<PAGE>
[logo] Annual Report
INVESTMENT MANAGEMENT for Year Ended
November 30, 1996
MASSACHUSETTS INVESTORS GROWTH STOCK FUND
[graphic omitted: Open Pocket Watch]
AMERICA LEARNS HOW "WE INVENTED THE MUTUAL FUND" (see page 27)
<PAGE>
TABLE OF CONTENTS
Letter from the Chairman ................................................... 1
A Discussion with the Portfolio Manager .................................... 3
Portfolio Manager's Profile ................................................ 5
Fund Facts ................................................................. 5
Performance Summary ........................................................ 6
Portfolio of Investments ................................................... 9
Financial Statements .......................................................14
Notes to Financial Statements ..............................................20
Independent Auditors' Report ...............................................25
The MFS Family of Funds ....................................................28
Trustees and Officers ......................................................29
- ------------------------------------------------------------------------------
HIGHLIGHTS
o FOR THE 12 MONTHS ENDED NOVEMBER 30, 1996, CLASS A SHARES OF THE FUND
PROVIDED A TOTAL RETURN AT NET ASSET VALUE OF 23.87%, WHILE CLASS B SHARES
RETURNED 22.87%.
o THE FUND BENEFITED FROM A FAVORABLE ECONOMIC ENVIRONMENT OF LOW INFLATION,
LOW INTEREST RATES, AND MODEST BUT STEADY ECONOMIC GROWTH, WHICH LED TO
STRONG CORPORATE PROFITABILITY.
o TECHNOLOGY COMPANIES EXHIBITED THE FASTEST GROWTH RATES AT THE MOST
REASONABLE PRICES, WHILE U.S. TECHNOLOGY COMPANIES HAVE EXTENDED THEIR
DOMESTIC POSITIONS TO MANY OVERSEAS MARKETS.
o THE MEDIA SECTOR PERFORMED WELL FOR THE FUND, PARTICULARLY FOLLOWING THE
PASSAGE OF THE TELECOMMUNICATION ACT OF 1996. RADIO AND TELEVISION STOCKS
RESPONDED FAVORABLY TO INDUSTRY CONSOLIDATION.
- ------------------------------------------------------------------------------
<PAGE>
LETTER FROM THE CHAIRMAN
[Photo of A. Keith Brodkin]
A. Keith Brodkin
Dear Shareholders:
The U.S. economy appears to have settled into a pattern of moderate growth and
inflation -- two factors that we think can be important contributors to a
favorable long-term investment climate. During the first quarter of 1996, real
(inflation-adjusted) economic growth was 2.3% on an annualized basis, followed
by a rate of 4.7% in the second quarter. However, this unexpectedly high level
was followed by a more moderate 2.0% pace during the third quarter. Overall,
real growth in gross domestic product has surpassed our expectations this year,
and we now expect that growth for all of 1996 could exceed 2.5%. While the
consumer appears to be carrying an excessive debt load, this sector, which
represents two-thirds of the economy, provided some support to the automobile
and housing markets throughout much of the year. Consumer spending has also been
positively impacted by widespread job growth and, more recently, modestly rising
wages. Retail sales, which have been flat for several months, appear to be
improving during the holiday shopping season. The economies of Europe and Japan,
meanwhile, continue to be in the doldrums, weakening U.S. export markets.
Finally, the capital spending plans of American corporations are far from
robust. Thus, while economic growth should continue, we expect some slackening
toward the end of the year.
We believe U.S. equity investors should lower their expectations for 1997.
The expected slowdown in corporate earnings growth and interest rate increases
earlier in the year have raised some near-term concerns, as was seen in July's
stock-market correction. 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 in the near term. 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 equity market's
longer-term health. We believe 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. Thus, while we have some near-term
concerns, we remain quite constructive on the long-term viability of the equity
market.
Finally, as you may notice, this report to shareholders incorporates a number
of changes which we hope you will find informative and useful. Following a
discussion with the Portfolio Manager, we have added new information on the
Fund's holdings, including charts illustrating the portfolio's concentration in
the types of investments that meet its criteria. Near the back of the report,
telephone numbers and addresses are listed if you would like to contact MFS.
We appreciate your support and welcome any questions or comments you may
have.
Respectfully,
/s/ A. Keith Brodkin
A. Keith Brodkin
Chairman and President
December 12, 1996
<PAGE>
A DISCUSSION WITH THE PORTFOLIO MANAGER
[Photo of Christian Felipe]
Christian Felipe
For the 12 months ended November 30, 1996, Class A shares of the Fund provided a
total return of 23.87%, while Class B shares returned 22.87%. These returns
assume the reinvestment of distributions but exclude the effects of any sales
charges and compare to the 27.85% return for the Standard & Poor's 500 Composite
Index (the S&P 500), a popular, unmanaged index of common stock performance.
Q. CAN YOU DISCUSS SOME OF THE THINGS YOU THINK AFFECTED THE FUND'S PERFORMANCE
OVER THE PAST YEAR?
A. Performance was driven by a favorable economic environment of low inflation,
low interest rates, and modest but steady economic growth. This led to strong
corporate profitability and rising price-to-earnings ratios.
Q. HOW WOULD YOU DESCRIBE THE BUSINESS AND ECONOMIC ENVIRONMENT YOU FACED OVER
THE PAST YEAR, PARTICULARLY AS IT RELATES TO THE FUND?
A. We saw an economic environment that was characterized by a productivity-led
expansion. Massive capital spending by major corporations on their technology
infrastructure helped contribute to an economy that was able to grow without
price increases, as technology spending allowed companies to reduce payrolls and
increase profits without raising prices. The employment picture was also helped
by a large number of start-up companies, many of which were financed through
initial public offerings. This helped pick up some of the slack created by
restructurings at some of the larger companies.
Q. WE NOTICED THAT TECHNOLOGY STOCKS MAKE UP THE LARGEST SECTOR IN THE FUND.
WHAT IS IT YOU LIKE ABOUT THIS SECTOR, AND COULD YOU DISCUSS ANY SUB-GROUPS
WITHIN TECHNOLOGY THAT YOU FIND PARTICULARLY ATTRACTIVE?
A. The technology group has exhibited the fastest growth rates at the most
reasonable prices. U.S. technology companies have also been able to extend their
domestic positions to many overseas markets.
Q. COULD YOU GIVE US SOME OF YOUR FAVORITE TECHNOLOGY HOLDINGS AND TELL US WHAT
YOU THINK MAKES THEM ATTRACTIVE?
A. Microsoft is the Fund's biggest position. The company dominates virtually
every area of the computer software industry, yet its growth prospects today are
greater than ever. New opportunities include the Internet, cable television, and
relational databases. This position has been held in the Fund for several years,
as has Intel, another favorite due to its near-monopoly position in
microprocessors.
Q. IN GENERAL, WHAT CHARACTERISTICS OR QUALITIES DO YOU LOOK FOR IN SELECTING
STOCKS FOR THE FUND?
A. We look for companies with dominant worldwide franchises that allow them to
generate a return significantly ahead of their cost of capital. This leads us to
companies with tremendous free cash flows, which we buy when we feel their
valuations have reached attractive levels.
Q. CAN YOU TALK ABOUT SOME OTHER STOCKS OR SECTORS THAT PERFORMED AS WELL AS OR
BETTER THAN EXPECTED, AND TELL US WHY YOU THINK THEY DID WELL?
A. The media sector performed very well for us, particularly following passage
of the Telecommunication Act of 1996. Radio and TV stocks responded favorably to
massive industry consolidation. Westinghouse bought Infinity Broadcasting early
in the year, and AT&T has recently decided to sell its position in LIN
Broadcasting.
Q. NOW, COULD YOU TALK ABOUT SOME STOCKS OR SECTORS THAT DID NOT PERFORM AS WELL
AS YOU EXPECTED?
A. The HMO (health maintenance organizations) stocks were poor performers for
the Fund due to poor industry pricing. This situation appears to have been
corrected, and we are encouraged by prospects for this group in 1997.
Q. CAN YOU TELL US ABOUT SOME SECTORS YOU MIGHT BE AVOIDING, AND WHY?
A. We are avoiding many commodity-technology companies due to the cyclical
nature of these industries. Personal computer, disk drive, and memory
semiconductor companies are some examples.
Q. AS YOU LOOK AHEAD, WHAT CHANGES DO YOU SEE IN THE OVERALL MARKET OR ECONOMIC
ENVIRONMENT, PARTICULARLY AS IT RELATES TO THE FUND, AND HOW ARE YOU POSITIONING
THE FUND TO TRY TO TAKE ADVANTAGE OF THOSE CHANGES?
A. We anticipate no significant change, but rather a continuing environment of
steady growth, low inflation, and stable-to-falling interest rates. Technology,
media, financial services, and health care are some of the major sectors that we
anticipate will benefit from this environment.
Respectfully,
/s/ Christian Felipe
Christian Felipe
Portfolio Manager
<PAGE>
- -------------------------------------------------------------------------------
PORTFOLIO MANAGER'S PROFILE
CHRISTIAN FELIPE IS SENIOR VICE PRESIDENT OF MASSACHUSETTS FINANCIAL SERVICES
(MFS) AND PORTFOLIO MANAGER OF MFS EMERGING EQUITIES FUND AND MASSACHUSETTS
INVESTORS GROWTH STOCK FUND. MR. FELIPE JOINED MFS IN 1986 IN THE RESEARCH
DEPARTMENT. HE WAS NAMED INVESTMENT OFFICER IN 1987, ASSISTANT VICE PRESIDENT -
INVESTMENTS IN 1988, VICE PRESIDENT - INVESTMENTS IN 1989, AND SENIOR VICE
PRESIDENT IN 1996.
MR. FELIPE IS A GRADUATE OF THE UNIVERSITY OF CALIFORNIA, LOS ANGELES AND THE
WHARTON SCHOOL OF BUSINESS AT THE UNIVERSITY OF PENNSYLVANIA.
- -------------------------------------------------------------------------------
LARGEST SECTORS
Technology 37.3%
Other Sectors 17.9%
Health Care 14.2%
Leisure 13.7%
Retailing 9.2%
Financial Services 7.7%
- ------------------------------------------------------------------------------
FUND FACTS
STRATEGY: THE FUND'S OBJECTIVE IS TO PROVIDE LONG-TERM GROWTH OF
CAPITAL AND FUTURE INCOME RATHER THAN CURRENT INCOME.
COMMENCEMENT OF
INVESTMENT OPERATIONS: JANUARY 1, 1935
SIZE: $1.4 BILLION NET ASSETS AS OF NOVEMBER 30, 1996
- ------------------------------------------------------------------------------
<PAGE>
PERFORMANCE SUMMARY
The information below and on the following page illustrates the historical
performance of Massachusetts Investors Growth Stock Fund Class A shares in
comparison to various market indicators. Class A share performance results
reflect the deduction of the 5.75% maximum sales charge; benchmark comparisons
are unmanaged and do not reflect any fees or expenses. You cannot invest in an
index. All results are historical and assume the reinvestment of dividends and
capital gains. The performance of Class B shares will be greater or less than
the line shown, based on differences in loads and fees.
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(For the 5-Year Period ended November 30, 1996)
Massachusetts Investors
Growth Stock Fund Consumer S&P 500
Class A Price Index - U.S. Composite Index
----------------------- ------------------ ---------------
11/91 $ 9,428 $10,000 $10,000
11/92 11,252 10,305 11,841
11/93 12,763 10,581 13,035
11/94 12,126 10,864 13,169
11/95 16,116 11,143 18,018
11/96 19,963 11,524 23,020
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(For the 10-Year Period ended November 30, 1996)
Massachusetts Investors
Growth Stock Fund Consumer S&P 500
Class A Price Index - U.S. Composite Index
----------------------- ------------------ ---------------
11/86 $ 9,426 $10,000 $10,000
11/88 9,615 10,891 11,735
11/90 12,321 12,113 14,808
11/92 20,085 12,856 21,097
11/94 21,644 13,553 23,463
11/96 35,634 14,377 41,017
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mass. Investors Growth Stock Fund (Class A)
including 5.75% sales charge +16.78% +13.81% +14.82% +13.55%
- -------------------------------------------------------------------------------------------------------------------------------
Mass. Investors Growth Stock Fund (Class A)
at net asset value +23.87% +16.08% +16.19% +14.22%
- -------------------------------------------------------------------------------------------------------------------------------
Mass. Investors Growth Stock Fund (Class B)
with CDSC +18.87% +14.43% +15.36% +13.93%
- -------------------------------------------------------------------------------------------------------------------------------
Mass. Investors Growth Stock Fund (Class B)
without CDSC +22.87% +15.19% +15.58% +13.93%
- -------------------------------------------------------------------------------------------------------------------------------
Average growth fund** +21.09% +16.78% +15.77% +13.39%
- -------------------------------------------------------------------------------------------------------------------------------
Consumer Price Index* + 3.42% + 2.89% + 2.88% + 3.70%
- -------------------------------------------------------------------------------------------------------------------------------
Standard & Poor's 500 Composite Index+ +27.85% +20.88% +18.15% +15.16%
- -------------------------------------------------------------------------------------------------------------------------------
* The Consumer Price Index is a popular measure of change in prices.
** Source: Lipper Analytical Services.
+ Source: CDA/Wiesenberger
</TABLE>
Investment return and principal value will fluctuate, and shares, when redeemed,
may be worth more or less than their original cost. Past performance is no
guarantee of future results.
Class B results with contingent deferred sales charge (CDSC), reflect the
applicable CDSC, which declines over six years as follows: 4%, 4%, 3%, 3%, 2%,
1%, 0%.
Class B share performance includes the performance of the Fund's Class A shares
for periods prior to the commencement of offering of Class B shares on September
7, 1993. Sales charges and operating expenses for Class A and Class B shares
differ. The Class A share performance, which is included within the Class B
share performance with CDSC, has been adjusted to reflect the CDSC generally
applicable to Class B shares rather than the initial sales charge generally
applicable to Class A shares. Class B share performance has not been adjusted,
however, to reflect differences in operating expenses (e.g., Rule 12b-1 fees),
which generally are lower for Class A shares.
Fund results reflect any applicable expense subsidies and waivers, without which
the performance results would have been less favorable. Subsidies and waivers
may be rescinded at any time. See the prospectus for details.
- ------------------------------------------------------------------------------
TOP TEN HOLDINGS
MICROSOFT CORP. CABLETRON SYSTEMS, INC.
Computer software and systems company Computer network company
COMPUTER ASSOCIATES INTERNATIONAL, INC. GANNETT CO., INC.
Computer software company Newspaper, television, and radio
company
INTEL CORP.
Semiconductor manufacturer CISCO SYSTEMS, INC.
Computer network developer
FRANKLIN RESOURCES, INC.
Mutual fund and financial services UNITED HEALTHCARE CORP.
company Health maintenance organization
MCI COMMUNICATIONS CORP. BMC SOFTWARE, INC.
Telecommunications company Computer software company
- ------------------------------------------------------------------------------
<PAGE>
PORTFOLIO OF INVESTMENTS - November 30, 1996
Stocks - 91.3%
- -----------------------------------------------------------------------------
Issuer Shares Value
- -----------------------------------------------------------------------------
U.S. Stocks - 89.5%
Aerospace - 0.8%
Boeing Co. 50,000 $ 4,968,750
General Dynamics Corp. 40,800 3,009,000
Gulfstream Aerospace Corp.* 65,000 1,560,000
McDonnell Douglas Corp. 25,000 1,321,875
----------------
$ 10,859,625
- -----------------------------------------------------------------------------
Apparel and Textiles - 0.3%
Nike, Inc., "B" 76,400 $ 4,345,250
- -----------------------------------------------------------------------------
Banks and Credit Companies - 0.5%
Citicorp 57,000 $ 6,227,250
Compass Bancshares, Inc. 4,600 178,825
Signet Banking Corp. 25,000 756,250
----------------
$ 7,162,325
- -----------------------------------------------------------------------------
Business Machines - 2.1%
Affiliated Computer Services, Inc., "A"* 170,000 $ 4,930,000
Sun Microsystems, Inc.* 410,000 23,882,500
----------------
$ 28,812,500
- -----------------------------------------------------------------------------
Business Services - 4.1%
AccuStaff, Inc.* 87,800 $ 1,777,950
ADT Ltd.* 400,000 8,200,000
Alco Standard Corp. 135,000 6,986,250
Computer Sciences Corp.* 95,000 7,469,375
CUC International, Inc.* 435,000 11,473,125
DST Systems, Inc.* 260,000 8,417,500
Interim Services, Inc.* 170,000 6,672,500
Loewen Group, Inc. 12,000 484,500
Sabre Group Holding, Inc.*
(Business Services) 139,900 4,092,075
----------------
$ 55,573,275
- -----------------------------------------------------------------------------
Cellular Telephones - 1.0%
AirTouch Communications, Inc.* 150,000 $ 3,843,750
Telephone & Data Systems, Inc. 251,100 9,384,863
----------------
$ 13,228,613
- -----------------------------------------------------------------------------
Computer Software - Personal Computers - 6.4%
Electronic Arts, Inc* 66,500 $ 2,136,312
First Data Corp. 175,000 6,978,125
Microsoft Corp.* 500,000 78,437,500
----------------
$ 87,551,937
- -----------------------------------------------------------------------------
Computer Software - Systems - 14.2%
BMC Software, Inc.* 650,000 $ 28,275,000
Cadence Design Systems, Inc.* 660,800 26,349,400
Computer Associates International, Inc. 1,000,000 65,750,000
Compuware Corp.* 259,700 14,673,050
Informix Corp.* 21,700 515,375
Ingram Micro, Inc.* 20,000 492,500
Oracle Systems Corp.* 550,000 26,950,000
Sterling Software, Inc.* 250,000 8,281,250
Sybase, Inc.* 700,000 12,337,500
Synopsys, Inc.* 100,000 4,425,000
USCS International, Inc.* 260,000 4,355,000
Xionics Document Technologies* 100,000 1,300,000
----------------
$ 193,704,075
- -----------------------------------------------------------------------------
Consumer Goods and Services - 2.2%
Colgate-Palmolive Co. 50,000 $ 4,631,250
Revlon, Inc., "A"* 135,000 4,168,125
Service Corp. International 100,000 3,012,500
Tyco International Ltd. 340,000 18,615,000
----------------
$ 30,426,875
- -----------------------------------------------------------------------------
Electrical Equipment - 0.9%
General Electric Co. 125,000 $ 13,000,000
- -----------------------------------------------------------------------------
Electronics - 4.4%
Atmel Corp.* 137,700 $ 4,526,888
Intel Corp. 425,000 53,921,875
LSI Logic Corp.* 50,000 1,506,250
----------------
$ 59,955,013
- -----------------------------------------------------------------------------
Entertainment - 5.7%
Chancellor Broadcast Corp., "A"* 27,900 $ 809,100
Clear Channel Communications, Inc.* 110,000 7,590,000
Cox Radio, Inc.* 197,500 3,456,250
Disney (Walt) Co. 30,000 2,212,500
Harrah's Entertainment, Inc.* 1,410,000 25,027,500
Infinity Broadcasting Corp., "A"* 310,000 9,958,750
Jacor Communications, Inc.* 177,300 4,255,200
LIN Television Corp.* 381,700 15,315,713
Mirage Resorts, Inc.* 300,000 7,237,500
Viacom, Inc., "B"* 50,000 1,887,500
----------------
$ 77,750,013
- -----------------------------------------------------------------------------
Financial Institutions - 5.6%
Associates First Capital Corp., "A" 200,000 $ 9,675,000
Beneficial Corp. 50,000 3,106,250
Federal Home Loan Mortgage Corp. 15,000 1,713,750
Franklin Resources, Inc. 750,000 53,625,000
MBNA Corp. 100,000 4,037,500
Merrill Lynch & Co., Inc. 50,000 4,012,500
----------------
$ 76,170,000
- -----------------------------------------------------------------------------
Food and Beverage Products - 0.3%
PepsiCo, Inc. 150,000 $ 4,481,250
- -----------------------------------------------------------------------------
Forest and Paper Products - 0.1%
Kimberly-Clark Corp. 20,000 $ 1,955,000
- -----------------------------------------------------------------------------
Insurance - 0.9%
Equitable of Iowa Cos. 275,000 $ 12,306,250
- -----------------------------------------------------------------------------
Medical and Health Products - 2.8%
Johnson & Johnson 255,000 $ 13,546,875
Pfizer, Inc. 40,000 3,585,000
Rhone-Poulenc Rorer, Inc. 122,000 9,073,750
Schering Plough Corp. 165,000 11,756,250
----------------
$ 37,961,875
- -----------------------------------------------------------------------------
Medical and Health Technology and Services - 9.6%
Cardinal Health, Inc. 100,000 $ 8,362,500
Columbia Healthcare Corp. 315,000 12,600,000
Genesis Health Ventures, Inc.* 225,000 6,271,875
Health Management Associates, Inc., "A"* 200,000 4,425,000
HealthSouth Corp.* 615,000 23,139,375
Lincare Holdings, Inc.* 100,000 3,975,000
Oxford Health Plans, Inc.* 70,000 4,060,000
Pacificare Health Systems, Inc., "B"* 305,200 25,331,600
St. Jude Medical, Inc.* 60,000 2,505,000
United Healthcare Corp. 657,500 28,354,687
Vivra, Inc.* 400,000 12,300,000
----------------
$ 131,325,037
- -----------------------------------------------------------------------------
Pollution Control - 1.7%
Republic Industries, Inc.##(+) 500,000 $ 16,625,000
USA Waste Services, Inc.* 210,000 6,772,500
----------------
$ 23,397,500
- -----------------------------------------------------------------------------
Printing and Publishing - 2.9%
Gannett Co., Inc. 415,000 $ 32,577,500
Harte-Hanks Communications, Inc. 100,000 2,575,000
Tribune Co. 50,000 4,325,000
----------------
$ 39,477,500
- -----------------------------------------------------------------------------
Real Estate - 0.1%
Cb Commercial Real Estate Services Group* 49,000 $ 882,000
- -----------------------------------------------------------------------------
Restaurants and Lodging - 3.3%
HFS, Inc.* 50,000 $ 3,237,500
Marriot International, Inc. 205,000 11,428,750
McDonalds Corp. 100,000 4,675,000
Outback Steakhouse, Inc.* 125,000 3,609,375
Promus Hotel Corp.* 691,800 22,310,550
----------------
$ 45,261,175
- -----------------------------------------------------------------------------
Stores - 6.8%
AutoZone, Inc.* 75,000 $ 1,846,875
CVS Corp. 225,000 9,253,125
General Nutrition Cos., Inc.* 225,000 3,881,250
Gymboree Corp.* 165,000 4,661,250
Home Depot, Inc. 400,000 20,850,000
Linens N Things, Inc.* 100,000 1,562,500
Mazel Stores, Inc.* 6,300 124,425
Micro Warehouse, Inc.* 305,300 7,556,175
Office Depot, Inc.* 1,400,000 27,300,000
Rite Aid Corp. 7,900 312,050
Sunglass Hut International, Inc.* 100,000 737,500
Talbots, Inc. 50,000 1,443,750
Thrifty Payless Holdings, Inc., "B"* 525,000 13,453,125
Travis Boats and Motors, Inc.* 40,000 505,000
----------------
$ 93,487,025
- -----------------------------------------------------------------------------
Supermarkets - 0.6%
Kroger Co.* 75,000 $ 3,459,375
Safeway, Inc.* 80,000 3,250,000
Vons Cos., Inc.* 35,000 1,841,875
----------------
$ 8,551,250
- -----------------------------------------------------------------------------
Telecommunications - 8.4%
Cabletron Systems, Inc.* 1,200,000 $ 48,450,000
Cellular Communications International* 150,000 3,956,250
Cisco Systems, Inc.* 430,000 29,186,250
Glenayre Technologies, Inc.* 460,500 10,994,437
Lucent Technologies, Inc. 325,000 16,656,250
Univision Communications, Inc.* 125,000 4,968,750
----------------
$ 114,211,937
- -----------------------------------------------------------------------------
Utilities - Telephone - 3.7%
MCI Communications Corp. 1,650,000 $ 50,325,000
- -----------------------------------------------------------------------------
Other - 0.1%
Kansas City Southern Industries, Inc. 25,000 $ 1,256,250
- -----------------------------------------------------------------------------
Total U.S. Stocks (Identified Cost, $908,639,000) $ 1,223,418,550
- -----------------------------------------------------------------------------
Foreign Stocks - 1.8%
Germany - 0.7%
Sap AG, Preferred
(Computer Software - Systems) 45,000 $ 6,185,306
Sap Aktiengesellschsft, ADR##
(Computer Software - Systems) 75,600 3,430,350
----------------
$ 9,615,656
- -----------------------------------------------------------------------------
Italy - 0.4%
Fila Holdings S.p.A., ADR
(Apparel and Textiles) 70,000 $ 5,180,000
- -----------------------------------------------------------------------------
Sweden - 0.7%
Astra AB, Free, "B" (Pharmaceuticals) 200,000 $ 9,386,668
- -----------------------------------------------------------------------------
Total Foreign Stocks (Identified Cost, $19,639,592) $ 24,182,324
- -----------------------------------------------------------------------------
Total Stocks (Identified Cost, $928,278,592) $ 1,247,600,874
- -----------------------------------------------------------------------------
Convertible Preferred Stock - 0.3%
- -----------------------------------------------------------------------------
Issuer Shares Value
- -----------------------------------------------------------------------------
American Radio Systems Corp., 7s##
(Identified Cost, $4,966,400) 100,000 $ 4,600,000
- -----------------------------------------------------------------------------
Convertible Bond - 0.3%
- ------------------------------------------------------------------------------
Principal Amount
(000 Omitted)
- ------------------------------------------------------------------------------
Home Depot, Inc., 3.25s, 2001
(Identified Cost, $4,000,000) $ 4,000 $ 3,975,000
- -----------------------------------------------------------------------------
Short-Term Obligations - 8.3%
- ------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., due 12/02/96 $14,600 $ 14,597,688
Federal Home Loan Mortgage Corp., due 12/05/96 10,000 9,994,222
Federal Home Loan Mortgage Corp., due 12/10/96 1,835 1,832,610
Federal Home Loan Mortgage Corp., due 12/12/96 7,975 7,962,256
Federal Home Loan Mortgage Corp., due 12/18/96 8,000 7,980,280
Federal Home Loan Mortgage Corp., due 12/19/96 4,100 4,089,278
Federal Home Loan Mortgage Corp., due 12/23/96 9,480 9,449,701
Federal National Mortgage Assn., due 12/12/96 6,755 6,744,226
Federal National Mortgage Assn., due 12/17/96 11,790 11,762,621
Federal National Mortgage Assn., due 12/20/96 7,490 7,469,306
General Electric Co., due 12/03/96 6,310 6,308,149
General Electric Co., due 12/04/96 9,840 9,835,695
Raytheon Co., due 12/05/96 10,610 10,603,752
Student Loan Marketing Assn., due 12/27/96 4,425 4,408,254
- -----------------------------------------------------------------------------
Total Short-Term Obligations, at Amortized Cost $ 113,038,038
- -----------------------------------------------------------------------------
Total Investments (Identified Cost, $1,050,283,030) $ 1,369,213,912
Other Assets, Less Liabilities - (0.2)% (2,977,034)
- -----------------------------------------------------------------------------
Net Assets - 100.0% $ 1,366,236,878
- -----------------------------------------------------------------------------
* Non-income producing security.
## SEC Rule 144A restriction.
(+) Securities valued by or at the direction of the Trustees.
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
- ------------------------------------------------------------------------------
November 30, 1996
- ------------------------------------------------------------------------------
Assets:
Investments, at value (identified cost, $1,050,283,030) $1,369,213,912
Cash 67,129
Receivable for investments sold 10,011,847
Receivable for Fund shares sold 385,542
Dividends and interest receivable 314,689
Other assets 12,287
--------------
Total assets $1,380,005,406
--------------
Liabilities:
Payable for investments purchased $ 12,704,034
Payable for Fund shares reacquired 344,675
Payable to affiliates -
Management fee 32,282
Shareholder servicing agent fee 14,053
Distribution fee 429,943
Accrued expenses and other liabilities 243,541
--------------
Total liabilities $ 13,768,528
--------------
Net assets $1,366,236,878
==============
Net assets consists of:
Paid-in capital $ 735,670,386
Unrealized appreciation on investments 318,930,882
Accumulated undistributed net realized gain on investments
and foreign currency transactions 311,713,627
Accumulated net investment loss (78,017)
--------------
Total $1,366,236,878
==============
Shares of beneficial interest outstanding 101,694,423
===========
Class A shares:
Net asset value per share
(net assets of $1,341,156,165 / 99,782,219 shares of
beneficial interest outstanding) $13.44
======
Offering price per share (100 / 94.25) $14.26
======
Class B shares:
Net asset value and offering price per share
(net assets of $25,080,713 / 1,912,204 shares of
beneficial interest outstanding) $13.12
======
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
- ------------------------------------------------------------------------------
Year Ended November 30, 1996
- ------------------------------------------------------------------------------
Net investment income:
Income -
Dividends $ 3,963,725
Interest 3,871,140
------------
Total investment income $ 7,834,865
------------
Expenses -
Management fee $ 3,656,428
Trustees' compensation 64,944
Shareholder servicing agent fee (Class A) 1,537,363
Shareholder servicing agent fee (Class B) 42,867
Distribution and service fee (Class A) 2,465,964
Distribution and service fee (Class B) 194,849
Custodian fee 397,958
Postage 103,270
Printing 84,672
Auditing fees 33,445
Legal fees 2,218
Miscellaneous 364,510
------------
Total expenses $ 8,948,488
Fees paid indirectly (353,156)
------------
Net expenses $ 8,595,332
------------
Net investment loss $ (760,467)
============
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $313,083,375
Foreign currency transactions (44,789)
------------
Net realized gain on investments and foreign currency
transactions $313,038,586
------------
Change in unrealized depreciation on investments $(46,507,951)
------------
Net realized and unrealized gain on investments and
foreign currency $266,530,635
------------
Increase in net assets from operations $265,770,168
============
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Statement of Changes in Net Assets
- ------------------------------------------------------------------------------
Year Ended November 30, 1996 1995
- ------------------------------------------------------------------------------
Increase (decrease) in net assets:
From operations -
Net investment loss $ (760,467) $ (986,154)
Net realized gain on investments and foreign
currency transactions 313,038,586 155,044,848
Net unrealized gain (loss) on investments (46,507,951) 150,833,517
-------------- --------------
Increase in net assets from operations $ 265,770,168 $ 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 $ 141,518,246 $ 141,763,381
Net asset value of shares issued to
shareholders in reinvestment
of distributions 122,007,526 81,493,960
Cost of shares reacquired (204,316,519) (218,071,853)
-------------- --------------
Increase in net assets from Fund share
transactions $ 59,209,253 $ 5,185,488
-------------- --------------
Total increase in net assets $ 171,416,716 $ 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 $78,017 and $61,855,
respectively) $1,366,236,878 $1,194,820,162
============== ==============
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Financial Highlights
- -----------------------------------------------------------------------------
Year Ended November 30, 1996 1995 1994 1993 1992
- -----------------------------------------------------------------------------
Class A
- -----------------------------------------------------------------------------
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
------ ------ ------ ------ ------
Income from investment
operations# -
Net investment loss $(0.01) $(0.01) $(0.01) $(0.01) $(0.03)
Net realized and unrealized
gain (loss) on investments
and foreign currency
transactions 2.55 3.12 (0.49) 1.55 2.07
------ ------ ------ ------ ------
Total from investment
operations $ 2.54 $ 3.11 $ (0.50) $ 1.54 $ 2.04
------ ------ ------ ------ ------
Less distributions declared to
shareholders from net realized
gain on investment and foreign
currency transactions $(1.61) $(1.08) $(1.99) $(0.72) $(0.76)
------ ------ ------ ------ ------
Total distributions
declared to shareholders $(1.61) $(1.08) $(1.99) $(0.72) $(0.76)
------ ------ ------ ------ ------
Net asset value - end of period $13.44 $12.51 $10.48 $12.97 $12.15
====== ====== ====== ====== ======
Total return(+) 23.87% 32.91% (5.00)% 13.43% 19.35%
Ratios (to average net
assets)/Supplemental data:
Expenses## 0.72% 0.73% 0.72% 0.71% 0.67%
Net investment loss (0.05)% (0.08)% (0.06)% (0.19)% (0.24)%
Portfolio turnover 107% 46% 56% 52% 16%
Average commission rate### $0.0611 $ -- $ -- $ -- $ --
Net assets at end of period
(000,000 omitted) $1,341 $1,180 $ 977 $1,132 $1,070
# Per share data for the periods subsequent to November 30, 1992 is based on
average shares outstanding.
## For fiscal years ended 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.
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Financial Highlights - continued
- -----------------------------------------------------------------------------
Year Ended November 30, 1991 1990 1989 1988 1987
- -----------------------------------------------------------------------------
Class A
- -----------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of
period $ 8.48 $10.70 $ 8.39 $ 9.05 $ 9.69
------ ------ ------ ------ ------
Income from investment
operations -
Net investment income $ 0.01 $ 0.05 $ 0.09 $ 0.12 $ 0.18
Net realized and unrealized
gain (loss) on investments
and foreign currency
transactions 2.93 (1.02) 3.14 0.64 (0.68)
------ ------ ------ ------ ------
Total from investment
operations $ 2.94 $(0.97) $ 3.23 $ 0.76 $(0.50)
------ ------ ------ ------ ------
Less distributions declared
to shareholders -
From net investment income $(0.03) $(0.05) $(0.08) $(0.15) $(0.14)
From net realized gain on
investment and
foreign currency
transactions (0.52) (1.20) (0.84) (1.27) --
------ ------ ------ ------ ------
Total distributions
declared to
shareholders $(0.55) $(1.25) $(0.92) $(1.42) $(0.14)
------ ------ ------ ------ ------
Net asset value - end of
period $10.87 $ 8.48 $10.70 $ 8.39 $ 9.05
====== ====== ====== ====== ======
Total return(+) 36.56% (10.27)% 42.14% 8.21% (5.57)%
Ratios (to average net
assets)/Supplemental data:
Expenses 0.63% 0.53% 0.54% 0.58% 0.50%
Net investment income 0.14% 0.55% 0.91% 1.27% 1.60%
Portfolio turnover 39% 44% 32% 75% 66%
Net assets at end of period
(000,000 omitted) $ 950 $ 749 $ 907 $ 735 $ 774
(+)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.
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Financial Highlights - continued
- ------------------------------------------------------------------------------
Year Ended November 30, 1996 1995 1994 1993*
- -----------------------------------------------------------------------------
Class B
- -----------------------------------------------------------------------------
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 $ (0.11) $ (0.11) $ (0.09) $ (0.01)
Net realized and unrealized gain
(loss) on investments and foreign
currency transactions 2.51 3.10 (0.50) 0.03
------- ------- ------- -------
Total from investment operations $ 2.40 $ 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 $ 13.12 $ 12.26 $ 10.35 $ 12.93
======= ======= ======= =======
Total return 22.87% 32.09% (5.82)% 0.70%+
Ratios (to average net assets)/
Supplemental data:
Expenses## 1.61% 1.63% 1.60% 1.49%+
Net investment loss (0.94)% (0.98)% (0.87)% (0.99)%+
Portfolio turnover 107% 46% 56% 52%
Average commission rate### $0.0611 $ -- $ -- $ --
Net assets at end of period (000,000
omitted) $ 25 $ 14 $ 9 $ 2
* For the period from the commencement of offering of Class B shares,
September 7, 1993 through November 30, 1993.
+ Annualized.
# Per share data is based on average shares outstanding.
## For fiscal years ended 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.
See notes to financial statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(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. Debt securities (other than
short-term obligations which mature in 60 days or less), including listed
issues, are valued on the basis of valuations furnished by dealers or by a
pricing service with consideration to factors such as institutional-size trading
in similar groups of securities, yield, quality, coupon rate, maturity, type of
issue, trading characteristics and other market data, without exclusive reliance
upon exchange or over-the-counter prices. Short- term obligations, which mature
in 60 days or less, are valued at amortized cost, which approximates market
value. 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. Interest income is recorded on the accrual basis. All premium and
original issue discount are amortized or accreted for financial statement and
tax reporting purposes as required by federal income tax regulations. Dividend
income is recorded on the ex-dividend date for dividends received in cash.
Dividend and interest payments received in additional securities are recorded on
the ex-dividend or ex-interest date in an amount equal to the value of the
security on such date.
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.
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-distributions for financial statement purposes, are classified as
distributions in excess of net investment income or accumulated net realized
gains. During the year ended November 30, 1996, $744,305 and $6,746 was
reclassified from accumulated net realized gain on investments and foreign
currency transactions to accumulated net investment loss and paid-in capital,
respectively, due to differences between book and tax accounting for currency
transactions and the offset of short-term capital gains against accumulated net
investment loss. This change had no effect on the net assets or net asset value
per share.
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 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 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 its independent Trustees and Mr. Bailey. Included in Trustees'
compensation is a net periodic pension expense of $21,134 for the year ended
November 30, 1996.
Distributor - MFD, a wholly owned subsidiary of MFS, as distributor, received
$46,476 for the year ended November 30, 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 who enters into a sales agreement with MFD of up to
0.25% per annum of the Fund's average daily net assets attributable to Class A
shares which are attributable to that securities dealer, a distribution fee to
MFD of up to 0.10% per annum of the Fund's average daily net assets attributable
to Class A shares, commissions to dealers and payments to MFD wholesalers for
sales at or above a certain dollar level, and other such distribution-related
expenses that are approved by the Fund. MFD retains the service fee for accounts
not attributable to a securities dealer which amounted to $731,215 for the year
ended November 30, 1996. Payment of the 0.10% per annum Class A distribution fee
will commence on such date as the Trustees of the Fund may determine. Fees
incurred under the distribution plan during the year ended November 30, 1996
were 0.21% 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 who 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 $3,363 for Class B shares for the year
ended November 30, 1996. Fees incurred under the distribution plan during the
year ended November 30, 1996 were 1.00% of average daily net assets attributable
to Class B shares on an annualized basis.
Purchases over $1 million of Class A shares and certain purchases into
retirement plans are subject to a contingent deferred sales charge in the event
of a shareholder redemption within 12 months following such purchase. A
contingent deferred sales charge is imposed on shareholder redemptions of Class
B shares in the event of a shareholder redemption within six years of purchase.
MFD receives all contingent deferred sales charges. Contingent deferred sales
charges imposed during the year ended November 30, 1996 were $457 and $31,599
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.
(4) Portfolio Securities
Purchases and sales of investments, other than U.S. government securities,
purchased option transactions and short-term obligations aggregated
$1,244,704,875 and $1,350,498,306, 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 $1,053,749,748
==============
Gross unrealized appreciation $ 345,353,839
Gross unrealized depreciation (29,889,675)
--------------
Net unrealized appreciation $ 315,464,164
==============
(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:
Class A Shares
Year Ended November 30, 1996 Year Ended November 30, 1995
---------------------------- ----------------------------
Shares Amount Shares Amount
- -----------------------------------------------------------------------------
Shares sold 9,833,859 $117,167,335 12,002,572 $129,204,725
Shares issued to
shareholders in
reinvestment of
distributions 11,391,727 120,223,809 8,387,440 80,184,283
Shares reacquired (15,793,634) (186,665,355) (19,312,028) (207,377,260)
----------- ------------ ---------- ------------
Net increase 5,431,952 $ 50,725,789 1,077,984 $ 2,011,748
=========== ============ ========== ============
Class B Shares
Year Ended November 30, 1996 Year Ended November 30, 1995
---------------------------- ----------------------------
Shares Amount Shares Amount
- -----------------------------------------------------------------------------
Shares sold 2,089,754 $ 24,350,911 1,196,877 $ 12,558,656
Shares issued to
shareholders in
reinvestment of
distributions 171,965 1,783,717 139,032 1,309,677
Shares reacquired (1,530,126) (17,651,164) (1,054,654) (10,694,593)
----------- ------------ ---------- ------------
Net increase 731,593 $ 8,483,464 281,255 $ 3,173,740
=========== ============ ========== ============
(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 year ended November
30, 1996 was $13,431.
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Trustees and Shareholders of Massachusetts Investors Growth Stock Fund:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Massachusetts Investors Growth Stock Fund as of
November 30, 1996, the related statement of operations for the year then ended,
the statement of changes in net assets for the year then ended and the year
ended November 30, 1996, and the financial highlights for each of the years in
the ten-year period ended November 30, 1996. These financial statements and
financial highlights are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of the securities owned at
November 30, 1996 by correspondence with the custodian and brokers; where
replies were not received from brokers, we performed other auditing procedures.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Massachusetts
Investors Growth Stock Fund at November 30, 1996, the results of its operations,
the changes in its net assets, and its financial highlights for the respective
stated periods in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
January 3, 1997
--------------------------------------------
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>
MASSACHUSETTS INVESTORS GROWTH STOCK FUND
TRUSTEES CUSTODIAN
A. Keith Brodkin* - Chairman and State Street Bank and Trust Company
President
AUDITORS
Richard B. Bailey* - Private Investor; Deloitte & Touche LLP
Former Chairman and Director
(until 1991), Massachusetts INVESTOR INFORMATION
Financial Services Company; Director, For MFS stock and bond market outlooks,
Cambridge Bancorp; Director, call toll free: 1-800-637-4458 anytime
Cambridge Trust Company from a touch-tone telephone.
Peter G. Harwood - Private Investor For information on MFS mutual funds,
call your financial adviser or, for an
J. Atwood Ives - Chairman and Chief information kit, call toll free:
Executive Officer, Eastern Enterprises 1-800-637-2929 any business day from
9 a.m. to 5 p.m. Eastern time (or
Lawrence T. Perera - Partner, leave a message anytime).
Hemenway & Barnes
INVESTOR SERVICE
William J. Poorvu - Adjunct Professor, MFS Service Center, Inc.
Harvard University Graduate School of P.O. Box 2281
Business Administration Boston, MA 02107-9906
Charles W. Schmidt - Private Investor For general information, call toll
free: 1-800-225-2606 any business day
Arnold D. Scott* - Senior Executive Vice from 8 a.m. to 8 p.m. Eastern time.
President, Director and Secretary,
Massachusetts Financial Services Company For service to speech- or hearing-
impaired, call toll free:
Jeffrey L. Shames* - President and 1-800-637-6576 any business day from
Director, Massachusetts Financial 9 a.m. to 5 p.m. Eastern time.
Services Company (To use this service, your phone must
be equipped with a Telecommunications
Elaine R. Smith - Independent Consultant Device for the Deaf.)
David B. Stone - Chairman, North For share prices, account balances, and
American Management Corp. exchanges, call toll free: 1-800-MFS-
(investment advisers) TALK (1-800-637-8255) anytime from a
touch-tone telephone.
INVESTMENT ADVISER
Massachusetts Financial Services Company WORLD WIDE WEB
500 Boylston Street www.mfs.com
Boston, MA 02116-3741
[DALBAR graphic omitted]
DISTRIBUTOR For the third year in a row, MFS earned
MFS Fund Distributors, Inc. a #1 ranking in the DALBAR, Inc.
500 Boylston Street Broker/Dealer Survey, Main Office
Boston, MA 02116-3741 Operations Service Quality Category.
The firm achieved a 3.48 overall score
PORTFOLIO MANAGER on a scale of 1 to 4 in the 1996
Christian Felipe* survey. A total of 110 firms responded,
offering input on the quality of
TREASURER service they received from 29 mutual
W. Thomas London* fund companies nationwide. The survey
contained questions about service
ASSISTANT TREASURER quality in 15 categories, including
James O. Yost* "knowledge of phone service contacts,"
"accuracy of transaction processing,"
SECRETARY and "overall ease of doing business
Stephen E. Cavan* with the firm."
ASSISTANT SECRETARY
James R. Bordewick, Jr.*
*Affiliated with the Investment Adviser
<PAGE>
-------------
MASSACHUSETTS BULK RATE
INVESTORS GROWTH [DALBAR logo] U.S. POSTAGE
STOCK FUND PAID
PERMIT #55638
500 Boylston Street BOSTON, MA
Boston, MA 02116 -------------
[logo]
INVESTMENT MANAGEMENT
We invented the mutual fund(SM)
(C) 1997 MFS Fund Distributors, Inc., 500 Boylston Street, Boston, MA 02116
MIG-2 1/97 54M 13/213
