<PAGE>
LOGO M F S(R) SEMIANNUAL REPORT
INVESTMENT MANAGEMENT OCTOBER 31, 2000
We invested the mutual fund(R)
MFS(R) Emerging Opportunities Fund
(formerly MFS(R) Mid Cap Value Fund)
MFS(R) High Quality Bond fund
MFS(R) Large Cap Value Fund
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
MFS(R) EMERGING OPPORTUNITIES FUND
MFS(R) HIGH QUALITY BOND FUND
MFS(R) LARGE CAP VALUE FUND
TRUSTEES SECRETARY
J. Atwood Ives+ -- Chairman and Chief Stephen E. Cavan*
Executive Officer, Eastern Enterprises
(diversified services company) ASSISTANT SECRETARY
James R. Bordewick, Jr.*
Lawrence T. Perera+ -- Partner, Hemenway
& Barnes (attorneys) CUSTODIAN
State Street Bank and Trust Company
William J. Poorvu+ -- Adjunct Professor,
Harvard University Graduate School of INVESTOR INFORMATION
Business Administration For information on MFS mutual funds, call your
investment professional or, for an information kit
Charles W. Schmidt+ -- Private Investor call toll free: 1-800-637-2929 any business day from
Arnold D. Scott* -- Senior Executive Vice 9 a.m. to 5 p.m. Eastern time (or leave a
President, Director, and Secretary, message anytime).
MFS Investment Management
INVESTOR SERVICE
Jeffrey L. Shames* -- Chairman and Chief MFS Service Center, Inc.
Executive Officer, MFS Investment Management P.O. Box 2281
Boston, MA 02107-9906
Elaine R. Smith+ -- Independent Consultant
For general information, call toll free:
David B. Stone+ -- Chairman, North 1-800-225-2606 any business day from 8 a.m. to
American Management Corp. (investment adviser) 8 p.m. Eastern time.
INVESTMENT ADVISER For service to speech- or hearing-impaired,
Massachusetts Financial Services Company call toll free: 1-800-637-6576 any business day from
500 Boylston Street 9 a.m. to 5 p.m. Eastern time. (To use this
Boston, MA 02116-3741 service, your phone must be equipped with a
Telecommunications Device for the Deaf.)
DISTRIBUTOR
MFS Fund Distributors, Inc. For share prices, account balances, exchanges,
500 Boylston Street or stock and bond outlooks, call toll free:
Boston, MA 02116-3741 1-800-MFS-TALK (1-800-637-8255) anytime
from a touch-tone telephone.
CHAIRMAN AND PRESIDENT
Jeffrey L. Shames* WORLD WIDE WEB
www.mfs.com
DIRECTOR OF DOMESTIC EQUITY RESEARCH
John D. Laupheimer, Jr.*
PORTFOLIO MANAGERS
David M. Calabro*
Peter C. Vaream*
TREASURER
James O. Yost*
ASSISTANT TREASURERS
Mark E. Bradley*
Robert R. Flaherty*
Laura F. Healy*
Ellen Moynihan*
+Independent Trustee
*MFS Investment Management
</TABLE>
<PAGE>
LETTER FROM THE CHAIRMAN
Dear Shareholders,
If you've been reading our fund reports for any length of time, you've
probably sensed the pride we have in our research process. More than anything
else, we think MFS Original Research(R) -- and the performance results it has
yielded for shareholders -- makes us unique among investment management
companies. We think that uniqueness stems from three factors: philosophy,
process, and people.
PHILOSOPHY
In over 75 years of managing mutual funds, we've developed a number of beliefs
about the best ways to invest over a variety of market conditions. First, we
believe in bottom-up research, which means we use a company-by-company, one-
security-at-a-time approach to building a portfolio. What we look for is the
truth about the fundamentals of a company's business -- things such as the
ability of management to execute its business plan, the ability of that plan to
be scaled up as the company grows, actual demand for the company's products and
services, cash flow, profits, and earnings.
Second, we believe that, over the long term, stock prices follow earnings. In
our view, stock prices are basically a multiple of projected earnings, with
the multiple increasing as the market perceives that a company has something
customers want and will continue to want. One of the major elements of
Original Research(SM) is doing our best to project a company's future earnings
and determine how much the market will pay for those earnings.
Third, we believe there are at least three ways to potentially achieve
competitive long-term performance: be early, uncover second chances, and avoid
mistakes. All of these are based on bottom-up research. In both domestic and
international markets, early discovery has historically been a hallmark of our
investment style. Some of the stocks with which MFS has been most successful
are those in which we've taken large positions before the market discovered or
believed in them. Similarly, some of our best fixed-income investments have
been early positions in companies or governments that our research revealed
were potential candidates for credit upgrades. (A credit upgrade causes the
value of a bond to rise because it indicates the market has increased
confidence that principal and interest on the bond will be repaid.)
"Second-chance" opportunities are companies whose stock prices have stumbled
but that we believe still have the potential to be market leaders. For
example, a quarterly earnings shortfall of a few cents may cause the market to
temporarily lose confidence in a company. If we believe the business remains
fundamentally strong, we may use the price decline as a buying opportunity.
Avoiding mistakes is another way we feel Original Research may help
performance. In fixed-income investing this means, among other things, trying
to be better than our peers at avoiding bond issuers that may default. In
equity investing, avoiding mistakes means we strive to know a company and its
industry well enough to distinguish truth from hype.
PROCESS
We acquire our information firsthand, by researching thousands of companies to
determine which firms may make good investments. Our analysis of an individual
company may include
o face-to-face contact with senior management as well as frontline workers
o analysis of the company's financial statements and balance sheets
o contact with the company's current and potential customers
o contact with the company's competitors
o our own forecasts of the company's future market share, cash flow, and
earnings
Our analysts and portfolio managers disseminate this information in the form
of daily notes e-mailed worldwide to all members of our investment team. This
ensures that our best ideas are shared throughout the company, without
barriers between equity and fixed-income, international and domestic, or value
and growth investment areas. We believe this allows each of our portfolio
managers -- and thus each of our investors -- to potentially benefit from any
relevant item of Original Research.
John Ballen, our President and Chief Investment Officer, has often said that
the thought he hopes managers will have when they read the daily notes is, "I
could never perform as well at any other investment company, because nowhere
else could the quality of the research be this good."
PEOPLE
Our team of research analysts and portfolio managers traces its roots back to
1932, when we created one of the first in-house research departments in the
industry. Today, we believe we have an investment team distinguished for its
unique blend of talent, continuity, and cohesiveness.
MFS' team culture and commitment to quality research have proven to be of
tremendous value in attracting some of the best and brightest talent from
leading business schools and from other investment management companies. Our
company culture was a key factor in our recognition by Fortune magazine in its
January 10, 2000, issue as one of the "100 Best Companies to Work For" in
America. As befits a great team, our people have tended to stick around -- the
average MFS tenure of our portfolio managers is 11 years, with over 16 years
in the investment industry. Contributing to this continuity is our policy that
all equity portfolio managers are promoted from within, after distinguishing
themselves first as research analysts. And because many of us who are now
managing funds or managing the company itself have been working together for
well over a decade, we have a cohesiveness, a shared philosophy of investing,
and a unity of purpose that we believe bodes well for the future of the
company.
We also have scale. Our research analyst team is over 55 members strong and
growing. Each analyst is our in-house expert on a specific industry or group
of industries in a specific region of the globe. In pursuing their research,
our analysts and portfolio managers each year will visit more than 2,000
companies throughout the world, meet with representatives from more than 3,000
companies at one of our four worldwide offices, attend roughly 5,000 company
presentations sponsored by major Wall Street firms, and consult with over
1,000 analysts from hundreds of U.S. and foreign brokerage houses.
All of this culminates in our analysts making buy and sell recommendations on
a wide range of potential investments for all of our portfolios. In the end,
the goal of Original Research is to try to give our portfolio managers an
advantage over their peers -- to enable our managers to deliver competitive
performance by finding opportunities before they are generally recognized by
the market, and by avoiding mistakes whenever possible. Original Research
does, we believe, make a difference.
As always, we appreciate your confidence in MFS and welcome any questions or
comments you may have.
Respectfully,
/s/ Jeffrey Shames
Jeffrey L. Shames
Chairman and Chief Executive Officer
MFS Investment Management(R)
November 16, 2000
A prospectus containing more complete information on any MFS product,
including charges and expenses, can be obtained from your investment
professional. Please read it carefully before you invest or send money.
Investments in mutual funds will fluctuate and may be worth more or less upon
redemption.
The opinions expressed in this letter are those of Jeffrey L. Shames, and no
forecasts can be guaranteed.
<PAGE>
MANAGEMENT REVIEW AND OUTLOOK
MFS Emerging Opportunities Fund
Dear Shareholders,
The fund invests in the best ideas of our equity research committee, drawing
upon the stock and industry selection capabilities of our entire equity
research department. The resulting portfolio represents what our committee
believes to be the best selections for capital growth across the entire
spectrum of publicly traded small- and mid-cap stocks. In addition, it is our
intention to maintain a highly concentrated portfolio composed of 30 to 40 of
our analysts' best investment ideas.
We focus on companies that we believe are at the forefront of innovation and
are capitalizing on their competitive advantages. We also seek companies that
we believe are reasonably valued or undervalued relative to their prospective
growth outlooks.
Despite the difficult environment for technology stocks, a few key holdings,
such as Computer Network Technology, which manufactures networking hardware and
software products; Cable Design Networks, which manufactures a wide range of
networking and electrical components; and Internet Security Systems, a producer
of security management solutions for the Internet, produced positive results for
the portfolio.
In general, we remain bullish on the long-term growth prospects for our
holdings across a broad range of high-tech companies supporting the Internet,
computer software manufacturers, and networking stocks because this is where
we see strong sales and earnings growth. As a result, technology remained the
largest sector at approximately 38% of the portfolio's assets at the end of
the period.
While technology stocks struggled during the period, holdings in oil services,
energy exploration and production, and insurance companies contributed
favorably to fund performance.
Given the weakness we've seen in the market over the past few months, it's not
hard to imagine that investor confidence may remain weak in the near term.
However, looking beyond investor sentiment, we see earnings growth remaining
strong in a broad range of industries and for a large number of stocks. In
addition, stock valuations have been slashed for many companies that we
believe posses positive business outlooks. As a result, our focus remains to
try to find those companies that we believe exhibit the best chances of
exceeding their earnings forecasts.
Respectfully,
/s/ John D. Laupheimer, Jr.
John D. Laupheimer, Jr.
Director of Domestic Equity Research
The committee of MFS research analysts is responsible for the day-to-day
management of the fund under the general supervision of Mr. Laupheimer.
Note to Shareholders: Effective September 1, 2000, the fund changed its name
to MFS(R) Emerging Opportunities Fund.
Investments in foreign and emerging market securities may be unfavorably
affected by interest-rate and currency-exchange-rate changes, as well as
market, economic, and political conditions of the countries where investments
are made. There may be greater returns but also greater risk than with U.S.
investments. These risks may increase share price volatility. See the
prospectus for details.
Investing in small companies is riskier than investing in more-established
companies. These risks may increase share price volatility. See the prospectus
for details.
The portfolio may participate in the initial public offering ("IPO") market,
and a significant portion of the portfolio's returns may be attributable to
investment in IPOs, which may have greater impact on performance of a
portfolio while its asset base is small. There is no guarantee the portfolio
will experience similar performance by investment in IPOs as its assets grow.
These risks may increase share price volatility. See the prospectus for
details.
The portfolio will suffer a loss if it sells a security short and the value of
that security rises. Because a portfolio must purchase the security it
borrowed in a short sale at prevailing market rates, the potential loss is
limited only by the purchase price of the security. These risks may increase
share price volatility. See the prospectus for details.
<PAGE>
MFS High Quality Bond Fund
Dear Shareholders,
For the six months ended October 31, 2000, Class A shares of the fund provided
a total return of 5.34% and Class I shares 5.05%. These results include the
reinvestment of any distributions but exclude the effects of any sales charges
and compare over the same period to a 5.80% return for the fund's benchmark,
the Lehman Brothers Aggregate Bond Index (the Lehman Index), an unmanaged,
market-value-weighted index that includes a broad range of U.S. Treasury,
government agency, mortgage-backed securities, and investment-grade debt
obligations of U.S. corporations. Over the same period, the average corporate
debt "A"-rated fund tracked by Lipper Inc., an independent firm that reports
mutual fund performance, returned 4.70%.
The fund seeks to provide high current income that is consistent with prudent
risk and under normal market conditions invests at least 65% of its total
assets in fixed-income securities, including high-quality corporate bonds,
mortgage- and asset-backed securities, and U.S. government securities. To
select fixed-income investments, our portfolio managers and research analysts
periodically assess the total return outlook for the fixed-income markets.
This "horizon" outlook is a tool used to fine-tune the fund's asset
allocations to various segments of the fixed-income markets. In addition, our
investment staff does its own bottom-up research and independent credit
analysis, and evaluates the results of credit-rating agencies.
During the period, we increased the fund's exposure to U.S. Federal agency
securities and mortgage-backed securities. This has been a source of positive
performance as uncertainty regarding the implicit government backing of the
Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan
Mortgage Corp. (Freddie Mac) has been alleviated with the passage of a recent
financial restructuring bill in Congress. As a result, prices of agency
securities snapped back during a short period of time.
The fund's holdings in mortgage-backed securities were increased at the end of
the period. As volatility in the mortgage-backed market has calmed down,
investors have started to return to the market, which has bolstered total
return. Additionally, uncertainty surrounding Fannie Mae and Freddie Mac in
the early part of the period led investors to the mortgage-backed market as an
attractive alternative to agencies.
We increased the fund's Treasury allocation to approximately 16% at the end of
the period, from 11% at the end of April 2000. Given the flight to quality
that the market has recently seen, this increase also proved beneficial to the
fund's results.
Our exposure to high-grade corporate issues remained lower than the Lehman
Index weighting. This decision also aided performance as corporate bonds
underperformed most sectors of the bond market during the period. Despite the
sector's lackluster performance, a number of our corporate bond holdings
performed well for the fund. For example, our holdings in Seagram Company Ltd.
appreciated significantly following Vivendi's offer to buy Seagram. The
holding received an additional boost following Seagram's cash tender offer to
buy the firm's outstanding debt. Other corporate issues that contributed
favorably were those of banks and financial institutions, such as Morgan
Stanley and Wells Fargo. Energy and entertainment/media issues were other key
allocations in the portfolio that produced strong results.
We think continued volatility in the equity market and the significant
improvement in the performance of fixed-income securities will continue to
bode well for the bond market. In addition, we believe the Federal Reserve
Board will remain on hold, and the economy will continue to moderate, which
could also result in further yield declines and, therefore, price
appreciation.
Respectfully,
/s/ Peter C. Vaream
Peter C. Vaream
Portfolio Manager
<PAGE>
MFS Large Cap Value Fund
Dear Shareholders,
For the six months ended October 31, 2000, Class A shares of the fund provided
a total return of 13.88% and Class I shares 14.22%. These results include the
reinvestment of any distributions but exclude the effects of any sales charges
and compare over the same period to a 6.57% return for the fund's benchmark,
the Russell 1000 Value Index (the Russell Index), which measures the
performance of those Russell 1000 companies with lower price-to-book ratios
and lower forecasted growth rates relative to the companies in the Russell
1000 Growth Index. Over the same period, the average large-cap value
fund tracked by Lipper Inc., an independent firm that reports mutual fund
performance, returned 3.41%.
The fund seeks long-term growth of capital. Under normal market conditions, it
invests at least 65% of its total assets in common stocks and related
securities of companies with large market capitalizations that we believe are
undervalued relative to their long-term growth potential. The equity
securities of these companies may be undervalued based on their low price-to-
book, price-to-sales, and price-to-earnings ratios. They may be undervalued
due to a market decline, poor economic conditions, or company- or industry-
related downturns. We use a bottom-up approach that is based on fundamental
analysis to select securities.
A combination of strong stock selection and the fund's conservative investment
approach contributed to our favorable performance during the period. In an
extremely weak and volatile market environment, our focus on stocks selling at
valuations generally lower than the overall market aided performance. This
strategy also led us to overweight the portfolio relative to the Russell Index
in insurance providers, energy stocks, health care companies, and industrial
goods and services stocks. In general, our stock selection in these sectors
contributed positively to fund performance, as did our decision to avoid the
poorly performing technology sector, which we viewed as expensive early in the
period.
In the financial services sector, we continued to focus on the multi-line
insurance companies, one of the strongest performing industries during the
period. Among this group, significant holdings in companies such as St. Paul
Companies, AXA Financial, and Hartford Insurance produced double-digit returns
for the fund. Other major holdings that contributed positively to total return
were Boeing, Abbot Laboratories, Duke Energy, and PNC Financial. Each of these
companies benefited from accelerating earnings growth and improving business
fundamentals.
The near-term outlook for the stock market depends on a vast number of
variables. Given the high level of uncertainty regarding the economy, interest
rates, corporate earnings, the presidential election, and oil prices, we'll
continue to focus on the factors that have historically driven stock prices
over the long-term -- business fundamentals and earnings growth. We believe
that our value-oriented, bottom-up approach of choosing stocks that possess
promising business prospects and strong earnings growth could produce
favorable results over the long run.
Respectfully,
/s/ David M. Calabro
David M. Calabro
Portfolio Manager
The opinions expressed in this report are those of the Director of Domestic
Equity Research and the portfolio managers and are current only through the
end of the period of the report as stated on the cover. Their views are
subject to change at any time based on market and other conditions, and no
forecasts can be guaranteed.
It is not possible to invest directly in an index.
The portfolios are actively managed, and current holdings may be different.
<PAGE>
PERFORMANCE SUMMARY
Currently, each fund offers only Class A and Class I shares, which are
available for purchase at net asset value only by residents of the
Commonwealth of Massachusetts who are employees (or certain relatives of
employees) of MFS and its affiliates or members of the governing boards of the
various funds sponsored by MFS.
Because mutual funds are designed for investors with long-term goals, we have
provided cumulative results as well as the average annual total returns for
the applicable time periods. Investment results include the maximum applicable
sales charge and reflect the percentage change in net asset value, including
the reinvestment of dividends. (See Notes to Performance Summary.)
TOTAL RATES OF RETURN THROUGH OCTOBER 31, 2000
MFS(R) HIGH QUALITY BOND FUND(1)(3)
<TABLE>
<CAPTION>
CLASS A
6 Months 1 Year Life*
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cumulative Total Return Excluding Sales Charge +5.34% + 7.17% + 7.82%
---------------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return Excluding Sales Charge -- + 7.17% + 5.16%
---------------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return Including Sales Charge -- + 2.08% + 1.80%
---------------------------------------------------------------------------------------------------------------------------------
CLASS I
6 Months 1 Year Life*
---------------------------------------------------------------------------------------------------------------------------------
Cumulative Total Return Excluding Sales Charge +5.05% + 6.44% + 6.96%
---------------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return Excluding Sales Charge -- + 6.44% + 4.62%
---------------------------------------------------------------------------------------------------------------------------------
*For the period from the commencement of the fund's investment operations, May
3, 1999, through October 31, 2000.
MFS(R) LARGE CAP VALUE FUND(2)(4)
CLASS A
6 Months 1 Year Life*
---------------------------------------------------------------------------------------------------------------------------------
Cumulative Total Return Excluding Sales Charge +13.88% +18.53% +23.15%
---------------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return Excluding Sales Charge -- +18.53% +14.97%
---------------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return Including Sales Charge -- +11.71% +10.50%
---------------------------------------------------------------------------------------------------------------------------------
CLASS I
6 Months 1 Year Life*
---------------------------------------------------------------------------------------------------------------------------------
Cumulative Total Return Excluding Sales Charge +14.22% +19.09% +24.10%
---------------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return Excluding Sales Charge -- +19.09% +15.59%
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*For the period from the commencement of the fund's investment operations, May
4, 1999, through October 31, 2000.
<PAGE>
NOTES TO PERFORMANCE SUMMARY
Performance results reflect any applicable subsidies and waivers; without
these, the results would have been less favorable. See the prospectus for
details. All results are historical and include 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. MORE RECENT
RETURNS MAY BE MORE OR LESS THAN THOSE SHOWN. PAST PERFORMANCE IS NO GUARANTEE
OF FUTURE RESULTS.
(1) Investments in foreign securities may be unfavorably affected by interest-
rate and currency-exchange-rate changes as well as by market, economic,
and political conditions of the countries where investments are made.
There may be greater returns but also greater risk than with U.S.
investments. These risks may increase share price volatility. See the
prospectus for details.
(2) Investments in foreign and emerging market securities may be unfavorably
affected by interest-rate and currency-exchange-rate changes, as well as
market, economic, and political conditions of the countries where
investments are made. There may be greater returns but also greater risk
than with U.S. investments. These risks may increase share price
volatility. See the prospectus for details.
(3) The portfolio may invest in mortgage-backed securities, which are subject
to prepayments as homeowners pay their mortgages early by refinancing them
at lower rates. Therefore, the value of securities may not increase as
much as that of other fixed-income securities during periods of falling
rates. These risks may increase share price volatility. See the prospectus
for details.
(4) The portfolio may participate in the initial public offering ("IPO")
market, and a significant portion of the portfolio's returns may be
attributable to investment in IPOs, which may have greater impact on
performance of a portfolio while its asset base is small. There is no
guarantee the portfolio will experience similar performance by investment
in IPOs as its assets grow. These risks may increase share price
volatility. See the prospectus for details.
<PAGE>
MFS EMERGING OPPORTUNITIES FUND
<TABLE>
<CAPTION>
Stocks - 97.4%
--------------------------------------------------------------------------------------------------
ISSUER SHARES VALUE
--------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. Stocks - 91.7%
Business Services - 20.0%
BISYS Group, Inc.* 1,620 $ 76,342
CheckFree Corp.* 1,340 66,665
eLoyalty Corp.* 3,380 32,533
Information Holdings, Inc.* 900 23,456
Teletech Holdings, Inc.* 1,460 40,515
VeriSign, Inc.* 500 66,000
----------
$ 305,511
--------------------------------------------------------------------------------------------------
Computer Software - Systems - 20.9%
Akamai Technologies, Inc.* 1,250 $ 63,750
Internap Network Services Corp.* 3,750 60,000
Internet Security Systems, Inc.* 600 52,950
Lightspan, Inc.* 18,100 41,856
Radiant Systems, Inc.* 2,330 42,960
RSA Security, Inc.* 1,000 58,000
----------
$ 319,516
--------------------------------------------------------------------------------------------------
Containers - 3.0%
Ivex Packaging Corp.* 4,660 $ 45,726
--------------------------------------------------------------------------------------------------
Electrical Equipment - 6.4%
Cable Design Technologies Corp.* 2,000 $ 46,125
W.W. Grainger, Inc. 1,600 51,100
----------
$ 97,225
--------------------------------------------------------------------------------------------------
Insurance - 5.0%
Nationwide Financial Services, Inc., "A" 1,570 $ 76,341
--------------------------------------------------------------------------------------------------
Medical and Health Technology and Services - 2.9%
Hooper Holmes Inc. 4,700 $ 44,603
--------------------------------------------------------------------------------------------------
Oil Services - 6.6%
Santa Fe International Corp. 1,475 $ 53,838
Weatherford International, Inc.* 1,300 47,450
----------
$ 101,288
--------------------------------------------------------------------------------------------------
Oils - 6.2%
EOG Resources, Inc. 1,210 $ 47,644
Newfield Exploration Co.* 1,250 47,187
----------
$ 94,831
--------------------------------------------------------------------------------------------------
Retail - 2.7%
BJ's Wholesale Club, Inc.* 1,250 $ 41,172
--------------------------------------------------------------------------------------------------
Telecommunications - 4.0%
Time Warner Telecom, Inc.* 1,010 $ 60,221
--------------------------------------------------------------------------------------------------
Telecom - Wire Less - 14.0%
Cabletron Systems, Inc.* 2,110 $ 57,234
Computer Network Technology Corp.* 2,600 79,016
Digex, Inc.* 950 37,287
Pinnacle Holdings, Inc.* 2,500 39,375
----------
$ 212,912
--------------------------------------------------------------------------------------------------
Total U.S. Stocks $ 399,346
--------------------------------------------------------------------------------------------------
Foreign Stocks - 5.7%
Bermuda - 2.3%
FLAG Telecom Holdings Ltd. (Telecommunications-Wireless)* 3,000 $ 34,875
--------------------------------------------------------------------------------------------------
Norway - 3.4%
Smedvig (Oil Services) 5,580 $ 52,346
--------------------------------------------------------------------------------------------------
Total Foreign Stocks $ 87,221
--------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $1,513,746) $1,486,567
Other Assets, Less Liabilities - 2.6% 39,941
--------------------------------------------------------------------------------------------------
Net Assets - 100.0% $1,526,508
--------------------------------------------------------------------------------------------------
See portfolio footnotes and notes to financial statements.
<PAGE>
PORTFOLIO OF INVESTMENTS (Unaudited) -- October 31, 2000
MFS HIGH QUALITY BOND
Bonds - 95.9%
---------------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT
ISSUER (000 OMITTED) VALUE
---------------------------------------------------------------------------------------------------
U.S. Bonds - 88.2%
Banks and Credit Companies - 1.5%
FleetBoston Financial Corp., 7.25s, 2005 $ 6 $ 6,032
Wells Fargo and Co., 7.2s, 2003 14 14,096
-----------
$ 20,128
---------------------------------------------------------------------------------------------------
Chemicals - 0.5%
Lyondell Chemical Co., 9.625s, 2007 $ 7 $ 6,790
---------------------------------------------------------------------------------------------------
Computer Software - Services - 0.7%
First Data Corp., 6.75s, 2005 $ 9 $ 8,851
---------------------------------------------------------------------------------------------------
Container, Forest and Paper Products - 0.9%
Gaylord Container Corp., 9.875s, 2008 $ 10 $ 3,000
Riverwood International Corp., 10.25s, 2006 10 9,775
-----------
$ 12,775
---------------------------------------------------------------------------------------------------
Corporate Asset Backed - 4.9%
Chase Commercial Mortgage Securities Corp., 7.543s
2009 $ 10 $ 9,896
GS Mortgage Securities Corp. II, 6.06s, 2030 25 24,677
Morgan (JP) Commercial Mortgage Finance Corp., 6.613s,
2030 8 7,767
Morgan Stanley Group, Inc., 6.01s, 2030 11 10,937
Residential Funding Mortgage Securities, Inc., 7.66s,
2012 12 12,121
-----------
$ 65,398
---------------------------------------------------------------------------------------------------
Energy - 3.8%
Apache Finance Ltd., 7s, 2009 $ 18 $ 17,429
P&L Coal Holdings Corp., 9.625s, 2008 10 9,725
Phillips Petroleum Co., 8.75s, 2010 13 14,178
Pioneer Natural Resources Co., 9.625s, 2010 10 10,550
-----------
$ 51,882
---------------------------------------------------------------------------------------------------
Entertainment - 3.4%
News America Holdings, Inc., 6.625s, 2008 $ 3 $ 2,776
News America Holdings, Inc., 7.3s, 2028 14 11,880
Seagram (Joseph E) & Sons, Inc., 5.79s, 2001 10 9,915
Seagram (Joseph E) & Sons, Inc., 7.5s, 2018 7 7,507
Time Warner Entertainment Co. LP, 8.375s, 2033 13 13,535
-----------
$ 45,613
---------------------------------------------------------------------------------------------------
Financial Institutions - 1.9%
Ford Motor Credit Co., 7.875s, 2010 $ 13 $ 13,036
General Motors Acceptance Corp., 7.5s, 2005 12 12,108
-----------
$ 25,144
---------------------------------------------------------------------------------------------------
Financial Services - 2.7%
Citigroup, Inc., 7.25s, 2010 $ 11 $ 10,930
Morgan Stanley Group, Inc., 8s, 2010 24 24,833
-----------
$ 35,763
---------------------------------------------------------------------------------------------------
Media - 1.3%
Chancellor Media Corp., 8.125s, 2007 $ 10 $ 10,075
CSC Holdings Inc., 8.125s, 2009 8 7,691
-----------
$ 17,766
---------------------------------------------------------------------------------------------------
Medical and Health Technology and Services - 0.7%
HCA-The Health Co., 8.75s, 2010 $ 5 $ 5,063
Tenet Healthcare Corp., 8s, 2005 5 4,931
-----------
$ 9,994
---------------------------------------------------------------------------------------------------
Railroads - 0.7%
Union Pacific Corp., 6.34s, 2003 $ 10 $ 9,729
---------------------------------------------------------------------------------------------------
Restaurants and Lodging - 0.2%
MGM Mirage, Inc., 8.5s, 2010 $ 3 $ 2,968
---------------------------------------------------------------------------------------------------
Telecommunications - 2.5%
ITC Deltacom, Inc., 11s, 2007 $ 10 $ 8,500
Liberty Media Corp., 8.25s, 2030 5 4,509
Qwest Capital Funding, Inc., 7.75s, 2006## 7 7,126
Sprint Capital Corp., 7.625s, 2002 13 13,041
-----------
$ 33,176
---------------------------------------------------------------------------------------------------
U.S. Federal Agencies - 45.6%
Federal Home Loan Mortgage Corp., 7.375s, 2003 $ 27 $ 27,578
Federal Home Loan Mortgage Corp., 5s, 2004 145 138,725
Federal National Mortgage Assn., 7.25s, 2010 115 119,204
Government National Mortgage Assn., 7.5s, 2030 147 148,057
Government National Mortgage Assn., 8s, 2030 176 179,469
-----------
$ 613,033
---------------------------------------------------------------------------------------------------
U.S. Treasury Obligations - 15.8%
U.S. Treasury Bonds, 6.125s, 2029 $ 51 $ 52,817
U.S. Treasury Bonds, 6.25s, 2030 58 61,770
U.S. Treasury Notes, 5.5s, 2000 62 61,855
U.S. Treasury Notes, 6.5s, 2005 18 18,478
U.S. Treasury Notes, 5.75s, 2010 18 17,983
-----------
$ 212,903
---------------------------------------------------------------------------------------------------
Utilities - Electric - 0.9%
Niagara Mohawk Power Corp., 7.75s, 2006 $ 12 $ 12,256
---------------------------------------------------------------------------------------------------
Utilities - Gas - 0.2%
Enron Corp., 7.875s, 2003 $ 3 $ 3,060
---------------------------------------------------------------------------------------------------
Total U.S. Bonds $1,187,229
---------------------------------------------------------------------------------------------------
Foreign Bonds - 7.7%
Canada - 1.9%
Alberta Energy Ltd., 8.125s, 2030 (Energy) $ 3 $ 3,019
AT&T Canada, Inc., 0s to 2003, 9.95s to 2008
(Telecommunications) 9 7,202
Government of Canada, 5.25s, 2008 5 4,556
Province of Quebec, 7.5s, 2029 10 10,138
-----------
$ 24,915
---------------------------------------------------------------------------------------------------
France - 2.1%
Natexis AMBS Co. LLC, 8.44s, 2049 (Banks and Credit
Cos.)## $ 16 $ 15,287
Socgen Real Estate Co., 7.64s, 2049 (Banks and Credit
Cos.)## 14 13,092
-----------
$ 28,379
---------------------------------------------------------------------------------------------------
Mexico - 1.5%
Pemex Project, 9.125s, 2010 (Energy)## $ 3 $ 2,918
United Mexican States, 9.875s, 2010 15 15,562
United Mexican States, 11.375s, 2016 2 2,256
-----------
$ 20,736
---------------------------------------------------------------------------------------------------
Panama - 0.3%
Republic of Panama, 10.75s, 2020 $ 4 $ 3,892
---------------------------------------------------------------------------------------------------
Spain - 0.3%
Telefonica Europe BV, 7.35s, 2005 (Telecommunications) $ 4 $ 4,005
---------------------------------------------------------------------------------------------------
United Kingdom - 1.6%
British Sky Broadcasting, 6.875s, 2009
(Telecommunications) $ 15 $ 12,796
Telewest Communications PLC, 9.625s, 2006 (Cable
Television) 10 8,300
-----------
$ 21,096
---------------------------------------------------------------------------------------------------
Total Foreign Bonds $ 103,023
---------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $1,286,036) $ 1,290,252
Other Assets, Less Liabilities - 4.1% 55,260
---------------------------------------------------------------------------------------------------
Net Assets - 100.0% $ 1,345,512
---------------------------------------------------------------------------------------------------
See portfolio footnotes and notes to financial statements.
<PAGE>
PORTFOLIO OF INVESTMENTS (Unaudited) -- October 31, 2000
MFS LARGE CAP VALUE
Stocks - 89.4%
---------------------------------------------------------------------------------------------------
ISSUER SHARES VALUE
---------------------------------------------------------------------------------------------------
U.S. Stocks - 79.0%
Aerospace - 5.3%
Boeing Co. 115 $ 7,798
General Dynamics Corp. 60 4,294
Honeywell International, Inc. 91 4,897
TRW, Inc. 70 2,940
United Technologies Corp. 110 7,679
-----------
$ 27,608
---------------------------------------------------------------------------------------------------
Automotive - 0.8%
Delphi Automotive Systems Corp. 195 $ 3,059
Ford Motor Co.* 42 1,097
-----------
$ 4,156
---------------------------------------------------------------------------------------------------
Banks and Credit Companies - 3.8%
Bank America Corp. 93 $ 4,470
Bank of New York Co., Inc. 20 1,151
Chase Manhattan Corp. 95 4,322
PNC Financial Services Group 145 9,697
-----------
$ 19,640
---------------------------------------------------------------------------------------------------
Biotechnology - 2.8%
Abbott Laboratories, Inc. 136 $ 7,182
Pharmacia Corp. 136 7,480
-----------
$ 14,662
---------------------------------------------------------------------------------------------------
Business Machines - 1.2%
International Business Machines Corp. 35 $ 3,447
Texas Instruments, Inc. 60 2,944
-----------
$ 6,391
---------------------------------------------------------------------------------------------------
Business Services - 0.5%
Automatic Data Processing, Inc. 40 $ 2,613
---------------------------------------------------------------------------------------------------
Cellular Telephones - 0.9%
Motorola, Inc. 50 $ 1,247
Telephone & Data Systems, Inc. 34 3,587
-----------
$ 4,834
---------------------------------------------------------------------------------------------------
Chemicals - 1.4%
Air Products & Chemicals, Inc. 27 $ 1,008
Rohm & Haas Co. 213 6,403
-----------
$ 7,411
---------------------------------------------------------------------------------------------------
Computer Hardware - Systems - 0.6%
Compaq Computer Corp. 95 $ 2,889
---------------------------------------------------------------------------------------------------
Computer Software - Personal Computers - 0.8%
Microsoft Corp.* 60 $ 4,133
---------------------------------------------------------------------------------------------------
Consumer Goods and Services - 0.6%
Fortune Brands, Inc. 102 $ 3,003
---------------------------------------------------------------------------------------------------
Containers - 1.1%
Ivex Packaging Corp.* 600 $ 5,888
---------------------------------------------------------------------------------------------------
Electrical Equipment - 0.2%
Emerson Electric Co. 15 $ 1,102
---------------------------------------------------------------------------------------------------
Energy - 0.9%
Devon Energy Corp. 90 $ 4,536
---------------------------------------------------------------------------------------------------
Entertainment - 2.3%
Harrah's Entertainment, Inc.* 205 $ 5,868
Time Warner, Inc. 27 2,049
Viacom, Inc., "B"* 75 4,266
-----------
$ 12,183
---------------------------------------------------------------------------------------------------
Financial Institutions - 2.8%
Citigroup, Inc. 86 $ 4,526
Freddie Mac Corp. 147 8,820
Merrill Lynch & Co., Inc. 16 1,120
-----------
$ 14,466
---------------------------------------------------------------------------------------------------
Financial Services - 3.7%
AXA Financial, Inc. 158 $ 8,542
Mellon Financial Corp. 218 10,518
-----------
$ 19,060
---------------------------------------------------------------------------------------------------
Food and Beverage Products - 1.9%
Anheuser-Busch Cos., Inc. 30 $ 1,373
Archer-Daniels-Midland Co. 160 1,760
General Mills, Inc. 54 2,254
McCormick & Co., Inc. 24 761
Quaker Oats Co. 45 3,670
-----------
$ 9,818
---------------------------------------------------------------------------------------------------
Healthcare - 1.1%
HCA Healthcare Co.* 140 $ 5,591
---------------------------------------------------------------------------------------------------
Insurance - 8.8%
Allstate Corp. 43 $ 1,731
Chubb Corp. 60 5,066
CIGNA Corp. 22 2,683
Hartford Financial Services Group, Inc. 144 10,719
Lincoln National Corp. 120 5,805
Marsh & McLennan Cos., Inc. 42 5,491
MetLife, Inc.* 60 1,658
St. Paul Cos., Inc. 245 12,556
-----------
$ 45,709
---------------------------------------------------------------------------------------------------
Machinery - 2.6%
Deere & Co., Inc. 165 $ 6,074
Ingersoll Rand Co. 95 3,586
W.W. Grainger, Inc. 125 3,992
-----------
$ 13,652
---------------------------------------------------------------------------------------------------
Medical and Health Products - 2.4%
American Home Products Corp. 155 $ 9,843
Bristol-Myers Squibb Co. 45 2,742
-----------
$ 12,585
---------------------------------------------------------------------------------------------------
Metals and Minerals - 1.9%
Alcoa, Inc. 135 $ 3,873
Phelps Dodge Corp. 125 5,844
-----------
$ 9,717
---------------------------------------------------------------------------------------------------
Oil Services - 3.1%
Cooper Cameron Corp.* 100 $ 5,450
Halliburton Co. 165 6,115
Noble Drilling Corp.* 114 4,738
-----------
$ 16,303
---------------------------------------------------------------------------------------------------
Oils - 5.2%
Apache Corp. 45 $ 2,489
Coastal Corp. 77 5,809
Conoco, Inc., "A" 100 2,581
Exxon Mobil Corp. 136 12,129
Transocean Sedco Forex, Inc. 75 3,975
-----------
$ 26,983
---------------------------------------------------------------------------------------------------
Printing and Publishing - 2.3%
Gannett Co., Inc. 115 $ 6,670
New York Times Co. 64 2,352
Tribune Co. 80 2,965
-----------
$ 11,987
---------------------------------------------------------------------------------------------------
Railroads - 0.8%
Burlington Northern Santa Fe Railway Co. 150 $ 3,984
---------------------------------------------------------------------------------------------------
Real Estate Investment Trusts - 0.8%
Equity Residential Properties Trust 90 $ 4,236
---------------------------------------------------------------------------------------------------
Supermarkets - 2.1%
Kroger Co.* 215 $ 4,851
Safeway, Inc.* 110 6,016
-----------
$ 10,867
---------------------------------------------------------------------------------------------------
Telecommunications - 6.9%
Alltel Corp. 103 $ 6,637
AT&T Corp. 103 2,388
SBC Communications, Inc. 181 10,442
Verizon Communications 286 16,534
-----------
$ 36,001
---------------------------------------------------------------------------------------------------
Telecommunications and Cable - 0.9%
Comcast Corp., "A"* 120 $ 4,890
---------------------------------------------------------------------------------------------------
Utilities - Electric - 4.9%
CP&L Energy, Inc.* 96 $ 3,870
Dominion Resources, Inc. 70 4,169
Duke Energy Corp. 60 5,186
Exelon Corp. 60 3,608
NiSource, Inc. 202 5,037
Pinnacle West Capital Corp. 89 3,866
-----------
$ 25,736
---------------------------------------------------------------------------------------------------
Utilities - Gas - 3.6%
Columbia Energy Group 21 $ 1,511
National Fuel Gas Co. 120 6,435
Washington Gas Light Co. 123 3,136
Williams Cos., Inc. 183 7,652
-----------
$ 18,734
---------------------------------------------------------------------------------------------------
Total U.S. Stocks $ 411,368
---------------------------------------------------------------------------------------------------
Foreign Stocks - 10.4%
Netherlands - 5.3%
Akzo Nobel N.V. (Chemicals) 230 $ 10,470
ING Groep N.V., ADR (Financial Services) 84 5,812
Royal Dutch Petroleum Co., ADR (Oils) 187 11,103
-----------
$ 27,385
---------------------------------------------------------------------------------------------------
Switzerland - 1.2%
Nestle S.A. (Food and Beverage Products) 3 $ 6,219
---------------------------------------------------------------------------------------------------
United Kingdom - 3.9%
BP Amoco PLC, ADR (Oils) 176 $ 8,965
Diageo PLC (Food and Beverage Products)* 675 6,370
HSBC Holdings PLC (Banks and Credit Cos.)* 343 4,886
-----------
$ 20,221
---------------------------------------------------------------------------------------------------
Total Foreign Stocks $ 53,825
---------------------------------------------------------------------------------------------------
Total Stocks (Identified Cost, $419,041) $ 465,193
---------------------------------------------------------------------------------------------------
Convertible Preferred Stocks - 1.0%
---------------------------------------------------------------------------------------------------
Containers - 0.1%
Owens-Illinois, Inc., 4.75% 40 $ 507
---------------------------------------------------------------------------------------------------
Utilities - Electric - 0.9%
NiSource, Inc., 7.75% 80 $ 3,855
TXU Corp., 9.25% 25 1,100
-----------
$ 4,955
---------------------------------------------------------------------------------------------------
Total Convertible Preferred Stocks (Identified Cost, $5,645) $ 5,462
---------------------------------------------------------------------------------------------------
Convertible Bonds - 0.7%
---------------------------------------------------------------------------------------------------
Conglomerates - 0.3%
Loews Corp., 3.125s, 2007 $ 2 $ 1,655
---------------------------------------------------------------------------------------------------
Electrical Equipment - 0.4%
American Tower Corp., 5s, 2010 $ 2 $ 1,983
---------------------------------------------------------------------------------------------------
Total Convertible Bonds (Identified Cost, $3,613) $ 3,638
---------------------------------------------------------------------------------------------------
Rights - 0.2%
---------------------------------------------------------------------------------------------------
ISSUER SHARES VALUE
---------------------------------------------------------------------------------------------------
CVS Corp. (Identified Cost, $663) 10 $ 900
---------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $428,962) $ 475,193
Other Assets, Less Liabilities - 8.7% 45,200
---------------------------------------------------------------------------------------------------
Net Assets - 100.0% $ 520,393
---------------------------------------------------------------------------------------------------
</TABLE>
See portfolio footnotes and notes to financial statements.
portfolio footnotes:
*Non-income producing security.
##SEC Rule 144A restriction.
<PAGE>
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (Unaudited)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
MFS EMERGING MFS HIGH MFS LARGE
OPPORTUNITIES QUALITY BOND CAP VALUE
OCTOBER 31, 2000 FUND FUND FUND
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets:
Investments, at value (identified cost,
$1,513,746, $1,286,036, and $428,962,
respectively) $ 1,486,567 $ 1,290,252 $ 475,193
Cash 95,425 37,382 54,962
Receivable for investments sold 44,715 4,842 3,394
Receivable for fund shares sold 400 -- --
Interest and dividends receivable -- 21,068 954
----------- ----------- -----------
Total assets $ 1,627,107 $ 1,353,544 $ 534,503
----------- ----------- -----------
Liabilities:
Payable for investments purchased $ 100,559 $ 8,032 $ 14,096
Payable to affiliates -
Management fee 30 -- 11
Reimbursement fee 10 -- 3
----------- ----------- -----------
Total liabilities $ 100,599 $ 8,032 $ 14,110
----------- ----------- -----------
Net assets $ 1,526,508 $ 1,345,512 $ 520,393
=========== =========== ===========
Net assets consist of:
Paid-in capital $ 1,462,095 $ 1,373,084 $ 437,341
Unrealized appreciation (depreciation) on
investments and translation of assets and
liabilities in foreign currencies (27,179) 4,216 46,227
Accumulated undistributed net realized gain
(loss) on investments and foreign currency
transactions 94,328 (33,447) 32,054
Accumulated undistributed net investment
income (loss) (2,736) 1,659 4,771
----------- ----------- -----------
Total $ 1,526,508 $ 1,345,512 $ 520,393
=========== =========== ===========
Shares of beneficial interest outstanding
Class A 59,551 138,206 44,679
Class I 82,338 20 20
----------- ----------- -----------
Total shares of beneficial interest
outstanding 141,889 138,226 44,699
=========== =========== ===========
Net assets:
Class A $ 640,749 $ 1,345,319 $ 520,158
Class I 885,759 193.24 235
----------- ----------- -----------
Total net assets $ 1,526,508 $ 1,345,512 $ 520,393
=========== =========== ===========
Class A shares:
Net asset value per share
(net assets / shares of beneficial interest
outstanding) $10.76 $ 9.73 $11.65
====== ====== ======
Offering price per share (100 / 94.25, 100 / 95.25 and
100 / 94.25, respectively, of net asset value per share) $11.42 $10.22 $12.36
====== ====== ======
Class I shares:
Net asset value, offering price, and redemption price per share
(net assets / shares of beneficial interest outstanding) $10.76 $ 9.66 $11.73
====== ====== ======
</TABLE>
On sales of $50,000 or more for MFS Emerging Opportunities Fund, and MFS Large
Cap Value Fund the price of Class A is reduced. A contingent deferred sales
charge may be imposed on redemptions of Class A shares.
On sales of $100,000 or more, for MFS High Quality Bond Fund the price of
Class A is reduced. A contingent deferred sales charge may be imposed on
redemptions of Class A shares.
See notes to financial statements.
<PAGE>
Statements of Operations (Unaudited)
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
MFS EMERGING MFS HIGH MFS LARGE
OPPORTUNITIES QUALITY BOND CAP VALUE
PERIOD ENDED OCTOBER 31, 2000 FUND* FUND FUND
------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net investment income (loss):
Income -
Interest $ 2,262 $ 48,073 $ 751
Dividends 924 -- 4,747
Foreign taxes withheld -- -- (106)
-------- -------- --------
Total investment income $ 3,186 $ 48,073 $ 5,392
-------- -------- --------
Expenses -
Management fee $ 4,441 $ 3,329 $ 1,844
Shareholder servicing agent fee 588 666 246
Administrative fee 103 117 41
Custodian fee 2,863 6,130 4,385
Printing 3,531 1,783 297
Postage 1 4 --
Auditing fees 2,500 1,500 3,600
Legal fees 1,121 764 395
Registration fees 2,000 1,000 2,000
Miscellaneous 498 224 7
-------- -------- --------
Total expenses $ 17,646 $ 15,517 $ 12,815
Fees paid indirectly (311) (209) (77)
Reduction of expenses by investment adviser (11,413) (15,308) (10,280)
-------- -------- --------
Net expenses $ 5,922 -- $ 2,458
-------- -------- --------
Net investment income (loss) $ (2,736) $ 48,073 $ 2,934
-------- -------- --------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $ 94,191 $ 3,071 $ 21,504
Foreign currency transactions 137 -- (14)
-------- -------- --------
Net realized gain on investments and foreign
currency transactions $ 94,328 $ 3,071 $ 21,490
-------- -------- --------
Change in unrealized appreciation (depreciation) -
Investments $(27,179) $ 17,395 $ 41,132
Translation of assets and liabilities in foreign
currencies -- -- 1
-------- -------- --------
Net unrealized gain (loss) on investments and
foreign currency translation $(27,179) $ 17,395 $ 41,133
-------- -------- --------
Net realized and unrealized gain on
investments and
foreign currency $ 67,149 $ 20,466 $ 62,623
-------- -------- --------
Increase in net assets from operations $ 64,413 $ 68,539 $ 65,557
======== ======== ========
</TABLE>
*For the period from the commencement of MFS Emerging Opportunities Fund's
investment operations,
May 2, 2000, through October 31, 2000.
See notes to financial statements.
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
PERIOD ENDED*
OCTOBER 31, 2000
MFS EMERGING OPPORTUNITIES FUND (UNAUDITED)
---------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets:
From operations -
Net investment loss $ (2,736)
Net realized gain on investments and foreign currency transactions 94,328
Net unrealized loss on investments (27,179)
-----------
Increase in net assets from operations $ 64,413
-----------
Net increase in net assets from fund share transactions $ 1,462,095
-----------
Total increase in net assets $ 1,526,508
Net assets:
At beginning of period --
-----------
At end of period (including accumulated net investment loss of $2,736) $ 1,526,508
===========
</TABLE>
*For the period from the commencement of the fund's investment operations,
May 2, 2000, through October 31, 2000.
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets - continued
--------------------------------------------------------------------------------------------------
SIX MONTHS ENDED
OCTOBER 31, 2000 PERIOD ENDED
MFS HIGH QUALITY BOND FUND (UNAUDITED) APRIL 30, 2000*
------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 48,073 $ 76,102
Net realized gain (loss) on investments 3,071 (36,454)
Net unrealized gain (loss) on investments 17,395 (13,179)
----------- -----------
Increase in net assets from operations $ 68,539 $ 26,469
----------- -----------
Distributions declared to shareholders -
From net investment income (Class A) $ (47,963) $ (74,597)
From net investment income (Class I) (7) (13)
----------- -----------
Total distributions declared to
shareholders $ (47,970) $ (74,610)
----------- -----------
Net increase in net assets from fund share
transactions $ 47,958 $ 1,325,126
----------- -----------
Total increase in net assets $ 68,527 $ 1,276,985
Net assets:
At beginning of period $ 1,276,985 --
----------- -----------
At end of period (including accumulated
undistributed net investment income of $1,659
and $1,556, respectively) $ 1,345,512 $ 1,276,985
=========== ===========
</TABLE>
*For the period from the commencement of the fund's investment operations,
May 3, 1999, through April 30, 2000.
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets - continued
---------------------------------------------------------------------------------
SIX MONTHS ENDED
OCTOBER 31, 2000 PERIOD ENDED*
MFS LARGE CAP VALUE FUND (UNAUDITED) APRIL 30, 2000
---------------------------------------------------------------------------------
<S> <C> <C>
Increase in net assets:
From operations -
Net investment income $ 2,934 $ 5,160
Net realized gain on investments and foreign
currency transactions 21,490 34,150
Net unrealized gain on investments and foreign
currency translation 41,133 5,094
--------- ---------
Increase in net assets from operations $ 65,557 $ 44,404
--------- ---------
Distributions declared to shareholders -
From net investment income (Class A) -- $ (3,257)
From net investment income (Class I) -- (1)
From net realized gain on investments and
foreign currency transactions (Class A) -- (23,642)
From net realized gain on investments and
foreign currency transactions (Class I) -- (10)
--------- ---------
$$$$$$$$$
Total distributions declared to
shareholders -- $ (26,910)
--------- ---------
Net increase (decrease) in net assets from fund
share transactions $ (64,307) $ 501,649
--------- ---------
Total increase in net assets $ 1,250 $ 519,143
Net assets:
At beginning of period 519,143 --
--------- ---------
At end of period (including accumulated
undistributed net investment income of $4,771
and $1,837, respectively) $ 520,393 $ 519,143
========= =========
</TABLE>
See notes to financial statements.
*For the period from the commencement of the fund's investment operations, May
4, 1999, through
April 30, 2000.
<PAGE>
FINANCIAL STATEMENTS - continued
Financial Highlights
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
PERIOD ENDED PERIOD ENDED
OCTOBER 31, 2000* OCTOBER 31, 2000**
MFS EMERGING OPPORTUNITIES FUND (UNAUDITED) (UNAUDITED)
------------------------------------------------------------------------------------------------------------
CLASS A CLASS I
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Per share data (for a share outstanding throughout the period):
Net asset value - beginning of period $10.00 $10.00
------ ------
Income from investment operations# -
Net investment loss(S) $(0.02) $(0.03)
Net realized and unrealized gain on investments and foreign
currency 0.78 0.79
------ ------
Total from investment operations $ 0.76 $ 0.76
------ ------
Net asset value - end of period $10.76 $10.76
====== ======
Total return(+) 7.60%++ 7.49%++
Ratios (to average net assets)/Supplemental data(S):
Expenses## 1.05%+ 1.05%+
Net investment loss (0.39)%+ (0.53)%+
Portfolio turnover 108% 108%
Net assets at end of period (000 Omitted) $ 641 $ 886
(S)Subject to reimbursement by the fund, the investment adviser voluntarily
agreed, under a temporary expense reimbursement agreement to pay all of
the fund's operating expenses, exclusive of management fee. In
consideration, the fund pays the investment adviser a reimbursement fee
not greater than 0.25% of average daily net assets. To the extent actual
expenses were over this limitation, the net investment loss per share and
ratios would have been:
Net investment loss $(0.14) $ (0.13)
Ratios (to average net assets):
Expenses## 2.97%+ 2.97%+
Net investment loss (2.31)%+ (2.45)%+
*For the period from the commencement of the fund's investment operations, May 2, 2000,
through October 31, 2000.
**For the period from the inception of Class I shares, June 1, 2000, through October 31, 2000.
+Annualized.
++Not annualized.
#Per share data are based on average shares outstanding.
##Ratios do not reflect expense reductions from certain expense offset arrangements.
(+)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.
</TABLE>
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS - continued
Financial Highlights
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS PERIOD SIX MONTHS PERIOD
ENDED ENDED ENDED ENDED
OCTOBER 31, APRIL 30, OCTOBER 31, APRIL 30,
2000 2000* 2000 2000**
MFS HIGH QUALITY BOND FUND (UNAUDITED) (UNAUDITED)
------------------------------------------------------------------------------------------------------------------------------
CLASS A CLASS I
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $ 9.58 $10.00 $ 9.54 $10.01
------ ------ ------ ------
Income from investment operations# -
Net investment income(S) $ 0.35 $ 0.66 $ 0.35 $ 0.67
Net realized and unrealized gain (loss) on
investments 0.15 (0.44) 0.12 (0.50)
------ ------ ------ ------
Total from investment operations $ 0.50 $ 0.22 $ 0.47 $ 0.17
------ ------ ------ ------
Less distributions declared to shareholders from net
investment income $(0.35) $(0.64) $(0.35) $(0.64)
------ ------ ------ ------
Net asset value - end of period $ 9.73 $ 9.58 $ 9.66 $ 9.54
====== ====== ====== ======
Total return(+) 5.34%++ 2.35%++ 5.05%++ 1.82%++
Ratios (to average net assets)/Supplemental data(S):
Expenses## 0.03%+ 0.03%+ 0.03%+ 0.03%+
Net investment income 7.30%+ 6.85%+ 7.23%+ 6.25%+
Portfolio turnover 170% 831% 170% 831%
Net assets at end of period (000 Omitted) $1,345 $1,277 -- +++ -- +++
(S)Subject to reimbursement by the fund, the investment adviser voluntarily
agreed, under a temporary expense reimbursement agreement to pay all of
the fund's operating expenses, exclusive of management fee. In addition,
the investment adviser voluntarily waived its fee for certain of the
periods indicated. To the extent actual expenses were over this limitation
and the waiver had not been in place, the net investment income per share
and ratios would have been:
Net investment income $ 0.24 $ 0.29 $ 0.24 $ 0.25
Ratios (to average net assets):
Expenses## 2.36%+ 3.92%+ 2.36%+ 3.92%+
Net investment income 4.97%+ 2.96%+ 4.90%+ 2.36%+
*For the period from the commencement of the fund's investment operations May 3, 1999,
through April 30, 2000.
**For the period from the inception of Class I shares, May 5, 1999, through April 30, 2000.
+Annualized.
++Not annualized.
+++Class I net assets were less than $500.
#Per share data are based on average shares outstanding.
##Ratios do not reflect expense reductions from certain expense offset arrangements.
(+)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.
</TABLE>
See notes to financial statements.
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS PERIOD SIX MONTHS PERIOD
ENDED ENDED ENDED ENDED
OCTOBER 31, APRIL 30, OCTOBER 31, APRIL 30,
2000 2000* 2000 2000**
MFS LARGE CAP VALUE FUND (UNAUDITED) (UNAUDITED)
----------------------------------------------------------------------------------------------------------------------------------
CLASS A CLASS I
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $10.23 $10.00 $10.28 $10.00
------ ------ ------ ------
Income from investment operations# -
Net investment income(S) $ 0.07 $ 0.12 $ 0.10 $ 0.11
Net realized and unrealized gain on investments
and foreign currency 1.35 0.66 1.35 0.72
------ ------ ------ ------
Total from investment operations $ 1.42 $ 0.78 $ 1.45 $ 0.83
------ ------ ------ ------
Less distributions declared to shareholders -
From net investment income $ -- $(0.07) $ -- $(0.07)
From net realized gain on investments and foreign
currency transactions -- (0.48) -- (0.48)
------ ------ ------ ------
Total distributions declared to shareholders $ -- $(0.55) $ -- $(0.55)
------ ------ ------ ------
Net asset value - end of period $11.65 $10.23 $11.73 $10.28
====== ====== ====== ======
Total return(+) 13.88%++ 8.14%++ 14.22%++ 8.65%++
Ratios (to average net assets)/Supplemental data(S):
Expenses## 1.03%+ 1.04%+ 1.03%+ 1.04%+
Net investment income 1.19%+ 1.13%+ 1.83%+ 1.12%
Portfolio turnover 32% 100% 32% 100%
Net assets at end of period (000 Omitted) $ 520 $ 519 $ -- +++ $ -- +++
(S)Subject to reimbursement by the fund, the investment adviser voluntarily
agreed, under a temporary expense reimbursement agreement to pay all of
the fund's operating expenses, exclusive of management fee. In
consideration, the fund pays the investment adviser a fee not greater than
0.25% of average daily net assets. To the extent actual expenses were over
this limitation, the net investment loss per share and ratios would
have been:
Net investment loss $(0.16) $(0.57) $(0.13) $(0.59)
Ratios (to average net assets):
Expenses## 5.21%+ 7.74%+ 5.21%+ 7.74%+
Net investment loss (2.99)%+ (5.57)%+ (2.35)%+ (5.58)%+
*For the period from the commencement of the fund's investment operations, May 4, 1999,
through April 30, 2000.
**For the period from the inception of Class I shares, May 5, 1999, through April 30, 2000.
+Annualized.
++Not annualized.
+++Class I net assets were less than $500.
#Per share data are based on average shares outstanding.
##Ratios do not reflect expense reductions from certain expense offset arrangements.
(+)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.
</TABLE>
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
(1) Business and Organization
MFS Emerging Opportunities Fund, MFS High Quality Bond Fund and MFS Large Cap
Value Fund (the funds) are each a separate 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. MFS High
Quality Bond Fund can invest up to 15% of its portfolio in high-yield securities
rated below investment grade. Investments in high-yield securities involve
greater degrees of credit and market risk than investments in higher- rated
securities and tend to be more sensitive to economic conditions. The funds can
invest in foreign securities. Investments in foreign securities are vulnerable
to the effects of changes in the relative values of the local currency and the
U.S. dollar and to the effects of changes in each country's legal, political,
and economic environment.
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. Equity securities listed on securities
exchanges or reported through the NASDAQ system are reported at market value
using last sale prices. Unlisted equity securities or listed equity securities
for which last sale prices are not available are reported at market value
using last quoted bid prices. Short-term obligations, which mature in 60 days
or less, are valued at amortized cost, which approximates market value.
Securities for which there are no such quotations or valuations are valued in
good faith, at fair value, by the Trustees.
Foreign Currency Translation - Investment valuations, other assets, and
liabilities initially expressed in foreign currencies are converted each
business day into U.S. dollars based upon current exchange rates. Purchases
and sales of foreign investments, income, and expenses are converted into U.S.
dollars based upon currency exchange rates prevailing on the respective dates
of such transactions. Gains and losses attributable to foreign currency
exchange rates on sales of securities are recorded for financial statement
purposes as net realized gains and losses on investments. Gains and losses
attributable to foreign exchange rate movements on income and expenses are
recorded for financial statement purposes as foreign currency transaction
gains and losses. That portion of both realized and unrealized gains and
losses on investments that results from fluctuations in foreign currency
exchange rates is not separately disclosed.
Investment Transactions and Income - Investment transactions are recorded on
the trade date. Interest income is recorded on the accrual basis. All discount
is accreted for financial statement and tax reporting purposes as required by
federal income tax regulations. Dividends received in cash are recorded on the
ex-dividend date. Dividend and interest payments received in additional
securities are recorded on the ex-dividend or ex-interest date in an amount
equal to the value of the security on such date. MFS High Quality Bond Fund
uses the effective interest method for reporting interest income on payment-
in-kind (PIK) bonds.
Legal fees and other related expenses incurred to preserve and protect the
value of a security owned are added to the cost of the security; other legal
fees are expensed. Capital infusions made directly to the security issuer,
which are generally non-recurring, incurred to protect or enhance the value of
high-yield debt securities, are reported as additions to the cost basis of the
security. Costs that are incurred to negotiate the terms or conditions of
capital infusions or that are expected to result in a plan of reorganization
are reported as realized losses. Ongoing costs incurred to protect or enhance
an investment, or costs incurred to pursue other claims or legal actions, are
expensed.
Fees Paid Indirectly - Each fund's custody fee is reduced according to an
arrangement that measures the value of cash deposited with the custodian by
each fund. This amount is shown as a reduction of total expenses on the
Statement of Operations.
Tax Matters and Distributions - Each fund's policy is to comply with the
provisions of the Internal Revenue Code (the Code) applicable to regulated
investment companies and to distribute to shareholders all of its net taxable
income, including any net realized gain on investments. Accordingly, no
provision for federal income or excise tax is provided.
Distributions to shareholders are recorded on the ex-dividend date. The funds
distinguish between distributions on a tax basis and a financial reporting
basis and requires that only distributions in excess of tax basis earnings and
profits, be reported in the financial statements as distributions from paid-in
capital. Differences in the recognition or classification of income between
the financial statements and tax earnings and profits, which result in
temporary over-distributions for financial statement purposes, are classified
as distributions in excess of net investment income or net realized gains.
At April 30, 2000, MFS High Quality Bond Fund, for federal income tax
purposes, had a capital loss carryforward of $17,664, 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, 2008.
Multiple Classes of Shares of Beneficial Interest - The funds offer multiple
classes of shares, which differ in their respective distribution and service
fees. All shareholders bear the common expenses of the fund based on the
(value of settled shares outstanding of each class), without distinction
between the share classes. All shareholders bear the common expenses of the
fund based on daily net assets of each class, without distinction between
share classes. Dividends are declared separately for each class. Differences
in per share dividend rates are generally due to differences in separate class
expenses.
(3) Transactions with Affiliates
Investment Adviser - The funds have an investment advisory agreement with
Massachusetts Financial Services Company (MFS) to provide overall investment
advisory and administrative services, and general office facilities. The
management fee for MFS Emerging Opportunities Fund, MFS High Quality Bond Fund
and MFS Large Cap Value Fund is computed daily and paid monthly at an annual
rate of 0.75%, 0.50% and 0.75% of each fund's average daily net assets,
respectively. For MFS High Quality Bond Fund, the investment adviser has
voluntarily agreed to waive its fee, which is shown as a reduction of total
expenses in the Statement of Operations.
The MFS Emerging Opportunities Fund and MFS Large Cap Value Fund have a
temporary expense reimbursement agreement whereby MFS has voluntarily agreed
to pay all of the fund's operating expenses, exclusive of management fees.
Each fund in turn will pay MFS an expense reimbursement fee not greater than
0.25% of average daily net assets. To the extent that the expense
reimbursement fee exceeds each fund's actual expenses, the excess will be
applied to amounts paid by MFS. At the period ended October 31, 2000,
aggregate unreimbursed expenses amounted to $11,420 and $10,280 for MFS
Emerging Opportunities Fund and MFS Large Cap Value Fund, respectively.
For the MFS High Quality Bond Fund, the investment adviser has voluntarily
agreed to pay the fund's operating expenses, exclusive of management fee such
that the fund's aggregate expenses do not exceed 0.00% of its average daily
net assets. This is reflected as a reduction of total expenses in the
Statement of Operations.
The funds pay no compensation directly to its Trustees who are officers of the
investment adviser, or to officers of the funds, all of whom receive
remuneration for their services to the funds from MFS. Certain officers and
Trustees of the funds are officers or directors of MFS, MFS Fund Distributors,
Inc. (MFD), and MFS Service Center, Inc. (MFSC). The Trustees are currently
not receiving any payments for their services to the funds.
Administrator - The funds have an administrative services agreement with MFS
to provide the funds with certain financial, legal, shareholder servicing,
compliance, and other administrative services. As a partial reimbursement for
the cost of providing these services, each fund incurs an administrative fee
at the following annual percentages of each fund's average daily net assets:
First $2 billion 0.0175%
Next $2.5 billion 0.0130%
Next $2.5 billion 0.0005%
In excess of $7 billion 0.0000%
Distributor - MFD, a wholly owned subsidiary of MFS, as distributor, did not
receive any sales charge on sales of Class A shares of the funds for the
period ended October 31, 2000.
The Trustees have adopted a distribution plan for Class A shares of each fund
pursuant to Rule 12b-1 of the Investment Company Act of 1940 as follows:
Each 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 each fund related to the
distribution and servicing of its shares. These expenses include a service fee
paid to each securities dealer that enters into a sales agreement with MFD of
up to 0.25% per annum of each fund's average daily net assets attributable to
Class A shares which are attributable to that securities dealer and a
distribution fee to MFD of up to 0.10% per annum of each fund's average daily
net assets attributable to Class A shares. All distribution and service fees
under Class A distribution plans are currently not being imposed by the
Trustees for MFS Emerging Opportunities Fund, MFS High Quality Bond Fund and
MFS Large Cap Value Fund.
Certain Class A shares are subject to a contingent deferred sales charge in
the event of a shareholder redemption within 12 months following purchase.
There were no contingent deferred sales charges imposed on Class A shares
during the period ended October 31, 2000.
Shareholder Servicing Agent - MFSC, a wholly owned subsidiary of MFS, earns a
fee for its services as shareholder servicing agent. The fee is calculated as
a percentage of each fund's average daily net assets at an annual rate of
0.10%.
(4) Portfolio Securities
Purchases and sales of investments, other than short-term obligations, were as
follows:
<TABLE>
<CAPTION>
MFS EMERGING MFS HIGH MFS LARGE
OPPORTUNITIES QUALITY BOND CAP VALUE
FUND FUND FUND
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Purchases
---------
U.S. government securities $ -- $1,605,508 $ --
---------- ---------- --------
Investments (non-U.S. government
securities) $2,567,091 $ 579,590 $142,721
---------- ---------- --------
Sales
-----
U.S. government securities $ -- $1,556,406 $ --
---------- ---------- --------
Investments (non-U.S. government
securities) $1,147,449 $ 561,627 $225,942
---------- ---------- --------
</TABLE>
The cost and unrealized appreciation and depreciation in the value of the
investments owned by the funds as computed on a federal income tax basis, are
as follows:
<TABLE>
<CAPTION>
MFS EMERGING MFS HIGH MFS LARGE
OPPORTUNITIES QUALITY BOND CAP VALUE
FUND FUND FUND
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Aggregate cost $1,513,746 $1,286,036 $428,962
---------- ---------- --------
Gross unrealized appreciation $ 96,527 $ 18,648 $ 63,628
Gross unrealized depreciation (123,706) (14,432) (17,397)
---------- ---------- --------
Net unrealized appreciation
(depreciation) $ (27,179) $ 4,216 $ 46,231
========== ========== ========
</TABLE>
(5) Shares of Beneficial Interest
Each fund's Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest. Transactions in
fund shares were as follows:
Class A shares
MFS EMERGING
OPPORTUNITIES FUND
------------------------------
PERIOD ENDED OCTOBER 31, 2000*
------------------------------
SHARES AMOUNT
----------------------------------------------------------------------------
Shares sold 63,906 $ 659,739
Shares reacquired (4,355) (51,032)
------ ----------
Net increase 59,551 $ 608,707
====== ==========
Class I shares
MFS EMERGING
OPPORTUNITIES FUND
------------------------------
PERIOD ENDED OCTOBER 31, 2000**
------------------------------
SHARES AMOUNT
----------------------------------------------------------------------------
Shares sold 89,932 $ 936,383
Shares reacquired (7,594) (82,995)
------ ----------
Net increase 82,338 $ 853,388
====== ==========
Class A shares
<TABLE>
<CAPTION>
MFS HIGH QUALITY BOND FUND
--------------------------------------------------------------
SIX MONTHS ENDED PERIOD ENDED
OCTOBER 31, 2000 APRIL 30, 2000***
------------------------------ -----------------------------
SHARES AMOUNT SHARES AMOUNT
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold -- $ -- 125,545 $ 1,250,350
Shares issued to shareholders in
reinvestment of distributions 4,955 47,958 7,706 74,581
Shares reacquired -- -- -- (5)
----- --------- ------- ------------
Net increase 4,955 $ 47,958 133,251 $ 1,324,926
===== ========= ======= ============
</TABLE>
Class I shares
<TABLE>
<CAPTION>
MFS HIGH QUALITY BOND FUND
------------------------------------------------------------
SIX MONTHS ENDED PERIOD ENDED
OCTOBER 31, 2000 APRIL 30, 2000****
------------------------------ ---------------------------
SHARES AMOUNT SHARES AMOUNT
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold -- $-- 20 $ 200
-- --- -- ------
Net increase -- $-- 20 $ 200
== === == ======
</TABLE>
Class A shares
<TABLE>
<CAPTION>
MFS LARGE CAP VALUE FUND
------------------------------------------------------------
SIX MONTHS ENDED PERIOD ENDED
OCTOBER 31, 2000 APRIL 30, 2000*****
------------------------------ ---------------------------
SHARES AMOUNT SHARES AMOUNT
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 100 $ 1,104 90,797 $ 899,818
Shares issued to shareholders in
reinvestment of distributions -- -- 2,772 26,888
Shares reacquired (6,175) (65,411) (42,834) (425,257)
------ --------- ------ ----------
Net increase (6,075) $ 64,307 50,735 $ 501,449
====== ========= ====== ==========
</TABLE>
Class I shares
<TABLE>
<CAPTION>
MFS LARGE CAP VALUE FUND
------------------------------------------------------------
SIX MONTHS ENDED PERIOD ENDED
OCTOBER 31, 2000 APRIL 30, 2000****
------------------------------ ---------------------------
SHARES AMOUNT SHARES AMOUNT
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold -- $ -- 20 $ 200
-- ----- -- ------
Net increase -- $ -- 20 $ 200
== ===== == ======
*For the period from the commencement of the funds' investment operations, May 2, 2000, through October
31, 2000.
**For the period from inception of Class I shares, June 1, 2000, through October 31, 2000.
***For the period from the commencement of the funds' investment operations, May 3, 1999, through April 30,
2000.
****For the period from the inception of Class I shares, May 5, 1999, through April 30, 2000.
*****For the period from the commencement of the fund's investment operations, May 4, 1999, through April 30,
2000.
</TABLE>
(6) Line of Credit
The funds and other affiliated funds participate in a $1.1 billion unsecured
line of credit provided by a syndication of banks under a line of credit
agreement. Borrowings may be made for temporary financing needs. 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. For the period ended October 31, 2000, there was no
commitment fee allocated to the MFS Emerging Opportunities Fund and MFS High
Quality Bond Fund. For MFS Large Cap Value Fund the commitment fee allocated
to the fund for the period ended October 31, 2000 was $1. The funds had no
significant borrowings during the period.
--------------------------------------------------
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.
