<PAGE>
MFS(R) STRATEGIC GROWTH FUND
Supplement dated November 17, 1998 (as revised October 1, 1999)
to the Current Prospectus
This Supplement describes the fund's class I shares, and it supplements
certain information in the fund's Prospectus dated November 17, 1998. The
caption headings used in this Supplement correspond with the caption headings
used in the Prospectus.
You may purchase class I shares only if you are an eligible institutional
investor, as described under the caption "Description of Share Classes" below.
1. RISK RETURN SUMMARY
Performance Table. The "Performance Table" is supplemented as follows:
Average Annual Total Returns as of December 31, 1997
1 Year Life*
------- ------
Class I shares 52.18% 46.38%
Standard & Poor's 500 Composite Index**+ 33.36% 28.10%
- -----------------
* For the period from the commencement of the Fund's investment operations on
January 2, 1996, through December 31, 1997.
** The Standard & Poor's 500 Composite Index is a market capitalization
weighted price index composed of 500 widely held companies.
+ Source: CDA/Wisenberger
The fund initially offered class A shares on January 2, 1996 and class I
shares on January 2, 1997. Class I share performance includes the performance of
the fund's class A shares for periods prior to the offering of class I shares.
Class I share performance generally would have been higher than class A share
performance had class I shares been offered for the entire period, because
operating expenses (e.g., distribution and service fees) attributable to class I
shares are lower than those of class A shares. Class I share performance has
been adjusted to take into account the fact that class I shares have no initial
sales charge.
2. EXPENSE SUMMARY
Expense Table. The "Expense Table" is supplemented as follows:
Annual Fund Operating Expenses (expenses that are deducted from fund
assets)
Management Fees......................................... 0.75%
Distribution and Service (12b-1) Fees................... 0.00%
Other Expenses(1)....................................... 0.33%
-----
Total Annual Fund Operating Expenses.................... 1.08%
- -----------------
(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. The fund may enter into other
similar arrangements and directed brokerage arrangements, which would also
have the effect of reducing the fund's expenses. "Other Expenses" do not
take into account these expense reductions, and therefore do not represent
the actual expenses of the fund.
1
<PAGE>
Example of Expenses. The "Example of Expenses" table is supplemented as
follows:
Share Class Year 1 Year 3 Year 5 Year 10
----------- ------ ------ ------ -------
Class I shares $110 $343 $595 $1,317
3. DESCRIPTIONS OF SHARE CLASSES
The "Description of Share Classes" is supplemented as follows:
If you are an eligible institutional investor (as described below), you may
purchase class I shares at net asset value without an initial sales charge or
CDSC upon redemption. Class I shares do not have annual distribution and service
fees, and do not convert to any other class of shares of the fund.
The following eligible institutional investors may purchase class I shares:
o certain retirement plans established for the benefit of employees of
MFS and employees of MFS' affiliates;
o any fund distributed by MFS, if the fund seeks to achieve its
investment objective by investing primarily in shares of the fund and
other MFS funds;
o any retirement plan, endowment or foundation which:
purchases shares directly through MFD (rather than through a
third party broker or dealer or other financial adviser);
has, at the time of purchase of class I shares, aggregate assets
of at least $100 million; and
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 (additional investments may be made in any
amount).
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;
o bank trust departments or law firms acting as trustee or manager for
trust accounts which, on behalf of their clients (i) initially invest
at least $100,000 in class I shares of the fund or (ii) have, at the
time of purchase of class I shares, aggregate assets of at least $10
million invested in class I shares of the fund either alone or in
combination with investments in class I shares of other MFS Funds. MFD
may accept purchases that do not meet these dollar qualification
requirements if it believes, in its sole discretion, that these
requirements will be met within a reasonable period of time.
Additional investments may be made in any amount; and
o 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.
2
<PAGE>
4. HOW TO PURCHASE, EXCHANGE AND REDEEM SHARES
The discussion of "How to Purchase, Exchange and Redeem Shares" is
supplemented as follows:
You may purchase, redeem and exchange class I shares only through your MFD
representative or by contacting MFSC (see the back cover of the Prospectus for
address and phone number). You may exchange your class I shares for class I
shares of another MFS Fund (if you are eligible to purchase them) and for shares
of the MFS Money Market Fund at net asset value.
5. FINANCIAL HIGHLIGHTS
The "Financial Highlights" table is supplemented as follows:
Financial Statements - Class I Shares
<TABLE>
<CAPTION>
<S> <C> <C>
Year Ended Period Ended
August 31, 1998 August 31, 1997*
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $16.80 $12.08
------ ------
Income from Investment Operations# -
Net investment income lossss. $(0.08) $(0.04)
Net realized and unrealized gain on investments and foreign
currency transactions 2.31 4.76
------ ------
Total from investment operations $ 2.23 $ 4.72
------ ------
Less distributions declared to shareholders from net realized gain on
investments and foreign currency transactions $(0.18) --
Net asset value - end of period $18.85 $16.80
====== ======
Total return 13.32% 39.24%++
Ratios (to average net assets)/Supplemental datass. -
Expenses## 1.08% 0.94%+
Net investment loss (0.37)% (0.40)%+
Portfolio turnover 56% 82%
Net assets at end of period (000 omitted) $18,335 $13,462
</TABLE>
- -----------------
* 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 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. The fund's expenses are calculated
without reduction for this expense offset arrangement.
ss. Subject to reimbursement by the Fund, the Adviser voluntarily agreed to
maintain expenses of the fund, exclusive of management fees, at not more
than 0.50% per annum of average daily net effective April 14, 1997 through
August 31, 1997. To the extent actual expenses were over/under this
limitation, the net investment income per share and the ratios would have
been:
<TABLE>
<CAPTION>
<S> <C> <C>
Net investment loss $- $(0.06)
Ratios (to average net assets):
Expenses - 1.14%+
Net Investment loss - (0.60)%+
</TABLE>
The date of this Supplement is November 17, 1998 (as revised October 1, 1999).
3
<PAGE>
MFS RESEARCH GROWTH AND INCOME FUND
Supplement dated January 1, 1999 (as revised October 1, 1999)
Prospectus and Statement of Additional Information
The following information should be read in conjunction with the Fund's
Prospectus and Statement of Additional Information ("SAI"), also dated January
1, 1999, 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
<TABLE>
<CAPTION>
<S> <C>
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)............................................. 0.39%
----
Total Operating Expenses (after fee reduction)......................................... 1.04%
</TABLE>
- -----------------
(1) "Other Expenses" is based on Class A expenses incurred during the fiscal
period ended August 31, 1998.
(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."
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............................. $ 11
3 years............................ 33
5 years............................ 57
10 years........................... 127
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
1
<PAGE>
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
<TABLE>
<CAPTION>
<S> <C> <C>
Year Ended Period Ended
August 31, 1998 August 31, 1997**
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $ 14.16 $ 12.01
---------- ---------
Income from investment operations# -
Net investment incomess. $ 0.13 $ 0.08
Net realized and unrealized gain on investments and
foreign currency transactions 0.78 2.11
---------- ----------
Total from investment operations $ 0.91 $ 2.19
---------- ---------
Less distributions declared to shareholders -
From net investment income $ (0.03) $ (0.02)
From net realized gain on investments (0.57) --
In excess of net investment income -- (0.02)
---------- ---------
Total distributions declared to shareholders $ (0.60) $ (0.04)
----------- ---------
Net asset value - end of period $ 14.47 $ 14.16
---------- ---------
Total return 6.62% 19.01%++
Ratios (to average net assets)/Supplemental datass.:
Expenses 1.05%## 1.18%+
Net investment income 0.80% 0.87%+
Portfolio turnover 101% 106%
Net assets at end of period (000 omitted) $1,011 $825
</TABLE>
- -----------------
** 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. For the period ended August 31, 1997, subject to reimbursement by the Fund,
the investment adviser voluntarily agreed to maintain the other expenses of
the Fund, exclusive of management fees, at not more than 0.60% of average
daily net assets. To the extent actual expenses were over/under this
limitation, the net investment income per share and the ratios would have
been:
<TABLE>
<CAPTION>
<S> <C> <C>
Net investment income -- $ 0.08
Ratios (to average net assets):
Expenses## -- 1.22%+
Net investment income -- 0.83%+
</TABLE>
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
2
<PAGE>
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, on behalf of their clients (i) initially invest at least
$100,000 in class I shares of the fund or (ii) have, at the time of
purchase of class I shares, aggregate assets of at least $10 million
invested in class I shares of the fund either alone or in combination with
investments in class I shares of other MFS Funds. MFD may accept purchases
that do not meet these dollar qualification requirements if it believes, in
its sole discretion, that these requirements will be met within a
reasonable period of time. Additional investments may be made in any
amount; 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.
The date of this Supplement is January 1, 1999 (as revised October 1, 1999).
3
<PAGE>
MFS EQUITY INCOME FUND
Supplement to the Prospectus and Statement of Additional Information dated
January 1, 1999 (as revised October 1, 1999)
The following information should be read in conjunction with the Fund's
Prospectus and Statement of Additional Information ("SAI"), also dated January
1, 1999, 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
<TABLE>
<CAPTION>
<S> <C>
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%
</TABLE>
- -----------------
(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 1.15%
and 1.75%, 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
5 years.......................... 55
10 years......................... 122
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.
1
<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
<TABLE>
<CAPTION>
<S> <C> <C>
PERIOD ENDED PERIOD ENDED
AUGUST 31, 1998 AUGUST 31, 1997*
--------------- ----------------
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $ 14.81 $ 12.20
------- -------
Income from investment operations# -
Net investment incomess. $ 0.24 $ 0.15
Net realized and unrealized gain on investments
and foreign currency### 1.09 2.46
------- -------
Total from investment operations $ 1.33 $ 2.61
------- -------
Less distributions declared to shareholders -
From net investment income $ (0.21) $ --
From net realized gain on investments and
foreign currency transactions (1.71) --
-------- -------
Total distributions declared to shareholders $ (1.92) $ --
-------- -------
Net asset value - end of period $14.22 $14.81
------- -------
Total return 9.83% 21.39%++
Ratios (to average net assets)/Supplemental datass.:
Expenses 1.18% 1.50%+
Net investment income 1.57% 1.51%+
Portfolio turnover 89% 118%
Net assets at end of period (000 omitted) $999 $964
</TABLE>
- -----------------
* 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.
### The per share amount is not in accordance with the net realized and
unrealized gain (loss) for the year ended August 31, 1998 because of the
timing of sales of Fund shares and the amount of per share realized and
unrealized gains and losses at such time. ss. Effective November 1, 1997,
subject to reimbursement by the Fund, the investment adviser voluntarily
agreed to maintain the expenses of the Fund, exclusive of management,
distribution and service fees, at not more than 0.40% of average daily net
assets. Prior to November 1, 1997, subject to reimbursement by the Fund,
the investment adviser voluntarily agreed to maintain the expenses of the
Fund, exclusive of management, distribution, and service fees, at not more
than 1.50% of average daily net assets. To the extent actual expenses were
over these limitations, the net investment income per share and the ratios
would have been:
<TABLE>
<CAPTION>
<S> <C> <C>
Net investment income $ 0.12 $0.03
Ratios (to average net assets):
Expenses## 1.93% 2.67%+
Net investment income 0.82% 0.35%+
</TABLE>
2
<PAGE>
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 or law firms acting as trustee or manager for trust
accounts which, on behalf of their clients (i) initially invest at least
$100,000 in class I shares of the fund or (ii) have, at the time of
purchase of class I shares, aggregate assets of at least $10 million
invested in class I shares of the fund either alone or in combination with
investments in class I shares of other MFS Funds. MFD may accept purchases
that do not meet these dollar qualification requirements if it believes, in
its sole discretion, that these requirements will be met within a
reasonable period of time. Additional investments may be made in any
amount; 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.
3
<PAGE>
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.
The date of this Supplement is January 1, 1999 (as revised October 1, 1999).
4
<PAGE>
MFS NEW DISCOVERY FUND
Supplement to the Prospectus and Statement of Additional Information dated
January 1, 1999 (as revised October 1, 1999)
The following information should be read in conjunction with the Fund's
Prospectus and Statement of Additional Information ("SAI"), also dated January
1, 1999, 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
<TABLE>
<CAPTION>
<S> <C>
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%
</TABLE>
- -----------------
(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 0.38%
and 1.28%, 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
5 years....................................... 63
10 years...................................... 140
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.
1
<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
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED PERIOD ENDED
AUGUST 31, 1998 AUGUST 31, 1997*
--------------- ----------------
Per share data (for a share outstanding throughout the period):
Net asset value - beginning of period $ 13.08 $ 10.00
-------- -------
Income from investment operations# -
Net investment income (loss)ss. $ (0.03) $ 1.01
Net realized and unrealized gain (loss) on investments
and foreign currency transactions (0.40) 2.07
--------- -------
Total from investment operations $ (0.43) $ 3.08
--------- -------
Less distributions declared to shareholders -
From net investment income $ (0.72) $ --
From net realized gain on investments and foreign
currency transactions (1.23) --
--------- --------
Total distributions declared to shareholders $ (1.95) $ --
--------- --------
Net asset value - end of period $ 10.70 $ 13.08
--------- -------
Total return (4.50)% 30.80%++
Ratios (to average net assets)/Supplemental datass.:
Expenses 1.15%### 1.50%+
Net investment income (loss) (0.21)% 12.65%+
Portfolio turnover 196% 887%
Net assets at end of period (000 omitted) $3,321 $1,494
</TABLE>
- -----------------
* For the period from the commencement of the Fund's investment operations,
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 Fund's expenses without reduction for fees paid indirectly for the
period ended August 31, 1998 would have been 1.18%.
ss. The investment adviser voluntarily agreed to maintain the expenses of the
Fund, excluding management, distribution, and service fees, at not more
than 0.25% of average daily net assets effective November 1, 1997. Prior to
November 1, 1997, the investment advisor voluntarily agreed to maintain the
other expenses of the Fund at not more than 1.50% of the Fund's average
daily net assets, and the investment adviser did not impose any of its
fees. If these fees had not been waived and actual expenses had been
over/under this limitation, the net investment income (loss) per share and
the ratios would have been:
<TABLE>
<CAPTION>
<S> <C> <C>
Net investment income (loss) $(0.03) $ 0.92
Ratios (to average net assets):
Expenses## 1.28% 2.52%+
Net investment income (loss) (0.31)% 11.63%+
</TABLE>
2
<PAGE>
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 or law firms acting as trustee or manager for trust
accounts which, on behalf of their clients (i) initially invest at least
$100,000 in class I shares of the fund or (ii) have, at the time of
purchase of class I shares, aggregate assets of at least $10 million
invested in class I shares of the fund either alone or in combination with
investments in class I shares of other MFS Funds. MFD may accept purchases
that do not meet these dollar qualification requirements if it believes, in
its sole discretion, that these requirements will be met within a
reasonable period of time. Additional investments may be made in any
amount; 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.
3
<PAGE>
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.
The date of this Supplement is January 1, 1999 (as revised October 1, 1999).
4
<PAGE>
MFS RESEARCH INTERNATIONAL FUND
Supplement to the Prospectus and Statement of Additional Information dated
January 1, 1999 (as revised October 1, 1999)
The following information should be read in conjunction with the Fund's
Prospectus and Statement of Additional Information ("SAI"), also dated January
1, 1999, 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
<TABLE>
<CAPTION>
<S> <C>
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%
</TABLE>
- -----------------
(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 2.35%
and 3.35%, 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
5 years....................................... 77
10 years...................................... 168
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.
1
<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
<TABLE>
<CAPTION>
<S> <C> <C>
PERIOD ENDED PERIOD ENDED
AUGUST 31, 1998 AUGUST 31, 1997*
Per share data (for a share outstanding throughout the period):
Net asset value - beginning of period $ 10.95 $ 10.00
-------- -------
Income from investment operations# -
Net investment income** $ 0.06 $ 0.07
Net realized and unrealized gain on investments
and foreign currency transactions### 0.34 0.88
-------- -------
Total from investment operations $ 0.40 $ 0.95
-------- -------
Less distributions declared to shareholders -
From net investment income $ (0.05) $ --
From net realized gain on investments and
foreign currency transactions (1.04) $ --
--------- -------
Total distributions declared to shareholders $ (1.09) $ --
--------- -------
Net asset value - end of period $ 10.26 $ 10.95
-------- -------
Total return 4.13% 9.60%^^
Ratios (to average net assets)/Supplemental data**:
Expenses## 1.40% 1.68%^
Net investment income 0.53% 0.85%^
Portfolio turnover 89% 137%
Net assets at end of period (000 omitted) $1,199 $1,022
</TABLE>
- -----------------
* 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.
### The per share amount is not in accordance with the net realized and
unrealized loss for the period because of the timing of sales of Fund
shares and the amount of per share realized and unrealized gains and losses
at such time.
** For the year ended August 31, 1998, the investment adviser, subject to
reimbursement by the Fund, voluntarily agreed to maintain the other
expenses of the Fund, exclusive of management, distribution, and service
fees, at not more than 0.40% of average daily net assets. For the period
ended August 31, 1997, the investment adviser voluntarily agreed to
maintain the other expenses of the Fund at not more than 1.75% of the
Fund's average daily net assets. The investment adviser and shareholder
servicing agent did not impose any of their fees for the period ended
August 31, 1997. If these fees had not been waived and actual expenses had
been over/under this limitation, the net investment loss per share and the
ratios would have been:
<TABLE>
<CAPTION>
<S> <C> <C>
Net investment loss $(0.15) $ --
Ratios (to average net assets):
Expenses## 3.55% 2.81%^
Net investment loss (1.61)% (0.28)%^
</TABLE>
2
<PAGE>
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 or law firms acting as trustee or manager for trust
accounts which, on behalf of their clients (i) initially invest at least
$100,000 in class I shares of the fund or (ii) have, at the time of
purchase of class I shares, aggregate assets of at least $10 million
invested in class I shares of the fund either alone or in combination with
investments in class I shares of other MFS Funds. MFD may accept purchases
that do not meet these dollar qualification requirements if it believes, in
its sole discretion, that these requirements will be met within a
reasonable period of time. Additional investments may be made in any
amount; 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.
3
<PAGE>
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.
The date of this Supplement is January 1, 1999 (as revised October 1, 1999).
