<PAGE>
[Logo] M F S (R)
INVESTMENT MANAGEMENT
We invented the mutual fund(R)
[Graphic Omitted]
MFS(R) GLOBAL
EQUITY FUND
ANNUAL REPORT o OCTOBER 31, 1999
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MUTUAL FUND GIFT KITS (see page 35)
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<PAGE>
TABLE OF CONTENTS
Letter from the Chairman .................................................. 1
Management Review and Outlook ............................................. 3
Performance Summary ....................................................... 8
Portfolio of Investments .................................................. 12
Financial Statements ...................................................... 17
Notes to Financial Statements ............................................. 25
Independent Auditors' Report .............................................. 32
MFS' Year 2000 Readiness Disclosure ....................................... 34
Trustees and Officers ..................................................... 37
MFS ORIGINAL RESEARCH(R)
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
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NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
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<PAGE>
LETTER FROM THE CHAIRMAN
[Photo of Jeffrey L. Shames]
Jeffrey L. Shames
Dear Shareholders,
The current investment and economic environment bears little resemblance to last
year's. One year ago, global economies were floundering, and the crisis in Asia
threatened an already weak U.S. economy. Corporate earnings were flat, and
economists used the word "deflation" for the first time in recent memory.
Entering 1999, expectations for corporate earnings growth were lowered
dramatically. In an attempt to foster U.S. growth, the Federal Reserve Board
(the Fed) lowered interest rates.
As a result, this year the U.S. economy is booming and unemployment is low. Many
corporations are focused on improving their profitability, and investors have
been rewarded with positive surprises across a variety of industries. Our
analysts predict that corporate earnings growth for 1999 will average 12% - 15%.
Global economies also are showing signs of strength, and the Asian crisis has
passed. In fact, Japan's economic woes seem to have reached bottom. Although the
process is in its infancy, some Japanese corporations not only are talking about
restructuring and cost cutting, they also are beginning to take action, looking
within to become more competitive and improve returns on equity. While still
lagging the United States, Europe is beginning to restructure and consolidate.
These signs of international growth have contributed to concerns that the U.S.
economy now may be too strong. In June, and again in August, the Fed raised
rates by one-quarter of a percentage point to help ward off the specter of
inflation.
After an unprecedented four years of 20% annual returns in the U.S. equity
market, we fear that many investors have become accustomed to high returns and
have lost sight of the risks they take on to achieve them. In the current market
many investors are taking on additional risk - whether through day trading or
investing in speculative Internet stocks.
Risks are as much a part of the market today as they were one year ago. We
believe the market remains overvalued, with stocks priced 30% above our
analysts' earnings projections. And market narrowness has not abated; the top 25
stocks in the Standard & Poor's 500 Composite Index, a popular, unmanaged index
of common stock total return performance, are still the most overvalued. Such
extreme overvaluation makes the stock market sensitive to interest-rate news and
any negative earnings surprises. The Year 2000 (Y2K) computer problem is another
factor causing investor concern. While we believe corporate America is well
prepared to address any Y2K situations that may arise at year-end, no one can
predict investor behavior. In our opinion, it is investor behavior that has the
greatest potential to create market volatility.
We believe the best way to address Y2K and other market risks is through our
continuing commitment to MFS Original Research(R) and our fundamental investment
tenet of long-term investing. Whether markets are up or down, MFS analysts focus
on analyzing industries and visiting companies to determine the long-term
winners and the prices that will make them attractive opportunities. Because all
companies will not benefit equally from the improving international environment,
bottom-up research remains critical to identifying those that we believe are
successfully restructuring, consolidating, and gaining market share.
Changes in market and economic conditions can't be predicted but should always
be expected. The changes we have seen over the past year only reinforce our
commitment to long-term planning and investing. We believe volatility helps to
create opportunity for long-term investors to buy solid companies at attractive
prices. For this reason, we are continuing to expand our domestic and
international capabilities to ensure that MFS has primary, in-house research on
companies worldwide. We believe that we have built the right investment team,
backed by MFS Original Research, to take advantage of those opportunities for
our shareholders.
We appreciate 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)
November 15, 1999
<PAGE>
MANAGEMENT REVIEW AND OUTLOOK
[Photo of David R. Mannheim]
David R. Mannheim
For the 12 months ended October 31, 1999, Class A shares of the Fund provided a
total return of 15.82%, Class B shares 14.90%, Class C shares 14.88%, Class I
shares 16.02%, and Class J shares 15.27%. These returns assume the reinvestment
of any distributions but exclude the effects of any sales charges.
For the same period, the Morgan Stanley Capital International (MSCI) World
Index, a broad, unmanaged index of global equities, returned 25.24% and the
average global fund tracked by Lipper Analytical Services, Inc., an independent
firm that reports mutual fund performance, returned 28.13%.
Q. WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR?
A. The Fund continued to benefit from the strong performance of global equity
markets, and fared well over the last half of the fiscal year relative to
the index and its competitors. However, its overall 12-month performance was
hampered by several factors, all of which exerted their influence in the
first half of the fiscal year. They included the strength of the U.S.
dollar, which ate into the Fund's gains in overseas stocks when translated
back into dollars and magnified any declines in our overseas positions.
Global market trends also went against the Fund in the first half of the
fiscal year, while large-company growth stocks provided the strongest
performance. Although the Fund has a bias toward large-cap stocks, we were
not invested in the narrow grouping of mega-cap stocks that provided the
highest returns over the period because we were concerned about their high
valuations. In the first six months, the market gravitated away from growth
stocks and toward cyclical stocks poised to benefit from the global economic
rebound.
The good news is that the Fund's relative performance improved in the second
half of the fiscal year. The currency situation stabilized among the dollar,
the yen, and the euro. That has been a positive relative factor because the
Fund has had fewer dollar-based investments than the MSCI World Index. In
addition, the stock markets worldwide have broadened over the past six
months to include small- and mid-capitalization issues.
Q. WHERE HAVE YOU FOUND INVESTMENT OPPORTUNITIES OVER THE PAST SIX MONTHS?
A. We increased our position in the utilities and telecommunications area to
17.4% of the Fund at the end of the period, and that helped quite a bit. Our
investments in this area were focused on wireless communications companies.
Subscriber growth was higher than expected, bolstered by improvements in
wireless data transmission as well as voice communications. The Fund's
allocation to these stocks included Mannesmann in Germany and NTT Mobile
Communications Network in Japan, the Fund's largest holding. I'd also
highlight the computer software area. During the first half of the fiscal
year, stock prices of our U.S. holdings in this area declined due to
uncertainty over the impact of possible Year 2000 (Y2K) computer problems.
However, we used that as an opportunity to buy more of these stocks, and our
patience with companies such as BMC Software, Computer Associates, and
Compuware paid off. Investors became more optimistic as the companies met
their earnings targets, and the stocks enjoyed significant share price
gains.
Q. WERE THERE PARTICULAR SECTORS THAT STRUGGLED?
A. Financial services stocks generally continued to lag due to concerns about
interest rates and questions about what would happen to asset quality in
developed nations if their economies were to slow. Fortunately, the Fund has
invested less in the financial services industry than the index has,
especially in the banking industry. On the other hand, we had more invested
in U.S. insurance companies, including Hartford Financial and ReliaStar
Financial. These positions paid off late in the period, with the passage of
legislation razing barriers that had prohibited banks, insurance companies,
and other financial services firms from engaging in each others' businesses.
Even with the worst news behind us, we have been able to find opportunities
in Asia such as Singapore banks. Examples include Development Bank of
Singapore (DBS) and Overseas Union Bank. These stocks were selling at
attractive valuations at a time when they looked poised to benefit from
improvements in their asset quality.
Q. TECHNOLOGY STOCKS MAKE UP THE LARGEST SECTOR IN THE FUND. WHAT CAN YOU
TELL US ABOUT THOSE INVESTMENTS?
A. I'd highlight the Fund's stake in the computer software companies previously
mentioned as well as some of the large Japanese companies in the portfolio,
including Hitachi, Toshiba, and Fujitsu. These are restructuring stories.
For some time, well-established Japanese firms such as Toshiba and Fujitsu
have been undermanaged and involved in too many businesses that didn't
produce results. Now, they have been showing a drive toward divesting or
restructuring unprofitable businesses and focusing on their strengths. By
doing so, we believe the companies should dramatically enhance their growth
rates. Their stocks have done very well in response.
Q. THE FUND'S WEIGHTINGS IN JAPAN INCREASED OVER THE PAST SIX MONTHS, FROM
8.8% TO 13%. WAS THAT MARKET PARTICULARLY ATTRACTIVE?
A. It's important for shareholders to remember that we choose investments for
the Fund one by one, focusing on the prospects of individual companies. It
sometimes turns out that a number of attractive investments emerge in a
particular sector, given the trends within that sector. But country or
regional weightings are strictly a byproduct of our bottom-up, company-by-
company research.
That being said, our underweighting in Japan hurt our performance slightly
in the first half of the period when that stock market rebounded. However,
we did hold some Japanese stocks that performed very well, such as NTT
Mobile Communications Network. Over the past six months, the Fund's
investments in Japan slowly increased as we found more companies that fit
into the restructuring theme demonstrated by Toshiba. In addition, we've
gained a modicum of confidence that Japan is nearing a trough and could
start to see some economic improvement going forward.
Looking at other regions, at around 34% of net assets, the Fund was
underweight in the United States relative to the index, which carried about
50% in U.S. stocks. Again, this allocation, as well as our overweighting in
Continental Europe, was strictly a byproduct of stock picking, rather than a
call on the markets. The Fund has been overweighted in Europe for some time.
On a price-to-earnings basis, European stocks historically have offered
similar growth rates to their U.S. counterparts, but have traded at 10% to
15% discounts to U.S. stocks. That's why we feel those markets may offer
more opportunities.
Q. WHAT IS YOUR OUTLOOK?
A. Looking at the portfolio, we are optimistic because we believe we have paid
below-average prices for above-average earnings growth. That is, our
expected growth rate for the average company in the Fund is higher than the
average growth rate found in the market.
Overall, we believe 1999 will be another good year for global markets. Part
of this year's advance was driven by better-than-expected earnings growth
in the United States. As such, we are uncertain how much higher U.S. stock
valuations can go. Nevertheless, we remain optimistic regarding corporate
earnings growth, particularly in Europe. There, company managements are
focused on restructuring and improving returns on capital, strategies that
have been pursued successfully by corporate America for some time.
We also may be approaching a point at which we consider investing in
emerging markets again. We've de-emphasized this area over the recent past,
with the Fund presently holding only minor positions in Greece and Mexico.
However, we could become more attracted to individual companies in emerging
markets if we are comfortable with the stability of the individual country
market.
/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.
<PAGE>
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PORTFOLIO MANAGER'S PROFILE
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DAVID R. MANNHEIM IS SENIOR VICE PRESIDENT OF MFS INVESTMENT MANAGEMENT(R)
AND DIRECTOR OF INTERNATIONAL PORTFOLIO MANAGEMENT. HE IS 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, SENIOR VICE PRESIDENT IN 1997, AND DIRECTOR OF INTERNATIONAL PORTFOLIO
MANAGEMENT IN 1999. 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 ORIGINAL
RESEARCH(R), 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 consultant, or by calling MFS at
1-800-225-2606. Please read it carefully before investing or sending money.
<PAGE>
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FUND FACTS
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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
CLASS J JULY 7, 1999
SIZE: $721.0 MILLION NET ASSETS AS OF OCTOBER 31, 1999
PERFORMANCE SUMMARY
The following information illustrates the historical performance of the Fund's
original share class in comparison to various market indicators. Performance
results include any applicable contingent deferred sales charges and reflect the
percentage change in net asset value, including reinvestment of dividends.
Benchmark comparisons are unmanaged and do not reflect any fees or expenses. The
performance of other share classes will be greater than or less than the line
shown. (See Notes to Performance Summary.) It is not possible to invest directly
in an index.
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(For the 10-year period ended October 31, 1999)
MFS Global Equity
Fund - Class B MSCI World Index
------------------ ----------------
10/89 $10,000 $10,000
10/91 10,832 10,399
10/93 14,098 12,666
10/95 16,286 15,076
10/97 22,571 20,636
10/99 27,687 29,898
AVERAGE ANNUAL AND CUMULATIVE TOTAL RATES OF RETURN
THROUGH OCTOBER 31, 1999
<TABLE>
<CAPTION>
CLASS A
1 Year 3 Years 5 Years 10 Years
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cumulative Total Return Excluding Sales Charge +15.82% +50.36% +93.32% +192.25%
- ---------------------------------------------------------------------------------------------------------
Average Annual Total Return Excluding Sales Charge +15.82% +14.56% +14.09% + 11.32%
- ---------------------------------------------------------------------------------------------------------
Average Annual Total Return Including Sales Charge + 9.16% +12.32% +12.75% + 10.66%
- ---------------------------------------------------------------------------------------------------------
<CAPTION>
CLASS B
1 Year 3 Years 5 Years 10 Years
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cumulative Total Return Excluding Sales Charge +14.90% +46.87% +85.43% +176.87%
- ---------------------------------------------------------------------------------------------------------
Average Annual Total Return Excluding Sales Charge +14.90% +13.67% +13.15% + 10.72%
- ---------------------------------------------------------------------------------------------------------
Average Annual Total Return Including Sales Charge +10.90% +12.89% +12.90% + 10.72%
- ---------------------------------------------------------------------------------------------------------
<CAPTION>
CLASS C
1 Year 3 Years 5 Years 10 Years
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cumulative Total Return Excluding Sales Charge +14.88% +46.85% +85.73% +177.49%
- ---------------------------------------------------------------------------------------------------------
Average Annual Total Return Excluding Sales Charge +14.88% +13.66% +13.18% + 10.74%
- ---------------------------------------------------------------------------------------------------------
Average Annual Total Return Including Sales Charge +13.88% +13.66% +13.18% + 10.74%
- ---------------------------------------------------------------------------------------------------------
<CAPTION>
CLASS I
1 Year 3 Years 5 Years 10 Years
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cumulative Total Return Excluding Sales Charge +16.02% +51.18% +90.86% +184.98%
- ---------------------------------------------------------------------------------------------------------
Average Annual Total Return Excluding Sales Charge +16.02% +14.77% +13.80% + 11.04%
- ---------------------------------------------------------------------------------------------------------
<CAPTION>
CLASS J
1 Year 3 Years 5 Years 10 Years
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cumulative Total Return Excluding Sales Charge +15.27% +47.34% +86.02% +177.75%
- ---------------------------------------------------------------------------------------------------------
Average Annual Total Return Excluding Sales Charge +15.27% +13.79% +13.22% + 10.76%
- ---------------------------------------------------------------------------------------------------------
Average Annual Total Return Including Sales Charge +11.81% +12.64% +12.53% + 10.42%
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<CAPTION>
COMPARATIVE INDICES
1 Year 3 Years 5 Years 10 Years
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Average global fund* +28.13% +15.73% +14.06% + 10.89%
- ---------------------------------------------------------------------------------------------------------
MSCI World Index+ +25.24% +19.29% +16.89% + 11.57%
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* Source: Lipper Analytical Services, Inc.
+ Source: Standard & Poor's Micropal, Inc.
</TABLE>
NOTES TO PERFORMANCE SUMMARY
Class A Share Performance Including Sales Charge takes into account the
deduction of the maximum 5.75% sales charge. Class B Share Performance Including
Sales Charge takes into account the deduction of the applicable contingent
deferred sales charge (CDSC), which declines over six years from 4% to 0%. Class
C Share Performance Including Sales Charge takes into account the deduction of
the 1% CDSC applicable to Class C shares redeemed within 12 months. Class I
shares have no sales charge and are only available to certain institutional
investors. Class J Share Performance Including Sales Charge takes into account
the deduction of the maximum 3% sales charge. Class J shares are only available
to Japanese investors.
Class A, C, I, and J share performance include the performance of the Fund's
Class B shares for periods prior to their inception (blended performance). Class
A and J blended performance has been adjusted to take into account the initial
sales charge applicable to Class A and J shares rather than the CDSC applicable
to Class B shares. Class C blended performance has been adjusted to take into
account the lower CDSC applicable to Class C shares. Class I blended performance
has been adjusted to account for the fact that Class I shares have no sales
charge. These blended performance figures have not been adjusted to take into
account differences in class-specific operating expenses. Because operating
expenses for Class A, I, and J shares are lower than those of Class B shares,
the blended Class A, I, and J share performance is lower than it would have been
had Class A, I, and J shares been offered for the entire period. Because
operating expenses of Class B and C shares are approximately the same, the
blended Class C performance is approximately the same as it would have been had
Class C shares been offered for the entire period.
All 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 prospectus for
details.
PORTFOLIO CONCENTRATION AS OF OCTOBER 31, 1999
FIVE LARGEST STOCK SECTORS
TECHNOLOGY 18.6%
UTILITIES & COMMUNICAITONS 17.4%
FINANCIAL SERVICES 16.1%
RETAILING 7.4%
LEISURE 7.3%
TOP 10 STOCK HOLDINGS
<TABLE>
<S> <C>
NTT MOBILE COMMUNICATIONS NETWORK, INC. 4.1% GALILEO INTERNATIONAL, INC. 2.0%
Japanese mobile phone company U.S. Electronic global distribution services
provider
CABLE & WIRELESS COMMUNICATIONS PLC 2.5%
U.K. cable company TOTAL FINA S.A. 2.0%
French Integrated oil company
COMPUTER ASSOCIATES INTERNATIONAL, INC. 2.5%
U.S. Computer software company ASTRAZENECA GROUP PLC 1.9%
U.K. Pharmaceuticals manufacturer
MANNESMANN AG 2.3%
German industrial and telecommunications company SAAB AB 1.9%
Swedish aircraft manufacturer
RELIASTAR FINANCIAL CORP. 2.3%
U.S. Life and health insurance company UBS AG 1.9%
Swiss bank
</TABLE>
<PAGE>
PORTFOLIO OF INVESTMENTS -- October 31, 1999
Stocks - 93.9%
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ISSUER SHARES VALUE
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Foreign Stocks - 59.4%
Australia - 1.4%
QBE Insurance Group Ltd. (Insurance) 2,493,879 $ 10,408,603
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Canada - 2.0%
BCE, Inc. (Telecommunications)* 99,700 $ 6,003,412
Canadian National Railway Co. (Railroads) 265,000 8,082,500
------------
$ 14,085,912
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Finland - 1.7%
Helsingin Puhelin Oyj (Telecommunications) 168,475 $ 7,998,391
HPY Holding - HTF Holding Oyj Abp
(Telecommunications)* 110,850 2,331,176
Perlos Oyj Corp. (Electronics)* 69,760 1,144,302
Pohjola Group Insurance Corp. (Insurance) 13,720 735,756
------------
$ 12,209,625
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France - 8.9%
Bouygues S.A. (Construction)* 13,950 $ 4,855,251
Castorama Dubois Investisse (Stores) 28,329 8,483,609
Pernod Ricard Co. (Beverages) 116,700 7,877,988
Rhone-Poulenc S.A. (Pharmaceuticals) 114,500 6,405,110
Sanofi - Synthelabo S.A. (Medical
and Health Products)* 131,527 5,801,714
Television Francaise (Entertainment) 23,400 7,332,323
Total Fina S.A., "B" (Oils) 99,800 13,484,756
Union des Assurances Federales S.A.
(Insurance) 49,690 6,395,284
Wavecom S.A., ADR (Electronics)* 168,320 3,282,240
------------
$ 63,918,275
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Germany - 3.4%
GfK AG (Business Services)* 4,875 $ 137,635
Henkel KGaA, Preferred (Chemicals) 77,800 5,276,534
Mannesmann AG (Conglomerate) 97,120 15,267,197
Wella AG, Preferred (Consumer Goods
and Services) 149,890 4,176,649
------------
$ 24,858,015
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Greece - 1.1%
Antenna TV S.A., ADR (Broadcasting)* 268,300 $ 2,414,700
Hellenic Telecommunication Organization
S.A., GDR (Telecommunications) 257,243 5,453,365
------------
$ 7,868,065
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Ireland - 1.1%
Anglo Irish Bank Corp. PLC (Banks and
Credit Cos.) 3,504,839 $ 8,161,111
Trintech Group PLC, ADR (Computer
Software - Products)* 2,150 37,894
------------
$ 8,199,005
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Italy - 1.4%
Banca Carige S.p.A. (Banks and
Credit Cos.) 155,430 $ 1,366,314
Telecom Italia Mobile S.p.A.,
Saving Shares (Telecommunications)* 2,496,100 8,661,345
------------
$ 10,027,659
- ----------------------------------------------------------------------------
Japan - 13.0%
Canon, Inc. (Special Products and
Services) 321,000 $ 9,086,068
Chugai Pharmaceutical Co. Ltd
(Pharmaceuticals) 855,000 10,172,711
Chukyo Coca-Cola Bottling Co. Ltd.
(Food and Beverage Products) 177,000 2,104,231
Coca-Cola West Japan Co. Ltd. (Food and
Beverage Products) 33,472 1,490,214
Don Quijote Co., Ltd. (Retail) 10,400 2,594,512
Fuji Heavy Industries Ltd. (Automotive) 699,000 5,942,372
Fujitsu Ltd. (Computer Hardware - Systems) 88,000 2,651,315
Hitachi Ltd. (Electronics) 1,053,000 11,386,787
Mikuni Coca-Cola Bottling Co. Ltd.
(Food and Beverage Products) 269,000 5,678,373
Mitsubishi Motor (Automotive) 753,000 3,908,779
NTT Mobile Communications Network, Inc.
(Telecommunications) 1,035 27,508,635
Olympus Optical Co. (Conglomerate) 62,000 838,803
Sony Corp. (Electronics) 24,000 3,744,387
Takeda Chemical Industries Co.
(Pharmaceuticals) 32,000 1,839,186
Toshiba Corp. (Electronics) 736,000 4,632,662
------------
$ 93,579,035
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Mexico - 0.1%
Coca-Cola Femsa S.A., ADR (Beverages) 60,700 $ 842,212
- ----------------------------------------------------------------------------
Netherlands - 4.7%
Akzo Nobel N.V. (Chemicals) 170,400 $ 7,335,452
ING Groep N.V. (Financial Services) 178,071 10,500,516
Libertel N.V. (Cellular Telephones)* 115,780 2,191,369
STMicroelectronics Co. (Electronics) 87,100 7,647,404
Wolters Kluwer N.V. (Publishing) 187,100 6,250,294
------------
$ 33,925,035
- ----------------------------------------------------------------------------
Norway - 1.5%
Sparebanken NOR (Banks and Credit Cos.) 285,400 $ 6,256,538
Storebrand ASA (Insurance) 702,745 4,881,418
------------
$ 11,137,956
- ----------------------------------------------------------------------------
Portugal - 1.7%
Banco Pinto & Sotto Mayor S.A. (Banks
and Credit Cos.) 421,044 $ 8,766,013
Telecel - Comunicacoes Pessoais S.A.
(Telecommunications) 26,600 3,451,487
------------
$ 12,217,500
- ----------------------------------------------------------------------------
Singapore - 1.1%
Chartered Semiconductor Manufacturing
Co., ADR (Electronics)* 36,125 $ 1,198,898
DBS Group Holdings Ltd.
(Financial Services) 300,459 3,397,059
Overseas Union Bank Ltd. (Banks and
Credit Cos.) 774,332 3,352,893
------------
$ 7,948,850
- ----------------------------------------------------------------------------
Spain - 0.8%
Repsol S.A. (Oils) 265,500 $ 5,471,798
- ----------------------------------------------------------------------------
Sweden - 1.9%
A-Com AB (Communications)* 48,700 v 562,903
Saab AB, "B" (Aerospace) 1,643,859 12,800,459
------------
$ 13,363,362
- ----------------------------------------------------------------------------
Switzerland - 2.6%
Nestle S.A. (Food and Beverage Products) 3,125 $ 6,029,335
UBS AG (Banks and Credit Cos.) 44,100 12,835,247
------------
$ 18,864,582
- ----------------------------------------------------------------------------
United Kingdom - 11.0%
AstraZeneca Group PLC (Medical and
Health Products) 284,724 $ 12,869,566
BP Amoco PLC (Oils) 888,492 8,625,796
British Aerospace PLC (Aerospace) 1,053,062 6,227,513
British Telecommunications PLC
(Telecommunications) 625,104 11,336,514
Cable & Wireless Communications PLC
(Telecommunications)* 1,618,022 16,957,556
Capital Radio PLC (Broadcasting) 123,400 2,025,064
Next PLC (Stores) 604,900 6,523,437
Orange PLC (Telecommunications) 238,800 5,931,223
Telewest Communications PLC
(Communications)* 104,918 94,792
TeleWest Communications PLC
(Entertainment)* 1,154,100 4,877,048
Tomkins PLC (Conglomerate) 1,157,000 3,914,103
------------
$ 79,382,612
- ----------------------------------------------------------------------------
Total Foreign Stocks $428,308,101
- ----------------------------------------------------------------------------
U.S. Stocks - 34.5%
Aerospace - 0.3%
TRW, Inc. 59,400 $ 2,546,775
- ----------------------------------------------------------------------------
Automotive - 0.9%
Delphi Automotive Systems Corp. 403,000 $ 6,624,313
- ----------------------------------------------------------------------------
Broadcasting
Spanish Broadcasting Systems, Inc.* 3,050 $ 81,206
- ----------------------------------------------------------------------------
Business Machines - 2.1%
Hewlett-Packard Co. 68,300 $ 5,058,469
International Business Machines Corp. 56,500 5,558,187
Sun Microsystems, Inc.* 42,900 4,539,356
------------
$ 15,156,012
- ----------------------------------------------------------------------------
Business Services - 0.7%
H & R Block, Inc. 114,000 $ 4,852,125
- ----------------------------------------------------------------------------
Computer Software - Systems - 6.8%
BMC Software, Inc.* 194,875 $ 12,508,539
Computer Associates International, Inc. 302,000 17,063,000
Compuware Corp.* 249,200 6,930,875
SunGard Data Systems, Inc.* 280,974 6,866,302
Synopsys, Inc.* 86,400 5,383,800
------------
$ 48,752,516
- ----------------------------------------------------------------------------
Conglomerates - 0.9%
Sodexho Marriott Services, Inc. 345,000 $ 6,490,313
- ----------------------------------------------------------------------------
Consumer Goods and Services - 1.9%
Galileo International, Inc. 445,130 $ 13,381,721
- ----------------------------------------------------------------------------
Entertainment - 3.0%
Disney (Walt) Co. 262,300 $ 6,918,163
Hearst-Argyle Television, Inc.* 216,100 4,389,531
Time Warner, Inc. 145,000 10,104,687
------------
$ 21,412,381
- ----------------------------------------------------------------------------
Food and Beverage Products - 0.9%
Keebler Foods Co.* 215,400 $ 6,879,338
- ----------------------------------------------------------------------------
Insurance - 4.5%
CIGNA Corp. 87,000 $ 6,503,250
Hartford Financial Services Group, Inc. 199,100 10,315,869
ReliaStar Financial Corp. 359,100 15,418,856
------------
$ 32,237,975
- ----------------------------------------------------------------------------
Internet
Akamai Technologies, Inc.* 1,300 $ 188,744
- ----------------------------------------------------------------------------
Machinery - 1.2%
Deere & Co., Inc. 236,800 $ 8,584,000
- ----------------------------------------------------------------------------
Medical and Health Products - 1.1%
Bausch & Lomb, Inc. 146,800 $ 7,927,200
- ----------------------------------------------------------------------------
Oils - 0.8%
Conoco, Inc., "A" 202,400 $ 5,553,350
- ----------------------------------------------------------------------------
Photographic Products - 0.6%
Polaroid Corp. 191,100 $ 4,263,919
- ----------------------------------------------------------------------------
Stores - 2.6%
AutoZone, Inc.* 161,200 $ 4,281,875
Costco Wholesale Corp.* 37,400 3,003,688
CVS Corp. 163,500 7,102,031
Federated Department Stores, Inc.* 106,000 4,524,875
------------
$ 18,912,469
- ----------------------------------------------------------------------------
Supermarkets - 1.9%
Kroger Co.* 322,900 $ 6,720,356
Safeway, Inc.* 198,900 7,023,656
------------
$ 13,744,012
- ----------------------------------------------------------------------------
Telecommunications - 4.3%
Amdocs Ltd.* 26,300 $ 731,469
Bell Atlantic Corp. 23,300 1,513,044
Cincinnati Bell, Inc. 236,100 4,913,831
Global TeleSystems Group, Inc.* 21,600 517,050
GTE Corp. 93,600 7,020,000
MCI WorldCom, Inc.* 58,000 4,977,125
Motorola, Inc. 88,900 8,662,193
Partner Communications Co. Ltd.* 178,200 2,806,650
------------
$ 31,141,362
- ----------------------------------------------------------------------------
Total U.S. Stocks $248,729,731
- ----------------------------------------------------------------------------
Total Stocks (Identified Cost, $589,700,413) $677,037,832
- ----------------------------------------------------------------------------
Short-Term Obligations - 6.3%
- ----------------------------------------------------------------------------
PRINCIPAL AMOUNT
(000 OMITTED)
- ----------------------------------------------------------------------------
Federal Home Loan Bank Corp., due 11/01/99 $ 19,600 $ 19,600,000
Federal Home Loan Mortgage Corp.,
due 11/05/99 - 11/08/99 25,600 25,580,925
- ----------------------------------------------------------------------------
Total Short-Term Obligations, at Amortized Cost $ 45,180,925
- ----------------------------------------------------------------------------
Total Investments (Identified Cost, $634,881,338) $722,218,757
Other Assets, Less Liabilities - (0.2)% (1,206,720)
- -----------------------------------------------------------------------------
Net Assets - 100.0% $721,012,037
- -----------------------------------------------------------------------------
* Non-income producing security.
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
- ---------------------------------------------------------------------------
OCTOBER 31, 1999
- ---------------------------------------------------------------------------
Assets:
Investments, at value (identified cost, $634,881,338) $722,218,757
Cash 57,942
Receivable for Fund shares sold 4,325,045
Receivable for investments sold 7,845,708
Interest and dividends receivable 1,015,894
Other assets 6,539
------------
Total assets $735,469,885
------------
Liabilities:
Payable for investments purchased 11,270,927
Payable for Fund shares reacquired 2,787,970
Payable to affiliates -
Management fee 57,435
Administrative fee 862
Shareholder servicing agent fee 5,743
Distribution and service fee 35,419
Accrued expenses and other liabilities 299,492
------------
Total liabilities $ 14,457,848
------------
Net assets $721,012,037
============
Net assets consist of:
Paid-in capital $575,390,316
Unrealized appreciation on investments and translation of
assets and liabilities in foreign currencies 87,330,865
Accumulated undistributed net realized gain on
investments and foreign transactions 58,364,037
Accumulated net investment loss (73,181)
------------
Total $721,012,037
============
Shares of beneficial interest outstanding 32,289,592
==========
Class A shares:
Net asset value per share
(net assets of $384,435,643 / 17,082,745 shares of
beneficial interest outstanding) $22.50
======
Offering price per share (100 / 94.25 of net asset value
per share) $23.87
======
Class B shares:
Net asset value and offering price per share
(net assets of $287,699,817 / 12,975,286 shares of
beneficial interest outstanding) $22.17
======
Class C shares:
Net asset value and offering price per share
(net assets of $47,335,104 / 2,162,848 shares of
beneficial interest outstanding) $21.89
======
Class I shares:
Net asset value and offering price price per share
(net assets of $817,118 / 36,104 shares of beneficial
interest outstanding) $22.63
======
Class J shares:
Net asset value, offering price, and redemption price
per share (net assets of $724,355 / 32,609 shares
of beneficial interest outstanding) $22.21
======
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
- ----------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, 1999
- ----------------------------------------------------------------------------
Net investment income (loss):
Income -
Dividends $ 9,483,777
Interest 2,181,587
Foreign taxes withheld (1,037,032)
-----------
Total investment income $10,628,332
-----------
Expenses -
Management fee $ 6,785,268
Trustees' compensation 42,839
Shareholder servicing agent fee 711,652
Distribution and service fee (Class A) 868,992
Distribution and service fee (Class B) 2,948,357
Distribution and service fee (Class C) 391,005
Distribution and service fee (Class J) 1,048
Administrative fee 86,766
Custodian fee 466,223
Printing 86,320
Postage 154,149
Auditing fees 36,620
Legal fees 6,935
Miscellaneous 674,251
-----------
Total expenses $13,260,425
Fees paid indirectly (120,979)
-----------
Net expenses $13,139,446
-----------
Net investment loss $(2,511,114)
-----------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $90,772,487
Foreign currency transactions (56,043)
-----------
Net realized gain on investments and foreign
currency transactions $90,716,444
-----------
Change in unrealized appreciation (depreciation) -
Investments $ 5,105,694
Translation of assets and liabilities in
foreign currencies 45,201
-----------
Net unrealized gain on investments $ 5,150,895
-----------
Net realized and unrealized gain on investments
and foreign currency $95,867,339
-----------
Increase in net assets from operations $93,356,225
===========
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS -- continued
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, 1999 1998
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment loss $ (2,511,114) $ (855,865)
Net realized gain on investments and foreign currency
transactions 90,716,444 27,285,549
Net unrealized gain on investments and foreign currency
translation 5,150,895 9,488,026
------------- -------------
Increase in net assets from operations $ 93,356,225 $ 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 $ 77,262,844 $ 128,126,288
------------- -------------
Total increase in net assets $ 142,950,063 $ 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 $73,181 and $63,033, respectively) $ 721,012,037 $ 578,061,974
============= =============
</TABLE>
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS -- continued
<TABLE>
<CAPTION>
Financial Highlights
- ------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------
CLASS A
- ------------------------------------------------------------------------------------------------------------------------------
<S> <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
------ ------ ------ ------ ------
Income from investment operations# -
Net investment income $ -- $ 0.06 $ 0.08 $ 0.07 $ 0.09
Net realized and unrealized gain on
investments and foreign currency 3.14 1.35 3.49 2.60 1.37
------ ------ ------ ------ ------
Total from investment operations $ 3.14 $ 1.41 $ 3.57 $ 2.67 $ 1.46
------ ------ ------ ------ ------
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)
------ ------ ------ ------ ------
Total distributions declared to
shareholders $(0.99) $(1.15) $(1.93) $(0.90) $(1.73)
------ ------ ------ ------ ------
Net asset value - end of period $22.50 $20.35 $20.09 $18.45 $16.68
====== ====== ====== ====== ======
Total return(+) 15.82% 7.46% 20.81% 16.72% 10.16%
Ratios (to average net assets)/Supplemental data:
Expenses## 1.59% 1.60% 1.63% 1.65% 1.61%
Net investment income 0.00% 0.28% 0.42% 0.38% 0.58%
Portfolio turnover 92% 64% 65% 83% 73%
Net assets at end of period (000 Omitted) $384,436 $280,454 $167,390 $94,909 $52,164
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset arrangements.
(+) 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.
</TABLE>
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS -- continued
<TABLE>
<CAPTION>
Financial Highlights - continued
- -------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, 1999 1998 1997 1996 1995
- ------------------------------------ -----------------------------------------------------------------------------------------
CLASS B
- ------------------------------------------------------------------------------------------------------------------------------
<S> <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
------ ------ ------ ------ ------
Income from investment operations# -
Net investment loss $(0.09) $(0.11) $(0.07) $(0.08) $(0.05)
Net realized and unrealized gain on
investments and foreign currency 3.04 1.39 3.46 2.60 1.37
------ ------ ------ ------ ------
Total from investment operations $ 2.95 $ 1.28 $ 3.39 $ 2.52 $ 1.32
------ ------ ------ ------ ------
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)
------ ------ ------ ------ ------
Net asset value - end of period $22.17 $20.21 $19.97 $18.36 $16.55
====== ====== ====== ====== ======
Total return 14.90% 6.75% 19.74% 15.75% 9.07%
Ratios (to average net assets)/Supplemental data:
Expenses## 2.34% 2.35% 2.39% 2.45% 2.55%
Net investment loss (0.76)% (0.51)% (0.36)% (0.44)% (0.35)%
Portfolio turnover 92% 64% 65% 83% 73%
Net assets at end of period (000 Omitted) $287,700 $267,886 $253,354 $182,139 $156,286
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset arrangements.
</TABLE>
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS -- continued
<TABLE>
<CAPTION>
Financial Highlights - continued
- ------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------
CLASS C
- ------------------------------------------------------------------------------------------------------------------------------
<S> <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
------ ------ ------ ------ ------
Income from investment operations# -
Net investment loss $(0.16) $(0.10) $(0.06) $(0.06) $(0.05)
Net realized and unrealized gain on
investments and foreign currency 3.07 1.34 3.44 2.57 1.37
------ ------ ------ ------ ------
Total from investment operations $ 2.91 $ 1.24 $ 3.38 $ 2.51 $ 1.32
------ ------ ------ ------ ------
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 $21.89 $19.97 $19.78 $18.24 $16.53
====== ====== ====== ====== ======
Total return 14.88% 6.64% 19.86% 15.82% 9.20%
Ratios (to average net assets)/Supplemental data:
Expenses## 2.34% 2.35% 2.36% 2.39% 2.49%
Net investment loss (0.76)% (0.50)% (0.33)% (0.34)% (0.31)%
Portfolio turnover 92% 64% 65% 83% 73%
Net assets at end of period (000 Omitted) $47,335 $29,123 $16,658 $7,503 $2,908
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset arrangements.
</TABLE>
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS -- continued
<TABLE>
<CAPTION>
Financial Highlights - continued
- ---------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, PERIOD ENDED
------------------------------ OCTOBER 31,
1999 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 $ 0.06 $ 0.11 $ 0.13
Net realized and unrealized gain on investments and foreign
currency 3.14 1.37 2.44
------ ------ ------
Total from investment operations $ 3.20 $ 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 $22.63 $20.42 $20.14
====== ====== ======
Total return 16.02% 7.78% 14.63%++
Ratios (to average net assets)/Supplemental data:
Expenses## 1.34% 1.35% 1.38%+
Net investment income 0.26% 0.51% 0.77%+
Portfolio turnover 92% 64% 65%
Net assets at end of period (000 Omitted) $817 $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.
## Ratios do not reflect expense reductions from certain offset arrangements.
</TABLE>
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS -- continued
Financial Highlights - continued
- ---------------------------------------------------------------------------
PERIOD ENDED
OCTOBER 31, 1999*
- ---------------------------------------------------------------------------
CLASS J
- ---------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $22.58
------
Income from investment operations# -
Net investment loss $(0.10)
Net realized and unrealized loss on investments
and foreign currency (0.27)
------
Total from investment operations $(0.37)
------
Net asset value - end of period $22.21
======
Total return (1.55)%++
Ratios (to average net assets)/Supplemental data:
Expenses## 2.37%+
Net investment loss (1.34)%+
Portfolio turnover 92%
Net assets at end of period (000 Omitted) $724
* For the period from the inception of Class J, July 7, 1999, through
October 31, 1999.
+ Annualized.
++ Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain offset arrangements.
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(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. The Fund can
invest in foreign securities. 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 in good faith by 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 - State Street Bank and Trust Company ("State Street"), as agent,
may loan the securities of the Fund to certain brokers (the "Borrowers")
approved by the Fund. The loans are collateralized at all times by cash and/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 October 31, 1999, the value of securities loaned was $5,686,962. These loans
were collateralized by U.S. Treasury securities of $5,924,565. On loans
collateralized by U.S. Treasury securities, a fee is received from the Borrower,
and is allocated between the Fund and State Street. 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. Dividend payments 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.
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 be 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. During
the year ended October 31, 1999, $2,500,966 and $29,637,502 were reclassified to
accumulated net investment loss and paid-in capital, respectively, from
accumulated undistributed net realized gain on investments and foreign currency
transactions due to differences between book and tax accounting for currency
transactions and the offset of net investment loss against short-term capital
gains. This change had no effect on the net assets or net asset value per share.
Multiple Classes of Shares of Beneficial Interest - The Fund offers multiple
classes of shares, which differ in their respective distribution and service
fees. All shareholders bear the common expenses of the Fund based on daily net
assets of each class, without distinction between share classes. Dividends are
declared separately for each class. 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 net 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 $12,229 for the year ended
October 31, 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
$185,448 for the year ended October 31, 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, Class C, and
Class J 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 $47,851 for the year ended October 31,
1999. Payment of the 0.10% per annum Class A distribution fee will commence on
such date as the Trustees of the Trust may determine. Fees incurred under the
distribution plan during the year ended October 31, 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 $29,428 and $49 for Class B and Class C shares, respectively, for
the year ended October 31, 1999. Fees incurred under the distribution plan
during the year ended October 31, 1999, were 1.00% of average daily net assets
attributable to Class B and Class C shares on an annualized basis.
The Fund's distribution plan provides that the Fund will pay MFD a distribution
fee of up to 0.70% per annum, and a service fee of up to 0.25% per annum, of the
Fund's average daily net assets attributable to Class J shares. Class J shares
are available for distribution through The Fuji Bank, Ltd. ("Fuji Bank") and its
network of financial intermediaries. Fuji Bank also serves as the Fund's Agent
Company in Japan, and in that capacity represents the Fund before Japanese
regulatory authorities. MFD will pay to Fuji Bank all of the service fee
attributable to Class J shares. Out of the distribution fee, MFD will pay to
Fuji Bank 0.60% per annum of average net assets attributable to Class J shares
and will retain the remaining 0.10%. A portion of the distribution fee equal to
0.05% per annum of the Fund's average daily net assets attributable to Class J
shares is paid to Fuji Bank to cover its services as the Fund's Agent Company.
Fees incurred under the distribution plan during the year ended October 31,
1999, were 0.95% of average net assets attributable to Class J 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 year ended October 31,
1999, were $18,061, $427,401, and $9,604 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 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 U.S. government securities,
purchased option transactions, and short-term obligations, aggregated
$646,778,011 and $579,536,695, respectively.
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:
Aggregate cost $635,698,586
------------
Gross unrealized appreciation $112,909,830
Gross unrealized depreciation (26,389,659)
------------
Net unrealized appreciation $ 86,520,171
============
(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>
<CAPTION>
Class A Shares
YEAR ENDED OCTOBER 31, 1999 YEAR ENDED OCTOBER 31, 1998
---------------------------------- ----------------------------------
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 63,109,043 $ 1,369,325,357 63,270,572 $ 1,328,540,567
Shares issued to
shareholders in
reinvestment of
distributions 642,440 13,367,581 475,953 9,014,410
Shares reacquired (60,450,001) (1,314,372,776) (58,297,803) (1,233,152,862)
--------------- --------------- --------------- ---------------
Net increase 3,301,482 $ 68,320,162 5,448,722 $ 104,402,115
=============== =============== =============== ===============
<CAPTION>
Class B Shares
YEAR ENDED OCTOBER 31, 1999 YEAR ENDED OCTOBER 31, 1998
---------------------------------- ----------------------------------
SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 4,761,616 $ 102,673,871 7,217,662 $ 150,165,756
Shares issued to
shareholders in
reinvestment of
distributions 584,724 12,010,215 642,497 12,163,413
Shares reacquired (5,627,951) (121,304,803) (7,289,367) (151,361,853)
--------------- --------------- --------------- ---------------
Net increase (decrease) (281,611) $ (6,620,717) 570,792 $ 10,967,316
=============== =============== =============== ===============
<CAPTION>
Class C Shares
YEAR ENDED OCTOBER 31, 1999 YEAR ENDED OCTOBER 31, 1998
---------------------------------- ----------------------------------
SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 3,608,010 $ 76,600,971 1,968,268 $ 40,771,694
Shares issued to
shareholders in
reinvestment of
distributions 63,158 1,280,840 39,122 731,968
Shares reacquired (2,966,772) (63,177,836) (1,391,012) (28,864,563)
--------------- --------------- --------------- ---------------
Net increase 704,396 $ 14,703,975 616,378 $ 12,639,099
=============== =============== =============== ===============
<CAPTION>
Class I Shares
YEAR ENDED OCTOBER 31, 1999 YEAR ENDED OCTOBER 31, 1998
---------------------------------- ----------------------------------
SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 12,469 $ 272,774 6,519 $ 132,173
Shares issued to
shareholders in
reinvestment of
distributions 1,469 30,528 1,410 26,719
Shares reacquired (7,198) (161,537) (1,996) (41,134)
--------------- --------------- --------------- ---------------
Net increase 6,740 $ 141,765 5,933 $ 117,758
=============== =============== =============== ===============
<CAPTION>
Class J Shares
PERIOD ENDED OCTOBER 31, 1999*
----------------------------------
SHARES AMOUNT
- ----------------------------------------------------------------
<S> <C> <C>
Shares sold 32,609 $ 717,659
=============== ===============
* For the period from the inception of Class J, July 7, 1999, through October 31, 1999.
</TABLE>
(6) Line of Credit
The Fund and other affiliated funds participate in an $820 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 year ended October 31, 1999, was $4,726. The Fund had no
borrowings during the year.
(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>
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS
To the Trustees of MFS Series Trust VI and Shareholders of MFS Global Equity
Fund:
We have audited the accompanying statement of assets and liabilities of MFS
Global Equity Fund, including the schedule of portfolio investments, as of
October 31, 1999, and the related statement of operations for the year then
ended and the statement of changes in net assets and the financial highlights
for each of the two years in the period then ended. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits. The financial highlights for the three
years in the period then ended October 31, 1997, were audited by other auditors
whose report dated December 5, 1997 expressed an unqualified opinion on those
financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of October 31, 1999, by correspondence with the custodian
and brokers or by other appropriate auditing procedures where replies from
brokers were not received. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
MFS Global Equity Fund at October 31, 1999, the results of its operations for
the year then ended, and the changes in its net assets and the financial
highlights for each of the two years in the period then ended, are in conformity
with generally accepted accounting principles.
/s/ Ernst & Young LLP
Boston, Massachusetts
December 9, 1999
<PAGE>
- --------------------------------------------------------------------------------
FEDERAL TAX INFORMATION
- --------------------------------------------------------------------------------
IN JANUARY 2000, SHAREHOLDERS WILL BE MAILED A FORM 1099-DIV REPORTING THE
FEDERAL TAX STATUS OF ALL DISTRIBUTIONS PAID DURING THE CALENDAR YEAR 1999.
THE FUND HAS DESIGNATED $55,595,016 AS A CAPITAL GAIN DIVIDEND FOR THE YEAR
ENDED OCTOBER 31, 1999.
FOR THE YEAR ENDED OCTOBER 31, 1999, INCOME FROM FOREIGN SOURCES WAS $7,651,371
AND THE FUND DESIGNATED A FOREIGN TAX CREDIT OF $991,964.
<PAGE>
MFS' YEAR 2000 READINESS DISCLOSURE
MFS Investment Management(R), as an investment adviser and
on behalf of the MFS funds, is committed to the effective
use of technology in managing our portfolio investments,
delivering high-quality service to MFS fund shareholders, [Graphic Omitted]
retirement plan participants, and MFS' institutional
clients, and supporting the financial consultants who sell
our products.
MFS can now say that it is ready for the Year 2000. Our testing has demonstrated
that MFS' computer hardware and software will recognize "00" as the Year 2000
and will not confuse those digits with 1900. All of our critical business
applications and processes have been successfully tested, and we have adopted
companywide policies that will help us maintain our readiness through the
remainder of the year. Any new technology that is brought into the company
before the end of the year will be held to the same stringent standards as our
current technology. We have also developed a vendor readiness survey, contacted
over 700 of our vendors, and established an ongoing process to review responses,
as well as to review readiness statements of new vendors and products.
MFS recognizes that fund shareholders and institutional clients also are
concerned about whether the companies whose securities are held in their
portfolios are addressing Y2K issues. As part of the MFS Original Research(R)
process of evaluating portfolio investments, one of the many relevant factors
that MFS' portfolio managers and research analysts may consider is a company's
Y2K readiness.
Y2K readiness is an enormously complex, worldwide issue. No company or
institution can guarantee that it will be unaffected by the Y2K issue. While MFS
is taking significant steps to protect the integrity of its internal systems,
there can be no assurance that these steps will be sufficient to avoid any
adverse impact on MFS fund shareholders, retirement plan participants, or
institutional clients.
If you have further questions regarding MFS' Year 2000 Readiness Program, please
visit our Web site at www.mfs.com, call our toll-free line, 1-800-637-4406, or
write to the MFS Year 2000 Program Management Office by e-mail at [email protected] or
by letter at 500 Boylston Street, Boston, MA 02116-3741.
<PAGE>
<TABLE>
MFS(R) GLOBAL EQUITY FUND
<S> <C>
TRUSTEES ASSISTANT TREASURERS
Richard B. Bailey - Private Investor; Mark E. Bradley*
Former Chairman and Director (until 1991), Ellen Moynihan*
MFS Investment Management(R) James O. Yost*
Marshall N. Cohan - Private Investor SECRETARY
Stephen E. Cavan*
Lawrence H. Cohn, M.D. - Chief of Cardiac
Surgery, Brigham and Women's Hospital; ASSISTANT SECRETARY
Professor of Surgery, Harvard Medical School James R. Bordewick, Jr.*
The Hon. Sir J. David Gibbons, KBE - Chief CUSTODIAN
Executive Officer, Edmund Gibbons Ltd.; State Street Bank and Trust Company
Chairman, Colonial Insurance Company, Ltd.
AUDITORS
Abby M. O'Neill - Private Investor Ernst & Young LLP
Walter E. Robb, III - President and Treasurer, INVESTOR INFORMATION
Benchmark Advisors, Inc. (corporate financial For information on MFS mutual funds, call your
consultants); President, Benchmark Consulting financial consultant or, for an information
Group, Inc. (office services) kit, call toll free: 1-800-637-2929 any
business day from 9 a.m. to 5 p.m. Eastern time
Arnold D. Scott* - Senior Executive (or leave a message anytime).
Vice President, Director, and Secretary,
MFS Investment Management INVESTOR SERVICE
MFS Service Center, Inc.
Jeffrey L. Shames* - Chairman and Chief P.O. Box 2281
Executive Officer, MFS Investment Management Boston, MA 02107-9906
J. Dale Sherratt - President, Insight For general information, call toll free:
Resources, Inc. (acquisition planning 1-800-225-2606 any business day from
specialists) 8 a.m. to 8 p.m. Eastern time.
Ward Smith - Former Chairman For service to speech- or hearing-impaired,
(until 1994), NACCO Industries (holding call toll free: 1-800-637-6576 any business
company) day from 9 a.m. to 5 p.m. Eastern time. (To
use this service, your phone must be equipped
INVESTMENT ADVISER with a Telecommunications Device for the Deaf.)
Massachusetts Financial Services Company
500 Boylston Street For share prices, account balances, exchanges,
Boston, MA 02116-3741 or MFS stock and bond market outlooks, call
toll free: 1-800-MFS-TALK (1-800-637-8255)
DISTRIBUTOR anytime from a touch-tone telephone.
MFS Fund Distributors, Inc.
500 Boylston Street WORLD WIDE WEB
Boston, MA 02116-3741 www.mfs.com
CHAIRMAN AND PRESIDENT
Jeffrey L. Shames*
PORTFOLIO MANAGER
David R. Mannheim*
TREASURER
W. Thomas London*
+Independent Trustee
*MFS Investment Management
</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 Investment Management.(R)
MFS(R) investment products are offered through MFS Fund Distributors, Inc.,
500 Boylston Street, Boston, MA 02116
MWE-2 12/99 101M 04/204/304/804/704
