<PAGE>
[Logo] M F S (R)
INVESTMENT MANAGEMENT ANNUAL REPORT
We invented the mutual fund(R) DECEMBER 31, 1999
[graphic omitted]
A SERIES OF MFS(R) VARIABLE INSURANCE TRUST(SM)
MFS(R) CAPITAL
OPPORTUNITIES SERIES
(FORMERLY MFS(R) VALUE SERIES)
<PAGE>
<TABLE>
MFS(R) CAPITAL OPPORTUNITIES SERIES
A SERIES OF MFS(R) VARIABLE INSURANCE TRUST(SM)
<S> <C>
TRUSTEES INVESTMENT ADVISER
Jeffrey L. Shames* Massachusetts Financial Services Company
Chairman and Chief Executive Officer, 500 Boylston Street
MFS Investment Management(R) Boston, MA 02116-3741
Nelson J. Darling, Jr.+ DISTRIBUTOR
Private investor and trustee MFS Fund Distributors, Inc.
500 Boylston Street
William R. Gutow+ Boston, MA 02116-3741
Private investor and real estate consultant;
Vice Chairman, Capitol Entertainment SHAREHOLDER SERVICE CENTER
Management Company (video franchise) MFS Service Center, Inc.
P.O. Box 2281
CHAIRMAN AND PRESIDENT Boston, MA 02107-9906
Jeffrey L. Shames*
For additional information,
PORTFOLIO MANAGER contact your financial consultant.
Maura A. Shaughnessy*
CUSTODIAN
TREASURER State Street Bank and Trust Company
W. Thomas London*
AUDITORS
ASSISTANT TREASURERS Deloitte & Touche LLP
Mark E. Bradley*
Ellen Moynihan* WORLD WIDE WEB
James O. Yost* www.mfs.com
SECRETARY
Stephen E. Cavan*
ASSISTANT SECRETARY
James R. Bordewick, Jr.*
* MFS Investment Management
+ Independent Trustee
- ---------------------------------------------------------------------------------------
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
- ---------------------------------------------------------------------------------------
</TABLE>
<PAGE>
LETTER FROM THE CHAIRMAN
Dear Shareholders,
One could easily argue that the Internet represents the greatest technological
development most of us may see in our lifetimes. There is no disputing that
this new communication medium is changing forever the way we work, play, and
shop. One might also argue that investing in this new technology represents
the investment opportunity of a lifetime. The question for any investor is
whether and how to take advantage of it.
The popular press, it seems, would have us believe that by surfing the Web, we
can learn everything we need to know about investing. Indeed, there is no
doubt that Internet-delivered information and brokerage services enable
individual investors to be well-informed and to trade at bargain prices. But
we believe the facts argue that, for most of us, professionally managed
investment portfolios purchased through a financial consultant will continue
to be one of the best products for long-term investing in this new millennium.
Why do we believe managed portfolios plus professional advice will continue to
define the best course of action for many investors? Let's look at some of the
characteristics of a successful long-term investment approach:
o HAVING A PLAN AND STICKING TO IT: Our experience is that successful investors
-- those whose lives are enriched by the fruits of their investing -- share
two characteristics. They have a plan for reaching their monetary goals, and
they stick with that plan through up markets and down. And for many investors,
working with a financial consultant may be the best way to develop a plan.
Although the Internet abounds with calculators for developing all sorts of
investment plans, none has your consultant's high level of experience and an
understanding of your unique situation. And no calculator can counsel you
during a down market, when you may be tempted to abandon your goals and your
plan.
o DIVERSIFICATION: Few individual investors can afford to own a large number of
holdings, so poor performance of one company can potentially drag down their
entire personal portfolio. This is especially true when investing in volatile
new areas such as the Internet. On the other hand, a diversified,
professionally managed investment portfolio that owns dozens or even hundreds
of holdings is better positioned to survive a disappointment in one or several
investments.
o GOOD IN A DOWN MARKET: As we enter the tenth year of the greatest bull market
in history, it's easy to forget that market downturns are an almost inevitable
part of investing. Few investment portfolios, of course, are going to be up
when the overall market is down. But we believe diversified, professionally
managed investment portfolios may be less likely to suffer the extreme
downturns experienced by a large number of individual holdings when the market
heads south.
o MFS ORIGINAL RESEARCH(R): The Internet is one of the greatest research tools
ever invented, but it's still not the same as being eyeball to eyeball with
the management of a company and discussing their plans for their firm's
future.
o GOOD PERFORMANCE AT AN ACCEPTABLE LEVEL OF RISK: Investing in individual
stocks or bonds does indeed offer the potential of exhilarating performance
that few managed portfolios even attempt. The downside is that the most
exciting investments are also likely to be the ones that give you sleepless
nights. The diversification and professional management of investment
portfolios help make them inherently less risky than individual stock picking,
and managed portfolios are available in a wide range of risk profiles.
We believe that now, more than ever, managed investment portfolios sold by an
investment professional may offer many investors the best way to participate
in whatever investment opportunities the new millennium may bring. The
combination of professional portfolio management and professional advice
recognizes the key reason that investors give us their money: because they
don't want to make a hobby or a second profession out of investing; they
simply want their money to work for them so they have a better likelihood of
realizing their dreams.
As always, we appreciate your confidence in MFS 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)
January 15, 2000
Investments in variable products will fluctuate and may be worth more or less
upon redemption. Please see your financial consultant for more information.
The opinions expressed in this letter are those of Jeffrey L. Shames, and no
forecasts can be guaranteed.
MANAGEMENT REVIEW AND OUTLOOK
Dear Shareholders,
For the 12 months ended December 31, 1999, the Series provided a total return
of 47.42% (including the reinvestment of any distributions). This compares to
a 41.65% return for the average capital appreciation portfolio tracked by
Lipper Analytical Services, Inc., an independent firm that reports performance
and to a 21.04% return for the Standard & Poor's 500 Composite Index, a
popular, unmanaged index of common stock total return performance.
The Series' wireless communications stocks provided exceptionally strong
performance. Included in this group were some of our largest holdings, such as
NEXTEL in the United States, Mannesmann in Germany, Bouygues in France, and
NTT Mobile Communications Network in Japan. Wireless stocks moved to the
forefront of the market due to then higher-than-expected subscriber growth. In
addition, many of these wireless communications service providers either
started to offer or were on the cusp of offering data transmission. The
prospect of customers accessing e-mail or the Internet over wireless handsets
helped make these companies even more attractive. Telecommunications and cable
equipment providers also fared well due to continued strong infrastructure
spending. In this area, holdings such as General Instruments, Motorola, and
Corning were excellent performers.
Over the period, I also liked technology, especially semiconductor and
software stocks. On the semiconductor side, LSI Logic and Analog Devices were
two companies that were boosted by an industry rebound that followed signs of
an economic recovery in Asia. In addition, wireless communications equipment
manufacturers had a steady appetite for the computer chips that enable their
products. Software stocks rebounded from difficulties they faced earlier in
1999 brought on by concerns that revenues would stagnate as companies cut back
on software spending in preparation for potential Year 2000 (Y2K) computer
problems. However, many companies proved resilient as Y2K approached, meeting
or beating earnings expectations. As a result, investor sentiment toward them
became more positive because of a better outlook for next year. I'd also like
to mention that I've recently added to the portfolio's investment in
Microsoft. While its share price was beaten down in anticipation of the
company's antitrust lawsuit, Microsoft has a solid new product line on deck
for 2000, as well as a long history of strong performance. As a result, I
believe it won't be long before the company resumes its preeminent position.
It is important to note that even though stocks of Internet companies have
skyrocketed due to incredible market momentum, I don't make my investment
decisions by following trends. Stocks are chosen for the Series based on the
value I believe they offer and on thorough fundamental research into their
prospects. Although Internet stock prices have climbed, many of these
companies have never posted any earnings. As a result, it's nearly impossible
to figure out how to appropriately value the stocks based on fundamental
analysis or traditional research techniques. In addition, I've found that
"dot.com" companies, particularly those that cater exclusively to consumers,
have very questionable business models. If those businesses can't be
sustained, then I believe the stocks should plummet just as quickly as they
have risen.
This doesn't mean I haven't sought investment opportunities that are a play on
the Internet theme. To the contrary, I've found many opportunities in
companies that are involved in the explosive growth of this new tool, but with
what I feel are much sounder business fundamentals and quantifiable
valuations. For example, the Series owns stocks of companies that provide the
networking infrastructure for the Internet, such as Cisco Systems, as well as
radio broadcasting firms such as Infinity Broadcasting that have benefited
from all the "dot.com" advertising.
For most of this year, I've seen a two-tiered, momentum-based stock market.
Technology and wireless communications stocks enjoyed substantial gains, but
stocks in many other sectors languished at low valuations despite what I
viewed as positive fundamentals. With this backdrop, I've continued to pursue
my basic investment approach -- looking for companies that I feel offer solid
earnings growth whose stocks are selling at reasonable prices relative to
alternatives within their sectors. While some of our investments have
struggled a bit in this market environment, I remain comfortable with the
long-term fundamentals they offer.
Oil services was one area that was attractive to me. Rising oil prices
bolstered the performance of domestic oil services concerns such as BJ
Services, Schlumberger, and Cooper Cameron. I believe that even if I see the
price of oil weaken from time to time, the prospects for this group should
remain positive over the next couple of years. I also turned some of my focus
to supermarkets, including Kroger, a historically strong player in an industry
experiencing considerable consolidation activity. Although supermarkets have
generally suffered from fears related to Wal-Mart's plan to offer groceries
and from hype regarding Internet-based grocery sales, I feel these fears are
generally overblown and will subside. Another industry that caught my eye was
insurance, including our investment in Lincoln National. For most of the
period, insurance stocks were hurt by rising interest rates and regulatory
concerns. That changed in the fourth quarter of 1999 when the U.S. Congress
passed legislation eliminating many of the barriers that had existed among
banks, insurance companies, brokerages, and other financial services
companies. Insurance companies like Lincoln National rebounded because the
market recognized their attractiveness as acquisition candidates for banks or
other firms.
A few stocks did disappoint during the past year. The first was Rite Aid, the
drug store chain. Not only did this company overextend itself by trying to
make too many acquisitions in too short a time period, but it's also suspected
of committing accounting fraud. As a result, this holding was eliminated from
the Series. Another example is Office Depot, in the retail industry. Its stock
faltered because investors became concerned that the office supplies industry
has become saturated with many competitors. However, I feel the prospects for
the company remain solid, so the portfolio still owns a small stake in it.
For an investor like me who focuses on company fundamentals, the market has
been hard to understand. It has been driven by momentum and speculation
instead of the historically proven method of analyzing a company's business
prospects and how they relate to the valuation of its stock. The main question
at this point is, how sustainable is the current market environment? There is
no easy answer, so I will continue to pursue my approach of looking for
companies offering positive earnings growth whose stocks are selling at what I
believe are reasonable valuations.
Respectfully,
/s/ Maura A. Shaughnessy
Maura A. Shaughnessy
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.
PORTFOLIO MANAGER'S PROFILE
Maura A. Shaughnessy is Senior Vice President of MFS Investment Management(R)
and portfolio manager of MFS(R) Capital Opportunities Fund, MFS(R) Utilities
Fund, MFS(R) Utilities Series and MFS(R) Capital Opportunities Series (both
part of MFS(R) Variable Insurance Trust(SM)), and the Utilities Series and
Capital Opportunities Series offered through MFS(R)/Sun Life annuity products.
Ms. Shaughnessy joined MFS in 1991 as a research analyst and became Vice
President and portfolio manager in 1992 and Senior Vice President in 1998. A
graduate of Colby College and the Amos Tuck School of Business Administration
of Dartmouth College, she is a Chartered Financial Analyst.
All equity portfolio managers began their careers at MFS Investment
Management(R) as research analysts. Our portfolio managers are supported by an
investment staff of over 100 professionals utilizing MFS Original Research(R),
a global, company-oriented, bottom-up process of selecting securities.
SERIES FACTS
Objective: Seeks capital appreciation.
Commencement of investment operations: August 14, 1996
Size: $63.2 million net assets as of December 31, 1999
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 other MFS product is available
from your financial consultant, or by calling MFS at 1-800-225-2606. Please
read it carefully before investing or sending money.
<PAGE>
PERFORMANCE SUMMARY
The information below illustrates the historical performance of the Series in
comparison to various market indicators. Benchmark comparisons are unmanaged
and do not reflect any fees or expenses. It is not possible to invest directly
in an index. (See Notes to Performance Summary.)
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(For the period from the commencement of the Series' investment operations,
August 14, 1996, through December 31, 1999. Index information is from
August 1, 1996.)
MFS Capital S&P 500
Opportunities Composite
Series Index
- --------------------------------------------------------------------------------
8/96 $10,000 $10,000
12/96 10,878 11,685
12/97 13,757 15,583
12/98 17,444 20,036
12/99 25,717 24,253
<TABLE>
AVERAGE ANNUAL AND CUMULATIVE TOTAL RATES OF RETURN THROUGH DECEMBER 31, 1999
<CAPTION>
1 Year 3 Years Life*
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cumulative Total Return +47.42% +136.41% +157.17%
- ---------------------------------------------------------------------------------------------------------
Average Annual Total Return +47.42% + 33.22% + 32.23%
- ---------------------------------------------------------------------------------------------------------
COMPARATIVE INDICES(+)
1 Year 3 Years Life*
- ---------------------------------------------------------------------------------------------------------
Average capital appreciation portfolio+ +41.65% + 24.37% + 24.03%
- ---------------------------------------------------------------------------------------------------------
Standard & Poor's 500 Composite Index# +21.04% + 27.56% + 29.60%
- ---------------------------------------------------------------------------------------------------------
* For the period from the commencement of the Series' investment operations, August 14, 1996, through
December 31, 1999. Index information is from August 1, 1996.
(+) Average annual rates of return.
+ Source: Lipper Analytical Services, Inc.
# Source: Standard & Poor's Micropal, Inc.
</TABLE>
NOTES TO PERFORMANCE SUMMARY
All results are historical and assume the reinvestment of dividends and
capital gains. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
MORE RECENT RETURNS MAY BE MORE OR LESS THAN THOSE SHOWN. PAST PERFORMANCE IS
NO GUARANTEE OF FUTURE RESULTS. Performance results reflect any applicable
expense subsidies and waivers, without which the results would have been less
favorable. Subsidies and waivers may be rescinded at any time. See the
prospectus for details.
Returns shown do not reflect the deduction of the mortality and expense risk
charges and administration fees. Please refer to the annuity product's annual
report for performance that reflects the deduction of the fees and charges
imposed by insurance company separate accounts.
<PAGE>
PORTFOLIO OF INVESTMENTS - December 31, 1999
<TABLE>
<CAPTION>
Stocks - 95.1%
- -----------------------------------------------------------------------------------------------------
ISSUER SHARES VALUE
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. Stocks - 68.9%
Advertising - 0.5%
Young & Rubicam, Inc. 4,800 $ 339,600
- -----------------------------------------------------------------------------------------------------
Aerospace - 0.5%
Honeywell International, Inc. 4,875 $ 281,227
- -----------------------------------------------------------------------------------------------------
Banks and Credit Companies - 0.9%
Chase Manhattan Corp. 3,800 $ 295,212
Providian Financial Corp. 2,800 254,975
------------
$ 550,187
- -----------------------------------------------------------------------------------------------------
Business Machines - 0.7%
Seagate Technology, Inc.* 1,300 $ 60,531
Texas Instruments, Inc. 3,800 368,125
------------
$ 428,656
- -----------------------------------------------------------------------------------------------------
Business Services - 0.6%
Adelphia Business Solutions* 8,200 $ 393,600
- -----------------------------------------------------------------------------------------------------
Cellular Telephones - 1.3%
Sprint Corp. (PCS Group)* 7,750 $ 794,375
- -----------------------------------------------------------------------------------------------------
Computer Hardware - Systems - 0.6%
Dell Computer Corp.* 7,900 $ 402,900
- -----------------------------------------------------------------------------------------------------
Computer Software - Personal Computers - 3.1%
Microsoft Corp.* 17,000 $ 1,984,749
- -----------------------------------------------------------------------------------------------------
Computer Software - Services - 0.5%
EMC Corp.* 3,000 $ 327,750
- -----------------------------------------------------------------------------------------------------
Computer Software - Systems - 5.1%
Ariba, Inc.* 400 $ 70,950
BMC Software, Inc.* 9,100 727,431
Computer Associates International, Inc. 5,200 363,675
Computer Network Technology Corp.* 800 18,350
Compuware Corp.* 12,500 465,625
Etec Systems, Inc.* 6,500 291,688
Oracle Corp.* 6,018 674,392
Unisys Corp.* 8,100 258,694
VERITAS Software Corp.* 2,600 372,125
------------
$ 3,242,930
- -----------------------------------------------------------------------------------------------------
Conglomerates - 2.1%
Tyco International Ltd. 33,620 $ 1,306,977
- -----------------------------------------------------------------------------------------------------
Electronics - 4.3%
Altera Corp.* 4,900 $ 242,856
Analog Devices, Inc.* 7,853 730,329
Intel Corp. 1,300 107,006
Lam Research Corp.* 1,200 133,875
LSI Logic Corp.* 8,600 580,500
Novellus Systems, Inc.* 3,400 416,607
Teradyne, Inc.* 7,500 495,000
------------
$ 2,706,173
- -----------------------------------------------------------------------------------------------------
Entertainment - 6.5%
CBS Corp.* 9,684 619,171
Comcast Corp., "A" 6,900 348,881
Harrah's Entertainment, Inc.* 19,406 513,046
Hearst-Argyle Television, Inc.* 11,000 292,875
Infinity Broadcasting Corp.* 41,150 1,489,116
MediaOne Group, Inc.* 4,000 307,250
Time Warner, Inc. 7,200 521,550
------------
$ 4,091,889
- -----------------------------------------------------------------------------------------------------
Financial Institutions - 1.7%
Associates First Capital Corp., "A" 9,210 $ 252,699
Citigroup, Inc. 6,700 372,269
Federal Home Loan Mortgage Corp. 6,300 296,494
Merrill Lynch & Co., Inc. 1,900 158,650
------------
$ 1,080,112
- -----------------------------------------------------------------------------------------------------
Financial Services - 0.9%
AXA Financial, Inc. 16,440 $ 556,905
- -----------------------------------------------------------------------------------------------------
Forest and Paper Products - 1.3%
Bowater, Inc. 5,900 $ 320,444
Jefferson Smurfit Corp. 95,600 286,259
Weyerhaeuser Co. 3,000 215,437
------------
$ 822,140
- -----------------------------------------------------------------------------------------------------
Insurance - 1.9%
Hartford Financial Services Group, Inc. 10,429 $ 494,074
Hartford Life, Inc., "A" 1,800 79,200
Lincoln National Corp. 15,400 616,000
Travelers Property Casualty Corp. 800 27,400
------------
$ 1,216,674
- -----------------------------------------------------------------------------------------------------
Internet - 0.1%
FreeMarkets, Inc.* 20 $ 6,826
Phone.com, Inc.* 600 69,563
------------
$ 76,389
- -----------------------------------------------------------------------------------------------------
Machinery - 0.1%
Ingersoll Rand Co. 1,200 $ 66,075
- -----------------------------------------------------------------------------------------------------
Medical and Health Products - 2.1%
American Home Products Corp. 8,970 $ 353,754
Bausch & Lomb, Inc. 2,300 157,406
Boston Scientific Corp.* 19,900 435,313
Pharmacia & Upjohn, Inc. 8,800 396,000
------------
$ 1,342,473
- -----------------------------------------------------------------------------------------------------
Oil Services - 3.7%
Baker Hughes, Inc. 26,600 $ 560,262
BJ Service Co.* 6,600 275,962
Cooper Cameron Corp.* 6,800 332,775
Halliburton Co. 4,500 181,125
Noble Drilling Corp.* 12,100 396,275
Schlumberger Ltd. 3,100 174,375
Weatherford International, Inc.* 10,200 407,363
------------
$ 2,328,137
- -----------------------------------------------------------------------------------------------------
Oils - 2.9%
Apache Corp. 4,000 $ 147,750
Coastal Corp. 9,700 343,744
Conoco, Inc. 17,100 425,362
Conoco, Inc., "A" 10,600 262,350
EOG Resources, Inc. 23,800 417,988
Transocean Sedco Forex, Inc. 6,706 225,908
------------
$ 1,823,102
- -----------------------------------------------------------------------------------------------------
Photographic Products - 0.2%
Polaroid Corp. 7,500 $ 141,094
- -----------------------------------------------------------------------------------------------------
Printing and Publishing - 0.9%
Meredith Corp. 4,500 $ 187,594
Tribune Co. 6,800 374,425
------------
$ 562,019
- -----------------------------------------------------------------------------------------------------
Railroads - 0.4%
Kansas City Southern Industries, Inc. 3,500 $ 261,187
- -----------------------------------------------------------------------------------------------------
Stores - 2.3%
Costco Wholesale Corp.* 2,700 $ 246,375
CVS Corp. 9,400 375,412
Office Depot, Inc.* 20,200 220,938
Tandy Corp. 6,900 339,394
TJX Cos., Inc. 11,300 230,944
------------
$ 1,413,063
- -----------------------------------------------------------------------------------------------------
Supermarkets - 2.1%
Kroger Co.* 46,778 $ 882,934
Safeway, Inc.* 12,700 451,644
------------
$ 1,334,578
- -----------------------------------------------------------------------------------------------------
Telecommunications - 17.1%
Amdocs Ltd.* 3,600 $ 124,200
Ancor Communications, Inc.* 2,150 145,931
ANTEC Corp.* 11,900 434,350
AT&T Corp. 9,900 502,425
BroadWing, Inc.* 19,324 712,572
California Amplifier, Inc.* 1,900 49,994
CenturyTel, Inc. 2,100 99,488
Cisco Systems, Inc.* 7,300 782,012
Corning, Inc. 10,000 1,289,375
EchoStar Communications, Corp.* 1,200 117,000
General Instrument Corp.* 7,500 637,500
GTE Corp. 3,900 275,194
Insight Communications, Inc.* 4,200 124,425
Level 3 Communications, Inc.* 3,100 253,812
MCI WorldCom, Inc.* 17,700 939,206
Metromedia Fiber Network, Inc., "A"* 8,310 398,361
Motorola, Inc. 5,500 809,875
NEXTEL Communications, Inc.* 4,800 495,000
Nortel Networks Corp. 3,700 373,700
NTL, Inc.* 7,375 920,031
Tellabs, Inc.* 2,000 128,375
Tritel, Inc.* 170 5,387
UnitedGlobalCom, Inc.* 7,400 522,625
Viatel, Inc.* 1,200 64,350
Western Wireless Corp.* 800 53,400
Williams Communications Group, Inc.* 5,800 167,838
Winstar Communications, Inc.* 4,800 361,200
Z-Tel Technologies, Inc.* 130 5,249
------------
$ 10,792,875
- -----------------------------------------------------------------------------------------------------
Transportation - 0.2%
Union Pacific Corp. 3,100 $ 135,238
- -----------------------------------------------------------------------------------------------------
Utilities - Electric - 2.8%
AES Corp.* 11,400 $ 852,150
Calpine Corp.* 7,300 467,200
CMS Energy Corp. 14,800 461,575
------------
$ 1,780,925
- -----------------------------------------------------------------------------------------------------
Utilities - Gas - 1.5%
Enron Corp. 11,500 $ 510,313
Williams Cos., Inc. 14,900 455,381
------------
$ 965,694
- -----------------------------------------------------------------------------------------------------
Total U.S. Stocks $ 43,549,693
- -----------------------------------------------------------------------------------------------------
Foreign Stocks - 26.2%
Australia - 0.5%
Cable & Wireless Optus (Telecommunications) 87,700 $ 291,807
- -----------------------------------------------------------------------------------------------------
Bermuda - 0.8%
Global Crossing Ltd. (Telecommunications)* 5,600 $ 280,000
RSL Communications, Ltd. (Telecommunications)* 12,200 208,925
------------
$ 488,925
- -----------------------------------------------------------------------------------------------------
Canada - 2.6%
Abitibi-Consolidated, Inc. (Forest and Paper
Products) 21,600 $ 256,500
AT&T Canada, Inc. (Telecommunications)* 11,400 458,850
Canadian National Railway Co. (Railroads) 7,900 207,869
Seagrams Ltd. (Conglomerates) 6,300 283,106
Telesystem International Wireless, Inc.
(Telecommunications)* 12,400 461,900
------------
$ 1,668,225
- -----------------------------------------------------------------------------------------------------
Finland - 2.5%
HPY Holding - HTF Holding Oyj Abp
(Telecommunications)* 4,800 $ 180,069
Nokia Corp., ADR (Telecommunications) 4,160 790,400
Sonera Oyj (Telecommunications) 8,800 603,092
------------
$ 1,573,561
- -----------------------------------------------------------------------------------------------------
France - 2.3%
Bouygues S.A. (Telecommunications)* 750 $ 476,610
STMicroelectronics Co. (Electronics) 2,325 357,782
Vivendi (Business Services) 7,000 632,006
------------
$ 1,466,398
- -----------------------------------------------------------------------------------------------------
Germany - 2.9%
Deutsche Telekom AG (Utilities - Telephone)* 1,800 $ 128,164
Freenet.de AG (Internet)* 40 4,423
Mannesmann AG (Conglomerate) 6,040 1,456,851
MobilCom AG (Cellular Telephones) 2,800 239,690
PrimaCom AG (Broadcasting)* 500 30,313
------------
$ 1,859,441
- -----------------------------------------------------------------------------------------------------
Greece - 0.6%
Panafon S.A. (Telecommunications)* 29,080 $ 390,634
- -----------------------------------------------------------------------------------------------------
Hong Kong - 0.5%
China Telecom Ltd. (Telecommunications)* 46,000 $ 287,019
- -----------------------------------------------------------------------------------------------------
Israel - 1.0%
Partner Communications Co. Ltd., ADR (Cellular
Telephones) 23,700 $ 613,237
- -----------------------------------------------------------------------------------------------------
Italy - 2.5%
Telecom Italia Mobile S.p.A. (Telecommunications) 105,000 $ 1,172,718
Telecom Italia S.p.A. (Telecommunications) 28,100 396,193
------------
$ 1,568,911
- -----------------------------------------------------------------------------------------------------
Japan - 3.0%
Fast Retailing Co. (Retail) 400 $ 162,850
Hitachi Ltd. (Electronics) 31,000 497,553
Nippon Telephone & Telegraph Co. (Utilities -
Telephone) 23 393,913
NTT Mobile Communications Network, Inc.
(Telecommunications) 19 730,769
SOFTBANK CORP. (Internet) 100 95,714
------------
$ 1,880,799
- -----------------------------------------------------------------------------------------------------
Netherlands - 3.0%
Equant N.V. (Computer Software - Services)* 3,240 $ 367,741
Koninklijke KPN N.V. (Telecommunications)* 2,415 235,675
Libertel N.V. (Cellular Telephones)* 22,200 581,298
United Pan - Europe Communications N.V
(Telecommunications and Cable)* 5,500 703,459
------------
$ 1,888,173
- -----------------------------------------------------------------------------------------------------
Singapore - 0.4%
Asia Pulp & Paper Co. Ltd., ADR (Consumer Goods and
Services)* 29,000 $ 228,375
Chartered Semiconductor Manufacturing Co., ADR
(Electronics)* 800 58,400
------------
$ 286,775
- -----------------------------------------------------------------------------------------------------
Spain - 0.8%
Jazztel PLC, ADR (Telecommunications)* 7,840 $ 510,580
- -----------------------------------------------------------------------------------------------------
Sweden - 1.5%
Ericsson LM, "B" (Telecommunications) 9,200 $ 592,396
Ericsson LM, ADR (Telecommunications) 1,000 65,687
NetCom AB (Telecommunications)* 3,700 260,459
------------
$ 918,542
- -----------------------------------------------------------------------------------------------------
United Kingdom - 1.3%
Cable & Wireless Communications PLC
(Telecommunications)* 17,200 $ 245,744
COLT Telecom Group PLC (Telecommunications)* 2,825 145,741
COLT Telecom Group PLC, ADR (Telecommunications)* 1,400 285,600
NDS Group PLC, ADR (Internet)* 4,650 141,825
Thus PLC (Internet)* 3,880 24,489
------------
$ 843,399
- -----------------------------------------------------------------------------------------------------
Total Foreign Stocks $ 16,536,426
- -----------------------------------------------------------------------------------------------------
Total Stocks (Identified Cost, $47,094,994) $ 60,086,119
- -----------------------------------------------------------------------------------------------------
Convertible Preferred Stock - 0.5%
- -----------------------------------------------------------------------------------------------------
Telecommunications - 0.5%
UnitedGlobalCom, Inc., 7.00%## (Identified Cost, $165,000) 3,300 $ 299,475
- -----------------------------------------------------------------------------------------------------
Short-Term Obligation - 3.5%
- -----------------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT
(000 OMITTED)
- -----------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., due 1/03/00, at
Amortized Cost $ 2,235 $ 2,234,814
- -----------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $49,494,808) $ 62,620,408
Other Assets, Less Liabilities - 0.9% 551,312
- -----------------------------------------------------------------------------------------------------
Net Assets - 100.0% $ 63,171,720
- -----------------------------------------------------------------------------------------------------
* Non-income producing security.
## SEC Rule 144A restriction.
See notes to financial statements.
</TABLE>
<PAGE>
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
- -------------------------------------------------------------------------------
DECEMBER 31, 1999
- -------------------------------------------------------------------------------
Assets:
Investments, at value (identified cost, $49,494,808) $62,620,408
Investments of cash collateral for securities loaned, at value
(identified cost, $7,883,919) 7,883,919
Cash 4,753
Receivable for Series shares sold 531,049
Receivable for investments sold 894,786
Interest and dividends receivable 18,687
Deferred organization expenses 2,988
Other assets 956
-----------
Total assets $71,957,546
-----------
Liabilities:
Payable for Series shares reacquired $ 2,921
Payable for investments purchased 886,633
Collateral for securities loaned, at value 7,883,919
Payable to affiliate for management fee 1,272
Accrued expenses and other liabilities 11,081
-----------
Total liabilities $ 8,785,826
-----------
Net assets $63,171,720
===========
Net assets consist of:
Paid-in capital $42,797,990
Unrealized appreciation on investments and translation of
assets and liabilities in foreign currencies 13,126,074
Accumulated undistributed net realized gain on investments
and foreign currency transactions 7,247,656
-----------
Total $63,171,720
===========
Shares of beneficial interest outstanding 2,906,427
=========
Net asset value, offering price, and redemption price per share
(net assets / shares of beneficial interest outstanding) $21.74
======
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS - continued
Statement of Operations
- -------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1999
- -------------------------------------------------------------------------------
Net investment income (loss):
Income -
Dividends $ 222,687
Interest 106,194
Foreign taxes withheld (4,029)
-----------
Total investment income $ 324,852
-----------
Expenses -
Management fee $ 275,618
Trustees' compensation 2,431
Shareholder servicing agent fee 12,854
Administrative fee 4,376
Custodian fee 21,105
Printing 31,199
Postage 5
Auditing fees 18,121
Legal fees 3,022
Amortization of organization expenses 1,837
Miscellaneous 7,800
-----------
Total expenses $ 378,368
Fees paid indirectly (4,697)
Reduction of expenses by investment adviser (1,553)
-----------
Net expenses $ 372,118
-----------
Net investment loss $ (47,266)
-----------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $ 7,270,144
Foreign currency transactions (32,600)
-----------
Net realized gain on investments and foreign currency
transactions $ 7,237,544
-----------
Change in unrealized appreciation -
Investments $ 9,709,719
Translation of assets and liabilities in foreign currencies 2,610
-----------
Net unrealized gain on investments and foreign currency
translation $ 9,712,329
-----------
Net realized and unrealized gain on investments and
foreign currency $16,949,873
-----------
Increase in net assets from operations $16,902,607
===========
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1999 1998
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
From operations -
Net investment income (loss) $ (47,266) $ 28,572
Net realized gain on investments and foreign currency
transactions 7,237,544 209,476
Net unrealized gain on investments and foreign currency
translation 9,712,329 3,052,898
------------ ------------
Increase in net assets from operations $ 16,902,607 $ 3,290,946
------------ ------------
Distributions declared to shareholders -
From net investment income $ -- $ (28,505)
From net realized gain on investments and foreign
currency transactions (100,358) (19,522)
------------ ------------
Total distributions declared to shareholders $ (100,358) $ (48,027)
------------ ------------
Net increase in net assets from Series share transactions $ 22,461,142 $ 15,005,582
------------ ------------
Total increase in net assets $ 39,263,391 $ 18,248,501
Net assets:
At beginning of period 23,908,329 5,659,828
------------ ------------
At end of period (including accumulated net undistributed
investment income of $0 and $873, respectively) $ 63,171,720 $ 23,908,329
============ ============
See notes to financial statements.
</TABLE>
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights
- ----------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------
1999 1998 1997 1996*
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $14.79 $11.68 $10.66 $10.00
------ ------ ------ ------
Income from investment operations# -
Net investment income (loss)(S) $(0.02) $ 0.03 $ 0.12 $ 0.07
Net realized and unrealized gain on investments
and foreign currency 7.02 3.11 2.66 0.88
------ ------ ------ ------
Total from investment operations $ 7.00 $ 3.14 $ 2.78 $ 0.95
------ ------ ------ ------
Less distributions declared to shareholders -
From net investment income $ -- $(0.02) $(0.09) $(0.03)
From net realized gain on investments and
foreign currency transactions (0.05) (0.01) (1.54) (0.21)
In excess of net realized gain on investments
and foreign currency transactions -- -- -- (0.01)
From capital -- -- (0.13) (0.04)
------ ------ ------ ------
Total distributions declared to
shareholders $(0.05) $(0.03) $(1.76) $(0.29)
------ ------ ------ ------
Net asset value - end of period $21.74 $14.79 $11.68 $10.66
====== ====== ====== ======
Total return 47.42% 26.80% 26.47% 8.78%++
Ratios (to average net assets)/Supplemental data(S):
Expenses## 1.02% 1.02% 1.02% 1.02%+
Net investment income (loss) (0.13)% 0.21% 0.91% 1.72%+
Portfolio turnover 152% 144% 270% 44%
Net assets at end of period (000 omitted) $63,172 $23,908 $5,660 $1,351
(S) Subject to reimbursement by the Series, MFS has voluntarily agreed to pay all of the Series' operating expenses,
exclusive of management fees. In consideration, the Series pays MFS a fee not greater than 0.25% of average daily net
assets. To the extent actual expenses were over this limitation, the net investment income (loss) per share and the
ratios would have been:
Net investment income (loss) $(0.02) $ 0.02 $(0.02) $(0.04)
Ratios (to average net assets):
Expenses## 1.03% 1.11% 2.08% 3.83%+
Net investment income (loss) (0.14)% 0.12% (0.18)% (1.11)%+
* For the period from the commencement of the Series' investment operations, August 14, 1996, through December 31, 1996.
+ Annualized.
++ Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect expense reductions from certain expense offset arrangements.
</TABLE>
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(1) Business and Organization
MFS Capital Opportunities (the Series), formerly known as MFS Value 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 December 31, 1999, there were 17 shareholders of 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. The Series
can invest in foreign securities. Investments in foreign securities are
vulnerable to the effects of changes in the relative values of the local
currency and the U.S dollar and to the effects of changes in each country's
legal political, and economic environment.
Investment Valuations - Equity securities listed on securities exchanges or
reported through the NASDAQ system are reported at market value using last
sale prices. Unlisted equity securities or listed equity securities for which
last sale prices are not available are reported at market value using last
quoted bid prices. Short-term obligations, which mature in 60 days or less,
are valued at amortized cost, which approximates market value. Securities for
which there are no such quotations or valuations are valued in good faith by
the Trustees.
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, 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 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 both realized and unrealized gains and
losses on investments that results from fluctuations in foreign currency
exchange rates is not separately disclosed.
Deferred Organization Expenses - Costs incurred by the Series 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 Series operations.
Security Loans - State Street Bank and Trust Company ("State Street") as
lending agent, may loan the securities of the fund to certain qualified
institutions (the "Borrowers") approved by the Fund. The loans are
collateralized at all times by cash and/or U.S. Treasury securities in an
amount at least equal to the market value of the securities loaned. State
Street provides the Fund with indemnification against Borrower default. The
Fund bears the risk of loss with respect to the investment of cash collateral.
Cash collateral is invested in short-term securities. A portion of the income
generated upon investment of the collateral is remitted to the Borrowers, and
the remainder is allocated between the Fund and the lending agents. On loans
collateralized by U.S. Treasury securities, a fee is received from the
Borrower, and is allocated between the Fund and the lending agents. Income
from securities lending is included in interest income on the Statement of
Operations. The dividend and interest income earned on the securities loaned
is accounted for in the same manner as other dividend and interest income.
At December 31, 1999, the value of securities loaned was $7,690,541. These
loans were collateralized by U.S. Treasury securities of $54,508 and cash of
$7,883,919 which was invested in the following short-term obligation:
IDENTIFIED COST
SHARES AND VALUE
- -------------------------------------------------------------------------------
Navigator Securities Lending Prime Portfolio 7,883,919 $7,883,919
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. Dividends received in cash are recorded on the
ex-dividend date. Dividend and interest payments received in additional
securities are recorded on the ex-dividend or ex-interest date in an amount
equal to the value of the security on such date.
Fees Paid Indirectly - The Series' custody fee is calculated as a percentage
of the Series' month end net assets. The 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 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 be 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. During
the year ended December 31, 1999, accumulated undistributed net investment
income was increased by $46,393, accumulated net realized gain on investments
and foreign currency transactions was decreased by $42,562 and paid in capital
was decreased by $3,831 due to differences between book and tax accounting for
currency transactions and the offset of net investment loss against short-term
capital gains. This change had no effect on the net assets or net asset value
per share.
(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 0.75%
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 0.25% 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 December 31, 1999, aggregate unreimbursed expenses amounted to
$71,001.
Each 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 pays MFS an administrative
fee at the following annual percentages of the Series' average daily net
assets:
First $1 billion 0.0150%
Next $1 billion 0.0125%
Next $1 billion 0.0100%
In excess of $3 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 investments, other than purchased option transactions
and short-term obligations, were as follows:
PURCHASES SALES
- -------------------------------------------------------------------------------
U.S. government securities $ 365,664 $ 976,256
----------- -----------
Investments (non-U.S. government securities) $75,778,549 $52,504,875
=========== ===========
The cost and unrealized appreciation and depreciation in the value of the
investments owned by the Series, as computed on a federal income tax basis,
are as follows:
Aggregate cost $49,541,437
-----------
Gross unrealized appreciation $14,963,694
Gross unrealized depreciation (1,884,723)
-----------
Net unrealized appreciation $13,078,971
===========
(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. Transactions in
Series shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1999 YEAR ENDED DECEMBER 31, 1998
----------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 1,585,132 $27,479,475 1,423,149 $18,806,882
Shares issued to shareholders in
reinvestment of distributions 5,754 100,358 3,280 48,045
Shares reacquired (301,261) (5,118,691) (293,995) (3,849,345)
--------- ----------- --------- -----------
Net increase 1,289,625 $22,461,142 1,132,434 $15,005,582
========= =========== ========= ===========
</TABLE>
(6) Line of Credit
The Series and other affiliated Series' participate in an $820 million
unsecured line of credit provided by a syndication of banks under a line of
credit agreement. Borrowings may be made to temporarily finance the repurchase
of Series shares. Interest is charged to each Series, 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 Series at the end of each quarter. The commitment fee
allocated to the Series for the year ended December 31, 1999, was $303. The
Series had no significant borrowings during the year.
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Trustees of the MFS Variable Insurance Trust and Shareholders of MFS
Capital Opportunities Series:
We have audited the accompanying statement of assets and liabilities of MFS
Capital Opportunities Series, formerly known as MFS Value Series, (the Series)
(one of the series constituting the MFS Variable Insurance Trust), including
the portfolio of investments, as of December 31, 1999, and the related
statement of operations for the year then ended, the statement of changes in
net assets for each of the two years in the period then ended, and the
financial highlights for each of the four years in the period then ended.
These financial statements and financial highlights are the responsibility of
the Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of December 31, 1999, by correspondence with the custodian and
brokers; where replies were not received from brokers, we performed other
auditing procedures. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of MFS
Capital Opportunities Series as of December 31, 1999, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each
of the four years in the period then ended, in conformity with generally
accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
February 3, 2000
FEDERAL TAX INFORMATION
The Series has designated $18,873 as a capital gain dividend for the year
ended December 31, 1999.
For the year ended December 31, 1999, the amount of distributions from income
eligible for the 70% dividends received deduction for corporations is 54.56%.
<PAGE>
MFS' YEAR 2000 READINESS DISCLOSURE
MFS Investment Management(R), as an investment adviser and
on behalf of the MFS funds, is committed to the effective
use of technology in managing our portfolio investments,
delivering high-quality service to MFS fund shareholders, [Graphic Omitted]
retirement plan participants, and MFS' institutional
clients, and supporting the financial consultants who sell
our products.
MFS can now say that it is ready for the Year 2000. Our testing has demonstrated
that MFS' computer hardware and software will recognize "00" as the Year 2000
and will not confuse those digits with 1900. All of our critical business
applications and processes have been successfully tested, and we have adopted
companywide policies that will help us maintain our readiness through the
remainder of the year. Any new technology that is brought into the company
before the end of the year will be held to the same stringent standards as our
current technology. We have also developed a vendor readiness survey, contacted
over 700 of our vendors, and established an ongoing process to review responses,
as well as to review readiness statements of new vendors and products.
MFS recognizes that fund shareholders and institutional clients also are
concerned about whether the companies whose securities are held in their
portfolios are addressing Y2K issues. As part of the MFS Original Research(R)
process of evaluating portfolio investments, one of the many relevant factors
that MFS' portfolio managers and research analysts may consider is a company's
Y2K readiness.
Y2K readiness is an enormously complex, worldwide issue. No company or
institution can guarantee that it will be unaffected by the Y2K issue. While MFS
is taking significant steps to protect the integrity of its internal systems,
there can be no assurance that these steps will be sufficient to avoid any
adverse impact on MFS fund shareholders, retirement plan participants, or
institutional clients.
If you have further questions regarding MFS' Year 2000 Readiness Program, please
visit our Web site at www.mfs.com, call our toll-free line, 1-800-637-4406, or
write to the MFS Year 2000 Program Management Office by e-mail at [email protected] or
by letter at 500 Boylston Street, Boston, MA 02116-3741.
<PAGE>
(C) 2000 MFS Investment Management(R)
MFS(R) investment products are offered through MFS Fund Distributors, Inc.,
500 Boylston Street, Boston, MA 02116
VCO-2 2/00 39.5M
