<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.
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- --------------------------------------------------------------------------------
<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 Report
<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
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New Zealand - 5.5%
Government of New Zealand, 8s, 1995 NZD 250 $ 157,945
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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
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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)%
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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
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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.
- ----------- ---------------------- --------
11 Consent of Deloitte & Touche.
27 Financial Data Schedule
<PAGE>
EXHIBIT 11
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation be reference in this Post-Effective Amendment
No. 3 to the Registration Statement (file Nos. 33-74668 and 811-8326) of MFS
Variable Insurance Trust of our report dated February 3, 1995 appearing in the
annual report to shareholders of MFS World Governments Series for the period
ended December 31, 1994, and to the inclusion in such Registration Statement of
our report dated February 3, 1995 relating to the statements of assets and
liabilities of 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 Strategic Fixed Income Series, MFS Bond Series, MFS
Limited Maturity Series and MFS Money Market Series as of December 31, 1994. We
also consent to the references to us under the headings "Condensed Financial
Information" in the Prospectus and "Independent Accountants and Financial
Statements" in the Statement of Additional Information, both of which are part
of such Registration Statement.
DELOITTE & TOUCHE
Boston, Massachusetts
April 20, 1995
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE FINANCIAL STATEMENTS OF MFS WORLD GOVERNMENTS SERIES AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 01
<NAME> MFS WORLD GOVERNMENTS SERIES
<S> <C>
<PERIOD-TYPE> 7-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 2,845,805
<INVESTMENTS-AT-VALUE> 2,818,036
<RECEIVABLES> 80,034
<ASSETS-OTHER> 5,312
<OTHER-ITEMS-ASSETS> 6,214
<TOTAL-ASSETS> 2,909,596
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 28,347
<TOTAL-LIABILITIES> 28,347
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,932,404
<SHARES-COMMON-STOCK> 293,306
<SHARES-COMMON-PRIOR> 850
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (10,012)
<ACCUMULATED-NET-GAINS> (27,079)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (14,064)
<NET-ASSETS> 2,881,249
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 57,735
<OTHER-INCOME> 0
<EXPENSES-NET> 10,139
<NET-INVESTMENT-INCOME> 47,596
<REALIZED-GAINS-CURRENT> (11,035)
<APPREC-INCREASE-CURRENT> (14,064)
<NET-CHANGE-FROM-OPS> 22,497
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (47,596)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> (26,056)
<NUMBER-OF-SHARES-SOLD> 325,790
<NUMBER-OF-SHARES-REDEEMED> (40,804)
<SHARES-REINVESTED> 7,470
<NET-CHANGE-IN-ASSETS> 2,872,749
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 7,604
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 46,612
<AVERAGE-NET-ASSETS> 1,794,182
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.17
<PER-SHARE-GAIN-APPREC> (0.09)
<PER-SHARE-DIVIDEND> (0.17)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> (0.09)
<PER-SHARE-NAV-END> 9.82
<EXPENSE-RATIO> 1.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
