<PAGE>
MFS MANAGED SECTORS FUND
(A SERIES OF MFS SERIES TRUST I)
500 BOYLSTON STREET o BOSTON o MASSACHUSETTS 02116-3741
617 o 954-5000
October 24, 1995
VIA EDGAR
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, DC 20549
Re: MFS Series Trust I (File No. 811-4777), on Behalf of
MFS Managed Sectors Fund
Ladies and Gentlemen:
Pursuant to the requirements of Section 30(b) of the Investment Company Act
of 1940 and Rule 30b2-1 thereunder, we hereby file a copy of the Annual Report
to Shareholders dated August 31, 1995 of MFS Managed Sectors Fund.
Very truly yours,
LORRAINE K. GRIP
Lorraine K. Grip
Production Editor
LKG/kha
Annual Report for
Year Ended
August 31, 1995
[Logo] MFS [SM]
THE FIRST NAME IN MUTUAL FUNDS
MFS (R) Managed Sectors Fund
[A photo of a keyboard.]
<PAGE>
MFS (R) MANAGED SECTORS FUND
TRUSTEES
A. Keith Brodkin* - Chairman and President
Richard B. Bailey* - Private Investor;
Former Chairman and Director (until 1991),
Massachusetts Financial Services Company
Marshall N. Cohan - Private Investor
Lawrence H. Cohn, M.D. - Chief of Cardiac
Surgery, Brigham and Women's Hospital;
Professor of Surgery, Harvard Medical School
The Hon. Sir J. David Gibbons, KBE - Chief
Executive Officer, Edmund Gibbons Ltd.;
Chairman, Bank of N.T. Butterfield & Son Ltd.
Abby M. O'Neill - Private Investor;
Director, Rockefeller Financial Services, Inc.
(Investment Advisers)
Walter E. Robb, III - President and Treasurer,
Benchmark Advisors, Inc.
(Corporate Financial Consultants)
Arnold D. Scott* - Senior Executive Vice
President and Secretary, Massachusetts
Financial Services Company
Jeffrey L. Shames* - President, Massachusetts
Financial Services Company
J. Dale Sherratt - President, Insight
Resources, Inc. (Acquisition Planning
Specialists)
Ward Smith - Former Chairman (until 1994),
NACCO Industries; Director, Sundstrand
Corporation
INVESTMENT ADVISER
Massachusetts Financial Services Company
500 Boylston Street
Boston, MA 02116-3741
DISTRIBUTOR
MFS Fund Distributors, Inc.
500 Boylston Street
Boston, MA 02116-3741
PORTFOLIO MANAGER
Kenneth J. Enright*
TREASURER
W. Thomas London*
ASSISTANT TREASURER
James O. Yost*
SECRETARY
Stephen E. Cavan*
ASSISTANT SECRETARY
James R. Bordewick, Jr.*
CUSTODIAN
State Street Bank and Trust Company
AUDITORS
Deloitte & Touche LLP
INVESTOR INFORMATION
For MFS stock and bond market outlooks, call
toll free: 1-800-637-4458 anytime from a
touch-tone telephone.
For information on MFS mutual funds, call
your financial adviser or, for an information
kit, call toll free: 1-800-637-2929 any
business day from 9 a.m. to 5 p.m. Eastern
time (or leave a message anytime).
INVESTOR SERVICE
MFS Service Center, Inc.
P.O. Box 2281
Boston, MA 02107-9906
For general information, call toll free:
1-800-225-2606 any business day from
8 a.m. to 8 p.m. Eastern time.
For service to speech- or hearing-impaired,
call toll free: 1-800-637-6576 any business
day from 9 a.m. to 5 p.m. Eastern time.
(To use this service, your phone must be
equipped with a Telecommunications Device for
the Deaf.)
For share prices, account balances and
exchanges, call toll free: 1-800-MFS-TALK
(1-800-637-8255) anytime from a touch-tone
telephone.
*Affiliated with the Investment Adviser
<PAGE>
LETTER TO SHAREHOLDERS
Dear Shareholders:
During the six months ended August 31, 1995, the stock market advanced strongly
as investors reacted positively to the Federal Reserve Board's apparent success
in engineering a "soft landing" of the domestic economy through a more
restrictive monetary policy. The result of the credit tightening in 1994 and
early 1995 has been a slowdown in economic activity, marked by lower interest
rates and low inflation, with continued positive growth. All of these are
favorable attributes for stocks and investors responded accordingly, pushing all
of the major stock market indices decidedly higher year to date. The breadth of
the markets' upward move has been fairly broad, with particular strength
exhibited in the technology, financial services, health care and transportation
industries. Consensus expectations have recently shifted towards a modest pickup
in economic activity, with stable to slightly higher interest rates and
inflation.
For the 12 months ended August 31, 1995, the stock market, as measured by
the Standard & Poor's 500 Composite Index (a popular, unmanaged index of common
stock performance) returned +21.42%. During this same period, Class A shares of
the Fund provided a total return of +26.12%, while Class B shares had a total
return of +25.19%. Both of these returns assume the reinvestment of
distributions but exclude the effects of any sales charges.
Economic Outlook
Moderate, but sustainable growth appears to be the hallmark of the economic
expansion's fifth year. After slowing earlier in the summer, consumer spending
and homebuying were showing renewed strength by August 31, while businesses
continued to work off excess inventories and reduce factory output. Meanwhile,
overseas economies, particularly those of Germany and Japan, have not recovered
as expected, limiting U.S. export growth. However, we believe the Federal
Reserve's consistent and, so far, successful efforts to fight inflation seem to
be giving consumers and businesses enough confidence to help maintain 2 1/2% to
3% real (adjusted for inflation) growth in gross domestic product, at least
through 1995.
Stock Market
After several months of very strong performance in 1995, the stock market became
somewhat volatile in the last few weeks before August 31 as concerns about
interest rates had a negative effect on stock prices. At the same time, the
technology sector, which had been one of the best-performing sectors this year,
came under significant pressure this summer because of concerns that these
stocks had become overpriced relative to expected earnings. Still, the
longer-term outlook for technology and other growth sectors, such as leisure and
household products, remains favorable, as do the prospects for many
small-company stocks because of their growth potential relative to larger
1
<PAGE>
LETTER TO SHAREHOLDERS - continued
companies. Also, companies' increasing emphasis on cost containment, coupled
with their growing use of technology, have helped keep them competitive and
reasonably profitable. Finally, we have been watching with interest the recent
series of corporate mergers in such industries as banking, entertainment, health
care and consumer products. Unlike previous merger waves, which were often
intended to build conglomerates of loosely related or unrelated businesses, this
year's mergers of similar companies seem to be more rationally based on the goal
of helping the merged companies reduce costs and, in general, be more
competitive. Looking ahead, we believe these factors, along with a stabilizing
interest rate environment and a continuation of favorable earnings reports, will
help maintain the stock market's positive momentum.
Portfolio Performance and Strategy
The Fund's investments continue to be concentrated in four of the same sectors
outlined in our February 28, 1995 semiannual report: technology, leisure,
financial services and energy, although the composition of those holdings has
changed to some degree, as have the weightings. Specifically, our investments in
the energy, leisure and financial services sectors were reduced, while our
holdings in technology were increased modestly, primarily through market
appreciation. The consumer staples sector was eliminated, while retail stocks
became our fifth sector weighting. The retail industry, in general, continues to
be under pressure due to an excess number of stores, while the growth of
disposable consumer income remains modest. The Fund's focus is on the department
store segment, where cost savings driven by consolidation are helping make the
survivors stronger competitors in what will continue to be a difficult
environment. While retail stocks have been laggard performers, their current
valuations are attractive, in our opinion. The Fund has also added to holdings
with more economic sensitivity, such as General Motors, Boise Cascade, Champion
International, AGCO and Tyco International, due to our expectations that the
economy will pick up during the second half of 1995 and into 1996.
The Fund's strong performance during the past six months was aided by its
overweighting in technology (particularly in the media software and
semi-conductor areas), financial services companies (which have exhibited good
earnings growth in the benign interest rate environment, augmented by
expectations of further consolidation) and energy (where worldwide drilling
activity has been stimulated by higher oil prices).
The Fund remains non-diversified and concentrated in the sectors mentioned
above. We continue to search for attractively valued companies, but recognize
the fact that, given the strong market advance year to date, many sector
valuations appear to be approaching fair value, thus precipitating a slightly
more cautious outlook.
2
<PAGE>
LETTER TO SHAREHOLDERS - continued
As always, we will continue to scrutinize all of our holdings and are
confident that the current structure of the Fund is appropriate in the current
market environment.
We appreciate your support and welcome any questions or comments you may
have.
Respectfully,
[A photo of A. Keith Brodkin, [A photo of Kenneth J, Enright
Chairman and President.] Portfolio Manager.]
/s/ A. Keith Brodkin /s/ Kenneth J. Enright
A. Keith Brodkin Kenneth J. Enright
Chairman and President Portfolio Manager
September 12, 1995
OBJECTIVE AND POLICIES
The Fund's investment objective is to seek capital appreciation. Dividend
income, if any, is incidental to the Fund's objective. To achieve its objective,
the Fund varies the weighting of its portfolio among 13 equity sectors, which
include autos and housing, basic materials and consumer staples, defense and
aerospace, energy, financial services, foreign securities, health care,
industrial goods and services, leisure, retailing, technology, transportation
and utilities.
As much as 50% of the Fund's assets may be invested in one sector or in cash.
Generally, at least 90% of the Fund's assets will be invested in up to five of
the industry sectors or in cash.
3
<PAGE>
PORTFOLIO MANAGER PROFILE
Ken Enright has been a member of the MFS investment staff since 1986. A graduate
of Boston State College and of the Babson College Graduate School of Business
Administration, he began his career at MFS in the Research Department and was
named Assistant Vice President - Investments in 1987 and Vice President -
Investments in 1988. Mr. Enright became Portfolio Manager of MFS Managed Sectors
Fund in 1993.
<TABLE>
<CAPTION>
PORTFOLIO CONCENTRATION AS OF AUGUST 31, 1995
Percent of
Ten Largest Holdings Net Assets
================================================================================
<S> <C>
Telephone & Data Systems, Inc. 5.31
- --------------------------------------------------------------------------------
Harrah's Entertainment, Inc. 3.98
- --------------------------------------------------------------------------------
Rogers Communications, Inc. 3.78
- --------------------------------------------------------------------------------
Intel Corp. 3.64
- --------------------------------------------------------------------------------
Electronic Arts, Inc. 3.52
- --------------------------------------------------------------------------------
Occidental Petroleum Corp. 3.16
- --------------------------------------------------------------------------------
Spectrum Holobyte, Inc. 2.87
- --------------------------------------------------------------------------------
AGCO Corp. 2.57
- --------------------------------------------------------------------------------
Snyder Oil Corp. 2.54
- --------------------------------------------------------------------------------
Federated Department Stores, Inc. 2.50
- --------------------------------------------------------------------------------
</TABLE>
TAX FORM SUMMARY
In January 1996, shareholders will be mailed a Tax Form Summary reporting the
federal tax status of all distributions paid during the calendar year 1995.
FEDERAL INCOME TAX INFORMATION ON DISTRIBUTIONS
For the year ended August 31, 1995, the distributions from long-term capital
gains are $14,320,735.
PERFORMANCE
The information on the following page illustrates the historical performance of
MFS Managed Sectors Fund Class B shares in comparison to various market
indicators. Fund results in the graph do not reflect the deduction of any
contingent deferred sales charge (CDSC) since the CDSC is not applicable after a
six-year period. Benchmark comparisons are unmanaged and do not reflect any fees
or expenses. You cannot invest in an index. All results reflect the reinvestment
of all dividends and capital gains.
Class A shares were offered effective September 20, 1993. Information on Class A
share performance appears on the next page.
4
<PAGE>
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(For the Period from January 1, 1987 to August 31, 1995)
[Line graph representing the growth of a $10,000 investment for the period from
January 1, 1987 to August 31, 1995. The graph is scaled from $10,000 to $50,000
in $10,000 segments. The years marked are from 1987 to 1995. There are three
lines drawn to scale. One is a solid line representing MFS Managed Sectors Fund
(Class B), a second line of short dashes represents the S&P 500, and a third
line of long dashes represents the Consumer Price Index.]
MFS Managed Sectors Fund $33,505
S&P 500 $30,474
Consumer Price Index $13,834
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
Life of Class
through
1 Year 3 Years 5 Years 8/31/95
==================================================================================================================
<S> <C> <C> <C> <C>
MFS Managed Sectors Fund (Class A) including
5.75% sales charge +18.85% -- -- +11.46%*
- ------------------------------------------------------------------------------------------------------------------
MFS Managed Sectors Fund (Class A) at net
asset value +26.12% -- -- +14.91%*
- ------------------------------------------------------------------------------------------------------------------
MFS Managed Sectors Fund (Class B) with CDSC+ +21.20% +14.18% +16.70% +14.75%#
- ------------------------------------------------------------------------------------------------------------------
MFS Managed Sectors Fund (Class B) without CDSC +25.19% +14.94% +16.91% +14.75%#
- ------------------------------------------------------------------------------------------------------------------
Average specialty/miscellaneous fund +15.69% +17.39% +17.72% +13.18%**
- ------------------------------------------------------------------------------------------------------------------
Standard & Poor's 500 Composite Index +21.42% +13.83% +15.09% +13.72%**
- ------------------------------------------------------------------------------------------------------------------
Consumer Price Index++ +2.62% +2.76% +3.05% +3.82%**
- ------------------------------------------------------------------------------------------------------------------
<FN>
* For the period from the commencement of offering of Class A shares, September 20, 1993 to August 31, 1995.
# For the period from the commencement of offering of Class B shares, December 29, 1986 to August 31, 1995.
+ These returns reflect the applicable CDSC of 4%, 3% and 2% for the 1-, 3- and 5-year periods, respectively,
and 0% for the period commencing December 29, 1986.
** Benchmark comparisons begin on January 1, 1987.
++ The Consumer Price Index is a popular measure of change in prices.
</FN>
</TABLE>
In the above table, we have included the average annual total returns of all
specialty/miscellaneous funds (including the Fund) tracked by Lipper Analytical
Services, Inc. (an independent firm which reports mutual fund performance) for
the applicable time periods (26, 22, 20 and 18 funds for the 1-, 3- and 5-year
periods ended August 31, 1995, and for the period from January 1, 1987 through
August 31, 1995, respectively). Because these returns do not reflect any
applicable sales charges, we have also included the Fund's results at net asset
value (no sales charge) for comparison.
All results are historical and, therefore, are not an indication of future
results. The principal value and income return of an investment in a mutual fund
will vary with changes in market conditions, and shares, when redeemed, may be
worth more or less than their original cost.
5
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS - August 31, 1995
Common Stocks - 100.2%
================================================================================
Issuer Shares Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Energy - 12.8%
BJ Services Co.* 300,000 $ 7,500,000
Occidental Petroleum Corp. 550,000 11,962,500
Schlumberger Ltd. 62,000 3,999,000
Snyder Oil Corp. 731,000 9,594,375
Tidewater, Inc. 366,900 9,080,775
Weatherford International, Inc.* 477,100 6,261,937
-----------
$48,398,587
- --------------------------------------------------------------------------------
Financial Institutions - 9.5%
Advanta Corp. 135,000 $ 5,045,625
Equitable of Iowa Cos. 190,000 7,077,500
First Interstate Bancorp 46,200 4,412,100
Mellon Bank Corp. 122,700 5,812,913
Torchmark Corp. 135,000 5,400,000
Travelers, Inc. 169,400 8,131,200
-----------
$35,879,338
- --------------------------------------------------------------------------------
Leisure - 22.5%
Argosy Gaming Corp.* 390,000 $ 5,557,500
Brinker International, Inc.* 390,200 6,535,850
Harrah's Entertainment, Inc.* 472,000 15,045,000
Promus Hotel Corp.* 237,000 4,888,125
Rogers Communications, Inc. (Canada)* 1,397,500 14,312,249
Showboat, Inc. 260,000 5,980,000
Sky City Ltd. (New Zealand)* 250,000 3,454,718
Sydney Harbor Casino Ltd. (Australia)* 3,646,000 4,901,281
Telecom Italia S.p.A. (Italy) 4,275,000 4,276,972
Telephone & Data Systems, Inc. 490,000 20,090,000
-----------
$85,041,695
- --------------------------------------------------------------------------------
Retail - 9.6%
Circuit City Stores, Inc. 35,100 $ 1,210,950
Dayton-Hudson Corp. 100,000 7,312,500
Dillard Department Stores, Inc. 175,900 5,430,912
Federated Department Stores, Inc.* 350,000 9,450,000
Gap, Inc. 103,000 3,308,875
Nordstrom, Inc. 98,700 4,071,375
Wal-Mart Stores, Inc. 215,200 5,299,300
-----------
$36,083,912
- --------------------------------------------------------------------------------
Technology - 23.5%
ADT Ltd.* 500,000 $ 6,500,000
Cabletron Systems, Inc.* 75,000 3,965,625
EMC Corp.* 204,700 4,196,350
Electronic Arts, Inc.* 350,000 13,300,000
Intel Corp. 224,000 13,748,000
International Business Machines Corp. 40,000 4,135,000
LSI Logic Corp.* 96,800 4,767,400
Micron Technology, Inc. 60,000 4,612,500
Motorola, Inc. 55,000 4,111,250
National Semiconductor Corp.* 285,000 8,051,250
Nokia AB (Finland) 90,000 6,211,138
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS - continued
Common Stocks- continued
================================================================================
<S> <C> <C>
Issuer Shares Value
- --------------------------------------------------------------------------------
Technology - continued
Oracle Systems Corp.* 113,900 $ 4,570,238
Spectrum Holobyte, Inc.* 628,400 10,839,900
------------
$ 89,008,651
- --------------------------------------------------------------------------------
Other - 22.3%
AGCO Corp. 200,000 $ 9,725,000
Boise Cascade Corp. 160,000 6,860,000
Champion International Corp. 70,000 3,963,750
Colgate-Palmolive Co. 60,000 4,080,000
Consolidated Papers, Inc. 50,000 3,025,000
General Motors Corp. 175,000 8,225,000
Johnson & Johnson 70,000 4,830,000
Loral Corp. 75,000 4,106,250
Manor Care, Inc. 200,200 6,481,475
McDonnell Douglas Corp. 88,000 7,062,000
PepsiCo, Inc. 135,000 6,108,750
Tyco International Ltd. 150,000 8,868,750
United Healthcare Corp. 184,000 7,774,000
Western Waste Industries* 149,100 3,373,408
------------
$ 84,483,383
- --------------------------------------------------------------------------------
Total Common Stocks (Identified Cost, $312,689,301) $378,895,566
- --------------------------------------------------------------------------------
Short-Term Obligation - 0.1%
================================================================================
Principal Amount
(000 Omitted)
- --------------------------------------------------------------------------------
Ford Motor Credit Corp., due 9/01/95,
at Amortized Cost $ 235 $ 235,000
- --------------------------------------------------------------------------------
Total Investments (Identified Cost, $312,924,301) $379,130,566
Other Assets, Less Liabilities - (0.3)% (991,083)
================================================================================
Net Assets - 100.0% $378,139,483
- --------------------------------------------------------------------------------
<FN>
*Non-income producing security.
</FN>
</TABLE>
See notes to financial statements
7
<PAGE>
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Statement of Assets and Liabilities
================================================================================
August 31, 1995
- --------------------------------------------------------------------------------
<S> <C>
Assets:
Investments, at value (identified cost, $312,924,301) $ 379,130,566
Cash 5,153
Receivable for investments sold 4,238,214
Receivable for Fund shares sold 214,674
Dividends receivable 289,446
Other assets 4,251
-------------
Total assets $ 383,882,304
-------------
Liabilities:
Payable for investments purchased $ 5,189,353
Payable for Fund shares reacquired 151,715
Payable to affiliates -
Management fee 7,705
Shareholder servicing agent fee 1,921
Distribution fee 167,483
Accrued expenses and other liabilities 224,644
-------------
Total liabilities $ 5,742,821
-------------
Net assets $ 378,139,483
=============
Net assets consist of:
Paid-in capital $ 267,105,311
Unrealized appreciation on investments and translation
of assets and liabilities in foreign currencies 66,206,265
Accumulated undistributed net realized gain
on investments and foreign currency transactions 44,897,445
Accumulated net investment loss (69,538)
-------------
Total $ 378,139,483
=============
Shares of beneficial interest outstanding 24,395,528
=============
Class A shares:
Net asset value and redemption price per share
(net assets of $178,366,881/11,473,932 shares of
beneficial interest outstanding) $15.55
======
Offering price per share (100/94.25) $16.50
======
Class B shares:
Net asset value and offering price per share
(net assets of $199,772,602/12,921,596 shares of
beneficial interest outstanding) $15.46
======
</TABLE>
On sales of $50,000 or more, the offering price of Class A shares is reduced. A
contingent deferred sales charge may be imposed on redemptions of Class A and
Class B shares.
See notes to financial statements
8
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Statement of Operations
- --------------------------------------------------------------------------------
Year Ended August 31, 1995
- --------------------------------------------------------------------------------
<S> <C>
Net investment income:
Income -
Dividends $ 3,518,412
Interest 236,983
------------
Total investment income $ 3,755,395
------------
Expenses -
Management fee $ 2,505,884
Trustees' compensation 41,069
Shareholder servicing agent fee (Class A) 192,460
Shareholder servicing agent fee (Class B) 452,784
Distribution and service fee (Class A) 449,075
Distribution and service fee (Class B) 2,058,107
Custodian fee 140,537
Printing 77,171
Legal fees 71,578
Postage 56,521
Auditing fees 38,044
Miscellaneous 282,948
------------
Total expenses $ 6,366,178
------------
Net investment loss $ (2,610,783)
------------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions (including $9,767,521
gain from transactions in securities of
affiliated issuers) $ 52,139,807
Foreign currency transactions 108,098
------------
Net realized gain on investments and
foreign currency transactions $ 52,247,905
------------
Change in unrealized appreciation (depreciation) -
Investments $ 29,148,972
Translation of assets and liabilities in foreign
currencies (242)
------------
Net unrealized gain on investments $ 29,148,730
------------
Net realized and unrealized gain on
investments and foreign currency $ 81,396,635
------------
Increase in net assets from operations $ 78,785,852
============
</TABLE>
See notes to financial statements
9
<PAGE>
FINANCIAL STATEMENTS - continued
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
====================================================================================================================================
Year Ended Nine Months Ended Year Ended
August 31, 1995 August 31, 1994 November 30, 1993
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment loss $ (2,610,783) $ (1,895,340) $ (4,098,011)
Net realized gain on investments and
foreign currency transactions 52,247,905 21,025,189 71,272,683
Net unrealized gain (loss) on investments and
foreign currency translation 29,148,730 (3,397,459) (57,428,322)
------------- ------------- -------------
Increase in net assets from operations $ 78,785,852 $ 15,732,390 $ 9,746,350
------------- ------------- -------------
Distributions declared to shareholders -
From net realized gain on investments and
foreign currency transactions (Class A) $ (8,991,673) $ (25,297,254) $ --
From net realized gain on investments and
foreign currency transactions (Class B) (14,927,407) (41,826,829) (9,939,582)
------------- ------------- -------------
Total distributions declared to
shareholders $ (23,919,080) $ (67,124,083) $ (9,939,582)
------------- ------------- -------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 126,368,710 $ 33,660,185 $ 52,495,365
Issued in connection with the acquisition of
MFS Managed Sectors Fund -- -- 142,671,119
Net asset value of shares issued to shareholders
in reinvestment of distributions 21,847,531 59,894,378 8,938,772
Cost of shares reacquired (160,496,119) (75,771,270) (84,243,954)
------------- ------------- -------------
Increase (decrease) in net assets from
Fund share transactions $ (12,279,878) $ 17,783,293 $ 119,861,302
------------- ------------- -------------
Total increase (decrease) in net assets $ 42,586,894 $ (33,608,400) $ 119,668,070
Net assets:
At beginning of period 335,552,589 369,160,989 249,492,919
------------- ------------- -------------
At end of period (including accumulated
undistributed net investment income (loss)
of $(69,538), $(25,403), and $233,258,
respectively) $ 378,139,483 $ 335,552,589 $ 369,160,989
============= ============= =============
</TABLE>
See notes to financial statements
10
<PAGE>
FINANCIAL STATEMENTS - continued
Financial Highlights
<TABLE>
<CAPTION>
====================================================================================================================================
Nine
Year Ended Months Ended Period Ended Year Ended
August 31, August 31, November 30, August 31,
1995 1994 1993* 1995
- ------------------------------------------------------------------------------------------------------------------------------------
Class A Class B
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $ 13.41 $ 15.50 $ 15.68 $ 13.35
-------- -------- -------- --------
Income from investment operations # -
Net investment loss $ (0.05) $ (0.03) $ (0.02) $ (0.14)
Net realized and unrealized gain (loss) on
investments and foreign currency
transactions 3.22 0.77 (0.16) 3.20
-------- -------- -------- --------
Total from investment operations $ 3.17 $ 0.74 $ (0.18) $ 3.06
-------- -------- -------- --------
Less distributions declared to shareholders
from net realized gain on investments
and foreign currency transactions $ (1.03) $ (2.83) $ -- $ (0.95)
-------- -------- -------- --------
Net asset value - end of period $ 15.55 $ 13.41 $ 15.50 $ 15.46
-------- -------- -------- --------
Total return** 26.12% 5.12%++ (5.99)%+ 25.19%
Ratios (to average net assets)/Supplemental data:
Expenses 1.46% 1.52%+ 1.59%+ 2.18%
Net investment loss (0.34)% (0.26)%+ (0.75)%+ (1.06)%
Portfolio turnover 115% 76% 106% 115%
Net assets at end of period (000 omitted) $178,367 $121,498 $136,179 $199,773
<FN>
* For the period from the commencement of offering of Class A shares, September 20, 1993 to November 30, 1993.
+ Annualized.
++ Not annualized.
** 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.
# Per share data for the periods subsequent to November 30, 1993 are based on average shares outstanding.
</FN>
</TABLE>
See notes to financial statements
11
<PAGE>
FINANCIAL STATEMENTS - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
=================================================================================================================
Nine Months Ended Year Ended November 30,
August 31, -------------------------------------------
1994 1993 1992 1991
- -----------------------------------------------------------------------------------------------------------------
Class B
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $ 15.49 $ 15.42 $ 13.00 $ 9.23
-------- -------- -------- --------
Income from investment operations # -
Net investment loss $ (0.10) $ (0.25) $ (0.24) $ (0.12)
Net realized and unrealized gain on
investments and foreign currency
transactions 0.75 0.94 2.66 3.89
-------- -------- -------- --------
Total from investment operations $ 0.65 $ 0.69 $ 2.42 $ 3.77
-------- -------- -------- --------
Less distributions declared to shareholders
from net realized gain on investments
and foreign currency transactions $ (2.79) $ (0.62) $ -- $ --
-------- -------- -------- --------
Net asset value - end of period $ 13.35 $ 15.49 $ 15.42 $ 13.00
======== ======== ======== ========
Total return 4.47%++ 4.50% 18.62% 40.85%
Ratios (to average net assets)/Supplemental data:
Expenses 2.26%+ 2.21% 2.37% 2.44%
Net investment loss (1.01)%+ (1.55)% (1.85)% (1.00)%
Portfolio turnover 76% 106% 22% 59%
Net assets at end of period (000 omitted) $214,055 $232,982 $249,493 $190,232
</TABLE>
Financial Highlights - continued
<TABLE>
<CAPTION>
=================================================================================================================
Year Ended November 30,
-------------------------------------------------------------
1990 1989 1988 1987*
- -----------------------------------------------------------------------------------------------------------------
Class B
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $ 11.32 $ 7.86 $ 6.94 $ 6.50
-------- -------- -------- --------
Income from investment operations # -
Net investment income (loss) $ (0.03) $ 0.03 $ 0.09 $ 0.03
Net realized and unrealized gain (loss) on
investments and foreign currency
transactions (2.06) 3.51 0.89 0.42
-------- -------- -------- --------
Total from investment operations $ (2.09) $ 3.54 $ 0.98 $ 0.45
-------- -------- -------- --------
Less distributions declared to shareholders
from net investment income $ -- $ (0.08) $ (0.06) $ (0.01)
-------- -------- -------- --------
Net asset value - end of period $ 9.23 $ 11.32 $ 7.86 $ 6.94
======== ======== ======== ========
Total return (18.46)% 45.35% 14.06% 7.47%+
Ratios (to average net assets)/Supplemental data:
Expenses 2.50% 2.52% 2.31% 2.25%+
Net investment income (loss) (0.27)% 0.37% 1.08% 0.09%+
Portfolio turnover 79% 84% 146% 163%
Net assets at end of period (000 omitted) $152,132 $180,416 $137,311 $134,762
<FN>
* For the period from the commencement of investment operations, December 29, 1986 to November 30, 1987.
+ Annualized.
++ Not annualized.
# Per share data for the periods subsequent to November 30, 1993 are based on average shares outstanding.
</FN>
</TABLE>
See notes to financial statements
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(1) Business and Organization
MFS Managed Sectors Fund (the Fund) is a non-diversified series of MFS Series
Trust I (the Trust). The Trust is organized as a Massachusetts business trust
and is registered under the Investment Company Act of 1940, as amended, as an
open-end management investment company.
(2) Significant Accounting Policies
Investment Valuations - Equity securities listed on securities exchanges or
reported through the NASDAQ system are valued at last sale prices. Unlisted
equity securities or listed equity securities for which last sale prices are not
available are valued at last quoted bid prices. Short-term obligations, which
mature in 60 days or less, are valued at amortized cost, which approximates
market value. Securities for which there are no such quotations or valuations
are valued at fair value as determined in good faith by or at the direction of
the Trustees.
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 purchased 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 securities transferred to ensure that the value,
including accrued interest, of the securities under each repurchase agreement is
greater than amounts owed to the Fund under each such repurchase agreement.
Foreign Currency Translation - Investment valuations, other assets, and
liabilities initially expressed in foreign currencies are converted each
business day into U.S. dollars based upon current exchange rates. Purchases and
sales of foreign investments, income and expenses are converted into U.S.
dollars based upon currency exchange rates prevailing on the respective dates of
such transactions. Gains and losses attributable to foreign currency exchange
rates on sales of securities are recorded for financial statement purposes as
net realized gains and losses on investments. Gains and losses attributable to
foreign exchange rate movements on income and expenses are recorded for
financial statement purposes as foreign currency transaction gains and losses.
That portion of both realized and unrealized gains and losses on investments
that results from fluctuations in foreign currency exchange rates is not
separately disclosed.
Investment Transactions and Income - Investment transactions are recorded on the
trade date. Interest income is recorded on the accrual basis. All premium and
original issue discount are amortized or accreted for financial statement and
tax reporting purposes as required by federal income tax regulations. Dividend
income is recorded on the ex-dividend date for dividends received in cash.
Dividend and interest payments received in additional securities are recorded on
the ex-dividend or ex-interest date in an amount equal to the value of the
security on such date.
13
<PAGE>
NOTES TO FINANCIAL STATEMENTS - continued
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. The Fund files a tax
return annually using tax accounting methods required under provisions of the
Code which may differ from generally accepted accounting principles, the basis
on which these financial statements are prepared. Accordingly, the amount of net
investment income and net realized gain reported on these financial statements
may differ from that reported on the Fund's tax return and, consequently, the
character of distributions to shareholders reported in the financial highlights
may differ from that reported to shareholders on Form 1099-DIV. Foreign taxes
have been provided for on interest and dividend income earned on foreign
investments in accordance with the applicable country's tax rates and to the
extent unrecoverable are recorded as a reduction of investment income.
Distributions to shareholders are recorded on the ex-dividend date.
The Fund distinguishes between distributions on a tax basis and a financial
reporting basis and requires that only distributions in excess of tax basis
earnings and profits are reported in the financial statements as a return of
capital. Differences in the recognition or classification of income between the
financial statements and tax earnings and profits which result in temporary
over-distributions for financial statement purposes, are classified as
distributions in excess of net investment income or accumulated net realized
gains. During the year ended August 31, 1995, $2,566,648 was reclassified from
accumulated net investment loss to accumulated net realized gain on investments,
due to differences between book and tax accounting for currency transactions and
the offset of short-term capital gains against accumulated net investment loss.
This change had no effect on the net assets or net asset value per share.
Multiple Classes of Shares of Beneficial Interest - The Fund offers both Class A
and Class B shares. The two classes of shares differ in their respective
shareholder servicing agent, distribution and service fees. All shareholders
bear the common expenses of the Fund pro rata based on the average daily net
assets of each class, without distinction between share classes. Dividends are
declared separately for each class. No class has preferential dividend rights;
differences in per share dividend rates are generally due to differences in
separate class expenses.
(3) Transactions with Affiliates
Investment Adviser - The Fund has an investment advisory agreement with
Massachusetts Financial Services Company (MFS) to provide overall investment
advisory and administrative services, and general office facilities. The
management fee is computed daily and paid monthly at an annual rate of 0.75% of
average daily net assets. The Fund pays no compensation directly to its Trustees
who are officers of the investment adviser, or to officers of the Fund, all of
whom receive remuneration for their services to the Fund from MFS. Certain of
the officers and Trustees of the Fund are officers or directors of MFS, MFS Fund
Distributors, Inc. (MFD) and MFS Service Center, Inc. (MFSC). The Fund has an
unfunded defined benefit plan for all of its independent Trustees and Mr.
Bailey.
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS - continued
Included in Trustees' compensation is a net periodic pension expense of $11,495
for the year ended August 31, 1995.
Distributor - MFD, a wholly owned subsidiary of MFS, as distributor, received
$16,545 for the year ended August 31, 1995, as its portion of the sales charge
on sales of Class A shares of the Fund.
The Trustees have adopted separate distribution plans for Class A and Class B
shares pursuant to Rule 12b-1 of the Investment Company Act of 1940 as follows:
The Class A distribution plan provides that the Fund will pay MFD up to 0.35%
per annum of its average daily net assets attributable to Class A shares in
order that MFD may pay expenses on behalf of the Fund related to the
distribution and servicing of its shares. These expenses include a service fee
to each securities dealer that enters into a sales agreement with MFD of up to
0.25% per annum of the Fund's average daily net assets attributable to Class A
shares which are attributable to that securities dealer, a distribution fee to
MFD of up to 0.10% per annum of the Fund's average daily net assets attributable
to Class A shares, commissions to dealers and payments to MFD wholesalers for
sales at or above a certain dollar level, and other such distribution-related
expenses that are approved by the Fund. MFD retains the service fee for accounts
not attributable to a securities dealer which amounted to $53,341 for the year
ended August 31, 1995. Fees incurred under the distribution plan during the year
ended August 31, 1995 were 0.35% of average daily net assets attributable to
Class A shares on an annualized basis.
The Class B distribution plan provides that the Fund will pay MFD a distribution
fee of 0.75% per annum, and a service fee of up to 0.25% per annum, of the
Fund's average daily net assets attributable to Class B shares. MFD will pay to
securities dealers that enter into a sales agreement with MFD all or a portion
of the service fee attributable to Class B shares. The service fee is intended
to be additional consideration for services rendered by the dealer with respect
to Class B shares. MFD retains the service fee for accounts not attributable to
a securities dealer, which amounted to $66,557 for the year ended August 31,
1995. Fees incurred under the distribution plan during the year ended August 31,
1995 were 1.00% of average daily net assets attributable to Class B shares on an
annualized basis.
A contingent deferred sales charge is imposed on shareholder redemptions of
Class A shares, on purchases of $1 million or more, in the event of a
shareholder redemption within 12 months following the share purchase. A
contingent deferred sales charge is imposed on shareholder redemptions of Class
B shares in the event of a shareholder redemption within six years of purchase.
MFD receives all contingent deferred sales charges. Contingent deferred sales
charges imposed during the year ended August 31, 1995 were $175,565 for Class B
shares.
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 average daily net assets of each class of shares at an effective
annual rate of up to 0.15% and up to 0.22% attributable to Class A and Class B
shares, respectively.
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS - continued
(4) Portfolio Securities
Purchases and sales of investments, other than U.S. government securities,
purchased option transactions and short-term obligations, aggregated
$383,303,967 and $416,468,370, respectively.
The cost and unrealized appreciation or depreciation in value of the investments
owned by the Fund, as computed on a federal income tax basis, are as follows:
Aggregate cost $313,265,190
============
Gross unrealized appreciation $ 74,036,428
Gross unrealized depreciation 8,171,052
------------
Net unrealized appreciation $ 65,865,376
============
(5) Shares of Beneficial Interest
The Fund's Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest (without par value).
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
Class A Shares Year Ended Nine Months Ended Period Ended
August 31, 1995 August 31, 1994 November 30, 1993*
-------------------- -------------------- --------------------
Shares Amount Shares Amount Shares Amount
===============================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Shares sold 3,546,423 $50,859,620 723,889 $10,294,043 120,486 $ 1,946,843
Shares issued in
connection with
the acquisition of
MFS Managed
Sectors Fund -- -- -- -- 9,100,413 142,671,119
Shares issued to
shareholders in
reinvestment of
distributions 694,041 8,168,939 1,680,518 22,115,635 -- --
Shares reacquired (1,829,247) (24,588,500) (2,124,598) (28,117,869) (437,993) (6,986,200)
---------- ----------- ---------- ----------- --------- ------------
Net increase 2,411,217 $34,440,059 279,809 $ 4,291,809 8,782,906 $137,631,762
========== =========== ========== =========== ========= ============
<FN>
* For the period from the commencement of offering of Class A shares, September 20, 1993 to November 30, 1993.
</FN>
</TABLE>
<TABLE>
<CAPTION>
Class B Shares Year Ended Nine Months Ended Year Ended
August 31, 1995 August 31, 1994 November 30, 1993
-------------------- -------------------- --------------------
Shares Amount Shares Amount Shares Amount
===============================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Shares sold 5,728,388 $75,509,090 1,769,946 $23,366,142 3,337,222 $ 50,548,522
Shares issued to
shareholders in
reinvestment of
distributions 1,162,148 13,678,592 2,868,472 37,778,743 584,152 8,938,772
Shares reacquired (10,002,205) (135,907,619) (3,645,250) (47,653,401) (5,063,674) (77,257,754)
----------- ------------ ---------- ----------- ---------- ------------
Net increase
(decrease) (3,111,669) $(46,719,937) 993,168 $13,491,484 (1,142,300) $(17,770,460)
=========== ============ ========== =========== ========== ============
</TABLE>
16
<PAGE>
NOTES TO FINANCIAL STATEMENTS - continued
(6) Line of Credit
The Fund entered into an agreement which enables it to participate with other
funds managed by MFS in an unsecured line of credit with a bank which permits
borrowings up to $350 million, collectively. Borrowings may be made to
temporarily finance the repurchase of Fund shares. Interest is charged to each
fund, based on its borrowings, at a rate equal to the bank's base rate. In
addition, a commitment fee, based on the average daily unused portion of the
line of credit, is allocated among the participating funds at the end of each
quarter. The commitment fee allocated to the Fund for the year ended August 31,
1995 was $3,247.
(7) Transactions in Securities of Affiliated Issuers
Affiliated issuers, as defined under the Investment Company Act of 1940, are
those in which the Fund's holdings of an issuer represent 5% or more of the
outstanding voting securities of the issuer. A summary of the Fund's
transactions in the securities of these issuers during the year ended August 31,
1995 is set forth below.
<TABLE>
<CAPTION>
Additions Dispositions
--------- ------------ Interest
Beginning Ending Realized and
Share/Par Share/Par Share/Par Share/Par Gain Dividend Ending
Affiliate Amount Amount Cost Amount Cost Amount (Loss) Income Value
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Sierra On-Line, Inc. 401,900 150,600 $811,181 552,500 $8,724,244 -- $9,767,521 -- --
</TABLE>
(8) Acquisitions
At close of business on September 20, 1993, the Fund acquired all of the assets
and liabilities of MFS Managed Sectors Fund (MMS). The acquisition was
accomplished by a tax-free exchange of 9,100,413 Class A shares of the Fund
(valued at $142,671,119) for the 10,372,042 shares of MMS. MMS's net assets on
that date ($142,671,119), including $23,513,889 of unrealized appreciation, were
combined with those of the Fund. The aggregate net assets of the Fund after the
acquisition were $397,298,434.
17
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Trustees of MFS Series Trust I and Shareholders of
MFS Managed Sectors Fund:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of MFS Managed Sectors Fund as of August 31, 1995,
the related statement of operations for the year then ended, the statement of
changes in net assets for the year then ended, the nine months ended August 31,
1994, and the year ended November 30, 1993, and the financial highlights for the
year ended August 31, 1995, the nine months ended August 31, 1994, and each of
the years ended in the seven-year period ended November 30, 1993. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of the securities owned at
August 31, 1995 by correspondence with the custodian and brokers; where replies
were not received from brokers, we performed other auditing procedures. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of MFS Managed Sectors
Fund at August 31, 1995, the results of its operations, the changes in its net
assets, and its financial highlights for the respective stated periods in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
October 6, 1995
------------------------------------------------------------
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.
18
<PAGE>
IT'S EASY TO CONTACT US
MFS AUTOMATED INFORMATION
ACCOUNT INFORMATION:
Call 1-800-MFS-TALK (1-800-637-8255)
anytime.
MARKET OUTLOOK:
Call 1-800-637-4458 any time for the MFS outlook
on the bond and stock markets.
MFS PERSONAL SERVICE
ACCOUNT SERVICE:
Call 1-800-225-2606 any business day
from 8 a.m. to 8 p.m. Eastern time.
PRODUCT INFORMATION:
Call 1-800-637-2929 any business day
from 9 a.m. to 5 p.m. Eastern time.
IRA SERVICE:
Call 1-800-637-1255 any business day
from 8 a.m. to 6 p.m. Eastern time.
SERVICE FOR THE HEARING-IMPAIRED:
Call 1-800-637-6576 any business day
from 9 a.m. to 5 p.m. Eastern time (TDD required).
MFS MAILING ADDRESSES
FOR PERSONAL ACCOUNTS:
MFS Service Center, Inc.
P.O. Box 2281
Boston, MA 02107-9906
FOR IRA ACCOUNTS:
MFS Service Center, Inc.
J.W. McCormack Station
P.O. Box 4501
Boston, MA 02101-9817
19
<PAGE>
MFS INVESTMENT OPPORTUNITIES
MUTUAL FUNDS
The MFS Family of Funds, shown on the facing page, falls into the eight general
categories below. All offer full-time professional management, a diversified
portfolio, and a wide array of shareholder services.
STOCK FUNDS seek growth of capital rather than income through investments in
stocks.
STOCK AND BOND FUNDS seek current income and growth of capital through
investments in both stocks and bonds.
BOND FUNDS seek current income through investments in debt securities.
WORLD FUNDS seek stock, balanced, and bond fund objectives through investments
in U.S. and foreign stocks and bonds.
LIMITED-MATURITY FUNDS seek current income and preservation of capital through
investments in debt securities with
remaining maturities of five years or less.
NATIONAL TAX-FREE BOND FUNDS seek current income exempt from federal income tax
through investments in debt securities issued by states and municipalities.[1]
STATE TAX-FREE BOND FUNDS seek current income exempt from federal and state
income taxes through investments in debt securities issued by a single state and
its municipalities.[1]
MONEY MARKET FUNDS seek preservation of capital and current income through
investments in short-term debt securities.[2]
To determine which MFS fund may be appropriate for you, please contact your
financial adviser, who can help you relate these investment opportunities to
your financial goals. If you prefer, you may call MFS Investor Information for
literature [3] on MFS products and services: 1-800-637-2929, from 9 a.m. to 5
p.m. Eastern time any business day (leave a message anytime).
[1] A small portion of the income may be subject to federal, state and/or
alternative minimum tax.
[2] Investments in money market funds are not issued or guaranteed by the U.S.
government and there is no assurance that the fund will be able to maintain a
stable net asset value.
[3] Including a prospectus containing more complete information including
charges and expenses. Read the prospectus carefully before investing.
<PAGE>
THE MFS FAMILY OF FUNDS [R]
America's Oldest Mutual Fund Group
The members of the MFS Family of Funds are grouped below according to the types
of securities in their portfolios. For free prospectuses containing more
complete information, including the exchange privilege and all charges and
expenses, please contact your financial adviser or call MFS at 1-800-637-2929
any business day from 9 a.m. to 5 p.m. Eastern time (or, leave a message any
time). This material should be read carefully before investing or sending money.
STOCK
================================================================================
Massachusetts Investors Trust
- --------------------------------------------------------------------------------
Massachusetts Investors Growth Stock Fund
- --------------------------------------------------------------------------------
MFS [R] Capital Growth Fund
- --------------------------------------------------------------------------------
MFS [R] Emerging Growth Fund
- --------------------------------------------------------------------------------
MFS [R] Gold & Natural Resources Fund
- --------------------------------------------------------------------------------
MFS [R] Growth Opportunities Fund
- --------------------------------------------------------------------------------
MFS [R] Managed Sectors Fund
- --------------------------------------------------------------------------------
MFS [R] OTC Fund
- --------------------------------------------------------------------------------
MFS [R] Research Fund
- --------------------------------------------------------------------------------
MFS [R] Value Fund
STOCK AND BOND
================================================================================
MFS [R] Total Return Fund
- --------------------------------------------------------------------------------
MFS [R] Utilities Fund
- --------------------------------------------------------------------------------
BOND
================================================================================
MFS [R] Bond Fund
- --------------------------------------------------------------------------------
MFS [R] Government Mortgage Fund
- --------------------------------------------------------------------------------
MFS [R] Government Securities Fund
- --------------------------------------------------------------------------------
MFS [R] High Income Fund
- --------------------------------------------------------------------------------
MFS [R] Intermediate Income Fund
- --------------------------------------------------------------------------------
MFS [R] Strategic Income Fund
(formerly MFS [R] Income & Opportunity Fund)
- --------------------------------------------------------------------------------
LIMITED MATURITY BOND
================================================================================
MFS [R] Government Limited Maturity Fund
- --------------------------------------------------------------------------------
MFS [R] Limited Maturity Fund
- --------------------------------------------------------------------------------
MFS [R] Municipal Limited Maturity Fund
- --------------------------------------------------------------------------------
WORLD
================================================================================
MFS [R] World Asset Allocation Fund
- --------------------------------------------------------------------------------
MFS [R] World Equity Fund
- --------------------------------------------------------------------------------
MFS [R] World Governments Fund
- --------------------------------------------------------------------------------
MFS [R] World Growth Fund
- --------------------------------------------------------------------------------
MFS [R] World Total Return Fund
- --------------------------------------------------------------------------------
NATIONAL TAX-FREE BOND
================================================================================
MFS [R] Municipal Bond Fund
- --------------------------------------------------------------------------------
MFS [R] Municipal High Income Fund
(closed to new investors)
- --------------------------------------------------------------------------------
MFS [R] Municipal Income Fund
- --------------------------------------------------------------------------------
STATE TAX-FREE BOND
================================================================================
Alabama, Arkansas, California, Florida, Georgia, Louisiana, Maryland,
Massachusetts, Mississippi, New York, North Carolina, Pennsylvania, South
Carolina, Tennessee, Texas, Virginia, Washington, West Virginia
- --------------------------------------------------------------------------------
MONEY MARKET
================================================================================
MFS [R] Cash Reserve Fund
- --------------------------------------------------------------------------------
MFS [R] Government Money Market Fund
- --------------------------------------------------------------------------------
MFS [R] Money Market Fund
- --------------------------------------------------------------------------------
<PAGE>
MFS [R] MANAGED Bulk Rate
SECTORS FUND U.S. Postage
P A I D
500 Boylston Street Permit #55638
Boston, MA 02116 Boston, MA
[LOGO]
MMS-2 10/95/48M 8/208
