<PAGE>
[Logo] M F S (R)
INVESTMENT MANAGEMENT
We invented the mutual fund(R)
MFS(R) SPECIAL
VALUE TRUST
SEMIANNUAL REPORT o APRIL 30, 2000
<PAGE>
TABLE OF CONTENTS
Letter from the Chairman .................................................. 1
Management Review and Outlook ............................................. 4
Performance Summary ....................................................... 7
Portfolio of Investments .................................................. 9
Financial Statements ...................................................... 15
Notes to Financial Statements ............................................. 19
Trustees and Officers ..................................................... 25
MFS ORIGINAL RESEARCH(R)
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
--------------------------------------------------------------------------------
<PAGE>
LETTER FROM THE CHAIRMAN
[Photo of Jeffrey L. Shames]
Jeffrey L. Shames
Dear Shareholders,
This spring, the U.S. stock market experienced record point drops and
volatility that have given many investors cause for concern. While the recent
market correction has rattled a lot of nerves, it's important to put the
current market environment in perspective. Throughout the history of the
market, investors have experienced numerous corrections (declines of more than
20%) and periods of extreme volatility. Of course, past performance is no
guarantee of future results; however, over the long term, stock and bond
investors have enjoyed returns that have solidly outpaced inflation.
From our perspective, as we look at the global investment climate at the
beginning of the new millennium, we see many reasons for optimism, as well as
the need to voice some words of caution. Our reasons for being optimistic
about both stock and bond markets include
o STRONG CORPORATE EARNINGS GROWTH: We believe that, over time, the most
important driver of stock prices is corporate earnings. Our research
indicates that the average earnings growth for U.S. companies could approach
15% in 2000, which would bode very well for U.S. equities. We are also
seeing encouraging signs that companies worldwide, and particularly in
Europe, are beginning to focus more on earnings and shareholder value --
that is, delivering stock price performance that will reward investors. As
we research companies around the globe, we are finding that specific areas
of opportunity include technology companies, especially those involved in
wireless telecommunications and in supplying infrastructure and services for
the Internet.
o LOW INFLATION WORLDWIDE: We believe accelerating inflation is one of the
chief factors that could end the current economic boom. While the U.S.
economy continues to grow rapidly, we have not experienced significant signs
of inflation. In our opinion, perhaps the major force keeping inflation at
bay is worldwide productivity increases, fueled by advancing technology. A
technological revolution based on computerization and the Internet appears
to be making it possible for companies to produce more products with fewer
employees, thereby enabling companies to increase earnings without raising
prices. A related factor keeping inflation down is the heightened
competition of an increasingly global marketplace, where, for example,
businesses are beginning to use computer networks and the Internet to shop
worldwide for the lowest prices from suppliers.
o STRONG GLOBAL ECONOMIES: Our outlook is that a majority of national
economies will continue to experience healthy growth with low inflation. In
late January, the current economic boom in the United States became the
longest in the nation's history. It appears to us that the U.S. Federal
Reserve Board's (the Fed's) program of gradual interest-rate increases will
eventually be successful in cooling the somewhat overheated U.S. economy
while prolonging the boom. In Europe, we see strong evidence that most
countries will continue on a moderate growth path with low inflation. A
major reason for this is that European companies have begun to adopt the
practices of downsizing, outsourcing, and consolidation that have helped
revitalize U.S. industry over the past decade. We are witnessing a similar
situation in Japan, as more firms merge, restructure, and invest in
technology. In the Pacific Rim, most economies have recovered from the
economic turmoil of late summer 1998 and are surging ahead. We believe
progress toward restructuring Asia's banking systems and other ailing
industries bodes well for stronger investor confidence in the region. While
business conditions have been less favorable in Latin America due to
relatively high inflation, increased exports and industrial production
suggest to us that the region's recession has ended.
Amid this positive global outlook, however, we believe investors should also
heed some cautionary notes:
o IT IS HIGHLY UNLIKELY THAT U.S. EQUITY MARKETS WILL CONTINUE TO PERFORM AT
THE PACE OF THE LAST SEVERAL YEARS. Although our outlook for U.S. markets
this year is quite positive, we believe it is unrealistic for investors to
expect stock market returns, as measured by the Standard & Poor's 500
Composite Index,(1) to routinely exceed 20%, as they did for each of the
past four years.
o HIGH VALUATIONS, ESPECIALLY OF TECHNOLOGY STOCKS, HAVE MADE U.S. MARKETS
INCREASINGLY VOLATILE. Investor excitement over the past year has pushed
many technology-related stocks to very high relative prices, as expressed by
their price/earnings (P/E) ratios. In general, we believe these higher
valuations are largely supported by the strong earnings growth mentioned
earlier. However, as we've recently experienced, this backdrop has led to a
highly volatile environment, where the market is swift to punish companies
whose earnings are less than expected and where fear can rapidly overcome
the desire to invest for long-term goals.
o RISING INTEREST RATES MAY DAMPEN MARKETS IN THE SHORT TERM, PARTICULARLY IN
THE UNITED STATES AND EUROPE. The Fed's current program of raising interest
rates could potentially cool both stock and bond markets, and the European
Central Bank has tended to follow the lead of the Fed in adjusting its own
interest rates. It is our expectation, however, that in the long term
interest rates will trend down again, perhaps by the end of this year. We
believe that could be favorable for both equity and fixed-income
investments.
On balance, it appears to us that the current global investment climate is
well matched to MFS' research-oriented style of investing. In the equity
markets, where we believe earnings growth is the most reliable indicator of
long-term performance, we feel our research team is second to none in
determining the real value of a company and its long-term earnings potential.
To do that, our portfolio managers and our worldwide team of research analysts
spend extensive time visiting with companies, talking to their customers, and
investigating their competition. In fixed-income investing, we believe the
quality of our research gives us an advantage by helping us determine which
types of securities can add the most value to a fund and by helping us reduce
credit risk, which is the biggest danger to some higher-income bond funds. In
sum, MFS Original Research(R) is one of the most important factors in our
ongoing effort to deliver competitive performance to you, our investors.
We appreciate your confidence and welcome any questions or comments
you may have.
Respectfully,
/s/ Jeffrey L. Shames
Jeffrey L. Shames
Chairman and Chief Executive Officer
MFS Investment Management(R)
May 18, 2000
--------------
(1) 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.
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
[Photo of Robert J. Manning]
Robert J. Manning
Dear Shareholders,
For the six months ended April 30, 2000, the Trust provided a total return of
-13.15% based on its beginning and ending stock market prices and assuming the
reinvestment of any distributions paid during the period. The Trust's total
return based on its net asset value (NAV) was 6.34%. During the same period,
the Lehman Brothers High Yield Bond Index, an unmanaged index of below
investment-grade corporate debt, returned 0.08%.
During the period, the Trust continued to maintain a distribution rate of 11%
based on its original New York Stock Exchange (NYSE) offering price of $15 per
share. These distributions were paid through a combination of income earned
from dividends, bond coupon payments, and both short-term and long-term
capital gains.
As of April 30, 2000, approximately 47% of the portfolio was invested in
high-yield and distressed debt and 45% was invested in common stocks.
Our bond holdings included many exciting telecommunications companies that
have been benefiting from global deregulation of long distance and local
telephone service as well as from strong demand driven by the growth of the
Internet. Two examples are Tele1 Europe, which is building a fiber-optic
telecom network throughout Scandinavia, and Completel, which is focused on the
major cities in France.
On the equity side, we hold shares in many turnaround situations that we
believe may generate substantial returns as the markets in which these
companies compete experience improved fundamentals. An example is BE
Aerospace, the world's largest manufacturer of airline seating and other
interior components used to build and renovate commercial aircrafts.
Our strategy continues to be to focus on bottom-up, company-by-company
research. We believe our value-oriented style of investing allows us to find
interesting opportunities in both the equity and corporate-debt markets.
Respectfully,
/s/ Robert J. Manning
Robert J. Manning
Portfolio Manager
The opinions expressed in this report are those of the portfolio manager and
are current only through the end of the period of the report as stated on the
cover. The manager's 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.
The portfolio is actively managed, and current holdings may be different.
<PAGE>
--------------------------------------------------------------------------------
PORTFOLIO MANAGER'S PROFILE
--------------------------------------------------------------------------------
ROBERT J. MANNING IS SENIOR VICE PRESIDENT, CHIEF FIXED INCOME
STRATEGIST, AND DIRECTOR OF FIXED INCOME RESEARCH OF MFS INVESTMENT
MANAGEMENT(R). HE IS PORTFOLIO MANAGER OF MFS(R) HIGH INCOME FUND,
MFS(R) HIGH YIELD OPPORTUNITIES FUND, AND MFS(R) SPECIAL VALUE TRUST, A
CLOSED-END FUND.
MR. MANNING JOINED MFS IN 1984 AS A RESEARCH ANALYST IN THE HIGH YIELD
BOND DEPARTMENT. HE WAS NAMED VICE PRESIDENT IN 1988, PORTFOLIO MANAGER
IN 1992, SENIOR VICE PRESIDENT IN 1993, AND CHIEF FIXED INCOME
STRATEGIST AND DIRECTOR OF FIXED INCOME RESEARCH IN 1999. HE IS A
GRADUATE OF THE UNIVERSITY OF LOWELL AND EARNED A MASTER OF SCIENCE
DEGREE IN FINANCE FROM BOSTON COLLEGE.
ALL PORTFOLIO MANAGERS AT MFS INVESTMENT MANAGEMENT(R) 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.
--------------------------------------------------------------------------------
In accordance with Section 23(c) of the Investment Company Act of 1940, the
Trust hereby gives notice that it may from time to time repurchase shares of
the Trust in the open market at the option of the Board of Trustees and on
such terms as the Trustees shall determine.
<PAGE>
OBJECTIVE: To maintain an annual distribution rate of 11% based on the
original offering price, while also seeking opportunities for capital
appreciation
NEW YORK STOCK EXCHANGE SYMBOL: MFV
--------------------------------------------------------------------------------
PERFORMANCE SUMMARY
--------------------------------------------------------------------------------
For the six months ended April 30, 2000
NET ASSET VALUE PER SHARE
October 31, 1999 $14.34
April 30, 2000 $13.87
NEW YORK STOCK EXCHANGE PRICE
October 31, 1999 $16.75
November 2, 1999 (high)* $16.75
April 14, 2000 (low)* $13.00
April 30, 2000 $13.25
*For the six months ended April 30, 2000
--------------------------------------------------------------------------------
NUMBER OF SHAREHOLDERS
As of April 30, 2000, our records indicate that there are 928 registered
shareholders and approximately 5,700 shareholders owning Trust
shares in "street" name, such as through brokers, banks, and other
financial intermediaries.
If you are a "street" name shareholder and wish to directly receive our
reports, which contain important information about the Trust, please write or
call:
State Street Bank and Trust Company
P.O. Box 8200
Boston, MA 02266-8200
1-800-637-2304
<PAGE>
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
MFS offers a Dividend Reinvestment and Cash Purchase Plan that allows you to
reinvest either all of the distributions paid by the Trust or only the long-
term capital gains. Purchases are made at the market price unless that price
exceeds the net asset value (the shares are trading at a premium). If the
shares are trading at a premium, purchases will be made at a discounted price
of either the net asset value or 95% of the market price, whichever is
greater. Twice each year you can also buy shares. Investments from $100 to
$500 can be made in January and July on the 15th of the month or
shortly thereafter.
If your shares are in the name of a brokerage firm, bank, or other nominee,
you can ask the firm or nominee to participate in the Plan on your behalf.
If the nominee does not offer the Plan, you may wish to request that your
shares be re-registered in your own name so that you can participate.
There is no service charge to reinvest distributions, nor are there brokerage
charges for shares issued directly by the Trust. However, when shares are
bought on the New York Stock Exchange or otherwise on the open market, each
participant pays a pro rata share of the commissions. A service fee of $0.75
is charged for each cash purchase as well as a pro rata share of the brokerage
commissions. The automatic reinvestment of distributions does not relieve you
of any income tax that may be payable (or required to be withheld) on the
distributions.
To enroll in or withdraw from the Plan, or if you have any questions, call
1-800-637-2304 any business day from 8 a.m. to 8 p.m. Eastern time. Please
have available the name of the Trust and your account and Social Security
numbers. For certain types of registrations, such as corporate accounts,
instructions must be submitted in writing. Please call for additional details.
When you withdraw, you can receive the value of the reinvested shares in one
of two ways: a check for the value of the full and fractional shares, or a
certificate for the full shares and a check for the fractional shares.
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS (Unaudited) -- April 30, 2000
Bonds - 46.1%
------------------------------------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
ISSUER (000 OMITTED) VALUE
------------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. Bonds - 34.0%
Broadcasting - 2.4%
Spectrasite Holdings, Inc. 0s to 2004, 11.25s to 2009## $ 1,000 $ 550,000
United Global Com, Inc. 0s to 2003, 10.75s to 2008 2,435 1,607,100
-----------
$ 2,157,100
------------------------------------------------------------------------------------------------------
Chemicals - 2.6%
Applied Extrusion Technologies, Inc., 11.5s, 2002 $ 950 $ 952,375
Sterling Chemicals, Inc. 0s to 2001, 13.5s to 2008 1,100 511,500
Sterling Chemicals, Inc., 11.25s, 2007 1,000 860,000
-----------
$ 2,323,875
------------------------------------------------------------------------------------------------------
Construction Services - 1.0%
Formica Corp., 10.875s, 2009## $ 1,000 $ 860,000
------------------------------------------------------------------------------------------------------
Consumer Goods and Services - 1.9%
General Binding Corp., 9.375s, 2008 $ 1,000 $ 510,000
Revlon Consumer Products Corp., 8.125s, 2006 465 332,475
Samsonite Corp., 10.75s, 2008 1,000 845,000
-----------
$ 1,687,475
------------------------------------------------------------------------------------------------------
Containers - 2.7%
Gaylord Container Corp., 9.875s, 2008 $ 1,900 $ 1,482,000
Riverwood International Corp., 10.875s, 2008 1,000 950,000
-----------
$ 2,432,000
------------------------------------------------------------------------------------------------------
Corporate Asset Backed - 0.5%
Morgan Stanley Capital, Inc., 7.781s, 2010 $ 670 $ 490,069
------------------------------------------------------------------------------------------------------
Energy - 2.9%
Cheasapeake Energy Corp., 9.625s, 2005 $ 1,000 $ 965,000
Continental Resources, Inc., 10.25s, 2008 750 663,750
Forest Oil Corp., 10.5s, 2006 920 933,800
-----------
$ 2,562,550
------------------------------------------------------------------------------------------------------
Forest and Paper Products - 1.0%
U.S. Timberlands Co., L.P., 9.625s, 2007 $ 1,000 $ 880,000
------------------------------------------------------------------------------------------------------
Gaming and Hotels - 1.3%
Santa Fe Hotel, Inc., 11s, 2000 $ 1,200 $ 1,170,000
------------------------------------------------------------------------------------------------------
Industrial - 4.0%
Haynes International, Inc., 11.625s, 2004 $ 1,000 $ 550,000
Metallurg Holdings, Inc. 0s to 2003, 12.75s to 2008 2,600 676,000
Numatics, Inc., 9.625s, 2008 1,000 790,000
Simonds Industries, Inc., 10.25s, 2008 1,000 720,000
Thermadyne Manufacturing/Capital Corp., 9.875s, 2008 985 797,850
-----------
$ 3,533,850
------------------------------------------------------------------------------------------------------
Media - 3.1%
Golden Books Publishing, Inc., 10.75s, 2004 $ 1,090 $ 654,240
Sirius Satellite Radio, Inc., 14.5s, 2009## 900 839,250
Telemundo Holdings, Inc. 0s to 2003, 11.5s to 2008 2,000 1,270,000
-----------
$ 2,763,490
------------------------------------------------------------------------------------------------------
Metals and Minerals - 2.1%
Doe Run Resources Corp., 11.25s, 2005 $ 750 $ 337,500
Kaiser Aluminum & Chemical Corp., 12.75s, 2003 450 425,250
Metal Management, Inc., 10s, 2008 1,500 1,095,000
-----------
$ 1,857,750
------------------------------------------------------------------------------------------------------
Retail - 1.0%
J. Crew Group, Inc. 0s to 2002, 13.125s to 2008 $ 1,675 $ 921,250
------------------------------------------------------------------------------------------------------
Steel - 1.6%
Northwestern Steel & Wire Co., 9.5s, 2001 $ 1,425 $ 644,812
Renco Steel Holdings, Inc., 10.875s, 2005 925 814,000
-----------
$ 1,458,812
------------------------------------------------------------------------------------------------------
Supermarkets - 0.4%
Jitney-Jungle Stores of America, Inc., 12s, 2006+ $ 1,500 $ 330,000
Penn Traffic Co., 11s, 2009 9 7,811
-----------
$ 337,811
------------------------------------------------------------------------------------------------------
Telecommunications - 2.3%
AMSC Acquisition Co., Inc., 12.25s, 2008 $ 845 $ 633,750
McCaw International Ltd. 0s to 2002, 13s to 2007 725 514,750
NTL Communications Corp. 0s to 2003, 12.375s to 2006## 1,400 917,000
-----------
$ 2,065,500
------------------------------------------------------------------------------------------------------
Telecom - Wireless - 2.8%
DTI Holdings, Inc. 0s to 2003, 12.5s to 2008 $ 2,000 $ 900,000
Leap Wireless International, Inc., 14.5s, 2010## 2,000 940,000
Metricom, Inc., 13s, 2010 775 636,469
-----------
$ 2,476,469
------------------------------------------------------------------------------------------------------
Utilities - Electric - 0.4%
International Utility Structures, Inc., 10.75s, 2008 $ 475 $ 394,250
------------------------------------------------------------------------------------------------------
Total U.S. Bonds $30,372,251
------------------------------------------------------------------------------------------------------
Foreign Bonds - 12.1%
Algeria - 0.9%
Algerian Repurchase Loan Agreement, 1s, 2010 JPY 156,200 $ 838,930
------------------------------------------------------------------------------------------------------
Greece - 0.7%
Fage Dairy Industries S.A., 9s, 2007 (Food and
Beverage Products) $ 750 $ 622,500
------------------------------------------------------------------------------------------------------
Luxembourg - 1.5%
Millicom International Cellular Communications Corp.
0s to 2001, 13.50s to 2006 (Telecommunications) $ 1,000 $ 845,000
PTC International Finance B.V., 11.25s, 2009
(Telecommunications)## 500 520,000
-----------
$ 1,365,000
------------------------------------------------------------------------------------------------------
Mexico - 0.9%
Satelites Mexicanos S.A. de CV, 10.125s, 2004
(Telecommunications) $ 1,000 $ 750,000
------------------------------------------------------------------------------------------------------
Netherlands - 1.1%
Completel Europe N.V., 0s to 2004, 14s to 2009
(Telecommunications) $ 2,000 $ 1,000,000
------------------------------------------------------------------------------------------------------
Russia - 1.6%
Vnesheconombank, 6.906s, 2020 (Banks and Credit
Companies)+** $ 5,240 $ 1,427,900
------------------------------------------------------------------------------------------------------
Sweden - 1.2%
Tele 1 Europe B.V., 13s, 2009 (Telecommunications) $ 1,000 $ 1,025,000
------------------------------------------------------------------------------------------------------
United Kingdom - 4.2%
Dialog Corp. PLC, 11s, 2007 (Telecommunications) $ 725 $ 725,000
Dolphin Telecom PLC, 0s to 2003, 11.50s to 2008
(Telecommunications) 750 240,000
Esat Telecom Group PLC, 11.875s, 2008
(Telecommunications) 650 747,110
Jazztel PLC, 14s, 2009 (Telecommunications) 1,000 1,000,000
Ono Finance PLC, 13s, 2009 (Telecommunications) 1,000 1,040,000
-----------
$ 3,752,110
------------------------------------------------------------------------------------------------------
Total Foreign Bonds $10,781,440
------------------------------------------------------------------------------------------------------
Total Bonds (Identified Cost, $41,148,165) $41,153,691
------------------------------------------------------------------------------------------------------
Stocks - 44.0%
------------------------------------------------------------------------------------------------------
SHARES
------------------------------------------------------------------------------------------------------
U.S. Stocks - 35.4%
Aerospace - 1.7%
B.E. Aerospace, Inc.* 80,200 $ 591,475
Moog, Inc., "A"* 39,750 936,609
-----------
$ 1,528,084
------------------------------------------------------------------------------------------------------
Building - 2.7%
Associate Materials, Inc. 70,000 $ 1,190,000
Atlantic Gulf Communities Corp.+* 250 37
Nortek, Inc.* 18,400 381,800
Walter Industries, Inc.* 79,600 850,725
-----------
$ 2,422,562
------------------------------------------------------------------------------------------------------
Chemicals - 1.9%
Applied Extrusion Technologies, Inc.* 57,500 $ 413,281
NL Industries, Inc. 80,500 1,308,125
-----------
$ 1,721,406
------------------------------------------------------------------------------------------------------
Conglomerates - 10.9%
MAXXAM, Inc.* 23,000 $ 621,000
Tyco International Ltd. 198,512 9,119,145
-----------
$ 9,740,145
------------------------------------------------------------------------------------------------------
Consumer Goods and Services - 1.6%
Westpoint Stevens, Inc., "A"* 75,500 $ 1,415,625
------------------------------------------------------------------------------------------------------
Containers - 2.3%
Atlantis Plastics, Inc.* 116,550 $ 932,400
Gaylord Container Corp.* 226,000 1,158,250
-----------
$ 2,090,650
------------------------------------------------------------------------------------------------------
Electrical Equipment - 2.5%
GTECH Holdings Corp.* 40,450 $ 839,338
Mark IV Industries, Inc 64,000 1,356,000
-----------
$ 2,195,338
------------------------------------------------------------------------------------------------------
Machinery - 0.1%
Thermadyne Holdings Corp.* 7,554 $ 94,425
------------------------------------------------------------------------------------------------------
Media - 0.3%
Cumulus Media, Inc.* 21,000 $ 275,625
------------------------------------------------------------------------------------------------------
Photographic Products - 1.5%
Anacomp, Inc.* 108,663 $ 1,317,539
------------------------------------------------------------------------------------------------------
Printing and Publishing - 0.1%
Golden Books Family Entertainment, Inc.* 53,266 $ 79,899
------------------------------------------------------------------------------------------------------
Retail - 0.4%
Musicland Stores Corp.* 50,000 $ 375,000
------------------------------------------------------------------------------------------------------
Supermarkets - 1.5%
Ingles Markets, Inc., "A" 88,300 $ 883,000
Marsh Supermarkets 42,700 427,000
-----------
$ 1,310,000
------------------------------------------------------------------------------------------------------
Telecommunications - 5.7%
Adelphia Business Solutions, Inc.* 40,000 $ 1,400,000
Commonwealth Telephone Enterprises, Inc.* 35,133 1,706,146
Crown Castle International Corp.* 26,000 997,750
PSINet, Inc.* 41,600 964,600
-----------
$ 5,068,496
------------------------------------------------------------------------------------------------------
Utilities - Electric - 2.2%
El Paso Electric Co.* 179,700 $ 1,987,931
------------------------------------------------------------------------------------------------------
Total U.S. Stocks $31,622,725
------------------------------------------------------------------------------------------------------
Foreign Stocks - 8.6%
Bermuda - 1.3%
RSL Communications, Ltd., "A" (Telecommunications)* 83,300 $ 1,160,994
------------------------------------------------------------------------------------------------------
Canada - 0.9%
Gulf Canada Resources Ltd. (Oil Services)* 106,500 $ 439,313
International Utility Structures Inc. (Utilities - Electric)* 254,700 326,891
-----------
$ 766,204
------------------------------------------------------------------------------------------------------
Netherlands - 1.7%
Completel Holdings LLC, (Telecommunications)*## 20,000 $ 1,500,000
------------------------------------------------------------------------------------------------------
Sweden - 0.3%
Tele1 Europe Holding AB, ADR (Telecommunications)* 17,612 $ 272,986
------------------------------------------------------------------------------------------------------
United Kingdom - 4.4%
News Corp. Ltd., ADR (Entertainment) 90,217 $ 3,969,548
------------------------------------------------------------------------------------------------------
Total Foreign Stocks $ 7,669,732
------------------------------------------------------------------------------------------------------
Total Stocks (Identified Cost, $29,904,882) $39,292,457
------------------------------------------------------------------------------------------------------
Preferred Stocks - 4.9%
------------------------------------------------------------------------------------------------------
Consumer Goods and Services
Renaissance Cosmetics, Inc., 14%* 1,266 $ 0
------------------------------------------------------------------------------------------------------
Media - 1.3%
Paxon Communications Corp., 13.25% 114 $ 1,171,350
------------------------------------------------------------------------------------------------------
Supermarkets - 0.2%
Supermarkets General Holdings Corp.* 70,015 $ 170,661
------------------------------------------------------------------------------------------------------
Telecommunications - 3.4%
Crown Castle International Corp., 12.75% 1,097 $ 1,086,030
Global Crossings Holdings Ltd., 10.50% 10,000 1,000,000
Nextel Communications, Inc., 11.125% 1,030 988,800
-----------
$ 3,074,830
------------------------------------------------------------------------------------------------------
Total Preferred Stocks (Identified Cost, $6,645,637) $ 4,416,841
------------------------------------------------------------------------------------------------------
Warrants - 1.3%
U.S. Warrants - 0.3%
DTI Holdings, Inc. (Telecommunications)* 10,000 $ 100
Metricom, Inc. (Telecommunications)* 775 15,500
Motient Corp. (Telecommunications)*## 845 63,375
Renaissance Cosmetics, Inc. (Consumer Goods and Services)* 1,024 0
Sirius Satellite Radio, Inc. (Media)* 2,700 189,000
------------------------------------------------------------------------------------------------------
Total U.S. Warrants $ 267,975
------------------------------------------------------------------------------------------------------
Foreign Warrants - 1.0%
United Kingdom - 1.0%
Jazztel PLC (Telecommunications)*## 5,000 $ 790,000
Ono Finance PLC (Telecommunications)* 1,000 150,000
------------------------------------------------------------------------------------------------------
Total Foreign Warrants $ 940,000
------------------------------------------------------------------------------------------------------
Total Warrants (Identified Cost, $501,232) $ 1,207,975
------------------------------------------------------------------------------------------------------
Repurchase Agreement - 1.4%
------------------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT
(000 OMITTED)
------------------------------------------------------------------------------------------------------
Investments in Repurchase Agreement with Merrill Lynch,
in a joint trading account ($199,021,000), dated
04/28/00, due 05/01/00, total to be received
$199,116,033 collateralized by various U.S. Treasury
obligations (with $199,021,000 par and value at
$203,003,363), at Cost $ 1,257 $ 1,257,000
------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $79,456,916) $87,327,964
Other Assets, Less Liabilities - 2.3% 2,015,820
------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $89,343,784
------------------------------------------------------------------------------------------------------
* Non-income producing security.
## SEC Rule 144A restriction.
+ Restricted security.
Abbreviations have been used throughout this report to indicate amounts shown in currencies other than
the U.S. dollar. The abbreviation is shown below:
JPY = Japanese Yen
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS
Statement of Assets and Liabilities (Unaudited)
----------------------------------------------------------------------------------------------------
APRIL 30, 2000
----------------------------------------------------------------------------------------------------
<S> <C>
Assets:
Investments, at value (identified cost, $79,456,916) $ 87,327,964
Investment of cash collateral for securities loaned, at value
(identified cost, $15,312,229) 15,312,229
Cash 130,052
Net receivable for forward foreign currency exchange
contracts subject to master netting arrangements 32,797
Receivable for investments sold 1,682,812
Interest and dividends receivable 1,045,057
Other assets 1,110
------------
Total assets $105,532,021
------------
Liabilities:
Payable to dividend disbursing agent $ 96,001
Payable for investments purchased 580,250
Collateral for securities loaned, at value 15,312,229
Payable to affiliates -
Management fee 6,818
Administrative fee 127
Accrued expenses and other liabilities 192,812
------------
Total liabilities $ 16,188,237
------------
Net assets $ 89,343,784
============
Net assets consist of:
Paid-in capital $ 80,600,441
Unrealized appreciation on investments and translation of assets and
liabilities in foreign currencies 7,903,799
Accumulated undistributed net realized gain on
investments and foreign currency transactions 1,531,981
Accumulated distributions in excess of net investment income (692,437)
------------
Total $ 89,343,784
============
Shares of beneficial interest outstanding 6,439,215
=========
Net asset value per share (net assets / shares of beneficial interest outstanding) $13.87
======
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS -- continued
Statement of Operations (Unaudited)
--------------------------------------------------------------------------------------------
APRIL 30, 2000
--------------------------------------------------------------------------------------------
<S> <C>
Net investment income:
Interest $3,381,171
Dividends 170,321
Foreign taxes withheld (2,402)
----------
Total investment income $3,549,090
----------
Expenses -
Management fee $ 424,286
Trustees' compensation 55,459
Administrative fee 5,046
Transfer and dividend disbursing agent fee 9,837
Custodian fee 25,321
Printing 12,814
Postage 2,233
Auditing fees 9,396
Miscellaneous 42,507
----------
Total expenses $ 586,899
Fees paid indirectly (22,677)
----------
Net expenses $ 564,222
----------
Net investment income $2,984,868
----------
Realized and unrealized gain on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $3,281,945
Securities sold short (1,033)
Foreign currency transactions (2,197)
----------
Net realized gain on investments and foreign currency transactions $3,278,715
----------
Change in unrealized appreciation (depreciation) -
Investments $ (770,803)
Translation of assets and liabilities in foreign currencies 32,752
----------
Net unrealized loss on investments and foreign currency translation $ (738,051)
----------
Net realized and unrealized gain on investments and foreign currency $2,540,664
----------
Increase in net assets from operations $5,525,532
==========
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS -- continued
Statement of Changes in Net Assets
<CAPTION>
-------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED
APRIL 30, 2000 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1999
-------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 2,984,868 $ 3,648,790
Net realized gain on investments and foreign currency
transactions 3,278,715 10,041,563
Net unrealized gain (loss) on investments and foreign
currency translation (738,051) 369,007
----------- ------------
Increase in net assets from operations $ 5,525,532 $ 14,059,360
----------- ------------
Distributions declared to shareholders -
From net investment income $(2,984,868) $(3,648,790)
From net realized gain on investments and foreign currency
transactions (5,517,162) (6,324,253)
In excess of net investment income -- (516,404)
----------- ------------
Total distributions declared to shareholders $(8,502,030) $(10,489,447)
----------- ------------
Trust share (principal) transactions -
Net asset value of shares issued to shareholders in
reinvestment of distributions $ 717,702 $ 1,095,841
----------- ------------
Total increase (decrease) in net assets $(2,258,796) $ 4,665,754
----------- ------------
Net assets:
At beginning of period 91,602,580 86,936,826
----------- ------------
At end of period (including accumulated distributions in
excess of net investment income of $692,437 and
$692,437, respectively) $89,343,784 $ 91,602,580
=========== ============
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS -- continued
Financial Highlights
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
SIX MONTHS ENDED ---------------------------------------------------------------
APRIL 30, 2000 1999 1998 1997 1996 1995
(UNAUDITED)
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per share data (for a share outstanding
throughout each period):
Net asset value - beginning of period $ 14.34 $ 13.76 $ 15.03 $ 15.23 $ 13.93 $ 13.40
------- ------- ------- ------- ------- -------
Income from investment operations# -
Net investment income $ 0.46 $ 0.57 $ 0.04 $ 0.11 $ 0.13 $ 0.20
Net realized and unrealized gain on
investments and foreign currency 0.39 1.66 1.01 2.66 2.82 2.18
------- ------- ------- ------- ------- -------
Total from investment operations $ 0.85 $ 2.23 $ 1.05 $ 2.77 $ 2.95 $ 2.38
------- ------- ------- ------- ------- -------
Less distributions declared to shareholders -
From net investment income $ (0.46) $ (0.57) $ (0.04) $ (0.10) $ (0.13) $ (0.20)
From net realized gain on investments and
foreign currency transactions (0.86) (1.00) (2.28) (2.87) (1.52) (1.14)
In excess of net investment income -- (0.08) -- -- -- (0.01)
From paid in capital -- -- -- -- -- (0.50)
------- ------- ------- ------- ------- -------
Total distributions declared to
shareholders $ (1.32) $ (1.65) $ (2.32) $ (2.97) $ (1.65) $ (1.85)
------- ------- ------- ------- ------- -------
Net asset value - end of period $ 13.87 $ 14.34 $ 13.76 $ 15.03 $ 15.23 $ 13.93
------- ------- ------- ------- ------- -------
Per share market value - end of period $13.250 $16.750 $16.750 $19.000 $18.250 $16.500
======= ======= ======= ======= ======= =======
Total return (13.15)%++ 11.08% 0.26% 23.29% 22.20% 26.06%
Ratios (to average net assets)/
Supplemental data:
Expenses## 1.29%+ 1.23% 1.10% 1.12% 1.14% 1.26%
Net investment income 6.58%+ 3.79% 0.26% 0.72% 0.85% 1.52%
Portfolio turnover 19% 137% 85% 119% 96% 92%
Net assets at end of period (000 Omitted) $89,344 $91,603 $86,937 $93,665 $93,161 $84,243
+ Annualized.
++ Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset arrangements.
See notes to financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
(1) Business and Organization
MFS Special Value Trust (the Trust) is organized as a Massachusetts business
trust and is registered under the Investment Company Act of 1940, as amended,
as a closed-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 Trust
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. The Trust can invest in high-yield
securities rated below investment grade. Investments in high-yield securities
involve greater degrees of credit and market risk than investments in higher-
rated securities and tend to be more sensitive to economic conditions.
Investment Valuations - Debt securities (other than short-term obligations
which mature in 60 days or less), including listed issues, and forward
contracts, are valued on the basis of valuations furnished by dealers or by a
pricing service with consideration to factors such as institutional-size
trading in similar groups of securities, yield, quality, coupon rate,
maturity, type of issue, trading characteristics, and other market data,
without exclusive reliance upon exchange or over-the-counter prices. 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.
Repurchase Agreements - The Trust may enter into repurchase agreements with
institutions that the Trust's investment adviser has determined are
creditworthy. Each repurchase agreement is recorded at cost. The Trust
requires that the securities used as collateral in a repurchase transaction be
transferred to the custodian in a manner sufficient to enable the Trust to
obtain those securities in the event of a default under the repurchase
agreement. The Trust monitors, on a daily basis, the value of the collateral
to ensure that its value, including accrued interest, is greater than amounts
owed to the Trust under each such repurchase agreement. The Trust, along with
other affiliated entities of Massachusetts Financial Services Company (MFS),
may utilize a joint trading account for the purpose of entering into one or
more repurchase agreements.
Foreign Currency Translation - Investment valuations, other assets, and
liabilities initially expressed in foreign currencies are converted each
business day into U.S. dollars based upon current exchange rates. Purchases
and sales of foreign investments, income, and expenses are converted into U.S.
dollars based upon currency exchange rates prevailing on the respective dates
of such transactions. Gains and losses attributable to foreign currency
exchange rates on sales of securities are recorded for financial statement
purposes as net realized gains and losses on investments. Gains and losses
attributable to foreign exchange rate movements on income and expenses are
recorded for financial statement purposes as foreign currency transaction
gains and losses. That portion of both realized and unrealized gains and
losses on investments that results from fluctuations in foreign currency
exchange rates is not separately disclosed.
Deferred Trustee Compensation - Effective July 24, 1999, under a Deferred
Compensation Plan (the Plan) independent Trustees may elect to defer receipt
of all or a portion of their annual compensation. Deferred amounts are treated
as though equivalent dollar amounts had been invested in shares of the fund or
other MFS funds selected by the Trustee. Deferred amounts represent an
unsecured obligation of the fund until distributed in accordance with the
Plan.
Security Loans - State Street Bank and Trust Company ("State Street") and
Chase Manhattan Bank ("Chase"), as lending agents, may loan the securities of
the Trust to certain qualified institutions (the "Borrowers") approved by the
Trust. The loans are collateralized at all times by cash or U.S. Treasury
securities in an amount at least equal to the market value of the securities
loaned. State Street and Chase provide the Trust with indemnification against
Borrower default. The Trust 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 Trust and the lending agent. On loans
collateralized by U.S. Treasury securities, a fee is received from the
Borrower, and is allocated between the Trust and the lending agent. Income
from securities lending is included in interest income on the Statement of
Operations. The dividend and interest income earned on the securities loaned
is accounted for in the same manner as other dividend and interest income.
At April 30, 2000, the value of securities loaned was $14,807,197. These loans
were collateralized by cash of $15,312,229, which was invested in the
following short-term obligation:
IDENTIFIED
COST AND
SHARES VALUE
-----------------------------------------------------------------------------
Navigator Securities Lending Prime Portfolio 15,312,229 $15,312,229
Forward Foreign Currency Exchange Contracts - The Trust may enter into forward
foreign currency exchange contracts for the purchase or sale of a specific
foreign currency at a fixed price on a future date. Risks may arise upon
entering into these contracts from the potential inability of counterparties
to meet the terms of their contracts and from unanticipated movements in the
value of a foreign currency relative to the U.S. dollar. The Trust may enter
into forward contracts for hedging purposes as well as for non-hedging
purposes. For hedging purposes, the Trust may enter into contracts to deliver
or receive foreign currency it will receive from or require for its normal
investment activities. The Trust may also use contracts in a manner intended
to protect foreign currency-denominated securities from declines in value due
to unfavorable exchange rate movements. For non-hedging purposes, the Trust
may enter into contracts with the intent of changing the relative exposure of
the Trust's portfolio of securities to different currencies to take advantage
of anticipated changes. The forward foreign currency exchange contracts are
adjusted by the daily exchange rate of the underlying currency and any gains
or losses are recorded as unrealized until the contract settlement date. On
contract settlement date, the gains or losses are recorded as realized gains
or losses on foreign currency transactions.
Short Sales - The Trust may enter into short sales. A short sale transaction
involves selling a security which the Trust does not own with the intent of
purchasing it later at a lower price. The Trust will realize a gain if the
security price decreases and a loss if the security price increases between
the date of the short sale and the date on which the Trust must replace the
borrowed security. Losses can exceed the proceeds from short sales and can be
greater than losses from the actual purchase of a security. The amount of any
gain will be decreased, and the amount of any loss increased, by the amount of
the premium, dividends, or interest the Trust may be required to pay in
connection with a short sale. Whenever the Trust engages in short sales, its
custodian segregates cash or marketable securities in an amount that, when
combined with the amount of proceeds from the short sale deposited with the
broker, at least equals the current market value of the security sold short.
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. The Trust uses the effective
interest method for reporting interest income on payment-in-kind (PIK) bonds.
Legal fees and other related expenses incurred to preserve and protect the value
of a security owned are added to the cost of the security; other legal fees are
expensed. Capital infusions made directly to the security issuer, which are
generally non-recurring, incurred to protect or enhance the value of high-yield
debt securities, are reported as additions to the cost basis of the security.
Costs that are incurred to negotiate the terms or conditions of capital
infusions or that are expected to result in a plan of reorganization are
reported as realized losses. Ongoing costs incurred to protect or enhance an
investment, or costs incurred to pursue other claims or legal actions, are
expensed.
Fees Paid Indirectly - The Trust's custody fee is reduced according to an
arrangement that measures the value of cash deposited with the custodian by
the Trust. This amount is shown as a reduction of total expenses on the
Statement of Operations.
Tax Matters and Distributions - The Trust'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 Trust
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.
(3) Transactions with Affiliates
Investment Adviser - The Trust has an investment advisory agreement with
Massachusetts Financial Services Company (MFS) to provide overall investment
advisory and administrative services, and general office facilities.
The management fee is computed daily and paid monthly at an annual rate of
0.68% of the Trust's average daily net assets and 3.40% of investment income.
The Trust pays no compensation directly to its Trustees who are officers of
the investment adviser, or to officers of the Trust, all of whom receive
remuneration for their services to the Trust from MFS. Certain officers and
Trustees of the Trust are officers or directors of MFS, and MFS Service
Center, Inc. (MFSC). The Trust 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 $38,010 for the six months ended April 30,
2000.
Administrator - The Trust has an administrative services agreement with MFS to
provide the Trust with certain financial, legal, shareholder servicing,
compliance, and other administrative services. As a partial reimbursement for
the cost of providing these services, the Trust incurs an administrative fee
at the following annual percentages of the Trust'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%
Transfer Agent - MFSC acts as registrar and dividend disbursing agent for the
Trust. The agreement provides that the Trust will pay MFSC an account
maintenance fee of no more than $9.00 and a dividend services fee of $0.75 per
reinvestment and will reimburse MFSC for reasonable out-of-pocket expenses.
(4) Portfolio Securities
Purchases and sales of investments, other than U.S. government securities,
purchased option transactions, and short-term obligations, aggregated
$16,738,092 and $22,643,185, 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 $ 79,456,916
------------
Gross unrealized appreciation $ 21,613,145
Gross unrealized depreciation (13,742,097)
------------
Net unrealized appreciation $ 7,871,048
============
(5) Shares of Beneficial Interest
The Trust'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:
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2000 OCTOBER 31, 1999
-------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
--------------------------------------------------------------------------------
Shares issued to shareholders
in reinvestment of
distributions 49,978 $717,702 70,078 $1,095,841
------ -------- ------ ----------
(6) Line of Credit
The Trust 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 Trust for the six
months ended April 30, 2000, was $276. The Trust had no significant borrowings
during the period.
(7) Financial Instruments
The Trust trades financial instruments with off-balance-sheet risk in the
normal course of its investing activities in order to manage exposure to
market risks such as interest rates and foreign currency exchange rates. These
financial instruments include forward foreign currency exchange contracts. The
notional or contractual amounts of these instruments represent the investment
the Trust has in particular classes of financial instruments and does not
necessarily represent the amounts potentially subject to risk. The measurement
of the risks associated with these instruments is meaningful only when all
related and offsetting transactions are considered.
Forward Foreign Currency Exchange Contracts - At April 30, 2000, forward
foreign currency purchases and sales under master netting agreements amounted
to a net receivable of $32,797 with Merrill Lynch.
At April 30, 2000, the Trust had sufficient cash and/or securities to cover
any commitments under these contracts.
(8) Restricted Securities
The Trust may invest not more than 20% of its net assets in securities which
are subject to legal or contractual restrictions on resale. At April 30, 2000,
the Trust owned the following restricted securities, excluding securities
issued under Rule 144A, constituting 1.97% of net assets which may not be
publicly sold without registration under the Securities Act of 1933. The Trust
does not have the right to demand that such securities be registered. The
value of these securities is determined by valuations furnished by dealers or
by a pricing service, or if not available, in good faith, at fair value, by
the Trustees.
<TABLE>
<CAPTION>
SHARE/PAR
DESCRIPTION DATE OF ACQUISITION AMOUNT COST VALUE
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Atlantic Gulf Communities Corp. 3/20/92 - 9/25/95 250 $ -- $ 37
Jitney-Jungle Stores of America, Inc.,
12s, 2006 3/5/99 - 10/6/99 1,500,000 1,278,688 330,000
Vnesheconombank, 6.906s, 2020 5/24/99 5,240,000 437,693 1,427,900
----------
$1,757,937
==========
</TABLE>
<PAGE>
<TABLE>
MFS(R) SPECIAL VALUE TRUST
<S> <C>
TRUSTEES PORTFOLIO MANAGER
Robert J. Manning*
Richard B. Bailey+(2) - Private Investor;
Former Chairman and Director (until 1991), TREASURER
MFS Investment Management W. Thomas London*
Marshall N. Cohan+(1) - Private Investor ASSISTANT TREASURERS
Mark E. Bradley*
Lawrence H. Cohn, M.D.+(2) - Chief of Cardiac Ellen Moynihan*
Surgery, Brigham and Women's Hospital; James O. Yost*
Professor of Surgery, Harvard Medical School
SECRETARY
The Hon. Sir J. David Gibbons, KBE+ (2) - Chief Stephen E. Cavan*
Executive Officer, Edmund Gibbons Ltd.;
Chairman, Colonial Insurance Company, Ltd. ASSISTANT SECRETARY
James R. Bordewick, Jr.*
Abby M. O'Neill+(2) - Private Investor
TRANSFER AGENT, REGISTRAR, AND
Walter E. Robb, III+(1) - President and DIVIDEND DISBURSING AGENT
Treasurer, Benchmark Advisors, Inc. (corporate State Street Bank and Trust Company
financial consultants); President, Benchmark c/o MFS Service Center, Inc.
Consulting Group, Inc. (office services) P.O. Box 9024
Boston, MA 02205-9824
Arnold D. Scott* - Senior Executive Vice 1-800-637-2304
President, Director, and Secretary, MFS
Investment Management CUSTODIAN
State Street Bank and Trust Company
Jeffrey L. Shames* - Chairman and Chief
Executive Officer, MFS Investment Management INVESTMENT ADVISER
Massachusetts Financial
J. Dale Sherratt+(1) - President, Insight Services Company
Resources, Inc. (acquisition planning 500 Boylston Street
specialists) Boston, MA 02116-3741
Ward Smith+(1) - Former Chairman (until 1994),
NACCO Industries (holding company)
+ Independent Trustee
* MFS Investment Management
(1) Member of Audit Committee
(2) Member of Portfolio Trading Committee
</TABLE>
<PAGE>
MFS(R) SPECIAL VALUE TRUST ------------
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
MSVCE-3 06/00 12M
