<PAGE>
[logo]
75 [graphic] MFS(R)
INVESTMENT MANGEMENT
YEARS
WE INVENTED THE MUTUAL FUND(R)
MASSACHUSETTS
INVESTORS TRUST
ANNUAL REPORT o DECEMBER 31, 1998
<PAGE>
TABLE OF CONTENTS
Letter from the Chairman .................................................. 1
Management Review and Outlook ............................................. 3
Performance Summary ....................................................... 8
Portfolio of Investments .................................................. 13
Financial Statements ...................................................... 19
Notes to Financial Statements ............................................. 26
Independent Auditors' Report .............................................. 33
MFS Prepares for the Year 2000 ............................................ 35
Trustees and Officers ..................................................... 37
MFS CELEBRATES ITS DIAMOND ANNIVERSARY!
MARCH 21, 1999, MARKS THE 75TH ANNIVERSARY OF MFS' INVENTION OF
THE MUTUAL FUND. THE MUTUAL FUND INDUSTRY HAS BROUGHT THE POWER
OF INVESTING TO EVERY AMERICAN, OFFERING THEM THE OPPORTUNITY FOR
COLLEGE DEGREES, HOME OWNERSHIP, AND COMFORTABLE RETIREMENT.
IMAGINE TODAY'S WORLD WITHOUT MUTUAL
FUNDS. WE COULDN'T. AND WHILE THE
YEARS AHEAD WILL BRING A NUMBER OF
CHALLENGES, OUR 75 YEARS OF EXPERIENCE
WILL HELP GUIDE A NEW GENERATION OF
INVESTORS INTO THE FUTURE.
[GRAPHIC OMITTED]
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
<PAGE>
LETTER FROM THE CHAIRMAN
[Photo of Jeffrey L. Shames]
Dear Shareholders,
In 1999, MFS celebrates its 75th anniversary. The nation's first mutual fund --
our Massachusetts Investors Trust (MIT) -- was introduced to the public on March
21, 1924. Since then, MFS Investment Management(R), the company that grew out of
that original fund, has helped guide shareholders through many economic and
investment cycles, primarily by focusing on the long-term opportunities created
by an expanding global economy. As of December 31, 1998, MFS manages nearly $100
billion, and the firm's 2,000 people serve almost four million investors and
their financial advisers worldwide. Meanwhile, MIT's assets have grown to over
$12 billion, and 56 mutual funds are offered in the MFS Family of Funds(R).
One of the elements in the success of MIT did not exist before our founders
invented it in 1924. That is daily redemption. This innovation means that
if you want to sell your investment in any MFS mutual fund, you have the
security of knowing that you may do so immediately by exchanging into another
MFS fund. Or, if you need your money for other purposes, it can quickly be
wired or mailed to you. This daily redemption feature, through which new
shares were created when people invested in MIT and were redeemed when people
sold, brought another important change to the industry. Now, the price of a
mutual fund's shares wasn't determined by supply and demand, but by the value
of the securities owned by the fund.
Another factor in our growth was the development of one of the industry's
first in-house research departments in 1932. Unlike companies that rely on
Wall Street research reports, which can be used by many investors at the same
time, MIT's managers built its long-term track record by visiting companies,
talking to managers and competitors, and "kicking the tires" so they could
judge the quality and potential of each company's products and services for
themselves. Today, MFS has more than 100 full-time portfolio managers, stock
analysts, and credit analysts who track the equity and bond markets. That
number includes over 35 equity analysts who specialize in industries such as
aviation, media, technology, automobiles, and utilities.
While MIT introduced the daily redemption feature, that was not our only
invention. We also established the nation's first global bond fund, first
high-yield municipal bond fund, and first high-yield municipal closed-end bond
fund.
We are proud of the record of MIT and of the funds in the MFS Family of Funds,
but we are also proud of our long-standing relationship with financial
advisers. Not only do we believe investors can benefit from the advice of
these experts but, as was shown during the market volatility of 1998, people
who work with financial advisers are less likely to abandon their carefully
designed, long-term investment strategies.
Our ability to service your investment and information needs is also extremely
important to us. The MFS Service Center handles millions of transactions and
phone calls every year. Supporting the work of financial advisers, promptly
sending out statements and confirmations, and answering hundreds of investors'
questions every day are crucial elements in maintaining long-term relationships
with our fund shareholders. That link to our investors has also been enhanced by
our site on the World Wide Web: WWW.MFS.COM. Since 1996, this site has given
investors and the general public access to up-to-date information about MFS
products and services, as well as market outlooks and retirement information.
The site has rapidly become one of our primary vehicles for communicating with
our investors and educating the public about mutual funds in general and MFS in
particular.
If there is a common thread running through these milestones, it is our
always-increasing commitment to providing you with the best possible
investment management and shareholder service, just as we have done for the
past 75 years.
As we celebrate this anniversary, it is also a time for MFS to look ahead and
build on our 75 years of innovation and experience to help meet your
investment needs in the next century. We appreciate your confidence and
welcome any questions or comments you may have.
Respectfully,
[Graphic Omitted]
Jeffrey L. Shames
Chairman and Chief Executive Officer
MFS Investment Management
January 15, 1999
<PAGE>
MANAGEMENT REVIEW AND OUTLOOK
For the 12 months ended December 31, 1998, Class A shares of the Trust
provided a total return of 22.95%, Class B shares 22.16%, Class C shares
22.11%, and Class I shares 23.40%. These returns, which include the
reinvestment of distributions but exclude the effects of any sales charges,
compare to a 28.58% return for the Standard & Poor's 500 Composite Index (the
S&P 500) for the same period. The S&P 500 is a popular, unmanaged index of
common stock total return performance.
Q. MFS AND MASSACHUSETTS INVESTORS TRUST (MIT) ARE CELEBRATING THEIR 75th
ANNIVERSARIES IN 1999. PLEASE DISCUSS WHAT THIS MILESTONE MEANS TO YOU AS
MANAGERS OF THIS PORTFOLIO AND ITS SIGNIFICANCE TO INVESTORS AND THE
INDUSTRY.
A. In a world with more than 7,000 mutual funds, of which only a small
fraction -- about one-tenth -- have a 10-year record, we're proud to manage
a portfolio with a 75-year record. We feel a special sense of
responsibility knowing that this portfolio has performed well through the
Great Depression, World War II, the Korean War, the oil crisis of the
1970s, and the Crash of 1987. MIT has never missed a quarterly dividend
payment in its history. Of course, past performance is no guarantee of
future results. Not only does it have this great heritage but even today,
at 75 years old, MIT continues to demonstrate strong performance. We've
built this heritage and performance record with strong stock research and
disciplined portfolio strategies that we hope will serve our investors well
for the next 75 years.
Q. AS WE APPROACH THE NEW MILLENNIUM IT'S HARD TO IMAGINE A WORLD WITHOUT
MUTUAL FUNDS. WHAT HAVE MUTUTAL FUNDS BROUGHT TO THE AVERAGE INVESTOR?
A. When MFS invented the mutual fund in America in 1924, our vision was to
democratize the world of investing so that more individuals and families
could participate in the growth of the world's prominent businesses.
Allowing individual investors to participate in the stock market with only
a small initial investment that would allow them to own shares in a variety
of companies was a revolutionary idea in 1924. Today, when we consider the
number of college educations received, retirement dreams achieved, and
homes purchased with the help of mutual funds, it's gratifying to know that
a much wider cross-section of America has taken advantage of the power of
investing. It is important to remember that there is no guarantee that a
fund will meet its investment objective, share price returns will fluctuate
with market conditions, and investors may experience a loss upon
redemption.
Q. AS AN INDUSTRY FOUNDER, DOES MFS HAVE ANY SPECIAL RESPONSIBILITIES
TO SHAREHOLDERS?
A. Absolutely. We have a responsibility to continue our history of innovation,
and to continue to leverage our Original Research(SM) methodology which has
its genesis in MFS' establishment of one of the first internal research
departments to provide in-house analytical capability. We also were among
the first fund companies to offer a retail mutual fund that is managed by a
committee of research analysts who are charged with investing shareholder's
dollars in their best investment ideas, regardless of market
capitalization, industry sector, or investment style. Down through the
years, MFS has been first to market with a variety of innovative investment
products such as the first fixed-income mutual fund and the first municipal
high-income mutual fund.
As for our responsibilities to the industry, MFS played a pioneering role in
helping to craft the legislation that governs the mutual fund industry today,
including the 1936 Revenue Act and the Investment Company Act of 1940. MIT
was also the first mutual fund to allow shareholders to take capital gains
distributions in either additional shares or cash, to make full public
disclosure of its operations in shareholder reports, and to register under
the Securities Act of 1933 ("Truth in Securities Act" or "Full Disclosure
Act"). We feel that we must continue to act as the leader in this
fast-changing business and to serve as expert guides for each generation of
future investors. By virtue of the fact that MFS has navigated its funds and
customers through more bull and bear markets than any other mutual fund
company, we feel a special responsibility to bring that experience and
expertise to current and future shareholders.
Q. HOW DID THE TRUST PERFORM DURING THIS PAST YEAR'S MARKET VOLATILITY?
A. The past year has been quite a wild one in the equity market, with a strong
first half followed by a warning correction in the late summer and early
fall and, finally, a strong fourth quarter. Through that volatility, the
Trust has done well.
Q. WHAT TYPES OF CHANGES HAVE YOU MADE TO THE PORTFOLIO IN THE PAST YEAR?
A. Over the course of the year, we reduced a large overweighting in financial
services by about 10% because we believe that the credit trends, cost
cutting, and consolidation that have made many of those stocks attractive
have run their course. In the current low-inflation, low-interest-rate
economic environment, we view stocks' valuations as less important than
companies' abilities to deliver consistent and reliable earnings.
Therefore, the assets taken from the financial services reductions were
used to boost our holdings in technology, and health care stocks that we
feel offer the earnings reliability this market requires. Examples of these
stocks include Microsoft and IBM in technology and Pfizer and American Home
Products in health care and pharmaceuticals.
Q. CAN YOU DISCUSS A PARTICULAR HOLDING IN THE PORTFOLIO THAT IS A GOOD
EXAMPLE OF YOUR INVESTMENT DISCIPLINE?
A. We rely on a research-focused investment discipline to help us discern
which companies' earnings are growing consistently. An interesting example
of our style can be found in our IBM holding. IBM is a company that is
known primarily as a hardware company but, in reality, about 50% of its
income comes from services and software. That's important because hardware
is a high-volatility, low-margin business that often carries a high price-
to-earnings ratio. Software and services represent the opposite type of
business -- low volatility, high margin -- and can generate steadier
revenue streams. When we started buying IBM earlier this year, its mid-
teens multiple reflected a hardware company, not a full-service technology
provider. In addition, the company had very solid cash flow and good
earnings, and it was engaged in a major stock buyback program, which is
good for investors. In all, IBM is a perfect stock for the portfolio. It is
a large-cap, blue-chip company with shareholder-friendly management, it has
a stock price that we deem a value because it reflects only a portion of
its business, and it has been paying a dividend. That the company is at the
beginning of a major hardware product cycle further boosts its
attractiveness. Our investment here has paid off handsomely thus far.
Q. HAVE YOU ADJUSTED THE PORTFOLIO'S INTERNATIONAL HOLDINGS IN THE PAST YEAR?
A. Not significantly. We have invested between 5% and 10% of the portfolio's
assets in international stocks. We only invest overseas if we find a
company that we believe has quality and growth potential equivalent to
those of a U.S. company and whose stock is selling at a discount sufficient
to compensate for currency risk.
Q. WHAT DO YOU THINK THE EQUITY MARKETS WILL HOLD FOR INVESTORS IN 1999?
A. Looking ahead, we are predicting slower earnings growth for domestic
equities in 1999, as well as low inflation and low interest rates. The
environment dictates that we pay close attention to earnings consistency
and reliability, so we do not intend to modify our fundamental method
for selecting stocks. Our discipline and our research focus have proved to be
sound, and we believe our approach will continue to work in the future.
/s/ Mitchell D. Dynan /s/ John D. Laupheimer, Jr.
- --------------------- ---------------------------
Mitchell D. Dynan John D. Laupheimer, Jr.
Portfolio Manager Portfolio Manager
The opinions expressed in this report are those of the portfolio managers and
are only through the end of the period of the report as stated on the cover.
The managers' views are subject to change at any time based on market and
other conditions, and no forecasts can be guaranteed.
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO MANAGERS' PROFILES
- --------------------------------------------------------------------------------
MITCHELL D. DYNAN IS SENIOR VICE PRESIDENT OF MFS INVESTMENT
MANAGEMENT(R). HE IS CO-PORTFOLIO MANAGER OF MASSACHUSETTS INVESTORS
TRUST, AMERICA'S OLDEST MUTUAL FUND. MR. DYNAN ALSO MANAGES MFS(R) UNION
STANDARD(R) EQUITY FUND, MFS(R) MERIDIAN(SM) U.S. EQUITY FUND, MFS(R)
AMERICAN(SM) U.S. EQUITY FUND, AND THE CONSERVATIVE GROWTH SERIES OFFERED
THROUGH MFS(R)/SUN LIFE ANNUITY PRODUCTS. HE JOINED MFS IN 1986 AS A
MEMBER OF THE RESEARCH DEPARTMENT AND WAS NAMED ASSISTANT VICE PRESIDENT
-- INVESTMENTS IN 1987, VICE PRESIDENT -- INVESTMENTS IN 1988, PORTFOLIO
MANAGER OF MASSACHUSETTS INVESTORS TRUST IN 1995, AND SENIOR VICE
PRESIDENT IN 1999. FROM 1983 TO 1986, MR. DYNAN WORKED AS A SECURITIES
ANALYST ON WALL STREET. HE STARTED HIS CAREER AS A BANK LENDING OFFICER IN
1979. A GRADUATE OF TUFTS UNIVERSITY, HE IS A MEMBER OF THE BOSTON SOCIETY
OF SECURITY ANALYSTS FEDERATION AND IS A CHARTERED FINANCIAL ANALYST.
JOHN D. LAUPHEIMER, JR., IS SENIOR VICE PRESIDENT AND DIRECTOR OF EQUITY
RESEARCH OF MFS INVESTMENT MANAGEMENT(R). HE IS ALSO LEAD PORTFOLIO
MANAGER OF MASSACHUSETTS INVESTORS TRUST, AMERICA'S OLDEST MUTUAL FUND. HE
ALSO MANAGES THE CONSERVATIVE GROWTH SERIES OFFERED THROUGH MFS(R)R/SUN
LIFE ANNUITY PRODUCTS, MFS(R) GROWTH WITH INCOME SERIES (PART OF MFS(R)
VARIABLE INSURANCE TRUST(SM)), AND CO-MANAGES THE MFS(R) AMERICAN(SM) U.S.
EQUITY FUND AND MFS(R) MERIDIAN(SM) U.S. EQUITY FUND. MR. LAUPHEIMER
JOINED THE MFS RESEARCH DEPARTMENT IN 1981 AS AN INDUSTRY SPECIALIST. HE
WAS NAMED INVESTMENT OFFICER IN 1983, ASSISTANT VICE PRESIDENT --
INVESTMENTS IN 1984, VICE PRESIDENT -- INVESTMENTS IN 1986, PORTFOLIO
MANAGER OF MFS(R) TOTAL RETURN FUND IN 1987, PORTFOLIO MANAGER OF
MASSACHUSETTS INVESTORS TRUST IN 1992, SENIOR VICE PRESIDENT IN 1995, AND
DIRECTOR OF EQUITY RESEARCH ON JANUARY 1, 1999. MR. LAUPHEIMER IS A
GRADUATE OF BOSTON UNIVERSITY AND THE SLOAN SCHOOL OF MANAGEMENT OF
MASSACHUSETTS INSTITUTE OF TECHNOLOGY. HE IS A CHARTERED FINANCIAL ANALYST
AND A MEMBER OF THE BOSTON SECURITY ANALYSTS SOCIETY, INC.
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. A prospectus containing more information,
including the exchange privilege and all charges and expenses, for any other MFS
product is available from your financial adviser, or by calling MFS at
1-800-225-2606. Please read it carefully before investing or sending money.
<PAGE>
- --------------------------------------------------------------------------------
FUND FACTS
- --------------------------------------------------------------------------------
OBJECTIVE: SEEKS REASONABLE CURRENT INCOME AND LONG-TERM GROWTH
OF INCOME AND CAPITAL.
COMMENCEMENT OF
INVESTMENT OPERATIONS: JULY 15, 1924
CLASS INCEPTION: CLASS A JULY 15, 1924
CLASS B SEPTEMBER 7, 1993
CLASS C JULY 1, 1996
CLASS I JANUARY 2, 1997
SIZE: $12.1 BILLION NET ASSETS AS OF DECEMBER 31, 1998
PERFORMANCE SUMMARY
The following information illustrates the historical performance of the Fund's
original share class in comparison to various market indicators. Performance
results include any applicable contingent deferred sales charges and reflect
the percentage change in net asset value, including reinvestment of dividends.
Benchmark comparisons are unmanaged and do not reflect any fees or expenses.
The performance of other share classes will be greater than or less than the
line shown. (See Notes to Performance Summary for more information.) It is not
possible to invest directly in an index.
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(For the 5-year period ended December 31, 1998)
[Graphic Omitted]
Massachusetts S&P 500 Consumer
Investors Composite Price Index
Trust - Class A Index - U.S.
- ----------------------------------------------------
12/93 $ 9,426 $10,000 $10,000
12/94 9,330 10,132 10,268
12/95 13,000 13,940 10,521
12/96 16,370 17,140 10,878
12/97 21,555 22,859 11,063
12/98 26,502 29,390 11,262
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(For the 10-year period ended December 31, 1998)
[Graphic Omitted]
Massachusetts S&P 500 Consumer
Investors Composite Price Index
Trust - Class A Index - U.S.
- ----------------------------------------------------
12/88 $ 9,430 $10,000 $10,000
12/90 12,822 12,760 11,104
12/92 17,578 17,915 11,772
12/94 19,144 19,982 12,423
12/96 33,584 33,802 13,162
12/98 54,377 57,961 13,627
AVERAGE ANNUAL TOTAL RETURNS THROUGH DECEMBER 31, 1998
CLASS A
10 Years/
1 Year 3 Years 5 Years Life
- --------------------------------------------------------------------------------
Average Annual Total Return +22.95% +26.80% +22.97% +19.15%
- --------------------------------------------------------------------------------
SEC Results +15.88% +24.32% +21.52% +18.45%
- --------------------------------------------------------------------------------
CLASS B
10 Years/
1 Year 3 Years 5 Years Life
- --------------------------------------------------------------------------------
Average Annual Total Return +22.16% +25.94% +22.03% +18.66%
- --------------------------------------------------------------------------------
SEC Results +18.16% +25.30% +21.84% +18.66%
- --------------------------------------------------------------------------------
CLASS C
10 Years/
1 Year 3 Years 5 Years Life
- --------------------------------------------------------------------------------
Average Annual Total Return +22.11% +26.09% +22.56% +18.95%
- --------------------------------------------------------------------------------
SEC Results +21.11% +26.09% +22.56% +18.95%
- --------------------------------------------------------------------------------
CLASS I
10 Years/
1 Year 3 Years 5 Years Life
- --------------------------------------------------------------------------------
Average Annual Total Return +23.40% +27.08% +23.13% +19.23%
- --------------------------------------------------------------------------------
COMPARATIVE INDICES
10 Years/
1 Year 3 Years 5 Years Life
- --------------------------------------------------------------------------------
Average growth and income fund* +15.61% +21.25% +18.35% +15.52%
- --------------------------------------------------------------------------------
Standard & Poor's 500 Composite
Index+ +28.58% +28.23% +24.06% +19.21%
- --------------------------------------------------------------------------------
Consumer Price Index+# + 1.80% + 2.30% + 2.41% + 3.14%
- --------------------------------------------------------------------------------
*Source: Lipper Analytical Services, Inc.
+Source: CDA/Wiesenberger.
#The Consumer Price Index is published by the U.S. Bureau of Labor Statistics
and measures the cost of living (inflation).
NOTES TO PERFORMANCE SUMMARY
Class A share ("A") SEC results include the maximum 5.75% sales charge. Class
B share ("B") SEC results reflect the applicable contingent deferred sales
charge (CDSC), which declines over six years from 4% to 0%. Class C shares
("C") have no initial sales charge but, like B, have higher annual fees and
expenses than A. C SEC results reflect the 1% CDSC applicable to shares
redeemed within 12 months. Class I shares ("I") have no sales charge or Rule
12b-1 fees and are only available to certain institutional investors.
B and C results include the performance and the operating expenses
(e.g., Rule 12b-1 fees) of A for periods prior to the inception of B and C.
Because operating expenses of B and C are higher than those of A, B and C
performance generally would have been lower than A performance. The A
performance included in the B and C SEC performance has been adjusted to
reflect the CDSC generally applicable to B and C rather than the initial sales
charge generally applicable to A.
I results include the performance and the operating expenses (e.g., Rule 12b-1
fees) of A for periods prior to the inception of I. Because operating expenses
of A are greater than those of I, I performance generally would have been
higher than A performance. The A performance included in the I performance has
been adjusted to reflect the fact that I have no initial sales charge.
Performance results reflect any applicable expense subsidies and waivers,
without which the results would have been less favorable. Subsidies and
waivers may be rescinded at any time. See the prospectus for details.
All results are historical and assume the reinvestment of dividends and
capital gains.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PAST PERFORMANCE
IS NO GUARANTEE OF FUTURE RESULTS.
RESULTS OF SHAREHOLDER PROXY SOLICITATION
Massachusetts Investors Trust (MIT) recently conducted a proxy solicitation
regarding a new investment advisory agreement between MIT and its investment
adviser, Massachusetts Financial Services Company. In accordance with
applicable laws, the proxy solicitation is terminated when a majority of MIT's
shareholders vote to either approve or disapprove of the proposal at issue.
The requisite majority was reached on December 11, 1998, and the results of
the solicitation were as follows:
ITEM 1. To approve a new investment advisory agreement between Massachusetts
Financial Services Company and Massachusetts Investors Trust.
% OF TOTAL
% OF SHARES
SHARES VOTED SHARES VOTED OUTSTANDING
- ------------------------------------------------------------------------
For 249,154,498.00 78.96% 50.05%
Against 36,730,838.00 11.64% 7.38%
Abstain 29,671,607.00 9.40% 5.96%
-- ----------- ------- ------
Total 315,556,943.00 100.00% 63.39%
PORTFOLIO CONCENTRATION AS OF DECEMBER 31, 1998
FIVE LARGEST STOCK SECTORS
[Graphic Omitted]
FINANCIAL SERVICES 18.7%
HEALTH CARE 14.7%
CONSUMER STAPLES 11.4%
UTILITIES & COMMUNICATIONS 11.1%
TECHNOLOGY 10.6%
TOP 10 STOCK HOLDINGS
<TABLE>
<CAPTION>
<S> <C>
PFIZER, INC. 2.4% XEROX CORP. 1.7%
Pharmaceutical products company Document products and services provider
MICROSOFT CORP. 2.2% UNITED TECHNOLOGIES CORP. 1.7%
Computer software and systems company Aerospace, defense, and building equipment
company
PHILIP MORRIS COS., INC. 2.0%
Tobacco, food, and beverage conglomerate INTERNATIONAL BUSINESS MACHINES CORP. 1.7%
Computer and business equipment company
BRISTOL-MYERS SQUIBB CO. 1.9%
Pharmaceutical products company GENERAL ELECTRIC CO. 1.7%
Diversified manufacturing and financial
AMERICAN HOME PRODUCTS CO. 1.8% services conglomerate
Pharmaceutical and home products company
SAFEWAY, INC. 1.6%
Grocery store chain
</TABLE>
The portfolio is actively managed, and current holdings may be different.
<PAGE>
PORTFOLIO OF INVESTMENTS -- December 31, 1998
<TABLE>
<CAPTION>
Stocks - 94.1%
- --------------------------------------------------------------------------------------------------------
ISSUER SHARES VALUE
- --------------------------------------------------------------------------------------------------------
U.S. Stocks - 89.0%
Aerospace - 3.4%
<S> <C> <C>
Allied Signal, Inc. 2,628,700 $ 116,484,269
General Dynamics Corp. 1,019,700 59,779,913
Lockheed-Martin Corp. 407,171 34,507,742
United Technologies Corp. 1,826,800 198,664,500
---------------
$ 409,436,424
- --------------------------------------------------------------------------------------------------------
Automotive - 0.7%
Federal-Mogul Corp. 1,345,300 $ 80,045,350
- --------------------------------------------------------------------------------------------------------
Banks and Credit Companies - 5.5%
Bankers Trust Corp. 442,000 $ 37,763,375
Comerica, Inc. 324,250 22,109,797
Firstar Corp. 538,356 50,201,697
Fleet Financial Group, Inc. 396,100 17,700,719
National City Corp. 1,315,200 95,352,000
Northern Trust Corp. 635,900 55,522,019
State Street Corp. 1,190,100 82,786,331
US Bancorp 2,712,000 96,276,000
Washington Mutual, Inc. 1,497,700 57,193,419
Wells Fargo Co.* 3,741,900 149,442,131
---------------
$ 664,347,488
- --------------------------------------------------------------------------------------------------------
Broadcasting - 0.1%
Infinity Broadcasting Corp.* 254,700 $ 6,972,413
- --------------------------------------------------------------------------------------------------------
Business Machines - 3.7%
International Business Machines Corp. 1,065,300 $ 196,814,175
Sun Microsystems, Inc.* 665,200 56,957,750
Xerox Corp. 1,687,800 199,160,400
---------------
$ 452,932,325
- --------------------------------------------------------------------------------------------------------
Business Services - 0.5%
Computer Sciences Corp. 201,600 $ 12,990,600
DST Systems, Inc.* 824,500 47,048,031
---------------
$ 60,038,631
- --------------------------------------------------------------------------------------------------------
Chemicals - 0.5%
Air Products & Chemicals, Inc. 1,244,100 $ 49,764,000
du Pont (E.I.) de Nemours & Co., Inc. 212,400 11,270,475
---------------
$ 61,034,475
- --------------------------------------------------------------------------------------------------------
Computer Software - Personal Computers - 2.1%
Microsoft Corp.* 1,800,500 $ 249,706,844
- --------------------------------------------------------------------------------------------------------
Computer Software - Services - 0.2%
EMC Corp.* 239,300 $ 20,340,500
- --------------------------------------------------------------------------------------------------------
Computer Software - Systems - 1.6%
BMC Software, Inc.* 791,600 $ 35,275,675
Computer Associates International, Inc. 1,667,100 71,060,138
Oracle Corp.* 2,056,700 88,695,187
---------------
$ 195,031,000
- --------------------------------------------------------------------------------------------------------
Consumer Goods and Services - 9.9%
Black & Decker Corp. 1,660,900 $ 93,114,206
Clorox Co. 421,090 49,188,576
Colgate-Palmolive Co. 625,000 58,046,875
Gillette Co. 2,392,200 115,573,162
Kimberly-Clark Corp. 2,391,000 130,309,500
Newell Co. 2,111,600 87,103,500
Philip Morris Cos., Inc. 4,318,000 231,013,000
Procter & Gamble Co. 1,498,100 136,795,256
Service Corp. International 3,236,011 123,170,669
Tyco International Ltd. 2,330,900 175,837,269
---------------
$ 1,200,152,013
- --------------------------------------------------------------------------------------------------------
Electrical Equipment - 2.7%
Emerson Electric Co. 1,400,200 $ 84,712,100
General Electric Co. 1,923,700 196,337,631
Honeywell, Inc. 667,000 50,233,438
---------------
$ 331,283,169
- --------------------------------------------------------------------------------------------------------
Electronics - 1.2%
Intel Corp. 1,219,600 $ 144,598,825
- --------------------------------------------------------------------------------------------------------
Entertainment - 2.1%
Disney (Walt) Co. 2,639,100 $ 79,173,000
MediaOne Group, Inc.* 1,284,800 60,385,600
Time Warner, Inc. 1,826,600 113,363,363
---------------
$ 252,921,963
- --------------------------------------------------------------------------------------------------------
Financial Institutions - 2.3%
Associates First Capital Corp., "A" 3,000,616 $ 127,151,103
Federal Home Loan Mortgage Corp. 2,437,500 157,066,406
---------------
$ 284,217,509
- --------------------------------------------------------------------------------------------------------
Food and Beverage Products - 3.7%
Anheuser Busch Cos., Inc. 1,149,100 $ 75,409,687
Bestfoods Co. 821,500 43,744,875
Coca-Cola Co. 217,900 14,572,063
Hershey Foods Corp. 2,403,600 149,473,875
Interstate Bakeries Corp. 1,247,700 32,986,069
PepsiCo., Inc. 513,900 21,037,781
Ralston-Ralston Purina Co. 3,275,500 106,044,312
---------------
$ 443,268,662
- --------------------------------------------------------------------------------------------------------
Insurance - 8.5%
Allstate Corp. 2,612,000 $ 100,888,500
American International Group, Inc. 600,600 58,032,975
Chubb Corp. 538,400 34,928,700
CIGNA Corp. 1,672,000 129,266,500
Equitable Cos., Inc. 724,600 41,936,225
Hartford Financial Services Group, Inc. 2,673,000 146,680,875
Lincoln National Corp. 1,205,000 98,584,063
MBIA, Inc. 677,300 44,405,481
Progressive Corp. 1,089,500 184,534,062
Torchmark Corp. 2,602,000 91,883,125
Transamerica Corp. 833,600 96,280,800
---------------
$ 1,027,421,306
- --------------------------------------------------------------------------------------------------------
Manufacturing - 0.4%
Illinois Tool Works, Inc. 931,300 $ 54,015,400
- --------------------------------------------------------------------------------------------------------
Medical and Health Products - 11.0%
American Home Products Corp. 3,756,100 $ 211,515,381
Arterial Vascular Engineering, Inc.* 301,700 15,839,250
Bristol-Myers Squibb Co. 1,610,500 215,505,031
Eli Lilly & Co. 449,300 39,931,538
Johnson & Johnson 1,890,000 158,523,750
McKesson Corp. 1,552,300 122,728,719
Merck & Co., Inc. 124,920 18,449,123
Pfizer, Inc. 2,193,500 275,147,156
Pharmacia & Upjohn, Inc. 1,687,100 95,532,037
Schering Plough Corp. 1,081,060 59,728,565
Warner-Lambert Co. 1,612,800 121,262,400
---------------
$ 1,334,162,950
- --------------------------------------------------------------------------------------------------------
Medical and Health Technology and Services - 2.9%
Guidant Corp. 1,045,100 $ 115,222,275
HealthSouth Corp.* 1,977,551 30,528,444
Medtronic, Inc. 818,200 60,751,350
Tenet Healthcare Corp.* 2,880,200 75,605,250
United Healthcare Corp. 1,721,000 74,110,562
---------------
$ 356,217,881
- --------------------------------------------------------------------------------------------------------
Oils - 3.6%
Chevron Corp. 210,400 $ 17,450,050
Conoco, Inc., "A"* 1,013,000 21,146,375
Exxon Corp. 2,486,100 181,796,062
Mobil Corp. 1,512,500 131,776,562
Texaco, Inc. 1,221,300 64,576,238
USX-Marathon Group 547,100 16,481,388
---------------
$ 433,226,675
- --------------------------------------------------------------------------------------------------------
Photographic Products - 0.6%
Eastman Kodak Co. 954,100 $ 68,695,200
- --------------------------------------------------------------------------------------------------------
Pollution Control - 0.4%
Waste Management, Inc. 1,036,262 $ 48,315,716
- --------------------------------------------------------------------------------------------------------
Printing and Publishing - 1.1%
Gannett Co., Inc. 984,500 $ 63,500,250
Tribune Co. 1,075,400 70,976,400
---------------
$ 134,476,650
- --------------------------------------------------------------------------------------------------------
Railroads - 0.2%
Burlington Northern Santa Fe Railway Co. 557,800 $ 18,825,750
- --------------------------------------------------------------------------------------------------------
Restaurants and Lodging - 0.2%
McDonalds Corp. 372,800 $ 28,565,800
- --------------------------------------------------------------------------------------------------------
Stores - 5.5%
American Stores Co. 554,900 $ 20,496,619
CVS Corp. 1,467,200 80,696,000
Dayton Hudson Corp. 1,144,200 62,072,850
Home Depot, Inc. 1,407,700 86,133,644
Nordstrom, Inc. 1,323,000 45,891,562
Office Depot, Inc.* 1,467,300 54,198,394
Rite Aid Corp. 3,288,600 162,991,237
TJX Cos., Inc. 3,404,200 98,721,800
Wal-Mart Stores, Inc. 751,200 61,175,850
---------------
$ 672,377,956
- --------------------------------------------------------------------------------------------------------
Supermarkets - 3.0%
Albertsons, Inc. 804,100 $ 51,211,119
Kroger Co.* 1,024,200 61,964,100
Meyer (Fred), Inc.* 1,085,600 65,407,400
Safeway, Inc.* 3,082,700 187,852,031
---------------
$ 366,434,650
- --------------------------------------------------------------------------------------------------------
Telecommunications - 6.9%
Alltel Corp. 2,436,000 $ 145,703,250
Ameritech Corp. 327,200 20,736,300
Bell Atlantic Corp. 1,426,300 75,593,900
Cisco Systems, Inc.* 442,900 41,106,656
Lucent Technologies, Inc. 776,800 85,448,000
MCI WorldCom, Inc.* 2,402,944 172,411,232
SBC Communications, Inc. 2,993,300 160,515,712
Sprint Corp. 1,463,900 123,150,588
Sprint PCS* 455,050 10,523,031
---------------
$ 835,188,669
- --------------------------------------------------------------------------------------------------------
Utilities - Electric - 3.0%
CMS Energy Corp. 849,400 $ 41,142,813
FirstEnergy Corp. 1,400,200 45,594,012
GPU, Inc. 826,800 36,534,225
New Century Energies, Inc. 587,900 28,660,125
Peco Energy Co. 1,372,900 57,146,962
Pinnacle West Capital Corp. 794,700 33,675,413
Texas Utilities Co. 1,697,800 79,266,037
Unicom Corp. 950,700 36,661,369
---------------
$ 358,680,956
- --------------------------------------------------------------------------------------------------------
Utilities - Gas - 0.9%
Columbia Energy Group 1,424,800 $ 82,282,200
KN Energy, Inc. 741,800 26,982,975
---------------
$ 109,265,175
- --------------------------------------------------------------------------------------------------------
Utilities - Telephone - 0.6%
BellSouth Corp. 1,484,000 $ 74,014,500
- --------------------------------------------------------------------------------------------------------
Total U.S. Stocks $10,776,212,825
- --------------------------------------------------------------------------------------------------------
Foreign Stocks - 5.1%
Bermuda - 0.7%
Ace Ltd. (Insurance) 493,400 $ 16,991,462
EXEL Ltd., "A" (Insurance) 854,400 64,080,000
---------------
$ 81,071,462
- --------------------------------------------------------------------------------------------------------
Canada - 0.6%
Canadian National Railway Co. (Railroads) 1,397,800 $ 72,510,875
- --------------------------------------------------------------------------------------------------------
France - 0.2%
Alcatel Alsthom Compagnie, ADR
(Telecommunications) 999,000 $ 24,413,062
- --------------------------------------------------------------------------------------------------------
Italy - 0.3%
Sao Paolo Imi S.p.A (Banks and Credit Cos.)* 2,269,436 $ 40,128,092
- --------------------------------------------------------------------------------------------------------
Japan - 0.3%
AFLAC, Inc. (Insurance) 948,200 $ 41,720,800
- --------------------------------------------------------------------------------------------------------
Switzerland - 0.4%
Nestle S.A. (Food and Beverage Products) 20,100 $ 43,756,098
- --------------------------------------------------------------------------------------------------------
United Kingdom - 2.6%
British Petroleum PLC, ADR (Oils) 1,825,964 $ 173,466,580
Rentokil Initial PLC (Environmental Services) 5,767,400 43,532,313
Reuters Group PLC (Business Services) 4,848,331 51,072,399
Reuters Group PLC, ADR (Business Services) 682,165 43,232,207
---------------
$ 311,303,499
- --------------------------------------------------------------------------------------------------------
Total Foreign Stocks $ 614,903,888
- --------------------------------------------------------------------------------------------------------
Total Stocks (Identified Cost, $8,597,447,574) $11,391,116,713
- --------------------------------------------------------------------------------------------------------
Convertible Preferred Stocks - 0.6%
- --------------------------------------------------------------------------------------------------------
ISSUER SHARES VALUE
- --------------------------------------------------------------------------------------------------------
Agriculture - 0.1%
Monsanto Co., 6.50%* 209,300 $ 10,255,700
- --------------------------------------------------------------------------------------------------------
Consumer Goods and Services - 0.1%
Newell Financial Trust I, 5.25%##* 264,300 $ 13,941,825
- --------------------------------------------------------------------------------------------------------
Utilities - Electric - 0.4%
Houston Industries, Inc., 7.00% 269,700 $ 28,689,338
Texas Utilities Co., 3.315% 335,000 16,163,750
---------------
$ 44,853,088
- --------------------------------------------------------------------------------------------------------
Total Convertible Preferred Stocks
(Identified Cost, $48,286,497) $ 69,050,613
- --------------------------------------------------------------------------------------------------------
Bonds - 0.2%
- --------------------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT
(000 OMITTED)
- --------------------------------------------------------------------------------------------------------
Financial Services - 0.2%
CIT Group Holdings, Inc., 5.33s, 1999
(Identified Cost, $19,937,817) $ 20,000 $ 19,937,817
- --------------------------------------------------------------------------------------------------------
Short-Term Obligations - 4.3%
- --------------------------------------------------------------------------------------------------------
Federal Farm Credit Bank, due 1/26/99 - 2/11/99 $ 50,000 $ 49,759,711
Federal Home Loan Bank, due 1/04/99 - 2/19/99 55,000 54,761,019
Federal Home Loan Mortgage Corp., due 1/04/99 -
3/09/99 285,014 283,791,130
Federal National Mortgage Assn., due 1/05/99 -
2/18/99 76,173 75,932,824
Ford Motor Credit Corp., due 1/04/99 48,120 48,099,870
Metropolitan Life Funding, Inc., due 1/14/99 15,000 14,971,562
- --------------------------------------------------------------------------------------------------------
Total Short-Term Obligations, at Amortized Cost $ 527,316,116
- --------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $9,192,988,004) $12,007,421,259
Other Assets, Less Liabilities - 0.8% 96,802,791
- --------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $12,104,224,050
- --------------------------------------------------------------------------------------------------------
</TABLE>
*Non-income producing security.
##SEC Rule 144A restriction.
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
- --------------------------------------------------------------------------------
DECEMBER 31, 1998
- --------------------------------------------------------------------------------
Assets:
Investments, at value (identified cost,
$9,192,988,004) $12,007,421,259
Cash 906,640
Foreign currency, at value (identified cost, $7,669) 7,516
Net receivable for foreign currency exchange contracts
closed or subject to master netting agreements 141,350
Receivable for Trust shares sold 104,886,961
Receivable for investments sold 8,351,122
Dividends and interest receivable 13,352,978
Other assets 39,651
---------------
Total assets $12,135,107,477
---------------
Liabilities:
Payable for investments purchased $ 12,826,733
Payable for Trust shares reacquired 16,270,899
Payable to affiliates -
Management fee 110,557
Shareholder servicing agent fee 36,982
Distribution and service fee 195,755
Accrued expenses and other liabilities 1,442,501
---------------
Total liabilities $ 30,883,427
---------------
Net assets $12,104,224,050
===============
Net assets consist of:
Paid-in capital $ 9,237,092,952
Unrealized appreciation on investments and translation
of assets and liabilities in foreign currencies 2,814,599,644
Accumulated undistributed net realized gain on
investments and foreign currency transactions 52,704,368
Accumulated distributions in excess of net investment
income (172,914)
---------------
Total $12,104,224,050
===============
Shares of beneficial interest outstanding 600,394,970
===========
Class A shares:
Net asset value per share
(net assets of $7,187,918,671 / 354,985,635 shares
of beneficial interest outstanding) $20.25
======
Offering price per share (100 / 94.25 of net asset
value per share) $21.48
======
Class B shares:
Net asset value and offering price per share
(net assets of $3,861,840,980 / 192,735,647 shares
of beneficial interest outstanding) $20.04
======
Class C shares:
Net asset value and offering price per share
(net assets of $824,367,162 / 41,319,057 shares of
beneficial interest outstanding) $19.95
======
Class I shares:
Net asset value, offering price, and redemption price per share
(net assets of $230,097,237 / 11,354,631 shares of
beneficial interest outstanding) $20.26
======
On sales of $50,000 or more, the offering price of Class A shares is reduced. A
contingent deferred sales charge may be imposed on redemptions of Class A, Class
B, and Class C shares.
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS -- continued
<TABLE>
<CAPTION>
Statement of Operations
- -------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1998
- -------------------------------------------------------------------------------
Net investment income:
Income -
<S> <C>
Dividends $ 119,470,174
Interest 20,945,074
Foreign taxes withheld (1,103,683)
--------------
Total investment income $ 139,311,565
--------------
Expenses -
Management fee $ 16,366,164
Trustees' compensation 160,895
Shareholder servicing agent fee 9,881,437
Distribution and service fee (Class A) 19,261,499
Distribution and service fee (Class B) 25,810,404
Distribution and service fee (Class C) 4,802,831
Administrative fee 313,021
Custodian fee 1,497,138
Printing 195,581
Postage 930,307
Auditing fees 36,645
Legal fees 36,073
Miscellaneous 4,876,284
--------------
Total expenses $ 84,168,279
Fees paid indirectly (575,055)
--------------
Net expenses $ 83,593,224
--------------
Net investment income $ 55,718,341
--------------
Realized and unrealized gain (loss) on investments:
Realized gain (identified cost basis) -
Investment transactions $ 552,796,699
Foreign currency transactions 543,898
--------------
Net realized gain on investments and foreign currency
transactions $ 553,340,597
--------------
Change in unrealized appreciation (depreciation) -
Investments $1,202,621,120
Translation of assets and liabilities in foreign currencies (226,364)
--------------
Net unrealized gain on investments and foreign currency
translation $1,202,394,756
--------------
Net realized and unrealized gain on investments and foreign
currency $1,755,735,353
--------------
Increase in net assets from operations $1,811,453,694
==============
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS -- continued
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
- -------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1998 1997
- -------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets:
From operations -
<S> <C> <C>
Net investment income $ 55,718,341 $ 42,758,249
Net realized gain on investments and foreign
currency transactions 553,340,597 475,712,512
Net unrealized gain on investments and foreign
currency translation 1,202,394,756 679,447,907
--------------- --------------
Increase in net assets from operations $ 1,811,453,694 $1,197,918,668
--------------- --------------
Distributions declared to shareholders -
From net investment income (Class A) $ (47,277,704) $ (36,968,683)
From net investment income (Class B) (6,574,313) (4,911,186)
From net investment income (Class C) (1,450,350) (625,297)
From net investment income (Class I) (990,881) (253,082)
From net realized gain on investments and foreign
currency transactions (Class A) (338,382,495) (291,966,401)
From net realized gain on investments and foreign
currency transactions (Class B) (173,242,177) (101,973,791)
From net realized gain on investments and foreign
currency transactions (Class C) (35,278,921) (14,088,283)
From net realized gain on investments and foreign
currency transactions (Class I) (9,493,659) (1,559,900)
In excess of net investment income (Class A) (689,782) (1,515,419)
In excess of net investment income (Class B) (95,919) (201,319)
In excess of net investment income (Class C) (21,161) (25,633)
In excess of net investment income (Class I) (14,457) (10,374)
--------------- --------------
Total distributions declared to shareholders $ (613,511,819) $ (454,099,368)
--------------- --------------
Net increase in net assets from Trust share
transactions $ 4,827,471,013 $2,208,342,129
--------------- --------------
Total increase in net assets $ 6,025,412,888 $2,952,161,429
Net assets:
At beginning of period 6,078,811,162 3,126,649,733
--------------- --------------
At end of period (including accumulated undistributed
(distributions in excess of) net investment income of
$(172,914) and $574,907, respectively) $12,104,224,050 $6,078,811,162
=============== ==============
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS -- continued
<TABLE>
<CAPTION>
Financial Highlights
- -----------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1998 1997 1996 1995 1994
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS A
- -----------------------------------------------------------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
<S> <C> <C> <C> <C> <C>
Net asset value - beginning of period $17.52 $14.46 $12.71 $10.07 $11.50
------ ------ ------ ------ ------
Income from investment operations# -
Net investment income $ 0.17 $ 0.18 $ 0.21 $ 0.25 $ 0.25
Net realized and unrealized gain (loss)
on investments and foreign currency 3.77 4.33 3.07 3.67 (0.36)
------ ------ ------ ------ ------
Total from investment operations $ 3.94 $ 4.51 $ 3.28 $ 3.92 $(0.11)
------ ------ ------ ------ ------
Less distributions declared to shareholders -
From net investment income $(0.16) $(0.17) $(0.21) $(0.46) $(0.25)
From net realized gain on investments and
foreign currency transactions (1.05) (1.27) (1.32) (0.82) (1.05)
In excess of net investment income (0.00)+++ (0.01) -- -- (0.00)+++
In excess of net realized gain on
investments and foreign currency
transactions -- -- -- -- (0.02)
------ ------ ------ ------ ------
Total distributions declared to
shareholders $(1.21) $(1.45) $(1.53) $(1.28) $(1.32)
------ ------ ------ ------ ------
Net asset value - end of period $20.25 $17.52 $14.46 $12.71 $10.07
====== ====== ====== ====== ======
Total return(+) 22.95% 31.69% 25.90% 39.34% (1.02)%
Ratios (to average net assets)/Supplemental data:
Expenses## 0.73% 0.74% 0.74% 0.70% 0.71%
Net investment income 0.86% 1.09% 1.51% 2.13% 2.20%
Portfolio turnover 54% 44% 47% 54% 87%
Net assets at end of period (000,000
omitted) $7,188 $4,323 $2,678 $2,074 $1,535
</TABLE>
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##For fiscal years ending after September 1, 1995, the Trust has an expense
offset arrangement which reduces the Trust's custodian fee based upon the
amount of cash maintained by the Trust with its custodian and dividend
disbursing agent. The Trust's expenses are calculated without reduction for
this expense offset arrangement.
(+)Total returns for Class A shares do not include the applicable sales
charge. If the charge had been included, the results would have been lower.
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS -- continued
<TABLE>
<CAPTION>
Financial Highlights - continued
- -----------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1998 1997 1996 1995 1994
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS B
- -----------------------------------------------------------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
<S> <C> <C> <C> <C> <C>
Net asset value - beginning of period $17.36 $14.36 $12.63 $10.03 $11.48
------ ------ ------ ------ ------
Income from investment operations# -
Net investment income $ 0.04 $ 0.07 $ 0.10 $ 0.15 $ 0.15
Net realized and unrealized gain (loss)
on investments and foreign currency 3.74 4.28 3.06 3.64 (0.36)
------ ------ ------ ------ ------
Total from investment operations $ 3.78 $ 4.35 $ 3.16 $ 3.79 $(0.21)
------ ------ ------ ------ ------
Less distributions declared to shareholders -
From net investment income $(0.05) $(0.08) $(0.11) $(0.37) $(0.17)
From net realized gain on investments and
foreign currency transactions (1.05) (1.27) (1.32) (0.82) (1.05)
In excess of net investment income (0.00)+++ (0.00)+++ -- -- (0.00)+++
In excess of net realized gain on
investments and foreign currency
transactions -- -- -- -- (0.02)
------ ------ ------ ------ ------
Total distributions declared to
shareholders $(1.10) $(1.35) $(1.43) $(1.19) $(1.24)
------ ------ ------ ------ ------
Net asset value - end of period $20.04 $17.36 $14.36 $12.63 $10.03
====== ====== ====== ====== ======
Total return 22.16% 30.75% 25.05% 38.05% (1.88)%
Ratios (to average net assets)/Supplemental data:
Expenses## 1.39% 1.41% 1.54% 1.56% 1.61%
Net investment income 0.20% 0.42% 0.72% 1.25% 1.37%
Portfolio turnover 54% 44% 47% 54% 87%
Net assets at end of period (000,000
omitted) $3,862 $1,522 $437 $165 $69
</TABLE>
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##For fiscal periods ending after September 1, 1995, the Trust has an
expense offset arrangement which reduces the Trust's custodian fee based
upon the amount of cash maintained by the Trust with its custodian and
dividend disbursing agent. The Trust's expenses are calculated without
reduction for this expense offset arrangement.
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS -- continued
<TABLE>
<CAPTION>
Financial Highlights - continued
- ----------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, PERIOD ENDED
------------------------------------- DECEMBER 31,
1998 1997 1996*
- --------------------------------------------------------------------------------------------------------------------------------
CLASS C
- --------------------------------------------------------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
<S> <C> <C> <C>
Net asset value - beginning of period $17.30 $14.33 $13.93
------ ------ ------
Income from investment operations# -
Net investment income $ 0.04 $ 0.07 $ 0.05
Net realized and unrealized gain on investments and
foreign currency 3.72 4.27 1.76
------ ------ ------
Total from investment operations $ 3.76 $ 4.34 $ 1.81
------ ------ ------
Less distributions declared to shareholders -
From net investment income $(0.06) $(0.10) $(0.09)
From net realized gain on investments and foreign
currency transactions (1.05) (1.27) (1.32)
In excess of net investment income (0.00)+++ (0.00)+++ --
------ ------ ------
Total distributions declared to shareholders $(1.11) $(1.37) $(1.41)
------ ------ ------
Net asset value - end of period $19.95 $17.30 $14.33
====== ====== ======
Total return 22.11% 30.76% 12.74%++
Ratios (to average net assets)/Supplemental data:
Expenses## 1.40% 1.41% 1.49%+
Net investment income 0.20% 0.42% 0.77%+
Portfolio turnover 54% 44% 47%
Net assets at end of period (000,000 omitted) $824 $211 $12
</TABLE>
*For the period from the inception of Class C, July 1, 1996, through
December 31, 1996.
+Annualized.
++Not annualized.
+++Per share amount was less than $0.01.
#Per share data are based on average shares outstanding.
##The Trust has an expense offset arrangement which reduces the Trust's
custodian fee based upon the amount of cash maintained by the Trust with its
custodian and dividend disbursing agent. The Trust's expenses are calculated
without reduction for this expense offset arrangement.
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS -- continued
<TABLE>
<CAPTION>
Financial Highlights - continued
- -------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1998 1997*
- -------------------------------------------------------------------------------------------------------------------
CLASS I
- -------------------------------------------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
<S> <C> <C>
Net asset value - beginning of period $17.52 $14.33
------ ------
Income from investment operations# -
Net investment income $ 0.24 $ 0.26
Net realized and unrealized gain on investments and foreign
currency 3.77 4.44
------ ------
Total from investment operations $ 4.01 $ 4.70
------ ------
Less distributions declared to shareholders -
From net investment income $(0.22) $(0.23)
From net realized gain on investments and foreign currency
transactions (1.05) (1.27)
In excess of net investment income (0.00)+++ (0.01)
------ ------
Total distributions declared to shareholders $(1.27) $(1.51)
------ ------
Net asset value - end of period $20.26 $17.52
====== ======
Total return 23.40% 33.30%++
Ratios (to average net assets)/Supplemental data:
Expenses## 0.41% 0.41%+
Net investment income 1.19% 1.42%+
Portfolio turnover 54% 44%
Net assets at end of period (000,000 omitted) $230 $23
</TABLE>
*For the period from the inception of Class I, January 2, 1997, through
December 31, 1997.
+Annualized.
++Not annualized.
#Per share data are based on average shares outstanding.
##The Trust has an expense offset arrangement which reduces the Trust's
custodian fee based upon the amount of cash maintained by the Trust with its
custodian and dividend disbursing agent. The Trust's expenses are calculated
without reduction for this expense offset arrangement.
See notes to financial statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(1) Business and Organization
Massachusetts Investors Trust (the Trust) was organized as a common law trust
under the laws of the Commonwealth of Massachusetts in 1924 and is registered
under the Investment Company Act of 1940, as amended, as an open-end
management investment company.
(2) Significant Accounting Policies
General - The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Investments in foreign securities are vulnerable to the effects of changes in
the relative values of the local currency and the U.S. dollar and to the
effects of changes in each country's legal, political, and economic
environment.
Investment Valuations - Equity securities listed on securities exchanges or
reported through the NASDAQ system are reported at market value using last
sale prices. Unlisted equity securities or listed equity securities for which
last sale prices are not available are reported at market value using last
quoted bid prices. Debt securities (other than short-term obligations which
mature in 60 days or less), including listed issues and forward contracts, are
valued on the basis of valuations furnished by dealers or by a pricing service
with consideration to factors such as institutional-size trading in similar
groups of securities, yield, quality, coupon rate, maturity, type of issue,
trading characteristics, and other market data, without exclusive reliance
upon exchange or over-the-counter prices. Short-term obligations, which mature
in 60 days or less, are valued at amortized cost, which approximates 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.
Forward Foreign Currency Exchange Contracts - The Trust may enter into forward
foreign currency exchange contracts for the purchase or sale of a specific
foreign currency at a fixed price on a future date. Risks may arise upon
entering into these contracts from the potential inability of counterparties
to meet the terms of their contracts and from unanticipated movements in the
value of a foreign currency relative to the U.S. dollar. The Trust may enter
into forward contracts for hedging purposes as well as for non-hedging
purposes. For hedging purposes, the Trust may enter into contracts to deliver
or receive foreign currency it will receive from or require for its normal
investment activities. The Trust may also use contracts in a manner intended
to protect foreign currency-denominated securities from declines in value due
to unfavorable exchange rate movements. For non-hedging purposes, the Trust
may enter into contracts with the intent of changing the relative exposure of
the Trust's portfolio of securities to different currencies to take advantage
of anticipated changes. The forward foreign currency exchange contracts are
adjusted by the daily exchange rate of the underlying currency and any gains
or losses are recorded as unrealized until the contract settlement date. On
contract settlement date, the gains or losses are recorded as realized gains
or losses on foreign currency transactions.
Investment Transactions and Income - Investment transactions are recorded on
the trade date. Interest income is recorded on the accrual basis. All discount
is accreted for financial statement and tax reporting purposes as required by
federal income tax regulations. Dividends received in cash are recorded on the
ex-dividend date. Dividend 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 Trust's custody fee is calculated as a percentage
of the Trust's month end net assets. The fee is reduced according to an
arrangement that measures the value of cash deposited with the custodian by
the Trust. This amount is shown as a reduction of expenses on the Statement of
Operations.
Tax Matters and Distributions - The Trust'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 Trust 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 Trust's tax return
and, consequently, the character of distributions to shareholders reported in
the financial highlights may differ from that reported to shareholders on Form
1099-DIV.
Distributions to shareholders are recorded on the ex-dividend date. The Trust
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 net realized gains. During
the year ended December 31, 1998, accumulated distributions in excess of net
investment income was decreased by $648,405, accumulated undistributed net
realized gain on investments and foreign currency transactions was decreased
by $7,720,917 and paid in capital was increased by $7,072,512 due to
differences between book and tax accounting for currency transactions. This
change had no effect on the net assets or net asset value per share. At
December 31, 1998, accumulated undistributed net realized gain on investments
and foreign currency transactions under book accounting were different from
tax accounting due to temporary differences in accounting for losses on wash
sale transactions.
Multiple Classes of Shares of Beneficial Interest - The Trust offers multiple
classes of shares, which differ in their respective distribution and service
fees. All shareholders bear the common expenses of the Trust 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. Class B shares will convert to Class A
shares approximately eight years after purchase.
(3) Transactions with Affiliates
Investment Adviser - The Trust has an investment advisory agreement with
Massachusetts Financial Services Company (MFS) to provide overall investment
advisory and administrative services, and general office facilities. Effective
December 15, 1998, the management fee is computed and paid monthly at an
annual rate of 0.33% of the Trust's average daily net assets. Prior to this
date the management fee was computed and paid monthly, fixed by a formula
based upon a percentage of the Trust's average daily net assets plus a
percentage of the Trust's gross income equivalent, on a annualized basis, to
0.19% of the Trust's average daily net assets.
The Trust pays no compensation directly to its Trustees who are officers of
the investment adviser, or to officers of the Trust, all of whom receive
remuneration for their services to the Trust from MFS. Certain officers and
Trustees of the Trust are officers or directors of MFS, MFS Fund Distributors,
Inc. (MFD), and MFS Service Center, Inc. (MFSC). The Trust 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
$48,695 for the year ended December 31, 1998.
Administrator - The Trust has an administrative services agreement with MFS to
provide the Trust with certain financial, legal, shareholder servicing,
compliance, and other administrative services. As a partial reimbursement for
the cost of providing these services, the Trust pays MFS an administrative fee
at the following annual percentages of the Trust's average daily net assets:
First $1 billion 0.0150%
Next $1 billion 0.0125%
Next $1 billion 0.0100%
In excess of $3 billion 0.0000%
Distributor - MFD, a wholly owned subsidiary of MFS, as distributor, received
$5,263,685 for the year ended December 31, 1998, as its portion of the sales
charge on sales of Class A shares of the Trust.
The Trustees have adopted a distribution plan for Class A, Class B, and Class
C shares pursuant to Rule 12b-1 of the Investment Company Act of 1940 as
follows:
The Trust's distribution plan provides that the Trust 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 Trust related to the
distribution and servicing of its shares. These expenses include a service fee
paid to each securities dealer that enters into a sales agreement with MFD of
up to 0.25% per annum (reduced to 0.15% per annum for assets sold prior to
January 2, 1991) of the Trust's average daily net assets attributable to Class
A shares which are attributable to that securities dealer and a distribution
fee to MFD of up to 0.10% per annum of the Trust's average daily net assets
attributable to Class A shares. MFD retains the service fee for accounts not
attributable to a securities dealer, which amounted to $3,126,551 for the year
ended December 31, 1998. Fees incurred under the distribution plan during the
year ended December 31, 1998, were 0.34% of average daily net assets
attributable to Class A shares on an annualized basis.
The Trust's distribution plan provides that the Trust will pay MFD a
distribution fee of 0.75% per annum, and a service fee of up to 0.25% per
annum, of the Trust's average daily net assets attributable to Class B and
Class C 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
and Class C shares, and will pay to such securities dealers all of the
distribution fee attributable to Class C shares. The service fee is intended
to be consideration for services rendered by the dealer with respect to Class
B and Class C shares. MFD retains the service fee for accounts not
attributable to a securities dealer, which amounted to $199,966 and $214,984
for Class B and Class C shares, respectively, for the year ended December 31,
1998. Fees incurred under the distribution plan during the year ended December
31, 1998, were 1.00% of average daily net assets attributable to Class B and
Class C shares on an annualized basis.
Certain Class A and C shares are subject to a contingent deferred sales charge
in the event of a shareholder redemption within 12 months following purchase.
A contingent deferred sales charge is imposed on shareholder redemption's 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 December 31, 1998, were
$81,225, $3,116,895, and $230,792 for Class A, Class B, and Class C shares,
respectively.
Shareholder Servicing Agent - MFSC, a wholly owned subsidiary of MFS, earns a
fee for its services as shareholder servicing agent. The fee is calculated as
a percentage of the Trust's average daily net assets at an effective annual
rate of 0.1125%.
(4) Portfolio Securities
Purchases and sales of investments, other than purchased option transactions
and short-term obligations, were as follows:
PURCHASES SALES
- --------------------------------------------------------------------------------
U.S. government securities $ 76,310,465 $ --
-------------- --------------
Investments (non-U.S. government
securities) $8,213,593,671 $4,481,253,651
-------------- --------------
The cost and unrealized appreciation or depreciation in value of the
investments owned by the Trust, as computed on a federal income tax basis, are
as follows:
Aggregate cost $9,208,457,405
--------------
Gross unrealized appreciation $2,923,739,783
Gross unrealized depreciation (124,775,929)
--------------
Net unrealized appreciation $2,798,963,854
==============
(5) Shares of Beneficial Interest
The Trustees have authorized 1,000,000,000 full and fractional shares of
beneficial interest. Transactions in Trust shares were as follows:
Class A Shares
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1998 YEAR ENDED DECEMBER 31, 1997
------------------------------------- --------------------------------------
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 188,053,209 $ 3,608,217,877 108,356,333 $ 1,816,718,757
Shares issued to
shareholders in
reinvestment of
distributions 15,584,563 299,682,621 15,057,865 254,083,546
Share transferred to Class I -- -- (977,846) (14,217,885)
Shares reacquired (95,426,304) (1,827,133,744) (60,788,485) (1,014,640,995)
----------- --------------- ----------- ---------------
Net increase 108,211,468 $ 2,080,766,754 61,647,867 $ 1,041,943,423
=========== =============== ========== ===============
Class B Shares
YEAR ENDED DECEMBER 31, 1998 YEAR ENDED DECEMBER 31, 1997
------------------------------------- --------------------------------------
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------------------
Shares sold 116,467,254 $ 2,214,401,035 60,547,150 $ 1,011,314,619
Shares issued to
shareholders in
reinvestment of
distributions 8,179,698 155,643,628 5,752,255 96,250,575
Shares reacquired (19,577,588) (367,348,197) (9,037,298) (150,648,443)
----------- --------------- ----------- ---------------
Net increase 105,069,364 $ 2,002,696,466 57,262,107 $ 956,916,751
=========== =============== ========== ===============
Class C Shares
YEAR ENDED DECEMBER 31, 1998 YEAR ENDED DECEMBER 31, 1997
-------------------------------- -----------------------------------
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------------------
Shares sold 32,700,952 $ 620,311,183 12,051,608 $ 202,729,481
Shares issued to
shareholders in
reinvestment of
distributions 1,344,955 25,279,036 606,219 10,113,634
Shares reacquired (4,935,864) (92,639,154) (1,309,344) (22,589,323)
----------- --------------- ----------- ---------------
Net increase 29,100,043 $ 552,951,065 11,348,483 $ 190,253,792
========== =============== ========== ===============
Class I Shares
YEAR ENDED DECEMBER 31, 1998 YEAR ENDED DECEMBER 31, 1997**
--------------------------------- ------------------------------------
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------------------
Shares sold 10,276,343 $ 195,389,933 321,571 $ 5,237,008
Shares issued to
shareholders in
reinvestment of
distributions 485,401 9,318,575 103,620 1,748,324
Share transferred to
Class I -- -- 977,846 14,217,885
Shares reacquired (694,274) (13,651,780) (115,876) (1,975,054)
----------- --------------- ----------- ---------------
Net increase 10,067,470 $ 191,056,728 1,287,161 $ 19,228,163
========== =============== ========= ===============
</TABLE>
**For the period from the inception of Class I, January 2, 1997, through
December 31, 1997.
(6) Line of Credit
The Trust and other affiliated funds participate in an $805 million unsecured
line of credit provided by a syndication of banks under a line of credit
agreement. Borrowings may be made to temporarily finance the repurchase of Trust
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 Trust for the year ended December 31, 1998, was $68,542.
(7) Financial Instruments
The Trust trades financial instruments with off-balance-sheet risk in the
normal course of its investing activities in order to manage exposure to
market risks such as foreign currency exchange rates. These financial
instruments include forward foreign currency exchange contracts. The notional
or contractual amounts of these instruments represent the investment the Trust
has in particular classes of financial instruments and does not necessarily
represent the amounts potentially subject to risk. The measurement of the
risks associated with these instruments is meaningful only when all related
and offsetting transactions are considered.
Forward foreign currency purchases and sales under the master netting
agreements amounted to a net receivable of $141,350 with First Boston Corp. at
December 31, 1998.
At December 31, 1998, the Trust had sufficient cash and/or securities to cover
any commitments under these contracts.
(8) Security Lending
The Trust may lend its securities to member banks of the Federal Reserve
System and to member firms of the New York Stock Exchange or subsidiaries
thereof. The securities are loaned by State Street Bank and Trust Company
("State Street"), as agent, to certain brokers approved by the Trust (the
"Borrowers"). The loans are collateralized at all times by U.S. Treasury
securities in an amount at least equal to the market value of the securities
loaned. State Street provides the Trust with indemnification against Borrower
default.
At December 31, 1998, the value of securities loaned was $168,791,733. These
loans were collateralized by U.S. Treasury securities of $171,113,000. On
these loans, a fee is received from the Borrower, and is allocated between the
Trust and State Street. In addition to this fee, the Trust also continues to
earn income on the securities loaned. Income from securities lending is
included in interest income on the Statement of Operations. The dividend and
interest income earned on the securities loaned is accounted for in the same
manner as other dividend and interest income.
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Trustees and Shareholders of Massachusetts Investors Trust:
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of Massachusetts Investors Trust as of
December 31, 1998, the related statement of operations for the year then
ended, the statement of changes in net assets for the years ended December 31,
1998 and 1997, and the financial highlights for each of the years in the five-
year period ended December 31, 1998. 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 securities owned at December
31, 1998 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 Trust at December 31, 1998, 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
February 4, 1999
<PAGE>
- --------------------------------------------------------------------------------
FEDERAL TAX INFORMATION
- --------------------------------------------------------------------------------
IN JANUARY 1999, SHAREHOLDERS WERE MAILED A FORM 1099 REPORTING THE
FEDERAL TAX STATUS OF ALL DISTRIBUTIONS PAID DURING THE CALENDAR YEAR
1998.
THE TRUST HAS DESIGNATED $556,501,759 AS A CAPITAL GAIN DIVIDEND.
FOR THE YEAR ENDED DECEMBER 31, 1998, THE AMOUNT OF DISTRIBUTIONS FROM
INCOME ELIGIBLE FOR THE 70% DIVIDENDS RECEIVED DEDUCTION FOR
CORPORATIONS CAME TO 100.0%.
<PAGE>
<TABLE>
<CAPTION>
MASSACHUSETTS INVESTORS TRUST
<S> <C>
TRUSTEES SECRETARY
Richard B. Bailey* - Private Investor; Former Stephen E. Cavan*
Chairman and Director (until 1991), MFS Investment
Management ASSISTANT SECRETARY
James R. Bordewick, Jr.*
Peter G. Harwood - Private Investor
CUSTODIAN
J. Atwood Ives - Chairman and Chief Executive State Street Bank and Trust Company
Officer, Eastern Enterprises (diversified services
company) AUDITORS
Deloitte & Touche LLP
Lawrence T. Perera - Partner, Hemenway
& Barnes (attorneys) INVESTOR INFORMATION For MFS stock and bond market
outlooks, call toll free: 1-800-637-4458 anytime
William J. Poorvu - Adjunct Professor, Harvard from a touch-tone telephone.
University Graduate School of Business
Administration For information on MFS mutual funds, call your
financial adviser or, for an information kit, call
Charles W.Schmidt - Private Investor toll free: 1-800-637-2929 any business day from 9
a.m. to 5 p.m. Eastern time (or leave a message
Arnold D. Scott* - Senior Executive anytime).
Vice President, Director, and Secretary,
MFS Investment Management INVESTOR SERVICE
MFS Service Center, Inc.
Jeffrey L. Shames* - Chairman, Chief P.O. Box 2281
Executive Officer, and Director, Boston, MA 02107-9906
MFS Investment Management
For general information, call toll free:
Elaine R. Smith - Independent Consultant 1-800-225-2606 any business day from
8 a.m. to 8 p.m. Eastern time.
David B. Stone - Chairman and Director,
North American Management Corp. For service to speech- or hearing-impaired, call
(investment advisers) toll free: 1-800-637-6576 any business day from 9
a.m. to 5 p.m. Eastern time. (To use this service,
INVESTMENT ADVISER your phone must be equipped with a
Massachusetts Financial Services Company Telecommunications Device for the Deaf.)
500 Boylston Street
Boston, MA 02116-3741 For share prices, account balances, and exchanges,
call toll free: 1-800-MFS-TALK (1-800-637-8255)
DISTRIBUTOR anytime from a touch-tone telephone.
MFS Fund Distributors, Inc.
500 Boylston Street WORLD WIDE WEB
Boston, MA 02116-3741 www.mfs.com
PORTFOLIO MANAGERS
Mitchell D. Dynan*
John D. Laupheimer, Jr.*
TREASURER
W. Thomas London*
ASSISTANT TREASURERS
Mark E. Bradley*
Ellen Moynihan*
James O. Yost*
*Affiliated with the Investment Adviser
</TABLE>
<PAGE>
MASSACHUSETTS INVESTORS TRUST
[LOGO] MFS(R)
INVESTMENT MANAGEMENT
We invented the mutual fund(R)
500 Boylston Street
Boston, MA 02116-3741
BULK RATE
U.S. POSTAGE
PAID
MFS
(C)1999 MFS Fund Distributors, Inc., 500 Boylston Street, Boston, MA 02116-3741
MIT-2 2/99 620M 12/212/312/812
