MASSACHUSETTS INVESTORS GROWTH FUND
500 BOYLSTON STREET o BOSTON o MASSACHUSETTS 02116-3741
617 o 954-5000
July 19, 1996
VIA EDGAR
- ---------
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, DC 20549
Re: Massachusetts Investors Growth Stock Fund (File No. 811-859)
Ladies and Gentlemen:
Pursuant to the requirements of Section 30(b) of the Investment Company Act
of 1940 and Rule 30b2-1 thereunder, we hereby file a copy of the Seminnual
Report to Shareholders dated May 31, 1996 of Massachusetts Investors Growth
Stock Fund.
Very truly yours,
APRIL ANDERSON
April Anderson
Senior Production Editor
<PAGE>
[MFS LOGO] SEMIANNUAL REPORT
THE FIRST NAME IN MUTUAL FUNDS MAY 31, 1996
MASSACHUSETTS INVESTORS GROWTH STOCK FUND
[Cover: A Photo of Two Men in a Window]
<PAGE>
MASSACHUSETTS INVESTORS GROWTH STOCK FUND
TRUSTEES
A. Keith Brodkin* - Chairman and President
Richard B. Bailey* - Private Investor; Former Chairman and Director (until
1991), Massachusetts Financial Services Company; Director, Cambridge Bancorp;
Director, Cambridge Trust Company
Peter G. Harwood - Private Investor
J. Atwood Ives - Chairman and Chief Executive Officer, Eastern Enterprises
Lawrence T. Perera - Partner, Hemenway & Barnes
William J. Poorvu - Adjunct Professor, Harvard University Graduate School of
Business Administration
Charles W. Schmidt - Private Investor
Arnold D. Scott* - Senior Executive Vice President, Director and Secretary,
Massachusetts Financial Services Company
Jeffrey L. Shames* - President and Director, Massachusetts Financial Services
Company
Elaine R. Smith - Independent Consultant
David B. Stone - Chairman, North American Management Corp. (investment
advisers)
INVESTMENT ADVISER
Massachusetts Financial Services Company
500 Boylston Street
Boston, MA 02116-3741
DISTRIBUTOR
MFS Fund Distributors, Inc.
500 Boylston Street
Boston, MA 02116-3741
PORTFOLIO MANAGERS
George F. Bennett, Jr.*
Christian Felipe*
TREASURER
W. Thomas London*
ASSISTANT TREASURER
James O. Yost*
SECRETARY
Stephen E. Cavan*
ASSISTANT SECRETARY
James R. Bordewick, Jr.*
CUSTODIAN
State Street Bank and Trust Company
INVESTOR INFORMATION
For MFS stock and bond market outlooks, call toll free: 1-800-637-4458
anytime from a touch-tone telephone.
For information on MFS mutual funds, call your financial adviser or, for an
information kit, call toll free: 1-800-637-2929 any business day from 9 a.m. to
5 p.m. Eastern time (or leave a message anytime).
INVESTOR SERVICE
MFS Service Center, Inc.
P.O. Box 2281
Boston, MA 02107-9906
For general information, call toll free: 1-800-225-2606 any business day from
8 a.m. to 8 p.m. Eastern time.
For service to speech- or hearing-impaired, call toll free: 1-800-637-6576 any
business day from 9 a.m. to 5 p.m. Eastern time. (To use this service, your
phone must be equipped with a Telecommunications Device for the Deaf.)
For share prices, account balances and exchanges, call toll free: 1-800-MFS-TALK
(1-800-637-8255) anytime from a touch-tone telephone.
TOP-RATED SERVICE
For the second year in a row, MFS earned a #1 ranking in DALBAR, Inc.'s
Broker/Dealer Survey, Main Office Operations Service Quality category. The firm
achieved a 3.49 overall score - on a scale of 1 to 4 - in the 1995 survey. A
total of 71 firms responded, offering input on the quality of service they
receive from 36 mutual fund companies nationwide. The survey contained questions
about service quality in 17 categories, including "knowledge of phone service
contacts," "accuracy of transaction processing," and "overall ease of doing
business with the firm."
*Affiliated with the Investment Adviser
<PAGE>
LETTER TO SHAREHOLDERS
Dear Shareholders:
The favorable environment of generally rising stock prices that established
growth companies enjoyed during the six months ended May 31, 1996 helped Class A
shares of the Fund provide a total return of 13.64%, while Class B shares
returned 13.13%. These returns assume the reinvestment of distributions but
exclude the effects of any sales charges and exceeded the 11.78% return for the
Standard & Poor's 500 Composite Index (the S&P 500), a popular, unmanaged index
of common stock performance. A discussion of the Fund's performance during this
reporting period may be found in the Portfolio Performance and Strategy section
of this letter.
Economic Environment
Real (inflation-adjusted) economic growth in the first quarter of 1996 was 2.3%
on an annualized basis, and it appears that second-quarter growth could be even
stronger. Thus, real growth in gross domestic product has started the year at a
rate exceeding our expectations. While we continue to believe that growth from
quarter to quarter will be uneven, it is now our expectation that growth for all
of 1996 could exceed 2-1/2%. Although individual consumers appear to be carrying
an excessive debt load, the consumer sector itself, which represents two-thirds
of the economy, continues to be impressive as the auto and housing markets
remain resilient. Consumer spending has also been positively impacted by
widespread job growth. At the same time, however, the economies of Europe and
Japan continue to be in the doldrums, weakening U.S. export markets while
subduing the capital spending plans of American corporations. Finally, due to
the pickup in economic activity and increasing job growth, it appears that
inflation may accelerate slightly this year, and the Federal Reserve Board is
expected to continue its diligent anti-inflationary stance.
Stock Market
While we do not expect the U.S. stock market to match the extraordinary
performance of 1995, we continue to be positive about the equity market this
year. Although we believe the equity market represents fair value at current
levels, the expected slowdown in the growth of corporate earnings and the
increases in interest rates experienced so far this year raise near-term
concerns. Further increases in interest rates, and an acceleration of inflation
coupled with an additional slowdown in corporate earnings growth, could have a
negative effect on the stock market. However, to the extent that some earnings
disappointments are taken as a sign that the economy is not overheating, this
may prove beneficial for the longer-term health of the equity market. We
continue to believe that many of the technology-driven productivity gains that
U.S. companies have made in recent years will continue to enhance corporate
America's competitiveness and profitability. Therefore, while we have some
near-term concerns, we remain quite constructive on the long-term viability of
the equity market.
1
<PAGE>
Portfolio Performance and Strategy
Over the past six months, the Fund has made some strategic shifts in reaction to
the strong financial markets and changing economic environment. First, the
number of individual stocks in the portfolio has virtually doubled. This has
resulted from our prudently paring back positions in companies whose stocks had
risen dramatically and reinvesting the proceeds in other companies that had what
we felt were favorable outlooks. The effect has been to greatly diversify the
number of industries and sectors in the Fund to try and take advantage of what
we see as many new and vibrant opportunities in today's economy.
For example, within the technology sector we have established positions in
companies that we feel will be leaders in the next major direction for the
computer industry: the Internet. Many of these companies, such as Microsoft and
Oracle, were already in the portfolio, but other companies new to the Fund, such
as Sun Microsystems and U.S. Robotics, are aggressively exploiting this market,
and we believe they will continue to do so throughout the decade.
To keep the technology weighting at a reasonable level, it has been
necessary to pare back certain stocks that do not meet the criteria established
by the Fund. As such, semiconductor stocks were trimmed back during the period
because the capital spending binge they have engaged in over the past three
years has led to an oversupply of primarily commodity components, with an
attendant drop in profitability for the sector. Nonetheless, certain
semiconductor stocks such as Intel and LSI Logic were maintained and could, in
our opinion, rebound due to the proprietary nature of their business.
Perhaps the biggest change in the Fund has been the addition of various
media companies. The Telecommunication Act of 1996 greatly changed the landscape
for public broadcasting companies. As a result, both radio and television
companies have seen their ownership rules relaxed, leading to an industry
consolidation not seen in many years. The Fund has been an owner of the
acquiring companies in this process, since many of the purchased properties have
been privately held. Two leaders in this field are Clear Channel Communications
and Infinity Broadcasting.
A third area of change has been our approach to the health care area. We
have long been believers in managed care. However, fierce price competition has
held back earnings growth to less-than-expected levels. Still, this industry is
consolidating, which we believe could lead to improved results over time. We are
therefore maintaining positions in United Healthcare and Pacificare, two health
maintenance organizations (HMOs) with dominant market positions. For the past
couple of years we had avoided many HM O providers, such as drug companies and
service operators, due to pricing pressure being exerted by HMOs. Today, we find
that their valuations reflect our
2
<PAGE>
concerns, and many of these companies now appear to be better positioned for
future growth. HealthSouth Rehabilitation, Johnson & Johnson, and Health
Management Associates are examples of companies we own that have learned to
adapt to the changing health care environment.
As we enter the second half of 1996, we feel that the backdrop for
financial assets is generally favorable and that valuations appear reasonable
given the steady economic environment. Accordingly, we believe the Fund's
quality growth stocks could continue to be rewarded for their superior earnings
growth.
We appreciate your support and welcome any questions or comments you may
have.
Respectfully,
[Signature of [Signature of [Signature of
A. Keith Brodkin] George F. Bennett, Jr.] Christian Felipe]
A. Keith Brodkin George F. Bennett, Jr. Christian Felipe
Chairman and President Portfolio Manager Portfolio Manager
June 10, 1996
PORTFOLIO MANAGER PROFILES
George Bennett began his career at MFS in 1969 as an industry specialist and
was promoted to Assistant Vice President - Investments in 1973, Vice
President - Investments in 1979, and Senior Vice President in 1986. He became
Portfolio Manager of Massachusetts Investors Growth Stock Fund in 1993. In
1995, he was named Director of Portfolio Managers.
On May 1, 1995, Christian Felipe joined George Bennett as a Portfolio Manager
of the Fund. Mr. Felipe 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. In 1996, he was named Senior
Vice President.
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.
3
<PAGE>
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* +13.64% +36.70% +98.09% +229.72%
- --------------------------------------------------------------------------------
Average Annual Total Return* -- +36.70% +14.65% +12.67%
- --------------------------------------------------------------------------------
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, 1996, were +22.98%, +12.03% and +11.41%,
respectively.
Class B Investment Results
(net asset value change including reinvested distributions) 9/07/93+-
6 Months 1 Year 5/31/96
================================================================================
Cumulative Total Return++ +13.13% +35.45% +40.94%
- --------------------------------------------------------------------------------
Average Annual Total Return++ -- +35.45% +13.39%
- --------------------------------------------------------------------------------
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 contingent deferred sales charge (CDSC) of 4% for
the 1-year period ended March 31, 1996, and 3% for the period from September 7,
1993+ to March 31, 1996, were +25.27% and +9.36%, respectively.
All results represent past performance and are not an indication of future
results. Investment return and principal value will fluctuate, and shares, when
redeemed, may be worth more or less than their original cost.
* 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.
4
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED) - May 31, 1996
Common Stocks - 96.0%
================================================================================
Issuer Shares Value
- --------------------------------------------------------------------------------
U.S. Stocks - 94.8%
Airlines - 0.3%
Southwest Airlines Co. 150,000 $ 4,106,250
- --------------------------------------------------------------------------------
Apparel and Textiles - 0.9%
Designer Holdings Ltd.* 8,500 $ 261,375
Fila Holdings, ADR 50,000 4,331,250
Nike, Inc., "B" 70,000 7,026,250
--------------
$ 11,618,875
- --------------------------------------------------------------------------------
Business Machines - 2.1%
Affiliated Computer Services, Inc.* 150,000 $ 7,200,000
Sun Microsystems, Inc.* 325,000 20,353,125
--------------
$ 27,553,125
- --------------------------------------------------------------------------------
Business Services - 5.4%
Alco Standard Corp. 330,000 $ 20,625,000
CUC International, Inc.* 500,000 18,500,000
Ceridian Corp.* 175,000 9,253,125
Computer Sciences Corp.* 125,000 9,859,375
DST Systems, Inc.* 55,000 1,918,125
First USA Paymentech, Inc.* 5,800 268,975
Intellequest Information Group, Inc.* 11,300 364,425
Interim Services, Inc.* 170,000 8,075,000
--------------
$ 68,864,025
- --------------------------------------------------------------------------------
Cellular Telephones - 1.1%
AirTouch Communications, Inc.* 300,000 $ 9,562,500
Telephone & Data Systems, Inc. 115,000 5,016,875
--------------
$ 14,579,375
- --------------------------------------------------------------------------------
Computer Software - Personal Computers - 6.6%
Electronic Arts, Inc.* 150,800 $ 4,769,050
First Data Corp. 250,001 19,937,580
Microsoft Corp.* 502,300 59,648,125
--------------
$ 84,354,755
- --------------------------------------------------------------------------------
Computer Software - Systems - 14.7%
Adobe Systems, Inc. 224,800 $ 8,345,700
BMC Software, Inc.* 262,700 16,550,100
Cadence Design Systems, Inc.* 275,000 15,606,250
Computer Associates International, Inc. 715,000 52,016,250
Compuware Corp.* 475,000 18,643,750
Nova Corp.* 6,600 250,800
Oracle Corp.* 1,350,000 44,718,750
Sterling Software, Inc.* 50,000 4,025,000
Sybase, Inc.* 775,000 17,921,875
Synopsys, Inc.* 100,000 4,475,000
System Software Associates, Inc. 382,000 6,255,250
--------------
$ 188,808,725
- --------------------------------------------------------------------------------
Construction Services - 0.1%
Barnett, Inc.* 16,300 $ 391,200
- --------------------------------------------------------------------------------
5
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED) - continued
Common Stocks - continued
================================================================================
Issuer Shares Value
- --------------------------------------------------------------------------------
U.S. Stocks - continued
Consumer Goods and Services - 2.3%
Revlon, Inc., "A"* 100,000 $ 3,137,500
Service Corp. International 185,000 10,336,875
Tyco International Ltd. 425,000 16,787,500
--------------
$ 30,261,875
- --------------------------------------------------------------------------------
Electrical Equipment - 1.0%
General Electric Co. 150,000 $ 12,412,500
- --------------------------------------------------------------------------------
Electronics - 3.9%
Atmel Corp.* 450,000 $ 15,975,000
Intel Corp. 200,000 15,100,000
LSI Logic Corp.* 400,000 12,450,000
Tower Semiconductor Ltd.* 125,000 1,843,750
Xilinx, Inc.* 125,000 4,343,750
--------------
$ 49,712,500
- --------------------------------------------------------------------------------
Entertainment - 7.6%
American Radio Systems Corp., "A"* 50,000 $ 1,912,500
Chancellor Broadcast, "A"* 14,700 376,688
Clear Channel Communications, Inc.* 145,000 11,781,250
Disney (Walt) Co. 115,000 6,986,250
Harrah's Entertainment, Inc.* 1,060,000 35,642,500
Infinity Broadcasting Corp., "A"* 275,000 7,493,750
LIN Television Corp.* 233,700 7,478,400
Mattel, Inc. 210,000 5,722,500
Mirage Resorts, Inc.* 175,000 9,953,125
Viacom, Inc., "B"* 235,000 9,958,125
--------------
$ 97,305,088
- --------------------------------------------------------------------------------
Financial Institutions - 3.2%
Associates First Capital Corp., "A"* 78,800 $ 2,915,600
Federal Home Loan Mortgage Corp. 50,000 4,131,250
Franklin Resources, Inc. 400,000 23,450,000
MBNA Corp. 250,000 7,656,250
Merrill Lynch & Co., Inc. 25,000 1,618,750
Schwab (Charles) Corp. 30,000 727,500
--------------
$ 40,499,350
- --------------------------------------------------------------------------------
Insurance - 0.6%
Equitable of Iowa Cos 200,000 $ 7,375,000
- --------------------------------------------------------------------------------
Medical and Health Products - 4.4%
Alza Corp.* 140,000 $ 3,990,000
Boston Scientific Corp.* 130,000 5,573,750
Johnson & Johnson 250,000 24,343,750
Rhone Poulenc Rorer, Inc. 75,000 4,856,250
Schering Plough Corp. 300,000 17,587,500
--------------
$ 56,351,250
- --------------------------------------------------------------------------------
Medical and Health Technology and Services - 8.7%
Cardinal Health, Inc. 125,000 $ 7,984,375
Genesis Health Ventures, Inc.* 104,700 3,311,137
Health Management Assoc., Inc.* 195,000 6,727,500
Healthsource, Inc.* 65,100 1,472,887
6
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED) - continued
Common Stocks - continued
================================================================================
Issuer Shares Value
- --------------------------------------------------------------------------------
U.S. Stocks - continued
Medical and Health Technology and Services - continued
HealthSouth Rehabilitation Corp.* 550,000 $ 19,250,000
Lincare Holdings, Inc.* 153,700 5,802,175
Manor Care, Inc. 50,000 1,950,000
Owen Healthcare, Inc.* 62,800 1,146,100
Oxford Health Plans, Inc.* 15,100 713,475
Pacificare Health Systems, Inc., "B"* 280,000 23,170,000
St. Jude Medical, Inc.* 75,000 2,850,000
United Healthcare Corp. 625,000 34,296,875
Vivra, Inc.* 100,000 3,412,500
--------------
$ 112,087,024
- --------------------------------------------------------------------------------
Metals and Minerals - 0.3%
Nucor Corp. 75,000 $ 4,125,000
- --------------------------------------------------------------------------------
Oil Services - 0.3%
Schlumberger Ltd. 50,000 $ 4,168,750
- --------------------------------------------------------------------------------
Pollution Control - 1.0%
Sanifil, Inc.* 210,000 $ 9,423,750
WMX Technologies, Inc. 100,000 3,525,000
--------------
$ 12,948,750
- --------------------------------------------------------------------------------
Printing and Publishing - 3.2%
Gannett Co., Inc. 433,310 $ 30,223,373
Tribune Co., Inc. 150,000 11,118,750
--------------
$ 41,342,123
- --------------------------------------------------------------------------------
Restaurants and Lodging - 5.2%
HFS, Inc.* 533,900 $ 33,302,012
Marriott International, Inc. 261,000 12,397,500
Outback Steakhouse, Inc.* 50,000 1,893,750
Planet Hollywood International, "A"* 12,200 326,350
Promus Hotel Corp.* 704,100 19,362,750
--------------
$ 67,282,362
- --------------------------------------------------------------------------------
Special Products and Services - 0.1%
McDonald's Corp. 35,000 $ 1,684,375
- --------------------------------------------------------------------------------
Stores - 8.8%
AutoZone, Inc.* 315,000 $ 11,064,375
Bed Bath & Beyond, Inc.* 130,000 3,656,250
General Nutrition Cos., Inc.* 405,400 6,283,700
Gymboree Corp.* 150,000 5,100,000
Home Depot, Inc. 490,000 25,051,250
Micro Warehouse, Inc.* 550,000 21,450,000
Office Depot, Inc.* 814,500 20,871,562
Officemax, Inc.* 225,000 5,878,125
PetSmart, Inc.* 100,000 4,450,000
Saks Holdings, Inc.* 19,200 624,000
Sunglass Hut International, Inc.* 110,000 3,025,000
Thrifty Payless Holdings, Inc., "B"* 400,000 5,750,000
--------------
$ 113,204,262
- --------------------------------------------------------------------------------
7
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED) - continued
Common Stocks - continued
================================================================================
Issuer Shares Value
- --------------------------------------------------------------------------------
U.S. Stocks - continued
Supermarkets - 0.4%
Kroger Co.* 125,000 $ 4,906,250
- --------------------------------------------------------------------------------
Telecommunications - 10.6%
Brooks Fiber Properties, Inc.* 5,100 $ 172,125
Cabletron Systems, Inc.* 800,000 58,200,000
Cisco Systems, Inc.* 500,000 27,375,000
Glenayre Technologies, Inc.* 225,000 11,081,250
Lucent Technologies, Inc.* 225,000 8,550,000
Rogers Cantel Mobile Communications, "B"* 200,000 4,800,000
Shiva Corp.* 10,000 747,500
Sterling Commerce, Inc.* 5,000 219,375
Tellabs, Inc.* 30,000 1,935,000
U.S. Robotics Corp.* 245,000 22,478,750
United States Satellite Broadcasting
Co., Inc., "A" 8,200 287,000
--------------
$ 135,846,000
- --------------------------------------------------------------------------------
Utilities - Telephone - 2.0%
MCI Communications Corp. 875,000 $ 25,484,375
- --------------------------------------------------------------------------------
Total U.S. Stocks $1,217,273,164
- --------------------------------------------------------------------------------
Foreign Stocks - 1.2%
Singapore - 0.1%
Singapore Press Holdings
(Publishing - Newspaper) 50,000 $ 938,033
- --------------------------------------------------------------------------------
Sweden - 1.1%
Astra AB, Free, "B" (Pharmaceuticals) 305,000 $ 13,798,539
- --------------------------------------------------------------------------------
Total Foreign Stocks $ 14,736,572
- --------------------------------------------------------------------------------
Total Common Stocks (Identified Cost, $905,469,487) $1,232,009,736
- --------------------------------------------------------------------------------
Convertible Preferred Stock - 1.0%
================================================================================
Cellular Telephones
Cellular Communications
(Identified Cost, $5,703,270) 244,130 $ 13,121,988
- --------------------------------------------------------------------------------
Short-Term Obligations - 4.5%
================================================================================
Principal Amount
(000 Omitted)
- --------------------------------------------------------------------------------
Federal Home Loan Bank, due 6/03/96 $ 9,425 $ 9,422,276
Federal Home Loan Mortgage Corp., due 6/05/96 7,000 6,995,956
Federal Home Loan Mortgage Corp., due 6/14/96 7,400 7,386,078
Federal Home Loan Mortgage Corp., due 6/17/96 5,680 5,666,873
Federal National Mortgage Assn., due 6/12/96 1,390 1,387,791
Federal National Mortgage Assn., due 6/13/96 12,400 12,378,383
Ford Motor Credit Corp., due 6/06/96 6,340 6,335,403
Raytheon Co., due 6/07/96 8,670 8,662,414
- --------------------------------------------------------------------------------
Total Short-Term Obligations, at
Amortized Cost and Value $ 58,235,174
- --------------------------------------------------------------------------------
Total Investments (Identified Cost, $969,407,931) $1,303,366,898
Other Assets, Less Liabilities - (1.5)% (19,661,531)
================================================================================
Net Assets - 100.0% $1,283,705,367
- --------------------------------------------------------------------------------
* Non-income producing security.
See notes to financial statements
8
<PAGE>
FINANCIAL STATEMENTS
Statement of Assets and Liabilities (Unaudited)
- --------------------------------------------------------------------------------
May 31, 1996
- --------------------------------------------------------------------------------
Assets:
Investments, at value (identified cost, $969,407,931) $ 1,303,366,898
Cash 27,497
Receivable for investments sold 2,729,521
Receivable for Fund shares sold 449,504
Dividends receivable 259,850
Other assets 12,287
---------------
Total assets $ 1,306,845,557
---------------
Liabilities:
Distributions payable $ 429
Payable for investments purchased 21,680,424
Payable for Fund shares reacquired 841,316
Payable to affiliates -
Management fee 10,306
Shareholder servicing agent fee 4,467
Distribution fee 308,367
Accrued expenses and other liabilities 294,881
---------------
Total liabilities $ 23,140,190
---------------
Net assets $ 1,283,705,367
---------------
Net assets consist of:
Paid-in capital $ 764,825,555
Unrealized appreciation on investments and translation
of assets and liabilities in foreign currencies 333,958,967
Accumulated undistributed net realized gain on
investments and foreign currency transactions 185,147,008
Accumulated net investment loss (226,163)
---------------
Total $ 1,283,705,367
===============
Shares of beneficial interest outstanding 104,158,172
===============
Class A shares:
Net asset value and redemption price per share
(net assets of $1,262,006,445 / 102,361,984 shares of
beneficial interest outstanding) $12.33
======
Offering price per share (100/94.25) $13.08
======
Class B shares:
Net asset value and offering price per share
(net assets of $21,698,922 / 1,796,188 shares of
beneficial interest outstanding) $12.08
======
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
9
<PAGE>
FINANCIAL STATEMENTS - continued
Statement of Operations (Unaudited)
================================================================================
Six Months Ended May 31, 1996
- --------------------------------------------------------------------------------
Net investment income:
Income -
Interest $ 2,186,265
Dividends 1,838,228
------------
Total investment income $ 4,024,493
------------
Expenses -
Management fee $ 1,796,784
Trustees' compensation 32,294
Shareholder servicing agent fee (Class A) 755,331
Shareholder servicing agent fee (Class B) 19,491
Distribution and service fee (Class A) 1,123,078
Distribution and service fee (Class B) 88,596
Custodian fee 243,494
Postage 62,504
Printing 33,044
Legal fees 997
Miscellaneous 204,259
------------
Total expenses $ 4,359,872
Fees paid indirectly (171,071)
------------
Net expenses $ 4,188,801
------------
Net investment loss $ (164,308)
------------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $185,760,214
Foreign currency transactions (39,298)
------------
Net realized gain on investments and
foreign currency transactions $185,720,916
------------
Change in unrealized depreciation on investments $(31,479,866)
------------
Net realized and unrealized gain
on investments and foreign currency $154,241,050
------------
Increase in net assets from operations $154,076,742
------------
See notes to financial statements
10
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
================================================================================
Six Months Ended Year Ended
May 31, 1996 November 30,
(Unaudited) 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment loss $ (164,308) $ (986,154)
Net realized gain on investments and
foreign currency transactions 185,720,916 155,044,848
Net unrealized gain (loss) on investments and
foreign currency (31,479,866) 150,833,517
--------------- ---------------
Increase in net assets from operations $ 154,076,742 $ 304,892,211
--------------- ---------------
Distributions declared to shareholders -
From net realized gain on investments and foreign
currency transactions (Class A) $ (151,666,814) $ (100,591,643)
From net realized gain on investments and foreign
currency transactions (Class B) (1,895,891) (1,381,907)
--------------- ---------------
Total distributions declared to shareholders $ (153,562,705) $ (101,973,550)
--------------- ---------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 54,345,770 $ 141,763,381
Net asset value of shares issued to shareholders
in reinvestment of distributions 121,741,927 81,493,960
Cost of shares reacquired (87,716,529) (218,071,853)
--------------- ---------------
Increase in net assets from
Fund share transactions $ 88,371,168 $ 5,185,488
--------------- ---------------
Total increase in net assets $ 88,885,205 $ 208,104,149
Net assets:
At beginning of period 1,194,820,162 986,716,013
--------------- ---------------
At end of period (including accumulated
net investment loss of $226,163 and
$61,855, respectively) $ 1,283,705,367 $ 1,194,820,162
=============== ===============
</TABLE>
See notes to financial statements
11
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights
=====================================================================================================================
Six Months
Ended
May 31, Year Ended November 30,
1996 --------------------------------------------------------
(Unaudited) 1995 1994 1993 1992 1991
- ---------------------------------------------------------------------------------------------------------------------
Class A
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $ 12.51 $ 10.48 $ 12.97 $ 12.15 $ 10.87 $ 8.48
-------- -------- -------- -------- -------- --------
Income from investment operations# -
Net investment income (loss) $-- $ (0.01) $ (0.01) $ (0.01) $ (0.03) $ 0.01
Net realized and unrealized gain
(loss) on investments and
foreign currency transactions 1.43 3.12 (0.49) 1.55 2.07 2.93
-------- -------- -------- -------- -------- --------
Total from investment operations $ 1.43 $ 3.11 $ (0.50) $ 1.54 $ 2.04 $ 2.94
-------- -------- -------- -------- -------- --------
Less distributions declared to shareholders -
From net investment income $ -- $ -- $ -- $ -- $-- $ (0.03)
From net realized gain on investments
and foreign currency transactions (1.61) (1.08) (1.99) (0.72) (0.76) (0.52)
-------- -------- -------- -------- -------- --------
Total distributions declared
to shareholders $ (1.61) $ (1.08) $ (1.99) $ (0.72) $ (0.76) $ (0.55)
-------- -------- -------- -------- -------- --------
Net asset value - end of period $ 12.33 $ 12.51 $ 10.48 $ 12.97 $ 12.15 $ 10.87
-------- -------- -------- -------- -------- --------
Total return+++ 13.64%++ 32.91% (5.00)% 13.43% 19.35% 36.56%
Ratios (to average net assets)/Supplemental data:
Expenses## 0.72%+ 0.73% 0.72% 0.71% 0.67% 0.63%
Net investment income (loss) (0.01)%+ (0.08)% (0.06)% (0.19)% (0.24)% 0.14%
Portfolio turnover 57% 46% 56% 52% 16% 39%
Average commission rate### $ 0.0541 -- -- -- -- --
Net assets at end of period (000,000 omitted) $ 1,262 $ 1,180 $ 977 $ 1,132 $ 1,070 $ 950
<FN>
+ Annualized.
++ Not annualized.
# Per share data for the periods subsequent to November 30, 1992 is based on average shares outstanding.
## For fiscal years ending after September 1, 1995, the Fund's expenses are calculated without reduction for fees paid
indirectly.
### Average commission rate is calculated for funds with fiscal years beginning on or after September 1, 1995.
+++ Total returns for Class A shares do not include the applicable sales charge (except for reinvested dividends prior to
March 1, 1991). If the charge had been included, the results would have been lower.
</FN>
</TABLE>
See notes to financial statements
12
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights - continued
=========================================================================================================
Year Ended November 30,
---------------------------------------------------------
1990 1989 1988 1987 1986
- ---------------------------------------------------------------------------------------------------------
Class A
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $ 10.70 $ 8.39 $ 9.05 $ 9.69 $ 10.68
-------- -------- -------- -------- --------
Income from investment operations -
Net investment income $ 0.05 $ 0.09 $ 0.12 $ 0.18 $ 0.20
Net realized and unrealized gain
(loss) on investments and
foreign currency transactions (1.02) 3.14 0.64 (0.68) 1.99
-------- -------- -------- -------- --------
Total from investment operations $ (0.97) $ 3.23 $ 0.76 $ (0.50) $ 2.19
-------- -------- -------- -------- --------
Less distributions declared to shareholders -
From net investment income $ (0.05) $ (0.08) $ (0.15) $ (0.14) $ (0.20)
From net realized gain on investments
and foreign currency transactions (1.20) (0.84) (1.27) -- (2.98)
-------- -------- -------- -------- --------
Total distributions declared
to shareholders $ (1.25) $ (0.92) $ (1.42) $ (0.14) $ (3.18)
-------- -------- -------- -------- --------
Net asset value - end of period $ 8.48 $ 10.70 $ 8.39 $ 9.05 $ 9.69
======== ======== ======== ======== ========
Total return+++ (10.27)% 42.14% 8.21% (5.57)% 20.30%
Ratios (to average net assets)/Supplemental data:
Expenses 0.53% 0.54% 0.58% 0.50% 0.50%
Net investment income 0.55% 0.91% 1.27% 1.60% 1.62%
Portfolio turnover 44% 32% 75% 66% 77%
Net assets at end of period (000,000 omitted) $ 749 $ 907 $ 735 $ 774 $ 899
<FN>
+++ Total returns for Class A shares do not include the applicable sales charge (except for reinvested dividends prior to
March 1, 1991). If the charge had been included, the results would have been lower.
</FN>
</TABLE>
See notes to financial statements
13
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights - continued
=======================================================================================
Six Months
Ended
May 31, Year Ended November 30,
1996 ---------------------------
(Unaudited) 1995 1994 1993*
- ---------------------------------------------------------------------------------------
Class B
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $ 12.26 $10.35 $12.93 $12.91
-------- ------ ------ ------
Income from investment operations# -
Net investment loss $ (0.05) $(0.11) $(0.09) $(0.01)
Net realized and unrealized gain (loss)
on investments and foreign
currency transactions 1.41 3.10 (0.50) 0.03
-------- ------ ------ ------
Total from investment operations $ 1.36 $ 2.99 $(0.59) $ 0.02
-------- ------ ------ ------
Less distributions declared to shareholders
from net realized gain on investments
and foreign currency transactions $ (1.54) $(1.08) $(1.99) $ --
-------- ------ ------ ------
Net asset value - end of period $ 12.08 $12.26 $10.35 $12.93
======== ====== ====== ======
Total return 13.13%++ 32.09% (5.82)% 0.70%+
Ratios (to average net assets)/Supplemental data:
Expenses## 1.62%+ 1.63% 1.60% 1.49%+
Net investment loss (0.92)%+ (0.98)% (0.87)% (0.99)%+
Portfolio turnover 57% 46% 56% 52%
Average commission rate### $ 0.0541 -- -- --
Net assets at end of period (000,000 omitted) $ 22 $ 14 $ 9 $ 2
<FN>
* For the period from the commencement of offering of Class B shares, September 7, 1993 to
November 30, 1993.
+ Annualized.
++ Not annualized.
# Per share data for the periods subsequent to November 30, 1992 is based on average shares
outstanding.
## For fiscal years ending after September 1, 1995, the Fund's expenses are calculated without
reduction for fees paid indirectly.
### Average commission rate is calculated for funds with fiscal years beginning on or after
September 1, 1995.
</FN>
</TABLE>
See notes to financial statements
14
<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
General - The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Investment Valuations - 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. Forward contracts are valued on
the basis of valuations furnished by dealers or by a pricing service with
consideration to factors such as maturity and other market data, without
exclusive reliance upon exchange or over-the-counter prices. Short-term
obligations, which mature in 60 days or less, are valued at amortized cost,
which approximates market value. Non-U.S. dollar denominated short-term
obligations are valued at amortized cost as calculated in the base currency and
translated into U.S. dollars at the closing daily exchange rate. 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.
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. Dividend income is recorded on the ex-dividend date for dividends
received in cash. Dividend payments received in additional securities are
recorded on the ex-dividend date in an amount equal to the value of the security
on such date.
Fees Paid Indirectly - The Fund's custodian bank calculates its fee based on the
Fund's average daily net assets. The fee is reduced according to a fee
arrangement, which provides for custody fees to be reduced based on a formula
developed to measure the value of cash deposited with the custodian by the Fund.
This amount is shown as a reduction of expenses on the Statement of Operations.
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - continued
Tax Matters and Distributions - The Fund's policy is to comply with the
provisions of the Internal Revenue Code (the Code) applicable to regulated
investment companies and to distribute to shareholders all of its taxable
income, including any net realized gain on investments. Accordingly, no
provision for federal income or excise tax is provided. The Fund files a tax
return annually using tax accounting methods required under provisions of the
Code which may differ from generally accepted accounting principles, the basis
on which these financial statements are prepared. Accordingly, the amount of net
investment income and net realized gain reported on these financial statements
may differ from that reported on the Fund's tax return, and consequently, the
character of distributions to shareholders reported in the financial highlights
may differ from that reported to shareholders on Form 1099-DIV. 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 tax return of
capital. Differences in the recognition or classification of income between the
financial statements and tax earnings and profits which result in temporary
over-distributons 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 both Class A
and Class B shares. The two classes of shares differ in their respective
shareholder servicing agent, distribution and service fees. All shareholders
bear the common expenses of the Fund pro rata, based on the average daily net
assets of each class, without distinction between share classes. Dividends are
declared separately for each class. No class has preferential dividend rights;
differences in per share dividend rates are generally due to differences in
separate class expenses.
(3) Transactions with Affiliates
Investment Adviser - The Fund has an investment advisory agreement with
Massachusetts Financial Services Company (MFS) to provide overall investment
advisory and administrative services, and general office facilities. The
management fee is computed daily and paid monthly at an effective annual rate of
0.30% of average daily net assets.
The Fund pays no compensation directly to its Trustees who are officers of the
investment adviser, or to officers of the Fund, all of whom receive remuneration
for their services to the Fund from MFS. Certain of the officers and Trustees of
the Fund are officers or directors of MFS, MFS Fund Distributors, Inc. (MFD) and
MFS Service Center, Inc. (MFSC). The Fund has an unfunded defined benefit plan
for all of its independent Trustees and Mr. Bailey. Included in Trustees'
compensation is a net periodic pension expense of $11,264 for the six months
ended May 31, 1996.
16
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - continued
Distributor - MFD, a wholly owned subsidiary of MFS, as distributor, received
$23,629 for the six months ended May 31, 1996, as its portion of the sales
charge on sales of Class A shares of the Fund.
The Trustees have adopted separate distribution plans for Class A 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 retains the service fee for accounts
not attributable to a securities dealer which amounted to $334,802 for the six
months ended May 31, 1996. Payment of the 0.10% per annum Class A distribution
fee will commence on such date as the Trustees of the Trust may determine. Fees
incurred under the distribution plan during the six months ended May 31, 1996
were 0.19% of average daily net assets attributable to Class A shares on an
annualized basis.
The Class B distribution plan provides that the Fund will pay MFD a distribution
fee of 0.75% per annum, and a service fee of up to 0.25% per annum, of the
Fund's average daily net assets attributable to Class B shares. MFD will pay to
securities dealers that enter into a sales agreement with MFD all or a portion
of the service fee attributable to Class B shares. The service fee is intended
to be additional consideration for services rendered by the dealer with respect
to Class B shares. MFD retains the service fee for accounts not attributable to
a securities dealer, which amounted to $1,257 for Class B shares for the six
months ended May 31, 1996. Fees incurred under the distribution plan during the
six months ended May 31, 1996 were 1.00% of average daily net assets
attributable to Class B shares on an annualized basis.
Purchases over $1 million into Class A shares and certain purchases into
retirement plans are subject to a contingent deferred sales charge in the event
of a shareholder redemption within twelve months following such purchase. A
contingent deferred sales charge is imposed on shareholder redemptions of Class
B shares in the event of a shareholder redemption within six years of purchase.
MFD receives all contingent deferred sales charges. Contingent deferred sales
charges imposed during the six months ended May 31, 1996 were $56 and $15,092
for Class A and Class B shares, respectively.
Shareholder Servicing Agent - MFSC, a wholly owned subsidiary of MFS, earns a
fee for its services as shareholder servicing agent. The fee is calculated as a
percentage of the average daily net assets of each class of 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.
17
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - continued
(4) Portfolio Securities
Purchases and sales of investments, other than U.S. government securities,
purchased option transactions and short-term obligations, aggregated
$651,486,990 and $656,168,124, 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 $ 969,407,931
=============
Gross unrealized appreciation $ 357,473,112
Gross unrealized depreciation (23,514,145)
-------------
Net unrealized appreciation $ 333,958,967
=============
(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 May 31, 1996 Year Ended November 30, 1995
----------------------------- ------------------------------
Shares Amount Shares Amount
====================================================================================================
<S> <C> <C> <C> <C>
Shares sold 3,857,699 $ 43,663,220 12,002,572 $ 129,204,725
Shares issued to shareholders in
reinvestment of distributions 11,370,452 119,958,206 8,387,440 80,184,283
Shares reacquired (7,216,435) (82,017,166) (19,312,028) (207,377,260)
---------- ------------- ----------- -------------
Net increase 8,011,716 $ 81,604,260 1,077,984 $ 2,011,748
========== ============= =========== =============
</TABLE>
<TABLE>
<CAPTION>
Class B Shares
Six Months Ended May 31, 1996 Year Ended November 30, 1995
----------------------------- ------------------------------
Shares Amount Shares Amount
====================================================================================================
<S> <C> <C> <C> <C>
Shares sold 953,228 $10,693,770 1,196,877 $ 12,558,656
Shares issued to shareholders in
reinvestment of distributions 171,966 1,783,721 139,032 1,309,677
Shares reacquired (509,616) (5,699,363) (1,054,654) (10,694,593)
---------- ------------- ----------- -------------
Net increase 615,578 $ 6,778,128 281,255 $ 3,173,740
========== ============= =========== =============
</TABLE>
(6) Line of Credit
The Fund entered into an agreement which enables it to participate with other
funds managed by MFS in an unsecured line of credit with a bank which permits
borrowings up to $350 million, collectively. Borrowings may be made to
temporarily finance the repurchase of Fund shares. Interest is charged to each
fund, based on its borrowings, at a rate equal to the bank's base rate. In
addition, a commitment fee, based on the average daily unused portion of the
line of credit, is allocated among the participating funds at the end of each
quarter. The commitment fee allocated to the Fund for the six months ended May
31, 1996 was $6,784.
------------------------------------------------------------
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.
18
<PAGE>
A WORD ABOUT MFS PRODUCTS AND SERVICES
MAKING ADDITIONAL INVESTMENTS AT YOUR CONVENIENCE
There are several easy ways to make additional single investments of at
least $50:
o send a check with the lower portion of your account statement
o contact your financial adviser to purchase shares on your behalf
o wire additional investments through your bank; call us first for
instructions.
MAKING ADDITIONAL INVESTMENTS AUTOMATICALLY
By investing a set amount at regular intervals, over time you will buy more
shares when prices are low, and fewer shares when prices are high. Because
dollar cost averaging involves periodic purchases regardless of fluctuating
share prices, you should consider your financial ability to continue investing
in periods of low prices. MFS offers two dollar-cost-averaging programs. See the
prospectus for further details. Dollar cost averaging does not assure a profit
or avoid a loss.
THE AUTOMATIC INVESTMENT PLAN offers a simple way to make regular investments of
at least $50 through automatic withdrawals from your checking account.
THE AUTOMATIC EXCHANGE PLAN automatically exchanges shares from any MFS fund
with $5,000 or more into the same class of shares in up to four other MFS funds.
You choose the amounts of the exchanges (as little as $50) and their frequency.
<TABLE>
<CAPTION>
A HYPOTHETICAL EXAMPLE OF AUTOMATIC MONTHLY INVESTING
COMPOUNDING AT 8% YEAR
Amount 5 Years 10 Years 15 Years 20 Years 25 Years
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$50 3,671 9,064 16,989 28,633 45,742
$75 5,506 13,596 25,483 42,950 68,613
$100 7,341 18,128 33,978 57,266 91,484
$200 14,683 36,257 67,956 114,532 182,968
</TABLE>
For illustration only. Not indicative of future performance of any MFS fund.
For applications or further information call 1-800-225-2606 any business day
from 8 a.m. to 8 p.m. Eastern time.
If you are a participant in a retirement plan, check with your plan sponsor
regarding the availability of these options.
19
<PAGE>
MFS INVESTMENT OPPORTUNITIES
MUTUAL FUNDS
MFS Family of Funds [Register Mark], shown on the facing page, falls into
the eight general categories below. All offer full-time professional management,
a diversified portfolio, and a wide array of shareholder services.
STOCK FUNDS seek growth of capital rather than income through investments in
stocks.
STOCK AND BOND FUNDS seek current income and growth of capital through
investments in both stocks and bonds.
BOND FUNDS seek current income through investments in debt securities.
WORLD FUNDS seek stock, balanced, and bond fund objectives through investments
in U.S. and foreign stocks and bonds.
LIMITED-MATURITY FUNDS seek current income and preservation of capital through
investments in debt securities with remaining maturities of five years or less.
NATIONAL TAX-FREE BOND FUNDS seek current income exempt from federal income tax
through investments in debt securities issued by states and municipalities.[1]
STATE TAX-FREE BOND FUNDS seek current income exempt from federal and state
income taxes through investments in debt securities issued by a single state and
its municipalities.[1]
MONEY MARKET FUNDS seek preservation of capital and current income through
investments in short-term debt securities.[2]
To determine which MFS fund may be appropriate for you, please contact your
financial adviser, who can help you relate these investment opportunities to
your financial goals. If you prefer, you may call MFS Investor Information
for literature[3] on MFS products and services: 1-800-637-2929, from 9 a.m. to
5 p.m. Eastern time any business day (leave a message anytime).
[1] A small portion of the income may be subject to federal, state and/or
alternative minimum tax.
[2] Investments in money market funds are not issued or guaranteed by the U.S.
government and there is no assurance that the fund will be able to maintain
a stable net asset value.
[3] Including a prospectus containing more complete information including
charges and expenses. Read the prospectus carefully before investing.
20
<PAGE>
THE MFS FAMILY OF FUNDS [Register Mark]
America's Oldest Mutual Fund Group
The members of the MFS Family of Funds are grouped below according to the types
of securities in their portfolios. For free prospectuses containing more
complete information, including the exchange privilege and all charges and
expenses, please contact your financial adviser or call MFS at 1-800-637-2929
any business day from 9 a.m. to 5 p.m. Eastern time (or leave a message
anytime). This material should be read carefully before investing or sending
money.
STOCK
================================================================================
Massachusetts Investors Trust
- --------------------------------------------------------------------------------
Massachusetts Investors Growth Stock Fund
- --------------------------------------------------------------------------------
MFS[Register Mark] Capital Growth Fund
- --------------------------------------------------------------------------------
MFS[Register Mark] Emerging Growth Fund
- --------------------------------------------------------------------------------
MFS[Register Mark] Gold & Natural Resources Fund
- --------------------------------------------------------------------------------
MFS[Register Mark] Growth Opportunities Fund
- --------------------------------------------------------------------------------
MFS[Register Mark] Managed Sectors Fund
- --------------------------------------------------------------------------------
MFS[Register Mark] OTC Fund
- --------------------------------------------------------------------------------
MFS[Register Mark] Research Fund
- --------------------------------------------------------------------------------
MFS[Register Mark] Value Fund
- --------------------------------------------------------------------------------
STOCK AND BOND
================================================================================
MFS[Register Mark] Total Return Fund
- --------------------------------------------------------------------------------
MFS[Register Mark] Utilities Fund
- --------------------------------------------------------------------------------
BOND
================================================================================
MFS[Register Mark] Bond Fund
- --------------------------------------------------------------------------------
MFS[Register Mark] Government Mortgage Fund
- --------------------------------------------------------------------------------
MFS[Register Mark] Government Securities Fund
- --------------------------------------------------------------------------------
MFS[Register Mark] High Income Fund
- --------------------------------------------------------------------------------
MFS[Register Mark] Intermediate Income Fund
- --------------------------------------------------------------------------------
MFS[Register Mark] Strategic Income Fund
- --------------------------------------------------------------------------------
LIMITED MATURITY BOND
================================================================================
MFS[Register Mark] Government Limited Maturity Fund
- --------------------------------------------------------------------------------
MFS[Register Mark] Limited Maturity Fund
- --------------------------------------------------------------------------------
MFS[Register Mark] Municipal Limited Maturity Fund
- --------------------------------------------------------------------------------
WORLD
- --------------------------------------------------------------------------------
MFS[Register Mark]/Foreign & Colonial Emerging Markets Equity Fund
- --------------------------------------------------------------------------------
MFS[Register Mark]/Foreign & Colonial International Growth Fund
- --------------------------------------------------------------------------------
MFS[Register Mark]/Foreign & Colonial International Growth and Income Fund
- --------------------------------------------------------------------------------
MFS[Register Mark] World Asset Allocation Fund [Service Mark]
- --------------------------------------------------------------------------------
MFS[Register Mark] World Equity Fund
- --------------------------------------------------------------------------------
MFS[Register Mark] World Governments Fund
- --------------------------------------------------------------------------------
MFS[Register Mark] World Growth Fund
- --------------------------------------------------------------------------------
MFS[Register Mark] World Total Return Fund
- --------------------------------------------------------------------------------
NATIONAL TAX-FREE BOND
- --------------------------------------------------------------------------------
MFS[Register Mark] Municipal Bond Fund
- --------------------------------------------------------------------------------
MFS[Register Mark] Municipal High Income Fund
(closed to new investors)
- --------------------------------------------------------------------------------
MFS[Register Mark] Municipal Income Fund
- --------------------------------------------------------------------------------
STATE TAX-FREE BOND
================================================================================
Alabama, Arkansas, California, Florida, Georgia, Maryland, Massachusetts,
Mississippi, New York, North Carolina, Pennsylvania, South Carolina, Tennessee,
Virginia, West Virginia
- --------------------------------------------------------------------------------
MONEY MARKET
================================================================================
MFS[Register Mark] Cash Reserve Fund
- --------------------------------------------------------------------------------
MFS[Register Mark] Government Money Market Fund
- --------------------------------------------------------------------------------
MFS[Register Mark] Money Market Fund
- --------------------------------------------------------------------------------
<PAGE>
MFS [Register Mark] [Dalbar Logo] BULK RATE
INVESTORS GROWTH U.S. POSTAGE
STOCK FUND PAID
PERMIT #55638
500 Boylston Street BOSTON, MA
Boston, MA 02116
[MFS Logo]
MIG-3 7/96 51M 13/213
<PAGE>
