<PAGE>
[Logo] M F S (R)
INVESTMENT MANAGEMENT
We invented the mutual fund(R)
[Graphic Omitted]
MASSACHUSETTS
INVESTORS TRUST
SEMIANNUAL REPORT o JUNE 30, 2000
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MUTUAL FUND GIFT KITS (see page 34)
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<PAGE>
TABLE OF CONTENTS
Letter from the Chairman .................................................. 1
Management Review and Outlook ............................................. 4
Performance Summary ....................................................... 8
Portfolio of Investments .................................................. 12
Financial Statements ...................................................... 19
Notes to Financial Statements ............................................. 27
Trustees and Officers ..................................................... 37
MFS ORIGINAL RESEARCH(R)
RESEARCH HAS BEEN CENTRAL TO INVESTMENT MANAGEMENT AT MFS
SINCE 1932, WHEN WE CREATED ONE OF THE FIRST IN-HOUSE
RESEARCH DEPARTMENTS IN THE MUTUAL FUND (SM)
INDUSTRY. ORIGINAL RESEARCH(SM) AT MFS IS MORE ORIGINAL RESEARCH
THAN JUST CRUNCHING NUMBERS AND CREATING
ECONOMIC MODELS: IT'S GETTING TO KNOW MFS
EACH SECURITY AND EACH COMPANY PERSONALLY.
MAKES A DIFFERENCE
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NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
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<PAGE>
LETTER FROM THE CHAIRMAN
[Photo of Jeffrey L. Shames]
Jeffrey L. Shames
Dear Shareholders,
I'm sure you've noticed that whenever financial markets suffer a large decline,
as they did very dramatically this past spring, there's a flurry of information
on "how to deal with market volatility" -- both in the popular press and from
those of us in the investment business. Our own thinking on this is that, first,
for long-term investors volatility is not necessarily something to be feared;
occasional volatility may in fact be healthy for the markets.
Second, our experience has been that when markets begin to fall, it's often too
late to act. The best response may be to do nothing -- if you're properly
prepared with a long-term plan, created with the help of your investment
professional. To help you create or update that plan and take market volatility
in stride, here are some points you may want to consider the next time you talk
with your investment professional.
1. VOLATILITY CAN BE A GOOD THING
We would argue that the markets today are much healthier than they were before
the period of volatility this past spring, in the sense that stock prices have
returned to more reasonable levels and we have a stronger base for future
growth. Perhaps the worst of the market's wrath descended on companies with very
high prices, relative to their earnings, or with business concepts that looked
great in the euphoria of a booming market but in the end appeared to have no
fundamental backing. It has always been our view that one of the best
protections against market volatility is to invest in stocks and bonds of
fundamentally good companies selling at reasonable prices. When discussing
potential investments with your investment professional, you may want to ask how
they fared in previous periods of volatility, as well as in the good times.
2. INVEST FOR THE LONG TERM
You've heard that before, but we think it's still probably the most important
concept in investing. Time is one of an investor's greatest allies. Over nearly
all long-term periods -- 5, 10, 20 years, and more -- stock and bond returns, as
represented by most common indices, have been positive and have considerably
outpaced inflation. Investing is the best way we know of to make your money work
for you while you're doing something else.
Where investors can get into trouble is by confusing investing with trading. In
our view, traders who buy securities with the intention of selling them at a
profit in a matter of hours, days, or weeks are gambling. We believe this seldom
turns out to be a good strategy for increasing your wealth.
3. INVEST REGULARLY
Waiting for the "right time" to invest is almost always a poor strategy, because
only in retrospect do we know when that right time really was. Periods of
volatility are probably the worst times to make an investment decision. Faced
with turmoil in the markets, many investors have opted to simply stay on the
sidelines.
On the other hand, we think one of the best techniques for investing is through
automatic monthly or quarterly deductions from a checking or savings account.
This approach has at least three major benefits. First, you can formulate a
long-term plan -- how much to invest, how often, and into what portfolios -- in
a calm, rational manner, working with your investment professional. Second, with
this approach you invest regularly without agonizing over the decision each time
you buy shares.
And, third, if you invest equal amounts of money at regular intervals, you'll be
taking advantage of a strategy called dollar-cost averaging: by investing a
fixed amount while the share cost fluctuates, you end up with an average share
cost to you that is lower than the average share price over your investment
period.(1) If all this sounds familiar, it's probably because you're already
taking advantage of dollar-cost averaging by investing regularly for retirement
through a 401(k) or similar account at work.
4. DIVERSIFY
One of the dangers of not having an investment plan is that you may be tempted
to simply chase performance, i.e., move money into whatever asset class appears
to be outperforming at the moment -- small, mid, or large cap; growth or value;
United States or international; stocks or bonds. The problem with this approach
is that by the time a particular area is generally recognized as "hot," you may
have already missed some of the best performance.
International investing offers a case in point. In the 1980s, international
investments, as represented by the Morgan Stanley Capital International (MSCI)
Europe, Australia, Far East (EAFE) Index, outperformed U.S. investments, as
represented by the Standard & Poor's 500 Composite Index (S&P 500), in 7 out of
10 years.(2) For the decade, the MSCI EAFE's average annual performance was 23%,
compared to 18% for the S&P 500. Going into the 1990s, then, an investor looking
only at recent performance might have favored international investments over
U.S. investments.
But the 1990s turned out to be virtually a mirror image of the '80s. Domestic
investments outperformed international investments in 7 out of 10 years, with
the S&P 500 returning an average of 18% annually for the decade and the MSCI
EAFE returning a 7% annual average. Looking ahead, however, we are optimistic
about international markets because we feel that many of the same forces that
propelled the current U.S. economic boom -- deregulation, restructuring, and
increased adoption of technology -- have taken root overseas.
The lesson to be learned is that nobody really knows what asset class will be
the next to outperform or how long that performance will be sustained. We would
suggest that one way to potentially profit from swings in the market -- to
potentially be invested in various asset classes before the market shifts in
their favor -- is with a diversified portfolio covering several asset classes.
If you haven't already done so, we encourage you to discuss these thoughts with
your investment professional and factor them into your long-range financial
planning. Hopefully, the next time the markets appear to be going wild, you'll
feel confident enough in your plan to view periods of volatility as a time of
potential opportunity -- or perhaps just a time to sit back and do nothing.
As always, we appreciate your confidence in MFS and welcome any questions or
comments you may have.
Respectfully,
/s/ Jeffrey L. Shames
Jeffrey L. Shames
Chairman and Chief Executive Officer
MFS Investment Management(R)
July 17, 2000
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(1) The use of a systematic investing program does not guarantee a profit or
protect against a loss in declining markets. You should consider your
financial ability to continue to invest through periods of low prices.
(2) Source: Lipper Inc. Decade performance: '80s -- 12/31/79-12/31/89,
'90s -- 12/31/89- 12/31/99. The MSCI EAFE Index is an unmanaged,
market-capitalization- weighted total return index that measures the
performance of the same developed-country global stock markets included in
the MSCI World Index but excludes the United States, Canada, and the South
African mining component. The S&P 500 is a popular, unmanaged index of
common stock total return performance. It is not possible to invest directly
in an index. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
A prospectus containing more complete information on any MFS product, including
all charges and expenses, can be obtained from your investment professional.
Please read it carefully before you invest or send money. Investments in mutual
funds will fluctuate and may be worth more or less upon redemption.
The opinions expressed in this letter are those of Jeffrey L. Shames, and no
forecasts can be guaranteed.
<PAGE>
MANAGEMENT REVIEW AND OUTLOOK
For the six months ended June 30, 2000, Class A shares of the trust provided a
total return of 0.67%, Class B shares 0.33%, Class C shares 0.33%, Class I
shares 0.80%, and Class J shares 0.36%. These returns include the reinvestment
of distributions but exclude the effects of any sales charges. During the same
period, the average large cap value fund tracked by Lipper Inc., an independent
firm that reports mutual fund performance, returned -1.64%. The returns also
compare to a -0.42% return for the trust's benchmark, the Standard & Poor's 500
Composite Index (the S&P 500), a popular, unmanaged index of common stock total
return performance.
Q. DURING A DIFFICULT PERIOD FOR STOCKS, YOU'VE MANAGED TO OUTPERFORM THE S&P
500 AND THE LIPPER PEER GROUP. TO WHAT DO YOU ATTRIBUTE THIS PERFORMANCE?
A. We keep a close eye on valuations in this portfolio. As a result, we were
underweighted in technology stocks relative to the S&P 500, which has been a
big advantage in this volatile environment. At the same time, we're not
simply value investors; we also try to seek out growth at the right price.
Our broad stock selection expresses this philosophy and proved to be a
positive contributor to performance. Our well-diversified portfolio of
holdings such as Hartford Financial Services, State Street Corp., Pharmacia,
Pfizer, Safeway, and BP Amoco have all been great examples of stocks that we
believe offered compelling growth opportunities at reasonable valuations and
that have provided favorable performance.
Q. THE DIVIDEND YIELD OF THE FUND HAS DECLINED OVER THE PAST COUPLE YEARS; WHAT
IS THE REASON FOR THIS TREND?
A. We seek a gross yield for the fund that is 90% of the S&P 500 yield. Today
the yield on the S&P 500 is at a historic low of approximately 1.1%. We
believe the reason for this fading dividend is because more and more
companies are opting to reinvest profits into their businesses rather than
pay out dividends to shareholders. In addition, we found that several
high-yielding companies in the S&P 500 were replaced with "new economy"
companies that do not pay dividends. Twenty years ago, nondividend paying
companies represented only 2% of the S&P 500's value (source: New York
Times, 1/4/2000); today, approximately 22% of the firms in the S&P 500 don't
pay dividends (source: Morningstar). While we anticipate that the fund's
gross dividend yield will continue to meet its objective, given this market
environment, there exists a real possibility that the fund may not pay a
dividend in some quarter this year.
Q. YOU WERE BUYING PHARMACEUTICAL STOCKS EARLY IN THE YEAR WHEN MOST INVESTORS
SHUNNED THAT SECTOR. THIS STRATEGY HAS BEEN REWARDED RECENTLY. CAN YOU TELL
US MORE ABOUT WHAT SPARKED YOUR DECISION TO BUY THESE STOCKS?
A. There were several reasons why we were bullish on these stocks. First, we
believe many of the issues surrounding the industry's decline in 1999 have
subsided, including the threat of onerous government pricing regulation and
Medicare reform. Second, we found that many drug stocks maintained strong
growth rates in 1999 and 2000 but were hurt last year by somewhat
exaggerated concerns about fading product pipelines. Today, we see plenty of
new products in the pipeline and, with quicker FDA approval rates, there is
always the possibility that a new blockbuster drug could be right around the
corner. Finally, health care and pharmaceutical stocks historically have
held up well in a weakening economy. If the Federal Reserve Board's rate
hikes succeed in slowing the economy, we believe traditionally stable,
steady growers such as health care stocks could outperform the overall
market.
Q. YOU'VE RECENTLY DECREASED THE PORTFOLIO'S EXPOSURE TO TECHNOLOGY. WHAT'S
YOUR READING ON THIS SECTOR?
A. We think there are a lot of opportunities and the potential for large
profits in this sector. Some of the fastest-growing and innovative companies
in the world are the ones that create new technologies. However, you can't
ignore earnings and valuations. If stock prices get too far ahead, which we
felt they did in the first quarter of 2000, the stocks may have to tread
water until the companies' growth can catch up. Very few industries can grow
30% per year over the long term, but we had a period over the last year
where many tech stocks were up well over 100%, and we felt that was just too
far too fast. With that in mind, while the portfolio has remained
underweighted in technology versus the S&P 500, it is still the largest
sector weighting in the portfolio because we continue to see great
opportunities for long-term growth. We continue to like some of the more
established and innovative industry leaders such as Intel, Cisco,
Hewlett-Packard, and Sun Microsystems.
Q. WHAT OTHER STRATEGIES DID YOU EMPLOY TO LIFT THE PORTFOLIO'S PERFORMANCE?
A. While the holdings and sector weightings of the portfolio will constantly
shift depending on where we find opportunities, it's important to emphasize
that our overall strategy remains the same. We continue to try to balance
the portfolio by taking advantage of what we think are the right growth
companies and the right value stocks to own at the right time. When growth
stocks are in favor, our objective is to keep pace with the market, and in a
value environment, our goal is to outperform.
Q. WHICH STOCKS DETRACTED FROM PERFORMANCE?
A. Despite a recent rally from its lows, ongoing negative developments in the
U.S. government's antitrust case against Microsoft hampered our total
return. Shares of Microsoft fell roughly 20% during the period. Our holdings
in telephone services companies such as Bell Atlantic (now called Verizon
following its recently completed merger with GTE) and WorldCom, Inc., also
experienced weakness during the past six months. The combination of higher
interest rates and the potential for slower earnings growth as a result of
increasing market penetration by competitive local exchange carriers made it
a difficult environment for Bell Atlantic. In the long-distance market,
slowing earnings growth and increased competition also resulted in weak
performance from WorldCom, Inc. While recent performance has been lackluster
for these companies, we believe their long-term growth outlooks remain
positive.
Q. DESPITE THE WEAKNESS IN EQUITIES THIS YEAR, SOME INVESTORS FEEL THE MARKET
IS STILL EXPENSIVE. WHAT'S YOUR OUTLOOK?
A. From our standpoint, no matter what direction the market is headed, it has
usually provided opportunities to those investors who do their homework.
While there are pockets of the market that still appear pricey, we see
strong potential for the market to head higher given what we view as an
environment of healthy economic growth, reasonable interest rates, and a
favorable outlook for corporate earnings growth. We also have found that
it's very difficult to predict what the market will do in the short term. As
a result, we continue to focus on finding companies that we believe offer
the best fundamental business prospects and the potential for strong
long-term performance.
/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 current 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.
It is not possible to invest directly in an index.
<PAGE>
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PORTFOLIO MANAGERS' PROFILES
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MITCHELL D. DYNAN IS SENIOR VICE PRESIDENT OF MFS INVESTMENT MANAGEMENT(R). HE
IS A PORTFOLIO MANAGER OF MASSACHUSETTS INVESTORS TRUST, AMERICA'S OLDEST MUTUAL
FUND, AND THE MASSACHUSETTS INVESTORS TRUST SERIES OFFERED THROUGH MFS(R)/SUN
LIFE ANNUITY PRODUCTS. HE JOINED MFS IN 1986 AS A RESEARCH ANALYST AND WAS NAMED
ASSISTANT VICE PRESIDENT IN 1987, VICE PRESIDENT IN 1988, PORTFOLIO MANAGER 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
SECURITY ANALYSTS SOCIETY, INC., 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 LEAD PORTFOLIO MANAGER OF
MASSACHUSETTS INVESTORS TRUST, AMERICA'S OLDEST MUTUAL FUND. HE ALSO MANAGES
MFS(R) INSTITUTIONAL CORE EQUITY FUND, THE MASSACHUSETTS INVESTORS TRUST SERIES
OFFERED THROUGH MFS(R)/SUN LIFE ANNUITY PRODUCTS, AND MFS(R) GROWTH WITH INCOME
SERIES (PART OF MFS(R) VARIABLE INSURANCE TRUST(SM)). MR. LAUPHEIMER JOINED THE
MFS RESEARCH DEPARTMENT IN 1981 AS A RESEARCH ANALYST. HE WAS NAMED INVESTMENT
OFFICER IN 1983, ASSISTANT VICE PRESIDENT IN 1984, VICE PRESIDENT IN 1986,
PORTFOLIO MANAGER IN 1987, SENIOR VICE PRESIDENT IN 1995, AND DIRECTOR OF EQUITY
RESEARCH IN 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.
ALL EQUITY PORTFOLIO MANAGERS BEGAN THEIR CAREERS AT MFS INVESTMENT
MANAGEMENT(R) AS RESEARCH ANALYSTS. OUR PORTFOLIO MANAGERS ARE SUPPORTED BY AN
INVESTMENT STAFF OF OVER 100 PROFESSIONALS UTILIZING MFS ORIGINAL RESEARCH(R), A
GLOBAL, COMPANY-ORIENTED, BOTTOM-UP PROCESS OF SELECTING SECURITIES.
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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 MFS
product is available from your investment professional or by calling MFS at
1-800-225-2606. Please read it carefully before investing or sending money.
<PAGE>
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FUND FACTS
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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
CLASS J DECEMBER 31, 1999
SIZE: $14.5 BILLION NET ASSETS AS OF JUNE 30, 2000
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PERFORMANCE SUMMARY
Because mutual funds are designed for investors with long-term goals, we have
provided cumulative results as well as the average annual total returns for the
applicable time periods. Investment results reflect the percentage change in net
asset value, including the reinvestment of dividends. (See Notes to Performance
Summary.)
TOTAL RATES OF RETURN THROUGH JUNE 30, 2000
<TABLE>
<CAPTION>
CLASS A
6 Months 1 Year 3 Years 5 Years 10 Years
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge +0.67% +1.86% +46.60% +157.34% +331.56%
------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +1.86% +13.60% + 20.81% + 15.75%
------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- -3.99% +11.38% + 19.39% + 15.06%
------------------------------------------------------------------------------------------------------------
<CAPTION>
CLASS B
6 Months 1 Year 3 Years 5 Years 10 Years
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge +0.33% +1.22% +43.77% +148.57% +310.12%
------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +1.22% +12.86% + 19.97% + 15.16%
------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- -2.71% +12.07% + 19.78% + 15.16%
------------------------------------------------------------------------------------------------------------
<CAPTION>
CLASS C
6 Months 1 Year 3 Years 5 Years 10 Years
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge +0.33% +1.18% +43.70% +150.58% +320.22%
------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +1.18% +12.85% + 20.17% + 15.44%
------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- +0.19% +12.85% + 20.17% + 15.44%
------------------------------------------------------------------------------------------------------------
<CAPTION>
CLASS I
6 Months 1 Year 3 Years 5 Years 10 Years
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge +0.80% +2.17% +48.13% +160.44% +336.76%
------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +2.17% +13.99% + 21.10% + 15.88%
------------------------------------------------------------------------------------------------------------
<CAPTION>
CLASS J
6 Months 1 Year 3 Years 5 Years 10 Years
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge +0.36% +1.55% +46.15% +156.56% +330.24%
------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +1.55% +13.48% + 20.74% + 15.71%
------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- -0.48% +12.72% + 20.25% + 15.48%
------------------------------------------------------------------------------------------------------------
</TABLE>
NOTES TO PERFORMANCE SUMMARY
Class A Share Performance Including Sales Charge takes into account the
deduction of the maximum 5.75% sales charge. Class B Share Performance Including
Sales Charge takes into account the deduction of the applicable contingent
deferred sales charge (CDSC), which declines over six years from 4% to 0%. Class
C Share Performance Including Sales Charge takes into account the deduction of
the 1% CDSC applicable to Class C shares redeemed within 12 months. Class I
shares have no sales charge and are only available to certain institutional
investors. Class J Share Performance Including Sales Charge takes into account
the deduction of the maximum 3% sales charge. Class J shares are only available
to Japanese investors.
Class B, C, I, and J share performance includes the performance of the trust's
Class A shares for periods prior to their inception (blended performance). Class
B and C blended performance has been adjusted to take into account the CDSC
applicable to Class B and C shares rather than the initial sales charge (load)
applicable to Class A and J shares. Class I share blended performance has been
adjusted to account for the fact that Class I shares have no sales charge. These
blended performance figures have not been adjusted to take into account
differences in class-specific operating expenses. Because operating expenses of
Class B, C, and J shares are higher than those of Class A, the blended Class B,
C, and J share performance is higher than it would have been had Class B, C, and
J shares been offered for the entire period. Conversely, because operating
expenses of Class I shares are lower than those of Class A, the blended Class I
share performance is lower than it would have been had Class I shares been
offered for the entire period.
All 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 capital gains.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. MORE RECENT
RETURNS MAY BE MORE OR LESS THAN THOSE SHOWN. PAST PERFORMANCE
IS NO GUARANTEE OF FUTURE RESULTS.
PORTFOLIO CONCENTRATION AS OF JUNE 30, 2000
FIVE LARGEST STOCK SECTORS
TECHNOLOGY 25.6%
UTILITIES & COMMUNICATIONS 11.7%
HEALTH CARE 11.7%
FINANCIAL SERVICES 11.2%
INDUSTRIAL GOODS & SERVICES 9.5%
TOP 10 STOCK HOLDINGS
GENERAL ELECTRIC CO. 3.7% MICROSOFT CORP. 2.5%
Diversified manufacturing and financial Computer software and systems company
services conglomerate
CORNING, INC. 2.4%
PFIZER, INC. 3.5% Materials and equipment supplier to
Pharmaceutical products company communications industries
INTEL CORP. 3.5% HEWLETT-PACKARD CO. 2.4%
Semiconductor manufacturer Computing systems and information
technology services company
BP AMOCO PLC 2.7%
British oil and petrochemical company SAFEWAY, INC. 2.4%
Grocery store chain
EXXON MOBIL CORP. 2.6%
International oil and gas company PHARMACIA CORP. 2.3%
Pharmaceutical, health care, and
agricultural products company
The portfolio is actively managed, and current holdings may be different.
<PAGE>
PORTFOLIO OF INVESTMENTS (Unaudited) -- June 30, 2000
Stocks - 97.0%
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ISSUER SHARES VALUE
-------------------------------------------------------------------------------
U.S. Stocks - 86.5%
Aerospace - 3.6%
Boeing Co. 2,941,200 $ 122,978,925
General Dynamics Corp. 1,106,900 57,835,525
TRW, Inc. 944,500 40,967,688
United Technologies Corp. 5,026,900 295,958,737
---------------
$ 517,740,875
-------------------------------------------------------------------------------
Automotive - 0.2%
Delphi Automotive Systems Corp. 2,053,400 $ 29,902,638
-------------------------------------------------------------------------------
Banks and Credit Companies - 1.9%
Bank of New York Co., Inc. 450,600 $ 20,952,900
Capital One Financial Corp. 709,200 31,648,050
Chase Manhattan Corp. 302,100 13,915,481
Providian Financial Corp. 290,600 26,154,000
U.S. Bancorp 4,486,600 86,367,050
Wells Fargo Co. 2,571,800 99,657,250
---------------
$ 278,694,731
-------------------------------------------------------------------------------
Biotechnology - 2.6%
Abbott Laboratories, Inc. 905,200 $ 40,337,975
Pharmacia Corp. 6,416,649 331,660,545
---------------
$ 371,998,520
-------------------------------------------------------------------------------
Business Machines - 4.5%
Hewlett-Packard Co. 2,693,200 $ 336,313,350
International Business Machines Corp. 532,100 58,298,206
Sun Microsystems, Inc.* 2,726,500 247,941,094
Texas Instruments, Inc. 242,600 16,663,587
---------------
$ 659,216,237
-------------------------------------------------------------------------------
Business Services - 3.0%
Automatic Data Processing, Inc. 3,147,800 $ 168,604,037
Computer Sciences Corp.* 1,476,600 110,283,563
DST Systems, Inc.* 253,400 19,290,075
First Data Corp. 2,879,900 142,915,037
---------------
$ 441,092,712
-------------------------------------------------------------------------------
Cellular Telephones - 1.8%
Motorola, Inc. 5,527,085 $ 160,630,908
Sprint Corp. (PCS Group)* 1,682,600 100,114,700
---------------
$ 260,745,608
-------------------------------------------------------------------------------
Chemicals - 1.1%
Air Products & Chemicals, Inc. 1,960,040 $ 60,393,733
Dow Chemical Co. 225,600 6,810,300
E.I. du Pont de Nemours & Co., Inc. 305,400 13,361,250
Rohm & Haas Co. 2,094,500 72,260,250
---------------
$ 152,825,533
-------------------------------------------------------------------------------
Computer Hardware - Systems - 1.1%
Compaq Computer Corp. 1,598,300 $ 40,856,544
Dell Computer Corp.* 2,529,700 124,745,831
---------------
$ 165,602,375
-------------------------------------------------------------------------------
Computer Software - Personal Computers - 2.6%
America Online, Inc.* 279,100 $ 14,722,525
Microsoft Corp.* 4,465,200 357,216,000
---------------
$ 371,938,525
-------------------------------------------------------------------------------
Computer Software - Services - 0.6%
EMC Corp.* 1,126,400 $ 86,662,400
-------------------------------------------------------------------------------
Computer Software - Systems - 1.9%
BMC Software, Inc.* 495,600 $ 18,081,656
Computer Associates International, Inc. 1,322,200 67,680,113
Oracle Corp.* 1,441,000 121,134,062
Rational Software Corp.* 415,300 38,596,944
VERITAS Software Corp.* 242,200 27,372,384
---------------
$ 272,865,159
-------------------------------------------------------------------------------
Conglomerates - 1.1%
Tyco International Ltd. 3,382,600 $ 160,250,675
-------------------------------------------------------------------------------
Consumer Goods and Services - 1.4%
Philip Morris Cos., Inc. 951,500 $ 25,274,219
Cintas Corp. 450,000 16,509,375
Clorox Co. 492,580 22,073,741
Colgate-Palmolive Co. 1,940,300 116,175,463
Gillette Co. 425,100 14,851,931
Procter & Gamble Co. 137,800 7,889,050
---------------
$ 202,773,779
-------------------------------------------------------------------------------
Electrical Equipment - 4.3%
Emerson Electric Co. 1,639,800 $ 99,002,925
General Electric Co. 9,970,500 528,436,500
---------------
$ 627,439,425
-------------------------------------------------------------------------------
Electronics - 4.8%
Agilent Technologies, Inc.* 167,243 $ 12,334,171
Analog Devices, Inc.* 207,300 15,754,800
Flextronics International Ltd.* 22,900 1,572,944
Intel Corp. 3,672,500 490,967,344
LSI Logic Corp.* 268,800 14,548,800
Micron Technology, Inc.* 539,600 47,518,525
National Semiconductor Corp.* 1,425,800 80,914,150
Solectron Corp.* 715,200 29,949,000
---------------
$ 693,559,734
-------------------------------------------------------------------------------
Energy - 0.4%
TXU Corp. 2,020,400 $ 59,601,800
-------------------------------------------------------------------------------
Entertainment - 1.9%
Infinity Broadcasting Corp., "A"* 1,161,700 $ 42,329,444
Time Warner, Inc. 2,264,700 172,117,200
Viacom, Inc., "B"* 869,100 59,261,756
---------------
$ 273,708,400
-------------------------------------------------------------------------------
Financial Institutions - 4.8%
American Express Co. 1,936,500 $ 100,940,062
Citigroup, Inc. 1,762,000 106,160,500
Federal National Mortgage Assn. 1,412,500 73,714,844
Freddie Mac Corp. 4,271,700 173,003,850
Merrill Lynch & Co., Inc. 91,300 10,499,500
State Street Corp. 2,147,700 227,790,431
---------------
$ 692,109,187
-------------------------------------------------------------------------------
Financial Services - 0.7%
AXA Financial, Inc. 2,957,000 $ 100,538,000
-------------------------------------------------------------------------------
Food and Beverage Products - 2.4%
Anheuser-Busch Cos., Inc. 1,452,400 $ 108,476,125
Coca-Cola Co. 1,763,500 101,291,031
PepsiCo., Inc. 440,500 19,574,719
Quaker Oats Co. 1,574,100 118,254,263
---------------
$ 347,596,138
-------------------------------------------------------------------------------
Insurance - 3.6%
American International Group, Inc. 1,366,825 $ 160,601,937
CIGNA Corp. 820,300 76,698,050
Hartford Financial Services Group, Inc. 3,779,865 211,436,198
Lincoln National Corp. 518,300 18,723,588
Marsh & McLennan Cos., Inc. 318,800 33,294,675
St. Paul Cos., Inc. 850,800 29,033,550
---------------
$ 529,787,998
-------------------------------------------------------------------------------
Machinery - 1.6%
Deere & Co., Inc. 4,027,500 $ 149,017,500
Ingersoll Rand Co. 1,609,100 64,766,275
W.W. Grainger, Inc. 781,100 24,067,644
---------------
$ 237,851,419
-------------------------------------------------------------------------------
Medical and Health Products - 6.8%
American Home Products Corp. 1,608,800 $ 94,517,000
Bausch & Lomb, Inc. 920,000 71,185,000
Bristol-Myers Squibb Co. 4,134,000 240,805,500
Johnson & Johnson Co. 240,800 24,531,500
Pfizer, Inc. 10,472,500 502,680,000
Schering Plough Corp. 1,035,660 52,300,830
---------------
$ 986,019,830
-------------------------------------------------------------------------------
Medical and Health Technology and Services - 1.3%
Medtronic, Inc. 2,695,164 $ 134,252,857
PE Corp.- PE Biosystems Group 177,600 11,699,400
UnitedHealth Group, Inc.* 487,100 41,768,825
---------------
$ 187,721,082
-------------------------------------------------------------------------------
Oil Services - 0.8%
Baker Hughes, Inc. 2,827,900 $ 90,492,800
Global Marine, Inc.* 767,600 21,636,725
---------------
$ 112,129,525
-------------------------------------------------------------------------------
Oils - 5.2%
Chevron Corp. 435,600 $ 36,944,325
Coastal Corp. 2,772,800 168,794,200
Conoco, Inc. 5,066,000 124,433,625
Exxon Mobil Corp. 4,628,468 363,334,738
Santa Fe International Corp. 227,000 7,930,813
Transocean Sedco Forex, Inc. 1,052,700 56,253,656
---------------
$ 757,691,357
-------------------------------------------------------------------------------
Printing and Publishing - 2.1%
Gannett Co., Inc. 1,858,600 $ 111,167,513
New York Times Co. 3,024,500 119,467,750
Tribune Co. 2,206,400 77,224,000
---------------
$ 307,859,263
-------------------------------------------------------------------------------
Restaurants and Lodging - 0.2%
McDonald's Corp. 795,700 $ 26,208,369
-------------------------------------------------------------------------------
Retail - 2.8%
CVS Corp. 4,438,900 $ 177,556,000
Wal-Mart Stores, Inc. 3,988,900 229,860,362
---------------
$ 407,416,362
-------------------------------------------------------------------------------
Supermarkets - 2.7%
Kroger Co.* 2,899,600 $ 63,972,425
Safeway, Inc.* 7,388,600 333,410,575
---------------
$ 397,383,000
-------------------------------------------------------------------------------
Telecommunications - 10.9%
Alltel Corp. 2,298,700 $ 142,375,731
Bell Atlantic Corp. 4,433,900 225,297,544
BroadWing, Inc.* 1,658,900 43,027,719
Cabletron Systems, Inc.* 2,117,300 53,461,825
Cisco Systems, Inc.* 4,989,400 317,138,738
Corning, Inc. 1,267,900 342,174,512
Qwest Communications International, Inc.* 402,800 20,014,125
SBC Communications, Inc. 2,754,049 119,112,619
Sprint Corp. 1,670,900 85,215,900
Tellabs, Inc.* 1,353,500 92,630,156
WorldCom, Inc.* 3,216,966 147,578,315
---------------
$ 1,588,027,184
-------------------------------------------------------------------------------
Telecommunications and Cable
Comcast Corp., "A"* 174,000 $ 7,047,000
-------------------------------------------------------------------------------
Utilities - Electric - 0.9%
Peco Energy Co. 2,645,700 $ 106,654,781
Unicom Corp. 473,800 18,330,138
---------------
$ 124,984,919
-------------------------------------------------------------------------------
Utilities - Gas - 0.7%
Enron Corp. 538,100 $ 34,707,450
Williams Cos., Inc. 1,595,600 66,516,575
---------------
$ 101,224,025
-------------------------------------------------------------------------------
Utilities - Telephone - 0.2%
BellSouth Corp. 594,800 $ 25,353,350
-------------------------------------------------------------------------------
Total U.S. Stocks $12,563,567,134
-------------------------------------------------------------------------------
Foreign Stocks - 10.5%
Bermuda - 0.4%
Global Crossing Ltd. (Telecommunications)* 1,968,400 $ 51,793,525
-------------------------------------------------------------------------------
Canada - 2.4%
Canadian National Railway Co. (Railroads) 1,091,107 $ 31,846,686
Nortel Networks Corp. (Telecommunications) 4,750,600 324,228,450
---------------
$ 356,075,136
-------------------------------------------------------------------------------
Finland - 0.4%
Nokia Corp., ADR (Telecommunications) 1,137,200 $ 56,788,925
-------------------------------------------------------------------------------
Japan - 0.6%
Fast Retailing Co. (Retail) 99,700 $ 41,729,637
Nippon Telegraph & Telephone Co. (Utilities -
Telephone) 3,135 41,669,965
---------------
$ 83,399,602
-------------------------------------------------------------------------------
Netherlands - 1.9%
Akzo Nobel N.V. (Chemicals) 1,195,000 $ 50,763,251
ING Groep N.V. (Financial Services)* 530,100 35,827,175
KPN N.V. (Telecommunications)* 918,020 41,056,625
Royal Dutch Petroleum Co. (Oils) 2,395,100 148,842,223
---------------
$ 276,489,274
-------------------------------------------------------------------------------
South Korea - 0.2%
Samsung Electronics (Electronics) 112,400 $ 37,201,183
-------------------------------------------------------------------------------
Switzerland - 0.7%
Nestle S.A. (Food and Beverage Products) 48,100 $ 96,300,282
-------------------------------------------------------------------------------
United Kingdom - 3.9%
Astrazeneca Group PLC (Medical and Health
Products) 670,100 $ 31,269,367
BP Amoco PLC, ADR (Oils) 6,858,598 387,939,450
HSBC Holdings PLC (Banks and Credit Cos.) 2,459,100 28,101,853
Reuters Group PLC, ADR (Business Services) 481,165 48,086,427
Vodafone AirTouch PLC (Telecommunications)* 16,875,668 68,154,814
---------------
$ 563,551,911
-------------------------------------------------------------------------------
Total Foreign Stocks $ 1,521,599,838
-------------------------------------------------------------------------------
Total Stocks (Identified Cost, $11,209,280,835) $14,085,166,972
-------------------------------------------------------------------------------
Preferred Stock - 0.1%
-------------------------------------------------------------------------------
Energy - 0.1%
TXU Corp.* (Identified Cost, $13,904,058) 335,000 $ 11,641,250
-------------------------------------------------------------------------------
Convertible Preferred Stock - 0.3%
-------------------------------------------------------------------------------
Bermuda - 0.3%
Global Crossing Ltd., 6.75% (Telecommunications)
(Identified Cost, $47,125,000) 188,500 $ 41,328,625
-------------------------------------------------------------------------------
Convertible Bonds - 0.3%
-------------------------------------------------------------------------------
PRINCIPAL AMOUNT
(000 OMITTED)
-------------------------------------------------------------------------------
Financial Services - 0.1%
Bell Atlantic Financial Services, Inc., 4.25s,
2005## $ 18,870 $ 22,927,050
-------------------------------------------------------------------------------
Oils
Transocean Sedco Forex, Inc., 0s, 2020 8,790 $ 5,301,249
-------------------------------------------------------------------------------
Telecommunications - 0.2%
NTL, Inc., 5.75s, 2009## $ 29,510 $ 23,165,350
-------------------------------------------------------------------------------
Total Convertible Bonds
(Identified Cost, $55,832,234) $ 51,393,64
-------------------------------------------------------------------------------
Short-Term Obligations - 2.2%
-------------------------------------------------------------------------------
Federal Home Loan Bank, due 7/03/00 $ 71,97
$ 72 4
General Electric Capital Corp., due 7/03/00 138,234 138,180,626
Morgan Stanley Dean Witter, due 7/05/00 178,520 178,384,126
-------------------------------------------------------------------------------
Total Short-Term Obligations, at Amortized Cost $ 316,636,726
-------------------------------------------------------------------------------
Total Investments
(Identified Cost, $11,642,778,853) $14,506,167,222
Other Assets, Less Liabilities - 0.1% 19,386,581
-------------------------------------------------------------------------------
Net Assets - 100.0% $14,525,553,803
-------------------------------------------------------------------------------
* Non-income producing security.
## SEC Rule 144A restriction.
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS
Statement of Assets and Liabilities (Unaudited)
-------------------------------------------------------------------------------
JUNE 30, 2000
-------------------------------------------------------------------------------
Assets:
Investments, at value (identified cost, $11,642,778,853) $14,506,167,222
Foreign currency, at value (identified cost, $84,276) 84,080
Net receivable for forward foreign currency exchange
contracts to sell 147,728
Receivable for investments sold 104,500,644
Receivable for trust shares sold 33,951,178
Dividends and interest receivable 13,053,641
Other assets 98,745
---------------
Total assets $14,658,003,238
---------------
Liabilities:
Payable to custodian $ 428,736
Payable for investments purchased 74,648,692
Payable for trust shares reacquired 55,580,558
Payable to affiliates -
Management fee 130,957
Shareholder servicing agent fee 39,972
Distribution and service fee 250,815
Administrative fee 1,889
Accrued expenses and other liabilities 1,367,816
---------------
Total liabilities $ 132,449,435
---------------
Net assets $14,525,553,803
===============
Net assets consist of:
Paid-in capital $11,283,808,339
Unrealized appreciation on investments and translation
of assets and liabilities in foreign currencies 2,863,555,507
Accumulated undistributed net realized gain on
investments and foreign currency transactions 376,903,121
Accumulated undistributed net investment income 1,286,836
---------------
Total $14,525,553,803
===============
Shares of beneficial interest outstanding 698,824,952
===========
Class A shares:
Net asset value per share
(net assets of $7,917,830,921 / 378,167,646 shares
of beneficial interest outstanding) $20.94
======
Offering price per share (100 / 94.25 of net asset
value per share) $22.22
======
Class B shares:
Net asset value and offering price per share
(net assets of $5,149,039,015 / 249,764,246 shares
of beneficial interest outstanding) $20.62
======
Class C shares:
Net asset value and offering price per share
(net assets of $1,271,270,437 / 61,947,964 shares of
beneficial interest outstanding) $20.52
======
Class I shares:
Net asset value, offering price and redemption price per share
(net assets of $186,131,722 / 8,882,896 shares of
beneficial interest outstanding) $20.95
======
Class J shares:
Net asset value and redemption price per share
(net assets of $1,281,708 / 62,200 shares of
beneficial interest outstanding) $20.61
======
Offering price per share (100 / 98 of net asset value
per share) $21.03
======
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
Statement of Operations (Unaudited)
-------------------------------------------------------------------------------
SIX MONTHS ENDED JUNE 30, 2000
-------------------------------------------------------------------------------
Net investment income (loss):
Income -
Dividends $ 82,324,933
Interest 7,943,544
Foreign taxes withheld (1,054,111)
-------------
Total investment income $ 89,214,366
-------------
Expenses -
Management fee $ 23,929,929
Trustees' compensation 62,654
Shareholder servicing agent fee 7,269,059
Distribution and service fee (Class A) 13,914,618
Distribution and service fee (Class B) 25,631,427
Distribution and service fee (Class C) 6,337,168
Distribution and service fee (Class J) 3,155
Administrative fee 266,484
Custodian fee 1,543,755
Printing 171,846
Postage 631,115
Auditing fees 13,500
Legal fees 18,407
Miscellaneous 4,071,593
-------------
Total expenses $ 83,864,710
Fees paid indirectly (1,445,703)
-------------
Net expenses $ 82,419,007
-------------
Net investment income $ 6,795,359
-------------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $ 409,979,119
Foreign currency transactions (300,839)
-------------
Net realized gain on investments and foreign
currency transactions $ 409,678,280
-------------
Change in unrealized appreciation (depreciation) -
Investments $(382,400,596)
Translation of assets and liabilities in foreign currencies 2,451
-------------
Net unrealized loss on investments and foreign
currency translation $(382,398,145)
-------------
Net realized and unrealized gain on investments
and foreign currency $ 27,280,135
-------------
Increase in net assets from operations $ 34,075,494
=============
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS -- continued
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
-----------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2000 DECEMBER 31, 1999
(UNAUDITED)
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 6,795,359 $ 40,598,613
Net realized gain on investments and foreign
currency transactions 409,678,280 473,778,215
Net unrealized gain (loss) on investments and
foreign currency translation (382,398,145) 431,354,008
--------------- ---------------
Increase in net assets from operations $ 34,075,494 $ 945,730,836
--------------- ---------------
Distributions declared to shareholders -
From net investment income (Class A) $ (4,863,323) $ (37,316,799)
From net investment income (Class B) (1,064) (1,062,901)
From net investment income (Class C) (173) (376,706)
From net investment income (Class I) (444,987) (1,842,205)
From net investment income (Class J) (287) --
From net realized gain on investments and foreign
currency transactions (Class A) (53,551,826) (230,486,039)
From net realized gain on investments and foreign
currency transactions (Class B) (34,839,358) (146,952,144)
From net realized gain on investments and foreign
currency transactions (Class C) (8,621,003) (36,481,782)
From net realized gain on investments and foreign
currency transactions (Class I) (1,254,531) (6,470,396)
From net realized gain on investments and foreign
currency transactions (Class J) (5,420) --
In excess of net investment income (Class A) -- (2,034,099)
In excess of net investment income (Class B) -- (57,938)
In excess of net investment income (Class C) -- (20,534)
In excess of net investment income (Class I) -- (100,417)
--------------- ---------------
Total distributions declared to shareholders $ (103,581,972) $ (463,201,960)
--------------- ---------------
Net increase (decrease) in net assets from trust
share transactions $ (980,007,797) $ 2,988,315,152
--------------- ---------------
Total increase (decrease) in net assets $(1,049,514,275) $ 3,470,844,028
Net assets:
At beginning of period 15,575,068,078 12,104,224,050
--------------- ---------------
At end of period (including accumulated undistributed
net investment income and accumulated distributions in
excess of net investment income of $1,286,836 and
$198,689, respectively) $14,525,553,803 $15,575,068,078
=============== ===============
</TABLE>
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS -- continued
<TABLE>
<CAPTION>
Financial Highlights
-------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED ------------------------------------------------------------------
JUNE 30, 2000 1999 1998 1997 1996 1995
(UNAUDITED)
-------------------------------------------------------------------------------------------------------------------------------
CLASS A
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $20.95 $20.25 $17.52 $14.46 $12.71 $10.07
------ ------ ------ ------ ------ ------
Income from investment operations# -
Net investment income $ 0.04 $ 0.11 $ 0.17 $ 0.18 $ 0.21 $ 0.25
Net realized and unrealized gain on
investments and foreign currency 0.10 1.27 3.77 4.33 3.07 3.67
------ ------ ------ ------ ------ ------
Total from investment operations $ 0.14 $ 1.38 $ 3.94 $ 4.51 $ 3.28 $ 3.92
------ ------ ------ ------ ------ ------
Less distributions declared to shareholders -
From net investment income $(0.01) $(0.09) $(0.16) $(0.17) $(0.21) $(0.46)
From net realized gain on investments
and foreign currency transactions (0.14) (0.58) (1.05) (1.27) (1.32) (0.82)
In excess of net investment income -- (0.01) (0.00)+++ (0.01) -- --
------ ------ ------ ------ ------ ------
Total distributions declared to
shareholders $(0.15) $(0.68) $(1.21) $(1.45) $(1.53) $(1.28)
------ ------ ------ ------ ------ ------
Net asset value - end of period $20.94 $20.95 $20.25 $17.52 $14.46 $12.71
====== ====== ====== ====== ====== ======
Total return(+) 0.67%++ 6.69% 22.95% 31.69% 25.90% 39.34%
Ratios (to average net assets)/Supplemental data:
Expenses## 0.88%+ 0.88% 0.73% 0.74% 0.74% 0.70%
Net investment income 0.38%+ 0.55% 0.86% 1.09% 1.51% 2.13%
Portfolio turnover 41% 62% 54% 44% 47% 54%
Net assets at end of period (000,000
Omitted) $7,918 $8,514 $7,188 $4,323 $2,678 $2,074
+ Annualized.
++ Not annualized.
+++ Per share amount was less than $0.01.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from directed brokerage and certain expense offset arrangements.
(+) Total returns for Class A shares do not include the applicable sales charge. If the charge had been included, the results
would have been lower.
</TABLE>
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS -- continued
<TABLE>
<CAPTION>
Financial Highlights - continued
-------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED -------------------------------------------------------------------
JUNE 30, 2000 1999 1998 1997 1996 1995
(UNAUDITED)
-------------------------------------------------------------------------------------------------------------------------------
CLASS B
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $20.69 $20.04 $17.36 $14.36 $12.63 $10.03
------ ------ ------ ------ ------ ------
Income from investment operations# -
Net investment income (loss) $(0.03) $(0.02) $ 0.04 $ 0.07 $ 0.10 $ 0.15
Net realized and unrealized gain on
investments and foreign currency 0.10 1.26 3.74 4.28 3.06 3.64
------ ------ ------ ------ ------ ------
Total from investment operations $ 0.07 $ 1.24 $ 3.78 $ 4.35 $ 3.16 $ 3.79
------ ------ ------ ------ ------ ------
Less distributions declared to shareholders -
From net investment income $ -- $(0.01) $(0.05) $(0.08) $(0.11) $(0.37)
From net realized gain on investments
and foreign currency transactions (0.14) (0.58) (1.05) (1.27) (1.32) (0.82)
In excess of net investment income -- (0.00)+++ (0.00)+++ (0.00)+++ -- --
------ ------ ------ ------ ------ ------
Total distributions declared to
shareholders $(0.14) $(0.59) $(1.10) $(1.35) $(1.43) $(1.19)
------ ------ ------ ------ ------ ------
Net asset value - end of period $20.62 $20.69 $20.04 $17.36 $14.36 $12.63
====== ====== ====== ====== ====== ======
Total return 0.33%++ 6.28% 22.16% 30.75% 25.05% 38.05%
Ratios (to average net assets)/Supplemental data:
Expenses## 1.53%+ 1.53% 1.39% 1.41% 1.54% 1.56%
Net investment income (loss) (0.28)%+ (0.10)% 0.20% 0.42% 0.72% 1.25%
Portfolio turnover 41% 62% 54% 44% 47% 54%
Net assets at end of period (000,000 Omitted) $5,149 $5,472 $3,862 $1,522 $437 $165
+ Annualized.
++ Not annualized.
+++ Per share amount was less than $0.01.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from directed brokerage and certain expense offset arrangements.
</TABLE>
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS -- continued
<TABLE>
<CAPTION>
Financial Highlights - continued
-----------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, PERIOD ENDED
SIX MONTHS ENDED -------------------------------------------- DECEMBER 31,
JUNE 30, 2000 1999 1998 1997 1996*
(UNAUDITED)
-----------------------------------------------------------------------------------------------------------------------------
CLASS C
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $20.59 $19.95 $17.30 $14.33 $13.93
------ ------ ------ ------ ------
Income from investment operations# -
Net investment income (loss) $(0.03) $(0.02) $ 0.04 $ 0.07 $ 0.05
Net realized and unrealized gain on
investments and foreign currency 0.10 1.25 3.72 4.27 1.76
------ ------ ------ ------ ------
Total from investment operations $ 0.07 $ 1.23 $ 3.76 $ 4.34 $ 1.81
------ ------ ------ ------ ------
Less distributions declared to shareholders -
From net investment income -- $(0.01) $(0.06) $(0.10) $(0.09)
From net realized gain on investments
and foreign currency transactions (0.14) (0.58) (1.05) (1.27) (1.32)
In excess of net investment income -- (0.00)+++ (0.00)+++ (0.00)+++ --
------ ------ ------ ------ ------
Total distributions declared to
shareholders $(0.14) $(0.59) $(1.11) $(1.37) $(1.41)
------ ------ ------ ------ ------
Net asset value - end of period $20.52 $20.59 $19.95 $17.30 $14.33
====== ====== ====== ====== ======
Total return 0.33%++ 6.27% 22.11% 30.76% 12.74%++
Ratios (to average net assets)/Supplemental data:
Expenses## 1.53%+ 1.53% 1.40% 1.41% 1.49%+
Net investment income (loss) (0.28)%+ (0.10)% 0.20% 0.42% 0.77%+
Portfolio turnover 41% 62% 54% 44% 47%
Net assets at end of period (000,000 Omitted) $1,271 $1,356 $824 $211 $12
* For the period from the inception of Class C shares, 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.
## Ratios do not reflect expense reductions from directed brokerage and certain expense offset arrangements.
</TABLE>
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS -- continued
<TABLE>
<CAPTION>
Financial Highlights - continued
----------------------------------------------------------------------------------------------------------------------------
YEAR ENDED
DECEMBER 31, PERIOD ENDED
SIX MONTHS ENDED --------------------------- DECEMBER 31,
JUNE 30, 2000 1999 1998 1997*
(UNAUDITED)
----------------------------------------------------------------------------------------------------------------------------
CLASS I
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $20.97 $20.26 $17.52 $14.33
------ ------ ------ ------
Income from investment operations# -
Net investment income $ 0.07 $ 0.18 $ 0.24 $ 0.26
Net realized and unrealized gain on investments and
foreign currency 0.10 1.28 3.77 4.44
------ ------ ------ ------
Total from investment operations $ 0.17 $ 1.46 $ 4.01 $ 4.70
------ ------ ------ ------
Less distributions declared to shareholders -
From net investment income $(0.05) $(0.16) $(0.22) $(0.23)
From net realized gain on investments and foreign
currency transactions (0.14) (0.58) (1.05) (1.27)
In excess of net investment income -- (0.01) (0.00)+++ (0.01)
------ ------ ------ ------
Total distributions declared to shareholders $(0.19) $(0.75) $(1.27) $(1.51)
------ ------ ------ ------
Net asset value - end of period $20.95 $20.97 $20.26 $17.52
====== ====== ====== ======
Total return 0.80%++ 7.38% 23.40% 33.30%++
Ratios (to average net assets)/Supplemental data:
Expenses## 0.53%+ 0.52% 0.41% 0.41%+
Net investment income 0.73%+ 0.90% 1.19% 1.42%+
Portfolio turnover 41% 62% 54% 44%
Net assets at end of period (000,000 Omitted) $186 $233 $230 $23
* For the period from the inception of Class I shares, January 2, 1997, through December 31, 1997.
+ Annualized.
++ Not annualized.
+++ Per share amount was less than $0.01.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from directed brokerage and certain expense offset arrangements.
</TABLE>
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS -- continued
Financial Highlights - continued
-----------------------------------------------------------------------------
SIX MONTHS ENDED
JUNE 30, 2000
(UNAUDITED)
-----------------------------------------------------------------------------
CLASS J
-----------------------------------------------------------------------------
Per share data (for a share outstanding throughout the period):
Net asset value - beginning of period $20.69
------
Income from investment operations# -
Net investment loss $(0.03)
Net realized and unrealized gain on investments and foreign
currency 0.10
------
Total from investment operations $ 0.07
------
Less distributions declared to shareholders -
From net investment income $(0.01)
From net realized gain on investments and foreign currency
transactions (0.14)
------
Total distributions declared to shareholders $(0.15)
------
Net asset value - end of period $20.61
======
Total return 0.36%++
Ratios (to average net assets)/Supplemental data:
Expenses## 1.53%+
Net investment loss (0.28)%+
Portfolio turnover 41%
Net assets at end of period (000 Omitted) $1,282
+ Annualized.
++ Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from directed brokerage and certain
expense offset arrangements.
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
(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 diversified
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. The trust
can invest in foreign securities. Investments in foreign securities are
vulnerable to the effects of changes in the relative values of the local
currency and the U.S. dollar and to the effects of changes in each country's
legal, political, and economic environment.
Investment Valuations - 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 in good faith,
at fair value, by the Trustees.
Foreign Currency Translation - Investment valuations, other assets, and
liabilities initially expressed in foreign currencies are converted each
business day into U.S. dollars based upon current exchange rates. Purchases and
sales of foreign investments, income, and expenses are converted into U.S.
dollars based upon currency exchange rates prevailing on the respective dates of
such transactions. Gains and losses attributable to foreign currency exchange
rates on sales of securities are recorded for financial statement purposes as
net realized gains and losses on investments. Gains and losses attributable to
foreign exchange rate movements on income and expenses are recorded for
financial statement purposes as foreign currency transaction gains and losses.
That portion of both realized and unrealized gains and losses on investments
that results from fluctuations in foreign currency exchange rates is not
separately disclosed.
Deferred Trustee Compensation - Effective July 24, 1999, under a Deferred
Compensation Plan (the plan) independent Trustees may elect to defer receipt of
all or a portion of their annual compensation. Deferred amounts are treated as
though equivalent dollar amounts had been invested in shares of the trust or
other MFS funds selected by the Trustee. Deferred amounts represent an unsecured
obligation of the trust until distributed in accordance with the plan.
Security Loans - State Street Bank and Trust Company ("State Street"), as
lending agent, may loan the securities of the trust to certain qualified
institutions (the "Borrowers") approved by the trust. 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.
On loans collateralized by U.S. Treasury securities, a fee is received from the
Borrower, and is allocated between the trust and the lending agents. 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.
At June 30, 2000, the value of securities loaned was $107,371,865. These loans
were collateralized by U.S. Treasury securities of $110,634,747.
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 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 trust's custody fee is reduced according to an
arrangement that measures the value of cash deposited with the custodian by the
trust. During the period, the trust's custodian fees were reduced by $586,294
under this arrangement. The trust has entered into a directed brokerage
agreement, under which the broker will credit the trust a portion of the
commissions generated, to offset certain expenses of the trust. For the period,
the trust's custodian fees were reduced by $859,409 under this agreement. These
amounts are 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 net taxable
income, including any net realized gain on investments. Accordingly, no
provision for federal income or excise tax is provided.
Distributions to shareholders are recorded on the ex-dividend date. The trust
distinguishes between distributions on a tax basis and a financial reporting
basis and only distributions in excess of tax basis earnings and profits are
reported in the financial statements as distributions from paid-in capital.
Differences in the recognition or classification of income between the financial
statements and tax earnings and profits, which result in temporary
over-distributions for financial statement purposes, are classified as
distributions in excess of net investment income or net realized gains.
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 daily net
assets of each class, without distinction between share classes. Dividends are
declared separately for each class. Differences in per share dividend rates are
generally due to differences in separate class expenses. 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. The
management fee is computed daily and paid monthly at an annual rate of 0.33% 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. Included in Trustees'
compensation is a net periodic pension expense of $41,734 for the six months
ended June 30, 2000.
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 incurs an administrative fee at
the following annual percentages of the trust's average daily net assets:
First $2 billion 0.0175%
Next $2.5 billion 0.0130%
Next $2.5 billion 0.0005%
In excess of $7 billion 0.0000%
Distributor - MFD, a wholly owned subsidiary of MFS, as distributor, received
$1,207,291 for the six months ended June 30, 2000, 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, Class C, and
Class J 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 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 $910,439 for the six
months ended June 30, 2000. Fees incurred under the distribution plan during the
six months ended June 30, 2000, were 0.35% 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 $54,136 and $5,376 for Class B and Class C shares,
respectively, for the six months ended June 30, 2000. Fees incurred under the
distribution plan during the six months ended June 30, 2000, were 1.00% and
1.00% of average daily net assets attributable to Class B and Class C shares,
respectively, on an annualized basis.
The trust's distribution plan provides that the trust will pay MFD a
distribution fee of up to 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 J shares.
Class J shares are available for distribution through Monex, Inc. ("Monex") and
its network of financial intermediaries. Monex also serves as the trust's Agent
Company in Japan, and in that capacity represents the trust before Japanese
regulatory authorities. MFD will pay to Monex all of the service fees
attributable to Class J shares. Out of the distribution fee, MFD will pay to
Monex 0.615% per annum of average net assets attributable to Class J shares and
will retain the remaining 0.135%. A portion of the distribution fee to Monex,
equal to 0.05% per annum of the trust's average daily net assets attributable to
Class J shares, is paid to cover its services as the trust's Agent Company. Fees
incurred under the distribution plan during the six months ended June 30, 2000,
were 1.00% of average net assets attributable to Class J shares on an annualized
basis.
Certain Class A and Class 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
redemptions of Class B shares in the event of a shareholder redemption within
six years of purchase. MFD receives all contingent deferred sales charges.
Contingent deferred sales charges imposed during the six months ended June 30,
2000, were $121,322, $7,673,680, and $320,849 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 annual rate of 0.10%.
(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 $ 171,168,578 $ --
-------------- --------------
Investments (non-U.S. government
securities) $5,688,406,930 $6,891,507,338
-------------- --------------
The cost and unrealized appreciation and depreciation in the value of the
investments owned by the trust, as computed on a federal income tax basis, are
as follows:
Aggregate cost $11,642,778,853
---------------
Gross unrealized appreciation $ 3,241,058,650
Gross unrealized depreciation (377,670,281)
---------------
Net unrealized appreciation $ 2,863,388,369
===============
(5) Shares of Beneficial Interest
The Trustees have authorized 5,000,000,000 full and fractional shares of
beneficial interest. Transactions in trust shares were as follows:
<TABLE>
<CAPTION>
Class A shares
SIX MONTHS ENDED JUNE 30, 2000 YEAR ENDED DECEMBER 31, 1999
------------------------------ -------------------------------
SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 63,994,041 $ 1,311,873,970 160,629,325 $ 3,274,822,782
Shares issued to shareholders in
reinvestment of distributions 2,177,325 46,141,676 10,234,817 206,329,133
Shares reacquired (94,366,158) (1,925,870,580) (119,487,339) (2,430,201,848)
----------- --------------- ------------ ---------------
Net increase (decrease) (28,194,792) $ (567,854,934) 51,376,803 $ 1,050,950,067
=========== =============== ============ ===============
<CAPTION>
Class B shares
SIX MONTHS ENDED JUNE 30, 2000 YEAR ENDED DECEMBER 31, 1999
------------------------------ -------------------------------
SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 29,258,345 $ 590,115,332 109,984,184 $ 2,219,618,738
Shares issued to shareholders in
reinvestment of distributions 1,420,835 29,690,223 6,297,451 125,542,534
Shares reacquired (45,438,838) (910,435,360) (44,493,378) (896,094,844)
----------- --------------- ------------ ---------------
Net increase (decrease) (14,759,658) $ (290,629,805) 71,788,257 $ 1,449,066,428
=========== =============== ============ ===============
<CAPTION>
Class C shares
SIX MONTHS ENDED JUNE 30, 2000 YEAR ENDED DECEMBER 31, 1999
------------------------------ -------------------------------
SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 11,095,050 $ 222,657,323 39,008,454 $ 783,390,329
Shares issued to shareholders in
reinvestment of distributions 297,017 6,180,716 1,296,414 25,729,120
Shares reacquired (15,317,362) (305,695,316) (15,750,666) (315,548,170)
----------- --------------- ------------ ---------------
Net increase (decrease) (3,925,295) $ (76,857,277) 24,554,202 $ 493,571,279
=========== =============== ============ ===============
<CAPTION>
Class I shares
SIX MONTHS ENDED JUNE 30, 2000 YEAR ENDED DECEMBER 31, 1999
-------------------------------- -------------------------------
SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 1,972,504 $ 41,498,190 2,580,474 $ 52,167,868
Shares issued to shareholders in
reinvestment of distributions 75,192 1,592,059 341,628 6,888,845
Shares reacquired (4,291,397) (88,997,738) (3,150,136) (64,329,536)
----------- --------------- ------------ ---------------
Net decrease (2,243,701) $ (45,907,489) (228,034) $ (5,272,823)
=========== =============== ============ ===============
<CAPTION>
Class I shares
SIX MONTHS ENDED JUNE 30, 2000 YEAR ENDED DECEMBER 31, 1999
------------------------------ -------------------------------
SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 66,490 $ 1,328,613 9.704 $ 200.77
Shares reacquired (4,300) (86,905) -- --
----------- --------------- ------------ ---------------
Net increase 62,190 $ 1,241,708 9.704 $ 200.77
=========== =============== ============ ===============
*For the period from the inception of Class J shares, December 31, 1999, through December 31, 1999.
There was no operating activity associated with Class J shares for this period.
</TABLE>
(6) Line of Credit
The trust and other affiliated funds participate in a $1.1 billion unsecured
line of credit provided by a syndication of banks under a line of credit
agreement. Borrowings may be made for temporary financing needs. Interest is
charged to each fund, based on its borrowings, at a rate equal to the bank's
base rate. In addition, a commitment fee, based on the average daily unused
portion of the line of credit, is allocated among the participating funds at the
end of each quarter. The commitment fee allocated to the trust for the six
months ended June 30, 2000, was $49,412. The trust had no significant borrowings
during the period.
(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 interest rates and 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.
<TABLE>
Forward Foreign Currency Exchange Contracts
<CAPTION>
NET
CONTRACTS AT UNREALIZED
SETTLEMENT DATE CONTRACTS TO DELIVER IN EXCHANGE FOR VALUE APPRECIATION
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Sale 9/13/00 SEK 88,704,000 $10,263,697 $10,115,969 $147,728
</TABLE>
At June 30, 2000, the trust had sufficient cash and/or securities to cover any
commitments under these contracts.
<PAGE>
<TABLE>
MASSACHUSETTS INVESTORS TRUST
<S> <C>
TRUSTEES SECRETARY
J. Atwood Ives+ - Chairman and Chief Executive Stephen E. Cavan*
Officer, Eastern Enterprises (diversified services
company) ASSISTANT SECRETARY
James R. Bordewick, Jr.*
Lawrence T. Perera+ - Partner, Hemenway & Barnes
(attorneys) CUSTODIAN
State Street Bank and Trust Company
William J. Poorvu+ - Adjunct Professor, Harvard
University Graduate School of Business INVESTOR INFORMATION
Administration For information on MFS mutual funds, call your
investment professional or, for an information
Charles W. Schmidt+ - Private Investor kit, call toll free: 1-800-637-2929 any business
day from 9 a.m. to 5 p.m. Eastern time (or leave
Arnold D. Scott* - Senior Executive Vice a message anytime).
President, Director, and Secretary, MFS Investment
Management INVESTOR SERVICE
MFS Service Center, Inc.
Jeffrey L. Shames* - Chairman and Chief Executive P.O. Box 2281
Officer, MFS Investment Management Boston, MA 02107-9906
Elaine R. Smith - Independent Consultant For general information, call toll free:
1-800-225-2606 any business day from 8 a.m. to
David B. Stone - Chairman, North American 8 p.m. Eastern time.
Management Corp. (investment adviser)
For service to speech- or hearing-impaired, call
INVESTMENT ADVISER toll free: 1-800-637-6576 any business day from
Massachusetts Financial Services Company 9 a.m. to 5 p.m. Eastern time. (To use this
500 Boylston Street service, your phone must be equipped with a
Boston, MA 02116-3741 Telecommunications Device for the Deaf.)
DISTRIBUTOR For share prices, account balances, exchanges, or
MFS Fund Distributors, Inc. stock and bond outlooks, call toll free:
500 Boylston Street 1-800-MFS-TALK (1-800-637-8255) anytime from a
Boston, MA 02116-3741 touch-tone telephone.
CHAIRMAN AND PRESIDENT WORLD WIDE WEB
Jeffrey L. Shames* www.mfs.com
PORTFOLIO MANAGERS
Mitchell D. Dynan*
John D. Laupheimer, Jr.*
TREASURER
James O. Yost*
ASSISTANT TREASURERS
Mark E. Bradley*
Ellen Moynihan*
+ Independent Trustee
* MFS Investment Management
</TABLE>
<PAGE>
MASSACHUSETTS ------------
INVESTORS TRUST BULK RATE
U.S. POSTAGE
[Logo] M F S(R) PAID
INVESTMENT MANAGEMENT MFS
We invented the mutual fund(R) ------------
500 Boylston Street
Boston, MA 02116-3741
(c)2000 MFS Investment Management.(R)
MFS(R) investment products are offered through MFS Fund Distributors, Inc.,
500 Boylston Street, Boston, MA 02116
MIT-3 8/00 944M 12/212/312/712/812
