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[logo] M F S(R) SEMIANNUAL REPORT
THE FIRST NAME IN MUTUAL FUNDS FEBRUARY 29, 1996
MFS(R) CASH RESERVE FUND
<PAGE>
MFS(R) CASH RESERVE FUND
<TABLE>
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<S> <C>
TRUSTEES SECRETARY
A. Keith Brodkin* - Chairman and President Stephen E. Cavan*
Richard B. Bailey* - Private Investor; ASSISTANT SECRETARY
Former Chairman and Director (until 1991), James R. Bordewick, Jr.*
Massachusetts Financial Services Company;
Director, Cambridge Bancorp; CUSTODIAN
Director, Cambridge Trust Company State Street Bank and Trust Company
Marshall N. Cohan - Private Investor INVESTOR INFORMATION
For MFS stock and bond market outlooks,
Lawrence H. Cohn, M.D. - Chief of Cardiac call toll free: 1-800-637-4458 anytime from
Surgery, Brigham and Women's Hospital; a touch-tone telephone.
Professor of Surgery, Harvard Medical School
For information on MFS mutual funds,
The Hon. Sir J. David Gibbons, KBE - Chief call your financial adviser or, for an
Executive Officer, Edmund Gibbons Ltd.; information kit, call toll free:
Chairman, Bank of N.T. Butterfield & Son Ltd. 1-800-637-2929 any business day from
9 a.m. to 5 p.m. Eastern time (or leave
Abby M. O'Neill - Private Investor; a message anytime).
Director, Rockefeller Financial Services, Inc.
(investment adviser) INVESTOR SERVICE
MFS Service Center, Inc.
Walter E. Robb, III - President and Treasurer, P.O. Box 2281
Benchmark Advisors, Inc. (corporate financial consultants); Boston, MA 02107-9906
President, Benchmark Consulting Group, Inc. (office services);
Trustee, Landmark Funds (mutual funds) For general information, call toll free:
1-800-225-2606 any business day from
Arnold D. Scott* - Senior Executive Vice 8 a.m. to 8 p.m. Eastern time.
President, Director and Secretary,
Massachusetts Financial Services Company For service to speech- or hearing-impaired,
call toll free: 1-800-637-6576 any business
Jeffrey L. Shames* - President and Director, day from 9 a.m. to 5 p.m. Eastern time.
Massachusetts Financial Services Company (To use this service, your phone must be equipped
with a Telecommunications Device for the Deaf.)
J. Dale Sherratt - President, Insight Resources, Inc.
(acquisition planning specialists) For share prices, account balances and
exchanges, call toll free: 1-800-MFS-TALK
Ward Smith - Former Chairman (1-800-637-8255) anytime from a touch-tone
(until 1994), NACCO Industries; telephone.
Director, Sundstrand Corporation
INVESTMENT ADVISER --------------------------------------------
Massachusetts Financial Services Company
500 Boylston Street TOP RATED SERVICE
Boston, MA 02116-3741 For the second year in a row,
[DALBAR MFS earned a #1 ranking in
DISTRIBUTOR LOGO] DALBAR, Inc.'s Broker/Dealer
MFS Fund Distributors, Inc. Survey, Main Office Operations
500 Boylston Street Service Quality category. The
Boston, MA 02116-3741 firm achieved a 3.49 overall score - on a
scale of 1 to 4 - in the 1995 survey. A total
PORTFOLIO MANAGER of 71 firms responded, offering input on the
Geoffrey L. Kurinsky* quality of service they receive from 36
mutual fund companies nationwide. The survey
TREASURER contained questions about service quality in
W. Thomas London* 17 categories, including "knowledge of phone
service contracts," "accuracy of transaction
ASSISTANT TREASURER processing," and "overall ease of doing
James O. Yost* business with the firm."
*Affiliated with the Investment Adviser
</TABLE>
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LETTER TO SHAREHOLDERS
Dear Shareholders:
Short-term interest rates decreased moderately during the past six months.
Reflecting this trend, the annualized compounded yield on an investment in
Class A shares of the Fund for the seven-day period ended February 29, 1996
declined from 5.1% to 4.6%, and the annualized compounded yield on an
investment in Class B shares declined from 3.9% to 3.5%.
Economic Environment
We believe the U.S. economy will continue to grow in 1996 -- although
"subdued" may be the best way to describe this growth. One factor holding
growth in check is the continued sluggishness of the consumer sector, an area
that represents approximately two-thirds of the economy. Going into this year,
consumers have been left in a somewhat weakened position, due in part to an
increase in consumer installment debt of some 30% over the past two years. A
second reason for the economy's weakness is the "lag effect" of increases in
short-term interest rates by the Federal Reserve Board in 1994 and into 1995.
This lag effect can last up to two years, although a series of reductions in
short-term rates by the Fed, which began late last year, could provide some
support to the economy through 1996. A third reason for weakness is the
ongoing economic doldrums in Europe and Japan, important markets for U.S.
exports. Here again, we are seeing a few signs, particularly in Japan, of
modest recoveries that could lead to improved prospects for U.S. exporters.
Also, we believe lower interest rates will give a boost to the U.S. housing
market, an important segment of the economy since it also affects such
industries as major appliances, furniture, and building-supply companies.
Finally, although the first few weeks of 1996 saw some signs of inflationary
pressures, caused primarily by rising energy prices and followed by an upward
movement in gold, we believe inflation will remain under control this year,
due mainly to the subdued level of economic growth.
Interest Rates
During the past six months, the Federal Reserve voted to ease monetary policy
by lowering the federal funds' rate (the interest rate charged by banks to
other banks in need of overnight loans) by 25 basis points (0.25%) on December
19, 1995, and by the same amount on January 31, 1996. As a result, yields on
90-day U.S. Treasury bills and commercial paper fell approximately 50 basis
points (0.50%). Furthermore, with the economy showing some signs of slowing,
we believe short-term interest rates will be fairly stable to slightly lower
over the next several months.
Portfolio Performance and Strategy
In an effort to provide a reasonable level of current income, we have
continued to maintain a relatively long maturity in the portfolio. On February
29, 1996, the average maturity of the Fund was 45 days.
The portfolio continues to include only the highest quality corporate,
bank, and government securities in order to provide investors with maximum
security against credit risk. On February 29, 1996, approximately 28% of the
Fund's assets were invested in commercial paper, with the balance invested in
securities issued or guaranteed by the U.S. Treasury or agencies or
instrumentalities of the U.S. government, because of the very narrow yield
spreads between government agency obligations and commercial paper. We believe
this emphasis on quality will allow the Fund to seek current income and, at
the same time, to preserve capital and liquidity.
We appreciate your support and welcome any questions or comments you may
have.
Respectfully,
[Photo of A. Keith Brodkin, [Photo of Geoffrey L. Kurinsky,
Chairman and President] Portfolio Manager]
/s/ A. Keith Brodkin /s/ Geoffrey L. Kurinsky
A. Keith Brodkin Geoffrey L. Kurinsky
Chairman and President Portfolio Manager
March 14, 1996
<PAGE>
PORTFOLIO MANAGER PROFILE
Geoffrey Kurinsky began his career at MFS in 1987 in the Fixed Income
Department. A graduate of the University of Massachusetts and Boston
University's Graduate School of Management, he was named Assistant Vice
President in 1988, Vice President in 1989, and Senior Vice President in 1993.
He has managed MFS Cash Reserve Fund since 1992.
OBJECTIVE AND POLICY
The Fund's investment objective is to seek as high a level of current income
as is considered consistent with the preservation of capital and liquidity.
The Fund's investment policy is to invest in money market instruments that
mature in less than 13 months. Securities collateralizing repurchase
agreements, however, may have maturities in excess of 13 months. The Fund
invests primarily in U.S. government securities (including repurchase
agreements collateralized by such securities), obligations of the larger
banks, prime commercial paper and high-grade, short-term corporate
obligations. The Fund may also invest in U.S. dollar-denominated securities of
foreign issuers.
Money market funds are neither insured nor guaranteed by the U.S. government,
and there can be no assurance that they will be able to maintain a stable net
asset value.
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PORTFOLIO OF INVESTMENTS (UNAUDITED) - February 29, 1996
Commercial Paper - 28.3%
- -----------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- -----------------------------------------------------------------------------
AT&T Corp., due 3/11/96 - 3/21/96 $ 7,900 $ 7,881,995
American Express Credit Corp., due 6/24/96 5,700 5,608,048
Beneficial Corp., due 5/03/96 5,000 4,955,637
Dow Chemical Co., due 4/10/96 - 5/17/96 7,000 6,939,965
General Motors Corp., due 3/14/96 2,290 2,285,675
Hershey Foods Corp., due 3/08/96 - 4/22/96 5,800 5,789,051
Knight Ridder, due 4/29/96 2,800 2,776,505
Procter & Gamble Co., due 3/05/96 7,000 6,995,792
Sara Lee Corp., due 3/27/96 4,000 3,984,516
Transamerica Corp., due 3/20/96 5,000 4,986,278
Warner-Lambert Co., due 3/25/96 2,100 2,092,216
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Total Commercial Paper $ 54,295,678
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U.S. Government and Agency Obligations - 50.4%
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Federal Home Loan Bank, due 3/06/96 - 7/12/96 $25,995 $ 25,824,875
Federal Home Loan Mortgage Corp., due
3/04/96 - 4/24/96 21,500 21,415,590
Federal National Mortgage Assn., due
3/07/96 - 9/06/96 35,700 35,196,912
Student Loan Marketing Assn., due 3/18/96 5,000 4,987,887
Tennessee Valley Authority, due 4/09/96 -
7/25/96 9,200 9,081,884
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Total U.S. Government and Agency Obligations $ 96,507,148
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Repurchase Agreement - 20.8%
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Goldman Sachs, dated 2/29/96, due 3/01/96,
total to be received $40,006,000 (secured by
FMAC discount note, 5.4s, due 3/20/96,
market value $40,923,475), at Cost and Value $40,000 $ 40,000,000
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Total Investments, at Amortized Cost and Value $190,802,826
Other Assets, Less Liabilities - 0.5% 867,006
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Net Assets - 100.0% $191,669,832
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See notes to financial statements
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FINANCIAL STATEMENTS
Statement of Assets and Liabilities (Unaudited)
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February 29, 1996
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Assets:
Investments, at amortized cost and value $150,802,826
Repurchase agreements, at cost and value 40,000,000
------------
Total investments, at cost and value $190,802,826
Cash 267,006
Receivable for Fund shares sold 1,724,651
Interest receivable 6,000
Other assets 3,028
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Total assets $192,803,511
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Liabilities:
Distributions payable $ 44,892
Payable for Fund shares reacquired 872,616
Payable to affiliates -
Management fee 2,457
Distribution fee 66,083
Shareholder servicing agent fee 1,156
Accrued expenses and other liabilities 146,475
------------
Total liabilities $ 1,133,679
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Net assets (represented by paid-in capital) $191,669,832
============
Shares of beneficial interest outstanding 191,669,832
============
Class A shares:
Net asset value, redemption price and offering price per
share (net assets of $22,971,049 / 22,971,049 shares of
beneficial interest outstanding) $1.00
=====
Class B shares:
Net asset value and offering price per share
(net assets of $168,698,783 / 168,698,783 shares of
beneficial interest outstanding) $1.00
=====
A contingent deferred sales charge may be imposed on redemptions of Class B
shares.
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Statement of Operations (Unaudited)
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Six Months Ended February 29, 1996
- ------------------------------------------------------------------------------
Net investment income:
Interest income $5,074,658
----------
Expenses -
Management fee $ 491,919
Trustees' compensation 23,410
Shareholder servicing agent fee (Class A) 10,502
Shareholder servicing agent fee (Class B) 181,255
Distribution and service fee (Class B) 823,885
Custodian fee 56,424
Postage 27,685
Legal fees 3,653
Auditing fees 1,650
Miscellaneous 154,989
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Total expenses $1,775,372
Fees paid indirectly (8,134)
Preliminary reduction of expenses by investment adviser (89,665)
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Net expenses $1,677,573
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Net investment income $3,397,085
==========
Statement of Changes in Net Assets
- ------------------------------------------------------------------------------
Six Months Ended
February 29, 1996 Year Ended
(Unaudited) August 31, 1995
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Increase (decrease) in net assets:
From operations -
Net investment income $ 3,397,085 $ 7,668,804
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Distributions declared to shareholders -
From net investment income (Class A) $ (335,153) $ (234,719)
From net investment income (Class B) (3,061,932) (7,434,085)
------------ ------------
Total distributions declared to
shareholders $ (3,397,085) $ (7,668,804)
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Fund share (principal) transactions -
Net proceeds from sale of shares $553,695,909 $836,765,789
Net asset value of shares issued to
shareholders in
reinvestment of distributions 2,712,222 6,352,846
Cost of shares reacquired (542,109,886) (881,538,348)
------------ ------------
Increase (decrease) in net assets
from Fund share transactions $ 14,298,245 $(38,419,713)
Net assets:
At beginning of period 177,371,587 215,791,300
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At end of period $191,669,832 $177,371,587
============ ============
See notes to financial statements
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FINANCIAL STATEMENTS - continued
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<CAPTION>
Financial Highlights
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Nine Months
Six Months Ended Year Ended Ended Year Ended
February 29, 1996 August 31, August 31, November 30,
(Unaudited) 1995 1994 1993**
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Class A
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<S> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------
Net investment income(S) $ 0.02 $ 0.05 $ 0.02 $ 0.01
Less distributions declared to shareholders from net
investment income (0.02) (0.05) (0.02) (0.01)
------ ------ ------ ------
Net asset value - end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ======
Total return 4.85%+ 4.91% 2.89%+ 2.28%+
Ratios (to average net assets)/Supplemental data(S):
Expenses## 0.91%+ 0.90% 0.86%+ 0.92%+
Net investment income 4.79%+ 4.94% 3.11%+ 2.26%+
Net assets at end of period (000 omitted) $22,971 $10,852 $2,156 $49
<FN>
**For the period from the commencement of offering of Class A shares, September 7, 1993 to November 30, 1993.
+Annualized.
##For fiscal years ending after September 1, 1995, the Fund's expenses are calculated without reduction for fees paid indirectly.
(S) The investment adviser did not impose a portion of its management fee for the periods indicated. If this fee had been incurred
by the Fund, the net investment income per share and ratios would have been:
</FN>
<S> <C> <C> <C> <C>
Net investment income $ 0.02 $ 0.05 $ 0.02 $ 0.01
Ratios (to average net assets):
Expenses 1.00%+ 1.00% 0.96%+ 1.02%+
Net investment income 4.69%+ 4.84% 3.01%+ 2.16%+
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights - continued
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Nine Months
Six Months Ended Year Ended Ended Year Ended November 30,
February 29, 1996 August 31, August 31, -----------------------
(Unaudited) 1995 1994 1993 1992
- -----------------------------------------------------------------------------------------------------------------------------------
Class B
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<S> <C> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----- ----- ----- ----- -----
Net investment income(S) $ 0.02 $ 0.04 $ 0.01 $ 0.01 $ 0.02
Less distributions declared to shareholders from net
investment income (0.02) (0.04) (0.01) (0.01) (0.02)
----- ----- ----- ----- -----
Net asset value - end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ======
Total return 3.75%+ 3.81% 1.79%+ 1.16% 1.79%
Ratios (to average net assets)/Supplemental data(S):
Expenses## 1.97%+ 1.93% 1.94%+ 2.00% 2.22%
Net investment income 3.71%+ 3.69% 1.88%+ 1.19% 1.83%
Net assets at end of period (000 omitted) $168,699 $166,519 $213,635 $155,274 $125,439
<FN>
+Annualized.
##For fiscal years ending after September 1, 1995, the Fund's expenses are calculated without reduction for fees paid indirectly.
(S)The investment adviser did not impose a portion of its management fee for the periods indicated. If this fee had been incurred
by the Fund, the net investment income per share and ratios would have been:
</FN>
<S> <C> <C> <C> <C> <C>
Net investment income $ 0.02 $ 0.04 $ 0.01 $ 0.01 $ 0.02
Ratios (to average net assets):
Expenses 2.06%+ 2.03% 2.04%+ 2.10% 2.32%
Net investment income 3.61%+ 3.59% 1.78%+ 1.09% 1.73%
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
Financial Highlights - continued
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Year Ended November 30, 1991 1990 1989 1988 1987*
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Class B
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<S> <C> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----- ----- ----- ----- -----
Net investment income(S) $ 0.04 $ 0.06 $ 0.07 $ 0.06 $ 0.04
Less distributions declared to shareholders from net
investment income (0.04) (0.06) (0.07) (0.06) (0.04)
----- ----- ----- ----- -----
Net asset value - end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ======
Total return 4.56% 6.12% 7.34% 5.85% 4.42%+
Ratios (to average net assets)/Supplemental data(S):
Expenses 2.04% 2.23% 2.24% 2.06% 2.06%+
Net investment income 4.53% 6.06% 7.10% 5.59% 5.59%+
Net assets at end of period (000 omitted) $161,040 $203,314 $146,885 $139,518 $83,845
<FN>
*For the period from the commencement of investment operations of Class B shares, December 29, 1986 to November 30, 1987.
+Annualized.
(S)The investment adviser did not impose a portion of its management fee for the periods indicated. If this fee had been incurred
by the Fund, the net investment income per share and ratios would have been:
</FN>
<S> <C> <C> <C> <C> <C>
Net investment income $ 0.04 -- -- -- --
Ratios (to average net assets):
Expenses 2.13% -- -- -- --
Net investment income 4.44% -- -- -- --
</TABLE>
See notes to financial statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(1) Business and Organization
MFS Cash Reserve Fund (the Fund) is a 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 - Money market instruments are valued at amortized cost,
which the Trustees have determined in good faith constitutes fair value. The
Fund's use of amortized cost is subject to the Fund's compliance with certain
conditions as specified under Rule 2a-7 of the Investment Company Act of 1940.
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.
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.
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 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. Distributions to shareholders are recorded on the ex-dividend date.
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 expense 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 and paid monthly at an effective annual rate of
0.55% of average daily net assets. The investment adviser did not impose a
portion of its fee, which is reflected as a preliminary reduction of expenses
in the Statement of Operations.
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. Included in Trustees' compensation is a net periodic pension expense
of $5,910 for the period ended February 29, 1996.
Distributor - 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. Payments will
commence under the distribution plan when the value of the net assets of the
Fund attributable to Class A shares first equals or exceeds $40 million.
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 $20,065
for Class B shares for the period ended February 29, 1996. Fees incurred under
the distribution plan during the period ended February 29, 1996 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 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 period ended February 29, 1996 were
$398,123 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 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 money market investments, exclusive of securities
subject to repurchase agreements, aggregated $903,572,403 and $947,031,619,
respectively.
(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, at net asset value of $1.00 per share,
were as follows:
Class A Shares
Six Months Ended Year Ended
February 29, 1996 August 31, 1995
- --------------------------------------------------------------------------
Shares sold 59,967,864 21,839,588
Shares issued to shareholders
in reinvestment of
distributions 285,340 211,125
Shares reacquired (48,134,353) (13,354,949)
----------- -----------
Net increase 12,118,851 8,695,764
=========== ===========
Class B Shares
Six Months Ended Year Ended
February 29, 1996 August 31, 1995
- --------------------------------------------------------------------------
Shares sold 493,728,045 814,926,201
Shares issued to shareholders
in reinvestment of
distributions 2,426,882 6,141,721
Shares reacquired (493,975,533) (868,183,399)
------------ ------------
Net increase (decrease) 2,179,394 (47,115,477)
============ ============
(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 period ended
February 29, 1996 was $1,075.
---------------------------------------------
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.
<PAGE>
MFS(R) CASH [DALBAR logo] -------------
RESERVE BULK RATE
FUND U.S. POSTAGE
PAID
500 Boylston Street PERMIT #55638
Boston, MA 02116 BOSTON, MA
-------------
[logo] M F S(R)
THE FIRST NAME IN MUTUAL FUNDS
MCR-3 4/96 20.5M 01/201
