Table of Contents
Letter from the Chairman ..................... 1
A Discussion with the Fund Manager .......... 3
Fund Manager's Profile ...................... 6
Performance Summary ......................... 7
Fund Facts .................................. 8
Portfolio Concentration ..................... 9
Portfolio of Investments .................... 10
Financial Statements ........................ 12
Notes to Financial Statements ............... 18
Independent Auditors' Report ................ 23
The MFS Family of Funds ..................... 24
Trustees and Officers ....................... 25
Highlights
[bullet] While the Fund's technology holdings hindered performance during the
last quarter of 1995 and the first quarter of 1996, this was partly
offset by good performance in the Fund's holdings in energy, financial
services, and leisure.
[bullet] The Fund's concentration in health care and technology was increased,
while weightings in the financial services and retail sectors were
reduced.
[bullet] The Fund has sought companies that we expect to increase earnings
through cost cutting, greater productivity, increased market share, and
better balance sheet management.
<PAGE>
Letter from the Chairman
[Photo: A. Keith Brodkin]
Dear Shareholders:
With over half of 1996 behind us, the U.S. economy appears to have settled
into a pattern of fairly reasonable growth and moderate inflation -- two
factors that we think can be important contributors to a favorable long-term
investment climate. During the first quarter of 1996, real
(inflation-adjusted) economic growth was 2.3% on an annualized basis,
followed by a rate of 4.7% in the second quarter. Real growth in gross
domestic product has exceeded our expectations so far this year, and we now
expect that growth for all of 1996 could accelerate slightly and exceed 2.5%.
Although the individual consumer appears to be carrying an excessive debt
load, the consumer sector itself, which represents two-thirds of the economy,
continues to be impressive as the automobile and housing markets remain
resilient. Consumer spending has also been positively impacted by widespread
job growth. However, the economies of Europe and Japan continue to be in the
doldrums, weakening U.S. exports while subduing the capital spending plans of
American corporations.
While we do not expect the U.S. stock market to match the extraordinary
performance of 1995, we continue to be positive about the equity market this
year. Although we believe the equity market represents fair value at current
levels, the expected slowdown in the growth of corporate earnings and the
increases in interest rates experienced so far this year have raised some
near-term concerns, as was seen in July's stock market correction. Further
increases in interest rates, and an acceleration of inflation coupled with an
additional slowdown in corporate earnings growth, could have a negative
effect on the stock market. However, to the extent that some earnings
disappointments are taken as a sign that the economy is not overheating, this
may prove beneficial for the longer-term health of the equity market. We
continue to believe that many of the technology-driven productivity gains
that U.S. companies have made in recent years will continue to enhance
corporate America's competitiveness and profitability. Therefore, while we
have some near-term concerns, we remain quite constructive on the long-term
viability of the equity market.
Finally, you may notice, this report to shareholders incorporates a number of
changes which we hope you will find informative and useful. Following the
Discussion with the Fund Manager, we have added new information on the
1
<PAGE>
Letter from the Chairman - continued
Fund's holdings, including charts illustrating the portfolio's concentration
in the different investments that meet its criteria. Near the back of the
report is a list of phone numbers and addresses, in case you need to contact
MFS.
We appreciate your support and welcome any questions or comments you may
have.
Respectfully,
/s/ A. Keith Brodkin
A. Keith Brodkin
Chairman and President
September 20, 1996
2
<PAGE>
A Discussion with the Fund Manager
[Photo: Kenneth J. Enright]
For the 12 months ended August 31, 1996, the Fund's Class A shares provided a
total return of 3.92%, while Class B shares returned 3.17%. These returns,
which assume the reinvestment of distributions but exclude the effects of any
sales charges, compare to an 18.72% return for the unmanaged Standard &
Poor's 500 Composite Index (the S&P 500), a popular, unmanaged index of
common stock performance.
Q. What do you think were some of the things that affected performance, Ken?
A. Consistent with the Fund's charter to be non-diversified, the Fund was
overweighted in a number of industries, particularly technology. For most of
calendar year 1995, this helped overall performance, but hindered results in
the last quarter of that year and the first quarter of 1996. In addition,
weakness in the Fund's gaming positions and continued softness in stocks of
health maintenance organizations, recent additions to the Fund, have also
hurt results. Also, many of the sectors in which the Fund invested are in the
NASDAQ industrials and that index lagged the S&P 500 by over 10% over the
past year. This has been offset to some degree by good performance in the
Fund's energy holdings as well as strong individual performance in names such
as First Interstate, Freddie Mac, Intel, BMC Software, Promus Hotels, Tyco
International, and ADT Ltd.
Q. How would you describe the business and economic environment you faced
over the past 12 months, particularly as it relates to the sectors in the
Fund?
A. Generally, the backdrop for financial assets remains, as it has for the
past 18 months, quite constructive, with modest economic growth, a fairly
benign inflation environment, and the continued potential for fiscal
discipline in Washington. All this did not go unnoticed by investors as the
market surged in 1995, although additional gains in 1996 have been harder to
achieve. For most of this year, the breadth of the market has been decidedly
narrower, which has led to increased volatility. Investors have been reacting
aggressively to news on the economic data front and earnings reports. Given
the sector orientation of the Fund, this type of action increases short-term
volatility as the market rotates among industry sectors, with individual
groups having price changes ranging from 10% to 20% in either direction while
the overall market makes little headway.
3
<PAGE>
A Discussion with the Fund Manager -- continued
Q. The Fund normally focuses on five sectors at a time. Which ones are you
emphasizing now, and why?
A. The Fund has recently narrowed its sector focus to four areas. The
technology weighting has been increased to approximately 30% of the portfolio
from a low of 17% in late 1995. Dramatic price corrections in many of that
industry's segments have presented the Fund with what we believe is an
opportunity to buy high-quality companies at relative valuations well below
the market and historic averages despite our expectations of above average
earnings growth. Energy weightings, primarily oil service companies, have
been modestly increased as the prospect for consolidation-driven cost-savings
and enhanced operating leverage in a favorable overall environment for
energy, both natural gas and oil, continues to bode well for superior
earnings growth. The Fund's allocation to the leisure sector, primarily
gaming and wireless communications, has remained approximately the same,
although a reduction in gaming issues has been offset by an increase in
Telephone Data Systems, the Fund's largest holding. The current market value
of this stock is well below what we believe to be the sum of its individual
parts and, in our view, the prospect for a corporate restructuring to unlock
these values is very high.
The health care sector has been added over the past six months and consists
primarily of health maintenance organizations (HMO). Stocks in this
controversial area suffered major corrections as earnings growth slowed, due
primarily to weaker-than-expected pricing. We still believe the prospects for
unit growth are very positive and pricing expectations have improved, and
expect earnings for the HMOs to reaccelerate in 1997 and beyond. Finally, the
"other" category, which consists of prospective future sectors and/or
individual ideas where we believe the Fund is better off owning than not, has
been concentrated to reduce the number of holdings and increase weightings in
stocks we believe represent attractive values. Some examples are Tyco
International, ADT LTD., Wisconsin Central, Loral Space and Communications,
Office Depot, McDonnell Douglas, Sears, and Equitable of Iowa.
Q. Have you made any significant changes in your holdings or sector
weightings over the past year, and why?
A. Yes, as I mentioned, the Fund's concentration in particular sectors has
increased modestly, with health care being added and technology getting a
higher weighting, while weightings in the financial services and retail
sectors were dramatically lowered. Financial service stocks have performed
well in 1996, which reduced their relative attractiveness. Retail prospects
4
<PAGE>
were mixed after a weak Christmas but rotation by investors to this sector
allowed the Fund to reduce its holdings.
Q. Can you name some stocks or sectors that performed well, or better than
expected, and tell us why you think they did well?
A. One successful theme the Fund has pursued cuts across a number of
industries, including oil services, banks, and aerospace and defense. This
theme was the consolidation of slow-growth industries where valuations
reflect the prospects for continued but anemic growth, as opposed to an
acceleration of earnings growth through cost cutting, greater productivity,
increased market share, and better balance sheet management. Weatherford, BJ
Services, Cooper Cameron, First Interstate, Fleet Financial Group, Loral, and
McDonnell Douglas are all successful examples of companies whose prospects
for accelerating earnings growth became apparent, increasing the appeal of
these companies to other investors.
Q. Now what about some stocks or sectors that did not perform as well as you
expected?
A. Technology is surely one, as expectations got ahead of fundamentals.
Investors focused too heavily on the positive demand outlook, which now
appears to have been partly overstated due to the industry's practice of
double ordering and ignored the industry's rush to add capacity. These
factors all collided and caused a severe correction in the sector that has
taken almost a year to shake out. A second example was our expectation for
state gaming license growth. We did not properly weigh the negative political
impact on this process, either in the approval of state gaming or, once
approval was granted, limitations on the number of licenses. That industry
has seen a major shake-out of participants and only the well-financed,
strongly managed companies appear positioned to prosper in what we still see
as an above-average growth industry.
Q. Looking ahead, what changes do you see in the overall market environment
as it relates to your Fund?
A. We still believe the economy will continue to grow, albeit at a moderate
rate. Also, this subdued level of growth should help inflation remain modest.
This environment will put a premium on the visibility and growth of earnings.
That means the market is likely to keep trading in a narrow range marked by
volatile rotations among sectors. In this environment, we believe the best
course of action for the Fund is to concentrate holdings in companies led by
strong management teams and which have visible earnings growth and attractive
relative valuations.
5
<PAGE>
A Discussion with the Fund Manager -- continued
Q. How are you positioning the Fund to try and take advantage of those
changes?
A. The Fund has concentrated its holdings and is overweighted in four
sectors, each of which we believe offers a favorable risk/reward ratio. For
example, we believe the technology industry continues to represent an area
where demand will grow at levels above that of the overall economy.
Well-positioned companies that execute properly are more likely to show
strong earnings growth, and the recent stock market correction has presented
an opportunity to purchase quality names at price-earnings ratios well below
these expected growth rates. The HMO area also presents an opportunity to
invest in what we see as a growth sector where the market perception is
different from ours. We believe earnings for a number of HMOs will more
closely approximate unit growth expectations of 18% to 25%, while current
valuations of the stocks appear to discount a decidedly slower progression.
/s/ Kenneth J. Enright
Kenneth J. Enright
Fund Manager
- --------------------------------------------------------------------------------
Fund Manager's Profile
Kenneth Enright joined the MFS Research Department in 1986. A graduate of Boston
State College and of the Babson College Graduate School of Business
Administration, he was named Assistant Vice President - Investments in 1987 and
Vice President - Investments in 1988. Mr. Enright became Fund Manager of MFS
Managed Sectors Fund in 1993. He is a Chartered Financial Analyst (C.F.A.).
- --------------------------------------------------------------------------------
6
<PAGE>
- --------------------------------------------------------------------------------
Federal Income Tax Information
Dividend received deduction: 7.93%
For the year ended August 31, 1996, the distributions from
long-term capital gains were $28,890,777.
- --------------------------------------------------------------------------------
Performance Summary
The information below and on the following page illustrates the historical
performance of MFS Managed Sectors Fund Class B shares in comparison to
various market indicators. Class B share results 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.
The performance of Class A shares will be greater than or less than the line
shown, based on differences in loads and fees paid by shareholders investing
in different classes.
Class A shares were offered effective September 20, 1993. Information on
Class A share performance appears on the next page.
- --------------------------------------------------------------------------------
Line chart
Growth of Hypothetical $10,000 Investment
(For the Period from January 1, 1987 through August 31, 1996)
MFS
Managed Consumer
Sectors Price S&P 500
Fund Index Composite
---- ----- ---------
1/1/87 10000 10000 10000
8/31/87 16455 10350 13883
8/31/88 12318 10764 11403
8/31/89 17678 11270 15864
8/31/90 15341 11903 15064
8/30/91 20364 12356 19118
8/31/92 22065 12744 20627
8/31/93 26261 13097 23762
8/31/94 26762 13477 25058
8/31/95 33505 13830 30402
8/31/96 34566 14225 36070
- --------------------------------------------------------------------------------
Class A share performance on the next page includes the performance of the
Fund's Class B shares for periods prior to the commencement of offering of
Class A shares on September 20, 1993. Sales charges and operating expenses
for Class A and Class B shares differ. Class B share performance which is
included within the Class A SEC share performance has been
7
<PAGE>
Performance Summary -- continued
adjusted to reflect the maximum initial sales charge generally applicable to
Class A shares rather than the CDSC generally applicable to Class B shares.
Class A share performance has not been adjusted, however, to reflect
differences in operating expenses (e.g., Rule 12b-1 fees), which generally
are higher for Class B shares.
Average Annual Total Returns
Life of
Class
through
1 Year 3 Years 5 Years 8/31/96
-------------------------------- --------- --------- --------- ---------
MFS Managed Sectors Fund
(Class A) including 5.75%
sales charge -2.07% +8.60% +10.56% +13.17%
-------------------------------- --------- --------- --------- ---------
MFS Managed Sectors Fund
(Class A) at net asset value +3.92% +10.37% +11.64% +13.74%
-------------------------------- --------- --------- --------- ---------
MFS Managed Sectors Fund
(Class B) with CDSC -0.23% +8.90% +10.90% +13.49%
-------------------------------- --------- --------- --------- ---------
MFS Managed Sectors Fund
(Class B) without CDSC +3.17% +9.59% +11.16% +13.49%
-------------------------------- --------- --------- --------- ---------
Average specialty/miscellaneous
fund +11.64% +10.83% +14.86% +12.18%
-------------------------------- --------- --------- --------- ---------
Standard & Poor's 500 Composite
Index +18.72% +14.98% +13.57% +13.36%
-------------------------------- --------- --------- --------- ---------
Consumer Price Index[S] +2.86% +2.79% +2.86% +3.67%
-------------------------------- --------- --------- --------- ---------
[S] The Consumer Price Index is a popular measure of change in prices.
Class A SEC results include the maximum 5.75% sales charge. Class B SEC
results reflect the applicable CDSC, which declines over six years as
follows: 4%, 4%, 3%, 3%, 2%, 1%, 0%.
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. Past performance is no
guarantee of future results.
- --------------------------------------------------------------------------------
Fund Facts
Strategy: The Fund's investment objective is to provide
capital appreciation. As much as 50% of the Fund's
assets may be in one sector or cash.
Commencement of
investment operations: December 29, 1986
Size: $337.4 million as of August 31, 1996
- --------------------------------------------------------------------------------
8
<PAGE>
Portfolio Concentration as of August 31, 1996
Top Ten Holdings
Telephone & Data Systems, Inc.
Provides rural and local telephone services
Intel Corp.
Semiconductor manufacturer
Tyco International Ltd.
Manufacturer of fire protection,
packaging, and electronic equipment
Harrah's Entertainment, Inc.
Operates gaming operations in
several states
Occidental Petroleum
Worldwide oil and natural gas
production company
ADT Ltd.
Commercial and residential
security company
National Semiconductor Corp.
Semiconductor manufacturer
Electronic Arts, Inc.
Entertainment software company
Healthsource, Inc.
Health maintenance organization
Cabletron Systems, Inc.
Provides local area networks (LANs)
for computer systems
Largest Sectors
[Graphic: Pie Chart]
Technology 31.6%
Other 25.1%
Leisure 18.5%
Energy 12.4%
Health Care 12.4%
9
<PAGE>
Portfolio of Investments - August 31, 1996
Common Stocks - 96.8%
==========================================================================
Issuer Shares Value
- --------------------------------------------------------------------------
Energy - 12.4%
BJ Services Co.* 150,000 $ 5,643,750
Camco International, Inc. 105,000 3,556,875
Cooper Cameron Corp.* 109,000 5,749,750
Occidental Petroleum Corp. 400,000 9,300,000
Seacor Holdings, Inc.* 134,900 6,137,950
Tidewater, Inc. 95,000 3,645,625
Weatherford Enterra, Inc.* 269,400 7,745,250
---------------
$ 41,779,200
- --------------------------------------------------------------------------
Health Care - 12.4%
CIGNA Corp. 26,500 $ 3,077,312
Coventry Corp.* 543,700 7,170,044
Healthsource, Inc.* 550,800 8,262,000
Healthsouth Corp.* 72,900 2,360,137
Pacificare Health Systems, Inc., "A"* 3,600 274,500
Pacificare Health Systems, Inc., "B"* 72,200 5,812,100
Pharmacia & Upjohn, Inc. 83,000 3,486,000
St. Jude Medical, Inc.* 110,800 3,974,950
United Healthcare Corp. 184,000 7,107,000
Ventritex, Inc.* 30,900 421,013
---------------
$ 41,945,056
- --------------------------------------------------------------------------
Leisure - 18.5%
American Portable Telecom, Inc.* 200,000 $ 1,900,000
Argosy Gaming Corp.* 350,000 2,275,000
Harrah's Entertainment, Inc.* 596,000 11,324,000
MGM Grand, Inc.* 94,200 3,556,050
Promus Hotel Corp.* 237,000 7,139,625
Showboat, Inc. 175,000 3,478,125
Telephone & Data Systems, Inc. 770,000 32,821,250
---------------
$ 62,494,050
- --------------------------------------------------------------------------
Technology - 31.6%
Adobe Systems, Inc. 132,000 $ 4,603,500
ADT Ltd.* 450,100 8,833,213
Analog Devices, Inc.* 280,000 6,755,000
Atmel Corp.* 135,000 3,493,125
BMC Software, Inc.* 69,800 5,200,100
Cabletron Systems, Inc.* 130,000 7,930,000
Digital Equipment Corp.* 150,000 5,793,750
Electronic Arts, Inc.* 275,600 8,509,150
Intel Corp. 185,000 14,765,312
Microsoft Corp.* 30,000 3,675,000
National Semiconductor Corp.* 472,000 8,673,000
Oracle Systems Corp.* 123,000 4,335,750
Spectrum Holobyte, Inc.* 800,000 4,100,000
Sun Microsystems, Inc.* 136,000 7,395,000
Sybase, Inc.* 215,000 3,463,516
U.S. Robotics Corp.* 135,000 7,087,500
Xilinx, Inc.* 60,000 2,100,000
---------------
$106,712,916
- --------------------------------------------------------------------------
10
<PAGE>
Other - 21.9%
Advanta Corp., "B" 123,300 $ 5,486,850
AGCO Corp. 301,700 7,127,662
Colgate-Palmolive Co. 57,000 4,631,250
Equitable of Iowa Cos. 210,000 7,717,500
Federated Department Stores, Inc.* 103,900 3,597,538
Loral Space & Communications Corp.* 305,700 4,279,800
McDonnell Douglas Corp. 100,000 5,012,500
Office Depot, Inc.* 455,000 7,223,125
PowerGen PLC (United Kingdom) 626,100 3,538,431
Sears, Roebuck & Co. 160,200 7,048,800
Tyco International Ltd. 313,000 13,224,250
Wisconsin Central Transportation Corp.* 137,400 4,843,350
---------------
$ 73,731,056
- --------------------------------------------------------------------------
Total Common Stocks (Identified Cost, $305,967,668) $326,662,278
- --------------------------------------------------------------------------
Convertible Bonds - 0.1%
- --------------------------------------------------------------------------
Principal Amount
(000 Omitted)
- --------------------------------------------------------------------------
Spectrum Holobyte, Inc., 6.5s, 2002
(Technology)(##) $ 560 $ 327,600
Ventritex, Inc., 5.75s, 2001 (Other) 120 123,900
- --------------------------------------------------------------------------
Total Convertible Bonds (Identified Cost, $680,000) $ 451,500
- --------------------------------------------------------------------------
Short-Term Obligations - 1.5%
- --------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., due
9/04/96 $ 1,500 $ 1,499,348
Federal National Mortgage Assn., due
9/20/96 1,275 1,271,487
General Electric Capital Corp.,
due 9/03/96 2,080 2,079,390
- --------------------------------------------------------------------------
Total Short-Term Obligations, at Amortized Cost $ 4,850,225
- --------------------------------------------------------------------------
Total Investments (Identified Cost, $311,497,893) $331,964,003
Other Assets, Less Liabilities - 1.6% 5,398,547
- --------------------------------------------------------------------------
Net Assets - 100.0% $337,362,550
- --------------------------------------------------------------------------
* Non-income producing security.
## SEC Rule 144A restriction.
See notes to financial statements
11
<PAGE>
Financial Statements
Statement of Assets and Liabilities
========================================================================
August 31, 1996
-----------------------------------------------------------------------
Assets:
Investments, at value (identified cost, $311,497,893) $331,964,003
Cash 5,253
Receivable for investments sold 10,458,880
Receivable for Fund shares sold 78,450
Interest and dividends receivable 135,163
Other assets 12,761
---------------
Total assets $342,654,510
---------------
Liabilities:
Payable for investments purchased $ 4,417,435
Payable for Fund shares reacquired 536,614
Payable to affiliates -
Management fee 13,986
Shareholder servicing agent fee 3,301
Distribution fee 158,864
Accrued expenses and other liabilities 161,760
---------------
Total liabilities $ 5,291,960
---------------
Net assets $337,362,550
---------------
Net assets consist of:
Paid-in capital $278,805,599
Unrealized appreciation on investments and
translation of assets and liabilities in foreign
currencies 20,466,179
Accumulated undistributed net realized gain on
investments and foreign currency transactions 38,348,182
Accumulated net investment loss (257,410)
---------------
Total $337,362,550
---------------
Shares of beneficial interest outstanding 25,647,219
---------------
Class A shares:
Net asset value per share (net assets of $207,504,082
/ 15,767,359 shares of beneficial interest
outstanding) $13.16
---------------
Offering price per share (100/94.25) $13.96
---------------
Class B shares:
Net asset value and offering price per share
(net assets of $129,858,468 / 9,879,860 shares of
beneficial interest outstanding) $13.14
---------------
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
12
<PAGE>
Statement of Operations
=========================================================================
Year Ended August 31, 1996
- -------------------------------------------------------------------------
Net investment income:
Income -
Dividends $ 2,972,654
Interest 206,009
----------------
Total investment income $ 3,178,663
----------------
Expenses -
Management fee $ 2,731,358
Trustees' compensation 46,448
Shareholder servicing agent fee (Class A) 306,661
Shareholder servicing agent fee (Class B) 351,428
Distribution and service fee (Class A) 715,542
Distribution and service fee (Class B) 1,597,402
Custodian fee 167,222
Postage 97,783
Printing 40,198
Auditing fees 22,945
Miscellaneous 271,311
----------------
Total expenses $ 6,348,298
Fees paid indirectly (12,804)
----------------
Net expenses $ 6,335,494
----------------
Net investment loss $ (3,156,831)
----------------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $ 62,520,394
Foreign currency transactions (61,695)
----------------
Net realized gain on investments and foreign currency
transactions $ 62,458,699
----------------
Change in unrealized appreciation (depreciation) -
Investments $(45,740,155)
Translation of assets and liabilities in foreign
currencies 69
----------------
Net unrealized loss on investments and foreign
currency translation $(45,740,086)
----------------
Net realized and unrealized gain on investments and
foreign currency $ 16,718,613
----------------
Increase in net assets from operations $ 13,561,782
----------------
See notes to financial statements
13
<PAGE>
Statement of Changes in Net Assets
=========================================================================
Year Ended August 31, 1996 1995
- -------------------------------------------- ---------------- ----------------
Increase (decrease) in net assets:
From operations -
Net investment loss $ (3,156,831) $ (2,610,783)
Net realized gain on investments
and foreign currency transactions 62,458,699 52,247,905
Net unrealized gain (loss) on
investments and foreign currency
translation (45,740,086) 29,148,730
---------------- ----------------
Increase in net assets from operations $ 13,561,782 $ 78,785,852
---------------- ----------------
Distributions declared to shareholders -
From net realized gain on investments and
foreign currency transactions (Class A) $ (37,126,652) $ (8,991,673)
From net realized gain on investments and
foreign currency transactions (Class B) (28,912,351) (14,927,407)
---------------- ----------------
Total distributions declared to
shareholders $ (66,039,003) $ (23,919,080)
---------------- ----------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 105,543,935 $ 126,368,710
Net asset value of shares issued to
shareholders in reinvestment of
distributions 60,342,057 21,847,531
Cost of shares reacquired (154,185,704) (160,496,119)
---------------- ----------------
Increase (decrease) in net assets
from Fund share transactions $ 11,700,288 $ (12,279,878)
---------------- ----------------
Total increase (decrease) in
net assets $ (40,776,933) $ 42,586,894
Net assets:
At beginning of period 378,139,483 335,552,589
---------------- ----------------
At end of period (including accumulated
net investment loss of $257,410,
and $69,538, respectively) $ 337,362,550 $ 378,139,483
---------------- ----------------
See notes to financial statements
14
<PAGE>
Financial Highlights
=========================================================================
Nine
Year Ended Months Ended Period Ended
August 31, August 31, November 30,
------------------ ------------- -------------
1996 1995 1994 1993*
- ----------------------------------------------------------------------------
Class A
- ----------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
Net asset value --
beginning of period $15.55 $13.41 $15.50 $15.68
----------------- ------------- -------------
Income from investment
operations# --
Net investment loss $(0.08) $(0.05) $(0.03) $(0.02)
Net realized and
unrealized gain (loss)
on investments and
foreign currency
transactions 0.58 3.22 0.77 (0.16)
----------------- ------------- -------------
Total from investment
operations $ 0.50 $ 3.17 $ 0.74 $(0.18)
----------------- ------------- -------------
Less distributions declared
to shareholders
from net realized gain on
investments and foreign
currency transactions $(2.89) $(1.03) $(2.83) $ --
----------------- ------------- -------------
Net asset value -- end of
period $13.16 $15.55 $13.41 $15.50
----------------- ------------- -------------
Total return++ 3.92% 26.12% 5.12%+++ (5.99)%+
Ratios (to average net
assets)/Supplemental
data:
Expenses## 1.43% 1.46% 1.52%+ 1.59%+
Net investment loss (0.56)% (0.34)% (0.26)%+ (0.75)%+
Portfolio turnover 117% 115% 76% 106%
Average commission rate### $0.0411 $ -- $ -- $ --
Net assets at end of period
(000 omitted) $207,504 $178,367 $121,498 $136,179
*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.
## For fiscal years ending after September 1, 1995, the Fund's expenses are
calculated without reduction for fees paid indirectly.
### Average commission rate is calculated for funds with fiscal years
beginning on or after September 1, 1995.
See notes to financial statements
15
<PAGE>
Financial Highlights - continued
=========================================================================
Nine
Months
Year Ended Ended
August 31, August 31,
---------------------- -------------
1996 1995 1994
- --------------------------------------------------------------------------
Class B
- --------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of
period $ 15.46 $ 13.35 $15.49
----------- ----------- -------------
Income from investment operations# -
Net investment loss $ (0.18) $ (0.14) $(0.10)
Net realized and unrealized gain
on investments and foreign
currency transactions 0.58 3.20 0.75
----------- ----------- -------------
Total from investment
operations $ 0.40 $ 3.06 $ 0.65
----------- ----------- -------------
Less distributions declared to
shareholders from net realized
gain on investments and foreign
currency transactions $ (2.72) $ (0.95) $(2.79)
----------- ----------- -------------
Net asset value - end of period $ 13.14 $ 15.46 $13.35
----------- ----------- -------------
Total return 3.17% 25.19% 4.47%+++
Ratios (to average net assets)/Supplemental data:
Expenses## 2.15% 2.18% 2.26%+
Net investment loss (1.27)% (1.06)% (1.01)%+
Portfolio turnover 117% 115% 76%
Average commission rate### $0.0411 $ -- $ --
Net assets at end of period
(000 omitted) $129,858 $199,773 $214,055
Year Ended November 30,
-----------------------------------
1993 1992 1991
-----------------------------------------------------------------------
Class B
-----------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of
period $15.42 $13.00 $ 9.23
----------- ----------- --------
Income from investment operations# -
Net investment loss $(0.25) $(0.24) $(0.12)
Net realized and unrealized gain
on investments and foreign
currency transactions 0.94 2.66 3.89
----------- ----------- --------
Total from investment
operations $ 0.69 $ 2.42 $ 3.77
----------- ----------- --------
Less distributions declared to
shareholders from net realized
gain on investments and foreign
currency transactions $(0.62) $ -- $ --
----------- ----------- --------
Net asset value - end of period $15.49 $15.42 $ 13.00
----------- ----------- --------
Total return 4.50% 18.62% 40.85%
Ratios (to average net assets)/Supplemental data:
Expenses## 2.21% 2.37% 2.44%
Net investment loss (1.55)% (1.85)% (1.00)%
Portfolio turnover 106% 22% 59%
Average commission rate### $ -- $ -- $ --
Net assets at end of period
(000 omitted) $232,982 $249,493 $190,232
+ Annualized.
+++ Not annualized.
# Per share data for the periods subsequent to November 30, 1993 are based
on average shares outstanding.
## For fiscal years ending after September 1, 1995, the Fund's expenses are
calculated without reduction for fees paid indirectly.
### Average commission rate is calculated for funds with fiscal years
beginning on or after September 1, 1995.
See notes to financial statements
16
<PAGE>
Financial Highlights - continued
=========================================================================
Year Ended November 30, 1990 1989 1988 1987**
- -------------------------------------------------------------------------
Class B
- -------------------------------------------------------------------------
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 realized
gain on investments and
foreign currency transactions $ -- $(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
** For the period from the commencement of investment operations,
December 29, 1986 to November 30, 1987.
+ Annualized.
See notes to financial statements
17
<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
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 - 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. 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 at
fair value as determined in good faith by or at the direction of the
Trustees.
Foreign Currency Translation - Investment valuations, other assets, and
liabilities initially expressed in foreign currencies are converted each
business day into U.S. dollars based upon current exchange rates. Purchases
and sales of foreign investments, income and expenses are converted into U.S.
dollars based upon currency exchange rates prevailing on the respective dates
of such transactions. Gains and losses attributable to foreign currency
exchange rates on sales of securities are recorded for financial statement
purposes as net realized gains and losses on investments. Gains and losses
attributable to foreign exchange rate movements on income and expenses are
recorded for financial statement purposes as foreign currency transaction
gains and losses. That portion of both realized and unrealized gains and
losses on investments that results from fluctuations in foreign currency
exchange rates is not separately disclosed.
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
18
<PAGE>
income is recorded on the ex-dividend date for dividends received in cash.
Dividend payments received in additional securities are recorded on the ex-
dividend date in an amount equal to the value of the security on such date.
Fees Paid Indirectly - The Fund's custodian bank calculates its fee based
on the Fund's average daily net assets. The fee is reduced according to a fee
arrangement, which provides for custody fees to be reduced based on a formula
developed to measure 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 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
tax return of capital. Differences in the recognition or classification of
income between the financial statements and tax earnings and profits which
result in temporary over-distributions for financial statement purposes, are
classified as distributions in excess of net investment income or accumulated
net realized gains. During the year ended August 31, 1996, $2,968,959 was
reclassified from accumulated net realized gain on investments and foreign
currency transactions to accumulated net investment loss 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. At August 31,
1996, the realized gain on investments and foreign currency transactions
under book accounting were different from tax accounting due to temporary
differences in accounting for tax spillback.
19
<PAGE>
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 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 its independent Trustees and Mr.
Bailey. Included in Trustees' compensation is a net periodic pension expense
of $14,174 for the year ended August 31, 1996.
Distributor - MFD, a wholly owned subsidiary of MFS, as distributor,
received $29,911 for the year ended August 31, 1996, 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 $75,308 for the year ended August 31,
1996. Fees incurred under the
20
<PAGE>
distribution plan during the year ended August 31, 1996 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 $54,123
for Class B shares for the year ended August 31, 1996. Fees incurred under
the distribution plan during the year ended August 31, 1996 were 1.00% of
average daily net assets attributable to Class B shares on an annualized
basis.
Purchases over $1 million of Class A shares and certain purchases into
retirement plans are subject to a contingent deferred sales charge in the
event of a shareholder redemption within 12 months following such 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, 1996 were $86
and $122,087 for Class A and Class B 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 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.
(4) Portfolio Securities
Purchases and sales of investments, other than U.S. government securities,
purchased option transactions and short-term obligations aggregated
$424,505,698 and $492,973,362, 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 $311,583,773
---------------
Gross unrealized appreciation $ 49,223,844
Gross unrealized depreciation (28,843,614)
---------------
Net unrealized appreciation $ 20,380,230
---------------
21
<PAGE>
(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:
Class A Shares Year Ended Year Ended
August 31, 1996 August 31, 1995
---------------------------- -----------------------------
Shares Amount Shares Amount
- ------------------ ------------- -------------- ----------------------------
Shares sold 4,380,258 $ 63,996,858 3,546,423 $ 50,859,620
Shares issued to
shareholders
in
reinvestment of
distributions 2,625,824 33,269,508 694,041 8,168,939
Shares reacquired (2,712,657) (38,139,937) (1,829,247) (24,588,500)
------------- -------------- ----------------------------
Net increase 4,293,425 $ 59,126,429 2,411,217 $ 34,440,059
------------- -------------- ----------------------------
Class B Shares Year Ended Year Ended
August 31, 1996 August 31, 1995
---------------------------- -----------------------------
Shares Amount Shares Amount
- ------------------ ------------- -------------- ----------------------------
Shares sold 2,993,295 $ 41,547,077 5,728,388 $ 75,509,090
Shares issued to
shareholders in
reinvestment of
distributions 2,128,326 27,072,549 1,162,148 13,678,592
Shares reacquired (8,163,355) (116,045,767) (10,002,205) (135,907,619)
------------- -------------- ----------------------------
Net decrease (3,041,734) $ (47,426,141) (3,111,669) $ (46,719,937)
------------- -------------- ----------------------------
(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, 1996 was $4,230.
22
<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, 1996, the related statement of operations for the year then ended,
the statement of changes in net assets for the years ended August 31, 1996,
and 1995, and the financial highlights for the years ended August 31, 1996
and 1995, the nine months ended August 31, 1994, and each of the years 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, 1996 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, 1996, 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 4, 1996
-----------------------------------------------------------------------------
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.
23
<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 anytime). 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
Limited Maturity Bond
- -------------------------------------------------------------
MFS(R) Government Limited Maturity Fund
MFS(R) Limited Maturity Fund
MFS(R) Municipal Limited Maturity Fund
- -------------------------------------------------------------
World
- ----------------------------------------------------------------
MFS(R)/Foreign & Colonial Emerging Markets Equity Fund
MFS(R)/Foreign & Colonial International Growth Fund
MFS(R)/Foreign & Colonial International Growth and Income Fund
MFS(R) World Asset Allocation Fund(SM)
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
MFS(R) Municipal Income Fund
State Tax-Free Bond
- ----------------------------------------------------------------
Alabama, Arkansas, California, Florida, Georgia,
Maryland, Massachusetts, Mississippi, New York, North Carolina,
Pennsylvania, South Carolina, Tennessee, Virginia,
West Virginia
Money Market
- ----------------------------------------------------------------
MFS(R) Cash Reserve Fund
MFS(R) Government Money Market Fund
MFS(R) Money Market Fund
- ----------------------------------------------------------------
24
<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;
Director, Cambridge Bancorp; Director,
Cambridge Trust 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); President, Benchmark Consulting Group,
Inc. (office services); Trustee, Landmark Funds (mutual funds)
Arnold D. Scott* - Senior Executive Vice President, Director and Secretary,
Massachusetts Financial Services Company
Jeffrey L. Shames* - President and Director,
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
Fund Manager
Kenneth J. Enright
Treasurer
W. Thomas London*
Assistant Treasurer
James O. Yost*
Secretary
Stephen E. Cavan*
*Affiliated with the Investment Adviser
Assistant Secretary
James R. Bordewick, Jr.*
Custodian
State Street Bank and Trust Company
Auditor
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.
Web Site
http://www.mfs.com
DALBAR SEAL
[Dalbar seal:] For the second year in a
- ------------------- row, MFS earned a #1
MFS Rated #1 ranking in DALBAR,
TOP-RATED SERVICE Inc.'s Broker/Dealer
- ------------------- Survey, Main Office
Operations Service
Quality category. The
Firm achieved a 3.49
overall score -- on a scale of 1 to 4 -- in the 1995
survey. A total of 71 firms responded, offering
input on the quality of service they receive from
36 mutual fund companies nationwide. The
survey contained questions about service quality
in 17 categories, including "knowledge of phone
service contacts," "accuracy of transaction
processing," and "overall ease of doing business
with the firm." The 1996 survey results were not
available at the time of this printing.
25
<PAGE>
[Dalbar seal:]
MFS(R) -------------------
Managed MFS Rated #1
Sectors Fund TOP-RATED SERVICE
-------------------
500 Boylston Street
Boston, MA 02116
[MFS logo]
INVESTMENT MANAGEMENT
We invented the mutual fund(SM)
(C) MFS Fund Distributors, Inc., 500 Boylston Street, Boston, MA 02116
Bulk Rate
U.S. Postage
P A I D
Permit #55638
Boston, MA
MMS-2-10/96 54M 08/208
[Front Cover]
[MFS logo]
INVESTMENT MANAGEMENT
We invented the mutual fund(SM)
MFS(R) Managed Sectors Fund
[Photo: close-up of computer keyboard keys]
Annual Report
for Year Ended
August 31, 1996
