<PAGE>
MFS INSTITUTIONAL INTERNATIONAL EQUITY FUND
MFS INSTITUTIONAL MID-CAP GROWTH EQUITY FUND
Series of MFS INSTITUTIONAL TRUST
Supplement to the December 1, 1995 Prospectus
The following information should be read in conjunction with the Funds'
Prospectus and Statement of Additional Information dated December 1, 1995 and
contains financial information and other changes with respect to the
International Equity Fund and the Mid-Cap Fund.
Annual Operating Expenses (as percentage of average net assets):*
INTERNATIONAL EQUITY FUND MID-CAP FUND
Management Fees 0.75% 0.60%
Other Expenses (after
expense reduction)** 0.10% 0.05%
----- -----
Total Operating Expenses
(after expense reduction)** 0.85% 0.65%
* Based on estimates of expenses for the fiscal year ending June 30, 1996.
** The Adviser has agreed to bear the expenses of each Fund such that each
Fund's aggregate expenses do not exceed the following percentages, on an
annualized basis, of its average daily net assets: 0.85% of the
International Equity Fund and 0.65% of the Mid-Cap Fund. Each arrangement
may be terminated or revised by MFS at any time. See "Information
Concerning Shares of the Fund - Expenses" in the Prospectus. Absent these
expense arrangements, estimated Other Expenses and Total Operating Expenses
for each Fund would be, on an annualized basis, respectively, 3.63% and
4.38% of the International Equity Fund and 3.63% and 4.23% of the Mid-Cap
Fund, respectively.
CONDENSED FINANCIAL INFORMATION
The following information should be read in conjunction with the financial
statements included in the July 1, 1996 Supplement to the Statement of
Additional Information (which have not been audited).
Financial Highlights
Period Ended April 30, 1996*
Per share data (for a share outstanding throughout the period):
INTERNATIONAL EQUITY FUND MID-CAP FUND
Net asset value -
beginning of period $10.00 $10.00
------ ------
Income from investment
operations# -
Net investment
income (Loss)** $ 0.07 $(0.01)
Net realized and
unrealized gain on
investments and
foreign currency
transactions 0.56 1.46
------ -----
Total from
investment
operations $ 0.63 $1.45
------- -----
Net asset value - end of period $10.63 $11.45
====== ======
Total return 6.30%++ 14.50%++
Ratios (to average net assets)/
Supplemental data**:
Expenses 0.95%+ 0.75%+
Net Investment
Income (loss) 2.34%+ (0.21)%+
Portfolio turnover 5% 26%
Net assets at end of period
(000 omitted) $2,423 $8,382
* For the period from the commencement of investment operations of the
International Equity Fund and the Mid-Cap Fund, January 30, 1996 and
December 28, 1995, respectively, to April 30, 1996.
+ Annualized.
<PAGE>
++ Not Annualized.
# Per share data is based on average shares outstanding.
** The Adviser voluntarily agreed to maintain the expenses of the Fund at not
more than 0.95% and 0.75%, respectively of each Fund's average daily net
assets. To the extent actual expenses were over these limitations, the net
investment loss per share and the ratios would have been:
Net investment loss $(0.07) $(0.10)
Ratios (to average net assets):
Expenses 5.63%+ 3.68%+
Net investment loss (2.33)%+ (3.14)%+
The date of this Supplement is July 1, 1996.
<PAGE>
MFS INSTITUTIONAL INTERNATIONAL EQUITY FUND
MFS INSTITUTIONAL MID-CAP GROWTH EQUITY FUND
Series of MFS INSTITUTIONAL TRUST
Supplement to the December 1, 1995 Statement of Additional Information
MANAGEMENT OF THE TRUST
As of June 7, 1996, DePauw University, 313 S. Locust St., Greencastle, IN, and
certain benefit and pension plans of Massachusetts Financial Services Company
("MFS") were the record owners approximately of 59.5% and 40.5%, respectively,
of the outstanding shares of the Mid-Cap Fund and certain benefit and pension
plans of MFS were the record owners of 100% of the outstanding shares of the
International Equity Fund.
DETERMINATION OF NET ASSET VALUE; PERFORMANCE INFORMATION
The aggregate total rate of return for the International Equity Fund and the
Mid-Cap Fund for the period from January 30, 1996 and December 28, 1995
(commencement of investment operations), respectively, to April 30, 1996 was
6.30% and 14.50%, respectively, unannualized. The results would have been lower
had MFS not borne certain expenses of the Fund.
FINANCIAL STATEMENTS
The Financial Statements for each Fund, consisting of the Portfolio of
Investments at April 30, 1996, the Statement of Assets and Liabilities at April
30, 1996, the Statement of Operations for the period from the commencement of
investment operations of the International Equity Fund and the Mid-Cap Fund on
January 30, 1996 and December 28, 1995, respectively, to April 30, 1996, the
Statement of Changes in Net Assets for the period from the commencement of
investment operations of the International Equity Fund and the Mid-Cap Fund on
January 30, 1996 and December 28, 1995, respectively, to April 30, 1996, and the
Notes to the Financial Statements are attached to and form a part of this
supplement.
<PAGE>
Portfolio of Investments (Unaudited) - April 30, 1996
MFS Institutional International Equity Fund
- -------------------------------------------------------------------------------
Common Stocks - 94.7%
- ------------------------------------------------------------------------------
Issuer Shares Value
- -------------------------------------------------------------------------------
Foreign Stocks -- 86.3%
Australia -- 4.1%
Q.B.E.Insurance Group Ltd. (Insurance) 9,600 $ 50,418
Seven Network Ltd. (Broadcasting) 16,700 49,892
---------------
$ 100,310
- -------------------------------------------------------------------------------
Denmark -- 0.8%
Novo-Nordisk, "B" (Pharmaceuticals) 140 $ 18,178
- -------------------------------------------------------------------------------
Finland -- 1.8%
Aamulehti Yhtymae Oy-II (Publishing) 950 $ 24,050
Huhtamaki Oy "I", Free shares (Food
Processing) 600 19,840
---------------
$ 43,890
- -------------------------------------------------------------------------------
France -- 5.5%
Accor (Lodging) 150 $ 20,826
Michelin "B" (Tire and Rubber) 700 34,665
Total S.A. "B" (Oils) 350 23,735
Union des Assurances Federales S.A.
(Insurance) 440 53,431
---------------
$ 132,657
- -------------------------------------------------------------------------------
Germany -- 1.1%
Volkswagen AG (Automobiles) 75 $ 25,871
- -------------------------------------------------------------------------------
Greece -- 0.8%
Hellenic Technodomiki
(Engineering & Construction) 1,100 $ 18,495
- -------------------------------------------------------------------------------
Hong Kong -- 5.3%
Cosco Pacific Ltd. (Packaging and Container)## 34,000 $ 23,957
Dah Sing Financial (Financial) 5,600 15,566
Giordano International (Retail - Apparel) 35,000 32,354
Liu Chong Hing Bank (Financial - Banking) 15,000 20,750
Peregrine Investment Holdings
(Financial Services) 12,000 18,540
Wing Hang Bank Ltd. (Financial - Banking) 5,000 18,294
---------------
$ 129,461
- -------------------------------------------------------------------------------
Italy -- 3.3%
Telecom Italia Mobile (Utilities - Telephone) 57,000 $ 79,917
- -------------------------------------------------------------------------------
Japan -- 19.4%
Bridgestone Corp (Tire and Rubber) 2,000 $ 36,995
Canon, Inc. (Office Equipment) 1,000 19,832
Daiwa House Industrial Co.
(Manufactured Housing) 2,000 31,846
DDI Corp. (Utilities - Telephone) 10 85,717
East Japan Railway (Transportation) 6 31,979
Kinki Coca-Cola (Beverage) 1,000 14,779
<PAGE>
Portfolio of Investments (Unaudited) - April 30, 1996
Common Stocks - continued
- -------------------------------------------------------------------------------
Issuer Shares Value
- -------------------------------------------------------------------------------
Japan -- continued
Kirin Beverage (Beverage) 2,000 $ 28,223
Matsushita Electric Industrial
Co. (Electrical Equipment) 2,000 35,278
Murata Manufacturing (Electrical Equipment) 1,000 38,711
Omron Corp. (Electronics) 2,000 45,004
Osak Sanso Kogyo (Chemicals) 8,000 35,698
Takeda Chemical Industries (Pharmaceuticals) 3,000 51,773
Teisan KK (Chemicals) 2,000 13,787
---------------
$ 469,622
- -------------------------------------------------------------------------------
Malaysia -- 1.3%
New Straits Time Press Bhd. (Publishing) 6,000 $ 32,249
- -------------------------------------------------------------------------------
Netherlands -- 4.7%
Getronics NV (Computer Software) 650 $ 45,128
IHC Caland NV (Oil Services) 600 23,559
Royal Dutch Petroleum Co. (Oils) 325 46,285
---------------
$ 114,972
- -------------------------------------------------------------------------------
New Zealand -- 4.7%
Lion Nathan Ltd (Brewing) 27,000 $ 67,264
Sky City Ltd. (Gaming) 11,000 46,730
---------------
$ 113,994
- -------------------------------------------------------------------------------
Philippines -- 0.8%
Pilipino Telephone (Telecommunications) 13,000 $ 19,176
- -------------------------------------------------------------------------------
Singapore -- 3.7%
Singapore Finance Ltd. (Financial Services) 26,000 $ 52,167
Singapore Press HD Ltd. (Publishing) 2,000 37,851
---------------
$ 90,018
- -------------------------------------------------------------------------------
Spain -- 6.3%
Acerinox S.A. (Iron/Steel) 440 $ 49,762
Cubiertas Y Mzov S.A. (Engineering) 600 38,364
Iberdrola (Utilities - Electric) 2,200 21,542
Repsol S.A. (Oils) 1,200 44,027
---------------
$ 153,695
- -------------------------------------------------------------------------------
Sweden -- 11.2%
ASTRA AB, "B", Free Shares
(Pharmaceuticals) 740 $ 75,005
ASTRA AB, "B", Free Shares
(Pharmaceuticals) 1,600 70,597
Marieberg Tidings AB, "A" (Publishing) 1,000 23,424
Nobel Biocare AB (Medical Supplies) 1,100 17,502
Sparbanken Svergie, "A" (Financial) 4,300 48,462
Tornet Fastighet AB (Real Estate)* 4,300 3,167
Volvo AB, "B" (Automotive) 1,400 32,072
---------------
$ 270,229
- -------------------------------------------------------------------------------
United Kingdom -- 11.5%
Asda Group PLC (Stores) 30,500 $ 52,079
Capital Radio PLC (Broadcasting) 2,400 24,768
Dalgety PLC (Food Products) 6,200 36,190
<PAGE>
Portfolio of Investments (Unaudited) - April 30, 1996
Common Stocks - continued
- -------------------------------------------------------------------------------
Issuer Shares Value
- --------------------------------------------------------------------------------
United Kingdom -- continued
Kwik-Fit Holdings PLC (Auto Parts) 1,300 $ 4,449
Lloyds TSB Group PLC (Financial Services) 3,700 17,729
PowerGen PLC (Utilities - Electric) 10,000 83,945
PowerGen PLC, 380 P/P (Utilities - Electric) 3,900 24,525
Storehouse PLC (Retail Department Stores) 6,600 34,057
---------------
$ 277,742
- -------------------------------------------------------------------------------
Total Foreign Stocks $ 2,090,476
- -------------------------------------------------------------------------------
U.S. Stocks -- 8.4%
Construction Services -- 0.7%
Alsons Cement Corp. ## * 34,000 $ 15,958
- -------------------------------------------------------------------------------
Railroad -- 1.4%
Canadian National Railway Co. 1,750 $ 33,250
- -------------------------------------------------------------------------------
Restaurants and Lodging -- 0.9%
Mandarin Oriental Hotel 16,000 $ 22,720
- -------------------------------------------------------------------------------
Telecommunications -- 4.1%
Ericsson, L.M., "B" ADR 1,100 $ 22,413
Korea Mobile Telecommunications Corp. ## 500 28,500
Orange PLC, ADR * 700 12,600
Total Access Communications * 4,000 35,200
---------------
$ 98,713
- -------------------------------------------------------------------------------
Utilities -- Electric 1.3%
Chilectra SA, ADR 600 $ 32,700
- -------------------------------------------------------------------------------
Total U.S. Stocks $ 203,341
- -------------------------------------------------------------------------------
Total Stocks (Identified Cost, $2,174,329) $ 2,293,817
- -------------------------------------------------------------------------------
Short-Term Obligation -- 4.1%
- -------------------------------------------------------------------------------
Principal Amount
(000 Omitted)
- -------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp.,
due 5/01/96, at Amortized Cost $ 100 $ 100,000
- -------------------------------------------------------------------------------
Total Investments (Identified Cost,$2,274,329) 2,393,817
Other Assets, Less Liabilities -- 1.2% $ 29,220
- -------------------------------------------------------------------------------
Net Assets - 100% $ 2,423,037
- -------------------------------------------------------------------------------
See notes to financial statements.
<PAGE>
Portfolio of Investments (Unaudited) - April 30, 1996
MFS Institutional Mid-Cap Growth Equity Fund
- -------------------------------------------------------------------------------
Common Stocks - 95.2%
- -------------------------------------------------------------------------------
Issuer Shares Value
- -------------------------------------------------------------------------------
Apparel and Textiles -- 1.0%
Nine West Group, Inc. * 2,000 $ 85,750
- -------------------------------------------------------------------------------
Banks and Credit Companies -- 1.9%
Capital One Financial Co. 3,000 $ 88,500
Northern Trust Co. 1,300 73,125
---------------
$ 161,625
- -------------------------------------------------------------------------------
Business Machines -- 0.6%
Gateway 2000, Inc. * 1,300 $ 45,337
- -------------------------------------------------------------------------------
Business Services -- 9.0%
ADT Ltd. 5,500 $ 93,500
BISYS Group, Inc. * 1,300 49,725
Ceridian Corp. * 2,000 95,500
Computer Sciences, Inc. * 1,350 99,900
CUC International, Inc. * 4,000 131,500
First USA Paymentech * 100 4,350
Fiserv, Inc. * 3,250 99,125
Fanklin Quest Co. * 3,300 89,100
SPS Transaction Services Corp. * 3,300 88,275
---------------
$ 750,975
- -------------------------------------------------------------------------------
Cellular Phones -- 0.6%
Telephone & Data Systems, Inc. 1,150 $ 53,475
- -------------------------------------------------------------------------------
Computer Software -- Personal Computers -- 4.2%
Autodesk, Inc. 4,500 $ 183,375
Electronic Arts, Inc. * 3,675 98,306
Symantec Corp. * 4,500 72,562
---------------
$ 354,243
- -------------------------------------------------------------------------------
Computer Software -- Systems -- 18.8%
Adobe Systems, Inc. 3,000 $ 129,000
BMC Software, Inc. * 3,300 200,887
Cadence Design Systems, Inc. * 2,500 130,625
Compuware Corp. * 3,150 89,775
Davidson & Assoc., Inc. * 1,300 35,100
Informix Corp. * 4,500 118,687
Oracle Systems Corp. * 9,975 336,656
Sybase, Inc. * 5,675 155,353
Synopsys, Inc. * 4,650 191,812
System Software Associates, Inc. 8,000 191,000
---------------
$ 1,578,895
- -------------------------------------------------------------------------------
Consumer Goods and Services -- 1.5%
Department 56, Inc. * 2,300 $ 57,212
Service Corp. International 1,300 69,063
---------------
$ 126,275
- -------------------------------------------------------------------------------
<PAGE>
Portfolio of Investments (Unaudited) - April 30, 1996
Common Stocks - continued
- -------------------------------------------------------------------------------
Issuer Shares Value
- -------------------------------------------------------------------------------
Electronics -- 3.7%
Linear Technology Corp. 1,000 $ 34,375
LSI Logic Corp. * 3,800 136,800
Novellus Systems, Inc. * 1,000 54,250
Xilinx, Inc. * 2,300 84,812
---------------
$ 310,237
- -------------------------------------------------------------------------------
Entertainment -- 7.5%
Grand Casinos, Inc. * 2,650 $ 85,794
Harrah's Entertainment Corp. * 7,150 246,675
Heritage Media Corp. * 1,300 49,888
Infinity Broadcasting Corp., "A" * 2,300 66,700
Showboat, Inc. 5,500 176,000
---------------
$ 625,057
- -------------------------------------------------------------------------------
Financial Institutions -- 6.0%
Advanta Corp., "B" 2,000 $ 100,250
Countrywide Credit Industries, Inc. 2,000 43,250
Credit Acceptance Corp. * 2,500 46,875
Finova Group, Inc. 1,300 72,150
Franklin Resources, Inc. 2,300 131,675
Green Tree Financial 3,300 111,375
---------------
$ 505,575
- -------------------------------------------------------------------------------
Medical and Health Technology and Services 15.0%
Foundation Health Corp. * 2,150 $ 84,119
Health Management Assoc., Inc. * 4,500 144,000
Healthsource, Inc. * 2,300 78,488
Healthsouth Corp. * 2,020 74,993
Manor Care, Inc. 1,850 74,231
Mariner Health Group, Inc. * 5,300 90,100
Mid Atlantic Medical Services, Inc. * 1,550 30,225
Pacificare Health Systems, Inc., "A" * 3,150 255,150
St. Jude Medical, Inc. 3,650 133,225
United Healthcare Corp. 4,950 289,575
---------------
$ 1,254,106
- -------------------------------------------------------------------------------
Metals and Minerals -- 0.8%
J & L Specialty Steel 3,800 $ 68,875
- -------------------------------------------------------------------------------
Oils -- 0.3%
Belco Oil & Gas Corp. * 800 $ 23,100
- -------------------------------------------------------------------------------
Printing and Publishing -- 0.5%
Pulitzer Publishing Co. 800 $ 45,600
- -------------------------------------------------------------------------------
Railroad -- 1.7%
Wisconsin Central Transportation Corp. * 1,650 $ 139,425
- -------------------------------------------------------------------------------
<PAGE>
Portfolio of Investments (Unaudited) - April 30, 1996
Common Stocks - continued
- -------------------------------------------------------------------------------
Issuer Shares Value
- ------------------------------------------------------------------------------
Restaurants and Lodging -- 6.5%
Applebee's International, Inc. 4,500 $ 119,250
Buffets, Inc. * 3,800 52,725
HFS, Inc. * 4,650 238,894
Promus Hotel Corp. * 3,850 109,244
Renaissance Hotel * 1,300 24,700
---------------
$ 544,813
- -------------------------------------------------------------------------------
Special Products and Services -- 0.9%
Loewen Group ## 1,000 $ 30,109
Loewen Group, Inc. * 1,500 44,812
---------------
$ 74,921
- -------------------------------------------------------------------------------
Stores -- 5.7%
AutoZone, Inc. * 1,350 $ 49,275
General Nutrition Cos., Inc. * 5,300 103,350
Gymboree Corp. * 3,000 77,625
Micro Warehouse, Inc. * 2,000 86,000
Office Depot, Inc. * 7,300 163,338
---------------
$ 479,588
- -------------------------------------------------------------------------------
Telecommunications -- 9.0%
Bay Networks, Inc. * 1,502 $ 47,313
Cable Design Technologies, Inc. * 800 26,400
Cabletron Systems, Inc. * 1,350 101,757
Glenayre Technologies, Inc. * 2,300 106,950
Paging Network, Inc. * 3,000 70,500
Rogers Cantel Mobile Communications, Inc., "B" * 6,800 183,600
U.S. Robotics Corp. * 650 101,725
WorldCom, Inc. * 2,467 115,950
---------------
$ 754,195
- -------------------------------------------------------------------------------
Total Common Stocks (Identified Cost, $7,628,155) $ 7,982,067
- -------------------------------------------------------------------------------
Convertible Preferred Stock -- 0.0%
- -------------------------------------------------------------------------------
Printing and Publishing --
Times Mirror Co.,"B" (PERCS) 6 $ 161
- ------------------------------------------------------------------------------
Total Stocks (Identified Cost, $7,628,310) $ 7,982,228
- ------------------------------------------------------------------------------
Short-Term Obligations -- 60.8%
- -------------------------------------------------------------------------------
Principal Amount
(000 Omitted)
- -------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp.,
due 5/01/96 $3,100 $ 3,100,000
Federal Home Loan Mortgage Corp.,
due 5/22/96 2,000 1,993,957
- -------------------------------------------------------------------------------
Total Short-Term Obligations, at Amortized Cost $ 5,093,957
- -------------------------------------------------------------------------------
Total Investments (Identified Cost, $12,722,267) $ 13,076,185
<PAGE>
Portfolio of Investments (Unaudited) - April 30, 1996
Other Assets, Less Liabilities -- (56.0)% $ (4,694,677)
- -------------------------------------------------------------------------------
Net Assets - 100% $ 8,381,508
- -------------------------------------------------------------------------------
* Non-income producing security.
## SEC Rule 144A security.
See notes to financial statements.
<PAGE>
Financial Statements
Statements of Assets and Liabilities (Unaudited)
- ------------------------------------------------------------------------------
International Mid- Cap
Equity Growth Equity
April 30, 1996 Fund Fund
- --------------------------------------------------------------------------------
Assets:
Investments, at value (identified cost, $2,274,329
and $12,722,267, respectively) $ 2,393,817 $ 13,076,185
Cash 5,916 7,931
Foreign currency, at value (identified cost, $679) 679 -
Receivable for investments sold 21,148 29,886
Dividends receivable 10,876 157
Deferred organization expenses 6,641 6,499
-------------- ------------
Total assets $ 2,439,077 $ 13,120,658
-------------- ------------
Liabilities:
Payable for investments purchased $ 7,722 $ 4,732,337
Payable to affiliates for management fee 190 314
Accrued expenses and other liabilities 8,128 6,499
-------------- -----------
Total liabilities $ 16,040 $ 4,739,150
-------------- -----------
Net assets $ 2,423,037 $ 8,381,508
============== ===========
Net assets consist of:
Paid-in capital $ 2,288,536 $ 7,963,442
Unrealized appreciation on investments
and translation of assets and liabilities
in foreign currencies 119,476 353,918
Accumulated undistributed net realized
gain on investments and foreign
currency transactions 2,697 66,370
Accumulated undistributed net investment
income (loss) 12,328 (2,222)
-------------- -------------
Total $ 2,423,037 $ 8,381,508
============== =============
Shares of beneficial interest outstanding 227,905 731,884
============== =============
Net asset value, redemption price and offering price per share (net assets /
shares of beneficial
interest outstanding) $10.63 $11.45
============== ==============
See notes to financial statements
<PAGE>
Financial Statements - continued
Statements of Operations (Unaudited)
- -------------------------------------------------------------------------------
International Mid-Cap
Equity Growth Equity
Period Ended April 30, 1996* Fund Fund
- -------------------------------------------------------------------------------
Net investment income:
Income -
Interest $ 5,115 $ 4,148
Dividends 12,231 1,643
-------------- --------------
Total investment income $ 17,346 $ 5,791
-------------- --------------
Expenses -
Management fee $ 3,962 $ 6,410
Trustees' Compensation 1,250 2,500
Shareholder servicing agent fee 38 77
Registration fees 15,145 17,980
Auditing fees 6,195 5,196
Legal fees 1,282 410
Printing 833 5,564
Custodian fee 491 483
Amortization of organization expenses 344 474
Miscellaneous 103 135
-------------- -------------
Total expenses $ 29,643 $ 39,229
Fees paid indirectly (159) (211)
Preliminary reduction of expenses by investment
adviser (24,466) (31,005)
-------------- --------------
Net expenses $ 5,018 $ 8,013
-------------- --------------
Net investment income (loss) $ 12,328 $ (2,222)
-------------- --------------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $ 3,770 $ 66,370
Foreign currency transactions (1,073) -
-------------- --------------
Net realized gain on investments and
foreign currency transactions $ 2,697 $ 66,370
-------------- --------------
Change in unrealized appreciation on investments
and translation of assets and liabilities in
foreign currencies $ 119,476 $ 353,918
-------------- --------------
Net realized and unrealized gain on investments
and foreign currency $ 122,173 $ 420,288
-------------- --------------
Increase in net assets from operations $ 134,501 $ 418,066
============== ===============
* For the period from the commencement of investment operations, January 30,
1996 and and December 28, 1995, respectively, to April 30, 1996.
See notes to financial statements
<PAGE>
Financial Statements - continued
Statements of Changes in Net Assets (Unaudited)
- -------------------------------------------------------------------------------
International Mid-Cap
Equity Growth Equity
Period Ended April 30, 1996* Fund Fund
- -------------------------------------------------------------------------------
Increase in net assets:
From operations -
Net investment income (loss) $ 12,328 $ (2,222)
Net realized gain on investments and
foreign currency transactions 2,697 66,370
Net unrealized gain on investments and
foreign currency translation 119,476 353,918
------------- --------------
Increase in net assets from operations $ 134,501 $ 418,066
-------------- --------------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 2,288,536 $ 7,963,442
-------------- --------------
Total increase in net assets $ 2,423,037 $ 8,381,508
Net assets:
At beginning of period -- --
-------------- --------------
At end of period (including accumulated
undistributed net investment income (loss)
of $12,328 and $(2,222), respectively) $ 2,423,037 $ 8,381,508
============== ==============
* For the period from the commencement of investment operations, January 30,
1996 and and December 28, 1995, respectively, to April 30, 1996.
See notes to financial statements
<PAGE>
Financial Statements - continued
Financial Highlights (Unaudited)
- -------------------------------------------------------------------------------
International Mid-Cap
Equity Growth Equity
Period Ended April 30, 1996* Fund Fund
- -------------------------------------------------------------------------------
Per share data (for a share outstanding throughout the period):
Net asset value - beginning of period $ 10.00 $ 10.00
-------------- ---------------
Income from investment operations # -
Net investment income (loss)ss. $ 0.07 $ (0.01)
Net realized and unrealized gain
on investments and foreign
currency transactions 0.56 1.46
-------------- ---------------
Total from investment operations $ 0.63 $ 1.45
-------------- ---------------
Net asset value - end of period $ 10.63 $ 11.45
============== ===============
Total return 6.30%++ 14.50%++
Ratios (to average net assets)/Supplemental data:ss.
Expenses 0.95%++ 0.75%+
Net investment income (loss) 2.34%+ (0.21)%+
Portfolio turnover 5% 26%
Average Commission rate $ 0.0195 $ 0.0491
Net assets at end of period (000 omitted) $ 2,423 $ 8,382
* For the period from the commencement of investment operations, January
30, 1996 and and December 28, 1995, respectively, to April 30, 1996.
+ Annualized.
++ Not annualized.
# Per share data is based on average shares outstanding.
ss. The Adviser voluntarily agreed to maintain the expenses of the Funds
at not more than .95% and .75%, respectively, of each Fund's average
daily net assets. To the extent actual expenses were over these
limitations, the net investment loss per share and the ratios would have
been:
Net investment loss $ (0.07) $ (0.10)
Ratios (to average net assets):
Expenses 5.63%+ 3.68%+
Net investment loss (2.33)%+ (3.14)%+
See notes to financial statements
<PAGE>
Notes to Financial Statements - (Unaudited)
(1) Business and Organization
MFS Institutional International Equity Fund (the Fund) and MFS Institutional
Mid-Cap Growth Equity Fund (the Fund) are diversified series of MFS
Institutional Trust (the Trust). The Trust is organized as a Massachusetts
business trust and is registered under the Investment Company Act of 1940, as
amended, as an open-end management investment company
(2) Significant Accounting Policies
Investment Valuations - Equity securities listed on securities exchanges or
reported through the NASDAQ system are valued at last sale prices. Unlisted
equity securities or listed equity securities for which last sale prices are not
available are valued at last quoted bid prices. Short-term obligations, which
mature in 60 days or less, are valued at amortized cost, which approximates
market value.
Foreign Currency Translation - Investment valuations, other assets, and
liabilities initially expressed in foreign currencies are converted each
business day into U.S. dollars based upon current exchange rates. Purchases and
sales of foreign investments and income and expenses are converted into U.S.
dollars based upon currency exchange rates prevailing on the respective dates of
such transactions. Gains and losses attributable to foreign currency exchange
rates on sales of securities are recorded for financial statement purposes as
net realized gains and losses on investments. Gains and losses attributable to
foreign exchange rate movements on income and expenses are recorded for
financial statement purposes as foreign currency transaction gains and losses.
That portion of both realized and unrealized gains and losses on investments
that results from fluctuations in foreign currency exchange rates is not
separately disclosed.
Deferred Organization Expenses - Costs incurred by each Fund in connection with
its organization have been deferred and are being amortized on a straight-line
basis over a five-year period beginning on the date of commencement of
operations of the Fund.
Investment Transactions and Income - Investment transactions are recorded on the
trade date. Interest income is recorded on the accrual basis. All premium and
original issue discount are amortized or accreted for both financial statement
and tax reporting purposes as required by federal income tax regulations.
Dividend income is recorded on the ex-dividend date for dividends received in
cash. Dividend and interest payments received in additional securities are
recorded on the ex-dividend or ex-interest date in an amount equal to the value
of the security on such date.
Fees Paid Indirectly - Each Fund's custodian bank calculates its fee based on
the Fund's average daily net assets. The fee is reduced according to a fee
arrangement, which provides for custody fees to be reduced based on a formula
developed to measure the value of cash deposited with the custodian by the Fund.
This amount is shown as a reduction of expenses on the Statement of Operations.
Tax Matters and Distributions - The Trust'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. Each Fund files a tax
return annually using tax accounting methods required under provisions of the
Code which may differ from generally accepted accounting principles, the basis
on which these financial statements are prepared. Accordingly, the amount of net
investment income and net realized gain reported on these financial statements
may differ from that reported on the Fund's tax return and, consequently, the
character of distributions to shareholders reported in the financial highlights
may differ from that reported to shareholders on Form 1099-DIV. Foreign taxes
have been provided on interest and dividend income earned on foreign investments
in accordance with the applicable country's tax rates and, to the extent
unrecoverable, are recorded as a reduction of investment income. Distributions
to shareholders are recorded on the ex-dividend date.
<PAGE>
Notes to Financial Statements - (Unaudited) - continued
Each Fund distinguishes between distributions on a tax basis and a financial
reporting basis and requires that only distributions in excess of tax basis
earnings and profits are reported in the financial statements as a return of
capital. Differences in the recognition or classification of income between the
financial statements and tax earnings and profits which result in temporary
over-distributions for financial statement purposes, are classified as
distributions in excess of net investment income or accumulated net realized
gains.
(3) Transactions with Affiliates
Investment Adviser - The Funds have 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, computed daily and paid monthly at an effective annual rate of
0.75% of average daily net assets for MFS Institutional International Equity
Fund and 0.60% of average daily net assets for MFS Institutional Mid-Cap Growth
Equity Fund.
Under a temporary expense reimbursement agreement with MFS, MFS has voluntarily
agreed to pay all of the Fund's operating expenses, exclusive of management and
distribution fees. The Funds in turn will pay MFS an expense reimbursement fee
not greater than 0.20% of average daily net assets for MFS Institutional
International Equity Fund and 0.15% of average daily net assets for MFS
Institutional Mid-Cap Growth Equity Fund. To the extent that the expense
reimbursement fee exceeds the Fund's actual expenses, the excess will be applied
to amounts paid by MFS in prior years. At April 30, 1996, the aggregate
unreimbursed expenses owed to MFS by the Funds amounted to:
Mid-Cap
International Growth
Equity Equity
Fund Fund
----------------- ---------------
$24,466 $31,005
Each Fund pays no compensation directly to its Trustees who are officers of the
investment adviser, or to officers of each Fund, all of whom receive
remuneration for their services to each Fund from MFS. Certain of the officers
and Trustees of the Fund are officers or directors of MFS and MFS Service
Center, Inc. (MFSC).
Shareholder Servicing Agent - MFSC, a wholly owned subsidiary of MFS, earns a
fee for its services as shareholder servicing agent. The fee is calculated as a
percentage of the average daily net assets of each Fund at an effective annual
rate of 0.0075%.
(4) Portfolio Securities
Purchases and sales of investments, other than purchased option transactions and
short-term obligations, were as follows:
Mid-Cap
International Growth
Equity Equity
Fund Fund
- --------------------------------- ----------------- ----------------
Purchases
U.S. government
securities $ -- $ --
================= ================
Investments (non-U.S.
government securities) $ 2,248,727 $ 8,449,154
================= ================
Sales
U.S. government
securities $ -- $ --
================= ================
Investments (non-U.S.
government securities) $ 74,398 $ 887,213
================= ================
<PAGE>
Notes to Financial Statements - (Unaudited) - continued
The cost and unrealized appreciation or depreciation in value of the investments
owned by the Funds, as computed on a federal income tax basis, are as follows:
Mid-Cap
International Growth
Equity Equity
Fund Fund
- ---------------------------------
================= ================
Aggregate cost $ 2,274,329 $ 12,722,267
================= ================
Gross unrealized
appreciation $ 142,900 $ 448,047
Gross unrealized
depreciation (23,412) (94,129)
----------------- ----------------
Net unrealized
appreciation $ 119,488 $ 353,918
================= ================
5) Shares of Beneficial Interest
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in Fund shares were as follows:
International Mid-Cap
Period Ended Equity Growth Equity
April 30, Fund Fund
------------------------- -------------------
1996* Shares Amount Shares Amount
- ---------------------------------
========================= ===================
Shares sold 227,905 $2,288,536 731,884 $7,963,442
========================= ===================
* For the period from the commencement of investment operations, January 30,
1996 and December 28, 1995, respectively, to April 30, 1996.
(6) Line of Credit
The Trust entered into an agreement which enables each of the Funds to
participate with other funds managed by MFS in an unsecured line of credit with
a bank which permits borrowings up to $350 million, collectively. Borrowings may
be made to temporarily finance the repurchase of Fund shares. Interest is
charged to each fund, based on its borrowings, at a rate equal to the bank's
base rate. In addition, a commitment fee, based on the average daily unused
portion of the line of credit, is allocated among the participating funds at the
end of each quarter. The commitment fee allocated to International Equity Fund
and Mid-Cap Growth Equity Fund was $9 and $14, respectively.
(7) Restricted Securities
The Fund may invest not more than 15% of its net assets in securities which are
subject to legal or contractual restrictions on resale. At April 30, 1996, the
International Equity Fund and Mid-Cap Growth Equity Fund owned the following
restricted securities (consisting of 2.82% and 0.36% of net assets,
respectively) which may not be publicly sold without registration under the
Securities Act of 1933 (the 1933 Act). The International Equity Fund and Mid-Cap
Growth Equity Fund do not have the right to demand that such securities be
registered. The value of these securities is determined by valuations supplied
by a pricing service or brokers or, if not available, in good faith by or at the
direction of the Trustees. All of these securities may be offered and sold to
"qualified institutional buyers" under Rule 144A of the 1933 Act.
Date of
Description Acquisition Shares Cost Value
International Alsons Cement Corp. 2/23-4/29/96 34,000 $14,697 $15,958
Equity Fund Cosco Pacific Ltd. 2/13-4/09/96 34,000 27,173 23,957
Korea Mobile Tel. Corp. 2/23-4/29/96 500 23,500 28,500
=======
$68,415
=======
Mid-Cap Growth
Equity Fund
Loewen Group 3/13/96 1,000 $28,727 $30,109
=======
