<PAGE>
MFS NEW DISCOVERY FUND
Supplement dated January 1, 1998 (as revised October 1, 1998) to the
Prospectus and Statement of Additional Information of
MFS New Discovery Fund (the "Fund")
The following information should be read in conjunction with the Fund's
Prospectus and Statement of Additional Information ("SAI"), also dated January
1, 1998, and contains a description of Class I shares.
Class I shares are available for purchase only by certain investors as
described under the caption "Eligible Purchasers" below.
EXPENSE SUMMARY
Shareholder Transaction Expenses: Class I
Maximum Initial Sales Charge Imposed on Purchases of Fund
Shares (as a percentage of offering price)..................... None
Maximum Contingent Deferred Sales Charge (as a percentage
of original purchase price or redemption proceeds, as
applicable).................................................... None
Annual Operating Expenses of the Fund (as a percentage of average
net assets):
Management Fees.................................................. 0.90%
Rule 12b-1 Fees.................................................. None
Other Expenses (after expense limitation)(1)(2).................. 0.25%
Total Operating Expenses (after expense limitation)(2)........... 1.15%
......................
(1) The Fund has an expense offset arrangement which reduces the Fund's
custodian fee based upon the amount of cash maintained by the Fund with its
custodian and dividend disbursing agent, and may enter into other such
arrangements and directed brokerage arrangements (which would also have the
effect of reducing the Fund's expenses). Any such fee reductions are not
reflected under "Other Expenses."
(2) The Adviser has agreed to bear the Fund's expenses, subject to
reimbursement by the Fund, such that "Other Expenses" do not exceed 0.25%
per annum of its average daily net assets during the current fiscal year.
Otherwise, "Other Expenses" and "Total Operating Expenses" would be 1.85%
and 2.75%, respectively. See "Other Information" below.
Example of Expenses
An investor would pay the following dollar amounts of expenses on a $1,000
investment in Class I shares of the Fund, assuming (a) a 5% annual return and
(b) redemption at the end of each of the time periods indicated:
Period Class I
1 year................... $12
3 years.................. 37
The purpose of the expense table above is to assist investors in
understanding the various costs and expenses that a shareholder of the Fund will
bear directly or indirectly. A more complete description of the Fund's
management fee is set forth under the caption "Management of the Fund" in the
Prospectus.
The "Example" set forth above should not be considered a representation of
past or future expenses of the Fund; actual expenses may be greater or less than
those shown.
<PAGE>
CONDENSED FINANCIAL INFORMATION
The following information has been audited and should be read in
conjunction with the financial statements included in the Fund's Annual Report
to Shareholders which are incorporated by reference into the SAI in reliance
upon the report of the Fund's independent auditors, given upon their authority
as experts in accounting and auditing. The Fund's independent auditors are Ernst
& Young LLP.
Financial Highlights - Class I Shares
PERIOD ENDED
AUGUST 31, 1997*
Per share data (for a share outstanding throughout the period):
Net asset value - beginning of period $10.00
Income from investment operations# -
Net investment incomess. $ 1.01
Net realized and unrealized gain on investments 2.07
------
Total from investment operations $ 3.08
-------
Net asset value - end of period $13.08
------
Total return 30.80%++
Ratios (to average net assets)/Supplemental datass.:
Expenses 1.50%+
Net investment income 12.65%+
Portfolio turnover 887%
Average commission rate $ 0.0250
Net assets at end of period (000 omitted) $ 1,494
- --------------------------
* For the period from the inception of Class I shares, January 2, 1997,
through August 31, 1997.
+ Annualized.
++ Not annualized.
# Per share data are based on average shares outstanding.
## The Fund's expenses are calculated without reduction for fees paid
indirectly.
ss. The Adviser voluntarily agreed to maintain the expenses of the Fund at
not more than 1.50% of the Fund's average daily net assets. The
investment adviser, distributor and shareholder servicing agent did not
impose any of their fees for the period indicated. If these fees had not
been waived by the Fund and/or if actual expenses had been over/under
this limitation, the net investment income per share and the ratios
would have been:
Net investment income $0.92
Ratios (to average net assets):
Expenses## 2.52%+
Net investment income 11.63%+
ELIGIBLE PURCHASERS
Class I shares are available for purchase only by the following Eligible
Purchasers:
(i) certain retirement plans established for the benefit of employees of
Massachusetts Financial Services Company ("MFS"), the Fund's investment
adviser, and employees of MFS' affiliates;
(ii) any fund distributed by MFS Fund Distributors, Inc. ("MFD"), the Fund's
distributor, if the fund seeks to achieve its investment objective by
investing primarily in shares of the Fund and other funds distributed by
MFD;
(iii)any retirement plan, endowment or foundation which (a) purchases shares
directly through MFD (rather than through a third party broker or dealer or
other financial intermediary); (b) has, at the time of purchase of Class I
shares, aggregate assets of at least $100 million; and (c) invests at least
$10 million in Class I shares of the Fund either alone or in combination
with investments in Class I shares of other MFS funds distributed by MFD
(additional investments may be made in any amount); provided that MFD may
accept purchases from smaller plans, endowments or foundations or in
smaller amounts if it believes, in its sole discretion, that such entity's
<PAGE>
aggregate assets will equal or exceed $100 million, or that such entity
will make additional investments which will cause its total investment to
equal or exceed $10 million, within a reasonable period of time;
(iv) bank trust departments which initially invest, on behalf of their trust
clients, at least $100,000 in Class I shares of the Fund (additional
investments may be made in any amount); provided that MFD may accept
smaller initial purchases if it believes, in its sole discretion, that the
bank trust department will make additional investments, on behalf of its
trust clients, which will cause its total investment to equal or exceed
$100,000 within a reasonable period of time; and
(v) certain retirement plans offered, administered or sponsored by insurance
companies, provided that these plans and insurance companies meet certain
criteria established by MFD from time to time.
In no event will the Fund, MFS, MFD or any of their affiliates pay any
sales commissions or compensation to any third party in connection with the sale
of Class I shares; the payment of any such sales commission or compensation
would, under the Fund's policies, disqualify the purchaser as an eligible
investor in Class I shares.
SHARE CLASSES OFFERED BY THE FUND
Four classes of shares of the Fund currently are offered for sale, Class A
shares, Class B shares, Class C shares and Class I shares. Class I shares are
available for purchase only by Eligible Purchasers, as defined above, and are
described in this Supplement. Class A shares, Class B shares and Class C shares
are described in the Fund's Prospectus and are available for purchase by the
general public.
Class A shares are offered at net asset value plus an initial sales charge
up to a maximum of 5.75% of the offering price (or a contingent deferred sales
charge (a "CDSC") of 1.00% upon redemption during the first year in the case of
purchases of $1 million or more and certain purchases by retirement plans), and
are subject to an annual distribution fee and service fee up to a maximum of
0.35% per annum. Class B shares are offered at net asset value without an
initial sales charge but are subject to a CDSC upon redemption (declining from
4.00% during the first year to 0% after six years) and an annual distribution
fee and service fee up to a maximum of 1.00% per annum; Class B shares convert
to Class A shares approximately eight years after purchase. Class C shares are
offered at net asset value without an initial sales charge but are subject to a
1.00% CDSC upon redemption during the first year and an annual distribution fee
and service fee up to a maximum of 1.00% per annum. Class I shares are offered
at net asset value without an initial sales charge or CDSC and are not subject
to a distribution or service fee. Class C shares and Class I shares do not
convert to any other class of shares of the Fund.
OTHER INFORMATION
Eligible Purchasers may purchase Class I shares only directly through MFD.
Eligible Purchasers may exchange Class I shares of the Fund for Class I shares
of any other MFS Fund available for purchase by such Eligible Purchasers at
their net asset value (if available for sale), and may exchange Class I shares
of the Fund for shares of the MFS Money Market Fund (if available for sale), and
may redeem Class I shares of the Fund at net asset value. Distributions paid by
the Fund with respect to Class I shares generally will be greater than those
paid with respect to Class A shares, Class B shares and Class C shares because
expenses attributable to Class A shares, Class B shares and Class C shares
generally will be higher.
Subject to termination or revision at the sole discretion of MFS, MFS has
agreed to bear the Fund's expenses such that the Fund's "Other Expenses," which
are defined to include all Fund expenses except for management fees, Rule 12-b-1
fees, taxes, extraordinary expenses, brokerage and transactions costs and class
specific expenses, do not exceed 0.25% per annum of its average daily net assets
(the "Maximum Percentage"). The obligation of MFS to bear these expenses
terminates on the last day of the Fund's fiscal year in which the Fund's "Other
Expenses" are less than or equal to the Maximum Percentage. The payments made by
MFS on behalf of the Fund under this arrangement are subject to reimbursement by
the Fund to MFS, which will be accomplished by the payment of an expense
reimbursement fee by the Fund to MFS computed and paid monthly at a percentage
of its average daily net assets for its then current fiscal year, with a
limitation that immediately after such payment the Fund's "Other Expenses" will
not exceed the Maximum Percentage. This expense reimbursement by the Fund to MFS
terminates on the earlier of the date on which payments made by the Fund equal
the prior payment of such reimbursable expenses by MFS or August 31, 2006.
The date of this Supplement is January 1, 1998 (as revised October 1, 1998).
<PAGE>
MFS RESEARCH GROWTH AND INCOME FUND
Supplement dated January 1, 1998 (as revised October 1, 1998) to the
Prospectus and Statement of Additional Information of MFS Research
Growth And Income Fund (the "Fund")
The following information should be read in conjunction with the Fund's
Prospectus and Statement of Additional Information ("SAI"), also dated January
1, 1998, and contains a description of Class I shares.
Class I shares are available for purchase only by certain investors as
described under the caption "Eligible Purchasers" below.
EXPENSE SUMMARY
Shareholder Transaction Expenses: Class I
Maximum Initial Sales Charge Imposed on Purchases of Fund
Shares (as a percentage of offering price).................... None
Maximum Contingent Deferred Sales Charge (as a percentage
of original purchase price or redemption proceeds, as
applicable)................................................... None
Annual Operating Expenses of the Fund (as a percentage of average net assets):
Management Fees................................................. 0.65%
Rule 12b-1 Fees................................................. None
Other Expenses (after fee reduction)(1)(2)(3)................... 0.60%
Total Operating Expenses (after fee reduction)(3)............... 1.25%
.....................
(1) "Other Expenses" is based on Class A expenses incurred during the fiscal
period ended August 31, 1997.
(2) The Fund has an expense offset arrangement which reduces the Fund's
custodian fee based upon the amount of cash maintained by the Fund with its
custodian and dividend disbursing agent, and may enter into other such
arrangements and directed brokerage arrangements (which would also have the
effect of reducing the Fund's expenses). Any such fee reductions are not
reflected under "Other Expenses."
(3) The Adviser has agreed to bear the Fund's expenses, subject to
reimbursement by the Fund, such that "Other Expenses" do not exceed 0.60%
per annum of its average daily net assets during the current fiscal year.
Otherwise, "Other Expenses" and "Total Operating Expenses" would be 0.65%
and 1.30%, respectively. See "Other Information" below.
Example of Expenses
An investor would pay the following dollar amounts of expenses on a $1,000
investment in Class I shares of the Fund, assuming (a) a 5% annual return and
(b) redemption at the end of each of the time periods indicated:
Period Class I
1 year................... $13
3 years.................. 40
The purpose of the expense table above is to assist investors in
understanding the various costs and expenses that a shareholder of the Fund will
bear directly or indirectly. A more complete description of the Fund's
management fee is set forth under the caption "Management of the Fund" in the
Prospectus.
The "Example" set forth above should not be considered a representation of
past or future expenses of the Fund; actual expenses may be greater or less than
those shown.
<PAGE>
CONDENSED FINANCIAL INFORMATION
The following information has been audited and should be read in
conjunction with the financial statements included in the Fund's Annual Report
to Shareholders which are incorporated by reference into the SAI in reliance
upon the report of the Fund's independent auditors, given upon their authority
as experts in accounting and auditing. The Fund's independent auditors are Ernst
& Young LLP.
Financial Statements - Class I Shares
Period Ended
August 31, 1997**
Per share data (for a share outstanding throughout
each period):
Net asset value - beginning of period $ 12.01
Income from investment operations# -
Net investment incomess. $ 0.08
Net realized and unrealized gain on investments and
foreign currency transactions 2.11
Total from investment operations $ 2.19
Less distributions declared -
From net investment income (0.04)
Net asset value - end of period $ 14.16
Total return 19.01%++
Ratios (to average net assets)/Supplemental datass.:
Expenses## 1.18%+
Net investment income 0.87%+
Portfolio turnover 106%
Average commission rate $0.0423
Net assets at end of period (000 omitted) $ 825
** For the period from the inception of Class I shares, January 2, 1997,
through August 31, 1997.
+ Annualized.
++ Not Annualized.
# Per share data are based on average shares outstanding.
## The Fund's expenses are calculated without reduction for fees paid
indirectly.
ss. The investment advisor voluntarily agreed to maintain the expenses of the
Fund at not more than 1.25% of the average daily net assets. To the
extent actual expenses were over/under the limitation, the net investment
income per share and the ratios would have been:
Net investment income $ 0.08
Ratios (to average net assets):
Expenses## 1.22%+
Net investment income 0.83%+
ELIGIBLE PURCHASERS
Class I shares are available for purchase only by the following Eligible
Purchasers:
(i) certain retirement plans established for the benefit of employees of
Massachusetts Financial Services Company ("MFS"), the Fund's investment
adviser, and employees of MFS' affiliates;
(ii) any fund distributed by MFS Fund Distributors, Inc. ("MFD"), the Fund's
distributor, if the fund seeks to achieve its investment objective by
investing primarily in shares of the Fund and other funds distributed by
MFD;
(iii)any retirement plan, endowment or foundation which (a) purchases shares
directly through MFD (rather than through a third party broker or dealer or
other financial intermediary); (b) has, at the time of purchase of Class I
shares, aggregate assets of at least $100 million; and (c) invests at least
$10 million in Class I shares of the Fund either alone or in combination
with investments in Class I shares of other MFS funds distributed by MFD
(additional investments may be
<PAGE>
made in any amount); provided that MFD may accept purchases from smaller
plans, endowments or foundations or in smaller amounts if it believes, in
its sole discretion, that such entity's aggregate assets will equal or
exceed $100 million, or that such entity will make additional investments
which will cause its total investment to equal or exceed $10 million,
within a reasonable period of time;
(iv) bank trust departments which initially invest, on behalf of their trust
clients, at least $100,000 in Class I shares of the Fund (additional
investments may be made in any amount); provided that MFD may accept
smaller initial purchases if it believes, in its sole discretion, that the
bank trust department will make additional investments, on behalf of its
trust clients, which will cause its total investment to equal or exceed
$100,000 within a reasonable period of time; and
(v) certain retirement plans offered, administered or sponsored by insurance
companies, provided that these plans and insurance companies meet certain
criteria established by MFD from time to time.
In no event will the Fund, MFS, MFD or any of their affiliates pay any
sales commissions or compensation to any third party in connection with the sale
of Class I shares; the payment of any such sales commission or compensation
would, under the Fund's policies, disqualify the purchaser as an eligible
investor of Class I shares.
SHARE CLASSES OFFERED BY THE FUND
Four classes of shares of the Fund currently are offered for sale, Class A
shares, Class B shares, Class C shares and Class I shares. Class I shares are
available for purchase only by Eligible Purchasers, as defined above, and are
described in this Supplement. Class A shares, Class B shares and Class C shares
are described in the Fund's Prospectus and are available for purchase by the
general public.
Class A shares are offered at net asset value plus an initial sales charge
up to a maximum of 5.75% of the offering price (or a contingent deferred sales
charge (a "CDSC") of 1.00% upon redemption during the first year in the case of
purchases of $1 million or more and certain purchases by retirement plans), and
are subject to an annual distribution fee and service fee up to a maximum of
0.35% per annum. Class B shares are offered at net asset value without an
initial sales charge but are subject to a CDSC upon redemption (declining from
4.00% during the first year to 0% after six years) and an annual distribution
fee and service fee up to a maximum of 1.00% per annum; Class B shares convert
to Class A shares approximately eight years after purchase. Class C shares are
offered at net asset value without an initial sales charge but are subject to a
1.00% CDSC upon redemption during the first year and an annual distribution fee
and service fee up to a maximum of 1.00% per annum. Class I shares are offered
at net asset value without an initial sales charge or CDSC and are not subject
to a distribution or service fee. Class C shares and Class I shares do not
convert to any other class of shares of the Fund.
OTHER INFORMATION
Eligible Purchasers may purchase Class I shares only directly through MFD.
Eligible Purchasers may exchange Class I shares of the Fund for Class I shares
of any other MFS Fund available for purchase by such Eligible Purchasers at
their net asset value (if available for sale), and may exchange Class I shares
of the Fund for shares of the MFS Money Market Fund (if available for sale), and
may redeem Class I shares of the Fund at net asset value. Distributions paid by
the Fund with respect to Class I shares generally will be greater than those
paid with respect to Class A shares, Class B shares and Class C shares because
expenses attributable to Class A shares, Class B shares and Class C shares
generally will be higher.
Subject to termination or revision at the sole discretion of MFS, MFS has
agreed to bear the Fund's expenses such that the Fund's "Other Expenses," which
are defined to include all Fund expenses except for management fees, Rule 12b-1
fees, taxes, extraordinary expenses, brokerage and transaction costs and class
specific expenses, do not exceed 0.60% per annum of its average daily net assets
(the "Maximum Percentage"). The obligation of MFS to bear these expenses
terminates on the last day of the Fund's fiscal year in which the Fund's "Other
Expenses" are less than or equal to the Maximum Percentage. The payments made by
MFS on behalf of the Fund under this arrangement are subject to reimbursement by
the Fund to MFS, which will be accomplished by the payment of an expense
reimbursement fee by the Fund to MFS computed and paid monthly at a percentage
of its average daily net assets for its then current fiscal year, with a
limitation that immediately after such payment the Fund's "Other Expenses" will
not exceed the Maximum Percentage. This expense reimbursement by the
<PAGE>
Fund to MFS terminates on the earlier of the date on which payments made by the
Fund equal the prior payment of such reimbursable expenses by MFS or August 31,
2006.
The date of this Supplement is January 1, 1998 (as revised October 1, 1998).
<PAGE>
MFS EQUITY INCOME FUND
Supplement dated January 1, 1998 (as revised October 1, 1998) to the
Prospectus and Statement of Additional Information of
MFS Equity Income Fund (the "Fund")
The following information should be read in conjunction with the Fund's
Prospectus and Statement of Additional Information ("SAI"), also dated January
1, 1998, and contains a description of Class I shares.
Class I shares are available for purchase only by certain investors as
described under the caption "Eligible Purchasers" below.
EXPENSE SUMMARY
Shareholder Transaction Expenses: Class I
Maximum Initial Sales Charge Imposed on Purchases of Fund
Shares (as a percentage of offering price)..................... None
Maximum Contingent Deferred Sales Charge (as a percentage
of original purchase price or redemption proceeds, as
applicable).................................................... None
Annual Operating Expenses of the Fund (as a percentage of average
net assets):
Management Fees.................................................. 0.60%
Rule 12b-1 Fees.................................................. None
Other Expenses (after expense limitation)(1)(2).................. 0.40%
Total Operating Expenses (after expense limitation)(2)........... 1.00%
........................
(1) The Fund has an expense offset arrangement which reduces the Fund's
custodian fee based upon the amount of cash maintained by the Fund with its
custodian and dividend disbursing agent, and may enter into other such
arrangements and directed brokerage arrangements (which would also have the
effect of reducing the Fund's expenses). Any such fee reductions are not
reflected under "Other Expenses."
(2) The Adviser has agreed to bear the Fund's expenses, subject to
reimbursement by the Fund, such that "Other Expenses" do not exceed 0.40%
per annum of its average daily net assets during the current fiscal year.
Otherwise, "Other Expenses" and "Total Operating Expenses" would be 2.15%
and 2.75%, respectively. See "Other Information" below.
Example of Expenses
An investor would pay the following dollar amounts of expenses on a $1,000
investment in Class I shares of the Fund, assuming (a) a 5% annual return and
(b) redemption at the end of each of the time periods indicated:
Period Class I
1 year............................... $10
3 years.............................. 32
The purpose of the expense table above is to assist investors in
understanding the various costs and expenses that a shareholder of the Fund will
bear directly or indirectly. A more complete description of the Fund's
management fee is set forth under the caption "Management of the Fund" in the
Prospectus.
The "Example" set forth above should not be considered a representation of
past or future expenses of the Fund; actual expenses may be greater or less than
those shown.
<PAGE>
CONDENSED FINANCIAL INFORMATION
The following information has been audited and should be read in
conjunction with the financial statements included in the Fund's Annual Report
to Shareholders which are incorporated by reference into the SAI in reliance
upon the report of the Fund's independent auditors, given upon their authority
as experts in accounting and auditing. The Fund's independent auditors are Ernst
& Young LLP.
Financial Highlights - Class I Shares
PERIOD ENDED
AUGUST 31, 1997*
Per share data (for a share outstanding throughout the period):
Net asset value - beginning of period $12.20
Income from investment operations# -
Net investment incomess. $ 0.15
Net realized and unrealized gain on investments
and foreign currency transactions 2.46
------
Total from investment operations $ 2.61
-------
Net asset value - end of period $14.81
------
Total return 21.39%++
Ratios (to average net assets)/Supplemental datass.:
Expenses 1.50%+
Net investment income 1.51%+
Portfolio turnover 118%
Average commission rate $ 0.0393
Net assets at end of period (000 omitted) $ 964
- --------------------------
* For the period from the inception of Class I, January 2, 1997, through
August 31, 1997.
+ Annualized.
++ Not annualized.
# Per share data are based on average shares outstanding.
## The Fund's expenses are calculated without reduction for fees paid
indirectly.
ss. The Adviser voluntarily agreed to maintain the expenses of the Fund at
not more than 1.50% of the Fund's average daily net assets. The
investment adviser, distributor and shareholder servicing agent did not
impose any of their fees for the period indicated. If these fees had not
been waived by the Fund and/or if actual expenses had been over/under
this limitation, the net investment income per share and the ratios
would have been:
Net investment income $0.03 Ratios (to average net assets):
Expenses## 2.67%+
Net investment income 0.35%+
ELIGIBLE PURCHASERS
Class I shares are available for purchase only by the following Eligible
Purchasers:
(i) certain retirement plans established for the benefit of employees of
Massachusetts Financial Services Company ("MFS"), the Fund's investment
adviser, and employees of MFS' affiliates;
<PAGE>
(ii) any fund distributed by MFS Fund Distributors, Inc. ("MFD"), the Fund's
distributor, if the fund seeks to achieve its investment objective by
investing primarily in shares of the Fund and other funds distributed by
MFD;
(iii)any retirement plan, endowment or foundation which (a) purchases shares
directly through MFD (rather than through a third party broker or dealer or
other financial intermediary); (b) has, at the time of purchase of Class I
shares, aggregate assets of at least $100 million; and (c) invests at least
$10 million in Class I shares of the Fund either alone or in combination
with investments in Class I shares of other MFS funds distributed by MFD
(additional investments may be made in any amount); provided that MFD may
accept purchases from smaller plans, endowments or foundations or in
smaller amounts if it believes, in its sole discretion, that such entity's
aggregate assets will equal or exceed $100 million, or that such entity
will make additional investments which will cause its total investment to
equal or exceed $10 million, within a reasonable period of time;
(iv) bank trust departments or law firms acting as trustee or manager for trust
accounts which initially invest, on behalf of their trust clients, at least
$100,000 in Class I shares of the Fund (additional investments may be made
in any amount); provided that MFD may accept smaller initial purchases if
it believes, in its sole discretion, that the bank trust department or law
firm will make additional investments, on behalf of its trust clients,
which will cause its total investment to equal or exceed $100,000 within a
reasonable period of time; and
(v) certain retirement plans offered, administered or sponsored by insurance
companies, provided that these plans and insurance companies meet certain
criteria established by MFD from time to time.
In no event will the Fund, MFS, MFD or any of their affiliates pay any
sales commissions or compensation to any third party in connection with the sale
of Class I shares; the payment of any such sales commission or compensation
would, under the Fund's policies, disqualify the purchaser as an eligible
investor in Class I shares.
SHARE CLASSES OFFERED BY THE FUND
Four classes of shares of the Fund currently are offered for sale, Class A
shares, Class B shares, Class C shares and Class I shares. Class I shares are
available for purchase only by Eligible Purchasers, as defined above, and are
described in this Supplement. Class A shares, Class B shares and Class C shares
are described in the Fund's Prospectus and are available for purchase by the
general public.
Class A shares are offered at net asset value plus an initial sales charge
up to a maximum of 5.75% of the offering price (or a contingent deferred sales
charge (a "CDSC") of 1.00% upon redemption during the first year in the case of
purchases of $1 million or more and certain purchases by retirement plans), and
are subject to an annual distribution fee and service fee up to a maximum of
0.35% per annum. Class B shares are offered at net asset value without an
initial sales charge but are subject to a CDSC upon redemption (declining from
4.00% during the first year to 0% after six years) and an annual distribution
fee and service fee up to a maximum of 1.00% per annum; Class B shares convert
to Class A shares approximately eight years after purchase. Class C shares are
offered at net asset value without an initial sales charge but are subject to a
1.00% CDSC upon redemption during the first year and an annual distribution fee
and service fee up to a maximum of 1.00% per annum. Class I shares are offered
at net asset value without an initial sales charge or CDSC and are not subject
to a distribution or service fee. Class C shares and Class I shares do not
convert to any other class of shares of the Fund.
OTHER INFORMATION
Eligible Purchasers may purchase Class I shares only directly through MFD.
Eligible Purchasers may exchange Class I shares of the Fund for Class I shares
of any other MFS Fund available for purchase by such Eligible Purchasers at
their net asset value (if available for sale), and may exchange Class I shares
of the Fund for shares of the MFS Money Market Fund (if
<PAGE>
available for sale), and may redeem Class I shares of the Fund at net asset
value. Distributions paid by the Fund with respect to Class I shares generally
will be greater than those paid with respect to Class A shares, Class B shares
and Class C shares because expenses attributable to Class A shares, Class B
shares and Class C shares generally will be higher.
Subject to termination or revision at the sole discretion of MFS, MFS has
agreed to bear the Fund's expenses such that the Fund's "Other Expenses," which
are defined to include all Fund expenses except for management fees, Rule 12-b-1
fees, taxes, extraordinary expenses, brokerage and transactions costs and class
specific expenses, do not exceed 0.40% per annum of its average daily net assets
(the "Maximum Percentage"). The obligation of MFS to bear these expenses
terminates on the last day of the Fund's fiscal year in which the Fund's "Other
Expenses" are less than or equal to the Maximum Percentage. The payments made by
MFS on behalf of the Fund under this arrangement are subject to reimbursement by
the Fund to MFS, which will be accomplished by the payment of an expense
reimbursement fee by the Fund to MFS computed and paid monthly at a percentage
of its average daily net assets for its then current fiscal year, with a
limitation that immediately after such payment the Fund's "Other Expenses" will
not exceed the Maximum Percentage. This expense reimbursement by the Fund to MFS
terminates on the earlier of the date on which payments made by the Fund equal
the prior payment of such reimbursable expenses by MFS or August 31, 2006.
The date of this Supplement is January 1, 1998 (as revised October 1, 1998).
<PAGE>
MFS RESEARCH INTERNATIONAL FUND
Supplement dated January 1, 1998 (as revised October 1, 1998) to the
Prospectus and Statement of Additional Information of
MFS Research International Fund (the "Fund")
The following information should be read in conjunction with the Fund's
Prospectus and Statement of Additional Information ("SAI"), also dated January
1, 1998, and contains a description of Class I shares.
Class I shares are available for purchase only by certain investors as
described under the caption "Eligible Purchasers" below.
EXPENSE SUMMARY
Shareholder Transaction Expenses: Class I
Maximum Initial Sales Charge Imposed on Purchases of Fund
Shares (as a percentage of offering price).................... None
Maximum Contingent Deferred Sales Charge (as a percentage
of original purchase price or redemption proceeds, as
applicable)................................................... None
Annual Operating Expenses of the Fund (as a percentage of average
net assets):
Management Fees................................................. 1.00%
Rule 12b-1 Fees................................................. None
Other Expenses (after expense limitation)(1)((2)................ 0.40%
Total Operating Expenses (after expense limitation)(2).......... 1.40%
......................
(1) The Fund has an expense offset arrangement which reduces the Fund's
custodian fee based upon the amount of cash maintained by the Fund with its
custodian and dividend disbursing agent, and may enter into other such
arrangements and directed brokerage arrangements (which would also have the
effect of reducing the Fund's expenses). Any such fee reductions are not
reflected under "Other Expenses."
(2) The Adviser has agreed to bear the Fund's expenses, subject to
reimbursement by the Fund, such that "Other Expenses" do not exceed 0.40%
per annum of its average daily net assets during the current fiscal year.
Otherwise, "Other Expenses" and "Total Operating Expenses" would be 1.41%
and 2.81%, respectively. See "Other Information" below.
Example of Expenses
An investor would pay the following dollar amounts of expenses on a $1,000
investment in Class I shares of the Fund, assuming (a) a 5% annual return and
(b) redemption at the end of each of the time periods indicated:
Period Class I
1 year................ $14
3 years............... 44
The purpose of the expense table above is to assist investors in
understanding the various costs and expenses that a shareholder of the Fund will
bear directly or indirectly. A more complete description of the Fund's
management fee is set forth under the caption "Management of the Fund" in the
Prospectus.
The "Example" set forth above should not be considered a representation of
past or future expenses of the Fund; actual expenses may be greater or less than
those shown.
CONDENSED FINANCIAL INFORMATION
The following information has been audited and should be read in
conjunction with the financial statements included in the Fund's Annual Report
to Shareholders which are incorporated by reference into the SAI in reliance
upon the report of the Fund's independent auditors, given upon their authority
as experts in accounting and auditing. The Fund's independent auditors are Ernst
& Young LLP.
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Financial Highlights - Class I Shares
PERIOD ENDED
AUGUST 31, 1997*
Per share data (for a share outstanding throughout the period):
Net asset value - beginning of period $10.00
Income from investment operations# -
Net investment income** $ 0.07
Net realized and unrealized gain on investments 0.88
------
Total from investment operations $ 0.95
-------
Net asset value - end of period $10.95
------
Total return 9.60%^^
Ratios (to average net assets)/Supplemental data**:
Expenses## 1.68%^
Net investment income 0.85%^
Portfolio turnover 137%
Average commission rate $ 0.0198
Net assets at end of period (000 omitted) $ 1,022
- --------------------------
* For the period from the inception of Class I shares of the Fund, January
2, 1997, through August 31, 1997.
^ Annualized.
^^ Not annualized.
# Per share data are based on average shares outstanding.
## The Fund's expenses are calculated without reduction for fees paid
indirectly.
** The Adviser voluntarily agreed to maintain the expenses of the Fund at
not more than 1.75% of the Fund's average daily net assets. The
investment adviser, distributor and shareholder servicing agent did not
impose any of their fees for the period indicated. If these fees had not
been waived and/or if actual expenses had been over/under this
limitation, the net investment income per share and the ratios would
have been:
Net investment income $ --
Ratios (to average net assets):
Expenses## 2.81%^
Net investment income (0.28)%^
ELIGIBLE PURCHASERS
Class I shares are available for purchase only by the following Eligible
Purchasers:
(i) certain retirement plans established for the benefit of employees of
Massachusetts Financial Services Company ("MFS"), the Fund's investment
adviser, and employees of MFS' affiliates;
(ii) any fund distributed by MFS Fund Distributors, Inc. ("MFD"), the Fund's
distributor, if the fund seeks to achieve its investment objective by
investing primarily in shares of the Fund and other funds distributed by
MFD;
(iii)any retirement plan, endowment or foundation which (a) purchases shares
directly through MFD (rather than through a third party broker or dealer or
other financial intermediary); (b) has, at the time of purchase of Class I
shares, aggregate assets of at least $100 million; and (c) invests at least
$10 million in Class I shares of the Fund either alone or in combination
with investments in Class I shares of other MFS funds distributed by MFD
(additional investments may be made in any amount); provided that MFD may
accept purchases from smaller plans, endowments or foundations or in
smaller amounts if it believes, in its sole discretion, that such entity's
aggregate assets will equal or exceed $100 million, or that such entity
will make additional investments which will cause its total investment to
equal or exceed $10 million, within a reasonable period of time;
(iv) bank trust departments which initially invest, on behalf of their trust
clients, at least $100,000 in Class I shares of the Fund (additional
investments may be made in any amount); provided that MFD may accept
smaller initial purchases if it believes, in its sole discretion,
<PAGE>
that the bank trust department will make additional investments, on behalf
of its trust clients, which will cause its total investment to equal or
exceed $100,000 within a reasonable period of time; and
(v) certain retirement plans offered, administered or sponsored by insurance
companies, provided that these plans and insurance companies meet certain
criteria established by MFD from time to time.
In no event will the Fund, MFS, MFD or any of their affiliates pay any
sales commissions or compensation to any third party in connection with the sale
of Class I shares; the payment of any such sales commission or compensation
would, under the Fund's policies, disqualify the purchaser as an eligible
investor in Class I shares.
SHARE CLASSES OFFERED BY THE FUND
Four classes of shares of the Fund currently are offered for sale, Class A
shares, Class B shares, Class C shares and Class I shares. Class I shares are
available for purchase only by Eligible Purchasers, as defined above, and are
described in this Supplement. Class A shares, Class B shares and Class C shares
are described in the Fund's Prospectus and are available for purchase by the
general public.
Class A shares are offered at net asset value plus an initial sales charge
up to a maximum of 5.75% of the offering price (or a contingent deferred sales
charge (a "CDSC") of 1.00% upon redemption during the first year in the case of
purchases of $1 million or more and certain purchases by retirement plans), and
are subject to an annual distribution fee and service fee up to a maximum of
0.35% per annum. Class B shares are offered at net asset value without an
initial sales charge but are subject to a CDSC upon redemption (declining from
4.00% during the first year to 0% after six years) and an annual distribution
fee and service fee up to a maximum of 1.00% per annum; Class B shares convert
to Class A shares approximately eight years after purchase. Class C shares are
offered at net asset value without an initial sales charge but are subject to a
1.00% CDSC upon redemption during the first year and an annual distribution fee
and service fee up to a maximum of 1.00% per annum. Class I shares are offered
at net asset value without an initial sales charge or CDSC and are not subject
to a distribution or service fee. Class C shares and Class I shares do not
convert to any other class of shares of the Fund.
OTHER INFORMATION
Eligible Purchasers may purchase Class I shares only directly through MFD.
Eligible Purchasers may exchange Class I shares of the Fund for Class I shares
of any other MFS Fund available for purchase by such Eligible Purchasers at
their net asset value (if available for sale), and may exchange Class I shares
of the Fund for shares of the MFS Money Market Fund (if available for sale), and
may redeem Class I shares of the Fund at net asset value. Distributions paid by
the Fund with respect to Class I shares generally will be greater than those
paid with respect to Class A shares, Class B shares and Class C shares because
expenses attributable to Class A shares, Class B shares and Class C shares
generally will be higher.
Subject to termination or revision at the sole discretion of MFS, MFS has
agreed to bear the Fund's expenses such that the Fund's "Other Expenses," which
are defined to include all Fund expenses except for management fees, Rule 12b-1
fees, taxes, extraordinary expenses, brokerage and transaction costs and class
specific expenses, do not exceed 0.40% per annum of its average daily net assets
(the "Maximum Percentage"). The obligation of MFS to bear these expenses
terminates on the last day of the Fund's fiscal year in which the Fund's "Other
Expenses" are less than or equal to the Maximum Percentage. The payments made by
MFS on behalf of the Fund under this arrangement are subject to reimbursement by
the Fund to MFS, which will be accomplished by the payment of an expense
reimbursement fee by the Fund to MFS computed and paid monthly at a percentage
of its average daily net assets for its then current fiscal year, with a
limitation that immediately after such payment the Fund's "Other Expenses" will
not exceed the Maximum Percentage. This expense reimbursement by the Fund to MFS
terminates on the earlier of the date on which payments made by the Fund equal
the prior payment of such reimbursable expenses by MFS or August 31, 2006.
The date of this Supplement is January 1, 1998 (as revised October 1, 1998).
<PAGE>
MFS STRATEGIC GROWTH FUND
Supplement dated January 1, 1998 (as revised October 1, 1998) to the Prospectus
and Statement of Additional Information of MFS Strategic Growth Fund
(the "Fund")
The following information should be read in conjunction with the Fund's
Prospectus and Statement of Additional Information ("SAI"), also dated January
1, 1998 and contains a description of Class I shares.
Class I shares are available for purchase only by certain investors as
described under the caption "Eligible Purchasers" below.
EXPENSE SUMMARY
Shareholder Transaction Expenses: Class I
Maximum Initial Sales Charge Imposed on Purchases of Fund
Shares (as a percentage of offering price)................... None
Maximum Contingent Deferred Sales Charge (as a percentage
of original purchase price or redemption proceeds, as
applicable).................................................. None
Annual Operating Expenses of the Fund (as a percentage of average
net assets):
Management Fees................................................ 0.75%
Rule 12b-1 Fees................................................ None
Other Expenses (after expense limitation)(1)(2)(3)............. 0.50%
Total Operating Expenses (after expense limitation)(3)......... 1.25%
....................
(1) "Other Expenses" is based on Class A expenses incurred during the fiscal
year ended August 31, 1997.
(2) The Fund has an expense offset arrangement which reduces the Fund's
custodian fee based upon the amount of cash maintained by the Fund with its
custodian and dividend disbursing agent, and may enter into other such
arrangements and directed brokerage arrangements (which would also have the
effect of reducing the Fund's expenses). Any such fee reductions are not
reflected under "Other Expenses."
(3) The Adviser has agreed to bear the Fund's expenses, subject to
reimbursement by the Fund, such that "Other Expenses" do not exceed 0.50%
per annum of its average daily net assets during the current fiscal year.
Otherwise, "Other Expenses" and "Total Operating Expenses" would be 0.76%
and 1.51%, respectively. See "Other Information" below.
Example of Expenses
An investor would pay the following dollar amounts of expenses on a $1,000
investment in Class I shares of the Fund, assuming (a) a 5% annual return and
(b) redemption at the end of each of the time periods indicated:
Period Class I
1 year...................... $13
3 years..................... 40
The purpose of the expense table above is to assist investors in
understanding the various costs and expenses that a shareholder of the Fund will
bear directly or indirectly. A more complete description of the Fund's
management fee is set forth under the caption "Management of the Fund" in the
Prospectus.
The "Example" set forth above should not be considered a representation of
past or future expenses of the Fund; actual expenses may be greater or less than
those shown.
CONDENSED FINANCIAL INFORMATION
The following information has been audited and should be read in
conjunction with the financial statements included in the Fund's Annual Report
to Shareholders which are incorporated by reference into the SAI in reliance
upon the report of the Fund's independent auditors, given upon their authority
as experts in accounting and auditing. The Fund's independent auditors are Ernst
& Young LLP.
<PAGE>
Financial Statements - Class I Shares
Period Ended
August 31, 1997*
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $12.08
Income from investment operations#
Net investment income lossss. $(0.04)
Net realized and unrealized gain on investments and
foreign currency transactions 4.76
--------
Total from investment operations $ 4.72
-------
Net asset value - end of period $16.80
-------
Total return 39.24%++
Ratios (to average net assets)/Supplemental datass.:
Expenses## 0.94%+
Net investment loss (0.40)%+
Portfolio turnover 82%
Average commission rate $0.0527
Net assets at end of period (000 omitted) $13,462
* For the period from the inception of Class I shares, January 2, 1997,
through August 31, 1997.
+ Annualized.
++ Not Annualized.
# Per share data are based on average shares outstanding.
## The Fund's expenses are calculated without reduction for fees paid
indirectly.
ss. Subject to reimbursement by the Fund, the Adviser voluntarily agreed to
maintain expenses of the Fund, exclusive of management, distribution, and
service fees, at not more than 0.50% of average daily net assets reduced
from 1.50%, (based on operating expenses) effective April 14, 1997. To
the extent actual expenses were over/under this limitation, the net
investment income per share and the ratios would have been:
Net investment loss $ (0.06)
Ratios (to average net assets):
Expenses 1.14%+
Net investment loss (0.60)%+
ELIGIBLE PURCHASERS
Class I shares are available for purchase only by the following Eligible
Purchasers:
(i) certain retirement plans established for the benefit of employees of
Massachusetts Financial Services Company ("MFS"), the Fund's investment
adviser, and employees of MFS' affiliates;
(ii) any fund distributed by MFS Fund Distributors, Inc. ("MFD"), the Fund's
distributor, if the fund seeks to achieve its investment objective by
investing primarily in shares of the Fund and other funds distributed by
MFD;
(iii)any retirement plan, endowment or foundation which (a) purchases shares
directly through MFD (rather than through a third party broker or dealer or
other financial intermediary); (b) has, at the time of purchase of Class I
shares, aggregate assets of at least $100 million; and (c) invests at least
$10 million in Class I shares of the Fund either alone or in combination
with investments in Class I shares of other MFS funds distributed by MFD
(additional investments may be made in any amount); provided that MFD may
accept purchases from smaller plans, endowments or foundations or in
smaller amounts if it believes, in its sole discretion, that such entity's
aggregate assets will equal or exceed $100 million, or that such entity
will make additional investments which will cause its total investment to
equal or exceed $10 million, within a reasonable period of time;
(iv) bank trust departments which initially invest, on behalf of their trust
clients, at least $100,000 in Class I shares of the Fund (additional
investments may be made in any amount); provided that MFD may accept
smaller initial purchases if it believes, in its sole discretion,
<PAGE>
that the bank trust department will make additional investments, on behalf
of its trust clients, which will cause its total investment to equal or
exceed $100,000 within a reasonable period of time; and
(v) certain retirement plans offered, administered or sponsored by insurance
companies, provided that these plans and insurance companies meet certain
criteria established by MFD from time to time.
In no event will the Fund, MFS, MFD or any of their affiliates pay any
sales commissions or compensation to any third party in connection with the sale
of Class I shares; the payment of any such sales commission or compensation
would, under the Fund's policies, disqualify the purchaser as an eligible
investor in Class I shares.
SHARE CLASSES OFFERED BY THE FUND
Four classes of shares of the Fund currently are offered for sale, Class A
shares, Class B shares, Class C shares and Class I shares. Class I shares are
available for purchase only by Eligible Purchasers, as defined above, and are
described in this Supplement. Class A shares, Class B shares and Class C shares
are described in the Fund's Prospectus and are available for purchase by the
general public.
Class A shares are offered at net asset value plus an initial sales charge
up to a maximum of 5.75% of the offering price (or a contingent deferred sales
charge (a "CDSC") of 1.00% upon redemption during the first year in the case of
purchases of $1 million or more and certain purchases by retirement plans), and
are subject to an annual distribution fee and service fee up to a maximum of
0.35% per annum. Class B shares are offered at net asset value without an
initial sales charge but are subject to a CDSC upon redemption (declining from
4.00% during the first year to 0% after six years) and an annual distribution
fee and service fee up to a maximum of 1.00% per annum; Class B shares convert
to Class A shares approximately eight years after purchase. Class C shares are
offered at net asset value without an initial sales charge but are subject to a
1.00% CDSC upon redemption during the first year and an annual distribution fee
and service fee up to a maximum of 1.00% per annum. Class I shares are offered
at net asset value without an initial sales charge or CDSC and are not subject
to a distribution or service fee. Class C shares and Class I shares do not
convert to any other class of shares of the Fund.
OTHER INFORMATION
Eligible Purchasers may purchase Class I shares only directly through MFD.
Eligible Purchasers may exchange Class I shares of the Fund for Class I shares
of any other MFS Fund available for purchase by such Eligible Purchasers at
their net asset value (if available for sale), and may exchange Class I shares
of the Fund for shares of the MFS Money Market Fund (if available for sale), and
may redeem Class I shares of the Fund at net asset value. Distributions paid by
the Fund with respect to Class I shares generally will be greater than those
paid with respect to Class A shares, Class B shares and Class C shares because
expenses attributable to Class A shares, Class B shares and Class C shares
generally will be higher.
Subject to termination or revision at the sole discretion of MFS, MFS has
agreed to bear the Fund's expenses such that the Fund's "Other Expenses," which
are defined to include all Fund expenses except for management fees, Rule 12-b-1
fees, taxes, extraordinary expenses, brokerage and transactions costs and class
specific expenses, do not exceed 0.50% per annum of its average daily net assets
(the "Maximum Percentage"). The obligation of MFS to bear these expenses
terminates on the last day of the Fund's fiscal year in which the Fund's "Other
Expenses" are less than or equal to the Maximum Percentage. The payments made by
MFS on behalf of the Fund under this arrangement are subject to reimbursement by
the Fund to MFS, which will be accomplished by the payment of an expense
reimbursement fee by the Fund to MFS computed and paid monthly at a percentage
of its average daily net assets for its then current fiscal year, with a
limitation that immediately after such payment the Fund's "Other Expenses" will
not exceed the Maximum Percentage. This expense reimbursement by the Fund to MFS
terminates on the earlier of the date on which payments made by the Fund equal
the prior payment of such reimbursable expenses by MFS or April 10, 2000.
The date of this Supplement is January 1, 1998 (as revised October 1, 1998).
