<PAGE> 1
[LOGO: MFS] Annual Report
for Year Ended
November 30, 1996
- ------------------------------------------------------------------------------
MFS[Registered Mark] Gold & Natural Resources Fund
- ------------------------------------------------------------------------------
--------------------------------------------------------------
America learns how "We invented the mutual fund, (see page 23)
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<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
Letter from the Chairman................................................... 1
Portfolio Manager's Overview............................................... 3
Portfolio Manager's Profile................................................ 4
Performance Summary........................................................ 5
Fund Facts................................................................. 7
Portfolio of Investments................................................... 8
Financial Statements....................................................... 10
Notes to Financial Statements.............................................. 16
Independent Auditors' Report............................................... 21
It's Easy to Contact Us.................................................... 22
The MFS Family of Funds.................................................... 24
Trustees and Officers...................................................... 25
</TABLE>
HIGHLIGHTS
- - DURING THE FISCAL YEAR ENDED NOVEMBER 30, 1996, THE FUND'S CLASS A AND CLASS
B SHARES ACHIEVED NET ASSET VALUE TOTAL RETURNS OF 5.37% AND 4.21%,
RESPECTIVELY, VERSUS A DECLINE OF 0.8% FOR THE FINANCIAL TIMES GOLD MINES
INDEX.
- - THE FUND WAS ABLE TO OUTPERFORM THE INDEX IN PART BECAUSE OF ITS
UNDERWEIGHTING IN AFRICA, WHICH CONTINUES TO BE PLAGUED BY HIGHER-COST MINES
WHICH SUFFER NEGATIVE OPERATING LEVERAGE WHEN THE PRICE OF GOLD IS WEAK.
- - THE ECONOMIC ENVIRONMENT OF MODERATE INFLATION AND HIGH REAL (ADJUSTED FOR
INFLATION) INTEREST RATES HAS CONTINUED TO PUSH DOWN GOLD PRICES, WHICH FELL
FROM OVER $400 AN OUNCE IN JANUARY 1996 TO $371.90 BY THE END OF NOVEMBER
1996.
- - THE FUND BENEFITED FROM ITS HOLDINGS IN NORTH AMERICA, WHERE THERE WERE
EXCITING NEW DISCOVERIES OF MINES AND EXPANSIONS OF EXISTING MINES. WE
BELIEVE THIS WILL SUPPORT INCREASED FUTURE LOW-COST PRODUCTION.
<PAGE> 3
LETTER FROM THE CHAIRMAN
Dear Shareholders:
The U.S. economy appears to have settled into a
[PICTURE OF pattern of moderate growth and inflation -- two
A. KEITH BRODKIN] factors that we think can be important
contributors to a favorable long-term investment
climate. During the first quarter of 1996, real
(inflation-adjusted) economic growth was 2.3% on
an annualized basis, followed by a rate of 4.7% in
the second quarter. However, this unexpectedly
high level was followed by a more moderate 2.0%
pace during the third quarter. Overall, real growth in gross domestic product
has surpassed our expectations this year, and we now expect that growth for all
of 1996 could exceed 2.5%. While the consumer appears to be carrying an
excessive debt load, this sector, which represents two-thirds of the economy,
provided some support to the automobile and housing markets through much of the
year. Consumer spending has also been positively impacted by widespread job
growth and, more recently, modestly rising wages. Retail sales, which have been
flat for several months, appear to be improving during the holiday shopping
season. The economies of Europe and Japan, meanwhile, continue to be in the
doldrums, weakening U.S. export markets. Finally, the capital spending plans of
American corporations are far from robust. Thus, while economic growth should
continue, we expect some slackening toward the end of the year.
We believe U.S. equity investors should lower their expectations for 1997.
The expected slowdown in corporate earnings growth and interest rate increases
earlier in the year have raised some near-term concerns, as was seen in July's
stock market correction. Further increases in interest rates, and an
acceleration of inflation coupled with an additional slowdown in corporate
earnings growth, could have a negative effect on the stock market in the near
term. However, to the extent that some earnings disappointments are taken as a
sign that the economy is not overheating, this may prove beneficial for the
equity market's longer-term health. We believe many of the technology-driven
productivity gains that U.S. companies have made in recent years will continue
to enhance corporate America's competitiveness and profitability. Therefore,
while we have some near-term concerns, we remain quite constructive on the
long-term viability of the equity market.
Finally, as you may notice, this report to shareholders incorporates a
number of changes which we hope you will find informative and useful.
<PAGE> 4
LETTER FROM THE CHAIRMAN - continued
Following the Portfolio Manager's Overview, we have added new information on the
Fund's holdings, including charts illustrating the portfolio's concentration in
the types of investments that meet its criteria. Near the back of the report,
telephone numbers and addresses are listed if you would like to contact MFS.
We appreciate your support and welcome any questions or comments you may
have.
Respectfully,
/s/ A. Keith Brodkin
A. Keith Brodkin
Chairman and President
December 12, 1996
2
<PAGE> 5
PORTFOLIO MANAGER'S OVERVIEW
Dear Shareholders:
During the fiscal year ended November 30, 1996,
[Picture of the Fund's Class A and Class B shares achieved
Constantinos Mokas] total returns of 5.37% and 4.21%, respectively
(including the reinvestment of distributions but
excluding the effects of any sales charges), as
compared to a return of -0.8% for the Financial
Times Gold Mines Index (the Index), an unmanaged
index designed to reflect the performance in
international markets of shares of companies
engaged primarily in gold mining.
During the 12 months ended November 30, 1996, the Fund significantly
outperformed the price of gold, which fell 4.1%, as well as the Index, although
the Fund and the Index were impacted by dramatically divergent country
performance. Specifically, the North American component of the Index increased
by 3.5%, whereas Africa and Australia declined by 7.0% and 9.7%, respectively.
The Fund outperformed the Index due to its underweightings in both Australia and
Africa. Africa continues to be plagued by higher-cost mines which suffer
negative operating leverage when the price of gold is weak. The strength in
North America was driven by exciting discoveries of new mines and expansions of
existing mines, which we believe will support increased future low-cost
production. The Fund's performance was also aided by a 10% exposure to
nonprecious metals, mainly titanium, which significantly outperformed the Index.
After increasing more than 4% in January 1996, and piercing the $400 an
ounce barrier, the price of gold has fallen to $371.90 as of the Fund's fiscal
year-end. The economic environment of moderate inflation and high real (adjusted
for inflation) interest rates has continued to put negative pressure on gold
prices. Heavy forward selling by producers and selling by central banks have
also negatively impacted gold prices. We believe, however, the seasonal pickup
in gold prices should provide some price support. At current prices, less
selling by producers can be expected, while
3
<PAGE> 6
PORTFOLIO MANAGER'S OVERVIEW - continued
there is less adjusting left for central banks in preparation for European
economic unification. Reflecting this outlook, the Fund is primarily invested in
precious-metals-related securities, but will likely maintain its 10% exposure to
other metals.
Respectfully,
/s/ Constantinos Mokas
Constantinos Mokas
Portfolio Manager
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER'S PROFILE
CONSTANTINOS MOKAS IS VICE PRESIDENT OF MASSACHUSETTS FINANCIAL SERVICES (MFS)
AND PORTFOLIO MANAGER OF MFS GOLD & NATURAL RESOURCES FUND. HE JOINED MFS IN
1990 AS AN INDUSTRY SPECIALIST AND HAS COVERED THE COMPUTER HARDWARE, MONEY
CENTER AND REGIONAL BANK, SAVINGS AND LOAN, AND METALS INDUSTRIES. HE WAS NAMED
ASSISTANT VICE PRESIDENT IN JANUARY 1994, PORTFOLIO MANAGER OF MFS GOLD &
NATURAL RESOURCES FUND IN DECEMBER 1994, AND VICE PRESIDENT IN 1996. MR. MOKAS
IS A GRADUATE OF DARTMOUTH COLLEGE AND THE AMOS TUCK SCHOOL OF BUSINESS AT
DARTMOUTH COLLEGE.
- --------------------------------------------------------------------------------
4
<PAGE> 7
PERFORMANCE SUMMARY
The information below and on the following page illustrates the historical
performance of MFS Gold & Natural Resources Fund Class B shares in comparison to
various market indicators. Graph results do not reflect the deduction of any
contingent deferred sales charges (CDSC) since the CDSC is not applicable after
a six-year period. Benchmark comparisons are unmanaged and do not reflect any
fees or expenses. You cannot invest in an index. All results are historical and
assume the reinvestment of dividends and capital gains. The performance of Class
A shares will be greater or less than the line shown, based on differences in
loads and fees.
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(For the Period from August 1, 1988 to November 30, 1996)
[GRAPH]
<TABLE>
<CAPTION>
Life of
AVERAGE ANNUAL TOTAL RETURNS 1 Year 3 Years 5 Years Fund+
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MFS Gold & Natural Resources Fund (Class
A) including 5.75% sales charge - 0.68% - 5.04% + 3.13% - 1.08%
- --------------------------------------------------------------------------------
MFS Gold & Natural Resources Fund (Class
A)
at net asset value + 5.37% - 3.14% + 4.36% - 0.38%
- --------------------------------------------------------------------------------
MFS Gold & Natural Resources Fund (Class
B)
with CDSC + 0.21% - 5.16% + 3.30% - 0.79%
- --------------------------------------------------------------------------------
MFS Gold & Natural Resources Fund (Class
B)
without CDSC + 4.21% - 4.20% + 3.65% - 0.79%
- --------------------------------------------------------------------------------
Financial Times Gold Mines+++ - 0.8% N/A N/A N/A
- --------------------------------------------------------------------------------
Standard & Poor's 500 Composite Index** +27.76% +20.88% +18.15% +15.16%++
- --------------------------------------------------------------------------------
Consumer Price Index* + 3.42% + 2.89% + 2.88% + 3.70%++
- --------------------------------------------------------------------------------
</TABLE>
* The Consumer Price Index is a popular measure of change in prices.
** Source: Lipper Analytical Services.
+ For the period from the commencement of investment operations, August 1,
1988 to November 30, 1996.
++ Benchmark comparisons begin on August 1, 1988.
+++ Commencement of index is January 1, 1994.
5
<PAGE> 8
PERFORMANCE SUMMARY - continued
Investment return and principal value will fluctuate, and shares, when redeemed,
may be worth more or less than their original cost. Past performance is no
guarantee of future results.
Class B results including the contingent deferred sales charge (CDSC) reflect
the CDSC which declines over six years as follows: 4%, 4%, 3%, 3%, 2%, 1%, 0%.
Class A share performance includes the performance of the Fund's Class B shares
for periods prior to the commencement of offering of Class A shares on September
7, 1993. Sales charges and operating expenses for Class A and Class B shares
differ. The Class B share performance, which is included within the Class A
share performance, with the 5.75% sales charge, has been adjusted to reflect the
initial sales charge generally applicable to Class A shares rather than the CDSC
generally applicable to Class B shares. Class A share performance has not been
adjusted, however, to reflect differences in operating expenses (e.g., Rule
12b-1 fees), which generally are higher for Class B shares.
Fund results reflect any applicable expense subsidies and waivers, without which
the performance results would have been less favorable. Subsidies and waivers
may be rescinded at any time. See the prospectus for details.
TAX FORM SUMMARY
IN JANUARY 1997, SHAREHOLDERS WILL BE MAILED A TAX FORM SUMMARY
REPORTING THE FEDERAL TAX STATUS OF ALL DISTRIBUTIONS PAID DURING THE
CALENDAR YEAR 1996.
LARGEST SECTORS
[PIE CHART]
Bonds 4.2%
Cash 1.1%
Other 1.4%
Stocks 93.3%
6
<PAGE> 9
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
FUND FACTS
STRATEGY: THE FUND'S INVESTMENT OBJECTIVE IS TO PROVIDE
LONG-TERM APPRECIATION AND PRESERVATION OF
CAPITAL.
COMMENCEMENT OF
INVESTMENT
OPERATIONS: AUGUST 1, 1988
SIZE: $28.6 MILLION NET ASSETS AS OF NOVEMBER 30, 1996
</TABLE>
- --------------------------------------------------------------------------------
PORTFOLIO CONCENTRATION AS OF NOVEMBER 30, 1996
TOP TEN HOLDINGS
<TABLE>
<S> <C>
NEWMONT MINING CORP. TRIZEC HAHN CORP.
U.S. gold mining and refining Diversified Canadian commercial
company property company
ERUO NEVADA MINING CORP. LTD. BARRICK GOLD CORP.
Canadian gold mining company Canadian gold mining company
PLACER DOME, INC. FREEPORT-MCMORAN COPPER & GOLD, INC.
Canadian precious metals mining U.S. precious metals mining company
company
TVX GOLD, INC. BRE-X MINERALS LTD.
Canadian precious metals mining Canadian gold mining company
company
WESTERN AREAS GOLD MINING LTD. CENTURY ALUMINUM CO.
South African gold and uranium U.S. producer of sheet and plate
mining company aluminum
</TABLE>
7
<PAGE> 10
PORTFOLIO OF INVESTMENTS - November 30, 1996
<TABLE>
Common Stocks - 93.3%
<CAPTION>
- ----------------------------------------------------------------------------------------
Issuer Shares Value
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Metals and Minerals - 15.2%
Canada - 4.1%
Bre-X Minerals Ltd. 75,000 $ 1,160,156
- ----------------------------------------------------------------------------------------
U.S. - 11.1%
Century Aluminum Co. 74,800 $ 1,159,400
Oregon Metallurgical Corp. 16,500 585,750
RMI Titanium Co. 25,000 581,250
Titanium Metals Corp. 25,000 837,500
------------
$ 3,163,900
- ----------------------------------------------------------------------------------------
Total Metals and Minerals $ 4,324,056
- ----------------------------------------------------------------------------------------
Precious Metals and Minerals - 78.1%
Australia - 5.1%
Newcrest Mining 150,000 $ 550,260
Niugini Mining Ltd.+ 100,000 264,940
Normandy Mining Limited 471,000 633,532
------------
$ 1,448,732
- ----------------------------------------------------------------------------------------
Canada - 28.4%
Agnico-Eagle Mines Ltd. 70,000 $ 962,500
Barrick Gold Corp. 40,000 1,200,000
Euro Nevada Mining Corp. Ltd. 70,000 1,927,296
Kinross Gold Corp. 50,000 350,000
Placer Dome, Inc. 75,000 1,771,875
Southern Africa Minerals Corp.+ 400,000 266,805
Triton Mining Corp.# 17,500 64,848
TVX Gold, Inc.+ 225,000 1,575,000
------------
$ 8,118,324
- ----------------------------------------------------------------------------------------
South Africa - 19.5%
Ashanti Goldfields Co.# 32,500 $ 467,188
Driefontein Consolidated, ADR 45,000 517,500
Free State Consolidated Gold Mines Ltd., ADR 90,000 669,375
Hartebeestfontein Gold Mining Co. Ltd., ADR 185,000 439,375
Kloof Gold Mining Ltd., ADR 60,000 495,000
Rustenburg Platinum Holdings Ltd., ADR 15,799 223,161
Vaal Reefs Exploration & Mining Co. Ltd., ADR 100,000 693,750
Western Areas Gold Mining Ltd., ADR 101,673 1,436,131
Western Deep Levels Ltd., ADR 20,000 617,500
------------
$ 5,558,980
- ----------------------------------------------------------------------------------------
</TABLE>
8
<PAGE> 11
PORTFOLIO OF INVESTMENTS - continued
Common Stocks - continued
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
Issuer Shares Value
- ----------------------------------------------------------------------------------------
U.S. - 25.1%
<S> <C> <C>
Amax Gold, Inc.+ 80,000 $ 480,000
Battle Mountain Gold Co. 120,000 870,000
Freeport - McMoRan Copper & Gold, Inc. 40,000 1,195,000
Homestake Mining Co. 40,000 605,000
Newmont Mining Corp. 55,000 2,633,125
Santa Fe Pacific Gold Co. 60,000 690,000
Stillwater Mining Co.+ 40,000 700,000
------------
$ 7,173,125
- ----------------------------------------------------------------------------------------
Total Precious Metals and Minerals $ 22,299,161
- ----------------------------------------------------------------------------------------
Total Common Stocks (Identified Cost, $26,782,609) $ 26,623,217
Principal Amount
Bonds - 4.2% (000 Omitted)
- ----------------------------------------------------------------------------------------
Horsham Corp.# (Identified Cost, $1,253,500) $ 1,150 $ 1,201,750
Short-Term Obligations - 1.1%
- ----------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., due
12/02/96, at Amortized Cost $ 320 $ 319,949
- ----------------------------------------------------------------------------------------
Total Investments (Identified Cost, $28,356,058) $ 28,144,916
Other Assets, Less Liabilities - 1.4% 408,959
- ----------------------------------------------------------------------------------------
Net Assets - 100.0% $ 28,553,875
- ----------------------------------------------------------------------------------------
</TABLE>
+Non-income producing security.
#SEC Rule 144A restriction.
See notes to financial statements
9
<PAGE> 12
FINANCIAL STATEMENTS
<TABLE>
Statement of Assets and Liabilities
<CAPTION>
- --------------------------------------------------------------------------------
November 30, 1996
- --------------------------------------------------------------------------------
<S> <C>
Assets:
Investments, at value (identified cost, $28,356,058) $28,144,916
Cash 5,021
Receivable for investments sold 982,051
Receivable for Fund shares sold 12,640
Dividends and interest receivable 20,117
Receivable from investment adviser 46,339
Other assets 287
-----------
Total assets $29,211,371
-----------
Liabilities:
Payable for investments purchased $ 304,296
Payable for Fund shares reacquired 236,680
Payable to affiliates -
Management fee 1,784
Shareholder servicing agent fee 478
Distribution fee 10,749
Accrued expenses and other liabilities 103,509
-----------
Total liabilities $ 657,496
-----------
Net assets $28,553,875
-----------
Net assets consist of:
Paid-in capital $32,089,045
Unrealized depreciation on investments and translation
of assets and liabilities in foreign currencies (211,254)
Accumulated net realized loss on investments and
foreign currency transactions (3,285,756)
Accumulated net investment loss (38,160)
-----------
Total $28,553,875
===========
Shares of beneficial interest outstanding 4,972,224
===========
Class A shares:
Net asset value per share
(net assets of $7,862,846 / 1,334,367 shares of beneficial
interest outstanding) $5.89
-----
Offering price per share (100 / 94.25) $6.25
-----
Class B shares:
Net asset value and offering price per share
(net assets of $20,691,029 / 3,637,857 shares of beneficial
interest outstanding) $5.69
-----
</TABLE>
On sales of $100,000 or more, the offering price of Class A
shares is reduced. A contingent deferred sales charge may be
imposed on redemptions of Class A and Class B shares.
See notes to financial statements
10
<PAGE> 13
FINANCIAL STATEMENTS - continued
<TABLE>
Statement of Operations
<CAPTION>
- --------------------------------------------------------------------------------
Year Ended November 30, 1996
- --------------------------------------------------------------------------------
<S> <C>
Net investment income:
Income -
Dividends $ 352,230
Interest 117,986
----------
Total investment income $ 470,216
----------
Expenses -
Management fee $ 238,998
Trustees' compensation 38,385
Shareholder servicing agent fee (Class A) 11,785
Shareholder servicing agent fee (Class B) 52,822
Distribution and service fee (Class B) 240,096
Custodian fee 32,763
Auditing fees 32,095
Printing 22,178
Postage 14,202
Legal fees 4,449
Miscellaneous 73,722
----------
Total expenses $ 761,495
Reduction of expenses by investment adviser (46,339)
Fees paid indirectly (2,677)
----------
Net expenses $ 712,479
----------
Net investment loss $ (242,263)
----------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $ (506,076)
Foreign currency transactions 154
----------
Net realized loss on investments and foreign currency
transactions $ (505,922)
----------
Change in unrealized appreciation (depreciation) -
Investments $1,511,308
Translation of assets and liabilities in foreign currencies (106)
----------
Net unrealized gain on investments $1,511,202
----------
Net realized and unrealized gain on investments and foreign
currency $1,005,280
----------
Increase in net assets from operations $ 763,017
==========
</TABLE>
See notes to financial statements
11
<PAGE> 14
FINANCIAL STATEMENTS - continued
<TABLE>
Statement of Changes in Net Assets
<CAPTION>
- ----------------------------------------------------------------------------------
Year Ended November 30, 1996 1995
- ----------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment loss $ (242,263) $ (196,281)
Net realized loss on investments and foreign
currency transactions (505,922) (1,624,411)
Net unrealized gain on investments and foreign
currency translation 1,511,202 417,929
------------- ------------
Increase (decrease) in net assets from
operations $ 763,017 $ (1,402,763)
------------- ------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 85,440,451 $ 70,516,741
Cost of shares reacquired (85,185,039) (73,995,431)
------------- ------------
Increase (decrease) in net assets from Fund
share transactions $ 255,412 $ (3,478,690)
------------- ------------
Total increase (decrease) in net assets $ 1,018,429 $ (4,881,453)
Net assets:
At beginning of period 27,535,446 32,416,899
------------- ------------
At end of period (including accumulated net
investment loss of $38,160 and $29,466,
respectively) $ 28,553,875 $ 27,535,446
============= ============
</TABLE>
See notes to financial statements
12
<PAGE> 15
FINANCIAL STATEMENTS - continued
<TABLE>
Financial Highlights
<CAPTION>
- ---------------------------------------------------------------------------------
Year Ended November 30, 1996 1995 1994 1993*
- ---------------------------------------------------------------------------------
Class A
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of
period $ 5.59 $ 5.76 $ 6.54 $ 5.55
------ -------- --------- -------
Income from investment
operations## -
Net investment income (loss)sec. $ -- $ 0.01 $ 0.01 $ 0.01
Net realized and unrealized gain
(loss) on investments 0.30 (0.18) (0.73) 0.98
------ -------- --------- -------
Total from investment
operations $ 0.30 $ (0.17) $ (0.72) $ 0.99
------ -------- --------- -------
Less distributions declared to
shareholders -
From net realized gain on
investments $ -- $ -- $ (0.05) $ --
Tax return of capital -- -- (0.01) --
------ -------- --------- -------
Total distributions declared
to shareholders $ -- $ -- $ (0.06) $ --
------ -------- --------- -------
Net asset value - end of period $ 5.89 $ 5.59 $ 5.76 $ 6.54
------ -------- --------- -------
Total return# 5.37% (2.95)% (11.14)% 17.84%++
Ratios (to average net assets)/
Supplemental datasec.:
Expenses 1.44% 1.43% 1.42% 1.43%+
Net investment income (loss) (0.03)% 0.16% 0.14% 0.61%+
Portfolio turnover 26% 33% 142% 188%
Average commission rate### $0.0362 -- -- --
Net assets at end of period (000
omitted) $7,863 $ 6,328 $ 3,695 $ 1,117
* For the period from the commencement of offering of Class A shares,
September 7, 1993, to November 30, 1993.
+ Annualized.
++ Not annualized.
# 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.
## Per share data for the periods subsequent to November 30, 1992 is based on
average shares outstanding.
### Average commission rate is calculated for funds with fiscal years beginning
on or after September 30, 1995.
sec. The investment adviser did not impose a portion of its management fee for
the periods indicated. If this fee had been incurred by the Fund, the net
investment income (loss) per share and ratios would have been:
Net investment loss $(0.01) $ -- $(0.02) $ --
Ratios (to average net assets):
1.59% 1.63% 1.84% 1.93%+
Expenses
(0.18)% (0.04)% (0.27)% 0.11%+
Net investment income (loss)
</TABLE>
See notes to financial statements
13
<PAGE> 16
FINANCIAL STATEMENTS - continued
<TABLE>
Financial Highlights -- continued
<CAPTION>
- ---------------------------------------------------------------------------------
Year Ended November 30, 1996 1995 1994 1993
- ---------------------------------------------------------------------------------
Class B
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per share data (for a share outstanding
throughout each period):
Net asset value - beginning of period $ 5.46 $ 5.68 $ 6.53 $ 4.67
-------- -------- -------- --------
Income from investment operations## -
Net investment income losssec. $ (0.06) $ (0.04) $ (0.06) $ (0.02)
Net realized and unrealized gain
(loss) on investments 0.29 (0.18) (0.73) 1.88
-------- -------- -------- --------
Total from investment operations $ 0.23 $ (0.22) $ (0.79) $ 1.86
-------- -------- -------- --------
Less distributions declared to
shareholders -
From net realized gain on investments $ -- $ -- $ (0.05) $ --
Tax return of capital -- -- (0.01) --
-------- -------- -------- --------
Total distributions declared to
shareholders $ -- $ -- $ (0.06) $ --
-------- -------- -------- --------
Net asset value - end of period $ 5.69 $ 5.46 $ 5.68 $ 6.53
-------- -------- -------- --------
Total return# 4.21% (3.87)% (12.24)% 39.83%
Ratios (to average net assets)/
Supplemental datasec.:
Expenses 2.52% 2.50% 2.49% 2.66%
Net investment income loss (1.02)% (0.79)% (0.83)% (0.38)%
Portfolio turnover 26% 33% 142% 188%
Average commission rate### $ 0.0362 -- -- --
Net assets at end of period (000
omitted) $ 20,691 $ 21,207 $ 28,722 $ 24,861
</TABLE>
* For the period from the commencement of investment operations, August 1,
1988 to November 30, 1988
+ Annualized.
# 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.
## Per share data for the periods subsequent to November 30, 1992 is based on
average shares outstanding.
### Average commission rate is calculated for funds with fiscal years beginning
on or after September 30, 1995.
sec. The investment adviser did not impose a portion of its management fee
for the periods indicated. If this fee had been incurred by the Fund,
the net investment income (loss) per share and ratios would have been:
<TABLE>
<S> <C> <C> <C> <C>
Net investment income (loss) $ (0.07) $ (0.05) $ (0.09) $ (0.04)
Ratios (to average net assets):
Expenses 2.67% 2.71% 2.91% 3.15%
Net investment income (loss) (1.17)% (1.00)% (1.25)% (0.87)%
</TABLE>
See notes to financial statements
14
<PAGE> 17
FINANCIAL STATEMENTS - continued
<TABLE>
Financial Highlights -- continued
<CAPTION>
- ----------------------------------------------------------------------------------
Year Ended November 30, 1992 1991 1990 1989 1988*
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share data (for a share
outstanding throughout each
period):
Net asset value - beginning
of period $ 4.80 $ 4.68 $ 6.56 $ 5.88 $ 6.16
-------- -------- -------- -------- --------
Income from investment
operations## -
Net investment income
(loss) $ (0.14) $ (0.11) $ (0.07) $ (0.04) $ 0.03
Net realized and unrealized
gain (loss) on
investments 0.01 0.23 (1.81) 0.75 (0.31)
-------- -------- -------- -------- --------
Total from investment
operations $ (0.13) $ 0.12 $ (1.88) $ 0.71 $ (0.28)
-------- -------- -------- -------- --------
Less distributions declared
to shareholders -
From net realized gain on
investments $ -- $ -- $ -- $ (0.03) $ --
-------- -------- -------- -------- --------
Net asset value - end of
period $ 4.67 $ 4.80 $ 4.68 $ 6.56 $ 5.88
-------- -------- -------- -------- --------
Total return# (2.71)% 2.56% (28.66)% 12.06% (13.71)%+
Ratios (to average net assets)/
Supplemental data:
Expenses 4.09% 4.11% 3.88% 3.67% 3.00%+
Net investment income
(loss) (2.39)% (2.19)% (2.04)% (1.15)% (0.94)%+
Portfolio turnover 189% 135% 114% 92% 12%
Net assets at end of period
(000 omitted) $ 6,432 $ 7,056 $ 7,207 $ 4,795 $ 1,778
</TABLE>
* For the period from the commencement of investment operations, August 1,
1988 to November 30, 1988
+ Annualized.
# 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.
## Per share data for the periods subsequent to November 30, 1992 is based on
average shares outstanding.
See notes to financial statements
15
<PAGE> 18
NOTES TO FINANCIAL STATEMENTS
(1) BUSINESS AND ORGANIZATION
MFS Gold & Natural Resources Fund (the Fund) is a non-diversified series of MFS
Series Trust II (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. 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 valued at last sale prices. Unlisted
equity securities or listed equity securities for which last sale prices are not
available are valued at last quoted bid prices. Debt securities (other than
short-term obligations which mature in 60 days or less), including listed
issues, are valued on the basis of valuations furnished by dealers or by a
pricing service with consideration to factors such as institutional-size trading
in similar groups of securities, yield, quality, coupon rate, maturity, type of
issue, trading characteristics and other market data, without exclusive reliance
upon exchange or over-the-counter 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 at fair value as determined in good faith by or at the direction of the
Trustees.
Foreign Currency Translation - Investment valuations, other assets, and
liabilites 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 result from fluctuations in foreign currency exchange rates is not
separately disclosed.
16
<PAGE> 19
NOTES TO FINANCIAL STATEMENTS - continued
Investment Transactions and Income - Investment transactions are recorded on the
trade date. Interest income is recorded on the accrual basis. All premium and
original issue discount are amortized or accreted for financial statement and
tax reporting purposes as required by federal income tax regulations. Dividend
income is recorded on the ex-dividend date for dividends received in cash.
Dividend payments received in additional securities are recorded on the
ex-dividend date in an amount equal to the value of the security on such date.
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 taxable
income, including any net realized gain on investments. Accordingly, no
provision for federal income or excise tax is provided. The Fund files a tax
return annually using tax accounting methods required under provisions of the
Code which may differ from generally accepted accounting principles, the basis
on which these financial statements are prepared. Accordingly, the amount of net
investment income and net realized gain reported on these financial statements
may differ from that reported on the Fund's tax return and, consequently, the
character of distributions to shareholders reported in the financial highlights
may differ from that reported to shareholders on Form 1099-DIV. Foreign taxes
have been provided for on interest and dividend income earned on foreign
investments in accordance with the applicable country's tax rates and to the
extent unrecoverable are recorded as a reduction of investment income.
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 are reported in the financial statements as a tax return of
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 accumulated net realized
gains. During the year ended November 30, 1996, $233,569 was reclassified from
accumulated net realized loss on investments and paid-in-capital to
undistributed net investment income due to differences between book and tax
accounting for currency transactions. This change had no effect on the net
assets or net asset value per share. At November 30, 1996, the Fund, for federal
income tax purposes, had a capital loss carryforward of $3,267,652, which may be
applied against any net taxable realized gains of each succeeding year until the
earlier of its utilization or expiration on November 30, 2004 ($542,579),
November 30, 2003 ($1,781,104) and November 30, 2002 ($943,969).
Multiple Classes of Shares of Beneficial Interest - The Fund offers both Class A
and Class B shares. The two classes of shares differ in their respective
shareholder servicing agent, distribution and service fees. All shareholders
bear the common
17
<PAGE> 20
NOTES TO FINANCIAL STATEMENTS - continued
expenses of the Fund pro rata based on average daily net assets of each class,
without distinction between share classes. Dividends are declared separately for
each class. No class has preferential dividend rights; differences in per share
dividend rates are generally due to differences in separate class expenses.
(3) TRANSACTIONS WITH AFFILIATES
Investment Adviser - The Fund has an investment advisory agreement with
Massachusetts Financial Services Company (MFS) to provide overall investment
advisory and administrative services, and general office facilities. The
management fee is computed daily and paid monthly at an annual rate of 0.75% of
average daily net assets. The investment adviser did not impose a portion of its
fee, which is reflected as a preliminary reduction of expenses in the Statement
of Operations.
The Fund pays no compensation directly to its Trustees who are officers of the
investment adviser, or to officers of the Fund, all of whom receive remuneration
for their services to the Fund from MFS. Certain of the officers and Trustees of
the Fund are officers or directors of MFS, MFS Fund Distributors, Inc. (MFD) and
MFS Service Center, Inc. (MFSC). The Fund has an unfunded defined benefit plan
for all its independent Trustees and Mr. Bailey. Included in Trustees'
compensation is a net periodic pension expense of $10,110 for the year ended
November 30, 1996.
Distributor - MFD, a wholly owned subsidiary of MFS, as distributor, received
$9,525 for the year ended November 30, 1996, as its portion of the sales charge
on sales of Class A shares of the Fund. The Trustees have adopted separate
distribution plans for Class A and Class B shares pursuant to Rule 12b-1 of the
Investment Company Act of 1940 as follows:
The Class A distribution plan provides that the Fund will pay MFD up to 0.35%
per annum of its average daily net assets attributable to Class A shares in
order that MFD may pay expenses on behalf of the Fund related to the
distribution and servicing of its shares. These expenses include a service fee
to each securities dealer who enters into a sales agreement with MFD of up to
0.25% per annum of the Fund's average daily net assets attributable to Class A
shares which are attributable to that securities dealer, a distribution fee to
MFD of up to 0.10% per annum of the Fund's average daily net assets attributable
to Class A shares, commissions to dealers and payments to MFD wholesalers for
sales at or above a certain dollar level, and other such distribution-related
expenses that are approved by the Fund. Payments of the 0.25% per annum service
fee will commence under the distribution plan when the value of the net assets
of the Fund attributable to Class A shares first equals or exceeds $40 million.
Payment of the 0.10% per annum distribution fee will commence on such date as
the Trustees of the Trust may determine.
The Class B distribution plan provides that the Fund will pay MFD a distribution
fee of 0.75% per annum, and a service fee of up to 0.25% per annum, of the
Fund's
18
<PAGE> 21
NOTES TO FINANCIAL STATEMENTS - continued
average daily net assets attributable to Class B shares. MFD will pay to
securities dealers who enter into a sales agreement with MFD all or a portion of
the service fee attributable to Class B shares. The service fee is intended to
be additional consideration for services rendered by the dealer with respect to
Class B shares. MFD retains the service fee for accounts not attributable to a
securities dealer, which amounted to $10,687 for Class B shares for the year
ended November 30, 1996. Fees incurred under the distribution plan during the
year ended November 30, 1996 were 1.00% of average daily net assets attributable
to Class B shares on an annualized basis.
Purchases over $1 million of Class A shares and certain purchases into
retirement plans are subject to a contingent deferred sales charge in the event
of a shareholder redemption within 12 months following such 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 year ended November 30, 1996 were $78,529 for Class B
shares.
Shareholder Servicing Agent - MFSC, a wholly owned subsidiary of MFS, earns a
fee for its services as shareholder servicing agent. The fee is calculated as a
percentage of the average daily net assets of each class of shares at an
effective annual rate of up to 0.15% and up to 0.22% attributable to Class A and
Class B shares, respectively.
(4) PORTFOLIO SECURITIES
Purchases and sales of investments, other than purchased option transactions and
short-term obligations aggregated $8,591,248 and $7,650,706, respectively.
<TABLE>
The cost and unrealized appreciation or depreciation in value of the investments
owned by the Fund, as computed on a federal income tax basis, are as follows:
<S> <C>
Aggregate cost $28,356,058
-----------
Gross unrealized appreciation $ 3,872,639
Gross unrealized depreciation (4,083,781)
-----------
Net unrealized depreciation $ (211,142)
-----------
</TABLE>
19
<PAGE> 22
NOTES TO FINANCIAL STATEMENTS - continued
(5) Shares of Beneficial Interest
The Fund's Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest (without par value).
Transactions in Fund shares were as follows:
Class A Shares
<TABLE>
<CAPTION>
Year Ended November 30, Year Ended November 30,
1996 1995
--------------------------- ---------------------------
Shares Amount Shares Amount
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 6,360,113 $ 41,515,582 5,439,951 $ 31,316,326
Shares reacquired (6,157,121) (39,875,887) (4,950,704) (28,287,454)
--------- ----------- --------- -----------
Net increase 202,992 $ 1,639,695 489,247 $ 3,028,872
--------- ----------- --------- -----------
</TABLE>
Class B Shares
<TABLE>
<CAPTION>
Year Ended November 30, Year Ended November 30,
1996 1995
--------------------------- ---------------------------
Shares Amount Shares Amount
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 7,018,689 $ 43,924,869 7,007,971 $ 39,200,415
Shares reacquired (7,267,186) (45,309,152) (8,180,833) (45,707,977)
--------- ----------- --------- -----------
Net decrease (248,497) $ (1,384,283) (1,172,862) $ (6,507,562)
--------- ----------- --------- -----------
</TABLE>
(6) Line of Credit
The Fund entered into an agreement which enables it to participate with other
funds managed by MFS in an unsecured line of credit with a bank which permits
borrowings up to $350 million, collectively. Borrowings may be made to
temporarily finance the repurchase of Fund shares. Interest is charged to each
fund, based on its borrowings, at a rate equal to the bank's base rate. In
addition, a commitment fee, based on the average daily unused portion of the
line of credit, is allocated among the participating funds at the end of each
quarter. The commitment fee allocated to the Fund for the year ended November
30, 1996 was $303.
(7) Restricted Security
The Fund may invest not more than 15% of its net assets in securities which are
subject to legal or contractual restrictions on resale. At November 30, 1996,
the Fund owned the following restricted security (constituting 5.5% of net
assets) which may not be publicly sold without registration under the Securities
Act of 1933. The Fund does not have the right to demand that such security be
registered. The value of this security is determined by valuations supplied by a
pricing service or brokers, or, if not available, in good faith by or at the
direction of the Trustees.
<TABLE>
<CAPTION>
Date of
Description Acquisition Shares Cost Value
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TVX Gold, Inc. 6/28/93 225,000 $1,642,657 $1,575,000
----------
</TABLE>
20
<PAGE> 23
INDEPENDENT AUDITORS' REPORT
To the Trustees of MFS Series Trust II and Shareholders of MFS Gold & Natural
Resources Fund:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of MFS Gold & Natural Resources Fund (a separate
series of MFS Series Trust II) as of November 30, 1996, the related statement of
operations for the year then ended, the statement of changes in net assets for
the years ended November 30, 1996 and 1995, and the financial highlights for
each of the years in the nine-year period ended November 30, 1996. These
financial statements and financial highlights are the responsibility of the
Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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. Our procedures included confirmation of the securities owned at
November 30, 1996 by correspondence with the custodian and brokers; where
replies were not received from brokers, we performed other auditing procedures.
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 audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of MFS Gold & Natural
Resources Fund at November 30, 1996, the results of its operations, the changes
in its net assets, and its financial highlights for the respective stated
periods in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
January 3, 1997
---------------------------------------------------------------------
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.
21
<PAGE> 24
IT'S EASY TO CONTACT US
[LOGO: PHONE HANDLE] MFS AUTOMATED INFORMATION
ACCOUNT INFORMATION
Call 1-800-MFS-TALK (1-800-637-8255)
anytime.
INVESTMENT OUTLOOK:
Call 1-800-637-4458 anytime for the MFS outlook on the
bond and stock markets.
[LOGO: QUESTION MARK] MFS PERSONAL SERVICE
ACCOUNT SERVICE/LITERATURE:
Call 1-800-225-2606 any business day
from 8 a.m. to 8 p.m. Eastern time.
PRODUCT INFORMATION:
Call 1-800-637-2929 any business day
from 9 a.m. to 5 p.m. Eastern time.
IRA SERVICE:
Call 1-800-637-1255 any business day
from 9 a.m. to 5 p.m. Eastern time.
SERVICE FOR THE HEARING-IMPAIRED:
Call 1-800-637-6576 any business day
from 9 a.m. to 5 p.m. Eastern time (TDD required).
[LOGO: ENVELOPE] MFS ADDRESSES
MFS Service Center, Inc.
P.O. Box 2281
Boston, MA 02107-9906
WORLD WIDE WEB
www.mfs.com
22
<PAGE> 25
ADS ILLUSTRATE MFS' UNPARALLELED EXPERIENCE
[LOGO: MERCURY GEMINI APOLLO MFS]
MFS' new advertisements look back at some of the most important events of the
twentieth century to demonstrate a simple point -- no other fund company can
match MFS' experience. MFS has been managing money for investors since 1924
when we "invented" the nation's first fund, Massachusetts Investors Trust.
Print and broadcast ads will offer dramatic portraits of what that 72 years'
worth of experience means. By the time the Apollo rockets began taking off for
the moon, for example, MFS had already been exploring the universe of stocks for
more than four decades. The company was also on the scene, as other ads will
illustrate, when Louis Armstrong was redefining jazz and when the great
racehorse Whirlaway was galloping to a Triple Crown victory.
As MFS Chairman Keith Brodkin emphasizes, in today's increasingly competitive
mutual fund industry, it's important to have a recognizable brand name. The goal
of the MFS ad campaign is to increase public awareness of the company and its
unique role in the industry as the inventor of the mutual fund.
The across-the-board strength of the MFS Family of Funds[Registered Trademark]
will be highlighted in the print ads, which cite the performance results and
Morningstar ratings of various MFS funds.
The broadcast ads appear on a number of cable and network television news and
sports programs. The print ads appear in newspapers such as The Wall Street
Journal and USA Today; in financial magazines such as Kiplinger's Personal
Finance and Money, and in leisure magazines such as Golf Digest and Tennis.
(The cost of the campaign is being underwritten by MFS. It is neither a fund
shareholder nor an annuity contractholder expense.)
23
<PAGE> 26
THE MFS FAMILY OF FUNDS[REGISTERED TRADEMARK]
AMERICA'S OLDEST MUTUAL FUND GROUP
The members of the MFS Family of Funds are grouped below according to the types
of securities in their portfolios. For free prospectuses containing more
complete information, including the exchange privilege and all charges and
expenses, please contact your financial adviser or call MFS at 1-800-225-2606
any business day from 8 a.m. to 8 p.m. Eastern time (or leave a message
anytime). This material should be read carefully before investing or sending
money.
STOCK
- --------------------------------------------------------------------------------
Massachusetts Investors Trust Massachusetts Investors Growth Stock Fund
MFS[Registered Trademark] Capital Growth Fund MFS[Registered Trademark] Emerging
Growth Fund MFS[Registered Trademark] Gold & Natural Resources Fund
MFS[Registered Trademark] Growth Opportunities Fund MFS[Registered Trademark]
Managed Sectors Fund MFS[Registered Trademark] OTC Fund MFS[Registered
Trademark] Research Growth & Income Fund MFS[Registered Trademark] Research Fund
MFS[Registered Trademark] Value Fund
STOCK AND BOND
- --------------------------------------------------------------------------------
MFS[Registered Trademark] Total Return Fund
MFS[Registered Trademark] Utilities Fund
BOND
- --------------------------------------------------------------------------------
MFS[Registered Trademark] Bond Fund MFS[Registered Trademark] Government
Mortgage Fund MFS[Registered Trademark] Government Securities Fund
MFS[Registered Trademark] High Income Fund MFS[Registered Trademark]
Intermediate Income Fund MFS[Registration Mark] Strategic Income Fund
LIMITED MATURITY BOND
- --------------------------------------------------------------------------------
MFS[Registered Trademark] Government Limited Maturity Fund
MFS[Registered Trademark] Limited Maturity Fund
MFS[Registered Trademark] Municipal Limited Maturity Fund
WORLD
- --------------------------------------------------------------------------------
MFS[Registered Trademark]/Foreign & Colonial Emerging Markets Equity Fund
MFS[Registered Trademark]/Foreign & Colonial International Growth Fund
MFS[Registered Trademark]/Foreign & Colonial International Growth and Income
Fund MFS[Registered Trademark] World Asset Allocation Fundsm MFS[Registered
Trademark] World Equity Fund MFS[Registered Trademark] World Governments Fund
MFS[Registration Mark] World Growth Fund MFS[Registered Trademark] World Total
Return Fund
NATIONAL TAX-FREE BOND
- --------------------------------------------------------------------------------
MFS[Registered Trademark] Municipal Bond Fund
MFS[Registered Trademark] Municipal High Income Fund
MFS[Registered Trademark] Municipal Income Fund
STATE TAX-FREE BOND
- --------------------------------------------------------------------------------
Alabama, Arkansas, California, Florida, Georgia, Maryland, Massachusetts,
Mississippi, New York, North Carolina, Pennsylvania, South Carolina,
Tennessee, Virginia, West Virginia
MONEY MARKET
- --------------------------------------------------------------------------------
MFS[Registered Trademark] Cash Reserve Fund
MFS[Registered Trademark] Government Money Market Fund
MFS[Registered Trademark] Money Market Fund
24
<PAGE> 27
MFS GOLD & NATURAL RESOURCES FUND
TRUSTEES
A. Keith Brodkin* - Chairman and President
Richard B. Bailey* - Private Investor;
Former Chairman and Director (until 1991), Massachusetts Financial Services
Company; Director, Cambridge Bancorp; Director, Cambridge Trust Company
Marshall N. Cohan - Private Investor
lawrence H. cohn, M.D. - Chief of Cardiac Surgery, Brigham and Women's
Hospital; Professor of Surgery, Harvard Medical School
The Hon. Sir J. David Gibbons, KBE - Chief Executive Officer, Edmund Gibbons
Ltd.; Chairman, Bank of N.T. Butterfield & Son Ltd.
Abby M. O'neill - Private Investor;
Director, Rockefeller Financial Services, Inc. (investment advisers)
Walter E. Robb III - President and Treasurer, Benchmark Advisors, Inc.
(corporate financial consultants); President, Benchmark Consulting Group, Inc.
(office services); Trustee, Landmark Funds (mutual funds)
Arnold D. Scott* - Senior Executive Vice President, Director and Secretary,
Massachusetts Financial Service Company
Jeffrey L. Shames* - President and Director, Massachusetts Financial Services
Company
J. Dale Sherratt - President, Insight Resources, Inc. (acquisition planning
specialists)
Ward Smith - Former Chairman (until 1994), NACCO Industries; Director,
Sundstrand Corporation
INVESTMENT ADVISER
Massachusetts Financial Services Company
500 Boylston Street
Boston, MA 02116-3741
DISTRIBUTOR
MFS Fund Distributors, Inc.
500 Boylston Street
Boston, MA 02116-3741
PORTFOLIO MANAGER
Constantinos Mokas*
TREASURER
W. Thomas London*
ASSISTANT TREASURER
James O. Yost*
SECRETARY
Stephen E. Cavan*
ASSISTANT SECRETARY
James R. Bordewick, Jr.*
CUSTODIAN
State Street Bank and Trust Company
AUDITORS
Deloitte and Touche LLP
INVESTOR INFORMATION
For MFS stock and bond market outlooks, call toll free: 1-800-637-4458 anytime
from a touch-tone telephone.
For information on MFS mutual funds, call your financial adviser or, for an
information kit, call toll free: 1-800-637-2929 any business day from 9 a.m. to
5 p.m. Eastern time (or leave a message anytime).
INVESTOR SERVICE
MFS Service Center, Inc.
P.O. Box 2281
Boston, MA 02107-9906
For general information, call toll free: 1-800-225-2606 any business day from 8
a.m. to 8 p.m. Eastern time.
For service to speech- or hearing-impaired, call toll free: 1-800-637-6576 any
business day from 9 a.m. to 5 p.m. Eastern time. (To use this service, your
phone must be equipped with a Telecommunications Device for the Deaf.)
For share prices, account balances and exchanges, call toll free: 1-800-MFS-TALK
(1-800-637-8255) anytime from a touch-tone telephone.
WORLD WIDE WEB
www.mfs.com
[LOGO: DALBAR #1] For the third year in a row, MFS earned a #1 ranking in the
DALBAR, Inc. Broker/Dealer Survey. Main Office Operations Service Quality
Category. The firm achieved a 3.48 overall score on a scale of 1 to 4 in the
1996 survey. A total of 110 firms responded, offering input on the quality of
service they received from 29 mutual fund companies nationwide. The survey
contained questions about service quality in 15 categories, including "knowledge
of phone service contacts," "accuracy of transaction processing," and "overall
ease of doing business with the firm."
*Affiliated with the Investment Adviser
25
<PAGE> 28
<TABLE>
<CAPTION>
<S> <C> <C>
MFS(R) GOLD & LOGO
NATURAL RESOURCES ----------------------
FUND BULK RATE
500 Boylston Street U.S. POSTAGE
Boston, MA 02116 PAID
LOGO PERMIT #55638
BOSTON, MA
----------------------
</TABLE>
(C)1997 MFS Fund Distributors, Inc., 500 Boylston Street, Boston, MA 02116
MGN-2 1/97 9.5M 06/206
