<PAGE>
Front Cover: A 6-1/4" by 8-1/4" photo of a beaker.
MFS Annual Report for
The First Name in Mutual Funds Year Ended
December 31, 1994
MFS(R) GROWTH OPPORTUNITIES FUND
<TABLE>
<S> <C>
MFS(R) GROWTH OPPORTUNITIES FUND
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
INVESTOR INFORMATION
Peter G. Harwood - Former Financial Vice For MFS stock and bond market outlooks,
President, Treasurer and Director (until 1988), call toll-free: 1-800-637-4458 anytime from
Loomis, Sayles & Co., Inc. a touch-tone telephone.
J. Atwood Ives - Chairman and Chief Executive For information on MFS mutual funds
Officer, Eastern Enterprises call your financial adviser or, for an
information kit, call toll-free:
Lawrence T. Perera - Partner, Hemenway & Barnes 1-800-637-2929 any business day from
9 a.m. to 5 p.m. Eastern time (or, leave
William J. Poorvu - Adjunct Professor, Harvard a message anytime).
University Graduate School of Business
Administration INVESTOR SERVICE
MFS Service Center, Inc.
Charles W. Schmidt - Private Investor; P.O. Box 2281
Former Senior Vice President and Group Executive Boston, MA 02107-9906
(until 1990), Raytheon Company
For current account service, call toll free:
Arnold D. Scott* - Senior Executive Vice President, 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 Chief Equity For service to speech- or hearing-impaired,
Officer, 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
For share prices, account balances and
David B. Stone - Chairman, North American exchanges, call toll free: 1-800-MFS-TALK
Management Corp. (Investment Advisers) (1-800-637-8255) anytime from a touch-tone
telephone.
INVESTMENT ADVISER
Massachusetts Financial Services Company
500 Boylston Street ----------------------------
Boston, Massachusetts 02116-3741 TOP-RATED SERVICE
MFS was rated first when
PORTFOLIO MANAGERS securities firms evaluated the
Paul M. McMahon quality of service they receive
from 40 mutual fund compa-
TREASURER nies. MFS got high marks for
W. Thomas London* answering calls quickly,
processing transactions
ASSISTANT TREASURER accurately and sending statements
James O. Yost* out on time.
(Source: 1994 DALBAR Survey)
SECRETARY ----------------------------
Stephen E. Cavan*
ASSISTANT SECRETARY
James R. Bordewick, Jr.*
*Affiliated with the Investment Adviser
Cover photo: Through their wide range of
investments, MFS mutual funds help you
share in America's growth.
</TABLE>
<PAGE>
LETTER TO SHAREHOLDERS
Dear Shareholders:
During the fiscal year ended December 31, 1994, the total return for Class A
shares of the Fund was -4.15%, while the total return for Class B shares was
- -4.96%. Both of these figures assume the reinvestment of distributions but
exclude the effects of any sales charges. During the same 12-month period, the
Standard & Poor's 500 Composite Index (S&P 500), a popular, unmanaged index of
common stock performance, had a return of +1.31%. A discussion of some of the
factors which impacted the Fund's performance relative to the S&P 500 is
included in the Portfolio Performance and Strategy section of this letter.
Complete performance data may be found on pages three and four of this report.
Economic Environment
The economic expansion, about to enter its fifth year, has gained firmer
underpinnings as employers have been stepping up hiring levels. Increased
employment, stronger capital spending by businesses, and strengthening overseas
economies resulted in 4% real (adjusted for inflation) gross domestic product
growth in 1994. Interest rates rose significantly in 1994, which should help
restrain, but not curtail, the economic expansion. Based on improving economic
fundamentals both here and abroad, we expect the business expansion to continue
well into 1995.
Stock Market
The stock market proved volatile in 1994, influenced by both a strengthening
economy and uncertainty over interest rates. Although the stronger economy has
been beneficial to corporate earnings, higher interest rates have negatively
impacted price-to-earnings multiples, or stock valuations. Given our expectation
of further upward pressure on short-term interest rates as the Federal Reserve
continues to lean against the current economic expansion, we believe the stock
market will have difficulty sustaining any significant improvement. When
interest rates finally stabilize, however, we expect the stock market to
benefit, given our continuing outlook for improved corporate earnings.
Portfolio Performance and Strategy
The Fund's performance was negatively impacted from an overweighting in the
entertainment area, especially in gaming stocks such as Promus Cos. which came
under significant pressure due to a slowdown in the rate of new jurisdictions
approving gaming licenses. These delays appear to have been temporary as the
pace of license approvals is now accelerating. The underweighting in consumer
staples such as food and household products also hurt performance, since these
sectors outperformed the S&P 500 during the year as investors focused on the
potential for slower economic growth, given the significant rise in interest
rates during the year.
The Fund benefited from its overweighting in technology as represented by
computer software, electronics and telecommunications. Companies such as
Microsoft (a personal computer software company), Intel (a semiconductor
manufacturer), and Newbridge Network (a telecommunications equipment company)
are representative holdings of companies that we believe have good earnings
momentum. However, some positions in technology are being reduced on price
strength due to their superior performance relative to the S&P 500 during the
second half of 1994.
<PAGE>
LETTER TO SHAREHOLDERS- continued
We continue to seek stocks of companies which are generating above-average
earnings momentum and are selling at reasonable price-to-earnings multiples.
Other factors we continue to emphasize are a company's management and overall
financial strength. Our biggest concentrations are in the technology areas
mentioned above. Other significant weightings are entertainment and financial
institutions. The Fund's foreign weighting has been reduced to focus more on
U.S. stocks with stronger earnings fundamentals.
We appreciate your support and welcome any questions or comments you may
have.
Respectfully,
A 1 1/2" by 1 5/8" photo of A. Keith Brodkin, Chairman and President.
A 1 1/2" by 1 5/8" photo of Paul M. McMahon, Portfolio Manager.
A. Keith Brodkin Paul M. McMahon
Chairman and President Portfolio Manager
January 20, 1995
PORTFOLIO MANAGER PROFILE
Paul McMahon joined the MFS Research Department in 1981 as an Industry
Specialist. A graduate of Holy Cross College and the Amos Tuck School of
Business Administration of Dartmouth College, he was named Investment Officer in
1983; Assistant Vice President - Investments in 1984; Vice President -
Investments in 1986; and Senior Vice President and Portfolio Manager of MFS
Growth Opportunities Fund, formerly MFS Capital Development Fund, in 1992. Mr.
McMahon also manages the MFS/Sun Life Capital Appreciation Series Trust.
<PAGE>
OBJECTIVE AND POLICIES
The Fund's investment objective is to seek growth of capital. Dividend income,
if any, is incidental to the Fund's objective. Generally, emphasis is placed
upon companies believed to possess above-average growth opportunities. The Fund
invests primarily in common stocks, but may seek appreciation in other types of
securities, including fixed-income securities, convertible bonds, convertible
preferred stocks and warrants.
TAX FORM SUMMARY
In January 1995 shareholders will be mailed a Tax Form Summary reporting the
federal tax status of all distributions paid during the calendar year 1994.
DIVIDENDS RECEIVED DEDUCTION
For the year ended December 31, 1994, the amount of distributions from income
eligible for the 70% dividends-received deduction for corporations came to 100%.
PERFORMANCE
The following information illustrates the historical performance of MFS Growth
Opportunities Fund Class A shares in comparison to various market indicators.
Fund results reflect the deduction of the 5.75% maximum sales charge. Benchmark
comparisons are unmanaged and do not reflect any fees or expenses. You cannot
invest in an index. All results reflect the reinvestment of all dividends and
capital gains.
Please note that effective September 7, 1993, Class B shares were offered.
Information on Class B share performance appears on the next page.
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(Over the 5-Year Period Ended December 31, 1994)
Line graph representing the growth of a $10,000 investment the 5-year period
ended December 31, 1994. The graph is scaled from $8,000 to $18,000 in $2,000
segments. The years are marked from 1990 to 1994. There are three lines drawn to
scale. One is a solid line representing MFS Growth Opportunities Fund Class A, a
second line of short dashes represents the S&P 500, and a third line of long
dashes represents the Consumer Price Index.
MFS Growth Opportunities
Fund Class A $13,231
S&P 500 $15,160
Consumer Price Index $11,872
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(Over the 10-Year Period Ended December 31, 1994)
Line graph representing the growth of a $10,000 investment for the 10-year
period ended December 31, 1994. The graph is scaled from $0 to $50,000 in
$10,000 segments. The years are marked from 1985 to 1994. There are three lines
drawn to scale. One is a solid line representing MFS Growth Opportunities Fund
Class A, a second line of short dashes represents the S&P 500, and a third line
of long dashes represents the Consumer Price Index.
MFS Growth Opportunities
Fund Class A $25,706
S&P 500 $38,268
Consumer Price Index $14,214
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
Life of Class
through
1 Year 3 Years 5 Years 12/31/94
==================================================================================================
<S> <C> <C> <C> <C>
MFS Growth Opportunities Fund (Class A) including
5.75% sales charge -9.70% +4.17% +5.77% + 9.91%
- --------------------------------------------------------------------------------------------------
MFS Growth Opportunities Fund (Class A) at net asset value -4.15% +6.25% +7.03% +10.56%
- --------------------------------------------------------------------------------------------------
MFS Growth Opportunities Fund (Class B) with CDSC<F1> -8.46% -- -- - 4.15%<F2>
- --------------------------------------------------------------------------------------------------
MFS Growth Opportunities Fund (Class B) without CDSC -4.96% -- -- - 1.68%<F2>
- --------------------------------------------------------------------------------------------------
Average growth fund -2.15% +5.39% +8.59% 12.55%
- --------------------------------------------------------------------------------------------------
S&P 500 Index +1.31% +6.26% +8.68% 14.36%
- --------------------------------------------------------------------------------------------------
Consumer Price Index<F3> +2.67% +2.78% +3.49% 3.58%
- --------------------------------------------------------------------------------------------------
<FN>
<F1> These returns reflect the current maximum Class B CDSC of 4%.
<F2> For the period from the commencement of offering of Class B shares,
September 7, 1993 to December 31, 1994.
<F3> The Consumer Price Index is a popular measure of change in prices.
</TABLE>
In the above table, we have included the average annual total returns of all
growth funds (including the Fund) tracked by Lipper Analytical Services, Inc.
(an independent firm which reports mutual fund performance) for the applicable
time periods (481, 284, 226 and 132 funds for the 1-, 3-, 5- and 10-year periods
ended December 31, 1994, respectively). Because these returns do not reflect any
applicable sales charges, we have also included the Fund's results at net asset
value (no sales charge) for comparison.
All results are historical and, therefore, are not an indication of future
results. The principal value and income return of an investment in a mutual fund
will vary with changes in market conditions, and shares, when redeemed, may be
worth more or less than their original cost.
All Class A share results reflect the applicable expense subsidy which is
explained in the Notes to Financial Statements. Had the subsidy not been in
effect, the results would have been less favorable. The subsidy may be rescinded
at any time.
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS - December 31, 1994
Common Stocks - 94.3%
================================================================================
Issuer Shares Value
- --------------------------------------------------------------------------------
<S> <C> <C>
U.S. Common Stocks - 84.1%
Aerospace - 1.9%
McDonnell Douglas Corp. 80,300 $ 11,402,600
- --------------------------------------------------------------------------------
Automotive - 2.2%
APS Holding Corp., "A"<F1> 225,000 $ 6,356,250
Harley-Davidson, Inc. 242,400 6,787,200
-------------
$13,143,450
- --------------------------------------------------------------------------------
Banks and Credit Companies - 0.5%
Norwest Corp. 122,000 $ 2,851,750
- --------------------------------------------------------------------------------
Business Services - 1.6%
Ceridian Corp.<F1> 350,000 $ 9,406,250
- --------------------------------------------------------------------------------
Cellular Phones - 3.9%
AirTouch Communications, Inc.<F1> 350,000 $ 10,193,750
LIN Broadcasting Corp.<F1> 95,000 12,682,500
-------------
$ 22,876,250
- --------------------------------------------------------------------------------
Chemicals - 2.5%
Geon Co. 167,100 $ 4,574,362
Methanex Corp.<F1> 400,000 5,200,000
Union Carbide Corp. Holding Co. 175,000 5,140,625
-------------
$ 14,914,987
- --------------------------------------------------------------------------------
Computer Software - 9.5%
Cadence Design Systems, Inc.<F1> 285,000 $ 5,878,125
Compaq Computer Corp.<F1> 150,000 5,925,000
Compuware Corp.<F1> 190,000 6,840,000
Electronic Arts, Inc.<F1> 617,200 11,881,100
Informix Corp.<F1> 160,000 5,140,000
Microsoft Corp.<F1> 284,200 17,371,725
Sybase, Inc.<F1> 70,000 3,640,000
-------------
$ 56,675,950
- --------------------------------------------------------------------------------
Consumer Goods and Services - 4.1%
Colgate-Palmolive Co. 62,200 $ 3,941,925
Philip Morris Cos., Inc. 260,000 14,950,000
RJR Nabisco Holdings Corp.<F1> 955,700 5,256,350
-------------
$24,148,275
- --------------------------------------------------------------------------------
Containers - 1.3%
Stone Container Corp.<F1> 432,000 $ 7,452,000
- --------------------------------------------------------------------------------
Electrical Equipment - 1.4%
General Electric Co. 160,000 $ 8,160,000
- --------------------------------------------------------------------------------
Electronics - 7.0%
Analog Devices, Inc. 200,000 $ 7,025,000
Applied Materials, Inc.<F1> 130,000 5,492,500
Intel Corp. 260,000 16,607,500
LSI Logic Corp.<F1> 150,000 6,056,250
Motorola, Inc. 112,600 6,516,725
-------------
$ 41,697,975
- --------------------------------------------------------------------------------
Entertainment - 6.3%
Argosy Gaming Corp.<F1> 286,800 $ 3,405,750
Mirage Resorts, Inc.<F1> 500,000 10,250,000
National Gaming Corp.<F1> 27,500 330,000
Promus Cos., Inc.<F1> 750,000 23,250,000
-------------
$ 37,235,750
- --------------------------------------------------------------------------------
<PAGE>
PORTFOLIO OF INVESTMENTS - Continued
Common Stocks - continued
- --------------------------------------------------------------------------------
Issuer Shares Value
- --------------------------------------------------------------------------------
U.S. Common Stocks - continued
Financial Institutions - 7.9%
Dean Witter Discover & Co., Inc. 200,000 $ 6,775,000
Franklin Resources, Inc. 180,000 6,412,500
GFC Financial, Corp. 210,000 6,667,500
MBNA Corp. 260,000 6,077,500
Schwab (Charles) Corp. 430,000 14,996,250
United Asset Management Corp. 165,000 6,084,375
-------------
$ 47,013,125
- --------------------------------------------------------------------------------
Forest and Paper Products - 1.5%
Boise Cascade Corp. 97,100 $ 2,597,425
Georgia-Pacific Corp. 85,000 6,077,500
-------------
$ 8,674,925
- --------------------------------------------------------------------------------
Machinery - 4.5%
Caterpillar, Inc. 270,000 $ 14,883,750
Deere & Co., Inc. 180,000 11,925,000
-------------
$ 26,808,750
- --------------------------------------------------------------------------------
Medical and Health Products - 1.0%
Johnson & Johnson 104,000 $ 5,694,000
- --------------------------------------------------------------------------------
Medical and Health Technology and Services - 4.4%
Columbia HCA Healthcare Corp. 130,000 $ 4,745,000
Genesis Health Ventures, Inc.<F1> 250,000 7,906,250
Manor Care, Inc. 358,200 9,805,725
United Healthcare Corp. 82,500 3,722,813
-------------
$ 26,179,788
- --------------------------------------------------------------------------------
Metals and Minerals - 1.8%
Allegheny Ludlum Corp. 192,300 $ 3,605,625
Minerals Technologies, Inc. 250,000 7,312,500
-------------
$ 10,918,125
- --------------------------------------------------------------------------------
Precious Metals and Minerals - 0.4%
Santa Fe Pacific Gold Co.<F1> 169,597 $ 2,183,561
- --------------------------------------------------------------------------------
Oils - 4.2%
Burlington Resources, Inc. 200,000 $ 7,000,000
Enron Oil & Gas Co. 266,800 5,002,500
Mitchell Energy & Development Corp. 476,700 8,938,125
Seagull Energy Corp.<F1> 200,000 3,825,000
-------------
$ 24,765,625
- --------------------------------------------------------------------------------
Photographic Products - 1.2%
Eastman Kodak Co. 150,000 $ 7,162,500
- --------------------------------------------------------------------------------
Pollution Control - 3.5%
Browning-Ferris Industries 198,700 $ 5,638,113
WMX Technologies, Inc. 575,000 15,093,750
-------------
$ 20,731,863
- --------------------------------------------------------------------------------
Railroads - 0.9%
Southern Pacific Rail Corp.<F1> 300,000 $ 5,437,500
- --------------------------------------------------------------------------------
Restaurants and Lodging - 2.3%
Brinker International, Inc.<F1> 231,700 $ 4,199,563
Hospitality Franchise Systems, Inc.<F1> 275,000 7,287,500
Host Marriott Corp.<F1> 200,000 1,925,000
-------------
$ 13,412,063
- --------------------------------------------------------------------------------
<PAGE>
PORTFOLIO OF INVESTMENTS - Continued
Common Stocks - continued
- --------------------------------------------------------------------------------
Issuer Shares Value
- --------------------------------------------------------------------------------
U.S. Common Stocks - continued
Retail - 5.7%
Federated Department Stores<F1> 400,000 $ 7,700,000
Hechinger Corp., "A" 200,000 2,325,000
Home Depot, Inc. 65,000 2,990,000
Intelligent Electronics, Inc. 400,000 3,200,000
Lowes Cos., Inc. 100,000 3,475,000
Office Depot, Inc.<F1> 390,000 9,360,000
Tandy Corp 100,000 5,012,500
------------
$ 34,062,500
- --------------------------------------------------------------------------------
Telecommunications - 2.6%
Bay Networks, Inc.<F1> 180,000 $ 5,310,000
Cisco Systems, Inc.<F1> 60,800 2,135,600
Newbridge Networks Corp.<F1> 215,100 8,227,575
------------
$ 15,673,175
- --------------------------------------------------------------------------------
Total U.S. Common Stocks (Identified Cost, $451,052,992) $498,682,737
- --------------------------------------------------------------------------------
Foreign Stocks - 10.2%
Argentina - 0.5%
YPF S.A., ADR (Oils) 150,000 $ 3,206,250
- --------------------------------------------------------------------------------
Canada - 0.4%
Renaissance Energy Ltd., ADR<F1> 133,300 $ 2,579,923
- --------------------------------------------------------------------------------
Denmark - 1.5%
Tele Danmark, ADR (Utilities-Telephone)<F1><F2> 350,000 $ 8,925,000
- --------------------------------------------------------------------------------
Finland - 1.3%
Nokia AB (Telecommunications) 26,000 $ 3,845,991
Nokia Corp., ADR (Telecommunications) 52,000 3,900,000
------------
$ 7,745,991
- --------------------------------------------------------------------------------
Hong Kong - 0.8%
Peregrine Investment Holdings (Finance) 3,800,000 $ 4,469,433
- --------------------------------------------------------------------------------
Spain - 0.8%
Acerinox (Iron/Steel) 46,000 $ 4,808,058
- --------------------------------------------------------------------------------
Sweden - 1.7%
Astra AB, "B" (Medical and Health Products) 325,000 $ 8,293,719
TV 4 AB (Broadcasting)<F1> 68,100 1,513,170
------------
$ 9,806,889
- --------------------------------------------------------------------------------
Switzerland - 1.2%
Publicitas (Advertising)<F1> 8,000 $ 7,123,748
- --------------------------------------------------------------------------------
United Kingdom - 2.0%
Reuters Holdings PLC, ADR (Printing and
Publishing)<F2> 265,000 $ 11,626,875
- --------------------------------------------------------------------------------
Total Foreign Stocks (Identified Cost, $57,431,996) $ 60,292,167
- --------------------------------------------------------------------------------
Total Common Stocks (Identified Cost, $508,484,988) $558,974,904
- --------------------------------------------------------------------------------
<PAGE>
PORTFOLIO OF INVESTMENTS - continued
Convertible Bond - 0.3%
================================================================================
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------
Argosy Gaming Corp., 12s, 2001 (Identified
Cost, $1,692,720) $ 1,676 $ 1,592,200
- --------------------------------------------------------------------------------
Short-Term Obligations - 3.9%
================================================================================
Federal Farm Credit Bank, due 1/19/95 $ 2,200 $ 2,193,466
Federal Home Loan Mortgage Corp., due 1/03/95 10,000 9,996,789
Federal National Mortgage Assn., due 1/18/95 1,600 1,595,625
Student Loan Marketing Assn., due 1/05/95 9,100 9,094,277
- --------------------------------------------------------------------------------
Total Short-Term Obligations, at Amortized Cost $ 22,880,157
- --------------------------------------------------------------------------------
Total Investments (Identified Cost, $533,057,865) $583,447,261
Other Assets, Less Liabilities - 1.5% 8,979,101
================================================================================
Net Assets - 100.0% $592,426,362
- --------------------------------------------------------------------------------
<FN>
<F1> Non-income producing security.
<F2> Restricted security.
</FN>
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
- --------------------------------------------------------------------------------
December 31, 1994
- --------------------------------------------------------------------------------
Assets:
Investments, at value (identified
cost, $533,057,865) $583,447,261
Cash 103,443
Net receivable for forward foreign
currency exchange contracts purchased 145,087
Net receivable for foreign currency
exchange contracts sold 1,092,258
Receivable for investments sold 13,064,033
Receivable for Fund shares sold 692,999
Dividends and interest receivable 970,031
Other assets 14,585
------------
Total assets $599,529,697
------------
Liabilities:
Distributions payable $ 1,846,903
Payable for investments purchased 4,585,851
Payable for Fund shares reacquired 192,335
Payable to affiliates -
Management fee 13,063
Shareholder servicing agent fee 49,055
Distribution fee 119
Accrued expenses and other liabilities 416,009
------------
Total liabilities $ 7,103,335
------------
Net assets $592,426,362
============
Net assets consist of:
Paid-in capital $544,507,003
Unrealized appreciation on investments
and translation of assets and
liabilities in foreign currencies 51,625,787
Accumulated distributions in excess of net
realized gain on investments and
foreign currency transactions (2,720,891)
Accumulated distributions in
excess of net investment income
(985,537)
------------
Total $592,426,362
============
Shares of beneficial interest outstanding 58,250,092
============
Class A shares:
Net asset value and redemption
price per share
(net assets of $589,260,470/57,936,082 shares
of beneficial interest outstanding) $10.17
======
Offering price per share (100/94.25) $10.79
Class B shares:
Net asset value, redemption price
and offering price per share
(net assets of $3,165,892/314,010 shares
of beneficial interest outstanding) $10.08
======
On sales of $50,000 or more, the offering price of Class A shares is reduced.
A contingent deferred sales charge may be imposed on redemptions of Class A
and Class B shares.
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Statement of Operations
- --------------------------------------------------------------------------------
Year Ended December 31, 1994
- --------------------------------------------------------------------------------
Net investment income:
Income -
Dividends (net of foreign taxes withheld of $2,075) $ 6,112,101
Interest 739,941
------------
Total investment income $ 6,852,042
------------
Expenses -
Management fee $ 2,779,813
Trustees' compensation 52,384
Shareholder servicing agent fee (Class A) 921,514
Shareholder servicing agent fee (Class B) 5,361
Distribution and service fee (Class A) 1,492,867
Distribution and service fee (Class B) 24,368
Custodian fee 280,141
Postage 81,170
Printing 71,551
Auditing fees 39,157
Legal fees 5,793
Miscellaneous 401,400
------------
Total expenses $ 6,155,519
Reduction of expenses by distributor (638,658)
------------
Net expenses $ 5,516,861
------------
Net investment income $ 1,335,181
------------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $ 46,346,780
Foreign currency transactions (4,286,525)
------------
Net realized gain on investments $ 42,060,255
------------
Change in unrealized appreciation (depreciation) -
Investments $(72,081,497)
Translation of assets and liabilities in foreign currencies 1,365,640
------------
Net unrealized loss on investments $(70,715,857)
------------
Net realized and unrealized loss on investments
and foreign currency $(28,655,602)
------------
Decrease in net assets from operations $(27,320,421)
============
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------------------------------------
Year Ended December 31, 1994 1993
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 1,335,181 $ 4,165,432
Net realized gain on investments and foreign currency transactions 42,060,255 75,297,395
Net unrealized gain (loss) on investments and foreign currency transactions (70,715,857) 25,343,362
------------- -------------
Increase (decrease) in net assets from operations $ (27,320,421) $ 104,806,189
------------- -------------
Distributions declared to shareholders -
From net investment income (Class A) $ (724,008) $ (4,211,067)
From net realized gain on investments and foreign currency transactions (44,286,419) (72,942,832)
In excess of net investment income (Class A) (985,537) (868,587)
In excess of net investment income (Class B) -- (1,695)
In excess of net realized gain on investments and foreign currency
transactions (2,720,891) --
------------- -------------
Total distributions declared to shareholders $ (48,716,855) $ (78,024,181)
------------- -------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 30,868,624 $ 32,427,738
Net asset value of shares issued to shareholders in reinvestment of
distributions 46,865,238 74,967,592
Cost of shares reacquired (119,914,672) (117,617,110)
------------- -------------
Decrease in net assets from Fund share transactions $ (42,180,810) $ (10,221,780)
------------- -------------
Total increase (decrease) in net assets $(118,218,086) $ 16,560,228
Net assets:
At beginning of period 710,644,448 694,084,220
------------- -------------
At end of period (including accumulated distributions in excess
of undistributed net investment income of $985,537 and
$174,440, respectively) $ 592,426,362 $ 710,644,448
============= =============
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended December 31, 1994 1993 1992 1991 1990
- ------------------------------------------------------------------------------------------------------------------------------------
Class A
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $11.56 $11.17 $10.75 $ 9.97 $10.93
Income from investment operations<F3> -
Net investment income<F6> $ 0.02 $ 0.07 $ 0.15 $ 0.24 $ 0.30
Net realized and unrealized gain (loss) on investments (0.50) 1.73 0.67 1.94 (0.77)
Total from investment operations $(0.48) $ 1.80 $ 0.82 $ 2.18 $(0.47)
Less distributions declared to shareholders -
From net investment income $(0.01) $(0.07) $(0.14) $(0.18) $(0.33)
In excess of net investment income (0.02) (0.02) -- -- --
From net realized gain on investments (0.83) (1.32) (0.26) (1.22) (0.16)<F5>
In excess of net realized gain on investments (0.05) -- -- -- --
Total distributions declared to shareholders $(0.91) $(1.41) $(0.40) $(1.40) $(0.49)
Net asset value - end of period $10.17 $11.56 $11.17 $10.75 $ 9.97
Total return<F4> (4.15)% 16.19% (8.60)% 9.29% (4.57)%
Ratios (to average net assets)/Supplemental data<F6>:
Expenses 0.86% 0.84% 0.89% 0.88% 0.80%
Net investment income 0.21% 0.60% 1.40% 2.14% 2.91%
Portfolio turnover 78% 0.79% 102% 131% 89%
Net assets at end of period (000 omitted) $589,260 $709,839 $739,791 $739,791 $687,847
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended December 31, 1989 1988 1987<F1>
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $10.96 $10.81 $13.41
Income from investment operations<F3> -
Net investment income<F6> $0.36 $ 0.22 $ 0.11
Net realized and unrealized gain (loss) on investments 2.74 0.76 (2.13)
Total from investment operations $3.10 $ 0.98 $(2.02)
Less distributions declared to shareholders -
From net investment income $(0.36) $(0.19) $(0.11)
In excess of net investment income -- -- --
From net realized gain on investments (2.77) (0.64) (0.47)
In excess of net realized gain on investments -- -- --
Total distributions declared to shareholders $(3.13) $(0.83) $(0.58)
Net asset value - end of period $10.93 $10.96 $10.81
Total return<F4> 28.23% 8.90% (20.45)%<F2>
Ratios (to average net assets)/Supplemental data<F6>:
Expenses 0.77% 0.86% 0.72%<F2>
Net investment income 2.79% 1.90% 1.08%<F2>
Portfolio turnover 0.83% 68% 40%
Net assets at end of period (000 omitted) $805,702 $767,924 $834,359
<FN>
<F1> For the nine months ended December 31, 1987.
<F2> Annualized.
<F3> The per share data for the periods subsequent to December 31, 1992 is based
on average shares outstanding for both Class A and Class B shares.
<F4> Total returns for Class A shares do not include the applicable sales charge
(except for reinvested dividends prior to March 1, 1991). If the charge had
been included, the results would have been lower.
<F5> Includes a per share distribution from paid-in capital of $0.0006.
<F6> The distributor did not impose a portion of its distribution fee,
attributable to Class A shares, for the periods indicated. If this fee had
been incurred by Class A shareholders, the net investment income per share
and the ratios would have been:
<CAPTION>
1994 1993 1992 1991 1990
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net investment income $0.01 $0.07 -- -- --
Ratios (to average net assets):
Expenses 0.96% 0.87% -- -- --
Net investment income 0.11% 0.56% -- -- --
<CAPTION>
1989 1988 1987<F1>
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net investment income -- -- --
Ratios (to average net assets):
Expenses -- -- --
Net investment income -- -- --
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
Year Ended Period Ended
Year Ended March 31, December 31, December 31,
--------------------------- -------------------------------
1987 1986 1985 1994 1993<F4>
- ----------------------------------------------------------------------------------------------------------
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 $13.51 $10.77 $10.44 $11.53 $12.52
------ ------ ------ ------ ------
Income from investment operations<F2>--
Net investment income (loss) $ 0.17 $ 0.22 $ 0.30 $(0.08) $ --
Net realized and unrealized gain
(loss) on investments 1.20 3.63 0.33 (0.49) 0.36
------ ------ ------ ------ ------
Total from investment operations $1.37 $ 3.85 $ 0.63 $(0.57) $ 0.36
------ ------ ------ ------ ------
Less distributions declared to
shareholders --
From net investment income $(0.17) $(0.22) $(0.30) $ -- $ --
In excess of net investment income -- -- -- -- (0.03)
From net realized gain on investments (1.30) (0.89) -- (0.83) (1.32)
In excess of net realized
gain on investments -- -- -- (0.05) --
------ ------ ------ ------ ------
Total distributions
declared to shareholers $(1.47) $(1.11) $(0.30) $(0.88) $(1.35)
------ ------ ------ ------ ------
Net asset value -- end of period $13.41 $13.51 $10.77 $10.08 $11.53
====== ====== ====== ====== ======
Total return<F3> 11.57% 35.92% 5.93% (4.96)% 9.29%<F1>
Ratios (to average net assets)/Supplemental data:
Expenses 0.71% 0.71% 0.75% 1.81% 1.33%<F1>
Net investment income (loss) 1.28% 1.85% 2.90% (0.70)% 0.00%<F1>
Portfolio turnover 109% 117% 101% 78% 79%
Net assets at end of period
(000 omitted) $1,090,764 $989,980 $712,551 $3,166 $ 805
<FN>
<F1> Annualized.
<F2> The per share data for the periods subsequent to December 31, 1992 is based
on average shares outstanding for both Class A and Class B shares.
<F3> Total returns for Class A shares do not include the applicable sales charge
(except for reinvested dividends prior to March 1, 1991). If the charge had
been included, the results would have been lower.
<F4> For the period from the commencement of offering of Class B shares,
September 7, 1993 to December 31, 1993.
</TABLE>
See notes to financial statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(1) Business and Organization
MFS Growth Opportunities Fund (the Fund) was 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 - Equity securities
listed on securities exchanges or reported through the NASDAQ system are valued
at last sale prices. Unlisted equity securities or listed equity securities for
which last sale prices are not available are valued at last quoted bid prices.
Debt securities (other than short-term obligations which mature in 60 days or
less), including listed issues and forward contracts, are valued on the basis of
valuations furnished by dealers or by a pricing service with consideration to
factors such as institutional-size trading in similar groups of securities,
yield, quality, coupon rate, maturity, type of issue, trading characteristics
and other market data, without exclusive reliance upon exchange or
over-the-counter prices. Short-term obligations, which mature in 60 days or
less, are valued at amortized cost, which approximates value. Non-U.S. dollar
denominated short-term obligations are valued at amortized cost as calculated in
the base currency and translated into U.S. dollars at the closing daily exchange
rate. Futures contracts, options and options on futures contracts listed on
commodities exchanges are valued at closing settlement prices. Over-the-counter
options are valued by brokers through the use of a pricing model which takes
into account closing bond valuations, implied volatility and short-term
repurchase rates. Securities for which there are no such quotations or
valuations are valued at fair value as determined in good faith by or at the
direction of the Trustees.
Repurchase Agreements - The Fund may enter into repurchase agreements with
institutions that the Fund's investment adviser has determined are creditworthy.
Each repurchase agreement is recorded at cost. The Fund requires that the
securities purchased in a repurchase transaction be transferred to the custodian
in a manner sufficient to enable the Fund to obtain those securities in the
event of a default under the repurchase agreement. The Fund monitors, on a daily
basis, the value of the securities transferred to ensure that the value,
including accrued interest, of the securities under each repurchase agreement is
greater than amounts owed to the Fund under each such repurchase agreement.
Foreign Currency Translation - Investment valuations, other assets, and
liabilities initially expressed in foreign currencies are converted each
business day into U.S. dollars based upon current exchange rates. Purchases and
sales of foreign investments and income and expenses are converted into U.S.
dollars based upon currency exchange rates prevailing on the respective dates of
such transactions. Gains and losses attributable to foreign currency exchange
rates on sales of securities are recorded for financial statement purposes as
net realized gains and losses on investments. Gains and losses attributable to
foreign exchange rate movements on income and expenses are recorded for
financial statement purposes as foreign currency transaction gains and losses.
That portion of both realized and unrealized gains and losses on investments
that results from fluctuations in foreign currency exchange rates is not
separately disclosed.
Written Options - The Fund may write covered call or put options for which
premiums are received and are recorded as liabilities, and are subsequently
adjusted to the current value of the options written. Premiums received from
writing options which expire are treated as realized gains. Premiums received
from writing options which are exercised or are closed are offset against the
proceeds or amount paid on the transaction to determine the realized gain or
loss. If a put option is exercised, the premium reduces the cost basis of the
security purchased by the Fund. The Fund, as writer of an option, may have no
control over whether the underlying securities may be sold (call) or purchased
(put) and, as a result, bears the market risk of an unfavorable change in the
price of the securities underlying the written option. In general, written call
options may serve as a partial hedge against decreases in value in the
underlying securities to the extent of the premium received. Written options may
also be used as a part of an income producing strategy reflecting the view of
the Fund's management on the direction of interest rates.
Futures Contracts - The Fund may enter into stock index futures contracts for
the delayed delivery of securities or contracts based on financial indices at a
fixed price on a future date. In entering such contracts, the Fund is required
to deposit either in cash or securities an amount equal to a certain percentage
of the contract amount. Subsequent payments are made or received by the Fund
each day, depending on the daily fluctuations in the value of the underlying
security, and are recorded for financial statement purposes as unrealized gains
or losses by the Fund. The Fund's investment in futures contracts is designed to
hedge against anticipated future changes in interest rates or securities prices.
The Fund may also invest in futures contracts for non-hedging purposes. Should
interest rates or securities prices move unexpectedly, the Fund may not achieve
the anticipated benefits of the futures contracts and may realize a loss.
Forward Foreign Currency Exchange Contracts - The Fund may enter into forward
foreign currency exchange contracts for the purchase or sale of a specific
foreign currency at a fixed price on a future date. Risks may arise upon
entering these contracts from the potential inability of counterparties to meet
the terms of their contracts and from unanticipated movements in the value of a
foreign currency relative to the U.S. dollar. The Fund will enter into forward
contracts for hedging purposes as well as for non-hedging purposes. For hedging
purposes, the Fund may enter into contracts to deliver or receive foreign
currency it will receive from or require for its normal investment activities.
It may also use contracts in a manner intended to protect foreign currency
denominated securities from declines in value due to unfavorable exchange rate
movements. For non-hedging purposes, the Fund may enter into contracts with the
intent of changing the relative exposure of the Fund's portfolio of securities
to different currencies to take advantage of anticipated changes. The forward
foreign currency exchange contracts are adjusted by the daily exchange rate of
the underlying currency and any gains or losses are recorded for financial
statement purposes as unrealized until the contract settlement date.
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 both financial statement
and tax reporting purposes as required by federal income tax regulations.
Dividend income is recorded on the ex-dividend date for dividends received in
cash. Dividend payments received in additional securities are recorded on the
ex-dividend date in an amount equal to the value of the security on such date.
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.
Foreign taxes have been provided for on interest and dividend income earned on
foreign investments in accordance with the applicable country's tax rates and to
the extent unrecoverable are recorded as a reduction of investment income.
Distributions to shareholders are recorded on the ex-dividend date.
The Fund distinguishes between distributions on a tax basis and a financial
reporting basis and requires that only distributions in excess of tax basis
earnings and profits are reported in the financial statements as a return of
capital. Differences in the recognition or classification of income between the
financial statements and tax earnings and profits which result in temporary
over-distributions for financial statement purposes, are classified as
distributions in excess of net investment income or accumulated net realized
gains. During the year ended December 31, 1994, $436,733 was reclassified from
accumulated undistributed net investment income and $416,749 and $19,984 were
reclassified to accumulated net realized gain on investments and paid-in
capital, respectively, due to differences between book and tax accounting for
currency transactions. This change had no effect on the net assets or net asset
value per share.
Multiple Classes of Shares of Beneficial Interest - The Fund offers Class A and
Class B shares. The two classes of shares differ in their shareholder servicing
agent, distribution and service fees. Shareholders of each class also bear
certain expenses that pertain only to that particular class. 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, including distribution and shareholder servicing fees.
(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, computed and paid monthly at an annual rate of 0.43% of average
daily net assets, amounted to $2,779,813.
The Fund pays no compensation directly to its Trustees who are officers of the
investment adviser, or to officers of the Fund, all of whom receive remuneration
for their services to the Fund from MFS. Certain of the officers and Trustees of
the Fund are officers or directors of MFS, MFS Fund Distributors, Inc. (MFD) and
MFS Service Center, Inc. (MFSC). The Fund has an unfunded defined benefit plan
for all of its independent Trustees. Included in Trustees' compensation is a net
periodic pension expense of $15,744 for the year ended December 31, 1994.
Distributor - FSI, a wholly owned subsidiary of MFS, as distributor, received
$56,405 as its portion of the sales charge on sales of Class A shares of the
Fund. Effective January 1, 1995, MFS Financial Services, Inc. (FSI) became MFS
Fund Distributors (MFD). 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%
of its average daily net assets attributable to Class A shares annually 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 is waiving the 0.10% distribution fee for an
indefinite period. Fees incurred under the distribution plan, net of waiver,
during the year ended December 31, 1994 were 0.13% of average daily net assets
attributable to Class A shares on an annualized basis and amounted to $854,209
(of which MFD retained $520,206).
The Class B Distribution Plan provides that the Fund will pay MFD a monthly
distribution fee, equal to 0.75% per annum, and a quarterly 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. Fees incurred under the
distribution plan during the year ended December 31, 1994 were 1.00% of average
daily net assets attributable to Class B shares on an annualized basis and
amounted to $24,368 (of which MFD retained $909).
A contingent deferred sales charge is imposed on shareholder redemptions of
Class A shares, on purchases of $1 million or more, in the event of a share
redemption within twelve months following the share purchase. A contingent
deferred sales charge is imposed on shareholder redemptions of Class B shares in
the event of a share redemption within six years of purchase. MFD receives all
contingent deferred sales charges. Contingent deferred sales charges imposed
during the year ended December 31, 1994 were $3,245 and $2,336 for Class A
shares and Class B shares, respectively.
Shareholder Servicing Agent - MFSC, a wholly owned subsidiary of MFS, earned
$921,514 and $5,361 for Class A and Class B shares, respectively, 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 andClass B shares,
respectively.
(4) Portfolio Securities
Purchases and sales of investments, other than U.S. government securities,
purchased option transactions and short-term obligations, aggregated
$491,726,687 and $589,907,850, 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 $533,072,118
------------
Gross unrealized appreciation $ 78,280,646
Gross unrealized depreciation (27,905,503)
------------
Net unrealized appreciation $ 50,375,143
------------
(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>
1994 1993
Year Ended December 31, --------------------------- -------------------------
Class A Shares Shares Amount Shares Amount
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 2,325,560 $ 26,182,936 2,663,520 $ 31,578,619
Shares issued to shareholders in
reinvestment of distributions 4,590,008 46,634,106 6,483,080 74,890,947
Shares reacquired (10,394,202) (117,718,886) (9,873,230) (117,559,113)
---------- ------------ ---------- ------------
Net decrease (3,478,634) $(44,901,844) (726,630) $(11,089,547)
========== ============ ========== ============
<CAPTION>
1994 1993*
Year Ended December 31, --------------------------- -------------------------
Class B Shares Shares Amount Shares Amount
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 419,077 $ 4,685,688 67,941 $849,119
Shares issued to shareholders in
reinvestment of distributions 22,946 231,132 6,665 76,645
Shares reacquired (197,864) (2,195,786) (4,755) (57,997)
------- ----------- ------ --------
Net increase 244,159 $ 2,721,034 69,851 $867,767
======= =========== ====== ========
</TABLE>
* For the period from the commencement of offering of Class B shares, September
7, 1993, to December 31, 1993.
(6) Line of Credit
The Fund entered into an agreement which enables it to participate with other
funds managed by MFS, or an affiliate of MFS, in an unsecured line of credit
with a bank which permits borrowings up to $300 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 December 31, 1994 was $9,639.
(7) Financial Instruments
The Fund regularly trades financial instruments with off-balance sheet risk in
the normal course of its investing activities in order to manage exposure to
market risks such as interest rates and foreign currency exchange rates. These
financial instruments include written options, forward foreign currency exchange
contracts and futures contracts. The notional or contractual amounts of these
instruments represent the investment the Fund has in particular classes of
financial instruments and does not necessarily represent the amounts potentially
subject to risk. The measurement of the risks associated with these instruments
is meaningful only when all related and offsetting transactions are considered.
A summary of obligations under these financial instruments at December 31, 1994,
is as follows:
Forward Foreign Currency Exchange Contracts
<TABLE>
<CAPTION>
Net Unrealized
Settlement Contracts to Appreciation/
Date Deliver/Receive In Exchange for Contracts at Value (Depreciation)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales 1/29/95 CHF 10,698,200 $8,606,691 $ 8,191,255 $ 415,436
1/23/95 DEM 9,504,420 6,339,556 6,139,839 199,717
1/31/95 ESP 791,250,000 6,302,273 6,004,401 297,872
3/31/95 FIM 17,165,880 3,600,000 3,633,948 (33,948)
1/30/95 SEK 59,091,600 8,160,844 7,947,663 213,181
----------- ----------- ----------
$33,009,364 $31,917,106 $1,092,258
=========== =========== ==========
Purchases 2/07/95 CHF 2,000,000 $ 1,508,080 $ 1,531,838 $ 23,758
1/23/95 DEM 9,504,420 6,037,813 6,139,838 102,025
2/07/95 ESP 201,850,000 1,512,132 1,531,436 19,304
----------- ----------- ----------
$ 9,058,025 $ 9,203,112 $ 145,187
=========== =========== ==========
</TABLE>
At December 31, 1994, the Fund had sufficient cash and/or securities to cover
any commitments under these contracts.
(8) Restricted Securities
The Fund may invest not more than 10% of its total assets in securities which
are subject to legal or contractual restrictions on resale. At December 31,
1994, the Fund owned the following restricted securities (constituting 3.47% of
net assets) which may not be publicly sold without registration under the
Securities Act of 1933. The Fund does not have the right to demand that such
securities be registered. The value of these securities is determined by
valuations supplied by a pricing service or brokers.
Date of
Description Acquisition Shares Cost Value
- --------------------------------------------------------------------------------
Tele Danmark, ADR 4/28/94 350,000 $ 8,390,044 $ 8,925,000
Reuters Holdings PLC, ADR 8/27/92 - 11/6/92 265,000 7,999,504 11,626,875
----------- -----------
$16,389,548 $20,551,875
=========== ===========
Abbreviations have been used throughout this report to indicate amounts shown in
currencies other than the U.S. dollar. A list of abbreviations is shown below.
CHF=Swiss Francs FIM=Finish Markkaa
DEM=Deutsche Marks HKD=Hong Kong Dollar
ESP=Spanish Pesetas SEK=Swedish Krone
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Trustees and Shareholders of MFS Growth Opportunities Fund:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of MFS Growth Opportunities Fund as of December
31, 1994, the related statement of operations for the year then ended, the
statement of changes in net assets for the years ended December 31, 1994 and
1993, and the financial highlights for each of the years in the eleven-year
period ended December 31, 1994. 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
December 31, 1994 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 Growth
Opportunities Fund at December 31, 1994, 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
February 1, 1995
---------------------------------------------------
This report is prepared for the general information of shareholders. It is
authorized for distribution to prospective investors only when preceded or
accompanied by a current prospectus.
<PAGE>
THE MFS FAMILY OF FUNDS(R)
America's Oldest Mutual Fund Group
The members of the MFS Family of Funds are grouped below according to the types
of securities in their portfolios. For free prospectuses containing more
complete information, including the exchange privilege and all charges and
expenses, please contact your financial adviser or call the MFS Service Center
at 1-800-225-2606 any business day from 8 a.m. to 8 p.m. Eastern time. This
material should be read carefully before investing or sending money.
<TABLE>
<CAPTION>
<S> <C>
STOCK LIMITED MATURITY BOND
Massachusetts Investors Trust MFS(r) Government Limited Maturity Fund
Massachusetts Investors Growth Stock Fund MFS(r) Limited Maturity Fund
MFS(r) Capital Growth Fund MFS(r) Municipal Limited Maturity Fund
MFS(r) Emerging Growth Fund WORLD
MFS(r) Gold & Natural Resources Fund MFS(r) World Asset Allocation Fund
MFS(r) Growth Opportunities Fund MFS(r) World Equity Fund
MFS(r) Managed Sectors Fund MFS(r) World Governments Fund
MFS(r) OTC Fund MFS(r) World Growth Fund
MFS(r) Research Fund MFS(r) World Total Return Fund
MFS(r) Value Fund NATIONAL TAX-FREE BOND
STOCK AND BOND MFS(r) Municipal Bond Fund
MFS(r) Total Return Fund MFS(r) Municipal High Income Fund
MFS(r) Utilities Fund (closed to new investors)
BOND MFS(r) Municipal Income Fund
MFS(r) Bond Fund STATE TAX-FREE BOND
MFS(r) Government Mortgage Fund Alabama, Arkansas, California, Florida,
MFS(r) Government Securities Fund Georgia, Louisiana, Maryland, Massachusetts,
MFS(r) High Income Fund Mississippi, New York, North Carolina,
MFS(r) Intermediate Income Fund Pennsylvania, South Carolina Tennessee, Texas,
MFS(r) Strategic Income Fund Virginia, Washington, West Virginia
(formerly MFS(r) Income & Opportunity Fund) MONEY MARKET
MFS(r) Cash Reserve Fund
MFS(r) Government Money Market Fund
MFS(r) Money Market Fund
</TABLE>
<PAGE>
MFS(R) GROWTH
OPPORTUNITIES
FUND
500 Boylston Street BULK RATE
Boston, MA 02116 U.S. POSTAGE
PAID
NUMBER PERMIT #55638
1 BOSTON, MA
DALBAR
TOP-RATED SERVICE
MGO-2 2/95 58.5M 16/216
