<PAGE>
[Logo] M F S(R) SEMIANNUAL REPORT
INVESTMENT MANAGEMENT FEBRUARY 29, 2000
WE INVENTED THE MUTUAL FUND(R)
[graphic omitted]
MFS(R) SCIENCE AND
TECHNOLOGY FUND
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
MFS(R) SCIENCE AND TECHNOLOGY FUND
TRUSTEES TREASURER
Richard B. Bailey+ -- Private Investor; W. Thomas London*
Former Chairman and Director (until 1991),
MFS Investment Management(R) ASSISTANT TREASURERS
Mark E. Bradley*
Marshall N. Cohan+ -- Private Investor Ellen Moynihan*
James O. Yost*
Lawrence H. Cohn, M.D.+ -- Chief of Cardiac
Surgery, Brigham and Women's Hospital; SECRETARY
Professor of Surgery, Harvard Medical School Stephen E. Cavan*
The Hon. Sir J. David Gibbons, KBE+ -- Chief ASSISTANT SECRETARY
Executive Officer, Edmund Gibbons Ltd.; James R. Bordewick, Jr.*
Chairman, Colonial Insurance Company, Ltd.
CUSTODIAN
Abby M. O'Neill+ -- Private Investor State Street Bank and Trust Company
Walter E. Robb, III+ -- President and Treasurer, INVESTOR INFORMATION
Benchmark Advisors, Inc. (corporate financial For information on MFS mutual funds, call your
consultants); President, Benchmark Consulting investment professional or, for an information kit,
Group, Inc. (office services) call toll free: 1-800-637-2929 any business day
from 9 a.m. to 5 p.m. Eastern time (or leave a
Arnold D. Scott* -- Senior Executive Vice message anytime).
President, Director, and Secretary,
MFS Investment Management INVESTOR SERVICE
MFS Service Center, Inc.
Jeffrey L. Shames* -- Chairman and Chief P.O. Box 2281
Executive Officer, MFS Investment Management Boston, MA 02107-9906
J. Dale Sherratt+ -- President, Insight For general information, call toll free:
Resources, Inc. (acquisition planning 1-800-225-2606 any business day from 8 a.m.
specialist) to 8 p.m. Eastern time.
Ward Smith+ -- Former Chairman (until 1994), For service to speech- or hearing-impaired, call
NACCO Industries (holding company) toll free: 1-800-637-6576 any business day from
9 a.m. to 5 p.m. Eastern time. (To use this
INVESTMENT ADVISER service, your phone must be equipped with a
Massachusetts Financial Services Company Telecommunications Device for the Deaf.)
500 Boylston Street
Boston, MA 02116-3741 For share prices, account balances, exchanges,
or stock and bond outlooks, call toll free:
DISTRIBUTOR 1-800-MFS-TALK (1-800-637-8255) anytime from a
MFS Fund Distributors, Inc. touch-tone telephone.
500 Boylston Street
Boston, MA 02116-3741 WORLD WIDE WEB
www.mfs.com
CHAIRMAN AND PRESIDENT
Jeffrey L. Shames*
PORTFOLIO MANAGER
S. Irfan Ali*
+Independent Trustee
*MFS Investment Management
</TABLE>
<PAGE>
LETTER FROM THE CHAIRMAN
Dear Shareholders,
One could easily argue that the Internet represents the greatest technological
development most of us may see in our lifetimes. There is no disputing that this
new communication medium is changing forever the way we work, play, and shop.
One might also argue that investing in this new technology represents the
investment opportunity of a lifetime. The question for any investor is whether
and how to take advantage of it.
The popular press, it seems, would have us believe that by surfing the Web, we
can learn everything we need to know about investing. Indeed, there is no doubt
that Internet- delivered information and brokerage services enable individual
investors to be well informed and to trade at bargain prices. But we believe the
numbers and facts argue that, for most of us, mutual funds purchased through an
investment professional will continue to be one of the best products for
long-term investing in this new millennium.
According to a survey by the Investment Company Institute, the national
association of American investment companies, 44% of American households own
stock or bond mutual funds, while only 25.5% own individual stocks.(1) Of course
that doesn't tell us how well they did owning those funds or stocks, but another
statistic gives us a clue. In the third quarter of 1999, during a period of
volatility in the greatest bull market in history, a quarter of the 7,500 stocks
tracked by Morningstar, a popular rating service, lost more than 20% of their
value. But during the same period, fewer than 1% of the mutual funds tracked by
Morningstar -- 6 out of 10,000 funds -- were down by a similar amount.(2) So an
investor's chance of picking one of those losing stocks was about 25 times
greater than his or her chance of picking an equally losing fund.
The numbers also show that a majority of Americans seek professional advice when
buying mutual funds. Outside of employer-sponsored retirement plans,
approximately 68% of fund shareholders state that their primary method of
purchasing shares is through an investment professional.(1)
Why do we at MFS(R) believe that mutual funds plus professional advice will
continue to define the best course of action for many investors? Let's look at
some of the characteristics of a successful long-term investment approach:
o HAVING A PLAN AND STICKING TO IT: Our experience is that successful
investors -- those whose lives are enriched by the fruits of their
investing -- share two characteristics. They have a plan for reaching their
monetary goals, and they stick with that plan through up as well as down
markets. And for many investors, working with an investment professional
may be the best way to develop a plan. Although the Internet abounds with
calculators for developing all sorts of investment plans, none has your
investment professional's high level of experience and an understanding of
your unique situation. And no calculator can counsel you during a down
market, when you may be tempted to abandon your goals and your plan.
o DIVERSIFICATION: Few investors can afford to own a large number of
holdings, so poor performance of one company can potentially drag down
their entire portfolio. This is especially true when investing in volatile
new areas such as the Internet. On the other hand, a diversified mutual
fund that owns dozens or even hundreds of holdings is better positioned to
survive a disappointment in one or several investments.
o GOOD IN A DOWN MARKET: As we enter the tenth year of the greatest bull
market in history, it's easy to forget that market downturns are an almost
inevitable part of investing. Few mutual funds, of course, are going to be
up when the overall market is down. But as the numbers above from the third
quarter of 1999 demonstrate, mutual funds may be less likely to suffer the
extreme downturns experienced by a large number of individual holdings when
the market heads south.
o MFS ORIGINAL RESEARCH(R): The Internet is one of the greatest research
tools ever invented, but it's still not the same as being eyeball to
eyeball with the management of a company and discussing their plans for
their firm's future.
o GOOD PERFORMANCE AT AN ACCEPTABLE LEVEL OF RISK: Investing in individual
stocks or bonds does indeed offer the potential of exhilarating performance
that few mutual funds even attempt. The downside is that the most exciting
investments are also likely to be the ones that give you sleepless nights.
The diversification and professional management of mutual funds help make
them inherently less risky than individual stock picking, and funds are
available in a wide range of risk profiles.
We believe that now, more than ever, mutual funds sold by an investment
professional may offer many investors the best way to participate in whatever
investment opportunities the new millennium may bring. The combination of
professional portfolio management and professional advice recognizes the key
reason that investors give us their money: because they don't want to make a
hobby or a second profession out of investing; they simply want their money to
work for them so they have a better likelihood of realizing their dreams.
As always, we appreciate your confidence in MFS and welcome any questions or
comments you may have.
Respectfully,
[Graphic Omitted]
Jeffrey L. Shames
Chairman and Chief Executive Officer
MFS Investment Management(R)
March 15, 2000
- --------------
(1)Source: Investment Company Institute.
(2)Source: Morningstar CEO Don Phillips' keynote address at The Baltimore
Sun's Dollars and Sense Conference, 10/99. In the period 7/1/99 through 9/
30/99, of the 7,500 stocks tracked by Morningstar, 1,865 lost 20% or more;
of the 10,000 mutual funds tracked by Morningstar, six lost 20% or more.
Mutual fund results are at net asset value; if sales charges had been
reflected, results would have been lower.
Investments in mutual funds will fluctuate and may be worth more or less upon
redemption.
The opinions expressed in this letter are those of Jeffrey L. Shames, and no
forecasts can be guaranteed.
<PAGE>
MANAGEMENT REVIEW AND OUTLOOK
Dear Shareholders,
For the six months ended February 29, 2000, Class A shares of the Fund
provided a total return of 59.50% and Class I shares 59.55%. These returns,
which assume the reinvestment of any distributions but exclude the effects of
any sales charges, compare to a 71.45% return over the same period for the
Fund's benchmark, the NASDAQ Composite Index, an unmanaged index of common
stocks traded on NASDAQ, and to a 113.56% return for the average science and
technology fund tracked by Lipper Inc., an independent firm that reports
mutual fund performance.
The Fund invests in companies that benefit from scientific and technological
advances and improvements. We have concentrated on finding established market
leaders that meet the following criteria: high-quality products, strong cash
flows, high gross margins, and the ability to sustain strong earnings growth.
We aggressively employ MFS Original Research(R) to drive our bottom-up stock-
selection process.
Although the Fund performed well in an absolute sense during the period, it
did underperform relative to the NASDAQ Composite Index and the Lipper
category average. In large measure, this was due to the Fund's underweighting
in the smaller-cap, pure Internet plays that performed very well in late 1999.
The reason we have declined to invest in many of these companies is the
extremely high valuations in much of this sector, which are unprecedented in
recent market history. We have seen, for example, companies with revenues of
only several million dollars per quarter but with market capitalizations in
excess of $7 billion, and we have been concerned about the sustainability of
such valuations.
That said, the Fund did benefit over the period from investments in what we
perceived as companies with solid fundamentals, especially in the software,
hardware, and telecommunications areas. Software vendor Oracle, for example,
is a large position that performed very well during the period. And toward the
end of the period, the portfolio also benefited from what we believe was a
broadening of the market's perception of companies that will benefit from the
Internet. There now appears to be an awareness that if the Internet is as
tremendous a force as the market thinks it is, it is going to impact a broad
range of firms, not just the dot.com companies. Examples of holdings that have
benefited from this awareness include Rational Software and Siebel Systems.
These are established businesses with substantial revenue streams and high
profitability that are seeing a marked acceleration in growth because of
Internet opportunities.
Respectfully,
[Graphic Omitted]
/s/ S. Irfan Ali
S. Irfan Ali
Portfolio Manager
The opinions expressed in this report are those of the portfolio manager and
are current only through the end of the period of the report as stated on the
cover. The manager's views are subject to change at any time based on market
and other conditions, and no forecasts can be guaranteed.
It is not possible to invest directly in an index.
The portfolio is actively managed, and current holdings may be different.
<PAGE>
PERFORMANCE SUMMARY
Currently, the Fund offers only Class A and Class I shares, which are
available for purchase at net asset value only by residents of the
Commonwealth of Massachusetts who are employees (or certain relatives of
employees) of MFS and its affiliates or members of the governing boards of the
various funds sponsored by MFS.
Because mutual funds are designed for investors with long-term goals, we have
provided cumulative results as well as the average annual total returns for
the applicable time periods. Investment results reflect the percentage change
in net asset value, including reinvestment of dividends. (See Notes to
Performance Summary.)
AVERAGE ANNUAL AND CUMULATIVE TOTAL RATES OF RETURN THROUGH FEBRUARY 29, 2000
CLASS A
<TABLE>
<CAPTION>
6 Months 1 Year 3 Years Life*
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cumulative Total Return Excluding Sales Charge +59.50% +81.78% +225.66% +228.26%
- -----------------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return Excluding Sales Charge -- +81.78% + 48.22% + 45.73%
- -----------------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return Including Sales Charge -- +73.14% + 45.84% + 43.50%
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
CLASS I
6 Months 1 Year 3 Years Life*
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cumulative Total Return Excluding Sales Charge +59.55% +81.84% +226.09% +228.37%
- -----------------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return Excluding Sales Charge -- +81.84% + 48.29% + 45.75%
- -----------------------------------------------------------------------------------------------------------------------------------
*For the period from the commencement of the Fund's investment operations, January 2, 1997, through February 29, 2000.
</TABLE>
NOTES TO PERFORMANCE SUMMARY
Performance results reflect any applicable subsidies and waivers, without
which the results would have been less favorable. Subsidies and waivers may be
rescinded at any time. See the prospectus for details. All results are
historical and include the reinvestment of dividends and capital gains.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. MORE RECENT
RETURNS MAY BE MORE OR LESS THAN THOSE SHOWN. PAST PERFORMANCE IS NO GUARANTEE
OF FUTURE RESULTS.
The Fund may focus its investments in certain sectors, thereby increasing its
vulnerability to any single economic, political, or regulatory development.
See the prospectus for details.
<PAGE>
PORTFOLIO OF INVESTMENTS (Unaudited) -- February 29, 2000
<TABLE>
<CAPTION>
Stocks - 95.0%
- -------------------------------------------------------------------------------------------------------
ISSUER SHARES VALUE
- -------------------------------------------------------------------------------------------------------
U.S. Stocks - 89.7%
Advertising - 0.2%
<S> <C> <C>
Young & Rubicam, Inc. 225 $ 11,363
- -------------------------------------------------------------------------------------------------------
Biotechnology - 1.8%
Waters Corp.* 1,400 $ 137,288
- -------------------------------------------------------------------------------------------------------
Business Machines - 4.2%
Affiliated Computer Services, Inc., "A"* 2,430 $ 76,545
Seagate Technology, Inc.* 2,190 109,226
Sun Microsystems, Inc.* 1,360 129,540
----------
315,311
- -------------------------------------------------------------------------------------------------------
Business Services - 8.0%
Adelphia Business Solutions* 100 $ 5,138
Automatic Data Processing Inc. 1,400 60,987
BEA Systems, Inc.* 300 37,969
BISYS Group, Inc.* 1,100 56,719
C.H. Robinson Worldwide, Inc. 100 5,100
Computer Sciences Corp.* 1,670 131,617
Concord EFS, Inc.* 1,000 19,562
DST Systems, Inc.* 750 42,094
First Data Corp. 2,200 99,000
Fiserv, Inc.* 2,400 65,400
Metamor Worldwide, Inc.* 1,000 20,500
Teletech Holdings, Inc.* 1,500 56,812
----------
$ 600,898
- -------------------------------------------------------------------------------------------------------
Cellular Telephones - 1.3%
Sprint Corp. (PCS Group)* 1,860 $ 96,255
- -------------------------------------------------------------------------------------------------------
Computer Hardware - Systems - 0.5%
Dell Computer Corp.* 900 $ 36,732
PC Connection, Inc.* 100 2,631
----------
$ 39,363
- -------------------------------------------------------------------------------------------------------
Computer Software - Personal Computers - 7.0%
America Online, Inc.* 260 $ 15,340
Documentum, Inc.* 1,850 139,559
Intuit, Inc.* 600 31,500
Mercury Interactive Corp.* 600 57,825
Microsoft Corp.* 3,120 278,850
----------
$ 523,074
- -------------------------------------------------------------------------------------------------------
Computer Software - Services - 2.5%
EMC Corp.* 750 $ 89,250
Portal Software, Inc.* 1,100 82,637
Xpedior, Inc.* 100 1,800
Yahoo, Inc.* 80 12,775
----------
$ 186,462
- -------------------------------------------------------------------------------------------------------
Computer Software - Systems - 21.4%
Ariba, Inc.* 200 $ 52,900
Aspen Technology, Inc.* 1,300 58,175
BMC Software, Inc.* 2,920 134,320
Cadence Design Systems, Inc.* 6,862 136,811
Computer Associates International, Inc. 2,530 162,711
Compuware Corp.* 3,940 87,172
Liberate Technologies* 100 10,187
Oracle Corp.* 4,590 340,807
Range Resources Corp. 120 233
Rational Software Corp.* 2,760 196,305
Siebel Systems, Inc.* 1,950 270,441
VERITAS Software Corp.* 770 152,364
----------
$1,602,426
- -------------------------------------------------------------------------------------------------------
Consumer Goods and Services - 0.4%
Galileo International, Inc. 1,600 $ 27,200
- -------------------------------------------------------------------------------------------------------
Electronics - 16.0%
Altera Corp.* 1,650 $ 131,587
Analog Devices, Inc.* 820 128,740
Applied Materials, Inc.* 150 27,441
Atmel Corp.* 4,200 207,900
Cypress Semiconductor Corp.* 1,200 54,750
Fairchild Semiconductor International Co.* 1,000 37,750
Intel Corp. 960 108,480
LSI Logic Corp.* 3,300 211,406
National Semiconductor Corp.* 1,530 114,941
Teradyne, Inc.* 2,060 179,220
----------
$1,202,215
- -------------------------------------------------------------------------------------------------------
Entertainment - 3.9%
AMFM, Inc.* 115 $ 7,058
CBS Corp.* 1,050 62,541
Comcast Corp., "A" 1,350 57,375
Hearst-Argyle Television, Inc.* 1,300 27,056
Infinity Broadcasting Corp., "A"* 4,212 134,521
----------
$ 288,551
- -------------------------------------------------------------------------------------------------------
Medical and Health Products - 2.9%
American Home Products Corp. 1,050 $ 45,675
Bausch & Lomb, Inc. 1,350 71,212
Bristol-Myers Squibb Co. 600 34,088
Pharmacia & Upjohn, Inc. 1,360 64,770
----------
$ 215,745
- -------------------------------------------------------------------------------------------------------
Medical and Health Technology and Services - 0.7%
American Dental Partners, Inc.* 100 $ 844
United Healthcare Corp. 840 42,945
VISX, Inc.* 700 11,856
----------
$ 55,645
- -------------------------------------------------------------------------------------------------------
Oil Services - 0.1%
Baker Hughes, Inc. 400 $ 10,350
- -------------------------------------------------------------------------------------------------------
Printing and Publishing - 1.2%
Gannett Co., Inc. 650 $ 42,372
Tribune Co. 1,270 49,450
----------
$ 91,822
- -------------------------------------------------------------------------------------------------------
Special Products and Services
Caliber Learning Network, Inc.* 100 $ 625
- -------------------------------------------------------------------------------------------------------
Stores - 0.5%
CVS Corp. 1,050 $ 36,750
- -------------------------------------------------------------------------------------------------------
Telecommunications - 16.6%
ANTEC Corp.* 1,600 $ 84,700
AT&T Corp.* 1,050 54,863
Cabletron Systems, Inc.* 1,000 49,000
Cisco Systems, Inc.* 1,546 204,362
Corning, Inc. 940 176,720
MCI WorldCom, Inc.* 1,396 62,297
Metromedia Fiber Network, Inc., "A"* 700 50,323
Motorola, Inc. 986 168,113
NEXTEL Communications, Inc.* 700 95,725
Nortel Networks Corp. 500 55,750
Qwest Communications International, Inc.* 1,000 46,375
Tellabs, Inc.* 300 14,400
UnitedGlobalCom, Inc.* 500 52,250
Vignette Corp.* 240 55,320
Winstar Communications, Inc.* 950 73,506
----------
$1,243,704
- -------------------------------------------------------------------------------------------------------
Utilities - Telephone - 0.5%
U.S. West, Inc. 500 $ 36,313
- -------------------------------------------------------------------------------------------------------
Total U.S. Stocks $6,721,360
- -------------------------------------------------------------------------------------------------------
Foreign Stocks - 5.3%
Bermuda - 0.9%
FLAG Telecom Holdings Ltd. (Telecommunications)* 10 $ 286
Global Crossing Ltd. (Telecommunications)* 1,400 65,275
----------
$ 65,561
- -------------------------------------------------------------------------------------------------------
France - 1.1%
Vivendi (Business Services) 685 $ 80,570
- -------------------------------------------------------------------------------------------------------
Hong Kong
Asia Electronics Holding Co. (Electronics)* 1,000 $ 437
- -------------------------------------------------------------------------------------------------------
Italy - 1.2%
Telecom Italia Mobile S.p.A. (Telecommunications) 6,750 $ 92,084
- -------------------------------------------------------------------------------------------------------
Japan - 0.7%
Nippon Telegraph & Telephone Co. (Utilities -
Telephone) 4 $ 55,343
- -------------------------------------------------------------------------------------------------------
Switzerland - 0.2%
Nestle S.A. (Food and Beverage Products) 8 $ 13,508
- -------------------------------------------------------------------------------------------------------
United Kingdom - 1.2%
COLT Telecom Group PLC, ADR (Telecommunications)* 230 $ 53,586
Vodafone AirTouch PLC (Telecommunications)* 5,896 32,987
----------
$ 86,573
- -------------------------------------------------------------------------------------------------------
Total Foreign Stocks $ 394,076
- -------------------------------------------------------------------------------------------------------
Total Stocks (Identified Cost, $4,288,909) $7,115,436
- -------------------------------------------------------------------------------------------------------
Short-Term Obligation - 2.8%
- -------------------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT
ISSUER (000 OMITTED) VALUE
- -------------------------------------------------------------------------------------------------------
Federal Home Loan Bank, due 3/01/00, at Amortized Cost $ 210 $ 210,000
- -------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $4,498,909) $7,325,436
Other Assets, Less Liabilities - 2.2% 166,633
- -------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $7,492,069
- -------------------------------------------------------------------------------------------------------
*Non-income producing security.
</TABLE>
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS
Statement of Assets and Liabilities (Unaudited)
- --------------------------------------------------------------------------------
FEBRUARY 29, 2000
- --------------------------------------------------------------------------------
Assets:
Investments, at value (identified cost, $4,498,909) $7,325,436
Cash 1,858
Foreign currency, at value (identified cost, $32) 29
Receivable for Fund shares sold 136,452
Receivable for investments sold 60,806
Interest and dividends receivable 458
Other assets 36
----------
Total assets $7,525,075
----------
Liabilities:
Payable for investments purchased $ 16,995
Payable to affiliates -
Shareholder servicing agent fee 19
Administrative fee 3
Accrued expenses and other liabilities 15,989
----------
Total liabilities $ 33,006
----------
Net assets $7,492,069
==========
Net assets consist of:
Paid-in capital $4,074,977
Unrealized appreciation on investments and translation
of assets and liabilities in foreign currencies 2,826,521
Accumulated undistributed net realized gain on investments and
foreign currency transactions 609,257
Accumulated net investment loss (18,686)
----------
Total $7,492,069
==========
Shares of beneficial interest outstanding 314,848
==========
Class A shares
Net asset value, offering price, and redemption price per share
(net assets of $2,630,079 / 110,565 shares of beneficial interest
outstanding) $23.79
======
Class I shares:
Net asset value, offering price, and redemption price per share
(net assets of $4,861,990 / 204,283 shares of beneficial interest
outstanding) $23.80
======
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS - continued
Statement of Operations (Unaudited)
- --------------------------------------------------------------------------------
SIX MONTHS ENDED FEBRUARY 29, 2000
- --------------------------------------------------------------------------------
Net investment income (loss):
Income -
Dividends $ 3,893
Interest 2,480
Foreign t (5)
-----------
Total investment income $ 6,368
-----------
Expenses -
Management fee $ 19,988
Shareholder servicing agent fee 2,662
Distribution and service fee (Class A) 4,590
Administrative fee 285
Custodian fee 4,693
Printing 3,186
Postage 418
Auditing fees 11,932
Legal fees 483
Miscellaneous 1,628
-----------
Total expenses $ 49,865
Fees paid indirectly (233)
Reduction of expenses by investment adviser and distributor (24,578)
-----------
Net expenses $ 25,054
-----------
Net investment loss $ (18,686)
-----------
Realized and unrealized gain (loss) on investments:
Realized gain (identified cost basis) -
Investment transactions $ 810,834
Foreign currency transactions 10
-----------
Net realized gain on investments and foreign currency
transactions $ 810,844
-----------
Change in unrealized appreciation (depreciation) -
Investments $ 1,812,446
Translation of assets and liabilities in foreign currencies (5)
-----------
Net unrealized gain on investments and foreign
currency translation $ 1,812,441
-----------
Net realized and unrealized gain on investments and
foreign currency $ 2,623,285
-----------
Increase in net assets from operations $ 2,604,599
===========
See notes to financial statements.
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
- -----------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 29, 2000 AUGUST 31, 1999
(UNAUDITED)
- -----------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets:
From operations -
<S> <C> <C>
Net investment loss $ (18,686) $ (31,022)
Net realized gain on investments and foreign
currency transactions 810,844 932,149
Net unrealized gain on investments and foreign
currency translation 1,812,441 925,293
----------- ----------
Increase in net assets from operations $ 2,604,599 $1,826,420
----------- ----------
Distributions declared to shareholders -
From net realized gain on investments and
foreign currency transactions (Class A) $ (365,386) $ (42,102)
From net realized gain on investments and
foreign currency transactions (Class I) (717,472) (87,226)
----------- ----------
Total distributions declared to
shareholders $(1,082,858) $ (129,328)
----------- ----------
Net increase (decrease) in net assets from Fund
share transactions $ 1,781,934 $ (349,889)
----------- ----------
Total increase in net assets $ 3,303,675 $1,347,203
Net assets:
At beginning of period 4,188,394 2,841,191
----------- ----------
At end of period (including net investment loss
of $18,686 and $0, respectively) $ 7,492,069 $4,188,394
=========== ==========
</TABLE>
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights
- -------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED AUGUST 31, PERIOD ENDED
SIX MONTHS ENDED --------------------------------- AUGUST 31,
FEBRUARY 29, 2000 1999 1998 1997*
(UNAUDITED)
- -------------------------------------------------------------------------------------------------------------------------------
CLASS A
- -------------------------------------------------------------------------------------------------------------------------------
Per share data (for a share outstanding
throughout each period):
<S> <C> <C> <C> <C>
Net asset value - beginning of period $18.34 $11.49 $12.53 $10.00
------ ------ ------ ------
Income from investment operations# -
Net investment income (loss)(S) $(0.07) $(0.08) $(0.03) $ 0.84
Net realized and unrealized gain (loss)
on investments and foreign currency 10.10 7.44 (0.10) 1.69
------ ------ ------ ------
Total from investment operations $10.03 $ 7.36 $(0.13) $ 2.53
------ ------ ------ ------
Less distributions declared to shareholders -
From net investment income -- -- $(0.91) --
From net realized gain on investments
and foreign currency transactions (4.58) (0.51) -- --
------ ------ ------ ------
Total distributions declared to --
shareholders
$(4.58) $(0.51) $(0.91) $
------ ------ ------ ------
Net asset value - end of period $23.79 $18.34 $11.49 $12.53
====== ====== ====== ======
Total return 59.50%++ 65.25% (0.61)% 14.70%++
Ratios (to average net assets)/Supplemental data(S):
Expenses## 0.95%+ 1.17% 0.88% 1.40%+
Net investment income (loss) (0.70)%+ (0.83)% (0.19)% 10.73%+
Portfolio turnover 47% 104% 29% 792%
Net assets at end of period (000 omitted) $2,630 $1,658 $1,045 $882
(S)The investment adviser and the distributor voluntarily waived their fees for the periods indicated. If these fees had been
incurred by the Fund, the net investment income (loss) per share and the ratios would have been:
Net investment income (loss) $(0.20) $(0.20) $(0.21) $ 0.73
Ratios (to average net assets):
Expenses## 2.20%+ 2.42% 2.18% 2.77%+
Net investment income (loss) (1.95)%+ (2.08)% (1.49)% 9.36%+
*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.
##Ratios do not reflect expense reductions from certain expense offset arrangements.
</TABLE>
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
Financial Highlights
- -------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED AUGUST 31, PERIOD ENDED
SIX MONTHS ENDED --------------------------------- AUGUST 31,
FEBRUARY 29, 2000 1999 1998 1997*
(UNAUDITED)
- -------------------------------------------------------------------------------------------------------------------------------
CLASS b
- -------------------------------------------------------------------------------------------------------------------------------
Per share data (for a share outstanding
throughout each period):
<S> <C> <C> <C> <C>
Net asset value - beginning of period $18.34 $11.50 $12.53 $10.00
------ ------ ------ ------
Income from investment operations# -
Net investment income (loss)(S) $(0.07) $(0.22) $(0.02) $ 1.05
Net realized and unrealized gain (loss)
on investments and foreign currency 10.11 7.57 (0.10) 1.48
------ ------ ------ ------
Total from investment operations $10.04 $ 7.35 $(0.12) $ 2.53
------ ------ ------ ------
Less distributions declared to shareholders -
From net investment income $ -- $ -- $(0.91) $ --
From net realized gain on investments
and foreign currency transactions (4.58) (0.51) -- --
------ ------ ------ ------
Total distributions declared to
shareholders $(4.58) $(0.51) $(0.91) $ --
------ ------ ------ ------
Net asset value - end of period $23.80 $18.34 $11.50 $12.53
====== ====== ====== ======
Total return 59.55%++ 65.25% (0.61)% 25.30%++
Ratios (to average net assets)/Supplemental data(S):
Expenses## 0.95%+ 1.17% 0.88% 1.41%+
Net investment income (loss) (0.70)%+ (0.84)% (0.18)% 13.11%+
Portfolio turnover 47% 104% 29% 792%
Net assets at end of period (000 omitted) $4,862 $2,530 $1,796 $1,637
(S)The investment adviser voluntarily waived its fee for the periods indicated. If this fee had been incurred by the
Fund, the net investment income (loss) per share and the ratios would have been:
Net investment income (loss) $(0.15) $(0.41) $(0.20) $ 0.98
Ratios (to average net assets):
Expenses## 1.70%+ 1.92% 1.68% 2.28%+
Net investment income (loss) (1.45)%+ (1.59)% (0.98)% 12.24%+
*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.
##Ratios do not reflect expense reductions from certain expense offset arrangements.
</TABLE>
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
(1) Business and Organization
MFS Science and Technology Fund (the Fund) is a diversified series of MFS
Series Trust I (the Trust). The Trust is organized as a Massachusetts business
trust and is registered under the Investment Company Act of 1940, as amended,
as an open-end management investment company.
(2) Significant Accounting Policies
General - The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. The Fund can
invest in foreign securities. Investments in foreign securities are vulnerable
to the effects of changes in the relative values of the local currency and the
U.S. dollar and to the effects of changes in each country's legal, political,
and economic environment.
Investment Valuations - Equity securities listed on securities exchanges or
reported through the NASDAQ system are reported at market value using last
sale prices. Unlisted equity securities or listed equity securities for which
last sale prices are not available are reported at market value using last
quoted bid prices. Short-term obligations, which mature in 60 days or less,
are valued at amortized cost, which approximates market value. Securities for
which there are no such quotations or valuations are valued in good faith, at
fair value, by the Trustees.
Foreign Currency Translation - Investment valuations, other assets, and
liabilities initially expressed in foreign currencies are converted each
business day into U.S. dollars based upon current exchange rates. Purchases
and sales of foreign investments, income, and expenses are converted into U.S.
dollars based upon currency exchange rates prevailing on the respective dates
of such transactions. Gains and losses attributable to foreign currency
exchange rates on sales of securities are recorded for financial statement
purposes as net realized gains and losses on investments. Gains and losses
attributable to foreign exchange rate movements on income and expenses are
recorded for financial statement purposes as foreign currency transaction
gains and losses. That portion of both realized and unrealized gains and
losses on investments that results from fluctuations in foreign currency
exchange rates is not separately disclosed.
Investment Transactions and Income - Investment transactions are recorded on
the trade date. Interest income is recorded on the accrual basis. All discount
is accreted for financial statement and tax reporting purposes as required by
federal income tax regulations. Dividends received in cash are recorded on the
ex-dividend date. Dividend and interest payments received in additional
securities are recorded on the ex-dividend or ex-interest date in an amount
equal to the value of the security on such date.
Fees Paid Indirectly - The Fund's custody fee is calculated as a percentage of
the Fund's month end net assets. The fee is reduced according to an arrangement
that measures the value of cash deposited with the custodian by the Fund. This
amount is shown as a reduction of expenses on the Statement of Operations.
Tax Matters and Distributions - The Fund's policy is to comply with the
provisions of the Internal Revenue Code (the Code) applicable to regulated
investment companies and to distribute to shareholders all of its net taxable
income, including any net realized gain on investments. Accordingly, no
provision for federal income or excise tax is provided.
Distributions to shareholders are recorded on the ex-dividend date. The Fund
distinguishes between distributions on a tax basis and a financial reporting
basis and requires that only distributions in excess of tax basis earnings and
profits be reported in the financial statements as distributions from paid-in
capital. Differences in the recognition or classification of income between the
financial statements and tax earnings and profits, which result in temporary
over-distributions for financial statement purposes, are classified as
distributions in excess of net investment income or net realized gains.
Multiple Classes of Shares of Beneficial Interest - The Fund offers multiple
classes of shares, which differ in their respective distribution and service
fees. All shareholders bear the common expenses of the Fund based on daily net
assets of each class, without distinction between share classes. Dividends are
declared separately for each class. Differences in per share dividend rates are
generally due to differences in separate class expenses. Class B shares will
convert to Class A shares approximately eight years after purchase.
(3) Transactions with Affiliates
Investment Adviser - The Fund has an investment advisory agreement with
Massachusetts Financial Services Company (MFS) to provide overall investment
advisory and administrative services, and general office facilities. The
management fee is computed daily and paid monthly at an annual rate of 0.75% of
the Fund's average daily net assets. The investment adviser has voluntarily
agreed to waive its fee, which is shown as a reduction of expenses in the
Statement of Operations.
The Fund pays no compensation directly to its Trustees who are officers of the
investment adviser, or to officers of the Fund, all of whom receive remuneration
for their services to the Fund from MFS. Certain officers and Trustees of the
Fund are officers or directors of MFS, MFS Fund Distributors, Inc. (MFD), and
MFS Service Center, Inc. (MFSC). The trustees are currently not receiving any
payments for their services to the Fund.
Administrator - The Fund has an administrative services agreement with MFS to
provide the Fund with certain financial, legal, shareholder servicing,
compliance, and other administrative services. As a partial reimbursement for
the cost of providing these services, the Fund pays MFS an administrative fee at
the following annual percentages of the Fund's average daily net assets:
First $1 billion 0.0150%
Next $1 billion 0.0125%
Next $1 billion 0.0100%
In excess of $3 billion 0.0000%
Distributor - MFD, a wholly owned subsidiary of MFS, as distributor, did not
receive any sales charges on sales of Class A shares of the Fund for the six
months ended February 29, 2000.
The Trustees have adopted a distribution plan for Class A shares pursuant to
Rule 12b-1 of the Investment Company Act of 1940 as follows:
The Fund's distribution plan provides that the Fund will pay MFD up to 0.50% per
annum of its average daily net assets attributable to Class A shares in order
that MFD may pay expenses on behalf of the Fund related to the distribution and
servicing of its shares. These expenses include a service fee paid to each
securities dealer that enters into a sales agreement with MFD of up to 0.25% per
annum of the Fund's average daily net assets attributable to Class A shares
which are attributable to that securities dealer and a distribution fee to MFD
of up to 0.25% per annum of the Fund's average daily net assets attributable to
Class A shares. Distribution and service fees were waived during the six months
ended February 29, 2000.
Certain Class A shares are subject to a contingent deferred sales charge in the
event of a shareholder redemption within 12 months following purchase. There
were no contingent deferred sales charges imposed on Class A shares of the Fund
during the six months ended February 29, 2000.
Shareholder Servicing Agent - MFSC, a wholly owned subsidiary of MFS, earns a
fee for its services as shareholder servicing agent. The fee is calculated as a
percentage of the Fund's average daily net assets at an annual rate of 0.10%.
(4) Portfolio Securities
Purchases and sales of investments, other than U.S. government securities,
purchased option transactions, and short-term obligations, aggregated $2,812,677
and $2,508,504, respectively.
The cost and unrealized appreciation and depreciation in the value of the
investments owned by the Fund, as computed on a federal income tax basis, are as
follows:
Aggregate cost $4,498,909
----------
Gross unrealized appreciation $3,068,785
Gross unrealized depreciation (242,258)
----------
Net unrealized appreciation $2,826,527
==========
(5) Shares of Beneficial Interest
The Fund's Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest. Transactions in
Fund shares were as follows:
Class A Shares
<TABLE>
<CAPTION>
SIX MONTHS ENDED FEBRUARY 29, 2000 YEAR ENDED AUGUST 31, 1999
---------------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 18,122 $ 402,677 25,561 $ 413,378
Shares issued to shareholders in
reinvestment of distributions 18,434 365,363 2,820 42,099
Shares reacquired (16,415) (320,615) (28,878) (449,538)
------- ---------- ------- ----------
Net increase (decrease) 20,141 $ 447,425 (497) $ 5,939
======= ========== ======= ==========
<CAPTION>
Class I Shares
SIX MONTHS ENDED FEBRUARY 29, 2000 YEAR ENDED AUGUST 31, 1999
---------------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 48,513 $ $1,020,896 60,749 $ 953,785
Shares issued to shareholders in
reinvestment of distributions 36,180 717,449 5,842 87,223
Shares reacquired (18,393) (403,836) (84,872) (1,396,836)
------- ---------- ------- ----------
Net increase (decrease) 66,300 $1,334,509 (18,281) $ (355,828)
======= ========== ======= ==========
</TABLE>
(6) Line of Credit
The Fund and other affiliated funds participate in an $820 million unsecured
line of credit provided by a syndication of banks under a line of credit
agreement. Borrowings may be made to temporarily finance the repurchase of
Fund shares. Interest is charged to each fund, based on its borrowings, at a
rate equal to the bank's base rate. In addition, a commitment fee, based on
the average daily unused portion of the line of credit, is allocated among the
participating funds at the end of each quarter. The commitment fee allocated
to the Fund for the six months ended February 29, 2000, was $21. The Fund had
no borrowings during the period.
--------------------------------------------
This report is prepared for the general information of shareholders.
It is authorized for distribution to prospective investors only when
preceded or accompanied by a current prospectus.
<PAGE>
MFS(R) SCIENCE AND TECHNOLOGY FUND
[Logo] M F S(R)
INVESTMENT MANAGEMENT
We invented the mutual fund(R)
500 Boylston Street
Boston, MA 02116-3741
(c)2000 MFS Investment Management.(R)
MFS(R) investment products are offered through MFS Fund Distributors, Inc.,
500 Boylston Street, Boston, MA 02116
INC-3 4/00 1M
