<PAGE>
[Logo] M F S (R)
INVESTMENT MANAGEMENT SEMIANNUAL REPORT
We invented the mutual fund(R) JUNE 30, 2000
[Graphic Omitted]
A SERIES OF MFS(R) VARIABLE INSURANCE TRUST(SM)
MFS(R) MONEY
MARKET SERIES
<PAGE>
<TABLE>
MFS(R) MONEY MARKET SERIES
A SERIES OF MFS(R) VARIABLE INSURANCE TRUST(SM)
<S> <C>
TRUSTEES INVESTMENT ADVISER
Jeffrey L. Shames* - Chairman and Chief Executive Massachusetts Financial Services Company
Officer, MFS Investment Management(R) 500 Boylston Street
Boston, MA 02116-3741
Nelson J. Darling, Jr.+ - Private investor and
trustee DISTRIBUTOR
MFS Fund Distributors, Inc.
William R. Gutow+ - Private investor and real 500 Boylston Street
estate consultant; Vice Chairman, Capitol Boston, MA 02116-3741
Entertainment Management Company (video franchise)
INVESTOR SERVICE
CHAIRMAN AND PRESIDENT MFS Service Center, Inc.
Jeffrey L. Shames* P.O. Box 2281
Boston, MA 02107-9906
PORTFOLIO MANAGER
Jean O. Alessandro* For additional information,
contact your investment professional.
TREASURER
James O. Yost* CUSTODIAN
State Street Bank and Trust Company
ASSISTANT TREASURERS
Mark E. Bradley* WORLD WIDE WEB
Ellen Moynihan* www.mfs.com
SECRETARY
Stephen E. Cavan*
ASSISTANT SECRETARY
James R. Bordewick, Jr.*
* MFS Investment Management
+ Independent Trustee
</TABLE>
--------------------------------------------------------------------------------
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
--------------------------------------------------------------------------------
<PAGE>
LETTER FROM THE CHAIRMAN
Dear Shareholders,
I'm sure you've noticed that whenever financial markets suffer a large
decline, as they did this past spring, there's a flurry of information on "how
to deal with market volatility" -- both in the popular press and from those of
us in the investment business. Our own thinking on this is that, first, for
long-term investors volatility is not necessarily something to be feared;
occasional volatility may in fact be healthy for the markets.
Second, our experience has been that when markets begin to fall, it's often
too late to act. The best response may be to do nothing -- if you're properly
prepared with a long-term plan, created with the help of your investment
professional. To help you create or update that plan and take market
volatility in stride, here are some points you may want to consider the next
time you talk with your investment professional.
1. VOLATILITY CAN BE A GOOD THING
We would argue that the markets today are much healthier than they were before
the period of volatility this past spring, in the sense that stock prices have
returned to more reasonable levels and we have a stronger base for future
growth. Perhaps the worst of the market's wrath descended on companies with very
high stock prices, relative to their earnings, or with business concepts that
looked great in the euphoria of a booming market but in the end appeared to have
no fundamental backing. It has always been our view that one of the best
protections against market volatility is to invest in stocks and bonds of
fundamentally good companies selling at reasonable prices. When discussing
potential investments with your investment professional, you may want to ask how
they fared in previous periods of volatility, as well as in the good times.
2. INVEST FOR THE LONG TERM
You've heard that before, but we think it's still probably the most important
concept in investing. Time is one of an investor's greatest allies. Over
nearly all long-term periods -- 5, 10, 20 years, and more -- stock and bond
returns, as represented by most common indices, have been positive and have
considerably outpaced inflation. Investing is the best way we know of to make
your money work for you while you're doing something else.
Where investors can get into trouble is by confusing investing with trading.
In our view, traders who buy securities with the intention of selling them at
a profit in a matter of hours, days, or weeks are gambling. We believe this
seldom turns out to be a good strategy for increasing your wealth.
3. INVEST REGULARLY
Waiting for the "right time" to invest is almost always a poor strategy,
because only in retrospect do we know when that right time really was. Periods
of volatility are probably the worst times to make an investment decision.
Faced with turmoil in the markets, many investors have opted to simply stay on
the sidelines.
On the other hand, we think one of the best techniques for investing is
through automatic monthly or quarterly deductions from a checking or savings
account. This approach has at least three major benefits. First, you can
formulate a long-term plan -- how much to invest, how often, and into which
portfolios -- in a calm, rational manner, working with your investment
professional. Second, with this approach you invest regularly without
agonizing over the decision each time you buy shares. And, third, if you
invest equal amounts of money at regular intervals, you'll be taking advantage
of a strategy called dollar-cost averaging: by investing a fixed amount while
the share cost fluctuates, you end up with an average share cost to you that
is lower than the average share price over your investment period.(1) If all
this sounds familiar, it's probably because you're already taking advantage of
dollar-cost averaging by investing regularly for retirement through a 401(k)
or similar account at work.
4. DIVERSIFY
One of the dangers of not having an investment plan is that you may be tempted
to simply chase performance, by moving money into whatever asset class appears
to be outperforming at the moment -- small, mid, or large cap; growth or value;
United States or international; stocks or bonds. The problem with this approach
is that by the time a particular area is generally recognized as "hot," you may
have already missed some of the best performance.
International investing offers a case in point. In the 1980s, international
investments, as represented by the Morgan Stanley Capital International (MSCI)
Europe, Australia, Far East (EAFE) Index, outperformed U.S. investments, as
represented by the Standard & Poor's 500 Composite Index (S&P 500), in 7 out
of 10 years.(2) For the decade, the MSCI EAFE's average annual performance was
23%, compared to 18% for the S&P 500. Going into the 1990s, then, an investor
looking only at recent performance might have favored international
investments over U.S. investments.
But the 1990s turned out to be virtually a mirror image of the '80s. Domestic
investments outperformed international investments in 7 out of 10 years, with
the S&P 500 returning an average of 18% annually for the decade and the MSCI
EAFE returning a 7% annual average. Looking ahead, however, we are optimistic
about international markets because we feel that many of the same forces that
propelled the current U.S. economic boom -- deregulation, restructuring, and
increased adoption of technology -- have taken root overseas.
The lesson to be learned is that nobody really knows what asset class will be
the next to outperform or how long that performance will be sustained. We
would suggest that one way to potentially profit from swings in the market --
to potentially be invested in various asset classes before the market shifts
in their favor -- is with a diversified portfolio covering several asset
classes.
If you haven't already done so, we encourage you to discuss these thoughts
with your investment professional and factor them into your long-range
financial planning. Hopefully, the next time the markets appear to be going
wild, you'll feel confident enough in your plan to view periods of volatility
as a time of potential opportunity -- or perhaps just a time to sit back and
do nothing.
As always, we appreciate your confidence and welcome any questions or comments
you may have.
Respectfully,
/s/ Jeffrey L. Shames
Jeffrey L. Shames
Chairman and Chief Executive Officer
MFS Investment Management(R)
July 17, 2000
(1) The use of a systematic investing program does not guarantee a profit or
protect against a loss in declining markets. You should consider your
financial ability to continue to invest through periods of low prices.
(2) Source: Lipper Inc. Decade performance: '80s -- 12/31/79-12/31/89,
'90s -- 12/31/89-12/31/99. The MSCI EAFE Index is an unmanaged,
market-capitalization-weighted total return index that measures the
performance of the same developed-country global stock markets included in
the MSCI World Index but excludes the United States, Canada, and the South
African mining component. The S&P 500 is a popular, unmanaged index of
common stock total return performance. It is not possible to invest directly
in an index. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
Investments in variable products will fluctuate and may be worth more or less
upon redemption. Please see your investment professional for more information.
The opinions expressed in this letter are those of Jeffrey L. Shames, and no
forecasts can be guaranteed.
<PAGE>
MANAGEMENT REVIEW AND OUTLOOK
Dear Shareholders,
The series seeks as high a level of current income as is considered consistent
with the preservation of capital and liquidity by investing in short-term
money market securities issued or guaranteed by the U.S. Treasury, its
agencies, or instrumentalities of the U.S. government, as well as in the
highest-quality corporate and bank issues, in order to minimize credit risk.
Despite some signs of moderating economic growth in the second quarter of
2000, the U.S. economy continued to grow steadily and unemployment fell to 30-
year lows. Historically, these conditions have caused inflation to accelerate;
therefore, the Federal Reserve Board (the Fed) moved to contain the
inflationary pressures that usually accompany this backdrop.
While the Fed refrained from raising interest rates during its last meeting,
we don't believe the possibility of future interest rates hikes can be ruled
out. As a result, we've structured the portfolio with a relatively short
maturity and targeted 36 days for the average maturity of the series'
holdings.
On June 30, 2000, approximately 95% of the portfolio was invested in high-
quality commercial paper, with the balance invested in U.S. government or
government-guaranteed issues.
Investments in the series are not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the series
seeks to preserve the value at $1.00 per share, it is possible to lose money
by investing in the series.
Respectfully,
/s/ Jean O. Alessandro
Jean O. Alessandro
Portfolio Manager
The opinions expressed in this report are those of the portfolio manager and
are current only through the end of the period of the report as stated on the
cover. The manager's views are subject to change at any time based on market
and other conditions, and no forecasts can be guaranteed.
The portfolio is actively managed, and current holdings may be different.
<PAGE>
PORTFOLIO MANAGER'S PROFILE
Jean O. Alessandro is Assistant Vice President of MFS Investment Management(R)
and portfolio manager of MFS(R) Cash Reserve Fund, MFS(R) Government Money
Market Fund, MFS(R) Money Market Fund, the Money Market Series offered through
MFS(R)/Sun Life annuity products, and MFS(R) Money Market Series (part of
MFS(R) Variable Insurance Trust(SM)).
Ms. Alessandro joined MFS in 1986 as a fixed-income trading assistant. From
1986 to 1990, she was a money market trader and, from 1990 to 1993, a senior
money market specialist. She was named Investment Officer in 1993, portfolio
manager in 1998, and Assistant Vice President in 1999. Ms. Alessandro earned a
bachelor's degree from the University of Connecticut.
All portfolio managers at MFS Investment Management(R) are supported by an
investment staff of over 100 professionals utilizing MFS Original Research(R),
a global, issuer-oriented, bottom-up process of selecting securities.
SERIES FACTS
Objective: Seeks as high a level of current income as is considered consistent
with the preservation of capital and liquidity
Commencement of investment operations: January 3, 1995
Size: $10.6 million net assets as of June 30, 2000
This report is prepared for the general information of shareholders. It is
authorized for distribution to prospective investors only when preceded or
accompanied by a current prospectus. A prospectus containing more information,
including all charges and expenses, for any MFS product is available from your
investment professional, or by calling MFS at 1-800-225-2606. Please read it
carefully before investing or sending money.
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS (Unaudited) - June 30, 2000
<CAPTION>
Commercial Paper - 94.8%
-------------------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT
ISSUER (000 OMITTED) VALUE
-------------------------------------------------------------------------------------------------------
<S> <C> <C>
Alpine Securitization Corp., due 8/11/00 $ 300 $ 297,752
Anheuser Busch, Inc., due 7/03/00 400 399,849
AT&T Corp., due 7/10/00 400 399,344
Bayerische Vereinsbank, due 9/13/00 400 394,582
Bellsouth Telecomm, Inc., due 7/26/00 475 472,836
Campbell Soup Co., due 9/07/00 400 395,059
Caterpillar Financial Services N V, due 9/28/00 400 393,503
Credit Suisse, due 9/01/00 400 395,391
Duke Power Co., due 7/18/00 400 398,772
Emerson Electric Co., due 8/21/00 400 396,300
Ford Motor Credit Corp., due 8/15/00 400 396,740
Gannett, Inc., due 7/13/00 400 399,135
Goldman Sachs Group LP, due 8/08/00 400 397,230
Halliburton Corp., due 9/18/00 400 394,242
ING America Insurance, due 7/11/00 100 99,817
Kellogg Co., due 7/11/00 300 299,458
Merrill Lynch & Co., Inc., due 8/10/00 400 397,093
Metropolitan Life Funding, Inc., due 7/28/00 145 144,277
Morgan Stanley Dean Witter, due 7/07/00 - 9/14/00 400 396,401
Motorola, Inc., due 8/25/00 400 396,009
Old Line Funding Corp., due 7/11/00 400 399,268
Pitney Bowes Credit Corp., due 7/05/00 400 399,706
Salomon Smith Barney Holdings, Inc., due 8/03/00 400 397,562
Sara Lee Corp., due 7/03/00 400 399,849
Wal-Mart Stores, Inc., due 7/05/00 400 399,711
American Express Credit Corp., due 8/17/00 400 396,590
General Electric Capital Corp., due 8/21/00 400 396,294
-------------------------------------------------------------------------------------------------------
Total Commercial Paper, at Amortized Cost $10,052,770
-------------------------------------------------------------------------------------------------------
U.S. Government and Agency Obligations - 5.1%
-------------------------------------------------------------------------------------------------------
Federal Home Loan Bank, due 7/03/00 $ 140 $ 139,949
Federal National Mortgage Assn., due 7/12/00 400 399,216
-------------------------------------------------------------------------------------------------------
Total U.S. Government and Agency Obligations, at Amortized Cost $ 539,165
-------------------------------------------------------------------------------------------------------
Total Investments, at Amortized Cost $10,591,935
Other Assets, Less Liabilities - 0.1% 7,261
-------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $10,599,196
-------------------------------------------------------------------------------------------------------
See notes to financial statements.
</TABLE>
<PAGE>
FINANCIAL STATEMENTS
Statement of Assets and Liabilities (Unaudited)
-------------------------------------------------------------------------------
JUNE 30, 2000
-------------------------------------------------------------------------------
Assets:
Investments, at amortized cost and value $10,591,935
Cash 6,019
Receivable for series shares sold 1,728
Other assets 1,765
-----------
Total assets $10,601,447
-----------
Liabilities:
Payable for series shares reacquired $ 980
Payable to affiliates -
Management fee 145
Reimbursement fee 29
Accrued expenses and other liabilities 1,097
-----------
Total liabilities $ 2,251
-----------
Net assets (represented by paid-in capital) $10,599,196
===========
Shares of beneficial interest outstanding 10,599,196
==========
Net asset value per share
(net assets / shares of beneficial interest outstanding) $1.00
=====
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS - continued
Statement of Operations (Unaudited)
-------------------------------------------------------------------------------
SIX MONTHS ENDED JUNE 30, 2000
-------------------------------------------------------------------------------
Net investment income:
Interest income $321,464
--------
Expenses -
Management fee $ 26,453
Trustees' compensation 1,090
Shareholder servicing agent fee 1,852
Administrative fee 854
Custodian fee 4,897
Printing 3,181
Auditing fees 12,050
Legal fees 620
Miscellaneous 563
--------
Total expenses $ 51,560
Fees paid indirectly (1,032)
Reduction of expenses by investment adviser (18,784)
--------
Net expenses $ 31,744
--------
Net investment income $289,720
========
See notes to financial statements.
<PAGE>
<TABLE>
FINANCIAL STATEMENTS - continued
<CAPTION>
Statement of Changes in Net Assets
------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2000 DECEMBER 31, 1999
(UNAUDITED)
------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income, declared as distributions to
shareholders $ 289,720 $ 562,722
----------- ------------
Series share (principal) transactions at net asset value of $1.00 per share -
Net proceeds from sale of shares $ 4,614,485 $ 11,892,729
Net asset value of shares issued to shareholders in
reinvestment of distributions 290,095 562,473
Cost of shares reacquired (5,731,795) (12,597,423)
----------- ------------
Total decrease in net assets $ (827,215) $ (142,221)
Net assets:
At beginning of period 11,426,411 11,568,632
----------- ------------
At end of period $10,599,196 $ 11,426,411
=========== ============
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS - continued
<CAPTION>
Financial Highlights
------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, PERIOD ENDED
SIX MONTHS ENDED ----------------------------------------------------------- DECEMBER 31,
JUNE 30, 2000 1999 1998 1997 1996 1995*
(UNAUDITED)
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------ ------
Income from investment operations# -
Net investment income(S) $ 0.03 $ 0.05 $ 0.05 $ 0.05 $ 0.04 $ 0.04
------ ------ ------ ------ ------ ------
Less distributions declared to shareholders
from net investment income $(0.03) $(0.05) $(0.05) $(0.05) $(0.04) $(0.04)
------ ------ ------ ------ ------ ------
Net asset value - end of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ====== ======
Total return 5.56%+ 4.59% 4.91% 4.91% 4.55% 4.37%++
Ratios (to average net assets)/Supplemental data(S):
Expenses## 0.62%+ 0.61% 0.62% 0.61% 0.63% 0.63%+
Net investment income 5.49%+ 4.52% 4.76% 4.91% 4.53% 4.54%+
Net assets at end of period
(000 omitted) $10,599 $11,426 $11,569 $8,755 $633 $180
(S) Subject to reimbursement by the series, the investment adviser voluntarily agreed under a temporary expense reimbursement
agreement to pay all of the series' operating expenses, exclusive of management fees. In consideration, the series pays
the investment adviser a reimbursement fee not greater than 0.10% of average daily net assets. To the extent actual
expenses were over/under this limitation, the net investment income (loss) per share and ratios would have been:
Net investment income (loss) 0.03 $ 0.04 $ 0.05 $ 0.04 $(0.21) $(0.14)
Ratios (to average net assets):
Expenses## 0.98%+ 0.88% 0.96% 1.36% 27.74% 21.54%+
Net investment income (loss) 5.13%+ 4.25% 4.42% 4.16% (22.58)% (16.37)%+
* For the period from the commencement of the series' investment operations, January 3, 1995, through December 31, 1995.
+ Annualized.
++ Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset arrangements.
See notes to financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
(1) Business and Organization
MFS Money Market Series (the series) is a diversified series of MFS Variable
Insurance Trust (the trust). The trust is organized as a Massachusetts
business trust and is registered under the Investment Company Act of 1940, as
amended, as an open-end management investment company.
The shareholders of each series of the trust are separate accounts of
insurance companies which offer variable annuity and /or life insurance
products. As of June 30, 2000, there were 8 shareholders in the series.
(2) Significant Accounting Policies
General - The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Investment Valuations - Money market instruments are valued at amortized cost,
which the Trustees have determined in good faith approximates market value.
The trust's use of amortized cost is subject to the trust's compliance with
certain conditions as specified under Rule 2a-7 of the Investment Company Act
of 1940.
Investment Transactions and Income - Investment transactions are recorded on
the trade date. Interest income is recorded on the accrual basis. All discount
is accreted for financial statement and tax reporting purposes as required by
federal income tax regulations.
Fees Paid Indirectly - The series' custody fee is reduced according to an
arrangement that measures the value of cash deposited with the custodian by
the series. This amount is shown as a reduction of total expenses on the
Statement of Operations.
Tax Matters and Distributions - The series' policy is to comply with the
provisions of the Internal Revenue Code (the Code) applicable to regulated
investment companies and to distribute to shareholders all of its taxable
income, including any net realized gain on investments. Accordingly, no
provision for federal income or excise tax is provided.
Distributions to shareholders are recorded on the ex-dividend date. The series
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 distributions from paid-in
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 net realized gains.
At December 31, 1999, the series, for federal income tax purposes, had a
capital loss carryforward of $53, which may be applied against any net taxable
realized gains of each succeeding year until the earlier of its utilization or
expiration on December 31, 2005, ($24), December 31, 2006, ($21), and December
31, 2007, ($8).
(3) Transactions with Affiliates
Investment Adviser - The series 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 is computed daily and paid monthly at an annual rate of 0.50%
of the series' average daily net assets. The series has a temporary expense
reimbursement agreement whereby MFS has voluntarily agreed to pay all of the
series' operating expenses, exclusive of management fees. The series in turn
will pay MFS an expense reimbursement fee not greater than 0.10% of average
daily net assets. To the extent that the expense reimbursement fee exceeds the
series' actual expenses, the excess will be applied to amounts paid by MFS in
prior years. At June 30, 2000, the aggregate unreimbursed expenses amounted to
$194,889.
The series pays no compensation directly to its Trustees who are officers of
the investment adviser, or to officers of the series, all of whom receive
remuneration for their services to the series from MFS. Certain officers and
Trustees of the series are officers or directors of MFS and MFS Service
Center, Inc. (MFSC).
Administrator - The series has an administrative services agreement with MFS
to provide the series with certain financial, legal, shareholder servicing,
compliance, and other administrative services. As a partial reimbursement for
the cost of providing these services, the series incurs an administrative fee
at the following annual percentages of the series' average daily net assets:
First $2 billion 0.0175%
Next $2.5 billion 0.0130%
Next $2.5 billion 0.0005%
In excess of $7 billion 0.0000%
Shareholder Servicing Agent - MFSC, a wholly owned subsidiary of MFS, earns a
fee for its services as shareholder servicing agent. The fee is calculated as
a percentage of the series' average daily net assets at an annual rate of
0.035%.
(4) Portfolio Securities
Purchases and sales of money market investments, exclusive of securities
subject to repurchase agreements, aggregated $207,251,926 and $208,363,000,
respectively.
(5) Shares of Beneficial Interest
The series' Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest (without par
value, $1.00 per share).
(6) Line of Credit
The series and other affiliated funds participate in a $1.1 billion unsecured
line of credit provided by a syndication of banks under a line of credit
agreement. Borrowings may be made for temporary financing needs. Interest is
charged to each fund, based on its borrowings, at a rate equal to the bank's
base rate. In addition, a commitment fee, based on the average daily unused
portion of the line of credit, is allocated among the participating funds at
the end of each quarter. The commitment fee allocated to the series for the
six months ended June 30, 2000, was $35. The series had no borrowings during
the period.
<PAGE>
(c)2000 MFS Investment Management(R).
MFS(R) investment products are offered through MFS Fund Distributors, Inc.,
500 Boylston Street, Boston, MA 02116.
VMM-3 8/00 595
