<PAGE>
[LOGO: M F S SEMIANNUAL REPORT
THE FIRST NAME IN MUTUAL FUNDS] MAY 31, 1995
MASSACHUSETTS INVESTORS GROWTH STOCK FUND
[GRAPHIC OMITTED: art work:
Silhouette of two men talking in front of a large window]
<PAGE>
<TABLE>
<CAPTION>
MASSACHUSETTS INVESTORS GROWTH STOCK FUND
<S> <C>
TRUSTEES CUSTODIAN
A. Keith Brodkin* - Chairman and President State Street Bank and Trust Company
Richard B. Bailey* - Private Investor; INVESTOR INFORMATION
Former Chairman and Director (until 1991), For MFS stock and bond market outlooks,
Massachusetts Financial Services Company call toll free: 1-800-637-4458 anytime from
a touch-tone telephone.
Peter G. Harwood - Private Investor
For information on MFS mutual funds,
J. Atwood Ives - Chairman and Chief Executive call your financial adviser or, for an
Officer, Eastern Enterprises information kit, call toll free:
1-800-637-2929 any business day from
Lawrence T. Perera - Partner, Hemenway & Barnes 9 a.m. to 5 p.m. Eastern time (or leave
a message anytime).
William J. Poorvu - Adjunct Professor, Harvard
University Graduate School of Business INVESTOR SERVICE
Administration MFS Service Center, Inc.
P.O. Box 2281
Charles W. Schmidt - Private Investor; Boston, MA 02107-9906
Former Senior Vice President and Group Executive
(until 1990), Raytheon Company For current account service, call toll free:
1-800-225-2606 any business day from
Arnold D. Scott* - Senior Executive Vice President 8 a.m. to 8 p.m. Eastern time.
and Secretary, Massachusetts Financial Services Company
For service to speech- or hearing-impaired,
Jeffrey L. Shames* - President, Massachusetts call toll free: 1-800-637-6576 any business
Financial Services Company day from 9 a.m. to 5 p.m. Eastern time. (To use this
service, your phone must be equipped with a
Elaine R. Smith - Independent Consultant Telecommunications Device for the Deaf.)
David B. Stone - Chairman, North American For share prices, account balances and
Management Corp. (Investment Advisers) exchanges, call toll free: 1-800-MFS-TALK
(1-800-637-8255) anytime from a touch-tone
INVESTMENT ADVISER telephone.
Massachusetts Financial Services Company
500 Boylston Street
Boston, Massachusetts 02116-3741
PORTFOLIO MANAGERS -------------------------------------------
George F. Bennett, Jr.* TOP-RATED SERVICE
Christian Felipe* [SEAL] MFS was rated first when securities
firms evaluated the quality of
TREASURER service they receive from 40
W. Thomas London* mutual fund companies. MFS got
high marks for answering calls
ASSISTANT TREASURER quickly, processing transactions
James O. Yost* accurately and sending statements
out on time.
SECRETARY (Source: 1994 DALBAR Survey)
Stephen E. Cavan* -------------------------------------------
ASSISTANT SECRETARY
James R. Bordewick, Jr.*
*Affiliated with the Investment Adviser
</TABLE>
<PAGE>
LETTER TO SHAREHOLDERS
Dear Shareholders:
During the past six months, declining interest rates have driven the stock
market strongly upward, especially in the larger-capitalization companies. The
Standard & Poor's 500 Composite Index (S&P 500), a popular, unmanaged index of
common stock performance, and the Dow Jones Industrial Average, an unmanaged,
weighted average of stock prices for 30 blue-chip industrial corporations
listed on the New York Stock Exchange, showed performance of +19.2% and
+21.1%, respectively, for the period. Over the same period, the Fund
experienced disappointing results, with Class A shares providing a total
return of +10.49% and Class B shares, +10.32%. Both of these returns assume
the reinvestment of distributions but exclude the effects of any sales
charges. A discussion of the factors which contributed to the Fund's results
may be found in the Portfolio Performance and Strategy section of this letter.
Economic Environment
As the U.S. economy enters its fifth year of expansion, it is evidencing a
decidedly decelerating trend from its robust pace of 1994, when gross domestic
product expanded by 4.1%. The Federal Reserve Board's efforts to dampen this
pace by raising short-term interest rates are clearly having their intended
effect, as growth in this year's first quarter diminished to an annual rate of
2.7%. Growth in the second quarter appears to have slowed even further as
employment, consumer spending and industrial production have all shown
considerable weakness. The result may be flat or even slightly negative growth
in the second quarter. However, we do not anticipate that the economy will
lapse into recession. Rather, we believe the economy will pursue a moderate
growth path for the remainder of this year, driven by export growth and an
improving consumer sector supported by moderate prevailing interest rates.
Stock Market
The stock market has maintained its upward momentum, as stock prices have
responded to growing confidence that the Federal Reserve has concluded its
tightening initiatives and that gains in corporate earnings may remain
substantial. Although we expect overall economic growth to remain moderate,
our outlook for corporate earnings growth remains favorable. We have been
emphasizing growth areas such as technology, health care, consumer and
household products, and financial services while de-emphasizing many cyclical
areas such as autos and basic materials because of their less attractive
earnings outlook.
Portfolio Performance and Strategy
Despite the positive return achieved during the past six months, the Fund's
performance has lagged that of the major large-capitalization stock indices.
Investments in the cellular telephone, long-distance telephone, and retail
industries were a depressant on the Fund's performance. The telephone
industries have been impacted by regulatory uncertainties and potential future
competition in their markets. The retail industry, on the other hand, has been
hurt by lackluster consumer spending resulting from a weakening economy. Even
retail companies whose fundamentals have remained intact have generally been
poor performers. Holdings in all three of these industries have been reduced
during the past six months.
On the positive side, the Fund benefited from an overweighted position in
the technology sector. The semiconductor industry has seen strong demand,
driven by a proliferation of uses and more functions being added to the
silicon chip. Investments in this industry have been increased by the purchase
of VLSI Technology, Inc. and LSI Logic Corp., two companies which design and
manufacture high-performance, customer-specific products by building entire
systems on the chip. The telecommunications sector also has been increased
with the addition of Cabletron, a leading producer of local area network
connectivity products and Nokia, a Finnish telecommunications equipment
supplier.
As the economy slows, we believe companies with faster inherent growth
rates (such as the ones represented in the Fund) should benefit, while
companies more dependent on price increases and a robust economy should show
relatively less attractive profit growth.
We appreciate your support and welcome any questions or comments you may
have.
Respectfully,
/s/ A. KEITH BRODKIN /s/ GEORGE F. BENNETT, JR. /s/ CHRISTIAN FELIPE
A. Keith Brodkin George F. Bennett, Jr. Christian Felipe
Chairman and President Portfolio Manager Portfolio Manager
June 23, 1995
PORTFOLIO MANAGER PROFILES
George Bennett has been a member of the MFS investment staff since 1969. He
began his career at MFS as an industry specialist and was promoted to
Assistant Vice President - Investments in 1973. In 1979, he was named Vice
President - Investments and in 1986 he was named Senior Vice President. He
became Portfolio Manager of Massachusetts Investors Growth Stock Fund in 1993.
On May 1, 1995, Christian Felipe joined George Bennett as a Portfolio Manager
of the Fund. Christian joined the MFS investment staff in 1986 as an industry
specialist. A graduate of the University of California, Los Angeles and the
Wharton School of Finance and Commerce of the University of Pennsylvania, he
was promoted to Assistant Vice President - Investments in 1988 and Vice
President - Investments in 1989.
<PAGE>
OBJECTIVE AND POLICIES
The Fund's investment objective is long-term growth of capital and future
income rather than current income.
The Fund's investment policy is to keep assets invested, except for working
cash balances, in the common stocks, or securities convertible into common
stocks, of companies believed by the investment adviser to possess better-
than-average prospects for long-term growth. Emphasis is placed on the
selection of progressive, well-managed companies.
PERFORMANCE SUMMARY
Because mutual funds like Massachusetts Investors Growth Stock 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 and Class B
shares for the applicable time periods.
AVERAGE ANNUAL AND CUMULATIVE TOTAL RATES OF RETURN
Class A Investment Results
(net asset value change including reinvested distributions)
6 Months 1 Year 5 Years 10 Years
------------------------------------------------------------------------------
Cumulative Total Return* +10.49% +10.28% +62.80% +227.59%
------------------------------------------------------------------------------
Average Annual Total Return* -- +10.28% +10.24% + 12.60%
------------------------------------------------------------------------------
The average annual total returns, calculated for the period ended as of the
most recent calendar quarter as required by the Securities and Exchange
Commission (the SEC), with all distributions reinvested and reflecting the
maximum sales charge of 5.75% on the initial investment for the 1-, 5- and 10-
year periods ended March 31, 1995, were -0.51%, +10.43% and +11.92%,
respectively.
Class B Investment Results
(net asset value change including reinvested distributions)
9/07/93+ -
6 Months 1 Year 5/31/95
------------------------------------------------------------------------------
Cumulative Total Return++ +10.32% +9.48% +4.06%
------------------------------------------------------------------------------
Average Annual Total Return++ -- +9.48% +2.33%
------------------------------------------------------------------------------
The average annual total returns, calculated for the period ended as of the
most recent calendar quarter as required by the SEC, with all distributions
reinvested and reflecting the current maximum contingent deferred sales charge
(CDSC) of 4% for the 1-year period ended March 31, 1995 and for the period
from September 7, 1993+ to March 31, 1995, were +1.19% and -2.41%, respectively.
All results represent past performance and are not necessarily an indication
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost. All
Class A share results reflect the applicable expense subsidy which is
explained in the Notes to Financial Statements. Had the subsidy not been in
effect, the results would have been less favorable. The subsidy may be
rescinded by MFS at any time.
* These results do not include the sales charge. If the charge had been
included, the results would have been lower.
+ Commencement of offering of this class of shares.
++ These results do not include any CDSC. If the charge had been included, the
results would have been lower.
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED) - May 31, 1995
Common Stocks - 91.8%
-----------------------------------------------------------------------------
Issuer Shares Value
-----------------------------------------------------------------------------
Business Machines - 3.9%
Motorola, Inc. 675,000 $ 40,415,625
-----------------------------------------------------------------------------
Business Services - 4.8%
CUC International, Inc.* 1,150,000 $ 42,262,500
Computer Sciences Corp.* 125,000 6,625,000
--------------
$ 48,887,500
-----------------------------------------------------------------------------
Cellular Telephones - 7.2%
AirTouch Communications, Inc.* 600,000 $ 16,350,000
Cellular Communications of Puerto Rico, Inc.* 213,832 6,548,605
LIN Broadcasting Corp.* 227,000 28,119,625
Telephone & Data Systems, Inc. 600,000 22,650,000
--------------
$ 73,668,230
-----------------------------------------------------------------------------
Computer Software - Personal Computers - 7.4%
Electronic Arts, Inc.* 700,000 $ 18,025,000
Microsoft Corp.* 680,000 57,587,500
--------------
$ 75,612,500
-----------------------------------------------------------------------------
Computer Software - Systems - 10.1%
Baan Co.* 14,100 $ 331,350
Compaq Computer Corp.* 150,000 5,868,750
Compuware Corp.* 456,500 13,580,875
EMC Corp.* 708,000 16,284,000
Informix Corp.* 534,600 22,586,850
Oracle Systems Corp.* 1,050,000 36,487,500
Sybase, Inc.* 400,000 8,400,000
--------------
$ 103,539,325
-----------------------------------------------------------------------------
Conglomerates - 0.5%
Tyco International Ltd. 100,000 $ 5,412,500
-----------------------------------------------------------------------------
Consumer Goods and Services - 1.3%
Duracell International, Inc. 300,000 $ 12,975,000
-----------------------------------------------------------------------------
Electronics - 11.8%
Intel Corp. 650,000 $ 72,962,500
LSI Logic Corp.* 350,000 23,537,500
National Semiconductor Corp.* 50,000 1,250,000
Sensormatic Electronics Corp. 600,000 17,625,000
VLSI Technology, Inc.* 200,000 5,212,500
--------------
$ 120,587,500
-----------------------------------------------------------------------------
Entertainment - 6.4%
Capital Cities/ABC, Inc. 25,000 $ 2,412,500
Comcast Corp., Special, "A" 700,000 12,250,000
Promus Cos., Inc.* 1,200,000 50,250,000
Viacom, Inc., "B"* 18,700 871,887
--------------
$ 65,784,387
-----------------------------------------------------------------------------
Financial Institutions - 3.4%
Advanta Corp., "B" 200,000 $ 7,200,000
Franklin Resources, Inc. 176,000 7,700,000
MBNA Corp.* 600,000 20,250,000
--------------
$ 35,150,000
-----------------------------------------------------------------------------
Food and Beverage Products - 0.6%
Universal Foods Corp. 200,000 $ 6,350,000
-----------------------------------------------------------------------------
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED) - continued
Common Stocks - continued
-----------------------------------------------------------------------------
Issuer Shares Value
-----------------------------------------------------------------------------
Insurance - 2.0%
General Re Corp. 150,000 $ 20,306,250
-----------------------------------------------------------------------------
Medical and Health Products - 1.3%
Alza Corp.* 500,000 $ 10,437,500
Johnson & Johnson 50,000 3,312,500
--------------
$ 13,750,000
-----------------------------------------------------------------------------
Medical and Health Technology and Services - 4.2%
Columbia HCA Healthcare Corp. 300,000 $ 12,262,500
Integrated Health Services, Inc. 100,000 3,337,500
Pacificare Health Systems, Inc., "B"* 110,000 7,287,500
United Healthcare Corp. 550,000 20,487,500
--------------
$ 43,375,000
-----------------------------------------------------------------------------
Pollution Control - 1.1%
WMX Technologies, Inc. 400,000 $ 10,900,000
-----------------------------------------------------------------------------
Restaurants and Lodging - 2.3%
Brinker International, Inc.* 1,387,500 $ 23,414,062
-----------------------------------------------------------------------------
Stores - 10.2%
AutoZone, Inc.* 418,500 $ 9,730,125
Bed Bath & Beyond, Inc.* 460,000 10,695,000
Home Depot, Inc. 617,800 25,715,925
Micro Warehouse, Inc.* 360,200 13,957,750
Office Depot, Inc.* 1,121,250 26,910,000
PetSmart, Inc.* 652,380 16,798,785
Phar-Mor, Inc.*## 70,000 70,000
--------------
$ 103,877,585
-----------------------------------------------------------------------------
Telecommunications - 4.7%
Bay Networks, Inc.* 301,530 $ 11,005,845
Cabletron Systems, Inc.* 231,800 12,401,300
Cisco Systems, Inc.* 250,000 10,937,500
Newbridge Networks Corp.* 12,100 428,038
Novell, Inc.* 150,000 2,896,875
Paging Network, Inc.* 375,000 10,406,250
--------------
$ 48,075,808
-----------------------------------------------------------------------------
Utilities - Telephone - 1.8%
MCI Communications Corp. 923,500 $ 18,700,875
-----------------------------------------------------------------------------
Foreign - 6.8%
Canada - 2.8%
Rogers Communications, Inc., "B"
(Telecommunications) 2,500,000 $ 28,500,293
-----------------------------------------------------------------------------
Finland - 1.4%
Nokia Corp., ADR, "B" (Electronics) 300,000 $ 13,950,000
-----------------------------------------------------------------------------
Hong Kong - 0.1%
Peregrine Investment Holdings
(Financial Institutions) 770,000 $ 975,591
-----------------------------------------------------------------------------
Sweden - 2.5%
Astra AB, Free, "B" (Pharmaceuticals) 900,000 $ 25,840,904
-----------------------------------------------------------------------------
Total Foreign Stocks $ 69,266,788
-----------------------------------------------------------------------------
Total Common Stocks (Identified Cost, $690,536,739) $ 940,048,935
-----------------------------------------------------------------------------
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED) - continued
Convertible Preferred Stock - 1.8%
-----------------------------------------------------------------------------
Issuer Shares Value
-----------------------------------------------------------------------------
Cellular Telephones - 1.8%
Cellular Communications
(Identified Cost, $9,447,866)# 400,000 $ 18,550,000
-----------------------------------------------------------------------------
Short-Term Obligations - 5.8%
------------------------------------------------------------------------------
Principal Amount
(000 Omitted)
------------------------------------------------------------------------------
Dow Chemical Co., due 6/01/95 $ 4,400 $ 4,400,000
Federal Home Loan Bank, due 6/05/95 6,000 5,996,087
Federal Home Loan Mortgage Corp., due 6/12/95 7,065 7,052,328
Federal Home Loan Mortgage Corp., due 6/13/95 2,260 2,255,585
Federal Home Loan Mortgage Corp., due 6/15/95 4,940 4,928,762
Federal National Mortgage Assn., due 6/02/95 9,000 8,998,528
Federal National Mortgage Assn., due 6/06/95 11,330 11,320,716
Federal National Mortgage Assn., due 6/22/95 7,860 7,833,040
Ford Motor Credit Co., due 6/07/95 7,030 7,022,993
-----------------------------------------------------------------------------
Total Short-Term Obligations, at Amortized Cost and Value $ 59,808,039
-----------------------------------------------------------------------------
Total Investments (Identified Cost, $759,792,644) $1,018,406,974
Other Assets, Less Liabilities - 0.6% 6,278,155
-----------------------------------------------------------------------------
Net Assets - 100.0% $1,024,685,129
-----------------------------------------------------------------------------
* Non-income producing security.
# Security valued by or at the direction of the Trustees.
## SEC Rule 144A restriction.
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS
Statement of Assets and Liabilities (Unaudited)
------------------------------------------------------------------------------
May 31, 1995
------------------------------------------------------------------------------
Assets:
Investments, at value (identified cost, $759,792,644) $1,018,406,974
Cash 102,505
Receivable for investments sold 12,398,451
Receivable for Fund shares sold 2,604,228
Dividends receivable 596,599
Other assets 13,503
--------------
Total assets $1,034,122,260
--------------
Liabilities:
Payable for investments purchased $ 8,207,735
Payable for Fund shares reacquired 652,367
Payable to affiliates -
Management fee 8,856
Shareholder servicing agent fee 3,784
Distribution fee 333,290
Accrued expenses and other liabilities 231,099
--------------
Total liabilities $ 9,437,131
--------------
Net assets $1,024,685,129
--------------
Net assets consist of:
Paid-in capital $ 711,503,941
Unrealized appreciation on investments and translation of
assets and liabilities in foreign currencies 258,629,207
Accumulated undistributed net realized gain on investments
and foreign currency transactions 54,800,056
Accumulated undistributed net investment loss (248,075)
--------------
Total $1,024,685,129
--------------
Shares of beneficial interest outstanding 98,543,108
--------------
Class A shares:
Net asset value and redemption price per share
(net assets of $1,013,035,505 / 97,405,407 shares of
beneficial interest outstanding) $10.40
------
Offering price per share (100/94.25) $11.03
------
Class B shares:
Net asset value and redemption price per share
(net assets of $11,649,624 / 1,137,701 shares of
beneficial interest outstanding) $10.24
------
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
and Class B shares.
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Statement of Operations (Unaudited)
------------------------------------------------------------------------------
Six Months Ended May 31, 1995
------------------------------------------------------------------------------
Net investment income:
Income -
Interest $ 1,332,807
Dividends 2,147,207
Foreign taxes withheld (68,744)
-------------
Total investment income $ 3,411,270
-------------
Expenses -
Management fee $ 1,587,720
Trustees' compensation 26,082
Shareholder servicing agent fee (Class A) 661,761
Shareholder servicing agent fee (Class B) 12,195
Distribution and service fee (Class A) 1,435,368
Distribution and service fee (Class B) 55,430
Postage 41,925
Printing 38,743
Legal fees 37,829
Custodian fee 32,797
Auditing fees 5,500
Miscellaneous 162,304
-------------
Total expenses $ 4,097,654
Preliminary reduction of expenses by investment adviser (489,152)
-------------
Net expenses $ 3,608,502
-------------
Net investment loss $ (197,232)
-------------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $ 56,025,507
Foreign currency transactions (144,543)
-------------
Net realized gain on investments and foreign currency
transactions $ 55,880,964
-------------
Change in unrealized appreciation (depreciation) -
Translation of assets and liabilities in foreign
currencies $ 14,877
-------------
Net unrealized gain on investments and foreign currency
translation $ 44,023,891
-------------
Net realized and unrealized gain on investments and
foreign currency $ 99,904,855
-------------
Increase in net assets from operations $ 99,707,623
-------------
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Statement of Changes in Net Assets
-------------------------------------------------------------------------------
Six Months Ended Year Ended
May 31, 1995 November 30,
(Unaudited) 1994
-------------------------------------------------------------------------------
Increase (decrease) in net assets:
From operations -
Net investment loss $ (197,232) (724,941)
Net realized gain on investments
and foreign currency transactions 55,880,964 101,534,996
Net unrealized gain (loss) on investments
and foreign currency translation 44,023,891 (153,476,898)
-------------- --------------
Increase (decrease) in net
assets from operations $ 99,707,623 $ (52,666,843)
-------------- --------------
Distributions declared to shareholders -
From net realized gain on investments and
foreign currency transactions (Class A) (100,591,642) (173,544,772)
From net realized gain on investments and
foreign currency transactions (Class B) (1,381,907) (311,145)
-------------- --------------
Total distributions declared
to shareholders $ (101,973,549) $ (173,855,917)
-------------- --------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 74,466,010 $ 123,072,342
Net asset value of shares issued
to shareholders in reinvestment
of distributions 81,490,928 138,766,670
Cost of shares reacquired (115,721,896) (182,859,857)
-------------- --------------
Increase in net assets from Fund
share transactions $ 40,235,042 $ 78,979,155
-------------- --------------
Total increase (decrease) in net assets $ 37,969,116 $ (147,543,605)
Net assets:
At beginning of period 986,716,013 1,134,259,618
-------------- --------------
At end of period (including accumulated
net investment loss of $248,075 and
$50,843, respectively) $1,024,685,129 $ 986,716,013
-------------- --------------
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights
--------------------------------------------------------------------------------------------------------------------
Six Months
Ended
May 31, Year Ended November 30,
1995 -------------------------------------------------------------
(Unaudited) 1994 1993 1992 1991 1990 1989
--------------------------------------------------------------------------------------------------------------------
Class A
--------------------------------------------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value - beginning of period $10.48 $12.97 $12.15 $10.87 $ 8.48 $10.70 $ 8.39
------ ------ ------ ------ ------ ------ ------
Income from investment operations<F4> -
Net investment income (loss)<F5> $ -- $(0.01) $(0.01) $(0.03) $ 0.01 $ 0.05 $ 0.09
Net realized and unrealized
gain (loss) on investments 1.00 (0.49) 1.55 2.07 2.93 (1.02) 3.14
------ ------ ------ ------ ------ ------ ------
Total from investment
operations $ 1.00 $(0.50) $ 1.54 $ 2.04 $ 2.94 $(0.97) $ 3.23
------ ------ ------ ------ ------ ------ ------
Less distributions declared to
shareholders -
From net investment income $ -- $ -- $ -- $ -- $(0.03) $(0.05) (0.08)
From net realized loss on
investments (1.08) (1.99) (0.72) (0.76) (0.52) (1.20) (0.84)
------ ------ ------ ------ ------ ------ ------
Total distributions
declared to shareholders $(1.08) $(1.99) $(0.72) $(0.76) $(0.55) $(1.25) $(0.92)
------ ------ ------ ------ ------ ------ ------
Net asset value - end of period $10.40 $10.48 $12.97 $12.15 $10.87 $ 8.48 $10.70
------ ------ ------ ------ ------ ------ ------
Total return<F3> 10.49%<F2> (5.00)% 13.43% 19.35% 36.56% (10.27)% 42.14%
Ratios (to average net assets)/
Supplemental data<F5>:
Expenses 0.72%<F1> 0.72% 0.71% 0.67% 0.63% 0.53% 0.54%
Net investment income (loss) (0.03)%<F1> (0.06)% (0.19)% (0.24)% 0.14% 0.55% 0.91%
Portfolio turnover 18% 56% 52% 16% 39% 44% 32%
Net assets at end of period
(000,000 omitted) $1,013 $977 $1,132 $1,070 $950 $749 $907
<FN>
<F1> Annualized.
<F2> Not annualized.
<F3>Total returns for Class A shares do not include the applicable sales charge (except for reinvestment dividends
prior to October 1, 1989). If the charge had been included, the results would have been lower.
<F4>Per share data for the periods subsequent to November 30, 1993 are based on average shares outstanding.
<F5>The distributor did not impose a portion of its Class A distribution fee for the periods indicated. If this fee
had been incurred by the Fund, the net investment loss per share and the ratios would have been:
Net investment loss $(0.01) $(0.03) $(0.02) -- -- -- --
Ratios (to average net assets):
Expenses 0.82% 0.82% 0.74% -- -- -- --
Net investment loss (0.13)% (0.16)% (0.21)% -- -- -- --
</FN>
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights - continued
----------------------------------------------------------------------------------------------------------
Six Months
Year Ended Ended Year Ended
November 30, May 31, November 30,
-------------------------- 1995 -------------------
1988 1987 1986 (Unaudited) 1994 1993<F5>
----------------------------------------------------------------------------------------------------------
Class A Class B
----------------------------------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
<S> <C> <C> <C> <C> <C> <C>
Net asset value - beginning of period $ 9.05 $ 9.69 $10.68 $10.35 $12.93 $12.91
------ ------ ------ ------ ------ ------
Income from investment operations<F4> -
Net investment income (loss) $ 0.12 $ 0.18 $ 0.20 $(0.04) $(0.09) $(0.01)
Net realized and unrealized
gain (loss) on investments 0.64 (0.68) 1.99 1.01 (0.50) 0.03
------ ------ ------ ------ ------ ------
Total from investment
operations $ 0.76 $(0.50) $ 2.19 $ 0.97 $(0.59) $ 0.02
------ ------ ------ ------ ------ ------
Less distributions declared to
shareholders -
From net investment income $(0.15) $(0.14) $(0.20) $ -- $ -- $ --
In excess of net investment income -- -- -- -- -- --
From net realized loss on
investments (1.27) -- (2.98) (1.08) (1.99) --
------ ------ ------ ------ ------ ------
Total distributions
declared to shareholders $(1.42) $(0.14) $(3.18) $(1.08) $(1.99) $(0.00)
------ ------ ------ ------ ------ ------
Net asset value - end of period $ 8.39 $ 9.05 $ 9.69 $10.24 $10.35 $12.93
------ ------ ------ ------ ------ ------
Total return<F3> 8.21% (5.57)% 20.30% 10.32%<F2> (5.82)% 0.70%<F2>
Ratios (to average net assets)/
Supplemental data:
Expenses 0.58% 0.50% 0.50% 1.61%<F1> 1.60% 1.49%<F1>
Net investment income (loss) 1.27% 1.60% 1.62% (0.92)%<F1> (0.87)% (0.99)%<F1>
Portfolio turnover 75% 66% 77% 18% 56% 52%
Net assets at end of period
(000,000 omitted) $735 $774 $899 $12 $9 $2
<FN>
<F1> Annualized.
<F2> Not annualized.
<F3> Total returns for Class A shares do not include the applicable sales charge (except for reinvestment dividends
prior to October 1, 1989). If the charge had been included, the results would have been lower.
<F4> Per share data for the periods subsequent to November 30, 1993 are based on average shares outstanding.
<F5> For the period from the commencement of offering of Class B shares, September 7, 1993 to November 30, 1993.
</TABLE>
See notes to financial statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(1) Business and Organization
Massachusetts Investors Growth Stock Fund (the Fund) is a Massachusetts
business trust and is registered under the Investment Company Act of 1940, as
amended, as a diversified, open-end management investment company.
(2) Significant Accounting Policies
Investment Valuations - Equity securities listed on securities exchanges or
reported through the NASDAQ system are valued at last sale prices. Unlisted
equity securities or listed equity securities for which last sale prices are
not available are valued at last quoted bid prices. Debt securities (other
than short-term obligations which mature in 60 days or less), including listed
issues and forward contracts, are valued on the basis of valuations furnished
by dealers or by a pricing service with consideration to factors such as
institutional-size trading in similar groups of securities, yield, quality,
coupon rate, maturity, type of issue, trading characteristics and other market
data, without exclusive reliance upon exchange or over-the-counter prices.
Short-term obligations, which mature in 60 days or less, are valued at
amortized cost, which approximates value. Non-U.S. dollar denominated short-
term obligations are valued at amortized cost as calculated in the base
currency and translated into U.S. dollars at the closing daily exchange rate.
Futures contracts, options and options on futures contracts listed on
commodities exchanges are valued at closing settlement prices. Over-the-
counter options are valued by brokers through the use of a pricing model which
takes into account closing bond valuations, implied volatility and short-term
repurchase rates. Securities for which there are no such quotations or
valuations are valued at fair value as determined in good faith by or at the
direction of the Trustees.
Repurchase Agreements - The Fund may enter into repurchase agreements with
institutions that the Fund's investment adviser has determined are
creditworthy. Each repurchase agreement is recorded at cost. The Fund requires
that the securities purchased in a repurchase transaction be transferred to
the custodian in a manner sufficient to enable the Fund to obtain those
securities in the event of a default under the repurchase agreement. The Fund
monitors, on a daily basis, the value of the securities transferred to ensure
that the value, including accrued interest, of the securities under each
repurchase agreement is greater than amounts owed to the Fund under each such
repurchase agreement.
Foreign Currency Translation - Investment valuations, other assets, and
liabilities initially expressed in foreign currencies are converted each
business day into U.S. dollars based upon current exchange rates. Purchases
and sales of foreign investments and 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.
Written Options - The Fund may write covered call or put options for which
premiums are received and are recorded as liabilities, and are subsequently
adjusted to the current value of the options written. Premiums received from
writing options which expire are treated as realized gains. Premiums received
from writing options which are exercised or are closed are offset against the
proceeds or amount paid on the transaction to determine the realized gain or
loss. If a put option is exercised, the premium reduces the cost basis of the
security purchased by the Fund. The Fund, as writer of an option, may have no
control over whether the underlying securities may be sold (call) or purchased
(put) and, as a result, bears the market risk of an unfavorable change in the
price of the securities underlying the written option. In general, written
call options may serve as a partial hedge against decreases in value in the
underlying securities to the extent of the premium received. Written options
may also be used as a part of an income producing strategy reflecting the view
of the Fund's management on the direction of interest rates.
Futures Contracts - The Fund may enter into futures contracts for the delayed
delivery of foreign currency or contracts based on stock 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 exchange rates or
securities prices. The Fund may also invest in futures contracts for non-
hedging purposes. For example, interest rate futures may be used in modifying
the duration of the portfolio without incurring the additional transaction
costs involved in buying and selling the underlying securities. Should
exchange rates or securities prices move unexpectedly, the Fund may not
achieve the anticipated benefits of the futures contracts and may realize a
loss.
Security Loans - The Fund may lend its securities to member banks of the
Federal Reserve System and to member firms of the New York Stock Exchange or
subsidiaries thereof. The loans are collateralized at all times by cash or
securities with a market value at least equal to the market value of
securities loaned. As with other extensions of credit, the Fund may bear the
risk of delay in recovery or even loss of rights in the collateral should the
borrower of the securities fail financially. The Fund receives compensation
for lending its securities in the form of fees or from all or a portion of the
income from investment of the collateral. The Fund would also continue to earn
income on the securities loaned. At May 31, 1995, the Fund had no securities
on loan.
Forward Foreign Currency Exchange Contracts - The Fund may enter into forward
foreign currency exchange contracts for the purchase or sale of a specific
foreign currency at a fixed price on a future date. Risks may arise upon
entering these contracts from the potential inability of counterparties to
meet the terms of their contracts and from unanticipated movements in the
value of a foreign currency relative to the U.S. dollar. The Fund will enter
into forward contracts for hedging purposes as well as for non-hedging
purposes. For hedging purposes, the Fund may enter into contracts to deliver
or receive foreign currency it will receive from or require for its normal
investment activities. It may also use contracts in a manner intended to
protect foreign currency-denominated securities from declines in value due to
unfavorable exchange rate movements. For non-hedging purposes, the Fund may
enter into contracts with the intent of changing the relative exposure of the
Fund's portfolio of securities to different currencies to take advantage of
anticipated changes. The forward foreign currency exchange contracts are
adjusted by the daily exchange rate of the underlying currency and any gains
or losses are recorded for financial statement purposes as unrealized until
the contract settlement date.
Investment Transactions and Income - Investment transactions are recorded on
the trade date. Interest income is recorded on the accrual basis. All premium
and original issue discount are amortized or accreted for both financial
statement and tax reporting purposes as required by federal income tax
regulations. Dividend income is recorded on the ex-dividend date for dividends
received in cash. Dividends received in additional securities are recorded on
the ex-dividend date in an amount equal to the value of the security on such
date.
Tax Matters and Distributions - The Fund's policy is to comply with the
provisions of the Internal Revenue Code (the Code) applicable to regulated
investment companies and to distribute to shareholders all of its net income,
including any net realized gain on investments. Accordingly, no provision for
federal income or excise tax is provided. The Fund files a tax return annually
using tax accounting methods required under provisions of the Code which may
differ from generally accepted accounting principles, the basis on which these
financial statements are prepared. Accordingly, the amount of net investment
income and net realized gain reported on these financial statements may differ
from that reported on the Fund's tax return and, consequently, the character
of distributions to shareholders reported in the financial highlights may
differ from that reported to shareholders on Form 1099-DIV. Foreign taxes have
been provided for on interest and dividend income earned on foreign
investments in accordance with the applicable country's tax rates and to the
extent unrecoverable are recorded as a reduction of investment income.
Distributions to shareholders are recorded on the ex-dividend date.
The Fund distinguishes between distributions on a tax basis and a financial
reporting basis and requires that only distributions in excess of tax basis
earnings and profits are reported in the financial statements as a return of
capital. Differences in the recognition or classification of income between
the financial statements and tax earnings and profits which result in
temporary over-distributions for financial statement purposes, are classified
as distributions in excess of net investment income or accumulated net
realized gains.
Multiple Classes of Shares of Beneficial Interest - The Fund offers Class A
and Class B shares. The two classes of shares differ in their respective
shareholder servicing agent, distribution and service fees. Shareholders of
each class also bear certain expenses that pertain only to that particular
class. All shareholders bear the common expenses of the Fund pro rata, based
on the average daily net assets of each class, without distinction between
share classes. Dividends are declared separately for each class. No class has
preferential dividend rights; differences in per share dividend rates are
generally due to differences in separate class expenses, including
distribution and shareholder service fees.
(3) Transactions with Affiliates
Investment Adviser - The Fund has an investment advisory agreement with
Massachusetts Financial Services Company (MFS) to provide overall investment
advisory and administrative services, and general office facilities. The
management fee, computed daily and paid monthly at an effective annual rate of
0.31% of average daily net assets, amounted to $1,587,720.
The Fund pays no compensation directly to its Trustees who are officers of the
investment adviser, or to officers of the Fund, all of whom receive
remuneration for their services to the Fund from MFS. Certain of the officers
and Trustees of the Fund are officers or directors of MFS, MFS Fund
Distributors, Inc. (MFD) and MFS Service Center, Inc. (MFSC). The Fund has an
unfunded defined benefit plan for all its independent Trustees and Mr. Bailey.
Included in Trustees' compensation is a net periodic pension expense of $9,072
for the six months ended May 31, 1995.
Distributor - MFD, a wholly owned subsidiary of MFS, as distributor, received
$19,127 as its portion of the sales charge on sales of Class A shares of the
Fund. The Trustees have adopted separate distribution plans for Class A and
Class B shares pursuant to Rule 12b-1 of the Investment Company Act of 1940 as
follows:
The Class A Distribution Plan provides that the Fund will pay MFD up to 0.35%
per annum of its average daily net assets attributable to Class A shares in
order that MFD may pay expenses on behalf of the Fund related to the
distribution and servicing of its shares. These expenses include a service fee
to each securities dealer that enters into a sales agreement with MFD of up to
0.25% per annum of the Fund's average daily net assets attributable to Class A
shares which are attributable to that securities dealer, a distribution fee to
MFD of up to 0.10% per annum of the Fund's average daily net assets
attributable to Class A shares, commissions to dealers and payments to MFD
wholesalers for sales at or above a certain dollar level, and other such
distribution-related expenses that are approved by the Fund. MFD is not
imposing the 0.10% distribution fee (amounting to $489,152 for the six months
ended May 31, 1995) for an indefinite period. Fees incurred under the
distribution plan during the six months ended May 31, 1995 were 0.35% of
average daily net assets attributable to Class A shares on an annualized basis
and amounted to $1,435,368 (of which MFD retained $290,803).
The Class B Distribution Plan provides that the Fund will pay MFD a monthly
distribution fee, equal to 0.75% per annum, and a quarterly service fee of up
to 0.25% per annum, of the Fund's average daily net assets attributable to
Class B shares. MFD will pay to each securities dealer that enters into a
sales agreement with MFD all or a portion of the service fee attributable to
Class B shares. The service fee is intended to be additional consideration for
services rendered by the dealer with respect to Class B shares. Fees incurred
under the distribution plan during the six months ended May 31, 1995 were
1.00% of average daily net assets attributable to Class B shares on an
annualized basis and amounted to $55,430 (of which MFD retained $442).
A contingent deferred sales charge is imposed on shareholder redemptions of
Class A shares, on purchases of $1 million or more, in the event of a
shareholder redemption within twelve months following the share purchase. A
contingent deferred sales charge is imposed on shareholder redemptions of
Class B shares in the event of a shareholder redemption within six years of
purchase. MFD receives all contingent deferred sales charges. Contingent
deferred sales charges imposed during the six months ended May 31, 1995 were
$1,089 and $14,011 for Class A and Class B shares, respectively.
Shareholder Servicing Agent - MFSC, a wholly owned subsidiary of MFS, earned
$661,761 and $12,195 for Class A and Class B shares, respectively, for its
services as shareholder servicing agent. The fee is calculated as a percentage
of the average daily net assets of each class of shares at an effective annual
rate of up to 0.15% and up to 0.22% attributable to Class A and Class B
shares, respectively.
(4) Portfolio Securities
Purchases and sales of investments, other than U.S. government securities,
purchased option transactions and short-term obligations, aggregated
$165,325,249 and $250,844,256, respectively.
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 $759,792,644
------------
Gross unrealized appreciation $304,440,549
Gross unrealized depreciation (45,826,219)
------------
Net unrealized appreciation $258,614,330
------------
(5) Shares of Beneficial Interest
The Fund's Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest (without par
value). Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
Class A Shares Six Months Ended Year Ended
May 31, 1995 November 30, 1994
------------------------------ -------------------------------
Shares Amount Shares Amount
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 6,657,955 $ 66,039,229 9,138,166 $ 98,219,747
Shares issued to shareholders
in reinvestment of distributions 8,387,123 80,181,248 12,196,320 138,428,629
Shares reacquired (10,911,955) (108,643,751) (15,368,839) (165,721,705)
----------- ------------ ----------- ------------
Net increase 4,133,123 $ 37,576,726 5,965,647 $ 70,926,671
----------- ------------ ----------- ------------
Class B Shares Six Months Ended Year Ended
May 31, 1995 November 30, 1994
------------------------------ -------------------------------
Shares Amount Shares Amount
------------------------------------------------------------------------------------------------------
Shares sold 843,299 $ 8,426,781 2,335,727 $24,852,595
Shares issued to shareholders
in reinvestment of distributions 139,032 1,309,680 29,894 338,041
Shares reacquired (743,985) (7,078,145) (1,604,821) (17,138,152)
----------- ------------ ----------- ------------
Net increase 238,346 $ 2,658,316 760,800 $ 8,052,484
----------- ------------ ----------- ------------
</TABLE>
(6) Line of Credit
The Fund entered into an agreement which enables it to participate with other
funds managed by MFS, or an affiliate of MFS, in an unsecured line of credit
with a bank which permits borrowings up to $350 million, collectively.
Borrowings may be made to temporarily finance the repurchase of Fund shares.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the bank's base rate. In addition, a commitment fee, based on the average
daily unused portion of the line of credit, is allocated among the
participating funds at the end of each quarter. The commitment fee allocated
to the Fund for the six months ended May 31, 1995 was $7,612.
(7) Restricted Securities
The Fund may invest not more than 15% of its total net assets in securities
which are subject to legal or contractual restrictions on resale. At May 31,
1995, the Fund owned the following restricted security (constituting 0.01% of
net assets) which may not be publicly sold without registration under the
Securities Act of 1933. The Fund does not have the right to demand that this
security be registered. The value of this security is determined in good faith
by or at the direction of the Trustees.
Date of
Description Acquisition Shares Cost Value
------------------------------------------------------------------------------
Phar-Mor, Inc. 4/22/92 70,000 $2,030,000 $ 70,000
---------
---------------------------------------------
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>
THE MFS FAMILY OF FUNDS(R)
Americas Oldest Mutual Fund Group
<TABLE>
The members of the MFS Family of Funds are grouped below according to the types of securities
in their portfolios. For free prospectuses containing more complete information, including the
exchange privilege and all charges and expenses, please contact your financial adviser or call
MFS at 1-800-637-2929 any business day from 9 a.m. to 5 p.m. Eastern time (or, leave a message
any time). This material should be read carefully before investing or sending money.
<CAPTION>
STOCK LIMITED MATURITY BOND
<S> <C>
Massachusetts Investors Trust MFS(R) Government Limited Maturity Fund
Massachusetts Investors Growth Stock Fund MFS(R) Limited Maturity Fund
MFS(R) Capital Growth Fund MFS(R) Municipal Limited Maturity Fund
MFS(R) Emerging Growth Fund
MFS(R) Gold & Natural Resources Fund WORLD
MFS(R) Growth Opportunities Fund MFS(R) World Asset Allocation Fund
MFS(R) Managed Sectors Fund MFS(R) World Equity Fund
MFS(R) OTC Fund MFS(R) World Governments Fund
MFS(R) Research Fund MFS(R) World Growth Fund
MFS(R) Value Fund MFS(R) World Total Return Fund
STOCK AND BOND NATIONAL TAX-FREE BOND
MFS(R) Total Return Fund MFS(R) Municipal Bond Fund
MFS(R) Utilities Fund MFS(R) Municipal High Income Fund
(closed to new investors)
BOND MFS(R) Municipal Income Fund
MFS(R) Bond Fund
MFS(R) Government Mortgage Fund STATE TAX-FREE BOND
MFS(R) Government Securities Fund Alabama, Arkansas, California,
MFS(R) High Income Fund Florida, Georgia, Louisiana, Maryland,
MFS(R) Intermediate Income Fund Massachusetts, Mississippi, New York,
MFS(R) Strategic Income Fund North Carolina, Pennsylvania, South
(formerly MFS(R) Income & Opportunity Fund) Carolina, Tennessee, Texas, Virginia,
Washington, West Virginia
MONEY MARKET
MFS(R) Cash Reserve Fund
MFS(R) Government Money Market Fund
MFS(R) Money Market Fund
</TABLE>
<PAGE>
MASSACHUSETTS -------------
INVESTORS GROWTH [LOGO: NUMBER 1 DALBAR BULK RATE
STOCK FUND TOP RATED SERVICE] U.S. POSTAGE
PAID
500 Boylston Street PERMIT #55638
Boston, MA 02116 BOSTON, MA
-------------
[LOGO: M F S
THE FIRST NAME IN MUTUAL FUNDS]
MIG-3 7/95 48M 13/213
