<PAGE>
[Logo] M F S(R)
INVESTMENT MANAGEMENT
75 YEARS
WE INVENTED THE MUTUAL FUND(R)
[Graphic Omitted]
MFS(R) GLOBAL
EQUITY FUND
(formerly MFS(R) World Equity Fund)
SEMIANNUAL REPORT o APRIL 30, 1999
DIVERSIFYING YOUR INVESTMENT PORTFOLIO (see page 30)
<PAGE>
TABLE OF CONTENTS
Letter from the Chairman .................................................. 1
Management Review and Outlook ............................................. 3
Performance Summary ....................................................... 8
Portfolio of Investments .................................................. 11
Financial Statements ...................................................... 16
Notes to Financial Statements ............................................. 23
MFS' Year 2000 Readiness Disclosure ....................................... 29
Trustees and Officers ..................................................... 33
MFS(R) ORIGINAL RESEARCH(SM)
RESEARCH HAS BEEN CENTRAL TO INVESTMENT MANAGEMENT AT MFS
SINCE 1932, WHEN WE CREATED ONE OF THE FIRST IN-HOUSE
RESEARCH DEPARTMENTS IN THE MUTUAL FUND (SM)
INDUSTRY. ORIGINAL RESEARCH(SM) AT MFS IS MORE ORIGINAL RESEARCH
THAN JUST CRUNCHING NUMBERS AND CREATING
ECONOMIC MODELS: IT'S GETTING TO KNOW MFS
EACH SECURITY AND EACH COMPANY PERSONALLY.
MAKES A DIFFERENCE
- --------------------------------------------------------------------------------
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
- --------------------------------------------------------------------------------
<PAGE>
LETTER FROM THE CHAIRMAN
[Photo of Jeffrey L. Shames]
Jeffrey L. Shames
Dear Shareholders,
Over 75 years ago, MFS invented the mutual fund, giving Americans greater
access to the investment markets. Since then, we have been guided by a number
of fundamental principles, including diversification and professional
management backed by MFS(R) Original Research(SM), a process by which we seek
long-term investment opportunities.
We have found that these principles have matched those of our shareholders. In
a recent survey for MFS by Roper Starch Worldwide, Inc., a major consumer
research firm, over 60% of mutual fund shareholders said they are investing
for long-term goals such as retirement. The survey also showed that investors
realize that the extraordinary stock market gains of the past few years cannot
be sustained. These views certainly seem to have guided investors during last
year's market correction. Beginning with the collapse of Asian markets at the
end of 1997 and continuing with the volatility in U.S. markets through
October of 1998, only 7% of mutual fund investors took money out of the stock
market.
We are even more pleased that MFS investors reacted calmly to last year's
market turmoil, indicating their commitment to diversification. As a result,
throughout the late summer and fall of 1998, daily purchases of MFS stock and
bond funds were well ahead of redemptions.
Over the past year or so, however, diversified investment programs have not
financially rewarded investors. A very narrow band of about 25 stocks
representing the largest U.S. growth companies has, until recently, vastly
outperformed the rest of the market. In 1998, for example, the return on the
Standard & Poor's 500 Composite Index (a popular, unmanaged index of common
stock total return performance) increased 28.58%. However, over half of the
stocks in the index returned less than 10%, including 198 stocks that posted
negative returns.
While 1997 and 1998 were good years for large-company growth stocks, 1996 was
dominated by the mid-sized value category. Prices of value stocks do not fully
reflect the companies' underlying values or future prospects. In 1995, the
best-performing sector was small-company growth stocks. We believe this change
of market leadership shows that while diversification may not provide the best
performance in the short run, it should benefit investors over the long term. In
fact, as 1999 progresses, we are seeing signs of renewed strength from a broader
group of industries, including electric utilities and paper products and
chemical companies. We believe our diversified MFS Family of Funds(R), supported
by Original Research, is well positioned to benefit from a broader market.
Most mutual fund investors refrain from trying to predict short-term trends.
Despite the large stock market gains of the past several years, the Roper
Starch survey shows that people do not see performance as the only
reason to invest. These investors also cite a desire to put investment
decisions in the hands of experts, a belief that mutual funds can be less
risky than other investments, and an appreciation of the convenience of mutual
fund investing.
We appreciate the fact that our fund shareholders and their advisers share our
belief that mutual fund investing is not a way to speculate in the markets but
is a way to use the investment markets to help them work toward their long-
term goals. Our goal at MFS is to offer professionally managed investment
products with the potential to sustain returns over a variety of market
cycles.
We thank you for your confidence and welcome any questions or comments you may
have.
Respectfully,
/s/ Jeffrey L. Shames
Jeffrey L. Shames
Chairman and Chief Executive Officer
MFS Investment Management(R)
May 17, 1999
<PAGE>
MANAGEMENT REVIEW AND OUTLOOK
[Photo of David R. Mannheim]
David R. Mannheim
For the six months ended April 30, 1999, Class A shares of the Fund provided a
total return of 12.32%, Class B and Class C shares 11.89%, and Class I shares
12.43%. These returns assume the reinvestment of distributions but exclude the
effects of any sales charges.
For the same period, the average global fund tracked by Lipper Analytical
Services, Inc., an independent firm that reports mutual fund performance,
returned 19.65%. The Morgan Stanley Capital International (MSCI) World Index,
a broad, unmanaged index of global equities, returned 19.78%.
Q. WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE OVER THE PAST SIX MONTHS?
A. Although the Fund benefited from the strong performance of global equity
markets since October, the Fund's relative underperformance was due to the
fact that over 60% of its assets are invested outside the United States.
Since the Fund's overseas investments are in local currencies and the U.S.
dollar has been the strongest international currency, the Fund's gains in
overseas stocks were reduced when translated back into dollars; therefore,
any declines in our positions were magnified. In addition, global stock
markets, like the U.S. market, have been very narrow, with the largest-
company stocks providing the strongest performance over the past year or
so. The Fund, however, is diversified among companies of differing market
capitalizations.
Finally, stock prices of our U.S. computer software holdings fell. Although
the exact impact of the Year 2000 (Y2K) computer problem is unknown, investor
perception that there might be problems has hurt the software stocks. We
think the Y2K issue will be behind us by next spring. At that time, companies
such as BMC Software and Computer Associates, our two largest holdings,
should be among the best positioned in what we expect to be a very rapidly
growing industry.
Q. HAVE YOU MADE ANY CHANGES TO THE WAY YOU MANAGE THE FUND?
A. No. We are not reacting to developments we can't control. For example, we
aren't using currency hedges to offset changes in the value of the dollar
against other currencies. We believe it is easier to identify stocks that
may perform well than it is to predict short-term currency movements. The
cost of hedging makes it even more difficult to consistently add value to a
portfolio. We focus on what we think are the best individual stocks, rather
than on trying to pick countries or regions. That means if one country
outperforms -- for example, the United States -- we may not participate
fully in the gains of that market.
Q. HAVE YOU CHANGED YOUR ALLOCATIONS TO ANY SECTORS?
A. We cut our European aerospace and defense holdings because the
consolidation investors expected for this industry did not develop as
planned. Last year British Aerospace, one of our holdings, made an
acquisition that investors thought was too costly. As a result, stocks in
the entire sector fell. We also owned Saab AB and Thomson CSF. We sold
Thomson, but we still own British Aerospace and Saab. We think the stock
prices of these two companies, relative to the growth we
expect for them, are more attractive than Thomson. At the same time, we
have added to our computer software holdings. For example, we increased our
position in BMC Software because of the growth potential I described
earlier.
Q. THE UNITED STATES IS THE FUND'S LARGEST MARKET. WHAT ARE YOU BUYING THERE?
A. We probably have made more shifts in our U.S. holdings than in any other
market. Our technology weighting has increased only slightly since the last
report, but we have added stocks or increased our positions in computer
software. We also bought more media and communications stocks because
companies in these sectors continue to consolidate, cut costs, and expand
their markets. One of the best examples in the portfolio is Time Warner. We
also own Disney, which has a strong broadcasting business in addition to
its film and theme park businesses.
Q. WHY DOES THE FUND HAVE A LARGE POSITION IN EUROPE?
A. We consistently have maintained a larger position in Europe than the MSCI
World Index has. The Fund has about 37% of its assets invested there (not
including the United Kingdom) compared to 22% for the index. Since we
believe that corporate earnings growth in Europe will be equal to, if not
better than, that of the United States for the next year or so, we think
that the overweighting in Europe makes sense. We also are seeing signs of
renewed growth in Europe, and many European exporters are benefiting from
the rebound of Asian and emerging economies. On a price-to-earnings basis,
we can get the same growth rate from a European stock for about 10% less
than what we would pay for a U.S. stock.
Q. WHAT STOCKS IN EUROPE ARE YOU BUYING?
A. We added Mannesmann, a German-based telecommunications conglomerate that is
benefiting from the growth of the European telecommunications market. We also
are trying to take advantage of the consolidation in the European financial
services industry. For example, when UBS Bank in Switzerland merged with
Swiss Bank Corp., we didn't buy the stock because we thought it was
overvalued. However, when the stock returned to what we thought was a more
attractive price a few months ago, we did buy it. It has performed well since
then, perhaps because investors see the potential benefits of the
consolidation.
Q. WHAT'S YOUR OUTLOOK FOR ASIA, AND WHAT STOCKS DO YOU HOLD THERE?
A. Except for Japan, we think that economically, the worst is over. Most Asian
governments have taken serious steps to cut spending and curtail
speculative development. However, we still haven't seen a recovery in
corporate earnings growth in most of these markets, so our Asian exposure
continues to be small. In fact, the Fund has just 2.4% of the portfolio in
the Asia/Pacific region (except Japan), and 2% of that is in Australia. QBE
Insurance of Australia, the Fund's largest position in the region, is
benefiting from the global consolidation of the industry.
Q. DO YOU HAVE ANY EMERGING MARKET EXPOSURE?
A. Very little. Although there has been some improvement in emerging-market
economies, it is not yet reflected in corporate earnings growth.
So our emerging market exposure is confined to three Greek stocks,
including Hellenic Telecommunications and STET Hellas, a Greek cellular
phone company, both of which are benefiting from the rapid growth in
European telecommunications.
Q. HAVE ANY STOCKS PERFORMED PARTICULARLY WELL?
A. NTT Mobile Communication Network, Inc., a Japanese cellular company, has
been a good performer. Cellular communications is one of the few domestic
Japanese industries that has done fairly well. Investors hope that the
Japanese government's recent moves to get the economy back on track,
including reforms to the banking system and tax cuts, may eventually prove
beneficial. Next PLC, a British fashion retailer, also has performed well,
thanks to strong sales and the addition of new stores. Finally, Galileo
International in the United States has been a very good stock. The company
operates airport reservations systems and has benefited from the strength
of the travel industry, which has resulted from the strong consumer sector.
Q. LOOKING AHEAD, WHAT DO YOU THINK ARE THE BEST OPPORTUNITIES FOR THE FUND?
A. We like U.S. software companies and cellular stocks globally. As I
mentioned earlier, the recent decline in software stocks mostly is related
to temporary uncertainties about Y2K. We think software companies' prices
are attractive in relation to their long-term growth prospects. In Europe,
not only are there more people with cellular telephones than in the United
States, but the number also is growing faster, so we see further growth
potential there. Also, Europe has a common standard for cellular phones.
For example, a British citizen can use his cell phone anywhere in Europe.
That already has promoted tremendous growth, and we think the growth will
continue.
/s/ David R. Mannheim
David R. Mannheim
Portfolio Manager
The opinions expressed in this report are those of the portfolio manager and
are current only through the end of the period of the report as stated on the
cover. The manager's views are subject to change at any time based on market
and other conditions, and no forecasts can be guaranteed.
It is not possible to invest directly in an index.
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER'S PROFILE
- --------------------------------------------------------------------------------
DAVID R. MANNHEIM IS SENIOR VICE PRESIDENT OF MFS INVESTMENT MANAGEMENT (R)
AND PORTFOLIO MANAGER OF MFS(R) GLOBAL EQUITY FUND, MFS(R) INTERNATIONAL
GROWTH FUND, MFS(R) INSTITUTIONAL INTERNATIONAL EQUITY FUND, AND THE
INTERNATIONAL GROWTH SERIES OFFERED THROUGH MFS(R)/SUN LIFE ANNUITY PRODUCTS.
MR. MANNHEIM JOINED MFS IN 1988 AND WAS NAMED INVESTMENT OFFICER IN
1990, ASSISTANT VICE PRESIDENT IN 1991, VICE PRESIDENT AND PORTFOLIO
MANAGER IN 1992, AND SENIOR VICE PRESIDENT IN 1997. HE IS A GRADUATE OF
AMHERST COLLEGE AND THE MASSACHUSETTS INSTITUTE OF TECHNOLOGY SLOAN
SCHOOL OF MANAGEMENT.
ALL EQUITY PORTFOLIO MANAGERS BEGAN THEIR CAREERS AT MFS INVESTMENT
MANAGEMENT(R) AS RESEARCH ANALYSTS. OUR PORTFOLIO MANAGERS ARE SUPPORTED
BY AN INVESTMENT STAFF OF OVER 100 PROFESSIONALS UTILIZING MFS(R)
ORIGINAL RESEARCH(SM), A COMPANY-ORIENTED, BOTTOM-UP PROCESS OF
SELECTING SECURITIES.
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. A prospectus containing more information,
including the exchange privilege and all charges and expenses, for any other MFS
product is available from your financial adviser, or by calling MFS at
1-800-225-2606. Please read it carefully before investing or sending money.
<PAGE>
- --------------------------------------------------------------------------------
FUND FACTS
- --------------------------------------------------------------------------------
OBJECTIVE: SEEKS CAPITAL APPRECIATION BY INVESTING PRIMARILY IN
STOCKS OF U.S. AND NON-U.S. ISSUERS.
COMMENCEMENT OF
INVESTMENT OPERATIONS: DECEMBER 29, 1986
CLASS INCEPTION: CLASS A SEPTEMBER 7, 1993
CLASS B DECEMBER 29, 1986
CLASS C JANUARY 3, 1994
CLASS I JANUARY 2, 1997
SIZE: $674.6 MILLION NET ASSETS AS OF APRIL 30, 1999
PERFORMANCE SUMMARY
Because mutual funds are designed for investors with long-term goals, we have
provided cumulative results as well as the average annual total returns for
the applicable time periods. Investment results reflect the percentage change
in net asset value, including reinvestment of dividends. (See Notes to
Performance Summary for more information.)
AVERAGE ANNUAL AND CUMULATIVE TOTAL RATES OF RETURN
THROUGH APRIL 30, 1999
CLASS A
10 Years/
6 Months 1 Year 3 Years 5 Years Life
- --------------------------------------------------------------------------------
Cumulative Total Return +12.32% +1.32% +48.78% +93.39% +211.97%
- --------------------------------------------------------------------------------
Average Annual Total Return -- +1.32% +14.16% +14.10% + 12.05%
- --------------------------------------------------------------------------------
SEC Results -- -4.51% +11.93% +12.76% + 11.39%
- --------------------------------------------------------------------------------
CLASS B
10 Years/
6 Months 1 Year 3 Years 5 Years Life
- --------------------------------------------------------------------------------
Cumulative Total Return +11.89% +0.51% +45.40% +85.31% +196.73%
- --------------------------------------------------------------------------------
Average Annual Total Return -- +0.51% +13.29% +13.13% + 11.49%
- --------------------------------------------------------------------------------
SEC Results -- -3.33% +12.51% +12.89% + 11.49%
- --------------------------------------------------------------------------------
CLASS C
10 Years/
6 Months 1 Year 3 Years 5 Years Life
- --------------------------------------------------------------------------------
Cumulative Total Return +11.89% +0.51% +45.40% +85.63% +197.53%
- --------------------------------------------------------------------------------
Average Annual Total Return -- +0.51% +13.29% +13.17% + 11.52%
- --------------------------------------------------------------------------------
SEC Results -- -0.45% +13.29% +13.17% + 11.52%
- --------------------------------------------------------------------------------
CLASS I
10 Years/
6 Months 1 Year 3 Years 5 Years Life
- --------------------------------------------------------------------------------
Cumulative Total Return +12.43% +1.54% +48.94% +89.85% +203.99%
- --------------------------------------------------------------------------------
Average Annual Total Return -- +1.54% +14.20% +13.68% + 11.76%
- --------------------------------------------------------------------------------
NOTES TO PERFORMANCE SUMMARY
Class A share ("A") SEC results include the maximum 5.75% sales charge. Class
B share ("B") SEC results reflect the applicable contingent deferred sales
charge (CDSC), which declines over six years from 4% to 0%. Class C shares
("C") have no initial sales charge but, like B, have higher annual fees and
expenses than A. C SEC results reflect the 1% CDSC applicable to shares
redeemed within 12 months. Class I shares ("I") have no sales charge or Rule
12b-1 fees and are only available to certain institutional investors.
A and C results include the performance and the operating expenses
(e.g., Rule 12b-1 fees) of B for periods prior to the inception of A and C.
Because operating expenses of A are lower than those of B, A performance
generally would have been higher than B performance. Operating expenses
of C are not significantly different from those of B.
I results include the performance and the operating expenses (e.g., Rule
12b-1 fees) of B for periods prior to the inception of I. Because operating
expenses of B are greater than those of I, I performance generally would
have been higher than B performance. The B performance included in the
I performance has been adjusted to reflect the fact that I have no CDSC.
Performance results reflect any applicable expense subsidies and waivers,
without which the results would have been less favorable. Subsidies and
waivers may be rescinded at any time. See the prospectus for details.
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.
Investments in foreign and emerging market securities may provide superior
returns but also involve greater risk than U.S. investments. Investments in
foreign and emerging market securities may be favorably or unfavorably
affected by changes in interest rates and currency exchange rates, market
conditions, and the economic and political conditions of the countries where
investments are made. These risks may increase share price volatility. See the
prospctus for details.
PORTFOLIO CONCENTRATION AS OF APRIL 30, 1999
FIVE LARGEST STOCK SECTORS
Financial Services 19.7%
Technology 15.5%
Leisure 11.1%
Retailing 10.1%
Consumer Staples 9.1%
TOP 10 STOCK HOLDINGS
BMC SOFTWARE, INC. 3.3% MANNESMANN AG 1.9%
U.S. computer software company German industrial and telecommunications
company
COMPUTER ASSOCIATES INTERNATIONAL,
INC. 3.1% NTT MOBILE COMMUNICATION NETWORK,
U.S. computer software company INC. 1.8%
Japanese cellular telephone company
GALILEO INTERNATIONAL, INC. 2.6%
U.S. airline reservation systems RELIASTAR FINANCIAL CORP. 1.8%
company U.S. life and health insurance company
BENCKISER N.V. "B" 2.3% SAAB AB, "B" 1.8%
Dutch consumer products company Swedish aircraft manufacturer
RITE AID CORP. 2.0%
U.S. drug store chain
BRITISH AEROSPACE PLC 1.9%
Defense and aircraft company
The portfolio is actively managed, and holdings are subject to change.
<PAGE>
PORTFOLIO OF INVESTMENTS (Unaudited) - April 30, 1999
Stocks - 95.8%
- --------------------------------------------------------------------------------
ISSUER SHARES VALUE
- --------------------------------------------------------------------------------
Foreign Stocks - 57.8%
Australia - 2.0%
QBE Insurance Group Ltd. (Insurance)* 2,239,291 $ 10,013,526
Seven Network Ltd. (Entertainment) 1,029,500 3,462,276
------------
$ 13,475,802
- --------------------------------------------------------------------------------
Canada - 1.2%
Canadian National Railway Co. (Railroads) 132,500 $ 8,364,063
- --------------------------------------------------------------------------------
Finland - 2.4%
Helsingin Puhelin Oyj (Telecommunications) 156,075 $ 6,575,506
Pohjola Group Insurance Corp. (Insurance) 89,390 4,233,254
Telephone Cooperative HPY (Telecommunications)* 739 1,989,792
Tieto Corp. (Computer Software - Systems) 79,900 3,180,615
------------
$ 15,979,167
- --------------------------------------------------------------------------------
France - 7.9%
Castorama Dubois Investisse (Stores - Building
Products) 27,229 $ 6,512,127
Pernod Ricard Co. (Beverages) 103,100 6,950,924
Renault Regie Nationale (Automobiles) 74,500 3,118,264
Societe Generale (Banks and Credit Cos.) 52,200 9,336,989
Television Francaise (Entertainment) 50,500 9,864,750
Total S.A., "B" (Oils) 78,000 10,673,886
Union des Assurances Federales S.A. (Insurance) 61,200 6,811,065
------------
$ 53,268,005
- --------------------------------------------------------------------------------
Germany - 5.0%
Henkel KGaA (Chemicals) 101,000 $ 7,987,781
HypoVereinsbank (Banks and Credit Cos.) 80,300 5,231,469
Mannesmann AG (Conglomerate) 90,820 11,948,751
VEBA AG (Oil and Gas) 67,500 3,699,083
Wella AG (Consumer Goods and Services)* 5,765 4,535,013
------------
$ 33,402,097
- --------------------------------------------------------------------------------
Greece - 1.3%
Antenna TV S.A., ADR (Broadcasting)* 120,200 $ 1,412,350
Hellenic Telecommunication Organization S.A.,
GDR (Telecommunications) 219,143 5,086,423
STET Hellas Telecommunications S.A., ADR
(Telecommunications)* 88,500 2,389,500
------------
$ 8,888,273
- --------------------------------------------------------------------------------
Ireland - 1.9%
Allied Irish Bank PLC (Banks and Credit Cos.) 79,400 $ 1,278,188
Anglo Irish Bank PLC (Banks and Credit Cos.)* 3,848,139 11,386,986
------------
$ 12,665,174
- --------------------------------------------------------------------------------
Israel - 0.6%
Oshap Technologies Ltd. (Computer Software -
Systems) 392,900 $ 4,223,675
- --------------------------------------------------------------------------------
Italy - 3.2%
Banca Carige S.p.A. (Banks and Credit Cos.) 535,000 $ 4,948,583
ERG S.p.A. (Oils) 998,900 3,269,691
Mediaset S.p.A. (Entertainment) 696,300 6,028,832
Telecom Italia Mobile S.p.A.
(Telecommunications) 2,098,500 7,024,108
------------
$ 21,271,214
- --------------------------------------------------------------------------------
Japan - 8.8%
Canon, Inc. (Special Products and Services) 269,000 $ 6,580,213
Chugai Pharmaceutical Co., Ltd.
(Pharmaceuticals) 718,000 8,541,174
Chukyo Coca-Cola Bottling Co., Ltd. (Food and
Beverage Products) 177,000 2,038,829
Fujitsu Ltd. (Computer Hardware - Systems) 265,000 4,539,876
Kita Kyushu Coca-Cola Bottling Co., Ltd. (Food
and Beverage Products) 47,000 2,291,530
Mikuni Coca-Cola Bottling Co., Ltd. (Food and
Beverage Products) 235,000 4,921,672
NTT Mobile Communication Network, Inc.
(Telecommunications) 202 11,845,522
Olympus Optical Co. (Conglomerate) 669,000 8,227,293
Osaka Sanso Kogyo Ltd. (Chemicals) 296,000 585,206
Sanyo Coca-Cola Bottling Co., Ltd. (Food and
Beverage Products) 88,000 2,086,286
Takeda Chemical Industries Co.
(Pharmaceuticals) 154,000 6,695,652
Ushio, Inc. (Electronics) 69,000 787,283
------------
$ 59,140,536
- --------------------------------------------------------------------------------
Netherlands - 5.0%
Akzo Nobel N.V. (Chemicals) 131,600 $ 5,940,390
Benckiser N.V., "B" (Consumer Goods and
Services) 273,635 15,082,215
IHC Caland N.V. (Marine Equipment)* 69,000 3,125,571
ING Groep N.V. (Financial Services)* 153,648 9,458,416
------------
$ 33,606,592
- --------------------------------------------------------------------------------
Norway - 1.5%
Sparebanken NOR (Banks and Credit Cos.) 274,800 $ 5,244,006
Storebrand ASA (Insurance)* 702,745 5,085,181
------------
$ 10,329,187
- --------------------------------------------------------------------------------
Portugal - 1.3%
Banco Pinto & Sotto Mayor S.A. (Banks and
Credit Cos.) 333,744 $ 6,219,867
Telecel - Comunicacaoes Pessoais S.A.
(Telecommunications) 19,000 2,537,857
------------
$ 8,757,724
- --------------------------------------------------------------------------------
Singapore - 0.3%
Allgreen Properties Ltd. (Real Estate
Development)* 240,000 $ 145,772
Development Bank of Singapore Ltd. (Banks and
Credit Cos.) 193,000 2,048,591
------------
$ 2,194,363
- --------------------------------------------------------------------------------
Sweden - 3.2%
Ericsson LM, "B" (Telecommunication Equipment) 368,000 $ 9,666,983
Saab AB, "B" (Aerospace)* 1,446,024 11,747,230
------------
$ 21,414,213
- --------------------------------------------------------------------------------
Switzerland - 2.6%
Barry Callebaut AG (Food and Beverage Products) 32,145 $ 5,205,753
Novartis AG (Medical and Health Products) 1,961 2,871,042
UBS AG (Banks and Credit Cos.)* 28,500 9,679,386
------------
$ 17,756,181
- --------------------------------------------------------------------------------
United Kingdom - 9.6%
AstraZeneca Group PLC (Medical and Health
Products) 158,424 $ 6,181,392
BP Amoco PLC (Oils)* 444,246 8,430,352
BP Amoco PLC, ADR (Oils) 19,391 2,194,819
British Aerospace PLC (Aerospace and Defense)* 1,602,214 11,981,569
Cable & Wireless Communications PLC
(Telecommunications) 948,564 10,815,661
Capital Radio PLC (Broadcasting) 123,400 1,710,656
Kwik-Fit Holdings PLC (Automotive Repair
Centers) 319,000 2,752,331
Next PLC (Stores) 748,000 9,247,555
TeleWest Communications PLC (Entertainment)* 1,457,900 6,728,989
Tomkins PLC (Conglomerate) 1,157,000 4,912,216
------------
$ 64,955,540
- --------------------------------------------------------------------------------
Total Foreign Stocks $389,691,806
- --------------------------------------------------------------------------------
U.S. Stocks - 38.0%
Aerospace - 1.3%
Raytheon Co., "A" 124,000 $ 8,579,250
- --------------------------------------------------------------------------------
Automotive - 0.4%
TRW, Inc. 59,400 $ 2,491,088
- --------------------------------------------------------------------------------
Business Machines - 1.6%
International Business Machines Corp. 37,000 $ 7,739,937
Sun Microsystems, Inc.* 53,000 3,170,063
------------
$ 10,910,000
- --------------------------------------------------------------------------------
Business Services - 3.9%
Computer Sciences Corp.* 62,000 $ 3,692,875
Galileo International, Inc. 336,500 16,488,500
H & R Block, Inc. 114,000 5,486,250
------------
$ 25,667,625
- --------------------------------------------------------------------------------
Computer Software - Systems - 8.2%
BMC Software, Inc.* 500,675 $ 21,560,317
Cadence Design Systems, Inc.* 97,500 1,322,344
Computer Associates International, Inc. 462,100 19,725,894
Compuware Corp.* 143,500 3,497,812
Quickturn Design Systems, Inc.* 30,000 420,000
SunGard Data Systems, Inc.* 77,000 2,459,188
Synopsys, Inc.* 130,000 6,126,250
------------
$ 55,111,805
- --------------------------------------------------------------------------------
Conglomerates - 0.6%
Sodexho Marriott Services, Inc.* 178,200 $ 4,042,913
- --------------------------------------------------------------------------------
Consumer Goods and Services - 1.1%
Kimberly-Clark Corp. 125,400 $ 7,688,587
- --------------------------------------------------------------------------------
Entertainment - 6.3%
Disney (Walt) Co. 338,000 $ 10,731,500
Hearst-Argyle Television, Inc.* 216,100 5,510,550
MediaOne Group, Inc.* 108,800 8,874,000
Mirage Resorts, Inc.* 355,000 7,965,312
Time Warner, Inc. 137,500 9,625,000
------------
$ 42,706,362
- --------------------------------------------------------------------------------
Insurance - 5.3%
CIGNA Corp. 87,000 $ 7,585,313
Hartford Financial Services Group, Inc. 171,000 10,078,312
Nationwide Financial Services, Inc., "A" 90,600 4,201,575
ReliaStar Financial Corp. 321,700 11,822,475
Transamerica Corp. 32,000 2,280,000
------------
$ 35,967,675
- --------------------------------------------------------------------------------
Medical and Health Products - 0.9%
Becton Dickinson & Co. 169,000 $ 6,284,687
- --------------------------------------------------------------------------------
Medical and Health Technology and Services - 0.7%
McKesson HBOC, Inc. 140,820 $ 4,928,700
- --------------------------------------------------------------------------------
Oils - 0.7%
Conoco, Inc., "A" 165,000 $ 4,475,625
- --------------------------------------------------------------------------------
Stores - 4.4%
AutoZone, Inc.* 301,000 $ 9,030,000
CVS Corp. 77,200 3,676,650
Federated Department Stores, Inc.* 97,000 4,528,687
Rite Aid Corp. 542,000 12,635,375
------------
$ 29,870,712
- --------------------------------------------------------------------------------
Supermarkets - 2.5%
American Stores Co. 274,000 $ 8,648,125
Kroger Co.* 12,100 657,181
Meyer (Fred), Inc.* 135,500 7,333,938
------------
$ 16,639,244
- --------------------------------------------------------------------------------
Telecommunications - 0.1%
Global TeleSystems Group, Inc.* 14,300 $ 945,588
- --------------------------------------------------------------------------------
Total U.S. Stocks $256,309,861
- --------------------------------------------------------------------------------
Total Stocks (Identified Cost, $554,421,797) $646,001,667
- --------------------------------------------------------------------------------
Short-Term Obligations - 3.9%
- --------------------------------------------------------------------------------
PRINCIPAL AMOUNT
(000 OMITTED)
- --------------------------------------------------------------------------------
Federal Home Loan Bank, due 5/05/99 $ 1,140 $ 1,139,405
Federal Home Loan Mortgage Corp.,
due 5/17/99 - 6/11/99 15,445 15,379,699
Federal National Mortgage Assoc., due 5/03/99 10,000 9,997,433
- --------------------------------------------------------------------------------
Total Short-Term Obligations, at Amortized Cost $ 26,516,537
- --------------------------------------------------------------------------------
Total Investments (Identified Cost, $580,938,334) $672,518,204
Other Assets, Less Liabilities - 0.3% 2,053,954
- --------------------------------------------------------------------------------
Net Assets - 100.0% $674,572,158
- --------------------------------------------------------------------------------
* Non-income producing security.
## SEC Rule 144A restriction.
+ Restricted security.
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS
Statement of Assets and Liabilities (Unaudited)
- --------------------------------------------------------------------------------
APRIL 30, 1999
- --------------------------------------------------------------------------------
Assets:
Investments, at value (identified cost, $580,938,334) $672,518,204
Cash 159,447
Foreign currency, at value (identified cost, $1,432,658) 1,432,658
Receivable for Fund shares sold 3,312,424
Receivable for investments sold 7,493,652
Dividends receivable 1,695,488
Other assets 7,839
------------
Total assets $686,619,712
------------
Liabilities:
Payable for investments purchased $ 8,630,180
Payable for Fund shares reacquired 2,974,168
Payable to affiliates -
Management fee 18,653
Administrative fee 280
Shareholder servicing agent fee 1,865
Distribution and service fee 174,808
Accrued expenses and other liabilities 247,600
------------
Total liabilities $ 12,047,554
------------
Net assets $674,572,158
============
Net assets consist of:
Paid-in capital $520,796,066
Unrealized appreciation on investments and translation of
assets
and liabilities in foreign currencies 91,559,131
Accumulated undistributed net realized gain on
investments
and foreign transactions 63,393,645
Accumulated net investment loss (1,176,684)
------------
Total $674,572,158
============
Shares of beneficial interest outstanding 31,120,769
============
Class A shares:
Net asset value per share
(net assets of $340,362,444 / 15,603,575 shares of
beneficial interest outstanding) $21.81
======
Offering price per share (100 / 94.25 of net asset value
per share) $23.14
======
Class B shares:
Net asset value and offering price per share
(net assets of $294,814,666 / 13,668,159 shares of
beneficial interest outstanding) $21.57
======
Class C shares:
Net asset value and offering price per share
(net assets of $38,573,505 / 1,811,542 shares of
beneficial interest outstanding) $21.29
======
Class I shares:
Net asset value, offering price, and redemption price
per share (net assets of $821,543 / 37,493 shares of
beneficial interest outstanding) $21.91
======
On sales of $50,000 or more, the offering price of Class A shares is reduced. A
contingent deferred sales charge may be imposed on redemptions of Class A, Class
B, and Class C shares.
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS -- continued
Statement of Operations (Unaudited)
- --------------------------------------------------------------------------------
SIX MONTHS ENDED APRIL 30, 1999
- --------------------------------------------------------------------------------
Net investment income (loss):
Income -
Dividends $ 4,334,452
Interest 1,255,002
Foreign taxes withheld (401,784)
-----------
Total investment income $ 5,187,670
-----------
Expenses -
Management fee $ 3,209,584
Trustees' compensation 20,132
Shareholder servicing agent fee 354,084
Distribution and service fee (Class A) 405,601
Distribution and service fee (Class B) 1,447,711
Distribution and service fee (Class C) 175,008
Administrative fee 33,131
Custodian fee 224,451
Printing 62,488
Postage 91,033
Auditing fees 19,700
Legal fees 2,105
Miscellaneous 321,708
-----------
Total expenses $ 6,366,736
Fees paid indirectly (65,415)
-----------
Net expenses $ 6,301,321
-----------
Net investment loss $(1,113,651)
-----------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $64,093,036
Foreign currency transactions (485,452)
-----------
Net realized gain on investments and foreign
currency transactions $63,607,584
-----------
Change in unrealized appreciation (depreciation) - Investments $ 9,348,145
Translation of assets and liabilities in foreign currencies 31,016
-----------
Net unrealized gain on investments $ 9,379,161
-----------
Net realized and unrealized gain on investments and
foreign currency $72,986,745
-----------
Increase in net assets from operations $71,873,094
===========
See notes to financial statements
<PAGE>
<TABLE>
FINANCIAL STATEMENTS -- continued
<CAPTION>
Statement of Changes in Net Assets
- ------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1999 OCTOBER 31, 1998
(UNAUDITED)
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment loss $ (1,113,651) $ (855,865)
Net realized gain on investments and foreign
currency transactions 63,607,584 27,285,549
Net unrealized gain on investments and foreign
currency translation 9,379,161 9,488,026
------------ ------------
Increase in net assets from operations $ 71,873,094 $ 35,917,710
------------ ------------
Distributions declared to shareholders -
From net investment income (Class A) $ -- $ (989,278)
From net investment income (Class C) -- (12,160)
From net investment income (Class I) -- (3,499)
From net realized gain on investments and foreign
currency transactions (Class A) (13,250,121) (8,921,954)
From net realized gain on investments and foreign
currency transactions (Class B) (12,904,747) (13,016,806)
From net realized gain on investments and foreign
currency transactions (Class C) (1,483,607) (889,258)
From net realized gain on investments and foreign
currency transactions (Class I) (30,531) (23,223)
------------ ------------
Total distributions declared to shareholders $(27,669,006) $(23,856,178)
------------ ------------
Net increase in net assets from Fund share transactions $ 52,306,096 $128,126,288
------------ ------------
Total increase in net assets $ 96,510,184 $140,187,820
Net assets:
At beginning of period 578,061,974 437,874,154
------------ ------------
At end of period (including accumulated net investment
loss of $1,176,684 and $63,033, respectively) $674,572,158 $578,061,974
============ ============
See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS -- continued
<CAPTION>
Financial Highlights
- ------------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
SIX MONTHS ENDED -------------------------------------------------------------------
APRIL 30, 1999 1998 1997 1996 1995 1994
(UNAUDITED)
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS A
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per share data (for a share outstanding
throughout each period):
Net asset value - beginning of
period $20.35 $20.09 $18.45 $16.68 $16.95 $16.56
------ ------ ------ ------ ------ ------
Income from investment operations# -
Net investment income $ 0.01 $ 0.06 $ 0.08 $ 0.07 $ 0.09 $ 0.03
Net realized and unrealized gain
on investments and foreign
currency 2.44 1.35 3.49 2.60 1.37 1.13
------ ------ ------ ------ ------ ------
Total from investment operations $ 2.45 $ 1.41 $ 3.57 $ 2.67 $ 1.46 $ 1.16
------ ------ ------ ------ ------ ------
Less distributions declared to shareholders -
From net investment income $ -- $(0.11) $ -- $ -- -- $ --
From net realized gain on
investments and foreign currency
transactions (0.99) (1.04) (1.93) (0.90) (1.73) (0.70)
In excess of net investment income -- -- -- -- -- (0.07)
------ ------ ------ ------ ------ ------
Total distributions declared to
shareholders $(0.99) $(1.15) $(1.93) $(0.90) $(1.73) $(0.77)
------ ------ ------ ------ ------ ------
Net asset value - end of period $21.81 $20.35 $20.09 $18.45 $16.68 $16.95
====== ====== ====== ====== ====== ======
Total return(+) 12.32%++ 7.46% 20.81% 16.72% 10.16% 7.03%
Ratios (to average net assets)/
Supplemental data:
Expenses## 1.61%+ 1.60% 1.63% 1.65% 1.61% 1.54%
Net investment income 0.05%+ 0.28% 0.42% 0.38% 0.58% 0.15%
Portfolio turnover 47% 64% 65% 83% 73% 99%
Net assets at end of period
(000 omitted) $340,362 $280,454 $167,390 $94,909 $52,164 $16,968
+ Annualized.
++ Not annualized.
# Per share data are based on average shares outstanding.
## The Fund has an expense offset arrangement which reduces the Fund's custodian fees based upon the amount of cash maintained by
the Fund with its custodian and dividend disbursing agent. For fiscal years ending after September 1, 1995, the Fund's expenses
are calculated without reduction for this expense offset arrangement.
(+) 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.
See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS -- continued
<CAPTION>
Financial Highlights - continued
- ------------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
SIX MONTHS ENDED -------------------------------------------------------------------
APRIL 30, 1999 1998 1997 1996 1995 1994
(UNAUDITED)
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS B
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per share data (for a share outstanding
throughout each period):
Net asset value - beginning of
period $20.21 $19.97 $18.36 $16.55 $16.78 $16.53
------ ------ ------ ------ ------ ------
Income from investment operations# -
Net investment loss $(0.08) $(0.11) $(0.07) $(0.08) $(0.05) $(0.17)
Net realized and unrealized
gain on investments and
foreign currency 2.43 1.39 3.46 2.60 1.37 1.13
------ ------ ------ ------ ------ ------
Total from investment
operations $ 2.35 $ 1.28 $ 3.39 $ 2.52 $ 1.32 $ 0.96
------ ------ ------ ------ ------ ------
Less distributions declared to shareholders -
From net realized gain on
investments and foreign
currency transactions $(0.99) $(1.04) $(1.78) $(0.71) $(1.55) $(0.70)
In excess of net investment
income -- -- -- -- -- (0.01)
------ ------ ------ ------ ------ ------
Total distributions declared
to shareholders $(0.99) $(1.04) $(1.78) $(0.71) $(1.55) $(0.71)
------ ------ ------ ------ ------ ------
Net asset value - end of period $21.57 $20.21 $19.97 $18.36 $16.55 $16.78
====== ====== ====== ====== ====== ======
Total return 11.89%++ 6.75% 19.74% 15.75% 9.07% 5.91%
Ratios (to average net assets)/
Supplemental data:
Expenses## 2.36%+ 2.35% 2.39% 2.45% 2.55% 2.58%
Net investment loss (0.74)%+ (0.51)% (0.36)% (0.44)% (0.35)% (1.01)%
Portfolio turnover 47% 64% 65% 83% 73% 99%
Net assets at end of period
(000 omitted) $294,815 $267,886 $253,354 $182,139 $156,286 $175,438
+ Annualized.
++ Not annualized.
# Per share data are based on average shares outstanding.
## The Fund has an expense offset arrangement which reduces the Fund's custodian fees based upon the amount of cash maintained by
the Fund with its custodian and dividend disbursing agent. For fiscal years ending after September 1, 1995, the Fund's expenses
are calculated without reduction for this expense offset arrangement.
See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS -- continued
<CAPTION>
Financial Highlights - continued
- -----------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
SIX MONTHS ENDED ------------------------------------------------------------------
APRIL 30, 1999 1998 1997 1996 1995 1994*
(UNAUDITED)
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS C
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per share data (for a share outstanding
throughout each period):
Net asset value - beginning of period $19.97 $19.78 $18.24 $16.53 $16.80 $16.75
------ ------ ------ ------ ------ ------
Income from investment operations# -
Net investment loss $(0.07) $(0.10) $(0.06) $(0.06) $(0.05) $(0.09)
Net realized and unrealized gain on
investments and foreign currency 2.38 1.34 3.44 2.57 1.37 0.14
------ ------ ------ ------ ------ ------
Total from investment operations $ 2.31 $ 1.24 $ 3.38 $ 2.51 $ 1.32 $ 0.05
------ ------ ------ ------ ------ ------
Less distributions declared to
shareholders -
From net investment income $ -- $(0.01) $ -- $ -- $ -- $ --
From net realized gain on investments
and foreign currency transactions (0.99) (1.04) (1.84) (0.80) (1.59) --
------ ------ ------ ------ ------ ------
Total distributions declared to
shareholders $(0.99) $(1.05) $(1.84) $(0.80) $(1.59) $ --
------ ------ ------ ------ ------ ------
Net asset value - end of period $21.29 $19.97 $19.78 $18.24 $16.53 $16.80
====== ====== ====== ====== ====== ======
Total return 11.89%++ 6.64% 19.86% 15.82% 9.20% 0.30%++
Ratios (to average net assets)/
Supplemental data:
Expenses## 2.36%+ 2.35% 2.36% 2.39% 2.49% 2.55%+
Net investment loss (0.70)%+ (0.50)% (0.33)% (0.34)% (0.31)% (0.72)%+
Portfolio turnover 47% 64% 65% 83% 73% 99%
Net assets at end of period (000
omitted) $38,573 $29,123 $16,658 $7,503 $2,908 $1,440
* For the period from the inception of Class C, January 3, 1994, through October 31, 1994.
+ Annualized.
++ Not annualized.
# Per share data are based on average shares outstanding.
## The Fund has an expense offset arrangement which reduces the Fund's custodian fees based upon the amount of cash maintained by
the Fund with its custodian and dividend disbursing agent. For fiscal years ending after September 1, 1995, the Fund's expenses
are calculated without reduction for this expense offset arrangement.
See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS -- continued
<CAPTION>
Financial Highlights - continued
- ----------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
APRIL 30, 1999 OCTOBER 31, OCTOBER 31,
(UNAUDITED) 1998 1997*
- ----------------------------------------------------------------------------------------------------------------------
CLASS I
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $20.42 $20.14 $17.57
------ ------ ------
Income from investment operations# -
Net investment income $ 0.03 $ 0.11 $ 0.13
Net realized and unrealized gain on investments and
foreign currency $ 2.45 $ 1.37 $ 2.44
------ ------ ------
Total from investment operations $ 2.48 $ 1.48 $ 2.57
------ ------ ------
Less distributions declared to shareholders -
From net investment income $ -- $(0.16) $ --
From net realized gain on investments and foreign
currency transactions (0.99) (1.04) --
------ ------ ------
Total distributions declared to shareholders $
$(0.99) $(1.20) --
------ ------ ------
Net asset value - end of period $21.91 $20.42 $20.14
====== ====== ======
Total return 12.43%++ 7.78% 14.63%++
Ratios (to average net assets)/Supplemental data:
Expenses## 1.36%+ 1.35% 1.38%+
Net investment income 0.30%+ 0.51% 0.77%+
Portfolio turnover 47% 64% 65%
Net assets at end of period (000 omitted) $822 $599 $472
* For the period from the inception of Class I, January 2, 1997, through October 31, 1997.
+ Annualized.
++ Not annualized.
# Per share data are based on average shares outstanding.
## The Fund has an expense offset arrangement which reduces the Fund's custodian fees based upon the amount of cash
maintained by the Fund with its custodian and dividend disbursing agent. The Fund's expenses are calculated without
reduction for this expense offset arrangement.
See notes to financial statements
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
(1) Business and Organization
MFS Global Equity Fund (the Fund) is a diversified series of MFS Series Trust
VI (the Trust). The Trust is organized as a Massachusetts business trust and
is registered under the Investment Company Act of 1940, as amended, as an
open-end management investment company.
(2) Significant Accounting Policies
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 reported at market value using last sale
prices. Unlisted equity securities or listed equity securities for which last
sale prices are not available are reported at market value using last quoted bid
prices. Short-term obligations, which mature in 60 days or less, are valued at
amortized cost, which approximates market value. 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.
Security Loans - The Fund may lend its securities to member banks of the Federal
Reserve System and to member firms of the New York Stock Exchange or
subsidiaries thereof. State Street Bank and Trust Company ("State Street"), as
agent, loans the securities to certain brokers (the "Borrowers") approved by the
Fund. The loans are collateralized at all times by cash or U.S. Treasury
securities in an amount at least equal to the market value of the securities
loaned. State Street provides the Fund with indemnification against Borrower
default. The Fund bears the risk of loss with respect to the investment of cash
collateral.
At April 30, 1999, there were no securities on loan. A portion of the income
generated upon investment of the collateral is remitted to the Borrowers, and
the remainder is allocated between the Fund and State Street in its capacity
as lending agent. Income from securities lending is included in interest
income on the Statement of Operations. The dividend and interest income earned
on the securities loaned is accounted for in the same manner as other dividend
and interest income.
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 may 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. The Fund 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 as unrealized until the contract settlement date. On
contract settlement date, the gains or losses are recorded as realized gains
or losses on foreign currency transactions.
Investment Transactions and Income - Investment transactions are recorded on the
trade date. Interest income is recorded on the accrual basis. All discount is
accreted for financial statement and tax reporting purposes as required by
federal income tax regulations. Dividends received in cash are recorded on the
ex-dividend date. Dividends received in additional securities are recorded on
the ex-dividend date in an amount equal to the value of the security on such
date.
Fees Paid Indirectly - The Fund's custody fee is calculated as a percentage of
the Fund's month end net assets. The fee is reduced according to an
arrangement that measures 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.
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 distributions from paid-in
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 net realized gains.
Multiple Classes of Shares of Beneficial Interest - The Fund offers multiple
classes of shares, which differ in their respective distribution and service
fees. All shareholders bear the common expenses of the Fund 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. Class B shares will convert to Class A
shares approximately eight years after purchase.
(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 the following annual rates:
First $1 billion of average net assets 1.00%
Average next assets in excess of $1 billion 0.85%
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 officers and
Trustees of the Fund are officers or directors of MFS, MFS Fund Distributors,
Inc. (MFD), and MFS Service Center, Inc. (MFSC). The Fund has an unfunded
defined benefit plan for all of its independent Trustees and Mr. Bailey.
Included in Trustees' compensation is a net periodic pension expense of $5,951
for the six months ended April 30, 1999.
Administrator - The Fund has an administrative services agreement with MFS to
provide the Fund with certain financial, legal, shareholder servicing,
compliance, and other administrative services. As a partial reimbursement for
the cost of providing these services, the Fund pays MFS an administrative fee
at the following annual percentages of the Fund's average daily net assets:
First $1 billion 0.0150%
Next $1 billion 0.0125%
Next $1 billion 0.0100%
In excess of $3 billion 0.0000%
Distributor - MFD, a wholly owned subsidiary of MFS, as distributor, received
$96,063 for the six months ended April 30, 1999, 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 paid 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 and 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. MFD retains the service fee for accounts not attributable to a
securities dealer, which amounted to $24,410 for the six months ended April 30,
1999. Payment of the 0.10% per annum Class A distribution fee will commence on
such date as the Trustees of the Fund may determine. Fees incurred under the
distribution plan during the six months ended April 30, 1999, were 0.25% 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 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 $14,742 and $6 for
Class B and Class C shares, respectively, for the six months ended April 30,
1999. Fees incurred under the distribution plan during the six months ended
April 30, 1999, were 1.00% of average daily net assets attributable to both
Class B and Class C shares on an annualized basis.
Certain Class A and Class C shares are subject to a contingent deferred sales
charge in the event of a shareholder redemption within 12 months following
purchase. A contingent deferred sales charge is imposed on shareholder
redemptions of Class B shares in the event of a shareholder redemption within
six years of purchase. MFD receives all contingent deferred sales charges.
Contingent deferred sales charges imposed during the six months ended April
30, 1999, were $12,622, $213,037, and $5,630 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 0.10%. Prior to April 1, 1999, the fee was calculated as a percentage
of the Fund's average daily net assets at an effective annual rate of 0.1125%.
(4) Portfolio Securities
Purchases and sales of investments, other than purchased option transactions
and short-term obligations, were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. government securities $ -- $ 9,030,007
------------ ------------
Investments (non-U.S. government securities) $339,639,105 $271,967,597
------------ ------------
</TABLE>
The cost and unrealized appreciation and depreciation in the value of the
investments owned by the Fund, as computed on a federal income tax basis, are
as follows:
<TABLE>
<CAPTION>
<S> <C>
Aggregate cost $580,938,334
------------
Gross unrealized appreciation $108,630,548
Gross unrealized depreciation (17,050,678)
------------
Net unrealized appreciation $ 91,579,870
============
</TABLE>
(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. Transactions in
Fund shares were as follows:
<TABLE>
Class A Shares
<CAPTION>
SIX MONTHS ENDED APRIL 30, 1999 YEAR ENDED OCTOBER 31, 1998
------------------------------- --------------------------------
SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 39,769,044 $ 852,370,207 63,270,572 $ 1,328,540,567
Shares issued to shareholders
in reinvestment of
distributions 618,989 12,849,210 475,953 9,014,410
Shares reacquired (38,565,721) (828,641,680) (58,297,803) (1,233,152,862)
----------- ------------- ----------- ---------------
Net increase 1,822,312 $ 36,577,737 5,448,722 $ 104,402,115
=========== ============= =========== ===============
</TABLE>
<TABLE>
Class B Shares
<CAPTION>
SIX MONTHS ENDED APRIL 30, 1999 YEAR ENDED OCTOBER 31, 1998
------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 2,858,137 $ 61,063,282 7,217,662 $ 150,165,756
Shares issued to shareholders
in reinvestment of
distributions 584,786 12,011,487 642,497 12,163,413
Shares reacquired (3,031,661) (64,642,370) (7,289,367) (151,361,853)
----------- ------------- ----------- ---------------
Net increase 411,262 $ 8,432,399 570,792 $ 10,967,316
=========== ============= =========== ===============
</TABLE>
<TABLE>
Class C Shares
<CAPTION>
SIX MONTHS ENDED APRIL 30, 1999 YEAR ENDED OCTOBER 31, 1998
------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 1,940,860 $ 40,665,362 1,968,268 $ 40,771,694
Shares issued to shareholders
in reinvestment of
distributions 63,158 1,280,843 39,122 731,968
Shares reacquired (1,650,928) (34,824,200) (1,391,012) (28,864,563)
----------- ------------- ----------- ---------------
Net increase 353,090 $ 7,122,005 616,378 $ 12,639,099
=========== ============= =========== ===============
</TABLE>
<TABLE>
Class I Shares
<CAPTION>
SIX MONTHS ENDED APRIL 30, 1999 YEAR ENDED OCTOBER 31, 1998
------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 7,040 $ 151,635 6,519 $ 132,173
Shares issued to shareholders
in reinvestment of
distributions 1,469 30,528 1,410 26,719
Shares reacquired (380) (8,208) (1,996) (41,134)
----------- ------------- ----------- ---------------
Net increase 8,129 $ 173,955 5,933 $ 117,758
=========== ============= =========== ===============
</TABLE>
(6) Line of Credit
The Fund and other affiliated funds participate in a $720 million unsecured line
of credit provided by a syndication of banks under a line of credit agreement.
Borrowings may be made to temporarily finance the repurchase of Fund shares.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the bank's base rate. In addition, a commitment fee, based on the average daily
unused portion of the line of credit, is allocated among the participating funds
at the end of each quarter. The commitment fee allocated to the Fund for the six
months ended April 30, 1999, was $1,965. The Fund had no significant borrowings
during the period.
(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 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.
<PAGE>
<TABLE>
MFS(R) Global Equity Fund
<S> <C>
TRUSTEES SECRETARY
Stephen E. Cavan*
Richard B. Bailey* - Private Investor;
Former Chairman and Director (until 1991), ASSISTANT SECRETARY
MFS Investment Management James R. Bordewick, Jr.*
Marshall N. Cohan - Private Investor CUSTODIAN
State Street Bank and Trust Company
Lawrence H. Cohn, M.D. - Chief of Cardiac
Surgery, Brigham and Women's Hospital; Professor INVESTOR INFORMATION
of Surgery, Harvard Medical School For MFS stock and bond market outlooks,
call toll free: 1-800-637-4458 anytime from
The Hon. Sir J. David Gibbons, KBE - Chief a touch-tone telephone.
Executive Officer, Edmund Gibbons Ltd.;
Chairman, Colonial Insurance Company, Ltd. For information on MFS mutual funds, call your
financial adviser or, for an information kit,
Abby M. O'Neill - Private Investor call toll free: 1-800-637-2929 any business day
from 9 a.m. to 5 p.m. Eastern time (or leave a
Walter E. Robb, III - President and Treasurer, message anytime).
Benchmark Advisors, Inc. (corporate financial
consultants); President, Benchmark Consulting INVESTOR SERVICE
Group, Inc. (office services) MFS Service Center, Inc.
P.O. Box 2281
Arnold D. Scott* - Senior Executive Boston, MA 02107-9906
Vice President, Director, and Secretary,
MFS Investment Management For general information, call toll free:
1-800-225-2606 any business day from
Jeffrey L. Shames* - Chairman, Chief 8 a.m. to 8 p.m. Eastern time.
Executive Officer, and Director,
MFS Investment Management For service to speech- or hearing-impaired, call
toll free: 1-800-637-6576 any business day from
J. Dale Sherratt - President, Insight Resources, 9 a.m. to 5 p.m. Eastern time. (To use this
Inc. (acquisition planning specialists) Ward service, your phone must be equipped with a
Smith - Former Chairman (until 1994), NACCO Telecommunications Device for the Deaf.) For
Industries (holding company) share prices, account balances, and exchanges,
call toll free: 1-800-MFS-TALK (1-800-637-8255)
INVESTMENT ADVISER anytime from a touch-tone telephone.
Massachusetts Financial Services Company
500 Boylston Street WORLD WIDE WEB
Boston, MA 02116-3741 www.mfs.com
DISTRIBUTOR
MFS Fund Distributors, Inc.
500 Boylston Street
Boston, MA 02116-3741
PORTFOLIO MANAGER
David R. Mannheim*
TREASURER
W. Thomas London*
ASSISTANT TREASURERS
Mark E. Bradley*
Ellen Moynihan*
James O. Yost*
*Affiliated with the Investment Adviser
</TABLE>
<PAGE>
MFS(R) GLOBAL EQUITY FUND ------------
BULK RATE
U.S. POSTAGE
[logo] M F S(R) PAID
INVESTMENT MANAGEMENT MFS
WE INVENTED THE MUTUAL FUND(R) ------------
500 Boylston Street
Boston, MA 02116-3741
(c)1999 MFS Fund Distributors, Inc., 500 Boylston Street, Boston, MA 02116-3741
MWE-3 6/99 88M 04/204/304/804
