<PAGE>
MFS MONEY MARKET FUND
MFS GOVERNMENT MONEY MARKET FUND
(SERIES OF MFS SERIES TRUST IV)
500 BOYLSTON STREET o BOSTON o MASSACHUSETTS 02116-3741
617 o 954-5000
October 24, 1995
VIA EDGAR
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, DC 20549
Re: MFS Series Trust IV (File No. 811-2594), on Behalf of MFS Money
Market Fund and MFS Government Money Market Fund
Ladies and Gentlemen:
Pursuant to Section 30(b) of the Investment Company Act of 1940 and Rule
30b2-1 thereunder, we hereby file a copy of the Annual Report to Shareholders
dated August 31, 1995 of MFS Money Market Fund and MFS Government Money Market
Fund.
Very truly yours,
LORRAINE K. GRIP
Lorraine K. Grip
Production Editor
LKG/kha
<PAGE>
[LOGO] MFS [SM] Annual Report for
THE FIRST NAME IN MUTUAL FUNDS Year Ended
August 31, 1995
MFS[R] MONEY MARKET FUND
MFS[R] GOVERNMENT MONEY MARKET FUND
[A Photo of a columned building.]
<PAGE>
MFS [R] MONEY MARKET FUND
MFS [R] GOVERNMENT MONEY MARKET FUND
TRUSTEES
A. Keith Brodkin* - Chairman and President
Richard B. Bailey* - Private Investor;
Former Chairman and Director (until 1991),
Massachusetts Financial Services 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 and Secretary, Massachusetts
Financial Services Company
Jeffrey L. Shames* - President, Massachusetts
Financial Services Company
Elaine R. Smith - Independent Consultant
David B. Stone - Chairman, North American
Management Corp. (Investment Adviser)
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
Geoffrey L. Kurinsky*
TREASURER
W. Thomas London*
ASSISTANT TREASURER
James O. Yost*
SECRETARY
Stephen E. Cavan*
ASSISTANT SECRETARY
James R. Bordewick, Jr.*
CUSTODIAN
State Street Bank and Trust Company
AUDITORS
Deloitte & Touche 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.
* Affiliated with the Investment Adviser
<PAGE>
LETTER TO SHAREHOLDERS
Dear Shareholders:
Short-term interest rates increased dramatically during the past year, despite
the last few months of lower rates. The annualized yield on an investment in MFS
MONEY MARKET FUND for the seven-day period ended August 31, 1995 increased from
3.7% to 5.2%. During this same period, the annualized yield on an investment in
MFS GOVERNMENT MONEY MARKET FUND rose from 3.4% to 5.2%.
Economic Environment
Moderate, but sustainable, growth appears to be the hallmark of the economic
expansion's fifth year. After slowing earlier in the summer, consumer spending
and homebuying were showing renewed strength by August 31, while businesses
continued to work off excess inventories and reduce factory output. Meanwhile,
overseas economies, particularly those of Germany and Japan, have not recovered
as expected, limiting U.S. export growth. However, the Federal Reserve Board's
consistent and, so far, successful efforts to fight inflation seem to be giving
consumers and businesses enough confidence to help maintain 2 1/2% to 3% real
(adjusted for inflation) growth in gross domestic product, at least through
1995.
Interest Rates
During the fiscal year ended August 31, 1995, the Federal Reserve voted to
continue to tighten monetary policy by raising the federal funds rate (the
interest rate charged by banks to other banks in need of overnight loans) two
more times. On November 15, 1994, it raised the federal funds rate 75 basis
points (0.75%). Then on February 1, 1995, an increase of 50 basis points (0.50%)
was put into effect. Most recently, however, the Federal Reserve lowered rates
25 basis points (0.25%) on July 6, 1995 (the first easing in nearly three years)
after the economy began to show signs of contracting. As a result, yields on
30-day U.S. Treasury bills rose from just over 4.2% at the end of August 1994 to
5.3% as of August 31, 1995, while yields on 30-day commercial paper increased
from 4.7% to their current level of 5.7% during the same period. With improving
inflation conditions and moderate economic growth, we believe short-term
interest rates may fall somewhat further over the next several months.
Portfolio Performance and Strategy
Because of the trend toward stable-to-lower short-term interest rates and in an
effort to provide a reasonable level of current income, we have lengthened
maturities in both portfolios. The average maturity of both Funds was 53 days as
of August 31, 1995 versus 27 and 28 days, respectively, for MFS MONEY MARKET
FUND and MFS GOVERNMENT MONEY MARKET FUND on August 31, 1994.
1
<PAGE>
LETTER TO SHAREHOLDERS - continued
The portfolio of MFS MONEY MARKET FUND continues to include only the
highest-quality corporate, bank and government securities in an effort to
provide investors with maximum security against credit risk (although money
market funds are neither insured nor guaranteed by the U.S. government, and
there can be no assurance that they will be able to maintain a stable net asset
value). On August 31, 1995, approximately 31% of this Fund's net assets was
invested in commercial paper, with the balance invested in securities issued or
guaranteed by the U.S. Treasury or agencies or instrumentalities of the U.S.
government because of the very narrow yield spreads between government agency
obligations and commercial paper. At the same time, the quality of MFS
GOVERNMENT MONEY MARKET FUND'S portfolio remains at the highest practical level
because its investments are limited to those securities issued or guaranteed by
the U.S. Treasury or agencies or instrumentalities of the U.S. government,
including repurchase agreements collateralized by such securities. This emphasis
on quality should allow the Fund to continue to help investors to obtain current
income and, at the same time, to preserve capital and liquidity.
We appreciate your support and welcome any questions or comments you may
have.
Respectfully,
/s/ A. Keith Brodkin /s/ Geoffrey L. Kurinsky
A. Keith Brodkin Geoffrey L. Kurinsky
Chairman and President Portfolio Manager
September 12, 1995
TAX FORM SUMMARY
In January 1996, shareholders will be mailed a Tax Form Summary reporting the
federal tax status of all distributions paid during the calendar year 1995.
PORTFOLIO MANAGER PROFILE
Geoffrey Kurinsky began his career at MFS in 1987 in the Fixed Income
Department. A graduate of the University of Massachusetts and Boston
University's Graduate School of Management, he was named Assistant Vice
President in 1988, Vice President in 1989 and Senior Vice President in 1993. He
has managed MFS Money Market Fund and MFS Government Money Market Fund since
1992.
2
<PAGE>
PORTFOLIOS OF INVESTMENTS - August 31, 1995
<TABLE>
<CAPTION>
MFS MONEY MARKET FUND
Commercial Paper - 31.0%
================================================================================
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------
<S> <C> <C>
American Telephone & Telegraph Co., due 10/16/95 $14,400 $ 14,298,480
Coca-Cola Co., due 11/30/95 7,800 7,690,605
Duke Power Co., due 9/12/95 10,000 9,982,583
Ford Motor Credit Corp., due 9/01/95 2,700 2,700,000
General Electric Co., due 12/15/95 8,500 8,358,935
Hershey Foods Corp., due 10/06/95 8,743 8,694,974
Hewlett Packard Co., due 9/28/95 - 10/03/95 17,600 17,520,166
PepsiCo, Inc., due 9/14/95 - 10/03/95 15,157 15,104,868
Procter & Gamble Co., due 10/05/95 - 12/18/95 17,000 16,851,067
Transamerica Corp., due 9/06/95 8,000 7,993,645
Wal-Mart Stores, Inc., due 9/15/95 12,000 11,973,400
Warner-Lambert Co., due 12/29/95 6,000 5,889,925
- --------------------------------------------------------------------------------
Total Commercial Paper, at Amortized Cost $127,058,648
- --------------------------------------------------------------------------------
U.S. Government and Agency Obligations - 70.2%
================================================================================
Federal Farm Credit Bank, due 9/05/95 - 12/20/95 $19,600 $ 19,448,194
Federal Home Loan Bank, due 9/01/95 - 1/22/96 38,000 37,605,107
Federal Home Loan Mortgage Corp.,
due 9/08/95 - 2/09/96 132,263 131,043,756
Federal National Mortgage Assn.,
due 9/07/95 - 12/22/95 93,250 92,489,961
Tennessee Valley Authority, due 9/19/95 8,000 7,977,520
- --------------------------------------------------------------------------------
Total U.S. Government and Agency Obligations, at Amortized Cost $288,564,538
- --------------------------------------------------------------------------------
Total Investments, at Amortized Cost $415,623,186
Other Assets, Less Liabilities - (1.2)% (4,825,267)
================================================================================
Net Assets - 100.0% $410,797,919
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MFS GOVERNMENT MONEY MARKET FUND
U.S. Government and Agency Obligations - 97.4%
================================================================================
Principal Amount
Issuer (000 Omitted) Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Federal Farm Credit Bank, due 9/22/95 - 12/18/95 $8,100 $ 8,016,961
Federal Home Loan Bank, due 9/01/95 - 2/05/96 5,500 5,436,813
Federal Home Loan Mortgage Corp.,
due 9/05/95 - 2/08/96 11,225 11,133,346
Federal National Mortgage Assn.,
due 9/07/95 - 12/28/95 10,000 9,948,656
Tennessee Valley Authority, due 10/03/95 2,900 2,885,539
- --------------------------------------------------------------------------------
Total Investments, at Amortized Cost $37,421,315
Other Assets, Less Liabilities - 2.6% 1,018,467
================================================================================
Net Assets - 100.0% $38,439,782
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
3
<PAGE>
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Statements of Assets and Liabilities
================================================================================
MFS Money MFS Government
August 31, 1995 Market Fund Money Market Fund
- --------------------------------------------------------------------------------
<S> <C> <C>
Assets:
Investments, at amortized cost and value $415,623,186 $37,421,315
Cash 46,471 19,293
Receivable for Fund shares sold 948,218 1,090,756
Other assets 7,013 535
------------ -----------
Total assets $416,624,888 $38,531,899
------------ -----------
Liabilities:
Distributions payable $ 79,397 $ 9,168
Payable for Fund shares reacquired 5,527,089 24,329
Payable to affiliates -
Management fee 75 --
Shareholder servicing agent fee 1,734 167
Accrued expenses and other liabilities 218,674 58,453
------------ -----------
Total Liabilities $ 5,826,969 $ 92,117
------------ -----------
Net Assets (represented by paid-in capital) $410,797,919 $38,439,782
============ ===========
Shares of beneficial interest outstanding 410,797,919 38,439,782
============ ===========
Net Asset Value, offering price and
redemption price per share
(net assets/shares of beneficial
interest outstanding) $1.00 $1.00
===== =====
</TABLE>
See notes to financial statements
4
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Statements of Operations
================================================================================
Year Ended
MFS Money Market Fund August 31, 1995
- --------------------------------------------------------------------------------
<S> <C>
Net investment income:
Interest income $ 26,215,863
------------
Expenses -
Management fee $ 2,224,748
Trustees' compensation 28,998
Shareholder servicing agent fee 691,600
Custodian fee 137,750
Postage 90,146
Printing 41,886
Auditing fees 7,244
Legal fees 1,643
Miscellaneous 285,973
------------
Total expenses $ 3,509,988
------------
Net investment income $ 22,705,875
============
</TABLE>
<TABLE>
<CAPTION>
Year Ended
MFS Government Money Market Fund August 31, 1995
- --------------------------------------------------------------------------------
<S> <C>
Net investment income:
Interest income $ 2,188,724
------------
Expenses -
Management fee $ 193,160
Trustees' compensation 3,641
Shareholder servicing agent fee 57,948
Auditing fees 23,018
Postage 4,674
Miscellaneous 43,689
------------
Total expenses $ 326,130
------------
Net investment income $ 1,862,594
============
</TABLE>
See notes to financial statements
5
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
====================================================================================================================================
Year Ended Ten Months Ended Year Ended
MFS Money Market Fund August 31, 1995 August 31, 1994 October 31, 1993
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income, declared as
distributions to shareholders $ 22,705,875 $ 10,000,828 $ 8,857,063
--------------- --------------- ---------------
Fund share (principal) transactions
at net asset value of $1.00 per share -
Net proceeds from sale of shares $ 2,481,903,487 $ 1,171,346,513 $ 479,475,355
Net asset value of shares issued
to shareholders in reinvestment
of distributions 19,523,795 8,997,225 8,547,220
Cost of shares reacquired (2,526,408,894) (1,094,880,512) (586,530,807)
--------------- --------------- ---------------
Total increase (decrease) in
net assets $ (24,981,612) $ 85,463,226 $ (98,508,232)
Net assets:
At beginning of period 435,779,531 350,316,305 448,824,537
--------------- --------------- ---------------
At end of period $ 410,797,919 $ 435,779,531 $ 350,316,305
=============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
Year Ended Ten Months Ended Year Ended
MFS Government Money Market Fund August 31, 1995 August 31, 1994 October 31, 1993
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income, declared as
distributions to shareholders $ 1,862,594 $ 894,377 $ 893,663
------------- ------------- -------------
Fund share (principal) transactions
at net asset value of $1.00 per share -
Net proceeds from sale of shares $ 130,386,802 $ 63,018,558 $ 36,011,225
Net asset value of shares issued
to shareholders in reinvestment
of distributions 1,692,388 815,492 817,778
Cost of shares reacquired (131,986,405) (61,062,849) (48,882,554)
------------- ------------- -------------
Total increase (decrease) in
net assets $ 92,785 $ 2,771,201 $ (12,053,551)
Net assets:
At beginning of period 38,346,997 35,575,796 47,629,347
------------- ------------- -------------
At end of period $ 38,439,782 $ 38,346,997 $ 35,575,796
============= ============== =============
See notes to financial statements
</TABLE>
6
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights
====================================================================================================================================
Year Ended August 31, Year Ended October 31,
--------------------- --------------------------------------------------------
MFS Money Market Fund 1995 1994* 1993 1992 1991
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value -
beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
Income from investment operations -
Net investment income $ 0.05 $ 0.02 $ 0.02 $ 0.03 $ 0.06
--------- --------- --------- --------- ---------
Less distributions declared
to shareholders from net
investment income $ (0.05) $ (0.02) $ (0.02) $ (0.03) $ (0.06)
--------- --------- --------- --------- ---------
Net asset value - end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= --------- ---------
Total return 5.04% 2.91%+ 2.39% 3.35% 6.07%
Ratios (to average net assets)/Supplemental data:
Expenses 0.76% 0.78%+ 0.83% 0.87% 0.82%
Net investment income 4.92% 2.95%+ 2.39% 3.36% 5.94%
Net assets at end of period (000 omitted) $ 410,798 $ 435,780 $ 350,316 $ 448,825 $ 541,945
</TABLE>
<TABLE>
<CAPTION>
Year Ended October 31,
-------------------------------------------------------------------------------------
MFS Money Market Fund 1990 1989 1988 1987 1986 1985
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value -
beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- --------- ---------
Income from investment operations -
Net investment income $ 0.07 $ 0.08 $ 0.07 $ 0.06 $ 0.06 $ 0.08
--------- --------- --------- --------- --------- ---------
Less distributions declared
to shareholders from net
investment income $ (0.07) $ (0.08) $ (0.07) $ (0.06) $ (0.06) $ (0.08)
--------- --------- --------- --------- --------- ---------
Net asset value - end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ========= --------- ---------
Total return 7.99% 8.84% 7.12% 6.06% 6.80% 8.19%
Ratios (to average net assets)/Supplemental data:
Expenses 0.76% 0.83% 0.83% 0.82% 0.78% 0.73%
Net investment income 7.60% 8.45% 6.72% 5.77% 6.53% 7.86%
Net assets at end of period (000 omitted) $ 677,164 $ 676,382 $ 664,895 $ 716,528 $ 623,568 $ 657,000
<FN>
* For the ten months ended August 31, 1994. + Annualized.
</FN>
</TABLE>
See notes to financial statements
7
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights - continued
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended August 31, Year Ended October 31,
--------------------- -----------------------------------
MFS Government Money Market Fund 1995 1994* 1993 1992 1991
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value -
beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from investment operations -
Net investment income $ 0.05 $ 0.02 $ 0.02 $ 0.03 $ 0.06
-------- -------- -------- -------- --------
Less distributions declared
to shareholders from net
investment income $ (0.05) $ (0.02) $ (0.02) $ (0.03) $ (0.06)
-------- -------- -------- -------- --------
Net asset value - end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total return 4.92% 2.64%+ 2.33% 3.27% 5.68%
Ratios (to average net assets)/Supplemental data:
Expenses 0.84% 1.05%+ 0.99% 0.87% 0.83%
Net investment income 4.82% 2.64%+ 2.20% 3.28% 5.53%
Net assets at end of period (000 omitted) $ 38,440 $ 38,347 $ 35,576 $ 47,629 $ 50,655
</TABLE>
<TABLE>
<CAPTION>
Year Ended October 31,
-----------------------------------------------------------------------------------
MFS Government Money Market Fund 1990 1989 1988 1987 1986 1985
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value -
beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- --------
Income from investment operations -
Net investment income $ 0.07 $ 0.08 $ 0.06 $ 0.05 $ 0.06 $ 0.07
-------- -------- -------- -------- -------- --------
Less distributions declared
to shareholders from net
investment income $ (0.07) $ (0.08) $ (0.06) $ (0.05) $ (0.06) $ (0.07)
-------- -------- -------- -------- -------- --------
Net asset value - end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ========
Total return 7.55% 8.61% 6.47% 5.73% 6.33% 7.63%
Ratios (to average net assets)/Supplemental data:
Expenses 0.80% 0.85% 0.74% 0.59% 0.66% 0.72%
Net investment income 7.34% 8.29% 6.29% 5.63% 6.07% 7.39%
Net assets at end of period (000 omitted) $ 53,701 $ 51,619 $ 50,343 $ 59,875 $ 63,331 $ 45,894
<FN>
* For the ten months ended August 31, 1994.
+ Annualized.
</FN>
</TABLE>
See notes to financial statements
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(1) Business and Organization
MFS Money Market Fund and MFS Government Money Market Fund are each a separate,
diversified series of MFS Series Trust IV (the Trust). The Trust is organized as
a Massachusetts business trust and is registered under the Investment Company
Act of 1940, as amended, as an open-end management investment company.
(2) Significant Accounting Policies
Investment Valuations - Money market instruments are valued at amortized cost,
which the Trustees have determined in good faith constitutes fair value. The
Trust's use of amortized cost is subject to the Trust's compliance with certain
conditions as specified under Rule 2a-7 of the Investment Company Act of 1940.
Repurchase Agreements - The Trust may enter into repurchase agreements with
institutions that the Trust's investment adviser has determined are
creditworthy. Each repurchase agreement is recorded at cost. The Trust requires
that the securities purchased in a repurchase transaction be transferred to the
custodian in a manner sufficient to enable the Trust to obtain those securities
in the event of a default under the repurchase agreement. The Trust 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 Trust under each such repurchase agreement.
Investment Transactions and Income - Investment transactions are recorded on the
trade date. Interest income is recorded on the accrual basis. All premium and
original issue discount are amortized or accreted for financial statement and
tax reporting purposes as required by federal income tax regulations.
Tax Matters and Distributions - The Trust'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 net income.
Accordingly, no provision for federal income or excise tax is provided.
Distributions to shareholders are recorded on the ex-dividend date.
(3) Transactions with Affiliates
Investment Adviser - The Funds each have a separate investment advisory
agreement with Massachusetts Financial Services Company (MFS) to provide overall
investment advisory and administrative services and general office facilities.
The management fee is computed daily and paid monthly at an annual rate of
0.48% and 0.50% of average daily net assets for the MFS Money Market Fund and
the MFS Government Money Market Fund, respectively.
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS - continued
The Trust pays no compensation directly to its Trustees who are officers of the
investment adviser, or to officers of the Trust, all of whom receive
remuneration for their services to the Trust from MFS. Certain of the officers
and Trustees of the Trust are officers or directors of MFS, MFS Fund
Distributors, Inc. (MFD) and MFS Service Center, Inc. (MFSC). The Trust has an
unfunded defined benefit plan for all of its independent Trustees and Mr.
Bailey. Included in Trustees' compensation for the MFS Money Market Fund and the
MFS Government Money Market Fund is a net periodic pension expense of $9,898 and
$2,099, respectively, for the year ended August 31, 1995.
Shareholder Servicing Agent - MFSC, a wholly owned subsidiary of MFS, earns a
fee for its services as shareholder servicing agent. The fee is calculated as a
percentage of the average daily net assets of each Fund at an effective annual
rate of 0.15%.
(4) Portfolio Securities
Purchases and sales of money market investments, exclusive of securities subject
to repurchase agreements for MFS Money Market Fund, aggregated $4,610,280,786
and $4,672,541,608, respectively.
Purchases and sales of money market investments, exclusive of securities subject
to repurchase agreements for MFS Government Money Market Fund, were $574,391,657
and $577,610,709, respectively.
(5) Shares of Beneficial Interest
The Trust's Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest (without par value)
of each Fund.
(6) Line of Credit
The Trust entered into an agreement which enables it to participate with other
funds managed by MFS in an unsecured line of credit with a bank which permits
borrowings up to $350 million, collectively. Borrowings may be made to
temporarily finance the repurchase of Trust 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 fees allocated to the MFS Money Market Fund and the
MFS Government Money Market Fund were $7,073 and $505 respectively, for the year
ended August 31, 1995.
10
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Trustees of MFS Series Trust IV and the Shareholders of MFS Money Market
Fund and MFS Government Money Market Fund:
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of MFS Money Market Fund and MFS Government Money
Market Fund as of August 31, 1995, the related statements of operations for the
year then ended and the ten months ended August 31, 1994, the statements of
changes in net assets for the year ended August 31, 1995, the ten months ended
August 31, 1994 and the year ended October 31, 1993, and the financial
highlights for each of the years in the ten-year period ended August 31, 1995.
These financial statements and financial highlights are the responsibility of
the Trust'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
August 31, 1995 by correspondence with the custodian. 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 Money Market
Fund and MFS Government Money Market Fund at August 31, 1995, the results of
their operations, the changes in their net assets, and their financial
highlights for the respective stated periods in conformity with generally
accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
October 6, 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.
11
<PAGE>
MFS INVESTMENT OPPORTUNITIES
MUTUAL FUNDS
The MFS Family of Funds, shown on the facing page, falls into the eight general
categories below. All offer full-time professional management, a diversified
portfolio, and a wide array of shareholder services.
STOCK FUNDS seek growth of capital rather than income through investments in
stocks.
STOCK AND BOND FUNDS seek current income and growth of capital through
investments in both stocks and bonds.
BOND FUNDS seek current income through investments in debt securities.
WORLD FUNDS seek stock, balanced, and bond fund objectives through investments
in U.S. and foreign stocks and bonds.
LIMITED-MATURITY FUNDS seek current income and preservation of capital through
investments in debt securities with remaining maturities of five years or less.
National tax-free bond funds seek current income exempt from federal income tax
through investments in debt securities issued by states and municipalities.1
STATE TAX-FREE BOND FUNDS seek current income exempt from federal and state
income taxes through investments in debt securities issued by a single state and
its municipalities.1
MONEY MARKET FUNDS seek preservation of capital and current income through
investments in short-term debt securities.2
To determine which MFS fund may be appropriate for you, please contact your
financial adviser, who can help you relate these investment opportunities to
your financial goals. If you prefer, you may call MFS Investor Information for
literature3 on MFS products and services: 1-800-637-2929, from 9 a.m. to 5 p.m.
Eastern time any business day (leave a message anytime).
1 A small portion of the income may be subject to federal, state and/or
alternative minimum tax.
2 Investments in money market funds are not issued or guaranteed by the U.S.
government and there is no assurance that the fund will be able to maintain a
stable net asset value.
3 Including a prospectus containing more complete information including charges
and expenses. Read the prospectus carefully before investing.
12
<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 MFS at 1-800-637-2929
any business day from 9 a.m. to 5 p.m. Eastern time (or, leave a message any
time). This material should be read carefully before investing or sending money.
STOCK
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Massachusetts Investors Trust
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Massachusetts Investors Growth Stock Fund
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MFS [R] Capital Growth Fund
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MFS [R] Emerging Growth Fund
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MFS [R] Gold & Natural Resources Fund
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MFS [R] Growth Opportunities Fund
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MFS [R] Managed Sectors Fund
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MFS [R] OTC Fund
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MFS [R] Research Fund
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MFS [R] Value Fund
STOCK AND BOND
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MFS [R] Total Return Fund
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MFS [R] Utilities Fund
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BOND
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MFS [R] Bond Fund
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MFS [R] Government Mortgage Fund
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MFS [R] Government Securities Fund
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MFS [R] High Income Fund
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MFS [R] Intermediate Income Fund
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MFS [R] Strategic Income Fund
(formerly MFS [R] Income & Opportunity Fund)
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LIMITED MATURITY BOND
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MFS [R] Government Limited Maturity Fund
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MFS [R] Limited Maturity Fund
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MFS [R] Municipal Limited Maturity Fund
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WORLD
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MFS [R] World Asset Allocation Fund
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MFS [R] World Equity Fund
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MFS [R] World Governments Fund
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MFS [R] World Growth Fund
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MFS [R] World Total Return Fund
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NATIONAL TAX-FREE BOND
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MFS [R] Municipal Bond Fund
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MFS [R] Municipal High Income Fund
(closed to new investors)
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MFS [R] Municipal Income Fund
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STATE TAX-FREE BOND
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Alabama, Arkansas, California, Florida,
Georgia, Louisiana, Maryland, Massachusetts, Mississippi, New York,
North Carolina, Pennsylvania,
South Carolina, Tennessee, Texas, Virginia, Washington, West Virginia
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MONEY MARKET
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MFS [R] Cash Reserve Fund
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MFS [R] Government Money Market Fund
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MFS [R] Money Market Fund
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<PAGE>
MFS [R] MONEY Bulk Rate
MARKET FUND U.S. Postage
P A I D
MFS [R] Permit #55638
GOVERNMENT Boston, MA
MONEY MARKET
FUND
500 Boylston Street
Boston, MA 02116
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MCM-2-10/95 39M 10/31/22
