NAVELLIER SERIES FUND, 485APOS, 1997-04-30

NAVELLIER SERIES FUND
485APOS, 1997-04-30

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<PAGE>

As filed with the Securities and Exchange Commission on April 30, 1997
1933 Act File No. 33-64010
1940 Act File No. 811-7768

- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 8
AND
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 10

THE MFS SERIES TRUST
(FORMERLY KNOWN AS THE NAVELLIER SERIES FUND)
(Exact Name of Registrant as Specified in Charter)

500 Boylston, Street, Boston, Massachusetts 02116
(Address of Principal Executive Offices)

Registrant's Telephone Number, Including Area Code: 617-954-5000
Stephen E. Cavan, Massachusetts Financial Services Company
500 Boylston Street, Boston, Massachusetts 02116
(Name and Address of Agent for Service)

APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
It is proposed that this filing will become effective (check appropriate box)

/ / immediately upon filing pursuant to paragraph (b)
/ / on [DATE] pursuant to paragraph (b)
/X/ 60 days after filing pursuant to paragraph (a)(i)
/ / on [DATE] pursuant to paragraph (a)(i)
/ / 75 days after filing pursuant to paragraph (a)(ii)
/ / on [DATE] pursuant to paragraph (a)(ii) of rule 485.

If appropriate, check the following box:
/ / this post-effective amendment designates a new effective date for a
previously filed post-effective amendment

Pursuant to Rule 24f-2, the Registrant has registered an indefinite number of
its shares of Beneficial Interest (without par value), under the Securities Act
of 1933. The Registrant filed a Rule 24f-2 Notice with respect to its fiscal
year ended December 31, 1996 on February 28, 1997.

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<PAGE>

THE MFS SERIES TRUST
(FORMERLY KNOWN AS THE NAVELLIER SERIES FUND)

on Behalf of

MFS-Registered Trademark- AGGRESSIVE SMALL CAP EQUITY FUND
(FORMERLY KNOWN AS THE NAVELLIER AGGRESSIVE SMALL CAP EQUITY PORTFOLIO)

CROSS REFERENCE SHEET

(Pursuant to Rule 404 showing location in Prospectus and/or Statement of
Additional Information of the responses to the Items in Parts A and B of Form
N-1A)

<TABLE>
<CAPTION>
ITEM NUMBER STATEMENT OF
FORM N-1A, PART A PROSPECTUS CAPTION ADDITIONAL INFORMATION
- ----------------- ------------------ ----------------------
<S> <C> <C>
1 (a), (b) Front Cover Page *

2 (a) Expense Summary *

(b), (c) * *

3 (a) Financial Highlights *

(b) * *

(c), (d) Performance & Yield Calculation of Performance Data

4 (a) Front Cover Page; Fund Highlights - *
The Fund; Fund Highlights -
Investment Objective; Fund -
Highlights - Investing in Securities
of Foreign Issuers; Investment
Objective and Policies; Special
Investment Methods and Risks -
"Short Sales Against the Box"

(b) Investment Restrictions; *

<PAGE>

<CAPTION>
ITEM NUMBER STATEMENT OF
FORM N-1A, PART A PROSPECTUS CAPTION ADDITIONAL INFORMATION
- ----------------- ------------------ ----------------------
<S> <C> <C>

5 (a) Management of the Fund - Board *
of Trustees; Management of the Fund -
The Adviser

(b), (d), (e) Front Cover Page; Special Considerations; *
Fund Highlights - Investment Adviser;
Management of the Fund - The Adviser;
Back Cover Page

(f) Management of the Fund - The Custodian and *
the Transfer Agent; Back Cover Page

(g) Expense Summary; Expenses of the *
Fund - General

(h) Information Concerning Shares of *
the Fund - Expenses

5A (a), (b), (c) ** **

6 (a) Description of Shares; *
Redemption of Shares

(b), (c), (d) * *

(e) Reports and Information; *
Back Cover Page

(f) Dividends and Distribution *

(g) Taxes *

(h) * *

7 (a) Front Cover Page; Management of *
the Fund - the Distributor; Back Cover
Page

<PAGE>

<CAPTION>
ITEM NUMBER STATEMENT OF
FORM N-1A, PART A PROSPECTUS CAPTION ADDITIONAL INFORMATION
- ----------------- ------------------ ----------------------
<S> <C> <C>

(b) Purchase and Pricing of Shares *

(c) Special Considerations; Purchase *
and Pricing of Shares; Certain
Services Provided to Shareholders -
Dividend Election; Terms Applicable
to Letter of Intent

(d) Fund Highlights - How to Invest; *
Purchase and Pricing of Shares

(e), (f), (g) * *

8(a), (b), (c), (d) Redemption of Shares *

Information Concerning Shares of *
the Fund - Redemptions and
Repurchases

9 * *

<PAGE>

<CAPTION>
ITEM NUMBER STATEMENT OF
FORM N-1A, PART B PROSPECTUS CAPTION ADDITIONAL INFORMATION
- ----------------- ------------------ ----------------------
<S> <C> <C>

10 (a), (b) * Front Cover Page

11 * Front Cover Page

12 * *

13 (a), (b), (c) * Investment Objective,
and Policies

(d) * *

14 (a), (b) * Trustees and Officers of the Fund

15 (a) * Control Persons and Principal
Holders of Securities

(b), (c) * Trustees and Officers of the Fund

16 (a), (b) Special Considerations; Adviser, Distributor, Custodian
Management of the Fund - and Transfer Agent
The Adviser

(d) * Adviser, Distributor, Custodian
and Transfer Agent

(e) * Brokerage Allocation and Other
Practices

(f) Dividends and Distributions Adviser, Distributor, Custodian
and Transfer Agent

(g) * *

(h) Independent Auditors and Adviser, Distributor, Custodian
Financial Statements and Transfer Agent; Independent
Auditors and Financial Statements

<PAGE>

<CAPTION>
ITEM NUMBER STATEMENT OF
FORM N-1A, PART B PROSPECTUS CAPTION ADDITIONAL INFORMATION
- ----------------- ------------------ ----------------------
<S> <C> <C>

(i) * Adviser, Distributor, Custodian
and Transfer Agent

17 (a), (b), (c) * Brokerage Allocation and Other
(d), (e) Practices

18 (a) * Capital Stock and Other Securities

(b) * *

19 (a), (b) * Purchase, Redemption, and Pricing
of Shares

20 * Taxes

21 (a), (b) Adviser, Distributor, Custodian
and Transfer Agent
(c) * *

22 (a) * *

(b) * Calculation of Performance Data

23 * Independent Auditors and Financial
Statements

</TABLE>
- --------------------------
* Not Applicable
** Contained in Annual Report
<PAGE>

PROSPECTUS

THE MFS-REGISTERED TRADEMARK- AGGRESSIVE SMALL CAP EQUITY FUND MAY 1, 1997

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The MFS-Registered Trademark- Aggressive Small Cap Equity Fund (the "Fund")
is a diversified series of The MFS Series Trust (the "Trust"), an open-end
management investment company. The sole objective of the Fund is to seek to
achieve long-term growth of capital primarily through investments in stocks of
small cap companies (companies with market capitalization of less than one
billion dollars) with appreciation potential.

Massachusetts Financial Services Company ("MFS" or the "Adviser") is the
Fund's investment adviser and administrator, and MFS Fund Distributors, Inc.
("MFD") is the Fund's distributor. Prior to March 16, 1997 Navellier Management,
Inc. ("Navellier Management" or the "Prior Adviser") was the Fund's investment
adviser and administrator and Navellier Securities Corp. ("Navellier
Securities") was the Fund's distributor. The investment advisory agreement
pursuant to which MFS provides advisory services to the Fund will be submitted
for approval by Fund shareholders at a special shareholders' meeting called for
that purpose on or prior to July 14, 1997. See "Special Considerations."
Rushmore Trust and Savings, FSB is the Fund's transfer agent and custodian
(referred to as the "Transfer Agent" or the "Custodian," as appropriate).

This Prospectus sets forth concisely the information about the Fund that a
prospective investor should know before investing and should be read and
retained for future reference. A Statement of Additional Information ("SAI")
about the Fund has been filed with the Securities and Exchange Commission and is
available upon request and without charge by calling or writing MFS Service
Center, Inc., 500 Boylston St., Boston, MA 02116, telephone: (800) 225-2606. The
SAI bears the same date as this Prospectus and is incorporated by reference into
this Prospectus in its entirety.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

No dealer, salesman, or other person has been authorized to give any
information or to make any representations, other than those contained in this
Prospectus, and, if given or made, such other information or representations
must not be relied upon as having been authorized by the Fund, its investment
adviser, or its distributor. This Prospectus does not constitute an offer to buy
any of the securities offered hereby in any state to any person to whom it is
unlawful to make such an offer in such state.

<PAGE>

<TABLE>
<S> <C>
Expense Summary__________________________________________________ 2
Special Considerations___________________________________________ 3
Financial Highlights_____________________________________________ 4
Fund Highlights__________________________________________________ 5
Investment Objective and Policies________________________________ 7
Special Investment Methods and Risks_____________________________ 8
Investment Restrictions__________________________________________ 9
Risk Factors_____________________________________________________ 10
Performance______________________________________________________ 11
Management of the Fund___________________________________________ 11
Expenses of the Fund_____________________________________________ 13
Reports and Information__________________________________________ 14
Description of Shares____________________________________________ 14
Dividends and Distributions______________________________________ 15
Taxes____________________________________________________________ 16
Purchase and Pricing of Shares___________________________________ 17
Redemption of Shares_____________________________________________ 22
Certain Services Provided to Shareholders________________________ 24
Additional Information___________________________________________ 24
Assent to Trust Instrument_______________________________________ 24
Terms Applicable to Letter of Intent_____________________________ 24
</TABLE>

<PAGE>

EXPENSE SUMMARY

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<TABLE>
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases 3%
(as a percentage of offering price)(1)
Maximum Sales Load Imposed on Reinvested
Dividends None
Redemption Fees None

ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets)
Management Fees 1.25%
Other Expenses
Administrative Fee 0.25%
Other (after expense limitation)(2) 0.25%
TOTAL FUND OPERATING EXPENSES (after expense
limitation)(2) 1.75%
</TABLE>

(1) The sales load is reduced to 2-1/2% for purchases between $25,000 and
$49,999.99, 2% for purchases between $50,000 and $74,999.99, 1-1/2% for
purchases between $75,000 and $99,999.99, and 1% for purchases of $100,000 or
more. There is no sales load for purchases of $1 million or more, or for
Trustees of the Fund, the Adviser, the Distributor, the Transfer Agent, the
Custodian, retirement or deferred compensation plans and trusts used to fund
such plans, or the employees of any of the above. There is no sales load for
brokers or their employees directly involved in selling the Fund's shares and
whose firm has executed a selling agreement with the Distributor. There is no
sales load on accounts as to which an investment adviser, financial planner,
agent, bank or broker-dealer that charges an account management or transaction
fee ("wrap accounts") receives a transaction fee as part of a "wrap fee"
account, provided the investment advisor, financial planner, agent, bank or
broker-dealer has an agreement with the Distributor; there is no sales load for
the spouse or child of any of the above. (See also "Reduced Sales Charges").

(2) The Adviser has agreed to bear the Fund's normal operating expenses which
accrue on and after March 16, 1997, subject to reimbursement by the Fund, such
that "Total Fund Operating Expenses" do not exceed 1.75% per annum of the Fund's
average daily net assets during the current fiscal year; otherwise, "Other
Expenses," excluding the "Administrative Fee," and "Total Operating Expenses"
are estimated to be 0.36% and 1.86% per annum, respectively, based on the Fund's
average daily net assets for the fiscal year ended December 31, 1996. If this
arrangement had not been in place for the Fund's fiscal year ended December 31,
1996, and the Fund's average daily net assets were $80 million (based on the
Fund's approximate net assets as of April 15, 1997) the Fund's "Other Expenses,"
excluding the "Administrative Fee," and "Total Fund Operating Expenses" are
estimated to be 0.705% and 2.205% per annum, respectively. See "Special
Considerations" and "Expenses of the Fund."

EXAMPLES: The following example indicates the direct and indirect expenses an
investor (maintaining an average annual investment of $1,000) could expect to
incur in a one-year, three-year, five-year and ten-year period, respectively:

<TABLE>
<S> <C> <C> <C>
One-Year______ $ 47 Five-Year_____ $ 122
Three-Year____ $ 83 Ten-Year______ $ 230
</TABLE>

The foregoing example assumes (a) that an investor maintains an average of
$1,000 invested in the Fund; (b) payment of the maximum 3% sales load, (c) a 5%
annual return; (d) percentage amounts listed above for Annual Fund Operating
Expenses remain constant (for all periods shown above); and (e) reinvestment of
all dividends and distributions. The purpose of the expense table is to assist
investors in understanding the various costs and expenses that a shareholder
will bear directly or indirectly.

THE EXAMPLE SHOWN ABOVE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES OF THE FUND MAY BE GREATER OR LESS THAN THOSE
SHOWN ABOVE.

2
<PAGE>

SPECIAL CONSIDERATIONS

- -------------------------------------------------------

CHANGE IN FUND'S INVESTMENT ADVISER, ADMINISTRATOR AND DISTRIBUTOR

On March 16, 1997, MFS commenced providing investment advisory and
administrative services to the Fund, and MFD commenced providing distribution
services to the Fund. Prior to that date, Navellier Management provided
investment advisory and administrative services to the Fund and Navellier
Securities provided distribution services to the Fund.

At a meeting held on March 13, 1997, the Board of Trustees which oversees
the Fund (the "Board") decided not to renew the Fund's contractual arrangements
with Navellier Management and Navellier Securities but instead to retain MFS and
MFD. The Board has removed representatives of Navellier Management and Navellier
Securities from all positions with the Trust and the Fund.

SUBSEQUENT SHAREHOLDER APPROVAL

Pursuant to the requirements of applicable law, the Fund's investment
advisory agreement with MFS will be submitted for approval by Fund shareholders
(the "MFS Advisory Agreement Proposal") at a special shareholders' meeting
called for that purpose on or prior to July 14, 1997. If this proposal is
approved by Fund shareholders, MFS anticipates that the investment advisory fee
and administrative services fee paid by the Fund to MFS would be lowered at that
time from 1.25% per annum and 0.25% per annum, respectively, to approximately
0.75% per annum and 0.015% per annum, respectively, for a total reduction of
approximately 0.735% per annum.

If the proposal is not approved by Fund shareholders, the Board would then
decide what action would be appropriate to serve the shareholders' best
interests.

OTHER CONSIDERATIONS

MFS has agreed to bear the Fund's normal operating expenses which accrue on
and after March 16, 1997, subject to reimbursement by the Fund, such that the
Fund's total operating expenses do no exceed 1.75% per annum of the Fund's
average daily net assets during the current fiscal year. This expense limitation
arrangement does not cover extraordinary Fund expenses, such as
litigation-related expenses, or any expenses which were borne or accrued prior
to March 16, 1997. Under an agreement between the Fund and Navellier Management
relating to the payment of the Fund's operating expenses, Navellier Management
may be able to seek reimbursement for operating expenses of the Fund paid by
Navellier Management on behalf of the Fund during the period commencing January
1, 1997 through March 15, 1997. The amount of this possible reimbursement, if
any, has not been determined as of the date of this Prospectus.

Two of the former trustees of the Trust, Louis G. Navellier and Alan Alpers,
have brought two legal actions in federal district court against two of the
Trust's sitting trustees, Donald A. Simon and Kenneth Sletten, one seeking to
prevent the removal of Messrs. Navellier and Alpers as trustees of the Trust and
the other seeking to prevent the Fund from conducting the shareholders meeting
to approve the Fund's investment advisory agreement with MFS. While the first
legal action was dismissed by the court, the second legal action remains
pending. The Trust has entered into indemnification agreements with members of
the Board of Trustees which provide that the Trust will indemnify and hold
harmless the Trustees against any claim by any of

3
<PAGE>

the Fund's shareholders for any error of judgment or mistake of law or fact, for
any act or omission by the Trustees, or for any losses sustained by the Trustees
or the Fund's shareholders except to the extent that the Trustees have engaged
in willful misfeasance, bad faith, gross negligence or reckless disregard of
their obligations. While the Trust has a Directors' and Officers' Errors and
Omissions Liability Insurance Policy (the "Insurance Policy"), the deductible
under the Insurance Policy is $250,000. Expenses up to the amount of the
deductible incurred in defending these legal actions will be borne by the Fund,
and expenses exceeding the amount of the deductible will be borne by the Fund if
the claims made in these legal actions are not covered by the Fund's Insurance
Policy (however, the Fund believes that these claims are so covered).

Due to these litigation expenses and the possibility that Navellier
Management may seek reimbursement from the Fund of operating expenses paid by
Navellier Management on behalf of the Fund during the period commencing January
1, 1997 and ending on March 15, 1997 (or thereafter), the Fund's "Total
Operating Expenses" may exceed 1.75%, as set forth under the "Expense Summary"
above. Assuming that the Fund incurs $250,000 in litigation-related expenses on
account of the claims discussed above (I.E., the amount of the deductible under
the Insurance Policy), the Fund's "Total Operating Expenses" for its current
fiscal year are estimated to be 2.205% per annum at the current levels of the
Fund's management fee (1.25% per annum) and administrative services fee (0.25%
per annum), and are estimated to be 1.78% per annum assuming shareholder
approval of the Fund's investment advisory agreement with MFS and the reductions
in the Fund's management fee (to 0.75% per annum) and administrative services
fee (to 0.015% per annum) discussed above. These estimated expense ratios are
based upon the Fund's net assets of $80 million as of April 15, 1997.

4
<PAGE>

FINANCIAL HIGHLIGHTS

- -------------------------------------------------------

The following audited financial highlights shows the per share income and
capital changes for an outstanding share of the Fund for the fiscal years ended
December 31, 1996 and December 31, 1995 and for the period ended December 31,
1994. As noted under "Special Considerations" above, Navellier Management served
as the Fund's investment adviser during this period. The information in the
table should be read in conjunction with the financial statements included in
the Fund's Annual Report to shareholders which are incorporated by reference
into the SAI in reliance upon the report of the Fund's independent auditors
given upon their authority, as experts in accounting and auditing. The Fund's
current independent auditors are Deloitte & Touche LLP.

<TABLE>
<CAPTION>
For the For the For the
Year Ended Year Ended Period Ended
December 31, December 31, December 31,
1996 1995 1994*
---------------- ---------------- ----------------
<S> <C> <C> <C>
Per Share Operating Performance:
Net Asset Value--Beginning of Period $ 15.41 $ 10.98 $ 10.00
-------- -------- -------
Net Investment Loss (0.23) (0.16) (0.08)
Net Realized and Unrealized Gains on Securities 2.61 4.97 1.06
-------- -------- -------
Net Increase in Net Asset Value Resulting from
Operations 2.38 4.81 0.98
Distributions to Shareholders:
From Net Investment Income
----- ----- -----
From Net Realized Capital Gains (0.38)
----- -----
--------
-------- -------
Net Increase in Net Asset Value 2.38 4.43 0.98
-------- -------- -------
Net Asset Value--End of Period $ 17.79 $ 15.41 $ 10.98
-------- -------- -------
-------- -------- -------

Total Investment Return(1) 15.44% 43.80% 9.80%

Ratios to Average Net Assets:
Expenses After Reimbursement(2) 1.75% 1.75% 1.68%**
Expenses Before Reimbursement (Note 2)(2) 1.86% 2.10% 4.52%**
Net Investment Loss (1.33%) (1.15%) (0.81%)

Supplementary Data:
Portfolio Turnover Rate 136.9% 169.6% 139.9%
Number of Shares Outstanding at End of Period
(000s omitted) 10,683 6,831 1,660

Net Assets at End of Year (000s omitted) $190,035 $105,299 $18,224
Average Commission Rate Paid(3) $ 0.0424
</TABLE>

4
<PAGE>
(1) Total returns do not include the maximum sales load. Total returns for
periods of less than one year are not annualized.

(2) Under an agreement between the Fund and the Prior Adviser related to
payment of operating expenses, the Prior Adviser has reserved the right to seek
reimbursement for the past, present and future operating expenses of the Fund
paid by the Prior Adviser, at any time upon notice to the Fund. At December 31,
1995, the prior adviser voluntarily agreed not to seek future reimbursement of
all unreimbursed past expenses of the Fund. During the year ended December 31,
1996, the Prior Adviser paid operating expenses of the Fund totaling $660,374.
Under the operating expense agreement, the Prior Adviser requested, and the Fund
reimbursed, $464,738 of such expenses. The Prior Adviser voluntarily agreed not
to seek future reimbursement of $195,636 of such 1996 expenses. Accordingly, at
December 31, 1996, there were no prior expenses which could be reimbursed in the
future under the agreement.

(3) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for security trades
on which commissions are charged. This amount may vary from period to period and
fund to fund depending on the mix of trades executed in various markets where
trading practices and commission rate structures may differ.

- ------------------------

* From Commencement of Operations January 3, 1994.

** Annualized

FUND HIGHLIGHTS
- -------------------------------------------------------

THE FUND

The Fund is a diversified series of the Trust, an open-end management
investment company organized as a business trust under the laws of the State of
Delaware on May 28, 1993.

INVESTMENT OBJECTIVE

The Fund invests in securities traded in the United States securities
markets of domestic issuers and of foreign issuers. The sole objective of the
Fund will be to seek to achieve long-term growth of capital primarily through
investments in stocks of small cap companies (companies with market
capitalization of less than one billion dollars) with appreciation potential.
There can be no assurance that the Fund will achieve its investment objective.
The Fund's investment objective may not be changed without shareholder approval.
The Fund should not be considered suitable for investors seeking current income.

INVESTMENT ADVISER

The Fund has retained MFS to provide it with a continuous investment
program, including investment research and management with respect to all
securities and investments. The Adviser will determine from time to time what
securities and other investments will be selected and purchased, retained, or
sold by the Fund. MFS receives an annual fee, equal to 1.25% of the value of
assets under management for the Fund, payable monthly, based upon a percentage
of the Fund's average daily net assets. The advisory fees paid by the Fund to
the Adviser are higher than those paid by most other investment companies. MFS
also receives an annual administrative fee of 0.25% of the value of assets under
management.

5
<PAGE>
DISTRIBUTION OF SHARES

MFD acts as the sole distributor of the Fund's shares and also serves as
distributor for each of the other funds in the MFS Family of Funds. It is a
wholly owned subsidiary of MFS, the Fund's Adviser. The Distributor may sell
shares of the Fund directly to investors or through a network of broker-dealers
selected by the Distributor. The Distributor will compensate these selected
dealers by paying them directly or allowing them to receive directly from the
investor some or all of the sales charge paid by the Fund investors.

HOW TO INVEST

Shares of the Fund are available for purchase through selected
broker-dealers. The Fund was closed to new investors after April 15, 1996.
Existing shareholders and mutual fund wrap fee advisers, financial advisers and
planners have been able to continue to purchase additional shares after April
15, 1996. The Fund may resume sales to new investors at some future date.

The daily public offering price for shares is the net asset value per share
next computed after receipt of your order plus the sales charge. As described in
the foregoing table (see "Expense Summary"), the Fund has a sliding sales charge
beginning at 3% on initial investments of between $2,000 and $24,999.99. The
sales charge is incrementally reduced to 1% on purchases of $100,000 or more. No
sales charge is charged on investments of $1 million or more, or to Trustees of
the Fund, the Adviser, the Distributor, the Transfer Agent, the Custodian, their
employees, or a retirement plan or deferred compensation plan and trust to fund
such plan; or to brokers directly involved in selling the Fund's shares and
whose firm has executed a selling agreement with the Distributor, or their
employees; or on purchases through accounts as to which an investment advisor,
financial planner, agent, banker or broker-dealer charges an account management
or transaction fee as part of a "wrap fee", provided the investment advisor,
financial planner, agent, bank or broker-dealer has an agreement with the
Distributor; or the spouse or child of any of the above. (See also "Reduced
Sales Charges".) The sales charge is paid at the time of the investor's
purchase. Initial purchases must be at least $2,000 ($500 in the case of IRA and
other retirement plans or qualifying group plans) and subsequent investments
must be $100 or more. Investments in the Fund can be made through selected
securities dealers (who have the responsibility to transmit orders promptly and
may charge a fee for the purchase or redemption of Fund shares), or through the
transfer agent, Rushmore Trust and Savings, FSB. (See "Purchase and Pricing of
Shares"). Investors can also invest in the Fund by completing an application
authorizing the transfer agent to transfer funds automatically every month from
the investor's checking account to the Fund for purchase of Fund shares for the
investor's account.

REDEMPTION OF SHARES

On any day the Fund and the stock exchanges are open for business the shares
will be redeemed at the next determined net asset value per share after receipt
of the redemption order. Redemption orders received after 4:00 p.m. E.S.T. will
be given the next days' net asset value.

If the investor requests payment of redemptions to a third party or to a
location other than his/her address of record listed on the account application,
the request must be in writing and the investor's signature must be guaranteed
by an eligible bank, broker, dealer, credit union, national securities exchange,
registered securities association, clearing agency or savings association.

6
<PAGE>

The Fund will redeem its shares in cash at a redemption price equal to their
net asset value as next computed following the receipt of a request for
redemption. Payment for the redemption price will be made within seven days
after the Fund's receipt of the request for redemption. For investments that
have been made by check, payment on withdrawal requests may be delayed only
until such time as it is reasonably necessary to assure that good payment has
been collected for the purchase of such shares which may be up to fifteen (15)
days from purchase date. This delay is necessary to assure the Fund that
investments made by check are good funds. The proceeds of the redemption will be
forwarded promptly upon confirmation of receipt of good funds.

The right of redemption may also be suspended, or the date of payment
postponed, (a) for any period during which the New York Stock Exchange is closed
(other than customary weekend or holiday closings); or (b) when trading on the
Exchange is restricted, or an emergency exists, as determined by the Securities
and Exchange Commission, so that disposal of the Fund's investments or
determination of net asset value is not reasonably practical; or (c) for such
other periods as the Commission, by order, may permit for protection of the
Fund's investors.

INVESTING IN SECURITIES OF FOREIGN ISSUERS

Investments in foreign securities, particularly those of non-governmental
issuers, involve considerations which are not ordinarily associated with
investing in domestic issuers. These considerations include, among others,
changes in currency rates, currency exchange control regulations, the
possibility of expropriation, the unavailability of financial information, the
difficulty of interpreting financial information prepared under laws applicable
to foreign securities markets, the impact of political, social, or diplomatic
developments, difficulties in invoking legal process abroad, and the difficulty
of assessing economic trends in foreign countries.

While to some extent the risks to the Fund of investing in foreign
securities may be limited, since the Fund may not invest more than 25% of its
total net assets in such securities and the Fund may only invest in foreign
securities which are traded in the United States securities markets, the risks
nonetheless exist.

INVESTMENT OBJECTIVE AND POLICIES

- -------------------------------------------------------

The investment objective of the Fund is to achieve long-term growth of
capital primarily through investments in stocks of companies with appreciation
potential.

The Fund will invest primarily in the common stock of small cap companies
(companies with market capitalization of less than one billion dollars) believed
by the Adviser to have appreciation potential. This Fund should not be
considered suitable for investors seeking current income. Since no one class or
type of security necessarily affords the greatest promise for capital
appreciation at all times, the Fund may invest up to 35% of its assets in
non-small cap securities of any issuer believed by the Adviser to offer
potential for capital appreciation over both the intermediate and long term.
Under normal circumstances, the Fund will invest at least 65% of its total
assets in small cap equities. However, that projected minimum percentage could
be temporarily lowered during adverse market conditions. Equity securities
include, but are not limited to, common and preferred stock, and preferred
stocks that are convertible into common stock.

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<PAGE>

The Fund may also invest in debt securities and money market instruments if,
in the opinion of the Adviser, such investment will further the investment
objective of the Fund. In addition, for temporary defensive purposes, the Fund
may retain cash or invest all or any portion of its assets in cash equivalents.
The Fund's holdings in such non-equity, non-small cap securities will not exceed
35% of the total assets of the Fund. If the Fund's assets or a portion thereof
are retained in cash, such cash will, in all probability, be deposited in
short-term commercial paper.

It is anticipated that all of the Fund's investments in corporate debt
securities (other than commercial paper) and preferred stocks will be
represented by debt securities and preferred stocks which have, at the time of
purchase, a rating within the four highest grades as determined by Moody's
Investors Service, Inc. (Aaa, Aa, A, Baa) or Standard & Poor's Corporation (AAA,
AA, A, BBB). Although investment-quality securities are subject to market
fluctuations, the risk of loss of income and principal is generally expected to
be less than with lower quality securities. In the event the rating of a debt
security or preferred stock in which the Fund has invested drops below
investment grade, the Fund will promptly dispose of such investment.

The Fund invests primarily in undervalued common stocks believed to have
long-term growth potential. Stocks are selected on the basis of an evaluation of
factors such as earnings growth, expanding profit margins, market dominance
and/or factors that create the potential for market dominance, sales growth, and
other factors that indicate a company's potential for growth.

There are no limitations on the type or dividend paying record of small
capitalization companies or industries in which the Fund may invest, the
principal criteria for investment being that the securities provide
opportunities for capital growth. The Fund will invest up to 100% of its capital
in equity securities selected for their capital growth potential.

The Adviser will typically (but not always) purchase common stocks of
issuers which have records of profitability and strong earnings momentum. Such
companies are likely to be lesser known companies moving from a lower to a
higher market share position within their industry groups rather than the
largest and best known companies in such groups. The Adviser may, however,
purchase common stocks of well known, highly researched, large companies if it
believes such common stocks offer opportunity for long-term capital growth.
Investments in such large company stocks will not exceed 35% of the Fund's total
assets.

Diversification is a consideration in selecting investments for the Fund.
However, greater emphasis will be placed upon selection of securities believed
to have good potential for appreciation rather than upon wide diversification.

SPECIAL INVESTMENT METHODS AND RISKS
- -------------------------------------------------------

"SHORT SALES AGAINST THE BOX"

The Fund is permitted to make short sales if at the time of the short sale
the Fund owns or has the right to acquire a security equal in kind and amount to
the security being sold short, at no additional cost. This investment technique
is known as a "short sale against the box."

In a short sale, the seller does not immediately deliver the securities sold
and is said to have a short position in those securities until delivery occurs.
To make delivery to the purchaser, the

8
<PAGE>
executing broker borrows the securities being sold short on behalf of the
seller. While the short position is maintained, the seller collateralizes its
obligation to deliver the securities sold short in an amount equal to the
proceeds of the short sale plus an additional margin amount established by the
Board of Governors of the Federal Reserve. If the Fund engages in a short sale,
the collateral account will be maintained by the Fund's custodian. While the
short sale is open, the Fund will maintain, in a segregated custodial account,
an amount of securities equal in kind and amount to the securities sold short or
securities convertible into or exchangeable for such equivalent securities at no
additional cost. These securities would constitute the Fund's long position.

The Fund may make a short sale against the box, when it believes that the
price of a security may decline, causing a decline in the value of a security
owned by the Fund (or a security convertible into or exchangeable for such
security), or when the Fund desires to sell the security it owns at a current
attractive price, but also wishes to defer recognition of gain or loss for
federal income tax purposes and for purposes of satisfying certain tests
applicable to regulated investment companies under the Internal Revenue Code. In
such a case, any future losses in the Fund's long position should be reduced by
a gain in the short position. The extent to which such gains or losses are
reduced would depend upon the amount of the security sold short relative to the
amount the Fund owns. There will be certain additional transaction costs
associated with short sales against the box, but the Fund will endeavor to
offset these costs with income from the investment of the cash proceeds of short
sales.

Short sales of securities, other than "short sales against the box," will
not be permitted by the Fund.

INVESTMENT RESTRICTIONS
- -------------------------------------------------------

The Fund may not invest 25% or more of its total assets in any one industry.
The Fund may not make investments in real estate or commodities or commodity
contracts, including futures contracts, but may purchase securities of issuers
which deal in real estate or commodities. The Fund is also prohibited from
investing in or selling puts, calls, or straddles (or any combination thereof).
The Fund may borrow money only from banks for temporary or emergency (not
leveraging) purposes (provided that, after each borrowing, there is an asset
coverage of at least 300%). In order to secure any such borrowing, the Fund may
pledge, mortgage, or hypothecate up to 10% of the market value of the assets of
the Fund. The investment by the Fund in securities, including American
Depository Receipts, of issuers incorporated or organized, or any governmental
entity or political subdivision thereof, located outside of the United States is
limited to 25% of the net asset value of the Fund, provided that no

9
<PAGE>
such foreign securities may be purchased unless they are traded in United States
securities markets.

The Fund may not purchase "restricted securities" (as defined in Rule
144(a)(3) of the Securities Act of 1933) if, as a result of such purchase, more
than 10% of the net assets (taken at market value) of the Fund would be invested
in such securities, nor will the Fund invest in illiquid or unseasoned
securities if as a result of such purchase more than 5% of the net assets of the
Fund would be invested in either illiquid or unseasoned securities.

In addition to the investment restrictions described above, the investment
program of the Fund is subject to further restrictions which are described in
the SAI. The restrictions for the Fund are fundamental and may not be changed
without shareholder approval.

RISK FACTORS

- -------------------------------------------------------

INVESTING IN SECURITIES OF FOREIGN ISSUERS

While to some extent the risks to the Fund of investing in foreign
securities may be limited, since the Fund may not invest more than 25% of its
net asset value in such securities and the Fund may only invest in foreign
securities which are traded in the United States securities markets, the risks
nonetheless exist.

PORTFOLIO TURNOVER

The annual rate of portfolio turnover for the Fund was 136.9% for its fiscal
year ended December 31, 1996. The Fund does not generally intend to have a
portfolio turnover rate in excess of 100% per annum, however, given the
transition of management responsibilities from Navellier Management to MFS
discussed under "Special Considerations" above, the Fund expects its portfolio
turnover rate for its current fiscal year to be up to 200%. These anticipated
portfolio turnover rates are NOT restrictions on the Fund and if in the
Adviser's judgment a higher annual portfolio turnover rate is required in order
to attempt to achieve a higher overall performance then the Adviser is permitted
to do so. However, high portfolio turnover (100% or more) will result in
increased brokerage commissions, dealer mark-ups, and other transaction costs on
the sale of securities and on reinvestment in other securities, may result in
increased levels of capital gain distributions to shareholders and could
therefore adversely affect Fund performance and the level of taxable capital
gains received by shareholders. See "Taxes." To the extent that increased
portfolio turnover results in sales at a profit of securities held less than
three months, the Fund's ability to qualify as a "regulated investment company"
under the Internal Revenue Code may be affected. (See the SAI, "Taxes").

10
<PAGE>
SPECIAL RISK CONSIDERATIONS RELATING TO SECURITIES OF THE PORTFOLIO

For a description of certain other factors, including certain risk factors,
which investors should consider relating to the securities in which the Fund
will invest, see "Investment Objective and Policies."

PERFORMANCE

- -------------------------------------------------------

From time to time the Fund may include its performance history in
advertisements, sales literature, or reports to current or prospective
shareholders. Performance information about the Fund is based on its past
performance only and is not an indication of future performance. Performance
history may be expressed as yield or as total return of the Fund.

The "total return" of the Fund refers to the average annual compounded rate
of return over some representative period that would equate an initial payment
of $1,000 (after deduction of the maximum sales load) at the beginning of a
stated period to the ending redeemable value of the investment, after giving
effect to the reinvestment of all dividends and distributions and deductions of
expenses during the period. For more information about calculation of the
investment performance of the Fund, see the SAI. For further information about
the Fund's performance for the fiscal year ended December 31, 1996, please see
the Fund's Annual Report. A copy of the Annual Report may be obtained without
charge by contacting the MFS Service Center, Inc. (see back cover for address
and phone number).

MANAGEMENT OF THE FUND
- -------------------------------------------------------

THE BOARD OF TRUSTEES

The Trust's Board of Trustees directs the business and affairs of the Fund
as well as supervises the Adviser, Administrator, Distributor, Accountant,
Transfer Agent and Custodian, as described below.

THE ADVISER

The Adviser is responsible for selecting the securities which will
constitute the pool of securities which will be selected for investment.
Pursuant to a separate Administrative Services Agreement, the Adviser provides
the Fund with certain administrative services, including accounting and
bookkeeping services and supervising the Fund's compliance with its reporting
obligations. The Adviser may contract for the performance of such services to
the Custodian, Transfer Agent, or others, and may share some or all of its fee
with such other person(s). The Adviser also provides the Fund with a continuous
investment program for the Fund's portfolio, including investment research and
management with respect to all securities and investments. The Adviser will
determine from time to time what securities and other investments will be
selected to be purchased, retained, or sold by the Fund.

Since the inception of the Fund through March 15, 1997, Navellier Management
acted as the investment adviser and administrator of the Fund. On March 15,
1997, the investment advisory agreement and administrative services agreement
between the Trust and Navellier

11
<PAGE>

Management with respect to the Fund terminated due to the decision of the
Trust's Board of Trustees not to renew these agreements.

Effective March 16, 1997, the Trust entered into a new investment advisory
agreement and a new administrative services agreement with MFS. As noted under
"Special Considerations" above, the Fund's investment advisory agreement with
MFS will be submitted for approval by Fund shareholders at a special
shareholders' meeting called for that purpose on or prior to July 14, 1997.

John W. Ballen, a Senior Vice President of MFS and MFS' Chief Equity
Officer, is the Fund's portfolio manager. Mr. Ballen has been employed as a
portfolio manager by the Adviser since 1984.

MFS is America's oldest mutual fund organization and, together with its
predecessor organizations, has a history of money management dating from 1924
and the founding of the first mutual fund in the United States, Massachusetts
Investors Trust. MFS serves as the investment adviser to the MFS Family of Funds
and a number of closed-end funds, funds underlying insurance products and
offshore funds. As of March 31, 1997, net assets under management of the MFS
organization were approximately $51.5 billion on behalf of 2.4 million investor
accounts, and the MFS organization managed approximately $27.9 billion of assets
invested in equity securities.

The new investment advisory and administrative services agreements with MFS
contain substantially the same terms and conditions as the terminated agreements
with Navellier Management. As required by these terminated agreements with
Navellier Management, the Trust and the Fund have changed their names to
eliminate the use of the term "Navellier" and, reflecting the new relationship
with MFS, have adopted the names "The MFS Series Trust" and "MFS Aggressive
Small Cap Equity Fund," respectively.

The Adviser receives an annual 1.25% investment advisory fee from the Fund,
payable monthly, based upon the Fund's average daily net assets. The advisory
fee paid by the Fund is higher than that paid by most other investment
companies. The Adviser also receives a 0.25% annual fee from the Fund for the
provision of administration services.

THE DISTRIBUTOR

Since the inception of the Fund through March 15, 1997, Navellier Securities
acted as the Fund's Distributor. On March 15, 1997, the distribution agreement
for the Fund between the Trust and Navellier Securities terminated due to the
decision of the Trust's Board of Trustees not to renew this agreement.

Effective March 16, 1997, the Trust entered into a new distribution
agreement with MFD. The new agreement with MFD contains substantially the same
terms and conditions as the terminated agreement with Navellier Securities.

12
<PAGE>
THE CUSTODIAN AND THE TRANSFER AGENT

Rushmore Trust and Savings, FSB, 4922 Fairmont Avenue, Bethesda, Maryland,
20814, telephone: (301) 657-1517 or (800) 621-7874, is Custodian for the Fund's
securities and cash and Transfer Agent for the Fund shares.

EXPENSES OF THE FUND
- -------------------------------------------------------

GENERAL

The Fund is responsible for the payment of its own expenses. These expenses
are deducted from investment income before dividends are paid. These expenses
include, but are not limited to: fees paid to the Adviser, the Custodian, the
Transfer Agent, and the Accountant; Trustees' fees; taxes; interest; brokerage
commissions; organization expenses; securities registration ("blue sky") fees;
legal and auditing fees; insurance; and printing and other expenses which are
not directly assumed by the Adviser under its investment advisory and
administrative services agreements with the Fund.

Under an agreement between the Fund and the Prior Adviser related to payment
of operating expenses, the Prior Adviser has reserved the right to seek
reimbursement for the past, present and future operating expenses of the Fund
paid by the Prior Adviser, at any time upon notice to the Fund. At December 31,
1995, the prior adviser voluntarily agreed not to seek future reimbursement of
all unreimbursed past expenses of the Fund. During the year ended December 31,
1996, the Prior Adviser paid operating expenses of the Fund totaling $660,374.
Under the operating expense agreement, the Prior Adviser requested, and the Fund
reimbursed, $464,738 of such expenses. The Prior Adviser voluntarily agreed not
to seek future reimbursement of $195,636 of such 1996 expenses. Accordingly, at
December 31, 1996, there were no prior expenses which could be reimbursed in the
future under the agreement.

Subject to termination or revision at the sole discretion of MFS, MFS has
agreed to bear the Fund's normal operating expenses which accrue on and after
March 16, 1997 such that the Fund's "Total Fund Operating Expenses" do not
exceed 1.75% per annum of its average daily net assets (the "Maximum
Percentage"). MFS has not agreed to bear the Fund's extraordinary expenses. The
obligation of MFS to bear these expenses terminates on the last day of the
Fund's fiscal year in which the Fund's "Total Fund Operating Expenses" are less
than or equal to the Maximum Percentage. The payments made by MFS on behalf of
the Fund under this arrangement are subject to reimbursement by the Fund to MFS,
which will be accomplished by the payment of an expense reimbursement fee by the
Fund to MFS computed and paid monthly at a percentage of its average daily net
assets for its then current fiscal year, with a limitation that immediately
after such payment the Fund's "Total Fund Operating Expenses" will not exceed
the Maximum Percentage. This expense reimbursement by the Fund to MFS terminates
on the earlier of the date on which payments made by the Fund equal the prior
payment of such reimbursable expenses by MFS or March 16, 2000.

BROKERAGE COMMISSIONS

The Adviser may use selected broker-dealers to execute portfolio
transactions for the Fund, provided that the commissions, fees, or other
remuneration received by such party in exchange for executing such transactions
are reasonable and fair compared to those paid to other brokers

13
<PAGE>

in connection with comparable transactions. The Adviser may consider sales of
shares of the Fund and of the other investment company clients of MFD as a
factor in the selection of broker-dealers to execute the Fund's portfolio
transactions. From time to time, the Adviser may direct certain portfolio
transactions to broker-dealer firms which, in turn, have agreed to pay a portion
of the Fund's operating expenses (e.g., fees charged by the custodian of the
Fund's assets). (See the SAI).

REPORTS AND INFORMATION
- -------------------------------------------------------

The Fund will distribute to its shareholders semi-annual reports containing
unaudited financial statements and information pertaining to matters of the
Fund. An annual report containing financial statements together with the report
of the independent auditors of the Fund is distributed to shareholders each
year.

Shareholder inquiries should be addressed to the Transfer Agent, Rushmore
Trust and Savings FSB, 4922 Fairmont Avenue, Bethesda, Maryland, 20814, Tel:
(301) 657-1510 or (800) 622-1386.

DESCRIPTION OF SHARES
- -------------------------------------------------------

The Trust is a Delaware business trust organized on May 28, 1993. The
Declaration of Trust permits the Trustees to issue an unlimited number of shares
of beneficial interest. The Board of Trustees has the power to designate one or
more classes of shares of beneficial interest and to classify or reclassify any
unissued shares with respect to such classes. Presently the Trust is only
offering shares of the Fund.

The shares of the Fund, when issued, are fully paid and non-assessable, are
redeemable at the option of the holder, are fully transferable, and have no
conversion or preemptive rights. Shares are also redeemable at the option of the
Fund under certain circumstances (see "Redemption of Shares"). Each share of the
Fund is equal as to earnings, expenses, and assets of the Fund and, in the event
of liquidation of the Fund, is entitled to an equal portion of all of the Fund's
net assets. Shareholders of the Fund are entitled to one vote for each full
share held and fractional votes for fractional shares held. Voting rights are
not cumulative, so that the holders of more than 50% of the shares voting in any
election of Trustees can, if they so choose, elect all of the Trustees. While
the Fund is not required, and does not intend, to hold annual meetings of
shareholders, such meetings may be called by the Trustees at their discretion,
or upon demand by the holders of 10% or more of the outstanding shares of the
Fund for the purpose of electing or removing Trustees.

14
<PAGE>
All shares (including reinvested dividends and capital gain distributions)
are issued or redeemed in full or fractional shares rounded to the third decimal
place. No share certificates will be issued. Instead, an account will be
established for each shareholder and all shares purchased will be held in
book-entry form by the Fund.

DIVIDENDS AND DISTRIBUTIONS
- -------------------------------------------------------

All dividends and distributions with respect to the shares of the Fund will
be payable in shares at net asset value or, at the option of the shareholder, in
cash. Any shareholder who purchases shares of the Fund prior to the close of
business on the record date for a dividend or distribution will be entitled to
receive such dividend or distribution. Dividends and distributions (whether
received in shares or in cash) are treated either as ordinary income or
short-term or long-term capital gain for federal income tax purposes. Between
the record date and the cash payment date, the Fund retains the use and benefits
of such monies as would be paid as cash dividends.

The Fund will distribute all of its net investment income and net realized
capital gains, if any, annually in December. If a cash payment is requested with
respect to the Fund, a check will be mailed to the shareholder. Unless otherwise
instructed, the Transfer Agent will mail checks or confirmations to the
shareholder's address of record.

The federal income tax laws impose a four percent (4%) nondeductible excise
tax on each regulated investment company with respect to the amount, if any, by
which such company does not meet distribution requirements specified in the
federal income tax laws. The Fund intends to comply with the distribution
requirements and thus does not expect to incur the four percent (4%)
nondeductible excise tax, although the imposition of such excise tax may
possibly occur.

Shareholders will have their dividends and/or capital gain distributions
reinvested in additional shares of the Fund unless they elect in writing to
receive such distributions in cash. Shareholders whose shares are held in the
name of a broker or nominee should contact such broker or nominee to determine
whether they want dividends reinvested or distributed.

The automatic reinvestment of dividends and distributions will not relieve
participants of any income taxes that may be payable (or required to be
withheld) on dividends and distributions. (See "Taxes" following).

In the case of foreign participants whose dividends are subject to U.S.
income tax withholding and in the case of any participants subject to 31%
federal backup withholding, the Transfer Agent will reinvest dividends after
deduction of the amount required to be withheld.

Experience may indicate that changes in the automatic reinvestment of
dividends are desirable. Accordingly, the Fund reserves the right to amend or
terminate this provision as applied to any dividend or distribution paid
subsequent to written notice of the change sent to shareholders at least 90 days
before the record date for such dividend or distribution.

15
<PAGE>
TAXES
- -------------------------------------------------------

FEDERAL TAXES

The Fund is a separate taxpayer and intends to meet the requirements of
Subchapter M of the Internal Revenue Code of 1986 (relating to regulated
investment companies) with respect to diversification of assets, sources of
income, and distributions of taxable income and will elect to be taxed as a
regulated investment company for federal income tax purposes.

However, the Code contains a number of complex tests relating to
qualification which a fund might not meet in any particular year. For example,
if a fund derives 30% or more of its gross income from the sale of securities
held for less than three months, it may fail to qualify. If a fund did not
qualify as a regulated investment company, it would be treated for tax purposes
as an ordinary corporation and receive no tax deduction for payments made to
shareholders and all Fund distributions would be taxable to shareholders as
ordinary dividend income.

Because the Fund intends to distribute all of its net investment income and
net realized capital gains at least annually, it is not expected that the Fund
will be required to pay federal income tax for any year throughout which it was
a regulated investment company nor, for this reason, is it expected that the
Fund will be required to pay the 4% federal excise tax imposed on regulated
investment companies that fail to satisfy certain minimum distribution
requirements. However, the possibility of federal or state income tax and/or
imposition of the federal excise tax does exist.

Dividends (other than capital gains dividends) will be taxable to
shareholders as ordinary income, whether received in shares or cash and will, in
the case of corporate shareholders, generally qualify for the dividends-received
deduction to the extent paid out of qualifying dividends received by the Fund.

Capital gains dividends will ordinarily be taxable to shareholders as
long-term capital gain, regardless of how long they have held their shares. A
dividend is a capital gains dividend if it is so designated by the Fund and is
paid out of the Fund's net capital gain (that is, the excess of the Fund's net
long-term capital gain over its net short-term capital loss).

Any dividends paid shortly after a purchase by an investor may have the
effect of reducing the per share net asset value of the investor's shares by the
per share amount of dividends. Furthermore, such dividends, although in effect a
return of capital, are subject to federal income taxes. Therefore, prior to
purchasing shares of the Fund, the investor should carefully consider the impact
of dividends, including capital gains distributions, which are expected to be or
have been announced.

Upon a disposition or redemption of shares of the Fund, the shareholder will
generally recognize taxable gain or loss measured by the difference between the
redemption price and the basis of the shares. This gain or loss will generally
be treated as capital gain or loss (long-term or short-term, depending upon the
holding period for the redeemed shares).

Shortly after the end of each calendar year, each Fund shareholder will
receive a statement setting forth the federal income tax status of all dividends
and distributions for that year,

16
<PAGE>

including the portion taxable as ordinary income, the portion taxable as
long-term capital gain, the portion, if any, representing a return of capital
(which is free of current taxes but results in a basis reduction) and the
amount, if any, of federal income tax withheld. Shareholders may be subject to
backup withholding at the rate of 31% on dividends and redemption proceeds
unless (a) they are corporations or come within other exempt categories or (b)
they provide correct taxpayer identification numbers, certify as to no loss of
exemption from backup withholding, and otherwise comply with applicable
requirements of the law relating to backup withholding. Any amounts paid as
backup withholding will be creditable against the federal income tax liabilities
of the affected shareholders. The Fund intends to withhold U.S. federal income
tax at the rate of 30% on dividends and certain other payments that are subject
to such withholding and are made to persons who are neither citizens nor
residents of the U.S., regardless of whether a lower rate may be permitted under
an applicable treaty. Backup withholding will not be applied to payments that
are subject to 30% withholding.

The Fund may pay taxes to foreign countries with respect to dividends or
interest it receives from foreign issuers or from domestic issuers that derive a
substantial amount of their revenues in foreign countries, or such taxes may be
withheld at the source by such issuers. The Fund will generally be entitled to
deduct such taxes in computing its taxable income.

STATE AND LOCAL TAXES

The Fund may be subject to state or local taxation in jurisdictions in which
it may be deemed to be doing business. Taxable income of the Fund and its
shareholders for state and local purposes may be different from taxable income
calculated for federal income tax purposes.

Each prospective investor is advised to consult his or her tax adviser for
advice as to the federal, state, and local taxation which may be applicable to
such investor in connection with an investment in the Fund.

PURCHASE AND PRICING OF SHARES
- -------------------------------------------------------

PURCHASE OF SHARES

The Fund's shares are sold to the general public on a continuous basis
through the Distributor and its network of broker-dealers and Transfer Agent.

The Fund closed to new investors on April 15, 1996. Shareholders of the Fund
as of such closing date may continue to add to an account through the
reinvestment of dividends and cash distributions on any Fund shares owned, and
through the purchase of additional Fund shares. Shareholders of the Fund as of
the April 15, 1996 closing date may also open and add to additional accounts
that use the same social security number as the account existing as of April 15,
1996, such as accounts where the shareholder is the owner, a joint owner or a
custodian for a minor child. Shares of the Fund may continue to be purchased
through mutual fund wrap fee advisers and financial planners. Additionally,
Trustees of the Fund and employees and directors of the Fund's Adviser may
continue to open new Fund accounts. The Fund may resume sales to new investors
at some future date.

17
<PAGE>
PURCHASE BY MAIL

Investments in the Fund can be made through selected securities dealers, who
have the responsibility to transmit orders promptly and may charge a processing
fee, or through the Transfer Agent, Rushmore Trust and Savings, FSB.

TO INVEST BY MAIL: Fill out an application and make a check payable to "MFS
Aggressive Small Cap Equity Fund." Mail the check along with the application to:

MFS Aggressive Small Cap Equity Fund
c/o Rushmore Trust and Savings, FSB
4922 Fairmont Avenue
Bethesda, MD 20814

Purchases by check will normally be credited to an account at the closing
net asset value next determined after receipt of payment in good order. Foreign
checks will not be accepted.

Net asset value per share is calculated once daily as of 4:00 p.m. E.S.T. on
each business day. In the event that the New York Stock Exchange or the national
securities exchanges on which stocks are traded adopt different trading hours on
either a permanent or temporary basis, the Trustees of the Trust will reconsider
the time at which net asset value is to be computed. (See "Purchase and Pricing
of Shares--Valuation of Shares").

PURCHASES THROUGH DEALERS

Shares purchased through Dealers will be effected at the net asset value
next determined after the Dealer receives the purchase order, provided that the
Dealer transmits the order to the Transfer Agent and the Transfer Agent accepts
the order by 4:00 p.m. E.S.T. The investor must settle his or her entitlement to
that day's net asset value with the Dealer.

Certain selected Dealers may effect transactions in shares of the Fund on a
"three-day settlement" basis through the National Securities Clearing
Corporation's Fund/SERV system.

Purchases of shares through Dealers not utilizing the National Securities
Clearing Corporation's Fund/SERV system will be effected when received in proper
form by the Transfer Agent, as described above, in the same manner and subject
to the same terms and conditions as are applicable to shares purchased directly
through the Transfer Agent. The sales charge applicable to the investor's
purchase (See "Pricing of Shares" below) is the same when purchased through a
Dealer as when purchased directly through the Transfer Agent.

Shareholders who wish to transfer fund shares from one broker-dealer to
another should contact the Transfer Agent at (800) 622-1386.

TO INVEST BY BANK WIRE: Request a wire transfer to:

Rushmore Federal Savings Bank
Bethesda, MD
Routing Number 0550 71084
For Account of MFS Aggressive Small Cap Equity Fund
Account Number 0293 85770

18
<PAGE>

AFTER INSTRUCTING YOUR BANK TO TRANSFER MONEY BY WIRE, YOU MUST TELEPHONE
THE TRANSFER AGENT AT (800) 622-1386 OR (301) 657-1510 BETWEEN 8:30 A.M. AND
4:00 P.M. E.S.T. AND TELL US THE AMOUNT YOU TRANSFERRED AND THE NAME OF THE BANK
SENDING THE TRANSFER. YOUR BANK MAY CHARGE A FEE FOR SUCH SERVICES. IF THE
PURCHASE IS CANCELLED BECAUSE YOUR WIRE TRANSFER IS NOT RECEIVED, YOU MAY BE
LIABLE FOR ANY LOSS THE FUND MAY INCUR.

Such wire should identify the name of the Fund, the account number, the
order number (if available), and your name.

TO INVEST BY AUTOMATIC MONTHLY INVESTMENT PLAN:

Shareholders may make automatic monthly purchases of the Fund's shares by
executing an automatic monthly withdrawl application authorizing his/her/its
bank to transfer money from his/ her/its checking account to the Transfer Agent
for the automatic monthly purchase of shares of the Fund for the shareholder.
There is no charge by the Fund for this automatic monthly investment plan and
the shareholder can discontinue the service at any time.

PRICING OF SHARES

The shares of the Fund are sold at their net asset value per share next
determined after an order in proper form (completely filled out application form
and additional information or documentation) is received by the Transfer Agent,
plus a maximum sales charge of 3% on a single purchase of between $2,000 and
$24,999.99. The sales load is reduced to 2-1/2% for purchases of between $25,000
and $49,999.99, 2% for purchases of between of between $50,000 and $74,999.99,
1-1/2% for purchases of between $75,000 and $99,999.99, and 1% for purchases of
$100,000 or more. There is no sales charge for purchases of $1 Million or more.
The sales charge is payable at the time shares are purchased and is deducted
from the amount credited to the investor's account. If an order for shares of
the Fund is received by the Transfer Agent by 4:00 p.m. on any business day,
such shares will be purchased at the net asset value determined as of 4:00 p.m.
on that day (plus the applicable sales charge). Otherwise, such shares will be
purchased at the net asset value determined as of 4:00 p.m on the next day (plus
the applicable sales charge). However, orders received by the Transfer Agent
from dealers or brokers after the net asset value is determined that day will
receive such offering price if the orders were received by the broker or dealer
from its customer prior to such determination and were transmitted to and
received by the Transfer Agent prior to its close of business on that day
(normally 4:00 p.m. E.S.T.). Shares are entitled to receive any declared
dividends on the day following the date of purchase.

ABATEMENT OF SALES CHARGES FOR TRANSFERRED ACCOUNTS

Any investor who transfers all or any portion of his investment from any
other registered investment company which charges a sales load (other than those
which charge a deferred sales load) to the Fund will not be required to pay a
sales charge on the amount invested. The Fund Trustees, the Distributor, the
Custodian, the Transfer Agent, retirement or deferred compensation plans and
trusts used to fund such plans, and their employees; or brokers directly
involved in selling the Fund's shares and whose firm has executed a selling
agreement with the Distributor or the Adviser or their employees or the spouse
or child of any of the above will not be required to pay any sales charge, nor
will any investor who purchases more than $1 million of the Fund's

19
<PAGE>

shares nor will any investor who purchases through an account as to which an
investment adviser, financial planner, agent, bank or broker-dealer charges an
account management or transaction fee ("wrap fee"), provided the investment
adviser, financial planner, agent, bank or broker-dealer has an Agreement with
Distributor.

Purchases may also be made at net asset value (no load) by investment
advisers or financial planners who place trades for their own accounts or the
accounts of their clients and who charge a management, consulting or other fee
for their services; and clients of such investment advisers or financial
planners who place trades for their own accounts if the accounts are linked to
the master account of such investment adviser or financial planner on the books
and records of the broker or agent; and by retirement and deferred compensation
plans and trusts used to fund those plans, including, but not limited to, those
defined in section 401(a), 403(b), or 457 of the Internal Revenue Code and
"rabbi trusts."

GENERAL PURCHASING INFORMATION

The Fund has established a minimum initial investment of $2,000 ($500 in the
case of IRA and other retirement plans or qualifying group plans) and $100 for
subsequent investments. A shareholder who wishes to place an order for shares
should contact MFS Service Center, Inc. at (800) 225-2606.

REDUCED SALES CHARGES

A reduction in the sales charge rate applicable to sales of Fund shares may
be obtained by volume discounts as described in the Prospectus. In addition,
members of qualified groups or persons purchasing shares for retirement plans or
individual retirement accounts (IRAs) may purchase shares of the Fund at the
same discounts charged on volume discount purchases. Also, persons who transfer
their investments from another investment company, to which they paid a sales
charge, will not be charged a sales charge.

Purchases of Fund shares are made at the public offering price next
determined after the Transfer Agent receives payment, including the applicable
sales charge. To receive the group rate on their individual purchase, group
members must purchase shares through a single investment dealer designated by
the group. After the initial purchase, a member may send funds for the purchase
of shares directly to the Transfer Agent. Sales to members of qualified groups
are made at a reduced sales charge because such sales normally involve less
sales effort and sales-related expense than would usually be associated with
sales to individual investors. Also, it is believed that such reduced sales
charges will provide an incentive for increased investment in the Fund by
members of qualified groups which could benefit the Fund and its shareholders by
enabling the Fund to achieve certain economies of scale and benefits of size
more rapidly than would otherwise be the case.

As determined by the Distributor, qualified groups include the employees of
a corporation or a sole proprietorship, members, and employees of a partnership
or association (including, without limitation, members of tax-exempt
organizations enumerated under Sections 501(c)(3) and 501(c)(13) of the Internal
Revenue Code of 1986), or other organized groups of persons (the members of
which may include other qualified groups), provided that: (i) the group has at
least 25 members, of which at least 10 members participate in the initial
purchase; (ii) the group has been in existence for at least six months; (iii)
the group has some purpose in addition to the purchase of investment company
shares at a reduced sales charge; and (iv) the group's sole

20
<PAGE>
organizational nexus or connection is not that the members are credit card
holders of a company, policy holders of an insurance company, customers of a
bank or a broker-dealer, clients of an investment adviser, or security holders
of a company.

Members of a qualified group include: (i) any group which meets the
requirements stated above and which is a constituent member of a qualified
group; (ii) any individual purchasing for his or her own account who is carried
on the records of the group or on the records of any constituent member of the
group as being a good standing employee, partner member, or person of like
status of the group or constituent member; or (iii) any fiduciary purchasing
shares for the account of a member of a qualified group or a member's
beneficiary, or participants in a qualified retirement plan, or contributors to
an individual retirement account (IRA). For example, a qualified group could
consist of a trade association which would have as its members individuals, sole
proprietors, partnerships, and corporations. The members of the group would then
consist of the individuals, the sole proprietors and their employees, the
members of the partnerships and their employees, as well as trustees of
employment benefit trusts acquiring Fund shares for the benefit of any of the
foregoing. The Fund reserves the right to revise the terms of, or to suspend or
discontinue, group sales charge discounts at any time.

LETTER OF INTENT

An investor may pay reduced sales charges by signing and fulfilling a Letter
of Intent which is on the Application Form. The Letter of Intent confirms the
investor's intention as to the total investment in shares of the Fund within the
following 13 consecutive months, and thereby the investor will become eligible
for the reduced sales charges applicable to the total amount to be purchased.
Purchases made within 90 days prior to the signing of the Letter of Intent may
be included in the total amount and will be valued on the effective date of the
Letter of Intent. The Letter of Intent will not be a binding obligation on
either the purchaser or the Fund. Purchases made under the Letter of Intent are
made at the sales charge applicable to the aggregate amount to be invested in
shares of the Fund under the Letter of Intent as if all the shares were
purchased in a single transaction. During the period of the Letter of Intent,
the Transfer Agent will hold shares representing 5% of the intended purchase in
escrow to provide payment of additional sales commissions that may have to be
paid if the Letter of Intent is reduced. If the total shares stated in the
Letter of Intent are not purchased, a price adjustment is made, depending upon
the actual amount invested within the period covered by the Letter of Intent, by
the redemption of sufficient shares held in escrow for the account of the
investor. Otherwise, shares held in escrow will be released upon completion of
the intended investment. A Letter of Intent can be amended: (a) during the
13-month period if the purchaser files an amended Letter of Intent with the same
expiration date as the original and (b) automatically after the end of the
period, if the total purchases credited to the Letter of Intent qualify for an
additional reduction in sales charge. For more information concerning the Letter
of Intent, see the Application Form or contact the Transfer Agent.

VALUATION OF SHARES

The net asset value of the shares of the Fund is calculated by adding the
values of all securities and other assets of the Fund, subtracting liabilities
of the Fund, and dividing by the number of outstanding shares. It is determined
once daily as of 4:00 p.m E.S.T., on days when the New York Stock Exchange is
open for trading. In the event that the New York Stock Exchange or the national
securities exchanges on which stocks are traded adopt different trading hours on

21
<PAGE>

either a permanent or temporary basis, the Trustees of the Fund will reconsider
the time at which net asset value is to be computed. The net asset value is
determined by adding the values of all securities and other assets of the Fund,
subtracting liabilities, and dividing by the number of outstanding shares of the
Fund. The price at which a purchase is effected is based on the next calculation
of net asset value after the order is received.

In determining the value of the assets of the Fund, the securities for which
market quotations are readily available are valued at market value. Debt
securities (other than short-term obligations) are normally valued on the basis
of valuations provided by a pricing service when such prices are believed to
reflect the fair value of such securities. Use of a pricing service has been
approved by the Trustees of the Fund. All other securities and assets are valued
at their fair value as determined in good faith by the Trustees, although the
actual calculations may be made by persons acting pursuant to the direction of
the Trustees. (See "Purchase, Redemption, and Pricing of Shares--Determination
of Net Asset Value" in the SAI.)

REDEMPTION OF SHARES
- -------------------------------------------------------

GENERAL

A shareholder may redeem shares of the Fund at the net asset value next
determined after receipt of a notice of redemption in accordance with the
procedures set forth below and compliance with the further redemption
information and/or additional documentation requirements described in this
Section. As used in this Prospectus, the term "business day" refers to those
days on which stock exchanges trading small cap stocks are open for business.
The Fund may change the following procedures at its discretion.

Any shareholder who redeems shares of the Fund prior to the close of
business on the record date for a dividend or distribution will not be entitled
to receive the dividend or distribution. A check for the proceeds of redemption
will normally be mailed within seven days of receipt of any redemption request
received by the Transfer Agent. Payments in redemption of shares will be reduced
by any income tax required to be withheld. See "Taxes," above. If shares to be
redeemed were purchased by check, the Fund may delay transmittal of redemption
proceeds only until such times as it is reasonably assured that good payment has
been collected for the purchase of such shares, which may be up to 15 days from
purchase date. Such delays can be avoided by wiring Federal Funds in effecting
share purchases.

If a shareholder wishes to redeem his or her entire shareholdings in the
Fund, he or she will receive, in addition to the net asset value of shares, all
declared but unpaid dividends thereon. The net asset value of the shares may be
more or less than a shareholder's cost depending on the market value of the
portfolio securities at the time of the redemption.

22
<PAGE>
REDEMPTION BY MAIL

A shareholder may redeem shares by mail on each day that the New York Stock
Exchange is open by submitting a written redemption request to:

MFS Aggressive Small Cap Equity Fund
c/o Rushmore Trust and Savings FSB
4922 Fairmont Avenue
Bethesda, MD 20814

The request for redemption should include the name of the Fund, the account
name and number, and should be signed by all registered owners of the shares in
the exact names in which they are registered. Each request should specify the
number or dollar amount of shares to be redeemed or that all shares in the
account are to be redeemed.

OPTION TO MAKE SYSTEMATIC WITHDRAWALS

The owner of $25,000 or more worth of the shares of the Fund may provide for
the payment from his account of any requested dollar amount (but not less than
$1,000) to him or his designated payee monthly, quarterly, or annually. Shares
will be redeemed on the last business day of each month. Unless otherwise
instructed, the Transfer Agent will mail checks to the shareholder at its
address of record. A sufficient number of shares will be redeemed to make the
designated payment. This redemption option is not available with respect to
shares for which certificates are held by a shareholder. Since a sales charge is
imposed on investors, investors should not purchase shares in the Fund while
they are participating in the withdrawal plan.

FURTHER REDEMPTION INFORMATION

Additional documentation regarding a redemption by any means may be required
when deemed appropriate by the Transfer Agent, and the request for such
redemption will not be considered to have been received in proper form until
such additional documentation has been received. An investor should contact the
Transfer Agent to inquire what, if any, additional documentation may be
required.

The Fund reserves the right to modify any of the methods of redemption or to
charge a fee for providing these services upon 30 days' written notice to
shareholders.

Due to the high cost of maintaining accounts of less than $2,000 ($500 for
IRA or other qualifying plan accounts), the Fund reserves the right to redeem
shares involuntarily in any such account at their then current net asset value.
Shareholders will first be notified and allowed 30 days to make additional share
purchases to bring their accounts to more than $2,000 ($500 for IRA or other
qualifying plan accounts). An account will not be redeemed involuntarily if the
balance falls below $2,000 ($500 for IRA or other qualifying plan accounts) by
virtue of fluctuations in net asset value rather than through investor
redemptions.

Under certain circumstances, the right of redemption may be suspended or the
redemption may be satisfied by distribution of portfolio securities rather than
cash. Information as to those matters is set forth in the SAI.

23
<PAGE>
CERTAIN SERVICES PROVIDED TO SHAREHOLDERS
- -------------------------------------------------------

STATEMENTS OF ACCOUNT

Statements of Account for the Fund will be sent to each shareholder at least
quarterly.

DIVIDEND ELECTION

A shareholder may elect to receive dividends in shares or in cash. If no
election is made, dividends will automatically be credited to a shareholder's
account in additional shares.

ADDITIONAL INFORMATION
- -------------------------------------------------------

The SAI, available upon request, without charge from the Fund, provides a
further discussion of certain sections of the Prospectus and other information
which may be of interest to certain investors. This Prospectus and the SAI do
not contain all the information included in the Registration Statement filed
with the Securities and Exchange Commission with respect to the securities being
sold, certain portions of which have been omitted pursuant to the rules and
regulations of the Securities and Exchange Commission. The Registration
Statement, including the exhibits filed therewith, may be examined at the office
of the Securities and Exchange Commission in Washington, D.C.

Statements contained in this Prospectus as to the contents of any contract
or other document referred to are not necessarily complete, and, in each
instance, reference is made to the SAI and the copy of such contract or other
document filed as an exhibit to the Registration Statement of which this
Prospectus forms a part, each such statement being qualified in all respects by
such reference.

ASSENT TO TRUST INSTRUMENT
- -------------------------------------------------------

Every shareholder, by virtue of having purchased a Share shall become a
shareholder and shall be held to have expressly assented and agreed to be bound
by the terms hereof.

TERMS APPLICABLE TO LETTER OF INTENT
- -------------------------------------------------------

By indicating in the Letter of Intent Section of the Account Application
that the provisions of the Letter of Intent have been selected, the investor
agrees as follows:

Each purchase of shares under the Letter of Intent will be made at the
public offering price which, at the time of such purchase, is applicable to a
single transaction of the dollar amount checked on the Account Application, as
described in the current Prospectus relating to such shares.

Out of the initial purchase (or subsequent purchases if necessary), 5% of
the total purchases required to complete the Letter of Intent will be held in
escrow in the form of shares (valued at the purchase price thereof) registered
in the investor's name. The Letter of Intent will terminate

24
<PAGE>

and the escrow will be released when the total purchases made under the Letter
of Intent, together with the value on the date of the Letter of Intent of any
shares of the Fund then owned by the investor, equal the aggregate amount
checked on the Account Application. All dividends and any capital gain
distributions on the escrowed shares will be paid to the investor or to the
investor's order, but the receipt of dividends and capital gain distributions in
shares computed at net asset value will not apply towards the completion of the
Letter of Intent.

No commitment is made to purchase additional shares. If, within 13 months
from the date of the Letter of Intent, the investor's total purchases under the
Letter of Intent, together with the value on the date of the Letter of Intent of
any shares of the Fund then owned by such investor, do not equal or exceed the
aggregate amount checked on the Account Application, the Investor will remit to
Rushmore Trust and Savings FSB, the difference in the sales charge actually paid
and the sales charge which the investor would have paid if total purchases made
under the Letter of Intent had been made at a single time. If, within 20 days
after written request by Rushmore Trust and Savings, FSB or the appropriate
dealer, the investor does not pay such difference in the sales charge, such
investor irrevocably constitutes and appoints Rushmore Trust and Savings, FSB as
his/her attorney to surrender for redemption any or all escrowed shares, with
full power of substitution in the premises, to be redeemed in order to realize
such difference.

For purposes of a Letter of Intent, a "single purchaser" means:

(i) an individual, or an individual, his spouse and their children under
the age of 21 purchasing for his or their own account (including an IRA
account) including his or their own trusts, commonly known as living trusts;
or

(ii) a trustee or other fiduciary purchasing for a single trust estate
or single fiduciary account, although more than one beneficiary is involved;
or

(iii) multiple trusts for the same employer, or

(iv) trust companies and bank trust departments placing orders with
respect to funds over which they exercise discretionary investment authority
and which are held in a fiduciary, agency, custodial, or similar capacity,
provided all shares are held of record in the name, or nominee name, of the
trust company or bank.

Except as provided above, a "single purchaser" does not include a group of
individuals whose funds are combined, directly or indirectly, for the purchase
of redeemable securities of a registered investment company jointly or through a
trustee, agent, custodian, or other representative, nor shall it include a
trustee, agent, custodian, or other representative of such a group of
individuals.

25
<PAGE>
INVESTMENT ADVISER

Massachusetts Financial Services
Company
500 Boylston Street
Boston, MA 02116
(617) 954-5000

DISTRIBUTOR

MFS Funds Distributor, Inc.
500 Boylston Street
Boston, MA 02116
(617) 954-5000

TRANSFER AGENT AND CUSTODIAN

Rushmore Trust and Savings, FSB
4922 Fairmont Avenue
Bethesda, MD 20814
(800) 622-1386

SHAREHOLDER INQUIRIES

Rushmore Trust and Savings, FSB
4922 Fairmont Avenue
Bethesda, MD 20814
(800) 622-1386

INDEPENDENT AUDITORS

Deloitte & Touche LLP
1900 M Street
Washington, D.C. 20036
(202) 955-4000

<PAGE>
MFS AGGRESSIVE SMALL CAP EQUITY FUND ("THE FUND")
STATEMENT OF ADDITIONAL INFORMATION
DATED MAY 1, 1997

This Statement of Additional Information, which is not a prospectus, should
be read in conjunction with the Prospectus of the MFS Aggressive Small Cap
Equity Fund, a series of The MFS Series Trust (the "Trust"), dated May 1, 1997,
a copy of which Prospectus may be obtained, without charge, by contacting the
MFS Service Center, Inc., 500 Boylston Street, Boston, MA 02116, telephone:
(800) 225-2606.

TABLE OF CONTENTS
- -------------------------------------------------------

<TABLE>
<S> <C>
General Information and History________________________________ 2
Investment Objective and Policies______________________________ 2
Trustees and Officers of the Fund______________________________ 5
Officers_______________________________________________________ 7
Control Persons and Principal Holders of Securities____________ 8
Adviser, Distributor, Custodian and Transfer Agent_____________ 8
Brokerage Allocation and Other Practices_______________________ 9
Capital Stock and Other Securities_____________________________ 11
Purchase, Redemption, and Pricing of Shares____________________ 12
Taxes__________________________________________________________ 15
Calculation of Performance Data________________________________ 18
Independent Auditors and Financial Statements__________________ 21
Appendix_______________________________________________________ 22
</TABLE>
<PAGE>
GENERAL INFORMATION AND HISTORY
- -------------------------------------------------------

The Trust is a business trust company (organized under the laws of the State
of Delaware on May 28, 1993). The Trust was known as The Navellier Series Fund
until March 16, 1997, when the Trust entered into an investment advisory
agreement with a new investment adviser and its name was changed to The MFS
Series Trust. The Trust's only series was known as the Aggressive Small Cap
Equity Portfolio, and as of March 16, 1997 became known as the MFS Aggressive
Small Cap Equity Fund.

INVESTMENT OBJECTIVE AND POLICIES
- -------------------------------------------------------

INVESTMENT POLICIES. The investment objective and policies of the Fund are
described in the "Investment Objective and Policies" section of the Prospectus.
The following general policies supplement the information contained in that
section of the Prospectus. Prior to being considered as a permissible investment
for the Fund, each issuer of the following instruments will first have to be
determined by the Adviser to qualify as a "Qualified Issuer" (as defined by the
Prospectus).

CERTIFICATES OF DEPOSIT. Certificates of deposit are generally short-term,
interest-bearing, negotiable certificates issued by banks or savings and loan
associates against funds deposited in the issuing institution.

TIME DEPOSITS. Time deposits are deposits in a bank or other financial
institution for a specified period of time at a fixed interest rate for which a
negotiable certificate is not received.

BANKER'S ACCEPTANCES. A banker's acceptance is a time draft drawn on a
commercial bank by a borrower usually in connection with an international
commercial transaction (to finance the import, export, transfer, or storage of
goods). The borrower, as well as the bank, is liable for payment, and the bank
unconditionally guarantees to pay the draft at its face amount on the maturity
date. Most acceptances have maturities of six months or less and are traded in
secondary markets prior to maturity.

COMMERCIAL PAPER. Commercial paper refers to short-term, unsecured
promissory notes issued by corporations to finance short-term credit needs.
Commercial paper is usually sold on a discount basis and has a maturity at the
time of issuance not exceeding nine months.

CORPORATE DEBT SECURITIES. Corporate debt securities with a remaining
maturity of less than one year tend to become liquid and can sometimes be traded
as money market securities.

UNITED STATES GOVERNMENT OBLIGATIONS. Securities issued or guaranteed as to
principal and interest by the United States government include a variety of
Treasury securities, which differ only in their interest rates, maturities, and
times of issuance. Treasury bills have a maturity of one year or less. Treasury
notes have maturities of one to seven years, and Treasury bonds generally have a
maturity of greater than five years.

Agencies of the United States government which issue or guarantee
obligations include, among others, export-import banks of the United States,
Farmers' Home Administration, Federal Housing Administration, Government
National Mortgage Association, Maritime Administration, Small Business
Administration, the Defense Security Assistance Agency of the Department of
Defense, and the Tennessee Valley Authority. Obligations of instrumentalities of
the United States government include securities issued or guaranteed by, among
others, the Federal National Mortgage Associates, Federal Intermediate Credit
Banks, Banks for Cooperatives, and the United States Postal Service. Some of the
securities are supported by the full faith and credit of the United States
government; others are supported by the right of the issuer to

2
<PAGE>
borrow from the Treasury, while still others are supported only by the credit of
the instrumentality.

INVESTMENT RESTRICTIONS. The Fund's fundamental policies cannot be changed
without the approval of a vote of a majority of the outstanding securities of
the Fund. A proposed change in fundamental policy or investment objective will
be deemed to have been effectively acted upon with respect to the Fund if a
majority of the outstanding voting securities of the Fund votes for the matter.
Such a majority is defined as the lesser of (a) 67% or more of the voting shares
of the Fund present at a meeting of shareholders, if the holders of more than
50% of the outstanding shares are present or represented by proxy or (b) more
than 50% of the outstanding shares. For purposes of the following restrictions
and those contained in the Prospectus: (i) all percentage limitations apply
immediately after a purchase or initial investment; and (ii) any subsequent
change in any applicable percentage resulting from market fluctuations or other
changes in the amount of total assets does not require elimination of any
security from the Fund.

The following investment restrictions are fundamental policies of the Fund
(unless otherwise specified below) and may not be changed except as described
above. The Fund may not:

1. Purchase for the Fund securities of any issuer, other than obligations
issued or guaranteed as to principal and interest by the United States
government or its agencies or instrumentalities, if immediately thereafter (i)
more than 5% of the Fund's total assets (taken at market value) would be
invested in the securities of such issuer, or (ii) more than 10% of the voting
securities of any class of such issuer would be held by the Fund.

2. Concentrate the portfolio investments in any one industry. To comply with
this restriction, no security may be purchased for the Fund if such purchase
would cause the value of the aggregate investment of the Fund in any one
industry to be 25% or more of that Fund's total assets (taken at market value).

3. Purchase any securities or other property on margin, or engage in short
sales of securities (unless it owns, or by virtue of its ownership of other
securities has the right to obtain without payment of any additional
consideration securities equivalent in kind and amount to the securities sold);
PROVIDED, HOWEVER, that the Fund may obtain short-term credit as may be
necessary for the clearance of purchases and sales of securities.

4. Make cash loans, except that the Fund may purchase bonds, notes,
debentures, or similar obligations which are customarily purchased by
institutional investors whether publicly distributed or not.

5. Make securities loans, except that the Fund may make loans of the
portfolio securities, provided that the market value of the securities subject
to any such loans does not exceed 33 1/3% of the value of the total assets
(taken at market value) of the Fund.

6. Make investments in real estate or commodities or commodity contracts,
including futures contracts, although the Fund may purchase securities of
issuers which deal in real estate or commodities although this is not a primary
objective of the Fund but only if such securities are small cap equity
securities or constitute less than 35% of the Fund's total assets.

7. Invest in oil, gas, or other mineral exploration or development programs,
although the Fund may purchase securities of issuers which engage in whole or in
part of such activities, but only if such securities are small cap equity
securities or constitute less than 35% of the Fund's total assets, although the
Fund may purchase securities of issuers which engage in whole or in part of such
activities.

3
<PAGE>
8. Invest in or sell puts, calls, straddles, and any combination thereof.

9. Purchase securities of companies for the purpose of exercising management
or control.

10. Participate in a joint or joint and several trading account in
securities.

11. Purchase the securities of (i) other open-end investment companies, or
(ii) closed-end investment companies.

12. Issue senior securities or borrow money, except that the Fund may (i)
borrow money only from banks for temporary or emergency (not leveraging)
purposes, including the meeting of redemption requests, that might otherwise
require the untimely disposition of securities, provided that any such borrowing
does not exceed 10% of the value of the total assets (taken at market value),
and (ii) borrow money only from banks for investment purposes, provided that (a)
after each such borrowing, when added to any borrowing described in clause (i)
of this paragraph, there is an asset coverage of at least 300% as defined in the
Investment Company Act of 1940, and (b) is subject to an agreement by the lender
that any recourse is limited to the assets with respect to which the borrowing
has been made. The Fund may not invest in portfolio securities while the amount
of borrowing of the Fund exceeds 5% of the total assets of such Fund.

13. Pledge, mortgage, or hypothecate the assets of the Fund to an extent
greater than 10% of the total assets to secure borrowings made pursuant to the
provisions of Item 12 above.

14. Purchase for the Fund "restricted securities" (as defined in Rule
144(a)(3) of the Securities Act of 1933), if, as a result of such purchase, more
than 10% of the net assets (taken at market value) of the Fund would then be
invested in such securities nor will the Fund invest in illiquid or unseasoned
securities if as a result of such purchase more than 5% of the net assets of
such portfolio would be invested in either illiquid or unseasoned securities.

If a percentage restriction is adhered to at the time of investment, a later
increase or decrease in percentage beyond the specified limit resulting from a
change in values of portfolio securities or amount of net assets shall not be
considered a violation of the restrictions, except as to the 5%, 10% and 300%
percentage restrictions on borrowing specified in Restriction Number 12 above.

PORTFOLIO TURNOVER. The portfolio turnover rate is calculated by dividing
the lesser of purchases or sales of portfolio securities during the fiscal year
by the monthly average of the value of the Fund's securities (excluding from the
computation all securities, including options, with maturities at the time of
acquisition of one year or less). A high rate of portfolio turnover generally
involves correspondingly greater expenses to the Fund, including brokerage
commission expenses, dealer mark-ups, and other transaction costs on the sale of
securities, which must be borne directly by the Fund. Turnover rates may vary
greatly from year to year as well as within a particular year and may also be
affected by cash requirements for redemptions of each Fund's shares and by
requirements which enable the Fund to receive certain favorable tax treatment.
The portfolio turnover rate for the Fund during 1996 was 136.9%. The Fund will
attempt to generally limit the annual portfolio turnover rate to 300% or less,
however this rate may be exceeded if in the Adviser's discretion securities are
or should be sold or purchased in order to attempt to increase the Fund's
performance.

4
<PAGE>
TRUSTEES AND OFFICERS OF THE FUND
- -------------------------------------------------------

The following information, as of April 10, 1997, is provided with respect to
each director and officer of the Fund:

<TABLE>
<CAPTION>
POSITION(S) HELD WITH PRINCIPAL OCCUPATION(S) DURING
NAME AND ADDRESS REGISTRANT AND ITS AFFILIATES PAST FIVE YEARS
- ---------------------------- ----------------------------------- -------------------------------------
<S> <C> <C>

Donald A. Simon Independent Trustee, Chairman and Currently the President of American
American Aeromedical President Aeromedical Services Corp., a
Services Corporation provider and marketer of traveler's
21893 Skywest Dr. assistance programs, and the
Hayward, CA 94541 Executive Vice President and Director
of Air Ambulance Inc., an aeromedical
transportation company. Mr. Simon was
formerly Chairman of KangaROOS USA,
Inc., a footwear importer; Executive
Vice President of Life Insurance RX
Corp., a computer services firm; and
President of Air Chaparral/Inland
Empire Airlines, a regional commuter
airline. He has over 35 years of
experience in the mutual fund,
financial planning, insurance, and
corporate areas of large and small
companies.

Lawrence Bianchi Independent Trustee Currently Chairman of the Board of
Codman Company Directors of The Codman Company,
211 Congress Street Inc., and a member of The American
Boston, MA 02210 Society of Real Estate Consultants,
Mr. Bianchi has been in the Boston
real estate market for 28 years. He
has been a Commissioner for 16 years,
representing the Greater Boston Real
Estate Board on the Boston Landmarks
Commission, served 20 years on the
Industrial Development Financing
Authority of the City of Boston, and
for the past 11 years has been its
Chairman. He was President in 1989 of
the New England Chapter of The
Society of Industrial and Office
Realtors. He is an incorporator of
both Massachusetts General Hospital
and University Hospital and a
Director of Historic Boston, Inc.,
and the Bostonian Society. Prior
</TABLE>

5
<PAGE>
<TABLE>
<CAPTION>
POSITION(S) HELD WITH PRINCIPAL OCCUPATION(S) DURING
NAME AND ADDRESS REGISTRANT AND ITS AFFILIATES PAST FIVE YEARS
- ---------------------------- ----------------------------------- -------------------------------------
to its sale in 1992 to the John
Hancock Insurance Company, Mr.
Bianchi served for 3-1/2 years as one
of four outside directors of the 750
million dollar Patriot Group of three
closed-end mutual funds listed on the
New York Stock Exchange.
<S> <C> <C>

Kenneth Sletten Independent Trustee President of Rudolph & Sletten, Inc.,
Rudolph & Sletten a prominent construction company in
989 E. Hillsdale California. He has been Chairman of
Foster City, CA 94404 the Board of Directors in the Santa
Clara District of the Associated
General Contractors (AGC), and is a
member of the Board of Directors of
their Building Division. He is a
lifetime member of the Northern
California Construction Institute
(NCCI), and a member of the American
Institute of Plant Engineers (AIPE).
He serves on the boards of the
Children's Health Council and Menlo
School and College.

Arnold D. Scott* Trustee Senior Executive Vice President,
Secretary and Director of
Massachusetts Financial Services
Company

W. Thomas London* Treasurer Senior Vice President of
Massachusetts Financial Services
Company

James O. Yost* Assistant Treasurer Vice President of Massachusetts
Financial Services Company

Stephen E. Cavan* Secretary and Clerk Senior Vice President, General
Counsel and Assistant Secretary of
Massachusetts Financial Services
Company

James R. Bordewick, Jr.* Assistant Secretary Senior Vice President and Associate
General Counsel of Massachusetts
Financial Services Company
</TABLE>

- ------------------------

* "Interested persons" (as defined in the Investment Company Act of 1940) of
the Adviser whose address is 500 Boylston Street, Boston, Massachusetts
02116.

6
<PAGE>
OFFICERS
- -------------------------------------------------------

The officers of the Fund are affiliated with the Adviser and receive no
salary or fee from the Fund. The Fund's disinterested Trustees are each
compensated by the Fund with an annual fee, payable quarterly (calculated at an
annualized rate), of $10,000, if the Fund's net assets are $200 million or less,
and $20,000 if the Fund's net assets are over $200 million. The Trustees' fees
may be adjusted according to increased responsibilities if the Fund's assets
exceed one billion dollars. In addition, each disinterested Trustee receives an
attendance fee from the Fund of $500 per board meeting and for attendance at any
meeting of a committee of the board, as well as reimbursement for actual
expenses of such attendance.

The Board of Trustees is permitted by the Fund's By-Laws to appoint an
advisory committee which shall be composed of persons who do not serve the Fund
in any other capacity and which shall have no power to dictate corporate
operations or to determine the investments of the Fund. The Fund currently has
no advisory committee.

7
<PAGE>
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
- -------------------------------------------------------

The Fund does not control and is not under common control of any person. As
of February 28, 1997, National Financial Services Corp., P.O. Box 3908, Church
Street Station, NY, NY 10008 was the record owner of 7.96% of the outstanding
shares of the Fund, Charles Schwab & Company, 101 Montgomery Street, San
Francisco, CA, 94104-4122 was the record owner in two accounts of 7.62% and
10.42% of the outstanding shares of the Fund.

As of March 31, 1997, all Trustees and officers as a group owned less than
1% of the outstanding shares of the Fund.

ADVISER, DISTRIBUTOR, CUSTODIAN
AND TRANSFER AGENT
- -------------------------------------------------------

ADVISER

The management fee payable to the Adviser under the terms of the Investment
Advisory Agreement (the "Advisory Agreement") between the Adviser and the Fund
is payable monthly and is based upon a percentage of the Fund's average daily
net assets, equal to 1.25%. The Investment Adviser has the right, but not the
obligation, to waive any portion or all of its management fee, from time to
time. For the fiscal years ended December 31, 1996 and 1995 and the period ended
December 31, 1994, the Prior Adviser received management fees from the Fund of
$2,323,690, $664,744 and $56,866, respectively.

Expenses not expressly assumed by the Adviser under the Advisory Agreement
and administrative services agreement are paid by the Fund. The Advisory
Agreement lists examples of expenses paid by the Fund, the major categories of
which relate to taxes, fees to Trustees, legal, accounting, and audit expenses,
custodian and transfer agent expenses, certain printing and registration costs,
and non-recurring expenses, including litigation.

The Advisory Agreement provides that the Adviser shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Fund or its
investors except for losses (i) resulting from the willful misfeasance, bad
faith, or gross negligence on its part, or (ii) resulting from reckless
disregard by it of its obligations and duties under the Advisory Agreement.

Pursuant to an Administrative Services Agreement, the Adviser receives an
annual fee of 0.25% of the value of the Fund's average daily net assets and
provides or is responsible for the provision of certain administrative services
to the Fund, including, among others, the preparation and maintenance of certain
books and records required to be maintained by the Fund under the Investment
Company Act of 1940. The Administrative Services Agreement permits the
Investment Adviser to contract out for all of its duties thereunder; however, in
the event of such contracting, the Adviser remains responsible for the
performance of its obligations under the Administrative Services Agreement. The
Adviser has entered into an agreement with Rushmore Trust and Savings, FSB, to
perform, in addition to custodian and transfer agent services, some or all
administrative services.

8
<PAGE>
The Advisory Agreement permits the Adviser to act as investment adviser for
any other person, firm, or corporation, and designates the Adviser as the owner
of the name "MFS" or any use or derivation of the word MFS. If the Adviser shall
no longer act as investment adviser to the Fund, the right of the Fund to use
the name "MFS" as part of its title may, solely at the Adviser's option, be
withdrawn.

The Prior Adviser advanced the Fund's organizational expenses which have
been estimated to be $143,294, of which $18,118 remained unamortized as of
December 31, 1996. The Fund agreed to reimburse the Prior Adviser for the
organizational expenses it advances, without interest on a date or dates to be
chosen at the sole discretion of the Prior Adviser, at any time after the Fund
has $20 million in total net assets or is breaking even or making a profit,
which ever first occurs.

DISTRIBUTOR

The Fund's Distributor is MFS Funds Distributor, Inc. ("MFD"). MFD is
registered as a broker-dealer with the Securities Exchange Commission and
National Association of Securities Dealers and the various states in which the
Fund's securities are offered for sale. The Fund's shares will be continuously
distributed by MFD pursuant to a Distribution Agreement, dated March 16, 1997.
Prior to March 16, 1997, Navellier Securities Corp. was the Fund's distributor.
The Distribution Agreement obligates the Distributor to pay certain expenses in
connection with the offering of the shares of the Fund. The Distributor is
responsible for the cost of printing and mailing Prospectuses to potential
investors and of any advertising incurred by it in connection with the
distribution of shares of the Fund.

For the years ended December 31, 1996 and 1995, and for the period ended
December 31, 1994, the Prior Distributor received $924,050, $731,298 and
$162,441, respectively from sales loads earned on sales of the Fund's shares.

CUSTODIAN AND TRANSFER AGENT

Rushmore Trust and Savings, FSB, 4922 Fairmont Avenue, Bethesda, Maryland
20814, serves as the custodian of the Fund's portfolio securities and as the
Fund's transfer agent and, in those capacities, maintains certain accounting and
other records of the Fund and processes requests for the purchase or the
redemption of shares, maintains records of ownership for shareholders, and
performs certain other shareholder and administrative services on behalf of the
Fund.

BROKERAGE ALLOCATION AND OTHER PRACTICES
- -------------------------------------------------------

Specific decisions to purchase or sell securities for the Fund are made by
employees of the Adviser, who are appointed and supervised by its senior
officers. Changes in the Fund's investments are reviewed by the Board of
Trustees. The Fund's portfolio manager may serve other clients of the Adviser or
any subsidiary of MFS in a similar capacity.

The primary consideration in placing portfolio security transactions with
broker-dealers for execution is to obtain and maintain the availability of
execution at the most favorable prices and in the most effective manner
possible. The Adviser attempts to achieve this result by selecting

9
<PAGE>
broker-dealers to execute portfolio transactions on behalf of the Fund and other
clients of the Adviser on the basis of their professional capability, the value
and quality of their brokerage services, and the level of their brokerage
commissions. In the case of securities, such as government securities, which are
principally traded in the over-the-counter market (where no stated commissions
are paid but the prices include a dealer's markup or markdown), the Adviser
normally seeks to deal directly with the primary market makers, unless in its
opinion, better prices are available elsewhere. In the case of securities
purchased from underwriters, the cost of such securities generally includes a
fixed underwriting commission or concession. From time to time, soliciting
dealer fees are available to the Adviser on the tender of the Fund's portfolio
securities in so-called tender or exchange offers. Such soliciting dealer fees
are in effect recaptured for the Fund by the Adviser. At present no other
recapture arrangements are in effect.

Under the Advisory Agreement and as permitted by Section 28(e) of the
Securities Exchange Act of 1934, the Adviser may cause the Fund to pay a
broker-dealer which provides brokerage and research services to the Adviser an
amount of commission for effecting a securities transaction for the Fund in
excess of the amount other broker-dealers would have charged for the transaction
if the Adviser determines in good faith that the greater commission is
reasonable in relation to the value of the brokerage and research services
provided by the executing broker-dealer viewed in terms of either a particular
transaction or the Adviser's overall responsibilities to the Fund or to its
other clients. Not all of such services are useful or of value in advising the
Fund.

The term "brokerage and research services" includes advice as to the value
of securities, the advisability of purchasing or selling securities, and the
availability of purchasers or sellers of securities; furnishing analyses and
reports concerning issues, industries, securities, economic factors and trends,
portfolio strategy and the performance of accounts; and effecting securities
transactions and performing functions incidental thereto such as clearance and
settlement.

Although commissions paid on every transaction will, in the judgment of the
Adviser, be reasonable in relation to the value of the brokerage services
provided, commissions exceeding those which another broker might charge may be
paid to broker-dealers who were selected to execute transactions on behalf of
the Fund and the Adviser's other clients in part for providing advice as to the
availability of purchasers or sellers of securities and services in effecting
securities transactions and performing functions incidental thereto such as
clearance and settlement.

Broker-dealers may be willing to furnish statistical, research and other
factual information or services ("Research") to the Adviser for no consideration
other than brokerage or underwriting commissions. Securities may be bought or
sold from time to time through such broker-dealers on behalf of the Fund. The
Trust's Trustees (together with the Trustees of the other MFS Funds) have
directed the Adviser to allocate a total of $39,100 of commission business from
the MFS Funds to the Pershing Division of Donaldson Lufkin & Jenrette as
consideration for the annual renewal of certain publications provided by the
Lipper Analytical Securities Corporation (which provides information useful to
the Trustees in reviewing the relationship between the Fund and the Adviser).

The Adviser's investment management personnel attempt to evaluate the
quality of Research provided by brokers. Results of this effort are sometimes
used by the Adviser as a

10
<PAGE>
consideration in the selection of brokers to execute portfolio transactions.
However, the Adviser is unable to quantify the amount of commissions which will
be paid as a result of such Research because a substantial number of
transactions will be effected through brokers which provide Research but which
were selected principally because of their execution capabilities.

The management fee that the Fund pays to the Adviser will not be reduced as
a consequence of the Adviser's receipt of brokerage and research services. To
the extent the Fund's portfolio transactions are used to obtain such services,
the brokerage commissions paid by the Fund will exceed those that might
otherwise be paid, by an amount which cannot be presently determined. Such
services would be useful and of value to the Adviser in serving both the Fund
and other clients and, conversely, such services obtained by the placement of
brokerage business of other clients would be useful to the Adviser in carrying
out its obligations to the Fund. While such services are not expected to reduce
the expenses of the Adviser, the Adviser would, through use of the services,
avoid the additional expenses which would be incurred if it should attempt to
develop comparable information through its own staff.

For the Fund's fiscal year ended December 31, 1996, total brokerage
commissions of $379,000 were paid on transactions (other than U.S. Government
securities, purchased options transactions and short-term obligations) of
$539,713,521. For the Fund's fiscal year ended December 31, 1995, total
brokerage commissions of $254,000 were paid on total transactions (other than
U.S. Government securities, purchased options transactions and short-term
obligations) of $222,132,611. For the Fund's fiscal period ended December 31,
1994, total brokerage commissions of $90,000 were paid on total transactions
(other than U.S. Government securities, purchased options transactions and
short-term obligations) of $30,530,921.

In certain instances there may be securities which are suitable for the
Fund's portfolio as well as for that of one or more of the clients of the
Adviser or MFS or any subsidiary of MFS. Investment decisions for the Fund and
for such other clients are made with a view to achieving their respective
investment objectives. It may develop that a particular security is bought or
sold for only one client even though it might be held by, or bought or sold for,
other clients. Likewise, a particular security may be bought for one or more
clients when one or more other clients are selling that same security. Some
simultaneous transactions are inevitable when several clients receive investment
advice from the same investment adviser, particularly when the same security is
suitable for the investment objectives of more than one client. When two or more
clients are simultaneously engaged in the purchase or sale of the same security,
the securities are allocated among clients in a manner believed by the Adviser
to be equitable to each. It is recognized that in some cases this system could
have a detrimental effect on the price or volume of the security as far as the
Fund is concerned. In other cases, however, it is believed that the Fund's
ability to participate in volume transactions will produce better executions for
the Fund.

CAPITAL STOCK AND OTHER SECURITIES
- -------------------------------------------------------

The rights and preferences attached to the shares of the Fund are described
in the Prospectus (see "Description of Shares"). The Investment Company Act of
1940 requires that where more than one class or series of shares exists, each
class or series must be preferred over all other classes or series in respect of
assets specifically allocated to such class or series. Rule 18f-2 under the Act
provides that any matter required to be submitted by the provisions of the
Investment Company Act or applicable state law, or otherwise, to the holders of
the

11
<PAGE>
outstanding voting securities of an investment company such as the Fund shall
not be deemed to have been effectively acted upon unless approved by the holders
of a majority of the outstanding shares of each class or series affected by such
matter. Rule 18f-2 further provides that a class or series shall be deemed to be
affected by a matter unless the interests of each class or series in the matter
are substantially identical or that the matter does not affect any interest of
such class or series. However, the Rule exempts the selection of independent
public accountants, the approval of principal distribution contracts, and the
election of Trustees from the separate voting requirements of the Rule.

PURCHASE, REDEMPTION, AND PRICING OF SHARES
- -------------------------------------------------------

REDUCED SALES CHARGES. A reduction in the sales charge rate applicable to
sales of Fund shares may be obtained by volume discounts as described in the
Prospectus. In addition, members of qualified groups or persons purchasing
shares for retirement plans or individual retirement accounts (IRA's) may
purchase shares of the Fund at the same discounts charged on volume discount
purchases. Also, persons who transfer their investments from another investment
company, to which they paid a sales charge, will not be charged a sales charge.
Nor will the Fund Trustees, the Distributor, the Custodian, the Transfer Agent,
retirement or deferred compensation plans or trusts used to fund such plans or
the employees of any of the above, or investment advisers, financial planners,
agents, banks, or brokers directly involved in selling the Fund's shares and
whose firm has executed a selling agreement with the Distributor, or their
employees or the spouse or child of any of the above have to pay a sales charge.
Nor will investors who invest through an account as to which an investment
advisor, financial planner, agent, a bank or broker-dealer charges an account
management or transaction fee ("wrap fee"), provided the bank or broker-dealer
has a selling agreement with Distributor, have to pay a sales charge.

12
<PAGE>
As determined by the Distributor, qualified groups include the employees of
a corporation or a sole proprietorship, members, and employees of a partnership
or association (including, without limitation, members of tax-exempt
organizations enumerated under Sections 501(c)(3) and 501(c)(13) of the Internal
Revenue Code of 1986, or other organized groups of persons (the members of which
may include other qualified groups), provided that: (i) the group has at least
25 members, of which at least 10 members participate in the initial purchase;
(ii) the group has been in existence for at least six months; (iii) the group
has some purpose in addition to the purchase of investment company shares at a
reduced sales charge; and (iv) the group's sole organizational nexus or
connection is not that the members are credit card holders of a company, policy
holders of an insurance company, customers of a bank or a broker-dealer, clients
of an investment adviser, or security holders of a company.

An investor who purchases shares in amounts of $25,000 or more shall be
charged a reduced sales charge in accordance with the breakpoints set forth in
the Prospectus.

In addition, purchases of shares of the Fund by (i) Trustees, officers, and
full-time employees of the Fund, (ii) directors, officers, and full-time
employees of the Distributor or the Adviser, (iii) selected dealers, (iv)
Trustees, officers, partners, and full-time employees of selected dealers which
are not individuals, and (v) the spouse or child of those individuals included
in (i) and (iv) will not be subject to any sales charge nor will investors who
invest through an account as to which a bank or broker-dealer charges an account
management fee, provided the bank or broker-dealer has a selling agreement with
Distributor, have to pay a sales charge. Any of the persons listed in clauses
(i)-(iv) above and their spouses can also purchase shares for custodial or trust
accounts for their minor children.

LETTERS OF INTENT. Shares of the Fund may be purchased by a "single
purchaser," within a period of 13 months, pursuant to a Letter of Intent in the
form provided by the Transfer Agent. Such Letter of Intent shall state the
investor's intention to invest in such shares during such period in an amount
which, together with the value (at their maximum offering prices on the date of
the Letter of Intent) of the shares of the Fund then owned by such investor,
equals a specified dollar amount ($25,000 or more). Each purchase of shares made
pursuant to a Letter of Intent will be made at the public offering price, as
described in the then current Prospectus relating to such shares, which at the
time of purchase is applicable to a single transaction of the dollar amount
specified in the Letter of Intent. The term "single purchaser" includes an
individual, or an individual, his spouse and their children under the age of 21
purchasing for his

13
<PAGE>
or their own account (including an IRA account) including his or their own
trust, commonly known as living trusts; a trustee or other fiduciary purchasing
for a single trust, estate, or single fiduciary account, although more than one
beneficiary is involved; multiple trusts for the same employer; or trust
companies and bank trust departments placing orders with respect to funds over
which they exercise discretionary investment authority and which are held in a
fiduciary, agency, custodial, or similar capacity, provided all shares are held
of record in the name, or nominee name, of the trust company or bank.

An investor's Letter of Intent is not a binding commitment of the investor
to purchase or a binding obligation of the Fund or the Distributor to sell a
specified dollar amount of shares qualifying for a reduced sales charge.
Accordingly, out of his initial purchase (and subsequent purchases if
necessary), 5% of the dollar amount of purchases required to complete the
investor's investment is held in escrow in the form of shares (valued at the
purchase price thereof) registered in the investor's name until he completes his
investment, at which time escrowed shares are deposited to his account. If the
investor does not complete his investment and does not within 20 days after
written request by the Transfer Agent or his dealer pay the difference between
the sales charge on the dollar amount specified in his Letter of Intent and the
sales charge on the dollar amount of actual purchases, the difference will be
realized through the redemption of an appropriate number of the escrowed shares
and any remaining escrowed shares will be deposited to the investor's account.

COMBINATION PURCHASE PRIVILEGE. Purchases, either singly or in any
combination, of shares of the Fund, if made at a single time by a single
purchaser, will be combined for the purpose of determining whether the total
dollar amount of such purchases entitles the purchaser to a reduced sales charge
on any of such purchases. Each purchase of shares will then be made at the
public offering price, as described in the then current Prospectus relating to
such shares, which at the time of such purchase is applicable to a single
transaction of the total dollar amount of all such purchases. The term "single
purchaser" includes an individual, or an individual, his spouse and their
children under the age of 21, purchasing for his or their own account (including
an IRA account), including his or their own trust, commonly known as living
trusts; a trustee or other fiduciary purchasing for a single trust, estate, or
single fiduciary account, although more than one beneficiary is involved;
multiple trusts for the same employer; or trust companies and bank trust
departments placing orders with respect to funds over which they exercise
discretionary investment authority and which are held in a fiduciary, agency,
custodial, or similar capacity, provided all shares are held of record in the
name, or nominee name, of the trust company or bank.

RIGHTS OF ACCUMULATION. Purchases, either singly or in any combination, of
shares of the Fund, if made at a single time by a "single purchaser" (as defined
above) who already owns shares of the Fund, will be combined for the purpose of
determining whether the dollar amount of such purchases plus the current value
(at their maximum offering price) of shares of the Fund then owned by such
purchaser equals a dollar amount of purchases entitling the purchaser to a
reduced sales charge on any of such purchases, provided that at the time of any
such purchases, the purchaser, either directly or through his broker or dealer,
furnishes the Transfer Agent with sufficient information as to account
registrations and account numbers to permit verification that one or more of his
purchases qualifies for a reduced sales charge.

REDEMPTION OF SHARES. The Prospectus, under "Redemption of Shares"
describes the requirements and methods available for effecting redemption. The
Fund may suspend the right of redemption or delay payment more than seven days
(a) during any period when the New York Stock Exchange or any other applicable
exchange, is closed (other than a customary weekend

14
<PAGE>
and holiday closing), (b) when trading on the New York Stock Exchange, or any
other applicable exchange, is restricted, or an emergency exists as determined
by the Securities and Exchange Commission ("SEC") or the Fund so that disposal
of the Fund's investments or a fair determination of the net asset value of the
Fund is not reasonably practicable, or (c) for such other periods as the SEC by
order may permit for protection of the Fund's shareholders.

The Fund normally redeems shares for cash. However, the Board of Trustees
can determine that conditions exist making cash payments undesirable. If they
should so determine, redemption payments could be made in securities valued at
the value used in determining net asset value. There may be brokerage and other
costs incurred by the redeeming shareholder in selling such securities.

DETERMINATION OF NET ASSET VALUE. As described in the Prospectus under
"Purchase and Pricing of Shares--Valuation of Shares," the net asset value of
shares of the Fund is determined once daily as of 4:00 p.m. New York time on
each day during which the New York Stock Exchange, or other applicable exchange,
is open for trading. The New York Stock Exchange is scheduled to be closed for
trading on the following days: New Year's Day, Washington's Birthday, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and
Christmas Day. The Board of Trustees of the Exchange reserves the right to
change this schedule. In the event that the New York Stock Exchange or the
national securities exchanges on which small cap equities are traded adopt
different trading hours on either a permanent or temporary basis, the Board of
Trustees of the Fund will reconsider the time at which net asset value is to be
computed.

In determining the value of the assets of the Fund, the securities for which
market quotations are readily available are valued at market value, which is
currently determined using the last reported sale price, or, if no sales are
reported--as is the case with many securities traded over-the-counter--the last
reported bid price. Debt securities (other than short-term obligations, which
are valued on the basis of amortized cost) are normally valued on the basis of
valuations provided by a pricing service when such prices are believed to
reflect the fair value of such securities. Prices provided by the pricing
service may be determined without exclusive reliance on quoted prices and take
into account appropriate factors such as institution-size trading in similar
groups of securities, yield, quality of issue, trading characteristics, and
other market data. Use of a pricing service has been approved by the Board of
Trustees. All other securities and assets are valued at their fair value as
determined in good faith by the Board of Trustees, although the actual
calculations may be made by persons acting pursuant to the direction of the
Board of Trustees.

TAXES
- -------------------------------------------------------

The Fund has elected to be treated and intends to qualify each year as a
"regulated investment company" under Subchapter M of the Internal Revenue Code
of 1986 as amended (the "Code"), by meeting all applicable requirements of
Subchapter M, including requirements as to the nature of the Fund's gross
income, the amount of Fund distributions, and the composition and holding period
of the Fund's portfolio assets. Because the Fund intends to distribute all of
its net investment income and net realized capital gains to shareholders in
accordance with the timing requirements imposed by the Code, it is not expected
that the Fund will be required to pay any federal income or excise taxes,
although the Fund's foreign-source income may be subject to foreign withholding
taxes. If the Fund should fail to qualify as a

15
<PAGE>
"regulated investment company" in any year, the Fund would incur a regular
corporate federal income tax upon its taxable income and Fund distributions
would generally be taxable as ordinary dividend income to shareholders.

Shareholders normally will have to pay federal income taxes, and any state
or local taxes, on the ordinary dividends and capital gain dividends they
receive from the Fund. Dividends paid out of net investment income and net
short-term capital gains of the Fund will be taxable to shareholders as ordinary
income regardless of whether such distributions are reinvested in additional
shares or paid in cash. If a portion of the Fund's net investment income is
derived from dividends from domestic corporations, a corresponding portion of
the dividends paid out of such income may be eligible for the dividends-received
deduction. Shareholders will be informed as to the portion, if any, of dividends
received by them which will qualify for the dividends-received deduction,
provided that the recipient otherwise qualifies for that deduction with respect
to its holding of Fund shares. Availability of the deduction for particular
shareholders is subject to certain limitations, and deducted amounts may be
subject to the alternative minimum tax or result in certain basis adjustments.

Dividends paid out of the net capital gain of the Fund that are designated
as capital gain dividends by the Fund will be taxable to shareholders as
long-term capital gains regardless of how long the shareholders have held their
shares. Such dividends will not be eligible for the dividends-received
deduction.

Any dividends paid shortly after a purchase by an investor may have the
effect of reducing the per share net asset value of the investor's shares by the
per share amount of the dividends. Furthermore, such dividends, although in
effect a return of capital, are subject to federal income taxes. Therefore,
prior to purchasing shares of the Fund, the investor should carefully consider
the impact of dividends, including capital gains distributions, which are
expected to be or have been announced.

The Fund's current dividend and accounting policies will affect the amount,
timing, and character of distributions to shareholders, and may, under certain
circumstances, make an economic return of capital taxable to shareholders. Any
investment in certain securities purchased at a market discount will cause the
Fund to recognize income prior to the receipt of cash payments with respect to
those securities. In order to distribute its recognized income and avoid a tax
on the Fund, the Fund may be required to liquidate portfolio securities that it
might otherwise have continued to hold, potentially resulting in additional
taxable gain or loss to the Fund. Certain positions held by the Fund that
substantially diminish its risk of loss with respect to other positions in its
portfolio may constitute "straddles," and may be subject to special tax rules
that would cause deferral of Fund losses, adjustments in the holding periods of
Fund securities, and conversion of short-term into long-term capital losses.

Special tax considerations apply with respect to foreign investments of the
Fund. Foreign exchange gains and losses realized by the Fund will generally be
treated as ordinary income and losses. Use of foreign currencies for non-hedging
purposes may be limited in order to avoid a tax on the Fund. Investment by the
Fund in certain "passive foreign investment companies" may also be limited in
order to avoid a tax on the Fund. Investment income received by the Fund from
foreign securities may be subject to foreign income taxes withheld at the
source; the Fund does not expect to be able to pass through to shareholders
foreign tax credits or deductions with respect to such foreign taxes. The United
States has entered into tax treaties with many foreign

16
<PAGE>
countries that may entitle the Fund to a reduced rate of tax or an exemption
from tax on such income; the Fund intends to qualify for treaty reduced rates
where available. It is not possible, however, to determine the Fund's effective
rate of foreign tax in advance since the amount of the Fund's assets to be
invested within various countries is not known.

Upon a disposition or redemption of shares of the Fund that are held as a
capital asset, the shareholder will generally recognize capital gain or loss
(long-term or short-term, depending upon the shareholder's holding period for
the redeemed shares) measured by the difference between the redemption price and
the basis of the shares. Any loss recognized upon the sale or exchange of shares
of the Fund within six months from the date of their purchase will be treated as
long-term capital loss to the extent of any amounts treated as dividends paid
during such period out of the net long-term capital gain of the Fund. Any loss
realized upon a disposition of shares may also be disallowed under rules
relating to wash sales. Gain may be increased (or loss reduced) upon a
redemption of shares of the Fund within 90 days after their purchase followed by
any purchase without payment of an additional sales charge (including purchases
by exchange or by reinvestment) of shares of the Fund or Class A shares of
another MFS Fund (or any other shares of an MFS Fund generally sold subject to a
sales charge).

Shortly after the end of each year, the Fund will issue to each person who
was a shareholder at any time in the prior year a statement of the federal
income tax status of all distributions made to such shareholder.

Shareholders who fail to provide correct taxpayer identification numbers or
fail to certify as to no loss of exemption from backup withholding or otherwise
fail to comply with applicable requirements of the law relating to backup
withholding will be subject to backup withholding with respect to dividends and
redemptions at the rate of 31% unless they are corporations or come within other
exempt categories. Any amounts paid as backup withholding will be creditable
against the federal income tax liabilities of the affected shareholders. All
shareholders should consult their own tax advisers with regard to the tax
consequences applicable to their respective investments in the Fund.

The foregoing discussion relates solely to United States federal income tax
laws as applicable to United States persons (that is, citizens and residents of
the United States and domestic corporations, partnerships, trusts, and estates).
Each shareholder who is not a United States person should consult his tax
adviser regarding the United States and non-United States tax consequences of
ownership of shares, including the possibility that distributions by the Fund
may be subject to a United States withholding tax at the rate of 30%.

The Fund will be subject to a nondeductible excise tax for any year equal to
4% of the "required distribution" for the year over the "distributed amount" for
the year. For this purpose, the term "required distribution" means, with respect
to any year, the sum of (a) 98% of the Fund's "ordinary income" (that is, its
taxable income determined by excluding its net capital gain, if any, by
disallowing the dividends-received and net operating loss deductions, and by not
taking into account any capital gain or loss), (b) 98% of its capital gain net
income (that is, the excess of capital gains over capital losses) for the
one-year period ending on December 31 of the year, and (c) the "prior year
shortfall" (that is, the excess, if any, of the "grossed-up required
distribution" for the prior year over the "distributed amount" for such year).
For this purpose, the term "grossed-up required distribution" means, with
respect to any year, the required distribution for the year (determined by
including 100% of the Fund's ordinary income and capital gain net income) and
the term "distributed amount" means, with respect to any year, the

17
<PAGE>
sum of (a) the amount of dividends-paid or deemed paid during the year, (b) any
amount on which the Fund is required to pay corporate tax for the year, and (c)
the excess, if any, of the distributed amount for the prior year over the
required distribution for such year.

The Fund will not be subject to income tax in Delaware for any year in which
it qualifies as a regulated investment company.

CALCULATION OF PERFORMANCE DATA
- -------------------------------------------------------

Performance information for the Fund may appear in advertisements, sales
literature, or reports to shareholders or prospective shareholders. Performance
information in advertisements and sales literature may be expressed as yield or
total return on the Fund.

Quotations of yield for the Fund will be based on all investment income per
share earned during a particular 30-day period (including dividends and
interest), less expenses accrued during the period ("net investment income"),
and are computed by dividing net investment income by the value of the Fund on
the last day of the period, according to the following formula:

<TABLE>
<C> <C> <S>
YIELD = 2[[a-b+1]/6/-1]
---
cd
where a = dividends and interest earned, as calculated in accordance
with the SEC's instructions, during the period by the Fund
b = expenses accrued for the period (net of any reimbursements)
c = the average daily number of shares outstanding during the
period that were entitled to receive dividends, and
d = the maximum offering price per share on the last day of the
period
</TABLE>

The average annual total return on the Fund represents an annualization of
the Fund's total return ("T" in the formula below) over a particular period and
is computed by finding the current percentage rate which will result in the
ending redeemable value ("ERV" in the formula below) of a $1,000 payment* ("P"
in the formula below) made at the beginning of a one-, five-, or ten-year
period, or for the period from the date of commencement of the Fund's operation,
if shorter ("n" in the formula below). The following formula will be used to
compute the average annual total return for the Fund:

P (1 + T)/n/ = ERV

In addition to the foregoing, the Fund may advertise its total return over
different periods of time by means of aggregate, average, year-by-year, or other
types of total return figures.

The manner in which total return will be calculated for public use is
described above. The average annual total return for the Fund for the fiscal
year ended December 31, 1996, and for the period from commencement of operations
on January 3, 1994 to December 31, 1996 was 11.96% and 33.03%, respectively,
including the effect of the sales charge and 15.44% and 35.01%, respectively,
without the effect of the sales charge. The average annual total return for the
Fund would have been lower had an expense limitation not been in effect.

Performance information for the Fund shall reflect only the performance of a
hypothetical investment during the particular time period on which the
calculations are based. Performance

18
<PAGE>
information should be considered in light of the investment objective and
policies, characteristics and quality of the Fund, and the market conditions
during the given time period, and should not be considered as a representation
of what may be achieved in the future.

As summarized in the Prospectus under the heading "Performance and Yield,"
the total return of the Fund may be quoted in advertisements and sales
literature.

* The Fund's Total Return Calculation assumes the maximum sales load is deducted
from the initial $1,000 payment.

From time to time the Fund may, as appropriate, quote Fund rankings or
reprint all or a portion of evaluations of fund performance and operations
appearing in various independent publications, including but not limited to the
following: Money, Fortune, U.S. News and World Report, Kiplinger's Personal
Finance, The Wall Street Journal, Barron's, Investors Business Daily, Newsweek,
Financial World, Financial Planning, Investment Advisor, USA Today, Pensions and
Investments, SmartMoney, Forbes, Global Finance, Registered Representative,
Institutional Investor, the Investment Company Institute, Johnson's Charts,
Morningstar, Lipper Analytical Services, Inc., CDA Wiesenberger, Shearson Lehman
and Saloman Bros. Indices, Ibbotson, Business Week, Lowry Associates, Media
General, Investment Company Data, The New York Times, Your Money, Strangers
Investment Advisor, Financial Planning on Wall Street, Standard and Poor's,
Individual Investor, THE 100 BEST MUTUAL FUNDS YOU CAN BUY by Gordon K.
Williamson, Consumer Price Index, and Sanford C. Bernstein & Co. Fund
performance may also be compared to the performance of other mutual funds
tracked by financial or business publications or periodicals. The Fund may also
quote evaluations mentioned in independent radio or television broadcasts and
may use charts and graphs to illustrate the past performance of various indices
such as those mentioned above and illustrations using hypothetical rates of
return to illustrate the effects of compounding and tax-deferral. The Fund may
advertise examples of the effects of periodic investment plans, including the
principle of dollar cost averaging. In such a program, an investor invests a
fixed dollar amount in a fund at periodic intervals, thereby purchasing fewer
shares when prices are high and more shares when prices are low. While such a
strategy does not assure a profit or guard against a loss in a declining market,
the investor's average cost per share can be lower than if fixed numbers of
shares are purchased at the same intervals.

From time to time, the Fund may discuss or quote its current portfolio
manager as well as other investment personnel, including such persons' views on:
the economy; securities markets; portfolio securities and their issuers;
investment philosophies, strategies, techniques and criteria used in the
selection of securities to be purchased or sold for the Fund; the Fund's
portfolio holdings; the investment research and analysis process; the
formulation and evaluation of investment recommendations; and the assessment and
evaluation of credit, interest rate, market and economic risks and similar or
related matters.

From time to time the Fund may also discuss or quote the views of its
distributor, its investment adviser and other financial planning, legal, tax,
accounting, insurance, estate planning and other professionals, or from surveys,
regarding individual and family financial planning. Such views may include
information regarding: retirement planning; tax management strategies; estate
planning; general investment techniques (E.G., asset allocation and disciplined
saving and investing); business succession; ideas and information provided
through the MFS Heritage Planning-SM- program, an inter-generational financial
planning assistance program; issues with respect to insurance (E.G., disability
and life insurance and Medicare supplemental insurance); issues

19
<PAGE>
regarding financial and health care management for elderly family members; and
other similar or related matters.

MFS FIRSTS: MFS has a long history of innovations.

-- 1924 -- Massachusetts Investors Trust is established as the first
open-end mutual fund in America.

-- 1924 -- Massachusetts Investors Trust is the first mutual fund to make
full public disclosure of its operations in shareholder reports.

-- 1932 -- One of the first internal research departments is established to
provide in-house analytical capability for an investment management firm.

-- 1933 -- Massachusetts Investors Trust is the first mutual fund to
register under the Securities Act of 1933 ("Truth in Securities Act" or
"Full Disclosure Act").

-- 1936 -- Massachusetts Investors Trust is the first mutual fund to allow
shareholders to take capital gain distributions either in additional
shares or cash.

-- 1976 -- MFS-Registered Trademark- Municipal Bond Fund is among the first
municipal bond funds established.

-- 1979 -- Spectrum becomes the first combination fixed/variable annuity
with no initial sales charge.

-- 1981 -- MFS-Registered Trademark- World Governments Fund is established
as America's first globally fixed-income mutual fund.

-- 1984 -- MFS-Registered Trademark- Municipal High Income Fund is the first
open-end mutual fund to seek high tax-free income from lower-rated
municipal securities.

-- 1986 -- MFS-Registered Trademark- Managed Sectors Fund becomes the first
mutual fund to target and shift investments among industry sectors for
shareholders.

-- 1986 -- MFS-Registered Trademark- Municipal Income Trust is the first
closed-end, high-yield municipal bond fund traded on the New York Stock
Exchange.

-- 1987 -- MFS-Registered Trademark- Multimarket Income Trust is the first
closed-end, multimarket high income fund listed on the New York Stock
Exchange.

-- 1989 -- MFS-Registered Trademark- Regatta becomes America's first
non-qualified market-value-adjusted fixed/variable annuity.

-- 1990 -- MFS-Registered Trademark- World Total Return Fund is the first
global balanced fund.

-- 1993 -- MFS-Registered Trademark- World Growth Fund is the first global
emerging markets fund to offer the expertise of two sub-advisers.

-- 1993 -- MFS becomes money manager of MFS-Registered Trademark- Union
Standard Trust, the first Trust to invest in companies deemed to be
union-friendly by an Advisory Board of senior labor officials, senior
managers of companies with significant labor contracts, academics and
other national labor leaders or experts.

20
<PAGE>
INDEPENDENT AUDITORS AND FINANCIAL STATEMENTS
- -------------------------------------------------------

Deloitte & Touche LLP are the Fund's independent auditors, providing audit
services and assistance and consulation with respect to the preparation of
filings with the SEC.

The Portfolio of Investments at December 31, 1996, the Statement of Assets
and Liabilities at December 31, 1996, the Statement of Operations for the year
ended December 31, 1996, the Statement of Changes in Net Assets for each of the
two years in the period ended December 31, 1996, the Notes to Financial
Statements and the Independent Auditors' Report, each of which is included in
the Annual Report to shareholders of the Fund, are incorporated by reference
into this SAI and have been so incorporated in reliance upon the report of
Deloitte & Touche LLP, independent auditors, given upon their authority as
experts in accounting and auditing. A copy of the Annual Report accompanies this
SAI.

21
<PAGE>
APPENDIX
- -------------------------------------------------------

A-1 AND P-1 COMMERCIAL PAPER RATINGS

The Fund will invest only in commercial paper which, at the date of
investment, is rated A-1 by Standard & Poor's Corporation ("S&P") or P-1 by
Moody's Investors Services, Inc. ("Moody's"), or, if not rated, is issued or
guaranteed by companies which at the date of investment have an outstanding debt
issue rated AA or higher by Standard & Poor's or Aa or higher by Moody's.

Commercial paper rated A-1 by S&P has the following characteristics: (1)
liquidity ratios are adequate to meet cash requirements; (2) long-term senior
debt is rated "A" or better; (3) the issuer has access to at least two
additional channels of borrowing; (4) basic earnings and cash flow have an
upward trend with allowance made for unusual circumstances; (5) typically, the
issuer's industry is well established and the issuer has a strong position
within the industry; and (6) the reliability and quality of management are
unquestioned.

The rating P-1 is the highest commercial paper rating assigned by Moody's.
Among the factors considered by Moody's in assigning ratings are the following:
(1) evaluation of the management of the issuer; (2) economic evaluation of the
issuer's industry or industries and an appraisal of speculative-type risks which
may be inherent in certain areas; (3) evaluation of the issuer's products in
relation to competition and customer acceptance; (4) liquidity; (5) amount and
quality of long-term debt; (6) trend of earnings over a period of ten years; (7)
financial strength of a parent company and the relationship which exists with
the issuer; and (8) recognition by the management of obligations which may be
present or may arise as a result of public interest questions and preparations
to meet such obligations.

22
<PAGE>
ANNUAL REPORT, December 31,1996

NAVELLIER SERIES FUND
1 East Liberty, Third Floor
Reno, NV 89501
(800) 887-8671

- --------------------------------------------------------------------------------
February 1997
Dear Shareholder:

For the year 1996, the Navellier Aggressive Small Cap Equity Portfolio ("the
Fund") returned the 15.44% (11.98% after the maximum load). This compares
favorably to 14.76% for the Russell 2000*, 14.51% for the Lipper Small
Company Index** and not so favorably to the Nasdaq Composite*** which
returned 22.71% over the same period. The Fund's annualized return since
public offering (April 1,1994) is 26.21% (24.81% after the maximum load). The
annualized returns for the Russell 2000 and the Nasdaq Composite over the
same period were 14.30% and 22.22%, respectively. During the first six months
of 1996, the Navellier Aggressive Small Cap Equity Portfolio gained 27.64%
(23.79% after the maximum load), compared to a 12.63% gain for the Nasdaq
Composite and a 9.70% gain for the Russell 2000. During the second half of
1996 the Fund lost 9.56% (12.27% after the maximum load), compared to a 8.95%
positive return for the Nasdaq Composite and a 4.61% positive return for the
Russell 2000.

Navellier Aggressive Small Cap Equity Portfolio

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHICS

<TABLE>
<CAPTION>
NAVELLIER AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
<S> <C> <C> <C>
DATE Small Cap Portfolio NASDAQ Composite Russell 2000
3/31/1994 $10,000 $10,000 $10,000
4/30/1994 $9,889 $9,871 $10,059
5/31/1994 $9,667 $9,889 $9,929
6/30/1994 $9,213 $9,496 $9,571
7/31/1994 $9,384 $9,714 $9,721
8/31/1994 $9,768 $10,298 $10,249
9/30/1994 $10,030 $10,280 $10,202
10/31/1994 $10,494 $10,458 $10,158
11/30/1994 $10,555 $10,092 $9,729
12/31/1994 $10,616 $10,114 $9,972
1/31/1995 $10,484 $10,158 $9,832
2/28/1995 $10,989 $10,676 $10,219
3/31/1995 $11,372 $10,992 $10,387
4/30/1995 $11,726 $11,352 $10,602
</TABLE>

The above chart indicates the return of $10,000 invested in the Navellier
Aggressive Small Cap Equity Portfolio on April 1, 1994. As the chart shows
December 31, 1996, the value of the investment would have grown to $18,393, a
83.93% increase. For comparison purposes, look at how the NASDAQ Composite
and the Russell 2000 performed over the same period. An investment of $10,000
in the NASDAQ Composite in the same period would have grown to $17,365, a
73.65% increase. Similarly an investment of $10,000 in the Russell 2000 over
the same period would have grown to $14,443, a 44.43% increase.

The above charts and performance numbers assume reinvestment of all
distributions.

Please be aware that past performance is no indication of future performance.
The investment return and principal value of an investment will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than their
original cost.

<PAGE>

The Fund generally lagged behind the overall stock market during the last six
months of 1996 since primarily large capitalization stocks performed well
during the second half of 1996. One of the startling statistics for 1996 was
highlighted in an article in the January 13, 1997 issue of Fortune, which
stated that the Nasdaq Composite, excluding the 100 largest stocks, was
actually up less than 3% in 1996. In other words, 1996 was predominantly a
large capitalization stock market rally, especially in the second half of the
year. Virtually none of the largest 100 Nasdaq stocks were in the Navellier
Aggressive Small Cap Equity Portfolio. Considering that the Nasdaq Composite
was up less than 3% in 1996 when the 100 largest stocks are excluded, we are
quite satisfied that the Fund had positive results in 1996.

The historical valuation of the stocks in the Navellier Aggressive Small Cap
Equity Portfolio remain very cheap relative to the Dow Industrials and S&P
500. Wave after wave of money flowing into index funds has benefited the S&P
500 and moved it into the high range of its historical price/earnings ratio.
At over 21 times current earnings, the S&P 500 is very expensive, especially
since the most optimistic analysts call for only 14% to 15% earnings growth
in fiscal 1997. The median P/E for stocks in the Navellier Aggressive Small
Cap Equity Portfolio is 17.5 and they literally have much more earnings
growth that the S&P 500. Looking forward, the average stock in the Fund
should continue to have far greater earnings growth than the S&P 500 despite
similar price/earnings ratios. When the current mania fueling index funds
settles down and Wall Street starts rotating into stocks that represent
outstanding fundamental values, my favorite stocks in the Fund should benefit
tremendously. In my opinion, we are now on the verge of a "stock picking"
environment, where predominantly stocks with outstanding fundamental
characteristics, such as those in the Navellier Aggressive Small Cap Equity
Portfolio, will benefit.

On the large scale, economists are having a hard time predicting growth
because increasing productivity is hard to account for in their economic
models. Most economists are predicting 2% to 3% economic growth in 1997,
which would be a slowdown from the more than 4% growth experienced in the
second half of 1996. However, these economists are not factoring in
continuing productivity gains that have bolstered the U.S. economy, resulting
in exceptionally high growth without inflation. The implicit price deflator
is an inflation indicator without volatile food and energy prices. It is most
reliable indicator of inflation and is now at its lowest point in decades.
The recent 0.3% drop in wholesale prices in January is further evidence that
inflation is now deader than dead. The bond market has celebrated this
positive inflation news and as of this writing, Treasury Bond yields are near
the 6.5% level. The low inflation and low interest rate environment sets a
very positive tone for the stock market for the next several months.

Long-term, the Navellier Aggressive Small Cap Equity Portfolio continues to
perform quite well relative to other small capitalization growth funds. We
are eagerly awaiting our three year Lipper and Morningstar Ratings and are
confident that we will receive an outstanding long-term rating. To ensure our
high performance standard, the Fund was closed to new investors on April 16,
1996. Existing shareholders and fee-based financial advisors can continue to
purchase additional shares in the Fund. Existing shareholders will be
receiving a proxy to convert the Navellier Aggressive Small Cap Equity
Portfolio to a pure no-load fund. This conversion will allow us to cut
management fees and save operating expenses. After conversion, existing
shareholders will be able to purchase new shares with no load charged. We
would appreciate it if you could mail back your proxy votes as soon as
possible.

2
<PAGE>

I want to personally thank all shareholders in the Navellier Aggressive Small
Cap Equity Portfolio for selecting us to manage some of your assets. We feel
very obligated to our shareholders and have already closed the Fund to ensure
our high performance standard. Always feel free to contact us if you have any
questions or we can help you in any way.

Sincerely,

/s/ Louis G. Navellier

LOUIS G. NAVELLIER

This material has been preceded by a Navellier Aggressive Small Cap Equity
Portfolio prospectus.

* The Russell 2000 index is an unmanaged index consisting of the smallest
2000 stocks in the Russell 3000 Index. It is considered representative of
the small cap market in general. It is not an investment product available
for purchase.

** The Lipper Small Company Index is an unmanaged net asset value weighted
index of 30 mutual funds that invest primarily in companies with small
market capitalizations.

*** The Nasdaq Composite is an unmanaged index consisting of approximately
5,500 stocks. It is considered representative of the stock market as a
whole. It is not an investment product available for purchase.

3
<PAGE>

December 31, 1996 Navellier Aggressive Small Cap Equity Portfolio
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS

- -----------------------------------------------------------------
Market Value
Shares (Note 1)
- -----------------------------------------------------------------
COMMON STOCKS
Aerospace and Defense -- 0.66%
40,000 Oregon Metallurgical Corp.* $ 1,290,000
------------
Airlines -- 1.33%
174,200 Mesaba Holdings, Inc.* 2,591,225
------------
Aluminum/Metals -- 1.62%
50,000 RMI Titanium Co.* 1,406,250
50,100 Reliance Steel and
Aluminum Co. 1,753,500
------------
3,159,750
------------
Banks - 1.68%
40,000 Andover Bancorp, Inc. 1,025,000
50,000 City National Corp. 1,081,250
40,000 RCSB Financial, Inc. 1,160,000
------------
3,266,250
------------
Basic Materials -- 0.76%
40,000 Lone Star Industries, Inc. 1,475,000
------------
Computer Hardware -- 4.92%
50,000 Centennial Technologies,
Inc.* 2,600,000
35,000 ENCAD, Inc.* 1,443,750
200,000 Iomega Corp.* 3,475,000
75,000 Tech Data Corp.* 2,053,125
------------
9,571,875
------------
Computer Software -- 8.14%
35,500 Acceler8 Tech Corp.* 694,469
140,000 Brooktrout Technology, Inc.* 3,920,000
50,000 Legato Systems, Inc.* 1,631,250
101,000 Rational Software Corp.* 3,995,813
47,000 Remedy Corp.* 2,526,250
65,000 Viasoft, Inc.* 3,071,250
------------
15,839,032
------------
Diversified Technology -- 5.24%
60,000 Dyantech Corp.* 2,655,000
70,000 Engineered Support
Systems, Inc. 1,032,500
42,000 Lindsay Manufacturing Co. 1,963,500
125,200 Zoltek Companies, Inc.* 4,554,150
------------
10,205,150
------------
Education -- 3.42%
159,525 Apollo Group, Inc.* 5,334,117
100,000 Childrens Comprehensive
Services* 1,312,500
------------
6,646,617
------------
Electronics -- 1.73%
37,800 Kuhlman Corp. 732,375
248,000 Zytec* 2,635,000
------------
3,367,375
------------
Energy -- 0.55%
40,000 Holly Corp. 1,070,000
------------
Food -- 1.74%
70,000 Fresh America Corp.* 1,155,000
70,000 Riser Foods, Inc. 2,222,500
------------
3,377,500
------------
Healthcare -- 0.76%
50,000 SONUS Pharmaceuticals,
Inc.* 1,487,500
------------
Heavy Machinery/Construction -- 1.07%
60,800 Gardner Denver Machinery* 2,082,400
------------
Home Furnishings -- 1.45%
30,000 Ethan Allen Interiors, Inc. 1,155,000
58,900 Stanley Furniture Company,
Inc. * 1,170,637
50,000 Winsloew Furniture, Inc.* 487,500
------------
2,813,137
------------
Home Construction -- 0.58%
40,000 Palm Harbor Homes, Inc.* 1,120,000
------------
Insurance -- 0.63%
20,000 Orion Capital Corp. 1,222,500
------------
Industrial and Commercial
Services -- 3.61%
44,200 Amerco, Inc.* 1,547,000
40,000 DT Industries, Inc. 1,400,000
75,000 Mail Well, Inc.* 1,228,125
122,000 Shaw Group, Inc.* 2,851,750
------------
7,026,875
------------

* Non-income producing.

See Notes to Financial Statements.

4
<PAGE>

December 31, 1996 Navellier Aggressive Small Cap Equity Portfolio
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)

- -----------------------------------------------------------------
Market Value
Shares (Note 1)
- -----------------------------------------------------------------
Manufactured Housing -- 1.46%
100,000 Coachmen Industries, Inc. $ 2,837,500
------------
Natural Gas -- 1.16%
100,000 NUI Corp. 2,262,500
------------
Nonclassifiable Establishment -- 1.17%
65,000 Oppenheimer Capital LP 2,275,000
------------
Oil -- 4.10%
84,400 Cliffs Drilling Co.* 5,338,300
100,000 Comstock Resources, Inc.* 1,300,000
45,200 Swift Energy Co.* 1,350,350
------------
7,988,650
------------
Oil & Gas Exploration -- 7.64%
50,000 American Oilfield Divers,
Inc.* 593,750
20,000 Cooper Cameron Corp.* 1,530,000
30,000 Flores & Rucks, Inc.* 1,597,500
135,000 Marine Drilling Companies,
Inc.* 2,657,812
100,000 Plains Resources, Inc.* 1,562,500
110,000 Seacor Holdings, Inc.* 6,930,000
------------
14,871,562
------------
Pharmaceuticals -- 7.23%
50,400 Cardinal Health, Inc. 2,935,800
100,000 Herbalife International, Inc. 3,262,500
124,875 Jones Medical Industries, Inc. 4,573,547
75,000 Medicis Pharmaceutical
Corp.* 3,300,000
------------
14,071,847
------------
Real Estate -- 0.86%
68,000 Fairfield Communities, Inc.* 1,683,000
------------
Retailers -- 13.24%
100,000 American Eagle Outfitters,
Inc.* 787,500
292,500 Claires Stores, Inc. 3,802,500
140,000 Eagle Hardware and Garden,
Inc.* 2,905,000
100,000 Equity Marketing, Inc.* 1,850,000
100,000 Finish Line, Inc.* 2,112,500
100,000 Funco, Inc.* 837,500
60,000 Pacific Sunwear of California* 1,545,000
164,500 Paul Harris Stores, Inc.* 2,919,875
93,000 Ross Stores, Inc. 4,650,000
104,000 Wet Seal, Inc.* 2,223,000
100,000 Tuesday Morning Corp.* 2,137,500
------------
25,770,375
------------
Savings and Loans -- 3.37%
312,000 Imperial Credit Industries,
Inc.* 6,552,000
------------
Semiconductors and Related -- 1.56%
100,000 Chips and Technologies, Inc.* 1,825,000
25,000 Radisys Corp.* 1,218,750
------------
3,043,750
------------
Steel -- 1.12%
85,900 Olympic Steel, Inc.* 2,179,713
------------
Technical Services -- 0.52%
27,400 SBS Technologies, Inc.* 1,013,800
------------
Telecommunications -- 4.20%
120,600 ATC Communications, Inc.* 1,597,950
216,000 Pairgain Technologies, Inc.* 6,574,500
------------
8,172,450
------------
Temporary Staffing - 4.56%
152,500 AccuStaff, Inc.* 3,221,562
276,000 Employee Solutions, Inc. 5,658,000
------------
8,879,562
------------
Vehicle Parts and Equipment - 0.57%
44,500 Arvin Industries, Inc. 1,101,375
------------
Vitamins/Health Foods -- 1.40%
100,000 Rexall Sundown, Inc.* 2,718,750
------------
Total Common Stocks -- 94.05%
(Cost $146,155,936) 183,034,020
------------

* Non-income producing.

See Notes to Financial Statements.

5
<PAGE>

December 31, 1996 Navellier Aggressive Small Cap Equity Portfolio
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)

- -----------------------------------------------------------------
Market Value
Shares (Note 1)
- -----------------------------------------------------------------
REPURCHASE AGREEMENTS -- 5.95%
With PaineWebber at 6.00%, dated
12/31/96, due 1/2/97, collateralized by
U.S. Treasury Bills, due 5/1/97 (Cost
$11,578,000) 11,578,000
------------
Total Investments -- 100.00%
(Cost $157,733,936) $194,612,020
============

See Notes to Financial Statements.

6
<PAGE>

December 31, 1996 Navellier Aggressive Small Cap Equity Portfolio
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES

- --------------------------------------------------------------------------------
Assets
Securities at Value (Note 1, see portfolio for cost
information) .............................................. $194,612,020
Cash in Custodian Bank ...................................... 18,324
Receivable for Securities Sold .............................. 748,475
Receivable for Shares Sold .................................. 157,806
Dividends Receivable ........................................ 26,370
Interest Receivable ......................................... 1,930
Unamortized Organizational Costs (Note 1) ................... 18,118
-----------
Total Assets .............................................. 195,583,043
-----------
Liabilities
Payable for Securities Purchased ............................ 4,444,194
Payable for Shares Redeemed ................................. 738,267
Investment Advisory Fee Payable (Note 2) .................... 204,806
Other Payables and Accrued Expenses ......................... 82,115
Administrative Fee Payable (Note 2) ......................... 40,961
Commissions Payable ......................................... 20,069
Organizational Expenses Payable to Adviser (Note 1) ......... 18,118
-----------
Total Liabilities ......................................... 5,548,530
-----------
Net Assets .................................................... $190,034,513
============
Shares Outstanding ............................................ 10,683,004
============
Net Asset Value Per Share ..................................... $17.79
======
Maximum Offering Price Per Share (100/97.00 of $17.79) ........ $18.34
======

See Notes to Financial Statements.

- --------------------------------------------------------------------------------

7
<PAGE>

For the Year Ended
December 31, 1996 Navellier Aggressive Small Cap Equity Portfolio
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS

- --------------------------------------------------------------------------------

Investment Income
Interest (Note 1) ........................................... $ 603,796
Dividends (Note 1) .......................................... 171,544
------------
Total Investment Income .................................. 775,340
------------

Expenses
Investment Advisory Fee (Note 2) ............................ 2,323,690
Administrative Fee (Note 2) ................................. 464,738
Transfer Agent and Custodian Fee (Note 3) ................... 330,390
Registration Fees ........................................... 108,309
Shareholder Reports and Notices ............................. 62,983
Legal Fees .................................................. 60,915
Trustees' Fees and Expenses (Note 2) ........................ 51,381
Audit Fees .................................................. 19,600
Organizational Expense (Note 1) ............................. 8,053
Other Expenses .............................................. 18,743
------------
Total Expenses ........................................... 3,448,802
Less Expenses Reimbursed by Investment Adviser (Note 2) .. (195,636)
------------
Net Expenses ........................................... 3,253,166
------------
Net Investment Loss ............................................ (2,477,826)
------------
Net Realized Gain on Investment Transactions ................... 463,797
Net Change in Unrealized Appreciation of Investments ........... 18,466,247
------------
Net Gain on Investments ........................................ 18,930,044
------------
Net Increase in Net Assets Resulting from Operations ........... $ 16,452,218
============

See Notes to Financial Statements.

- --------------------------------------------------------------------------------

8
<PAGE>

Navellier Aggressive Small Cap Equity Portfolio
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
For the Year Ended
December 31,
-----------------------------
1996 1995
------------- -------------
<S> <C> <C>
From Investment Activities
Net Investment Loss ........................................... $ (2,477,826) $ (610,524)
Net Realized Gain on Investment Transactions .................. 463,797 1,524,157
Net Change in Unrealized Appreciation of Investments .......... 18,466,247 15,989,475
------------- -------------
Net Increase in Net Assets Resulting from Operations ....... 16,452,218 16,903,108
------------- -------------
Distributions to Shareholders
From Net Investment Income .................................... -- --
From Net Realized Capital Gains ............................... -- (2,499,314)
------------- -------------
Total Distributions to Shareholders ........................ -- (2,499,314)
------------- -------------

From Share Transactions
Net Proceeds from Sales of Shares ............................. 286,125,562 130,265,618
Reinvestment of Distributions ................................. -- 2,355,336
Cost of Shares Redeemed ....................................... (217,842,421) (59,949,289)
------------- -------------
Net Increase in Net Assets Resulting from
Share Transactions ........................................ 68,283,141 72,671,665
------------- -------------
Total Increase in Net Assets ............................... 84,735,359 87,075,459
Net Assets -- Beginning of Year .................................. 105,299,154 18,223,695
------------- -------------
Net Assets -- End of Year ........................................ $ 190,034,513 $ 105,299,154
============= =============

Shares
Sold .......................................................... 16,325,181 9,128,613
Issued in Reinvestment of Distributions ....................... -- 152,845
Redeemed ...................................................... (12,473,362) (4,110,315)
------------- -------------
Net Increase in Shares ..................................... 3,851,819 5,171,143
============= =============
</TABLE>

See Notes to Financial Statements.

- --------------------------------------------------------------------------------

9
<PAGE>

Navellier Aggressive Small Cap Equity Portfolio
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For The Year Ended For The
December 31, Period Ended
---------------------- December 31,
1996 1995 1994*
--------- --------- ---------
<S> <C> <C> <C>
Per Share Operating Performance:
Net Asset Value - Beginning of Year ............. $ 15.41 $ 10.98 $ 10.00
--------- --------- ---------
Income from Investment Operations:
Net Investment Loss ........................... (0.23) (0.16) (0.08)
Net Realized and Unrealized Gains on Securities 2.61 4.97 0.98
--------- --------- ---------
Total from Investment Operations ............ 2.38 4.81 0.98
--------- --------- ---------
Distributions to Shareholders:
From Net Investment Income .................... -- -- --
From Net Realized Capital Gains ............... -- (0.38) --
--------- --------- ---------
Total Distributions to Shareholders ......... -- (0.38) --
--------- --------- ---------
Net Increase in Net Asset Value ................. 2.38 4.43 0.98
--------- --------- ---------
Net Asset Value - End of Year ................... $ 17.79 $ 15.41 $ 10.98
========= ========= =========

Total Investment Return(A) ...................... 15.44% 43.80% 9.80%

Ratios to Average Net Assets:
Expenses After Reimbursement (Note 2) ........... 1.75% 1.75% 1.68%(B)
Expenses Before Reimbursement (Note 2) .......... 1.86% 2.10% 4.52%(B)
Net Investment Loss ............................. (1.33)% (1.15)% (0.81)%(B)

Supplementary Data:
Portfolio Turnover Rate ......................... 136.9% 169.6% 139.9%
Net Assets at End of Year (000's omitted) ....... $ 190,035 $ 105,299 $ 18,224
Number of Shares Outstanding at
End of Year (000's omitted) ................... 10,683 6,831 1,660

Average Commission Rate Paid(C) ................. $0.0424
</TABLE>

- ----------
(A) Total returns do not include the maximum sales load. Total returns for
periods of less than one year are not annualized.

(B) Annualized.

(C) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for security
trades on which commissions are charged. This amount may vary from period
to period and fund to fund depending on the mix of trades executed in
various markets where trading practices and commission rate structures may
differ.

*From Commencement of Operations January 3, 1994.

See Notes to Financial Statements.

- --------------------------------------------------------------------------------

10
<PAGE>

December 31, 1996 Navellier Aggressive Small Cap Equity Portfolio
- --------------------------------------------------------------------------------

NOTES TO FINANCIAL STATEMENTS

1. Significant Accounting Policies

Navellier Series Fund (the "Fund") is registered with the Securities and
Exchange Commission under the Investment Company Act of 1940 as a diversified,
open-end investment company. The Fund consists of one portfolio, Navellier
Aggressive Small Cap Equity Portfolio (the "Portfolio"). Shares of the Fund are
purchased at the public offering price which includes a maximum sales charge of
up to 3.00% depending on the size of the purchase. The Fund is authorized to
issue an unlimited number of shares of capital stock with no stated par value.
The financial statements have been prepared in conformity with generally
accepted accounting principles which permit management to make certain estimates
and assumptions at the date of the financial statements. The following is a
summary of significant accounting policies which the Fund follows:

(a) Listed securities are valued at the last sales price of the New
York Stock Exchange and other major exchanges. Over-the-Counter securities
are valued at the last sales price. If market quotations are not readily
available, the Board of Trustees will value the Portfolio's securities in
good faith. The Board of Trustees will periodically review this method of
valuation and recommend changes which may be necessary to assure that the
Portfolio's instruments are valued at fair value.

(b) Security transactions are recorded on the trade date (the date
the order to buy or sell is executed). Interest income is accrued on a
daily basis. Dividend income is recorded on the ex-dividend date. Realized
gains and losses from securities transactions are computed on an identified
cost basis.

(c) Dividends from net investment income are declared and paid
annually. Dividends are reinvested in additional shares unless shareholders
request payment in cash. Net capital gains, if any, are distributed
annually.

(d) The Fund complies with the provisions of the Internal Revenue Code
applicable to regulated investment companies and distributes all net
investment income to its shareholders. Therefore, no Federal income tax
provision is required.

(e) Organizational expenses of the Fund totaling $143,294 are being
deferred and amortized over 60 months beginning with the public offering of
shares. Any redemption by an initial investor during the amortization
period will be reduced by a prorata portion of any of the unamortized
organization expenses. Such proration is calculated by dividing the number
of initial shares redeemed by the number of initial shares outstanding at
the date of redemption. At December 31,1996, unamortized organization costs
were $18,118.

2. Investment Advisory Fees and Other Transactions with Affiliates

Investment advisory services are provided by Navellier Management, Inc.,
(the "Adviser"). Under an agreement with the Adviser, the Fund pays a fee at the
annual rate of 1.25% of the daily net assets for the Navellier Aggressive Small
Cap Equity Portfolio. The Adviser also receives a 0.25% annual fee in connection
with the rendering of services under the administrative services agreement and
is reimbursed by the Fund for operating expenses incurred on behalf of the Fund.
An officer and trustee of the Fund is also an officer and director of the
Adviser.

Under an agreement between the Fund and the Adviser related to payment of
operating expenses, the Adviser has reserved the right to seek reimbursement for
the past, present and future operating expenses of the Fund paid by the Adviser,
at any time upon notice to the Fund. At December 31, 1995, the Adviser
voluntarily agreed not to seek future reimbursement of all unreimbursed past
expenses incurred on behalf of the Fund. During the year ended December 31,
1996, the Adviser paid operating expenses of the Fund totaling $660,374. Under
the operating expense agreement, the Adviser requested, and the Fund reimbursed,
$464,738 of such expenses. The Adviser voluntarily agreed not to seek future
reimbursement of $195,636 of such 1996 expenses. Accordingly, at December
31,1996, there were no prior expenses which could be reimbursed in the future
under the agreement.

11
<PAGE>

December 31, 1996 Navellier Aggressive Small Cap Equity Portfolio
- --------------------------------------------------------------------------------

Navellier Securities Corp. (the "Distributor") acts as the Fund's
Distributor and is registered as a broker-dealer under the Securities and
Exchange Act of 1934. The Distributor, which is the principal underwriter of the
Funds shares, renders its services to the Fund pursuant to a distribution
agreement. An officer and trustee of the Fund is also an officer and director of
the Distributor.

For the Year ended December 31, 1996, the Fund was advised that the
Distributor received $924,050 from sales loads earned on sales of the Fund's
capital stock.

The Fund pays each of its Trustees not affiliated with the Adviser a fee of
$10,000 annually plus specific amounts for attended board and committee
meetings. When the Fund exceeds $200,000,000 in total net assets, then the
Trustees' fee is raised to $20,000 annually. For the year ended December 31,1996
Trustees' fees and expenses totaled $51,381.

3. TRANSFER AGENT AND CUSTODIAN

Rushmore Trust and Savings, FSB, (Rushmore Trust"), provides transfer
agency, dividend disbursing and other shareholder services to the Fund. In
addition, Rushmore Trust serves as custodian of the Fund's assets. Fees paid to
Rushmore Trust are based upon a fee schedule approved by the Board of Trustees.

4. SECURITIES TRANSACTIONS

For the year ended December 31,1996, purchases of securities were
$302,971,553 and sales of securities were $ 236,741,968. These totals exclude
short-term securities.

5. NET UNREALIZED APPRECIATION/DEPRECIATION OF INVESTMENTS

As of December 31, 1996, net appreciation of investments for Federal income
tax purposes was $36,878,084 of which $44,036,260 related to appreciated
investments and $7,158,176 related to depreciated investments. At December 31,
1996, the cost of the Fund's securities for Federal income tax purposes was
$157,733,936.

6. NET ASSETS

At December 31, 1996, net assets consisted of the following:

Paid-in-Capital ...................................... $ 155,066,631
Undistributed Net Investment Income .................. --
Accumulated Net Realized Loss on Investments ......... (1,910,202)
Net Unrealized Appreciation on Investments ........... 36,878,084
-------------
NET ASSETS ........................................... $ 190,034,513
=============

7. FEDERAL INCOME TAX

No provision is made for federal income taxes as it is the Fund's intention to
continue to qualify as a regulated investment company and to make requisite
distributions to the shareholders which will be sufficient to relieve it from
all or substantially all Federal income and excise taxes.

Permanent differences between tax and financial reporting of net investment
income and realized gains/(losses) are reclassified to paid-in-capital. As of
December 31, 1996, net investment losses of $2,477,826 were reclassified to
paid-in-capital.

At December 31, 1996, for Federal income tax purposes, the Fund had capital loss
carryovers which may be applied against future net taxable realized gains of
each succeeding year until the earlier of its utilization or its expiration as
follows:

Expires December 31,

2004 ................................................... $ 1,910,202
=============

12
<PAGE>

- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT

The Shareholders and Board of Trustees
of the Navellier Series Fund:

We have audited the Statement of assets and liabilities of the Navellier
Aggressive Small Cap Equity Portfolio of the Navellier Series Fund (the Fund) as
of December 31, 1996, the related statement of operations for the year then
ended and of changes in net assets for the years ended December 31, 1996 and
1995, and the financial highlights for each of the two years in the period ended
December 31, 1996 and the period ended December 31, 1994. 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.

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. Our procedures included confirmation of securities owned at December
31, 1996 by correspondence with the custodian and brokers. 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, such financial statements and financial highlights present
fairly, in all material respects, the financial position of the Navellier Small
Cap Equity Portfolio of the Navellier Series Fund at December 31, 1996, the
results of its operations, the changes in its net assets, and the financial
highlights for the presented periods in conformity with generally accepted
accounting principles.

DELOITTE & TOUCHE LLP
Washington, DC
January 31, 1997

13
<PAGE>

(This page has been left blank intentionally.)
<PAGE>

[Artwork Omitted]

NAVELLIER

Series Fund

ANNUAL REPORT

December 31, 1996

Navellier Offices:
One East Liberty Third Floor
Reno, Nevada 89501
800-887-8671 P.S.T.

Custodian & Transfer Agent:
Rushmore Trust and Savings, FSB
4922 Fairmont Avenue
Bethesda, MD 20814
800-622-1386 E.S.T.

<PAGE>

PART C

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS

(a) FINANCIAL STATEMENTS INCLUDED IN PART A AND B:

INCLUDED IN PART A OF THIS REGISTRATION STATEMENT:
For the two years ended December 31, 1996, and the period
ended December 31, 1994:
Financial Highlights

INCLUDED IN PART B OF THIS REGISTRATION STATEMENT:
At December 31, 1996:
Portfolio of Investments*
Statement of Assets and Liabilities*

For the two years ended December 31, 1996:
Statement of Changes in Net Assets*

For the year ended December 31, 1996:
Statement of Operations*

- ------------------------------
* Incorporated herein by reference to the Fund's Annual Report to
Shareholders, dated December 31, 1996, filed with the SEC via EDGAR on
February 28, 1997.

(b) EXHIBITS

1.1 Certificate of Trust of Registrant. (1)

1.2 Declaration of Trust of Registrant. (1)

1.3 Certificate of Amendment to Certificate of Trust, dated
March 13, 1997. (4)

2 By-Laws of Registrant. (1)

3 Not Applicable.

4 None.

5 Investment Advisory Agreement, dated March 16, 1997. (4)

<PAGE>

6.1 Distribution Agreement, dated March 16, 1997. (4)

6.2 Dealer Agreement between MFS Fund Distributors, Inc.
("MFD"), and a dealer, dated December 28, 1994 and the
Mutual Fund Agreement between MFD and a bank or NASD
affiliate, dated December 28, 1994. (2)

7 None.

8 Administrative Services, Custodian and Transfer Agent
Agreement with Rushmore Trust and Savings, FSB, dated
March 10, 1994. (1)

9.1 Trustee Indemnification Agreements. (1)

9.2 Administrative Services Agreement with MFS Financial
Services, Inc., dated March 16, 1997. (4)

10 Consent and Opinion of Counsel filed with Registrant's
Rule 24f-2 Notice for fiscal year ended December 31,
1996 on February 28, 1997.

11 Consent of Independent Auditors; filed herewith.

12 Not Applicable.

13 Subscription Agreement between the Trust and Louis
Navellier, dated May 15, 1993. (1)

14 Not Applicable.

15 Not Applicable.

16 Schedule for Computation of Performance Quotations -
Average Annual Total Return. (3)

18 Not Applicable.

27 Financial Data Schedules. (4)

Power of Attorney. (4)

- -----------------------------
(1) Incorporated by reference to the Registrant's Post-Effective Amendment
No. 6 filed with the SEC via EDGAR on April 29, 1996.

<PAGE>

(2) Incorporated by reference to MFS Municipal Series Trust (File Nos.
2-92915 and 811-4096) Post-Effective Amendment No. 26 filed with the
SEC via EDGAR on February 22, 1995.
(3) Incorporated by reference to Massachusetts Investors Growth Stock Fund
(File Nos. 2-14677 and 811-7768) Post-Effective Amendment No. 59 filed
with the SEC via EDGAR on March 30, 1995.

(4) Incorporated by reference to Registrant's Post-Effective Amendment No. 7
filed with the SEC via EDGAR on April 10, 1997.

ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT

Not applicable.

ITEM 26. NUMBER OF HOLDERS OF SECURITIES

(1) (2)
TITLE OF CLASS NUMBER OF RECORD HOLDERS

Shares of Beneficial Interest 8,450
(without par value) (as of February 28, 1997)

ITEM 27. INDEMNIFICATION

Reference is hereby made to (a) Article X of Registrant's Declaration
of Trust, incorporated by reference to Post-Effective Amendment No. 6, filed
with the SEC on April 29, 1996.

The Fund shall indemnify each of its Trustees, officers, employees,
and agents (including persons who serve at its request as directors, officers,
or trustees of another organization in which it has any interest, as a
shareholder, creditor, or otherwise) against all liabilities and expenses
(including amounts paid in satisfaction of judgments, in compromise, as fines
and penalties, and as counsel fees) reasonably incurred by him in connection
with the defense or disposition of any action, suit, or other proceeding,
whether civil or criminal, in which he may be involved or with which he may be
threatened, while in office or thereafter, by reason of his being or having been
such a Trustee, officer, employee, or agent, except with respect to any matter
as to which he shall have been adjudicated to have acted in bad faith, willful
misfeasance, gross negligence, or reckless disregard of his duties; provided,
however, that as to any matter disposed of by a compromise payment by such
Person, pursuant to a consent decree or otherwise, no indemnification either for
said payment or for any other expenses shall be provided unless there has been a
determination that such person did not engage in bad faith, willful misfeasance,
gross negligence, or reckless disregard of his duties involved in the conduct of
his office by the court or other body approving the settlement or other
disposition or by a reasonable determination, based upon review of readily
available facts (as opposed to a full trial-type inquiry), that he did not
engage in such conduct by written opinion from independent legal counsel
approved by a majority of a quorum of trustees who are neither interested
persons nor parties to the proceedings. The rights accruing to any person under
these provisions shall not exclude any other right to which he may be lawfully
entitled; provided that no person may satisfy any right of indemnity or
reimbursement

<PAGE>

granted herein or to which he may otherwise be entitled except out of the Fund
Property. A majority of a quorum of disinterested non-party Trustees may make
advance payments in connection with indemnification under this section, provided
that the indemnified person shall have given a written undertaking adequately
secured to reimburse the Fund in the event it is subsequently determined that he
is not entitled to such indemnification, or a majority of a quorum of
disinterested non-party Trustees or independent counsel determine, after a
review of readily available facts, that the person seeking indemnification will
probably be found to be entitled to indemnification.

Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to the Trustees, officers, and controlling persons
of the Fund pursuant to the provisions described under this Item 27, or
otherwise, the Fund has been advised that, in the opinion of the SEC, such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Fund of expenses incurred or
paid by a Trustee, officer, or controlling person of the Fund in the successful
defense of any action, suit, or proceeding) is asserted by such Trustee,
officer, or controlling person in connection with the securities being
registered, the Fund will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

The Fund may purchase and maintain insurance on behalf of an officer,
Trustee, employee, or agent protecting such person, to the full extent permitted
by applicable law, from liability incurred by such person as officer, Trustee,
employee, or agent of the Fund or arising from his activities in such capacity.

The Trustees and officers of the Registrant and the personnel of the
Registrant's investment adviser and principal underwriter are insured under an
errors and omissions liability insurance policy. The Registrant and its
officers are also insured under the fidelity bond required by Rule 17g-1 under
the Investment Company Act of 1940, as amended.

ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

MFS serves as investment adviser to the following open-end Funds
comprising the MFS Family of Funds: Massachusetts Investors Trust,
Massachusetts Investors Growth Stock Fund, MFS Growth Opportunities Fund, MFS
Government Securities Fund, MFS Government Limited Maturity Fund, MFS Series
Trust I (which has thirteen series: MFS Managed Sectors Fund, MFS Cash Reserve
Fund, MFS World Asset Allocation Fund, MFS Aggressive Growth Fund, MFS Research
Growth and Income Fund, MFS Core Growth Fund, MFS Equity Income Fund, MFS
Special Opportunities Fund, MFS Convertible Securities Fund, MFS Blue Chip Fund,
MFS New Discovery Fund, MFS Science and Technology Fund and MFS Research
International

<PAGE>

Fund), MFS Series Trust II (which has four series: MFS Emerging Growth Fund, MFS
Capital Growth Fund, MFS Intermediate Income Fund and MFS Gold & Natural
Resources Fund), MFS Series Trust III (which has two series: MFS High Income
Fund and MFS Municipal High Income Fund), MFS Series Trust IV (which has four
series: MFS Money Market Fund, MFS Government Money Market Fund, MFS Municipal
Bond Fund and MFS OTC Fund), MFS Series Trust V (which has two series: MFS Total
Return Fund and MFS Research Fund), MFS Series Trust VI (which has three series:
MFS World Total Return Fund, MFS Utilities Fund and MFS World Equity Fund), MFS
Series Trust VII (which has two series: MFS World Governments Fund and MFS Value
Fund), MFS Series Trust VIII (which has two series: MFS Strategic Income Fund
and MFS World Growth Fund), MFS Series Trust IX (which has three series: MFS
Bond Fund, MFS Limited Maturity Fund and MFS Municipal Limited Maturity Fund),
MFS Series Trust X (which has four series: MFS Government Mortgage Fund,
MFS/Foreign & Colonial Emerging Markets Equity Fund, MFS/Foreign & Colonial
International Growth Fund and MFS/Foreign & Colonial International Growth and
Income Fund), and MFS Municipal Series Trust (which has 16 series: MFS Alabama
Municipal Bond Fund, MFS Arkansas Municipal Bond Fund, MFS California Municipal
Bond Fund, MFS Florida Municipal Bond Fund, MFS Georgia Municipal Bond Fund, MFS
Maryland Municipal Bond Fund, MFS Massachusetts Municipal Bond Fund, MFS
Mississippi Municipal Bond Fund, MFS New York Municipal Bond Fund, MFS North
Carolina Municipal Bond Fund, MFS Pennsylvania Municipal Bond Fund, MFS South
Carolina Municipal Bond Fund, MFS Tennessee Municipal Bond Fund, MFS Virginia
Municipal Bond Fund, MFS West Virginia Municipal Bond Fund and MFS Municipal
Income Fund) (the "MFS Funds"). The principal business address of each of the
MFS Funds is 500 Boylston Street, Boston, Massachusetts 02116.

MFS also serves as investment adviser of the following no-load,
open-end Funds: MFS Institutional Trust ("MFSIT") (which has seven series), MFS
Variable Insurance Trust ("MVI") (which has twelve series) and MFS Union
Standard Trust ("UST"). The principal business address of each of the
aforementioned funds is 500 Boylston Street, Boston, Massachusetts 02116.

In addition, MFS serves as investment adviser to the following
closed-end funds: MFS Municipal Income Trust, MFS Multimarket Income Trust, MFS
Government Markets Income Trust, MFS Intermediate Income Trust, MFS Charter
Income Trust and MFS Special Value Trust (the "MFS Closed-End Funds"). The
principal business address of each of the MFS Closed-End Funds is 500 Boylston
Street, Boston, Massachusetts 02116.

Lastly, MFS serves as investment adviser to MFS/Sun Life Series Trust
("MFS/SL"), Money Market Variable Account, High Yield Variable Account, Capital
Appreciation Variable Account, Government Securities Variable Account, World
Governments Variable Account, Total Return Variable Account and Managed Sectors
Variable Account. The principal business address of each of the aforementioned
funds is One Sun Life Executive Park, Wellesley Hills, Massachusetts 02181.

<PAGE>

MFS International Ltd. ("MIL"), a limited liability company organized
under the laws of Bermuda and a subsidiary of MFS, whose principal business
address is Cedar House, 41 Cedar Avenue, Hamilton HM12 Bermuda, serves as
investment adviser to and distributor for MFS American Fund (which has six
portfolios: MFS American Funds-U.S. Equity Fund, MFS American Funds-U.S.
Emerging Growth Fund, MFS American Funds-U.S. High Yield Bond Fund, MFS American
Funds - U.S. Dollar Reserve Fund, MFS American Funds-Charter Income Fund and MFS
American Funds-U.S. Research Fund) (the "MIL Funds"). The MIL Funds are
organized in Luxembourg and qualify as an undertaking for collective investments
in transferable securities (UCITS). The principal business address of the MIL
Funds is 47, Boulevard Royal, L-2449 Luxembourg.

MIL also serves as investment adviser to and distributor for MFS
Meridian U.S. Government Bond Fund, MFS Meridian Charter Income Fund, MFS
Meridian Global Government Fund, MFS Meridian U.S. Emerging Growth Fund, MFS
Meridian Global Equity Fund, MFS Meridian Limited Maturity Fund, MFS Meridian
World Growth Fund, MFS Meridian Money Market Fund, MFS Meridian World Total
Return Fund, MFS Meridian U.S. Equity Fund, MFS Meridian Research Fund and MFS
Emerging Markets Debt Fund (collectively the "MFS Meridian Funds"). Each of the
MFS Meridian Funds is organized as an exempt company under the laws of the
Cayman Islands. The principal business address of each of the MFS Meridian
Funds is P.O. Box 309, Grand Cayman, Cayman Islands, British West Indies.

MFS International (U.K.) Ltd. ("MIL-UK"), a private limited company
registered with the Registrar of Companies for England and Wales whose current
address is 4 John Carpenter Street, London, England ED4Y 0NH, is involved
primarily in marketing and investment research activities with respect to
private clients and the MIL Funds and the MFS Meridian Funds.

MFS Fund Distributors, Inc. ("MFD"), a wholly owned subsidiary of MFS,
serves as distributor for the MFS Funds, MVI, UST and MFSIT.

Clarendon Insurance Agency, Inc. ("CIAI"), a wholly owned subsidiary
of MFS, serves as distributor for certain life insurance and annuity contracts
issued by Sun Life Assurance Company of Canada (U.S.).

MFS Service Center, Inc. ("MFSC"), a wholly owned subsidiary of MFS,
serves as shareholder servicing agent to the MFS Funds, the MFS Closed-End
Funds, MFSIT, MVI and UST.

MFS Institutional Advisors, Inc. ("MFSI"), a wholly owned subsidiary
of MFS, provides investment advice to substantial private clients.

<PAGE>

MFS Retirement Services, Inc. ("RSI"), a wholly owned subsidiary of
MFS, markets MFS products to retirement plans and provides administrative and
record keeping services for retirement plans.

MFS

The Directors of MFS are A. Keith Brodkin, Jeffrey L. Shames, Arnold
D. Scott, Donald A. Stewart and John D. McNeil. Mr. Brodkin is the Chairman,
Mr. Shames is the President, Mr. Scott is a Senior Executive Vice President and
Secretary, Bruce C. Avery, William S. Harris, William W. Scott, Jr., and
Patricia A. Zlotin are Executive Vice Presidents, Stephen E. Cavan is a Senior
Vice President, General Counsel and an Assistant Secretary, Robert T. Burns is a
Senior Vice President, Associate General Counsel and an Assistant Secretary of
MFS, and Thomas B. Hastings is a Vice President and Treasurer of MFS.

MASSACHUSETTS INVESTORS TRUST
MASSACHUSETTS INVESTORS GROWTH STOCK FUND
MFS GROWTH OPPORTUNITIES FUND
MFS GOVERNMENT SECURITIES FUND
MFS SERIES TRUST I
MFS SERIES TRUST V
MFS SERIES TRUST VI
MFS SERIES TRUST X
MFS GOVERNMENT LIMITED MATURITY FUND

A. Keith Brodkin is the Chairman and President, Stephen E. Cavan is
the Secretary, W. Thomas London is the Treasurer, James O. Yost, Vice President
of MFS, is the Assistant Treasurer, James R. Bordewick, Jr., Senior Vice
President and Associate General Counsel of MFS, is the Assistant Secretary.

MFS SERIES TRUST II

A. Keith Brodkin is the Chairman and President, Leslie J. Nanberg,
Senior Vice President of MFS, is a Vice President, Stephen E. Cavan is the
Secretary, W. Thomas London is the Treasurer, James O. Yost is the Assistant
Treasurer, and James R. Bordewick, Jr., is the Assistant Secretary.

MFS GOVERNMENT MARKETS INCOME TRUST
MFS INTERMEDIATE INCOME TRUST

<PAGE>

MFS SERIES TRUST III

A. Keith Brodkin is the Chairman and President, James T. Swanson,
Robert J. Manning, Cynthia M. Brown and Joan S. Batchelder, Senior Vice
Presidents of MFS, Bernard Scozzafava, Vice President of MFS, and Matthew
Fontaine, Assistant Vice President of MFS, are Vice Presidents, Sheila
Burns-Magnan, Assistant Vice President of MFS, and Daniel E. McManus, Vice
President of MFS, are Assistant Vice Presidents, Stephen E. Cavan is the
Secretary, W. Thomas London is the Treasurer, James O. Yost is the Assistant
Treasurer, and James R. Bordewick, Jr., is the Assistant Secretary.

MFS SERIES TRUST IV
MFS SERIES TRUST IX

A. Keith Brodkin is the Chairman and President, Robert A. Dennis and
Geoffrey L. Kurinsky, Senior Vice Presidents of MFS, are Vice Presidents,
Stephen E. Cavan is the Secretary, W. Thomas London is the Treasurer, James O.
Yost is the Assistant Treasurer and James R. Bordewick, Jr., is the Assistant
Secretary.

MFS SERIES TRUST VII

A. Keith Brodkin is the Chairman and President, Leslie J. Nanberg and
Stephen C. Bryant, Senior Vice Presidents of MFS, are Vice Presidents, Stephen
E. Cavan is the Secretary, W. Thomas London is the Treasurer, James O. Yost is
the Assistant Treasurer and James R. Bordewick, Jr., is the Assistant Secretary.

MFS SERIES TRUST VIII

A. Keith Brodkin is the Chairman and President, Jeffrey L. Shames,
Leslie J. Nanberg, Patricia A. Zlotin, James T. Swanson and John D. Laupheimer,
Jr., Vice President of MFS, are Vice Presidents, Stephen E. Cavan is the
Secretary, W. Thomas London is the Treasurer, James O. Yost is the Assistant
Treasurer and James R. Bordewick, Jr., is the Assistant Secretary.

MFS MUNICIPAL SERIES TRUST

A. Keith Brodkin is the Chairman and President, Cynthia M. Brown and
Robert A. Dennis are Vice Presidents, David B. Smith, Geoffrey L. Schechter and
David R. King, Vice Presidents of MFS, are Vice Presidents, Daniel E. McManus,
Vice President of MFS, is an Assistant Vice President, Stephen E. Cavan is the
Secretary, W. Thomas London is the Treasurer, James O. Yost is the Assistant
Treasurer and James R. Bordewick, Jr., is the Assistant Secretary.

<PAGE>

MFS VARIABLE INSURANCE TRUST
MFS UNION STANDARD TRUST
MFS INSTITUTIONAL TRUST

A. Keith Brodkin is the Chairman and President, Stephen E. Cavan is
the Secretary, W. Thomas London is the Treasurer, James O. Yost is the Assistant
Treasurer and James R. Bordewick, Jr., is the Assistant Secretary.

MFS MUNICIPAL INCOME TRUST

A. Keith Brodkin is the Chairman and President, Cynthia M. Brown and
Robert J. Manning are Vice Presidents, Stephen E. Cavan is the Secretary, W.
Thomas London is the Treasurer, James O. Yost, is the Assistant Treasurer and
James R. Bordewick, Jr., is the Assistant Secretary.

MFS MULTIMARKET INCOME TRUST
MFS CHARTER INCOME TRUST

A. Keith Brodkin is the Chairman and President, Leslie J. Nanberg and
James T. Swanson are Vice Presidents, Stephen E. Cavan is the Secretary, W.
Thomas London is the Treasurer, James O. Yost, Vice President of MFS, is the
Assistant Treasurer and James R. Bordewick, Jr., is the Assistant Secretary.

MFS SPECIAL VALUE TRUST

A. Keith Brodkin is the Chairman and President, Jeffrey L. Shames and
Robert J. Manning are Vice Presidents, Stephen E. Cavan is the Secretary, W.
Thomas London is the Treasurer, James O. Yost, is the Assistant Treasurer and
James R. Bordewick, Jr., is the Assistant Secretary.

MFS/SUN LIFE SERIES TRUST

John D. McNeil, Chairman and Director of Sun Life Assurance Company of
Canada, is the Chairman, Stephen E. Cavan is the Secretary, W. Thomas London is
the Treasurer, James O. Yost, is the Assistant Treasurer and James R. Bordewick,
Jr., is the Assistant Secretary.

<PAGE>

MONEY MARKET VARIABLE ACCOUNT
HIGH YIELD VARIABLE ACCOUNT
CAPITAL APPRECIATION VARIABLE ACCOUNT
GOVERNMENT SECURITIES VARIABLE ACCOUNT
TOTAL RETURN VARIABLE ACCOUNT
WORLD GOVERNMENTS VARIABLE ACCOUNT
MANAGED SECTORS VARIABLE ACCOUNT

John D. McNeil is the Chairman, Stephen E. Cavan is the Secretary, and
James R. Bordewick, Jr., is the Assistant Secretary.

MIL

A. Keith Brodkin is a Director and the Chairman, Arnold D. Scott and
Jeffrey L. Shames are Directors, Ziad Malek, Senior Vice President of MFS, is
the President, Thomas J. Cashman, Jr., a Senior Vice President of MFS, is a
Senior Vice President, Stephen E. Cavan is a Director, Senior Vice President and
the Clerk, James R. Bordewick, Jr. is a Director, Vice President and an
Assistant Clerk, Robert T. Burns is an Assistant Clerk, Joseph W. Dello Russo,
Senior Vice President and Chief Financial Officer of MFS, is the Treasurer and
Thomas B. Hastings is the Assistant Treasurer.

MIL-UK

A. Keith Brodkin is a Director and the Chairman, Arnold D. Scott,
Jeffrey L. Shames, and James R. Bordewick, Jr., are Directors, Stephen E. Cavan
is a Director and the Secretary, Ziad Malek is the President, James E. Russell
is the Treasurer, and Robert T. Burns is the Assistant Secretary.

MIL FUNDS

A. Keith Brodkin is the Chairman, President and a Director, Richard B.
Bailey, John A. Brindle, Richard W. S. Baker and William F. Waters are
Directors, Stephen E. Cavan is the Secretary, W. Thomas London is the Treasurer,
James O. Yost is the Assistant Treasurer and James R. Bordewick, Jr., is the
Assistant Secretary, and Ziad Malek is a Senior Vice President.

MFS MERIDIAN FUNDS

A. Keith Brodkin is the Chairman, President and a Director, Richard B.
Bailey, John A. Brindle, Richard W. S. Baker, Arnold D. Scott, Jeffrey L. Shames
and William F. Waters are Directors, Stephen E. Cavan is the Secretary, W.
Thomas London is the Treasurer, James R. Bordewick, Jr., is the Assistant
Secretary, James O. Yost is the Assistant Treasurer, and Ziad Malek is a Senior
Vice President.

<PAGE>

MFD

A. Keith Brodkin is the Chairman and a Director, Arnold D. Scott and
Jeffrey L. Shames are Directors, William W. Scott, Jr., an Executive Vice
President of MFS, is the President, Stephen E. Cavan is the Secretary, Robert T.
Burns is the Assistant Secretary, Joseph W. Dello Russo is the Treasurer, and
Thomas B. Hastings is the Assistant Treasurer.

CIAI

A. Keith Brodkin is the Chairman and a Director, Arnold D. Scott and
Jeffrey L. Shames are Directors, Cynthia Orcott is President, Bruce C. Avery is
the Vice President, Joseph W. Dello Russo is the Treasurer, Thomas B. Hastings
is the Assistant Treasurer, Stephen E. Cavan is the Secretary, and Robert T.
Burns is the Assistant Secretary.

MFSC

A. Keith Brodkin is the Chairman and a Director, Arnold D. Scott and
Jeffrey L. Shames are Directors, Joseph A. Recomendes, a Senior Vice President
of MFS, is Vice Chairman and a Director, Janet A. Clifford is the Executive Vice
President, Joseph W. Dello Russo is the Treasurer, Thomas B. Hastings is the
Assistant Treasurer, Stephen E. Cavan is the Secretary, and Robert T. Burns is
the Assistant Secretary.

MFSI

A. Keith Brodkin is the Chairman and a Director, Jeffrey L. Shames,
and Arnold D. Scott are Directors, Thomas J. Cashman, Jr., is the President and
a Director, Leslie J. Nanberg is a Senior Vice President, a Managing Director
and a Director, George F. Bennett, Carol A. Corley, John A. Gee, Brianne Grady
and Kevin R. Parke are Senior Vice Presidents and Managing Directors, Joseph W.
Dello Russo is the Treasurer, Thomas B. Hastings is the Assistant Treasurer and
Robert T. Burns is the Secretary.

RSI

William W. Scott, Jr. and Bruce C. Avery are Directors, Arnold D.
Scott is the Chairman and a Director, Joseph W. Dello Russo is the Treasurer,
Thomas B. Hastings is the Assistant Treasurer, Stephen E. Cavan is the
Secretary, Robert T. Burns is the Assistant Secretary and Sharon A. Brovelli and
Martin E. Beaulieu are Senior Vice Presidents.

In addition, the following persons, Directors or officers of MFS, have
the affiliations indicated:

<PAGE>

A. Keith Brodkin Director, Sun Life Assurance Company of
Canada (U.S.), One Sun Life Executive Park,
Wellesley Hills, Massachusetts
Director, Sun Life Insurance and Annuity
Company of New York, 67 Broad Street, New
York, New York

Donald A. Stewart President and a Director, Sun Life
Assurance Company of Canada, Sun Life
Centre, 150 King Street West, Toronto,
Ontario, Canada (Mr. Stewart is also an
officer and/or Director of various
subsidiaries and affiliates of Sun Life)

John D. McNeil Chairman, Sun Life Assurance Company of
Canada, Sun Life Centre, 150 King Street
West, Toronto, Ontario, Canada (Mr. McNeil
is also an officer and/or Director of
various subsidiaries and affiliates of Sun
Life)

Joseph W. Dello Russo Director of Mutual Fund Operations, The
Boston Company, Exchange Place, Boston,
Massachusetts (until August, 1994)

ITEM 29. DISTRIBUTORS

(a) Reference is hereby made to Item 28 above.

(b) Reference is hereby made to Item 28 above; the principal business
address of each of these persons is 500 Boylston Street, Boston, Massachusetts
02116.

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS

The accounts and records of the Registrant are located, in whole or in
part, at the office of the Registrant and the following locations:

NAME ADDRESS
---- -------

Massachusetts Financial Services 500 Boylston Street
Company (investment adviser) Boston, MA 02116

<PAGE>

Navellier Management, Inc. 1 East Liberty, Third Floor
(prior investment adviser) Reno, Nevada 89501

MFS Fund Distributors, Inc. 500 Boylston Street
(principal underwriter) Boston, MA 02116

Navellier Securities Corp. 1 East Liberty, Third Floor
(prior principal underwriter) Reno, NV 89501

Rushmore Trust & Savings, FSB 4922 Fairmont Avenue
(custodian and transfer agent) Bethesda, MD 20814

ITEM 31. MANAGEMENT SERVICES

Not applicable.

ITEM 32. UNDERTAKINGS

(a) Not applicable.

(b) Not applicable.

(c) Registrant undertakes to furnish each person to whom a prospectus
is delivered with a copy of its latest annual report to shareholders upon
request and without charge.

(d) Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to trustees, officers and controlling
persons of the Registrant pursuant to the provisions set forth in Item 27 of
this Part C, or otherwise, the Registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a trustee, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the Securities being Registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

<PAGE>

(e) The Fund hereby undertakes that if it is requested by the holders
of at least 10% of its outstanding shares to call a meeting of shareholders for
the purpose of voting upon the question of removal of a Trustee, it will do so
and will assist in communications with other shareholders as required by Section
16(c) of the Investment Company Act of 1940.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereto duly authorized, in the City of Boston and
The Commonwealth of Massachusetts on the 30th day of April, 1997.

MFS SERIES TRUST

By: James R. Bordewick, Jr.
-------------------------------------
Name: James R. Bordewick, Jr.
Title: Assistant Secretary

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to its Registration Statement has been signed below by
the following persons in the capacities indicated on April 30, 1997.

SIGNATURE TITLE

DONALD A. SIMON* Chairman, Principal Executive
- ------------------------- Officer and Trustee
Donald A. Simon

W. THOMAS LONDON* Treasurer (Principal Financial Officer
- ------------------------- and Principal Accounting Officer)
W. Thomas London

LAWRENCE BIANCHI* Trustee
- -------------------------
Lawrence Bianchi

KENNETH SLETTEN* Trustee
- -------------------------
Kenneth Sletten

ARNOLD D. SCOTT Trustee
- -------------------------
Arnold D. Scott

Name: James R. Bordewick, Jr.
-----------------------------------
James R. Bordewick, Jr.
as Attorney-in-fact

*Executed by James R. Bordewick, Jr., on
behalf of those indicated pursuant to a
Power of Attorney filed with the
Registrant's Post-Effective Amendment
No. 7 on April 10, 1997.

<PAGE>

INDEX TO EXHIBITS

EXHIBIT NO. DESCRIPTION OF EXHIBIT PAGE NO.

11 Consent of Independent Auditors.

<PAGE>

EXHIBIT 11

CONSENT OF INDEPENDENT AUDITORS

THE MFS SERIES TRUST - MFS AGGRESSIVE SMALL CAP EQUITY FUND (FORMERLY THE
NAVELLIER SERIES FUND - NAVELLIER AGGRESSIVE SMALL CAP EQUITY PORTFOLIO)

We hereby consent to the incorporation by reference in this Post-Effective
Amendment No. 8 to Registration No. 33-64010 of our report dated January 31,
1997 appearing in the Annual Report of The MFS Series Trust - MFS Aggressive
Growth Small Cap Equity Fund (formerly, The Navellier Series Fund - Navellier
Aggressive Small Cap Equity Portfolio) for the year ended December 31, 1996, and
to the reference to us under the caption "Financial Highlights" appearing in the
Prospectus, which is also a part of such Registration Statement.

Deloitte & Touche LLP
Washington, DC
April 30, 1997