MFS[RegTM] GOVERNMENT SECURITIES FUND
JULY 1, 1999 as amended SEPTEMBER 21, 1999
75 [Logo picture of two people in window] MFS[Reg TM]
INVESTMENT MANAGEMENT
YEARS
WE INVENTED THE MUTUAL FUND(R)
500 Boylston Street, Boston, MA 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, 1999. This SAI should be read in conjunction with the Prospectus. The
Fund's financial statements are incorporated into this SAI by reference to the
Fund's most recent Annual Report to shareholders. A copy of the Annual Report
accompanies this SAI. You may obtain a copy of the Fund's Prospectus and Annual
Report without charge by contacting MFS Service Center, Inc. (see back cover of
Part II of this SAI for address and phone number).
Statement of Additional
Information
This SAI is divided into two Parts -- Part I and Part II. Part I contains
information that is particular to the Fund, while Part II contains information
that generally applies to each of the funds in the MFS Family of Funds (the
"MFS Funds"). Each Part of the SAI has a variety of appendices which can be
found at the end of Part I and Part II, respectively.
This SAI is NOT a prospectus and is authorized for distribution to prospective
investors only if preceded or accompanied by a current prospectus.
MGS-13 6/99 600 26/226/326/826
<PAGE>
Statement of Additional Information
PART I
Part I of this SAI contains information that is particular to the Fund.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
I Definitions ............................................................... 1
II Management of the Fund .................................................... 1
The Fund .................................................................. 1
Trustees and Officers -- Identification and Background .................... 1
Trustee Compensation ...................................................... 1
Affiliated Service Provider Compensation .................................. 1
III Sales Charges and Distribution Plan Payments .............................. 1
Sales Charges ............................................................. 1
Distribution Plan Payments ................................................ 1
IV Portfolio Transactions and Brokerage Commissions .......................... 1
V Share Ownership ........................................................... 1
VI Performance Information ................................................... 1
VII Investment Techniques, Practices, Risks and Restrictions .................. 1
Investment Techniques, Practices and Risks ................................ 1
Investment Restrictions ................................................... 1
VIII Tax Considerations ........................................................ 3
IX Independent Auditors and Financial Statements ............................. 3
Appendix A -- Trustees and Officers -- Identification and Background ...... A-1
Appendix B -- Trustee Compensation ........................................ B-1
Appendix C -- Affiliated Service Provider Compensation .................... C-1
Appendix D -- Sales Charges and Distribution Plan Payments ................ D-1
Appendix E -- Portfolio Transactions and Brokerage Commissions ............ E-1
Appendix F -- Share Ownership ............................................. F-1
Appendix G -- Performance Information ..................................... G-1
</TABLE>
<PAGE>
I DEFINITIONS
"Fund" - MFS Government Securities Fund, a Massachusetts business trust
organized in 1981 .
"MFS" or the "Adviser" - Massachusetts Financial Services Company, a
Delaware corporation.
"MFD" - MFS Fund Distributors, Inc., a Delaware corporation.
"MFSC" - MFS Service Center, Inc., a Delaware corporation.
"Prospectus" - The Prospectus of the Fund, dated July 1, 1999, as
amended or supplemented from time to time.
II MANAGEMENT OF THE FUND
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.
Trustees and Officers -- Identification and Background
The identification and background of the Trustees and officers of the
Trust are set forth in Appendix A of this Part I.
Trustee Compensation
Compensation paid to the non-interested Trustees and to Trustees who
are not officers of the Fund, for certain specified periods, is set
forth in Appendix B of this Part I.
Affiliated Service Provider Compensation
Compensation paid by the Fund to its affiliated service providers -- to
MFS, for investment advisory and administrative services, and to MFSC,
for transfer agency services -- for certain specified periods is set
forth in Appendix C to this Part I.
III SALES CHARGES AND DISTRIBUTION PLAN
PAYMENTS
Sales Charges
Sales charges paid in connection with the purchase and sale of Fund
shares for certain specified periods are set forth in Appendix D to
this Part I, together with the Fund's schedule of dealer reallowances.
Distribution Plan Payments
Payments made by the Fund under the Distribution Plan for its most
recent fiscal year end are set forth in Appendix D to this Part I.
IV PORTFOLIO TRANSACTIONS AND BROKERAGE
COMMISSIONS
Brokerage commissions paid by the Fund for certain specified periods,
and information concerning purchases by the Fund of securities issued
by its regular broker-dealers for its most recent fiscal year, are set
forth in Appendix E to this Part I.
Broker-dealers may be willing to furnish statistical, research and
other factual information or services ("Research") to the Adviser for
no consideration other than brokerage or underwriting commissions.
Securities may be bought or sold from time to time through such
broker-dealers, on behalf of the fund. The Trustees (together with the
Trustees of certain other MFS funds) have directed the Adviser to
allocate a total of $53,050 of commission business from certain MFS
funds (including the fund) to the Pershing Division of Donaldson Lufkin
& Jenrette as consideration for the annual renewal of certain
publications provided by Lipper Analytical Securities Corporation
(which provides information useful to the Trustees in reviewing the
relationship between the fund and the Adviser).
V SHARE OWNERSHIP
Information concerning the ownership of Fund shares by Trustees and
officers of the Fund as a group, by investors who control the Fund, if
any, and by investors who own 5% or more of any class of Fund shares,
if any, is set forth in Appendix F to this Part I.
VI PERFORMANCE INFORMATION
Performance information, as quoted by the Fund in sales literature and
marketing materials, is set forth in Appendix G to this Part I.
VII INVESTMENT TECHNIQUES, PRACTICES, RISKS
AND RESTRICTIONS
Investment Techniques, Practices and Risks
The investment objective and principal investment policies of the Fund
are described in the Prospectus. In pursuing its investment objective
and principal investment policies, the Fund may engage in a number of
investment techniques and practices, which involve certain risks. These
investment techniques and practices, which may be changed without
shareholder approval unless indicated otherwise, are identified in
Appendix A to the Prospectus, and are more fully described, together
with their associated risks, in Part II of this SAI. The following
percentage limitation applies to these investment techniques and
practices:
o Lending of Portfolio Securities may not exceed 30% of the Fund's net
assets
Investment Restrictions
The Fund has adopted the following restrictions which cannot be changed
without the approval of the holders of a majority of the Fund's shares
(which, as used in this SAI, means the lesser of (i) more
Part I -- 1
<PAGE>
than 50% of the outstanding shares of the Fund or a series or class, as
applicable or (ii) 67% or more of the outstanding shares of the Fund or
a series or class, as applicable, present at a meeting at which holders
of more than 50% of the outstanding shares of the Fund or a series or
class, as applicable are represented in person or by proxy).
Terms used below (such as Options and Futures Contracts) are defined
in Part II of this SAI.
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
interest 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 of 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) 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.
Part I -- 2
<PAGE>
Applicability of Restrictions: Except for Investment Restriction (1)
and (6), 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.
VIII TAX CONSIDERATIONS
For a discussion of tax considerations, see Part II of this SAI.
IX INDEPENDENT AUDITORS AND FINANCIAL STATEMENTS
Deloitte & Touche LLP are the Fund's independent auditors, providing
audit services, tax services, and assistance and consultation with
respect to the preparation of filings with the Securities and Exchange
Commission.
The Portfolio of Investments and the Statement of Assets and
Liabilities at February 28, 1999, the Statement of Operations for the
year ended February 28, 1999, the Statement of Changes in Net Assets
for the two years ended February 28, 1998, the Notes to Financial
Statements and the Report of the Independent Auditors, each of which is
included in the Annual Report to Shareholders of the Fund, are
incorporated by reference into this SAI in reliance upon the report of
Deloitte & Touche LLP, independent auditors, given upon their authority
as experts in accounting and auditing. A copy of the Annual Report
accompanies this SAI.
Part I -- 3
<PAGE>
PART I -- APPENDIX A
TRUSTEES AND OFFICERS -- IDENTIFICATION
AND BACKGROUND
The Trustees and officers of the Trust are listed below, together with
their principal occupations during the past five years. (Their titles may
have varied during that period.)
Trustees
JEFFREY L. SHAMES,* Chairman and President (born 6/2/55)
Massachusetts Financial Services Company, Chairman and Chief Executive
Officer
RICHARD B. BAILEY* (born 9/14/26)
Private Investor; Massachusetts Financial Services Company, former
Chairman and Director (prior to September 30, 1991); Cambridge Bancorp,
Director; Cambridge Trust Company, Director
J. ATWOOD IVES (born 5/1/36)
Eastern Enterprises (diversified services company), Chairman, Trustee and
Chief Executive Officer
Address: 9 Riverside Road, Weston, Massachusetts
LAWRENCE T. PERERA (born 6/23/35)
Hemenway & Barnes (attorneys), Partner
Address: 60 State Street, Boston, Massachusetts
WILLIAM J. POORVU (born 4/10/35)
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 (born 3/18/28)
Private investor; International Technology Corporation, Director; The
Boston Company, Director; Mohawk Paper Company, Director
Address: 30 Colpitts Road, Weston, Massachusetts
ARNOLD D. SCOTT* (born 12/16/42)
Massachusetts Financial Services Company, Senior Executive Vice President
and Secretary
ELAINE R. SMITH (born 4/25/46)
Independent Consultant; Brigham and Women's Hospital, Executive Vice
President and Chief Operating Officer (prior to September 1992)
Address: Weston, Massachusetts
DAVID B. STONE (born 9/2/27)
North American Management Corp. (investment adviser), Chairman and
Director; Eastern Enterprises, Trustee
Address: Ten Post Office Square, Suite 300, Boston, Massachusetts
Officers
W. THOMAS LONDON,* Treasurer (born 3/1/44)
Massachusetts Financial Services Company, Senior Vice President
STEPHEN E. CAVAN,* Secretary and Clerk (born 11/6/53)
Massachusetts Financial Services Company, Senior Vice
President, General Counsel and Assistant Secretary
JAMES R. BORDEWICK, JR.,* Assistant Secretary (born 3/6/59)
Massachusetts Financial Services Company, Senior Vice
President and Associate General Counsel
JAMES O. YOST,* Assistant Treasurer (born 6/12/60)
Massachusetts Financial Services Company, Senior Vice President
ELLEN MOYNIHAN,* Assistant Treasurer (born 11/13/57)
Massachusetts Financial Services Company, Vice President (since September
1996); Deloitte & Touche LLP, Senior Manager (prior to September 1996)
MARK E. BRADLEY,* Assistant Treasurer (born 11/23/59)
Massachusetts Financial Services Company, Vice President (since March
1997); Putnam Investments, Vice President (from September 1994 until
March 1997); Ernst & Young LLP, Senior Tax Manager (prior to September
1994)
------------------------------
* "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
affiliates of MFS or with certain other funds of which MFS or a
subsidiary is the investment adviser or distributor. 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.), a subsidiary of
Sun Life Assurance Company of Canada.
Part I -- A-1
<PAGE>
PART I -- APPENDIX B
TRUSTEE COMPENSATION
The Fund pays the compensation of non-interested Trustees and of Trustees
who are not officers of the Trust, who currently receive a fee of $2,500
per year plus $135 per meeting and $100 per committee meeting attended,
together with such Trustee's out-of-pocket expenses. In addition, the
Trust has a retirement plan for these Trustees as described under the
caption "Management of the Fund -- Trustee Retirement Plan" in Part II.
The Retirement Age under the plan is 73.
Trustee Compensation Table
.........................................................................
<TABLE>
<CAPTION>
Retirement Benefit Total Trustee
Trustee Fees Accrued as Part Estimated Credited Fees from Fund
Trustee from Fund(1) of Fund Expense(1) Years of Service(2) and Fund Complex(3)
----------------------- -------------- -------------------- --------------------- --------------------
<S> <C> <C> <C> <C>
Richard B. Bailey $3,282 $ 963 8 $259,430
J. Atwood Ives 3,702 1,009 17 149,491
Lawrence T. Perera 3,382 1,442 24 129,371
William J. Poorvu 3,612 1,480 24 139,006
Charles W. Schmidt 3,242 1,450 17 129,301
Arnold D. Scott 0 0 N/A 0
Jeffrey L. Shames 0 0 N/A 0
Elaine R. Smith 3,882 1,106 27 150,511
David B. Stone 3,728 1,461 11 165,826
</TABLE>
--------------
(1) For the fiscal year ended February 28, 1999.
(2) Based upon normal retirement age (73).
(3) Information provided is provided for calendar year 1998. All Trustees
served as Trustees of 31 funds within the MFS fund complex (having
aggregate net assets at December 31, 1998, of approximately $43
billion) except Mr. Bailey, who served as Trustee of 74 funds within
the MFS complex (having aggregate net assets at December 31, 1998 of
approximately $68 billion).
Estimated Annual Benefits Payable by Fund Upon Retirement(4)
...........................................................................
<TABLE>
<CAPTION>
Years of Service
Average
Trustee Fees 3 5 7 10 or more
- -------------- ------- -------- --------- -----------
<S> <C> <C> <C> <C>
$ 2,918 $438 $ 729 $1,021 $1,459
3,188 478 797 1,116 1,594
3,459 519 865 1,211 1,729
3,729 559 932 1,305 1,865
4,000 600 1,000 1,400 2,000
4,270 641 1,068 1,495 2,135
</TABLE>
--------------
(4) Other funds in the MFS Fund complex provide similar retirement benefits
to the Trustees.
Part I -- B-1
<PAGE>
PART I -- APPENDIX C
AFFILIATED SERVICE PROVIDER COMPENSATION
........................................................................ .
The Fund paid compensation to its affiliated service providers over the
specified periods as follows:
<TABLE>
<CAPTION>
Paid to MFS Amount Paid to MFS for Paid To MFSC Amount Aggregate
for Advisory Waived Administrative for Transfer Waived Amount Paid
Fiscal Year Ended Services By MFS Services Agency Services by MFSC To MFS and MFSC
------------------ -------------- ----------- ----------------- ----------------- --------- -----------------
<S> <C> <C> <C> <C> <C> <C>
February 28, 1999 $1,452,331 $485,623 $ 59,509 $544,624 N/A $2,056,464
February 28, 1998 $1,214,387 $420,618 $ 57,901* $520,789 N/A $1,793,077
February 28, 1997 $1,076,326 $645,570 N/A $803,429 N/A $1,879,755
</TABLE>
--------------
* From March 1, 1997, the commencement of the Master Administrative
Service Agreement.
Part I -- C-1
<PAGE>
PART I -- APPENDIX D
SALES CHARGES AND DISTRIBUTION PLAN PAYMENTS
Sales Charges
.........................................................................
The following sales charges were paid during the specified periods:
<TABLE>
<CAPTION>
Class A Initial Sales Charges: CDSC Paid to MFD on:
Retained Reallowed Class A Class B Class C
Fiscal Year End Total By MFD to Dealers Shares Shares Shares
- ---------------------- ------------- ---------- ------------ --------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
February 28, 1999 $1,200,098 $199,411 $1,000,687 $3,509 $429,961 $21,937
February 28, 1998 $ 422,293 $ 58,857 $ 363,436 $3,470 $279,216 $ 2,556
February 28, 1997 $ 447,908 $ 60,477 $ 387,431 $3,861 $279,385 $ 789
</TABLE>
Dealer Reallowances
.........................................................................
As shown above, MFD pays (or "reallows") a portion of the Class A initial
sales charge to dealers. The dealer reallowance as expressed as a
percentage of the Class A shares' offering price is:
<TABLE>
<CAPTION>
Dealer Reallowance as a
Amount of Purchase percent of Offering Price
<S> <C>
Less than $100,000 4.00%
$100,000 but less than $250,000 3.20%
$250,000 but less than $500,000 2.25%
$500,000 but less than $1,000,000 1.70%
$1,000,000 or more None*
</TABLE>
- --------------
* A CDSC will apply to such purchase.
Distribution Plan Payments
.........................................................................
During the fiscal year ended February 28, 1999, the Fund made the
following Distribution Plan payments:
<TABLE>
<CAPTION>
Amount of Distribution and Service Fees:
Class of Shares Paid By Fund Retained By MFD Paid To Dealers
- -------------------- -------------- ----------------- -----------------
<S> <C> <C> <C>
Class A Shares $1,076,050 $ 383,816 $692,234
Class B Shares $1,444,726 $1,105,268 $339,458
Class C Shares $ 245,257 $ 571 $244,686
</TABLE>
Distribution plan payments retained by MFD are used to compensate MFD for
commissions advanced by MFD to dealers upon sale of fund shares.
Part I -- D-1
<PAGE>
PART I -- APPENDIX E
PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS
Brokerage Commissions
...........................................................................
The following brokerage commissions were paid by the Fund during the
specified time periods:
<TABLE>
<CAPTION>
Brokerage Commissions
Fiscal Year End Paid by Fund
- ----------------------- ----------------------
<S> <C>
February 28, 1999 $-0-
February 28, 1998 $-0-
February 28, 1997 $-0-
</TABLE>
Securities Issued By Regular Broker-Dealers
............................................................................
During the fiscal year ended February 28, 1999, the Fund did not purchase
any securities issued by regular broker-dealers of the Fund.
Part I -- E-1
<PAGE>
PART I -- APPENDIX F
SHARE OWNERSHIP
Ownership By Trustees and Officers
As of March 31, 1999, the Trustees and officers of the Trust as a group
owned less than 1% of any class of the Fund's shares.
25% or Greater Ownership
The following table identifies those investors who own 25% or more of the
Fund's shares (all share classes taken together) as of March 31, 1999, and
are therefore presumed to control the Fund:
<TABLE>
<CAPTION>
Jurisdiction of Organization
Name and Address of Investor (if a Company) Percentage Ownership
- ------------------------------ ----------------------------- ----------------------
<S> <C>
None
</TABLE>
5% or Greater Ownership of Share Class
The following table identifies those investors who own 5% or more of any
class of the Fund's shares as of March 31, 1999:
<TABLE>
<CAPTION>
Name and Address of Investor Ownership Percentage
..........................................................................
<S> <C>
MLPF&S for the Sole Benefit of its Customers 12.13% of Class B Shares
Attn: Fund Administration 97B92
4800 Deer Lake Drive E--3rd Floor
Jacksonville, FL 32246-6484
.......................................................................
MLPF&S for the Sole Benefit of its Customers 24.35% of Class C Shares
Attn: Fund Administration 97JT5
4800 Deer Lake Drive E--3rd Floor
Jacksonville, FL 32246-6484
.......................................................................
TRS MFS DEF Contribution Plan 8.86% of Class I Shares
c/o Mark Leary--19th Floor
Mass Financial Services
500 Boylston Street
Boston, MA 02116-3740
.......................................................................
TRS of the MFS Pension Plan 91.14% of Class I Shares
c/o Mark Leary
Mass Financial Services
500 Boylston Street
Boston, MA 02116-3740
.......................................................................
</TABLE>
Part I -- F-1
<PAGE>
PART I -- APPENDIX G
PERFORMANCE INFORMATION
......................................................................
All performance quotations are as of February 28, 1999.
<TABLE>
<CAPTION>
Average Annual Actual 30-
Total Returns Day Yield 30-Day Yield Current
------------------------------- (Including (Without Any Distribution
1 Year 5 Year 10 Year Waivers) Waivers) Rate
---------- ---------- --------- ------------ -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Class A Shares, with initial sales charge
(4.75%) 0.96% 5.51% 7.66% 4.69 4.60 5.31
Class A Shares, at net asset value 6.00% 6.54% 8.18% N/A N/A N/A
Class B Shares, with CDSC
(declining over 6 years from 4% to 0%) 1.32% 5.50% 7.77% N/A N/A N/A
Class B Shares, at net asset value 5.32% 5.81% 7.77% 4.27 4.17 4.91
Class C Shares, with CDSC
(1% for first year) 4.23% 6.12% 7.97% N/A N/A N/A
Class C Shares, at net asset value 5.23% 6.12% 7.97% 4.26 4.16 4.92
Class I Shares, at net asset value 6.37% 6.71% 8.27% 5.28 5.18 5.93
</TABLE>
--------------
+ Annualized, based upon the last distribution.
The fund initially offered class A shares on July 25, 1984, class B shares
on August 30, 1993, class C shares on April 1, 1996 and class I shares on
January 2, 1997. Class B and class C share performance includes the
performance of the fund's class A shares for periods prior to the offering
of class B and class C shares. Class B and class C share performance
generally would have been lower than class A share performance had class B
and class C shares been offered for the entire period, because the
operating expenses (e.g., distribution and service fees) attributable to
class B and class C shares are higher than those of class A shares. Class B
and class C share SEC performance has been adjusted to take into account
the CDSC applicable to class B and class C shares, rather than the initial
sales charge applicable to class A shares.
Class I share performance includes the performance of the fund's class A
shares for periods prior to the offering of class I shares. Class I share
performance generally would have been higher than class A share performance
had class I shares been offered for the entire period, because operating
expenses (e.g., distribution and service fees) attributable to class I
shares are lower than those of class A shares. Class I share performance
has been adjusted to take into account the fact that class I shares have no
initial sales charge.
Performance results include any applicable expense subsidies and waivers,
which may cause the results to be more favorable. Current subsidies and
waivers may be discontinued at any time.
Part I -- G-1
