<PAGE>
[LOGO: M F S SEMIANNUAL REPORT
THE FIRST NAME IN MUTUAL FUNDS] APRIL 30, 1995
MFS(R) WORLD EQUITY FUND
[GRAPHIC OMITTED: photo of window with 2 people talking]
<PAGE>
MFS(R) WORLD EQUITY FUND
<TABLE>
<S> <C>
TRUSTEES CUSTODIAN
A. Keith Brodkin* - Chairman and President State Street Bank and Trust Company
Richard B. Bailey* - Private Investor; INVESTOR INFORMATION
Former Chairman and Director (until 1991), For MFS stock and bond market outlooks,
Massachusetts Financial Services Company call toll free: 1-800-637-4458 anytime from
a touch-tone telephone.
Marshall N. Cohan - Private Investor
For information on MFS mutual funds,
Lawrence H. Cohn, M.D. - Chief of Cardiac Surgery, call your financial adviser or, for an
Brigham and Women's Hospital; Professor of information kit, call toll free:
Surgery, Harvard Medical School 1-800-637-2929 any business day from
9 a.m. to 5 p.m. Eastern time (or leave
The Hon. Sir J. David Gibbons, KBE - Chief a message anytime).
Executive Officer, Edmund Gibbons Ltd.;
Chairman, Bank of N.T. Butterfield & Son Ltd. INVESTOR SERVICE
MFS Service Center, Inc.
Abby M. O'Neill - Private Investor; P.O. Box 2281
Director, Rockefeller Financial Services, Inc. Boston, MA 02107-9906
(Investment Advisers)
For general information, call toll free:
Walter E. Robb, III - President and Treasurer, 1-800-225-2606 any business day from
Benchmark Advisors, Inc. (Corporate Financial 8 a.m. to 8 p.m. Eastern time.
Consultants)
For service to speech- or hearing-impaired,
Arnold D. Scott* - Senior Executive Vice President call toll free: 1-800-637-6576 any business
and Secretary, Massachusetts Financial Services day from 9 a.m. to 5 p.m. Eastern time.
Company (To use this service, your phone must be
equipped with a Telecommunications
Jeffrey L. Shames* - President, Massachusetts Device for the Deaf.)
Financial Services Company
For share prices, account balances and
J. Dale Sherratt - President, Insight Resources, Inc. exchanges, call toll free: 1-800-MFS-TALK
(Acquisition Planning Specialists) (1-800-637-8255) anytime from a touch-tone
telephone.
Ward Smith - Former Chairman (until 1994),
NACCO Industries; Director, Sundstrand
Corporation
INVESTMENT ADVISER
Massachusetts Financial Services Company
500 Boylston Street
Boston, Massachusetts 02116-3741 -------------------------------------------
TOP-RATED SERVICE
PORTFOLIO MANAGER [SEAL] MFS was rated first when securities
David Mannheim* firms evaluated the quality of
service they receive from 40
TREASURER mutual fund companies. MFS got
W. Thomas London* high marks for answering calls
quickly, processing transactions
ASSISTANT TREASURER accurately and sending statements
James O. Yost* out on time.
(Source: 1994 DALBAR Survey)
SECRETARY -------------------------------------------
Stephen E. Cavan*
ASSISTANT SECRETARY
James R. Bordewick, Jr.*
*Affiliated with the Investment Adviser
</TABLE>
<PAGE>
LETTER TO SHAREHOLDERS
Dear Shareholders:
During the six months ended April 30, 1995, all classes of shares of the Fund
experienced slightly negative total returns (including the reinvestment of
distributions but excluding the effects of any sales charges). Class A shares
had a total return of -0.01%, Class B shares -0.62%, and Class C shares
- -0.51%. These returns underperformed the +4.82% return produced by the Morgan
Stanley Capital International World Index (the MSCI), a broad, unmanaged index
of global equities. The primary reason for the Fund's underperformance was its
relative exposure to U.S. stocks. While the U.S. is the Fund's single largest
country exposure at 26% of net assets, it comprises 38% of the MSCI. During
the six months ended April 30, 1995, the U.S. stock market, as measured by the
Standard & Poor's 500 Composite Index, a popular, unmanaged index of common
stock performance, returned +10.46%, compared to a -6.10% return for the MSCI
when you exclude the U.S. (in local currency). A second factor contributing to
the Fund's underperformance was the weakness of the U.S. dollar over this
period. While the Fund did benefit from this weakness, its performance would
have been better if we had not hedged our currency exposure in several
European countries, notably Sweden and Spain. Over the long term, we believe
both of these factors should even out and, therefore, they should not serve as
a source of underperformance in the future.
U.S. Outlook
As the economy enters its fifth year of expansion, it is evidencing a
decidedly decelerating trend from its robust pace of 1994, when gross domestic
product expanded by 4.1%. Estimated growth in this year's first quarter
diminished to an annual rate of 2.8%. Consumer spending slowed considerably
during the quarter and was accompanied by a correspondingly large increase in
inventories. As we begin the year's second quarter, the evidence suggests that
the economy has entered a phase of less-than-full-potential growth, as the
April unemployment rate showed a second consecutive monthly increase. We
expect the economy to continue to grow at this more subdued pace. We do not
anticipate that the slowdown will deteriorate into a recession and,
conversely, we remain mindful of the potential for a reliquified consumer
sector to reassert itself as the year progresses.
Global Outlook
Economic recoveries in both Europe and Japan have been inhibited somewhat by
the yen's and deutsche mark's strengthening against the U.S. dollar.
Industrial companies in these export-led expansions are struggling to compete
in a global marketplace in which their products are less competitively priced.
At home, the consumer sectors in these economies have been impaired by
relatively high unemployment rates and by continued low growth in domestic
money supplies. The central banks of both Germany and Japan have recently
lowered interest rates in an effort to stimulate domestic demand as well as to
arrest the strength of their currencies against the dollar. Our view is that
these expansions remain intact, although at a somewhat sluggish pace, yielding
equity investment opportunities in steady earners as a result. While we view
emerging markets with caution, opportunities exist on a selected basis,
particularly at the more attractive prices resulting from sell-offs in many of
these markets last year. Recently, the dollar has stabilized in world currency
markets. Although we believe that over the long term the dollar continues to
represent a sound store of value, in the near term its relative strength may
be restrained by the large U.S. current-account deficit.
Stock Markets
The U.S. stock market has rebounded from its uninspiring performance during
1994, posting its strongest quarterly results in four years. Recently, stock
prices have responded to growing confidence that the Federal Reserve Board is
nearing the end of its tightening initiatives and that gains in corporate
earnings may remain substantial. Although we expect the economy to slow in
1995, our outlook for corporate earnings growth remains favorable.
Although the U.S. market has performed positively over the past six months,
most foreign stock markets have lagged. This has been due to uncertain economic
outlooks, volatile currencies and volatile interest rates. However, now that
interest rates in many markets appear to be moderating, we believe that
valuation levels are sustainable, and that corporate earnings growth should be
the key to future performance.
Portfolio Performance and Strategy
Currently, the Fund has investments in 18 countries, with 43% of holdings
invested in Europe, 31% in the Americas and 26% in Asia/Pacific. We continue
to adhere to our bottom-up approach to stock picking, focusing on quality
companies with superior growth prospects which are trading at attractive
valuations. Country weightings are merely a byproduct of where we believe the
most attractive investments are available. Since our last report on October
31, 1994, the Fund's weighting in the Americas has been reduced by 5% to 6%,
with roughly equal increases in Europe and Asia/Pacific. This change was
primarily the result of our eliminating our holdings in Mexico last December.
While we did not sell at the highs, we were fortunate to have sold our
positions in Mexican securities before the peso devaluation, which resulted in
a significant decline in that market. This is a good example of our investment
philosophy, as we are unlikely to have holdings in a country where
macroeconomic events, and not individual company fundamentals, determine stock
price performance.
During the past six months, we have continued to find more opportunities in
companies which we believe can generate sustainable earnings growth, regardless
of the state of the economy. As a result, we have reduced our holdings in
cyclical stocks in Europe and the U.S. Only in Japan, where the economy
continues to struggle, have we found more attractive investments in the cyclical
area. Examples of the types of steady earners that have been added to the Fund
are Getronics (Netherlands - technology services), Essilor (France - eyeglass
lenses), BMC Software (U.S. - computer software) and Giordano (Hong Kong -
retail).
We appreciate your support and welcome any questions or comments you may
have.
Respectfully,
- -------------------------- -----------------------
A 1 1/2" x 1 5/8" photo A 1 1/2" x 1 5/8" photo
of A. Keith Brodkin, of David Mannheim,
Chairman and President. Portfolio Manager.
- -------------------------- -----------------------
/s/ A. Keith Brodkin /s/ David Mannheim
---------------------- -----------------------
A. Keith Brodkin David Mannheim
Chairman and President Portfolio Manager
May 17, 1995
<PAGE>
PORTFOLIO MANAGER PROFILE
David Mannheim began his career at MFS in 1988 as a research specialist and
was promoted to Assistant Vice President - Investments in 1991. In 1992, he
was named Vice President - Investments and Portfolio Manager of MFS World
Equity Fund. Mr. Mannheim is a graduate of Amherst College and of
Massachusetts Institute of Technology's Sloan School of Management.
OBJECTIVE AND POLICIES
The Fund's investment objective is to provide capital appreciation, primarily
through investment in stocks of U.S. and non-U.S. issuers.
The Fund may invest in all types of common stocks and equivalents (such as
convertible debt securities and warrants) and preferred stocks. While the Fund
intends to maintain a portfolio consisting largely of equity securities of
non-U.S. issuers, the Fund may, under normal circumstances, invest up to 50%
of its assets in securities of U.S. and/or Canadian issuers. In addition, for
defensive purposes, the Fund may invest up to 20% of its assets in fixed-
income obligations issued by national governments, their agencies, authorities
and instrumentalities.
<PAGE>
PERFORMANCE SUMMARY
Because mutual funds like MFS World Equity Fund are designed for investors
with long-term goals, we have provided cumulative results as well as the
average annual total returns for Class A, Class B, and Class C shares for the
applicable time periods.
AVERAGE ANNUAL AND CUMULATIVE TOTAL RATES OF RETURN
Class A Investment Results
(net asset value change including reinvested distributions)
9/07/93<F1> -
6 Months 1 Year 4/30/95
- ------------------------------------------------------------------------------
Cumulative Total Return<F2> -0.01% +3.16% +12.81%
- ------------------------------------------------------------------------------
Average Annual Total Return<F2> -- +3.16% + 7.61%
- ------------------------------------------------------------------------------
The average annual total returns, calculated for the period ended as of the
most recent calendar quarter as required by the Securities and Exchange
Commission (the SEC), with all distributions reinvested and reflecting the
maximum sales charge of 5.75% for the 1-year period ended March 31, 1995 and
for the period from September 7, 1993<F1> to March 31, 1995, were -3.75% and
+2.68%, respectively.
Class B Investment Results
(net asset value change including reinvested distributions)
12/29/86<F1> -
6 Months 1 Year 5 Years 4/30/95
- ------------------------------------------------------------------------------
Cumulative Total Return<F3> -0.62% +1.99% +39.41% +125.97%
- ------------------------------------------------------------------------------
Average Annual Total Return<F3> -- +1.99% + 6.87% + 10.27%
- ------------------------------------------------------------------------------
The average annual total returns, calculated for the period ended as of the
most recent calendar quarter as required by the SEC, with all distributions
reinvested and reflecting the contingent deferred sales charge (CDSC) of 4%
and 2% for the 1- and 5-year periods ended March 31, 1995, respectively, and
0% for the period from December 29, 1986<F1> to March 31, 1995, were -2.63%,
+5.78% and +10.13%, respectively.
Class C Investment Results
(net asset value change including reinvested distributions)
1/03/94<F1> -
6 Months 1 Year 4/30/95
- ------------------------------------------------------------------------------
Cumulative Total Return<F4> -0.51% +2.10% -0.21%
- ------------------------------------------------------------------------------
Average Annual Total Return<F4> -- +2.10% -0.16%
- ------------------------------------------------------------------------------
The average annual total returns, calculated for the period ended as of the
most recent calendar quarter as required by the SEC, with all distributions
reinvested for the 1-year period ended March 31, 1995 and for the period from
January 3, 1994<F1> to March 31, 1995, were +1.19% and -1.67%, respectively.
All results represent past performance and are not necessarily an indication
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
<F1> Commencement of offering of this class of shares.
<F2> These results do not include the sales charge. If the charge had been
included, the results would have been lower.
<F3> These results do not include any CDSC. If the charge had been included, the
results would have been lower.
<F4> Class C shares have no initial sales charge or CDSC but, along with Class B
shares, have higher annual fees and expenses than Class A shares.
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED) - April 30, 1995
Common Stocks - 93.4%
- -------------------------------------------------------------------------------
Issuer Shares Value
- -------------------------------------------------------------------------------
U.S. Common Stocks - 25.9%
Aerospace - 0.9%
Allied Signal, Inc. 44,000 $ 1,743,500
- -------------------------------------------------------------------------------
Building Materials - 1.1%
Owens Corning Fiberglass Corp.* 60,000 $ 2,197,500
- -------------------------------------------------------------------------------
Business Services - 1.5%
Ceridian Corp. 86,000 $ 2,967,000
- -------------------------------------------------------------------------------
Cellular Phones - 1.2%
AirTouch Communications, Inc.* 85,000 $ 2,284,375
- -------------------------------------------------------------------------------
Chemicals - 1.0%
Grace (W.R.) & Co. 37,000 $ 1,984,125
- -------------------------------------------------------------------------------
Computer Software - Personal Computers - 0.8
Microsoft Corp.* 19,000 $ 1,555,625
- -------------------------------------------------------------------------------
Computer Software - Systems - 4.3%
BMC Software, Inc.* 42,000 $ 2,614,500
Compaq Computer Corp.* 58,000 2,204,000
Compuware Corp.* 93,000 2,441,250
Sybase, Inc.* 45,000 1,091,250
------------
$ 8,351,000
- -------------------------------------------------------------------------------
Consumer Goods and Services - 3.2%
American Greetings Corp., "A" 88,000 $ 2,398,000
Colgate-Palmolive Co. 30,000 2,107,500
Philip Morris Cos., Inc. 25,000 1,693,750
------------
$ 6,199,250
- -------------------------------------------------------------------------------
Defense Electronics - 1.3%
Loral Corp. 55,000 $ 2,585,000
- -------------------------------------------------------------------------------
Entertainment - 1.2%
Viacom, Inc., "B"* 53,251 $ 2,442,890
- -------------------------------------------------------------------------------
Financial Institutions - 0.9%
Federal Home Loan Mortgage Corp. 26,500 $ 1,729,125
- -------------------------------------------------------------------------------
Insurance - 2.2%
AMBAC, Inc. 25,000 $ 1,018,750
CIGNA Corp. 31,000 2,251,375
Equitable of Iowa Cos. 25,700 941,263
------------
$ 4,211,388
- -------------------------------------------------------------------------------
Medical and Health Technology and Services - 1.2%
United Healthcare Corp. 65,000 $ 2,356,250
- -------------------------------------------------------------------------------
Oils - 1.0%
Amoco Corp. 30,000 $ 1,968,750
- -------------------------------------------------------------------------------
Printing and Publishing - 0.6%
Meredith Corp. 44,000 $ 1,100,000
- -------------------------------------------------------------------------------
Railroads - 0.5%
Santa Fe Pacific Corp. 41,358 $ 966,743
- -------------------------------------------------------------------------------
Retail - 2.0%
Federated Department Stores, Inc.* 182,000 $ 3,844,750
- -------------------------------------------------------------------------------
Special Products and Services - 1.0%
Stanley Works 50,000 $ 1,981,250
- -------------------------------------------------------------------------------
Total U.S. Common Stocks (Identified Cost, $46,243,121) $ 50,468,521
- -------------------------------------------------------------------------------
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED) - continued
Common Stocks - continued
- -------------------------------------------------------------------------------
Issuer Shares Value
- -------------------------------------------------------------------------------
Foreign Common Stocks - 67.5%
Argentina - 0.1%
Mirgor Sacifia, ADR (Auto Parts)*+ 97,600 $ 183,000
- -------------------------------------------------------------------------------
Australia - 5.7%
Australia & New Zealand Bank Group Ltd. (Finance) 1,009,596 $ 3,725,933
Seven Network Ltd. (Entertainment) 1,369,000 3,331,747
Sydney Harbor Casino Ltd. (Entertainment) 2,532,000 2,115,365
Woolworths Ltd. (Retail) 868,736 1,887,046
------------
$ 11,060,091
- -------------------------------------------------------------------------------
Canada - 3.0%
Avenor, Inc. (Forest and Paper Products)* 99,000 $ 1,914,365
Rogers Communications, Inc., "B"
(Telecommunications)* 327,000 3,914,365
------------
$ 5,828,730
- -------------------------------------------------------------------------------
Chile - 0.5%
Administradora de Fondos de Pensiones
Provida S.A., ADR (Finance) 47,200 $ 1,008,900
- -------------------------------------------------------------------------------
Finland - 0.8%
Aamulehti Yhtymae Oy II (Publishing) 49,900 $ 1,005,600
Kesko (Retail) 47,900 493,872
------------
$ 1,499,472
- -------------------------------------------------------------------------------
France - 4.7%
Essilor International (Medical and Health Products) 17,700 $ 3,163,924
Essilor International, Preferred
(Medical and Health Products) 14,000 1,729,027
LVMH Moet-Hennessy (Food and Beverage) 7,400 1,405,444
Michelin, "B" (Tire and Rubber)* 45,000 2,015,539
Total S.A., "B" (Oils) 15,000 936,015
------------
$ 9,249,949
- -------------------------------------------------------------------------------
Germany - 4.6%
BASF AG (Chemicals) 13,000 $ 2,885,766
Hornbach Baumarkt AG (Retail)+ 4,368 2,757,743
Schering AG (Pharmaceuticals) 1,900 1,408,396
Volkswagen AG (Automotive) 7,000 1,949,910
------------
$ 9,001,815
- -------------------------------------------------------------------------------
Hong Kong - 4.7%
Consol Electric Power Asia Ltd., ADR
(Utilities - Electric)+ 57,000 $ 1,225,500
Giordano Holdings Ltd. (Retail) 1,941,000 1,278,787
National Mutual Asia Ltd. (Insurance) 3,750,000 2,192,059
Peregrine Investment Holdings (Finance) 952,000 1,002,299
Television Broadcasting Ltd. (Broadcasting) 269,000 1,000,801
Varitronix International Ltd. (Manufacturing) 640,000 934,246
Wharf Holdings Ltd. (Conglomerate) 480,000 1,438,574
------------
$ 9,072,266
- -------------------------------------------------------------------------------
Italy - 1.1%
Telecom Italia (Telecommunications) 1,031,000 $ 2,147,917
- -------------------------------------------------------------------------------
Japan - 9.8%
Bridgestone Corp. (Tire and Rubber) 137,000 $ 2,214,404
Canon, Inc. (Office Equipment) 44,000 726,884
DDI Corp. (Telecommunications) 351 3,086,998
Dai Nippon Printing Co., Ltd. (Printing) 133,000 2,228,785
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED) - continued
Common Stocks - continued
- -------------------------------------------------------------------------------
Issuer Shares Value
- -------------------------------------------------------------------------------
Foreign Common Stocks - continued
Japan - continued
Daiwa House Industrial Co. (Housing) 66,000 $ 1,098,170
East Japan Railway Co. (Railroads) 315 1,636,023
Kinki Coca-Cola (Beverages) 80,000 1,150,464
MOS Food Services (Restaurants) 53,400 1,567,602
Matsushita Electric Industrial Co.
(Electrical Equipment) 128,000 2,144,996
Nissen Corp. (Retail) 54,600 1,726,123
Osaka Sanso Kogyo (Chemicals) 360,000 1,454,718
------------
$ 19,035,167
- -------------------------------------------------------------------------------
Korea - 1.8%
Korea Electric Power (Utilities - Electric) 56,000 $ 2,049,587
Korea Mobile Telecom, ADR
(Telecommuncations)*+ 49,500 1,429,560
------------
$ 3,479,147
- -------------------------------------------------------------------------------
Netherlands - 3.1%
Getronics NV (Computer Software - Services) 85,000 $ 3,473,742
Royal Dutch Petroleum Co. (Oils) 21,400 2,637,469
------------
$ 6,111,211
- -------------------------------------------------------------------------------
New Zealand - 2.0%
Lion Nathan Ltd. (Food and Beverage) 1,762,000 $ 3,841,080
- -------------------------------------------------------------------------------
Spain - 5.1%
Acerinox (Iron and Steel) 29,500 $ 3,370,746
Cubiertas Y Mzov S.A. (Engineering - Construction) 33,000 2,085,900
Fabrica Autom Renault de Esp (Automotive) 36,000 1,064,830
Iberdrola (Utilities - Electric) 230,000 1,509,724
Repsol S.A. (Oils) 61,000 1,937,763
------------
$ 9,968,963
- -------------------------------------------------------------------------------
Sweden - 10.1%
Asea AB, "B" (Electrical Equipment) 40,000 $ 3,362,176
Astra AB, "B" (Pharmaceuticals) 241,000 6,851,669
Hennes & Mauritz AB, "B" (Retail) 52,000 3,506,661
Marieberg Tidnings, "A" (Publishing) 80,000 1,692,075
Skandinaviska Enskilda Banken, "A"
(Banks and Credit Cos.) 373,000 1,736,671
TV 4 AB (Broadcasting) 134,600 2,569,620
------------
$ 19,718,872
- -------------------------------------------------------------------------------
Switzerland - 0.8%
Publicitas (Advertising) 1,900 $ 1,666,116
- -------------------------------------------------------------------------------
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED) - continued
Common Stocks - continued
United Kingdom - 9.6%
ASDA Group PLC (Supermarkets) 2,450,400 $ 3,237,197
British Steel PLC (Iron and Steel) 893,000 2,431,400
CLM Insurance Fund PLC (Insurance) 380,000 508,136
Capital Radio PLC (Broadcasting) 10,000 60,899
Invesco Fund Managers (Finance) 490,000 1,484,131
MAI PLC (Finance) 355,000 1,532,786
New London Capital PLC (Insurance)+ 670,000 755,599
PowerGen PLC (Utilities - Electric) 280,000 2,181,086
PowerGen PLC, Partly Paid Shares
(Utilities - Electric) 260,400 805,490
Storehouse PLC (Retail) 831,000 3,293,475
Takare PLC (Medical and Health Technology
and Services)+ 773,900 2,493,636
------------
$ 18,783,835
- -------------------------------------------------------------------------------
Total Foreign Common Stocks (Identified Cost, $119,847,159) $131,656,531
- -------------------------------------------------------------------------------
Total Common Stocks (Identified Cost, $166,090,280) $182,125,052
- -------------------------------------------------------------------------------
Short-Term Obligations - 8.4%
- -------------------------------------------------------------------------------
Principal Amount
Issuer (000 Omitted) Value
- -------------------------------------------------------------------------------
Federal Farm Credit, due 5/02/95 $2,265 $ 2,264,631
Federal Home Loan Mortgage Co., due 5/01/95 7,010 7,010,000
Federal Home Loan Mortgage Co., due 5/03/95 7,030 7,027,707
- -------------------------------------------------------------------------------
Total Short-Term Obligations, at Amortized Cost and Value $ 16,302,338
- -------------------------------------------------------------------------------
Total Investments (Identified Cost, $182,392,618) $198,427,390
Other Assets, Less Liabilities - (1.8)% (3,540,838)
- -------------------------------------------------------------------------------
Net Assets - 100.0% $194,886,552
- -------------------------------------------------------------------------------
* Non-income producing security.
+ Restricted security.
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS
Statement of Assets and Liabilities (Unaudited)
- -------------------------------------------------------------------------------
April 30, 1995
- -------------------------------------------------------------------------------
Assets:
Investments, at value (identified cost, $182,392,618) $198,427,390
Foreign currency, at value (identified cost, $21,910) 22,472
Net receivable for forward foreign currency exchange
contracts purchased 154,384
Receivable for investments sold 2,237,305
Receivable for Fund shares sold 471,601
Interest and dividends receivable 320,278
Other assets 2,409
------------
Total assets $201,635,839
------------
Liabilities:
Cash overdraft $ 185,366
Payable for investments purchased 4,851,980
Payable for Fund shares reacquired 311,707
Net payable for forward foreign currency exchange
contracts sold 1,153,366
Payable to affiliates -
Management fee 15,962
Shareholder servicing agent fee 3,333
Distribution fee 44,697
Accrued expenses and other liabilities 182,876
------------
Total liabilities $ 6,749,287
------------
Net assets $194,886,552
------------
Net assets consist of:
Paid-in capital $176,654,208
Unrealized appreciation on investments and translation of
assets and liabilities in foreign currencies 15,032,647
Accumulated undistributed net realized gain on investments
and foreign currency transactions 3,793,085
Accumulated net investment loss (593,388)
------------
Total $194,886,552
------------
Shares of beneficial interest outstanding 12,914,088
------------
Class A shares:
Net asset value and redemption price per share
(net assets of $29,367,023 / 1,940,372 shares of beneficial
interest outstanding) $15.13
------
Offering price per share (100/94.25) $16.05
------
Class B shares:
Net asset value and offering price per share
(net assets of $163,755,924 / 10,856,593 shares of beneficial
interest outstanding) $15.08
------
Class C shares:
Net asset value, offering price, and redemption price per share
(net assets of $1,763,605 / 117,123 shares of beneficial
interest outstanding) $15.06
------
On sales of $50,000 or more, the offering price of Class A shares is reduced.
A contingent deferred sales charge may be imposed on redemptions of Class A
and Class B shares.
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Statement of Operations (Unaudited)
- -------------------------------------------------------------------------------
Six Months Ended April 30, 1995
- -------------------------------------------------------------------------------
Net investment income:
Income -
Dividends $ 1,459,217
Interest 345,845
Foreign taxes withheld 131,688)
-----------
Total investment income $ 1,673,374
-----------
Expenses -
Management fee $ 920,991
Trustees' compensation 18,647
Shareholder servicing agent fee (Class A) 15,305
Shareholder servicing agent fee (Class B) 178,501
Shareholder servicing agent fee (Class C) 1,138
Distribution and service fee (Class B) 811,366
Distribution and service fee (Class C) 7,592
Custodian fee 79,331
Auditing fees 40,869
Postage 27,522
Printing 20,136
Legal fees 6,443
Miscellaneous 110,271
-----------
Total expenses $ 2,238,112
-----------
Net investment loss $ (564,738)
-----------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $ 4,321,170
Foreign currency transactions (820,161)
-----------
Net realized gain on investments $ 3,501,009
-----------
Change in unrealized appreciation (depreciation) -
Investments $(4,427,479)
Translation of assets and liabilities in foreign currencies 552,838
-----------
Net unrealized loss on investments $(3,874,641)
-----------
Net realized and unrealized loss on investments and
foreign currency $ (373,632)
-----------
Decrease in net assets from operations $ (938,370)
-----------
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Statement of Changes in Net Assets
- -------------------------------------------------------------------------------
Six Months Ended Year Ended
April 30, 1995 October 31,
(Unaudited) 1994
- -------------------------------------------------------------------------------
Increase (decrease) in net assets:
From operations -
Net investment loss $ (564,738) $ (1,663,017)
Net realized gain on investments and foreign
currency transactions 3,501,009 20,711,422
Net unrealized loss on investments and foreign
currency translation (3,874,641) (10,314,501)
------------ ------------
Increase (decrease) in net assets from operations $ (938,370) $ 8,733,904
------------ ------------
Distributions declared to shareholders -
From net realized gain on investments and foreign
currency transactions (Class A) $ (2,000,930) $ (180,562)
From net realized gain on investments and foreign
currency transactions (Class B) (15,860,996) (6,235,701)
From net realized gain on investments and foreign
currency transactions (Class C) (151,274) --
In excess of net investment income (Class A) -- (16,838)
In excess of net investment income (Class B) -- (128,567)
------------ ------------
Total distributions declared to shareholders $(18,013,200) $ (6,561,668)
------------ ------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 57,791,550 $151,326,611
Net asset value of shares issued to shareholders
in reinvestment of distributions 16,587,771 5,986,233
Cost of shares reacquired (54,387,147) (113,290,222)
------------ ------------
Increase in net assets from Fund share transactions $ 19,992,174 $ 44,022,622
------------ ------------
Total increase in net assets $ 1,040,604 $ 46,194,858
Net assets:
At beginning of period 193,845,948 147,651,090
------------ ------------
At end of period (including accumulated net
investment loss of $593,388 and $28,650,
respectively) $194,886,552 $193,845,948
------------ ------------
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights
- --------------------------------------------------------------------------------------------------------------------------
Six Months Six Months
Ended Ended
April 30, Year Ended October 31, April 30, Year Ended October 31,
1995 ---------------------- 1995 ----------------------
(Unaudited) 1994 1993<F1> (Unaudited) 1994 1993<F2>
- --------------------------------------------------------------------------------------------------------------------------
Class A Class B
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per share data (for a share outstanding
throughout each period):
Net asset value - beginning of period $16.95 $16.56 $15.71 $16.78 $16.53 $13.50
------ ------ ------ ------ ------ ------
Income from investment operations<F6> -
Net investment income (loss) $ 0.02 $ 0.03 $ 0.01 $(0.05) $(0.17) $(0.10)
Net realized and unrealized gain
(loss) on investments and foreign
currency transactions (0.11) 1.13 0.84 (0.10) 1.13 3.28
------ ------ ------ ------ ------ ------
Total from investment operations $(0.09) $ 1.16 $ 0.85 $(0.15) $ 0.96 $ 3.18
------ ------ ------ ------ ------ ------
Less distributions declared to shareholders -
In excess of net investment income $ -- $(0.07) $ -- $ -- $(0.01) $ --
From net realized gain on investments
and foreign currency transactions (1.73) (0.70) -- (1.55) (0.70) (0.15)
------ ------ ------ ------ ------ ------
Total distributions declared to
shareholders $(1.73) $(0.77) $ -- $(1.55) $(0.71) $(0.15)
------ ------ ------ ------ ------ ------
Net asset value - end of period $15.13 $16.95 $16.56 $15.08 $16.78 $16.53
------ ------ ------ ------ ------ ------
Total return<F5> (0.01)%<F4> 7.03% 5.41%<F4> (0.62)%<F4> 5.91% 23.80%<F4>
Ratios (to average net assets)/
Supplemental data:
Expenses 1.52%<F3> 1.54% 1.68%<F3> 2.54%<F3> 2.58% 2.66%
Net investment income (loss) 0.34%<F3> 0.15% 0.94%<F3> (0.73)%<F3> (1.01)% (0.71)%
Portfolio turnover 40% 99% 70% 40% 99% 70%
Net assets at end of period (000 omitted) $29,367 $16,968 $2,076 $163,756 $175,438 $145,575
<FN>
<F1> For the period from the commencement of offering of Class A shares, September 7, 1993 to October 31, 1993.
<F2> For the eleven months ended October 31, 1993.
<F3> Annualized.
<F4> Not annualized.
<F5> Total returns for Class A shares do not include the applicable sales charge. If the charge had been included, the results
would have been lower.
<F6> Per share data for the periods subsequent to October 31, 1993 are based on average shares outstanding.
</FN>
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights - continued
- -----------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Period
Year Ended November 30, April 30, Ended
---------------------------------------------------------- 1995 October 31,
1992 1991 1990 1989 1988 1987<F1> (Unaudited) 1994<F2>
- -----------------------------------------------------------------------------------------------------------------------------------
Class B Class C
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Per share data (for a share outstanding
throughout each period):
Net asset value - beginning of period $12.40 $12.94 $12.96 $11.21 $10.12 $ 8.47 $16.80 $16.75
------ ------ ------ ------ ------ ------ ------ ------
Income from investment operations<F5> -
Net investment income (loss) $(0.04) $ 0.17 $ 0.13 $ 0.09 $ 0.14 $(0.02) $(0.05) $(0.09)
Net realized and unrealized gain
(loss) on investments and
foreign currency transactions 1.17 (0.37) 0.14 2.03 0.95 1.67 (0.10) 0.14
------ ------ ------ ------ ------ ------ ------ ------
Total from investment operations $ 1.13 $(0.20) $ 0.27 $ 2.12 $ 1.09 $ 1.65 $(0.15) $ 0.05
------ ------ ------ ------ ------ ------ ------ ------
Less distributions declared to
shareholders -
From net investment income
$ -- $ -- $ -- $(0.21) $ -- $ -- $ -- $ --
From net realized gain on investments
and foreign currency transactions (0.03) (0.15) (0.29) (0.12) -- -- (1.59) --
From paid-in capital -- (0.19) -- (0.04) -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------
Total distributions declared to
shareholders $(0.03) $(0.34) $(0.29) $(0.37) $ -- $ -- $(1.59) $ --
------ ------ ------ ------ ------ ------ ------ ------
Net asset value - end of period $13.50 $12.40 $12.94 $12.96 $11.21 $10.12 $15.06 $16.80
------ ------ ------ ------ ------ ------ ------ ------
Total return 9.13% (1.57)% 2.02% 19.58% 10.77% 19.48%<F4> (0.51)%<F4> 0.30%<F4>
Ratios (to average net assets)/
Supplemental data:
Expenses 2.91% 2.88% 2.93% 3.05% 2.48% 2.50%<F3> 2.49%<F3> 2.55%<F3>
Net investment income (loss) (0.31)% 1.35% 1.07% 0.77% 1.29% (0.29)%<F3> (0.67)%<F3> (0.72)%<F3>
Portfolio turnover 110% 160% 173% 190% 276% 272% 40% 99%
Net assets at end of period (000 omitted) $101,550 $82,980 $81,505 $50,827 $42,806 $37,248 $1,764 $1,440
<FN>
<F1> For the period from the commencement of investment operations, December 29, 1986 to November 30, 1987.
<F2> For the period from the commencement of offering of Class C shares, January 3, 1994 to October 31, 1994.
<F3> Annualized.
<F4> Not annualized.
<F5> Per share data for the periods subsequent to October 31, 1993 are based on average shares outstanding.
</FN>
</TABLE>
See notes to financial statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(1) Business and Organization
MFS World Equity Fund (the Fund) is a diversified series of MFS Series Trust
VI (the Trust). The Trust is organized as a Massachusetts business trust and
is registered under the Investment Company Act of 1940, as amended, as an
open-end management investment company.
(2) Significant Accounting Policies
Investment Valuations - Equity securities listed on securities exchanges or
reported through the NASDAQ system are valued at last sale prices. Unlisted
equity securities or listed equity securities for which last sale prices are
not available are valued at last quoted bid prices. Debt securities (other
than short-term obligations which mature in 60 days or less), including listed
issues and forward contracts, are valued on the basis of valuations furnished
by dealers or by a pricing service with consideration to factors such as
institutional-size trading in similar groups of securities, yield, quality,
coupon rate, maturity, type of issue, trading characteristics and other market
data, without exclusive reliance upon exchange or over-the-counter prices.
Short-term obligations, which mature in 60 days or less, are valued at
amortized cost, which approximates value. Non-U.S. dollar denominated short-
term obligations are valued at amortized cost as calculated in the base
currency and translated into U.S. dollars at the closing daily exchange rate.
Futures contracts, options and options on futures contracts listed on
commodities exchanges are valued at closing settlement prices. Over-the-
counter options are valued by brokers through the use of a pricing model which
takes into account closing bond valuations, implied volatility and short-term
repurchase rates. Securities for which there are no such quotations or
valuations are valued at fair value as determined in good faith by or at the
direction of the Trustees.
Repurchase Agreements - The Fund may enter into repurchase agreements with
institutions that the Fund's investment adviser has determined are
creditworthy. Each repurchase agreement is recorded at cost. The Fund requires
that the securities purchased in a repurchase transaction be transferred to
the custodian in a manner sufficient to enable the Fund to obtain those
securities in the event of a default under the repurchase agreement. The Fund
monitors, on a daily basis, the value of the securities transferred to ensure
that the value, including accrued interest, of the securities under each
repurchase agreement is greater than amounts owed to the Fund under each such
repurchase agreement.
Foreign Currency Translation - Investment valuations, other assets, and
liabilities initially expressed in foreign currencies are converted each
business day into U.S. dollars based upon current exchange rates. Purchases
and sales of foreign investments and income and expenses are converted into
U.S. dollars based upon currency exchange rates prevailing on the respective
dates of such transactions. Gains and losses attributable to foreign currency
exchange rates on sales of securities are recorded for financial statement
purposes as net realized gains and losses on investments. Gains and losses
attributable to foreign exchange rate movements on income and expenses are
recorded for financial statement purposes as foreign currency transaction
gains and losses. That portion of both realized and unrealized gains and
losses on investments that results from fluctuations in foreign currency
exchange rates is not separately disclosed.
Written Options - The Fund may write covered call or put options for which
premiums are received and are recorded as liabilities, and are subsequently
adjusted to the current value of the options written. Premiums received from
writing options which expire are treated as realized gains. Premiums received
from writing options which are exercised or are closed are offset against the
proceeds or amount paid on the transaction to determine the realized gain or
loss. If a put option is exercised, the premium reduces the cost basis of the
security purchased by the Fund. The Fund, as writer of an option, may have no
control over whether the underlying securities may be sold (call) or purchased
(put) and, as a result, bears the market risk of an unfavorable change in the
price of the securities underlying the written option. In general, written
call options may serve as a partial hedge against decreases in value in the
underlying securities to the extent of the premium received. Written options
may also be used as a part of an income producing strategy reflecting the view
of the Fund's management on the direction of interest rates.
Futures Contracts - The Fund may enter into stock-index and foreign currency
futures contracts for the delayed delivery of currency or a notional quantity
of stock-index assets at a fixed price on a future date. In entering such
contracts, the Fund is required to deposit either in cash or securities an
amount equal to a certain percentage of the contract amount. Subsequent
payments are made or received by the Fund each day, depending on the daily
fluctuations in the value of the underlying currency or index, and are
recorded for financial statement purposes as unrealized gains or losses by the
Fund. The Fund's investment in stock-index or foreign currency futures
contracts is designed to hedge against anticipated future changes in exchange
rates or securities prices. Investments in currency futures for purposes other
than hedging may be made to change the Fund's relative position in one or more
currencies without buying and selling portfolio assets. Investments in equity
index contracts, or contracts on related options, for purposes other than
hedging may be made when the Fund has cash on hand and wishes to participate
in anticipated market appreciation while the cash is being invested. There may
also be other business reasons for investing in futures contracts for purposes
other than hedging. Should exchange rates or securities prices move
unexpectedly, the Fund may not achieve the anticipated benefits of the stock-
index or foreign currency futures contracts and may realize a loss.
Security Loans - The Fund may lend its securities to member banks of the
Federal Reserve System and to member firms of the New York Stock Exchange or
subsidiaries thereof. The loans are collateralized at all times by cash or
securities with a market value at least equal to the market value of
securities loaned. As with other extensions of credit, the Fund may bear the
risk of delay in recovery or even loss of rights in the collateral should the
borrower of the securities fail financially. The Fund receives compensation
for lending its securities in the form of fees or from all or a portion of the
income from investment of the collateral. The Fund would also continue to earn
income on the securities loaned. At April 30, 1995, the Fund had no securities
on loan.
Forward Foreign Currency Exchange Contracts - The Fund may enter into forward
foreign currency exchange contracts for the purchase or sale of a specific
foreign currency at a fixed price on a future date. Risks may arise upon
entering these contracts from the potential inability of counterparties to
meet the terms of their contracts and from unanticipated movements in the
value of a foreign currency relative to the U.S. dollar. The Fund will enter
into forward contracts for hedging purposes as well as for non-hedging
purposes. For hedging purposes, the Fund may enter into contracts to deliver
or receive foreign currency it will receive from or require for its normal
investment activities. It may also use contracts in a manner intended to
protect foreign currency-denominated securities from declines in value due to
unfavorable exchange rate movements. For non-hedging purposes, the Fund may
enter into contracts with the intent of changing the relative exposure of the
Fund's portfolio of securities to different currencies to take advantage of
anticipated changes. The forward foreign currency exchange contracts are
adjusted by the daily exchange rate of the underlying currency and any gains
or losses are recorded for financial statement purposes as unrealized until
the contract settlement date.
Investment Transactions and Income - Investment transactions are recorded on
the trade date. Interest income is recorded on the accrual basis. All premium
and original issue discount are amortized or accreted for both financial
statement and tax reporting purposes as required by federal income tax
regulations. Dividend income is recorded on the ex-dividend date for dividends
received in cash. Dividend and interest payments received in additional
securities are recorded on the ex-dividend or ex-interest date in an amount
equal to the value of the security on such date.
Tax Matters and Distributions - The Fund's policy is to comply with the
provisions of the Internal Revenue Code (the Code) applicable to regulated
investment companies and to distribute to shareholders all of its net taxable
income, including any net realized gain on investments. Accordingly, no
provision for federal income or excise tax is provided. The Fund files a tax
return annually using tax accounting methods required under provisions of the
Code which may differ from generally accepted accounting principles, the basis
on which these financial statements are prepared. Accordingly, the amount of
net investment income and net realized gain reported on these financial
statements may differ from that reported on the Fund's tax return and,
consequently, the character of distributions to shareholders reported in the
financial highlights may differ from that reported to shareholders on Form
1099-DIV. Foreign taxes have been provided for on interest and dividend income
earned on foreign investments in accordance with the applicable country's tax
rates and to the extent unrecoverable are recorded as a reduction of
investment income. Distributions to shareholders are recorded on the
ex-dividend date.
The Fund distinguishes between distributions on a tax basis and a financial
reporting basis and requires that only distributions in excess of tax basis
earnings and profits are reported in the financial statements as a return of
capital. Differences in the recognition or classification of income between
the financial statements and tax earnings and profits which result in
temporary over-distributions for financial statement purposes, are classified
as distributions in excess of net investment income or accumulated net
realized gains.
Multiple Classes of Shares of Beneficial Interest - The Fund offers Class A,
Class B and Class C shares. The three classes of shares differ in their
respective shareholder servicing agent, distribution and service fees.
Shareholders of each class also bear certain expenses that pertain only to
that particular class. All shareholders bear the common expenses of the Fund
pro rata based on the average daily net assets of each class, without
distinction between share classes. Dividends are declared separately for each
class. No class has preferential dividend rights; differences in per share
dividend rates are generally due to differences in separate class expenses,
including distribution and shareholder service fees.
(3) Transactions with Affiliates
Investment Adviser - The Fund has an investment advisory agreement with
Massachusetts Financial Services Company (MFS) to provide overall investment
advisory and administrative services, and general office facilities. The
management fee, computed daily and paid monthly at an effective annual rate of
1.00% of average daily net assets, amounted to $920,991.
The Fund pays no compensation directly to its Trustees who are officers of the
investment adviser, or to officers of the Fund, all of whom receive
remuneration for their services to the Fund from MFS. Certain of the officers
and Trustees of the Fund are officers or directors of MFS, MFS Fund
Distributors, Inc. (MFD) and MFS Service Center, Inc. (MFSC). The Fund has an
unfunded defined benefit plan for all its independent Trustees. Included in
Trustees' compensation is a net periodic pension expense of $4,647 for the six
months ended April 30, 1995.
Distributor - MFD, a wholly owned subsidiary of MFS, as distributor, received
$11,808 as its portion of the sales charge on sales of Class A shares of the
Fund. The Trustees have adopted separate distribution plans for Class A, Class
B and Class C shares pursuant to Rule 12b-1 of the Investment Company Act of
1940 as follows:
The Class A Distribution Plan provides that the Fund will pay MFD up to 0.35%
of its average daily net assets attributable to Class A shares annually in
order that MFD may pay expenses on behalf of the Fund related to the
distribution and servicing of its shares. These expenses include a service fee
to each securities dealer that enters into a sales agreement with MFD of up to
0.25% per annum of the Fund's average daily net assets attributable to Class A
shares which are attributable to that securities dealer, a distribution fee to
MFD of up to 0.10% per annum of the Fund's average daily net assets
attributable to Class A shares, commissions to dealers and payments to MFD
wholesalers for sales at or above a certain dollar level, and other such
distribution-related expenses that are approved by the Fund. Payments will
commence under the distribution plan when the value of the net assets of the
Fund attributable to Class A shares first equals or exceeds $40 million.
The Class B and Class C Distribution Plans provide that the Fund will pay MFD
a monthly distribution fee, equal to 0.75% per annum, and a quarterly service
fee of up to 0.25% per annum, of the Fund's average daily net assets
attributable to Class B and Class C shares. MFD retains the service fee for
accounts not attributable to a securities dealer. For Class B and Class C
shares, the service fees retained amounted to $25,041 and $232, respectively.
MFD will pay to securities dealers that enter into a sales agreement with MFD,
all or a portion of the service fee attributable to Class B and Class C
shares, and will pay to such securities dealers all of the distribution fee
attributable to Class C shares. The service fee is intended to be additional
consideration for services rendered by the dealer with respect to Class B and
Class C shares. Fees incurred under the distribution plans during the six
months ended April 30, 1995, were 1.00% of average daily net assets
attributable to Class B and Class C shares on an annualized basis and amounted
to $811,366 and $7,592, respectively.
A contingent deferred sales charge is imposed on shareholder redemptions of
Class A shares, on purchases of $1 million or more, in the event of a
shareholder redemption within twelve months following the share purchase. A
contingent deferred sales charge is imposed on shareholder redemptions of
Class B shares in the event of a shareholder redemption within six years of
purchase. MFD receives all contingent deferred sales charges. Contingent
deferred sales charges imposed during the six months ended April 30, 1995 were
$36 and $109,791 for Class A and Class B shares, respectively.
Shareholder Servicing Agent - MFSC, a wholly owned subsidiary of MFS, earned
$15,305, $178,501 and $1,138 for Class A, Class B and Class C shares,
respectively, for its services as shareholder servicing agent. The fee is
calculated as a percentage of the average daily net assets of each class of
shares at an effective annual rate of up to 0.15%, up to 0.22% and up to 0.15%
attributable to Class A, Class B and Class C shares, respectively.
(4) Portfolio Securities
Purchases and sales of investments, other than U.S. government securities,
purchased option transactions and short-term obligations, aggregated
$60,062,683 and $58,903,634, respectively.
The cost and unrealized appreciation or depreciation in value of the
investments owned by the Fund, as computed on a federal income tax basis, are
as follows:
Aggregate cost $182,392,618
------------
Gross unrealized appreciation $ 25,330,579
Gross unrealized depreciation (9,295,807)
------------
Net unrealized appreciation $ 16,034,772
------------
(5) Shares of Beneficial Interest
The Fund's Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest (without par
value). Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
Class A Shares Six Months Ended Year Ended
April 30, 1995 October 31, 1994
------------------------------ ------------------------------
Shares Amount Shares Amount
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 1,242,969 $18,639,251 1,978,367 $ 33,143,923
Shares issued to shareholders in
reinvestment of distributions 129,488 1,878,878 9,733 162,345
Shares reacquired (433,009) (6,500,168) (1,112,569) (18,679,384)
---------- ----------- ---------- ------------
Net increase 939,448 $14,017,961 875,531 $ 14,626,884
---------- ----------- ---------- ------------
<CAPTION>
Class B Shares Six Months Ended Year Ended
April 30, 1995 October 31, 1994
------------------------------ ------------------------------
Shares Amount Shares Amount
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 2,571,078 $38,339,332 6,764,741 $112,853,245
Shares issued to shareholders in
reinvestment of distributions 1,005,079 14,583,699 349,342 5,823,888
Shares reacquired (3,171,664) (47,420,440) (5,466,499) (90,745,071)
---------- ----------- ---------- ------------
Net increase 404,493 $ 5,502,591 1,647,584 $ 27,932,062
---------- ----------- ---------- ------------
<CAPTION>
Class C Shares Six Months Ended Year Ended
April 30, 1995 October 31, 1994*
------------------------------ ------------------------------
Shares Amount Shares Amount
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 53,546 $ 812,967 319,076 $ 5,329,443
Shares issued to shareholders in
reinvestment of distributions 8,646 125,194 -- --
Shares reacquired (30,781) (466,539) (233,364) (3,865,767)
---------- ----------- ---------- ------------
Net increase 31,411 $ 471,622 85,712 $ 1,463,676
---------- ----------- ---------- ------------
*For the period from the commencement of offering of Class C shares, January 3, 1994 to October 31, 1994.
</TABLE>
(6) Line of Credit
The Fund entered into an agreement which enables it to participate with other
funds managed by MFS, or an affiliate of MFS, in an unsecured line of credit
with a bank which permits borrowings up to $350 million, collectively.
Borrowings may be made to temporarily finance the repurchase of Fund shares.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the bank's base rate. In addition, a commitment fee, based on the average
daily unused portion of the line of credit, is allocated among the
participating funds at the end of each quarter. The commitment fee allocated
to the Fund for the six months ended April 30, 1995 was $1,433.
(7) Financial Instruments
The Fund regularly trades financial instruments with off-balance sheet risk in
the normal course of its investing activities in order to manage exposure to
market risks such as interest rates and foreign currency exchange rates. These
financial instruments include written options, forward foreign currency
exchange contracts and futures contracts. The notional or contractual amounts
of these instruments represent the investment the Fund has in particular
classes of financial instruments and does not necessarily represent the
amounts potentially subject to risk. The measurement of the risks associated
with these instruments is meaningful only when all related and offsetting
transactions are considered. A summary of obligations under these financial
instruments at April 30, 1995, is as follows:
<TABLE>
<CAPTION>
Forward Foreign Currency Exchange Contracts
Net Unrealized
Contracts to Contracts Appreciation
Settlement Date Deliver/Receive In Exchange for at Value (Depreciation)
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales 6/27/95 AUD 11,163,012 $ 8,057,462 $ 8,087,748 $ (30,286)
5/05/95 CAD 10,295,240 7,318,135 7,582,495 (264,360)
6/21/95 ESP 928,379,580 7,044,939 7,487,625 (442,686)
7/10/95 FRF 21,086,300 4,253,157 4,267,445 (14,288)
5/02/95 SEK 216,331,210 29,210,722 29,612,468 (401,746)
----------- ----------- -----------
$55,884,415 $57,037,781 $(1,153,366)
----------- ----------- -----------
Purchases 5/05/95 CAD 3,299,979 $ 2,330,000 $ 2,430,451 $ 100,451
6/21/95 ESP 73,389,362 568,998 592,326 23,328
5/02/95 SEK 85,561,140 11,720,704 11,751,309 30,605
----------- ----------- -----------
$14,619,702 $14,774,086 $ 154,384
----------- ----------- -----------
AUD = Australian Dollars FRF = French Francs
CAD = Canadian Dollars SEK = Swedish Kronor
ESP = Spanish Pesetas
</TABLE>
At April 30, 1995, the Fund had sufficient cash and/or securities to cover any
commitments under these contracts.
(8) Restricted Securities
The Fund may invest not more than 15% of its net assets in securities which
are subject to legal or contractual restrictions on resale. At April 30, 1995,
the Fund owned the following restricted securities (constituting 4.54% of net
assets) which may not be publicly sold without registration under the
Securities Act of 1933. The Fund does not have the right to demand that such
securities be registered. The value of these securities is determined by
valuations supplied by a pricing service or brokers or, if not available, in
good faith by or at the direction of the Trustees. Certain of these securities
may be offered and sold to "qualified institutional buyers" under Rule 144A of
the 1933 Act.
<TABLE>
<CAPTION>
Description Date of Acquisition Share Amount Cost Value
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Consol Electric Power Asia Ltd., ADR 11/29/93 57,000 $ 923,584 $1,225,500
Hornbach Baumarkt AG 11/05/93 - 1/30/95 4,368 2,605,122 2,757,743
Korea Mobile Telecom, ADR 3/24/95 - 3/31/95 49,500 1,291,319 1,429,560
Mirgor Sacifia, ADR 10/20/94 97,600 878,400 183,000
New London Capital PLC 11/12/93 670,000 993,945 755,599
Takare PLC 4/08/92 - 3/23/93 773,900 2,562,368 2,493,636
----------
$8,845,038
----------
</TABLE>
---------------------------------------------
This report is prepared for the general information of shareholders. It is
authorized for distribution to prospective investors only when preceded or
accompanied by a current prospectus.
<PAGE>
THE MFS FAMILY OF FUNDS(R) -- AMERICA'S OLDEST MUTUAL FUND GROUP
The members of the MFS Family of Funds are grouped below according to the types
of securities in their portfolios. For free prospectuses containing more
complete information, including the exchange privilege and all charges and
expenses, please contact your financial adviser or call MFS at 1-800-637-2929
any business day from 9 a.m. to 5 p.m. Eastern time (or, leave a message any
time). This material should be read carefully before investing or sending money.
<TABLE>
<CAPTION>
<S> <C>
STOCK LIMITED MATURITY BOND
Massachusetts Investors Trust MFS(r) Government Limited Maturity Fund
Massachusetts Investors Growth Stock Fund MFS(r) Limited Maturity Fund
MFS(r) Capital Growth Fund MFS(r) Municipal Limited Maturity Fund
MFS(r) Emerging Growth Fund WORLD
MFS(r) Gold & Natural Resources Fund MFS(r) World Asset Allocation Fund
MFS(r) Growth Opportunities Fund MFS(r) World Equity Fund
MFS(r) Managed Sectors Fund MFS(r) World Governments Fund
MFS(r) OTC Fund MFS(r) World Growth Fund
MFS(r) Research Fund MFS(r) World Total Return Fund
MFS(r) Value Fund NATIONAL TAX-FREE BOND
STOCK AND BOND MFS(r) Municipal Bond Fund
MFS(r) Total Return Fund MFS(r) Municipal High Income Fund
MFS(r) Utilities Fund (closed to new investors)
BOND MFS(r) Municipal Income Fund
MFS(r) Bond Fund STATE TAX-FREE BOND
MFS(r) Government Mortgage Fund Alabama, Arkansas, California, Florida,
MFS(r) Government Securities Fund Georgia, Louisiana, Maryland, Massachusetts,
MFS(r) High Income Fund Mississippi, New York, North Carolina,
MFS(r) Intermediate Income Fund Pennsylvania, South Carolina, Tennessee, Texas,
MFS(r) Strategic Income Fund Virginia, Washington, West Virginia
(formerly MFS(r) Income & Opportunity Fund) MONEY MARKET
MFS(r) Cash Reserve Fund
MFS(r) Government Money Market Fund
MFS(r) Money Market Fund
</TABLE>
<PAGE>
MFS(R) WORLD -------------
EQUITY FUND [LOGO: NUMBER 1 DALBAR BULK RATE
TOP-RATED SERVICE] U.S. POSTAGE
PAID
500 Boylston Street PERMIT #55638
Boston, MA 02116 BOSTON, MA
-------------
[LOGO: M F S
THE FIRST NAME IN MUTUAL FUNDS]
MWE-3 6/95/36M 4/204/304
