<PAGE>
[Logo] M F S(R)
INVESTMENT MANAGEMENT
75 YEARS
WE INVENTED THE MUTUAL FUND(R)
[Graphic Omitted]
MFS(R) GLOBAL
GROWTH FUND
SEMIANNUAL REPORT o APRIL 30, 2000
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MUTUAL FUND GIFT KITS (see page 39)
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<PAGE>
TABLE OF CONTENTS
Letter from the Chairman .................................................. 1
Management Review and Outlook ............................................. 5
Performance Summary ....................................................... 10
Portfolio of Investments .................................................. 13
Financial Statements ...................................................... 27
Notes to Financial Statements ............................................. 34
Trustees and Officers ..................................................... 41
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,
Historically, there have been two ways that shareholders in stocks and stock
mutual funds could potentially make money: capital gains from share price
appreciation and dividend payments. Over the past decade, however, it appears to
us that dividends have become less and less relevant as a means of profiting
from stock investments. Investors who in the past may have counted on dividend
payments from stocks or stock funds as a source of income are sometimes finding
their payments are no longer meeting their needs. In the balance of this letter,
we'd like to address why that has happened, why this may in some ways be good
for investors, and what investors may want to do to adjust to the new reality of
shrinking dividends.
A FUNDAMENTAL CHANGE
When a company pays a dividend, it is essentially sharing its profits with
stockholders. Until the 1950s, paying a dividend was standard practice for a
majority of American companies; dividend payments were virtually required to
compensate investors for taking on the risks associated with investing in
stocks.
What has happened in the ensuing decades, however, is a fundamental change in
the way investors view the stock market. The tremendous popularity of Individual
Retirement Accounts and 401(k) retirement plans has introduced a flood of new
investors to stocks and stock mutual funds, and a generally rising market
through most of the past decade has made the experience a very positive one for
many of those shareholders.
As a result, investors appear to be focusing much more on share price and on
company earnings -- which we believe are the strongest long-term driver of share
prices -- than on dividend payments. Summing up the trend, The New York Times
commented on January 4, 2000, that "a growing portion of corporate America
appears to be concluding that dividends are no longer needed to attract
investors and are therefore an unnecessary cost of doing business. Fewer
companies are raising dividends, and more and more major companies do not bother
to pay them at all."
BENEFITS FOR INVESTORS
In assessing whether this trend is good for investors, it may help to look at
what shareholders have traditionally regarded as the benefits of dividends. One
benefit was that a dividend payment served as an indication that a company was
in good health, because it was generating profits that it could share with its
investors. However, there are other ways for a corporation to use its profits
that over the long term may benefit shareholders more than a dividend.
As part of the MFS Original Research(R) process that we use in evaluating
potential investments, one thing we look for is companies that are investing
their profits back in their businesses. Profits can be used to fund additional
research, product development, marketing, and other areas that may improve the
earnings of a company and potentially result in higher stock prices. Share
buybacks are another way we like to see a company reinvest its profits. By
buying back its own shares and thus reducing the number of shares outstanding, a
company may increase the value of existing shares. Over the long term, we
believe such actions may benefit shareholders more than a dividend payment. An
additional reason we feel dividends are an inefficient way for a company to use
its profits is that dividend payouts are subject to double taxation: once as
corporate profits and a second time as ordinary income to shareholders.
POTENTIAL DOWNSIDE PROTECTION
"Downside protection" is a second potential benefit that investors have
historically attributed to dividends. The reasoning went that, during a bad
market period, a stockholder could at least count on dividend payments to
somewhat counteract the effect of declining share prices. We believe, however,
that the best long-term protection against market volatility is simply investing
in good businesses -- which is why our research is focused on identifying
companies with the potential to grow earnings over the long haul, taking down
markets in their stride.
And although dividend payments may appear to provide some short-term protection
against volatility, over the past decade stock prices in general have risen much
faster than dividends, making most dividend payments too small to provide
significant protection. In 1999, for example, the average dividend yield of
stocks in the Standard & Poor's 500 Composite Index was only 1.21%(1) -- whereas
yields had averaged in the 3% - 4% range or greater during the decades of the
1960s, '70s, and '80s.(2)
ALTERNATE INCOME STREAMS
A third benefit of stock dividend payments has traditionally been that they may
provide a steady stream of income, allowing an investor to receive money from
stock or stock mutual fund investments without selling shares. This benefit has
often been used to provide retirement income. Over the past decade, however,
many investors have found their dividend checks shrinking while the value of
their holdings may have appreciated considerably.
Intuitively, receiving a stream of dividend income without reducing the
principal in one's account may seem preferable to selling shares to generate
income. But investors should also bear in mind the tax consequences of dividend
income. Dividends are federally taxed as ordinary income, whereas profits from
selling stock or mutual fund shares held more than one year are taxed at the
capital gains rate of 20% -- which for many investors is lower than their
ordinary income tax bracket. Many shareholders may find themselves paying lower
taxes on profits from share appreciation than on dividend income. Given the
current reality of low and declining stock dividends, we would suggest that
investors seeking an income stream from their equity portfolio talk with their
investment professionals about alternate payout methods. Two possible strategies
are systematic withdrawals and bond investing.
With a systematic withdrawal, an investor's account is set up to sell shares in
order to pay out a fixed amount on a regular schedule. The advantage of this
approach is that the payout amount is always the same, regardless of market
fluctuations or variations in dividends paid by the holdings in the account. In
a period when the market is rising, share price appreciation may in fact
compensate for some selling of holdings. Of course, the disadvantage of a
systematic withdrawal is that, depending on the payout amount, the principal
balance in the account will most likely shrink as shares are sold. At some point
an investor can potentially run out of money.
For investors who feel more comfortable not drawing down their account
principal, bond funds may present an attractive alternative for providing an
income stream. High-yield bond funds, in particular, may offer the potential for
higher dividend yields than many stock funds are offering today. A disadvantage
is that, historically, bond funds have not tended to offer as much potential for
long-term share price appreciation as have stock funds. Investors should also
understand that, although investments in lower-rated securities such as
high-yield bonds may provide greater returns, they are also associated with
greater-than-average risk.(3) We suggest that investors work with their
investment professionals to determine whether a bond fund or systematic
withdrawal plan may meet their needs within their expected time frames.
As with most major changes in the financial markets, the overall decline in
stock dividend payments presents a combination of challenges and potential
benefits for investors. We feel that most investors will be best served by
working with their investment professionals to continually monitor such changes
in the financial markets, as well as changes in their own situations, and
adjusting their portfolios accordingly. As always, we appreciate your confidence
in MFS and welcome any questions or comments you may have.
Respectfully,
/s/ Jeffrey L. Shames
Jeffrey L. Shames
Chairman and Chief Executive Officer
MFS Investment Management(R)
May 18, 2000
------------
(1)Source: Standard & Poor's. The Standard & Poor's 500 Composite Index (the
S&P 500) is a popular, unmanaged index of common stock total return
performance. It is not possible to invest directly in an index.
(2)Source: FactSet Research. The dividend yield of a stock is calculated by
dividing the dividend per share by the current market price per share.
(3)These risks may increase share price volatility. Please see a prospectus
for details.
A prospectus containing more complete information on any MFS product, including
charges and expenses, can be obtained from your investment professional. Please
read it carefully before you invest or send money. Investments in mutual funds
will fluctuate and may be worth more or less upon redemption.
The opinions expressed in this letter are those of Jeffrey L. Shames, and no
forecasts can be guaranteed.
<PAGE>
MANAGEMENT REVIEW AND OUTLOOK
For the six months ended April 30, 2000, Class A shares of the Fund provided a
total return of 35.49%, Class B shares 35.00%, Class C shares 34.97%, and Class
I shares 35.66%. These returns, which include the reinvestment of any
distributions but exclude the effects of any sales charges, compare to an 8.07%
return over the same period for the Fund's benchmark, the Morgan Stanley Capital
International All Country World Index (the MSCI Index). The MSCI Index is an
unmanaged index of developed country and emerging market equities. During the
same period, the average global fund tracked by Lipper Inc., an independent firm
that reports mutual fund performance, returned 16.44%.
Q. WHAT HELPED THE FUND OUTPERFORM ITS PEERS?
A. Most of the Fund's outperformance stemmed from its relatively large stake in
the three industry groups that dominated the global markets during the
period -- technology, telecommunications, and media companies -- and our
favorable stock selections within those sectors. All three sectors defied
expectations by shrugging off interest-rate worries and climbing into
uncharted territory, although a mid-April sell off took away some of their
steam.
Two of the Fund's largest technology holdings were among its best
performers. The share price of Oracle, which makes the software that has
become the foundation for many Web sites, e-commerce, and corporate
networks, nearly quadrupled. Cisco, the leading maker of the network devices
that have become the backbone of the Internet, also posted large gains.
Semiconductor manufacturers and equipment companies, including Altera,
Applied Materials, Micron Technology, and Analog Devices, performed
exceptionally well. Fueled by the growing demand for all types of chips,
pricing turned more favorable and earnings expanded rapidly in response.
Many of the same trends that benefited U.S. technology stocks also helped
boost our holdings in foreign companies such as Canon and Ericsson.
Q. WERE THERE ANY TECHNOLOGY STOCKS THAT DIDN'T KEEP PACE?
A. Probably the biggest disappointment within the technology sector was
Microsoft. The double whammy of a disappointing third-quarter earnings
report and the Justice Department's call for a breakup of the company led to
a lower share price. BMC Software also performed poorly after reporting
disappointing earnings results. Finally, the Japanese "incubator" Softbank
suffered sizable losses. Softbank is known as an incubator because it
invests in or acquires growing Internet companies and then helps nurse them
along. The company's stock price buckled when investors grew skittish about
the valuations of dot.com-related stocks.
Q. WHICH OF THE FUND'S TELECOMMUNICATIONS HOLDINGS CONTRIBUTED TO PERFORMANCE?
A. To a much larger extent than their U.S. counterparts, foreign
telecommunications companies -- through their wireless, Internet service,
and data transmission business -- we feel have transformed themselves from
old-line, slow-growth utilities into fast-growing, dynamic companies.
Canadian telecommunications equipment company Nortel posted strong gains
thanks to good growth in its fiber-optic business. In the Netherlands, KPN
benefited from its big push into wireless communications with the
acquisition of a German wireless operator, which transformed them into a
pan-European provider in the process. Finland's Nokia benefited from the
explosion in cellular and mobile telecommunications. Most of our emerging
market telecommunications companies also did well. China Telecom, for
example, rose substantially in response to rapid subscriber growth. Some
Brazilian companies -- particularly Telesp -- were winners as that country's
economy rebounded and investors sought out emerging market
telecommunications companies that were cheaper alternatives to developed
market investments.
Q. WHICH MEDIA COMPANIES WERE TOP PERFORMERS?
A. Capital Radio in the United Kingdom and Television Francaise in France were
prime beneficiaries of an increase in dot.com advertising in Europe. Late
last year, our analysts forecasted that European media companies would
experience an explosion of dot.com advertising, just as the United States
had during 1999. To date, that forecast has been on target, with dot.com
companies accounting for 10% to 20% of European TV stations' ad revenue at
the end of April, up from virtually nothing a year earlier.
Q. TOWARD THE END OF THE PERIOD, YOU CUT BACK THE FUND'S STAKE IN TECHNOLOGY
COMPANIES A BIT, LOCKING IN GAINS TO SEARCH FOR MORE ATTRACTIVE VALUES
ELSEWHERE. WHERE DID YOU FIND THOSE STOCKS?
A. The holdings we added toward the end of the period were a pretty eclectic
group. We added U.S. retailers such as grocery store chain Safeway and drug
store chain CVS, both of which enjoyed steady earnings growth. A few
Japanese pharmaceutical companies, such as Chugai Pharmaceuticals, also
caught our attention because we feel they were trading at attractive levels
compared to their U.S. counterparts.
Q. WHAT OTHER CHANGES DID YOU MAKE DURING THE PAST SIX MONTHS?
A. In Asia, we increasingly turned our focus away from banks toward nonbank
financial services stocks. We believe the economic rebound in many Asian
economies and the surge in equity trading volume have made securities firms
such as Japan's Daiwa Securities particularly attractive. We've taken a
similar approach in the United States, where we believe banks are beginning
to feel the pressure of lower-cost Internet competitors. That helps to
explain why we kept most of our financial services holdings in nonbanks such
as Merrill Lynch and Morgan Stanley Dean Witter, whose asset management and
capital markets businesses continued to do well.
Q. WHAT'S YOUR OUTLOOK FOR GLOBAL MARKETS?
A. In the United States, we're encouraged by the fact that corporate earnings
were quite strong during the first quarter of 2000 because we believe stock
prices tend to follow earnings. That said, we wouldn't be surprised if the
U.S. market remained volatile as investors try to decipher potentially
contradictory evidence about the direction of the economy and interest
rates.
We're also expecting earnings gains in Europe, where we believe a number of
trends seem to be setting up a favorable backdrop. Corporations just
recently have begun to enjoy the benefits of restructuring and
consolidation. Furthermore, we feel Europe appears to be on the verge of a
meaningful and sustainable rebound. In some ways, the present situation in
Europe reminds us of the situation in the United States in the early 1990s.
Then, we believe that cost cutting combined with an improving economy to set
the stage for better earnings growth. We believe that a similar set of
circumstances could take hold in Europe and buoy stocks there over the next
several years.
We're not as confident about the Japanese economy, which continues to teeter
on the verge of a recession. So we plan to be very selective in Japan, using
our MFS Original Research(R) to seek companies that we feel can grow
earnings by differentiating themselves from their competitors.
Recovering emerging market economies we believe may also yield some
attractive opportunities. But, as always, emerging markets carry unique
risks, so we're likely to limit our holdings in them.
We're likely to continue our emphasis on technology, telecommunications, and
media stocks as long as their fundamental growth rates remain strong and
demand for the companies' goods and services stays firm. Many companies in
those sectors continue to surprise on the upside, growing at much
faster-than- expected rates. Wireless subscription growth rates across the
globe have accelerated much more quickly than originally forecast, while the
growth in data transmission is expanding far faster and to a much greater
magnitude than originally thought. Admittedly, the high valuations for some
of these stocks are unprecedented. Our approach is to be very selective,
choosing companies that we believe have meaningful franchises and legitimate
business models that can be sustained over the long term.
/s/ David A. Antonelli /s/ John W. Ballen
David A. Antonelli John W. Ballen
Director of International Equity Portfolio Manager
Research*
/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
the Director of International Equity Research and are current only through the
end of the period of the report as stated on the cover. Their 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
MANAGEMENT COMMITTEE AND BOARD OF DIRECTORS OF MFS INVESTMENT MANAGEMENT(R). HE
IS A PORTFOLIO MANAGER OF MFS(R) EMERGING GROWTH 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) GLOBAL GROWTH
FUND, AND THE GLOBAL GROWTH SERIES OFFERED THROUGH MFS(R)/SUN LIFE ANNUITY
PRODUCTS. IN ADDITION, MR. BALLEN OVERSEES THE PORTFOLIO MANAGEMENT OF MFS(R)
INSTITUTIONAL MID CAP GROWTH FUND AND MFS(R) INSTITUTIONAL EMERGING EQUITIES
FUND. HE 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 SENIOR 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,
PORTFOLIO MANAGER IN 1993, AND SENIOR VICE PRESIDENT IN 1999. 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 ORIGINAL RESEARCH(R), A
GLOBAL, 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 investment professional, 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: $916.2 MILLION NET ASSETS AS OF APRIL 30, 2000
PERFOMANCE 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.)
AVERAGE ANNUAL AND CUMULATIVE TOTAL RATES OF RETURN
THROUGH APRIL 30, 2000
<TABLE>
<CAPTION>
CLASS A
6 Months 1 Year 3 Years 5 Years Life*
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge +35.49% +51.36% +105.48% +168.30% +200.00%
--------------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +51.36% + 27.13% + 21.82% + 18.58%
--------------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- +42.66% + 24.65% + 20.39% + 17.50%
--------------------------------------------------------------------------------------------------------------------
<CAPTION>
CLASS B
6 Months 1 Year 3 Years 5 Years Life*
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge +35.00% +50.20% +101.04% +158.24% +185.38%
--------------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +50.20% + 26.21% + 20.89% + 17.66%
--------------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- +46.20% + 25.58% + 20.71% + 17.66%
--------------------------------------------------------------------------------------------------------------------
<CAPTION>
CLASS C
6 Months 1 Year 3 Years 5 Years Life*
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge +34.97% +50.24% +100.96% +158.38% +186.04%
--------------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +50.24% + 26.19% + 20.91% + 17.71%
--------------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Including Sales Charge -- +49.24% + 26.19% + 20.91% + 17.71%
--------------------------------------------------------------------------------------------------------------------
<CAPTION>
CLASS I
6 Months 1 Year 3 Years 5 Years Life*
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cumulative Total Return
Excluding Sales Charge +35.66% +51.73% +107.37% +170.91% +202.92%
--------------------------------------------------------------------------------------------------------------------
Average Annual Total Return
Excluding Sales Charge -- +51.73% + 27.52% + 22.06% + 18.76%
--------------------------------------------------------------------------------------------------------------------
* For the period from the commencement of the Fund's investment operations, November 18, 1993, through April 30, 2000.
</TABLE>
NOTES TO PERFORMANCE SUMMARY
Class A Share Performance Including Sales Charge takes into account the
deduction of the maximum 5.75% sales charge. Class B Share Performance Including
Sales Charge takes into account the deduction of the applicable contingent
deferred sales charge (CDSC), which declines over six years from 4% to 0%. Class
C Share Performance Including Sales Charge takes into account the deduction of
the 1% CDSC applicable to Class C shares redeemed within 12 months. Class I
shares have no sales charge and are only available to certain institutional
investors.
Class C share performance includes the performance of the Fund's Class B shares
for periods prior to its inception (blended performance). Class I share
performance includes the performance of the Fund's Class A shares for periods
prior to its inception. Class C blended performance has been adjusted to take
into account the lower CDSC applicable to Class C shares. Class I share blended
performance has been adjusted to account for the fact that Class I shares have
no sales charge. These blended performance returns have not been adjusted to
take into account differences in class-specific operating expenses. Because
operating expenses of Class B and C shares are approximately the same, the
blended Class C performance is approximately the same as it would have been had
Class C shares been offered for the entire period. Because operating expenses of
Class I shares are lower than those of Class A, the blended Class I share
performance is lower than it would have been had Class I shares been offered for
the entire period.
All 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 capital gains.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND SHARES, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. MORE RECENT RETURNS MAY BE
MORE OR LESS THAN THOSE SHOWN. 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.
PORTFOLIO CONCENTRATION AS OF APRIL 30, 2000
FIVE LARGEST STOCK SECTORS
TECHNOLOGY 39.3%
UTILITIES & COMMUNICATIONS 19.3%
FINANCIAL SERVICES 8.3%
RETAILING 7.2%
HEALTH CARE 6.7%
TOP 10 STOCK HOLDINGS
ORACLE CORP. 6.3% INTEL CORP. 1.4%
U.S. database software developer and U.S. semiconductor manufacturer
manufacturer
FAST RETAILING CO. 1.4%
CISCO SYSTEMS, INC. 3.6% Japanese retail chain
U.S. computer network developer
KPN N.V. 1.3%
VODAFONE AIRTOUCH PLC 2.1% Dutch telecommunications company
British wireless communications services
provider NOKIA CORP. 1.3%
Finnish wireless communications
NORTEL NETWORKS CORP. 1.9% equipment manufacturer
Canadian designer and developer of data and
telephony networks APPLIED MATERIALS, INC. 1.3%
U.S. semiconductor equipment
ALTERA CORP. 1.4% and materials manufacturer
U.S. semiconductor manufacturer
The portfolio is actively managed, and current holdings may be different.
<PAGE>
PORTFOLIO OF INVESTMENTS (Unaudited) -- April 30, 2000
<TABLE>
<CAPTION>
Stocks - 94.3%
--------------------------------------------------------------------------------------------------
ISSUER SHARES VALUE
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Foreign Stocks - 52.6%
Argentina
IMPSAT Fiber Networks, Inc. (Telecommunications)* 7,110 $ 112,427
--------------------------------------------------------------------------------------------------
Australia - 0.7%
Australia & New Zealand Banking Group Ltd. (Banks and
Credit Cos.)* 302,400 $ 2,089,173
Cable & Wireless Optus Ltd. (Telecommunications) 892,900 2,881,170
Telstra Corp. Ltd. (Telecommunications) 400,500 1,715,297
------------
$ 6,685,640
--------------------------------------------------------------------------------------------------
Belgium - 0.1%
Lernout & Hauspie Speech Products N.V. (Electronics)* 2,000 $ 192,687
Lernout & Hauspie Speech Products N.V., "B"
(Electronics)* 6,600 643,500
------------
$ 836,187
--------------------------------------------------------------------------------------------------
Bermuda - 0.2%
FLAG Telecom Holdings Ltd. (Telecommunications)* 34,830 $ 679,185
Global Crossing Ltd. (Telecommunications)* 40,500 1,275,750
------------
$ 1,954,935
--------------------------------------------------------------------------------------------------
Brazil - 1.5%
Aracruz Celulose S.A. (Forest and Paper Products) 11,040 $ 206,310
Banco Itau S.A. (Banks and Credit Cos.) 7,279,000 544,413
Caemi Mineracao e Metalurgica S.A. (Minerals) 4,261,000 387,149
Companhia Brasileira de Distribuicao Grupo Pao de
Acucar, ADR (Supermarkets) 19,360 551,760
Companhia Cervejaria Brahma, ADR (Beverages) 9,100 141,050
Companhia Vale Rio Doce, ADR (Mining) 18,820 466,211
Companhia Vale Rio Doce, Preferred (Mining) 10,553 261,340
Embratel Participacoes S.A. (Telecommunications) 33,790 760,275
Petroleo Brasileiro S.A. (Oils) 21,330 505,338
Petroleo Brasileiro S.A., Preferred (Oils) 7,219,300 1,720,233
Tele Centro Oeste Celular Participacoes S.A., ADR
(Telecommunications) 93,520 1,075,480
Tele Centro Sul Participacoes S.A.
(Telecommunications)* 33,490,985 343,445
Tele Centro Sul Participacoes S.A., ADR
(Telecommunications)* 5,100 325,125
Tele Centro Sul Participacoes S.A., Preferred
(Telecommunications)* 24,404,000 319,077
Tele Norte Celular Participacoes S.A., ADR (Cellular
Telecommunications)* 15,560 710,897
Tele Sudeste Celular Participacoes S.A.
(Telecommunications) 13,490 576,697
Telecomunicacoes de Sao Paulo S.A.
(Telecommunications)* 128,180 3,236,545
Teleleste Celular Participacoes S.A.
(Telecommunications) 800 32,800
Telemig Celular Participacoes S.A., ADR
(Telecommunications) 9,531 557,564
Telesp Participacoes S.A., Preferred
(Telecommunications)* 26,789 696,217
Uniao de Banco Brasiliero S.A. (Banks and Credit Cos.) 17,200 428,925
Votorantim Celulose E Papel S.A., ADR (Forest and
Paper Products) 15,230 224,643
------------
$ 14,071,494
--------------------------------------------------------------------------------------------------
Canada - 2.7%
Aliant, Inc. (Telecommunications) 37,100 $ 781,579
AT&T Canada, Inc. (Telecommunications)* 40,500 1,726,313
BCE, Inc. (Telecommunications) 36,900 4,234,275
Manitoba Telecom Services, Inc. (Telecommunications) 115,550 1,931,817
Nortel Networks Corp. (Telecommunications) 145,880 16,520,910
------------
$ 25,194,894
--------------------------------------------------------------------------------------------------
China - 0.1%
China Telecom Hong Kong Ltd. (Telecommunications)* 8,170 $ 1,198,437
--------------------------------------------------------------------------------------------------
Croatia
Pliva d.d. (Medical and Health Products) 9,700 $ 119,795
Pliva d.d., GDR (Medical and Health Products) 24,870 307,145
------------
$ 426,940
--------------------------------------------------------------------------------------------------
Czechoslovakia - 0.1%
Cesky Telecom A.S. (Telecommunications)* 32,030 $ 587,751
--------------------------------------------------------------------------------------------------
Denmark - 0.2%
ISS A/S Co. (Business Services)* 25,900 $ 1,637,839
ISS A/S Co., "B" (Business Services) 1,100 69,561
------------
$ 1,707,400
--------------------------------------------------------------------------------------------------
Egypt - 0.1%
Al Ahram Beverage Co. S.A., GDR (Beverages)* 21,540 $ 376,950
Egypt Mobile Phone (Telecommunications)* 11,430 436,539
------------
$ 813,489
--------------------------------------------------------------------------------------------------
Estonia - 0.1%
AS Eesti Telekom, GDR (Telecommunications) 25,815 $ 609,250
--------------------------------------------------------------------------------------------------
Finland - 1.9%
Nokia Corp., ADR (Telecommunications) 200,000 $ 11,375,000
Sonera Oyj (Telecommunications) 82,500 4,536,547
Tieto Corp. (Computer Software - Systems) 29,970 1,443,706
------------
$ 17,355,253
--------------------------------------------------------------------------------------------------
France - 4.8%
Alcatel Co. (Telecommunications) 12,700 $ 2,943,473
Axa (Insurance) 32,300 4,788,203
Banque Nationale de Paris (Banks and Credit Cos.) 41,000 3,312,850
Bouygues S.A. (Telecommunications) 7,980 5,091,622
Business Objects S.A., ADR (Computer Software - Systems)* 8,500 831,937
Integra S.A. (Computer Software - Services)* 27,500 622,369
Natexis Co. (Finance) 5,700 388,555
Sanofi-Synthelabo S.A. (Medical and Health Products)* 115,000 4,290,690
STMicroelectronics Co. (Electronics) 18,150 3,462,623
Technip S.A. (Construction) 34,700 3,958,123
Television Francaise (Entertainment) 3,342 2,287,271
Total S.A., "B" (Oils) 37,500 5,688,578
Vivendi S.A. (Business Services) 51,500 5,092,749
Wavecom S.A., ADR (Electronics)* 10,200 809,625
------------
$ 43,568,668
--------------------------------------------------------------------------------------------------
Germany - 1.5%
Freenet.de AG (Internet)* 770 $ 78,384
Fresenius AG (Medical Supplies) 11,400 2,523,016
Fresenius AG, Preferred (Medical Supplies) 17,700 786,680
GFT Technology AG (Computer Software - Services)* 4,600 731,664
Henkel KGaA, Preferred (Chemicals) 30,983 1,802,269
Infineon Technologies AG (Electronics)* 7,450 512,926
Poet Holdings, Inc. (Computer Software-Services)* 7,200 446,306
Prosieben Media AG, Preferred (Entertainment)* 29,300 2,615,142
SAP AG, Preferred (Computer Software - Systems) 4,000 2,357,687
T-Online International AG (Internet)* 49,990 1,876,503
Tricom S.A., ADR (Telecommunications)* 6,650 119,700
------------
$ 13,850,277
--------------------------------------------------------------------------------------------------
Greece - 0.4%
Antenna TV S.A., ADR (Broadcasting)* 57,589 $ 1,112,187
Hellenic Telecommunication Organization S.A., GDR
(Telecommunications) 83,428 1,878,867
STET Hellas Telecommunications S.A., ADR
(Telecommunications)* 18,970 433,939
------------
$ 3,424,993
--------------------------------------------------------------------------------------------------
Hong Kong - 1.3%
China Telecom Ltd. (Telecommunications) 648,000 $ 4,638,258
Li & Fung Ltd. (Consumer Goods and Services)* 1,720,000 6,713,315
PetroChina Co. Ltd. (Oils)* 6,202,000 963,501
------------
$ 12,315,074
--------------------------------------------------------------------------------------------------
Hungary - 0.2%
Magyar Tavkozlesi Rt., ADR (Telecommunications)* 46,835 $ 1,630,443
--------------------------------------------------------------------------------------------------
India - 0.5%
Infosys Technologies Ltd., ADR (Computer Software -
Services) 2,230 $ 452,690
Mahanagar Telephone Nigam Ltd., GDR (Telecommunications)## 70,270 878,375
Reliance Industries Ltd. (Conglomerate)## 29,010 751,359
Satyam Infoway Ltd., ADR (Internet)* 13,900 538,625
SSI Ltd., GDR (Computer Software - Services)*## 10,320 90,300
Videsh Sanchar Nigam Ltd., GDR (Telecommunications)## 83,120 1,550,188
------------
$ 4,261,537
--------------------------------------------------------------------------------------------------
Ireland - 0.1%
Trintech Group PLC, ADR (Computer Software -
Products)* 19,500 $ 526,500
--------------------------------------------------------------------------------------------------
Israel - 0.1%
Partner Communications Co. Ltd., ADR (Cellular
Telephones)* 77,840 $ 831,915
--------------------------------------------------------------------------------------------------
Italy - 0.5%
San Paolo - Imi S.p.A. (Banks and Credit Cos.) 294,317 $ 4,119,573
--------------------------------------------------------------------------------------------------
Japan - 10.7%
Canon, Inc. (Special Products and Services) 113,000 $ 5,169,182
Chugai Pharmaceutical Co. Ltd. (Pharmaceuticals) 428,000 8,243,726
Daikin Industries Ltd. (Consumer Goods and Services) 151,000 2,873,461
Daiwa Securities Group, Inc. (Banks and Credit Cos.) 231,000 3,529,494
Eisai Co. Ltd. (Medical and Health Products) 171,000 4,987,962
Fast Retailing Co. (Retail) 26,600 11,724,790
Fujitsu Ltd. (Computer Hardware - Systems) 100,000 2,833,596
Hitachi Ltd. (Electronics) 269,000 3,213,353
Keyence Corp. (Electronics) 10,803 3,586,328
Meitec Corp. (Computer Software - Systems) 48,700 1,528,781
Mimasu Semiconductor Industry Co. Ltd. (Electronics) 97,100 1,691,315
Murata Manufacturing Co. Ltd. (Electronics) 20,000 3,889,249
Nintendo Co. (Entertainment) 9,500 1,583,480
Nippon Telegraph & Telephone Co. (Utilities -
Telephone) 469 5,819,613
Nitto Denko Corp. (Industrial Goods and Services) 44,000 1,727,567
NTT Mobile Communications Network, Inc.
(Telecommunications) 264 8,825,262
Orix Corp. (Financial Services) 24,640 3,518,370
Pioneer Electronic Corp. (Electronics) 63,000 1,720,993
Rohm Co. (Electronics) 12,500 4,190,203
Secom Co. (Consumer Goods and Services) 44,000 3,691,453
Softbank Corp. (Internet) 3,300 812,853
Softbank Corp., New Shares (Internet) 6,600 1,625,706
Sony Corp. (Electronics) 23,900 2,746,541
Sony Corp., New Shares (Electronics)* 14,400 1,666,821
Ushio, Inc. (Electronics) 189,000 4,419,159
Yahoo Japan Corp. (Internet) 4 2,000,185
------------
$ 97,619,443
--------------------------------------------------------------------------------------------------
Malaysia - 0.4%
Malayan Banking Berhad (Banks and Credit Cos.) 107,000 $ 444,918
Malaysian Pacific Industries Berhad (Electronics) 97,000 1,084,926
Resorts World Berhad (Entertainment) 139,000 449,945
Sime Darby Berhad (Holding Company) 299,000 350,950
Telekom Malaysia Berhad (Telecommunications) 124,000 430,759
Unisem (M) Berhad (Electronics) 51,000 452,984
------------
$ 3,214,482
--------------------------------------------------------------------------------------------------
Mexico - 1.2%
Cifra S.A. de C.V. (Retail)* 168,735 $ 389,319
Fomento Economico Mexicano S.A. (Food and Beverage
Products) 7,020 289,575
Grupo Continential S.A. (Food and Beverage Products) 160,320 190,918
Grupo Financiero Banorte S.A. de C.V. (Finance)* 222,880 303,335
Grupo Mexico S.A. (Metals) 80,240 327,615
Grupo Modelo S.A. de C.V. (Brewery) 227,400 483,573
Grupo Television S.A. de C.V., GDR (Entertainment)* 13,130 832,934
Kimberly-Clark de Mexico S.A. de C.V. (Forest and
Paper Products) 274,030 882,840
Nuevo Grupo Iusacell S.A. de C.V., ADR
(Telecommunications)* 58,840 937,762
Organiz Soriana S.A., "B" (General Merchandise)* 184,270 734,729
Telefonos de Mexico S.A., ADR (Utilities - Telephone) 91,215 5,364,582
Tubos de Acero de Mexico S.A. (Steel) 11,120 166,105
Wal-Mart de Mexico S.A. de C.V. (Retail)* 7,600 176,008
------------
$ 11,079,295
--------------------------------------------------------------------------------------------------
Netherlands - 3.7%
Akzo Nobel N.V. (Chemicals) 76,930 $ 3,148,573
Fugro N.V. (Engineering)* 46,905 2,195,546
Hunter Douglas N.V., ADR (Consumer Goods and
Services)* 73,388 1,674,229
ING Groep N.V. (Financial Services)* 142,874 7,794,088
Koninklijke (Royal) Philips Electronics N.V.
(Electronics) 85,600 3,817,737
Koninklijke Ahrend Groep N.V. (Consumer Goods and
Services)* 105,738 1,153,263
KPN N.V. (Telecommunications)* 113,400 11,425,228
Versatel Telecommunications N.V.
(Telecommunications)* 76,070 3,049,075
------------
$ 34,257,739
--------------------------------------------------------------------------------------------------
Norway - 0.1%
Schibsted ASA (Publishing) 64,000 $ 1,329,165
--------------------------------------------------------------------------------------------------
Peru - 0.1%
Telefonica del Peru S.A., ADR (Telecommunications) 38,650 $ 584,581
--------------------------------------------------------------------------------------------------
Philippines - 0.1%
Philippine Long Distance Telephone Co. (Utilities -
Telephone) 40,890 $ 753,909
--------------------------------------------------------------------------------------------------
Singapore - 2.6%
Chartered Semiconductor Manufacturing Co., ADR
(Electronics)* 67,150 $ 5,867,231
Datacraft Asia Ltd. (Telecommunications) 539,909 4,049,318
DBS Group Holdings Ltd. (Financial Services) 266,264 3,667,763
Natsteel Electronics Ltd. (Electronics) 577,000 3,314,537
Overseas Union Bank Ltd. (Banks and Credit Cos.) 991,000 4,530,950
Singapore Press Holdings Ltd. (Printing and
Publishing) 117,000 2,290,621
------------
$ 23,720,420
--------------------------------------------------------------------------------------------------
South Africa - 0.6%
De Beers Centenary AG (Diamonds - Precious Stones) 26,907 $ 552,000
De Beers Consolidated Mines Ltd. (Mining) 8,160 162,180
Dimension Data Holdings Ltd. (Financial Institutions) 183,074 1,202,390
Imperial Holdings Ltd. (Conglomerate)* 68,194 583,758
Liberty Life Association of Africa Ltd. (Insurance) 49,081 459,987
Nedcor Ltd. (Banks and Credit Cos.)* 32,880 624,067
Sasol Ltd. (Oils) 125,950 739,844
South African Breweries Ltd. (Brewery) 87,696 647,155
South African Breweries Ltd., ADR (Brewery) 75,120 554,256
------------
$ 5,525,637
--------------------------------------------------------------------------------------------------
South Korea - 1.7%
H&CB (Banks and Credit Cos.) 19,000 $ 325,372
Hyundai Electronics Industries Co. (Electronics) 126,039 1,999,357
Korea Telecom Corp. (Telecommunications)* 74,850 2,582,325
Mirae Corp. (Electronics)* 171,900 889,325
Mirae Corp., ADR (Electronics)* 7,210 68,495
Samsung Corp. (Electronics) 43,960 499,230
Samsung Electronics (Electronics) 32,368 8,752,050
------------
$ 15,116,154
--------------------------------------------------------------------------------------------------
Spain - 0.4%
Altadis S.A. (Tobacco)* 170,050 $ 1,986,076
Cortefiel S.A. (Retail) 99,700 2,102,322
------------
$ 4,088,398
--------------------------------------------------------------------------------------------------
Sweden - 2.0%
Allgon AB, "B" (Electronics) 56,750 $ 1,253,934
Ericsson LM, ADR (Telecommunications) 63,900 5,651,156
Ericsson LM, "B" (Telecommunications) 52,200 4,642,718
Saab AB, "B" (Aerospace) 562,477 4,582,170
Skandia Forsakrings AB (Insurance) 48,600 2,326,682
Tele1 Europe Holding AB (Telecommunications)* 6,190 97,399
------------
$ 18,554,059
--------------------------------------------------------------------------------------------------
Switzerland - 1.4%
Jomed N.V. (Medical and Health Products)* 62,060 $ 1,889,549
Nestle S.A. (Food and Beverage Products) 2,028 3,575,434
Novartis AG (Medical and Health Products) 3,403 4,754,293
Synthes-Stratec, Inc. (Medical Products)* 5,880 2,499,000
------------
$ 12,718,276
--------------------------------------------------------------------------------------------------
Taiwan - 1.1%
Acer, Inc., GDR (Computer Software - Systems)* 96,840 $ 1,007,136
Advanced Semiconducor, Inc., GDR (Electronics) 59,440 1,055,060
ASE Test Ltd. (Business Services)* 51,470 1,524,799
Far Eastern Textile Ltd., GDR (Textiles)* 20,130 402,600
Ritek Corp. (Computer - Software Systems)*## 25,290 474,188
Taipei Fund (Finance)* 375 3,771,000
Taiwan Semiconductor Manufacturing Co. Ltd., ADR
(Electronics) 42,129 2,203,873
------------
$ 10,438,656
--------------------------------------------------------------------------------------------------
Thailand - 0.2%
Hana Microelectronics Public Co. Ltd. (Electronics)* 60,900 $ 457,871
Total Access Communications Public Co. Ltd., ADR
(Telecommunications) 489,000 1,286,070
------------
$ 1,743,941
--------------------------------------------------------------------------------------------------
Turkey - 0.5%
Turkiye Garanti Bankasi (Banks and Credit Cos.)* 88,520,700 $ 1,492,028
Akbank T.A.S. (Banks and Credit Cos.) 66,098,660 1,487,271
Yapi ve Kredi Bankasi (Banks and Credit Cos.) 42,929,491 1,369,888
------------
$ 4,349,187
--------------------------------------------------------------------------------------------------
United Kingdom - 8.7%
Anglo American PLC (Metals) 14,033 $ 595,245
Anglo American PLC, ADR (Metals) 3,266 133,090
Antofagasta Holdings PLC (Minerals) 41,830 257,195
ARM Holdings PLC (Electronics)* 27,500 278,242
ARM Holdings PLC, ADR (Electronics)* 208,000 6,604,000
Boots Co. PLC (Retail)* 228,100 1,751,335
BP Amoco PLC, ADR (Oils) 154,704 7,889,904
BAE Systems PLC (Aerospace)* 1,054,727 6,485,061
British Telecommunications PLC (Telecommunications)* 203,955 3,650,977
Cable & Wireless Communications PLC
(Telecommunications) 108,800 1,630,918
Cable & Wireless Communications PLC, ADR
(Telecommunications)* 134,700 2,235,124
Capital Radio PLC (Broadcasting) 74,750 1,716,248
Carlton Communicatons PLC (Broadcasting) 174,700 2,117,037
CGU PLC (Insurance)* 311,500 4,465,752
Diageo PLC (Food and Beverage Products)* 329,283 2,655,070
lastminute.com plc (Internet)* 8,080 27,041
Lloyds TSB Group PLC (Banks and Credit Cos.)* 200,300 1,954,904
Matalan PLC (Apparel and Textiles) 210,400 1,509,814
Next PLC (Retail) 209,513 1,638,792
Reuters Group PLC (Business Services) 170,800 3,060,131
Royal Bank of Scotland PLC (Banks and Credit Cos.)* 119,900 1,870,096
United News & Media PLC (Broadcasting) 429,300 5,579,872
Vodafone AirTouch PLC (Telecommunications)* 4,037,988 18,479,459
Zeneca Group PLC (Medical and Health Products) 81,300 3,408,033
------------
$ 79,993,340
--------------------------------------------------------------------------------------------------
Venezuela
Mavesa S.A. (Consumer Goods and Services) 85,160 $ 223,545
--------------------------------------------------------------------------------------------------
Total Foreign Stocks $481,393,304
--------------------------------------------------------------------------------------------------
U.S. Stocks - 41.7%
Aerospace - 0.3%
General Dynamics Corp. 7,600 $ 444,600
Honeywell International, Inc. 15,300 856,800
United Technologies Corp. 16,700 1,038,531
------------
$ 2,339,931
--------------------------------------------------------------------------------------------------
Automotive
Harley-Davidson, Inc. 5,500 $ 218,969
--------------------------------------------------------------------------------------------------
Banks and Credit Companies - 0.1%
Chase Manhattan Corp. 18,600 $ 1,340,363
First Tennessee National Corp. 400 7,600
------------
$ 1,347,963
--------------------------------------------------------------------------------------------------
Biotechnology - 0.7%
Abbott Laboratories, Inc. 41,900 $ 1,610,531
Abgenix, Inc.* 800 71,650
Alkermes, Inc.* 500 26,625
Genentech, Inc.* 4,100 479,700
Guidant Corp.* 3,700 212,288
Pharmacia Corp. 68,552 3,423,315
Waters Corp.* 1,500 142,125
------------
$ 5,966,234
--------------------------------------------------------------------------------------------------
Business Machines - 2.3%
Hewlett-Packard Co. 36,200 $ 4,887,000
International Business Machines Corp. 17,600 1,964,600
Sun Microsystems, Inc.* 80,900 7,437,744
Texas Instruments, Inc. 40,300 6,563,862
------------
$ 20,853,206
--------------------------------------------------------------------------------------------------
Business Services - 0.6%
Automatic Data Processing, Inc. 42,600 $ 2,292,412
Computer Sciences Corp.* 22,800 1,859,625
First Data Corp. 13,300 647,544
IMRglobal Corp.* 2,600 33,475
Insight Enterprises, Inc.* 450 18,816
Learning Tree International, Inc.* 20,700 992,306
Pegasus Systems, Inc.* 600 10,650
------------
$ 5,854,828
--------------------------------------------------------------------------------------------------
Cellular Telephones - 2.4%
Motorola, Inc. 43,800 $ 5,214,938
QUALCOMM, Inc.* 87,900 9,531,656
Sprint Corp. (PCS Group)* 44,800 2,464,000
Voicestream Wireless Corp.* 51,024 5,051,376
------------
$ 22,261,970
--------------------------------------------------------------------------------------------------
Computer Hardware - Systems - 0.3%
Compaq Computer Corp. 24,200 $ 707,850
Dell Computer Corp.* 36,600 1,834,575
------------
$ 2,542,425
--------------------------------------------------------------------------------------------------
Computer Software - Personal Computers - 1.1%
Apple Computer, Inc.* 2,100 $ 260,531
Microsoft Corp.* 143,600 10,016,100
------------
$ 10,276,631
--------------------------------------------------------------------------------------------------
Computer Software - Services - 0.6%
EMC Corp.* 40,400 $ 5,613,075
Internet Commerce Corp.* 1,100 24,681
Lightspan, Inc.* 670 5,570
------------
$ 5,643,326
--------------------------------------------------------------------------------------------------
Computer Software - Systems - 7.2%
BMC Software, Inc.* 108,437 $ 5,076,207
Cadence Design Systems, Inc.* 30,600 514,463
Computer Associates International, Inc. 60,175 3,358,517
Electronic Data Systems Corp. 25,600 1,760,000
Foundry Networks, Inc.* 2,700 245,700
Oracle Corp.* 683,820 54,662,861
------------
$ 65,617,748
--------------------------------------------------------------------------------------------------
Conglomerates - 1.2%
Tyco International Ltd. 242,700 $ 11,149,031
--------------------------------------------------------------------------------------------------
Consumer Goods and Services
Carson, Inc., "A"* 20,900 $ 91,438
--------------------------------------------------------------------------------------------------
Electrical Equipment - 0.2%
General Electric Co. 13,200 $ 2,075,700
Jabil Circuit, Inc.* 800 32,750
Micrel, Inc.* 800 69,200
QLogic Corp. 400 40,125
------------
$ 2,217,775
--------------------------------------------------------------------------------------------------
Electronics - 8.6%
Altera Corp.* 120,000 $ 12,270,000
American Superconductor Corp.* 8,600 328,412
Amkor Technology, Inc.* 4,400 269,225
Analog Devices, Inc.* 92,000 7,066,750
Applied Materials, Inc.* 110,300 11,229,919
Applied Micro Circuits Corp.* 300 38,663
Arrow Electronics, Inc.* 5,600 245,350
Atmel Corp.* 6,500 318,094
ATMI, Inc.* 600 23,100
Burr-Brown Corp.* 900 61,312
Conductus, Inc.* 1,600 25,600
Credence Systems Corp.* 600 85,650
Flextronics International Ltd.* 23,720 1,666,330
Hadco Corp.* 9,400 773,737
Intel Corp. 94,400 11,971,100
Lam Research Corp.* 35,700 1,637,737
LSI Logic Corp.* 49,300 3,081,250
LTX Corp.* 1,400 64,050
Maxim Integrated Products, Inc.* 600 38,888
Microchip Technology, Inc.* 600 37,238
Micron Technology, Inc.* 64,700 9,009,475
National Semiconductor Corp.* 39,100 2,375,325
Novellus Systems, Inc.* 27,000 1,800,562
Photronics, Inc.* 600 19,988
PMC-Sierra, Inc.* 3,700 709,937
Quanta Services, Inc.* 900 41,794
Sanmina Corp.* 6,600 396,412
SCI Systems, Inc.* 17,700 942,525
SIPEX Corp.* 3,000 68,625
Solectron Corp.* 43,100 2,017,619
Teradyne, Inc.* 33,800 3,718,000
Xilinx, Inc.* 92,000 6,739,000
------------
$ 79,071,667
--------------------------------------------------------------------------------------------------
Entertainment - 0.2%
Disney (Walt) Co. 37,400 $ 1,619,887
International Speedway Corp. 821 35,303
Tivo, Inc.* 25 447
USA Networks, Inc.* 1,400 32,200
------------
$ 1,687,837
--------------------------------------------------------------------------------------------------
U.S. Stocks - continued
Finance - 0.3%
R.O.C. Taiwan Fund* 284,270 $ 2,736,099
--------------------------------------------------------------------------------------------------
Financial Institutions - 1.0%
Citigroup, Inc. 44,800 $ 2,662,800
Federal Home Loan Mortgage Corp. 35,200 1,617,000
Goldman Sachs Group, Inc. 6,700 624,775
Household International, Inc. 19,800 826,650
Lehman Brothers Holdings, Inc. 3,900 320,044
Merrill Lynch & Co., Inc. 19,600 1,997,975
Morgan Stanley Dean Witter & Co. 10,500 805,875
Schwab (Charles) Corp. 11,800 525,100
Waddell & Reed Financial, Inc., "A" 900 23,962
------------
$ 9,404,181
--------------------------------------------------------------------------------------------------
Food and Beverage Products
Anheuser-Busch Cos., Inc. 6,000 $ 423,375
--------------------------------------------------------------------------------------------------
Insurance - 0.1%
American International Group, Inc. 9,500 $ 1,042,031
--------------------------------------------------------------------------------------------------
Internet - 0.1%
VeriSign, Inc.* 2,400 $ 334,500
VIA NET.WORKS, Inc. 28,790 574,001
------------
$ 908,501
--------------------------------------------------------------------------------------------------
Medical and Health Products - 0.8%
American Home Products Corp. 11,700 $ 657,394
Bausch & Lomb, Inc. 1,400 84,525
Boston Scientific Corp.* 19,500 516,750
Immunex Corp.* 74,800 2,945,250
Pfizer, Inc. 17,000 716,125
Warner-Lambert Co. 18,500 2,105,531
------------
$ 7,025,575
--------------------------------------------------------------------------------------------------
Medical and Health Technology and Services - 0.5%
Allscripts, Inc.* 800 $ 24,800
BioSource International, Inc.* 4,900 48,081
BioSphere Medical, Inc.* 1,900 44,650
Medtronic, Inc. 37,300 1,937,269
PE Corp. 39,300 2,358,000
Ranbaxy Laboratories Ltd. 29,750 554,838
------------
$ 4,967,638
--------------------------------------------------------------------------------------------------
Metals and Minerals
Phelps Dodge Corp. 156 $ 7,215
--------------------------------------------------------------------------------------------------
Office Equipment
United Stationers, Inc.* 800 $ 26,700
--------------------------------------------------------------------------------------------------
Oil Services - 0.6%
Baker Hughes, Inc. 3,100 $ 98,619
Halliburton Co. 12,000 530,250
Noble Drilling Corp.* 26,700 1,066,331
Schlumberger Ltd. 42,800 3,276,875
Weatherford International, Inc.* 1,000 40,625
------------
$ 5,012,700
--------------------------------------------------------------------------------------------------
Oils - 0.5%
EOG Resources, Inc. 10,900 $ 271,137
Exxon Mobil Corp. 47,700 3,705,694
Grant Pride Co., Inc.* 1,000 19,250
Transocean Sedco Forex, Inc. 12,100 568,700
------------
$ 4,564,781
--------------------------------------------------------------------------------------------------
Pharmaceuticals - 0.6%
Sepracor, Inc.* 41,300 $ 3,799,600
Teva Pharmaceutical Industries Ltd. 29,620 1,303,280
------------
$ 5,102,880
--------------------------------------------------------------------------------------------------
Restaurants and Lodging - 0.1%
McDonald's Corp. 11,800 $ 449,875
--------------------------------------------------------------------------------------------------
Retail - 2.9%
Bed Bath & Beyond, Inc.* 17,200 $ 631,025
Best Buy Co., Inc.* 40,900 3,302,675
Circuit City Stores, Inc. 47,500 2,793,594
Costco Wholesale Corp.* 29,800 1,611,062
CVS Corp. 61,600 2,679,600
Home Depot, Inc. 60,000 3,363,750
Kohl's Corp.* 28,100 1,348,800
Lowe's Cos., Inc. 3,600 178,200
Sears, Roebuck & Co. 20,900 765,463
Tandy Corp. 57,200 3,260,400
Target Corp. 5,300 352,781
The Limited., Inc. 10,800 488,025
Wal-Mart Stores, Inc. 109,300 6,052,487
------------
$ 26,827,862
--------------------------------------------------------------------------------------------------
Special Products and Services
Newport News Shipbuilding, Inc. 100 $ 3,338
--------------------------------------------------------------------------------------------------
Supermarkets - 0.9%
Albertsons, Inc. 13,500 $ 439,594
Kroger Co.* 43,700 811,181
Safeway, Inc.* 149,300 6,587,863
------------
$ 7,838,638
--------------------------------------------------------------------------------------------------
Technology
Advanced Micro Devices, Inc.* 2,500 $ 219,375
--------------------------------------------------------------------------------------------------
Telecommunications - 7.0%
Amdocs Ltd.* 9,780 $ 661,984
AT&T Wireless Group 37,640 1,197,422
AT&T Wireless Group, "A" 40,200 2,007,487
Cabletron Systems, Inc.* 22,400 512,400
CIENA Corp.* 67,400 8,332,325
Cisco Systems, Inc.* 446,000 30,920,344
Corning, Inc. 13,800 2,725,500
EchoStar Communications Corp.* 18,200 1,159,113
Intermedia Communications, Inc.* 16,300 664,225
ITC Deltacom, Inc.* 900 29,588
JDS Uniphase Corp.* 19,012 1,971,307
Lucent Technologies, Inc. 20,800 1,293,500
MCI WorldCom, Inc.* 31,800 1,444,912
Metromedia Fiber Network, Inc., "A"* 131,820 4,069,942
MGC Communications, Inc.* 1,800 88,200
NTL, Inc.* 42,300 3,235,950
Powerwave Technologies, Inc.* 4,000 832,250
Sprint Corp.* 19,500 1,199,250
Time Warner Telecom, Inc.* 3,500 191,625
UnitedGlobalCom, Inc.* 27,200 1,445,000
UTStarcom, Inc.* 1,470 69,825
------------
$ 64,052,149
--------------------------------------------------------------------------------------------------
Utilities - Electric - 0.4%
Calpine Corp.* 43,500 $ 3,980,250
--------------------------------------------------------------------------------------------------
Utilities - Gas - 0.1%
Enron Corp. 8,800 $ 613,250
--------------------------------------------------------------------------------------------------
Total U.S. Stocks $382,347,392
--------------------------------------------------------------------------------------------------
Total Stocks (Identified Cost, $651,424,341) $863,740,696
--------------------------------------------------------------------------------------------------
Warrants
--------------------------------------------------------------------------------------------------
U.S. Stocks
Acclaim Entertainment, Inc.* (Identified Cost, $0) 2,185 $ 2,322
--------------------------------------------------------------------------------------------------
Short-Term Obligations - 6.3%
--------------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT
ISSUER (000 OMITTED) VALUE
--------------------------------------------------------------------------------------------------
Federal Agricultural Mortgage Corp., due 5/11/00 - 5/
12/00 $ 39,000 $ 38,931,447
Federal Home Loan Bank, due 5/01/00 8,820 8,820,000
Federal Home Loan Mortgage Corp., due 5/16/00 10,000 9,975,458
--------------------------------------------------------------------------------------------------
Total Short-Term Obligations, at Amortized Cost $ 57,726,905
--------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $709,151,246) $921,469,923
Other Assets, Less Liabilities - (0.6)% (5,299,128)
--------------------------------------------------------------------------------------------------
Net Assets - 100.0% $916,170,795
--------------------------------------------------------------------------------------------------
* Non-income producing security.
## SEC Rule 144A restriction.
</TABLE>
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS
Statement of Assets and Liabilities (Unaudited)
------------------------------------------------------------------------------
APRIL 30, 2000
------------------------------------------------------------------------------
Assets:
Investments, at value (identified cost, $709,151,246) $ 921,469,923
Investments of cash collateral for securities loaned,
at identified cost and value 121,185,078
Cash 35,740
Foreign currency, at value (identified cost, $860,396) 842,372
Receivable for Fund shares sold 2,850,408
Receivable for investments sold 15,492,333
Dividends and interest receivable 1,029,364
Other assets 6,456
--------------
Total assets $1,062,911,674
--------------
Liabilities:
Payable for Fund shares reacquired $ 1,064,594
Payable for investments purchased 24,121,289
Collateral for securities loaned, at value 121,185,078
Payable to affiliates -
Management fee 66,296
Shareholder servicing agent fee 7,366
Distribution and service fee 50,575
Administrative fee 1,289
Accrued expenses and other liabilities 244,392
--------------
Total liabilities $ 146,740,879
--------------
Net assets $ 916,170,795
==============
Net assets consist of:
Paid-in capital $ 570,319,962
Unrealized appreciation on investments and translation
of assets and
liabilities in foreign currencies 212,249,203
Accumulated undistributed net realized gain on
investments and foreign
currency transactions 138,360,730
Accumulated net investment loss (4,759,100)
--------------
Total $ 916,170,795
==============
Shares of beneficial interest outstanding 31,646,858
==========
Class A shares:
Net asset value per share
(net assets of $369,696,609 / 12,619,941 shares of
beneficial interest outstanding) $29.29
======
Offering price per share (100 / 94.25 of net asset
value per share) $31.08
======
Class B shares:
Net asset value and offering price per share
(net assets of $471,798,707 / 16,424,294 shares of
beneficial interest outstanding) $28.73
======
Class C shares:
Net asset value and offering price per share
(net assets of $64,665,005 / 2,262,867 shares of
beneficial interest outstanding) $28.58
======
Class I shares:
Net asset value, offering price, and redemption price per share
(net assets of $10,010,474 / 339,756 shares of
beneficial interest outstanding) $29.46
======
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, 2000
------------------------------------------------------------------------------
Net investment income (loss):
Income -
Dividends $ 2,500,369
Interest 1,186,371
Income on securities loaned 279,515
Foreign taxes withheld (302,590)
------------
Total investment income $ 3,663,665
------------
Expenses -
Management fee $ 3,735,959
Trustees' compensation 21,768
Shareholder servicing agent fee 415,106
Distribution and service fee (Class A) 583,645
Distribution and service fee (Class B) 2,200,292
Distribution and service fee (Class C) 238,665
Administrative fee 49,221
Custodian fee 439,608
Printing 11,375
Postage 56,496
Auditing fees 20,896
Legal fees 940
Miscellaneous 196,225
------------
Total expenses $ 7,970,196
Fees paid indirectly (180,970)
Reduction of expenses by distributor (167,798)
------------
Net expenses $ 7,621,428
------------
Net investment loss $ (3,957,763)
------------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $142,740,750
Foreign currency transactions (213,029)
------------
Net realized gain on investments and foreign currency
transactions $142,527,721
Change in unrealized appreciation (depreciation) -
Investments $ 71,880,708
Translation of assets and liabilities in foreign
currencies (78,518)
--------------
Net unrealized gain on investments and foreign
currency translation $ 71,802,190
--------------
Net realized and unrealized gain on investments and
foreign currency $ 214,329,911
--------------
Increase in net assets from operations $ 210,372,148
==============
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS -- continued
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2000 OCTOBER 31, 1999
(UNAUDITED)
----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment loss $ (3,957,763) $ (3,583,816)
Net realized gain on investments and foreign currency
transactions 142,527,721 65,098,721
Net unrealized gain on investments and foreign currency
translation 71,802,190 110,860,673
------------- -------------
Increase in net assets from operations $ 210,372,148 $ 172,375,578
------------- -------------
Distributions declared to shareholders -
From net realized gain on investments and foreign
currency transactions (Class A) $ (20,046,664) $ (16,259,953)
From net realized gain on investments and foreign
currency transactions (Class B) (25,906,105) (22,605,139)
From net realized gain on investments and foreign
currency transactions (Class C) (2,240,760) (1,663,777)
From net realized gain on investments and foreign
currency transactions (Class I) (625,939) (471,404)
------------- -------------
Total distributions declared to shareholders $ (48,819,468) $ (41,000,273)
------------- -------------
Net increase (decrease) in net assets from Fund share
transactions $ 145,907,046 $ (1,797,176)
------------- -------------
Total increase in net assets $ 307,459,726 $ 129,578,129
Net assets:
At beginning of period 608,711,069 479,132,940
------------- -------------
At end of period (including accumulated net investment
loss of $4,759,100 and $801,337, respectively) $ 916,170,795 $ 608,711,069
============= =============
</TABLE>
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS -- continued
<TABLE>
<CAPTION>
Financial Highlights
------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
SIX MONTHS ENDED -------------------------------------------------------------
APRIL 30, 2000 1999 1998 1997 1996 1995
(UNAUDITED)
------------------------------------------------------------------------------------------------------------------------------
CLASS A
------------------------------------------------------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
<S> <C> <C> <C> <C> <C> <C>
Net asset value - beginning of period $ 23.20 $ 18.27 $ 20.79 $ 19.09 $ 18.16 $ 17.45
-------- -------- -------- -------- -------- --------
Income (loss) from investment operations# -
Net investment loss(S) $ (0.07) $ (0.05) $ (0.01) $ (0.02) $ (0.07) $ --
Net realized and unrealized
gain (loss) on investments
and foreign currency 8.06 6.59 (0.41) 2.77 2.73 0.93
-------- -------- -------- -------- -------- --------
Total from investment operations $ 7.99 $ 6.54 $ (0.42) $ 2.75 $ 2.66 $ 0.93
-------- -------- -------- -------- -------- --------
Less distributions declared to shareholders -
From net investment income $ -- $ -- $ -- $ -- $ (0.01) $ --
From net realized gain on investments
and foreign currency transactions (1.90) (1.61) (2.10) (1.05) (1.72) (0.22)
-------- -------- -------- -------- -------- --------
Total distributions declared to
shareholders $ (1.90) $ (1.61) $ (2.10) $ (1.05) $ (1.73) $ (0.22)
-------- -------- -------- -------- -------- --------
Net asset value - end of period $ 29.29 $ 23.20 $ 18.27 $ 20.79 $ 19.09 $ 18.16
======== ======== ======== ======== ======== ========
Total return(+) 35.49%++ 38.13% (1.99)% 15.17% 15.73% 5.47%
Ratios (to average net assets)/
Supplemental data(S):
Expenses## 1.44%+ 1.48% 1.49% 1.52% 1.58% 1.63%
Net investment income (loss) (0.51)%+ (0.23)% (0.06)% (0.10)% (0.35)% 0.02%
Portfolio turnover 88% 146% 104% 133% 95% 149%
Net assets at end of period (000 Omitted) $369,697 $244,777 $195,194 $204,918 $172,106 $143,543
(S) The distributor voluntarily waived a portion of 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 income $ (0.08) $ (0.07) $ (0.03) $ (0.04) $ (0.09) $ --
Ratios (to average net assets):
Expenses## 1.54%+ 1.58% 1.59% 1.62% 1.68% 1.73%
Net investment loss (0.61)%+ (0.33)% (0.16)% (0.20)% (0.45)% (0.08)%
+ Annualized.
++ Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset arrangements.
(+) Total returns for Class A shares do not include the applicable sales charge. If the charge had been included, the results would
have been lower.
</TABLE>
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS -- continued
<TABLE>
<CAPTION>
Financial Highlights - continued
------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
SIX MONTHS ENDED -------------------------------------------------------------
APRIL 30, 2000 1999 1998 1997 1996 1995
(UNAUDITED)
------------------------------------------------------------------------------------------------------------------------------
CLASS B
------------------------------------------------------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
<S> <C> <C> <C> <C> <C> <C>
Net asset value - beginning of period $ 22.73 $ 18.06 $ 20.56 $ 18.87 $ 17.97 $ 17.32
-------- -------- -------- -------- -------- --------
Income (loss) from investment operations# -
Net investment loss $ (0.18) $ (0.20) $ (0.16) $ (0.17) $ (0.21) $ (0.14)
Net realized and unrealized
gain (loss) on investments
and foreign currency 7.94 6.48 (0.40) 2.76 2.70 0.92
-------- -------- -------- -------- -------- --------
Total from investment operations $ 7.76 $ 6.28 $ (0.56) $ 2.59 $ 2.49 $ 0.78
-------- -------- -------- -------- -------- --------
Less distributions declared to shareholders
from net realized gain on investments
and foreign currency transactions $ (1.76) $ (1.61) $ (1.94) $ (0.90) $ (1.59) $ (0.13)
-------- -------- -------- -------- -------- --------
Net asset value - end of period $ 28.73 $ 22.73 $ 18.06 $ 20.56 $ 18.87 $ 17.97
======== ======== ======== ======== ======== ========
Total return 35.00%++ 37.12% (2.70)% 14.30% 14.77% 4.61%
Ratios (to average net assets)/
Supplemental data:
Expenses## 2.19%+ 2.23% 2.24% 2.28% 2.39% 2.45%
Net investment loss (1.27)%+ (0.99)% (0.81)% (0.87)% (1.16)% (0.80)%
Portfolio turnover 88% 146% 104% 133% 95% 149%
Net assets at end of period (000 Omitted) $471,799 $330,542 $259,345 $308,692 $282,668 $247,437
+ Annualized.
++ Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset arrangements.
</TABLE>
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS -- continued
<TABLE>
<CAPTION>
Financial Highlights - continued
------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
SIX MONTHS ENDED -------------------------------------------------------------
APRIL 30, 2000 1999 1998 1997 1996 1995
(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 $ 22.64 $ 17.99 $ 20.49 $ 18.85 $ 17.96 $ 17.34
-------- -------- -------- -------- -------- --------
Income (loss) from investment operations# -
Net investment loss $ (0.17) $ (0.20) $ (0.16) $ (0.17) $ (0.20) $ (0.13)
Net realized and unrealized
gain (loss) on investments
and foreign currency 7.89 6.46 (0.40) 2.75 2.70 0.92
-------- -------- -------- -------- -------- --------
Total from investment operations $ 7.72 $ 6.26 $ (0.56) $ 2.58 $ 2.50 $ 0.79
-------- -------- -------- -------- -------- --------
Less distributions declared to shareholders
from net realized gain on investments
and foreign currency transactions $ (1.78) $ (1.61) $ (1.94) $ (0.94) $ (1.61) $ (0.17)
-------- -------- -------- -------- -------- --------
Net asset value - end of period $ 28.58 $ 22.64 $ 17.99 $ 20.49 $ 18.85 $ 17.96
======== ======== ======== ======== ======== ========
Total return 34.97%++ 37.15% (2.73)% 14.27% 14.88% 4.68%
Ratios (to average net assets)/
Supplemental data:
Expenses## 2.19%+ 2.23% 2.24% 2.25% 2.32% 2.38%
Net investment loss (1.24)%+ (0.99)% (0.83)% (0.85)% (1.10)% (0.72)%
Portfolio turnover 88% 146% 104% 133% 95% 149%
Net assets at end of period (000 Omitted) $ 64,665 $ 26,120 $ 19,149 $ 24,662 $ 19,994 $ 13,349
+ Annualized.
++ Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset arrangements.
</TABLE>
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS -- continued
<TABLE>
<CAPTION>
Financial Highlights - continued
----------------------------------------------------------------------------------------------------------------------------
YEAR ENDED
OCTOBER 31, PERIOD ENDED
SIX MONTHS ENDED ----------------------------- OCTOBER 31,
APRIL 30, 2000 1999 1998 1997*
(UNAUDITED)
----------------------------------------------------------------------------------------------------------------------------
CLASS I
----------------------------------------------------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
<S> <C> <C> <C> <C>
Net asset value - beginning of period $ 23.33 $ 18.32 $ 20.84 $ 18.34
-------- -------- -------- --------
Income (loss) from investment operations# -
Net investment income (loss) $ (0.04) $ -- $ 0.04 $ 0.04
Net realized and unrealized gain (loss) on
investments and foreign currency 8.13 6.62 (0.40) 2.46
-------- -------- -------- --------
Total from investment operations $ 8.09 $ 6.62 $ (0.36) $ 2.50
-------- -------- -------- --------
Less distributions declared to shareholders
from net realized gain on investments and foreign
currency transactions $ (1.96) $ (1.61) $ (2.16) $ --
-------- -------- -------- --------
Net asset value - end of period $ 29.46 $ 23.33 $ 18.32 $ 20.84
======== ======== ======== ========
Total return 35.66%++ 38.55% (1.64)% 13.58%++
Ratios (to average net assets)/Supplemental data:
Expenses## 1.19% 1.23% 1.24% 1.21%+
Net investment income (loss) (0.28)%+ 0.01% 0.19% 0.20%+
Portfolio turnover 88% 146% 104% 133%
Net assets at end of period (000 Omitted) $10,010 $7,272 $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.
## Ratios do not reflect expense reductions from certain expense offset arrangements.
</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. The Fund can
invest in foreign securities. Investments in foreign securities are vulnerable
to the effects of changes in the relative values of the local currency and the
U.S. dollar and to the effects of changes in each country's legal, political,
and economic environment.
Investment Valuations - Equity securities listed on securities exchanges or
reported through the NASDAQ system are reported at market value using last sale
prices. Unlisted equity securities or listed equity securities for which last
sale prices are not available are reported at market value using last quoted bid
prices. Short-term obligations, which mature in 60 days or less, are valued at
amortized cost, which approximates market value. Securities for which there are
no such quotations or valuations are valued in good faith, at fair value, by the
Trustees.
Foreign Currency Translation - Investment valuations, other assets, and
liabilities initially expressed in foreign currencies are converted each
business day into U.S. dollars based upon current exchange rates. Purchases and
sales of foreign investments, income, and expenses are converted into U.S.
dollars based upon currency exchange rates prevailing on the respective dates of
such transactions. Gains and losses attributable to foreign currency exchange
rates on sales of securities are recorded for financial statement purposes as
net realized gains and losses on investments. Gains and losses attributable to
foreign exchange rate movements on income and expenses are recorded for
financial statement purposes as foreign currency transaction gains and losses.
That portion of both realized and unrealized gains and losses on investments
that results from fluctuations in foreign currency exchange rates is not
separately disclosed.
Security Loans - State Street Bank and Trust Company ("State Street"), as
lending agent, may loan the securities of the Fund to certain qualified
institutions (the "Borrowers") approved by the Fund. The loans are
collateralized at all times by cash and/or U.S. Treasury securities in an amount
at least equal to the market value of the securities loaned. State Street
provides the Fund with indemnification against Borrower default. The Fund bears
the risk of loss with respect to the investment of cash collateral.
Cash collateral is invested in short-term securities. A portion of the income
generated upon investment of the collateral is remitted to the Borrowers, and
the remainder is allocated between the Fund and the lending agent. On loans
collateralized by U.S. Treasury securities, a fee is received from the Borrower,
and is allocated between the Fund and the lending agent. The dividend and
interest income earned on the securities loaned is accounted for in the same
manner as other dividend and interest income.
At April 30, 2000, the value of securities loaned was $121,803,270. These loans
were collateralized by U.S. Treasury securities of $8,029,640 and cash of
$121,185,078 which was invested in the following short-term obligation:
AMORTIZED
COST AND
SHARES VALUE
--------------------------------------------------------------------------------
Navigator Securities Lending Prime Portfolio 121,185,078 $121,185,078
Investment Transactions and Income - Investment transactions are recorded on the
trade date. Interest income is recorded on the accrual basis. All discount is
accreted for financial statement and tax reporting purposes as required by
federal income tax regulations. Dividends received in cash are recorded on the
ex-dividend date. Dividend and interest payments received in additional
securities are recorded on the ex-dividend or ex-interest date in an amount
equal to the value of the security on such date.
Fees Paid Indirectly - The Fund's custody fee is reduced according to an
arrangement that measures the value of cash deposited with the custodian by the
Fund. This amount is shown as a reduction of total expenses on the Statement of
Operations.
Tax Matters and Distributions - The Fund's policy is to comply with the
provisions of the Internal Revenue Code (the Code) applicable to regulated
investment companies and to distribute to shareholders all of its net taxable
income, including any net realized gain on investments. Accordingly, no
provision for federal income or excise tax is provided.
Distributions to shareholders are recorded on the ex-dividend date. The Fund
distinguishes between distributions on a tax basis and a financial reporting
basis and requires that only distributions in excess of tax basis earnings and
profits be 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 daily net
assets of each class, without distinction between share classes. Dividends are
declared separately for each class. Differences in per share dividend rates are
generally due to differences in separate class expenses. Class B shares will
convert to Class A shares approximately eight years after purchase.
(3) Transactions with Affiliates
Investment Adviser - The Fund has an investment advisory agreement with
Massachusetts Financial Services Company (MFS) to provide overall investment
advisory and administrative services, and general office facilities. The
management fee is computed daily and paid monthly at the following annual rates:
First $1 billion of average net assets 0.90%
Average net assets in excess of $1 billion 0.75%
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 $6,400 for the six months
ended April 30, 2000.
Administrator - The Fund has an administrative services agreement with MFS to
provide the Fund with certain financial, legal, shareholder servicing,
compliance, and other administrative services. As a partial reimbursement for
the cost of providing these services, the Fund incurs an administrative fee at
the following annual percentages of the Fund's average daily net assets:
First $2 billion 0.0175%
Next $2.5 billion 0.0130%
Next $2.5 billion 0.0005%
In excess of $7 billion 0.0000%
Distributor - MFD, a wholly owned subsidiary of MFS, as distributor, received
$132,846 for the six months ended April 30, 2000, as its portion of the sales
charge on sales of Class A shares of the Fund.
The Trustees have adopted a distribution plan for Class A, Class B, and Class C
shares pursuant to Rule 12b-1 of the Investment Company Act of 1940 as follows:
The Fund's distribution plan provides that the Fund will pay MFD up to 0.35% per
annum of its average daily net assets attributable to Class A shares in order
that MFD may pay expenses on behalf of the Fund related to the distribution and
servicing of its shares. These expenses include a service fee paid to each
securities dealer that enters into a sales agreement with MFD of up to 0.25% per
annum of the Fund's average daily net assets attributable to Class A shares
which are attributable to that securities dealer and a distribution fee to MFD
of up to 0.10% per annum of the Fund's average daily net assets attributable to
Class A shares. MFD retains the service fee for accounts not attributable to a
securities dealer, which amounted to $25,298 for the six months ended April 30,
2000. 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, 2000, 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 $13,805 and $548 for Class B and Class C shares, respectively, for
the six months ended April 30, 2000. Fees incurred under the distribution plan
during the six months ended April 30, 2000, were 1.00% of 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,
2000, were $8,237, $131,305, and $2,541 for Class A, Class B, and Class C
shares, respectively.
Shareholder Servicing Agent - MFSC, a wholly owned subsidiary of MFS, earns a
fee for its services as shareholder servicing agent. The fee is calculated as a
percentage of the Fund's average daily net assets at an annual rate of 0.10%.
(4) Portfolio Securities
Purchases and sales of investments, other than U.S. government securities,
purchased option transactions, and short-term obligations, aggregated
$780,068,892 and $689,246,829, 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 $709,151,246
------------
Gross unrealized appreciation $245,806,728
Gross unrealized depreciation (33,488,051)
------------
Net unrealized appreciation $212,318,677
============
(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, 2000 YEAR ENDED OCTOBER 31, 1999
------------------------------- ------------------------------
SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 9,497,492 $ 285,333,677 47,525,247 $ 966,767,986
Shares issued to shareholders
in reinvestment of
distributions 678,919 17,997,576 836,303 15,402,364
Shares reacquired (8,108,800) (243,102,632) (48,494,561) (989,104,678)
------------- ------------- ------------- -------------
Net increase (decrease) 2,067,611 $ 60,228,621 (133,011) $ (6,934,328)
============= ============= ============= =============
Class B Shares
SIX MONTHS ENDED APRIL 30, 2000 YEAR ENDED OCTOBER 31, 1999
------------------------------- ------------------------------
SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 3,036,882 $ 88,502,751 2,782,026 $ 57,830,751
Shares issued to shareholders
in reinvestment of
distributions 820,312 21,361,161 987,616 17,849,062
Shares reacquired (1,972,202) (56,698,921) (3,591,842) (72,391,978)
------------- ------------- ------------- -------------
Net increase 1,884,992 $ 53,164,991 177,800 $ 3,287,835
============= ============= ============= =============
Class C Shares
SIX MONTHS ENDED APRIL 30, 2000 YEAR ENDED OCTOBER 31, 1999
------------------------------- ------------------------------
SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 1,638,764 $ 47,546,142 3,132,092 $ 63,131,555
Shares issued to shareholders
in reinvestment of
distributions 64,928 1,681,650 65,363 1,176,528
Shares reacquired (594,666) (17,433,216) (3,107,998) (62,729,730)
------------- ------------- ------------- -------------
Net increase 1,109,026 $ 31,794,576 89,457 $ 1,578,353
============= ============= ============= =============
Class I Shares
SIX MONTHS ENDED APRIL 30, 2000 YEAR ENDED OCTOBER 31, 1999
------------------------------- ------------------------------
SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 382,820 $ 12,078,991 46,819 $ 980,650
Shares issued to shareholders
in reinvestment of
distributions 23,522 625,934 25,647 471,399
Shares reacquired (378,272) (11,986,067) (57,985) (1,181,085)
------------- ------------- ------------- -------------
Net increase 28,070 $ 718,858 14,481 $ 270,964
============= ============= ============= =============
</TABLE>
(6) Line of Credit
The Fund and other affiliated funds participate in a $1.1 billion unsecured line
of credit provided by a syndication of banks under a line of credit agreement.
Borrowings may be made for temporary financing needs. Interest is charged to
each fund, based on its borrowings, at a rate equal to the bank's base rate. In
addition, a commitment fee, based on the average daily unused portion of the
line of credit, is allocated among the participating funds at the end of each
quarter. The commitment fee allocated to the Fund for the six months ended April
30, 2000, was $3,198. The Fund had no borrowings during the period.
<PAGE>
MFS(R) GLOBAL GROWTH FUND
<TABLE>
<S> <C>
TRUSTEES TREASURER
Richard B. Bailey+ - Private Investor; W. Thomas London*
Former Chairman and Director (until 1991),
MFS Investment Management(R) ASSISTANT TREASURERS
Mark E. Bradley*
Marshall N. Cohan+ - Private Investor Ellen Moynihan*
James O. Yost*
Lawrence H. Cohn, M.D.+ - Chief of Cardiac
Surgery, Brigham and Women's Hospital; SECRETARY
Professor of Surgery, Harvard Medical School Stephen E. Cavan*
The Hon. Sir J. David Gibbons, KBE+ - Chief ASSISTANT SECRETARY
Executive Officer, Edmund Gibbons Ltd.; James R. Bordewick, Jr.*
Chairman, Colonial Insurance Company, Ltd.
CUSTODIAN
Abby M. O'Neill+ - Private Investor State Street Bank and Trust Company
Walter E. Robb, III+ - President and Treasurer, INVESTOR INFORMATION
Benchmark Advisors, Inc. (corporate financial For information on MFS mutual funds, call
consultants); President, Benchmark your investment professional or, for an
Consulting Group, Inc. (office services) information kit, call toll free: 1-800-637-2929
any business day from 9 a.m. to 5 p.m.
Arnold D. Scott* - Senior Executive Eastern time (or leave a message anytime).
Vice President, Director, and Secretary,
MFS Investment Management INVESTOR SERVICE
MFS Service Center, Inc.
Jeffrey L. Shames* - Chairman and Chief P.O. Box 2281
Executive Officer, MFS Investment Boston, MA 02107-9906
Management
For general information, call toll free:
J. Dale Sherratt+ - President, Insight 1-800-225-2606 any business day from
Resources, Inc. (acquisition planning specialists) 8 a.m. to 8 p.m. Eastern time.
Ward Smith+ - Former Chairman (until 1994), For service to speech- or hearing-impaired,
NACCO Industries (holding company) call toll free: 1-800-637-6576 any business
day from 9 a.m. to 5 p.m. Eastern time. (To
INVESTMENT ADVISER use this service, your phone must be equipped
Massachusetts Financial Services Company with a Telecommunications Device for the Deaf.)
500 Boylston Street
Boston, MA 02116-3741 For share prices, account balances, exchanges,
or stock and bond outlooks, call toll free:
DISTRIBUTOR 1-800-MFS-TALK (1-800-637-8255) anytime
MFS Fund Distributors, Inc. from a touch-tone telephone.
500 Boylston Street
Boston, MA 02116-3741 WORLD WIDE WEB
www.mfs.com
CHAIRMAN AND PRESIDENT
Jeffrey L. Shames*
DIRECTOR OF INTERNATIONAL
EQUITY RESEARCH
David A. Antonelli*
PORTFOLIO MANAGERS
John W. Ballen*
Toni Y. Shimura*
+ Independent Trustee
* MFS Investment Management
</TABLE>
<PAGE>
MFS(R) GLOBAL GROWTH FUND ------------
BULK RATE
U.S. POSTAGE
PAID
[Logo] M F S(R) MFS
INVESTMENT MANAGEMENT ------------
We invented the mutual fund(R)
500 Boylston Street
Boston, MA 02116-3741
(c)2000 MFS Investment Management(R).
MFS(R) investment products are offered through MFS Fund Distributors, Inc.,
500 Boylston Street, Boston, MA 02116
MWF-3 06/00 96M 09/209/309/809
