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MFS EMERGING GROWTH FUND
Supplement to the April 1, 1997 Prospectus and Statement of Additional
Information
The following information should be read in conjunction with the Fund's
Prospectus and Statement of Additional Information ("SAI"), dated April 1, 1997,
and contains a description of Class I shares.
Class I shares are available for purchase only by certain investors as
described under the caption "Eligible Purchasers" below.
EXPENSE SUMMARY
Shareholder Transaction Expenses: Class I
Maximum Initial Sales Charge Imposed on Purchases of Fund
Shares (as a percentage of offering price) None
Maximum Contingent Deferred Sales Charge (as a percentage
of original purchase price or redemption proceeds, as applicable) None
Annual Operating Expenses of the Fund (as a percentage of average net assets):
Management Fees(1) 0.71%
Rule 12b-1 Fees None
Other Expenses(2) 0.27%
Total Operating Expenses 0.98%
(1) Effective July 1, 1997, MFS has voluntarily reduced its advisory fee to
0.65% per annum on average daily net assets of the Fund in excess of $7
billion.
(2) The Fund has an expense offset arrangement which reduces the Fund's
custodian fee based upon the amount of cash maintained by the Fund with its
custodian and dividend disbursing agent, and may enter into other such
arrangements and directed brokerage arrangements (which would also have the
effect of reducing the Fund's expenses). Any such fee reductions are not
reflected under "Other Expenses."
Example of Expenses
An investor would pay the following dollar amounts of expenses on a
$1,000 investment in Class I shares of the Fund, assuming (a) a 5% annual return
and (b) redemption at the end of each of the time periods indicated:
Period Class I
1 year $10
3 years 31
The purpose of the expense table above is to assist investors in
understanding the various costs and expenses that a shareholder of the Fund will
bear directly or indirectly. A more complete description of the Fund's
management fee is set forth under the caption "Management of the Fund" in the
Prospectus.
The "Example" set forth above should not be considered a representation of past
or future expenses of the Fund; actual expenses may be greater or less than
those shown.
ELIGIBLE PURCHASERS
Class I shares are available for purchase only by the following purchasers
("Eligible Purchasers"):
(i) certain retirement plans established for the benefit of employees of
Massachusetts Financial Services Company ("MFS"), the Fund's investment
adviser, and employees of MFS' affiliates;
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(ii) any fund distributed by MFS Fund Distributors, Inc. ("MFD"), the Fund's
distributor, if the fund seeks to achieve its investment objective by
investing primarily in shares of the Fund and other funds distributed by
MFD;
(iii)any retirement plan, endowment or foundation which (a) purchases shares
directly through MFD (rather than through a third party broker or dealer or
other financial intermediary); (b) has, at the time of purchase of Class I
shares, aggregate assets of at least $100 million; and (c) invests at least
$10 million in Class I shares of the Fund either alone or in combination
with investments in Class I shares of other MFS funds distributed by MFD
(additional investments may be made in any amount); provided that MFD may
accept purchases from smaller plans, endowments or foundations or in
smaller amounts if it believes, in its sole discretion, that such entity's
aggregate assets will equal or exceed $100 million, or that such entity
will make additional investments which will cause its total investment to
equal or exceed $10 million, within a reasonable period of time; and
(iv) bank trust departments which initially invest, on behalf of their trust
clients, at least $100,000 in Class I shares of the Fund (additional
investments may be made in any amount); provided that MFD may accept
smaller initial purchases if it believes, in its sole discretion, that the
bank trust department will make additional investments, on behalf of its
trust clients, which will cause its total investment to equal or exceed
$100,000 within a reasonable period of time.
In no event will the Fund, MFS, MFD or any of their affiliates pay any sales
commissions or compensation to any third party in connection with the sale of
Class I shares; the payment of any such sales commission or compensation would,
under the Fund's policies, disqualify the purchaser as an eligible investor of
Class I shares.
SHARE CLASSES OFFERED BY THE FUND
Four classes of shares of the Fund currently are offered for sale,
Class A shares, Class B shares, Class C shares and Class I shares. Class I
shares are available for purchase only by Eligible Purchasers, as defined above,
and are described in this Supplement. Class A shares, Class B shares and Class C
shares are described in the Fund's Prospectus and are available for purchase by
the general public.
Class A shares are offered at net asset value plus an initial sales
charge up to a maximum of 5.75% of the offering price (or a contingent deferred
sales charge (a "CDSC") upon redemption of 1.00% during the first year in the
case of purchases of $1 million or more and certain purchases by retirement
plans), and are subject to an annual distribution fee and service fee up to a
maximum of 0.35% per annum. Class B shares are offered at net asset value
without an initial sales charge but are subject to a CDSC upon redemption
(declining from 4.00% during the first year to 0% after six years) and an annual
distribution fee and service fee up to a maximum of 1.00% per annum; Class B
shares convert to Class A shares approximately eight years after purchase. Class
C shares are offered at net asset value without an initial sales charge but are
subject to a CDSC upon redemption of 1.00% during the first year and an annual
distribution fee and service fee up to a maximum of 1.00% per annum. Class I
shares are offered at net asset value without an initial sales charge or CDSC
and are not subject to a distribution or service fee. Class C shares and Class I
shares do not convert to any other class of shares of the Fund.
OTHER INFORMATION
Eligible Purchasers may purchase Class I shares only directly through
MFD. Eligible Purchasers may exchange Class I shares of the Fund for Class I
shares of any other MFS Fund available for purchase by such Eligible Purchasers
at their net asset value (if available for sale), and may exchange Class I
shares of the Fund for shares of the MFS Money Market Fund (if available for
sale), and may redeem Class I shares of the Fund at net asset value.
Distributions paid by the Fund with respect to Class I shares generally will be
greater than those paid with respect to Class A shares, Class B shares and Class
C shares because expenses attributable to Class A shares, Class B shares and
Class C shares generally will be higher.
The date of this Supplement is August 28, 1997
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MFS EMERGING GROWTH FUND
Supplement to the Current Prospectus and Statement of Additional Information
The Prospectus and Statement of Additional Information are revised as
follows to reflect a voluntary management fee reduction by MFS:
1. EXPENSE SUMMARY
The "Expense Summary" on Pages 2 and 3 of the Prospectus is revised to
read as follows:
Shareholder Transaction Expenses: Class A Class B Class C
Maximum Initial Sales Charge Imposed on
Purchases of Fund Shares (as a percentage
of offering price) 5.75% 0.00% 0.00%
Maximum Contingent Deferred Sales Charge
(as a percentage of original purchase
price or redemption proceeds,
as applicable) See below(1) 4.00% 1.00%
Annual Operating Expenses of the Fund (as a percentage of average daily net
assets):
Management Fees(2) 0.71% 0.71% 0.71%
Rule 12b-1 Fees 0.25%(3) 1.00%(4) 1.00%(4)
Other Expenses(6) 0.27% 0.27% 0.27%(5)
----- ----- -----
Total Operating Expenses 1.23% 1.98% 1.98%
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(1) Purchases of $1 million or more and certain purchases by retirement plans
are not subject to an initial sales charge; however, a contingent deferred
sales charge (a "CDSC") of 1% will be imposed on such purchases in the
event of certain redemption transactions within 12 months following such
purchases (see "Information Concerning Shares of the Fund - Purchases" in
the Prospectus).
(2) Effective July 1, 1997, MFS has voluntary reduced its advisory fee to 0.65%
per annum on average daily net assets of the Fund in excess of $7 billion.
(3) The Fund has adopted a distribution plan for its shares in accordance with
Rule 12b-1 under the Investment Company Act of 1940, as amended (the "1940
Act") (the "Distribution Plan"), which provides that it will pay
distribution/service fees aggregating up to (but not necessarily all of)
0.35% per annum of the average daily net assets attributable to Class A
shares. Payment of the 0.10% per annum Class A distribution fee will
commence on such date as the Trustees of the Trust may determine. Assets
attributable to Class A shares sold prior to March 1, 1991 are subject to a
service fee of 0.15% per annum. Distribution expenses paid under this Plan,
together with the initial sales charge, may cause long-term shareholders to
pay more than the maximum sales charge that would have been permissible if
imposed entirely as an initial sales charge (see "Information Concerning
Shares of the Fund - Distribution Plan" in the Prospectus).
(4) The Fund's Distribution Plan provides that it will pay distribution/service
fees aggregating up to 1.00% per annum of the average net assets
attributable to Class B shares and Class C shares respectively.
Distribution expenses paid under the Distribution Plan with respect to
Class B or Class C shares, together with any CDSC payable upon redemption
of Class B and Class C shares, may cause long-term shareholders to pay more
than the maximum sales charge that would have been permissible if imposed
entirely as an initial sales charge (see "Information Concerning Shares of
the Fund - Distribution Plan" in the Prospectus).
(5) Based on Class A expenses during the last fiscal year.
(6) The Fund has an expense offset arrangement which reduces the Fund's
custodian fee based upon the amount of cash maintained by the Fund with its
custodian and dividend disbursing agent, and may enter into other such
arrangements and directed brokerage arrangements (which would also have the
effect of reducing the Fund's expenses). Any such fee reductions are not
reflected under "Other Expenses."
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Example of Expenses
An investor would pay the following dollar amounts of expenses on a $1,000
investment in the Fund, assuming (a) 5% annual return and (b) redemption at the
end of each of the time periods indicated (unless otherwise noted):
Period Class A Class B Class C
(1)
1 year $ 69 $ 60 $ 20 $ 30 $ 20 (1)
3 years 94 92 62 62 62
5 years 121 127 107 107 107
10 years 198 211(2) 211(2) 231 231
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(1) Assumes no redemption.
(2) Class B shares convert to Class A shares approximately eight years after
purchase; therefore, years nine and ten reflect Class A expenses.
The purpose of the expense table above is to assist investors in
understanding the various costs and expenses that a shareholder of the Fund will
bear directly or indirectly. More complete descriptions of the following Fund
expenses are set forth in the following sections in the Prospectus: (i) varying
sales charges on share purchases - "Purchases"; (ii) varying CDSCs "Purchases";
(iii) management fees - "Investment Adviser"; and (iv) Rule 12b-1 (i.e.,
distribution plan) fees - "Distribution Plan".
The "Example" set forth above should not be considered a representation
of past or future expenses of the Fund; actual expenses may be greater or less
than those shown.
2. MANAGEMENT OF THE FUND - Investment Adviser
The last sentence of Paragraph 1 on Page 14 of the Prospectus and
Paragraph 2 on Page 14 of the Statement of Additional Information under the
heading "Management of the Fund - Investment Adviser" is hereby amended and
restated as follows to introduce an additional breakpoint to the management fee
effective as of July 1, 1997:
"For its services and facilities, the Adviser receives an annual
management fee, computed and paid monthly, in an amount equal to 0.75%
of the first $2.5 billion and 0.70% of the amount in excess of $2.5
billion of the Fund's average daily net assets; however, effective July
1, 1997, MFS has voluntarily agreed to reduce its management fee to
0.65% of the Fund's average daily net assets in excess of $7 billion,
in each case, on an annualized basis for its then-current fiscal year.
This voluntary reduction in the management fee may be rescinded by MFS
only with the approval of the Fund's Board of Trustees."
The date of this Supplement is August 28, 1997.
