<PAGE>
[LOGO] M F S(SM) Semiannual Report
INVESTMENT MANAGEMENT October 31, 1997
MFS(R) LIMITED MATURITY FUND
[Graphic Omitted]
<PAGE>
TABLE OF CONTENTS
Letter from the Chairman .................................................. 1
Portfolio Manager's Overview .............................................. 2
Portfolio Manager's Profile ............................................... 3
Portfolio Concentration ................................................... 3
Fund Facts ................................................................ 4
Performance Summary ....................................................... 4
Portfolio of Investments .................................................. 6
Financial Statements ...................................................... 9
Notes to Financial Statements ............................................. 17
The MFS Family of Funds(R) ................................................ 24
Trustees and Officers ..................................................... 25
HIGHLIGHTS
o FOR THE SIX MONTHS ENDED OCTOBER 31, 1997, CLASS A SHARES OF THE FUND
PROVIDED A TOTAL RETURN AT NET ASSET VALUE OF 4.39%, CLASS B SHARES 3.98%,
CLASS C SHARES 3.95%, AND CLASS I SHARES 4.47%. (SEE PERFORMANCE SUMMARY
FOR MORE INFORMATION.)
o THE PERIOD SAW STRONG RETURNS FROM U.S. FIXED-INCOME MARKETS, AS THE
PROSPECTS FOR CONTINUED STEADY ECONOMIC GROWTH AND LOW INFLATION SPARKED A
RALLY IN U.S. TREASURIES. INTEREST RATES ON TWO-YEAR TREASURIES DECLINED
FROM 6.25% ON MAY 1, 1997, TO AROUND 5.50% BY THE END OF OCTOBER.
o THE FUND'S PERFORMANCE DURING THIS PERIOD BENEFITED FROM THE DECLINE IN
INTEREST RATES, AS WELL AS FROM THE FUND'S OVERWEIGHTING IN
INVESTMENT-GRADE CORPORATE SECURITIES.
o MAJOR COMMITMENTS FOR THE FUND INCLUDE THE BANK AND FINANCE SECTORS AND
TELECOMMUNICATIONS. THE STEADY-GROWTH, LOW-INFLATION ENVIRONMENT HAS HELPED
BOTH BANKING AND BROKERAGE COMPANIES, WHILE A CONTINUED FOCUS ON DEBT
REDUCTION AND INCREASING CASH FLOWS SHOULD RESULT IN FURTHER CREDIT
UPGRADES FOR THE TELECOMMUNICATIONS INDUSTRY.
<PAGE>
LETTER FROM THE CHAIRMAN
[Photo of A. Keith Brodkin]
Dear Shareholders:
An unprecedented combination of generally positive factors has helped the U.S.
economy enjoy a sustained period of relative stability and moderate growth in
which thousands of new jobs have been created every month, inflation remains
under control, and the investment climate -- at least until now -- has been
favorable. For example, the increased use of technology and other productivity
enhancements, as well as corporate restructuring and global competition, is
improving companies' balance sheets and helping control inflation. Meanwhile,
borrowing by corporations and governments continues to decline, while consumer
confidence is increasing, although consumer debt levels are still uncomfortably
high. The rapid pace of growth seen in the first quarter slowed to an annual
rate of 3.3% in the second quarter and 3.5% in the third. We believe economic
momentum will carry well into the first quarter of 1998, as the money supply is
increasing at a rapid rate, and it still appears that Christmas sales could be
quite good. Because economic growth continues to be impressive, markets are
likely to continue to focus on the Federal Reserve Board's (the Fed's)
willingness to raise interest rates.
The U.S. government bond market has benefited from the deflationary events in
Southeast Asia, while the high-yield and emerging-debt markets have come under
severe pressure. Inflation remains under control, and the Fed will most likely
take a wait-and-see attitude toward raising interest rates. As a result, our
near-term outlook for high-grade markets is neutral to moderately positive. At
the same time, high-yield markets, having gone through a substantial correction,
could offer reasonable value but require careful selection. Overall,
fixed-income markets appear to be reasonably valued.
We appreciate your support and welcome any questions or comments you may have.
Respectfully,
/s/ A. Keith Brodkin
A. Keith Brodkin
Chairman and President
November 14, 1997
<PAGE>
PORTFOLIO MANAGER'S OVERVIEW
[Photo of Geoffrey L. Kurinsky]
Geoffrey L. Kurinsky
Dear Shareholders:
The past six months provided strong returns for U.S. fixed-income securities, as
the prospects for continued steady economic growth and low inflation sparked a
rally in U.S. Treasuries. Interest rates on two-year Treasuries declined from
6.25% on May 1, 1997, to around 5.50% by the end of October. (Principal value
and interest on Treasury securities are guaranteed by the U.S. government if
held to maturity.) This decline was sparked by positive inflation data, which
changed the markets' previous expectations that the Fed would have to raise
interest rates. We believe the Fed will most likely take a wait-and-see attitude
toward raising rates, especially given the market turmoil in the Pacific Rim,
which could slow the pace of economic growth globally.
As a result of the market rally, all classes of the Fund's shares provided
strong returns for the six-month period ended October 31, 1997. Class A shares
provided a total return of 4.39%, Class B shares 3.98%, Class C shares 3.95%,
and Class I shares 4.47%. These returns assume the reinvestment of distributions
but exclude the effects of any sales charges.
The Fund's performance during this period benefited from the decline in interest
rates and the Fund's overweighting in investment-grade corporate securities. As
is typical during periods of strong economic activity, the 4.51% return of
short-term, investment-grade corporate securities rated "BBB" by Standard &
Poor's outperformed comparable-maturity Treasury security returns of 4.14%. The
weighting in "BBB"-rated investment-grade securities comprises about 66% of the
Fund's portfolio, around three times the exposure of the competitive universe as
defined by Lipper Analytical Services, Inc., an independent firm that reports
mutual fund performance. We believe environments like this, characterized by
steady economic growth and low inflation, are ideal for the cash flows of
corporate America and, by extension, lower- quality, investment-grade
securities.
Major commitments for the Fund include the bank and finance sectors, with 18% of
assets, and telecommunications, with 17%. The steady-growth, low-inflation
environment has been beneficial to both banking and brokerage companies, while
the continued focus on debt reduction and increasing cash flows in the
telecommunications industry should result in further credit upgrades in coming
months.
Respectfully,
/s/ Geoffrey L. Kurinsky
Geoffrey L. Kurinsky
Portfolio Manager
PORTFOLIO MANAGER'S PROFILE
GEOFFREY L. KURINSKY BEGAN HIS CAREER AT MFS IN 1987 IN THE FIXED INCOME
DEPARTMENT, AND WAS NAMED ASSISTANT VICE PRESIDENT IN 1988, VICE PRESIDENT IN
1989, AND SENIOR VICE PRESIDENT IN 1993. A GRADUATE OF THE UNIVERSITY OF
MASSACHUSETTS AND THE BOSTON UNIVERSITY GRADUATE SCHOOL OF MANAGEMENT, HE HAS
MANAGED MFS(R) LIMITED MATURITY FUND SINCE 1992.
PORTFOLIO CONCENTRATION AS OF OCTOBER 31, 1997
QUALITY RATINGS
"BBB Corporate Bonds 66%
U.S. Government and Agency Obligations 18%
"AAA" Corporate Bonds 10%
"A" Corporate Bonds 6%
For a more complete breakdown, refer to the Portfolio of Investments.
<PAGE>
FUND FACTS
OBJECTIVE: 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
CLASS INCEPTION: CLASS A FEBRUARY 26, 1992
CLASS B SEPTEMBER 7, 1993
CLASS C JULY 1, 1994
CLASS I JANUARY 2, 1997
SIZE: $157.2 MILLION NET ASSETS AS OF OCTOBER 31, 1997
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, Class C, and Class I shares for the
applicable time periods.
AVERAGE ANNUAL AND CUMULATIVE TOTAL RATES OF RETURN AS OF OCTOBER 31, 1997
CLASS A INVESTMENT RESULTS
(net asset value change including reinvested distributions)
6 Months 1 Year 5 Years Life of Fund*
- --------------------------------------------------------------------------------
Cumulative Total Return +4.39% +6.78% +32.63% +40.97%
- --------------------------------------------------------------------------------
Average Annual Total Return -- +6.78% + 5.81% + 6.23%
- --------------------------------------------------------------------------------
SEC Results -- +4.15% + 5.28% + 5.76%
- --------------------------------------------------------------------------------
CLASS B INVESTMENT RESULTS
(net asset value change including reinvested distributions)
6 Months 1 Year 5 Years Life of Fund*
- --------------------------------------------------------------------------------
Cumulative Total Return +3.98% +5.96% +28.05% +36.14%
- --------------------------------------------------------------------------------
Average Annual Total Return -- +5.96% + 5.07% + 5.58%
- --------------------------------------------------------------------------------
SEC Results -- +1.96% + 4.76% + 5.44%
- --------------------------------------------------------------------------------
CLASS C INVESTMENT RESULTS
(net asset value change including reinvested distributions)
6 Months 1 Year 5 Years Life of Fund*
- --------------------------------------------------------------------------------
Cumulative Total Return +3.95% +5.89% +28.97% +37.10%
- --------------------------------------------------------------------------------
Average Annual Total Return -- +5.89% + 5.22% + 5.71%
- --------------------------------------------------------------------------------
SEC Results -- +4.89% + 5.22% + 5.71%
- --------------------------------------------------------------------------------
* For the period from the commencement of the Fund's investment operations,
February 26, 1992, through October 31, 1997.
CLASS I INVESTMENT RESULTS
(net asset value change including reinvested distributions)
6 Months 1 Year 5 Years Life of Fund*
- --------------------------------------------------------------------------------
Cumulative Total Return +4.47% +6.85% +32.69% +41.05%
- --------------------------------------------------------------------------------
Average Annual Total Return -- +6.85% + 5.82% + 6.24%
- --------------------------------------------------------------------------------
* For the period from the commencement of the Fund's investment operations,
February 26, 1992, through October 31, 1997.
All results are historical and assume the reinvestment of dividends and capital
gains. Investment return and principal value will fluctuate, and shares, when
redeemed, may be worth more or less than their original cost. Past performance
is no guarantee of future results.
Class A share SEC results include the maximum 2.50% sales charge. Class B share
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 are
subject to a 1% CDSC if redeemed within 12 months of purchase. Class I shares
have no sales charge or Rule 12b-1 fees and are only available to certain
institutional investors.
Class B and Class C share results include the performance and the operating
expenses (e.g., Rule 12b-1 fees) of the Fund's Class A shares for periods prior
to the inception of Class B and Class C shares. Because operating expenses
attributable to Class B and Class C shares are higher than those of Class A
shares, Class B and Class C share performance generally would have been lower
than Class A share performance. The Class A share performance 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 I share results include the performance and the operating expenses (e.g.,
Rule 12b-1 fees) of the Fund's Class A shares for periods prior to the inception
of Class I shares. Because operating expenses attributable to Class A shares are
greater than those of Class I shares, Class I share performance generally would
have been higher than Class A share performance. The Class A share performance
included within the Class I share performance has been adjusted to reflect the
fact that Class I shares have no initial sales charge.
Performance results reflect any applicable expense subsidies and waivers,
without which the results would have been less favorable. Subsidies and waivers
may be rescinded at any time. See the prospectus for details.
<PAGE>
PORTFOLIO OF INVESTMENTS (Unaudited) - October 31, 1997
<TABLE>
<CAPTION>
Bonds - 98.9%
- ------------------------------------------------------------------------------------------------------
S&P
BOND RATING PRINCIPAL AMOUNT
(UNAUDITED) ISSUER (000 OMITTED) VALUE
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. Bonds - 89.1%
Bank and Finance - 17.9%
BBB ADVANTA Corp., 6.574s, 2000 $ 3,780 $ 3,767,110
BB Contifinancial Corp., 7.5s, 2002 9,336 9,498,353
A Lehman Brothers Holdings, Inc.,
7.375s, 2007 5,000 5,153,000
BB MBNA Corp., 6.963s, 2002## 3,000 3,042,600
BBB- United Cos. Financial Corp., 7s, 1998 3,750 3,766,650
BBB- United Cos. Financial Corp., 9.35s,
1999 2,870 3,008,937
------------
$ 28,236,650
- ------------------------------------------------------------------------------------------------------
Consumer Goods and Services - 5.7%
BBB Fingerhut Cos., Inc., 7.375s, 1999 $ 5,500 $ 5,565,340
BBB- RJR Nabisco, Inc., 8s, 2001 3,250 3,357,835
------------
$ 8,923,175
- ------------------------------------------------------------------------------------------------------
Corporate Asset Backed - 13.2%
NR Amerco, 6.65s, 1999## $ 5,850 $ 5,878,665
NR Banamex Credit Card Merchant Voucher,
6.25s, 2003 7,800 7,790,250
NR CST Export Master Trust, 8.22s, 2004 3,000 3,045,000
AAA Merrill Lynch Mortgage Investors, Inc.,
9.7s, 2010 255 256,173
AA Merrill Lynch Mortgage Investors, Inc.,
9.75s, 2010 118 118,693
AA Merrill Lynch Mortgage Investors, Inc.,
8.3s, 2011 27 26,817
AAA Merrill Lynch Mortgage Investors, Inc.,
10s, 2011 21 21,844
AAA Merrill Lynch Mortgage Investors, Inc.,
8.103s, 2022 2,354 2,368,973
NR Time Warner Pass-Through Asset Trust,
6.1s, 2001 1,330 1,309,412
------------
$ 20,815,827
- ------------------------------------------------------------------------------------------------------
Forest and Paper Products - 3.4%
BBB- Boise Cascade Corp., 9.9s, 2001 $ 4,715 $ 5,276,274
- ------------------------------------------------------------------------------------------------------
Government National Mortgage Association - 5.7%
GOV GNMA, 7.5s, 2007 - 2011 $ 8,189 $ 8,426,792
GOV GNMA, 12.5s, 2011 396 464,475
------------
$ 8,891,267
- ------------------------------------------------------------------------------------------------------
Restaurants and Lodging - 3.9%
BBB+ Hilton Hotels Corp., 7.375s, 2002 $ 6,000 $ 6,208,125
- ------------------------------------------------------------------------------------------------------
Telecommunications - 16.9%
BB- Bell Cablemedia PLC, 11.875s, 2005 $ 7,465 $ 6,457,225
BBB Continental Cablevision Inc., 11s, 2007### 8,000 8,962,800
BB Tele-Communications, Inc., 7.385s, 2001 $ 5,000 $ 5,118,900
NR WorldCom, Inc., 8.875s, 2006 5,550 6,053,441
------------
$ 26,592,366
- ------------------------------------------------------------------------------------------------------
U.S. Federal Agencies - 7.9%
GOV Federal Home Loan Mortgage Corp., 9s, 2020 $ 1,648 $ 1,776,289
GOV Federal Home Loan Mortgage Corp.,
6.35s, 2027 7,446 7,469,103
GOV Federal National Mortgage Assn.,
7.5s, 2001 3,103 3,136,751
------------
$ 12,382,143
- ------------------------------------------------------------------------------------------------------
U.S. Treasury Obligations - 4.8%
GOV U.S. Treasury Notes, 5.5s, 2000 $ 7,350 $ 7,300,608
GOV U.S. Treasury Notes, 6.25s, 2002### 180 183,515
------------
$ 7,484,123
- ------------------------------------------------------------------------------------------------------
Utilities - Electric - 9.7%
BBB Edison Mission Energy Funding Corp.,
6.77s, 2003## $ 2,506 $ 2,525,497
BBB- Gulf States Utilities Co., 8.21s, 2002 6,000 6,249,900
BBB Long Island Lighting Co., 9.625s, 2024 2,500 2,622,550
BBB- Salton Sea Funding Corp., 6.69s, 2000 557 558,651
BBB- Salton Sea Funding Corp., 7.02s, 2000 3,261 3,287,618
------------
$ 15,244,216
- ------------------------------------------------------------------------------------------------------
Total U.S. Bonds $140,054,166
- ------------------------------------------------------------------------------------------------------
Foreign Bonds - 9.8%
Chile - 2.2%
BBB- Empresa Electric Guacolda S.A., 7.6s, 2001## $ 3,305 $ 3,405,406
- ------------------------------------------------------------------------------------------------------
China - 1.2%
BBB- Hero Asian BVI Ltd., 9.11s, 2001## $ 1,897 $ 1,988,520
- ------------------------------------------------------------------------------------------------------
Colombia - 2.0%
BBB- Republic of Colombia, 8.75s, 1999 $ 3,000 $ 3,094,110
- ------------------------------------------------------------------------------------------------------
South Korea - 4.4%
BBB+ Shinhan Bank, 7.25s, 2002## $ 7,093 $ 6,985,683
- ------------------------------------------------------------------------------------------------------
Total Foreign Bonds $ 15,473,719
- ------------------------------------------------------------------------------------------------------
Total Bonds (Identified Cost, $154,336,114) $155,527,885
- ------------------------------------------------------------------------------------------------------
<CAPTION>
Repurchase Agreement - 4.4%
- ------------------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT
ISSUER (000 OMITTED) VALUE
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Investments in repurchase agreements with
Goldman Sachs, in a joint trading account
($490,178,000), dated 10/31/97 due
11/01/97, total to be received $490,410,835
collateralized by various U.S. Treasury
Federal Agency Obligations (with
$450,709,000 par and valued at
$490,788,912) at cost $ 6,886 $ 6,886,000
- ------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $161,222,114) $162,413,885
Other Assets, Less Liabilities - (3.3)% (5,182,684)
- ------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $157,231,201
- ------------------------------------------------------------------------------------------------------
## SEC Rule 144A restriction.
### Securities segregated as collateral for an open futures contract.
See notes to financial statements
</TABLE>
<PAGE>
FINANCIAL STATEMENTS
Statement of Assets and Liabilities (Unaudited)
- --------------------------------------------------------------------------------
OCTOBER 31, 1997
- ------------------------------------------------------------------------------
Assets:
Investments, at value (identified cost, $161,222,114) $162,413,885
Cash 4,949
Receivable for Fund shares sold 1,143,996
Receivable for investments sold 7,496,206
Interest receivable 2,653,535
Other assets 14,133
------------
Total assets $173,726,704
------------
Liabilities:
Distributions payable $ 801,388
Payable for Fund shares reacquired 8,195,642
Payable for investments purchased 7,441,221
Payable for daily variation margin on open futures
contracts 11,250
Payable to affiliates -
Management fee 1,812
Distribution and service fee 42,378
Accrued expenses and other liabilities 1,812
------------
Total liabilities $ 16,495,503
------------
Net assets $157,231,201
============
Net assets consist of:
Paid-in capital $162,546,322
Unrealized appreciation on investments 965,554
Accumulated net realized loss on investments (5,443,385)
Accumulated distributions in excess net investment income (837,290)
------------
Total $157,231,201
============
Shares of beneficial interest outstanding 22,116,885
==========
Class A shares:
Net asset value per share
(net assets of $93,118,408 / 13,094,221 shares of
beneficial interest outstanding) $7.11
=====
Offering price per share (100 / 97.5) $7.29
=====
Class B shares:
Net asset value and offering price per share
(net assets of $39,158,820 / 5,516,938 shares of
beneficial interest outstanding) $7.10
=====
Class C shares:
Net asset value and offering price per share
(net assets of $22,107,711 / 3,105,295 shares of
beneficial interest outstanding) $7.12
=====
Class I shares:
Net asset value, offering price, and redemption price per share
(net assets of $2,846,262 / 400,431 shares of
beneficial interest outstanding) $7.11
=====
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
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Statement of Operations (Unaudited)
- ------------------------------------------------------------------------------
SIX MONTHS ENDED OCTOBER 31, 1997
- ------------------------------------------------------------------------------
Net investment income:
Interest income $5,814,102
----------
Expenses -
Management fee $ 309,778
Trustees' compensation 11,139
Shareholder servicing agent fee 100,607
Distribution and service fee (Class A) 69,795
Distribution and service fee (Class B) 183,418
Distribution and service fee (Class C) 105,472
Printing 28,216
Administrative fee 11,609
Postage 11,323
Auditing fees 8,759
Custodian fee 6,194
Legal fees 1,025
Miscellaneous 81,362
----------
Total expenses $ 928,697
Fees paid indirectly (4,053)
Preliminary reimbursement of expense to investment adviser 53,595
----------
Net expenses $ 978,239
----------
Net investment income $4,835,863
----------
Realized and unrealized gain on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $ 533,752
Futures contracts (907,693)
----------
Net realized loss on investments $ (373,941)
----------
Change in unrealized appreciation (depreciation) -
Investments $1,920,980
Futures contracts (51,182)
----------
Net unrealized gain on investments $1,869,798
----------
Net realized and unrealized gain on investments $1,495,857
----------
Increase in net assets from operations $6,331,720
==========
See notes to financial statements
<PAGE>
<TABLE>
FINANCIAL STATEMENTS - continued
Statement of Changes in Net Assets
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED
OCTOBER 31, 1997 YEAR ENDED
(UNAUDITED) APRIL 30, 1997
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 4,835,863 $ 9,200,518
Net realized loss on investments (373,941) (771,679)
Net unrealized gain (loss) on investments 1,869,798 (542,752)
------------ -------------
Increase in net assets from operations $ 6,331,720 $ 7,886,087
------------ -------------
Distributions declared to shareholders -
From net investment income (Class A) $ (3,047,298) $ (6,384,077)
From net investment income (Class B) (1,111,849) (1,840,820)
From net investment income (Class C) (602,318) (942,712)
From net investment income (Class I) (74,398) (32,909)
In excess of net investment income (Class A) (10,189) (295,355)
In excess of net investment income (Class B) (3,718) (85,164)
In excess of net investment income (Class C) (2,014) (43,614)
In excess of net investment income (Class I) (249) (1,523)
------------ -------------
Total distributions declared to shareholders $ (4,852,033) $ (9,626,174)
------------ -------------
Net increase in net assets from Fund share transactions $ 8,201,623 $ 10,762,755
------------ -------------
Total increase in net assets $ 9,681,310 $ 9,022,668
Net assets:
At beginning of period 147,549,891 138,527,223
------------ -------------
At end of period (including accumulated distributions in
excess of net investment income of $837,290 and $821,120,
respectively) $157,231,201 $ 147,549,891
============ =============
See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS - continued
Financial Highlights
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED APRIL 30,
OCTOBER 31, 1997 ---------------------------------------------
(UNAUDITED) 1997 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------
CLASS A
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per share data (for a share outstanding
throughout each period):
Net asset value - beginning of period $ 7.04 $ 7.12 $ 7.10 $ 7.14
------ ------ ------ ------
Income from investment operations# -
Net investment income(S) $ 0.24 $ 0.47 $ 0.48 $ 0.46
Net realized and unrealized gain (loss) on
investments 0.07 (0.06) 0.03 (0.04)
------ ------ ------ ------
Total from investment operations $ 0.31 $ 0.41 $ 0.51 $ 0.42
------ ------ ------ ------
Less distributions declared to shareholders -
From net investment income $(0.24) $(0.47) $(0.48) $(0.46)
In excess of net investment income(+++) (0.00) (0.02) (0.01) --
------ ------ ------ ------
Total distributions declared to shareholders $(0.24) $(0.49) $(0.49) $(0.46)
------ ------ ------ ------
Net asset value - end of period $ 7.11 $ 7.04 $ 7.12 $ 7.10
====== ====== ====== ======
Total return(+) 4.39%++ 5.83% 7.50% 6.09%
Ratios (to average net assets)/Supplemental data(S):
Expenses 0.95%+ 0.94% 0.95% 0.95%
Net investment income 6.57%+ 6.57% 6.73% 6.54%
Portfolio turnover 113% 489% 385% 498%
Net assets at end of period (000 omitted) $93,118 $91,887 $98,582 $85,773
+Annualized.
++Not annualized.
#Per share data for the periods subsequent to April 30, 1994, are 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.
(+)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 six months ended October 31, 1997, the per share distribution in excess of net investment income was $0.0008.
(S)The investment advisor voluntarily agreed to maintain the expenses of the Fund, exclusive of management, distributions,
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:
Net investment income $ 0.24 $ 0.47 $ 0.48 $ 0.46
Ratios (to average net assets):
Expenses## 0.89%+ 0.89% 0.91% 0.97%
Net investment income 6.63%+ 6.62% 6.77% 6.52%
See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS - continued
Financial Highlights - continued
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
YEAR ENDED APRIL 30,
---------------------------------------------
1994 1993 1992*
- ----------------------------------------------------------------------------------------------------------------
CLASS A
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $ 7.46 $ 7.29 $ 7.31
------ ------ ------
Income from investment operations# -
Net investment income(S) $ 0.44 $ 0.48 $ 0.08
Net realized and unrealized gain (loss) on investments (0.32) 0.17+ (0.02)+
------ ------ ------
Total from investment operations $ 0.12 $ 0.65 $ 0.06
------ ------ ------
Less distributions declared to shareholders(++) -
From net investment income $(0.42) $(0.48) $(0.08)
In excess of net investment income (0.02) -- --
------ ------ ------
Total distributions declared to shareholders $(0.44) $(0.48) $(0.08)
------ ------ ------
Net asset value - end of period $ 7.14 $ 7.46 $ 7.29
====== ====== ======
Total return(+) 1.61% 9.17% 4.98%+
Ratios (to average net assets)/Supplemental data(S):
Expenses 0.85% 0.60% 0.55%+
Net investment income 5.99% 6.40% 6.22%+
Portfolio turnover 861% 472% 72%
Net assets at end of period (000 omitted) $100,297 $67,470 $4,924
*For the period from the commencement of the Fund's investment
operations, February 26, 1992, through April 30, 1992.
+Annualized.
#Per share data for the periods subsequent to April 30, 1994, are 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.
+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.
(S)The investment advisor voluntarily agreed to maintain the expenses of the Fund, exclusive of management,
distributions, 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:
Net investment income $ 0.42 $ 0.43 $ 0.07
Ratios (to average net assets):
Expenses## 1.07% 1.29% 1.44%+
Net investment income 5.77% 5.70% 5.33%+
See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS - continued
Financial Highlights - continued
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED APRIL 30,
OCTOBER 31, 1997 ------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994**
- -----------------------------------------------------------------------------------------------------------------------
CLASS B
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period
$ 7.03 $ 7.11 $ 7.10 $ 7.14 $ 7.50
------ ------ ------ ------ ------
Income from investment operations# -
Net investment income(S) $ 0.20 $ 0.41 $ 0.42 $ 0.41 $ 0.21
Net realized and unrealized gain (loss) on
investments 0.08 (0.05) 0.03 (0.05) (0.33)
------ ------ ------ ------ ------
Total from investment operations $ 0.28 $ 0.36 $ 0.45 $ 0.36 $(0.12)
------ ------ ------ ------ ------
Less distributions declared to shareholders -
From net investment income $(0.20) $(0.42) $(0.42) $(0.40) $(0.23)
In excess of net investment income (0.01) (0.02) (0.02) -- (0.01)
------ ------ ------ ------ ------
Total distributions declared to
shareholders $(0.21) $(0.44) $(0.44) $(0.40) $(0.24)
------ ------ ------ ------ ------
Net asset value - end of period $ 7.10 $ 7.03 $ 7.11 $ 7.10 $ 7.14
====== ====== ====== ====== ======
Total return 3.98%++ 4.99% 6.52% 5.20% (1.69)%++
Ratios (to average net assets)/Supplemental data(S):
Expenses 1.75%+ 1.78% 1.75% 1.81% 1.74%+
Net investment income 5.73%+ 5.75% 5.90% 5.73% 4.90%+
Portfolio turnover 113% 489% 385% 498% 861%
Net assets at end of period (000 omitted) $39,159 $34,875 $26,464 $17,334 $12,072
**For the period from the commencement of the Fund's offering of Class B shares, September 7, 1993, through April
30, 1994.
+Annualized.
++Not annualized.
#Per share data are 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.
(S)The investment advisor voluntarily agreed to maintain the expenses of the Fund, exclusive of management,
distributions, 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:
Net investment income $ 0.20 $ 0.41 $ 0.42 $ 0.41 $ 0.20
Ratios (to average net assets):
Expenses## 1.69%+ 1.77% 1.77% 1.82% 1.96%+
Net investment income 5.79%+ 5.76% 5.88% 5.72% 4.68%+
See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS - continued
Financial Highlights - continued
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED APRIL 30,
OCTOBER 31, 1997 ----------------------------
(UNAUDITED) 1997 1996 1995***
- -----------------------------------------------------------------------------------------------------------------
CLASS C
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $ 7.05 $ 7.13 $ 7.11 $ 7.08
------ ------ ------ ------
Income from investment operations# -
Net investment income(S) $ 0.20 $ 0.41 $ 0.41 $ 0.37
Net realized and unrealized gain (loss) on investments 0.08 (0.06) 0.04 (0.01)
------ ------ ------ ------
Total from investment operations $ 0.28 $ 0.35 $ 0.45 $ 0.36
------ ------ ------ ------
Less distributions declared to shareholders -
From net investment income $(0.20) $(0.41) $(0.41) $(0.33)
In excess of net investment income (0.01) (0.02) (0.02) --
------ ------ ------ ------
Total distributions declared to sharheolders $(0.21) $(0.43) $(0.43) $(0.33)
------ ------ ------ ------
Net asset value -- end of period $ 7.12 $ 7.05 $ 7.13 $ 7.11
====== ====== ====== ======
Total return 3.95%++ 5.08% 6.44% 5.25%++
Ratios (to average net assets)/Supplemental data(S):
Expenses 1.80%+ 1.80% 1.80% 1.85%+
Net investment income 5.67%+ 5.80% 5.76% 6.01%+
Portfolio turnover 113% 489% 385% 498%
Net assets at end of period (000 omitted) $22,108 $18,862 $13,842 $4,450
***For the period from the commencement of the Fund's offering of Class C shares, July 1, 1994, through April 30, 1995.
+Annualized.
++Not annualized.
#Per share data are 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.
(S)The investment advisor voluntarily agreed to maintain the expenses of the fund, exclusive of management,
distributions, 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:
Net investment income $ 0.20 $ 0.41 $ 0.41 $ 0.37
Ratios (to average net assets):
Expenses## 1.74%+ 1.81% 1.75% 1.88%+
Net investment income 5.73%+ 5.80% 5.81% 5.98%+
See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS - continued
Financial Highlights - continued
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
OCTOBER 31, 1997 APRIL 30,
(UNAUDITED) 1997****
- ------------------------------------------------------------------------------------------------------------
CLASS I
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $ 7.04 $ 7.08
------ ------
Income from investment operations# -
Net investment income(S) $ 0.23 $ 0.15
Net realized and unrealized gain (loss) on investments 0.08 (0.03)
------ ------
Total from investment operations $ 0.31 $ 0.12
------ ------
Less distributions declared to shareholders -
From net investment income $(0.23) $(0.15)
In excess of net investment income (0.01) (0.01)
------ ------
Total distributions declared to shareholders $(0.24) $(0.16)
------ ------
Net asset value - end of period $ 7.11 $ 7.04
====== ======
Total return 4.47%++ 1.72%++
Ratios (to average net assets)/Supplemental data(S):
Expenses 0.80%+ 1.17%+
Net investment income 6.72%+ 8.68%+
Portfolio turnover 113% 489%
Net assets at end of period (000 omitted) $2,846 $1,925
****For the period from the commencement of the Fund's offering of Class I shares, January 2, 1997, through
April 30, 1997.
+Annualized.
++Not annualized.
#Per share data are based on average shares outstanding.
##For fiscal years ending after September 1, 1995, the Fund's expenses are calculated without reduction for
fees indirectly.
(S)The investment advisor voluntarily agreed to maintain the expenses of the fund, exclusive of management,
distributions, 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:
Net investment income $ 0.23 $ 0.15
Ratios (to average net assets):
Expenses## 0.74%+ 1.17%+
Net investment income 6.78%+ 8.68%+
See notes to financial statements
</TABLE>
<PAGE>
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 reported at market value using closing settlement 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. 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.
Futures Contracts - The Fund may enter into futures contracts for the delayed
delivery of securities or currency, 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 or exchange rates or securities prices move
unexpectedly, the Fund may not achieve the anticipated benefits of the 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 is 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 custody fee is calculated as a percentage of
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 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. 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, 1997, the Fund, for federal income tax purposes, had a capital loss
carryforward of $4,844,580 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, ($3,619,464) and April 30, 2005, ($1,225,116).
Multiple Classes of Shares of Beneficial Interest - The Fund offers multiple
classes of shares. The classes of shares differ in their respective distribution
and service fees. All shareholders bear the common expenses of the Fund pro rata
based on settled shares outstanding 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 MFS to
provide overall investment advisory and administrative services, and general
office facilities. The management fee is computed daily and paid monthly at an
annual rate of 0.40% of average daily net assets.
The Fund has a temporary expense reimbursement agreement whereby 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, 1997, the Fund has reimbursed MFS for all expenses paid by MFS under
the reimbursement agreement and the agreement has been terminated.
Administrator - The Fund has an administrative services agreement with MFS to
provide the Fund with certain financial, legal, shareholder servicing,
compliance, and other administrative services. As a partial reimbursement for
the cost of providing these services, the Fund pays MFS an administrative fee at
the following annual percentages of the Fund's average daily net assets,
provided that the administrative fee is not assessed on Fund assets that exceed
$3 billion:
First $1 billion 0.0150%
Next $1 billion 0.0125%
Next $1 billion 0.0100%
In excess of $3 billion 0.0000%
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 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 $2,864 for the period ended
October 31, 1997.
Distributor - MFD, a wholly owned subsidiary of MFS, as distributor, received
$22,147 for the period ended October 31, 1997, as its portion of the sales
charge on sales of Class A shares of the Fund.
The Trustees have adopted a distribution plan for Class A, Class B, and Class C
shares pursuant to Rule 12b-1 of the Investment Company Act of 1940 as follows:
The Fund's 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 (reduced to a maximum of 0.05% per annum for an indefinite period) 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 $11,805 for the period ended October 31,
1997. Payment of the 0.10% per annum Class A distribution fee will commence on
such date as the Trustees of the Fund may determine. Fees incurred under the
distribution plan during the period ended October 31, 1997, were 0.15% of
average daily net assets attributable to Class A shares on an annualized basis.
The Trustees have adopted a distribution plan relating solely to Class B and C
shares pursuant to Rule 12b-1 of the Investment Company Act of 1940 as follows:
The Fund's distribution plan provides 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. The
service fee is currently being reduced to 0.15% on Class B shares held over one
year. 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 $3,740 and $330 for Class B and Class C
shares, respectively, for the period ended October 31, 1997. Fees incurred under
the distribution plan during the period ended October 31, 1997, were 0.95% and
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 by 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 purchase. MFD receives
all contingent deferred sales charges. Contingent deferred sales charges imposed
during the period ended October 31, 1997, were $5,622, $33,527, and $10,005 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 Fund's average daily net assets at an effective annual rate of
0.13%.
(4) Portfolio Securities
Purchases and sales of investments, other than purchased option transactions and
short-term obligations, were as follows:
PURCHASES SALES
- --------------------------------------------------------------------------------
U.S. government securities $90,449,634 $91,361,115
----------- -----------
Investments (non-U.S. government securities) $87,995,575 $77,693,105
----------- -----------
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:
Aggregate cost $161,222,114
------------
Gross unrealized appreciation $ 1,512,027
Gross unrealized depreciation (320,256)
------------
Net unrealized appreciation $ 1,191,771
============
(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>
Class A Shares
<CAPTION>
PERIOD ENDED OCTOBER 31, 1997 YEAR ENDED APRIL 30, 1997
----------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 16,957,218 $ 120,062,682 18,594,948 $ 131,842,272
Shares issued to
shareholders in
reinvestment of
distributions 259,790 1,839,203 679,953 4,817,456
Transfer to Class I -- -- (208,928) (1,608,228)
Shares reacquired (17,169,284) (121,587,524) (19,861,941) (140,565,252)
----------- ------------- ----------- -------------
Net increase (decrease) 47,724 $ 314,361 (795,968) $ (5,513,752)
=========== ============= =========== =============
</TABLE>
<TABLE>
Class B Shares
<CAPTION>
PERIOD ENDED OCTOBER 31, 1997 YEAR ENDED APRIL 30, 1997
----------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 2,161,086 $ 15,254,646 4,460,355 $ 31,584,299
Shares issued to
shareholders in
reinvestment of
distributions 87,078 615,317 179,795 1,272,096
Shares reacquired (1,690,044) (11,942,543) (3,401,650) (24,063,061
----------- ------------- ----------- -------------
Net increase 558,120 $ 3,927,420 1,238,500 $ 8,793,335
=========== ============= =========== =============
</TABLE>
<TABLE>
Class C Shares
<CAPTION>
PERIOD ENDED OCTOBER 31, 1997 YEAR ENDED APRIL 30, 1997
----------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 1,336,913 $ 9,477,561 1,857,379 $ 13,187,162
Shares issued to
shareholders in
reinvestment of
distributions 49,285 349,467 107,096 759,821
Shares reacquired (954,837) (6,768,199) (1,182,437) (8,400,483)
----------- ------------- ----------- -------------
Net increase 431,361 $ 3,058,829 782,038 $ 5,546,500
======= ============= ======= =============
</TABLE>
<TABLE>
Class I Shares
<CAPTION>
PERIOD ENDED OCTOBER 31, 1997 YEAR ENDED APRIL 30, 1997*
----------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 126,835 $ 899,086 152,170 $ 949,580
Shares issued to
shareholders in
reinvestment of
distributions 8,344 59,074 4,893 34,499
Transfer from Class A -- -- 208,928 1,608,228
Shares reacquired (8,082) (57,147) (92,657) (655,634)
------- ------------- ------- -------------
Net increase 127,097 $ 901,013 273,334 $ 1,936,673
======= ============= ======= =============
</TABLE>
*For the period from commencement of the Fund's offering of Class I shares,
January 2, 1997, through April 30, 1997.
(6) Line of Credit
The Fund and other affiliated funds participate in a $400 million unsecured line
of credit provided by a syndication of banks under a line of credit agreement.
Borrowings may be made to temporarily finance the repurchase of Fund shares.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the bank's base rate. In addition, a commitment fee, based on the average daily
unused portion of the line of credit, is allocated among the participating funds
at the end of each quarter. The commitment fee allocated to the Fund for the
period ended October 31, 1997, was $431.
(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 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, 1997, is as
follows:
<TABLE>
Futures Contracts
UNREALIZED
DESCRIPTION EXPIRATION CONTRACTS POSITION DEPRECIATION
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Treasury Notes December 1997 240 Short $226,217
========
</TABLE>
At October 31, 1997, the Fund had sufficient cash and/or at least equal to the
value of the 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.
<PAGE>
<TABLE>
MFS(R) LIMITED MATURITY FUND
<S> <C>
Trustees Custodian
A. Keith Brodkin* - Chairman and President Investors Bank & Trust Company
Richard B. Bailey* - Private Investor; Former Investor Information
Chairman and Director (until 1991), For MFS stock and bond market outlooks,
Massachusetts Financial Services Company; call toll free: 1-800-637-4458 anytime
Director, Cambridge Bancorp; Director, from a touch-tone telephone.
Cambridge Trust Company
For information on MFS mutual funds, call
Peter G. Harwood - Private Investor your financial adviser or, for an information
kit, call toll free: 1-800-637-2929 any
J. Atwood Ives - Chairman and Chief Executive business day from 9 a.m. to 5 p.m. Eastern
Officer, Eastern Enterprises time (or leave a message anytime).
Lawrence T. Perera - Partner, Hemenway & Investor Service
Barnes MFS Service Center, Inc.
P.O. Box 2281
William J. Poorvu - Adjunct Professor, Boston, MA 02107-9906
Harvard University Graduate School of
Business Administration For general information, call toll free:
1-800-225-2606 any business day from
Charles W. Schmidt - Private Investor 8 a.m. to 8 p.m. Eastern time.
Arnold D. Scott* - Senior Executive Vice For service to speech- or hearing-impaired,
President, Director and Secretary, call toll free: 1-800-637-6576 any business
Massachusetts Financial Services Company day from 9 a.m. to 5 p.m. Eastern time. (To
use this service, your phone must be equipped
Jeffrey L. Shames* - President and Director, with a Telecommunications Device for the
Massachusetts Financial Services Company Deaf.)
Elaine R. Smith - Independent Consultant For share prices, account balances, and
exchanges, call toll free: 1-800-MFS-TALK
David B. Stone - Chairman, North American (1-800-637-8255) anytime from a
Management Corp. (investment advisers) touch-tone telephone.
Investment Adviser World Wide Web
Massachusetts Financial Services Company www.mfs.com
500 Boylston Street
Boston, MA 02116-3741
[Dalbar Logo] For the fourth year in a
Distributor row, MFS earned a #1
MFS Fund Distributors, Inc. ranking in the DALBAR, Inc. Broker/Dealer
500 Boylston Street Survey, Main Office Operations Service
Boston, MA 02116-3741 Quality Category. The firm achieved a 3.42
overall score on a scale of 1 to 4 in the
Portfolio Manager 1997 survey. A total of 111 firms responded,
Geoffrey L. Kurinsky* offering input on the quality of service they
received from 29 mutual fund companies
Treasurer nationwide. The survey contained questions
W. Thomas London* about service quality in 11 categories,
including "knowledge of operations contact,"
Assistant Treasurers "keeping you informed," and "ease of doing
Mark E. Bradley* business" with the firm.
Ellen Moynihan*
James O. Yost*
Secretary
Stephen E. Cavan*
Assistant Secretary
James R. Bordewick, Jr.*
*Affiliated with the Investment Adviser
</TABLE>
<PAGE>
-------------
MFS(R) LIMITED MATURITY FUND BULK RATE
U.S. POSTAGE
PAID
MFS
-------------
500 Boylston Street
Boston, MA 02116-3741
[LOGO] M F S(SM)
INVESTMENT MANAGEMENT
We invented the mutual fund(SM)
[DALBAR
LOGO]
TOP-RATED SERVICE
(c)1997 MFS Fund Distributors, Inc.,
500 Boylston Street, Boston, MA 02116-3741
MLM-3 12/97 20M 36/236/336/836
