<PAGE>
[LOGO: M F S(SM)] Semiannual Report
INVESTMENT MANAGEMENT February 28, 1997
- --------------------------------------------------------------------------------
MFS(R) MONEY MARKET FUND
MFS(R) GOVERNMENT MONEY MARKET FUND
- --------------------------------------------------------------------------------
[Graphic Omitted]
- --------------------------------------------------------------------------------
LEARNING FINANCIAL BASICS THE EASY WAY (see page 15)
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Letter from the Chairman ................................................... 1
Portfolio Manager's Overview ............................................... 2
Portfolio Manager's Profile ................................................ 3
Portfolio Concentration .................................................... 3
Fund Facts ................................................................. 4
Portfolio of Investments ................................................... 5
Financial Statements ....................................................... 7
Notes to Financial Statements ..............................................12
The ABCs of Investing ......................................................15
The MFS Family of Funds(R) .................................................16
Trustees and Officers ......................................................17
HIGHLIGHTS
o DURING THE PAST SIX MONTHS, THE FEDERAL RESERVE BOARD DID NOT ADJUST
MONETARY POLICY BECAUSE ECONOMIC GROWTH HAS BEEN MODERATE, WITH FEW
SIGNS OF INFLATIONARY PRESSURES. THE FEDERAL FUNDS' RATE HAS REMAINED AT
5.25%, AND YIELDS ON 90-DAY COMMERCIAL PAPER STAYED RELATIVELY
UNCHANGED.
o AS A RESULT, THE ANNUALIZED COMPOUNDED YIELD ON AN INVESTMENT IN MFS
MONEY MARKET FUND FOR THE SEVEN-DAY PERIOD ENDED FEBRUARY 28, 1997 WAS
4.78%, VERSUS 4.72% FOR THE SEVEN-DAY PERIOD ENDED AUGUST 31, 1996. THE
ANNUALIZED COMPOUNDED YIELD ON AN INVESTMENT IN MFS GOVERNMENT MONEY
MARKET FUND WAS 4.66%, VERSUS 4.51% OVER THE SAME PERIODS.
o WE ARE CONCERNED ABOUT THE POSSIBILITY OF INFLATIONARY PRESSURES IN THE
NEXT FEW MONTHS AND BELIEVE, THEREFORE, THAT SHORT-TERM INTEREST RATES
WILL REMAIN FLAT, WITH AN UPWARD BIAS.
<PAGE>
LETTER FROM THE CHAIRMAN
[Photo of A. Keith Brodkin]
Dear Shareholders:
After more than six years of expansion, the U.S. economy appears to be
experiencing another year of moderate growth in 1997, although a few signs point
to the possibility of a modest rise in inflation during the year. On the
positive side, the pattern of moderate growth and inflation set over the past
few years now seems fairly well entrenched in the economy and, short of a major
international or domestic crisis, appears to have enough momentum to remain on
track for some time. Also, gains in such important sectors as housing,
automobiles, industrial production, and exports indicate a fair amount of
underlying strength in the economy. However, some reason for caution can be seen
in the continuing high levels of consumer debt and rising personal bankruptcies,
as well as in the ongoing tightness in labor markets, which could add some
inflationary pressures to the economy. Given these somewhat conflicting
indicators, we expect real (inflation-adjusted) growth to revolve around 2% in
1997, which would represent a modest decline from 1996.
In the bond markets, conflicting signals over the strength of the economy have
created near-term volatility, while comments by Federal Reserve Board Chairman
Alan Greenspan late in 1996 and earlier this year created some uncertainty about
the Federal Reserve's next move. However, we expect the Fed to maintain its
anti-inflationary stance should signs of more rapid economic growth and,
particularly, of higher inflation resurface. While inflationary forces largely
remained in check in 1996, the continued strength in the labor market means that
a pickup in inflation is still possible. At the same time, the U.S. budget
deficit continues to decline and, as a percentage of gross domestic product, is
now less than 2%, which we consider a positive development for the bond markets.
Although interest rates may move higher over the coming months, we believe that,
at current levels, fixed-income markets remain equitably valued.
We appreciate your support and welcome any questions or comments you may have.
Respectfully,
/s/ A. Keith Brodkin
- --------------------
A. Keith Brodkin
Chairman and President
March 11, 1997
<PAGE>
PORTFOLIO MANAGER'S OVERVIEW
[Photo of Geoffrey L. Kurinsky]
Geoffrey L. Kurinsky
Dear Shareholders:
Since August 31, 1996, short-term interest rates have remained stable. As a
result, the annualized compounded yield on an investment in MFS(R) MONEY MARKET
FUND for the seven-day period ended February 28, 1997 was 4.78%, versus 4.72%
for the seven-day period ended August 31, 1996. The annualized compounded yield
on an investment in MFS(R) GOVERNMENT MONEY MARKET FUND was 4.66%, versus 4.51%
over the same period.
During the past six months, the Federal Reserve Board did not adjust monetary
policy because economic growth has been moderate, with few signs of inflationary
pressures. The federal funds' rate (the interest rate charged by banks to other
banks in need of overnight loans) has remained at 5.25% for the entire period.
As a result, yields on 90-day commercial paper stayed relatively unchanged. We
are concerned about the possibility of inflationary pressures in the next few
months and believe, therefore, that short-term interest rates will remain flat,
with an upward bias.
Our money market fund average maturities have been neutral over the past six
months. The average maturities for MFS MONEY MARKET FUND and MFS GOVERNMENT
MONEY MARKET FUND on February 28, 1997 were 41 and 43 days, respectively, versus
42 and 35 days on August 31, 1996. The Funds are positioned in an effort to take
advantage of higher yields should the economy begin to accelerate.
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 security against credit risk. On February 28, 1997,
approximately 46% of this Fund's net assets were 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 obtain current income and, at the
same time, preserve capital and liquidity.
Respectfully,
/s/ Geoffrey L. Kurinsky
- ------------------------
Geoffrey L. Kurinsky
Portfolio Manager
PORTFOLIO MANAGER'S PROFILE
GEOFFREY L. 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.
PORTFOLIO CONCENTRATION AS OF FEBRUARY 28, 1997
MFS MONEY MARKET FUND
[graphic omitted: pie chart]
Commercial Paper 44.7%
U.S. Government & Agency Obligations 31.2%
Repurchase Agreements 24.1%
For a more complete breakdown, refer to Portfolio of Investments.
MFS GOVERNMENT MONEY MARKET FUND
[graphic omitted: pie chart]
U.S. Government & Agency Obligations 95.0%
U.S. Treasury Obligations 1.2%
Repurchase Agreements 3.8%
For a more complete breakdown, refer to Portfolio of Investments.
FUND FACTS
STRATEGY: THE INVESTMENT OBJECTIVE OF EACH FUND IS TO SEEK AS
HIGH A LEVEL OF CURRENT INCOME AS IS CONSIDERED
CONSISTENT WITH THE PRESERVATION OF CAPITAL AND
LIQUIDITY. INVESTMENTS IN THE FUND ARE NEITHER
INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT, AND
THERE IS NO ASSURANCE THAT THE FUND WILL BE ABLE
TO MAINTAIN A STABLE NET ASSET VALUE.
COMMENCEMENT OF
INVESTMENT OPERATIONS: MFS MONEY MARKET FUND - DECEMBER 19, 1975
MFS GOVERNMENT MONEY MARKET FUND - FEBRUARY 26, 1982
SIZE: MFS MONEY MARKET FUND - $653.0 MILLION NET ASSETS
AS OF FEBRUARY 28, 1997
MFS GOVERNMENT MONEY MARKET FUND - $37.2 MILLION
NET ASSETS AS OF FEBRUARY 28, 1997
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED) - February 28, 1997
<TABLE>
<CAPTION>
MFS Money Market Fund
Commercial Paper - 45.5%
- ----------------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Abbott Laboratories, due 3/13/97 $ 9,620 $ 9,603,229
Associates Corp. of America, due 3/28/97 - 5/01/97 19,200 19,077,554
Bank of America, due 3/07/97 - 4/10/97 22,000 21,930,038
BankAmerica Corp., due 3/11/97 9,000 8,986,700
Bankers Trust Corp., due 6/04/97 - 6/13/97 19,000 18,723,951
Beneficial Corp., due 4/09/97 12,400 12,328,803
Disney Walt Company, due 5/12/97 5,000 4,947,700
du Pont (E. I.) de Nemours & Co., due 6/18/97 15,000 14,759,292
Ford Motor Credit Corp., due 3/20/97 - 4/28/97 23,600 23,451,767
General Motors Acceptance Corp., due 4/16/97 - 4/21/97 20,120 19,971,874
Goldman Sachs Group LP, due 4/23/97 - 4/25/97 20,000 19,839,789
Kellogg Co., due 3/25/97 10,000 9,964,667
Kimberly Clark Corp., due 3/31/97 10,300 10,255,195
Knight-Ridder, Inc., due 3/12/97 - 4/11/97 18,000 17,936,216
Merrill Lynch & Co., Inc., due 4/08/97 - 5/29/97 21,000 20,791,942
Motorola, Inc., due 4/29/97 8,700 8,625,571
Nationsbank Corp., due 4/18/97 8,400 8,340,416
Pacific Gas & Electric Co., due 3/28/97 7,851 7,820,087
Procter & Gamble Co., due 6/02/97 10,000 9,865,408
Sara Lee Corp., due 3/27/97 10,000 9,961,722
Transamerica Co., due 4/11/97 10,000 9,939,753
Weyerhaeuser Co., due 4/07/97 10,000 9,945,630
- ----------------------------------------------------------------------------------------------
Total Commercial Paper, at Amortized Cost $297,067,304
- ----------------------------------------------------------------------------------------------
U.S. Government and Agency Obligations - 33.5%
- ----------------------------------------------------------------------------------------------
Federal Farm Credit Bank, due 5/09/97 $ 12,500 $ 12,361,822
Federal Home Loan Bank, due 3/06/97 - 4/24/97 19,200 19,115,206
Federal Home Loan Mortgage Corp., due 4/10/97 - 5/23/97 63,800 63,196,264
Federal National Mortgage Assn., due 3/06/97 - 6/17/97 111,300 110,352,381
Student Loan Marketing Assn., due 3/17/97 14,100 14,059,353
- ----------------------------------------------------------------------------------------------
Total U.S. Government and Agency Obligations, at Amortized Cost $219,085,026
- ----------------------------------------------------------------------------------------------
Repurchase Agreement - 25.3%
- ----------------------------------------------------------------------------------------------
Investments in repurchase agreements with Goldman Sachs,
in a joint trading account ($165,000,000 par), dated
2/28/97, due 3/01/97, total to be received by the Fund,
$165,073, 563, collateralized by various U.S. Treasury
and federal agency obligations (with $374,253,000 par
and valued at $382,556,000), at Cost $165,000 $165,000,000
- ----------------------------------------------------------------------------------------------
Total Investments, at Amortized Cost $681,152,330
Other Assets, Less Liabilities - (4.3)% (28,136,527)
- ----------------------------------------------------------------------------------------------
Net Assets - 100.0% $653,015,803
- ----------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED) - February 28, 1997
<TABLE>
<CAPTION>
MFS Government Money Market Fund
U.S. Government and Agency Obligations - 94.8%
- ----------------------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Federal Farm Credit Bank, due 3/13/97 - 5/09/97 $5,050 $ 5,023,550
Federal Home Loan Bank, due 3/27/97 - 5/14/97 6,445 6,391,874
Federal Home Loan Mortgage Corp., due 3/24/97 - 4/23/97 4,855 4,829,077
Federal National Mortgage Assn., due 4/24/97 - 6/06/97 6,880 6,808,060
Student Loan Marketing Assn., due 3/10/97 5,700 5,681,696
Tennessee Valley Authority, due 3/05/97 - 4/17/97 6,550 6,525,171
- ----------------------------------------------------------------------------------------------
Total U.S. Government and Agency Obligations, at Amortized Cost $35,259,428
- ----------------------------------------------------------------------------------------------
U.S. Treasury Obligation - 1.3%
- ----------------------------------------------------------------------------------------------
U.S. Treasury Bills, due 5/29/97 $ 500 $ 493,838
- ----------------------------------------------------------------------------------------------
Repurchase Agreement - 3.8%
- ----------------------------------------------------------------------------------------------
Investments in repurchase agreements with Goldman Sachs,
in a joint trading account ($1,400,000 par), dated 2/28/97,
due 3/01/97, total to be received by the Fund, $1,400,624,
collateralized by various U.S. Treasury and federal agency
obligations (with $374,253,000 par and valued at
$382,556,000), at Cost $1,400 $ 1,400,000
- ----------------------------------------------------------------------------------------------
Total Investments, at Amortized Cost $37,153,266
Other Assets, Less Liabilities - 0.1% 26,401
- ----------------------------------------------------------------------------------------------
Net Assets - 100.0% $37,179,667
- ----------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Statements of Assets and Liabilities (Unaudited)
- -------------------------------------------------------------------------------------------------
MFS Money MFS Government
February 28, 1997 Market Fund Money Market Fund
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Assets:
Investments, at amortized cost and value $516,152,330 $35,753,266
Repurchase agreements, at amortized cost and value 165,000,000 1,400,000
------------ -----------
Total investments, at amortized cost and value $681,152,330 $37,153,266
Cash 593,901 92,098
Receivable for Fund shares sold 15,659,869 11,349
Interest receivable 24,521 208
Other assets 4,757 603
------------ -----------
Total assets $697,435,378 $37,257,524
------------ -----------
Liabilities:
Distributions payable $ 178,659 $ 5,797
Payable for Fund shares reacquired 44,142,714 60,097
Payable to affiliates -
Management fee 8,394 513
Shareholder servicing agent fee 2,306 133
Accrued expenses and other liabilities 87,502 11,317
------------ -----------
Total liabilities $ 44,419,575 $ 77,857
------------ -----------
Net assets (represented by paid-in capital) $653,015,803 $37,179,667
============ ===========
Shares of beneficial interest outstanding 653,015,803 37,179,667
=========== ==========
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
<PAGE>
FINANCIAL STATEMENTS - continued
Statements of Operations (Unaudited)
- -----------------------------------------------------------------------------
Six Months Ended
MFS Money Market Fund February 28, 1997
- -----------------------------------------------------------------------------
Net investment income:
Interest income $15,297,994
-----------
Expenses -
Management fee $ 1,348,860
Trustees' compensation 16,726
Shareholder servicing agent fee 399,902
Custodian fee 115,927
Printing 49,193
Postage 69,918
Auditing fees 7,042
Legal fees 1,581
Miscellaneous 224,515
-----------
Total expenses $ 2,233,664
Fees paid indirectly (98,565)
-----------
Net expenses $ 2,135,099
-----------
Net investment income $13,162,895
===========
Six Months Ended
MFS Government Money Market Fund February 28, 1997
- -----------------------------------------------------------------------------
Net investment income:
Interest income $ 974,317
----------
Expenses -
Management fee $ 91,332
Trustees' compensation 3,745
Shareholder servicing agent fee 26,197
Registration fees 8,201
Custodian fee 7,628
Auditing fees 4,449
Postage 3,280
Printing 1,509
Legal fees 205
Miscellaneous 5,973
----------
Total expenses $ 152,519
Fees paid indirectly (5,830)
----------
Net expenses $ 146,689
----------
Net investment income $ 827,628
==========
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
- -----------------------------------------------------------------------------------------------
Six Months Ended
February 28, 1997 Year Ended
MFS Money Market Fund (Unaudited) August 31, 1996
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income, declared as distributions
to shareholders $ 13,162,895 $ 23,265,808
--------------- ---------------
Fund share (principal) transactions at net asset
value of $1.00 per share -
Net proceeds from sale of shares $ 4,298,874,939 $ 5,311,229,990
Net asset value of shares issued to shareholders
in reinvestment of distributions 9,900,246 18,551,363
Cost of shares reacquired (4,299,964,304) (5,096,374,350)
--------------- ---------------
Increase in net assets from Fund share
transactions $ 8,810,881 $ 233,407,003
Net assets:
At beginning of period 644,204,922 410,797,919
--------------- ---------------
At end of period $ 653,015,803 $ 644,204,922
=============== ===============
<CAPTION>
Six Months Ended
February 28, 1997 Year Ended
MFS Government Money Market Fund (Unaudited) August 31, 1996
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income, declared as distributions
to shareholders $ 827,628 $ 1,896,221
--------------- ---------------
Fund share (principal) transactions at net asset
value of $1.00 per share -
Net proceeds from sale of shares $ 37,949,277 $ 476,964,289
Net asset value of shares issued to shareholders
in reinvestment of distributions 756,196 1,585,296
Cost of shares reacquired (44,025,253) (474,489,920)
--------------- ---------------
Increase (decrease) in net assets from Fund
share transactions $ (5,319,780) $ 4,059,665
Net assets:
At beginning of period 42,499,447 38,439,782
--------------- ---------------
At end of period $ 37,179,667 $ 42,499,447
=============== ===============
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights
- -----------------------------------------------------------------------------------------------------------------
Six
Months Ten
Ended Months Year
February 28, Year Ended August 31, Ended Ended
1997 -------------------------- August 31, October 31,
MFS Money Market Fund (Unaudited) 1996 1995 1994 1993
- -----------------------------------------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
<S> <C> <C> <C> <C> <C>
Net asset value - beginning of period
$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------
Income from investment operations -
Net investment income $ 0.02 $ 0.05 $ 0.05 $ 0.02 $ 0.02
Less distributions declared to
shareholders from net investment income $(0.02) $(0.05) $(0.05) $(0.02) $(0.02)
------ ------ ------ ------ ------
Net asset value - end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ======
Total return 4.67%+ 4.86% 5.04% 2.91%+ 2.39%
Ratios (to average net assets)/Supplemental data:
Expenses# 0.78%+ 0.79% 0.76% 0.78%+ 0.83%
Net investment income 4.62%+ 4.78% 4.92% 2.95%+ 2.39%
Net assets at end of period (000 omitted) $653,016 $644,205 $410,798 $435,780 $350,316
<CAPTION>
Year Ended October 31,
----------------------------------------------------------------------
MFS Money Market Fund 1992 1991 1990 1989 1988
- -----------------------------------------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
<S> <C> <C> <C> <C> <C>
Net asset value - beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------
Income from investment operations -
Net investment income $ 0.03 $ 0.06 $ 0.07 $ 0.08 $ 0.07
Less distributions declared to
shareholders from net investment income $(0.03) $(0.06) $(0.07) $(0.08) $(0.07)
------ ------ ------ ------ ------
Net asset value - end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ======
Total return 3.35% 6.07% 7.99% 8.84% 7.12%
Ratios (to average net assets)/Supplemental data:
Expenses 0.87% 0.82% 0.76% 0.83% 0.83%
Net investment income 3.36% 5.94% 7.60% 8.45% 6.72%
Net assets at end of period (000 omitted) $448,825 $541,945 $677,164 $676,382 $664,895
+Annualized.
#For fiscal years ending after September 1, 1995, the Fund's expenses are calculated without reduction for fees paid indirectly.
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights - continued
- -----------------------------------------------------------------------------------------------------------------
Six
Months Ten
Ended Months Year
February 28, Year Ended August 31, Ended Ended
1997 -------------------------- August 31, October 31,
MFS Government Money Market Fund (Unaudited) 1996 1995 1994 1993
- -----------------------------------------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
<S> <C> <C> <C> <C> <C>
Net asset value - beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------
Income from investment operations -
Net investment income $ 0.02 $ 0.05 $ 0.05 $ 0.02 $ 0.02
Less distributions declared to
shareholders from net investment income $(0.02) $(0.05) $(0.05) $(0.02) $(0.02)
------ ------ ------ ------ ------
Net asset value - end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ======
Total return 4.55%+ 4.73% 4.92% 2.64%+ 2.33%
Ratios (to average net assets)/Supplemental data:
Expenses# 0.83%+ 0.89% 0.84% 1.05%+ 0.99%
Net investment income 4.50%+ 4.46% 4.82% 2.64%+ 2.20%
Net assets at end of period (000 omitted) $37,180 $42,499 $38,440 $38,347 $35,576
<CAPTION>
Year Ended October 31,
----------------------------------------------------------------------
MFS Government Money Market Fund 1992 1991 1990 1989 1988
- -----------------------------------------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
<S> <C> <C> <C> <C> <C>
Net asset value - beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------
Income from investment operations -
Net investment income $ 0.03 $ 0.06 $ 0.07 $ 0.08 $ 0.06
Less distributions declared to
shareholders from net investment income $(0.03) $(0.06) $(0.07) $(0.08) $(0.06)
------ ------ ------ ------ ------
Net asset value - end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ======
Total return 3.27% 5.68% 7.55% 8.61% 6.47%
Ratios (to average net assets)/Supplemental data:
Expenses 0.87% 0.83% 0.80% 0.85% 0.74%
Net investment income 3.28% 5.53% 7.34% 8.29% 6.29%
Net assets at end of period (000 omitted) $47,629 $50,655 $53,701 $51,619 $50,343
+Annualized.
#For fiscal years ending after September 1, 1995, the Fund's expenses are calculated without reduction for fees paid indirectly.
</TABLE>
See notes to financial statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(1) Business and Organization
MFS Money Market Fund and MFS Government Money Market Fund (the Funds) 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
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.
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. The
Trust, along with other affiliated entities of Massachusetts Financial Services
Company (MFS), may utilize a joint trading account for the purpose of entering
into one or more repurchase agreements.
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.
Fees Paid Indirectly - The Fund's custodian bank calculates its fee based on the
Fund's average daily net assets. The fee is reduced according to a fee
arrangement, which provides for custody fees to be reduced based on a formula
developed to measure 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 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 taxable
income, including any net realized gain on investments. Accordingly, no
provision for federal income or excise tax is provided. The Funds file 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. Distributions to
shareholders are recorded on the ex-dividend date.
(3) Transactions with Affiliates
Investment Adviser - The Funds have a separate investment advisory agreement
with Massachusetts Financial Services (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 0.47% and
0.50% of average daily net assets for the MFS Money Market and MFS Government
Money Market Fund, respectively.
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 its independent Trustees and Mr. Bailey.
Included in Trustees' compensation for MFS Money Market Fund and MFS Government
Money Market Fund are net periodic pension expenses of $4,923 and $8,448 for the
six months ended February 28, 1997.
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 0.13%. Prior to January 1, 1997, the fee was calculated as a percentage
of the average daily net assets of each class of shares at an effective annual
rate of up to 0.15%.
(4) Portfolio Securities
Purchases and sales of money market investments, exclusive of securities subject
to repurchase agreements for MFS Money Market Fund, aggregated $14,775,724,686
and $14,748,677,618, respectively.
Purchases and sales of money market investments, exclusive of securities subject
to repurchase agreements for MFS Government Money Market Fund, aggregated
$391,743,832 and $398,241,000, 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).
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
MFS Money Market Fund
Six Months Ended Year Ended
February 28, 1997 August 31, 1996
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Shares sold 4,298,874,939 5,311,229,990
Shares issued to shareholders in reinvestment of
distributions 9,900,246 18,551,363
Shares reacquired (4,299,964,304) (5,096,374,350)
------------- -------------
Net increase 8,810,881 233,407,003
============= =============
<CAPTION>
MFS Government Money Market Fund
Six Months Ended Year Ended
February 28, 1997 August 31, 1996
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Shares sold 37,949,277 476,964,289
Shares issued to shareholders in reinvestment of
distributions 756,196 1,585,296
Shares reacquired (44,025,253) (474,489,920)
------------- -------------
Net increase (decrease) (5,319,780) 4,059,665
============= =============
</TABLE>
(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 $400 million, collectively. Borrowings may be made to
temporarily finance the repurchase of Fund shares. Interest is charged to each
fund, based on its borrowings, at a rate equal to the bank's base rate. In
addition, a commitment fee, based on the average daily unused portion of the
line of credit, is allocated among the participating funds at the end of each
quarter. The commitment fees allocated to MFS Money Market Fund and MFS
Government Money Market Fund were $2,565 and $160, respectively, for the six
months ended February 28, 1997.
--------------------------------------------
This report is prepared for the general information of shareholders. It is
authorized for distribution to prospective investors only when preceded or
accompanied by a current prospectus.
<PAGE>
MFS(R) MONEY MARKET FUND
MFS(R) GOVERNMENT MONEY MARKET FUND
<TABLE>
<C> <C>
TRUSTEES INVESTOR INFORMATION
A. Keith Brodkin* - Chairman and President For MFS stock and bond market outlooks, call
toll free: 1-800-637-4458 anytime from a
Richard B. Bailey* - Private Investor; touch-tone telephone.
Former Chairman and Director (until 1991),
Massachusetts Financial Services Company; For information on MFS mutual funds, call
Director, Cambridge Bancorp; Director, your financial adviser or, for an information
Cambridge Trust Company kit, call toll free: 1-800-637-2929 any
business day from 9 a.m. to 5 p.m. Eastern
Peter G. Harwood - Private Investor time (or leave a message anytime).
J. Atwood Ives - Chairman and Chief Executive INVESTOR SERVICE
Officer, Eastern Enterprises MFS Service Center, Inc.
P.O. Box 2281
Lawrence T. Perera - Partner, Hemenway & Boston, MA 02107-9906
Barnes
William J. Poorvu - Adjunct Professor, For general information, call toll free:
Harvard University Graduate School of 1-800-225-2606 any business day from
Business Administration 8 a.m. to 8 p.m. Eastern time.
Charles W. Schmidt - Private Investor
For service to speech- or hearing-impaired,
Arnold D. Scott* - Senior Executive Vice call toll free: 1-800-637-6576 any business
President, Director and Secretary, day from 9 a.m. to 5 p.m. Eastern time. (To
Massachusetts Financial Services Company use this service, your phone must be equipped
with a Telecommunications Device for the
Jeffrey L. Shames* - President and Director, Deaf.)
Massachusetts Financial Services Company
For share prices, account balances, and
Elaine R. Smith - Independent Consultant exchanges, call toll free: 1-800-MFS-TALK
(1-800-637-8255) anytime from a touch-tone
David B. Stone - Chairman, North American telephone.
Management Corp. (investment advisers)
WORLD WIDE WEB
INVESTMENT ADVISER www.mfs.com
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* [DALBAR For the third year in a row,
LOGO] MFS earned a #1 ranking in the
TREASURER TOP RATED DALBAR, Inc. Broker/Dealer
W. Thomas London* SERVICE Survey, Main Office Operations
Service Quality Category. The
ASSISTANT TREASURER firm achieved a 3.48 overall score on a
James O. Yost* scale of 1 to 4 in the 1996 survey. A total
of 110 firms responded, offering input on the
SECRETARY quality of service they received from 29
Stephen E. Cavan* mutual fund companies nationwide. The survey
contained questions about service quality in
ASSISTANT SECRETARY 15 categories, including "knowledge of phone
James R. Bordewick, Jr.* service contacts," "accuracy of transaction
processing," and "overall ease of doing
CUSTODIAN business with the firm."
State Street Bank and Trust Company
*Affiliated with the Investment Adviser
</TABLE>
<PAGE>
-------------
MFS(R) MONEY [DALBAR LOGO: #1 BULK RATE
MARKET FUND TOP RATED SERVICE] U.S. POSTAGE
PAID
MFS(R) GOVERNMENT PERMIT #55638
MONEY MARKET BOSTON, MA
FUND -------------
500 Boylston Street
Boston, MA 02116-3741
[LOGO: M F S(SM)]
INVESTMENT MANAGEMENT
We invented the mutual fund(SM)
(C)1997 MFS Fund Distributors, Inc., 500 Boylston Street, Boston, MA 02116-3741
MCM-3 4/97 48M 10/310/22
