<PAGE>
As filed with the Securities and Exchange Commission on April 23,
1995
1933 Act File No. 74668
1940 Act File No. 811-
8326
- ------------------------------------------------------------
- --------------------------------------- --------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 3
AND
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 4
MFS VARIABLE INSURANCE TRUST
(Exact name of registrant as specified in its
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)
/X/ on April 23, 1995 pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(i)
/ / on March 1, 1995 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 for its first
fiscal year
ended December 31, 1994 on February 28, 1995.
- ------------------------------------------
- -----------------------------------------------------------
<PAGE>
MFS VARIABLE INSURANCE TRUST
MFS OTC SERIES
MFS GROWTH SERIES
MFS RESEARCH SERIES
MFS GROWTH WITH INCOME SERIES
MFS TOTAL RETURN SERIES
MFS UTILITIES SERIES
MFS HIGH INCOME SERIES
MFS WORLD GOVERNMENTS SERIES
MFS STRATEGIC FIXED INCOME SERIES
MFS BOND SERIES
MFS LIMITED MATURITY SERIES
MFS MONEY MARKET SERIES
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)
STATEMENT OF
ITEM NUMBER ADDITIONAL
FORM N-1A, PART A PROSPECTUS CAPTION INFORMATION
CAPTION
----------------- ------------------ ---------------
- ----
1 (a), (b) Front Cover Page *
2 (a) Expense Summary *
(b), (c) * *
<PAGE>
STATEMENT OF
ITEM NUMBER
ADDITIONAL
FORM N-1A, PART A PROSPECTUS CAPTION
INFORMATION CAPTION
----------------- ------------------ -------
- ------------
3 (a) Condensed Financial Information
*
(b) *
*
(c) Information Concerning Shares
*
of Each Series - Performance
Information
(d) Condensed Financial Information
*
4 (a) Investment Concept of the Trust;
*
Investment Objectives and
Policies; Investment Techniques
(b) Investment Objectives and Policies;
*
Investment Techniques
(c) Investment Techniques; Additional
*
Risk Factors
5 (a) Investment Concept of the Trust;
*
Management of the Series -
Investment Adviser
(b) Front Cover Page; Management of
*
the Series; Investment Adviser;
Back Cover Page
(c), (d) *
*
(e) Information Concerning Shares
*
of Each Series - Expenses
(f), (g) Expense Summary
*
5A (a), (b), (c) **
**
<PAGE>
STATEMENT OF
ITEM NUMBER
ADDITIONAL
FORM N-1A, PART A PROSPECTUS CAPTION
INFORMATION CAPTION
----------------- ------------------ -----
- --------------
6 (a) Information Concerning Shares
*
of Each Series - Description of
Shares, Voting Rights and Liabilities;
Information Concerning Shares of
Each Series - Purchases and
Redemptions; Information
Concerning Shares of Each
Series - Purchases and
Redemptions
(b), (c), (d) *
*
(e) Shareholder Communication
*
(f) Information Concerning Shares
*
of Each Series - Distributions
(g) Information Concerning Shares
*
of Each Series - Tax Status;
Information Concerning Shares
of Each Series - Distributions
7 (a) Front Cover Page; Management
*
of the Series - Distributor; Back
Cover Page
(b) Information Concerning Shares
*
of Each Series - Purchases and
Redemptions; Information
Concerning Shares of Each
Series - Net Asset Value
(c) *
*
(d) Front Cover Page; Information
*
Concerning Shares of Each Series -
Purchases and Redemptions
(e), (f) *
*
<PAGE>
STATEMENT OF
ITEM NUMBER
ADDITIONAL
FORM N-1A, PART A PROSPECTUS CAPTION
INFORMATION CAPTION
----------------- ------------------ -----
- --------------
8 (a), (b) Information Concerning Shares
*
of Each Series - Purchases and
Redemptions
(c) *
*
(d) Information Concerning Shares
*
of Each Series - Purchases and
Redemptions
9 *
*
<PAGE>
STATEMENT
OF
ITEM NUMBER ADDITIONAL
FORM N-1A, PART B PROSPECTUS CAPTION INFORMATION
CAPTION
----------------- ------------------ --------------
- -----
10 (a), (b) * Front Cover
Page
11 * Front Cover
Page
12 * *
13 (a) * Investment
Techniques
(b), (c) * Investment
Techniques;
Investment
Restrictions
(d) * Investment
Techniques
14 (a), (b) * Management of
the Trust
(c) * Management of
the Trust -
Appendix A
15 (a), (b), (c) * *
16 (a) * Management of
the Trust -
Investment
Adviser;
Management
of the Trust -
Trustees and
Officers
(b) * Management of
the Trust -
Investment
Adviser
(c), (d) * *
(e) * Portfolio
Transactions and
Brokerage
Commissions
(f), (g) * *
(h) * Management of
the Trust -
Custodian;
Independent
Accountants
and Financial
Statements;
Back Cover
(i) * Management of
the Trust -
Shareholder
Servicing Agent
<PAGE>
STATEMENT OF
ITEM NUMBER ADDITIONAL
FORM N-1A, PART B PROSPECTUS CAPTION INFORMATION
CAPTION
----------------- ------------------ -----------------
- --
17 (a) * Portfolio
Transactions and
Brokerage
Commissions
(b) * *
(c) * Portfolio
Transactions and
Brokerage
Commissions
(d), (e) * *
18 (a) * Description of
Shares Voting
Rights and
Liabilities
(b) * *
19 (a) * *
(b) * Determination of
Net Asset
Value and
Performance - Net
Asset Value
(c) * *
20 * Tax Status
21 (a), (b) * Management of the
Trust -
Distributor
(c) * *
22 (a) * *
(b) * Determination of
Net Asset
Value;
Performance Information
23 * Independent
Accountants and
Financial
Statements
- --------------------
* Not Applicable
** Contained in Annual Repor
The Prospectus which is referenced in the Part C was filed with
the 485(a) on February 22,1995.
The Statement of Additional Information which is referenced in the
Part C was filed with the 485(a) on February 22, 1995.
Federal Income Tax Information
on Distributions
(For the year ended December 31, 1994)
Distribution Sources
The Fund has designated $19,006 as a long-term
capital gain distribution for tax purposes. This distri-
bution was made to shareholders of record as of
December 28, 1994, payable December 29, 1994.
Tax Form Summary
In January 1995, shareholders will be mailed a Tax
Form Summary reporting the federal tax status of all
distributions paid during the calendar year 1994.
Performance
The following information illustrates the historical performance
of the MFS World Governments Series in comparison to various
market indicators. Fund results do not reflect the deduction of
any applicable surrender charge. Benchmark comparisons are
unmanaged and do not reflect any fees or expenses. You cannot
invest in an index. All results reflect the reinvestment of all
dividends and capital gains.
Growth of a Hypothetical $10,000 investment
(Covering the period 7/1/94 - 12/31/94)
10,300
10,200 $10,163
$10,115
10,100 $10,058
10,000
9,900
9,800 7/94 8/94 9/94 10/94 11/94 12/94
Aggregate Total Returns
6/14/94* - 12/31/94
World Governments Variable Insurance Trust +0.79%
JP Morgan Global Govt Bond Index +1.63%
Consumer Price Index+ +1.15%
* Commencement of investment operations. Benchmark comparisons
are form 7/1/94.
+ The Consumer Price Index is a popular measure of change in
prices.
All results are historical and, therefore, are not an indication
of future results. The principal va and income return of an
investment in an annuity will vary with changes in market
conditions, all shares, when redeemed, may be worth more or less
than their original cost. All Fund results reflect the applicable
expense subsidy which is explained in the Notes to Financial
Statements. Had the subsidy not been in effect, the results would
have been less favorable. The subsidy may be rescinded at any
time.
<PAGE>
MFS VARIABLE INSURANCE TRUST -
MFS WORLD GOVERNMENTS SERIES
Portfolio of Investments - December 31, 1994
<TABLE>
<CAPTION>
BONDS - 56.1%
- ------------------------------------------------------------------
- --------------------------------
PRINCIPAL AMOUNT
ISSUER (000
OMITTED) VALUE
- ------------------------------------------------------------------
- --------------------------------
<S> <C>
<C>
U.S. DOLLAR DENOMINATED - 8.9%
U.S.Treasury Notes, 7.125s, 1999 $
200 $ 194,250
U.S. Treasury Notes, 7.25s, 2004
65 62,390
- ----------------
$ 256,640
- ------------------------------------------------------------------
- --------------------------------
FOREIGN -- U.S. DOLLAR DENOMINATED - 1.7%
GREECE - 1.7%
Hellenic Republic, 9.75s, 1999 $
50 $ 49,375
- ------------------------------------------------------------------
- --------------------------------
FOREIGN -- NON-U.S. DOLLAR DENOMINATED - 45.5%
AUSTRALIA - 3.2%
Australian Government, 6.25s, 1999 AUD
135 $ 91,128
- ------------------------------------------------------------------
- --------------------------------
DENMARK - 2.1%
Kingdom of Denmark, 9s, 1998 DKK
100 $ 16,584
Kingdom of Denmark, 9s, 2000
270 44,512
- ----------------
$ 61,096
- ------------------------------------------------------------------
- --------------------------------
FRANCE - 4.8%
Government of France, 6.5s, 1996 FRF
250 $ 46,149
Government of France, 8s, 1998
370 69,583
Government of France, 7s, 1999
130 23,376
- ----------------
$ 139,108
- ------------------------------------------------------------------
- --------------------------------
GERMANY - 5.8%
Deutschland Republic, 6.5s, 2003 DEM
280 $ 167,859
- ------------------------------------------------------------------
- --------------------------------
IRELAND - 4.2%
Republic of Ireland, 9.75s, 1998 IEP
75 $ 119,104
- ------------------------------------------------------------------
- --------------------------------
ITALY - 2.0%
Republic of Italy, 10s, 1996 ITL
40,000 $ 24,307
Republic of Italy, 8.5s, 1999
25,000 13,818
Republic of Italy, Euro-Yen, 3.5s, 2001 JPY
2,000 18,689
- ----------------
$ 56,814
- ------------------------------------------------------------------
- --------------------------------
JAPAN - 2.9%
Japanese Development Bank, 5s, 1999 JPY
2,000 $ 20,834
World Bank Euro-Yen, 5.25s, 2002
6,000 62,803
- ----------------
$ 83,637
- ------------------------------------------------------------------
- --------------------------------
NETHERLANDS - 7.3%
Netherlands Government, 6.25s, 1998 NLG
140 $ 78,101
Netherlands Government, 7s, 1999
170 96,601
Netherlands Government, 7.5s, 1999
60 34,769
- ----------------
$ 209,471
- ------------------------------------------------------------------
- --------------------------------
New Zealand - 5.5%
Government of New Zealand, 8s, 1995 NZD
250 $ 157,945
- ------------------------------------------------------------------
- --------------------------------
Spain - 1.8%
Government of Spain, 8.3s, 1998 ESP
3,900 $ 26,620
Government of Spain, 7.4s, 1999
4,000 26,028
- ----------------
$ 52,648
- ------------------------------------------------------------------
- --------------------------------
<PAGE>
UNITED KINGDOM - 5.9%
United Kingdom Gilts, 10.25s, 1999 GBP
55 $ 91,315
United Kingdom Gilts, 9s, 2000
50 79,318
- ----------------
$ 170,633
- ------------------------------------------------------------------
- --------------------------------
TOTAL FOREIGN -- NON-U.S. DOLLAR DENOMINATED
$ 1,309,443
- ------------------------------------------------------------------
- --------------------------------
TOTAL BONDS (IDENTIFIED COST, $1,626,131)
$ 1,615,458
- ------------------------------------------------------------------
- --------------------------------
<CAPTION>
CALL OPTIONS PURCHASED - 0.1%
- ------------------------------------------------------------------
- --------------------------------
PRINCIPAL AMOUNT
OF
CONTRACTS
EXPIRATION MONTH/STRIKE PRICE (000
OMITTED)
- ------------------------------------------------------------------
- --------------------------------
<S> <C>
<C>
GERMAN MARKS
March/1.550 DEM
801 $ 601
JAPANESE BONDS
February/104.19 JPY
10,000 1,751
January/96.458
14,000 448
- ------------------------------------------------------------------
- --------------------------------
TOTAL CALL OPTIONS PURCHASED (PREMIUMS PAID, $5,315)
$ 2,800
- ------------------------------------------------------------------
- --------------------------------
PUT OPTIONS PURCHASED
- ------------------------------------------------------------------
- --------------------------------
EXPIRATION MONTH/STRIKE PRICE
- ------------------------------------------------------------------
- --------------------------------
GERMAN MARKS
January/1.5875 DEM
1,616 $ 170
JAPANESE BONDS
February/104.25 JPY
5,000 60
SWISS FRANCS/GERMAN MARKS
March/0.85 CHF
119 315
- ------------------------------------------------------------------
- --------------------------------
TOTAL PUT OPTIONS PURCHASED (PREMIUMS PAID, $5,126)
$ 545
- ------------------------------------------------------------------
- --------------------------------
<CAPTION>
SHORT-TERM OBLIGATIONS - 41.6%
- ------------------------------------------------------------------
- --------------------------------
PRINCIPAL AMOUNT
(000
OMITTED)
- ------------------------------------------------------------------
- --------------------------------
<S> <C>
<C>
Federal Home Loan Bank, due 1/03/95,
AT AMORTIZED COST $
1,200 $ 1,199,233
- ------------------------------------------------------------------
- --------------------------------
TOTAL INVESTMENTS (IDENTIFIED COST, $2,845,805)
$ 2,818,036
- ------------------------------------------------------------------
- --------------------------------
<CAPTION>
CALL OPTIONS WRITTEN
- ------------------------------------------------------------------
- --------------------------------
PRINCIPAL AMOUNT
OF
CONTRACTS
EXPIRATION MONTH/STRIKE PRICE (000
OMITTED)
- ------------------------------------------------------------------
- --------------------------------
<S> <C>
<C>
JAPANESE BONDS
February/104.25 JPY
5,000 $ (885)
SWISS FRANCS/GERMAN MARKS
March/0.8378 CHF
119 (380)
- ------------------------------------------------------------------
- --------------------------------
TOTAL CALL OPTIONS WRITTEN (PREMIUMS RECEIVED, $1,174)
$ (1,265)
- ------------------------------------------------------------------
- --------------------------------
<PAGE>
PUT OPTIONS WRITTEN - (0.2)%
- ------------------------------------------------------------------
- --------------------------------
EXPIRATION MONTH/STRIKE PRICE
- ------------------------------------------------------------------
- --------------------------------
CANADIAN DOLLARS
March/1.38 CAD
68 $ (932)
GERMAN MARKS
February/1.56 DEM
338 (1,947)
March/1.6
827 (2,539)
JAPANESE BONDS
February/104.19 JPY
10,000 (40)
- ------------------------------------------------------------------
- --------------------------------
TOTAL PUT OPTIONS WRITTEN (PREMIUMS RECEIVED, $10,344)
$ (5,458)
- ------------------------------------------------------------------
- --------------------------------
OTHER ASSETS, LESS LIABILITIES - 2.4%
$ 69,936
- ------------------------------------------------------------------
- --------------------------------
NET ASSETS - 100.0%
$ 2,881,249
- ------------------------------------------------------------------
- --------------------------------
</TABLE>
Abbreviations have been used throughout this report to indicate
amounts shown in
currencies other than the U.S. dollar. A list of abbreviations is
shown below.
<TABLE>
<S> <C>
<C>
AUD = Australian Dollars ESP = Spanish Pesetas
ITL = Italian Lire
CAD = Candian Dollars FRF = France Francs
JPY = Japanese Yen
CHF = Swiss Francs GBP = British Pounds
NLG = Dutch Guilders
DEM = Deutsche Marks IEP = Irish Punts
NZD = New Zealand Dollars
DKK = Danish Kroner
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
MFS VARIABLE INSURANCE TRUST -
MFS WORLD GOVERNMENTS SERIES
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
December 31, 1994
- ------------------------------------------------------------------
- -------------
Assets:
<S> <C>
Investments, at value (identified cost, $2,845,805) $
2,818,036
Cash
6,214
Net receivable for forward foreign currency exchange
contracts sold
20,403
Interest receivable
38,803
Receivable from investment adviser
20,828
Deferred organization expenses
5,312
------
- -------
Total assets $
2,909,596
------
- -------
Liabilities:
Payable for Fund shares reacquired $
4,518
Written options outstanding, at value
(premiums received, $11,518)
6,723
Net payable for forward foreign currency exchange
contracts purchased
11,572
Payable to affiliate for management fee
5,369
Accrued expenses and other liabilities
165
------
- -------
Total liabilities $
28,347
------
- -------
Net assets $
2,881,249
------
- -------
------
- -------
Net assets consist of:
Paid-in capital $
2,932,404
Unrealized depreciation on investments and
translation of assets and liabilities in
foreign currencies
(14,064)
Accumulated net realized loss
on investments and foreign currency transactions
(27,079)
Accumulated distributions in excess of net
investment income
(10,012)
------
- -------
Total $
2,881,249
------
- -------
------
- -------
Shares of beneficial interest outstanding
293,306
------
- -------
------
- -------
Net asset value, offering price, and redemption price
per share (net assets/shares of
beneficial interest outstanding) $
9.82
------
- -------
------
- -------
</TABLE>
See notes to financial statements
<PAGE>
MFS VARIABLE INSURANCE TRUST -
MFS WORLD GOVERNMENTS SERIES
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended December 31, 1994*
- ------------------------------------------------------------------
- -------------
Net investment income:
<S> <C>
Interest Income $
57,735
------
- -------
Expenses -
Management fee $
7,604
Trustees' compensation
617
Shareholder servicing agent fee
992
Printing
15,459
Auditing fees
13,500
Legal fees
4,366
Custodian fee
938
Amortization of organization expenses
672
Miscellaneous
2,464
------
- -------
Total expenses $
46,612
Reduction of expenses by investment adviser
(36,473)
------
- -------
Net expenses $
10,139
------
- -------
Net investment income $
47,596
------
- -------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $
(11,463)
Written option transactions
2,291
Foreign currency transactions
(1,863)
------
- -------
Net realized loss on investments $
(11,035)
------
- -------
Change in unrealized appreciation (depreciation) -
Investments $
(27,769)
Written options
4,795
Translation of assets and liabilities in foreign
currencies
8,910
------
- -------
Net unrealized loss on investments $
(14,064)
------
- -------
Net realized and unrealized loss
on investments and foreign currency $
(25,099)
------
- -------
Increase in net assets
from operations $
22,497
------
- -------
------
- -------
<FN>
* For the period from the commencement of investment operations,
June 14, 1994,
to December 31, 1994
</TABLE>
See notes to financial statements
<PAGE>
MFS VARIABLE INSURANCE TRUST -
MFS WORLD GOVERNMENTS SERIES
STATEMENT OF CHANGES IN NET ASSETS
Year ended December 31, 1994*
- ------------------------------------------------------------------
- -------------
<TABLE>
<CAPTION>
Increase (decrease) in net assets:
<S> <C>
From operations -
Net investment income $
47,596
Net realized loss on investments and
foreign currency transactions
(11,035)
Net unrealized loss on investments and
foreign currency transactions
(14,064)
------
- -------
Increase in net assets from operations $
22,497
------
- -------
Distributions declared to shareholders -
From net investment income $
(47,596)
In excess of net investment income
(26,056)
------
- -------
Total distributions declared to shareholders $
(73,652)
------
- -------
Fund share (principal) transactions -
Net proceeds from sale of shares $
3,259,477
Net asset value of shares issued to shareholders
in reinvestment of distributions
73,652
Cost of shares reacquired
(409,225)
------
- -------
Increase in net assets from
Fund share transactions $
2,923,904
------
- -------
Total increase in net assets $
2,872,749
Net assets:
At beginning of period
8,500
------
- -------
At end of period (including accumulated distributions
in excess of net investment income of $10,012) $
2,881,249
------
- -------
------
- -------
<FN>
*For the period from the commencement of investment operations,
June 14, 1994,
to December 31, 1994
</TABLE>
See notes to financial statements
<PAGE>
MFS VARIABLE INSURANCE TRUST -
MFS WORLD GOVERNMENTS SERIES
<TABLE>
<CAPTION>
Year
ended
FINANCIAL HIGHLIGHTS
December 31, 1994*
- ------------------------------------------------------------------
- -------------
Per share data (for a share outstanding throughout the period):
<S>
<C>
Net asset value - beginning of period $
10.00
- -------
Income from investment operations ++ -
Net investment income** $
0.17
Net realized and unrealized loss on investments
(0.09)
- -------
Total from investment operations $
0.08
- -------
Less distributions declared to shareholders -
From net investment income $
(0.17)
In excess of net investment income
(0.09)
Total distributions declared to shareholders $
(0.26)
Net asset value - end of period $
9.82
- -------
- -------
Total return
0.79 %
Ratios (to average net assets)/Supplemental data**:
Expenses
1.00 %+
Net investment income
4.68 %+
Portfolio turnover
62 %
Net assets at end of period (000 omitted) $
2,881
<FN>
+ Annualized.
++ Per share data is based on average shares outstanding.
* For the period from the commencent of investment operations,
June 14, 1994
to December 31, 1994.
** The investment adviser did not impose a portion of its
management fee for
the period indicated. If this fee had been incurred by the
Fund, the net
investment income per share and the ratios would have been:
</TABLE>
<TABLE>
<S>
<C>
Net investment income $
0.16
Ratios (to average net assets):
Expenses
1.10 %+
Net investment income
4.58 %+
</TABLE>
See notes to financial statements
<PAGE>
MFS VARIABLE INSURANCE TRUST -
MFS WORLD GOVERNMENTS SERIES
NOTES TO FINANCIAL STATEMENTS
- ------------------------------------------------------------------
- --------------
(1) BUSINESS AND ORGANIZATION
MFS World Governments Series (the "Fund") is a non-diversified
series of MFS
Variable Insurance Trust (The "Trust"), which is comprised of the
following
twelve series: the OTC Series, Growth Series, Research Series,
Growth With
Income Series, Total Return Series, Utilities Series, High Income
Series, World
Governments Series, Strategic Fixed Income Series, Bond Series,
Limited Maturity
Series and Money Market Series. The Trust is organized as a
Massachusetts
business trust and is registered under the Investment Company Act
of 1940, as
amended, as an open-end management investment company.
The shareholders of each series of the Trust are variable annuity
and/or life
insurance products offered by financial institutions. At December
31, 1994,
there are ten shareholders which own all of the outstanding shares
of the Fund.
(2) SIGNIFICANT ACCOUNTING POLICIES
INVESTMENT VALUATIONS
Debt securities (other than short-term obligations which mature in
60 days or
less), including listed issues and forward contracts, are valued
on the basis of
valuations furnished by dealers or by a pricing service with
consideration to
factors such as institutional-size trading in similar groups of
securities,
yield, quality, coupon rate, maturity, type of issue, trading
characteristics
and other market data, without exclusive reliance upon exchange or
over-the-
counter prices. Short-term obligations, which mature in 60 days or
less, are
valued at amortized cost, which approximates value. Non-U.S.
dollar denominated
short-term obligations are valued at amortized cost as calculated
in the base
currency and translated into U.S. dollars at the closing daily
exchange rate.
Futures contracts, options and options on futures contracts listed
on
commodities exhanges are valued at closing settlement prices.
Over-the-counter
options are valued by brokers through the use of a pricing model
which takes
into account closing bond valuations, implied volatility and
short-term
repurchase rates. Securities for which there are no such
quotations or
valuations are valued at fair value as determined in good faith by
or at the
direction of the Trustees.
REPURCHASE AGREEMENTS
The Fund may enter into repurchase agreements with institutions
that the Fund's
investment adviser has determined are creditworthy. Each
repurchase agreement is
recorded at cost. The Fund requires that the securities purchased
in a
repurchase transaction be transferred to the custodian in a manner
sufficient to
enable the Fund to obtain those securities in the event of a
default under the
repurchase agreement. The Fund monitors, on a daily basis, the
value of the
securities transferred to ensure that the value, including accrued
interest, of
the securities under each repurchase agreement is greater than
amounts owed to
the Fund under each such repurchase agreement.
FOREIGN CURRENCY TRANSLATION
Investment valuations, other assets, and liabilities initially
expressed in
foreign currencies are converted each business day into U.S.
dollars based upon
current exchange rates. Purchases and sales of foreign investments
and income
and expenses are converted into U.S. dollars based upon currency
exchange rates
prevailing on the respective dates of such transactions. Gains and
losses
attributable to foreign currency exchange rates on sales of
securities are
recorded
<PAGE>
for financial statement purposes as net realized gains and losses
on
investments. Gains and losses attributable to foreign exchange
rate movements on
income and expenses are recorded for financial statement purposes
as foreign
currency transaction gains and losses. That portion of realized
and unrealized
gains and losses on investments that result from fluctuations in
foreign
currency exchange rates is not separately disclosed.
DEFERRED ORGANIZATION EXPENSES
Costs incurred by the Fund in connection with its organization
have been
deferred and are being amortized on a straight-line basis over a
five-year
period beginning on the date of commencement of operations of the
Fund.
WRITTEN OPTIONS
The Fund may write covered call or put options for which premiums
are received
and are recorded as liabilities, and are subsequently adjusted to
the current
value of the options written. Premiums received from writing
options which
expire are treated as realized gains. Premiums received from
writing options
which are exercised or are closed are offset against the proceeds
or amount paid
on the transaction to determine the realized gain or loss. If a
put option is
exercised, the premium reduces the cost basis of the securities
purchased by the
Fund. The Fund, as writer of an option, may have no control over
whether the
underlying securities may be sold (call) or purchased (put) and,
as a result,
bears the market risk of an unfavorable change in the price of the
securities
underlying the written option. In general, written call options
may serve as a
partial hedge against decreases in value in the underlying
securities to the
extent of the premium received. Written options may also be used
as a part of an
income-producing strategy reflecting the view of the Fund's
management on the
direction of interest rates.
FUTURES CONTRACTS
The Fund may enter into financial futures contracts for the
delayed delivery of
securities, currency or contracts based on financial indices at a
fixed price on
a future date. In entering such contracts, the Fund is required to
deposit
either in cash or securities an amount equal to a certain
percentage of the
contract amount. Subsequent payments are made or received by the
Fund each day,
depending on the daily fluctuations in the value of the underlying
security, and
are recorded for financial statement purposes as unrealized gains
or losses by
the Fund. The Fund's investment in futures contracts is designed
to hedge
against anticipated future changes in interest or exchange rates
or securities
prices. The Fund may also invest in futures contracts for non-
hedging purposes.
For example, interest rate futures may be used in modifying the
duration of the
portfolio without incurring the additional transaction costs
involved in buying
and selling the underlying securities. Should interest rates,
exchange rates or
securities prices move unexpectedly, the Fund may not achieve the
anticipated
benefits of the financial futures contracts and may realize a
loss.
SECURITY LOANS
The Fund may lend its securities to member banks of the Federal
Reserve System
and to member firms of the New York Stock Exchange or subsidiaries
thereof. The
loans are collateralized at all times by cash or securities with a
market value
at least equal to the market value of securities loaned. As with
other
extensions of credit, the Fund may bear the risk of delay in
recovery or even
loss of rights in the collateral should the borrower of the
securities fail
financially. The Fund receives compensation for lending its
securities in the
form of fees or from all or a portion of the income from
investment of the
collateral. At December 31, 1994, the Fund had no securities on
loan.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
The Fund may enter into forward foreign currency exchange
contracts for the
purchase or sale of a specific foreign currency at a fixed price
on a future
date. Risks may arise upon entering these contracts from the
potential inability
<PAGE>
of counterparties to meet the terms of their contracts and from
unanticipated
movements in the value of a foreign currency relative to the U.S.
dollar. The
Fund will enter into forward contracts for hedging purposes as
well as for non-
hedging purposes. For hedging purposes, the Fund may enter into
contracts to
deliver or receive foreign currency it will receive from or
require for its
normal investment activities. It may also use contracts in a
manner intended to
protect foreign currency-denominated securities from declines in
value due to
unfavorable exchange rate movements. For non-hedging purposes, the
Fund may
enter into contracts with the intent of changing the relative
exposure of the
Fund's portfolio of securities to different currencies to take
advantage of
anticipated changes. The forward foreign currency exchange
contracts are
adjusted by the daily exchange rate of the underlying currency and
any gains or
losses are recorded for financial statement purposes as unrealized
until the
contract settlement date.
INVESTMENT TRANSACTIONS AND INCOME
Investment transactions are recorded on the trade date. Interest
income is
recorded on the accrual basis. All premium and original issue
discount are
amortized or accreted for both financial statement and tax
reporting purposes as
required by federal income tax regulations. Dividend income is
recorded on the
ex-dividend date for dividends received in cash. Interest payments
received in
additional securities are recorded on the ex-interest date in an
amount equal to
the value of the security on such date.
TAX MATTERS AND DISTRIBUTIONS
The Fund's policy is to comply with the provisions of the Internal
Revenue Code
(the Code) applicable to regulated investment companies and to
distribute to
shareholders all of its net taxable income, including any net
realized gain on
investments. Accordingly, no provision for federal income or
excise tax is
provided. The Fund files a tax return annually using tax
accounting methods
required under provisions of the Code which may differ from
generally accepted
accounting principles, the basis on which these financial
statements are
prepared. Accordingly, the amount of net investment income and net
realized gain
reported on these financial statements may differ from that
reported on the
Fund's tax return, and consequently, the character of
distributions to
shareholders reported in the financial highlights may differ from
that reported
to shareholders on Form 1099-DIV. Foreign taxes have been provided
for on
interest income earned on foreign investments in accordance with
the applicable
country's tax rates and to the extent unrecoverable are recorded
as a reduction
of investment income. Distributions to shareholders are recorded
on the ex-
dividend date.
The Fund distinguishes between distributions on a tax basis and a
financial
reporting basis and requires that only distributions in excess of
tax basis
earnings and profits are reported in the financial statements as a
return of
capital. Differences in the recognition or classification of
income between the
financial statements and tax earnings and profits which result in
temporary
over-distributions for financial statement purposes, are
classified as
distributions in excess of net investment income or accumulated
net realized
gains. During the year ended December 31, 1994, $16,044 was
reclassified from
accumulated distributions in excess of net investment income to
accumulated net
realized loss on investments, due to differences between book and
tax accounting
for currency transactions and tax designation of distributions.
This change had
no effect on the net assets or net asset value per share.
(3) TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISER
The Fund has an investment advisory agreement with Massachusetts
Financial
Services Company (MFS) to provide overall investment advisory and
administrative
services, and general office facilities. The management fee,
computed
<PAGE>
daily and paid monthly at an annual rate of 0.75% of average daily
net assets,
amounted to $7,604 for the period from June 14, 1994 (the
commencement of
investment operations) to December 31, 1994. MFS has agreed to pay
until
December 31, 1998 expenses of the Fund such that the Fund's
aggregate operating
expenses will not exceed, on an annualized basis, 1.00% of the
average daily net
assets of the Fund. Such payments by MFS are subject to
reimbursement by the
Fund of an expense reimbursement fee to MFS computed and paid at a
percentage of
its average daily net assets for its then current fiscal year with
a limitation
that immediately after such payment, the aggregate operating of
the Fund will
not exceed, on an annualized basis, 1.00% of its average daily net
assets. This
expense reimbursement agreement terminates for the Fund on the
earlier of the
date on which payments made thereunder by the Fund equal the prior
payments of
such reimbursable expenses by MFS or December 31, 1998. For the
period ended
December 31, 1994, expenses borne by MFS and subject to
reimbursement by the
Fund to MFS under this arrangement were $36,473.
The Fund pays no compensation directly to its Trustees who are
officers of the
investment adviser, or to officers of the Fund, all of whom
receive remuneration
for their services to the Fund from MFS. Certain of the officers
and Trustees of
the Fund are officers or directors of MFS, MFS Financial Services,
Inc. (FSI)
and MFS Service Center, Inc. (MFSC). Effective January 1, 1995,
FSI became MFS
Fund Distributors, Inc. (MFD).
SHAREHOLDER SERVICING AGENT
MFSC, a wholly owned subsidiary of MFS, earned $992 for its
services as
shareholder servicing agent. The fee is calculated as a percentage
of the
average daily net assets of the Fund at an effective annual rate
of 0.10%.
(4) PORTFOLIO SECURITIES
Purchases and sales of investments, other than purchased option
transactions and
short-term obligations, were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
-------------------------------------------------------------
- -------------------------------------------------
<S>
<C> <C>
U.S. government securities $
660,307 $ 398,974
- ------------ ------------
- ------------ ------------
Investments (non-U.S. government securities) $
2,331,585 $ 956,840
- ------------ ------------
- ------------ ------------
</TABLE>
The cost and unrealized appreciation or depreciation in value of
the investments
owned by the Fund, as computed on a federal income tax basis, are
as follows:
<TABLE>
<S>
<C>
Aggregate cost $
2,838,709
- ------------
- ------------
Gross unrealized depreciation $
(28,402)
Gross unrealized appreciation
7,729
- ------------
Net unrealized depreciation $
(20,673)
- ------------
- ------------
</TABLE>
Losses of $38,084 incurred after October 31, 1994 have been
deferred until next
year for tax purposes.
(5) SHARES OF BENEFICIAL INTEREST
The Fund's Declaration of Trust permits the Trustees to issue an
unlimited
number of full and fractional shares of beneficial interest
(without par value).
Transactions in Fund shares were as follows:
<PAGE>
<TABLE>
<CAPTION>
PERIOD ENDED DECEMBER 31, 1994*
SHARES
-------------------------------------------------------------
- ---------------------------------------------------
<S>
<C>
Shares sold
325,790
Shares issued to shareholders in
reinvestment of distributions
7,470
Shares reacquired
(40,804)
- ------------
Net increase (decrease)
292,456
- ------------
- ------------
<FN>
* For the period from commencement of investment operations,
June 14, 1994 to
December 31, 1994.
</TABLE>
(6) LINE OF CREDIT
The Fund entered into an agreement which enables it to participate
with other
funds managed by MFS, or an affiliate of MFS, in an unsecured line
of credit
with a bank which permits borrowings up to $300 million,
collectively.
Borrowings may be made to temporarily finance the repurchase of
Fund shares.
Interest is charged to each fund, based on its borrowings, at a
rate equal to
the bank's base rate. In addition, a commitment fee, based on the
average daily
unused portion of the line of credit, is allocated among the
participating funds
at the end of each quarter.
(7) FINANCIAL INSTRUMENTS
The Fund regularly trades financial instruments with off-balance
sheet risk in
the normal course of its investing activities in order to manage
exposure to
market risks such as interest rates and foreign currency exchange
rates. These
financial instruments include written options, forward foreign
currency exchange
contracts and futures contracts.
The notional or contractual amounts of these instruments represent
the
investment the Fund has in particular classes of financial
instruments and does
not necessarily represent the amounts potentially subject to risk.
The
measurement of the risks associated with these instruments is
meaningful only
when all related and offsetting transactions are considered. A
summary of
obligations under these financial instruments at December 31,
1994, is as
follows:
WRITTEN OPTION TRANSACTIONS
<TABLE>
<CAPTION>
1994 Calls
1994 Puts
------------
- --------------------- ---------------------------------
Principal
Amount Principal Amount
of Contracts
of Contracts
(000
Omitted) Premiums (000 Omitted)
Premiums
- ------------------------------------------------------------------
- ------------------------------------------------------------------
<S> <C>
<C> <C> <C>
OUTSTANDING, BEGINNING OF PERIOD --
$ -- -- $ --
Options written
Canadian Dollars --
- -- 68 353
Deutsche Marks
336 564 1,501
9,480
Deutsche Marks/British Pounds --
- -- 466 1,948
Italian Lire/Deutsche Marks
81,843 138 82,662
140
Japanese Yen
5,000 673 10,000
1,075
<PAGE>
Swedish Kronor/Deutsche Marks
285 216 -- --
Swiss Francs/Deutsche Marks
119 501 359
225
Options terminated in closing transactions
Deutsche Marks/British Pounds --
- -- (466) (1,948)
Swedish Kronor/Deutsche Marks
(285) (216) -- --
Options exercised
Deutsche Marks
(336) (564) -- --
Italian Lire/Deutsche Marks --
- -- (82,662) (140)
Options expired
Deutsche Marks --
- -- (336) (564)
Italian Lire/Deutsche Marks
(81,843) (138) -- --
Swiss Francs/Deutsche Marks --
- -- (359) (225)
------------
- --- -------------- -------------- ---------------
OUTSTANDING, END OF PERIOD
5,119 $ 1,174 11,233 $
10,344
------------
- --- -------------- -------------- ---------------
------------
- --- -------------- -------------- ---------------
OPTIONS OUTSTANDING AT END OF PERIOD
CONSIST OF:
Canadian Dollars --
$ -- 68 $ 353
Deutsche Marks --
- -- 1,165 8,916
Japanese Yen
5,000 673 10,000
1,075
Swiss Francs/Deutsche Marks
119 501 -- --
------------
- --- -------------- -------------- ---------------
5,119 $ 1,174 11,233 $
10,344
------------
- --- -------------- -------------- ---------------
------------
- --- -------------- -------------- ---------------
</TABLE>
At December 31, 1994, the Fund had sufficient cash and/or
securities at least
equal to the value of the written options.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
<TABLE>
<CAPTION>
Contracts
Net Unrealized
Settlement to Deliver/
In Exchange Contracts Appreciation/
Date Receive
for at Value (Depreciation)
- ------------------------------------------------------------------
- ------------------------------------------------------------------
<S> <C>
<C> <C> <C>
Sales 1/20/95 Australian Dollar 119,845
$ 91,297 $ 92,771 $ (1,474)
1/23/95 Canadadian Dollar 54,474
39,679 38,868 811
3/17/95 Swiss Franc 45,632
34,524 35,042 (518)
1/10/95 to 4/03/95 Deuteschemark 2,693,324
1,749,764 1,740,917 8,847
1/03/95 to 3/31/95 Danish Krone 480,040
78,656 78,984 (328)
1/21/95 to 3/22/95 Spanish Peseta 7,412,442
57,705 56,152 1,553
1/12/95 to 5/02/95 French Franc 764,260
147,481 143,305 4,176
1/17/95 to 1/18/95 British Pound 85,286
135,122 133,565 1,557
1/25/95 to 2/21/95 Irish Punt 180,675
265,602 263,655 1,947
2/16/95 Italian Lira 59,051,077
37,202 36,344 858
1/31/95 to 3/20/95 Japanese Yen 24,075,571
244,046 242,785 1,261
1/24/95 to 2/22/95 Netherlands Guilder 470,556
275,987 271,525 4,462
3/09/95 New Zealand Dollar 198,316
123,749 126,252 (2,503)
3/06/95 Swedish Krona 164,722
21,898 22,144 (246)
- -------------- -------------- -----------------
$ 3,302,712 $ 3,282,309 $ 20,403
- -------------- -------------- -----------------
- -------------- -------------- -----------------
<PAGE>
Purchases 1/23/95 Canadadian Dollar 120,851
$ 89,372 $ 86,230 $ (3,142)
1/12/95 Swiss Franc 146,080
114,906 111,752 (3,154)
1/18/95 to 3/20/95 Deuteschemark 2,617,391
1,690,073 1,692,124 2,051
1/03/95 to 2/06/95 Danish Krone 516,061
85,798 84,885 (913)
1/17/95 to 4/03/95 British Pound 147,059
233,742 230,292 (3,450)
2/21/95 Irish Punt 23,502
36,125 36,305 180
1/17/95 to 2/16/95 Italian Lira 93,273
95,540 93,273 (2,267)
1/13/95 to 2/27/95 Japanese Yen 45,464,902
462,668 457,584 (5,084)
1/24/95 Netherlands Guilder 87,504
51,988 50,484 (1,504)
2/21/95 to 2/28/95 New Zealand Dollar 288,991
178,158 184,134 5,976
2/06/95 Swedish Krona 242,363
32,846 32,581 (265)
- -------------- -------------- -----------------
$ 3,071,216 $ 3,059,644 $ (11,572)
- -------------- -------------- -----------------
- -------------- -------------- -----------------
</TABLE>
At December 31, 1994, the Fund had sufficient cash and/or
securities to cover
any commitments under these contracts.
MFS VARIABLE INSURANCE TRUST -
MFS WORLD GOVERNMENTS SERIES
Independent Auditors' Report
To the Trustees of MFS Variable Insurance Trust and Shareholders
of MFS World
Governments Series:
We have audited the accompanying statement of assets and
liabilities, including
the portfolio of investments, of MFS World Governments Series (the
Fund) (one of
the series constituting the MFS Variable Insurance Trust) as of
December 31,
1994. and the related statement of operations, statement of
changes in net
assets, and financial highlights for the period from June 14, 1994
(the
commencement of investment operations) through 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 audit.
We conducted our audit 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 the securities owned at
December 31, 1994 by
correspondence with the custodian. 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
audit provides 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
MFS World
Governments Series at December 31, 1994, the results of its
operations, the
changes in its net assets, and its financial highlights for the
stated period in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
February 3, 1995
<PAGE>
PART C
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
MFS WORLD GOVERNMENTS SERIES
(a) FINANCIAL STATEMENTS INCLUDED IN PART A
For the period from commencement of investment
operations on
June 10, 1994 to December 31, 1994:
Financial Highlights
Included in Part B of this Registration Statement:
At December 31, 1994:
Portfolio of Investments*
Statement of Assets and Liabilities*
For the period from commencement of investment
operations on
June 10, 1994 to December 31, 1994:
Statement of Operations*
Statement of Changes in Net Assets*
ALL SERIES EXCEPT WORLD GOVERNMENT SERIES
(b) FINANCIAL STATEMENTS INCLUDED IN PART A
None
Included in Part B of this Registration Statement:
At December 31, 1994:
Statement of Assets and Liabilities
Opinion of Independent Auditors
- --------------------
* Incorporated by reference to the MFS World Governments Series
Annual Report
to Shareholders dated December 31, 1994 filed with the SEC on or
about
February 20, 1995.
(b) EXHIBITS
1 (a) Declaration of Trust dated January 28,
1994. (1)
(b) Amendment to Declaration of Trust -
Designation of
Series dated January 31, 1994. (1)
<PAGE>
2 By-Laws, dated January 28, 1994. (1)
3 Not Applicable.
4 Not Applicable.
5 Investment Advisory Agreement by and between
Registrant and
Massachusetts Financial Services Company dated
April 14,
1994. (1)
6 Distribution Agreement between Registrant and
Massachusetts
Investors Services, Inc. dated April 14, 1994.
(1)
7 Not Applicable.
8 Custodian Agreement between Registrant and
Investors Bank &
Trust Company dated April 14, 1994. (1)
9 (a) Shareholder Servicing Agent Agreement between
Registrant
and MFS Service Center dated April 14, 1994.
(1)
(b) Dividend Disbursing Agency Agreement between
Registrant and
State Street Bank and Trust dated April 14,
1994. (1)
10 Opinion and Consent of Counsel filed with
Registrant's Rule
24f-2 Notice for fiscal year ended December
31, 1994 on
February 28, 1995.
11 Consent of Deloitte & Touche; filed herewith.
12 Not Applicable.
13 Investment Representation Letter is
incorporated by
reference to the Registrant's Pre-Effective
Amendment No. 1
(File No. 33-74668) filed on March 25, 1994.
14 Not Applicable.
15 Not Applicable.
16 Schedule of Computation for Performance
Quotations - Total
Return and Yield. (1)
17 Financial Data Schedule; filed herewith
<PAGE>
Power of Attorney dated August 12, 1994. (1)
- ------------------------
(1) Incorporated by reference to Registrant's Post-Effective
Amendment No.
1 filed with the SEC on October 20, 1994.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH
REGISTRANT
Not applicable.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
MFS OTC SERIES
(1)
(2)
TITLE OF CLASS NUMBER OF
RECORD HOLDERS
Shares of Beneficial Interest 1
(without par value) (as of
April 20, 1995)
MFS GROWTH SERIES
(1)
(2)
TITLE OF CLASS NUMBER OF
RECORD HOLDERS
Shares of Beneficial Interest 1
(without par value) (as of
April 20, 1995)
MFS RESEARCH SERIES
(1)
(2)
TITLE OF CLASS NUMBER OF
RECORD HOLDERS
Shares of Beneficial Interest 1
(without par value) (as of
April 20, 1995)
MFS GROWTH WITH INCOME SERIES
(1)
(2)
TITLE OF CLASS NUMBER OF
RECORD HOLDERS
Shares of Beneficial Interest 1
(without par value) (as of
April 20, 1995)
<PAGE>
MFS TOTAL RETURN SERIES
(1)
(2)
TITLE OF CLASS NUMBER OF
RECORD HOLDERS
Shares of Beneficial Interest 1
(without par value) (as of
April 20, 1995)
MFS UTILITIES SERIES
(1)
(2)
TITLE OF CLASS NUMBER OF
RECORD HOLDERS
Shares of Beneficial Interest 1
(without par value) (as of
April 20, 1995)
MFS HIGH INCOME SERIES
(1)
(2)
TITLE OF CLASS NUMBER OF
RECORD HOLDERS
Shares of Beneficial Interest 1
(without par value) (as of
April 20, 1995)
MFS WORLD GOVERNMENTS SERIES
(1)
(2)
TITLE OF CLASS NUMBER OF
RECORD HOLDERS
Shares of Beneficial Interest 2
(without par value) (as of
April 20, 1995)
MFS STRATEGIC FIXED INCOME SERIES
(1)
(2)
TITLE OF CLASS NUMBER OF
RECORD HOLDERS
Shares of Beneficial Interest 1
(without par value) (as of
April 20, 1995)
<PAGE>
MFS BOND SERIES
(1)
(2)
TITLE OF CLASS NUMBER OF
RECORD HOLDERS
Shares of Beneficial Interest 1
(without par value) (as of
April 20, 1995)
MFS LIMITED MATURITY SERIES
(1)
(2)
TITLE OF CLASS NUMBER OF
RECORD HOLDERS
Shares of Beneficial Interest 1
(without par value) (as of
April 20, 1995)
MFS MONEY MARKET SERIES
(1)
(2)
TITLE OF CLASS NUMBER OF
RECORD HOLDERS
Shares of Beneficial Interest 1
(without par value) (as of
April 20, 1995)
ITEM 27. INDEMNIFICATION
Section 5.3 of the Registrant's Declaration of Trust
(filed with
Registrant's Registration Statement on February 1, 1994) provides
that every
person who is or has been a Trustee or officer of the Registrant
shall be
indemnified by the Registrant against all liability and against
all expenses
reasonably incurred or paid by him in connection with any claim,
action, suit or
proceeding in which he becomes involved as a party or otherwise by
virtue of his
being or having been a Trustee or officer and against amounts paid
or incurred
by him in the settlement thereof. However, Section 5.3 further
provides that no
indemnification shall be provided to a Trustee or officer:
(i) against any liability to the Registrant or the
shareholders of
the Registrant by reason of a final adjudication by the court or
other body
before which the proceeding was brought that he engaged in willful
misfeasance,
bad faith, gross negligence or reckless disregard of the duties
involved in the
conduct of his office;
(ii) with respect to any matter as to which he shall
have been
finally adjudicated not to have acted in good faith in the
reasonable belief
that his action was in the best interest of the Registrant; or
<PAGE>
(iii) in the event of a settlement involving a payment
by a Trustee
or officer or other disposition not involving a final adjudication
as provided
in paragraph (i) or (ii) above resulting in a payment by a Trustee
or officer
unless there has been either a determination that such Trustee or
officer did
not engage in willful misfeasance, bad faith, gross negligence or
reckless
disregard of the 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 a review of readily available facts (as
opposed to a
full trial-type inquiry) that he did not engage in such conduct:
(A) by vote of a majority of the Disinterested
Trustees (as defined
below) acting on the matter (provided that a majority of the
Disinterested
Trustees then in office act on the matter); or
(B) by written opinion of independent legal counsel.
The term "Disinterested Trustee" is defined as one who
is not an
interested person of the Registrant and against whom none of such
actions, suits
or other proceedings or another action, suit or other proceeding
on the same or
similar grounds is then or had been pending.
Expenses of preparation and presentation of a defense to
any claim,
action, suit, or proceeding of the character described in Section
5.3 of the
Registrant's Declaration of Trust shall be advanced by the
Registrant prior to
final disposition thereof upon receipt of an undertaking by or on
behalf of the
recipient to repay such amount if it is ultimately determined that
he is not
entitled to indemnification under Section 5.3, provided that
either:
(i) such undertaking is secured by a surety bond or
some other
appropriate security or the Registrant shall be insured against
losses arising
out of any such advances; or
(ii) a majority of the Disinterested Trustees acting on
the matter
(provided that a majority of the Disinterested Trustees then in
office act on
the matter) or an independent legal counsel in a written opinion,
shall
determine, based upon a review of readily available facts (as
opposed to a full
trial-type inquiry), that there is reason to believe that the
recipient
ultimately will be found entitled to indemnification.
Section 9 of the form of Shareholder Servicing Agent
Agreement between
the Registrant and MFS Service Center, Inc. ("MFSC"), which was
filed with the
Securities and Exchange Commission on October 20, 1994, specifies
that the
Registrant will indemnify MFSC against and hold MFSC harmless from
any and all
losses, claims, damages, liabilities or expenses (including
reasonable counsel
fees and expenses) resulting from any claim, demand, action or
suit not
resulting from MFSC's bad faith or negligence, and arising out of,
or in
connection with, MFSC's duties on behalf of the Registrant under
such Agreement.
In addition, Section 9 provides that the Registrant will indemnify
MFSC against
and hold MFSC harmless from any and all losses, claims, damages,
liabilities or
expenses (including reasonable counsel fees and expenses)
resulting from any
claim, demand, action or suit as a result of MFSC acting in
accordance with any
instructions reasonably believed by MFSC to have been executed or
orally
<PAGE>
communicated by any person duly authorized by the Registrant or
its principal
underwriter, or as a result of acting in accordance with written
or oral advice
reasonably believed by MFSC to have been given by counsel for the
Registrant, or
as a result of acting in accordance with any instrument or share
certificate
reasonably believed by MFSC to have been genuine and signed,
countersigned or
executed by any person or persons authorized to sign, countersign
or execute the
same (unless contributed to by MFSC's gross negligence or bad
faith).
The Trustees and officers of the Registrant and the
personnel of the
Registrant's investment adviser and distributor will be insured as
of the
effective date of this Registration Statement 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
Massachusetts Financial Services Company ("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
Mortgage Fund, MFS Government Limited Maturity Fund, MFS Series
Trust I (which
has three series: MFS Managed Sectors Fund, MFS Cash Reserve Fund
and MFS World
Asset Allocation 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 Municipal
Series Trust
(which has 19 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 Louisiana 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 Texas
Municipal Bond
Fund, MFS Virginia Municipal Bond Fund, MFS Washington Municipal
Bond Fund, MFS
West Virginia Municipal Bond Fund and MFS Municipal Income Fund)
and MFS Series
Trust IX (which has three series: MFS Bond Fund, MFS Limited
Maturity Fund and
MFS Municipal Limited Maturity Fund) (the "MFS Funds"). The
principal business
address of each of the aforementioned 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 two
series), MFS
Variable Insurance Trust
<PAGE>
("MVI") (which has twelve series) and MFS Union Standard Trust
("UST") (which
has two series). 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 aforementioned funds is
500 Boylston
Street, Boston, Massachusetts 02116.
Lastly, MFS serves as investment adviser to MFS/Sun Life
Series Trust
("MFS/SL"), Sun Growth Variable Annuity Fund, Inc. ("SGVAF"),
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 is One Sun Life Executive
Park, Wellesley
Hills, Massachusetts 02181.
MFS International Ltd. ("MIL"), a limited liability
company organized
under the laws of the Republic of Ireland and a subsidiary of MFS,
whose
principal business address is 41-45 St. Stephen's Green, Dublin 2,
Ireland,
serves as investment adviser to and distributor for MFS
International Funds
(which has four portfolios: MFS International Funds-U.S. Equity
Fund, MFS
International Funds-U.S. Emerging Growth Fund, MFS International
Funds-
International Governments Fund and MFS International Fund-Charter
Income 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 and MFS Meridian
U.S. Equity
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 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.).
<PAGE>
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, MFS Institutional Trust, MFS Variable Insurance Trust and
MFS Union
Standard Trust.
MFS Asset Management, Inc. ("AMI"), a wholly owned
subsidiary of MFS,
provides investment advice to substantial private clients.
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, John R. Gardner and John D. McNeil. Mr. Brodkin is the
Chairman, Mr.
Shames is the President, Mr. Scott is a Senior Executive Vice
President and
Secretary, James E. Russell is a Senior Vice President and the
Treasurer,
Stephen E. Cavan is a Senior Vice President, General Counsel and
an Assistant
Secretary, and Robert T. Burns is a Vice President and an
Assistant Secretary of
MFS.
MASSACHUSETTS INVESTORS TRUST
MASSACHUSETTS INVESTORS GROWTH STOCK FUND
MFS GROWTH OPPORTUNITIES FUND
MFS GOVERNMENT SECURITIES FUND
MFS GOVERNMENT MORTGAGE FUND
MFS SERIES TRUST I
MFS SERIES TRUST V
MFS GOVERNMENT LIMITED MATURITY FUND
MFS SERIES TRUST VI
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 Assistant Treasurer, James R. Bordewick, Jr., Vice
President and
Associate General Counsel of MFS, is 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
Assistant
Treasurer, and James R. Bordewick, Jr., is Assistant Secretary.
<PAGE>
MFS GOVERNMENT MARKETS INCOME TRUST
MFS INTERMEDIATE INCOME TRUST
A. Keith Brodkin is the Chairman and President,
Patricia A.
Zlotin, Executive Vice President of MFS and Leslie J. Nanberg,
Senior Vice
President of MFS, are Vice Presidents, Stephen E. Cavan is the
Secretary, W.
Thomas London is the Treasurer, James O. Yost is Assistant
Treasurer, and James
R. Bordewick, Jr., is the Assistant Secretary.
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 and Daniel E. McManus, Assistant Vice Presidents of MFS,
are Assistant
Vice Presidents, Stephen E. Cavan is the Secretary, W. Thomas
London is the
Treasurer, James O. Yost is Assistant Treasurer, and James R.
Bordewick, Jr., is
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 Assistant Treasurer and James R. Bordewick, Jr., is
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 Assistant Treasurer and James R. Bordewick, Jr., is
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
Assistant
Treasurer and James R. Bordewick, Jr., is 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
<PAGE>
Presidents of MFS, are Vice Presidents, Stephen E. Cavan is the
Secretary, W.
Thomas London is the Treasurer, James O. Yost is Assistant
Treasurer and James
R. Bordewick, Jr., is Assistant Secretary.
MFS VARIABLE INSURANCE 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 UNION STANDARD TRUST
A. Keith Brodkin is the Chairman and President,
Stephen E. Cavan
is the Secretary, W. Thomas London is the Treasurer, James O. Yost
and Karen C.
Jordan are Assistant Treasurers 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 Assistant
Treasurer and James
R. Bordewick, Jr., is Assistant Secretary.
MFS MULTIMARKET INCOME TRUST
MFS CHARTER INCOME TRUST
A. Keith Brodkin is the Chairman and President,
Patricia A.
Zlotin, 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 Assistant Treasurer and James R. Bordewick,
Jr., is
Assistant Secretary.
MFS SPECIAL VALUE TRUST
A. Keith Brodkin is the Chairman and President,
Jeffrey L.
Shames, Patricia A. Zlotin and Robert J. Manning are Vice
Presidents, Stephen E.
Cavan is the Secretary, W. Thomas London is the Treasurer, and
James O. Yost, is
Assistant Treasurer and James R. Bordewick, Jr., is Assistant
Secretary.
SGVAF
W. Thomas London is the Treasurer.
<PAGE>
MIL
A. Keith Brodkin is a Director and the President,
Arnold D.
Scott, Jeffrey L. Shames are Directors, Ziad Malek, Senior Vice
President of
MFS, is a Senior Vice President and Managing Director, Thomas J.
Cashman, Jr., a
Vice President of MFS, is a Senior Vice President, Stanley T. Kwok
is a Vice
President, Anthony F. Clarizio is an Assistant Vice President,
Stephen E. Cavan
is a Director, Senior Vice President and the Clerk, James R.
Bordewick, Jr. is a
Director, Senior Vice President and an Assistant Clerk, Robert T.
Burns is an
Assistant Clerk and James E. Russell is the Treasurer.
MIL FUNDS
A. Keith Brodkin is the Chairman, President and a
Director,
Arnold D. Scott and Jeffrey L. Shames 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,
Arnold D. Scott and Jeffrey L. Shames are Directors, Stephen E.
Cavan is the
Secretary, W. Thomas London is the Treasurer, James R. Bordewick,
Jr., is the
Assistant Secretary and Ziad Malek is a Senior Vice President.
MFD
A. Keith Brodkin is the Chairman, 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, and James E. Russell is the Treasurer.
CIAI
A. Keith Brodkin is the Chairman, Arnold D. Scott
and Jeffrey L.
Shames are Directors, Cynthia Orcott is President, Bruce C. Avery,
Executive
Vice President of MFS, is the Vice President, James E. Russell is
the Treasurer,
Stephen E. Cavan is the Secretary, and Robert T. Burns is the
Assistant
Secretary.
MFSC
A. Keith Brodkin is the Chairman, Arnold D. Scott
and Jeffrey L.
Shames are Directors, Joseph A. Recomendes, Senior Vice President
of MFS, is the
President, James E. Russell is the Treasurer, Stephen E. Cavan is
the Secretary,
and Robert T. Burns is the Assistant Secretary.
<PAGE>
AMI
A. Keith Brodkin is the Chairman and a Director,
Jeffrey L.
Shames, Leslie J. Nanberg and Arnold D. Scott are Directors,
Thomas J. Cashman
is the President and a Director, James E. Russell is the Treasurer
and Robert T.
Burns is the Secretary.
RSI
William W. Scott, Jr., Joseph A. Recomendes and
Bruce C. Avery
are Directors, Arnold D. Scott is the Chairman, Douglas C. Grip, a
Senior Vice
President of MFS, is the President, James E. Russell is the
Treasurer, Stephen
E. Cavan is the Secretary, Robert T. Burns is the Assistant
Secretary and Henry
A. Shea is an Executive Vice President.
In addition, the following persons, Directors or
officers of MFS,
have the affiliations indicated:
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
John R. Gardner President and a Director,
Sun Life
Assurance Company of
Canada, Sun Life
Centre, 150 King Street
West, Toronto,
Ontario, Canada (Mr.
Gardner 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)
ITEM 29. PRINCIPAL UNDERWRITERS
(a) Reference is hereby made to Item 28 above.
(b) Reference is hereby made to Item 28 above.
(c) Not Applicable.
<PAGE>
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
Boston, MA 02116
(investment adviser)
MFS Fund Distributors, Inc. 500
Boylston Street
(distributor)
Boston, MA 02116
Investors Bank & Trust 89
South Street
Company
Boston, MA 02111
(custodian)
MFS Service Center, Inc. 500
Boylston Street
(transfer agent)
Boston, MA 02116
The Registrant's corporate documents are kept by
the Registrant
at its offices. Portfolio brokerage orders, other purchase
orders, reasons for
brokerage allocation and lists of persons authorized to transact
business for
the Registrant are kept by Massachusetts Financial Services
Company at 500
Boylston Street, Boston, Massachusetts 02116. Shareholder account
records are
kept by MFS Service Center, Inc. at 500 Boylston Street, Boston,
Massachusetts
02116. Transaction journals, receipts for the acceptance and
delivery of
securities and cash, ledgers and trial balances are kept by
Investors Bank &
Trust Company, 89 South Street, Boston, MA 02111.
ITEM 31. MANAGEMENT SERVICES
Not applicable.
ITEM 32. UNDERTAKINGS
(a) Not applicable.
(b) Not applicable.
(c) 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.
(d) Registrant undertakes to furnish each person
to whom a
prospectus is delivered with a copy of the Registrant's latest
annual report to
shareholders upon request and without charge.
<PAGE>
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION OF EXHIBIT
PAGE NO.
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11 Consent of Deloitte & Touche.
27 Financial Data Schedule
