<PAGE>
[Logo]
THE FIRST NAME IN MUTUAL FUNDS Semiannual Report
April 30, 1996
MFS(R) UTILITIES FUND
[Graphic Omitted]
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<TABLE>
MFS(R) UTILITIES FUND
<S> <C>
TRUSTEES SECRETARY
A. Keith Brodkin* - Chairman and President Stephen E. Cavan*
Richard B. Bailey* - Private Investor; ASSISTANT SECRETARY
Former Chairman and Director (until 1991), James R. Bordewick, Jr.*
Massachusetts Financial Services Company;
Director, Cambridge Bancorp; Director, CUSTODIAN
Cambridge Trust Company State Street Bank and Trust Company
Marshall N. Cohan - Private Investor INVESTOR INFORMATION
Lawrence H. Cohn, M.D. - Chief of Cardiac Surgery, For MFS stock and bond market outlooks,
Brigham and Women's Hospital; call toll free: 1-800-637-4458 anytime from
Professor of Surgery, Harvard Medical School a touch-tone telephone.
The Hon. Sir J. David Gibbons, KBE - Chief For information on MFS mutual funds,
Executive Officer, Edmund Gibbons Ltd.; call your financial adviser or, for an
Chairman, Bank of N.T. Butterfield & Son Ltd. information kit, call toll free:
1-800-637-2929 any business day from
Abby M. O'Neill - Private Investor; 9 a.m. to 5 p.m. Eastern time (or leave
Director, Rockefeller Financial Services, Inc. a message anytime).
(investment advisers)
INVESTOR SERVICE
Walter E. Robb, III - President and Treasurer, MFS Service Center, Inc.
Benchmark Consulting Group (corporate P.O. Box 2281
financial consultants) Boston, MA 02107-9906
Arnold D. Scott* - Senior Executive Vice For general information, call toll free:
President, Director and Secretary, Massachusetts 1-800-225-2606 any business day from
Financial Services Company 8 a.m. to 8 p.m. Eastern time.
For service to speech- or hearing-impaired,
Jeffrey L. Shames* - President and Director, call toll free: 1-800-637-6576 any business
Massachusetts Financial Services Company day from 9 a.m. to 5 p.m. Eastern time.
(To use this service, your phone must be
J. Dale Sherratt - President, Insight Resources, equipped with a Telecommunications Device for
Inc. (acquisition planning specialists) the Deaf.)
Ward Smith - Former Chairman (until 1994), For share prices, account balances and
NACCO Industries; Director, Sundstrand exchanges, call toll free: 1-800-MFS-TALK
Corporation (1-800-637-8255) anytime from a touch-tone
telephone.
INVESTMENT ADVISER
Massachusetts Financial Services Company TOP RATED SERVICE
500 Boylston Street For the second year in a row,
Boston, MA 02116-3741 [DALBAR MFS earned a #1 ranking in
LOGO] DALBAR, Inc.'s Broker/Dealer
DISTRIBUTOR Survey, Main Office Operations
MFS Fund Distributors, Inc. Service Quality category. The
500 Boylston Street firm achieved a 3.49 overall score - on a
Boston, MA 02116-3741 scale of 1 to 4 - in the 1995 survey. A total
of 71 firms responded, offering input on the
PORTFOLIO MANAGER quality of service they receive from 36
Maura Shaughnessy* mutual fund companies nationwide. The survey
contained questions about service quality in
TREASURER 17 categories, including "knowledge of phone
W. Thomas London* service contracts," "accuracy of transaction
processing," and "overall ease of doing
ASSISTANT TREASURER business with the firm."
James O. Yost*
*Affiliated with the Investment Adviser
</TABLE>
<PAGE>
LETTER TO SHAREHOLDERS
Dear Shareholders:
Due to the weakness in the bond market over the past several months, utility
stocks have underperformed the broader equity markets. During the six months
ended April 30, 1996, the return of the Standard & Poor's Utility Index (the
Utility Index), an unmanaged, market-value weighted, total-return index of all
utility stocks in the Standard & Poor's 500 Composite Index (the S&P 500), was
4.28%, while the return of the S&P 500, an unmanaged index of common stock
performance, was 13.76%. Over this same period, Class A shares of the Fund
provided a total return of 9.42%, Class B shares 9.00%, and Class C shares
9.16%. These figures assume the reinvestment of distributions but exclude the
effects of any sales charges. A discussion of the Fund's performance may be
found in the Portfolio Performance and Strategy section of this letter.
Economic Outlook
We believe the U.S. economy will continue to show moderate growth in 1996,
although this growth may be somewhat uneven as we move from quarter to
quarter. Thus, while one quarter may experience an annualized rate of growth
in gross domestic product of less than 1%, another quarter may see annualized
growth in excess of 3% - but, for the year, we believe growth could stay
within our expected range of 2% to 2 1/2%. While some increase in consumer
spending took place in the early months of this year, consumers, who represent
two-thirds of the economy, remain in a somewhat weakened position, due in part
to an increase in consumer installment debt in excess of 30% over the past two
years. Meanwhile, growth is also being constrained by ongoing economic
doldrums in Europe and Japan, important markets for U.S. exports. Here again,
we are seeing a few tentative signs, particularly in Japan, of modest
recoveries that could lead to improved prospects for U.S. exporters. Also, the
"lag effect" of increases in short-term interest rates by the Federal Reserve
Board in 1994 and into 1995 is helping to keep growth in check. This lag
effect can last up to two years, and although the Fed did reduce short-term
rates late last year and earlier this year, we expect it to continue its
diligent anti-inflationary policies. Finally, it appears that inflation is
likely to remain under control this year, due in part to a continued
moderation in wage pressures and the subdued level of economic growth. At the
same time, we believe the current upward pressure on energy prices bears close
scrutiny, as energy is an important component of the inflation outlook.
Interest Rates
Persistent signs of economic weakness led to decreases in short-term interest
rates by the Federal Reserve in late 1995 and early 1996. However, should
signs of economic growth and, particularly, of higher inflation continue, we
would expect the Fed to maintain its anti-inflationary stance. This would
likely mean no further reductions in short-term interest rates, and could lead
to some modest increases. In the beginning of the year, bond markets were
trading in a narrow range, as investors shifted between concern about the lack
of a budget resolution in Washington and hopes that sluggish economic reports
and low inflation might lead to lower interest rates. Later, fixed-income
markets began reacting to conflicting signals regarding the strength of the
economy with more-volatile trading patterns marked by an upward bias in
interest rates. Interest rates may move even higher over the coming months,
but we believe the current rise in bond yields is reaching a point where
fixed-income markets are becoming attractively valued.
Stock Markets
While we do not expect the U.S. stock market to match the extraordinary
performance of 1995, we continue to be positive about the equity markets this
year. Although we believe the equity markets represent fair value at current
levels, the expected slowdown in the growth of corporate earnings and the
increases in interest rates experienced so far this year raise near-term
concerns. Further increases in interest rates, and an acceleration of
inflation coupled with an additional slowdown in corporate earnings growth,
could have a negative effect on the stock markets. However, to the extent that
some earnings disappointments are taken as a sign that the economy is not
overheating, this may prove beneficial for the longer-term health of the
equity markets. We continue to believe that many of the technology-driven
productivity gains that U.S. companies have made in recent years will continue
to enhance corporate America's competitiveness and profitability. Therefore,
we remain quite constructive on the long-term viability of the equity markets.
Portfolio Performance and Strategy
Currently, the Fund remains overweighted in domestic utility stocks relative
to the Utility Index. Although competition is emerging in this industry, the
pace of change is slower than had been anticipated. Along with solid cost
control, we could see relatively strong earnings from the industry for the
next several quarters. The Fund is currently emphasizing electric utilities
that are taking the necessary steps to improve their competitive position. At
this juncture, we believe the mid-tier quality group offers higher risk-
adjusted returns than the high-quality segment. We believe Portland General
and Cinergy, two of the Fund's largest holdings, fit these criteria.
The Fund is underweighted in the regional Bell operating companies because
we believe most of the good news in terms of legislation and growth prospects
are reflected in the prices of the stocks. Although stocks of the long-
distance companies have been solid performers, the Fund remains overweighted
in these stocks because we are seeing accelerating growth in long-distance
volume and more reasonable valuations. Two of the Fund's largest holdings,
AT&T and MCI Communications, are in the long-distance telephone sector.
The Fund is overweighted in gas utility stocks, focusing on pipeline
companies with expansion opportunities and/or those which are improving the
performance of their non-regulated subsidiaries. PanEnergy Corp. and Coastal
Corp. are two such companies.
Currently, 22% of the Fund's total net assets are invested in
international utilities. These investments may offer growth opportunities and
more favorable regulatory treatment than domestic utilities. PowerGen, for
example, the Fund's largest international holding, offers solid earnings and
dividend growth potential.
Finally, Real Estate Investment Trusts (REITs) currently comprise about 9%
of the Fund's total net assets. We believe these investments offer above-
average dividend growth with superior yield potential. In keeping with our
strategy of remaining well diversified, we have invested in storage, health
care, industrial-office and hotel REITs.
We appreciate your support and welcome any questions or comments you may
have.
Respectfully,
- ---------------------------- ----------------------------
[A photo of A. Keith Brodkin [A photo of Maura Shaughnessy
Chairman and President] Portfolio Manager]
- ---------------------------- ----------------------------
/s/ A. Keith Brodkin /s/ Maura Shaughnessy
A. Keith Brodkin Maura Shaughnessy
Chairman and President Portfolio Manager
May 10, 1996
<PAGE>
PORTFOLIO MANAGER PROFILE
Maura Shaughnessy joined MFS in 1991 as an equity analyst. A graduate of Colby
College and the Amos Tuck School of Business at Dartmouth College, she was
promoted to Assistant Vice President in 1992, Vice President in 1993 and has
managed MFS Utilities Fund since March of 1992. Ms. Shaughnessy is a Chartered
Financial Analyst (C.F.A.).
OBJECTIVE AND POLICIES
Under normal market conditions, the Fund seeks capital growth and current
income (income above that available from a portfolio invested entirely in
equity securities).
The Fund invests at least 65% of its assets in equity and debt securities of
both domestic and foreign companies in the utilities industry. These
securities include common stocks, preferred stocks, securities convertible
into common stocks or preferred stocks, and warrants. The Fund may also invest
up to 35% of its assets in debt and equity securities of issuers in other
industries, or in cash.
PERFORMANCE SUMMARY
Because mutual funds like MFS Utilities 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)
2/14/92+-
6 Months 1 Year 4/30/96
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Cumulative Total Return* +9.42% +28.30% +72.72%
- ------------------------------------------------------------------------------
Average Annual Total Return* -- +28.30% +13.85%
- ------------------------------------------------------------------------------
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 4.75% on the initial investment for the 1-year period
ended March 31, 1996 and for the period from February 14, 1992+ to March 31,
1996, were +24.69% and +12.59%, respectively.
+Commencement of investment operations.
*These results do not include the sales charge. If the charge had been
included, the results would have been lower.
<PAGE>
AVERAGE ANNUAL AND CUMULATIVE TOTAL RATES OF RETURN - continued
Class B Investment Results
(net asset value change including reinvested distributions)
9/07/93+-
6 Months 1 Year 4/30/96
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Cumulative Total Return++ +9.00% +27.37% +26.72%
- ------------------------------------------------------------------------------
Average Annual Total Return++ -- +27.37% + 9.35%
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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%
for the 1-year period ended March 31, 1996, and 3% for the period from
September 7, 1993+ to March 31, 1996, were +26.00% and +8.30%, respectively.
Class C Investment Results
(net asset value change including reinvested distributions)
1/03/94+-
6 Months 1 Year 4/30/96
- ------------------------------------------------------------------------------
Cumulative Total Return(S) +9.16% +27.27% +27.17%
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Average Annual Total Return(S) -- +27.27% +10.90%
- ------------------------------------------------------------------------------
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, 1996 and for the period from
January 3, 1994+ to March 31, 1996, were +29.89% and +10.92%, respectively.
All results represent past performance and are not 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. All 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. The subsidy may be rescinded at any time.
+ Commencement of investment operations.
++ These results do not include any CDSC. If the charge had been included, the
results would have been lower.
(S) Class C shares have no initial sales charge but, along with Class B
shares, have higher annual fees and expenses than Class A shares. Class C
share purchases made on or after April 1, 1996 will be subject to a 1%
CDSC if redeemed within 12 months of purchase.
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED) - April 30, 1996
Non-Convertible Bonds - 19.8%
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Principal Amount
Issuer (000 Omitted) Value
- -----------------------------------------------------------------------------
U.S. Bonds - 18.6%
Financial Institutions - 0.4%
Williams Holdings, Inc., 6.25s, 2006 $ 500 $ 461,175
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Telecommunications - 0.5%
Continental Cablevision, 8.875s, 2005 $ 250 $ 266,250
Rogers Cablesystems, Inc., 10.125s, 2012 200 203,000
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$ 469,250
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U.S. Government Guaranteed - 11.9%
Government National Mortgage Association - 0.1%
GNMA, 9s, 2018 $ 109 $ 114,173
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U.S. Treasury Obligations - 11.8%
U.S. Treasury Notes, 9.125s, 1999 $5,000 $ 5,390,600
U.S. Treasury Notes, 7.25s, 2004 530 549,128
U.S. Treasury Notes, 7.875s, 2004 4,000 4,305,640
U.S. Treasury Bonds, 12s, 2005 810 1,097,550
U.S. Treasury Bonds, 7.625s, 2025 700 751,408
-------------
$ 12,094,326
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Total U.S. Government Guaranteed $ 12,208,499
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Utilities - Electric - 4.5%
Arkansas Power & Light, 8.75s, 2026 $ 500 $ 488,570
Commonwealth Edison, 8.375s, 2023 500 490,635
First PV Funding Corp., 10.15s, 2016 500 525,000
Gulf States Utilities Co., 8.7s, 2024 250 255,720
Louisiana Power & Light, 8.75s, 2026 500 500,000
Midland Cogeneration Venture Corp.,
10.33s, 2002 501 525,928
Ohio Edison, 7.375s, 2002 500 499,565
System Energy Resources, 7.38s, 2000 500 483,750
Texas & New Mexico Power Co.,
12.5s, 1999 300 326,871
Utilicorp United, Inc., 8.45s, 1999 500 523,305
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$ 4,619,344
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Utilities - Gas - 1.3%
Coastal Corp., 10.375s, 2000 $ 500 $ 562,245
Coastal Corp., 7.75s, 2035 500 475,865
Oryx Energy Co., 9.3s, 1996 250 250,017
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$ 1,288,127
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Total U.S. Bonds $ 19,046,395
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Foreign Bonds - 1.2%
Argentina - 0.1%
Hidroelectrica Alicura, 8.375s, 1999
(Utilities - Electric)## $ 150 $ 142,500
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Chile - 1.1%
Empresa Electric Del Norts, 7.75s, 2006
(Utilities - Electric)## $ 600 $ 586,500
Empresa Electric Guacolda S.A., 7.6s,
2001 (Utilities - Electric)## 500 498,150
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$ 1,084,650
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Total Foreign Bonds $ 1,227,150
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Total Non-Convertible Bonds (Identified Cost, $20,937,020) $ 20,273,545
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Convertible Bonds - 1.1%
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ADT Operations, Inc., 0s, 2010 (Financial
Institutions) $1,870 $ 965,388
Tele Communications International, 4.5s,
2006 (Telecommunications) 210 196,087
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Total Convertible Bonds (Identified Cost, $969,565) $ 1,161,475
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Shares
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U.S. Stocks - 57.5%
Financial Institutions - 1.5%
Philip Morris Cos., Inc. 17,100 $ 1,541,138
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Real Estate Investment Trusts - 9.2%
FelCor Suite Hotels, Inc. 43,200 $ 1,258,200
First Industrial Realty Trust, Inc. 45,600 1,088,700
Hospitality Properties Trust 59,000 1,504,500
National Health Investors, Inc. 39,200 1,303,400
Public Storage, Inc. 79,300 1,625,650
Reckson Associates Realty Corp. 43,200 1,285,200
TriNet Corporate Realty Trust, Inc. 47,200 1,351,100
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$ 9,416,750
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Utilities - Electric - 19.3%
Allegheny Power System, Inc. 36,900 $ 1,079,325
CMS Energy Corp. 63,000 1,834,875
Cinergy Corp. 69,549 2,016,921
Edison International 68,000 1,088,000
Entergy Corp. 45,000 1,192,500
FPL Group, Inc. 35,000 1,509,375
Illinova Corp. 99,900 2,547,450
NIPSCO Industries, Inc. 36,000 1,291,500
PECO Energy Co. 39,400 980,075
Pinnacle West Capital Corp. 50,700 1,349,887
Portland General Corp. 93,800 2,755,375
Texas Utilities Co. 30,900 $ 1,243,725
Unicom Corp. 29,600 814,000
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$ 19,703,008
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Utilities - Gas - 14.2%
Atlantic Richfield Co. 11,000 $ 1,295,250
Coastal Corp. 60,500 2,397,313
Columbia Gas System, Inc. 29,400 1,429,575
El Paso Natural Gas Co. 24,900 921,300
MCN Corp. 20,000 492,500
Noble Affiliates, Inc. 30,000 1,053,750
Pacific Enterprises 1,600 41,200
PanEnergy Corp. 85,900 2,802,488
Transcanada Pipe Ltd. 40,000 565,000
Union Pacific Resources Group, Inc. 30,000 825,000
Westcoast Energy, Inc. 104,800 1,624,400
Williams Cos., Inc. 21,500 1,099,186
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$ 14,546,962
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Utilities - Telephone - 13.3%
AT&T Corp. 31,800 $ 1,947,750
Ameritech Corp. 21,200 1,237,550
Bell Atlantic Corp. 35,200 2,288,000
BellSouth Corp. 45,000 1,800,000
Frontier Corp. 23,200 733,700
GTE Corp. 43,250 1,875,969
MCI Communications Corp. 88,800 2,614,050
SBC Communications, Inc. 22,000 1,100,000
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$ 13,597,019
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Total U.S. Stocks $ 58,804,877
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Foreign Stocks - 17.8%
Argentina - 1.1%
Central Costenera, ADR (Utilities - Electric)## 34,200 $ 1,162,971
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Chile - 4.3%
Chilectra S.A., ADR (Utilities - Electric) 26,000 $ 1,417,000
Chilgener S.A., ADR (Utilities - Electric) 80,000 1,790,000
Empresa Nacional de Electricidad, ADR
(Utilities - Electric) 63,000 1,228,500
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$ 4,435,500
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Denmark - 1.1%
Tele Danmark, ADR (Utilities - Telephone) 42,900 $ 1,083,225
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Greece - 0.1%
Hellenic Telecomm (Utilities - Telephone) 6,590 $ 110,804
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Italy - 2.0%
Telecom Italia S.p.A. Di Risp
(Utilities - Telephone) 1,444,100 $ 2,024,698
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Philippines - 0.1%
Pilipino Telephone (Utilities - Telephone) 36,000 $ 53,103
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Spain - 2.5%
Empresa Nacional de Electricidad, ADR
(Utilities - Electric) 21,800 $ 1,365,225
Iberdrola (Utilities - Electric) 121,000 1,184,782
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$ 2,550,007
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United Kingdom - 6.6%
East Midlands Electricity (Utilities - Electric) 90,000 $ 848,256
National Power (Utilities - Electric)* 173,600 1,109,946
PowerGen (Utilities - Electric) 173,050 1,452,677
PowerGen - 195 (Utilities - Electric) 350,000 2,200,937
Yorkshire Electricity Group
(Utilities - Electric) 90,000 1,108,216
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$ 6,720,032
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Total Foreign Stocks $ 18,140,340
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Total Common Stocks (Identified Cost, $68,546,383) $ 76,945,217
- -----------------------------------------------------------------------------
Convertible Preferred Stocks - 2.4%
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U.S. Convertible Preferred Stocks - 1.4%
Enron Corp. (Utilities - Gas) 10,900 $ 279,313
MCN Corp., 8.75% (Utilities - Gas) 44,500 1,173,687
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$ 1,453,000
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Foreign Convertible Preferred Stock - 1.0%
Argentina
Compania Inversiones Telephone, 7%
(Utilities - Telephone)## 18,400 $ 1,048,800
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Total Convertible Preferred Stocks (Identified Cost,
$2,255,175) $ 2,501,800
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Short-Term Obligation - 0.5%
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Principal Amount
(000 Omitted)
- -----------------------------------------------------------------------------
Disney (Walt) Co., due 5/01/96, at
Amortized Cost $ 460 $ 460,000
- -----------------------------------------------------------------------------
Total Investments (Identified Cost, $93,168,143) $101,342,037
Other Assets, Less Liabilities - 0.9% 910,912
- -----------------------------------------------------------------------------
Net Assets - 100.0% $102,252,949
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*Non-income producing security.
##SEC Rule 144A restriction.
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS
Statement of Assets and Liabilities (Unaudited)
- ------------------------------------------------------------------------------
April 30, 1996
- ------------------------------------------------------------------------------
Assets:
Investments, at value (identified cost, $93,168,143) $101,342,037
Cash 9,623
Receivable for Fund shares sold 548,295
Receivable for investments sold 1,581,698
Interest and dividends receivable 868,800
Deferred organization expenses 12,474
Other assets 890
------------
Total assets $104,363,817
------------
Liabilities:
Distributions payable $ 47,827
Payable for Fund shares reacquired 701,003
Payable for investments purchased 1,166,238
Payable to affiliates -
Management fee 3,141
Shareholder servicing agent fee 1,420
Distribution fee 65,608
Accrued expenses and other liabilities 125,631
------------
Total liabilities $ 2,110,868
------------
Net assets $102,252,949
============
Net assets consist of:
Paid-in capital $ 87,806,731
Unrealized appreciation on investments and translation of
assets and liabilities in foreign currencies 8,175,144
Accumulated undistributed net realized gain on investments
and foreign currency transactions 6,095,086
Accumulated undistributed net investment income 175,988
------------
Total $102,252,949
============
Shares of beneficial interest outstanding 11,900,345
============
Class A shares:
Net asset value and redemption price per share
(net assets of $54,017,904 / 6,280,156 shares of
beneficial interest outstanding) $8.60
=====
Offering price per share (100/95.25 of net asset value per
share) $9.03
=====
Class B shares:
Net asset value and offering price per share
(net assets of $41,868,516 / 4,879,004 shares of
beneficial interest outstanding) $8.58
=====
Class C shares:
Net asset value, offering price and redemption price per share
(net assets of $6,366,529 / 741,185 shares of beneficial
interest outstanding) $8.59
=====
On sales of $100,000 or more, the offering price of Class A shares is reduced.
A contingent deferred sales charge may be imposed on redemptions of Class A,
Class B and Class C shares.
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Statement of Operations (Unaudited)
- ------------------------------------------------------------------------------
Six Months Ended April 30, 1996
- ------------------------------------------------------------------------------
Net investment income:
Income -
Dividends $1,664,476
Interest 945,688
Foreign taxes withheld (53,883)
----------
Total investment income $2,556,281
----------
Expenses -
Management fee $ 339,281
Trustees' compensation 17,178
Shareholder servicing agent fee (Class A) 39,430
Shareholder servicing agent fee (Class B) 42,876
Shareholder servicing agent fee (Class C) 4,445
Distribution and service fee (Class A) 65,718
Distribution and service fee (Class B) 194,891
Distribution and service fee (Class C) 29,633
Custodian fee 29,026
Auditing fees 16,400
Postage 11,777
Amortization of organization expenses 1,724
Legal fees 1,648
Miscellaneous 80,723
----------
Total expenses $ 874,750
Preliminary reduction of expenses by investment adviser (156,509)
----------
Net expenses $ 718,241
----------
Net investment income $1,838,040
----------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $6,379,041
Foreign currency transactions (18,070)
----------
Net realized gain on investments and foreign currency
transactions $6,360,971
----------
Change in unrealized appreciation -
Investments $ 232,013
Translation of assets and liabilities in foreign currencies 1,471
----------
Net unrealized gain on investments $ 233,484
----------
Net realized and unrealized gain on investments and
foreign currency $6,594,455
----------
Net increase in net assets from operations $8,432,495
==========
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Statement of Changes in Net Assets
- ------------------------------------------------------------------------------
Six Months Ended
April 30, 1996 Year Ended
(Unaudited) October 31, 1995
- ------------------------------------------------------------------------------
Increase (decrease) in net assets:
From operations -
Net investment income $ 1,838,040 $ 2,830,796
Net realized gain on investments and
foreign currency transactions 6,360,971 3,089,196
Net unrealized gain on investments and
foreign currency translation 233,484 9,031,929
------------ ------------
Increase in net assets from operations $ 8,432,495 $ 14,951,921
------------ ------------
Distributions declared to shareholders -
From net investment income (Class A) $ (918,963) $ (1,950,814)
From net investment income (Class B) (523,477) (894,547)
From net investment income (Class C) (81,642) (123,779)
From net realized gain on investments
and foreign currency transactions
(Class A) (1,254,111) --
From net realized gain on investments
and foreign currency transactions
(Class B) (921,552) --
From net realized gain on investments
and foreign currency transactions
(Class C) (134,537) --
----------- -----------
Total distributions declared to
shareholders $ (3,834,282) $ (2,969,140)
------------ ------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 31,184,003 $ 54,589,877
Net asset value of shares issued to
shareholders in reinvestment of
distributions 3,257,078 2,417,592
Cost of shares reacquired (27,442,510) (42,534,317)
------------ ------------
Increase in net assets from Fund
share transactions $ 6,998,571 $ 14,473,152
------------ ------------
Total increase in net assets $ 11,596,784 $ 26,455,933
Net assets:
At beginning of period 90,656,165 64,200,232
------------ ------------
At end of period (including
accumulated undistributed
(distributions in excess of) net
investment income of $175,988 and
$(137,970), respectively) $102,252,949 $ 90,656,165
============ ============
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Financial Highlights
- ------------------------------------------------------------------------------
Six Months Ended Year Ended October 31,
April 30, 1996 ---------------------------------------
(Unaudited) 1995 1994 1993 1992*
- ------------------------------------------------------------------------------
Class A
- ------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
Net asset value -
beginning of period $ 8.20 $ 7.00 $ 7.86 $ 6.68 $ 6.33
------ ------ ------ ------ ------
Income from investment
operations# -
Net investment income(S) $ 0.18 $ 0.31 $ 0.33 $ 0.40 $ 0.17
Net realized and
unrealized gain (loss)
on investments and
foreign currency
transactions 0.57 1.22 (0.63) 1.19 0.30
------ ------ ------ ------ ------
Total from investment
operations $ 0.75 $ 1.53 $(0.30) $ 1.59 $ 0.47
------ ------ ------ ------ ------
Less distributions declared
to shareholders -
From net investment income $(0.15) $(0.33) $(0.35) $(0.38) $(0.12)
From net realized gain
on investments and
foreign currency
transactions (0.20) -- (0.21) (0.03) --
------ ------ ------ ------ ------
Total distributions
declared to
shareholders $(0.35) $(0.33) $(0.56) $(0.41) (0.12)
------ ------ ------ ------ ------
Net asset value - end of
period $ 8.60 $ 8.20 $ 7.00 $ 7.86 $ 6.68
====== ====== ====== ====== ======
Total return(++) 9.42%++ 22.48% (3.89)% 24.39% 11.02%+
Ratios (to average net
assets)/Supplemental
data(S):
Expenses## 1.09%+ 0.83% 0.65% 0.65% 0.65%+
Net investment income 4.11%+ 4.30% 4.58% 4.57% 5.44%+
Portfolio turnover 83% 152% 115% 119% 63%
Average commission rate### $0.0394 -- -- -- --
Net assets at end of
period (000 omitted) $54,018 $52,474 $42,027 $43,423 $12,859
*For the period from the commencement of investment operations, February 14,
1992 to October 31, 1992.
+Annualized.
++Not annualized.
#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.
###Average commission rate is calculated for funds with fiscal years beginning
on or after September 1, 1995.
(++)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.
(S)The investment adviser voluntarily waived a portion of its management fee
for the periods indicated. If this fee had been incurred by the Fund, the
net investment income per share and the ratios would have been:
Net investment income $ 0.16 $ 0.28 $ 0.28 $ 0.31 $ 0.13
Ratios (to average net
assets):
Expenses 1.41%+ 1.23% 1.41% 1.68% 2.63%+
Net investment income 3.79%+ 3.90% 3.82% 4.20% 3.46%+
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Financial Highlights - continued
- ------------------------------------------------------------------------------
Six Months Ended Year Ended October 31,
April 30, 1996 -----------------------------
(Unaudited) 1995 1994 1993**
- ------------------------------------------------------------------------------
Class B
- ------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of
period $ 8.18 $ 6.98 $ 7.84 $ 7.83
------ ------ ------ ------
Income from investment operations# -
Net investment income(S) $ 0.14 $ 0.24 $ 0.25 $ 0.05
Net realized and unrealized gain
(loss) on investments and
foreign currency transactions 0.57 1.22 (0.63) 0.01
------ ------ ------ ------
Total from investment
operations $ 0.71 $ 1.46 $(0.38) $ 0.06
------ ------ ------ ------
Less distributions declared to
shareholders -
From net investment income $(0.11) $(0.26) $(0.27) $(0.05)
From net realized gain on
investments and foreign
currency transactions (0.20) -- (0.21) --
------ ------ ------ ------
Total distributions declared
to shareholders $(0.31) $(0.26) $(0.48) $(0.05)
------ ------ ------ ------
Net asset value - end of period $ 8.58 $ 8.18 $ 6.98 $ 7.84
====== ====== ====== ======
Total return 9.00%++ 21.43% (4.92)% 0.69%++
Ratios (to average net assets)
/Supplemental data(S):
Expenses## 1.91%+ 1.74% 1.72% 1.50%+
Net investment income 3.30%+ 3.33% 3.51% 1.80%+
Portfolio turnover 83% 152% 115% 119%
Average commission rate### $0.0394 -- -- --
Net assets at end of period (000
omitted) $41,869 $33,239 $19,774 $ 5,412
**For the period from the commencement of offering of Class B shares, September
7, 1993 to October 31, 1993.
+Annualized.
++Not annualized.
#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.
###Average commission rate is calculated for funds with fiscal years beginning
on or after September 1, 1995.
(S)The investment adviser voluntarily waived a portion of its management fee for
the periods indicated. If this fee had been incurred by the Fund, the net
investment income per share and the ratios would have been:
Net investment income (loss) $ 0.13 $ 0.21 $ 0.20 $ (0.07)
Ratios (to average net assets):
Expenses 2.23%+ 2.14% 2.48% 3.27%+
Net investment income 2.98%+ 2.93% 2.74% 1.53%+
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Financial Highlights - continued
- --------------------------------------------------------------------------------
Six Months Ended Year Ended October 31,
April 30, 1996 ----------------------
(Unaudited) 1995 1994***
- --------------------------------------------------------------------------------
Class C
- --------------------------------------------------------------------------------
Per share data (for a share outstanding
throughout each period):
Net asset value - beginning of period $ 8.18 $ 6.99 $ 7.48
------ ------ ------
Income from investment operations# -
Net investment income(S) $ 0.15 $ 0.24 $ 0.25
Net realized and unrealized gain (loss) on
investments and foreign currency
transactions 0.57 1.21 (0.54)
------ ------ ------
Total from investment operations $ 0.72 $ 1.45 $(0.29)
------ ------ ------
Less distributions declared to shareholders -
From net investment income $(0.12) $(0.26) $(0.20)
From net realized gain on investments and
foreign currency transactions (0.19) -- --
------ ------ ------
Total distributions declared to
shareholders $(0.31) $(0.26) $(0.20)
------ ------ ------
Net asset value - end of period $ 8.59 $ 8.18 $ 6.99
====== ====== ======
Total return 9.16%++ 21.19% (3.87)%++
Ratios (to average net assets)/Supplemental
data(S):
Expenses## 1.83%+ 1.81% 1.65%+
Net investment income 3.40%+ 3.23% 3.56%+
Portfolio turnover 83% 152% 115%
Average commission rate### $0.0394 -- --
Net assets at end of period (000 omitted) $6,367 $4,943 $2,399
***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 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.
###Average commission rate is calculated for funds with fiscal years beginning
on or after September 1, 1995.
(S)The investment adviser voluntarily waived a portion of its management fee for
the periods indicated. If this fee had been incurred by the Fund, the net
investment income per share and the ratios would have been:
Net investment income $ 0.13 $ 0.22 $ 0.20
Ratios (to average net assets):
Expenses 2.15%+ 2.06% 2.41%+
Net investment income 3.08%+ 2.99% 2.80%+
See notes to financial statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(1) Business and Organization
MFS Utilities Fund (the Fund) is a non-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
General - The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Investments in foreign securities are vulnerable to the effects of changes in
the relative value of the local currency and the U.S. dollar and to the
effects of changes in each country's legal and economic environment.
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.
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.
Foreign Currency Translation - Investment valuations, other assets, and
liabilities initially expressed in foreign currencies are converted each
business day into U.S. dollars based upon current exchange rates. Purchases
and sales of foreign investments, income and expenses are converted into U.S.
dollars based upon currency exchange rates prevailing on the respective dates
of such transactions. Gains and losses attributable to foreign currency
exchange rates on sales of securities are recorded for financial statement
purposes as net realized gains and losses on investments. Gains and losses
attributable to foreign exchange rate movements on income and expenses are
recorded for financial statement purposes as foreign currency transaction
gains and losses. That portion of both realized and unrealized gains and
losses on investments that results from fluctuations in foreign currency
exchange rates is not separately disclosed.
Deferred Organization Expenses - Costs incurred by the Fund in connection with
its organization have been deferred and are being amortized on a straight-line
basis over a five-year period beginning on the date of commencement of
operations of the Fund.
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.
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 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 tax 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. All
shareholders bear the common expenses of the Fund pro rata based on the
settled shares outstanding 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 effective annual rate
of 0.375% of average daily net assets and 6.25% of investment income. The
investment adviser voluntarily waived a portion of its fee, which is reflected
as a preliminary reduction of expenses on the Statement of Operations.
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 and Mr. Bailey.
Included in Trustees' compensation is a net periodic pension expense of $3,178
for the period ended April 30, 1996.
Distributor - MFD, a wholly owned subsidiary of MFS, as distributor, received
$32,607 for the period ended April 30, 1996, 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 $9,718 for the period ended April 30, 1996. Payment of the 0.10%
per annum Class A distribution fee will convene on such date as the Trustees
of the Trust may determine. Fees incurred under the distribution plan during
the period ended April 30, 1996 were 0.25% of average daily net assets
attributable to Class A shares on an annualized basis.
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 $4,401 and
$240 for Class B and Class C shares, respectively, for the period ended April
30, 1996. Fees incurred under the distribution plans during the period ended
April 30, 1996 were 1.00% of average daily net assets attributable to Class B
and Class C shares on an annualized basis.
Purchases over $1 million into Class A shares and certain purchases into
retirement plans are subject to a contingent deferred sales charge in the
event of a shareholder redemption within twelve months following such
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. A contingent deferred sales charge is imposed on
shareholder redemptions of Class C shares in the event of a shareholder
redemption within twelve months of purchase made on or after April 1, 1996.
MFD receives all contingent deferred sales charges. Contingent deferred sales
charges imposed during the period ended April 30, 1996 were $0, $57,289 and $0
for Class A, Class B and Class C shares, respectively.
Shareholder Servicing Agent - MFSC, a wholly owned subsidiary of MFS, earns a
fee for its services as shareholder servicing agent. The fee is calculated as
a percentage of the 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 short-term obligations, were as
follows:
Purchases Sales
- ------------------------------------------------------------------------------
U.S. government securities $21,419,763 $16,507,018
=========== ===========
Investments (non-U.S. government securities) $64,259,314 $63,281,225
=========== ===========
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 $93,584,352
===========
Gross unrealized appreciation $ 9,301,338
Gross unrealized depreciation (1,543,653)
-----------
Net unrealized appreciation $ 7,757,685
===========
(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:
Period Ended Year Ended
April 30, 1996 October 31, 1995
--------------------------- --------------------------
Class A Shares Shares Amount Shares Amount
- -----------------------------------------------------------------------------
Shares sold 1,037,072 $ 8,807,108 2,699,306 $ 20,628,776
Shares issued to
shareholders in
reinvestment of
distributions 218,978 1,826,791 214,458 1,568,560
Shares
reacquired (1,378,494) (11,604,515) (2,514,510) (18,778,516)
--------- ------------ --------- ------------
Net increase
(decrease) (122,444) $ (970,616) 399,254 $ 3,418,820
========= ============ ========= ============
Period Ended Year Ended
April 30, 1996 October 31, 1995
--------------------------- --------------------------
Class B Shares Shares Amount Shares Amount
- -----------------------------------------------------------------------------
Shares sold 2,234,620 $ 18,869,898 4,097,196 $ 30,083,089
Shares issued to
shareholders in
reinvestment of
distributions 149,778 1,244,496 101,411 742,636
Shares
reacquired (1,570,156) (13,306,113) (2,964,865) (21,644,727)
--------- ------------ --------- ------------
Net increase 814,242 $ 6,808,281 1,233,742 $ 9,180,998
========= ============ ========= ============
Period Ended Year Ended
April 30, 1996 October 31, 1995
--------------------------- -------------------------
Class C Shares Shares Amount Shares Amount
- -----------------------------------------------------------------------------
Shares sold 412,083 $ 3,506,997 533,340 $ 3,878,012
Shares issued to
shareholders in
reinvestment of
distributions 22,337 185,791 14,452 106,396
Shares
reacquired (297,281) (2,531,882) (286,745) (2,111,074)
--------- ------------ --------- ------------
Net increase 137,139 $ 1,160,906 261,047 $ 1,873,334
========= ============ ========= ============
(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 period ended April
30, 1996 was $624.
(7) Restricted Securities
The Fund may invest not more than 10% of its net assets in securities which
are subject to legal or contractual restrictions on resale. At April 30, 1996,
the Fund owned the following restricted securities (constituting 3.36% 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. All of these
securities may be offered and sold to "qualified institutional buyers" under
Rule 144A of the 1933 Act.
Date of
Description Acquisition Share/Par Amount Cost Value
- -------------------- ----------------------------------------------------------
Central Costenera,
ADR 12/17/93 - 1/31/95 34,200 $847,969 $1,162,971
Compania Inversiones
Telephone, 7% 2/24/94 18,400 994,600 1,048,800
Empresa Electric Del
Norts, 7.75s, 2006 3/22/96 $600,000 596,706 586,500
Empresa Electric
Guacolda S.A.,
7.6s, 2001 4/22/96 $500,000 500,000 498,150
Hidroelectricia
Alicura, 8.375s, 1999 4/08/94 $150,000 141,187 142,500
----------
$3,438,921
==========
------------------------------------
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>
MFS(R) UTILITIES -------------
FUND [DALBAR LOGO] BULK RATE
U.S. POSTAGE
PAID
500 Boylston Street PERMIT #55638
Boston, MA 02116 BOSTON, MA
-------------
[LOGO] MFS(R)
THE FIRST NAME IN MUTUAL FUNDS
MUF-3 6/96 12.5M 35/235/335
