<PAGE>
[Logo] M F S (R)
INVESTMENT MANAGEMENT
We invented the mutual fund(R)
[Graphic Omitted]
MFS(R) GOVERNMENT
LIMITED MATURITY FUND
SEMIANNUAL REPORT o JUNE 30, 2000
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TABLE OF CONTENTS
Letter from the Chairman .................................................. 1
Management Review and Outlook ............................................. 4
Performance Summary ....................................................... 8
Portfolio of Investments .................................................. 11
Financial Statements ...................................................... 12
Notes to Financial Statements ............................................. 19
Trustees and Officers ..................................................... 25
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.
MANAGEMENT REVIEW AND OUTLOOK
[Photo of D. Richard Smith]
D. Richard Smith
For the six months ended June 30, 2000, Class A shares of the fund provided a
total return of 2.83%, Class B shares 2.32%, Class C shares 2.41%, and Class I
shares 3.04%. These returns assume the reinvestment of distributions but exclude
the effects of any sales charges and compare to a 2.98% return for the average
short-term U.S. government debt fund tracked by Lipper Inc., an independent firm
that reports mutual fund performance. The fund's returns also compare to a 2.95%
return for the fund's benchmark, the Lehman Brothers One- to Three-Year
Government Bond Index (the Lehman Index), an unmanaged, market-value-weighted
index comprised of debt issued by the U.S. government and its agencies with
remaining maturities of one to three years.
Q. CAN YOU START BY REVIEWING THE OVERALL GOAL OF THE FUND?
A. Sure. We seek to provide a bond fund of government-quality securities with
low price volatility and yields that, over a time frame of several years,
will exceed the total return of most money market accounts. All holdings in
our portfolio meet the strict federal eligibility requirements for
investments by banks and credit unions. During more favorable periods, such
as when interest rates are stable or declining, we try to produce yields that
outperform the returns of money market accounts. We believe this conservative
strategy may help us to outperform the majority of money market accounts over
most two- to three-year periods. (Investments in the fund are neither insured
nor guaranteed by the U.S. government. See the Prospectus for details.)
Q. HOW DID THE FUND PERFORM OVER THE PAST SIX MONTHS?
A. The fund performed according to its design. We aim to produce a positive
return during difficult periods for bonds, which is exactly what happened
during the six months ended June 30, 2000. Continued strong economic growth
and rising interest rates muted government security returns. In order to put
the brakes on the economy and the stock market, the Federal Reserve Board
(the Fed) raised short-term interest rates three times from the beginning of
2000 through the end of June. The most recent rate increase was a
half-percentage-point hike in May, the largest in five years. By the end of
June, the federal funds rate -- the rate used for overnight loans between
banks -- was up to 6.50%, the highest level in nine years. As short-term
interest rates soared, most bond yields rose and their prices fell.
Q. LET'S START WITH U.S. TREASURY SECURITIES. HOW DID THEY FARE DURING THE
PERIOD?
A. Although their yields ended the period about where they began, short-term
Treasuries experienced a fair amount of volatility during the period.
(Principal value and interest on Treasury securities are guaranteed by the
U.S. government if held to maturity.) Toward the beginning of the period, the
yield on two-year Treasury notes stood at roughly 6.20%. They moved higher
and lower in the ensuing months, peaking in May at about 6.90% as investors
continued to worry about the Fed's interest-rate and inflation-fighting
stances. In June, however, we believe investors became more confident that
the Fed was nearing the end of its year-long campaign to cool the economy and
inflation, and yields went back down to around 6.30% at the end of June. With
yields showing little net movement from the beginning to the end of the
period, short-term Treasury securities prices were more or less stagnant.
During the period, we kept about 37% of the fund in U.S. Treasuries, which
was a plus given their relatively strong performance. Although most of our
Treasury holdings were one-year Treasury notes, we also had a small amount of
10-year Treasury bonds, which performed better than their shorter-term
counterparts. In addition, we maintained a 5% cash position because we were
in a period when the Fed was raising interest rates; cash added stability to
the portfolio.
Q. HOW DID YOU DIVIDE THE FUND'S INVESTMENTS AMONG THE OTHER SECTORS THAT MAKE
UP THE GOVERNMENT BOND MARKET?
A. The allocation of the other sectors was approximately 41% mortgage-backed
securities and 17% government agency debentures. While our U.S. Treasury and
cash positions aided the fund's performance, mortgage securities and agency
debentures underperformed their U.S. Treasury counterparts.
In response to the U.S. budget surplus, the U.S. Treasury scaled back its
auctions of new debt and bought back some outstanding securities. The
anticipated scarcity of Treasuries helped raise their prices even as interest
rates rose. In contrast, the mortgage and agency markets suffered from an
abundance of supply. As a result, the spread -- or the difference in yield --
between Treasuries and other segments of the government bond market widened,
putting downward pressure on the prices of mortgage-backed and agency
securities. In that environment, we felt mortgage-backed and agency
securities offered a growing yield advantage over higher-rated bonds.
Both mortgage-backed and agency securities were attractively priced at the
end of the period and offered very attractive yields, especially when viewed
on a historical basis. So we began to increase our weighting in both sectors.
The securities we added offered anywhere between 1% to 2% more yield than
comparable U.S. Treasury securities. In our view, this additional yield more
than adequately compensated us for the slight additional risk these bonds
carry, given our belief that mortgage and agency securities prices will
stabilize once supply has been absorbed, and they may in turn add yield to
the fund.
Among mortgage-backed and agency securities, we stick to those that are
guaranteed by the full faith and credit of government agencies such as the
Government National Mortgage Association (Ginnie Mae), the Federal National
Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage
Corporation (Freddie Mac).
Q. WHAT'S YOUR OUTLOOK FOR THE ECONOMY AND INTEREST RATES GOING FORWARD?
A. At the end of the period, we felt the bond market had discounted the
possibility that the Fed would continue to raise interest rates. In our view,
that assumption may be slightly premature. Granted, there have been some
signs that the economy is slowing. But inflation and commodity prices are
running at a higher rate than they were a year ago. Furthermore, the U.S.
economy remains strong and there's also a lot of economic strength on a
global basis. That's why we believe it's entirely possible that the Fed will
continue to raise rates and, over the short-term, bonds may continue to come
under pressure. We also believe that the U.S. Treasury will continue to buy
back some of its outstanding debt. Beyond that, however, we are more
optimistic because we believe that the interest rate hikes eventually will
slow the economy. If that's the case, then interest rates could fall,
providing a better backdrop for bonds. Given that outlook, we're comfortable
with the fund's current positioning, with the majority of our holdings in
mortgage-backed and agency securities.
/s/ D. Richard Smith
D. Richard Smith
Portfolio Manager
The opinions expressed in this report are those of the portfolio manager and are
current only through the end of the period of the report as stated on the cover.
The manager's 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.
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PORTFOLIO MANAGER'S PROFILE
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D. RICHARD SMITH IS VICE PRESIDENT OF MFS INVESTMENT MANAGEMENT(R) AND PORTFOLIO
MANAGER OF MFS(R) GOVERNMENT MORTGAGE FUND AND MFS(R) GOVERNMENT LIMITED
MATURITY FUND.
MR. SMITH JOINED MFS IN 1993. HE BECAME A PORTFOLIO MANAGER IN 1997. FROM 1986
TO 1993 HE WORKED IN RESEARCH AND INSTITUTIONAL SALES ON WALL STREET. HE IS A
GRADUATE OF VASSAR COLLEGE AND HAS AN M.B.A. DEGREE FROM VANDERBILT UNIVERSITY.
ALL PORTFOLIO MANAGERS AT MFS INVESTMENT MANAGEMENT(R) ARE SUPPORTED BY AN
INVESTMENT STAFF OF OVER 100 PROFESSIONALS UTILIZING MFS ORIGINAL RESEARCH(R), A
GLOBAL, ISSUER-ORIENTED, BOTTOM-UP PROCESS OF SELECTING SECURITIES.
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 TO PRESERVE CAPITAL AND PROVIDE HIGH CURRENT
INCOME (COMPARED TO A PORTFOLIO INVESTED ENTIRELY IN
MONEY MARKET INSTRUMENTS).
COMMENCEMENT OF
INVESTMENT OPERATIONS: SEPTEMBER 26, 1988
CLASS INCEPTION: CLASS A SEPTEMBER 26, 1988
CLASS B SEPTEMBER 7, 1993
CLASS C AUGUST 1, 1994
CLASS I JANUARY 2, 1997
SIZE: $255.0 MILLION NET ASSETS AS OF JUNE 30, 2000
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 +2.83% +4.43% +15.63% +28.06% +73.46%
--------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +4.43% + 4.96% + 5.07% + 5.66%
--------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- +1.82% + 4.08% + 4.54% + 5.40%
--------------------------------------------------------------------------------------------------------------
<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 +2.32% +3.49% +12.85% +22.89% +63.55%
--------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +3.49% + 4.11% + 4.21% + 5.04%
--------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- -0.44% + 3.21% + 3.89% + 5.04%
--------------------------------------------------------------------------------------------------------------
<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 +2.41% +3.45% +12.67% +22.60% +64.69%
--------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +3.45% + 4.06% + 4.16% + 5.12%
--------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- +2.47% + 4.06% + 4.16% + 5.12%
--------------------------------------------------------------------------------------------------------------
<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 +3.04% +4.73% +16.02% +28.59% +74.18%
--------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +4.73% + 5.08% + 5.16% + 5.71%
--------------------------------------------------------------------------------------------------------------
</TABLE>
NOTES TO PERFORMANCE SUMMARY
Class A Share Performance Including Sales Charge takes into account the
deduction of the maximum 2.50% 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 B, C, and I share performance include the performance of the fund'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 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 and C
shares are higher than those of Class A, the blended Class B and C share
performance is higher than it would have been had Class B and C shares been
offered for the entire period. Conversely, because the 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.
Government guarantees apply to individual securities only and not to prices and
yields of shares in a managed portfolio. See the prospectus for details.
PORTFOLIO CONCENTRATION AS OF JUNE 30, 2000
Mortgage Backed 40.8%
Government Agency 16.7%
Cash 5.3%
U.S. Treasuries 37.2%
The portfolio is actively managed, and current holdings may be different.
<PAGE>
PORTFOLIO OF INVESTMENTS (Unaudited) -- June 30, 2000
Bonds - 93.9%
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PRINCIPAL AMOUNT
ISSUER (000 OMITTED) VALUE
-------------------------------------------------------------------------------
U.S. Federal Agencies - 47.3%
Federal Home Loan Bank, 7.25s, 2002 $18,500 $ 18,578,070
Federal Home Loan Mortgage Corp., 5.75s, 2001 10,000 9,900,000
Federal Home Loan Mortgage Corp., 6s, 2008 7,417 7,328,608
Federal Home Loan Mortgage Corp., 8s, 2011 - 2023 5,518 5,575,773
Federal National Mortgage Assn., 6.1s, 2001 10,000 9,900,000
Federal National Mortgage Assn., 6.132s, 2011 9,605 9,289,731
Federal National Mortgage Assn., 6.178s, 2014 8,361 8,154,860
Federal National Mortgage Assn., 6.461s, 2029 8,619 8,739,237
Federal National Mortgage Assn., 6.5s, 2006 10,717 10,646,123
Federal National Mortgage Assn., 6.69s, 2001 3,500 3,486,875
Federal National Mortgage Assn., 7s, 2006 - 2099 17,000 16,872,210
Federal National Mortgage Assn., 7.5s, 2011 - 2015 10,178 10,145,806
Federal National Mortgage Assn., 8s, 2011 1,983 2,003,727
------------
$120,621,020
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U.S. Government Guaranteed - 46.6%
Government National Mortgage Association - 9.9%
GNMA, 7.125s, 2023 - 2025 $18,275 $ 18,357,670
GNMA, 8s, 2014 - 2015 3,418 3,471,066
GNMA, 8.5s, 2002 - 2010 1,224 1,257,345
GNMA, 9s, 2001 - 2007 1,964 2,041,804
------------
$ 25,127,885
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U.S. Treasury Obligations - 36.7%
U.S. Treasury Notes, 7.5s, 2001 $15,000 $ 15,189,900
U.S. Treasury Notes, 7.875s, 2001 16,000 16,235,040
U.S. Treasury Notes, 8s, 2001 51,950 52,591,063
U.S. Treasury Notes, 4.25s, 2010 5,088 5,160,810
U.S. Treasury Notes, 6.5s, 2010 4,250 4,395,435
------------
$ 93,572,248
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Total U.S. Government Guaranteed $118,700,133
-------------------------------------------------------------------------------
Total Bonds (Identified Cost, $243,181,566) $239,321,153
-------------------------------------------------------------------------------
Repurchase Agreement - 4.1%
-------------------------------------------------------------------------------
Merrill Lynch, dated 6/30/00, due 7/03/00, total to
be received, $10,570,967 (secured by various U.S.
Treasury and Federal Agency obligations in a
jointly traded account), at Cost $10,569 $ 10,569,000
-------------------------------------------------------------------------------
Total Investments (Identified Cost, $253,750,566) $249,890,153
Other Assets, Less Liabilities - 2.0% 5,099,202
-------------------------------------------------------------------------------
Net Assets - 100.0% $254,989,355
-------------------------------------------------------------------------------
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS
Statement of Assets and Liabilities (Unaudited)
---------------------------------------------------------------------------
JUNE 30, 2000
---------------------------------------------------------------------------
Assets:
Investments, at value (identified cost, $253,750,566) $249,890,153
Cash 806
Receivable for investments sold 10,374,073
Receivable for fund shares sold 3,565,615
Interest receivable 2,542,230
Other assets 3,790
------------
Total assets $266,376,667
------------
Liabilities:
Distributions payable $ 411,908
Payable for investments purchased 9,959,618
Payable for fund shares reacquired 804,189
Payable to affiliates -
Management fee 2,768
Shareholder servicing agent fee 692
Distribution and service fee 29,672
Administrative fee 121
Accrued expenses and other liabilities 178,344
------------
Total liabilities $ 11,387,312
------------
Net assets $254,989,355
============
Net assets consist of:
Paid-in capital $289,878,017
Unrealized depreciation on investments (3,860,413)
Accumulated net realized loss on investments (30,729,932)
Accumulated distributions in excess of net investment
income (298,317)
------------
Total $254,989,355
============
Shares of beneficial interest outstanding 31,453,588
==========
Class A shares:
Net asset value per share
(net assets of $179,880,295 / 22,165,428 shares of
beneficial interest outstanding) $8.12
=====
Offering price per share (100 / 97.5 of net asset
value per share) $8.33
=====
Class B shares:
Net asset value and offering price per share
(net assets of $55,698,723 / 6,882,796 shares of
beneficial interest outstanding) $8.09
=====
Class C shares:
Net asset value and offering price per share
(net assets of $19,410,227 / 2,405,350 shares of
beneficial interest outstanding) $8.07
=====
Class I shares:
Net asset value, offering price, and redemption
price per share (net assets of
$110 / 14 shares of beneficial interest
outstanding) $8.11
=====
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:
Interest income $ 9,298,834
-----------
Expenses -
Management fee $ 528,635
Trustees' compensation 21,803
Shareholder servicing agent fee 132,158
Distribution and service fee (Class A) 137,624
Distribution and service fee (Class B) 283,027
Distribution and service fee (Class C) 100,287
Administrative fee 21,454
Custodian fee 48,790
Printing 17,419
Postage 14,393
Auditing fees 13,100
Legal fees 7
Miscellaneous 78,499
-----------
Total expenses $ 1,397,196
Fees paid indirectly (18,989)
-----------
Net expenses $ 1,378,207
-----------
Net investment income $ 7,920,627
-----------
Realized and unrealized gain (loss) on investments:
Realized loss (identified cost basis) on investment transactions $(3,084,333)
Change in unrealized appreciation on investments 1,970,792
-----------
Net realized and unrealized loss on investments $(1,113,541)
-----------
Increase in net assets from operations $ 6,807,086
===========
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 $ 7,920,627 $ 17,367,738
Net realized loss on investments (3,084,333) (4,861,803)
Net unrealized gain (loss) on investments 1,970,792 (6,089,837)
------------- -------------
Increase in net assets from operations $ 6,807,086 $ 6,416,098
------------- -------------
Distributions declared to shareholders -
From net investment income (Class A) $ (5,563,991) $ (12,110,749)
From net investment income (Class B) (1,614,925) (3,561,308)
From net investment income (Class C) (529,214) (1,421,241)
From net investment income (Class I) (3) (11,315)
------------- -------------
Total distributions declared to shareholders $ (7,708,133) $ (17,104,613)
------------- -------------
Net decrease in net assets from fund share transactions $ (31,178,354) $ (11,457,764)
------------- -------------
Total decrease in net assets $ (32,079,401) $ (22,146,279)
Net assets:
At beginning of period 287,068,756 309,215,035
------------- -------------
At end of period (including accumulated distributions in
excess of net investment income of $298,317 and
$510,811, respectively) $ 254,989,355 $ 287,068,756
============= =============
</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
-------------------------------------------------------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
<S> <C> <C> <C> <C> <C> <C>
Net asset value - beginning of
period $ 8.14 $ 8.42 $ 8.40 $ 8.41 $ 8.68 $ 8.42
------ ------ ------ ------ ------ ------
Income from investment operations# -
Net investment income $ 0.25 $ 0.48 $ 0.50 $ 0.53 $ 0.56 $ 0.59
Net realized and unrealized
gain (loss) on investments (0.02) (0.29) 0.02 (0.02) (0.30) 0.25
------ ------ ------ ------ ------ ------
Total from investment
operations $ 0.23 $ 0.19 $ 0.52 $ 0.51 $ 0.26 $ 0.84
------ ------ ------ ------ ------ ------
Less distributions declared to
shareholders from net investment
income $(0.25) $(0.47) $(0.50) $(0.52) $(0.53) $(0.58)
------ ------ ------ ------ ------ ------
Net asset value - end of period $ 8.12 $ 8.14 $ 8.42 $ 8.40 $ 8.41 $ 8.68
====== ====== ====== ====== ====== ======
Total return(+) 2.83%++ 2.31% 6.34% 6.30% 2.98% 10.36%
Ratios (to average net assets)/
Supplemental data:
Expenses## 0.82%+ 0.81% 0.84% 0.84% 0.84% 0.88%
Net investment income 6.25%+ 5.76% 5.95% 6.27% 6.55% 6.91%
Portfolio turnover 62% 165% 368% 266% 301% 447%
Net assets at end of period
(000 omitted) $179,880 $191,955 $215,877 $190,039 $226,976 $248,955
+ Annualized.
++ Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from 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 $ 8.12 $ 8.40 $ 8.39 $ 8.39 $ 8.67 $ 8.41
------ ------ ------ ------ ------ ------
Income from investment operations# -
Net investment income $ 0.22 $ 0.41 $ 0.43 $ 0.46 $ 0.47 $ 0.51
Net realized and unrealized
gain (loss) on investments (0.03) (0.29) 0.01 -- (0.30) 0.25
------ ------ ------ ------ ------ ------
Total from investment
operations $ 0.19 $ 0.12 $ 0.44 $ 0.46 $ 0.17 $ 0.76
------ ------ ------ ------ ------ ------
Less distributions declared to
shareholders from net investment
income $(0.22) $(0.40) $(0.43) $(0.46) $(0.45) $(0.50)
------ ------ ------ ------ ------ ------
Net asset value - end of period $ 8.09 $ 8.12 $ 8.40 $ 8.39 $ 8.39 $ 8.67
====== ====== ====== ====== ====== ======
Total return 2.32%++ 1.50% 5.43% 5.61% 2.08% 9.31%
Ratios (to average net assets)/
Supplemental data:
Expenses## 1.60%+ 1.61% 1.60% 1.63% 1.72% 1.74%
Net investment income 5.47%+ 4.96% 5.17% 5.48% 5.67% 6.02%
Portfolio turnover 62% 165% 368% 266% 301% 447%
Net assets at end of period
(000 omitted) $55,699 $71,472 $68,867 $34,843 $34,643 $33,759
+ Annualized.
++ Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset arrangements.
</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 C
-------------------------------------------------------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
<S> <C> <C> <C> <C> <C> <C>
Net asset value - beginning of
period $ 8.09 $ 8.38 $ 8.37 $ 8.37 $ 8.65 $ 8.39
------ ------ ------ ------ ------ ------
Income from investment operations# -
Net investment income $ 0.21 $ 0.41 $ 0.43 $ 0.45 $ 0.48 $ 0.51
Net realized and unrealized
gain (loss) on investments (0.02) (0.30) 0.01 -- (0.30) 0.25
------ ------ ------ ------ ------ ------
Total from investment
operations $ 0.19 $ 0.11 $ 0.44 $ 0.45 $ 0.18 $ 0.76
------ ------ ------ ------ ------ ------
Less distributions declared to
shareholders from net investment
income $(0.21) $(0.40) $(0.43) $(0.45) $(0.46) $(0.50)
------ ------ ------ ------ ------ ------
Net asset value - end of period $ 8.07 $ 8.09 $ 8.38 $ 8.37 $ 8.37 $ 8.65
====== ====== ====== ====== ====== ======
Total return 2.41%++ 1.33% 5.35% 5.56% 2.12% 9.33%
Ratios (to average net assets)/
Supplemental data:
Expenses## 1.67%+ 1.66% 1.69% 1.69% 1.69% 1.73%
Net investment income 5.40%+ 4.91% 5.10% 5.42% 5.68% 5.87%
Portfolio turnover 62% 165% 368% 266% 301% 447%
Net assets at end of period
(000 omitted) $19,410 $23,642 $24,286 $18,192 $22,215 $17,365
+ Annualized.
++ Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from 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
----------------------------------------------------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
<S> <C> <C> <C> <C>
Net asset value - beginning of period $ 8.12 $ 8.40 $ 8.40 $ 8.40
------ ------ ------ ------
Income from investment operations# -
Net investment income $ 0.31 $ 0.51 $ 0.46 $ 0.53
Net realized and unrealized gain (loss)
on investments (0.07) (0.31) 0.05 --
------ ------ ------ ------
Total from investment operations $ 0.24 $ 0.20 $ 0.51 $ 0.53
------ ------ ------ ------
Less distributions declared to shareholders from net
investment income $(0.25) $(0.48) $(0.51) $(0.53)
------ ------ ------ ------
Net asset value - end of period $ 8.11 $ 8.12 $ 8.40 $ 8.40
====== ====== ====== ======
Total return 3.04%++ 2.46% 6.25% 6.55%++
Ratios (to average net assets)/Supplemental data:
Expenses## 0.67%+ 0.66% 0.66% 0.69%+
Net investment income 6.40%+ 5.91% 6.23% 6.42%+
Portfolio turnover 62% 165% 368% 266%
Net assets at end of period (000 omitted) $ -- $ -- $ 185 $ 182
* For the period from the inception of Class I, January 2, 1997, through December 31, 1997.
+ Annualized.
++ Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset arrangements.
</TABLE>
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
(1) Business and Organization
MFS Government Limited Maturity Fund (the fund) is organized as a Massachusetts
business trust 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.
Investment Valuations - Debt securities (other than short-term obligations which
mature in 60 days or less), including listed issues, are valued on the basis of
valuations furnished by dealers or by a pricing service with consideration to
factors such as institutional-size trading in similar groups of securities,
yield, quality, coupon rate, maturity, type of issue, trading characteristics,
and other market data, without exclusive reliance upon exchange or
over-the-counter prices. Short-term obligations, which mature in 60 days or
less, are valued at amortized cost, which approximates market value. Securities
for which there are no such quotations or valuations are valued in good faith,
at fair value, by the Trustees.
Repurchase Agreements - The fund may enter into repurchase agreements with
institutions that the fund's investment adviser has determined are creditworthy.
Each repurchase agreement is recorded at cost. The fund requires that the
securities collateral in a repurchase transaction be transferred to the
custodian in a manner sufficient to enable the fund to obtain those securities
in the event of a default under the repurchase agreement. The fund monitors, on
a daily basis, the value of the collateral to ensure that its value, including
accrued interest, is greater than amounts owed to the fund under each such
repurchase agreement. The fund, along with other affiliated entities of
Massachusetts Financial Services Company (MFS), may utilize a joint trading
account for the purpose of entering into one or more repurchase agreements.
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. Interest payments received in additional
securities are recorded on the ex-interest date in an amount equal to the value
of the security on such date. Some securities may be purchased on a
"when-issued" or "forward delivery" basis, which means that the securities will
be delivered to the fund at a future date, usually beyond customary settlement
time.
Fees Paid Indirectly - The fund's custody fee is reduced according to an
arrangement that measures the value of cash deposited with the custodian by the
fund. This amount is shown as a reduction of expenses on the Statement of
Operations.
Tax Matters and Distributions - The fund's policy is to comply with the
provisions of the Internal Revenue Code (the Code) applicable to regulated
investment companies and to distribute to shareholders all of its 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 fund
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.
At December 31, 1999, the fund, for federal income tax purposes, had a capital
loss carryforward of $27,643,690, which may be applied against any net taxable
realized gains of each succeeding year until the earlier of its utilization or
expiration on December 31, 2002, ($12,883,519), December 31, 2003, ($2,302,419),
December 31, 2004, ($4,284,511), December 31, 2005, ($3,064,412), and December
31, 2007, ($5,108,829).
Multiple Classes of Shares of Beneficial Interest - The fund offers multiple
classes of shares that differ in their respective distribution and service fees.
All shareholders bear the common expenses of the fund based on the value of
settled shares outstanding 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 fund has an investment advisory agreement with 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 the lesser of (i) 0.40% of the fund's average daily net assets or
(ii) 0.38% of the fund's average daily net assets, and 5.36% of gross investment
income.
The fund pays no compensation directly to its Trustees who are officers of the
investment adviser, or to officers of the fund, all of whom receive remuneration
for their services to the fund from MFS. Certain officers and Trustees of the
fund are officers or directors of MFS, MFS Fund Distributors, Inc. (MFD), and
MFS Service Center, Inc. (MFSC). The fund has an unfunded defined benefit plan
for all of its independent Trustees. Included in Trustees' compensation is a net
periodic pension expense of $6,564 for the six months ended June 30, 2000.
Administrator - The fund has an administrative services agreement with MFS to
provide the fund with certain financial, legal, shareholder servicing,
compliance, and other administrative services. As a partial reimbursement for
the cost of providing these services, the fund incurs an administrative fee at
the following annual percentages of the fund'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
$10,615 for the six months ended June 30, 2000, as its portion of the sales
charge on sales of Class A shares of the fund. The Trustees have adopted a
distribution plan for Class A, Class B, and Class C shares pursuant to Rule
12b-1 of the Investment Company Act of 1940 as follows:
The fund's distribution plan provides that the fund will pay MFD up to 0.35% per
annum of its average daily net assets attributable to Class A shares in order
that MFD may pay expenses on behalf of the fund related to the distribution and
servicing of its shares. These expenses include a service fee paid to each
securities dealer that enters into a sales agreement with MFD of up to 0.25% per
annum (reduced to a maximum of 0.15% for an indefinite period of time) of the
fund'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 fund's average daily net assets attributable to Class A
shares. Payment of the 0.10% per annum Class A distribution fee will commence on
such a date as the Trustees of the fund may determine. MFD retains the service
fee for accounts not attributable to a securities dealer, which amounted to
$13,711 for the six months ended June 30, 2000. Fees incurred under the
distribution plan during the six months ended June 30, 2000, were 0.15% of
average daily net assets attributable to Class A shares on an annualized basis.
The fund's distribution plan provides that the fund will pay MFD a distribution
fee of 0.75% per annum, and a service fee of up to 0.25% per annum, of the
fund's average daily net assets attributable to Class B 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. The service
fee is currently being reduced to 0.15% on Class B shares held over one year.
MFD retains the service fee for accounts not attributable to a securities
dealer, which amounted to $1,266 and $328 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 0.93% and
1.00% of average daily net assets attributable to Class B and Class C shares,
respectively, 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 $315, $183,967, and $6,386 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 fund'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 $155,976,366 $167,204,732
------------- ------------
The cost and unrealized appreciation and depreciation in the value of the
investments owned by the fund, as computed on a federal income tax basis,
are as follows:
Aggregate cost $253,750,566
------------
Gross unrealized depreciation $ (4,007,905)
Gross unrealized appreciation 147,492
------------
Net unrealized depreciation $ (3,860,413)
============
(5) Shares of Beneficial Interest
The fund's Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest. Transactions in
fund 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 12,536,884 $ 101,730,701 68,927,254 $ 571,835,483
Shares issued to shareholders in
reinvestment of distributions 452,413 3,668,273 1,008,512 8,331,804
Shares reacquired (14,410,936) (116,859,033) (71,993,527) (596,900,414)
------------- ------------- ------------- -------------
Net decrease (1,421,639) $ (11,460,059) (2,057,761) $ (16,733,127)
============= ============= ============= =============
<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 1,211,026 $ 9,796,591 8,244,956 $ 68,164,379
Shares issued to shareholders in
reinvestment of distributions 128,573 1,039,503 273,442 2,251,472
Shares reacquired (3,262,605) (26,399,000) (7,912,639) (65,328,326)
------------- ------------- ------------- -------------
Net increase (decrease) (1,923,006) $ (15,562,906) 605,759 $ 5,087,525
============= ============= ============= =============
<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 1,161,563 $ 9,373,600 3,464,170 $ 28,624,872
Shares issued to shareholders in
reinvestment of distributions 44,878 361,834 115,275 946,936
Shares reacquired (1,721,766) (13,890,842) (3,557,870) (29,205,369)
------------- ------------- ------------- -------------
Net increase (decrease) (515,325) $ (4,155,408) 21,575 $ 366,439
============= ============= ============= =============
<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
-- $ -- 3,962 $ 32,910
Shares issued to shareholders in
reinvestment of distributions 1 19 1,292 10,654
Shares reacquired -- -- (27,322) (222,165)
------------- ------------- ------------- -------------
Net increase (decrease) 1 $ 19 (22,068) $ (178,601)
============= ============= ============= =============
</TABLE>
(6) Line of Credit
The fund 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 fund for the six months ended June
30, 2000, was $709. The fund had no borrowings during the period.
<PAGE>
MFS(R) GOVERNMENT LIMITED MATURITY FUND
<TABLE>
<S> <C>
TRUSTEES ASSISTANT TREASURERS
Marshall N. Cohan+ - Private Investor Mark E. Bradley*
Ellen Moynihan*
Lawrence H. Cohn, M.D.+ - Chief of
Cardiac Surgery, Brigham and Women's SECRETARY
Hospital; Professor of Surgery, Stephen E. Cavan*
Harvard Medical School
ASSISTANT SECRETARY
The Hon. Sir J. David Gibbons, KBE+ - James R. Bordewick, Jr.*
Chief Executive Officer, Edmund
Gibbons Ltd.; Chairman, Colonial CUSTODIAN
Insurance Company, Ltd. State Street Bank and Trust Company
Abby M. O'Neill+ - Private Investor INVESTOR INFORMATION
For information on MFS mutual funds,
Walter E. Robb, III+ - President and call your investment professional or,
Treasurer, Benchmark Advisors, Inc. for an information kit, call toll
(corporate financial consultants); free: 1-800-637-2929 any business day
President, Benchmark Consulting Group, from 9 a.m. to 5 p.m. Eastern time (or
Inc. (office services) leave a message anytime).
Arnold D. Scott* - Senior Executive INVESTOR SERVICE
Vice President, Director, and Secretary, MFS Service Center, Inc.
MFS Investment Management P.O. Box 2281
Boston, MA 02107-9906
Jeffrey L. Shames* - Chairman and Chief
Executive Officer, MFS Investment For general information, call toll free:
Management 1-800-225-2606 any business day from
8 a.m. to 8 p.m. Eastern time.
J. Dale Sherratt - President, Insight
Resources, Inc. (acquisition planning For service to speech- or
specialists) hearing-impaired, call toll free:
1-800-637-6576 any business day from 9
Ward Smith - Former Chairman (until a.m. to 5 p.m. Eastern time. (To use
1994), NACCO Industries (holding this service, your phone must be
company) equipped with a Telecommunications
Device for the Deaf.)
INVESTMENT ADVISER
Massachusetts Financial Services Company For share prices, account balances,
500 Boylston Street exchanges, or stock and bond outlooks,
Boston, MA 02116-3741 call toll free: 1-800-MFS-TALK
(1-800-637-8255) anytime from a
DISTRIBUTOR touch-tone telephone.
MFS Fund Distributors, Inc.
500 Boylston Street WORLD WIDE WEB
Boston, MA 02116-3741 www.mfs.com
CHAIRMAN AND PRESIDENT
Jeffrey L. Shames*
PORTFOLIO MANAGER
D. Richard Smith*
TREASURER
James O. Yost*
+Independent Trustee
*MFS Investment Management
</TABLE>
<PAGE>
MFS(R) GOVERNMENT ------------
LIMITED MATURITY FUND 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
MGL-3 8/00 19M 28/228/328/828
