MFS Variable Insurance Trust Iii NCSR Certified annual shareholder report (management investment company)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-08879

MFS VARIABLE INSURANCE TRUST III

(Exact name of registrant as specified in charter)

111 Huntington Avenue, Boston, Massachusetts 02199 (Address of principal executive offices) (Zip code)

Christopher R. Bohane

Massachusetts Financial Services Company

111Huntington Avenue Boston, Massachusetts 02199

(Name and address of agents for service)

Registrant's telephone number, including area code: (617) 954-5000

Date of fiscal year end: December 31

Date of reporting period: December 31, 2022

ITEM 1. REPORTS TO STOCKHOLDERS.

Item 1(a):

Annual Report

December 31, 2022

MFS^® Moderate
Allocation Portfolio

MFS^® Variable Insurance Trust III

VMA-ANN

MFS^® Moderate Allocation Portfolio

CONTENTS

The 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.

NOT FDIC INSURED • MAY LOSE VALUE • NO BANK OR CREDIT UNION GUARANTEE •

NOT A DEPOSIT • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY OR NCUA/NCUSIF

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MFS Moderate Allocation Portfolio

LETTER FROM THE CHAIR AND CEO

Dear Shareholders:

Signs of peaking inflation, hopes that monetary policy tightening cycles may be nearing an end and a rapid reopening of China’s economy in late-2022 and early-2023 have combined to bolster investor sentiment in recent months. Markets have largely adjusted to the challenges posed by Russia’s invasion of Ukraine, thanks in part to mild European winter weather which has alleviated concerns over potential shortages of natural gas. Resilient labor markets in much of the developed world have further contributed to a brighter-than-expected economic backdrop. However, many investors are mindful that the lagged effects of ongoing policy tightening have yet to work their way through the global economy.

Tighter global financial conditions have been a particular headwind for richly valued growth equities and interest rate-sensitive parts of the economy, such as housing. Over the near term, companies may face a challenging earnings backdrop as they are forced to absorb higher input and labor costs at a time of dwindling pricing power. For fixed income, the rise in interest rates has made bonds more attractive than they have been in years, which may provide balance to an overall portfolio.

During times of market transition, it is important to have a deep understanding of company fundamentals, and we have built our unique global research platform to do just that.

At MFS^®, we put our clients’ assets to work responsibly by carefully navigating increasingly complex global capital markets. Our investment team is guided by a commitment to long-term fundamental investing. Our global investment platform — combining collective expertise, long-term discipline, and thoughtful risk management — seeks to uncover what we believe are the best, most durable investment ideas in markets around the world, enabling us to potentially create value for investors.

Respectfully,

Michael W. Roberge

Chair and Chief Executive Officer

MFS Investment Management

February 15, 2023

The opinions expressed in this letter are subject to change and may not be relied upon for investment advice. No forecasts can be guaranteed.

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MFS Moderate Allocation Portfolio

Portfolio Composition

Portfolio target allocation

Portfolio actual allocation

Portfolio holdings

MFS Total Return Bond Series	12.0%
MFS Government Securities Portfolio	10.0%
MFS Value Series	9.1%
MFS Growth Series	8.7%
MFS Research Series	8.0%
MFS Research International Portfolio	7.1%
MFS Mid Cap Value Portfolio	7.0%
MFS Mid Cap Growth Series	7.0%
MFS Global Governments Portfolio	5.0%
MFS Inflation-Adjusted Bond Portfolio	5.0%
MFS High Yield Portfolio	5.0%
MFS Limited Maturity Portfolio	4.0%
MFS International Intrinsic Value Portfolio	3.0%
MFS International Growth Portfolio	3.0%
MFS Global Real Estate Portfolio	3.0%
MFS New Discovery Value Portfolio	1.5%
MFS New Discovery Series	1.5%
Cash & Cash Equivalents	0.1%

Cash & Cash Equivalents includes any cash, investments in money market funds, short-term securities, and other assets less liabilities. MFS endeavors to fully invest all MFS funds-of-funds in underlying funds on a daily basis. Any divergence from 0.0% in Cash & Cash Equivalents is typically due to the timing of fund subscriptions/redemptions and the settlement of subsequent investment in/divestment from the underlying funds. While the MFS funds-of-funds' subscriptions/redemptions are processed at the same day NAV of the underlying funds, a positive/negative cash balance will be reflected on the MFS funds-of-funds' Statements of Assets and Liabilities until the trades with the underlying funds settle, which is typically two business days. Please see the fund's Statement of Assets and Liabilities for additional information related to the fund’s cash position and other assets and liabilities.

Percentages are based on net assets as of December 31, 2022.

The portfolio is actively managed and current holdings may be different.

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MFS Moderate Allocation Portfolio

Management Review

Summary of Results

For the twelve months ended December 31, 2022, Initial Class shares of the MFS Moderate Allocation Portfolio (fund) provided a total return of -16.76%, while Service Class shares of the fund provided a total return of -16.91%. These compare with a return of -18.11% for the fund’s benchmark, the Standard & Poor's 500 Stock Index (S&P 500 Index). The fund's other benchmark, the MFS Moderate Allocation Portfolio Blended Index (Blended Index), generated a return of -15.47%. The Blended Index reflects the blended returns of various equity and fixed income market indices, with percentage allocations to each index designed to resemble the allocations of the fund. The market indices and related percentage allocations used to compile the Blended Index are set forth in the Performance Summary.

Market Environment

During the reporting period, markets continued to grapple with the strongest global inflationary pressures in decades along with signs of slowing economic growth. Intermittent coronavirus flareups, particularly in China, where home-grown vaccines have proved less effective than elsewhere, kept supply chains stretched for a considerable period. At the same time, the reopening of the economy in the parts of the world where the virus has been better contained has led to a shift in consumption patterns in favor of services, straining already tight labor markets in most developed economies, while reducing demand for manufactured goods, primarily from Asia. As a result of Russia’s invasion of Ukraine, geopolitical considerations, such as sanctions and trade bans, have resulted in additional supply chain disruptions and volatile global energy prices. Taken together, these factors have contributed to market volatility.

The ripple effects from the Russian invasion further complicated the mission central banks must undertake to rein in surging inflation. Energy shocks have historically resulted in global growth slowdowns, if not pullbacks, so policymakers will find themselves in the difficult position of trying to restrain inflation without tipping economies into recession. Despite the challenging macroeconomic and geopolitical environment, policymakers remained focused on controlling inflation, although investors appeared to have expected varying degrees of action from the central banks. The Fed has been among the most aggressive developed market central banks, tightening policy at the fastest rate in decades, although it slowed its hiking pace at the end of the period, as did the European Central Bank. After remaining on the monetary sidelines for much of the period, the Bank of Japan widened its Yield Curve Control band, capping the yield on its 10-year bond at 0.5%, up from 0.25%, an action investors interpreted as a first step toward monetary policy normalization.

Against an environment of still-tight labor markets, tighter global financial conditions and volatile materials prices, investor anxiety appeared to have increased over the potential that corporate profit margins may be past peak for this cycle. That said, tentative signs that supply chain bottlenecks (particularly semiconductors) may be moderating, the easing of COVID restrictions in China, low levels of unemployment across developed markets and hopes that inflation levels may be near a peak were supportive factors for the macroeconomic backdrop.

Factors Affecting Performance

During the reporting period, the fund outperformed its benchmark, the Standard & Poor’s 500 Stock Index. Over the same period, the fund underperformed the Blended Index.

Relative to the Blended Index, the fund’s exposure to the international equity asset class was a primary detractor from relative performance. Within this segment, both the MFS International Intrinsic Value Portfolio and MFS Research International Portfolio weighed on the fund’s relative results as both portfolios tilted toward higher quality growth and lagged their respective benchmarks.

The fund's exposure to the U.S. equity asset class also held back relative returns. Here, exposure to growth-oriented funds, most notably to the MFS Growth Series and MFS Mid Cap Growth Series, which both underperformed their respective benchmarks, held back relative returns and outweighed the positive contribution from the fund’s exposure to value-oriented funds, particularly the MFS Value Series and MFS Mid Cap Value Portfolio.

The fund's exposure to the fixed income asset class also weakened relative performance. Within this asset class, the fund’s exposure to both the MFS Inflation-Adjusted Bond Portfolio and MFS Global Governments Portfolio, both of which are global portfolios and were negatively impacted by a stronger U.S. dollar, outweighed the positive contribution from the fund’s exposure to the MFS Limited Maturity Portfolio, a shorter duration(d) portfolio which held in better in the face of rising interest rates.

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MFS Moderate Allocation Portfolio

Management Review - continued

Respectfully,

Portfolio Manager(s)

Joseph Flaherty and Natalie Shapiro

(d)	Duration is a measure of how much a bond’s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value.

The views expressed in this report are those of the portfolio manager(s) only through the end of the period of the report as stated on the cover and do not necessarily reflect the views of MFS or any other person in the MFS organization. These views are subject to change at any time based on market or other conditions, and MFS disclaims any responsibility to update such views. These views may not be relied upon as investment advice or an indication of trading intent on behalf of any MFS portfolio. References to specific securities are not recommendations of such securities, and may not be representative of any MFS portfolio’s current or future investments.

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MFS Moderate Allocation Portfolio

Performance Summary Through 12/31/22

The following chart illustrates the historical performance of the fund in comparison to its benchmark(s). Benchmarks are unmanaged and may not be invested in directly. Benchmark returns do not reflect any fees or expenses. The performance of other share classes will be greater than or less than that of the class depicted below. (See Notes to Performance Summary.)

Performance data shown represents past performance and is no guarantee of future results. Investment return and principal value fluctuate so your shares, when sold, may be worth more or less than the original cost; current performance may be lower or higher than quoted. The performance shown does not reflect the deduction of taxes, if any, that a shareholder would pay on fund distributions or the redemption of fund shares. The returns for the fund shown also do not reflect the deduction of expenses associated with variable products, such as mortality and expense risk charges, separate account charges, and sales charges imposed by the insurance company separate accounts. Such expenses would reduce the overall returns shown.

Growth of a Hypothetical $10,000 Investment

Total Returns through 12/31/22

Average annual total returns

Share Class	Class Inception Date	1-yr	5-yr	10-yr
Initial Class	10/01/08	(16.76)%	4.53%	6.57%
Service Class	10/01/08	(16.91)%	4.27%	6.30%

Comparative benchmark(s)

Standard & Poor's 500 Stock Index (f)	(18.11)%	9.42%	12.56%
MFS Moderate Allocation Portfolio Blended Index (f)(w)	(15.47)%	4.57%	6.70%
Bloomberg U.S. Aggregate Bond Index (f)	(13.01)%	0.02%	1.06%
FTSE EPRA Nareit Developed Real Estate Index (net div) (f)	(25.09)%	(0.23)%	2.99%
MSCI EAFE Index (net div) (f)	(14.45)%	1.54%	4.67%

(f)	Source: FactSet Research Systems Inc.
(w)	The MFS Moderate Allocation Portfolio Blended Index (a custom index) was comprised of the following at the beginning and at the end of the reporting period:

	12/31/22
Standard & Poor's 500 Stock Index	43%
Bloomberg U.S. Aggregate Bond Index	41%
MSCI EAFE Index (net div)	13%
FTSE EPRA Nareit Developed Real Estate Index (net div)	3%

Benchmark Definition(s)

Bloomberg U.S. Aggregate Bond Index^(a) – a market capitalization-weighted index that measures the performance of the U.S. investment-grade, fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities with at least one year to final maturity.

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MFS Moderate Allocation Portfolio

Performance Summary – continued

FTSE EPRA Nareit Developed Real Estate Index^(c) (net div) – measures the performance of eligible real estate equities worldwide that generate a majority of their revenue and income through the ownership, disposure and development of income-producing real estate.

MSCI EAFE (Europe, Australasia, Far East) Index^(e) (net div) – a market capitalization-weighted index that is designed to measure equity market performance in the developed markets, excluding the U.S. and Canada.

Standard & Poor's 500 Stock Index^(g) – a market capitalization-weighted index of 500 widely held equity securities, designed to measure broad U.S. equity performance.

It is not possible to invest directly in an index.

(a)

Source: Bloomberg Index Services Limited. BLOOMBERG^® is a trademark and service mark of Bloomberg Finance L.P. and its affiliates (collectively “Bloomberg”). Bloomberg or Bloomberg's licensors own all proprietary rights in the Bloomberg Indices. Bloomberg neither approves or endorses this material, or guarantees the accuracy or completeness of any information herein, or makes any warranty, express or implied, as to the results to be obtained therefrom and, to the maximum extent allowed by law, neither shall have any liability or responsibility for injury or damages arising in connection therewith.

(c)

FTSE International Limited (“FTSE”)^© FTSE 2019. “FTSE^®” is a trademark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. “FT-SE^®”, “FOOTSIE^®” and “FTSE4GOOD^®” are trademarks of the London Stock Exchange Group companies. “Nareit^®” is a trademark of the National Association of Real Estate Investment Trusts (“Nareit”) and “EPRA^®” is a trademark of the European Public Real Estate Association (“EPRA”) and all are used by FTSE under license. The FTSE EPRA Nareit Developed Real Estate Index is calculated by FTSE. Neither FTSE, Euronext N.V., Nareit, nor EPRA sponsor, endorse, or promote this product and are not in any way connected to it and do not accept any liability. All intellectual property rights in the index values and constituent list vests in FTSE, Euronext N.V., Nareit, and EPRA. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE's express written consent.

(e)

Morgan Stanley Capital International (“MSCI”) makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, reviewed, or produced by MSCI.

(g)

“Standard & Poor's^®” and “S&P^®” are registered trademarks of Standard & Poor's Financial Services LLC (“S&P”) and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”) and have been licensed for use by S&P Dow Jones Indices LLC and sublicensed for certain purposes by MFS. The S&P 500^® is a product of S&P Dow Jones Indices LLC, and has been licensed for use by MFS. MFS's product(s) is not sponsored, endorsed, sold, or promoted by S&P Dow Jones Indices LLC, Dow Jones, S&P, or their respective affiliates, and neither S&P Dow Jones Indices LLC, Dow Jones, S&P, nor their respective affiliates make any representation regarding the advisability of investing in such product(s).

Notes to Performance Summary

Average annual total return represents the average annual change in value for each share class for the periods presented.

Performance results reflect any applicable expense subsidies and waivers in effect during the periods shown. Without such subsidies and waivers the fund's performance results would be less favorable. Please see the prospectus and financial statements for complete details. All results are historical and assume the reinvestment of any dividends and capital gains distributions.

Performance results do not include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles and may differ from amounts reported in the financial highlights.

From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.

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MFS Moderate Allocation Portfolio

Expense Table

Fund expenses borne by the shareholders during the period,
July 1, 2022 through December 31, 2022

As a shareholder of the fund, you incur ongoing costs, including distribution and/or service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

In addition to the fees and expenses which the fund bears directly, the fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the fund invests. Because the underlying funds have varied expenses and fee levels and the fund may own different proportions of the underlying funds at different times, the amount of fees and expenses incurred indirectly by the fund will vary. If these indirect costs were included, your costs would have been higher.

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2022 through December 31, 2022.

Actual Expenses

The first line for each share class in the following table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line for each share class in the following table provides information about hypothetical account values and hypothetical expenses based on the fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight the fund's ongoing costs only and do not take into account the fees and expenses imposed under the variable contracts through which your investment in the fund is made. Therefore, the second line for each share class in the table is useful in comparing ongoing costs associated with an investment in vehicles (such as the fund) which fund benefits under variable annuity and variable life insurance contracts and to qualified pension and retirement plans only, and will not help you determine the relative total costs of investing in the fund through variable annuity and variable life insurance contracts. If the fees and expenses imposed under the variable contracts were included, your costs would have been higher.

Share Class		Annualized Expense Ratio	Beginning Account Value 7/01/22	Ending Account Value 12/31/22	Expenses Paid During Period (p) 7/01/22-12/31/22
Initial Class	Actual	0.01%	$1,000.00	$1,008.59	$0.05
Initial Class	Hypothetical (h)	0.01%	$1,000.00	$1,025.16	$0.05
Service Class	Actual	0.27%	$1,000.00	$1,007.75	$1.37
Service Class	Hypothetical (h)	0.27%	$1,000.00	$1,023.84	$1.38

(h)	5% class return per year before expenses.

(p)

“Expenses Paid During Period” are equal to each class’s annualized expense ratio, as shown above, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). In addition to the fees and expenses which the fund bears directly, the fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the fund invests. If these indirect costs were included, your costs would have been higher.

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MFS Moderate Allocation Portfolio

Portfolio of Investments − 12/31/22

The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.

Issuer	Shares/Par	Value ($)
Investment Companies (h) – 100.0%
Bond Funds – 41.0%
MFS Global Governments Portfolio - Initial Class	5,874,874	$ 50,582,670
MFS Government Securities Portfolio - Initial Class	9,449,671	100,166,512
MFS High Yield Portfolio - Initial Class	10,659,575	50,313,193
MFS Inflation-Adjusted Bond Portfolio - Initial Class	6,049,181	50,510,666
MFS Limited Maturity Portfolio - Initial Class	4,209,745	40,203,065
MFS Total Return Bond Series - Initial Class	10,710,940	120,605,181
		$412,381,287
International Stock Funds – 13.1%
MFS International Growth Portfolio - Initial Class	2,278,212	$ 30,414,124
MFS International Intrinsic Value Portfolio - Initial Class	1,116,978	30,426,491
MFS Research International Portfolio - Initial Class	4,717,338	71,231,807
		$132,072,422
Specialty Funds – 3.0%
MFS Global Real Estate Portfolio - Initial Class	2,376,164	$ 30,367,374
U.S. Stock Funds – 42.8%
MFS Growth Series - Initial Class	1,836,646	$ 88,195,740
MFS Mid Cap Growth Series - Initial Class	9,817,422	70,292,741
MFS Mid Cap Value Portfolio - Initial Class	7,701,658	70,778,233
MFS New Discovery Series - Initial Class	1,322,392	14,956,257
MFS New Discovery Value Portfolio - Initial Class	1,917,163	15,203,098
MFS Research Series - Initial Class	2,898,722	80,410,553
MFS Value Series - Initial Class	4,233,971	91,242,079
		$431,078,701
Money Market Funds – 0.1%
MFS Institutional Money Market Portfolio, 4.02% (v)	735,685	$ 735,906
Total Investment Companies (Identified Cost, $960,850,894)		$1,006,635,690
Other Assets, Less Liabilities – (0.0)%		(97,991)
Net Assets – 100.0%		$1,006,537,699

(h)	An affiliated issuer, which may be considered one in which the fund owns 5% or more of the outstanding voting securities, or a company which is under common control. At period end, the aggregate value of the fund’s investments in affiliated issuers was $1,006,635,690.
(v)	Affiliated issuer that is available only to investment companies managed by MFS. The rate quoted for the MFS Institutional Money Market Portfolio is the annualized seven-day yield of the fund at period end.

See Notes to Financial Statements

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MFS Moderate Allocation Portfolio

Financial Statements

Statement of Assets and Liabilities

This statement represents your fund’s balance sheet, which details the assets and liabilities comprising the total value of the fund.

At 12/31/22 Assets
Investments in affiliated issuers, at value (identified cost, $960,850,894)	$1,006,635,690
Receivables for
Investments sold	768,182
Fund shares sold	1,511
Other assets	5,131
Total assets	$1,007,410,514
Liabilities
Payables for
Fund shares reacquired	$766,426
Payable to affiliates
Administrative services fee	142
Shareholder servicing costs	68
Distribution and/or service fees	20,537
Accrued expenses and other liabilities	85,642
Total liabilities	$872,815
Net assets	$1,006,537,699
Net assets consist of
Paid-in capital	$885,605,562
Total distributable earnings (loss)	120,932,137
Net assets	$1,006,537,699
Shares of beneficial interest outstanding	96,272,533

	Net assets	Shares outstanding	Net asset value per share
Initial Class	$7,560,060	723,593	$10.45
Service Class	998,977,639	95,548,940	10.46

See Notes to Financial Statements

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MFS Moderate Allocation Portfolio

Financial Statements

Statement of Operations

This statement describes how much your fund earned in investment income and accrued in expenses. It also describes any gains and/or losses generated by fund operations.

Year ended 12/31/22
Net investment income (loss)
Income
Dividends from affiliated issuers	$26,915,492
Other	144
Total investment income	$26,915,636
Expenses
Distribution and/or service fees	$2,783,891
Shareholder servicing costs	16,883
Administrative services fee	17,500
Independent Trustees' compensation	17,575
Custodian fee	21,282
Shareholder communications	7,516
Audit and tax fees	43,564
Legal fees	4,821
Miscellaneous	36,226
Total expenses	$2,949,258
Net investment income (loss)	$23,966,378
Realized and unrealized gain (loss)
Realized gain (loss) (identified cost basis)
Investments in affiliated issuers	$(837,426)
Capital gain distributions from affiliated issuers	58,917,033
Net realized gain (loss)	$58,079,607
Change in unrealized appreciation or depreciation
Affiliated issuers	$(307,736,649)
Net realized and unrealized gain (loss)	$(249,657,042)
Change in net assets from operations	$(225,690,664)

See Notes to Financial Statements

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MFS Moderate Allocation Portfolio

Financial Statements

Statements of Changes in Net Assets

These statements describe the increases and/or decreases in net assets resulting from operations, any distributions, and any shareholder transactions.

	Year ended
	12/31/22	12/31/21
Change in net assets
From operations
Net investment income (loss)	$23,966,378	$19,432,185
Net realized gain (loss)	58,079,607	122,852,398
Net unrealized gain (loss)	(307,736,649)	8,807,403
Change in net assets from operations	$(225,690,664)	$151,091,986
Total distributions to shareholders	$(142,177,295)	$(87,100,447)
Change in net assets from fund share transactions	$8,207,909	$(131,955,533)
Total change in net assets	$(359,660,050)	$(67,963,994)
Net assets
At beginning of period	1,366,197,749	1,434,161,743
At end of period	$1,006,537,699	$1,366,197,749

See Notes to Financial Statements

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MFS Moderate Allocation Portfolio

Financial Statements

Financial Highlights

The financial highlights table is intended to help you understand the fund's financial performance for the past 5 years. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.

Initial Class	Year ended
	12/31/22	12/31/21	12/31/20	12/31/19	12/31/18
Net asset value, beginning of period	$14.48	$13.86	$13.23	$11.95	$13.33
Income (loss) from investment operations
Net investment income (loss) (d)(l)	$0.29	$0.25	$0.29	$0.30	$0.30
Net realized and unrealized gain (loss)	(2.66)	1.34	1.51	2.28	(0.74)
Total from investment operations	$(2.37)	$1.59	$1.80	$2.58	$(0.44)
Less distributions declared to shareholders
From net investment income	$(0.26)	$(0.30)	$(0.32)	$(0.35)	$(0.29)
From net realized gain	(1.40)	(0.67)	(0.85)	(0.95)	(0.65)
Total distributions declared to shareholders	$(1.66)	$(0.97)	$(1.17)	$(1.30)	$(0.94)
Net asset value, end of period (x)	$10.45	$14.48	$13.86	$13.23	$11.95
Total return (%) (k)(s)(x)	(16.76)	11.61	14.29	22.23	(3.85)
Ratios (%) (to average net assets) and Supplemental data:
Expenses before expense reductions (h)	0.01	0.01	0.01	0.01	0.01
Expenses after expense reductions (h)	N/A	N/A	N/A	N/A	N/A
Net investment income (loss) (l)	2.42	1.74	2.24	2.28	2.29
Portfolio turnover	3	2	7	1	1
Net assets at end of period (000 omitted)	$7,560	$9,312	$7,891	$6,448	$5,333

Service Class	Year ended
	12/31/22	12/31/21	12/31/20	12/31/19	12/31/18
Net asset value, beginning of period	$14.47	$13.86	$13.22	$11.94	$13.32
Income (loss) from investment operations
Net investment income (loss) (d)(l)	$0.26	$0.20	$0.24	$0.26	$0.27
Net realized and unrealized gain (loss)	(2.65)	1.34	1.54	2.28	(0.75)
Total from investment operations	$(2.39)	$1.54	$1.78	$2.54	$(0.48)
Less distributions declared to shareholders
From net investment income	$(0.22)	$(0.26)	$(0.29)	$(0.31)	$(0.25)
From net realized gain	(1.40)	(0.67)	(0.85)	(0.95)	(0.65)
Total distributions declared to shareholders	$(1.62)	$(0.93)	$(1.14)	$(1.26)	$(0.90)
Net asset value, end of period (x)	$10.46	$14.47	$13.86	$13.22	$11.94
Total return (%) (k)(s)(x)	(16.91)	11.26	14.08	21.90	(4.13)
Ratios (%) (to average net assets) and Supplemental data:
Expenses before expense reductions (h)	0.27	0.26	0.26	0.26	0.26
Expenses after expense reductions (h)	N/A	N/A	N/A	N/A	N/A
Net investment income (loss) (l)	2.14	1.38	1.81	1.98	2.02
Portfolio turnover	3	2	7	1	1
Net assets at end of period (000 omitted)	$998,978	$1,356,886	$1,426,271	$1,414,989	$1,364,874

See Notes to Financial Statements

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Financial Highlights - continued

(d)	Per share data is based on average shares outstanding.
(h)	In addition to the fees and expenses which the fund bears directly, the fund indirectly bears a pro rata share of the fees and expenses of the underlying affiliated funds in which the fund invests. Accordingly, the expense ratio for the fund reflects only those fees and expenses borne directly by the fund. Because the underlying affiliated funds have varied expense and fee levels and the fund may own different proportions of the underlying affiliated funds at different times, the amount of fees and expenses incurred indirectly by the fund will vary.
(k)	The total return does not reflect expenses that apply to separate accounts. Inclusion of these charges would reduce the total return figures for all periods shown.
(l)	The ratios and per share amounts do not include net investment income of the underlying affiliated funds in which the fund invests.
(s)	From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
(x)	The net asset values and total returns have been calculated on net assets which include adjustments made in accordance with U.S. generally accepted accounting principles required at period end for financial reporting purposes.

See Notes to Financial Statements

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Notes to Financial Statements

(1) Business and Organization

MFS Moderate Allocation Portfolio (the fund) is a diversified series of MFS Variable Insurance Trust III (the trust). The trust is organized as a Delaware statutory 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, and qualified retirement and pension plans.

The fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 Financial Services - Investment Companies.

(2) Significant Accounting Policies

The fund is a “fund of funds”, which invests the majority of its assets in other MFS mutual funds (hereafter referred to as “underlying affiliated funds” or “underlying funds”), which may have different fiscal year ends than the funds. The underlying funds, in turn, may engage in a number of investment techniques and practices, which involve certain risks. Certain underlying funds invest their portfolio in high-yield securities rated below investment grade. Investments in below investment grade quality securities can involve a substantially greater risk of default or can already be in default, and their values can decline significantly. Below investment grade quality securities tend to be more sensitive to adverse news about the issuer, or the market or economy in general, than higher quality debt instruments. Certain underlying funds invest a significant portion of their assets in asset-backed and/or mortgage-backed securities. For these securities, the value of the debt instrument also depends on the credit quality and adequacy of the underlying assets or collateral as well as whether there is a security interest in the underlying assets or collateral. Enforcing rights, if any, against the underlying assets or collateral may be difficult. U.S. Government securities not supported as to the payment of principal or interest by the U.S. Treasury, such as those issued by Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, are subject to greater credit risk than are U.S. Government securities supported by the U.S. Treasury, such as those issued by Ginnie Mae. Certain underlying funds invest in foreign securities, including securities of emerging market issuers. 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 market, economic, industrial, political, regulatory, geopolitical, environmental, public health, and other conditions. Investments in emerging markets can involve additional and greater risks than the risks associated with investments in developed foreign markets. Emerging markets can have less developed markets, greater custody and operational risk, less developed legal, regulatory, and accounting, and auditing systems, greater government involvement in the economy, greater risk of new or inconsistent government treatment of or restrictions on issuers and instruments, and greater political, social, and economic instability than developed markets.

The accounting policies of the underlying funds in which the fund invests are outlined in the underlying funds’ shareholder reports, which are available without charge by calling 1-800-225-2606, at mfs.com and on the Securities and Exchange Commission (SEC) web site at http://www.sec.gov. The underlying funds' shareholder reports are not covered by this report.

Investment Valuations — Open-end investment companies (underlying funds) are generally valued at their net asset value per share. The investments of underlying funds managed by the adviser are valued as described below. For purposes of this policy disclosure, “fund” also refers to the underlying funds in which the fund-of-funds invests.

Subject to its oversight, the fund's Board of Trustees has delegated primary responsibility for determining or causing to be determined the value of the fund’s investments to MFS as the fund's adviser, pursuant to the fund’s valuation policy and procedures which have been adopted by the adviser and approved by the Board. Effective September 8, 2022, and in accordance with Rule 2a-5 under the Investment Company Act of 1940, the Board of Trustees designated the adviser as the “valuation designee” of the fund. If the adviser, as valuation designee, determines that reliable market quotations are not readily available for an investment, the investment is valued at fair value as determined in good faith by the adviser in accordance with the adviser’s fair valuation policy and procedures.

Under the fund's valuation policy and procedures, equity securities, including restricted equity securities and equity securities sold short, are generally valued at the last sale or official closing price on their primary market or exchange as provided by a third-party pricing service. Equity securities, for which there were no sales reported that day, are generally valued at the last quoted daily bid

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Notes to Financial Statements - continued

quotation on their primary market or exchange as provided by a third-party pricing service. Equity securities sold short, for which there were no sales reported that day, are generally valued at the last quoted daily ask quotation on their primary market or exchange as provided by a third-party pricing service. Debt instruments and floating rate loans, including restricted debt instruments, are generally valued at an evaluated or composite bid as provided by a third-party pricing service. Debt instruments sold short are generally valued at an evaluated or composite mean as provided by a third-party pricing service. Short-term instruments with a maturity at issuance of 60 days or less may be valued at amortized cost, which approximates market value. Exchange-traded options are generally valued at the last sale or official closing price on their primary exchange as provided by a third-party pricing service. Exchange-traded options for which there were no sales reported that day are generally valued at the last daily bid quotation on their primary exchange as provided by a third-party pricing service. For put options, the position may be valued at the last daily ask quotation if there are no trades reported during the day. Options not traded on an exchange are generally valued at a broker/dealer bid quotation. Foreign currency options are generally valued at valuations provided by a third-party pricing service. Futures contracts are generally valued at last posted settlement price on their primary exchange as provided by a third-party pricing service. Futures contracts for which there were no trades that day for a particular position are generally valued at the closing bid quotation on their primary exchange as provided by a third-party pricing service. Forward foreign currency exchange contracts are generally valued at the mean of bid and asked prices for the time period interpolated from rates provided by a third-party pricing service for proximate time periods. Swap agreements are generally valued using valuations provided by a third-party pricing service, which for cleared swaps includes an evaluation of any trading activity at the clearinghouses. Open-end investment companies are generally valued at net asset value per share. The values of foreign securities and other assets and liabilities expressed in foreign currencies are converted to U.S. dollars using the mean of bid and asked prices for rates provided by a third-party pricing service.

Under the fund’s valuation policy and procedures, market quotations are not considered to be readily available for debt instruments, floating rate loans, and many types of derivatives. These investments are generally valued at fair value based on information from third-party pricing services or otherwise determined by the adviser in accordance with the adviser’s fair valuation policy and procedures. Securities and other assets generally valued on the basis of information from a third-party pricing service may also be valued at a broker/dealer bid quotation. In determining values, third-party pricing services can utilize both transaction data and market information such as yield, quality, coupon rate, maturity, type of issue, trading characteristics, spreads and other market data. An investment may also be valued at fair value if the adviser determines that the investment’s value has been materially affected by events occurring after the close of the exchange or market on which the investment is principally traded (such as foreign exchange or market) and prior to the determination of the fund’s net asset value, or after the halt of trading of a specific security where trading does not resume prior to the close of the exchange or market on which the security is principally traded. Events that occur after foreign markets close (such as developments in foreign markets and significant movements in the U.S. markets) and prior to the determination of the fund’s net asset value may be deemed to have a material effect on the value of securities traded in foreign markets. Accordingly, the fund’s foreign equity securities may often be valued at fair value. The adviser generally relies on third-party pricing services or other information (such as the correlation with price movements of similar securities in the same or other markets; the type, cost and investment characteristics of the security; the business and financial condition of the issuer; and trading and other market data) to assist in determining whether to fair value and at what value to fair value an investment. The value of an investment for purposes of calculating the fund’s net asset value can differ depending on the source and method used to determine value. When fair valuation is used, the value of an investment used to determine the fund’s net asset value may differ from quoted or published prices for the same investment. There can be no assurance that the fund could obtain the fair value assigned to an investment if it were to sell the investment at the same time at which the fund determines its net asset value per share.

Various inputs are used in determining the value of the fund's assets or liabilities. These inputs are categorized into three broad levels. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fund's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment. Level 1 includes unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 includes other significant observable market-based inputs (including quoted prices for similar securities, interest rates, prepayment speed, and credit risk). Level 3 includes significant unobservable inputs, which may include the adviser's own assumptions in determining the fair value of investments. The following is a summary of the levels used as of December 31, 2022 in valuing the fund's assets and liabilities:

Financial Instruments	Level 1	Level 2	Level 3	Total
Mutual Funds	$1,006,635,690	$—	$—	$1,006,635,690

For further information regarding security characteristics, see the Portfolio of Investments. Please refer to the underlying funds’ shareholder reports for further information regarding the levels used in valuing the underlying funds’ assets and liabilities.

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Notes to Financial Statements - continued

Derivatives — The fund does not invest in derivatives directly. The fund does invest in underlying funds that may use derivatives primarily to increase or decrease exposure to a particular market or segment of the market, or security, to increase or decrease interest rate or currency exposure, or as alternatives to direct investments. Derivatives are used for hedging or non-hedging purposes. While hedging can reduce or eliminate losses, it can also reduce or eliminate gains. When the underlying funds use derivatives as an investment to increase market exposure, or for hedging purposes, gains and losses from derivative instruments may be substantially greater than the derivative’s original cost.

Indemnifications — Under the fund's organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the fund. Additionally, in the normal course of business, the fund enters into agreements with service providers that may contain indemnification clauses. The fund's maximum exposure under these agreements is unknown as this would involve future claims that may be made against the fund that have not yet occurred.

The fund and/or the underlying funds may receive proceeds from litigation settlements. Any proceeds received from litigation involving portfolio holdings are reflected in the Statement of Operations in realized gain/loss if the security has been disposed of by the fund or in unrealized gain/loss if the security is still held by the fund. Any other proceeds from litigation not related to portfolio holdings are reflected as other income in the Statement of Operations.

Distributions to shareholders are recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from U.S. generally accepted accounting principles. Certain capital accounts in the financial statements are periodically adjusted for permanent differences in order to reflect their tax character. These adjustments have no impact on net assets or net asset value per share. Temporary differences which arise from recognizing certain items of income, expense, gain or loss in different periods for financial statement and tax purposes will reverse at some time in the future.

Book/tax differences primarily relate to wash sale loss deferrals.

The tax character of distributions declared to shareholders for the last two fiscal years is as follows:

	Year ended 12/31/22	Year ended 12/31/21
Ordinary income (including any short-term capital gains)	$22,417,778	$31,407,050
Long-term capital gains	119,759,517	55,693,397
Total distributions	$142,177,295	$87,100,447

The federal tax cost and the tax basis components of distributable earnings were as follows:

As of 12/31/22
Cost of investments	$972,826,233
Gross appreciation	124,258,839
Gross depreciation	(90,449,382)
Net unrealized appreciation (depreciation)	$33,809,457
Undistributed ordinary income	23,961,917
Undistributed long-term capital gain	63,160,763
Total distributable earnings (loss)	$120,932,137

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Notes to Financial Statements - continued

Multiple Classes of Shares of Beneficial Interest — The fund offers multiple classes of shares, which differ in their respective distribution and/or service fees. The fund's income, realized and unrealized gain (loss), and common expenses are allocated to shareholders based on the daily net assets of each class. Dividends are declared separately for each class. Differences in per share dividend rates are generally due to differences in separate class expenses. The fund’s distributions declared to shareholders as reported in the Statements of Changes in Net Assets are presented by class as follows:

	Year ended 12/31/22	Year ended 12/31/21
Initial Class	$1,045,404	$625,183
Service Class	141,131,891	86,475,264
Total	$142,177,295	$87,100,447

(3) Transactions with Affiliates

Investment Adviser — The fund has an investment advisory agreement with MFS to provide overall investment management and related administrative services and facilities to the fund. MFS receives no compensation under this agreement; however MFS receives management fees from the underlying MFS funds.

The investment adviser has agreed in writing to pay a portion of the fund’s operating expenses, excluding distribution and/or service fees, interest, taxes, extraordinary expenses, brokerage and transaction costs, and investment-related expenses such as fees and expenses associated with investments in investment companies and other similar investment vehicles such that fund operating expenses do not exceed 0.20% annually of the fund’s average daily net assets. This written agreement will continue until modified by the fund’s Board of Trustees, but such agreement will continue at least until April 30, 2024. For the year ended December 31, 2022, the fund’s actual operating expenses did not exceed the limit and therefore, the investment adviser did not pay any portion of the fund’s expenses related to this agreement.

Distributor — MFS Fund Distributors, Inc. (MFD), a wholly-owned subsidiary of MFS, is the distributor of shares of the fund. The Trustees have adopted a distribution plan for the Service Class shares pursuant to Rule 12b-1 under the Investment Company Act of 1940.

The fund's distribution plan provides that the fund will pay MFD distribution and/or service fees equal to 0.25% per annum of its average daily net assets attributable to Service Class shares as partial consideration for services performed and expenses incurred by MFD and financial intermediaries (including participating insurance companies that invest in the fund to fund variable annuity and variable life insurance contracts, sponsors of qualified retirement and pension plans that invest in the fund, and affiliates of these participating insurance companies and plan sponsors) in connection with the sale and distribution of the Service Class shares. MFD may subsequently pay all, or a portion, of the distribution and/or service fees to financial intermediaries.

Shareholder Servicing Agent — MFS Service Center, Inc. (MFSC), a wholly-owned subsidiary of MFS, receives a fee from the fund for its services as shareholder servicing agent. For the year ended December 31, 2022, the fee was $16,712, which equated to 0.0015% annually of the fund's average daily net assets. MFSC also receives reimbursement from the fund for out-of-pocket expenses paid by MFSC on behalf of the fund. For the year ended December 31, 2022, these costs amounted to $171.

Administrator — MFS provides certain financial, legal, shareholder communications, compliance, and other administrative services to the fund. Under an administrative services agreement, the fund reimburses MFS the costs incurred to provide these services. The fund pays an annual fixed amount of $17,500. The administrative services fee incurred for the year ended December 31, 2022 was equivalent to an annual effective rate of 0.0016% of the fund's average daily net assets.

Trustees’ and Officers’ Compensation — The fund pays compensation to independent Trustees in the form of a retainer, attendance fees, and additional compensation to Board and Committee chairpersons. The fund does not pay compensation directly to Trustees or officers of the fund who are also officers of the investment adviser, all of whom receive remuneration from MFS for their services to the fund. Certain officers and Trustees of the fund are officers or directors of MFS, MFD, and MFSC.

Other — The fund invests in the MFS Institutional Money Market Portfolio which is managed by MFS and seeks current income consistent with preservation of capital and liquidity. This money market fund does not pay a management fee to MFS but does incur investment and operating costs.

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Notes to Financial Statements - continued

(4) Portfolio Securities

For the year ended December 31, 2022, purchases and sales of shares of underlying funds, excluding the MFS Institutional Money Market Portfolio, aggregated $28,193,221 and $164,323,252, respectively.

(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. Transactions in fund shares were as follows:

	Year ended 12/31/22		Year ended 12/31/21
	Shares	Amount	Shares	Amount
Shares sold
Initial Class	13,366	$158,065	100,307	$1,443,545
Service Class	855,546	10,416,049	306,006	4,390,844
	868,912	$10,574,114	406,313	$5,834,389
Shares issued to shareholders in reinvestment of distributions
Initial Class	96,797	$1,045,404	43,965	$625,183
Service Class	13,043,613	141,131,891	6,076,969	86,475,264
	13,140,410	$142,177,295	6,120,934	$87,100,447
Shares reacquired
Initial Class	(29,785)	$(364,660)	(70,317)	$(1,014,109)
Service Class	(12,104,547)	(144,178,840)	(15,563,681)	(223,876,260)
	(12,134,332)	$(144,543,500)	(15,633,998)	$(224,890,369)
Net change
Initial Class	80,378	$838,809	73,955	$1,054,619
Service Class	1,794,612	7,369,100	(9,180,706)	(133,010,152)
	1,874,990	$8,207,909	(9,106,751)	$(131,955,533)

(6) Line of Credit

The fund and certain other funds managed by MFS participate in a $1.45 billion unsecured committed line of credit of which $1.2 billion is reserved for use by the fund and certain other MFS U.S. funds. The line of credit is provided by a syndicate of banks under a credit agreement. Borrowings may be made for temporary financing needs. Interest is charged to each fund, based on its borrowings, generally at a rate equal to the highest of 1) Daily Simple SOFR (Secured Overnight Financing Rate) plus 0.10%, 2) the Federal Funds Effective Rate, or 3) the Overnight Bank Funding Rate, each plus an agreed upon spread. A commitment fee, based on the average daily unused portion of the committed line of credit, is allocated among the participating funds. The line of credit expires on March 16, 2023 unless extended or renewed. In addition, the fund and other funds managed by MFS have established unsecured uncommitted borrowing arrangements with certain banks for temporary financing needs. Interest is charged to each fund, based on its borrowings, at rates equal to customary reference rates plus an agreed upon spread. For the year ended December 31, 2022, the fund’s commitment fee and interest expense were $5,619 and $0, respectively, and are included in “Miscellaneous” expense in the Statement of Operations.

(7) Investments in Affiliated Issuers

An affiliated issuer may be considered one in which the fund owns 5% or more of the outstanding voting securities, or a company which is under common control. For the purposes of this report, the following were affiliated issuers:

Affiliated Issuers	Beginning Value	Purchases	Sales Proceeds	Realized Gain (Loss)	Change in Unrealized Appreciation or Depreciation	Ending Value
MFS Global Governments Portfolio	$66,714,569	$1,406,902	$5,531,510	$(1,293,942)	$(10,713,349)	$50,582,670
MFS Global Real Estate Portfolio	42,050,156	5,808,061	3,835,590	838,874	(14,494,127)	30,367,374
MFS Government Securities Portfolio	134,944,096	2,507,471	19,436,781	(3,712,253)	(14,136,021)	100,166,512

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Notes to Financial Statements - continued

Affiliated Issuers − continued	Beginning Value	Purchases	Sales Proceeds	Realized Gain (Loss)	Change in Unrealized Appreciation or Depreciation	Ending Value
MFS Growth Series	$122,716,807	$20,423,476	$4,604,257	$(1,481,736)	$(48,858,550)	$88,195,740
MFS High Yield Portfolio	68,185,130	3,112,432	10,882,836	(2,463,530)	(7,638,003)	50,313,193
MFS Inflation-Adjusted Bond Portfolio	67,626,116	8,108,649	5,490,491	(321,212)	(19,412,396)	50,510,666
MFS Institutional Money Market Portfolio	1,500,980	6,124,838	6,890,164	124	128	735,906
MFS International Growth Portfolio	41,247,180	2,251,754	4,841,204	355,444	(8,599,050)	30,414,124
MFS International Intrinsic Value Portfolio	41,185,739	3,554,133	2,938,902	19,066	(11,393,545)	30,426,491
MFS Limited Maturity Portfolio	54,135,043	1,112,691	11,835,387	(558,733)	(2,650,549)	40,203,065
MFS Mid Cap Growth Series	96,354,427	17,579,361	5,081,710	(2,119,238)	(36,440,099)	70,292,741
MFS Mid Cap Value Portfolio	97,152,435	7,509,531	18,792,794	3,184,210	(18,275,149)	70,778,233
MFS New Discovery Series	18,898,498	7,915,810	1,090,712	(908,653)	(9,858,686)	14,956,257
MFS New Discovery Value Portfolio	20,681,954	3,717,032	3,458,860	603,252	(6,340,280)	15,203,098
MFS Research International Portfolio	96,117,925	3,765,771	8,723,082	204,737	(20,133,544)	71,231,807
MFS Research Series	110,061,530	12,112,146	11,716,214	2,584,485	(32,631,394)	80,410,553
MFS Total Return Bond Series	162,364,517	5,560,395	20,409,554	(2,667,422)	(24,242,755)	120,605,181
MFS Value Series	124,350,782	7,564,858	25,653,382	6,899,101	(21,919,280)	91,242,079
	$1,366,287,884	$120,135,311	$171,213,430	$(837,426)	$(307,736,649)	$1,006,635,690

Affiliated Issuers	Dividend Income	Capital Gain Distributions
MFS Global Governments Portfolio	$837,604	$—
MFS Global Real Estate Portfolio	904,377	1,991,174
MFS Government Securities Portfolio	2,258,498	—
MFS Growth Series	490,724	10,955,178
MFS High Yield Portfolio	3,097,420	—
MFS Inflation-Adjusted Bond Portfolio	2,807,776	2,976,291
MFS Institutional Money Market Portfolio	15,272	—
MFS International Growth Portfolio	375,641	1,756,417
MFS International Intrinsic Value Portfolio	386,891	1,341,379
MFS Limited Maturity Portfolio	874,576	170,838
MFS Mid Cap Growth Series	—	11,053,167
MFS Mid Cap Value Portfolio	1,876,159	5,320,825
MFS New Discovery Series	1,653,184	3,466,655
MFS New Discovery Value Portfolio	1,576,535	2,061,078
MFS Research International Portfolio	2,492,419	752,754
MFS Research Series	1,764,400	9,994,167
MFS Total Return Bond Series	3,644,496	1,535,910
MFS Value Series	1,859,520	5,541,200
	$26,915,492	$58,917,033

(8) LIBOR Transition

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that currently rely on LIBOR to determine interest rates and this could have an adverse impact on the fund's performance. With respect to the fund's accounting for investments, including investments in certain debt instruments and derivatives, as well as borrowings by the fund and any other contractual arrangements of the fund that undergo reference rate-related modifications as a result of the transition, management will rely upon the relief provided by FASB Codification Topic 848 – Reference Rate Reform (Topic 848). The guidance in Topic 848 permits the fund to account for those modified contracts as a continuation of the existing contracts. Management is still evaluating the impact to the fund of the June 30, 2023 planned discontinuation of the more commonly used U.S. dollar LIBOR settings.

(9) Russia and Ukraine Conflict

The market disruptions, which began in late February 2022, associated with geopolitical events related to the conflict between Russia and Ukraine may adversely affect the value of the fund’s assets and thus the fund’s performance. Management continues to monitor these events and to evaluate the related impacts, if any, to the fund.

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Report of Independent Registered Public Accounting Firm

To the Board of Trustees of MFS Variable Insurance Trust III and the Shareholders of MFS Moderate Allocation Portfolio:

Opinion on the Financial Statements and Financial Highlights

We have audited the accompanying statement of assets and liabilities of MFS Moderate Allocation Portfolio (the “Fund”), including the portfolio of investments, as of December 31, 2022, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of December 31, 2022, and 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 five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund's financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. 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, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of December 31, 2022, by correspondence with the transfer agent. We believe that our audits provide a reasonable basis for our opinion.

DELOITTE & TOUCHE LLP

Boston, Massachusetts
February 15, 2023

We have served as the auditor of one or more of the MFS investment companies since 1924.

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Trustees and Officers — Identification and Background

The Trustees and Officers of the Trust, as of February 1, 2023, are listed below, together with their principal occupations during the past five years. (Their titles may have varied during that period.) The address of each Trustee and Officer is 111 Huntington Avenue, Boston, Massachusetts 02199-7618.

Name, Age	Position(s) Held with Fund	Trustee/Officer Since^(h)	Number of MFS Funds overseen by the Trustee	Principal Occupations During the Past Five Years	Other Directorships During the Past Five Years ^(j)
INTERESTED TRUSTEE
Michael W. Roberge ^(k) (age 56)	Trustee	January 2021	136	Massachusetts Financial Services Company, Chairman (since January 2021); Chief Executive Officer (since January 2017); Director; Chairman of the Board (since January 2022); President (until December 2018); Chief Investment Officer (until December 2018)	N/A
INDEPENDENT TRUSTEES
John P. Kavanaugh (age 68)	Trustee and Chair of Trustees	January 2009	136	Private investor	N/A
Steven E. Buller (age 71)	Trustee	February 2014	136	Private investor	N/A
John A. Caroselli (age 68)	Trustee	March 2017	136	Private investor; JC Global Advisors, LLC (management consulting), President (since 2015)	N/A
Maureen R. Goldfarb (age 67)	Trustee	January 2009	136	Private investor	N/A
Peter D. Jones (age 67)	Trustee	January 2019	136	Private investor	N/A
James W. Kilman, Jr. (age 61)	Trustee	January 2019	136	Burford Capital Limited (finance and investment management), Senior Advisor (since May 3, 2021), Chief Financial Officer (2019 - May 2, 2021); KielStrand Capital LLC (family office), Chief Executive Officer (since 2016)	Alpha-En Corporation, Director (2016-2019)
Clarence Otis, Jr. (age 66)	Trustee	March 2017	136	Private investor	VF Corporation, Director; Verizon Communications, Inc., Director; The Travelers Companies, Director
Maryanne L. Roepke (age 66)	Trustee	May 2014	136	Private investor	N/A
Laurie J. Thomsen (age 65)	Trustee	March 2005	136	Private investor	The Travelers Companies, Director; Dycom Industries, Inc., Director

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MFS Moderate Allocation Portfolio

Trustees and Officers - continued

Name, Age	Position(s) Held with Fund	Trustee/Officer Since^(h)	Number of MFS Funds for which the Person is an Officer	Principal Occupations During the Past Five Years
OFFICERS
Christopher R. Bohane ^(k) (age 49)	Assistant Secretary and Assistant Clerk	July 2005	136	Massachusetts Financial Services Company, Senior Vice President and Senior Managing Counsel
Kino Clark ^(k) (age 54)	Assistant Treasurer	January 2012	136	Massachusetts Financial Services Company, Vice President
John W. Clark, Jr. ^(k) (age 55)	Assistant Treasurer	April 2017	136	Massachusetts Financial Services Company, Vice President
David L. DiLorenzo ^(k) (age 54)	President	July 2005	136	Massachusetts Financial Services Company, Senior Vice President
Heidi W. Hardin ^(k) (age 55)	Secretary and Clerk	April 2017	136	Massachusetts Financial Services Company, Executive Vice President and General Counsel
Brian E. Langenfeld ^(k) (age 49)	Assistant Secretary and Assistant Clerk	June 2006	136	Massachusetts Financial Services Company, Vice President and Managing Counsel
Rosa E. Licea-Mailloux ^(k) (age 46)	Chief Compliance Officer	March 2022	136	Massachusetts Financial Services Company, Vice President (since 2018); Director of Corporate Compliance (2018-2021), Senior Director Compliance (2021-2022), Senior Managing Director of North American Compliance & Chief Compliance Officer (since March 2022); Natixis Investment Managers (investment management), Funds Chief Compliance Officer, Deputy General Counsel & Senior Vice President (until 2018)
Amanda S. Mooradian ^(k) (age 43)	Assistant Secretary and Assistant Clerk	September 2018	136	Massachusetts Financial Services Company, Assistant Vice President and Senior Counsel
Susan A. Pereira ^(k) (age 52)	Assistant Secretary and Assistant Clerk	July 2005	136	Massachusetts Financial Services Company, Vice President and Managing Counsel
Kasey L. Phillips ^(k) (age 52)	Assistant Treasurer	September 2012	136	Massachusetts Financial Services Company, Vice President
Matthew A. Stowe ^(k) (age 48)	Assistant Secretary and Assistant Clerk	October 2014	136	Massachusetts Financial Services Company, Vice President and Senior Managing Counsel
William B. Wilson ^(k) (age 40)	Assistant Secretary and Assistant Clerk	October 2022	136	Massachusetts Financial Services Company, Assistant Vice President and Counsel
James O. Yost ^(k) (age 62)	Treasurer	September 1990	136	Massachusetts Financial Services Company, Senior Vice President

(h)	Date first appointed to serve as Trustee/Officer of an MFS Fund. Each Trustee has served continuously since appointment unless indicated otherwise. From January 2012 through December 2016, Messrs. DiLorenzo and Yost served as Treasurer and Deputy Treasurer of the Funds, respectively.

(j)	Directorships or trusteeships of companies required to report to the Securities and Exchange Commission (i.e., “public companies”).

(k)

“Interested person” of the Trust within the meaning of the Investment Company Act of 1940 (referred to as the 1940 Act), which is the principal federal law governing investment companies like the fund, as a result of a position with MFS. The address of MFS is 111 Huntington Avenue, Boston, Massachusetts 02199-7618.

Each Trustee (other than Messrs. Jones, Kilman and Roberge) has been elected by shareholders and each Trustee and Officer holds office until his or her successor is chosen and qualified or until his or her earlier death, resignation, retirement or removal. Mr. Roberge became a Trustee of the Funds on January 1, 2021 and Messrs. Jones and Kilman became Trustees of the Funds on January 1, 2019. The Trust does not hold annual meetings for the purpose of electing Trustees, and Trustees are not elected for fixed terms. Under the terms of the Board's retirement policy, an Independent Trustee shall retire at the end of the calendar year in which he or she reaches the earlier of 75 years of age or 15 years of service on the Board (or, in the case of any Independent Trustee who joined the Board prior to 2015, 20 years of service on the Board).

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MFS Moderate Allocation Portfolio

Trustees and Officers - continued

Messrs. Buller, Kilman and Otis and Ms. Roepke are members of the Trust’s Audit Committee.

Each of the Interested Trustees and certain Officers hold comparable officer positions with certain affiliates of MFS.

The Statement of Additional Information for a Fund includes further information about the Trustees and is available without charge upon request by calling 1-800-225-2606.

Investment Adviser	Custodian
Massachusetts Financial Services Company 111 Huntington Avenue Boston, MA 02199-7618	State Street Bank and Trust Company 1 Lincoln Street Boston, MA 02111-2900

Distributor	Independent Registered Public Accounting Firm
MFS Fund Distributors, Inc. 111 Huntington Avenue Boston, MA 02199-7618	Deloitte & Touche LLP 200 Berkeley Street Boston, MA 02116

Portfolio Manager(s)
Joseph Flaherty Natalie Shapiro

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MFS Moderate Allocation Portfolio

Board Review of Investment Advisory Agreement

MFS Moderate Allocation Portfolio

The Investment Company Act of 1940 requires that both the full Board of Trustees and a majority of the non-interested (“independent”) Trustees, voting separately, annually approve the continuation of the Fund’s investment advisory agreement with MFS. The Trustees consider matters bearing on the Fund and its advisory arrangements at their meetings throughout the year, including a review of performance data at each regular meeting. In addition, the independent Trustees met several times over the course of three months beginning in May and ending in July, 2022 (“contract review meetings”) for the specific purpose of considering whether to approve the continuation of the investment advisory agreement for the Fund and the other investment companies that the Board oversees (the “MFS Funds”). The independent Trustees were assisted in their evaluation of the Fund’s investment advisory agreement by independent legal counsel, from whom they received separate legal advice and with whom they met separately from MFS during various contract review meetings. The independent Trustees were also assisted in this process by an independent consultant who was retained by and reported to the independent Trustees.

In connection with their deliberations regarding the continuation of the investment advisory agreement, the Trustees, including the independent Trustees, considered such information and factors as they believed, in light of the legal advice furnished to them and their own business judgment, to be relevant. The investment advisory agreement for the Fund was considered separately, although the Trustees also took into account the common interests of all MFS Funds in their review. As described below, the Trustees considered the nature, quality, and extent of the various investment advisory, administrative, and shareholder services performed by MFS under the existing investment advisory agreement and other arrangements with the Fund.

In connection with their contract review meetings, the Trustees received and relied upon materials that included, among other items: (i) information provided by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent third party, on the investment performance of the Fund for various time periods ended December 31, 2021 and the investment performance of a group of funds with substantially similar investment classifications/objectives (the “Broadridge performance universe”), (ii) information provided by Broadridge on the Fund’s fees and expenses and the fees and expenses of comparable funds identified by Broadridge as well as all other funds in the same investment classification/category (the “Broadridge expense group and universe”), (iii) information as to whether and to what extent applicable expense waivers and reimbursements are observed for the Fund, (iv) information regarding MFS’ financial results and financial condition, including MFS’ and certain of its affiliates’ estimated profitability from services performed for the Fund and the MFS Funds as a whole, and compared to MFS’ institutional business, (v) MFS’ views regarding the outlook for the mutual fund industry and the strategic business plans of MFS, (vi) descriptions of various functions performed by MFS for the Funds, such as compliance monitoring and portfolio trading practices, and (vii) information regarding the overall organization of MFS, including information about MFS’ senior management and other personnel providing investment advisory, administrative and other services to the Fund and the other MFS Funds. The comparative performance, fee and expense information prepared and provided by Broadridge was not independently verified and the independent Trustees did not independently verify any information provided to them by MFS.

The Trustees’ conclusion as to the continuation of the investment advisory agreement was based on a comprehensive consideration of all information provided to the Trustees and not the result of any single factor. Some of the factors that figured particularly in the Trustees’ deliberations are described below, although individual Trustees may have evaluated the information presented differently from one another, giving different weights to various factors. It is also important to recognize that the fee arrangements for the Fund and other MFS Funds are the result of years of review and discussion between the independent Trustees and MFS, that certain aspects of such arrangements may receive greater scrutiny in some years than in others, and that the Trustees’ conclusions may be based, in part, on their consideration of these same arrangements during the course of the year and in prior years.

Based on information provided by Broadridge and MFS, the Trustees reviewed the Fund’s total return investment performance as well as the Broadridge performance universe over various time periods. The Trustees placed particular emphasis on the total return performance of the Fund’s Initial Class shares in comparison to the performance of funds in its Broadridge performance universe over the five-year period ended December 31, 2021, which the Trustees believed was a long enough period to reflect differing market conditions. The total return performance of the Fund’s Initial Class shares was in the 2nd quintile relative to the other funds in the universe for this five-year period (the 1st quintile being the best performers and the 5th quintile being the worst performers). The total return performance of the Fund’s Initial Class shares was in the 4th quintile for the one-year period and the 2nd quintile for the three-year period ended December 31, 2021 relative to the Broadridge performance universe. Because of the passage of time, these performance results may differ from the performance results for more recent periods, including those shown elsewhere in this report.

In the course of their deliberations, the Trustees took into account information provided by MFS in connection with the contract review meetings, as well as during investment review meetings conducted with portfolio management personnel during the course of the year regarding the Fund’s performance. After reviewing these and related factors, the Trustees concluded, within the context of their overall conclusions regarding the investment advisory agreement, that they were satisfied with MFS’ responses and efforts relating to investment performance.

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MFS Moderate Allocation Portfolio

Board Review of Investment Advisory Agreement - continued

The Trustees considered that MFS does not charge an advisory fee for providing investment advisory services to the Fund, but that the Fund pays its pro rata share of the advisory fees paid by the underlying funds in which it invests (the “Underlying Funds”).

In assessing the reasonableness of the Fund’s expenses, the Trustees considered, among other information, the Fund’s total expense ratio of the Fund’s Initial Class shares as a percentage of average daily net assets and the total expense ratios of the Broadridge expense group based on information provided by Broadridge. The Trustees considered that MFS currently observes an expense limitation for the Fund, which may not be changed without the Trustees’ approval. The Trustees also considered that, according to the data provided by Broadridge (which takes into account any expense limitations that were in effect during the Fund’s last fiscal year), the Fund’s total expense ratio was lower than the Broadridge expense group median. Because the Fund does not pay an advisory fee, the Trustees did not consider the extent to which economies of scale would be realized due to the Fund’s growth of assets, whether fee levels reflect economies of scale for shareholders, or the fees paid by similar funds to other investment advisers or by similar clients of MFS.

The Trustees also considered information prepared by MFS relating to MFS’ costs and profits with respect to the Fund, the MFS Funds considered as a group, and other investment companies and accounts advised by MFS, as well as MFS’ methodologies used to determine and allocate its costs to the MFS Funds, the Fund and other accounts and products for purposes of estimating profitability.

In addition, the Trustees considered MFS’ resources and related efforts to continue to retain, attract and motivate capable personnel to serve the Fund. The Trustees also considered current and developing conditions in the financial services industry, including the presence of large and well-capitalized companies which are spending, and appear to be prepared to continue to spend, substantial sums to engage personnel and to provide services to competing investment companies. In this regard, the Trustees also considered the financial resources of MFS and its ultimate parent, Sun Life Financial Inc. The Trustees also considered the advantages and possible disadvantages to the Fund of having an adviser that also serves other investment companies as well as other accounts.

The Trustees also considered the nature, quality, cost, and extent of administrative, transfer agency, and distribution services provided to the Fund by MFS and its affiliates under agreements and plans other than the investment advisory agreement, including any 12b-1 fees the Fund pays to MFS Fund Distributors, Inc., an affiliate of MFS. The Trustees also considered the nature, extent and quality of certain other services MFS performs or arranges for on the Fund’s or the Underlying Funds’ behalf, which may include securities lending programs, directed expense payment programs, class action recovery programs, and MFS’ interaction with third-party service providers, principally custodians and sub-custodians. The Trustees concluded that the various non-advisory services provided by MFS and its affiliates on behalf of the Fund were satisfactory.

The Trustees considered so-called “fall-out benefits” to MFS such as reputational value derived from serving as investment manager to the MFS Funds. The Trustees also considered that MFS discontinued its historic practice of obtaining investment research from portfolio brokerage commissions paid by certain MFS Funds effective January 2018, and directly pays or voluntarily reimburses a Fund, if applicable, for the costs of external research acquired through the use of the Fund’s portfolio brokerage commissions.

Based on their evaluation of factors that they deemed to be material, including those factors described above, the Board of Trustees, including the independent Trustees, concluded that the Fund’s investment advisory agreement with MFS should be continued for an additional one-year period, commencing August 1, 2022.

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MFS Moderate Allocation Portfolio

Proxy Voting Policies and Information

MFS votes proxies on behalf of the fund pursuant to proxy voting policies and procedures that are available without charge, upon request, by calling 1-800-225-2606, by visiting mfs.com/proxyvoting, or by visiting the SEC’s Web site at http://www.sec.gov.

Information regarding how the fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is available by August 31 of each year without charge by visiting mfs.com/proxyvoting, or by visiting the SEC’s Web site at http://www.sec.gov.

Quarterly Portfolio Disclosure

The fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The fund’s Form N-PORT reports are available on the SEC’s Web site at http://www.sec.gov. A shareholder can obtain the portfolio holdings report for the first and third quarters of the fund's fiscal year at mfs.com/vit3 by choosing the fund's name and then scrolling to the “Resources” section and clicking on the “Prospectus and Reports” tab.

FURTHER INFORMATION

From time to time, MFS may post important information about the fund or the MFS Funds on the MFS Web site (mfs.com). This information is available at https://www.mfs.com/announcements or at mfs.com/vit3 by choosing the fund's name and then scrolling to the “Resources” section and clicking on the “Announcements” tab, if any.

Information About Fund Contracts and Legal Claims

The fund has entered into contractual arrangements with an investment adviser, administrator, distributor, shareholder servicing agent, and custodian who each provide services to the fund. Unless expressly stated otherwise, shareholders are not parties to, or intended beneficiaries of these contractual arrangements, and these contractual arrangements are not intended to create any shareholder right to enforce them against the service providers or to seek any remedy under them against the service providers, either directly or on behalf of the fund.

Under the Trust’s By-Laws and Declaration of Trust, any claims asserted against or on behalf of the MFS Funds, including claims against Trustees and Officers, must be brought in state and federal courts located within the Commonwealth of Massachusetts.

Federal Tax Information (unaudited)

The following information is provided pursuant to provisions of the Internal Revenue Code.

The fund designates $131,736,000 as capital gain dividends paid during the fiscal year.

For corporate shareholders, 19.50% of the ordinary income dividends paid during the fiscal year qualify for the corporate dividends received deduction.

The fund intends to pass through the maximum amount allowable as Section 163(j) Interest Dividends as defined in Treasury Regulation §1.163(j)-1(b).

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rev. 3/16

FACTS

WHAT DOES MFS DO WITH YOUR PERSONAL INFORMATION?

Why?

Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.

What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include:
	• Social Security number and account balances
	• Account transactions and transaction history
	• Checking account information and wire transfer instructions
	When you are no longer our customer, we continue to share your information as described in this notice.

How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MFS chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MFS share?	Can you limit this sharing?
For our everyday business purposes – such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes – to offer our products and services to you	No	We don't share
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes – information about your transactions and experiences	No	We don't share
For our affiliates' everyday business purposes – information about your creditworthiness	No	We don't share
For nonaffiliates to market to you	No	We don't share

Questions?

Call 800-225-2606 or go to mfs.com.

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Page 2

Who we are
Who is providing this notice?	MFS Funds, MFS Investment Management, MFS Institutional Advisors, Inc., and MFS Heritage Trust Company.

What we do
How does MFS protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include procedural, electronic, and physical safeguards for the protection of the personal information we collect about you.
How does MFS collect my personal information?	We collect your personal information, for example, when you
	• open an account or provide account information
	• direct us to buy securities or direct us to sell your securities
	• make a wire transfer
	We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only
	• sharing for affiliates' everyday business purposes – information about your creditworthiness
	• affiliates from using your information to market to you
	• sharing for nonaffiliates to market to you
	State laws and individual companies may give you additional rights to limit sharing.

Definitions
Affiliates	Companies related by common ownership or control. They can be financial and nonfinancial companies.
	• MFS does not share personal information with affiliates, except for everyday business purposes as described on page one of this notice.
Nonaffiliates	Companies not related by common ownership or control. They can be financial and nonfinancial companies.
	• MFS does not share with nonaffiliates so they can market to you.
Joint marketing	A formal agreement between nonaffiliated financial companies that together market financial products or services to you.
	• MFS doesn't jointly market.

Other important information

If you own an MFS product or receive an MFS service in the name of a third party such as a bank or broker-dealer, their privacy policy may apply to you instead of ours.

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Annual Report

December 31, 2022

MFS^® Blended Research^®
Small Cap Equity Portfolio

MFS^® Variable Insurance Trust III

VSC-ANN

MFS^® Blended Research^® Small Cap Equity Portfolio

CONTENTS

The 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.

NOT FDIC INSURED • MAY LOSE VALUE • NO BANK OR CREDIT UNION GUARANTEE •

NOT A DEPOSIT • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY OR NCUA/NCUSIF

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MFS Blended Research Small Cap Equity Portfolio

LETTER FROM THE CHAIR AND CEO

Dear Shareholders:

During times of market transition, it is important to have a deep understanding of company fundamentals, and we have built our unique global research platform to do just that.

Respectfully,

Michael W. Roberge

Chair and Chief Executive Officer

MFS Investment Management

February 15, 2023

The opinions expressed in this letter are subject to change and may not be relied upon for investment advice. No forecasts can be guaranteed.

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MFS Blended Research Small Cap Equity Portfolio

Portfolio Composition

Portfolio structure

Top ten holdings

Prestige Consumer Healthcare, Inc.	1.9%
Portland General Electric Co.	1.8%
Reinsurance Group of America, Inc.	1.7%
Box, Inc., “A”	1.6%
Grand Canyon Education, Inc.	1.5%
Cathay General Bancorp, Inc.	1.5%
SLM Corp.	1.5%
Magnolia Oil & Gas Corp., “A”	1.5%
Silicon Laboratories, Inc.	1.4%
Umpqua Holdings Corp.	1.4%

GICS equity sectors (g)

Health Care	17.2%
Financials	16.6%
Industrials	16.0%
Information Technology	13.0%
Consumer Discretionary	11.8%
Real Estate	7.5%
Energy	6.3%
Materials	3.9%
Communication Services	2.4%
Utilities	2.3%
Consumer Staples	2.1%

(g)

The Global Industry Classification Standard (GICS^®) was developed by and/or is the exclusive property of MSCI, Inc. and S&P Global Market Intelligence Inc. (“S&P Global Market Intelligence”). GICS is a service mark of MSCI and S&P Global Market Intelligence and has been licensed for use by MFS. MFS has applied its own internal sector/industry classification methodology for equity securities and non-equity securities that are unclassified by GICS.

Cash & Cash Equivalents includes any cash, investments in money market funds, short-term securities, and other assets less liabilities. Please see the Statement of Assets and Liabilities for additional information related to the fund’s cash position and other assets and liabilities.

Percentages are based on net assets as of December 31, 2022.

The portfolio is actively managed and current holdings may be different.

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MFS Blended Research Small Cap Equity Portfolio

Management Review

Summary of Results

For the twelve months ended December 31, 2022, Initial Class shares of the MFS Blended Research Small Cap Equity Portfolio (fund) provided a total return of -18.37%, while Service Class shares of the fund provided a total return of -18.56%. These compare with a return of -20.44% over the same period for the fund’s benchmark, the Russell 2000^® Index.

Market Environment

Contributors to Performance

Security selection within both the consumer discretionary and information technology sectors contributed to the fund’s performance relative to the Russell 2000^® Index. Within the consumer discretionary sector, the fund’s holdings of strong-performing educational services provider Grand Canyon Education(b) aided relative returns. The stock price of Grand Canyon Education rose as the company reported higher-than-expected revenue and increased its traditional campus student enrollment. Within the information technology sector, the fund’s overweight position in enterprise content platform Box also bolstered relative returns. The stock price of Box advanced as the company posted strong operating results and expanded its line of comprehensive suite products.

Stock selection in the financials sector further helped relative performance, driven by the fund’s holdings of reinsurer Reinsurance Group of America(b).

Elsewhere, the fund’s overweight positions in coal mining company Peabody Energy(h), oil and gas exploration company Magnolia Oil & Gas, sweet goods producer Hostess Brands, oil and gas technology solutions and equipment provider ChampionX and coal mining company CONSOL Energy aided relative returns. The stock price of ChampionX rose as the company delivered above-consensus earnings, driven by higher-than-expected revenues in its production chemical technologies segment. The company also announced an increase in its share buyback program, which further supported the share price. Additionally, the fund’s holdings of strong-performing chemical company Chemours(b) and industrial and specialty chemicals distributor Univar(b) also helped relative results.

Detractors from Performance

Security selection within both the health care and real estate sectors detracted from the fund’s relative performance. Within the health care sector, the fund’s holdings of life sciences company Maravai Lifesciences Holdings(b) and clinical development company Syneos Health(b) hindered relative returns. The stock price of Syneos Health fell as the company reported lower-than-expected revenue and depressed margins. The fund’s overweight positions in immune medicine developer Adaptive Biotechnologies, direct-to-consumer healthcare apparel seller FIGS, regenerative medical company Organogenesis Holdings and medical technology

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MFS Blended Research Small Cap Equity Portfolio

Management Review - continued

company Bioventus further weighed on relative results. Within the real estate sector, the fund’s overweight positions in industrial property manager Innovative Industrial Properties(h) and self-storage property manager National Storage Affiliates Trust detracted from relative performance. Although Innovative Industrial Properties released financial results that beat estimates, the stock price declined after the company announced a dividend cut.

Elsewhere, the fund’s overweight position in event management services provider Eventbrite, and holdings of poor-performing digital outsourcing services provider TaskUs(b), hindered relative returns. The stock price of TaskUs fell as the company reduced its forward guidance and shed clients due to a softening of the cryptocurrency market.

Respectfully,

Portfolio Manager(s)

Jim Fallon, Matt Krummell, Jonathan Sage, and Jed Stocks

(b)	Security is not a benchmark constituent.

(h)	Security was not held in the portfolio at period end.

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MFS Blended Research Small Cap Equity Portfolio

Performance Summary Through 12/31/22

Growth of a Hypothetical $10,000 Investment

Total Returns through 12/31/22

Average annual total returns

Share Class	Class Inception Date	1-yr	5-yr	10-yr
Initial Class	7/17/00	(18.37)%	5.41%	10.49%
Service Class	5/01/06	(18.56)%	5.14%	10.21%

Comparative benchmark(s)

Russell 2000^® Index (f)

(20.44)%

4.13%

9.01%

(f)	Source: FactSet Research Systems Inc.

Benchmark Definition(s)

Russell 2000^® Index^(h) - constructed to provide a comprehensive barometer for securities in the small-cap segment of the U.S. equity universe. The index includes 2,000 of the smallest U.S. companies based on total market capitalization, representing approximately 10% of the investable U.S. equity market.

It is not possible to invest directly in an index.

(h)

Frank Russell Company (“Russell”) is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. Russell^® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes and/or Russell ratings or underlying data and no party may rely on any Russell Indexes and/or Russell ratings and/or underlying data contained in this document. No further distribution of Russell Data is permitted without Russell's express written consent. Russell does not promote, sponsor, or endorse the content of this document.

Notes to Performance Summary

Average annual total return represents the average annual change in value for each share class for the periods presented.

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MFS Blended Research Small Cap Equity Portfolio

Performance Summary – continued

From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.

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MFS Blended Research Small Cap Equity Portfolio

Expense Table

Fund expenses borne by the shareholders during the period,
July 1, 2022 through December 31, 2022

As a shareholder of the fund, you incur ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2022 through December 31, 2022.

Actual Expenses

Hypothetical Example for Comparison Purposes

Share Class		Annualized Expense Ratio	Beginning Account Value 7/01/22	Ending Account Value 12/31/22	Expenses Paid During Period (p) 7/01/22-12/31/22
Initial Class	Actual	0.54%	$1,000.00	$1,023.61	$2.75
Initial Class	Hypothetical (h)	0.54%	$1,000.00	$1,022.48	$2.75
Service Class	Actual	0.80%	$1,000.00	$1,022.33	$4.08
Service Class	Hypothetical (h)	0.80%	$1,000.00	$1,021.17	$4.08

(h)	5% class return per year before expenses.

(p)	“Expenses Paid During Period” are equal to each class's annualized expense ratio, as shown above, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

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MFS Blended Research Small Cap Equity Portfolio

Portfolio of Investments − 12/31/22

The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.

Issuer	Shares/Par	Value ($)
Common Stocks – 99.1%
Aerospace & Defense – 0.9%
CACI International, Inc., “A” (a)	2,495	$ 749,972
Apparel Manufacturers – 1.6%
FIGS, Inc. (a)	34,465	$ 231,949
Skechers USA, Inc., “A” (a)	25,061	1,051,309
		$1,283,258
Automotive – 2.2%
REV Group, Inc.	41,561	$ 524,500
Titan International, Inc. (a)	31,406	481,140
Visteon Corp. (a)	5,931	775,953
		$1,781,593
Biotechnology – 3.9%
Adaptive Biotechnologies Corp. (a)	52,275	$ 399,381
Alector, Inc. (a)	16,007	147,745
AlloVir, Inc. (a)	29,321	150,417
BioAtla, Inc. (a)	25,322	208,906
Dynavax Technologies Corp. (a)	4,169	44,358
Exelixis, Inc. (a)	11,626	186,481
iTeos Therapeutics, Inc. (a)	25,550	498,991
Lyell Immunopharma, Inc. (a)	46,444	161,161
Novavax, Inc. (a)(l)	3,845	39,527
Sana Biotechnology, Inc. (a)	47,831	188,932
Sangamo Therapeutics, Inc. (a)	44,699	140,355
Varex Imaging Corp. (a)	19,735	400,620
Vir Biotechnology, Inc. (a)	22,286	564,059
		$3,130,933
Broadcasting – 0.5%
Entravision Communications Corp., “A”	81,072	$ 389,146
Business Services – 4.5%
BlueLinx Holdings, Inc. (a)	6,418	$ 456,384
Boise Cascade Corp.	8,152	559,798
Forrester Research, Inc. (a)	20,573	735,690
HireRight Holdings Corp. (a)	20,909	247,981
Paya, Inc. (a)	18,787	147,853
StoneCo Ltd., “A” (a)	8,745	82,553
TaskUs, Inc., “A” (a)	47,661	805,471
Yext, Inc. (a)	92,794	605,945
		$3,641,675
Cable TV – 0.1%
Cable One, Inc.	100	$ 71,186
Chemicals – 1.7%
Avient Corp.	9,995	$ 337,431
Element Solutions, Inc.	55,643	1,012,146
		$1,349,577

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MFS Blended Research Small Cap Equity Portfolio

Portfolio of Investments – continued

Issuer	Shares/Par	Value ($)
Common Stocks – continued
Computer Software – 4.0%
Clear Secure, Inc., “A”	12,855	$ 352,613
Domo, Inc., “B” (a)	1,705	24,279
Elastic N.V. (a)	5,602	288,503
Eventbrite, Inc. (a)	109,686	642,760
Everbridge, Inc. (a)	14,747	436,216
Paycor HCM, Inc. (a)	25,357	620,486
Paylocity Holding Corp. (a)	4,398	854,355
		$3,219,212
Computer Software - Systems – 2.7%
Box, Inc., “A” (a)	40,784	$ 1,269,606
Rapid7, Inc. (a)	7,620	258,928
Rimini Street, Inc. (a)	68,314	260,276
Verint Systems, Inc. (a)	10,365	376,042
		$2,164,852
Construction – 1.5%
AZEK Co., Inc. (a)	20,378	$ 414,081
GMS, Inc. (a)	15,232	758,554
		$1,172,635
Consumer Products – 2.3%
Herbalife Ltd. (a)	13,552	$ 201,654
Nu Skin Enterprises, Inc., “A”	4,202	177,156
Prestige Consumer Healthcare, Inc. (a)	24,231	1,516,861
		$1,895,671
Consumer Services – 2.0%
Grand Canyon Education, Inc. (a)	11,696	$ 1,235,799
TravelCenters of America LLC (a)	8,755	392,049
		$1,627,848
Electrical Equipment – 0.6%
Vertiv Holdings Co.	34,071	$ 465,410
Electronics – 5.0%
Advanced Energy Industries, Inc.	11,061	$ 948,813
Alpha and Omega Semiconductor Ltd. (a)	12,823	366,353
Photronics, Inc. (a)	19,805	333,318
Plexus Corp. (a)	10,552	1,086,117
Sanmina Corp. (a)	2,992	171,412
Silicon Laboratories, Inc. (a)	8,505	1,153,873
		$4,059,886
Energy - Independent – 2.9%
Alpha Metallurgical Resources	845	$ 123,699
CONSOL Energy, Inc.	1,938	125,970
CVR Energy, Inc.	14,890	466,653
Magnolia Oil & Gas Corp., “A”	50,408	1,182,068
Par Pacific Holdings, Inc. (a)	19,294	448,585
		$2,346,975
Energy - Integrated – 0.5%
National Gas Fuel Co.	6,418	$ 406,259

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Portfolio of Investments – continued

Issuer	Shares/Par	Value ($)
Common Stocks – continued
Engineering - Construction – 2.0%
APi Group, Inc. (a)	29,301	$ 551,152
Dycom Industries, Inc. (a)	11,526	1,078,834
		$1,629,986
Food & Beverages – 1.3%
Cal-Maine Foods, Inc.	1,337	$ 72,800
Hostess Brands, Inc. (a)	44,746	1,004,100
		$1,076,900
Food & Drug Stores – 0.2%
United Natural Foods, Inc. (a)	4,977	$ 192,660
Gaming & Lodging – 1.9%
International Game Technology PLC	46,977	$ 1,065,438
Target Hospitality Corp. (a)	31,140	471,460
		$1,536,898
General Merchandise – 0.6%
Dillards, Inc., “A” (l)	1,484	$ 479,629
Insurance – 4.9%
Brighthouse Financial, Inc. (a)	9,891	$ 507,112
Hanover Insurance Group, Inc.	4,738	640,246
Jackson Financial, Inc.	13,937	484,868
Radian Group, Inc.	2,041	38,922
Reinsurance Group of America, Inc.	9,535	1,354,828
Voya Financial, Inc.	14,463	889,330
		$3,915,306
Internet – 0.6%
ZipRecruiter, Inc., “A” (a)	30,177	$ 495,506
Leisure & Toys – 3.0%
Brunswick Corp.	12,139	$ 874,979
Funko, Inc., “A” (a)	44,823	489,019
Malibu Boats, Inc., “A” (a)	8,706	464,030
MasterCraft Boat Holdings, Inc. (a)	3,322	85,940
Polaris, Inc.	5,282	533,482
		$2,447,450
Machinery & Tools – 3.3%
Flowserve Corp.	10,346	$ 317,415
ITT, Inc.	1,103	89,453
Regal Rexnord Corp.	7,493	899,010
Timken Co.	14,048	992,772
Titan Machinery, Inc. (a)	9,743	387,090
		$2,685,740
Major Banks – 0.6%
First Financial Corp.	9,672	$ 445,686
Medical & Health Technology & Services – 2.4%
Cross Country Healthcare, Inc. (a)	9,018	$ 239,608
Health Catalyst, Inc. (a)	20,772	220,806
HealthEquity, Inc. (a)	10,238	631,070

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Portfolio of Investments – continued

Issuer	Shares/Par	Value ($)
Common Stocks – continued
Medical & Health Technology & Services – continued
Medpace Holdings, Inc. (a)	1,926	$ 409,102
ModivCare, Inc. (a)	413	37,059
Syneos Health, Inc. (a)	11,609	425,818
		$1,963,463
Medical Equipment – 5.6%
AngioDynamics, Inc. (a)	13,126	$ 180,745
Avanos Medical, Inc. (a)	14,834	401,408
Bioventus, Inc., “A” (a)(l)	30,938	80,748
CareDx, Inc. (a)	4,146	47,306
Envista Holdings Corp. (a)	29,532	994,343
Inogen, Inc. (a)	9,376	184,801
Integer Holdings Corp. (a)	5,669	388,100
Maravai Lifesciences Holdings, Inc., “A” (a)	57,469	822,381
Organogenesis Holdings, Inc. (a)	60,730	163,364
Quidel Corp. (a)	12,584	1,078,071
Zynex, Inc.	14,664	203,976
		$4,545,243
Metals & Mining – 0.9%
Ryerson Holding Corp.	22,663	$ 685,782
United States Steel Corp.	2,154	53,958
		$739,740
Natural Gas - Pipeline – 0.9%
Equitrans Midstream Corp.	113,919	$ 763,257
Oil Services – 2.0%
Cactus, Inc., “A”	11,277	$ 566,782
ChampionX Corp.	35,303	1,023,434
		$1,590,216
Other Banks & Diversified Financials – 11.2%
Amalgamated Financial Corp.	17,000	$ 391,680
Atlanticus Holdings Corp. (a)	1,668	43,702
Bank OZK	3,798	152,148
Cathay General Bancorp, Inc.	30,280	1,235,121
Enova International, Inc. (a)	1,891	72,558
First BanCorp.	23,754	302,151
First Hawaiian, Inc.	32,490	846,040
Navient Corp.	17,504	287,941
OFG Bancorp	17,007	468,713
Preferred Bank	5,363	400,187
Silvergate Capital Corp., “A” (a)	3,747	65,198
SLM Corp.	71,417	1,185,522
UMB Financial Corp.	12,401	1,035,731
Umpqua Holdings Corp.	63,002	1,124,586
United Community Bank, Inc.	10,288	347,734
Wintrust Financial Corp.	12,522	1,058,359
		$9,017,371
Pharmaceuticals – 3.1%
Alkermes PLC (a)	5,078	$ 132,688
Coherus BioSciences, Inc. (a)	22,813	180,679
Eagle Pharmaceuticals, Inc. (a)	4,007	117,125

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MFS Blended Research Small Cap Equity Portfolio

Portfolio of Investments – continued

Issuer	Shares/Par	Value ($)
Common Stocks – continued
Pharmaceuticals – continued
Emergent BioSolutions, Inc. (a)	5,831	$ 68,864
Intercept Pharmaceuticals, Inc. (a)	32,882	406,750
Macrogenics, Inc. (a)	20,330	136,414
Phibro Animal Health Corp., “A”	10,960	146,974
REGENXBIO, Inc. (a)	9,188	208,384
United Therapeutics Corp. (a)	2,988	830,933
Vanda Pharmaceuticals, Inc. (a)	31,771	234,788
		$2,463,599
Railroad & Shipping – 0.9%
Scorpio Tankers, Inc.	4,833	$ 259,870
Teekay Tankers LTD., “A” (a)	15,585	480,174
		$740,044
Real Estate – 7.5%
DiamondRock Hospitality Co., REIT	31,656	$ 259,263
Empire State Realty Trust, REIT, “A”	81,404	548,663
EPR Properties, REIT	20,366	768,206
Equity Commonwealth, REIT	10,289	256,916
National Storage Affiliates Trust, REIT	23,832	860,812
Phillips Edison & Co., REIT	31,848	1,014,040
Piedmont Office Realty Trust, Inc., REIT	62,488	573,015
Spirit Realty Capital, Inc., REIT	25,554	1,020,371
STAG Industrial, Inc., REIT	14,611	472,081
Uniti Group, Inc., REIT	45,217	250,050
		$6,023,417
Restaurants – 0.8%
Texas Roadhouse, Inc.	7,139	$ 649,292
Specialty Chemicals – 2.5%
Chemours Co.	31,433	$ 962,478
Univar Solutions, Inc. (a)	33,287	1,058,527
		$2,021,005
Specialty Stores – 2.3%
Builders FirstSource, Inc. (a)	13,457	$ 873,090
Urban Outfitters, Inc. (a)	31,976	762,628
Zumiez, Inc. (a)	10,150	220,661
		$1,856,379
Telephone Services – 0.5%
EchoStar Corp., “A” (a)	22,948	$ 382,773
Tobacco – 0.1%
Vector Group Ltd.	3,605	$ 42,755
Trucking – 1.3%
Landstar System, Inc.	2,371	$ 386,236
Saia, Inc. (a)	3,007	630,508
		$1,016,744

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MFS Blended Research Small Cap Equity Portfolio

Portfolio of Investments – continued

Issuer	Shares/Par	Value ($)
Common Stocks – continued
Utilities - Electric Power – 1.8%
IDACORP, Inc.	392	$ 42,277
Portland General Electric Co.	29,188	1,430,212
		$1,472,489
Total Common Stocks (Identified Cost, $77,223,405)		$79,949,636
Investment Companies (h) – 0.9%
Money Market Funds – 0.9%
MFS Institutional Money Market Portfolio, 4.02% (v) (Identified Cost, $705,159)	705,022	$ 705,234
Collateral for Securities Loaned – 0.3%
State Street Navigator Securities Lending Government Money Market Portfolio, 4.33% (j) (Identified Cost, $240,957)	240,957	$ 240,957
Other Assets, Less Liabilities – (0.3)%		(269,083)
Net Assets – 100.0%		$80,626,744

(a)	Non-income producing security.
(h)	An affiliated issuer, which may be considered one in which the fund owns 5% or more of the outstanding voting securities, or a company which is under common control. At period end, the aggregate values of the fund's investments in affiliated issuers and in unaffiliated issuers were $705,234 and $80,190,593, respectively.
(j)	The rate quoted is the annualized seven-day yield of the fund at period end.
(l)	A portion of this security is on loan. See Note 2 for additional information.
(v)	Affiliated issuer that is available only to investment companies managed by MFS. The rate quoted for the MFS Institutional Money Market Portfolio is the annualized seven-day yield of the fund at period end.

The following abbreviations are used in this report and are defined:
REIT	Real Estate Investment Trust

See Notes to Financial Statements

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MFS Blended Research Small Cap Equity Portfolio

Financial Statements

Statement of Assets and Liabilities

This statement represents your fund’s balance sheet, which details the assets and liabilities comprising the total value of the fund.

At 12/31/22 Assets
Investments in unaffiliated issuers, at value, including $298,366 of securities on loan (identified cost, $77,464,362)	$80,190,593
Investments in affiliated issuers, at value (identified cost, $705,159)	705,234
Receivables for
Fund shares sold	6,790
Interest and dividends	105,262
Other assets	744
Total assets	$81,008,623
Liabilities
Payables for
Fund shares reacquired	$71,501
Collateral for securities loaned, at value (c)	240,957
Payable to affiliates
Investment adviser	2,549
Administrative services fee	178
Shareholder servicing costs	42
Distribution and/or service fees	1,038
Payable for independent Trustees' compensation	104
Accrued expenses and other liabilities	65,510
Total liabilities	$381,879
Net assets	$80,626,744
Net assets consist of
Paid-in capital	$75,279,329
Total distributable earnings (loss)	5,347,415
Net assets	$80,626,744
Shares of beneficial interest outstanding	9,491,716

	Net assets	Shares outstanding	Net asset value per share
Initial Class	$29,826,034	3,398,802	$8.78
Service Class	50,800,710	6,092,914	8.34

(c)	Non-cash collateral is not included.

See Notes to Financial Statements

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MFS Blended Research Small Cap Equity Portfolio

Financial Statements

Statement of Operations

This statement describes how much your fund earned in investment income and accrued in expenses. It also describes any gains and/or losses generated by fund operations.

Year ended 12/31/22
Net investment income (loss)
Income
Dividends	$1,099,117
Other	12,827
Dividends from affiliated issuers	9,462
Income on securities loaned	1,868
Foreign taxes withheld	(2,682)
Total investment income	$1,120,592
Expenses
Management fee	$352,348
Distribution and/or service fees	138,117
Shareholder servicing costs	10,307
Administrative services fee	23,330
Independent Trustees' compensation	3,595
Custodian fee	5,579
Shareholder communications	5,626
Audit and tax fees	59,827
Legal fees	418
Miscellaneous	25,255
Total expenses	$624,402
Reduction of expenses by investment adviser	(12,242)
Net expenses	$612,160
Net investment income (loss)	$508,432
Realized and unrealized gain (loss)
Realized gain (loss) (identified cost basis)
Unaffiliated issuers	$2,701,522
Affiliated issuers	(3)
Net realized gain (loss)	$2,701,519
Change in unrealized appreciation or depreciation
Unaffiliated issuers	$(21,966,245)
Affiliated issuers	75
Net unrealized gain (loss)	$(21,966,170)
Net realized and unrealized gain (loss)	$(19,264,651)
Change in net assets from operations	$(18,756,219)

See Notes to Financial Statements

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MFS Blended Research Small Cap Equity Portfolio

Financial Statements

Statements of Changes in Net Assets

These statements describe the increases and/or decreases in net assets resulting from operations, any distributions, and any shareholder transactions.

	Year ended
	12/31/22	12/31/21
Change in net assets
From operations
Net investment income (loss)	$508,432	$521,826
Net realized gain (loss)	2,701,519	23,809,565
Net unrealized gain (loss)	(21,966,170)	1,832,471
Change in net assets from operations	$(18,756,219)	$26,163,862
Total distributions to shareholders	$(20,920,094)	$(770,014)
Change in net assets from fund share transactions	$15,936,179	$(14,248,191)
Total change in net assets	$(23,740,134)	$11,145,657
Net assets
At beginning of period	104,366,878	93,221,221
At end of period	$80,626,744	$104,366,878

See Notes to Financial Statements

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MFS Blended Research Small Cap Equity Portfolio

Financial Statements

Financial Highlights

Initial Class	Year ended
	12/31/22	12/31/21	12/31/20	12/31/19	12/31/18
Net asset value, beginning of period	$14.02	$10.91	$11.66	$11.25	$13.47
Income (loss) from investment operations
Net investment income (loss) (d)	$0.08	$0.09	$0.10	$0.10	$0.09
Net realized and unrealized gain (loss)	(2.48)	3.14	0.01(g)	2.56	(0.40)
Total from investment operations	$(2.40)	$3.23	$0.11	$2.66	$(0.31)
Less distributions declared to shareholders
From net investment income	$(0.09)	$(0.12)	$(0.09)	$(0.10)	$(0.13)
From net realized gain	(2.75)	—	(0.77)	(2.15)	(1.78)
Total distributions declared to shareholders	$(2.84)	$(0.12)	$(0.86)	$(2.25)	$(1.91)
Net asset value, end of period (x)	$8.78	$14.02	$10.91	$11.66	$11.25
Total return (%) (k)(r)(s)(x)	(18.37)	29.64	2.23	26.78	(5.11)
Ratios (%) (to average net assets) and Supplemental data:
Expenses before expense reductions	0.55	0.54	0.55	0.54	0.54
Expenses after expense reductions	0.54	0.52	0.54	0.53	0.53
Net investment income (loss)	0.73	0.67	1.05	0.81	0.69
Portfolio turnover	55	78	84	59	72
Net assets at end of period (000 omitted)	$29,826	$39,073	$33,850	$35,441	$29,936

Service Class	Year ended
	12/31/22	12/31/21	12/31/20	12/31/19	12/31/18
Net asset value, beginning of period	$13.47	$10.50	$11.24	$10.92	$13.12
Income (loss) from investment operations
Net investment income (loss) (d)	$0.05	$0.05	$0.07	$0.07	$0.06
Net realized and unrealized gain (loss)	(2.37)	3.01	0.02(g)	2.46	(0.39)
Total from investment operations	$(2.32)	$3.06	$0.09	$2.53	$(0.33)
Less distributions declared to shareholders
From net investment income	$(0.06)	$(0.09)	$(0.06)	$(0.06)	$(0.09)
From net realized gain	(2.75)	—	(0.77)	(2.15)	(1.78)
Total distributions declared to shareholders	$(2.81)	$(0.09)	$(0.83)	$(2.21)	$(1.87)
Net asset value, end of period (x)	$8.34	$13.47	$10.50	$11.24	$10.92
Total return (%) (k)(r)(s)(x)	(18.56)	29.17	2.14	26.36	(5.35)
Ratios (%) (to average net assets) and Supplemental data:
Expenses before expense reductions	0.80	0.79	0.80	0.79	0.79
Expenses after expense reductions	0.79	0.77	0.79	0.78	0.78
Net investment income (loss)	0.49	0.42	0.80	0.56	0.43
Portfolio turnover	55	78	84	59	72
Net assets at end of period (000 omitted)	$50,801	$65,294	$59,371	$61,099	$55,648

See Notes to Financial Statements

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MFS Blended Research Small Cap Equity Portfolio

Financial Highlights - continued

(d)	Per share data is based on average shares outstanding.
(g)	The per share amount varies from the net realized and unrealized gain/loss for the period because of the timing of sales of fund shares and the per share amount of realized and unrealized gains and losses at such time.
(k)	The total return does not reflect expenses that apply to separate accounts. Inclusion of these charges would reduce the total return figures for all periods shown.
(r)	Certain expenses have been reduced without which performance would have been lower.
(s)	From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
(x)	The net asset values and total returns have been calculated on net assets which include adjustments made in accordance with U.S. generally accepted accounting principles required at period end for financial reporting purposes.

See Notes to Financial Statements

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MFS Blended Research Small Cap Equity Portfolio

Notes to Financial Statements

(1) Business and Organization

MFS Blended Research Small Cap Equity Portfolio (the fund) is a diversified series of MFS Variable Insurance Trust III (the trust). The trust is organized as a Delaware statutory 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, and qualified retirement and pension plans.

(2) Significant Accounting Policies

Balance Sheet Offsetting — The fund's accounting policy with respect to balance sheet offsetting is that, absent an event of default by the counterparty or a termination of the agreement, the International Swaps and Derivatives Association (ISDA) Master Agreement, or similar agreement, does not result in an offset of reported amounts of financial assets and financial liabilities in the Statement of Assets and Liabilities across transactions between the fund and the applicable counterparty. The fund's right to setoff may be restricted or prohibited by the bankruptcy or insolvency laws of the particular jurisdiction to which a specific master netting agreement counterparty is subject. Balance sheet offsetting disclosures, to the extent applicable to the fund, have been included in the fund’s Significant Accounting Policies note under the captions for each of the fund’s in-scope financial instruments and transactions.

Investment Valuations — Subject to its oversight, the fund's Board of Trustees has delegated primary responsibility for determining or causing to be determined the value of the fund’s investments to MFS as the fund's adviser, pursuant to the fund’s valuation policy and procedures which have been adopted by the adviser and approved by the Board. Effective September 8, 2022, and in accordance with Rule 2a-5 under the Investment Company Act of 1940, the Board of Trustees designated the adviser as the “valuation designee” of the fund. If the adviser, as valuation designee, determines that reliable market quotations are not readily available for an investment, the investment is valued at fair value as determined in good faith by the adviser in accordance with the adviser’s fair valuation policy and procedures.

Under the fund's valuation policy and procedures, equity securities, including restricted equity securities, are generally valued at the last sale or official closing price on their primary market or exchange as provided by a third-party pricing service. Equity securities, for which there were no sales reported that day, are generally valued at the last quoted daily bid quotation on their primary market or exchange as provided by a third-party pricing service. Short-term instruments with a maturity at issuance of 60 days or less may be valued at amortized cost, which approximates market value. Open-end investment companies are generally valued at net asset value per share. The values of foreign securities and other assets and liabilities expressed in foreign currencies are converted to U.S. dollars using the mean of bid and asked prices for rates provided by a third-party pricing service.

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MFS Blended Research Small Cap Equity Portfolio

Notes to Financial Statements - continued

the type, cost and investment characteristics of the security; the business and financial condition of the issuer; and trading and other market data) to assist in determining whether to fair value and at what value to fair value an investment. The value of an investment for purposes of calculating the fund’s net asset value can differ depending on the source and method used to determine value. When fair valuation is used, the value of an investment used to determine the fund’s net asset value may differ from quoted or published prices for the same investment. There can be no assurance that the fund could obtain the fair value assigned to an investment if it were to sell the investment at the same time at which the fund determines its net asset value per share.

Financial Instruments	Level 1	Level 2	Level 3	Total
Equity Securities	$79,949,636	$—	$—	$79,949,636
Mutual Funds	946,191	—	—	946,191
Total	$80,895,827	$—	$—	$80,895,827

For further information regarding security characteristics, see the Portfolio of Investments.

Security Loans — Under its Securities Lending Agency Agreement with the fund, State Street Bank and Trust Company, as lending agent, loans the securities of the fund to certain qualified institutions (the “Borrowers”) approved by the fund. Security loans can be terminated at the discretion of either the lending agent or the fund and the related securities must be returned within the earlier of the standard trade settlement period for such securities or within three business days. The loans are collateralized by cash and/or U.S. Treasury and federal agency obligations in an amount typically at least equal to the market value of the securities loaned. On loans collateralized by cash, the cash collateral is invested in a money market fund. The market value of the loaned securities is determined at the close of business of the fund and any additional required collateral is delivered to the fund on the next business day. The lending agent provides the fund with indemnification against Borrower default. In the event of Borrower default, the lending agent will, for the benefit of the fund, either purchase securities identical to those loaned or, when such purchase is commercially impracticable, pay the fund the market value of the loaned securities. In return, the lending agent assumes the fund's rights to the related collateral. If the collateral value is less than the cost to purchase identical securities, the lending agent is responsible for the shortfall, but only to the extent that such shortfall is not due to a decline in collateral value resulting from collateral reinvestment for which the fund bears the risk of loss. At period end, the fund had investment securities on loan, all of which were classified as equity securities in the fund's Portfolio of Investments, with a fair value of $298,366. The fair value of the fund's investment securities on loan and a related liability of $240,957 for cash collateral received on securities loaned are both presented gross in the Statement of Assets and Liabilities. Additionally, these loans were collateralized by U.S. Treasury Obligations of $60,185 held by the lending agent. The collateral on securities loaned exceeded the value of securities on loan at period end. The liability for cash collateral for securities loaned is carried at fair value, which is categorized as level 2 within the fair value hierarchy. 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 agent. On loans collateralized by U.S. Treasury and/or federal agency obligations, a fee is received from the Borrower, and is allocated between the fund and the lending agent. Income from securities lending is separately reported in 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.

Investment Transactions and Income — Investment transactions are recorded on the trade date. Interest income is recorded on the accrual basis. Dividends received in cash are recorded on the ex-dividend date. Certain dividends from foreign securities will be recorded when the fund is informed of the dividend if such information is obtained subsequent to the ex-dividend date. Dividend payments received in additional securities are recorded on the ex-dividend date in an amount equal to the value of the security on such date. In determining the net gain or loss on securities sold, the cost of securities is determined on the identified cost basis.

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MFS Blended Research Small Cap Equity Portfolio

Notes to Financial Statements - continued

The fund may receive proceeds from litigation settlements. Any proceeds received from litigation involving portfolio holdings are reflected in the Statement of Operations in realized gain/loss if the security has been disposed of by the fund or in unrealized gain/loss if the security is still held by the fund. Any other proceeds from litigation not related to portfolio holdings are reflected as other income in the Statement of Operations.

Tax Matters and Distributions — The fund intends to qualify as a regulated investment company, as defined under Subchapter M of the Internal Revenue Code, and to distribute all of its taxable income, including realized capital gains. As a result, no provision for federal income tax is required. The fund’s federal tax returns, when filed, will remain subject to examination by the Internal Revenue Service for a three year period. Management has analyzed the fund’s tax positions taken on federal and state tax returns for all open tax years and does not believe that there are any uncertain tax positions that require recognition of a tax liability. Foreign taxes, if any, have been accrued by the fund in the accompanying financial statements in accordance with the applicable foreign tax law. Foreign income taxes may be withheld by certain countries in which the fund invests. Additionally, capital gains realized by the fund on securities issued in or by certain foreign countries may be subject to capital gains tax imposed by those countries.

Book/tax differences primarily relate to wash sale loss deferrals.

The tax character of distributions declared to shareholders for the last two fiscal years is as follows:

	Year ended 12/31/22	Year ended 12/31/21
Ordinary income (including any short-term capital gains)	$7,210,050	$770,014
Long-term capital gains	13,710,044	—
Total distributions	$20,920,094	$770,014

The federal tax cost and the tax basis components of distributable earnings were as follows:

As of 12/31/22
Cost of investments	$78,865,287
Gross appreciation	13,843,650
Gross depreciation	(11,813,110)
Net unrealized appreciation (depreciation)	$2,030,540
Undistributed ordinary income	504,273
Undistributed long-term capital gain	2,812,602
Total distributable earnings (loss)	$5,347,415

	Year ended 12/31/22	Year ended 12/31/21
Initial Class	$7,622,659	$338,509
Service Class	13,297,435	431,505
Total	$20,920,094	$770,014

(3) Transactions with Affiliates

Investment Adviser — The fund has an investment advisory agreement with MFS to provide overall investment management and related administrative services and facilities to the fund. The management fee is computed daily and paid monthly at an annual rate of 0.40% of the fund’s average daily net assets. MFS has agreed in writing to reduce its management fee by a specified amount if

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MFS Blended Research Small Cap Equity Portfolio

Notes to Financial Statements - continued

certain MFS mutual fund assets exceed thresholds agreed to by MFS and the fund's Board of Trustees. Effective March 1, 2022, MFS has also agreed in writing to waive at least 0.01% of its management fee as part of this agreement. The agreement to waive at least 0.01% of the management fee will continue until modified by the fund's Board of Trustees, but such agreement will continue at least until April 30, 2024. For the year ended December 31, 2022, this management fee reduction amounted to $12,242, which is included in the reduction of total expenses in the Statement of Operations. The management fee incurred for the year ended December 31, 2022 was equivalent to an annual effective rate of 0.39% of the fund's average daily net assets.

The investment adviser has agreed in writing to pay a portion of the fund’s total annual operating expenses, excluding interest, taxes, extraordinary expenses, brokerage and transaction costs, certain tax reclaim recovery expenses (including contingency fees and closing agreement expenses), and investment-related expenses, such that total annual operating expenses do not exceed 0.60% of average daily net assets for the Initial Class shares and 0.85% of average daily net assets for the Service Class shares. This written agreement will continue until modified by the fund’s Board of Trustees, but such agreement will continue at least until April 30, 2024. For the year ended December 31, 2022, the fund’s actual operating expenses did not exceed the limit and therefore, the investment adviser did not pay any portion of the fund’s expenses related to this agreement.

Shareholder Servicing Agent — MFS Service Center, Inc. (MFSC), a wholly-owned subsidiary of MFS, receives a fee from the fund for its services as shareholder servicing agent. For the year ended December 31, 2022, the fee was $9,553, which equated to 0.0109% annually of the fund's average daily net assets. MFSC also receives reimbursement from the fund for out-of-pocket expenses paid by MFSC on behalf of the fund. For the year ended December 31, 2022, these costs amounted to $754.

Administrator — MFS provides certain financial, legal, shareholder communications, compliance, and other administrative services to the fund. Under an administrative services agreement, the fund reimburses MFS the costs incurred to provide these services. The fund is charged an annual fixed amount of $17,500 plus a fee based on average daily net assets. The administrative services fee incurred for the year ended December 31, 2022 was equivalent to an annual effective rate of 0.0265% of the fund's average daily net assets.

The adviser has voluntarily undertaken to reimburse the fund from its own resources on a quarterly basis for the cost of investment research embedded in the cost of the fund’s securities trades. This agreement may be rescinded at any time. For the year ended December 31, 2022, this reimbursement amounted to $12,805, which is included in “Other” income in the Statement of Operations.

The fund is permitted to engage in purchase and sale transactions with funds and accounts for which MFS serves as investment adviser or sub-adviser (“cross-trades”) pursuant to a policy adopted by the Board of Trustees. This policy has been designed to ensure that cross-trades conducted by the fund comply with Rule 17a-7 under the Investment Company Act of 1940. During the year ended December 31, 2022, the fund engaged in purchase transactions pursuant to this policy, which amounted to $578,068.

(4) Portfolio Securities

For the year ended December 31, 2022, purchases and sales of investments, other than short-term obligations, aggregated $48,780,082 and $52,827,554, respectively.

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MFS Blended Research Small Cap Equity Portfolio

Notes to Financial Statements - continued

(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. Transactions in fund shares were as follows:

	Year ended 12/31/22		Year ended 12/31/21
	Shares	Amount	Shares	Amount
Shares sold
Initial Class	244,552	$2,627,998	263,239	$3,473,991
Service Class	628,724	6,501,877	607,326	7,714,638
	873,276	$9,129,875	870,565	$11,188,629
Shares issued to shareholders in reinvestment of distributions
Initial Class	813,518	$7,622,659	25,357	$338,509
Service Class	1,492,417	13,297,435	33,580	431,505
	2,305,935	$20,920,094	58,937	$770,014
Shares reacquired
Initial Class	(447,049)	$(4,929,664)	(602,378)	$(7,913,165)
Service Class	(874,850)	(9,184,126)	(1,450,359)	(18,293,669)
	(1,321,899)	$(14,113,790)	(2,052,737)	$(26,206,834)
Net change
Initial Class	611,021	$5,320,993	(313,782)	$(4,100,665)
Service Class	1,246,291	10,615,186	(809,453)	(10,147,526)
	1,857,312	$15,936,179	(1,123,235)	$(14,248,191)

(6) Line of Credit

The fund and certain other funds managed by MFS participate in a $1.45 billion unsecured committed line of credit of which $1.2 billion is reserved for use by the fund and certain other MFS U.S. funds. The line of credit is provided by a syndicate of banks under a credit agreement. Borrowings may be made for temporary financing needs. Interest is charged to each fund, based on its borrowings, generally at a rate equal to the highest of 1) Daily Simple SOFR (Secured Overnight Financing Rate) plus 0.10%, 2) the Federal Funds Effective Rate, or 3) the Overnight Bank Funding Rate, each plus an agreed upon spread. A commitment fee, based on the average daily unused portion of the committed line of credit, is allocated among the participating funds. The line of credit expires on March 16, 2023 unless extended or renewed. In addition, the fund and other funds managed by MFS have established unsecured uncommitted borrowing arrangements with certain banks for temporary financing needs. Interest is charged to each fund, based on its borrowings, at rates equal to customary reference rates plus an agreed upon spread. For the year ended December 31, 2022, the fund’s commitment fee and interest expense were $441 and $0, respectively, and are included in “Miscellaneous” expense in the Statement of Operations.

(7) Investments in Affiliated Issuers

Affiliated Issuers	Beginning Value	Purchases	Sales Proceeds	Realized Gain (Loss)	Change in Unrealized Appreciation or Depreciation	Ending Value
MFS Institutional Money Market Portfolio	$1,035,352	$12,553,930	$12,884,120	$(3)	$75	$705,234

Affiliated Issuers	Dividend Income	Capital Gain Distributions
MFS Institutional Money Market Portfolio	$9,462	$—

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Notes to Financial Statements - continued

(8) LIBOR Transition

Certain of the fund's investments, including investments in certain debt instruments and derivatives (if any), as well as borrowings by the fund and certain other contractual arrangements of the fund, may be based on the London Interbank Offered Rate (“LIBOR”). In 2017, the regulatory authority that oversees financial services firms in the United Kingdom announced plans to transition away from LIBOR by the end of 2021. In March 2021, the administrator of LIBOR announced the extension of the publication of the more commonly used U.S. dollar LIBOR settings to the end of June 2023. Although the full impacts of the transition away from LIBOR are not fully known, the transition may result in, among other things, an increase in volatility or illiquidity of the markets for instruments that currently rely on LIBOR to determine interest rates and this could have an adverse impact on the fund's performance. With respect to the fund's accounting for investments, including investments in certain debt instruments and derivatives, as well as borrowings by the fund and any other contractual arrangements of the fund that undergo reference rate-related modifications as a result of the transition, management will rely upon the relief provided by FASB Codification Topic 848 – Reference Rate Reform (Topic 848). The guidance in Topic 848 permits the fund to account for those modified contracts as a continuation of the existing contracts. Management is still evaluating the impact to the fund of the June 30, 2023 planned discontinuation of the more commonly used U.S. dollar LIBOR settings.

(9) Russia and Ukraine Conflict

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MFS Blended Research Small Cap Equity Portfolio

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of MFS Variable Insurance Trust III and the Shareholders of MFS Blended Research Small Cap Equity Portfolio:

Opinion on the Financial Statements and Financial Highlights

We have audited the accompanying statement of assets and liabilities of MFS Blended Research Small Cap Equity Portfolio (the “Fund”), including the portfolio of investments, as of December 31, 2022, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of December 31, 2022, and 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 five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of December 31, 2022, by correspondence with the custodian and brokers. We believe that our audits provide a reasonable basis for our opinion.

DELOITTE & TOUCHE LLP

Boston, Massachusetts
February 15, 2023

We have served as the auditor of one or more of the MFS investment companies since 1924.

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MFS Blended Research Small Cap Equity Portfolio

Trustees and Officers — Identification and Background

Name, Age	Position(s) Held with Fund	Trustee/Officer Since^(h)	Number of MFS Funds overseen by the Trustee	Principal Occupations During the Past Five Years	Other Directorships During the Past Five Years ^(j)
INTERESTED TRUSTEE
Michael W. Roberge ^(k) (age 56)	Trustee	January 2021	136	Massachusetts Financial Services Company, Chairman (since January 2021); Chief Executive Officer (since January 2017); Director; Chairman of the Board (since January 2022); President (until December 2018); Chief Investment Officer (until December 2018)	N/A
INDEPENDENT TRUSTEES
John P. Kavanaugh (age 68)	Trustee and Chair of Trustees	January 2009	136	Private investor	N/A
Steven E. Buller (age 71)	Trustee	February 2014	136	Private investor	N/A
John A. Caroselli (age 68)	Trustee	March 2017	136	Private investor; JC Global Advisors, LLC (management consulting), President (since 2015)	N/A
Maureen R. Goldfarb (age 67)	Trustee	January 2009	136	Private investor	N/A
Peter D. Jones (age 67)	Trustee	January 2019	136	Private investor	N/A
James W. Kilman, Jr. (age 61)	Trustee	January 2019	136	Burford Capital Limited (finance and investment management), Senior Advisor (since May 3, 2021), Chief Financial Officer (2019 - May 2, 2021); KielStrand Capital LLC (family office), Chief Executive Officer (since 2016)	Alpha-En Corporation, Director (2016-2019)
Clarence Otis, Jr. (age 66)	Trustee	March 2017	136	Private investor	VF Corporation, Director; Verizon Communications, Inc., Director; The Travelers Companies, Director
Maryanne L. Roepke (age 66)	Trustee	May 2014	136	Private investor	N/A
Laurie J. Thomsen (age 65)	Trustee	March 2005	136	Private investor	The Travelers Companies, Director; Dycom Industries, Inc., Director

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Trustees and Officers - continued

Name, Age	Position(s) Held with Fund	Trustee/Officer Since^(h)	Number of MFS Funds for which the Person is an Officer	Principal Occupations During the Past Five Years
OFFICERS
Christopher R. Bohane ^(k) (age 49)	Assistant Secretary and Assistant Clerk	July 2005	136	Massachusetts Financial Services Company, Senior Vice President and Senior Managing Counsel
Kino Clark ^(k) (age 54)	Assistant Treasurer	January 2012	136	Massachusetts Financial Services Company, Vice President
John W. Clark, Jr. ^(k) (age 55)	Assistant Treasurer	April 2017	136	Massachusetts Financial Services Company, Vice President
David L. DiLorenzo ^(k) (age 54)	President	July 2005	136	Massachusetts Financial Services Company, Senior Vice President
Heidi W. Hardin ^(k) (age 55)	Secretary and Clerk	April 2017	136	Massachusetts Financial Services Company, Executive Vice President and General Counsel
Brian E. Langenfeld ^(k) (age 49)	Assistant Secretary and Assistant Clerk	June 2006	136	Massachusetts Financial Services Company, Vice President and Managing Counsel
Rosa E. Licea-Mailloux ^(k) (age 46)	Chief Compliance Officer	March 2022	136	Massachusetts Financial Services Company, Vice President (since 2018); Director of Corporate Compliance (2018-2021), Senior Director Compliance (2021-2022), Senior Managing Director of North American Compliance & Chief Compliance Officer (since March 2022); Natixis Investment Managers (investment management), Funds Chief Compliance Officer, Deputy General Counsel & Senior Vice President (until 2018)
Amanda S. Mooradian ^(k) (age 43)	Assistant Secretary and Assistant Clerk	September 2018	136	Massachusetts Financial Services Company, Assistant Vice President and Senior Counsel
Susan A. Pereira ^(k) (age 52)	Assistant Secretary and Assistant Clerk	July 2005	136	Massachusetts Financial Services Company, Vice President and Managing Counsel
Kasey L. Phillips ^(k) (age 52)	Assistant Treasurer	September 2012	136	Massachusetts Financial Services Company, Vice President
Matthew A. Stowe ^(k) (age 48)	Assistant Secretary and Assistant Clerk	October 2014	136	Massachusetts Financial Services Company, Vice President and Senior Managing Counsel
William B. Wilson ^(k) (age 40)	Assistant Secretary and Assistant Clerk	October 2022	136	Massachusetts Financial Services Company, Assistant Vice President and Counsel
James O. Yost ^(k) (age 62)	Treasurer	September 1990	136	Massachusetts Financial Services Company, Senior Vice President

(h)	Date first appointed to serve as Trustee/Officer of an MFS Fund. Each Trustee has served continuously since appointment unless indicated otherwise. From January 2012 through December 2016, Messrs. DiLorenzo and Yost served as Treasurer and Deputy Treasurer of the Funds, respectively.

(j)	Directorships or trusteeships of companies required to report to the Securities and Exchange Commission (i.e., “public companies”).

(k)

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MFS Blended Research Small Cap Equity Portfolio

Trustees and Officers - continued

Messrs. Buller, Kilman and Otis and Ms. Roepke are members of the Trust’s Audit Committee.

Each of the Interested Trustees and certain Officers hold comparable officer positions with certain affiliates of MFS.

The Statement of Additional Information for a Fund includes further information about the Trustees and is available without charge upon request by calling 1-800-225-2606.

Investment Adviser	Custodian
Massachusetts Financial Services Company 111 Huntington Avenue Boston, MA 02199-7618	State Street Bank and Trust Company 1 Lincoln Street Boston, MA 02111-2900

Distributor	Independent Registered Public Accounting Firm
MFS Fund Distributors, Inc. 111 Huntington Avenue Boston, MA 02199-7618	Deloitte & Touche LLP 200 Berkeley Street Boston, MA 02116

Portfolio Manager(s)
Jim Fallon Matt Krummell Jonathan Sage Jed Stocks

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MFS Blended Research Small Cap Equity Portfolio

Board Review of Investment Advisory Agreement

MFS Blended Research Small Cap Equity Portfolio

In connection with their contract review meetings, the Trustees received and relied upon materials that included, among other items: (i) information provided by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent third party, on the investment performance of the Fund for various time periods ended December 31, 2021 and the investment performance of a group of funds with substantially similar investment classifications/objectives (the “Broadridge performance universe”), (ii) information provided by Broadridge on the Fund’s advisory fees and other expenses and the advisory fees and other expenses of comparable funds identified by Broadridge as well as all other funds in the same investment classification/category (the “Broadridge expense group and universe”), (iii) information provided by MFS on the advisory fees of portfolios of other clients of MFS, including institutional separate accounts and other clients, (iv) information as to whether and to what extent applicable expense waivers, reimbursements or fee “breakpoints” are observed for the Fund, (v) information regarding MFS’ financial results and financial condition, including MFS’ and certain of its affiliates’ estimated profitability from services performed for the Fund and the MFS Funds as a whole, and compared to MFS’ institutional business, (vi) MFS’ views regarding the outlook for the mutual fund industry and the strategic business plans of MFS, (vii) descriptions of various functions performed by MFS for the Funds, such as compliance monitoring and portfolio trading practices, and (viii) information regarding the overall organization of MFS, including information about MFS’ senior management and other personnel providing investment advisory, administrative and other services to the Fund and the other MFS Funds. The comparative performance, fee and expense information prepared and provided by Broadridge was not independently verified and the independent Trustees did not independently verify any information provided to them by MFS.

Based on information provided by Broadridge and MFS, the Trustees reviewed the Fund’s total return investment performance as well as the Broadridge performance universe over various time periods. The Trustees placed particular emphasis on the total return performance of the Fund’s Initial Class shares in comparison to the performance of funds in its Broadridge performance universe over the five-year period ended December 31, 2021, which the Trustees believed was a long enough period to reflect differing market conditions. The total return performance of the Fund’s Initial Class shares was in the 1st quintile relative to the other funds in the universe for this five-year period (the 1st quintile being the best performers and the 5th quintile being the worst performers). The total return performance of the Fund’s Initial Class shares was in the 1st quintile for the one-year period and the 5th quintile for the three-year period ended December 31, 2021 relative to the Broadridge performance universe. Because of the passage of time, these performance results may differ from the performance results for more recent periods, including those shown elsewhere in this report.

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MFS Blended Research Small Cap Equity Portfolio

Board Review of Investment Advisory Agreement - continued

In assessing the reasonableness of the Fund’s advisory fee, the Trustees considered, among other information, the Fund’s advisory fee and the total expense ratio of the Fund’s Initial Class shares as a percentage of average daily net assets and the advisory fee and total expense ratios of the Broadridge expense group based on information provided by Broadridge. The Trustees considered that MFS currently observes an expense limitation for the Fund, which may not be changed without the Trustees’ approval. The Trustees also considered that, according to the data provided by Broadridge (which takes into account any fee reductions or expense limitations that were in effect during the Fund’s last fiscal year), the Fund’s effective advisory fee rate and total expense ratio were each lower than the Broadridge expense group median.

The Trustees also considered the advisory fees charged by MFS to any institutional separate accounts advised by MFS (“separate accounts”) and unaffiliated investment companies for which MFS serves as subadviser (“subadvised funds”) that have comparable investment strategies to the Fund, if any. In comparing these fees, the Trustees considered information provided by MFS as to the generally broader scope of services provided by MFS to the Fund, as well as the more extensive regulatory burdens imposed on MFS in managing the Fund, in comparison to separate accounts and subadvised funds. The Trustees also considered the higher demands placed on MFS’ investment personnel and trading infrastructure as a result of the daily cash in-flows and out-flows of the Fund in comparison to separate accounts.

The Trustees also considered whether the Fund may benefit from any economies of scale in the management of the Fund in the event of growth in assets of the Fund and/or growth in assets of the MFS Funds as a whole. They noted that the Fund’s advisory fee rate schedule is not subject to any breakpoints. Taking into account the expense limitation noted above, the Trustees determined not to recommend any advisory fee breakpoints for the Fund at this time. The Trustees also noted that MFS has agreed in writing to waive a portion of the management fees of certain MFS Funds, including the Fund, if the total combined assets of certain funds within the MFS Funds’ complex increase above agreed upon thresholds (the “group fee waiver”), enabling the Fund’s shareholders to share in the benefits from any economies of scale at the complex level. The group fee waiver is reviewed and renewed annually between the Board and MFS. The Trustees concluded that the group fee waiver was sufficient to allow the Fund to benefit from economies of scale as its assets and overall complex assets grow.

After reviewing these and other factors described herein, the Trustees concluded, within the context of their overall conclusions regarding the investment advisory agreement, that the advisory fees charged to the Fund represent reasonable compensation in light of the services being provided by MFS to the Fund.

The Trustees also considered the nature, quality, cost, and extent of administrative, transfer agency, and distribution services provided to the Fund by MFS and its affiliates under agreements and plans other than the investment advisory agreement, including any 12b-1 fees the Fund pays to MFS Fund Distributors, Inc., an affiliate of MFS. The Trustees also considered the nature, extent and quality of certain other services MFS performs or arranges for on the Fund’s behalf, which may include securities lending programs, directed expense payment programs, class action recovery programs, and MFS’ interaction with third-party service providers, principally custodians and sub-custodians. The Trustees concluded that the various non-advisory services provided by MFS and its affiliates on behalf of the Fund were satisfactory.

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MFS Blended Research Small Cap Equity Portfolio

Proxy Voting Policies and Information

Quarterly Portfolio Disclosure

FURTHER INFORMATION

Information About Fund Contracts and Legal Claims

Federal Tax Information (unaudited)

The following information is provided pursuant to provisions of the Internal Revenue Code.

The fund designates $15,082,000 as capital gain dividends paid during the fiscal year.

For corporate shareholders, 12.72% of the ordinary income dividends paid during the fiscal year qualify for the corporate dividends received deduction.

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rev. 3/16

FACTS

WHAT DOES MFS DO WITH YOUR PERSONAL INFORMATION?

Why?

What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include:
	• Social Security number and account balances
	• Account transactions and transaction history
	• Checking account information and wire transfer instructions
	When you are no longer our customer, we continue to share your information as described in this notice.

How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MFS chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MFS share?	Can you limit this sharing?
For our everyday business purposes – such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes – to offer our products and services to you	No	We don't share
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes – information about your transactions and experiences	No	We don't share
For our affiliates' everyday business purposes – information about your creditworthiness	No	We don't share
For nonaffiliates to market to you	No	We don't share

Questions?

Call 800-225-2606 or go to mfs.com.

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Page 2

Who we are
Who is providing this notice?	MFS Funds, MFS Investment Management, MFS Institutional Advisors, Inc., and MFS Heritage Trust Company.

What we do
How does MFS protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include procedural, electronic, and physical safeguards for the protection of the personal information we collect about you.
How does MFS collect my personal information?	We collect your personal information, for example, when you
	• open an account or provide account information
	• direct us to buy securities or direct us to sell your securities
	• make a wire transfer
	We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only
	• sharing for affiliates' everyday business purposes – information about your creditworthiness
	• affiliates from using your information to market to you
	• sharing for nonaffiliates to market to you
	State laws and individual companies may give you additional rights to limit sharing.

Definitions
Affiliates	Companies related by common ownership or control. They can be financial and nonfinancial companies.
	• MFS does not share personal information with affiliates, except for everyday business purposes as described on page one of this notice.
Nonaffiliates	Companies not related by common ownership or control. They can be financial and nonfinancial companies.
	• MFS does not share with nonaffiliates so they can market to you.
Joint marketing	A formal agreement between nonaffiliated financial companies that together market financial products or services to you.
	• MFS doesn't jointly market.

Other important information

If you own an MFS product or receive an MFS service in the name of a third party such as a bank or broker-dealer, their privacy policy may apply to you instead of ours.

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Annual Report

December 31, 2022

MFS^® Conservative
Allocation Portfolio

MFS^® Variable Insurance Trust III

VCA-ANN

MFS^® Conservative Allocation Portfolio

CONTENTS

The 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.

NOT FDIC INSURED • MAY LOSE VALUE • NO BANK OR CREDIT UNION GUARANTEE •

NOT A DEPOSIT • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY OR NCUA/NCUSIF

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MFS Conservative Allocation Portfolio

LETTER FROM THE CHAIR AND CEO

Dear Shareholders:

During times of market transition, it is important to have a deep understanding of company fundamentals, and we have built our unique global research platform to do just that.

Respectfully,

Michael W. Roberge

Chair and Chief Executive Officer

MFS Investment Management

February 15, 2023

The opinions expressed in this letter are subject to change and may not be relied upon for investment advice. No forecasts can be guaranteed.

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MFS Conservative Allocation Portfolio

Portfolio Composition

Portfolio target allocation

Portfolio actual allocation

Portfolio holdings

MFS Total Return Bond Series	16.9%
MFS Limited Maturity Portfolio	12.0%
MFS Inflation-Adjusted Bond Portfolio	10.0%
MFS Government Securities Portfolio	9.9%
MFS Global Governments Portfolio	8.0%
MFS Value Series	6.0%
MFS Research Series	6.0%
MFS Growth Series	5.9%
MFS High Yield Portfolio	4.9%
MFS Research International Portfolio	4.0%
MFS Mid Cap Value Portfolio	4.0%
MFS Mid Cap Growth Series	3.9%
MFS International Intrinsic Value Portfolio	2.0%
MFS Global Real Estate Portfolio	2.0%
MFS International Growth Portfolio	2.0%
MFS New Discovery Value Portfolio	1.0%
MFS New Discovery Series	1.0%
Cash & Cash Equivalents	0.5%

Percentages are based on net assets as of December 31, 2022.

The portfolio is actively managed and current holdings may be different.

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MFS Conservative Allocation Portfolio

Management Review

Summary of Results

For the twelve months ended December 31, 2022, Initial Class shares of the MFS Conservative Allocation Portfolio (fund) provided a total return of -15.39%, while Service Class shares of the fund provided a total return of -15.53%. These compare with a return of -13.01% for the fund’s benchmark, the Bloomberg U.S. Aggregate Bond Index. The fund's other benchmark, the MFS Conservative Allocation Portfolio Blended Index (Blended Index), generated a return of -14.53%. The Blended Index reflects the blended returns of various equity and fixed income market indices, with percentage allocations to each index designed to resemble the allocations of the fund. The market indices and related percentage allocations used to compile the Blended Index are set forth in the Performance Summary.

Market Environment

Factors Affecting Performance

During the reporting period, the fund underperformed its benchmark, the Bloomberg U.S. Aggregate Bond Index. Over the same period, the fund also underperformed the Blended Index.

Relative to the Blended Index, the fund’s exposure to the international equity asset class was a primary detractor from relative performance. Within this segment, the MFS International Intrinsic Value Portfolio weighed on the fund's relative results as the portfolio tilted toward higher quality growth and lagged its respective benchmark.

The fund's exposure to the U.S. equity asset class also held back relative returns. Here, exposure to growth-oriented funds, particularly to both the MFS Growth Series and MFS Mid Cap Growth Series, which both underperformed their respective benchmarks, held back relative performance and more than offset the positive relative contribution stemming from the fund’s exposure to value-oriented funds, in particular the MFS Value Series and MFS Mid Cap Value Portfolio.

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MFS Conservative Allocation Portfolio

Management Review - continued

Respectfully,

Portfolio Manager(s)

Joseph Flaherty and Natalie Shapiro

(d)	Duration is a measure of how much a bond’s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value.

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MFS Conservative Allocation Portfolio

Performance Summary Through 12/31/22

Growth of a Hypothetical $10,000 Investment

Total Returns through 12/31/22

Average annual total returns

Share Class	Class Inception Date	1-yr	5-yr	10-yr
Initial Class	10/01/08	(15.39)%	2.94%	4.49%
Service Class	10/01/08	(15.53)%	2.69%	4.23%

Comparative benchmark(s)

Bloomberg U.S. Aggregate Bond Index (f)	(13.01)%	0.02%	1.06%
MFS Conservative Allocation Portfolio Blended Index (f)(w)	(14.53)%	3.07%	4.76%
FTSE EPRA Nareit Developed Reat Estate Index (net div) (f)	(25.09)%	(0.23)%	2.99%
MSCI EAFE Index (net div) (f)	(14.45)%	1.54%	4.67%
Standard & Poor's 500 Stock Index (f)	(18.11)%	9.42%	12.56%

(f)	Source: FactSet Research Systems Inc.
(w)	The MFS Conservative Allocation Portfolio Blended Index (a custom index) was comprised of the following at the beginning and at the end of the reporting period:

	12/31/22
Bloomberg U.S. Aggregate Bond Index	62%
Standard & Poor’s 500 Stock Index	28%
MSCI EAFE Index (net div)	8%
FTSE EPRA Nareit Developed Real Estate Index (net div)	2%

Benchmark Definition(s)

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MFS Conservative Allocation Portfolio

Performance Summary – continued

Standard & Poor's 500 Stock Index^(g) – a market capitalization-weighted index of 500 widely held equity securities, designed to measure broad U.S. equity performance.

It is not possible to invest directly in an index.

(a)

(c)

(e)

(g)

Notes to Performance Summary

Average annual total return represents the average annual change in value for each share class for the periods presented.

From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.

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MFS Conservative Allocation Portfolio

Expense Table

Fund expenses borne by the shareholders during the period,
July 1, 2022 through December 31, 2022

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2022 through December 31, 2022.

Actual Expenses

Hypothetical Example for Comparison Purposes

Share Class		Annualized Expense Ratio	Beginning Account Value 7/01/22	Ending Account Value 12/31/22	Expenses Paid During Period (p) 7/01/22-12/31/22
Initial Class	Actual	0.04%	$1,000.00	$996.15	$0.20
Initial Class	Hypothetical (h)	0.04%	$1,000.00	$1,025.00	$0.20
Service Class	Actual	0.29%	$1,000.00	$995.81	$1.46
Service Class	Hypothetical (h)	0.29%	$1,000.00	$1,023.74	$1.48

(h)	5% class return per year before expenses.

(p)

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MFS Conservative Allocation Portfolio

Portfolio of Investments − 12/31/22

The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.

Issuer	Shares/Par	Value ($)
Investment Companies (h) – 100.0%
Bond Funds – 61.7%
MFS Global Governments Portfolio - Initial Class	2,786,377	$ 23,990,710
MFS Government Securities Portfolio - Initial Class	2,815,602	29,845,384
MFS High Yield Portfolio - Initial Class	3,163,870	14,933,466
MFS Inflation-Adjusted Bond Portfolio - Initial Class	3,589,220	29,969,985
MFS Limited Maturity Portfolio - Initial Class	3,770,426	36,007,568
MFS Total Return Bond Series - Initial Class	4,509,402	50,775,863
		$185,522,976
International Stock Funds – 8.0%
MFS International Growth Portfolio - Initial Class	448,193	$ 5,983,376
MFS International Intrinsic Value Portfolio - Initial Class	220,162	5,997,208
MFS Research International Portfolio - Initial Class	795,307	12,009,143
		$23,989,727
Specialty Funds – 2.0%
MFS Global Real Estate Portfolio - Initial Class	468,978	$ 5,993,537
U.S. Stock Funds – 27.8%
MFS Growth Series - Initial Class	367,638	$ 17,653,987
MFS Mid Cap Growth Series - Initial Class	1,657,000	11,864,120
MFS Mid Cap Value Portfolio - Initial Class	1,304,898	11,992,014
MFS New Discovery Series - Initial Class	263,900	2,984,712
MFS New Discovery Value Portfolio - Initial Class	379,138	3,006,559
MFS Research Series - Initial Class	645,152	17,896,518
MFS Value Series - Initial Class	835,538	18,005,838
		$83,403,748
Money Market Funds – 0.5%
MFS Institutional Money Market Portfolio, 4.02% (v)	1,655,659	$ 1,656,155
Total Investment Companies (Identified Cost, $307,986,048)		$300,566,143
Other Assets, Less Liabilities – (0.0)%		(50,127)
Net Assets – 100.0%		$300,516,016

(h)	An affiliated issuer, which may be considered one in which the fund owns 5% or more of the outstanding voting securities, or a company which is under common control. At period end, the aggregate value of the fund’s investments in affiliated issuers was $300,566,143.
(v)	Affiliated issuer that is available only to investment companies managed by MFS. The rate quoted for the MFS Institutional Money Market Portfolio is the annualized seven-day yield of the fund at period end.

See Notes to Financial Statements

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MFS Conservative Allocation Portfolio

Financial Statements

Statement of Assets and Liabilities

This statement represents your fund’s balance sheet, which details the assets and liabilities comprising the total value of the fund.

At 12/31/22 Assets
Investments in affiliated issuers, at value (identified cost, $307,986,048)	$300,566,143
Receivables for
Investments sold	275,493
Fund shares sold	230
Other assets	1,892
Total assets	$300,843,758
Liabilities
Payables for
Fund shares reacquired	$266,901
Payable to affiliates
Administrative services fee	142
Shareholder servicing costs	27
Distribution and/or service fees	6,142
Accrued expenses and other liabilities	54,530
Total liabilities	$327,742
Net assets	$300,516,016
Net assets consist of
Paid-in capital	$293,223,043
Total distributable earnings (loss)	7,292,973
Net assets	$300,516,016
Shares of beneficial interest outstanding	32,772,120

	Net assets	Shares outstanding	Net asset value per share
Initial Class	$1,756,417	192,534	$9.12
Service Class	298,759,599	32,579,586	9.17

See Notes to Financial Statements

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MFS Conservative Allocation Portfolio

Financial Statements

Statement of Operations

This statement describes how much your fund earned in investment income and accrued in expenses. It also describes any gains and/or losses generated by fund operations.

Year ended 12/31/22
Net investment income (loss)
Income
Dividends from affiliated issuers	$8,593,795
Other	52
Total investment income	$8,593,847
Expenses
Distribution and/or service fees	$832,324
Shareholder servicing costs	6,527
Administrative services fee	17,500
Independent Trustees' compensation	6,894
Custodian fee	5,453
Shareholder communications	4,438
Audit and tax fees	43,372
Legal fees	1,468
Miscellaneous	28,303
Total expenses	$946,279
Net investment income (loss)	$7,647,568
Realized and unrealized gain (loss)
Realized gain (loss) (identified cost basis)
Investments in affiliated issuers	$(2,579,329)
Capital gain distributions from affiliated issuers	13,102,924
Net realized gain (loss)	$10,523,595
Change in unrealized appreciation or depreciation
Affiliated issuers	$(78,765,821)
Net realized and unrealized gain (loss)	$(68,242,226)
Change in net assets from operations	$(60,594,658)

See Notes to Financial Statements

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MFS Conservative Allocation Portfolio

Financial Statements

Statements of Changes in Net Assets

These statements describe the increases and/or decreases in net assets resulting from operations, any distributions, and any shareholder transactions.

	Year ended
	12/31/22	12/31/21
Change in net assets
From operations
Net investment income (loss)	$7,647,568	$6,700,560
Net realized gain (loss)	10,523,595	25,776,581
Net unrealized gain (loss)	(78,765,821)	(5,112,515)
Change in net assets from operations	$(60,594,658)	$27,364,626
Total distributions to shareholders	$(32,481,327)	$(23,872,548)
Change in net assets from fund share transactions	$(8,422,855)	$(32,767,356)
Total change in net assets	$(101,498,840)	$(29,275,278)
Net assets
At beginning of period	402,014,856	431,290,134
At end of period	$300,516,016	$402,014,856

See Notes to Financial Statements

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MFS Conservative Allocation Portfolio

Financial Statements

Financial Highlights

Initial Class	Year ended
	12/31/22	12/31/21	12/31/20	12/31/19	12/31/18
Net asset value, beginning of period	$12.02	$11.95	$11.44	$10.58	$11.61
Income (loss) from investment operations
Net investment income (loss) (d)(l)	$0.21	$0.23	$0.27	$0.28	$0.27
Net realized and unrealized gain (loss)	(2.03)	0.60	1.09	1.47	(0.55)
Total from investment operations	$(1.82)	$0.83	$1.36	$1.75	$(0.28)
Less distributions declared to shareholders
From net investment income	$(0.25)	$(0.29)	$(0.31)	$(0.31)	$(0.26)
From net realized gain	(0.83)	(0.47)	(0.54)	(0.58)	(0.49)
Total distributions declared to shareholders	$(1.08)	$(0.76)	$(0.85)	$(0.89)	$(0.75)
Net asset value, end of period (x)	$9.12	$12.02	$11.95	$11.44	$10.58
Total return (%) (k)(s)(x)	(15.39)	7.00	12.31	16.87	(2.73)
Ratios (%) (to average net assets) and Supplemental data:
Expenses before expense reductions (h)	0.03	0.03	0.03	0.03	0.03
Expenses after expense reductions (h)	N/A	N/A	N/A	N/A	N/A
Net investment income (loss) (l)	2.05	1.90	2.40	2.47	2.34
Portfolio turnover	3	1	7	2	1
Net assets at end of period (000 omitted)	$1,756	$3,278	$3,061	$2,029	$2,062

Service Class	Year ended
	12/31/22	12/31/21	12/31/20	12/31/19	12/31/18
Net asset value, beginning of period	$12.06	$11.99	$11.47	$10.61	$11.63
Income (loss) from investment operations
Net investment income (loss) (d)(l)	$0.23	$0.19	$0.23	$0.25	$0.23
Net realized and unrealized gain (loss)	(2.07)	0.60	1.11	1.47	(0.53)
Total from investment operations	$(1.84)	$0.79	$1.34	$1.72	$(0.30)
Less distributions declared to shareholders
From net investment income	$(0.22)	$(0.25)	$(0.28)	$(0.28)	$(0.23)
From net realized gain	(0.83)	(0.47)	(0.54)	(0.58)	(0.49)
Total distributions declared to shareholders	$(1.05)	$(0.72)	$(0.82)	$(0.86)	$(0.72)
Net asset value, end of period (x)	$9.17	$12.06	$11.99	$11.47	$10.61
Total return (%) (k)(s)(x)	(15.53)	6.70	12.06	16.48	(2.92)
Ratios (%) (to average net assets) and Supplemental data:
Expenses before expense reductions (h)	0.28	0.28	0.28	0.28	0.28
Expenses after expense reductions (h)	N/A	N/A	N/A	N/A	N/A
Net investment income (loss) (l)	2.29	1.60	1.98	2.18	2.05
Portfolio turnover	3	1	7	2	1
Net assets at end of period (000 omitted)	$298,760	$398,737	$428,229	$433,203	$442,988

See Notes to Financial Statements

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MFS Conservative Allocation Portfolio

Financial Highlights - continued

(d)	Per share data is based on average shares outstanding.
(h)	In addition to the fees and expenses which the fund bears directly, the fund indirectly bears a pro rata share of the fees and expenses of the underlying affiliated funds in which the fund invests. Accordingly, the expense ratio for the fund reflects only those fees and expenses borne directly by the fund. Because the underlying affiliated funds have varied expense and fee levels and the fund may own different proportions of the underlying affiliated funds at different times, the amount of fees and expenses incurred indirectly by the fund will vary.
(k)	The total return does not reflect expenses that apply to separate accounts. Inclusion of these charges would reduce the total return figures for all periods shown.
(l)	The ratios and per share amounts do not include net investment income of the underlying affiliated funds in which the fund invests.
(s)	From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
(x)	The net asset values and total returns have been calculated on net assets which include adjustments made in accordance with U.S. generally accepted accounting principles required at period end for financial reporting purposes.

See Notes to Financial Statements

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MFS Conservative Allocation Portfolio

Notes to Financial Statements

(1) Business and Organization

MFS Conservative Allocation Portfolio (the fund) is a diversified series of MFS Variable Insurance Trust III (the trust). The trust is organized as a Delaware statutory 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, and qualified retirement and pension plans.

(2) Significant Accounting Policies

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MFS Conservative Allocation Portfolio

Notes to Financial Statements - continued

Financial Instruments	Level 1	Level 2	Level 3	Total
Mutual Funds	$300,566,143	$—	$—	$300,566,143

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MFS Conservative Allocation Portfolio

Notes to Financial Statements - continued

Book/tax differences primarily relate to wash sale loss deferrals.

The tax character of distributions declared to shareholders for the last two fiscal years is as follows:

	Year ended 12/31/22	Year ended 12/31/21
Ordinary income (including any short-term capital gains)	$7,278,182	$10,079,337
Long-term capital gains	25,203,145	13,793,211
Total distributions	$32,481,327	$23,872,548

The federal tax cost and the tax basis components of distributable earnings were as follows:

As of 12/31/22
Cost of investments	$313,270,269
Gross appreciation	27,016,660
Gross depreciation	(39,720,786)
Net unrealized appreciation (depreciation)	$(12,704,126)
Undistributed ordinary income	7,640,311
Undistributed long-term capital gain	12,356,788
Total distributable earnings (loss)	$7,292,973

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MFS Conservative Allocation Portfolio

Notes to Financial Statements - continued

	Year ended 12/31/22	Year ended 12/31/21
Initial Class	$188,910	$189,389
Service Class	32,292,417	23,683,159
Total	$32,481,327	$23,872,548

(3) Transactions with Affiliates

Shareholder Servicing Agent — MFS Service Center, Inc. (MFSC), a wholly-owned subsidiary of MFS, receives a fee from the fund for its services as shareholder servicing agent. For the year ended December 31, 2022, the fee was $6,384, which equated to 0.0019% annually of the fund's average daily net assets. MFSC also receives reimbursement from the fund for out-of-pocket expenses paid by MFSC on behalf of the fund. For the year ended December 31, 2022, these costs amounted to $143.

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MFS Conservative Allocation Portfolio

Notes to Financial Statements - continued

(4) Portfolio Securities

For the year ended December 31, 2022, purchases and sales of shares of underlying funds, excluding the MFS Institutional Money Market Portfolio, aggregated $10,938,395 and $52,774,999, respectively.

(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. Transactions in fund shares were as follows:

	Year ended 12/31/22		Year ended 12/31/21
	Shares	Amount	Shares	Amount
Shares sold
Initial Class	1,955	$19,673	32,316	$389,338
Service Class	812,076	8,037,049	589,590	7,135,130
	814,031	$8,056,722	621,906	$7,524,468
Shares issued to shareholders in reinvestment of distributions
Initial Class	20,075	$188,910	15,902	$189,389
Service Class	3,409,970	32,292,417	1,978,543	23,683,159
	3,430,045	$32,481,327	1,994,445	$23,872,548
Shares reacquired
Initial Class	(102,259)	$(1,077,347)	(31,668)	$(382,074)
Service Class	(4,693,800)	(47,883,557)	(5,238,847)	(63,782,298)
	(4,796,059)	$(48,960,904)	(5,270,515)	$(64,164,372)
Net change
Initial Class	(80,229)	$(868,764)	16,550	$196,653
Service Class	(471,754)	(7,554,091)	(2,670,714)	(32,964,009)
	(551,983)	$(8,422,855)	(2,654,164)	$(32,767,356)

(6) Line of Credit

The fund and certain other funds managed by MFS participate in a $1.45 billion unsecured committed line of credit of which $1.2 billion is reserved for use by the fund and certain other MFS U.S. funds. The line of credit is provided by a syndicate of banks under a credit agreement. Borrowings may be made for temporary financing needs. Interest is charged to each fund, based on its borrowings, generally at a rate equal to the highest of 1) Daily Simple SOFR (Secured Overnight Financing Rate) plus 0.10%, 2) the Federal Funds Effective Rate, or 3) the Overnight Bank Funding Rate, each plus an agreed upon spread. A commitment fee, based on the average daily unused portion of the committed line of credit, is allocated among the participating funds. The line of credit expires on March 16, 2023 unless extended or renewed. In addition, the fund and other funds managed by MFS have established unsecured uncommitted borrowing arrangements with certain banks for temporary financing needs. Interest is charged to each fund, based on its borrowings, at rates equal to customary reference rates plus an agreed upon spread. For the year ended December 31, 2022, the fund’s commitment fee and interest expense were $1,683 and $0, respectively, and are included in “Miscellaneous” expense in the Statement of Operations.

(7) Investments in Affiliated Issuers

Affiliated Issuers	Beginning Value	Purchases	Sales Proceeds	Realized Gain (Loss)	Change in Unrealized Appreciation or Depreciation	Ending Value
MFS Global Governments Portfolio	$31,862,246	$635,748	$2,794,700	$(561,479)	$(5,151,105)	$23,990,710
MFS Global Real Estate Portfolio	8,135,042	1,463,778	943,221	106,300	(2,768,362)	5,993,537
MFS Government Securities Portfolio	39,928,327	782,762	5,582,959	(1,052,715)	(4,230,031)	29,845,384

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MFS Conservative Allocation Portfolio

Notes to Financial Statements - continued

Affiliated Issuers − continued	Beginning Value	Purchases	Sales Proceeds	Realized Gain (Loss)	Change in Unrealized Appreciation or Depreciation	Ending Value
MFS Growth Series	$23,921,598	$4,940,233	$1,284,299	$(418,048)	$(9,505,497)	$17,653,987
MFS High Yield Portfolio	20,026,199	934,763	3,060,956	(645,408)	(2,321,132)	14,933,466
MFS Inflation-Adjusted Bond Portfolio	39,991,232	5,430,260	3,743,618	(248,177)	(11,459,712)	29,969,985
MFS Institutional Money Market Portfolio	1,644,909	1,704,370	1,693,628	19	485	1,656,155
MFS International Growth Portfolio	8,054,407	544,448	1,008,450	84,746	(1,691,775)	5,983,376
MFS International Intrinsic Value Portfolio	8,024,105	980,234	779,580	(21,474)	(2,206,077)	5,997,208
MFS Limited Maturity Portfolio	47,985,772	1,318,506	10,452,840	(464,186)	(2,379,684)	36,007,568
MFS Mid Cap Growth Series	16,090,595	3,582,491	1,313,222	(579,301)	(5,916,443)	11,864,120
MFS Mid Cap Value Portfolio	16,165,941	1,623,387	3,298,755	509,659	(3,008,218)	11,992,014
MFS New Discovery Series	3,890,147	1,579,564	297,838	(253,981)	(1,933,180)	2,984,712
MFS New Discovery Value Portfolio	4,031,596	818,896	722,839	116,661	(1,237,755)	3,006,559
MFS Research International Portfolio	16,085,915	980,599	1,719,125	45,460	(3,383,706)	12,009,143
MFS Research Series	24,053,763	3,057,511	2,610,997	428,856	(7,032,615)	17,896,518
MFS Total Return Bond Series	67,998,054	2,300,888	8,240,752	(909,869)	(10,372,458)	50,775,863
MFS Value Series	24,175,763	1,635,871	4,920,848	1,283,608	(4,168,556)	18,005,838
	$402,065,611	$34,314,309	$54,468,627	$(2,579,329)	$(78,765,821)	$300,566,143

Affiliated Issuers	Dividend Income	Capital Gain Distributions
MFS Global Governments Portfolio	$400,890	$—
MFS Global Real Estate Portfolio	179,165	394,470
MFS Government Securities Portfolio	673,250	—
MFS Growth Series	97,462	2,175,783
MFS High Yield Portfolio	921,401	—
MFS Inflation-Adjusted Bond Portfolio	1,675,272	1,775,818
MFS Institutional Money Market Portfolio	25,159	—
MFS International Growth Portfolio	74,617	348,892
MFS International Intrinsic Value Portfolio	76,623	265,658
MFS Limited Maturity Portfolio	784,686	153,279
MFS Mid Cap Growth Series	—	1,880,386
MFS Mid Cap Value Portfolio	318,843	904,246
MFS New Discovery Series	328,575	689,008
MFS New Discovery Value Portfolio	312,365	408,369
MFS Research International Portfolio	423,769	127,986
MFS Research Series	393,949	2,231,461
MFS Total Return Bond Series	1,538,967	648,571
MFS Value Series	368,802	1,098,997
	$8,593,795	$13,102,924

(8) LIBOR Transition

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MFS Conservative Allocation Portfolio

Notes to Financial Statements - continued

(9) Russia and Ukraine Conflict

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MFS Conservative Allocation Portfolio

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of MFS Variable Insurance Trust III and the Shareholders of MFS Conservative Allocation Portfolio:

Opinion on the Financial Statements and Financial Highlights

We have audited the accompanying statement of assets and liabilities of MFS Conservative Allocation Portfolio (the “Fund”), including the portfolio of investments, as of December 31, 2022, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of December 31, 2022, and 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 five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

DELOITTE & TOUCHE LLP

Boston, Massachusetts
February 15, 2023

We have served as the auditor of one or more of the MFS investment companies since 1924.

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MFS Conservative Allocation Portfolio

Trustees and Officers — Identification and Background

Name, Age	Position(s) Held with Fund	Trustee/Officer Since^(h)	Number of MFS Funds overseen by the Trustee	Principal Occupations During the Past Five Years	Other Directorships During the Past Five Years ^(j)
INTERESTED TRUSTEE
Michael W. Roberge ^(k) (age 56)	Trustee	January 2021	136	Massachusetts Financial Services Company, Chairman (since January 2021); Chief Executive Officer (since January 2017); Director; Chairman of the Board (since January 2022); President (until December 2018); Chief Investment Officer (until December 2018)	N/A
INDEPENDENT TRUSTEES
John P. Kavanaugh (age 68)	Trustee and Chair of Trustees	January 2009	136	Private investor	N/A
Steven E. Buller (age 71)	Trustee	February 2014	136	Private investor	N/A
John A. Caroselli (age 68)	Trustee	March 2017	136	Private investor; JC Global Advisors, LLC (management consulting), President (since 2015)	N/A
Maureen R. Goldfarb (age 67)	Trustee	January 2009	136	Private investor	N/A
Peter D. Jones (age 67)	Trustee	January 2019	136	Private investor	N/A
James W. Kilman, Jr. (age 61)	Trustee	January 2019	136	Burford Capital Limited (finance and investment management), Senior Advisor (since May 3, 2021), Chief Financial Officer (2019 - May 2, 2021); KielStrand Capital LLC (family office), Chief Executive Officer (since 2016)	Alpha-En Corporation, Director (2016-2019)
Clarence Otis, Jr. (age 66)	Trustee	March 2017	136	Private investor	VF Corporation, Director; Verizon Communications, Inc., Director; The Travelers Companies, Director
Maryanne L. Roepke (age 66)	Trustee	May 2014	136	Private investor	N/A
Laurie J. Thomsen (age 65)	Trustee	March 2005	136	Private investor	The Travelers Companies, Director; Dycom Industries, Inc., Director

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MFS Conservative Allocation Portfolio

Trustees and Officers - continued

Name, Age	Position(s) Held with Fund	Trustee/Officer Since^(h)	Number of MFS Funds for which the Person is an Officer	Principal Occupations During the Past Five Years
OFFICERS
Christopher R. Bohane ^(k) (age 49)	Assistant Secretary and Assistant Clerk	July 2005	136	Massachusetts Financial Services Company, Senior Vice President and Senior Managing Counsel
Kino Clark ^(k) (age 54)	Assistant Treasurer	January 2012	136	Massachusetts Financial Services Company, Vice President
John W. Clark, Jr. ^(k) (age 55)	Assistant Treasurer	April 2017	136	Massachusetts Financial Services Company, Vice President
David L. DiLorenzo ^(k) (age 54)	President	July 2005	136	Massachusetts Financial Services Company, Senior Vice President
Heidi W. Hardin ^(k) (age 55)	Secretary and Clerk	April 2017	136	Massachusetts Financial Services Company, Executive Vice President and General Counsel
Brian E. Langenfeld ^(k) (age 49)	Assistant Secretary and Assistant Clerk	June 2006	136	Massachusetts Financial Services Company, Vice President and Managing Counsel
Rosa E. Licea-Mailloux ^(k) (age 46)	Chief Compliance Officer	March 2022	136	Massachusetts Financial Services Company, Vice President (since 2018); Director of Corporate Compliance (2018-2021), Senior Director Compliance (2021-2022), Senior Managing Director of North American Compliance & Chief Compliance Officer (since March 2022); Natixis Investment Managers (investment management), Funds Chief Compliance Officer, Deputy General Counsel & Senior Vice President (until 2018)
Amanda S. Mooradian ^(k) (age 43)	Assistant Secretary and Assistant Clerk	September 2018	136	Massachusetts Financial Services Company, Assistant Vice President and Senior Counsel
Susan A. Pereira ^(k) (age 52)	Assistant Secretary and Assistant Clerk	July 2005	136	Massachusetts Financial Services Company, Vice President and Managing Counsel
Kasey L. Phillips ^(k) (age 52)	Assistant Treasurer	September 2012	136	Massachusetts Financial Services Company, Vice President
Matthew A. Stowe ^(k) (age 48)	Assistant Secretary and Assistant Clerk	October 2014	136	Massachusetts Financial Services Company, Vice President and Senior Managing Counsel
William B. Wilson ^(k) (age 40)	Assistant Secretary and Assistant Clerk	October 2022	136	Massachusetts Financial Services Company, Assistant Vice President and Counsel
James O. Yost ^(k) (age 62)	Treasurer	September 1990	136	Massachusetts Financial Services Company, Senior Vice President

(h)	Date first appointed to serve as Trustee/Officer of an MFS Fund. Each Trustee has served continuously since appointment unless indicated otherwise. From January 2012 through December 2016, Messrs. DiLorenzo and Yost served as Treasurer and Deputy Treasurer of the Funds, respectively.

(j)	Directorships or trusteeships of companies required to report to the Securities and Exchange Commission (i.e., “public companies”).

(k)

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MFS Conservative Allocation Portfolio

Trustees and Officers - continued

Messrs. Buller, Kilman and Otis and Ms. Roepke are members of the Trust’s Audit Committee.

Each of the Interested Trustees and certain Officers hold comparable officer positions with certain affiliates of MFS.

The Statement of Additional Information for a Fund includes further information about the Trustees and is available without charge upon request by calling 1-800-225-2606.

Investment Adviser	Custodian
Massachusetts Financial Services Company 111 Huntington Avenue Boston, MA 02199-7618	State Street Bank and Trust Company 1 Lincoln Street Boston, MA 02111-2900

Distributor	Independent Registered Public Accounting Firm
MFS Fund Distributors, Inc. 111 Huntington Avenue Boston, MA 02199-7618	Deloitte & Touche LLP 200 Berkeley Street Boston, MA 02116

Portfolio Manager(s)
Joseph Flaherty Natalie Shapiro

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MFS Conservative Allocation Portfolio

Board Review of Investment Advisory Agreement

MFS Conservative Allocation Portfolio

Based on information provided by Broadridge and MFS, the Trustees reviewed the Fund’s total return investment performance as well as the Broadridge performance universe over various time periods. The Trustees placed particular emphasis on the total return performance of the Fund’s Initial Class shares in comparison to the performance of funds in its Broadridge performance universe over the five-year period ended December 31, 2021, which the Trustees believed was a long enough period to reflect differing market conditions. The total return performance of the Fund’s Initial Class shares was in the 1st quintile relative to the other funds in the universe for this five-year period (the 1st quintile being the best performers and the 5th quintile being the worst performers). The total return performance of the Fund’s Initial Class shares was in the 4th quintile for the one-year period and the 2nd quintile for the three-year period ended December 31, 2021 relative to the Broadridge performance universe. Because of the passage of time, these performance results may differ from the performance results for more recent periods, including those shown elsewhere in this report.

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MFS Conservative Allocation Portfolio

Board Review of Investment Advisory Agreement - continued

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MFS Conservative Allocation Portfolio

Proxy Voting Policies and Information

Quarterly Portfolio Disclosure

FURTHER INFORMATION

Information About Fund Contracts and Legal Claims

Federal Tax Information (unaudited)

The following information is provided pursuant to provisions of the Internal Revenue Code.

The fund designates $27,724,000 as capital gain dividends paid during the fiscal year.

For corporate shareholders, 11.62% of the ordinary income dividends paid during the fiscal year qualify for the corporate dividends received deduction.

The fund intends to pass through the maximum amount allowable as Section 163(j) Interest Dividends as defined in Treasury Regulation §1.163(j)-1(b).

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rev. 3/16

FACTS

WHAT DOES MFS DO WITH YOUR PERSONAL INFORMATION?

Why?

What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include:
	• Social Security number and account balances
	• Account transactions and transaction history
	• Checking account information and wire transfer instructions
	When you are no longer our customer, we continue to share your information as described in this notice.

How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MFS chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MFS share?	Can you limit this sharing?
For our everyday business purposes – such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes – to offer our products and services to you	No	We don't share
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes – information about your transactions and experiences	No	We don't share
For our affiliates' everyday business purposes – information about your creditworthiness	No	We don't share
For nonaffiliates to market to you	No	We don't share

Questions?

Call 800-225-2606 or go to mfs.com.

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Page 2

Who we are
Who is providing this notice?	MFS Funds, MFS Investment Management, MFS Institutional Advisors, Inc., and MFS Heritage Trust Company.

What we do
How does MFS protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include procedural, electronic, and physical safeguards for the protection of the personal information we collect about you.
How does MFS collect my personal information?	We collect your personal information, for example, when you
	• open an account or provide account information
	• direct us to buy securities or direct us to sell your securities
	• make a wire transfer
	We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only
	• sharing for affiliates' everyday business purposes – information about your creditworthiness
	• affiliates from using your information to market to you
	• sharing for nonaffiliates to market to you
	State laws and individual companies may give you additional rights to limit sharing.

Definitions
Affiliates	Companies related by common ownership or control. They can be financial and nonfinancial companies.
	• MFS does not share personal information with affiliates, except for everyday business purposes as described on page one of this notice.
Nonaffiliates	Companies not related by common ownership or control. They can be financial and nonfinancial companies.
	• MFS does not share with nonaffiliates so they can market to you.
Joint marketing	A formal agreement between nonaffiliated financial companies that together market financial products or services to you.
	• MFS doesn't jointly market.

Other important information

If you own an MFS product or receive an MFS service in the name of a third party such as a bank or broker-dealer, their privacy policy may apply to you instead of ours.

Table of Contents

Annual Report

December 31, 2022

MFS^® Global Real
Estate Portfolio

MFS^® Variable Insurance Trust III

VRE-ANN

MFS^® Global Real Estate Portfolio

CONTENTS

The 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.

NOT FDIC INSURED • MAY LOSE VALUE • NO BANK OR CREDIT UNION GUARANTEE •

NOT A DEPOSIT • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY OR NCUA/NCUSIF

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MFS Global Real Estate Portfolio

LETTER FROM THE CHAIR AND CEO

Dear Shareholders:

During times of market transition, it is important to have a deep understanding of company fundamentals, and we have built our unique global research platform to do just that.

Respectfully,

Michael W. Roberge

Chair and Chief Executive Officer

MFS Investment Management

February 15, 2023

The opinions expressed in this letter are subject to change and may not be relied upon for investment advice. No forecasts can be guaranteed.

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MFS Global Real Estate Portfolio

Portfolio Composition

Portfolio structure

Top ten holdings

Prologis, Inc., REIT	8.2%
Equinix, Inc., REIT	5.2%
Simon Property Group, Inc., REIT	4.9%
Extra Space Storage, Inc., REIT	3.2%
Equity Lifestyle Properties, Inc., REIT	2.9%
Goodman Group, REIT	2.8%
Sun Communities, Inc., REIT	2.7%
CapitaLand Investment Ltd.	2.7%
Weyerhaeuser Co., REIT	2.6%
Alexandria Real Estate Equities, Inc., REIT	2.5%

GICS equity industries (g)

Real Estate	90.9%
Communication Services	3.1%
Health Care	2.0%
Financials	1.5%

Issuer country weightings (x)

United States	57.9%
United Kingdom	10.2%
Australia	5.5%
Japan	5.1%
Hong Kong	4.7%
Singapore	4.3%
Canada	4.0%
Germany	2.4%
Spain	1.8%
Other Countries	4.1%

Currency exposure weightings (y)

United States Dollar	57.9%
British Pound Sterling	10.2%
Euro	5.8%
Australian Dollar	5.5%
Japanese Yen	5.1%
Hong Kong Dollar	4.7%
Singapore Dollar	4.3%
Canadian Dollar	4.0%
Mexican Peso	1.2%
Other Currencies	1.3%

(g)

(x)	Represents the portfolio’s exposure to issuer countries as a percentage of a portfolio’s net assets. For purposes of this presentation, United States includes Cash & Cash Equivalents.

(y)	Represents the portfolio’s exposure to a particular currency as a percentage of a portfolio's net assets. For purposes of this presentation, United States Dollar includes Cash & Cash Equivalents.

Percentages are based on net assets as of December 31, 2022.

The portfolio is actively managed and current holdings may be different.

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MFS Global Real Estate Portfolio

Management Review

Summary of Results

For the twelve months ended December 31, 2022, Initial Class shares of the MFS Global Real Estate Portfolio (fund) provided a total return of -26.94%, while Service Class shares of the fund provided a total return of -27.14%. These compare with a return of -25.09% over the same period for the fund’s benchmark, the FTSE EPRA Nareit Developed Real Estate Index (net div).

Market Environment

Detractors from Performance

Relative to the FTSE EPRA Nareit Developed Real Estate Index, the combination of an underweight position and security selection within Japanese real estate investments held back relative performance, led by the fund’s holdings of real estate services provider KATITAS(b) (Japan).

Stock selection within Hong Kong-based real estate investments also weighed on relative results. Here, not owning shares of real estate development company Sun Hung Kai Properties (Hong Kong) weakened relative performance as the stock outperformed the benchmark.

Other notable relative detractors during the reporting period included the fund’s positions in industrial property and business space management firm Goodman Group(b) (Australia) and telecommunication infrastructure services providers Cellnex Telecom(b) (Spain) and Helios Towers(b) (United Kingdom). Additionally, the fund’s overweight positions in residential real estate management company Vonovia (Germany), real estate investment trust Shaftesbury (United Kingdom), self-storage services provider Big Yellow Group (United Kingdom) and real estate company LEG Immobilien (Germany), and not owning shares of real estate company Realty Income, further held back relative performance.

Contributors to Performance

The fund’s avoidance of Sweden-based investments contributed to relative performance. During the reporting period, there were no individual stocks within this country, either in the fund or in the benchmark, that were among the fund's largest relative contributors.

Stock selection within US real estate investments further supported relative results. Here, the fund’s holdings of post-acute healthcare services provider Encompass Health(b), and its overweight positions in real estate investment companies Phillips Edison & Co., National Retail Properties, Brixmor Property Group, and property developer and manager Simon Property Group aided relative returns. Not owning shares of real estate investment trust Digital Realty Trust also helped relative performance.

The fund’s exposure to real estate investments within Mexico benefited relative returns, led by the fund’s holdings of real estate developer Corporación Inmobiliaria Vesta(b) (Mexico).

Elsewhere, the fund's overweight positions in real estate development company Swire Properties (Hong Kong) and real estate investment trust CapitaLand Investment (Singapore) further strengthened relative performance.

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MFS Global Real Estate Portfolio

Management Review - continued

The fund’s cash and/or cash equivalents position during the period also contributed to relative performance. Under normal market conditions, the fund strives to be fully invested and generally holds cash to buy new holdings and to provide liquidity. In a period when equity markets fell, as measured by the fund’s benchmark, holding cash helped performance versus the benchmark, which has no cash position.

Respectfully,

Portfolio Manager(s)

Rick Gable and Mark Syn

Note to Shareholders: Effective March 31, 2022, Mark Syn was added as a Portfolio Manager of the fund.

(b)	Security is not a benchmark constituent.

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MFS Global Real Estate Portfolio

Performance Summary Through 12/31/22

Growth of a Hypothetical $10,000 Investment

Total Returns through 12/31/22

Average annual total returns

Share Class	Class Inception Date	1-yr	5-yr	10-yr
Initial Class	12/07/98	(26.94)%	3.49%	5.91%
Service Class	2/01/04	(27.14)%	3.23%	5.65%

Comparative benchmark(s)

FTSE EPRA Nareit Developed Real Estate Index (net div) (f)

(25.09)%

(0.23)%

2.99%

(f)	Source: FactSet Research Systems Inc.

Benchmark Definition(s)

It is not possible to invest directly in an index.

(c)

Notes to Performance Summary

Average annual total return represents the average annual change in value for each share class for the periods presented.

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MFS Global Real Estate Portfolio

Performance Summary – continued

From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.

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MFS Global Real Estate Portfolio

Expense Table

Fund expenses borne by the shareholders during the period,
July 1, 2022 through December 31, 2022

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2022 through December 31, 2022.

Actual Expenses

Hypothetical Example for Comparison Purposes

Share Class		Annualized Expense Ratio	Beginning Account Value 7/01/22	Ending Account Value 12/31/22	Expenses Paid During Period (p) 7/01/22-12/31/22
Initial Class	Actual	0.92%	$1,000.00	$939.45	$4.50
Initial Class	Hypothetical (h)	0.92%	$1,000.00	$1,020.57	$4.69
Service Class	Actual	1.17%	$1,000.00	$938.19	$5.72
Service Class	Hypothetical (h)	1.17%	$1,000.00	$1,019.31	$5.96

(h)	5% class return per year before expenses.

(p)	“Expenses Paid During Period” are equal to each class's annualized expense ratio, as shown above, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

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MFS Global Real Estate Portfolio

Portfolio of Investments − 12/31/22

The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.

Issuer	Shares/Par	Value ($)
Common Stocks – 97.5%
Brokerage & Asset Managers – 1.2%
Brookfield Corp.	63,185	$ 1,987,014
Construction – 5.8%
American Homes 4 Rent, “A”, REIT	86,698	$ 2,613,078
AvalonBay Communities, Inc., REIT	22,881	3,695,739
Essex Property Trust, Inc., REIT	14,298	3,030,032
		$9,338,849
Engineering - Construction – 1.2%
Corporacion Inmobiliaria Vesta S.A.B. de C.V.	824,013	$ 1,966,738
Financial Institutions – 0.3%
Brookfield Corp., “A” (a)	15,796	$ 452,298
Forest & Paper Products – 5.0%
Rayonier, Inc., REIT	116,265	$ 3,832,094
Weyerhaeuser Co., REIT	132,402	4,104,462
		$7,936,556
Medical & Health Technology & Services – 2.0%
Encompass Health Corp.	53,080	$ 3,174,715
Network & Telecom – 5.2%
Equinix, Inc., REIT	12,750	$ 8,351,633
Real Estate – 70.6%
Alexandria Real Estate Equities, Inc., REIT	27,346	$ 3,983,492
Big Yellow Group PLC, REIT	207,693	2,880,008
Brixmor Property Group, Inc., REIT	169,628	3,845,467
Canadian Apartment Properties, REIT	30,908	974,264
CapitaLand India Trusts IEU, REIT	1,795,900	1,515,131
CapitaLand Investment Ltd.	1,577,400	4,357,459
Douglas Emmett, Inc., REIT	105,591	1,655,667
Embassy Office Parks, REIT	480,604	1,952,218
Equity Lifestyle Properties, Inc., REIT	71,246	4,602,492
ESR Group Ltd.	1,369,600	2,874,152
Extra Space Storage, Inc., REIT	34,548	5,084,775
Farmland Partners, Inc., REIT	31,699	394,969
Goodman Group, REIT	381,662	4,484,001
Grainger PLC	1,223,109	3,726,268
Granite REIT	59,333	3,027,122
Heiwa Real Estate Co. Ltd.	30,800	853,866
Japan Logistics Fund, Inc., REIT	964	2,299,799
KATITAS Co. Ltd.	170,100	3,914,218
LEG Immobilien SE	17,121	1,115,391
National Retail Properties, Inc., REIT	83,871	3,837,937
National Storage, REIT	2,036,026	3,201,873
Parkway Real Estate LLC, REIT	331,400	930,315
Phillips Edison & Co., REIT	113,385	3,610,178
Prologis, Inc., REIT	116,701	13,155,704
Region RE Ltd., REIT	444,636	820,400
Rural Funds Group, REIT	203,263	331,848
SEGRO PLC, REIT	289,900	2,676,224
Shaftesbury PLC, REIT	645,863	2,873,403

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MFS Global Real Estate Portfolio

Portfolio of Investments – continued

Issuer	Shares/Par	Value ($)
Common Stocks – continued
Real Estate – continued
Shurgard Self Storage S.A.	56,790	$ 2,610,440
Simon Property Group, Inc., REIT	66,316	7,790,804
Sino Land Co. Ltd.	2,036,613	2,536,590
Star Asia Investment Corp., REIT	2,764	1,157,947
Sun Communities, Inc., REIT	30,709	4,391,387
Swire Properties Ltd.	853,400	2,158,956
Unite Group PLC, REIT	181,103	1,992,395
Urban Edge Properties, REIT	179,039	2,522,659
Vonovia SE, REIT	114,943	2,709,356
		$112,849,175
Telecommunications - Wireless – 4.9%
American Tower Corp., REIT	12,336	$ 2,613,505
Cellnex Telecom S.A.	85,449	2,841,659
SBA Communications Corp., REIT	8,206	2,300,224
		$7,755,388
Telephone Services – 1.3%
Helios Towers PLC (a)	1,632,365	$ 2,093,828
Total Common Stocks (Identified Cost, $143,522,455)		$155,906,194
Investment Companies (h) – 2.3%
Money Market Funds – 2.3%
MFS Institutional Money Market Portfolio, 4.02% (v) (Identified Cost, $3,668,602)	3,668,300	$ 3,669,400
Other Assets, Less Liabilities – 0.2%		362,243
Net Assets – 100.0%		$159,937,837

(a)	Non-income producing security.
(h)	An affiliated issuer, which may be considered one in which the fund owns 5% or more of the outstanding voting securities, or a company which is under common control. At period end, the aggregate values of the fund's investments in affiliated issuers and in unaffiliated issuers were $3,669,400 and $155,906,194, respectively.
(v)	Affiliated issuer that is available only to investment companies managed by MFS. The rate quoted for the MFS Institutional Money Market Portfolio is the annualized seven-day yield of the fund at period end.

The following abbreviations are used in this report and are defined:
IEU	International Equity Unit
REIT	Real Estate Investment Trust

See Notes to Financial Statements

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MFS Global Real Estate Portfolio

Financial Statements

Statement of Assets and Liabilities

This statement represents your fund’s balance sheet, which details the assets and liabilities comprising the total value of the fund.

At 12/31/22 Assets
Investments in unaffiliated issuers, at value (identified cost, $143,522,455)	$155,906,194
Investments in affiliated issuers, at value (identified cost, $3,668,602)	3,669,400
Foreign currency, at value (identified cost, $23)	23
Receivables for
Fund shares sold	174,270
Dividends	421,085
Receivable from investment adviser	4,469
Other assets	1,101
Total assets	$160,176,542
Liabilities
Payables for
Fund shares reacquired	$155,906
Payable to affiliates
Administrative services fee	268
Shareholder servicing costs	50
Distribution and/or service fees	1,129
Payable for independent Trustees' compensation	132
Accrued expenses and other liabilities	81,220
Total liabilities	$238,705
Net assets	$159,937,837
Net assets consist of
Paid-in capital	$136,985,979
Total distributable earnings (loss)	22,951,858
Net assets	$159,937,837
Shares of beneficial interest outstanding	11,795,019

	Net assets	Shares outstanding	Net asset value per share
Initial Class	$104,737,489	8,194,904	$12.78
Service Class	55,200,348	3,600,115	15.33

See Notes to Financial Statements

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MFS Global Real Estate Portfolio

Financial Statements

Statement of Operations

This statement describes how much your fund earned in investment income and accrued in expenses. It also describes any gains and/or losses generated by fund operations.

Year ended 12/31/22
Net investment income (loss)
Income
Dividends	$4,683,877
Dividends from affiliated issuers	56,366
Other	8,198
Foreign taxes withheld	(162,297)
Total investment income	$4,586,144
Expenses
Management fee	$1,604,958
Distribution and/or service fees	147,062
Shareholder servicing costs	12,285
Administrative services fee	37,211
Independent Trustees' compensation	5,010
Custodian fee	28,045
Shareholder communications	17,180
Audit and tax fees	71,558
Legal fees	859
Miscellaneous	28,883
Total expenses	$1,953,051
Reduction of expenses by investment adviser	(165,695)
Net expenses	$1,787,356
Net investment income (loss)	$2,798,788
Realized and unrealized gain (loss)
Realized gain (loss) (identified cost basis)
Unaffiliated issuers	$11,982,292
Affiliated issuers	(48)
Foreign currency	(27,986)
Net realized gain (loss)	$11,954,258
Change in unrealized appreciation or depreciation
Unaffiliated issuers	$(72,464,771)
Affiliated issuers	798
Translation of assets and liabilities in foreign currencies	(4,984)
Net unrealized gain (loss)	$(72,468,957)
Net realized and unrealized gain (loss)	$(60,514,699)
Change in net assets from operations	$(57,715,911)

See Notes to Financial Statements

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MFS Global Real Estate Portfolio

Financial Statements

Statements of Changes in Net Assets

These statements describe the increases and/or decreases in net assets resulting from operations, any distributions, and any shareholder transactions.

	Year ended
	12/31/22	12/31/21
Change in net assets
From operations
Net investment income (loss)	$2,798,788	$2,407,206
Net realized gain (loss)	11,954,258	15,733,020
Net unrealized gain (loss)	(72,468,957)	35,301,403
Change in net assets from operations	$(57,715,911)	$53,441,629
Total distributions to shareholders	$(14,602,234)	$(2,751,003)
Change in net assets from fund share transactions	$13,153,425	$(17,145,580)
Total change in net assets	$(59,164,720)	$33,545,046
Net assets
At beginning of period	219,102,557	185,557,511
At end of period	$159,937,837	$219,102,557

See Notes to Financial Statements

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MFS Global Real Estate Portfolio

Financial Statements

Financial Highlights

Initial Class	Year ended
	12/31/22	12/31/21	12/31/20	12/31/19	12/31/18
Net asset value, beginning of period	$19.21	$14.98	$15.91	$13.10	$14.27
Income (loss) from investment operations
Net investment income (loss) (d)	$0.25	$0.22	$0.28	$0.35	$0.42
Net realized and unrealized gain (loss)	(5.30)	4.27	(0.14)	3.14	(0.79)
Total from investment operations	$(5.05)	$4.49	$0.14	$3.49	$(0.37)
Less distributions declared to shareholders
From net investment income	$(0.26)	$(0.26)	$(0.70)	$(0.58)	$(0.58)
From net realized gain	(1.12)	—	(0.37)	(0.10)	(0.22)
Total distributions declared to shareholders	$(1.38)	$(0.26)	$(1.07)	$(0.68)	$(0.80)
Net asset value, end of period (x)	$12.78	$19.21	$14.98	$15.91	$13.10
Total return (%) (k)(r)(s)(x)	(26.94)	30.12	1.49	26.87	(3.03)
Ratios (%) (to average net assets) and Supplemental data:
Expenses before expense reductions	1.01	1.01	1.02	1.01	1.01
Expenses after expense reductions	0.92	0.92	0.92	0.92	0.92
Net investment income (loss)	1.65	1.27	2.00	2.31	3.00
Portfolio turnover	32	26	43	36	24
Net assets at end of period (000 omitted)	$104,737	$149,746	$127,523	$132,530	$99,826

Service Class	Year ended
	12/31/22	12/31/21	12/31/20	12/31/19	12/31/18
Net asset value, beginning of period	$22.70	$17.66	$18.56	$15.17	$16.41
Income (loss) from investment operations
Net investment income (loss) (d)	$0.26	$0.20	$0.29	$0.36	$0.44
Net realized and unrealized gain (loss)	(6.30)	5.06	(0.17)(g)	3.66	(0.93)
Total from investment operations	$(6.04)	$5.26	$0.12	$4.02	$(0.49)
Less distributions declared to shareholders
From net investment income	$(0.21)	$(0.22)	$(0.65)	$(0.53)	$(0.53)
From net realized gain	(1.12)	—	(0.37)	(0.10)	(0.22)
Total distributions declared to shareholders	$(1.33)	$(0.22)	$(1.02)	$(0.63)	$(0.75)
Net asset value, end of period (x)	$15.33	$22.70	$17.66	$18.56	$15.17
Total return (%) (k)(r)(s)(x)	(27.14)	29.87	1.15	26.68	(3.33)
Ratios (%) (to average net assets) and Supplemental data:
Expenses before expense reductions	1.26	1.26	1.27	1.26	1.26
Expenses after expense reductions	1.17	1.17	1.17	1.17	1.17
Net investment income (loss)	1.42	1.02	1.75	2.07	2.74
Portfolio turnover	32	26	43	36	24
Net assets at end of period (000 omitted)	$55,200	$69,356	$58,035	$58,508	$53,577

See Notes to Financial Statements

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MFS Global Real Estate Portfolio

Financial Highlights - continued

(d)	Per share data is based on average shares outstanding.
(g)	The per share amount varies from the net realized and unrealized gain/loss for the period because of the timing of sales of fund shares and the per share amount of realized and unrealized gains and losses at such time.
(k)	The total return does not reflect expenses that apply to separate accounts. Inclusion of these charges would reduce the total return figures for all periods shown.
(r)	Certain expenses have been reduced without which performance would have been lower.
(s)	From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
(x)	The net asset values and total returns have been calculated on net assets which include adjustments made in accordance with U.S. generally accepted accounting principles required at period end for financial reporting purposes.

See Notes to Financial Statements

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MFS Global Real Estate Portfolio

Notes to Financial Statements

(1) Business and Organization

MFS Global Real Estate Portfolio (the fund) is a diversified series of MFS Variable Insurance Trust III (the trust). The trust is organized as a Delaware statutory 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, and qualified retirement and pension plans.

(2) Significant Accounting Policies

General — The preparation of financial statements in conformity with U.S. 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 increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. In the preparation of these financial statements, management has evaluated subsequent events occurring after the date of the fund’s Statement of Assets and Liabilities through the date that the financial statements were issued. The fund invests a significant amount of its net assets in U.S. and foreign real estate related investments and as a result is subject to certain risks associated with the direct ownership of real estate and the real estate industry in general. These include risks related to general, regional and local economic conditions; difficulties in valuing and disposing of real estate; fluctuations in interest rates and property tax rates, shifts in zoning laws, environmental regulations and other governmental action; cash flow dependency; increased operating expenses; lack of availability of mortgage funds; losses due to natural disasters; overbuilding; losses due to casualty or condemnation; changes in property values and rental rates; the management skill and creditworthiness of the manager; and other factors. The fund invests 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 market, economic, industrial, political, regulatory, geopolitical, environmental, public health, and other conditions.

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Notes to Financial Statements - continued

An investment may also be valued at fair value if the adviser determines that the investment’s value has been materially affected by events occurring after the close of the exchange or market on which the investment is principally traded (such as foreign exchange or market) and prior to the determination of the fund’s net asset value, or after the halt of trading of a specific security where trading does not resume prior to the close of the exchange or market on which the security is principally traded. Events that occur after foreign markets close (such as developments in foreign markets and significant movements in the U.S. markets) and prior to the determination of the fund’s net asset value may be deemed to have a material effect on the value of securities traded in foreign markets. Accordingly, the fund’s foreign equity securities may often be valued at fair value. The adviser generally relies on third-party pricing services or other information (such as the correlation with price movements of similar securities in the same or other markets; the type, cost and investment characteristics of the security; the business and financial condition of the issuer; and trading and other market data) to assist in determining whether to fair value and at what value to fair value an investment. The value of an investment for purposes of calculating the fund’s net asset value can differ depending on the source and method used to determine value. When fair valuation is used, the value of an investment used to determine the fund’s net asset value may differ from quoted or published prices for the same investment. There can be no assurance that the fund could obtain the fair value assigned to an investment if it were to sell the investment at the same time at which the fund determines its net asset value per share.

Financial Instruments	Level 1	Level 2	Level 3	Total
Equity Securities:
United States	$88,591,013	$—	$—	$88,591,013
United Kingdom	16,242,126	—	—	16,242,126
Australia	820,400	8,017,722	—	8,838,122
Japan	3,914,218	4,311,612	—	8,225,830
Hong Kong	2,874,152	4,695,546	—	7,569,698
Singapore	6,802,905	—	—	6,802,905
Canada	6,440,698	—	—	6,440,698
Germany	3,824,747	—	—	3,824,747
Spain	—	2,841,659	—	2,841,659
Other Countries	3,918,956	2,610,440	—	6,529,396
Mutual Funds	3,669,400	—	—	3,669,400
Total	$137,098,615	$22,476,979	$—	$159,575,594

For further information regarding security characteristics, see the Portfolio of Investments.

Foreign Currency Translation — 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 or on the reporting date for foreign denominated receivables and payables. 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 receivables, payables, 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.

Investment Transactions and Income — Investment transactions are recorded on the trade date. Dividends received in cash are recorded on the ex-dividend date. Certain dividends from foreign securities will be recorded when the fund is informed of the dividend if such information is obtained subsequent to the ex-dividend date. Dividend payments received in additional securities are recorded on the ex-dividend date in an amount equal to the value of the security on such date. In determining the net gain or loss on securities sold, the cost of securities is determined on the identified cost basis. Distributions from REITs may be characterized as

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MFS Global Real Estate Portfolio

Notes to Financial Statements - continued

ordinary income, net capital gain, or a return of capital to the fund. The proper characterization of REIT distributions is generally not known until after the end of each calendar year. As such, estimates are used in reporting the character of income and distributions for financial statement purposes. The fund receives substantial distributions from holdings in REITs.

Book/tax differences primarily relate to passive foreign investment companies and wash sale loss deferrals.

The tax character of distributions declared to shareholders for the last two fiscal years is as follows:

	Year ended 12/31/22	Year ended 12/31/21
Ordinary income (including any short-term capital gains)	$4,454,179	$2,751,003
Long-term capital gains	10,148,055	—
Total distributions	$14,602,234	$2,751,003

The federal tax cost and the tax basis components of distributable earnings were as follows:

As of 12/31/22
Cost of investments	$148,500,090
Gross appreciation	26,624,723
Gross depreciation	(15,549,219)
Net unrealized appreciation (depreciation)	$11,075,504
Undistributed ordinary income	1,158,123
Undistributed long-term capital gain	10,722,485
Other temporary differences	(4,254)
Total distributable earnings (loss)	$22,951,858

	Year ended 12/31/22	Year ended 12/31/21
Initial Class	$10,318,539	$2,105,622
Service Class	4,283,695	645,381
Total	$14,602,234	$2,751,003

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MFS Global Real Estate Portfolio

Notes to Financial Statements - continued

(3) Transactions with Affiliates

Investment Adviser — The fund has an investment advisory agreement with MFS to provide overall investment management and related administrative services and facilities to the fund. The management fee is computed daily and paid monthly at the following annual rates based on the fund's average daily net assets:

Up to $1 billion	0.90%
In excess of $1 billion and up to $2.5 billion	0.75%
In excess of $2.5 billion	0.65%

MFS has agreed in writing to reduce its management fee by a specified amount if certain MFS mutual fund assets exceed thresholds agreed to by MFS and the fund's Board of Trustees. Effective March 1, 2022, MFS has also agreed in writing to waive at least 0.01% of its management fee as part of this agreement. The agreement to waive at least 0.01% of the management fee will continue until modified by the fund's Board of Trustees, but such agreement will continue at least until April 30, 2024. For the year ended December 31, 2022, this management fee reduction amounted to $24,810, which is included in the reduction of total expenses in the Statement of Operations. The management fee incurred for the year ended December 31, 2022 was equivalent to an annual effective rate of 0.89% of the fund's average daily net assets.

The investment adviser has agreed in writing to pay a portion of the fund’s total annual operating expenses, excluding interest, taxes, extraordinary expenses, brokerage and transaction costs, certain tax reclaim recovery expenses (including contingency fees and closing agreement expenses), and investment-related expenses, such that total annual operating expenses do not exceed 0.92% of average daily net assets for the Initial Class shares and 1.17% of average daily net assets for the Service Class shares. This written agreement will continue until modified by the fund’s Board of Trustees, but such agreement will continue at least until April 30, 2024. For the year ended December 31, 2022, this reduction amounted to $140,885, which is included in the reduction of total expenses in the Statement of Operations.

Shareholder Servicing Agent — MFS Service Center, Inc. (MFSC), a wholly-owned subsidiary of MFS, receives a fee from the fund for its services as shareholder servicing agent. For the year ended December 31, 2022, the fee was $11,463, which equated to 0.0064% annually of the fund's average daily net assets. MFSC also receives reimbursement from the fund for out-of-pocket expenses paid by MFSC on behalf of the fund. For the year ended December 31, 2022, these costs amounted to $822.

Administrator — MFS provides certain financial, legal, shareholder communications, compliance, and other administrative services to the fund. Under an administrative services agreement, the fund reimburses MFS the costs incurred to provide these services. The fund is charged an annual fixed amount of $17,500 plus a fee based on average daily net assets. The administrative services fee incurred for the year ended December 31, 2022 was equivalent to an annual effective rate of 0.0209% of the fund's average daily net assets.

The adviser has voluntarily undertaken to reimburse the fund from its own resources on a quarterly basis for the cost of investment research embedded in the cost of the fund’s securities trades. This agreement may be rescinded at any time. For the year ended December 31, 2022, this reimbursement amounted to $8,148, which is included in “Other” income in the Statement of Operations.

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Notes to Financial Statements - continued

(4) Portfolio Securities

For the year ended December 31, 2022, purchases and sales of investments, other than short-term obligations, aggregated $58,812,912 and $56,836,884, respectively.

(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. Transactions in fund shares were as follows:

	Year ended 12/31/22		Year ended 12/31/21
	Shares	Amount	Shares	Amount
Shares sold
Initial Class	1,145,505	$17,068,075	1,366,223	$22,749,533
Service Class	889,626	16,159,669	530,725	11,017,801
	2,035,131	$33,227,744	1,896,948	$33,767,334
Shares issued to shareholders in reinvestment of distributions
Initial Class	734,939	$10,318,539	118,161	$2,105,622
Service Class	254,074	4,283,695	30,630	645,381
	989,013	$14,602,234	148,791	$2,751,003
Shares reacquired
Initial Class	(1,480,461)	$(23,560,753)	(2,204,570)	$(37,592,076)
Service Class	(599,069)	(11,115,800)	(791,441)	(16,071,841)
	(2,079,530)	$(34,676,553)	(2,996,011)	$(53,663,917)
Net change
Initial Class	399,983	$3,825,861	(720,186)	$(12,736,921)
Service Class	544,631	9,327,564	(230,086)	(4,408,659)
	944,614	$13,153,425	(950,272)	$(17,145,580)

The fund is one of several mutual funds in which certain MFS funds may invest. The MFS funds do not invest in the underlying funds for the purpose of exercising management or control. At the end of the period, the MFS Moderate Allocation Portfolio, the MFS Growth Allocation Portfolio, and the MFS Conservative Allocation Portfolio were the owners of record of approximately 19%, 8%, and 4%, respectively, of the value of outstanding voting shares of the fund.

(6) Line of Credit

The fund and certain other funds managed by MFS participate in a $1.45 billion unsecured committed line of credit of which $1.2 billion is reserved for use by the fund and certain other MFS U.S. funds. The line of credit is provided by a syndicate of banks under a credit agreement. Borrowings may be made for temporary financing needs. Interest is charged to each fund, based on its borrowings, generally at a rate equal to the highest of 1) Daily Simple SOFR (Secured Overnight Financing Rate) plus 0.10%, 2) the Federal Funds Effective Rate, or 3) the Overnight Bank Funding Rate, each plus an agreed upon spread. A commitment fee, based on the average daily unused portion of the committed line of credit, is allocated among the participating funds. The line of credit expires on March 16, 2023 unless extended or renewed. In addition, the fund and other funds managed by MFS have established unsecured uncommitted borrowing arrangements with certain banks for temporary financing needs. Interest is charged to each fund, based on its borrowings, at rates equal to customary reference rates plus an agreed upon spread. For the year ended December 31, 2022, the fund’s commitment fee and interest expense were $869 and $0, respectively, and are included in “Miscellaneous” expense in the Statement of Operations.

(7) Investments in Affiliated Issuers

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MFS Global Real Estate Portfolio

Notes to Financial Statements - continued

Affiliated Issuers	Beginning Value	Purchases	Sales Proceeds	Realized Gain (Loss)	Change in Unrealized Appreciation or Depreciation	Ending Value
MFS Institutional Money Market Portfolio	$4,160,356	$47,328,976	$47,820,682	$(48)	$798	$3,669,400

Affiliated Issuers	Dividend Income	Capital Gain Distributions
MFS Institutional Money Market Portfolio	$56,366	$—

(8) LIBOR Transition

(9) Russia and Ukraine Conflict

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MFS Global Real Estate Portfolio

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of MFS Variable Insurance Trust III and the Shareholders of MFS Global Real Estate Portfolio:

Opinion on the Financial Statements and Financial Highlights

We have audited the accompanying statement of assets and liabilities of MFS Global Real Estate Portfolio (the “Fund”), including the portfolio of investments, as of December 31, 2022, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of December 31, 2022, and 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 five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of December 31, 2022, by correspondence with the custodian. We believe that our audits provide a reasonable basis for our opinion.

DELOITTE & TOUCHE LLP

Boston, Massachusetts
February 15, 2023

We have served as the auditor of one or more of the MFS investment companies since 1924.

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MFS Global Real Estate Portfolio

Trustees and Officers — Identification and Background

Name, Age	Position(s) Held with Fund	Trustee/Officer Since^(h)	Number of MFS Funds overseen by the Trustee	Principal Occupations During the Past Five Years	Other Directorships During the Past Five Years ^(j)
INTERESTED TRUSTEE
Michael W. Roberge ^(k) (age 56)	Trustee	January 2021	136	Massachusetts Financial Services Company, Chairman (since January 2021); Chief Executive Officer (since January 2017); Director; Chairman of the Board (since January 2022); President (until December 2018); Chief Investment Officer (until December 2018)	N/A
INDEPENDENT TRUSTEES
John P. Kavanaugh (age 68)	Trustee and Chair of Trustees	January 2009	136	Private investor	N/A
Steven E. Buller (age 71)	Trustee	February 2014	136	Private investor	N/A
John A. Caroselli (age 68)	Trustee	March 2017	136	Private investor; JC Global Advisors, LLC (management consulting), President (since 2015)	N/A
Maureen R. Goldfarb (age 67)	Trustee	January 2009	136	Private investor	N/A
Peter D. Jones (age 67)	Trustee	January 2019	136	Private investor	N/A
James W. Kilman, Jr. (age 61)	Trustee	January 2019	136	Burford Capital Limited (finance and investment management), Senior Advisor (since May 3, 2021), Chief Financial Officer (2019 - May 2, 2021); KielStrand Capital LLC (family office), Chief Executive Officer (since 2016)	Alpha-En Corporation, Director (2016-2019)
Clarence Otis, Jr. (age 66)	Trustee	March 2017	136	Private investor	VF Corporation, Director; Verizon Communications, Inc., Director; The Travelers Companies, Director
Maryanne L. Roepke (age 66)	Trustee	May 2014	136	Private investor	N/A
Laurie J. Thomsen (age 65)	Trustee	March 2005	136	Private investor	The Travelers Companies, Director; Dycom Industries, Inc., Director

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MFS Global Real Estate Portfolio

Trustees and Officers - continued

Name, Age	Position(s) Held with Fund	Trustee/Officer Since^(h)	Number of MFS Funds for which the Person is an Officer	Principal Occupations During the Past Five Years
OFFICERS
Christopher R. Bohane ^(k) (age 49)	Assistant Secretary and Assistant Clerk	July 2005	136	Massachusetts Financial Services Company, Senior Vice President and Senior Managing Counsel
Kino Clark ^(k) (age 54)	Assistant Treasurer	January 2012	136	Massachusetts Financial Services Company, Vice President
John W. Clark, Jr. ^(k) (age 55)	Assistant Treasurer	April 2017	136	Massachusetts Financial Services Company, Vice President
David L. DiLorenzo ^(k) (age 54)	President	July 2005	136	Massachusetts Financial Services Company, Senior Vice President
Heidi W. Hardin ^(k) (age 55)	Secretary and Clerk	April 2017	136	Massachusetts Financial Services Company, Executive Vice President and General Counsel
Brian E. Langenfeld ^(k) (age 49)	Assistant Secretary and Assistant Clerk	June 2006	136	Massachusetts Financial Services Company, Vice President and Managing Counsel
Rosa E. Licea-Mailloux ^(k) (age 46)	Chief Compliance Officer	March 2022	136	Massachusetts Financial Services Company, Vice President (since 2018); Director of Corporate Compliance (2018-2021), Senior Director Compliance (2021-2022), Senior Managing Director of North American Compliance & Chief Compliance Officer (since March 2022); Natixis Investment Managers (investment management), Funds Chief Compliance Officer, Deputy General Counsel & Senior Vice President (until 2018)
Amanda S. Mooradian ^(k) (age 43)	Assistant Secretary and Assistant Clerk	September 2018	136	Massachusetts Financial Services Company, Assistant Vice President and Senior Counsel
Susan A. Pereira ^(k) (age 52)	Assistant Secretary and Assistant Clerk	July 2005	136	Massachusetts Financial Services Company, Vice President and Managing Counsel
Kasey L. Phillips ^(k) (age 52)	Assistant Treasurer	September 2012	136	Massachusetts Financial Services Company, Vice President
Matthew A. Stowe ^(k) (age 48)	Assistant Secretary and Assistant Clerk	October 2014	136	Massachusetts Financial Services Company, Vice President and Senior Managing Counsel
William B. Wilson ^(k) (age 40)	Assistant Secretary and Assistant Clerk	October 2022	136	Massachusetts Financial Services Company, Assistant Vice President and Counsel
James O. Yost ^(k) (age 62)	Treasurer	September 1990	136	Massachusetts Financial Services Company, Senior Vice President

(h)	Date first appointed to serve as Trustee/Officer of an MFS Fund. Each Trustee has served continuously since appointment unless indicated otherwise. From January 2012 through December 2016, Messrs. DiLorenzo and Yost served as Treasurer and Deputy Treasurer of the Funds, respectively.

(j)	Directorships or trusteeships of companies required to report to the Securities and Exchange Commission (i.e., “public companies”).

(k)

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MFS Global Real Estate Portfolio

Trustees and Officers - continued

Messrs. Buller, Kilman and Otis and Ms. Roepke are members of the Trust’s Audit Committee.

Each of the Interested Trustees and certain Officers hold comparable officer positions with certain affiliates of MFS.

The Statement of Additional Information for a Fund includes further information about the Trustees and is available without charge upon request by calling 1-800-225-2606.

Investment Adviser	Custodian
Massachusetts Financial Services Company 111 Huntington Avenue Boston, MA 02199-7618	State Street Bank and Trust Company 1 Lincoln Street Boston, MA 02111-2900

Distributor	Independent Registered Public Accounting Firm
MFS Fund Distributors, Inc. 111 Huntington Avenue Boston, MA 02199-7618	Deloitte & Touche LLP 200 Berkeley Street Boston, MA 02116

Portfolio Manager(s)
Rick Gable Mark Syn

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MFS Global Real Estate Portfolio

Board Review of Investment Advisory Agreement

MFS Global Real Estate Portfolio

In connection with their contract review meetings, the Trustees received and relied upon materials that included, among other items: (i) information provided by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent third party, on the investment performance of the Fund for various time periods ended December 31, 2021 and the investment performance of a group of funds with substantially similar investment classifications/objectives (the “Broadridge performance universe”), (ii) information provided by Broadridge on the Fund’s advisory fees and other expenses and the advisory fees and other expenses of comparable funds identified by Broadridge as well as all other funds in the same investment classification/category (the “Broadridge expense group and universe”), (iii) information provided by MFS on the advisory fees of portfolios of other clients of MFS, including institutional separate accounts and other clients, (iv) information as to whether and to what extent applicable expense waivers, reimbursements or fee “breakpoints” are observed for the Fund, (v) information regarding MFS’ financial results and financial condition, including MFS’ and certain of its affiliates’ estimated profitability from services performed for the Fund and the MFS Funds as a whole, and compared to MFS’ institutional business, (vi) MFS’ views regarding the outlook for the mutual fund industry and the strategic business plans of MFS, (vii) descriptions of various functions performed by MFS for the Funds, such as compliance monitoring and portfolio trading practices, and (viii) information regarding the overall organization of MFS, including information about MFS’ senior management and other personnel providing investment advisory, administrative and other services to the Fund and the other MFS Funds. The comparative performance, fee and expense information prepared and provided by Broadridge was not independently verified and the independent Trustees did not independently verify any information provided to them by MFS.

Based on information provided by Broadridge and MFS, the Trustees reviewed the Fund’s total return investment performance as well as the Broadridge performance universe over various time periods. The Trustees placed particular emphasis on the total return performance of the Fund’s Initial Class shares in comparison to the performance of funds in its Broadridge performance universe over the five-year period ended December 31, 2021, which the Trustees believed was a long enough period to reflect differing market conditions. The total return performance of the Fund’s Initial Class shares was in the 1st quintile relative to the other funds in the universe for this five-year period (the 1st quintile being the best performers and the 5th quintile being the worst performers). The total return performance of the Fund’s Initial Class shares was in the 2nd quintile for the one-year period and in the 1st quintile for the three-year period ended December 31, 2021 relative to the Broadridge performance universe. Because of the passage of time, these performance results may differ from the performance results for more recent periods, including those shown elsewhere in this report.

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Board Review of Investment Advisory Agreement - continued

The Trustees also considered whether the Fund may benefit from any economies of scale in the management of the Fund in the event of growth in assets of the Fund and/or growth in assets of the MFS Funds as a whole. They noted that the Fund’s advisory fee rate schedule is subject to contractual breakpoints that reduce the Fund’s advisory fee rate on average daily net assets over $1 billion and $2.5 billion. The Trustees also noted that MFS has agreed in writing to waive a portion of the management fees of certain MFS Funds, including the Fund, if the total combined assets of certain funds within the MFS Funds’ complex increase above agreed upon thresholds (the “group fee waiver”), enabling the Fund’s shareholders to share in the benefits from any economies of scale at the complex level. The group fee waiver is reviewed and renewed annually between the Board and MFS. The Trustees concluded that the breakpoints and the group fee waiver were sufficient to allow the Fund to benefit from economies of scale as its assets and overall complex assets grow.

The Trustees also considered the nature, quality, cost, and extent of administrative, transfer agency, and distribution services provided to the Fund by MFS and its affiliates under agreements and plans other than the investment advisory agreement, including any 12b-1 fees the Fund pays to MFS Fund Distributors, Inc., an affiliate of MFS. The Trustees also considered the nature, extent and quality of certain other services MFS performs or arranges for on the Fund’s behalf, which may include securities lending programs, directed expense payment programs, class action recovery programs, and MFS’ interaction with third-party service providers, principally custodians and sub-custodians. The Trustees concluded that the various non-advisory services provided by MFS and its affiliates on behalf of the Fund were satisfactory.

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Board Review of Investment Advisory Agreement - continued

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MFS Global Real Estate Portfolio

Proxy Voting Policies and Information

Quarterly Portfolio Disclosure

FURTHER INFORMATION

Information About Fund Contracts and Legal Claims

Federal Tax Information (unaudited)

The following information is provided pursuant to provisions of the Internal Revenue Code.

The fund designates $11,163,000 as capital gain dividends paid during the fiscal year.

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rev. 3/16

FACTS

WHAT DOES MFS DO WITH YOUR PERSONAL INFORMATION?

Why?

What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include:
	• Social Security number and account balances
	• Account transactions and transaction history
	• Checking account information and wire transfer instructions
	When you are no longer our customer, we continue to share your information as described in this notice.

How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MFS chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MFS share?	Can you limit this sharing?
For our everyday business purposes – such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes – to offer our products and services to you	No	We don't share
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes – information about your transactions and experiences	No	We don't share
For our affiliates' everyday business purposes – information about your creditworthiness	No	We don't share
For nonaffiliates to market to you	No	We don't share

Questions?

Call 800-225-2606 or go to mfs.com.

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Page 2

Who we are
Who is providing this notice?	MFS Funds, MFS Investment Management, MFS Institutional Advisors, Inc., and MFS Heritage Trust Company.

What we do
How does MFS protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include procedural, electronic, and physical safeguards for the protection of the personal information we collect about you.
How does MFS collect my personal information?	We collect your personal information, for example, when you
	• open an account or provide account information
	• direct us to buy securities or direct us to sell your securities
	• make a wire transfer
	We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only
	• sharing for affiliates' everyday business purposes – information about your creditworthiness
	• affiliates from using your information to market to you
	• sharing for nonaffiliates to market to you
	State laws and individual companies may give you additional rights to limit sharing.

Definitions
Affiliates	Companies related by common ownership or control. They can be financial and nonfinancial companies.
	• MFS does not share personal information with affiliates, except for everyday business purposes as described on page one of this notice.
Nonaffiliates	Companies not related by common ownership or control. They can be financial and nonfinancial companies.
	• MFS does not share with nonaffiliates so they can market to you.
Joint marketing	A formal agreement between nonaffiliated financial companies that together market financial products or services to you.
	• MFS doesn't jointly market.

Other important information

If you own an MFS product or receive an MFS service in the name of a third party such as a bank or broker-dealer, their privacy policy may apply to you instead of ours.

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Annual Report

December 31, 2022

MFS^® Growth Allocation Portfolio

MFS^® Variable Insurance Trust III

VGA-ANN

MFS^® Growth Allocation Portfolio

CONTENTS

The 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.

NOT FDIC INSURED • MAY LOSE VALUE • NO BANK OR CREDIT UNION GUARANTEE •

NOT A DEPOSIT • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY OR NCUA/NCUSIF

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MFS Growth Allocation Portfolio

LETTER FROM THE CHAIR AND CEO

Dear Shareholders:

During times of market transition, it is important to have a deep understanding of company fundamentals, and we have built our unique global research platform to do just that.

Respectfully,

Michael W. Roberge

Chair and Chief Executive Officer

MFS Investment Management

February 15, 2023

The opinions expressed in this letter are subject to change and may not be relied upon for investment advice. No forecasts can be guaranteed.

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MFS Growth Allocation Portfolio

Portfolio Composition

Portfolio target allocation

Portfolio actual allocation

Portfolio holdings

MFS Value Series	11.1%
MFS Growth Series	10.5%
MFS Research Series	10.0%
MFS Research International Portfolio	9.2%
MFS Mid Cap Value Portfolio	9.1%
MFS Mid Cap Growth Series	9.0%
MFS International Growth Portfolio	5.1%
MFS International Intrinsic Value Portfolio	5.1%
MFS Inflation-Adjusted Bond Portfolio	5.0%
MFS High Yield Portfolio	5.0%
MFS Total Return Bond Series	4.9%
MFS Global Real Estate Portfolio	4.9%
MFS Global Governments Portfolio	4.0%
MFS New Discovery Value Portfolio	2.0%
MFS New Discovery Series	2.0%
MFS Limited Maturity Portfolio	2.0%
MFS Emerging Markets Equity Portfolio	1.0%
Cash & Cash Equivalents	0.1%

Percentages are based on net assets as of December 31, 2022.

The portfolio is actively managed and current holdings may be different.

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MFS Growth Allocation Portfolio

Management Review

Summary of Results

For the twelve months ended December 31, 2022, Initial Class shares of the MFS Growth Allocation Portfolio (fund) provided a total return of -18.27%, while Service Class shares of the fund provided a total return of -18.50%. These compare with a return of -18.11% for the fund’s benchmark, the Standard & Poor's 500 Stock Index (S&P 500 Index). The fund's other benchmark, the MFS Growth Allocation Portfolio Blended Index (Blended Index), generated a return of -16.44%. The Blended Index reflects the blended returns of various equity and fixed income market indices, with percentage allocations to each index designed to resemble the allocations of the fund. The market indices and related percentage allocations used to compile the Blended Index are set forth in the Performance Summary.

Market Environment

Factors Affecting Performance

During the reporting period, the fund underperformed its benchmark, the Standard & Poor’s 500 Stock Index. Over the same period, the fund underperformed the Blended Index.

Relative to the Blended Index, the fund’s exposure to the international equity asset class was a primary detractor from relative performance. Within this segment, both the MFS International Intrinsic Value Portfolio and MFS Research International Portfolio weighed on the fund's relative results as both portfolios tilted toward higher quality growth and lagged their respective benchmarks.

The fund's exposure to the U.S. equity asset class also held back relative returns. Here, exposure to growth-oriented funds, most notably to the MFS Growth Series and MFS Mid Cap Growth Series, which both underperformed their respective benchmarks, held back relative returns and outweighed the positive relative contribution from the fund’s exposure to value-oriented funds, particularly the MFS Value Series and MFS Mid Cap Value Portfolio.

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Management Review - continued

Respectfully,

Portfolio Manager(s)

Joseph Flaherty and Natalie Shapiro

(d)	Duration is a measure of how much a bond’s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value.

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MFS Growth Allocation Portfolio

Performance Summary Through 12/31/22

Growth of a Hypothetical $10,000 Investment

Total Returns through 12/31/22

Average annual total returns

Share Class	Class Inception Date	1-yr	5-yr	10-yr
Initial Class	10/01/08	(18.27)%	5.69%	8.20%
Service Class	10/01/08	(18.50)%	5.42%	7.93%

Comparative benchmark(s)

Standard & Poor's 500 Stock Index (f)	(18.11)%	9.42%	12.56%
MFS Growth Allocation Portfolio Blended Index (f)(w)	(16.44)%	5.63%	8.22%
Bloomberg U.S. Aggregate Bond Index (f)	(13.01)%	0.02%	1.06%
FTSE EPRA Nareit Developed Real Estate Index (net div) (f)	(25.09)%	(0.23)%	2.99%
MSCI EAFE Index (net div) (f)	(14.45)%	1.54%	4.67%

(f)	Source: FactSet Research Systems Inc.
(w)	The MFS Growth Allocation Portfolio Blended Index (a custom index) was comprised of the following at the beginning and at the end of the reporting period:

	12/31/22
Standard & Poor's 500 Stock Index	54%
Bloomberg U.S. Aggregate Bond Index	21%
MSCI EAFE Index (net div)	20%
FTSE EPRA Nareit Developed Real Estate Index (net div)	5%

Benchmark Definition(s)

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MFS Growth Allocation Portfolio

Performance Summary – continued

Standard & Poor's 500 Stock Index^(g) – a market capitalization-weighted index of 500 widely held equity securities, designed to measure broad U.S. equity performance.

It is not possible to invest directly in an index.

(a)

(c)

(e)

(g)

Notes to Performance Summary

Average annual total return represents the average annual change in value for each share class for the periods presented.

From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.

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MFS Growth Allocation Portfolio

Expense Table

Fund expenses borne by the shareholders during the period,
July 1, 2022 through December 31, 2022

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2022 through December 31, 2022.

Actual Expenses

Hypothetical Example for Comparison Purposes

Share Class		Annualized Expense Ratio	Beginning Account Value 7/01/22	Ending Account Value 12/31/22	Expenses Paid During Period (p) 7/01/22-12/31/22
Initial Class	Actual	0.04%	$1,000.00	$1,020.29	$0.20
Initial Class	Hypothetical (h)	0.04%	$1,000.00	$1,025.00	$0.20
Service Class	Actual	0.29%	$1,000.00	$1,018.76	$1.48
Service Class	Hypothetical (h)	0.29%	$1,000.00	$1,023.74	$1.48

(h)	5% class return per year before expenses.

(p)

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MFS Growth Allocation Portfolio

Portfolio of Investments − 12/31/22

The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.

Issuer	Shares/Par	Value ($)
Investment Companies (h) – 100.0%
Bond Funds – 20.9%
MFS Global Governments Portfolio - Initial Class	1,212,846	$ 10,442,606
MFS High Yield Portfolio - Initial Class	2,754,872	13,002,993
MFS Inflation-Adjusted Bond Portfolio - Initial Class	1,561,152	13,035,620
MFS Limited Maturity Portfolio - Initial Class	539,012	5,147,566
MFS Total Return Bond Series - Initial Class	1,142,570	12,865,339
		$54,494,124
International Stock Funds – 20.4%
MFS Emerging Markets Equity Portfolio - Initial Class	233,636	$ 2,663,457
MFS International Growth Portfolio - Initial Class	993,717	13,266,120
MFS International Intrinsic Value Portfolio - Initial Class	486,942	13,264,298
MFS Research International Portfolio - Initial Class	1,591,499	24,031,636
		$53,225,511
Specialty Funds – 4.9%
MFS Global Real Estate Portfolio - Initial Class	1,006,597	$ 12,864,312
U.S. Stock Funds – 53.7%
MFS Growth Series - Initial Class	573,136	$ 27,521,975
MFS Mid Cap Growth Series - Initial Class	3,276,238	23,457,863
MFS Mid Cap Value Portfolio - Initial Class	2,578,063	23,692,403
MFS New Discovery Series - Initial Class	456,855	5,167,031
MFS New Discovery Value Portfolio - Initial Class	665,468	5,277,163
MFS Research Series - Initial Class	937,871	26,016,528
MFS Value Series - Initial Class	1,351,147	29,117,218
		$140,250,181
Money Market Funds – 0.1%
MFS Institutional Money Market Portfolio, 4.02% (v)	178,631	$ 178,684
Total Investment Companies (Identified Cost, $229,682,169)		$261,012,812
Other Assets, Less Liabilities – (0.0)%		(53,419)
Net Assets – 100.0%		$260,959,393

(h)	An affiliated issuer, which may be considered one in which the fund owns 5% or more of the outstanding voting securities, or a company which is under common control. At period end, the aggregate value of the fund’s investments in affiliated issuers was $261,012,812.
(v)	Affiliated issuer that is available only to investment companies managed by MFS. The rate quoted for the MFS Institutional Money Market Portfolio is the annualized seven-day yield of the fund at period end.

See Notes to Financial Statements

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MFS Growth Allocation Portfolio

Financial Statements

Statement of Assets and Liabilities

This statement represents your fund’s balance sheet, which details the assets and liabilities comprising the total value of the fund.

At 12/31/22 Assets
Investments in affiliated issuers, at value (identified cost, $229,682,169)	$261,012,812
Receivables for
Investments sold	122,678
Fund shares sold	612
Other assets	1,578
Total assets	$261,137,680
Liabilities
Payables for
Fund shares reacquired	$122,783
Payable to affiliates
Administrative services fee	142
Shareholder servicing costs	25
Distribution and/or service fees	5,303
Payable for independent Trustees' compensation	137
Accrued expenses and other liabilities	49,897
Total liabilities	$178,287
Net assets	$260,959,393
Net assets consist of
Paid-in capital	$203,461,222
Total distributable earnings (loss)	57,498,171
Net assets	$260,959,393
Shares of beneficial interest outstanding	27,823,161

	Net assets	Shares outstanding	Net asset value per share
Initial Class	$2,817,368	301,362	$9.35
Service Class	258,142,025	27,521,799	9.38

See Notes to Financial Statements

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Financial Statements

Statement of Operations

This statement describes how much your fund earned in investment income and accrued in expenses. It also describes any gains and/or losses generated by fund operations.

Year ended 12/31/22
Net investment income (loss)
Income
Dividends from affiliated issuers	$6,913,412
Other	49
Total investment income	$6,913,461
Expenses
Distribution and/or service fees	$715,449
Shareholder servicing costs	6,147
Administrative services fee	17,500
Independent Trustees' compensation	6,416
Custodian fee	4,658
Shareholder communications	3,985
Audit and tax fees	43,362
Legal fees	1,284
Miscellaneous	27,923
Total expenses	$826,724
Net investment income (loss)	$6,086,737
Realized and unrealized gain (loss)
Realized gain (loss) (identified cost basis)
Investments in affiliated issuers	$2,793,594
Capital gain distributions from affiliated issuers	19,151,402
Net realized gain (loss)	$21,944,996
Change in unrealized appreciation or depreciation
Affiliated issuers	$(92,552,645)
Net realized and unrealized gain (loss)	$(70,607,649)
Change in net assets from operations	$(64,520,912)

See Notes to Financial Statements

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MFS Growth Allocation Portfolio

Financial Statements

Statements of Changes in Net Assets

These statements describe the increases and/or decreases in net assets resulting from operations, any distributions, and any shareholder transactions.

	Year ended
	12/31/22	12/31/21
Change in net assets
From operations
Net investment income (loss)	$6,086,737	$3,962,970
Net realized gain (loss)	21,944,996	34,050,761
Net unrealized gain (loss)	(92,552,645)	14,160,136
Change in net assets from operations	$(64,520,912)	$52,173,867
Total distributions to shareholders	$(37,921,553)	$(26,312,418)
Change in net assets from fund share transactions	$6,816,927	$(28,148,870)
Total change in net assets	$(95,625,538)	$(2,287,421)
Net assets
At beginning of period	356,584,931	358,872,352
At end of period	$260,959,393	$356,584,931

See Notes to Financial Statements

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MFS Growth Allocation Portfolio

Financial Statements

Financial Highlights

Initial Class	Year ended
	12/31/22	12/31/21	12/31/20	12/31/19	12/31/18
Net asset value, beginning of period	$13.27	$12.38	$11.93	$10.64	$12.21
Income (loss) from investment operations
Net investment income (loss) (d)(l)	$0.26	$0.17	$0.23	$0.22	$0.26
Net realized and unrealized gain (loss)	(2.64)	1.75	1.53	2.53	(0.78)
Total from investment operations	$(2.38)	$1.92	$1.76	$2.75	$(0.52)
Less distributions declared to shareholders
From net investment income	$(0.19)	$(0.23)	$(0.25)	$(0.29)	$(0.23)
From net realized gain	(1.35)	(0.80)	(1.06)	(1.17)	(0.82)
Total distributions declared to shareholders	$(1.54)	$(1.03)	$(1.31)	$(1.46)	$(1.05)
Net asset value, end of period (x)	$9.35	$13.27	$12.38	$11.93	$10.64
Total return (%) (k)(s)(x)	(18.27)	15.76	15.80	26.96	(5.20)
Ratios (%) (to average net assets) and Supplemental data:
Expenses before expense reductions (h)	0.04	0.03	0.04	0.03	0.03
Expenses after expense reductions (h)	N/A	N/A	N/A	N/A	N/A
Net investment income (loss) (l)	2.37	1.31	2.02	1.88	2.13
Portfolio turnover	2	2	6	0(b)	2
Net assets at end of period (000 omitted)	$2,817	$4,564	$4,602	$3,905	$3,770

Service Class	Year ended
	12/31/22	12/31/21	12/31/20	12/31/19	12/31/18
Net asset value, beginning of period	$13.30	$12.40	$11.95	$10.65	$12.22
Income (loss) from investment operations
Net investment income (loss) (d)(l)	$0.23	$0.14	$0.18	$0.20	$0.22
Net realized and unrealized gain (loss)	(2.64)	1.76	1.55	2.52	(0.77)
Total from investment operations	$(2.41)	$1.90	$1.73	$2.72	$(0.55)
Less distributions declared to shareholders
From net investment income	$(0.16)	$(0.20)	$(0.22)	$(0.25)	$(0.20)
From net realized gain	(1.35)	(0.80)	(1.06)	(1.17)	(0.82)
Total distributions declared to shareholders	$(1.51)	$(1.00)	$(1.28)	$(1.42)	$(1.02)
Net asset value, end of period (x)	$9.38	$13.30	$12.40	$11.95	$10.65
Total return (%) (k)(s)(x)	(18.50)	15.54	15.46	26.66	(5.46)
Ratios (%) (to average net assets) and Supplemental data:
Expenses before expense reductions (h)	0.29	0.28	0.29	0.28	0.28
Expenses after expense reductions (h)	N/A	N/A	N/A	N/A	N/A
Net investment income (loss) (l)	2.10	1.09	1.57	1.70	1.80
Portfolio turnover	2	2	6	0(b)	2
Net assets at end of period (000 omitted)	$258,142	$352,021	$354,270	$351,229	$330,320

See Notes to Financial Statements

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Financial Highlights - continued

(b)	Less than 0.5%.
(d)	Per share data is based on average shares outstanding.
(h)	In addition to the fees and expenses which the fund bears directly, the fund indirectly bears a pro rata share of the fees and expenses of the underlying affiliated funds in which the fund invests. Accordingly, the expense ratio for the fund reflects only those fees and expenses borne directly by the fund. Because the underlying affiliated funds have varied expense and fee levels and the fund may own different proportions of the underlying affiliated funds at different times, the amount of fees and expenses incurred indirectly by the fund will vary.
(k)	The total return does not reflect expenses that apply to separate accounts. Inclusion of these charges would reduce the total return figures for all periods shown.
(l)	The ratios and per share amounts do not include net investment income of the underlying affiliated funds in which the fund invests.
(s)	From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
(x)	The net asset values and total returns have been calculated on net assets which include adjustments made in accordance with U.S. generally accepted accounting principles required at period end for financial reporting purposes.

See Notes to Financial Statements

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MFS Growth Allocation Portfolio

Notes to Financial Statements

(1) Business and Organization

MFS Growth Allocation Portfolio (the fund) is a diversified series of MFS Variable Insurance Trust III (the trust). The trust is organized as a Delaware statutory 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, and qualified retirement and pension plans.

(2) Significant Accounting Policies

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MFS Growth Allocation Portfolio

Notes to Financial Statements - continued

Financial Instruments	Level 1	Level 2	Level 3	Total
Mutual Funds	$261,012,812	$—	$—	$261,012,812

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Notes to Financial Statements - continued

Book/tax differences primarily relate to wash sale loss deferrals.

The tax character of distributions declared to shareholders for the last fiscal year is as follows:

	Year ended 12/31/22	Year ended 12/31/21
Ordinary income (including any short-term capital gains)	$5,033,364	$6,858,157
Long-term capital gains	32,888,189	19,454,261
Total distributions	$37,921,553	$26,312,418

The federal tax cost and the tax basis components of distributable earnings were as follows:

As of 12/31/22
Cost of investments	$232,699,131
Gross appreciation	43,241,394
Gross depreciation	(14,927,713)
Net unrealized appreciation (depreciation)	$28,313,681
Undistributed ordinary income	6,080,736
Undistributed long-term capital gain	23,103,754
Total distributable earnings (loss)	$57,498,171

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MFS Growth Allocation Portfolio

Notes to Financial Statements - continued

	Year ended 12/31/22	Year ended 12/31/21
Initial Class	$507,004	$338,086
Service Class	37,414,549	25,974,332
Total	$37,921,553	$26,312,418

(3) Transactions with Affiliates

Shareholder Servicing Agent — MFS Service Center, Inc. (MFSC), a wholly-owned subsidiary of MFS, receives a fee from the fund for its services as shareholder servicing agent. For the year ended December 31, 2022, the fee was $5,974, which equated to 0.0021% annually of the fund's average daily net assets. MFSC also receives reimbursement from the fund for out-of-pocket expenses paid by MFSC on behalf of the fund. For the year ended December 31, 2022, these costs amounted to $173.

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Notes to Financial Statements - continued

(4) Portfolio Securities

For the year ended December 31, 2022, purchases and sales of shares of underlying funds, excluding the MFS Institutional Money Market Portfolio, aggregated $6,424,481 and $38,338,993, respectively.

(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. Transactions in fund shares were as follows:

	Year ended 12/31/22		Year ended 12/31/21
	Shares	Amount	Shares	Amount
Shares sold
Initial Class	2,276	$23,212	60,088	$761,953
Service Class	569,317	6,267,400	682,056	8,959,061
	571,593	$6,290,612	742,144	$9,721,014
Shares issued to shareholders in reinvestment of distributions
Initial Class	52,485	$507,004	26,147	$338,086
Service Class	3,857,170	37,414,549	2,002,647	25,974,332
	3,909,655	$37,921,553	2,028,794	$26,312,418
Shares reacquired
Initial Class	(97,292)	$(977,222)	(114,198)	$(1,495,258)
Service Class	(3,375,336)	(36,418,016)	(4,784,086)	(62,687,044)
	(3,472,628)	$(37,395,238)	(4,898,284)	$(64,182,302)
Net change
Initial Class	(42,531)	$(447,006)	(27,963)	$(395,219)
Service Class	1,051,151	7,263,933	(2,099,383)	(27,753,651)
	1,008,620	$6,816,927	(2,127,346)	$(28,148,870)

(6) Line of Credit

The fund and certain other funds managed by MFS participate in a $1.45 billion unsecured committed line of credit of which $1.2 billion is reserved for use by the fund and certain other MFS U.S. funds. The line of credit is provided by a syndicate of banks under a credit agreement. Borrowings may be made for temporary financing needs. Interest is charged to each fund, based on its borrowings, generally at a rate equal to the highest of 1) Daily Simple SOFR (Secured Overnight Financing Rate) plus 0.10%, 2) the Federal Funds Effective Rate, or 3) the Overnight Bank Funding Rate, each plus an agreed upon spread. A commitment fee, based on the average daily unused portion of the committed line of credit, is allocated among the participating funds. The line of credit expires on March 16, 2023 unless extended or renewed. In addition, the fund and other funds managed by MFS have established unsecured uncommitted borrowing arrangements with certain banks for temporary financing needs. Interest is charged to each fund, based on its borrowings, at rates equal to customary reference rates plus an agreed upon spread. For the year ended December 31, 2022, the fund’s commitment fee and interest expense were $1,434 and $0, respectively, and are included in “Miscellaneous” expense in the Statement of Operations.

(7) Investments in Affiliated Issuers

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Notes to Financial Statements - continued

Affiliated Issuers	Beginning Value	Purchases	Sales Proceeds	Realized Gain (Loss)	Change in Unrealized Appreciation or Depreciation	Ending Value
MFS Emerging Markets Equity Portfolio	$3,394,382	$445,957	$191,606	$(68,609)	$(916,667)	$2,663,457
MFS Global Governments Portfolio	13,922,931	399,092	1,365,881	(317,381)	(2,196,155)	10,442,606
MFS Global Real Estate Portfolio	18,242,774	1,701,314	1,151,227	410,800	(6,339,349)	12,864,312
MFS Growth Series	39,071,878	5,425,238	1,016,367	(266,196)	(15,692,578)	27,521,975
MFS High Yield Portfolio	17,725,856	818,671	2,912,696	(667,993)	(1,960,845)	13,002,993
MFS Inflation-Adjusted Bond Portfolio	17,562,431	1,754,726	1,171,367	(77,512)	(5,032,658)	13,035,620
MFS Institutional Money Market Portfolio	184,532	2,852,103	2,858,064	71	42	178,684
MFS International Growth Portfolio	17,900,752	925,502	1,973,331	117,565	(3,704,368)	13,266,120
MFS International Intrinsic Value Portfolio	17,867,359	1,263,875	906,424	(27,726)	(4,932,786)	13,264,298
MFS Limited Maturity Portfolio	7,021,967	179,565	1,635,291	(99,644)	(319,031)	5,147,566
MFS Mid Cap Growth Series	32,274,365	5,271,034	1,185,733	(426,545)	(12,475,258)	23,457,863
MFS Mid Cap Value Portfolio	32,533,688	2,471,388	6,310,033	1,166,086	(6,168,726)	23,692,403
MFS New Discovery Series	6,589,512	2,458,479	146,697	(126,513)	(3,607,750)	5,167,031
MFS New Discovery Value Portfolio	7,189,307	1,270,358	1,210,478	232,072	(2,204,096)	5,277,163
MFS Research International Portfolio	32,201,596	1,234,174	2,709,211	45,560	(6,740,483)	24,031,636
MFS Research Series	35,813,863	3,826,246	3,935,275	1,076,843	(10,765,149)	26,016,528
MFS Total Return Bond Series	17,553,990	722,642	2,496,853	(367,760)	(2,546,680)	12,865,339
MFS Value Series	39,579,129	2,318,244	8,020,523	2,190,476	(6,950,108)	29,117,218
	$356,630,312	$35,338,608	$41,197,057	$2,793,594	$(92,552,645)	$261,012,812

Affiliated Issuers	Dividend Income	Capital Gain Distributions
MFS Emerging Markets Equity Portfolio	$152,857	$170,165
MFS Global Governments Portfolio	175,669	—
MFS Global Real Estate Portfolio	387,627	853,441
MFS Growth Series	152,825	3,411,741
MFS High Yield Portfolio	797,387	—
MFS Inflation-Adjusted Bond Portfolio	718,643	761,774
MFS Institutional Money Market Portfolio	2,777	—
MFS International Growth Portfolio	161,703	756,090
MFS International Intrinsic Value Portfolio	166,141	576,024
MFS Limited Maturity Portfolio	114,151	22,298
MFS Mid Cap Growth Series	—	3,630,095
MFS Mid Cap Value Portfolio	617,265	1,750,575
MFS New Discovery Series	557,703	1,169,479
MFS New Discovery Value Portfolio	539,891	705,825
MFS Research International Portfolio	830,303	250,766
MFS Research Series	563,521	3,191,976
MFS Total Return Bond Series	392,463	165,396
MFS Value Series	582,486	1,735,757
	$6,913,412	$19,151,402

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Notes to Financial Statements - continued

(8) LIBOR Transition

(9) Russia and Ukraine Conflict

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Report of Independent Registered Public Accounting Firm

To the Board of Trustees of MFS Variable Insurance Trust III and the Shareholders of MFS Growth Allocation Portfolio:

Opinion on the Financial Statements and Financial Highlights

We have audited the accompanying statement of assets and liabilities of MFS Growth Allocation Portfolio (the “Fund”), including the portfolio of investments, as of December 31, 2022, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of December 31, 2022, and 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 five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

DELOITTE & TOUCHE LLP

Boston, Massachusetts
February 15, 2023

We have served as the auditor of one or more of the MFS investment companies since 1924.

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MFS Growth Allocation Portfolio

Trustees and Officers — Identification and Background

Name, Age	Position(s) Held with Fund	Trustee/Officer Since^(h)	Number of MFS Funds overseen by the Trustee	Principal Occupations During the Past Five Years	Other Directorships During the Past Five Years ^(j)
INTERESTED TRUSTEE
Michael W. Roberge ^(k) (age 56)	Trustee	January 2021	136	Massachusetts Financial Services Company, Chairman (since January 2021); Chief Executive Officer (since January 2017); Director; Chairman of the Board (since January 2022); President (until December 2018); Chief Investment Officer (until December 2018)	N/A
INDEPENDENT TRUSTEES
John P. Kavanaugh (age 68)	Trustee and Chair of Trustees	January 2009	136	Private investor	N/A
Steven E. Buller (age 71)	Trustee	February 2014	136	Private investor	N/A
John A. Caroselli (age 68)	Trustee	March 2017	136	Private investor; JC Global Advisors, LLC (management consulting), President (since 2015)	N/A
Maureen R. Goldfarb (age 67)	Trustee	January 2009	136	Private investor	N/A
Peter D. Jones (age 67)	Trustee	January 2019	136	Private investor	N/A
James W. Kilman, Jr. (age 61)	Trustee	January 2019	136	Burford Capital Limited (finance and investment management), Senior Advisor (since May 3, 2021), Chief Financial Officer (2019 - May 2, 2021); KielStrand Capital LLC (family office), Chief Executive Officer (since 2016)	Alpha-En Corporation, Director (2016-2019)
Clarence Otis, Jr. (age 66)	Trustee	March 2017	136	Private investor	VF Corporation, Director; Verizon Communications, Inc., Director; The Travelers Companies, Director
Maryanne L. Roepke (age 66)	Trustee	May 2014	136	Private investor	N/A
Laurie J. Thomsen (age 65)	Trustee	March 2005	136	Private investor	The Travelers Companies, Director; Dycom Industries, Inc., Director

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MFS Growth Allocation Portfolio

Trustees and Officers - continued

Name, Age	Position(s) Held with Fund	Trustee/Officer Since^(h)	Number of MFS Funds for which the Person is an Officer	Principal Occupations During the Past Five Years
OFFICERS
Christopher R. Bohane ^(k) (age 49)	Assistant Secretary and Assistant Clerk	July 2005	136	Massachusetts Financial Services Company, Senior Vice President and Senior Managing Counsel
Kino Clark ^(k) (age 54)	Assistant Treasurer	January 2012	136	Massachusetts Financial Services Company, Vice President
John W. Clark, Jr. ^(k) (age 55)	Assistant Treasurer	April 2017	136	Massachusetts Financial Services Company, Vice President
David L. DiLorenzo ^(k) (age 54)	President	July 2005	136	Massachusetts Financial Services Company, Senior Vice President
Heidi W. Hardin ^(k) (age 55)	Secretary and Clerk	April 2017	136	Massachusetts Financial Services Company, Executive Vice President and General Counsel
Brian E. Langenfeld ^(k) (age 49)	Assistant Secretary and Assistant Clerk	June 2006	136	Massachusetts Financial Services Company, Vice President and Managing Counsel
Rosa E. Licea-Mailloux ^(k) (age 46)	Chief Compliance Officer	March 2022	136	Massachusetts Financial Services Company, Vice President (since 2018); Director of Corporate Compliance (2018-2021), Senior Director Compliance (2021-2022), Senior Managing Director of North American Compliance & Chief Compliance Officer (since March 2022); Natixis Investment Managers (investment management), Funds Chief Compliance Officer, Deputy General Counsel & Senior Vice President (until 2018)
Amanda S. Mooradian ^(k) (age 43)	Assistant Secretary and Assistant Clerk	September 2018	136	Massachusetts Financial Services Company, Assistant Vice President and Senior Counsel
Susan A. Pereira ^(k) (age 52)	Assistant Secretary and Assistant Clerk	July 2005	136	Massachusetts Financial Services Company, Vice President and Managing Counsel
Kasey L. Phillips ^(k) (age 52)	Assistant Treasurer	September 2012	136	Massachusetts Financial Services Company, Vice President
Matthew A. Stowe ^(k) (age 48)	Assistant Secretary and Assistant Clerk	October 2014	136	Massachusetts Financial Services Company, Vice President and Senior Managing Counsel
William B. Wilson ^(k) (age 40)	Assistant Secretary and Assistant Clerk	October 2022	136	Massachusetts Financial Services Company, Assistant Vice President and Counsel
James O. Yost ^(k) (age 62)	Treasurer	September 1990	136	Massachusetts Financial Services Company, Senior Vice President

(h)	Date first appointed to serve as Trustee/Officer of an MFS Fund. Each Trustee has served continuously since appointment unless indicated otherwise. From January 2012 through December 2016, Messrs. DiLorenzo and Yost served as Treasurer and Deputy Treasurer of the Funds, respectively.

(j)	Directorships or trusteeships of companies required to report to the Securities and Exchange Commission (i.e., “public companies”).

(k)

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MFS Growth Allocation Portfolio

Trustees and Officers - continued

Messrs. Buller, Kilman and Otis and Ms. Roepke are members of the Trust’s Audit Committee.

Each of the Interested Trustees and certain Officers hold comparable officer positions with certain affiliates of MFS.

The Statement of Additional Information for a Fund includes further information about the Trustees and is available without charge upon request by calling 1-800-225-2606.

Investment Adviser	Custodian
Massachusetts Financial Services Company 111 Huntington Avenue Boston, MA 02199-7618	State Street Bank and Trust Company 1 Lincoln Street Boston, MA 02111-2900

Distributor	Independent Registered Public Accounting Firm
MFS Fund Distributors, Inc. 111 Huntington Avenue Boston, MA 02199-7618	Deloitte & Touche LLP 200 Berkeley Street Boston, MA 02116

Portfolio Manager(s)
Joseph Flaherty Natalie Shapiro

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MFS Growth Allocation Portfolio

Board Review of Investment Advisory Agreement

MFS Growth Allocation Portfolio

Based on information provided by Broadridge and MFS, the Trustees reviewed the Fund’s total return investment performance as well as the Broadridge performance universe over various time periods. The Trustees placed particular emphasis on the total return performance of the Fund’s Initial Class shares in comparison to the performance of funds in its Broadridge performance universe over the five-year period ended December 31, 2021, which the Trustees believed was a long enough period to reflect differing market conditions. The total return performance of the Fund’s Initial Class shares was in the 1st quintile relative to the other funds in the universe for this five-year period (the 1st quintile being the best performers and the 5th quintile being the worst performers). The total return performance of the Fund’s Initial Class shares was in the 3rd quintile for the one-year period and the 1st quintile for the three-year period ended December 31, 2021 relative to the Broadridge performance universe. Because of the passage of time, these performance results may differ from the performance results for more recent periods, including those shown elsewhere in this report.

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MFS Growth Allocation Portfolio

Board Review of Investment Advisory Agreement - continued

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MFS Growth Allocation Portfolio

Proxy Voting Policies and Information

Quarterly Portfolio Disclosure

FURTHER INFORMATION

Information About Fund Contracts and Legal Claims

Federal Tax Information (unaudited)

The following information is provided pursuant to provisions of the Internal Revenue Code.

The fund designates $36,178,000 as capital gain dividends paid during the fiscal year.

For corporate shareholders, 28.49% of the ordinary income dividends paid during the fiscal year qualify for the corporate dividends received deduction.

The fund intends to pass through the maximum amount allowable as Section 163(j) Interest Dividends as defined in Treasury Regulation §1.163(j)-1(b).

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rev. 3/16

FACTS

WHAT DOES MFS DO WITH YOUR PERSONAL INFORMATION?

Why?

What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include:
	• Social Security number and account balances
	• Account transactions and transaction history
	• Checking account information and wire transfer instructions
	When you are no longer our customer, we continue to share your information as described in this notice.

How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MFS chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MFS share?	Can you limit this sharing?
For our everyday business purposes – such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes – to offer our products and services to you	No	We don't share
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes – information about your transactions and experiences	No	We don't share
For our affiliates' everyday business purposes – information about your creditworthiness	No	We don't share
For nonaffiliates to market to you	No	We don't share

Questions?

Call 800-225-2606 or go to mfs.com.

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Page 2

Who we are
Who is providing this notice?	MFS Funds, MFS Investment Management, MFS Institutional Advisors, Inc., and MFS Heritage Trust Company.

What we do
How does MFS protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include procedural, electronic, and physical safeguards for the protection of the personal information we collect about you.
How does MFS collect my personal information?	We collect your personal information, for example, when you
	• open an account or provide account information
	• direct us to buy securities or direct us to sell your securities
	• make a wire transfer
	We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only
	• sharing for affiliates' everyday business purposes – information about your creditworthiness
	• affiliates from using your information to market to you
	• sharing for nonaffiliates to market to you
	State laws and individual companies may give you additional rights to limit sharing.

Definitions
Affiliates	Companies related by common ownership or control. They can be financial and nonfinancial companies.
	• MFS does not share personal information with affiliates, except for everyday business purposes as described on page one of this notice.
Nonaffiliates	Companies not related by common ownership or control. They can be financial and nonfinancial companies.
	• MFS does not share with nonaffiliates so they can market to you.
Joint marketing	A formal agreement between nonaffiliated financial companies that together market financial products or services to you.
	• MFS doesn't jointly market.

Other important information

If you own an MFS product or receive an MFS service in the name of a third party such as a bank or broker-dealer, their privacy policy may apply to you instead of ours.

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Annual Report

December 31, 2022

MFS^® Inflation-Adjusted
Bond Portfolio

MFS^® Variable Insurance Trust III

VIA-ANN

MFS^® Inflation-Adjusted Bond Portfolio

CONTENTS

The 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.

NOT FDIC INSURED • MAY LOSE VALUE • NO BANK OR CREDIT UNION GUARANTEE •

NOT A DEPOSIT • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY OR NCUA/NCUSIF

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MFS Inflation-Adjusted Bond Portfolio

LETTER FROM THE CHAIR AND CEO

Dear Shareholders:

During times of market transition, it is important to have a deep understanding of company fundamentals, and we have built our unique global research platform to do just that.

Respectfully,

Michael W. Roberge

Chair and Chief Executive Officer

MFS Investment Management

February 15, 2023

The opinions expressed in this letter are subject to change and may not be relied upon for investment advice. No forecasts can be guaranteed.

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MFS Inflation-Adjusted Bond Portfolio

Portfolio Composition

Portfolio structure (i)

Fixed income sectors (i)

Non-U.S. Government Bonds	56.5%
U.S. Treasury Securities	41.6%
Commercial Mortgage-Backed Securities	1.1%
Mortgage-Backed Securities	0.8%
Investment Grade Corporates	0.6%
Municipal Bonds	0.2%

Composition including fixed income credit quality (a)(i)

AAA	9.9%
AA	34.8%
A	3.1%
BBB	11.7%
U.S. Government	40.5%
Federal Agencies	0.8%
Not Rated (o)	0.0%
Cash & Cash Equivalents	0.2%
Other	(1.0)%

Portfolio facts

Average Duration (d)	9.2
Average Effective Maturity (m)	10.1 yrs.

Issuer country weightings (i)(x)

United States	43.5%
United Kingdom	25.3%
France	9.1%
Spain	8.1%
Canada	4.3%
Italy	3.4%
Japan	2.7%
Australia	1.2%
Germany	1.1%
Other Countries	1.3%

Currency exposure weightings (i)(y)

United States Dollar	51.9%
Euro	21.1%
British Pound Sterling	20.0%
Japanese Yen	3.0%
Canadian Dollar	2.7%
Australian Dollar	1.0%
Swedish Krona	0.7%
Danish Krone	0.1%
New Zealand Dollar	(0.5)%

(a)

For all securities other than those specifically described below, ratings are assigned to underlying securities utilizing ratings from Moody’s, Fitch, and Standard & Poor’s rating agencies and applying the following hierarchy: If all three agencies provide a rating, the middle rating (after dropping the highest and lowest ratings) is assigned; if two of the three agencies rate a security, the lower of the two is assigned. If none of the 3 rating agencies above assign a rating, but the security is rated by DBRS Morningstar, then the DBRS Morningstar rating is assigned. If none of the 4 rating agencies listed above rate the security, but the security is rated by the Kroll Bond Rating Agency (KBRA), then the KBRA rating is assigned. Ratings are shown in the S&P and Fitch scale (e.g., AAA). Securities rated BBB or higher are considered investment grade. All ratings are subject to change. U.S. Government includes securities issued by the U.S. Department of the Treasury. Federal Agencies includes rated and unrated U.S. Agency fixed-income securities, U.S. Agency mortgage-backed securities, and collateralized mortgage obligations of U.S. Agency mortgage-backed securities. Not Rated includes fixed income securities and fixed income derivatives that have not been rated by any rating agency. The fund may or may not have held all of these instruments on this date. The fund is not rated by these agencies.

(d)

Duration is a measure of how much a bond’s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value due to the interest rate move. The Average Duration calculation reflects the impact of the equivalent exposure of derivative positions, if any.

(i)

For purposes of this presentation, the components include the value of securities, and reflect the impact of the equivalent exposure of derivative positions, if any. These amounts may be negative from time to time. Equivalent exposure is a calculated amount that translates the derivative position into a reasonable approximation of the amount of the underlying asset that the portfolio would have to hold at a given point in time to have the same price sensitivity that results from the portfolio’s ownership of the derivative contract. When dealing with derivatives, equivalent exposure is a more representative measure of the potential impact of a position on portfolio performance than value. The bond component will include any accrued interest amounts.

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MFS Inflation-Adjusted Bond Portfolio

Portfolio Composition - continued

(m)

In determining each instrument’s effective maturity for purposes of calculating the fund’s dollar-weighted average effective maturity, MFS uses the instrument’s stated maturity or, if applicable, an earlier date on which MFS believes it is probable that a maturity-shortening device (such as a put, pre-refunding or prepayment) will cause the instrument to be repaid. Such an earlier date can be substantially shorter than the instrument’s stated maturity.

(o)	Less than 0.1%.

(x)	Represents the portfolio’s exposure to issuer countries as a percentage of a portfolio’s net assets. For purposes of this presentation, United States includes Cash & Cash Equivalents and Other.

(y)	Represents the portfolio’s exposure to a particular currency as a percentage of a portfolio's net assets. For purposes of this presentation, United States Dollar includes Cash & Cash Equivalents.

Where the fund holds convertible bonds, they are treated as part of the equity portion of the portfolio.

Other includes equivalent exposure from currency derivatives and/or any offsets to derivative positions and may be negative.

Percentages are based on net assets as of December 31, 2022.

The portfolio is actively managed and current holdings may be different.

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MFS Inflation-Adjusted Bond Portfolio

Management Review

Summary of Results

For the twelve months ended December 31, 2022, Initial Class shares of the MFS Inflation-Adjusted Bond Portfolio (fund) provided a total return of -21.55%, while Service Class shares of the fund provided a total return of -21.66%. These compare with a return of -21.86% over the same period for the fund’s benchmark, the Bloomberg World Government Inflation-Linked Bond Index.

Market Environment

Factors Affecting Performance

Relative to the Bloomberg World Government Inflation-Linked Bond Index, the fund's duration(d) stance and yield curve(y) positioning along both United Kingdom and Canada curves supported relative performance. From a country perspective, the fund’s underweight exposure to the United States and overweight exposure to Germany also benefited relative returns. Within the United States, the fund’s underweight exposure to the 3- and 5-year key interest rates, and overweight exposure to 15- and 20-year key rates, significantly contributed to relative returns. The fund’s underweight exposure to the British pound, euro and New Zealand dollar further strengthened relative performance.

Conversely, the fund’s long relative duration stance and yield curve positioning along the New Zealand curve detracted from relative returns. From a country perspective, an underweight exposure to France and bond selection within the UK dampened relative returns. Additionally, the fund’s overweight exposure to 7- and 10-year key interest rates within the United States held back relative performance. The fund’s slight overweight allocation to the Norwegian krone also weakened relative results.

Respectfully,

Portfolio Manager(s)
Robert Spector and Erik Weisman

(d)	Duration is a measure of how much a bond’s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value.

(y)	A yield curve graphically depicts the yields of different maturity bonds of the same credit quality and type; a normal yield curve is upward sloping, with short-term rates lower than long-term rates.

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MFS Inflation-Adjusted Bond Portfolio

Performance Summary Through 12/31/22

Growth of a Hypothetical $10,000 Investment

Total Returns through 12/31/22

Average annual total returns

Share Class	Class Inception Date	1-yr	5-yr	10-yr
Initial Class	10/01/08	(21.55)%	(1.31)%	(0.28)%
Service Class	10/01/08	(21.66)%	(1.54)%	(0.52)%

Comparative benchmark(s)

Bloomberg World Government Inflation-Linked Bond Index (f)

(21.86)%

(1.20)%

0.03%

(f)	Source: FactSet Research Systems Inc.

Benchmark Definition(s)

Bloomberg World Government Inflation-Linked Bond Index^(a) – measures the performance of the major government inflation-linked bond markets.

It is not possible to invest directly in an index.

(a)

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MFS Inflation-Adjusted Bond Portfolio

Performance Summary – continued

Notes to Performance Summary

Average annual total return represents the average annual change in value for each share class for the periods presented.

From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.

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MFS Inflation-Adjusted Bond Portfolio

Expense Table

Fund expenses borne by the shareholders during the period,
July 1, 2022 through December 31, 2022

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2022 through December 31, 2022.

Actual Expenses

Hypothetical Example for Comparison Purposes

Share Class		Annualized Expense Ratio	Beginning Account Value 7/01/22	Ending Account Value 12/31/22	Expenses Paid During Period (p) 7/01/22-12/31/22
Initial Class	Actual	0.57%	$1,000.00	$944.39	$2.79
Initial Class	Hypothetical (h)	0.57%	$1,000.00	$1,022.33	$2.91
Service Class	Actual	0.82%	$1,000.00	$943.60	$4.02
Service Class	Hypothetical (h)	0.82%	$1,000.00	$1,021.07	$4.18

(h)	5% class return per year before expenses.

(p)	“Expenses Paid During Period” are equal to each class's annualized expense ratio, as shown above, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

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MFS Inflation-Adjusted Bond Portfolio

Portfolio of Investments − 12/31/22

The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.

Issuer		Shares/Par	Value ($)
Bonds – 100.6%
Asset-Backed & Securitized – 1.1%
3650R Commercial Mortgage Trust, 2021-PF1, “XA”, 1.028%, 11/15/2054 (i)	$	2,104,030	$ 123,959
BBCMS Mortgage Trust, 2021-C10, “XA”, 1.297%, 7/15/2054 (i)		2,080,304	150,594
BBCMS Mortgage Trust, 2021-C9, “XA”, 1.626%, 2/15/2054 (i)		1,332,907	120,625
Benchmark 2021-B23 Mortgage Trust, “XA”, 1.271%, 2/15/2054 (i)		4,273,789	288,191
Benchmark 2021-B24 Mortgage Trust, “XA”, 1.151%, 3/15/2054 (i)		2,520,395	153,553
Benchmark 2021-B27 Mortgage Trust, “XA”, 1.266%, 7/15/2054 (i)		3,290,217	231,853
Benchmark 2021-B28 Mortgage Trust, “XA”, 1.282%, 8/15/2054 (i)		3,946,552	278,132
Commercial Mortgage Pass-Through Certificates, 2021-BN31, “XA”, 1.325%, 2/15/2054 (i)		3,299,089	247,811
Commercial Mortgage Pass-Through Certificates, 2021-BN35, “XA”, 1.046%, 6/15/2064 (i)		1,300,175	77,403
Morgan Stanley Capital I Trust, 2021-L5, “XA”, 1.296%, 5/15/2054 (i)		1,654,008	114,136
Morgan Stanley Capital I Trust, 2021-L6, “XA”, 1.228%, 6/15/2054 (i)		2,008,643	127,201
Wells Fargo Commercial Mortgage Trust, 2021-C60, “XA”, 1.546%, 8/15/2054 (i)		1,460,534	128,816
			$2,042,274
Consumer Services – 0.2%
Conservation Fund, 3.474%, 12/15/2029	$	312,000	$ 268,253
Industrial – 0.1%
Howard University, Washington D.C., AGM, 2.416%, 10/01/2024	$	66,000	$ 62,323
Howard University, Washington D.C., AGM, 2.516%, 10/01/2025		82,000	76,586
			$138,909
International Market Sovereign – 57.5%
Commonwealth of Australia, Inflation Linked Bond, 3%, 9/20/2025	AUD	1,722,500	$ 1,238,030
Commonwealth of Australia, Inflation Linked Bond, 2%, 8/21/2035		1,121,400	775,531
Commonwealth of Australia, Inflation Linked Bond, 1.25%, 8/21/2040		83,692	50,817
Federal Republic of Germany, Inflation Linked Bond, 0.1%, 4/15/2026	EUR	2,824,643	2,997,997
Federal Republic of Germany, Inflation Linked Bond, 0.5%, 4/15/2030		176,627	192,052
Federal Republic of Germany, Inflation Linked Bond, 0.1%, 4/15/2033		283,247	298,741
Federal Republic of Germany, Inflation Linked Bond, 0.1%, 4/15/2046		652,408	699,906
Government of Canada, Inflation Linked Bond, 4.25%, 12/01/2026	CAD	525,402	427,974
Government of Canada, Inflation Linked Bond, 4%, 12/01/2031		841,590	754,591
Government of Canada, Inflation Linked Bond, 3%, 12/01/2036		6,160,481	5,501,073
Government of Canada, Inflation Linked Bond, 1.25%, 12/01/2047		1,621,841	1,196,868
Government of Japan, Inflation Linked Bond, 0.1%, 3/10/2026	JPY	400,805,000	3,168,510
Government of Japan, Inflation Linked Bond, 0.005%, 3/10/2031		224,507,300	1,776,523
Government of New Zealand, Inflation Linked Bond, 3%, 9/20/2030	NZD	597,294	396,502
Government of New Zealand, Inflation Linked Bond, 2.5%, 9/20/2035		1,966,413	1,246,438
Kingdom of Spain, Inflation Linked Bond, 0.15%, 11/30/2023	EUR	5,066,921	5,457,630
Kingdom of Spain, Inflation Linked Bond, 1.8%, 11/30/2024		3,621,420	3,986,711
Kingdom of Spain, Inflation Linked Bond, 0.65%, 11/30/2027		180,227	190,946
Kingdom of Spain, Inflation Linked Bond, 1%, 11/30/2030		5,003,117	5,331,806
Kingdom of Spain, Inflation Linked Bond, 0.7%, 11/30/2033 (n)		131,408	132,100
Kingdom of Sweden, Inflation Linked Bond, 0.125%, 6/01/2030 (n)	SEK	6,855,143	740,964
Republic of France, Inflation Linked Bond, 0.25%, 7/25/2024	EUR	11,792,994	12,722,649
Republic of France, Inflation Linked Bond, 0.1%, 7/25/2036 (n)		353,339	342,186
Republic of France, Inflation Linked Bond, 1.8%, 7/25/2040		1,380,640	1,730,012
Republic of France, Inflation Linked Bond, 0.1%, 7/25/2047		1,401,693	1,297,516
Republic of France, Inflation Linked Bond, 0.1%, 7/25/2053 (n)		734,377	672,145
Republic of Italy, Inflation Linked Bond, 3.1%, 9/15/2026		2,135,012	2,427,278
Republic of Italy, Inflation Linked Bond, 0.4%, 5/15/2030		1,691,730	1,584,801
Republic of Italy, Inflation Linked Bond, 1.25%, 9/15/2032		2,408,420	2,339,742
United Kingdom Treasury, Inflation Linked Bond, 0.125%, 3/22/2024	GBP	7,399,527	9,082,527
United Kingdom Treasury, Inflation Linked Bond, 0.125%, 3/22/2029		6,183,584	7,451,624
United Kingdom Treasury, Inflation Linked Bond, 0.75%, 3/22/2034		3,713,272	4,717,289

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MFS Inflation-Adjusted Bond Portfolio

Portfolio of Investments – continued

Issuer		Shares/Par	Value ($)
Bonds – continued
International Market Sovereign – continued
United Kingdom Treasury, Inflation Linked Bond, 2%, 1/26/2035	GBP	1,774,824	$ 2,648,935
United Kingdom Treasury, Inflation Linked Bond, 1.125%, 11/22/2037		2,316,925	3,082,807
United Kingdom Treasury, Inflation Linked Bond, 0.625%, 3/22/2040		2,127,916	2,645,276
United Kingdom Treasury, Inflation Linked Bond, 0.625%, 11/22/2042		2,079,666	2,575,844
United Kingdom Treasury, Inflation Linked Bond, 0.125%, 3/22/2044		586,486	648,566
United Kingdom Treasury, Inflation Linked Bond, 0.125%, 3/22/2046		1,112,727	1,211,164
United Kingdom Treasury, Inflation Linked Bond, 0.75%, 11/22/2047		2,191,872	2,740,723
United Kingdom Treasury, Inflation Linked Bond, 0.5%, 3/22/2050		729,703	871,959
United Kingdom Treasury, Inflation Linked Bond, 0.25%, 3/22/2052		2,046,302	2,276,521
United Kingdom Treasury, Inflation Linked Bond, 1.25%, 11/22/2055		721,198	1,072,216
United Kingdom Treasury, Inflation Linked Bond, 0.125%, 3/22/2058		1,976,990	2,128,341
United Kingdom Treasury, Inflation Linked Bond, 0.375%, 3/22/2062		1,320,605	1,589,598
United Kingdom Treasury, Inflation Linked Bond, 0.125%, 11/22/2065		827,779	919,951
United Kingdom Treasury, Inflation Linked Bond, 0.125%, 3/22/2068		1,006,070	1,120,893
United Kingdom Treasury, Inflation Linked Bond, 0.125%, 3/22/2073		196,474	230,410
			$106,692,683
Medical & Health Technology & Services – 0.3%
ProMedica Toledo Hospital, “B”, AGM, 5.325%, 11/15/2028	$	487,000	$ 480,819
ProMedica Toledo Hospital, “B”, AGM, 5.75%, 11/15/2038		144,000	135,417
			$616,236
Mortgage-Backed – 0.8%
Freddie Mac, 1.8%, 4/25/2030 (i)	$	564,669	$ 59,453
Freddie Mac, 1.665%, 5/25/2030 (i)		1,221,668	120,356
Freddie Mac, 1.169%, 9/25/2030 (i)		646,322	46,535
Freddie Mac, 0.329%, 1/25/2031 (i)		4,877,274	97,321
Freddie Mac, 0.781%, 1/25/2031 (i)		1,882,263	93,933
Freddie Mac, 0.936%, 1/25/2031 (i)		1,425,035	85,185
Freddie Mac, 0.516%, 3/25/2031 (i)		5,925,776	190,710
Freddie Mac, 1.22%, 5/25/2031 (i)		709,327	56,409
Freddie Mac, 0.937%, 7/25/2031 (i)		1,133,380	71,758
Freddie Mac, 0.536%, 9/25/2031 (i)		4,635,695	176,353
Freddie Mac, 0.855%, 9/25/2031 (i)		1,417,400	83,216
Freddie Mac, 0.349%, 11/25/2031 (i)		6,965,967	178,904
Freddie Mac, 0.497%, 12/25/2031 (i)		6,916,623	245,179
Freddie Mac, 0.567%, 12/25/2031 (i)		1,130,491	44,630
			$1,549,942
Municipals – 0.2%
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., Taxable, “B”, 3%, 6/01/2046	$	395,000	$ 365,608
U.S. Treasury Inflation Protected Securities – 40.4%
U.S. Treasury Bonds, 0.25%, 1/15/2025	$	12,910,930	$ 12,384,394
U.S. Treasury Bonds, 2%, 1/15/2026		8,158,553	8,148,269
U.S. Treasury Bonds, 0.375%, 1/15/2027		6,198,940	5,845,414
U.S. Treasury Bonds, 0.75%, 2/15/2042		10,887,848	9,106,668
U.S. Treasury Bonds, 0.75%, 2/15/2045		3,828,017	3,093,156
U.S. Treasury Bonds, 0.125%, 2/15/2051		2,432,233	1,564,538
U.S. Treasury Bonds, 0.125%, 2/15/2052		3,570,017	2,309,109
U.S. Treasury Notes, 0.375%, 7/15/2025		3,534,788	3,394,734
U.S. Treasury Notes, 0.875%, 1/15/2029		9,547,494	9,095,459
U.S. Treasury Notes, 0.125%, 1/15/2031 (f)		14,496,861	12,874,086

Table of Contents

MFS Inflation-Adjusted Bond Portfolio

Portfolio of Investments – continued

Issuer		Shares/Par	Value ($)
Bonds – continued
U.S. Treasury Inflation Protected Securities – continued
U.S. Treasury Notes, 0.125%, 1/15/2032	$	8,170,000	$ 7,155,878
			$74,971,705
Total Bonds (Identified Cost, $207,139,842)			$186,645,610
Investment Companies (h) – 0.3%
Money Market Funds – 0.3%
MFS Institutional Money Market Portfolio, 4.02% (v) (Identified Cost, $515,617)		515,483	$ 515,637
Other Assets, Less Liabilities – (0.9)%			(1,625,895)
Net Assets – 100.0%			$185,535,352

(f)	All or a portion of the security has been segregated as collateral for open futures contracts.
(h)	An affiliated issuer, which may be considered one in which the fund owns 5% or more of the outstanding voting securities, or a company which is under common control. At period end, the aggregate values of the fund's investments in affiliated issuers and in unaffiliated issuers were $515,637 and $186,645,610, respectively.
(i)	Interest only security for which the fund receives interest on notional principal (Par amount). Par amount shown is the notional principal and does not reflect the cost of the security.
(n)	Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be sold in the ordinary course of business in transactions exempt from registration, normally to qualified institutional buyers. At period end, the aggregate value of these securities was $1,887,395, representing 1.0% of net assets.
(v)	Affiliated issuer that is available only to investment companies managed by MFS. The rate quoted for the MFS Institutional Money Market Portfolio is the annualized seven-day yield of the fund at period end.

The following abbreviations are used in this report and are defined:
AGM	Assured Guaranty Municipal
Abbreviations indicate amounts shown in currencies other than the U.S. dollar. All amounts are stated in U.S. dollars unless otherwise indicated. A list of abbreviations is shown below:
AUD	Australian Dollar
CAD	Canadian Dollar
DKK	Danish Krone
EUR	Euro
GBP	British Pound
JPY	Japanese Yen
NZD	New Zealand Dollar
SEK	Swedish Krona

Derivative Contracts at 12/31/22
Forward Foreign Currency Exchange Contracts
Currency Purchased		Currency Sold		Counterparty	Settlement Date	Unrealized Appreciation (Depreciation)
Asset Derivatives
AUD	1,443,637	USD	973,248	Citibank N.A.	1/20/2023	$10,286
AUD	1,454,922	USD	920,100	Morgan Stanley Capital Services, Inc.	1/20/2023	71,123
AUD	402,903	USD	270,244	NatWest Markets PLC	1/20/2023	4,250
CAD	2,032,960	USD	1,493,546	Barclays Bank PLC	1/20/2023	8,025
CAD	1,319,267	USD	967,408	Morgan Stanley Capital Services, Inc.	1/20/2023	7,019
CAD	638,557	USD	467,118	State Street Bank Corp.	1/20/2023	4,528
CAD	2,618,192	USD	1,921,530	UBS AG	1/20/2023	12,301
DKK	3,369,185	USD	443,916	Deutsche Bank AG	1/20/2023	41,670
EUR	3,763,913	USD	4,005,250	Barclays Bank PLC	1/20/2023	28,179
EUR	789,415	USD	831,011	Brown Brothers Harriman	1/20/2023	14,930
EUR	1,858,754	USD	1,978,793	Citibank N.A.	1/20/2023	13,058

Table of Contents

MFS Inflation-Adjusted Bond Portfolio

Portfolio of Investments – continued

Forward Foreign Currency Exchange Contracts - continued
Currency Purchased		Currency Sold		Counterparty	Settlement Date	Unrealized Appreciation (Depreciation)
Asset Derivatives - continued
EUR	3,637,469	USD	3,695,247	HSBC Bank	1/20/2023	$202,683
EUR	5,845,821	USD	6,082,890	JPMorgan Chase Bank N.A.	1/20/2023	181,522
EUR	4,889,755	USD	5,038,348	Merrill Lynch International	1/20/2023	201,539
EUR	4,733,738	USD	4,961,650	Morgan Stanley Capital Services, Inc.	1/20/2023	111,051
EUR	1,834,902	USD	1,938,172	State Street Bank Corp.	1/20/2023	28,118
GBP	403,292	USD	485,039	Brown Brothers Harriman	1/20/2023	2,726
GBP	1,961,995	USD	2,231,540	Goldman Sachs International	1/20/2023	141,410
GBP	816,709	USD	939,565	JPMorgan Chase Bank N.A.	1/20/2023	48,211
GBP	906,292	USD	1,050,544	Morgan Stanley Capital Services, Inc.	1/20/2023	45,578
GBP	1,881,112	USD	2,172,472	State Street Bank Corp.	1/20/2023	102,654
JPY	107,130,862	USD	724,178	Deutsche Bank AG	1/20/2023	93,740
JPY	135,343,109	USD	961,799	JPMorgan Chase Bank N.A.	1/20/2023	71,513
JPY	67,647,017	USD	483,289	UBS AG	1/20/2023	33,179
NZD	2,852,148	USD	1,644,155	Brown Brothers Harriman	1/20/2023	167,057
NZD	1,570,628	USD	940,424	Morgan Stanley Capital Services, Inc.	1/20/2023	56,977
NZD	2,067,517	USD	1,194,616	NatWest Markets PLC	1/20/2023	118,328
NZD	6,166,002	USD	3,503,855	State Street Bank Corp.	1/20/2023	411,765
SEK	5,685,883	USD	510,334	Deutsche Bank AG	1/20/2023	35,060
SEK	597,509	USD	53,307	Morgan Stanley Capital Services, Inc.	1/20/2023	4,007
USD	194,662	CAD	261,949	JPMorgan Chase Bank N.A.	1/20/2023	1,183
USD	114,142	CAD	151,457	Morgan Stanley Capital Services, Inc.	1/20/2023	2,274
USD	950,467	GBP	771,413	Brown Brothers Harriman	1/20/2023	17,475
USD	409,020	GBP	334,532	NatWest Markets PLC	1/20/2023	4,417
USD	3,915,248	NZD	6,129,681	Goldman Sachs International	1/20/2023	22,693
USD	77,945	NZD	122,407	HSBC Bank	1/20/2023	212
USD	38,755	SEK	402,109	Morgan Stanley Capital Services, Inc.	1/20/2023	185
						$2,320,926
Liability Derivatives
CAD	124,943	USD	93,809	Citibank N.A.	1/20/2023	$(1,525)
EUR	897,671	USD	962,885	Morgan Stanley Capital Services, Inc.	1/20/2023	(936)
NZD	1,519,036	USD	968,553	State Street Bank Corp.	1/20/2023	(3,914)
USD	973,516	AUD	1,449,562	JPMorgan Chase Bank N.A.	1/20/2023	(14,055)
USD	1,514,517	AUD	2,424,079	State Street Bank Corp.	1/20/2023	(136,982)
USD	1,578,128	CAD	2,151,698	Brown Brothers Harriman	1/20/2023	(11,145)
USD	333,316	CAD	451,341	Goldman Sachs International	1/20/2023	(50)
USD	4,984,233	CAD	6,840,932	HSBC Bank	1/20/2023	(68,570)
USD	556,711	CAD	753,851	NatWest Markets PLC	1/20/2023	(93)
USD	214,098	DKK	1,515,970	Morgan Stanley Capital Services, Inc.	1/20/2023	(4,392)
USD	3,991,873	EUR	3,821,441	Brown Brothers Harriman	1/20/2023	(103,203)
USD	277,184	EUR	280,573	Deutsche Bank AG	1/20/2023	(23,479)
USD	1,188,108	EUR	1,164,484	HSBC Bank	1/20/2023	(59,759)
USD	867,092	EUR	858,607	JPMorgan Chase Bank N.A.	1/20/2023	(52,997)
USD	1,167,818	EUR	1,121,799	Merrill Lynch International	1/20/2023	(34,308)
USD	734,952	EUR	749,003	Morgan Stanley Capital Services, Inc.	1/20/2023	(67,683)
USD	23,062,874	EUR	23,378,207	State Street Bank Corp.	1/20/2023	(1,989,334)
USD	3,118,881	GBP	2,740,930	HSBC Bank	1/20/2023	(196,159)
USD	1,595,924	GBP	1,362,002	JPMorgan Chase Bank N.A.	1/20/2023	(51,361)
USD	4,249,020	GBP	3,662,208	Morgan Stanley Capital Services, Inc.	1/20/2023	(180,268)
USD	6,014,516	GBP	5,358,621	State Street Bank Corp.	1/20/2023	(466,512)
USD	131,933	JPY	19,214,318	Brown Brothers Harriman	1/20/2023	(14,764)
USD	957,250	JPY	131,130,216	HSBC Bank	1/20/2023	(43,897)
USD	78,445	JPY	10,558,698	JPMorgan Chase Bank N.A.	1/20/2023	(2,168)

Table of Contents

MFS Inflation-Adjusted Bond Portfolio

Portfolio of Investments – continued

Forward Foreign Currency Exchange Contracts - continued
Currency Purchased		Currency Sold		Counterparty	Settlement Date	Unrealized Appreciation (Depreciation)
Liability Derivatives - continued
USD	475,655	JPY	66,748,301	Morgan Stanley Capital Services, Inc.	1/20/2023	$(33,952)
USD	1,871,667	NZD	2,965,883	Morgan Stanley Capital Services, Inc.	1/20/2023	(11,769)
USD	5,079,056	NZD	8,946,883	State Street Bank Corp.	1/20/2023	(602,518)
						$(4,175,793)

Futures Contracts
Description	Long/ Short	Currency	Contracts	Notional Amount	Expiration Date	Value/Unrealized Appreciation (Depreciation)
Asset Derivatives
Interest Rate Futures
Euro-Bobl 5 yr	Short	EUR	17	$2,106,377	March – 2023	$58,742
Liability Derivatives
Interest Rate Futures
U.S. Treasury Note 10 yr	Long	USD	19	$2,133,641	March – 2023	$(14,420)

At December 31, 2022, the fund had liquid securities with an aggregate value of $102,669 to cover any collateral or margin obligations for certain derivative contracts.

See Notes to Financial Statements

Table of Contents

MFS Inflation-Adjusted Bond Portfolio

Financial Statements

Statement of Assets and Liabilities

This statement represents your fund’s balance sheet, which details the assets and liabilities comprising the total value of the fund.

At 12/31/22 Assets
Investments in unaffiliated issuers, at value (identified cost, $207,139,842)	$186,645,610
Investments in affiliated issuers, at value (identified cost, $515,617)	515,637
Cash	4,898
Foreign currency, at value (identified cost, $19)	19
Receivables for
Forward foreign currency exchange contracts	2,320,926
Net daily variation margin on open futures contracts	5,397
Fund shares sold	174
Interest	410,403
Other assets	1,292
Total assets	$189,904,356
Liabilities
Payables for
Forward foreign currency exchange contracts	$4,175,793
Fund shares reacquired	103,552
Payable to affiliates
Investment adviser	7,417
Administrative services fee	297
Shareholder servicing costs	17
Distribution and/or service fees	1,870
Payable for independent Trustees' compensation	54
Accrued expenses and other liabilities	80,004
Total liabilities	$4,369,004
Net assets	$185,535,352
Net assets consist of
Paid-in capital	$212,364,672
Total distributable earnings (loss)	(26,829,320)
Net assets	$185,535,352
Shares of beneficial interest outstanding	22,379,870

	Net assets	Shares outstanding	Net asset value per share
Initial Class	$94,431,799	11,319,943	$8.34
Service Class	91,103,553	11,059,927	8.24

See Notes to Financial Statements

Table of Contents

MFS Inflation-Adjusted Bond Portfolio

Financial Statements

Statement of Operations

This statement describes how much your fund earned in investment income and accrued in expenses. It also describes any gains and/or losses generated by fund operations.

Year ended 12/31/22
Net investment income (loss)
Income
Interest	$14,476,077
Dividends from affiliated issuers	13,234
Other	43
Total investment income	$14,489,354
Expenses
Management fee	$1,038,500
Distribution and/or service fees	256,218
Shareholder servicing costs	4,325
Administrative services fee	41,677
Independent Trustees' compensation	5,237
Custodian fee	29,878
Shareholder communications	4,618
Audit and tax fees	47,891
Legal fees	936
Miscellaneous	32,815
Total expenses	$1,462,095
Reduction of expenses by investment adviser	(28,875)
Net expenses	$1,433,220
Net investment income (loss)	$13,056,134
Realized and unrealized gain (loss)
Realized gain (loss) (identified cost basis)
Unaffiliated issuers	$(18,633,462)
Affiliated issuers	(191)
Futures contracts	529,720
Forward foreign currency exchange contracts	(392,355)
Foreign currency	1,435,473
Net realized gain (loss)	$(17,060,815)
Change in unrealized appreciation or depreciation
Unaffiliated issuers	$(46,299,717)
Affiliated issuers	20
Futures contracts	53,549
Forward foreign currency exchange contracts	(1,702,234)
Translation of assets and liabilities in foreign currencies	5,395
Net unrealized gain (loss)	$(47,942,987)
Net realized and unrealized gain (loss)	$(65,003,802)
Change in net assets from operations	$(51,947,668)

See Notes to Financial Statements

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MFS Inflation-Adjusted Bond Portfolio

Financial Statements

Statements of Changes in Net Assets

These statements describe the increases and/or decreases in net assets resulting from operations, any distributions, and any shareholder transactions.

	Year ended
	12/31/22	12/31/21
Change in net assets
From operations
Net investment income (loss)	$13,056,134	$7,049,975
Net realized gain (loss)	(17,060,815)	14,982,442
Net unrealized gain (loss)	(47,942,987)	(17,972,564)
Change in net assets from operations	$(51,947,668)	$4,059,853
Total distributions to shareholders	$(21,082,368)	$(6,632,339)
Change in net assets from fund share transactions	$9,664,157	$(7,574,086)
Total change in net assets	$(63,365,879)	$(10,146,572)
Net assets
At beginning of period	248,901,231	259,047,803
At end of period	$185,535,352	$248,901,231

See Notes to Financial Statements

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MFS Inflation-Adjusted Bond Portfolio

Financial Statements

Financial Highlights

Initial Class	Year ended
	12/31/22	12/31/21	12/31/20	12/31/19	12/31/18
Net asset value, beginning of period	$11.93	$12.06	$10.81	$10.15	$10.81
Income (loss) from investment operations
Net investment income (loss) (d)	$0.63	$0.34	$0.05	$0.12	$0.19
Net realized and unrealized gain (loss)	(3.15)	(0.14)	1.40	0.72	(0.67)
Total from investment operations	$(2.52)	$0.20	$1.45	$0.84	$(0.48)
Less distributions declared to shareholders
From net investment income	$(0.45)	$(0.13)	$(0.05)	$(0.18)	$(0.18)
From net realized gain	(0.62)	(0.20)	(0.15)	—	—
Total distributions declared to shareholders	$(1.07)	$(0.33)	$(0.20)	$(0.18)	$(0.18)
Net asset value, end of period (x)	$8.34	$11.93	$12.06	$10.81	$10.15
Total return (%) (k)(r)(s)(x)	(21.65)	1.63	13.55	8.26	(4.47)
Ratios (%) (to average net assets) and Supplemental data:
Expenses before expense reductions	0.58	0.57	0.58	0.57	0.57
Expenses after expense reductions	0.57	0.56	0.57	0.56	0.56
Net investment income (loss)	6.42	2.88	0.45	1.11	1.78
Portfolio turnover	126	96	46	62	63
Net assets at end of period (000 omitted)	$94,432	$126,161	$132,577	$131,221	$134,599

Service Class	Year ended
	12/31/22	12/31/21	12/31/20	12/31/19	12/31/18
Net asset value, beginning of period	$11.78	$11.92	$10.69	$10.03	$10.68
Income (loss) from investment operations
Net investment income (loss) (d)	$0.60	$0.31	$0.02	$0.09	$0.16
Net realized and unrealized gain (loss)	(3.10)	(0.15)	1.38	0.72	(0.66)
Total from investment operations	$(2.50)	$0.16	$1.40	$0.81	$(0.50)
Less distributions declared to shareholders
From net investment income	$(0.42)	$(0.10)	$(0.02)	$(0.15)	$(0.15)
From net realized gain	(0.62)	(0.20)	(0.15)	—	—
Total distributions declared to shareholders	$(1.04)	$(0.30)	$(0.17)	$(0.15)	$(0.15)
Net asset value, end of period (x)	$8.24	$11.78	$11.92	$10.69	$10.03
Total return (%) (k)(r)(s)(x)	(21.76)	1.32	13.21	8.05	(4.70)
Ratios (%) (to average net assets) and Supplemental data:
Expenses before expense reductions	0.83	0.82	0.83	0.82	0.82
Expenses after expense reductions	0.82	0.81	0.82	0.81	0.81
Net investment income (loss)	6.17	2.64	0.19	0.86	1.54
Portfolio turnover	126	96	46	62	63
Net assets at end of period (000 omitted)	$91,104	$122,740	$126,471	$125,926	$131,678

See Notes to Financial Statements

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MFS Inflation-Adjusted Bond Portfolio

Financial Highlights - continued

(d)	Per share data is based on average shares outstanding.
(k)	The total return does not reflect expenses that apply to separate accounts. Inclusion of these charges would reduce the total return figures for all periods shown.
(r)	Certain expenses have been reduced without which performance would have been lower.
(s)	From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
(x)	The net asset values and total returns have been calculated on net assets which include adjustments made in accordance with U.S. generally accepted accounting principles required at period end for financial reporting purposes.

See Notes to Financial Statements

Table of Contents

MFS Inflation-Adjusted Bond Portfolio

Notes to Financial Statements

(1) Business and Organization

MFS Inflation-Adjusted Bond Portfolio (the fund) is a non-diversified series of MFS Variable Insurance Trust III (the trust). The trust is organized as a Delaware statutory 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, and qualified retirement and pension plans.

(2) Significant Accounting Policies

Under the fund's valuation policy and procedures, debt instruments and floating rate loans, including restricted debt instruments, are generally valued at an evaluated or composite bid as provided by a third-party pricing service. Short-term instruments with a maturity at issuance of 60 days or less may be valued at amortized cost, which approximates market value. Futures contracts are generally valued at last posted settlement price on their primary exchange as provided by a third-party pricing service. Futures contracts for which there were no trades that day for a particular position are generally valued at the closing bid quotation on their primary exchange as provided by a third-party pricing service. Forward foreign currency exchange contracts are generally valued at the mean of bid and asked prices for the time period interpolated from rates provided by a third-party pricing service for proximate time periods. Open-end investment companies are generally valued at net asset value per share. The values of foreign securities and other assets and liabilities expressed in foreign currencies are converted to U.S. dollars using the mean of bid and asked prices for rates provided by a third-party pricing service.

Table of Contents

MFS Inflation-Adjusted Bond Portfolio

Notes to Financial Statements - continued

does not resume prior to the close of the exchange or market on which the security is principally traded. The adviser generally relies on third-party pricing services or other information (such as the correlation with price movements of similar securities in the same or other markets; the type, cost and investment characteristics of the security; the business and financial condition of the issuer; and trading and other market data) to assist in determining whether to fair value and at what value to fair value an investment. The value of an investment for purposes of calculating the fund’s net asset value can differ depending on the source and method used to determine value. When fair valuation is used, the value of an investment used to determine the fund’s net asset value may differ from quoted or published prices for the same investment. There can be no assurance that the fund could obtain the fair value assigned to an investment if it were to sell the investment at the same time at which the fund determines its net asset value per share.

Various inputs are used in determining the value of the fund's assets or liabilities. These inputs are categorized into three broad levels. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fund's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment. Level 1 includes unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 includes other significant observable market-based inputs (including quoted prices for similar securities, interest rates, prepayment speed, and credit risk). Level 3 includes significant unobservable inputs, which may include the adviser's own assumptions in determining the fair value of investments. Other financial instruments are derivative instruments, such as futures contracts and forward foreign currency exchange contracts. The following is a summary of the levels used as of December 31, 2022 in valuing the fund's assets and liabilities:

Financial Instruments	Level 1	Level 2	Level 3	Total
U.S. Treasury Bonds & U.S. Government Agencies & Equivalents	$—	$74,971,705	$—	$74,971,705
Non - U.S. Sovereign Debt	—	106,692,683	—	106,692,683
Municipal Bonds	—	365,608	—	365,608
U.S. Corporate Bonds	—	1,023,398	—	1,023,398
Residential Mortgage-Backed Securities	—	1,549,942	—	1,549,942
Commercial Mortgage-Backed Securities	—	2,042,274	—	2,042,274
Mutual Funds	515,637	—	—	515,637
Total	$515,637	$186,645,610	$—	$187,161,247

Other Financial Instruments
Futures Contracts – Assets	$58,742	$—	$—	$58,742
Futures Contracts – Liabilities	(14,420)	—	—	(14,420)
Forward Foreign Currency Exchange Contracts – Assets	—	2,320,926	—	2,320,926
Forward Foreign Currency Exchange Contracts – Liabilities	—	(4,175,793)	—	(4,175,793)

For further information regarding security characteristics, see the Portfolio of Investments.

Inflation-Adjusted Debt Securities — The fund invests in inflation-adjusted debt securities issued by the U.S. Treasury. The fund also invests in inflation-adjusted debt securities issued by U.S. Government agencies and instrumentalities other than the U.S. Treasury and by other entities such as U.S. and foreign corporations and foreign governments. The principal value of these debt securities is adjusted through income according to changes in the Consumer Price Index or another general price or wage index. These debt securities typically pay a fixed rate of interest, but this fixed rate is applied to the inflation-adjusted principal amount. The principal paid at maturity of the debt security is typically equal to the inflation-adjusted principal amount, or the security’s original par value, whichever is greater. Other types of inflation-adjusted securities may use other methods to adjust for other measures of inflation.

Table of Contents

MFS Inflation-Adjusted Bond Portfolio

Notes to Financial Statements - continued

Derivatives — The fund uses derivatives primarily to increase or decrease exposure to a particular market or segment of the market, or security, to increase or decrease interest rate or currency exposure, or as alternatives to direct investments. Derivatives are used for hedging or non-hedging purposes. While hedging can reduce or eliminate losses, it can also reduce or eliminate gains. When the fund uses derivatives as an investment to increase market exposure, or for hedging purposes, gains and losses from derivative instruments may be substantially greater than the derivative’s original cost.

The derivative instruments used by the fund during the period were futures contracts and forward foreign currency exchange contracts. Depending on the type of derivative, a fund may exit a derivative position by entering into an offsetting transaction with a counterparty or exchange, negotiating an agreement with the derivative counterparty, or novating the position to a third party. The fund may be unable to promptly close out a futures position in instances where the daily fluctuation in the price for that type of future exceeds the daily limit set by the exchange. The fund's period end derivatives, as presented in the Portfolio of Investments and the associated Derivative Contract tables, generally are indicative of the volume of its derivative activity during the period.

The following table presents, by major type of derivative contract, the fair value, on a gross basis, of the asset and liability components of derivatives held by the fund at December 31, 2022 as reported in the Statement of Assets and Liabilities:

		Fair Value (a)
Risk	Derivative Contracts	Asset Derivatives	Liability Derivatives
Interest Rate	Futures Contracts	$58,742	$(14,420)
Foreign Exchange	Forward Foreign Currency Exchange Contracts	2,320,926	(4,175,793)
Total		$2,379,668	$(4,190,213)

(a) Values presented in this table for futures contracts correspond to the values reported in the Portfolio of Investments. Only the current day net variation margin for futures contracts is reported separately within the Statement of Assets and Liabilities.

The following table presents, by major type of derivative contract, the realized gain (loss) on derivatives held by the fund for the year ended December 31, 2022 as reported in the Statement of Operations:

Risk	Futures Contracts	Forward Foreign Currency Exchange Contracts
Interest Rate	$529,720	$—
Foreign Exchange	—	(392,355)
Total	$529,720	$(392,355)

The following table presents, by major type of derivative contract, the change in unrealized appreciation or depreciation on derivatives held by the fund for the year ended December 31, 2022 as reported in the Statement of Operations:

Risk	Futures Contracts	Forward Foreign Currency Exchange Contracts
Interest Rate	$53,549	$—
Foreign Exchange	—	(1,702,234)
Total	$53,549	$(1,702,234)

Derivative counterparty credit risk is managed through formal evaluation of the creditworthiness of all potential counterparties. On certain, but not all, uncleared derivatives, the fund attempts to reduce its exposure to counterparty credit risk whenever possible by entering into an ISDA Master Agreement on a bilateral basis. The ISDA Master Agreement gives each party to the agreement the right to terminate all transactions traded under such agreement if there is a specified deterioration in the credit quality of the other party. Upon an event of default or a termination of the ISDA Master Agreement, the non-defaulting party has the right to close out all transactions traded under such agreement and to net amounts owed under each agreement to one net amount payable by one party to the other. This right to close out and net payments across all transactions traded under the ISDA Master Agreement could result in a reduction of the fund's credit risk to such counterparty equal to any amounts payable by the fund under the applicable transactions, if any.

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Notes to Financial Statements - continued

uncleared derivatives (e.g., forward foreign currency exchange contracts, uncleared swap agreements, and uncleared options) and collateral, in the form of cash and securities, is held in segregated accounts with the fund's custodian in connection with these agreements. For derivatives traded under an ISDA Master Agreement, which contains a credit support annex, the collateral requirements are netted across all transactions traded under such counterparty-specific agreement and an amount is posted from one party to the other to collateralize such obligations. Cash that has been segregated or delivered to cover the fund's collateral or margin obligations under derivative contracts, if any, will be reported separately in the Statement of Assets and Liabilities as restricted cash for uncleared derivatives and/or deposits with brokers for cleared derivatives. Securities pledged as collateral or margin for the same purpose, if any, are noted in the Portfolio of Investments. The fund may be required to make payments of interest on uncovered collateral or margin obligations with the broker. Any such payments are included in “Miscellaneous” expense in the Statement of Operations.

Futures Contracts — The fund entered into futures contracts which may be used to hedge against or obtain broad market exposure, interest rate exposure, or to manage duration. A futures contract represents a commitment for the future purchase or sale of an asset at a specified price on a specified date.

Upon entering into a futures contract, the fund is required to deposit with the broker, either in cash or securities, an initial margin in an amount equal to a specified percentage of the notional amount of the contract. Subsequent payments (variation margin) are made or received by the fund each day, depending on the daily fluctuations in the value of the contract, and are recorded for financial statement purposes as unrealized gain or loss by the fund until the contract is closed or expires at which point the gain or loss on futures contracts is realized.

The fund bears the risk of interest rates or securities prices moving unexpectedly, in which case, the fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. While futures contracts may present less counterparty risk to the fund since the contracts are exchange traded and the exchange’s clearinghouse guarantees payments to the broker, there is still counterparty credit risk due to the insolvency of the broker. The fund's maximum risk of loss due to counterparty credit risk is equal to the margin posted by the fund to the broker plus any gains or minus any losses on the outstanding futures contracts.

Forward Foreign Currency Exchange Contracts — The fund entered into forward foreign currency exchange contracts for the purchase or sale of a specific foreign currency at a fixed price on a future date. These contracts may be used to hedge the fund’s currency risk or for non-hedging purposes. For hedging purposes, the fund may enter into contracts to deliver or receive foreign currency that the fund will receive from or use in its normal investment activities. The fund may also use contracts to hedge against declines in the value of foreign currency denominated securities 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 exchange rate changes.

Forward foreign currency exchange contracts are adjusted by the daily exchange rate of the underlying currency and any unrealized gains or losses are recorded as a receivable or payable for forward foreign currency exchange contracts until the contract settlement date. On contract settlement date, any gain or loss on the contract is recorded as realized gains or losses on forward foreign currency exchange contracts.

Risks may arise upon entering into these contracts from unanticipated movements in the value of the contract and from the potential inability of counterparties to meet the terms of their contracts. Generally, the fund’s maximum risk due to counterparty credit risk is the unrealized gain on the contract due to the use of Continuous Linked Settlement, a multicurrency cash settlement system for the centralized settlement of foreign transactions. This risk is mitigated in cases where there is an ISDA Master Agreement between the fund and the counterparty providing for netting as described above and, where applicable, by the posting of collateral by the counterparty to the fund to cover the fund’s exposure to the counterparty under such ISDA Master Agreement.

Investment Transactions and Income — Investment transactions are recorded on the trade date. Interest income is recorded on the accrual basis. All premium and discount is amortized or accreted for financial statement purposes in accordance with U.S. generally accepted accounting principles. 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. In determining the net gain or loss on securities sold, the cost of securities is determined on the identified cost basis. Inflation-indexed bonds are fixed-income securities whose principal value is periodically adjusted upward or downward based on the rate of inflation. Interest is accrued based on the principal amount, which is adjusted for inflation. Any increase or decrease in the principal amount of an inflation-indexed bond is generally recorded as an increase or decrease in interest income, respectively, even though the adjusted principal is not received until maturity.

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Notes to Financial Statements - continued

Book/tax differences primarily relate to wash sale loss deferrals and derivative transactions.

The tax character of distributions declared to shareholders for the last two fiscal years is as follows:

	Year ended 12/31/22	Year ended 12/31/21
Ordinary income (including any short-term capital gains)	$10,073,595	$3,482,285
Long-term capital gains	11,008,773	3,150,054
Total distributions	$21,082,368	$6,632,339

The federal tax cost and the tax basis components of distributable earnings were as follows:

As of 12/31/22
Cost of investments	$207,568,543
Gross appreciation	2,210,055
Gross depreciation	(24,427,896)
Net unrealized appreciation (depreciation)	$(22,217,841)
Undistributed ordinary income	5,199,643
Capital loss carryforwards	(9,816,049)
Other temporary differences	4,927
Total distributable earnings (loss)	$(26,829,320)

As of December 31, 2022, the fund had capital loss carryforwards available to offset future realized gains. These net capital losses may be carried forward indefinitely and their character is retained as short-term and/or long-term losses. Such losses are characterized as follows:

Short-Term	$(8,616,670)
Long-Term	(1,199,379)
Total	$(9,816,049)

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Notes to Financial Statements - continued

	Year ended 12/31/22	Year ended 12/31/21
Initial Class	$10,811,076	$3,498,989
Service Class	10,271,292	3,133,350
Total	$21,082,368	$6,632,339

(3) Transactions with Affiliates

Investment Adviser — The fund has an investment advisory agreement with MFS to provide overall investment management and related administrative services and facilities to the fund. The management fee is computed daily and paid monthly at an annual rate of 0.50% of the fund’s average daily net assets.

MFS has agreed in writing to reduce its management fee by a specified amount if certain MFS mutual fund assets exceed thresholds agreed to by MFS and the fund's Board of Trustees. Effective March 1, 2022, MFS has also agreed in writing to waive at least 0.01% of its management fee as part of this agreement. The agreement to waive at least 0.01% of the management fee will continue until modified by the fund's Board of Trustees, but such agreement will continue at least until April 30, 2024. For the year ended December 31, 2022, this management fee reduction amounted to $28,875, which is included in the reduction of total expenses in the Statement of Operations. The management fee incurred for the year ended December 31, 2022 was equivalent to an annual effective rate of 0.49% of the fund's average daily net assets.

Shareholder Servicing Agent — MFS Service Center, Inc. (MFSC), a wholly-owned subsidiary of MFS, receives a fee from the fund for its services as shareholder servicing agent. For the year ended December 31, 2022, the fee was $4,099, which equated to 0.0020% annually of the fund's average daily net assets. MFSC also receives reimbursement from the fund for out-of-pocket expenses paid by MFSC on behalf of the fund. For the year ended December 31, 2022, these costs amounted to $226.

Administrator — MFS provides certain financial, legal, shareholder communications, compliance, and other administrative services to the fund. Under an administrative services agreement, the fund reimburses MFS the costs incurred to provide these services. The fund is charged an annual fixed amount of $17,500 plus a fee based on average daily net assets. The administrative services fee incurred for the year ended December 31, 2022 was equivalent to an annual effective rate of 0.0201% of the fund's average daily net assets.

(4) Portfolio Securities

For the year ended December 31, 2022, purchases and sales of investments, other than short-term obligations, were as follows:

	Purchases	Sales
U.S. Government securities	$131,455,988	$147,095,165
Non-U.S. Government securities	130,068,560	123,261,901

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Notes to Financial Statements - continued

(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. Transactions in fund shares were as follows:

	Year ended 12/31/22		Year ended 12/31/21
	Shares	Amount	Shares	Amount
Shares sold
Initial Class	564,068	$4,806,981	223,436	$2,667,109
Service Class	1,016,586	9,132,485	1,067,266	12,419,057
	1,580,654	$13,939,466	1,290,702	$15,086,166
Shares issued to shareholders in reinvestment of distributions
Initial Class	1,217,463	$10,811,076	291,582	$3,498,989
Service Class	1,169,851	10,271,292	263,972	3,133,350
	2,387,314	$21,082,368	555,554	$6,632,339
Shares reacquired
Initial Class	(1,040,479)	$(10,427,441)	(931,878)	$(11,261,662)
Service Class	(1,543,930)	(14,930,236)	(1,526,352)	(18,030,929)
	(2,584,409)	$(25,357,677)	(2,458,230)	$(29,292,591)
Net change
Initial Class	741,052	$5,190,616	(416,860)	$(5,095,564)
Service Class	642,507	4,473,541	(195,114)	(2,478,522)
	1,383,559	$9,664,157	(611,974)	$(7,574,086)

The fund is one of several mutual funds in which certain MFS funds may invest. The MFS funds do not invest in the underlying funds for the purpose of exercising management or control. At the end of the period, the MFS Moderate Allocation Portfolio, the MFS Conservative Allocation Portfolio, and the MFS Growth Allocation Portfolio were the owners of record of approximately 27%, 16%, and 7%, respectively, of the value of outstanding voting shares of the fund.

(6) Line of Credit

The fund and certain other funds managed by MFS participate in a $1.45 billion unsecured committed line of credit of which $1.2 billion is reserved for use by the fund and certain other MFS U.S. funds. The line of credit is provided by a syndicate of banks under a credit agreement. Borrowings may be made for temporary financing needs. Interest is charged to each fund, based on its borrowings, generally at a rate equal to the highest of 1) Daily Simple SOFR (Secured Overnight Financing Rate) plus 0.10%, 2) the Federal Funds Effective Rate, or 3) the Overnight Bank Funding Rate, each plus an agreed upon spread. A commitment fee, based on the average daily unused portion of the committed line of credit, is allocated among the participating funds. The line of credit expires on March 16, 2023 unless extended or renewed. In addition, the fund and other funds managed by MFS have established unsecured uncommitted borrowing arrangements with certain banks for temporary financing needs. Interest is charged to each fund, based on its borrowings, at rates equal to customary reference rates plus an agreed upon spread. For the year ended December 31, 2022, the fund’s commitment fee and interest expense were $1,024 and $0, respectively, and are included in “Miscellaneous” expense in the Statement of Operations.

(7) Investments in Affiliated Issuers

Affiliated Issuers	Beginning Value	Purchases	Sales Proceeds	Realized Gain (Loss)	Change in Unrealized Appreciation or Depreciation	Ending Value
MFS Institutional Money Market Portfolio	$157,672	$72,577,887	$72,219,751	$(191)	$20	$515,637

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Notes to Financial Statements - continued

Affiliated Issuers	Dividend Income	Capital Gain Distributions
MFS Institutional Money Market Portfolio	$13,234	$—

(8) LIBOR Transition

(9) Russia and Ukraine Conflict

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MFS Inflation-Adjusted Bond Portfolio

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of MFS Variable Insurance Trust III and the Shareholders of MFS Inflation-Adjusted Bond Portfolio:

Opinion on the Financial Statements and Financial Highlights

We have audited the accompanying statement of assets and liabilities of MFS Inflation-Adjusted Bond Portfolio (the “Fund”), including the portfolio of investments, as of December 31, 2022, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of December 31, 2022, and 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 five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of December 31, 2022, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

DELOITTE & TOUCHE LLP

Boston, Massachusetts
February 15, 2023

We have served as the auditor of one or more of the MFS investment companies since 1924.

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MFS Inflation-Adjusted Bond Portfolio

Trustees and Officers — Identification and Background

Name, Age	Position(s) Held with Fund	Trustee/Officer Since^(h)	Number of MFS Funds overseen by the Trustee	Principal Occupations During the Past Five Years	Other Directorships During the Past Five Years ^(j)
INTERESTED TRUSTEE
Michael W. Roberge ^(k) (age 56)	Trustee	January 2021	136	Massachusetts Financial Services Company, Chairman (since January 2021); Chief Executive Officer (since January 2017); Director; Chairman of the Board (since January 2022); President (until December 2018); Chief Investment Officer (until December 2018)	N/A
INDEPENDENT TRUSTEES
John P. Kavanaugh (age 68)	Trustee and Chair of Trustees	January 2009	136	Private investor	N/A
Steven E. Buller (age 71)	Trustee	February 2014	136	Private investor	N/A
John A. Caroselli (age 68)	Trustee	March 2017	136	Private investor; JC Global Advisors, LLC (management consulting), President (since 2015)	N/A
Maureen R. Goldfarb (age 67)	Trustee	January 2009	136	Private investor	N/A
Peter D. Jones (age 67)	Trustee	January 2019	136	Private investor	N/A
James W. Kilman, Jr. (age 61)	Trustee	January 2019	136	Burford Capital Limited (finance and investment management), Senior Advisor (since May 3, 2021), Chief Financial Officer (2019 - May 2, 2021); KielStrand Capital LLC (family office), Chief Executive Officer (since 2016)	Alpha-En Corporation, Director (2016-2019)
Clarence Otis, Jr. (age 66)	Trustee	March 2017	136	Private investor	VF Corporation, Director; Verizon Communications, Inc., Director; The Travelers Companies, Director
Maryanne L. Roepke (age 66)	Trustee	May 2014	136	Private investor	N/A
Laurie J. Thomsen (age 65)	Trustee	March 2005	136	Private investor	The Travelers Companies, Director; Dycom Industries, Inc., Director

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Trustees and Officers - continued

Name, Age	Position(s) Held with Fund	Trustee/Officer Since^(h)	Number of MFS Funds for which the Person is an Officer	Principal Occupations During the Past Five Years
OFFICERS
Christopher R. Bohane ^(k) (age 49)	Assistant Secretary and Assistant Clerk	July 2005	136	Massachusetts Financial Services Company, Senior Vice President and Senior Managing Counsel
Kino Clark ^(k) (age 54)	Assistant Treasurer	January 2012	136	Massachusetts Financial Services Company, Vice President
John W. Clark, Jr. ^(k) (age 55)	Assistant Treasurer	April 2017	136	Massachusetts Financial Services Company, Vice President
David L. DiLorenzo ^(k) (age 54)	President	July 2005	136	Massachusetts Financial Services Company, Senior Vice President
Heidi W. Hardin ^(k) (age 55)	Secretary and Clerk	April 2017	136	Massachusetts Financial Services Company, Executive Vice President and General Counsel
Brian E. Langenfeld ^(k) (age 49)	Assistant Secretary and Assistant Clerk	June 2006	136	Massachusetts Financial Services Company, Vice President and Managing Counsel
Rosa E. Licea-Mailloux ^(k) (age 46)	Chief Compliance Officer	March 2022	136	Massachusetts Financial Services Company, Vice President (since 2018); Director of Corporate Compliance (2018-2021), Senior Director Compliance (2021-2022), Senior Managing Director of North American Compliance & Chief Compliance Officer (since March 2022); Natixis Investment Managers (investment management), Funds Chief Compliance Officer, Deputy General Counsel & Senior Vice President (until 2018)
Amanda S. Mooradian ^(k) (age 43)	Assistant Secretary and Assistant Clerk	September 2018	136	Massachusetts Financial Services Company, Assistant Vice President and Senior Counsel
Susan A. Pereira ^(k) (age 52)	Assistant Secretary and Assistant Clerk	July 2005	136	Massachusetts Financial Services Company, Vice President and Managing Counsel
Kasey L. Phillips ^(k) (age 52)	Assistant Treasurer	September 2012	136	Massachusetts Financial Services Company, Vice President
Matthew A. Stowe ^(k) (age 48)	Assistant Secretary and Assistant Clerk	October 2014	136	Massachusetts Financial Services Company, Vice President and Senior Managing Counsel
William B. Wilson ^(k) (age 40)	Assistant Secretary and Assistant Clerk	October 2022	136	Massachusetts Financial Services Company, Assistant Vice President and Counsel
James O. Yost ^(k) (age 62)	Treasurer	September 1990	136	Massachusetts Financial Services Company, Senior Vice President

(h)	Date first appointed to serve as Trustee/Officer of an MFS Fund. Each Trustee has served continuously since appointment unless indicated otherwise. From January 2012 through December 2016, Messrs. DiLorenzo and Yost served as Treasurer and Deputy Treasurer of the Funds, respectively.

(j)	Directorships or trusteeships of companies required to report to the Securities and Exchange Commission (i.e., “public companies”).

(k)

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Trustees and Officers - continued

Messrs. Buller, Kilman and Otis and Ms. Roepke are members of the Trust’s Audit Committee.

Each of the Interested Trustees and certain Officers hold comparable officer positions with certain affiliates of MFS.

The Statement of Additional Information for a Fund includes further information about the Trustees and is available without charge upon request by calling 1-800-225-2606.

Investment Adviser	Custodian
Massachusetts Financial Services Company 111 Huntington Avenue Boston, MA 02199-7618	State Street Bank and Trust Company 1 Lincoln Street Boston, MA 02111-2900

Distributor	Independent Registered Public Accounting Firm
MFS Fund Distributors, Inc. 111 Huntington Avenue Boston, MA 02199-7618	Deloitte & Touche LLP 200 Berkeley Street Boston, MA 02116

Portfolio Manager(s)
Robert Spector Erik Weisman

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MFS Inflation-Adjusted Bond Portfolio

Board Review of Investment Advisory Agreement

MFS Inflation-Adjusted Bond Portfolio

In connection with their contract review meetings, the Trustees received and relied upon materials that included, among other items: (i) information provided by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent third party, on the investment performance of the Fund for various time periods ended December 31, 2021 and the investment performance of a group of funds with substantially similar investment classifications/objectives (the “Broadridge performance universe”), (ii) information provided by Broadridge on the Fund’s advisory fees and other expenses and the advisory fees and other expenses of comparable funds identified by Broadridge as well as all other funds in the same investment classification/category (the “Broadridge expense group and universe”), (iii) information provided by MFS on the advisory fees of portfolios of other clients of MFS, including institutional separate accounts and other clients, (iv) information as to whether and to what extent applicable expense waivers, reimbursements or fee “breakpoints” are observed for the Fund, (v) information regarding MFS’ financial results and financial condition, including MFS’ and certain of its affiliates’ estimated profitability from services performed for the Fund and the MFS Funds as a whole, and compared to MFS’ institutional business, (vi) MFS’ views regarding the outlook for the mutual fund industry and the strategic business plans of MFS, (vii) descriptions of various functions performed by MFS for the Funds, such as compliance monitoring and portfolio trading practices, and (viii) information regarding the overall organization of MFS, including information about MFS’ senior management and other personnel providing investment advisory, administrative and other services to the Fund and the other MFS Funds. The comparative performance, fee and expense information prepared and provided by Broadridge was not independently verified and the independent Trustees did not independently verify any information provided to them by MFS.

Based on information provided by Broadridge and MFS, the Trustees reviewed the Fund’s total return investment performance as well as the Broadridge performance universe over various time periods. The Trustees placed particular emphasis on the total return performance of the Fund’s Initial Class shares in comparison to the performance of funds in its Broadridge performance universe over the five-year period ended December 31, 2021, which the Trustees believed was a long enough period to reflect differing market conditions. The total return performance of the Fund’s Initial Class shares was in the 2nd quintile relative to the other funds in the universe for this five-year period (the 1st quintile being the best performers and the 5th quintile being the worst performers). The total return performance of the Fund’s Initial Class shares was in the 5th quintile for the one-year period and the 4th quintile for the three-year period ended December 31, 2021 relative to the Broadridge performance universe. Because of the passage of time, these performance results may differ from the performance results for more recent periods, including those shown elsewhere in this report.

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Board Review of Investment Advisory Agreement - continued

In assessing the reasonableness of the Fund’s advisory fee, the Trustees considered, among other information, the Fund’s advisory fee and the total expense ratio of the Fund’s Initial Class shares as a percentage of average daily net assets and the advisory fee and total expense ratios of the Broadridge expense group based on information provided by Broadridge. The Trustees considered that, according to the data provided by Broadridge (which takes into account any fee reductions or expense limitations that were in effect during the Fund’s last fiscal year), the Fund’s effective advisory fee rate and total expense ratio were each approximately at the Broadridge expense group median.

The Trustees also considered whether the Fund may benefit from any economies of scale in the management of the Fund in the event of growth in assets of the Fund and/or growth in assets of the MFS Funds as a whole. They noted that the Fund’s advisory fee rate schedule is not subject to any breakpoints. Taking into account that the Fund’s effective advisory fee rate was approximately at the Broadridge expense group median described above, the Trustees determined not to recommend any advisory fee breakpoints for the Fund at this time. The Trustees also noted that MFS has agreed in writing to waive a portion of the management fees of certain MFS Funds, including the Fund, if the total combined assets of certain funds within the MFS Funds’ complex increase above agreed upon thresholds (the “group fee waiver”), enabling the Fund’s shareholders to share in the benefits from any economies of scale at the complex level. The group fee waiver is reviewed and renewed annually between the Board and MFS. The Trustees concluded that the group fee waiver was sufficient to allow the Fund to benefit from economies of scale as its assets and overall complex assets grow.

The Trustees also considered the nature, quality, cost, and extent of administrative, transfer agency, and distribution services provided to the Fund by MFS and its affiliates under agreements and plans other than the investment advisory agreement, including any 12b-1 fees the Fund pays to MFS Fund Distributors, Inc., an affiliate of MFS. The Trustees also considered the nature, extent and quality of certain other services MFS performs or arranges for on the Fund’s behalf, which may include securities lending programs, directed expense payment programs, class action recovery programs, and MFS’ interaction with third-party service providers, principally custodians and sub-custodians. The Trustees concluded that the various non-advisory services provided by MFS and its affiliates on behalf of the Fund were satisfactory.

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Proxy Voting Policies and Information

Quarterly Portfolio Disclosure

FURTHER INFORMATION

Information About Fund Contracts and Legal Claims

Federal Tax Information (unaudited)

The following information is provided pursuant to provisions of the Internal Revenue Code.

The fund designates $12,110,000 as capital gain dividends paid during the fiscal year.

The fund intends to pass through the maximum amount allowable as Section 163(j) Interest Dividends as defined in Treasury Regulation §1.163(j)-1(b).

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FACTS

WHAT DOES MFS DO WITH YOUR PERSONAL INFORMATION?

Why?

What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include:
	• Social Security number and account balances
	• Account transactions and transaction history
	• Checking account information and wire transfer instructions
	When you are no longer our customer, we continue to share your information as described in this notice.

How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MFS chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MFS share?	Can you limit this sharing?
For our everyday business purposes – such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes – to offer our products and services to you	No	We don't share
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes – information about your transactions and experiences	No	We don't share
For our affiliates' everyday business purposes – information about your creditworthiness	No	We don't share
For nonaffiliates to market to you	No	We don't share

Questions?

Call 800-225-2606 or go to mfs.com.

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Page 2

Who we are
Who is providing this notice?	MFS Funds, MFS Investment Management, MFS Institutional Advisors, Inc., and MFS Heritage Trust Company.

What we do
How does MFS protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include procedural, electronic, and physical safeguards for the protection of the personal information we collect about you.
How does MFS collect my personal information?	We collect your personal information, for example, when you
	• open an account or provide account information
	• direct us to buy securities or direct us to sell your securities
	• make a wire transfer
	We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only
	• sharing for affiliates' everyday business purposes – information about your creditworthiness
	• affiliates from using your information to market to you
	• sharing for nonaffiliates to market to you
	State laws and individual companies may give you additional rights to limit sharing.

Definitions
Affiliates	Companies related by common ownership or control. They can be financial and nonfinancial companies.
	• MFS does not share personal information with affiliates, except for everyday business purposes as described on page one of this notice.
Nonaffiliates	Companies not related by common ownership or control. They can be financial and nonfinancial companies.
	• MFS does not share with nonaffiliates so they can market to you.
Joint marketing	A formal agreement between nonaffiliated financial companies that together market financial products or services to you.
	• MFS doesn't jointly market.

Other important information

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Table of Contents

Annual Report

December 31, 2022

MFS^® Limited Maturity Portfolio

MFS^® Variable Insurance Trust III

VLT-ANN

MFS^® Limited Maturity Portfolio

CONTENTS

The 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.

NOT FDIC INSURED • MAY LOSE VALUE • NO BANK OR CREDIT UNION GUARANTEE •

NOT A DEPOSIT • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY OR NCUA/NCUSIF

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MFS Limited Maturity Portfolio

LETTER FROM THE CHAIR AND CEO

Dear Shareholders:

During times of market transition, it is important to have a deep understanding of company fundamentals, and we have built our unique global research platform to do just that.

Respectfully,

Michael W. Roberge

Chair and Chief Executive Officer

MFS Investment Management

February 15, 2023

The opinions expressed in this letter are subject to change and may not be relied upon for investment advice. No forecasts can be guaranteed.

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MFS Limited Maturity Portfolio

Portfolio Composition

Portfolio structure (i)

Fixed income sectors (i)

Investment Grade Corporates	42.1%
U.S. Treasury Securities	32.3%
Collateralized Debt Obligations	11.3%
Commercial Mortgage-Backed Securities	7.1%
Emerging Markets Bonds	2.9%
Municipal Bonds	2.8%
Asset-Backed Securities	2.2%
High Yield Corporates	1.8%
Mortgage-Backed Securities	1.0%

Composition including fixed income credit quality (a)(i)

AAA	8.1%
AA	10.8%
A	24.4%
BBB	35.1%
BB	1.8%
U.S. Government	17.4%
Federal Agencies	1.1%
Not Rated	4.8%
Cash & Cash Equivalents	1.3%
Other	(4.8)%

Portfolio facts

Average Duration (d)	2.0
Average Effective Maturity (m)	2.3 yrs.

(a)

(d)

(i)

(m)

Where the fund holds convertible bonds, they are treated as part of the equity portion of the portfolio.

Other includes equivalent exposure from currency derivatives and/or any offsets to derivative positions and may be negative.

Percentages are based on net assets as of December 31, 2022.

The portfolio is actively managed and current holdings may be different.

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MFS Limited Maturity Portfolio

Management Review

Summary of Results

For the twelve months ended December 31, 2022, Initial Class shares of the MFS Limited Maturity Portfolio (fund) provided a total return of -4.14%, while Service Class shares of the fund provided a total return of -4.24%. These compare with a return of -3.69% over the same period for the fund’s benchmark, the Bloomberg 1-3 Year U.S. Government/Credit Bond Index.

Market Environment

Factors Affecting Performance

Relative to the Bloomberg 1-3 Year U.S. Government/Credit Bond Index, the fund's asset allocation decisions detracted from performance, led by the fund's exposure to collateralized mortgage obligations (CMOs) and commercial mortgage-backed securities (CMBS), for which the benchmark has no exposure. Security selection also weighed on the fund’s relative performance over the reporting period, most notably within both the financial institutions and industrials sectors and within “BBB” rated(r) bonds.

Conversely, the fund’s underweight allocation to “AAA” rated bonds contributed to relative returns. Yield curve(y) positioning, particularly the fund’s greater exposure to shifts in the middle portion (centered around maturities of 5 years) of the yield curve, further supported relative performance.

Respectfully,

Portfolio Manager(s)
Philipp Burgener and Alexander Mackey

(r)

Securities rated “BBB”, “Baa”, or higher are considered investment grade; securities rated “BB”, “Ba”, or below are considered non-investment grade. Ratings are assigned to underlying securities utilizing ratings from Moody's, Fitch, and Standard & Poor's and applying the following hierarchy: If all three agencies provide a rating, the middle rating (after dropping the highest and lowest ratings) is assigned; if two of the three agencies rate a security, the lower of the two is assigned. If none of the 3 rating agencies above assign a rating, but the security is rated by DBRS Morningstar, then the DBRS Morningstar rating is assigned. If none of the 4 rating agencies listed above rate the security, but the security is rated by the Kroll Bond Rating Agency (KBRA), then the KBRA rating is assigned. Ratings are shown in the S&P and Fitch scale (e.g., AAA). For securities that are not rated by any of the rating agencies, the security is considered Not Rated.

(y)	A yield curve graphically depicts the yields of different maturity bonds of the same credit quality and type; a normal yield curve is upward sloping, with short-term rates lower than long-term rates.

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MFS Limited Maturity Portfolio

Performance Summary Through 12/31/22

Growth of a Hypothetical $10,000 Investment

Total Returns through 12/31/22

Average annual total returns

Share Class	Class Inception Date	1-yr	5-yr	10-yr
Initial Class	3/07/08	(4.14)%	1.31%	1.19%
Service Class	3/07/08	(4.24)%	1.07%	0.95%

Comparative benchmark(s)

Bloomberg 1-3 Year U.S. Government/Credit Bond Index (f)

(3.69)%

0.92%

0.88%

(f)	Source: FactSet Research Systems Inc.

Benchmark Definition(s)

Bloomberg 1-3 Year U.S. Government/Credit Bond Index^(a) – a market capitalization-weighted index that measures the performance of the short-term (1 to 3 years) investment-grade corporate and U.S. government bond markets.

It is not possible to invest directly in an index.

(a)

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MFS Limited Maturity Portfolio

Performance Summary – continued

Notes to Performance Summary

Average annual total return represents the average annual change in value for each share class for the periods presented.

From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.

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MFS Limited Maturity Portfolio

Expense Table

Fund expenses borne by the shareholders during the period,
July 1, 2022 through December 31, 2022

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2022 through December 31, 2022.

Actual Expenses

Hypothetical Example for Comparison Purposes

Share Class		Annualized Expense Ratio	Beginning Account Value 7/01/22	Ending Account Value 12/31/22	Expenses Paid During Period (p) 7/01/22-12/31/22
Initial Class	Actual	0.45%	$1,000.00	$1,000.79	$2.27
Initial Class	Hypothetical (h)	0.45%	$1,000.00	$1,022.94	$2.29
Service Class	Actual	0.70%	$1,000.00	$1,000.78	$3.53
Service Class	Hypothetical (h)	0.70%	$1,000.00	$1,021.68	$3.57

(h)	5% class return per year before expenses.

(p)	“Expenses Paid During Period” are equal to each class's annualized expense ratio, as shown above, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

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MFS Limited Maturity Portfolio

Portfolio of Investments − 12/31/22

The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.

Issuer		Shares/Par	Value ($)
Bonds – 98.0%
Aerospace & Defense – 1.0%
Boeing Co., 1.167%, 2/04/2023	$	438,000	$ 436,318
Boeing Co., 1.433%, 2/04/2024		876,000	839,477
Boeing Co., 2.196%, 2/04/2026		1,118,000	1,015,773
Huntington Ingalls Industries, Inc., 3.844%, 5/01/2025		1,049,000	1,013,552
Raytheon Technologies Corp., 3.65%, 8/16/2023		114,000	113,040
			$3,418,160
Asset-Backed & Securitized – 20.4%
3650R Commercial Mortgage Trust, 2021-PF1, “XA”, 1.028%, 11/15/2054 (i)	$	13,060,655	$ 769,468
ACREC 2021-FL1 Ltd., “AS”, FLR, 5.826% (LIBOR - 1mo. + 1.5%), 10/16/2036 (n)		898,000	845,233
ACREC 2021-FL1 Ltd., “B”, FLR, 6.126% (LIBOR - 1mo. + 1.8%), 10/16/2036 (n)		1,596,000	1,502,903
ACREC 2021-FL1 Ltd., “C”, FLR, 6.476% (LIBOR - 1mo. + 2.15%), 10/16/2036 (n)		902,000	831,907
AmeriCredit Automobile Receivables Trust, 2020-1, “C”, 1.59%, 10/20/2025		659,000	637,673
Arbor Realty Trust, Inc., CLO, 2021-FL3, “B”, FLR, 5.917% (LIBOR - 1mo. + 1.6%), 8/15/2034 (n)		455,000	414,075
Arbor Realty Trust, Inc., CLO, 2021-FL3, “C”, FLR, 6.168% (LIBOR - 1mo. + 1.85%), 8/15/2034 (n)		264,000	238,269
Arbor Realty Trust, Inc., CLO, 2021-FL4, “AS”, FLR, 6.017% (LIBOR - 1mo. + 1.7%), 11/15/2036 (n)		1,102,500	1,037,870
Arbor Realty Trust, Inc., CLO, 2021-FL4, “B”, FLR, 6.317% (LIBOR - 1mo. + 2%), 11/15/2036 (n)		1,102,500	1,030,937
Arbor Realty Trust, Inc., CLO, 2021-FL4, “C”, FLR, 6.618% (LIBOR - 1mo. + 2.3%), 11/15/2036 (n)		663,500	610,491
Arbor Realty Trust, Inc., CLO, 2022-FL1, “C”, FLR, 6.107% (SOFR - 30 day + 2.3%), 1/15/2037 (n)		1,737,500	1,619,157
AREIT 2019-CRE3 Trust, “AS”, FLR, 5.74% (LIBOR - 1mo. + 1.3%), 9/14/2036 (n)		647,000	630,113
AREIT 2019-CRE3 Trust, “B”, FLR, 5.99% (LIBOR - 1mo. + 1.55%), 9/14/2036 (n)		319,500	306,884
AREIT 2019-CRE3 Trust, “C”, FLR, 6.34% (SOFR - 1mo. + 2.014%), 9/14/2036 (n)		264,000	249,950
AREIT 2022-CRE6 Trust, “D”, FLR, 6.676% (SOFR - 30 day + 2.85%), 1/16/2037 (n)		237,500	219,408
Avery Point CLO Ltd., 2014-1A, “CR”, FLR, 6.708% (LIBOR - 3mo. + 2.35%), 4/25/2026 (n)		7,600	7,573
Balboa Bay Loan Funding Ltd., 2020-1A, “BR”, FLR, 5.892% (LIBOR - 3mo. + 1.65%), 1/20/2032 (n)		1,039,826	995,456
Balboa Bay Loan Funding Ltd., 2020-1A, “CR”, FLR, 6.342% (LIBOR - 3mo. + 2.1%), 1/20/2032 (n)		563,239	526,275
Ballyrock CLO 2018-1A Ltd., “A2”, FLR, 5.842% (LIBOR - 3mo. + 1.6%), 4/20/2031 (n)		1,748,737	1,685,820
Ballyrock CLO 2018-1A Ltd., “B”, FLR, 6.142% (LIBOR - 3mo. + 1.9%), 4/20/2031 (n)		741,069	698,080
BBCMS Mortgage Trust, 2018-C2, “XA”, 0.757%, 12/15/2051 (i)(n)		21,812,251	746,932
BBCMS Mortgage Trust, 2021-C10, “XA”, 1.297%, 7/15/2054 (i)		5,751,321	416,339
BBCMS Mortgage Trust, 2021-C11, “XA”, 1.383%, 9/15/2054 (i)		5,952,345	455,396
BDS 2021-FL10 Ltd., “B”, FLR, 6.289% (LIBOR - 1mo. + 1.95%), 12/16/2036 (n)		519,000	485,120
BDS 2021-FL10 Ltd., “C”, FLR, 6.639% (LIBOR - 1mo. + 2.3%), 12/16/2036 (n)		377,500	351,579
Benchmark 2021-B23 Mortgage Trust, “XA”, 1.271%, 2/15/2054 (i)		10,373,127	699,483
Benchmark 2021-B27 Mortgage Trust, “XA”, 1.266%, 7/15/2054 (i)		11,291,848	795,708
Benchmark 2021-B28 Mortgage Trust, “XA”, 1.282%, 8/15/2054 (i)		8,246,491	581,169
Benchmark 2021-B29 Mortgage Trust, “XA”, 1.042%, 9/15/2054 (i)		11,886,078	661,297
BSPRT 2022-FL8 Issuer Ltd., “A”, FLR, 5.307% (SOFR - 30 day + 1.5%), 2/15/2037 (n)		2,069,500	1,999,669
BSPRT 2022-FL8 Issuer Ltd., “B”, FLR, 5.857% (SOFR - 30 day + 2.05%), 2/15/2037 (n)		287,500	274,180
BSPRT 2022-FL8 Issuer Ltd., “C”, FLR, 6.107% (SOFR - 30 day + 2.3%), 2/15/2037 (n)		463,500	435,410
Business Jet Securities LLC, 2020-1A, “A”, 2.981%, 11/15/2035 (n)		183,882	167,487
Business Jet Securities LLC, 2021-1A, “A”, 2.162%, 4/15/2036 (n)		289,222	253,952
Business Jet Securities LLC, 2021-1A, “B”, 2.918%, 4/15/2036 (n)		74,594	63,222
BXMT 2020-FL2 Ltd., “B”, FLR, 5.84% (LIBOR - 1mo. + 1.4%), 2/15/2038 (n)		1,445,000	1,363,021
Capital Automotive, 2020-1A, “A4”, REIT, 3.19%, 2/15/2050 (n)		552,965	516,649
CD 2017-CD4 Mortgage Trust, “XA”, 1.226%, 5/10/2050 (i)		14,021,614	555,273
CF Hippolyta Issuer LLC, 2020-1, “A1”, 1.69%, 7/15/2060 (n)		339,267	302,827
CF Hippolyta Issuer LLC, 2020-1, “B1”, 2.28%, 7/15/2060 (n)		107,323	93,669
Commercial Equipment Finance 2021-A, LLC, “A”, 2.05%, 2/16/2027 (n)		448,754	432,162
Commercial Mortgage Pass-Through Certificates, 2019-BN24, “XA”, 0.639%, 11/15/2062 (i)		8,812,586	308,648
Commercial Mortgage Pass-Through Certificates, 2021-BN31, “XA”, 1.325%, 2/15/2054 (i)		9,113,465	684,558
Commercial Mortgage Pass-Through Certificates, 2021-BN34, “XA”, 0.976%, 6/15/2063 (i)		8,864,986	491,789
Commercial Mortgage Pass-Through Certificates, 2021-BN35, “XA”, 1.046%, 6/15/2064 (i)		4,932,345	293,636
Credit Acceptance Auto Loan Trust, 2021-4, “B”, 1.74%, 12/16/2030 (n)		478,000	438,912
Credit Acceptance Auto Loan Trust, 2021-2A, “A”, 0.96%, 2/15/2030 (n)		373,000	358,712

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MFS Limited Maturity Portfolio

Portfolio of Investments – continued

Issuer		Shares/Par	Value ($)
Bonds – continued
Asset-Backed & Securitized – continued
Credit Acceptance Auto Loan Trust, 2021-2A, “B”, 1.26%, 4/15/2030 (n)	$	250,000	$ 228,312
Credit Acceptance Auto Loan Trust, 2021-3A, “B”, 1.38%, 7/15/2030 (n)		250,000	229,371
Credit Acceptance Auto Loan Trust, 2021-3A, “C”, 1.63%, 9/16/2030 (n)		250,000	225,394
Credit Acceptance Auto Loan Trust, 2021-4, “A”, 1.26%, 10/15/2030 (n)		261,000	244,706
Fortress CBO Investments Ltd., 2022-FL3, “A”, FLR, 5.76% (SOFR - 30 day + 1.85%), 2/23/2039 (n)		1,241,500	1,214,137
Fortress CBO Investments Ltd., 2022-FL3, “AS”, FLR, 6.16% (SOFR - 30 day + 2.25%), 2/23/2039 (n)		1,154,000	1,104,409
GLS Auto Receivables Trust, 2021-3A, “B”, 0.78%, 11/17/2025 (n)		704,072	684,857
GS Mortgage Securities Trust, 2017-GS6, “XA”, 1.012%, 5/10/2050 (i)		15,254,437	542,329
GS Mortgage Securities Trust, 2017-GS7, “XA”, 1.082%, 8/10/2050 (i)		15,019,559	536,041
GS Mortgage Securities Trust, 2020-GC47, “A5”, 1.129%, 5/12/2053 (i)		8,339,877	520,415
Jamestown CLO Ltd., 2020-15A, “C”, FLR, 6.529% (LIBOR - 3mo. + 2.45%), 4/15/2033 (n)		1,998,469	1,874,178
JPMorgan Chase Commercial Mortgage Securities Corp., 0.987%, 9/15/2050 (i)		13,545,029	434,106
LoanCore 2018-CRE1 Ltd., “AS”, FLR, 5.817% (LIBOR - 1mo. + 1.5%), 5/15/2028 (n)		1,317,894	1,313,077
LoanCore 2018-CRE1 Ltd., “C”, FLR, 6.867% (LIBOR - 1mo. + 2.55%), 5/15/2028 (n)		741,500	711,893
LoanCore 2019-CRE3 Ltd., “AS”, FLR, 5.687% (LIBOR - 1mo. + 1.37%), 4/15/2034 (n)		1,807,643	1,799,602
LoanCore 2021-CRE5 Ltd., “AS”, FLR, 6.067% (LIBOR - 1mo. + 1.75%), 7/15/2036 (n)		1,344,000	1,263,353
LoanCore 2021-CRE5 Ltd., “B”, FLR, 6.317% (LIBOR - 1mo. + 2%), 7/15/2036 (n)		567,500	531,421
Madison Park Funding Ltd., 2014-13A, “BR2”, FLR, 5.726% (LIBOR - 3mo. + 1.5%), 4/19/2030 (n)		2,779,008	2,717,639
MF1 2020-FL4 Ltd., “B”, FLR, 7.2% (LIBOR - 1mo. + 2.75%), 11/15/2035 (n)		1,946,000	1,878,164
MF1 2021-FL6 Ltd., “B”, FLR, 5.976% (LIBOR - 1mo. + 1.65%), 7/16/2036 (n)		1,598,887	1,499,966
MF1 2022-FL9 Ltd., “B”, FLR, 7.471% (SOFR - 1mo. + 3.15%), 6/19/2037 (n)		1,885,500	1,855,741
Morgan Stanley Bank of America Merrill Lynch Trust, 2017-C33, “XA”, 1.251%, 5/15/2050 (i)		13,374,983	523,693
Morgan Stanley Capital I Trust, 2017-H1, “XA”, 1.325%, 6/15/2050 (i)		6,848,811	257,363
Morgan Stanley Capital I Trust, 2018-H4, “XA”, 0.831%, 12/15/2051 (i)		17,406,657	634,377
Morgan Stanley Capital I Trust, 2021-L5, “XA”, 1.296%, 5/15/2054 (i)		7,303,954	504,016
Morgan Stanley Capital I Trust, 2021-L6, “XA”, 1.228%, 6/15/2054 (i)		6,832,152	432,659
Oaktree CLO 2019-1A Ltd., “BR”, FLR, 6.074% (LIBOR - 3mo. + 1.75%), 4/22/2030 (n)		1,129,454	1,081,432
Oaktree CLO 2019-1A Ltd., “CR”, FLR, 6.674% (LIBOR - 3mo. + 2.35%), 4/22/2030 (n)		1,129,454	1,055,691
OneMain Financial Issuance Trust, 2020-1A, “A”, 3.84%, 5/14/2032 (n)		775,875	770,217
OneMain Financial Issuance Trust, 2020-2A, “A”, 1.75%, 9/14/2035 (n)		1,108,000	967,916
OneMain Financial Issuance Trust, 2022-S1, “A”, 4.13%, 5/14/2035 (n)		712,000	671,315
PFP III 2021-8 Ltd., “B”, FLR, 5.826% (LIBOR - 1mo. + 1.5%), 8/09/2037 (n)		490,500	441,969
Securitized Term Auto Receivable Trust, 2019-CRTA, “B”, 2.453%, 3/25/2026 (n)		58,371	57,974
Securitized Term Auto Receivable Trust, 2019-CRTA, “C”, 2.849%, 3/25/2026 (n)		74,841	74,376
Shackleton 2013-4RA CLO Ltd., “B”, FLR, 5.84% (LIBOR - 3mo. + 1.9%), 4/13/2031 (n)		927,055	854,126
Shackleton 2015-8A CLO Ltd., “CR”, FLR, 5.892% (LIBOR - 3mo. + 1.65%), 10/20/2027 (n)		709,957	689,539
Shelter Growth CRE 2021-FL3 Ltd., “C”, FLR, 6.467% (LIBOR - 1mo. + 2.15%), 9/15/2036 (n)		516,000	476,844
Southwick Park CLO, Ltd., 2019-4A, “B1R”, FLR, 5.742% (LIBOR - 3mo. + 1.5%), 7/20/2032 (n)		422,000	406,012
Southwick Park CLO, Ltd., 2019-4A, “B2R”, 2.46%, 7/20/2032 (n)		735,000	610,525
Southwick Park CLO, Ltd., 2019-4A, “CR”, FLR, 6.192% (LIBOR - 3mo. + 1.95%), 7/20/2032 (n)		1,001,000	940,518
Starwood Commercial Mortgage, 2021-FL2, “B”, FLR, 6.126% (LIBOR - 1mo. + 1.8%), 4/18/2038 (n)		764,000	714,990
TICP CLO 2018-3R Ltd., “B”, FLR, 5.592% (LIBOR - 3mo. + 1.35%), 4/20/2028 (n)		870,756	860,026
TICP CLO 2018-3R Ltd., “C”, FLR, 6.042% (LIBOR - 3mo. + 1.8%), 4/20/2028 (n)		1,528,084	1,502,971
TPG Real Estate Finance, 2021-FL4, “B”, FLR, 6.176% (LIBOR - 1mo. + 1.85%), 3/15/2038 (n)		2,000,000	1,851,968
UBS Commercial Mortgage Trust, 2017-C1, “XA”, 1.013%, 11/15/2050 (i)		9,271,530	330,612
UBS Commercial Mortgage Trust, 2018-C14, “XA”, 0.91%, 12/15/2051 (i)		7,842,420	322,359
Wells Fargo Commercial Mortgage Trust, 2021-C61, “XA”, 1.369%, 11/15/2054 (i)		4,005,055	300,154
			$67,827,094
Automotive – 2.8%
Daimler Trucks Finance North America LLC, 1.625%, 12/13/2024 (n)	$	1,487,000	$ 1,379,994
General Motors Financial Co., 1.7%, 8/18/2023		1,491,000	1,456,797
Hyundai Capital America, 5.75%, 4/06/2023 (n)		1,733,000	1,734,074
Hyundai Capital America, 0.8%, 1/08/2024 (n)		154,000	146,502
Hyundai Capital America, 5.875%, 4/07/2025 (n)		958,000	961,712
Mercedes-Benz Finance North America LLC, 0.75%, 3/01/2024 (n)		870,000	826,062
Stellantis Finance US, Inc., 1.711%, 1/29/2027 (n)		1,275,000	1,094,030

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MFS Limited Maturity Portfolio

Portfolio of Investments – continued

Issuer		Shares/Par	Value ($)
Bonds – continued
Automotive – continued
Volkswagen Group of America Finance LLC, 2.85%, 9/26/2024 (n)	$	602,000	$ 576,119
Volkswagen Group of America Finance LLC, 3.35%, 5/13/2025 (n)		650,000	620,756
Volkswagen Group of America Finance LLC, 1.25%, 11/24/2025 (n)		494,000	440,377
			$9,236,423
Broadcasting – 0.8%
Warnermedia Holdings, Inc., 3.788%, 3/15/2025 (n)	$	2,271,000	$ 2,169,142
Warnermedia Holdings, Inc., 3.755%, 3/15/2027 (n)		679,000	611,460
			$2,780,602
Brokerage & Asset Managers – 0.9%
Brookfield Finance, Inc., 3.9%, 1/25/2028	$	1,942,000	$ 1,780,632
National Securities Clearing Corp., 1.5%, 4/23/2025 (n)		250,000	231,739
National Securities Clearing Corp., 0.75%, 12/07/2025 (n)		1,000,000	886,094
			$2,898,465
Business Services – 1.0%
Equinix, Inc., 1.25%, 7/15/2025	$	607,000	$ 548,858
Global Payments, Inc., 1.2%, 3/01/2026		1,450,000	1,263,903
Tencent Holdings Ltd., 1.81%, 1/26/2026 (n)		1,481,000	1,335,225
			$3,147,986
Cable TV – 0.7%
SES S.A., 3.6%, 4/04/2023 (n)	$	2,469,000	$ 2,446,788
Chemicals – 0.1%
Westlake Chemical Corp., 0.875%, 8/15/2024	$	500,000	$ 464,257
Computer Software – 0.5%
Dell International LLC/EMC Corp., 4%, 7/15/2024	$	1,415,000	$ 1,390,627
Dell International LLC/EMC Corp., 5.85%, 7/15/2025		340,000	343,614
			$1,734,241
Computer Software - Systems – 0.4%
VMware, Inc., 1%, 8/15/2024	$	839,000	$ 780,687
VMware, Inc., 1.4%, 8/15/2026		649,000	565,776
			$1,346,463
Conglomerates – 0.7%
Carrier Global Corp., 2.242%, 2/15/2025	$	200,000	$ 188,387
Westinghouse Air Brake Technologies Corp., 4.4%, 3/15/2024		2,237,000	2,200,546
			$2,388,933
Consumer Products – 0.3%
GSK Consumer Healthcare Capital UK PLC, 3.125%, 3/24/2025	$	591,000	$ 562,038
GSK Consumer Healthcare Capital UK PLC, 3.375%, 3/24/2027		345,000	321,179
			$883,217
Containers – 0.5%
Berry Global, Inc., 1.57%, 1/15/2026	$	432,000	$ 384,832
Berry Global, Inc., 1.65%, 1/15/2027		1,534,000	1,311,986
			$1,696,818

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MFS Limited Maturity Portfolio

Portfolio of Investments – continued

Issuer		Shares/Par	Value ($)
Bonds – continued
Electronics – 0.9%
Microchip Technology, Inc., 0.983%, 9/01/2024	$	2,095,000	$ 1,939,887
Qorvo, Inc., 1.75%, 12/15/2024 (n)		515,000	474,289
Skyworks Solutions, Inc., 0.9%, 6/01/2023		590,000	578,329
			$2,992,505
Emerging Market Quasi-Sovereign – 0.6%
DAE Funding LLC (United Arab Emirates), 1.55%, 8/01/2024 (n)	$	619,000	$ 575,243
DAE Funding LLC (United Arab Emirates), 2.625%, 3/20/2025 (n)		344,000	321,227
Indian Oil Corp. Ltd., 5.75%, 8/01/2023		933,000	934,378
			$1,830,848
Emerging Market Sovereign – 0.5%
Emirate of Abu Dhabi, 0.75%, 9/02/2023 (n)	$	1,572,000	$ 1,522,787
Energy - Independent – 0.3%
EQT Corp., 5.678%, 10/01/2025	$	351,000	$ 349,294
EQT Corp., 5.7%, 4/01/2028		350,000	348,119
Pioneer Natural Resources Co., 0.55%, 5/15/2023		204,000	200,641
			$898,054
Energy - Integrated – 0.6%
Eni S.p.A., 4%, 9/12/2023 (n)	$	1,857,000	$ 1,831,027
Financial Institutions – 3.0%
AerCap Ireland Capital DAC/AerCap Global Aviation Trust, 4.875%, 1/16/2024	$	1,585,000	$ 1,569,879
AerCap Ireland Capital DAC/AerCap Global Aviation Trust, 3.15%, 2/15/2024		1,399,000	1,352,354
AerCap Ireland Capital DAC/AerCap Global Aviation Trust, 1.75%, 10/29/2024		798,000	733,805
AerCap Ireland Capital DAC/AerCap Global Aviation Trust, 6.5%, 7/15/2025		1,212,000	1,228,093
Air Lease Corp., 2.2%, 1/15/2027		1,101,000	959,475
Avolon Holdings Funding Ltd., 3.95%, 7/01/2024 (n)		1,214,000	1,162,163
Avolon Holdings Funding Ltd., 2.125%, 2/21/2026 (n)		1,574,000	1,354,704
Avolon Holdings Funding Ltd., 4.25%, 4/15/2026 (n)		506,000	458,715
Avolon Holdings Funding Ltd., 2.528%, 11/18/2027 (n)		886,000	708,175
Avolon Holdings Funding Ltd., 2.75%, 2/21/2028 (n)		678,000	544,253
			$10,071,616
Food & Beverages – 1.4%
General Mills, Inc., 5.241%, 11/18/2025	$	834,000	$ 836,077
JBS USA Lux S.A./JBS USA Food Co./JBS USA Finance, Inc., 5.125%, 2/01/2028 (n)		546,000	517,265
JBS USA Lux S.A./JBS USA Food Co./JBS USA Finance, Inc., 3%, 2/02/2029 (n)		1,669,000	1,381,339
JDE Peet's N.V., 0.8%, 9/24/2024 (n)		1,392,000	1,271,376
JDE Peet's N.V., 1.375%, 1/15/2027 (n)		678,000	572,273
			$4,578,330
Food & Drug Stores – 0.9%
7-Eleven, Inc., 0.625%, 2/10/2023 (n)	$	1,785,000	$ 1,775,850
7-Eleven, Inc., 0.8%, 2/10/2024 (n)		1,339,000	1,274,220
			$3,050,070
Forest & Paper Products – 0.3%
Fibria Overseas Finance Ltd., 5.5%, 1/17/2027	$	829,000	$ 831,794

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MFS Limited Maturity Portfolio

Portfolio of Investments – continued

Issuer		Shares/Par	Value ($)
Bonds – continued
Gaming & Lodging – 1.5%
GLP Capital LP/GLP Financing II, Inc., 5.375%, 11/01/2023	$	1,459,000	$ 1,453,930
GLP Capital LP/GLP Financing II, Inc., 5.25%, 6/01/2025		1,084,000	1,065,588
Hyatt Hotels Corp., 1.3%, 10/01/2023		1,224,000	1,189,795
Hyatt Hotels Corp., 1.8%, 10/01/2024		1,134,000	1,062,570
Marriott International, Inc., 3.75%, 10/01/2025		370,000	354,837
			$5,126,720
Industrial – 0.1%
Howard University, Washington D.C., AGM, 2.416%, 10/01/2024	$	117,000	$ 110,482
Howard University, Washington D.C., AGM, 2.516%, 10/01/2025		144,000	134,492
			$244,974
Insurance – 0.2%
Equitable Financial Life Insurance Co., 1.4%, 7/07/2025 (n)	$	882,000	$ 799,769
Internet – 0.2%
Baidu, Inc., 3.875%, 9/29/2023	$	676,000	$ 667,956
Machinery & Tools – 0.5%
CNH Industrial Capital LLC, 4.2%, 1/15/2024	$	1,121,000	$ 1,104,905
CNH Industrial Capital LLC, 1.875%, 1/15/2026		448,000	406,244
			$1,511,149
Major Banks – 16.0%
Bank of America Corp., 4.2%, 8/26/2024	$	692,000	$ 681,294
Bank of America Corp., 4.45%, 3/03/2026		995,000	974,967
Bank of America Corp., 4.25%, 10/22/2026		575,000	555,421
Bank of America Corp., 1.734% to 7/22/2026, FLR (SOFR - 1 day + 0.96%) to 7/22/2027		2,531,000	2,217,451
Bank of America Corp., 4.183%, 11/25/2027		959,000	909,612
Barclays PLC, 1.007% to 12/10/2023, FLR (CMT - 1yr. + 0.8%) to 12/10/2024		207,000	197,045
Barclays PLC, 2.852% to 5/07/2025, FLR (LIBOR - 3mo. + 2.452%) to 5/07/2026		550,000	511,074
Barclays PLC, 2.279% to 11/24/2026, FLR (CMT - 1yr. + 1.05%) to 11/24/2027		1,474,000	1,274,091
BNP Paribas S.A., 2.591% to 1/20/2027, FLR (SOFR - 1 day + 1.228%) to 1/20/2028 (n)		1,764,000	1,551,442
Capital One Financial Corp., 2.636% to 3/03/2025, FLR (SOFR - 1 day + 1.29%) to 3/03/2026		1,545,000	1,447,119
Deutsche Bank AG, 0.898%, 5/28/2024		421,000	393,653
Deutsche Bank AG, 1.447% to 4/1/2024, FLR (SOFR - 1 day + 1.131%) to 4/01/2025		2,012,000	1,868,646
Deutsche Bank AG, 2.311% to 11/16/2026, FLR (SOFR - 1 day + 1.219%) to 11/16/2027		464,000	393,417
Goldman Sachs Group, Inc., 1.757% to 1/24/2024, FLR (SOFR - 1 day + 0.73%) to 1/24/2025		1,426,000	1,364,900
Goldman Sachs Group, Inc., 3.5%, 4/01/2025		750,000	721,232
Goldman Sachs Group, Inc., 1.093% to 12/09/2025, FLR (SOFR - 1 day + 0.789%) to 12/09/2026		821,000	723,733
Goldman Sachs Group, Inc., 5.95%, 1/15/2027		1,439,000	1,476,850
Goldman Sachs Group, Inc., 1.948% to 10/21/2026, FLR (SOFR - 1 day + 0.913%) to 10/21/2027		1,205,000	1,053,634
HSBC Holdings PLC, 2.099% to 6/04/2025, FLR (SOFR - 1 day + 1.929%) to 6/04/2026		910,000	828,097
HSBC Holdings PLC, 1.589% to 5/24/2026, FLR (SOFR - 1 day + 1.29%) to 5/24/2027		623,000	537,158
HSBC Holdings PLC, 2.251% to 11/22/2026, FLR (SOFR - 1 day + 1.1%) to 11/22/2027		900,000	779,441
JPMorgan Chase & Co., 3.797% to 7/23/2023, FLR (LIBOR - 3mo. + 0.89%) to 7/23/2024		1,380,000	1,366,288
JPMorgan Chase & Co., 2.005% to 3/13/2025, FLR (SOFR - 1 day + 1.585%) to 3/13/2026		1,642,000	1,519,763
JPMorgan Chase & Co., 1.04% to 2/04/2026, FLR (SOFR - 1 day + 0.695%) to 2/04/2027		1,071,000	931,629
JPMorgan Chase & Co., 1.578% to 4/22/2026, FLR (SOFR - 1 day + 0.885%) to 4/22/2027		862,000	757,407
JPMorgan Chase & Co., 4.25%, 10/01/2027		959,000	924,001
Lloyds Banking Group PLC, 3.511% to 3/18/2025, FLR (CMT - 1yr. + 1.6%) to 3/18/2026		450,000	427,515
Mitsubishi UFJ Financial Group, Inc., 0.953% to 7/19/2024, FLR (CMT - 1yr. + 0.55%) to 7/19/2025		1,003,000	931,954
Mitsubishi UFJ Financial Group, Inc., 0.962% to 10/11/2024, FLR (CMT - 1yr. + 0.45%) to 10/11/2025		437,000	401,801
Mizuho Financial Group, 0.849% to 9/08/2023, FLR (LIBOR - 3mo. + 0.61%) to 9/08/2024		600,000	579,053
Morgan Stanley, 4.598% to 11/10/2022, FLR (SOFR - 1 day + 0.466%) to 11/10/2023		1,637,000	1,632,196
Morgan Stanley, 0.529% to 1/25/2023, FLR (SOFR - 1 day + 0.455%) to 1/25/2024		2,151,000	2,136,572

Table of Contents

MFS Limited Maturity Portfolio

Portfolio of Investments – continued

Issuer		Shares/Par	Value ($)
Bonds – continued
Major Banks – continued
Morgan Stanley, 0.864% to 10/21/2024, FLR (SOFR - 1 day + 0.745%) to 10/21/2025	$	1,635,000	$ 1,500,071
Morgan Stanley, 4.35%, 9/08/2026		1,350,000	1,309,827
Morgan Stanley, 3.625%, 1/20/2027		381,000	359,289
Morgan Stanley, 3.95%, 4/23/2027		135,000	127,493
Morgan Stanley, 1.512% to 7/20/2026, FLR (SOFR - 1 day + 0.858%) to 7/20/2027		411,000	356,661
Nationwide Building Society, 2.972% to 2/16/2027, FLR (SOFR - 1 day + 1.29%) to 2/16/2028 (n)		750,000	659,247
NatWest Group PLC, 2.359% to 5/22/2023, FLR (CMT - 1yr. + 2.15%) to 5/22/2024		1,038,000	1,023,134
NatWest Group PLC, 4.269% to 3/22/2024, FLR (LIBOR - 3mo. + 1.762%) to 3/22/2025		2,018,000	1,973,359
PNC Bank N.A., 2.5%, 8/27/2024		1,183,000	1,134,280
PNC Financial Services Group, Inc., 5.354% to 9/22/2026, FLR (SOFR - 1 day + 0.765%) to 12/02/2028		1,717,000	1,730,513
Standard Chartered PLC, 0.991% to 1/12/2024, FLR (CMT - 1yr. + 0.78%) to 1/12/2025 (n)		907,000	855,889
Standard Chartered PLC, 1.214% to 3/23/2024, FLR (CMT - 1yr. + 0.88%) to 3/23/2025 (n)		437,000	411,342
Standard Chartered PLC, 1.822% to 11/23/2024, FLR (CMT - 1yr. + 0.95%) to 11/23/2025 (n)		444,000	405,525
Sumitomo Mitsui Financial Group, Inc., 0.508%, 1/12/2024		455,000	433,151
Sumitomo Mitsui Financial Group, Inc., 1.474%, 7/08/2025		1,613,000	1,469,713
Sumitomo Mitsui Financial Group, Inc., 2.174%, 1/14/2027		1,184,000	1,049,548
Sumitomo Mitsui Trust Bank Ltd., 0.85%, 3/25/2024 (n)		944,000	892,840
Toronto-Dominion Bank, 0.25%, 1/06/2023		910,000	909,586
UBS Group AG, 1.008% to 7/30/2023, FLR (CMT - 1yr. + 0.83%) to 7/30/2024 (n)		924,000	898,448
UBS Group AG, 4.703% to 8/05/2026, FLR (CMT - 1yr. + 2.05%) to 8/05/2027 (n)		374,000	361,466
UniCredit S.p.A., 2.569% to 9/22/2025, FLR (CMT - 1yr. + 2.3%) to 9/22/2026 (n)		421,000	372,806
Wells Fargo & Co., 2.164% to 2/11/2025, FLR (LIBOR - 3mo. + 0.75%) to 2/11/2026		2,242,000	2,090,066
Wells Fargo & Co., 3.526% to 3/24/2027, FLR (SOFR - 1 day + 1.51%) to 3/24/2028		734,000	679,685
			$53,072,395
Medical & Health Technology & Services – 1.0%
HCA Healthcare, Inc., 3.125%, 3/15/2027 (n)	$	411,000	$ 373,672
HCA, Inc., 5%, 3/15/2024		1,692,000	1,682,279
Thermo Fisher Scientific, Inc., 1.215%, 10/18/2024		1,500,000	1,407,765
			$3,463,716
Metals & Mining – 1.2%
Anglo American Capital PLC, 4.75%, 4/10/2027 (n)	$	766,000	$ 740,332
Glencore Funding LLC, 4.125%, 3/12/2024 (n)		1,354,000	1,332,289
Glencore Funding LLC, 1.625%, 9/01/2025 (n)		1,100,000	995,598
Glencore Funding LLC, 1.625%, 4/27/2026 (n)		1,191,000	1,049,381
			$4,117,600
Midstream – 1.8%
Enbridge, Inc., 2.5%, 2/14/2025	$	496,000	$ 467,916
Energy Transfer LP, 2.9%, 5/15/2025		635,000	598,008
Energy Transfer LP, 5.55%, 2/15/2028		436,000	432,482
Gray Oak Pipeline LLC, 2%, 9/15/2023 (n)		968,000	941,641
Plains All American Pipeline LP, 3.85%, 10/15/2023		750,000	739,454
Plains All American Pipeline LP/PAA Finance Corp., 4.65%, 10/15/2025		992,000	970,695
Western Midstream Operating LP, 3.35%, 2/01/2025		796,000	753,191
Western Midstream Operating LP, FLR, 5.04% (LIBOR - 3mo. + 0.85%), 1/13/2023		1,222,000	1,220,167
			$6,123,554
Mortgage-Backed – 1.0%
Fannie Mae, 5%, 7/01/2039 - 3/01/2042	$	440,151	$ 445,710
Fannie Mae, 2%, 5/25/2044		222,346	213,722
Freddie Mac, 0.903%, 4/25/2024 (i)		411,778	3,856
Freddie Mac, 1.582%, 4/25/2030 (i)		6,124,257	528,743
Freddie Mac, 3%, 4/15/2033 - 6/15/2045		2,132,240	1,974,369

Table of Contents

MFS Limited Maturity Portfolio

Portfolio of Investments – continued

Issuer		Shares/Par	Value ($)
Bonds – continued
Mortgage-Backed – continued
Freddie Mac, 2%, 7/15/2042	$	320,136	$ 289,608
			$3,456,008
Municipals – 2.8%
California Earthquake Authority Rev., Taxable, “B”, 1.477%, 7/01/2023	$	440,000	$ 432,575
California Municipal Finance Authority Rev., Taxable (Century Housing Corp.), 1.605%, 11/01/2023		280,000	271,487
Illinois Sales Tax Securitization Corp., Second Lien, Taxable, “B”, BAM, 2.128%, 1/01/2023		300,000	300,000
Illinois Sales Tax Securitization Corp., Second Lien, Taxable, “B”, BAM, 2.225%, 1/01/2024		730,000	710,221
Long Island, NY, Power Authority, Electric System General Rev., Taxable, “C”, 0.764%, 3/01/2023		595,000	591,156
Massachusetts Educational Financing Authority, Education Loan Rev., Taxable, “A”, 1.904%, 7/01/2023		65,000	64,073
Massachusetts Educational Financing Authority, Education Loan Rev., Taxable, “A”, 2.156%, 7/01/2024		190,000	182,077
Massachusetts Educational Financing Authority, Education Loan Rev., Taxable, “A”, 2.306%, 7/01/2025		150,000	139,975
Massachusetts Educational Financing Authority, Education Loan Rev., Taxable, “A”, 2.562%, 7/01/2026		185,000	169,347
Michigan Finance Authority Tobacco Settlement Asset-Backed Rev., Taxable (2006 Sold Tobacco Receipts), “A-1”, 2.326%, 6/01/2030		398,229	359,674
New Jersey Economic Development Authority State Pension Funding Rev., Capital Appreciation, Taxable, “B”, AGM, 0%, 2/15/2023		4,091,000	4,068,644
New Jersey Transportation Trust Fund Authority, Transportation System, Taxable, “B”, 2.551%, 6/15/2023		465,000	459,833
New Jersey Transportation Trust Fund Authority, Transportation System, Taxable, “B”, 2.631%, 6/15/2024		440,000	423,361
Port Authority of NY & NJ, Taxable, “AAA”, 1.086%, 7/01/2023		1,060,000	1,041,175
			$9,213,598
Natural Gas - Distribution – 0.7%
Atmos Energy Corp., 0.625%, 3/09/2023	$	1,055,000	$ 1,047,239
CenterPoint Energy Resources Corp., 0.7%, 3/02/2023		1,302,000	1,292,608
			$2,339,847
Natural Gas - Pipeline – 0.6%
APA Infrastructure Ltd., 4.2%, 3/23/2025 (n)	$	1,960,000	$ 1,892,523
Network & Telecom – 0.8%
AT&T, Inc., 0.9%, 3/25/2024	$	2,621,000	$ 2,488,953
Oils – 0.4%
Valero Energy Corp., 1.2%, 3/15/2024	$	1,330,000	$ 1,263,297
Other Banks & Diversified Financials – 2.1%
American Express Co., 2.25%, 3/04/2025	$	773,000	$ 729,613
Banque Federative du Credit Mutuel S.A., 0.65%, 2/27/2024 (n)		1,833,000	1,735,292
Groupe BPCE S.A., 4%, 9/12/2023 (n)		1,385,000	1,367,134
Groupe BPCE S.A., FLR, 5.975% (LIBOR - 3mo. + 1.24%), 9/12/2023 (n)		1,385,000	1,387,067
Macquarie Group Ltd., 1.201% to 10/14/2024, FLR (SOFR - 1 day + 0.694%) to 10/14/2025 (n)		654,000	600,170
Macquarie Group Ltd., 1.34% to 1/12/2026, FLR (SOFR - 1 day + 1.069%) to 1/12/2027 (n)		1,200,000	1,045,865
National Bank of Canada, 0.55% to 11/15/2023, FLR (CMT - 1yr. + 0.4%) to 11/15/2024		250,000	239,276
			$7,104,417
Pharmaceuticals – 0.4%
Royalty Pharma PLC, 0.75%, 9/02/2023	$	1,481,000	$ 1,434,771
Railroad & Shipping – 0.5%
Canadian Pacific Railway Co., 1.35%, 12/02/2024	$	1,588,000	$ 1,480,177
Real Estate - Office – 0.3%
Corporate Office Property LP, REIT, 2.25%, 3/15/2026	$	1,092,000	$ 957,381

Table of Contents

MFS Limited Maturity Portfolio

Portfolio of Investments – continued

Issuer		Shares/Par	Value ($)
Bonds – continued
Retailers – 1.0%
Alibaba Group Holding Ltd., 2.8%, 6/06/2023	$	1,223,000	$ 1,208,989
Kohl's Corp., 9.5%, 5/15/2025		1,587,000	1,673,095
Nordstrom, Inc., 2.3%, 4/08/2024		519,000	485,369
			$3,367,453
Specialty Stores – 0.7%
Genuine Parts Co., 1.75%, 2/01/2025	$	792,000	$ 739,471
Ross Stores, Inc., 0.875%, 4/15/2026		1,622,000	1,423,469
			$2,162,940
Telecommunications - Wireless – 1.2%
Crown Castle, Inc., REIT, 3.15%, 7/15/2023	$	1,037,000	$ 1,025,397
Crown Castle, Inc., REIT, 1.35%, 7/15/2025		257,000	233,795
Crown Castle, Inc., REIT, 2.9%, 3/15/2027		206,000	187,368
Rogers Communications, Inc., 3.2%, 3/15/2027 (n)		683,000	631,957
T-Mobile USA, Inc., 3.5%, 4/15/2025		1,901,000	1,828,202
			$3,906,719
Tobacco – 0.8%
B.A.T. Capital Corp., 3.222%, 8/15/2024	$	1,047,000	$ 1,008,143
Imperial Brands Finance PLC, 6.125%, 7/27/2027 (n)		305,000	303,525
Philip Morris International, Inc., 5.125%, 11/15/2024		800,000	801,058
Philip Morris International, Inc., 5%, 11/17/2025		364,000	365,635
Philip Morris International, Inc., 5.125%, 11/17/2027		324,000	326,366
			$2,804,727
Transportation - Services – 1.4%
Element Fleet Management Corp., 1.6%, 4/06/2024 (n)	$	2,849,000	$ 2,698,909
ERAC USA Finance LLC, 2.7%, 11/01/2023 (n)		872,000	853,819
ERAC USA Finance LLC, 3.85%, 11/15/2024 (n)		551,000	532,378
ERAC USA Finance LLC, 3.8%, 11/01/2025 (n)		551,000	526,874
			$4,611,980
U.S. Treasury Obligations – 17.4%
U.S. Treasury Notes, 0.125%, 12/15/2023 (f)	$	24,482,000	$ 23,452,035
U.S. Treasury Notes, 0.75%, 11/15/2024		11,578,000	10,806,435
U.S. Treasury Notes, 2.75%, 5/15/2025		7,016,000	6,765,507
U.S. Treasury Notes, 2.25%, 11/15/2025		17,716,000	16,767,917
			$57,791,894
Utilities - Electric Power – 4.8%
Edison International, 4.7%, 8/15/2025	$	750,000	$ 733,841
Emera US Finance LP, 0.833%, 6/15/2024		589,000	549,638
Enel Finance International N.V., 6.8%, 10/14/2025 (n)		630,000	646,902
ENGIE Energía Chile S.A., 4.5%, 1/29/2025 (n)		2,071,000	2,029,580
Entergy Louisiana LLC, 0.95%, 10/01/2024		2,993,000	2,786,007
FirstEnergy Corp., 2.05%, 3/01/2025		929,000	857,657
FirstEnergy Corp., 1.6%, 1/15/2026		513,000	452,722
NextEra Energy Capital Holdings, Inc., 0.65%, 3/01/2023		1,049,000	1,041,817
Pacific Gas & Electric Co., 1.7%, 11/15/2023		443,000	428,744
Pacific Gas & Electric Co., 3.25%, 2/16/2024		1,338,000	1,305,958
Pacific Gas & Electric Co., 4.95%, 6/08/2025		550,000	541,510
Southern California Edison Co., 0.7%, 8/01/2023		900,000	876,730
Southern California Edison Co., 0.975%, 8/01/2024		667,000	623,725
Vistra Operations Co. LLC, 4.875%, 5/13/2024 (n)		952,000	932,817

Table of Contents

MFS Limited Maturity Portfolio

Portfolio of Investments – continued

Issuer		Shares/Par	Value ($)
Bonds – continued
Utilities - Electric Power – continued
WEC Energy Group, Inc., 0.8%, 3/15/2024	$	612,000	$ 579,802
Xcel Energy, Inc., 0.5%, 10/15/2023		1,753,000	1,689,379
			$16,076,829
Total Bonds (Identified Cost, $341,625,631)			$325,357,825
Investment Companies (h) – 1.4%
Money Market Funds – 1.4%
MFS Institutional Money Market Portfolio, 4.02% (v) (Identified Cost, $4,749,451)		4,749,783	$ 4,751,208
Other Assets, Less Liabilities – 0.6%			1,880,822
Net Assets – 100.0%			$331,989,855

(f)	All or a portion of the security has been segregated as collateral for open futures contracts and cleared swap agreements.
(h)	An affiliated issuer, which may be considered one in which the fund owns 5% or more of the outstanding voting securities, or a company which is under common control. At period end, the aggregate values of the fund's investments in affiliated issuers and in unaffiliated issuers were $4,751,208 and $325,357,825, respectively.
(i)	Interest only security for which the fund receives interest on notional principal (Par amount). Par amount shown is the notional principal and does not reflect the cost of the security.
(n)	Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be sold in the ordinary course of business in transactions exempt from registration, normally to qualified institutional buyers. At period end, the aggregate value of these securities was $116,170,012, representing 35.0% of net assets.
(v)	Affiliated issuer that is available only to investment companies managed by MFS. The rate quoted for the MFS Institutional Money Market Portfolio is the annualized seven-day yield of the fund at period end.

The following abbreviations are used in this report and are defined:
AGM	Assured Guaranty Municipal
BAM	Build America Mutual
CLO	Collateralized Loan Obligation
CMT	Constant Maturity Treasury
FLR	Floating Rate. Interest rate resets periodically based on the parenthetically disclosed reference rate plus a spread (if any). The period-end rate reported may not be the current rate. All reference rates are USD unless otherwise noted.
LIBOR	London Interbank Offered Rate
REIT	Real Estate Investment Trust
SOFR	Secured Overnight Financing Rate

Derivative Contracts at 12/31/22
Futures Contracts
Description	Long/ Short	Currency	Contracts	Notional Amount	Expiration Date	Value/Unrealized Appreciation (Depreciation)
Asset Derivatives
Interest Rate Futures
U.S. Treasury Note 2 yr	Long	USD	61	$12,509,766	March – 2023	$9,032

Cleared Swap Agreements
Maturity Date		Notional Amount	Counterparty	Cash Flows to Receive/ Frequency	Cash Flows to Pay/ Frequency	Unrealized Appreciation (Depreciation)	Net Unamortized Upfront Payments (Receipts)	Value
Asset Derivatives
Interest Rate Swaps
10/17/25	USD	8,400,000	centrally cleared	4.2% / Annually	SOFR - 1 day / Annually	$22,737	$—	$22,737

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MFS Limited Maturity Portfolio

Portfolio of Investments – continued

Maturity Date		Notional Amount	Counterparty	Cash Flows to Receive/ Frequency	Cash Flows to Pay/ Frequency	Unrealized Appreciation (Depreciation)	Net Unamortized Upfront Payments (Receipts)	Value
Liability Derivatives
Interest Rate Swaps
12/06/25	USD	28,500,000	centrally cleared	3.82% / Annually	SOFR - 1 day / Annually	$(230,344)	$4,207	$(226,137)
Credit Default Swaps
12/20/27	USD	33,200,000	centrally cleared	(1)	1% / Quarterly	$(117,207)	$(158,467)	$(275,674)
						$(347,551)	$(154,260)	$(501,811)

(1) Fund, as protection buyer, to receive notional amount upon a defined credit event by a reference obligation specified in the Markit CDX North America High Yield Series 39 Index.

At December 31, 2022, the fund had liquid securities with an aggregate value of $1,397,619 to cover any collateral or margin obligations for certain derivative contracts.

See Notes to Financial Statements

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MFS Limited Maturity Portfolio

Financial Statements

Statement of Assets and Liabilities

This statement represents your fund’s balance sheet, which details the assets and liabilities comprising the total value of the fund.

At 12/31/22 Assets
Investments in unaffiliated issuers, at value (identified cost, $341,625,631)	$325,357,825
Investments in affiliated issuers, at value (identified cost, $4,749,451)	4,751,208
Cash	8,080
Receivables for
Fund shares sold	1,305
Interest	2,199,261
Other assets	2,285
Total assets	$332,319,964
Liabilities
Payables for
Net daily variation margin on open cleared swap agreements	$47,625
Net daily variation margin on open futures contracts	9,509
Fund shares reacquired	149,653
Payable to affiliates
Investment adviser	10,582
Administrative services fee	464
Shareholder servicing costs	21
Distribution and/or service fees	1,769
Accrued expenses and other liabilities	110,486
Total liabilities	$330,109
Net assets	$331,989,855
Net assets consist of
Paid-in capital	$348,348,403
Total distributable earnings (loss)	(16,358,548)
Net assets	$331,989,855
Shares of beneficial interest outstanding	34,803,493

	Net assets	Shares outstanding	Net asset value per share
Initial Class	$246,102,110	25,801,206	$9.54
Service Class	85,887,745	9,002,287	9.54

See Notes to Financial Statements

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MFS Limited Maturity Portfolio

Financial Statements

Statement of Operations

This statement describes how much your fund earned in investment income and accrued in expenses. It also describes any gains and/or losses generated by fund operations.

Year ended 12/31/22
Net investment income (loss)
Income
Interest	$6,151,516
Dividends from affiliated issuers	113,432
Other	98,247
Total investment income	$6,363,195
Expenses
Management fee	$1,471,973
Distribution and/or service fees	236,101
Shareholder servicing costs	5,331
Administrative services fee	66,311
Independent Trustees' compensation	7,220
Custodian fee	25,955
Shareholder communications	5,839
Audit and tax fees	71,979
Legal fees	1,647
Miscellaneous	41,257
Total expenses	$1,933,613
Reduction of expenses by investment adviser	(51,156)
Net expenses	$1,882,457
Net investment income (loss)	$4,480,738
Realized and unrealized gain (loss)
Realized gain (loss) (identified cost basis)
Unaffiliated issuers	$(2,466,318)
Affiliated issuers	675
Futures contracts	(1,022,632)
Swap agreements	(734,126)
Net realized gain (loss)	$(4,222,401)
Change in unrealized appreciation or depreciation
Unaffiliated issuers	$(17,531,039)
Affiliated issuers	1,757
Futures contracts	16,530
Swap agreements	(324,814)
Net unrealized gain (loss)	$(17,837,566)
Net realized and unrealized gain (loss)	$(22,059,967)
Change in net assets from operations	$(17,579,229)

See Notes to Financial Statements

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MFS Limited Maturity Portfolio

Financial Statements

Statements of Changes in Net Assets

These statements describe the increases and/or decreases in net assets resulting from operations, any distributions, and any shareholder transactions.

	Year ended
	12/31/22	12/31/21
Change in net assets
From operations
Net investment income (loss)	$4,480,738	$6,078,008
Net realized gain (loss)	(4,222,401)	2,567,548
Net unrealized gain (loss)	(17,837,566)	(8,459,336)
Change in net assets from operations	$(17,579,229)	$186,220
Total distributions to shareholders	$(8,206,419)	$(10,447,490)
Change in net assets from fund share transactions	$(67,494,849)	$(3,392,860)
Total change in net assets	$(93,280,497)	$(13,654,130)
Net assets
At beginning of period	425,270,352	438,924,482
At end of period	$331,989,855	$425,270,352

See Notes to Financial Statements

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MFS Limited Maturity Portfolio

Financial Statements

Financial Highlights

Initial Class	Year ended
	12/31/22	12/31/21	12/31/20	12/31/19	12/31/18
Net asset value, beginning of period	$10.21	$10.45	$10.34	$10.10	$10.18
Income (loss) from investment operations
Net investment income (loss) (d)	$0.13	$0.15	$0.23	$0.29	$0.23
Net realized and unrealized gain (loss)	(0.56)	(0.13)	0.21	0.23	(0.10)
Total from investment operations	$(0.43)	$0.02	$0.44	$0.52	$0.13
Less distributions declared to shareholders
From net investment income	$(0.20)	$(0.24)	$(0.33)	$(0.28)	$(0.21)
From net realized gain	(0.04)	(0.02)	—	—	—
Total distributions declared to shareholders	$(0.24)	$(0.26)	$(0.33)	$(0.28)	$(0.21)
Net asset value, end of period (x)	$9.54	$10.21	$10.45	$10.34	$10.10
Total return (%) (k)(r)(s)(x)	(4.24)	0.16	4.34	5.19	1.28
Ratios (%) (to average net assets) and Supplemental data:
Expenses before expense reductions	0.46	0.46	0.46	0.45	0.45
Expenses after expense reductions	0.45	0.44	0.45	0.44	0.44
Net investment income (loss)	1.28	1.45	2.18	2.81	2.31
Portfolio turnover	25	50	51	39	62
Net assets at end of period (000 omitted)	$246,102	$318,803	$326,075	$343,507	$359,909

Service Class	Year ended
	12/31/22	12/31/21	12/31/20	12/31/19	12/31/18
Net asset value, beginning of period	$10.20	$10.45	$10.33	$10.09	$10.17
Income (loss) from investment operations
Net investment income (loss) (d)	$0.10	$0.13	$0.20	$0.26	$0.21
Net realized and unrealized gain (loss)	(0.55)	(0.15)	0.23	0.23	(0.11)
Total from investment operations	$(0.45)	$(0.02)	$0.43	$0.49	$0.10
Less distributions declared to shareholders
From net investment income	$(0.17)	$(0.21)	$(0.31)	$(0.25)	$(0.18)
From net realized gain	(0.04)	(0.02)	—	—	—
Total distributions declared to shareholders	$(0.21)	$(0.23)	$(0.31)	$(0.25)	$(0.18)
Net asset value, end of period (x)	$9.54	$10.20	$10.45	$10.33	$10.09
Total return (%) (k)(r)(s)(x)	(4.44)	(0.19)	4.15	4.90	0.99
Ratios (%) (to average net assets) and Supplemental data:
Expenses before expense reductions	0.71	0.71	0.71	0.70	0.70
Expenses after expense reductions	0.70	0.69	0.70	0.69	0.69
Net investment income (loss)	1.04	1.20	1.93	2.56	2.06
Portfolio turnover	25	50	51	39	62
Net assets at end of period (000 omitted)	$85,888	$106,468	$112,850	$117,362	$117,798

See Notes to Financial Statements

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MFS Limited Maturity Portfolio

Financial Highlights - continued

(d)	Per share data is based on average shares outstanding.
(k)	The total return does not reflect expenses that apply to separate accounts. Inclusion of these charges would reduce the total return figures for all periods shown.
(r)	Certain expenses have been reduced without which performance would have been lower.
(s)	From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
(x)	The net asset values and total returns have been calculated on net assets which include adjustments made in accordance with U.S. generally accepted accounting principles required at period end for financial reporting purposes.

See Notes to Financial Statements

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MFS Limited Maturity Portfolio

Notes to Financial Statements

(1) Business and Organization

MFS Limited Maturity Portfolio (the fund) is a diversified series of MFS Variable Insurance Trust III (the trust). The trust is organized as a Delaware statutory 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, and qualified retirement and pension plans.

(2) Significant Accounting Policies

Under the fund's valuation policy and procedures, debt instruments and floating rate loans, including restricted debt instruments, are generally valued at an evaluated or composite bid as provided by a third-party pricing service. Short-term instruments with a maturity at issuance of 60 days or less may be valued at amortized cost, which approximates market value. Futures contracts are generally valued at last posted settlement price on their primary exchange as provided by a third-party pricing service. Futures contracts for which there were no trades that day for a particular position are generally valued at the closing bid quotation on their primary exchange as provided by a third-party pricing service. Swap agreements are generally valued using valuations provided by a third-party pricing service, which for cleared swaps includes an evaluation of any trading activity at the clearinghouses. Open-end investment companies are generally valued at net asset value per share. The values of foreign securities and other assets and liabilities expressed in foreign currencies are converted to U.S. dollars using the mean of bid and asked prices for rates provided by a third-party pricing service.

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MFS Limited Maturity Portfolio

Notes to Financial Statements - continued

Various inputs are used in determining the value of the fund's assets or liabilities. These inputs are categorized into three broad levels. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fund's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment. Level 1 includes unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 includes other significant observable market-based inputs (including quoted prices for similar securities, interest rates, prepayment speed, and credit risk). Level 3 includes significant unobservable inputs, which may include the adviser's own assumptions in determining the fair value of investments. Other financial instruments are derivative instruments, such as futures contracts and swap agreements. The following is a summary of the levels used as of December 31, 2022 in valuing the fund's assets and liabilities:

Financial Instruments	Level 1	Level 2	Level 3	Total
U.S. Treasury Bonds & U.S. Government Agencies & Equivalents	$—	$57,791,894	$—	$57,791,894
Non - U.S. Sovereign Debt	—	3,353,635	—	3,353,635
Municipal Bonds	—	9,213,598	—	9,213,598
U.S. Corporate Bonds	—	114,221,972	—	114,221,972
Residential Mortgage-Backed Securities	—	3,456,008	—	3,456,008
Commercial Mortgage-Backed Securities	—	23,260,428	—	23,260,428
Asset-Backed Securities (including CDOs)	—	44,566,666	—	44,566,666
Foreign Bonds	—	69,493,624	—	69,493,624
Mutual Funds	4,751,208	—	—	4,751,208
Total	$4,751,208	$325,357,825	$—	$330,109,033

Other Financial Instruments
Futures Contracts – Assets	$9,032	$—	$—	$9,032
Swap Agreements – Assets	—	22,737	—	22,737
Swap Agreements – Liabilities	—	(501,811)	—	(501,811)

For further information regarding security characteristics, see the Portfolio of Investments.

The derivative instruments used by the fund during the period were futures contracts and swap agreements. Depending on the type of derivative, a fund may exit a derivative position by entering into an offsetting transaction with a counterparty or exchange, negotiating an agreement with the derivative counterparty, or novating the position to a third party. The fund may be unable to promptly close out a futures position in instances where the daily fluctuation in the price for that type of future exceeds the daily limit set by the exchange. The fund's period end derivatives, as presented in the Portfolio of Investments and the associated Derivative Contract tables, generally are indicative of the volume of its derivative activity during the period.

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MFS Limited Maturity Portfolio

Notes to Financial Statements - continued

		Fair Value (a)
Risk	Derivative Contracts	Asset Derivatives	Liability Derivatives
Interest Rate	Futures Contracts	$9,032	$—
Credit	Cleared Swap Agreements	—	(275,674)
Interest Rate	Cleared Swap Agreements	22,737	(226,137)
Total		$31,769	$(501,811)

(a) Values presented in this table for futures contracts and cleared swap agreements correspond to the values reported in the Portfolio of Investments. Only the current day net variation margin for futures contracts and cleared swap agreements is reported separately within the Statement of Assets and Liabilities.

Risk	Futures Contracts	Swap Agreements
Interest Rate	$(1,022,632)	$(673,259)
Credit	—	(60,867)
Total	$(1,022,632)	$(734,126)

Risk	Futures Contracts	Swap Agreements
Interest Rate	$16,530	$(207,607)
Credit	—	(117,207)
Total	$16,530	$(324,814)

Collateral and margin requirements differ by type of derivative. For cleared derivatives (e.g., futures contracts, cleared swaps, and exchange-traded options), margin requirements are set by the clearing broker and the clearing house and collateral, in the form of cash or securities, is posted by the fund directly with the clearing broker. Collateral terms are counterparty agreement specific for uncleared derivatives (e.g., forward foreign currency exchange contracts, uncleared swap agreements, and uncleared options) and collateral, in the form of cash and securities, is held in segregated accounts with the fund's custodian in connection with these agreements. For derivatives traded under an ISDA Master Agreement, which contains a credit support annex, the collateral requirements are netted across all transactions traded under such counterparty-specific agreement and an amount is posted from one party to the other to collateralize such obligations. Cash that has been segregated or delivered to cover the fund's collateral or margin obligations under derivative contracts, if any, will be reported separately in the Statement of Assets and Liabilities as restricted cash for uncleared derivatives and/or deposits with brokers for cleared derivatives. Securities pledged as collateral or margin for the same purpose, if any, are noted in the Portfolio of Investments. The fund may be required to make payments of interest on uncovered collateral or margin obligations with the broker. Any such payments are included in “Miscellaneous” expense in the Statement of Operations.

Futures Contracts — The fund entered into futures contracts which may be used to hedge against or obtain broad market exposure, interest rate exposure, currency exposure, or to manage duration. A futures contract represents a commitment for the future purchase or sale of an asset at a specified price on a specified date.

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MFS Limited Maturity Portfolio

Notes to Financial Statements - continued

The fund bears the risk of interest rates, exchange rates or securities prices moving unexpectedly, in which case, the fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. While futures contracts may present less counterparty risk to the fund since the contracts are exchange traded and the exchange’s clearinghouse guarantees payments to the broker, there is still counterparty credit risk due to the insolvency of the broker. The fund’s maximum risk of loss due to counterparty credit risk is equal to the margin posted by the fund to the broker plus any gains or minus any losses on the outstanding futures contracts.

Swap Agreements — The fund entered into swap agreements which generally involve a periodic exchange of cash payments on a net basis, at specified intervals or upon the occurrence of specified events, between the fund and a counterparty. Certain swap agreements may be entered into as a bilateral contract (“uncleared swaps”) while others are required to be centrally cleared (“cleared swaps”).

Both cleared and uncleared swap agreements are marked to market daily. The value of uncleared swap agreements is reported in the Statement of Assets and Liabilities as “Uncleared swaps, at value” which includes any related interest accruals to be paid or received by the fund. For cleared swaps, payments (variation margin) are made or received by the fund each day, depending on the daily fluctuations in the value of the cleared swap, such that only the current day net receivable or payable for variation margin is reported in the Statement of Assets and Liabilities.

For both cleared and uncleared swaps, premiums paid or received at the inception of the agreements are amortized over the term of the agreement as realized gain or loss on swap agreements in the Statement of Operations. The periodic exchange of net cash payments, as well as any liquidation payment received or made upon early termination, are recorded as a realized gain or loss on swap agreements in the Statement of Operations. The change in unrealized appreciation or depreciation on swap agreements in the Statement of Operations reflects the aggregate change over the reporting period in the value of swaps net of any unamortized premiums paid or received.

Risks related to swap agreements include the possible lack of a liquid market, unfavorable market and interest rate movements of the underlying instrument and the failure of the counterparty to perform under the terms of the agreements. The fund's maximum risk of loss from counterparty credit risk is the discounted net value of the cash flows to be received from/paid to the counterparty over the contract's remaining life, to the extent that the amount is positive. To address counterparty risk, uncleared swap agreements are limited to only highly-rated counterparties. Risk is further reduced by having an ISDA Master Agreement (“ISDA”) between the fund and the counterparty and, where applicable, by the posting of collateral by the counterparty to the fund to cover the fund’s exposure to the counterparty under such ISDA. The fund's counterparty risk due to cleared swaps is mitigated by the fact that the clearinghouse is the true counterparty to the transaction and the regulatory requirement safeguards in the event of a clearing broker bankruptcy.

The fund entered into interest rate swap agreements in order to manage its exposure to interest rate fluctuations. Interest rate swap agreements involve the periodic exchange of cash flows, between the fund and a counterparty, based on the difference between two interest rates applied to a notional principal amount. The two interest rates exchanged may either be a fixed rate and a floating rate or two floating rates based on different indices.

The fund entered into credit default swap agreements in order to manage its exposure to the market or certain sectors of the market, to reduce its credit risk exposure to defaults of corporate and sovereign issuers or to create exposure to corporate or sovereign issuers to which it is not otherwise exposed. A credit default swap’s reference obligation may be either a single security or a basket of securities issued by corporate or sovereign issuers. At the inception of the agreement, the protection buyer may make an upfront payment to or receive an upfront payment from the protection seller. Over the term of the agreement, the protection buyer will make a series of periodic payments to the protection seller based on a fixed percentage applied to the agreement’s notional amount in exchange for a promise from the protection seller to make a specific payment should a defined credit event occur with respect to the reference obligation. Although agreement-specific, credit events generally consist of a combination of the following: bankruptcy, failure to pay, restructuring, obligation acceleration, obligation default, or repudiation/moratorium. If a defined credit event occurs, the protection buyer will either (i) receive from the protection seller an amount equal to the agreement’s notional amount and deliver the reference obligation (i.e., physical settlement) or (ii) receive from the protection seller a net settlement of cash equal to the agreement’s notional amount less the recovery value of the reference obligation. Upon determination of the final price for the reference obligation (or upon delivery of the reference obligation in the case of physical settlement), the difference between the recovery value of the reference obligation and the agreement’s notional amount is recorded as realized gain or loss on swap agreements in the Statement of Operations.

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MFS Limited Maturity Portfolio

Notes to Financial Statements - continued

Credit default swap agreements are considered to have credit-risk-related contingent features since they trigger payment by the protection seller to the protection buyer upon the occurrence of a defined credit event. The maximum amount of future, undiscounted payments that the fund, as protection seller, could be required to make is equal to the swap agreement’s notional amount. The protection seller’s payment obligation would be offset to the extent of the value of the agreement’s deliverable obligation. At December 31, 2022, the fund did not hold any credit default swap agreements at an unrealized loss where it is the protection seller. The fund’s maximum risk of loss from counterparty risk, either as the protection seller or as the protection buyer, is the fair value of the agreement.

The fund invests a significant portion of its assets in asset-backed and/or mortgage-backed securities. For these securities, the value of the debt instrument also depends on the credit quality and adequacy of the underlying assets or collateral as well as whether there is a security interest in the underlying assets or collateral. Enforcing rights, if any, against the underlying assets or collateral may be difficult. U.S. Government securities not supported as to the payment of principal or interest by the U.S. Treasury, such as those issued by Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, are subject to greater credit risk than are U.S. Government securities supported by the U.S. Treasury, such as those issued by Ginnie Mae.

The fund may purchase or sell mortgage-backed securities on a “To Be Announced” (TBA) basis. A TBA transaction is subject to extended settlement and typically does not designate the actual security to be delivered, but instead includes an approximate principal amount. The price of the TBA security and the date that it will be settled are fixed at the time the transaction is negotiated. The value of the security varies with market fluctuations and no interest accrues to the fund until settlement takes place. TBA purchase and sale commitments are held at carrying amount, which approximates fair value and are categorized as level 2 within the fair value hierarchy. Losses may arise as a result of changes in the value of the TBA investment prior to settlement date or due to counterparty non-performance.

To mitigate the counterparty credit risk on TBA transactions, mortgage dollar rolls, and other types of forward settling mortgage-backed and asset-backed security transactions, the fund whenever possible enters into a Master Securities Forward Transaction Agreement (“MSFTA”) on a bilateral basis with each of the counterparties with whom it undertakes a significant volume of transactions. The MSFTA gives each party to the agreement the right to terminate all transactions traded under such agreement if there is a specified deterioration in the credit quality of the other party. Upon an event of default or a termination of the MSFTA, the non-defaulting party has the right to close out all transactions traded under such agreement and to net amounts owed under each transaction to one net amount payable by one party to the other. This right to close out and net payments across all transactions traded under the MSFTA could result in a reduction of the fund's credit risk to such counterparty equal to any amounts payable by the fund under the applicable transactions, if any.

For mortgage-backed and asset-backed securities traded under a MSFTA, the collateral and margining requirements are contract specific. Collateral amounts across all transactions traded under such agreement are netted and an amount is posted from one party to the other to collateralize such obligations. Cash that has been pledged to cover the fund's collateral or margin obligations under a MSFTA, if any, will be reported separately on the Statement of Assets and Liabilities as restricted cash. Securities pledged as collateral or margin for the same purpose, if any, are noted in the Portfolio of Investments.

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MFS Limited Maturity Portfolio

Notes to Financial Statements - continued

have been accrued by the fund in the accompanying financial statements in accordance with the applicable foreign tax law. Foreign income taxes may be withheld by certain countries in which the fund invests. Additionally, capital gains realized by the fund on securities issued in or by certain foreign countries may be subject to capital gains tax imposed by those countries.

Book/tax differences primarily relate to derivative transactions.

The tax character of distributions declared to shareholders for the last two fiscal years is as follows:

	Year ended 12/31/22	Year ended 12/31/21
Ordinary income (including any short-term capital gains)	$6,821,233	$9,619,310
Long-term capital gains	1,385,186	828,180
Total distributions	$8,206,419	$10,447,490

The federal tax cost and the tax basis components of distributable earnings were as follows:

As of 12/31/22
Cost of investments	$346,663,504
Gross appreciation	582,436
Gross depreciation	(17,606,949)
Net unrealized appreciation (depreciation)	$(17,024,513)
Undistributed ordinary income	4,849,958
Capital loss carryforwards	(4,183,993)
Total distributable earnings (loss)	$(16,358,548)

Short-Term	$(1,561,053)
Long-Term	(2,622,940)
Total	$(4,183,993)

	Year ended 12/31/22	Year ended 12/31/21
Initial Class	$6,307,773	$8,028,886
Service Class	1,898,646	2,418,604
Total	$8,206,419	$10,447,490

(3) Transactions with Affiliates

Investment Adviser — The fund has an investment advisory agreement with MFS to provide overall investment management and related administrative services and facilities to the fund. The management fee is computed daily and paid monthly at an annual rate of 0.40% of the fund’s average daily net assets.

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MFS Limited Maturity Portfolio

Notes to Financial Statements - continued

MFS has agreed in writing to reduce its management fee by a specified amount if certain MFS mutual fund assets exceed thresholds agreed to by MFS and the fund's Board of Trustees. Effective March 1, 2022, MFS has also agreed in writing to waive at least 0.01% of its management fee as part of this agreement. The agreement to waive at least 0.01% of the management fee will continue until modified by the fund's Board of Trustees, but such agreement will continue at least until April 30, 2024. For the year ended December 31, 2022, this management fee reduction amounted to $51,156, which is included in the reduction of total expenses in the Statement of Operations. The management fee incurred for the year ended December 31, 2022 was equivalent to an annual effective rate of 0.39% of the fund's average daily net assets.

Shareholder Servicing Agent — MFS Service Center, Inc. (MFSC), a wholly-owned subsidiary of MFS, receives a fee from the fund for its services as shareholder servicing agent. For the year ended December 31, 2022, the fee was $5,107, which equated to 0.0014% annually of the fund's average daily net assets. MFSC also receives reimbursement from the fund for out-of-pocket expenses paid by MFSC on behalf of the fund. For the year ended December 31, 2022, these costs amounted to $224.

Administrator — MFS provides certain financial, legal, shareholder communications, compliance, and other administrative services to the fund. Under an administrative services agreement, the fund reimburses MFS the costs incurred to provide these services. The fund is charged an annual fixed amount of $17,500 plus a fee based on average daily net assets. The administrative services fee incurred for the year ended December 31, 2022 was equivalent to an annual effective rate of 0.0180% of the fund's average daily net assets.

(4) Portfolio Securities

For the year ended December 31, 2022, purchases and sales of investments, other than short-term obligations, were as follows:

	Purchases	Sales
U.S. Government securities	$34,410,029	$59,916,737
Non-U.S. Government securities	55,186,827	98,868,272

(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. Transactions in fund shares were as follows:

	Year ended 12/31/22		Year ended 12/31/21
	Shares	Amount	Shares	Amount
Shares sold
Initial Class	465,902	$4,498,291	2,725,133	$28,404,219
Service Class	361,690	3,524,643	1,005,181	10,464,064
	827,592	$8,022,934	3,730,314	$38,868,283

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MFS Limited Maturity Portfolio

Notes to Financial Statements - continued

	Year ended 12/31/22		Year ended 12/31/21
	Shares	Amount	Shares	Amount
Shares issued to shareholders in reinvestment of distributions
Initial Class	658,431	$6,307,773	783,306	$8,028,886
Service Class	197,982	1,898,646	235,731	2,418,604
	856,413	$8,206,419	1,019,037	$10,447,490
Shares reacquired
Initial Class	(6,557,737)	$(64,285,836)	(3,467,630)	$(36,020,828)
Service Class	(1,992,084)	(19,438,366)	(1,605,376)	(16,687,805)
	(8,549,821)	$(83,724,202)	(5,073,006)	$(52,708,633)
Net change
Initial Class	(5,433,404)	$(53,479,772)	40,809	$412,277
Service Class	(1,432,412)	(14,015,077)	(364,464)	(3,805,137)
	(6,865,816)	$(67,494,849)	(323,655)	$(3,392,860)

The fund is one of several mutual funds in which certain MFS funds may invest. The MFS funds do not invest in the underlying funds for the purpose of exercising management or control. At the end of the period, the MFS Moderate Allocation Portfolio, the MFS Conservative Allocation Portfolio, and the MFS Growth Allocation Portfolio were the owners of record of approximately 12%, 11%, and 2%, respectively, of the value of outstanding voting shares of the fund.

(6) Line of Credit

The fund and certain other funds managed by MFS participate in a $1.45 billion unsecured committed line of credit of which $1.2 billion is reserved for use by the fund and certain other MFS U.S. funds. The line of credit is provided by a syndicate of banks under a credit agreement. Borrowings may be made for temporary financing needs. Interest is charged to each fund, based on its borrowings, generally at a rate equal to the highest of 1) Daily Simple SOFR (Secured Overnight Financing Rate) plus 0.10%, 2) the Federal Funds Effective Rate, or 3) the Overnight Bank Funding Rate, each plus an agreed upon spread. A commitment fee, based on the average daily unused portion of the committed line of credit, is allocated among the participating funds. The line of credit expires on March 16, 2023 unless extended or renewed. In addition, the fund and other funds managed by MFS have established unsecured uncommitted borrowing arrangements with certain banks for temporary financing needs. Interest is charged to each fund, based on its borrowings, at rates equal to customary reference rates plus an agreed upon spread. For the year ended December 31, 2022, the fund’s commitment fee and interest expense were $1,825 and $0, respectively, and are included in “Miscellaneous” expense in the Statement of Operations.

(7) Investments in Affiliated Issuers

Affiliated Issuers	Beginning Value	Purchases	Sales Proceeds	Realized Gain (Loss)	Change in Unrealized Appreciation or Depreciation	Ending Value
MFS Institutional Money Market Portfolio	$4,686,372	$85,055,726	$84,993,322	$675	$1,757	$4,751,208

Affiliated Issuers	Dividend Income	Capital Gain Distributions
MFS Institutional Money Market Portfolio	$113,432	$—

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MFS Limited Maturity Portfolio

Notes to Financial Statements - continued

(8) LIBOR Transition

(9) Russia and Ukraine Conflict

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MFS Limited Maturity Portfolio

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of MFS Variable Insurance Trust III and the Shareholders of MFS Limited Maturity Portfolio:

Opinion on the Financial Statements and Financial Highlights

We have audited the accompanying statement of assets and liabilities of MFS Limited Maturity Portfolio (the “Fund”), including the portfolio of investments, as of December 31, 2022, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of December 31, 2022, and 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 five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of December 31, 2022, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

DELOITTE & TOUCHE LLP

Boston, Massachusetts
February 15, 2023

We have served as the auditor of one or more of the MFS investment companies since 1924.

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MFS Limited Maturity Portfolio

Trustees and Officers — Identification and Background

Name, Age	Position(s) Held with Fund	Trustee/Officer Since^(h)	Number of MFS Funds overseen by the Trustee	Principal Occupations During the Past Five Years	Other Directorships During the Past Five Years ^(j)
INTERESTED TRUSTEE
Michael W. Roberge ^(k) (age 56)	Trustee	January 2021	136	Massachusetts Financial Services Company, Chairman (since January 2021); Chief Executive Officer (since January 2017); Director; Chairman of the Board (since January 2022); President (until December 2018); Chief Investment Officer (until December 2018)	N/A
INDEPENDENT TRUSTEES
John P. Kavanaugh (age 68)	Trustee and Chair of Trustees	January 2009	136	Private investor	N/A
Steven E. Buller (age 71)	Trustee	February 2014	136	Private investor	N/A
John A. Caroselli (age 68)	Trustee	March 2017	136	Private investor; JC Global Advisors, LLC (management consulting), President (since 2015)	N/A
Maureen R. Goldfarb (age 67)	Trustee	January 2009	136	Private investor	N/A
Peter D. Jones (age 67)	Trustee	January 2019	136	Private investor	N/A
James W. Kilman, Jr. (age 61)	Trustee	January 2019	136	Burford Capital Limited (finance and investment management), Senior Advisor (since May 3, 2021), Chief Financial Officer (2019 - May 2, 2021); KielStrand Capital LLC (family office), Chief Executive Officer (since 2016)	Alpha-En Corporation, Director (2016-2019)
Clarence Otis, Jr. (age 66)	Trustee	March 2017	136	Private investor	VF Corporation, Director; Verizon Communications, Inc., Director; The Travelers Companies, Director
Maryanne L. Roepke (age 66)	Trustee	May 2014	136	Private investor	N/A
Laurie J. Thomsen (age 65)	Trustee	March 2005	136	Private investor	The Travelers Companies, Director; Dycom Industries, Inc., Director

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MFS Limited Maturity Portfolio

Trustees and Officers - continued

Name, Age	Position(s) Held with Fund	Trustee/Officer Since^(h)	Number of MFS Funds for which the Person is an Officer	Principal Occupations During the Past Five Years
OFFICERS
Christopher R. Bohane ^(k) (age 49)	Assistant Secretary and Assistant Clerk	July 2005	136	Massachusetts Financial Services Company, Senior Vice President and Senior Managing Counsel
Kino Clark ^(k) (age 54)	Assistant Treasurer	January 2012	136	Massachusetts Financial Services Company, Vice President
John W. Clark, Jr. ^(k) (age 55)	Assistant Treasurer	April 2017	136	Massachusetts Financial Services Company, Vice President
David L. DiLorenzo ^(k) (age 54)	President	July 2005	136	Massachusetts Financial Services Company, Senior Vice President
Heidi W. Hardin ^(k) (age 55)	Secretary and Clerk	April 2017	136	Massachusetts Financial Services Company, Executive Vice President and General Counsel
Brian E. Langenfeld ^(k) (age 49)	Assistant Secretary and Assistant Clerk	June 2006	136	Massachusetts Financial Services Company, Vice President and Managing Counsel
Rosa E. Licea-Mailloux ^(k) (age 46)	Chief Compliance Officer	March 2022	136	Massachusetts Financial Services Company, Vice President (since 2018); Director of Corporate Compliance (2018-2021), Senior Director Compliance (2021-2022), Senior Managing Director of North American Compliance & Chief Compliance Officer (since March 2022); Natixis Investment Managers (investment management), Funds Chief Compliance Officer, Deputy General Counsel & Senior Vice President (until 2018)
Amanda S. Mooradian ^(k) (age 43)	Assistant Secretary and Assistant Clerk	September 2018	136	Massachusetts Financial Services Company, Assistant Vice President and Senior Counsel
Susan A. Pereira ^(k) (age 52)	Assistant Secretary and Assistant Clerk	July 2005	136	Massachusetts Financial Services Company, Vice President and Managing Counsel
Kasey L. Phillips ^(k) (age 52)	Assistant Treasurer	September 2012	136	Massachusetts Financial Services Company, Vice President
Matthew A. Stowe ^(k) (age 48)	Assistant Secretary and Assistant Clerk	October 2014	136	Massachusetts Financial Services Company, Vice President and Senior Managing Counsel
William B. Wilson ^(k) (age 40)	Assistant Secretary and Assistant Clerk	October 2022	136	Massachusetts Financial Services Company, Assistant Vice President and Counsel
James O. Yost ^(k) (age 62)	Treasurer	September 1990	136	Massachusetts Financial Services Company, Senior Vice President

(h)	Date first appointed to serve as Trustee/Officer of an MFS Fund. Each Trustee has served continuously since appointment unless indicated otherwise. From January 2012 through December 2016, Messrs. DiLorenzo and Yost served as Treasurer and Deputy Treasurer of the Funds, respectively.

(j)	Directorships or trusteeships of companies required to report to the Securities and Exchange Commission (i.e., “public companies”).

(k)

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MFS Limited Maturity Portfolio

Trustees and Officers - continued

Messrs. Buller, Kilman and Otis and Ms. Roepke are members of the Trust’s Audit Committee.

Each of the Interested Trustees and certain Officers hold comparable officer positions with certain affiliates of MFS.

The Statement of Additional Information for a Fund includes further information about the Trustees and is available without charge upon request by calling 1-800-225-2606.

Investment Adviser	Custodian
Massachusetts Financial Services Company 111 Huntington Avenue Boston, MA 02199-7618	State Street Bank and Trust Company 1 Lincoln Street Boston, MA 02111-2900

Distributor	Independent Registered Public Accounting Firm
MFS Fund Distributors, Inc. 111 Huntington Avenue Boston, MA 02199-7618	Deloitte & Touche LLP 200 Berkeley Street Boston, MA 02116

Portfolio Manager(s)
Philipp Burgener Alexander Mackey

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MFS Limited Maturity Portfolio

Board Review of Investment Advisory Agreement

MFS Limited Maturity Portfolio

In connection with their contract review meetings, the Trustees received and relied upon materials that included, among other items: (i) information provided by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent third party, on the investment performance of the Fund for various time periods ended December 31, 2021 and the investment performance of a group of funds with substantially similar investment classifications/objectives (the “Broadridge performance universe”), (ii) information provided by Broadridge on the Fund’s advisory fees and other expenses and the advisory fees and other expenses of comparable funds identified by Broadridge as well as all other funds in the same investment classification/category (the “Broadridge expense group and universe”), (iii) information provided by MFS on the advisory fees of portfolios of other clients of MFS, including institutional separate accounts and other clients, (iv) information as to whether and to what extent applicable expense waivers, reimbursements or fee “breakpoints” are observed for the Fund, (v) information regarding MFS’ financial results and financial condition, including MFS’ and certain of its affiliates’ estimated profitability from services performed for the Fund and the MFS Funds as a whole, and compared to MFS’ institutional business, (vi) MFS’ views regarding the outlook for the mutual fund industry and the strategic business plans of MFS, (vii) descriptions of various functions performed by MFS for the Funds, such as compliance monitoring and portfolio trading practices, and (viii) information regarding the overall organization of MFS, including information about MFS’ senior management and other personnel providing investment advisory, administrative and other services to the Fund and the other MFS Funds. The comparative performance, fee and expense information prepared and provided by Broadridge was not independently verified and the independent Trustees did not independently verify any information provided to them by MFS.

Based on information provided by Broadridge and MFS, the Trustees reviewed the Fund’s total return investment performance as well as the Broadridge performance universe over various time periods. The Trustees placed particular emphasis on the total return performance of the Fund’s Initial Class shares in comparison to the performance of funds in its Broadridge performance universe over the five-year period ended December 31, 2021, which the Trustees believed was a long enough period to reflect differing market conditions. The total return performance of the Fund’s Initial Class shares was in the 1st quintile relative to the other funds in the universe for this five-year period (the 1st quintile being the best performers and the 5th quintile being the worst performers). The total return performance of the Fund’s Initial Class shares was in the 2nd quintile for each of the one- and three-year periods ended December 31, 2021 relative to the Broadridge performance universe. Because of the passage of time, these performance results may differ from the performance results for more recent periods, including those shown elsewhere in this report.

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MFS Limited Maturity Portfolio

Board Review of Investment Advisory Agreement - continued

In assessing the reasonableness of the Fund’s advisory fee, the Trustees considered, among other information, the Fund’s advisory fee and the total expense ratio of the Fund’s Initial Class shares as a percentage of average daily net assets and the advisory fee and total expense ratios of the Broadridge expense group based on information provided by Broadridge. The Trustees considered that, according to the data provided by Broadridge (which takes into account any fee reductions or expense limitations that were in effect during the Fund’s last fiscal year), the Fund’s effective advisory fee rate and total expense ratio were each approximately at the Broadridge expense group median.

The Trustees also considered whether the Fund may benefit from any economies of scale in the management of the Fund in the event of growth in assets of the Fund and/or growth in assets of the MFS Funds as a whole. They noted that the Fund’s advisory fee rate schedule is not subject to any breakpoints. Taking into account that the Fund’s effective advisory fee rate was approximately at the Broadridge expense group median described above, the Trustees determined not to recommend any advisory fee breakpoints for the Fund at this time. The Trustees also noted that MFS has agreed in writing to waive a portion of the management fees of certain MFS Funds, including the Fund, if the total combined assets of certain funds within the MFS Funds’ complex increase above agreed upon thresholds (the “group fee waiver”), enabling the Fund’s shareholders to share in the benefits from any economies of scale at the complex level. The group fee waiver is reviewed and renewed annually between the Board and MFS. The Trustees concluded that the group fee waiver was sufficient to allow the Fund to benefit from economies of scale as its assets and overall complex assets grow.

The Trustees also considered the nature, quality, cost, and extent of administrative, transfer agency, and distribution services provided to the Fund by MFS and its affiliates under agreements and plans other than the investment advisory agreement, including any 12b-1 fees the Fund pays to MFS Fund Distributors, Inc., an affiliate of MFS. The Trustees also considered the nature, extent and quality of certain other services MFS performs or arranges for on the Fund’s behalf, which may include securities lending programs, directed expense payment programs, class action recovery programs, and MFS’ interaction with third-party service providers, principally custodians and sub-custodians. The Trustees concluded that the various non-advisory services provided by MFS and its affiliates on behalf of the Fund were satisfactory.

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MFS Limited Maturity Portfolio

Proxy Voting Policies and Information

Quarterly Portfolio Disclosure

FURTHER INFORMATION

Information About Fund Contracts and Legal Claims

Federal Tax Information (unaudited)

The following information is provided pursuant to provisions of the Internal Revenue Code.

The fund designates $1,524,000 as capital gain dividends paid during the fiscal year.

The fund intends to pass through the maximum amount allowable as Section 163(j) Interest Dividends as defined in Treasury Regulation §1.163(j)-1(b).

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rev. 3/16

FACTS

WHAT DOES MFS DO WITH YOUR PERSONAL INFORMATION?

Why?

What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include:
	• Social Security number and account balances
	• Account transactions and transaction history
	• Checking account information and wire transfer instructions
	When you are no longer our customer, we continue to share your information as described in this notice.

How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MFS chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MFS share?	Can you limit this sharing?
For our everyday business purposes – such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes – to offer our products and services to you	No	We don't share
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes – information about your transactions and experiences	No	We don't share
For our affiliates' everyday business purposes – information about your creditworthiness	No	We don't share
For nonaffiliates to market to you	No	We don't share

Questions?

Call 800-225-2606 or go to mfs.com.

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Page 2

Who we are
Who is providing this notice?	MFS Funds, MFS Investment Management, MFS Institutional Advisors, Inc., and MFS Heritage Trust Company.

What we do
How does MFS protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include procedural, electronic, and physical safeguards for the protection of the personal information we collect about you.
How does MFS collect my personal information?	We collect your personal information, for example, when you
	• open an account or provide account information
	• direct us to buy securities or direct us to sell your securities
	• make a wire transfer
	We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only
	• sharing for affiliates' everyday business purposes – information about your creditworthiness
	• affiliates from using your information to market to you
	• sharing for nonaffiliates to market to you
	State laws and individual companies may give you additional rights to limit sharing.

Definitions
Affiliates	Companies related by common ownership or control. They can be financial and nonfinancial companies.
	• MFS does not share personal information with affiliates, except for everyday business purposes as described on page one of this notice.
Nonaffiliates	Companies not related by common ownership or control. They can be financial and nonfinancial companies.
	• MFS does not share with nonaffiliates so they can market to you.
Joint marketing	A formal agreement between nonaffiliated financial companies that together market financial products or services to you.
	• MFS doesn't jointly market.

Other important information

If you own an MFS product or receive an MFS service in the name of a third party such as a bank or broker-dealer, their privacy policy may apply to you instead of ours.

Table of Contents

Annual Report

December 31, 2022

MFS^® Mid Cap Value Portfolio

MFS^® Variable Insurance Trust III

VMC-ANN

MFS^® Mid Cap Value Portfolio

CONTENTS

The 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.

NOT FDIC INSURED • MAY LOSE VALUE • NO BANK OR CREDIT UNION GUARANTEE •

NOT A DEPOSIT • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY OR NCUA/NCUSIF

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MFS Mid Cap Value Portfolio

LETTER FROM THE CHAIR AND CEO

Dear Shareholders:

During times of market transition, it is important to have a deep understanding of company fundamentals, and we have built our unique global research platform to do just that.

Respectfully,

Michael W. Roberge

Chair and Chief Executive Officer

MFS Investment Management

February 15, 2023

The opinions expressed in this letter are subject to change and may not be relied upon for investment advice. No forecasts can be guaranteed.

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MFS Mid Cap Value Portfolio

Portfolio Composition

Portfolio structure

Top ten holdings

PG&E Corp.	1.5%
Hartford Financial Services Group, Inc.	1.4%
Johnson Controls International PLC	1.3%
KBR, Inc.	1.3%
LKQ Corp.	1.3%
Hess Corp.	1.2%
Eaton Corp. PLC	1.2%
Arthur J. Gallagher & Co.	1.1%
AES Corp.	1.1%
Raymond James Financial, Inc.	1.1%

GICS equity sectors (g)

Financials	19.1%
Industrials	16.7%
Consumer Discretionary	10.7%
Materials	9.5%
Information Technology	8.3%
Utilities	8.2%
Health Care	7.4%
Energy	7.3%
Real Estate	6.8%
Consumer Staples	4.4%
Communication Services	1.0%

(g)

Percentages are based on net assets as of December 31, 2022.

The portfolio is actively managed and current holdings may be different.

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MFS Mid Cap Value Portfolio

Management Review

Summary of Results

For the twelve months ended December 31, 2022, Initial Class shares of the MFS Mid Cap Value Portfolio (fund) provided a total return of -8.79%, while Service Class shares of the fund provided a total return of -9.00%. These compare with a return of -12.03% over the same period for the fund’s benchmark, the Russell Midcap^® Value Index.

Market Environment

Contributors to Performance

The combination of favorable stock selection and underweight positions in both the information technology and real estate sectors contributed to the fund’s performance relative to the Russell Midcap^® Value Index. There were no individual stocks within either sector, either in the fund or in the benchmark, that were among the fund's largest relative contributors for the reporting period.

Elsewhere, the fund's overweight positions in global integrated energy company Hess, utility company PG&E, oil and gas producer Devon Energy, independent oil and gas exploration and production company Pioneer Natural Resources, engineering, procurement, and construction company KBR, oil and natural gas exploration and development firm Diamondback Energy, reinsurer Everest Reinsurance and integrated electric power company AES aided relative performance. The stock price of Hess climbed during the reporting period as the company posted strong production volumes at its Bakken and Guyana oil and gas fields amid elevated energy commodity prices. The timing of the fund’s ownership in shares of natural gas services provider Targa Resources further supported relative returns.

The fund’s cash and/or cash equivalents position during the period was also a contributor to relative performance. Under normal market conditions, the fund strives to be fully invested and generally holds cash to buy new holdings and to provide liquidity. In a period when equity markets fell, as measured by the fund’s benchmark, holding cash helped performance versus the benchmark, which has no cash position.

Detractors from Performance

Stock selection within the health care sector detracted from the fund’s relative performance, led by the fund’s holdings of clinical research provider ICON(b) (Ireland). Stocks in other sectors that held back relative results included the timing of the fund’s ownership in shares of automatic identification and data capture products manufacturer Zebra Technologies. The stock price of Zebra Technologies came under pressure due to the challenging macroeconomic backdrop and lingering supply chain constraints across print and mobile computing. Additionally, margin growth was revised downward over elevated costs and foreign exchange headwinds. Not owning shares of strong-performing oil and gas exploration and production company Occidental Petroleum, fuel storage and transportation firm Phillips 66 and independent petroleum products company Marathon Petroleum also detracted from relative performance. The fund’s overweight positions in power and hand tools manufacturer Stanley Black & Decker, banking and financial services company SVB Financial Group, commercial banking service provider Signature Bank, cable company Liberty

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MFS Mid Cap Value Portfolio

Management Review - continued

Broadband and self-storage real estate investment trust Life Storage further weakened relative returns. The stock price of Stanley Black & Decker declined as the company reported earnings results below consensus estimates, driven by weaker tools and storage margins. The company also lowered its revenue guidance for the remainder of the year due to weaker-than-expected consumer demand in its tools & outdoor segment.

Respectfully,

Portfolio Manager(s)

Richard Offen, Kevin Schmitz, and Brooks Taylor

(b)	Security is not a benchmark constituent.

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MFS Mid Cap Value Portfolio

Performance Summary Through 12/31/22

Growth of a Hypothetical $10,000 Investment

Total Returns through 12/31/22

Average annual total returns

Share Class	Class Inception Date	1-yr	5-yr	10-yr
Initial Class	3/07/08	(8.79)%	7.58%	10.86%
Service Class	3/07/08	(9.00)%	7.32%	10.59%

Comparative benchmark(s)

Russell Midcap^® Value Index (f)

(12.03)%

5.72%

10.11%

(f)	Source: FactSet Research Systems Inc.

Benchmark Definition(s)

Russell Midcap^® Value Index^(h) - constructed to provide a comprehensive barometer for value securities in the mid-cap segment of the U.S. equity universe. Companies in this index generally have lower price-to-book ratios and lower forecasted growth values.

It is not possible to invest directly in an index.

(h)

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MFS Mid Cap Value Portfolio

Performance Summary – continued

Notes to Performance Summary

Average annual total return represents the average annual change in value for each share class for the periods presented.

From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.

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MFS Mid Cap Value Portfolio

Expense Table

Fund expenses borne by the shareholders during the period,
July 1, 2022 through December 31, 2022

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2022 through December 31, 2022.

Actual Expenses

Hypothetical Example for Comparison Purposes

Share Class		Annualized Expense Ratio	Beginning Account Value 7/01/22	Ending Account Value 12/31/22	Expenses Paid During Period (p) 7/01/22-12/31/22
Initial Class	Actual	0.79%	$1,000.00	$1,067.06	$4.12
Initial Class	Hypothetical (h)	0.79%	$1,000.00	$1,021.22	$4.02
Service Class	Actual	1.04%	$1,000.00	$1,065.66	$5.41
Service Class	Hypothetical (h)	1.04%	$1,000.00	$1,019.96	$5.30

(h)	5% class return per year before expenses.

(p)	“Expenses Paid During Period” are equal to each class's annualized expense ratio, as shown above, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

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MFS Mid Cap Value Portfolio

Portfolio of Investments − 12/31/22

The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.

Issuer	Shares/Par	Value ($)
Common Stocks – 99.0%
Aerospace & Defense – 3.9%
Howmet Aerospace, Inc.	100,911	$ 3,976,902
KBR, Inc.	109,712	5,792,794
L3Harris Technologies, Inc.	14,825	3,086,713
Leidos Holdings, Inc.	42,648	4,486,143
		$17,342,552
Airlines – 0.8%
Alaska Air Group, Inc. (a)	36,761	$ 1,578,518
Delta Air Lines, Inc. (a)	65,477	2,151,574
		$3,730,092
Apparel Manufacturers – 1.3%
PVH Corp.	35,603	$ 2,513,216
Skechers USA, Inc., “A” (a)	77,456	3,249,279
		$5,762,495
Automotive – 2.2%
Aptiv PLC (a)	21,368	$ 1,990,002
Lear Corp.	19,455	2,412,809
LKQ Corp.	105,329	5,625,622
		$10,028,433
Brokerage & Asset Managers – 3.0%
Cboe Global Markets, Inc.	23,225	$ 2,914,041
Evercore Partners, Inc.	20,349	2,219,669
Invesco Ltd.	96,344	1,733,229
Raymond James Financial, Inc.	45,614	4,873,856
TPG, Inc.	57,109	1,589,343
		$13,330,138
Business Services – 1.5%
Amdocs Ltd.	42,868	$ 3,896,701
Global Payments, Inc.	26,765	2,658,300
		$6,555,001
Chemicals – 0.9%
Eastman Chemical Co.	49,107	$ 3,999,274
Computer Software – 1.2%
Black Knight, Inc. (a)	29,626	$ 1,829,405
Check Point Software Technologies Ltd. (a)	13,112	1,654,210
Dun & Bradstreet Holdings, Inc.	134,822	1,652,918
		$5,136,533
Computer Software - Systems – 1.3%
Seagate Technology Holdings PLC	28,742	$ 1,512,117
Verint Systems, Inc. (a)	32,783	1,189,367
Zebra Technologies Corp., “A” (a)	11,209	2,874,100
		$5,575,584

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MFS Mid Cap Value Portfolio

Portfolio of Investments – continued

Issuer	Shares/Par	Value ($)
Common Stocks – continued
Construction – 4.0%
Essex Property Trust, Inc., REIT	9,440	$ 2,000,525
Fortune Brands Innovations, Inc.	32,500	1,856,075
Masco Corp.	59,769	2,789,419
Mid-America Apartment Communities, Inc., REIT	11,936	1,873,833
Stanley Black & Decker, Inc.	29,391	2,207,852
Toll Brothers, Inc.	84,107	4,198,621
Vulcan Materials Co.	15,892	2,782,848
		$17,709,173
Consumer Products – 1.2%
International Flavors & Fragrances, Inc.	31,895	$ 3,343,872
Newell Brands, Inc.	159,639	2,088,078
		$5,431,950
Containers – 2.7%
Avery Dennison Corp.	13,773	$ 2,492,913
Crown Holdings, Inc.	30,299	2,490,881
Graphic Packaging Holding Co.	173,925	3,869,831
WestRock Co.	95,950	3,373,602
		$12,227,227
Electrical Equipment – 3.2%
Berry Global, Inc.	56,129	$ 3,391,875
Johnson Controls International PLC	90,552	5,795,328
Sensata Technologies Holding PLC	63,078	2,547,090
TE Connectivity Ltd.	24,004	2,755,659
		$14,489,952
Electronics – 3.4%
Corning, Inc.	86,444	$ 2,761,021
Flex Ltd. (a)	136,997	2,939,956
Marvell Technology, Inc.	72,051	2,668,769
NXP Semiconductors N.V.	22,261	3,517,906
ON Semiconductor Corp. (a)	51,194	3,192,970
		$15,080,622
Energy - Independent – 5.3%
Chesapeake Energy Corp.	26,307	$ 2,482,591
Devon Energy Corp.	65,263	4,014,327
Diamondback Energy, Inc.	27,139	3,712,072
Hess Corp.	38,491	5,458,794
Pioneer Natural Resources Co.	20,566	4,697,069
Valero Energy Corp.	26,581	3,372,066
		$23,736,919
Energy - Renewables – 1.1%
AES Corp.	172,747	$ 4,968,204
Engineering - Construction – 0.6%
Quanta Services, Inc.	18,306	$ 2,608,605
Food & Beverages – 2.9%
Coca-Cola Europacific Partners PLC	51,458	$ 2,846,657
Ingredion, Inc.	44,574	4,365,132
J.M. Smucker Co.	20,368	3,227,513

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MFS Mid Cap Value Portfolio

Portfolio of Investments – continued

Issuer	Shares/Par	Value ($)
Common Stocks – continued
Food & Beverages – continued
Kellogg Co.	38,000	$ 2,707,120
		$13,146,422
Food & Drug Stores – 0.6%
Albertsons Cos., Inc., “A”	118,422	$ 2,456,072
Gaming & Lodging – 1.2%
Hyatt Hotels Corp. (a)	22,833	$ 2,065,245
International Game Technology PLC	140,885	3,195,272
		$5,260,517
General Merchandise – 0.7%
Dollar Tree, Inc. (a)	22,425	$ 3,171,792
Insurance – 8.9%
American International Group, Inc.	57,301	$ 3,623,715
Arthur J. Gallagher & Co.	26,450	4,986,883
Assurant, Inc.	32,911	4,115,850
Cincinnati Financial Corp.	19,447	1,991,178
Equitable Holdings, Inc.	150,169	4,309,850
Everest Re Group Ltd.	14,199	4,703,703
Hanover Insurance Group, Inc.	13,136	1,775,068
Hartford Financial Services Group, Inc.	85,343	6,471,560
Voya Financial, Inc.	53,488	3,288,977
Willis Towers Watson PLC	17,960	4,392,657
		$39,659,441
Leisure & Toys – 1.8%
Brunswick Corp.	45,572	$ 3,284,830
Electronic Arts, Inc.	19,343	2,363,328
Mattel, Inc. (a)	136,268	2,431,021
		$8,079,179
Machinery & Tools – 5.1%
Eaton Corp. PLC	33,795	$ 5,304,125
Ingersoll Rand, Inc.	57,042	2,980,445
ITT, Inc.	31,931	2,589,604
PACCAR, Inc.	36,988	3,660,702
Regal Rexnord Corp.	30,504	3,659,870
Wabtec Corp.	44,905	4,481,968
		$22,676,714
Major Banks – 1.1%
Comerica, Inc.	37,356	$ 2,497,248
State Street Corp.	31,126	2,414,444
		$4,911,692
Medical & Health Technology & Services – 3.3%
AmerisourceBergen Corp.	27,600	$ 4,573,596
ICON PLC (a)	13,465	2,615,576
Laboratory Corp. of America Holdings	12,985	3,057,708
Syneos Health, Inc. (a)	23,050	845,474
Universal Health Services, Inc.	26,057	3,671,171
		$14,763,525

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MFS Mid Cap Value Portfolio

Portfolio of Investments – continued

Issuer	Shares/Par	Value ($)
Common Stocks – continued
Medical Equipment – 3.6%
Agilent Technologies, Inc.	19,023	$ 2,846,792
Dentsply Sirona, Inc.	72,886	2,320,690
Hologic, Inc. (a)	29,027	2,171,510
Maravai Lifesciences Holdings, Inc., “A” (a)	49,607	709,876
PerkinElmer, Inc.	23,038	3,230,388
Teleflex, Inc.	6,060	1,512,758
Zimmer Biomet Holdings, Inc.	27,410	3,494,775
		$16,286,789
Natural Gas - Distribution – 0.4%
Atmos Energy Corp.	16,034	$ 1,796,930
Natural Gas - Pipeline – 1.3%
Plains GP Holdings LP	199,135	$ 2,477,239
Targa Resources Corp.	45,742	3,362,037
		$5,839,276
Network & Telecom – 0.8%
Motorola Solutions, Inc.	13,689	$ 3,527,792
Oil Services – 0.6%
Halliburton Co.	72,867	$ 2,867,316
Other Banks & Diversified Financials – 6.2%
Discover Financial Services	19,337	$ 1,891,739
East West Bancorp, Inc.	32,054	2,112,359
Element Fleet Management Corp. (l)	47,515	647,453
M&T Bank Corp.	21,798	3,162,018
Northern Trust Corp.	30,952	2,738,943
Prosperity Bancshares, Inc.	34,475	2,505,643
Signature Bank	15,097	1,739,476
SLM Corp.	221,347	3,674,360
SVB Financial Group (a)	12,059	2,775,258
Umpqua Holdings Corp.	171,773	3,066,148
Zions Bancorp NA	67,187	3,302,913
		$27,616,310
Pharmaceuticals – 0.4%
Organon & Co.	70,524	$ 1,969,735
Pollution Control – 1.0%
GFL Environmental, Inc.	73,378	$ 2,144,839
Republic Services, Inc.	18,159	2,342,329
		$4,487,168
Real Estate – 5.9%
Brixmor Property Group, Inc., REIT	135,800	$ 3,078,586
Host Hotels & Resorts, Inc., REIT	149,999	2,407,484
Jones Lang LaSalle, Inc. (a)	13,818	2,202,175
Life Storage, Inc., REIT	39,581	3,898,729
Spirit Realty Capital, Inc., REIT	49,382	1,971,823
STAG Industrial, Inc., REIT	59,522	1,923,156
Sun Communities, Inc., REIT	22,897	3,274,271
VICI Properties, Inc., REIT	143,731	4,656,884

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MFS Mid Cap Value Portfolio

Portfolio of Investments – continued

Issuer	Shares/Par	Value ($)
Common Stocks – continued
Real Estate – continued
W.P. Carey, Inc., REIT	39,027	$ 3,049,960
		$26,463,068
Restaurants – 2.2%
Aramark	88,730	$ 3,668,098
Performance Food Group Co. (a)	39,266	2,292,742
Wendy's Co.	162,416	3,675,474
		$9,636,314
Specialty Chemicals – 3.7%
Ashland, Inc.	29,023	$ 3,120,843
Axalta Coating Systems Ltd. (a)	121,356	3,090,937
Celanese Corp.	23,120	2,363,789
Corteva, Inc.	67,651	3,976,526
DuPont de Nemours, Inc.	60,623	4,160,557
		$16,712,652
Specialty Stores – 1.4%
Builders FirstSource, Inc. (a)	26,440	$ 1,715,427
Ross Stores, Inc.	25,363	2,943,884
Urban Outfitters, Inc. (a)	62,187	1,483,160
		$6,142,471
Telecommunications - Wireless – 0.5%
Liberty Broadband Corp. (a)	28,275	$ 2,156,534
Trucking – 1.1%
Knight-Swift Transportation Holdings, Inc.	46,017	$ 2,411,751
RXO, Inc. (a)	40,517	696,892
XPO Logistics, Inc. (a)	57,398	1,910,780
		$5,019,423
Utilities - Electric Power – 6.7%
CenterPoint Energy, Inc.	102,831	$ 3,083,902
CMS Energy Corp.	58,583	3,710,061
Edison International	37,762	2,402,418
Eversource Energy	38,209	3,203,443
PG&E Corp. (a)	409,267	6,654,681
Pinnacle West Capital Corp.	44,303	3,368,800
Public Service Enterprise Group, Inc.	66,029	4,045,597
Sempra Energy	23,652	3,655,180
		$30,124,082
Total Common Stocks (Identified Cost, $319,926,381)		$442,483,968
Preferred Stocks – 0.4%
Consumer Products – 0.4%
Henkel AG & Co. KGaA (Identified Cost, $2,333,068)	26,550	$ 1,847,896
Investment Companies (h) – 0.6%
Money Market Funds – 0.6%
MFS Institutional Money Market Portfolio, 4.02% (v) (Identified Cost, $2,632,814)	2,632,546	$ 2,633,336

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MFS Mid Cap Value Portfolio

Portfolio of Investments – continued

Issuer	Shares/Par	Value ($)
Collateral for Securities Loaned – 0.1%
State Street Navigator Securities Lending Government Money Market Portfolio, 4.33% (j) (Identified Cost, $134,876)	134,876	$ 134,876
Other Assets, Less Liabilities – (0.1)%		(270,840)
Net Assets – 100.0%		$446,829,236

(a)	Non-income producing security.
(h)	An affiliated issuer, which may be considered one in which the fund owns 5% or more of the outstanding voting securities, or a company which is under common control. At period end, the aggregate values of the fund's investments in affiliated issuers and in unaffiliated issuers were $2,633,336 and $444,466,740, respectively.
(j)	The rate quoted is the annualized seven-day yield of the fund at period end.
(l)	A portion of this security is on loan. See Note 2 for additional information.
(v)	Affiliated issuer that is available only to investment companies managed by MFS. The rate quoted for the MFS Institutional Money Market Portfolio is the annualized seven-day yield of the fund at period end.

The following abbreviations are used in this report and are defined:
REIT	Real Estate Investment Trust

See Notes to Financial Statements

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MFS Mid Cap Value Portfolio

Financial Statements

Statement of Assets and Liabilities

This statement represents your fund’s balance sheet, which details the assets and liabilities comprising the total value of the fund.

At 12/31/22 Assets
Investments in unaffiliated issuers, at value, including $128,130 of securities on loan (identified cost, $322,394,325)	$444,466,740
Investments in affiliated issuers, at value (identified cost, $2,632,814)	2,633,336
Receivables for
Investments sold	64,220
Fund shares sold	637,318
Dividends	1,744,115
Other assets	3,608
Total assets	$449,549,337
Liabilities
Payables for
Fund shares reacquired	$2,486,249
Collateral for securities loaned, at value	134,876
Payable to affiliates
Investment adviser	27,154
Administrative services fee	595
Shareholder servicing costs	77
Distribution and/or service fees	4,103
Accrued expenses and other liabilities	67,047
Total liabilities	$2,720,101
Net assets	$446,829,236
Net assets consist of
Paid-in capital	$305,552,971
Total distributable earnings (loss)	141,276,265
Net assets	$446,829,236
Shares of beneficial interest outstanding	48,928,876

	Net assets	Shares outstanding	Net asset value per share
Initial Class	$246,813,314	26,852,274	$9.19
Service Class	200,015,922	22,076,602	9.06

See Notes to Financial Statements

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MFS Mid Cap Value Portfolio

Financial Statements

Statement of Operations

This statement describes how much your fund earned in investment income and accrued in expenses. It also describes any gains and/or losses generated by fund operations.

Year ended 12/31/22
Net investment income (loss)
Income
Dividends	$11,326,605
Dividends from affiliated issuers	116,898
Other	17,839
Income on securities loaned	164
Foreign taxes withheld	(27,529)
Total investment income	$11,433,977
Expenses
Management fee	$3,808,871
Distribution and/or service fees	557,011
Shareholder servicing costs	21,622
Administrative services fee	87,967
Independent Trustees' compensation	8,903
Custodian fee	22,957
Shareholder communications	8,326
Audit and tax fees	61,413
Legal fees	2,424
Miscellaneous	33,987
Total expenses	$4,613,481
Reduction of expenses by investment adviser	(70,570)
Net expenses	$4,542,911
Net investment income (loss)	$6,891,066
Realized and unrealized gain (loss)
Realized gain (loss) (identified cost basis)
Unaffiliated issuers	$15,132,220
Affiliated issuers	1,101
Foreign currency	(1,885)
Net realized gain (loss)	$15,131,436
Change in unrealized appreciation or depreciation
Unaffiliated issuers	$(70,816,954)
Affiliated issuers	522
Translation of assets and liabilities in foreign currencies	(445)
Net unrealized gain (loss)	$(70,816,877)
Net realized and unrealized gain (loss)	$(55,685,441)
Change in net assets from operations	$(48,794,375)

See Notes to Financial Statements

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MFS Mid Cap Value Portfolio

Financial Statements

Statements of Changes in Net Assets

These statements describe the increases and/or decreases in net assets resulting from operations, any distributions, and any shareholder transactions.

	Year ended
	12/31/22	12/31/21
Change in net assets
From operations
Net investment income (loss)	$6,891,066	$4,272,910
Net realized gain (loss)	15,131,436	42,522,241
Net unrealized gain (loss)	(70,816,877)	79,620,961
Change in net assets from operations	$(48,794,375)	$126,416,112
Total distributions to shareholders	$(47,086,062)	$(7,068,768)
Change in net assets from fund share transactions	$(1,713,064)	$11,028,583
Total change in net assets	$(97,593,501)	$130,375,927
Net assets
At beginning of period	544,422,737	414,046,810
At end of period	$446,829,236	$544,422,737

See Notes to Financial Statements

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MFS Mid Cap Value Portfolio

Financial Statements

Financial Highlights

Initial Class	Year ended
	12/31/22	12/31/21	12/31/20	12/31/19	12/31/18
Net asset value, beginning of period	$11.09	$8.59	$8.74	$7.42	$9.01
Income (loss) from investment operations
Net investment income (loss) (d)	$0.14	$0.10	$0.09	$0.11	$0.10
Net realized and unrealized gain (loss)	(1.10)	2.55	0.19	2.09	(1.03)
Total from investment operations	$(0.96)	$2.65	$0.28	$2.20	$(0.93)
Less distributions declared to shareholders
From net investment income	$(0.10)	$(0.08)	$(0.10)	$(0.12)	$(0.08)
From net realized gain	(0.84)	(0.07)	(0.33)	(0.76)	(0.58)
Total distributions declared to shareholders	$(0.94)	$(0.15)	$(0.43)	$(0.88)	$(0.66)
Net asset value, end of period (x)	$9.19	$11.09	$8.59	$8.74	$7.42
Total return (%) (k)(r)(s)(x)	(8.79)	30.99	3.87	31.12	(11.45)
Ratios (%) (to average net assets) and Supplemental data:
Expenses before expense reductions	0.80	0.80	0.81	0.81	0.81
Expenses after expense reductions	0.79	0.79	0.80	0.80	0.80
Net investment income (loss)	1.45	0.97	1.22	1.31	1.13
Portfolio turnover	21	26	35	30	32
Net assets at end of period (000 omitted)	$246,813	$316,524	$271,131	$261,832	$210,218

Service Class	Year ended
	12/31/22	12/31/21	12/31/20	12/31/19	12/31/18
Net asset value, beginning of period	$10.95	$8.50	$8.65	$7.35	$8.93
Income (loss) from investment operations
Net investment income (loss) (d)	$0.12	$0.07	$0.08	$0.09	$0.08
Net realized and unrealized gain (loss)	(1.09)	2.52	0.18	2.06	(1.02)
Total from investment operations	$(0.97)	$2.59	$0.26	$2.15	$(0.94)
Less distributions declared to shareholders
From net investment income	$(0.08)	$(0.07)	$(0.08)	$(0.09)	$(0.06)
From net realized gain	(0.84)	(0.07)	(0.33)	(0.76)	(0.58)
Total distributions declared to shareholders	$(0.92)	$(0.14)	$(0.41)	$(0.85)	$(0.64)
Net asset value, end of period (x)	$9.06	$10.95	$8.50	$8.65	$7.35
Total return (%) (k)(r)(s)(x)	(9.00)	30.60	3.67	30.71	(11.61)
Ratios (%) (to average net assets) and Supplemental data:
Expenses before expense reductions	1.05	1.05	1.06	1.06	1.06
Expenses after expense reductions	1.04	1.04	1.05	1.05	1.05
Net investment income (loss)	1.24	0.74	1.01	1.06	0.86
Portfolio turnover	21	26	35	30	32
Net assets at end of period (000 omitted)	$200,016	$227,898	$142,916	$74,018	$55,837

See Notes to Financial Statements

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MFS Mid Cap Value Portfolio

Financial Highlights - continued

(d)	Per share data is based on average shares outstanding.
(k)	The total return does not reflect expenses that apply to separate accounts. Inclusion of these charges would reduce the total return figures for all periods shown.
(r)	Certain expenses have been reduced without which performance would have been lower.
(s)	From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
(x)	The net asset values and total returns have been calculated on net assets which include adjustments made in accordance with U.S. generally accepted accounting principles required at period end for financial reporting purposes.

See Notes to Financial Statements

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MFS Mid Cap Value Portfolio

Notes to Financial Statements

(1) Business and Organization

MFS Mid Cap Value Portfolio (the fund) is a diversified series of MFS Variable Insurance Trust III (the trust). The trust is organized as a Delaware statutory 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, and qualified retirement and pension plans.

(2) Significant Accounting Policies

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MFS Mid Cap Value Portfolio

Notes to Financial Statements - continued

market data) to assist in determining whether to fair value and at what value to fair value an investment. The value of an investment for purposes of calculating the fund’s net asset value can differ depending on the source and method used to determine value. When fair valuation is used, the value of an investment used to determine the fund’s net asset value may differ from quoted or published prices for the same investment. There can be no assurance that the fund could obtain the fair value assigned to an investment if it were to sell the investment at the same time at which the fund determines its net asset value per share.

Financial Instruments	Level 1	Level 2	Level 3	Total
Equity Securities	$444,331,864	$—	$—	$444,331,864
Mutual Funds	2,768,212	—	—	2,768,212
Total	$447,100,076	$—	$—	$447,100,076

For further information regarding security characteristics, see the Portfolio of Investments.

Security Loans — Under its Securities Lending Agency Agreement with the fund, State Street Bank and Trust Company, as lending agent, loans the securities of the fund to certain qualified institutions (the “Borrowers”) approved by the fund. Security loans can be terminated at the discretion of either the lending agent or the fund and the related securities must be returned within the earlier of the standard trade settlement period for such securities or within three business days. The loans are collateralized by cash and/or U.S. Treasury and federal agency obligations in an amount typically at least equal to the market value of the securities loaned. On loans collateralized by cash, the cash collateral is invested in a money market fund. The market value of the loaned securities is determined at the close of business of the fund and any additional required collateral is delivered to the fund on the next business day. The lending agent provides the fund with indemnification against Borrower default. In the event of Borrower default, the lending agent will, for the benefit of the fund, either purchase securities identical to those loaned or, when such purchase is commercially impracticable, pay the fund the market value of the loaned securities. In return, the lending agent assumes the fund's rights to the related collateral. If the collateral value is less than the cost to purchase identical securities, the lending agent is responsible for the shortfall, but only to the extent that such shortfall is not due to a decline in collateral value resulting from collateral reinvestment for which the fund bears the risk of loss. At period end, the fund had investment securities on loan, all of which were classified as equity securities in the fund's Portfolio of Investments, with a fair value of $128,130. The fair value of the fund's investment securities on loan and a related liability of $134,876 for cash collateral received on securities loaned are both presented gross in the Statement of Assets and Liabilities. The collateral on securities loaned exceeded the value of securities on loan at period end. The liability for cash collateral for securities loaned is carried at fair value, which is categorized as level 2 within the fair value hierarchy. 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 agent. On loans collateralized by U.S. Treasury and/or federal agency obligations, a fee is received from the Borrower, and is allocated between the fund and the lending agent. Income from securities lending is separately reported in 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.

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MFS Mid Cap Value Portfolio

Notes to Financial Statements - continued

Book/tax differences primarily relate to passive foreign investment companies and wash sale loss deferrals.

The tax character of distributions declared to shareholders for the last two fiscal years is as follows:

	Year ended 12/31/22	Year ended 12/31/21
Ordinary income (including any short-term capital gains)	$11,924,635	$5,697,623
Long-term capital gains	35,161,427	1,371,145
Total distributions	$47,086,062	$7,068,768

The federal tax cost and the tax basis components of distributable earnings were as follows:

As of 12/31/22
Cost of investments	$328,886,401
Gross appreciation	135,619,826
Gross depreciation	(17,406,151)
Net unrealized appreciation (depreciation)	$118,213,675
Undistributed ordinary income	7,597,753
Undistributed long-term capital gain	15,465,226
Other temporary differences	(389)
Total distributable earnings (loss)	$141,276,265

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MFS Mid Cap Value Portfolio

Notes to Financial Statements - continued

	Year ended 12/31/22	Year ended 12/31/21
Initial Class	$26,193,294	$4,276,275
Service Class	20,892,768	2,792,493
Total	$47,086,062	$7,068,768

(3) Transactions with Affiliates

Investment Adviser — The fund has an investment advisory agreement with MFS to provide overall investment management and related administrative services and facilities to the fund. The management fee is computed daily and paid monthly at the following annual rates based on the fund's average daily net assets:

Up to $1 billion	0.75%
In excess of $1 billion	0.70%

MFS has agreed in writing to reduce its management fee by a specified amount if certain MFS mutual fund assets exceed thresholds agreed to by MFS and the fund's Board of Trustees. Effective March 1, 2022, MFS has also agreed in writing to waive at least 0.01% of its management fee as part of this agreement. The agreement to waive at least 0.01% of the management fee will continue until modified by the fund's Board of Trustees, but such agreement will continue at least until April 30, 2024. For the year ended December 31, 2022, this management fee reduction amounted to $70,570, which is included in the reduction of total expenses in the Statement of Operations. The management fee incurred for the year ended December 31, 2022 was equivalent to an annual effective rate of 0.74% of the fund's average daily net assets.

The investment adviser has agreed in writing to pay a portion of the fund’s total annual operating expenses, excluding interest, taxes, extraordinary expenses, brokerage and transaction costs, certain tax reclaim recovery expenses (including contingency fees and closing agreement expenses), and investment-related expenses, such that total annual operating expenses do not exceed 0.92% of average daily net assets for the Initial Class shares and 1.17% of average daily net assets for the Service Class shares. This written agreement will continue until modified by the fund’s Board of Trustees, but such agreement will continue at least until April 30, 2024. For the year ended December 31, 2022, the fund’s actual operating expenses did not exceed the limit and therefore, the investment adviser did not pay any portion of the fund’s expenses related to this agreement.

Shareholder Servicing Agent — MFS Service Center, Inc. (MFSC), a wholly-owned subsidiary of MFS, receives a fee from the fund for its services as shareholder servicing agent. For the year ended December 31, 2022, the fee was $20,072, which equated to 0.0040% annually of the fund's average daily net assets. MFSC also receives reimbursement from the fund for out-of-pocket expenses paid by MFSC on behalf of the fund. For the year ended December 31, 2022, these costs amounted to $1,550.

Administrator — MFS provides certain financial, legal, shareholder communications, compliance, and other administrative services to the fund. Under an administrative services agreement, the fund reimburses MFS the costs incurred to provide these services. The fund is charged an annual fixed amount of $17,500 plus a fee based on average daily net assets. The administrative services fee incurred for the year ended December 31, 2022 was equivalent to an annual effective rate of 0.0173% of the fund's average daily net assets.

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MFS Mid Cap Value Portfolio

Notes to Financial Statements - continued

The fund is permitted to engage in purchase and sale transactions with funds and accounts for which MFS serves as investment adviser or sub-adviser (“cross-trades”) pursuant to a policy adopted by the Board of Trustees. This policy has been designed to ensure that cross-trades conducted by the fund comply with Rule 17a-7 under the Investment Company Act of 1940. During the year ended December 31, 2022, the fund engaged in sale transactions pursuant to this policy, which amounted to $125,433. The sales transactions resulted in net realized gains (losses) of $18,105.

The adviser has voluntarily undertaken to reimburse the fund from its own resources on a quarterly basis for the cost of investment research embedded in the cost of the fund’s securities trades. This agreement may be rescinded at any time. For the year ended December 31, 2022, this reimbursement amounted to $15,045, which is included in “Other” income in the Statement of Operations.

(4) Portfolio Securities

For the year ended December 31, 2022, purchases and sales of investments, other than short-term obligations, aggregated $106,781,879 and $144,665,150, respectively.

(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. Transactions in fund shares were as follows:

	Year ended 12/31/22		Year ended 12/31/21
	Shares	Amount	Shares	Amount
Shares sold
Initial Class	4,681,871	$47,560,208	5,403,334	$54,466,927
Service Class	15,477,754	154,792,195	8,348,445	83,577,530
	20,159,625	$202,352,403	13,751,779	$138,044,457
Shares issued to shareholders in reinvestment of distributions
Initial Class	2,792,462	$26,193,294	415,576	$4,276,275
Service Class	2,256,238	20,892,768	274,581	2,792,493
	5,048,700	$47,086,062	690,157	$7,068,768
Shares reacquired
Initial Class	(9,159,594)	$(89,546,799)	(8,849,348)	$(87,892,961)
Service Class	(16,462,055)	(161,604,730)	(4,637,335)	(46,191,681)
	(25,621,649)	$(251,151,529)	(13,486,683)	$(134,084,642)
Net change
Initial Class	(1,685,261)	$(15,793,297)	(3,030,438)	$(29,149,759)
Service Class	1,271,937	14,080,233	3,985,691	40,178,342
	(413,324)	$(1,713,064)	955,253	$11,028,583

The fund is one of several mutual funds in which certain MFS funds may invest. The MFS funds do not invest in the underlying funds for the purpose of exercising management or control. At the end of the period, the MFS Moderate Allocation Portfolio, the MFS Growth Allocation Portfolio, and the MFS Conservative Allocation Portfolio were the owners of record of approximately 16%, 5%, and 3%, respectively, of the value of outstanding voting shares of the fund.

(6) Line of Credit

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MFS Mid Cap Value Portfolio

Notes to Financial Statements - continued

on March 16, 2023 unless extended or renewed. In addition, the fund and other funds managed by MFS have established unsecured uncommitted borrowing arrangements with certain banks for temporary financing needs. Interest is charged to each fund, based on its borrowings, at rates equal to customary reference rates plus an agreed upon spread. For the year ended December 31, 2022, the fund’s commitment fee and interest expense were $2,452 and $2,680, respectively, and are included in “Miscellaneous” expense in the Statement of Operations.

(7) Investments in Affiliated Issuers

Affiliated Issuers	Beginning Value	Purchases	Sales Proceeds	Realized Gain (Loss)	Change in Unrealized Appreciation or Depreciation	Ending Value
MFS Institutional Money Market Portfolio	$5,087,830	$96,511,384	$98,967,501	$1,101	$522	$2,633,336

Affiliated Issuers	Dividend Income	Capital Gain Distributions
MFS Institutional Money Market Portfolio	$116,898	$—

(8) LIBOR Transition

(9) Russia and Ukraine Conflict

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MFS Mid Cap Value Portfolio

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of MFS Variable Insurance Trust III and the Shareholders of MFS Mid Cap Value Portfolio:

Opinion on the Financial Statements and Financial Highlights

We have audited the accompanying statement of assets and liabilities of MFS Mid Cap Value Portfolio (the “Fund”), including the portfolio of investments, as of December 31, 2022, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of December 31, 2022, and 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 five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of December 31, 2022, by correspondence with the custodian and brokers. We believe that our audits provide a reasonable basis for our opinion.

DELOITTE & TOUCHE LLP

Boston, Massachusetts
February 15, 2023

We have served as the auditor of one or more of the MFS investment companies since 1924.

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MFS Mid Cap Value Portfolio

Trustees and Officers — Identification and Background

Name, Age	Position(s) Held with Fund	Trustee/Officer Since^(h)	Number of MFS Funds overseen by the Trustee	Principal Occupations During the Past Five Years	Other Directorships During the Past Five Years ^(j)
INTERESTED TRUSTEE
Michael W. Roberge ^(k) (age 56)	Trustee	January 2021	136	Massachusetts Financial Services Company, Chairman (since January 2021); Chief Executive Officer (since January 2017); Director; Chairman of the Board (since January 2022); President (until December 2018); Chief Investment Officer (until December 2018)	N/A
INDEPENDENT TRUSTEES
John P. Kavanaugh (age 68)	Trustee and Chair of Trustees	January 2009	136	Private investor	N/A
Steven E. Buller (age 71)	Trustee	February 2014	136	Private investor	N/A
John A. Caroselli (age 68)	Trustee	March 2017	136	Private investor; JC Global Advisors, LLC (management consulting), President (since 2015)	N/A
Maureen R. Goldfarb (age 67)	Trustee	January 2009	136	Private investor	N/A
Peter D. Jones (age 67)	Trustee	January 2019	136	Private investor	N/A
James W. Kilman, Jr. (age 61)	Trustee	January 2019	136	Burford Capital Limited (finance and investment management), Senior Advisor (since May 3, 2021), Chief Financial Officer (2019 - May 2, 2021); KielStrand Capital LLC (family office), Chief Executive Officer (since 2016)	Alpha-En Corporation, Director (2016-2019)
Clarence Otis, Jr. (age 66)	Trustee	March 2017	136	Private investor	VF Corporation, Director; Verizon Communications, Inc., Director; The Travelers Companies, Director
Maryanne L. Roepke (age 66)	Trustee	May 2014	136	Private investor	N/A
Laurie J. Thomsen (age 65)	Trustee	March 2005	136	Private investor	The Travelers Companies, Director; Dycom Industries, Inc., Director

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MFS Mid Cap Value Portfolio

Trustees and Officers - continued

Name, Age	Position(s) Held with Fund	Trustee/Officer Since^(h)	Number of MFS Funds for which the Person is an Officer	Principal Occupations During the Past Five Years
OFFICERS
Christopher R. Bohane ^(k) (age 49)	Assistant Secretary and Assistant Clerk	July 2005	136	Massachusetts Financial Services Company, Senior Vice President and Senior Managing Counsel
Kino Clark ^(k) (age 54)	Assistant Treasurer	January 2012	136	Massachusetts Financial Services Company, Vice President
John W. Clark, Jr. ^(k) (age 55)	Assistant Treasurer	April 2017	136	Massachusetts Financial Services Company, Vice President
David L. DiLorenzo ^(k) (age 54)	President	July 2005	136	Massachusetts Financial Services Company, Senior Vice President
Heidi W. Hardin ^(k) (age 55)	Secretary and Clerk	April 2017	136	Massachusetts Financial Services Company, Executive Vice President and General Counsel
Brian E. Langenfeld ^(k) (age 49)	Assistant Secretary and Assistant Clerk	June 2006	136	Massachusetts Financial Services Company, Vice President and Managing Counsel
Rosa E. Licea-Mailloux ^(k) (age 46)	Chief Compliance Officer	March 2022	136	Massachusetts Financial Services Company, Vice President (since 2018); Director of Corporate Compliance (2018-2021), Senior Director Compliance (2021-2022), Senior Managing Director of North American Compliance & Chief Compliance Officer (since March 2022); Natixis Investment Managers (investment management), Funds Chief Compliance Officer, Deputy General Counsel & Senior Vice President (until 2018)
Amanda S. Mooradian ^(k) (age 43)	Assistant Secretary and Assistant Clerk	September 2018	136	Massachusetts Financial Services Company, Assistant Vice President and Senior Counsel
Susan A. Pereira ^(k) (age 52)	Assistant Secretary and Assistant Clerk	July 2005	136	Massachusetts Financial Services Company, Vice President and Managing Counsel
Kasey L. Phillips ^(k) (age 52)	Assistant Treasurer	September 2012	136	Massachusetts Financial Services Company, Vice President
Matthew A. Stowe ^(k) (age 48)	Assistant Secretary and Assistant Clerk	October 2014	136	Massachusetts Financial Services Company, Vice President and Senior Managing Counsel
William B. Wilson ^(k) (age 40)	Assistant Secretary and Assistant Clerk	October 2022	136	Massachusetts Financial Services Company, Assistant Vice President and Counsel
James O. Yost ^(k) (age 62)	Treasurer	September 1990	136	Massachusetts Financial Services Company, Senior Vice President

(h)	Date first appointed to serve as Trustee/Officer of an MFS Fund. Each Trustee has served continuously since appointment unless indicated otherwise. From January 2012 through December 2016, Messrs. DiLorenzo and Yost served as Treasurer and Deputy Treasurer of the Funds, respectively.

(j)	Directorships or trusteeships of companies required to report to the Securities and Exchange Commission (i.e., “public companies”).

(k)

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MFS Mid Cap Value Portfolio

Trustees and Officers - continued

Messrs. Buller, Kilman and Otis and Ms. Roepke are members of the Trust’s Audit Committee.

Each of the Interested Trustees and certain Officers hold comparable officer positions with certain affiliates of MFS.

The Statement of Additional Information for a Fund includes further information about the Trustees and is available without charge upon request by calling 1-800-225-2606.

Investment Adviser	Custodian
Massachusetts Financial Services Company 111 Huntington Avenue Boston, MA 02199-7618	State Street Bank and Trust Company 1 Lincoln Street Boston, MA 02111-2900

Distributor	Independent Registered Public Accounting Firm
MFS Fund Distributors, Inc. 111 Huntington Avenue Boston, MA 02199-7618	Deloitte & Touche LLP 200 Berkeley Street Boston, MA 02116

Portfolio Manager(s)
Richard Offen Kevin Schmitz Brooks Taylor

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MFS Mid Cap Value Portfolio

Board Review of Investment Advisory Agreement

MFS Mid Cap Value Portfolio

In connection with their contract review meetings, the Trustees received and relied upon materials that included, among other items: (i) information provided by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent third party, on the investment performance of the Fund for various time periods ended December 31, 2021 and the investment performance of a group of funds with substantially similar investment classifications/objectives (the “Broadridge performance universe”), (ii) information provided by Broadridge on the Fund’s advisory fees and other expenses and the advisory fees and other expenses of comparable funds identified by Broadridge as well as all other funds in the same investment classification/category (the “Broadridge expense group and universe”), (iii) information provided by MFS on the advisory fees of portfolios of other clients of MFS, including institutional separate accounts and other clients, (iv) information as to whether and to what extent applicable expense waivers, reimbursements or fee “breakpoints” are observed for the Fund, (v) information regarding MFS’ financial results and financial condition, including MFS’ and certain of its affiliates’ estimated profitability from services performed for the Fund and the MFS Funds as a whole, and compared to MFS’ institutional business, (vi) MFS’ views regarding the outlook for the mutual fund industry and the strategic business plans of MFS, (vii) descriptions of various functions performed by MFS for the Funds, such as compliance monitoring and portfolio trading practices, and (viii) information regarding the overall organization of MFS, including information about MFS’ senior management and other personnel providing investment advisory, administrative and other services to the Fund and the other MFS Funds. The comparative performance, fee and expense information prepared and provided by Broadridge was not independently verified and the independent Trustees did not independently verify any information provided to them by MFS.

Based on information provided by Broadridge and MFS, the Trustees reviewed the Fund’s total return investment performance as well as the Broadridge performance universe over various time periods. The Trustees placed particular emphasis on the total return performance of the Fund’s Initial Class shares in comparison to the performance of funds in its Broadridge performance universe over the five-year period ended December 31, 2021, which the Trustees believed was a long enough period to reflect differing market conditions. The total return performance of the Fund’s Initial Class shares was in the 1st quintile relative to the other funds in the universe for this five-year period (the 1st quintile being the best performers and the 5th quintile being the worst performers). The total return performance of the Fund’s Initial Class shares was in the 2nd quintile for each of the one- and three-year periods ended December 31, 2021 relative to the Broadridge performance universe. Because of the passage of time, these performance results may differ from the performance results for more recent periods, including those shown elsewhere in this report.

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MFS Mid Cap Value Portfolio

Board Review of Investment Advisory Agreement - continued

The Trustees also considered whether the Fund may benefit from any economies of scale in the management of the Fund in the event of growth in assets of the Fund and/or growth in assets of the MFS Funds as a whole. They noted that the Fund’s advisory fee rate schedule is subject to a contractual breakpoint that reduces the Fund’s advisory fee rate on average daily net assets over $1 billion. The Trustees also noted that MFS has agreed in writing to waive a portion of the management fees of certain MFS Funds, including the Fund, if the total combined assets of certain funds within the MFS Funds’ complex increase above agreed upon thresholds (the “group fee waiver”), enabling the Fund’s shareholders to share in the benefits from any economies of scale at the complex level. The group fee waiver is reviewed and renewed annually between the Board and MFS. The Trustees concluded that the breakpoint and the group fee waiver were sufficient to allow the Fund to benefit from economies of scale as its assets and overall complex assets grow.

The Trustees also considered the nature, quality, cost, and extent of administrative, transfer agency, and distribution services provided to the Fund by MFS and its affiliates under agreements and plans other than the investment advisory agreement, including any 12b-1 fees the Fund pays to MFS Fund Distributors, Inc., an affiliate of MFS. The Trustees also considered the nature, extent and quality of certain other services MFS performs or arranges for on the Fund’s behalf, which may include securities lending programs, directed expense payment programs, class action recovery programs, and MFS’ interaction with third-party service providers, principally custodians and sub-custodians. The Trustees concluded that the various non-advisory services provided by MFS and its affiliates on behalf of the Fund were satisfactory.

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MFS Mid Cap Value Portfolio

Proxy Voting Policies and Information

Quarterly Portfolio Disclosure

FURTHER INFORMATION

Information About Fund Contracts and Legal Claims

Federal Tax Information (unaudited)

The following information is provided pursuant to provisions of the Internal Revenue Code.

The fund designates $38,678,000 as capital gain dividends paid during the fiscal year.

For corporate shareholders, 58.66% of the ordinary income dividends paid during the fiscal year qualify for the corporate dividends received deduction.

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rev. 3/16

FACTS

WHAT DOES MFS DO WITH YOUR PERSONAL INFORMATION?

Why?

What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include:
	• Social Security number and account balances
	• Account transactions and transaction history
	• Checking account information and wire transfer instructions
	When you are no longer our customer, we continue to share your information as described in this notice.

How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MFS chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MFS share?	Can you limit this sharing?
For our everyday business purposes – such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes – to offer our products and services to you	No	We don't share
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes – information about your transactions and experiences	No	We don't share
For our affiliates' everyday business purposes – information about your creditworthiness	No	We don't share
For nonaffiliates to market to you	No	We don't share

Questions?

Call 800-225-2606 or go to mfs.com.

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Page 2

Who we are
Who is providing this notice?	MFS Funds, MFS Investment Management, MFS Institutional Advisors, Inc., and MFS Heritage Trust Company.

What we do
How does MFS protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include procedural, electronic, and physical safeguards for the protection of the personal information we collect about you.
How does MFS collect my personal information?	We collect your personal information, for example, when you
	• open an account or provide account information
	• direct us to buy securities or direct us to sell your securities
	• make a wire transfer
	We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only
	• sharing for affiliates' everyday business purposes – information about your creditworthiness
	• affiliates from using your information to market to you
	• sharing for nonaffiliates to market to you
	State laws and individual companies may give you additional rights to limit sharing.

Definitions
Affiliates	Companies related by common ownership or control. They can be financial and nonfinancial companies.
	• MFS does not share personal information with affiliates, except for everyday business purposes as described on page one of this notice.
Nonaffiliates	Companies not related by common ownership or control. They can be financial and nonfinancial companies.
	• MFS does not share with nonaffiliates so they can market to you.
Joint marketing	A formal agreement between nonaffiliated financial companies that together market financial products or services to you.
	• MFS doesn't jointly market.

Other important information

If you own an MFS product or receive an MFS service in the name of a third party such as a bank or broker-dealer, their privacy policy may apply to you instead of ours.

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Annual Report

December 31, 2022

MFS^® New Discovery
Value Portfolio

MFS^® Variable Insurance Trust III

VDV-ANN

MFS^® New Discovery Value Portfolio

CONTENTS

The 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.

NOT FDIC INSURED • MAY LOSE VALUE • NO BANK OR CREDIT UNION GUARANTEE •

NOT A DEPOSIT • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY OR NCUA/NCUSIF

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MFS New Discovery Value Portfolio

LETTER FROM THE CHAIR AND CEO

Dear Shareholders:

During times of market transition, it is important to have a deep understanding of company fundamentals, and we have built our unique global research platform to do just that.

Respectfully,

Michael W. Roberge

Chair and Chief Executive Officer

MFS Investment Management

February 15, 2023

The opinions expressed in this letter are subject to change and may not be relied upon for investment advice. No forecasts can be guaranteed.

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MFS New Discovery Value Portfolio

Portfolio Composition

Portfolio structure

Top ten holdings

International Game Technology PLC	1.6%
Umpqua Holdings Corp.	1.5%
Berry Global, Inc.	1.5%
Skechers USA, Inc., “A”	1.5%
Cathay General Bancorp, Inc.	1.4%
Prestige Consumer Healthcare, Inc.	1.4%
Prosperity Bancshares, Inc.	1.4%
KBR, Inc.	1.4%
Black Hills Corp.	1.4%
SLM Corp.	1.3%

GICS equity sectors (g)

Financials	23.6%
Consumer Discretionary	15.0%
Industrials	13.6%
Materials	11.2%
Information Technology	8.3%
Energy	7.2%
Health Care	7.1%
Real Estate	6.3%
Utilities	4.7%
Consumer Staples	2.0%

(g)

Percentages are based on net assets as of December 31, 2022.

The portfolio is actively managed and current holdings may be different.

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MFS New Discovery Value Portfolio

Management Review

Summary of Results

For the twelve months ended December 31, 2022, Initial Class shares of the MFS New Discovery Value Portfolio (fund) provided a total return of -10.96%, while Service Class shares of the fund provided a total return of -11.23%. These compare with a return of -14.48% over the same period for the fund’s benchmark, the Russell 2000^® Value Index.

Market Environment

Contributors to Performance

Relative to the Russell 2000^® Value Index, favorable stock selection in the financials sector contributed to the fund’s performance, led by its holdings of financial services firm Element Fleet Management(b) (Canada) and reinsurer Everest Reinsurance(b). The stock price of Element Fleet Management rose as the company reported strong revenue due to pent-up demand from the pandemic and a large backlog of customer orders for fleet vehicles.

Stock selection within the consumer discretionary sector also aided relative returns, driven by the fund’s holdings of strong-performing specialty value retailer Five Below(b). The stock price of Five Below advanced as the company posted better-than-expected sales and margins.

Security selection within the industrials sector was another contributor to relative performance, however, there were no individual stocks within this sector, either in the fund or in the benchmark, that were among the fund's largest relative contributors for the reporting period.

Elsewhere, the fund’s holdings of oil and natural gas property developer Viper Energy Partners(b), oil transportation and storage company Plains GP Holdings(b), consumer goods packaging manufacturer Silgan Holdings(b), integrated payment and frictionless commerce solutions provider Paya(b) and paper-based packing goods manufacturer Graphic Packaging(b) were among the fund’s top relative contributors for the reporting period. Additionally, the fund’s overweight position in oil and gas technology solutions and equipment provider ChampionX, and its avoidance of poor-performing multinational movie-theatre chain AMC Entertainment, also benefited relative performance.

Detractors from Performance

Stock selection in the materials sector detracted from relative performance, led by the fund’s holdings of cleaning and hygiene products provider Diversey(b) and metal beverage can manufacturer Ardagh Metal Packaging(b). Although Diversey delivered strong financial results, the stock price declined as the company cut its earnings guidance, citing higher raw material costs and unfavorable foreign exchange headwinds.

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MFS New Discovery Value Portfolio

Management Review - continued

The combination of security selection and underweight allocations to both the energy and consumer staples sectors further weighed on the fund’s relative results. Within the energy sector, not owning shares of strong-performing oil and natural gas producers, Antero Resources, Ovintiv and Chesapeake Energy, hindered relative performance. The stock price of Antero Resources rose as the company reported better-than-expected Marcellus shale production figures and benefited from elevated energy prices. There were no individual stocks within the consumer staples sector, either in the fund or in the benchmark, that were among the fund's largest relative detractors for the reporting period.

Elsewhere, the fund’s holdings of clinical development company Syneos Health(b), self-storage property manager National Storage Affiliates Trust(b) and life sciences company Maravai Lifesciences Holdings(b), and its overweight positions in youth apparel retailer Zumiez and real estate investment trust Industrial Logistics Properties Trust(h), weakened relative performance. The stock price of Syneos Health declined as the company reported lower-than-expected revenue and depressed margins.

Respectfully,

Portfolio Manager(s)

Richard Offen and Kevin Schmitz

Note to Shareholders: Effective December 31, 2023, Kevin Schmitz will no longer be a Portfolio Manager of the fund.

(b)	Security is not a benchmark constituent.

(h)	Security was not held in the portfolio at period end.

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MFS New Discovery Value Portfolio

Performance Summary Through 12/31/22

Growth of a Hypothetical $10,000 Investment

Total Returns through 12/31/22

Average annual total returns

Share Class	Class Inception Date	1-yr	5-yr	10-yr
Initial Class	10/01/08	(10.96)%	8.20%	11.84%
Service Class	10/01/08	(11.23)%	7.92%	11.56%

Comparative benchmark(s)

Russell 2000^® Value Index (f)

(14.48)%

4.13%

8.48%

(f)	Source: FactSet Research Systems Inc.

Benchmark Definition(s)

Russell 2000^® Value Index^(h) - a market-capitalization-weighted, value-oriented index that measures the performance of small-capitalization stocks that have relatively low price-to-book ratios and lower forecasted growth values.

It is not possible to invest directly in an index.

(h)

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MFS New Discovery Value Portfolio

Performance Summary – continued

Notes to Performance Summary

Average annual total return represents the average annual change in value for each share class for the periods presented.

From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.

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MFS New Discovery Value Portfolio

Expense Table

Fund expenses borne by the shareholders during the period,
July 1, 2022 through December 31, 2022

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2022 through December 31, 2022.

Actual Expenses

Hypothetical Example for Comparison Purposes

Share Class		Annualized Expense Ratio	Beginning Account Value 7/01/22	Ending Account Value 12/31/22	Expenses Paid During Period (p) 7/01/22-12/31/22
Initial Class	Actual	0.88%	$1,000.00	$1,044.31	$4.53
Initial Class	Hypothetical (h)	0.88%	$1,000.00	$1,020.77	$4.48
Service Class	Actual	1.13%	$1,000.00	$1,043.18	$5.82
Service Class	Hypothetical (h)	1.13%	$1,000.00	$1,019.51	$5.75

(h)	5% class return per year before expenses.

(p)	“Expenses Paid During Period” are equal to each class's annualized expense ratio, as shown above, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

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MFS New Discovery Value Portfolio

Portfolio of Investments − 12/31/22

The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.

Issuer	Shares/Par	Value ($)
Common Stocks – 99.0%
Aerospace & Defense – 2.6%
CACI International, Inc., “A” (a)	1,897	$ 570,219
KBR, Inc.	11,924	629,587
		$1,199,806
Apparel Manufacturers – 3.3%
Canada Goose Holdings, Inc. (a)(l)	17,683	$ 314,934
PVH Corp.	7,195	507,895
Skechers USA, Inc., “A” (a)	16,687	700,020
		$1,522,849
Automotive – 3.0%
LKQ Corp.	11,276	$ 602,251
Methode Electronics, Inc.	11,103	492,640
Visteon Corp. (a)	2,126	278,145
		$1,373,036
Brokerage & Asset Managers – 1.0%
Focus Financial Partners, “A” (a)	11,866	$ 442,246
Business Services – 3.2%
HireRight Holdings Corp. (a)	18,447	$ 218,782
Paya, Inc. (a)	70,352	553,670
TaskUs, Inc., “A” (a)	10,730	181,337
Thoughtworks Holding, Inc. (a)	24,627	250,949
WNS (Holdings) Ltd., ADR (a)	3,087	246,929
		$1,451,667
Chemicals – 2.0%
Avient Corp.	14,445	$ 487,663
Element Solutions, Inc.	24,720	449,657
		$937,320
Computer Software – 1.6%
ACI Worldwide, Inc. (a)	17,875	$ 411,125
Everbridge, Inc. (a)	5,815	172,008
Sabre Corp. (a)	26,033	160,884
		$744,017
Computer Software - Systems – 1.3%
Softchoice Corp. (l)	23,184	$ 312,659
Verint Systems, Inc. (a)	8,143	295,428
		$608,087
Construction – 1.0%
Toll Brothers, Inc.	8,758	$ 437,199
Consumer Products – 2.0%
Newell Brands, Inc.	20,947	$ 273,987
Prestige Consumer Healthcare, Inc. (a)	10,286	643,903
		$917,890

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MFS New Discovery Value Portfolio

Portfolio of Investments – continued

Issuer	Shares/Par	Value ($)
Common Stocks – continued
Consumer Services – 1.4%
Bright Horizons Family Solutions, Inc. (a)	4,799	$ 302,817
Grand Canyon Education, Inc. (a)	3,350	353,961
		$656,778
Containers – 3.3%
Ardagh Metal Packaging S.A.	59,741	$ 287,354
Graphic Packaging Holding Co.	22,143	492,682
Pactiv Evergreen, Inc.	15,131	171,888
Silgan Holdings, Inc.	10,582	548,571
		$1,500,495
Electrical Equipment – 4.4%
Berry Global, Inc.	11,604	$ 701,230
nVent Electric PLC	11,781	453,215
TriMas Corp.	16,719	463,785
Vertiv Holdings Co.	28,576	390,348
		$2,008,578
Electronics – 1.6%
Cohu, Inc. (a)	10,295	$ 329,955
Plexus Corp. (a)	3,923	403,794
		$733,749
Energy - Independent – 3.1%
CNX Resources Corp. (a)	30,618	$ 515,607
Magnolia Oil & Gas Corp., “A”	16,273	381,602
Viper Energy Partners LP	16,392	521,102
		$1,418,311
Food & Beverages – 2.0%
Hostess Brands, Inc. (a)	14,338	$ 321,744
Nomad Foods Ltd. (a)	33,749	581,833
		$903,577
Gaming & Lodging – 1.6%
International Game Technology PLC	32,370	$ 734,151
General Merchandise – 1.0%
Five Below, Inc. (a)	2,693	$ 476,311
Insurance – 4.2%
CNO Financial Group, Inc.	18,431	$ 421,148
Everest Re Group Ltd.	1,675	554,877
Hanover Insurance Group, Inc.	3,027	409,039
Selective Insurance Group, Inc.	6,306	558,775
		$1,943,839
Leisure & Toys – 1.4%
Brunswick Corp.	3,895	$ 280,752
Funko, Inc., “A” (a)	19,056	207,901
Hayward Holdings, Inc. (a)	17,496	164,462
		$653,115

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MFS New Discovery Value Portfolio

Portfolio of Investments – continued

Issuer	Shares/Par	Value ($)
Common Stocks – continued
Machinery & Tools – 4.4%
ESAB Corp.	9,845	$ 461,928
Flowserve Corp.	15,145	464,649
ITT, Inc.	2,892	234,541
Regal Rexnord Corp.	2,994	359,220
Timken Co.	6,987	493,771
		$2,014,109
Medical & Health Technology & Services – 2.7%
ICON PLC (a)	1,773	$ 344,405
Premier, Inc., “A”	13,300	465,234
Syneos Health, Inc. (a)	11,180	410,083
		$1,219,722
Medical Equipment – 2.5%
Agiliti Health, Inc. (a)	13,171	$ 214,819
Envista Holdings Corp. (a)	11,896	400,538
Maravai Lifesciences Holdings, Inc., “A” (a)	11,748	168,114
Quidel Corp. (a)	4,180	358,101
		$1,141,572
Metals & Mining – 1.2%
Arconic Corp. (a)	16,207	$ 342,940
Kaiser Aluminum Corp.	2,603	197,724
		$540,664
Natural Gas - Distribution – 2.1%
New Jersey Resources Corp.	9,907	$ 491,585
ONE Gas, Inc.	6,142	465,072
		$956,657
Natural Gas - Pipeline – 1.1%
Plains GP Holdings LP	39,652	$ 493,271
Oil Services – 3.0%
ChampionX Corp.	17,857	$ 517,674
Expro Group Holdings N.V. (a)	27,145	492,139
Helmerich & Payne	7,675	380,450
		$1,390,263
Other Banks & Diversified Financials – 19.4%
Air Lease Corp.	14,384	$ 552,633
Bank of Hawaii Corp.	6,936	537,956
Brookline Bancorp, Inc.	33,735	477,350
Cathay General Bancorp, Inc.	16,134	658,106
East West Bancorp, Inc.	7,504	494,514
Element Fleet Management Corp. (l)	25,627	349,201
First Hawaiian, Inc.	17,888	465,803
First Interstate BancSystem, Inc.	13,532	523,012
Hanmi Financial Corp.	15,385	380,779
Pacific Premier Bancorp, Inc.	12,130	382,823
Prosperity Bancshares, Inc.	8,851	643,291
Sandy Spring Bancorp, Inc.	8,384	295,368
SLM Corp.	37,185	617,271
Texas Capital Bancshares, Inc. (a)	6,029	363,609
Textainer Group Holdings Ltd.	7,847	243,335

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MFS New Discovery Value Portfolio

Portfolio of Investments – continued

Issuer	Shares/Par	Value ($)
Common Stocks – continued
Other Banks & Diversified Financials – continued
UMB Financial Corp.	6,742	$ 563,092
Umpqua Holdings Corp.	39,435	703,915
Wintrust Financial Corp.	2,963	250,433
Zions Bancorp NA	7,862	386,496
		$8,888,987
Pharmaceuticals – 0.5%
Organon & Co.	9,047	$ 252,683
Real Estate – 7.0%
Brixmor Property Group, Inc., REIT	14,039	$ 318,264
Broadstone Net Lease, Inc., REIT	29,416	476,833
Cushman & Wakefield PLC (a)	15,867	197,703
Douglas Emmett, Inc., REIT	7,323	114,825
Empire State Realty Trust, REIT, “A”	47,704	321,525
Life Storage, Inc., REIT	1,801	177,399
LXP Industrial Trust, REIT	37,075	371,492
National Storage Affiliates Trust, REIT	9,027	326,055
Phillips Edison & Co., REIT	18,523	589,772
Two Harbors Investment Corp., REIT	20,037	315,983
		$3,209,851
Restaurants – 0.8%
Jack in the Box, Inc.	5,101	$ 348,041
Specialty Chemicals – 2.2%
Axalta Coating Systems Ltd. (a)	16,032	$ 408,335
Diversey Holdings Ltd. (a)	79,823	340,046
Quaker Chemical Corp.	1,495	249,515
		$997,896
Specialty Stores – 2.3%
Monro Muffler Brake, Inc.	6,579	$ 297,371
Urban Outfitters, Inc. (a)	18,118	432,114
Zumiez, Inc. (a)	14,058	305,621
		$1,035,106
Trucking – 2.2%
RXO, Inc. (a)	17,974	$ 309,153
Schneider National, Inc.	14,761	345,407
XPO Logistics, Inc. (a)	10,634	354,006
		$1,008,566
Utilities - Electric Power – 2.6%
Black Hills Corp.	8,832	$ 621,243
Portland General Electric Co.	11,704	573,496
		$1,194,739
Total Common Stocks (Identified Cost, $36,380,194)		$45,355,148
Investment Companies (h) – 1.1%
Money Market Funds – 1.1%
MFS Institutional Money Market Portfolio, 4.02% (v) (Identified Cost, $512,579)	512,556	$ 512,710

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MFS New Discovery Value Portfolio

Portfolio of Investments – continued

Issuer	Shares/Par	Value ($)
Collateral for Securities Loaned – 0.3%
State Street Navigator Securities Lending Government Money Market Portfolio, 4.33% (j) (Identified Cost, $143,945)	143,945	$ 143,945
Other Assets, Less Liabilities – (0.4)%		(176,127)
Net Assets – 100.0%		$45,835,676

(a)	Non-income producing security.
(h)	An affiliated issuer, which may be considered one in which the fund owns 5% or more of the outstanding voting securities, or a company which is under common control. At period end, the aggregate values of the fund's investments in affiliated issuers and in unaffiliated issuers were $512,710 and $45,499,093, respectively.
(j)	The rate quoted is the annualized seven-day yield of the fund at period end.
(l)	A portion of this security is on loan. See Note 2 for additional information.
(v)	Affiliated issuer that is available only to investment companies managed by MFS. The rate quoted for the MFS Institutional Money Market Portfolio is the annualized seven-day yield of the fund at period end.

The following abbreviations are used in this report and are defined:
ADR	American Depositary Receipt
REIT	Real Estate Investment Trust

See Notes to Financial Statements

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MFS New Discovery Value Portfolio

Financial Statements

Statement of Assets and Liabilities

This statement represents your fund’s balance sheet, which details the assets and liabilities comprising the total value of the fund.

At 12/31/22 Assets
Investments in unaffiliated issuers, at value, including $141,318 of securities on loan (identified cost, $36,524,139)	$45,499,093
Investments in affiliated issuers, at value (identified cost, $512,579)	512,710
Receivables for
Fund shares sold	655
Interest and dividends	51,090
Receivable from investment adviser	8,238
Other assets	516
Total assets	$46,072,302
Liabilities
Payables for
Fund shares reacquired	$43,556
Collateral for securities loaned, at value	143,945
Payable to affiliates
Administrative services fee	144
Shareholder servicing costs	16
Distribution and/or service fees	269
Payable for independent Trustees' compensation	83
Accrued expenses and other liabilities	48,613
Total liabilities	$236,626
Net assets	$45,835,676
Net assets consist of
Paid-in capital	$34,523,037
Total distributable earnings (loss)	11,312,639
Net assets	$45,835,676
Shares of beneficial interest outstanding	5,802,196

	Net assets	Shares outstanding	Net asset value per share
Initial Class	$32,664,679	4,116,784	$7.93
Service Class	13,170,997	1,685,412	7.81

See Notes to Financial Statements

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MFS New Discovery Value Portfolio

Financial Statements

Statement of Operations

This statement describes how much your fund earned in investment income and accrued in expenses. It also describes any gains and/or losses generated by fund operations.

Year ended 12/31/22
Net investment income (loss)
Income
Dividends	$843,691
Dividends from affiliated issuers	8,333
Other	3,557
Income on securities loaned	1,999
Foreign taxes withheld	(5,912)
Total investment income	$851,668
Expenses
Management fee	$436,771
Distribution and/or service fees	33,533
Shareholder servicing costs	4,170
Administrative services fee	17,624
Independent Trustees' compensation	3,062
Custodian fee	5,226
Shareholder communications	4,579
Audit and tax fees	59,818
Legal fees	251
Miscellaneous	26,530
Total expenses	$591,564
Reduction of expenses by investment adviser	(130,980)
Net expenses	$460,584
Net investment income (loss)	$391,084
Realized and unrealized gain (loss)
Realized gain (loss) (identified cost basis)
Unaffiliated issuers	$4,373,665
Affiliated issuers	(16)
Foreign currency	121
Net realized gain (loss)	$4,373,770
Change in unrealized appreciation or depreciation
Unaffiliated issuers	$(10,596,795)
Affiliated issuers	131
Translation of assets and liabilities in foreign currencies	(36)
Net unrealized gain (loss)	$(10,596,700)
Net realized and unrealized gain (loss)	$(6,222,930)
Change in net assets from operations	$(5,831,846)

See Notes to Financial Statements

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MFS New Discovery Value Portfolio

Financial Statements

Statements of Changes in Net Assets

These statements describe the increases and/or decreases in net assets resulting from operations, any distributions, and any shareholder transactions.

	Year ended
	12/31/22	12/31/21
Change in net assets
From operations
Net investment income (loss)	$391,084	$284,504
Net realized gain (loss)	4,373,770	11,782,149
Net unrealized gain (loss)	(10,596,700)	3,812,772
Change in net assets from operations	$(5,831,846)	$15,879,425
Total distributions to shareholders	$(10,618,121)	$(1,651,131)
Change in net assets from fund share transactions	$7,079,354	$(14,070,396)
Total change in net assets	$(9,370,613)	$157,898
Net assets
At beginning of period	55,206,289	55,048,391
At end of period	$45,835,676	$55,206,289

See Notes to Financial Statements

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MFS New Discovery Value Portfolio

Financial Statements

Financial Highlights

Initial Class	Year ended
	12/31/22	12/31/21	12/31/20	12/31/19	12/31/18
Net asset value, beginning of period	$11.40	$8.77	$9.33	$8.45	$11.13
Income (loss) from investment operations
Net investment income (loss) (d)	$0.08	$0.06	$0.07	$0.10	$0.08
Net realized and unrealized gain (loss)	(1.27)	2.91	0.14	2.46	(0.94)
Total from investment operations	$(1.19)	$2.97	$0.21	$2.56	$(0.86)
Less distributions declared to shareholders
From net investment income	$(0.07)	$(0.09)	$(0.08)	$(0.08)	$(0.06)
From net realized gain	(2.21)	(0.25)	(0.69)	(1.60)	(1.76)
Total distributions declared to shareholders	$(2.28)	$(0.34)	$(0.77)	$(1.68)	$(1.82)
Net asset value, end of period (x)	$7.93	$11.40	$8.77	$9.33	$8.45
Total return (%) (k)(r)(s)(x)	(10.96)	34.05	4.19	33.65	(10.78)
Ratios (%) (to average net assets) and Supplemental data:
Expenses before expense reductions	1.15	1.12	1.14	1.13	1.11
Expenses after expense reductions	0.88	0.88	0.88	0.88	0.88
Net investment income (loss)	0.87	0.58	0.90	1.02	0.72
Portfolio turnover	32	51	84	38	55
Net assets at end of period (000 omitted)	$32,665	$40,980	$44,834	$41,098	$36,665

Service Class	Year ended
	12/31/22	12/31/21	12/31/20	12/31/19	12/31/18
Net asset value, beginning of period	$11.27	$8.67	$9.25	$8.38	$11.05
Income (loss) from investment operations
Net investment income (loss) (d)	$0.06	$0.04	$0.05	$0.07	$0.05
Net realized and unrealized gain (loss)	(1.27)	2.88	0.12	2.45	(0.93)
Total from investment operations	$(1.21)	$2.92	$0.17	$2.52	$(0.88)
Less distributions declared to shareholders
From net investment income	$(0.04)	$(0.07)	$(0.06)	$(0.05)	$(0.03)
From net realized gain	(2.21)	(0.25)	(0.69)	(1.60)	(1.76)
Total distributions declared to shareholders	$(2.25)	$(0.32)	$(0.75)	$(1.65)	$(1.79)
Net asset value, end of period (x)	$7.81	$11.27	$8.67	$9.25	$8.38
Total return (%) (k)(r)(s)(x)	(11.23)	33.87	3.73	33.43	(11.00)
Ratios (%) (to average net assets) and Supplemental data:
Expenses before expense reductions	1.40	1.37	1.39	1.38	1.36
Expenses after expense reductions	1.13	1.13	1.13	1.13	1.13
Net investment income (loss)	0.63	0.36	0.66	0.78	0.45
Portfolio turnover	32	51	84	38	55
Net assets at end of period (000 omitted)	$13,171	$14,227	$10,215	$9,518	$8,387

See Notes to Financial Statements

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MFS New Discovery Value Portfolio

Financial Highlights - continued

(d)	Per share data is based on average shares outstanding.
(k)	The total return does not reflect expenses that apply to separate accounts. Inclusion of these charges would reduce the total return figures for all periods shown.
(r)	Certain expenses have been reduced without which performance would have been lower.
(s)	From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
(x)	The net asset values and total returns have been calculated on net assets which include adjustments made in accordance with U.S. generally accepted accounting principles required at period end for financial reporting purposes.

See Notes to Financial Statements

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MFS New Discovery Value Portfolio

Notes to Financial Statements

(1) Business and Organization

MFS New Discovery Value Portfolio (the fund) is a diversified series of MFS Variable Insurance Trust III (the trust). The trust is organized as a Delaware statutory 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, and qualified retirement and pension plans.

(2) Significant Accounting Policies

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MFS New Discovery Value Portfolio

Notes to Financial Statements - continued

Financial Instruments	Level 1	Level 2	Level 3	Total
Equity Securities	$45,355,148	$—	$—	$45,355,148
Mutual Funds	656,655	—	—	656,655
Total	$46,011,803	$—	$—	$46,011,803

For further information regarding security characteristics, see the Portfolio of Investments.

Security Loans — Under its Securities Lending Agency Agreement with the fund, State Street Bank and Trust Company, as lending agent, loans the securities of the fund to certain qualified institutions (the “Borrowers”) approved by the fund. Security loans can be terminated at the discretion of either the lending agent or the fund and the related securities must be returned within the earlier of the standard trade settlement period for such securities or within three business days. The loans are collateralized by cash and/or U.S. Treasury and federal agency obligations in an amount typically at least equal to the market value of the securities loaned. On loans collateralized by cash, the cash collateral is invested in a money market fund. The market value of the loaned securities is determined at the close of business of the fund and any additional required collateral is delivered to the fund on the next business day. The lending agent provides the fund with indemnification against Borrower default. In the event of Borrower default, the lending agent will, for the benefit of the fund, either purchase securities identical to those loaned or, when such purchase is commercially impracticable, pay the fund the market value of the loaned securities. In return, the lending agent assumes the fund's rights to the related collateral. If the collateral value is less than the cost to purchase identical securities, the lending agent is responsible for the shortfall, but only to the extent that such shortfall is not due to a decline in collateral value resulting from collateral reinvestment for which the fund bears the risk of loss. At period end, the fund had investment securities on loan, all of which were classified as equity securities in the fund's Portfolio of Investments, with a fair value of $141,318. The fair value of the fund's investment securities on loan and a related liability of $143,945 for cash collateral received on securities loaned are both presented gross in the Statement of Assets and Liabilities. The collateral on securities loaned exceeded the value of securities on loan at period end. The liability for cash collateral for securities loaned is carried at fair value, which is categorized as level 2 within the fair value hierarchy. 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 agent. On loans collateralized by U.S. Treasury and/or federal agency obligations, a fee is received from the Borrower, and is allocated between the fund and the lending agent. Income from securities lending is separately reported in 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.

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MFS New Discovery Value Portfolio

Notes to Financial Statements - continued

Book/tax differences primarily relate to passive foreign investment companies and wash sale loss deferrals.

The tax character of distributions declared to shareholders for the last two fiscal years is as follows:

	Year ended 12/31/22	Year ended 12/31/21
Ordinary income (including any short-term capital gains)	$4,595,522	$1,311,100
Long-term capital gains	6,022,599	340,031
Total distributions	$10,618,121	$1,651,131

The federal tax cost and the tax basis components of distributable earnings were as follows:

As of 12/31/22
Cost of investments	$39,191,807
Gross appreciation	9,995,770
Gross depreciation	(3,175,774)
Net unrealized appreciation (depreciation)	$6,819,996
Undistributed ordinary income	708,391
Undistributed long-term capital gain	3,784,246
Other temporary differences	6
Total distributable earnings (loss)	$11,312,639

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MFS New Discovery Value Portfolio

Notes to Financial Statements - continued

	Year ended 12/31/22	Year ended 12/31/21
Initial Class	$7,623,891	$1,259,904
Service Class	2,994,230	391,227
Total	$10,618,121	$1,651,131

(3) Transactions with Affiliates

Investment Adviser — The fund has an investment advisory agreement with MFS to provide overall investment management and related administrative services and facilities to the fund. The management fee is computed daily and paid monthly at the following annual rates based on the fund's average daily net assets:

Up to $250 million	0.90%
In excess of $250 million	0.85%

MFS has agreed in writing to reduce its management fee by a specified amount if certain MFS mutual fund assets exceed thresholds agreed to by MFS and the fund's Board of Trustees. Effective March 1, 2022, MFS has also agreed in writing to waive at least 0.01% of its management fee as part of this agreement. The agreement to waive at least 0.01% of the management fee will continue until modified by the fund's Board of Trustees, but such agreement will continue at least until April 30, 2024. For the year ended December 31, 2022, this management fee reduction amounted to $6,745, which is included in the reduction of total expenses in the Statement of Operations. The management fee incurred for the year ended December 31, 2022 was equivalent to an annual effective rate of 0.89% of the fund's average daily net assets.

The investment adviser has agreed in writing to pay a portion of the fund’s total annual operating expenses, excluding interest, taxes, extraordinary expenses, brokerage and transaction costs, certain tax reclaim recovery expenses (including contingency fees and closing agreement expenses), and investment-related expenses, such that total annual operating expenses do not exceed 0.88% of average daily net assets for the Initial Class shares and 1.13% of average daily net assets for the Service Class shares. This written agreement will continue until modified by the fund’s Board of Trustees, but such agreement will continue at least until April 30, 2024. For the year ended December 31, 2022, this reduction amounted to $124,235, which is included in the reduction of total expenses in the Statement of Operations.

Shareholder Servicing Agent — MFS Service Center, Inc. (MFSC), a wholly-owned subsidiary of MFS, receives a fee from the fund for its services as shareholder servicing agent. For the year ended December 31, 2022, the fee was $3,784, which equated to 0.0078% annually of the fund's average daily net assets. MFSC also receives reimbursement from the fund for out-of-pocket expenses paid by MFSC on behalf of the fund. For the year ended December 31, 2022, these costs amounted to $386.

Administrator — MFS provides certain financial, legal, shareholder communications, compliance, and other administrative services to the fund. Under an administrative services agreement, the fund reimburses MFS the costs incurred to provide these services. The fund is charged an annual fixed amount of $17,500 plus a fee based on average daily net assets. The administrative services fee incurred for the year ended December 31, 2022 was equivalent to an annual effective rate of 0.0363% of the fund's average daily net assets.

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MFS New Discovery Value Portfolio

Notes to Financial Statements - continued

The fund is permitted to engage in purchase and sale transactions with funds and accounts for which MFS serves as investment adviser or sub-adviser (“cross-trades”) pursuant to a policy adopted by the Board of Trustees. This policy has been designed to ensure that cross-trades conducted by the fund comply with Rule 17a-7 under the Investment Company Act of 1940. During the year ended December 31, 2022, the fund engaged in purchase and sale transactions pursuant to this policy, which amounted to $2,290 and $103,305, respectively. The sales transactions resulted in net realized gains (losses) of $24,492.

The adviser has voluntarily undertaken to reimburse the fund from its own resources on a quarterly basis for the cost of investment research embedded in the cost of the fund’s securities trades. This agreement may be rescinded at any time. For the year ended December 31, 2022, this reimbursement amounted to $3,535, which is included in “Other” income in the Statement of Operations.

(4) Portfolio Securities

For the year ended December 31, 2022, purchases and sales of investments, other than short-term obligations, aggregated $15,533,781 and $18,650,034, respectively.

(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. Transactions in fund shares were as follows:

	Year ended 12/31/22		Year ended 12/31/21
	Shares	Amount	Shares	Amount
Shares sold
Initial Class	189,342	$1,803,802	431,095	$4,511,414
Service Class	406,264	3,826,984	437,830	4,651,820
	595,606	$5,630,786	868,925	$9,163,234
Shares issued to shareholders in reinvestment of distributions
Initial Class	938,903	$7,623,891	118,412	$1,259,904
Service Class	373,811	2,994,230	37,189	391,227
	1,312,714	$10,618,121	155,601	$1,651,131
Shares reacquired
Initial Class	(604,995)	$(5,885,751)	(2,069,710)	$(20,828,539)
Service Class	(357,231)	(3,283,802)	(390,160)	(4,056,222)
	(962,226)	$(9,169,553)	(2,459,870)	$(24,884,761)
Net change
Initial Class	523,250	$3,541,942	(1,520,203)	$(15,057,221)
Service Class	422,844	3,537,412	84,859	986,825
	946,094	$7,079,354	(1,435,344)	$(14,070,396)

The fund is one of several mutual funds in which certain MFS funds may invest. The MFS funds do not invest in the underlying funds for the purpose of exercising management or control. At the end of the period, the MFS Moderate Allocation Portfolio, the MFS Growth Allocation Portfolio, and the MFS Conservative Allocation Portfolio were the owners of record of approximately 33%, 12%, and 7%, respectively, of the value of outstanding voting shares of the fund.

Effective at the close of business on August 14, 2019, the fund was closed to new investors subject to certain exceptions.

(6) Line of Credit

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MFS New Discovery Value Portfolio

Notes to Financial Statements - continued

the average daily unused portion of the committed line of credit, is allocated among the participating funds. The line of credit expires on March 16, 2023 unless extended or renewed. In addition, the fund and other funds managed by MFS have established unsecured uncommitted borrowing arrangements with certain banks for temporary financing needs. Interest is charged to each fund, based on its borrowings, at rates equal to customary reference rates plus an agreed upon spread. For the year ended December 31, 2022, the fund’s commitment fee and interest expense were $240 and $0, respectively, and are included in “Miscellaneous” expense in the Statement of Operations.

(7) Investments in Affiliated Issuers

Affiliated Issuers	Beginning Value	Purchases	Sales Proceeds	Realized Gain (Loss)	Change in Unrealized Appreciation or Depreciation	Ending Value
MFS Institutional Money Market Portfolio	$383,820	$11,111,667	$10,982,892	$(16)	$131	$512,710

Affiliated Issuers	Dividend Income	Capital Gain Distributions
MFS Institutional Money Market Portfolio	$8,333	$—

(8) LIBOR Transition

(9) Russia and Ukraine Conflict

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MFS New Discovery Value Portfolio

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of MFS Variable Insurance Trust III and the Shareholders of MFS New Discovery Value Portfolio:

Opinion on the Financial Statements and Financial Highlights

We have audited the accompanying statement of assets and liabilities of MFS New Discovery Value Portfolio (the “Fund”), including the portfolio of investments, as of December 31, 2022, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of December 31, 2022, and 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 five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of December 31, 2022, by correspondence with the custodian and brokers. We believe that our audits provide a reasonable basis for our opinion.

DELOITTE & TOUCHE LLP

Boston, Massachusetts
February 15, 2023

We have served as the auditor of one or more of the MFS investment companies since 1924.

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MFS New Discovery Value Portfolio

Trustees and Officers — Identification and Background

Name, Age	Position(s) Held with Fund	Trustee/Officer Since^(h)	Number of MFS Funds overseen by the Trustee	Principal Occupations During the Past Five Years	Other Directorships During the Past Five Years ^(j)
INTERESTED TRUSTEE
Michael W. Roberge ^(k) (age 56)	Trustee	January 2021	136	Massachusetts Financial Services Company, Chairman (since January 2021); Chief Executive Officer (since January 2017); Director; Chairman of the Board (since January 2022); President (until December 2018); Chief Investment Officer (until December 2018)	N/A
INDEPENDENT TRUSTEES
John P. Kavanaugh (age 68)	Trustee and Chair of Trustees	January 2009	136	Private investor	N/A
Steven E. Buller (age 71)	Trustee	February 2014	136	Private investor	N/A
John A. Caroselli (age 68)	Trustee	March 2017	136	Private investor; JC Global Advisors, LLC (management consulting), President (since 2015)	N/A
Maureen R. Goldfarb (age 67)	Trustee	January 2009	136	Private investor	N/A
Peter D. Jones (age 67)	Trustee	January 2019	136	Private investor	N/A
James W. Kilman, Jr. (age 61)	Trustee	January 2019	136	Burford Capital Limited (finance and investment management), Senior Advisor (since May 3, 2021), Chief Financial Officer (2019 - May 2, 2021); KielStrand Capital LLC (family office), Chief Executive Officer (since 2016)	Alpha-En Corporation, Director (2016-2019)
Clarence Otis, Jr. (age 66)	Trustee	March 2017	136	Private investor	VF Corporation, Director; Verizon Communications, Inc., Director; The Travelers Companies, Director
Maryanne L. Roepke (age 66)	Trustee	May 2014	136	Private investor	N/A
Laurie J. Thomsen (age 65)	Trustee	March 2005	136	Private investor	The Travelers Companies, Director; Dycom Industries, Inc., Director

Table of Contents

MFS New Discovery Value Portfolio

Trustees and Officers - continued

Name, Age	Position(s) Held with Fund	Trustee/Officer Since^(h)	Number of MFS Funds for which the Person is an Officer	Principal Occupations During the Past Five Years
OFFICERS
Christopher R. Bohane ^(k) (age 49)	Assistant Secretary and Assistant Clerk	July 2005	136	Massachusetts Financial Services Company, Senior Vice President and Senior Managing Counsel
Kino Clark ^(k) (age 54)	Assistant Treasurer	January 2012	136	Massachusetts Financial Services Company, Vice President
John W. Clark, Jr. ^(k) (age 55)	Assistant Treasurer	April 2017	136	Massachusetts Financial Services Company, Vice President
David L. DiLorenzo ^(k) (age 54)	President	July 2005	136	Massachusetts Financial Services Company, Senior Vice President
Heidi W. Hardin ^(k) (age 55)	Secretary and Clerk	April 2017	136	Massachusetts Financial Services Company, Executive Vice President and General Counsel
Brian E. Langenfeld ^(k) (age 49)	Assistant Secretary and Assistant Clerk	June 2006	136	Massachusetts Financial Services Company, Vice President and Managing Counsel
Rosa E. Licea-Mailloux ^(k) (age 46)	Chief Compliance Officer	March 2022	136	Massachusetts Financial Services Company, Vice President (since 2018); Director of Corporate Compliance (2018-2021), Senior Director Compliance (2021-2022), Senior Managing Director of North American Compliance & Chief Compliance Officer (since March 2022); Natixis Investment Managers (investment management), Funds Chief Compliance Officer, Deputy General Counsel & Senior Vice President (until 2018)
Amanda S. Mooradian ^(k) (age 43)	Assistant Secretary and Assistant Clerk	September 2018	136	Massachusetts Financial Services Company, Assistant Vice President and Senior Counsel
Susan A. Pereira ^(k) (age 52)	Assistant Secretary and Assistant Clerk	July 2005	136	Massachusetts Financial Services Company, Vice President and Managing Counsel
Kasey L. Phillips ^(k) (age 52)	Assistant Treasurer	September 2012	136	Massachusetts Financial Services Company, Vice President
Matthew A. Stowe ^(k) (age 48)	Assistant Secretary and Assistant Clerk	October 2014	136	Massachusetts Financial Services Company, Vice President and Senior Managing Counsel
William B. Wilson ^(k) (age 40)	Assistant Secretary and Assistant Clerk	October 2022	136	Massachusetts Financial Services Company, Assistant Vice President and Counsel
James O. Yost ^(k) (age 62)	Treasurer	September 1990	136	Massachusetts Financial Services Company, Senior Vice President

(h)	Date first appointed to serve as Trustee/Officer of an MFS Fund. Each Trustee has served continuously since appointment unless indicated otherwise. From January 2012 through December 2016, Messrs. DiLorenzo and Yost served as Treasurer and Deputy Treasurer of the Funds, respectively.

(j)	Directorships or trusteeships of companies required to report to the Securities and Exchange Commission (i.e., “public companies”).

(k)

Table of Contents

MFS New Discovery Value Portfolio

Trustees and Officers - continued

Messrs. Buller, Kilman and Otis and Ms. Roepke are members of the Trust’s Audit Committee.

Each of the Interested Trustees and certain Officers hold comparable officer positions with certain affiliates of MFS.

The Statement of Additional Information for a Fund includes further information about the Trustees and is available without charge upon request by calling 1-800-225-2606.

Investment Adviser	Custodian
Massachusetts Financial Services Company 111 Huntington Avenue Boston, MA 02199-7618	State Street Bank and Trust Company 1 Lincoln Street Boston, MA 02111-2900

Distributor	Independent Registered Public Accounting Firm
MFS Fund Distributors, Inc. 111 Huntington Avenue Boston, MA 02199-7618	Deloitte & Touche LLP 200 Berkeley Street Boston, MA 02116

Portfolio Manager(s)
Richard Offen Kevin Schmitz

Table of Contents

MFS New Discovery Value Portfolio

Board Review of Investment Advisory Agreement

MFS New Discovery Value Portfolio

In connection with their contract review meetings, the Trustees received and relied upon materials that included, among other items: (i) information provided by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent third party, on the investment performance of the Fund for various time periods ended December 31, 2021 and the investment performance of a group of funds with substantially similar investment classifications/objectives (the “Broadridge performance universe”), (ii) information provided by Broadridge on the Fund’s advisory fees and other expenses and the advisory fees and other expenses of comparable funds identified by Broadridge as well as all other funds in the same investment classification/category (the “Broadridge expense group and universe”), (iii) information provided by MFS on the advisory fees of portfolios of other clients of MFS, including institutional separate accounts and other clients, (iv) information as to whether and to what extent applicable expense waivers, reimbursements or fee “breakpoints” are observed for the Fund, (v) information regarding MFS’ financial results and financial condition, including MFS’ and certain of its affiliates’ estimated profitability from services performed for the Fund and the MFS Funds as a whole, and compared to MFS’ institutional business, (vi) MFS’ views regarding the outlook for the mutual fund industry and the strategic business plans of MFS, (vii) descriptions of various functions performed by MFS for the Funds, such as compliance monitoring and portfolio trading practices, and (viii) information regarding the overall organization of MFS, including information about MFS’ senior management and other personnel providing investment advisory, administrative and other services to the Fund and the other MFS Funds. The comparative performance, fee and expense information prepared and provided by Broadridge was not independently verified and the independent Trustees did not independently verify any information provided to them by MFS.

Based on information provided by Broadridge and MFS, the Trustees reviewed the Fund’s total return investment performance as well as the Broadridge performance universe over various time periods. The Trustees placed particular emphasis on the total return performance of the Fund’s Initial Class shares in comparison to the performance of funds in its Broadridge performance universe over the five-year period ended December 31, 2021, which the Trustees believed was a long enough period to reflect differing market conditions. The total return performance of the Fund’s Initial Class shares was in the 1st quintile relative to the other funds in the universe for this five-year period (the 1st quintile being the best performers and the 5th quintile being the worst performers). The total return performance of the Fund’s Initial Class shares was in the 2nd quintile for the one-year period and the 1st quintile for the three-year period ended December 31, 2021 relative to the Broadridge performance universe. Because of the passage of time, these performance results may differ from the performance results for more recent periods, including those shown elsewhere in this report.

Table of Contents

MFS New Discovery Value Portfolio

Board Review of Investment Advisory Agreement - continued

In assessing the reasonableness of the Fund’s advisory fee, the Trustees considered, among other information, the Fund’s advisory fee and the total expense ratio of the Fund’s Initial Class shares as a percentage of average daily net assets and the advisory fee and total expense ratios of the Broadridge expense group based on information provided by Broadridge. The Trustees considered that MFS currently observes an expense limitation for the Fund, which may not be changed without the Trustees’ approval. The Trustees also considered that, according to the data provided by Broadridge (which takes into account any fee reductions or expense limitations that were in effect during the Fund’s last fiscal year), the Fund’s effective advisory fee rate was approximately at the Broadridge expense group median and the Fund’s total expense ratio was higher than the Broadridge expense group median.

The Trustees also considered whether the Fund may benefit from any economies of scale in the management of the Fund in the event of growth in assets of the Fund and/or growth in assets of the MFS Funds as a whole. They noted that the Fund’s advisory fee rate schedule is subject to a contractual breakpoint that reduces the Fund’s advisory fee rate on average daily net assets over $250 million. The Trustees also noted that MFS has agreed in writing to waive a portion of the management fees of certain MFS Funds, including the Fund, if the total combined assets of certain funds within the MFS Funds’ complex increase above agreed upon thresholds (the “group fee waiver”), enabling the Fund’s shareholders to share in the benefits from any economies of scale at the complex level. The group fee waiver is reviewed and renewed annually between the Board and MFS. The Trustees concluded that the breakpoint and the group fee waiver were sufficient to allow the Fund to benefit from economies of scale as its assets and overall complex assets grow.

The Trustees also considered the nature, quality, cost, and extent of administrative, transfer agency, and distribution services provided to the Fund by MFS and its affiliates under agreements and plans other than the investment advisory agreement, including any 12b-1 fees the Fund pays to MFS Fund Distributors, Inc., an affiliate of MFS. The Trustees also considered the nature, extent and quality of certain other services MFS performs or arranges for on the Fund’s behalf, which may include securities lending programs, directed expense payment programs, class action recovery programs, and MFS’ interaction with third-party service providers, principally custodians and sub-custodians. The Trustees concluded that the various non-advisory services provided by MFS and its affiliates on behalf of the Fund were satisfactory.

Table of Contents

MFS New Discovery Value Portfolio

Proxy Voting Policies and Information

Quarterly Portfolio Disclosure

FURTHER INFORMATION

Information About Fund Contracts and Legal Claims

Federal Tax Information (unaudited)

The following information is provided pursuant to provisions of the Internal Revenue Code.

The fund designates $6,625,000 as capital gain dividends paid during the fiscal year.

For corporate shareholders, 11.98% of the ordinary income dividends paid during the fiscal year qualify for the corporate dividends received deduction.

Table of Contents

rev. 3/16

FACTS

WHAT DOES MFS DO WITH YOUR PERSONAL INFORMATION?

Why?

What?	The types of personal information we collect and share depend on the product or service you have with us. This information can include:
	• Social Security number and account balances
	• Account transactions and transaction history
	• Checking account information and wire transfer instructions
	When you are no longer our customer, we continue to share your information as described in this notice.

How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MFS chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information	Does MFS share?	Can you limit this sharing?
For our everyday business purposes – such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes – to offer our products and services to you	No	We don't share
For joint marketing with other financial companies	No	We don't share
For our affiliates' everyday business purposes – information about your transactions and experiences	No	We don't share
For our affiliates' everyday business purposes – information about your creditworthiness	No	We don't share
For nonaffiliates to market to you	No	We don't share

Questions?

Call 800-225-2606 or go to mfs.com.

Table of Contents

Page 2

Who we are
Who is providing this notice?	MFS Funds, MFS Investment Management, MFS Institutional Advisors, Inc., and MFS Heritage Trust Company.

What we do
How does MFS protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include procedural, electronic, and physical safeguards for the protection of the personal information we collect about you.
How does MFS collect my personal information?	We collect your personal information, for example, when you
	• open an account or provide account information
	• direct us to buy securities or direct us to sell your securities
	• make a wire transfer
	We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?	Federal law gives you the right to limit only
	• sharing for affiliates' everyday business purposes – information about your creditworthiness
	• affiliates from using your information to market to you
	• sharing for nonaffiliates to market to you
	State laws and individual companies may give you additional rights to limit sharing.

Definitions
Affiliates	Companies related by common ownership or control. They can be financial and nonfinancial companies.
	• MFS does not share personal information with affiliates, except for everyday business purposes as described on page one of this notice.
Nonaffiliates	Companies not related by common ownership or control. They can be financial and nonfinancial companies.
	• MFS does not share with nonaffiliates so they can market to you.
Joint marketing	A formal agreement between nonaffiliated financial companies that together market financial products or services to you.
	• MFS doesn't jointly market.

Other important information

If you own an MFS product or receive an MFS service in the name of a third party such as a bank or broker-dealer, their privacy policy may apply to you instead of ours.

Table of Contents

Item 1(b):

Not applicable.

ITEM 2. CODE OF ETHICS.

The Registrant has adopted a Code of Ethics (the "Code") pursuant to Section 406 of the Sarbanes-Oxley Act and as defined in Form N-CSR that applies to the Registrant's principal executive officer and principal financial and accounting officer. During the period covered by this report, the Registrant has not amended any provision in the Code that relates to an element of the Code's definition enumerated in paragraph

(b)of Item 2 of this Form N-CSR. During the period covered by this report, the Registrant did not grant a waiver, including an implicit waiver, from any provision of the Code.

A copy of the Code is attached hereto as EX-99.COE.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

Messrs. Steven E. Buller, James Kilman, and Clarence Otis, Jr. and Ms. Maryanne L. Roepke, members of the Audit Committee, have been determined by the Board of Trustees in their reasonable business judgment to meet the definition of "audit committee financial expert" as such term is defined in Form N-CSR. In addition, Messrs. Buller, Kilman, and Otis and Ms. Roepke are "independent" members of the Audit Committee (as such term has been defined by the Securities and Exchange Commission in regulations implementing Section 407 of the Sarbanes-Oxley Act of 2002). The Securities and Exchange Commission has stated that the designation of a person as an audit committee financial expert pursuant to this Item 3 on the Form N-CSR does not impose on such a person any duties, obligations or liability that are greater than the duties, obligations or liability imposed on such person as a member of the Audit Committee and the Board of Trustees in the absence of such designation or identification.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Items 4(a) through 4(d) and 4(g):

The Board of Trustees has appointed Deloitte & Touche LLP ("Deloitte") to serve as independent accountants to the Registrant (hereinafter the "Registrant" or the "Fund"). The tables below set forth the audit fees billed to the Fund as well as fees for non-audit services provided to the Fund and/or to the Fund's investment adviser, Massachusetts Financial Services Company ("MFS"), and to various entities either controlling, controlled by, or under common control with MFS that provide ongoing services to the Fund ("MFS Related Entities").

For the fiscal years ended December 31, 2022 and 2021, audit fees billed to the Fund by Deloitte were as follows:

Fees billed by Deloitte:		Audit Fees
	2022		2021
MFS Blended Research Small Cap Equity Portfolio	49,786		47,153
MFS Conservative Allocation Portfolio	33,949		32,128
MFS Global Real Estate Portfolio	50,843		48,156
MFS Growth Allocation Portfolio	33,949		32,128
MFS Inflation-Adjusted Bond Portfolio	39,157		37,069
MFS Limited Maturity Portfolio	62,285		59,012
MFS Mid Cap Value Portfolio	51,303		48,593
MFS Moderate Allocation Portfolio	33,949		32,128
MFS New Discovery Value Portfolio	49,786		47,153
Total	405,007		383,520

For the fiscal years ended December 31, 2022 and 2021, fees billed by Deloitte for audit-related, tax and other services provided to each Fund and for audit-related, tax and other services provided to MFS and MFS Related Entities were as follows:

Fees billed by Deloitte:		Audit-Related Fees1				Tax Fees2			All Other Fees3
	2022		2021		2022		20214		2022	2021
To MFS Blended Research Small	2,400		2,400		0		710		0	0
Cap Equity Portfolio	2,400		2,400		0		710		0	0
Cap Equity Portfolio
To MFS Conservative Allocation	2,400		2,400		0		710		0	0
Portfolio	2,400		2,400		0		710		0	0
Portfolio
To MFS Global Real Estate	2,400		2,400		0		745		0	0
Portfolio	2,400		2,400		0		745		0	0
Portfolio
To MFS Growth Allocation	2,400		2,400		0		710		0	0
Portfolio	2,400		2,400		0		710		0	0
Portfolio
To MFS Inflation-Adjusted Bond	2,400		2,400		0		658		0	0
Portfolio	2,400		2,400		0		658		0	0
Portfolio
To MFS Limited Maturity	2,400		2,400		0		710		0	0
Portfolio	2,400		2,400		0		710		0	0
Portfolio
To MFS Mid Cap Value Portfolio	2,400		2,400		0		710		0	0

To MFS Moderate Allocation	2,400		2,400		0		710		0	0
Portfolio	2,400		2,400		0		710		0	0
Portfolio
To MFS New Discovery Value	2,400		2,400		0		710		0	0
Portfolio	2,400		2,400		0		710		0	0
Portfolio
Total fees billed by Deloitte	21,600		21,600		0		6,373		0	0
To above Funds:

Fees billed by Deloitte:		Audit-Related Fees1				Tax Fees2			All Other Fees3
		2022		2021		2022		2021	2022	2021

To MFS and MFS Related Entities		0		0		0		0	3,790	5,390
of MFS Blended Research Small
Cap Equity Portfolio*
To MFS and MFS Related Entities		0		0		0		0	3,790	5,390
of MFS Conservative Allocation
Portfolio*
To MFS and MFS Related Entities		0		0		0		0	3,790	5,390
of MFS Global Real Estate
Portfolio*
To MFS and MFS Related Entities		0		0		0		0	3,790	5,390
of MFS Growth Allocation
Portfolio*

To MFS and MFS Related Entities	0	0	0	0	3,790	5,390
of MFS Inflation-Adjusted Bond
Portfolio*
To MFS and MFS Related Entities	0	0	0	0	3,790	5,390
of MFS Limited Maturity
Portfolio*
To MFS and MFS Related Entities	0	0	0	0	3,790	5,390
of MFS Mid Cap Value Portfolio*
To MFS and MFS Related Entities	0	0	0	0	3,790	5,390
of MFS Moderate Allocation
Portfolio*
To MFS and MFS Related Entities	0	0	0	0	3,790	5,390
of MFS New Discovery Value
Portfolio*

Fees billed by Deloitte:			Aggregate fees for non-audit services:
				2022		20214
To MFS Blended Research Small Cap Equity Portfolio, MFS and				6,190		8,500
MFS Related Entities#				6,190		8,500
To MFS Conservative Allocation Portfolio, MFS and MFS Related				6,190		8,500
Entities#				6,190		8,500
To MFS Global Real Estate Portfolio, MFS and MFS Related				6,190		8,535
Entities#				6,190		8,535
To MFS Growth Allocation Portfolio, MFS and MFS Related				6,190		8,500
Entities#				6,190		8,500
To MFS Inflation-Adjusted Bond Portfolio, MFS and MFS Related				6,190		8,448
Entities#				6,190		8,448
To MFS Limited Maturity Portfolio, MFS and MFS Related				6,190		8,500
Entities#				6,190		8,500
To MFS Mid Cap Value Portfolio, MFS and MFS Related Entities#				6,190		8,500
To MFS Moderate Allocation Portfolio, MFS and MFS Related				6,190		8,500
Entities#				6,190		8,500
To MFS New Discovery Value Portfolio, MFS and MFS Related				6,190		8,500
Entities#				6,190		8,500

*This amount reflects the fees billed to MFS and MFS Related Entities for non-audit services relating directly to the operations and financial reporting of the Fund (portions of which services also related to the operations and financial reporting of other funds within the MFS Funds complex).

# This amount reflects the aggregate fees billed by Deloitte for non-audit services rendered to the Fund and for non-audit services rendered to MFS and the MFS Related Entities.

1 The fees included under "Audit-Related Fees" are fees related to assurance and related services that are reasonably related to the performance of the audit or review of financial statements, but not reported under ''Audit Fees,'' including accounting consultations, agreed- upon procedure reports, attestation reports, comfort letters and internal control reviews.

2 The fees included under "Tax Fees" are fees associated with tax compliance, tax advice and tax planning, including services relating to the filing or amendment of federal, state or local income tax returns, regulated investment company qualification reviews and tax distribution and analysis.

3 The fees included under "All Other Fees" are fees for products and services provided by Deloitte other than those reported under "Audit Fees," "Audit-Related Fees" and "Tax Fees".

4 Certain fees reported in 2021 have been restated in this filing from those reported in the Registrant's filing for the reporting period ended December 31, 2021.

Item 4(e)(1):

Set forth below are the policies and procedures established by the Audit Committee of the Board of Trustees relating to the pre-approval of audit and non-audit related services:

To the extent required by applicable law, pre-approval by the Audit Committee of the Board is needed for all audit and permissible non-audit services rendered to the Fund and all permissible non-audit services rendered to MFS or MFS Related Entities if the services relate directly to the operations and financial reporting of the Registrant. Pre-approval is currently on an engagement-by-engagement basis. In the event pre- approval of such services is necessary between regular meetings of the Audit Committee and it is not practical to wait to seek pre-approval at the next regular meeting of the Audit Committee, pre-approval of such services may be referred to the Chair of the Audit Committee for approval; provided that the Chair may not pre-approve any individual engagement for such services exceeding $50,000 or multiple engagements for such services in the aggregate exceeding $100,000 between such regular meetings of the Audit Committee. Any engagement pre-approved by the Chair between regular meetings of the Audit Committee shall be presented for ratification by the entire Audit Committee at its next regularly scheduled meeting.

Item 4(e)(2):

None, or 0%, of the services relating to the Audit-Related Fees, Tax Fees and All Other Fees paid by the Fund and MFS and MFS Related Entities relating directly to the operations and financial reporting of the Registrant disclosed above were approved by the audit committee pursuant to paragraphs (c)(7)(i)(C) of Rule 2-01 of Regulation S-X (which permits audit committee approval after the start of the engagement with respect to services other than audit, review or attest services, if certain conditions are satisfied).

Item 4(f):

Not applicable.

Item 4(h):

The Registrant's Audit Committee has considered whether the provision by a Registrant's independent registered public accounting firm of non-audit services to MFS and MFS Related Entities that were not pre-approved by the Committee (because such services were provided prior to the effectiveness of SEC rules requiring pre-approval or because such services did not relate directly to the operations and financial reporting of the Registrant) was compatible with maintaining the independence of the independent registered public accounting firm as the Registrant's principal auditors.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

Not applicable to the Registrant.

ITEM 6. INVESTMENTS

A schedule of investments for each series covered by this Form N-CSR is included as part of the report to shareholders of such series under Item 1(a) of this Form N-CSR.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable to the Registrant.

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable to the Registrant.

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

Not applicable to the Registrant.

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

There were no material changes to the procedures by which shareholders may send recommendations to the Board for nominees to the Registrant's Board since the Registrant last provided disclosure as to such procedures in response to the requirements of Item 407 (c)(2)(iv) of Regulation S-K or this Item.

ITEM 11. CONTROLS AND PROCEDURES.

(a)Based upon their evaluation of the effectiveness of the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the "Act")) as conducted within 90 days of the filing date of this report on Form N-CSR, the Registrant's principal financial officer and principal executive officer have concluded that those disclosure controls and procedures provide reasonable assurance that the material information required to be disclosed by the Registrant on this report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.

(b)There were no changes in the Registrant's internal controls over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the period covered by the report that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting.

ITEM 12. DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable to the Registrant.

ITEM 13. EXHIBITS.

(a)(1) Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit: Attached hereto as EX-99.COE.

(2)A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2): Attached hereto as EX-99.302CERT.

(3)Any written solicitation to purchase securities under Rule 23c-1 under the Act (17 CFR 270.23c-1) sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable.

(4)Change in the registrant's independent public accountant. Not applicable.

(b)If the report is filed under Section 13(a) or 15(d) of the Exchange Act, provide the certifications required by Rule 30a-2(b) under the Act (17 CFR 270.30a-2(b)), Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR 240.13a-14(b) or 240.15d-14(b)) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished pursuant to this paragraph will not be deemed "filed" for the purposes of Section 18 of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference. Attached hereto as EX-99.906CERT.

Notice

Notice is hereby given that this instrument is executed on behalf of the Registrant by an officer of the Registrant as an officer and not individually and the obligations of or arising out of this instrument are not binding upon any of the Trustees or shareholders individually, but are binding only upon the assets and property of the respective constituent series of the Registrant.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant) MFS VARIABLE INSURANCE TRUST III

By (Signature and Title)*

/S/ DAVID L. DILORENZO

David L. DiLorenzo, President

Date: February 15, 2023

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By (Signature and Title)*

/S/ DAVID L. DILORENZO

David L. DiLorenzo, President (Principal Executive Officer)

Date: February 15, 2023

By (Signature and Title)*

/S/ JAMES O. YOST

James O. Yost, Treasurer (Principal Financial Officer and Accounting Officer) Date: February 15, 2023

* Print name and title of each signing officer under his or her signature.

Letter from the Chair and CEO	1
Portfolio composition	2
Management review	3
Performance summary	5
Expense table	7
Portfolio of investments	8
Statement of assets and liabilities	9
Statement of operations	10
Statements of changes in net assets	11
Financial highlights	12
Notes to financial statements	14
Report of independent registered public accounting firm	21
Trustees and officers	22
Board review of investment advisory agreement	25
Proxy voting policies and information	27
Quarterly portfolio disclosure	27
Further information	27
Information about fund contracts and legal claims	27
Federal tax information	27
MFS^® privacy notice	28

Letter from the Chair and CEO	1
Portfolio composition	2
Management review	3
Performance summary	5
Expense table	7
Portfolio of investments	8
Statement of assets and liabilities	14
Statement of operations	15
Statements of changes in net assets	16
Financial highlights	17
Notes to financial statements	19
Report of independent registered public accounting firm	25
Trustees and officers	26
Board review of investment advisory agreement	29
Proxy voting policies and information	31
Quarterly portfolio disclosure	31
Further information	31
Information about fund contracts and legal claims	31
Federal tax information	31
MFS^® privacy notice	32

MFS Variable Insurance Trust Iii N-CSRCertified annual shareholder report (management investment company)