<PAGE>
[Logo] M F S (R)
INVESTMENT MANAGEMENT
WE INVENTED THE MUTUAL FUND(R)
[Graphic Omitted]
MFS(R) GLOBAL
TELECOMMUNICATIONS
FUND
ANNUAL REPORT o AUGUST 31, 2000
-----------------------------------
MUTUAL FUND GIFT KITS (see page 30)
-----------------------------------
<PAGE>
TABLE OF CONTENTS
Letter from the Chairman .................................................. 1
Management Review and Outlook ............................................. 5
Portfolio of Investments .................................................. 10
Financial Statements ...................................................... 15
Notes to Financial Statements ............................................. 22
Independent Auditors' Report .............................................. 28
Trustees and Officers ..................................................... 33
MFS ORIGINAL RESEARCH(R)
RESEARCH HAS BEEN CENTRAL TO INVESTMENT MANAGEMENT AT MFS
SINCE 1932, WHEN WE CREATED ONE OF THE FIRST IN-HOUSE
RESEARCH DEPARTMENTS IN THE MUTUAL FUND (SM)
INDUSTRY. ORIGINAL RESEARCH(SM) AT MFS IS MORE ORIGINAL RESEARCH
THAN JUST CRUNCHING NUMBERS AND CREATING
ECONOMIC MODELS: IT'S GETTING TO KNOW MFS
EACH SECURITY AND EACH COMPANY PERSONALLY.
MAKES A DIFFERENCE
--------------------------------------------------------------------------------
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
--------------------------------------------------------------------------------
<PAGE>
LETTER FROM THE CHAIRMAN
[Photo of Jeffrey L. Shames]
Jeffrey L. Shames
Dear Shareholders,
If you've been reading our fund reports for any length of time, you've probably
sensed the pride we have in our research process. More than anything else, we
think MFS Original Research(R) -- and the performance results it has yielded for
shareholders -- make us unique among investment management companies. We think
that uniqueness stems from three factors: philosophy, process, and people.
PHILOSOPHY
In over 75 years of managing mutual funds, we've developed a number of beliefs
about the best ways to invest over a variety of market conditions. First, we
believe in bottom-up research, which means we use a company-by-company,
one-security-at-a-time approach to building a portfolio. What we look for is the
truth about the fundamentals of a company's business -- things such as the
ability of management to execute its business plan, the ability of that plan to
be scaled up as the company grows, actual demand for the company's products and
services, cash flows, profits, and earnings.
Second, we believe that, over the long term, stock prices follow earnings. In
our view, stock prices are basically a multiple of projected earnings, with the
multiple increasing as the market perceives that a company has something
customers want and will continue to want. One of the major elements of Original
Research(SM) is doing our best to project a company's future earnings and
determine how much the market will pay for those earnings.
Third, we believe there are at least three ways to potentially achieve
competitive long-term performance: be early, uncover second chances, and avoid
mistakes. All of these are based on bottom-up research. In both domestic and
international markets, early discovery has historically been a hallmark of our
investment style. Some of the stocks with which MFS has been most successful are
those in which we've taken large positions before the market discovered or
believed in them. Similarly, some of our best fixed-income investments have been
early positions in companies or governments that our research revealed were
potential candidates for credit upgrades. (A credit upgrade causes the value of
a bond to rise because it indicates the market has increased confidence that
principal and interest on the bond will be repaid.)
"Second-chance" opportunities are companies whose stock prices have stumbled but
that we believe still have the potential to be market leaders. For example, a
quarterly earnings shortfall of a few cents may cause the market to temporarily
lose confidence in a company. If we believe the business remains fundamentally
strong, we may use the price decline as a buying opportunity.
Avoiding mistakes is another way we feel Original Research may help performance.
In fixed-income investing this means, among other things, trying to be better
than our peers at avoiding bond issuers that may default. In equity investing,
avoiding mistakes means we strive to know a company and its industry well enough
to distinguish truth from hype.
PROCESS
We acquire our information firsthand, by researching thousands of companies to
determine which firms may make good investments. Our analysis of an individual
company may include
o face-to-face contact with senior management as well as front-line workers
o analysis of the company's financial statements and balance sheets
o contact with the company's current and potential customers
o contact with the company's competitors
o our own forecasts of the company's future market share, cash flows, and
earnings
Our analysts and portfolio managers disseminate this information in the form of
daily notes e-mailed worldwide to all members of our investment team. This
ensures that our best ideas are shared throughout the company, without barriers
between equity and fixed-income, international and domestic, or value and growth
investment areas. We believe this allows each of our portfolio managers -- and
thus each of our investors -- to potentially benefit from any relevant item of
Original Research.
John Ballen, our President and Chief Investment Officer, has often said that the
thought he hopes each manager will have when they read the daily notes is, "I
could never perform as well at any other investment company, because nowhere
else could the quality of the research be this good."
PEOPLE
Our team of research analysts and portfolio managers traces its roots back to
1932, when we created one of the first in-house research departments in the
industry. Today, we believe we have an investment team distinguished for its
unique blend of talent, continuity, and cohesiveness.
MFS' team culture and commitment to quality research have proven to be of
tremendous value in attracting some of the best and brightest talent from
leading business schools and from other investment management companies. Our
company culture was a key factor in our recognition by Fortune magazine in it's
January 10, 2000 issue as one of the "100 Best Companies to Work For" in
America. As befits a great team, our people tend to stick around -- the average
MFS tenure of our portfolio managers is 11 years, with over 16 years in the
investment industry. Contributing to this continuity is our policy that all
equity portfolio managers are promoted from within, after distinguishing
themselves first as research analysts. And because many of us who are now
managing funds or managing the company itself have been working together for
well over a decade, we have a cohesiveness, a shared philosophy of investing,
and a unity of purpose that we believe bodes well for the future of the
company.
We also have scale. Our research analyst team is over 35 members strong and
growing. Each analyst is our in-house expert on a specific industry or group of
industries in a specific region of the globe. In pursuing their research, our
analysts and portfolio managers each year will visit more than 2,000 companies
throughout the world, meet with representatives from more than 3,000 companies
at one of our four worldwide offices, attend roughly 5,000 company presentations
sponsored by major Wall Street firms, and consult with over 1,000 analysts from
hundreds of U.S. and foreign brokerage houses.
All of this culminates in our analysts making buy and sell recommendations on a
wide range of potential investments for all of our portfolios. In the end, the
goal of Original Research is to try to give our portfolio managers an advantage
over their peers -- to enable our managers to deliver competitive performance,
by finding opportunities before they are generally recognized by the market and
by avoiding mistakes whenever possible. Original Research does, we believe, make
a difference.
As always, we appreciate your confidence in MFS and welcome any questions or
comments you may have.
Respectfully,
/s/ Jeffrey L. Shames
Jeffrey L. Shames
Chairman and Chief Executive Officer
MFS Investment Management(R)
September 15, 2000
A prospectus containing more complete information on any MFS product, including
all charges and expenses, can be obtained from your investment professional.
Please read it carefully before you invest or send money. 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
[Photo of John E. Lathrop]
John E. Lathrop
The fund commenced investment operations on June 27, 2000.
Q. IN WHAT TYPES OF COMPANIES DOES THE FUND INVEST?
A. The fund invests in companies that we believe are on the cutting edge of
innovation or are benefiting from innovation in communications technology.
We see this as leading us to three major types of companies: content
providers, services companies that provide the networks over which the
content flows, and equipment companies that provide the infrastructure for
the networks. Within these three areas, we look at firms that are oriented
toward voice, video, and/or data content and transmission. Because we see
growth and innovation in telecommunications as a global phenomenon, the fund
is likely to have a significant international component.
Q. WHY DO YOU FEEL GLOBAL TELECOMMUNICATIONS IS A POTENTIALLY EXCITING AREA
FOR LONG-TERM INVESTORS?
A. We believe we're just at the beginning of what could be a long period of
innovation and growth for telecommunications companies all over the globe.
The focus of technological innovation worldwide appears to us to be shifting
away from personal computers and toward communications data networks such as
the Internet; we plan to position the fund to try to capitalize on that
change.
According to our research, we're currently in the early stages of an
acceleration of growth in the telecommunications area, fueled by
deregulation and technological innovation. A movement by governments to
deregulate the telecommunications industry began in the United States around
1996 and has progressively moved overseas. We feel deregulation is a
positive factor because it encourages new entrants into the industry. These
new competitors have tended to stimulate the entire industry by offering
lower costs, higher capacity networks, and more innovative products and
services.
Technological innovation is, we believe, the single most powerful factor
fueling growth. We have observed a tremendous amount of innovation by
software firms developing Web-based applications that improve productivity.
This application innovation has driven an increased demand for bandwidth,
which in turn has driven innovation in the equipment area. Equipment
innovations have reduced the cost of bandwidth, which in turn has allowed
more innovative applications to be developed. We see this as a "virtuous
circle" in which these various areas of technological innovation could
continually drive each other.
Q. HOW DO YOU EVALUATE POTENTIAL HOLDINGS FOR THE PORTFOLIO?
A. We look for stocks that fit three main criteria. First, in keeping with our
bottom-up Original Research(SM) process, we seek companies that we feel have
a solid business model with long-term potential. Since many companies in
this sector are quite young, research plays a critical role in evaluating
how we think business models may evolve and which companies may ultimately
generate attractive earnings -- because earnings, in our view, are the
strongest long-term driver of stock prices.
Second, we look for companies that we anticipate will experience some
positive change in the near future. Possible catalysts for change have
included accelerating revenues or an upcoming strategic move such as
acquiring another company. Third, our research tries to uncover companies
whose positive momentum, both short term and long term, has not yet been
recognized by the market and is not reflected in their stocks' valuations.
We try to anticipate change ahead of the market and then capitalize on it.
Q. WHAT ARE MFS' RESEARCH STRENGTHS IN THE TELECOMMUNICATIONS AREA?
A. We think telecommunications is an unrecognized specialty of our research
team that this fund will showcase. Companywide, we manage over $30 billion
in telecommunications holdings and have eight analysts covering the sector
in the United States, with another seven throughout Asia, Latin America, and
Europe. These analysts visit several hundred telecommunications companies
every year and talk to many of their managements on a daily basis. In a
sector that we see as globally driven, our physical presence around the
world gives us high confidence in our stock-picking ability in international
as well as U.S. markets.
/s/ John E. Lathrop
John E. Lathrop
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.
<PAGE>
--------------------------------------------------------------------------------
PORTFOLIO MANAGER'S PROFILE
--------------------------------------------------------------------------------
JOHN E. LATHROP, CFA IS VICE PRESIDENT OF MFS INVESTMENT MANAGEMENT(R) AND A
MEMBER OF OUR LARGE CAP GROWTH PORTFOLIO MANAGEMENT TEAM. HE MANAGES THE GLOBAL
TELECOMMUNICATIONS AND LARGE CAP GROWTH PORTFOLIOS FOR OUR MUTUAL FUNDS,
VARIABLE ANNUITIES, INSTITUTIONAL ACCOUNTS AND OFFSHORE FUNDS. JOHN JOINED MFS
IN 1994 FROM PUTNAM INVESTMENTS, WHERE HE HAD WORKED AS AN EQUITY ANALYST,
STATISTICAL ANALYST, AND INSTITUTIONAL ACCOUNT CONTROLLER SINCE 1988. HE WAS
NAMED VICE PRESIDENT IN 1996 AND PORTFOLIO MANAGER IN 1999.
HE IS A GRADUATE OF NORTHWESTERN UNIVERSITY, WHERE HE WAS ELECTED TO PHI BETA
KAPPA WITH HONORS IN ECONOMICS, AND HE EARNED AN M.B.A. DEGREE FROM CORNELL
UNIVERSITY'S JOHNSON GRADUATE SCHOOL OF MANAGEMENT. JOHN IS A CHARTERED
FINANCIAL ANALYST.
ALL EQUITY PORTFOLIO MANAGERS BEGAN THEIR CAREERS AT MFS INVESTMENT
MANAGEMENT(R) AS RESEARCH ANALYSTS. OUR PORTFOLIO MANAGERS ARE SUPPORTED BY AN
INVESTMENT STAFF OF OVER 100 PROFESSIONALS UTILIZING MFS ORIGINAL RESEARCH(R), A
GLOBAL, COMPANY-ORIENTED, BOTTOM-UP PROCESS OF SELECTING SECURITIES.
--------------------------------------------------------------------------------
Investments in foreign and emerging market securities may provide superior
returns, but also involve greater risk than U.S. investments. Investments in
foreign and emerging market securities may be favorably or unfavorably affected
by changes in interest rates and currency exchange rates, market conditions, and
the economic and political conditions of the countries where investments are
made. These risks may increase share price volatility. See the prospectus for
details.
By concentrating on one industry rather than diversifying among several, the
portfolio is more susceptible to greater adverse economic or regulatory
developments than a portfolio that invests more broadly.
The portfolio may focus on certain sectors, thereby increasing its vulnerability
to any single economic, political, or regulatory development.
The portfolio's geographic concentration makes it more volatile than a portfolio
that is more geographically diversifed.
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. A prospectus containing more information,
including the exchange privilege and all charges and expenses, for any MFS
product is available from your investment professional or by calling MFS at
1-800-225-2606. Please read it carefully before investing or sending money.
<PAGE>
--------------------------------------------------------------------------------
FUND FACTS
--------------------------------------------------------------------------------
OBJECTIVE: SEEKS LONG-TERM GROWTH OF CAPITAL.
COMMENCEMENT OF
INVESTMENT OPERATIONS: JUNE 27, 2000
CLASS INCEPTION: CLASS A JUNE 27, 2000
CLASS B JUNE 27, 2000
CLASS C JUNE 27, 2000
CLASS I AUGUST 9, 2000
SIZE: $237.3 MILLION NET ASSETS AS OF AUGUST 31, 2000
--------------------------------------------------------------------------------
PORTFOLIO CONCENTRATION AS OF AUGUST 31, 2000
FIVE LARGEST STOCK INDUSTRIES
TELEPHONE SERVICES 26.8%
NETWORK & TELECOMMUNICATIONS 26.8%
COMPUTER SOFTWARE 14.9%
CELLULAR TELEPHONE 10.7%
COMPUTER SYSTEMS 5.8%
TOP 10 STOCK HOLDINGS
<TABLE>
<S> <C>
CORNING, INC. 5.4% CISCO SYSTEMS, INC. 2.8%
Materials and equipment supplier to Computer network developer
communications industries
TIME WARNER TELECOM, INC. 2.0%
VERISIGN, INC. 3.3% Local fiber-optic communications provider
U.S.-based provider of Internet domain name
registration and trust services, including QWEST COMMUNICATIONS INTERNATIONAL,
authentication, validation, and payment INC. 1.9%
Internet data communications company
EMC CORP. 3.3%
Provider of electronic data storage solutions CIENA CORP. 1.8%
Optical networking equipment company
NORTEL NETWORKS CORP. 3.1%
Designer and developer of data and telephony TYCOM LTD. 1.8%
networks Independent provider of undersea fiber-optic
networks and services.
METROMEDIA FIBER NETWORK, INC. 2.8%
Fiber-optic infrastructure provider
</TABLE>
The portfolio is actively managed, and current holdings may be different.
<PAGE>
PORTFOLIO OF INVESTMENTS -- August 31, 2000
Stocks - 93.4%
-------------------------------------------------------------------------------
ISSUER SHARES VALUE
-------------------------------------------------------------------------------
U.S. Stocks - 71.1%
Business Machines - 2.0%
Affiliated Computer Services, Inc., "A"* 21,600 $ 1,005,750
Sun Microsystems, Inc.* 30,100 3,820,819
------------
$ 4,826,569
-------------------------------------------------------------------------------
Business Services - 4.0%
BEA Systems, Inc.* 27,700 $ 1,885,331
Computer Sciences Corp.* 40,600 3,209,937
First Data Corp. 33,000 1,573,688
Nextel Partners, Inc.* 86,700 2,617,256
S1 Corp.* 3,400 59,288
------------
$ 9,345,500
-------------------------------------------------------------------------------
Cellular Telephones - 3.1%
Motorola, Inc. 100,200 $ 3,613,462
Sprint Corp. (PCS Group)* 72,500 3,638,594
------------
$ 7,252,056
-------------------------------------------------------------------------------
Communication Services - 0.6%
SBA Communications Corp.* 33,700 $ 1,503,862
-------------------------------------------------------------------------------
Computer Software - Personal Computers - 0.8%
Mercury Interactive Corp.* 15,700 $ 1,918,344
-------------------------------------------------------------------------------
Computer Software - Services - 5.0%
Blue Martini Software, Inc.* 80 $ 5,560
EMC Corp.* 74,100 7,261,800
Internet Security Systems, Inc.* 8,600 696,600
Netegrity, Inc.* 23,000 2,024,000
Portal Software, Inc.* 19,000 1,049,750
Talarian Corp.* 60 1,103
TIBCO Software, Inc.* 8,200 835,887
------------
$ 11,874,700
-------------------------------------------------------------------------------
Computer Software - Systems - 9.1%
Comverse Technology, Inc.* 25,100 $ 2,307,631
Digex, Inc.* 27,900 2,362,781
E.piphany, Inc.* 19,400 2,017,600
Extreme Networks, Inc.* 31,900 2,968,694
Foundry Networks, Inc.* 24,600 2,289,338
I2 Technologies, Inc.* 12,800 2,165,600
MMC Networks, Inc.* 8,000 974,500
Rational Software Corp.* 29,000 3,731,937
VERITAS Software Corp.* 22,200 2,676,488
------------
$ 21,494,569
-------------------------------------------------------------------------------
Electronics - 0.5%
National Semiconductor Corp.* 28,100 $ 1,250,450
-------------------------------------------------------------------------------
Entertainment - 2.6%
Emmis Broadcasting Corp., "A"* 25,200 $ 826,875
Infinity Broadcasting Corp., "A"* 31,400 1,189,275
USA Networks, Inc.* 72,400 1,742,125
Viacom, Inc., "B"* 34,000 2,288,625
------------
$ 6,046,900
-------------------------------------------------------------------------------
Financial Institutions
Goldman Sachs Group, Inc. 400 $ 51,225
-------------------------------------------------------------------------------
Internet - 3.1%
VeriSign, Inc.* 37,000 $ 7,358,375
-------------------------------------------------------------------------------
Medical and Health Technology and Services
Illumina Inc.* 60 $ 2,685
-------------------------------------------------------------------------------
Printing and Publishing - 0.2%
Scholastic Corp.* 7,400 $ 474,988
-------------------------------------------------------------------------------
Telecommunications - 39.7%
ADC Telecommunications, Inc.* 84,300 $ 3,451,031
Allegiance Telecom, Inc.* 71,100 3,541,669
Alltel Corp. 24,000 1,213,500
Amdocs Ltd.* 43,900 3,136,106
American Tower Corp., "A"* 57,500 2,087,969
AT&T Corp. 18,900 494,944
AT&T Corp., "A"* 55,000 1,175,625
BroadWing, Inc.* 121,100 3,383,231
Cabletron Systems, Inc.* 92,900 3,477,944
California Amplifier, Inc.* 50,500 2,108,375
CIENA Corp.* 17,600 3,901,700
Cisco Systems, Inc.* 88,900 6,100,762
Corning, Inc. 36,250 11,887,734
Corvis Corp.* 750 77,859
Crown Castle International Corp.* 48,900 1,696,219
Emulex Corp.* 12,000 1,256,250
Focal Communications Corp.* 29,300 906,469
Level 3 Communications, Inc.* 24,700 2,154,689
Metromedia Fiber Network, Inc., "A"* 153,800 6,142,387
MGC Communications, Inc.* 48,450 899,353
Mpower Communications Corp.* 3,700 88,238
Netro Corp.* 29,100 2,404,388
NEXTEL Communications, Inc.* 7,100 393,606
Nextlink Communications, Inc., "A"* 67,200 2,356,200
NTL, Inc.* 43,900 1,923,369
ONI Systems Corp.* 300 28,594
Pinnacle Holdings, Inc.* 21,900 881,475
Powerwave Technologies, Inc.* 79,200 3,811,500
Qwest Communications International, Inc.* 83,400 4,305,525
RF Micro Devices, Inc.* 69,500 3,101,438
Sprint Corp. 10,700 358,450
Tekelec Co.* 52,800 2,085,600
Tellabs, Inc.* 36,700 2,062,081
Time Warner Telecom, Inc.* 69,100 4,487,181
UnitedGlobalCom, Inc.* 26,500 1,015,281
Verizon Communications 67,946 2,964,144
Vignette Corp.* 36,100 1,376,313
Winstar Communications, Inc.* 57,000 1,531,875
------------
$ 94,269,074
-------------------------------------------------------------------------------
Telecommunications and Cable - 0.4%
Comcast Corp., "A"* 27,800 $ 1,035,550
-------------------------------------------------------------------------------
Total U.S. Stocks $168,704,847
-------------------------------------------------------------------------------
Foreign Stocks - 22.3%
Australia - 1.0%
Cable & Wireless Optus Ltd.
(Telecommunications) 908,400 $ 2,419,040
-------------------------------------------------------------------------------
Bermuda - 3.2%
Global Crossing Ltd. (Telecommunications)* 121,300 $ 3,646,581
Tycom Ltd. (Telecommunications)* 93,300 3,883,613
------------
$ 7,530,194
-------------------------------------------------------------------------------
Brazil - 1.7%
Brasil Telecom Participacoes, ADR
(Telecommunications) 34,900 $ 2,458,269
Telemig Celular Participacoes S.A., ADR
(Telecommunications) 24,200 1,573,000
------------
$ 4,031,269
-------------------------------------------------------------------------------
Canada - 3.4%
Nortel Networks Corp. (Telecommunications) 83,900 $ 6,843,094
Telesystem International Wireless, Inc.
(Telecommunications)* 67,900 1,234,931
------------
$ 8,078,025
-------------------------------------------------------------------------------
Finland - 1.3%
Nokia Corp., ADR (Telecommunications) 49,700 $ 2,233,394
Sonera Oyj (Telecommunications) 22,900 764,086
------------
$ 2,997,480
-------------------------------------------------------------------------------
France - 0.8%
Business Objects S.A., ADR
(Computer Software - Systems)* 6,700 $ 767,150
Vivendi S.A. (Business Services) 14,800 1,208,283
------------
$ 1,975,433
-------------------------------------------------------------------------------
Hong Kong - 1.3%
China Mobile Ltd. (Telecommunications) 414,000 $ 3,185,228
-------------------------------------------------------------------------------
Hungary - 0.2%
Magyar Tavkozlesi Rt., ADR
(Telecommunications) 19,600 $ 553,700
-------------------------------------------------------------------------------
Israel - 1.5%
Check Point Software Technologies Ltd.
(Computer Software - Services)* 20,700 $ 3,018,319
Giganet Ltd. (Telecommunications)* 40 1,167
Partner Communications Co. Ltd., ADR
(Cellular Telephones)* 53,000 503,500
------------
$ 3,522,986
-------------------------------------------------------------------------------
Japan - 0.4%
NTT Mobile Communications Network, Inc.
(Telecommunications) 31 $ 820,075
-------------------------------------------------------------------------------
Mexico - 0.9%
Telefonos de Mexico S.A., ADR
(Telecommunications) 38,900 $ 2,117,619
-------------------------------------------------------------------------------
Netherlands - 1.9%
Completel Europe N.V. (Telecommunications)* 145,900 $ 1,272,706
United Pan-Europe Communications N.V.
(Telecommunications)* 57,200 1,396,387
Versatel Telecommunications N.V.
(Telecommunications)* 67,700 1,928,470
------------
$ 4,597,563
-------------------------------------------------------------------------------
South Korea - 0.2%
Samsung Electronics Co. (Electronics)## 3,600 $ 452,700
-------------------------------------------------------------------------------
Spain - 0.6%
Telefonica S.A. (Telecommunications)* 70,300 $ 1,347,499
-------------------------------------------------------------------------------
Sweden - 0.7%
Tele1 Europe Holdings AB (Telecommunications)* 127,100 $ 1,562,683
-------------------------------------------------------------------------------
United Kingdom - 3.2%
COLT Telecom Group PLC (Telecommunications)* 44,600 $ 1,500,964
Energis PLC (Telecommunications)* 324,800 2,963,564
Vodafone Group PLC (Telecommunications)* 799,300 3,226,210
------------
$ 7,690,738
-------------------------------------------------------------------------------
Total Foreign Stocks $ 52,882,232
-------------------------------------------------------------------------------
Total Stocks (Identified Cost, $210,009,446) $221,587,079
-------------------------------------------------------------------------------
Short-Term Obligations - 10.1%
-------------------------------------------------------------------------------
PRINCIPAL AMOUNT
ISSUER (000 OMITTED) VALUE
-------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., due 9/01/00,
at Amortized Cost $ 24,000 $ 24,000,000
-------------------------------------------------------------------------------
Total Investments (Identified Cost, $234,009,446) $245,587,079
Other Assets, Less Liabilities - (3.5)% (8,281,709)
-------------------------------------------------------------------------------
Net Assets - 100.0% $237,305,370
-------------------------------------------------------------------------------
* Non-income producing security.
## SEC Rule 144A restriction.
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
-------------------------------------------------------------------------------
AUGUST 31, 2000
-------------------------------------------------------------------------------
Assets:
Investments, at value (identified cost, $234,009,446) $245,587,079
Investments of cash collateral for securities loaned, at
identified cost and value 37,680,097
Cash 78,347
Receivable for investments sold 1,235,823
Receivable for fund shares sold 3,952,226
Interest and dividends receivable 11,078
------------
Total assets $288,544,650
------------
Liabilities:
Payable for investments purchased $ 13,394,338
Payable for fund shares reacquired 151,487
Collateral for securities loaned, at value 37,680,097
Payable to affiliates -
Management fee 6,300
Reimbursement fee 2,204
Distribution and service fee 4,854
------------
Total liabilities $ 51,239,280
------------
Net assets $237,305,370
============
Net assets consist of:
Paid-in capital $228,146,035
Unrealized appreciation on investments and translation
of assets and liabilities in foreign currencies 11,577,633
Accumulated net realized loss on investments and
foreign currency transactions (2,418,298)
------------
Total $237,305,370
============
Shares of beneficial interest outstanding 23,012,207
==========
Class A shares:
Net asset value per share (net assets of $84,282,999 /
8,176,122 shares of beneficial interest outstanding) $10.31
======
Offering price per share (100 / 94.25 of net asset
value per share) $10.94
======
Class B shares:
Net asset value and offering price per share
(net assets of $112,169,525 / 10,874,110 shares of
beneficial interest outstanding) $10.32
======
Class C shares:
Net asset value and offering price per share
(net assets of $40,852,633 / 3,961,954 shares of
beneficial interest outstanding) $10.31
======
Class I shares:
Net asset value, offering price, and redemption price
per share (net assets of $213 / 20.661 shares of
beneficial interest outstanding) $10.31
======
On sales of $50,000 or more, the offering price of Class A shares is reduced. A
contingent deferred sales charge may be imposed on redemptions of Class A, Class
B, and Class C shares.
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS -- continued
Statement of Operations
------------------------------------------------------------------------------
PERIOD ENDED AUGUST 31, 2000*
------------------------------------------------------------------------------
Net investment income (loss):
Income -
Interest $ 301,154
Dividends 19,867
Foreign taxes withheld (235)
-----------
Total investment income $ 320,786
-----------
Expenses -
Management fee $ 345,838
Shareholder servicing agent fee 34,582
Distribution and service fee (Class A) 43,388
Distribution and service fee (Class B) 163,119
Distribution and service fee (Class C) 58,553
Administrative fee 5,963
Custodian fee 18,435
Printing 20,623
Postage 16,471
Auditing fees 20,300
Legal fees 1,399
Registration fees 114,270
Miscellaneous 17,552
-----------
Total expenses $ 860,493
Fees paid indirectly (7,380)
Reduction of expenses by investment adviser (121,442)
-----------
Net expenses $ 731,671
-----------
Net investment loss $ (410,885)
-----------
Realized and unrealized gain (loss) on investments:
Realized loss (identified cost basis) -
Investment transactions $(2,418,298)
Foreign currency transactions (585)
-----------
Net realized loss on investments and foreign
currency transactions $(2,418,883)
-----------
Change in unrealized appreciation on investments $11,577,633
-----------
Net realized and unrealized gain on investments and
foreign currency $ 9,158,750
-----------
Increase in net assets from operations $ 8,747,865
===========
* For the period from the commencement of the fund's investment operations,
June 27, 2000, through August 31, 2000.
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS -- continued
Statement of Changes in Net Assets
------------------------------------------------------------------------------
PERIOD ENDED AUGUST 31, 2000*
------------------------------------------------------------------------------
Increase (decrease) in net assets:
From operations -
Net investment loss $ (410,885)
Net realized loss on investments and foreign
currency transactions (2,418,883)
Net unrealized gain on investments and foreign
currency translation 11,577,633
------------
Increase in net assets from operations $ 8,747,865
------------
Net increase in net assets from fund share transactions $228,557,505
------------
Total increase in net assets $237,305,370
Net assets:
At beginning of period --
------------
At end of period $237,305,370
============
* For the period from the commencement of the fund's investment operations,
June 27, 2000, through August 31, 2000.
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS -- continued
Financial Highlights
------------------------------------------------------------------------------
PERIOD ENDED
AUGUST 31, 2000*
------------------------------------------------------------------------------
CLASS A
------------------------------------------------------------------------------
Per share data (for a share outstanding throughout the period):
Net asset value - beginning of period $10.00
------
Income from investment operations# -
Net investment loss(S) $(0.01)
Net realized and unrealized gain on investments and
foreign currency 0.32
------
Total from investment operations $ 0.31
------
Net asset value - end of period $10.31
======
Total return(+) 3.10%++
Ratios (to average net assets)/Supplemental data(S):
Expenses## 1.72%+
Net investment loss (0.76)%+
Portfolio turnover 17%
Net assets at end of period (000 Omitted) $84,283
(S) Subject to reimbursement by the fund, the investment adviser voluntarily
agreed under a temporary expense reimbursement agreement to pay all of the
fund's operating expenses, exclusive of management and distribution and
service fees. In consideration, the fund pays the investment adviser a
reimbursement fee not greater than 0.35% of average daily net assets. To the
extent actual expenses were over this limitation, the net investment loss
per share and the ratios would have been:
Net investment loss $(0.02) Ratios (to average net assets):
Expenses## 2.07%+
Net investment loss (1.11)%+
* For the period from the commencement of the fund's investment operations,
June 27, 2000, through August 31, 2000.
+ Annualized.
++ Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset
arrangements.
(+) Total returns for Class A shares do not include the applicable sales
charge. If the charge had been included, the results would have been lower.
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS -- continued
Financial Highlights - continued
-----------------------------------------------------------------------------
PERIOD ENDED
AUGUST 31, 2000*
-----------------------------------------------------------------------------
CLASS B
-----------------------------------------------------------------------------
Per share data (for a share outstanding throughout the period):
Net asset value - beginning of period $10.00
------
Income from investment operations# -
Net investment loss(S) $(0.03)
Net realized and unrealized gain on investments and
foreign currency 0.35
------
Total from investment operations $ 0.32
------
Net asset value - end of period $10.32
======
Total return 3.10%++
Ratios (to average net assets)/Supplemental data(S):
Expenses## 2.37%+
Net investment loss (1.41)%+
Portfolio turnover 17%
Net assets at end of period (000 Omitted) $112,170
(S) Subject to reimbursement by the fund, the investment adviser voluntarily
agreed under a temporary expense reimbursement agreement to pay all of the
fund's operating expenses, exclusive of management and distribution and
service fees. In consideration, the fund pays the investment adviser a
reimbursement fee not greater than 0.35% of average daily net assets. To the
extent actual expenses were over this limitation, the net investment loss
per share and the ratios would have been:
Net investment loss $(0.03)
Ratios (to average net assets):
Expenses## 2.72%+
Net investment loss (1.76)%+
* For the period from the commencement of the fund's investment operations,
June 27, 2000, through August 31, 2000.
+ Annualized.
++ Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset
arrangements.
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS -- continued
Financial Highlights - continued
----------------------------------------------------------------------------
PERIOD ENDED
AUGUST 31, 2000*
----------------------------------------------------------------------------
CLASS C
----------------------------------------------------------------------------
Per share data (for a share outstanding throughout the period):
Net asset value - beginning of period $10.00
------
Income from investment operations# -
Net investment loss(S) $(0.03)
Net realized and unrealized gain on investments and
foreign currency 0.34
------
Total from investment operations $ 0.31
------
Net asset value - end of period $10.31
======
Total return 3.10%++
Ratios (to average net assets)/Supplemental data(S):
Expenses## 2.37%+
Net investment loss (1.41)%+
Portfolio turnover 17%
Net assets at end of period (000 Omitted) $40,853
(S) Subject to reimbursement by the fund, the investment adviser voluntarily
agreed under a temporary expense reimbursement agreement to pay all of the
fund's operating expenses, exclusive of management and distribution and
service fees. In consideration, the fund pays the investment adviser a
reimbursement fee not greater than 0.35% of average daily net assets. To the
extent actual expenses were over this limitation, the net investment loss
per share and the ratios would have been:
Net investment loss $(0.03)
Ratios (to average net assets):
Expenses## 2.72%+
Net investment loss (1.76)%+
* For the period from the commencement of the fund's investment operations,
June 27, 2000, through August 31, 2000.
+ Annualized.
++ Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset
arrangements.
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS -- continued
Financial Highlights - continued
----------------------------------------------------------------------------
PERIOD ENDED
AUGUST 31, 2000*
----------------------------------------------------------------------------
CLASS I
----------------------------------------------------------------------------
Per share data (for a share outstanding throughout the period):
Net asset value - beginning of period $ 9.63
------
Income from investment operations# -
Net investment loss(S) $ -- +++
Net realized and unrealized gain on investments and
foreign currency 0.68
------
Total from investment operations $ 0.68
------
Net asset value - end of period $10.31
======
Total return 3.10%++
Ratios (to average net assets)/Supplemental data(S):
Expenses## 1.37%+
Net investment loss -- +
Portfolio turnover 17%
Net assets at end of period $213
(S) Subject to reimbursement by the fund, the investment adviser voluntarily
agreed under a temporary expense reimbursement agreement to pay all of the
fund's operating expenses, exclusive of management fee. In consideration,
the fund pays the investment adviser a reimbursement fee not greater than
0.35% of average daily net assets. To the extent actual expenses were over
this limitation, the net investment loss per share and the ratios would have
been:
Net investment loss $ -- +++
Ratios (to average net assets):
Expenses## 1.72%+
Net investment loss (0.35)%+
** For the period from the inception of Class I shares, August 9, 2000,
through August 31, 2000.
+ Annualized.
++ Not annualized.
+++ Per share amount was less than $0.01.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset
arrangements.
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(1) Business and Organization
MFS Global Telecommunications Fund (the fund) is a non-diversified series of MFS
Series Trust I (the trust). The trust is organized as a Massachusetts business
trust and is registered under the Investment Company Act of 1940, as amended, as
an open-end management investment company.
(2) Significant Accounting Policies
General - The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. 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.
Security Loans - State Street Bank and Trust Company ("State Street"), as
lending agent, may loan the securities of the fund to certain qualified
institutions (the "Borrowers") approved by the fund. The loans are
collateralized at all times by cash and/or U.S. Treasury securities in an amount
at least equal to the market value of the securities loaned. State Street
provides the fund with indemnification against Borrower default. The fund bears
the risk of loss with respect to the investment of cash collateral.
Cash collateral is invested in short-term securities. A portion of the income
generated upon investment of the collateral is remitted to the Borrowers, and
the remainder is allocated between the fund and the lending agent. On loans
collateralized by U.S. Treasury securities, a fee is received from the Borrower,
and is allocated between the fund and the lending agent. Income from securities
lending is included in interest income on the Statement of Operations. The
dividend and interest income earned on the securities loaned is accounted for in
the same manner as other dividend and interest income.
At August 31, 2000, the value of securities loaned was $36,574,159. These loans
were collateralized by cash of $37,680,097 which was invested in the following
short-term obligation:
IDENTIFIED COST
SHARES AND VALUE
------------------------------------------------------------------------------
Navigator Securities Lending Prime Portfolio 37,680,097 $37,680,097
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 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 total 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 only distributions in excess of tax basis earnings and profits are
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. During
the period ended August 31, 2000, accumulated net investment income increased by
$410,885, accumulated undistributed net realized gain on investments and foreign
currency transactions increased by $585 and paid in capital decreased by
$411,470 due to differences between book and tax accounting for foreign currency
transactions and the offset of net investment loss against paid in capital. This
change had no effect on the net assets or net asset value per share.
At August 31, 2000, the fund, for federal income tax purposes, had a capital
loss carryforward of $1,887,227 which may be applied against any net taxable
realized gains of each succeeding year until the earlier of its utilization or
expiration on August 31, 2008.
Multiple Classes of Shares of Beneficial Interest - The fund offers multiple
classes of shares that 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 1.00% of
the fund's average daily net assets.
The fund has a temporary expense reimbursement agreement whereby MFS has
voluntarily agreed to pay all of the fund's operating expenses, exclusive of
management, distribution, and service fees. The fund in turn will pay MFS an
expense reimbursement fee not greater than 0.35% of average daily net assets. To
the extent that the expense reimbursement fee exceeds the fund's actual
expenses, the excess will be applied to amounts paid by MFS in prior years. At
August 31, 2000, aggregate unreimbursed expenses amounted to $121,442.
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 incurs an administrative fee at
the following annual percentages of the fund's average daily net assets:
First $2 billion 0.0175%
Next $2.5 billion 0.0130%
Next $2.5 billion 0.0005%
In excess of $7 billion 0.0000%
Distributor - MFD, a wholly owned subsidiary of MFS, as distributor, received
$456,436 for the period ended August 31, 2000, as its portion of the sales
charge on sales of Class A shares of the fund.
The Trustees have adopted a distribution plan for Class A, Class B, and Class C
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 0.35% per
annum of its average daily net assets attributable to Class A shares in order
that MFD may pay expenses on behalf of the fund related to the distribution and
servicing of its shares. These expenses include a service fee 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 0.10% per annum of the fund's average daily net assets attributable to
Class A shares. MFD retains the service fee for accounts not attributable to a
securities dealer, which amounted to $21 for the period ended August 31, 2000.
Fees incurred under the distribution plan during the period ended August 31,
2000, were 0.35% of average daily net assets attributable to Class A shares on
an annualized basis.
The fund's distribution plan provides that the fund will pay MFD a distribution
fee of 0.75% per annum, and a service fee of up to 0.25% per annum, of the
fund's average daily net assets attributable to Class B and Class C shares. MFD
will pay to securities dealers that enter into a sales agreement with MFD all or
a portion of the service fee attributable to Class B and Class C shares, and
will pay to such securities dealers all of the distribution fee attributable to
Class C shares. The service fee is intended to be consideration for services
rendered by the dealer with respect to Class B and Class C shares. MFD retains
the service fee for accounts not attributable to a securities dealer, which
amounted to $0 and $0 for Class B and Class C shares, respectively, for the
period ended August 31, 2000. Fees incurred under the distribution plan during
the year ended August 31, 2000, were 1.00% and 1.00% of average daily net assets
attributable to Class B and Class C shares, respectively, on an annualized
basis.
Certain Class A and Class C shares are subject to a contingent deferred sales
charge in the event of a shareholder redemption within 12 months following
purchase. A contingent deferred sales charge is imposed on shareholder
redemptions of Class B shares in the event of a shareholder redemption within
six years of purchase. MFD receives all contingent deferred sales charges.
Contingent deferred sales charges imposed during the period ended August 31,
2000, were $0, $727, and $0 for Class A, Class B, and Class C shares,
respectively.
Shareholder Servicing Agent - MFSC, a wholly owned subsidiary of MFS, earns a
fee for its services as shareholder servicing agent. The fee is calculated as a
percentage of the 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
$242,937,933 and $30,510,190, 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 $234,591,400
------------
Gross unrealized appreciation $ 21,733,118
Gross unrealized depreciation (10,737,439)
------------
Net unrealized appreciation $ 10,995,679
============
(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
PERIOD ENDED AUGUST 31, 2000*
-----------------------------
SHARES AMOUNT
-----------------------------------------------------------------------------
Shares sold 8,281,321 $ 82,306,045
Shares reacquired (105,199) (1,030,542)
---------- ------------
Net increase 8,176,122 $ 81,275,503
========== ============
Class B shares
PERIOD ENDED AUGUST 31, 2000*
-----------------------------
SHARES AMOUNT
-----------------------------------------------------------------------------
Shares sold 10,925,118 $108,456,203
Shares reacquired (51,008) (499,045)
---------- ------------
Net increase 10,874,110 $107,957,158
========== ============
Class C shares
PERIOD ENDED AUGUST 31, 2000*
-----------------------------
SHARES AMOUNT
-----------------------------------------------------------------------------
Shares sold 4,033,511 $ 40,026,419
Shares reacquired (71,557) (701,775)
---------- ------------
Net increase 3,961,954 $ 39,324,644
========== ============
Class I shares
PERIOD ENDED AUGUST 31, 2000**
-----------------------------
SHARES AMOUNT
-----------------------------------------------------------------------------
Shares sold 20.661 $ 200
---------- ------------
Net increase 20.661 $ 200
========== ============
* For the period from the commencement of the fund's investment operations,
June 27, 2000, through August 31, 2000.
** For the period from the inception of Class I shares, August 9, 2000, through
August 31, 2000.
(6) Line of Credit
The fund and other affiliated funds participate in a $1.1 billion unsecured line
of credit provided by a syndication of banks under a line of credit agreement.
Borrowings may be made for temporary financing needs. Interest is charged to
each fund, based on its borrowings, at a rate equal to the bank's base rate. In
addition, a commitment fee, based on the average daily unused portion of the
line of credit, is allocated among the participating funds at the end of each
quarter. The commitment fee allocated to the fund for the period ended August
31, 2000, was $200. The fund had no significant borrowings during the period.
<PAGE>
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS
To the Trustees of the MFS Series Trust I and the Shareholders of
MFS Global Telecommunications Fund:
We have audited the accompanying statement of assets and liabilities of MFS
Global Telecommunications Fund (the fund), including the schedule of portfolio
investments, as of August 31, 2000, and the related statement of operations, the
statement of changes in net assets and the financial highlights from June 27,
2000 (commencement of operations) to August 31, 2000. These financial statements
and financial highlights are the responsibility of the fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned at August 31, 2000, by correspondence with the
custodian and brokers or by other appropriate auditing procedures where replies
from brokers were not received. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of MFS
Global Telecommunications Fund at August 31, 2000, the results of its
operations, the changes in its net assets and the financial highlights from June
27, 2000 (commencement of operations) to August 31, 2000, in conformity with
accounting principles generally accepted in the United States.
ERNST & YOUNG LLP
Boston, Massachusetts
October 9, 2000
<PAGE>
--------------------------------------------------------------------------------
FEDERAL TAX INFORMATION
--------------------------------------------------------------------------------
IN JANUARY 2001, SHAREHOLDERS WILL BE MAILED A TAX FORM SUMMARY OR FORM
1099-DIV, IF APPLICABLE, REPORTING THE FEDERAL TAX STATUS OF ALL DISTRIBUTIONS
PAID DURING THE CALENDAR YEAR 2000.
--------------------------------------------------------------------------------
<PAGE>
<TABLE>
MFS(R) GLOBAL TELECOMMUNICATIONS FUND
<S> <C>
TRUSTEES ASSISTANT TREASURERS
Marshall N. Cohan+ - Private Investor Mark E. Bradley*
Robert R. Flaherty*
Lawrence H. Cohn, M.D.+ - Chief of Cardiac Laura F. Healy*
Surgery, Brigham and Women's Hospital; Ellen Moynihan*
Professor of Surgery, Harvard Medical School
SECRETARY
The Hon. Sir J. David Gibbons, KBE+ - Chief Stephen E. Cavan*
Executive Officer, Edmund Gibbons Ltd.;
Chairman, Colonial Insurance Company, Ltd. ASSISTANT SECRETARY
James R. Bordewick, Jr.*
Abby M. O'Neill+ - Private Investor
CUSTODIAN
Walter E. Robb, III+ - President and Treasurer, State Street Bank and Trust Company
Benchmark Advisors, Inc. (corporate financial
consultants); President, Benchmark Consulting AUDITORS
Group, Inc. (office services) Ernst & Young LLP
Arnold D. Scott* - Senior Executive INVESTOR INFORMATION
Vice President, Director, and Secretary, For information on MFS mutual funds, call your
MFS Investment Management investment professional or, for an information
kit, call toll free: 1-800-637-2929 any
Jeffrey L. Shames* - Chairman and Chief business day from 9 a.m. to 5 p.m. Eastern time
Executive Officer, MFS Investment Management (or leave a message anytime).
J. Dale Sherratt+ - President, Insight INVESTOR SERVICE
Resources, Inc. (acquisition planning MFS Service Center, Inc.
specialists) P.O. Box 2281
Boston, MA 02107-9906
Ward Smith+ - Former Chairman (until 1994),
NACCO Industries (holding company) For general information, call toll free:
1-800-225-2606 any business day from
INVESTMENT ADVISER 8 a.m. to 8 p.m. Eastern time.
Massachusetts Financial Services Company
500 Boylston Street For service to speech- or hearing-impaired,
Boston, MA 02116-3741 call toll free: 1-800-637-6576 any business day
from 9 a.m. to 5 p.m. Eastern time. (To use
DISTRIBUTOR this service, your phone must be equipped with
MFS Fund Distributors, Inc. a 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:
CHAIRMAN AND PRESIDENT 1-800-MFS-TALK (1-800-637-8255) anytime from a
Jeffrey L. Shames* touch-tone telephone.
PORTFOLIO MANAGER WORLD WIDE WEB
John E. Lathrop* www.mfs.com
TREASURER
James O. Yost*
+ Independent Trustee
* MFS Investment Management
</TABLE>
<PAGE>
MFS(R) GLOBAL TELECOMMUNICATIONS FUND ------------
BULK RATE
U.S. POSTAGE
[Logo] M F S(R) PAID
INVESTMENT MANAGEMENT MFS
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
MGT-2 10/00 28M 1009/1209/1309/1809
