<PAGE>
MFS BOND FUND
(A SERIES OF MFS SERIES TRUST IX)
500 BOYLSTON STREET o BOSTON o MASSACHUSETTS 02116-3741
617 o 954-5000
December 22, 1995
VIA EDGAR
- ---------
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, DC 20549
Re: MFS SERIES TRUST IX (FILE NO. 811-2464), ON BEHALF OF
MFS BOND FUND
-----------------------------------------------------
Ladies and Gentlemen:
Pursuant to the requirements of Section 30(b) of the Investment Company
Act of 1940 and Rule 30b2-1 thereunder, we hereby file a copy of the
Semiannual Report to Shareholders dated October 31, 1995 of MFS Bond Fund.
Very truly yours,
LORRAINE K. GRIP
Lorraine K. Grip
Senior Production Editor
/lkg
<PAGE>
MFS Logo Semiannual Report
October 31, 1995
MFS [Registration Mark] BOND FUND
Front cover
A photo of two people talking.
<PAGE>
MFS [Registration Mark] BOND FUND
TRUSTEES
A. Keith Brodkin* - Chairman and President
Richard B. Bailey* - Private Investor; Former Chairman and Director (until
1991), Massachusetts Financial Services Company; Director, Cambridge Bancorp;
Director, Cambridge Trust Company
Peter G. Harwood - Private Investor
J. Atwood Ives - Chairman and Chief Executive Officer, Eastern Enterprises
Lawrence T. Perera - Partner, Hemenway & Barnes
William J. Poorvu - Adjunct Professor, Harvard University Graduate School of
Business Administration
Charles W. Schmidt - Private Investor
Arnold D. Scott* - Senior Executive Vice President, Director and Secretary,
Massachusetts Financial Services Company
Jeffrey L. Shames* - President and Director, Massachusetts Financial Services
Company
Elaine R. Smith - Independent Consultant
David B. Stone - Chairman, North American Management Corp. (investment advisers)
INVESTMENT ADVISER
Massachusetts Financial Services Company
500 Boylston Street
Boston, MA 02116-3741
DISTRIBUTOR
MFS Fund Distributors, Inc.
500 Boylston Street
Boston, MA 02116-3741
PORTFOLIO MANAGER
Geoffrey L. Kurinsky*
TREASURER
W. Thomas London*
ASSISTANT TREASURER
James O. Yost*
SECRETARY
Stephen E. Cavan*
ASSISTANT SECRETARY
James R. Bordewick, Jr.*
CUSTODIAN
Investors Bank & 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.
[DALBAR LOGO]
TOP-RATED SERVICE
For the second year in a row, MFS earned a #1 ranking in DALBAR, Inc.'s
Broker/Dealer Survey, Main Office Operations Service Quality category. The firm
achieved a 3.49 overall score -- on a scale of 1 to 4 -- in the 1995 survey. A
total of 71 firms responded, offering input on the quality of service they
receive from 36 mutual fund companies nationwide. The survey contained questions
about service quality in 17 categories, including "knowledge of phone service
contacts," "accuracy of transaction processing," and "overall ease of doing
business with the firm."
*Affiliated with the Investment Adviser
<PAGE>
LETTER TO SHAREHOLDERS
Dear Shareholders:
The past six months have been positive ones for fixed-income markets, as the
reduction in long-term interest rates resulted in price appreciation from
fixed-income securities as well as the traditional coupon income which these
securities provide. The markets' performance was helped by both the slower rate
of economic growth during this period and continuing good news on the inflation
front. During the six-month period ended October 31, 1995, Class A shares of the
Fund provided a total return of +9.26%, Class B shares +8.88%, and Class C
shares +8.92%, all higher than the +8.61% return of the Lehman Brothers
Government/Corporate Bond Index (the Lehman Index). The Lehman Index is an
unmanaged, market-value-weighted index of U.S. Treasury and government agency
securities (excluding mortgage-backed securities) and investment-grade debt
obligations of domestic corporations. A discussion of the Fund's performance may
be found in the Portfolio Performance and Strategy section of this letter.
Complete performance data can be found on pages four and five of this report.
Economic Outlook
Moderate, but sustainable, growth appears to be the hallmark of the economic
expansion's fifth year. While initial estimates showed the U.S. economy growing
at an annual rate of 4.2% in the third quarter, this surprisingly strong growth
was mainly driven by a pickup in consumer spending and an increase in business
and government outlays. Although impressive, this growth rate is not expected to
continue in coming months. Recent retail sales have been disappointing, in part
because of rising levels of consumer debt. An extended period of lower mortgage
rates seems to have relieved much of the pent-up demand for housing. Growth is
not expected to get much help from the manufacturing sector, either, as order
flows from manufacturers have moderated. Export activity, meanwhile, is also
expected to remain modest as continued weakness abroad has limited demand for
many U.S. goods. However, the Federal Reserve Board's consistent and, so far,
successful efforts to fight inflation seem to be giving consumers and businesses
enough longer term confidence to help maintain modest growth in real (adjusted
for inflation) gross domestic product into 1996.
Interest Rates
Given the unexpected strength of the economy in the third quarter, prospects for
further decreases in short-term interest rates by the Federal Reserve seem
uncertain in the near term. Long-term rates, meanwhile, have moved noticeably
downward in recent months in anticipation of more modest fourth-quarter growth
with continued low inflation. While there have been some increases in commodity
prices, companies have found it difficult to pass these on at the consumer level
as they continue to fight for market share. Additionally, unit labor costs
remain under control and seem to be growing at a pace that is near or below
1
<PAGE>
LETTER TO SHAREHOLDERS - continued
the ongoing inflation rate. Thus, with long-term government bonds yielding over
6% in an environment of 2% to 3% inflation, real rates of return in the
fixed-income markets remain relatively attractive.
Portfolio Performance and Strategy
The Fund's strong performance over the past six months was a result of its being
properly positioned for both a drop in long-term interest rates and the
outperformance of the corporate bond market compared with other sectors of the
fixed-income markets. As a result of its duration being about one year longer
than that of the Lehman Index, the drop in 10-year Treasury rates from 7% on May
1, 1995 to 6% by the end of October resulted in a greater degree of price
appreciation for the Fund.
The six-month period was also a very strong period for the investment-grade
corporate bond market, which outperformed the Lehman Index by 60 basis points
(0.60%). As has been the case historically, the corporate bond market typically
outperforms Treasury securities in periods of economic growth (although
principal value and interest on Treasury securities are guaranteed by the U.S.
Government if held to maturity). The Fund's 50% to 60% weighting in the
corporate bond market was nearly twice that of both the competitive universe and
the Fund's normal position.
In terms of sectors, the Fund benefited from overweighting in the media and
cable industries, with significant holdings in Time-Warner, News America and
Telecommunications, Inc. The 12.5% return for the media and cable sector over
the past six months has made this the best performing sector of the corporate
bond market. While this sector is going through a major technological evolution,
the ability of these firms to reduce their debt load has resulted in their debt
status improving from the top tier of the high-yield market to one of solid,
investment-grade securities.
Looking ahead, we are maintaining our duration at around a year longer than
normal but have begun to reduce our exposure to the corporate bond market. Along
with signs of potential economic weakness in October, which is typically not
good for corporate bonds, the rich valuation of this sector suggests that the
risk/reward environment for owning corporate bonds is less favorable at this
point. By the end of October, the Fund's position in investment-grade corporate
bonds had been reduced from as much as 60% of the portfolio to 38%. We have also
reduced the Fund's exposure to the high-yield corporate sector, from a high of
20% to around 12%.
2
<PAGE>
LETTER TO SHAREHOLDERS - continued
We appreciate your support and welcome any questions or comments you may
have.
Respectfully,
[Photo of A. Keith Brodkin, [Photo of Geoffrey L. Kurinsky,
Chairman and President Portfolio Manager]
[Signature] [Signature]
A. Keith Brodkin Geoffrey L. Kurinsky
Chairman and President Portfolio Manager
November 10, 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.
In 1989, he became Portfolio Manager of MFS Bond Fund.
3
<PAGE>
OBJECTIVES AND POLICIES
The Fund primarily seeks to provide as high a level of current income as is
believed to be consistent with prudent investment risk. The secondary objective
of the Fund is to protect shareholders' capital. The Fund seeks to achieve its
objectives by investing at least 65% of its total assets in convertible and
non-convertible debt securities and preferred stocks, securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities, and
commercial paper, repurchase agreements, cash and cash equivalents. Up to 20% of
the Fund's assets may be invested in non-investment-grade debt securities. The
Fund may also enter into options and futures transactions and forward foreign
currency exchange contracts.
PERFORMANCE SUMMARY
Because mutual funds like MFS Bond Fund are designed for investors with
long-term goals, we have provided cumulative results as well as the average
annual total returns for Class A, Class B and Class C shares for the applicable
time periods.
AVERAGE ANNUAL AND CUMULATIVE TOTAL RATES OF RETURN
<TABLE>
<CAPTION>
Class A Investment Results
(net asset value change including reinvested distributions)
6 Months 1 Year 5 Years 10 Years
================================================================================
<S> <C> <C> <C> <C>
Cumulative Total Return* +9.26% +18.48% +66.31% +158.65%
- --------------------------------------------------------------------------------
Average Annual Total Return* -- +18.48% +10.72% + 9.97%
- --------------------------------------------------------------------------------
The average annual total returns, calculated for the period ended as of the most
recent calendar quarter as required by the Securities and Exchange Commission
(the SEC), with all distributions reinvested and reflecting the maximum sales
charge of 4.75% on the initial investment for the 1-, 5- and 10-year periods
ended September 30, 1995, were +11.86%, +9.75% and +9.57%, respectively.
<FN>
*These results do not include the sales charge. If the charge had been included,
the results would have been lower.
</FN>
</TABLE>
4
<PAGE>
AVERAGE ANNUAL AND CUMULATIVE TOTAL RATES OF RETURN - continued
<TABLE>
<CAPTION>
Class B Investment Results
(net asset value change including reinvested distributions)
9/07/93+-
6 Months 1 Year 10/31/95
================================================================================
<S> <C> <C> <C>
Cumulative Total Return++ +8.88% +17.54% +10.09%
Average Annual Total Return++ -- +17.54% +4.58%
- --------------------------------------------------------------------------------
</TABLE>
The average annual total returns, calculated for the period ended as of the
most recent calendar quarter as required by the SEC, with all distributions
reinvested and reflecting the current maximum contingent deferred sales charge
(CDSC) of 4% for the 1-year period ended September 30, 1995 and for the period
from September 7, 1993+ to September 30, 1995, were +12.44% and +2.71%,
respectively.
<TABLE>
<CAPTION>
Class C Investment Results
(net asset value change including reinvested distributions)
1/03/94+-
6 Months 1 Year 10/31/95
================================================================================
<S> <C> <C> <C>
Cumulative Total Return [ss] +8.92% +17.67% +11.22%
- --------------------------------------------------------------------------------
Average Annual Total Return [ss] -- +17.67% +6.00%
- --------------------------------------------------------------------------------
The average annual total returns, calculated for the period ended as of the most
recent calendar quarter as required by the SEC, with all distributions
reinvested for the 1-year period ended September 30, 1995 and for the period
from January 3, 1994+ to September 30, 1995, were +16.48% and +5.82%,
respectively.
All results represent past performance and are not necessarily an indication of
future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost. All
Class A share results reflect the applicable expense subsidy which is explained
in the Notes to Financial Statements. Had the subsidy not been in effect, the
results would have been less favorable.
<FN>
+ Commencement of offering of this class of shares.
++ These results do not include any CDSC. If the charge had been included,
the results would have been lower.
[ss] Class C shares have no initial sales charge or CDSC but, along with
Class B shares, have higher annual fees and expenses than Class A shares.
</FN>
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS - October 31, 1995
Bonds - 89.3%
==============================================================================================
S & P
Bond Rating Principal Amount
(Unaudited) Issuer (000 Omitted) Value
- -----------------------------------------------------------------------------------------------
<C> <S> <C> <C>
U.S. Dollar Denominated - 84.4%
Corporate Asset Backed - 3.9%
NR MBNA Credit Card, 6s, 2003 $ 25,000 $ 25,000,000
- -----------------------------------------------------------------------------------------------
Financial Institutions - 11.1%
Financial Services - 10.2%
AA- ABN Amro Global Bond, 7.25s, 2005 $ 6,870 $ 7,131,335
BBB Alex Brown, Inc., 7.625s, 2005 4,500 4,644,270
A- Banco Central Hispano, 8.25s, 2004 4,500 4,816,305
BB+ Center Financial Corp., 8.375s, 2002 4,000 4,070,000
A- Chase Manhattan Corp., 8.8s, 2000 2,500 2,580,825
A+ Citicorp, 8.8s, 2000 3,890 4,014,286
BB- Coastal Bancorp, Inc., 10s, 2002 1,000 980,000
BB+ Den Danske Bank, 7.25s, 2005## 3,000 3,044,940
BB+ First USA Bank Corp.
(Bank of Wilmington), 7.65s, 2003 6,840 6,961,752
NR Goldman Sachs Group, 7.264s, 2005 1,500 1,530,000
A Lehman Brothers Holdings, Inc., 7.125s, 2002 2,680 2,706,800
A Lehman Brothers Holdings, Inc., 7.375s, 2007 3,600 3,718,728
BBB Leucadia National Corp., 8.25s, 2005 5,390 5,463,412
BBB RHG Finance Corp., 8.875s, 2005 3,000 3,059,700
BB- Riggs National Corp., 8.5s, 2006 8,000 8,320,000
BB+ Sovereign Bancorp, Inc., 6.75s, 2000 2,600 2,548,000
------------
$ 65,590,353
- -----------------------------------------------------------------------------------------------
Insurance - 0.9%
BB+ CCP Insurance, Inc., 10.5s, 2004 $ 2,400 $ 2,593,104
A+ Travelers Group, Inc., 7.875s, 2025 2,740 2,924,210
------------
$ 5,517,314
- -----------------------------------------------------------------------------------------------
Total Financial Institutions $ 71,107,667
- -----------------------------------------------------------------------------------------------
Foreign - U.S. Dollar Denominated - 6.3%
A+ Banco Santander, 7.875s, 2005 $ 4,890 $ 5,219,635
BBB- Financiara Ener National - Colombia, 6.625s, 1996## 3,040 3,021,000
AA+ Government of Canada, 6.375s, 2005 4,000 4,002,760
A+ Hanson Overseas, 6.75s, 2002 4,160 4,180,347
NR Hidroelectrica Alicura, 8.375s, 1999## 4,325 3,806,000
AA- Korea Electric Power Corp., 7.75s, 2013 10,415 10,730,575
AA- Province of Ontario-Global, 7s, 2005 5,000 5,123,445
BBB- Republic of Columbia, 8.75s, 1999 110 114,272
BBB- Republic of Colombia, 7.25s, 2004 2,590 2,419,759
BBB- Republic of Greece, 9.75s, 1999 1,765 1,930,892
------------
$ 40,548,685
- -----------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS - continued
Bonds - continued
===============================================================================================
S & P
Bond Rating Principal Amount
(Unaudited) Issuer (000 Omitted) Value
- -----------------------------------------------------------------------------------------------
<C> <S> <C> <C>
U.S. Dollar Denominated - continued
Industrials - 23.7%
Aerospace - 0.1%
BBB McDonnell-Douglas Co., 9.25s, 2002 $ 500 $ 567,805
- -----------------------------------------------------------------------------------------------
Building - 1.2%
BBB- Owens Corning Fiberglass Corp., 8.875s, 2002 $ 5,650 $ 6,204,943
NR Owens Corning Fiberglass Corp., 9.9s, 2015## 1,500 1,651,875
------------
$ 7,856,818
- -----------------------------------------------------------------------------------------------
Consumer Goods and Services - 1.6%
BBB- Black & Decker Corp., 8.44s, 1999 $ 1,500 $ 1,596,150
BBB+ Laidlaw Inc., 8.75s, 2025 5,000 5,689,250
BBB- Rouse Co., 8.55s, 2005 2,890 3,207,033
------------
$ 10,492,433
- -----------------------------------------------------------------------------------------------
Entertainment - 0.3%
BBB- Time-Warner, Inc., 7.75s, 2005 $ 2,080 $ 2,096,286
- -----------------------------------------------------------------------------------------------
Food and Beverage Products - 5.1%
AA- Anheuser-Busch Cos., Inc., 7.25s, 2015 $ 7,740 $ 7,912,107
BBB- Borden, Inc., 9.875s, 1997 3,000 3,170,340
BBB- Borden, Inc., 9.2s, 2021 3,000 3,249,300
BBB- Borden, Inc., 7.875s, 2023 2,500 2,383,925
BBB- RJR Nabisco, Inc., 8s, 2000 1,500 1,531,305
BBB- RJR Nabisco, Inc., 8.75s, 2005 1,545 1,548,291
BBB- RJR Nabisco, Inc., 8.75s, 2007 4,955 4,967,833
BBB RJR Nabisco, Inc., 7.55s, 2015 7,850 7,846,075
------------
$ 32,609,176
- -----------------------------------------------------------------------------------------------
Forest and Paper Products - 2.9%
BB+ AvenoInc., 9.375s, 2004 $ 3,000 $ 3,309,930
BBB- GeorgCorp., 9.875s, 2021 7,850 8,933,850
BBB- GeorgCorp., 9.125s, 2022 2,500 2,713,400
BBB- GeorgCorp., 8.125s, 2023 1,000 1,015,280
BBB- GeorgCorp., 8.625s, 2025 2,500 2,665,950
------------
$ 18,638,410
- -----------------------------------------------------------------------------------------------
Medical and Health Products - 1.2%
BBB- FHP International Corp., 7s, 2003 $ 5,000 $ 4,806,000
BB- Tenet Healthcare Corp., 10.125s, 2005 2,740 2,959,200
------------
$ 7,765,200
- -----------------------------------------------------------------------------------------------
Metals and Minerals - 0.7%
BBB Asarco, Inc., 8.5s, 2025 $ 4,200 $ 4,571,742
- -----------------------------------------------------------------------------------------------
Oil - 1.6%
BB+ Coastal Corp., 7.75s, 2035 $ 3,250 $ 3,189,063
BB Oryx Energy Co., 10s, 2001 4,500 4,941,540
BBB- Parker & Parsley Petroleum, 8.25s, 2007 2,400 2,511,744
------------
$ 10,642,347
- -----------------------------------------------------------------------------------------------
</TABLE>
7
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS - continued
Bonds - continued
===============================================================================================
S & P
Bond Rating Principal Amount
(Unaudited) Issuer (000 Omitted) Value
- -----------------------------------------------------------------------------------------------
<C> <S> <C> <C>
U.S. Dollar Denominated - continued
Industrials - continued
Printing and Publishing - 2.9%
BBB News America Holdings, Inc., 10.125s, 201 $ 6,825 $ 8,075,886
BBB News America Holdings, Inc., 8.875s, 2023 5,000 5,540,000
BB+ Valassis Inserts, 9.375s, 1999 5,000 5,073,950
------------
$ 18,689,836
- -----------------------------------------------------------------------------------------------
Stores - 0.6%
A Dayton-Hudson Corp., 9s, 2021 $ 1,000 $ 1,157,220
BBB K-Mart Corp., 8.8s, 2010 2,250 2,435,490
------------
$ 3,592,710
- -----------------------------------------------------------------------------------------------
Telecommunications - 2.5%
BBB- TCI Communications Inc., 8.75s, 2015 $ 2,113 $ 2,230,884
BBB- Tele-Communications, 7.38s, 2001 2,750 2,816,715
BBB- Tele-Communications, 9.25s, 2023 10,202 10,736,177
------------
$ 15,783,776
- -----------------------------------------------------------------------------------------------
Transportation - 3.0%
NR Jet Equipment Trust, "B," 10.91s, 2006## $ 3,095 $ 3,526,971
BBB Jet Equipment Trust, "B," 9.71s, 2014## 1,500 1,613,550
BBB- Jet Equipment Trust, "C," 10.69s, 2015## 2,390 2,731,244
AA NorthWest Airlines Trust, 9.25s, 2014 2,346 2,696,227
BBB Qantas Airways, Ltd., 7.5s, 2003## 5,000 5,112,450
BB United Air Lines, Inc., 10.25s, 2021 3,000 3,371,850
------------
$ 19,052,292
- -----------------------------------------------------------------------------------------------
Total Industrials $152,358,831
- -----------------------------------------------------------------------------------------------
Mortgage-Backed Pass-Throughs - 2.2%
NR Merrill Lynch Mortgage Investors, Inc., 10.8s, 2009+ $ 57 $ 56,567
NR Merrill Lynch Mortgage Investors, Inc., 9.7s, 2008 374 381,498
NR Merrill Lynch Mortgage Investors, Inc., 10.25s, 2009+ 1,211 1,224,957
NR Merrill Lynch Mortgage Investors, Inc., 10s, 2011 2,014 2,120,666
NR Merrill Lynch Mortgage Investors, Inc., 9s, 2011 1,624 1,670,673
NR Merrill Lynch Mortgage Investors, Inc., 8.3s, 2011 2,243 2,281,114
NR Merrill Lynch Mortgage Investors, Inc., 9.3s, 2016+ 4,416 4,509,923
B Merrill Lynch Mortgage Investors, Inc., 8.238s, 2021+ 2,000 1,530,660
AAA Security Pacific National Bank, 8.5s, 2017+++ 133 136,399
------------
$ 13,912,457
- -----------------------------------------------------------------------------------------------
U.S. Federal Agencies - 3.9%
GOV Federal Home Loan Mortgage Corp., 9.5s, 2001 $ 13 $ 13,793
GOV ederal Home Loan Mortgage Corp., 9.5s, 2025 3,070 3,241,708
GOV Federal National Mortgage Assn., 9s, 2004 4 3,692
GOV Federal National Mortgage Assn., Stripped Mortgage
Backed Security, 240, 7s, 2023 7,543 2,319,596
GOV Federal National Mortgage Assn., 9.5s, 2024 3,061 3,230,632
GOV Federal National Mortgage Assn., 9.5s, 2025 15,704 16,575,354
------------
$ 25,384,775
- -----------------------------------------------------------------------------------------------
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS - continued
Bonds - continued
===============================================================================================
S & P
Bond Rating Principal Amount
(Unaudited) Issuer (000 Omitted) Value
- -----------------------------------------------------------------------------------------------
<C> <S> <C> <C>
U.S. Dollar Denominated - continued
U.S. Government Guaranteed - 17.4%
Government National Mortgage Association - 0.1%
GOV GNMA, 92, 2015 $ 108 $ 114,041
GOV GNMA, 13.25s, 2023 688 769,189
------------
$ 883,230
- -----------------------------------------------------------------------------------------------
U.S. Treasury Obligations - 17.3%
GOV Stripped Principal Payments, 0s, 2020 $ 10,400 $ 2,096,224
GOV U.S. Treasury Note, 5.75s, 2000 25,000 24,931,641
GOV U.S. Treasury Note, 6.75s, 2000 4,325 4,481,781
GOV U.S. Treasury Note, 7.5s, 2002 5,000 5,432,050
GOV U.S. Treasury Note, 7.25s, 2004 8,900 9,637,009
GOV U.S. Treasury Note, 6.5s, 2005 7,290 7,549,670
GOV U.S. Treasury Bond, 6.875s, 2025 30,000 32,198,400
GOV U.S. Treasury Bond, 7.625s, 2025 21,640 25,122,742
------------
$111,449,517
- -----------------------------------------------------------------------------------------------
Total U.S. Government Guaranteed $112,332,747
- -----------------------------------------------------------------------------------------------
Utilities - 15.9%
Electric - 13.1%
BB+ BVPS II Funding Corp, 8.33s, 2007 $ 1,450 $ 1,433,079
BB Central Maine Power Co., 7.45s, 1999 1,500 1,503,750
BB Cleveland Electric Illum., 9.5s, 2005 1,000 1,000,000
BBB Commonwealth Edison Co., 8.5s, 2022 2,000 2,098,060
BBB Commonwealth Edison Co., 8.375s, 2023 11,290 11,937,256
B+ First PV Funding Corp., 10.3s, 2014 6,727 6,937,219
B+ First PV Funding Corp., 10.15s, 2016 5,508 5,576,850
BBB- Gulf States Utilities Co., 8.25s, 2004 4,650 4,979,825
BBB Illinois Power Co., 8.75s, 2021 5,000 5,242,000
BBB- Long Island Lighting Co., 7.85s, 1999 5,490 5,646,520
BB+ Long Island Lighting Co., 8.9s, 2019 11,910 11,835,920
BBB- Long Island Lighting Co., 9.625s, 2024 1,500 1,543,290
BBB- Louisiana Power & Light Co., 10.67s, 2017 1,450 1,559,229
BBB- Louisiana Power & Light Co., 10.67s, 2017 490 526,912
BB- Midland Corp., 10.33s, 2002 3,160 3,302,498
BB Niagara Mohawk Power Co., 8s, 2004 2,490 2,313,285
BB Niagara Mohawk Power Co., 7.7s, 2006 5,500 5,030,795
BBB- Ohio Edison Co., 7.375s, 2002 5,900 6,067,914
BBB- Salton Sea Funding Corp., 7.37s, 2005## 2,655 2,690,444
BBB- Salton Sea Funding Corp., 7.84s, 2010## 2,775 2,822,203
------------
$ 84,047,049
- -----------------------------------------------------------------------------------------------
Gas - 2.3%
BBB- ANR Pipeline Co., 7s, 2025 $ 4,050 $ 4,252,865
BB- California Energy Co., 0s, 2004 3,100 2,759,000
BBB Louisiana Land & Exploration, 7.65s, 2023 1,000 1,005,652
BBB Northwest Pipeline Co., 9s, 2022 800 870,504
BBB- Panhandle Eastern Corp., 8.625s, 2025 1,875 2,039,963
BBB Southern Union Co., 7.6s, 2024 4,120 4,154,855
------------
$ 15,082,839
- -----------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS - continued
Bonds - continued
===============================================================================================
S & P
Bond Rating Principal Amount
(Unaudited) Issuer (000 Omitted) Value
- -----------------------------------------------------------------------------------------------
<C> <S> <C> <C>
U.S. Dollar Denominated - continued
Utilities - continued
Telephone - 0.5%
BBB+ Century Telephone Enterprises, 8.25s, 2024 $ 3,000 $ 3,200,190
- -----------------------------------------------------------------------------------------------
Total Utilities $102,330,078
- -----------------------------------------------------------------------------------------------
Total U.S. Dollar Denominated $542,975,240
- -----------------------------------------------------------------------------------------------
Foreign - Non-U.S. Dollar Denominated - 4.9%
Australian Dollars - 0.9%
AA Queensland Treasury Corp., 8s, 2001 AUD 8,000 $ 5,923,624
- -----------------------------------------------------------------------------------------------
Canadian Dollars - 0.5%
AA+ Government of Canada, 8.5s, 2000 CAD 1,600 $ 1,254,162
AA+ Government of Canada, 7.5s, 2000 2,500 1,892,671
------------
$ 3,146,833
- -----------------------------------------------------------------------------------------------
Danish Kroner - 0.5%
AA+ Kingdom of Denmark, 9s, 2000 DKK 8,630 $ 1,711,148
AA+ Kingdom of Denmark, 9s, 1998 8,800 1,722,783
------------
$ 3,433,931
- -----------------------------------------------------------------------------------------------
Dutch Guilders - 0.5%
AAA Dutch State Loan, 6.25s, 1998 NLG 270 $ 177,285
AAA Dutch State Loan, 8.25s, 2007 4,350 3,096,115
------------
$ 3,273,400
- -----------------------------------------------------------------------------------------------
German Marks - 1.8%
AAA Deutschland Republic, 8.5s, 2000 DEM 1,110 $ 883,806
AAA Deutschland Republic, 6.5s, 2003 6,465 4,647,049
AAA German Unity Fund, 8.5s, 2001 6,382 5,092,817
AAA Nordrhein Westfalen, 6.25s, 2002 1,620 1,144,179
------------
$ 11,767,851
- -----------------------------------------------------------------------------------------------
New Zealand Dollars - 0.3%
AA Government of New Zealand, 10s, 2002 NZD 2,700 $ 2,027,639
- -----------------------------------------------------------------------------------------------
Spanish Pesetas - 0.4%
AA Kingdom of Spain, 10.9s, 2003 ESP 290,000 $ 2,391,816
- -----------------------------------------------------------------------------------------------
Total Foreign - Non-U.S. Dollar Denominated $ 31,965,094
- -----------------------------------------------------------------------------------------------
Total Bonds (Identified Cost, $562,755,778) $574,940,334
- -----------------------------------------------------------------------------------------------
Preferred Stock - 0.5%
===============================================================================================
Issuer Shares
- -----------------------------------------------------------------------------------------------
Bank United, TX, Federal Savings Bank, (Identified Cost, $3,000,000) 120,000 $ 3,045,000
- -----------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS - continued
Short-Term Obligation - 0.8%
===============================================================================================
Principal Amount
Issuer (000 Omitted) Value
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Czech ING Note, 10.32s, 1995, at Amortized Cost and Value CZK 135,874 $ 5,002,488
- -----------------------------------------------------------------------------------------------
Repurchase Agreement - 9.7%
===============================================================================================
Lehman Brothers, dated 10/31/95, due 11/01/95, total to be
received $62,497,154 (secured by U.S. Treasury Notes at 7.5s,
due 2/29/96, and Bonds at 10.375s, due 11/15/09, market
value $63,740,199), at Amortized Cost and Value $ 62,487 $ 62,487,000
- -----------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $633,245,266) $645,474,822
Other Assets, Less Liabilities - (0.3)%.(1,737,319)
===============================================================================================
Net Assets - 100.0% $643,737,503
- -----------------------------------------------------------------------------------------------
</TABLE>
Abbreviations have been used throughout this report to indicate amounts shown in
currencies other than the U.S. dollar. A list of abbreviations is shown below.
AUD = Australian Dollars DKK = Danish Kroner ITL = Italian Lire
CAD = Canadian Dollars ESP = Spanish Pesetas JPY = Japanese Yen
CZK = Czech Republic Krona GBP = British Pounds NLG = Dutch Guilders
DEM = German Marks IEP = Irish Punts NZD = New Zealand Dollars
## SEC Rule 144A restriction.
+ Restricted security.
++ Security valued by or at the direction of the Trustees.
See notes to financial statements
11
<PAGE>
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Statement of Assets and Liabilities
================================================================================
October 31, 1995
- --------------------------------------------------------------------------------
<S> <C>
Assets:
Investments, at value (identified cost, $633,245,266) $645,474,822
Cash 603
Net receivable for forward foreign currency exchange
contracts purchased 248,761
Receivable for investments sold 18,711,728
Receivable for Fund shares sold 774,194
Interest receivable 10,635,132
Other assets 15,576
------------
Total assets $675,860,816
============
Liabilities:
Payable for investments purchased $ 30,290,108
Payable for Fund shares reacquired 645,463
Net payable for forward foreign currency exchange
contracts sold 823,763
Payable to affiliates -
Management fee 20,979
Shareholder servicing agent fee 8,551
Distribution fee 101,512
Accrued expenses and other liabilities 232,937
------------
Total liabilities $ 32,123,313
============
Net assets $643,737,503
============
Net assets consist of:
Paid-in capital $642,166,069
Unrealized appreciation on investments and translation
of assets and liabilities in foreign currencies 11,683,267
Accumulated net realized loss on investments and
foreign currency transactions (9,746,217)
Accumulated distributions in excess of net investment income (365,616)
------------
Total $643,737,503
============
Shares of beneficial interest outstanding 48,090,989
============
Class A shares:
Net asset value and redemption price per share
(net assets of $526,257,66 / 39,290,007 shares
of beneficial interest outstanding) $13.39
======
Offering price per share (100/95.25) $14.06
======
Class B shares:
Net asset value and offering price per share
(net assets of $102,021,944 / 7,642,775 shares
of beneficial interest outstanding) $13.35
======
Class C shares:
Net asset value, offering price, and redemption price
per share (net assets of $15,457,895 / 1,158,207 shares
of beneficial interest outstanding) $13.35
======
</TABLE>
On sales of $100,000 or more, the offering price of Class A shares is reduced.
A contingent deferred sales charge may be imposed on redemptions of Class A and
Class B shares.
See notes to financial statements
12
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Statement of Operations
================================================================================
Six Months Ended October 31, 1995
- --------------------------------------------------------------------------------
<S> <C>
Net investment income:
Interest income $ 25,434,670
------------
Expenses -
Management fee $ 1,232,338
Trustees' compensation 24,362
Shareholder servicing agent fee (Class A) 382,500
Shareholder servicing agent fee (Class B) 97,387
Shareholder servicing agent fee (Class C) 8,767
Distribution and service fee (Class A) 826,786
Distribution and service fee (Class B) 443,681
Distribution and service fee (Class C) 58,451
Custodian fee 138,416
Postage 89,192
Auditing fees 30,550
Printing 29,993
Legal fees 3,651
Miscellaneous 220,038
------------
Total expenses $ 3,586,112
Fees paid indirectly (34,122)
Reduction of expenses by distributor (256,303)
------------
Net expenses $ 3,295,687
------------
Net investment income $ 22,138,983
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $ 21,392,683
Written option transactions (34,027)
Foreign currency and forward foreign currency
exchange contracts and other transactions
denominated in foreign currency 584,258
------------
Net realized gain on investments $ 21,942,914
------------
Change in unrealized appreciation (depreciation) -
Investments $ 8,797,118
Written options 65,995
Foreign currency and forward foreign currency
exchange contracts (972,558)
------------
Net unrealized gain on investments $ 7,890,555
------------
Net realized and unrealized gain on investments
and foreign currency $ 29,833,469
------------
Increase in net assets from operations $ 51,972,452
------------
</TABLE>
See notes to financial statements
13
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
================================================================================
Six Months Ended Year Ended
October 31, 1995 April 30, 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 22,138,983 $ 39,867,272
Net realized gain (loss) on investments and
foreign currency transactions 21,942,914 (35,439,392)
Net unrealized gain on investments and
foreign currency translation 7,890,555 34,798,721
------------ ------------
Increase in net assets from operations $ 51,972,452 $ 39,226,601
------------ ------------
Distributions declared to shareholders -
From net investment income (Class A) $(18,353,552) $(32,067,842)
From net investment income (Class B) (2,844,128) (3,235,246)
From net investment income (Class C) (375,451)
From paid-in capital -- (3,268,079)
------------ ------------
Total distributions declared to shareholders $(21,573,131) $(39,052,685)
------------ ------------
Fund share (principal) transactions -
Net proceeds from sale of shares $151,041,004 $155,634,237
Net asset value of shares issued to shareholders
in reinvestment of distributions 14,749,380 25,974,677
Cost of shares reacquired (113,129,858) (121,456,901)
------------ ------------
Increase in net assets from Fund
share transactions $ 52,660,526 $ 60,152,013
------------ ------------
Total increase in net assets $ 83,059,847 $ 60,325,929
Net assets:
At beginning of period 560,677,656 500,351,727
------------ ------------
At end of period (including distributions in
excess of net investment income of $365,616
and $931,468,respectively) $643,737,503 $560,677,656
============ ============
</TABLE>
See notes to financial statements
14
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights
===================================================================================================================================
Six Months Ended
October 31, Year Ended April 30,
----------------------------------------
1995 1995 1994 1993 1992
- -----------------------------------------------------------------------------------------------------------------------------------
Class A
- -----------------------------------------------------------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
<S> <C> <C> <C> <C> <C>
Net asset value - beginning of period $ 12.71 $ 12.75 $ 14.39 $ 13.70 $ 13.25
-------- -------- -------- -------- --------
Income from investment operations# -
Net investment income [ss] $ 0.49 $ 0.98 $ 1.02 $ 1.04 $ 1.13
Net realized and unrealized gain (loss)
on investments 0.67 (0.05) (0.63) 0.74 0.45
-------- -------- -------- -------- --------
Total from investment operations $ 1.16 $ 0.93 $ 0.39 $ 1.78 $ 1.58
-------- -------- -------- -------- --------
Less distributions declared to shareholders -
From net investment income $ (0.48) $ (0.89) $ (1.06) $ (1.04) $ (1.13)
In excess of net investment income -- -- (0.02) -- --
From net realized gain on investments -- -- (0.80) (0.05) --
In excess of net realized gain on invesments -- -- (0.01) -- --
From paid-in capital -- (0.08) (0.14) -- --
-------- -------- -------- -------- --------
Total distributions declared
to shareholders $ (0.48) $ (0.97) $ (2.03) $ (1.09) $ (1.13)
-------- -------- -------- -------- --------
Net asset value - end of period $ 13.39 $ 12.71 $ 12.75 $ 14.39 $ 13.70
======== ======== ======== ======== ========
Total return+++ 9.26%++ 7.78% 2.12% 13.42% 12.39%
Ratios (to average net assets)/Supplemental data [ss]:
Expenses## 0.95%+ 1.00% 0.96% 0.88% 0.91%
Net investment income 7.35%+ 7.91% 7.17% 7.82% 8.39%
Portfolio turnover 161% 306% 410% 330% 243%
Net assets at end of period (000 omitted) $526,258 $477,056 $459,311 $490,417 $448,261
<FN>
+ Annualized.
++ Not annualized.
+++ Total returns for Class A shares do not include the applicable sales charge (except for reinvestment dividends prior to
March 1, 1991). If the charge had been included, the results would have been lower.
# Per share data for the periods subsequent to April 30, 1993 is based on average shares outstanding.
## For fiscal years ending after September 1, 1995, the Fund's expenses are calculated without reduction for fees paid
indirectly.
[ss] The distributor did not impose a portion of its distribution fee attributable to Class A shares for the periods indicated. If
this fee had been incurred by the Fund, the net investment income per share and the ratios would have been:
Net investment income $ 0.48 $ 0.97 $ 1.01 -- --
Ratios (to average net assets):
Expenses## 1.05%+ 1.10% 1.02% -- --
Net investment income 7.25%+ 7.81% 7.10% -- --
</FN>
</TABLE>
See notes to financial statements
15
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights - continued
====================================================================================================================================
Year Ended April 30,
----------------------------------------------------------------
1991 1990 1989 1988 1987 1986
- ------------------------------------------------------------------------------------------------------------------------------------
Class A
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $ 12.69 $ 12.80 $ 13.20 $ 14.04 $ 14.62 $ 12.69
-------- -------- -------- -------- -------- --------
Income from investment operations -
Net investment income $ 1.14 $ 1.20 $ 1.15 $ 1.16 $ 1.24 $ 1.43
Net realized and unrealized gain (loss)
on investments 0.59 (0.14) (0.38) (0.42) (0.27) 1.94
-------- -------- -------- -------- -------- --------
Total from investment operations $ 1.73 $ 1.06 $ 0.77 $ 0.74 $ 0.97 $ 3.37
-------- -------- -------- -------- -------- --------
Less distributions declared to shareholders -
From net investment income $ (1.17) $ (1.17) $ (1.17) $ (1.15) $ (1.15) $ (1.44)
From net realized gain on investments -- -- -- (0.43) (0.40) --
-------- -------- -------- -------- -------- --------
Total distributions declared to shareholders $ (1.17) $ (1.17) $ (1.17) $ (1.58) $ (1.55) $ (1.44)
-------- -------- -------- -------- -------- --------
Net asset value - end of period $ 13.25 $ 12.69 $ 12.80 $ 13.20 $ 14.04 $ 14.62
======== ======== ======== ======== ======== ========
Total return+++ 13.65% 7.69% 5.49% 5.18% 6.15% 26.73%
Ratios (to average net assets)/Supplemental data:
Expenses 0.79% 0.75% 0.83% 0.76% 0.68% 0.79%
Net investment income 8.82% 9.10% 8.93% 8.85% 8.44% 10.29%
Portfolio turnover 189% 186% 160% 287% 334% 218%
Net assets at end of period (000 omitted) $315,722 $293,242 $299,485 $310,403 $318,329 $319,316
<FN>
++ Total returns for Class A shares do not include the applicable sales charge (except for reinvestment dividends prior to
March 1, 1991). If the charge had been included, the results would have been lower.
</FN>
</TABLE>
See notes to financial statements
16
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights - continued
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months
Six Months Ended Year Ended
Ended Year Ended October ------------------
October 31, April 30, 31, April 30,
1995 1995 1994* 1995 1995 1994**
- ------------------------------------------------------------------------------------------------------------------------------------
Class B Class C
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $ 12.69 $ 12.73 $ 14.99 $ 12.68 $ 12.72 $ 13.57
-------- -------- -------- -------- -------- --------
Income from investment operations -
Net investment income $ 0.44 0.88 0.56 0.44 $ 0.88 $ 0.29
Net realized and unrealized gain (loss) on investments 0.66 (0.05) (1.30) 0.68 (0.05) (0.90)
-------- -------- -------- -------- -------- --------
Total from investment operations $ 1.10 $ 0.83 $ (0.74) $ 1.12 $ 0.83 $ (0.61)
-------- -------- -------- -------- -------- --------
Less distributions declared to shareholders -
From net investment income $ (0.44) $ (0.80) $ (0.59) $ (0.45) $ (0.80) $ (0.22)
In excess of net investment income -- -- (0.02) -- -- --
From net realized gain on investments -- -- -- -- --0
In excess of net realized gains on investments -- -- (0.01) -- -- --
From paid-in capital -- (0.07) (0.10) -- (0.07) (0.02)
-------- -------- -------- -------- -------- --------
Total distributions declared to shareholders $ (0.44) $ (0.87) $ (1.52) $ (0.45) $ (0.87) $ (0.24)
-------- -------- -------- -------- -------- --------
Net asset value - end of period $ 13.35 $ 12.69 $ 12.73 $ 13.35 $ 12.68 $ 12.72
-------- -------- -------- -------- -------- --------
Total return 8.88% 6.90% (5.42)%+ 8.2% 7.00% (4.57)%++
Ratios (to average net assets)/Supplemental data:
Expenses## 1.80%+ 1.84% 1.83%+ 1.75%+ 1.75% 1.80%+
Net investment income 6.50%+ 7.17% 6.39%+ 6.58%+ 7.17% 6.57%+
Portfolio turnover 161% 306% 410% 161% 306% 410%
Net assets at end of period (000 omitted) $102,022 $ 75,451 $ 33,413 $ 15,458 $ 8,171 $ 7,627
<FN>
* For the period from the commencement of initial public offering of Class B shares, September 7, 1993 to April 30, 1994.
** For the period from the commencement of offering of Class C shares, January 3, 1994 to April 30, 1994.
+ Annualized.
++ Not annualized.
## For fiscal years ending after September 1, 1995, the Fund's expenses are calculated without reduction for fees paid indirectly.
</FN>
</TABLE>
See notes to financial statements
17
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(1) Business and Organization
MFS Bond Fund (the Fund) is a diversified series of MFS Series Trust IX (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 - Debt securities (other than short-term obligations which
mature in 60 days or less), including listed issues and forward contracts, are
valued on the basis of valuations furnished by dealers or by a pricing service
with consideration to factors such as institutional-size trading in similar
groups of securities, yield, quality, coupon rate, maturity, type of issue,
trading characteristics and other market data, without exclusive reliance upon
exchange or over-the-counter prices. Short-term obligations, which mature in 60
days or less, are valued at amortized cost, which approximates market value.
Non-U.S. dollar denominated short-term obligations are valued at amortized cost
as calculated in the base currency and translated into U.S. dollars at the
closing daily exchange rate. Futures contracts, options and options on futures
contracts listed on commodities exchanges are valued at closing settlement
prices. Over-the-counter options are valued by brokers through the use of a
pricing model which takes into account closing bond valuations, implied
volatility and short-term repurchase rates. Equity securities listed on
securities exchanges or reported through the NASDAQ system are valued at last
sale prices. Unlisted equity securities or listed equity securities for which
last sale prices are not available are valued at last quoted bid prices.
Securities for which there are no such quotations or valuations are valued at
fair value as determined in good faith by or at the direction of the Trustees.
Repurchase Agreements - The Fund may enter into repurchase agreements with
institutions that the Fund's investment adviser has determined are creditworthy.
Each repurchase agreement is recorded at cost. The Fund requires that the
securities purchased in a repurchase transaction be transferred to the custodian
in a manner sufficient to enable the Fund to obtain those securities in the
event of a default under the repurchase agreement. The Fund monitors, on a daily
basis, the value of the securities transferred to ensure that the value,
including accrued interest, of the securities under each repurchase agreement is
greater than amounts owed to the Fund under each such repurchase agreement.
Foreign Currency Translation - Investment valuations, other assets, and
liabilities initially expressed in foreign currencies are converted each
business day into U.S. dollars based upon current exchange rates. Purchases and
sales of foreign investments, income and expenses are converted into U.S.
dollars based upon currency exchange rates prevailing on the respective dates of
such transactions. Gains and losses attributable to foreign currency exchange
rates on sales of securities are recorded for financial statement purposes as
net realized gains and losses on investments. Gains and losses attributable to
foreign exchange rate movements on income and expenses are recorded for
financial statement purposes as foreign currency transaction gains and losses.
That portion of both realized and
18
<PAGE>
NOTES TO FINANCIAL STATEMENTS - continued
unrealized gains and losses on investments that results from fluctuations in
foreign currency exchange rates is not separately disclosed.
Written Options - The Fund may write covered call or put options for which
premiums are received and are recorded as liabilities, and are subsequently
adjusted to the current value of the options written. Premiums received from
writing options which expire are treated as realized gains. Premiums received
from writing options which are exercised or are closed are offset against the
proceeds or amount paid on the transaction to determine the realized gain or
loss. If a put option is exercised, the premium reduces the cost basis of the
security purchased by the Fund. The Fund, as writer of an option, may have no
control over whether the underlying securities may be sold (call) or purchased
(put) and, as a result, bears the market risk of an unfavorable change in the
price of the securities underlying the written option. In general, written call
options may serve as a partial hedge against decreases in value in the
underlying securities to the extent of the premium received. Written options may
also be used as part of an income producing strategy reflecting the view of the
Fund's management on the direction of interest rates.
Forward Foreign Currency Exchange Contracts - The Fund may enter into forward
foreign currency exchange contracts for the purchase or sale of a specific
foreign currency at a fixed price on a future date. Risks may arise upon
entering these contracts from the potential inability of counterparties to meet
the terms of their contracts and from unanticipated movements in the value of a
foreign currency relative to the U.S. dollar. The Fund will enter into forward
contracts for hedging purposes. The Fund may enter into contracts to deliver or
receive foreign currency it will receive from or require for its normal
investment activities. It may also use contracts in a manner intended to protect
foreign currency-denominated securities from declines in value due to
unfavorable exchange rate movements. The forward foreign currency exchange
contracts are adjusted by the daily exchange rate of the underlying currency and
any gains or losses are recorded for financial statement purposes as unrealized
until the contract settlement date.
Investment Transactions and Income - Investment transactions are recorded on the
trade date. Interest income is recorded on the accrual basis. All premium and
original issue discounts are amortized or accreted for financial statement and
tax reporting purposes as required by federal income tax regulations. Interest
payments received in additional securities are recorded on the ex-interest date
in an amount equal to the value of the security on such date. The Fund uses the
effective interest method for reporting interest income on payment-in-kind (PIK)
bonds, whereby interest income on PIK bonds is recorded ratably by the Fund at a
constant yield to maturity. Legal fees and other related expenses incurred to
preserve and protect the value of a security owned are added to the cost of the
security, other legal fees are expensed. Capital infusions, which are generally
non-recurring, incurred to protect or enhance the value of high-yield debt
securities, are reported as an addition to the cost basis of the security. Costs
that are incurred to negotiate the terms or conditions of capital infusions or
that are expected to result in a plan of reorganization
19
<PAGE>
NOTES TO FINANCIAL STATEMENTS - continued
are considered workout expenses and are reported as realized losses. Ongoing
costs incurred to protect or enhance an investment, or costs incurred to pursue
other claims or legal actions, are reported as operating expenses.
Fees Paid Indirectly - The Fund's custodian bank calculates its fee based on the
Fund's average daily net assets. This fee is reduced according to an expense
offset arrangement with State Street Bank, the dividend disbursing agent, which
provides for partial reimbursement of custody fees based on a formula developed
to measure the value of cash deposited by the Fund with the custodian and with
the dividend disbursing agent. This amount is shown as a reduction of expenses
on the Statement of Operations.
Tax Matters and Distributions - The Fund's policy is to comply with the
provisions of the Internal Revenue Code (the Code) applicable to regulated
investment companies and to distribute to shareholders all of its net income,
including any net realized gain on investments. Accordingly, no provision for
federal income or excise tax is provided. The Fund files a tax return annually
using tax accounting methods required under provisions of the Code which may
differ from generally accepted accounting principles, the basis on which these
financial statements are prepared. Accordingly, the amount of net investment
income and net realized gain reported on these financial statements may differ
from that reported on the Fund's tax return, and consequently, the character of
distributions to shareholders reported in the financial highlights may differ
from that reported to shareholders on Form 1099-DIV. Foreign taxes have been
provided for on interest income earned on foreign investments in accordance with
the applicable country's tax rates and to the extent unrecoverable are recorded
as a reduction of investment income. Distributions to shareholders are recorded
on the ex-dividend date.
At April 30, 1995, the Fund, for federal income tax purposes, had a capital loss
carryforward of $26,331,803, which may be applied against any net taxable
realized gains of each succeeding year until the earlier of its utilization or
expiration on April 30, 2003. The Fund distinguishes between distributions on a
tax basis and a financial reporting basis and requires that only distributions
in excess of tax basis earnings and profits are reported in the financial
statements as a return of capital. Differences in the recognition or
classification of income between the financial statements and tax earnings and
profits which result in temporary over-distributions for financial statement
purposes, are classified as distributions in excess of net investment income or
accumulated net realized gains.
Multiple Classes of Shares of Beneficial Interest - The Fund offers Class A,
Class B, and Class C shares. The three classes of shares differ in their
respective shareholder servicing agent, distribution and service fees. All
shareholders bear the common expenses of the Fund pro rata based on the average
daily net assets of each class, without distinction between share classes.
Dividends are declared separately for each class. No class has preferential
dividend rights; differences in per share dividend rates are generally due to
differences in separate class expenses.
20
<PAGE>
NOTES TO FINANCIAL STATEMENTS - continued
(3) Transactions with Affiliates
Investment Adviser - The Fund has an investment advisory agreement with
Massachusetts Financial Services Company (MFS) to provide overall investment
advisory and administrative services, and general office facilities. The
management fee is computed daily and paid monthly at an effective annual rate
of 0.20% of average daily net assets and 2.66% of investment income. The Fund
pays no compensation directly to its Trustees who are officers of the investment
adviser, or to officers of the Fund, all of whom receive remuneration for their
services to the Fund from MFS. Certain of the officers and Trustees of the Fund
are officers or directors of MFS, MFS Fund Distributors, Inc. (MFD) and MFS
Service Center, Inc. (MFSC). The Fund has an unfunded defined benefit plan for
all of its independent Trustees and Mr. Bailey. Included in Trustees'
compensation is a net periodic pension expense of $4,922 for the period ended
October 31, 1995.
Distributor - MFD, a wholly owned subsidiary of MFS, as distributor, received
$75,160 for the period ended October 31, 1995, as its portion of the sales
charge on sales of Class A. The Trustees have adopted separate distribution
plans for Class A, Class B and Class C shares pursuant to Rule 12b-1 of the
Investment Company Act of 1940 as follows:
The Class A distribution plan provides that the Fund will pay MFD up to 0.35%
per annum of its average daily net assets attributable to Class A shares in
order that MFD may pay expenses on behalf of the Fund related to the
distribution and servicing of its shares. These expenses include a service fee
to each securities dealer that enters into a sales agreement with MFD of up to
0.25% per annum of the Fund's average daily net assets attributable to Class A
shares which are attributable to that securities dealer, a distribution fee to
MFD of up to 0.10% per annum of the Fund's average daily net assets attributable
to Class A shares, commissions to dealers and payments to MFD wholesalers for
sales at or above a certain dollar level, and other such distribution-related
expenses that are approved by the Fund. MFD retains the service fee for accounts
not attributable to a securities dealer, which amounted to $131,794 for the
period ended October 31, 1995. MFD is waiving the 0.10% distribution fees for an
indefinite period. Fees incurred under the distribution plan during the period
ended October 31, 1995 were 0.22% of average daily net assets, net of waiver,
attributable to Class A shares on an annualized basis.
The Class B and Class C distribution plans provide that the Fund will pay MFD a
distribution fee, equal to 0.75% per annum, and a service fee of up to 0.25% per
annum, of the Fund's average daily net assets attributable to Class B and Class
C shares. MFD will pay to securities dealers that enter into a sales agreement
with MFD all or a portion of the service fee attributable to Class B and Class C
shares, and will pay to such securities dealers all of the distribution fee
attributable to Class C shares. The service fee is intended to be additional
consideration for services rendered by the dealer with respect to Class B and
Class C shares. MFD retains the service fee for accounts not attributable to a
securities dealer, which amounted to $6,774 and $1,387 for Class B and Class C
shares, respectively, for the period ended October 31, 1995. Fees incurred under
the distribution plans during the period ended October 31, 1995 were 1.00% of
average daily net assets attributable to Class B and Class C shares on an
annualized basis.
21
<PAGE>
NOTES TO FINANCIAL STATEMENTS - continued
A contingent deferred sales charge is imposed on shareholder redemptions of
Class A shares, on purchases of $1 million or more, in the event of a
shareholder redemption within twelve months following the share purchase.
A contingent deferred sales charge is imposed on shareholder redemptions of
Class B shares in the event of a shareholder redemption within six years of
purchase. MFD receives all contingent deferred sales charges. Contingent
deferred sales charges imposed during the period ended October 31, 1995 were
$16,246 and $97,079 for Class A shares and Class B shares, respectively.
Shareholder Servicing Agent - MFSC, a wholly owned subsidiary of MFS, earns a
fee for its services as shareholder servicing agent. The fee is calculated as a
percentage of the average daily net assets of each class of share at an
effective annual rate of up to 0.15%, up to 0.22%, and up to 0.15% attributable
to Class A, Class B, and Class C shares, respectively.
(4) Portfolio Securities
<TABLE>
<CAPTION>
Purchases and sales of investments, other than purchased option transactions and
short-term obligations, were as follows:
Purchases Sales
===============================================================================
<S> <C> <C>
U.S. Government securities $285,016,432 $345,148,161
============ ============
Investments (non-U.S. Government securities) $731,049,247 $603,359,204
============ ============
</TABLE>
<TABLE>
<CAPTION>
The cost and unrealized appreciation or depreciation in value of the investments
owned by the Fund, as computed on a federal income tax basis, are as follows:
<S> <C>
Aggregate cost $ 633,245,266
=============
Gross unrealized appreciation $ 14,531,661
Gross unrealized depreciation (2,302,105)
-------------
Net unrealized appreciation $ 12,229,556
=============
</TABLE>
22
<PAGE>
NOTES TO FINANCIAL STATEMENTS - continued
(5) Shares of Beneficial Interest
The Fund's Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest (without par value).
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
Class A Shares Six Months Ended October 31,1995 Year Ended April 30,1995
-------------------------------- ---------------------------
Shares Amount Shares Amount
================================================================================================
<S> <C> <C> <C> <C>
Shares sold 5,946,893 $ 78,690,275 7,570,354 $ 93,377,941
Shares issued to shareholders in
reinvestment of distributions 984,202 12,927,818 1,937,817 23,874,476
Shares reacquired (5,175,771) (68,330,759) (7,998,695) (98,722,760)
---------- ------------ ---------- ------------
Net increase 1,755,324 $ 23,287,334 1,509,476 $ 18,529,657
========== ============ ========== ============
</TABLE>
<TABLE>
<CAPTION>
Class B Shares Six Months Ended October 31,1995 Year Ended April 30,1995
-------------------------------- ---------------------------
Shares Amount Shares Amount
================================================================================================
<S> <C> <C> <C> <C>
Shares sold 4,528,355 $ 59,874,752 4,205,737 $ 51,952,884
Shares issued to shareholders in
reinvestment of distributions 121,421 1,593,770 147,546 1,814,601
Shares reacquired (2,954,777) (38,940,330) (1,029,710) (12,650,424)
---------- ------------ ---------- ------------
Net increase 1,694,999 $ 22,528,192 3,323,573 $ 41,117,061
========== ============ ========== ============
</TABLE>
<TABLE>
<CAPTION>
Class C Shares Six Months Ended October 31,1995 Year Ended April 30,1995
-------------------------------- ---------------------------
Shares Amount Shares Amount
================================================================================================
<S> <C> <C> <C> <C>
Shares sold 942,944 $ 12,475,977 35,445 $ 10,303,412
Shares issued to shareholders in
reinvestment of distributions 17,332 227,792 23,176 285,600
Shares reacquired (446,416) (5,858,769) (813,659)
---------- ------------ ---------- ------------
Net increase 513,860 $ 6,845,000 44,962 $ 505,295
========== ============ ========== ============
</TABLE>
(6) Line of Credit
The Fund 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 permit
borrowings up to $350 million, collectively. Borrowings may be made to
temporarily finance the repurchase of Fund shares. Interest is charged to each
fund, based on its borrowings, at a rate equal to the bank's base rate. In
addition, a commitment fee, based on the average daily unused portion of the
line of credit, is allocated among the participating funds at the end of each
quarter. The commitment fee allocated to the Fund for the period ended October
31, 1995 was $3,733.
23
<PAGE>
NOTES TO FINANCIAL STATEMENTS - continued
(7) Financial Instruments
The Fund regularly trades financial instruments with off-balance sheet risk in
the normal course of its investing activities in order to manage exposure to
market risks such as interest rates and foreign currency exchange rates. These
financial instruments include written options, forward foreign currency exchange
contracts and futures contracts. The notional or contractual amounts of these
instruments represent the investment the Fund has in particular classes of
financial instruments and does not necessarily represent the amounts potentially
subject to risk. The measurement of the risks associated with these instruments
is meaningful only when all related and offsetting transactions are considered.
A summary of obligations under these financial instruments at October 31, 1995,
is as follows:
<TABLE>
<CAPTION>
Written Option Transactions 1995 Calls 1995 Puts
------------------------- ---------------------------
Principal Principal
Amounts Amounts
of Contracts of Contracts
(000 Omitted) Premiums (000 Omitted) Premiums
=================================================================================================
<S> <C> <C> <C> <C>
Outstanding, beginning of period -
British Pounds ........................... 1,016 $ 17,524 947 $ 17,524
German Marks ............................. 2,259 15,668 -- --
Japanese Yen ............................. 479,624 182,107 258,736 35,489
German Marks/British Pounds ................ 1,678 10,900 -- --
Options written -
Japanese Yen ............................. 387,000 158,991 627,000 95,463
Options terminated in closing transactions -
British Pounds ........................... (1,016) (17,524) -- --
Japanese Yen ............................. (866,624) (341,098) (885,736) (130,952)
German Marks/British Pounds .............. (1,678) (10,900) -- --
Options expired -
British Pounds ........................... -- -- (947) (17,524)
German Marks ............................. (2,259) (15,668) -- --
-------- --------- -------- ---------
Outstanding, end of period ................. -- $ -- -- $ --
======== ========= ======== =========
</TABLE>
At October 31, 1995, the Fund had no outstanding written options contracts.
24
<PAGE>
NOTES TO FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Forward Foreign Currency Exchange Contracts
Net Unrealized
Contracts to In Exchange Contracts Appreciation
Settlement Date Deliver/Receive for at Value (Depreciation)
============================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Sales 12/07/95-12/07/95 AUD 7,514,586 $ 5,615,508 $ 5,708,438 $ (92,930)
11/03/95-11/09/95 CAD 28,684,416 21,117,579 21,341,760 (224,181)
11/14/95-12/15/95 DEM 22,480,664 15,601,500 15,985,067 (383,567)
11/10/95-11/10/95 DKK 19,687,680 3,600,000 3,604,878 (4,878)
12/07/95-12/07/95 ESP 309,583,980 2,438,726 2,528,961 (90,235)
11/10/95-11/14/95 GBP 2,338,724 3,729,730 3,696,513 33,217
12/07/95-12/07/95 IEP 764,924 1,248,292 1,239,116 9,176
12/07/95-12/07/95 ITL 3,600,805,978 2,227,821 2,253,602 (25,781)
11/27/95-11/27/95 JPY 24,806,604 276,000 243,759 32,241
11/10/95-11/24/95 NLG 5,130,892 3,255,769 3,254,829 940
11/10/95-12/20/95 NZD 9,407,349 6,121,883 6,199,648 (77,765)
------------- ------------- -------------
$ 65,232,808 $ 66,056,571 $ (823,763)
============= ============= =============
Purchases 11/10/95-11/10/95 AUD 3,200,000 $ 2,369,440 $ 2,433,984 $ 64,544
11/09/95-11/09/95 CAD 22,988 17,032,613 17,103,743 71,130
12/07/95-12/15/95 DEM 5,519,354 3,895,080 3,927,801 32,721
12/07/95-12/07/95 ESP 30,767,494 246,229 251,337 5,108
11/10/95-11/14/95 GBP 2,338,724 3,681,304 3,696,513 15,209
11/06/95-11/06/95 IEP 764,924 1,230,067 1,239,116 9,049
12/07/95-12/07/95 ITL 3,336,861,038 2,067,301 2,088,410 21,109
11/27/95-11/27/95 JPY 95,816 934,425 943,148 8,723
11/10/95-12/20/95 NZD 6,330,884 4,153,858 4,175,026 21,168
------------- ------------- -------------
$ 35,610,317 $ 35,859,078 $ 248,761
============= ============= =============
</TABLE>
At October 31, 1995, the Fund had sufficient cash and/or securities to cover any
commitments under these contracts.
25
<PAGE>
NOTES TO FINANCIAL STATEMENTS - continued
(8) Restricted Securities
The Fund may invest not more than 10% of its total assets in securities which
are subject to legal or contractual restrictions on resale. At October 31, 1995,
the Fund owned the following restricted securities (constituting 5.53% of total
assets) which may not be publicly sold without registration under the Securities
Act of 1933 (the 1933 Act). The Fund does not have the right to demand that such
securities be registered. The value of these securities is determined by
valuations supplied by a pricing service or brokers. Certain of these securities
may be offered and sold to "qualified institutional buyers" under Rule 144A of
the 1933 Act.
<TABLE>
<CAPTION>
Date of
Description Acquisition Par Amount Cost Value
==========================================================================================================
<S> <C> <C> <C> <C>
Den Danske Bank, 7.25s, 2005 6/21/95 $3,000,000 $2,997,330 $ 3,044,940
Financiara Ener National-Colombia, 6.625s, 1996 3/22/95 3,040,000 2,918,400 3,021,000
Hidroelectrica Alicura, 8.375s, 1999 4/12/94 4,325,000 4,070,906 3,806,000
Jet Equipment Trust, "B," 10.91s, 2006 12/21/94-4/25/95 3,095,327 3,249,286 3,526,971
Jet Equipment Trust, "B," 9.71s, 2014 7/26/95 1,500,000 1,500,000 1,613,550
Jet Equipment Trust, "C," 10.69s, 2015 4/07/94 2,390,000 2,390,000 2,731,244
Merrill Lynch Mortgage Investors,
Inc., 9.3s, 2016 12/16/92 4,416,081 4,432,642 4,509,923
Merrill Lynch Mortgage Investors,
Inc., 10.25s, 2009 4/07/92 1,210,587 1,245,391 1,224,957
Merrill Lynch Mortgage Investors,
Inc., 10.8s, 2009 4/08/92 56,727 58,570 56,567
Merrill Lynch Mortgage Investors,
Inc., 8.238s, 2021 6/22/94 2,000,000 1,386,250 1,530,660
Salton Sea Funding Corp., 7.37s, 2005 7/21/95 2,655,000 2,655,000 2,690,444
Salton Sea Funding Corp., 7.84s, 2010 7/21/95 2,775,000 2,775,000 2,822,203
Owens Corning Fiberglass Corp.,
9.9s, 2015 3/07/95 1,500,000 1,500,000 1,651,875
Qantas Airway Ltd., 7.5s, 2003 6/24/93 5,000,000 4,961,000 5,112,450
-----------
$37,342,784
===========
</TABLE>
26
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Trustees of MFS Series Trust IX and Shareholders of MFS Bond Fund:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of MFS Bond Fund (a series of MFS Series Trust IX)
as of October 31, 1995, the related statement of operations for the six months
then ended, the statement of changes in net assets for the six months ended
October 31, 1995 and the year ended April 30, 1995, and the financial highlights
for the six months ended October 31, 1995 and each of the years in the ten-year
period ended April 30, 1995. These financial statements and financial highlights
are the responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of the securities owned at
October 31, 1995 by correspondence with the custodian and brokers; where replies
were not received from brokers, we performed other auditing procedures. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of MFS Bond Fund at
October 31, 1995, the results of its operations, the changes in its net assets,
and its financial highlights for the respective stated periods in conformity
with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
December 4, 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.
27
<PAGE>
MFS INVESTMENT OPPORTUNITIES
MUTUAL FUNDS
The MFS Family of Funds [R], 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 literature [3] 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.
28
<PAGE>
THE MFS FAMILY OF FUNDS [Registration Mark]
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
================================================================================
Massachusetts Investors Trust
- --------------------------------------------------------------------------------
Massachusetts Investors Growth Stock Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] Capital Growth Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] Emerging Growth Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] Gold & Natural Resources Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] Growth Opportunities Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] Managed Sectors Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] OTC Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] Research Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] Value Fund
- --------------------------------------------------------------------------------
STOCK AND BOND
================================================================================
MFS [Registration Mark] Total Return Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] Utilities Fund
- --------------------------------------------------------------------------------
BOND
================================================================================
MFS [Registration Mark] Bond Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] Government Mortgage Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] Government Securities Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] High Income Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] Intermediate Income Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] Strategic Income Fund
(formerly MFS [Registration Mark] Income & Opportunity Fund)
- --------------------------------------------------------------------------------
LIMITED MATURITY BOND
================================================================================
MFS [Registration Mark] Government Limited Maturity Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] Limited Maturity Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] Municipal Limited Maturity Fund
- --------------------------------------------------------------------------------
WORLD
================================================================================
MFS [Registration Mark] World Asset Allocation Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] World Equity Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] World Governments Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] World Growth Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] World Total Return Fund
- --------------------------------------------------------------------------------
NATIONAL TAX-FREE BOND
================================================================================
MFS [Registration Mark] Municipal Bond Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] Municipal High Income Fund
(closed to new investors)
- --------------------------------------------------------------------------------
MFS [Registration Mark] Municipal Income Fund
- --------------------------------------------------------------------------------
STATE TAX-FREE BOND
================================================================================
Alabama, Arkansas, California, Florida, Georgia, Louisiana, Maryland,
Massachusetts, Mississippi, New York, North Carolina, Pennsylvania, South
Carolina, Tennessee, Texas, Virginia, Washington, West Virginia
- --------------------------------------------------------------------------------
MONEY MARKET
================================================================================
MFS [Registration Mark] Cash Reserve Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] Government Money Market Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] Money Market Fund
- --------------------------------------------------------------------------------
<PAGE>
MFS [Registration Mark] [Dalbar Logo] Bulk Rate
BOND FUND U.S. Postage
P A I D
500 Boylston Street Permit #55638
Boston, MA 02116 Boston, MA
[MFS Logo]
THE FIRST NAME IN MUTUAL FUNDS
MFB-3 12/95/50M 11/211/311
