[cover]
[MFS logo] Semiannual Report
June 30, 1997
MFS(R) Growth Opportunities Fund
[silhouette of man & woman in front of window]
<PAGE>
Table of Contents
Letter from the Chairman ............ 1
Portfolio Manager's Overview ...... 2
Portfolio Manager's Profile ......... 3
Fund Facts ........................ 4
Performance Summary ............... 4
Portfolio Concentration ............ 6
Portfolio of Investments ............ 7
Financial Statements ............... 12
Notes to Financial Statements ...... 19
Trustees and Officers ............... 25
Highlights
[bullet] For the six months ended June 30, 1997, Class A shares of the Fund
provided a total return at net asset value of 15.34%, Class B shares
14.93%, and Class I shares 16.59%. (See Performance Summary for more
information.)
[bullet] The Fund has benefited from an increased weighting in
large-capitalization stocks with consistent earnings growth such as
Tyco International, United Technologies, and Bristol-Myers Squibb.
[bullet] Technology, including businesses in software, semiconductors, and
networking, remains the largest sector for the Fund and added to
performance during the past six months.
[bullet] Other holdings in the Fund, such as Intel Corp., HFS, Inc., and
Wisconsin Central Transportation, underperformed the Standard & Poor's
500 Composite Index during the period, but we continue to view them as
attractive investments.
<PAGE>
Letter from the Chairman
[photo of Dear Shareholders:
A. Keith Brodkin] An unprecedented combination of generally positive
factors has helped the U.S. economy enjoy a
sustained period of relative stability and moderate
growth in which thousands of new jobs have been
created every month, inflation remains under
control, and the investment climate -- at least
until now -- has been favorable. For example, the
increased use of technology and other productivity
enhancements, as well as corporate restructuring and global competition, is
improving companies' balance sheets and helping control inflation. Meanwhile,
borrowing by corporations and governments continues to decline, while consumer
confidence is increasing, although consumer debt levels are still uncomfortably
high. While some lenders are beginning to tighten standards to address this
problem, consumer debt and personal bankruptcies continue to rise. Because of
this, plus slight declines in other indicators such as average hourly wages and
the corporate purchasing-managers index, we do not expect the rapid pace of
growth seen in the first quarter of 1997 to continue. While second-quarter
growth has slowed dramatically, we do expect the second half of the year to pick
up once again with real (inflation-adjusted) growth centering around 2-1/2%.
We have been surprised by the strength of the U.S. equity market in the
first half of 1997. Much of this is the result of continuing gains in corporate
earnings. Even as the current recovery enters its seventh year, more and more
U.S. companies have been exceeding analysts' earnings estimates. In the first
quarter of 1997, for example, two-thirds of all companies met or exceeded
analysts' expectations, a trend that could be an important indicator of the U.S.
equity market's future direction. However, while the near-term outlook for
profits is generally favorable, we believe equity valuations have risen to a
point where a cautious investment approach seems warranted.
We appreciate your support and welcome any questions or comments you may
have.
Respectfully,
/s/ A. Keith Brodkin
A. Keith Brodkin
Chairman and President
July 14, 1997
1
<PAGE>
Portfolio Manager's Overview
[photo of Dear Shareholders:
Paul M. McMahon] For the six months ended June 30, 1997, Class A
shares of the Fund provided a total return of 15.34%,
Class B shares 14.93%, and Class I shares 16.59%.
These returns, which include the reinvestment of
distributions but exclude the effects of any sales
charges, compare to a 20.60% return for the Standard
Paul M. McMahon & Poor's 500 Composite Index (the S&P 500), a
popular, unmanaged index of common stock total return
performance, for the same period.
The Fund has benefited from an increased weighting in large-capitalization
stocks with consistent earnings growth such as Tyco International, United
Technologies, and Bristol-Myers Squibb, all of which were significant performers
during the first half of the year. Tyco, which will merge with ADT Ltd. in early
July, is a diversified manufacturing company whose complementary acquisitions,
as well as its high-quality management team, could result in high earnings
growth over the next three years, adding to shareholder value.
In the technology sector, the Fund's largest, stocks in businesses such as
computer software, semiconductors, and networking added to performance during
the period, although this weighting has been reduced slightly over the past six
months. Large technology holdings such as Oracle Systems Corp. and Computer
Associates International are major beneficiaries of the deployment of
client/server technology in the corporate environment. Personal computer
companies such as Microsoft, which develops operating systems and application
software, continue to report very strong earnings growth. This sector can be
volatile at times, but we believe its high, long-term past performance results
make it attractive. It is important to emphasize that the companies in this
sector are selected individually and that the large weightings represent the
number of well-positioned companies we have identified in this area.
Other holdings in the Fund, such as Intel Corp., HFS, Inc., and Wisconsin
Central Transportation, underperformed the S&P 500 during the first half, but we
continue to view them as attractive investments. For example, HFS, Inc., which
owns a number of hotel, rental car, and real estate franchise systems, continues
to benefit from higher hotel room rates and increased occupancy. Also, the Fund
maintains a significant weighting in mid-capitalization stocks, which
significantly underperformed the S&P 500 as a group.
In selecting stocks for the Fund, we look for five key characteristics:
good earnings growth, good management, the ability to benefit from positive
secular
2
<PAGE>
Portfolio Manager's Overview - continued
trends in the economy, a good balance sheet with positive cash-flow generation,
and reasonable valuation. We regard earnings growth as important because,
ultimately, earnings drive stock prices over the long term. Good management adds
significantly to an enterprise's value by making the right strategic and
competitive decisions over time. This is why we feel it is important to visit
with corporate managements so that we may better understand their strategies and
evaluate their abilities to execute them. A good financial position and strong
cash flow from operations provide a company with the ability to take advantage
of competitive opportunities as they present themselves in the marketplace.
Trying to buy stocks at a reasonable valuation is accomplished by comparing
earnings growth to a company's price-to-earnings ratio (P/E), which helps
determine whether it is reasonable relative to the market as a whole. Stocks may
be sold when a holding violates one or more of these characteristics; for
example, if earnings begin to slow significantly, or if we believe the P/E ratio
relative to the growth rate makes a stock overvalued.
Finally, this period of moderate economic growth and inflation has provided
a positive backdrop for further growth in corporate earnings and continued
appreciation of the stock market. Cash levels have been raised as a buying
reserve should any market correction occur. We remain committed to finding the
best earnings growth available, at the most reasonable valuations, in trying to
shape the Fund for the future.
Respectfully,
/s/ Paul M. McMahon
Paul M. McMahon
Portfolio Manager
Portfolio Manager's Profile
Paul M. 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(R) Growth Opportunities Fund in 1992.
3
<PAGE>
Fund Facts
Strategy: 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.
Commencement of
investment operations: Class A: September 9, 1970
Class B: September 7, 1993
Class I: January 2, 1997
Size: $914.3 million net assets as of June 30, 1997
Performance Summary
Because mutual funds like MFS Growth Opportunities Fund are designed for
investors with long-term goals, we have provided cumulative results as well as
the average annual total returns for Class A, Class B, and Class I shares for
the applicable time periods.
Average Annual and Cumulative Total Rates of Return as of June 30, 1997
Class A Investment Results
(net asset value change including reinvested distributions)
<TABLE>
<CAPTION>
6 Months 1 Year 5 Years 10 Years
---------- --------- ---------- ---------
<S> <C> <C> <C> <C>
Cumulative Total Return +15.34% +24.69% +132.39% +203.99%
- ---------------------------- -------- ------- -------- --------
Average Annual Total Return -- +24.69% + 18.37% + 11.76%
- ---------------------------- -------- ------- -------- --------
SEC Results -- +17.53% + 16.97% + 11.10%
- ---------------------------- -------- ------- -------- --------
</TABLE>
Class B Investment Results
(net asset value change including reinvested distributions)
<TABLE>
<CAPTION>
6 Months 1 Year 5 Years 10 Years
---------- --------- ---------- ---------
<S> <C> <C> <C> <C>
Cumulative Total Return +14.93% +23.64% +124.45% +193.55%
- ---------------------------- -------- ------- -------- --------
Average Annual Total Return -- +23.64% + 17.55% + 11.37%
- ---------------------------- -------- ------- -------- --------
SEC Results -- +19.64% + 17.34% + 11.37%
- ---------------------------- -------- ------- -------- --------
</TABLE>
Class I Investment Results
(net asset value change including reinvested distributions)
<TABLE>
<CAPTION>
6 Months 1 Year 5 Years 10 Years
---------- --------- ---------- ---------
<S> <C> <C> <C> <C>
Cumulative Total Return +16.59% +24.77% +132.48% +203.99%
- ---------------------------- -------- ------- -------- --------
Average Annual Total Return -- +24.77% + 18.38% + 11.76%
- ---------------------------- -------- ------- -------- --------
</TABLE>
4
<PAGE>
Performance Summary - continued
All results are historical and assume the reinvestment of dividends and capital
gains. Investment return and principal value will fluctuate, and shares, when
redeemed, may be worth more or less than their original cost. Past performance
is no guarantee of future results.
Class A share SEC results include the maximum 5.75% sales charge. Class B share
SEC results reflect the applicable contingent deferred sales charge (CDSC),
which declines over six years as follows: 4%, 4%, 3%, 3%, 2%, 1%, 0%. Class I
shares, which became available on January 2, 1997, have no sales load or Rule
12b-1 fees and are only available to certain institutional investors.
Class B share results include the performance and the operating expenses (e.g.,
Rule 12b-1 fees) of the Fund's Class A shares for periods prior to the
commencement of offering of Class B shares. Because operating expenses
attributable to Class A shares are lower than those of Class B shares, Class B
share performance generally would have been lower than Class A share
performance. The Class A share performance included within the Class B share SEC
performance has been adjusted to reflect the CDSC generally applicable to Class
B shares rather than the initial sales charge generally applicable to Class A
shares.
Class I share results include the performance and the operating expenses (e.g.,
Rule 12b-1 fees) of the Fund's Class A shares for periods prior to the
commencement of offering of Class I shares. Because operating expenses
attributable to Class A shares are greater than those of Class I shares, Class I
share performance generally would have been higher than Class A share
performance. The Class A share performance included in the Class I share
performance has been adjusted to reflect the fact that Class I shares have no
initial sales charge.
Performance results reflect any applicable expense subsidies and waivers,
without which the results would have been less favorable. Current subsidies and
waivers may be discontinued at any time.
5
<PAGE>
Portfolio Concentration as of June 30, 1997
Top 10 Holdings
HFS, Inc.
Franchiser of hotels and real estate
companies
Microsoft Corp.
Computer software and systems company
ADT Ltd.
Commercial and residential security
company
Intel Corp.
Semiconductor manufacturer
Tyco International Ltd.
Manufacturer of fire protection, packaging,
and electronic equipment
Philip Morris Cos., Inc.
Tobacco, food, and beverage conglomerate
Computer Associates International, Inc.
Computer software company
Oracle Systems Corp.
Developer and manufacturer of database
software
Wisconsin Central Transportation Corp.
Midwestern railroad company
Promus Hotel Corp.
Hotel operator
Largest Sectors
[pie graph]
Technology 25.6%
Other Sectors 32.4%
Retailing 8.2%
Industrial Goods
& Services 8.5%
Leisure 12.5%
Miscellaneous
(Conglomerates,special
products/services) 12.8%
For a more complete breakdown, refer to the Portfolio of Investments.
6
<PAGE>
Portfolio of Investments (Unaudited) - June 30, 1997
Stocks - 95.8%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Issuer Shares Value
- ----------------------------------------------- --------- -------------
<S> <C> <C>
U.S. Stocks - 93.5%
Advertising - 0.2%
Universal Outdoor Holdings, Inc.* 55,700 $ 1,942,538
- --------------------------------------------------------------------------------
Aerospace - 2.6%
McDonnell-Douglas Corp. 151,300 $10,364,050
United Technologies Corp. 159,000 13,197,000
-------------
$23,561,050
- --------------------------------------------------------------------------------
Agricultural Products - 1.9%
AGCO Corp. 133,100 $ 4,783,281
Case Corp. 176,100 12,128,888
-------------
$16,912,169
- --------------------------------------------------------------------------------
Airlines - 0.5%
America West Holding Corp., "B"* 146,400 $ 2,122,800
Southwest Airlines Co. 108,700 2,812,613
-------------
$ 4,935,413
- --------------------------------------------------------------------------------
Banks and Credit Companies - 0.8%
Fleet/Norstar Financial Group, Inc. 112,300 $ 7,102,975
- --------------------------------------------------------------------------------
Business Services - 6.7%
AccuStaff, Inc.* 289,600 $ 6,859,900
ADT Ltd.* 909,800 30,023,400
Affiliated Computer Services, Inc., "A"* 76,600 2,144,800
Ceridian Corp.* 32,300 1,364,675
Corestaff, Inc.* 161,325 4,355,775
DST Systems, Inc.* 218,100 7,265,456
Ikon Office Solutions, Inc. 277,300 6,915,169
Sabre Group Holding, Inc.,"A"* 75,400 2,045,225
-------------
$60,974,400
- --------------------------------------------------------------------------------
Chemicals - 0.8%
Betzdearborn, Inc. 66,600 $ 4,395,600
Praxair, Inc. 57,700 3,231,200
-------------
$ 7,626,800
- --------------------------------------------------------------------------------
Computer Software - Personal Computers - 5.0%
First Data Corp. 243,300 $10,689,994
Microsoft Corp.* 277,700 35,094,337
-------------
$45,784,331
- --------------------------------------------------------------------------------
Computer Software - Services - 0.2%
Sterling Commerce, Inc.* 68,400 $ 2,248,650
- --------------------------------------------------------------------------------
Computer Software - Systems - 9.1%
Adobe Systems, Inc. 166,800 $ 5,848,425
BMC Software, Inc.* 95,400 5,282,775
Cadence Design Systems, Inc.* 583,775 19,556,462
Computer Associates International, Inc. 425,150 23,675,541
Micros Systems, Inc.* 45,300 1,902,600
Oracle Systems Corp.* 435,550 21,940,831
Synopsys, Inc.* 142,100 5,222,175
-------------
$83,428,809
- --------------------------------------------------------------------------------
Construction Services - 0.1%
Champion International Corp. 10,700 $ 591,175
- --------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
Portfolio of Investments (Unaudited) - continued
Stocks - continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Issuer Shares Value
- ----------------------------------------- ----------- -------------
<S> <C> <C>
U.S. Stocks - continued
Consumer Goods and Services - 8.4%
Colgate-Palmolive Co. 167,800 $10,948,950
Gillette Co. 60,400 5,722,900
Hertz Corp., "A"* 139,900 5,036,400
Philip Morris Cos., Inc. 612,600 27,184,125
Tyco International Ltd. 400,000 27,825,000
-------------
$76,717,375
- --------------------------------------------------------------------------------
Defense Electronics - 1.7%
Loral Space & Communications Corp.* 1,045,800 $15,687,000
- --------------------------------------------------------------------------------
Electrical Equipment - 1.5%
General Electric Co. 168,800 $11,035,300
Westinghouse Electric Corp. 115,100 2,661,688
-------------
$13,696,988
- --------------------------------------------------------------------------------
Electronics - 8.0%
AES Corp.* 84,200 $ 5,957,150
Altera Corp.* 170,700 8,620,350
Analog Devices, Inc.* 468,033 12,432,127
Intel Corp. 201,600 28,589,400
LSI Logic Corp.* 92,700 2,966,400
Microchip Technology, Inc.* 208,500 6,202,875
Xilinx, Inc.* 174,600 8,566,312
-------------
$73,334,614
- --------------------------------------------------------------------------------
Entertainment - 4.2%
Clear Channel Communications, Inc.* 75,000 $ 4,612,500
Jacor Communications, Inc., "A"* 199,700 7,638,525
LIN Television Corp.* 187,100 8,255,787
Mirage Resorts, Inc.* 391,300 9,880,325
Time Warner, Inc. 168,000 8,106,000
Univision Communications, Inc., "A"* 5,000 195,625
-------------
$38,688,762
- --------------------------------------------------------------------------------
Financial Institutions - 4.3%
Associates First Capital Corp., "A" 36,400 $ 2,020,200
Federal Home Loan Mortgage Corp. 370,100 12,722,187
Financial Federal Corp.* 135,050 2,971,100
Finova Group, Inc. 117,900 9,019,350
Franklin Resources, Inc. 89,850 6,519,741
Green Tree Financial Corp. 163,200 5,814,000
-------------
$39,066,578
- --------------------------------------------------------------------------------
Food and Beverage Products - 1.0%
PepsiCo, Inc. 248,500 $ 9,334,281
- --------------------------------------------------------------------------------
Insurance - 1.9%
Amerin Corp.* 55,800 $ 1,353,150
Chubb Corp. 103,600 6,928,250
Conseco, Inc. 115,200 4,262,400
Travelers Group, Inc. 79,400 5,007,162
-------------
$17,550,962
- --------------------------------------------------------------------------------
</TABLE>
8
<PAGE>
Portfolio of Investments (Unaudited) - continued
Stocks - continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Issuer Shares Value
- --------------------------------------------------- --------- -------------
<S> <C> <C>
U.S. Stocks - continued
Machinery - 0.7%
Deere & Co., Inc. 81,300 $ 4,461,338
Lear Corp.* 40,200 1,783,875
-------------
$ 6,245,213
- --------------------------------------------------------------------------------
Medical and Health Products - 2.3%
Bristol-Myers Squibb Co. 90,100 $ 7,298,100
Johnson & Johnson 187,700 12,083,187
Omnicare, Inc. 66,100 2,073,888
-------------
$21,455,175
- --------------------------------------------------------------------------------
Medical and Health Technology and Services - 4.9%
Genesis Health Ventures, Inc.* 78,500 $ 2,649,375
Health Management Associates, Inc., "A"* 121,600 3,465,600
HealthSouth Corp.* 353,900 8,825,381
Medtronic, Inc. 31,700 2,567,700
Oxford Health Plans, Inc.* 134,700 9,664,725
United Healthcare Corp. 346,400 18,012,800
-------------
$45,185,581
- --------------------------------------------------------------------------------
Metals and Minerals - 0.4%
Minerals Technologies, Inc. 101,100 $ 3,791,250
- --------------------------------------------------------------------------------
Oils - 1.1%
Hanover Compressor 4,200 $ 81,900
Mobil Corp. 137,400 9,600,825
-------------
$ 9,682,725
- --------------------------------------------------------------------------------
Photographic Products - 0.7%
Eastman Kodak Co. 88,200 $ 6,769,350
- --------------------------------------------------------------------------------
Railroads - 2.8%
Burlington Northern Santa Fe Railway Co. 42,100 $ 3,783,737
Wisconsin Central Transportation Corp.* 582,600 21,701,850
-------------
$25,485,587
- --------------------------------------------------------------------------------
Restaurants and Lodging - 6.6%
HFS, Inc.* 685,500 $39,759,000
Promus Hotel Corp.* 520,750 20,179,062
-------------
$59,938,062
- --------------------------------------------------------------------------------
Stores - 6.6%
Ann Taylor Stores Corp.* 129,400 $ 2,523,300
Boise Cascade Office Products Corp.* 25,200 428,400
Corporate Express, Inc.* 255,300 3,685,894
CVS Corp. 188,100 9,640,125
Duty Free International, Inc. 26,900 504,375
Linens 'N Things, Inc.* 12,600 373,275
Micro Warehouse, Inc.* 229,100 3,923,338
Office Depot, Inc.* 463,800 9,015,112
PETsMART, Inc.* 701,000 8,061,500
Rite Aid Corp. 245,000 12,219,375
Sears, Roebuck & Co. 104,400 5,611,500
Staples, Inc.* 183,400 4,264,050
-------------
$60,250,244
- --------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
Portfolio of Investments (Unaudited) - continued
Stocks - continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Issuer Shares Value
- ---------------------------------------------------------- ----------- -------------
<S> <C> <C>
U.S. Stocks - continued
Supermarkets - 1.0%
Safeway, Inc. * 189,100 $ 8,722,238
- -----------------------------------------------------------------------------------------
Telecommunications - 7.5%
3Com Corp.* 187,900 $ 8,455,500
Ascend Communications, Inc.* 214,400 8,442,000
Cisco Systems, Inc.* 184,000 12,351,000
Glenayre Technologies, Inc.* 490,900 8,038,487
Lucent Technologies, Inc. 47,100 3,394,144
Qwest Communications International, Inc.* 5,400 147,150
Tel-Save Holdings, Inc.* 120,100 1,831,525
Tel-Save Holdings, Inc.*+ 134,900 2,192,125
Teleport Communications Group, Inc., "A"* 108,600 3,705,975
Tellabs, Inc.* 44,700 2,497,613
WorldCom, Inc.* 552,530 17,680,960
-------------
$ 68,736,479
- -----------------------------------------------------------------------------------------
Total U.S. Stocks $855,446,774
- -----------------------------------------------------------------------------------------
Foreign Stocks - 2.3%
Canada - 0.7%
Canadian National Railway Co. (Railroads) 74,600 $ 3,263,750
Loewen Group, Inc. (Business Services) 26,600 924,350
Loewen Group, Inc. (Business Services)## 75,000 2,602,318
-------------
$ 6,790,418
- -----------------------------------------------------------------------------------------
Hong Kong - 0.1%
Peregrine Investment Holdings (Finance) 251,000 $ 516,774
- -----------------------------------------------------------------------------------------
Italy - 0.3%
Gucci Group Designs N.V. (Apparel and Textiles) 37,600 $ 2,420,500
- -----------------------------------------------------------------------------------------
Singapore - 0.2%
Mandarin Oriental International, Ltd.
(Restaurants and Lodgings)* 1,267,429 $ 1,647,658
- -----------------------------------------------------------------------------------------
United Kingdom - 1.0%
British Petroleum PLC, ADR (Oils) 117,200 $ 8,775,350
Central European Media Enterprises Ltd. (Television)* 24,300 631,800
-------------
$ 9,407,150
- -----------------------------------------------------------------------------------------
Total Foreign Stocks $ 20,782,500
- -----------------------------------------------------------------------------------------
Total Stocks (Identified Cost, $613,815,360) $876,229,274
- -----------------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
Portfolio of Investments (Unaudited) - continued
Short-Term Obligations - 3.9%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------- ----------------- -------------
<S> <C> <C>
Federal Home Loan Mortgage Corp., due 7/14/97 $ 7,000 $ 6,986,350
Federal National Mortgage Assn.,
due 7/07/97 - 7/18/97 24,455 24,413,842
Ford Motor Credit Corp., due 7/01/97 4,210 4,210,000
- -----------------------------------------------------------------------------------------
Total Short-Term Obligations, at Amortized Cost $ 35,610,192
- -----------------------------------------------------------------------------------------
Total Investments (Identified Cost, $649,425,552) $911,839,466
Other Assets, Less Liabilities - 0.3% 2,435,080
- -----------------------------------------------------------------------------------------
Net Assets - 100.0% $914,274,546
- -----------------------------------------------------------------------------------------
</TABLE>
*Non-income producing security.
##SEC Rule 144A restriction.
+Restricted security.
See notes to financial statements
11
<PAGE>
Financial Statements
Statement of Assets and Liabilities (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
June 30, 1997
- --------------------------------------------------------------------------------------
<S> <C>
Assets:
Investments, at value (identified cost, $649,425,552) $911,839,466
Cash 97,301
Receivable for Fund shares sold 220,627
Receivable for investments sold 7,097,162
Dividends receivable 611,124
Other assets 7,281
-------------
Total assets $919,872,961
=============
Liabilities:
Payable for Fund shares reacquired $ 1,435,443
Payable for investments purchased 3,537,706
Payable to affiliates -
Management fee 31,520
Administrative fee 1,121
Shareholder servicing agent fee 9,713
Distribution and service fee 355,416
Accrued expenses and other liabilities 227,496
-------------
Total liabilities $ 5,598,415
-------------
Net assets $914,274,546
=============
Net assets consist of:
Paid-in capital $574,114,272
Unrealized appreciation on investments 262,413,914
Accumulated undistributed net realized gain on investments and foreign
currency transactions 78,579,431
Accumulated net investment loss (833,071)
-------------
Total $914,274,546
=============
Shares of beneficial interest outstanding 61,130,964
=============
Class A shares:
Net asset value per share
(net assets of $887,891,881 [divided by] 59,333,915 shares of beneficial interest
outstanding) $14.96
======
Offering price per share (100 [divided by] 94.25 of net asset value per share) $15.87
======
Class B shares:
Net asset value and offering price per share
(net assets $22,505,709 [divided by] 1,538,142 shares of beneficial interest
outstanding) $14.63
======
Class I shares:
Net asset value, offering price and redemption price per share
(net asset value $3,876,956 [divided by] 258,907 shares of beneficial interest) $14.97
======
</TABLE>
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
12
<PAGE>
Financial Statements - continued
Statement of Operations (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended June 30, 1997
- --------------------------------------------------------------------------------
<S> <C>
Net investment income:
Income -
Dividends $ 2,410,775
Interest 368,368
Foreign taxes withheld (23,434)
------------
Total investment income $ 2,755,709
------------
Expenses -
Management fee $ 1,795,045
Trustees' compensation 26,579
Shareholder servicing agent fee 551,333
Distribution and service fee (Class A) 727,048
Distribution and service fee (Class B) 87,561
Administrative fee 43,166
Custodian fee 136,786
Postage 74,094
Printing 24,414
Auditing fee 15,924
Legal fee 3,719
Miscellaneous 176,653
------------
Total expenses $ 3,662,322
Fees paid indirectly (142,222)
------------
Net expenses $ 3,520,100
------------
Net investment loss $ (764,391)
------------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $ 80,101,814
Foreign currency transaction (24,226)
------------
Net realized gain on investments and foreign currency transactions $ 80,077,588
------------
Change in unrealized appreciation on investments $ 45,345,231
------------
Net realized and unrealized gain on investments and foreign currency $125,422,819
------------
Increase in net assets from operations $124,658,428
============
</TABLE>
See notes to financial statements
13
<PAGE>
Financial Statements - continued
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1997 Year Ended
(Unaudited) December 31, 1996
----------------- -----------------
<S> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment loss $ (764,391) $ (1,232,233)
Net realized gain on investments and foreign
currency transactions 80,077,588 89,761,702
Net unrealized gain on investments and
foreign currency translation 45,345,231 64,838,899
-------------- --------------
Increase in net assets from operations $ 124,658,428 $ 153,368,368
-------------- --------------
Distributions declared to shareholders -
From net realized gain on investments and
foreign currency transactions (Class A) -- $ (88,077,143)
From net realized gain on investments and
foreign currency transactions (Class B) -- (1,583,683)
-------------- --------------
Total distributions declared to shareholders $ -- $ (89,660,826)
-------------- --------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 189,165,717 $ 277,719,578
Net asset value of shares issued to shareholders
in reinvestment of distributions -- 85,916,601
Cost of shares reacquired (222,376,816) (332,657,111)
-------------- --------------
Increase (decrease) in net assets from Fund
share transactions $ (33,211,099) $ 30,979,068
-------------- --------------
Total increase in net assets $ 91,447,329 $ 94,686,610
Net assets:
At beginning of period 822,827,217 728,140,607
-------------- --------------
At end of period (including accumulated net
investment loss of $833,071 and $68,680,
respectively) $ 914,274,546 $ 822,827,217
============== ==============
</TABLE>
See notes to financial statements
14
<PAGE>
Financial Statements - continued
Financial Highlights
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
June 30, 1997 ___________________________________________________
(Unaudited) 1996 1995 1994 1993 1992
- -----------------------------------------------------------------------------------------------------------
Class A
- -----------------------------------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
<S> <C> <C> <C> <C> <C> <C>
Net asset value-
beginning of period $ 12.97 $ 11.94 $ 10.17 $ 11.56 $ 11.17 $ 10.75
-------- -------- -------- -------- -------- --------
Income from investment
operations#-
Net investment income (loss)[section] $ (0.01) $ (0.02) $ 0.03 $ 0.02 $ 0.07 $ 0.15
Net realized and unrealized
gain (loss) on investments
and foreign currency
transactions 2.00 2.62 3.46 (0.50) 1.73 0.67
-------- -------- -------- -------- -------- --------
Total from investment
operations $ 1.99 $ 2.60 $ 3.49 $ (0.48) $ 1.80 $ 0.82
-------- -------- -------- -------- -------- --------
Less distributions declared to
shareholders-
From net investment income $ _ $ _ $ _ $ (0.01) $ (0.07) $ (0.14)
From net realized gain on
investment and foreign
currency transactions _ (1.57) (1.72) (0.83) (1.32) (0.26)
In excess of net investment
income _ _ _ (0.02) (0.02) _
In excess of net realized gain
on investments and foreign
currency transactions _ _ _ (0.05) _ _
Total distributions declared
-------- -------- -------- -------- -------- --------
to shareholders $ _ $ (1.57) $ (1.72) $ (0.91) $ (1.41) $ (0.40)
-------- -------- -------- -------- -------- --------
Net asset value-end of period $ 14.96 $ 12.97 $ 11.94 $ 10.17 $ 11.56 $ 11.17
======== ======== ========= ======== ======== ========
Total return [dbldag] 15.34%++ 21.87% 34.49% (4.15)% 16.19% (8.06)%
Ratios (to average net assets)/Supplement data[section]:
Expenses## 0.80%+ 0.84% 0.87% 0.86% 0.84% 0.89%
Net investment income (loss) (0.16)%+ (0.15)% 0.21% 0.21% 0.60% 1.40%
Portfolio turnover 30% 65% 100% 78% 79% 102%
Average commission rate### $ 0.0378 $ 0.0438 $ _ $ _ $ _ $ _
Net assets at end of period
(000 omitted) $887,892 $807,657 $721,467 $589,260 $709,839 $694,084
+ Annualized.
++ Not annualized.
# Per share data for the periods subsequent to December 31, 1992, are based on average shares outstanding.
## For fiscal years ending after September 1, 1995, the Fund's expenses are calculated without reduction
for fees paid indirectly.
### Average commission rate is calculated for funds with fiscal years beginning on or after September 1, 1995.
[dbldag] 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.
[section] The distributor did not impose a portion of its distribution fee for certain of the periods indicated.
If this fee had been incured by the Fund, the net investment income per share and the ratios would have been:
Net investment income $ _ $ _ $ 0.02 $ 0.01 $ 0.07 $ _
Ratios (to average net assets):
Expenses## _ _ 0.97% 0.96% 0.87% _
Net investment income _ _ 0.11% 0.11% 0.56% _
</TABLE>
See notes to financial statements
<PAGE>
Financial Statements - continued
Financial Highlights - continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------
1991 1990
------------ ----------------
Class A
-----------------------------
<S> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value -
beginning of period $ 9.97 $ 10.93
-------- -----------
Income from investment
operations -
Net investment income $ 0.24 $ 0.30
Net realized and unrealized
gain (loss) on investments
and foreign currency
transactions 1.94 (0.77)
-------- -----------
Total from investment
operations $ 2.18 $ (0.47)
-------- -----------
Less distributions declared to
shareholders -
From net investment income $ (0.18) $ (0.33)
From net realized gain on
investment and foreign
currency transactions (1.22) (0.16)[dbldag][dbldag]
-------- -----------
Total distributions declared
to shareholders $ (1.40) $ (0.49)
-------- -----------
Net asset value - end of period $ 10.75 $ 9.97
======== ===========
Total return[dbldag] 9.29% (4.57)%
Ratios (to average net assets)/Supplemental data:
Expenses 0.88% 0.80%
Net investment income 2.14% 2.91%
Portfolio turnover 131% 89%
Net assets at end of period
(000 omitted) $739,791 $687,847
<CAPTION>
Year Ended December 31, Year Ended
1989 1988 1987* March 31, 1987
------------ ------------ --------------- ---------------
<S> <C> <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 $ 13.51
-------- -------- ------------ ----------
Income from investment
operations -
Net investment income $ 0.36 $ 0.22 $ 0.11 $ 0.17
Net realized and unrealized
gain (loss) on investments
and foreign currency
transactions 2.74 0.76 (2.13) 1.20
-------- -------- ------------ ----------
Total from investment
operations $ 3.10 $ 0.98 $ (2.02) $ 1.37
-------- -------- ------------ ----------
Less distributions declared to
shareholders -
From net investment income $ (0.36) $ (0.19) $ (0.11) $ (0.17)
From net realized gain on
investment and foreign
currency transactions (2.77) (0.64) (0.47) (1.30)
-------- -------- ------------ ----------
Total distributions declared
to shareholders $ (3.13) $ (0.83) $ (0.58) $ (1.47)
-------- -------- ------------ ----------
Net asset value - end of period $ 10.93 $ 10.96 $ 10.81 $ 13.41
======== ======== ============ ==========
Total return[dbldag] 28.23% 8.90% (20.45)%+ 11.57%
Ratios (to average net assets)/Supplemental data:
Expenses 0.77% 0.86% 0.72%+ 0.71%
Net investment income 2.79% 1.90% 1.08%+ 1.28%
Portfolio turnover 83% 68% 40% 109%
Net assets at end of period
(000 omitted) $805,712 $767,924 $ 834,359 $1,090,764
</TABLE>
*For the nine months ended December 31, 1987.
+Annualized
[dbldag]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.
[dbldag][dbldag]Includes a per share distribution from paid-in capital of
$0.0006.
See notes to financial statements
16
<PAGE>
Financial Statements - continued
Financial Highlights - continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
June 30, 1997 ---------------------------------------------------------
(Unaudited) 1996 1995 1994 1993**
------------- ------------ ------------ ------------ ------------------
Class B
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value -
beginning of period $ 12.73 $ 11.79 $10.08 $11.53 $12.52
---------- ----------- -------- -------- --------
Income from investment
operations# -
Net investment loss $ (0.06) $ (0.14) $(0.09) $(0.08) $ --
Net realized and unrealized
gain (loss) on investments
and foreign currency
transactions 1.96 2.57 3.42 (0.49) 0.36
---------- ----------- -------- -------- --------
Total from investment
operations $ 1.90 $ 2.43 $ 3.33 $(0.57) $ 0.36
---------- ----------- -------- -------- --------
Less distributions declared to
shareholders -
From net realized gain on
investments and foreign
currency transactions $ -- $ (1.49) $(1.62) $(0.83) $(1.32)
In excess of net investment
income -- -- -- -- (0.03)
In excess of net realized gain
on investments and foreign
currency transactions -- -- -- (0.05) --
---------- ----------- -------- -------- --------
Total distributions declared
to shareholders -- $ (1.49) $(1.62) $(0.88) $(1.35)
---------- ----------- -------- -------- --------
Net asset value - end of period $ 14.63 $ 12.73 $11.79 $10.08 $11.53
---------- ----------- -------- -------- --------
Total return 14.93%++ ]20.72% 33.20% (4.96)% 9.29%+
Ratios (to average net assets)/Supplemental data[sec]:
Expenses ## 1.61%+ 1.75% 1.81% 1.81% 1.33%+
Net investment income (loss) (0.95)%+ (1.06)% (0.75)% (0.70)% --
Portfolio turnover 30% 65% 100% 78% 79%
Average commission rate### $ 0.0378 $ 0.0438 $ -- $ -- $ --
Net assets at end of period
(000 omitted) $ 22,506 $ 15,170 $6,673 $3,166 $ 805
</TABLE>
** For the period from the commencement of offering of Class B shares, September
7, 1993, through December 31, 1993.
+Annualized.
++Not annualized.
#Per share data are based on average shares outstanding.
##For fiscal years ending after September 1, 1995, the Fund's expenses are
calculated without reduction for fees paid indirectly.
###Average commission rate is calculated for funds with fiscal years beginning
on or after September 1, 1995.
See notes to financial statements
17
<PAGE>
Financial Statements - continued
Financial Highlights - continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Period Ended
June 30, 1997****
(Unaudited)
------------------
Class I
------------------
<S> <C>
Per share data (for a share outstanding throughout the period):
Net asset value - beginning of period $ 12.84
-----------
Income from investment operations# -
Net realized and unrealized gain on investments and foreign currency
transactions $ 2.13
-----------
Net asset value - end of period $ 14.97
===========
Total return
Ratios (to average net assets)/Supplemental data: 16.59%++
Expenses## 0.64%+
Net investment income 0.02%+
Portfolio turnover 30%
Average commission rate $ 0.0378
Net assets at end of period (000 omitted) $ 3,877
</TABLE>
**** For the period from the commencement of offering of Class I shares, January
2, 1997, through June 30, 1997.
+ Annualized.
++ Not annualized.
# Per share data are based on average shares outstanding.
## The Fund's expenses are calculated without reduction for fees paid
indirectly.
See notes to financial statements
18
<PAGE>
Notes to Financial Statements (Unaudited)
(1) Business and Organization
MFS Growth Opportunities Fund (the Fund) is organized as a Massachusetts
business trust and is registered under the Investment Company Act of 1940, as
amended, as a diversified, open-end management investment company.
(2) Significant Accounting Policies
General - The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. Investments
in foreign securities are vulnerable to the effects of changes in the relative
values of the local currency and the U.S. dollar and to the effects of changes
in each country's legal, political, and economic environment.
Investment Valuations - Equity securities listed on securities exchanges or
reported through the NASDAQ system are reported at market value using last sale
prices. Unlisted equity securities or listed equity securities for which last
sale prices are not available are reported at market value using last quoted bid
prices. 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 market value. Securities
for which there are no such quotations or valuations are valued at fair value as
determined in good faith by or at the direction of the Trustees.
Foreign Currency Translation - Investment valuations, other assets, and
liabilities initially expressed in foreign currencies are converted each
business day into U.S. dollars based upon current exchange rates. Purchases and
sales of foreign investments, income, and expenses are converted into U.S.
dollars based upon currency exchange rates prevailing on the respective dates of
such transactions. Gains and losses attributable to foreign currency exchange
rates on sales of securities are recorded for financial statement purposes as
net realized gains and losses on investments. Gains and losses attributable to
foreign exchange rate movements on income and expenses are recorded for
financial statement purposes as foreign currency transaction gains and losses.
That portion of both realized and unrealized gains and losses on investments
that results from fluctuations in foreign currency exchange rates is not
separately disclosed.
19
<PAGE>
Notes to Financial Statements (Unaudited) - continued
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 into these contracts from the potential inability of counterparties to
meet the terms of their contracts and from unanticipated movements in the value
of a foreign currency relative to the U.S. dollar. The Fund will enter into
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.
The Fund 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 as unrealized until the contract settlement date. On contract
settlement date the gains or losses are recorded as realized foreign currency
transactions.
Investment Transactions and Income - Investment transactions are recorded on the
trade date. Interest income is recorded on the accrual basis. All premiums and
original issue discounts are amortized or accreted for financial statement and
tax reporting purposes as required by federal income tax regulations. Dividends
received in cash are recorded on the ex-dividend date. Dividend payments
received in additional securities are recorded on the ex-dividend date in an
amount equal to the value of the security on such date.
Fees Paid Indirectly - The Fund's custody fee is calculated as a percentage of
the Fund's average daily net assets. The fee is reduced according to an
arrangement which measures the value of cash deposited with the custodian by the
Fund. This amount is shown as a reduction of expenses on the Statement of
Operations.
Tax Matters and Distributions - 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.
20
<PAGE>
Notes to Financial Statements (Unaudited) - continued
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 tax 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.
Multiple Classes of Shares of Beneficial Interest - The Fund offers multiple
classes of shares. The classes of shares differ in their respective distribution
and service fees. All shareholders bear the common expenses of the Fund pro rata
based on average daily net assets of each class, without distinction between
share classes. Dividends are declared separately for each class. No class has
preferential dividend rights; differences in per share dividend rates are
generally due to differences in separate class expenses.
(3) Transactions with Affiliates
Investment Adviser - The Fund has an investment advisory agreement with
Massachusetts Financial Services Company (MFS) to provide overall investment
advisory and administrative services and general office facilities. The
management fee is computed daily and paid monthly at an effective annual rate of
0.41% of average daily net assets.
Administrator - Effective March 1, 1997, the Fund has an administrative services
agreement with MFS to provide the Fund with certain financial, legal and other
administrative services. As partial reimbursement for the cost of providing
these services, the Fund pays MFS an administrative fee up to 0.015% per annum
of the Fund's average daily net assets, provided that the administrative fee is
not assessed on Fund assets that exceed $3 billion.
The Fund pays no compensation directly to its Trustees who are officers of the
investment adviser, or to officers of the Fund, all of whom receive remuneration
for their services to the Fund from MFS. Certain of the officers and Trustees of
the Fund are officers or directors of MFS, MFS Fund Distributors, Inc. (MFD),
and MFS Service Center, Inc. (MFSC). The Fund has an unfunded defined benefit
plan for all its independent Trustees and Mr. Bailey. Included in Trustees'
compensation is a net periodic pension expense of $8,101 for the period ended
June 30, 1997.
Distributor - MFD, a wholly owned subsidiary of MFS, as distributor, received
$45,289 for the period ended June 30, 1997, as its portion of the sales charge
on sales of Class A shares of the Fund.
The Trustees have adopted a distribution plan for Class A and Class B shares
pursuant to Rule 12b-1 of the Investment Company Act of 1940 as follows:
21
<PAGE>
Notes to Financial Statements (Unaudited) - continued
The Fund's distribution plan provides that the Fund will pay MFD up to 0.35% per
annum of its average daily net assets attributable to Class A shares in order
that MFD may pay expenses on behalf of the Fund related to the distribution and
servicing of its shares. These expenses include a service fee to each securities
dealer that enters into a sales agreement with MFD of up to 0.25% per annum
(reduced to 0.15% per annum for assets sold prior to March 1, 1991) of the
Fund's average daily net assets attributable to Class A shares which are
attributable to that securities dealer, a distribution fee to MFD of up to 0.10%
per annum of the Fund's average daily net assets attributable to Class A shares,
commissions to dealers, and payments to MFD wholesalers for sales at or above a
certain dollar level, and other such distribution-related expenses that are
approved by the Fund. MFD retains the service fee for accounts not attributable
to a securities dealer which amounted to $352,200 for the period ended June 30,
1997. Payment of the 0.10% per annum Class A distribution fee will commence on
such date as the Trustees of the Trust may determine. Fees incurred under the
distribution plan during the period ended June 30, 1997, were 0.17% of average
daily net assets attributable to Class A shares on an annualized basis.
The Fund's distribution plan provides that the Fund will pay MFD a distribution
fee of 0.75% per annum, and a service fee of up to 0.25% per annum, of the
Fund's average daily net assets attributable to Class B shares. MFD will pay to
securities dealers that enter into a sales agreement with MFD all or a portion
of the service fee attributable to Class B shares. The service fee is intended
to be additional consideration for services rendered by the dealer with respect
to Class B shares. MFD retains the service fee for accounts not attributable to
a securities dealer, which amounted to $2,825 for Class B shares for the period
ended June 30, 1997. Fees incurred under the distribution plan during the period
ended June 30, 1997, were 1.00% of average daily net assets attributable to
Class B shares on an annualized basis.
Purchases over $1 million of Class A shares and certain purchases into
retirement plans are subject to a contingent deferred sales charge in the event
of a shareholder redemption within 12 months following such purchase. A
contingent deferred sales charge is imposed on shareholder redemptions of Class
B shares in the event of a shareholder redemption within six years of purchase.
MFD receives all contingent deferred sales charges. Contingent deferred sales
charges imposed during the period ended June 30, 1997, were $378 and $9,687 for
Class A and Class B shares, respectively.
Shareholder Servicing Agent - MFSC, a wholly owned subsidiary of MFS, earns a
fee for its services as shareholder servicing agent. The fee is calculated as a
percentage of the Fund's average daily net assets at an effective annual rate of
0.13%. Prior to January 1, 1997, the fee was calculated as a percentage of the
Fund's average daily net assets of each class of shares at an effective annual
rate
22
<PAGE>
Notes to Financial Statements (Unaudited) - continued
of up to 0.15% and up to 0.22% attributable to Class A and Class B shares,
respectively.
(4) Portfolio Securities
Purchases and sales of investments, other than U.S. government securities,
purchased option transactions, and short-term obligations, aggregated
$256,538,785 and $325,538,513, 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 $ 649,425,552
==============
Gross unrealized appreciation $ 282,911,017
Gross unrealized depreciation (20,497,103)
--------------
Net unrealized appreciation $ 262,413,914
==============
(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:
Class A Shares
<TABLE>
<CAPTION>
Period Ended June 30, 1997 Year Ended December 31, 1996
--------------------------------- ------------------------------------
Shares Amount Shares Amount
--------------- ----------------- ----------------- ------------------
<S> <C> <C> <C> <C>
Shares sold 12,971,968 $ 176,931,545 20,081,505 $ 265,741,600
Shares issued to
shareholders in
reinvestment of
distributions -- -- 6,559,488 84,484,449
Shares transferred to
Class I (269,714) (3,463,128) -- --
Shares reacquired (15,657,547) (214,921,824) (24,769,912) (327,523,302)
------------ -------------- ------------- ---------------
Net increase (decrease) (2,955,293) $ (41,453,407) 1,871,081 $ 22,702,747
============ ============== ============= ===============
</TABLE>
Class B Shares
<TABLE>
<CAPTION>
Period Ended June 30, 1997 Year Ended December 31, 1996
------------------------------------ ------------------------------------
Shares Amount Shares Amount
----------------- ------------------ ----------------- ------------------
<S> <C> <C> <C> <C>
Shares sold 896,224 $ 12,136,478 901,449 $ 11,977,978
Shares issued to
shareholders in
reinvestment of
distributions -- -- 113,216 1,432,152
Shares reacquired (549,865) (7,212,641) (388,694) (5,133,809)
------------- --------------- ------------- ---------------
Net increase 346,359 $ 4,923,837 625,971 $ 8,276,321
============= =============== ============= ===============
</TABLE>
23
<PAGE>
Notes to Financial Statements (Unaudited) - continued
Class I Shares
Period Ended June 30, 1997*
------------------------------------
Shares Amount
----------------- ------------------
Shares sold 7,636 $ 97,694
Shares transferred from
Class A 269,714 3,463,128
Shares reacquired (18,443) (242,351)
------------- ---------------
Net increase 258,907 $ 3,318,471
============= ===============
*For the period from the commencement of offering of the Fund's Class I shares,
January 2, 1997, through June 30, 1997.
(6) Line of Credit
The Fund and other affiliated funds participate in a $400 million unsecured line
of credit provided by a syndication of banks under a line of credit agreement.
Borrowings may be made to temporarily finance the repurchase of Fund shares.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the bank's base rate. In addition, a commitment fee, based on the average daily
unused portion of the line of credit, is allocated among the participating funds
at the end of each quarter. The commitment fee allocated to the Fund for the
period ended June 30, 1997, was $5,247.
(7) Restricted Securities
The Fund may invest not more than 10% of its net assets in securities which are
subject to legal or contractual restrictions on resale. At June 30, 1997, the
Fund owned the following restricted security constituting 0.2% 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 security be
registered. The value of this security is determined by valuations supplied by a
pricing service or brokers or, if not available, in good faith by or at the
direction of the Trustees.
<TABLE>
<CAPTION>
Description Date of Acquisition Share Amount Cost Value
- ------------------------- --------------------- -------------- ------------ -----------
<S> <C> <C> <C> <C>
Tel-Save Holdings, Inc. 3/10/97 134,900 $2,225,850 $2,192,125
=========== ===========
</TABLE>
------------------------------------------------------------
This report is prepared for the general information of shareholders. It is
authorized for distribution to prospective investors only when preceded or
accompanied by a current prospectus.
24
<PAGE>
MFS(R) Growth Opportunities Fund
Trustees
A. Keith Brodkin* - Chairman and President
Richard B. Bailey* - Private Investor;
Former Chairman and Director (until 1991),
Massachusetts Financial Services Company;
Director, Cambridge Bancorp; Director,
Cambridge Trust Company
Peter G. Harwood - Private Investor
J. Atwood Ives - Chairman and Chief Executive Officer,
Eastern Enterprises
Lawrence T. Perera - Partner, Hemenway & Barnes
William J. Poorvu - Adjunct Professor, Harvard University
Graduate School of Business Administration
Charles W. Schmidt - Private Investor
Arnold D. Scott* - Senior Executive Vice President, Director
and Secretary, Massachusetts Financial Services Company
Jeffrey L. Shames* - President and Director,
Massachusetts Financial Services Company
Elaine R. Smith - Independent Consultant
David B. Stone - Chairman, North American Management
Corp. (investment advisers)
Investment Adviser
Massachusetts Financial Services Company
500 Boylston Street
Boston, MA 02116-3741
Distributor
MFS Fund Distributors, Inc.
500 Boylston Street
Boston, MA 02116-3741
Portfolio Manager
Paul M. McMahon*
Treasurer
W. Thomas London*
Assistant Treasurers
Mark E. Bradley*
Ellen Moynihan*
James O. Yost*
Secretary
Stephen E. Cavan*
Assistant Secretary
James R. Bordewick, Jr.*
*Affiliated with the Investment Adviser
Custodian
State Street Bank and Trust Company
Auditors
Ernst & Young LLP
Investor Information
For MFS stock and bond market outlooks, call toll free:
1-800-637-4458 anytime from a touch-tone telephone.
For information on MFS mutual funds, call your financial
adviser or, for an information kit, call toll free:
1-800-637-2929 any business day from 9 a.m. to 5 p.m.
Eastern time (or leave a message anytime).
Investor Service
MFS Service Center, Inc.
P.O. Box 2281
Boston, MA 02107-9906
For general information, call toll free: 1-800-225-2606 any
business day from 8 a.m to 8 p.m. Eastern time.
For service to speech- or hearing-impaired, call toll free:
1-800-637-6576 any business day from 9 a.m. to 5 p.m.
Eastern time. (To use this service, your phone must be
equipped with a Telecommunications Device for the Deaf.)
For share prices, account balances, and exchanges, call toll
free: 1-800-MFS-TALK (1-800-637-8255) anytime from a
touch-tone telephone.
World Wide Web
www.mfs.com
[DALBAR GRAPHIC]
For the third year in a row, MFS earned a #1 ranking in the DALBAR, Inc.
Broker/Dealer Survey, Main Office Operations Service Quality Category. The
firm achieved a 3.48 overall score on a scale of 1 to 4 in the 1996 survey.
A total of 110 firms responded, offering input on the quality of service they
received from 29 mutual fund companies nationwide. The survey contained
questions about service quality in 15 categories, including "knowledge of
phone service contracts," "accuracy of transaction processing," and "overall
ease of doing business with the firm."
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[back cover]
MFS(R) Growth [Dalbar logo] Bulk Rate
Opportunities Fund U.S. Postage
Paid
500 Boylston Street MFS
Boston, MA 02116-3741
[MFS logo]
(C) 1997 MFS Fund Distributors, Inc., 500 Boylston Street, Boston, MA 02116-3741
MGO-3 8/97 52M 16/216/816
