<PAGE>
[LOGO: M F S SEMIANNUAL REPORT
THE FIRST NAME IN MUTUAL FUNDS] APRIL 30, 1995
Updated 6-19-95
MFS(R) WORLD GROWTH FUND
[GRAPHIC OMITTED: photo of window with 2 people talking]
<PAGE>
MFS(R) WORLD GROWTH FUND
<TABLE>
<S> <C>
TRUSTEES CUSTODIAN
A. Keith Brodkin* - Chairman and President State Street Bank and Trust Company
Richard B. Bailey* - Private Investor; AUDITORS
Former Chairman and Director (until 1991), Deloitte & Touche LLP
Massachusetts Financial Services Company
INVESTOR INFORMATION
Marshall N. Cohan - Private Investor For MFS stock and bond market outlooks,
call toll free: 1-800-637-4458 anytime from
Lawrence H. Cohn, M.D. - Chief of Cardiac Surgery, a touch-tone telephone.
Brigham and Women's Hospital; Professor of
Surgery, Harvard Medical School For information on MFS mutual funds,
call your financial adviser or, for an
The Hon. Sir J. David Gibbons, KBE - Chief information kit, call toll free:
Executive Officer, Edmund Gibbons Ltd.; 1-800-637-2929 any business day from
Chairman, Bank of N.T. Butterfield & Son Ltd. 9 a.m. to 5 p.m. Eastern time (or leave
a message anytime).
Abby M. O'Neill - Private Investor;
Director, Rockefeller Financial Services, Inc. INVESTOR SERVICE
(Investment Advisers) MFS Service Center, Inc.
P.O. Box 2281
Walter E. Robb, III - President and Treasurer, Boston, MA 02107-9906
Benchmark Advisors, Inc. (Corporate Financial
Consultants) For general information, call toll free:
1-800-225-2606 any business day from
Arnold D. Scott* - Senior Executive Vice President 8 a.m. to 8 p.m. Eastern time.
and Secretary, Massachusetts Financial Services Company
For service to speech- or hearing-impaired,
Jeffrey L. Shames* - President, Massachusetts call toll free: 1-800-637-6576 any business
Financial Services Company day from 9 a.m. to 5 p.m. Eastern time.
(To use this service, your phone must be
J. Dale Sherratt - President, Insight Resources, Inc. equipped with a Telecommunications
(Acquisition Planning Specialists) Device for the Deaf.)
Ward Smith - Former Chairman (until 1994), For share prices, account balances and
NACCO Industries; Director, Sundstrand exchanges, call toll free: 1-800-MFS-TALK
Corporation (1-800-637-8255) anytime from a touch-tone
telephone.
INVESTMENT ADVISER
Massachusetts Financial Services Company
500 Boylston Street -------------------------------------------
Boston, Massachusetts 02116-3741 TOP-RATED SERVICE
[SEAL] MFS was rated first when securities
PORTFOLIO MANAGERS firms evaluated the quality of
David Mannheim* service they receive from 40
Toni Y. Shimura* mutual fund companies. MFS got
high marks for answering calls
TREASURER quickly, processing transactions
W. Thomas London* accurately and sending statements
out on time.
ASSISTANT TREASURER (Source: 1994 DALBAR Survey)
James O. Yost* -------------------------------------------
SECRETARY
Stephen E. Cavan*
ASSISTANT SECRETARY
James R. Bordewick, Jr.*
*Affiliated with the Investment Adviser
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<PAGE>
LETTER TO SHAREHOLDERS
Dear Shareholders:
The past six months have been a difficult period of transition for many of the
world's stock markets. Political and economic disruptions and a weakening dollar
resulted in stock market corrections in many emerging and developed foreign
markets. During the six months ended April 30, 1995, the total return for Class
A shares of the Fund was -3.88%, while the total returns for Class B and Class C
shares were -4.29% and -4.23%, respectively. These returns assume the
reinvestment of distributions but exclude the effects of any sales charges. Over
this same period, foreign stock markets as measured by the Morgan Stanley
Capital International World Index (the MSCI), a broad, unmanaged index of global
equities, provided a return of +4.82%. A discussion of the Fund's performance
relative to the MSCI may be found in the Portfolio Performance and Strategy
section of this letter.
U.S. Outlook
As the economy enters its fifth year of expansion, it is evidencing a decidedly
decelerating trend from its robust pace of 1994, when gross domestic product
expanded by 4.1%. Estimated growth in this year's first quarter diminished to an
annual rate of 2.8%. Consumer spending slowed considerably during the quarter
and was accompanied by a correspondingly large increase in inventories. As we
begin the year's second quarter, the evidence suggests that the economy has
entered a phase of less-than-full-potential growth, as the April unemployment
rate showed a second consecutive monthly increase. We expect the economy to
continue to grow at this more subdued pace. We do not anticipate that the
slowdown will deteriorate into a recession and, conversely, we remain mindful of
the potential for a reliquified consumer sector to reassert itself as the year
progresses.
Global Outlook
Economic recoveries in both Europe and Japan have been inhibited somewhat by the
yen's and deutsche mark's strengthening against the U.S. dollar. Industrial
companies in these export-led expansions are struggling to compete in a global
marketplace in which their products are less competitively priced. At home, the
consumer sectors in these economies have been impaired by relatively high
unemployment rates and by continued low growth in domestic money supplies. The
central banks of both Germany and Japan have recently lowered interest rates in
an effort to stimulate domestic demand as well as to arrest the strength of
their currencies against the dollar. Our view is that these expansions remain
intact, although at a somewhat sluggish pace, yielding equity investment
opportunities in steady earners as a result. While we view emerging markets with
caution, opportunities exist on a selected basis, particularly at the more
attractive prices resulting from sell-offs in many of these markets last year.
Recently, the dollar has stabilized in world currency markets. Although we
believe that over the long term the dollar continues to represent a sound store
of value, in the near term its relative strength may be restrained by the large
U.S. current-account deficit.
Stock Markets
The U.S. stock market has rebounded from its uninspiring performance during
1994, posting its stongest quarterly results in four years. Recently, stock
prices have responded to growing confidence that the Federal Reserve Board is
nearing the end of its tightening initiatives and that gains in corporate
earnings may remain substantial. Although we expect the economy to slow in 1995,
our outlook for corporate earnings growth remains favorable.
Although the U.S. market has performed positively over the past six months,
most foreign stock markets have lagged. This has been due to uncertain
economic outlooks, volatile currencies and volatile interest rates. However,
now that interest rates in many markets appear to be moderating, we believe
that valuation levels are sustainable and that corporate earnings growth
should be the key to future performance.
Portfolio Performance and Strategy
During the past six months, the Fund's performance was aided by its
overweighting in the U.S., one of the best performing world markets during the
period, and by an overweighting in technology, a top performing industry. This
portion of the portfolio focuses on companies which we believe can achieve
significant market share gains in rapidly growing markets, and where 20% or
better earnings growth can be maintained independent of economic conditions. Our
holdings are concentrated in the technology, leisure and health care sectors, in
companies such as Cadence Design (a leading developer of software used in the
design of electronic circuits), LSI Logic (a leading semiconductor chip
manufacturer) and Ceridian (a leading supplier of outsourcing services).
The Fund's performance was negatively impacted by its investments in Japan,
where a major earthquake and strengthening yen made the economic recovery more
precarious. Our holdings in European markets were also negatively impacted by
the weakening dollar. However, we believe these market corrections have
created some very attractive values for investors and, therefore, we have
continued to focus on "world class" companies with significant earnings
leverage from recovering home and export economies and new products. Examples
of these holdings include electronic companies such as Sharp, NEC and Sony, as
well as industrial leaders such as Mannesmann, Astra and Nissan.
The Fund's performance was also hampered by its investments in emerging
markets such as Mexico, Brazil, Malaysia, Hong Kong and China, where currency
devaluations and rising interest rates affected the outlook for economic
growth. We believe that this "bear" phase in emerging markets is now over.
Asia is a high-quality growth story where many of these dollar-based economies
are now far more competitive than Japan's. Latin America's markets offer
attractive valuations in economies which continue to show recovery and solid
growth. Our emphasis in this part of the portfolio is on global, low-cost
producers such as Usiminas, a Brazilian steel company, or on companies which
are beneficiaries of all the infrastructure being built. These companies
include Telebras and Telefonos de Mexico, the Brazilian and Mexican telephone
companies, as well as Citic Pacific, a Hong Kong conglomerate that should
benefit from the growth on the Chinese mainland.
We appreciate your support and welcome any questions or comments you may
have.
Respectfully,
1 1/2" x 1 5/8" 1 1/2" x 1 5/8" 1 1/2" x 1 5/8"
photo of A. Keith Brodkin, photo of David Mannheim photo of Toni Y. Shimura
Chairman and President Portfolio Manager Portfolio Manager
A. Keith Brodkin David Mannheim Toni Y. Shimura
Chairman and President Portfolio Manager Portfolio Manager
May 17, 1995
<PAGE>
PORTFOLIO MANAGERS PROFILES
David Mannheim began his career at MFS in 1988 as a research specialist and was
promoted to Assistant Vice President - Investments in 1991 and Vice President -
Investments in 1992. In 1993, he was named Portfolio Manager of MFS World Growth
Fund. Mr. Mannheim is a graduate of Amherst College and of Massachusetts
Institute of Technology's Sloan School of Management.
Toni Shimura joined the MFS Research Department in 1987. A graduate of Wellesley
College and of Massachusetts Institute of Technology's Sloan School of
Management, she was promoted to Investment Officer in 1990, Assistant Vice
President - Investments in 1991, and Vice President - Investments in 1992. In
1993, she was named Portfolio Manager of MFS World Growth Fund.
OBJECTIVE AND POLICIES
The Fund's investment objective is to seek capital appreciation by investing in
securities of companies worldwide that are growing at rates expected to be well
above the growth rate of the overall U.S. economy.
The Fund's policy is to invest primarily in securities in three market sectors:
U.S. emerging growth companies; foreign growth companies; and emerging-market
securities. The U.S. emerging growth and foreign growth sectors may include
securities of more established companies which represent opportunities for
long-term growth. Under normal conditions, the Fund will be invested in at least
three different countries, one of which will be the United States. For defensive
reasons or during times of international political or economic uncertainty or
turmoil, most or all of the Fund's investments may be in the United States.
While the Fund primarily invests in equity securities, it may also invest in
fixed-income securities. Dividend and interest income from portfolio securities,
if any, is incidental to the Fund's investment objective of capital
appreciation.
PERFORMANCE SUMMARY
Because mutual funds like MFS World Growth Fund are designed for investors with
long-term goals, we have provided cumulative results as well as the average
annual total returns for Class A, Class B, and Class C shares for the applicable
time periods.
AVERAGE ANNUAL AND CUMULATIVE TOTAL RATES OF RETURN
Class A Investment Results
(net asset value change including reinvested distributions)
11/18/93+ -
6 Months 1 Year 4/30/95
- ------------------------------------------------------------------------------
Cumulative Total Return* -3.88% +2.58% +11.82%
- ------------------------------------------------------------------------------
Average Annual Total Return* -- +2.58% + 8.03%
- ------------------------------------------------------------------------------
The average annual total returns, calculated for the period ended as of the most
recent calendar quarter as required by the Securities and Exchange Commission
(the SEC), with all distributions reinvested and reflecting the maximum sales
charge of 5.75% for the 1-year period ended March 31, 1995 and for the period
from November 18, 1993+ to March 31, 1995, were -4.78% and +2.14%, respectively.
+Commencement of offering of this class of shares.
*These results do not include the sales charge. If the charge had been included,
the results would have been lower.
Class B Investment Results
(net asset value change including reinvested distributions)
11/18/93+ -
6 Months 1 Year 4/30/95
- ------------------------------------------------------------------------------
Cumulative Total Return++ -4.29% +1.76% +10.51%
- ------------------------------------------------------------------------------
Average Annual Total Return++ -- +1.76% + 7.15%
- ------------------------------------------------------------------------------
The average annual total returns, calculated for the period ended as of the most
recent calendar quarter as required by the SEC, for the 1-year period ended
March 31, 1995 and for the period from November 18, 1993+ to March 31, 1995,
with all distributions reinvested and reflecting the current maximum contingent
deferred sales charge (CDSC) of 4%, were -3.77% and +2.93%, respectively.
Class C Investment Results
(net asset value change including reinvested distributions)
1/03/94+ -
6 Months 1 Year 4/30/95
- ------------------------------------------------------------------------------
Cumulative Total Return(S) -4.23% +1.88% +3.53%
- ------------------------------------------------------------------------------
Average Annual Total Return(S) -- +1.88% +2.66%
- ------------------------------------------------------------------------------
The average annual total returns, calculated for the period ended as of the most
recent calendar quarter as required by the SEC, with all distributions
reinvested for the 1-year period ended March 31, 1995 and for the period from
January 3, 1994+ to March 31, 1995, were +0.26% and +0.91%, respectively.
All results represent past performance and are not necessarily an indication of
future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost. All
Class A share results reflect the applicable expense subsidy which is explained
in the Notes to Financial Statements. Had the subsidy not been in effect, the
results would have been less favorable. The subsidy may be rescinded by MFS at
any time.
+ Commencement of offering of this class of shares.
++ These results do not include any CDSC. If the charge had been included,
the results would have been lower.
(S) Class C shares have no initial sales charge or CDSC but, along with Class B
shares, have higher annual fees and expenses than Class A shares.
<PAGE>
PORTFOLIO OF INVESTMENTS - April 30, 1995
Stocks and Warrants - 84.3%
- ------------------------------------------------------------------------------
Issuer Shares Value
- -----------------------------------------------------------------------------
Foreign Stocks - 53.3%
Argentina - 0.8%
Banco Frances del Rio Plata (Finance)* 75,700 $ 480,695
Buenos Aires Embotelladora S.A., ADR
(Beverages) 10,800 297,000
CAPEX S.A. (Utilities - Electric)* 48,000 357,600
Inversiones y Representacion ARP
(Special Products and Services)* 55,000 129,250
Irsa, GDS (Special Products and Services)* 8,300 195,050
Mirgor Sacifia, ADR (Automotive)##* 33,000 61,875
Telecom Argentina S.A., ADR, "B"
(Telecommunications) 12,130 530,687
YPF Sociedad Anonima, ADR (Oils) 56,000 1,134,000
------------
$ 3,186,157
- -----------------------------------------------------------------------------
Australia - 1.7%
Australia & New Zealand Bank Group
Ltd. (Finance) 463,700 $ 1,711,294
News Corp. Ltd. (Media) 92,200 447,436
News Corp. Ltd., Pfd. (Media)* 43,700 192,705
Sydney Harbor Casino Ltd. (Entertainment)* 1,422,000 1,188,013
Western Mining Corp. Holdings, ADS
(Metals and Minerals) 487,200 2,753,662
------------
$ 6,293,110
- -----------------------------------------------------------------------------
Bangladesh - 0.1%
Bangladesh Fund (Finance)+* 27,200 $ 265,200
- -----------------------------------------------------------------------------
Belize - 0.1%
Belize Holdings, Inc. (Finance) 31,500 $ 476,437
- -----------------------------------------------------------------------------
Brazil - 2.2%
Aracruz Celulose S.A., ADR (Forest and
Paper Products) 45,000 $ 433,125
Banco Bradesco S.A. (Finance) 72,800,000 558,957
Brasmotor S.A. (Furniture - Home Appliances)* 1,790,000 484,241
CESP, ADR (Utilities - Electric)##* 38,500 423,500
Cia Cervejaria Brahma (Beverages) 2,200,000 638,578
Cia Vale do Rio Doce (Iron and Steel) 4,930,000 807,213
Companhia Siderurgicas, ADR, "B" (Iron
and Steel)* 23,400 678,600
Electrobas PN, ADR (Utilities - Electric)* 8,300 116,200
Iochpe Maxion S.A., ADR (Automotive) 30,900 378,525
Petrol Brasileiros (Oils) 4,610,000 429,189
Rhodia-Ster S.A., GDR## (Chemicals)* 25,000 337,500
Sadia Concordia S.A. (Food Products) 428,000 412,999
Sider Paulista, Pfd., "B" (Iron and Steel)* 118,000 218,423
Telecom Brasileiras S.A., ADR
(Telecommunications) 45,290 1,653,085
Usiminas, ADR (Iron and Steel)##* 72,300 849,525
------------
$ 8,419,660
- -----------------------------------------------------------------------------
Canada - 1.5%
Echo Bay Mines Ltd. (Precious Metals
and Minerals) 248,300 $ 2,358,850
MacMillan Bloedel Ltd. (Forest and
Paper Products) 56,500 727,437
Placer Dome, Inc. (Precious Metals and
Minerals) 112,500 2,671,875
------------
$ 5,758,162
- -----------------------------------------------------------------------------
Chile - 0.7%
Banco Osorno y La Union, ADR (Finance) 30,000 $ 360,000
Chilquinta S.A., ADR (Media) 19,500 253,500
Chilquinta S.A., ADR (Media)## 5,000 65,000
Compania de Telefonos Chile S.A., ADR
(Telecommunications) 6,500 448,500
Empresas Telex-Chile S.A., ADR
(Telecommunications) 10,000 78,750
Enersis ADS, S.A., ADR (Utilities - Electric) 24,500 686,000
Maderas y Sinteticos Sociedad, ADR
(Forest and Paper Products) 22,100 386,750
Sociedad Quimica y Minera Chile S.A.,
ADR (Chemicals) 3,900 136,012
Vina Concha y Toro S.A., ADR (Beverages)* 15,800 304,150
------------
$ 2,718,662
- -----------------------------------------------------------------------------
China - 0.8%
Chengdu Telecommunications (Electronics)* 230,000 $ 66,852
China Harbin Power Plant Equipment
(Electronics)* 350,000 93,819
China Southern Glass, "B" (Containers) 309,800 178,492
Dong Fang Electric Machinery (Electronics)* 434,000 145,769
Guangzhou Shipyard International Co. Ltd.
(Transportation)* 310,000 122,142
Huaxin Cement Co. (Construction)* 613,200 147,168
Lizhu Pharmaceuticals Group, "B"
(Pharmaceuticals)* 269,000 118,498
Maanshan Iron & Steel Co. (Iron and Steel) 408,000 72,208
Shangdong Huaneng Power Development, ADR
(Electronics) 12,800 104,000
Shanghai Dazhong Taxi Co., "B"
(Automotive)* 278,200 194,740
Shanghai Diesel Engineering, "B" (Special
Products and Services)* 209,000 135,432
Shanghai Haixing Shipping Co.
(Transportation)* 982,000 182,674
Shanghai Lujiazhui, "B" (Finance)* 348,500 234,192
Shanghai Petrochemical (Oils) 738,000 212,124
Shanghai Post & Telecommunications
(Telecommunications)* 632,800 346,774
Shanghai Sanmao, "B" (Apparel and Textiles)* 328,300 98,490
Shanghai Yaohua (Other)* 142,000 125,812
Shenzhen China Bicycles (Bicycles)* 458,500 159,921
Shenzhen Konka Electronics Group Ltd.
(Electronics)* 234,000 115,473
Shenzhen Yili Mineral Water, "B" (Beverages)* 220,000 49,735
Tsingtao Brewery (Beverages)* 188,000 66,787
Yizheng Chemical Fibre Co. Ltd.
(Chemicals) 516,000 171,644
------------
$ 3,142,746
- -----------------------------------------------------------------------------
Colombia - 0.3%
Cadenalco Gran Cadena de Almacenes Colombia,
ADR (Retail)##* 23,000 $ 379,500
Carulla & Cia S.A., ADR (Retail)## 7,000 126,000
Cementos Diamante S.A., ADR (Construction)## 19,800 415,800
Corp. Financiera del Valle S.A., ADR
(Finance)## 17,282 241,948
------------
$ 1,163,248
- -----------------------------------------------------------------------------
Finland - 0.3%
Nokia AB (Telecommunications) 23,600 $ 962,250
- -----------------------------------------------------------------------------
France - 3.8%
Compagnie Bancaire S.A. (Finance) 31,343 $ 3,457,089
Eaux (Compagnie Generale) (Other) 14,813 1,558,630
Elf Aquitaine (Oil and Gas) 33,443 2,667,696
LaFarge-Coppee S.A. (Other) 19,750 1,536,512
Michelin (C.G.D.E.), "B" (Tire and Rubber)* 26,488 1,186,391
Peugeot S.A. (Automotive) 10,171 1,464,806
Rhone-Poulenc S.A. (Chemicals) 77,282 1,880,639
Sidel (Machinery) 2,503 730,614
------------
$ 14,482,377
- -----------------------------------------------------------------------------
Germany - 3.0%
Daimler-Benz AG (Automotive) 6,254 $ 2,861,290
Kaufhof Holdings AG (Consumer Goods) 2,512 890,742
Mannesmann AG (Diversified Machinery)* 17,400 4,715,243
Schering AG (Pharmaceuticals) 1,013 750,898
Volkswagen AG (Automotive) 8,533 2,376,940
--------------
$ 11,595,113
- -----------------------------------------------------------------------------
Ghana - 0.1%
Ashanti Goldfields Co., ADR (Precious
Metals and Minerals)## 13,000 $ 321,750
- -----------------------------------------------------------------------------
Greece - 0.4%
Alpha Credit Bank (Finance) 5,340 $ 259,685
Ergo Bank (Finance)* 5,840 248,000
European Technical (Construction)* 20,170 203,215
Hellenic Biscuits (Food and Beverage
Products)* 28,800 165,444
Hellenic Bottling Co. S.A. (Beverages)* 10,950 304,839
Sarantopoulos (Construction)* 12,500 171,233
------------
$ 1,352,416
- -----------------------------------------------------------------------------
Hong Kong - 2.7%
Amway Asia Pacific Ltd. (Consumer
Goods and Services)* 47,000 $ 1,686,125
Cheung Kong Holdings Ltd. (Real Estate) 184,000 774,887
China Light & Power (Utilities - Electric) 49,400 232,929
Citic Pacific Ltd. (Conglomerate) 317,800 777,976
Esprit Asia Holdings (Apparel and Textiles) 249,000 86,849
Guoco Group Ltd. (Finance) 55,000 208,888
HSBC Holdings PLC (Finance) 52,000 602,894
Hong Kong & China Gas Ltd. (Utilities - Gas) 230,400 334,840
Hong Kong Telecommunications
(Telecommunications) 343,200 671,681
Hutchison Whampoa (Real Estate) 374,000 1,623,356
International Maritime Carrier
Holdings (Transportation) 246,000 162,072
Jardine Matheson Holdings Ltd. (Conglomerate) 5,600 44,520
Johnson Electric Holdings (Electronics) 61,500 133,868
New World Development Co. (Construction) 114,000 296,008
Stone Electric Technologies (Electronics)* 969,000 121,422
Sun Hung Kai Properties (Real Estate) 193,000 1,231,650
Swire Pacific Air Ltd. (Transportation) 7,000 46,796
Television Broadcasting Ltd. (Media) 50,000 186,022
Varitronix International Ltd. (Electronics)* 149,000 217,504
Wah Kwong Shipping Holdings Ltd. (Transportation) 73,000 134,853
Wharf Holdings Ltd. (Real Estate) 175,000 524,480
------------
$ 10,099,620
- -----------------------------------------------------------------------------
Hungary - 0.1%
Fotex (Retail) 112,200 $ 235,242
- -----------------------------------------------------------------------------
India - 1.1%
Bajaj Auto Ltd., GDR (Automotive)* 13,500 $ 340,875
Core Healthcare, GDR (Consumer Goods
and Services)* 41,000 251,194
India Gateway Fund Ltd. (Finance)* 80,000 651,840
India Gateway Fund Ltd., Warrants (Finance)* 16,000 --
India Magnum Fund NV (Finance)* 24,600 1,397,772
Indian Petrochemicals Corp. Ltd., GDR
(Chemicals)##* 22,000 332,750
Indian Tobacco Co., GDR (Tobacco)* 8,100 52,650
JK Corp. Ltd., GDR (Construction)##* 55,000 275,000
NEPC Micon, GDR (Utilities - Electric)##* 142,000 248,500
Reliance Industries, GDS (Apparel and Textiles)* 15,000 232,500
South Indian Viscose, GDR (Apparel and
Textiles)##* 19,600 240,100
------------
$ 4,023,181
- -----------------------------------------------------------------------------
Indonesia - 0.6%
Astra International (Automotive)* 126,300 $ 161,270
Bank International Indonesia (Finance) 70,000 150,986
Hanjaya Mandala Sampoerna (Retail)* 54,500 319,870
Indah Kiat Pulp & Paper Corp. (Forest and
Paper Products)* 209,000 231,754
Indocement Tunggal (Retail) 39,500 159,274
Indofoods Sukses (Food and Beverage Products)* 63,000 231,452
Kalbe Farma (Pharmaceuticals) 56,200 201,434
Kawasan Industries (Special Products
and Services)* 62,000 87,500
PT Indosat, ADR (Telecommunications) 5,400 195,075
PT Inti Indorayon Utama (Forest and
Paper Products)* 75,000 137,769
PT Inti Indorayon Utama S.A., ADR (Forest and 19,000 121,125
Paper Products)##
Roda Vivatex (Apparel and Textiles)* 382,500 231,351
------------
$ 2,228,860
- -----------------------------------------------------------------------------
Italy - 2.3%
Fiat S.p.A. (Automotive) 1,188,200 $ 4,837,671
Pirelli S.p.A. (Tire and Rubber)* 936,500 1,293,262
Telecom Italia (Telecommunications) 963,800 2,567,265
------------
$ 8,698,198
- -----------------------------------------------------------------------------
Japan - 15.1%
DDI Corp. (Telecommunications) 482 $ 4,239,125
Daiei, Inc. (Retail) 221,000 2,731,638
Daiwa Securities Co. Ltd. (Finance)* 274,000 3,451,866
Hokuetsu Bank (Finance) 3,000 18,826
Ito-Yokado Co. Ltd. (Retail) 26,000 1,399,810
Kawasaki Heavy Industries (Aerospace - Defense) 177,000 723,651
Komori Corp. (Printing Machinery) 80,000 1,987,164
Kyocera Corp. (Electronics)* 18,000 1,390,540
Matsuzakaya Co. Ltd. (Retail) 73,000 884,954
NEC Corp. (Electronics - Semiconductors)* 328,000 3,625,386
NTT Data Communications Systems Co.
(Computer Software)* 24 407,892
New Oji Paper Co. Ltd. (Forest and
Paper Products)* 261,000 2,915,855
Nichido Fire & Marine Ltd. (Insurance) 260,000 2,156,881
Nikon Corp. (Jewelry - Watches and Gemstones) 186,000 1,582,791
Nippon Steel Corp. (Steel) 779,000 3,092,299
Nippon Telephone & Telegraph Co.
(Telecommunications) 262 2,313,596
Nissan Motor Co. Ltd. (Automotive)* 458,000 3,342,192
Obayashi Corp. (Engineering and Construction) 188,000 1,572,997
Pioneer Electronics Corp. (Electronics) 92,000 1,935,346
Sankyo Co. Ltd. (Pharmaceuticals)* 2,200 52,817
Sasebo Heavy Industries (Aerospace -
Defense) 254,000 806,014
Sharp Corp. (Electronics)* 394,000 6,462,087
Sony Corp. (Electronics)* 65,100 3,280,532
Sumitomo Bank (Finance) 91,000 1,968,386
Sumitomo Realty & Development (Real Estate) 368,000 2,418,636
Tokyo Ohka Kogyo Ltd. (Chemicals) 64,400 2,005,324
------------
$ 56,766,605
- -----------------------------------------------------------------------------
Malaysia - 1.8%
Berjaya Sports Toto Berhad (Leisure)* 230,000 $ 311,075
DCB Holdings Berhad (Finance)* 300,000 716,744
Genting Berhad (Leisure)* 53,000 482,891
IOI Corp. (Retail)* 378,000 451,549
IOI Properties (Real Estate)* 20,000 72,484
Land & General Berhad (Special
Products and Services) 18,000 52,116
Magnum Corp. Berhad (Entertainment) 8,000 14,578
Renong Berhad (Conglomerate)* 183,000 280,113
Resorts World Berhad (Entertainment) 299,000 1,574,003
Sungei Way Holdings Berhad (Construction)* 146,000 579,389
Technology Resources Industries
Berhad, "A" (Conglomerate)* 317,000 808,706
Telekom Malaysia (Telecommunications) 77,000 530,067
United Engineers Ltd. (Engineering and
Construction)* 110,000 632,517
Westmont Berhad (Transportation)* 75,000 324,965
------------
$ 6,831,197
- -----------------------------------------------------------------------------
Mexico - 1.3%
Cemex S.A., "A" (Construction) 133,506 $ 414,560
Cemex S.A., "B" (Construction)* 38,000 121,803
Cifra S.A. de C.V. (Retail) 450,300 623,955
Corporacion GEO, ADR## (Construction)* 22,000 264,000
Empresas ICA S.A. (Construction) 19,700 167,450
Grupo Carso (Conglomerate)* 82,300 439,666
Grupo Financiaro Banamex, "C" (Finance)* 147,200 245,743
Grupo Sidek S.A. de C.V., ADR (Transportation)* 44,200 237,575
Grupo Situr S.A., "B" (Restaurants and
Lodging) 164,000 69,543
Grupo Televisa (Media)* 33,800 330,100
Pan American Beverage, Inc. (Beverages)* 18,000 468,000
Telefonos de Mexico S.A. (Telecommunications)* 899,000 1,347,750
Telefonos de Mexico S.A., ADR
(Telecommunications) 5,800 175,450
------------
$ 4,905,595
- -----------------------------------------------------------------------------
Netherlands - 0.8%
Wolters Kluwer (Publishing)* 36,140 $ 2,937,625
- -----------------------------------------------------------------------------
New Zealand - 0.5%
Fletcher Challenge Ltd., ADS (Forest
and Paper Products) 679,500 $ 1,826,490
- -----------------------------------------------------------------------------
Pakistan - 0.4%
Cherat Cement Co. (Construction)* 66,000 $ 126,309
Dewan Salman Fibre (Apparel and Textiles)* 51,750 206,889
Dewan Salman Fibre, Rights (Apparel
and Textiles) 3,881 --
Fauji Fertilizer (Chemicals)* 176,600 395,256
ICI Pakistan (Chemicals)* 54,000 373,089
Pakistan Synthetic (Apparel and Textiles)* 36,000 48,694
Pakistan Telecommunications (Telecommunications)* 1,200 131,175
Pakistan Telecommunications (Telecommunications)* 125,000 136,640
Prime Commerical Bank Ltd. (Finance)* 10,000 8,109
Sui Northern Gas (Oil Services)* 204,000 178,662
------------
$ 1,604,823
- -----------------------------------------------------------------------------
Peru - 0.4%
Backus & Johnston (Beverages)* 156,705 $ 380,209
Banco de Credito (Finance)* 145,498 305,559
Cementos Lima (Construction)* 18,480 398,005
Telefonica de Peru (Telecommunications) 263,953 443,460
------------
$ 1,527,233
- -----------------------------------------------------------------------------
Philippines - 0.6%
Ayala Corp. (Real Estate) 134,500 $ 181,407
Benpres Holdings Corp., GDR (Other)##* 30,000 217,500
International Container Terminal
Services (Transportation)* 107,500 60,067
JG Summit Holdings, "B" (Other)* 670,000 211,715
Manila Electric Co. (Utilities - Electric) 17,635 183,486
Metropolitan Bank & Trust Co. (Finance) 9,447 172,012
Petron Corp. (Oil Services)* 271,500 185,708
Philippine Long Distance Telephone,
ADR (Telecommunications) 6,185 394,294
Philippine National Bank (Finance)* 1,093 10,404
RFM Corp. (Retail)* 285,000 77,977
SM Prime Holdings, Inc. (Real Estate)* 749,000 228,019
San Miguel Corp., ADR, "B" (Retail) 5,600 246,400
------------
$ 2,168,989
- -----------------------------------------------------------------------------
Poland - 0.1%
Electrim (Special Products and Services)* 66,000 $ 252,025
- -----------------------------------------------------------------------------
Portugal - 0.5%
Banco Commercial Portugues (Finance)* 22,650 $ 311,351
Cimentos de Portugal S.A. (Construction)* 20,100 388,459
Corticeira Amorim S.A. (Retail) 18,800 292,075
Soares da Costa (Construction)* 17,900 363,481
Sonae Industria Investimentos (Finance) 14,500 352,756
------------
$ 1,708,122
- -----------------------------------------------------------------------------
Singapore - 0.6%
Fraser & Neave Ltd. (Beverages)* 90,000 $ 988,018
Keppel Corp. (Transportation)* 176,000 1,426,993
------------
$ 2,415,011
- -----------------------------------------------------------------------------
South Africa - 0.1%
Southern Africa Minerals Corp. (Precious Metals
and Minerals)* 270,500 $ 398,531
- -----------------------------------------------------------------------------
South Korea - 0.8%
Chohung Bank (Finance)* 19,638 $ 238,294
Korea Asia Fund (Finance)* 5 47,500
Korea Electric Power Corp. (Utilities
- Electric) 9,120 333,790
Korea Electric Power Corp., ADR
(Utilities - Electric)* 5,000 105,000
Korea First Bank (Finance)* 4,430 41,609
Korea Mobile Telecommunications
(Telecommunications) 320 188,902
Korea Mobile Telecommunications, GDR
(Telecommunications)##* 28,000 808,640
LG Chemical Ltd. (Chemicals) 4,160 116,783
LG Electronics Co. (Electronics)* 3,050 129,234
Pohang Iron & Steel Ltd. (Iron and Steel)* 4,200 116,025
Samsung Electronics, GDS (Electronics) 14,780 739,000
------------
$ 2,864,777
- -----------------------------------------------------------------------------
Spain - 0.9%
Banco de Santander S.A. (Finance) 42,750 $ 1,557,222
Iberdrola S.A. (Utilities - Electric) 87,170 572,186
Telefonica de Espana (Utilities -
Telephone) 111,180 1,355,964
------------
$ 3,485,372
- -----------------------------------------------------------------------------
Sri Lanka - 0.2%
Ceylon Grain Elevators (Agriculture)* 40,000 $ 33,239
DFCC Sri Lanka (Finance)* 42,800 349,582
National Development Bank (Finance)* 36,500 159,049
Puttalam Cement Co. (Construction) 950,000 288,812
------------
$ 830,682
- -----------------------------------------------------------------------------
Sweden - 2.2%
Astra AB, Free Shares, "A" (Pharmaceuticals) 127,830 $ 3,722,011
Astra AB, Free Shares, "B" (Pharmaceuticals) 14,850 422,188
SKF Aktiebolaget, Free Shares, "B"
(Metal Fabricate - Hardware) 88,310 1,776,873
Skandinaviska Enskilda Banken, "A" (Finance) 425,110 1,979,293
TV 4 AB (Telecommunications)* 17,700 337,907
------------
$ 8,238,272
- -----------------------------------------------------------------------------
Taiwan - 0.2%
Asia Cement, GDS (Construction)* 3,600 $ 69,300
GVC Corp., GDR (Business Machines) ##* 3,600 55,800
R.O.C. Taiwan Fund (Finance) 8,900 99,012
Tung Ho Steel Enterprises Corp., GDR
(Iron and Steel)## 27,077 528,001
Yageo Corp., GDR (Electronics)* 2,700 54,675
Yageo Corp., GDR (Electronics)##* 804 16,281
------------
$ 823,069
- -----------------------------------------------------------------------------
Thailand - 0.6%
Ban Pu Coal (Coal and Uranium)* 4,067 $ 77,750
Bangkok Bank Ltd. (Finance) 65,800 636,990
Electricity Generating Power Co. Ltd. (Utilities -
Electric)##* 71,300 217,511
Italian Thai Development (Construction)* 8,600 96,547
Kang Yong Electric Co. Ltd. (Utilities
- Electric)* 7,000 53,813
Phatra Thanakit Co. (Finance) 41,200 276,510
Precious Shipping Co. Ltd. (Transportation)* 17,000 175,636
Precious Shipping Co. Ltd. (Transportation) 7,300 78,389
Shinawatra Computer Co. Ltd. (Computers) 6,400 143,177
Siam Cement Co. (Construction) 4,500 258,816
Siam Makro (Retail)* 53,500 204,556
Telecomasia (Telecommunications)* 28,300 103,024
Thailand Farmers Bank Co. (Finance) 20,300 178,353
------------
$ 2,501,072
- -----------------------------------------------------------------------------
Turkey - 0.8%
Akbank T.A.S. (Finance)* 127,025 $ --
Anadolu Malt (Beverages)* 3,245,000 782,618
Arcelik A.S. (Furniture - Home
Appliances) 1,372,106 403,561
Cimentas Fabrikasi (Construction) 179,000 126,353
Ege Biracilik Ve Malt Sanayii A.S.
(Beverages) 673,200 673,200
Migros Turk (Retail)* 195,000 527,647
Tofas-Turk Otomobil Fabrikas (Automotive)* 426,800 391,652
------------
$ 2,905,031
- -----------------------------------------------------------------------------
United Kingdom - 2.7%
ASDA Group PLC (Retail)* 3,282,200 $ 4,336,079
BPB Industries (Building Materials)* 319,900 1,391,542
Huntingdon International Holdings PLC,
ADR (Consumer Goods and Services) 107,400 443,025
Korea Europe Fund (Finance)+ 23 79,005
Sears PLC (Retail) 946,200 1,593,006
Smith (W.H.) Group PLC (Retail)* 100,000 658,933
Vodafone Group PLC (Telecommunications) 533,000 1,665,893
------------
$ 10,167,483
- -----------------------------------------------------------------------------
Venezuela - 0.1%
Mavesa S.A., ADR (Food and Beverage Products)##* 43,866 $ 131,598
- -----------------------------------------------------------------------------
Total Foreign Stocks (Identified Cost, $171,985,306) $200,711,991
- -----------------------------------------------------------------------------
U.S. Stocks - 31.0%
Apparel and Textiles - 0.1%
Donnkenny, Inc.* 6,700 $ 119,762
Team Rental Group, Inc.* 43,300 351,812
------------
$ 471,574
- -----------------------------------------------------------------------------
Automotive - 1.6%
APS Holdings Corp.* 175,000 $ 3,915,625
Harvard Industries, Inc., "B"* 112,000 2,198,000
------------
$ 6,113,625
- -----------------------------------------------------------------------------
Banks and Credit Companies - 0.4%
First Financial Management Corp. 25,000 $ 1,828,125
- -----------------------------------------------------------------------------
Biotechnology - 0.1%
Guidant Corp.* 10,000 $ 198,750
- -----------------------------------------------------------------------------
Business Machines - 0.7%
Affiliated Computer Co., "A"* 93,000 $ 2,534,250
National Instruments Corp.* 2,200 41,250
------------
$ 2,575,500
- -----------------------------------------------------------------------------
Business Services - 3.3%
BISYS Group, Inc.* 5,500 $ 114,125
Ceridian Corp.* 110,000 3,795,000
Computer Sciences, Inc.* 60,000 2,962,500
Interim Services, Inc.* 120,000 3,465,000
SPS Transaction Services Corp.* 43,000 1,316,875
Transaction System Architects* 35,000 721,875
------------
$ 12,375,375
- -----------------------------------------------------------------------------
Cellular Telephones - 0.8%
Cellular Communications of Puerto Rico* 115,300 $ 3,185,162
- -----------------------------------------------------------------------------
Chemicals - 0.2%
Grace (W.R.) & Co. 16,000 $ 858,000
- -----------------------------------------------------------------------------
Computer Software - 0.2%
Corel Corp.* 40,000 $ 555,000
Expert Software, Inc.* 1,300 19,175
------------
$ 574,175
- -----------------------------------------------------------------------------
Computer Software - Personal Computers - 2.2%
Autodesk, Inc. 75,000 $ 2,554,687
Datastream Systems, Inc.* 800 19,200
Electronic Arts, Inc.* 20,000 460,000
General Magic, Inc.* 3,500 48,562
Learning Co.* 42,700 1,120,875
Microsoft Corp.* 20,000 1,637,500
Spectrum Holobyte Industries* 150,000 2,287,500
------------
$ 8,128,324
- -----------------------------------------------------------------------------
Computer Software - Systems - 4.7%
Adobe Systems, Inc. 25,000 $ 1,456,250
BMC Software, Inc.* 10,000 622,500
Cadence Design Systems, Inc.* 230,000 7,417,500
Compuware Corp.* 50,000 1,312,500
Oracle Systems Corp.* 40,000 1,220,000
Sierra On-Line, Inc.* 58,000 1,094,750
Stuctural Dynamics Research Corp.* 247,100 2,996,087
Sybase, Inc.* 30,000 727,500
System Software Associates, Inc. 30,000 753,750
------------
$ 17,600,837
- -----------------------------------------------------------------------------
Construction Services - 0.2%
Shaw Group, Inc.* 110,000 $ 673,750
- -----------------------------------------------------------------------------
Consumer Goods and Services - 1.0%
Sola International, Inc.* 55,000 $ 1,203,125
Tyco International Ltd. 45,000 2,362,500
------------
$ 3,565,625
- -----------------------------------------------------------------------------
Electronics - 3.5%
Anadigics, Inc.* 111,900 $ 1,496,662
Kulicke & Soffa Industries, Inc.* 65,000 2,754,375
LSI Logic Corp.* 60,000 3,997,500
LTX Corp.* 437,100 2,677,237
National Semiconductor Corp.* 100,000 2,287,500
------------
$ 13,213,274
- -----------------------------------------------------------------------------
Entertainment - 1.5%
Casino America, Inc.* 63,500 $ 968,375
Grand Casinos, Inc.* 30,000 832,500
Heritage Media Corp.* 46,200 1,178,100
National Gaming Corp.* 8,500 85,000
Promus Cos., Inc.* 52,000 2,002,000
Showboat, Inc. 40,000 610,000
------------
$ 5,675,975
- -----------------------------------------------------------------------------
Financial Institutions - 0.2%
Franklin Resources, Inc. 22,000 $ 885,500
- -----------------------------------------------------------------------------
Food and Beverage Products - 0.5%
Universal Foods Corp. 53,000 $ 1,722,500
- -----------------------------------------------------------------------------
Insurance - 0.5%
Equitable of Iowa Cos. 10,000 $ 366,250
Extendicare, Inc.* 180,000 1,690,608
------------
$ 2,056,858
- -----------------------------------------------------------------------------
Machinery - 0.1%
SI Handling Systems, Inc. 55,000 $ 563,750
- -----------------------------------------------------------------------------
Medical and Health Products - 0.9%
Amerisource Health Corp.* 60,000 $ 1,327,500
Gelman Sciences, Inc.* 2,500 45,000
Sofamor/Danek Group* 30,000 727,500
Uromed Corp.* 68,800 481,600
Zoll Medical Corp.* 48,900 660,150
------------
$ 3,241,750
- -----------------------------------------------------------------------------
Medical and Health Technology and Services - 4.4%
Advantage Health Corp.* 85,000 $ 2,380,000
Cardinal Health, Inc. 22,500 1,037,812
Community Health Systems* 52,200 1,813,950
Genesis Health Ventures, Inc.* 50,000 1,362,500
Health Management Assoc., Inc.* 52,000 1,508,000
HealthWise of America, Inc.* 88,750 2,485,000
Integrated Health Services, Inc. 20,000 692,500
Living Centers of America* 42,000 1,191,750
Manor Care, Inc. 50,000 1,468,750
Medaphis Corp.* 10,000 570,000
Renal Treatment Centers, Inc.* 15,000 375,000
St. Jude Medical, Inc. 40,000 1,720,000
Surgical Care Affiliates, Inc. 3,000 69,750
------------
$ 16,675,012
- -----------------------------------------------------------------------------
Precious Metals and Minerals - 0.1%
Santa Fe Pacific Corp. 8,707 $ 203,526
- -----------------------------------------------------------------------------
Oil Services - 0.4%
BJ Services Co.* 60,000 $ 1,372,500
- -----------------------------------------------------------------------------
Oils - 0.2%
Mitchell Energy & Development Corp. 50,000 $ 900,000
- -----------------------------------------------------------------------------
Printing and Publishing - 0.6%
Nelson Thomas, Inc. 57,500 $ 1,092,500
Pulitzer Publishing Co. 32,400 1,308,150
------------
$ 2,400,650
- -----------------------------------------------------------------------------
Restaurants and Lodging - 1.1%
Buffets, Inc.* 115,000 $ 1,164,375
Hospitality Franchise System* 54,400 1,652,400
ShoLodge, Inc.* 85,000 1,227,187
------------
$ 4,043,962
- -----------------------------------------------------------------------------
Stores - 0.7%
Boise Cascade Office Products* 4,000 $ 93,500
Dollar Tree Stores, Inc.* 6,500 146,250
Micro Warehouse, Inc.* 30,000 1,050,000
Movie Gallery, Inc.* 40,000 1,250,000
------------
$ 2,539,750
- -----------------------------------------------------------------------------
Telecommunications - 0.8%
Bay Networks, Inc.* 50,000 $ 1,818,750
Cisco Systems, Inc.* 25,000 996,875
Premisys Communications, Inc.* 1,200 54,600
------------
$ 2,870,225
- -----------------------------------------------------------------------------
Total U.S. Stocks (Identified Cost, $141,905,116) $116,514,054
- -----------------------------------------------------------------------------
Total Stocks and Warrants (Identified Cost, $313,890,422) $317,226,045
- -----------------------------------------------------------------------------
Convertible Bonds - 0.4%
- ------------------------------------------------------------------------------
Principal Amount
(000 Omitted)
- -----------------------------------------------------------------------------
U.S. Dollar Denominated - 0.4%
Argosy Gaming Corp., 12s, 2001 $ 200 $ 201,000
Essar Gujarat Ltd., 5.5s, 1998 310 356,500
Land & General Berhad, 4.5s, 2004## 350 420,000
Land & General Berhad, 4.5s, 2004 150 180,000
Teco Electronics & Machinery Ltd., 2.75s, 2015## 210 178,500
------------
$ 1,336,000
- -----------------------------------------------------------------------------
Non-U.S. Dollar Denominated
Michelin, 2.5s, 2001 FRF 1,062 $ 55,009
- -----------------------------------------------------------------------------
Total Convertible Bonds (Identified Cost, $1,421,214) $ 1,391,009
- -----------------------------------------------------------------------------
Short-Term Obligations - 14.6%
- -----------------------------------------------------------------------------
Federal Home Loan Bank, due 5/05/95 $ 6,035 $ 6,031,057
Federal Home Loan Mortgage Corp., due
5/01/95 - 5/16/95 31,765 31,747,337
Federal National Mortgage Assn., due
5/08/95 - 5/15/95 9,650 9,636,386
Tennessee Valley Authority, due 5/09/95 7,520 7,510,224
- -----------------------------------------------------------------------------
Total Short-Term Obligations, at Amortized Cost and Value $ 54,925,004
- -----------------------------------------------------------------------------
Total Investments (Identified Cost, $370,236,640) $373,542,058
Other Assets, Less Liabilities - 0.7% 2,791,492
- -----------------------------------------------------------------------------
Net Assets - 100.0% $376,333,550
- -----------------------------------------------------------------------------
* Non-income producing security.
## SEC Rule 144A restriction.
+ Restricted security.
Abbreviations have been used throughout this report to indicate amounts shown
in currencies other than the U.S. dollar. A list of abbreviations is shown
below.
DEM = Deutsche Marks
FRF = French Francs
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
- ------------------------------------------------------------------------------
April 30, 1995
- ------------------------------------------------------------------------------
Assets:
Investments, at value (identified cost, $370,236,640) $373,542,058
Cash 157,506
Foreign currency, at value (identified cost, $2,216) 2,928
Net receivable for forward foreign currency exchange contracts
sold 65,880
Receivable for investments sold 13,155,979
Receivable for Fund shares sold 668,515
Interest and dividends receivable 765,312
Deferred organization expenses 24,508
Other assets 14,883
------------
Total assets $388,397,569
------------
Liabilities:
Payable for investments purchased $ 10,848,314
Payable for Fund shares reacquired 901,397
Net payable for forward foreign currency exchange contracts 753
Payable to affiliates -
Management fee 27,865
Shareholder servicing agent fee 5,983
Distribution fee 91,484
Accrued expenses and other liabilities 188,223
------------
Total liabilities $ 12,064,019
------------
Net assets $376,333,550
------------
Net assets consist of:
Paid-in capital $365,532,056
Unrealized appreciation on investments and translation of
assets and liabilities in foreign currencies 3,392,491
Accumulated undistributed net realized gain on investments and
foreign currency transactions 8,094,011
Accumulated net investment loss (685,008)
------------
Total $376,333,550
------------
Shares of beneficial interest outstanding 22,826,868
------------
Class A shares:
Net asset value and redemption price per share
(net assets of $131,461,576 / 7,938,392 shares of beneficial
interest outstanding) $16.56
------
Offering price per share (100/94.25) $17.57
------
Class B shares:
Net asset value, offering price, and redemption price per share
(net assets of $232,447,638 / 14,132,414 shares of beneficial
interest outstanding) $16.45
------
Class C shares:
Net asset value, offering price, and redemption price per share
(net assets of $12,424,336 / 756,062 shares of beneficial
interest outstanding) $16.43
------
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
and Class B shares.
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Statement of Operations
- ------------------------------------------------------------------------------
Six Months Ended April 30, 1995
- ------------------------------------------------------------------------------
Net investment income:
Income -
Interest $ 1,737,306
Dividends 1,549,776
Foreign taxes withheld (189,107)
------------
Total investment income $ 3,097,975
------------
Expenses -
Management fee $ 1,625,423
Trustees' compensation 16,245
Shareholder servicing agent fee (Class A) 93,911
Shareholder servicing agent fee (Class B) 246,595
Shareholder servicing agent fee (Class C) 8,860
Distribution and service fee (Class A) 219,155
Distribution and service fee (Class B) 1,120,883
Distribution and service fee (Class C) 59,067
Custodian fee 195,665
Postage 41,636
Printing 21,670
Auditing fees 7,450
Legal fees 6,769
Amortization of organization expenses 3,221
Miscellaneous 388,875
------------
Total expenses $ 4,055,425
Preliminary reduction of expenses by distributor (62,636)
------------
Net expenses $ 3,992,789
------------
Net investment loss $ (894,814)
------------
Realized and unrealized gain on investments:
Realized gain (identified cost basis) -
Investment transactions $ 8,602,270
Foreign currency transactions 164,885
------------
Net realized gain on investments $ 8,767,155
------------
Change in unrealized appreciation (depreciation) -
Investments $(23,792,039)
Translation of assets and liabilities in foreign currencies 529,953
------------
Net unrealized loss on investments $(23,262,086)
------------
Net realized and unrealized loss on investments and foreign
currency $(14,494,931)
------------
Decrease in net assets from operations $(15,389,745)
------------
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
Statement of Changes in Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Six Months Ended Year Ended
April 30, 1995 October 31, 1994*
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment loss $ (894,814) $ (1,588,322)
Net realized gain on investments and foreign currency transactions 8,767,155 4,811,224
Net unrealized gain (loss) on investments and foreign currency translation (23,262,086) 26,654,577
------------ ------------
Increase (decrease) in net assets from operations $(15,389,745) $ 29,877,479
------------ ------------
Distributions declared to shareholders -
From net realized gain on investments and foreign currency transactions
(Class A) $ (1,679,929) $ --
From net realized gain on investments and foreign currency transactions
(Class B) (1,881,561) --
From net realized gain on investments and foreign currency transactions
(Class C) (124,750) --
------------ ------------
Total distributions declared to shareholders $ (3,686,240) $ --
------------ ------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 99,446,507 $442,273,385
Net asset value of shares issued to shareholders in reinvestment of
distributions 2,741,059 --
Cost of shares reacquired (87,123,323) (91,805,572)
------------ ------------
Increase in net assets from Fund share transactions $ 15,064,243 $350,467,813
------------ ------------
Total increase (decrease) in net assets $ (4,011,742) $380,345,292
Net assets:
At beginning of period 380,345,292 --
------------ ------------
At end of period (including accumulated undistributed net investment income
(loss) of $(685,008) and $209,806, respectively) $376,333,550 $380,345,292
------------ ------------
*For the period from the commencement of investment operations, November 18,
1993 to October 31, 1994.
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
Financial Highlights
- --------------------------------------------------------------------------------------------------------------------
<CAPTION>
Six Months Year Six Months Year Six Months Year
Ended Ended Ended Ended Ended Ended
April 30, October 31, April 30, October 31, April 30, October 31,
1995 1994<F1> 1995 1994<F1> 1995 1994<F2>
- --------------------------------------------------------------------------------------------------------------------
Class A Class B Class C
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value -
beginning of period $17.45 $15.00 $17.32 $15.00 $17.34 $16.04
------ ------ ------ ------ ------ ------
Income from investment
operations<F6> -
Net investment loss<F7> $ -- $(0.02) $(0.06) $(0.15) $(0.06) $(0.13)
Net realized and
unrealized gain (loss)
on investments and
foreign currency
transactions (0.67) 2.47 (0.68) 2.47 (0.68) 1.43
------ ------ ------ ------ ------ ------
Total from investment
operations $(0.67) $ 2.45 $(0.74) $ 2.32 $(0.74) $ 1.30
------ ------ ------ ------ ------ ------
Less distributions
declared to shareholders
from net realized gain
on investments
and foreign currency
transactions $(0.22) $ -- $(0.13) $ -- $(0.17) $ --
------ ------ ------ ------ ------ ------
Net asset value - end of
period $16.56 $17.45 $16.45 $17.32 $16.43 $17.34
------ ------ ------ ------ ------ ------
Total return<F5><F4> (3.88)% 16.33% (4.29)% 15.47% (4.23)% 8.10%
Ratios (to average net assets)/Supplemental data<F7><F3>:
Expenses 1.68% 1.57% 2.50% 2.39% 2.43% 2.31%
Net investment income
(loss) 0.04% (0.14)% (0.78)% (0.95)% (0.71)% (0.83)%
Portfolio turnover 81% 100% 81% 100% 81% 100%
Net assets at end of
period (000 omitted) $131,462 $131,503 $232,448 $236,971 $12,424 $11,872
<FN>
- -------------
<F1> For the period from the commencement of investment operations, November 18,
1993 to October 31, 1994.
<F2> For the period from the commencement of offering of Class C shares, January
3, 1994 to October 31, 1994.
<F3> Annualized.
<F4> Not annualized.
<F5> 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.
<F6> Per share data are based on average shares outstanding.
<F7> The investment adviser did not impose a portion of its distribution fee for
the periods indicated. If this fee had been incurred by the Fund, the net
investment income per share and the ratios would have been:
Net investment loss<F6> -- $ (0.04) -- -- -- --
Ratios (to average net assets)<F3>:
Expenses 1.78% 1.67% -- -- -- --
Net investment loss (0.06)% (0.24)% -- -- -- --
See notes to financial statements
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(1) Business and Organization
MFS World Growth Fund (the Fund) is a non-diversified series of MFS Series Trust
VIII (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
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
and forward contracts, 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 value. Non-U.S. dollar denominated short-term
obligations are valued at amortized cost as calculated in the base currency and
translated into U.S. dollars at the closing daily exchange rate. Futures
contracts, options and options on futures contracts listed on commodities
exchanges are valued at closing settlement prices. Over-the-counter options are
valued by brokers through the use of a pricing model which takes into account
closing bond valuations, implied volatility and short-term repurchase rates.
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.
Repurchase Agreements - The Fund may enter into repurchase agreements with
institutions that the Fund's investment adviser has determined are creditworthy.
Each repurchase agreement is recorded at cost. The Fund requires that the
securities purchased in a repurchase transaction be transferred to the custodian
in a manner sufficient to enable the Fund to obtain those securities in the
event of a default under the repurchase agreement. The Fund monitors, on a daily
basis, the value of the securities transferred to ensure that the value,
including accrued interest, of the securities under each repurchase agreement is
greater than amounts owed to the Fund under each such repurchase agreement.
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 and 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.
Deferred Organization Expenses - Costs incurred by the Fund in connection with
its organization have been deferred and are being amortized on a straight-line
basis over a five-year period beginning on the date of commencement of
operations of the Fund.
Written Options - The Fund may write covered call or put options for which
premiums are received and are recorded as liabilities, and are subsequently
adjusted to the current value of the options written. Premiums received from
writing options which expire are treated as realized gains. Premiums received
from writing options which are exercised or are closed are offset against the
proceeds or amount paid on the transaction to determine the realized gain or
loss. If a put option is exercised, the premium reduces the cost basis of the
security purchased by the Fund. The Fund, as writer of an option, may have no
control over whether the underlying securities may be sold (call) or purchased
(put) and, as a result, bears the market risk of an unfavorable change in the
price of the securities underlying the written option. In general, written call
options may serve as a partial hedge against decreases in value in the
underlying securities to the extent of the premium received. Written options may
also be used as a part of an income producing strategy reflecting the view of
the Fund's management on the direction of interest rates.
Futures Contracts - The Fund may enter into stock-index futures contracts for
the delayed purchase of a notional quantity of stock-index assets at a fixed
price on a future date. In entering such contracts, the Fund is required to
deposit either in cash or securities an amount equal to a certain percentage of
the contract amount. Subsequent payments are made or received by the Fund each
day, depending on the daily fluctuations in the value of the underlying index,
and are recorded for financial statement purposes as unrealized gains or losses
by the Fund. The Fund's investment in stock-index futures contracts is designed
to hedge against anticipated future changes in securities prices. The Fund may
also invest in stock-index futures contracts for non-hedging purposes. For
example, short (sell) stock-index futures may be used to protect the portfolio
against a fall in the market value of its underlying equity investments without
incurring the additional transaction costs involved in selling the underlying
securities. Should securities prices move unexpectedly, the Fund may not achieve
the anticipated benefits of the stock-index futures contracts and may realize a
loss.
Security Loans - The Fund may lend its securities to member banks of the Federal
Reserve System and to member firms of the New York Stock Exchange or
subsidiaries thereof. The loans are collateralized at all times by cash or
securities with a market value at least equal to the market value of securities
loaned. As with other extensions of credit, the Fund may bear the risk of delay
in recovery or even loss of rights in the collateral should the borrower of the
securities fail financially. The Fund receives compensation for lending its
securities in the form of fees or from all or a portion of the income from
investment of the collateral. The Fund would also continue to earn income on the
securities loaned. At April 30, 1995, the Fund had no securities on loan.
Forward Foreign Currency Exchange Contracts - The Fund may enter into forward
foreign currency exchange contracts for the purchase or sale of a specific
foreign currency at a fixed price on a future date. Risks may arise upon
entering these contracts from the potential inability of counterparties to meet
the terms of their contracts and from unanticipated movements in the value of a
foreign currency relative to the U.S. dollar. The Fund will enter into forward
contracts for hedging purposes as well as for non-hedging purposes. For hedging
purposes, the Fund may enter into contracts to deliver or receive foreign
currency it will receive from or require for its normal investment activities.
It may also use contracts in a manner intended to protect foreign
currency-denominated securities from declines in value due to unfavorable
exchange rate movements. For non-hedging purposes, the Fund may enter into
contracts with the intent of changing the relative exposure of the Fund's
portfolio of securities to different currencies to take advantage of anticipated
changes. The forward foreign currency exchange contracts are adjusted by the
daily forward exchange rate of the underlying currency and any gains or losses
are recorded for financial statement purposes as unrealized until the contract
settlement date.
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 both 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 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.
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. 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 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 period ended October 31, 1994, $1,798,128 was reclassified
from accumulated net realized gain on investments and foreign currency
transactions to accumulated undistributed net investment income due to
differences between book and tax accounting for passive foreign investment
companies, short-term capital gains and currency transactions. This change had
no effect on the net assets or net asset value per share.
Multiple Classes of Shares of Beneficial Interest - The Fund offers Class A,
Class B and Class C shares. The three classes of shares differ in their
respective shareholder servicing agent, distribution and service fees.
Shareholders of each class also bear certain expenses that pertain only to that
particular class. All shareholders bear the common expenses of the Fund pro rata
based on the 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, including distribution
and shareholder service fees.
(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, computed daily and paid monthly at an annual rate of 0.90% of
average daily net assets, amounted to $1,625,423. The advisory agreement permits
the adviser to engage one or more sub-advisers and the adviser has engaged
Oechsle International Advisers, L.P., a Delaware Limited Partnership, and
Batterymarch Financial Management, a Massachusetts business trust, to assist in
the performance of its services.
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. Included in Trustees' compensation is a net
periodic pension expense of $2,245 for the six months ended April 30, 1995.
Distributor - MFD, a wholly owned subsidiary of MFS, as distributor, received
$34,515 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, Class B
and Class C 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% of
its average daily net assets attributable to Class A shares annually 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 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, 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. MFD is waiving the 0.10% distribution fee for an
indefinite period. Prior to the waiver, fees incurred under the distribution
plan during the six months ended April 30, 1995 were 0.35% of average daily net
assets attributable to Class A shares on an annualized basis and amounted to
$219,155 (of which MFD retained $22,220).
The Class B and Class C Distribution Plans provide that the Fund will pay MFD a
monthly distribution fee, equal to 0.75% per annum, and a quarterly 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 additional consideration for services rendered by the dealer with respect to
Class B and Class C shares. Fees incurred under the distribution plans during
the six months ended April 30, 1995 were 1.00% of average daily net assets
attributable to Class B and Class C shares on an annualized basis and amounted
to $1,120,883 and $59,067, respectively (of which MFD retained $6,809 and
$2,249, respectively).
A contingent deferred sales charge is imposed on shareholder redemptions of
Class A shares, on purchases of $1 million or more, in the event of a
shareholder redemption within twelve months following the share 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 six months ended April 30, 1995 were $904 and
$341,352 for Class A and Class B shares, respectively.
Shareholder Servicing Agent - MFSC, a wholly owned subsidiary of MFS, earned
$93,911, $246,595 and $8,860 for Class A, Class B and Class C shares,
respectively, 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%, up to 0.22% and up to 0.15%
attributable to Class A, Class B and Class C shares, respectively.
(4) Portfolio Securities
Purchases and sales of investments, other than U.S. government securities,
purchased option transactions and short-term obligations, aggregated
$234,487,969 and $218,237,393, respectively.
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:
Aggregate cost $370,816,722
-------------
Gross unrealized appreciation $ 30,488,133
Gross unrealized depreciation (27,762,797)
-------------
Net unrealized appreciation $ 2,725,336
-------------
(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:
<TABLE>
<CAPTION>
Class A Shares Six Months Ended Year Ended
April 30, 1995 October 31, 1994<F1>
-------------------------------- ----------------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 2,550,603 $41,503,405 9,816,517 $157,514,885
Shares issued to shareholders in
reinvestment of distributions 80,619 1,312,473 -- --
Shares reacquired (2,228,456) (36,331,451) (2,280,891) (37,853,320)
---------- ----------- ---------- ------------
Net increase 402,766 $ 6,484,427 7,535,626 $119,661,565
---------- ----------- ---------- ------------
<CAPTION>
Class B Shares Six Months Ended Year Ended
April 30, 1995 October 31, 1994<F1>
-------------------------------- ----------------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 3,358,428 $54,478,965 16,702,222 $269,173,872
Shares issued to shareholders in
reinvestment of distributions 83,838 1,359,028 -- --
Shares reacquired (2,995,244) (48,430,914) (3,016,830) (49,857,102)
---------- ----------- ---------- ------------
Net increase 447,022 $ 7,407,079 13,685,392 $219,316,770
---------- ----------- ---------- ------------
<CAPTION>
Class C Shares Six Months Ended Year Ended
April 30, 1995 October 31, 1994<F2>
-------------------------------- ----------------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 213,521 $ 3,464,137 931,213 $ 15,584,628
Shares issued to shareholders in
reinvestment of distributions 4,294 69,558 -- --
Shares reacquired (146,591) (2,360,958) (246,375) (4,095,150)
---------- ----------- ---------- ------------
Net increase 71,224 $ 1,172,737 684,838 $ 11,489,478
---------- ----------- ---------- ------------
<FN>
- ----------
<F1> For the period from the commencement of offering of Class A and Class B
shares, November 18, 1993 to October 31, 1994.
<F1> For the period from the commencement of offering of Class C shares, January
3, 1994 to October 31, 1994.
</TABLE>
(6) Line of Credit
The Fund entered into an agreement which enables it to participate with other
funds managed by MFS, or an affiliate of 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 six
months ended April 30, 1995 was $3,011.
(7) Financial Instruments
The Fund trades financial instruments with off-balance sheet risk in the normal
course of its investing activities in order to manage exposure to market risks
such as interest rates and foreign currency exchange rates. These financial
instruments include written options, forward foreign currency exchange contracts
and futures contracts. The notional or contractual amounts of these instruments
represent the investment the Fund has in particular classes of financial
instruments and does not necessarily represent the amounts potentially subject
to risk. The measurement of the risks associated with these instruments is
meaningful only when all related and offsetting transactions are considered. A
summary of obligations under these financial instruments at April 30, 1995, is
as follows:
Forward Foreign Currency Exchange Contracts
Contracts to Contracts Net Unrealized
Settlement Date Deliver In Exchange for at Value Appreciation
- ------------------------------------------------------------------------------
Sell 6/21/95 DEM 9,847,000 $7,178,220 $7,112,340 $65,880
Forward foreign currency purchases and sales under master netting arrangements
and closed forward foreign currency exchange contracts excluded above amounted
to a net payable of $753 at April 30, 1995.
At April 30, 1995, the Fund had sufficient cash and/or securities to cover any
commitments under these contracts.
(8) Restricted Securities
The Fund may invest not more than 15% of its total net assets in securities
which are subject to legal or contractual restrictions on resale. At April 30,
1995, the Fund owned the following restricted securities (constituting 2.03% of
net assets) which may not be publicly sold without registration under the
Securities Act of 1933 (the 1933 Act). The Fund does not have the right to
demand that such securities be registered. The value of these securities 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. Certain of
these securities may be offered and sold to "qualified institutional buyers"
under Rule 144A of the 1933 Act.
Share/
Description Date of Acquisition Par Amount Cost Value
- ------------------------------------------------------------------------------
Ashanti Goldfields Co.,
GDR 4/20/94 13,000 $260,000 $321,750
Bangladesh Fund 11/14/94 - 11/18/94 27,200 298,730 265,200
Benpres Holdings Corp. 10/25/94 - 11/17/94 30,000 324,000 217,500
CESP, ADR 2/17/94 - 9/28/94 38,500 612,548 423,500
Cadenalco Gran Cadena
de Almacenes
Colombia, ADR 12/16/94 23,000 356,500 379,500
Carulla & Cia S.A., ADR 11/30/94 7,000 122,500 126,000
Cementos Diamante S.A.,
ADR 5/17/94 19,800 303,732 415,800
Chilquinta S.A., ADR 2/28/95 5,000 80,000 65,000
Corp. Financiera del
Valle S.A., ADR 11/23/93 - 6/10/94 17,282 311,350 241,948
Corporation GEO, ADR 7/27/94 22,000 385,000 264,000
Electricity Generating
Power Co. Ltd. 10/27/94 71,300 63,702 217,511
GVC Corp., GDR 4/10/95 3,600 59,850 55,800
Indian Petrochemicals
Corp. Ltd. 12/08/94 22,000 305,250 332,750
JK Corp. Ltd., GDR 10/14/94 55,000 440,000 275,000
Korea Europe Fund 11/02/94 - 12/30/94 23 100,625 79,005
Korea Mobile
Telecommunications 1/06/95 - 3/02/95 28,000 728,812 808,640
Land & General Berhad,
4.5s, 2004 7/15/94 350,000 350,000 420,000
Mavesa S.A., ADR 11/22/93 - 2/08/95 43,866 338,555 131,598
Mirgor Sacifia 10/20/94 33,000 297,000 61,875
NEPC Micon, GDR 11/03/94 142,000 451,560 248,500
PT Inti Indorayon Utama
S.A., ADR 11/24/93 - 12/20/93 19,000 125,813 121,125
Rhodia Ster S.A., GDR 12/19/94 25,000 337,500 337,500
South Indian Viscose 7/28/94 19,600 374,360 240,100
Teco Electronics and
Machinery Ltd.,
2.75s, 2015 11/04/94 - 1/03/95 210,000 207,732 178,500
Tung Ho Steel
Enterprises Corp. 9/09/94 - 10/19/94 27,077 461,601 528,001
Usiminas, ADR 9/20/94 72,300 960,144 849,525
Yageo Corp. 3/27/95 804 9,607 16,281
----------
$7,621,909
----------
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Trustees of MFS Series Trust VIII and Shareholders of MFS World Growth
Fund: We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of MFS World Growth Fund as of April 30,
1995, the related statement of operations for the six months then ended, the
statements of changes in net assets for the six months then ended and the year
ended October 31, 1994, and the financial highlights for the six months ended
April 30, 1995 and for the period from November 18, 1993 (commencement of
operations) to October 31, 1994. 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 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
April 30, 1995 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 World Growth
Fund at April 30, 1995, 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
June 14, 1995
---------------------------------------------
This report is prepared for the general information of shareholders. It is
authorized for distribution to prospective investors only when preceded or
accompanied by a current prospectus.
<PAGE>
MFS(R) WORLD -------------
GROWTH FUND [LOGO: NUMBER 1 DALBAR BULK RATE
TOP RATED SERVICE] U.S. POSTAGE
PAID
500 Boylston Street PERMIT #55638
Boston, MA 02116 BOSTON, MA
-------------
[LOGO: M F S
THE FIRST NAME IN MUTUAL FUNDS]
MWG-3 6/95/57M 9/209/309
