<PAGE> 1
[MFS LOGO] SEMIANNUAL REPORT
OCTOBER 31, 1996
MFS LIMITED MATURITY FUND
[GRAPHIC]
America learns how "We invented the mutual fund" (see page 22)
<PAGE> 2
TABLE OF CONTENTS
Letter from the Chairman................................................... 1
Portfolio Manager's Overview............................................... 3
Portfolio Manager's Profile................................................ 4
Performance Summary........................................................ 5
Portfolio Concentration.................................................... 6
Fund Facts................................................................. 6
Portfolio of Investments................................................... 7
Financial Statements....................................................... 9
Notes to Financial Statements.............................................. 15
MFS Family of Funds........................................................ 24
Trustees and Officers...................................................... 25
- --------------------------------------------------------------------------------
HIGHLIGHTS
- - FOR THE SIX MONTHS ENDED OCTOBER 31, 1996, CLASS A SHARES OF THE FUND
PROVIDED A TOTAL RETURN AT NET ASSET VALUE OF 3.46%, CLASS B SHARES 3.03%,
AND CLASS C SHARES 3.16%.
- - THE PAST SIX MONTHS WERE A RELATIVELY TRANQUIL PERIOD FOR SHORTER-MATURITY
FIXED-INCOME SECURITIES AS INTEREST RATES ON TWO-YEAR U.S. TREASURIES TRADED
IN THE RELATIVELY NARROW RANGE OF 5.80% TO 6.40%.
- - THE FUND BENEFITED FROM MODEST INTEREST RATE DECLINES AND ITS OVERWEIGHTING
IN INVESTMENT-GRADE SECURITIES.
- - THE FUND'S MOST SIGNIFICANT COMMITMENT HAS BEEN TO THE UTILITY SECTOR, WHICH
MAKES UP AROUND 21% OF ASSETS.
- --------------------------------------------------------------------------------
<PAGE> 3
LETTER FROM THE CHAIRMAN
Dear Shareholders:
As we enter the final months of 1996, the U.S.
economy appears to have settled into a pattern of
[PHOTO] moderate growth and inflation -- two factors that
we think can be important contributors to a
favorable long-term investment climate. During the
first quarter of 1996, real (inflation-adjusted)
economic growth was 2.3% on an annualized basis,
followed by a rate of 4.7% in the second quarter.
However, this unexpectedly high level was followed by a more moderate 2.2% pace
during the third quarter. Overall, real growth in gross domestic product has
surpassed our expectations this year, and we now expect that growth for all of
1996 could exceed 2.5%. Although individual consumers appear to be carrying an
excessive debt load, the consumer sector itself, which represents two-thirds of
the economy, continues to support the automobile and housing markets. Consumer
spending has also been positively impacted by widespread job growth and, more
recently, rising wages. However, recent statistics appear to show a slowdown in
consumer spending. This is particularly true when considering overall retail
sales, which have been flat for several months. Furthermore, the economies of
Europe and Japan continue to be in the doldrums, weakening U.S. export markets
while subduing the capital spending plans of American corporations. Thus, while
economic growth should continue, we expect some slackening toward the end of the
year.
In the bond markets, persistent signs of economic weakness led to decreases
in short-term interest rates by the Federal Reserve Board in late 1995 and early
1996. Should signs of more rapid economic growth and, particularly, of higher
inflation resurface, we would expect the Fed to maintain its anti-inflationary
stance. In the beginning of the year, bond markets traded in a narrow range as
investors shifted between concern for the lack of a budget resolution in
Washington and hope that sluggish economic reports and low inflation might lead
to lower interest rates. Later, fixed-income markets began reacting to
conflicting signals regarding the economy's strength with more volatile trading
patterns marked by an upward bias in interest rates. Interest rates may move
even higher over the coming months, but we believe the current rise in bond
yields is reaching a point where fixed-income markets are equitably valued.
1
<PAGE> 4
LETTER FROM THE CHAIRMAN - continued
Finally, as you may notice, this report to shareholders incorporates a
number of changes which we hope you will find informative and useful. Following
the Portfolio Manager's Overview, we have added new information on the Fund's
holdings, including charts illustrating the portfolio's concentration in the
types of investments that meet its criteria. Near the back of the report,
telephone numbers and addresses are listed if you would like to contact MFS.
We appreciate your support and welcome any questions or comments you may
have.
Respectfully,
/s/ A. Keith Brodkin
- -------------------------
A. Keith Brodkin
Chairman and President
November 12, 1996
2
<PAGE> 5
PORTFOLIO MANAGER'S OVERVIEW
Dear Shareholders:
The past six months were a relatively tranquil
period for shorter-maturity fixed-income
[PHOTO] securities as interest rates on two-year U.S.
Treasuries traded in the relatively narrow range
of 5.8% to 6.4%. For the period as a whole,
two-year Treasuries declined slightly, beginning
the period at 6% and ending at 5.75%. There were
no rate changes by the Federal Reserve Board as
the economy continued to grow moderately, and inflationary pressures remained
absent. Despite market concerns over a pickup in inflation, both labor costs and
commodity prices have remained relatively restrained.
As a result of this modest rate decline, shareholders received a small
amount of capital appreciation in addition to their coupon income. For the six
months ended October 31, 1996, Class A shares of the Fund provided a total
return at net asset value of 3.46%, Class B shares 3.03%, and Class C shares
3.16%. These returns assume the reinvestment of distributions but exclude the
effects of any sales charges.
The Fund's performance during the past six months benefited from the modest
decline in interest rates and the Fund's overweighting in investment-grade
corporate securities. As is typical in periods of strong economic activity, the
4.25% return of short-term "BBB"-rated investment-grade corporate securities
outperformed U.S. Treasury securities, which returned 3.82%. (Note that
principal value and interest on Treasury securities are guaranteed by the U.S.
government if held to maturity.) The Fund's weightings in "BBB" investment-grade
securities remains at around 50% of the portfolio, which is roughly twice the
exposure of the competitive universe as defined by Lipper Analytical Services,
Inc., an independent firm that reports mutual fund performance.
In terms of sectors, the Fund's most significant commitment has been to the
utility sector, which makes up around 21% of assets. We believe this sector has
become undervalued due to investors' concerns about a deteriorating regulatory
environment. We believe the fortunes of Long Island Lighting, which at 5.5% of
assets represents the Fund's largest holding, will benefit from a plan developed
by the Long Island Power Authority to
3
<PAGE> 6
PORTFOLIO MANAGER'S OVERVIEW - continued
purchase most of its assets. Other utility holdings include Gulf States
Utilities (4.5% of the portfolio) and Central Maine Power (3.3%).
Respectfully,
/s/ Geoffrey L. Kurinsky
- -----------------------------
Geoffrey L. Kurinsky
Portfolio Manager
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER'S PROFILE
GEOFFREY KURINSKY BEGAN HIS CAREER AT MFS IN 1987 IN THE FIXED INCOME
DEPARTMENT. MR. KURINSKY IS A GRADUATE OF THE UNIVERSITY OF MASSACHUSETTS AND
BOSTON'S 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
1992, HE BECAME PORTFOLIO MANAGER OF MFS LIMITED MATURITY FUND.
- --------------------------------------------------------------------------------
4
<PAGE> 7
PERFORMANCE SUMMARY
Because mutual funds like MFS Limited Maturity 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>
CLASS A INVESTMENT RESULTS
(net asset value change including reinvested distributions)
<CAPTION>
6 Months 1 Year Life of Fund+
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cumulative Total Return +3.46% +5.93% +32.01%
- ----------------------------------------------------------------------------------------
Average Annual Total Return -- +5.93% +6.11%
- ----------------------------------------------------------------------------------------
SEC Results -- +3.35% +5.54%
- ----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
CLASS B INVESTMENT RESULTS
(net asset value change including reinvested distributions)
<CAPTION>
6 Months 1 Year Life of Fund+
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cumulative Total Return +3.03% +5.05% +28.49%
- ----------------------------------------------------------------------------------------
Average Annual Total Return -- +5.05% +5.50%
- ----------------------------------------------------------------------------------------
SEC Results -- +1.10% +5.15%
- ----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
CLASS C INVESTMENT RESULTS
(net asset value change including reinvested distributions)
<CAPTION>
6 Months 1 Year Life of Fund+
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cumulative Total Return +3.16% +5.18% +29.46%
- ----------------------------------------------------------------------------------------
Average Annual Total Return -- +5.18% +5.67%
- ----------------------------------------------------------------------------------------
SEC Results -- +4.19% +5.67%
- ----------------------------------------------------------------------------------------
<FN>
+ Commencement of operations for Class A is February 26, 1992.
</TABLE>
All results represent past performance and are not 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.
Class A SEC results include the maximum 2.50% sales charge. Class B SEC results
reflect the applicable contingent deferred sales charge (CDSC), which declines
over six years as follows: 4%, 4%, 3%, 3%, 2%, 1%, 0%. Class C shares have no
initial sales charge but, along with Class B shares, have higher annual fees and
expenses than Class A shares. Class C share purchases made on or after April 1,
1996 will be subject to a 1% CDSC if redeemed within 12 months of purchase. See
the prospectus for details.
Class B and Class C share performance includes the performance of the Fund's
Class A shares for periods prior to the commencement of offering of
5
<PAGE> 8
AVERAGE ANNUAL AND CUMULATIVE TOTAL RATES OF RETURN - continued
Class B shares on September 7, 1993 and of Class C shares on July 1, 1994. Sales
charges and operating expenses for Class A, Class B, and Class C shares differ.
The Class A share performance, which is included within the Class B and Class C
share SEC performance, has been adjusted to reflect the CDSC generally
applicable to Class B and Class C shares rather than the initial sales charge
generally applicable to Class A shares. Class B and Class C share performance
has not been adjusted, however, to reflect differences in operating expenses
(e.g., Rule 12b-1 fees), which generally are lower for Class A shares.
PORTFOLIO CONCENTRATION AS OF OCTOBER 31, 1996
LARGEST SECTORS
[PIE CHART]
- --------------------------------------------------------------------------------
FUND FACTS
STRATEGY: THE FUND'S PRIMARY INVESTMENT OBJECTIVE IS TO
PROVIDE AS HIGH A LEVEL OF CURRENT INCOME AS IS
BELIEVED TO BE CONSISTENT WITH PRUDENT INVESTMENT
RISK.
COMMENCEMENT OF
INVESTMENT OPERATIONS: FEBRUARY 26, 1992
SIZE: $138.2 MILLION NET ASSETS AS OF OCTOBER 31, 1996
- --------------------------------------------------------------------------------
6
<PAGE> 9
<TABLE>
PORTFOLIO OF INVESTMENTS (UNAUDITED) - October 31, 1996
<CAPTION>
Bonds - 97.8%
- -----------------------------------------------------------------------------------------
S&P Bond Principal Amount
Rating Issuer (000 Omitted) Value
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Banks and Credit Companies - 3.6%
BBB- Capital One Bank, 7.15s, 2006 $4,000 $ 4,067,880
A First Chicago Master Trust, 8.23s, 1996 1,000 1,000,620
-----------
$ 5,068,500
- -----------------------------------------------------------------------------------------
Consumer Goods and Services - 2.2%
BBB- Fingerhut Cos., Inc., 7.375s, 1999## $3,000 $ 3,035,370
- -----------------------------------------------------------------------------------------
Corporate Asset Backed - 3.5%
NR Merrill Lynch Mortgage Investors, Inc., 9.7s, 2010 $ 794 $ 808,140
NR Merrill Lynch Mortgage Investors, Inc., 9.75s, 2010 287 293,570
NR Merrill Lynch Mortgage Investors, Inc., 8.3s, 2011 38 38,885
NR Merrill Lynch Mortgage Investors, Inc., 10s, 2011 35 37,211
NR Merrill Lynch Mortgage Investors, Inc., 8.19s, 2021 3,591 3,647,732
-----------
$ 4,825,538
- -----------------------------------------------------------------------------------------
Entertainment - 0.7%
BBB- Time Warner, Inc., 7.45s, 1998 $1,030 $1,045,223
- -----------------------------------------------------------------------------------------
Financial Services - 8.2%
A Countrywide Funding Corp., 6.57s, 1997 $ 500 $ 502,980
NR Lehman Brothers Holdings, Inc., 7.375s, 2007 5,000 5,134,700
BBB- United Cos. Financial Corp., 7s, 1998 2,500 2,516,150
BBB- United Cos. Financial Corp., 9.35s, 1999 2,870 3,070,412
-----------
$11,224,242
- -----------------------------------------------------------------------------------------
Food and Beverage Products - 4.2%
BB+ Great Atlantic & Pacific Tea Co., Inc.,
9.125s, 1998 $3,500 $ 3,602,620
BBB- RJR Nabisco, Inc., 8s, 2001 2,250 2,254,298
-----------
$ 5,856,918
- -----------------------------------------------------------------------------------------
Foreign - U.S. Dollars - 9.8%
BBB- Empresa Electrica Guacolda S.A., 7.6s, 2001## $3,305 $ 3,363,829
BBB- Republic of Colombia, 8.75s, 1999 3,000 3,127,500
NR Republic of Slovenia, 7s, 2001## 4,000 4,061,600
NR United Mexican States, 9.75s, 2001## 3,000 3,002,400
-----------
$13,555,329
- -----------------------------------------------------------------------------------------
Forest and Paper Products - 2.0%
BBB- Boise Cascade Corp., 9.9s, 2001 $2,390 $ 2,697,713
- -----------------------------------------------------------------------------------------
Oils - 0.9%
BBB- Tosco Corp., 9s, 1997 $1,200 $ 1,212,000
- -----------------------------------------------------------------------------------------
Real Estate Investment Trusts - 6.3%
BBB- Sun Communities, Inc., 7.375s, 2001 $2,400 $ 2,427,000
BBB Taubman Realty Group LP, 8s, 2001 5,970 6,288,858
-----------
$ 8,715,858
- -----------------------------------------------------------------------------------------
Telecommunications - 4.7%
BBB Continental Cablevision, Inc., 11s, 2007 $3,000 $ 3,412,500
BBB- Tele-Communications, Inc., 7.375s, 2000 3,000 3,035,730
-----------
$ 6,448,230
- -----------------------------------------------------------------------------------------
</TABLE>
7
<PAGE> 10
<TABLE>
PORTFOLIO OF INVESTMENTS (UNAUDITED) - continued
<CAPTION>
Bonds - continued
- ----------------------------------------------------------------------------------------------
S&P Bond Principal Amount
Rating Issuer (000 Omitted) Value
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. Government and Agency Obligations - 30.8%
GOV Federal National Mortgage Association, 8.5s, 2007 $ 114 $ 119,512
GOV Federal National Mortgage Association, 7.5s, 2011 5,496 5,581,538
GOV Government National Mortgage Association, 7.5s, 2008-2011 9,333 9,520,063
GOV Government National Mortgage Association, 12.5s, 2011 498 585,673
GOV U.S. Treasury Notes, 9.125s, 1999 8,443 9,084,161
GOV U.S. Treasury Notes, 6.25s, 2001 17,500 17,614,800
------------
$ 42,505,747
- ----------------------------------------------------------------------------------------------
Utilities - Electric - 21.0%
BB Central Maine Power & Light Co., 7.5s, 1997 $ 4,500 $ 4,523,715
BBB- Gulf States Utilities Co., 8.21s, 2002 6,000 6,176,280
BBB- Long Island Lighting Co., 7.625s, 1998 7,500 7,544,925
BBB- Louisiana Power & Light Co., 10.67s, 2017 2,500 2,675,650
BBB- Salton Sea Funding Corp., 7.02s, 2000 4,000 4,031,560
BBB- System Energy Resources, 7.8s, 2000 4,000 4,061,520
------------
$ 29,013,650
- ----------------------------------------------------------------------------------------------
Total Investment (Identified Cost, $134,228,616) $135,204,318
Other Assets, Less Liabilities - 2.2% 3,035,862
- ----------------------------------------------------------------------------------------------
Net Assets - 100.0% $138,240,180
- ----------------------------------------------------------------------------------------------
<FN>
## SEC Rule 144A restriction.
</TABLE>
See notes to financial statements
8
<PAGE> 11
FINANCIAL STATEMENTS
<TABLE>
Statement of Assets and Liabilities (Unaudited)
<CAPTION>
- ---------------------------------------------------------------------------------
October 31, 1996
- ---------------------------------------------------------------------------------
<S> <C>
Assets:
Investments, at value (identified cost, $134,228,616) $135,204,318
Cash 127,044
Receivable for investments sold 3,097,200
Receivable for Fund shares sold 866,748
Interest receivable 2,312,594
Deferred organization expenses 1,447
Other assets 1,902
------------
Total assets $141,611,253
============
Liabilities:
Distributions payable $ 216,244
Payable for investments purchased 3,048,358
Payable for Fund shares reacquired 41,039
Payable for daily variation margin on open futures contracts 28,437
Payable to affiliates -
Management fee 1,519
Distribution fee 33,257
Accrued expenses and other liabilities 2,219
------------
Total liabilities $ 3,371,073
============
Net assets $138,240,180
============
Net assets consist of:
Paid-in capital $143,520,586
Unrealized appreciation on investments 528,019
Accumulated net realized loss on investments (4,902,488)
Accumulated distributions in excess of net investment income (905,937)
------------
Total $138,240,180
============
Shares of beneficial interest outstanding 19,414,177
============
Class A shares:
Net asset value
(net assets of $90,304,948 / 12,681,640 shares of beneficial
interest outstanding) $ 7.12
------------
Offering price per share (100/97.5) $ 7.30
============
Class B shares:
Net asset value and offering price per share
(net assets of $31,517,529 / 4,430,730 shares of beneficial
interest outstanding) $ 7.11
============
Class C shares:
Net asset value and offering price per share
(net assets of $16,417,703 / 2,301,807 shares of beneficial
interest outstanding) $ 7.13
============
</TABLE>
On sales of $50,000 or more, the offering price of Class A shares is reduced. A
contingent deferred sales charge may be imposed on redemptions of Class A, Class
B, and Class C shares.
See notes to financial statements
9
<PAGE> 12
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Statement of Operations (Unaudited)
- ---------------------------------------------------------------------------------
Six Months Ended October 31, 1996
- ---------------------------------------------------------------------------------
<S> <C>
Net investment income:
Interest income $ 5,215,272
-----------
Expenses -
Management fee $ 278,708
Trustees' compensation 10,412
Shareholder servicing agent fee (Class A) 72,434
Shareholder servicing agent fee (Class B) 32,138
Shareholder servicing agent fee (Class C) 11,257
Distribution and service fee (Class A) 72,831
Distribution and service fee (Class B) 140,751
Distribution and service fee (Class C) 74,412
Custodian fee 25,262
Printing 16,849
Auditing fees 15,150
Postage 9,169
Legal fees 1,053
Amortization of organization expenses 2,306
Miscellaneous 47,729
-----------
Total expenses $ 810,461
Fees paid indirectly (827)
Preliminary refund of expenses pursuant to reimbursement
agreement 33,508
-----------
Net expenses $ 843,142
-----------
Net investment income $ 4,372,130
-----------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $ (733,606)
Futures contracts 198,028
-----------
Net realized loss on investments $ (535,578)
-----------
Change in unrealized appreciation (depreciation) -
Investments $ 2,084,637
Futures contracts (1,195,126)
-----------
Net unrealized gain on investments $ 889,511
-----------
Net realized and unrealized gain on investments $ 353,933
-----------
Increase in net assets from operations $ 4,726,063
-----------
</TABLE>
See notes to financial statements
10
<PAGE> 13
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
- ---------------------------------------------------------------------------------------
Six Months Ended Year Ended
October 31, 1996 April 30,
(Unaudited) 1996
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 4,372,130 $ 7,954,234
Net realized gain (loss) on investments (535,578) 1,310,598
Net unrealized gain (loss) on investments 889,511 (1,277,654)
------------ ------------
Increase in net assets from operations $ 4,726,063 $ 7,987,178
------------ ------------
Distributions declared to shareholders -
From net investment income (Class A) $ (3,110,959) $ (6,197,868)
From net investment income (Class B) (835,137) (1,273,328)
From net investment income (Class C) (426,034) (483,038)
In excess of net investment income (Class A) (267,034) (105,605)
In excess of net investment income (Class B) (71,685) (37,487)
In excess of net investment income (Class C) (36,569) (27,955)
------------ ------------
Total distributions declared to shareholders $ (4,747,418) $ (8,125,281)
------------ ------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 55,920,234 $ 78,771,957
Net asset value of shares issued to shareholders
in reinvestment of distributions 3,438,716 5,979,726
Cost of shares reacquired (59,624,638) (53,643,464)
------------ ------------
Increase (decrease) in net assets from
Fund share transactions $ (265,688) $ 31,108,219
------------ ------------
Total increase (decrease) in net assets $ (287,043) $ 30,970,116
Net assets:
At beginning of period 138,527,223 107,557,107
------------ ------------
At end of period (including accumulated
distributions
in excess of net investment income of
$905,937 and $530,649, respectively) $138,240,180 $138,527,223
============ ============
</TABLE>
See notes to financial statements
11
<PAGE> 14
<TABLE>
FINANCIAL STATEMENTS - continued
<CAPTION>
Financial Highlights
- -------------------------------------------------------------------------------------------
Six Months
Ended
October 31, Year Ended April 30,
1996 ------------------------------------------------
(Unaudited) 1996 1995 1994 1993 1992*
- -------------------------------------------------------------------------------------------
Class A
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each
period):
Net asset
value - beginning of
period $ 7.12 $ 7.10 $ 7.14 $ 7.46 $ 7.29 $ 7.31
------- ------- ------- -------- ------- ------
Income from investment
operations# -
Net investment
incomesec. $ 0.23 $ 0.48 $ 0.46 $ 0.44 $ 0.48 $ 0.08
Net realized and
unrealized gain (loss)
on investments 0.02 0.03 (0.04) (0.32) 0.17 (0.02)
para. para.
------- ------- ------- -------- ------- ------
Total from
investment
operations $ 0.25 $ 0.51 $ 0.42 $ 0.12 $ 0.65 $ 0.06
------- ------- ------- -------- ------- ------
Less distributions
declared to
shareholders++++ -
From net investment
income $ (0.23) $ (0.48) $ (0.46) $ (0.42) $ (0.48) $(0.08)
In excess of net
investment income (0.02) (0.01) -- (0.02) -- --
------- ------- ------- -------- ------- ------
Total distributions
declared to
shareholders $ (0.25) $ (0.49) $ (0.46) $ (0.44) $ (0.48) $(0.08)
------- ------- ------- -------- ------- ------
Net asset value - end of
period $ 7.12 $ 7.12 $ 7.10 $ 7.14 $ 7.46 $ 7.29
------- ------- ------- -------- ------- ------
Total return++ 3.46% 7.50% 6.09% 1.61% 9.17% 4.98%+
Ratios (to average net assets)/
Supplemental data[Section]:
Expenses## 0.95%+ 0.95% 0.95% 0.85% 0.60% 0.55%+
Net investment income 6.47%+ 6.73% 6.54% 5.99% 6.40% 6.22%+
Portfolio turnover 313% 385% 498% 861% 472% 72%
Net assets at end of period $90,305 $98,582 $85,773 $100,297 $67,470 $4,924
- -----------
<FN>
* For the period from the commencement of investment operations, February 26,
1992 to April 30, 1992.
+ Annualized.
++ Not annualized.
# Per share data for the periods subsequent to April 30, 1994 is based on
average shares outstanding.
## For periods ending after September 1, 1995, the Fund's expenses are
calculated without reduction for fees paid indirectly.
para. The per share amount is not in accord with the net realized and unrealized
gain (loss) for the period because of the timing of sales of Fund shares and
the amount of per share realized and unrealized gains and losses at such time.
++ Total returns for Class A shares do not include the applicable sales charge.
If the charge had been included, the results would have been lower.
++++ For the year ended April 30, 1993, the per share distribution from net
realized gain on investments was $0.0021.
[section] The investment adviser voluntarily agreed to maintain the expenses of the
Fund, exclusive of management, distribution and service fees, at not more
than 0.40% of average daily net assets, for the periods indicated. To the
extent actual expenses were over/under these limitations, the net investment
income per share and the ratios:
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net investment income $0.23 $0.48 $0.46 $0.42 $0.43 $0.07
Ratios (to average net assets):
Expenses 0.88%+ 0.91% 0.97% 1.07% 1.29% 1.44%+
Net investment
income 6.53%+ 6.77% 6.52% 5.77% 5.70% 5.33%+
</TABLE>
See notes to financial statements
12
<PAGE> 15
FINANCIAL STATEMENTS - continued
<TABLE>
FINANCIAL HIGHLIGHTS -- CONTINUED
<CAPTION>
- ----------------------------------------------------------------------------------------
SIX MONTHS
ENDED
OCTOBER 31, YEAR ENDED APRIL 30,
1996 -------------------------------
(UNAUDITED) 1996 1995 1994**
- ----------------------------------------------------------------------------------------
CLASS B
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per share data (for a share outstanding
throughout each period):
Net asset value - beginning of period $ 7.11 $ 7.10 $ 7.14 $ 7.50
------- ------- ------- ----------
Income from investment operations# -
Net investment incomesec. $ 0.20 $ 0.42 $ 0.41 $ 0.21
Net realized and unrealized gain (loss)
on investments 0.02 0.03 (0.05) (0.33)
------- ------- ------- ----------
Total from investment operations $ 0.22 $ 0.45 $ 0.36 $ (0.12)
------- ------- ------- ----------
Less distributions declared to
shareholders -
From net investment income $ (0.20) $ (0.42) $ (0.40) $ (0.23)
In excess of net investment income (0.02) (0.02) -- (0.01)
------- ------- ------- ----------
Total distributions declared to
shareholders $ (0.22) $ (0.44) $ (0.40) $ (0.24)
------- ------- ------- ----------
Net asset value - end of period $ 7.11 $ 7.11 $ 7.10 $ 7.14
------- ------- ------- ----------
Total return 3.03%++ 6.52% 5.20% (1.69)%++
Ratios (to average net assets)/
Supplemental data[section]:
Expenses## 1.76%+ 1.75% 1.81% 1.74%+
Net investment income 5.70%+ 5.90% 5.73% 4.90%+
Portfolio turnover 313% 385% 498% 861%
Net assets at end of period (000 omitted) $31,518 $26,464 $17,334 $ 12,072
- ----------------
<FN>
** For the period from the commencement of offering of Class B shares, September
7, 1993 to April 30, 1994.
+ Annualized.
++ Not annualized.
# Per share data for the periods subsequent to April 30, 1994 is based on
average shares outstanding.
## For periods ending after September 1, 1995, the Fund's expenses are
calculated without reduction for fees paid indirectly.
[section] The investment adviser voluntarily agreed to maintain the expenses of the
Fund, exclusive of management, distribution and service fees, at not more
than 0.40% of average daily net assets, for the periods indicated. To the
extent actual expenses were over/under these limitations, the net investment
income per share and the ratios would have been:
<CAPTION>
<S> <C> <C> <C> <C>
Net investment income $0.20 $0.42 $0.41 $0.20
Ratios (to average net assets):
Expenses 1.77%+ 1.77% 1.82% 1.96%+
Net investment income 5.69%+ 5.88% 5.72% 4.68%+
</TABLE>
See notes to financial statements
13
<PAGE> 16
FINANCIAL STATEMENTS - continued
<TABLE>
Financial Highlights -- continued
<CAPTION>
- ---------------------------------------------------------------------------------------
Six Months
Ended
October 31, Year Ended April 30,
1996 ---------------------
(Unaudited) 1996 1995***
- ---------------------------------------------------------------------------------------
Class C
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per share data (for a share outstanding throughout each
period):
Net asset value - beginning of period $ 7.13 $ 7.11 $ 7.08
------- ------- ------
Income from investment operations# -
Net investment incomesec. $ 0.21 $ 0.41 $ 0.37
Net realized and unrealized gain (loss) on
investments 0.01 0.04 (0.01)
------- ------- ------
Total from investment operations $ 0.22 $ 0.45 $ 0.36
------- ------- ------
Less distributions declared to
shareholders -
From net investment income $ (0.20) $ (0.41) $(0.33)
In excess of net investment income (0.02) (0.02) --
------- ------- ------
Total distributions declared to shareholders $ (0.22) $ (0.43) $(0.33)
------- ------- ------
Net asset value - end of period $ 7.13 $ 7.13 $ 7.11
------- ------- ------
Total return 3.16%++ 6.44% 5.25%++
Ratios (to average net assets)/Supplemental datasec.:
Expenses## 1.80%+ 1.80% 1.85%+
Net investment income 5.83%+ 5.76% 6.01%+
Portfolio turnover 313% 385% 498%
Net assets at end of period (000 omitted) $16,418 $13,482 $4,450
- ---------
<FN>
*** For the period from the commencement of offering of Class C shares, July 1,
1994 to April 30, 1995.
+ Annualized.
++ Not annualized.
# Per share data for the periods subsequent to April 30, 1994 is based on
average shares outstanding.
## For periods ending after September 1, 1995, the Fund's expenses are
calculated without reduction for fees paid indirectly.
[section] The investment adviser voluntarily agreed to maintain the expenses of the
Fund, exclusive of management, distribution and service fees, at not more
than 0.40% of average daily net assets, for the periods indicated. To the
extent actual expenses were over/under these limitations, the net investment
income per share and the ratios would have been:
<CAPTION>
<S> <C> <C> <C>
Net investment income $0.21 $0.41 $0.37
Ratios (to average net assets):
Expenses 1.73%+ 1.75% 1.88%+
Net investment income 5.89%+ 5.81% 5.98%+
</TABLE>
See notes to financial statements
14
<PAGE> 17
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(1) BUSINESS AND ORGANIZATION
MFS Limited Maturity 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
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 - Debt securities (other than short-term obligations which
mature in 60 days or less), including listed issues, 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. 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.
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. The
Fund, 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.
Deferred Organization Expenses - Costs incurred by the Fund in connection with
its organization have been deferred and are being amortized on a straight-line
basis over a five-year period beginning on the date of commencement of Fund
operations.
15
<PAGE> 18
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - continued
Futures Contracts - The Fund may enter into futures contracts for the delayed
delivery of securities or contracts based on financial indices at a fixed price
on a future date. In entering such contracts, the Fund is required to deposit
either in cash or securities an amount equal to a certain percentage of the
contract amount. Subsequent payments are made or received by the Fund each day,
depending on the daily fluctuations in the value of the underlying security, and
are recorded for financial statement purposes as unrealized gains or losses by
the Fund. The Fund's investment in futures contracts is designed to hedge
against anticipated future changes in interest or exchange rates or securities
prices. Investments in interest rate futures for purposes other than hedging may
be made to modify the duration of the portfolio without incurring the additional
transaction costs involved in buying and selling the underlying securities.
Should interest rates or securities prices move unexpectedly, the Fund may not
achieve the anticipated benefits of the financial futures contracts and may
realize a loss.
Investment Transactions and Income - Investment transactions are recorded on the
trade date. Interest income is recorded on the accrual basis. All premium and
original issue discount are amortized or accreted for financial statement and
tax reporting purposes as required by federal income tax regulations. 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.
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 and Trust Company, 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 taxable
income, including any net realized gain on investments. Accordingly, no
provision for federal income or excise tax is provided. The Fund files a tax
return annually using tax accounting methods required under provisions of the
Code which may differ from generally accepted accounting principles, the basis
on which these financial statements are prepared. Accordingly, the amount of net
investment income and net realized gain reported on these financial statements
may differ from that reported on the Fund's tax return and, consequently, the
character of distributions to shareholders reported in the financial highlights
may differ from that reported to shareholders on Form 1099-DIV. Distributions to
shareholders are recorded on the ex-dividend date.
16
<PAGE> 19
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - continued
The Fund distinguishes between distributions on a tax basis and a financial
reporting basis and requires that only distributions in excess of tax basis
earnings and profits are reported in the financial statements as a tax return of
capital. Differences in the recognition or classification of income between the
financial statements and tax earnings and profits which result in temporary
over-distributions for financial statement purposes, are classified as
distributions in excess of net investment income or accumulated net realized
gains.
At April 30, 1996, the Fund, for federal income tax purposes, had a capital loss
carryforward of $3,619,464 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.
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.
(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
0.40% of average daily net assets.
Under a temporary expense reimbursement agreement with MFS, MFS has voluntarily
agreed to pay all of the Fund's operating expenses, exclusive of management,
distribution and service fees. The Fund in turn will pay MFS an expense
reimbursement fee not greater than 0.40% of average daily net assets. To the
extent that the expense reimbursement fee exceeds the Fund's actual expenses,
the excess will be applied to amounts paid by MFS in prior years. At October 31,
1996, the aggregate unreimbursed expenses owed to MFS by the Fund amounted to
$72,851 after $33,508 net reimbursement in the current period.
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 $2,592 for the period ended
October 31, 1996.
17
<PAGE> 20
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - continued
Distributor - MFD, a wholly owned subsidiary of MFS, as distributor, received
$27,162 for the period ended October 31, 1996, as its portion of the sales
charge on sales of Class A shares of the Fund.
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 who 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. Service fee payments in the amount of
0.15% of average daily net assets are currently being paid by the Fund, payment
of the remaining Class A service fee, equal to 0.10% per annum, will become
payable on such date as the Trustees of the Trust may determine. MFD retains the
service fee for accounts not attributable to a securities dealer which amounted
to $9,587 for the period ended October 31, 1996. Payment of the 0.10% per annum
Class A distribution fee will commence on such date as the Trustees of the Trust
may determine. Fees incurred under the distribution plan during the period ended
October 31, 1996 were 0.15% of average daily net assets 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 of 0.75% per annum, and a service fee of up to 0.25% per annum,
of the Fund's average daily net assets attributable to Class B and Class C
shares. Except in the case of the 0.25% per annum Class B service fee paid by
the Fund upon the sale of Class B shares, the Class B service fee is currently
set at 0.15% per annum and may be increased to a maximum of 0.25% per annum on
such date as the Trustees of the Trust may determine. MFD will pay to securities
dealers who 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 $2,364 and $296 for Class B and Class C shares, respectively, for the period
ended October 31, 1996. Fees incurred under the distribution plans during the
period ended October 31, 1996 were 0.96% and
18
<PAGE> 21
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - continued
1.00% of average daily net assets attributable to Class B and Class C shares on
an annualized basis respectively.
Purchases over $1 million of Class A shares and certain purchases into
retirement plans are subject to a contingent deferred sales charge in the event
of a shareholder redemption within 12 months following such purchase. A
contingent deferred sales charge is imposed on shareholder redemptions of Class
B shares in the event of a shareholder redemption within six years of purchase.
A contingent deferred sales charge is imposed on shareholder redemptions of
Class C shares in the event of a shareholder redemption within 12 months of
purchases made on or after April 1, 1996. MFD receives all contingent deferred
sales charges. Contingent deferred sales charges imposed during the period ended
October 31, 1996 were $231, $24,625 and $5,893 for Class A, Class B, and Class C
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>
Purchases and sales of investments, other than purchased option transactions and
short-term obligations, were as follows:
<CAPTION>
PURCHASES SALES
- -----------------------------------------------------------------------------------
<S> <C> <C>
U.S. government securities $274,343,804 $248,175,555
------------ ------------
Investments (non-U.S. government securities) $152,511,653 $178,899,879
------------ ------------
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:
<CAPTION>
<S> <C>
Aggregate cost $134,228,616
------------
Gross unrealized appreciation $ 1,203,383
Gross unrealized depreciation (227,681)
------------
Net unrealized appreciation $ 975,702
------------
</TABLE>
19
<PAGE> 22
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - continued
(5) SHARES OF BENEFICIAL INTEREST
<TABLE>
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:
<CAPTION>
Class A Shares
SIX MONTHS ENDED YEAR ENDED
OCTOBER 31, 1996 APRIL 30, 1996
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 4,573,191 $ 32,451,916 5,978,674 $ 43,102,663
Shares issued to shareholders
in reinvestment of
distributions 347,255 2,462,448 638,556 4,600,038
Shares reacquired (6,081,271) (43,135,501) (4,851,688) (34,933,425)
---------- ------------ ---------- ------------
Net increase (decrease) (1,160,825) $ (8,221,137) 1,765,542 $ 12,769,276
---------- ------------ ---------- ------------
Class B Shares
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
OCTOBER 31, 1996 APRIL 30, 1996
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 2,347,635 $ 16,633,402 2,854,814 $ 20,545,660
Shares issued to shareholders
in reinvestment of
distributions 86,581 613,112 135,072 971,974
Shares reacquired (1,723,804) (12,200,396) (1,712,548) (12,331,259)
---------- ------------ ---------- ------------
Net increase 710,412 $ 5,046,118 1,277,338 $ 9,186,375
---------- ------------ ---------- ------------
Class C Shares
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
OCTOBER 31, 1996 APRIL 30, 1996
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 962,033 $ 6,834,916 2,095,271 $15,123,634
Shares issued to shareholders
in reinvestment of
distributions 51,145 363,156 56,575 407,714
Shares reacquired (603,267) (4,288,741) (886,139) (6,378,780)
-------- ----------- --------- -----------
Net increase 409,911 $ 2,909,331 1,265,707 $ 9,152,568
-------- ----------- --------- -----------
</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 permits
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, 1996 was $723.
(7) FINANCIAL INSTRUMENTS
The Fund 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. These financial instruments include futures contracts.
The notional or
20
<PAGE> 23
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - continued
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, 1996, is as follows:
Futures Contracts
<TABLE>
<CAPTION>
UNREALIZED
DESCRIPTION EXPIRATION CONTRACTS POSITION DEPRECIATION
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Treasury Notes December 1996 260 Short $(447,683)
---------
</TABLE>
At October 31, 1996, the Fund had sufficient cash and/or securities to cover
margin requirements on open futures contracts.
--------------------------------------------
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.
21
<PAGE> 24
ADS ILLUSTRATE MFS' UNPARALLELED EXPERIENCE
[GRAPHIC]
MFS' new advertisements look back at some of the most important events of the
twentieth century to demonstrate a simple point -- no other fund company can
match MFS' experience. MFS has been managing money for investors since 1924
when we "invented" the nation's first fund, Massachusetts Investors Trust.
Print and broadcast ads will offer dramatic portraits of what that 72 years'
worth of experience means. By the time the Apollo rockets began taking off for
the moon, for example, MFS had already been exploring the universe of stocks for
more than four decades. The company was also on the scene, as other ads will
illustrate, when Louis Armstrong was redefining jazz and when the great
racehorse Whirlaway was galloping to a Triple Crown victory.
An MFS Chairman Keith Brodkin emphasizes, in today's increasingly competitive
mutual fund industry, it's important to have a recognizable brand name. The
goal of the MFS ad campaign is to increase public awareness of the company and
its unique role in the industry as the inventor of the mutual fund.
The across-the-board strength of the MFS Family of Funds[Registered Trademark]
will be highlighted in the print ads, which cite the performance results and
Morningstar ratings of various MFS funds.
The broadcast ads appear on a number of cable and network television news and
sports programs. The print ads appear in newspapers such as The Wall Street
Journal and USA Today; in financial magazines such as Kiplinger's Personal
Finance and Money, and in leisure magazines such as Golf Digest and Tennis.
(The cost of the campaign is being underwritten by MFS. It is neither a fund
shareholder nor an annuity contractholder expense.)
22
<PAGE> 25
IT'S EASY TO CONTACT US
[PHONE] MFS AUTOMATED INFORMATION
ACCOUNT INFORMATION:
Call 1-800-MFS-TALK (1-800-637-8255)
anytime.
INVESTMENT OUTLOOK:
Call 1-800-637-4458 anytime for the MFS outlook
on the bond and stock markets.
[QUESTION MFS PERSONAL SERVICE
MARK]
ACCOUNT SERVICE/LITERATURE:
Call 1-800-225-2606 any business day
from 8 a.m. to 8 p.m. Eastern time.
PRODUCT INFORMATION:
Call 1-800-637-2929 any business day
from 9 a.m. to 5 p.m. Eastern time.
IRA SERVICE:
Call 1-800-637-1255 any business day
from 9 a.m. to 5 p.m. Eastern time.
SERVICE FOR THE HEARING-IMPAIRED:
Call 1-800-637-6576 any business day
from 9 a.m. to 5 p.m. Eastern time (TDD required).
[ENVELOPE] MFS ADDRESSES
MFS Service Center, Inc.
P.O. Box 2281
Boston, MA 02107-9906
WORLD WIDE WEB:
www.mfs.com
23
<PAGE> 26
THE MFS FAMILY OF FUNDS[Registered Trademark]
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 advisor or call MFS at
1-800-225-2606 any business day from 8 a.m. to 8 p.m. Eastern time (or leave a
message anytime). This material should be read carefully before investing or
sending money.
<TABLE>
<CAPTION>
STOCK WORLD
- ---------------------------------------------------------- -------------------------------------------------------------------------
<S> <C>
Massachusetts Investors Trust MFS[Registered Trademark] Foreign & Colonial Emerging Markets Equity Fund
Massachusetts Investors Growth Stock Fund MFS[Registered Trademark] Foreign & Colonial International Growth Fund
MFS[Registered Trademark] Capital Growth Fund MFS[Registered Trademark] Foreign & Colonial International Growth and
MFS[Registered Trademark] Emerging Growth Fund Income Fund
MFS[Registered Trademark] Gold & Natural Resources Fund MFS[Registered Trademark] World Asset Allocation Fund
MFS[Registered Trademark] Growth Opportunities Fund MFS[Registered Trademark] World Equity Fund
MFS[Registered Trademark] Managed Sectors Fund MFS[Registered Trademark] World Governments Fund
MFS[Registered Trademark] OTC Fund MFS[Registered Trademark] World Growth Fund
MFS[Registered Trademark] Research Fund MFS[Registered Trademark] World Total Return Fund
MFS[Registered Trademark] Value Fund
NATIONAL TAX-FREE BOND
-------------------------------------------------------------------------
STOCK AND BOND MFS[Registered Trademark] Municipal Bond Fund
- ---------------------------------------------------------- MFS[Registered Trademark] Municipal High Income Fund
MFS[Registered Trademark] Total Return Fund MFS[Registered Trademark] Municipal Income Fund
MFS[Registered Trademark] Utilities Fund
STATE TAX-FREE BOND
BOND -------------------------------------------------------------------------
- ---------------------------------------------------------- Alabama, Arkansas, California, Florida,
MFS[Registered Trademark] Bond Fund Georgia, Maryland, Massachusetts,
MFS[Registered Trademark] Government Mortgage Fund Mississippi, New York, North Carolina,
MFS[Registered Trademark] Government Securities Fund Pennsylvania, South Carolina, Tennessee,
MFS[Registered Trademark] High Income Fund Virginia, West Virginia
MFS[Registered Trademark] Intermediate Income Fund
MFS[Registered Trademark] Strategic Income Fund MONEY MARKET
-------------------------------------------------------------------------
LIMITED MATURITY BOND MFS[Registered Trademark] Cash Reserve Fund
- ---------------------------------------------------------- MFS[Registered Trademark] Government Money Market Fund
MFS[Registered Trademark] Government Limited Maturity Fund MFS[Registered Trademark] Money Market Fund
MFS[Registered Trademark] Limited Maturity Fund
MFS[Registered Trademark] Municipal Limited Maturity Fund
</TABLE>
24
<PAGE> 27
MFS[Registered Trademark] LIMITED MATURITY FUND
<TABLE>
<S> <C>
TRUSTEES INVESTOR INFORMATION
A. Keith Brodkin* - Chairman and President For MFS stock and bond market outlooks, call
toll free: 1-800-637-4458 anytime from a
Richard B. Bailey* - Private Investor; touch-tone telephone.
Former Chairman and Director (until 1991),
Massachusetts Financial Services Company; For information on MFS mutual funds,
Director, Cambridge Bancorp; Director; call your financial adviser or, for an
Cambridge Trust Company information kit, call toll free:
1-800-637-2929 any business day from
Peter G. Harwood - Private Investor 9 a.m. to 5 p.m. Eastern time (or leave
a message anytime).
J. Atwood Ives - Chairman and Chief Executive
Officer, Eastern Enterprises INVESTOR SERVICE
MFS Service Center, Inc.
Lawrence T. Perera - Partner, Hemenway & P.O. Box 2281
Barnes Boston, MA 02107-9906
William J. Poorvu - Adjunct Professor, Harvard For general information, call toll free:
University Graduate School of Business 1-800-225-2606 any business day from
Administration 8 a.m. to 8 p.m. Eastern time.
Charles W. Schmidt - Private Investor For service to speech- or hearing-impaired, call
toll free: 1-800-637-6576 any business day from
Arnold D. Scott* - Senior Executive Vice 9 a.m. to 5 p.m. Eastern time. To use
President, Director and Secretary, Massachusetts this service, your phone must be equipped with
Financial Service Company a Telecommunications Device for the Deaf.
Jeffrey L. Shames* - President and Director, For share prices, account balances, and
Massachusetts Financial Services Company exchanges, call toll free: 1-800-MFS-TALK
(1-800-637-8255) anytime from a touch-tone
Elaine R. Smith - Independent Consultant telephone.
David B. Stone - Chairman, North American WORLD WIDE WEB
Management Corp. (investment advisers) www.mfs.com
INVESTMENT ADVISER
Massachusetts Financial Services Company [DALBAR LOGO]
500 Boylston Street For the third year in a row, MFS earned a #1
Boston, MA 02116-3741 ranking in the DALBAR, Inc. Broker/Dealer Survey,
Main Office Operations Service Quality Category. The
DISTRIBUTOR firm achieved a 3.48 overall score on a scale of 1 to
MFS Fund Distributors, Inc. 4 in the 1996 survey. A total of 110 firms responded,
500 Boylston Street offering input on the quality of service they received
Boston, MA 02116-3741 from 29 mutual fund companies nationwide. The survey
contained questions about service quality in 15 categories,
PORTFOLIO MANAGER including "knowledge of phone service contracts," "accuracy
Geoffrey L. Kurinsky* of transaction processing," and "overall ease of doing
business with the firm."
TREASURER
W. Thomas London*
ASSISTANT TREASURER
James O. Yost*
SECRETARY
Stephen E. Cavan*
ASSISTANT SECRETARY
James R. Bordewick, Jr.*
CUSTODIAN
Investors Bank and Trust Company
* Affiliated with the Investment Adviser
</TABLE>
25
<PAGE> 28
<TABLE>
<CAPTION>
<S> <C> <C>
MFS[REGISTERED TRADEMARK] LIMITED [MFS LOGO]
MATURITY FUND[servicemark] ----------------------
500 Boylston Street BULK RATE
Boston, MA 02116 U.S. POSTAGE
[LOGO] PAID
PERMIT #55638
BOSTON, MA
----------------------
[Copyright]1996 MFS Fund Distributors, Inc., 500 Boylston Street, Boston, MA 02116
MLM-3 12/96 14M 88/288/388
</TABLE>
