MFS Utilities Fund
Supplement to the Current Prospectus
The following information supplements the disclosure
found under the section, Investment Objective and
Policies on page five of the Prospectus:
Emerging Market Securities: Consistent with the
Funds investment objective of seeking capital growth
and current income (income above that available from a
portfolio invested entirely in equity securities), the
Fund may invest up to 35% of its assets in foreign
securities, including investments in countries or
regions with relatively low gross national product per
capita compared to the world's major economies, and in
countries or regions with the potential for rapid
economic growth (emerging markets). The Adviser
believes that investments in emerging market
securities provides the Fund with the potential for
high current income and opportunities for capital
appreciation. Emerging markets will include any
country: (i) having an "emerging stock market" as
defined by the International Finance Corporation; (ii)
with low-to middle-income economies according to the
International Bank for Reconstruction and Development
(the "World Bank"); (iii) listed in World Bank
publications as developing; or (iv) determined by the
Adviser to be an emerging market as defined above. The
Fund may invest in securities of: (i) companies the
principal securities trading market for which is an
emerging market country; (ii) companies organized
under the laws of, and with a principal office in, an
emerging market country; (iii) companies whose
principal activities are located in emerging market
countries; or (iv) companies traded in any market that
derive 50% or more of their total revenue from either
goods or services produced in an emerging market or
sold in an emerging market.
The risks of investing in foreign securities may
be intensified in the case of investments in emerging
markets. Securities of many issuers in emerging
markets may be less liquid and more volatile than
securities of comparable domestic issuers. Emerging
markets also have different clearance and settlement
procedures, and in certain markets there have been
times when settlements have been unable to keep pace
with the volume of securities transactions, making it
difficult to conduct such transactions. Delays in
settlement could result in temporary periods when a
portion of the assets of the Fund is uninvested and no
return is earned thereon. The inability of the Fund
to make intended security purchases due to settlement
problems could cause the Fund to miss attractive
investment opportunities. Inability to dispose of
portfolio securities due to settlement problems could
result either in losses to the Fund due to subsequent
declines in value of the portfolio security or, if the
Fund has entered into a contract to sell the security,
in possible liability to the purchaser. Certain
markets may require payment for securities before
delivery. Securities prices in emerging markets can
be significantly more volatile than in the more
developed nations of the world, reflecting the greater
uncertainties of investing in less established markets
and economies. In particular, countries with emerging
markets may have relatively unstable governments,
present the risk of nationalization of businesses,
restrictions on foreign ownership, or prohibitions of
repatriation of assets, and may have less protection
of property rights than more developed countries. The
economies of countries with emerging markets may be
predominantly based on only a few industries, may be
highly vulnerable to changes in local or global trade
conditions, and may suffer from extreme and volatile
debt burdens or inflation rates. Local securities
markets may trade a small number of securities and may
be unable to respond effectively to increases in
trading volume, potentially making prompt liquidation
of substantial holdings difficult or impossible at
times. Securities of issuers located in countries
with emerging markets may have limited marketability
and may be subject to more abrupt or erratic price
movements.
Certain emerging markets may require
governmental approval for the repatriation of
investment income, capital or the proceeds of sales of
securities by foreign investors. In addition, if a
deterioration occurs in an emerging market's balance
of payments or for other reasons, a country could
impose temporary restrictions on foreign capital
remittances. The Fund could be adversely affected by
delays in, or a refusal to grant, any required
governmental approval for repatriation of capital, as
well as by the application to the Fund of any
restrictions on investments.
Investment in certain foreign emerging market
debt obligations may be restricted or controlled to
varying degrees. These restrictions or controls may
at times preclude investment in certain foreign
emerging market debt obligations and increase the
expenses of the Fund.
The date of this Supplement is March 24, 1995.
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