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Supplement dated November 1, 1999 (as revised December 1, 1999)
to the Current Prospectus
Of
MFS/SUN LIFE SERIES TRUST (THE "TRUST")
This supplement describes a new series of the Trust -- the Strategic Growth
Series -- and supplements certain information in the Trust's Prospectus dated
May 1, 1999. The caption headings used in this Supplement correspond with the
caption headings used in the Prospectus. Information which is not supplemented
applies equally to the Strategic Growth Series.
I. EXPENSE SUMMARY - BEGINNING ON PAGE 1
Expense Table. This table describes the expenses that you may pay when
you hold shares of the series. These fees and expenses do not take
into account the fees and expenses imposed under the Variable
Contracts through which an investment in the series is made. The table
is supplemented as follows:
Annual Operating Expenses (expenses that are deducted from the series'
assets):
Strategic Growth Series
Management Fee 0.75%
Other Expenses 3.43%
----
Total Annual Series Operating Expenses 4.18%
Fee Waivers/Expense Reimbursement(1) (3.15)%
Net Expenses(2) 1.03%
-----------------------
(1) MFS has contractually agreed to bear the series' expenses such that
"Other Expenses" do not exceed 0.25% annually. This contractual
arrangement will continue until at least May 1, 2000, unless modified
with the consent of the board of trustees, which oversees the series.
(2) The series has an expense offset arrangement which reduces its custodian
fee based upon the amount of cash maintained by the series with its
custodian and dividend disbursing agent. The series may enter into other
similar arrangements and directed brokerage arrangements, which would
also have the effect of reducing the series' expenses. The series
expenses do not take into account these expense reductions, and therefore
do not represent the actual expenses of the series. Had these expense
reductions been taken into account, "Net Expenses" would be estimated to
be 1.00%.
Example of Expenses. The "Example of Expenses" table is intended to
help you compare the cost of investing in the series with the cost of
investing in other mutual funds.
The example assumes that:
o You invest $10,000 in the series for the time periods
indicated and you redeem your shares at the end of the time
periods;
o Your investment has a 5% return each year and dividends and
other distributions are reinvested; and
o The series' operating expenses remain the same, except that
the series' total operating expenses are assumed to be the
series' "Net Expenses" for the first year, and the series'
"Total Annual Series Operating Expenses" for subsequent
years (see table above).
The table is supplemented as follows:
Although your actual costs may be higher or lower, under these
assumptions your costs would be:
Year 1 Year 3
------ ------
Strategic Growth Series $102 $979
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II. RISK RETURN SUMMARY - BEGINNING ON PAGE 4
This section of the prospectus is supplemented as follows:
27: Strategic Growth Series
Investment Objective. The series' investment objective is capital
appreciation. Approval by the series' shareholders is not
required to modify or change the series' objective.
Principal Investment Strategies. The series invests, under normal
market conditions, at least 65% of its total assets in common
stocks and related securities, such as preferred stocks, bonds,
warrants, or rights convertible into stock and depositary
receipts for these securities, of companies which MFS believes
offer superior prospects for growth.
MFS uses a bottom-up, as opposed to a top-down, investment style
in managing the equity-oriented funds (such as the series) it
advises. This means that securities are selected based upon
fundamental analysis (such as an analysis of earnings, cash
flows, competitive position and management's abilities) performed
by the series' portfolio manager and MFS' large group of equity
research analysts.
In managing the series, MFS seeks to purchase securities of
companies which MFS considers well-run and poised for growth. MFS
looks particularly for companies which demonstrate:
o a strong franchise, strong cash flows and a recurring
revenue stream
o a solid industry position, where there is
potential for high profit margins
substantial barriers to new entry in the industry
o a strong management team with a clearly defined
strategy o a catalyst which may accelerate growth
Consistent with the series' principal investment strategies
described above, the series may invest in foreign securities, and
may have exposure to foreign currencies through its investment in
these securities.
Principal Risks of an Investment. The principal risks of
investing in the series and the circumstances reasonably likely
to cause the value of your investment in the series to decline
are described below. The share price of the series generally
changes daily based on market conditions and other factors.
Please note that there are many circumstances which could cause
the value of your investment in the series to decline, and which
could prevent the series from achieving its objective, that are
not described here. The principal risks of investing in the
series are:
o Market Risk: This is the risk that the price of a
security held by the series will fall due to changing
economic, political or market conditions, or due to the
financial condition of the company which issued the
security.
o Growth Companies: This is the risk that the prices of
growth company securities held by the series, which are
the series' principal investment focus, will fall to a
greater extent than the overall equity markets (e.g.,
as represented by the Standard and Poor's Composite 500
Index) due to changing economic, political or market
conditions.
o Foreign Securities: Investments in foreign securities
involve risks relating to political, social and
economic developments abroad, as well as risks
resulting from the differences between the regulations
to which U.S. and foreign issuers and markets are
subject:
These risks may include the seizure by the
government of company assets, excessive taxation,
withholding taxes on dividends and interest,
limitations on the use or transfer of portfolio
assets, and political or social instability.
Enforcing legal rights may be difficult, costly
and slow in foreign countries, and there may be
special problems enforcing claims against foreign
governments.
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Foreign companies may not be subject to accounting
standards or governmental supervision comparable
to U.S. companies, and there may be less public
information about their operations.
Foreign markets may be less liquid and more
volatile than U.S. markets.
Foreign securities often trade in currencies other
than the U.S. dollar, and the series may directly
hold foreign currencies and purchase and sell
foreign currencies through forward exchange
contracts. Changes in currency exchange rates
will affect the series' net asset value, the value
of dividends and interest earned, and gains and
losses realized on the sale of securities. An
increase in the strength of the U.S. dollar
relative to these other currencies may cause the
value of the series to decline. Certain foreign
currencies may be particularly volatile, and
foreign governments may intervene in the currency
markets, causing a decline in value or liquidity
in the series' foreign currency holdings. Forward
foreign currency exchange contracts involve the
risk that the party with which the series enters
the contract may fail to perform its obligations
to the series.
Bar Chart and Performance Table. The bar chart and performance table are
not included because the series did not have a full calendar year of
performance on December 31, 1998.
III. CERTAIN INVESTMENT STRATEGIES AND RISKS - BEGINNING ON PAGE 76
The series may invest in various types of securities and engage in various
investment techniques and practices which are not the principal focus of the
series and therefore are not described in this Supplement. The types of
securities and investment techniques and practices in which the series may
engage are identified in Appendix A to this Supplement, and are discussed,
together with their risks, in the series' Statement of Additional Information
(referred to as the SAI), which you may obtain by contacting Sun Life Assurance
Company of Canada (U.S.) Retirement Products and Services Division (see the back
cover of the prospectus for the address and phone number).
IV. MANAGEMENT OF THE SERIES - BEGINNING ON PAGE 77
Investment Adviser. Massachusetts Financial Services Company is the series'
investment adviser, and is described in the prospectus.
Portfolio Managers.
This section is supplemented as follows:
Series Portfolio Managers
Strategic Growth Series S. Irfan Ali, Vice President of MFS,
has been the portfolio manager of the
series since its inception.
Mr. Ali has been employed by MFS as a
portfolio manager since 1993.
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APPENDIX A
Investment Techniques and Practices. In pursuing its investment
objective, the series may engage in the following principal and
non-principal investment techniques and practices. Investment
techniques and practices which are the principal focus of the series
are described, together with their risks, in the Risk Return Summary of
this Supplement. Both principal and non-principal investment techniques
and practices are described, together with their risks, in the SAI.
Investment Techniques/Practices
Symbols |X|Permitted -- Not Permitted
Strategic Growth Series
Debt Securities
Asset-Backed Securities
Collateralized Mortgage Obligations and Multiclass --
Pass-Through Securities
Corporate Asset-Backed Securities --
Mortgage Pass-Through Securities --
Stripped Mortgage-Backed Securities --
Corporate Securities |X|
Loans and Other Direct Indebtedness --
Lower Rated Bonds --
Municipal Bonds --
Speculative Bonds --
U.S. Government Securities |X|
Variable and Floating Rate Obligations --
Zero Coupon Bonds, Deferred Interest Bonds and PIK Bonds |X|
Equity Securities |X|
Foreign Securities Exposure
Brady Bonds --
Depositary Receipts |X|
Dollar-Denominated Foreign Debt Securities |X|
Emerging Markets |X|
Foreign Securities |X|
Forward Contracts |X|
Futures Contracts |X|
Indexed Securities/Structured Products |X|
Inverse Floating Rate Obligations --
Investment in Other Investment Companies
Open-End Funds |X|
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Symbols |X|Permitted -- Not Permitted
Strategic Growth Series
Closed-End Funds |X|
Laddering --
Lending of Portfolio Securities |X|
Leveraging Transactions
Bank Borrowings |X|
Mortgage "Dollar-Roll" Transactions --
Reverse Repurchase Agreements |X|
Options
Options on Foreign Currencies |X|
Options on Futures Contracts |X|
Options on Securities |X|
Options on Stock Indices |X|
Reset Options |X|
"Yield Curve" Options |X|
Repurchase Agreements |X|
Restricted Securities |X|
Short Sales |X|
Short Sales Against the Box |X|
Short Term Instruments |X|
Swaps and Related Derivative Instruments |X|
Temporary Borrowings |X|
Temporary Defensive Positions |X|
Warrants |X|
"When-issued" Securities |X|
The date of this Supplement is November 1, 1999 (as revised December 1, 1999).
