<PAGE>
[Logo] M F S(R)
INVESTMENT MANAGEMENT
75 YEARS
WE INVENTED THE MUTUAL FUND(R)
MFS(R) GLOBAL
GROWTH FUND
(formerly MFS(r) World Growth Fund)
SEMIANNUAL REPORT o APRIL 30, 1999
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DIVERSIFYING YOUR INVESTMENT PORTFOLIO (see page 46)
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<PAGE>
TABLE OF CONTENTS
Letter from the Chairman .................................................. 1
Management Review and Outlook ............................................. 3
Performance Summary ....................................................... 8
Portfolio of Investments .................................................. 11
Financial Statements ...................................................... 32
Notes to Financial Statements ............................................. 39
MFS' Year 2000 Readiness Disclosure ....................................... 45
Trustees and Officers ..................................................... 49
MFS(R) ORIGINAL RESEARCH(SM)
RESEARCH HAS BEEN CENTRAL TO INVESTMENT MANAGEMENT AT MFS
SINCE 1932, WHEN WE CREATED ONE OF THE FIRST IN-HOUSE
RESEARCH DEPARTMENTS IN THE MUTUAL FUND (SM)
INDUSTRY. ORIGINAL RESEARCH(SM) AT MFS IS MORE ORIGINAL RESEARCH
THAN JUST CRUNCHING NUMBERS AND CREATING
ECONOMIC MODELS: IT'S GETTING TO KNOW MFS
EACH SECURITY AND EACH COMPANY PERSONALLY.
MAKES A DIFFERENCE
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NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
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<PAGE>
LETTER FROM THE CHAIRMAN
[Photo of Jeffrey L. Shames]
Jeffrey L. Shames
Dear Shareholders,
Over 75 years ago, MFS invented the mutual fund, giving Americans greater access
to the investment markets. Since then, we have been guided by a number of
fundamental principles, including diversification and professional management
backed by MFS(R) Original Research(SM), a process by which we seek long-term
investment opportunities.
We have found that these principles have matched those of our shareholders. In a
recent survey for MFS by Roper Starch Worldwide, Inc., a major consumer research
firm, over 60% of mutual fund shareholders said they are investing for long-term
goals such as retirement. The survey also showed that investors realize that the
extraordinary stock market gains of the past few years cannot be sustained.
These views certainly seem to have guided investors during last year's market
correction. Beginning with the collapse of Asian markets at the end of 1997 and
continuing with the volatility in U.S. markets through October of 1998, only 7%
of mutual fund investors took money out of the stock market.
We are even more pleased that MFS investors reacted calmly to last year's market
turmoil, indicating their commitment to diversification. As a result, throughout
the late summer and fall of 1998, daily purchases of MFS stock and bond funds
were well ahead of redemptions.
Over the past year or so, however, diversified investment programs have not
financially rewarded investors. A very narrow band of about 25 stocks
representing the largest U.S. growth companies has, until recently, vastly
outperformed the rest of the market. In 1998, for example, the return on the
Standard & Poor's 500 Composite Index (a popular, unmanaged index of common
stock total return performance) increased 28.58%. However, over half of the
stocks in the index returned less than 10%, including 198 stocks that posted
negative returns.
While 1997 and 1998 were good years for large-company growth stocks, 1996 was
dominated by the mid-sized value category. Prices of value stocks do not fully
reflect the companies' underlying values or future prospects. In 1995, the
best-performing sector was small-company growth stocks. We believe this change
of market leadership shows that while diversification may not provide the best
performance in the short run, it should benefit investors over the long term. In
fact, as 1999 progresses, we are seeing signs of renewed strength from a broader
group of industries, including electric utilities and paper products and
chemical companies. We believe our diversified MFS Family of Funds(R), supported
by Original Research, is well positioned to benefit from a broader market.
Most mutual fund investors refrain from trying to predict short-term trends.
Despite the large stock market gains of the past several years, the Roper Starch
survey shows that people do not see performance as the only reason to invest.
These investors also cite a desire to put investment decisions in the hands of
experts, a belief that mutual funds can be less risky than other investments,
and an appreciation of the convenience of mutual fund investing.
We appreciate the fact that our fund shareholders and their advisers share our
belief that mutual fund investing is not a way to speculate in the markets but
is a way to use the investment markets to help them work toward their long-term
goals. Our goal at MFS is to offer professionally managed investment products
with the potential to sustain returns over a variety of market cycles.
We thank you for your confidence and welcome any questions or comments you may
have.
Respectfully,
/s/ Jeffrey L. Shames
Jeffrey L. Shames
Chairman and Chief Executive Officer
MFS Investment Management(R)
May 17, 1999
<PAGE>
MANAGEMENT REVIEW AND OUTLOOK
For the six months ended April 30, 1999, Class A shares of the Fund provided a
total return of 23.65%, Class B shares 23.24%, Class C shares 23.21%, and Class
I shares 23.87%. These returns assume the reinvestment of distributions but
exclude the effects of any sales charges.
During the same period, the average global fund tracked by Lipper Analytical
Services, Inc., an independent firm that reports mutual fund performance,
returned 19.65%. The Fund's returns also compare to a 20.51% return for the
Morgan Stanley Capital International (MSCI) All Country World Index, an
unmanaged index of developed-country and emerging market equities.
Q. WHAT FACTORS HAVE CONTRIBUTED TO THE FUND'S STRONG PERFORMANCE?
A. Investments in emerging markets and in U.S. technology and telecommunications
companies have helped performance. Emerging market holdings account for about
15% of the Fund's portfolio. Prior to this six-month period, those holdings
were hurt by the downturn in emerging markets that began in 1997. However,
since late last year, stock prices in emerging markets have rebounded
strongly because investors have become more confident that political and
economic reforms in these countries eventually may result in strong economic
growth.
Several of the Fund's U.S. technology and telecommunications holdings,
including Cisco Systems, Microsoft, and MCI WorldCom, also have helped
performance. Technology companies, particularly U.S. software companies,
continue to help corporations around the world become more productive. In
general, technology companies have been insulated from a slowdown in the
economy and continue to generate very strong earnings growth. Similarly, the
explosion in wireless communications and data transmission has boosted
revenues and earnings for telecommunications companies around the world.
Q. WHAT OTHER U.S. SECTORS HAVE HELPED PERFORMANCE?
A. The leisure sector, which includes media, cable, and publishing companies,
has done well. MediaOne, for example, has reported strong earnings and is now
being acquired by AT&T at a premium. Another holding, Time Warner, continues
to expand its reach into cable and entertainment, and its stock has performed
very well as a result.
Q. WHERE ARE YOU INVESTING IN EUROPE?
A. We like European consumer staples and financial services companies. Stocks of
several consumer staples companies were hurt last year by their exposure to
emerging markets. However, we believe the recent economic improvement in Asia
and Latin America should enable these companies to rebound. Holdings in this
sector include Benckiser, a Dutch company that makes soap and other household
products; Nestle, a Swiss food company; and Unilever, a Dutch food and
household products company. We also think stock prices of European financial
services companies are attractive in relation to our earnings and growth
outlooks for them. We continue to see opportunities for consolidation in this
sector, which we believe should drive costs down and result in positive
earnings for several years. One of our larger European holdings in this
sector is UBS, a Swiss bank whose stock has risen following its merger last
year with Swiss Bank Corp. The rapid growth of the European media and
communications industry also has helped such broadcast holdings as Mediaset
in Italy, Television Francaise in France, and Capital Radio in the United
Kingdom.
Q. WHAT'S YOUR VIEW ON JAPAN?
A. Even though Japan has been one of the best-performing international markets
this year, those gains are largely anticipating potential corporate earnings
improvements rather than reflecting any real change. We believe the Japanese
government has taken positive steps toward reforming the banking sector. If
these reforms are carried out, we believe they will be positive for the
Japanese equity market. Our strategy in Japan is to focus on individual
companies rather than on the market as a whole. We are looking for companies
with the strongest franchises that have the potential to increase earnings
consistently over the next few years. We have found a number of companies
that we think fit these criteria, such as NTT Mobile Communications; Secom, a
security services company; Takeda Chemical, a pharmaceutical company; and
Chugai Pharmaceutical.
Q. NOW THAT EMERGING MARKETS SEEM TO BE COMING BACK, ARE YOU INCREASING YOUR
WEIGHTINGS IN THESE MARKETS?
A. The Fund typically has had a weighting of 10% to 20% of assets in emerging
markets, and that weighting has not changed. We held on to our positions last
year when these markets were in turmoil, and that strategy has paid off
recently as the stocks have bounced back. Despite the recent rebound, most
emerging markets are still a long way from their previous high levels but, in
most cases, stock market valuations remain attractive. As these economies
return to above-average growth rates, we expect further improvements in stock
prices.
Q. WHAT POSITIONS HAVE HURT PERFORMANCE?
A. Our positions in the European defense industry have hurt performance.
Investors reacted negatively to the British Aerospace purchase of GEC
Marconi's defense business. However, we continue to believe that there will
be fewer companies in the industry over the long term and that these
companies should be more efficient and better able to compete globally. We
have maintained positions in British Aerospace, as well as in Saab in Sweden,
both of which appear well positioned to benefit from the consolidation trend.
Q. WHAT'S YOUR OUTLOOK FOR INTERNATIONAL MARKETS?
A. European economies are still lagging the U.S. economy. Interest rates in
Europe have declined and the euro has weakened, which should stimulate growth
by making exports cheaper. In addition, restructuring efforts that started in
earnest several years ago are beginning to show results, with companies
cutting costs and reducing redundant operations. We expect this restructuring
to be positive for corporate earnings growth. We think the combination of low
interest rates, improved earnings, and attractive valuations on a global
basis should support European equity markets.
Markets in Japan had a strong run at the beginning of the year but have taken
a breather recently. In general, we believe Japanese companies have
tremendous potential to restructure their businesses to improve
profitability. The market gains in the first quarter reflected some of this
potential. The question remains whether these companies have the will to
carry out their restructuring plans. We see signs of restructuring efforts in
some companies, and their stock prices have responded favorably. To move
ahead, we believe the overall Japanese market needs to show clear evidence of
an economic rebound and further progress on restructuring.
As long as the reform process which started last year remains on track, we
are optimistic that emerging markets can continue to move ahead.
Although those markets have had a strong run already this year, we believe
they remain well off their 1997 highs and continue to be attractive from a
valuation standpoint.
/s/ David A Antonelli /s/ John W. Ballen
David A. Antonelli John W. Ballen
Director of International Equity Research* Portfolio Manager
/s/ Toni Y. Shimura
Toni Y. Shimura
Portfolio Manager
*The committee of MFS international research analysts is responsible for the
day-to-day management of a portion of the Fund under the general supervision of
Mr. Antonelli.
The opinions expressed in this report are those of the portfolio managers and
are current only through the end of the period of the report as stated on the
cover. The managers' views are subject to change at any time based on market and
other conditions, and no forecasts can be guaranteed.
It is not possible to invest directly in an index.
<PAGE>
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PORTFOLIO MANAGERS' PROFILES
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JOHN W. BALLEN IS PRESIDENT, CHIEF INVESTMENT OFFICER, AND A MEMBER OF THE
EXECUTIVE COMMITTEE AND BOARD OF DIRECTORS OF MFS INVESTMENT MANAGEMENT(R).
HE IS PORTFOLIO MANAGER OF MFS(R) EMERGING GROWTH FUND. MR. BALLEN IS ALSO A
PORTFOLIO MANAGER OF MFS(R) INSTITUTIONAL EMERGING EQUITIES FUND, MFS(R)
EMERGING GROWTH SERIES (PART OF MFS(R) VARIABLE INSURANCE TRUST(SM)), THE
EMERGING GROWTH SERIES OFFERED THROUGH MFS(R)/ SUN LIFE ANNUITY PRODUCTS,
MFS(R) INSTITUTIONAL MID CAP GROWTH FUND, MFS(R) GLOBAL GROWTH FUND, AND THE
GLOBAL GROWTH SERIES OFFERED THROUGH MFS(R)/SUN LIFE ANNUITY PRODUCTS. MR.
BALLEN JOINED THE MFS RESEARCH DEPARTMENT IN 1984 AS A RESEARCH ANALYST. HE
WAS NAMED INVESTMENT OFFICER AND PORTFOLIO MANAGER IN 1986, VICE PRESIDENT IN
1987, DIRECTOR OF RESEARCH IN 1988, SENIOR VICE PRESIDENT IN 1990, DIRECTOR
OF EQUITY PORTFOLIO MANAGEMENT IN 1993, CHIEF EQUITY OFFICER IN 1995,
EXECUTIVE VICE PRESIDENT IN 1997, AND PRESIDENT, CHIEF INVESTMENT OFFICER,
AND A MEMBER OF THE BOARD IN 1998. MR. BALLEN IS A GRADUATE OF HARVARD
COLLEGE AND EARNED A MASTER OF COMMERCE DEGREE FROM THE UNIVERSITY OF NEW
SOUTH WALES IN AUSTRALIA AND AN M.B.A. DEGREE FROM STANFORD UNIVERSITY.
TONI Y. SHIMURA IS VICE PRESIDENT OF MFS INVESTMENT MANAGEMENT(R) AND
PORTFOLIO MANAGER OF MFS(R) MANAGED SECTORS FUND AND THE MANAGED SECTORS
SERIES OFFERED THROUGH MFS(R)/SUN LIFE ANNUITY PRODUCTS. SHE IS ALSO A
PORTFOLIO MANAGER OF MFS(R) GLOBAL GROWTH FUND, MFS(R) EMERGING GROWTH SERIES
(PART OF MFS(R) VARIABLE INSURANCE TRUST(SM)), AND THE GLOBAL GROWTH SERIES
AND THE EMERGING GROWTH SERIES, BOTH OFFERED THROUGH MFS(R)/SUN LIFE ANNUITY
PRODUCTS. MS. SHIMURA JOINED MFS IN 1987 AS A RESEARCH ANALYST. SHE WAS NAMED
INVESTMENT OFFICER IN 1990, ASSISTANT VICE PRESIDENT IN 1991, VICE PRESIDENT
IN 1992, AND A PORTFOLIO MANAGER IN 1993. MS. SHIMURA IS A GRADUATE OF
WELLESLEY COLLEGE AND THE SLOAN SCHOOL OF MANAGEMENT OF THE MASSACHUSETTS
INSTITUTE OF TECHNOLOGY.
ALL EQUITY PORTFOLIO MANAGERS BEGAN THEIR CAREERS AT MFS INVESTMENT
MANAGEMENT(R) AS RESEARCH ANALYSTS. OUR PORTFOLIO MANAGERS ARE SUPPORTED BY
AN INVESTMENT STAFF OF OVER 100 PROFESSIONALS UTILIZING MFS(R) ORIGINAL
RESEARCH(SM), A COMPANY-ORIENTED, BOTTOM-UP PROCESS OF SELECTING SECURITIES.
This report is prepared for the general information of shareholders. It is
authorized for distribution to prospective investors only when preceded or
accompanied by a current prospectus. A prospectus containing more information,
including the exchange privilege and all charges and expenses, for any other MFS
product is available from your financial adviser, or by calling MFS at
1-800-225-2606. Please read it carefully before investing or sending money.
<PAGE>
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FUND FACTS
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OBJECTIVE: SEEKS CAPITAL APPRECIATION BY INVESTING IN SECURITIES
OF COMPANIES WORLDWIDE GROWING AT RATES MANAGERS EXPECT
TO BE WELL ABOVE THE GROWTH RATE OF THE U.S. ECONOMY.
COMMENCEMENT OF
INVESTMENT OPERATIONS: NOVEMBER 18, 1993
CLASS INCEPTION: CLASS A NOVEMBER 18, 1993
CLASS B NOVEMBER 18, 1993
CLASS C JANUARY 3, 1994
CLASS I JANUARY 2, 1997
SIZE: $528.7 MILLION NET ASSETS AS OF APRIL 30, 1999
PERFORMANCE SUMMARY
Because mutual funds are designed for investors with long-term goals, we have
provided cumulative results as well as the average annual total returns for the
applicable time periods. Investment results reflect the percentage change in net
asset value, including reinvestment of dividends. (See Notes to Performance
Summary for more information.)
Average Annual and Cumulative Total Rates of Return through April 30, 1999
<TABLE>
<CAPTION>
Class A
6 Months 1 Year 3 Years 5 Years 10 Years/Life*
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<S> <C> <C> <C> <C> <C>
Cumulative Total Return +23.65% +3.76% +37.73% +81.81% +98.24%
- ------------------------------------------------------------------------------------------------------------------
Average Annual Total Return -- +3.76% +11.26% +12.70% +13.38%
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SEC Results -- -2.20% + 9.08% +11.38% +12.16%
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<CAPTION>
Class B
6 Months 1 Year 3 Years 5 Years 10 Years/Life*
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<S> <C> <C> <C> <C> <C>
Cumulative Total Return +23.24% +3.03% +34.63% +74.98% +90.09%
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Average Annual Total Return -- +3.03% +10.42% +11.84% +12.51%
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SEC Results -- -0.75% + 9.59% +11.58% +12.40%
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*For the period from the commencement of the Fund's investment operations, November 18, 1993, through April 30, 1999.
<CAPTION>
Class C
6 Months 1 Year 3 Years 5 Years 10 Years/Life*
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<S> <C> <C> <C> <C> <C>
Cumulative Total Return +23.21% +2.99% +34.59% +75.21% +90.46%
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Average Annual Total Return -- +2.99% +10.41% +11.87% +12.55%
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SEC Results -- +2.05% +10.41% +11.87% +12.55%
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<CAPTION>
Class I
6 Months 1 Year 3 Years 5 Years 10 Years/Life*
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<S> <C> <C> <C> <C> <C>
Cumulative Total Return +23.87% +4.09% +38.69% +83.19% +99.67%
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Average Annual Total Return -- +4.09% +11.52% +12.87% +13.53%
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*For the period from the commencement of the Fund's investment operations, November 18, 1993, through April 30, 1999.
</TABLE>
NOTES TO PERFORMANCE SUMMARY
Class A share ("A") SEC results include the maximum 5.75% sales charge. Class B
share ("B") SEC results reflect the applicable contingent deferred sales charge
(CDSC), which declines over six years from 4% to 0%. Class C shares ("C") have
no initial sales charge but, like B, have higher annual fees and expenses than
A. C SEC results reflect the 1% CDSC applicable to shares redeemed within 12
months. Class I shares ("I") have no sales charge or Rule 12b-1 fees and are
only available to certain institutional investors.
C results include the performance and the operating expenses (e.g., Rule 12b-1
fees) of B for periods prior to the inception of C. Operating expenses of C are
not significantly different than those of B. The B performance included in the C
SEC performance has been adjusted to reflect the CDSC generally applicable to C
rather than the CDSC generally applicable to B.
I results include the performance and the operating expenses (e.g., Rule 12b-1
fees) of A for periods prior to the inception of I. Because operating expenses
of A are greater than those of I, I performance generally would have been higher
than A performance. The A performance included in the I performance has been
adjusted to reflect the fact that I have no initial sales charge.
Performance results reflect any applicable expense subsidies and waivers,
without which the results would have been less favorable. Subsidies and waivers
may be rescinded at any time. See the prospectus for details. All results are
historical and assume the reinvestment of dividends and capital gains.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND SHARES, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS.
Investments in foreign and emerging market securities may provide superior
returns but also involve greater risk than U.S. investments. Investments in
foreign and emerging market securities may be favorably or unfavorably affected
by changes in interest rates and currency exchange rates, market conditions, and
the economic and political conditions of the countries where investments are
made. These risks may increase share price volatility. See the prospectus for
details.
PORTFOLIO CONCENTRATION AS OF APRIL 30, 1999
FIVE LARGEST STOCK SECTORS
TECHNOLOGY 19.1%
UTILITIES & COMMUNICATIONS 19,0%
FINANCIAL SERVICES 16.0%
LEISURE 10.3%
MISCELLANEOUS 6.3%
TOP 10 STOCK HOLDINGS
MCI WORLDCOM, INC. 3.6% GLOBAL TELESYSTEMS GROUP, INC. 1.6%
U.S. telecommunications company U.S. operator of telecommunications
systems in Europe
MICROSOFT CORP. 3.4%
U.S. computer software and TIME WARNER, INC. 1.5%
systems company U.S. publishing and entertainment
company
CISCO SYSTEMS, INC. 3.1%
U.S. computer network developer QWEST COMMUNICATIONS
INTERNATIONAL, INC. 1.3%
TYCO INTERNATIONAL LTD. 3.0% U.S. Internet data communications
U.S. security systems, packaging, and company
electronic equipment conglomerate
MEDIAONE GROUP, INC. 1.3%
ORACLE CORP. 2.1% U.S. telecommunications company
U.S. database software developer
and manufacturer BP AMOCO PLC 1.2%
British oil and petrochemical company
The portfolio is actively managed, and holdings are subject to change.
<PAGE>
PORTFOLIO OF INVESTMENTS (Unaudited) -- April 30, 1999
<TABLE>
<CAPTION>
STOCKS - 96.4%
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ISSUER SHARES VALUE
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<S> <C> <C>
Foreign Stocks - 51.6%
Argentina - 0.5%
Banco de Galicia y Buenos Aires S.A. de C.V., ADR
(Banks and Credit Cos.) 9,062 $ 208,993
Irsa Inversiones y Representaciones (Real Estate) 20,000 67,028
Perez Companc S.A. (Oils) 62,776 389,375
Quilmes Industrial S.A., ADR (Beverages) 1,500 16,406
Siderar S.A., ADR (Steel) 3,444 10,612
Siderca S.A. (Steel) 86,100 148,154
Telecom Argentina S.A., ADR (Telecommunications) 5,000 172,500
Telefonica de Argentina, ADR (Utilities - Telephone) 14,600 545,675
YPF Sociedad Anonima, ADR (Oils) 28,150 1,182,300
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$ 2,741,043
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Australia - 1.1%
Australia & New Zealand Banking Group Ltd.
(Banks and Credit Cos.)* 313,500 $ 2,482,341
QBE Insurance Group Ltd. (Insurance)* 801,376 3,583,545
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$ 6,065,886
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Bermuda - 0.5%
Ace Ltd. (Insurance) 800 $ 24,200
Dairy Farm International Holdings Ltd.
(Retail Stores - Supermarkets) 1,840,000 2,723,200
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$ 2,747,400
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Brazil - 1.7%
Banco Bradesco S.A., Preferred (Banks and Credit
Cos.) 54,539,000 $ 290,765
Banco Frances S.A. (Banks and Credit Cos.) 9,500 244,625
CEMIG (Utilities - Electric) 15,000 361,439
Centrais Eletricas Brasileiras S.A., ADR (Utilities -
Electric) 59,000 592,360
Companhia Cervejaria Brahma, Preferred (Beverages) 438,433 219,217
Companhia Paranaense de Energia, Preferred, "B"
(Utilities - Electric) 22,141 177,928
Companhia Vale Rio Doce, Bonus Shares (Mining) 29,553 0
Companhia Vale Rio Doce, Preferred (Mining) 26,553 500,668
Embratel Participacoes S.A. (Telecommunications)* 15,287,285 132,613
Embratel Participacoes S.A., Preferred
(Telecommunications)* 12,846,116 209,330
Itausa Investimentos Itau S.A., Preferred
(Conglomerate) 490,000 262,711
Petroleo Brasileiro S.A. (Oils) 9,700 140,650
Petroleo Brasileiro S.A., Preferred (Oils) 4,222,000 686,711
Tele Centro Sul Participacoes S.A.
(Telecommunications)* 21,673,285 118,811
Tele Centro Sul Participacoes S.A., Preferred
(Telecommunications)* 12,047,000 130,630
Tele Norte Leste Participacoes S.A.
(Telecommunications)* 13,323,285 128,417
Tele Norte Leste Participacoes S.A., Preferred
(Telecommunications)* 14,608,000 255,200
Tele Sudeste Celular Participacoes S.A.
(Telecommunications)* 29,265,285 104,015
Telebras, ADR (Telecommunications)* 3,089,000 130
Telebras, Preferred (Telecommunications) 3,089,000 272,427
Telecomunicacoes Brasileiras S.A.
(Telecommunications) 27,900 2,180
Telecomunicacoes Brasileiras S.A., ADR
(Telecommunications) 32,600 2,972,713
Telesp Celular Participacoes S.A.
(Telecommunications)* 20,171,285 109,241
Telesp Celular Participacoes S.A., Preferred
(Telecommunications)* 11,550 114,804
Telesp Participacoes S.A. (Telecommunications)* 17,853,285 236,610
Telesp Participacoes S.A., Preferred
(Telecommunications)* 14,268 356,700
Unibanco S.A. (Banks and Credit Cos.) 5,044,000 249,161
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$ 8,870,056
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Canada - 1.2%
Northern Telecom Ltd. (Telecommunications) 18,400 $ 1,254,650
Canadian National Railway Co. (Railroads) 44,432 2,804,770
Inco Ltd. (Metals) 1,500 28,781
Newcourt Credit Group, Inc. (Finance) 77,700 2,195,025
QLT Phototherapeutics, Inc. (Medical and Health
Products) 400 18,275
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$ 6,301,501
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Chile - 0.2%
Empresa Nacional de Electricidad, ADR (Utilities -
Electric)* 12,910 $ 180,740
Administradora de Fondas de Pensiones Provida
(Financial Services) 3,000 60,375
Chilectra S.A., ADR (Utilities - Electric) 2,100 45,150
Compania Cervecerias Unidas S.A., ADR (Brewery) 3,910 96,039
Compania de Telecom de Chile, ADR (Utilities -
Telephone) 15,090 398,942
Distribucion y Servicio D & S S.A., ADR
(Supermarkets) 9,550 144,444
Embotelladora Andina S.A. (Consumer Goods and
Services) 2,400 34,950
Enersis S.A., ADR (Utilities - Electric) 6,220 118,180
------------
$ 1,078,820
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China
Huaneng Power International, Inc., ADR
(Utilities - Electric)* 2,700 $ 36,281
Shenzhen China Bicycles Co.
(Consumer Goods and Services) 110,500 18,392
------------
$ 54,673
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Colombia
Bancolombia S.A. (Banks and Credit Cos.) 4,500 $ 30,375
Cementos Diamante S.A., ADR (Construction)## 51,338 56,472
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$ 86,847
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Czech Republic
SPT Telecom AS (Telecommunications)* 1,200 $ 17,340
Tabak AS (Tobacco) 150 31,186
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$ 48,526
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Egypt - 0.3%
Ahram Beverage Co., GDR (Beverages)*## 2,000 $ 63,000
Arab International Construction (Construction
Services) 7,800 60,557
Egypt Gas (Utilities - Gas) 1,600 98,497
Egypt Mobile Phone (Utilities - Telephone) 37,000 496,140
Egyptian International Pharmaceutical Industries Co.
(Pharmaceuticals) 1,000 50,547
Industrial & Engineering Enterprises Co. (Building) 6,900 78,512
Madinet Nasar City (Housing) 2,250 67,943
Mi Bank (Banks and Credit Cos.) 6,710 154,286
National Societe Generale Bank (Banks and Credit
Cos.) 6,700 117,306
North Cairo Mills (Food Products) 10 128
Suez Cement Co., GDR (Construction) 2,000 33,100
Suez Cement Co., GDR (Construction)## 17,435 238,436
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$ 1,458,452
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Finland - 1.3%
AO Mosenergo (Conglomerate) 43,782 $ 103,982
Helsingin Puhelin Oyj (Telecommunications) 40,731 1,716,015
Nokia Corp., ADR (Telecommunications) 35,600 2,641,075
Pohjola Group Insurance Corp. (Insurance) 17,495 828,513
Tieto Corp. (Computer Software - Systems) 36,970 1,471,681
------------
$ 6,761,266
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France - 2.7%
Castorama Dubois Investisse (Stores - Building
Products) 14,430 $ 3,451,100
Pernod Ricard Co. (Beverages) 26,000 1,752,900
Sanofi S.A. (Medical and Health Products) 8,592 1,345,421
SEITA (Tobacco) 46,900 2,822,739
Societe Generale (Banks and Credit Cos.) 8,900 1,591,939
Television Francaise (Entertainment) 15,644 3,055,924
------------
$ 14,020,023
- ------------------------------------------------------------------------------------------------
Germany - 2.7%
Henkel KGaA (Chemicals) 48,083 $ 3,802,737
HypoVereinsbank (Banks and Credit Cos.) 63,100 4,110,906
Mannesmann AG (Conglomerate) 39,266 5,166,039
VEBA AG (Oil and Gas) 19,600 1,074,104
------------
$ 14,153,786
- ------------------------------------------------------------------------------------------------
Greece - 1.4%
Alpha Credit Bank (Banking) 7,810 $ 557,767
Antenna TV S.A., ADR (Broadcasting)* 11,900 139,825
Athens Medical Center, GDR (Medical and Health
Technology and Services) 1,500 32,552
Attica Enterprises S.A., GDR (Transportation) 13,950 117,741
Commercial Bank of Greece (Banks and Credit Cos.) 1,800 314,949
Hellenic Bottling (Beverages) 4,170 123,455
Hellenic Telecommunication Organization S.A., GDR
(Telecommunications) 137,968 3,202,309
Intracom S.A. (Telecommunications) 4,150 274,623
National Bank of Greece, GDR (Banks and Credit Cos.) 9,896 674,778
Panafon S.A. (Telecommunications)* 2,950 78,622
STET Hellas Telecommunications S.A., ADR
(Telecommunications)* 62,900 1,698,300
Titan Cement Co., GDR (Building Materials) 2,400 185,424
------------
$ 7,400,345
- ------------------------------------------------------------------------------------------------
Hong Kong - 0.7%
Hutchison Whampoa Ltd. (Conglomerate) 6,000 $ 53,803
Li & Fung Ltd. (Wholesale) 1,060,000 2,598,542
South China Morning Post Ltd. (Publishing) 1,820,000 1,097,800
------------
$ 3,750,145
- ------------------------------------------------------------------------------------------------
Hungary - 0.3%
Magyar Olaj Es Gazipari KT (Gas) 24,255 $ 540,149
Magyar Tavkozlesi Rt., ADR (Telecommunications)* 31,275 879,609
Mol Magyar Olaj Es Gazipari, GDR (Oils) 1,400 30,100
OTP Bank (Banks and Credit Cos.) 400 17,040
OTP Bank Rt. (Banks and Credit Cos.) 4,000 168,447
------------
$ 1,635,345
- ------------------------------------------------------------------------------------------------
India - 0.5%
Bharat Heavy Electricals Ltd. (Utilities - Electric) 22,100 $ 87,645
Formula System (1985) Ltd. (Computer Software -
Systems)* 2,848 72,013
Glaxo India Ltd. (Pharmaceuticals) 7,000 106,785
Hindustan Lever Ltd. (Consumer Goods and Services) 14,200 681,760
Hindustan Petroleum Corp. Ltd. (Oils) 21,000 87,951
Infosys Technologies Ltd. (Computer - Software)* 5,520 339,059
ITC Ltd. (Conglomerate) 15,000 328,147
Larsen & Toubro Ltd. (Conglomerate) 14,700 64,351
Larsen & Toubro Ltd., GDR (Conglomerate) 15,150 66,321
Mahanagar Telephone Nigam Ltd. (Telecommunications) 56,500 205,166
Mahanagar Telephone Nigam Ltd., GDR
(Telecommunications)## 1,700 17,680
NIIT Ltd. (Computer Software - Services) 2,700 101,834
Reliance Industries Ltd. (Conglomerate) 50,000 136,874
State Bank of India (Banks and Credit Cos.) 25,700 93,323
State Bank of India, GDR (Banks and Credit Cos.) 2,200 19,250
Tata Iron and Steel Co. Ltd. (Steel) 1,083 2,035
------------
$ 2,410,194
- ------------------------------------------------------------------------------------------------
Ireland - 0.6%
Anglo Irish Bank PLC (Banks and Credit Cos.)* 1,151,848 $ 3,408,421
- ------------------------------------------------------------------------------------------------
Israel - 0.3%
Bank Hapoalim (Banks and Credit Cos.) 89,265 $ 213,457
Bezek Israeli Telecommunications Corp. Ltd.
(Telecommunications) 70,514 274,578
Blue Square Israel Ltd. (Retail) 1,200 16,650
Discount Investment Corp. (Financial Services) 6,404 232,250
ECI Telecom Ltd. (Telecommunications) 8,112 299,130
Elbit Systems Ltd. (Aerospace) 10,404 146,818
Koors Industries Ltd., ADR (Conglomerate) 4,950 106,425
Teva Pharmaceutical Industries Ltd., ADR
(Pharmaceuticals) 4,410 201,757
------------
$ 1,491,065
- ------------------------------------------------------------------------------------------------
Italy - 1.6%
Banca Carige S.p.A. (Banks and Credit Cos.) 126,109 $ 1,166,469
ERG S.p.A. (Oils) 259,998 851,049
Mediaset S.p.A. (Entertainment) 323,214 2,798,511
San Paolo Imi S.p.A (Banks and Credit Cos.)* 153,217 2,297,303
Telecom Italia S.p.A. (Telecommunications) 109,020 1,159,200
------------
$ 8,272,532
- ------------------------------------------------------------------------------------------------
Japan - 8.7%
Aeon Credit Service Co. Ltd. (Financial Services) 39,930 $ 3,445,413
Canon, Inc. (Special Products and Services) 86,000 2,103,711
Chugai Pharmaceutical Co., Ltd. (Pharmaceuticals) 165,000 1,962,805
Don Quijote Co., Ltd. (Retail) 9,500 2,212,449
Fujimi, Inc. (Electronics) 40,000 2,077,574
Keyence Corp. (Electronics) 22,230 3,340,925
Meitec Corp. (Computer Software - Systems) 83,700 2,720,583
Mikuni Coca-Cola Bottling Co., Ltd.
(Food and Beverage Products) 89,000 1,863,952
Nippon Telephone & Telegraph Co. (Utilities -
Telephone) 277 3,016,671
NTT Mobile Communication Network, Inc.
(Telecommunications) 81 4,749,937
Olympus Optical Co. (Conglomerate) 189,000 2,324,303
Rock Field Co., Ltd. (Food Products) 29,700 641,920
Rohm Co. (Electronics) 12,000 1,447,600
Sanyo Coca-Cola Bottling Co., Ltd.
(Food and Beverage Products) 27,300 647,223
Secom Co. (Consumer Goods and Services) 13,000 1,269,833
Softbank Corp. (Computer - Software) 4,000 131,000
Takeda Chemical Industries Co. (Pharmaceuticals) 128,000 5,565,217
Terumo Corp. (Pharmaceuticals) 130,000 2,831,532
Tokyo Marine & Fire Insurance (Insurance) 63,000 734,129
Ushio, Inc. (Electronics) 244,000 2,784,016
------------
$ 45,870,793
- ------------------------------------------------------------------------------------------------
Jordan - 0.1%
Arab Bank Corp. (Banks and Credit Cos.) 1,780 $ 525,966
- ------------------------------------------------------------------------------------------------
Luxembourg - 0.1%
Egypt Trust (Investment Company)* 45,650 $ 490,738
- ------------------------------------------------------------------------------------------------
Mauritius - 0.2%
Mauritius Commercial Bank Ltd. (Banks and Credit
Cos.) 65,000 $ 248,002
New Mauritius Hotels Ltd. (Restaurants and Lodging) 110,000 202,157
Rogers & Co. Ltd. (Conglomerate) 39,000 235,278
State Bank of Mauritius Ltd. (Banks and Credit Cos.) 600,000 349,980
------------
$ 1,035,417
- ------------------------------------------------------------------------------------------------
Mexico - 2.2%
Cemex S.A. (Construction) 88,301 $ 411,147
Cifra S.A. de C.V. (Retail)* 386,335 732,091
Cifra S.A. de C.V., ADR (Retail)* 6,300 123,637
Corporacion GEO S.A. de C.V. (Housing)*## 9,000 152,190
Desc S.A. de C.V., "B" (Conglomerate) 185,000 236,383
Fomento Economico Mexicano S.A. (Beverages) 11,240 408,855
Grupo Carso, S.A. (Conglomerate) 163,300 787,766
Grupo Continental, S.A. (Beverages)* 4,700 16,286
Grupo Financiero Banamex (Finance)* 125,000 318,760
Grupo Financiero Bancomer (Finance)* 540,000 187,699
Grupo Mexico, S.A. (Metals) 19,000 73,655
Grupo Modelo S.A. de C.V. (Brewery) 231,600 610,662
Grupo Television S.A. de C.V., GDR (Entertainment)* 25,000 1,025,000
Kimberly-Clark de Mexico S.A. de C.V.
(Forest and Paper Products) 97,500 380,076
Organiz Soriana S.A., "B" (Real Estate) 115,800 521,633
Telefonos de Mexico S.A. (Utilities - Telephone) 613,000 2,336,502
Telefonos de Mexico S.A., ADR (Utilities - Telephone) 43,000 3,257,250
------------
$ 11,579,592
- ------------------------------------------------------------------------------------------------
Morocco
Banque Maracaine Commerce (Banks and Credit Cos.) 1,400 $ 30,520
Brasseries Maroc (Consumer Goods and Services) 550 131,178
------------
$ 161,698
- ------------------------------------------------------------------------------------------------
Netherlands - 4.5%
Akzo Nobel N.V. (Chemicals) 37,230 $ 1,680,553
ASM Lithography Holding N.V. (Computer Software -
Systems)* 600 23,400
Benckiser N.V., "B" (Consumer Goods and Services) 74,273 4,093,779
Equant N.V. (Computer Software - Services)* 39,800 3,552,150
Fugro N.V. (Engineering)* 54,389 1,473,063
Hunter Douglas N.V., ADR (Consumer Goods and
Services)* 83,288 3,209,950
IHC Caland N.V. (Marine Equipment)* 23,867 1,081,130
ING Groep N.V. (Financial Services)* 61,043 3,757,746
Koninklijke Ahrend Groep N.V. (Consumer Goods and
Services)* 100,438 1,951,366
New Holland N.V. (Agricultural Products) 1,200 17,400
Unilever N.V. (Consumer Goods and Services) 21,510 1,471,765
Van der Moolen Holding N.V. (Financial Services)* 23,662 1,666,481
------------
$ 23,978,783
- ------------------------------------------------------------------------------------------------
Pakistan
Hub Power Co. Ltd. (Utilities - Electric) 100 $ 33
Pakistan Telecom, "A" (Telecommunications) 200 80
Sui Northern Gas (Oils)* 1,380 248
------------
$ 361
- ------------------------------------------------------------------------------------------------
Peru - 0.3%
Compania de Minas Buenaventura S.A. (Mining) 36,030 $ 280,809
CPT Telefonica del Peru S.A., "B" (Utilities -
Telephone) 614,377 917,146
Credicorp Ltd. Holdings Co. (Banks and Credit Cos.) 29,811 301,836
------------
$ 1,499,791
- ------------------------------------------------------------------------------------------------
Philippines - 0.6%
Ayala Land, Inc. (Real Estate) 544,000 $ 200,950
Bank of Philippine Islands (Banks and Credit Cos.) 23,700 75,040
Manila Electric Co., "B" (Utilities - Electric) 67,500 258,245
Metro Bank & Trust Co. (Banks and Credit Cos.) 3,700 37,098
Philippine Long Distance Telephone Co.
(Utilities - Telephone) 69,800 2,251,050
Philippine Long Distance Telephone Co., ADR
(Utilities - Telephone) 10,800 350,501
San Miguel Corp., "B" (Brewery) 76,000 162,427
SM Prime Holding, Inc. (Real Estate) 366,000 83,050
------------
$ 3,418,361
- ------------------------------------------------------------------------------------------------
Poland - 0.3%
Agora S.A. (Entertainment)*## 10,611 $ 122,026
Bank Handlowy w Warszawie (Banks and Credit Cos.)*+ 12,079 146,839
Bank Handlowy w Warszawie, GDR
(Banks and Credit Cos.)## 3,200 37,920
Bank Rozwoju Eksportu S.A. (Banks and Credit Cos.) 6,700 149,323
Elektrim Spolka Akcyjna S.A. (Electrical Equipment) 21,433 255,122
Orbis S.A. (Restaurants and Lodging)* 14,523 117,332
Telekomunikacja Polska S.A. (Telecommunications)*## 121,480 747,102
Telekomunikacja Polska S.A., GDR
(Telecommunications)* 11,600 71,340
WBK Wielkopolski S.A. (Consumer Goods and Services) 21,100 115,426
------------
$ 1,762,430
- ------------------------------------------------------------------------------------------------
Portugal - 0.4%
Banco Pinto & Sotto Mayor S.A. (Banks and Credit
Cos.) 123,911 $ 2,309,285
BPI - SGPS, S.A. (Banks and Credit Cos.) 1,050 28,272
Portugal Telecom S.A. (Utilities - Telephone) 700 29,158
------------
$ 2,366,715
- ------------------------------------------------------------------------------------------------
Russia - 0.2%
JSC Surgutneftegaz Co., ADR (Oils) 97,580 $ 707,455
Lukoil Oil Co., ADR (Oils) 10,020 371,542
Rostelecom, GDR (Telecommunications)* 3,875 63,937
Unified Energy Systems, GDR (Utilities - Electric)* 16,977 84,885
------------
$ 1,227,819
- ------------------------------------------------------------------------------------------------
Singapore - 1.4%
Allgreen Properties Ltd. (Real Estate Development)* 80,000 $ 48,591
Asia Pulp & Paper Co. Ltd., ADR
(Consumer Goods and Services) 104,900 1,101,450
City Developments Ltd. (Real Estate) 31,000 206,569
Datacraft Asia Ltd. (Telecommunications) 295,000 926,300
DBS Land Ltd. (Real Estate) 146,000 270,338
Development Bank of Singapore Ltd.
(Banks and Credit Cos.) 257,000 2,727,916
Hong Leong Finance Ltd. (Finance)+ 17,000 41,904
Keppel Corp. Ltd. (Transportation - Marine) 30,000 85,623
Natsteel Electronics Ltd. (Electronics) 76,000 255,455
Overseas Union Bank Ltd. (Banks and Credit Cos.) 129,000 661,812
Sembcorp Industries, Ltd. (Engineering) 80,000 99,540
Singapore Press Holdings Ltd. (Printing and
Publishing) 34,400 507,135
Singapore Telecommunications, Ltd.
(Telecommunications) 134,000 248,119
------------
$ 7,180,752
- ------------------------------------------------------------------------------------------------
South Africa - 0.9%
Anglo American Corp. of South Africa (Mining) 4,983 $ 257,346
Anglo American Corp. of South Africa, ADR (Mining) 900 46,462
Anglo American Platinum Corp. Ltd. (Metals) 27,140 522,138
AngloGold Ltd. (Mining) 6,100 286,941
De Beers Centenary AG (Diamonds - Precious Stones) 17,167 528,925
De Beers Consolidated Mines Ltd. (Mining) 2,800 68,600
Dimension Data Holdings Ltd. (Financial Institutions) 134,051 596,395
Firstrand Ltd. (Financial Services) 45,560 50,206
Imperial Holdings Ltd. (Conglomerate) 32,590 268,010
JD Group Ltd. (Stores)* 44,508 286,593
Liberty Life Association of Africa Ltd. (Insurance) 21,651 281,577
Nedcor Ltd. (Banks and Credit Cos.)* 34,154 747,119
Real Africa Holdings Ltd. (Conglomerate) 83,807 163,341
Rembrandt Controlling Investments Ltd. (Financial
Services) 8,490 64,219
Sanlam Ltd. (Insurance)* 130,630 128,267
Sasol Ltd. (Oils) 76,580 311,750
South African Breweries Ltd. (Brewery) 40,176 337,003
South African Breweries Ltd., ADR (Brewery) 7,200 59,864
------------
$ 5,004,756
- ------------------------------------------------------------------------------------------------
South Korea - 1.6%
Honam Petrochemical Corp. (Chemicals) 18,500 $ 342,593
Housing & Commercial Bank of Korea
(Banks and Credit Cos.) 36,800 867,340
Housing & Commercial Bank of Korea, GDR
(Banks and Credit Cos.)## 1,400 34,020
Kookmin Bank (Banks and Credit Cos.) 38,000 518,182
Kookmin Bank, GDR (Banks and Credit Cos.)## 2,900 39,875
Korea Electric Power Corp. (Utilities - Electric) 46,540 1,339,788
Medison Co. (Medical and Health Products) 27,350 306,191
Pohang Iron & Steel Co. Ltd. (Construction) 15,770 1,354,919
Pohang Iron & Steel Co. Ltd., ADR (Construction) 2,000 51,500
Samsung Display Devices Co. (Electronics) 10,550 541,709
Samsung Electronics (Electronics) 19,124 1,471,325
Samsung Fire & Marine Insurance (Insurance) 420 194,444
Shinhan Bank (Banks and Credit Cos.) 56,000 1,337,000
SK Telecom Ltd. (Telecommunications) 94 98,411
SK Telecom Ltd., ADR (Telecommunications)* 14,550 201,881
------------
$ 8,699,178
- ------------------------------------------------------------------------------------------------
Spain - 1.0%
Cortefiel S.A. (Retail) 86,300 $ 2,369,229
Telefonica de Espana (Utilities - Telephone) 64,526 3,021,700
------------
$ 5,390,929
- ------------------------------------------------------------------------------------------------
Sweden - 2.3%
Celsius AB (Aerospace) 142,200 $ 2,192,362
Ericsson LM, "B" (Telecommunication Equipment) 139,200 3,656,641
Saab AB, "B" (Aerospace)* 289,600 2,352,657
Skandia Forsakrings AB (Insurance) 197,000 3,808,231
------------
$ 12,009,891
- ------------------------------------------------------------------------------------------------
Switzerland - 2.2%
Barry Callebaut AG (Food and Beverage Products) 9,700 $ 1,570,876
Compagnie Financiere Richemont AG (Conglomerate) 20 34,015
Julius Baer Holdings (Banks and Credit Cos.) 655 2,132,228
Kuoni Reisen Holdings AG (Transportation) 414 1,465,775
Nestle S.A. (Food and Beverage Products) 1,159 2,145,199
UBS AG (Banks and Credit Cos.)* 12,600 4,279,308
------------
$ 11,627,401
- ------------------------------------------------------------------------------------------------
Taiwan - 0.4%
Fubon Insurance Co., GDR (Insurance) 3,200 $ 36,880
Taipei Fund (Finance) 238 1,969,450
Taiwan Semiconductor Manufacturing Co. Ltd., ADR
(Electronics) 1,300 31,200
------------
$ 2,037,530
- ------------------------------------------------------------------------------------------------
Thailand - 0.5%
Bangkok Expressway (Consumer Goods and Services) 225,000 $ 191,451
BEC World Public Co. Ltd. (Television) 21,000 102,107
Electricity Generating Public Co. Ltd. (Utilities -
Electric) 77,000 171,596
PTT Exploration and Production Public Co. Ltd., ADR
(Oil Services) 66,600 615,267
Siam Cement Public Co. Ltd. (Building Materials) 11,200 331,583
TelecomAsia Corp. Ltd (Utilities - Telephone)* 277,000 239,438
Thai Farmers Bank (Banks and Credit Cos.) 259,000 720,611
------------
$ 2,372,053
- ------------------------------------------------------------------------------------------------
Turkey - 0.5%
Migros Turk T.A.S. (Retail) 190,300 $ 262,409
Akbank (Banks and Credit Cos.) 10,273,689 327,931
Haci Omer Sabanci Holdings A.S., ADR (Conglomerate)## 26,011 181,427
Tupras Turkiye Petrol Rafinerileri A.S. (Oils) 2,157,400 168,026
Turkiye Is Bankasi A.S. (Banks and Credit Cos.) 13,793,310 678,025
Turkiye Is Bankasi A.S., GDR (Banks and Credit
Cos.)## 7,200 35,100
Yapi ve Kredi Bankasi (Banks and Credit Cos.) 35,038,662 841,050
Yapi ve Kredi Bankasi, GDR (Banks and Credit Cos.) 1,550 37,587
------------
$ 2,531,555
- ------------------------------------------------------------------------------------------------
United Kingdom - 5.3%
ARM Holdings PLC, ADR (Computer Software - Systems)* 41,600 $ 1,352,000
BP Amoco PLC (Oils)* 316,288 6,002,123
British Aerospace PLC (Aerospace and Defense)* 153,669 1,149,157
Cable & Wireless Communications PLC
(Telecommunications) 182,900 2,085,452
Capital Radio PLC (Broadcasting) 120,000 1,663,523
Computacenter PLC (Computer - Services) 129,700 959,485
Glaxo Wellcome PLC (Pharmaceuticals)* 60,300 1,786,270
HSBC Holdings PLC (Financial Services)* 2,000 74,318
ICON PLC, ADR (Biotechnology)* 100 1,575
Next PLC (Stores) 89,413 1,105,417
Reuters Group PLC (Business Services) 150,400 2,037,783
Sema Group PLC (Computer Software - Systems) 257,301 2,486,887
SmithKline Beecham PLC (Pharmaceuticals) 155,557 2,056,636
Taylor Nelson Sofres PLC (Market Research) 690,098 1,742,411
Williams PLC (Conglomerate) 491,148 3,396,417
------------
$ 27,899,454
- ------------------------------------------------------------------------------------------------
Venezuela - 0.2%
Ca La Electricidad De Caracas (Utilities - Electric) 53,800 $ 1,134,003
Mavesa S.A. (Consumer Goods and Services) 5,700 17,100
------------
$ 1,151,103
- ------------------------------------------------------------------------------------------------
Estonia - 0.1%
As Eesti Telekom (Telecommunications) 18,255 $ 381,530
Eesti Telekom (Telecommunications)* 1,400 29,610
------------
$ 411,140
- ------------------------------------------------------------------------------------------------
Total Foreign Stocks $272,990,532
- ------------------------------------------------------------------------------------------------
U.S. Stocks - 44.8%
Advertising - 0.1%
Big Flower Holdings, Inc.* 500 $ 17,813
Lamar Advertising Co., "A"* 400 13,450
Omnicom Group, Inc. 6,900 500,250
Outdoor Systems, Inc.* 700 17,631
------------
$ 549,144
- ------------------------------------------------------------------------------------------------
Aerospace
Gulfstream Aerospace Corp.* 400 $ 19,500
- ------------------------------------------------------------------------------------------------
Airlines
Airborne Freight Corp. 400 $ 12,800
Atlas Air, Inc.* 600 17,400
Skywest, Inc. 450 11,700
------------
$ 41,900
- ------------------------------------------------------------------------------------------------
Agricultural Products
Case Corp. 1,200 $ 41,550
- ------------------------------------------------------------------------------------------------
Automotive - 0.4%
AutoNation, Inc. 1,800 $ 25,763
Dana Corp. 6,900 325,162
Dura Automotive Systems, Inc.* 300 8,588
Federal-Mogul Corp. 36,600 1,605,825
Group 1 Automotive, Inc.* 600 15,450
------------
$ 1,980,788
- ------------------------------------------------------------------------------------------------
Banks and Credit Companies - 0.4%
Capital One Financial Corp. 5,800 $ 1,007,388
First Tennessee National Corp. 400 17,250
State Street Corp. 10,300 901,250
------------
$ 1,925,888
- ------------------------------------------------------------------------------------------------
Biotechnology
Waters Corp.* 1,600 $ 168,200
- ------------------------------------------------------------------------------------------------
Broadcasting - 0.1%
ACTV, Inc.* 1,700 $ 26,987
Infinity Broadcasting Corp.* 5,300 146,744
Source Media, Inc. 700 15,313
The Kushner-Locke Co.* 2,500 28,906
Westwood One, Inc.* 500 17,125
------------
$ 235,075
- ------------------------------------------------------------------------------------------------
Building
Sherwin Williams Co. 600 $ 18,675
- ------------------------------------------------------------------------------------------------
Business Machines - 0.9%
Affiliated Computer Services, Inc., "A"* 400 $ 15,300
Motorola, Inc. 41,100 3,293,137
Seagate Technology, Inc.* 600 16,725
Texas Instruments, Inc. 14,700 1,501,238
------------
$ 4,826,400
- ------------------------------------------------------------------------------------------------
Business Services - 0.6%
Abacus Direct Corp.* 200 $ 14,800
Affiliated Managers Group, Inc.* 500 14,531
BISYS Group, Inc.* 10,000 507,500
Building One Services Corp.* 363 5,536
Ceridian Corp.* 2,200 80,575
Comdisco, Inc. 700 18,419
Concord EFS, Inc.* 500 16,688
DST Systems, Inc.* 5,800 337,850
First Data Corp. 40,800 1,731,450
Fiserv, Inc.* 400 23,425
Insight Enterprises, Inc.* 450 12,150
Learning Tree International, Inc.* 25,100 244,725
Lycos, Inc.* 200 19,937
Pegasus Systems, Inc.* 400 18,700
Professional Detailing, Inc.* 400 11,500
------------
$ 3,057,786
- ------------------------------------------------------------------------------------------------
Cellular Telephones
Centinal Cellular Corp.* 400 $ 30,425
- ------------------------------------------------------------------------------------------------
Computer Hardware - Systems
Maxtor Corp.* 1,100 $ 6,222
Synergon Information Systems Co. 2,854 36,246
------------
$ 42,468
- ------------------------------------------------------------------------------------------------
Computer Software - Personal Computers - 3.2%
Microsoft Corp.* 210,000 $ 17,075,625
- ------------------------------------------------------------------------------------------------
Computer Software - Services - 0.1%
EMC Corp.* 6,200 $ 675,413
Informatica Corp. 200 5,650
Micromuse Inc.* 400 13,775
Safeguard Scientifics, Inc. 200 16,200
------------
$ 711,038
- ------------------------------------------------------------------------------------------------
Computer Software - Systems - 3.3%
Adobe Systems, Inc. 300 $ 19,013
Advantage Learning Systems, Inc.* 400 10,550
Aspen Technology, Inc.* 500 4,281
BMC Software, Inc.* 31,837 1,370,981
Business Objects S.A.* 500 11,719
Cadence Design Systems, Inc.* 69,400 941,237
Checkfree Holdings Corp.* 600 28,800
Clarify, Inc.* 600 14,100
Computer Associates International, Inc. 50,775 2,167,458
Compuware Corp.* 79,500 1,937,812
CSG Systems International, Inc.* 400 15,450
Etec Systems, Inc.* 300 9,263
Learning Co., Inc.* 600 18,600
Marimba, Inc. 400 24,300
NCR Corp.* 300 12,300
Oracle Corp.* 392,860 10,631,774
Scitex Corp. Ltd. 1,600 15,400
Synopsys, Inc.* 500 23,562
------------
$ 17,256,600
- ------------------------------------------------------------------------------------------------
Construction Services
Martin Marietta Materials, Inc. 400 $ 24,725
- ------------------------------------------------------------------------------------------------
Consumer Goods and Services - 3.0%
Atwood Oceanics, Inc. 500 $ 17,438
Carson, Inc., "A"* 20,900 80,987
Dial Corp. 500 17,000
Galileo International, Inc. 4,400 215,600
Sotheby's Holdings, Inc. 600 25,575
TV Guide, Inc. 400 16,850
Tyco International Ltd. 188,700 15,331,875
Whittaker Corp. 700 16,800
------------
$ 15,722,125
- ------------------------------------------------------------------------------------------------
Containers - 0.1%
Corning, Inc. 11,000 $ 629,750
Sealed Air Corp.* 300 18,244
Smurfit-Stone Container Corp.* 900 21,037
------------
$ 669,031
- ------------------------------------------------------------------------------------------------
Electrical Equipment
Jabil Circuit, Inc.* 400 $ 18,625
Micrel, Inc.* 400 23,550
------------
$ 42,175
- ------------------------------------------------------------------------------------------------
Electronics - 1.2%
Altera Corp.* 35,200 $ 2,543,200
Analog Devices, Inc.* 11,400 400,425
Applied Materials, Inc.* 5,600 300,300
Applied Micro Circuits Corp.* 400 21,325
ASE Test Ltd. (Electronics) 1,600 33,600
Atmel Corp.* 6,700 122,275
ATMI, Inc.* 600 13,800
Burr-Brown Corp.* 600 15,900
Conexant Systems, Inc.* 400 16,300
Credence Systems Corp.* 600 15,413
Flextronics International Ltd.* 360 16,808
Lattice Semiconductor Corp.* 2,800 114,450
Level One Communications, Inc.* 400 20,550
Linear Technology Corp. 6,500 369,687
LSI Logic Corp.* 600 20,400
Maxim Integrated Products, Inc.* 300 16,800
Microchip Technology, Inc.* 400 14,000
MIPS Technologies, Inc.* 400 15,900
Optical Coating Laboratory, Inc. 300 18,487
Parker-Hannifin Corp. 600 28,162
Photronics, Inc.* 600 14,363
PMC-Sierra, Inc.* 400 38,350
Quanta Services, Inc. 600 17,288
SCI Systems, Inc.* 200 7,613
SIPEX Corp.* 500 7,000
Teradyne, Inc.* 13,400 632,312
The DII Group, Inc.* 700 21,700
Xilinx, Inc.* 30,300 1,382,437
------------
$ 6,238,845
- ------------------------------------------------------------------------------------------------
Energy
BJ Services Co.* 5,600 $ 149,800
Rowan Cos., Inc.* 1,200 19,200
------------
$ 169,000
- ------------------------------------------------------------------------------------------------
Entertainment - 5.1%
CBS Corp.* 30,000 $ 1,366,875
Clear Channel Communications, Inc.* 36,200 2,515,900
Comcast Corp., "A" 57,100 3,750,756
Cox Radio, Inc., "A"* 43,500 2,120,625
Entercom Communications Corp.* 1,000 37,125
Gemstar International Group Ltd.* 6,000 632,250
Harrah's Entertainment, Inc.* 800 17,600
Hearst-Argyle Television, Inc.* 600 15,300
Heftel Broadcasting Corp., "A"* 400 21,750
International Speedway Corp. 300 15,450
Jacor Communications, Inc.* 24,900 1,998,225
MediaOne Group, Inc.* 79,400 6,476,062
Premier Parks, Inc.* 700 24,194
Time Warner, Inc. 111,000 7,770,000
Univision Communications, Inc., "A"* 5,700 329,887
USA Networks, Inc.* 700 26,163
------------
$ 27,118,162
- ------------------------------------------------------------------------------------------------
Financial Institutions - 2.8%
Hambrecht & Quist Group, Inc.* 500 $ 17,625
Associates First Capital Corp., "A" 3,200 141,800
Bear Stearns Cos., Inc. 15,645 729,448
CIT Group, Inc., "A" 400 13,000
Donaldson, Lufkin & Jenrette, Inc. 29,000 2,028,187
Merrill Lynch & Co., Inc. 27,700 2,325,069
Morgan Stanley Dean Witter & Co. 49,200 4,880,025
Paine Webber Group, Inc. 300 14,081
Providian Financial Corp. 4,400 567,875
Schwab (Charles) Corp. 36,700 4,027,825
U.S. Trust Corp. 2,600 237,575
Waddell & Reed Financial, Inc., "A" 600 13,538
------------
$ 14,996,048
- ------------------------------------------------------------------------------------------------
Financial Services
Finet Holdings Corp. 18,900 $ 165,966
- ------------------------------------------------------------------------------------------------
Food and Beverage Products - 0.2%
Coca-Cola Beverage Co. 2,400 $ 49,650
Coca-Cola Beverage Co., ADR 18,400 38,468
Keebler Foods Co.* 500 16,062
Panamerican Beverage, Inc. 32,900 729,969
------------
$ 834,149
- ------------------------------------------------------------------------------------------------
Forest and Paper Products - 0.6%
Bowater, Inc. 500 $ 26,813
International Paper Co. 18,500 986,281
Jefferson Smurfit Corp. 506,000 1,350,824
Weyerhaeuser Co. 9,900 664,537
------------
$ 3,028,455
- ------------------------------------------------------------------------------------------------
Leisure
Penske Motorsports, Inc.* 500 $ 18,125
Speedway Motorsports, Inc. 400 17,350
------------
$ 35,475
- ------------------------------------------------------------------------------------------------
Machinery - 0.4%
Caterpillar, Inc. 10,400 $ 669,500
Deere & Co., Inc. 9,900 425,700
Eaton Corp. 11,000 1,008,562
SI Handling Systems, Inc. 19,050 238,125
------------
$ 2,341,887
- ------------------------------------------------------------------------------------------------
Medical and Health Products - 1.0%
Agouron Pharmaceuticals, Inc.* 280 $ 16,537
AmeriSource Health Corp., "A"* 400 11,075
Biomatrix, Inc.* 400 13,175
Boston Scientific Corp.* 54,400 2,315,400
C.R. Bard, Inc. 300 14,700
Chattem, Inc. 300 11,719
King Pharmaceuticals, Inc.* 1,400 38,675
Perclose, Inc. 400 15,200
Pharmacia & Upjohn, Inc. 47,800 2,676,800
The Liposome, Inc.* 1,200 15,000
------------
$ 5,128,281
- ------------------------------------------------------------------------------------------------
Medical and Health Technology and Services - 0.8%
Alpharma, Inc. 400 $ 11,800
Columbia/HCA Healthcare Corp. 13,700 338,219
Cyberonics, Inc.* 100 813
Enzon, Inc. 1,200 15,600
Gentex Corp.* 800 24,050
Guidant Corp. 48,700 2,614,581
Health Management Associates, Inc., "A"* 7,250 113,281
Henry Schein, Inc.* 300 7,856
IDEXX Laboratories, Inc.* 700 15,837
Medtronic, Inc. 5,430 390,621
Mid Atlantic Medical Services, Inc.* 1,500 13,688
PacifiCare Health Systems, Inc., "B"* 300 23,934
Province Healthcare Co.* 400 8,900
STERIS Corp.* 600 10,650
Transkaryotic Therapies, Inc.* 500 15,500
United Healthcare Corp. 11,200 628,600
Wellpoint Health Networks, Inc., "A"* 200 14,050
------------
$ 4,247,980
- ------------------------------------------------------------------------------------------------
Metal Fabrication
The Timken Co. 900 $ 20,081
- ------------------------------------------------------------------------------------------------
Metals and Minerals - 0.1%
Phelps Dodge Corp. 4,200 $ 265,650
- ------------------------------------------------------------------------------------------------
Mining
Cyprus Amax Minerals Co. 1,300 $ 19,988
- ------------------------------------------------------------------------------------------------
Oil Services - 1.8%
Baker Hughes, Inc. 33,900 $ 1,012,762
Cal Dive International, Inc.* 600 19,200
Diamond Offshore Drilling, Inc. 42,400 1,401,850
ENSCO International, Inc. 11,000 204,188
Friede Goldman International, Inc.* 900 16,819
Global Industries, Inc.* 2,400 29,550
Global Marine, Inc.* 1,800 26,775
Halliburton Co. 41,800 1,781,725
Noble Drilling Corp.* 23,600 463,150
Schlumberger Ltd. 63,600 4,062,450
Smith International, Inc. 7,500 336,562
Varco International, Inc.* 1,300 14,706
------------
$ 9,369,737
- ------------------------------------------------------------------------------------------------
Oils - 0.1%
Apache Corp. 4,200 $ 128,888
Santa Fe International Corp. 6,500 139,750
------------
$ 268,638
- ------------------------------------------------------------------------------------------------
Pharmaceuticals - 0.3%
Andrx Corp.* 200 $ 15,750
Millennium Pharmaceuticals 700 26,031
Sepracor, Inc.* 20,100 1,698,450
------------
$ 1,740,231
- ------------------------------------------------------------------------------------------------
Printing and Publishing
Electronics for Imaging, Inc.* 500 $ 23,656
- ------------------------------------------------------------------------------------------------
Railroads
Kansas City Southern Industries, Inc. 2,900 $ 172,731
- ------------------------------------------------------------------------------------------------
Restaurants and Lodging - 1.3%
Applebee's International, Inc. 800 $ 20,650
Brinker International, Inc.* 700 19,337
CEC Entertainment, Inc.* 500 18,750
Cendant Corp.* 318,554 5,733,972
CKE Restaurants, Inc. 440 7,205
Four Seasons Hotels, Inc. 400 16,700
IHOP Corp.* 300 13,725
Outback Steakhouse, Inc.* 19,600 701,925
Papa John's International, Inc.* 400 16,075
Promus Hotel Corp.* 861 30,996
Starwood Hotels & Resorts 500 18,344
Wendy's International, Inc. 7,600 205,675
------------
$ 6,803,354
- ------------------------------------------------------------------------------------------------
Retail
bebe stores, inc.* 500 $ 19,000
Callaway Golf Co. 1,200 18,075
Intimate Brands, Inc. 1,200 60,000
Lands End, Inc. 800 30,600
Quiksilver, Inc. 600 15,938
Tommy Hilfiger Corp.* 200 13,975
------------
$ 157,588
- ------------------------------------------------------------------------------------------------
Special Products and Services - 0.2%
Abitibi Consolidated, Inc. 52,700 $ 625,812
Harmonic Lightwaves, Inc.* 400 18,250
Newport News Shipbuilding, Inc. 9,400 246,163
Rayovac Corp.* 1,000 27,000
Veritas DGC, Inc.* 1,000 20,250
------------
$ 937,475
- ------------------------------------------------------------------------------------------------
Stores - 1.3%
Abercrombie & Fitch Co.* 200 $ 19,025
AnnTaylor Stores Corp.* 400 19,000
Boise Cascade Office Products Corp.* 900 11,138
CompUSA, Inc.* 1,600 11,200
Consolidated Stores Corp.* 425 14,609
CSK Auto Corp.* 500 12,500
General Nutrition Cos., Inc.* 1,000 16,563
Linens 'n Things, Inc.* 400 18,300
Micro Warehouse, Inc.* 26,450 447,997
Office Depot, Inc.* 185,800 4,087,600
Staples, Inc.* 44,250 1,327,500
Talbots, Inc. 600 18,900
Tiffany & Co. 300 25,200
TJX Cos., Inc. 16,600 552,987
------------
$ 6,582,519
- ------------------------------------------------------------------------------------------------
Supermarkets
Super Sol Ltd. 1,100 $ 14,781
- ------------------------------------------------------------------------------------------------
Technology
Galileo Technology Ltd.* 1,200 $ 27,600
- ------------------------------------------------------------------------------------------------
Telecommunications - 14.4%
ADC Telecommunications, Inc.* 12,100 $ 578,531
Adelphia Communications Corp.* 1,400 95,550
Allegiance Telecom, Inc.* 6,100 280,600
Alltel Corp. 9,100 613,681
Amdocs Ltd.* 1,100 29,563
AT&T Corp.* 71,700 4,579,837
Aware, Inc. 400 22,225
Cablevision Systems Corp.* 300 23,213
Century Telephone Enterprises, Inc. 43,225 1,739,806
Cincinnati Bell, Inc. 800 18,100
Cisco Systems, Inc.* 140,350 16,008,672
CommNet Cellular, Inc.* 800 16,800
Covad Communications Group, Inc. 11,000 1,056,000
Cox Communications, Inc.* 5,800 460,375
Critical Path, Inc. 100 9,950
DSP Communications, Inc.* 1,000 27,250
EchoStar Communications, Corp.* 200 20,063
Electro Scientific Industries, Inc.* 400 15,250
Global TeleSystems Group, Inc.* 125,662 8,309,400
Hyperion Telecommunications, Inc., "A"* 1,300 16,250
Intermedia Communications, Inc.## 12,000 386,250
International Business Communications Systems, Inc.*+ 40,300 0
ITC Deltacom, Inc.* 900 22,500
Level 3 Communications, Inc. 6,600 594,412
MCI WorldCom, Inc.* 223,417 18,362,085
Metromedia Fiber Network, Inc., "A"* 8,200 690,850
Net Perceptions, Inc.* 400 10,550
Novell, Inc.* 700 15,575
NTL, Inc.* 10,100 770,125
OneMain.com, Inc. 500 15,750
Powerwave Technologies, Inc. 600 18,225
Premiere Technologies, Inc.* 1,200 17,850
Qwest Communications International, Inc.* 76,100 6,501,794
RF Micro Devices, Inc. 300 16,763
Rhythms Netconnections, Inc. 7,400 610,500
Scientific-Atlanta, Inc. 500 15,875
Sprint Corp. 30,300 3,107,644
Sprint Corp. (PCS Group)* 49,500 2,097,562
TCA Cable TV, Inc. 500 24,906
Tel-Save.com, Inc.* 3,400 40,800
Tellabs, Inc.* 28,200 3,089,662
U.S. Satellite Broadcasting Co., Inc., "A"* 1,000 17,875
Uniphase Corp. 200 24,275
Viatel, Inc.* 400 18,400
Vignette Corp.* 2,800 266,000
Western Wireless Corp.* 500 20,531
QUALCOMM, Inc. 26,700 5,340,000
Tekelec Co.* 3,300 29,803
------------
$ 76,047,678
- ------------------------------------------------------------------------------------------------
Transportation - 0.1%
FDX Corp.* 6,300 $ 709,144
Navistar International Corp. 400 20,925
------------
$ 730,069
- ------------------------------------------------------------------------------------------------
Utilities - Gas - 0.4%
Williams Cos., Inc. 40,200 $ 1,899,450
- ------------------------------------------------------------------------------------------------
Utilities - Telephone - 0.5%
Frontier Corp. 48,600 $ 2,682,112
- ------------------------------------------------------------------------------------------------
Total U.S. Stocks $236,506,704
- ------------------------------------------------------------------------------------------------
Total Stocks (Identified Cost, $401,192,004) $509,497,236
- ------------------------------------------------------------------------------------------------
Rights
- ------------------------------------------------------------------------------------------------
Greece
National Bank of Greece (Banks and Credit Cos.)* 9,896 $ 30,535
Spain
Telefonica de Espana (Utilities - Telephone)* 64,526 60,638
- ------------------------------------------------------------------------------------------------
Total Rights (Identified Cost, $55,046) $ 91,173
- ------------------------------------------------------------------------------------------------
Short-Term Obligations - 1.8%
- ------------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT
ISSUER (000 OMITTED) VALUE
- ------------------------------------------------------------------------------------------------
Ford Motor Credit Corp., due 5/03/99, at Amortized Cost $ 9,565 $ 9,562,386
- ------------------------------------------------------------------------------------------------
Other Short-Term Obligations - 8.5%
- ------------------------------------------------------------------------------------------------
Shares
- ------------------------------------------------------------------------------------------------
Navigator Securities Lending Prime Portfolio,
(Identified Cost, $45,051,172) 45,051,172 $ 45,051,172
- ------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $455,860,608) $564,201,967
Other Assets, Less Liabilities - (6.7)% (35,519,975)
- ------------------------------------------------------------------------------------------------
Net Assets - 100.0% $528,681,992
- ------------------------------------------------------------------------------------------------
* Non-income producing security.
## SEC Rule 144A restriction.
+ Restricted security.
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS
Statement of Assets and Liabilities (Unaudited)
- ------------------------------------------------------------------------------
APRIL 30, 1999
- ------------------------------------------------------------------------------
Assets:
Investments, at value (identified cost, $455,860,608) $ 564,201,967
Foreign currency, at value (identified cost, $1,595,550) 1,589,855
Cash 30,617
Receivable for Fund shares sold 5,212,368
Receivable for investments sold 13,573,646
Dividends receivable 874,566
Other assets 5,456
-------------
Total assets $ 585,488,475
-------------
Liabilities:
Receivable for Fund shares reacquired $ 4,333,982
Payable for investments purchased 7,083,978
Collateral for securities loaned, at value 45,051,172
Payable to affiliates -
Management fee 13,037
Shareholder servicing agent fee 1,449
Distribution and service fee 132,899
Administrative fee 217
Accrued expenses and other liabilities 189,749
-------------
Total liabilities $ 56,806,483
-------------
Net assets $ 528,681,992
=============
Net assets consist of:
Paid-in capital $ 393,372,641
Unrealized appreciation on investments and translation of
assets
and liabilities in foreign currencies 108,295,152
Accumulated undistributed net realized gain on
investments
and foreign currency transactions 29,113,206
Accumulated net investment loss (2,099,007)
-------------
Total $ 528,681,992
=============
Shares of beneficial interest outstanding 25,721,115
==========
Class A shares:
Net asset value per share
(net assets of $214,716,631 / 10,346,035 shares of
beneficial interest outstanding) $20.75
======
Offering price per share (100 / 94.25 of net asset value
per share) $22.02
======
Class B shares:
Net asset value and offering price per share
(net assets of $286,355,589 / 14,024,674 shares of
beneficial interest outstanding) $20.42
======
Class C shares:
Net asset value and offering price per share
(net assets of $21,330,102 / 1,049,194 shares of
beneficial interest outstanding) $20.33
======
Class I shares:
Net asset value, offering price, and redemption price
per share (net assets of $6,279,670 / 301,212
shares of beneficial interest outstanding) $20.85
======
On sales of $50,000 or more, the offering price of Class A shares is reduced. A
contingent deferred sales charge may be imposed on redemptions of Class A, Class
B, and Class C shares.
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS -- continued
Statement of Operations (Unaudited)
- ------------------------------------------------------------------------------
SIX MONTHS ENDED APRIL 30, 1999
- ------------------------------------------------------------------------------
Net investment income (loss):
Income -
Dividends $ 2,337,684
Interest 750,119
Foreign taxes withheld (197,646)
------------
Total investment income $ 2,890,157
------------
Expenses -
Management fee $ 2,323,627
Trustees' compensation 19,892
Shareholder servicing agent fee 284,933
Distribution and service fee (Class A) 365,172
Distribution and service fee (Class B) 1,402,228
Distribution and service fee (Class C) 105,255
Administrative fee 26,353
Custodian fee 234,600
Printing 43,283
Postage 49,997
Auditing fees 23,557
Legal fees 818
Amortization of organization expenses 703
Miscellaneous 214,487
------------
Total expenses $ 5,094,905
Fees paid indirectly (35,315)
Reduction of expenses by distributor (104,045)
------------
Net expenses $ 4,955,545
------------
Net investment loss $ (2,065,388)
------------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $ 33,524,289
Foreign currency transactions (304,101)
------------
Net realized gain on investments and foreign
currency transactions $ 33,220,188
------------
Change in unrealized appreciation (depreciation) -
Investments $ 78,777,104
Translation of assets and liabilities in
foreign currencies (68,292)
------------
Net unrealized gain on investments and foreign
currency translation $ 78,708,812
------------
Net realized and unrealized gain on investments
and foreign currency $111,929,000
------------
Increase in net assets from operations $109,863,612
============
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS -- continued
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
- ----------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1999 OCTOBER 31, 1998
(UNAUDITED)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment loss $ (2,065,388) $ (2,765,182)
Net realized gain on investments and foreign currency
transactions 33,220,188 39,910,660
Net unrealized gain (loss) on investments and foreign
currency translation 78,708,812 (40,266,319)
------------- -------------
Increase (decrease) in net assets from operations $ 109,863,612 $ (3,120,841)
------------- -------------
Distributions declared to shareholders -
From net realized gain on investments and foreign
currency transactions (Class A) (16,259,953) $ (20,053,104)
From net realized gain on investments and foreign
currency transactions (Class B) (22,605,139) (28,720,424)
From net realized gain on investments and foreign
currency transactions (Class C) (1,663,777) (2,097,140)
From net realized gain on investments and foreign
currency transactions (Class I) (471,404) (638,217)
------------- -------------
Total distributions declared to shareholders $ (41,000,273) $ (51,508,885)
------------- -------------
Net decrease in net assets from Fund share transactions $ (19,314,287) $ (11,059,613)
------------- -------------
Total increase (decrease) in net assets $ 49,549,052 $ (65,689,339)
Net assets:
At beginning of period 479,132,940 544,822,279
------------- -------------
At end of period (including accumulated net investment
loss of $2,099,007 and $33,619, respectively) $ 528,681,992 $ 479,132,940
============= =============
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS -- continued
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
- ---------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
SIX MONTHS ENDED --------------------------------------------------------------------------
APRIL 30, 1999 1998 1997 1996 1995 1994*
(UNAUDITED)
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS A
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $ 18.27 $ 20.79 $ 19.09 $ 18.16 $ 17.45 $ 15.00
-------- -------- -------- -------- -------- --------
Income from investment operations# -
Net investment loss(S) $ (0.04) $ (0.01) $ (0.02) $ (0.07) $ -- $ (0.02)
Net realized and unrealized
gain (loss) on investments
and foreign currency 4.13 (0.41) 2.77 2.73 0.93 2.47
-------- -------- -------- -------- -------- --------
Total from investment operations $ 4.09 $ (0.42) $ 2.75 $ 2.66 $ 0.93 $ 2.45
-------- -------- -------- -------- -------- --------
Less distributions declared to
shareholders -
From net investment income $ -- $ -- $ -- $ (0.01) $ -- $ --
From net realized gain on
investments and foreign
currency transactions (1.61) (2.10) (1.05) (1.72) (0.22) --
-------- -------- -------- -------- -------- --------
Total distributions declared
to shareholders $ (1.61) $ (2.10) $ (1.05) $ (1.73) $ (0.22) $ --
-------- -------- -------- -------- -------- --------
Net asset value - end of period $ 20.75 $ 18.27 $ 20.79 $ 19.09 $ 18.16 $ 17.45
======== ======== ======== ======== ======== ========
Total return(+) 23.65%++ (1.99)% 15.17% 15.73% 5.47% 16.33%++
Ratios (to average net assets)/
Supplemental data(S):
Expenses## 1.50%+ 1.49% 1.52% 1.58% 1.63% 1.57%+
Net investment income (loss) (0.36)%+ (0.06)% (0.10)% (0.35)% 0.02% (0.14)%+
Portfolio turnover 62% 104% 133% 95% 149% 100%
Net assets at end of period
(000 omitted) $214,717 $195,194 $204,918 $172,106 $143,543 $131,503
* For the period from the commencement of the Fund's investment operations, November 18, 1993, through October 31, 1994.
+ Annualized.
++ Not annualized.
# Per share data are based on average shares outstanding.
## 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. For fiscal years ending after September 1, 1995, the Fund's
expenses are calculated without reduction for this expense offset arrangement.
(+) 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.
(S) The distributor voluntarily waived its fee for the periods indicated. If the fee had been incurred by the Fund, the net
investment loss per share and the ratios would have been:
Net investment loss $ (0.05) $ (0.03) $ (0.04) $ (0.09) $ -- $ (0.04)
Ratios (to average net assets):
Expenses## 1.60%+ 1.59% 1.62% 1.68% 1.73% 1.67%+
Net investment loss (0.46)%+ (0.16)% (0.20)% (0.45)% (0.08)% (0.24)%+
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS -- continued
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS - continued
- ---------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
SIX MONTHS ENDED --------------------------------------------------------------------------
APRIL 30, 1999 1998 1997 1996 1995 1994*
(UNAUDITED)
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS B
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $ 18.06 $ 20.56 $ 18.87 $ 17.97 $ 17.32 $ 15.00
-------- -------- -------- -------- -------- --------
Income from investment operations# -
Net investment loss $ (0.11) $ (0.16) $ (0.17) $ (0.21) $ (0.14) $ (0.15)
Net realized and unrealized
gain (loss) on investments
and foreign currency 4.08 (0.40) 2.76 2.70 0.92 2.47
-------- -------- -------- -------- -------- --------
Total from investment operations $ 3.97 $ (0.56) $ 2.59 $ 2.49 $ 0.78 $ 2.32
-------- -------- -------- -------- -------- --------
Less distributions declared to
shareholders from net realized
gain on investments and foreign
currency transactions $ (1.61) $ (1.94) $ (0.90) $ (1.59) $ (0.13) $ --
-------- -------- -------- -------- -------- --------
Net asset value - end of period $ 20.42 $ 18.06 $ 20.56 $ 18.87 $ 17.97 $ 17.32
======== ======== ======== ======== ======== ========
Total return 23.24%++ (2.70)% 14.30% 14.77% 4.61% 15.47%++
Ratios (to average net assets)/
Supplemental data:
Expenses## 2.25%+ 2.24% 2.28% 2.39% 2.45% 2.39%+
Net investment loss (1.12)%+ (0.81)% (0.87)% (1.16)% (0.80)% (0.95)%+
Portfolio turnover 62% 104% 133% 95% 149% 100%
Net assets at end of period
(000 omitted) $286,356 $259,345 $308,692 $282,668 $247,437 $236,971
* For the period from the commencement of the Fund's investment operations, November 18, 1993, through October 31, 1994.
+ Annualized.
++ Not annualized.
# Per share data are based on average shares outstanding.
## 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. For fiscal years ending after September 1, 1995, the Fund's
expenses are calculated without reduction for this expense offset arrangement.
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS -- continued
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS - continued
- ---------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
SIX MONTHS ENDED --------------------------------------------------------------------------
APRIL 30, 1999 1998 1997 1996 1995 1994*
(UNAUDITED)
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS C
- ---------------------------------------------------------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
<S> <C> <C> <C> <C> <C> <C>
Net asset value - beginning of period $ 17.99 $ 20.49 $ 18.85 $ 17.96 $ 17.34 $ 16.04
-------- -------- -------- -------- -------- --------
Income from investment operations# -
Net investment loss $ (0.11) $ (0.16) $ (0.17) $ (0.20) $ (0.13) $ (0.13)
Net realized and unrealized
gain (loss) on investments
and foreign currency 4.06 (0.40) 2.75 2.70 0.92 1.43
-------- -------- -------- -------- -------- --------
Total from investment operations $ 3.95 $ (0.56) $ 2.58 $ 2.50 $ 0.79 $ 1.30
-------- -------- -------- -------- -------- --------
Less distributions declared to
shareholders from net realized
gain on investments and foreign
currency transactions $ (1.61) $ (1.94) $ (0.94) $ (1.61) $ (0.17) $ --
-------- -------- -------- -------- -------- --------
Net asset value - end of period $ 20.33 $ 17.99 $ 20.49 $ 18.85 $ 17.96 $ 17.34
======== ======== ======== ======== ======== ========
Total return 23.21%++ (2.73)% 14.27% 14.88% 4.68% 8.10%++
Ratios (to average net assets)/
Supplemental data:
Expenses## 2.25%+ 2.24% 2.25% 2.32% 2.38% 2.31%+
Net investment loss (1.12)%+ (0.83)% (0.85)% (1.10)% (0.72)% (0.83)%+
Portfolio turnover 62% 104% 133% 95% 149% 100%
Net assets at end of period
(000 omitted) $ 21,330 $ 19,149 $ 24,662 $ 19,994 $ 13,349 $ 11,872
* For the period from the inception of Class C, January 3, 1994, through October 31, 1994.
+ Annualized.
++ Not annualized.
# Per share data are based on average shares outstanding.
## 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. For fiscal years ending after September 1, 1995, the Fund's
expenses are calculated without reduction for this expense offset arrangement.
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS -- continued
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS - continued
- ----------------------------------------------------------------------------------------------------------------------
YEAR ENDED PERIOD ENDED
SIX MONTHS ENDED OCTOBER 31, OCTOBER 31,
APRIL 30, 1999 1998 1997*
(UNAUDITED)
- ----------------------------------------------------------------------------------------------------------------------
CLASS I
- ----------------------------------------------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
<S> <C> <C> <C>
Net asset value - beginning of period $18.32 $20.84 $18.34
------ ------ ------
Income from investment operations# -
Net investment income (loss) $ (0.01) $ 0.04 $ 0.04
Net realized and unrealized gain (loss) on investments
and foreign currency 4.15 (0.40) 2.46
------ ------ ------
Total from investment operations $ 4.14 $ (0.36) $ 2.50
------ ------ ------
Less distributions declared to shareholders from net
realized gain on investments and foreign currency
transactions $(1.61) $(2.16) $ --
------ ------ ------
Net asset value - end of period $20.85 $18.32 $20.84
====== ====== ======
Total return 23.87%++ (1.64)% 13.58%++
Ratios (to average net assets)/Supplemental data:
Expenses## 1.25%+ 1.24% 1.21%+
Net investment income (loss) (0.12%)+ 0.19% 0.20%+
Portfolio turnover 62% 104% 133%
Net assets at end of period (000 omitted) $6,280 $5,445 $6,550
* For the period from the inception of Class I, January 2, 1997, through October 31, 1997.
+ Annualized.
++ Not annualized.
# Per share data are based on average shares outstanding.
## 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. The Fund's expenses are calculated without reduction for this
expense offset arrangement.
</TABLE>
See notes to financial statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
(1) Business and Organization
MFS Global 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
General - The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. Investments
in foreign securities are vulnerable to the effects of changes in the relative
values of the local currency and the U.S. dollar and to the effects of changes
in each country's legal, political, and economic environment.
Investment Valuations - Equity securities listed on securities exchanges or
reported through the NASDAQ system are reported at market value using last sale
prices. Unlisted equity securities or listed equity securities for which last
sale prices are not available are reported at market value using last quoted bid
prices. Short-term obligations, which mature in 60 days or less, are valued at
amortized cost, which approximates market value. Securities for which there are
no such quotations or valuations are valued at fair value as determined in good
faith by or at the direction of the Trustees.
Foreign Currency Translation - Investment valuations, other assets, and
liabilities initially expressed in foreign currencies are converted each
business day into U.S. dollars based upon current exchange rates. Purchases and
sales of foreign investments, income, and expenses are converted into U.S.
dollars based upon currency exchange rates prevailing on the respective dates of
such transactions. Gains and losses attributable to foreign currency exchange
rates on sales of securities are recorded for financial statement purposes as
net realized gains and losses on investments. Gains and losses attributable to
foreign exchange rate movements on income and expenses are recorded for
financial statement purposes as foreign currency transaction gains and losses.
That portion of both realized and unrealized gains and losses on investments
that results from fluctuations in foreign currency exchange rates is not
separately disclosed.
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 Fund
operations.
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. State Street Bank and Trust Company ("State Street"), as
agent, loans the securities to certain brokers (the "Borrowers") approved by the
Fund. The loans are collateralized at all times by cash and U.S. Treasury
securities in an amount at least equal to the market value of the securities
loaned. State Street provides the Fund with indemnification against Borrower
default. The Fund bears the risk of loss with respect to the investment of cash
collateral.
At April 30, 1999, the value of securities loaned was $43,467,801. These loans
were collateralized by cash of $45,051,172. Cash collateral is invested in
short-term securities, which are included in the Portfolio of Investments. A
portion of the income generated upon investment of the collateral is remitted to
the Borrowers, and the remainder is allocated between the Fund and State Street
in its capacity as lending agent. Income from securities lending is included in
interest income on the Statement of Operations. The dividend and interest income
earned on the securities loaned is accounted for in the same manner as other
dividend and interest income.
Investment Transactions and Income - Investment transactions are recorded on the
trade date. Interest income is recorded on the accrual basis. All discount is
accreted for financial statement and tax reporting purposes as required by
federal income tax regulations. Dividends received in cash are recorded on the
ex-dividend date. Dividend and interest payments received in additional
securities are recorded on the ex-dividend or ex-interest date in an amount
equal to the value of the security on such date.
Fees Paid Indirectly - The Fund's custody fee is calculated as a percentage of
the Fund's month end net assets. The fee is reduced according to an arrangement
that measures the value of cash deposited with the custodian by the Fund. This
amount is shown as a reduction of expenses on the Statement of Operations.
Tax Matters and Distributions - The Fund's policy is to comply with the
provisions of the Internal Revenue Code (the Code) applicable to regulated
investment companies and to distribute to shareholders all of its 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.
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 distributions from paid-in
capital. Differences in the recognition or classification of income between the
financial statements and tax earnings and profits, which result in temporary
over-distributions for financial statement purposes, are classified as
distributions in excess of net investment income or net realized gains.
Multiple Classes of Shares of Beneficial Interest - The Fund offers multiple
classes of shares, which differ in their respective distribution and service
fees. All shareholders bear the common expenses of the Fund based on 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. Class B shares will convert to Class A
shares approximately eight years after purchase.
(3) Transactions with Affiliates
Investment Adviser - The Fund has an investment advisory agreement with
Massachusetts Financial Services Company (MFS) to provide overall investment
advisory and administrative services, and general office facilities. The
management fee is computed daily and paid monthly at the following annual rates:
First $1 billion of average net assets 0.90%
Average net assets in excess of $1 billion 0.75%
The advisory agreement permits the adviser to engage one or more sub-advisers
and the adviser has engaged Foreign & Colonial Management Ltd. and Foreign &
Colonial Emerging Markets Ltd., each an England and Wales Company, 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 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 of its independent Trustees and Mr. Bailey. Included in Trustees'
compensation is a net periodic pension expense of $5,714 for the six months
ended April 30, 1999.
Administrator - The Fund has an administrative services agreement with MFS to
provide the Fund with certain financial, legal, shareholder servicing,
compliance, and other administrative services. As a partial reimbursement for
the cost of providing these services, the Fund pays MFS an administrative fee at
the following annual percentages of the Fund's average daily net assets:
First $1 billion 0.0150%
Next $1 billion 0.0125%
Next $1 billion 0.0100%
In excess of $3 billion 0.0000%
Distributor - MFD, a wholly owned subsidiary of MFS, as distributor, received
$34,472 for the six months ended April 30, 1999, as its portion of the sales
charge on sales of Class A shares of the Fund.
The Trustees have adopted a distribution plan for Class A, Class B, and Class C
shares pursuant to Rule 12b-1 of the Investment Company Act of 1940 as follows:
The Fund's distribution plan provides that the Fund will pay MFD up to 0.35% per
annum of its average daily net assets attributable to Class A shares in order
that MFD may pay expenses on behalf of the Fund related to the distribution and
servicing of its shares. These expenses include a service fee paid to each
securities dealer that enters into a sales agreement with MFD of up to 0.25% per
annum of the Fund's average daily net assets attributable to Class A shares
which are attributable to that securities dealer and a distribution fee to MFD
of up to 0.10% per annum of the Fund's average daily net assets attributable to
Class A shares. MFD retains the service fee for accounts not attributable to a
securities dealer, which amounted to $21,476 for the six months ended April 30,
1999. The Class A distribution fee is currently being waived on a voluntary
basis and may be imposed at the discretion of MFD. Fees incurred under the
distribution plan during the six months ended April 30, 1999, were 0.25% of
average daily net assets attributable to Class A shares on an annualized basis.
The Fund's distribution plan provides that the Fund will pay MFD a distribution
fee of 0.75% per annum, and a service fee of up to 0.25% per annum, of the
Fund's average daily net assets attributable to Class B and Class C shares. MFD
will pay to securities dealers that enter into a sales agreement with MFD all or
a portion of the service fee attributable to Class B and Class C shares, and
will pay to such securities dealers all of the distribution fee attributable to
Class C shares. The service fee is intended to be consideration for services
rendered by the dealer with respect to Class B and Class C shares. MFD retains
the service fee for accounts not attributable to a securities dealer, which
amounted to $9,541 and $109 for Class B and Class C shares, respectively, for
the six months ended April 30, 1999. Fees incurred under the distribution plan
during the six months ended April 30, 1999, were 1.00% of each class' average
daily net assets attributable to Class B and Class C shares on an annualized
basis.
Certain Class A and Class C shares are subject to a contingent deferred sales
charge in the event of a shareholder redemption within 12 months following
purchase. A contingent deferred sales charge is imposed on shareholder
redemptions of Class B shares in the event of a shareholder redemption within
six years of purchase. MFD receives all contingent deferred sales charges.
Contingent deferred sales charges imposed during the six months ended April 30,
1999, were $2,452, $224,260, and $2,500 for Class A, Class B, and Class C
shares, respectively.
Shareholder Servicing Agent - MFSC, a wholly owned subsidiary of MFS, earns a
fee for its services as shareholder servicing agent. The fee is calculated as a
percentage of the Fund's average daily net assets at an effective annual rate of
0.10%. Prior to April 1, 1999, the fee was calculated as a percentage of the
Fund's average daily net assets at an effective annual rate of 0.1125%.
(4) Portfolio Securities
Purchases and sales of investments, other than U.S. government securities,
purchased option transactions, and short-term obligations, aggregated
$304,074,973 and $361,753,175, respectively.
The cost and unrealized appreciation and depreciation in the value of the
investments owned by the Fund, as computed on a federal income tax basis, are as
follows:
Aggregate cost $455,860,608
------------
Gross unrealized appreciation $123,228,727
Gross unrealized depreciation (14,887,368)
------------
Net unrealized appreciation $108,341,359
============
(5) Shares of Beneficial Interest
The Fund's Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest. Transactions in
Fund shares were as follows:
<TABLE>
<CAPTION>
Class A Shares
SIX MONTHS ENDED APRIL 30, 1999 YEAR ENDED OCTOBER 31, 1998
----------------------------------- -------------------------------------
SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 31,052,840 $ 613,272,668 59,000,914 $ 1,171,149,285
Shares issued to
shareholders in
reinvestment of
distributions 836,266 15,401,734 967,119 17,570,051
Shares reacquired (32,228,412) (639,148,001) (59,138,361) (1,181,723,918)
----------- -------------- ----------- ---------------
Net increase (decrease) (339,306) $ (10,473,599) 829,672 $ 6,995,418
=========== ============== =========== ===============
<CAPTION>
Class B Shares
SIX MONTHS ENDED APRIL 30, 1999 YEAR ENDED OCTOBER 31, 1999
----------------------------------- -------------------------------------
SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 949,386 $ 18,326,547 2,457,348 $ 47,943,310
Shares issued to
shareholders in
reinvestment of
distributions 986,963 17,834,653 1,230,304 22,182,930
Shares reacquired (2,273,177) (44,431,070) (4,343,624) (84,629,146)
----------- -------------- ----------- ---------------
Net decrease (336,828) $ (8,269,870) (655,972) $ (14,502,906)
=========== ============== =========== ===============
<CAPTION>
Class C Shares
SIX MONTHS ENDED APRIL 30, 1999 YEAR ENDED OCTOBER 31, 1998
----------------------------------- -------------------------------------
SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 1,905,868 $ 37,198,600 2,032,301 $ 39,976,080
Shares issued to
shareholders in
reinvestment of
distributions 65,362 1,176,518 78,016 1,401,164
Shares reacquired (1,986,420) (38,984,611) (2,249,822) (44,495,696)
----------- -------------- ----------- ---------------
Net decrease (15,190) $ (609,493) (139,505) $ (3,118,452)
=========== ============== =========== ===============
<CAPTION>
Class I Shares
SIX MONTHS ENDED APRIL 30, 1999 YEAR ENDED OCTOBER 31, 1998
----------------------------------- -------------------------------------
SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 22,376 $ 443,661 54,528 $ 1,091,358
Shares issued to
shareholders in
reinvestment of
distributions 25,647 471,399 35,224 638,251
Shares reacquired (44,016) (876,385) (106,903) (2,163,282)
----------- -------------- ----------- ---------------
Net increase (decrease) 4,007 $ 38,675 (17,151) $ (433,673)
=========== ============== =========== ===============
</TABLE>
(6) Line of Credit
The Fund and other affiliated funds participate in a $720 million unsecured line
of credit provided by a syndication of banks under a line of credit agreement.
Borrowings may be made to temporarily finance the repurchase of Fund shares.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the bank's base rate. In addition, a commitment fee, based on the average daily
unused portion of the line of credit, is allocated among the participating funds
at the end of each quarter. The commitment fee allocated to the Fund for the six
months ended April 30, 1999, was $1,807.
(7) Restricted Securities
The Fund may invest not more than 15% of its net assets in securities which are
subject to legal or contractual restrictions on resale. At April 30, 1999, the
Fund owned the following restricted securities (constituting 0.04% of net
assets) which may not be publicly sold without registration under the Securities
Act of 1933. The Fund does not have the right to demand that such securities be
registered. The value of these securities is determined by valuations furnished
by dealers or by a pricing service, or if not available, are valued at fair
value as determined in good faith by or at the direction of the Trustees.
<TABLE>
<CAPTION>
DESCRIPTION DATE OF ACQUISITION SHARE AMOUNT COST VALUE
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Bank Handlowy w Warszawie 7/03/1997 12,079 $150,230 $146,839
Hong Leong Finance Ltd. 11/01/1996 17,000 29,200 41,904
International Business Communications
Systems, Inc. 8/29/1995 40,300 399,776 --
--------
$188,743
========
</TABLE>
<PAGE>
<TABLE>
MFS(R) GLOBAL GROWTH FUND
<S> <C>
TRUSTEES ASSISTANT TREASURERS
Richard B. Bailey* - Private Investor; Former Mark E. Bradley*
Chairman and Director (until 1991), MFS Investment Ellen Moynihan*
Management James O. Yost*
Peter G. Harwood - Private Investor SECRETARY
Stephen E. Cavan*
J. Atwood Ives - Chairman and Chief Executive
Officer, Eastern Enterprises (diversified services ASSISTANT SECRETARY
company) James R. Bordewick, Jr.*
Lawrence T. Perera - Partner, Hemenway & Barnes CUSTODIAN
(attorneys) State Street Bank and Trust Company
William J. Poorvu - Adjunct Professor, Harvard INVESTOR INFORMATION
University Graduate School of Business For MFS stock and bond market outlooks, call toll
Administration free: 1-800-637-4458 anytime from a touch-tone
telephone.
Charles W. Schmidt - Private Investor
For information on MFS mutual funds, call your
Arnold D. Scott* - Senior Executive Vice financial adviser or, for an information kit, call
President, Director, and Secretary, MFS Investment toll free: 1-800-637-2929 any business day from 9
Management a.m. to 5 p.m. Eastern time (or leave a message
anytime).
Jeffrey L. Shames* - Chairman, Chief Executive
Officer, and Director, MFS Investment Management INVESTOR SERVICE
MFS Service Center, Inc.
Elaine R. Smith - Independent Consultant P.O. Box 2281
Boston, MA 02107-9906
David B. Stone - Chairman and Director, North
American Management Corp. (investment advisers) For general information, call toll
free: 1-800-225-2606 any business day
INVESTMENT ADVISER from 8 a.m. to 8 p.m. Eastern time.
Massachusetts Financial Services Company
500 Boylston Street For service to speech- or hearing-impaired, call
Boston, MA 02116-3741 toll free: 1-800-637-6576 any business day from 9
a.m. to 5 p.m. Eastern time. (To use this service,
DISTRIBUTOR your phone must be equipped with a
MFS Fund Distributors, Inc. Telecommunications Device for the Deaf.)
500 Boylston Street
Boston, MA 02116-3741 For share prices, account balances, and exchanges,
call toll free: 1-800-MFS-TALK (1-800-637-8255)
DIRECTOR OF INTERNATIONAL EQUITY anytime from a touch-tone telephone.
RESEARCH
David A. Antonelli* WORLD WIDE WEB
www.mfs.com
PORTFOLIO MANAGERS
John W. Ballen*
Toni Y. Shimura*
TREASURER
W. Thomas London*
</TABLE>
*Affiliated with the Investment Adviser
<PAGE>
----------------
MFS(R) GLOBAL GROWTH FUND Bulk Rate
U.S. Postage
Paid
MFS
----------------
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INVESTMENT MANAGEMENT
We invented the mutual fund(R)
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Boston, MA 02116-3741
(c)1999 MFS Fund Distributors, Inc., 500 Boylston Street, Boston, MA 02116-3741
MWF-3 6/99 62M 09/209/309/809
