<PAGE>
[MFS Logo] Semiannual Report
INVESTMENT MANAGMENT April 30, 1997
- -------------------------------------------------------------------------------
MFS(R) WORLD TOTAL RETURN FUND
- -------------------------------------------------------------------------------
[graphic omitted]
- -------------------------------------------------------------------------------
LEARNING FINANCIAL BASICS THE EASY WAY (see page 31)
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Letter from the Chairman ................................................... 1
Portfolio Manager's Overview ............................................... 3
Portfolio Manager's Profile ................................................ 4
Fund Facts ................................................................. 5
Performance Summary ........................................................ 5
Portfolio Concentration .................................................... 7
Portfolio of Investments ................................................... 8
Financial Statements .......................................................15
Notes to Financial Statements ..............................................23
The ABCs of Investing ......................................................31
The MFS Family of Funds(R) .................................................32
Trustees and Officers ......................................................33
HIGHLIGHTS
o FOR THE SIX MONTHS ENDED APRIL 30, 1997, CLASS A SHARES OF THE FUND
PROVIDED A TOTAL RETURN AT NET ASSET VALUE OF 4.87%, CLASS B SHARES 4.50%,
CLASS C SHARES 4.48%, AND CLASS I SHARES 4.96%.
o THE EQUITY PORTION OF THE FUND HAS 50% OF ITS ASSETS IN FIVE ECONOMIC
SECTORS: FINANCIAL SERVICES, UTILITIES, ENERGY, HEALTH CARE, AND CONSUMER
STAPLES, ALL OF WHICH WE EXPECT TO EXPERIENCE GROWTH IN EARNINGS.
o THE BOND PORTION OF THE PORTFOLIO REFLECTS A NEUTRAL WEIGHTING AMONG
EUROPE, JAPAN, THE UNITED STATES, AND THE OTHER DOLLAR-BLOC COUNTRIES. U.S.
INTEREST RATES APPEAR INCREASINGLY ATTRACTIVE FROM A GLOBAL PERSPECTIVE,
AND WE ANTICIPATE INCREASING THE WEIGHTING IN THE UNITED STATES AND THE
OTHER DOLLAR-BLOC COUNTRIES RELATIVE TO EUROPE.
o SEVERAL POTENTIAL DEVELOPMENTS SUGGEST OPPORTUNITIES IN EUROPE, INCLUDING:
THE RETURN OF THE SINGLE-CURRENCY THEME TO THE MARKET; THE LIKELIHOOD OF
INTEREST- RATE CUTS IN ITALY, SPAIN, AND POSSIBLY SWEDEN; AND A MORE
ATTRACTIVE U.K. MARKET FOLLOWING THE RECENT ELECTION AND MODERATE
INTEREST-RATE HIKES.
LETTER FROM THE CHAIRMAN
[Photo of A. Keith Brodkin]
A. Keith Brodkin
Dear Shareholders:
After more than six years of expansion, the U.S. economy is experiencing another
year of growth in 1997, although a few signs point to the possibility of a
modest rise in inflation during the year. On the positive side, the pattern of
moderate growth and inflation set over the past few years now seems fairly well
entrenched in the economy and, short of a major international or domestic
crisis, appears to have enough momentum to remain on track for some time. Also,
gains in such important sectors as housing, automobiles, industrial production,
and exports indicate a fair amount of underlying strength in the economy. Some
of that strength was seen in the first quarter, when the U.S. economy grew at an
annualized rate of 5.6% (based on preliminary estimates), a pace that would be
inflationary in the unlikely event that it were to continue. The ongoing
tightness in the labor market could also add some inflationary pressures to the
economy. At the same time, there is some reason for caution as a result of the
continuing high level of consumer debt and rising personal bankruptcies. Given
these somewhat conflicting indicators, we expect real (inflation-adjusted)
growth to revolve around 2% in 1997, with the strength of the first quarter
moderating as we move through the balance of the year.
We continue to urge U.S. equity investors to remain cautious for 1997. Just as
the slowdown in corporate earnings growth and increases in interest rates in
1996 raised some near-term concerns, further interest-rate increases and the
fear of an acceleration of inflation have created extreme volatility in the
stock market in 1997. However, while the U.S. equity market enjoyed several
years without a major correction, we would like to point out that such downturns
are a natural part of the investment environment and, when they end, they often
result in more attractive valuations for stocks.
Overseas, the overall economic environment has remained favorable for
investing in equities. Global economic growth has remained moderate, with
subdued inflation. While the United States has experienced rising interest rates
over the past six months, continental Europe has seen improving economic
conditions, falling inflation and interest rates, and weaker currencies. This
has helped give Europe the best-performing equity markets. In Japan, meanwhile,
interest rates have remained low, but a tepid economic recovery has left that
market stalled. At the same time, a number of the emerging markets have become
increasingly attractive, thanks in part to rapidly expanding economies and
growth in earnings.
We appreciate your support and welcome any questions or comments you may have.
Respectfully,
/s/ A. Keith Brodkin
A. Keith Brodkin
Chairman and President
May 14, 1997
<PAGE>
PORTFOLIO MANAGER'S OVERVIEW
[Photo of Frederick J. Simmons]
Frederick J. Simmons
Dear Shareholders:
For the six months ended April 30, 1997, Class A shares of the Fund provided a
total return of 4.87%, Class B shares 4.50%, Class C shares 4.48%, and Class I
shares 4.96%. These returns assume the reinvestment of distributions but exclude
the effects of any sales charges and compare to that of a benchmark made up of
60% of the Morgan Stanley Capital International (MSCI) World Index and 40% of
the J.P. Morgan Global Government Bond Index (the Morgan Index), which returned
3.08% for the same period. The MSCI World Index is a broad, unmanaged index of
global equities, while the Morgan Index is an aggregate of actively traded
government bonds issued from 13 countries, including the United States, with
remaining maturities of at least one year. The Fund's returns also compare to a
6.25% return for the Lipper Global Flexible Fund Index as determined by Lipper
Analytical Services, Inc., an independent firm that reports mutual fund
performance.
In general, the equity portion of the Fund is managed on a "bottom-up"
approach, as opposed to a "top-down" approach. In other words, investment
decisions are based primarily on a thorough analysis of individual companies
and, secondarily, on the macroeconomic analysis of different economies. We
believe this approach serves the Fund well during periods of uncertainty, such
as may lie ahead, when the possibility of higher interest rates has increased.
During periods of rising stock prices, stocks often react very little when
companies' earnings are less than expected. However, this has not been the case
in the recent past. Rather, earnings disappointments have been greeted with
savage selling. In this environment, we believe our emphasis on companies that
appear more likely to keep growing during the uncertain period ahead should
benefit the Fund. The equity portion of the Fund has 50% of its assets in five
economic sectors: financial services, utilities, energy, health care, and
consumer staples, all of which we expect to experience growth in earnings.
Furthermore, within each sector, there is broad geographic diversification,
with over 60% of equity assets overseas, representing 20 countries. For example,
the health care sector includes companies from the United States, the United
Kingdom, Switzerland, France, Sweden, and Japan. At the same time, we believe
the dividend yields on many of the stocks in the portfolio should help buffer
them from the vicissitudes of the market.
The bond portion of the portfolio reflects a neutral weighting among Europe,
Japan, the United States, and the other dollar-bloc countries. U.S. interest
rates appear increasingly attractive from a global perspective. Hence, we
anticipate increasing the weighting in the United States and the other dollar-
bloc countries relative to Europe once the pickup in core European growth is
confirmed and the U.S. market adjusts to the Federal Reserve Board's tighter
policy. In the meantime, we are maintaining a defensive posture with respect to
duration, or interest-rate sensitivity, in both the dollar bloc and Europe.
The Fund remains overweighted in Australian bonds because we believe current
yield spreads reflect undue fears of a rate hike. Within Europe, several
potential developments suggest possible opportunities, such as: the return of
the single-currency theme to the market, which would help potential entrants
such as Ireland and Spain; the likelihood of interest-rate cuts in Italy, Spain,
and possibly Sweden; and a more attractive U.K. market following the recent
election and moderate interest-rate hikes. Despite extremely low absolute
yields, the Japanese bond market should be well supported by accommodative
monetary policy and domestic institutional flows. Although some of the forces
pushing the dollar up are waning, capital inflows, attracted by relatively high
U.S. interest rates and moderate growth, should continue to offer support for
the dollar.
Respectfully,
/s/ Frederick J. Simmons
Frederick J. Simmons
Portfolio Manager
PORTFOLIO MANAGER'S PROFILE
FREDERICK J. SIMMONS HAS BEEN PORTFOLIO MANAGER OF MFS(R) WORLD TOTAL
RETURN FUND SINCE 1991. MR. SIMMONS JOINED MFS IN 1971 AS AN INVESTMENT
OFFICER IN THE RESEARCH DEPARTMENT AND WAS NAMED ASSISTANT VICE
PRESIDENT - INVESTMENTS IN 1974, VICE PRESIDENT - INVESTMENTS IN 1975,
AND SENIOR VICE PRESIDENT IN 1983. MR. SIMMONS GRADUATED WITH HONORS
FROM TUFTS UNIVERSITY AND THE AMOS TUCK SCHOOL OF BUSINESS
ADMINISTRATION OF DARTMOUTH COLLEGE. HE IS A CHARTERED FINANCIAL
ANALYST, A MEMBER OF THE BOSTON SECURITY ANALYSTS SOCIETY, INC., AND
PAST PRESIDENT OF THE ELECTRONIC ANALYSTS OF BOSTON.
FUND FACTS
STRATEGY: THE INVESTMENT OBJECTIVE OF THE FUND IS TO
SEEK TOTAL RETURN BY INVESTING IN SECURITIES
THAT WILL PROVIDE ABOVE-AVERAGE CURRENT
INCOME AND OPPORTUNITIES FOR LONG-TERM
GROWTH OF CAPITAL AND INCOME.
COMMENCEMENT OF
INVESTMENT OPERATIONS: CLASS A: SEPTEMBER 4, 1990
CLASS B: SEPTEMBER 7, 1993
CLASS C: JANUARY 3, 1994
CLASS I: JANUARY 2, 1997
SIZE: $240.2 MILLION NET ASSETS AS OF APRIL 30, 1997
PERFORMANCE SUMMARY
Because mutual funds like MFS World Total Return 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, Class C, and Class I shares for the
applicable time periods.
AVERAGE ANNUAL AND CUMULATIVE TOTAL RATES OF RETURN
AS OF APRIL 30, 1997
CLASS A INVESTMENT RESULTS
(net asset value change including reinvested distributions)
<TABLE>
<CAPTION>
6 Months 1 Year 5 Years Life of Fund*
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Cumulative Total Return +4.87% +11.41% +72.10% +115.83%
- ---------------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return -- +11.41% +11.47% + 12.25%
- ---------------------------------------------------------------------------------------------------------------------------------
SEC Results -- + 6.08% +10.39% + 11.43%
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
CLASS B INVESTMENT RESULTS
(net asset value change including reinvested distributions)
<TABLE>
<CAPTION>
6 Months 1 Year 5 Years Life of Fund*
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Cumulative Total Return +4.50% +10.56% +67.82% +110.39%
- ---------------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return -- +10.56% +10.91% + 11.82%
- ---------------------------------------------------------------------------------------------------------------------------------
SEC Results -- + 6.56% +10.64% + 11.82%
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*For the period from the commencement of the Fund's investment operations,
September 4, 1990, through April 30, 1997.
CLASS C INVESTMENT RESULTS
(net asset value change including reinvested distributions)
<TABLE>
<CAPTION>
6 Months 1 Year 5 Years Life of Fund*
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Cumulative Total Return +4.48% +10.65% +68.28% +111.01%
- ---------------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return -- +10.65% +10.97% + 11.87%
- ---------------------------------------------------------------------------------------------------------------------------------
SEC Results -- + 9.65% +10.97% + 11.87%
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
CLASS I INVESTMENT RESULTS
(net asset value change including reinvested distributions)
<TABLE>
<CAPTION>
6 Months 1 Year 5 Years Life of Fund*
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Cumulative Total Return +4.96% +11.50% +72.26% +115.96%
- ---------------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return -- +11.50% +11.49% + 12.26%
- ---------------------------------------------------------------------------------------------------------------------------------
SEC Results -- +11.50% +11.49% + 12.26%
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*For the period from the commencement of the Fund's investment operations,
September 4, 1990, through April 30, 1997.
All results are historical and assume the reinvestment of dividends and capital
gains. Investment return and principal value will fluctuate, and shares, when
redeemed, may be worth more or less than their original cost. Past performance
is no guarantee of future results.
Class A share SEC results include the maximum 4.75% sales charge. Class B share
SEC results reflect the applicable contingent deferred sales charge (CDSC),
which declines over six years as follows: 4%, 4%, 3%, 3%, 2%, 1%, 0%. 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 are
subject to a 1% CDSC if redeemed within 12 months of purchase. Class I shares,
which became available on January 2, 1997, have no sales charge or Rule 12b-1
fees and are only available to certain institutional investors.
Class B share and Class C share results include the performance and the
operating expenses (e.g., Rule 12b-1 fees) of the Fund's Class A shares for
periods prior to the commencement of offering of Class B and Class C shares.
Because operating expenses attributable to Class B and Class C shares are higher
than those of Class A shares, Class B and Class C share performance generally
would have been lower than Class A share performance. The Class A share
performance included in the Class B and Class C share SEC performance has been
adjusted to reflect the CDSC generally applicable to Class B and Class C shares
rather than the sales charge generally applicable to Class A shares.
Class I share results include the performance and operating expenses (e.g., Rule
12b-1 fees) of Class A shares for periods prior to the commencement of offering
of Class I shares. Because operating expenses attributable to Class A shares are
greater than those of Class I shares, Class I share performance generally would
have been higher than Class A share performance. The Class A share SEC
performance included in the Class I share SEC performance has been adjusted to
reflect the fact that Class I shares have no initial sales charge. These results
represent the percentage change in net asset value.
Performance results reflect any applicable expense subsidies and waivers,
without which the results would have been less favorable. Current subsidies and
waivers may be discontinued at any time.
<PAGE>
PORTFOLIO CONCENTRATION AS OF APRIL 30, 1997
TOP 10 EQUITY HOLDINGS
<TABLE>
<CAPTION>
<S> <C>
POWERGEN PLC Q.B.E. INSURANCE GROUP LTD.
British electric utility Australian commercial insurance company
PHILIP MORRIS COS., INC. AMERICAN EXPRESS CO.
Tobacco, food, and beverage conglomerate U.S. financial services company
TYCO INTERNATIONAL LTD. BARNETT BANKS, INC.
Manufacturer of fire protection, packaging, Southern U.S. bank holding company
and electronic equipment
SONY CORP.
GENERAL ELECTRIC CO. Japanese electronics and entertainment
Diversified manufacturing and services company
conglomerate
BRITISH PETROLEUM PLC
NOVARTIS AG Oil exploration and production company
Swiss pharmaceutical company
</TABLE>
LARGEST EQUITY SECTORS
Miscellaneous 41.6%
Utilities & Communications 13.0%
Financial Services 15.5%
Energy 11.1%
Health Care 10.3%
Consumer Staples 8.5%
For a more complete breakdown, refer to the Portfolio of Investments.
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED) - April 30, 1997
Stocks - 56.8%
- ------------------------------------------------------------------------------
Issuer Shares Value
- ------------------------------------------------------------------------------
Foreign Stocks - 34.9%
Argentina - 0.1%
Mirgor Sacifia, ADR (Auto Parts)##* 47,930 $ 117,429
- ------------------------------------------------------------------------------
Australia - 1.9%
Australia & New Zealand Banking Group
(Banks and Credit Companies) 185,000 $ 1,181,362
Q.B.E. Insurance Group Ltd. (Insurance) 436,105 2,492,427
Seven Network Ltd. (Entertainment) 252,000 948,626
------------
$ 4,622,415
- ------------------------------------------------------------------------------
Canada - 1.3%
Canadian National Railway Co. (Railroads) 49,500 $ 1,905,750
Westcoast Energy, Inc. (Utilities - Gas) 74,800 1,280,950
------------
$ 3,186,700
- ------------------------------------------------------------------------------
Chile - 0.2%
Enersis SA, ADR (Utilities - Electric) 13,600 $ 428,400
- ------------------------------------------------------------------------------
Finland - 0.9%
Huhtamaki Oy Group (Conglomerate) 38,000 $ 1,648,900
Oy Tamro AB (Pharmaceuticals)## 68,000 418,719
------------
$ 2,067,619
- ------------------------------------------------------------------------------
France - 3.2%
Elf Aquitaine S.A. (Oils) 15,800 $ 1,533,534
Pinault Printemps Redo (Retail) 5,200 2,189,145
Total SA, ADR (Oils) 35,000 1,456,875
TV Francaise (Entertainment) 17,500 1,689,531
Union des Assurances Federales S.A.
(Insurance) 6,900 822,344
------------
$ 7,691,429
- ------------------------------------------------------------------------------
Germany - 0.9%
Adidas AG (Apparel and Shoes) 13,500 $ 1,408,526
Henkel KGaA (Consumer Goods and Services) 15,000 815,029
------------
$ 2,223,555
- ------------------------------------------------------------------------------
Greece - 0.3%
Hellenic Telecommunication Organization S.A.
(Telecommunications) 33,300 $ 757,176
- ------------------------------------------------------------------------------
Hong Kong - 1.4%
Asia Satellite Telecommunications Corp.
(Telecommunications)* 10,300 $ 265,225
Hong Kong Electric Holdings Ltd. (Utilities -
Electric)* 202,000 714,527
Hong Kong Land Holdings Ltd. (Real Estate) 405,000 842,400
Wharf Holdings Ltd. (Real Estate) 272,000 1,028,853
Wing Hang Bank Ltd. (Banks and Credit
Companies) 142,800 521,713
------------
$ 3,372,718
- ------------------------------------------------------------------------------
Italy - 1.4%
Gucci Group NV (Apparel and Textiles) 11,100 $ 770,063
INA (Instituto Nazionale delle Assicurazioni)
(Insurance) 522,000 700,374
Telecom Italia S.p.A., Saving Shares
(Telecommunications) 475,000 $ 878,910
Telecom Italia S.p.A. (Utilities - Telephone) 475,000 1,024,700
------------
$ 3,374,047
- ------------------------------------------------------------------------------
Japan - 5.7%
Canon, Inc. (Office Equipment) 75,000 $ 1,778,259
DDI Corp. (Telecommunications) 139 923,017
East Japan Railway Co. (Railroads) 135 583,812
Eisai Co., Ltd. (Pharmaceuticals) 30,000 519,890
Fuji Photo Film Co. (Photographic Products) 16,000 611,264
Hirose Electric Co. (Electronics) 20,000 1,093,344
Kirin Beverage Corp. (Beverages) 105,000 1,430,878
Osaka Sanso Kogyo Ltd. (Chemicals) 146,000 385,270
Rohm Co. (Electronics) 12,000 930,130
Sony Corp. (Electronics) 32,000 2,329,106
Takeda Chemical Industries (Pharmaceuticals) 68,000 1,569,437
Toyota Motor Corp. (Automotive) 35,000 1,014,573
Ushio, Inc. (Electronics) 51,000 598,582
------------
$ 13,767,562
- ------------------------------------------------------------------------------
Netherlands - 2.2%
Akzo Nobel (Chemicals) 9,600 $ 1,237,851
IHC Caland NV (Transportation) 25,000 1,235,487
Koninklijke Ahold NV, ADR (Stores) 13,747 946,825
Royal Dutch Petroleum Co., ADR (Oils) 6,300 1,135,575
Wolters Kluwer (Publishing)* 5,701 676,236
------------
$ 5,231,974
- ------------------------------------------------------------------------------
New Zealand - 0.1%
Sky City Ltd. (Entertainment) 73,400 $ 329,375
- ------------------------------------------------------------------------------
Peru - 0.2%
Telefonica del Peru SA, ADR (Utilities -
Telephone) 24,800 $ 595,200
- ------------------------------------------------------------------------------
Singapore - 0.5%
Mandarin Oriental International, Ltd.
(Restaurants and Lodgings)* 214,000 $ 248,240
Singapore Press Holdings Ltd. (Publishing) 47,000 870,370
------------
$ 1,118,610
- ------------------------------------------------------------------------------
South Korea - 0.2%
Korea Electric Power Corp. (Utilities - Electric) 17,000 $ 508,090
- ------------------------------------------------------------------------------
Spain - 1.8%
Acerinox S.A. (Iron and Steel) 5,700 $ 834,375
Catalana Occidente (Insurance)*+ 4,300 226,316
Iberdrola SA (Utilities - Electric) 162,000 1,831,826
Repsol S.A. (Oils) 35,000 1,470,326
------------
$ 4,362,843
- ------------------------------------------------------------------------------
Sweden - 1.9%
Astra AB, Free Shares, "B" ADR
(Pharmaceuticals) 55,500 $ 2,203,729
Ericsson (L.M.) Telephone Co.
(Telecommunications) 40,000 1,345,000
Hennes & Mauritz, "B" Free Shares (Retail) 6,900 998,279
------------
$ 4,547,008
- ------------------------------------------------------------------------------
Switzerland - 1.5%
Ciba Specialty AG (Chemicals)* 12,000 $ 1,034,272
Novartis AG (Pharmaceuticals) 1,900 2,504,106
------------
$ 3,538,378
- ------------------------------------------------------------------------------
United Kingdom - 9.2%
ASDA Group PLC (Retail) 920,000 $ 1,717,134
Avis Europe PLC (Auto Rental)##* 376,300 824,492
Booker PLC (Food - Wholesale)* 112,400 569,167
British Aerospace PLC (Aerospace)* 75,300 1,602,198
British Petroleum PLC, ADR (Oils) 16,840 2,317,605
Carlton Communicatons PLC (Broadcasting) 80,000 656,990
Compass Group PLC (Food - Catering)## 123,000 1,349,492
Grand Metropolitan PLC (Food and Beverage
Products)* 94,000 785,694
Jarvis Hotels PLC (Resturants and Lodgings)* 390,200 981,606
Kwik-Fit Holdings PLC (Automotive) 286,700 1,121,407
Lloyds TSB Group PLC (Banks and Credit
Companies)* 240,000 2,192,997
PowerGen PLC (Utilities - Electric)* 335,000 3,512,334
Reuters Holdings, PLC, ADR (Printing and
Publishing) 16,000 986,000
Storehouse PLC (Retail) 412,358 1,479,058
Tomkins PLC (Diversified Operations)* 463,333 2,000,292
------------
$ 22,096,466
- ------------------------------------------------------------------------------
Total Foreign Stocks $ 83,936,994
- ------------------------------------------------------------------------------
U.S. Stocks - 21.9%
Aerospace - 0.9%
General Dynamics Corp. 19,000 $ 1,353,750
Lockheed-Martin Corp. 10,008 895,716
------------
$ 2,249,466
- ------------------------------------------------------------------------------
Banks and Credit Companies - 1.7%
Barnett Banks, Inc. 48,600 $ 2,375,325
Norwest Corp. 34,500 1,720,688
------------
$ 4,096,013
- ------------------------------------------------------------------------------
Business Machines - 0.7%
Digital Equipment Corp.* 16,000 $ 478,000
International Business Machines Corp. 6,600 1,060,950
------------
$ 1,538,950
- ------------------------------------------------------------------------------
Chemicals - 0.6%
Air Products & Chemicals, Inc. 10,000 $ 717,500
Praxair, Inc. 15,000 774,375
------------
$ 1,491,875
- ------------------------------------------------------------------------------
Construction Services - 0.2%
Martin Marietta Materials, Inc. 20,346 $ 554,429
- ------------------------------------------------------------------------------
Consumer Goods and Services - 2.6%
Hertz, Corp.* 1,900 $ 55,100
Philip Morris Cos., Inc. 81,900 3,224,812
Tyco International Ltd. 47,500 2,897,500
------------
$ 6,177,412
- ------------------------------------------------------------------------------
Electrical Equipment - 1.2%
General Electric Co. 25,600 $ 2,838,400
- ------------------------------------------------------------------------------
Financial Institutions - 1.5%
American Express Co. 37,600 $ 2,476,900
Federal Home Loan Mortgage Corp. 36,800 1,173,000
------------
$ 3,649,900
- ------------------------------------------------------------------------------
Food and Beverage Products - 0.3%
McCormick & Co., Inc. 33,000 $ 779,625
- ------------------------------------------------------------------------------
Insurance - 1.9%
Allstate Corp. 26,200 $ 1,716,100
CIGNA Corp. 14,700 2,210,512
Reliastar Financial Corp. 11,500 695,750
------------
$ 4,622,362
- ------------------------------------------------------------------------------
Machinery - 0.7%
Deere & Co., Inc. 34,500 $ 1,587,000
- ------------------------------------------------------------------------------
Medical and Health Products - 3.0%
Bristol-Myers Squibb Co. 20,400 $ 1,336,200
Lilly (Eli) & Co. 14,988 1,317,071
Rhone-Poulenc Rorer, Inc. 19,900 1,435,287
Schering Plough Corp. 24,000 1,920,000
Warner-Lambert Co. 12,800 1,254,400
------------
$ 7,262,958
- ------------------------------------------------------------------------------
Oils - 2.3%
Exxon Corp. 34,000 $ 1,925,250
Mobil Corp. 13,700 1,781,000
USX-Marathon Group 66,000 1,823,250
------------
$ 5,529,500
- ------------------------------------------------------------------------------
Photographic Products - 0.7%
Eastman Kodak Co. 19,400 $ 1,619,900
- ------------------------------------------------------------------------------
Printing and Publishing - 0.8%
Gannett Co., Inc. 23,000 $ 2,006,750
- ------------------------------------------------------------------------------
Utilities - Electric - 0.5%
Portland General Corp. 35,000 $ 1,277,500
- ------------------------------------------------------------------------------
Utilities - Gas - 1.4%
Coastal Corp. 37,000 $ 1,757,500
Sierra Pacific Resources 52,000 1,475,500
------------
$ 3,233,000
- ------------------------------------------------------------------------------
Utilities - Telephone - 0.9%
Sprint Corp. 45,800 $ 2,009,475
- ------------------------------------------------------------------------------
Total U.S. Stocks $ 52,524,515
- ------------------------------------------------------------------------------
Total Stocks (Identified Cost, $101,209,137) $136,461,509
- ------------------------------------------------------------------------------
Bonds - 27.4%
- ------------------------------------------------------------------------------
Principal Amount
(000 Omitted)
- ------------------------------------------------------------------------------
Foreign Bonds - 20.4%
Australia - 2.4%
Commonwealth of Australia, 8.75s, 2001 AUD 4,815 $ 3,958,861
Commonwealth of Australia, 10s, 2002 2,175 1,886,630
------------
$ 5,845,491
- ------------------------------------------------------------------------------
Canada - 1.2%
Government of Canada, 8.75s, 2005 CAD 3,540 $ 2,896,894
- ------------------------------------------------------------------------------
Denmark - 1.7%
Kingdom of Denmark, 6s, 1999 DKK 6,414 $ 1,007,824
Kingdom of Denmark, 8s, 2001 5,960 1,002,513
Kingdom of Denmark, 7s, 2007 6,513 1,007,961
Nykredit Bank, 8s, 2026 6,458 998,175
------------
$ 4,016,473
- ------------------------------------------------------------------------------
Greece - 1.2%
Hellenic Republic, 12.6s, 2003 GRD 362,500 $ 1,384,535
Hellenic Republic, 13.4s, 2003 90,000 344,894
Hellenic Republic, 14.8s, 2003 280,000 1,070,453
------------
$ 2,799,882
- ------------------------------------------------------------------------------
Ireland - 2.9%
Republic of Ireland, 6.25s, 1999 IEP 1,000 $ 1,503,242
Republic of Ireland, 8s, 2000 560 889,632
Republic of Ireland, 6.5s, 2001 3,090 4,702,879
------------
$ 7,095,753
- ------------------------------------------------------------------------------
Italy - 3.8%
Republic of Italy, 9.5s, 1999 ITL 7,510,000 $ 4,582,834
Republic of Italy, 9.5s, 2001 7,265,000 4,585,806
------------
$ 9,168,640
- ------------------------------------------------------------------------------
New Zealand - 0.8%
Government of New Zealand, 8s, 2001 NZD 1,610 $ 1,127,747
Government of New Zealand, 8s, 2006 1,070 746,162
------------
$ 1,873,909
- ------------------------------------------------------------------------------
Spain - 3.1%
Kingdom of Spain, 6.75s, 2000 ESP 283,710 $ 2,003,002
Kingdom of Spain, 8.4s, 2001 166,090 1,239,756
Kingdom of Spain, 10.5s, 2003 155,110 1,289,288
Kingdom of Spain, 7.35s, 2007 397,330 2,823,134
------------
$ 7,355,180
- ------------------------------------------------------------------------------
Sweden - 0.6%
Kingdom of Sweden, 10.25s, 2000 SEK 10,600 $ 1,523,049
- ------------------------------------------------------------------------------
United Kingdom - 2.7%
United Kingdom Treasury, 9.75s, 2002 GBP 600 $ 1,079,397
United Kingdom Treasury, 9.5s, 2004 3,000 5,460,887
------------
$ 6,540,284
- ------------------------------------------------------------------------------
Total Foreign Bonds $ 49,115,555
- ------------------------------------------------------------------------------
U.S. Government Agencies - 4.1%
Federal National Mortgage Association
TBA 15, 7s, 2012 $ 9,500 $ 9,410,890
Federal National Mortgage Association, 8s, 2026 305 309,114
- ------------------------------------------------------------------------------
Total U.S. Government Agencies $ 9,720,004
- ------------------------------------------------------------------------------
U.S. Government Guaranteed - 2.9%
U.S. Treasury Stripped Principal Payments,
0s, 2015 $ 10,250 $ 2,946,875
U.S. Treasury Notes, 5.875s, 1998 4,100 4,082,698
- ------------------------------------------------------------------------------
Total U.S. Government Guaranteed $ 7,029,573
- ------------------------------------------------------------------------------
Total Bonds (Identified Cost, $69,704,736) $ 65,865,132
- ------------------------------------------------------------------------------
Short-Term Obligations - 15.0%
- ------------------------------------------------------------------------------
Federal Farm Credit Bank, due 6/04/97 $ 1,865 $ 1,855,400
Federal Home Loan Bank, due 5/01/97 - 6/02/97 14,505 14,476,769
Federal Home Loan Mortgage Corp.,
due 5/16/97 - 5/27/97 6,400 6,382,503
Federal National Mortgage Assn.,
due 5/21/97 - 6/12/97 5,120 5,096,914
Heinz (H.J.) Co., due 5/13/97 4,500 4,491,780
Tennessee Valley Authority,
due 6/09/97 - 6/17/97 3,850 3,826,562
- ------------------------------------------------------------------------------
Total Short-Term Obligations, at Amortized Cost $ 36,129,928
- ------------------------------------------------------------------------------
Call Options Purchased - 0.1%
- ------------------------------------------------------------------------------
Principal Amount
of Contracts
Issuer/Expiration Month/Strike Price (000 Omitted) Value
- ------------------------------------------------------------------------------
British Pounds/May/1.621 GPB 5,738 $ 43,692
Canadian Dollars/June/1.365 CAD 10,304 3,102
Deutsche Marks/British Pounds/July/2.7 DEM/GBP 8,344 23,730
Japanese Government Bonds
May/105.401 JPY 197,000 16,548
June/113.741 670,000 4,690
June/117.226 772,000 38,600
June/117.622 802,000 5,614
July/114.635 601,000 15,626
- ------------------------------------------------------------------------------
Total Call Options Purchased
(Premiums Paid, $436,855) $ 151,602
- ------------------------------------------------------------------------------
Total Investments (Identified Cost, $205,480,656) $238,608,171
- ------------------------------------------------------------------------------
Put Options Written - (0.1)%
- ------------------------------------------------------------------------------
British Pounds/July/1.65 GBP 5,840 $ (43,639)
Japanese Government Bonds
June/117.226 JPY 772,000 (38,600)
July/114.635 601,000 (72,120)
- ------------------------------------------------------------------------------
Total Put Options Written (Premiums Received,
$120,494) $ (154,359)
- ------------------------------------------------------------------------------
Other Assets, Less Liabilities - 0.7% 1,794,468
- ------------------------------------------------------------------------------
Net Assets - 100.0% $240,248,280
- ------------------------------------------------------------------------------
* Non-income producing security.
## SEC Rule 144A restriction.
+ Restricted security.
Abbreviations have been used throughout this report to indicate amounts shown in
currencies other than the U.S. dollar. A list of abbreviations is shown below.
AUD = Australian Dollars IEP = Irish Punts
DEM = Deutsche Marks ITL = Italian Lire
DKK = Danish Kroner JPY = Japanese Yen
ESP = Spanish Pesetas NZD = New Zealand Dollars
GBP = British Pounds SEK = Swedish Kroner
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS
Statement of Assets and Liabilities (Unaudited)
- ------------------------------------------------------------------------------
April 30, 1997
- ------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets:
Investments, at value (identified cost, $205,480,656) $238,608,171
Cash 45,431
Net receivable for forward foreign currency exchange contracts sold 1,582,468
Receivable for Fund shares sold 417,262
Receivable for investments sold 10,538,406
Interest and dividends receivable 1,818,710
Other assets 2,030
------------
Total assets $253,012,478
------------
Liabilities:
Payable for Fund shares reacquired $ 275,662
Payable for investments purchased 9,973,886
Net payable for forward foreign currency exchange contracts purchased 1,363,778
Net payable for master netting agreements and closed forward foreign
currency exchange contracts 735,824
Written options outstanding, at value (premiums received, $120,494) 154,359
Payable to affiliates -
Management fee 7,181
Shareholder servicing agent fee 853
Distribution fee 68,540
Administrative fee 98
Accrued expenses and other liabilities 184,017
------------
Total liabilities $ 12,764,198
------------
Net assets $240,248,280
============
Net assets consist of:
Paid-in capital $200,708,391
Unrealized appreciation on investments and translation of assets
and liabilities in foreign currencies 32,501,884
Accumulated undistributed net realized gain on investments and
foreign currency transactions 4,701,373
Accumulated undistributed net investment income 2,336,632
------------
Total $240,248,280
============
Shares of beneficial interest outstanding 18,971,985
==========
Class A shares:
Net asset value per share
(net assets of $138,493,202 / 10,930,827 shares of beneficial
interest outstanding) $12.67
======
Offering price per share (100 / 95.25 of net asset value per share) $13.30
======
Class B shares:
Net asset value and offering price per share
(net assets of $82,235,258 / 6,498,856 shares of beneficial interest
outstanding) $12.65
======
Class C shares:
Net asset value and offering price per share
(net assets of $17,727,033 / 1,400,916 shares of beneficial interest
outstanding) $12.65
======
Class I shares:
Net asset value per share
(net assets of $1,792,787 / 141,386 shares of beneficial interest
outstanding) $12.68
======
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.
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Statement of Operations (Unaudited)
- ------------------------------------------------------------------------------
Six Months Ended April 30, 1997
- ------------------------------------------------------------------------------
Net investment income:
Income -
Interest $ 3,014,989
Dividends 1,661,833
Foreign taxes withheld (284,638)
------------
Total investment income $ 4,392,184
------------
Expenses -
Management fee $ 960,434
Trustees' compensation 21,599
Shareholder servicing agent fee 99,769
Shareholder servicing agent fee (Class A) 33,618
Shareholder servicing agent fee (Class B) 27,467
Shareholder servicing agent fee (Class C) 3,778
Distribution and service fee (Class A) 234,803
Distribution and service fee (Class B) 384,080
Distribution and service fee (Class C) 80,792
Administrative fee 5,990
Custodian fee 103,224
Printing 47,573
Postage 22,012
Auditing fees 18,360
Legal fees 2,361
Miscellaneous 101,751
------------
Total expenses $ 2,147,611
Fees paid indirectly (4,854)
------------
Net expenses $ 2,142,757
------------
Net investment income $ 2,249,427
------------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $ 7,575,664
Written option transactions (204,204)
Foreign currency transactions (2,642,613)
------------
Net realized gain on investments and foreign
currency transactions $ 4,728,847
------------
Change in unrealized appreciation (depreciation) -
Investments $ 2,971,987
Written options (134,050)
Translation of assets and liabilities in foreign
currencies 408,972
------------
Net unrealized gain on investments and foreign
currency translation $ 3,246,909
------------
Net realized and unrealized gain on investments
and foreign currency $ 7,975,756
------------
Increase in net assets from operations $ 10,225,183
============
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Six Months Ended
April 30, 1997 Year Ended
(Unaudited) October 31, 1996
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income $ 2,249,427 $ 4,979,811
Net realized gain on investments and foreign currency
transactions 4,728,847 10,409,811
Net unrealized gain on investments and foreign
currency translation 3,246,909 13,407,417
------------- -------------
Increase in net assets from operations $ 10,225,183 $ 28,797,039
------------- -------------
Distributions declared to shareholders -
From net investment income (Class A) $ (744,505) $ (6,143,145)
From net investment income (Class B) (155,986) (2,682,617)
From net investment income (Class C) (40,196) (505,747)
From net realized gain on investments and foreign
currency transactions (Class A) (6,137,212) (54,351)
From net realized gain on investments and foreign
currency transactions (Class B) (3,460,672) (28,792)
From net realized gain on investments and foreign
currency transactions (Class C) (701,486) (5,382)
------------- -------------
Total distributions declared to shareholders $ (11,240,057) $ (9,420,034)
------------- -------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 37,668,540 $ 47,074,888
Net asset value of shares issued to shareholders in
reinvestment of distributions 10,075,611 8,276,937
Cost of shares reacquired (22,360,041) (37,251,081)
------------- -------------
Increase in net assets from Fund share transactions $ 25,384,110 $ 18,100,744
------------- -------------
Total increase in net assets $ 24,369,236 $ 37,477,749
Net assets:
At beginning of year 215,879,044 178,401,295
------------- -------------
At end of year (including accumulated undistributed
net investment income of $2,336,632 and $1,027,892,
respectively) $ 240,248,280 $ 215,879,044
============= =============
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Financial Highlights
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Six Months Ended
April 30, 1997 Year Ended
(Unaudited) October 31, 1996
- -------------------------------------------------------------------------------------------------
Class A
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $12.73 $11.57
------ ------
Income from investment operations# -
Net investment income $ 0.14 $ 0.34
Net realized and unrealized gain on investments
and foreign currency transactions 0.47 1.46
------ ------
Total from investment operations $ 0.61 $ 1.80
------ ------
Less distributions declared to shareholders -
From net investment income $(0.30) $(0.63)
From net realized gain on investments and
foreign currency transactions (0.37) (0.01)
In excess of net realized gain on investments
and foreign currency transactions -- --
From paid-in capital -- --
------ ------
Total distributions declared to shareholders $(0.67) $(0.64)
------ ------
Net asset value - end of period $12.67 $12.73
====== ======
Total return(+) 4.87% 16.06%
Ratios (to average net assets)/Supplemental data:
Expenses## 1.60%+ 1.63%
Net investment income 2.23%+ 2.79%
Portfolio turnover 85% 167%
Average Commission Rate### $0.0237 $0.0187
Net assets at end of period (000 omitted) $138,493 $129,843
+Annualized.
#Per share data for the periods subsequent to October 31, 1993, are 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 fiscal years beginning on or after September 1, 1995.
(+)Total returns for Class A shares do not include the applicable sales charge. If the sales
charge had been included the results would have been lower.
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31,
---------------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990*
- --------------------------------------------------------------------------------------------------------------------------------
Class A
- --------------------------------------------------------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
<S> <C> <C> <C> <C> <C> <C>
Net asset value - beginning of period $10.58 $11.19 $10.21 $ 9.42 $ 8.55 $ 8.50
------ ------ ------ ------ ------ ------
Income from investment operations# -
Net investment income $ 0.33 $ 0.30 $ 0.28 $ 0.36 $ 0.37 $ 0.08
Net realized and unrealized gain
(loss) on investments and
foreign currency transactions 0.79 0.15 1.42 0.86 0.88 (0.03)
------ ------ ------ ------ ------ ------
Total from investment operations $ 1.12 $ 0.45 $ 1.70 $ 1.22 $ 1.25 $ 0.05
------ ------ ------ ------ ------ ------
Less distributions declared to
shareholders -
From net investment income $(0.08) $(0.25) $(0.45) $(0.26) $(0.38) $ --
From net realized gain on
investments and foreign
currency transactions (0.05) (0.33) (0.27) (0.17) -- --
In excess of net realized gain
on investments and foreign
currency transactions -- (0.38) -- -- -- --
From paid-in-capital -- (0.10) -- -- -- --
------ ------ ------ ------ ------ ------
Total distributions declared
to shareholders $(0.13) $(1.06) $(0.72) $(0.43) $(0.38) $ --
------ ------ ------ ------ ------ ------
Net asset value - end of period $11.57 $10.58 $11.19 $10.21 $ 9.42 $ 8.55
====== ====== ====== ====== ====== ======
Total return(+) 10.63% 4.10% 17.78% 13.14% 14.94% 3.76%+
Ratios (to average net assets)/
Supplemental data:
Expenses## 1.77% 1.76% 1.92% 1.84% 2.18% 1.57%+
Net investment income 3.06% 2.81% 2.96% 3.65% 4.05% 3.14%+
Portfolio turnover 160% 118% 112% 72% 134% 2%
Net assets at end of period
(000 omitted) $110,294 $99,870 $71,262 $44,707 $30,847 $12,510
*For the period from the commencement of investment operations, September 4, 1990, to October 31, 1990.
+Annualized.
#Per share data for the periods subsequent to October 31, 1993, are 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.
(+)Total returns for Class A shares do not include the applicable sales charge. If the sales charge had been included the results
would have been lower.
</TABLE>
<PAGE>
See notes to financial statements
FINANCIAL STATEMENTS - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Six Months Ended Year Ended October 31,
April 30, 1997 ---------------------------------------------------------------
(Unaudited) 1996 1995 1994 1993**
- --------------------------------------------------------------------------------------------------------------------------------
Class B
- --------------------------------------------------------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
<S> <C> <C> <C> <C> <C>
Net asset value - beginning of period $12.71 $11.52 $10.54 $11.19 $10.84
------ ------ ------ ------ ------
Income from investment operations# -
Net investment income $ 0.10 $ 0.25 $ 0.25 $ 0.25 $ 0.06
Net realized and unrealized gain on
investments and foreign currency
transactions 0.47 1.46 0.77 0.13 0.35
------ ------ ------ ------ ------
Total from investment operations $ 0.57 $ 1.71 $ 1.02 $ 0.38 $ 0.41
------ ------ ------ ------ ------
Less distributions declared to shareholders -
From net investment income $(0.26) $(0.47) $(0.03) $(0.24) $(0.06)
In excess of net investment income -- (0.04) -- -- --
From net realized gain on investments and
foreign currency transactions (0.37) (0.01) (0.01) (0.32) --
In excess of net realized gain on
investments and foreign currency
transactions -- -- -- (0.38) --
From paid-in-capital -- -- -- (0.09) --
------ ------ ------ ------ ------
Total distributions declared to
shareholders $(0.63) $(0.52) $(0.04) $(1.03) $(0.06)
------ ------ ------ ------ ------
Net asset value - end of period $12.65 $12.71 $11.52 $10.54 $11.19
====== ====== ====== ====== ======
Total return 4.50% 15.29% 9.75% 3.38% 3.79%++
Ratios (to average net assets)/Supplemental data:
Expenses## 2.27% 2.34% 2.49% 2.49% 2.77%+
Net investment income 1.56% 2.07% 2.34% 2.33% 2.15%+
Portfolio turnover 85% 167% 160% 118% 112%
Average commission rate### $0.0237 $0.0187 -- -- --
Net assets at end of period (000 omitted) $82,235 $71,788 $57,214 $47,677 $ 4,381
**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, are 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 fiscal years beginning on or after September 1, 1995.
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Six Months Ended Year Ended October 31,
April 30, 1997 ------------------------------------
(Unaudited) 1996 1995 1994***
- ----------------------------------------------------------------------------------------------------------
Class C
- ----------------------------------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
<S> <C> <C> <C> <C>
Net asset value - beginning of period $12.72 $11.52 $10.53 $11.06
------ ------ ------ ------
Income from investment operations# -
Net investment income $ 0.10 $ 0.26 $ 0.27 $ 0.27
Net realized and unrealized gain (loss) on
investments and foreign currency transactions 0.47 1.46 0.76 (0.29)
------ ------ ------ ------
Total from investment operations $ 0.57 $ 1.72 $ 1.03 $(0.02)
------ ------ ------ ------
Less distributions declared to shareholders -
From net investment income $(0.27) $(0.51) $(0.03) $(0.12)
From net realized gain on investments and foreign
currency transactions (0.37) (0.01) (0.01) (0.16)
In excess of net realized gain on investments and
foreign currency transactions -- -- -- (0.18)
From paid-in capital -- -- -- (0.05)
------ ------ ------ ------
Total distributions declared to shareholders $(0.64) $(0.52) $(0.04) $(0.51)
------ ------ ------ ------
Net asset value - end of period $12.65 $12.72 $11.52 $10.53
====== ====== ====== ======
Total return 4.48% 15.41% 9.84% (0.15)%++
Ratios (to average net assets)/Supplemental data:
Expenses## 2.25% 2.27% 2.42% 2.39%+
Net investment income 1.59% 2.14% 2.41% 2.51%+
Portfolio turnover 85% 167% 160% 118%
Average commission rate### $0.0237 $.0187 -- --
Net assets at end of period (000 omitted) $17,727 $14,248 $10,894 $10,903
***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 are 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 fiscal years beginning on or after September 1, 1995.
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - CONTINUED
Financial Highlights - continued
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Period Ended
April 30, 1997****
(Unaudited)
- -------------------------------------------------------------------------------------------
Class I
- -------------------------------------------------------------------------------------------
Per share data (for a share outstanding throughout the period):
<S> <C>
Net asset value - beginning of period $12.51
------
Income from investment operations# -
Net investment income $ 0.07
Net realized and unrealized gain on investments and foreign
currency transactions 0.10
------
Total from investment operations $ 0.17
------
Net asset value - end of period $12.68
======
Total return 1.36%++
Ratios (to average net assets)/Supplementa data:
Expenses## 1.28%+
Net investment income 2.58%+
Portfolio turnover 85%
Average commission rate $0.0237
Net assets at end of period (000 omitted) $ 1,793
****For the period from the commencement of offering of Class I shares, January 2, 1997, to
April 30, 1997.
+Annualized.
++Not Annualized.
#Per share data is based on average shares outstanding.
##The Fund's expenses are calculated without reduction for fees paid indirectly.
</TABLE>
See notes to financial statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(1) BUSINESS AND ORGANIZATION
MFS World Total Return 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
values of the local currency and the U.S. dollar and to the effects of changes
in each country's legal, political and economic environment.
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.
Written Options - The Fund may write covered call or put options for which
premiums are received and are recorded as liabilities, and are subsequently
adjusted to the current value of the options written. Premiums received from
writing options which expire are treated as realized gains. Premiums received
from writing options which are exercised or are closed are offset against the
proceeds or amount paid on the transaction to determine the realized gain or
loss. If a put option is exercised, the premium reduces the cost basis of the
security purchased by the Fund. The Fund, as writer of an option, may have no
control over whether the underlying securities may be sold (call) or purchased
(put) and, as a result, bears the market risk of an unfavorable change in the
price of the securities underlying the written option. In general, written call
options may serve as a partial hedge against decreases in value in the
underlying securities to the extent of the premium received. Written options may
also be used as part of an income producing strategy reflecting the view of the
Fund's management on the direction of interest rates.
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 into these contracts from the potential inability of counterparties to
meet the terms of their contracts and from unanticipated movements in the value
of a foreign currency relative to the U.S. dollar. The Fund will enter into
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.
Swap Agreements - The Fund may enter into swap agreements. A swap is an exchange
of cash payments between the Fund and another party which is based on a specific
financial index. Cash payments are exchanged at specified intervals and the
expected income or expense is recorded on the accrual basis. The value of the
swap is adjusted daily and the change in value is recorded as unrealized
appreciation or depreciation. Risks may arise upon entering into these
agreements from the potential inability of counterparties to meet the terms of
their contract and from unanticipated changes in the value of the financial
index on which the swap agreement is based. The Fund uses swaps for both hedging
and non-hedging purposes. For hedging purposes, the Fund may use swaps to reduce
its exposure to interest and foreign exchange rate fluctuations. For non-hedging
purposes, the Fund may use swaps to take a position on anticipated changes in
the underlying financial index.
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 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, Class C, and Class I shares. The four classes of shares differ in their
respective distribution and service fees. All shareholders bear the common
expenses of the Fund pro rata based on 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 0.65% of
average daily net assets and 5.00% of investment income.
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 $3,774 for the period ended
April 30, 1997.
Administrator - Effective March 1, 1997, the Fund has an administrative services
agreement with MFS to provide the Fund with certain financial, legal,
compliance, shareholder communications and other administrative services. As a
partial reimbursement for the cost of providing these services, the Fund pays
MFS an administrative fee up to 0.015% per annum of the Fund's average daily net
assets, provided that the administrative fee is not assessed on Fund assets that
exceed $3 billion.
Distributor - MFD, a wholly owned subsidiary of MFS, as distributor, received
$23,074 for the period ended April 30, 1997, as its portion of the sales charge
on sales of Class A shares of the Fund. The Trustees have adopted a distribution
plan for Class A, Class B, and Class C shares pursuant to Rule 12b-1 of the
Investment Company Act of 1940 as follows:
The Fund's 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 $26,085 for the period ended April 30,
1997. Fees incurred under the distribution plan during the period ended April
30, 1997, were 0.35% of average daily net assets attributable to Class A shares
on an annualized basis.
The Fund's distribution plan provides 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 $13,181 and $8,564 for Class B and Class C shares,
respectively, for the period ended April 30, 1997. Fees incurred under the
distribution plans during the period ended April 30, 1997, were 1.00% of average
daily net assets attributable to Class B and Class C shares on an annualized
basis.
Purchases over $1 million of 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 12 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 12 months of
purchases 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, 1997, were $662, $58,444, and $1,613 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 Fund's average daily net assets at an effective annual rate of
0.13%. Prior to January 1, 1997, the fee was 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 purchased option transactions and
short-term obligations, were as follows:
Purchases Sales
- ------------------------------------------------------------------------------
U.S. government securities $ 50,529,892 $ 43,261,420
============ ============
Investments (non-U.S. government securities) $125,259,978 $138,197,441
============ ============
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 $205,480,656
============
Gross unrealized appreciation $ 37,564,793
Gross unrealized depreciation (4,437,278)
------------
Net unrealized appreciation $ 33,127,515
============
(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
Period Ended April 30, 1997 Year Ended October 31, 1996
-------------------------------- --------------------------------
Shares Amount Shares Amount
- --------------------------------------------------------------------- --------------------------------
<S> <C> <C> <C> <C>
Shares sold 1,307,523 $ 16,631,111 2,084,100 $ 25,150,733
Shares issued to shareholders in
reinvestment of distributions 499,027 6,272,762 468,643 5,535,276
Shares transferred to Class I (141,694) (1,772,591) -- --
Shares reacquired (931,998) (11,876,793) (1,890,835) (22,849,389)
--------- ------------ --------- ------------
Net increase 732,858 $ 9,254,489 661,908 $ 7,836,620
========= ============ ========= ============
<CAPTION>
Class B Shares
Period Ended April 30, 1997 Year Ended October 31, 1996
-------------------------------- --------------------------------
Shares Amount Shares Amount
- --------------------------------------------------------------------- --------------------------------
<S> <C> <C> <C> <C>
Shares sold 1,136,810 $ 14,465,957 1,371,364 $ 16,563,323
Shares issued to shareholders in
reinvestment of distributions 255,573 3,215,124 199,482 2,357,194
Shares reacquired (539,874) (6,892,381) (889,762) (10,770,246)
--------- ------------ --------- ------------
Net increase 852,509 $ 10,788,700 681,084 $ 8,150,271
========= ============ ========= ============
<CAPTION>
Class C Shares
Period Ended April 30, 1997 Year Ended October 31, 1996
-------------------------------- --------------------------------
Shares Amount Shares Amount
- --------------------------------------------------------------------- --------------------------------
<S> <C> <C> <C> <C>
Shares sold 369,801 $ 4,705,957 442,641 $ 5,360,832
Shares issued to shareholders in
reinvestment of distributions 46,719 587,725 32,507 384,467
Shares reacquired (135,735) (1,721,309) (300,333) (3,631,445)
--------- ------------ --------- ------------
Net increase 280,785 $ 3,572,373 174,815 $ 2,113,854
========= ============ ========= ============
</TABLE>
Class I Shares
Period Ended April 30, 1997*
--------------------------------
Shares Amount
- ---------------------------------------------------------------------
Shares sold 7,426 $ 92,924
Shares issued to shareholders in
reinvestment of distributions -- --
Shares transferred from Class A 141,694 1,772,591
Shares reacquired (7,734) (96,967)
--------- ------------
Net increase 141,386 $ 1,768,548
========= ============
*For the period from the commencement of offering of Class I shares, January 2,
1997, to April 30, 1997.
(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 $400 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,
1997, was $983.
(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 April 30, 1997, is as follows:
<TABLE>
<CAPTION>
Written Option Transactions
1997 Calls 1997 Puts
------------------------------------- -------------------------------------
Principal Amounts Principal Amounts
of Contracts of Contracts
(000 Omitted) Premiums (000 Omitted) Premiums
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OUTSTANDING, BEGINNING OF PERIOD -
Deutsche Marks 13,293 $ 66,179 -- $ --
Deutsche Marks/British Pounds 19,522 75,295 -- --
Japanese Yen -- -- 1,164,000 97,182
Options written -
Australian Dollars 2,312 15,615 -- --
British Pounds -- -- 5,840 44,068
Deutsche Marks -- -- 16,211 27,177
Deutsche Marks/British Pounds -- -- 11,646 150,090
Japanese Yen 3,179,306 301,321 3,099,000 232,998
Swiss Francs/Deutsche Marks 7,645 23,201 16,940 209,145
Options terminated in closing transactions -
Australian Dollars (2,312) (15,615) -- --
Deutsche Marks (13,293) (66,179) (16,211) (27,177)
Deutsche Marks/British Pounds -- -- (11,646) (150,090)
Japanese Yen (3,179,306) (301,321) (2,890,000) (253,754)
Swiss Francs/Deutsche Marks -- -- (16,940) (209,145)
Options expired -
Deutsche Marks/British Pounds (19,522) (75,295) -- --
Swiss Francs/Deutsche Marks (7,645) (23,201) -- --
---------- --------- ---------- ---------
OUTSTANDING, END OF PERIOD -- $ -- 1,378,840 $ 120,494
========== ========= ========== =========
OPTIONS OUTSTANDING AT END OF PERIOD
CONSIST OF -
British Pounds -- $ -- 5,840 $ 44,068
Japanese Yen -- -- 1,373,000 76,426
---------- --------- ---------- ---------
OUTSTANDING, END OF PERIOD -- $ -- 1,378,840 $ 120,494
========== ========= ========== =========
</TABLE>
<TABLE>
<CAPTION>
Forward Foreign Currency Exchange Contracts
NET UNREALIZED
CONTRACTS TO CONTRACTS APPRECIATION
SETTLEMENT DATE DELIVER/RECEIVE IN EXCHANGE FOR AT VALUE (DEPRECIATION)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales 6/30/97 BEF 91,136,039 $ 2,834,008 $ 2,562,107 $ 271,901
8/26/97 DEM 24,173,989 14,277,707 14,089,036 188,671
8/26/97 ESP 292,588,567 2,012,799 2,008,035 4,764
5/30/97 - 6/30/97 JPY 3,089,790,218 25,544,622 24,451,313 1,093,309
6/30/97 NOK 620,863 92,331 87,588 4,743
6/30/97 SEK 1,301,829 185,441 166,361 19,080
----------- ----------- ------------
$44,946,908 $43,364,440 $ 1,582,468
=========== =========== ============
Purchases 6/30/97 DEM 5,401,594 $ 3,243,616 $ 3,135,728 $ (107,888)
6/30/97 - 8/26/97 ESP 1,095,473,861 7,637,502 7,515,380 (122,122)
6/30/97 - 8/26/97 JPY 3,284,939,414 27,089,415 26,138,276 (951,139)
8/26/97 NLG 18,111,302 9,555,600 9,381,999 (173,601)
6/30/97 NOK 620,863 96,616 87,588 (9,028)
------------ ------------ ------------
$47,622,749 $46,258,971 $ (1,363,778)
=========== =========== ============
</TABLE>
Forward foreign currency purchases and sales under master netting arrangements
and closed forward foreign currency exchange contracts excluded from above
amounted to a net payable of $735,824 at April 30, 1997.
At April 30, 1997, the Fund had sufficient cash and/or securities to cover any
commitments under these contracts.
(8) RESTRICTED SECURITIES
The Fund may not invest more than 15% of its net assets in securities which are
subject to legal or contractual restrictions on resale. At April 30, 1997, the
Fund owned the following restricted securities (constituting 0.50% of net
assets) which may not be publicly sold without registration under the Securities
Act of 1933. The Fund does not have the right to demand that such securities be
registered. The value of these securities is determined by valuations supplied
by a pricing service or brokers.
<TABLE>
<CAPTION>
DATE OF
DESCRIPTION ACQUISITION SHARES COST VALUE
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Catalana Occidente 4,300 $ 219,797 $ 226,316
Jarvis Hotels PLC 6/21/96 - 9/18/96 390,200 1,034,237 981,606
----------
$1,207,922
==========
</TABLE>
--------------------------------------------
This report is prepared for the general information of shareholders. It is
authorized for distribution to prospective investors only when preceded or
accompanied by a current prospectus.
<PAGE>
MFS(R) WORLD TOTAL RETURN FUND
<TABLE>
<S> <C>
TRUSTEES
A. Keith Brodkin* - Chairman and President ASSISTANT SECRETARY
James R. Bordewick, Jr.*
Richard B. Bailey* - Private Investor;
Former Chairman and Director (until 1991), CUSTODIAN
Massachusetts Financial Services Company; State Street Bank and Trust Company
Director, Cambridge Bancorp; Director,
Cambridge Trust Company INVESTOR INFORMATION
For MFS stock and bond market outlooks, call
Marshall N. Cohan - Private Investor toll free: 1-800-637-4458 anytime from a
touch-tone telephone. For information on MFS
Lawrence H. Cohn, M.D. - Chief of Cardiac mutual funds, call your financial adviser
Surgery, Brigham and Women's Hospital; or, for an information kit, call toll free:
Professor of Surgery, Harvard Medical School 1-800-637-2929 any business day from 9 a.m.
to 5 p.m. Eastern time (or leave a message
The Hon. Sir J. David Gibbons, KBE - Chief anytime).
Executive Officer, Edmund Gibbons Ltd.;
Chairman, Bank of N.T. Butterfield & Son Ltd. INVESTOR SERVICE
MFS Service Center, Inc.
Abby M. O'Neill - Private Investor; P.O. Box 2281
Director, Rockefeller Financial Services, Boston, MA 02107-9906
Inc. (investment advisers)
For general information, call toll free:
Walter E. Robb, III - President and 1-800-225-2606 any business day from
Treasurer, Benchmark Advisors, Inc. 8 a.m. to 8 p.m. Eastern time.
(corporate financial consultants);
President, Benchmark Consulting Group, Inc. For service to speech-or hearing-impaired,
(office services); Trustee, Landmark Funds call toll free: 1-800-637-6576 any business
(mutual funds) day from 9 a.m. to 5 p.m. Eastern time. (To
use this service, your phone must be
Arnold D. Scott* - Senior Executive Vice equipped with a Telecommunications Device
President, Director and Secretary, for the Deaf.)
Massachusetts Financial Services Company
For share prices, account balances, and
Jeffrey L. Shames* - President and Director, exchanges, call toll free: 1-800-MFS-TALK
Massachusetts Financial Services Company (1-800-637-8255) anytime from a touch-tone
telephone.
J. Dale Sherratt - President, Insight
Resources, Inc. (acquisition planning WORLD WIDE WEB
specialists) www.mfs.com
Ward Smith - Former Chairman (until 1994),
NACCO Industries; Director, Sundstrand [DALBAR Logo] For the third year in a
Corporation row, MFS earned a #1
ranking in the DALBAR, Inc. Broker/
INVESTMENT ADVISER Dealer Survey, Main Office Operations
Massachusetts Financial Services Company Service Quality Category. The firm
500 Boylston Street achieved a 3.48 overall score on a
Boston, MA 02116-3741 scale of 1 to 4 in the 1996 survey.
A total of 110 firms responded,
DISTRIBUTOR offering input on the quality of
MFS Fund Distributors, Inc. service they received from 29 mutual
500 Boylston Street fund companies nationwide. The survey
Boston, MA 02116-3741 contained questions about service
quality in 15 categories, including
PORTFOLIO MANAGER "knowledge of phone service
Frederick J. Simmons* contacts," "accuracy of transaction
processing," and "overall ease of
TREASURER doing business with the firm."
W. Thomas London*
ASSISTANT TREASURER
James O. Yost*
SECRETARY
Stephen E. Cavan*
*Affiliated with the Investment Adviser
</TABLE>
<PAGE>
------------
MFS(R) WORLD TOTAL [DALBAR Logo} Bulk Rate
RETURN FUND U.S. Postage
500 Boylston Street P A I D
Boston, MA 02116-3741 MFS
------------
[MFS logo]
INVESTMENT MANAGEMENT
WE INVENTED THE MUTUAL FUND(SM)
(C)1997 MFS Fund Distributors, Inc., 500 Boylston Street, Boston, MA 02116-3741
MWT-3 6/97 31M 24/224/324/824
