shares will be calculated as set forth in
"Purchases" above.

The applicability of a CDSC will be unaffected by exchanges or transfers of
registration, except as described in Appendix A hereto.

GENERAL: The following information applies to redemptions and repurchases of
all classes of the Fund's shares.

SIGNATURE GUARANTEE: In order to protect shareholders against fraud, the
Fund requires, in certain instances as indicated above, that the shareholder's
signature be guaranteed. In these cases the shareholder's signature must be
guaranteed by an eligible bank, broker, dealer, credit union, national
securities exchange, registered securities association, clearing agency or
savings association. Signature guarantees shall be accepted in accordance with
policies established by the Shareholder Servicing Agent.

REINSTATEMENT PRIVILEGE: Shareholders of the Fund who have redeemed their
shares have a one-time right to reinvest the redemption proceeds in the same
class of shares of any of the MFS Funds (if shares of such Fund are available
for sale) at net asset value (with a credit for any CDSC paid) within 90 days
of the redemption pursuant to the Reinstatement Privilege. If the shares
credited for any CDSC paid are then redeemed within six years of the initial
purchase in the case of Class B shares or within 12 months of the initial
purchase for Class C shares and certain Class A share purchases, a CDSC will
be imposed upon redemption. Such purchases under the Reinstatement Privilege
are subject to all limitations in the SAI regarding this privilege.

IN-KIND DISTRIBUTIONS: Subject to compliance with applicable regulations,
the Fund has reserved the right to pay the redemption or repurchase price of
shares of the Fund, either totally or partially, by a distribution in-kind of
securities (instead of cash) from the Fund's portfolio. The securities
distributed in such a distribution would be valued at the same amount as that
assigned to them in calculating the net asset value for the shares being sold.
If a shareholder received a distribution in-kind, the shareholder could incur
brokerage or transaction charges when converting the securities to cash.

INVOLUNTARY REDEMPTIONS/SMALL ACCOUNTS: Due to the relatively high cost of
maintaining small accounts, the Fund reserves the right to redeem shares in
any account for their then-current value if at any time the total investment
in such account drops below $500 because of redemptions, except in the case of
accounts being established for monthly automatic investments and certain
payroll savings programs, Automatic Exchange Plan accounts and tax-deferred
retirement plans, for which there is a lower minimum investment requirement.
See "Purchases -- General -- Minimum Investment." Shareholders will be
notified that the value of their account is less than the minimum investment
requirement and allowed 60 days to make an additional investment before the
redemption is processed.

DISTRIBUTION PLANS
The Trustees have adopted separate Distribution Plans for Class A, Class B and
Class C shares pursuant to Section 12(b) of the 1940 Act and Rule 12b-1
thereunder (the "Distribution Plans"), after having concluded that there is a
reasonable likelihood that the Distribution Plans would benefit the Fund and
its shareholders.

In certain circumstances, the fees described below may not be imposed or are
being waived. These circumstances, if any, are described below under the
heading "Current Level of Distribution and Service Fees."

FEATURES COMMON TO EACH DISTRIBUTION PLAN: The Distribution Plans have certain
common features, as described below.

SERVICE FEES. Each Distribution Plan provides that the Fund may pay MFD a
service fee of up to 0.25% of the average daily net assets attributable to the
class of shares to which the Distribution Plan relates (i.e., Class A, Class B
or Class C shares, as appropriate) (the "Designated Class") annually in order
that MFD may pay expenses on behalf of the Fund relating to the servicing of
shares of the Designated Class. The service fee is used by MFD to compensate
dealers which enter into a sales agreement with MFD in consideration for all
personal services and/or account maintenance services rendered by the dealer
with respect to shares of the Designated Class owned by investors for whom
such dealer is the dealer or holder of record. MFD may from time to time
reduce the amount of the service fees paid for shares sold prior to a certain
date. Service fees may be reduced for a dealer that is the holder or dealer of
record for an investor who owns shares of the Fund having an aggregate net
asset value at or above a certain dollar level. Dealers may from time to time
be required to meet certain criteria in order to receive service fees. MFD or
its affiliates are entitled to retain all service fees payable under each
Distribution Plan for which there is no dealer of record or for which
qualification standards have not been met as partial consideration for
personal services and/or account maintenance services performed by MFD or its
affiliates to shareholder accounts.

DISTRIBUTION FEES. Each Distribution Plan provides that the Fund may pay
MFD a distribution fee based on the average daily net assets attributable to
the Designated Class as partial consideration for distribution services
performed and expenses incurred in the performance of MFD's obligations under
its distribution agreement with the Fund. See "Management of the Fund --
Distributor" in the SAI. The amount of the distribution fee paid by the Fund
with respect to each class differs under the Distribution Plans, as does the
use by MFD of such distribution fees. Such amounts and uses are described
below in the discussion of the separate Distribution Plans. While the amount
of compensation received by MFD in the form of distribution fees during any
year may be more or less than the expense incurred by MFD under its
distribution agreement with the Fund, the Fund is not liable to MFD for any
losses MFD may incur in performing services under its distribution agreement
with the Fund.

OTHER COMMON FEATURES. Fees payable under each Distribution Plan are
charged to, and therefore reduce, income allocated to shares of the Designated
Class. The Distribution Plans have substantially identical provisions with
respect to their operating policies and their initial approval, renewal,
amendment and termination.

FEATURES UNIQUE TO EACH DISTRIBUTION PLAN: The Distribution Plans have certain
features that are unique to each class of shares, as described below.

CLASS A DISTRIBUTION PLAN. Class A shares are generally offered pursuant
to an initial sales charge, a substantial portion of which is paid to or
retained by the dealer making the sale (the remainder of which is paid to
MFD). See "Purchases -- Class A Shares" above. In addition to the initial
sales charge, the dealer also generally receives the ongoing 0.25% per annum
service fee, as discussed above.

The distribution fee paid to MFD under the Class A Distribution Plan is equal,
on an annual basis, to 0.10% of the Fund's average daily net assets
attributable to Class A shares. As noted above, MFD may use the distribution
fee to cover distribution-related expenses incurred by it under its
distribution agreement with the Fund, including commissions to dealers and
payments to wholesalers employed by MFD (e.g., MFD pays commission to dealers
with respect to purchases of $1 million or more and purchases by certain
retirement plans of Class A shares which are sold at net asset value but which
are subject to a 1% CDSC for one year after purchase). See "Purchases -- Class
A Shares" above. In addition, to the extent that the aggregate service and
distribution fees paid under the Class A Distribution Plan do not exceed 0.35%
per annum of the average daily net assets of the Fund attributable to Class A
shares, the Fund is permitted to pay such distribution-related expenses or
other distribution-related expenses.

CLASS B DISTRIBUTION PLAN. Class B shares are offered at net asset value
without an initial sales charge but subject to a CDSC. See "Purchases -- Class
B Shares" above. MFD will advance to dealers the first year service fee
described above at a rate equal to 0.25% of the purchase price of such shares
and, as compensation therefor, MFD may retain the service fee paid by the Fund
with respect to such shares for the first year after purchase. Dealers will
become eligible to receive the ongoing 0.25% per annum service fee with
respect to such shares commencing in the thirteenth month following purchase.

Under the Class B Distribution Plan, the Fund pays MFD a distribution fee
equal, on an annual basis, to 0.75% of the Fund's average daily net assets
attributable to Class B shares. As noted above, this distribution fee may be
used by MFD to cover its distribution-related expenses under its distribution
agreement with the Fund (including the 3.75% commission it pays to dealers
upon purchase of Class B shares, as described under "Purchases -- Class B
Shares" above).

CLASS C DISTRIBUTION PLAN. Class C shares are offered at net asset value
without an initial sales charge but subject to a CDSC. See "Purchases -- Class
C shares" above. MFD will pay a commission to dealers of 1.00% of the purchase
price of Class C shares purchased through dealers at the time of purchase. In
compensation for this 1.00% commission paid by MFD to dealers, MFD will retain
the 1.00% per annum Class C distribution and service fees paid by the Fund
with respect to such shares for the first year after purchase, and dealers
will become eligible to receive from MFD the ongoing 1.00% per annum
distribution and service fees paid by the Fund to MFD with respect to such
shares commencing in the thirteenth month following purchase.

This ongoing 1.00% fee is comprised of the 0.25% per annum service fee paid to
MFD under the Class C Distribution Plan (which MFD in turn pays to dealers),
as discussed above, and a distribution fee paid to MFD (which MFD also in turn
pays to dealers) under the Class C Distribution Plan equal, on an annual
basis, to 0.75% of the Fund's average daily net assets attributable to Class C
shares.

CURRENT LEVEL OF DISTRIBUTION AND SERVICE FEES. The Fund's Class A, Class
B and Class C distribution and service fees for its current fiscal year are
0.35%, 1.00% and 1.00%, respectively.

DISTRIBUTIONS
The Fund intends to pay substantially all of its net investment income to its
shareholders as dividends on a monthly basis. In determining the net
investment income available for distributions, the Fund may rely on
projections of its anticipated net investment income over a longer term,
rather than its actual net investment income for the period. The Fund may make
one or more distributions during the calendar year to its shareholders from
any long-term capital gains, and may also make one or more distributions to
its shareholders from short-term capital gains. Shareholders may elect to
receive dividends and capital gain distributions in either cash or additional
shares of the same class with respect to which a distribution is made. See
"Tax Status" and "Shareholder Services -- Distribution Options" below.
Distributions paid by the Fund with respect to Class A shares will generally
be greater than those paid with respect to Class B and Class C shares because
expenses attributable to Class B and Class C shares will generally be higher.

TAX STATUS
In order to minimize the taxes the Fund would otherwise be required to pay,
the Fund intends to qualify each year as a "regulated investment company"
under Subchapter M of the Internal Revenue Code of 1986 as amended (the
"Code"), and to make distributions to its shareholders in accordance with the
timing requirements set out in the Code. It is expected that the Fund will not
be required to pay any entity level federal income or excise taxes.

Shareholders of the Fund normally will have to pay federal income taxes, and
(except as discussed below) any state or local taxes, on dividends and capital
gain distributions from the Fund, whether paid in cash or in additional
shares. The Fund expects that none of its distributions will be eligible for
the dividends-received deduction for corporations. Shortly after the end of
each calendar year, each Fund shareholder will receive a statement setting
forth the federal income tax status of all dividends and distributions for
that year, including the portion taxable as ordinary income; the portion
taxable as long-term capital gain; the portion representing interest on U.S.
Government obligations; the portion, if any, representing a return of capital
(which is free of current taxes but results in a basis reduction); and the
amount, if any, of federal income tax withheld.

Fund distributions will reduce the Fund's net asset value per share.
Shareholders who buy shares shortly before the Fund makes a distribution may
thus pay the full price for the shares and then effectively receive a portion
of the purchase price back as a taxable distribution.

The Fund intends to withhold U.S. federal income tax at the rate of 30% on
dividends and certain other payments that are subject to such withholding and
that are made to persons who are neither citizens nor residents of the U.S.,
regardless of whether a lower rate may be permitted under an applicable
treaty. The Fund is also required in certain circumstances to apply backup
withholding at the rate of 31% on taxable dividends and certain redemption
proceeds paid to any shareholder (including a shareholder who is neither a
citizen nor a resident of the U.S.) who does not furnish to the Fund certain
information and certifications or who is otherwise subject to backup
withholding. However, backup withholding will not be applied to payments that
have been subject to 30% withholding. Prospective investors should read the
Fund's Account Application for additional information regarding backup
withholding of federal income tax and should consult their own tax advisers as
to the tax consequences to them of an investment in the Fund.

STATE AND LOCAL TAXES: Distributions of the Fund that are derived from
interest on obligations of the U.S. Government and certain of its agencies and
instrumentalities (but generally not from capital gains realized upon the
disposition of such obligations) may be exempt from state and local income
taxes. The Fund intends to advise shareholders of the extent to which its
distributions consist of interest from such obligations. Shareholders are
urged to consult their tax advisers regarding the possible exclusion of such
portion of their distributions from the Fund for state and local income tax
purposes.

NET ASSET VALUE
The net asset value per share of shares of each class of the Fund is
determined each day during which the Exchange is open for trading. This
determination is made once each day as of the close of regular trading on the
Exchange by deducting the amount of the liabilities attributable to the class
from the value of the assets attributable to the class and dividing the
difference by the number of shares of the class outstanding. Assets in the
Fund's portfolio are valued on the basis of their market values or otherwise
at their fair values, as described in the SAI. The net asset value per share
of each class of shares is effective for orders received in "good order" by
the dealer prior to its calculation and received by MFD prior to the close of
that business day.

DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES
The Fund has three classes of shares, entitled Class A, Class B and Class C
Shares of Beneficial Interest (without par value). The Fund has reserved the
right to create and issue additional classes and series of shares, in which
case each class of shares of a series would participate equally in the
earnings, dividends and assets attributable to that class of that particular
series. Shareholders are entitled to one vote for each share held and shares
of each series would be entitled to vote separately to approve investment
advisory agreements or changes in a fundamental investment policy or in
investment restrictions, but shares of all series would vote together in the
election of Trustees and selection of accountants. Additionally, each class of
shares of a series will vote separately on any material increases in the fees
under its Distribution Plan or on any other matter that affects solely that
class of shares, but will otherwise vote together with all other classes of
shares of the series on all other matters. The Fund does not intend to hold
annual shareholder meetings. The Fund's Declaration of Trust provides that a
Trustee may be removed from office in certain instances (see "Description of
Shares, Voting Rights and Liabilities" in the SAI).

Each share of a class of the Fund represents an equal proportionate interest
in the Fund with each other class share, subject to the liabilities of the
particular class. Shares have no pre-emptive or conversion rights except as
set forth in "Purchases -- Conversion of Class B Shares." Shares are fully
paid and non-assessable. Should the Fund be liquidated, shareholders of each
class are entitled to share pro rata in the net assets attributable to that
class available for distribution to shareholders. Shares will remain on
deposit with the Shareholder Servicing Agent and certificates will not be
issued except in connection with pledges, assignments and in certain other
limited circumstances.

PERFORMANCE INFORMATION
From time to time, the Fund will provide yield, current distribution rate and
total rate of return quotations for each class of shares and may also quote
fund rankings in the relevant fund category from various sources, such as the
Lipper Analytical Services, Inc. and Wiesenberger Investment Companies
Service. Yield quotations are based on the annualized net investment income
per share of each class over a 30-day period stated as a percent of the
maximum public offering price of the shares of that class on the last day of
that period. The yield calculation for Class B and Class C shares assumes no
CDSC is paid. The current distribution rate for each class is generally based
upon the total amount of dividends per share paid by the Fund to shareholders
of that class during the past twelve months and is computed by dividing the
amount of such dividends by the maximum public offering price of that class at
the end of such period. Current distribution rate calculations for Class B and
Class C shares assume no CDSC is paid. The current distribution rate differs
from the yield calculation because it may include distributions to
shareholders from sources other than dividends and interest, such as premium
income from option writing, short-term capital gains, and return of invested
capital, and is calculated over a different period of time. Total rate of
return quotations will reflect the average annual percentage change over
stated periods in the value of an investment in each class of shares of the
Fund made at the maximum public offering price of the shares of that class
with all distributions reinvested and which will give effect to the imposition
of any applicable CDSC assessed upon redemptions of the Fund's Class B and
Class C shares. Such total rate of return quotations may be accompanied by
quotations which do not reflect the reduction in value of the initial
investment due to the sales charge or the deduction of a CDSC, and which will
thus be higher. All performance quotations are based on historical performance
and are not intended to indicate future performance. Yield reflects only net
portfolio income as of a stated time and current distribution rate reflects
only the rate of distributions paid by the Fund over a stated period of time,
while total rate of return reflects all components of investment return over a
stated period of time. The Fund's quotations may from time to time be used in
advertisements, shareholder reports or other communications to shareholders.
For a discussion of the manner in which the Fund will calculate its yield,
current distribution rate and total rate of return, see the SAI. For further
information about the Fund's performance for the fiscal year ended February
29, 1996, please see the Fund's Annual Report. A copy of the Annual Report may
be obtained without charge by contacting the Shareholder Servicing Agent (see
back cover for address and phone number). In addition to information provided
in shareholder reports, the Fund may, in its discretion, from time to time,
make a list of all or a portion of its holdings available to investors upon
request.

7. SHAREHOLDER SERVICES
Shareholders with questions concerning the shareholder services described
below or concerning other aspects of the Fund should contact the Shareholder
Servicing Agent (see back cover for address and phone number).

ACCOUNT AND CONFIRMATION STATEMENTS -- Each shareholder will receive
confirmation statements showing the transaction activity in his account. At
the end of each calendar year, each shareholder will receive income tax
information regarding any reportable dividends and any capital gain
distributions for that year (see "Tax Status").

DISTRIBUTION OPTIONS -- The following options are available to all accounts
(except Systematic Withdrawal Plan accounts) and may be changed as often as
desired by notifying the Shareholder Servicing Agent:

-- Dividends and capital gain distributions reinvested in additional
shares. This option will be assigned if no other option is specified;

-- Dividends in cash; capital gain distributions reinvested in additional
shares;

-- Dividends and capital gain distributions in cash.

Reinvestments (net of any tax withholding) will be made in additional full and
fractional shares of the same class of shares at the net asset value in effect
at the close of business on the record date. Dividends and capital gain
distributions in amounts less than $10 will automatically be reinvested in
additional shares of the Fund. If a shareholder has elected to receive
dividends and/or capital gain distributions in cash, and the postal or other
delivery service is unable to deliver checks to the shareholder's address of
record, or the shareholder does not respond to mailings from the Shareholder
Servicing Agent with regard to uncashed distribution checks, such
shareholder's distribution option will automatically be converted to having
all dividends and other distributions reinvested in additional shares. Any
request to change a distribution option must be received by the Shareholder
Servicing Agent by the record date for a dividend or distribution in order to
be effective for that dividend or distribution. No interest will accrue on
amounts represented by uncashed distribution or redemption checks.

INVESTMENT AND WITHDRAWAL PROGRAMS -- For the convenience of shareholders, the
Fund makes available the following programs designed to enable shareholders to
add to their investment in an account with the Fund or withdraw from it with a
minimum of paper work. The programs involve no extra charge to shareholders
(other than a sales charge in the case of certain Class A share purchases) and
may be changed or discontinued at any time by a shareholder or the Fund.

LETTER OF INTENT: If a shareholder (other than a group purchaser as
described in the SAI) anticipates purchasing $100,000 or more of Class A
shares of the Fund alone or in combination with shares of any class of other
MFS Funds or the MFS Fixed Fund (a bank collective investment fund) within a
13-month period (or 36-month period for purchases of $1 million or more), the
shareholder may obtain such shares at the same reduced sales charge as though
the total quantity were invested in one lump sum, subject to escrow agreements
and the appointment of an attorney for redemptions from the escrow amount if
the intended purchases are not completed, by completing the Letter of Intent
section of the Account Application.

RIGHT OF ACCUMULATION: A shareholder qualifies for cumulative quantity
discounts on purchases of Class A shares when his new investment, together
with the current offering price value of all holdings of all classes of shares
of that shareholder in the MFS Funds or the MFS Fixed Fund reaches a discount
level.

DISTRIBUTION INVESTMENT PROGRAM: Shares of a particular class of the Fund
may be sold at net asset value (and without any applicable CDSC) through the
automatic reinvestment of dividend and capital gain distributions from the
same class of another MFS Fund. Furthermore, distributions made by the Fund
may be automatically invested at net asset value (and without any applicable
CDSC) in shares of the same class of one of the other MFS Funds, if shares of
such Fund are available for sale.

DOLLAR COST AVERAGING PROGRAMS --
AUTOMATIC INVESTMENT PLAN: Cash investments of $50 or more may be made
through a shareholder's checking account twice monthly, monthly or quarterly.
Required forms are available from the Shareholder Servicing Agent or
investment dealers.

AUTOMATIC EXCHANGE PLAN: Shareholders having account balances of at least
$5,000 in any MFS Fund may participate in the Automatic Exchange Plan, a
dollar cost averaging program. The Automatic Exchange Plan provides for
automatic monthly or quarterly exchanges of funds from the shareholder's
account in an MFS Fund for investment in the same class of other MFS Funds
selected by the shareholder if such fund is available for sale. Under the
Automatic Exchange Plan, exchanges of at least $50 each may be made to up to
four different funds. A shareholder should consider the objectives and
policies of a fund and review its prospectus before electing to exchange money
into such fund through the Automatic Exchange Plan. No transaction fee is
imposed in connection with exchange transactions under the Automatic Exchange
Plan. However, exchanges of shares of MFS Money Market Fund, MFS Government
Money Market Fund or Class A shares of MFS Cash Reserve Fund will be subject
to any applicable sales charge. For federal and (generally) state income tax
purposes, an exchange is treated as a sale of the shares exchanged and,
therefore, could result in a capital gain or loss to the shareholder making
the exchange. See the SAI for further information concerning the Automatic
Exchange Plan. Investors should consult their tax advisers for information
regarding the potential capital gain and loss consequences of transactions
under the Automatic Exchange Plan.

Because a dollar cost averaging program involves periodic purchases of shares
regardless of fluctuating share offering prices, a shareholder should consider
his financial ability to continue his purchases through periods of low price
levels. Maintaining a dollar cost averaging program concurrently with a
withdrawal program could be disadvantageous because of the sales charges
included in share purchases in the case of Class A shares, and because of the
assessment of the CDSC for certain share redemptions in the case of Class A
shares.

TAX-DEFERRED RETIREMENT PLANS -- Shares of the Fund may be purchased by all
types of tax-deferred retirement plans, including IRAs, SEP-IRA plans, 401(k)
plans, 403(b) plans and other corporate pension and profit-sharing plans.
Investors should consult with their tax advisers before establishing any of
the tax-deferred retirement plans described above.
------------

The Fund's SAI, dated July 1, 1996, as amended or supplemented from time to
time, contains more detailed information about the Fund, including, but not
limited to, information related to (i) the Fund's investment objective,
policies and restrictions, (ii) its Trustees, officers and investment adviser,
(iii) portfolio trading, (iv) the method used to calculate performance
quotations of the Fund, (v) the Fund's Class A, Class B and Class C
Distribution Plans, and (vi) various services and privileges provided by the
Fund for the benefit of its shareholders, including additional information
with respect to the exchange privilege.

<PAGE>

APPENDIX A

WAIVERS OF SALES CHARGES

This Appendix sets forth the various circumstances in which all applicable
sales charges are waived (Section I), the initial sales charge and the
contingent deferred sales charge ("CDSC") for Class A shares are waived
(Section II), and the CDSC for Class B and Class C shares is waived (Section
III).

I. WAIVERS OF ALL APPLICABLE SALES CHARGES

In the following circumstances, the initial sales charge imposed on
purchases of Class A shares and the CDSC imposed on certain redemptions of
Class A shares and on redemptions of Class B and Class C shares, as
applicable, are waived:

1. DIVIDEND REINVESTMENT

* Shares acquired through dividend or capital gain reinvestment; and

* Shares acquired by automatic reinvestment of distributions of
dividends and capital gains of any fund in the MFS Family of Funds
("MFS Funds") pursuant to the Distribution Investment Program.

2. CERTAIN ACQUISITIONS/LIQUIDATIONS

* Shares acquired on account of the acquisition or liquidation of
assets of other investment companies or personal holding companies.

3. AFFILIATES OF AN MFS FUND/CERTAIN DEALERS. Shares acquired by:

* Officers, eligible directors, employees (including retired
employees) and agents of Massachusetts Financial Services Company
("MFS"), Sun Life Assurance Company of Canada ("Sun Life") or any of
their subsidiary companies;

* Trustees and retired trustees of any investment company for which
MFS Fund Distributors, Inc. ("MFD") serves as distributor;

* Employees, directors, partners, officers and trustees of any sub-
adviser to any MFS Fund;

* Employees or registered representatives of dealers and other
financial institutions ("dealers") which have a sales agreement with
MFD;

* Certain family members of any such individual and their spouses
identified above and certain trusts, pension, profit-sharing or
other retirement plans for the sole benefit of such persons,
provided the shares are not resold except to the MFS Fund which
issued the shares; and

* Institutional Clients of MFS or MFS Asset Management, Inc. ("AMI").

4. INVOLUNTARY REDEMPTIONS (CDSC WAIVER ONLY)

* Shares redeemed at an MFS Fund's direction due to the small size of
a shareholder's account. See "Redemptions and Repurchases -- General
-- Involuntary Redemptions/Small Accounts" in the Prospectus.

5. RETIREMENT PLANS (CDSC WAIVER ONLY). Shares redeemed on account of
distributions made under the following circumstances:

INDIVIDUAL RETIREMENT ACCOUNTS ("IRAS")

* Death or disability of the IRA owner.

SECTION 401(A) PLANS ("401(A) PLANS") AND SECTION 403(B) EMPLOYER
SPONSORED PLANS ("ESP PLANS")

* Death, disability or retirement of 401(a) or ESP Plan participant;

* Loan from 401(a) or ESP Plan (repayment of loans, however, will
constitute new sales for purposes of assessing sales charges);

* Financial hardship (as defined in Treasury Regulation Section 1.401
(k)-1(d)(2), as amended from time to time);

* Termination of employment of 401(a) or ESP Plan participant
(excluding, however, a partial or other termination of the Plan);

* Tax-free return of excess 401(a) or ESP Plan contributions;

* To the extent that redemption proceeds are used to pay expenses (or
certain participant expenses) of the 401(a) or ESP Plan (e.g.,
participant account fees), provided that the Plan sponsor subscribes
to the MFS FUNDamental 401(k) Plan or another similar recordkeeping
system made available by MFS Service Center, Inc. ( the "Shareholder
Servicing Agent"); and

* Distributions from a 401(a) or ESP Plan that has invested its assets
in one or more of the MFS Funds for more than 10 years from the
later to occur of: (i) January 1, 1993 or (ii) the date such 401(a)
or ESP Plan first invests its assets in one or more of the MFS
Funds. The sales charges will be waived in the case of a redemption
of all of the 401(a) or ESP Plan's shares in all MFS Funds (i.e.,
all the assets of the 401(a) or ESP Plan invested in the MFS Funds
are withdrawn), unless immediately prior to the redemption, the
aggregate amount invested by the 401(a) or ESP Plan in shares of the
MFS Funds (excluding the reinvestment of distributions) during the
prior four years equals 50% or more of the total value of the 401(a)
or ESP Plan's assets in the MFS Funds, in which case the sales
charges will not be waived.

SECTION 403(B) SALARY REDUCTION ONLY PLANS ("SRO PLANS")

* Death or disability of SRO Plan participant.

6. CERTAIN TRANSFERS OF REGISTRATION (CDSC WAIVER ONLY). Shares
transferred:

* To an IRA rollover account where any sales charges with respect to
the shares being reregistered would have been waived had they been
redeemed; and

* From a single account maintained for a 401(a) Plan to multiple
accounts maintained by the Shareholder Servicing Agent on behalf of
individual participants of such Plan, provided that the Plan sponsor
subscribes to the MFS FUNDamental 401(k) Plan or another similar
recordkeeping system made available by the Shareholder Servicing
Agent.

II. WAIVERS OF CLASS A SALES CHARGES

In addition to the waivers set forth in Section I above, in the following
circumstances the initial sales charge imposed on purchases of Class A
shares and the CDSC imposed on certain redemptions of Class A shares are
waived:

1. INVESTMENT OF REDEMPTION PROCEEDS FROM UNAFFILIATED MUTUAL FUNDS

* Shares acquired through the investment of redemption proceeds from
another open-end management investment company not distributed or
managed by MFD or its affiliates if: (i) the investment is made
through a dealer and appropriate documentation is submitted to MFD;
(ii) the redeemed shares were subject to an initial sales charge or
deferred sales charge (whether or not actually imposed); (iii) the
redemption occurred no more than 90 days prior to the purchase of
Class A shares; and (iv) the MFS Fund, MFD or its affiliates have not
agreed with such company or its affiliates, formally or informally, to
waive sales charges on Class A shares or provide any other incentive
with respect to such redemption and sale.

2. WRAP ACCOUNT INVESTMENTS

* Shares acquired by investments through certain dealers which have
entered into an agreement with MFD which includes a requirement that
such shares be sold for the sole benefit of clients participating in a
"wrap" account or a similar program under which such clients pay a fee
to such dealer.

3. INVESTMENT BY INSURANCE COMPANY SEPARATE ACCOUNTS

* Shares acquired by insurance company separate accounts.

4. RETIREMENT PLANS

ADMINISTRATIVE SERVICES ARRANGEMENTS

* Shares acquired by retirement plans whose third party administrators
or dealers have entered into an administrative services agreement
with MFD or one of its affiliates to perform certain administrative
services, subject to certain operational and minimum size
requirements specified from time to time by MFD or one or more of
its affiliates.

REINVESTMENT OF DISTRIBUTIONS FROM QUALIFIED RETIREMENT PLANS

* Shares acquired through the automatic reinvestment in Class A shares
of Class A or Class B distributions which constitute required
withdrawals from qualified retirement plans.

SHARES REDEEMED ON ACCOUNT OF DISTRIBUTIONS MADE UNDER THE FOLLOWING
CIRCUMSTANCES:

IRAS

* Distributions made on or after the IRA owner has attained the age of
59 1/2 years old; and

* Tax-free returns of excess IRA contributions.

401(A) PLANS

* Distributions made on or after the 401(a) Plan participant has
attained the age of 59 1/2 years old; and

* Certain involuntary redemptions and redemptions in connection with
certain automatic withdrawals from a 401(a) Plan.

ESP PLANS AND SRO PLANS

* Distributions made on or after the ESP or SRO Plan participant has
attained the age of 59 1/2 years old.

III. WAIVERS OF CLASS B AND CLASS C SALES CHARGES

In addition to the waivers set forth in Section I above, in the following
circumstances the CDSC imposed on redemptions of Class B and Class C
shares is waived:

1. SYSTEMATIC WITHDRAWAL PLAN

* Systematic Withdrawal Plan redemptions with respect to up to 10% per
year of the account value at the time of establishment.

2. DEATH OF OWNER

* Shares redeemed on account of the death of the account owner if the
shares are held solely in the deceased individual's name or in a
living trust for the benefit of the deceased individual.

3. DISABILITY OF OWNER

* Shares redeemed on account of the disability of the account owner if
shares are held either solely or jointly in the disabled individual's
name or in a living trust for the benefit of the disabled individual
(in which case a disability certification form is required to be
submitted to the Shareholder Servicing Agent).

4. RETIREMENT PLANS. Shares redeemed on account of distributions made under
the following circumstances:

IRAS, 401(A) PLANS, ESP PLANS AND SRO PLANS

* Distributions made on or after the IRA owner or the 401(a), ESP or SRO
Plan participant, as applicable, has attained the age of 70 1/2 years
old, but only with respect to the minimum distribution under
applicable Internal Revenue Code ("Code") rules.

SALARY REDUCTION SIMPLIFIED EMPLOYEE PENSION PLANS ("SAR-SEP PLANS")

* Distributions made on or after the SAR-SEP Plan participant has
attained the age of 70 1/2 years old, but only with respect to the
minimum distribution under applicable Code rules; and

* Death or disability of a SAR-SEP Plan participant.
<PAGE>
APPENDIX B
DESCRIPTION OF OBLIGATIONS ISSUED OR GUARANTEED BY
U.S. GOVERNMENT AGENCIES, AUTHORITIES OR INSTRUMENTALITIES

EXPORT-IMPORT BANK CERTIFICATES -- are certificates of beneficial interest and
participation certificates issued and guaranteed by the Export-Import Bank of
the United States.

FEDERAL AGRICULTURAL MORTGAGE CORPORATION CERTIFICATES -- are certificates of
beneficial interest guaranteed by the Federal Agricultural Mortgage Corporation.

FEDERAL AGRICULTURAL MORTGAGE CORPORATION BONDS AND NOTES -- are bonds and notes
guaranteed by the Federal Agricultural Mortgage Corporation.

FEDERAL FARM CREDIT BANKS CONSOLIDATED SYSTEMWIDE NOTES AND BONDS -- are bonds
issued and guaranteed by a cooperatively owned nationwide system of banks and
associations supervised by the Farm Credit Administration.

FEDERAL HOME LOAN BANK NOTES AND BONDS -- are notes and bonds issued by the
Federal Home Loan Bank System.

FEDERAL HOME LOAN BANK CERTIFICATES -- are certificates of beneficial interest
and participation certificates issued and guaranteed by the Federal Home Loan
Bank System.

FHA DEBENTURES -- are debentures issued by the Federal Housing Authority of the
U.S. Government.

FHLMC BONDS -- are bonds issued and guaranteed by the Federal Home Loan Mortgage
Corporation and are not guaranteed by the U.S. Government.

FICO BONDS AND NOTES -- are bonds and notes issued and guaranteed by the
Financing Corporation.

FNMA BONDS -- are bonds issued and guaranteed by the Federal National Mortgage
Association and are not guaranteed by the U.S. Government.

GNMA CERTIFICATES -- are mortgage-backed securities which represent a partial
ownership interest in a pool of mortgage loans issued by lenders such as
mortgage bankers, commercial banks and savings and loan associations. Each
mortgage loan included in the pool is either insured by the Federal Housing
Administration or guaranteed by the Veterans Administration.

The Fund will purchase only GNMA Certificates of the "modified pass- through"
type, which entitle the holder to receive its proportionate share of all
interest and principal payments owed on the mortgage pool, net of fees paid to
the issuer and GNMA. Payment of principal of and interest on GNMA Certificates
of the "modified pass-through" type is guaranteed by GNMA.

The average life of a GNMA Certificate is likely to be substantially less than
the original maturity of the mortgage pools underlying the securities.
Prepayments of principal by mortgagors and mortgage foreclosures will usually
result in the return of the greater part of principal invested far in advance of
the maturity of the mortgages in the pool. Foreclosures impose no risk to
principal investment because of the GNMA guarantee.

As the prepayment rates of individual mortgage pools will vary widely, it is not
possible to accurately predict the average life of a particular issue of GNMA
Certificates. However, statistics published by the FHA indicate that the average
life of a single-family dwelling mortgage with a 25-to 30-year maturity, the
type of mortgage which backs the vast majority of GNMA Certificates, is
approximately 12 years. It is therefore customary practice to treat GNMA
Certificates as 30-year mortgage-backed securities which prepay fully in the
twelfth year.

As a consequence of the fees paid to GNMA and the issuer of GNMA Certificates,
the coupon rate of interest of GNMA Certificates is lower than the interest paid
on the VA-guaranteed or FHA-insured mortgages underlying the GNMA Certificates.

The yield which will be earned on GNMA Certificates may vary from their coupon
rates for the following reasons: (i) Certificates may be issued at a premium or
discount, rather than at par; (ii) Certificates may trade in the secondary
market at a premium or discount after issuance; (iii) interest is earned and
compounded monthly which has the effect of raising the effective yield earned on
the Certificates; and (iv) the actual yield of each Certificate is affected by
the prepayment of mortgages included in the mortgage pool underlying the
Certificates and the rate at which principal so prepaid is reinvested. In
addition, prepayment of mortgages included in the mortgage pool underlying a
GNMA Certificate purchased at a premium may result in a loss to the Fund.

Due to the large amount of GNMA Certificates outstanding and active
participation in the secondary market by securities dealers and investors, GNMA
Certificates are highly liquid instruments. Prices of GNMA Certificates are
readily available from securities dealers and depend on, among other things, the
level of market rates, the Certificate's coupon rate and the prepayment
experience of the pool of mortgages backing each Certificate.

GSA PARTICIPATION CERTIFICATES -- are participation certificates issued by the
General Services Administration of the U.S. Government.

MARITIME ADMINISTRATION BONDS -- are bonds issued by the Department of
Transportation of the U.S. Government.

NEW COMMUNITIES DEBENTURES -- are debentures issued in accordance with the
provisions of Title IV of the Housing and Urban Development Act of 1968, as
supplemented and extended by Title VII of the Housing and Urban Development Act
of 1970, the payment of which is guaranteed by the U.S. Government.

REFCORP BONDS AND NOTES -- are bonds and notes issued and guaranteed by the
Resolution Funding Corporation.

SBA DEBENTURES -- are debentures fully guaranteed as to principal and interest
by the Small Business Administration of the U.S. Government.

SLMA DEBENTURES -- are debentures backed by the Student Loan Marketing
Association.

TITLE XI BONDS -- are bonds issued in accordance with the provisions of Title XI
of the Merchant Marine Act of 1936, as amended, the payment of which is
guaranteed by the U.S. Government.

TVA BONDS AND NOTES -- are bonds and notes issued and guaranteed by the
Tennessee Valley Authority.

U.S. DEPARTMENT OF VETERAN AFFAIRS CERTIFICATES -- are certificates of
beneficial interest guaranteed by the U.S. Department of Veteran Affairs.

WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY BONDS -- are bonds issued by the
Washington Metropolitan Area Transit Authority and guaranteed by the Secretary
of Transportation of the U.S. Government.

Although this list includes the primary types of Government Securities in which
the Fund invests, the Fund may also invest in Government Securities other than
those listed above.

<PAGE>

Investment Adviser
Massachusetts Financial Services Company
500 Boylston Street
Boston, MA 02116
(617) 954-5000

Distributor
MFS Fund Distributors, Inc.
500 Boylston Street
Boston, MA 02116
(617) 954-5000

Custodian and Dividend Disbursing Agent
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110

Shareholder Servicing Agent
MFS Service Center, Inc.
500 Boylston Street
Boston, MA 02116
Toll-free: (800) 225-2606

Mailing Address:
P.O.Box 2281
Boston, MA 02107-9906

Auditors
Deloitte & Touche llp
125 Summer Street
Boston, MA02110

[LOGO]
THE FIRST NAME IN MUTUAL FUNDS

MFS(R) GOVERNMENT SECURITIES FUND

Prospectus
July 1, 1996

[LOGO]
THE FIRST NAME IN MUTUAL FUNDS

MFS(R) GOVERNMENT
SECURITIES FUND
500 Boylston Street
Boston, MA 02116

MGS-1-7/96/115M 26/226/326

<PAGE>

[LOGO]
THE FIRST NAME IN MUTUAL FUNDS

MFS(R) GOVERNMENT
SECURITIES FUND STATEMENT OF
ADDITIONAL INFORMATION

(A Member of the MFS Family of Funds(R)) July 1, 1996

- --------------------------------------------------------------------------------
Page
----
1. Definitions ...................................................... 2
2. The Fund ......................................................... 2
3. Investment Objective, Policies and Restrictions .................. 2
4. Management of the Fund ........................................... 5
Trustees ...................................................... 5
Officers ...................................................... 5
Investment Adviser ............................................ 6
Custodian ..................................................... 6

Shareholder Servicing Agent ................................... 7

Distributor ................................................... 7

5. Portfolio Trading ................................................ 8

6. Shareholder Services ............................................. 8
Investment and Withdrawal Programs ............................ 8
Exchange Privilege ............................................ 10
Tax-Deferred Retirement Plans ................................. 10

7. Tax Status ....................................................... 11

8. Determination of Net Asset Value and Performance ................. 11

9. Distribution Plans ............................................... 14
10. Description of Shares, Voting Rights and Liabilities ............. 14
11. Independent Auditors and Financial Statements .................... 15

Appendix A ....................................................... 16

MFS GOVERNMENT SECURITIES FUND
500 Boylston Street, Boston, Massachusetts 02116
(617) 954-5000

This Statement of Additional Information, as amended or supplemented from time
to time (the "SAI"), sets forth information which may be of interest to
investors but which is not necessarily included in the Fund's Prospectus, dated
July 1, 1996. This SAI should be read in conjunction with the Prospectus, a copy
of which may be obtained without charge by contacting the Shareholder Servicing
Agent (see last page for address and phone number).

THIS SAI IS NOT A PROSPECTUS AND IS AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE
INVESTORS ONLY IF PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS.

<PAGE>

1. DEFINITIONS
"Fund" -- MFS(R) Government Securities Fund,
a Massachusetts business trust.

"MFS" or the "Adviser" -- Massachusetts Financial Services
Company, a Delaware corporation.

"MFD" -- MFS Fund Distributors, Inc., a
Delaware corporation.

"Prospectus" -- The Prospectus of the Fund, dated
July 1, 1996, as amended or
supplemented from time to time.

2. THE FUND
MFS Government Securities Fund is an open-end, diversified management investment
company which was organized as a business trust under the laws of The
Commonwealth of Massachusetts in 1981 and functioned as a taxable money market
fund under the name "Working Capital Trust." During the period from May 15, 1984
to July 24, 1984, the Fund's management, with the approval of its shareholders,
reorganized the Fund with the objective set forth in the Prospectus and this
SAI. The Fund was known as "MFS Government Guaranteed Securities Trust" until
December 1990, then as "MFS Government Securities Trust" until its name was
changed effective August 1992.

3. INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS
INVESTMENT OBJECTIVE. The Fund's investment objective is to provide current
income and preservation of principal. Any investment involves risk and there can
be no assurance that the Fund will achieve its investment objective.

INVESTMENT POLICIES. The investment policies of the Fund are described in the
Prospectus. In addition, certain of the Fund's investment policies are
described in greater detail below.

MORTGAGE PASS-THROUGH SECURITIES: The Fund may invest in mortgage pass-through
securities as described in the Prospectus. Interests in pools of
mortgage-related securities differ from other forms of debt securities, which
normally provide for periodic payment of interest in fixed amounts with
principal payments at maturity or specified call dates. Instead, these
securities provide a monthly payment which consists of both interest and
principal payments. In effect, these payments are a "pass-through" of the
monthly payments made by the individual borrowers on their mortgage loans, net
of any fees paid to the issuer or guarantor of such securities. Additional
payments are caused by prepayments of principal resulting from the sale,
refinancing or foreclosure of the underlying property, net of fees or costs
which may be incurred. Some mortgage pass-through securities (such as securities
issued by the Government National Mortgage Association ("GNMA")) are described
as "modified pass-through." These securities entitle the holder to receive all
interest and principal payments owed on the mortgages in the mortgage pool, net
of certain fees, at the scheduled payment dates regardless of whether the
mortgagor actually makes the payment.

The principal governmental guarantor of mortgage pass-through securities is the
GNMA. GNMA is a wholly owned U.S. Government corporation within the Department
of Housing and Urban Development. GNMA is authorized to guarantee, with the full
faith and credit of the U.S. Government, the timely payment of principal and
interest on securities issued by institutions approved by GNMA (such as savings
and loan institutions, commercial banks and mortgage bankers) and backed by
pools of FHA-insured or VA-guaranteed mortgages. These guarantees, however, do
not apply to the market value or yield of mortgage pass-through securities. GNMA
securities are often purchased at a premium over the maturity value of the
underlying mortgages. This premium is not guaranteed and will be lost if
prepayment occurs.

Government-related guarantors (i.e., whose guarantees are not backed by the full
faith and credit of the U.S. Government) include the Federal National Mortgage
Association ("FNMA") and the Federal Home Loan Mortgage Corporation ("FHLMC").
FNMA is a government-sponsored corporation owned entirely by private
stockholders. It is subject to general regulation by the Secretary of Housing
and Urban Development. FNMA purchases conventional residential mortgages (i.e.,
mortgages not insured or guaranteed by any governmental agency) from a list of
approved seller/servicers which include state and federally-chartered savings
and loan associations, mutual savings banks, commercial banks, credit unions and
mortgage bankers. Pass-through securities issued by FNMA are guaranteed as to
timely payment by FNMA of principal and interest.

FHLMC was created by Congress in 1970 as a corporate instrumentality of the U.S.
Government for the purpose of increasing the availability of mortgage credit for
residential housing. FHLMC issues Participation Certificates ("PCs") which
represent interests in conventional mortgages (i.e., not federally insured or
guaranteed) from FHLMC's national portfolio. FHLMC guarantees timely payment of
interest and ultimate collection of principal regardless of the status of the
underlying mortgage loans.

REPURCHASE AGREEMENTS: As described in the Prospectus, the Fund may enter into
repurchase agreements with primary reporting dealers that report to the Federal
Reserve Bank of New York and with the 100 largest U.S. commercial banks. The
securities that the Fund purchases and holds through its agent are securities
that are issued or guaranteed as to principal and interest by the U.S.
Government, its agencies, authorities or instrumentalities ("Government
Securities"), the values of which are equal to or greater than the repurchase
price agreed to be paid by the seller. The repurchase price may be higher than
the purchase price, the difference being income to the Fund, or the purchase and
repurchase prices may be the same, with interest at a standard rate due to the
Fund together with the repurchase price on repurchase. In either case, the
income to the Fund is unrelated to the interest rate on the Government
Securities.

The repurchase agreement provides that in the event the seller fails to pay the
price agreed upon on the agreed upon delivery date or upon demand, as the case
may be, the Fund will have the right to liquidate the securities. If at the time
the Fund is contractually entitled to exercise its right to liquidate the
securities, the seller is subject to a proceeding under the bankruptcy laws or
its assets are otherwise subject to a stay order, the Fund's exercise of its
right to liquidate the securities may be delayed and result in certain losses
and costs to the Fund. The Fund has adopted and follows procedures which are
intended to minimize the risks of repurchase agreements. For example, the Fund
only enters into repurchase agreements after the Adviser has determined that the
seller is creditworthy, and the Adviser monitors that seller's creditworthiness
on an ongoing basis. Moreover, under such agreements, the value of the
securities (which are marked to market every business day) is required to be
greater than the repurchase price, and the Fund has the right to make margin
calls at any time if the value of the securities falls below the agreed upon
margin.

"WHEN-ISSUED" SECURITIES: The Fund may purchase securities on a "when-issued" or
on a "forward delivery" basis. When the Fund commits to purchase Government
Securities on a "when-issued" or "forward delivery" basis, it will set up
procedures consistent with the General Statement of Policy of the Securities and
Exchange Commission (the "SEC") concerning such purchases. Since that policy
currently recommends that an amount of the Fund's assets equal to the amount of
the purchase be held aside or segregated to be used to pay for the commitment,
the Fund will always have cash, cash equivalents or Government Securities
sufficient to cover any commitments or to limit any potential risk. The Fund
does not intend to make such purchases for speculative purposes. The Fund will
only make commitments to purchase securities on a "when-issued" or
delayed-delivery basis with the intention of actually acquiring the securities.
However, the Fund may sell these securities before the settlement date if it is
deemed advisable as a matter of investment strategy. When the time comes to pay
for "when-issued" or delayed-delivery securities, the Fund will meet its
obligations from the then available cash flow or the sale of securities, or,
although it would not normally expect to do so, from the sale of the
"when-issued" or delayed-delivery securities themselves (which may have a value
greater or less than the Fund's payment obligation).

MORTGAGE "DOLLAR-ROLL" TRANSACTIONS: As described in the Prospectus, the Fund
may enter into mortgage "dollar roll" transactions pursuant to which it sells
mortgage-backed securities for delivery in the future and simultaneously
contracts to repurchase substantially similar securities on a specified future
date. During the roll period, the Fund foregoes principal and interest paid on
the mortgage-backed securities. The Fund is compensated for the lost interest by
the difference between the current sales price and the lower price for the
future purchase (often referred to as the "drop") as well as by the interest
earned on the cash proceeds of the initial sale. The Fund may also be
compensated by receipt of a commitment fee.

In a CMO, a series of bonds or certificates is usually issued in multiple
classes with different maturities. Each class of CMOs, often referred to as a
"tranche," is issued at a specific fixed or floating coupon rate and has a
stated maturity or final distribution date. Principal prepayments on the
Mortgage Assets may cause the CMOs to be retired substantially earlier than
their stated maturities or final distribution dates resulting in a loss of all
or part of the premium if any has been paid. Certain classes of CMOs have
priority over others with respect to the receipt of prepayments on the
mortgages. Therefore, depending on the type of CMO in which the Fund invests,
the instrument may be subject to a greater or lesser risk of prepayment than
other types of mortgage-related securities. The principal of and interest on the
Mortgage Assets may be allocated among the several classes of a series of a CMO
in innumerable ways. In a common structure, payments of principal, including any
principal prepayments, on the Mortgage Assets are applied to the classes of the
series of a CMO in the order of their respective stated maturities or final
distribution dates, so that no payment of principal will be made on any class of
CMOs until all other classes having an earlier stated maturity or final
distribution date have been paid in full.

CMOs also include parallel-pay CMOs and Planned Amortization Class CMOs ("PAC
Bonds"). Parallel-pay CMOs are structured to provide payments of principal on
each payment date to more than one class. These simultaneous payments are taken
into account in calculating the stated maturity date or final distribution date
of each class, which, as with other CMO structures, must be retired by its
stated maturity date or final distribution date but may be retired earlier. PAC
Bonds generally require payments of a specified amount of principal on each
payment date. PAC Bonds are always parallel-pay CMOs with the required principal
payment on such securities having the highest priority after interest has been
paid to all classes.

LENDING OF PORTFOLIO SECURITIES: The Fund may seek to increase its income by
lending portfolio securities. Such loans will usually be made only to member
firms (and subsidiaries thereof) of the New York Stock Exchange (the "Exchange")
and member banks of the Federal Reserve System, and would be required to be
secured continuously by collateral in cash, U.S. Government securities or an
irrevocable letter of credit maintained on a current basis at an amount at least
equal to the market value of the securities loaned. The Fund would have the
right to call a loan and obtain the securities loaned at any time on customary
industry settlement notice (which will not usually exceed five days). During the
existence of a loan, the Fund would continue to receive the equivalent of the
interest or dividends paid by the issuer on the securities loaned and would also
receive compensation based on investment of the cash collateral or a fee. The
Fund would not, however, have the right to vote any securities having voting
rights during the existence of the loan, but would call the loan in anticipation
of an important vote to be taken among holders of the securities or of the
giving or withholding of their consent on a material matter affecting the
investment. As with other extensions of credit, there are risks of delay in
recovery or even loss of rights in the collateral should the borrower of the
securities fail financially. However, the loans would be made only to firms
deemed by the Adviser to be of good standing, and when, in the judgment of the
Adviser, the consideration which could be earned currently from securities loans
of this type justifies the attendant risk. If the Adviser determines to make
securities loans, it is not intended that the value of the securities loaned
would exceed 30% of the value of the Fund's total assets.

The objective and the policies described above and the policies with respect to
portfolio management described below may be changed without shareholder
approval.

PORTFOLIO MANAGEMENT: The Fund intends to fully manage its portfolio by buying
and selling Government Securities, as well as holding selected Government
Securities to maturity. In managing its portfolio the Fund seeks to maximize the
return on its portfolio by taking advantage of market developments and yield
disparities, which may include use of the following strategies:

(1) shortening the average maturity of its portfolio in anticipation of a
rise in interest rates so as to minimize depreciation of principal;

(2) lengthening the average maturity of its portfolio in anticipation of a
decline in interest rates so as to maximize appreciation of principal;

(3) selling one type of Government Security (e.g., Treasury bonds) and
buying another (e.g., GNMA direct pass-through certificates) when disparities
arise in the relative values of each; and

(4) changing from one Government Security to an essentially similar
Government Security when their respective yields are distorted due to market
factors.

These strategies may result in increases or decreases in the Fund's current
income available for distribution to the Fund's shareholders and in the holding
by the Fund of Government Securities which sell at moderate to substantial
premiums or discounts from face value. Moreover, if the Fund's expectations of
changes in interest rates or its evaluation of the normal yield relationship
between two Government Securities proves to be incorrect, the Fund's income, net
asset value per share and potential capital gain may be decreased or its
potential capital loss may be increased.

INVESTMENT RESTRICTIONS. The Fund has adopted the following restrictions which
cannot be changed without the approval of the holders of a majority of its
shares (which, as used in this SAI, means the lesser of (i) more than 50% of the
outstanding shares of the Fund (or a class, as applicable) or (ii) 67% or more
of the outstanding shares of the Fund (or a class, as applicable) present at a
meeting if holders of more than 50% of the outstanding shares of the Fund (or a
class, as applicable) are represented at such meeting in person or by proxy):

The Fund may not:

(1) borrow money or pledge, mortgage or hypothecate in excess of 1/3 of its
assets, and then only as a temporary measure for extraordinary or emergency
purposes (the Fund intends to borrow money only from banks and only to
accommodate requests for the repurchase of shares of the Fund while effecting
an orderly liquidation of portfolio securities); for additional related
restrictions, see paragraph (i) under the caption "State and Federal
Restrictions";

(2) purchase any security or evidence of interest therein on margin, except
that the Fund may obtain such short-term credit as may be necessary for the
clearance of purchases and sales of securities and except that the Fund may
make deposits on margin in connection with interest rate futures contracts;

(3) purchase or sell any put or call option or any combination thereof,
provided that this shall not prevent the purchase, ownership, holding or sale
of contracts for the future delivery of fixed income securities;

(4) underwrite securities issued by other persons except insofar as the Fund
may technically be deemed an underwriter under the Securities Act of 1933 in
selling a portfolio security;

(5) make loans to other persons. For these purposes, the purchase of
short-term commercial paper, the purchase of a portion or all of an issue of
debt securities in accordance with its investment objectives and policies, the
lending of portfolio securities, or the investment of the Fund's assets in
repurchase agreements, shall not be considered the making of a loan;

(6) knowingly invest in securities which are subject to legal or contractual
restrictions on resale (other than repurchase agreements) if, as a result
thereof, more than 10% of the Fund's total assets (taken at market value)
would be so invested;

(7) purchase or sell real estate (including limited partnership interests
but excluding securities secured by real estate or interests therein),
interests in oil, gas or mineral leases, commodities or commodity contracts
(except contracts for the future acquisition or delivery of fixed income
securities) in the ordinary course of the Fund's business (the Fund reserves
the freedom of action to hold and to sell real estate acquired as a result of
the ownership of securities);

(8) purchase securities of any issuer if such purchase at the time thereof
would cause more than 10% of the voting securities of such issuer to be held
by the Fund;

(9) sell any security which it does not own unless by virtue of its
ownership of other securities the Fund has at the time of sale a right to
obtain securities, without payment of further consideration, equivalent in
kind and amount to the securities sold and provided that if such right is
conditional the sale is made upon the same conditions;

(10) purchase securities of any issuer if such purchase at the time thereof
would cause more than 5% of the Fund's assets (taken at market value) to be
invested in the securities of such issuer (other than securities or
obligations issued or guaranteed by the United States, any state or political
subdivision thereof, or any political subdivision of any such state, or any
agency or instrumentality of the United States or of any state or of any
political subdivision of any state or the United States); or

(11) issue any senior security (as that term is defined in the Investment
Company Act of 1940 (the "1940 Act")), if such issuance is specifically
prohibited by the 1940 Act or the rules and regulations promulgated
thereunder.

STATE AND FEDERAL RESTRICTIONS: In order to comply with certain state and
federal statutes and policies, the Fund will not, as a matter of operating
policy, (i) borrow money for any purpose in excess of 10% of its assets (taken
at market value) (moreover, the Fund will not purchase any securities for its
portfolio at any time at which borrowings exceed 5% of its assets (taken at
market value)), (ii) invest more than 5% of its total assets at the time of
investment in companies which, including predecessors, have a record of less
than three years' continuous operation, (iii) purchase or retain in its
portfolio any securities issued by an issuer any of whose officers, directors,
trustees or security holders is an officer or Trustee of the Fund, or is an
officer or Director of the Adviser if, after the purchase of the securities of
such issuer by the Fund, one or more of such persons owns beneficially more than
1/2 of 1% of the shares or securities, or both, of such issuer and such persons
owning more than 1/2 of 1% of such shares or securities together own
beneficially more than 5% of such shares or securities, or both, (iv) invest for
the purpose of exercising control or management, (v) purchase securities issued
by any registered investment company except by purchase in the open market where
no commission or profit to a sponsor or dealer results from such purchase other
than the customary broker's commission, or except when such purchase, though not
made in the open market, is part of a plan of merger or consolidation; provided,
however, that the Fund shall not purchase the securities of any registered
investment company if such purchase at the time thereof would cause more than
10% of the total assets of the Fund (taken at market value) to be invested in
the securities of such issuers or would cause more than 3% of the outstanding
voting securities of any such issuer to be held by the Fund and; provided
further, that the Fund shall not purchase securities issued by any open-end
investment company, or (vi) invest more than 10% of its assets (taken at market
value) in securities (including repurchase agreements maturing in more than
seven days) for which there are no readily available market quotations. These
policies are not fundamental and may be changed by the Fund without shareholder
approval only in response to changes in the various state and federal
requirements.

APPLICABILITY OF RESTRICTIONS: These investment restrictions are adhered to at
the time of purchase or utilization of assets; a subsequent change in
circumstances will not be considered to result in a violation of policy.

4. MANAGEMENT OF THE FUND

The Fund's Board of Trustees provides broad supervision over the affairs of the
Fund. The Adviser is responsible for the management of the Fund's assets, and
the officers of the Fund are responsible for its operations. The Trustees and
officers are listed below, together with their principal occupations during the
past five years. (Their titles may have varied during that period.)

TRUSTEES

A. KEITH BRODKIN*; Chairman and President
Massachusetts Financial Services Company, Chairman and Director

RICHARD B. BAILEY*
Private Investor; Massachusetts Financial Services Company, former Chairman
(prior to September 30, 1991); Cambridge Bancorp, Director; Cambridge Trust
Company, Director

PETER G. HARWOOD
Private Investor
Address: 211 Lindsay Pond Road, Concord, Massachusetts

J. ATWOOD IVES
Eastern Enterprises (diversified holding company), Chairman and Chief Executive
Officer (since December 1991); General Cinema Corporation, Vice Chairman and
Chief Financial Officer (prior to December 1991); The Neiman Marcus Group,
Inc., Vice Chairman and Chief Financial Officer (prior to February 1992)
Address: 9 Riverside Road, Weston, Massachusetts

LAWRENCE T. PERERA
Hemenway & Barnes (attorneys), Partner
Address: 60 State Street, Boston, Massachusetts

WILLIAM J. POORVU
Harvard University Graduate School of Business Administration, Adjunct
Professor; CBL & Associates Properties, Inc. (a real estate investment trust),
Director; The Baupost Fund (a registered investment company), Vice Chairman
(since November 1993), Chairman and Trustee (prior to November 1993)
Address: Harvard Business School, Soldiers Field Road, Cambridge,
Massachusetts

CHARLES W. SCHMIDT
Private Investor; OHM Corporation, Director; The Boston Company, Director;
Boston Safe Deposit and Trust Company, Director; Mohawk Paper Company,
Director
Address: 30 Colpitts Road, Weston, Massachusetts

ARNOLD D. SCOTT*
Massachusetts Financial Services Company, Senior Executive Vice President and
Secretary

JEFFREY L. SHAMES*
Massachusetts Financial Services Company, President

ELAINE R. SMITH
Independent Consultant; Brigham and Women's Hospital, Executive Vice President
and Chief Operating Officer (prior to September 1992)
Address: Weston, Massachusetts

DAVID B. STONE
North American Management Corp. (investment advisers), Chairman and Director
Address: Ten Post Office Square, Suite 300, Boston, Massachusetts

OFFICERS
W. THOMAS LONDON,* Treasurer
Massachusetts Financial Services Company, Senior Vice President

JAMES O. YOST,* Assistant Treasurer
Massachusetts Financial Service Company, Vice President

STEPHEN E. CAVAN,* Secretary and Clerk
Massachusetts Financial Services Company, Senior Vice President, General
Counsel and Assistant Secretary

JAMES R. BORDEWICK, JR.,* Assistant Secretary
Massachusetts Financial Services Company, Vice President and Associate General
Counsel

- ----------
*"Interested persons" (as defined in the 1940 Act) of the Adviser, whose address
is 500 Boylston Street, Boston, Massachusetts 02116.

Each Trustee and officer holds comparable positions with certain MFS
affiliates or with certain other funds of which MFS or a subsidiary of MFS is
the investment adviser or distributor. Mr. Brodkin, the Chairman of MFD,
Messrs. Shames and Scott, Directors of MFD, and Mr. Cavan, the Secretary of
MFD, hold similar positions with certain other MFS affiliates. Mr. Bailey is a
Director of Sun Life Assurance Company of Canada (U.S.) ("Sun Life of Canada
(U.S.)"), the corporate parent of MFS.

The Fund pays the compensation of non-interested Trustees and Mr. Bailey, (who
currently receive a fee of $1,500 per year plus $90 per meeting and $70 per
committee meeting attended, together with such Trustees' out-of-pocket expenses)
and has adopted a retirement plan for non-interested Trustees and Mr. Bailey.
Under this plan, a Trustee will retire upon reaching age 73 and if the Trustee
has completed at least five years of service, he would be entitled to annual
payments during his lifetime of up to 50% of such Trustee's average annual
compensation (based on the three years prior to his retirement) depending on his
length of service. A Trustee may also retire prior to age 73 and receive reduced
payments if he has completed at least five years of service. Under the plan, a
Trustee (or his beneficiaries) will also receive benefits for a period of time
in the event the Trustee is disabled or dies. These benefits will also be based
on the Trustee's average annual compensation and length of service. There is no
retirement plan provided by the Fund for Messrs. Brodkin, Scott and Shames. The
Fund will accrue compensation expenses each year to cover current year's service
and amortize past service cost.

Set forth in Appendix A hereto is certain information concerning the cash
compensation paid to the Trustees and benefits accrued, and estimated benefits
payable, under the retirement plan.

As of May 31, 1996, all Trustees and officers as a group owned less than 1% of
the outstanding shares of the Fund.

As of May 31, 1996, Merrill Lynch Pierce Fenner & Smith Inc., P.O. Box 45286,
Jacksonville, Florida was the record owner of approximately 5.39% and 7.18%,
respectively, of the outstanding Class A and Class B shares of the Fund. As of
May 31, 1996, Interstate/Johnson Lane, FBO 527-44818-10, Interstate Tower, P.O.
Box 1220, Charlotte, NC 28201-1220, Morongo Bank of Mission Indians, Designated
Reserves Account, Attn: Elaine Mathews, 11581 Potrero Road, Banning, CA
92220-6946, Morongo Bank of Mission Indians, Administrative Reserve Account,
11581 Potrero Road, Banning, CA 92220-6946 and Phillip L. Wright and Suzanne J.
Wright, Tenants by Entirety, 6204 Mazwood Road, Rockville, Maryland 20852-3528
were the record owners of approximately 11.23%, 7.82%, 12.67% and 52.56%,
respectively, of the outstanding shares of Class C shares of the Fund.

The Fund's Declaration of Trust provides that it will indemnify its Trustees and
officers against liabilities and expenses incurred in connection with litigation
in which they may be involved because of their offices with the Fund, unless, as
to liability to the Fund or its shareholders, it is finally adjudicated that
they engaged in willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in their offices, or with respect to any
matter, unless it is adjudicated that they did not act in good faith in the
reasonable belief that their actions were in the best interest of the Fund. In
the case of settlement, such indemnification will not be provided unless it has
been determined pursuant to the Declaration of Trust that such officers or
Trustees have not engaged in willful misfeasance, bad faith, gross negligence or
reckless disregard of their duties.

INVESTMENT ADVISER
MFS and its predecessor organizations have a history of money management dating
from 1924. MFS is a subsidiary of Sun Life of Canada (U.S.), which is a wholly
owned subsidiary of Sun Life Assurance Company of Canada ("Sun Life").

The Adviser manages the Fund pursuant to an Investment Advisory Agreement, dated
July 18, 1984, as amended February 1, 1994 (the "Advisory Agreement"). The
Adviser provides the Fund with overall investment advisory and administrative
services, as well as general office facilities. Subject to such policies as the
Trustees may determine, the Adviser makes investment decisions for the Fund. For
these services and facilities, the Adviser receives a management fee equal to
the lesser of (i) 0.40% of the Fund's average daily net assets or (ii) 0.25% of
the Fund's average daily net assets plus 3.40% of the Fund's gross income (i.e.,
income other than from the sale of securites), in each case on an annualized
basis for the Fund's then current fiscal year. Effective March 1, 1996, the
Adviser has voluntarily agreed to reduce the Fund's management fee to 0.25% of
the Fund's average daily net assets. This arrangement may be revised or
terminated at any time without notice to shareholders.

For the Fund's fiscal years ended February 29, 1996, February 28, 1995 and
February 28, 1994, (a short fiscal period of 11 months), MFS earned fees under
the Advisory Agreement of $1,769,675 (all of which was calculated as a
percentage of average daily net assets), $1,735,790 (all of which was calculated
as a percentage of average daily net assets) and $2,038,181 (of which $997,647
was calculated as a percentage of average daily net assets and $1,040,534 was
calculated as a percentage of gross income), respectively. Due to a voluntary
reduction of fees by the Adviser, $930,351 and $1,126,931 of management fees
were not imposed on the Fund for the years ended February 29, 1996 and February
28, 1995, respectively.

In order to comply with the requirements of certain state securities
commissions, the Adviser will reduce its management fee or otherwise reimburse
the Fund for any expenses, exclusive of interest, taxes, brokerage commissions
and extraordinary expenses, incurred by the Fund in any fiscal year to the
extent such expenses exceed the most restrictive of such state expense
limitations. The Adviser will make appropriate adjustments to such
reimbursements in response to any amendments or rescission of the various state
requirements.

The Fund pays all the Fund's expenses (other than those assumed by the Adviser
or MFD), including: governmental fees; interest charges; taxes; membership dues
in the Investment Company Institute allocable to the Fund; fees and expenses of
independent auditors, of legal counsel, and of any transfer agent, registrar or
dividend disbursing agent of the Fund; expenses of repurchasing and redeeming
shares; expenses of preparing, printing and mailing share certificates,
shareholder reports, notices, proxy statements to shareholders and reports to
governmental officers and commissions; brokerage and other expenses connected
with the execution, recording and settlement of portfolio security transactions;
insurance premiums; fees and expenses of State Street Bank and Trust Company,
the Fund's Custodian, for all services to the Fund, including safekeeping of
funds and securities and maintaining required books and accounts; expenses of
calculating the net asset value of shares of the Fund; and expenses of
shareholder meetings. Expenses relating to the issuance, registration and
qualification of shares of the Fund and the preparation, printing and mailing of
prospectuses for such purposes are borne by the Fund except that the Fund's
Distribution Agreement with MFD requires MFD to pay for prospectuses that are to
be used for sales purposes and for the qualification of shares of the Fund for
sale in the various states. For a list of the Fund's expenses, including the
compensation paid to the Trustees who are not officers of MFS during the fiscal
year ended February 29, 1996, see "Financial Statements -- Statement of
Operations" in the Fund's Annual Report incorporated by reference into this SAI.

MFS pays the compensation of the Fund's officers and of any Trustee who is an
officer of MFS. The Adviser also furnishes at its own expense all necessary
administrative services, including office space, equipment, clerical personnel,
investment advisory facilities, and all executive and supervisory personnel
necessary for managing the Fund's investments, effecting the Fund's portfolio
transactions and, in general, administering the Fund's affairs.

The Advisory Agreement will remain in effect until August 1, 1996, and will
continue in effect thereafter only if such continuance is specifically approved
at least annually by the Board of Trustees or by vote of a majority of the
Fund's shares (as defined in "Investment Restrictions") and, in either case, by
a majority of the Trustees who are not parties to the Advisory Agreement or
interested persons of any such party. The Advisory Agreement terminates
automatically if it is assigned and may be terminated without penalty by vote of
a majority of the Fund's outstanding voting securities or by either party on not
more than 60 days' nor less than 30 days' written notice. The Advisory Agreement
provides that if MFS ceases to serve as the Adviser to the Fund, the Fund will
change its name so as to delete the initials "MFS." The Advisory Agreement
further provides that MFS may render services to others and may permit fund
clients in addition to the Fund to use the initials "MFS" in their names. The
Advisory Agreement also provides that neither the Adviser nor its personnel
shall be liable for any error of judgment or mistake of law or for any loss
arising out of any investment or for any act or omission in the execution and
management of the Fund, except for willful misfeasance, bad faith or gross
negligence in the performance of its or their duties or by reason of reckless
disregard of its or their obligations and duties under the Advisory Agreement.

CUSTODIAN
State Street Bank and Trust Company (the "Custodian") is the custodian of the
Fund's assets. The Custodian's responsibilities include safekeeping and
controlling the Fund's cash and securities, handling the receipt and delivery of
securities, determining income and collecting interest and dividends on the
Fund's investments, maintaining books of original entry for portfolio and fund
accounting and other required books and accounts, and calculating the daily net
asset value of shares of the Fund. The Custodian does not determine the
investment policies of the Fund or decide which securities the Fund will buy or
sell. The Fund may, however, invest in securities, including repurchase
agreements, issued by the Custodian and may deal with the Custodian as principal
in securities transactions. The Custodian also acts as the dividend disbursing
agent of the Fund.

SHAREHOLDER SERVICING AGENT
MFS Service Center, Inc. (the "Shareholder Servicing Agent"), a wholly owned
subsidiary of MFS, is the Fund's shareholder servicing agent, pursuant to a
Shareholder Servicing Agreement, effective August 1, 1985 (the "Agency
Agreement") with the Fund. The Shareholder Servicing Agent's responsibilities
under the Agency Agreement include administering and performing transfer agent
functions and keeping records, in connection with the issuance, transfer and
redemption of the shares of the Fund. For these services, the Shareholder
Servicing Agent will receive a fee 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. In addition, the Shareholder Servicing Agent will be
reimbursed by the Fund for certain expenses incurred by the Shareholder
Servicing Agent on behalf of the Fund. The Custodian has contracted with the
Shareholder Servicing Agent to perform certain dividend and distribution
disbursing functions for the Fund.

DISTRIBUTOR
MFD, a wholly owned subsidiary of MFS, serves as distributor for the continuous
offering of shares of the Fund pursuant to a Distribution Agreement, dated as of
January 1, 1995 (the "Distribution Agreement"), with the Fund. Prior to January
1, 1995, MFS Financial Services, Inc. ("FSI"), another wholly owned subsidiary
of MFS, was the Fund's distributor. Where this SAI refers to MFD in relation to
the receipt or payment of money with respect to a period or periods prior to
January 1, 1995, such reference shall be deemed to include FSI, as the
predecessor in interest to MFD.

CLASS A SHARES: MFD acts as agent in selling Class A shares of the Fund to
dealers. The public offering price of Class A shares of the Fund is their net
asset value next computed after the sale plus a sales charge which varies based
upon the quantity purchased. The public offering price of a Class A share of the
Fund is calculated by dividing the net asset value of a Class A share by the
difference (expressed as a decimal) between 100% and the sales charge percentage
of offering price applicable to the purchase (see "Purchases" in the
Prospectus). The sales charge scale set forth in the Prospectus applies to
purchases of Class A shares of the Fund alone or in combination with shares of
the other funds in the MFS Family of Funds (the "MFS Funds") (except MFS Money
Market Fund, MFS Government Money Market Fund and Class A shares of MFS Cash
Reserve Fund) by any person, including members of a family unit (e.g., husband,
wife and minor children) and bona fide trustees, and also applies to purchases
made under the Right of Accumulation or a Letter of Intent (see "Investment and
Withdrawal Programs" below). A group might qualify to obtain quantity sales
charge discounts (see "Investment and Withdrawal Programs" below).

Class A shares of the Fund may be sold at their net asset value to certain
persons and in certain instances as described in the Prospectus. Such sales are
made without a sales charge to promote good will with employees and others with
whom MFS, MFD and/or the Fund have business relationships, and because the sales
effort, if any, involved in making such sales is negligible.

MFD allows discounts to dealers (which are alike for all dealers) from the
applicable public offering price of the Class A shares. Dealer allowances
expressed as a percentage of offering price for all offering prices are set
forth in the Prospectus (see "Purchases" in the Prospectus). The difference
between the total amount invested and the sum of (a) the net proceeds to the
Fund and (b) the dealer commission, is the commission paid to the distributor.
Because of rounding in the computation of offering price, the portion of the
sales charge paid to the distributor may vary and the total sales charge may be
more or less than the sales charge calculated using the sales charge expressed
as a percentage of offering price or as a percentage of the net amount invested
as listed in the Prospectus. In the case of the maximum sales charge, the dealer
retains 4% and MFD retains approximately 3/4 of 1% of the public offering price.
In addition, MFD pays commissions to dealers who initiate and are responsible
for purchases of $1 million or more as described in the Prospectus.

During the Fund's fiscal year ended February 29, 1996, MFD and dealers and
certain other financial institutions received sales charges of $90,655 and
$476,017, respectively (as their concession on gross sales charges of $566,672),
for selling Class A shares of the Fund. The Fund received $47,199,968
representing the aggregate net asset value of such shares. During the Fund's
fiscal year ended February 28, 1995, MFD and dealers and certain other financial
institutions received sales charges of $75,367 and $382,567, respectively (as
their concession on gross sales charges of $457,934), for selling Class A shares
of the Fund. The Fund received $41,528,058 representing the aggregate net asset
value of such shares. During the Fund's short fiscal year of 11 months ended
February 28, 1994, MFD and dealers and certain other financial institutions
received sales charges of $206,722 and $1,046,436, respectively (as their
concession on gross sales charges of $1,253,158), for selling Class A shares of
the Fund. The Fund received $86,834,640 representing the aggregate net asset
value of such shares.

CLASS B AND CLASS C SHARES: MFD acts as agent in selling Class B and Class C
shares of the Fund to dealers. The public offering price of Class B and Class C
shares is their net asset value next computed after the sale (see "Purchases" in
the Prospectus).

GENERAL: Neither MFD nor dealers are permitted to delay placing orders to
benefit themselves by a price change. On occasion, MFD may obtain brokers loans
from various banks, including the custodian bank for the MFS Funds, to
facilitate the settlement of sales of shares of the Fund to dealers. MFD may
benefit from its temporary holding of funds paid to it by investment dealers for
the purchase of Fund shares.

For the fiscal year ended February 29, 1996, the contingent deferred sales
charge ("CDSC") imposed on redemption of Class A shares was approximately
$1,066. For the fiscal year ended February 29, 1996, the CDSC imposed on
redemption of Class B shares was approximately $310,387. For the fiscal year
ended February 28, 1995, no CDSC was imposed on Class A Shares. For the fiscal
year ended February 28, 1995, the CDSC imposed on redemption of Class B shares
was approximately $371,474. For the short fiscal year of 11 months ended
February 28, 1994, the CDSC imposed on redemption of Class A shares was $1,190.
For the short fiscal year of 6 months ended February 28, 1994, the CDSC imposed
on redemption of Class B shares was $85,584. Class C shares were not available
as of the Fund's fiscal year ended February 29, 1996.

The Distribution Agreement will remain in effect until August 1, 1996, and will
continue in effect thereafter only if such continuance is specifically approved
at least annually by the Board of Trustees or by vote of a majority of the
Fund's shares (as defined in "Investment Restrictions") and, in either case, by
a majority of the Trustees who are not parties to the Distribution Agreement or
interested persons of any such party. The Distribution Agreement terminates
automatically if it is assigned and may be terminated without penalty by either
party on not more than 60 days' nor less than 30 days' notice.

5. PORTFOLIO TRADING
Specific decisions to purchase or sell securities for the Fund are made by a
portfolio manager who is an employee of the Adviser and who is appointed and
supervised by its senior officers. Changes in the Fund's investments are
reviewed by the Board of Trustees. The Fund's portfolio manager may serve other
clients of the Adviser or any subsidiary of the Adviser in a similar capacity.

The primary consideration in placing portfolio security transactions is
execution at the most favorable prices. The Adviser has complete freedom as to
the markets in and broker-dealers through which it seeks this result. Debt
securities are traded principally in the over-the-counter market on a net basis
through dealers acting for their own account and not as brokers. The cost of
securities purchased from underwriters includes an underwriter's commission or
concession, and the prices at which securities are purchased and sold from and
to dealers include a dealer's mark-up or mark-down. The Adviser attempts to
negotiate with underwriters to decrease the commission or concession for the
benefit of the Fund. The Adviser normally seeks to deal directly with the
primary market makers unless, in its opinion, better prices are available
elsewhere. Securities firms or futures commission merchants may receive
brokerage commissions on transactions involving Futures Contracts. Subject to
the requirement of seeking execution at the most favorable price, securities
may, as authorized by the Advisory Agreement, be bought from or sold to dealers
who have furnished statistical, research and other information or services to
the Adviser. At present no arrangements for the recapture of commission payments
are in effect.

Consistent with the foregoing primary consideration, the Rules of Fair Practice
of the National Association of Securities Dealers, Inc. (the "NASD") and such
other policies as the Trustees may determine, the Adviser may consider sales of
shares of the Fund and of the other investment company clients of MFD as a
factor in the selection of broker-dealers to execute the Fund's portfolio
transactions.

In certain instances there may be securities which are suitable for the Fund's
portfolio as well as for that of one or more of the other clients of the Adviser
or any subsidiary of the Adviser. Investment decisions for the Fund and for such
other clients are made with a view to achieving their respective investment
objectives. It may develop that a particular security is bought or sold for only
one client even though it might be held by, or bought or sold for, other
clients. Likewise, a particular security may be bought for one or more clients
when one or more other clients are selling that same security. Some simultaneous
transactions are inevitable when several clients receive investment advice from
the same investment adviser, particularly when the same security is suitable for
the investment objectives of more than one client. When two or more clients are
simultaneously engaged in the purchase or sale of the same security, the
securities are allocated among clients in a manner believed by the Adviser to be
equitable to each. It is recognized that in some cases this system could have a
detrimental effect on the price or volume of the security as far as the Fund is
concerned. In some cases, however, the Fund believes that its ability to
participate in volume transactions will produce better executions for the Fund.

6. SHAREHOLDER SERVICES
INVESTMENT AND WITHDRAWAL PROGRAMS -- The Fund makes available the following
programs designed to enable shareholders to add to their investment or withdraw
from it with a minimum of paper work. These are described below and, in certain
cases, in the Prospectus. The programs involve no extra charge to shareholders
(other than a sales charge in the case of certain Class A share purchases) and
may be changed or discontinued at any time by a shareholder or the Fund.

LETTER OF INTENT: If a shareholder (other than a group purchaser described
below) anticipates purchasing $100,000 or more of Class A shares of the Fund
alone or in combination with shares of any class of MFS Funds or MFS Fixed Fund
(a bank collective investment fund) within a 13-month period (or 36-month
period, in the case of purchases of $1 million or more), the shareholder may
obtain Class A shares of the Fund at the same reduced sales charge as though the
total quantity were invested in one lump sum by completing the Letter of Intent
section of the Fund's Account Application or filing a separate Letter of Intent
application (available from the Shareholder Servicing Agent) within 90 days of
the commencement of purchases. Subject to acceptance by MFD and the conditions
mentioned below, each purchase will be made at a public offering price
applicable to a single transaction of the dollar amount specified in the Letter
of Intent application. The shareholder or his dealer must inform MFD that the
Letter of Intent is in effect each time shares are purchased. The shareholder
makes no commitment to purchase additional shares, but if his purchases within
13 months (or 36 months in the case of purchases of $1 million or more) plus the
value of shares credited toward completion of the Letter of Intent do not total
the sum specified, he will pay the increased amount of the sales charge as
described below. Instructions for issuance of shares in the name of a person
other than the person signing the Letter of Intent application must be
accompanied by a written statement from the dealer stating that the shares were
paid for by the person signing such Letter. Neither income dividends nor capital
gain distributions taken in additional shares will apply toward the completion
of the Letter of Intent. Dividends and distributions of other MFS Funds
automatically reinvested in shares of the Fund at net asset value pursuant to
the Distribution Investment Program also will not apply toward completion of the
Letter of Intent.

Out of the shareholder's initial purchase (or subsequent purchases if
necessary), 5% of the dollar amount specified in the Letter of Intent
application shall be held in escrow by the Shareholder Servicing Agent in the
form of shares registered in the shareholder's name. All income dividends and
capital gain distributions on escrowed shares will be paid to the shareholder or
to his order. When the minimum investment so specified is completed (either
prior to or by the end of the 13-month period or 36-month period, as
applicable), the shareholder will be notified and the escrowed shares will be
released.

If the intended investment is not completed, the Shareholder Servicing Agent
will redeem an appropriate number of the escrowed shares in order to realize
such difference. Shares remaining after any such redemption will be released by
the Shareholder Servicing Agent. By completing and signing the Account
Application, or separate Letter of Intent application, the shareholder
irrevocably appoints the Shareholder Servicing Agent his attorney to surrender
for redemption any or all escrowed shares with full power of substitution in the
premises.

RIGHT OF ACCUMULATION: A shareholder qualifies for cumulative quantity
discounts on the purchase of Class A shares when his new investment, together
with the current offering price value of all holdings of all classes of shares
of that shareholder in the MFS Funds or the MFS Fixed Fund reaches a discount
level. See "Purchases" in the Prospectus for the sales charges on quantity
discounts. For example, if a shareholder owns shares with a current offering
price value of $75,000 and purchases an additional $25,000 of Class A shares of
the Fund, the sales charge for the $25,000 purchase would be at the rate of 4%
(the rate applicable to single transactions of $100,000). A shareholder must
provide the Shareholder Servicing Agent (or his investment dealer must provide
MFD) with information to verify that the quantity sales charge discount is
applicable at the time the investment is made.

DISTRIBUTION INVESTMENT PROGRAM: Distributions of dividends and capital gains
made by the Fund with respect to a particular class of shares may be
automatically invested in shares of the same class of one of the other MFS
Funds, if shares of the fund are available for sale. Such investments will be
subject to additional purchase minimums. Distributions will be invested at net
asset value (exclusive of any sales charge) and will not be subject to any CDSC.
Distributions will be invested at the close of business on the payable date for
the distribution. A shareholder considering the Distribution Investment Program
should obtain and read the prospectus of the other fund and consider the
differences in objectives and policies before making any investment.

SYSTEMATIC WITHDRAWAL PLAN: A shareholder may direct the Shareholder Servicing
Agent to send him (or anyone he designates) regular periodic payments based upon
the value of his account. Each payment under a Systematic Withdrawal Plan
("SWP") must be at least $100, except in certain limited circumstances. The
aggregate withdrawals of Class B and Class C shares in any year pursuant to a
SWP generally are limited to 10% of the value of the account at the time of
establishment of the SWP. SWP payments are drawn from the proceeds of share
redemptions (which would be a return of principal and, if reflecting a gain,
would be taxable). Redemptions of Class B and Class C shares will be made in the
following order: (i) any "Free Amount"; (ii) to the extent necessary, any
"Reinvested Shares" and (iii) to the extent necessary, the "Direct Purchase"
subject to the lowest CDSC (as such terms are defined in "Contingent Deferred
Sales Charge" in the Prospectus). The CDSC will be waived in the case of
redemptions of Class B and Class C shares pursuant to a SWP, but will not be
waived in the case of SWP redemptions of Class A shares which are subject to a
CDSC. To the extent that redemptions for such periodic withdrawals exceed
dividend income reinvested in the account, such redemptions will reduce and may
eventually exhaust the number of shares in the shareholder's account. All
dividend and capital gain distributions for an account with a SWP will be
reinvested in additional full and fractional shares of the Fund at the net asset
value in effect at the close of business on the record date for such
distributions. To initiate this service, shares having an aggregate value of at
least $5,000 either must be held on deposit by, or certificates for such shares
must be deposited with, the Shareholder Servicing Agent. With respect to Class A
shares, maintaining a withdrawal plan concurrently with an investment program
would be disadvantageous because of the sales charges included in share
purchases and the imposition of a CDSC on certain redemptions. The shareholder
may deposit into the account additional shares of the Fund, change the payee or
change the dollar amount of each payment. The Shareholder Servicing Agent may
charge the account for services rendered and expenses incurred beyond those
normally assumed by the Fund with respect to the liquidation of shares. No
charge is currently assessed against the account, but one could be instituted by
the Shareholder Servicing Agent on 60 days' notice in writing to the shareholder
in the event that the Fund ceases to assume the cost of these services. The Fund
may terminate any SWP for an account if the value of the account falls below
$5,000 as a result of share redemptions (other than as a result of a SWP) or an
exchange of shares of the Fund for shares of another MFS Fund. Any SWP may be
terminated at any time by either the shareholder or the Fund.

INVEST BY MAIL: Additional investments of $50 or more may be made at any time
by mailing a check payable to the Fund directly to the Shareholder Servicing
Agent. The shareholder's account number and the name of his investment dealer
must be included with each investment.

GROUP PURCHASES: A bona fide group and all its members may be treated as a
single purchaser and, under the Right of Accumulation (but not a Letter of
Intent), obtain quantity sales charge discounts on the purchase of Class A
shares if the group (1) gives its endorsement or authorization to the investment
program so it may be used by the investment dealer to facilitate solicitation of
the membership, thus effecting economies of sales effort; (2) has been in
existence for at least six months and has a legitimate purpose other than to
purchase mutual fund shares at a discount; (3) is not a group of individuals
whose sole organizational nexus is as credit cardholders of a company,
policyholders of an insurance company, customers of a bank or broker-dealer,
clients of an investment adviser or other similar groups; and (4) agrees to
provide certification of membership of those members investing money in the MFS
Funds upon the request of MFD.

AUTOMATIC EXCHANGE PLAN: Shareholders having account balances of at least
$5,000 in any MFS Fund may participate in the Automatic Exchange Plan. The
Automatic Exchange Plan provides for automatic exchanges of funds from the
shareholder's account in an MFS Fund for investment in the same class of shares
of other MFS Funds selected by the shareholder. Under the Automatic Exchange
Plan, exchanges of at least $50 each may be made to up to four different funds
effective on the seventh day of each month or of every third month, depending
whether monthly or quarterly exchanges are elected by the shareholder. If the
seventh day of the month is not a business day, the transaction will be
processed on the next business day. Generally, the initial exchange will occur
after receipt and processing by the Shareholder Servicing Agent of an
application in good order. Exchanges will continue to be made from a
shareholder's account in any MFS Fund, as long as the balance of the account is
sufficient to complete the exchanges. Additional payments made to a
shareholder's account will extend the period that exchanges will continue to be
made under the Automatic Exchange Plan. However, if additional payments are
added to an account subject to the Automatic Exchange Plan shortly before an
exchange is scheduled, such funds may not be available for exchanges until the
following month; therefore, care should be used to avoid inadvertently
terminating the Automatic Exchange Plan through exhaustion of the account
balance.

No transaction fee for exchanges will be charged in connection with the
Automatic Exchange Plan. However, exchanges of shares of MFS Money Market Fund,
MFS Government Money Market Fund and Class A shares of MFS Cash Reserve Fund
will be subject to any applicable sales charge. Changes in amounts to be
exchanged to each fund, the funds to which exchanges are to be made and the
timing of exchanges (monthly or quarterly), or termination of a shareholder's
participation in the Automatic Exchange Plan will be made after instructions in
writing or by telephone (an "Exchange Change Request") are received by the
Shareholder Servicing Agent in proper form (i.e., if in writing -- signed by the
record owner(s) exactly as shares are registered; if by telephone -- proper
account identification is given by the dealer or shareholder of record). Each
Exchange Change Request (other than termination of participation in the program)
must involve at least $50. Generally, if an Exchange Change Request is received
by telephone or in writing before the close of business on the last business day
of a month, the Exchange Change Request will be effective for the following
month's exchange.

A shareholder's right to make additional investments in any of the MFS Funds, to
make exchanges of shares from one MFS Fund to another and to withdraw from an
MFS Fund, as well as a shareholder's other rights and privileges are not
affected by a shareholder's participation in the Automatic Exchange Plan.

The Automatic Exchange Plan is part of the Exchange Privilege. For additional
information regarding the Automatic Exchange Plan, including the treatment of
any CDSC, see "Exchange Privilege" below.

REINSTATEMENT PRIVILEGE: Shareholders of the Fund and shareholders of the
other MFS Funds (except MFS Money Market Fund, MFS Government Money Market Fund
and holders of Class A shares of MFS Cash Reserve Fund in the case where the
shares are acquired through direct purchase or reinvested dividends) who have
redeemed their shares have a one-time right to reinvest the redemption proceeds
in the same class of shares of any of the MFS Funds (if shares of the fund are
available for sale) at net asset value (without a sales charge) and, if
applicable, with credit for any CDSC paid. In the case of shares reinvested in
MFS Money Market Fund, MFS Government Money Market Fund and Class A shares of
MFS Cash Reserve Fund, the shareholder has the right to exchange the acquired
shares for shares of the same class of another MFS Fund at net asset value
pursuant to the exchange privilege described below. Such a reinvestment must be
made within 90 days of the redemption and is limited to the amount of the
redemption proceeds. If the shares credited for any CDSC paid are then redeemed
within 12 months of the initial purchase in the case of certain Class A shares
and in the case of Class C shares or within six years of the initial purchase in
the case of Class B shares, a CDSC will be imposed upon redemption. Although
redemptions and repurchases of shares are taxable events, a reinvestment within
a certain period of time in the same fund may be considered a "wash sale" and
may result in the inability to recognize currently all or a portion of any loss
realized on the original redemption for federal income tax purposes. Please see
your tax adviser for further information.

EXCHANGE PRIVILEGE -- Subject to the requirements set forth below, some or all
of the shares in an account with the Fund for which payment has been received by
the Fund (i.e., an established account) may be exchanged for shares of the same
class of any of the other MFS Funds (if available for sale) at their net asset
value. Exchanges will be made only after instructions in writing or by telephone
(an "Exchange Request") are received for an established account by the
Shareholder Servicing Agent.

Each Exchange Request must be in proper form (i.e., if in writing -- signed by
the record owner(s) exactly as the shares are registered; if by telephone --
proper account identification is given by the dealer or shareholder of record),
and each exchange must involve either shares having an aggregate value of at
least $1,000 ($50 in the case of retirement plan participants whose sponsoring
organizations subscribe to the MFS FUNDamental 401(k) Plan or another similar
401(k) recordkeeping system made available by the Shareholder Servicing Agent)
or all the shares in the account. Each exchange involves the redemption of
shares of the Fund to be exchanged and the purchase at net asset value (i.e.,
without a sales charge) of shares of the same class of the other MFS Fund. Any
gain or loss on the redemption of the shares exchanged is reportable on the
shareholder's federal income tax return, unless both the shares received and the
shares surrendered in the exchange are held in a tax-deferred retirement plan or
other tax-exempt account. No more than five exchanges may be made in any one
Exchange Request by telephone. If an Exchange Request is received by the
Shareholder Servicing Agent prior to the close of regular trading on the
Exchange, the exchange usually will occur on that day if all the requirements
set forth above have been complied with at that time. However, payment of the
redemption proceeds by the Fund, and thus the purchase of shares of the other
MFS Fund, may be delayed for up to seven days if the Fund determines that such a
delay would be in the best interest of all its shareholders. Investment dealers
which have satisfied criteria established by MFD may also communicate a
shareholder's Exchange Request to the Shareholder Servicing Agent by facsimile
subject to the requirements set forth above.

No CDSC is imposed on exchanges among the MFS Funds, although liability for the
CDSC is carried forward to the exchanged shares. For purposes of calculating the
CDSC upon redemption of shares acquired in an exchange, the purchase of shares
acquired in one or more exchanges is deemed to have occurred at the time of the
original purchase of the exchanged shares.

Additional information with respect to any of the MFS Funds, including a copy of
its current prospectus, may be obtained from investment dealers or the
Shareholder Servicing Agent. A shareholder considering an exchange should obtain
and read the prospectus of the other MFS Fund and consider the differences in
objectives and policies before making any exchange. Shareholders of the other
MFS Funds (except MFS Money Market Fund and MFS Government Money Market Fund for
shares acquired through direct purchase and dividends reinvested prior to June
1, 1992) have the right to exchange their shares for shares of the MFS Funds,
subject to the conditions, if any, set forth in their respective prospectuses.
In addition, unitholders of the MFS Fixed Fund have the right to exchange their
units (except units acquired through direct purchases) for shares of the Fund,
subject to the conditions, if any, imposed upon such unitholders by the MFS
Fixed Fund.

Any state income tax advantages for investment in shares of each state- specific
series of MFS Municipal Series Trust may only benefit residents of such states.
Investors should consult with their own tax advisers to be sure this is an
appropriate investment, based on their residency and each state's income tax
laws.

The exchange privilege (or any aspect of it) may be changed or discontinued and
is subject to certain limitations (see "Purchases" in the Prospectus).

TAX-DEFERRED RETIREMENT PLANS -- Shares of the Fund may be purchased by all
types of tax-deferred retirement plans. MFD makes available through investment
dealers plans and/or custody agreements for the following:

Individual Retirement Accounts (IRAs) (for individuals and their non- employed
spouses who desire to make limited contributions to a tax-deferred retirement
program and, if eligible, to receive a federal income tax deduction for
amounts contributed);

Simplified Employee Pension (SEP-IRA) Plans;

Retirement Plans Qualified under Section 401(k) of the Internal Revenue Code
of 1986, as amended;

403(b) Plans (deferred compensation arrangements for employees of public
school systems and certain non-profit organizations); and

Certain other qualified pension and profit-sharing plans.

The plan documents provided by MFD designate a trustee or custodian (unless
another trustee or custodian is designated by the individual or group
establishing the plan) and contain specific information about the plans. Each
plan provides that dividends and distributions will be reinvested automatically.
For further details with respect to any plan, including fees charged by the
trustee, custodian or MFD, tax consequences and redemption information, see the
specific documents for that plan. Plan documents other than those provided by
MFD may be used to establish any of the plans described above. Third party
administrative services, available for some corporate plans, may limit or delay
the processing of transactions.

Investors should consult with their tax advisers before establishing any of the
tax-deferred retirement plans described above.

7. TAX STATUS
The Fund has elected to be treated and intends to qualify each year as a
"regulated investment company" under Subchapter M of the Internal Revenue Code
of 1986, as amended (the "Code"), by meeting all applicable requirements of
Subchapter M including requirements as to the nature of the Fund's gross income,
the amount of Fund distributions, and the composition and holding period of the
Fund's portfolio assets. Because the Fund intends to distribute to its
shareholders all of its net investment income and net realized capital gains in
accordance with the timing requirements imposed by the Code, it is expected that
the Fund will not be required to pay federal income or excise taxes. If the Fund
should fail to qualify as a "regulated investment company" in any year, the Fund
would incur a regular corporate federal income tax upon its taxable income and
Fund distributions would generally be taxable as ordinary dividend income to the
shareholders.

Shareholders of the Fund normally will have to pay federal income taxes (and any
state or local taxes, except as noted below) on the dividends and capital gain
distributions they receive from the Fund. Dividends from ordinary income and any
distributions from net short-term capital gains, whether paid in cash or
additional shares, are taxable to the Fund's shareholders as ordinary income for
federal income tax purposes. Because the Fund expects to earn primarily interest
income, it is expected that no Fund dividends will qualify for the
dividends-received deduction for corporations. Distributions of net capital
gains, (i.e., the excess of net long-term capital gains over net short-term
capital losses), whether paid in cash or reinvested in additional shares, are
taxable to the Fund's shareholders as long-term capital gains for federal income
tax purposes regardless of how long they have owned shares in the Fund. Fund
dividends that are declared in October, November or December, that are payable
to shareholders of record in such month, and that are paid the following January
will be taxable to shareholders as if received on December 31 of the year in
which they are declared. The Fund will notify shareholders regarding the Federal
tax status of its distributions after the end of each calendar year.

Any Fund distribution will have the effect of reducing the per share net asset
value of shares in the Fund by the amount of the distribution. Shareholders
purchasing shares shortly before the record date of any distribution may thus
pay the full price for shares and then effectively receive a portion of the
purchase price back as a taxable distribution.

In general, any gain or loss realized upon a taxable disposition of shares of
the Fund by a shareholder that holds such shares as a capital asset will be
treated as a long-term capital gain or loss if the shares have been held for
more than twelve months and otherwise as a short-term capital gain or loss.
However, any loss realized upon a disposition of shares in the Fund held for six
months or less will be treated as a long-term capital loss to the extent of any
distributions of net capital gain made with respect to those shares. Any loss
realized upon a redemption of shares may also be disallowed under rules relating
to wash sales. Gain may be increased (or loss reduced) upon a redemption of
Class A shares within ninety days after their purchase followed by any purchase
(including purchases by exchange or by reinvestment) without payment of an
additional sales charge of Class A shares of the Fund or of another MFS Fund (or
any other shares of an MFS Fund generally sold subject to a sales charge).

The Fund's current dividend and accounting policies will affect the amount,
timing and character of distributions to shareholders and may, under certain
circumstances, make an economic return of capital taxable to shareholders. Any
investment in zero coupon securities or certain other securities purchased at a
market discount will cause the Fund to recognize income prior to the receipt of
cash payments with respect to these securities. In order to distribute this
income and avoid a tax on the Fund, the Fund may be required to liquidate
portfolio securities that it might otherwise have continued to hold, potentially
resulting in additional taxable gain or loss to the Fund. Investment in residual
interests of a CMO that has elected to be treated as a real estate mortgage
investment conduit, or "REMIC," can create complex tax problems, especially if
the Fund has state or local governments or other tax-exempt organizations as
shareholders.

Dividends and certain other payments to persons who are not citizens or
residents of the United States or U.S. entities ("Non-U.S. Persons") are
generally subject to U.S. tax withholding at the rate of 30%. The Fund intends
to withhold U.S. federal income tax at the rate of 30% on dividends and other
payments made to Non-U.S. Persons that are subject to such withholding,
regardless of whether a lower treaty rate may be permitted. Any amounts over
withheld may be recovered by such persons by filing a claim for refund with the
U.S. Internal Revenue Service within the time period applicable to such claims.
Distributions received from the Fund by Non-U.S. Persons may also be subject to
tax under the laws of their own jurisdictions. The Fund is also required in
certain circumstances to apply backup withholding at the rate of 31% on taxable
dividends and redemption proceeds paid to any shareholder (including a Non-U.S.
Person) who does not furnish to the Fund certain information and certifications
or who is otherwise subject to backup withholding. However, backup withholding
will not be applied to payments that have been subject to 30% withholding.

STATE AND LOCAL TAXES: Distributions of the Fund which are derived from interest
on obligations of the U.S. Government and certain of its agencies and
instrumentalities (but generally not from capital gains realized upon the
disposition of such obligations) may be exempt from state and local income
taxes. The Fund intends to advise shareholders of the extent to which its
distributions consist of interest from U.S. Government obligations. Shareholders
are urged to consult their tax advisers regarding the possible exclusion of such
portion of their dividends for state and local income tax purposes.

The Fund, which is organized as a Massachusetts business trust, is not subject
to any Massachusetts income or excise taxes as long as it qualifies as a
regulated investment company under the Code.

8. DETERMINATION OF NET ASSET VALUE AND PERFORMANCE
NET ASSET VALUE: The net asset value per share of each class of the Fund is
determined each day during which the Exchange is open for trading. (As of the
date of this SAI, the Exchange is open for trading every weekday except for the
following holidays (or the days on which they are observed): New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.) This determination is made once during each
such day as of the close of regular trading on such Exchange by deducting the
amount of the liabilities attributable to the class from the value of the assets
attributable to the class and dividing the difference by the number of shares of
the class outstanding. Debt securities (other than short-term obligations) in
the Fund's portfolio are valued on the basis of valuations furnished by a
pricing service which utilizes both dealer-supplied valuations and electronic
data processing techniques which take into account appropriate 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, since
such valuations are believed to reflect more accurately the fair value of such
securities. Futures Contracts will be valued using a pricing model taking into
consideration market data from an external pricing source. Use of the pricing
service has been approved by the Board of Trustees. Short-term obligations with
a remaining maturity in excess of 60 days will be valued based upon
dealer-supplied valuations. Other short-term obligations in the Fund's portfolio
are valued at amortized cost, which constitutes fair value as determined by the
Board of Trustees. Portfolio securities and other assets 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 Board of Trustees. A share's net asset value
is effective for orders received by the dealer prior to its calculation and
received by MFD, the Fund's principal underwriter, prior to the close of that
business day.

PERFORMANCE INFORMATION
TOTAL RATE OF RETURN: The Fund will calculate its total rate of return for each
class of shares for certain periods by determining the average annual compounded
rates of return over those periods that would cause an investment of $1,000
(made with all distributions reinvested and reflecting the CDSC or the maximum
public offering price) to reach the value of that investment at the end of the
periods. The Fund may also calculate (i) a total rate of return, which is not
reduced by the CDSC (4% maximum for Class B shares and 1% maximum for Class C
shares purchased after April 1, 1996) and therefore may result in a higher rate
of return, (ii) a total rate of return assuming an initial account value of
$1,000, which will result in a higher rate of return on Class A shares since the
value of the initial account will not be reduced by the maximum sales charge
(currently 4.75% on Class A shares), and/or (iii) total rates of return which
represent aggregate performance over a period or year-by-year performance, and
which may or may not reflect the effect of the maximum or other sales charge or
CDSC. The Fund's average annual total rates of return for Class A shares,
reflecting the initial investment at the maximum public offering price, for the
one-year, five-year and ten-year periods ended February 29, 1996 were 6.96%,
7.32% and 7.16%, respectively. The Fund's average annual total rates of return
for Class A shares, not giving effect to the sales charge on the initial
investment, for the one-year, five-year and ten-year periods ended February 29,
1996 were 12.29%, 8.36% and 7.69%, respectively. The Fund's average annual total
rate of return for Class B shares, reflecting the CDSC, for the one-year period
ended February 29, 1996 and the period from August 30, 1993 to February 29, 1996
were 7.47% and 3.05%, respectively. The Fund's average annual total rate of
return for Class B shares, not giving effect to the CDSC, for the one-year
period ended February 29, 1996 and the period from August 30, 1993 to February
29, 1996 were 11.46% and 4.13%, respectively. Total rate of return figures would
have been lower if fee waivers were not in place. Class C shares were not
available as of the Fund's fiscal year ended February 29, 1996.

PERFORMANCE RESULTS: The performance results for Class A shares below, based on
an assumed initial investment of $10,000 in Class A shares, cover the period
from December 31, 1986 to December 31, 1995. It has been assumed that dividends
and capital gain distributions were reinvested in additional shares. These
performance results, as well as any yield or total rate of return quotation
provided by the Fund, should not be considered as representative of the
performance of the Fund in the future since the net asset value and public
offering price of shares of the Fund will vary based not only on the type,
quality and maturities of the securities held in the Fund's portfolio, but also
on changes in the current value of such securities and on changes in the
expenses of the Fund. These factors and possible differences in the methods used
to calculate yields and total rates of return should be considered when
comparing the yield and total rate of return of the Fund to yields and total
rates of return published for other investment companies or other investment
vehicles. Total rate of return reflects the performance of both principal and
income. Current net asset value of shares and account balance information may be
obtained by calling 1-800-MFS-TALK (637-8255).

VALUE OF
VALUE OF REINVESTED VALUE OF
PERIOD ENDED INITIAL $10,000 CAPITAL GAINS REINVESTED TOTAL
DECEMBER 31 INVESTMENT DISTRIBUTIONS DIVIDENDS VALUE
----------- ---------------- ------------- --------- -----
1986 $9,450 $102 $ 949 $10,501
1987 8,589 141 1,890 10,620
1988 8,333 137 2,827 11,297
1989 8,543 140 3,972 12,655
1990 8,516 140 4,988 13,644
1991 8,965 147 6,471 15,583
1992 8,928 146 7,632 16,706
1993 9,130 150 9,035 18,315
1994 8,177 134 9,403 17,714
1995 9,166 150 11,855 21,171

EXPLANATORY NOTES: The results in the table assume that the initial investment
has been reduced by the maximum sales charge applicable to Class A shares of
4.75%. No adjustment has been made for any income taxes payable by shareholders.

YIELD: Any yield quotation for a class of shares of the Fund is based on the
annualized net investment income per share of that class of over a 30-day
period. The yield is calculated by dividing the net investment income per share
allocated to a particular class of the Fund earned during the period by the
maximum offering price per share of such class on the last day of that period.
The resulting figure is then annualized. Net investment income per share of a
class is determined by dividing (i) the dividends and interest earned by the
Fund allocated to the class during the period, minus accrued expenses of such
class for the period by (ii) the average number of shares of such class entitled
to receive dividends during the period multiplied by the maximum offering price
per share of such class on the last day of the period. The Fund's yield
calculations assume a maximum sales charge of 4.75% in the case of Class A
shares and no payment of any CDSC in the case of Class B and Class C shares. The
yield calculation for Class A shares of the Fund for the 30-day period ended
February 29, 1996 was 5.70% taking into account the management fee waiver;
without the waiver, the yield would have been 5.49%. The yield calculation for
Class B shares for the 30-day period ended February 29, 1996 was 5.25%, taking
into account the management fee waiver; without the waiver, the yield would have
been 5.03%. Class C shares were not available as of the Fund's fiscal year ended
February 29, 1996.

CURRENT DISTRIBUTION RATE: Yield, which is calculated according to a formula
prescribed by the SEC, is not indicative of the amounts which were or will be
paid to the Fund's shareholders. Amounts paid to shareholders of each class are
reflected in the quoted "current distribution rate" for that class. The current
distribution rate for a class is computed by dividing the total amount of
dividends per share paid by the Fund to shareholders of that class during the
past twelve months by the maximum public offering price of that class at the end
of such period. Under certain circumstances, such as when there has been a
change in the amount of dividend payout, or a fundamental change in investment
policies, it might be appropriate to annualize the dividends paid over the
period such policies were in effect, rather than using the dividends paid during
the past twelve months. The current distribution rate differs from the yield
computation because it may include distributions to shareholders from sources
other than dividends and interest, such as premium income for option writing,
short-term capital gains and return of invested capital, and is calculated over
a different period of time. The Fund's current distribution rate calculation for
Class A shares assumes a maximum sales charge of 4.75%. The Fund's current
distribution rate calculation for Class B and Class C shares assumes no CDSC is
paid. The current distribution rate for Class A shares of the Fund for the
fiscal year ended February 29, 1996 was 6.79%. The current distribution rate for
Class B shares of the Fund for the fiscal year ended February 29, 1996, was
6.16%. Class C shares were not available as of the Fund's fiscal year ended
February 29, 1996

From time to time each Fund may, as appropriate, quote Fund rankings or reprint
all or a portion of evaluations of fund performance and operations appearing in
various independent publications, including but not limited to the following:
Money, Fortune, U.S. News and World Report, Kiplinger's Personal Finance, The
Wall Street Journal, Barron's, Investors Business Daily, Newsweek, Financial
World, Financial Planning, Investment Advisor, USA Today, Pensions and
Investments, SmartMoney, Forbes, Global Finance, Registered Representative,
Institutional Investor, the Investment Company Institute, Johnson's Charts,
Morningstar, Lipper Analytical Services, Inc., CDA Wiesenberger, Shearson Lehman
and Salomon Bros. Indices, Ibbotson, Business Week, Lowry Associates, Media
General, Investment Company Data, The New York Times, Your Money, Strangers
Investment Advisor, Financial Planning on Wall Street, Standard and Poor's,
Individual Investor, The 100 Best Mutual Funds You Can Buy by Gordon K.
Williamson, Consumer Price Index, and Sanford C. Bernstein & Co. Fund
performance may also be compared to the performance of other mutual funds
tracked by financial or business publications or periodicals.

From time to time, the Fund may discuss or quote its current portfolio manager
as well as other investment personnel, including such persons' views on: the
economy; securities markets; portfolio securities and their issuers; investment
philosophies, strategies, techniques and criteria used in the selection of
securities to be purchased or sold for the Fund; the Fund's portfolio holdings;
the investment research and analysis process; the formulation and evaluation of
investment recommendations; and the assessment and evaluation of credit,
interest rate, market and economic risks, and similar or related matters.

The Fund may also quote evaluations mentioned in independent radio or television
broadcasts.

From time to time the Fund may use charts and graphs to illustrate the past
performance of various indices such as those mentioned above and illustrations
using hypothetical rates of return to illustrate the effects of compounding and
tax-deferral.

The Fund may advertise examples of the effects of periodic investment plans,
including the principle of dollar cost averaging. In such a program, an investor
invests a fixed dollar amount in a fund at periodic intervals, thereby
purchasing fewer shares when prices are high and more shares when prices are
low. While such a strategy does not assure a profit or guard against a loss in a
declining market, the investor's average cost per share can be lower than if
fixed numbers of shares are purchased at the same intervals.

MFS FIRSTS: MFS has a long history of innovations.

-- 1924 -- Massachusetts Investors Trust is established as the first
open-end mutual fund in America.

-- 1924 -- Massachusetts Investors Trust is the first mutual fund to make
full public disclosure of its operations in shareholder reports.

-- 1932 -- One of the first internal research departments is established
to provide in-house analytical capability for an investment management
firm.

-- 1933 -- Massachusetts Investors Trust is the first mutual fund to
register under the Securities Act of 1933. ("Truth in Securities Act"
or "Full Disclosure Act").

-- 1936 -- Massachusetts Investors Trust is the first mutual fund to
allow shareholders to take capital gain distributions either in
additional shares or cash.

-- 1976 -- MFS(R) Municipal Bond Fund is among the first municipal bond
funds established.

-- 1979 -- Spectrum becomes the first combination fixed/ variable annuity
with no initial sales charge.

-- 1981 -- MFS(R) World Governments Fund is established as America's
first globally diversified fixed-income mutual fund.

-- 1984 -- MFS(R) Municipal High Income Fund is the first open-end mutual
fund to seek high tax-free income from lower-rated municipal
securities.

-- 1986 -- MFS(R) Managed Sectors Fund becomes the first mutual fund to
target and shift investments among industry sectors for shareholders.

-- 1986 -- MFS(R) Municipal Income Trust is the first closed-end,
high-yield municipal bond fund traded on the New York Stock Exchange.

-- 1987 -- MFS(R) Multimarket Income Trust is the first closed-end,
multimarket high income fund listed on the New York Stock Exchange.

-- 1989 -- MFS(R) Regatta becomes America's first non-qualified
market-value-adjusted fixed/variable annuity.

-- 1990 -- MFS(R) World Total Return Fund is the first global balanced
fund.

-- 1993 -- MFS(R) World Growth Fund is the first global emerging markets
fund to offer the expertise of two sub-advisers.

-- 1993 -- MFS becomes money manager of MFS(R) Union Standard Trust, the
first trust to invest in companies deemed to be union-friendly by an
Advisory Board of senior labor officials, senior managers of companies
with significant labor contracts, academics and other national labor
leaders or experts.

9. DISTRIBUTION PLANS
The Trustees have adopted separate Distribution Plans for Class A, Class B and
Class C shares (the "Distribution Plans") pursuant to Section 12(b) of the 1940
Act and Rule 12b-1 thereunder (the "Rule") after having concluded that there is
a reasonable likelihood that each Distribution Plan would benefit the Fund and
the respective class of shareholders. The Distribution Plans are designed to
promote sales, thereby increasing the net assets of the Fund. Such an increase
may reduce the Fund's expense ratio to the extent that the Fund's fixed costs
are spread over a larger net asset base. Also, an increase in net assets may
lessen the adverse effect that could result were the Fund required to liquidate
portfolio securities to meet redemptions. There is, however, no assurance that
the net assets of the Fund will increase or that the other benefits referred to
above will be realized.

The Distribution Plans are described in the Prospectus under the caption
"Distribution Plans," which is incorporated herein by reference. The following
information supplements this Prospectus discussion.

SERVICE FEES: With respect to the Class A Distribution Plan, no service fees
will be paid: (i) to any dealer who is the holder or dealer of record for
investors who own Class A shares having an aggregate net asset value less than
$750,000, or such other amount as may be determined from time to time by MFD
(MFD, however, may waive this minimum amount requirement from time to time); or
(ii) to any insurance company which has entered into an agreement with the Fund
and MFD that permits such insurance company to purchase Class A shares from the
Fund at their net asset value in connection with annuity agreements issued in
connection with the insurance company's separate accounts. Dealers may from time
to time be required to meet certain other criteria in order to receive service
fees.

With respect to the Class B Distribution Plan, except in the case of the first
year service fee, no service fees will be paid to any securities dealer who is
the holder or dealer of record for investors who own Class B shares having an
aggregate net asset value of less than $750,000 or such other amount as may be
determined by MFD from time to time. MFD, however, may waive this minimum amount
requirement from time to time. Dealers may from time to time be required to meet
certain other criteria in order to receive service fees.

MFD or its affiliates shall be entitled to receive any service fee payable under
any Distribution Plan for which there is no dealer of record or for which
qualification standards have not been met as partial consideration for personal
services and/or account maintenance services performed by MFD or its affiliates
for shareholder accounts.

DISTRIBUTION FEES: The purpose of distribution payments to MFD under the
Distribution Plans is to compensate MFD for Its distribution services to the
Fund. MFD pays commissions to dealers as well as expenses of printing
prospectuses and reports used for sales purposes, expenses with respect to the
preparation and printing of sales literature and other distribution related
expenses, including, without limitation, the cost necessary to provide
distribution-related services, or personnel, travel, office expense and
equipment.

DISTRIBUTION AND SERVICE FEES PAID DURING THE FUND'S LAST FISCAL YEAR: During
the fiscal year ended February 29, 1996, the Fund paid the following
Distribution Plan expenses:

AMOUNT OF AMOUNT OF AMOUNT OF
DISTRIBUTION DISTRIBUTION DISTRIBUTION
AND SERVICE AND SERVICE AND SERVICE
FEES PAID BY FEES RETAINED FEES RECEIVED
DISTRIBUTION PLANS FUND BY MFD BY DEALERS
- ------------------ -----------------------------------------

Class A Distribution Plan $1,131,307 $402,367 $728,940
Class B Distribution Plan $1,172,276 $910,145 $262,131

GENERAL: Each of the Distribution Plans will remain in effect until August 1,
1996, and will continue in effect thereafter only if such continuance is
specifically approved at least annually by vote of both the Trustees and a
majority of the Trustees who are not interested persons" or financially
interested parties of such Plan ("Distribution Plan Qualified Trustees"). Each
of the Distribution Plans also requires that the Fund and MFD each shall provide
the Trustees, and the Trustees shall review, at least quarterly, a written
report of the amounts expended (and purposes therefor) under such Plan. Each of
the Distribution Plans may be terminated at any time by vote of a majority of
the Distribution Plan Qualified Trustees or by vote of the holders of a majority
of the respective class of the Fund's shares (as defined in "Investment
Restrictions"). All agreements relating to any of the Distribution Plans entered
into between the Fund or MFD and other organizations must be approved by the
Board of Trustees, including a majority of the Distribution Plan Qualified
Trustees. Agreements under any of the Distribution Plans must be in writing,
will be terminated automatically if assigned, and may be terminated at any time
without payment of any penalty, by vote of a majority of the Distribution Plan
Qualified Trustees or by vote of the holders of a majority of the respective
class of the Fund's shares. None of the Distribution Plans may be amended to
increase materially the amount of permitted distribution expenses without the
approval of a majority of the respective class of the Fund's shares (as defined
in "Investment Restrictions") or may be materially amended in any case without a
vote of the Trustees and a majority of the Distribution Plan Qualified Trustees.
The selection and nomination of Distribution Plan Qualified Trustees shall be
committed to the discretion of the non-interested Trustees then in office. No
Trustee who is not an "interested person" has any financial interest in any of
the Distribution Plans or in any related agreement.

10. DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES

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)
of one or more separate series and to divide or combine the shares of any series
into a greater or lesser number of shares without thereby changing the
proportionate beneficial interests in that series. The Declaration of Trust
further authorizes the Trustees to classify or reclassify any series of shares
into one or more classes. Pursuant thereto, the Trustees have authorized the
issuance of three classes of shares of the Fund, Class A shares, Class B shares
and Class C shares. Each share of a class of the Fund represents an equal
proportionate interest in the assets of the Fund allocable to that class. Upon
liquidation of the Fund, shareholders of each class of the Fund are entitled to
share pro rata in the Fund's net assets allocable to such class available for
distribution to shareholders. The Fund reserves the right to create and issue a
number of series and additional classes of shares, in which case the shares of
each class of a series would participate equally in the earnings, dividends and
assets allocable to that class of the particular series.

Shareholders are entitled to one vote for each share held and may vote in the
election of Trustees and on other matters submitted to meetings of shareholders.
Although Trustees are not elected annually by the shareholders, the Declaration
of Trust provides that a Trustee may be removed from office at a meeting of
shareholders by a vote of two-thirds of the outstanding shares of the Fund. A
meeting of shareholders will be called upon the request of shareholders of
record holding in the aggregate not less than 10% of the outstanding voting
securities of the Fund. No material amendment may be made to the Fund's
Declaration of Trust without the affirmative vote of a majority of the Fund's
outstanding shares (as defined in "Investment Restrictions"). The Fund may be
terminated (i) upon the merger or consolidation of the Fund with another
organization or upon the sale of all or substantially all of its assets, if
approved by the vote of the holders of two-thirds of the Fund's outstanding
shares, except that if the Trustees recommend such merger, consolidation or
sale, the approval by vote of the holders of a majority of the Fund's
outstanding shares will be sufficient, or (ii) upon liquidation and distribution
of the assets of the Fund, if approved by the vote of the holders of two-thirds
of its outstanding shares of the Fund, or (iii) by the Trustees by written
notice to its shareholders. If not so terminated, the Fund will continue
indefinitely.

The Fund is an entity of the type commonly known as a "Massachusetts business
trust." Under Massachusetts law, shareholders of such a trust may, under certain
circumstances, be held personally liable as partners for its obligations.
However, the Fund's Declaration of Trust contains an express disclaimer of
shareholder liability for acts or obligations of the Fund and provides for
indemnification and reimbursement of expenses out of Fund property for any
shareholder held personally liable for the obligations of the Fund. The Fund's
Declaration of Trust also provides that the Fund shall maintain appropriate
insurance (for example, fidelity bonding and errors and omissions insurance) for
the protection of the Fund and its shareholders and the Trustees, officers,
employees and agents of the Fund covering possible tort and other liabilities.
Thus, the risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which both inadequate
insurance existed and the Fund itself was unable to meet its obligations.

The Fund's Declaration of Trust further provides that obligations of the Fund
are not binding upon the Trustees individually but only upon the property of the
Fund and that the Trustees will not be liable for any action or failure to act,
but nothing in the Declaration of Trust protects a Trustee against any liability
to which he would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office.

11. INDEPENDENT AUDITORS AND FINANCIAL STATEMENTS
Deloitte & Touche LLP are the Fund's independent auditors, providing audit
services, tax return preparation, and assistance and consultation with respect
to the preparation of filings with the SEC.

The Portfolio of Investments at February 29, 1996, the Statement of Assets and
Liabilities at February 29, 1996, the Statement of Operations for the year ended
February 29, 1996, the Statement of Changes in Net Assets for the year ended
February 29, 1996, and the year ended February 28, 1995, the Notes to Financial
Statements and the Independent Auditors' Report, each of which is included in
the Annual Report to shareholders of the Fund, are incorporated by reference
into this SAI and have been so incorporated in reliance upon the report of
Deloitte & Touche LLP, independent auditors, as experts in accounting and
auditing. A copy of the Annual Report accompanies this SAI.
<PAGE>
APPENDIX A

<TABLE>
<CAPTION>
TRUSTEE COMPENSATION TABLE

RETIREMENT BENEFIT ESTIMATED TOTAL TRUSTEE FEES
TRUSTEE FEES ACCRUED AS PART OF CREDITED YEARS FROM FUND AND
TRUSTEE FROM FUND<F1> FUND EXPENSE<F1> OF SERVICE<F2> FUND COMPLEX<F3>
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Richard B. Bailey $2,810 $ 632 8 $263,815
A. Keith Brodkin -0- -0- N/A -0-
Peter G. Harwood 3,220 358 5 111,366
J. Atwood Ives 2,900 659 17 103,356
Lawrence T. Perera 3,080 1,633 24 102,546
William Poorvu 3,220 1,708 24 111,366
Charles W. Schmidt 3,080 1,625 17 105,411
Arnold D. Scott -0- -0- N/A -0-
Jeffrey L. Shames -0- -0- N/A -0-
Elaine R. Smith 3,080 650 27 105,411
David B. Stone 3,360 1,027 11 115,521

<FN>
<F1>For fiscal year ended February 29, 1996
<F2>Based on normal retirement age of 73
<F3>For calendar year 1995. All Trustees receiving compensation served as
Trustees of 23 funds within the MFS fund complex (having aggregate net
assets at December 31, 1995, of approximately $17.6 billion) except Mr.
Bailey, who served as Trustee of 73 funds within the MFS fund complex
(having aggregate net assets at December 31, 1995, of approximately $31.7
billion).
</FN>
</TABLE>

<TABLE>
<CAPTION>
ESTIMATED ANNUAL BENEFITS PAYABLE BY FUND UPON RETIREMENT<F4>

YEARS OF SERVICE
-----------------------------------------------------------------
AVERAGE TRUSTEE FEES 3 5 7 10 OR MORE
- -----------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
$2,529 $379 $632 $ 885 $1,265
2,762 414 691 967 1,381
2,996 449 749 1,049 1,498
3,229 484 807 1,130 1,615
3,463 519 866 1,212 1,731
3,696 554 924 1,294 1,848

<FN>
<F4>Other funds in the MFS fund complex provide similar retirement benefits to
the Trustees.
</FN>
</TABLE>

<PAGE>
INVESTMENT ADVISER
Massachusetts Financial Services Company
500 Boylston Street, Boston, MA 02116
(617) 954-5000

DISTRIBUTOR
MFS Fund Distributors, Inc.
500 Boylston Street, Boston, MA 02116
(617) 954-5000

CUSTODIAN AND DIVIDEND DISBURSING AGENT
State Street Bank and Trust Company
225 Franklin Street, Boston, MA 02110

SHAREHOLDER SERVICING AGENT
MFS Service Center, Inc.
500 Boylston Street, Boston, MA 02116
Toll free: (800) 225-2606

MAILING ADDRESS:
P.O. Box 2281, Boston, MA 02107-9906

AUDITORS
Deloitte & Touche LLP
125 Summer Street, Boston, MA 02110

MFS(R)
GOVERNMENT
SECURITIES FUND
500 BOYLSTON STREET
BOSTON, MA 02116

[LOGO]
THE FIRST NAME IN MUTUAL FUNDS

MGS-13-7/96/500 26/226/326

<PAGE>

<PAGE>
[logo] M F S(R) ANNUAL REPORT FOR
THE FIRST NAME IN MUTUAL FUNDS YEAR ENDED
FEBRUARY 29, 1996

MFS(R) GOVERNMENT SECURITIES FUND
<PAGE>
<TABLE>
<CAPTION>
MFS(R) GOVERNMENT SECURITIES FUND

<S> <C>
TRUSTEES CUSTODIAN
A. Keith Brodkin* - Chairman and President State Street Bank and Trust Company

Richard B. Bailey* - Private Investor; AUDITORS
Former Chairman and Director (until 1991), Deloitte & Touche LLP
Massachusetts Financial Services Company;
Director, Cambridge Bancorp; INVESTOR INFORMATION
Director, Cambridge Trust Company For MFS stock and bond market outlooks,
call toll free: 1-800-637-4458 anytime from
Peter G. Harwood - Private Investor a touch-tone telephone.

J. Atwood Ives - Chairman and For information on MFS mutual funds,
Chief Executive Officer, Eastern Enterprises call your financial adviser or, for an
information kit, call toll free:
Lawrence T. Perera - Partner, 1-800-637-2929 any business day from
Hemenway & Barnes 9 a.m. to 5 p.m. Eastern time (or leave
a message anytime).
William J. Poorvu - Adjunct Professor,
Harvard University Graduate School of INVESTOR SERVICE
Business Administration MFS Service Center, Inc.
P.O. Box 2281
Charles W. Schmidt - Private Investor Boston, MA 02107-9906

Arnold D. Scott* - Senior Executive Vice For general information, call toll free:
President, Director and Secretary, 1-800-225-2606 any business day from
Massachusetts Financial Services Company 8 a.m. to 8 p.m. Eastern time.

Jeffrey L. Shames* - President and Director, For service to speech- or hearing-impaired,
Massachusetts Financial Services Company call toll free: 1-800-637-6576 any business
day from 9 a.m. to 5 p.m. Eastern time.
Elaine R. Smith - Independent Consultant (To use this service, your phone must be
equipped with a Telecommunications Device for
David B. Stone - Chairman, North American the Deaf.)
Management Corp. (investment adviser)
For share prices, account balances and
INVESTMENT ADVISER exchanges, call toll free: 1-800-MFS-TALK
Massachusetts Financial Services Company (1-800-637-8255) anytime from a touch-tone
500 Boylston Street telephone.
Boston, MA 02116-3741

DISTRIBUTOR --------------------------------------------
MFS Fund Distributors, Inc.
500 Boylston Street TOP RATED SERVICE
Boston, MA 02116-3741 For the second year in a row,
[DALBAR MFS earned a #1 ranking in
PORTFOLIO MANAGER LOGO] DALBAR, Inc.'s Broker/Dealer
Steven E. Nothern* Survey, Main Office Operations
Service Quality category. The
TREASURER firm achieved a 3.49 overall score - on a
W. Thomas London* scale of 1 to 4 - in the 1995 survey. A total
of 71 firms responded, offering input on the
ASSISTANT TREASURER quality of service they receive from 36
James O. Yost* mutual fund companies nationwide. The survey
contained questions about service quality in
SECRETARY 17 categories, including "knowledge of phone
Stephen E. Cavan* service contracts," "accuracy of transaction
processing," and "overall ease of doing
ASSISTANT SECRETARY business with the firm."
James R. Bordewick, Jr.*

*Affiliated with the Investment Adviser
</TABLE>
<PAGE>
LETTER TO SHAREHOLDERS

Dear Shareholders:

During the 12-month period ended February 29, 1996, the fixed-income market
provided investors with opportunities for attractive total returns as interest
rates declined sharply and reversed most of the increases of the previous year.
Economic growth showed signs of a broad-based deceleration, and the Federal
Reserve Board, encouraged that inflation pressures would remain moderate,
elected to lower short-term interest rates by 0.25% on three separate occasions,
moves which reduced the federal funds' rate from 6% to 5.25%. The fixed-income
market responded positively to this, and yields on two-year Treasury bonds,
which were at 6.75% at the end of February 1995, declined to 5.41% by February
29, 1996, while yields on 10-year Treasuries declined from 7.20% to 6.10%. In
this environment, an investment in two-year Treasuries would have produced a
total return of 8.43%, while an investment in 10-year Treasuries would have
produced a total return of 14.13% (principal value and interest on Treasury
securities are guaranteed by the U.S. government if held to maturity). The Fund,
which seeks to provide investors with current income and preservation of
capital, was an active participant in this rally. During this 12-month period,
Class A shares of the Fund provided a total return of 12.29%, while the total
return for Class B shares was 11.46%. Both of these returns assume the
reinvestment of distributions but exclude the effects of any sales charges. The
Lehman Brothers Government/Mortgage Index (the Lehman Index), an unmanaged index
of Treasury, government-agency, and mortgage-backed securities increased 11.87%
during this period. Complete performance information for the Fund is provided on
pages five and six of this report.

Economic Environment

We believe the U.S. economy will continue to grow in 1996 -- although "subdued"
may be the best way to describe this growth. One factor holding growth in check
is the continued sluggishness of the consumer sector, an area that represents
approximately two-thirds of the economy. Going into this year, consumers have
been left in a somewhat weakened position, due in part to an increase in
consumer installment debt of some 30% over the past two years. A second reason
for the economy's weakness is the "lag effect" of increases in short-term
interest rates by the Federal Reserve in 1994 and into 1995. This lag effect can
last up to two years, although a series of reductions in short-term rates by the
Fed, which began late last year, could provide some support to the economy
through 1996. A third reason for weakness is the ongoing economic doldrums in
Europe and Japan, important markets for U.S. exports. Here again, we are seeing
a few signs, particularly in Japan, of modest recoveries that could lead to
improved prospects for U.S. exporters. Also, we believe lower interest rates
will give a boost to the U.S. housing market, an important segment of the
economy because it also affects such industries as major appliances, furniture,
and building-supply companies. Finally, although the first few weeks of 1996 saw
some signs of inflationary pressures, caused primarily by rising energy prices
and followed by an upward movement in gold, we believe inflation will remain
under control this year, due mainly to the subdued level of economic growth.

Bond Markets

Persistent signs of economic weakness led to decreases in short-term interest
rates by the Federal Reserve in late 1995 and early 1996 and, we believe, will
lead to some additional reductions as the year progresses. In the beginning of
the year, bond markets were trading in a narrow range as investors shifted
between concern about the lack of a budget resolution in Washington and hopes
that sluggish economic reports and low inflation might lead to lower interest
rates. In the recent trading period not covered by this report, the fixed-income
markets have reacted to conflicting signals regarding the strength of the
economy with more-volatile trading patterns marked by an upward bias in interest
rates. However, we believe the fundamentals of moderate economic growth and low
inflation will continue to benefit long-term investors. Barring an unexpected
shock, we anticipate that the still-cheap dollar, low interest rates, and strong
total employment will likely cushion the economy from a sharp decline. Still,
given the subdued state of the economy, we believe that some additional interest
rate reductions by the Fed are possible, although their timing and magnitude is
uncertain, and that bonds continue to represent good value.

Portfolio Performance and Strategy

During the past 12 months, we have increased the overall interest rate
sensitivity of the portfolio, seeking to benefit from opportunities for capital
appreciation. The portfolio duration (a measure of interest rate sensitivity) is
currently 6 1/2 years, approximately equivalent to an eight-year Treasury in
overall interest rate sensitivity and approximately 50% greater in duration than
the Lehman Brothers Government/Mortgage Index. We anticipate maintaining this
exposure because we believe a continued positive outlook for the bond market is
suggested by a number of investment themes. First, inflation remains well
contained at a relatively low 2 1/2% to 3% level. Second, real (adjusted for
inflation) interest rates are high by historical standards, with
inflation-adjusted federal funds significantly greater than the long-term
average of 1.8%; such high rates will limit how much growth in domestic product
can rebound. Currently, while Federal Reserve policy remains modestly
restrictive, we recognize that, until political and economic uncertainties are
resolved, bond market investors likely will remain tentative and yields may
remain volatile.

The Fund's allocation to agency mortgage-backed pass-through securities
currently stands at 40% of the portfolio versus the Lehman Index, which is at
35%. We feel that the mortgage market represents an attractive opportunity for
several reasons. First, the yield advantage above U.S. Treasury securities
ranges between 1.0% and 1.7%. Given the current interest rate environment, these
issues add substantial incremental yield to the portfolio. Second, given our
economic outlook, we feel that investors are expecting too high a level of new
home purchase mortgage originations and mortgage refinancings over the next
year. While the market underestimated the level of refinancings in the low-rate
environment of 1993, we believe the market is overestimating the near-term level
of refinancings, and this slower pace of prepayments could add additional yield
to the portfolio. We are, however, avoiding more recently originated 30-year
mortgages that have coupons between 8% and 9%. Finally, we expect other
financial institutions to increase their purchases of mortgage instruments. For
regulatory reasons, insurance companies have not been active in this market over
the past few years, and banks have been making loans instead of buying
securities. We believe these trends could be reversed in the near future.

Our ability to invest in government agencies, Treasuries, and
mortgage-backed securities within a range of maturities has proven helpful in
this rapidly changing environment. The Fund remains substantially invested in
government-sponsored or agency securities, as we are able to add attractive
incremental yield to the portfolio in this sector. Government guarantees apply
only to the underlying securities held in the portfolio and not to the
portfolio's share price.

As always, we will maintain our commitment to seek competitive and
consistent returns over the long term. We appreciate your support and welcome
any questions or comments you may have.

Respectfully,

/s/ A. Keith Brodkin /s/ Steven E. Nothern
A. Keith Brodkin Steven E. Nothern
Chairman and President Portfolio Manager

March 14, 1996
<PAGE>
PORTFOLIO MANAGER PROFILE

Steven Nothern began his career at MFS in 1986 in the Fixed Income Department. A
graduate of Middlebury College and Boston University's Graduate School of
Management, he was named Assistant Vice President in 1987, Vice President in
1989 and Senior Vice President in 1993. Mr. Nothern has served as Portfolio
Manager of MFS Government Securities Fund since 1992.

OBJECTIVE AND POLICIES

The Fund seeks to provide current income and preservation of capital.

The Fund seeks to achieve its objective by investing in debt obligations that
are issued or guaranteed as to principal and interest by the U.S. government,
its agencies, authorities or instrumentalities.* Such debt obligations include
U.S. Treasury bills, notes and bonds and direct pass-through certificates of
the Government National Mortgage Association (GNMA), as well as other U.S.
government securities that are not backed by the full faith and credit of the
U.S. government.

*The U.S. government guarantee does not apply to shares of the Fund, which
will fluctuate with changes in market conditions.

TAX FORM SUMMARY

In January 1996, shareholders were mailed a Tax Form Summary reporting the
federal tax status of all distributions paid during the calendar year 1995.

PERFORMANCE

The information below and on the following page illustrates the historical
performance of MFS Government Securities Fund Class A shares in comparison to
various market indicators. Fund results in the graph reflect the deduction of
the 4.75% maximum sales charge; benchmark comparisons are unmanaged and do not
reflect any fees or expenses. You cannot invest in an index. All results reflect
the reinvestment of all dividends and capital gains.

Class B shares were offered effective August 30, 1993. Information on Class B
share performance appears on page six.

Please note that the performance of other classes will be greater than or less
than the line shown, based on the differences in loads and fees paid by
shareholders investing in the different classes.

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(For the 5-Year Period Ended February 29, 1996)

$10,000 5-Year period ended 2/29/96

MFS Government Lehman Brothers
Days Securities Fund-A Government/Mortgage Index CPI
---- ----------------- ------------------------- ---
3/1/91 0 9,525 10,000 10,000
2/29/92 366 10,603 11,236 10,282
2/28/93 730 11,927 12,566 10,616
2/28/94 1095 12,526 13,212 10,883
2/28/95 1460 12,677 13,455 11,194
2/29/96 1826 14,236 15,508 11,491

<PAGE>

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(For the 10-Year Period Ended February 29, 1996)

$10,000 10-Year period ended 2/29/96

MFS Government Lehman Brothers
Days Securities Fund-A Government/Mortgage Index CPI
---- ----------------- ------------------------- ---
3/1/86 0 9,525 10,000 10,000
2/28/87 365 10,286 11,246 10,211
2/29/88 731 10,711 11,867 10,611
2/28/89 1095 10,985 12,286 11,123
2/28/90 1460 12,074 13,870 11,708
2/28/91 1825 13,364 15,595 12,330
2/29/92 2191 14,872 17,523 12,678
2/28/93 2556 16,728 19,597 13,089
2/28/94 2921 17,569 20,605 13,419
2/28/95 3286 17,781 20,984 13,803
2/29/96 3652 19,967 24,185 14,169

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
1 Year 3 Years 5 Years 10 Years
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MFS Government Securities Fund (Class A)
including 4.75% sales charge + 6.96% +4.36% +7.32% +7.16%
- ----------------------------------------------------------------------------------------
MFS Government Securities Fund (Class A)
at net asset value +12.29% +6.08% +8.36% +7.69%
- ----------------------------------------------------------------------------------------
MFS Government Securities Fund (Class B)
with CDSC<F1> + 7.47% -- -- +3.05%<F2>
- ----------------------------------------------------------------------------------------
MFS Government Securities Fund (Class B)
without CDSC +11.46% -- -- +4.13%<F2>
- ----------------------------------------------------------------------------------------
Average general U.S. government fund<F3> +10.83% +5.03% +7.63% +7.57%
- ----------------------------------------------------------------------------------------
Lehman Brothers Government/Mortgage Index<F4> +11.87% +6.20% +8.52% +8.91%
- ----------------------------------------------------------------------------------------
Consumer Price Index<F5><F3> + 2.65% +2.68% +2.82% +3.55%
- ----------------------------------------------------------------------------------------
<FN>
<F1> These returns reflect the current Class B contingent deferred sales charge (CDSC)
of 4% for the 1-year period and 3% for the period commencing August 30, 1993.
<F2> For the period from the commencement of offering of Class B shares, August 30, 1993
to February 29, 1996.
<F3> Source: Lipper Analytical Services, Inc.
<F4> Source: Asset Investment Management (AIM) software.
<F5> The Consumer Price Index is a popular measure of change in prices.
</TABLE>

All results are historical and are not an indication of future results. The
investment return and principal value 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 Fund 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.
<PAGE>
PORTFOLIO OF INVESTMENTS - February 29, 1996

<TABLE>
<CAPTION>
Bonds - 97.7%
- ---------------------------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Federal Home Loan Mortgage Corporation - 3.1%
FHLMC, 9s, 2001 - 2006 $ 2,451 $ 2,579,229
FHLMC, 8.5s, 2025 10,890 11,308,990
------------
$ 13,888,219
- ---------------------------------------------------------------------------------------------------------
Federal National Mortgage Association - 8.7%
FNMA, 7.5s, 2009 - 2011 $16,350 $ 16,676,721
FNMA, 8.46s, 2002 5,740 6,080,342
FNMA, 8.5s, 2001 - 2010 8,366 8,724,336
FNMA, 9s, 2001 - 2007 7,163 7,561,871
------------
$ 39,043,270
- ---------------------------------------------------------------------------------------------------------
Financing Corporation - 13.0%
Financing Corp., 10.7s, 2017 $20,790 $ 29,408,079
Financing Corp., 9.8s, 2018 16,500 21,743,865
Financing Corp., 10.35s, 2018 5,000 6,908,600
------------
$ 58,060,544
- ---------------------------------------------------------------------------------------------------------
Government National Mortgage Association - 29.8%
GNMA, 7s, 2022 - 2025 $47,931 $ 47,376,103
GNMA, 7.5s, 2002 - 2025 39,689 40,323,739
GNMA, 8.5s, 2001 - 2009 10,670 11,206,331
GNMA, 9s, 2004 - 2025 19,651 20,694,715
GNMA, 10.5s, 2020 7,925 8,783,880
GNMA, 10.75s, 2016 381 424,760
GNMA, 11.5s, 2010 - 2019 1,732 1,976,147
GNMA, 12s, 2013 - 2019 964 1,116,485
GNMA, 12.5s, 2011 1,127 1,323,024
------------
$133,225,184
- ---------------------------------------------------------------------------------------------------------
Small Business Administration - 9.2%
SBA, 10.35s, 1997 $ 2,440 $ 2,562,924
SBA, 9.9s, 2008 1,255 1,429,359
SBA, 10.05s, 2008 543 622,057
SBA, 9.05s, 2009 2,603 2,881,644
SBA, 9.1s, 2009 3,354 3,727,003
SBA, 10.05s, 2009 953 1,094,763
SBA, 9.25s, 2010 3,377 3,786,533
SBA, 9.3s, 2010 4,840 5,451,660
SBA, 9.45s, 2010 7,811 8,823,076
SBA, 9.5s, 2010 330 374,403
SBA, 9.65s, 2010 1,629 1,854,881
SBA, 9.7s, 2010 1,514 1,725,095
SBA, 8.625s, 2011 4,035 4,430,423
SBA, 8.8s, 2011 2,074 2,301,606
------------
$ 41,065,427
- ---------------------------------------------------------------------------------------------------------
U.S. Treasury Obligations - 34.0%
U.S. Treasury Notes, 7.75s, 2000 $ 6,350 $ 6,800,470
U.S. Treasury Notes, 7.5s, 2005 7,000 7,639,870
U.S. Treasury Bonds, 12s, 2013 19,000 27,998,210
U.S. Treasury Bonds, 12.5s, 2014 25,000 38,496,000
U.S. Treasury Bonds, 7.25s, 2022 66,500 71,476,860
------------
$152,411,410
- ---------------------------------------------------------------------------------------------------------
Total Bonds (Identified Cost, $443,082,373) $437,694,054
- ---------------------------------------------------------------------------------------------------------

Repurchase Agreement - 1.3%
- ---------------------------------------------------------------------------------------------------------
Goldman Sachs, dated 2/29/96, due 3/01/96, total to be received
$5,671,851 (secured by FMAC Discount Note, 5.4s, due 3/20/96,
market value $5,801,926), at Cost and Value $ 5,671 $ 5,671,000
- ---------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $448,753,373) $443,365,054

Other Assets, Less Liabilities - 1.0% 4,295,461
- ---------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $447,660,515
- ---------------------------------------------------------------------------------------------------------

See notes to financial statements
</TABLE>
<PAGE>
FINANCIAL STATEMENTS

Statement of Assets and Liabilities
- ------------------------------------------------------------------------------
February 29, 1996
- ------------------------------------------------------------------------------
Assets:
Investments, at value (identified cost, $448,753,373) $443,365,054
Cash 249
Receivable for investments sold 9,645,184
Receivable for Fund shares sold 851,616
Interest receivable 4,236,592
Other assets 11,592
------------
Total assets $458,110,287
------------
Liabilities:
Payable for investments purchased $ 9,247,500
Payable for Fund shares reacquired 775,545
Payable to affiliates -
Management fee 3,065
Shareholder servicing agent fee 2,078
Distribution fee 201,700
Accrued expenses and other liabilities 219,884
------------
Total liabilities $ 10,449,772
------------
Net assets $447,660,515
============
Net assets consist of:
Paid-in capital $474,076,115
Unrealized depreciation on investments (5,388,319)
Accumulated net realized loss (21,052,672)
Accumulated undistributed net investment income 25,391
------------
Total $447,660,515
============
Shares of beneficial interest outstanding 46,309,404
============
Class A shares:
Net asset value and redemption price per share
(net assets of $322,739,827 / 33,375,369 shares of
beneficial interest outstanding) $ 9.67
======
Offering price per share (100/95.25) $10.15
======
Class B shares:
Net asset value and offering price per share
(net assets of $124,920,688 / 12,934,035 shares of
beneficial interest outstanding) $ 9.66
======

On sales of $100,000 or more, the offering price of Class A shares is reduced.
A contingent deferred sales charge may be imposed on redemptions of Class A and
Class B shares. See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued

Statement of Operations
- ------------------------------------------------------------------------------
Year Ended February 29, 1996
- ------------------------------------------------------------------------------
Net investment income:
Interest income $33,865,292
-----------
Expenses -
Management fee $ 1,769,675
Trustees' compensation 36,974
Shareholder servicing agent fee (Class A) 484,846
Shareholder servicing agent fee (Class B) 257,900
Distribution and service fee (Class A) 1,131,307
Distribution and service fee (Class B) 1,172,276
Custodian fee 193,719
Postage 86,184
Printing 66,136
Auditing fees 63,115
Legal fees 6,453
Miscellaneous 230,666
-----------
Total expenses $ 5,499,251
Fees paid indirectly (74,890)
Reduction of expenses by investment adviser (930,351)
-----------
Net expenses $ 4,494,010
-----------
Net investment income $29,371,282
===========
Realized and unrealized gain (loss) on investments:
Realized gain (identified cost basis) on investment
transactions $21,953,585
Change in unrealized depreciation on investments (1,577,449)
-----------
Net realized and unrealized gain on investments $20,376,136
-----------
Increase in net assets from operations $49,747,418
===========

See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued

<TABLE>
<CAPTION>
Statement of Changes in Net Assets
- -----------------------------------------------------------------------------------------------------------------
Year Ended Year Ended
February 29, 1996 February 28, 1995
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 29,371,282 $ 30,647,310
Net realized gain (loss) on investments 21,953,585 (30,049,219)
Net unrealized gain (loss) on investments (1,577,449) 2,074,012
------------- -------------
Increase in net assets from operations $ 49,747,418 $ 2,672,103
------------- -------------
Distributions declared to shareholders -
From net investment income (Class A) $ (22,143,801) $ (23,920,995)
From net investment income (Class B) (7,225,640) (6,552,834)
------------- -------------
Total distributions declared to shareholders $ (29,369,441) $ (30,473,829)
------------- -------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 127,188,219 $ 76,797,389
Net asset value of shares issued to shareholders in
reinvestment of distributions 18,255,772 18,466,757
Cost of shares reacquired (141,455,811) (129,977,096)
------------- -------------
Increase (decrease) in net assets from Fund share
transactions $ 3,988,180 $ (34,712,950)
------------- -------------
Total increase (decrease) in net assets $ 24,366,157 $ (62,514,676)
Net assets:
At beginning of period 423,294,358 485,809,034
------------- -------------
At end of period (including accumulated undistributed
net investment income of $25,391 and $1,104,312,
respectively) $ 447,660,515 $ 423,294,358
============= =============

See notes to financial statements
</TABLE>
<PAGE>
FINANCIAL STATEMENTS - continued

<TABLE>
<CAPTION>
Financial Highlights
- -----------------------------------------------------------------------------------------------------------------------------------
Eleven Months
Year Ended Year Ended Ended Year Ended
February 29, February 28, February 28, March 31,
1996 1995 1994 1993
- -----------------------------------------------------------------------------------------------------------------------------------
Class A
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $ 9.22 $ 9.79 $10.00 $ 9.43
------ ------ ------ ------
Income from investment operations<F3> -
Net investment income<F6> $ 0.66 $ 0.67 $ 0.63 $ 0.67
Net realized and unrealized gain (loss) on investments 0.45 (0.58) (0.20) 0.60
------ ------ ------ ------
Total from investment operations $ 1.11 $ 0.09 $ 0.43 $ 1.27
------ ------ ------ ------
Less distributions declared to shareholders -
From net investment income $(0.66) $(0.66) $(0.58)<F5> $(0.70)
In excess of net realized gain on investments -- -- (0.06) --
------ ------ ------ ------
Total distributions declared to shareholders $(0.66) $(0.66) $(0.64) $(0.70)
------ ------ ------ ------
Net asset value - end of period $ 9.67 $ 9.22 $ 9.79 $10.00
====== ====== ====== ======
Total return<F2> 12.29% 1.21% 6.57%<F1> 13.94%
Ratios (to average net assets)/Supplemental data<F6>:
Expenses<F4> 0.84% 0.79% 0.68%<F1> 1.20%
Net investment income 6.83% 7.24% 6.83%<F1> 7.18%
Portfolio turnover 352% 385% 167% 264%
Net assets at end of period (000 omitted) $322,740 $318,116 $372,702 $356,735
<FN>
<F1> Annualized.
<F2> Total returns for Class A shares do not include the applicable sales charge (except for reinvestment dividends prior to
October 1, 1989). If the charge had been included, the results would have been lower.
<F3> Per share data for the periods subsequent to February 28, 1994 is based on average shares outstanding.
<F4> For fiscal years ending after September 1, 1995, the Fund's expenses are calculated without reduction for fees paid
indirectly.
<F5> Amount includes distribution in excess of net investment income of less than $0.001 per share for the period indicated.
<F6> The investment adviser did not impose a portion of its management fee for certain of the periods indicated. If this fee had
been incurred by the Fund, the net investment income per share and ratios would have been:
</FN>
<S> <C> <C> <C>
Net investment income $ 0.64 $ 0.65 $ 0.59
Ratios (to average net assets):
Expenses 1.05% 1.05% 1.17%<F1>
Net investment income 6.62% 6.98% 6.34%<F1>

See notes to financial statements
</TABLE>
<PAGE>
FINANCIAL STATEMENTS - continued

<TABLE>
<CAPTION>
Financial Highlights - continued
- -----------------------------------------------------------------------------------------------------------------------------------
Year Ended March 31, 1992 1991 1990 1989 1988
- -----------------------------------------------------------------------------------------------------------------------------------
Class A
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $ 9.29 $ 9.10 $ 9.05 $ 9.56 $10.22
------ ------ ------ ------ ------
Income from investment operations -
Net investment income $ 0.75 $ 0.78 $ 0.82 $ 0.86 $ 0.87
Net realized and unrealized gain (loss) on
investments 0.14 0.19 0.04 (0.51) (0.59)
------ ------ ------ ------ ------
Total from investment operations $ 0.89 $ 0.97 $ 0.86 $ 0.35 $ 0.28
------ ------ ------ ------ ------
Less distributions declared to shareholders -
From net investment income $(0.75) $(0.78) $(0.81) $(0.86) $(0.88)
In excess of net realized gain on
investments -- -- -- -- (0.06)
------ ------ ------ ------ ------
Total distributions declared to shareholders $(0.75) $(0.78) $(0.81) $(0.86) $(0.94)
------ ------ ------ ------ ------
Net asset value - end of period $ 9.43 $ 9.29 $ 9.10 $ 9.05 $ 9.56
====== ====== ====== ====== ======
Total return<F1> 9.96% 11.13% 9.72% 3.84% 3.11%
Ratios (to average net assets)/Supplemental data:
Expenses 1.25% 1.28% 1.29% 1.40% 1.18%
Net investment income 7.95% 8.56% 8.81% 9.25% 9.10%
Portfolio turnover 270% 95% 260% 346% 417%
Net assets at end of period (000 omitted) $356,366 $323,612 $327,877 $348,617 $397,239

<FN>
<F1> Total returns for Class A shares do not include the applicable sales charge (except for reinvestment dividends prior to
October 1, 1989). If the charge had been included, the results would have been lower.

See notes to financial statements
</TABLE>
<PAGE>
FINANCIAL STATEMENTS - continued

<TABLE>
<CAPTION>
Financial Highlights - continued
- -----------------------------------------------------------------------------------------------------------------------------------
Year Ended
-------------------------- Period Ended
February 29, February 28, February 28,
Year Ended March 31, 1987 1986 1996 1995 1994<F1>
- -----------------------------------------------------------------------------------------------------------------------------------
Class A Class B
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value -
beginning of period $10.53 $ 9.95 $ 9.22 $ 9.78 $10.16
------ ------ ------ ------ ------
Income from investment
operations<F4> -
Net investment income<F7> $ 0.94 $ 1.07 $ 0.59 $ 0.59 $ 0.30
Net realized and unrealized gain (loss) on investments (0.20) 0.68 0.44 (0.56) (0.43)
------ ------ ------ ------ ------
Total from investment
operations $ 0.74 $ 1.75 $ 1.03 $ 0.03 $(0.13)
------ ------ ------ ------ ------
Less distributions declared to shareholders -
From net investment income $(0.94) $(1.08) $(0.59) $(0.59) $(0.25)<F6>
In excess of net realized gain on investments (0.11) (0.09) -- -- --
------ ------ ------ ------ ------
Total distributions declared
to shareholders $(1.05) $(1.17) $(0.59) $(0.59) $(0.25)
------ ------ ------ ------ ------
Net asset value - end of period $10.22 $10.53 $ 9.66 $ 9.22 $ 9.78
====== ====== ====== ====== ======
Total return<F3> 7.48% 18.70% 11.46% 0.57% (1.29)%<F2>
Ratios (to average net assets)/Supplemental data<F7>:
Expenses<F5> 1.18% 1.09% 1.56% 1.51% 1.39%<F2>
Net investment income 9.14% 10.43% 6.09% 6.52% 5.92%<F2>
Portfolio turnover 191% 128% 352% 385% 167%
Net assets at end of period
(000 omitted) $487,975 $343,270 $124,921 $105,178 $113,107
<FN>
<F1> For the period from the commencement of offering of Class B shares, August 30, 1993 to February 28, 1994.
<F2> Annualized.
<F3> Total returns for Class A shares do not include the applicable sales charge (except for reinvestment dividends prior to
October 1, 1989). If the charge had been included, the results would have been lower.
<F4> Per share data for the period subsequent to February 28, 1994 is based on average shares outstanding.
<F5> For fiscal years ending after September 1, 1995, the Fund's expenses are calculated without reduction for fees paid
indirectly.
<F6> Amount includes distribution in excess of net investment income of less than $0.001 per share for the period indicated.
<F7> The investment adviser did not impose a portion of its management fee for certain of the periods indicated. If this fee had
been incurred by the Fund, the net investment income per share and ratios would have been:
</FN>
<S> <C> <C> <C> <C> <C>
Net investment income -- -- $ 0.57 $ 0.57 $ 0.28
Ratios (to average net assets):
Expenses -- -- 1.77% 1.77% 1.87%<F2>
Net investment income -- -- 5.88% 6.26% 5.44%<F2>

See notes to financial statements
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS

(1) Business and Organization

MFS Government Securities Fund (the Fund) is organized as a Massachusetts
business trust and is registered under the Investment Company Act of 1940, as
amended, as a diversified, open-end management investment company.

(2) Significant Accounting Policies

Investment Valuations - Debt securities (other than short-term obligations which
mature in 60 days or less), including listed issues, are valued on the basis of
valuations furnished by dealers or by a pricing service with consideration to
factors such as institutional-size trading in similar groups of securities,
yield, quality, coupon rate, maturity, type of issue, trading characteristics
and other market data, without exclusive reliance upon exchange or
over-the-counter prices. Short-term obligations, which mature in 60 days or
less, are valued at amortized cost, which approximates market value. Securities
for which there are no such quotations or valuations are valued at fair value as
determined in good faith by or at the direction of the Trustees.

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.

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.

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 taxable
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. 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 February 29, 1996, $1,080,762 was reclassified from
accumulated undistributed net investment income of which $1,065,133 was
reclassified to accumulated net realized gain on investments and $15,629 was
reclassified to paid-in-capital, due to differences between book and tax
accounting for mortgage-backed securities. This change had no effect on the net
assets or net asset value per share. At February 29, 1996, accumulated
undistributed net investment income and accumulated net realized losses on
investments under book accounting were different from tax accounting due to
significant temporary differences in accounting for capital losses.

At February 29, 1996, the Fund, for federal income tax purposes, had a capital
loss carryforward of $20,992,515, which may be applied against any net taxable
realized gains of each succeeding year until the earlier of its utilization or
expiration on February 28, 1999 ($272,762), and February 29, 2003 ($20,719,753).

Multiple Classes of Shares of Beneficial Interest - The Fund offers both Class A
and Class B shares. The two classes of shares differ in their respective
shareholder servicing agent, distribution and service fees. All shareholders
bear the common expenses of the Fund pro rata based on the average daily net
assets of each class, without distinction between share classes. Dividends are
declared separately for each class. No class has preferential dividend rights;
differences in per share dividend rates are generally due to differences in
separate class expenses.

(3) Transactions with Affiliates

Investment Adviser - The Fund has an investment advisory agreement with
Massachusetts Financial Services Company (MFS) to provide overall investment
advisory and administrative services, and general office facilities. The
management fee is computed daily and paid monthly at an annual rate equal to the
lesser of (i) 0.40% of the Fund's average daily net assets or (ii) 0.25% of
average daily net assets plus 3.40% of investment income. The investment adviser
did not impose a portion of its fee, which is reflected as a reduction of
expenses in the Statement of Operations.

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 its independent Trustees and Mr. Bailey. Included in Trustees'
compensation is a net periodic pension expense of $12,225 for the year ended
February 29, 1996.

Distributor - MFD, a wholly owned subsidiary of MFS, as distributor, received
$90,655 for the year ended February 29, 1996, 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 and Class B
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 $79,136 for the year
ended February 29, 1996. Fees incurred under the distribution plan during the
year ended February 29, 1996 were 0.35% of average daily net assets attributable
to Class A shares on an annualized basis.

The Class B distribution plan provides 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 shares. MFD will pay to
securities dealers that enter into a sales agreement with MFD all or a portion
of the service fee attributable to Class B shares. The service fee is intended
to be additional consideration for services rendered by the dealer with respect
to Class B shares. MFD retains the service fee for accounts not attributable to
a securities dealer, which amounted to $30,937 for the year ended February 29,
1996. Fees incurred under the distribution plan during the year ended February
29, 1996 were 1.00% of average daily net assets attributable to Class B 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 and on purchases by certain
retirement plans, in the event of a shareholder redemption within 12 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
February 29, 1996 were $1,066 and $310,387 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% and up to 0.22% attributable to Class A and
Class B shares, respectively. (4) Portfolio Securities Purchases and sales of
investments, other than purchased option transactions and short-term
obligations, aggregated $1,511,872,860 and $1,511,303,759, 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:

Aggregate cost $448,779,623
============
Gross unrealized depreciation $(11,090,267)
Gross unrealized appreciation 5,675,698
------------
Net unrealized depreciation $ (5,414,569)
============
(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 Year Ended
February 29, 1996 February 28, 1995
------------------------- --------------------------
Shares Amount Shares Amount
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 5,924,628 $ 57,343,342 3,766,026 $ 34,652,633
Shares issued to shareholders in
reinvestment of distributions 1,417,405 13,598,580 1,546,361 14,188,551
Shares reacquired (8,453,776) (81,475,284) (8,908,608) (82,026,936)
---------- ------------ ---------- ------------
Net decrease (1,111,743) $(10,533,362) (3,596,221) $(33,185,752)
========== ============ ========== ============

<CAPTION>
Class B Shares
Year Ended Year Ended
February 29, 1996 February 28, 1995
------------------------- --------------------------
Shares Amount Shares Amount
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 7,243,533 $ 69,844,877 4,578,868 $ 42,144,756
Shares issued to shareholders in
reinvestment of distributions 485,387 4,657,192 466,207 4,278,206
Shares reacquired (6,202,442) (59,980,527) (5,201,800) (47,950,160)
--------- ------------ --------- ------------
Net increase (decrease) 1,526,478 $ 14,521,542 (156,725) $ (1,527,198)
========= ============ ========= ============
</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 February
29, 1996 was $7,925.
<PAGE>
INDEPENDENT AUDITORS' REPORT

To the Trustees and Shareholders of MFS Government Securities Fund:

We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of MFS Government Securities Fund as of February
29, 1996, the related statement of operations for the year then ended, the
statement of changes in net assets for the years ended February 29, 1996 and
February 28, 1995, and the financial highlights for each of the years in the
two-year period ended February 29, 1996, the eleven months ended February 28,
1994 and each of the years in the eight-year period ended March 31, 1993. 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
February 29, 1996 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 Government
Securities Fund at February 29, 1996, 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
March 29, 1996

---------------------------------------------
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) GOVERNMENT [DALBAR logo] -------------
SECURITIES BULK RATE
FUND U.S. POSTAGE
PAID
500 Boylston Street PERMIT #55638
Boston, MA 02116 BOSTON, MA
-------------

[logo] M F S(R)
THE FIRST NAME IN MUTUAL FUNDS

MGS-2 4/96 36M 26/226

<PAGE>

PART C

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS

(A) FINANCIAL STATEMENTS INCLUDED IN PART A:
For the eight years ended March 31, 1993, the eleven months
ended February 28, 1994 and the years ended February 28,
1995 and February 28, 1996:
Financial Highlights

FINANCIAL STATEMENTS INCLUDED IN PART B:
At February 29, 1996:
Portfolio of Investments*
Statement of Assets and Liabilities*

For the year ended February 29, 1996:
Statement of Operations*

For the year ended February 28, 1995 and the year ended
February 29, 1996:
Statement of Changes in Net Assets*

For the year ended February 29, 1996:
Statement of Changes in Net Assets*
- -------------------------------
* Incorporated herein by reference to the Fund's Annual Report to
shareholders dated February 29, 1996, which was filed with the SEC via
EDGAR on May 2, 1996.

(B) EXHIBITS:

1 (a) Amended and Restated Declaration of Trust, dated March 20,
1995. (3)

(b) Amendment to the Declaration of Trust, dated March 13,
1996. (7)

2 Amended and Restated By-Laws, dated December 21, 1994. (3)

3 Not Applicable.

4 Form of Share Certificate for Class A, B and C shares. (4)

5 (a) Investment Advisory Agreement dated July 18, 1984 by and
between the Registrant and Massachusetts Financial Services
Company. (6)

(b) Amendment to the Investment Advisory Agreement, dated
February 1, 1994. (6)

6 (a) Distribution Agreement, dated January 1, 1995. (3)

(b) Dealer Agreement between MFS Fund Distributors Inc. and a
dealer, dated December 28, 1994, and the Mutual Fund
Agreement between MFD and a bank or NASD affiliate, dated
December 28, 1994. (2)

7 Retirement Plan for Non-Interested Person Trustees, dated
April 1, 1991. (6)

8 (a) Custodian Contract between Registrant and State Street Bank
& Trust Company, dated May 24, 1988. (6)

(b) Amendment to Custodian Contract, dated May 24, 1988. (6)

(d) Amendment to Custodian Contract, dated September 17,
1991. (6)

9 (a) Shareholder Servicing Agreement between Registrant an
Massachusetts Financial Service Center, dated August 1,
1985. (6)

(b) Amendment to Shareholder Servicing Agent Agreement, dated
January 17, 1996; filed herewith.

(d) Exchange Privilege Agreement, dated September 1, 1993. (4)

(e) Loan Agreement by and among The Banks Named Therein, The MFS
Funds Named Therein, and The First National Bank of Boston
as Agent, dated February 21, 1995. (1)

10 Rule 24e-2 Consent and Opinion of Counsel; filed herewith.

11 Consent of Deloitte & Touche LLP; filed herewith.

12 Not Applicable.

13 Not Applicable.

14 (a) Forms for Individual Retirement Account Disclosure Statement
as currently in effect. (5)

(b) Forms for MFS 403(b) Custodial Account Agreement as
currently in effect. (5)

15 (a) Amended and Restated Distribution Plan for Class A Shares,
dated December 21, 1994. (3)

(b) Amended and Restated Distribution Plan for Class B Shares,
dated December 21, 1994. (3)

16 (a) Schedule for Computation of Performance Quotations -
Average Annual Total Rate of Return, Aggregate Total Rate of
Return and Standardized Yield. (2)

17 Financial Data Schedules for Class A and Class B shares of
the Fund; filed herewith.

18 Not Applicable.

Power of Attorney dated September 21, 1994. (3)
- -----------------------------
(1) Incorporated by reference to Amendment No. 8 on Form N-2 for MFS Municipal
Income Trust (File No. 811-4841) filed with the SEC via EDGAR on February
28, 1995.
(2) Incorporated by reference to MFS Municipal Series Trust (File Nos. 2-92915
and 811-4096) Post-Effective Amendment No. 26 filed with the SEC via EDGAR
on February 22, 1995.
(3) Incorporated by reference to Registrant's Post-Effective Amendment No. 16
filed with the SEC via EDGAR on June 28, 1995.
(4) Incorporated by reference to MFS Municipal Series Trust (File Nos. 2-92915
and 811-4096) Post-Effective Amendment No. 28 filed with the SEC via EDGAR
on July 28, 1995.
(5) Incorporated by reference to MFS Series Trust IX (File Nos. 2-50409 and
811-2464) Post-Effective Amendment No. 32 filed with the SEC via EDGAR on
August 28, 1995.
(6) Incorporated by reference to Registrant's Post-Effective Amendment No. 17
filed with the SEC via EDGAR on October 13, 1995.

(7) Incorporated by reference to Registrant's Post-Effective Amendment No. 18
filed with the SEC via EDGAR on March 29, 1996.

ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT

Not applicable.

ITEM 26. NUMBER OF HOLDERS OF SECURITIES

(1) (2)
TITLE OF CLASS NUMBER OF RECORD HOLDERS

Class A Shares of Beneficial Interest 18,363
(without par value) (as of May 31, 1996)

Class B Shares of Beneficial Interest 6,955
(without par value) (as of May 31, 1996)

Class C Shares of Beneficial Interest 21
(without par value) (as of May 31, 1996)

<PAGE>

ITEM 27. INDEMNIFICATION

Reference is hereby made to (a) Article V of Registrant's
Declaration of Trust, incorporated by reference to the Registrant's
Post-Effective Amendment No. 16, filed with the SEC on June 28, 1995 and (b)
Section 9 of the Shareholder Servicing Agent Agreement, incorporated by
reference to Registrant's Post-Effective Amendment No. 17, filed with the SEC
via EDGAR on October 13, 1995.

The Trustees and officers of the Registrant and the personnel
of the Registrant's investment adviser are insured under an errors and omissions
liability insurance policy. The Registrant and its officers are also insured
under the fidelity bond required by Rule 17g-1 under the Investment Company Act
of 1940, as amended.

ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

MFS serves as investment adviser to the following open-end
Funds comprising the MFS Family of Funds: Massachusetts Investors Trust,
Massachusetts Investors Growth Stock Fund, MFS Growth Opportunities Fund, MFS
Government Securities Fund, MFS Government Limited Maturity Fund, MFS Series
Trust I (which has eight series: MFS Managed Sectors Fund, MFS Cash Reserve
Fund, MFS World Asset Allocation Fund, MFS Aggressive Growth Fund, MFS Research
Growth and Income Fund, MFS Core Growth Fund, MFS Equity Income Fund and MFS
Special Opportunities Fund), MFS Series Trust II (which has four series: MFS
Emerging Growth Fund, MFS Capital Growth Fund, MFS Intermediate Income Fund and
MFS Gold & Natural Resources Fund), MFS Series Trust III (which has two series:
MFS High Income Fund and MFS Municipal High Income Fund), MFS Series Trust IV
(which has four series: MFS Money Market Fund, MFS Government Money Market Fund,
MFS Municipal Bond Fund and MFS OTC Fund), MFS Series Trust V (which has two
series: MFS Total Return Fund and MFS Research Fund), MFS Series Trust VI (which
has three series: MFS World Total Return Fund, MFS Utilities Fund and MFS World
Equity Fund), MFS Series Trust VII (which has two series: MFS World Governments
Fund and MFS Value Fund), MFS Series Trust VIII (which has two series: MFS
Strategic Income Fund and MFS World Growth Fund), MFS Series Trust IX (which has
three series: MFS Bond Fund, MFS Limited Maturity Fund and MFS Municipal Limited
Maturity Fund), MFS Series Trust X (which has four series: MFS Government
Mortgage Fund, MFS/Foreign & Colonial Emerging Markets Equity Fund, MFS/Foreign
& Colonial International Growth Fund and MFS/Foreign & Colonial International
Growth and Income Fund), and MFS Municipal Series Trust (which has 16 series:
MFS Alabama Municipal Bond Fund, MFS Arkansas Municipal Bond Fund, MFS
California Municipal Bond Fund, MFS Florida Municipal Bond Fund, MFS Georgia
Municipal Bond Fund, MFS Maryland Municipal Bond Fund, MFS Massachusetts
Municipal Bond Fund, MFS Mississippi Municipal Bond Fund, MFS New York Municipal
Bond Fund, MFS North Carolina Municipal Bond Fund, MFS Pennsylvania Municipal
Bond Fund, MFS South Carolina Municipal Bond Fund, MFS Tennessee Municipal Bond
Fund, MFS Virginia Municipal Bond Fund, MFS West Virginia Municipal Bond Fund
and MFS Municipal Income Fund) (the "MFS Funds"). The principal business address
of each of the aforementioned Funds is 500 Boylston Street, Boston,
Massachusetts 02116.

MFS also serves as investment adviser of the following
no-load, open-end Funds: MFS Institutional Trust ("MFSIT") (which has seven
series), MFS Variable Insurance Trust ("MVI") (which has twelve series) and MFS
Union Standard Trust ("UST") (which has two series). The principal business
address of each of the aforementioned Funds is 500 Boylston Street, Boston,
Massachusetts 02116.

In addition, MFS serves as investment adviser to the following
closed-end Funds: MFS Municipal Income Trust, MFS Multimarket Income Trust, MFS
Government Markets Income Trust, MFS Intermediate Income Trust, MFS Charter
Income Trust and MFS Special Value Trust (the "MFS Closed-End Funds"). The
principal business address of each of the aforementioned Funds is 500 Boylston
Street, Boston, Massachusetts 02116.

Lastly, MFS serves as investment adviser to MFS/Sun Life
Series Trust ("MFS/SL"), Sun Growth Variable Annuity Funds, Inc. ("SGVAF"),
Money Market Variable Account, High Yield Variable Account, Capital Appreciation
Variable Account, Government Securities Variable Account, World Governments
Variable Account, Total Return Variable Account and Managed Sectors Variable
Account. The principal business address of each is One Sun Life Executive Park,
Wellesley Hills, Massachusetts 02181.

MFS International Ltd. ("MIL"), a limited liability company
organized under the laws of the Republic of Ireland and a subsidiary of MFS,
whose principal business address is 41-45 St. Stephen's Green, Dublin 2,
Ireland, serves as investment adviser to and distributor for MFS International
Fund (which has four portfolios: MFS International Funds-U.S. Equity Fund, MFS
International Funds-U.S. Emerging Growth Fund, MFS International Funds-Global
Governments Fund, MFS International Funds - U.S. Dollar Reserve Fund and MFS
International Funds-Charter Income Fund) (the "MIL Funds"). The MIL Funds are
organized in Luxembourg and qualify as an undertaking for collective investments
in transferable securities (UCITS). The principal business address of the MIL
Funds is 47, Boulevard Royal, L-2449 Luxembourg.

MIL also serves as investment adviser to and distributor for
MFS Meridian U.S. Government Bond Fund, MFS Meridian Charter Income Fund, MFS
Meridian Global Government Fund, MFS Meridian U.S. Emerging Growth Fund, MFS
Meridian Global Equity Fund, MFS Meridian Limited Maturity Fund, MFS Meridian
World Growth Fund, MFS Meridian Money Market Fund, MFS Meridian World Total
Return Fund, MFS Meridian U.S. Equity Fund and MFS Meridian Research Fund
(collectively the "MFS Meridian Funds"). Each of the MFS Meridian Funds is
organized as an exempt company under the laws of the Cayman Islands. The
principal business address of each of the MFS Meridian Funds is P.O. Box 309,
Grand Cayman, Cayman Islands, British West Indies.

MFS International (U.K.) Ltd. ("MIL-UK"), a private limited
company registered with the Registrar of Companies for England and Wales whose
current address is 4 John Carpenter Street, London, England ED4Y 0NH, is
involved primarily in marketing and investment research activities with respect
to private clients and the MIL Funds and the MFS Meridian Funds.

MFS Fund Distributors, Inc. ("MFD"), a wholly owned subsidiary
of MFS, serves as distributor for the MFS Funds, MVI, UST and MFSIT.

Clarendon Insurance Agency, Inc. ("CIAI"), a wholly owned
subsidiary of MFS, serves as distributor for certain life insurance and annuity
contracts issued by Sun Life Assurance Company of Canada (U.S.).

MFS Service Center, Inc. ("MFSC"), a wholly owned subsidiary
of MFS, serves as shareholder servicing agent to the MFS Funds, the MFS
Closed-End Funds, MFSIT, MVI and UST.

MFS Asset Management, Inc. ("AMI"), a wholly owned subsidiary
of MFS, provides investment advice to substantial private clients.

MFS Retirement Services, Inc. ("RSI"), a wholly owned
subsidiary of MFS, markets MFS products to retirement plans and provides
administrative and record keeping services for retirement plans.

MFS

The Directors of MFS are A. Keith Brodkin, Jeffrey L. Shames,
Arnold D. Scott, John R. Gardner and John D. McNeil. Mr. Brodkin is the
Chairman, Mr. Shames is the President, Mr. Scott is a Senior Executive Vice
President and Secretary, Bruce C. Avery, William S. Harris, William W. Scott,
Jr., and Patricia A. Zlotin are Executive Vice Presidents, Stephen E. Cavan is a
Senior Vice President, General Counsel and an Assistant Secretary, Joseph W.
Dello Russo is a Senior Vice President, Chief Financial Officer and Treasurer,
Robert T. Burns is a Vice President, Associate General Counsel and an Assistant
Secretary of MFS, and Thomas B. Hastings is a Vice President and Assistant
Treasurer.

MASSACHUSETTS INVESTORS TRUST
MASSACHUSETTS INVESTORS GROWTH STOCK FUND
MFS GROWTH OPPORTUNITIES FUND
MFS GOVERNMENT SECURITIES FUND
MFS SERIES TRUST I
MFS SERIES TRUST V
MFS SERIES TRUST VI
MFS SERIES TRUST X
MFS GOVERNMENT LIMITED MATURITY FUND

A. Keith Brodkin is the Chairman and President, Stephen E.
Cavan is the Secretary, W. Thomas London is the Treasurer, James O. Yost, Vice
President of MFS, is the Assistant Treasurer, James R. Bordewick, Jr., Vice
President and Associate General Counsel of MFS, is the Assistant Secretary.

MFS SERIES TRUST II

A. Keith Brodkin is the Chairman and President, Leslie J.
Nanberg, Senior Vice President of MFS, is a Vice President, Stephen E. Cavan is
the Secretary, W. Thomas London is the Treasurer, James O. Yost is the Assistant
Treasurer, and James R. Bordewick, Jr., is the Assistant Secretary.

MFS GOVERNMENT MARKETS INCOME TRUST
MFS INTERMEDIATE INCOME TRUST

A. Keith Brodkin is the Chairman and President, Patricia A.
Zlotin, Executive Vice President of MFS and Leslie J. Nanberg, Senior Vice
President of MFS, are Vice Presidents, Stephen E. Cavan is the Secretary, W.
Thomas London is the Treasurer, James O. Yost is the Assistant Treasurer, and
James R. Bordewick, Jr., is the Assistant Secretary.

MFS SERIES TRUST III

A. Keith Brodkin is the Chairman and President, James T.
Swanson, Robert J. Manning, Cynthia M. Brown and Joan S. Batchelder, Senior Vice
Presidents of MFS, Bernard Scozzafava, Vice President of MFS, and Matthew
Fontaine, Assistant Vice President of MFS, are Vice Presidents, Sheila
Burns-Magnan and Daniel E. McManus, Assistant Vice Presidents of MFS, are
Assistant Vice Presidents, Stephen E. Cavan is the Secretary, W. Thomas London
is the Treasurer, James O. Yost is the Assistant Treasurer, and James R.
Bordewick, Jr., is the Assistant Secretary.

MFS SERIES TRUST IV
MFS SERIES TRUST IX

A. Keith Brodkin is the Chairman and President, Robert A.
Dennis and Geoffrey L. Kurinsky, Senior Vice Presidents of MFS, are Vice
Presidents, Stephen E. Cavan is the Secretary, W. Thomas London is the
Treasurer, James O. Yost is the Assistant Treasurer and James R. Bordewick, Jr.,
is the Assistant Secretary.

MFS SERIES TRUST VII

A. Keith Brodkin is the Chairman and President, Leslie J.
Nanberg and Stephen C. Bryant, Senior Vice Presidents of MFS, are Vice
Presidents, Stephen E. Cavan is the Secretary, W. Thomas London is the
Treasurer, James O. Yost is the Assistant Treasurer and James R. Bordewick, Jr.,
is the Assistant Secretary.

MFS SERIES TRUST VIII

A. Keith Brodkin is the Chairman and President, Jeffrey L.
Shames, Leslie J. Nanberg, Patricia A. Zlotin, James T. Swanson and John D.
Laupheimer, Jr., Vice President of MFS, are Vice Presidents, Stephen E. Cavan is
the Secretary, W. Thomas London is the Treasurer, James O. Yost is the Assistant
Treasurer and James R. Bordewick, Jr., is the Assistant Secretary.

MFS MUNICIPAL SERIES TRUST

A. Keith Brodkin is the Chairman and President, Cynthia M.
Brown and Robert A. Dennis are Vice Presidents, David B. Smith, Geoffrey L.
Schechter and David R. King, Vice Presidents of MFS, are Vice Presidents, Daniel
E. McManus, Assistant Vice President of MFS, is an Assistant Vice President,
Stephen E. Cavan is the Secretary, W. Thomas London is the Treasurer, James O.
Yost is the Assistant Treasurer and James R. Bordewick, Jr., is the Assistant
Secretary.

MFS VARIABLE INSURANCE TRUST
MFS UNION STANDARD TRUST
MFS INSTITUTIONAL TRUST

A. Keith Brodkin is the Chairman and President, Stephen E.
Cavan is the Secretary, W. Thomas London is the Treasurer, James O. Yost is the
Assistant Treasurer and James R. Bordewick, Jr., is the Assistant Secretary.

MFS MUNICIPAL INCOME TRUST

A. Keith Brodkin is the Chairman and President, Cynthia M.
Brown and Robert J. Manning are Vice Presidents, Stephen E. Cavan is the
Secretary, W. Thomas London is the Treasurer, James O. Yost, is the Assistant
Treasurer and James R. Bordewick, Jr., is the Assistant Secretary.

MFS MULTIMARKET INCOME TRUST
MFS CHARTER INCOME TRUST

A. Keith Brodkin is the Chairman and President, Patricia A.
Zlotin, Leslie J. Nanberg and James T. Swanson are Vice Presidents, Stephen E.
Cavan is the Secretary, W. Thomas London is the Treasurer, James O. Yost, Vice
President of MFS, is the Assistant Treasurer and James R. Bordewick, Jr., is the
Assistant Secretary.

MFS SPECIAL VALUE TRUST

A. Keith Brodkin is the Chairman and President, Jeffrey L.
Shames, Patricia A. Zlotin and Robert J. Manning are Vice Presidents, Stephen E.
Cavan is the Secretary, W. Thomas London is the Treasurer, and James O. Yost, is
the Assistant Treasurer and James R. Bordewick, Jr., is the Assistant Secretary.

SGVAF

W. Thomas London is the Treasurer.

MIL

A. Keith Brodkin is a Director and the Chairman, Arnold D.
Scott and Jeffrey L. Shames are Directors, Ziad Malek, Senior Vice President of
MFS, is the President, Thomas J. Cashman, Jr., a Senior Vice President of MFS,
is a Senior Vice President, Stephen E. Cavan is a Director, Senior Vice
President and the Clerk, James R. Bordewick, Jr. is a Director, Vice President
and an Assistant Clerk, Robert T. Burns is an Assistant Clerk, Joseph W. Dello
Russo is the Treasurer and Thomas B. Hastings is the Assistant Treasurer.

MIL-UK

A. Keith Brodkin is a Director and the Chairman, Arnold D.
Scott, Jeffrey L. Shames, and James R. Bordewick, Jr., are Directors, Stephen E.
Cavan is a Director and the Secretary, Ziad Malek is the President, James E.
Russell is the Treasurer, and Robert T. Burns is the Assistant Secretary.

MIL FUNDS

A. Keith Brodkin is the Chairman, President and a Director,
Richard B. Bailey, John A. Brindle, Richard W. S. Baker and William F. Waters
are Directors, Stephen E. Cavan is the Secretary, W. Thomas London is the
Treasurer, James O. Yost is the Assistant Treasurer and James R. Bordewick, Jr.,
is the Assistant Secretary, and Ziad Malek is a Senior Vice President.

MFS MERIDIAN FUNDS

A. Keith Brodkin is the Chairman, President and a Director,
Richard B. Bailey, John A. Brindle, Richard W. S. Baker, Arnold D. Scott,
Jeffrey L. Shames and William F. Waters are Directors, Stephen E. Cavan is the
Secretary, W. Thomas London is the Treasurer, James R. Bordewick, Jr., is the
Assistant Secretary, James O. Yost is the Assistant Treasurer, and Ziad Malek is
a Senior Vice President.

MFD

A. Keith Brodkin is the Chairman and a Director, Arnold D.
Scott and Jeffrey L. Shames are Directors, William W. Scott, Jr., an Executive
Vice President of MFS, is the President, Stephen E. Cavan is the Secretary,
Robert T. Burns is the Assistant Secretary, Joseph W. Dello Russo is the
Treasurer, and Thomas B. Hastings is the Assistant Treasurer.

CIAI

A. Keith Brodkin is the Chairman and a Director, Arnold D.
Scott and Jeffrey L. Shames are Directors, Cynthia Orcott is President, Bruce C.
Avery is the Vice President, Joseph W. Dello Russo is the Treasurer, Thomas B.
Hastings is the Assistant Treasurer, Stephen E. Cavan is the Secretary, and
Robert T. Burns is the Assistant Secretary.

MFSC

A. Keith Brodkin is the Chairman and a Director, Arnold D.
Scott and Jeffrey L. Shames are Directors, Joseph A. Recomendes, a Senior Vice
President of MFS, is Vice Chairman and a Director, Janet A. Clifford is the
Executive Vice President, Joseph W. Dello Russo is the Treasurer, Thomas B.
Hastings is the Assistant Treasurer, Stephen E. Cavan is the Secretary, and
Robert T. Burns is the Assistant Secretary.

AMI

A. Keith Brodkin is the Chairman and a Director, Jeffrey L.
Shames, and Arnold D. Scott are Directors, Thomas J. Cashman, Jr., is the
President and a Director, Leslie J. Nanberg is a Senior Vice President, a
Managing Director and a Director, George F. Bennett, Carol A. Corley, John A.
Gee, Brianne Grady and Kevin R. Parke are Senior Vice Presidents and Managing
Directors, Joseph W. Dello Russo is the Treasurer, Thomas B. Hastings is the
Assistant Treasurer and Robert T. Burns is the Secretary.

RSI

William W. Scott, Jr. and Bruce C. Avery are Directors, Arnold
D. Scott is the Chairman and a Director, Joseph W. Dello Russo is the Treasurer,
Thomas B. Hastings is the Assistant Treasurer, Stephen E. Cavan is the
Secretary, Robert T. Burns is the Assistant Secretary and Sharon A. Brovelli and
Martin E. Beaulieu are Senior Vice Presidents.

In addition, the following persons, Directors or officers of
MFS, have the affiliations indicated:

A. Keith Brodkin Director, Sun Life Assurance Company
of Canada (U.S.), One Sun Life
Executive Park, Wellesley Hills,
Massachusetts
Director, Sun Life Insurance and
Annuity Company of New York, 67
Broad Street, New York, New York

John R. Gardner President and a Director, Sun Life
Assurance Company of Canada,
Sun Life Centre, 150 King Street
West, Toronto, Ontario, Canada
(Mr. Gardner is also an officer
and/or Director of various
subsidiaries and affiliates of Sun
Life)

John D. McNeil Chairman, Sun Life Assurance Company
of Canada, Sun Life Centre, 150
King Street West, Toronto, Ontario,
Canada (Mr. McNeil is also an
officer and/or Director of various
subsidiaries and affiliates of Sun
Life)

Joseph W. Dello Russo Director of Mutual Fund Operations,
The Boston Company, Exchange Place,
Boston, Massachusetts (until
August, 1994)

ITEM 29. DISTRIBUTORS

(a) Reference is hereby made to Item 28 above.

(b) Reference is hereby made to Item 28 above; the principal
business address of each of these persons is 500 Boylston Street, Boston,
Massachusetts 02116.

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS

The accounts and records of the Registrant are located, in
whole or in part, at the office of the Registrant and the following locations:

NAME ADDRESS

Massachusetts Financial Services 500 Boylston Street
Company (investment adviser) Boston, MA 02116

MFS Fund Distributors, Inc. 500 Boylston Street
(principal underwriter) Boston, MA 02116

State Street Bank and State Street South
Trust Company (custodian) 5 - West
North Quincy, MA 02171

MFS Service Center, Inc. 500 Boylston Street
(transfer agent) Boston, MA 02116

ITEM 31. MANAGEMENT SERVICES

Not applicable.

ITEM 32. UNDERTAKINGS

(a) Not applicable.

(b) Not applicable.

(c) Registrant undertakes to furnish each person to whom a
prospectus is delivered with a copy of its latest Annual Report to shareholders
upon request and without charge.

(d) Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to trustees, officers and controlling
persons of the Registrant pursuant to the provisions set forth in Item 27 of
this Part C, or otherwise, the Registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a trustee, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the Securities being Registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

<PAGE>
SIGNATURES
----------

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this
Post-Effective Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereto duly authorized, in the City of Boston and
The Commonwealth of Massachusetts on the 27th day of June, 1996.

MFS GOVERNMENT SECURITIES FUND

By: JAMES R. BORDEWICK, JR.
Name: James R. Bordewick, Jr.
Title: Assistant Secretary

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to its Registration Statement has been signed below by
the following persons in the capacities indicated on June 27, 1996.

SIGNATURE TITLE
--------- -----

A. KEITH BRODKIN* Chairman, President (Principal Executive
- ------------------------- Officer) and Trustee
A. Keith Brodkin

W. THOMAS LONDON* Treasurer (Principal Financial Officer
- ------------------------- and Principal Accounting Officer)
W. Thomas London

RICHARD B. BAILEY* Trustee
- -------------------------
Richard B. Bailey

PETER G. HARWOOD* Trustee
- -------------------------
Peter G. Harwood

J. ATWOOD IVES* Trustee
- -------------------------
J. Atwood Ives
<PAGE>

LAWRENCE T. PERERA* Trustee
- -------------------------
Lawrence T. Perera

WILLIAM J. POORVU* Trustee
- -------------------------
William J. Poorvu

CHARLES W. SCHMIDT* Trustee
- -------------------------
Charles W. Schmidt

ARNOLD D. SCOTT* Trustee
- -------------------------
Arnold D. Scott

JEFFREY L. SHAMES* Trustee
- -------------------------
Jeffrey L. Shames

ELAINE R. SMITH* Trustee
- -------------------------
Elaine R. Smith

DAVID B. STONE* Trustee
- -------------------------
David B. Stone

*By: JAMES R. BORDEWICK, JR.
-------------------------
Name: James R. Bordewick, Jr.
as Attorney-in-fact

Executed by James R. Bordewick, Jr. on
behalf of those indicated pursuant to a
Power of Attorney dated September 21,
1994, incorporated by reference to the
Registrant's Post-Effective Amendment No.
16 filed with the Securities and Exchange
Commission on June 28, 1995.

<PAGE>

INDEX TO EXHIBITS

EXHIBIT NO. DESCRIPTION OF EXHIBIT PAGE NO.

9 (b) Amendment to Shareholder Servicing Agent
Agreement.

10 Rule 24e-2 Consent and Opinion of Counsel.

11 Consent of Deloitte & Touche LLP.

17 Financial Data Schedules for Class A and
Class B shares of the Fund.

<PAGE>
EXHIBIT NO. 99.9(b)

MFS GOVERNMENT SECURITIES FUND
500 Boylston Street o Boston o Massachusetts o 02116
(617) o 954-5000

January 17, 1996

MFS Service Center, Inc.
500 Boylston Street
Boston, MA 02116

Dear Sir/Madam:

This will confirm our understanding that Exhibit B to the Shareholder
Servicing Agent Agreement between us, dated August 1, 1985, as modified by a
letter agreement dated August 30, 1993, is hereby amended, effective
immediately, to read in its entirety as set forth on Attachment 1 hereto.

Please indicate your acceptance of the foregoing by signing below.

Sincerely,

MFS GOVERNMENT SECURITIES FUND

By: W. THOMAS LONDON
----------------------
W. Thomas London
Treasurer

Accepted and Agreed:

MFS SERVICE CENTER, INC.

By: JOSEPH W. DELLO RUSSO
-----------------------
Joseph W. Dello Russo
Treasurer
<PAGE>
ATTACHMENT 1
January 17, 1996

EXHIBIT B TO THE SHAREHOLDER
SERVICING AGENT AGREEMENT BETWEEN
MFS SERVICE CENTER, INC. ("MFSC")
AND MFS SERIES TRUST III (the "Fund")

1. The fees to be paid by the Fund on behalf of its series with respect
to Class A shares of each series of the Fund to MFSC, for MFSC's
services as shareholder servicing agent, shall be:

0.15% of the first $500 million of the assets of the series
attributable to such class;
0.12% of the second $500 million of the assets of the series
attributable to such class;
0.09% over $1 billion of the assets of the series attributable to
such class.

2. The fees to be paid by the Fund on behalf of its series with respect
to Class B shares of each series of the Fund to MFSC, for MFSC's
services as shareholder servicing agent, shall be:

0.22% of the first $500 million of the assets of the series
attributable to such class;
0.18% of the second $500 million of the assets of the series
attributable to such class;
0.13% over $1 billion of the assets of the series attributable to
such class.

3. The fees to be paid by the Fund on behalf of its series with respect
to Class C shares of each series of the Fund to MFSC, for MFSC's
services as shareholder servicing agent, shall be:

<PAGE>

EXHIBIT 99.10
MFS

MASSACHUSETTS FINANCIAL SERVICES COMPANY
500 BOYLSTON STREET o BOSTON o MASSACHUSETTS 02116-3741
617 o 954-5000

JAMES R. BORDEWICK, JR.
Vice President and Associate General Counsel

June 21, 1996

MFS Government Securities Fund
500 Boylston Street
Boston, MA 02116

Re: POST-EFFECTIVE AMENDMENT NO. 19 TO REGISTRATION STATEMENT ON FORM N-1A
(FILE NO. 2-74959) (THE "REGISTRATION STATEMENT")

Gentlemen:

I am Vice President and Associate General Counsel of Massachusetts
Financial Services Company, which serves as investment adviser to MFS Government
Securities Fund (the "Fund") and the Assistant Secretary of the Fund. I am
admitted to practice law in The Commonwealth of Massachusetts. The Fund was
created under a written Declaration of Trust dated November 13, 1981, and
executed and delivered in Boston, Massachusetts, as amended and restated March
13, 1996 (the "Declaration of Trust"). The beneficial interest thereunder is
represented by transferable shares without par value. The Trustees have the
powers set forth in the Declaration of Trust, subject to the terms, provisions
and conditions therein provided.

I am of the opinion that the legal requirements have been complied with in
the creation of the Fund, and that said Declaration of Trust is legal and valid.

Under Article III, Section 3.4 and Article VI, Section 6.4 of the
Declaration of Trust, the Trustees are empowered, in their discretion, from time
to time to issue shares of the Fund for such amount and type of consideration,
at such time or times and on such terms as the Trustees may deem best. Under
Article VI, Section 6.1, it is provided that the number of shares of beneficial
interest authorized to be issued under the Declaration of Trust is unlimited.

By vote adopted on January 18, 1995, the Trustees of the Fund determined to
sell to the public the authorized but unissued shares of beneficial interest of
the Fund for cash at a price which will net the Fund (before taxes) not less
than the net asset value thereof, as defined in the Fund's By-Laws, determined
next after the sale is made or at some later time after such sale.

The Fund is about to register under the Securities Act of 1933, as amended,
1,519,408 shares of beneficial interest by Post-Effective Amendment No. 19 to
the Fund's Registration Statement. W. Thomas London, Treasurer of the Fund, has
certified that the Fund received cash consideration for the issuance of each of
the Shares of the Fund sold during the Fund's fiscal year ended February 29,
1996, including the 14,658,328 shares which were sold in reliance upon Rule
24f-2 of the General Rules and Regulations under the Investment Company Act of
1940, as amended, at a price which netted the Fund (before taxes) not less than
the net asset value per share, as defined in the Fund's Declaration of Trust,
determined next after the sale was made.

Based on the foregoing, I am of the opinion that all necessary Fund action
precedent to the issue of the shares of the Fund, comprising the shares covered
by Post-Effective Amendment No. 19 to the Registration Statement has been duly
taken, and that all such shares may legally and validly be issued for cash, and
when sold will be fully paid and nonassessable, except as described below, by
the Fund upon receipt by the Fund or its agent of consideration thereof in
accordance with the terms described in the Registration Statement. I express no
opinion as to compliance with the Securities Act of 1933, the Investment Company
Act of 1940 and applicable state "Blue Sky" or securities laws regulating the
sale of securities.

The Fund is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Fund.
However, the Declaration of Trust disclaims shareholder liability for acts or
obligations of the Fund and requires that notice of such disclaimer be given in
each agreement, obligation, or instrument entered into or executed by the Fund
or the Trustees. The Declaration of Trust provides for indemnification out of
the Fund property for all loss and expense of any shareholder held personally
liable for the obligations of the Fund. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is limited to
circumstances in which the Fund itself would be unable to meet its obligations.

I consent to your filing this opinion with the Securities and Exchange
Commission as an exhibit to Post-Effective Amendment No. 19 to the Registration
Statement.

Very truly yours,

JAMES R. BORDEWICK, JR.

James R. Bordewick, Jr.

<PAGE>
EXHIBIT NO. 99.11

DELOITTE &
TOUCHE LLP
- -------------- -------------------------------------------------------------
125 Summer Street Telephone: (617) 261-8000
Boston, Massachusetts 02110-1617 Facsimile: (617) 261-8111

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in this Post-Effective
Amendment No. 19 to Registration Statement No.2-74959 of MFS Government
Securities Fund of our report dated March 29, 1996 appearing in the annual
report to shareholders for the year ended February 29, 1996, of MFS Government
Securities Fund and to the references to us under the headings "Condensed
Financial Information" in the Prospectus and "Independent Auditors and Financial
Statements" in the Statement of Additional Information, both of which are part
of such Registration Statement.

DELOITTE & TOUCHE LLP
- ---------------------

Boston, Massachusetts
June 24, 1996

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF MFS GOVERNMENT SECURITIES FUND AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000356349
<NAME> MFS GOVERNMENT SECURITIES FUND
<SERIES>
<NUMBER> 001
<NAME> CLASS A
<MULTIPLIER> 1

<S> <C>
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<FISCAL-YEAR-END> FEB-29-1996
<PERIOD-START> MAR-01-1995
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<PER-SHARE-NII> 0.66
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<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.67
<EXPENSE-RATIO> 0.84
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> FEB-29-1996
<PERIOD-START> MAR-01-1995
<PERIOD-END> FEB-29-1996
<INVESTMENTS-AT-COST> 448753373
<INVESTMENTS-AT-VALUE> 443365054
<RECEIVABLES> 14733392
<ASSETS-OTHER> 249
<OTHER-ITEMS-ASSETS> 11592
<TOTAL-ASSETS> 458110287
<PAYABLE-FOR-SECURITIES> 9247500
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1202272
<TOTAL-LIABILITIES> 10449772
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 474076115
<SHARES-COMMON-STOCK> 12934035
<SHARES-COMMON-PRIOR> 11407557
<ACCUMULATED-NII-CURRENT> 25391
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (21052672)
<ACCUM-APPREC-OR-DEPREC> (5388319)
<NET-ASSETS> 447660515
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 33865292
<OTHER-INCOME> 0
<EXPENSES-NET> (4494010)
<NET-INVESTMENT-INCOME> 29371282
<REALIZED-GAINS-CURRENT> 21953585
<APPREC-INCREASE-CURRENT> (1577449)
<NET-CHANGE-FROM-OPS> 49747418
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (7225640)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 7243533
<NUMBER-OF-SHARES-REDEEMED> (6202442)
<SHARES-REINVESTED> 485387
<NET-CHANGE-IN-ASSETS> 24366157
<ACCUMULATED-NII-PRIOR> 1104312
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (43006257)
<GROSS-ADVISORY-FEES> 1769675
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5499251
<AVERAGE-NET-ASSETS> 442855055
<PER-SHARE-NAV-BEGIN> 9.22
<PER-SHARE-NII> 0.59
<PER-SHARE-GAIN-APPREC> 0.44
<PER-SHARE-DIVIDEND> (0.59)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.66
<EXPENSE-RATIO> 1.56
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>