<PAGE>
MFS GOVERNMENT SECURITIES FUND
SUPPLEMENT TO THE PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION, EACH
DATED JULY 1, 1995
THE FOLLOWING INFORMATION SHOULD BE READ IN CONJUNCTION WITH THE FUND'S
PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION ("SAI") DATED JULY 1, 1995
AND CONTAINS A DESCRIPTION OF CLASS C SHARES AND CERTAIN CHANGES TO
COMMISSIONS PAID TO DEALERS ON CERTAIN PURCHASES OF CLASS A SHARES.
<TABLE>
<CAPTION>
EXPENSE SUMMARY
SHAREHOLDER TRANSACTION EXPENSES: CLASS A CLASS B CLASS C
------- ------- -------
<S> <C> <C> <C>
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 OF THE FUND
(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) ................................................ 0.29% 0.35% 0.29%(6)
----- ----- -----
Total Operating Expenses (after applicable fee reduction)(7) ..... 0.89% 1.60% 1.54%
<FN>
- ----------
(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 (a "CDSC") of 1.00% will be imposed on such purchases in the event of certain
redemption transactions within one year following such purchases (see "Purchases" in the Prospectus).
(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 the Class A shares (see
"Distribution Plans" in the Prospectus). 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 separate 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 "Distribution Plans" below and in the Prospectus). 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) Except for the shareholder servicing agent fee component, "Other Expenses" is based on Class A expenses incurred during the
six months ended August 31, 1995. The shareholder servicing agent fee component of "Other Expenses" is a predetermined
percentage based upon the Fund's net assets attributable to each class.
(7) Absent any expense reductions, "Total Operating Expenses" for Class A, Class B and Class C shares would have been 1.04%,
1.75% and 1.69%, respectively.
</TABLE>
<PAGE>
EXAMPLE OF EXPENSES
-------------------
An investor would pay the following dollar amounts of expenses on a $1,000
investment in the Fund, assuming (a) 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
------ ------- ------------ ------------
(1) (1)
<S> <C> <C> <C> <C> <C>
1 year ............................................. $ 56 $ 56 $ 16 $25 $15
3 years ............................................. 75 80 50 45 45
5 years ............................................. 94 107 87
10 years ............................................. 152 171(2) 171(2)
<FN>
- ----------
(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.
</TABLE>
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 Fund
expenses are set forth in the following sections of the 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.
<PAGE>
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 Semiannual Report to shareholders which are
incorporated by reference into the Supplement to the SAI dated April 1, 1996,
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>
FINANCIAL HIGHLIGHTS
<CAPTION>
SIX ELEVEN
MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED MARCH 31,
AUGUST 31, FEBRUARY 28, FEBRUARY 28, --------------------------------------
1995 1995 1994 1993 1992 1991
----------- ------------ ------------ ---- ---- ----
CLASS A
----------------------------------------------------------------------------------------
<S> <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
------ ------ ------- ------- ------- -------
Income from investment operations<F3> --
Net investment income<F6>........... $ 0.34 $ 0.67 $ 0.63 $ 0.67 $ 0.75 $ 0.78
Net realized and unrealized gain
(loss) on investments ............. 0.40 (0.58) (0.20) 0.60 0.14 0.19
------ ------ ------- ------- ------- -------
Total from investment operations $ 0.74 $ 0.09 $ 0.43 $ 1.27 $ 0.89 $ 0.97
------ ------ ------- ------- ------- -------
Less distributions declared to
shareholders --
From net investment income ......... $ (0.33) $ (0.66) $ (0.58)<F4> $ (0.70) $ (0.75) $ (0.78)
In excess of net realized gain on
investments ...................... -- -- (0.06) -- -- --
------ ------ ------- ------- ------ -------
Total distributions declared to
shareholders ................. $ (0.33) $ (0.66) $ (0.64) $ (0.70) $ (0.75) $ (0.78)
------ ------ ------- ------- ------- -------
Net asset value -- end of period ..... $ 9.63 $ 9.22 $ 9.79 $ 10.00 $ 9.43 $ 9.29
====== ====== ======= ======= ======= =======
Total return<F5>................ 8.22%<F2> 1.21% 6.57% 13.94% 9.96% 11.13%
RATIOS (TO AVERAGE NET ASSETS)/
SUPPLEMENTAL DATA<F6>:
Expenses ........................... 0.83%<F1> 0.79% 0.68%<F1> 1.20% 1.25% 1.28%
Net investment income .............. 7.07%<F1> 7.24% 6.83%<F1> 7.18% 7.95% 8.56%
PORTFOLIO TURNOVER ................... 186% 385% 167% 264% 270% 95%
NET ASSETS AT END OF PERIOD
(000 OMITTED) ....................... $318,316 $318,116 $372,702 $356,735 $356,366 $323,612
<FN>
<F1> Annualized.
<F2> Not annualized.
<F3> Per share data subsequent to and including February 28, 1994 is based on average shares outstanding.
<F4> Amount includes distribution in excess of net investment income of less than $0.001 per share for the period indicated.
<F5> Total returns for Class A shares do not include the applicable sales charge. If the charge had been included, the results
would have been lower.
<F6> The investment adviser did not impose a portion of its management fee for the periods indicated. If this fee had been
incurred by the Fund, the net investment income per share and the ratios would have been:
Net investment income .......... $ 0.33 $ 0.65 $ 0.59 -- -- --
RATIOS (TO AVERAGE NET ASSETS):
Expenses ..................... 1.04%<F1> 1.05% 1.17%<F1> -- -- --
Net investment income ........ 6.86%<F1> 6.98% 6.34%<F1> -- -- --
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS -- CONTINUED
<CAPTION>
YEAR ENDED MARCH 31,
----------------------------------------------------------------------------------------
1990 1989 1988 1987 1986 1985<F1>
---- ---- ---- ---- ---- -----
CLASS A
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA (FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD):
Net asset value -- beginning of period $ 9.05 $ 9.56 $10.22 $10.53 $ 9.95 $ 9.53
------ ------ ------ ------ ------ ------
Income from investment operations --
Net investment income ............. $ 0.82 $ 0.86 $ 0.87 $ 0.94 $ 1.07 $ 0.66
Net realized and unrealized gain
(loss) on investments ........... 0.04 (0.51) (0.59) (0.20) 0.68 0.33
------ ------ ------ ------ ------ ------
Total from investment operations $ 0.86 $ 0.35 $ 0.28 $ 0.74 $ 1.75 $ 0.99
------ ------ ------ ------ ------ ------
Less distributions declared to shareholders --
From net investment income ........ $(0.81) $(0.86) $(0.88) $(0.94) $(1.08) $(0.57)
From net realized gain on
investments ..................... -- -- (0.06) (0.11) (0.09) --
------ ------ ------ ------ ------ ------
Total distributions declared to
shareholders ................ $(0.81) $(0.86) $(0.94) $(1.05) $(1.17) $(0.57)
------ ------ ------ ------ ------ ------
Net asset value -- end of period .... $ 9.10 $ 9.05 $ 9.56 $10.22 $10.53 $ 9.95
====== ====== ====== ====== ====== ======
Total return<F3>...................... 9.72% 3.84% 3.11% 7.48% 18.70% 15.52%<F2>
RATIOS (TO AVERAGE NET ASSETS)/SUPPLEMENTAL DATA:
Expenses ........................... 1.29% 1.40% 1.18% 1.18% 1.09% 1.29%<F2>
Net investment income .............. 8.81% 9.25% 9.10% 9.14% 10.43% 11.26%<F2>
PORTFOLIO TURNOVER ................... 260% 346% 417% 191% 128% 158%
NET ASSETS AT END OF PERIOD
(000 OMITTED)........................ $327,877 $348,617 $397,239 $487,975 $343,270 $130,699
<FN>
<F1> For the period from the commencement of investment operations, July 25, 1984 to March 31, 1985.
<F2> Annualized.
<F3> Total returns for Class A shares do not include the applicable sales charge. If the charge had been included, the results
would have been lower.
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS -- CONTINUED
<TABLE>
<CAPTION>
SIX
MONTHS ENDED YEAR ENDED PERIOD ENDED
AUGUST 31, FEBRUARY 28, FEBRUARY 28,
1995 1995 1994<F1>
------------ ------------ -------------
CLASS B
------------------------------------------------
<S> <C> <C> <C>
PER SHARE DATA (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD):
Net asset value -- beginning of period ....................... $ 9.22 $ 9.78 $10.16
------ ------ ------
Income from investment operations<F4> --
Net investment income(s) ..................................... $ 0.30 $ 0.59 $ 0.30
Net realized and unrealized gain (loss) on investments ....... 0.41 (0.56) (0.43)
------ ------ ------
Total from investment operations ......................... $ 0.71 $ 0.03 $ (0.13)
------ ------ ------
Less distributions declared to shareholders -- from net
investment income ............................................ $(0.31) $(0.59) $(0.25)<F5>
------ ------ ------
Net asset value -- end of period ............................... $ 9.62 $ 9.22 $ 9.78
====== ====== ======
Total return ................................................... 7.80%<F3> 0.57% (1.29)%<F3>
RATIOS (TO AVERAGE NET ASSETS)/SUPPLEMENTAL DATA<F6>:
Expenses ..................................................... 1.54%<F2> 1.51% 1.39%<F2>
Net investment income ........................................ 6.36%<F2> 6.52% 5.92%<F2>
PORTFOLIO TURNOVER ............................................. 186% 385% 167%
NET ASSETS AT END OF PERIOD
(000 OMITTED) ................................................ $115,648 $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> Not annualized.
<F4> Per share data is based on average shares outstanding.
<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 the periods indicated. If this fee had been
incurred by the Fund, the net investment income per share and the ratios would have been:
Net investment income ...................................... $ 0.29 $ 0.57 $ 0.28
RATIOS (TO AVERAGE NET ASSETS):
Expenses ................................................. 1.75%<F2> 1.77% 1.87%<F2>
Net investment income .................................... 6.15%<F2> 6.26% 5.44%<F2>
</TABLE>
THE FUND
Three classes of shares of the Fund currently are offered 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 of 1.00% upon
redemption during the first year in the case of purchases of $1 million or
more and certain purchases by retirement plans), and are 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 are
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 of 1.00%
upon redemption 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.
INFORMATION CONCERNING SHARES OF THE FUND
PURCHASES
The Fund offers three classes of shares which bear sales charges and
distribution fees in different forms and amounts. Class A and Class B shares
are described in the Prospectus and SAI. Class C shares and the new commission
structure with respect to certain purchases of Class A shares are described
below.
CLASS A SHARES: The Fund currently offers Class A shares at net asset value,
without an initial sales charge but subject to a 1% CDSC, under certain
limited circumstances as described in the Fund's Prospectus. Effective April
1, 1996, the commissions paid by MFS Fund Distributors, Inc. ("MFD"), the
Fund's distributor, to dealers on such investments in Class A shares made
through dealers will be 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
purchase).
CLASS C SHARES: Class C shares are offered at net asset value without an
initial sales charge but are subject to a CDSC of 1.00% upon redemption during
the first year. The maximum investment in Class C shares is $1 million 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.
In certain circumstances, the CDSC imposed upon redemption of Class C shares
is waived. Circumstances under which sales charges imposed on Class A and
Class B shares are waived are described in the Prospectus. The CDSC imposed
upon redemption of Class C shares is waived in the same circumstances that
apply to the waiver of the Class B CDSC. 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). 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 Class C
shares sold by such dealers during a specified sales period.
Class C shares are not currently available for purchase by any retirement plan
qualified under Section 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.
EXCHANGES
Some or all of the Class C 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 Class C shares of any other MFS Fund in the MFS Family of Funds
(the "MFS Funds") at net asset value (if available for sale). No CDSC will be
imposed in connection with an exchange from Class C shares of the Fund to any
other MFS Fund, however the holding period for purposes of calculating the
CDSC will carry over to the acquired shares.
Prior to April 1, 1996, Class C shares of the MFS Funds were exchangeable for
shares of the MFS Money Market Fund at net asset value. Effective April 1,
1996, Class C shares of the MFS Funds may no longer be exchanged for shares of
the MFS Money Market Fund. However, Class C shares of the MFS Cash Reserve
Fund, another money market fund sponsored by MFS, are available for such
exchanges effective April 1, 1996.
REDEMPTIONS AND REPURCHASES
REDEMPTION BY CHECK: Class C shares may be redeemed by check. The Fund's
Prospectus describes the procedures applicable to redeeming Class A shares by
check. These procedures apply to redemptions by Class C shares by check.
CONTINGENT DEFERRED SALES CHARGE: Investments in Class C shares made on or
after April 1, 1996 ("Direct Purchases") will be subject to a 1.00% CDSC upon
redemption for a period of 12 months. Purchases of Class C shares made during
a calendar month, regardless of when during the month the investment occurred,
will age one year at the close of business on the last day of such month in
the following calendar 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 represented by Direct Purchases exceeds the sum of 12 months 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 dividend or capital gain distributions ("Reinvested Shares"). Therefore, at
the time of redemption of Class C shares, (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 made which will result
in any such charge being imposed at the lowest possible rate.
The applicability of a CDSC for Class C shares will be unaffected by exchanges
or transfers of registration, except as described in the Prospectus for Class
B shares.
REINSTATEMENT PRIVILEGE: Class C 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 Class C shares credited for any CDSC paid are then redeemed within 12
months of the initial purchase, a CDSC will be imposed upon redemption. Such
purchases under the Reinstatement Privilege are subject to all limitations in
the SAI regarding the privilege.
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, after having concluded that there is a reasonable likelihood that
the Distribution Plans would benefit the Fund and its shareholders. The
Distribution Plans for Class A and Class B shares are described in the
Prospectus (see "Distribution Plans" therein). The Distribution Plan for Class
C shares is described below.
The Class C Distribution Plan provides that the Fund may pay MFD a service fee
of up to 0.25% per annum of the average daily net assets attributable to Class
C shares in order that MFD may pay expenses on behalf of the Fund relating to
the servicing of Class C shares. 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 Class C shares owned by investors for whom such dealer is the
dealer or holder of record. MFD may from time to time reduce the amount of
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 service fees 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.
The Class C Distribution Plan also provides that the Fund may pay MFD a
distribution fee equal to 0.75% per annum of the Fund's average daily net
assets attributable to Class C shares 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. 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.
As discussed under the caption "Purchases" above, Class C shares are offered
at net asset value without an initial sales charge but are subject to a CDSC
of 1.00% upon redemption during the first year. 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 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.
Fees payable under the Class C Distribution Plan are charged to, and therefore
reduce, income allocated to Class C shares.
DISTRIBUTIONS
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.
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).
PERFORMANCE INFORMATION
Total rate of return quotations for Class C shares, if quoted for periods of
one year or less, will give effect to the imposition of the 1.00% CDSC
assessed upon redemption of Class C shares during the first year. Such total
rate of return quotations may be accompanied by quotations which do not
reflect the deduction of the CDSC, and will thus be higher. Yield and
distribution rate calculations for Class C shares assume no CDSC is paid.
SHAREHOLDER SERVICES
INVESTMENT AND WITHDRAWAL PROGRAMS --
LETTER OF INTENT: Purchases of Class C shares will apply toward completion
of a Letter of Intent with respect to Class A shares. See the Prospectus for
further information on the Letter of Intent.
RIGHT OF ACCUMULATION: The current offering price value of an investor's
holdings of Class C shares will apply toward cumulative quantity discounts on
purchases of Class A shares. See the Prospectus for further information on the
Right of Accumulation.
DISTRIBUTION INVESTMENT PROGRAM: Prior to April 1, 1996, distributions made
on Class C shares of the MFS Funds could be automatically invested under the
Distribution Investment Program in shares of the MFS Money Market Fund at net
asset value. Effective April 1, 1996, distributions made on Class C shares of
the MFS Funds may no longer be automatically invested under the Distribution
Investment Program in shares of the MFS Money Market Fund. However, effective
April 1, 1996, distributions made on Class C shares of the MFS Funds may be
automatically invested under this Program in Class C shares of the MFS Cash
Reserve Fund, another money market fund sponsored by MFS.
SYSTEMATIC WITHDRAWAL PLAN: The aggregate withdrawals of Class C shares in
any year pursuant to a Systematic Withdrawal Plan ("SWP") will not be subject to
a CDSC and generally are limited to 10% of the value of the account at the time
of establishment of the SWP.
DOLLAR COST AVERAGING PROGRAMS --
AUTOMATIC EXCHANGE PLAN: Prior to April 1, 1996, Class C shares of the MFS
Funds were exchangeable under the Automatic Exchange Plan for shares of the MFS
Money Market Fund at net asset value. Effective April 1, 1996, Class C shares of
the MFS Funds may no longer be exchanged under the Automatic Exchange Plan for
shares of the MFS Money Market Fund. However, Class C shares of the MFS Cash
Reserve Fund, another money market fund sponsored by MFS, are available for such
exchanges effective April 1, 1996.
THE DATE OF THIS SUPPLEMENT IS APRIL 1, 1996
