<PAGE>
[Logo] M F S(R)
INVESTMENT MANAGEMENT
WE INVENTED THE MUTUAL FUND(R)
[graphic omitted]
MFS(R) MONEY
MARKET FUND
MFS(R) GOVERNMENT
MONEY MARKET FUND
SEMIANNUAL REPORT o FEBRUARY 29, 2000
- --------------------------------------------------------------------------------
MUTUAL FUND GIFT KITS (see page 19)
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<PAGE>
TABLE OF CONTENTS
Letter from the Chairman .................................................. 1
Management Review and Outlook ............................................. 4
Portfolio of Investments .................................................. 8
Financial Statements ...................................................... 11
Notes to Financial Statements ............................................. 16
Trustees and Officers ..................................................... 21
MFS(R) ORIGINAL RESEARCH(SM)
RESEARCH HAS BEEN CENTRAL TO INVESTMENT MANAGEMENT AT MFS
SINCE 1932, WHEN WE CREATED ONE OF THE FIRST IN-HOUSE
RESEARCH DEPARTMENTS IN THE MUTUAL FUND (SM)
INDUSTRY. ORIGINAL RESEARCH(SM) AT MFS IS MORE ORIGINAL RESEARCH
THAN JUST CRUNCHING NUMBERS AND CREATING
ECONOMIC MODELS: IT'S GETTING TO KNOW MFS
EACH SECURITY AND EACH COMPANY PERSONALLY.
MAKES A DIFFERENCE
- --------------------------------------------------------------------------------
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
- --------------------------------------------------------------------------------
<PAGE>
LETTER FROM THE CHAIRMAN
[Photo of Jeffrey L. Shames]
Jeffrey L. Shames
Dear Shareholders,
One could easily argue that the Internet represents the greatest technological
development most of us may see in our lifetimes. There is no disputing that this
new communication medium is changing forever the way we work, play, and shop.
One might also argue that investing in this new technology represents the
investment opportunity of a lifetime. The question for any investor is whether
and how to take advantage of it.
The popular press, it seems, would have us believe that by surfing the Web, we
can learn everything we need to know about investing. Indeed, there is no doubt
that Internet-delivered information and brokerage services enable individual
investors to be well informed and to trade at bargain prices. But we believe the
numbers and facts argue that, for most of us, mutual funds purchased through an
investment professional will continue to be one of the best products for
long-term investing in this new millennium.
According to a survey by the Investment Company Institute, the national
association of American investment companies, 44% of American households own
stock or bond mutual funds, while only 25.5% own individual stocks.(1) Of course
that doesn't tell us how well they did owning those funds or stocks, but another
statistic gives us a clue. In the third quarter of 1999, during a period of
volatility in the greatest bull market in history, a quarter of the 7,500 stocks
tracked by Morningstar, a popular rating service, lost more than 20% of their
value. But during the same period, fewer than 1% of the mutual funds tracked by
Morningstar -- 6 out of 10,000 funds -- were down by a similar amount.(2) So an
investor's chance of picking one of those losing stocks was about 25 times
greater than his or her chance of picking an equally losing fund.
The numbers also show that a majority of Americans seek professional advice when
buying mutual funds. Outside of employer-sponsored retirement plans,
approximately 68% of fund shareholders state that their primary method of
purchasing shares is through an investment professional.(1)
Why do we at MFS(R) believe that mutual funds plus professional advice will
continue to define the best course of action for many investors? Let's look at
some of the characteristics of a successful long-term investment approach:
o HAVING A PLAN AND STICKING TO IT: Our experience is that successful investors
-- those whose lives are enriched by the fruits of their investing -- share
two characteristics. They have a plan for reaching their monetary goals, and
they stick with that plan through up as well as down markets. And for many
investors, working with an investment professional may be the best way to
develop a plan. Although the Internet abounds with calculators for developing
all sorts of investment plans, none has your investment professional's high
level of experience and an understanding of your unique situation. And no
calculator can counsel you during a down market, when you may be tempted to
abandon your goals and your plan.
o DIVERSIFICATION: Few investors can afford to own a large number of holdings,
so poor performance of one company can potentially drag down their entire
portfolio. This is especially true when investing in volatile new areas such
as the Internet. On the other hand, a diversified mutual fund that owns
dozens or even hundreds of holdings is better positioned to survive a
disappointment in one or several investments.
o GOOD IN A DOWN MARKET: As we enter the tenth year of the greatest bull market
in history, it's easy to forget that market downturns are an almost
inevitable part of investing. Few mutual funds, of course, are going to be up
when the overall market is down. But as the numbers above from the third
quarter of 1999 demonstrate, mutual funds may be less likely to suffer the
extreme downturns experienced by a large number of individual holdings when
the market heads south.
o MFS ORIGINAL RESEARCH(R): The Internet is one of the greatest research tools
ever invented, but it's still not the same as being eyeball to eyeball with
the management of a company and discussing their plans for their firm's
future.
o GOOD PERFORMANCE AT AN ACCEPTABLE LEVEL OF RISK: Investing in individual
stocks or bonds does indeed offer the potential of exhilarating performance
that few mutual funds even attempt. The downside is that the most exciting
investments are also likely to be the ones that give you sleepless nights.
The diversification and professional management of mutual funds help make
them inherently less risky than individual stock picking, and funds are
available in a wide range of risk profiles.
We believe that now, more than ever, mutual funds sold by an investment
professional may offer many investors the best way to participate in whatever
investment opportunities the new millennium may bring. The combination of
professional portfolio management and professional advice recognizes the key
reason that investors give us their money: because they don't want to make a
hobby or a second profession out of investing; they simply want their money to
work for them so they have a better likelihood of realizing their dreams.
As always, we appreciate your confidence in MFS and welcome any questions or
comments you may have.
Respectfully,
/s/ Jeffrey L. Shames
Jeffrey L. Shames
Chairman and Chief Executive Officer
MFS Investment Management(R)
March 15, 2000
- --------------
(1) Source: Investment Company Institute.
(2) Source: Morningstar CEO Don Phillips' keynote address at The Baltimore Sun's
Dollars and Sense Conference, 10/99. In the period 7/1/99 through 9/ 30/99,
of the 7,500 stocks tracked by Morningstar, 1,865 lost 20% or more; of the
10,000 mutual funds tracked by Morningstar, six lost 20% or more. Mutual
fund results are at net asset value; if sales charges had been reflected,
results would have been lower.
Investments in mutual funds will fluctuate and may be worth more or less upon
redemption.
The opinions expressed in this letter are those of Jeffrey L. Shames, and no
forecasts can be guaranteed.
<PAGE>
MANAGEMENT REVIEW AND OUTLOOK
[Photo of Jean O. Allesandro]
Jean O. Alessandro
Dear Shareholders,
During the past six months, short-term interest rates have been quite volatile.
The seven-day annualized yield on an investment in MFS(R) MONEY MARKET FUND for
the period ended February 29, 2000, was 5.35%, versus 4.70% for the same period
ended August 31, 1999. MFS(R) GOVERNMENT MONEY MARKET FUND'S seven-day yield was
5.06%, compared to 4.51% six months ago. For the six months ended February 29,
2000, MFS(R) MONEY MARKET FUND provided a total return of 2.57%, compared to
2.44% for the average money market fund tracked by Lipper Inc., an independent
firm that reports mutual fund performance. MFS GOVERNMENT MONEY MARKET FUND'S
six-month total return for the period ended February 29, 2000, was 2.34%, versus
2.41% for the average U.S. government money market fund tracked by Lipper Inc.
However, past performance is no guarantee of future results.
The U.S. economy continues to grow rapidly, and we are seeing evidence of an
accelerating recovery overseas. Despite encouraging productivity growth in the
United States keeping consumer prices in check, persistently strong economic
growth we feel has resulted in heightened concerns about inflation. In response,
the Federal Reserve Board (the Fed) has increased the overnight interbank
lending rate -- the federal funds rate -- two times since August 1999, resulting
in an overall increase from 5.25% to 5.75%. As a result, yields on 90-day
commercial paper and government agencies have increased approximately 60 basis
points (0.60%).
While the market has priced in some expectation of future rate hikes, we expect
short-term interest rates to move higher given the Fed's bias to continue to
raise rates over the next few months. In order to lower the Funds' sensitivity
toward interest-rate swings, we have reduced the average maturities for MFS
MONEY MARKET FUND and MFS GOVERNMENT MONEY MARKET FUND to 28 and 23 days,
respectively, versus 47 and 40 days, respectively, at the beginning of the
period. In light of our belief that the strong global economic environment and
inflation fears may persist in the near term, we will target an average maturity
near the low end of the Funds' range of 30 to 35 days.
The portfolio of MFS MONEY MARKET FUND is limited to only the highest-quality
commercial paper, repurchase agreements, and U.S. Treasury and government-
agency securities in order to provide investors with maximum security against
credit risk. On February 29, 2000, approximately 39% of the Fund's net assets
were invested in securities issued or guaranteed by the U.S. Treasury or
agencies or instrumentalities of the U.S. government, with a majority of the
assets invested in top-tier commercial paper. MFS GOVERNMENT MONEY MARKET FUND
goes one step further, investing nearly 100% of its assets in 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.
With our emphasis on quality for both Funds, we believe we will be well
positioned to provide current income, liquidity, and preservation of capital.
Respectfully,
/s/ Jean O. Alessandro
Jean O. Alessandro
Portfolio Manager
The opinions expressed in this report are those of the portfolio manager and are
current only through the end of the period of the report as stated on the cover.
The manager's views are subject to change at any time based on market and other
conditions, and no forecasts can be guaranteed.
The portfolios are actively managed, and current holdings may be different.
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER'S PROFILE
- --------------------------------------------------------------------------------
JEAN O. ALESSANDRO IS ASSISTANT VICE PRESIDENT OF MFS INVESTMENT MANAGEMENT(R)
AND PORTFOLIO MANAGER OF MFS(R) CASH RESERVE FUND, MFS(R) GOVERNMENT MONEY
MARKET FUND, MFS(R) MONEY MARKET FUND, THE MONEY MARKET SERIES OFFERED THROUGH
MFS(R)/SUN LIFE ANNUITY PRODUCTS, AND MFS(R) MONEY MARKET SERIES (PART OF MFS(R)
VARIABLE INSURANCE TRUST(SM)).
MS. ALESSANDRO JOINED MFS IN 1986 AS A FIXED-INCOME TRADING ASSISTANT. FROM 1986
TO 1990, SHE WAS A MONEY MARKET TRADER AND, FROM 1990 TO 1993, A SENIOR MONEY
MARKET SPECIALIST. SHE WAS NAMED INVESTMENT OFFICER IN 1993, PORTFOLIO MANAGER
IN 1998, AND ASSISTANT VICE PRESIDENT IN 1999. MS. ALESSANDRO EARNED A
BACHELOR'S DEGREE FROM THE UNIVERSITY OF CONNECTICUT.
ALL PORTFOLIO MANAGERS AT MFS INVESTMENT MANAGEMENT(R) ARE SUPPORTED BY AN
INVESTMENT STAFF OF OVER 100 PROFESSIONALS UTILIZING MFS ORIGINAL RESEARCH(R), A
GLOBAL, ISSUER-ORIENTED, BOTTOM-UP PROCESS OF SELECTING SECURITIES.
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. A prospectus containing more information,
including the exchange privilege and all charges and expenses, for any other MFS
product is available from your investment professional, or by calling MFS at
1-800-225-2606. Please read it carefully before investing or sending money.
<PAGE>
- --------------------------------------------------------------------------------
FUND FACTS
- --------------------------------------------------------------------------------
OBJECTIVE: THE FUNDS SEEK AS HIGH A LEVEL OF CURRENT INCOME AS IS
CONSIDERED CONSISTENT WITH THE PRESERVATION OF CAPITAL
AND LIQUIDITY.
COMMENCEMENT OF
INVESTMENT OPERATIONS: MFS MONEY MARKET FUND -- DECEMBER 19, 1975
MFS GOVERNMENT MONEY MARKET FUND -- FEBRUARY 26, 1982
SIZE: MFS MONEY MARKET FUND -- $954.6 MILLION NET ASSETS AS OF
FEBRUARY 29, 2000
MFS GOVERNMENT MONEY MARKET FUND -- $53.3 MILLION NET
ASSETS AS OF FEBRUARY 29, 2000
INVESTMENTS IN THE FUNDS ARE NEITHER INSURED NOR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH THE FUNDS
SEEK TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE
TO LOSE MONEY BY INVESTING IN THE FUNDS. SEE THE PROSPECTUS FOR DETAILS.
<PAGE>
PORTFOLIO OF INVESTMENTS (Unaudited) -- February 29, 2000
<TABLE>
<CAPTION>
MFS Money Market Fund
Commercial Paper - 95.5%
- --------------------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT
ISSUER (000 OMITTED) VALUE
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
American Express Credit Corp., due 3/22/00 $ 15,000 $ 14,949,513
American General Corp., due 5/02/00 9,000 8,908,860
Archer Daniels Midland Co., due 3/21/00 - 4/03/00 35,000 34,832,570
Associates Corp. of North America, due 3/01/00 55,000 55,000,000
AT&T Corp., due 3/09/00 10,000 9,987,378
Banc One Corp., due 3/01/00 11,800 11,800,000
BankAmerica Corp., due 5/22/00 - 6/07/00 30,400 29,949,674
Bell Atlantic Financial Services, due 4/12/00 10,000 9,931,983
Bell Atlantic Network Funding, due 3/28/00 8,900 8,861,552
Bellsouth Telecommunications, Inc.,
due 3/08/00 - 4/04/00 34,400 34,319,433
Caterpillar Financial Services NV, due 5/11/00 15,000 14,826,050
Corporacion de Fomento Andina (Barclays Bank PLC),
due 3/06/00 12,000 11,990,333
DaimlerChrysler, N.A. Holdings, due 3/13/00 - 5/18/00 20,000 19,851,750
Deutsche Bank, due 3/24/00 - 3/30/00 29,100 28,973,479
Dow Chemical Co., due 3/01/00 50,000 50,000,000
Du Pont (E.I.) de Nemours & Co., Inc.,
due 3/08/00 - 6/02/00 35,000 34,755,108
Duke Energy Corp., due 4/26/00 10,000 9,909,622
ED&F Manitoba Finance, Inc. (Rabobank), due 3/15/00 10,000 9,977,444
Formosa Plastics (ABN Amro Bank), due 4/19/00 10,000 9,919,694
General Electric Capital Corp., due 3/03/00 - 3/07/00 30,000 29,979,056
General Mills Inc., due 3/06/00 1,650 1,648,682
General Motors Acceptance Corp., due 3/01/00 55,000 55,000,000
Goldman Sachs Group LP, due 4/04/00 - 4/20/00 30,000 29,795,458
GTE Funding, Inc., due 3/02/00 - 3/21/00 33,600 33,546,397
Ing America Insurance Holdings, due 4/06/00 - 5/15/00 39,000 38,631,167
McGraw Hill, Inc., due 3/28/00 8,000 7,965,500
Merck & Co., Inc., due 3/10/00 15,000 14,978,438
Merrill Lynch & Co., Inc., due 5/23/00 - 5/24/00 25,000 24,655,731
Metropolitan Life Funding, Inc., due 3/01/00 - 3/16/00 35,000 34,971,233
Michelin North America, Inc., due 3/24/00 10,000 9,962,944
Minnesota Mining & Manufacturing Co., due 3/20/00 11,000 10,966,618
Morgan (J.P.) & Co., Inc., due 3/02/00 9,000 8,998,543
Morgan Stanley Dean Witter, due 3/22/00 - 4/13/00 30,000 29,843,979
Motorola, Inc., due 4/06/00 - 4/28/00 30,200 29,971,011
National Rural Utilities Cooperative Finance Corp.,
due 3/17/00 12,000 11,968,640
Pemex Capital, Series B (Barclays Bank PLC),
due 3/07/00 - 3/23/00 20,100 20,054,186
Pitney Bowes Credit Corp., due 3/14/00 15,000 14,968,963
Riverwoods Funding Corp., due 4/14/00 - 5/08/00 20,282 20,095,524
Salomon Smith Barney Holdings, Inc., due 3/02/00 - 5/16/00 32,000 31,785,121
Sara Lee Corp., due 3/06/00 10,000 9,991,972
Southern California Edison Co., due 3/21/00 - 4/17/00 28,000 27,847,764
UBS AG (Stamford, CT), due 12/06/00 5,000 4,997,134
- --------------------------------------------------------------------------------------------------------
Total Commercial Paper, at Amortized Cost $ 911,368,504
- --------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
PORTFOLIO OF INVESTMENTS (Unaudited) -- continued
<TABLE>
<CAPTION>
U.S. Government and Agency Obligations - 17.6%
- --------------------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT
ISSUER (000 OMITTED) VALUE
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Federal Agricultural Mortgage Corp., due 3/31/00 $ 25,000 $ 24,880,834
Federal Farm Credit Bank, due 3/07/00 11,000 10,989,367
Federal Home Loan Mortgage Corp., due 3/01/00 121,900 121,900,000
Federal National Mortgage Assn., due 5/18/00 10,300 10,174,580
- --------------------------------------------------------------------------------------------------------
Total U.S. Government and Agency Obligations, at
Amortized Cost $ 167,944,781
- --------------------------------------------------------------------------------------------------------
Repurchase Agreement - 20.9%
- --------------------------------------------------------------------------------------------------------
Goldman Sachs, dated 2/29/00, due 3/1/00, total to be
received $200,031,944 (secured by various U.S. Treasury
and Agency obligations in a jointly traded account),
at Cost $200,000 $ 200,000,000
- --------------------------------------------------------------------------------------------------------
Total Investments, at Amortized Cost and Value $ 1,279,313,285
Other Assets, Less Liabilities - (34.0%) (324,665,507)
- --------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $ 954,647,778
- --------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
<PAGE>
PORTFOLIO OF INVESTMENTS (Unaudited) -- February 29, 2000
MFS Government Money Market Fund
<TABLE>
<CAPTION>
U.S. Government and Agency Obligations - 93.6%
- --------------------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT
ISSUER (000 OMITTED) VALUE
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Federal Agricultural Mortgage Corp., due 3/01/00 $ 1,600 $ 1,600,000
Federal Farm Credit Bank, due 3/06/00 - 5/15/00 5,300 5,272,567
Federal Home Loan Bank, due 3/01/00 - 4/24/00 14,336 14,293,337
Federal Home Loan Mortgage, due 3/07/00 - 5/11/00 12,600 12,542,663
Federal National Mortgage Assn., due 3/09/00 - 5/25/00 12,300 12,207,364
Tennessee Valley Authority, due 3/16/00 2,000 1,995,317
U.S. Treasury Bills, due 4/27/00 2,000 1,978,187
- --------------------------------------------------------------------------------------------------------
Total U.S. Government and Agency Obligations, at Amortized Cost $ 49,889,435
- --------------------------------------------------------------------------------------------------------
Repurchase Agreement - 11.3%
- --------------------------------------------------------------------------------------------------------
Goldman Sachs, dated 2/29/00, due 3/1/00, total to be
received $6,000,958 (secured by various U.S. Treasury
and Federal Agency obligations), at Cost $ 6,000 $ 6,000,000
- --------------------------------------------------------------------------------------------------------
Total Investments, at Amortized Cost and Value $55,889,435
Other Assets, Less Liabilities - (4.9%) (2,595,344)
- --------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $53,294,091
- --------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (Unaudited)
- ------------------------------------------------------------------------------
MFS MONEY MFS GOVERNMENT
FEBRUARY 29, 2000 MARKET FUND MONEY MARKET FUND
- ------------------------------------------------------------------------------
Assets:
Investments, at amortized cost and
value $1,079,313,285 $49,889,435
Repurchase agreements, at cost and
value 200,000,000 6,000,000
-------------- -----------
Total investments, at amortized
cost and value $1,279,313,285 $55,889,435
Cash 1,933 70,981
Receivable for Fund shares sold 23,007,175 101,533
Interest receivable 98,879 4,752
Other assets 24,085 520
-------------- -----------
Total assets $1,302,445,357 $56,067,221
-------------- -----------
Liabilities:
Distributions payable $ 562,529 $ 7,617
Payable for Fund shares reacquired 346,939,622 2,735,135
Payable to affiliates -
Management fee 18,504 759
Shareholder servicing agent fee 4,510 152
Administrative fee 632 23
Accrued expenses and other liabilities 271,782 29,444
-------------- -----------
Total liabilities $ 347,797,579 $ 2,773,130
-------------- -----------
Net assets (represented by paid-in
capital) $ 954,647,778 $53,294,091
============== ===========
Shares of beneficial interest outstanding 954,647,778 53,294,091
=========== ==========
Net asset value, offering price, and
redemption price per share
(net assets / shares of beneficial
interest outstanding) $1.00 $1.00
===== =====
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS -- continued
Statements of Operations (Unaudited)
- ------------------------------------------------------------------------------
MFS Money Market Fund
- ------------------------------------------------------------------------------
SIX MONTHS ENDED FEBRUARY 29, 2000
- ------------------------------------------------------------------------------
Net investment income:
Interest income $ 32,950,010
------------
Expenses -
Management fee $ 2,521,400
Trustees' compensation 27,512
Shareholder servicing agent fee 581,467
Administrative fee 62,942
Custodian fee 177,992
Printing 26,488
Postage 102,619
Auditing fees 9,544
Legal fees 396
Miscellaneous 360,791
------------
Total expenses $ 3,871,151
Fees paid indirectly (147,834)
------------
Net expenses $ 3,723,317
------------
Net investment income $ 29,226,693
============
MFS Government Money Market Fund
- ------------------------------------------------------------------------------
SIX MONTHS ENDED FEBRUARY 29, 2000
- ------------------------------------------------------------------------------
Net investment income:
Interest income $ 1,520,856
------------
Expenses -
Management fee $ 137,774
Trustees' compensation 4,360
Shareholder servicing agent fee 27,555
Administrative fee 2,966
Custodian fee 13,194
Postage 4,331
Auditing fees 9,694
Legal fees 747
Miscelleneous 39,536
------------
Total expenses $ 240,157
Fees paid indirectly (9,099)
------------
Net expenses $ 231,058
------------
Net investment income $ 1,289,798
============
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS -- continued
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
- -------------------------------------------------------------------------------------------------------------
MFS Money Market Fund
- -------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 29, 2000 AUGUST 31, 1999
(UNAUDITED)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income, declared as distributions
to shareholders $ 29,226,693 $ 44,488,263
---------------- ----------------
From share (principal) transactions -
Net proceeds from sale of shares 19,537,809,957 27,617,655,370
Shares issued in reinvestment of distributions 21,859,383 32,902,497
Shares reacquired (19,684,990,587) (27,641,701,422)
---------------- ----------------
Net increase (decrease) in net assets from
Fund share transactions $ (125,321,247) $ 8,856,445
Net assets:
At beginning of period 1,079,969,025 1,071,112,580
---------------- ----------------
At end of period $ 954,647,778 $ 1,079,969,025
================ ================
<CAPTION>
MFS Government Money Market Fund
- -------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 29, 2000 AUGUST 31, 1999
(UNAUDITED)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income, declared as distributions to
shareholders $ 1,289,798 $ 2,122,589
---------------- ----------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 84,862,311 $ 163,409,640
Shares issued in reinvestment of distributions 1,197,355 2,010,227
Shares reacquired (89,839,360) (153,189,219)
---------------- ----------------
Total increase (decrease) in net assets from
Fund share transactions $ (3,779,694) $ 12,230,648
Net assets:
At beginning of period 57,073,785 44,843,137
---------------- ----------------
At end of period $ 53,294,091 $ 57,073,785
================ ================
</TABLE>
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS -- continued
<TABLE>
<CAPTION>
Financial Highlights
MFS Money Market Fund
- ------------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED AUGUST 31,
SIX MONTHS ENDED ------------------------------------------------------------------------
FEBRUARY 29, 2000 1999 1998 1997 1996 1995
(UNAUDITED)
- ------------------------------------------------------------------------------------------------------------------------------------
<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 $ 0.03 $ 0.04 $ 0.05 $ 0.05 $ 0.05 $ 0.05
Less distributions declared to
shareholders from net
investment income (0.03) (0.04) (0.05) (0.05) (0.05) (0.05)
------ ------ ------ ------ ------ ------
Net asset value - end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ====== ======
Total return 2.57%++ 4.54% 5.03% 4.61% 4.86% 5.04%
Ratios (to average net assets)/
Supplemental data:
Expenses## 0.66%+ 0.69% 0.74% 0.80% 0.79% 0.76%
Net investment income 4.97%+ 4.38% 4.88% 4.71% 4.78% 4.92%
Net assets at end of period
(000,000 omitted) $955 $1,080 $1,071 $634 $644 $411
+ Annualized.
++ Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset arrangements.
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED AUGUST 31,
SIX MONTHS ENDED ------------------------------------------------------------------------
FEBRUARY 29, 2000 1999 1998 1997 1996 1995
(UNAUDITED)
- ------------------------------------------------------------------------------------------------------------------------------------
<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 $ 0.02 $ 0.04 $ 0.05 $ 0.05 $ 0.05 $ 0.05
Less distributions declared to
shareholders from net
investment income (0.02) (0.04) (0.05) (0.05) (0.05) (0.05)
------ ------ ------ ------ ------ ------
Net asset value - end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ====== ======
Total return 2.34%++ 4.35% 4.85% 4.81% 4.73% 4.92%
Ratios (to average net assets)/
Supplemental data:
Expenses## 0.86%+ 0.78% 0.88% 0.85% 0.89% 0.84%
Net investment income 5.00%+ 4.26% 4.70% 4.02% 4.64% 4.82%
Net assets at end of period
(000 omitted) $53,294 $57,074 $44,843 $38,387 $42,499 $38,440
+ Annualized.
++ Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset arrangements.
</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 approximates market 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 Funds may enter into repurchase agreements with
institutions that the Funds' investment adviser has determined are creditworthy.
Each repurchase agreement is recorded at cost. The Funds require that the
securities collateral in a repurchase transaction be transferred to the
custodian in a manner sufficient to enable the Funds to obtain those securities
in the event of a default under the repurchase agreement. The Funds monitor, on
a daily basis, the value of the collateral to ensure that its value, including
accrued interest, is greater than amounts owed to the Fund under each such
repurchase agreement. The Funds, 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 discount is
accreted for financial statement and tax reporting purposes as required by
federal income tax regulations.
Fees Paid Indirectly - The Funds' custody fee is calculated as a percentage of
the Funds' month end net assets. The fees are reduced according to arrangements
that measure the value of cash deposited with the custodian by the Funds. These
amounts are shown as a reduction of expenses on the Statements of Operations.
Tax Matters and Distributions - The Funds' 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 their taxable
income, including any net realized gain on investments. Accordingly, no
provision for federal income or excise tax is provided.
Distributions to shareholders are recorded on the ex-dividend date. The Funds
distinguish between distributions on a tax basis and a financial reporting basis
and require 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 net realized gains.
(3) Transactions with Affiliates
Investment Adviser - The Funds have 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 the following annual rates:
First $300 million of average net assets 0.50%
Next $400 million of average net assets 0.45%
Next $300 million of average net assets 0.40%
Average net assets in excess of $1 billion 0.35%
The Funds pay 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 Funds from MFS. Certain officers and Trustees of the
Funds are officers or directors of MFS, MFS Fund Distributors, Inc. (MFD), and
MFS Service Center, Inc. (MFSC). The Funds have an unfunded defined benefit plan
for all of their 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 $10,065 and $1,690, respectively, for the six
months ended February 29, 2000.
Administrator - The Funds have an administrative services agreement with MFS to
provide the Fund with certain financial, legal, shareholder servicing,
compliance, and other administrative services. As a partial reimbursement for
the cost of providing these services, the Funds pay MFS an administrative fee at
the following annual percentages of the Funds' average daily net assets:
First $1 billion 0.0150%
Next $1 billion 0.0125%
Next $1 billion 0.0100%
In excess of $3 billion 0.0000%
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 each Fund's average daily net assets at an effective annual rate
of 0.10%.
(4) Portfolio Securities
Purchases and sales of money market investments, exclusive of securities subject
to repurchase agreements for MFS Money Market Fund, aggregated $30,292,201,935
and $30,055,112,101, respectively.
Purchases and sales of money market investments, exclusive of securities subject
to repurchase agreements for MFS Government Money Market Fund, aggregate
$341,666,822 and $347,732,758, respectively.
(5) Shares of Beneficial Interest
The Funds' Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest ($1.00 par value).
(6) Line of Credit
The Funds and other affiliated funds participate in an $820 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 fees allocated to
MFS Money Market Fund and MFS Government Money Market Fund for the six months
ended February 29, 2000, were $4,177 and $201, respectively.
<PAGE>
MFS(R) MONEY MARKET FUND
MFS(R) GOVERNMENT MONEY MARKET FUND
TRUSTEES SECRETARY
J. Atwood Ives - Chairman and Chief Stephen E. Cavan*
Executive Officer, Eastern Enterprises
(diversified services company) ASSISTANT SECRETARY
James R. Bordewick, Jr.*
Lawrence T. Perera - Partner, Hemenway
& Barnes (attorneys) CUSTODIAN
State Street Bank and Trust Company
William J. Poorvu - Adjunct Professor,
Harvard University Graduate School of INVESTOR INFORMATION
Business Administration For information on MFS mutual funds,
call your investment professional or,
Charles W. Schmidt - Private Investor for an information kit, call toll
free: 1-800-637-2929 any business day
Arnold D. Scott* - Senior Executive from 9 a.m. to 5 p.m. Eastern time (or
Vice President, Director, and leave a message anytime).
Secretary, MFS Investment Management
INVESTOR SERVICE
Jeffrey L. Shames* - Chairman and MFS Service Center, Inc.
Chief Executive Officer, MFS P.O. Box 2281
Investment Management Boston, MA 02107-9906
Elaine R. Smith - Independent For general information, call toll
Consultant free: 1-800-225-2606 any business day
from 8 a.m. to 8 p.m. Eastern time.
David B. Stone - Chairman, North
American Management Corp. (investment For service to speech- or
adviser) hearing-impaired, call toll free:
1-800-637-6576 any business day from 9
INVESTMENT ADVISER a.m. to 5 p.m. Eastern time. (To use
Massachusetts Financial Services Company this service, your phone must be
500 Boylston Street equipped with a Telecommunications
Boston, MA 02116-3741 Device for the Deaf.)
DISTRIBUTOR For share prices, account balances,
MFS Fund Distributors, Inc. exchanges, or stock and bond outlooks,
500 Boylston Street call toll free: 1-800-MFS-TALK
Boston, MA 02116-3741 (1-800-637-8255) anytime from a
touch-tone telephone.
CHAIRMAN AND PRESIDENT
Jeffrey L. Shames* WORLD WIDE WEB
www.mfs.com
PORTFOLIO MANAGER
Jean O. Alessandro*
TREASURER
W. Thomas London*
ASSISTANT TREASURERS
Mark E. Bradley*
Ellen Moynihan*
James O. Yost*
Independent Trustee
*MFS Investment Management
<PAGE>
MFS(R) MONEY MARKET FUND ------------
BULK RATE
MFS(R) GOVERNMENT MONEY MARKET FUND U.S. POSTAGE
PAID
[Logo] M F S(R) MFS
INVESTMENT MANAGEMENT ------------
We invented the mutual fund(R)
500 Boylston Street
Boston, MA 02116-3741
(c)2000 MFS Investment Management.(R)
MFS(R) investment products are offered through MFS Fund Distributors, Inc.,
500 Boylston Street, Boston, MA 02116
MCM-3 4/00 65.2M 10/310/22
