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MFS UNION STANDARD EQUITY FUND
Supplement dated February 1, 1998 (as revised October 1, 1998) to the
Prospectus and Statement of Additional Information of MFS Union
Standard Equity Fund (the "Fund")
The following information should be read in conjunction with the Fund's
Prospectus and Statement of Additional Information ("SAI"), also dated February
1, 1998, and contains a description of Class I shares.
Class I shares are available for purchase only by certain investors as
described under the caption "Eligible Purchasers" below.
EXPENSE SUMMARY
Shareholder Transaction Expenses: Class I
Maximum Initial Sales Charge Imposed on Purchases of Fund
Shares (as a percentage of offering price)....................... None
Maximum Contingent Deferred Sales Charge (as a percentage
of original purchase price or redemption proceeds, as
applicable)...................................................... None
Annual Operating Expenses of the Fund (as a percentage of average
net assets):
Management Fees.................................................... 0.65%
Rule 12b-1 Fees.................................................... None
Other Expenses (after expense limitation)(1)(2) ................... 0.20%
Total Operating Expenses (after expense limitation)(2)............. 0.85%
...................
(1) The Fund has an expense offset arrangement which reduces the Fund's
custodian fee based upon the amount of cash maintained by the Fund with its
custodian and dividend disbursing agent, and may enter into other such
arrangements and directed brokerage arrangements (which would also have the
effect of reducing the Fund's expenses). Any such fee reductions are not
reflected under "Other Expenses."
(2) The Adviser has agreed to bear the Fund's expenses, subject to
reimbursement by the Fund, such that "Other Expenses" do not exceed 0.20%
per annum of the average daily net assets during the current fiscal year.
Otherwise, "Other Expenses" and "Total Operating Expenses" on Class I
shares would be 0.34% and 0.99%, respectively. See "Information Concerning
Shares of the Fund Expenses" in the Prospectus.
Example of Expenses
An investor would pay the following dollar amounts of expenses on a $1,000
investment in Class I shares of the Fund, assuming (a) a 5% annual return and
(b) redemption at the end of each of the time periods indicated:
Period Class I
1 year.................. $ 9
3 years................. 27
5 years................. 47
10 years................. 105
The purpose of the expense table above is to assist investors in
understanding the various costs and expenses that a shareholder of the Fund will
bear directly or indirectly. A more complete description of the Fund's
management fee is set forth under the caption "Management of the Fund" in the
Prospectus.
The "Example" set forth above should not be considered a representation of
past or future expenses of the Fund; actual expenses may be greater or less than
those shown.
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CONDENSED FINANCIAL INFORMATION
The following information has been audited and 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 independent auditors are
Deloitte & Touche LLP.
Financial Highlights - Class I Shares
Period Ended
Year Ended September 30, September 30,
1997 1996 1995 1994*
Per share data (for a share
outstanding throughout each period):
Net asset value - beginning of period $13.85 $11.85 $ 9.64 $10.00
Income from investment operations# -
Net investment incomess. $ 0.17 $ 0.18 $ 0.17 $ 0.12
Net realized and unrealized gain
(loss) on investments 4.01 2.25 2.14 (0.48)
Total from investment
operations $ 4.18 $ 2.43 $ 2.31 $(0.36)
Less distributions declared to
shareholders -
From net investment income $(0.19) $(0.15) $(0.10) $ --
From net realized gain on
investments (1.41) (0.28) -- --
Total distributions declared
to shareholders $(1.60) $(0.43) $(0.10) $ --
Net asset value - end of period $16.43 $13.85 $11.85 $ 9.64
Total return 32.51% 20.96% 24.21% (3.60)%++
Ratios (to average net assets)/
Supplemental datass.:
Expenses 0.97% 1.00% 1.00% 1.00%+
Net investment income 1.12% 1.36% 1.58% 1.55%+
Portfolio turnover 49% 81% 125% 48%
Average commission rate### $0.0589 $0.0562 $ -- $ --
Net assets at end of period (000
omitted) $68,527 $49,318 $35,842 $22,184
* For the period from the commencement of the Fund's investment operations,
January 14, 1994, through September 30, 1994.
+ Annualized.
++ Not annualized.
# Per share data are based on average shares outstanding.
## For fiscal years ending after September 1, 1995, the Fund's
expenses are calculated without reduction for fees paid
indirectly.
### Average commission rate is calculated for funds with fiscal years beginning
on or after September 1, 1995.
ss. Effective February 1, 1997, the investment adviser voluntarily
agreed to maintain the other expenses of the Fund, which include
all Fund expenses except for the management fee and distribution
and service fees, at not more than 0.20% of the Fund's average
daily net assets. Prior to February 1, 1997, the investment
adviser voluntarily agreed to maintain the expenses of the Fund
at not more than 1.00% of the Fund's average daily net assets.
To the extent actual expenses were over this limitation, the net
investment income per share and the ratios would have been:
Net investment income $ 0.15 $ 0.18 $ 0.16 $ 0.07
Ratios (to average net assets):
Expenses## 1.11% 1.03% 1.12% 1.64%+
Net investment income 0.98% 1.33% 1.49% 0.91%+
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ELIGIBLE PURCHASERS
Class I shares are available for purchase only by the following Eligible
Purchasers:
(i) certain retirement plans established for the benefit of employees of
Massachusetts Financial Services Company ("MFS"), the Fund's investment
adviser, and employees of MFS' affiliates;
(ii) any fund distributed by MFS Fund Distributors, Inc. ("MFD"), the Fund's
distributor, if the fund seeks to achieve its investment objective by
investing primarily in shares of the Fund and other funds distributed by
MFD;
(iii)any retirement plan, endowment or foundation which: (a) purchases shares
directly through MFD (rather than through a third party broker or dealer or
other financial intermediary); and (b) invests at least $3 million in Class
I shares of the Fund either alone or in combination with investments in
Class I shares of other MFS funds distributed by MFD (additional
investments may be made in any amount); provided that MFD may accept
purchases in smaller amounts if it believes, in its sole discretion, that
such entity will make additional investments which will cause its total
investment to equal or exceed $3 million, within a reasonable period of
time;
(iv) bank trust departments which initially invest, on behalf of their trust
clients, at least $100,000 in Class I shares of the Fund (additional
investments may be made in any amount); provided that MFD may accept
smaller initial purchases if it believes, in its sole discretion, that the
bank trust department will make additional investments, on behalf of its
trust clients, which will cause its total investment to equal or exceed
$100,000 within a reasonable period of time; and
(v) certain retirement plans offered, administered or sponsored by insurance
companies, provided that these plans and insurance companies meet certain
criteria established by MFD from time to time.
In no event will the Fund, MFS, MFD or any of their affiliates pay any
sales commissions or compensation to any third party in connection with the sale
of Class I shares; the payment of any such sales commission or compensation
would, under the Fund's policies, disqualify the purchaser as an eligible
investor of Class I shares.
SHARE CLASSES OFFERED BY THE FUND
Four classes of shares of the Fund currently are offered for sale: Class A
shares, Class B shares, Class C shares and Class I shares. Class I shares are
available for purchase only by Eligible Purchasers, as defined above, and are
described in this Supplement. Class A shares, Class B shares and Class C shares
are described in the Fund's Prospectus and are available for purchase by the
general public.
Class A shares are offered at net asset value plus an initial sales charge
up to a maximum of 5.75% of the offering price (or a contingent deferred sales
charge (a "CDSC") of 1.00% upon redemption during the first year in the case of
purchases of $1 million or more and certain purchases by retirement plans), and
are subject to an annual distribution fee and service fee up to a maximum of
0.35% per annum. Class B shares are offered at net asset value without an
initial sales charge but are subject to a CDSC upon redemption (declining from
4.00% during the first year to 0% after six years) and an annual distribution
fee and service fee up to a maximum of 1.00% per annum; Class B shares convert
to Class A shares approximately eight years after purchase. Class C shares are
offered at net asset value without an initial sales charge but are subject to a
CDSC upon redemption of 1.00% during the first year and an annual distribution
fee and service fee up to a maximum of 1.00% per annum. Class I shares are
offered at net asset value without an initial sales charge or CDSC and are not
subject to a distribution or service fee. Class A, Class C and Class I shares do
not convert to any other class of shares of the Fund.
OTHER INFORMATION
Eligible Purchasers may only purchase Class I shares directly through MFD.
Class I shares do not have exchange privileges with any other MFS Fund. Eligible
Purchasers may redeem Class I shares of the Fund at net asset value.
Distributions paid by the Fund with respect to Class I shares generally will be
greater than those paid with respect to Class A shares, Class B shares and Class
C shares because expenses attributable to Class A shares, Class B shares and
Class C shares generally will be higher.
Subject to termination or revision at the sole discretion of MFS, MFS has
agreed to bear the Fund's expenses such that the Fund's "Other Expenses," which
are defined to include all Fund expenses except for management fees, Rule 12b-1
fees, taxes, extraordinary expenses, brokerage, transaction costs and class
specific expenses do not exceed 0.20% per annum of its average daily net assets
(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 "Other Expenses" will not exceed the Maximum Percentage. The
obligation of MFS to bear the Fund's Other Expenses pursuant to this
arrangement, and the Fund's obligation to pay the reimbursement fee 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 December 31, 1998.
The date of this Supplement is February 1, 1998 (as revised October 1, 1998).
