MFS WORLD EQUITY FUND
(A SERIES OF MFS SERIES TRUST VI)
500 BOYLSTON STREET o BOSTON o MASSACHUSETTS 02116-3741
617 o 954-5000
December 22, 1995
VIA EDGAR
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, DC 20549
Re: MFS Series Trust VI (File No. 811-6102), on Behalf of
MFS World Equity Fund
Ladies and Gentlemen:
Pursuant to the requirements of Section 30(b) of the Investment Company Act
of 1940 and Rule 30b2-1 thereunder, we hereby file a copy of the Semiannual
Report to Shareholders dated October 31, 1995 of MFS World Equity Fund.
Very truly yours,
LORRAINE K. GRIP
Lorraine K. Grip
Senior Production Editor
<PAGE>
MFS LOGO Annual Report for
Year Ended
October 31, 1995
MFS [Registration Mark] World Equity Fund
Front Cover
A picture of airplanes.
<PAGE>
MFS [Registration Mark] World Equity FUND
TRUSTEES
A. Keith Brodkin* -- Chairman and President
Richard B. Bailey* -- Private Investor; Former Chairman and Director (until
1991), Massachusetts Financial Services Company; Director, Cambridge Bancorp;
Director, Cambridge Trust Company
Marshall N. Cohan -- Private Investor
Lawrence H. Cohn, M.D. -- Chief of Cardiac Surgery, Brigham and Women's
Hospital; Professor of Surgery, Harvard Medical School
The Hon. Sir J. David Gibbons, KBE -- Chief Executive Officer, Edmund Gibbons
Ltd.; Chairman, Bank of N.T. Butterfield & Son Ltd.
Abby M. O'Neill -- Private Investor; Director, Rockefeller Financial Services,
Inc.(investment advisers)
Walter E. Robb, III -- President and Treasurer, Benchmark Advisers, Inc.
(corporate financial consultants); President, Benchmark Consulting Group, Inc.
(office services); Trustee, Landmark Funds (mutual funds)
Arnold D. Scott* -- Senior Executive Vice President, Director and Secretary,
Massachusetts Financial Services Company
Jeffrey L. Shames* -- President and Director, Massachusetts Financial Services
Company
J. Dale Sherratt -- President, Insight Resources, Inc. (acquisition planning
specialists)
Ward Smith -- Former Chairman (until 1994), NACCO Industries; Director,
Sundstrand Corporation
INVESTMENT ADVISER
Massachusetts Financial Services Company
500 Boylston Street
Boston, MA 02116-3741
DISTRIBUTOR
MFS Fund Distributors, Inc.
500 Boylston Street
Boston, MA 02116-3741
PORTFOLIO MANAGER
David Mannheim*
TREASURER
W. Thomas London*
ASSISTANT TREASURER
James O. Yost*
SECRETARY
Stephen E. Cavan*
ASSISTANT SECRETARY
James R. Bordewick, Jr.*
CUSTODIAN
State Street Bank and Trust Company
AUDITORS
Deloitte & Touche LLP
INVESTOR INFORMATION
For MFS stock and bond market outlooks, call toll free: 1-800-637-4458 anytime
from a touch-tone telephone.
For information on MFS mutual funds, call your financial adviser or, for an
information kit, call toll free: 1-800-637-2929 any business day from 9 a.m.
to 5 p.m. Eastern time (or leave a message anytime).
INVESTOR SERVICE
MFS Service Center, Inc.
P.O. Box 2281
Boston, MA 02107-9906
For general information, call toll free: 1-800-225-2606 any business day from
8 a.m. to 8 p.m. Eastern time.
For service to speech- or hearing-impaired, call toll free: 1-800-637-6576
any business day from 9 a.m. to 5 p.m. Eastern time. (To use this service,
your phone must be equipped with a Telecommunications Device for the Deaf.)
For share prices, account balances and exchanges, call toll free: 1-800-MFS-TALK
(1-800-637-8255) anytime from a touch-tone telephone.
[DALBAR LOGO]
TOP-RATED SERVICE
For the second year in a row, MFS earned a #1 ranking in DALBAR, Inc.'s
Broker/Dealer Survey, Main Office Operations Service Quality category. The firm
achieved a 3.49 overall score -- on a scale of 1 to 4 -- in the 1995 survey. A
total of 71 firms responded, offering input on the quality of service they
receive from 36 mutual fund companies nationwide. The survey contained questions
about service quality in 17 categories, including "knowledge of phone service
con-tacts," "accuracy of transaction processing," and "overall ease of doing
business with the firm."
*Affiliated with the Investment Adviser
<PAGE>
LETTER TO SHAREHOLDERS
Dear Shareholders:
For the fiscal year ended October 31, 1995, the Fund generated a total return
including the reinvestment of dividends but excluding the effects of any sales
charges) for Class A shares of +10.16%, for Class B shares +9.07%, and for Class
C shares +9.20%. This was in line with the +10.03% return produced by the Morgan
Stanley Capital International World Index (the MSCI), a broad, unmanaged index
of global equities. After a fairly flat first half of the fiscal year, in which
the Fund lagged the MSCI by roughly 5%, the Fund's relative performance improved
in the second half. An important factor in this improvement was our relative
underweighting in Japan (11% of the Fund versus 25% of the MSCI), where the
market was up 7% in yen but down 14% in dollars for the past six months (-10%
and -15% for the full year). Secondly, while partial hedging of our European
exposure hurt us in the first six months with the weakness of the dollar, this
was not the case in the second half, as the dollar was broadly flat against
European currencies.
U.S. Outlook
Moderate, but sustainable, growth appears to be the hallmark of the economic
expansion's fifth year. While initial estimates showed the U.S. economy growing
at an annual rate of 4.2% in the third quarter, this surprisingly strong growth
was mainly driven by a pickup in consumer spending and an increase in business
and government outlays. Although impressive, this growth rate is not expected to
continue in coming months. Recent retail sales have been disappointing, in part
because of rising levels of consumer debt. An extended period of lower mortgage
rates seems to have relieved much of the pent-up demand for housing. Growth is
not expected to get much help from the manufacturing sector, either, as order
flows from manufacturers have moderated. Export activity, meanwhile, is also
expected to remain modest as continued weakness abroad has limited demand for
many U.S. goods. However, the Federal Reserve Board's consistent and, so far,
successful efforts to fight inflation seem to be giving consumers and businesses
enough longer term confidence to help maintain modest growth in real (adjusted
for inflation) gross domestic product into 1996.
Global Outlook
As in the United States, a pattern of slow to moderate growth and low and
controlled inflation remains a dominant theme in major industrialized countries.
While the recent recovery of the dollar against the yen and the mark has added
some strength to the economies of Europe and Japan, the outlook is for sluggish
economic growth, in the near term at least. And although central banks in Europe
and Japan have lowered interest rates in an attempt to stimulate domestic
demand, many industrial companies in these countries are still struggling to
compete in a global marketplace in which the prices of their products are less
competitively priced. On the positive side, this does mean little to no
1
<PAGE>
LETTER TO SHAREHOLDERS - continued
inflationary pressure in these countries, and we believe that this, combined
with further reductions in interest rates, could help provide a foundation for
stronger economic growth in the long run.
Stock Markets
During the past year, the performance of the world's stock markets has been
mostly positive. The U.S. market continued to lead the way, following up on a
strong first half (+10%) with an even stronger last six months (+15%). Up nearly
27% for the year, the U.S. market was clearly the best performing major stock
market in the world. According to Datastream, an independent financial database
service, the performance of the European markets (in local currencies) varied
widely, with Switzerland (+22%), Sweden (+19%) and the United Kingdom (+18%) at
the top of the tables and Germany (+2%), France (-2%) and Italy (-7%) lagging.
In general, the markets of the Pacific Rim showed improved performance during
the second half but not enough to offset weak first-half returns. Japan finished
the year down 10%, while Singapore, Malaysia, Thailand and Korea showed losses
of 8% to 14%. New Zealand (+6%), Australia (+3%) and Hong Kong (+3%) were the
best Pacific Rim performers.
When measured in U.S. dollars, currency movements had a noticeable impact
on international stock market returns during the past 12 months. The U.S. dollar
fell 7% versus the mark, 10% against the Swiss franc and 2% against the
Australian dollar, thereby aiding U.S. dollar-based returns. Conversely, the
U.S. dollar strengthened 5% against the yen, with a 22% gain against the yen in
the second half alone.
Portfolio Performance and Strategy
The Fund's overall investment philosophy continues to be that of global,
bottom-up stockpicking, as opposed to top-down country allocations. Therefore,
the Fund's country weightings are simply the byproducts of where the companies
we believe offer the most attractive returns have their headquarters. For
example, the Fund's largest holding, Astra, is a multinational pharmaceutical
company based in Sweden, a country that represents less than 9% of Astra's
sales.
The Fund remains well-diversified, with investments in 20 countries spread
as follows: 38% in Europe, 30% in the Americas and 32% in Asia and the Pacific
Rim. Over the past six months we have started to find better investment
opportunities in the Asia/Pacific region, as reflected in that region's
weighting rising from 26% as of April 28, 1995. The size of our Japanese
holdings has remained fairly constant, but we have started or added to positions
in Singapore, Malaysia, South Korea, Australia and New Zealand. In contrast, our
weighting in Europe has been reduced from 43%. Positions there have been
eliminated due in equal measure to stock prices reaching target levels and to
the anticipation of deteriorating fundamentals in several companies
(particularly economically sensitive ones).
2
<PAGE>
LETTER TO SHAREHOLDERS - continued
Globally, we continue to shift away from cyclical stocks where we see
commodity prices peaking (such as in chemicals and papers) and weakening
economic growth for 1996. The best opportunities continue to be found in
companies that can generate sustainable earnings growth regardless of the state
of the global economy. Examples of additions to the Fund over the past six
months that we believe fit this steady earner description are Lockheed-Martin, a
U.S. defense contractor; Sky City Casino, a New Zealand gaming company; Office
Depot, a U.S. retailer; and New Straits Times, a Malaysian media company. We
have also added to existing positions in DDI, a Japanese telecommunications
company; Korea Electric Power, a South Korean utility; PowerGen, an electric
utility in the United Kingdom; and, in the United States, the Federal Home Loan
Mortgage Corp.
Despite the positive performance of most of the world's equity markets over
the past year, we believe that valuation levels remain attractive. The primary
support for this view is a favorable inflation outlook and an anticipated
slowing in economic growth which we believe is likely to lead to flat or lower
interest rates over the next six to 12 months. However, with slowing economic
and corporate earnings growth, we feel that stock selection will become
increasingly important. We believe that our bottom-up style of investing is
well-suited for that environment, and that the Fund is favorably positioned in
companies that are likely to show superior earnings growth regardless of the
state of the global economy.
We appreciate your support and welcome any questions or comments you may
have.
Respectfully,
[A Photo of A. Keith Brodkin, [A Photo of David Mannheim,
Chairman and President.] Portfolio Manager.]
[Signature of A. Keith Brodkin] [Signature of David Mannheim]
A. Keith Brodkin David Mannheim
Chairman and President Portfolio Manager
November 10, 1995
3
<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.
TAX FORM SUMMARY
The Fund is estimated to have derived approximately 11% of its ordinary income
from dividends paid by foreign companies, and to have paid foreign taxes
equivalent to approximately 1.5% of its ordinary income.
In January 1996, shareholders will be mailed a Tax Form Summary reporting the
federal tax status of all distributions paid during the calendar year 1995.
For the year ended October 31, 1995, the amount of distributions from income
eligible for the 70% dividends-received deduction for corporations came to 18%.
FEDERAL INCOME TAX INFORMATION ON DISTRIBUTIONS
For the year ended October 31, 1995, distributions from long-term capital gains
are $9,768,970.
4
<PAGE>
PERFORMANCE
The information on the following page illustrates the historical performance of
MFS World Equity Fund Class B shares in comparison to various market indicators.
Fund results in the graph do not reflect the deduction of any contingent
deferred sales charge (CDSC) since the CDSC is not applicable after a six-year
period. Benchmark comparisons are unmanaged and do not reflect any fees or
expenses. You cannot invest in an index. All results reflect the reinvestment of
all dividends and capital gains.
Class A shares were offered effective September 7, 1993. Information on Class A
share performance appears on the next page.
Please note that effective January 3, 1994, Class C shares were offered.
Information on Class C share performance appears on the next page.
In the table on the next page, we have included the average annual total returns
of all global portfolio funds (including the Fund) tracked by Lipper Analytical
Services, Inc. (an independent firm which rates mutual fund performance) for the
applicable time periods. Because these returns do not reflect any applicable
sales charges, we have also included the Fund's results at net asset value (no
sales charge) for comparison.
All results are historical and, therefore, are not an indication of future
results. The investment return and principal value of an investment in a mutual
fund will vary with changes in market conditions, and shares, when redeemed, may
be worth more or less than their original cost. All Class A share results
reflect the applicable expense subsidy which is explained in the Notes to
Financial Statements. Had the subsidy not been in effect, the results would have
been less favorable.
5
<PAGE>
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(For the Period from January 1, 1987 to October 31, 1995)
[Line graph representing the growth of a $10,000 investment for the nine-year
period ended October 31, 1995. The graph is scaled from $0 to $50,000 in $10,000
segments. The years are marked in 12-month segments from 1990 to 1995. There are
four lines drawn to scale. One is a solid line representing MFS World Equity
Fund (Class B), a second line of short dashes represents the S&P 500, a third
line of very short dashes represents the MSCI World Index, and a fourth line of
medium-short dashes represents the Consumer Price Index.]
MFS World Equity Fund (Class B) $25,005
S&P 500 $31,646
MSCI World Index $23,775
Consumer Price Index $13,906
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
Life Of Class
Through
1 Year 3 Years 5 Years 10/31/95
====================================================================================================================================
<S> <C> <C> <C> <C>
MFS World Equity Fund (Class A)
including 5.75% sales charge +3.85% -- -- +7.64% *
- ------------------------------------------------------------------------------------------------------------------------------------
MFS World Equity Fund (Class A)
at net asset value +10.16% -- -- +10.65% *
- ------------------------------------------------------------------------------------------------------------------------------------
MFS World Equity Fund (Class B) With CDSC + +5.13% +13.23% +8.74% +10.82% ++
- ------------------------------------------------------------------------------------------------------------------------------------
MFS World Equity Fund (Class B) Without CDSC +9.07% +14.00% +9.03% +10.82% ++
- ------------------------------------------------------------------------------------------------------------------------------------
MFS World Equity Fund (Class C) +9.20% -- -- +5.11% #
- ------------------------------------------------------------------------------------------------------------------------------------
Average global fund +5.25% +13.69% +11.28% +10.47%
- ------------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Capital International
(MSCI) World Index +10.03% +14.97% +11.02% +10.30%
- ------------------------------------------------------------------------------------------------------------------------------------
Standard & Poor's 500 Composite Index ss +26.41% +14.69% +17.22% +13.93%
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Price Index ss ss +2.81% +2.72% +2.86% +3.80%
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
* For the period from the commencement of offering of Class A shares, September 7, 1993 to October 31, 1995.
+ These returns reflect the applicable Class B CDSC of 4%, 3% and 2% for the 1-, 3- and 5-year periods, respectively, and 0%
for the period commencing December 29, 1986.
++ For the period from the commencement of offering of Class B shares, December 29, 1986 to October 31, 1995.
Benchmark comparisons begin on January 1, 1987.
# For the period from the commencement of offering of Class C shares, January 3, 1994 to October 31, 1995. 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.
ss The Standard & Poor's 500 Composite Index is a popular, unmanaged index of common stock performance.
ss ss The Consumer Price Index is a popular measure of change in prices.
</FN>
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS - October 31, 1995
Common Stocks - 97.2%
================================================================================
Issuer Shares Value
- --------------------------------------------------------------------------------
<S> <C> <C>
U.S. Common Stocks - 27.4%
Aerospace - 2.5%
Allied Signal, Inc. 44,000 $ 1,870,000
Lockheed-Martin Corp. 49,000 3,338,125
------------
$ 5,208,125
- --------------------------------------------------------------------------------
Building Materials - 1.1%
Owens Corning Fiberglass Corp.* 55,000 $ 2,330,625
- --------------------------------------------------------------------------------
Business Services - 1.8%
Ceridian Corp.* 86,000 $ 3,741,000
- --------------------------------------------------------------------------------
Cellular Telephones - 1.1%
AirTouch Communications, Inc.* 85,000 $ 2,422,500
- --------------------------------------------------------------------------------
Computer Hardware - Systems - 1.7%
Compaq Computer Corp.* 65,000 $ 3,623,750
- --------------------------------------------------------------------------------
Computer Software - Systems - 3.4%
Adobe Systems, Inc. 44,300 $ 2,525,100
BMC Software, Inc.* 73,700 2,625,563
Compuware Corp.* 90,900 2,067,975
------------
$ 7,218,638
- --------------------------------------------------------------------------------
Consumer Goods and Services - 2.0%
American Greetings Corp., "A" 69,000 $ 2,173,500
Philip Morris Cos., Inc. 25,000 2,112,500
------------
$ 4,286,000
- --------------------------------------------------------------------------------
Defense Electronics - 1.5%
Loral Corp. 107,000 $ 3,169,875
- --------------------------------------------------------------------------------
Entertainment - 0.8%
Viacom, Inc., "B"* 34,251 $ 1,712,550
- --------------------------------------------------------------------------------
Financial Institutions - 1.3%
Federal Home Loan Mortgage Corp. 38,500 $ 2,666,125
- --------------------------------------------------------------------------------
Food and Beverage Products - 1.2%
Ralston-Ralston Purina Group 42,000 $ 2,493,750
- --------------------------------------------------------------------------------
Insurance - 1.9%
CIGNA Corp. 31,000 $ 3,072,875
Equitable of Iowa Cos 25,700 899,500
------------
$ 3,972,375
- --------------------------------------------------------------------------------
Machinery - 1.1%
Ingersoll Rand Co. 67,000 $ 2,370,125
- --------------------------------------------------------------------------------
Medical and Health Technology and Services - 1.6%
United Healthcare Corp. 65,000 $ 3,453,125
- --------------------------------------------------------------------------------
Oil - 1.1%
Amoco Corp. 37,000 $ 2,363,375
- --------------------------------------------------------------------------------
Retail - 3.3%
Federated Department Store, Inc.* 170,000 $ 4,313,750
Office Depot, Inc.* 90,800 2,599,150
------------
$ 6,912,900
- --------------------------------------------------------------------------------
Total U.S. Common Stocks (Identified Cost, $48,242,757) $ 57,944,838
- --------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS - CONTINUED
Common Stocks - continued
================================================================================
Issuer Shares Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Foreign Common Stocks - 69.8%
Argentina - 0.1%
Mirgor Sacifia, ADR (Auto Parts)* 97,600 $ 195,200
- --------------------------------------------------------------------------------
Australia - 6.9%
Australia & New Zealand Bank Group Ltd.
(Banks and Credit Cos.) 1,115,014 $ 4,666,893
QBE Insurance Group Ltd. (Insurance) 571,400 2,522,046
Seven Network Ltd. (Broadcasting) 1,064,000 2,761,092
Sydney Harbour Casino Ltd. (Entertainment)* 1,733,100 2,136,601
Woolworths Ltd. (Retail) 1,070,736 2,550,419
------------
$ 14,637,051
- --------------------------------------------------------------------------------
Canada - 0.9%
Rogers Communications, Inc., "B"
(Telecommunications)* 191,900 $ 1,874,023
- --------------------------------------------------------------------------------
Chile - 0.5%
Administradora de Fondos de Pensiones
Provida S.A., ADR (Finance) 47,200 $ 1,156,400
- --------------------------------------------------------------------------------
Finland - 0.7%
Aamulehti Yhtymae Oy II (Publishing) 59,900 $ 1,411,804
- --------------------------------------------------------------------------------
France - 4.4%
Essilor International
(Medical and Health Products) 17,800 $ 3,299,334
Essilor International, Preferred
(Medical and Health Products) 15,400 1,983,943
Michelin, "B" (Tire and Rubber)* 45,000 1,820,277
Pinault-Printemps, S.A., (Retail) 10,000 2,171,019
------------
$ 9,274,573
- --------------------------------------------------------------------------------
Germany - 3.4%
BASF AG (Chemicals) 9,700 $ 2,128,915
Hornbach Baumarkt AG (Retail) 43,680 2,202,770
Tarkett AG (Building Materials)* 31,600 754,144
Volkswagen AG (Automotive) 6,500 2,047,553
------------
$ 7,133,382
- --------------------------------------------------------------------------------
Hong Kong - 2.6%
Consol Electric Power Asia Ltd., ADR
(Utilities - Electric) 57,000 $ 1,154,250
Giordano Holdings Ltd. (Retail) 2,049,000 1,696,280
Peregrine Investment Holdings (Finance) 769,000 979,802
Varitronix International Ltd. (Manufacturing) 923,000 1,761,040
------------
$ 5,591,372
- --------------------------------------------------------------------------------
Italy - 1.8%
Telecom Italia Mobile (Telecommunications) 1,276,500 $ 2,147,571
Telecom Italia Mobile, Saving Shares
(Telecommunications) 1,421,000 1,581,868
------------
$ 3,729,439
- --------------------------------------------------------------------------------
Japan - 11.2%
Bridgestone Corp. (Tire and Rubber) 137,000 $ 1,903,709
Canon, Inc. (Office Equipment) 44,000 753,498
DDI Corp. (Telecommunications) 649 5,264,909
Daiwa House Industrial Co. (Housing) 72,000 1,077,992
East Japan Railway Co. (Railroads) 347 1,640,092
Kinki Coca-Cola (Beverages) 80,000 962,912
Kirin Beverage Corp. (Beverages) 96,000 1,456,111
MOS Food Services (Restaurants) 49,000 1,227,517
Matsushita Electric Industrial Co.
(Electrical Equipment) 128,000 1,816,225
Murata Manufacturing (Electronics) 59,000 2,072,708
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS - CONTINUED
Common Stocks - continued
================================================================================
Issuer Shares Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Foreign Common Stocks - Continued
Japan - Continued
Nissen Corp. (Retail) 54,600 $ 1,576,182
Omron Tateisi Electronic (Electronics) 113,000 2,642,822
Osaka Sanso Kogyo (Chemicals) 392,000 1,246,697
------------
$ 23,641,374
- --------------------------------------------------------------------------------
Korea - 3.2%
Hanil Cement Manufacturing Co.
(Building Materials) 21,100 $ 1,227,225
Korea Electric Power (Utilities - Electric) 61,000 2,762,580
Korea Mobile Telecom, GDR (Telecommunications)* 49,500 1,819,125
Shin Won Corp. (Textiles)* 21,670 945,708
------------
$ 6,754,638
- --------------------------------------------------------------------------------
Malaysia - 1.3%
Maruichi Malaysia Steel Tube BHD
(Metal Fabricate/Hardware) 144,000 $ 555,591
New Straits Times Press BHD (Publishing) 585,000 1,842,520
Petronas Gas Berhad (Gas/Oils)* 100,200 339,260
------------
$ 2,737,371
- --------------------------------------------------------------------------------
Netherlands - 3.8%
Getronics NV (Computer Software - Services) 65,004 $ 3,102,295
IHC Caland NV (Machinery)* 62,000 1,764,355
Koninklijke Nedlloyd NV (Transportation) 15,475 393,300
Royal Dutch Petroleum Co. (Oils) 23,000 2,855,685
------------
$ 8,115,635
- --------------------------------------------------------------------------------
New Zealand - 3.4%
Lion Nathan Ltd. (Food and Beverage) 1,882,000 $ 4,277,558
Sky City Ltd. (Entertainment)* 140,000 2,911,481
------------
$ 7,189,039
- --------------------------------------------------------------------------------
Norway - 0.7%
Tomra Systems A/S (Machinery) 241,500 $ 1,524,528
- --------------------------------------------------------------------------------
Singapore - 1.6%
Hong Leong Finance Ltd. (Finance) 700,000 $ 2,121,813
Singapore Press Holdings (Publishing) 76,000 1,189,518
------------
$ 3,311,331
- --------------------------------------------------------------------------------
Spain - 4.9%
Acerinox, S.A. (Iron and Steel) 29,500 $ 3,110,865
Acerinox, S.A. - New (Iron and Steel)* 2,950 310,845
Cubiertas Y Mzov S.A.
(Engineering - Construction) 39,000 2,280,197
Fabrica Autom Renault de Esp (Automotive) 36,000 959,410
Iberdrola (Utilities - Electric) 216,000 1,629,520
Repsol S.A. (Oils) 71,000 2,122,140
------------
$ 10,412,977
- --------------------------------------------------------------------------------
Sweden - 11.3%
Asea AB, "B" (Electrical Equipment) 48,000 $ 4,741,295
Astra AB, "B" (Pharmaceuticals) 241,000 8,722,535
Hennes & Mauritz AB, "B" (Retail) 17,000 1,112,636
Marieberg Tidings, "A" (Publishing) 80,000 1,906,169
Nordbanken AB (Banks and Credit Cos.)* 40,800 609,130
Sparbanken Svergie AB, "A"
(Banks and Credit Cos.) 320,900 3,387,522
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS - CONTINUED
Common Stocks - continued
================================================================================
Issuer Shares Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Foreign Common Stocks - Continued
Sweden - Continued
TV 4 AB (Broadcasting) 156,200 $ 3,415,572
------------
$ 23,894,859
- --------------------------------------------------------------------------------
Thailand - 0.7%
Total Access Communications
(Telecommunications)* 232,200 $ 1,404,810
- --------------------------------------------------------------------------------
United Kingdom - 6.4%
Asda Group PLC (Supermarkets) 1,750,400 $ 2,836,567
Capital Radio PLC (Broadcasting) 163,000 1,167,395
MAI PLC (Broadcasting) 314,000 1,630,786
New London Capital PLC (Insurance) 670,000 910,972
PowerGen PLC (Utilities - Electric) 300,000 2,694,024
PowerGen PLC, Partly Paid Shares
(Utilities - Electric)* 517,100 2,092,890
Storehouse PLC (Retail) 451,000 2,139,093
------------
$ 13,471,727
- --------------------------------------------------------------------------------
Total Foreign Common Stocks
(Identified Cost, $127,377,914) $147,461,533
- --------------------------------------------------------------------------------
Total Common Stocks (Identified Cost, $175,620,671) $205,406,371
- --------------------------------------------------------------------------------
Short-Term Obligation - 2.3%
================================================================================
Principal Amount
(000 Omitted)
- --------------------------------------------------------------------------------
General Electric Co., due 11/01/95
at Amortized Cost $ 4,975 $ 4,975,000
- --------------------------------------------------------------------------------
Total Investments (Identified Cost, $180,595,671) $210,381,371
Other Assets, Less Liabilities - 0.5% 976,331
- --------------------------------------------------------------------------------
Net Assets - 100.0% $211,357,702
- --------------------------------------------------------------------------------
<FN>
* Non-income producing security.
+ SEC Rule 144A restriction.
</FN>
</TABLE>
See notes to financial statements
10
<PAGE>
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Statement of Assets and Liabilities
================================================================================
October 31, 1995
- --------------------------------------------------------------------------------
<S> <C>
Assets:
Investments, at value (identified cost, $180,595,671) $210,381,371
Foreign currency, at value (identified cost, $304,436) 310,452
Receivable for investments sold 8,872,109
Receivable for Fund shares sold 234,867
Dividends receivable 188,295
Other assets 57,114
------------
Total assets $220,044,208
============
Liabilities:
Cash overdraft $ 1,678,213
Payable for investments purchased 2,477,405
Payable for Fund shares reacquired 2,387,676
Net payable for forward foreign currency exchange
contracts sold 1,735,682
Net payable for forward foreign currency exchange
contracts purchased 87,147
Payable to affiliates -
Management fee 17,236
Shareholder servicing agent fee 3,749
Distribution fee 57,828
Accrued expenses and other liabilities 241,570
------------
Total liabilities $ 8,686,506
------------
Net assets $211,357,702
============
Net assets consist of:
Paid-in capital $173,636,411
Unrealized appreciation on investments and translation of
assets and liabilities in foreign currencies 27,965,785
Accumulated undistributed net realized gain
on investments and foreign currency transactions 9,826,961
Accumulated net investment loss (71,455)
------------
Total $211,357,702
============
Shares of beneficial interest outstanding 12,747,887
============
Class A shares:
Net asset value and redemption price per share
(net assets of $52,163,775 / 3,127,282 shares of
beneficial interest outstanding) $16.68
======
Offering price per share (100/94.25) $17.70
======
Class B shares:
Net asset value and offering price per share
(net assets of $156,286,219 / 9,444,657 shares of
beneficial interest outstanding) $16.55
======
Class C shares:
Net asset value, offering price, and redemption price per share
(net assets of $2,907,708 / 175,948 shares of
beneficial interest outstanding) $16.53
======
</TABLE>
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
11
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Statement of Operations
================================================================================
Year Ended October 31, 1995
- --------------------------------------------------------------------------------
<S> <C>
Net investment income:
Income -
Dividends $ 3,976,263
Interest 773,851
Foreign taxes withheld (419,051)
------------
Total investment income $ 4,331,063
------------
Expenses -
Management fee $ 1,981,096
Trustees' compensation 40,737
Shareholder servicing agent fee (Class A) 48,255
Shareholder servicing agent fee (Class B) 360,720
Shareholder servicing agent fee (Class C) 2,964
Distribution and service fee (Class A) 52,913
Distribution and service fee (Class B) 1,639,636
Distribution and service fee (Class C) 19,762
Custodian fee 194,666
Printing 71,850
Postage 60,712
Auditing fees 52,394
Legal fees 10,405
Miscellaneous 230,781
------------
Total expenses $ 4,766,891
Fees paid indirectly (29,188)
Reduction of expenses by distributor (14,837)
------------
Net expenses $ 4,722,866
------------
Net investment loss $ (391,803)
------------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $ 12,603,757
Foreign currency transactions (2,719,875)
------------
Net realized gain on investments and
foreign currency trans $ 9,883,882
------------
Change in unrealized appreciation (depreciation) -
Investments $ 9,323,449
Translation of assets and liabilities in foreign currencies (264,952)
------------
Net unrealized gain on investments $ 9,058,497
------------
Net realized and unrealized gain
on investments and foreign currency $ 18,942,379
------------
Increase in net assets from operations $ 18,550,576
============
</TABLE>
See notes to financial statements
12
<PAGE>
FINANCIAL STATEMENTS - CONTINUED
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
================================================================================
Year Ended October 31, 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment loss $ (391,803) $ (1,663,017)
Net realized gain on investments and
foreign currency transactions 9,883,882 20,711,422
Net unrealized gain (loss) on investments
and foreign currency translation 9,058,497 (10,314,501)
------------ ------------
Increase in net assets from operations $ 18,550,576 $ 8,733,904
------------ ------------
Distributions declared to shareholders -
From net realized gain on investments and
foreign currency transactions (Class A) $ (2,000,929) $ (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 $(18,013,199) $ (6,561,668)
------------ ------------
Fund share (principal) transactions -
Net proceeds from sale of shares $150,342,597 $151,326,611
Net asset value of shares issued to
shareholders in reinvestment
of distributions 16,618,722 5,986,233
Cost of shares reacquired (149,986,942) (113,290,222)
------------ ------------
Increase in net assets from
Fund share transactions $ 16,974,377 $ 44,022,622
------------ ------------
Total increase in net assets $ 17,511,754 $ 46,194,858
Net assets:
At beginning of period 193,845,948 147,651,090
------------ ------------
At end of period (including net investment
loss of $71,455 and $28,650, respectively) $211,357,702 $193,845,948
============ ============
</TABLE>
See notes to financial statements
13
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights
===================================================================================================================================
Year Ended
Year Ended October 31, October 31,
--------------------------------- ---------------------
1995 1994 1993* 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
Class A Class B
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <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
-------- -------- -------- -------- --------
Income from investment operations#-
Net investment income (loss) $ 0.09 $ 0.03 $ 0.01 $ (0.05) $ (0.17)
Net realized and unrealized gain (loss)
on investments 1.37 1.13 0.84 1.37 1.13
-------- -------- -------- -------- --------
Total from investment operations $ 1.46 $ 1.16 $ 0.85 $ 1.32 $ 0.96
Less distributions declared to shareholders -
In excess of net investment income $ -- $ (0.07) $ -- $ -- $ (0.01)
From net realized gain on investments (1.73) (0.70) -- (1.55) (0.70)
-------- -------- -------- -------- --------
Total distributions declared
to shareholders $ (1.73) $ (0.77) $ -- $ (1.55) $ (0.71)
-------- -------- -------- -------- --------
Net asset value - end of period $ 16.68 $ 16.95 $ 16.56 $ 16.55 $ 16.78
======== ======== ======== ======== ========
Total return+++ 10.16% 7.03% 5.41%++ 9.07% 5.91%
Ratios (to average net assets)/Supplemental data:
Expenses##= 1.61% 1.54% 1.68%+ 2.55% 2.58%
Net investment income (loss)= 0.58% 0.15% 0.94%+ (0.35)% (1.01)%
Portfolio turnover 73% 99% 70% 73% 99%
Net assets at end of period (000 omitted) $ 52,164 $ 16,968 $ 2,076 $156,286 $175,438
<FN>
* For the period from the commencement of offering of Class A shares, September 7, 1993 to October 31, 1993.
+ Annualized.
++ Not annualized.
+++ 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.
# Per share data for the periods subsequent to October 31, 1993 is based on average shares outstanding.
## For fiscal years ending after September 1, 1995, the Fund's expenses are calculated without reduction for fees paid indirectly.
= The distributor did not impose a portion of its fee for Class A shares amounting to $0.0072 per share for the year ended
October 31, 1995. If this fee had been incurred by the Fund, the ratio of expenses and net investment income to average net
assets would have been 1.66% and 0.53%, respectively.
</FN>
</TABLE>
See notes to financial statements
14
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights - continued
====================================================================================================================================
Period Ended Year Ended November 30,
October 31, ----------------------------------------------
1993* 1992 1991 1990 1989
- ------------------------------------------------------------------------------------------------------------------------------------
Class B
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $ 13.50 $ 12.40 $ 12.94 $ 12.96 $ 11.21
-------- -------- -------- -------- --------
Income from investment operations#-
Net investment income (loss) $ (0.10) $ (0.04) $ 0.17 $ 0.13 $ 0.09
Net realized and unrealized gain (loss)
on investments 3.28 1.17 (0.37) 0.14 2.03
-------- -------- -------- -------- --------
Total from investment operations $ 3.18 $ 1.13 $ (0.20) $ 0.27 $ 2.12
-------- -------- -------- -------- --------
Less distributions declared to shareholders -
From net investment income $ -- $ -- $ -- $ -- $ (0.21)
From net realized gain on investments (0.15) (0.03) (0.15) (0.29) (0.12)
From paid-in capital -- -- (0.19) -- (0.04)
-------- -------- -------- -------- --------
Total distributions declared
to shareholders $ (0.15) $ (0.03) $ (0.34) $ (0.29) $ (0.37)
-------- -------- -------- -------- --------
Net asset value - end of period $ 16.53 $ 13.50 $ 12.40 $ 12.94 $ 12.96
======== ======== ======== ======== ========
Total return 23.80%++ 9.13% (1.57)% 2.02% 19.58%
Ratios (to average net assets)/Supplemental data:
Expenses## 2.66+ 2.91% 2.88% 2.93% 3.05%
Net investment income (loss) (0.71)%+ (0.31)% 1.35% 1.07% 0.77%
Portfolio turnover 70% 110% 160% 173% 190%
Net assets at end of period (000 omitted) $145,575 $101,550 $ 82,980 $ 81,505 $ 50,827
<FN>
* For the eleven months ended October 31, 1993.
+ Annualized.
++ Not annualized.
# Per share data for the period subsequent to October 31, 1993 is based on average shares outstanding.
## For fiscal years ending after September 1, 1995, the Fund's expenses are calculated without reduction for fees paid indirectly.
</FN>
</TABLE>
See notes to financial statements
15
<PAGE>
FINANCIAL STATEMENTS - CONTINUED
<TABLE>
<CAPTION>
Financial Highlights - continued
===================================================================================================================================
Year Period
Year Ended Ended Ended
November 30, October October
-------------------- 31, 31,
1988 1987** 1995 1994***
- -----------------------------------------------------------------------------------------------------------------------------------
Class B Class C
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $ 10.12 $ 8.47 $ 16.80 $ 16.75
-------- -------- -------- --------
Income from investment operations#-
Net investment income (loss) $ 0.14 $ (0.02) $ (0.05) $ (0.09)
Net realized and unrealized gain (loss)
on investments 0.95 1.67 1.37 0.14
-------- -------- -------- --------
Total from investment operations $ 1.09 $ 1.65 $ 1.32 $ 0.05
-------- -------- -------- --------
Less distributions declared to shareholders
from net realized gain on investments $ -- $ -- $ (1.59) $ --
-------- -------- -------- --------
Total distributions declared
to shareholders $ -- $ -- $ (1.59) $ --
-------- -------- -------- --------
Net asset value - end of period $ 11.21 $ 10.12 $ 16.53 $ 16.80
======== ======== ======== ========
Total return 10.77% 19.48%++ 9.20% 0.30%++
Ratios (to average net assets)/Supplemental data:
Expenses## 2.48% 2.50% 2.49% 2.55%
Net investment income (loss) 1.29% (0.29)% (0.31)% (0.72)%
Portfolio turnover 276% 272% 73% 99%
Net assets at end of period (000 omitted) $ 42,806 $ 37,248 $ 2,908 $ 1,440
<FN>
** For the period from the commencement of investment operations, December 29, 1986 to November 30, 1987.
*** For the period from the commencement of offering of Class C shares, January 3, 1994 to October 31, 1994.
+ Annualized.
++ Not annualized.
# Per share data for the period subsequent to October 31, 1993 is based on average shares outstanding.
## For fiscal years ending after September 1, 1995, the Fund's expenses are calculated without reduction for fees paid indirectly.
</FN>
</TABLE>
See notes to financial statements
16
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(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 market 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. 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.
17
<PAGE>
NOTES TO FINANCIAL STATEMENTS - continued
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 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.
Fees Paid Indirectly - The Fund's custodian bank calculates its fee based on the
Fund's average daily net assets. The fee is reduced according to a fee
arrangement, which provides for custody fees to be reduced based on a formula
developed to measure the value of cash deposited with the custodian by the Fund.
This amount is shown as a reduction of expenses on the Statement of Operations.
Tax Matters and Distributions - The Fund's policy is to comply with the
provisions of the Internal Revenue Code (the Code) applicable to regulated
investment companies and to distribute to shareholders all of its 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. The Fund
has elected to pass through to shareholders foreign
18
<PAGE>
NOTES TO FINANCIAL STATEMENTS - continued
income taxes paid. This election increases the taxable distributions of the Fund
by the amount of the foreign taxes paid. An individual shareholder who itemizes
deductions, or a corporate shareholder, will be able to claim an offsetting
deduction or a tax credit (but not both) on their federal income tax returns.
Individuals who do not itemize deductions may claim a foreign tax credit but not
a deduction. The foreign source income is considered passive income for the
purpose of computing foreign tax credit limitations. 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. During the year ended October 31, 1995, $348,998 was reclassified from
accumulated net realized gain on investments to accumulated net investment loss
due to differences between book and tax accounting for investment losses and
currency transactions. This change had no effect on the net assets or net asset
value per share.
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. 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.
(3) Transactions with Affiliates
Investment Adviser - The Fund has an investment advisory agreement with
Massachusetts Financial Services Company (MFS) to provide overall investment
advisory and administrative services, and general office facilities. The
management fee is computed daily and paid monthly at an annual rate of 1.00% of
average daily net assets.
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 of its independent Trustees and Mr. Bailey. Included in Trustees'
compensation is a net periodic pension expense of $9,333 for the year ended
October 31, 1995.
19
<PAGE>
NOTES TO FINANCIAL STATEMENTS - continued
Distributor - MFD, a wholly owned subsidiary of MFS, as distributor, received
$17,893 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%
per annum of its average daily net assets attributable to Class A shares in
order that MFD may pay expenses on behalf of the Fund related to the
distribution and servicing of its shares. These expenses include a service fee
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. MFD retains the service fee for accounts
not attributable to a securities dealer which amounted to $1,447 for the year
ended October 31, 1995. MFD is not imposing the 0.10% distribution fee for an
indefinite period. Payments commenced under the Distribution Plan on July 12,
1995, the date that the net assets of the Fund attributable to Class A shares
first exceeded $40 million.
The Class B and Class C distribution plans provide that the Fund will pay MFD a
distribution fee of 0.75% per annum and a service fee of up to 0.25% per annum,
of the Fund's average daily net assets attributable to Class B and Class C
shares. MFD will pay to securities dealers that enter into a sales agreement
with MFD all or a portion of the service fee attributable to Class B and Class C
shares, and will pay to such securities dealers all of the distribution fee
attributable to Class C shares. The service fee is intended to be additional
consideration for services rendered by the dealer with respect to Class B and
Class C shares. MFD retains the service fee for accounts not attributable to a
securities dealer, which amounted to $45,840 and $391 for Class B and C shares,
respectively, for the year ended October 31, 1995. Fees incurred under the
distribution plans during the year ended October 31, 1995 were 1.00% of average
daily net assets attributable to Class B and Class C shares on an annualized
basis.
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 year ended October 31, 1995, were $198 and $235,884
for Class A shares and Class B shares, respectively.
Shareholder Servicing Agent - MFSC, a wholly owned subsidiary of MFS, earns a
fee for its services as shareholder servicing agent. The fee is calculated as a
percentage of the average daily net assets of each class of share 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.
20
<PAGE>
NOTES TO FINANCIAL STATEMENTS - continued
(4) Portfolio Securities
Purchases and sales of investments, other than U.S. government securities,
purchased option transactions and short-term obligations, aggregated
$137,498,879 and $139,413,194, 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 $180,651,795
============
Gross unrealized appreciation $ 37,336,595
Gross unrealized depreciation (7,550,895)
------------
Net unrealized appreciation $ 29,785,700
============
(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 Year Ended October 31, 1995 Year Ended October 31, 1994
--------------------------- ---------------------------
Shares Amount Shares Amount
===================================================================================================
<S> <C> <C> <C> <C>
Shares sold 4,007,859 $ 63,217,135 1,978,367 $ 33,143,923
Shares issued to shareholders
in reinvestment of distributions 129,779 1,883,186 9,733 162,345
Shares reacquired (2,011,280) (32,143,857) (1,112,569) (18,679,384)
---------- ------------- ---------- ------------
Net increase 2,126,358 $ 32,956,464 875,531 $ 14,626,884
========== ============= ========== ============
Class B Shares Year Ended October 31, 1995 Year Ended October 31, 1994
--------------------------- ---------------------------
Shares Amount Shares Amount
===================================================================================================
Shares sold 5,493,342 $ 85,113,083 6,764,741 $112,853,245
Shares issued to shareholders
in reinvestment of distributions 1,006,721 14,610,342 349,342 5,823,888
Shares reacquired (7,507,506) (117,113,709) (5,466,499) (90,745,071)
---------- ------------- ---------- ------------
Net increase (decrease) (1,007,443) $(17,390,284) 1,647,584 $ 27,932,062
========== ============= ========== ============
Class C Shares Year Ended October 31, 1995 Year Ended October 31, 1994*
--------------------------- ---------------------------
Shares Amount Shares Amount
===================================================================================================
Shares sold 128,767 $ 2,012,379 319,076 $ 5,329,443
Shares issued to shareholders
in reinvestment of distributions 8,646 125,194 -- --
Shares reacquired (47,177) (729,376) (233,364) (3,865,767)
---------- ------------- ---------- ------------
Net increase 90,236 $ 1,408,197 85,712 $ 1,463,676
========== ============= ========== ============
<FN>
*For the period from the commencement of offering of Class C shares, January 3, 1994 to October 31, 1994.
</FN>
</TABLE>
21
<PAGE>
NOTES TO FINANCIAL STATEMENTS - continued
(6) Line of Credit
The Fund entered into an agreement which enables it to participate with other
funds managed by 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 year ended October 31,
1995 was $2,759.
(7) Financial Instruments
The Fund 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 and forward foreign currency exchange
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 October 31, 1995, is as
follows:
<TABLE>
<CAPTION>
Forward Foreign Currency Exchange Contracts
Contracts to Contracts Net Unrealized
Settlement Date Deliver/Receive In Exchange for at Value Depreciation
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales 11/09/95 CAD 5,764,061 $ 4,282,681 $ 4,288,565 $ (5,884)
12/07/95 ESP 1,441,266,599 11,316,123 11,778,031 (461,908)
11/02/95 - 2/02/96 SEK 216,331,210 31,246,604 32,514,494 (1,267,890)
------------ ------------ -------------
$ 46,845,408 $ 48,581,090 $ (1,735,682)
============ ============ =============
Purchases 11/09/95 CAD 3,370,058 $ 2,465,980 $ 2,507,384 $ 41,404
12/07/95 ESP 193,615,450 1,600,723 1,582,225 (18,498)
11/02/95 SEK 85,561,140 13,013,101 12,903,048 (110,053)
------------ ------------ -------------
$ 17,079,804 $ 16,992,657 $ (87,147)
============ ============ =============
</TABLE>
Abbreviations have been used throughout this report to indicate amounts shown in
currencies other than the U.S. Dollar. A list of abbreviations is shown below.
CAD = Canadian Dollars
ESP = Spanish Pesetas
SEK = Swedish Kronor
At October 31, 1995, the Fund had sufficient securities and/or cash to cover any
commitments under these contracts.
22
<PAGE>
NOTES TO FINANCIAL STATEMENTS - continued
(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 October 31, 1995, the
Fund owned the following restricted securities (constituting 2.4% of net assets)
which may not be publicly sold without registration under the Securities Act of
1933 (the 1933 Act). 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>
Date of
Description Acquisition Shares Cost Value
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Consol Electric Power
Asia Ltd., ADR 11/29/93 57,000 $ 923,584 $1,154,250
Korea Mobile Telecom, GDR 3/24/95-3/31/95 49,500 1,291,319 1,819,125
Mirgor Sacifia, ADR 10/20/94 97,600 878,400 195,200
New London Capital PLC 11/12/93 670,000 993,945 910,972
Petronas Gas Berhad 7/31/95 100,200 326,251 339,260
Tarkett AG 6/27/95 31,600 759,383 754,144
==========
$5,172,951
==========
</TABLE>
23
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Trustees of MFS Series Trust VI and Shareholders of MFS World Equity
Fund:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of MFS World Equity Fund (one of the series
constituting MFS Series Trust VI) as of October 31, 1995, the related statement
of operations for the year then ended, the statement of changes in net assets
for the years ended October 31, 1995 and 1994 and the financial highlights for
each of the years in the nine-year period ended October 31, 1995. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of the securities owned at
October 31, 1995, by correspondence with the custodian and brokers; where
replies were not received from brokers, we performed other auditing procedures.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of MFS World Equity
Fund at October 31, 1995, the results of its operations, the changes in its net
assets, and its financial highlights for the respective stated periods in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
December 4, 1995
---------------------------------------------------------------
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.
24
<PAGE>
IT'S EASY TO CONTACT US
[GRAPHIC OMITTED]
MFS AUTOMATED INFORMATION
ACCOUNT INFORMATION:
Call 1-800-MFS-TALK (1-800-637-8255)
anytime.
MARKET OUTLOOK:
Call 1-800-637-4458 anytime for the MFS outlook
on the bond and stock markets.
[GRAPHIC OMITTED]
MFS PERSONAL SERVICE
ACCOUNT SERVICE:
Call 1-800-225-2606 any business day
from 8 a.m. to 8 p.m. Eastern time.
PRODUCT INFORMATION:
Call 1-800-637-2929 any business day
from 9 a.m. to 5 p.m. Eastern time.
SERVICE FOR THE HEARING-IMPAIRED:
Call 1-800-637-6576 any business day
from 9 a.m. to 5 p.m. Eastern time (TDD required).
[GRAPHIC OMITTED]
MFS MAILING ADDRESSES
FOR PERSONAL ACCOUNTS:
MFS Service Center, Inc.
P.O. Box 2281
Boston, MA 02107-9906
FOR IRA ACCOUNTS:
MFS Service Center, Inc.
J.W. McCormack Station
P.O. Box 4501
Boston, MA 02101-9817
25
<PAGE>
A WORD ABOUT MFS PRODUCTS AND SERVICES
MAKING ADDITIONAL INVESTMENTS AT YOUR CONVENIENCE
There are several easy ways to make additional single investments of at
least $50:
o send a check with the lower portion of your account statement
o contact your financial adviser to purchase shares on your behalf
o wire additional investments through your bank; call us first for
instructions.
MAKING ADDITIONAL INVESTMENTS AUTOMATICALLY
By investing a set amount at regular intervals, over time you will buy more
shares when prices are low, and fewer shares when prices are high. Because
dollar cost averaging involves periodic purchases regardless of fluctuating
share prices, you should consider your financial ability to continue investing
in periods of low prices. MFS offers two dollar-cost-averaging programs. See the
prospectus for further details. Dollar cost averaging does not assure a profit
or avoid a loss.
THE AUTOMATIC INVESTMENT PLAN offers a simple way to make regular investments of
at least $50 through automatic withdrawals from your checking account.
THE AUTOMATIC EXCHANGE PLAN automatically exchanges shares from any MFS fund
with $5,000 or more into the same class of shares in up to four other MFS funds.
You choose the amounts of the exchanges (as little as $50) and their frequency.
<TABLE>
<CAPTION>
A HYPOTHETICAL EXAMPLE OF AUTOMATIC MONTHLY INVESTING
COMPOUNDING AT 8% YEAR
Amount 5 Years 10 15 20 25
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$50 3,671 9,064 16,989 28,633 45,742
$75 5,506 13,596 25,483 42,950 68,613
$100 7,341 18,128 33,978 57,266 91,484
$200 14,683 36,257 67,956 114,532 182,968
</TABLE>
For illustration only. Not indicative of future performance of any MFS fund.
For applications or further information call 1-800-225-2606 any business day
from 8 a.m. to 8 p.m. Eastern time.
If you are a participant in a retirement plan, check with your plan sponsor
regarding the availability of these options.
26
<PAGE>
A FINANCIAL ADVISER CAN HELP YOU BE A BETTER INVESTOR
Financial advisers can be valuable resources for their clients, providing
ongoing education and guidance about investments, as well as a wide range of
services. Here are just some of the ways your financial adviser may be able to
help you be a better investor:
# Day-to-day monitoring of your portfolio
# Tax recordkeeping
# In-depth information on fund managers, their track records and their tenure
# Risk/reward analyses of current or potential holdings
# Asset allocation advice
# Construction of a detailed personal financial profile
# Order and confirmation processing
# Information on a fund group's range of shareholder services
# Portfolio adjustments based on lifestyle changes
# Assistance with business retirement planning
# Evaluation of lump-sum distribution options
# Recommendations on a selection of fund groups
# Specialized research and investment information not readily available to
individuals
# In-depth knowledge of markets and products, kept current by ongoing tracking
# Estate, tax, insurance, and business planning
# Help with possible savings on sales charges through breakpoints, rights of
accumulation, and letters of intent
27
<PAGE>
MFS INVESTMENT OPPORTUNITIES
MUTUAL FUNDS
MFS Family of Funds[Registration Mark], shown on the facing page, falls into the
eight general categories below, all offer full-time professional management, a
diversified portfolio, and a wide array of shareholder services.
STOCK FUNDS seek growth of capital rather than income through investments in
stocks.
STOCK AND BOND FUNDS seek current income and growth of capital through
investments in both stocks and bonds.
BOND FUNDS seek current income through investments in debt securities.
WORLD FUNDS seek stock, balanced, and bond fund objectives through investments
in U.S. and foreign stocks and bonds.
LIMITED-MATURITY FUNDS seek current income and preservation of capital through
investments in debt securities with remaining
maturities of five years or less.
NATIONAL TAX-FREE BOND FUNDS seek current income exempt from federal income tax
through investments in debt securities issued by states and municipalities. [1]
STATE TAX-FREE BOND FUNDS seek current income exempt from federal and state
income taxes through investments in debt securities issued by a single state and
its municipalities. [1]
MONEY MARKET FUNDS seek preservation of capital and current income through
investments in short-term debt securities. [2]
To determine which MFS fund may be appropriate for you, please contact your
financial adviser, who can help you relate these investment opportunities to
your financial goals. If you prefer, you may call MFS Investor Information for
literature [3] on MFS products and services: 1-800-637-2929, from 9 a.m. to
5 p.m. Eastern time any business day (leave a message any time).
[1] A small portion of the income may be subject to federal, state and/or
alternative minimum tax.
[2] Investments in money market funds are not issued or guaranteed by the U.S.
government and there is no assurance that the fund will be able to maintain
a stable net asset value.
[3] Including a prospectus containing more complete information including
charges and expenses. Read the prospectus carefully before investing.
28
<PAGE>
THE MFS FAMILY OF FUNDS [Registration Mark]
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.
STOCK
================================================================================
Massachusetts Investors Trust
- --------------------------------------------------------------------------------
Massachusetts Investors Growth Stock Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] Capital Growth Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] Emerging Growth Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] Gold & Natural Resources Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] Growth Opportunities Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] Managed Sectors Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] OTC Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] Research Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] Value Fund
- --------------------------------------------------------------------------------
STOCK AND BOND
================================================================================
MFS [Registration Mark] Total Return Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] Utilities Fund
- --------------------------------------------------------------------------------
BOND
================================================================================
MFS [Registration Mark] Bond Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] Government Mortgage Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] Government Securities Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] High Income Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] Intermediate Income Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] Strategic Income Fund
(formerly MFS [Registration Mark] Income & Opportunity Fund)
- --------------------------------------------------------------------------------
LIMITED MATURITY BOND
================================================================================
MFS [Registration Mark] Government Limited Maturity Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] Limited Maturity Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] Municipal Limited Maturity Fund
- --------------------------------------------------------------------------------
WORLD
================================================================================
MFS [Registration Mark] World Asset Allocation Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] World Equity Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] World Governments Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] World Growth Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] World Total Return Fund
- --------------------------------------------------------------------------------
NATIONAL TAX-FREE BOND
================================================================================
MFS [Registration Mark] Municipal Bond Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] Municipal High Income Fund
(closed to new investors)
- --------------------------------------------------------------------------------
MFS [Registration Mark] Municipal Income Fund
- --------------------------------------------------------------------------------
STATE TAX-FREE BOND
================================================================================
Alabama, Arkansas, California, Florida, Georgia, Louisiana, Maryland,
Massachusetts, Mississippi, New York, North Carolina, Pennsylvania, South
Carolina, Tennessee, Texas, Virginia, Washington, West Virginia
- --------------------------------------------------------------------------------
MONEY MARKET
================================================================================
MFS [Registration Mark] Cash Reserve Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] Government Money Market Fund
- --------------------------------------------------------------------------------
MFS [Registration Mark] Money Market Fund
- --------------------------------------------------------------------------------
<PAGE>
MFS [Registration Mark] WORLD [Dalbar Logo] Bulk Rate
EQUITY FUND TOP RATED SERVICE U.S. Postage
P A I D
500 Boylston Street Permit #55638
Boston, MA 02116 Boston, MA
[MFS Logo]
THE FIRST NAME IN MUTUAL FUNDS
MWE-2 12/95/37M 04/204/304
<PAGE>
