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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 811-4096
MFS MUNICIPAL SERIES TRUST
(Exact name of registrant as specified in charter)
500 Boylston Street, Boston, Massachusetts 02116
(Address of principal executive offices) (Zip code)
Susan S. Newton
Massachusetts Financial Services Company
500 Boylston Street
Boston, Massachusetts 02116
(Name and address of agents for service)
Registrant’s telephone number, including area code: (617) 954-5000
Date of fiscal year end: March 31
Date of reporting period: March 31, 2010
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| ITEM 1. | REPORTS TO STOCKHOLDERS. |
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Alabama, Arkansas, California, Florida, Georgia, Maryland and Massachusetts
| CONTACT INFORMATION | BACK COVER |
SIPC Contact Information: You may obtain information about the Securities Investor Protection Corporation (“SIPC”), including the SIPC Brochure, by contacting SIPC either by telephone (202-371-8300) or by accessing SIPC’s website address (www.sipc.org).
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 GUARANTEE
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Dear Shareholders:
After having suffered their biggest declines since the Great Depression, most global markets experienced an impressive resurgence during the latter months of 2009 and the first quarter of 2010. The global economy was able to reap the benefits of two major trends. The first of these was the massive efforts of governments and central banks to increase liquidity in the financial system as they sought to prevent the credit crisis from further affecting the banking system. The second was the move by companies around the world to cut costs and operations to prepare for rapidly changing market conditions. We believe that these moves not only shortened the length of the downturn but also set the stage for the recovery we are seeing today.
Even with the significant market gains of 2009 and the early part of 2010, the recovery is unrolling at a moderate pace, with rebounds in the manufacturing sector and corporate America leading the way. Central bankers are proceeding with caution and have held benchmark interest rates unchanged as they debate the best way to withdraw stimulus measures without disrupting the fragile growth process.
While hurdles remain, we believe that the global economy is on the road to recovery. As always, we continue to be mindful of the many challenges faced at the individual, national, and international levels. It is at times such as these that we want to remind investors of the merits of maintaining a long-term view, adhering to basic investing principles such as asset allocation and diversification, and working closely with advisors to identify and research investment opportunities. At MFS®, we take particular pride in how well mutual funds can help investors by providing the diversification that is important in any type of market climate.
Respectfully,
Robert J. Manning
Chief Executive Officer and Chief Investment Officer
MFS Investment Management®
May 17, 2010
The opinions expressed in this letter are subject to change, may not be relied upon for investment advice, and no forecasts can be guaranteed.
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MFS® Alabama Municipal Bond Fund
Portfolio structure (i)
| Top five industries (i) | ||
| Water & Sewer Utility Revenue | 19.5% | |
| Healthcare Revenue – Hospitals | 16.9% | |
| Universities – Colleges | 16.8% | |
| General Obligations – Schools | 8.6% | |
| State & Local Agencies | 8.3% | |
| Credit quality (a)(i) | ||
| AAA | 5.8% | |
| AA | 46.3% | |
| A | 17.9% | |
| BBB | 13.1% | |
| BB | 6.2% | |
| B | 0.4% | |
| Other | 10.3% | |
| Portfolio facts (i) | ||
| Average Duration (d) | 9.4 | |
| Average Effective Maturity (m) | 19.2 yrs. | |
MFS® Arkansas Municipal Bond Fund
Portfolio structure (i)
| Top five industries (i) | ||
| Universities – College | 20.7% | |
| Healthcare Revenue – Hospitals | 12.7% | |
| Water & Sewer Utility Revenue | 12.2% | |
| General Obligations – General Purpose | 8.7% | |
| Utilities – Municipal Owned | 7.6% | |
| Credit quality (a)(i) | ||
| AAA | 13.4% | |
| AA | 37.5% | |
| A | 18.5% | |
| BBB | 23.1% | |
| BB | 0.4% | |
| B | 0.5% | |
| CCC | 0.6% | |
| Other | 6.0% | |
| Portfolio facts (i) | ||
| Average Duration (d) | 9.3 | |
| Average Effective Maturity (m) | 18.3 yrs. | |
MFS® California Municipal Bond Fund
Portfolio structure (i)
| Top five industries (i) | ||
| Healthcare Revenue – Hospitals | 18.3% | |
| General Obligations – Schools | 17.7% | |
| State & Local Agencies | 13.6% | |
| Universities – Colleges | 8.3% | |
| Water & Sewer Utility Revenue | 7.5% | |
| Credit quality (a)(i) | ||
| AAA | 3.1% | |
| AA | 30.9% | |
| A | 36.0% | |
| BBB | 24.2% | |
| BB | 1.2% | |
| B | 0.4% | |
| C (o) | 0.0% | |
| Other | 4.2% | |
| Portfolio facts (i) | ||
| Average Duration (d) | 10.3 | |
| Average Effective Maturity (m) | 20.3 yrs. | |
| (a) | Included in the rating categories are: debt securities, primary inverse floaters, and the underlying bonds of non-primary inverse floaters which have long-term public ratings; All rated securities are assigned a rating in accordance with the following ratings hierarchy: If a security is rated by Moody’s, then that rating is used; if not rated by Moody’s, then a Standard & Poor’s rating is used; if not rated by S&P, then a Fitch rating is used. Ratings are shown in the S&P scale and are subject to change. Assets not included in the rated securities categories are included in the “Other” category and include treasury bond futures, unrated securities, cash and cash equivalents. |
| (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. |
| (i) | For purposes of this presentation, the components include the market value of securities, and reflect the impact of the equivalent exposure of derivative positions, if applicable. These amounts may be negative from time to time. The bond component will include any accrued interest amounts, if applicable. 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 market value. |
| (m) | In determining an 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%. |
Percentages are based on net assets as of 3/31/10, unless otherwise noted.
The portfolio is actively managed and current holdings may be different.
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Portfolio Composition – continued
MFS® Florida Municipal Bond Fund
Portfolio structure (i)
| Top five industries (i) | ||
| Healthcare Revenue – Hospitals | 22.3% | |
| Water & Sewer Utility Revenue | 17.0% | |
| General Obligations – Schools | 7.8% | |
| Universities – Colleges | 6.9% | |
| Airport & Port Revenue | 6.9% | |
| Credit quality (a)(i) | ||
| AAA | 1.8% | |
| AA | 35.1% | |
| A | 28.3% | |
| BBB | 24.0% | |
| BB | 0.9% | |
| B | 0.4% | |
| Other | 9.5% | |
| Portfolio facts (i) | ||
| Average Duration (d) | 8.1 | |
| Average Effective Maturity (m) | 16.6 yrs. | |
MFS® Georgia Municipal Bond Fund
Portfolio structure (i)
| Top five industries (i) | ||
| Universities – Colleges | 21.4% | |
| Water & Sewer Utility Revenue | 19.0% | |
| Healthcare Revenue – Hospitals | 12.3% | |
| State & Agency – Other | 6.8% | |
| Utilities – Municipal Owned | 5.7% | |
| Credit quality (a)(i) | ||
| AAA | 8.8% | |
| AA | 44.6% | |
| A | 28.6% | |
| BBB | 13.3% | |
| BB | 1.1% | |
| B | 0.5% | |
| Other | 3.1% | |
| Portfolio facts (i) | ||
| Average Duration (d) | 9.5 | |
| Average Effective Maturity (m) | 19.3 yrs. | |
MFS® Maryland Municipal Bond Fund
Portfolio structure (i)
| Top five industries (i) | ||
| Healthcare Revenue – Hospitals | 25.3% | |
| General Obligations – General Purpose | 12.1% | |
| Universities – Colleges | 11.5% | |
| Water & Sewer Utility Revenue | 7.6% | |
| Single Family Housing – State | 4.5% | |
| Credit quality (a)(i) | ||
| AAA | 12.2% | |
| AA | 24.1% | |
| A | 27.4% | |
| BBB | 25.8% | |
| BB | 5.3% | |
| B | 0.1% | |
| Other | 5.1% | |
| Portfolio facts (i) | ||
| Average Duration (d) | 9.4 | |
| Average Effective Maturity (m) | 18.4 yrs. | |
| (a) | Included in the rating categories are: debt securities, primary inverse floaters, and the underlying bonds of non-primary inverse floaters which have long-term public ratings; All rated securities are assigned a rating in accordance with the following ratings hierarchy: If a security is rated by Moody’s, then that rating is used; if not rated by Moody’s, then a Standard & Poor’s rating is used; if not rated by S&P, then a Fitch rating is used. Ratings are shown in the S&P scale and are subject to change. Assets not included in the rated securities categories are included in the “Other” category and include treasury bond futures, unrated securities, cash and cash equivalents. |
| (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. |
| (i) | For purposes of this presentation, the components include the market value of securities, and reflect the impact of the equivalent exposure of derivative positions, if applicable. These amounts may be negative from time to time. The bond component will include any accrued interest amounts, if applicable. 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 market value. |
| (m) | In determining an 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. |
Percentages are based on net assets as of 3/31/10, unless otherwise noted.
The portfolio is actively managed and current holdings may be different.
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Portfolio Composition – continued
MFS® Massachusetts Municipal Bond Fund
Portfolio structure (i)
| Top five industries (i) | ||
| Universities – Colleges | 22.4% | |
| Healthcare Revenue – Hospitals | 17.1% | |
| Sales & Excise Tax Revenue | 8.0% | |
| General Obligations – General Purpose | 7.4% | |
| Water & Sewer Utility Revenue | 6.3% | |
| Credit quality (a)(i) | ||
| AAA | 7.8% | |
| AA | 39.7% | |
| A | 25.5% | |
| BBB | 21.1% | |
| BB | 1.1% | |
| B | 0.5% | |
| Other | 4.3% | |
| Portfolio facts (i) | ||
| Average Duration (d) | 9.9 | |
| Average Effective Maturity (m) | 19.2 yrs. | |
| (a) | Included in the rating categories are: debt securities, primary inverse floaters, and the underlying bonds of non-primary inverse floaters which have long-term public ratings; All rated securities are assigned a rating in accordance with the following ratings hierarchy: If a security is rated by Moody’s, then that rating is used; if not rated by Moody’s, then a Standard & Poor’s rating is used; if not rated by S&P, then a Fitch rating is used. Ratings are shown in the S&P scale and are subject to change. Assets not included in the rated securities categories are included in the “Other” category and include treasury bond futures, unrated securities, cash and cash equivalents. |
| (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. |
| (i) | For purposes of this presentation, the components include the market value of securities, and reflect the impact of the equivalent exposure of derivative positions, if applicable. These amounts may be negative from time to time. The bond component will include any accrued interest amounts, if applicable. 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 market value. |
| (m) | In determining an 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. |
Percentages are based on net assets as of 3/31/10, unless otherwise noted.
The portfolio is actively managed and current holdings may be different.
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Summary of Results
During the reporting period, Class A shares of the Alabama, Arkansas, California, Florida, Georgia, Maryland, and Massachusetts funds, at net asset value, all outperformed the Barclays Capital Municipal Bond Index. For detailed performance information, please see the Performance Summary section of this report.
Market Environment
After having suffered through one of the largest and most concentrated downturns since the 1930s, most asset markets staged a remarkable rebound during the reporting period. Just prior to the beginning of the period, the fallout from a series of tumultuous financial events pushed global equity and credit markets to their lowest points during the crisis. Not only did Europe and Japan fall into very deep recessions, but an increasingly powerful engine of global growth – emerging markets – also contracted almost across the board. The subsequent recovery in global activity has been similarly synchronized, led importantly by emerging Asian economies, but broadening to include most of the global economy to varying degrees. Primary drivers of the recovery included an unwinding of the inventory destocking that took place earlier, as well as massive fiscal and monetary stimulus.
During the early part of the reporting period, with the policy rate having been cut almost to 0%, the Fed continued to use its new lending facilities to alleviate ever-tightening credit markets. On the fiscal front, the U.S. Treasury designed and began implementing a massive fiscal stimulus package. As inflationary concerns diminished in the face of global deleveraging and equity and credit markets deteriorated more sharply, central banks around the world also cut interest rates dramatically. Early in the period, as several central banks had already approached their lower bound on policy rates, some central banks were implementing quantitative easing as a means to further loosen monetary policy to offset the continuing fall in global economic activity.
However, by the middle of the period, there were ever-broadening signs that the global macroeconomic deterioration had passed, which caused the subsequent rise in asset valuations. As most asset prices rebounded during the period and the demand for liquidity waned, the debate concerning the existence of asset bubbles and the need for monetary exit strategies had begun, creating added uncertainty regarding the forward path of policy rates. Nonetheless, risky-asset valuation generally hit secular highs by the end of the period.
The municipal bond market ended this twelve month period substantially stronger than where it began with high-grade and high-yield bond index prices sharply higher over the previous year. With low money market yields, mutual fund inflows were strong and consistent. Additionally, the Build America Bond program gained significant traction and effectively reduced new issue supply of municipals.
At the end of March, 2009, yields on AAA-rated municipals were 137% of comparable maturity U.S. Treasury yields. While well off from its highs of over 200%, this ratio rallied further throughout the trailing twelve months settling at 89% on March 31, 2010. Additionally, spreads between high-grade municipals and high-yield municipals continued to tighten throughout the year. The highest returns were generally in the lower-rated securities as investors looked broadly to add risk with little opportunity to execute that strategy in the primary market due to limited high yield supply.
Factors Affecting Performance
Allocation of credit quality was a major contributing factor to positive relative performance. For all funds except Georgia, a greater exposure to “BBB” rated (r) and below-investment-grade securities, and the resulting underweighted position in bonds rated higher than “BBB”, boosted relative results. Bonds within the lower-quality sectors outperformed higher-quality issues over the reporting period as investors appeared to be recovering their appetite for risk in an improving economy. The benchmark holds only investment-grade (“BBB” rated and above) securities. For the Georgia fund, it was an overweighted position in “AA” rated bonds that was the key factor that aided relative results.
The funds’ longer duration (d) relative to the benchmark also bolstered relative results as yields generally fell over the reporting period due, in part, to improved economic conditions, stronger cash flows into municipal bond funds, and lower traditional municipal issuance as a result of the higher issuance of tax credit Build America Bonds. The overall effect of the funds’ yield curve (y) positioning was also positive, despite negative effect from lesser exposure to bonds with maturities of 8 to 11 years for the Alabama, Arkansas, California, Georgia, and Maryland funds.
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Management Review – continued
Among industry sectors, health care was a consistent positive contributor to relative performance across all funds. The education sector helped the California, Georgia, Maryland, and Massachusetts funds, and the credit-enhanced sector had a positive impact on the Alabama, Arkansas, and California funds. Several of the funds experienced a negative impact from their lower relative exposure to the tobacco sector. These included the Alabama, Arkansas, Georgia, Maryland, and Massachusetts funds. The California and Florida funds had a greater exposure to the tobacco sector and therefore benefited.
Respectfully,
Michael Dawson
Portfolio Manager
| (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. |
| (r) | Bonds rated “BBB”, “Baa”, or higher are considered investment grade; bonds rated “BB”, “Ba”, or below are considered non-investment grade. The primary source for bond quality ratings is Moody’s Investors Service. If not available, ratings by Standard & Poor’s are used, else ratings by Fitch, Inc. For securities which are not rated by any of the three 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. |
The views expressed in this report are those of the portfolio manager 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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PERFORMANCE SUMMARY THROUGH 3/31/10
The following charts illustrate a representative class of each fund’s historical performance in comparison to its benchmark(s). Performance results include the deduction of the maximum applicable sales charge and reflect the percentage change in net asset value, including reinvestment of dividends and capital gains distributions. Each fund's results have been compared to the Barclays Capital Municipal Bond Index, a market capitalization-weighted index that measures the performance of the tax-exempt bond market. However, while this index is considered the benchmark for the performance of municipal bond funds, it is comprised of municipal bonds issued nationwide, while each of the funds is limited to investing in the bonds of a particular state. The performance of other share classes will be greater than or less than that of the class depicted below. Benchmarks are unmanaged and may not be invested in directly. Benchmark returns do not reflect sales charges, commissions or expenses. (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.
MFS® Alabama Municipal Bond Fund
Growth of a Hypothetical $10,000 Investment
MFS® Alabama Municipal Bond Fund
Total Returns through 3/31/10
Average annual without sales charge
| Share class | Class inception date | 1-yr | 5-yr | 10-yr | ||||||||
| A | 2/01/90 | 12.25% | 4.18% | 5.22% | ||||||||
| B | 9/07/93 | 11.31% | 3.38% | 4.42% | ||||||||
| Comparative benchmark | ||||||||||||
| Barclays Capital Municipal Bond Index (f) | 9.69% | 4.58% | 5.58% | |||||||||
| Average annual with sales charge | ||||||||||||
A With Initial Sales Charge (4.75%) | 6.91% | 3.17% | 4.70% | |||||||||
B With CDSC (Declining over six years from 4% to 0%) (x) | 7.31% | 3.04% | 4.42% | |||||||||
CDSC – Contingent Deferred Sales Charge.
| (f) | Source: FactSet Research Systems Inc. |
| (x) | Assuming redemption at the end of the applicable period. |
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Performance Summary – continued
MFS® Arkansas Municipal Bond Fund
Growth of a Hypothetical $10,000 Investment
MFS® Arkansas Municipal Bond Fund
Total Returns through 3/31/10
Average annual without sales charge
| Share class | Class inception date | 1-yr | 5-yr | 10-yr | ||||||||
| A | 2/03/92 | 10.17% | 4.36% | 5.22% | ||||||||
| B | 9/07/93 | 9.30% | 3.57% | 4.41% | ||||||||
| Comparative benchmark | ||||||||||||
| Barclays Capital Municipal Bond Index (f) | 9.69% | 4.58% | 5.58% | |||||||||
| Average annual with sales charge | ||||||||||||
A With Initial Sales Charge (4.75%) | 4.94% | 3.35% | 4.71% | |||||||||
B With CDSC (Declining over six years from 4% to 0%) (x) | 5.30% | 3.22% | 4.41% | |||||||||
CDSC – Contingent Deferred Sales Charge.
| (f) | Source: FactSet Research Systems Inc. |
| (x) | Assuming redemption at the end of the applicable period. |
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Performance Summary – continued
MFS® California Municipal Bond Fund
Growth of a Hypothetical $10,000 Investment
MFS® California Municipal Bond Fund
Total Returns through 3/31/10
Average annual without sales charge
| Share class | Class inception date | 1-yr | 5-yr | 10-yr | ||||||||
| A | 6/18/85 | 13.11% | 3.64% | 4.99% | ||||||||
| B | 9/07/93 | 12.47% | 2.90% | 4.21% | ||||||||
| C | 1/03/94 | 12.27% | 2.71% | 4.06% | ||||||||
| Comparative benchmark | ||||||||||||
| Barclays Capital Municipal Bond Index (f) | 9.69% | 4.58% | 5.58% | |||||||||
| Average annual with sales charge | ||||||||||||
A With Initial Sales Charge (4.75%) | 7.74% | 2.63% | 4.48% | |||||||||
B With CDSC (Declining over six years from 4% to 0%) (x) | 8.47% | 2.56% | 4.21% | |||||||||
C With CDSC (1% for 12 months) (x) | 11.27% | 2.71% | 4.06% | |||||||||
CDSC – Contingent Deferred Sales Charge.
| (f) | Source: FactSet Research Systems Inc. |
| (x) | Assuming redemption at the end of the applicable period. |
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Performance Summary – continued
MFS® Florida Municipal Bond Fund
Growth of a Hypothetical $10,000 Investment
MFS® Florida Municipal Bond Fund
Total Returns through 3/31/10
Average annual without sales charge
| Share class | Class inception date | 1-yr | 5-yr | 10-yr | ||||||||
| A | 2/03/92 | 12.58% | 3.61% | 4.98% | ||||||||
| B | 9/07/93 | 11.60% | 2.82% | 4.17% | ||||||||
| Comparative benchmark | ||||||||||||
| Barclays Capital Municipal Bond Index (f) | 9.69% | 4.58% | 5.58% | |||||||||
| Average annual with sales charge | ||||||||||||
A With Initial Sales Charge (4.75%) | 7.24% | 2.61% | 4.47% | |||||||||
B With CDSC (Declining over six years from 4% to 0%) (x) | 7.60% | 2.48% | 4.17% | |||||||||
CDSC – Contingent Deferred Sales Charge.
| (f) | Source: FactSet Research Systems Inc. |
| (x) | Assuming redemption at the end of the applicable period. |
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Performance Summary – continued
MFS® Georgia Municipal Bond Fund
Growth of a Hypothetical $10,000 Investment
MFS® Georgia Municipal Bond Fund
Total Returns through 3/31/10
Average annual without sales charge
| Share class | Class inception date | 1-yr | 5-yr | 10-yr | ||||||||
| A | 6/06/88 | 10.84% | 4.02% | 5.07% | ||||||||
| B | 9/07/93 | 10.08% | 3.29% | 4.32% | ||||||||
| Comparative benchmark | ||||||||||||
| Barclays Capital Municipal Bond Index (f) | 9.69% | 4.58% | 5.58% | |||||||||
| Average annual with sales charge | ||||||||||||
A With Initial Sales Charge (4.75%) | 5.57% | 3.01% | 4.56% | |||||||||
B With CDSC (Declining over six years from 4% to 0%) (x) | 6.08% | 2.95% | 4.32% | |||||||||
CDSC – Contingent Deferred Sales Charge.
| (f) | Source: FactSet Research Systems Inc. |
| (x) | Assuming redemption at the end of the applicable period. |
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Performance Summary – continued
MFS® Maryland Municipal Bond Fund
Growth of a Hypothetical $10,000 Investment
MFS® Maryland Municipal Bond Fund
Total Returns through 3/31/10
Average annual without sales charge
| Share class | Class inception date | 1-yr | 5-yr | 10-yr | ||||||||
| A | 10/31/84 | 12.49% | 3.69% | 4.85% | ||||||||
| B | 9/07/93 | 11.77% | 3.00% | 4.17% | ||||||||
| Comparative benchmark | ||||||||||||
| Barclays Capital Municipal Bond Index (f) | 9.69% | 4.58% | 5.58% | |||||||||
| Average annual with sales charge | ||||||||||||
A With Initial Sales Charge (4.75%) | 7.15% | 2.69% | 4.35% | |||||||||
B With CDSC (Declining over six years from 4% to 0%) (x) | 7.77% | 2.66% | 4.17% | |||||||||
CDSC – Contingent Deferred Sales Charge.
| (f) | Source: FactSet Research Systems Inc. |
| (x) | Assuming redemption at the end of the applicable period. |
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Performance Summary – continued
MFS® Massachusetts Municipal Bond Fund
Growth of a Hypothetical $10,000 Investment
MFS® Massachusetts Municipal Bond Fund
Total Returns through 3/31/10
Average annual without sales charge
| Share class | Class inception date | 1-yr | 5-yr | 10-yr | ||||||||
| A | 4/09/85 | 12.31% | 4.40% | 5.29% | ||||||||
| B | 9/07/93 | 11.45% | 3.70% | 4.62% | ||||||||
| Comparative benchmark | ||||||||||||
| Barclays Capital Municipal Bond Index (f) | 9.69% | 4.58% | 5.58% | |||||||||
| Average annual with sales charge | ||||||||||||
A With Initial Sales Charge (4.75%) | 6.97% | 3.39% | 4.78% | |||||||||
B With CDSC (Declining over six years from 4% to 0%) (x) | 7.45% | 3.36% | 4.62% | |||||||||
CDSC – Contingent Deferred Sales Charge.
| (f) | Source: FactSet Research Systems Inc. |
| (x) | Assuming redemption at the end of the applicable period. |
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 each fund’s performance results would be less favorable. Please see the prospectus and financial statements for complete details.
A portion of income may be subject to state, federal, and/or alternative minimum tax. Capital gains, if any, are subject to a capital gains tax.
From time to time the funds may receive proceeds from litigation settlements, without which performance would be lower.
13
Table of Contents
Fund expenses borne by the shareholders during the period, October 1, 2009 through March 31, 2010
As a shareholder of the funds, you incur two types of costs: (1) transaction costs, including sales charges (loads) on certain purchase or redemption payments, and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the funds and to compare these costs with the ongoing costs of investing in other mutual funds.
These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period October 1, 2009 through March 31, 2010.
Actual Expenses
The first line for each share class in the following tables 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 tables provides information about hypothetical account values and hypothetical expenses based on each fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not each 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 each 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 tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads). Therefore, the second line for each share class in the tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
MFS® ALABAMA MUNICIPAL BOND FUND
| Share Class | Annualized Expense Ratio | Beginning Account Value 10/01/09 | Ending Account Value 3/31/10 | Expenses Paid During Period (p) 10/01/09-3/31/10 | ||||||
| A | Actual | 0.93% | $1,000.00 | $1,010.42 | $4.66 | |||||
| Hypothetical (h) | 0.93% | $1,000.00 | $1,020.29 | $4.68 | ||||||
| B | Actual | 1.68% | $1,000.00 | $1,005.70 | $8.40 | |||||
| Hypothetical (h) | 1.68% | $1,000.00 | $1,016.55 | $8.45 |
MFS® ARKANSAS MUNICIPAL BOND FUND
| Share Class | Annualized Expense Ratio | Beginning Account Value 10/01/09 | Ending Account Value 3/31/10 | Expenses Paid During Period (p) 10/01/09-3/31/10 | ||||||
| A | Actual | 0.74% | $1,000.00 | $1,010.36 | $3.71 | |||||
| Hypothetical (h) | 0.74% | $1,000.00 | $1,021.24 | $3.73 | ||||||
| B | Actual | 1.54% | $1,000.00 | $1,006.29 | $7.70 | |||||
| Hypothetical (h) | 1.54% | $1,000.00 | $1,017.25 | $7.75 |
| (h) | 5% class return per year before expenses. |
| (p) | Expenses paid is equal to each class’ annualized expense ratio, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the period, divided by the number of days in the year. Expenses paid do not include any applicable sales charges (loads). If these transaction costs had been included, your costs would have been higher. |
14
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Expense Tables – continued
MFS® CALIFORNIA MUNICIPAL BOND FUND
| Share Class | Annualized Expense Ratio | Beginning Account Value 10/01/09 | Ending Account Value 3/31/10 | Expenses Paid During Period (p) 10/01/09-3/31/10 | ||||||
| A | Actual | 0.69% | $1,000.00 | $994.59 | $3.43 | |||||
| Hypothetical (h) | 0.69% | $1,000.00 | $1,021.49 | $3.48 | ||||||
| B | Actual | 1.45% | $1,000.00 | $992.63 | $7.20 | |||||
| Hypothetical (h) | 1.45% | $1,000.00 | $1,017.70 | $7.29 | ||||||
| C | Actual | 1.59% | $1,000.00 | $990.14 | $7.89 | |||||
| Hypothetical (h) | 1.59% | $1,000.00 | $1,017.00 | $8.00 |
MFS® FLORIDA MUNICIPAL BOND FUND
| Share Class | Annualized Expense Ratio | Beginning Account Value 10/01/09 | Ending Account Value 3/31/10 | Expenses Paid During Period (p) 10/01/09-3/31/10 | ||||||
| A | Actual | 0.83% | $1,000.00 | $1,008.02 | $4.16 | |||||
| Hypothetical (h) | 0.83% | $1,000.00 | $1,020.79 | $4.18 | ||||||
| B | Actual | 1.61% | $1,000.00 | $1,004.15 | $8.04 | |||||
| Hypothetical (h) | 1.61% | $1,000.00 | $1,016.90 | $8.10 |
MFS® GEORGIA MUNICIPAL BOND FUND
| Share Class | Annualized Expense Ratio | Beginning Account Value 10/01/09 | Ending Account Value 3/31/10 | Expenses Paid During Period (p) 10/01/09-3/31/10 | ||||||
| A | Actual | 1.00% | $1,000.00 | $1,005.47 | $5.00 | |||||
| Hypothetical (h) | 1.00% | $1,000.00 | $1,019.95 | $5.04 | ||||||
| B | Actual | 1.75% | $1,000.00 | $1,001.71 | $8.73 | |||||
| Hypothetical (h) | 1.75% | $1,000.00 | $1,016.21 | $8.80 |
MFS® MARYLAND MUNICIPAL BOND FUND
| Share Class | Annualized Expense Ratio | Beginning Account Value 10/01/09 | Ending Account Value 3/31/10 | Expenses Paid During Period (p) 10/01/09-3/31/10 | ||||||
| A | Actual | 0.95% | $1,000.00 | $1,007.58 | $4.75 | |||||
| Hypothetical (h) | 0.95% | $1,000.00 | $1,020.19 | $4.78 | ||||||
| B | Actual | 1.70% | $1,000.00 | $1,003.85 | $8.49 | |||||
| Hypothetical (h) | 1.70% | $1,000.00 | $1,016.45 | $8.55 |
| (h) | 5% class return per year before expenses. |
| (p) | Expenses paid is equal to each class’ annualized expense ratio, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the period, divided by the number of days in the year. Expenses paid do not include any applicable sales charges (loads). If these transaction costs had been included, your costs would have been higher. |
15
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Expense Tables – continued
MFS® MASSACHUSETTS MUNICIPAL BOND FUND
| Share Class | Annualized Expense Ratio | Beginning Account Value 10/01/09 | Ending Account Value 3/31/10 | Expenses Paid During Period (p) 10/01/09-3/31/10 | ||||||
| A | Actual | 0.87% | $1,000.00 | $1,005.42 | $4.35 | |||||
| Hypothetical (h) | 0.87% | $1,000.00 | $1,020.59 | $4.38 | ||||||
| B | Actual | 1.62% | $1,000.00 | $1,001.68 | $8.08 | |||||
| Hypothetical (h) | 1.62% | $1,000.00 | $1,016.85 | $8.15 |
| (h) | 5% class return per year before expenses. |
| (p) | Expenses paid is equal to each class’ annualized expense ratio, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the period, divided by the number of days in the year. Expenses paid do not include any applicable sales charges (loads). If these transaction costs had been included, your costs would have been higher. |
16
Table of Contents
3/31/10
MFS® ALABAMA MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.
| Municipal Bonds - 97.7% | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Airport & Port Revenue - 1.3% | ||||||
| Alabama Port Authority Docks Facility, NATL, 5.25%, 2011 (c) | $ | 1,000,000 | $ | 1,061,160 | ||
| General Obligations - General Purpose - 7.4% | ||||||
| Auburn, AL, Sewer Rev., “H”, 5.625%, 2033 | $ | 1,000,000 | $ | 1,094,830 | ||
| Boaz, AL, School Warrants, “A”, SYNCORA, 5%, 2029 | 650,000 | 658,359 | ||||
| Commonwealth of Puerto Rico, “A”, 5.375%, 2033 | 180,000 | 176,589 | ||||
| Commonwealth of Puerto Rico, “A”, 6%, 2038 | 305,000 | 316,187 | ||||
| Enterprise, AL, School Warrants, ASSD GTY, 5%, 2029 | 250,000 | 260,232 | ||||
| Fairfield, AL, Refunding Warrants, AMBAC, 5.25%, 2025 | 1,030,000 | 1,072,158 | ||||
| Madison, AL, Refunding Warrants, 5.15%, 2039 | 1,000,000 | 1,016,230 | ||||
| Puerto Rico Public Buildings Authority Rev., Guaranteed (Government Facilities), “I”, 5.25%, 2033 | 310,000 | 299,088 | ||||
| State of California, 6%, 2039 | 550,000 | 580,272 | ||||
| Tuscaloosa, AL, “A”, 5.125%, 2039 | 750,000 | 765,023 | ||||
| $ | 6,238,968 | |||||
| General Obligations - Improvement - 3.2% | ||||||
| Birmingham, AL, “A”, 5.75%, 2017 | $ | 1,000,000 | $ | 1,019,910 | ||
| Birmingham, AL, “A”, AMBAC, 4.5%, 2032 | 890,000 | 847,413 | ||||
| Guam Government, “A”, 6.75%, 2029 | 260,000 | 276,994 | ||||
| Guam Government, “A”, 7%, 2039 | 60,000 | 64,328 | ||||
| Montgomery, AL, Warrants, SYNCORA, 5%, 2028 | 500,000 | 525,875 | ||||
| $ | 2,734,520 | |||||
| General Obligations - Schools - 8.5% | ||||||
| Bessemer, AL, School Warrants, AMBAC, 5.5%, 2020 | $ | 2,015,000 | $ | 2,047,220 | ||
| Huntsville, AL, School Warrants “B”, 5%, 2029 | 500,000 | 536,475 | ||||
| Jefferson County, AL, School Warrants, AGM, 5.5%, 2020 | 1,750,000 | 1,666,560 | ||||
| Lee County, AL, School Warrants, ASSD GTY, 4.75%, 2029 | 880,000 | 913,713 | ||||
| Madison County, AL, Board of Education, ASSD GTY, 5.125%, 2034 | 1,000,000 | 1,039,030 | ||||
| Sumter County, AL, School Warrants, 5.2%, 2039 | 1,000,000 | 970,860 | ||||
| $ | 7,173,858 | |||||
| Healthcare Revenue - Hospitals - 16.7% | ||||||
| Alabama Healthcare Authority Rev. (Baptist Health), “A”, 6%, 2036 (b) | $ | 200,000 | $ | 209,280 | ||
| Alabama Special Care Facilities Financing Authority (Ascension Health Senior Credit), “C-2”, 5%, 2036 | 750,000 | 752,055 | ||||
| Alabama Special Care Facilities Financing Authority (Daughters of Charity), ETM, AMBAC, 5%, 2025 (c) | 1,500,000 | 1,502,280 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| Healthcare Revenue - Hospitals - continued | ||||||
| Alabama Special Care Facilities Financing Authority Rev. (Ascension Health), BHAC, 5%, 2039 | $ | 750,000 | $ | 772,057 | ||
| Alexander City, AL, Special Care Facilities Financing Authority Medical Facilities Rev., “A” (Russell Hospital Corp.), 5.75%, 2036 | 500,000 | 445,820 | ||||
| Birmingham, AL, Baptist Medical Center, Special Care Facilities Rev. (Baptist Health Systems, Inc.), “A”, 5%, 2030 | 700,000 | 601,510 | ||||
| Birmingham, AL, Special Care Facilities Financing Authority Health Care Rev. (Children’s Hospital), ASSD GTY, 6%, 2039 | 750,000 | 807,345 | ||||
| Cullman County, AL, Health Care Authority (Cullman Regional Medical Center), “A”, 7%, 2036 | 300,000 | 308,694 | ||||
| East Alabama Health Care Authority, Health Care Facilities Rev., 5.25%, 2036 (b) | 1,000,000 | 1,006,700 | ||||
| Health Care Authority for Baptist Health, AL, “D”, 5%, 2021 | 875,000 | 823,287 | ||||
| Huntsville, AL, Health Care Authority Rev., 5.625%, 2011 (c) | 1,050,000 | 1,121,704 | ||||
| Illinois Finance Authority Rev. (Silver Cross Hospital & Medical Centers), 7%, 2044 | 255,000 | 264,657 | ||||
| Lauderdale County & Florence, AL, Health Care Authority Rev., “A” (Coffee Health Group), NATL, 5.75%, 2014 | 1,000,000 | 1,000,370 | ||||
| Louisville & Jefferson County, KY, Metropolitan Government Healthcare Systems Rev. (Norton Healthcare, Inc.), 5.25%, 2036 | 265,000 | 253,679 | ||||
| Marshall County, AL, Health Care Authority Rev., “A”, 5.75%, 2032 | 1,065,000 | 1,065,426 | ||||
| Mobile, AL, Special Care Facilities Financing Authority Rev. (Infirmary Health System, Inc.), “A”, 5.25%, 2030 | 500,000 | 489,115 | ||||
| Montgomery, AL, Medical Clinic Board Health Care Facility Rev. (Jackson Hospital & Clinic), 5.25%, 2031 | 500,000 | 458,415 | ||||
| New Hampshire Business Finance Authority Rev. (Elliot Hospital Obligated Group), “A”, 6%, 2027 | 370,000 | 375,069 | ||||
| St. Louis Park, MN, Health Care Facilities Rev. (Nicollett Health Services), 5.75%, 2039 | 445,000 | 442,459 | ||||
| University of Alabama at Birmingham, AL, Hospital Rev., “A”, 5.25%, 2025 | 500,000 | 516,430 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (ProHealth Care, Inc. Obligated Group), 6.625%, 2039 | 505,000 | 543,274 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (Wheaton Franciscan Services), 5.25%, 2031 | 340,000 | 312,178 | ||||
| $ | 14,071,804 | |||||
17
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Industrial Revenue - Metals - 0.6% | ||||||
| Mobile County, AL, Industrial Development Authority Rev. (Ipsco, Inc.), 6.875%, 2010 (c) | $ | 500,000 | $ | 502,130 | ||
| Industrial Revenue - Other - 0.5% | ||||||
| Fairfield, AL, Environment Improvement Rev. (USX Corp.), 5.4%, 2016 | $ | 400,000 | $ | 421,532 | ||
| Industrial Revenue - Paper - 2.3% | ||||||
| Butler, AL, Industrial Development Board, Solid Waste Disposal Rev. (Georgia Pacific Corp.), 5.75%, 2028 | $ | 200,000 | $ | 183,418 | ||
| Camden, AL, Industrial Development Board Exempt Facilities Rev., “B” (Weyerhaeuser Co.), 6.375%, 2013 (c) | 500,000 | 578,775 | ||||
| Phenix City, AL, Industrial Development Board Environmental Improvement Rev., “A” (MeadWestvaco Coated Board Project), 6.35%, 2035 | 750,000 | 682,013 | ||||
| Selma, AL, Industrial Development Board, “A” (International Paper Co.), 6.7%, 2018 | 500,000 | 506,435 | ||||
| $ | 1,950,641 | |||||
| Miscellaneous Revenue - Other - 0.2% | ||||||
| Birmingham, AL, Downtown Redevelopment Authority Rev. (Social Security Administrative Building), ETM, 12.5%, 2010 (c) | $ | 200,000 | $ | 206,548 | ||
| Multi-Family Housing Revenue - 2.2% | ||||||
| Alabama Housing Finance Authority, Multi-Family Residential Development Rev., FHA, 7.25%, 2023 | $ | 890,000 | $ | 890,979 | ||
| Alabama Housing Finance Authority, Multi-Family Residential Development Rev., “K” (South Bay Apartments), FNMA, 5.875%, 2021 | 960,000 | 988,003 | ||||
| $ | 1,878,982 | |||||
| Sales & Excise Tax Revenue - 0.5% | ||||||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., 5.25%, 2057 | $ | 400,000 | $ | 396,512 | ||
| Single Family Housing - State - 1.3% | ||||||
| Alabama Housing Finance Authority, Collateral Home Mortgage Bond Program II, “B”, 5.15%, 2019 | $ | 30,000 | $ | 30,194 | ||
| Alabama Housing Finance Authority, Single Family Mortgage Rev., “B”, GNMA, 5.375%, 2033 | 670,000 | 690,375 | ||||
| Alabama Housing Finance Authority, Single Family Mortgage Rev., Collateral Home Mortgage Bond Program II, “A-2”, GNMA, 5.4%, 2022 | 345,000 | 346,032 | ||||
| Alabama Housing Finance Authority, Single Family Mortgage Rev., Collateral Home Mortgage Bond Program II, “B”, 5.15%, 2019 | 30,000 | 30,194 | ||||
| $ | 1,096,795 | |||||
| Issuer | Shares/Par | Value ($) | ||||
| State & Local Agencies - 8.3% | ||||||
| Alabama Building Renovation Authority, AMBAC, 6%, 2014 | $ | 1,515,000 | $ | 1,548,966 | ||
| Alabama Incentives Financing Authority Special Obligations, “A”, 5%, 2029 | 1,000,000 | 1,037,170 | ||||
| Alabama Public School & College Authority Rev., “A”, 5%, 2019 | 1,000,000 | 1,109,120 | ||||
| Alabama Public School & College Authority Rev., “A”, 5%, 2029 | 1,000,000 | 1,042,920 | ||||
| Leeds Public Educational Building Authority, Educational Facilities Rev., ASSD GTY, 5.125%, 2033 | 500,000 | 518,730 | ||||
| Los Angeles, CA, Municipal Improvement Corp. Lease Rev. (Real Property), “E”, 6%, 2039 | 145,000 | 152,871 | ||||
| Mobile, AL, Public Educational Building Authority Rev., “A”, ASSD GTY, 5%, 2033 | 1,500,000 | 1,546,335 | ||||
| $ | 6,956,112 | |||||
| Tax - Other - 0.6% | ||||||
| Guam Government Ltd. Obligation Rev., “A”, 5.375%, 2024 | $ | 95,000 | $ | 98,283 | ||
| Guam Government Ltd. Obligation Rev., “A”, 5.625%, 2029 | 30,000 | 30,727 | ||||
| Virgin Islands Public Finance Authority Rev., “A”, 6%, 2039 | 235,000 | 241,843 | ||||
| Virgin Islands Public Finance Authority Rev., “A-1”, 5%, 2029 | 65,000 | 63,419 | ||||
| Virgin Islands Public Finance Authority Rev., “B”, 5%, 2025 | 65,000 | 65,292 | ||||
| $ | 499,564 | |||||
| Universities - Colleges - 16.6% | ||||||
| Alabama State University Board of Education Rev. (Chattahoochee Valley Community College), ASSD GTY, 5%, 2034 | $ | 1,300,000 | $ | 1,329,627 | ||
| Alabama State University Rev., General Tuition & Fee, ASSD GTY, 5%, 2038 | 1,000,000 | 1,044,220 | ||||
| Alabama State University Rev., General Tuition & Fee, ASSD GTY, 5.75%, 2039 | 1,000,000 | 1,083,760 | ||||
| Auburn University, General Fee Rev., AMBAC, 5%, 2029 | 1,000,000 | 1,032,450 | ||||
| Auburn University, General Fee Rev., AGM, 5%, 2038 (f) | 2,000,000 | 2,066,640 | ||||
| Illinois Finance Authority Rev. (Roosevelt University Project), 6.5%, 2039 | 550,000 | 558,151 | ||||
| Jacksonville State University, Tuition & Fee Rev., ASSD GTY, 5.125%, 2038 | 1,000,000 | 1,025,580 | ||||
| Troy University, Facilities Rev., “A”, ASSD GTY, 4.5%, 2028 | 1,000,000 | 981,450 | ||||
| University of Alabama, Birmingham Hospital Rev., “A”, NATL, 5%, 2041 | 1,650,000 | 1,595,666 | ||||
| University of Alabama, General Rev., NATL, 5%, 2034 | 1,000,000 | 1,016,710 | ||||
| University of Alabama, General Rev., “A”, NATL, 5%, 2029 | 1,000,000 | 1,026,390 | ||||
| University of South Alabama, University Rev., AMBAC, 5%, 2029 | 1,000,000 | 1,045,370 | ||||
18
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Universities - Colleges - continued | ||||||
| University of South Alabama, University Rev., BHAC, 5%, 2038 | $ | 150,000 | $ | 156,737 | ||
| $ | 13,962,751 | |||||
| Utilities - Investor Owned - 0.1% | ||||||
| Michigan Strategic Fund Ltd. Obligation Rev. (Detroit Edison), 5.5%, 2029 (b) | $ | 70,000 | $ | 77,955 | ||
| Utilities - Municipal Owned - 6.6% | ||||||
| Alabama Municipal Electric Power Authority, “A”, NATL, 5%, 2023 | $ | 1,000,000 | $ | 1,032,220 | ||
| Guam Power Authority Rev., AMBAC, 5%, 2018 | 3,500,000 | 3,504,270 | ||||
| Long Island Power Authority, Electric Systems Rev., “A”, 6%, 2033 | 130,000 | 145,206 | ||||
| Puerto Rico Electric Power Authority, Power Rev., “V”, AGM, 5.25%, 2027 | 450,000 | 491,841 | ||||
| Tuskegee, AL, Utilities Board, AMBAC, 5.5%, 2022 | 400,000 | 400,044 | ||||
| $ | 5,573,581 | |||||
| Utilities - Other - 1.6% | ||||||
| Foley, AL, Utilities Board Utilities Rev., AGM, 5%, 2025 | $ | 1,000,000 | $ | 1,050,990 | ||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2019 | 295,000 | 300,463 | ||||
| $ | 1,351,453 | |||||
| Water & Sewer Utility Revenue - 19.2% | ||||||
| Alabama Drinking Water Finance Authority, Revolving Fund Loan, “A”, AMBAC, 6%, 2021 | $ | 725,000 | $ | 731,626 | ||
| Alabama Drinking Water Finance Authority, Revolving Fund Loan, “C”, AMBAC, 5.75%, 2018 | 1,000,000 | 1,023,000 | ||||
| Alabama Water Pollution Control Authority, Revolving Fund Loan, AMBAC, 5.75%, 2019 | 1,000,000 | 1,001,450 | ||||
| Alabaster, AL, Sewer Rev., NATL, 5%, 2029 | 750,000 | 719,797 | ||||
| Bessemer, AL, Governmental Utilities Services Corp. Water Supply Rev., ASSD GTY, 4.75%, 2033 | 1,500,000 | 1,501,710 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| Water & Sewer Utility Revenue - continued | ||||||
| Bessemer, AL, Governmental Utilities Services Corp. Water Supply Rev., ASSD GTY, 5%, 2039 | $ | 1,000,000 | $ | 1,015,560 | ||
| Birmingham, AL, Waterworks & Sewer Board Rev., “A”, FGIC, 5%, 2034 | 1,365,000 | 1,377,094 | ||||
| Birmingham, AL, Waterworks & Sewer Board Rev., “A”, AGM, 4.5%, 2035 | 400,000 | 390,636 | ||||
| Birmingham, AL, Waterworks & Sewer Board Rev., “A”, AGM, 5%, 2040 | 1,190,000 | 1,212,479 | ||||
| Birmingham, AL, Waterworks Board Water Rev., “A”, ASSD GTY, 5.125%, 2034 | 750,000 | 778,560 | ||||
| Commonwealth of Puerto Rico Aqueduct & Sewer Authority Rev., “A”, ASSD GTY, 5%, 2028 | 400,000 | 411,116 | ||||
| Commonwealth of Puerto Rico Aqueduct & Sewer Authority Rev., “A”, 6%, 2044 | 2,000,000 | 2,065,320 | ||||
| Detroit, MI, Sewer Disposal System Rev., “B”, AGM, 7.5%, 2033 | 185,000 | 220,674 | ||||
| Huntsville, AL, Water System Rev., AGM, 5%, 2033 | 1,000,000 | 1,053,550 | ||||
| Montgomery, AL, Waterworks & Sanitary Sewer Board Rev., AGM, 5%, 2024 | 1,000,000 | 1,056,850 | ||||
| Phenix City, AL, Water & Sewer Rev., “A”, ASSD GTY, 5%, 2034 | 1,000,000 | 1,006,630 | ||||
| Wasco, CA, Semitropic Improvement District (Semitropic Water Storage District), “A”, 5%, 2038 | 635,000 | 634,956 | ||||
| $ | 16,201,008 | |||||
| Total Municipal Bonds (Identified Cost, $80,119,368) | $ | 82,355,874 | ||||
| Money Market Funds (v) - 0.7% | ||||||
| MFS Institutional Money Market Portfolio, 0.17%, at Cost and Net Asset Value | 583,601 | $ | 583,601 | |||
| Total Investments (Identified Cost, $80,702,969) | $ | 82,939,475 | ||||
| Other Assets, Less Liabilities - 1.6% | 1,379,399 | |||||
| Net Assets - 100.0% | $ | 84,318,874 | ||||
Derivative Contracts at 3/31/10
Futures Contracts Outstanding at 3/31/10
| Description | Currency | Contracts | Value | Expiration Date | Unrealized Appreciation (Depreciation) | |||||
| Asset Derivatives | ||||||||||
| Interest Rate Futures | ||||||||||
| U.S. Treasury Bond 30 yr (Short) | USD | 9 | $1,045,125 | Jun-10 | $1,023 | |||||
| U.S. Treasury Note 10 yr (Short) | USD | 9 | 1,046,250 | Jun-10 | 3,675 | |||||
| $4,698 | ||||||||||
At March 31, 2010, the fund had sufficient cash and/or other liquid securities to cover any commitments under these derivative contracts.
See Portfolio Footnotes and Notes to Financial Statements
19
Table of Contents
PORTFOLIO OF INVESTMENTS
3/31/10
MFS® ARKANSAS MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.
| Municipal Bonds - 97.3% | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Airport & Port Revenue - 0.4% | ||||||
| Little Rock, AR, Airport Rev., “A”, AGM, 5.25%, 2019 | $ | 800,000 | $ | 800,432 | ||
| General Obligations - General Purpose - 8.6% | ||||||
| Arkansas College Savings, “A”, ETM, 0%, 2017 (c) | $ | 1,840,000 | $ | 1,472,423 | ||
| Commonwealth of Puerto Rico, “A”, 5.25%, 2027 | 920,000 | 912,714 | ||||
| Commonwealth of Puerto Rico, “A”, 5.375%, 2033 | 335,000 | 328,652 | ||||
| Commonwealth of Puerto Rico, “A”, 6%, 2038 | 560,000 | 580,541 | ||||
| Commonwealth of Puerto Rico, Public Improvement, NATL, 5.75%, 2010 (c) | 6,000,000 | 6,070,380 | ||||
| Commonwealth of Puerto Rico, Public Improvement, “A”, CIFG, 5%, 2034 | 395,000 | 361,784 | ||||
| Little Rock, AR, Library Construction & Improvement, 5%, 2027 | 500,000 | 529,055 | ||||
| Little Rock, AR, Library Construction & Improvement, 5%, 2028 | 500,000 | 526,400 | ||||
| Puerto Rico Public Buildings Authority Rev. (State Office Building), “F”, SYNCORA, 5.25%, 2025 | 2,000,000 | 1,975,060 | ||||
| Puerto Rico Public Buildings Authority Rev., Guaranteed, “M”, 6.25%, 2023 | 385,000 | 422,522 | ||||
| Puerto Rico Public Buildings Authority Rev., Guaranteed, “M”, 6.25%, 2031 | 420,000 | 467,586 | ||||
| Puerto Rico Public Buildings Authority Rev., Guaranteed, “Q”, 5.625%, 2039 | 1,255,000 | 1,232,799 | ||||
| State of California, 6%, 2039 | 1,160,000 | 1,223,846 | ||||
| $ | 16,103,762 | |||||
| General Obligations - Improvement - 0.4% | ||||||
| Guam Government, “A”, 6.75%, 2029 | $ | 515,000 | $ | 548,660 | ||
| Guam Government, “A”, 5.25%, 2037 | 255,000 | 219,558 | ||||
| Guam Government, “A”, 7%, 2039 | 65,000 | 69,689 | ||||
| $ | 837,907 | |||||
| General Obligations - Schools - 7.3% | ||||||
| Arkansas, Capital Appreciation, College Savings, “B”, ETM, 0%, 2012 (c) | $ | 1,200,000 | $ | 1,163,748 | ||
| Arkansas, Capital Appreciation, College Savings, “B”, ETM, 0%, 2013 (c) | 1,000,000 | 946,840 | ||||
| Arkansas, Capital Appreciation, College Savings, “B”, ETM, 0%, 2014 (c) | 1,150,000 | 1,055,309 | ||||
| Arkansas, Capital Appreciation, College Savings, “B”, ETM, 0%, 2015 (c) | 1,100,000 | 972,763 | ||||
| Benton, AR, School District No. 8, 4.85%, 2040 | 1,895,000 | 1,904,096 | ||||
| Cabot, AR, School District No. 4, Lonoke County, “A”, N, AMBAC, 4.7%, 2038 | 1,500,000 | 1,504,935 | ||||
| Northwest Arkansas Community College District, Capital Improvement, AMBAC, 5%, 2028 | 1,380,000 | 1,419,992 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| General Obligations - Schools - continued | ||||||
| Pine Bluff, AR, School District Construction, NATL, 4.75%, 2033 | $ | 565,000 | $ | 565,141 | ||
| Pulaski, AR, Special School District Construction, 5%, 2035 | 2,000,000 | 2,026,200 | ||||
| Rogers, AR, School District Number 030, 4.75%, 2032 | 935,000 | 937,113 | ||||
| Van Buren, AR, School District No. 42, ST AID, 4.5%, 2031 | 375,000 | 368,498 | ||||
| Van Buren, AR, School District No. 42, ST AID, 4.625%, 2033 | 745,000 | 736,164 | ||||
| $ | 13,600,799 | |||||
| Healthcare Revenue - Hospitals - 12.6% | ||||||
| Arkansas Development Finance Authority, Health Refunding Rev. (Sister of Mercy), “A”, NATL, 5%, 2013 | $ | 3,735,000 | $ | 3,909,275 | ||
| Batesville, AR, Medical District Rev. (White River Medical Center), 5.5%, 2024 | 750,000 | 725,055 | ||||
| Baxter County, AR, Hospital Rev. (Baxter Regional Hospital), 5%, 2026 | 1,000,000 | 964,370 | ||||
| Crittenden County, AR, Hospital Rev., Refunding & Improvement, 7.15%, 2010 (c) | 750,000 | 768,848 | ||||
| District of Columbia Hospital Rev. (Children’s Hospital Obligated Group), AGM, 5.25%, 2045 | 1,500,000 | 1,476,195 | ||||
| Escambia County, FL, Health Facilities Authority (Baptist Hospital, Inc.), “A”, 6%, 2036 | 420,000 | 407,005 | ||||
| Illinois Finance Authority Rev. (Central Dupage Health), 5%, 2027 | 555,000 | 561,294 | ||||
| Illinois Finance Authority Rev. (Children’s Memorial Hospital), “A”, ASSD GTY, 5.25%, 2047 | 825,000 | 789,863 | ||||
| Illinois Finance Authority Rev. (Resurrection Health), 6.125%, 2025 | 170,000 | 172,174 | ||||
| Illinois Finance Authority Rev. (Silver Cross Hospital & Medical Centers), 7%, 2044 | 510,000 | 529,314 | ||||
| Indiana Finance Authority Rev. (Sisters of St. Francis Health Services), 5.375%, 2032 | 1,085,000 | 1,121,434 | ||||
| Jefferson County, AR, Hospital Rev., Refunding & Improvement (Regional Medical Center), 5.8%, 2021 | 1,000,000 | 1,016,400 | ||||
| Jefferson Parish, LA, Hospital Rev., Hospital Service District No. 1 (West Jefferson Medical Center), “B”, AGM, 5.25%, 2028 | 275,000 | 283,987 | ||||
| Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Owensboro Medical Health System), “A”, 6.375%, 2040 | 545,000 | 540,253 | ||||
| Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Owensboro Medical Health System), “A”, 6.5%, 2045 | 395,000 | 388,546 | ||||
| Louisville & Jefferson County, KY, Metropolitan Government Healthcare Systems Rev. (Norton Healthcare, Inc.), 5.25%, 2036 | 470,000 | 449,922 | ||||
20
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Healthcare Revenue - Hospitals - continued | ||||||
| Michigan Hospital Finance Authority Rev. (Henry Ford Health System), 5.625%, 2029 | $ | 110,000 | $ | 108,008 | ||
| Michigan Hospital Finance Authority Rev. (Henry Ford Health System), 5.75%, 2039 | 1,105,000 | 1,066,878 | ||||
| New Hampshire Business Finance Authority Rev. (Elliot Hospital Obligated Group), “A”, 6%, 2027 | 355,000 | 359,864 | ||||
| New Hampshire Business Finance Authority Rev. (Elliot Hospital Obligated Group), “A”, 6.125%, 2039 | 490,000 | 492,269 | ||||
| North Little Rock, AR, Health Facilities Board Rev. (Baptist Health Facilities), 5.7%, 2022 | 500,000 | 503,570 | ||||
| Ohio Higher Educational Facility Commission Rev. (University Hospital Health System), 6.75%, 2039 | 685,000 | 728,422 | ||||
| Pulaski, AR, Hospital Rev. (Arkansas Children’s Hospital), ASSD GTY, 5.5%, 2034 | 750,000 | 790,418 | ||||
| Pulaski, AR, Hospital Rev. (Arkansas Children’s Hospital), ASSD GTY, 5.5%, 2039 | 375,000 | 392,434 | ||||
| Sebastian County, AR, Health Facilities Board Hospital Rev., “A”, 5.25%, 2021 | 1,000,000 | 1,077,660 | ||||
| St. Louis Park, MN, Health Care Facilities Rev. (Nicollett Health Services), 5.75%, 2039 | 850,000 | 845,147 | ||||
| Washington County, AR, Hospital Rev. (Regional Medical Center), “A”, 5%, 2035 | 1,000,000 | 926,290 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (ProHealth Care, Inc. Obligated Group), 6.625%, 2039 | 990,000 | 1,065,032 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (Wheaton Franciscan Services), 5.25%, 2031 | 675,000 | 619,765 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (Wheaton Franciscan Services), “B”, 5.125%, 2020 | 450,000 | 443,052 | ||||
| $ | 23,522,744 | |||||
| Industrial Revenue - Other - 0.2% | ||||||
| Virgin Islands Public Finance Authority, Refinery Facilities Rev. (Hovensa Coker Project), 5.875%, 2022 | $ | 335,000 | $ | 334,243 | ||
| Industrial Revenue - Paper - 0.4% | ||||||
| Arkansas Development Finance Authority, Industrial Facilities Rev. (Potlatch Corp.), “A”, 7.75%, 2025 | $ | 250,000 | $ | 253,845 | ||
| Pine Bluff, AR, Environmental Improvement (International Paper Co.), “A”, 5.55%, 2022 | 250,000 | 238,160 | ||||
| Pine Bluff, AR, Environmental Refunding (International Paper Co.), “A”, 6.7%, 2020 | 300,000 | 303,648 | ||||
| $ | 795,653 | |||||
| Multi-Family Housing Revenue - 0.5% | ||||||
| Fort Smith, AR, Residential Housing Facilities Board Rev. (Gorman Towers), “A”, GNMA, 5.45%, 2037 | $ | 1,000,000 | $ | 1,009,410 | ||
| Issuer | Shares/Par | Value ($) | ||||
| Sales & Excise Tax Revenue - 2.9% | ||||||
| Bentonville, AR, Sales & Use Tax, N, AMBAC, 4.375%, 2025 | $ | 1,000,000 | $ | 961,160 | ||
| Massachusetts Bay Transportation Authority, Sales Tax Rev., “A-1”, 5.25%, 2029 | 1,000,000 | 1,146,150 | ||||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., 0%, 2056 | 9,770,000 | 495,828 | ||||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., 5.25%, 2057 | 1,010,000 | 1,001,193 | ||||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “A”, 5.375%, 2039 | 1,730,000 | 1,759,566 | ||||
| $ | 5,363,897 | |||||
| Single Family Housing - Local - 4.3% | ||||||
| Harrison, AR, Residential Housing Facilities Board, Single Family Mortgage Rev., ETM, FGIC, 7.4%, 2011 (c) | $ | 4,000,000 | $ | 4,379,960 | ||
| Lonoke County, AR, Residential Housing Facilities Rev., “A-2”, FNMA, 7.9%, 2011 | 416 | 418 | ||||
| Pulaski County, AR, Public Facilities Board Rev., “C”, FNMA, 0%, 2014 | 2,750,000 | 2,447,858 | ||||
| Sherwood, AR, Residential Housing Facilities Board, Single Family Rev., NATL, 7.5%, 2010 (c) | 1,250,000 | 1,285,125 | ||||
| $ | 8,113,361 | |||||
| Single Family Housing - State - 6.4% | ||||||
| Arkansas Development Finance Authority Rev., Mortgage Backed Securities Program, “B”, GNMA, 5%, 2029 | $ | 160,000 | $ | 156,888 | ||
| Arkansas Development Finance Authority Rev., Mortgage Backed Securities Program, “B”, GNMA, 4.45%, 2034 | 90,000 | 90,280 | ||||
| Arkansas Development Finance Authority Rev., Mortgage Backed Securities Program, “C”, GNMA, 5.35%, 2027 | 1,560,000 | 1,562,933 | ||||
| Arkansas Development Finance Authority Rev., Mortgage Backed Securities Program, “C”, 5.625%, 2035 | 1,155,000 | 1,183,309 | ||||
| Arkansas Development Finance Authority Rev., Mortgage Backed Securities Program, “E”, GNMA, 5.4%, 2034 | 650,000 | 652,789 | ||||
| Arkansas Development Finance Authority, Mortgage Backed Securities Program, “I”, GNMA, 5.3%, 2033 | 200,000 | 199,982 | ||||
| Arkansas Development Finance Authority, Mortgage Rev., “B”, GNMA, 4.85%, 2031 | 860,000 | 834,415 | ||||
| Arkansas Development Finance Authority, Mortgage Rev., “B”, GNMA, 5.25%, 2035 | 1,550,000 | 1,548,373 | ||||
| Arkansas Development Finance Authority, Single Family Mortgage Rev., “B”, GNMA, 5.125%, 2024 | 445,000 | 446,477 | ||||
| Arkansas Development Finance Authority, Single Family Mortgage Rev., “B”, GNMA, 5.7%, 2028 | 3,000,000 | 3,200,460 | ||||
| Arkansas Housing Development Agency, Single Family Rev., Mortgage Program, ETM, 8.375%, 2011 (c) | 1,000,000 | 1,097,040 | ||||
21
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Single Family Housing - State - continued | ||||||
| Arkansas State University, Auxiliary Enterprises Rev., AGM, 4.65%, 2040 | $ | 1,080,000 | $ | 1,051,034 | ||
| $ | 12,023,980 | |||||
| State & Local Agencies - 5.3% | ||||||
| Arkansas Development Finance Authority Rev., AGM, 5%, 2034 | $ | 1,000,000 | $ | 1,028,990 | ||
| Arkansas Development Finance Authority Rev., “A”, AGM, 5%, 2014 | 1,185,000 | 1,347,262 | ||||
| Arkansas Development Finance Authority Rev., Correctional Facilities, “A”, 5.125%, 2034 | 500,000 | 505,960 | ||||
| Arkansas Development Finance Authority Rev., Economic Development Rev. (Agritecsorbents LLC) “B”, 5%, 2018 | 175,000 | 176,990 | ||||
| Arkansas Development Finance Authority Rev., Environmental State Agency Facilities, “A”, AMBAC, 5%, 2040 | 2,500,000 | 2,551,625 | ||||
| Arkansas Development Finance Authority, Public Purpose Rev. (Arkansas Game & Fish Commission), AGM, 5%, 2027 | 3,205,000 | 3,341,116 | ||||
| California Public Works Board Lease Rev. (Various Capital Projects), “G-1”, 5.75%, 2030 | 285,000 | 284,997 | ||||
| Farmington, AR, School District No. 6, 4.6%, 2033 | 635,000 | 642,626 | ||||
| $ | 9,879,566 | |||||
| Tax - Other - 4.1% | ||||||
| Commonwealth of Puerto Rico, Public Improvement, “B”, 6.5%, 2037 | $ | 2,000,000 | $ | 2,177,860 | ||
| Guam Government Ltd. Obligation Rev., “A”, 5.375%, 2024 | 490,000 | 506,934 | ||||
| Guam Government Ltd. Obligation Rev., “A”, 5.625%, 2029 | 65,000 | 66,575 | ||||
| Little Rock, AR, Hotel & Restaurant Gross Receipts Tax Rev., 7.375%, 2015 | 2,790,000 | 3,178,480 | ||||
| Puerto Rico Infrastructure Financing Authority, Special Tax Rev., “C”, FGIC, 5.5%, 2022 | 765,000 | 785,517 | ||||
| Virgin Islands Public Finance Authority Rev., “A”, 6%, 2039 | 505,000 | 519,706 | ||||
| Virgin Islands Public Finance Authority Rev., “A-1”, 5%, 2029 | 135,000 | 131,715 | ||||
| Virgin Islands Public Finance Authority Rev., “A-1”, 5%, 2039 | 150,000 | 137,216 | ||||
| Virgin Islands Public Finance Authority Rev., “B”, 5%, 2025 | 135,000 | 135,606 | ||||
| $ | 7,639,609 | |||||
| Tobacco - 1.1% | ||||||
| Arkansas Development Finance Authority, Tobacco Settlement Rev. (Cancer Research Center Project), AMBAC, 0%, 2026 | $ | 2,000,000 | $ | 930,320 | ||
| Arkansas Development Finance Authority, Tobacco Settlement Rev. (Cancer Research Center Project), AMBAC, 0%, 2027 | 1,940,000 | 840,815 | ||||
| Children’s Trust Fund, Tobacco Settlement Rev., Puerto Rico, 5.5%, 2039 | 290,000 | 255,368 | ||||
| $ | 2,026,503 | |||||
| Issuer | Shares/Par | Value ($) | ||||
| Transportation - Special Tax - 1.8% | ||||||
| Commonwealth of Puerto Rico Highway & Transportation Authority, “B”, NATL, 5.875%, 2010 (c) | $ | 2,000,000 | $ | 2,046,720 | ||
| Commonwealth of Puerto Rico Highway & Transportation Authority, “G”, 5%, 2023 | 750,000 | 751,718 | ||||
| Metropolitan Transportation Authority Rev., NY, “A”, 5%, 2037 | 490,000 | 489,976 | ||||
| $ | 3,288,414 | |||||
| Universities - Colleges - 20.4% | ||||||
| Arkansas State University, Auxiliary Enterprises Rev., AGM, 4.65%, 2035 | $ | 1,000,000 | $ | 991,230 | ||
| Arkansas State University, Housing Systems Rev., AMBAC, 5.15%, 2021 | 1,240,000 | 1,260,646 | ||||
| Arkansas Technical University, Housing Systems Rev., AMBAC, 5.2%, 2026 | 500,000 | 544,930 | ||||
| Arkansas University Rev., Student Fee, AMBAC, 5%, 2032 | 2,595,000 | 2,644,720 | ||||
| Conway, AR, Public Facilities Board, Capital Improvement Rev. (Hendrix College), “B”, 5%, 2035 | 1,000,000 | 985,820 | ||||
| Illinois Finance Authority Rev. (Roosevelt University Project), 6.5%, 2039 | 750,000 | 761,115 | ||||
| New York Dormitory Authority Rev., Non-State Supported Debt (New York University), “A”, 5.25%, 2048 | 1,605,000 | 1,672,378 | ||||
| Siloam Springs, AR, Public Education Facilities, Capital Improvement Rev. (John Brown University), AMBAC, 5.35%, 2020 | 500,000 | 516,285 | ||||
| University of Arkansas Rev. (Fort Smith Campus), 5%, 2028 | 860,000 | 937,718 | ||||
| University of Arkansas Rev. (Student Fee-Fort Smith Campus), 4.75%, 2034 | 1,000,000 | 1,040,610 | ||||
| University of Arkansas Rev. (Student Fee-Phillips), 5.1%, 2034 | 750,000 | 790,568 | ||||
| University of Arkansas Rev., “A”, 5%, 2033 | 1,000,000 | 1,062,970 | ||||
| University of Arkansas, Administration Building Rev. , “A”, 5%, 2038 | 1,000,000 | 1,052,630 | ||||
| University of Arkansas, University Construction Rev. (Monticello), AMBAC, 5%, 2025 | 1,525,000 | 1,596,858 | ||||
| University of Arkansas, University Construction Rev. (UAMS Campus), “B”, NATL, 5%, 2026 | 1,405,000 | 1,482,317 | ||||
| University of Arkansas, University Construction Rev. (UAMS Campus), “B”, NATL, 5%, 2027 | 2,180,000 | 2,293,404 | ||||
| University of Arkansas, University Construction Rev. (UAMS Campus), “B”, NATL, 5%, 2034 | 3,200,000 | 3,310,720 | ||||
| University of Arkansas, University Facilities Rev. (Fayetteville Campus), FGIC, 5%, 2027 | 3,155,000 | 3,261,607 | ||||
| University of Arkansas, University Facilities Rev. (Fayetteville Campus), FGIC, 5%, 2032 | 2,500,000 | 2,563,475 | ||||
| University of Arkansas, University Facilities Rev. (Pine Bluff Campus), “A”, AMBAC, 5%, 2030 | 1,000,000 | 1,052,680 | ||||
| University of Arkansas, University Facilities Rev. (UAMS Campus), FGIC, 5%, 2028 | 2,000,000 | 2,123,600 | ||||
| University of Arkansas, University Rev., Var Fac-Fayetteville Campus, AMBAC, 5%, 2036 | 2,500,000 | 2,609,325 | ||||
22
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Universities - Colleges - continued | ||||||
| University of California Rev., “J”, AGM, 4.5%, 2035 | $ | 1,500,000 | $ | 1,436,790 | ||
| University of Central Arkansas Rev., “A”, AMBAC, 5%, 2023 | 1,100,000 | 1,100,605 | ||||
| University of Puerto Rico Rev., “Q”, 5%, 2036 | 1,145,000 | 1,016,771 | ||||
| $ | 38,109,772 | |||||
| Utilities - Investor Owned - 0.9% | ||||||
| Independence County, AR, Pollution Control Rev., N, AMBAC, 4.9%, 2022 | $ | 1,000,000 | $ | 1,014,950 | ||
| Jefferson County, AR, Pollution Control Rev. (Entergy Arkansas, Inc., Project), 4.6%, 2017 | 750,000 | 758,078 | ||||
| $ | 1,773,028 | |||||
| Utilities - Municipal Owned - 7.5% | ||||||
| Benton, AR, Public Utility Revenue, AMBAC, 5%, 2031 | $ | 1,500,000 | $ | 1,450,185 | ||
| Benton, AR, Utilities Rev., AMBAC, 5%, 2030 | 470,000 | 459,975 | ||||
| Benton, AR, Utilities Rev., AMBAC, 5%, 2036 | 1,000,000 | 941,340 | ||||
| Harris County, TX, Cultural Education Facilities Financial Corp., Thermal Utilities Rev. (Teco Project), “A”, 5.25%, 2035 | 945,000 | 991,475 | ||||
| Long Island Power Authority, Electric Systems Rev., “A”, BHAC, 5.5%, 2033 | 730,000 | 802,672 | ||||
| Long Island Power Authority, Electric Systems Rev., “A”, 6%, 2033 | 245,000 | 273,658 | ||||
| North Little Rock, AR, Electric Rev., “A”, NATL, 6.5%, 2010 | 455,000 | 460,283 | ||||
| North Little Rock, AR, Electric Rev., “A”, NATL, 6.5%, 2015 | 6,000,000 | 6,710,220 | ||||
| Puerto Rico Electric Power Authority Rev., “VV”, NATL, 5.25%, 2030 | 1,000,000 | 1,026,370 | ||||
| Puerto Rico Electric Power Authority, “TT”, 5%, 2027 | 470,000 | 472,233 | ||||
| Puerto Rico Electric Power Authority, Power Rev., “XX”, 5.25%, 2040 | 435,000 | 429,123 | ||||
| $ | 14,017,534 | |||||
| Utilities - Other - 0.2% | ||||||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2021 | $ | 300,000 | $ | 302,805 | ||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2022 | 155,000 | 155,694 | ||||
| $ | 458,499 | |||||
| Issuer | Shares/Par | Value ($) | ||||
| Water & Sewer Utility Revenue - 12.0% | ||||||
| Commonwealth of Puerto Rico Aqueduct & Sewer Authority Rev., “A”, ASSD GTY, 5%, 2028 | $ | 1,200,000 | $ | 1,233,343 | ||
| Commonwealth of Puerto Rico Aqueduct & Sewer Authority Rev., “A”, 6%, 2044 | 2,000,000 | 2,065,320 | ||||
| Detroit, MI, Sewer Disposal System Rev., “B”, AGM, 7.5%, 2033 | 375,000 | 447,311 | ||||
| Fort Smith, AR, Water & Sewer Rev., AGM, 5%, 2032 (f) | 2,000,000 | 2,082,760 | ||||
| Fort Smith, AR, Water & Sewer Rev., “C”, AGM, 5.25%, 2020 | 1,315,000 | 1,362,353 | ||||
| Hot Springs, AR, Wastewater Rev., ASSD GTY, 4.625%, 2037 | 1,260,000 | 1,255,061 | ||||
| King County, WA, Sewer Rev., 5%, 2038 | 1,625,000 | 1,682,850 | ||||
| Little Rock, AR, Sewer Rev., 5.5%, 2030 | 750,000 | 810,653 | ||||
| Little Rock, AR, Sewer Rev., 5.75%, 2038 | 1,000,000 | 1,096,970 | ||||
| Little Rock, AR, Sewer Rev., “A”, AGM, 4.375%, 2033 | 750,000 | 721,935 | ||||
| Little Rock, AR, Sewer Rev., Refunding & Construction, 5%, 2022 | 1,750,000 | 1,769,933 | ||||
| New York Environmental Facilities Corp., Clean Water & Drinking Rev., “B”, 5%, 2033 | 1,535,000 | 1,622,556 | ||||
| Paragould, AR, Water Sewer & Electric Rev., AMBAC, 5.6%, 2010 (c) | 765,000 | 791,415 | ||||
| Rogers, AR Sewer Rev., Improvement, AMBAC, 5%, 2037 | 1,000,000 | 1,013,190 | ||||
| South Blount County, TN, Utility District Waterworks Rev., AGM, 5.25%, 2039 | 925,000 | 985,495 | ||||
| South Sebastian County, AR, Water Refunding Rev., NATL, 5%, 2038 | 1,000,000 | 964,810 | ||||
| Virgin Islands Water & Power Authority Rev., RADIAN, 5.3%, 2018 | 1,250,000 | 1,260,225 | ||||
| Wasco, CA, Semitropic Improvement District (Semitropic Water Storage District), “A”, 5%, 2038 | 1,325,000 | 1,324,907 | ||||
| $ | 22,491,087 | |||||
| Total Municipal Bonds (Identified Cost, $176,723,558) | $ | 182,190,200 | ||||
| Money Market Funds (v) - 2.8% | ||||||
| MFS Institutional Money Market Portfolio, 0.17%, at Cost and Net Asset Value | 5,133,873 | $ | 5,133,873 | |||
| Total Investments (Identified Cost, $181,857,431) | $ | 187,324,073 | ||||
| Other Assets, Less Liabilities - (0.1)% | (100,865) | |||||
| Net Assets - 100.0% | $ | 187,223,208 | ||||
23
Table of Contents
Portfolio of Investments – continued
Derivative Contracts at 3/31/10
Futures Contracts Outstanding at 3/31/10
| Description | Currency | Contracts | Value | Expiration Date | Unrealized Appreciation (Depreciation) | |||||
| Asset Derivatives | ||||||||||
| Interest Rate Futures | ||||||||||
| U.S. Treasury Note 10 yr (Short) | USD | 17 | $1,976,250 | Jun-10 | $6,940 | |||||
At March 31, 2010, the fund had sufficient cash and/or other liquid securities to cover any commitments under these derivative contracts.
See Portfolio Footnotes and Notes to Financial Statements
24
Table of Contents
PORTFOLIO OF INVESTMENTS
3/31/10
MFS® CALIFORNIA MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.
| Municipal Bonds - 98.1% | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Airport & Port Revenue - 3.1% | ||||||
| Long Beach, CA, Harbor Rev., “A”, FGIC, 5.25%, 2018 | $ | 3,500,000 | $ | 3,540,845 | ||
| Orange County, CA, Airport Rev., “A”, 5%, 2031 | 1,310,000 | 1,318,567 | ||||
| Port of Oakland, CA, “A”, NATL, 5%, 2026 | 2,955,000 | 2,762,482 | ||||
| Port of Oakland, CA, “K”, FGIC, 5.75%, 2010 (c) | 35,000 | 35,121 | ||||
| San Francisco, CA, City & County Airports Commission, International Airport Rev., 5.5%, 2019 (b) | 1,730,000 | 1,736,124 | ||||
| San Jose, CA, Airport Rev., “A”, BHAC, 5.5%, 2023 | 2,345,000 | 2,452,987 | ||||
| $ | 11,846,126 | |||||
| General Obligations - General Purpose - 3.8% | ||||||
| State of California, 5%, 2034 | $ | 2,200,000 | $ | 2,056,076 | ||
| State of California, 6%, 2039 | 3,000,000 | 3,165,120 | ||||
| State of California, 5.5%, 2040 | 4,000,000 | 3,988,120 | ||||
| State of California, AMBAC, 6.3%, 2010 | 3,000,000 | 3,065,430 | ||||
| State of California, AMBAC, 7%, 2010 | 2,000,000 | 2,059,440 | ||||
| $ | 14,334,186 | |||||
| General Obligations - Improvement - 0.2% | ||||||
| Guam Government, “A”, 6.75%, 2029 | $ | 85,000 | $ | 90,556 | ||
| Guam Government, “A”, 5.25%, 2037 | 815,000 | 701,723 | ||||
| Guam Government, “A”, 7%, 2039 | 95,000 | 101,853 | ||||
| $ | 894,132 | |||||
| General Obligations - Schools - 17.5% | ||||||
| Antelope Valley, CA (Union High School), “A”, NATL, 5%, 2027 | $ | 1,400,000 | $ | 1,406,692 | ||
| Beverly Hills, CA, Unified School District (Election of 2008), 0%, 2029 | 4,335,000 | 1,551,453 | ||||
| Butte Glenn Community College District, “A”, NATL, 5%, 2026 | 1,885,000 | 1,924,133 | ||||
| Cabrillo, CA, Community College District Capital Appreciation, “A”, NATL, 0%, 2028 | 1,000,000 | 349,600 | ||||
| Capistrano, CA, Union High School District, “A”, FGIC, 5.875%, 2020 | 1,185,000 | 1,210,146 | ||||
| Chabot-Las Positas, CA, Community College (Election of 2004), “B”, AMBAC, 5%, 2030 | 4,900,000 | 4,968,551 | ||||
| Chaffey, CA, Union High School District, “C”, AGM, 5%, 2027 | 1,000,000 | 1,027,420 | ||||
| Colton, CA, Joint Union School District, “A”, FGIC, 5.375%, 2026 | 1,200,000 | 1,218,588 | ||||
| Colton, CA, Joint Union School District, Election of 2001, “C”, FGIC, 0%, 2032 | 1,000,000 | 230,440 | ||||
| Colton, CA, Joint Union School District, Election of 2001, “C”, FGIC, 0%, 2033 | 3,000,000 | 637,140 | ||||
| Coronado, CA, Union School District, “A”, 5.7%, 2020 | 1,285,000 | 1,315,776 | ||||
| Desert, CA, Community College District, “C”, AGM, 5%, 2037 | 3,500,000 | 3,512,530 | ||||
| El Monte, CA, Union High School District, Election of 2008. “A”, ASSD GTY, 5.5%, 2034 | 2,000,000 | 2,087,520 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| General Obligations - Schools - continued | ||||||
| Escondido, CA, Union High School District (Election of 2008), “A”, ASSD GTY, 0%, 2034 | $ | 1,000,000 | $ | 555,170 | ||
| Foothill-De Anza, CA, Community College District, “A”, AMBAC, 4.5%, 2031 | 5,000,000 | 4,859,400 | ||||
| Foothill-De Anza, CA, Community College District, Election of 1999, “B”, FGIC, 0%, 2025 | 1,500,000 | 662,115 | ||||
| Glendale, CA, Community College District, Election 2002, “D”, NATL, 5%, 2031 | 2,710,000 | 2,753,875 | ||||
| Little Lake, CA, City School District, “A”, AGM, 6.125%, 2010 (c) | 1,035,000 | 1,059,405 | ||||
| Long Beach, CA, Community College District, Election of 2008, Capital Appreciation, “A”, AGM, 0%, 2028 | 1,375,000 | 472,643 | ||||
| Los Angeles, CA, Unified School District, “B”, AMBAC, 4.5%, 2031 | 3,325,000 | 3,074,461 | ||||
| Los Angeles, CA, Unified School District, “D”, 5%, 2034 | 2,000,000 | 2,021,980 | ||||
| Los Angeles, CA, Unified School District, “KRY”, 5.25%, 2023 | 4,485,000 | 4,888,829 | ||||
| Menlo Park, CA, City School District, Capital Appreciation (Election of 2006), 0%, 2041 | 7,080,000 | 1,019,591 | ||||
| Menlo Park, CA, City School District, Capital Appreciation (Election of 2006), 0%, 2044 | 5,000,000 | 1,767,600 | ||||
| Moorpark, CA, Unified School District, Election of 2008, “A”, ASSD GTY, 0%, 2033 | 3,000,000 | 671,970 | ||||
| Moreland, CA, School District, Election of 2002, “B”, FGIC, 0%, 2028 | 1,440,000 | 492,782 | ||||
| Napa Valley, CA, Unified School District, Election of 2006, “A”, 0%, 2029 | 3,385,000 | 1,092,509 | ||||
| Natomas Union School District, Election of 2002, “B”, FGIC, 5%, 2028 | 1,430,000 | 1,402,944 | ||||
| Oceanside, CA, Union School District, ASSD GTY, 0%, 2031 | 3,210,000 | 876,940 | ||||
| Oceanside, CA, Union School District, Election of 2000, “C”, NATL, 5.25%, 2032 | 1,940,000 | 1,960,079 | ||||
| Perris, CA, Union School District, “A”, FGIC, 0%, 2027 | 3,100,000 | 1,033,974 | ||||
| Sacramento, CA, City Unified School District, AGM, 0%, 2025 | 5,510,000 | 2,218,822 | ||||
| San Diego, CA, Community College (Election 2002), 5.25%, 2033 | 875,000 | 916,983 | ||||
| San Diego, CA, Unified School District (Election of 1998), AGM, 5.25%, 2028 | 1,200,000 | 1,349,496 | ||||
| San Ysidro, CA, School District, AMBAC, 6.125%, 2021 | 960,000 | 1,016,448 | ||||
| Santa Barbara, CA, Community College District, “A”, 5.25%, 2033 | 2,000,000 | 2,108,680 | ||||
| Santa Clara, CA, Unified School District, FGIC, 5.5%, 2019 | 2,210,000 | 2,259,393 | ||||
| Santa Monica, CA (Community College District, 2002 Election), “C”, NATL, 0%, 2027 | 2,000,000 | 728,120 | ||||
25
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| General Obligations - Schools - continued | ||||||
| Sausalito Marin City, CA, School District, Capital Appreciation, Election of 2004, “B”, NATL, 0%, 2039 | $ | 1,315,000 | $ | 210,347 | ||
| Sausalito Marin City, CA, School District, Capital Appreciation, Election of 2004, “B”, NATL, 0%, 2040 | 1,400,000 | 209,132 | ||||
| Shasta, CA, Union High School District, Election 2001, NATL, 0%, 2027 | 2,020,000 | 707,182 | ||||
| Walnut Valley, CA, Union School District, Election of 2000, “E”, AGM, 0%, 2028 | 1,535,000 | 513,289 | ||||
| Washington, CA, Union School District, Election of 1999, “A”, FGIC, 5.625%, 2021 | 1,000,000 | 1,037,320 | ||||
| West Contra Costa, CA, Unified School District, Election of 2005, Capital Appreciation, “C”, ASSD GTY, 0%, 2029 | 1,690,000 | 492,043 | ||||
| $ | 65,873,511 | |||||
| Healthcare Revenue - Hospitals - 18.0% | ||||||
| ABAG Finance Authority for Nonprofit Corp. Rev. (San Diego Hospital), “C”, 5.375%, 2020 | $ | 2,000,000 | $ | 2,012,120 | ||
| ABAG Finance Authority for Nonprofit Corp. Rev. (Sharp Healthcare), 6.25%, 2039 | 1,000,000 | 1,057,760 | ||||
| California Health Facilities Financing Authority Rev. (Catholic Healthcare West), “A”, 6%, 2029 | 1,500,000 | 1,601,730 | ||||
| California Health Facilities Financing Authority Rev. (Catholic Healthcare West), “G”, 5.25%, 2023 | 2,000,000 | 2,036,280 | ||||
| California Health Facilities Financing Authority Rev. (Cedars Sinai Medical Center), 5%, 2027 | 1,000,000 | 996,470 | ||||
| California Health Facilities Financing Authority Rev. (Cedars Sinai Medical Center), 5%, 2039 | 2,835,000 | 2,680,691 | ||||
| California Health Facilities Financing Authority Rev. (Children’s Hospital of Orange County), 6.25%, 2029 | 2,000,000 | 2,117,980 | ||||
| California Health Facilities Financing Authority Rev. (Providence Health & Services), “B”, 5.5%, 2039 | 1,000,000 | 1,041,230 | ||||
| California Health Facilities Financing Authority Rev. (Providence Health & Services), “C”, 6.5%, 2033 | 1,500,000 | 1,681,575 | ||||
| California Health Facilities Financing Authority Rev. (Providence Health & Services), “C”, 6.5%, 2038 | 1,750,000 | 1,947,628 | ||||
| California Health Facilities Financing Authority Rev. (Scripps Health), “A”, 5%, 2036 | 1,000,000 | 969,630 | ||||
| California Health Facilities Financing Authority Rev. (St. Joseph Health System), “A”, 5.75%, 2039 | 1,000,000 | 1,039,100 | ||||
| California Health Facilities Financing Authority Rev. (Sutter Health), “A”, 5%, 2042 | 3,000,000 | 2,714,130 | ||||
| California Health Facilities Financing Authority Rev., Health Facilities (Adventist Health Systems), “A”, 5%, 2033 | 1,750,000 | 1,624,245 | ||||
| California Municipal Finance Authority, COP (Community Hospitals, Central California), 5.25%, 2037 | 2,000,000 | 1,736,580 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| Healthcare Revenue - Hospitals - continued | ||||||
| California Municipal Finance Authority, COP (Community Hospitals, Central California), 5.5%, 2039 | $ | 1,000,000 | $ | 883,350 | ||
| California Statewide Communities Development Authority Rev., 5%, 2035 | 3,300,000 | 3,032,898 | ||||
| California Statewide Communities Development Authority Rev. (Daughters of Charity Health), “A”, 5.25%, 2024 | 1,000,000 | 938,800 | ||||
| California Statewide Communities Development Authority Rev. (Enloe Medical Center), CALHF, 6.25%, 2033 | 2,000,000 | 2,064,120 | ||||
| California Statewide Communities Development Authority Rev. (Enloe Medical Center), “A”, CALHF, 5.5%, 2023 | 1,000,000 | 1,015,990 | ||||
| California Statewide Communities Development Authority Rev. (Henry Mayo Newhall Memorial Hospital), “A”, CALHF, 5%, 2018 | 2,000,000 | 2,002,440 | ||||
| California Statewide Communities Development Authority Rev. (Huntington Memorial Hospital), 5%, 2027 | 2,000,000 | 1,950,220 | ||||
| California Statewide Communities Development Authority Rev. (John Muir Health), 5.125%, 2039 | 1,000,000 | 937,800 | ||||
| California Statewide Communities Development Authority Rev. (Kaiser Permanente), “A”, 5.5%, 2032 | 2,000,000 | 2,007,980 | ||||
| California Statewide Communities Development Authority Rev. (Los Angeles Children’s Hospital), 5.125%, 2019 | 4,000,000 | 4,010,400 | ||||
| California Statewide Communities Development Authority Rev. (St. Joseph Health System), FGIC, 5.75%, 2047 | 1,930,000 | 1,981,994 | ||||
| California Statewide Communities Development Authority Rev. (Sutter Health), “B”, 5.625%, 2042 | 2,000,000 | 2,003,120 | ||||
| California Statewide Communities Development Authority Rev. (Sutter Health), “B”, AMBAC, 5%, 2038 | 3,000,000 | 2,791,170 | ||||
| California Statewide Communities Development Authority Rev. (Valleycare Health Systems), “A”, 5.125%, 2031 | 2,000,000 | 1,745,500 | ||||
| California Statewide Communities Development Authority Rev., Health Facilities (Memorial Health Services), “A”, 6%, 2023 | 1,500,000 | 1,557,540 | ||||
| California Valley Health Systems, COP, 6.875%, 2023 (d) | 385,000 | 192,500 | ||||
| Central California Joint Powers Health Financing (Community Hospitals of Central California), 5.625%, 2011 (c) | 1,000,000 | 1,052,920 | ||||
| Madera County, CA, COP (Children’s Hospital Central California), 5.375%, 2036 | 1,000,000 | 963,770 | ||||
| Palomar Pomerado Health Care District, CA, COP, 6.75%, 2039 | 2,000,000 | 2,058,040 | ||||
| Rancho Mirage, CA, Joint Powers (Eisenhower Medical Center), “A”, 5%, 2047 | 2,000,000 | 1,794,300 | ||||
26
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Healthcare Revenue - Hospitals - continued | ||||||
| Santa Clara County, CA, Financing Authority Rev. (El Camino Hospital), AMBAC, 5.125%, 2041 | $ | 2,600,000 | $ | 2,581,488 | ||
| Sierra View, CA, Local Health Care District Rev., 5.25%, 2037 | 1,000,000 | 919,910 | ||||
| Washington Township, CA, Health Care District Rev., “A”, 6.25%, 2039 | 1,000,000 | 1,038,240 | ||||
| Washington Township, CA, Health Care Rev., 5%, 2018 | 1,000,000 | 1,004,560 | ||||
| West Contra Costa, CA, Healthcare District, AMBAC, 5.5%, 2029 | 2,000,000 | 2,035,300 | ||||
| $ | 67,821,499 | |||||
| Healthcare Revenue - Long Term Care - 1.9% | ||||||
| ABAG Finance Authority for Non-Profit Corps. (Casa de las Campanas), 6%, 2037 | $ | 2,615,000 | $ | 2,611,339 | ||
| California Health Facilities Financing Authority Rev. (Paradise Valley Estates), 5.125%, 2022 | 1,000,000 | 990,790 | ||||
| California Statewide Communities Development Authority Rev. (American Baptist Homes of the West), 6.25%, 2039 | 1,500,000 | 1,466,430 | ||||
| California Statewide Communities Development Authority Rev. (Senior Living Presbyterian Homes), 4.875%, 2036 | 1,000,000 | 817,160 | ||||
| La Verne, CA, COP (Brethren Hillcrest Homes), “B”, 6.625%, 2025 | 1,000,000 | 960,250 | ||||
| Millbrae, CA, Residential Facilities Rev. (Magnolia of Millbrae), “A”, 7.375%, 2027 | 385,000 | 381,801 | ||||
| $ | 7,227,770 | |||||
| Industrial Revenue - Environmental Services - 0.9% | ||||||
| California Pollution Control Financing Authority, Solid Waste Disposal Rev. (Browning Ferris, Inc.), “A”, 5.8%, 2016 | $ | 2,000,000 | $ | 2,002,580 | ||
| California Pollution Control Financing Authority, Solid Waste Disposal Rev. (Waste Management, Inc.), “A-2”, 5.4%, 2025 | 1,250,000 | 1,265,913 | ||||
| $ | 3,268,493 | |||||
| Industrial Revenue - Other - 0.5% | ||||||
| California Enterprise Development Authority Sewer Facilities Rev. (Anheuser-Busch), 5.3%, 2047 | $ | 1,000,000 | $ | 931,070 | ||
| Virgin Islands Public Finance Authority, Refinery Facilities Rev. (Hovensa Coker Project), 5.875%, 2022 | 960,000 | 957,830 | ||||
| $ | 1,888,900 | |||||
| Miscellaneous Revenue - Entertainment & Tourism - 0.2% | ||||||
| Agua Caliente Band of Cahuilla Indians, CA, Rev., 6%, 2018 (n) | $ | 750,000 | $ | 731,408 | ||
| Miscellaneous Revenue - Other - 1.7% | ||||||
| ABAG Finance Authority Rev. (Jackson Lab), 5.75%, 2037 | $ | 4,115,000 | $ | 4,064,386 | ||
| California Infrastructure & Economic Development Bank Rev. (Walt Disney Family Museum), 5.25%, 2033 | 1,340,000 | 1,338,124 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| Miscellaneous Revenue - Other - continued | ||||||
| San Diego County, CA, COP (Burnham Institute for Medical Research), 5%, 2034 | $ | 1,000,000 | $ | 813,430 | ||
| $ | 6,215,940 | |||||
| Parking - 0.3% | ||||||
| San Francisco, CA, Union Square, NATL, 6%, 2020 | $ | 1,000,000 | $ | 1,052,340 | ||
| Sales & Excise Tax Revenue - 0.5% | ||||||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “A”, 5.5%, 2028 | $ | 1,770,000 | $ | 1,856,659 | ||
| Single Family Housing - Local - 0.1% | ||||||
| California Rural Home Mortgage Finance Authority Rev., GNMA, 7.3%, 2031 | $ | 10,000 | $ | 10,532 | ||
| California Rural Home Mortgage Finance Authority Rev., Mortgage Backed Securities Program, “B4”, GNMA, 6.35%, 2029 | 20,000 | 20,889 | ||||
| Pomona, CA, Single Family Mortgage Rev., ETM, GNMA, 7.375%, 2010 (c) | 160,000 | 160,771 | ||||
| $ | 192,192 | |||||
| Single Family Housing - State - 2.4% | ||||||
| California Housing Finance Agency Rev., Housing Project, “A”, 4.95%, 2036 | $ | 3,400,000 | $ | 2,767,260 | ||
| California Housing Finance Agency Rev., Home Mortgage, Capital Appreciation, AGM, 0%, 2019 | 750,000 | 435,750 | ||||
| California Housing Finance Agency Rev., Home Mortgage, Capital Appreciation, NATL, 0%, 2028 | 3,290,000 | 1,057,505 | ||||
| California Housing Finance Agency Rev., Home Mortgage, “E”, FGIC, 5.05%, 2026 | 2,480,000 | 2,267,290 | ||||
| California Housing Finance Agency Rev., Home Mortgage, “I”, 4.75%, 2031 | 3,000,000 | 2,561,610 | ||||
| $ | 9,089,415 | |||||
| Solid Waste Revenue - 0.8% | ||||||
| California Pollution Control Financing Authority, Solid Waste Disposal Rev. (West County Resource Recovery), “A”, LOC, 5.125%, 2014 | $ | 825,000 | $ | 825,891 | ||
| South Bayside Waste Management Authority, Solid Waste Enterprise Rev. (Shoreway Environmental), “A”, 6.25%, 2029 | 2,000,000 | 2,134,580 | ||||
| $ | 2,960,471 | |||||
| State & Agency - Other - 1.1% | ||||||
| Pasadena, CA, COP, Old Pasadena Parking Facilities Project, 6.25%, 2018 | $ | 2,225,000 | $ | 2,487,661 | ||
| Sacramento County, CA, COP (Capital Projects), AMBAC, 5.75%, 2018 | 1,500,000 | 1,516,365 | ||||
| $ | 4,004,026 | |||||
| State & Local Agencies - 13.4% | ||||||
| Banning, CA, COP, Water Systems Improvement Project, AMBAC, ETM, 8%, 2019 (c) | $ | 725,000 | $ | 889,568 | ||
| Calabasas, CA, Certificate Participants (City Hall & Civic Center Project), AMBAC, 4.5%, 2041 | 1,000,000 | 864,800 | ||||
27
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| State & Local Agencies - continued | ||||||
| California Department of Water Resources, Power Supply Rev., “C”, 5.25%, 2028 | $ | 2,500,000 | $ | 2,370,875 | ||
| California Public Works Board Lease Rev. (Various Capital Projects), “G-1”, 5.75%, 2030 | 2,000,000 | 1,999,980 | ||||
| California Public Works Board Lease Rev., Department of Corrections State Prison, “A”, 7.4%, 2010 | 5,000,000 | 5,120,150 | ||||
| California Public Works Board, Department of Justice, “D”, 5.25%, 2020 | 1,565,000 | 1,567,739 | ||||
| California Public Works Broad Lease Rev., 6.25%, 2034 | 1,500,000 | 1,547,805 | ||||
| California Public Works Broad Lease Rev., Department of Education (Riverside Campus), 6%, 2026 | 2,000,000 | 2,073,000 | ||||
| Delaware Valley, PA, Regional Finance Authority, “C”, FRN, 0.919%, 2037 | 2,320,000 | 1,645,785 | ||||
| Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., FGIC, 5%, 2035 | 1,745,000 | 1,667,941 | ||||
| Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., Enhanced, “A”, AGM, 0% to 2010, 4.55% to 2022 | 3,000,000 | 2,769,390 | ||||
| Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., Enhanced, “A”, 5%, 2045 | 5,500,000 | 4,719,055 | ||||
| Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., Enhanced, “A”, FGIC, 5%, 2035 | 2,000,000 | 1,776,220 | ||||
| Los Angeles, CA, COP, Real Property Program, AMBAC, 5.3%, 2027 | 3,000,000 | 3,039,960 | ||||
| Los Angeles, CA, Municipal Improvement Corp. Lease Rev., “B”, ASSD GTY, 5.5%, 2030 | 2,610,000 | 2,763,546 | ||||
| Pomona, CA, Public Financing Authority Rev., “A”, AMBAC, 5%, 2042 | 3,735,000 | 3,486,772 | ||||
| Pomona, CA, Public Financing Authority Rev., “P”, 6.25%, 2010 | 1,095,000 | 1,113,429 | ||||
| Sacramento, CA, City Financing Authority Rev., Capital Improvement, 5.5%, 2010 (c) | 1,635,000 | 1,664,414 | ||||
| San Diego, CA, Regional Building Authority Lease Rev. (County Operations Center & Annex), “A”, 5.375%, 2036 | 3,000,000 | 3,085,680 | ||||
| San Francisco, CA, City & County, COP (San Bruno Jail No. 3), AMBAC, 5.25%, 2033 | 3,930,000 | 3,934,402 | ||||
| Yuba, CA, Levee Financing Authority Rev. (Levee Financing Project), “A”, ASSD GTY, 5%, 2038 | 2,170,000 | 2,137,515 | ||||
| $ | 50,238,026 | |||||
| Tax - Other - 0.2% | ||||||
| Guam Government Ltd. Obligation Rev., “A”, 5.375%, 2024 | $ | 445,000 | $ | 460,379 | ||
| Guam Government Ltd. Obligation Rev., “A”, 5.625%, 2029 | 145,000 | 148,513 | ||||
| $ | 608,892 | |||||
| Tax Assessment - 4.9% | ||||||
| Bay Area Governments Association, Tax Allocation, “A”, AMBAC, 5%, 2033 | $ | 3,700,000 | $ | 3,226,141 | ||
| Issuer | Shares/Par | Value ($) | ||||
| Tax Assessment - continued | ||||||
| Fontana, CA, Redevelopment Agency Tax Allocation (Jurupa Hills Redevelopment Project), “A”, 5.5%, 2027 | $ | 3,350,000 | $ | 3,351,675 | ||
| Glendale, CA, Redevelopment Agency, Tax Allocation Rev. (Centeral Glendale Redevelopment Project), 5.5%, 2024 | 1,750,000 | 1,741,163 | ||||
| Orange County, CA, Community Facilities District, Special Tax (Rancho Santa Margarita), “A”, 5.55%, 2017 | 1,000,000 | 1,003,150 | ||||
| Riverside County, CA, Redevelopment Agency, Tax Allocation, “A”, XLCA, 5%, 2037 | 1,900,000 | 1,654,862 | ||||
| San Diego, CA, Redevelopment Agency, Tax Allocation (Centre City), “B”, AMBAC, 5.3%, 2020 | 1,250,000 | 1,253,562 | ||||
| San Diego, CA, Redevelopment Agency, Tax Allocation Rev. (Centre City), “A”, AMBAC, 5.25%, 2025 | 2,360,000 | 2,342,654 | ||||
| San Francisco, CA, City & County Redevelopment Financing Authority, Tax Allocation (Mission Bay North Redevelopment), “C”, 6.375%, 2032 | 1,000,000 | 1,048,920 | ||||
| San Francisco, CA, City & County Redevelopment Financing Authority, Tax Allocation (Mission Bay North Redevelopment), “C”, 6.5%, 2039 | 1,000,000 | 1,041,710 | ||||
| Santa Fe Springs, CA, Community Development Commission, Tax Allocation, NATL, 0%, 2026 | 4,720,000 | 1,599,136 | ||||
| $ | 18,262,973 | |||||
| Tobacco - 3.3% | ||||||
| Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., “A-1”, 6.75%, 2013 (c) | $ | 2,645,000 | $ | 3,073,649 | ||
| Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., “A-1”, 6.25%, 2013 (c) | 2,470,000 | 2,730,239 | ||||
| Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., “A-1”, 5.75%, 2047 | 8,000,000 | 5,633,920 | ||||
| Inland Empire, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., Asset Backed, Capital Appreciation, “C-1”, 0%, 2036 | 5,000,000 | 463,650 | ||||
| Silicon Valley Tobacco Securitization Authority, CA, Tobacco Settlement Rev. (Santa Clara), “A”, 0%, 2036 | 5,000,000 | 501,400 | ||||
| $ | 12,402,858 | |||||
| Toll Roads - 0.1% | ||||||
| Foothill/Eastern Corridor Agency, CA, Toll Road Rev., NATL, 5.125%, 2019 | $ | 500,000 | $ | 489,765 | ||
| Universities - Colleges - 8.1% | ||||||
| California Educational Facilities Authority Rev. (Claremont Graduate University), “A”, 6%, 2033 | $ | 1,500,000 | $ | 1,585,830 | ||
| California Educational Facilities Authority Rev. (Dominican University), 5%, 2036 | 1,150,000 | 944,012 | ||||
| California Educational Facilities Authority Rev. (Fresno Pacific University), “A”, 6.75%, 2019 | 2,000,000 | 1,956,780 | ||||
28
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Universities - Colleges - continued | ||||||
| California Educational Facilities Authority Rev. (Loyola Marymount University), “A”, 5.125%, 2040 | $ | 1,500,000 | $ | 1,487,415 | ||
| California Educational Facilities Authority Rev. (Lutheran University), “C”, 5%, 2029 | 2,500,000 | 2,326,225 | ||||
| California Educational Facilities Authority Rev. (Pepperdine University), “A”, AMBAC, 5%, 2035 | 1,000,000 | 1,005,310 | ||||
| California Educational Facilities Authority Rev. (Pitzer College), 6%, 2040 | 3,000,000 | 3,121,080 | ||||
| California Educational Facilities Authority Rev. (Santa Clara University), “A”, NATL, 5%, 2027 | 1,340,000 | 1,363,450 | ||||
| California Educational Facilities Authority Rev. (University Financing Project), 5%, 2017 | 685,000 | 614,383 | ||||
| California Educational Facilities Authority Rev. (University Financing Project), 5%, 2026 | 1,315,000 | 1,016,127 | ||||
| California Educational Facilities Authority Rev. (University of La Verne), “A”, 5%, 2029 | 1,500,000 | 1,365,435 | ||||
| California Educational Facilities Authority Rev. (University of The Pacific), 5.25%, 2029 | 1,265,000 | 1,285,885 | ||||
| California Educational Facilities Authority Rev. (University of The Pacific), 5.5%, 2039 | 1,800,000 | 1,845,684 | ||||
| California Educational Facilities Authority Rev., “B”, 6.625%, 2010 (c) | 170,000 | 173,296 | ||||
| California Municipal Finance Authority Rev. (Biola University), 5.8%, 2028 | 2,000,000 | 2,060,480 | ||||
| California Public Works Board Lease Rev. (Regents University), 5%, 2034 | 1,500,000 | 1,517,310 | ||||
| California State University Rev., “A”, 5.25%, 2034 | 2,400,000 | 2,469,672 | ||||
| California Statewide Communities, Notre Dame de Namur University, 6.625%, 2033 | 1,000,000 | 856,280 | ||||
| University of California Rev., “J”, AGM, 4.5%, 2035 (f) | 3,800,000 | 3,639,868 | ||||
| $ | 30,634,522 | |||||
| Universities - Dormitories - 1.0% | ||||||
| California Statewide Communities Development Authority Rev. (Lancer Educational Student Housing Project), 5.625%, 2033 | $ | 2,000,000 | $ | 1,607,380 | ||
| California Statewide Communities Development Authority Rev. (Student Housing, SUCI East Campus), 6%, 2040 | 2,000,000 | 2,012,080 | ||||
| $ | 3,619,460 | |||||
| Universities - Secondary Schools - 1.3% | ||||||
| California Statewide Communities Development Authority Rev. (Aspire Public Schools), 6.125%, 2046 | $ | 1,300,000 | $ | 1,260,350 | ||
| California Statewide Communities Development Authority Rev. (Escondido Charter High School), 7.5%, 2011 (c) | 1,000,000 | 1,111,520 | ||||
| California Statewide Communities Development Authority Rev., Aspire Public Schools (Oakland Project), “A”, 7.25%, 2031 | 915,000 | 866,587 | ||||
| Los Angeles, CA, COP, 5.7%, 2018 | 1,600,000 | 1,606,016 | ||||
| $ | 4,844,473 | |||||
| Issuer | Shares/Par | Value ($) | ||||
| Utilities - Investor Owned - 0.6% | ||||||
| Chula Vista, CA, Industrial Development Rev. (San Diego Gas), “B”, 5%, 2027 | $ | 2,500,000 | $ | 2,408,425 | ||
| Utilities - Municipal Owned - 3.6% | ||||||
| California Infrastructure & Economic Development Bank Rev. (California Independent System Corp.), “A”, 6%, 2030 | $ | 3,755,000 | $ | 3,956,418 | ||
| Los Angeles, CA, Department of Water & Power Rev., “A-1”, 5.25%, 2038 | 3,000,000 | 3,174,360 | ||||
| Northern California Power Agency Public Power Rev., 5.85%, 2010 | 880,000 | 888,765 | ||||
| Puerto Rico Electric Power Authority, Power Rev., “XX”, 5.25%, 2040 | 1,740,000 | 1,716,493 | ||||
| Tuolumne Wind Project Authority Rev. (Tuolomne Co.), “A”, 5.625%, 2029 | 2,000,000 | 2,119,380 | ||||
| Virgin Islands Water & Power Authority Rev., 5.5%, 2017 | 800,000 | 802,504 | ||||
| Virgin Islands Water & Power Authority, Electric System Rev., 5.125%, 2013 | 1,000,000 | 1,008,070 | ||||
| $ | 13,665,990 | |||||
| Utilities - Other - 1.2% | ||||||
| California M-S-R Energy Authority Gas Rev., “A”, 7%, 2034 | $ | 1,750,000 | $ | 1,988,053 | ||
| Southern California Public Power Authority (Natural Gas Project No. 1), “A”, 5%, 2033 | 2,565,000 | 2,393,427 | ||||
| $ | 4,381,480 | |||||
| Water & Sewer Utility Revenue - 7.4% | ||||||
| Brentwood, CA, Infrastructure Financing Authority Water Rev., 5.75%, 2038 | $ | 1,080,000 | $ | 1,160,438 | ||
| California Department of Water Resources, Center Valley Project Rev., 7%, 2012 | 1,070,000 | 1,243,468 | ||||
| California Department of Water Resources, Center Valley Project Rev., FGIC, 5%, 2012 (c) | 20,000 | 22,111 | ||||
| California Department of Water Resources, Center Valley Project Rev., FGIC, 5%, 2029 | 1,980,000 | 2,035,301 | ||||
| California Department of Water Resources, Center Valley Project Rev., ETM, 7%, 2012 (c) | 20,000 | 23,156 | ||||
| El Monte, CA, Water Authority Rev., Water Systems Project, AMBAC, 6%, 2010 (c) | 1,065,000 | 1,109,964 | ||||
| Hollister, CA, Joint Powers Financing Authority Wastewater Rev. (Refining & Improvement Project), “1”, AGM, 5%, 2037 | 4,000,000 | 3,751,520 | ||||
| Livermore Amador Valley Water Management Rev., “A”, AMBAC, 5%, 2031 | 4,875,000 | 4,883,288 | ||||
| Ontario, CA, COP, Water Systems Improvement Project, NATL, 5%, 2034 | 2,000,000 | 1,945,080 | ||||
| Placerville, CA, Public Financing Authority Rev. (Wastewater Systems Refining & Improvement Project), XLCA, 5%, 2034 | 2,000,000 | 1,710,320 | ||||
| Sacramento County, CA, Sanitation District, Financing Authority Rev., NATL, 5%, 2035 | 960,000 | 973,805 | ||||
| San Diego, CA, Public Facilities Financing Authority Sewer Rev., “A”, 5%, 2028 | 350,000 | 368,018 | ||||
29
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Water & Sewer Utility Revenue - continued | ||||||
| San Diego, CA, Public Facilities Financing Authority Water Rev., “A”, 5.25%, 2038 | $ | 1,500,000 | $ | 1,550,940 | ||
| Wasco, CA, Semitropic Improvement District (Semitropic Water Storage District), “A”, 5%, 2038 | 2,740,000 | 2,739,808 | ||||
| West Sacramento, CA, Financing Authority Rev., Water Systems Improvement Project, FGIC, 5%, 2032 | 2,750,000 | 2,724,260 | ||||
| Woodland, CA, Financing Authority Wastewater Rev., 5%, 2033 | 1,750,000 | 1,712,550 | ||||
| $ | 27,954,027 | |||||
| Total Municipal Bonds (Identified Cost, $373,740,784) | $ | 368,767,959 | ||||
| Money Market Funds (v) - 1.5% | |||||
| Issuer | Shares/Par | Value ($) | |||
| MFS Institutional Money Market Portfolio, 0.17%, at Cost and Net Asset Value | 5,620,967 | $ | 5,620,967 | ||
| Total Investments (Identified Cost, $379,361,751) | $ | 374,388,926 | |||
| Other Assets, Less Liabilities - 0.4% | 1,380,340 | ||||
| Net Assets - 100.0% | $ | 375,769,266 | |||
Derivative Contracts at 3/31/10
Futures Contracts Outstanding at 3/31/10
| Description | Currency | Contracts | Value | Expiration Date | Unrealized Appreciation (Depreciation) | |||||
| Asset Derivatives | ||||||||||
| Interest Rate Futures | ||||||||||
| U.S. Treasury Bond 30 yr (Short) | USD | 81 | $9,406,125 | Jun-10 | $9,209 | |||||
| U.S. Treasury Note 10 yr (Short) | USD | 35 | 4,068,750 | Jun-10 | 14,289 | |||||
| $23,498 | ||||||||||
At March 31, 2010, the fund had sufficient cash and/or other liquid securities to cover any commitments under these derivative contracts.
See Portfolio Footnotes and Notes to Financial Statements
30
Table of Contents
PORTFOLIO OF INVESTMENTS
3/31/10
MFS® FLORIDA MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.
| Municipal Bonds - 96.8% | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Airport & Port Revenue - 6.7% | ||||||
| Greater Orlando Aviation Authority Rev., “A”, FGIC, 5.25%, 2018 | $ | 1,000,000 | $ | 1,005,130 | ||
| Lee County, FL, Airport Rev., “A”, AGM, 5.875%, 2018 | 1,000,000 | 1,024,008 | ||||
| Miami-Dade County, FL, Aviation Rev. (Miami International Airport), “B”, AGM, 5%, 2041 | 1,000,000 | 987,490 | ||||
| Pensacola, FL, Airport Rev., “B”, NATL, 5.625%, 2014 | 375,000 | 375,596 | ||||
| $ | 3,392,224 | |||||
| General Obligations - General Purpose - 4.1% | ||||||
| Palm Beach County, FL, Industrial Development Rev. (South Florida Fair Project), NATL, 5.5%, 2020 | $ | 1,000,000 | $ | 1,000,460 | ||
| Palm Beach County, FL, Public Improvement Rev. “2”, 5.375%, 2028 | 1,000,000 | 1,095,860 | ||||
| $ | 2,096,320 | |||||
| General Obligations - Schools - 7.6% | ||||||
| Florida Board of Education, Capital Outlay, 9.125%, 2014 (f) | $ | 2,075,000 | $ | 2,312,505 | ||
| Florida Board of Education, Capital Outlay, ETM, 9.125%, 2014 (c) | 400,000 | 501,440 | ||||
| Florida Board of Education, Public Education, “J”, 5%, 2033 | 1,000,000 | 1,017,550 | ||||
| $ | 3,831,495 | |||||
| Healthcare Revenue - Hospitals - 21.9% | ||||||
| Citrus County, FL, Hospital Development Authority Rev. (Citrus Memorial Hospital), 6.25%, 2023 | $ | 410,000 | $ | 410,820 | ||
| Cullman County, AL, Health Care Authority (Cullman Regional Medical Center), “A”, 6.75%, 2029 | 105,000 | 107,151 | ||||
| Hillsborough County, FL, Industrial Development Authority Rev. (University Community Hospital), NATL, 6.5%, 2019 | 1,000,000 | 1,052,130 | ||||
| Hillsborough County, FL, Industrial Development Authority Rev. (University Community Hospital), “A”, 5.625%, 2029 | 300,000 | 269,469 | ||||
| Indiana Health & Educational Facilities Authority, Hospital Rev. (Community Foundation of Northwest Indiana), “A”, 6.375%, 2031 | 120,000 | 121,985 | ||||
| Jacksonville, FL, Health Facilities Rev. (Ascension Health), “A”, 5.25%, 2032 | 1,000,000 | 1,016,350 | ||||
| Jacksonville, FL, Health Facilities Rev. (Brooks Health Systems), 5.25%, 2038 | 500,000 | 479,300 | ||||
| Leesburg, FL, Hospital Rev. (Leesburg Regional Medical Center), 5.5%, 2032 | 750,000 | 693,825 | ||||
| Louisville & Jefferson County, KY, Metropolitan Government Healthcare Systems Rev. (Norton Healthcare, Inc.), 5.25%, 2036 | 305,000 | 291,970 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| Healthcare Revenue - Hospitals - continued | ||||||
| Marshall County, AL, Health Care Authority Rev., “A”, 6.25%, 2022 | $ | 500,000 | $ | 513,885 | ||
| Miami Beach, FL, Health Facilities Authority Rev. (Mount Sinai Medical Center), “A”, 6.7%, 2019 | 250,000 | 251,515 | ||||
| Michigan Hospital Finance Authority Rev. (Henry Ford Health System), 5.625%, 2029 | 30,000 | 29,457 | ||||
| Michigan Hospital Finance Authority Rev. (Henry Ford Health System), 5.75%, 2039 | 320,000 | 308,960 | ||||
| New Hampshire Business Finance Authority Rev. (Elliot Hospital Obligated Group), “A”, 6%, 2027 | 225,000 | 228,083 | ||||
| New Hampshire Health & Education Facilities Authority Rev. (Exeter Hospital), 6%, 2024 | 500,000 | 512,730 | ||||
| Orange County, FL, Health Facilities Authority Hospital Rev. (Orlando Regional Healthcare), “C”, 5.25%, 2035 | 1,000,000 | 960,240 | ||||
| Rhode Island Health & Educational Building Corp., Hospital Financing (Lifespan Obligated Group), 6.5%, 2012 (c) | 500,000 | 561,680 | ||||
| South Broward, FL, Hospital District Rev., 5%, 2036 | 1,015,000 | 1,017,639 | ||||
| South Dakota Health & Education Facilities Authority Rev. (Prairie Lakes Health Care System), 5.625%, 2032 | 500,000 | 492,865 | ||||
| St. Louis Park, MN, Health Care Facilities Rev. (Nicollett Health Services), 5.75%, 2039 | 265,000 | 263,487 | ||||
| St. Petersburg, FL, Health Facilities Authority Rev., 6.5%, 2039 | 70,000 | 75,709 | ||||
| Tallahassee, FL, Health Facilities Rev. (Tallahassee Memorial Healthcare, Inc.), 6.25%, 2020 | 300,000 | 302,841 | ||||
| Tallahassee, FL, Health Facilities Rev. (Tallahassee Memorial Regional Medical Center), NATL, 6.625%, 2013 | 625,000 | 625,106 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (ProHealth Care, Inc. Obligated Group), 6.625%, 2039 | 320,000 | 344,253 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (Wheaton Franciscan Services), “B”, 5.125%, 2020 | 130,000 | 127,993 | ||||
| $ | 11,059,443 | |||||
| Healthcare Revenue - Long Term Care - 0.6% | ||||||
| Orange County, FL, Health Facilities Authority Rev. (Orlando Lutheran Towers), 5.7%, 2026 | $ | 250,000 | $ | 215,045 | ||
| St. John’s County, FL, Industrial Development Authority (Bayview Project), “A”, 5.2%, 2027 | 150,000 | 112,536 | ||||
| $ | 327,581 | |||||
| Human Services - 0.6% | ||||||
| Orange County, FL, Health Facilities Authority Rev. (GF/Orlando Healthcare Facilities), 8.875%, 2021 | $ | 300,000 | $ | 302,721 | ||
31
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Industrial Revenue - Chemicals - 1.4% | ||||||
| Brazos River, TX, Brazoria County Environmental Rev. (Dow Chemical, Co.), “A-7”, 6.625%, 2033 | $ | 500,000 | $ | 507,430 | ||
| Red River Authority, TX, Pollution Control Rev. (Celanese Project) “B”, 6.7%, 2030 | 200,000 | 195,626 | ||||
| $ | 703,056 | |||||
| Industrial Revenue - Environmental Services - 0.6% | ||||||
| Director of the State of Nevada Department of Business & Industry Rev. (Republic Services, Inc.), 5.625%, 2026 (b) | $ | 300,000 | $ | 310,782 | ||
| Industrial Revenue - Other - 1.3% | ||||||
| Park Creek Metropolitan District, CO, Rev. (Custodial Receipts), “CR-2”, 7.875%, 2032 (b)(n) | $ | 160,000 | $ | 163,200 | ||
| Tooele County, UT, Hazardous Waste Treatment Rev. (Union Pacific Corp.), 5.7%, 2026 | 500,000 | 502,190 | ||||
| $ | 665,390 | |||||
| Industrial Revenue - Paper - 1.1% | ||||||
| Delta County, MI, Economic Development Corp., Environmental Improvements Rev. (Mead Westvaco Escanaba), “A”, 6.25%, 2012 (c) | $ | 500,000 | $ | 552,705 | ||
| Miscellaneous Revenue - Other - 1.3% | ||||||
| Madison County, FL, Rev. (Twin Oaks Project), “A”, 6%, 2025 | $ | 120,000 | $ | 94,615 | ||
| Miami-Dade County, FL, Special Obligations, Capital Appreciation, “A”, NATL, 0%, 2032 | 2,000,000 | 420,720 | ||||
| Summit County, OH, Port Authority Building Rev. (Seville Project), “A”, 5.1%, 2025 | 200,000 | 169,028 | ||||
| $ | 684,363 | |||||
| Multi-Family Housing Revenue - 2.7% | ||||||
| Bay County, FL, Housing Finance Authority, Multi-Family Rev. (Andrews Place II Apartments), AGM, 5%, 2035 | $ | 500,000 | $ | 471,845 | ||
| Florida Housing Finance Corp., Housing Rev. (Crossing at University Apartments), “Q-1”, AMBAC, 5.1%, 2018 | 830,000 | 828,846 | ||||
| Palm Beach County, FL, Housing Finance Authority Rev. (Westlake Apartments Project, Phase II), AGM, 4.3%, 2012 | 60,000 | 61,112 | ||||
| $ | 1,361,803 | |||||
| Sales & Excise Tax Revenue - 3.9% | ||||||
| Pasco County, FL, Sales Tax Rev. (Half Central), AMBAC, 5%, 2023 | $ | 1,000,000 | $ | 1,015,940 | ||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “A”, 0%, 2033 | 490,000 | 110,750 | ||||
| Volusia County, FL, Tourist Development Tax Rev., AGM, 5%, 2034 | 815,000 | 830,860 | ||||
| $ | 1,957,550 | |||||
| Single Family Housing - Local - 0.8% | ||||||
| Brevard County, FL, Housing Finance Authority Rev., “B”, GNMA, 6.5%, 2022 | $ | 24,000 | $ | 25,741 | ||
| Issuer | Shares/Par | Value ($) | ||||
| Single Family Housing - Local - continued | ||||||
| Lee County, FL, Housing Finance Authority Rev. (Multi-County Program), “A-1”, GNMA, 7.2%, 2033 | $ | 20,000 | $ | 20,484 | ||
| Manatee County, FL, Housing Finance Mortgage Rev. (Single Family, Subordinated), Series 3, GNMA, 5.3%, 2028 | 30,000 | 30,110 | ||||
| Miami-Dade County, FL, Housing Finance Authority Rev. (Home Ownership Mortgage), “A-1”, GNMA, 5.2%, 2031 | 320,000 | 322,778 | ||||
| $ | 399,113 | |||||
| Single Family Housing - State - 1.5% | ||||||
| Florida Housing Finance Corp. Rev. (Homeowner Mortgage), “1”, GNMA, 4.8%, 2031 | $ | 795,000 | $ | 754,344 | ||
| Solid Waste Revenue - 1.0% | ||||||
| Delaware County, PA, Industrial Development Authority, Resource Recovery Facilities Rev. (American Ref-Fuel Co.), “A”, 6.2%, 2019 | $ | 200,000 | $ | 200,142 | ||
| Palm Beach County, FL, Solid Waste Authority Rev. Improvement, BHAC, 5%, 2027 | 295,000 | 312,597 | ||||
| $ | 512,739 | |||||
| State & Local Agencies - 3.2% | ||||||
| California Public Works Board Lease Rev. (Various Capital Projects), “G-1”, 5.75%, 2030 | $ | 80,000 | $ | 79,999 | ||
| Florida Municipal Loan Council Rev., “C”, NATL, 5.25%, 2022 | 1,000,000 | 1,040,730 | ||||
| Miami-Dade County, FL, School Board, COP, “B”, ASSD GTY, 5%, 2033 | 500,000 | 495,925 | ||||
| $ | 1,616,654 | |||||
| Tax - Other - 0.3% | ||||||
| Virgin Islands Public Finance Authority Rev., “A”, 5.25%, 2024 | $ | 130,000 | $ | 132,178 | ||
| Tax Assessment - 2.7% | ||||||
| Arborwood Community Development District, FL, Special Assessment (Master Infrastructure Projects), “B”, 5.1%, 2014 | $ | 180,000 | $ | 133,043 | ||
| Ave Maria Stewardship Community District, FL, “A”, 5.125%, 2038 | 185,000 | 132,331 | ||||
| Concord Station Community Development District, FL, Special Assessment, 5%, 2015 | 130,000 | 85,730 | ||||
| Concorde Estates Community Development District, FL, “B”, 5%, 2011 (d) | 180,000 | 67,500 | ||||
| Durbin Crossing Community Development District, FL, Special Assessment, “B-1”, 4.875%, 2010 | 125,000 | 106,008 | ||||
| Greyhawk Landing Community Development District, FL, Special Assessment, “B”, 7%, 2012 | 15,000 | 14,766 | ||||
| Killarney Community Development District, FL, Special Assessment, “B”, 5.125%, 2010 (a) | 85,000 | 51,003 | ||||
| Middle Village Community Development District, FL, Special Assessment, “A”, 5.8%, 2022 | 80,000 | 74,664 | ||||
| New Port Tampa Bay Community Development District, FL, Special Assessment, “B”, 5.3%, 2012 (d) | 200,000 | 64,076 | ||||
32
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Tax Assessment - continued | ||||||
| North Springs Improvement District, FL, Special Assessment (Parkland Golf Country Club), “B-2”, 5.125%, 2015 | $ | 100,000 | $ | 90,365 | ||
| Old Palm Community Development District, FL, Special Assessment (Palm Beach Gardens), “B”, 5.375%, 2014 | 85,000 | 77,126 | ||||
| Panther Trace II, Community Development District, FL, Special Assessment, “B”, 5%, 2010 | 35,000 | 33,506 | ||||
| Parkway Center Community Development District, FL, Special Assessment, “B”, 5.625%, 2014 | 75,000 | 54,125 | ||||
| Sterling Hill Community Development District, FL, Special Assessment, 5.5%, 2010 | 60,000 | 54,593 | ||||
| Tuscany Reserve Community Development District, FL, Special Assessment, “B”, 5.25%, 2016 | 220,000 | 143,510 | ||||
| Watergrass Community Development District, FL, Special Assessment, “B”, 4.875%, 2010 | 125,000 | 105,073 | ||||
| Wentworth Estates Community Development District, FL, Special Assessment, “B”, 5.125%, 2012 (d) | 155,000 | 57,835 | ||||
| $ | 1,345,254 | |||||
| Tobacco - 2.8% | ||||||
| Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 5.875%, 2030 | $ | 500,000 | $ | 421,185 | ||
| Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 5.875%, 2047 | 1,050,000 | 761,954 | ||||
| Louisiana Tobacco Settlement Authority Rev., “2001-B”, 5.875%, 2039 | 250,000 | 232,130 | ||||
| $ | 1,415,269 | |||||
| Universities - Colleges - 6.8% | ||||||
| Florida Board Regents, Housing Rev., NATL, 5.3%, 2020 | $ | 610,000 | $ | 613,062 | ||
| Florida Board Regents, Housing Rev. (University of Central Florida), FGIC, 5.25%, 2020 | 1,185,000 | 1,208,747 | ||||
| Florida State University Board of Governors, System Improvement Rev., 6.25%, 2030 | 500,000 | 565,670 | ||||
| Miami-Dade County, FL, Educational Facilities Authority Rev. (University of Miami), “A”, 5.75%, 2028 | 1,000,000 | 1,040,480 | ||||
| $ | 3,427,959 | |||||
| Issuer | Shares/Par | Value ($) | ||||
| Universities - Dormitories - 1.9% | ||||||
| Florida Finance Authority, Capital Loan Projects Rev., “F”, NATL, 5.125%, 2021 | $ | 1,000,000 | $ | 951,200 | ||
| Utilities - Investor Owned - 1.1% | ||||||
| Hillsborough County, FL, Industrial Development Authority, Pollution Control Rev. (Tempa Electric Co.), “A”, 5.65%, 2018 | $ | 500,000 | $ | 553,670 | ||
| Utilities - Municipal Owned - 4.3% | ||||||
| Florida Municipal Power Agency Rev., All Requirements, “A”, 6.25%, 2031 | $ | 400,000 | $ | 449,292 | ||
| Florida Power Agency Rev., “A”, 5%, 2031 | 1,000,000 | 998,680 | ||||
| St. Lucie West, FL, Utility Rev., NATL, 5.25%, 2034 | 720,000 | 726,134 | ||||
| $ | 2,174,106 | |||||
| Water & Sewer Utility Revenue - 16.6% | ||||||
| Miami Beach, FL, Stormwater Rev., FGIC, 5.25%, 2020 | $ | 1,000,000 | $ | 1,030,060 | ||
| Pinellas County, FL, Sewer Rev., AGM, 5%, 2032 | 1,500,000 | 1,534,620 | ||||
| Polk County, FL, Utility Systems Rev., FGIC, 5%, 2023 | 1,000,000 | 1,017,250 | ||||
| Polk County, FL, Utility Systems Rev., “A”, FGIC, 5%, 2030 | 1,000,000 | 1,001,980 | ||||
| Seminole County, FL, Water & Sewer Rev., Unrefunded Balance, NATL, 6%, 2019 | 940,000 | 1,037,440 | ||||
| Tallahassee, FL, Consolidated Utility Systems Rev., 5%, 2037 | 505,000 | 512,873 | ||||
| Tampa Bay Water, FL, Regional Water Supply Authority, Utility System Rev., FGIC, 4.75%, 2033 | 2,115,000 | 2,153,979 | ||||
| Tampa Bay Water, FL, Regional Water Supply Authority, Utility System Rev., 5%, 2038 | 125,000 | 129,635 | ||||
| $ | 8,417,837 | |||||
| Total Municipal Bonds (Identified Cost, $49,206,408) | $ | 48,945,756 | ||||
| Money Market Funds (v) - 1.4% | ||||||
| MFS Institutional Money Market Portfolio, 0.17%, at Cost and Net Asset Value | 686,491 | $ | 686,491 | |||
| Total Investments (Identified Cost, $49,892,899) | $ | 49,632,247 | ||||
| Other Assets, Less Liabilities - 1.8% | 931,277 | |||||
| Net Assets - 100.0% | $ | 50,563,524 | ||||
33
Table of Contents
Portfolio of Investments – continued
Derivative Contracts at 3/31/10
Futures Contracts Outstanding at 3/31/10
| Description | Currency | Contracts | Value | Expiration Date | Unrealized Appreciation (Depreciation) | |||||
| Asset Derivatives | ||||||||||
| Interest Rate Futures | ||||||||||
| U.S. Treasury Bond 30 yr (Short) | USD | 8 | $929,000 | Jun-10 | $910 | |||||
| U.S. Treasury Note 10 yr (Short) | USD | 5 | 581,250 | Jun-10 | 2,041 | |||||
| $2,951 | ||||||||||
At March 31, 2010, the fund had sufficient cash and/or other liquid securities to cover any commitments under these derivative contracts.
See Portfolio Footnotes and Notes to Financial Statements
34
Table of Contents
PORTFOLIO OF INVESTMENTS
3/31/10
MFS® GEORGIA MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.
| Municipal Bonds - 97.2% | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Airport & Port Revenue - 4.2% | ||||||
| Atlanta, GA, Airport Passenger Facilities Rev., “J”, AGM, 5%, 2029 | $ | 750,000 | $ | 758,767 | ||
| Atlanta, GA, Airport Passenger Facilities Rev., “J”, AGM, 5%, 2034 | 750,000 | 747,877 | ||||
| Atlanta, GA, Airport Rev., “B”, AGM, 5.25%, 2033 | 1,000,000 | 1,014,690 | ||||
| Augusta, GA, Airport Rev., “B”, 5.35%, 2028 | 350,000 | 325,699 | ||||
| $ | 2,847,033 | |||||
| General Obligations - General Purpose - 4.1% | ||||||
| Atlanta & Fulton County, GA, Park Improvement, “A”, NATL, 5%, 2030 | $ | 500,000 | $ | 518,640 | ||
| Lagrange-Troup County, GA, Hospital Authority Rev., 5.5%, 2038 | 500,000 | 515,985 | ||||
| Macon Bibb County, GA, Urban Development Rev. (Bibb County Public Facilities Project), 5.5%, 2022 | 1,000,000 | 1,028,280 | ||||
| Puerto Rico Public Buildings Authority Rev., Guaranteed (Government Facilities), “I”, 5.25%, 2033 | 245,000 | 236,376 | ||||
| State of California, 6%, 2039 | 420,000 | 443,117 | ||||
| $ | 2,742,398 | |||||
| General Obligations - Improvement - 0.5% | ||||||
| Guam Government, “A”, 6.75%, 2029 | $ | 185,000 | $ | 197,092 | ||
| Guam Government, “A”, 5.25%, 2037 | 100,000 | 86,101 | ||||
| Guam Government, “A”, 7%, 2039 | 25,000 | 26,804 | ||||
| $ | 309,997 | |||||
| General Obligations - Schools - 1.7% | ||||||
| Fayette County, GA, School District Rev., AGM, 0% to 2010, 4.9% to 2024 | $ | 575,000 | $ | 584,085 | ||
| Fulton County, GA, School District, 6.375%, 2010 | 570,000 | 572,423 | ||||
| $ | 1,156,508 | |||||
| Healthcare Revenue - Hospitals - 12.1% | ||||||
| Brunswick, GA, Hospital Authority Rev. (Glynn-Brunswick Memorial Hospital), 5.625%, 2034 | $ | 750,000 | $ | 770,228 | ||
| Chatham County, GA, Hospital Authority Rev. (Memorial Health Medical Center), “A”, 6%, 2017 | 350,000 | 355,362 | ||||
| Chatham County, GA, Hospital Authority Rev., Hospital Improvement (Memorial Health University), “A”, 5.375%, 2026 | 200,000 | 182,424 | ||||
| Cobb County, GA, Kennestone Hospital Authority Rev. (Wellstar Health System, Inc.), “B”, AMBAC, 6.25%, 2034 | 500,000 | 549,485 | ||||
| DeKalb County, GA, Private Hospital Authority Rev. Anticipation Certificates (Children’s Healthcare), 5.25%, 2039 | 750,000 | 771,045 | ||||
| Escambia County, FL, Health Facilities Authority (Baptist Hospital, Inc.), “A”, 6%, 2036 | 155,000 | 150,204 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| Healthcare Revenue - Hospitals - continued | ||||||
| Gainesville & Hall County, GA, Hospital Authority Rev. (Northeast Georgia Healthcare), “A”, 5.25%, 2034 | $ | 500,000 | $ | 477,810 | ||
| Georgia Medical Center Hospital Authority Rev. (Columbus Regional Healthcare System, Inc.), ASSD GTY, 6.5%, 2038 | 300,000 | 333,966 | ||||
| Houston County, GA, Hospital Authority Rev. Anticipation Certificates (Houston Healthcare Project), 5.25%, 2042 | 500,000 | 478,980 | ||||
| Illinois Finance Authority Rev. (Resurrection Health), 6.125%, 2025 | 65,000 | 65,831 | ||||
| Illinois Finance Authority Rev. (Silver Cross Hospital & Medical Centers), 7%, 2044 | 200,000 | 207,574 | ||||
| Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Owensboro Medical Health System), “A”, 6.375%, 2040 | 200,000 | 198,258 | ||||
| Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Owensboro Medical Health System), “A”, 6.5%, 2045 | 135,000 | 132,794 | ||||
| Michigan Hospital Finance Authority Rev. (Henry Ford Health System), 5.625%, 2029 | 40,000 | 39,276 | ||||
| Michigan Hospital Finance Authority Rev. (Henry Ford Health System), 5.75%, 2039 | 400,000 | 386,200 | ||||
| New Hampshire Business Finance Authority Rev. (Elliot Hospital Obligated Group), “A”, 6%, 2027 | 130,000 | 131,781 | ||||
| New Hampshire Business Finance Authority Rev. (Elliot Hospital Obligated Group), “A”, 6.125%, 2039 | 180,000 | 180,833 | ||||
| Richmond County, GA, Hospital Authority Rev. Anticipation Certificates (University Health Services, Inc. Project), 5.5%, 2036 | 750,000 | 742,793 | ||||
| St. Louis Park, MN, Health Care Facilities Rev. (Nicollett Health Services), 5.75%, 2039 | 315,000 | 313,201 | ||||
| Tarrant County, TX, Cultural Education Facilities Finance Corp. (Scott & White Memorial Hospital), “A”, 5.5%, 2031 | 110,000 | 115,940 | ||||
| Valdosta & Lowndes County, GA, Hospital Authority Rev. (Southern Georgia Medical Center Project), AMBAC, 5.25%, 2027 | 500,000 | 501,730 | ||||
| Valdosta & Lowndes County, GA, Hospital Authority Rev. (Southern Georgia Medical Center Project), 5%, 2033 | 240,000 | 221,302 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (ProHealth Care, Inc. Obligated Group), 6.625%, 2039 | 385,000 | 414,179 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (Wheaton Franciscan Services), 5.25%, 2031 | 260,000 | 238,724 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (Wheaton Franciscan Services), “B”, 5.125%, 2020 | 165,000 | 162,452 | ||||
| $ | 8,122,372 | |||||
35
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Healthcare Revenue - Long Term Care - 0.9% | ||||||
| Fulton County, GA, Residential Care Facilities (Lenbrook Project), “A”, 5%, 2027 | $ | 150,000 | $ | 109,968 | ||
| Fulton County, GA, Residential Care Facilities, Elderly Authority Rev. (Canterbury Court), “A”, 6.125%, 2034 | 150,000 | 131,576 | ||||
| Gainesville & Hall County, GA, Development Authority Retirement Community Rev. (ACTS Retirement), 6.625%, 2039 | 200,000 | 202,460 | ||||
| Georgia Medical Center Hospital Authority Rev. (Spring Harbor Green Island Project), 5.25%, 2037 | 200,000 | 156,650 | ||||
| $ | 600,654 | |||||
| Industrial Revenue - Environmental Services - 0.8% | ||||||
| Savannah, GA, Economic Development Authority, Solid Waste Disposal Rev. (Georgia Waste Management Project), “A”, 5.5%, 2016 | $ | 500,000 | $ | 536,720 | ||
| Industrial Revenue - Other - 1.4% | ||||||
| Cartersville, GA, Development Authority Waste & Water Facilities Rev. (Anheuser-Busch Project), 5.95%, 2032 | $ | 750,000 | $ | 756,727 | ||
| Virgin Islands Public Finance Authority, Refinery Facilities Rev. (Hovensa Coker Project), 5.875%, 2022 | 160,000 | 159,638 | ||||
| $ | 916,365 | |||||
| Industrial Revenue - Paper - 1.2% | ||||||
| Effingham County, GA, Development Authority, Solid Waste Disposal Rev. (Fort James), 5.625%, 2018 | $ | 150,000 | $ | 144,766 | ||
| Rockdale County, GA, Development Authority Project Rev. (Visy Paper Project), “A”, 6.125%, 2034 | 150,000 | 133,722 | ||||
| Savannah, GA, Economic Development Pollution (Union Camp Corp.), 6.15%, 2017 | 500,000 | 545,055 | ||||
| $ | 823,543 | |||||
| Multi-Family Housing Revenue - 2.1% | ||||||
| East Point Housing Authority, Multi-Family Rev. (Laurel Ridge at Washington Road Apartments LP), FRN, FNMA, 5%, 2032 (b) | $ | 495,000 | $ | 486,813 | ||
| Hinesville, GA, Leased Housing Corp., “A”, FHA, 6.7%, 2017 | 900,000 | 901,728 | ||||
| $ | 1,388,541 | |||||
| Sales & Excise Tax Revenue - 2.9% | ||||||
| Metropolitan Atlanta, GA, Rapid Transit Authority Rev., “B”, AGM, 5%, 2037 (f) | $ | 1,500,000 | $ | 1,556,100 | ||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., 5.25%, 2057 | 280,000 | 277,558 | ||||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “A”, 0%, 2033 | 650,000 | 146,913 | ||||
| $ | 1,980,571 | |||||
| Issuer | Shares/Par | Value ($) | ||||
| Single Family Housing - State - 5.4% | ||||||
| Georgia Housing & Finance Authority Rev., 5.5%, 2032 | $ | 1,000,000 | $ | 1,001,950 | ||
| Georgia Housing & Finance Authority Rev., Single Family Mortgage, “A”, 5.6%, 2032 | 530,000 | 531,447 | ||||
| Georgia Housing & Finance Authority Rev., Single Family Mortgage, “A”, 5.375%, 2039 | 825,000 | 844,883 | ||||
| Georgia Housing & Finance Authority Rev., Single Family Mortgage, “C-2”, 5.1%, 2022 | 750,000 | 756,240 | ||||
| Georgia Housing & Finance Authority Rev., Single Family Mortgage, “D-2”, 5.2%, 2032 | 500,000 | 503,825 | ||||
| $ | 3,638,345 | |||||
| State & Agency - Other - 6.7% | ||||||
| Carroll City-County, GA, Hospital Authority Rev. (Tanner Medical Center), ASSD GTY, 5%, 2038 | $ | 1,000,000 | $ | 954,830 | ||
| County Commissioners of Georgia Assn., Leasing Program, Rockdale County, GA (Public Purpose Project), AMBAC, 5.625%, 2020 | 165,000 | 167,465 | ||||
| Fulton County, GA, Facilities Corp., Fulton County, GA (Public Purpose Project), AMBAC, 5.9%, 2019 | 1,000,000 | 1,041,820 | ||||
| Georgia Association of County Commissioners, Leasing Program (Public Purpose Project), COP, AMBAC, 5.625%, 2010 (c) | 335,000 | 342,584 | ||||
| Tift County, GA, Hospital Authority Rev., Anticipation Certificates, AMBAC, 5%, 2022 | 2,000,000 | 1,979,540 | ||||
| $ | 4,486,239 | |||||
| State & Local Agencies - 3.8% | ||||||
| California Public Works Board Lease Rev. (Various Capital Projects), “G-1”, 5.75%, 2030 | $ | 105,000 | $ | 104,999 | ||
| Fayette County, GA, Public Facilities Authority (Criminal Justice Center Project), 6.25%, 2010 (c) | 755,000 | 769,451 | ||||
| Georgia Municipal Association, Inc. (Riverdale Public Purpose Project), ASSD GTY, 5.5%, 2038 | 1,000,000 | 1,044,220 | ||||
| Gilmer County, GA, Building Authority Rev., Courthouse Project, “A”, SYNCORA, 5%, 2029 | 500,000 | 511,050 | ||||
| Los Angeles, CA, Municipal Improvement Corp. Lease Rev. (Real Property), “E”, 6%, 2039 | 115,000 | 121,242 | ||||
| $ | 2,550,962 | |||||
| Tax - Other - 1.0% | ||||||
| Guam Government Ltd. Obligation Rev., “A”, 5.375%, 2024 | $ | 75,000 | $ | 77,592 | ||
| Guam Government Ltd. Obligation Rev., “A”, 5.625%, 2029 | 25,000 | 25,606 | ||||
| Puerto Rico Infrastructure Financing Authority, Special Tax Rev., “C”, FGIC, 5.5%, 2022 | 295,000 | 302,912 | ||||
| Virgin Islands Public Finance Authority Rev., “A”, 6%, 2039 | 180,000 | 185,242 | ||||
| Virgin Islands Public Finance Authority Rev., “A-1”, 5%, 2029 | 50,000 | 48,784 | ||||
| Virgin Islands Public Finance Authority Rev., “B”, 5%, 2025 | 50,000 | 50,225 | ||||
| $ | 690,361 | |||||
36
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Tax Assessment - 0.4% | ||||||
| Atlanta, GA, Tax Allocation (Eastside Project), “B”, 5.6%, 2030 | $ | 150,000 | $ | 137,899 | ||
| Atlanta, GA, Tax Allocation (Princeton Lakes Project), 5.5%, 2031 | 125,000 | 106,937 | ||||
| $ | 244,836 | |||||
| Tobacco - 0.2% | ||||||
| Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 5.125%, 2024 | $ | 90,000 | $ | 82,714 | ||
| Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 5.875%, 2030 | 90,000 | 75,813 | ||||
| $ | 158,527 | |||||
| Transportation - Special Tax - 0.3% | ||||||
| Commonwealth of Puerto Rico Highway & Transportation Authority Rev., “CC”, AGM, 5.5%, 2028 | $ | 185,000 | $ | 204,419 | ||
| Universities - Colleges - 21.1% | ||||||
| Athens, GA, Housing Authority Rev. (University of Georgia East Campus Funding), 5.25%, 2035 | $ | 500,000 | $ | 528,325 | ||
| Athens-Clarke County, GA, Unified Government Development Authority, Educational Facilities Rev., 0%, 2024 | 250,000 | 219,552 | ||||
| Athens-Clarke County, GA, Unified Government Development Authority, Educational Facilities Rev., 0%, 2031 | 250,000 | 205,767 | ||||
| Atkinson-Coffee County, GA, Joint Development Authority Rev. (SGC Real Estate Foundation LLC), ASSD GTY, 5.25%, 2034 | 500,000 | 514,235 | ||||
| Atlanta, GA, Development Authority Educational Facilities Rev. (Panther Place), ASSD GTY, 4.75%, 2032 | 500,000 | 510,465 | ||||
| Atlanta, GA, Development Authority Educational Facilities Rev. (Science Park LLC), 5%, 2032 | 500,000 | 496,185 | ||||
| Atlanta, GA, Development Authority Educational Facilities Rev. (Science Park LLC), 5%, 2039 | 500,000 | 481,385 | ||||
| Bleckley-Dodge County, GA, Student Housing Facilities Rev. (Middle Georgia College), 5.25%, 2038 | 500,000 | 498,495 | ||||
| Cobb County, GA, Development Authority, Dining Hall Lease Rev. (KSU Dining Hall), ASSD GTY, 5.75%, 2039 | 1,000,000 | 1,101,460 | ||||
| Dahlonega, GA, Downtown Development Authority Rev. (North Georgia PHD LLC), ASSD GTY, 5.25%, 2034 | 500,000 | 515,085 | ||||
| Dekalb Newton & Gwinnett Counties Joint Development Authority Rev. (GGC Foundation LLC), 6%, 2034 | 500,000 | 547,425 | ||||
| Fulton County, GA (Morehouse College), AMBAC, 6.25%, 2010 (c) | 980,000 | 1,026,775 | ||||
| Fulton County, GA, Development Authority Rev. (Georgia Tech Foundation Funding), “A”, 5%, 2031 | 265,000 | 270,576 | ||||
| Fulton County, GA, Development Authority Rev. (Georgia Tech Foundation), SYNCORA, 5%, 2032 | 500,000 | 515,735 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| Universities - Colleges - continued | ||||||
| Fulton County, GA, Development Authority Rev. (Molecular Science Building), NATL, 5%, 2034 | $ | 1,000,000 | $ | 1,015,770 | ||
| Fulton County, GA, Development Authority Rev. (Spelman College), 5%, 2032 | 250,000 | 257,867 | ||||
| Georgia Higher Education Facilities Authority Rev. (Real Estate Foundation), 6%, 2034 | 300,000 | 324,966 | ||||
| Illinois Finance Authority Rev. (Roosevelt University Project), 6.5%, 2039 | 430,000 | 436,373 | ||||
| Marietta, GA, Development Facilities Authority Rev. (Life University), 7%, 2030 | 100,000 | 95,124 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Massachusetts Institute of Technology), “I-1”, 5.2%, 2028 | 555,000 | 656,149 | ||||
| New Jersey Educational Facilities Authority Rev. (University of Medicine & Dentistry), “B”, 6%, 2017 | 275,000 | 310,162 | ||||
| Private Colleges & Universities, GA, Authority Rev. (Agnes Scott College), 5%, 2024 | 500,000 | 542,370 | ||||
| Private Colleges & Universities, GA, Authority Rev. (Emory University), “C”, 5%, 2038 | 1,000,000 | 1,041,730 | ||||
| Private Colleges & Universities, GA, Authority Rev. (Emory University), “C”, 5.25%, 2039 | 500,000 | 534,005 | ||||
| Savannah, GA, Economic Development Authority Rev. (AASU Student Union LLC), ASSD GTY, 5.125%, 2039 | 500,000 | 512,910 | ||||
| South Regional, GA, Joint Development Authority Rev. (VSU Auxiliary Student Services), “A”, ASSD GTY, 5%, 2036 | 1,000,000 | 1,019,700 | ||||
| $ | 14,178,591 | |||||
| Universities - Dormitories - 0.7% | ||||||
| Georgia Private College & University Authority Rev. (Mercer Housing Corp.), “A”, 6%, 2021 | $ | 500,000 | $ | 491,985 | ||
| Utilities - Investor Owned - 0.3% | ||||||
| Michigan Strategic Fund Ltd. Obligation Rev. (Detroit Edison), 5.5%, 2029 (b) | $ | 160,000 | $ | 178,184 | ||
| Utilities - Municipal Owned - 5.6% | ||||||
| Georgia Municipal Electric Authority Power Rev., “A”, NATL, 6.5%, 2020 | $ | 1,250,000 | $ | 1,434,238 | ||
| Long Island Power Authority, Electric Systems Rev., “A”, BHAC, 5.5%, 2033 | 300,000 | 329,865 | ||||
| Long Island Power Authority, Electric Systems Rev., “A”, 6%, 2033 | 100,000 | 111,697 | ||||
| Monroe County, GA, Pollution Control Rev. (Oglethorpe Power Corp.), “A”, 6.8%, 2012 | 1,000,000 | 1,085,950 | ||||
| Puerto Rico Electric Power Authority, Power Rev., “XX”, 5.25%, 2040 | 435,000 | 429,123 | ||||
| Summerville, GA, Public Utility Rev., 5.75%, 2012 (c) | 350,000 | 382,424 | ||||
| $ | 3,773,297 | |||||
| Utilities - Other - 1.1% | ||||||
| Main Street Natural Gas, Inc., GA, Gas Project Rev., “B”, 5%, 2019 | $ | 250,000 | $ | 254,868 | ||
37
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Utilities - Other - continued | ||||||
| Tennessee Energy Acquisition Corp. Gas Rev., “A”, 5.25%, 2020 | $ | 250,000 | $ | 253,188 | ||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2019 | 225,000 | 229,167 | ||||
| $ | 737,223 | |||||
| Water & Sewer Utility Revenue - 18.7% | ||||||
| Athens-Clarke County, GA, Unified Government Water & Sewer Rev., 5.625%, 2033 | $ | 500,000 | $ | 548,935 | ||
| Atlanta, GA, Water & Wastewater Rev., AGM, 5%, 2037 | 870,000 | 877,386 | ||||
| Augusta, GA, Water & Sewer Rev., AGM, 5.25%, 2034 | 1,000,000 | 1,029,740 | ||||
| Cherokee County, GA, Water & Sewer Authority Rev., 5%, 2028 | 800,000 | 862,136 | ||||
| Cherokee County, GA, Water & Sewer Authority Rev., AGM, 5%, 2035 | 1,000,000 | 1,039,240 | ||||
| Clayton County, GA, Water Authority, Water & Sewer Rev., 6.25%, 2010 (c) | 1,000,000 | 1,014,150 | ||||
| Columbia County, GA, Water & Sewer Rev., FGIC, 6.25%, 2010 (c) | 470,000 | 474,296 | ||||
| Commonwealth of Puerto Rico Aqueduct & Sewer Authority Rev., “A”, 6%, 2044 | 1,000,000 | 1,032,660 | ||||
| Detroit, MI, Sewer Disposal System Rev., “B”, AGM, 7.5%, 2033 | 145,000 | 172,960 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| Water & Sewer Utility Revenue - continued | ||||||
| Fairburn, GA, Combined Utility Rev., 5.75%, 2010 (c) | $ | 500,000 | $ | 518,095 | ||
| Fulton County, GA, Water & Sewer Rev., ETM, FGIC, 6.375%, 2014 (c) | 1,830,000 | 2,032,288 | ||||
| Henry County, GA, Water & Sewer Authority Rev., BHAC, 5.25%, 2027 | 1,000,000 | 1,166,680 | ||||
| Walton County, GA, Water & Sewer Authority Rev. (Oconee-Hard Creek), AGM, 5%, 2038 | 750,000 | 779,453 | ||||
| Walton County, GA, Water & Sewer Authority Rev. (Walton-Hard Labor Creek Project), AGM, 5%, 2038 | 1,000,000 | 1,031,920 | ||||
| $ | 12,579,939 | |||||
| Total Municipal Bonds (Identified Cost, $63,375,213) | $ | 65,337,610 | ||||
| Money Market Funds (v) - 2.2% | ||||||
| MFS Institutional Money Market Portfolio, 0.17%, at Cost and Net Asset Value | 1,465,795 | $ | 1,465,795 | |||
| Total Investments (Identified Cost, $64,841,008) | $ | 66,803,405 | ||||
| Other Assets, Less Liabilities - 0.6% | 372,064 | |||||
| Net Assets - 100.0% | $ | 67,175,469 | ||||
Derivative Contracts at 3/31/10
Futures Contracts Outstanding at 3/31/10
| Description | Currency | Contracts | Value | Expiration Date | Unrealized Appreciation (Depreciation) | |||||
| Asset Derivatives | ||||||||||
| Interest Rate Futures | ||||||||||
| U.S. Treasury Note 10 yr (Short) | USD | 7 | $813,750 | Jun-10 | $2,858 | |||||
| U.S. Treasury Bond 30 yr (Short) | USD | 6 | 696,750 | Jun-10 | 682 | |||||
| $3,540 | ||||||||||
At March 31, 2010, the fund had sufficient cash and/or other liquid securities to cover any commitments under these derivative contracts.
See Portfolio Footnotes and Notes to Financial Statements
38
Table of Contents
PORTFOLIO OF INVESTMENTS
3/31/10
MFS® MARYLAND MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.
| Municipal Bonds - 97.4% | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Airport & Port Revenue - 0.5% | ||||||
| Maryland Economic Development Corp. Rev. (Terminal Project), “B”, 5.75%, 2035 | $ | 550,000 | $ | 558,404 | ||
| General Obligations - General Purpose - 11.9% | ||||||
| Baltimore, MD, Public Improvement, “A”, AGM, 5%, 2027 | $ | 1,050,000 | $ | 1,145,004 | ||
| Commonwealth of Puerto Rico, “A”, 5.375%, 2033 | 260,000 | 255,073 | ||||
| Commonwealth of Puerto Rico, “A”, 6%, 2038 | 415,000 | 430,222 | ||||
| Commonwealth of Puerto Rico, Public Improvement, “A”, 5.25%, 2026 | 2,330,000 | 2,329,814 | ||||
| Maryland State & Local Facilities, 5%, 2020 | 3,500,000 | 3,954,335 | ||||
| Maryland State & Local Facilities, “C”, 5%, 2019 (f) | 2,000,000 | 2,330,560 | ||||
| Maryland State, “B”, 5%, 2018 | 2,000,000 | 2,320,720 | ||||
| State of California, 6%, 2039 | 720,000 | 759,629 | ||||
| $ | 13,525,357 | |||||
| General Obligations - Improvement - 0.1% | ||||||
| Guam Government, “A”, 6.75%, 2029 | $ | 70,000 | $ | 74,575 | ||
| Guam Government, “A”, 7%, 2039 | 80,000 | 85,771 | ||||
| $ | 160,346 | |||||
| Healthcare Revenue - Hospitals - 25.0% | ||||||
| Escambia County, FL, Health Facilities Authority (Baptist Hospital, Inc.), “A”, 6%, 2036 | $ | 260,000 | $ | 251,956 | ||
| Illinois Finance Authority Rev. (Silver Cross Hospital & Medical Centers), 7%, 2044 | 345,000 | 358,065 | ||||
| Indiana Finance Authority Rev. (Sisters of St. Francis Health Services), 5.375%, 2032 | 830,000 | 857,871 | ||||
| Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Owensboro Medical Health System), “A”, 6.5%, 2045 | 575,000 | 565,604 | ||||
| Louisville & Jefferson County, KY, Metropolitan Government Healthcare Systems Rev. (Norton Healthcare, Inc.), 5.25%, 2036 | 640,000 | 612,659 | ||||
| Maryland Health & Higher Educational Facilities Authority Rev. (Adventist Healthcare), “A”, 5.75%, 2025 | 500,000 | 504,960 | ||||
| Maryland Health & Higher Educational Facilities Authority Rev. (Anne Arundel Health System), “A”, 6.75%, 2039 | 1,000,000 | 1,138,410 | ||||
| Maryland Health & Higher Educational Facilities Authority Rev. (Anne Arundel Health System, Inc.), 5%, 2040 | 1,000,000 | 968,120 | ||||
| Maryland Health & Higher Educational Facilities Authority Rev. (Calvert Health Systems), 5.5%, 2039 | 1,000,000 | 1,013,080 | ||||
| Maryland Health & Higher Educational Facilities Authority Rev. (Carroll County General Hospital), 6%, 2037 | 1,000,000 | 1,017,010 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| Healthcare Revenue - Hospitals - continued | ||||||
| Maryland Health & Higher Educational Facilities Authority Rev. (Catholic Health), “A”, 6%, 2010 (c) | $ | 755,000 | $ | 769,156 | ||
| Maryland Health & Higher Educational Facilities Authority Rev. (Catholic Health), “A”, 6%, 2020 | 245,000 | 248,352 | ||||
| Maryland Health & Higher Educational Facilities Authority Rev. (Doctors Community Hospital), “A”, 5%, 2029 | 750,000 | 622,388 | ||||
| Maryland Health & Higher Educational Facilities Authority Rev. (Frederick Memorial Hospital), 5.125%, 2035 | 1,000,000 | 906,120 | ||||
| Maryland Health & Higher Educational Facilities Authority Rev. (Johns Hopkins Hospital), 5%, 2021 | 750,000 | 755,670 | ||||
| Maryland Health & Higher Educational Facilities Authority Rev. (Johns Hopkins Medical Institutions), “A”, 5%, 2037 | 750,000 | 745,553 | ||||
| Maryland Health & Higher Educational Facilities Authority Rev. (Lifebridge Health), ASSD GTY, 4.75%, 2038 | 965,000 | 954,568 | ||||
| Maryland Health & Higher Educational Facilities Authority Rev. (Lifebridge Health), 4.75%, 2039 | 590,000 | 553,644 | ||||
| Maryland Health & Higher Educational Facilities Authority Rev. (Medlantic/Helix Parent, Inc.), “A”, AGM, 5.25%, 2038 | 2,000,000 | 2,035,540 | ||||
| Maryland Health & Higher Educational Facilities Authority Rev. (Medstar Health), 5.5%, 2033 | 800,000 | 812,000 | ||||
| Maryland Health & Higher Educational Facilities Authority Rev. (Mercy Medical Center), “A”, 5.5%, 2042 | 750,000 | 707,910 | ||||
| Maryland Health & Higher Educational Facilities Authority Rev. (North Arundel Hospital), 6.5%, 2010 (c) | 500,000 | 512,230 | ||||
| Maryland Health & Higher Educational Facilities Authority Rev. (Peninsula Regional Medical Center), 5%, 2036 | 1,000,000 | 981,290 | ||||
| Maryland Health & Higher Educational Facilities Authority Rev. (Suburban Hospital), “A”, 5.5%, 2016 | 1,000,000 | 1,079,280 | ||||
| Maryland Health & Higher Educational Facilities Authority Rev. (Union Hospital of Cecil County Issue), 5.625%, 2032 | 1,000,000 | 1,009,820 | ||||
| Maryland Health & Higher Educational Facilities Authority Rev. (Union Hospital of Cecil County Issue), 5%, 2035 | 500,000 | 484,205 | ||||
| Maryland Health & Higher Educational Facilities Authority Rev. (University of Maryland Medical System), 6.625%, 2010 (c) | 890,000 | 908,548 | ||||
| Maryland Health & Higher Educational Facilities Authority Rev. (University of Maryland Medical System), AMBAC, 5%, 2031 | 1,000,000 | 1,004,620 | ||||
39
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Healthcare Revenue - Hospitals - continued | ||||||
| Maryland Health & Higher Educational Facilities Authority Rev. (University of Maryland Medical System), “A”, 5%, 2041 | $ | 500,000 | $ | 487,615 | ||
| Maryland Health & Higher Educational Facilities Authority Rev. (Washington County Hospital), 5.75%, 2038 | 500,000 | 483,810 | ||||
| Maryland Industrial Development Authority, Economic Development Rev., RIBS, FRN, AGM, 11.132%, 2022 (p) | 1,300,000 | 1,541,202 | ||||
| Michigan Hospital Finance Authority Rev. (Henry Ford Health System), 5.625%, 2029 | 65,000 | 63,823 | ||||
| Michigan Hospital Finance Authority Rev. (Henry Ford Health System), 5.75%, 2039 | 685,000 | 661,368 | ||||
| Montgomery County, MD, Economic Development Rev. (Trinity Healthcare Group), 5.125%, 2022 | 500,000 | 505,850 | ||||
| New Hampshire Business Finance Authority Rev. (Elliot Hospital Obligated Group), “A”, 6%, 2027 | 480,000 | 486,576 | ||||
| Richmond, IN, Hospital Authority Rev. (Reid Hospital), “A”, 6.5%, 2029 | 415,000 | 445,224 | ||||
| St. Louis Park, MN, Health Care Facilities Rev. (Nicollett Health Services), 5.75%, 2039 | 575,000 | 571,717 | ||||
| Tarrant County, TX, Cultural Education Facilities Finance Corp. (Scott & White Memorial Hospital), “A”, 5.5%, 2031 | 200,000 | 210,800 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (Wheaton Franciscan Healthcare), 5.25%, 2018 | 470,000 | 474,263 | ||||
| $ | 28,310,877 | |||||
| Healthcare Revenue - Long Term Care - 1.0% | ||||||
| Gaithersburg, MD, Economic Development Rev. (Asbury Maryland Obligations Group), “A”, 5.125%, 2036 | $ | 400,000 | $ | 343,188 | ||
| Howard County, MD, Retirement Rev. (Vantage House Facilities), “B”, 5.25%, 2037 | 300,000 | 231,081 | ||||
| Maryland Health & Higher Educational Facilities Authority Rev. (King Farm Presbyterian Community), “A”, 5.3%, 2037 | 300,000 | 209,160 | ||||
| Maryland Health & Higher Educational Facilities Authority Rev. (Mercy Ridge), “A”, 6%, 2013 (c) | 150,000 | 171,836 | ||||
| Travis County, TX, Health Facilities Development Corp. Rev. (Westminster Manor Health), 7%, 2030 | 55,000 | 54,996 | ||||
| Travis County, TX, Health Facilities Development Corp. Rev. (Westminster Manor Health), 7.125%, 2040 | 85,000 | 85,025 | ||||
| $ | 1,095,286 | |||||
| Healthcare Revenue - Other - 0.7% | ||||||
| Maryland Economic Development Corp., Economic Development Rev. (Lutheran World Relief Refugee), 5.25%, 2019 | $ | 230,000 | $ | 232,139 | ||
| Issuer | Shares/Par | Value ($) | ||||
| Healthcare Revenue - Other - continued | ||||||
| Maryland Economic Development Corp., Economic Development Rev. (Lutheran World Relief Refugee), 5.25%, 2029 | $ | 565,000 | $ | 528,897 | ||
| $ | 761,036 | |||||
| Industrial Revenue - Chemicals - 1.4% | ||||||
| Baltimore, MD, Port Facilities Rev., Consolidated Coal Sales (Dupont), “B”, 6.5%, 2011 | $ | 1,500,000 | $ | 1,554,885 | ||
| Industrial Revenue - Environmental Services - 0.6% | ||||||
| Northeast Maryland Waste Disposal Authority Resources Recovery Rev. (Baltimore Resco Retrofit Project), 5%, 2012 | $ | 690,000 | $ | 694,637 | ||
| Industrial Revenue - Other - 0.3% | ||||||
| Virgin Islands Public Finance Authority, Refinery Facilities Rev. (Hovensa Coker Project), 5.875%, 2022 | $ | 375,000 | $ | 374,153 | ||
| Miscellaneous Revenue - Other - 1.4% | ||||||
| Harford County, MD, Economic Development Rev. (Battelle Memorial Institute Project), 5.25%, 2034 | $ | 1,600,000 | $ | 1,612,560 | ||
| Multi-Family Housing Revenue - 3.4% | ||||||
| Maryland Community Development Administration (Waters Landing II Apartments), “A”, FRN, GNMA, 5.875%, 2033 | $ | 1,500,000 | $ | 1,526,625 | ||
| Maryland Community Development Administration, “A”, 5.05%, 2047 | 1,000,000 | 931,930 | ||||
| Maryland Community Development Administration, “B”, FNMA, 5%, 2039 | 500,000 | 475,830 | ||||
| Maryland Community Development Administration, “D”, 5%, 2032 | 1,000,000 | 957,230 | ||||
| $ | 3,891,615 | |||||
| Parking - 2.0% | ||||||
| Maryland Health & Higher Educational Facilities Authority Rev. (Johns Hopkins Medical Institutions), AMBAC, 5%, 2034 | $ | 1,385,000 | $ | 1,260,045 | ||
| Maryland Transportation Authority Rev. (Baltimore/Washington International Airport), “A”, AMBAC, 5%, 2027 | 1,000,000 | 1,022,760 | ||||
| $ | 2,282,805 | |||||
| Sales & Excise Tax Revenue - 1.9% | ||||||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., 5.25%, 2057 | $ | 335,000 | $ | 332,079 | ||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “A”, 5.5%, 2028 | 520,000 | 545,459 | ||||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “A”, 0%, 2033 | 1,100,000 | 248,622 | ||||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “A”, 5.375%, 2039 | 1,060,000 | 1,078,115 | ||||
| $ | 2,204,275 | |||||
40
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Single Family Housing Revenue - Local - 0.0% | ||||||
| Prince George’s County, MD, Housing Single Family Collateral, “A”, GNMA, 5.6%, 2034 | $ | 25,000 | $ | 25,172 | ||
| Single Family Housing - State - 4.5% | ||||||
| Maryland Community Development Administration Housing, 5.65%, 2048 | $ | 840,000 | $ | 873,541 | ||
| Maryland Community Development Administration Housing, “A”, 5.875%, 2016 | 715,000 | 715,686 | ||||
| Maryland Community Development Administration Residential, “B”, 4.75%, 2019 | 225,000 | 222,973 | ||||
| Maryland Community Development Administration, “I”, 6%, 2041 | 670,000 | 687,407 | ||||
| Maryland Community Development Administration, Department of Housing & Community Development, 5%, 2034 | 1,500,000 | 1,508,100 | ||||
| Montgomery County, MD, Housing Opportunities Commission (Single Family Mortgage Rev.), “B”, 4.55%, 2026 | 1,000,000 | 937,880 | ||||
| Puerto Rico Housing Finance Authority, Home Mortgage Rev., Mortgage Backed Securities, “A”, 4.75%, 2023 | 165,000 | 164,830 | ||||
| $ | 5,110,417 | |||||
| State & Agency - Other - 2.9% | ||||||
| Howard County, MD, COP, 8%, 2019 | $ | 805,000 | $ | 1,117,686 | ||
| Howard County, MD, COP, 8%, 2019 | 385,000 | 534,546 | ||||
| Howard County, MD, COP, 8%, 2019 | 680,000 | 944,132 | ||||
| Howard County, MD, COP, “B”, 8.15%, 2021 | 450,000 | 641,678 | ||||
| $ | 3,238,042 | |||||
| State & Local Agencies - 1.8% | ||||||
| California Public Works Board Lease Rev. (Various Capital Projects), “G-1”, 5.75%, 2030 | $ | 170,000 | $ | 169,998 | ||
| FYI Properties Lease Rev. (Washington State Project), 5.5%, 2034 | 420,000 | 447,951 | ||||
| Los Angeles, CA, Municipal Improvement Corp. Lease Rev. (Real Property), “E”, 6%, 2039 | 180,000 | 189,770 | ||||
| Puerto Rico Public Finance Corp., AMBAC, 5.375%, 2016 | 1,040,000 | 1,198,610 | ||||
| $ | 2,006,329 | |||||
| Tax - Other - 2.5% | ||||||
| Commonwealth of Puerto Rico, Public Improvement, “B”, 6.5%, 2037 | $ | 1,500,000 | $ | 1,633,395 | ||
| Guam Government Ltd. Obligation Rev., “A”, 5.375%, 2024 | 325,000 | 336,232 | ||||
| Guam Government Ltd. Obligation Rev., “A”, 5.625%, 2029 | 45,000 | 46,090 | ||||
| Puerto Rico Infrastructure Financing Authority, Special Tax Rev., “C”, FGIC, 5.5%, 2022 | 510,000 | 523,678 | ||||
| Virgin Islands Public Finance Authority Rev., “A”, 6%, 2039 | 285,000 | 293,299 | ||||
| $ | 2,832,694 | |||||
| Tax Assessment - 2.3% | ||||||
| Anne Arundel County, MD, Special Obligations (Arundel Mills Project), 5.125%, 2029 | $ | 1,555,000 | $ | 1,666,260 | ||
| Issuer | Shares/Par | Value ($) | ||||
| Tax Assessment - continued | ||||||
| Baltimore, MD, Special Obligation, “A”, 7%, 2038 | $ | 400,000 | $ | 396,552 | ||
| Brunswick, MD, Special Obligation (Brunswick Crossing Special Taxing), 5.5%, 2036 | 250,000 | 168,230 | ||||
| Prince George’s County, MD, Special Obligation (National Harbor Project), 5.2%, 2034 | 500,000 | 424,935 | ||||
| $ | 2,655,977 | |||||
| Tobacco - 0.8% | ||||||
| Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 5.125%, 2024 | $ | 160,000 | $ | 147,046 | ||
| Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 5.875%, 2030 | 160,000 | 134,779 | ||||
| Guam Economic Development Authority Tobacco Settlement, “B”, 5.5%, 2011 (c) | 400,000 | 421,524 | ||||
| Virgin Islands Tobacco Settlement Financing Corp., 5%, 2021 | 165,000 | 157,014 | ||||
| $ | 860,363 | |||||
| Toll Roads - 1.9% | ||||||
| Maryland Transportation Authority Facilities Projects Rev., AGM, 5%, 2037 | $ | 2,000,000 | $ | 2,100,360 | ||
| Transportation - Special Tax - 3.8% | ||||||
| Commonwealth of Puerto Rico Highway & Transportation Authority Rev., AGM, 5.25%, 2033 | $ | 1,365,000 | $ | 1,446,409 | ||
| Maryland Department of Transportation, Port Administration Facilities Project, AMBAC, 5.25%, 2020 | 1,690,000 | 1,776,359 | ||||
| Washington, DC, Metropolitan Area Transit Authority Gross Rev., “A”, 5.25%, 2029 | 515,000 | 552,750 | ||||
| Washington, DC, Metropolitan Area Transit Authority Gross Rev., “A”, 5.125%, 2032 | 485,000 | 508,789 | ||||
| $ | 4,284,307 | |||||
| Universities - Colleges - 11.3% | ||||||
| Annapolis, MD, Economic Development Rev. (St. John’s College), 5.5%, 2018 | $ | 180,000 | $ | 180,594 | ||
| Anne Arundel County, MD, Economic Development (Community College Project), 5.25%, 2028 | 1,600,000 | 1,636,480 | ||||
| Frederick County, MD, Educational Facilities Rev. (Mount St. Mary’s College), 5%, 2030 | 1,000,000 | 847,730 | ||||
| Maryland Health & Higher Education (Loyola College), “A”, 5%, 2040 | 1,000,000 | 998,440 | ||||
| Maryland Health & Higher Education (Maryland Institute College of Art), 5%, 2030 | 750,000 | 727,710 | ||||
| Maryland Health & Higher Educational Facilities Authority Rev. (Goucher College), 5.375%, 2025 | 500,000 | 510,670 | ||||
| Maryland Health & Higher Educational Facilities Authority Rev. (Johns Hopkins University), “A”, 5%, 2032 | 2,000,000 | 2,035,820 | ||||
| Maryland Health & Higher Educational Facilities Authority Rev. (Loyola College), “A”, 5.125%, 2045 | 1,600,000 | 1,605,680 | ||||
41
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Universities - Colleges - continued | ||||||
| Morgan State University, MD, Academic, NATL, 6.05%, 2015 | $ | 1,500,000 | $ | 1,679,430 | ||
| New Jersey Educational Facilities Authority Rev. (University of Medicine & Dentistry), “B”, 6%, 2017 | 480,000 | 541,373 | ||||
| Westminster, MD, Educational Facilities Rev. (McDaniel College, Inc.), 5.5%, 2012 (c) | 1,000,000 | 1,108,130 | ||||
| Westminster, MD, Educational Facilities Rev. (McDaniel College, Inc.), 5%, 2031 | 1,000,000 | 960,430 | ||||
| $ | 12,832,487 | |||||
| Universities - Dormitories - 1.7% | ||||||
| Maryland Economic Development Corp., Collegiate Housing (Salisbury), “A”, 6%, 2019 | $ | 1,000,000 | $ | 930,580 | ||
| Maryland Economic Development Corp., Collegiate Housing Rev. (Towson University), “A”, 5.75%, 2029 | 1,000,000 | 976,120 | ||||
| $ | 1,906,700 | |||||
| Universities - Secondary Schools - 0.5% | ||||||
| Maryland Health & Higher Educational Facilities Authority Rev. (Washington Christian Academy), 5.5%, 2038 (a) | $ | 500,000 | $ | 225,910 | ||
| Maryland Industrial Development Financing Authority, Economic Development Authority Rev. (Our Lady of Good Council), “A”, 6%, 2035 | 400,000 | 368,920 | ||||
| $ | 594,830 | |||||
| Utilities - Investor Owned - 1.1% | ||||||
| Maryland Economic Development Corp., Pollution Control Rev. (Potomac Electric Power Co.), 6.2%, 2022 | $ | 500,000 | $ | 573,215 | ||
| Michigan Strategic Fund Ltd. Obligation Rev. (Detroit Edison), 5.625%, 2020 | 385,000 | 422,838 | ||||
| Michigan Strategic Fund Ltd. Obligation Rev. (Detroit Edison), 5.5%, 2029 (b) | 275,000 | 306,254 | ||||
| $ | 1,302,307 | |||||
| Utilities - Municipal Owned - 3.7% | ||||||
| Guam Power Authority Rev., AMBAC, 5.25%, 2015 | $ | 3,360,000 | $ | 3,378,211 | ||
| Long Island Power Authority, Electric Systems Rev., “A”, BHAC, 5.5%, 2033 | 540,000 | 593,757 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| Utilities - Municipal Owned - continued | ||||||
| Long Island Power Authority, Electric Systems Rev., “A”, 6%, 2033 | $ | 185,000 | $ | 206,639 | ||
| $ | 4,178,607 | |||||
| Utilities - Other - 0.9% | ||||||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2019 | $ | 400,000 | $ | 407,408 | ||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2021 | 195,000 | 196,823 | ||||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2022 | 100,000 | 100,448 | ||||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2023 | 140,000 | 139,993 | ||||
| Tennessee Energy Acquisition Corp., Gas Rev., “C”, 5%, 2021 | 235,000 | 234,401 | ||||
| $ | 1,079,073 | |||||
| Water & Sewer Utility Revenue - 7.5% | ||||||
| Baltimore, MD, Rev., LEVRRS, FRN, NATL, 10.456%, 2020 (p) | $ | 3,000,000 | $ | 3,709,620 | ||
| Baltimore, MD, Wastewater Rev. Project, “A”, NATL, 5.65%, 2020 | 2,000,000 | 2,236,540 | ||||
| Commonwealth of Puerto Rico Aqueduct & Sewer Authority Rev., “A”, ASSD GTY, 5%, 2028 | 400,000 | 411,116 | ||||
| Commonwealth of Puerto Rico Aqueduct & Sewer Authority Rev., “A”, 6%, 2044 | 1,000,000 | 1,032,660 | ||||
| Detroit, MI, Sewer Disposal System Rev., “B”, AGM, 7.5%, 2033 | 240,000 | 286,279 | ||||
| Wasco, CA, Semitropic Improvement District (Semitropic Water Storage District), “A”, 5%, 2038 | 815,000 | 814,943 | ||||
| $ | 8,491,158 | |||||
| Total Municipal Bonds (Identified Cost, $108,122,699) | $ | 110,525,059 | ||||
| Money Market Funds (v) - 1.1% | ||||||
| MFS Institutional Money Market Portfolio, 0.17%, at Cost and Net Asset Value | 1,201,518 | $ | 1,201,518 | |||
| Total Investments (Identified Cost, $109,324,217) | $ | 111,726,577 | ||||
| Other Assets, Less Liabilities - 1.5% | 1,705,640 | |||||
| Net Assets - 100.0% | $ | 113,432,217 | ||||
42
Table of Contents
Portfolio of Investments – continued
Derivative Contracts at 3/31/10
Futures Contracts Outstanding at 3/31/10
| Description | Currency | Contracts | Value | Expiration Date | Unrealized Appreciation (Depreciation) | |||||
| Asset Derivatives | ||||||||||
| Interest Rate Futures | ||||||||||
| U.S. Treasury Bond 30 yr (Short) | USD | 16 | $1,858,000 | Jun-10 | $1,819 | |||||
| U.S. Treasury Note 10 yr (Short) | USD | 11 | 1,278,750 | Jun-10 | 4,491 | |||||
| $6,310 | ||||||||||
At March 31, 2010, the fund had sufficient cash and/or other liquid securities to cover any commitments under these derivative contracts.
See Portfolio Footnotes and Notes to Financial Statements
43
Table of Contents
PORTFOLIO OF INVESTMENTS
3/31/10
MFS® MASSACHUSETTS MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.
| Municipal Bonds - 98.3% | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Airport & Port Revenue - 0.7% | ||||||
| Massachusetts Port Authority Rev., “A”, NATL, 5%, 2033 | $ | 1,265,000 | $ | 1,293,703 | ||
| Massachusetts Port Authority Rev., ETM, 13%, 2013 (c) | 415,000 | 497,992 | ||||
| $ | 1,791,695 | |||||
| General Obligations - General Purpose - 7.3% | ||||||
| Brookline, MA, 5.375%, 2019 | $ | 1,800,000 | $ | 1,818,252 | ||
| Commonwealth of Massachusetts, “A”, 5%, 2032 | 3,000,000 | 3,174,870 | ||||
| Commonwealth of Massachusetts, “B”, 5.25%, 2028 | 2,500,000 | 2,878,200 | ||||
| Greater Lawrence, MA, Sanitation District, NATL, 5.625%, 2010 (c) | 1,640,000 | 1,673,226 | ||||
| Massachusetts Consolidated Loan, “B”, 5.75%, 2010 (c) | 1,000,000 | 1,008,450 | ||||
| Massachusetts Consolidated Loan, “C”, 5.75%, 2010 (c) | 1,500,000 | 1,539,300 | ||||
| Puerto Rico Public Buildings Authority Rev., Guaranteed (Government Facilities), “I”, 5.25%, 2033 | 925,000 | 892,440 | ||||
| Puerto Rico Public Buildings Authority Rev., Guaranteed, “M”, 6.25%, 2023 | 605,000 | 663,963 | ||||
| State of California, 6%, 2039 | 1,555,000 | 1,640,587 | ||||
| State of Massachusetts, “A”, 5%, 2039 | 1,000,000 | 1,044,510 | ||||
| Sutton, MA, NATL, 5.5%, 2017 | 1,000,000 | 1,011,320 | ||||
| Sutton, MA, NATL, 5.5%, 2019 | 1,000,000 | 1,011,410 | ||||
| $ | 18,356,528 | |||||
| General Obligations - Improvement - 0.5% | ||||||
| Guam Government, “A”, 6.75%, 2029 | $ | 685,000 | $ | 729,772 | ||
| Guam Government, “A”, 5.25%, 2037 | 395,000 | 340,099 | ||||
| Guam Government, “A”, 7%, 2039 | 75,000 | 80,411 | ||||
| $ | 1,150,282 | |||||
| General Obligations - Schools - 0.7% | ||||||
| Narragansett, MA, Regional School District, AMBAC, 6%, 2019 | $ | 1,720,000 | $ | 1,752,250 | ||
| Healthcare Revenue - Hospitals - 16.8% | ||||||
| Escambia County, FL, Health Facilities Authority (Baptist Hospital, Inc.), “A”, 6%, 2036 | $ | 560,000 | $ | 542,674 | ||
| Indiana Health & Educational Facilities Finance Authority Rev. (Sisters of St. Francis Health Services, Inc.), “E”, AGM, 5.25%, 2041 | 1,000,000 | 1,007,810 | ||||
| Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Owensboro Medical Health System), “A”, 6.375%, 2040 | 745,000 | 738,511 | ||||
| Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Owensboro Medical Health System), “A”, 6.5%, 2045 | 520,000 | 511,503 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| Healthcare Revenue - Hospitals - continued | ||||||
| Louisville & Jefferson County, KY, Metropolitan Government Healthcare Systems Rev. (Norton Healthcare, Inc.), 5.25%, 2036 | $ | 1,180,000 | $ | 1,129,590 | ||
| Massachusetts Development Finance Agency Rev. (Massachusetts Biomedical Research), “C”, 6.375%, 2016 | 50,000 | 50,998 | ||||
| Massachusetts Health & Educational Facilities Authority Rev., 6.5%, 2012 (c) | 15,000 | 16,583 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Bay State Medical Center), “F”, 5.75%, 2033 | 2,000,000 | 2,031,180 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Bay State Medical Center), “I”, 5.75%, 2036 | 500,000 | 526,290 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Berkshire Health Systems), “E”, 6.25%, 2031 | 1,350,000 | 1,368,482 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Boston Medical Center), 5.25%, 2038 | 2,000,000 | 1,728,600 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Cape Cod Healthcare Obligation), 5%, 2031 | 1,000,000 | 977,980 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Caregroup, Inc.), 5.125%, 2038 | 2,000,000 | 1,849,880 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Caritas Christi), “B”, 6.25%, 2022 | 20,000 | 20,313 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Catholic Health East Issue), 5.5%, 2012 (c) | 1,575,000 | 1,755,716 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Children’s Hospital), “M”, 5.25%, 2039 | 1,500,000 | 1,543,380 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Children’s Hospital), “M”, 5.5%, 2039 | 1,000,000 | 1,047,990 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Healthcare Systems), 6.5%, 2017 | 60,000 | 62,923 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Healthcare Systems), 6%, 2031 | 790,000 | 804,220 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Jordan Hospital), “D”, 5.25%, 2018 | 1,330,000 | 1,213,120 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Lahey Clinic), “D”, 5.25%, 2037 | 1,550,000 | 1,516,381 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Milford-Whitinsville Hospital), “C”, 5.25%, 2018 | 1,500,000 | 1,406,745 | ||||
44
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Healthcare Revenue - Hospitals - continued | ||||||
| Massachusetts Health & Educational Facilities Authority Rev. (New England Medical Center Hospital), “H”, FGIC, 5.375%, 2012 (c) | $ | 815,000 | $ | 889,556 | ||
| Massachusetts Health & Educational Facilities Authority Rev. (New England), “H”, FGIC, 5%, 2012 (c) | 45,000 | 48,765 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (New England), “H”, FGIC, 5%, 2025 | 1,090,000 | 941,640 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Partners Healthcare Systems), “C”, 5.75%, 2021 | 100,000 | 102,962 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Partners Healthcare Systems), “G”, 5%, 2032 | 2,000,000 | 2,010,700 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Partners Healthcare), “J-1”, 5%, 2039 | 2,000,000 | 2,007,180 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Quincy Medical Center), “A”, 6.5%, 2038 | 1,000,000 | 890,120 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (South Shore), 5.625%, 2019 | 740,000 | 744,943 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Southcoast Health Obligation), “D”, 5%, 2029 | 1,000,000 | 980,550 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Southcoast Health Obligation), “D”, 5%, 2039 | 1,000,000 | 954,530 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (University of Massachusetts Memorial Hospital), “C”, 6.5%, 2021 | 1,000,000 | 1,018,270 | ||||
| Massachusetts Health & Educational Facilities Authority Rev., “C”, FGIC, 4.5%, 2035 | 1,045,000 | 897,780 | ||||
| Massachusetts Industrial Finance Agency Rev., Capital Appreciation (Massachusetts Biomedical Research), “A”, 0%, 2010 | 5,300,000 | 5,287,174 | ||||
| New Hampshire Business Finance Authority Rev. (Elliot Hospital Obligated Group), “A”, 6.125%, 2039 | 655,000 | 658,033 | ||||
| New Hampshire Business Finance Authority Rev. (Huggins Hospital), 6.875%, 2039 | 55,000 | 54,965 | ||||
| Washington Health Care Facilities Authority Rev. (Central Washington Health Services), 6.75%, 2029 | 165,000 | 175,461 | ||||
| Washington Health Care Facilities Authority Rev. (Central Washington Health Services), 7%, 2039 | 395,000 | 423,515 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (ProHealth Care, Inc. Obligated Group), 6.625%, 2039 | 1,355,000 | 1,457,695 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (Wheaton Franciscan Services), 5.25%, 2031 | 915,000 | 840,126 | ||||
| $ | 42,234,834 | |||||
| Issuer | Shares/Par | Value ($) | ||||
| Healthcare Revenue - Long Term Care - 1.0% | ||||||
| Massachusetts Development Finance Agency Rev. (Adventcare), “A”, 6.75%, 2037 | $ | 500,000 | $ | 425,060 | ||
| Massachusetts Development Finance Agency Rev. (Carleton-Willard Village), 5.625%, 2030 | 525,000 | 519,582 | ||||
| Massachusetts Development Finance Agency Rev. (Linden Ponds, Inc.), “A”, 5.75%, 2035 | 500,000 | 363,425 | ||||
| Massachusetts Development Finance Agency Rev. (Loomis Communities, Inc.), “A”, 6.9%, 2032 | 530,000 | 524,642 | ||||
| Massachusetts Development Finance Agency Rev. (The Groves in Lincoln), “A”, 7.75%, 2039 | 500,000 | 512,080 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (St. John’s Community, Inc.), “A”, 7.25%, 2029 | 20,000 | 20,604 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (St. John’s Community, Inc.), “A”, 7.625%, 2039 | 130,000 | 135,993 | ||||
| $ | 2,501,386 | |||||
| Healthcare Revenue - Other - 0.8% | ||||||
| Massachusetts Health & Educational Facilities Authority Rev. (Dana Faber Cancer Institute), “K”, 5%, 2037 | $ | 2,000,000 | $ | 2,039,280 | ||
| Industrial Revenue - Airlines - 1.2% | ||||||
| Massachusetts Port Authority Rev., Special Facilities (U.S. Airways), “A”, NATL, 5.625%, 2011 | $ | 1,140,000 | $ | 1,125,260 | ||
| Massachusetts Port Authority Rev., Special Facilities (U.S. Airways), NATL, 5.875%, 2016 | 1,900,000 | 1,781,744 | ||||
| $ | 2,907,004 | |||||
| Industrial Revenue - Environmental Services - 0.3% | ||||||
| Massachusetts Development Finance Agency Rev. (Waste Management, Inc.), FRN, 5.5%, 2027 (b) | $ | 750,000 | $ | 814,418 | ||
| Industrial Revenue - Other - 1.7% | ||||||
| Massachusetts Development Finance Agency Rev., Resource Recovery (Fluor Corp.), 5.625%, 2019 | $ | 1,675,000 | $ | 1,696,122 | ||
| Massachusetts Industrial Finance Agency Rev. (Welch Foods, Inc.), 5.6%, 2017 | 2,100,000 | 2,105,775 | ||||
| Virgin Islands Public Finance Authority, Refinery Facilities Rev. (Hovensa Coker Project), 5.875%, 2022 | 595,000 | 593,655 | ||||
| $ | 4,395,552 | |||||
| Miscellaneous Revenue - Other - 2.3% | ||||||
| Martha’s Vineyard, MA, Land Bank Rev., AMBAC, 5%, 2029 | $ | 785,000 | $ | 792,450 | ||
| Massachusetts Development Finance Agency Rev., 5.5%, 2020 | 1,205,000 | 1,372,507 | ||||
| Massachusetts Health & Educational Facilities Authority Rev., 5.5%, 2034 | 1,500,000 | 1,605,555 | ||||
45
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Miscellaneous Revenue - Other - continued | ||||||
| Massachusetts Port Authority Facilities Rev. (Boston Fuel Project), FGIC, 5%, 2024 | $ | 2,000,000 | $ | 1,967,860 | ||
| $ | 5,738,372 | |||||
| Multi-Family Housing Revenue - 4.9% | ||||||
| Massachusetts Development Finance Agency Rev. (Credit Housing-Chelsea Homes), “I-A”, LOC, 5%, 2024 | $ | 1,185,000 | $ | 1,185,652 | ||
| Massachusetts Development Finance Agency Rev. (Morville House Apartments), “A”, LOC, 4.95%, 2023 | 2,500,000 | 2,487,525 | ||||
| Massachusetts Housing Finance Agency Rev., “A”, AMBAC, 5.5%, 2040 | 1,565,000 | 1,264,927 | ||||
| Massachusetts Housing Finance Agency Rev., “A”, 5.25%, 2048 | 1,000,000 | 963,290 | ||||
| Massachusetts Housing Finance Agency Rev., “C”, 5.35%, 2049 | 1,680,000 | 1,710,290 | ||||
| Massachusetts Housing Finance Agency Rev., “F”, 5.125%, 2034 | 720,000 | 688,414 | ||||
| Massachusetts Housing Finance Agency Rev., “P”, 5%, 2023 | 1,240,000 | 1,240,273 | ||||
| Massachusetts Housing Finance Agency Rev., “P”, 5.2%, 2045 | 1,445,000 | 1,337,290 | ||||
| Massachusetts Housing Finance Agency Rev., Rental Mortgage, “A”, AMBAC, 5.7%, 2020 | 1,375,000 | 1,375,550 | ||||
| $ | 12,253,211 | |||||
| Sales & Excise Tax Revenue - 7.9% | ||||||
| Massachusetts Bay Transportation Authority, Sales Tax Rev., 0%, 2034 | $ | 6,000,000 | $ | 1,672,860 | ||
| Massachusetts Bay Transportation Authority, Sales Tax Rev., “A”, 5.25%, 2031 | 2,000,000 | 2,265,700 | ||||
| Massachusetts Bay Transportation Authority, Sales Tax Rev., “A-1”, 5.25%, 2029 | 1,850,000 | 2,120,378 | ||||
| Massachusetts Bay Transportation Authority, Sales Tax Rev., “B”, 5.25%, 2020 | 5,375,000 | 6,243,385 | ||||
| Massachusetts Bay Transportation Authority, Sales Tax Rev., “B”, 5.25%, 2033 | 1,000,000 | 1,122,840 | ||||
| Massachusetts School Building Authority, Dedicated Sales Tax Rev., AMBAC, 4.75%, 2032 | 2,000,000 | 2,028,420 | ||||
| Massachusetts School Building Authority, Dedicated Sales Tax Rev., “A”, AMBAC, 4.5%, 2035 | 950,000 | 941,431 | ||||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “A”, 5.5%, 2028 | 1,050,000 | 1,101,408 | ||||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “A”, 5.375%, 2039 | 705,000 | 717,048 | ||||
| Route 3 North Transit Improvement Associates Rev., NATL, 5.625%, 2010 (c) | 1,500,000 | 1,515,405 | ||||
| $ | 19,728,875 | |||||
| Single Family Housing Revenue - Local - 1.3% | ||||||
| Boston Housing Authority Capital Program Rev., AGM, 5%, 2028 | $ | 3,000,000 | $ | 3,153,090 | ||
| Issuer | Shares/Par | Value ($) | ||||
| Single Family Housing - State - 2.5% | ||||||
| Massachusetts Housing Finance Agency, Single Family Housing Rev., “102”, 5%, 2029 | $ | 1,500,000 | $ | 1,439,190 | ||
| Massachusetts Housing Finance Agency, Single Family Housing Rev., “122”, 4.85%, 2031 | 1,625,000 | 1,567,881 | ||||
| Massachusetts Housing Finance Agency, Single Family Housing Rev., “128”, AGM, 4.875%, 2038 | 1,200,000 | 1,132,440 | ||||
| Massachusetts Housing Finance Agency, Single Family Housing Rev., “138”, 5.35%, 2033 | 2,000,000 | 2,059,760 | ||||
| $ | 6,199,271 | |||||
| Solid Waste Revenue - 0.8% | ||||||
| Massachusetts Development Finance Agency, Resource Recovery Rev. (Ogden Haverhill Associates), “A”, 6.7%, 2014 | $ | 300,000 | $ | 303,087 | ||
| Massachusetts Development Finance Agency, Resource Recovery Rev. (Ogden Haverhill Associates), “A”, 5.6%, 2019 | 1,925,000 | 1,792,887 | ||||
| $ | 2,095,974 | |||||
| State & Agency - Other - 0.6% | ||||||
| Massachusetts Development Finance Agency Rev. (Visual & Performing Arts Project), 6%, 2015 | $ | 1,235,000 | $ | 1,438,960 | ||
| State & Local Agencies - 4.3% | ||||||
| Delaware Valley, PA, Regional Finance Authority, “C”, FRN, 0.919%, 2037 | $ | 1,370,000 | $ | 971,864 | ||
| Massachusetts College Building Authority Project Rev., “A”, SYNCORA, 0%, 2022 | 8,310,000 | 4,799,690 | ||||
| Massachusetts College Building Authority Project Rev., “A”, SYNCORA, 5.25%, 2023 | 1,000,000 | 1,039,260 | ||||
| Massachusetts College Building Authority Project Rev., “A”, SYNCORA, 5%, 2043 | 2,110,000 | 2,135,046 | ||||
| Massachusetts State College, Building Authority Project Rev., “A”, 5.5%, 2049 | 1,680,000 | 1,800,036 | ||||
| $ | 10,745,896 | |||||
| Student Loan Revenue - 3.5% | ||||||
| Massachusetts Educational Financing Authority Education Loan Rev., “I”, 6%, 2028 | $ | 1,500,000 | $ | 1,576,590 | ||
| Massachusetts Educational Financing Authority, Education Loan Rev., “E”, AMBAC, 5%, 2015 | 90,000 | 90,932 | ||||
| Massachusetts Educational Financing Authority, Education Loan Rev., “H”, ASSD GTY, 6.35%, 2030 | 2,420,000 | 2,560,505 | ||||
| Massachusetts Educational Financing Authority, Education Loan Rev., “I-A”, 5.5%, 2022 | 3,000,000 | 3,128,370 | ||||
| Massachusetts Educational Financing Authority, Education Loan Rev., “Issue E”, AMBAC, 5.3%, 2016 | 1,360,000 | 1,361,700 | ||||
| $ | 8,718,097 | |||||
| Tax - Other - 2.4% | ||||||
| Commonwealth of Puerto Rico, Public Improvement, “B”, 6.5%, 2037 | $ | 1,650,000 | $ | 1,796,735 | ||
46
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Tax - Other - continued | ||||||
| Guam Government Ltd. Obligation Rev., “A”, 5.375%, 2024 | $ | 260,000 | $ | 268,986 | ||
| Guam Government Ltd. Obligation Rev., “A”, 5.625%, 2029 | 85,000 | 87,060 | ||||
| Massachusetts Bay Transportation Authority, Unrefunded Balance, “A”, 5.75%, 2018 | 320,000 | 322,259 | ||||
| Massachusetts Special Obligation Dedicated Tax Rev., NATL, 5.5%, 2023 | 1,585,000 | 1,773,235 | ||||
| Puerto Rico Infrastructure Financing Authority, Special Tax Rev., “C”, FGIC, 5.5%, 2022 | 1,050,000 | 1,078,161 | ||||
| Virgin Islands Public Finance Authority Rev. (Diageo), “A”, 6.625%, 2029 | 600,000 | 647,070 | ||||
| $ | 5,973,506 | |||||
| Tax Assessment - 0.1% | ||||||
| Massachusetts Bay Transportation Authority Rev., 5.25%, 2030 | $ | 245,000 | $ | 245,772 | ||
| Tobacco - 0.9% | ||||||
| Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 5.125%, 2024 | $ | 320,000 | $ | 294,093 | ||
| Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 5.875%, 2030 | 320,000 | 269,558 | ||||
| Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 5.875%, 2047 | 410,000 | 297,525 | ||||
| Children’s Trust Fund, Tobacco Settlement Rev., Puerto Rico, 5.5%, 2039 | 400,000 | 352,232 | ||||
| Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., “A-2”, 0% to 2012, 5.30% to 2037 | 1,560,000 | 993,065 | ||||
| $ | 2,206,473 | |||||
| Universities - Colleges - 22.0% | ||||||
| Illinois Finance Authority Rev. (Roosevelt University Project), 6.25%, 2029 | $ | 2,005,000 | $ | 2,058,333 | ||
| Massachusetts Development Finance Agency Rev. (Boston College), “P”, 5%, 2042 | 2,500,000 | 2,556,150 | ||||
| Massachusetts Development Finance Agency Rev. (Boston University), “V-1”, 5%, 2029 | 1,500,000 | 1,541,055 | ||||
| Massachusetts Development Finance Agency Rev. (Brandeis University), “N”, 5%, 2039 | 3,000,000 | 3,092,010 | ||||
| Massachusetts Development Finance Agency Rev. (Brandeis University), “O-1”, 5%, 2035 | 1,000,000 | 1,014,330 | ||||
| Massachusetts Development Finance Agency Rev. (Curry College), “A”, ACA, 5%, 2036 | 2,000,000 | 1,786,760 | ||||
| Massachusetts Development Finance Agency Rev. (Hampshire College), 5.7%, 2034 | 1,000,000 | 987,000 | ||||
| Massachusetts Development Finance Agency Rev. (Mount Holyoke College), 5.125%, 2021 | 1,000,000 | 1,043,830 | ||||
| Massachusetts Development Finance Agency Rev. (New England Conservatory of Music), 5.25%, 2038 | 2,000,000 | 1,934,120 | ||||
| Massachusetts Development Finance Agency Rev. (Olin College), “B”, SYNCORA, 5.25%, 2033 | 4,250,000 | 4,277,243 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| Universities - Colleges - continued | ||||||
| Massachusetts Development Finance Agency Rev. (Pharmacy & Allied Health Sciences), 5.75%, 2013 (c) | $ | 1,000,000 | $ | 1,148,760 | ||
| Massachusetts Development Finance Agency Rev. (Simmons College), SYNCORA, 5.25%, 2026 | 2,250,000 | 2,262,330 | ||||
| Massachusetts Development Finance Agency Rev. (Smith College), 5%, 2035 | 1,000,000 | 1,026,780 | ||||
| Massachusetts Development Finance Agency Rev. (Western New England College), 6.125%, 2012 (c) | 1,115,000 | 1,259,939 | ||||
| Massachusetts Development Finance Agency Rev. (Wheelock College), “C”, 5.25%, 2037 | 1,500,000 | 1,385,355 | ||||
| Massachusetts Development Finance Agency Rev. (Worcester Polytechnic Institute), 5%, 2040 | 1,000,000 | 990,690 | ||||
| Massachusetts Educational Financing Authority, Education Loan Rev., “I-A”, 5.2%, 2027 | 1,000,000 | 998,810 | ||||
| Massachusetts Health & Educational Facilities Authority Rev., 5%, 2037 | 2,000,000 | 1,999,980 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Boston College), 5.5%, 2027 | 1,735,000 | 2,015,636 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Harvard University), 5.5%, 2036 | 1,500,000 | 1,665,900 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Lesley University), “A”, ASSD GTY, 5.25%, 2039 | 1,000,000 | 1,040,750 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Massachusetts Institute of Technology), “A”, 5%, 2038 | 2,000,000 | 2,100,100 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Massachusetts Institute of Technology), “I-1”, 5.2%, 2028 | 1,000,000 | 1,182,250 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Northeastern University), “A”, 5%, 2035 | 1,500,000 | 1,501,200 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Simmons College), “I”, 8%, 2029 | 500,000 | 561,265 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Springfield College), 5.625%, 2040 | 2,500,000 | 2,451,700 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Stonehill College), 4.75%, 2026 | 750,000 | 775,455 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Stonehill College), MSQLF, 4.875%, 2027 | 250,000 | 259,110 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Stonehill College), 5%, 2028 | 640,000 | 665,879 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Stonehill College), 5%, 2029 | 300,000 | 311,442 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Suffolk University), “A”, 6.25%, 2030 | 2,000,000 | 2,099,900 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Tufts University), 5.375%, 2038 | 850,000 | 909,840 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (UMass Worcester) ,”B”, FGIC, 5.125%, 2019 | 1,005,000 | 1,022,457 | ||||
47
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Universities - Colleges - continued | ||||||
| Massachusetts Health & Educational Facilities Authority Rev. (University of Massachusetts), “A”, FGIC, 5.85%, 2010 (c) | $ | 1,200,000 | $ | 1,244,304 | ||
| Massachusetts Health & Higher Educational Facilities Authority Rev. (Williams College), “H”, 5%, 2028 | 1,000,000 | 1,038,320 | ||||
| Massachusetts Industrial Finance Agency Rev. (Brandeis University), “C”, NATL, 0%, 2010 | 1,000,000 | 996,220 | ||||
| Massachusetts Industrial Finance Agency Rev. (Brandeis University), “C”, NATL, 0%, 2011 | 500,000 | 488,660 | ||||
| University of Massachusetts Building Authority Project Rev., 5%, 2034 | 1,000,000 | 1,034,610 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (Beloit College), “A”, 6.125%, 2035 | 250,000 | 247,918 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (Beloit College), “A”, 6.125%, 2039 | 250,000 | 244,495 | ||||
| $ | 55,220,886 | |||||
| Universities - Secondary Schools - 3.5% | ||||||
| Massachusetts Development Finance Agency Rev. (Belmont Hill School), 4.375%, 2031 | $ | 1,180,000 | $ | 1,108,822 | ||
| Massachusetts Development Finance Agency Rev. (Belmont Hill School), 4.5%, 2036 | 1,000,000 | 924,350 | ||||
| Massachusetts Development Finance Agency Rev. (Dexter School), 4.75%, 2032 | 1,130,000 | 1,101,298 | ||||
| Massachusetts Development Finance Agency Rev. (Dexter School), 5%, 2037 | 1,000,000 | 994,090 | ||||
| Massachusetts Development Finance Agency Rev. (Middlesex School), 5.125%, 2023 | 500,000 | 514,185 | ||||
| Massachusetts Development Finance Agency Rev. (Milton Academy), “A”, 5%, 2035 | 2,000,000 | 2,072,160 | ||||
| Massachusetts Industrial Finance Agency Rev. (Concord Academy), 5.5%, 2027 | 2,000,000 | 2,000,660 | ||||
| $ | 8,715,565 | |||||
| Utilities - Investor Owned - 1.0% | ||||||
| Massachusetts Development Finance Agency, Solid Waste Disposal Rev. (Dominion Energy Brayton), 5.75%, 2042 (b) | $ | 1,000,000 | $ | 1,058,600 | ||
| Michigan Strategic Fund Ltd. Obligation Rev. (Detroit Edison), 5.625%, 2020 | 775,000 | 851,167 | ||||
| Michigan Strategic Fund Ltd. Obligation Rev. (Detroit Edison), 5.5%, 2029 (b) | 560,000 | 623,644 | ||||
| $ | 2,533,411 | |||||
| Utilities - Municipal Owned - 2.3% | ||||||
| Long Island Power Authority, Electric Systems Rev., “C”, AGM, 5%, 2035 | $ | 1,480,000 | $ | 1,487,977 | ||
| Massachusetts Development Finance Agency Rev. (Devens Electric Systems), 5.625%, 2016 | 725,000 | 738,239 | ||||
| Puerto Rico Electric Power Authority, Power Rev., “V”, AGM, 5.25%, 2027 | 1,365,000 | 1,491,918 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| Utilities - Municipal Owned - continued | ||||||
| Puerto Rico Electric Power Authority, Power Rev., “XX”, 5.25%, 2040 | $ | 2,100,000 | $ | 2,071,629 | ||
| $ | 5,789,763 | |||||
| Utilities - Other - 0.8% | ||||||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2019 | $ | 805,000 | $ | 819,909 | ||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2021 | 405,000 | 408,787 | ||||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2022 | 210,000 | 210,941 | ||||
| Tennessee Energy Acquisition Corp., Gas Rev., “C”, 5%, 2021 | 480,000 | 478,776 | ||||
| $ | 1,918,413 | |||||
| Water & Sewer Utility Revenue - 6.2% | ||||||
| Commonwealth of Puerto Rico Aqueduct & Sewer Authority Rev., “A”, 6%, 2038 | $ | 2,000,000 | $ | 2,073,360 | ||
| King County, WA, Sewer Rev., 5%, 2038 | 1,000,000 | 1,035,600 | ||||
| Massachusetts Water Pollution Abatement Trust, 5.25%, 2030 (f) | 2,310,000 | 2,726,724 | ||||
| Massachusetts Water Pollution Abatement Trust, 5.25%, 2033 | 2,000,000 | 2,336,480 | ||||
| Massachusetts Water Pollution Abatement Trust Rev., Unrefunded Balance, “5”, 5.75%, 2017 | 25,000 | 25,288 | ||||
| Massachusetts Water Pollution Abatement Trust, “10”, 5%, 2029 | 160,000 | 166,667 | ||||
| Massachusetts Water Pollution Abatement Trust, “10”, 5%, 2034 | 145,000 | 149,994 | ||||
| Massachusetts Water Pollution Abatement Trust, “A”, 5%, 2032 | 75,000 | 76,558 | ||||
| Massachusetts Water Resources Authority, General Rev., “A”, FGIC, 6%, 2010 (c) | 1,000,000 | 1,028,300 | ||||
| Massachusetts Water Resources Authority, General Rev., “B”, AGM, 5.25%, 2031 | 1,625,000 | 1,838,964 | ||||
| Massachusetts Water Resources Authority, General Rev., “B”, 5%, 2034 | 655,000 | 688,320 | ||||
| Massachusetts Water Resources Authority, General Rev., “J”, AGM, 5%, 2023 | 500,000 | 527,400 | ||||
| New York Environmental Facilities Corp., Clean Water & Drinking Rev., “B”, 5%, 2033 | 2,120,000 | 2,240,925 | ||||
| St. Mary’s, PA, Water Authority Rev., 5.15%, 2030 | 750,000 | 745,335 | ||||
| $ | 15,659,915 | |||||
| Total Municipal Bonds (Identified Cost, $237,659,712) | $ | 246,278,679 | ||||
| Money Market Funds (v) - 0.1% | ||||||
| MFS Institutional Money Market Portfolio, 0.17%, at Cost and Net Asset Value | 144,713 | $ | 144,713 | |||
| Total Investments (Identified Cost, $237,804,425) | $ | 246,423,392 | ||||
| Other Assets, Less Liabilities - 1.6% | 4,104,383 | |||||
| Net Assets - 100.0% | $ | 250,527,775 | ||||
48
Table of Contents
Portfolio of Investments – continued
Derivative Contracts at 3/31/10
Futures Contracts Outstanding at 3/31/10
| Description | Currency | Contracts | Value | Expiration Date | Unrealized Appreciation (Depreciation) | |||||
| Asset Derivatives | ||||||||||
| Interest Rate Futures | ||||||||||
| U.S. Treasury Bond 30 yr (Short) | USD | 50 | $5,806,250 | Jun-10 | $ 5,684 | |||||
| U.S. Treasury Note 10 yr (Short) | USD | 25 | 2,906,250 | Jun-10 | 10,207 | |||||
| $15,891 | ||||||||||
At March 31, 2010, the fund had sufficient cash and/or other liquid securities to cover any commitments under these derivative contracts.
Portfolio Footnotes:
| (a) | Non-income producing security. |
| (b) | Mandatory tender date is earlier than stated maturity date. |
| (c) | Refunded bond. |
| (d) | Non-income producing security – in default. |
| (f) | All or a portion of the security has been segregated as collateral for open futures contracts. |
| (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 $731,408, representing 0.2% of net assets for the California Fund and $163,200, representing 0.32% of net assets for the Florida Fund. |
| (p) | Primary inverse floater. |
| (v) | Underlying fund that is available only to investment companies managed by MFS. The rate quoted is the annualized seven-day yield of the fund at period end. |
The following abbreviations are used in this report and are defined:
| COP | Certificate of Participation | |||||
| ETM | Escrowed to Maturity | |||||
| FRN | Floating Rate Note. Interest rate resets periodically and may not be the rate reported at period end. | |||||
| LOC | Letter of Credit | |||||
| Insurers | Inverse Floaters | |||||
| ACA | ACA Financial Guaranty Corp. | LEVRRS | Leveraged Reverse Rate Security | |||
| AGM | Assured Guaranty Municipal | RIBS | Residual Interest Bonds | |||
| AMBAC | AMBAC Indemnity Corp. | |||||
| ASSD GTY | Assured Guaranty Insurance Co. | |||||
| BHAC | Berkshire Hathaway Assurance Corp. | |||||
| CALHF | California Health Construction Loan Insurance | |||||
| CIFG | CDC IXIS Financial Guaranty | |||||
| FGIC | Financial Guaranty Insurance Co. | |||||
| FHA | Federal Housing Administration | |||||
| FNMA | Federal National Mortgage Assn. | |||||
| GNMA | Government National Mortgage Assn. | |||||
| MSQLF | Michigan Student Qualified Loan Fund | |||||
| NATL | National Public Finance Guarantee Corp. | |||||
| RADIAN | Radian Asset Assurance, Inc. | |||||
| ST AID | State Aid | |||||
| SYNCORA | Syncora Guarantee Inc. | |||||
| XLCA | XL Capital Insurance Co. | |||||
See Notes to Financial Statements
49
Table of Contents
Financial Statements
STATEMENTS OF ASSETS AND LIABILITIES
At 3/31/10
These statements represent each fund’s balance sheet, which details the assets and liabilities comprising the total value of each fund.
| Alabama Fund | Arkansas Fund | California Fund | Florida Fund | |||||||
| Assets | ||||||||||
| Investments – | ||||||||||
Non-affiliated issuers, at identified cost | $80,119,368 | $176,723,558 | $373,740,784 | $49,206,408 | ||||||
Underlying funds, at cost and net asset value | 583,601 | 5,133,873 | 5,620,967 | 686,491 | ||||||
| Total investments, at identified cost | $80,702,969 | $181,857,431 | $379,361,751 | $49,892,899 | ||||||
Unrealized appreciation (depreciation) | 2,236,506 | 5,466,642 | (4,972,825 | ) | (260,652 | ) | ||||
| Total investments, at value | $82,939,475 | $187,324,073 | $374,388,926 | $49,632,247 | ||||||
Receivables for | ||||||||||
Investments sold | 349,364 | — | 1,282,700 | 60,000 | ||||||
Fund shares sold | 113,127 | 454,667 | 252,046 | 96,281 | ||||||
Interest and dividends | 1,141,240 | 2,442,803 | 5,035,263 | 1,026,340 | ||||||
| Receivable from investment adviser | 5,875 | — | — | — | ||||||
Other assets | 1,121 | 2,151 | 4,022 | 765 | ||||||
Total assets | $84,550,202 | $190,223,694 | $380,962,957 | $50,815,633 | ||||||
| Liabilities | ||||||||||
| Payables for | ||||||||||
Distributions | $113,196 | $234,589 | $643,258 | $99,172 | ||||||
Daily variation margin on open futures contracts | 7,031 | 5,313 | 48,906 | 5,313 | ||||||
Investments purchased | — | 2,471,461 | 2,969,951 | 111,000 | ||||||
Fund shares reacquired | 77,918 | 237,312 | 1,423,411 | 11,768 | ||||||
| Payable to affiliates | ||||||||||
Investment adviser | 2,076 | 4,610 | 9,269 | 1,246 | ||||||
Shareholder servicing costs | 8,874 | 13,034 | 36,813 | 4,841 | ||||||
Distribution and service fees | 1,378 | 3,993 | 9,137 | 433 | ||||||
Administrative services fee | 124 | 208 | 364 | 96 | ||||||
| Payable for independent Trustees’ compensation | 7,226 | 6,941 | 15,437 | 6,940 | ||||||
Accrued expenses and other liabilities | 13,505 | 23,025 | 37,145 | 11,300 | ||||||
Total liabilities | $231,328 | $3,000,486 | $5,193,691 | $252,109 | ||||||
Net assets | $84,318,874 | $187,223,208 | $375,769,266 | $50,563,524 | ||||||
| Net assets consist of | ||||||||||
| Paid-in capital | $82,024,790 | $180,964,358 | $380,865,090 | $51,011,566 | ||||||
| Unrealized appreciation (depreciation) on investments | 2,241,204 | 5,473,582 | (4,949,327 | ) | (257,701 | ) | ||||
| Accumulated net realized gain (loss) on investments | 11,362 | 770,408 | (408,130 | ) | (191,522 | ) | ||||
Undistributed net investment income | 41,518 | 14,860 | 261,633 | 1,181 | ||||||
Net assets | $84,318,874 | $187,223,208 | $375,769,266 | $50,563,524 | ||||||
50
Table of Contents
Statements of Assets and Liabilities – continued
| Alabama Fund | Arkansas Fund | California Fund | Florida Fund | |||||
Net assets | ||||||||
| Class A | $78,841,829 | $179,093,882 | $324,093,382 | $46,439,795 | ||||
| Class B | 5,477,045 | 8,129,326 | 13,866,231 | 4,123,729 | ||||
Class C | — | — | 37,809,653 | — | ||||
Total net assets | $84,318,874 | $187,223,208 | $375,769,266 | $50,563,524 | ||||
Shares of beneficial interest outstanding | ||||||||
| Class A | 7,695,496 | 18,006,281 | 58,250,849 | 4,850,017 | ||||
| Class B | 534,633 | 816,563 | 2,491,475 | 430,612 | ||||
Class C | — | — | 6,772,476 | — | ||||
Total shares of beneficial interest outstanding | 8,230,129 | 18,822,844 | 67,514,800 | 5,280,629 | ||||
Class A shares | ||||||||
Net asset value per share | $10.25 | $9.95 | $5.56 | $9.58 | ||||
Offering price per share (100 / 95.25 x net asset value per share) | $10.76 | $10.45 | $5.84 | $10.06 | ||||
Class B shares | ||||||||
Net asset value and offering price per share | $10.24 | $9.96 | $5.57 | $9.58 | ||||
Class C shares | ||||||||
Net asset value and offering price per share | $— | $— | $5.58 | $— | ||||
On sales of $50,000 or more, the maximum offering price of Class A shares is reduced. A contingent deferred sales charge may be imposed on redemptions of Class A, Class B, and Class C shares.
See Notes to Financial Statements
51
Table of Contents
Statements of Assets and Liabilities – continued
| At 3/31/10 | Georgia Fund | Maryland Fund | Massachusetts Fund | ||||
| Assets | |||||||
| Investments – | |||||||
Non-affiliated issuers, at identified cost | $63,375,213 | $108,122,699 | $237,659,712 | ||||
Underlying funds, at cost and net asset value | 1,465,795 | 1,201,518 | 144,713 | ||||
| Total investments, at identified cost | $64,841,008 | $109,324,217 | $237,804,425 | ||||
Unrealized appreciation (depreciation) | 1,962,397 | 2,402,360 | 8,618,967 | ||||
| Total investments, at value | $66,803,405 | $111,726,577 | $246,423,392 | ||||
Receivables for | |||||||
Investments sold | — | 553,049 | 5,257,050 | ||||
Fund shares sold | 160,240 | 66,013 | 477,554 | ||||
Interest and dividends | 978,167 | 1,555,441 | 3,457,338 | ||||
Receivable from investment adviser | 816 | — | — | ||||
Other assets | 894 | 1,406 | 2,668 | ||||
Total assets | $67,943,522 | $113,902,486 | $255,618,002 | ||||
| Liabilities | |||||||
Payables for | |||||||
Distributions | $88,842 | $155,559 | $424,640 | ||||
Daily variation margin on open futures contracts | 5,000 | 10,937 | 31,250 | ||||
Investments purchased | 575,123 | 249,183 | 4,396,442 | ||||
Fund shares reacquired | 66,830 | 11,211 | 171,639 | ||||
Payable to affiliates | |||||||
Investment adviser | 1,655 | 3,378 | 6,169 | ||||
Shareholder servicing costs | 7,471 | 9,205 | 15,107 | ||||
Distribution and service fees | 1,051 | 1,809 | 3,994 | ||||
Administrative services fee | 110 | 148 | 260 | ||||
Payable for independent Trustees’ compensation | 8,151 | 10,961 | 10,907 | ||||
Accrued expenses and other liabilities | 13,820 | 17,878 | 29,819 | ||||
Total liabilities | $768,053 | $470,269 | $5,090,227 | ||||
Net assets | $67,175,469 | $113,432,217 | $250,527,775 | ||||
| Net assets consist of | |||||||
| Paid-in capital | $65,189,248 | $110,842,538 | $240,204,569 | ||||
Unrealized appreciation (depreciation) on investments | 1,965,937 | 2,408,670 | 8,634,858 | ||||
Accumulated net realized gain (loss) on investments | (30,231 | ) | 76,406 | 1,486,021 | |||
Undistributed net investment income | 50,515 | 104,603 | 202,327 | ||||
Net assets | $67,175,469 | $113,432,217 | $250,527,775 | ||||
52
Table of Contents
Statements of Assets and Liabilities – continued
| Georgia Fund | Maryland Fund | Massachusetts Fund | ||||
Net assets | ||||||
Class A | $63,963,814 | $107,181,543 | $236,723,744 | |||
Class B | 3,211,655 | 6,250,674 | 13,804,031 | |||
Total net assets | $67,175,469 | $113,432,217 | $250,527,775 | |||
Shares of beneficial interest outstanding | ||||||
Class A | 6,040,986 | 9,803,960 | 21,381,551 | |||
Class B | 302,219 | 571,983 | 1,244,644 | |||
Total shares of beneficial interest outstanding | 6,343,205 | 10,375,943 | 22,626,195 | |||
Class A shares | ||||||
Net asset value per share | ||||||
(net assets/shares of beneficial interest outstanding) | $10.59 | $10.93 | $11.07 | |||
Offering price per share (100 / 95.25 × net asset value per share) | $11.12 | $11.48 | $11.62 | |||
Class B shares | ||||||
Net asset value and offering price per share | ||||||
(net assets/shares of beneficial interest outstanding) | $10.63 | $10.93 | $11.09 | |||
On sales of $50,000 or more, the maximum offering price of Class A shares is reduced. A contingent deferred sales charge may be imposed on redemptions of Class A and Class B shares.
See Notes to Financial Statements
53
Table of Contents
Financial Statements
Year ended 3/31/10
These statements describe how much each fund earned in investment income and accrued in expenses. They also describe any gains or losses generated by each fund’s operations.
| Alabama Fund | Arkansas Fund | California Fund | Florida Fund | |||||||||
| Net investment income | ||||||||||||
| Interest | $4,271,441 | $8,588,403 | $19,997,787 | $2,749,377 | ||||||||
Dividends from underlying funds | 3,634 | 10,719 | 20,552 | 1,758 | ||||||||
Total investment income | $4,275,075 | $8,599,122 | $20,018,339 | $2,751,135 | ||||||||
| Expenses | ||||||||||||
Management fee | $365,188 | $764,509 | $1,643,890 | $225,238 | ||||||||
Distribution and service fees | 249,346 | 401,079 | 1,148,292 | 120,563 | ||||||||
Shareholder servicing costs | 49,289 | 97,622 | 219,972 | 33,796 | ||||||||
Administrative services fee | 22,605 | 37,186 | 69,731 | 17,594 | ||||||||
Independent Trustees’ compensation | 4,734 | 7,693 | 15,399 | 2,685 | ||||||||
Custodian fee | 24,823 | 36,393 | 65,508 | 20,598 | ||||||||
Shareholder communications | 8,613 | 13,563 | 21,907 | 7,495 | ||||||||
Auditing fees | 44,506 | 44,506 | 44,506 | 44,506 | ||||||||
Legal fees | 11,210 | 10,051 | 28,382 | 11,324 | ||||||||
Registration fees | 28,973 | 35,162 | 44,792 | 28,456 | ||||||||
Miscellaneous | 27,888 | 38,926 | 60,963 | 23,573 | ||||||||
Total expenses | $837,175 | $1,486,690 | $3,363,342 | $535,828 | ||||||||
Fees paid indirectly | (460 | ) | (5 | ) | (7,003 | ) | (581 | ) | ||||
Reduction of expenses by investment adviser | (34,440 | ) | (176,144 | ) | (336,280 | ) | (83,975 | ) | ||||
Net expenses | $802,275 | $1,310,541 | $3,020,059 | $451,272 | ||||||||
Net investment income | $3,472,800 | $7,288,581 | $16,998,280 | $2,299,863 | ||||||||
| Realized and unrealized gain (loss) on investments | ||||||||||||
| Realized gain (loss) (identified cost basis) | ||||||||||||
Investment transactions | $620,084 | $249,895 | $2,161,813 | $(93,438 | ) | |||||||
Futures contracts | 44,302 | 63,387 | 228,921 | 25,018 | ||||||||
Net realized gain (loss) on investments | $664,386 | $313,282 | $2,390,734 | $(68,420 | ) | |||||||
| Change in unrealized appreciation (depreciation) | ||||||||||||
Investments | $4,933,959 | $8,195,185 | $24,919,831 | $3,538,087 | ||||||||
Futures contracts | 4,698 | 39,893 | 191,257 | 20,925 | ||||||||
Net unrealized gain (loss) on investments | $4,938,657 | $8,235,078 | $25,111,088 | $3,559,012 | ||||||||
Net realized and unrealized gain (loss) on investments | $5,603,043 | $8,548,360 | $27,501,822 | $3,490,592 | ||||||||
Change in net assets from operations | $9,075,843 | $15,836,941 | $44,500,102 | $5,790,455 | ||||||||
See Notes to Financial Statements
54
Table of Contents
Statements of Operations – continued
| Year ended 3/31/10 | Georgia Fund | Maryland Fund | Massachusetts Fund | ||||||
| Net investment income | |||||||||
| Interest | $3,323,060 | $5,874,120 | $12,149,670 | ||||||
Dividends from underlying funds | 2,216 | 4,263 | 11,924 | ||||||
Total investment income | $3,325,276 | $5,878,383 | $12,161,594 | ||||||
| Expenses | |||||||||
Management fee | $284,596 | $487,761 | $1,031,106 | ||||||
Distribution and service fees | 186,473 | 326,756 | 693,914 | ||||||
Shareholder servicing costs | 41,531 | 77,795 | 138,063 | ||||||
Administrative services fee | 19,644 | 27,142 | 46,979 | ||||||
Independent Trustees’ compensation | 4,527 | 5,534 | 8,758 | ||||||
Custodian fee | 23,277 | 30,143 | 46,347 | ||||||
Shareholder communications | 8,353 | 11,827 | 16,264 | ||||||
Auditing fees | 44,506 | 44,506 | 44,506 | ||||||
Legal fees | 8,534 | 11,012 | 9,184 | ||||||
Miscellaneous | 58,067 | 64,199 | 81,132 | ||||||
Total expenses | $679,508 | $1,086,675 | $2,116,253 | ||||||
Fees paid indirectly | (1 | ) | (1,796 | ) | (3,730 | ) | |||
Reduction of expenses by investment adviser | (17,518 | ) | (635 | ) | (1,325 | ) | |||
Net expenses | $661,989 | $1,084,244 | $2,111,198 | ||||||
Net investment income | $2,663,287 | $4,794,139 | $10,050,396 | ||||||
| Realized and unrealized gain (loss) on investments | |||||||||
| Realized gain (loss) (identified cost basis) | �� | ||||||||
Investment transactions | $121,776 | $159,541 | $1,223,590 | ||||||
Futures contracts | 45,471 | 51,643 | 157,908 | ||||||
Net realized gain (loss) on investments | $167,247 | $211,184 | $1,381,498 | ||||||
| Change in unrealized appreciation (depreciation) | |||||||||
Investments | $3,477,234 | $7,551,587 | $14,042,462 | ||||||
Futures contracts | 21,514 | 42,259 | 96,775 | ||||||
Net unrealized gain (loss) on investments | $3,498,748 | $7,593,846 | $14,139,237 | ||||||
Net realized and unrealized gain (loss) on investments | $3,665,995 | $7,805,030 | $15,520,735 | ||||||
Change in net assets from operations | $6,329,282 | $12,599,169 | $25,571,131 | ||||||
See Notes to Financial Statements
55
Table of Contents
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 3/31/10 | Alabama Fund | Arkansas Fund | California Fund | Florida Fund | ||||||||
| Change in net assets | ||||||||||||
| From operations | ||||||||||||
| Net investment income | $3,472,800 | $7,288,581 | $16,998,280 | $2,299,863 | ||||||||
Net realized gain (loss) on investments | 664,386 | 313,282 | 2,390,734 | (68,420 | ) | |||||||
Net unrealized gain (loss) on investments | 4,938,657 | 8,235,078 | 25,111,088 | 3,559,012 | ||||||||
Change in net assets from operations | $9,075,843 | $15,836,941 | $44,500,102 | $5,790,455 | ||||||||
| Distributions declared to shareholders | ||||||||||||
From net investment income | $(3,345,125 | ) | $(6,949,478 | ) | $(16,635,846 | ) | $(2,275,569 | ) | ||||
From net realized gain on investments | (705,054 | ) | (348,419 | ) | — | — | ||||||
Total distributions declared to shareholders | $(4,050,179 | ) | $(7,297,897 | ) | $(16,635,846 | ) | $(2,275,569 | ) | ||||
Change in net assets from fund share transactions | $4,088,778 | $31,473,233 | $7,439,316 | $(1,333,728 | ) | |||||||
Total change in net assets | $9,114,442 | $40,012,277 | $35,303,572 | $2,181,158 | ||||||||
| Net assets | ||||||||||||
| At beginning of period | 75,204,432 | 147,210,931 | 340,465,694 | 48,382,366 | ||||||||
At end of period | $84,318,874 | $187,223,208 | $375,769,266 | $50,563,524 | ||||||||
Undistributed net investment income included in net assets at end of period | $41,518 | $14,860 | $261,633 | $1,181 | ||||||||
| Year ended 3/31/10 | Georgia Fund | Maryland Fund | Massachusetts Fund | |||||||||
| Change in net assets | ||||||||||||
| From operations | ||||||||||||
Net investment income | $2,663,287 | $4,794,139 | $10,050,396 | |||||||||
Net realized gain (loss) on investments | 167,247 | 211,184 | 1,381,498 | |||||||||
Net unrealized gain (loss) on investments | 3,498,748 | 7,593,846 | 14,139,237 | |||||||||
Change in net assets from operations | $6,329,282 | $12,599,169 | $25,571,131 | |||||||||
| Distributions declared to shareholders | ||||||||||||
From net investment income | $(2,630,751 | ) | $(4,685,612 | ) | $(9,840,253 | ) | ||||||
From net realized gain on investments | (168,927 | ) | (5,735 | ) | (1,290,564 | ) | ||||||
Total distributions declared to shareholders | $(2,799,678 | ) | $(4,691,347 | ) | $(11,130,817 | ) | ||||||
Change in net assets from fund share transactions | $6,146,031 | $4,063,916 | $33,816,194 | |||||||||
Total change in net assets | $9,675,635 | $11,971,738 | $48,256,508 | |||||||||
| Net assets | ||||||||||||
At beginning of period | 57,499,834 | 101,460,479 | 202,271,267 | |||||||||
At end of period | $67,175,469 | $113,432,217 | $250,527,775 | |||||||||
Undistributed net investment income included in net assets at end of period | $50,515 | $104,603 | $202,327 | |||||||||
See Notes to Financial Statements
56
Table of Contents
Statements of Changes in Net Assets – continued
| Year ended 3/31/09 | Alabama Fund | Arkansas Fund | California Fund | Florida Fund | ||||||||
| Change in net assets | ||||||||||||
| From operations | ||||||||||||
| Net investment income | $3,277,051 | $6,451,126 | $18,077,487 | $2,579,180 | ||||||||
Net realized gain (loss) on investments | (151,797 | ) | 546,020 | 861,971 | 18,328 | |||||||
Net unrealized gain (loss) on investments | (3,786,441 | ) | (5,085,372 | ) | (30,939,445 | ) | (4,400,378 | ) | ||||
Change in net assets from operations | $(661,187 | ) | $1,911,774 | $(11,999,987 | ) | $(1,802,870 | ) | |||||
| Distributions declared to shareholders | ||||||||||||
| From net investment income | $(3,374,521 | ) | $(6,505,641 | ) | $(17,647,476 | ) | $(2,563,816 | ) | ||||
From net realized gain on investments | (485,955 | ) | (1,282,996 | ) | — | (90,551 | ) | |||||
Total distributions declared to shareholders | $(3,860,476 | ) | $(7,788,637 | ) | $(17,647,476 | ) | $(2,654,367 | ) | ||||
Change in net assets from fund share transactions | $(144,553 | ) | $7,422,543 | $(28,087,589 | ) | $(6,161,845 | ) | |||||
Total change in net assets | $(4,666,216 | ) | $1,545,680 | $(57,735,052 | ) | $(10,619,082 | ) | |||||
| Net assets | ||||||||||||
| At beginning of period | 79,870,648 | 145,665,251 | 398,200,746 | 59,001,448 | ||||||||
At end of period | $75,204,432 | $147,210,931 | $340,465,694 | $48,382,366 | ||||||||
Undistributed net investment income included in net assets at end of period | $46,741 | $28,303 | $291,435 | $14,830 | ||||||||
| Year ended 3/31/09 | Georgia Fund | Maryland Fund | Massachusetts Fund | |||||||||
| Change in net assets | ||||||||||||
| From operations | ||||||||||||
| Net investment income | $2,554,148 | $5,019,778 | $9,492,669 | |||||||||
Net realized gain (loss) on investments | (187,197 | ) | (54,821 | ) | 3,396,260 | |||||||
Net unrealized gain (loss) on investments | (2,599,783 | ) | (7,237,001 | ) | (13,981,972 | ) | ||||||
Change in net assets from operations | $(232,832 | ) | $(2,272,044 | ) | $(1,093,043 | ) | ||||||
| Distributions declared to shareholders | ||||||||||||
| From net investment income | $(2,401,875 | ) | $(4,862,616 | ) | $(9,262,635 | ) | ||||||
From net realized gain on investments | (1,127,587 | ) | (371,710 | ) | (913,887 | ) | ||||||
Total distributions declared to shareholders | $(3,529,462 | ) | $(5,234,326 | ) | $(10,176,522 | ) | ||||||
Change in net assets from fund share transactions | $5,005,067 | $(7,080,089 | ) | $(616,371 | ) | |||||||
Total change in net assets | $1,242,773 | $(14,586,459 | ) | $(11,885,936 | ) | |||||||
| Net assets | ||||||||||||
| At beginning of period | 56,257,061 | 116,046,938 | 214,157,203 | |||||||||
At end of period | $57,499,834 | $101,460,479 | $202,271,267 | |||||||||
Undistributed net investment income included in net assets at end of period | $52,981 | $117,798 | $225,251 | |||||||||
See Notes to Financial Statements
57
Table of Contents
Financial Statements
MFS® ALABAMA MUNICIPAL BOND FUND
The financial highlights table is intended to help you understand the fund 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 by which 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.
| Years ended 3/31 | |||||||||||||||
| Class A | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||
Net asset value, beginning of period | $9.60 | $10.17 | $10.45 | $10.47 | $10.62 | ||||||||||
| Income (loss) from investment operations | |||||||||||||||
| Net investment income (d) | $0.44 | $0.43 | $0.48 | $0.49 | (z) | $0.46 | |||||||||
Net realized and unrealized gain (loss) on investments | 0.72 | (0.50 | ) | (0.28 | ) | (0.01 | )(z) | (0.15 | ) | ||||||
Total from investment operations | $1.16 | $(0.07 | ) | $0.20 | $0.48 | $0.31 | |||||||||
| Less distributions declared to shareholders | |||||||||||||||
| From net investment income | $(0.42 | ) | $(0.44 | ) | $(0.46 | ) | $(0.45 | ) | $(0.46 | ) | |||||
From net realized gain on investments | (0.09 | ) | (0.06 | ) | (0.02 | ) | (0.05 | ) | — | ||||||
Total distributions declared to shareholders | $(0.51 | ) | $(0.50 | ) | $(0.48 | ) | $(0.50 | ) | $(0.46 | ) | |||||
Net asset value, end of period | $10.25 | $9.60 | $10.17 | $10.45 | $10.47 | ||||||||||
Total return (%) (r)(s)(t) | 12.25 | (0.59 | ) | 2.03 | 4.66 | 2.97 | |||||||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
| Expenses before expense reductions (f) | 0.97 | 1.01 | 1.34 | 1.40 | 1.33 | ||||||||||
Expenses after expense reductions (f) | 0.93 | 0.84 | 1.09 | 1.15 | 1.08 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | N/A | 0.80 | 0.82 | 0.86 | 0.87 | ||||||||||
Net investment income | 4.33 | 4.36 | 4.67 | 4.70 | (z) | 4.37 | |||||||||
Portfolio turnover | 27 | 35 | 17 | 9 | 9 | ||||||||||
Net assets at end of period (000 Omitted) | $78,842 | $68,320 | $71,315 | $73,560 | $74,204 | ||||||||||
See Notes to Financial Statements
58
Table of Contents
Financial Highlights – continued
MFS® ALABAMA MUNICIPAL BOND FUND – continued
| Years ended 3/31 | |||||||||||||||
| Class B | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||
Net asset value, beginning of period | $9.60 | $10.17 | $10.45 | $10.47 | $10.62 | ||||||||||
| Income (loss) from investment operations | |||||||||||||||
| Net investment income (d) | $0.36 | $0.36 | $0.40 | $0.41 | (z) | $0.38 | |||||||||
Net realized and unrealized gain (loss) on investments | 0.72 | (0.50 | ) | (0.27 | ) | (0.01 | )(z) | (0.15 | ) | ||||||
Total from investment operations | $1.08 | $(0.14 | ) | $0.13 | $0.40 | $0.23 | |||||||||
| Less distributions declared to shareholders | |||||||||||||||
| From net investment income | $(0.35 | ) | $(0.37 | ) | $(0.39 | ) | $(0.37 | ) | $(0.38 | ) | |||||
From net realized gain on investments | (0.09 | ) | (0.06 | ) | (0.02 | ) | (0.05 | ) | — | ||||||
Total distributions declared to shareholders | $(0.44 | ) | $(0.43 | ) | $(0.41 | ) | $(0.42 | ) | $(0.38 | ) | |||||
Net asset value, end of period | $10.24 | $9.60 | $10.17 | $10.45 | $10.47 | ||||||||||
Total return (%) (r)(s)(t) | 11.31 | (1.34 | ) | 1.27 | 3.88 | 2.20 | |||||||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
| Expenses before expense reductions (f) | 1.72 | 1.76 | 2.09 | 2.15 | 2.08 | ||||||||||
Expenses after expense reductions (f) | 1.68 | 1.58 | 1.84 | 1.90 | 1.83 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | N/A | 1.55 | 1.57 | 1.61 | 1.62 | ||||||||||
Net investment income | 3.60 | 3.62 | 3.92 | 3.93 | (z) | 3.61 | |||||||||
Portfolio turnover | 27 | 35 | 17 | 9 | 9 | ||||||||||
Net assets at end of period (000 Omitted) | $5,477 | $6,884 | $8,555 | $10,421 | $13,443 | ||||||||||
| (d) | Per share data is based on average shares outstanding. |
| (f) | Ratios do not reflect reductions from fees paid indirectly, if applicable. |
| (l) | Interest expense and fees relate to payments made to the holder of the floating rate certificate from trust assets. |
| (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. |
| (t) | Total returns do not include any applicable sales charges. |
| (z) | The fund applied a change in estimate for amortization of premium on certain debt securities that resulted in an increase of $0.02 per share to net investment income, a decrease of $0.02 per share to net realized and unrealized gain (loss) on investments, and an increase of 0.21% to the net investment income ratio for each class for the year ended March 31, 2007. The change in estimate had no impact on net assets, net asset value per share or total return of each class. |
See Notes to Financial Statements
59
Table of Contents
Financial Highlights – continued
MFS® ARKANSAS MUNICIPAL BOND FUND
The financial highlights table is intended to help you understand the fund 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 by which 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.
| Years ended 3/31 | |||||||||||||||
| Class A | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||
Net asset value, beginning of period | $9.43 | $9.80 | $10.08 | $10.04 | $10.17 | ||||||||||
| Income (loss) from investment operations | |||||||||||||||
| Net investment income (d) | $0.42 | $0.43 | $0.46 | $0.50 | (z) | $0.45 | |||||||||
Net realized and unrealized gain (loss) on investments | 0.53 | (0.29 | ) | (0.25 | ) | (0.01 | )(z) | (0.13 | ) | ||||||
Total from investment operations | $0.95 | $0.14 | $0.21 | $0.49 | $0.32 | ||||||||||
| Less distributions declared to shareholders | |||||||||||||||
| From net investment income | $(0.41 | ) | $(0.43 | ) | $(0.47 | ) | $(0.45 | ) | $(0.45 | ) | |||||
From net realized gain on investments | (0.02 | ) | (0.08 | ) | (0.02 | ) | — | — | |||||||
Total distributions declared to shareholders | $(0.43 | ) | $(0.51 | ) | $(0.49 | ) | $(0.45 | ) | $(0.45 | ) | |||||
Net asset value, end of period | $9.95 | $9.43 | $9.80 | $10.08 | $10.04 | ||||||||||
Total return (%) (r)(s)(t) | 10.17 | 1.61 | 2.07 | 5.02 | 3.17 | ||||||||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
| Expenses before expense reductions (f) | 0.84 | 0.83 | 1.06 | 1.14 | 1.10 | ||||||||||
Expenses after expense reductions (f) | 0.74 | 0.66 | 0.81 | 0.89 | 0.85 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | N/A | 0.60 | 0.60 | 0.66 | 0.67 | ||||||||||
Net investment income | 4.32 | 4.48 | 4.60 | 4.98 | (z) | 4.45 | |||||||||
Portfolio turnover | 9 | 23 | 9 | 10 | 10 | ||||||||||
Net assets at end of period (000 Omitted) | $179,094 | $141,100 | $138,938 | $127,477 | $122,067 | ||||||||||
See Notes to Financial Statements
60
Table of Contents
Financial Highlights – continued
MFS® ARKANSAS MUNICIPAL BOND FUND – continued
| Years ended 3/31 | |||||||||||||||
| Class B | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||
Net asset value, beginning of period | $9.44 | $9.81 | $10.09 | $10.05 | $10.18 | ||||||||||
| Income (loss) from investment operations | |||||||||||||||
| Net investment income (d) | $0.35 | $0.35 | $0.38 | $0.43 | (z) | $0.38 | |||||||||
Net realized and unrealized gain (loss) on investments | 0.52 | (0.28 | ) | (0.25 | ) | (0.01 | )(z) | (0.14 | ) | ||||||
Total from investment operations | $0.87 | $0.07 | $0.13 | $0.42 | $0.24 | ||||||||||
| Less distributions declared to shareholders | |||||||||||||||
| From net investment income | $(0.33 | ) | $(0.36 | ) | $(0.39 | ) | $(0.38 | ) | $(0.37 | ) | |||||
From net realized gain on investments | (0.02 | ) | (0.08 | ) | (0.02 | ) | — | — | |||||||
Total distributions declared to shareholders | $(0.35 | ) | $(0.44 | ) | $(0.41 | ) | $(0.38 | ) | $(0.37 | ) | |||||
Net asset value, end of period | $9.96 | $9.44 | $9.81 | $10.09 | $10.05 | ||||||||||
Total return (%) (r)(s)(t) | 9.30 | 0.85 | 1.30 | 4.21 | 2.39 | ||||||||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
| Expenses before expense reductions (f) | 1.59 | 1.59 | 1.81 | 1.91 | 1.87 | ||||||||||
Expenses after expense reductions (f) | 1.52 | 1.42 | 1.56 | 1.66 | 1.62 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | N/A | 1.35 | 1.36 | 1.43 | 1.44 | ||||||||||
Net investment income | 3.53 | 3.71 | 3.86 | 4.21 | (z) | 3.68 | |||||||||
Portfolio turnover | 9 | 23 | 9 | 10 | 10 | ||||||||||
Net assets at end of period (000 Omitted) | $8,129 | $6,111 | $6,727 | $8,992 | $10,648 | ||||||||||
| (d) | Per share data is based on average shares outstanding. |
| (f) | Ratios do not reflect reductions from fees paid indirectly, if applicable. |
| (l) | Interest expense and fees relate to payments made to the holder of the floating rate certificate from trust assets. |
| (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. |
| (t) | Total returns do not include any applicable sales charges. |
| (z) | The fund applied a change in estimate for amortization of premium on certain debt securities that resulted in an increase of $0.03 per share to net investment income, a decrease of $0.03 per share to net realized and unrealized gain (loss) on investments, and an increase of 0.30% to the net investment income ratio for each class for the year ended March 31, 2007. The change in estimate had no impact on net assets, net asset value per share or total return of each class. |
See Notes to Financial Statements
61
Table of Contents
Financial Highlights – continued
MFS® CALIFORNIA MUNICIPAL BOND FUND
The financial highlights table is intended to help you understand the fund 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 by which 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.
| Years ended 3/31 | |||||||||||||||
| Class A | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||
Net asset value, beginning of period | $5.15 | $5.56 | $5.88 | $5.84 | $5.88 | ||||||||||
| Income (loss) from investment operations | |||||||||||||||
| Net investment income (d) | $0.26 | $0.27 | $0.26 | $0.27 | (z) | $0.28 | |||||||||
Net realized and unrealized gain (loss) on investments | 0.41 | (0.42 | ) | (0.32 | ) | 0.03 | (z) | (0.03 | ) | ||||||
Total from investment operations | $0.67 | $(0.15 | ) | $(0.06 | ) | $0.30 | $0.25 | ||||||||
| Less distributions declared to shareholders | |||||||||||||||
| From net investment income | $(0.26 | ) | $(0.26 | ) | $(0.26 | ) | $(0.26 | ) | $(0.28 | ) | |||||
From net realized gain on investments | — | — | — | — | (0.01 | ) | |||||||||
Total distributions declared to shareholders | $(0.26 | ) | $(0.26 | ) | $(0.26 | ) | $(0.26 | ) | $(0.29 | ) | |||||
Net asset value, end of period | $5.56 | $5.15 | $5.56 | $5.88 | $5.84 | ||||||||||
Total return (%) (r)(s)(t) | 13.11 | (2.66 | ) | (1.05 | ) | 5.30 | 4.22 | ||||||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
| Expenses before expense reductions (f) | 0.81 | 0.81 | 0.99 | 1.11 | 1.09 | ||||||||||
Expenses after expense reductions (f) | 0.71 | 0.63 | 0.74 | 0.86 | 0.84 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | N/A | 0.56 | 0.55 | 0.60 | 0.63 | ||||||||||
Net investment income | 4.78 | 5.05 | 4.46 | 4.66 | (z) | 4.69 | |||||||||
Portfolio turnover | 31 | 27 | 30 | 16 | 9 | ||||||||||
Net assets at end of period (000 Omitted) | $324,093 | $291,509 | $339,099 | $366,861 | $291,656 | ||||||||||
| Years ended 3/31 | |||||||||||||||
| Class B | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||
Net asset value, beginning of period | $5.15 | $5.56 | $5.88 | $5.84 | $5.88 | ||||||||||
| Income (loss) from investment operations | |||||||||||||||
| Net investment income (d) | $0.22 | $0.23 | $0.21 | $0.23 | (z) | $0.23 | |||||||||
Net realized and unrealized gain (loss) on investments | 0.41 | (0.42 | ) | (0.31 | ) | 0.03 | (z) | (0.03 | ) | ||||||
Total from investment operations | $0.63 | $(0.19 | ) | $(0.10 | ) | $0.26 | $0.20 | ||||||||
| Less distributions declared to shareholders | |||||||||||||||
| From net investment income | $(0.21 | ) | $(0.22 | ) | $(0.22 | ) | $(0.22 | ) | $(0.23 | ) | |||||
From net realized gain on investments | — | — | — | — | (0.01 | ) | |||||||||
Total distributions declared to shareholders | $(0.21 | ) | $(0.22 | ) | $(0.22 | ) | $(0.22 | ) | $(0.24 | ) | |||||
Net asset value, end of period | $5.57 | $5.15 | $5.56 | $5.88 | $5.84 | ||||||||||
Total return (%) (r)(s)(t) | 12.47 | (3.39 | ) | (1.80 | ) | 4.51 | 3.44 | ||||||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
| Expenses before expense reductions (f) | 1.56 | 1.57 | 1.75 | 1.88 | 1.85 | ||||||||||
Expenses after expense reductions (f) | 1.47 | 1.39 | 1.50 | 1.62 | 1.60 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | N/A | 1.32 | 1.31 | 1.37 | 1.39 | ||||||||||
Net investment income | 4.03 | 4.29 | 3.70 | 3.91 | (z) | 3.94 | |||||||||
Portfolio turnover | 31 | 27 | 30 | 16 | 9 | ||||||||||
Net assets at end of period (000 Omitted) | $13,866 | $19,477 | $31,239 | $47,127 | $58,338 | ||||||||||
See Notes to Financial Statements
62
Table of Contents
Financial Highlights – continued
MFS® CALIFORNIA MUNICIPAL BOND FUND – continued
| Years ended 3/31 | |||||||||||||||
| Class C | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||
Net asset value, beginning of period | $5.16 | $5.58 | $5.90 | $5.86 | $5.90 | ||||||||||
| Income (loss) from investment operations | |||||||||||||||
| Net investment income (d) | $0.21 | $0.22 | $0.20 | $0.22 | (z) | $0.23 | |||||||||
Net realized and unrealized gain (loss) on investments | 0.42 | (0.42 | ) | (0.31 | ) | 0.03 | (z) | (0.04 | ) | ||||||
Total from investment operations | $0.63 | $(0.20 | ) | $(0.11 | ) | $0.25 | $0.19 | ||||||||
| Less distributions declared to shareholders | |||||||||||||||
| From net investment income | $(0.21 | ) | $(0.22 | ) | $(0.21 | ) | $(0.21 | ) | $(0.22 | ) | |||||
From net realized gain on investments | — | — | — | — | (0.01 | ) | |||||||||
Total distributions declared to shareholders | $(0.21 | ) | $(0.22 | ) | $(0.21 | ) | $(0.21 | ) | $(0.23 | ) | |||||
Net asset value, end of period | $5.58 | $5.16 | $5.58 | $5.90 | $5.86 | ||||||||||
Total return (%) (r)(s)(t) | 12.27 | (3.70 | ) | (1.93 | ) | 4.36 | 3.29 | ||||||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
| Expenses before expense reductions (f) | 1.60 | 1.70 | 1.89 | 2.01 | 1.99 | ||||||||||
Expenses after expense reductions (f) | 1.60 | 1.53 | 1.64 | 1.76 | 1.74 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | N/A | 1.46 | 1.45 | 1.50 | 1.53 | ||||||||||
Net investment income | 3.85 | 4.14 | 3.55 | 3.77 | (z) | 3.79 | |||||||||
Portfolio turnover | 31 | 27 | 30 | 16 | 9 | ||||||||||
Net assets at end of period (000 Omitted) | $37,810 | $29,480 | $27,862 | $30,492 | $29,880 | ||||||||||
| (d) | Per share data is based on average shares outstanding. |
| (f) | Ratios do not reflect reductions from fees paid indirectly, if applicable. |
| (l) | Interest expense and fees relate to payments made to the holder of the floating rate certificate from trust assets. |
| (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. |
| (t) | Total returns do not include any applicable sales charges. |
| (z) | The fund applied a change in estimate for amortization of premium on certain debt securities in the current year that resulted in an increase of less than $0.01 per share to net investment income, a decrease of less than $0.01 per share to net realized and unrealized gain (loss) on investments, and an increase of 0.06% to the net investment income ratio for each class for the year ended March 31, 2007. The change in estimate had no impact on net assets, net asset value per share or total return of each class. |
See Notes to Financial Statements
63
Table of Contents
Financial Highlights – continued
MFS® FLORIDA MUNICIPAL BOND FUND
The financial highlights table is intended to help you understand the fund 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 by which 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.
| Years ended 3/31 | |||||||||||||||
| Class A | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||
Net asset value, beginning of period | $8.91 | $9.64 | $10.09 | $10.05 | $10.09 | ||||||||||
| Income (loss) from investment operations | |||||||||||||||
| Net investment income (d) | $0.44 | $0.44 | $0.46 | $0.46 | (z) | $0.45 | |||||||||
Net realized and unrealized gain (loss) on investments | 0.66 | (0.71 | ) | (0.47 | ) | 0.02 | (z) | (0.04 | ) | ||||||
Total from investment operations | $1.10 | $(0.27 | ) | $(0.01 | ) | $0.48 | $0.41 | ||||||||
| Less distributions declared to shareholders | |||||||||||||||
| From net investment income | $(0.43 | ) | $(0.44 | ) | $(0.44 | ) | $(0.44 | ) | $(0.45 | ) | |||||
From net realized gain on investments | — | (0.02 | ) | — | — | — | |||||||||
Total distributions declared to shareholders | $(0.43 | ) | $(0.46 | ) | $(0.44 | ) | $(0.44 | ) | $(0.45 | ) | |||||
Net asset value, end of period | $9.58 | $8.91 | $9.64 | $10.09 | $10.05 | ||||||||||
Total return (%) (r)(s)(t) | 12.58 | (2.84 | ) | (0.08 | ) | 4.92 | 4.14 | ||||||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
| Expenses before expense reductions (f) | 1.00 | 0.80 | 1.16 | 1.19 | 1.11 | ||||||||||
Expenses after expense reductions (f) | 0.83 | 0.63 | 0.91 | 0.94 | 0.86 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | N/A | N/A | 0.61 | 0.64 | 0.64 | ||||||||||
Net investment income | 4.67 | 4.82 | 4.60 | 4.53 | (z) | 4.46 | |||||||||
Portfolio turnover | 5 | 34 | 7 | 9 | 17 | ||||||||||
Net assets at end of period (000 Omitted) | $46,440 | $43,401 | $51,504 | $63,590 | $70,402 | ||||||||||
See Notes to Financial Statements
64
Table of Contents
Financial Highlights – continued
MFS® FLORIDA MUNICIPAL BOND FUND – continued
| Years ended 3/31 | |||||||||||||||
| Class B | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||
Net asset value, beginning of period | $8.92 | $9.65 | $10.09 | $10.05 | $10.09 | ||||||||||
| Income (loss) from investment operations | |||||||||||||||
| Net investment income (d) | $0.37 | $0.37 | $0.38 | $0.38 | (z) | $0.38 | |||||||||
Net realized and unrealized gain (loss) on investments | 0.65 | (0.71 | ) | (0.45 | ) | 0.03 | (z) | (0.04 | ) | ||||||
Total from investment operations | $1.02 | $(0.34 | ) | $(0.07 | ) | $0.41 | $0.34 | ||||||||
| Less distributions declared to shareholders | |||||||||||||||
| From net investment income | $(0.36 | ) | $(0.37 | ) | $(0.37 | ) | $(0.37 | ) | $(0.38 | ) | |||||
From net realized gain on investments | — | (0.02 | ) | — | — | — | |||||||||
Total distributions declared to shareholders | $(0.36 | ) | $(0.39 | ) | $(0.37 | ) | $(0.37 | ) | $(0.38 | ) | |||||
Net asset value, end of period | $9.58 | $8.92 | $9.65 | $10.09 | $10.05 | ||||||||||
Total return (%) (r)(s)(t) | 11.60 | (3.59 | ) | (0.73 | ) | 4.12 | 3.35 | ||||||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
| Expenses before expense reductions (f) | 1.75 | 1.57 | 1.92 | 1.96 | 1.87 | ||||||||||
Expenses after expense reductions (f) | 1.60 | 1.39 | 1.67 | 1.71 | 1.62 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | N/A | N/A | 1.37 | 1.40 | 1.40 | ||||||||||
Net investment income | 3.90 | 4.03 | 3.85 | 3.77 | (z) | 3.70 | |||||||||
Portfolio turnover | 5 | 34 | 7 | 9 | 17 | ||||||||||
Net assets at end of period (000 Omitted) | $4,124 | $4,981 | $7,497 | $10,906 | $14,970 | ||||||||||
| (d) | Per share data is based on average shares outstanding. |
| (f) | Ratios do not reflect reductions from fees paid indirectly, if applicable. |
| (l) | Interest expense and fees relate to payments made to the holder of the floating rate certificate from trust assets. |
| (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. |
| (t) | Total returns do not include any applicable sales charges. |
| (z) | The fund applied a change in estimate for amortization of premium on certain debt securities that resulted in an increase of $0.01 per share to net investment income, a decrease of $0.01 per share to net realized and unrealized gain (loss) on investments, and an increase of 0.06% to the net investment income ratio for each class for the year ended March 31, 2007. The change in estimate had no impact on net assets, net asset value per share or total return of each class. |
See Notes to Financial Statements
65
Table of Contents
Financial Highlights – continued
MFS® GEORGIA MUNICIPAL BOND FUND
The financial highlights table is intended to help you understand the fund 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 by which 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.
| Years ended 3/31 | |||||||||||||||
| Class A | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||
Net asset value, beginning of period | $9.99 | $10.64 | $10.83 | $10.80 | $10.99 | ||||||||||
| Income (loss) from investment operations | |||||||||||||||
| Net investment income (d) | $0.45 | $0.47 | $0.46 | $0.47 | (z) | $0.46 | |||||||||
Net realized and unrealized gain (loss) on investments | 0.62 | (0.48 | ) | (0.20 | ) | 0.01 | (z) | (0.18 | ) | ||||||
Total from investment operations | $1.07 | $(0.01 | ) | $0.26 | $0.48 | $0.28 | |||||||||
| Less distributions declared to shareholders | |||||||||||||||
| From net investment income | $(0.44 | ) | $(0.44 | ) | $(0.45 | ) | $(0.45 | ) | $(0.47 | ) | |||||
From net realized gain on investments | (0.03 | ) | (0.20 | ) | — | — | — | ||||||||
Total distributions declared to shareholders | $(0.47 | ) | $(0.64 | ) | $(0.45 | ) | $(0.45 | ) | $(0.47 | ) | |||||
Net asset value, end of period | $10.59 | $9.99 | $10.64 | $10.83 | $10.80 | ||||||||||
Total return (%) (r)(s)(t) | 10.84 | 0.04 | 2.43 | 4.55 | 2.53 | ||||||||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
| Expenses before expense reductions (f) | 1.03 | 1.06 | 1.41 | 1.47 | 1.39 | ||||||||||
Expenses after expense reductions (f) | 1.00 | 0.89 | 1.16 | 1.22 | 1.14 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | N/A | 0.87 | 0.88 | 0.93 | 0.93 | ||||||||||
Net investment income | 4.26 | 4.55 | 4.29 | 4.37 | (z) | 4.22 | |||||||||
Portfolio turnover | 16 | 26 | 26 | 6 | 5 | ||||||||||
Net assets at end of period (000 Omitted) | $63,964 | $53,156 | $49,477 | $51,015 | $51,681 | ||||||||||
See Notes to Financial Statements
66
Table of Contents
Financial Highlights – continued
MFS® GEORGIA MUNICIPAL BOND FUND – continued
| Years ended 3/31 | |||||||||||||||
| Class B | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||
Net asset value, beginning of period | $10.02 | $10.68 | $10.87 | $10.84 | $11.00 | ||||||||||
| Income (loss) from investment operations | |||||||||||||||
| Net investment income (d) | $0.37 | $0.39 | $0.38 | $0.40 | (z) | $0.41 | |||||||||
Net realized and unrealized gain (loss) on investments | 0.63 | (0.49 | ) | (0.20 | ) | 0.00 | (w)(z) | (0.18 | ) | ||||||
Total from investment operations | $1.00 | $(0.10 | ) | $0.18 | $0.40 | $0.23 | |||||||||
| Less distributions declared to shareholders | |||||||||||||||
| From net investment income | $(0.36 | ) | $(0.36 | ) | $(0.37 | ) | $(0.37 | ) | $(0.39 | ) | |||||
From net realized gain on investments | (0.03 | ) | (0.20 | ) | — | — | — | ||||||||
Total distributions declared to shareholders | $(0.39 | ) | $(0.56 | ) | $(0.37 | ) | $(0.37 | ) | $(0.39 | ) | |||||
Net asset value, end of period | $10.63 | $10.02 | $10.68 | $10.87 | $10.84 | ||||||||||
Total return (%) (r)(s)(t) | 10.08 | (0.79 | ) | 1.67 | 3.77 | 2.05 | |||||||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
| Expenses before expense reductions (f) | 1.78 | 1.80 | 2.16 | 2.22 | 2.14 | ||||||||||
Expenses after expense reductions (f) | 1.75 | 1.62 | 1.91 | 1.97 | 1.89 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | N/A | 1.61 | 1.63 | 1.68 | 1.68 | ||||||||||
Net investment income | 3.51 | 3.78 | 3.54 | 3.63 | (z) | 3.72 | |||||||||
Portfolio turnover | 16 | 26 | 26 | 6 | 5 | ||||||||||
Net assets at end of period (000 Omitted) | $3,212 | $4,344 | $6,780 | $8,175 | $9,816 | ||||||||||
| (d) | Per share data is based on average shares outstanding. |
| (f) | Ratios do not reflect reductions from fees paid indirectly, if applicable. |
| (l) | Interest expense and fees relate to payments made to the holder of the floating rate certificate from trust assets. |
| (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. |
| (t) | Total returns do not include any applicable sales charges. |
| (w) | Per share amount was less than $0.01. |
| (z) | The fund applied a change in estimate for amortization of premium on certain debt securities that resulted in an increase of $0.01 per share to net investment income, a decrease of $0.01 per share to net realized and unrealized gain (loss) on investments, and an increase of 0.12% to the net investment income ratio for each class for the year ended March 31, 2007. The change in estimate had no impact on net assets, net asset value per share or total return of each class. |
See Notes to Financial Statements
67
Table of Contents
Financial Highlights – continued
MFS® MARYLAND MUNICIPAL BOND FUND
The financial highlights table is intended to help you understand the fund 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 by which 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.
| Years ended 3/31 | |||||||||||||||
| Class A | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||
Net asset value, beginning of period | $10.15 | $10.83 | $11.30 | $11.27 | $11.49 | ||||||||||
| Income (loss) from investment operations | |||||||||||||||
| Net investment income (d) | $0.48 | $0.48 | $0.50 | $0.50 | (z) | $0.50 | |||||||||
Net realized and unrealized gain (loss) on investments | 0.77 | (0.65 | ) | (0.48 | ) | 0.04 | (z) | (0.15 | ) | ||||||
Total from investment operations | $1.25 | $(0.17 | ) | $0.02 | $0.54 | $0.35 | |||||||||
| Less distributions declared to shareholders | |||||||||||||||
| From net investment income | $(0.47 | ) | $(0.47 | ) | $(0.47 | ) | $(0.48 | ) | $(0.50 | ) | |||||
From net realized gain on investments | (0.00 | )(w) | (0.04 | ) | (0.02 | ) | (0.03 | ) | (0.07 | ) | |||||
Total distributions declared to shareholders | $(0.47 | ) | $(0.51 | ) | $(0.49 | ) | $(0.51 | ) | $(0.57 | ) | |||||
Net asset value, end of period | $10.93 | $10.15 | $10.83 | $11.30 | $11.27 | ||||||||||
Total return (%) (r)(s)(t) | 12.49 | (1.57 | ) | 0.15 | 4.88 | 3.06 | |||||||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
| Expenses before expense reductions (f) | 0.95 | 1.11 | 1.26 | 1.29 | 1.19 | ||||||||||
Expenses after expense reductions (f) | 0.95 | 0.94 | 1.01 | 1.04 | 0.94 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | N/A | 0.89 | 0.88 | 0.91 | 0.94 | ||||||||||
Net investment income | 4.47 | 4.67 | 4.46 | 4.48 | (z) | 4.38 | |||||||||
Portfolio turnover | 24 | 24 | 7 | 16 | 9 | ||||||||||
Net assets at end of period (000 Omitted) | $107,182 | $93,075 | $103,894 | $117,598 | $115,307 | ||||||||||
See Notes to Financial Statements
68
Table of Contents
Financial Highlights – continued
MFS® MARYLAND MUNICIPAL BOND FUND – continued
| Years ended 3/31 | |||||||||||||||
| Class B | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||
Net asset value, beginning of period | $10.14 | $10.83 | $11.29 | $11.26 | $11.49 | ||||||||||
| Income (loss) from investment operations | |||||||||||||||
| Net investment income (d) | $0.40 | $0.42 | $0.42 | $0.43 | (z) | $0.43 | |||||||||
Net realized and unrealized gain (loss) on investments | 0.78 | (0.67 | ) | (0.46 | ) | 0.03 | (z) | (0.17 | ) | ||||||
Total from investment operations | $1.18 | $(0.25 | ) | $(0.04 | ) | $0.46 | $0.26 | ||||||||
| Less distributions declared to shareholders | |||||||||||||||
| From net investment income | $(0.39 | ) | $(0.40 | ) | $(0.40 | ) | $(0.40 | ) | $(0.42 | ) | |||||
From net realized gain on investments | (0.00 | )(w) | (0.04 | ) | (0.02 | ) | (0.03 | ) | (0.07 | ) | |||||
Total distributions declared to shareholders | $(0.39 | ) | $(0.44 | ) | $(0.42 | ) | $(0.43 | ) | $(0.49 | ) | |||||
Net asset value, end of period | $10.93 | $10.14 | $10.83 | $11.29 | $11.26 | ||||||||||
Total return (%) (r)(s)(t) | 11.77 | (2.31 | ) | (0.41 | ) | 4.21 | 2.30 | ||||||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
| Expenses before expense reductions (f) | 1.70 | 1.77 | 1.91 | 1.95 | 1.84 | ||||||||||
Expenses after expense reductions (f) | 1.70 | 1.59 | 1.66 | 1.70 | 1.59 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | N/A | 1.55 | 1.53 | 1.56 | 1.59 | ||||||||||
Net investment income | 3.75 | 4.01 | 3.81 | 3.83 | (z) | 3.72 | |||||||||
Portfolio turnover | 24 | 24 | 7 | 16 | 9 | ||||||||||
Net assets at end of period (000 Omitted) | $6,251 | $8,385 | $12,153 | $16,515 | $21,011 | ||||||||||
| (d) | Per share data is based on average shares outstanding. |
| (f) | Ratios do not reflect reductions from fees paid indirectly, if applicable. |
| (l) | Interest expense and fees relate to payments made to the holder of the floating rate certificate from trust assets. |
| (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. |
| (t) | Total returns do not include any applicable sales charges. |
| (w) | Per share amount was less than $0.01. |
| (z) | The fund applied a change in estimate for amortization of premium on certain debt securities that resulted in an increase of $0.01 per share to net investment income, a decrease of $0.01 per share to net realized and unrealized gain (loss) on investments, and an increase of 0.12% to the net investment income ratio for each class for the year ended March 31, 2007. The change in estimate had no impact on net assets, net asset value per share or total return of each class. |
See Notes to Financial Statements
69
Table of Contents
Financial Highlights – continued
MFS® MASSACHUSETTS MUNICIPAL BOND FUND
The financial highlights table is intended to help you understand the fund 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 by which 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.
| Years ended 3/31 | |||||||||||||||
| Class A | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||
Net asset value, beginning of period | $10.35 | $10.91 | $11.25 | $11.22 | $11.31 | ||||||||||
| Income (loss) from investment operations | |||||||||||||||
| Net investment income (d) | $0.48 | $0.49 | $0.44 | $0.51 | (z) | $0.48 | |||||||||
Net realized and unrealized gain (loss) on investments | 0.77 | (0.52 | ) | (0.26 | ) | 0.02 | (z) | (0.05 | ) | ||||||
Total from investment operations | $1.25 | $(0.03 | ) | $0.18 | $0.53 | $0.43 | |||||||||
| Less distributions declared to shareholders | |||||||||||||||
| From net investment income | $(0.47 | ) | $(0.48 | ) | $(0.47 | ) | $(0.47 | ) | $(0.48 | ) | |||||
From net realized gain on investments | (0.06 | ) | (0.05 | ) | (0.05 | ) | (0.03 | ) | (0.04 | ) | |||||
Total distributions declared to shareholders | $(0.53 | ) | $(0.53 | ) | $(0.52 | ) | $(0.50 | ) | $(0.52 | ) | |||||
Net asset value, end of period | $11.07 | $10.35 | $10.91 | $11.25 | $11.22 | ||||||||||
Total return (%) (r)(s)(t) | 12.31 | (0.21 | ) | 1.69 | 4.80 | 3.83 | |||||||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
| Expenses before expense reductions (f) | 0.87 | 1.04 | 1.35 | 1.39 | 1.34 | ||||||||||
Expenses after expense reductions (f) | 0.87 | 0.87 | 1.10 | 1.14 | 1.09 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | N/A | 0.83 | 0.82 | 0.87 | 0.90 | ||||||||||
Net investment income | 4.44 | 4.69 | 4.00 | 4.57 | (z) | 4.23 | |||||||||
Portfolio turnover | 21 | 40 | 20 | 5 | 10 | ||||||||||
Net assets at end of period (000 Omitted) | $236,724 | $185,105 | $189,804 | $189,049 | $196,992 | ||||||||||
See Notes to Financial Statements
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Financial Highlights – continued
MFS® MASSACHUSETTS MUNICIPAL BOND FUND – continued
| Years ended 3/31 | |||||||||||||||
| Class B | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||
Net asset value, beginning of period | $10.37 | $10.93 | $11.27 | $11.24 | $11.33 | ||||||||||
| Income (loss) from investment operations | |||||||||||||||
| Net investment income (d) | $0.40 | $0.42 | $0.37 | $0.44 | (z) | $0.41 | |||||||||
Net realized and unrealized gain (loss) on investments | 0.77 | (0.52 | ) | (0.26 | ) | 0.02 | (z) | (0.05 | ) | ||||||
Total from investment operations | $1.17 | $(0.10 | ) | $0.11 | $0.46 | $0.36 | |||||||||
| Less distributions declared to shareholders | |||||||||||||||
| From net investment income | $(0.39 | ) | $(0.41 | ) | $(0.40 | ) | $(0.40 | ) | $(0.41 | ) | |||||
From net realized gain on investments | (0.06 | ) | (0.05 | ) | (0.05 | ) | (0.03 | ) | (0.04 | ) | |||||
Total distributions declared to shareholders | $(0.45 | ) | $(0.46 | ) | $(0.45 | ) | $(0.43 | ) | $(0.45 | ) | |||||
Net asset value, end of period | $11.09 | $10.37 | $10.93 | $11.27 | $11.24 | ||||||||||
Total return (%) (r)(s)(t) | 11.45 | (0.86 | ) | 1.04 | 4.12 | 3.16 | |||||||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
| Expenses before expense reductions (f) | 1.62 | 1.70 | 2.00 | 2.04 | 1.99 | ||||||||||
Expenses after expense reductions (f) | 1.62 | 1.53 | 1.75 | 1.79 | 1.74 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | N/A | 1.48 | 1.48 | 1.52 | 1.55 | ||||||||||
Net investment income | 3.70 | 4.01 | 3.35 | 3.92 | (z) | 3.58 | |||||||||
Portfolio turnover | 21 | 40 | 20 | 5 | 10 | ||||||||||
Net assets at end of period (000 Omitted) | $13,804 | $17,166 | $24,353 | $31,415 | $36,924 | ||||||||||
| (d) | Per share data is based on average shares outstanding. |
| (f) | Ratios do not reflect reductions from fees paid indirectly, if applicable. |
| (l) | Interest expense and fees relate to payments made to the holder of the floating rate certificate from trust assets. |
| (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. |
| (t) | Total returns do not include any applicable sales charges. |
| (z) | The fund applied a change in estimate for amortization of premium on certain debt securities that resulted in an increase of $0.02 per share to net investment income, a decrease of $0.02 per share to net realized and unrealized gain (loss) on investments, and an increase of 0.20% to the net investment income ratio for each class for the year ended March 31, 2007. The change in estimate had no impact on net assets, net asset value per share or total return of each class. |
See Notes to Financial Statements
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| (1) | Business and Organization |
MFS Alabama Municipal Bond Fund (Alabama fund), MFS Arkansas Municipal Bond Fund (Arkansas Fund), MFS California Municipal Bond Fund (California Fund), MFS Florida Municipal Bond Fund (Florida Fund), MFS Georgia Municipal Bond Fund (Georgia Fund), MFS Maryland Municipal Bond Fund (Maryland Fund), and MFS Massachusetts Municipal Bond Fund (Massachusetts Fund) are each a series of MFS Municipal Series Trust which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.
| (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 revenues and expenses 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 each fund’s Statement of Assets and Liabilities through the date that the financial statements were issued. The value of municipal instruments can be affected by changes in their actual or perceived credit quality. The credit quality of municipal instruments can be affected by, among other things, the financial condition of the issuer or guarantor, the issuer’s future borrowing plans and sources of revenue, the economic feasibility of the revenue bond project or general borrowing purpose, political or economic developments in the region or state where the instrument is issued and the liquidity of the security. Municipal instruments generally trade in the over-the-counter market. Municipal instruments backed by current and anticipated revenues from a specific project or specific assets can be negatively affected by the discontinuance of the taxation supporting the projects or assets or the inability to collect revenues for the project or from the assets. If the Internal Revenue Service determines an issuer of a municipal instrument has not complied with the applicable tax requirements, the security could decline in value, interest from the security could become taxable and the funds may be required to issue Forms 1099-DIV.
Investment Valuations – Debt instruments and floating rate loans (other than short-term instruments), 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 generally are valued at amortized cost, which approximates market value. Futures contracts are generally valued at last posted settlement price as provided by a third-party pricing service on the market on which they are primarily traded. Futures contracts for which there were no trades that day for a particular position are generally valued at the closing bid quotation as provided by a third-party pricing service on the market on which such futures contracts are primarily traded. Open-end investment companies are generally valued at net asset value per share. 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. Values obtained from third-party pricing services can utilize both transaction data and market information such as yield, quality, coupon rate, maturity, type of issue, trading characteristics, and other market data.
The Board of Trustees has delegated primary responsibility for determining or causing to be determined the value of each fund’s investments (including any fair valuation) to the adviser pursuant to valuation policies and procedures approved by the Board. If the adviser determines that reliable market quotations are not readily available, investments are valued at fair value as determined in good faith by the adviser in accordance with such procedures under the oversight of the Board of Trustees. Under each fund’s valuation policies and procedures, market quotations are not considered to be readily available for most types of debt instruments and floating rate loans and many types of derivatives. These investments are generally valued at fair value based on information from third-party pricing services. In addition, investments may be valued at fair value if the adviser determines that an 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 each fund’s net asset value, or after the halting 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. 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 each 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 each fund’s net asset value may differ from quoted or published prices for the same investment. There can be no assurance that each fund could obtain the fair value assigned to an investment if it were to sell the investment at the same time at which each fund determines its net asset value per share.
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Notes to Financial Statements – continued
Various inputs are used in determining the value of each 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. Each 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 unobservable inputs, which may include the adviser’s own assumptions in determining the fair value of investments. Other financial instruments are derivative instruments not reflected in total investments, such as futures, forwards, swap contracts, and written options. The following is a summary of the levels used as of March 31, 2010 in valuing each fund’s assets or liabilities:
| Level 1 | Level 2 | Level 3 | Total | |||||
| Alabama Fund | ||||||||
| Investments at Value | ||||||||
| Municipal Bonds | $— | $82,355,874 | $— | $82,355,874 | ||||
| Mutual Funds | 583,601 | — | — | 583,601 | ||||
| Total Investments | $583,601 | $82,355,874 | $— | $82,939,475 | ||||
| Other Financial Instruments | ||||||||
| Futures | $4,698 | $— | $— | $4,698 | ||||
| Arkansas Fund | ||||||||
| Investments at Value | ||||||||
| Municipal Bonds | $— | $182,190,200 | $— | $182,190,200 | ||||
| Mutual Funds | 5,133,873 | — | — | 5,133,873 | ||||
| Total Investments | $5,133,873 | $182,190,200 | $— | $187,324,073 | ||||
| Other Financial Instruments | ||||||||
| Futures | $6,940 | $— | $— | $6,940 | ||||
| California Fund | ||||||||
| Investments at Value | ||||||||
| Municipal Bonds | $— | $368,767,959 | $— | $368,767,959 | ||||
| Mutual Funds | 5,620,967 | — | — | 5,620,967 | ||||
| Total Investments | $5,620,967 | $368,767,959 | $— | $374,388,926 | ||||
| Other Financial Instruments | ||||||||
| Futures | $23,498 | $— | $— | $23,498 | ||||
| Florida Fund | ||||||||
| Investments at Value | ||||||||
| Municipal Bonds | $— | $48,945,756 | $— | $48,945,756 | ||||
| Mutual Funds | 686,491 | — | — | 686,491 | ||||
| Total Investments | $686,491 | $48,945,756 | $— | $49,632,247 | ||||
| Other Financial Instruments | ||||||||
| Futures | $2,951 | $— | $— | $2,951 | ||||
| Georgia Fund | ||||||||
| Investments at Value | ||||||||
| Municipal Bonds | $— | $65,337,610 | $— | $65,337,610 | ||||
| Mutual Funds | 1,465,795 | — | — | 1,465,795 | ||||
| Total Investments | $1,465,795 | $65,337,610 | $— | $66,803,405 | ||||
| Other Financial Instruments | ||||||||
| Futures | $3,540 | $— | $— | $3,540 | ||||
| Maryland Fund | ||||||||
| Investments at Value | ||||||||
| Municipal Bonds | $— | $110,525,059 | $— | $110,525,059 | ||||
| Mutual Funds | 1,201,518 | — | — | 1,201,518 | ||||
| Total Investments | $1,201,518 | $110,525,059 | $— | $111,726,577 | ||||
| Other Financial Instruments | ||||||||
| Futures | $6,310 | $— | $— | $6,310 | ||||
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Notes to Financial Statements – continued
| Level 1 | Level 2 | Level 3 | Total | |||||
| Massachusetts Fund | ||||||||
| Investments at Value | ||||||||
| Municipal Bonds | $— | $246,278,679 | $— | $246,278,679 | ||||
| Mutual Funds | 144,713 | — | — | 144,713 | ||||
| Total Investments | $144,713 | $246,278,679 | $— | $246,423,392 | ||||
| Other Financial Instruments | ||||||||
| Futures | $15,891 | $— | $— | $15,891 | ||||
For further information regarding security characteristics, see the Portfolios of Investments.
Derivatives – Each fund may use derivatives for different purposes, including to earn income and enhance returns, to increase or decrease exposure to a particular market, to manage or adjust the risk profile of the fund, or as alternatives to direct investments. Derivatives may be used for hedging or non-hedging purposes. While hedging can reduce or eliminate losses, it can also reduce or eliminate gains. When each 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.
In this reporting period each fund adopted the disclosure provisions of FASB Accounting Standard Codification 815, Derivatives and Hedging (“ASC 815”). ASC 815 requires enhanced disclosures about each fund’s use of and accounting for derivative instruments and the effect of derivative instruments on each fund’s results of operations and financial position. Tabular disclosure regarding derivative fair value and gain/loss by contract type (e.g., interest rate contracts, foreign exchange contracts, credit contracts, etc.) is required and derivatives accounted for as hedging instruments under ASC 815 must be disclosed separately from those that do not qualify for hedge accounting. Even though each fund may use derivatives in an attempt to achieve an economic hedge, each fund’s derivatives are not accounted for as hedging instruments under ASC 815 because investment companies account for their derivatives at fair value and record any changes in fair value in current period earnings.
Derivative instruments include written options, purchased options, futures contracts, forward foreign currency exchange contracts, and swap agreements. Each 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 each fund at March 31, 2010:
| Fair Value (a) | ||||||
| Fund | Risk | Derivative | Asset Derivatives | |||
| Alabama Fund | Interest Rate Contracts | Interest Rate Futures | $4,698 | |||
| Arkansas Fund | Interest Rate Contracts | Interest Rate Futures | 6,940 | |||
| California Fund | Interest Rate Contracts | Interest Rate Futures | 23,498 | |||
| Florida Fund | Interest Rate Contracts | Interest Rate Futures | 2,951 | |||
| Georgia Fund | Interest Rate Contracts | Interest Rate Futures | 3,540 | |||
| Maryland Fund | Interest Rate Contracts | Interest Rate Futures | 6,310 | |||
| Massachusetts Fund | Interest Rate Contracts | Interest Rate Futures | 15,891 |
| (a) | The value of futures contracts outstanding includes cumulative appreciation/depreciation as reported in each fund’s Portfolio of Investments. Only the current day variation margin for futures contracts is separately reported within each fund’s Statement of Assets and Liabilities. |
The following table presents, by major type of derivative contract, the realized gain (loss) on derivatives held by each fund for the year ended March 31, 2010 as reported in the Statements of Operations:
Fund | Risk | Futures Contracts | ||
| Alabama Fund | Interest Rate Contracts | $44,302 | ||
| Arkansas Fund | Interest Rate Contracts | 63,388 | ||
| California Fund | Interest Rate Contracts | 228,921 | ||
| Florida Fund | Interest Rate Contracts | 25,018 | ||
| Georgia Fund | Interest Rate Contracts | 45,471 | ||
| Maryland Fund | Interest Rate Contracts | 51,643 | ||
| Massachusetts Fund | Interest Rate Contracts | 157,908 |
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Notes to Financial Statements – continued
The following table presents, by major type of derivative contract, the change in unrealized appreciation (depreciation) on derivatives held by each fund for the year ended March 31, 2010 as reported in the Statements of Operations:
| Fund | Risk | Futures Contracts | ||
| Alabama Fund | Interest Rate Contracts | $4,698 | ||
| Arkansas Fund | Interest Rate Contracts | 39,893 | ||
| California Fund | Interest Rate Contracts | 191,257 | ||
| Florida Fund | Interest Rate Contracts | 20,925 | ||
| Georgia Fund | Interest Rate Contracts | 21,514 | ||
| Maryland Fund | Interest Rate Contracts | 42,259 | ||
| Massachusetts Fund | Interest Rate Contracts | 96,775 |
Derivative counterparty credit risk is managed through formal evaluation of the creditworthiness of all potential counterparties. On certain over-the-counter derivatives, each fund attempts to reduce its exposure to counterparty credit risk whenever possible by entering into an International Swaps and Derivatives Association (ISDA) Master Agreement on a bilateral basis with each of the counterparties with whom it undertakes a significant volume of transactions. The ISDA Master Agreement gives each party to the agreement the right to terminate all transactions traded under such agreement if there is a certain deterioration in the credit quality of the other party. The ISDA Master Agreement gives each fund the right, upon an event of default by the applicable counterparty or a termination of the agreement, 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 ISDA Master Agreement could result in a reduction of each fund’s credit risk to such counterparty equal to any amounts payable by each fund under the applicable transactions, if any. However, absent an event of default by the counterparty or a termination of the agreement, the ISDA Master Agreement does not result in an offset of reported balance sheet assets and liabilities across transactions between each fund and the applicable counterparty.
Collateral requirements differ by type of derivative. Collateral or margin requirements are set by the broker or exchange clearing house for exchange traded derivatives (i.e., futures and exchange-traded options) while collateral terms are contract specific for over-the-counter traded derivatives (i.e., forwards, swaps and over-the-counter options). For derivatives traded under an ISDA Master Agreement, the collateral requirements are netted across all transactions traded under such agreement and one amount is posted from one party to the other to collateralize such obligations. Cash collateral that has been pledged to cover obligations of each fund under derivative contracts will be reported separately on the Statements of Assets and Liabilities as restricted cash. Securities collateral pledged for the same purpose is noted in the Portfolios of Investments.
Futures Contracts – Each fund may use futures contracts to gain or to hedge against broad market, interest rate or currency exposure. 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, each fund is required to deposit with the broker, either in cash or securities, an initial margin in an amount equal to a certain percentage of the notional amount of the contract. Subsequent payments (variation margin) are made or received by each 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 each fund until the contract is closed or expires at which point the gain or loss on futures is realized.
Each fund bears the risk of interest rates, exchange rates or securities prices moving unexpectedly, in which case, each fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. While futures may present less counterparty risk to each 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. Each fund’s maximum risk of loss due to counterparty credit risk is equal to the margin posted by each fund to the broker plus any gains or minus any losses on the outstanding futures contracts.
Indemnifications – Under each 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 each fund. Additionally, in the normal course of business, each fund enters into agreements with service providers that may contain indemnification clauses. Each fund’s maximum exposure under these agreements is unknown as this would involve future claims that may be made against each fund that have not yet occurred.
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
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Notes to Financial Statements – continued
U.S. generally accepted accounting principles. Dividends received in cash are recorded on the ex-dividend date. Dividend and interest payments received in additional securities are recorded on the ex-dividend or ex-interest date in an amount equal to the value of the security on such date. Each fund may receive proceeds from litigation settlements. Any proceeds received from litigation involving portfolio holdings are reflected in the Statements 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 Statements of Operations.
Legal fees and other related expenses incurred to preserve and protect the value of a security owned are added to the cost of the security; other legal fees are expensed. Capital infusions made directly to the security issuer, which are generally non-recurring, incurred to protect or enhance the value of high-yield debt securities, are reported as additions to the cost basis of the security. Costs that are incurred to negotiate the terms or conditions of capital infusions or that are expected to result in a plan of reorganization are reported as realized losses. Ongoing costs incurred to protect or enhance an investment, or costs incurred to pursue other claims or legal actions, are expensed.
Fees Paid Indirectly – Each fund’s custody fee may be reduced according to an arrangement that measures the value of cash deposited with the custodian by each fund. This amount, for the year ended March 31, 2010, is shown as a reduction of total expenses on the Statements of Operations.
Tax Matters and Distributions – Each 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 and tax-exempt income, including realized capital gains. As a result, no provision for federal income tax is required. Each fund’s federal tax return for the prior three fiscal years remains subject to examination by the Internal Revenue Service.
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. Distributions in excess of net investment income or net realized gains are temporary overdistributions for financial statement purposes resulting from differences in the recognition or classification of income or distributions for financial statement and tax purposes.
Book/tax differences primarily relate to amortization and accretion of debt securities, defaulted bonds, treating a portion of the proceeds from redemptions as a distribution for tax purposes, and secured borrowings.
The tax character of distributions declared to shareholders for the last two fiscal years is as follows:
| Year ended 3/31/10 | Alabama Fund | Arkansas Fund | California Fund | Florida Fund | Georgia Fund | Maryland Fund | Massachusetts Fund | |||||||
| Ordinary income (including any short-term capital gains) | $705,054 | $265,035 | $— | $— | $1,221 | $45 | $545,751 | |||||||
| Tax-exempt income | 3,345,125 | 6,949,478 | 16,635,846 | 2,275,569 | 2,630,751 | 4,685,612 | 9,840,253 | |||||||
| Long-term capital gain | — | 83,384 | — | — | 167,706 | 5,690 | 744,813 | |||||||
| Total distributions | $4,050,179 | $7,297,897 | $16,635,846 | $2,275,569 | $2,799,678 | $4,691,347 | $11,130,817 | |||||||
| Year ended 3/31/09 | Alabama Fund | Arkansas Fund | California Fund | Florida Fund | Georgia Fund | Maryland Fund | Massachusetts Fund | |||||||
| Ordinary income (including any short-term capital gains) | $200,449 | $319,704 | $— | $95 | $201,080 | $19,840 | $— | |||||||
| Tax-exempt income | 3,374,521 | 6,505,641 | 17,647,476 | 2,563,816 | 2,401,875 | 4,862,616 | 9,262,635 | |||||||
| Long-term capital gain | 285,506 | 963,292 | — | 90,456 | 926,507 | 351,870 | 913,887 | |||||||
| Total distributions | $3,860,476 | $7,788,637 | $17,647,476 | $2,654,367 | $3,529,462 | $5,234,326 | $10,176,522 | |||||||
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Notes to Financial Statements – continued
The federal tax cost and the tax basis components of distributable earnings were as follows:
| As of 3/31/10 | Alabama Fund | Arkansas Fund | California Fund | Florida Fund | Georgia Fund | Maryland Fund | Massachusetts Fund | ||||||||||||||
| Cost of investments | $80,607,354 | $181,086,515 | $378,642,974 | $49,782,138 | $64,713,981 | $109,139,098 | $237,212,718 | ||||||||||||||
| Gross appreciation | $2,799,914 | $7,610,714 | $9,544,122 | $1,314,638 | $2,502,063 | $4,647,014 | $11,361,455 | ||||||||||||||
| Gross depreciation | (467,793 | ) | (1,373,156 | ) | (13,798,170 | ) | (1,464,529 | ) | (412,639 | ) | (2,059,535 | ) | (2,150,781 | ) | |||||||
| Net unrealized appreciation (depreciation) | $2,332,121 | $6,237,558 | $(4,254,048 | ) | $(149,891 | ) | $2,089,424 | $2,587,479 | $9,210,674 | ||||||||||||
| Undistributed ordinary income | 25,709 | 27,917 | — | — | — | 23,201 | 613,631 | ||||||||||||||
| Undistributed tax-exempt income | 342,209 | 663,304 | 1,722,671 | 144,641 | 289,424 | 519,240 | 1,138,473 | ||||||||||||||
| Undistributed long-term capital gain | — | — | — | — | — | — | 296,574 | ||||||||||||||
| Capital loss carryforwards | — | — | (1,103,409 | ) | (282,320 | ) | (153,718 | ) | — | — | |||||||||||
| Post-October capital loss deferral | (105,264 | ) | (21,485 | ) | — | (17,012 | ) | — | (125,604 | ) | — | ||||||||||
| Other temporary differences | (300,691 | ) | (648,444 | ) | (1,461,038 | ) | (143,460 | ) | (238,909 | ) | (414,637 | ) | (936,146 | ) | |||||||
As of March 31, 2010, certain funds had capital loss carryforwards available to offset future realized gains. Such losses expire as follows:
| Expiration Date | California Fund | Florida Fund | Georgia Fund | ||||||
| 3/31/16 | $(40,368 | ) | $— | $— | |||||
| 3/31/17 | (1,063,041 | ) | (53,158 | ) | — | ||||
| 3/31/18 | — | (229,162 | ) | (153,718 | ) | ||||
| Total | $(1,103,409 | ) | $(282,320 | ) | $(153,718 | ) |
Multiple Classes of Shares of Beneficial Interest – Each fund offers multiple classes of shares, which differ in their respective distribution and service fees. Each fund’s income and common expenses are allocated to shareholders based on the value of settled shares outstanding of each class. Each fund’s realized and unrealized gain (loss) 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. Class B shares will convert to Class A shares approximately eight years after purchase. Each fund’s distributions declared to shareholders as reported on the Statements of Changes in Net Assets are presented by class as follows:
From net investment income
| Alabama Fund | Arkansas Fund | California Fund | Florida Fund | |||||||||||||
| Year ended 3/31/10 | Year ended 3/31/09 | Year ended 3/31/10 | Year ended 3/31/09 | Year ended 3/31/10 | Year ended 3/31/09 | Year ended 3/31/10 | Year ended 3/31/09 | |||||||||
| Class A | $3,131,555 | $3,084,759 | $6,711,942 | $6,263,853 | $14,630,282 | $15,431,046 | $2,092,590 | $2,323,816 | ||||||||
| Class B | 213,570 | 289,762 | 237,536 | 241,788 | 686,988 | 1,064,540 | 182,979 | 240,000 | ||||||||
| Class C | — | — | — | — | 1,318,576 | 1,151,890 | — | — | ||||||||
| Total | $3,345,125 | $3,374,521 | $6,949,478 | $6,505,641 | $16,635,846 | $17,647,476 | $2,275,569 | $2,563,816 | ||||||||
| Georgia Fund | Maryland Fund | Massachusetts Fund | ||||||||||||||
| Year ended 3/31/10 | Year ended 3/31/09 | Year ended 3/31/10 | Year ended 3/31/09 | Year ended 3/31/10 | Year ended 3/31/09 | |||||||||||
| Class A | $2,499,999 | $2,191,037 | $4,414,262 | $4,459,411 | $9,257,973 | $8,464,596 | ||||||||||
| Class B | 130,752 | 210,838 | 271,350 | 403,205 | 582,280 | 798,039 | ||||||||||
| Total | $2,630,751 | $2,401,875 | $4,685,612 | $4,862,616 | $9,840,253 | $9,262,635 | ||||||||||
From net realized gain on investments
| Alabama Fund | Arkansas Fund | Florida Fund | Georgia Fund | |||||||||||||
| Year ended 3/31/10 | Year ended 3/31/09 | Year ended 3/31/10 | Year ended 3/31/09 | Year ended 3/31/10 | Year ended 3/31/09 | Year ended 3/31/10 | Year ended 3/31/09 | |||||||||
| Class A | $655,596 | $437,088 | $333,734 | $1,228,299 | $— | $80,823 | $159,490 | $1,014,196 | ||||||||
| Class B | 49,458 | 48,867 | 14,685 | 54,697 | — | 9,728 | 9,437 | 113,391 | ||||||||
| Total | $705,054 | $485,955 | $348,419 | $1,282,996 | $— | $90,551 | $168,927 | $1,127,587 | ||||||||
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| Maryland Fund | Massachusetts Fund | |||||||||||||||
| Year ended 3/31/10 | Year ended 3/31/09 | Year ended 3/31/10 | Year ended 3/31/09 | |||||||||||||
| Class A | $5,375 | $338,022 | $1,208,212 | $830,826 | ||||||||||||
| Class B | 360 | 33,688 | 82,352 | 83,061 | ||||||||||||
| Total | $5,735 | $371,710 | $1,290,564 | $913,887 | ||||||||||||
| (3) | Transactions with Affiliates |
Investment Adviser – Each fund has an investment advisory agreement with MFS to provide overall investment management and related administrative services and facilities to each fund. The management fee is computed daily and paid monthly at an annual rate of 0.45% of each fund’s average daily net assets.
The investment adviser has agreed in writing to pay a portion of the following funds’ total annual operating expenses, exclusive of interest, taxes, extraordinary expenses, brokerage and transaction costs and investment-related expenses (including interest expenses and fees associated with investments in inverse floating rate instruments), such that total annual fund operating expenses do not exceed the following rates annually of certain funds’ average daily net assets:
| Alabama Fund | Georgia Fund | Maryland Fund | ||||
| Class A | 0.93% | 1.00% | 0.95% | |||
| Class B | 1.68% | 1.75% | 1.70% |
These written agreements will continue until modified by the funds’ Board of Trustees, but such agreements will continue at least until July 31, 2010. For the year ended March 31, 2010, these reductions amounted to $33,967 for the Alabama Fund and $17,149 for the Georgia Fund and are reflected as reductions of total expenses in the Statements of Operations. For the year ended March 31, 2010, the actual operating expenses for the Maryland Fund did not exceed the limit and therefore, the investment adviser did not pay any portion of the Maryland Fund’s expenses.
Distributor – MFS Fund Distributors, Inc. (MFD), a wholly-owned subsidiary of MFS, as distributor, received the following amounts for the year ended March 31, 2010, as its portion of the initial sales charge on sales of Class A shares of each fund:
Alabama Fund | Arkansas Fund | California Fund | Florida Fund | Georgia Fund | Maryland Fund | Massachusetts Fund | ||||||
| $35,795 | $125,419 | $104,731 | $18,137 | $19,985 | $33,955 | $84,005 |
The Board of Trustees has adopted a distribution plan for certain class shares pursuant to Rule 12b-1 of the Investment Company Act of 1940.
Each fund’s distribution plan provides that each fund will pay MFD for services provided by MFD and financial intermediaries in connection with the distribution and servicing of certain share classes. One component of the plan is a distribution fee paid to MFD and another component of the plan is a service fee paid to MFD. MFD may subsequently pay all, or a portion, of the distribution and/or service fees to financial intermediaries.
Distribution Plan Fee Table:
| CLASS A | ||||||||||
| Distribution Fee Rate (d) | Service Fee Rate (d) | Total Distribution Plan (d) | Annual Effective Rate (e) | Distribution and Service Fee | ||||||
| Alabama Fund | — | 0.25% | 0.25% | 0.25% | $187,393 | |||||
| Arkansas Fund | — | 0.25% | 0.25% | 0.10% | 332,744 | |||||
| California Fund | — | 0.25% | 0.25% | 0.10% | 630,862 | |||||
| Florida Fund | — | 0.25% | 0.25% | 0.00% | 76,859 | |||||
| Georgia Fund | — | 0.25% | 0.25% | 0.25% | 148,653 | |||||
| Maryland Fund | — | 0.25% | 0.25% | 0.25% | 252,384 | |||||
| Massachusetts Fund | — | 0.25% | 0.25% | 0.25% | 532,474 | |||||
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| CLASS B | ||||||||||
| Distribution Fee Rate (d) | Service Fee Rate (d) | Total Distribution Plan (d) | Annual Effective Rate (e) | Distribution and Service Fee | ||||||
| Alabama Fund | 0.75% | 0.25% | 1.00% | 1.00% | $61,953 | |||||
| Arkansas Fund | 0.75% | 0.25% | 1.00% | 0.88% | 68,335 | |||||
| California Fund | 0.75% | 0.25% | 1.00% | 0.86% | 165,750 | |||||
| Florida Fund | 0.75% | 0.25% | 1.00% | 0.78% | 43,704 | |||||
| Georgia Fund | 0.75% | 0.25% | 1.00% | 1.00% | 37,820 | |||||
| Maryland Fund | 0.75% | 0.25% | 1.00% | 1.00% | 74,372 | |||||
| Massachusetts Fund | 0.75% | 0.25% | 1.00% | 1.00% | 161,440 | |||||
| CLASS C | ||||||||||
| Distribution Fee Rate (d) | Service Fee Rate (d) | Total Distribution Plan (d) | Annual Effective Rate (e) | Distribution and Service Fee | ||||||
| California Fund | 0.75% | 0.25% | 1.00% | 1.00% | $351,680 | |||||
| Alabama Fund | Arkansas Fund | California Fund | Florida Fund | Georgia Fund | Maryland Fund | Massachusetts Fund | ||||||||
| Total Distribution and Service Fees | $249,346 | $401,079 | $1,148,292 | $120,563 | $186,473 | $326,756 | $693,914 |
| (d) | In accordance with the distribution plan for certain classes, each fund pays distribution and/or service fees equal to these annual percentage rates of each class’ average daily net assets. The distribution and service fee rates disclosed by class represent the current rates in effect at the end of the reporting period. Any rate changes, if applicable, are detailed below. |
| (e) | The annual effective rates represent actual fees incurred under the distribution plan for the year ended March 31, 2010, based on each class’ average daily net assets. |
| Arkansas Fund: Effective August 1, 2009, the service fee rate for Class A is 0.25%, MFD has agreed in writing to reduce the Class A service fee rate to 0.10%. This written agreement will continue until modified by the fund’s Board of Trustees, but will continue until at least July 31, 2010. This reduction amounted to $169,995 which is shown as a reduction of total expenses in the Statements of Operations. Prior to August 1, 2009, the service fee rate for Class A was 0.25%, of which 0.10% was being paid by the fund. Payment of the remaining 0.15% was not in effect. Effective August 1, 2009, the service fee rate attributable to Class B shares within the first year of purchase is 0.25%. The service fee rate attributable to all other Class B shares has been reduced by MFD to 0.10% under a written agreement that will continue until modified by the fund’s Board of Trustees, but will continue at least until July 31, 2010. This reduction amounted to $5,171 which is shown as a reduction of total expenses in the Statements of Operations. Prior to August 1, 2009, the service fee rate attributable to Class B shares within the first year of purchase was 0.25%. The service fee rate attributable to all other Class B shares was 0.25%, of which 0.10% was being paid by the fund. Payment of the remaining 0.15% was not in effect. |
| California Fund: Effective August 1, 2009, the service fee rate for Class A is 0.25%, MFD has agreed in writing to reduce the Class A service fee rate to 0.10%. This written agreement will continue until modified by the fund’s Board of Trustees, but will continue until at least July 31, 2010. This reduction amounted to $318,184 which is shown as a reduction of total expenses in the Statements of Operations. Prior to August 1, 2009, the service fee rate for Class A was 0.25%, of which 0.10% was being paid by the fund. Payment of the remaining 0.15% was not in effect. Effective August 1, 2009, the service fee rate attributable to Class B shares within the first year of purchase is 0.25%. The service fee rate attributable to all other Class B shares has been reduced by MFD to 0.10% under a written agreement that will continue until modified by the fund’s Board of Trustees, but will continue at least until July 31, 2010. This reduction amounted to $15,959 which is shown as a reduction of total expenses in the Statements of Operations. Prior to August 1, 2009, the service fee rate attributable to Class B shares within the first year of purchase was 0.25%. The service fee rate attributable to all other Class B shares was 0.25%, of which 0.10% was being paid by the fund. Payment of the remaining 0.15% was not in effect. |
| Florida Fund: Effective August 1, 2009, the service fee rate for Class A is 0.25%, MFD has agreed in writing to reduce the Class A service fee to 0.00%. This written agreement will continue until modified by the fund’s Board of Trustees, but will continue until at least July 31, 2010. This reduction amounted to $76,859 which is shown as a reduction of total expenses in the Statements of Operations. Prior to August 1, 2009, payment of the fund’s 0.25% Class A service fee was not in effect. Effective August 1, 2009, the service fee rate attributable to Class B shares within the first year of purchase is 0.25%. The service fee rate attributable to all other Class B shares has been reduced to 0.00% by MFD under a written agreement that will continue until modified by the fund’s Board of Trustees, but will continue at least until July 31, 2010. This reduction amounted to $6,821 which is shown as a reduction of total expenses in the Statements of Operations. Prior to August 1, 2009, the service fee rate attributable to Class B shares within the first year of purchase was 0.25%. The service fee rate attributable to all other Class B shares was not in effect. |
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Certain Class A shares purchased prior to September 1, 2008 are subject to a contingent deferred sales charge (CDSC) in the event of a shareholder redemption within 12 months of purchase. Certain Class A shares purchased on or subsequent to September 1, 2008 are subject to a CDSC in the event of a shareholder redemption within 24 months of purchase. Class C shares are subject to a CDSC in the event of a shareholder redemption within 12 months of purchase. Class B shares are subject to a CDSC in the event of a shareholder redemption within six years of purchase. All contingent deferred sales charges are paid to MFD and during the year ended March 31, 2010, were as follows:
| CDSC imposed | Alabama Fund | Arkansas Fund | California Fund | Florida Fund | Georgia Fund | Maryland Fund | Massachusetts Fund | |||||||
| Class A | $— | $— | $10,000 | $— | $— | $— | $18 | |||||||
| Class B | 5,655 | 8,224 | 8,309 | 4,181 | 1,991 | 3,058 | 6,479 | |||||||
| Class C | N/A | N/A | 9,256 | N/A | N/A | N/A | N/A |
Shareholder Servicing Agent – MFS Service Center, Inc. (MFSC), a wholly-owned subsidiary of MFS, receives a fee from each fund for its services as shareholder servicing agent calculated as a percentage of the average daily net assets of each fund as determined periodically under the supervision of the funds’ Board of Trustees. For the year ended March 31, 2010, each fund paid the following fee, which equated to the following annual percentage of each fund’s average daily net assets:
| Alabama Fund | Arkansas Fund | California Fund | Florida Fund | Georgia Fund | Maryland Fund | Massachusetts Fund | ||||||||
| Expenses paid | $20,794 | $53,025 | $118,679 | $16,071 | $17,689 | $42,260 | $80,989 | |||||||
| Percentage of average daily net assets | 0.0256% | 0.0312% | 0.0325% | 0.0321% | 0.0280% | 0.0390% | 0.0353% |
MFSC also receives payment from each fund for out-of-pocket expenses, sub-accounting and other shareholder servicing costs which may be paid to affiliated and unaffiliated service providers. For the year ended March 31, 2010, these out-of-pocket expenses, sub-accounting and other shareholder servicing costs amounted to the following:
| Alabama Fund | Arkansas Fund | California Fund | Florida Fund | Georgia Fund | Maryland Fund | Massachusetts Fund | ||||||
| $28,495 | $44,597 | $101,293 | $17,725 | $23,842 | $35,535 | $57,074 |
Administrator – MFS provides certain financial, legal, shareholder communications, compliance, and other administrative services to each fund. Under an administrative services agreement, each fund partially reimburses MFS the costs incurred to provide these services. Each 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 March 31, 2010 was equivalent to an annual effective rate of each fund’s average daily net assets as follows:
| Alabama Fund | Arkansas Fund | California Fund | Florida Fund | Georgia Fund | Maryland Fund | Massachusetts Fund | ||||||||
| Percentage of average daily net assets | 0.0278% | 0.0219% | 0.0191% | 0.0351% | 0.0311% | 0.0250% | 0.0205% |
Trustees’ and Officers’ Compensation – Each fund pays compensation to independent Trustees in the form of a retainer, attendance fees, and additional compensation to Board and Committee chairpersons. Each fund does not pay compensation directly to Trustees or officers of each fund who are also officers of the investment adviser, all of whom receive remuneration for their services to each fund from MFS. Certain officers and Trustees of each fund are officers or directors of MFS, MFD, and MFSC.
Prior to December 31, 2001, each fund had an unfunded defined benefit plan (“DB plan”) for independent Trustees. As of December 31, 2001, the Board took action to terminate the DB plan with respect to then-current and any future independent Trustees, such that the DB Plan covers only certain of those former independent Trustees who retired on or before December 31, 2001. The DB Plan resulted in a pension expense for each fund. These amounts are included in independent Trustees’ compensation on the Statements of Operations and were as follows:
| Alabama Fund | Arkansas Fund | California Fund | Florida Fund | Georgia Fund | Maryland Fund | Massachusetts Fund | ||||||
| $663 | $721 | $1,215 | $720 | $597 | $1,162 | $1,177 |
The liability for deferred retirement benefits payable to certain independent Trustees in connection with the DB plan amounted to the following at March 31, 2010, and is included in payable for independent Trustees’ compensation on the Statements of Assets and Liabilities:
| Alabama Fund | Arkansas Fund | California Fund | Florida Fund | Georgia Fund | Maryland Fund | Massachusetts Fund | ||||||
| $7,203 | $6,923 | $15,420 | $6,916 | $8,128 | $10,939 | $10,893 |
Other – These funds and certain other funds managed by MFS (the funds) have entered into services agreements (the Agreements) which provide for payment of fees by the funds to Tarantino LLC and Griffin Compliance LLC in return for the
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provision of services of an Independent Chief Compliance Officer (ICCO) and Assistant ICCO, respectively, for the funds. The ICCO and Assistant ICCO are officers of the funds and the sole members of Tarantino LLC and Griffin Compliance LLC, respectively. The funds can terminate the Agreements with Tarantino LLC and Griffin Compliance LLC at any time under the terms of the Agreements. For the year ended March 31, 2010, the aggregate fees paid by each fund to Tarantino LLC and Griffin Compliance LLC amounted to the following and are included in miscellaneous expense on the Statements of Operations:
| Alabama Fund | Arkansas Fund | California Fund | Florida Fund | Georgia Fund | Maryland Fund | Massachusetts Fund | ||||||
| $899 | $1,859 | $4,052 | $560 | $698 | $1,203 | $2,512 |
MFS has agreed to reimburse the funds for a portion of the payments made by each fund in the following amounts, which are shown as a reduction of total expenses in the Statements of Operations. Additionally, MFS has agreed to bear all expenses associated with office space, other administrative support, and supplies provided to the ICCO and Assistant ICCO:
| Alabama Fund | Arkansas Fund | California Fund | Florida Fund | Georgia Fund | Maryland Fund | Massachusetts Fund | ||||||
| $473 | $978 | $2,137 | $295 | $369 | $635 | $1,325 |
Each fund may invest in the MFS Institutional Money Market Portfolio which is managed by MFS and seeks a high level of current income consistent with preservation of capital and liquidity. Income earned on this investment is included in dividends from underlying funds on the Statements of Operations. This money market fund does not pay a management fee to MFS.
| (4) | Portfolio Securities |
Purchases and sales of investments, other than U.S. Government securities, purchased option transactions, and short-term obligations, were as follows:
| Alabama Fund | Arkansas Fund | California Fund | Florida Fund | Georgia Fund | Maryland Fund | Massachusetts Fund | ||||||||
| Purchases | $25,376,106 | $46,123,139 | $117,122,880 | $2,484,164 | $15,768,571 | $29,882,256 | $80,254,516 | |||||||
| Sales | $20,938,836 | $14,446,579 | $107,390,569 | $2,933,943 | $9,860,191 | $24,878,558 | $45,959,086 |
| (5) | Shares of Beneficial Interest |
Each 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:
| Alabama Fund | Arkansas Fund | |||||||||||||||||||||||
| Year ended 3/31/10 | Year ended 3/31/09 | Year ended 3/31/10 | Year ended 3/31/09 | |||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||
| Shares sold | ||||||||||||||||||||||||
Class A | 1,459,582 | $14,771,757 | 1,524,765 | $14,907,781 | 4,010,435 | $39,315,304 | 1,838,224 | $17,596,391 | ||||||||||||||||
Class B | 27,279 | 273,331 | 43,365 | 411,313 | 301,635 | 2,973,205 | 92,195 | 878,328 | ||||||||||||||||
| 1,486,861 | $15,045,088 | 1,568,130 | $15,319,094 | 4,312,070 | $42,288,509 | 1,930,419 | $18,474,719 | |||||||||||||||||
| Shares issued to shareholders in reinvestment of distributions | ||||||||||||||||||||||||
Class A | 233,138 | $2,362,427 | 242,516 | $2,368,152 | 450,786 | $4,435,544 | 522,341 | $4,922,940 | ||||||||||||||||
Class B | 18,221 | 184,367 | 26,442 | 257,896 | 15,125 | 149,003 | 19,579 | 184,515 | ||||||||||||||||
| 251,359 | $2,546,794 | 268,958 | $2,626,048 | 465,911 | $4,584,547 | 541,920 | $5,107,455 | |||||||||||||||||
| Shares reacquired | ||||||||||||||||||||||||
Class A | (1,111,094 | ) | $(11,202,857 | ) | (1,665,282 | ) | $(16,211,535 | ) | (1,420,327 | ) | $(13,943,704 | ) | (1,573,532 | ) | $(14,742,954 | ) | ||||||||
Class B | (227,766 | ) | (2,300,247 | ) | (194,172 | ) | (1,878,160 | ) | (147,772 | ) | (1,456,119 | ) | (150,020 | ) | (1,416,677 | ) | ||||||||
| (1,338,860 | ) | $(13,503,104 | ) | (1,859,454 | ) | $(18,089,695 | ) | (1,568,099 | ) | $(15,399,823 | ) | (1,723,552 | ) | $(16,159,631 | ) | |||||||||
| Net change | ||||||||||||||||||||||||
Class A | 581,626 | $5,931,327 | 101,999 | $1,064,398 | 3,040,894 | $29,807,144 | 787,033 | $7,776,377 | ||||||||||||||||
Class B | (182,266 | ) | (1,842,549 | ) | (124,365 | ) | (1,208,951 | ) | 168,988 | 1,666,089 | (38,246 | ) | (353,834 | ) | ||||||||||
| 399,360 | $4,088,778 | (22,366 | ) | $(144,553 | ) | 3,209,882 | $31,473,233 | 748,787 | $7,422,543 | |||||||||||||||
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| California Fund | Florida Fund | |||||||||||||||||||||||
| Year ended 3/31/10 | Year ended 3/31/09 | Year ended 3/31/10 | Year ended 3/31/09 | |||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||
| Shares sold | ||||||||||||||||||||||||
Class A | 9,025,895 | $49,189,461 | 10,147,433 | $54,058,519 | 526,615 | $4,963,375 | 633,254 | $5,909,039 | ||||||||||||||||
Class B | 244,889 | 1,338,564 | 218,963 | 1,166,444 | 41,289 | 390,859 | 65,703 | 605,341 | ||||||||||||||||
Class C | 1,835,576 | 10,011,433 | 1,473,546 | 7,794,943 | N/A | N/A | N/A | N/A | ||||||||||||||||
| 11,106,360 | $60,539,458 | 11,839,942 | $63,019,906 | 567,904 | $5,354,234 | 698,957 | $6,514,380 | |||||||||||||||||
| Shares issued to shareholders in reinvestment of distributions | ||||||||||||||||||||||||
Class A | 1,468,607 | $8,022,294 | 1,736,958 | $9,217,000 | 106,382 | $1,001,027 | 131,375 | $1,198,662 | ||||||||||||||||
Class B | 78,361 | 427,087 | 136,182 | 725,241 | 9,457 | 88,850 | 12,192 | 111,395 | ||||||||||||||||
Class C | 124,262 | 681,314 | 132,464 | 704,542 | N/A | N/A | N/A | N/A | ||||||||||||||||
| 1,671,230 | $9,130,695 | 2,005,604 | $10,646,783 | 115,839 | $1,089,877 | 143,567 | $1,310,057 | |||||||||||||||||
| Shares reacquired | ||||||||||||||||||||||||
Class A | (8,901,187 | ) | $(48,464,716 | ) | (16,223,876 | ) | $(85,636,027 | ) | (651,868 | ) | $(6,088,753 | ) | (1,235,993 | ) | $(11,241,799 | ) | ||||||||
Class B | (1,616,183 | ) | (8,846,980 | ) | (2,189,165 | ) | (11,493,065 | ) | (178,799 | ) | (1,689,086 | ) | (296,490 | ) | (2,744,483 | ) | ||||||||
Class C | (897,563 | ) | (4,919,141 | ) | (890,232 | ) | (4,625,186 | ) | N/A | N/A | N/A | N/A | ||||||||||||
| (11,414,933 | ) | $(62,230,837 | ) | (19,303,273 | ) | $(101,754,278 | ) | (830,667 | ) | $(7,777,839 | ) | (1,532,483 | ) | $(13,986,282 | ) | |||||||||
| Net change | ||||||||||||||||||||||||
Class A | 1,593,315 | $8,747,039 | (4,339,485 | ) | $(22,360,508 | ) | (18,871 | ) | $(124,351 | ) | (471,364 | ) | $(4,134,098 | ) | ||||||||||
Class B | (1,292,933 | ) | (7,081,329 | ) | (1,834,020 | ) | (9,601,380 | ) | (128,053 | ) | (1,209,377 | ) | (218,595 | ) | (2,027,747 | ) | ||||||||
Class C | 1,062,275 | 5,773,606 | 715,778 | 3,874,299 | N/A | N/A | N/A | N/A | ||||||||||||||||
| 1,362,657 | $7,439,316 | (5,457,727 | ) | $(28,087,589 | ) | (146,924 | ) | $(1,333,728 | ) | (689,959 | ) | $(6,161,845 | ) | |||||||||||
| Georgia Fund | Maryland Fund | |||||||||||||||||||||||
| Year ended 3/31/10 | Year ended 3/31/09 | Year ended 3/31/10 | Year ended 3/31/09 | |||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||
| Shares sold | ||||||||||||||||||||||||
Class A | 1,275,340 | $13,381,028 | 1,151,749 | $11,795,811 | 1,303,797 | $14,069,435 | 817,136 | $8,505,319 | ||||||||||||||||
Class B | 47,629 | 498,843 | 38,603 | 392,421 | 60,358 | 650,347 | 20,930 | 215,761 | ||||||||||||||||
| 1,322,969 | $13,879,871 | 1,190,352 | $12,188,232 | 1,364,155 | $14,719,782 | 838,066 | $8,721,080 | |||||||||||||||||
| Shares issued to shareholders in reinvestment of distributions | ||||||||||||||||||||||||
Class A | 160,222 | $1,677,826 | 211,245 | $2,097,556 | 256,997 | $2,759,854 | 301,252 | $3,094,331 | ||||||||||||||||
Class B | 8,076 | 84,725 | 18,295 | 182,384 | 14,814 | 158,634 | 23,784 | 244,264 | ||||||||||||||||
| 168,298 | $1,762,551 | 229,540 | $2,279,940 | 271,811 | $2,918,488 | 325,036 | $3,338,595 | |||||||||||||||||
| Shares reacquired | ||||||||||||||||||||||||
Class A | (717,240 | ) | $(7,546,675 | ) | (688,605 | ) | $(6,853,876 | ) | (930,744 | ) | $(10,040,186 | ) | (1,536,364 | ) | $(15,662,377 | ) | ||||||||
Class B | (186,850 | ) | (1,949,716 | ) | (258,244 | ) | (2,609,229 | ) | (330,014 | ) | (3,534,168 | ) | (340,439 | ) | (3,477,387 | ) | ||||||||
| (904,090 | ) | $(9,496,391 | ) | (946,849 | ) | $(9,463,105 | ) | (1,260,758 | ) | $(13,574,354 | ) | (1,876,803 | ) | $(19,139,764 | ) | |||||||||
| Net change | ||||||||||||||||||||||||
Class A | 718,322 | $7,512,179 | 674,389 | $7,039,491 | 630,050 | $6,789,103 | (417,976 | ) | $(4,062,727 | ) | ||||||||||||||
Class B | (131,145 | ) | (1,366,148 | ) | (201,346 | ) | (2,034,424 | ) | (254,842 | ) | (2,725,187 | ) | (295,725 | ) | (3,017,362 | ) | ||||||||
| 587,177 | $6,146,031 | 473,043 | $5,005,067 | 375,208 | $4,063,916 | (713,701 | ) | $(7,080,089 | ) | |||||||||||||||
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| Massachusetts Fund | ||||||||||||
| Year ended 3/31/10 | Year ended 3/31/09 | |||||||||||
| Shares | Amount | Shares | Amount | |||||||||
| Shares sold | ||||||||||||
Class A | 5,070,877 | $55,482,081 | 2,897,514 | $29,859,717 | ||||||||
Class B | 112,992 | 1,227,921 | 114,114 | 1,187,294 | ||||||||
| 5,183,869 | $56,710,002 | 3,011,628 | $31,047,011 | |||||||||
| Shares issued to shareholders in reinvestment of distributions | ||||||||||||
Class A | 532,924 | $5,829,613 | 490,887 | $5,091,501 | ||||||||
Class B | 34,612 | 378,541 | 49,797 | 518,791 | ||||||||
| 567,536 | $6,208,154 | 540,684 | $5,610,292 | |||||||||
Shares reacquired | ||||||||||||
Class A | (2,100,505 | ) | $(22,982,181 | ) | (2,901,758 | ) | $(29,550,894 | ) | ||||
Class B | (558,143 | ) | (6,119,781 | ) | (736,520 | ) | (7,722,780 | ) | ||||
| (2,658,648 | ) | $(29,101,962 | ) | (3,638,278 | ) | $(37,273,674 | ) | |||||
Net change | ||||||||||||
Class A | 3,503,296 | $38,329,513 | 486,643 | $5,400,324 | ||||||||
Class B | (410,539 | ) | (4,513,319 | ) | (572,609 | ) | (6,016,695 | ) | ||||
| 3,092,757 | $33,816,194 | (85,966 | ) | $(616,371 | ) | |||||||
| (6) | Line of Credit |
Each fund and certain other funds managed by MFS participate in a $1.1 billion unsecured committed line of credit, subject to a $1 billion sublimit, provided by a syndication 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 higher of the Federal Reserve funds rate or one month LIBOR 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 at the end of each calendar quarter. In addition, each 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 a rate equal to the Federal Reserve funds rate plus an agreed upon spread. For the year ended March 31, 2010, each fund’s commitment fee and interest expense were as follows, and are included in miscellaneous expense on the Statements of Operations.
| Alabama Fund | Arkansas Fund | California Fund | Florida Fund | Georgia Fund | Maryland Fund | Massachusetts Fund | ||||||||
| Commitment Fee | $1,414 | $2,888 | $6,370 | $878 | $1,088 | $1,883 | $3,915 | |||||||
| Interest Expense | $— | $— | $— | $— | $— | $— | $— |
| (7) | Transactions in Underlying Funds-Affiliated Issuers |
An affiliated issuer may be considered one in which each fund owns 5% or more of the outstanding voting securities, or a company which is under common control. For the purposes of this report, each fund assumes the MFS Institutional Money Market Portfolio to be an affiliated issuer. Each fund’s transactions in the MFS Institutional Money Market Portfolio for the year ended March 31, 2010, are as follows:
| Underlying Funds – MFS Institutional Money Market Portfolio | ||||||||
| Beginning Share/Par Amount | Acquisitions Share/Par Amount | Dispositions Share/Par Amount | Ending Share/Par Amount | |||||
Alabama Fund | 1,959,869 | 26,334,597 | (27,710,865) | 583,601 | ||||
Arkansas Fund | 4,265,949 | 45,508,927 | (44,641,003) | 5,133,873 | ||||
California Fund | 8,577,179 | 117,878,882 | (120,835,094) | 5,620,967 | ||||
Florida Fund | 984,804 | 7,403,771 | (7,702,084) | 686,491 | ||||
Georgia Fund | 774,568 | 20,263,218 | (19,571,991) | 1,465,795 | ||||
Maryland Fund | 194,806 | 35,089,897 | (34,083,185) | 1,201,518 | ||||
Massachusetts Fund | 5,580,865 | 67,975,960 | (73,412,112) | 144,713 | ||||
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Notes to Financial Statements – continued
| Underlying Funds – MFS Institutional Money Market Portfolio | ||||||||
| Realized Gain (Loss) | Capital Gain Distributions | Dividend Income | Ending Value | |||||
Alabama Fund | $— | $— | $3,634 | $583,601 | ||||
Arkansas Fund | — | — | 10,719 | 5,133,873 | ||||
California Fund | — | — | 20,552 | 5,620,967 | ||||
Florida Fund | — | — | 1,758 | 686,491 | ||||
Georgia Fund | — | — | 2,216 | 1,465,795 | ||||
Maryland Fund | — | — | 4,263 | 1,201,518 | ||||
Massachusetts Fund | — | — | 11,924 | 144,713 | ||||
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees and the Shareholders of MFS Municipal Series Trust:
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of MFS Alabama Municipal Bond Fund, MFS Arkansas Municipal Bond Fund, MFS California Municipal Bond Fund, MFS Florida Municipal Bond Fund, MFS Georgia Municipal Bond Fund, MFS Maryland Municipal Bond Fund and MFS Massachusetts Municipal Bond Fund (the “Funds”) (each a portfolio comprising MFS Municipal Series Trust) as of March 31, 2010, and the related statements 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, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of March 31, 2010, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the funds constituting MFS Municipal Series Trust as of March 31, 2010, the results of their operations for the year then ended, the changes in their 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.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
May 17, 2010
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RESULTS OF SHAREHOLDER MEETING
(unaudited)
At a special meeting of shareholders of the MFS Municipal Series Trust, which was held on January 28, 2010, the following actions were taken:
Item 1. To elect the following individuals as Trustees:
| Number of Dollars | ||||
Nominee | For | Withheld Authority | ||
| Robert E. Butler | 3,148,608,458.797 | 48,724,942.416 | ||
| Lawrence H. Cohn, M.D. | 3,139,197,940.941 | 58,135,460.722 | ||
| Maureen R. Goldfarb | 3,148,250,189.942 | 49,083,211.271 | ||
| David H. Gunning | 3,148,075,995.013 | 49,257,406.201 | ||
| William R. Gutow | 3,146,872,731.240 | 50,460,669.973 | ||
| Michael Hegarty | 3,149,134,569.376 | 48,198,831.838 | ||
| John P. Kavanaugh | 3,149,053,580.903 | 48,279,820.310 | ||
| Robert J. Manning | 3,148,783,841.981 | 48,549,559.232 | ||
| Robert C. Pozen | 3,149,246,365.076 | 48,087,036.137 | ||
| J. Dale Sherratt | 3,140,538,059.148 | 56,795,342.065 | ||
| Laurie J. Thomsen | 3,149,279,115.090 | 48,054,286.123 | ||
| Robert W. Uek | 3,146,034,726.805 | 51,298,674.408 | ||
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TRUSTEES AND OFFICERS — IDENTIFICATION AND BACKGROUND
The Trustees and officers of the Trust, as of May 1, 2010, 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 500 Boylston Street, Boston, Massachusetts 02116.
Name, Date of Birth | Position(s) Held with Fund | Trustee/Officer Since (h) | Principal Occupations During the Past Five Years & | |||
| INTERESTED TRUSTEES | ||||||
Robert J. Manning (k) (born 10/20/63) | Trustee | February 2004 | Massachusetts Financial Services Company, Chief Executive Officer, Chief Investment Officer and Director, President (until December 2009) | |||
Robert C. Pozen (k) (born 8/08/46) | Trustee | February 2004 | Massachusetts Financial Services Company, Chairman (since February 2004); Medtronic, Inc, (medical devices), Director (since 2004); Harvard Business School (education), Senior Lecturer (since 2008); Bell Canada Enterprises (telecommunications), Director (until February 2009); The Bank of New York, Director (finance), (March 2004 to May 2005); Telesat (satellite communications), Director (until November 2007) | |||
| INDEPENDENT TRUSTEES | ||||||
David H. Gunning (born 5/30/42) | Trustee and Chair of Trustees | January 2004 | Retired; Cleveland-Cliffs Inc. (mining products and service provider), Vice Chairman/Director (until May 2007); Lincoln Electric Holdings, Inc. (welding equipment manufacturer), Director; Development Alternatives, Inc. (consulting), Director/Non Executive Chairman; Southwest Gas Corp. (natural gas distribution), Director (until May 2004); Portman Limited (mining), Director (until 2008) | |||
Robert E. Butler (n) (born 11/29/41) | Trustee | January 2006 | Consultant – investment company industry regulatory and compliance matters (since July 2002); PricewaterhouseCoopers LLP (professional services firm), Partner (until 2002) | |||
| Lawrence H. Cohn, M.D. (born 3/11/37) | Trustee | June 1989 | Brigham and Women’s Hospital, Senior Cardiac Surgeon (since 2005); Harvard Medical School, Professor of Cardiac Surgery; Partners HealthCare, Physician Director of Medical Device Technology (since 2006); Brigham and Women’s Hospital, Chief of Cardiac Surgery (until 2005) | |||
Maureen R. Goldfarb (born 4/6/55) | Trustee | January 2009 | Private investor; John Hancock Financial Services, Inc., Executive Vice President (until 2004); John Hancock Mutual Funds, Trustee and Chief Executive Officer (until 2004) | |||
William R. Gutow (born 9/27/41) | Trustee | December 1993 | Private investor and real estate consultant ; Capital Entertainment Management Company (video franchise), Vice Chairman; Atlantic Coast Tan (tanning salons), Vice Chairman (until 2007); Texas Donuts (donut franchise), Vice Chairman (until 2009) | |||
Michael Hegarty (born 12/21/44) | Trustee | December 2004 | Private investor; AXA Financial (financial services and insurance), Vice Chairman and Chief Operating Officer (until 2001); The Equitable Life Assurance Society (insurance), President and Chief Operating Officer (until 2001) | |||
John P. Kavanaugh (born 11/4/54) | Trustee | January 2009 | Private investor; The Hanover Insurance Group, Inc., Vice President and Chief Investment Officer (until 2006); Allmerica Investment Trust, Allmerica Securities Trust and Opus Investment Trust (investment companies), Chairman, President and Trustee (until 2006) | |||
J. Dale Sherratt (born 9/23/38) | Trustee | June 1989 | Insight Resources, Inc. (acquisition planning specialists), President; Wellfleet Investments (investor in health care companies), Managing General Partner | |||
Laurie J. Thomsen (born 8/05/57) | Trustee | March 2005 | New Profit, Inc. (venture philanthropy), Executive Partner (since 2006); Private investor; The Travelers Companies (commercial property liability insurance), Director; Prism Venture Partners (venture capital), Co-founder and General Partner (until June 2004) | |||
Robert W. Uek (born 5/18/41) | Trustee | January 2006 | Consultant to investment company industry; PricewaterhouseCoopers LLP (professional services firm), Partner (until 1999); TT International Funds (mutual fund complex), Trustee (until 2005); Hillview Investment Trust II Funds (mutual fund complex), Trustee (until 2005) | |||
| OFFICERS | ||||||
Maria F. Dwyer (k) (born 12/01/58) | President | March 2004 | Massachusetts Financial Services Company, Executive Vice President and Chief Regulatory Officer (since March 2004) Chief Compliance Officer (since December 2006); Fidelity Management & Research Company, Vice President (prior to March 2004); Fidelity Group of Funds, President and Treasurer (until March 2004) | |||
| Christopher R. Bohane (k) (born 1/18/74) | Assistant Secretary and Assistant Clerk | July 2005 | Massachusetts Financial Services Company, Vice President and Senior Counsel | |||
John M. Corcoran (k) (born 4/13/65) | Treasurer | October 2008 | Massachusetts Financial Services Company, Senior Vice President (since October 2008); State Street Bank and Trust (financial services provider), Senior Vice President, (until September 2008) | |||
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Trustees and Officers – continued
Name, Date of Birth | Position(s) Held with Fund | Trustee/Officer Since (h) | Principal Occupations During the Past Five Years & | |||
Ethan D. Corey (k) (born 11/21/63) | Assistant Secretary and Assistant Clerk | July 2005 | Massachusetts Financial Services Company, Senior Vice President and Associate General Counsel (since 2004); Dechert LLP (law firm), Counsel (prior to December 2004) | |||
David L. DiLorenzo (k) (born 8/10/68) | Assistant Treasurer | July 2005 | Massachusetts Financial Services Company, Vice President (since June 2005); JP Morgan Investor Services, Vice President (until June 2005) | |||
Timothy M. Fagan (k) (born 7/10/68) | Assistant Secretary and Assistant Clerk | September 2005 | Massachusetts Financial Services Company, Vice President and Senior Counsel (since September 2005); John Hancock Advisers, LLC, Vice President, Senior Attorney and Chief Compliance Officer (until August 2005) | |||
Mark D. Fischer (k) (born 10/27/70) | Assistant Treasurer | July 2005 | Massachusetts Financial Services Company, Vice President (since May 2005); JP Morgan Investment Management Company, Vice President (until May 2005) | |||
Robyn L. Griffin (born 7/04/75) | Assistant Independent Chief Compliance Officer | August 2008 | Griffin Compliance LLC (provider of compliance services), Principal (since August 2008); State Street Corporation (financial services provider), Mutual Fund Administration Assistant Vice President (October 2006-July 2008); Liberty Mutual Group (insurance), Personal Market Assistant Controller (April 2006-October 2006); Deloitte & Touche LLP (professional services firm), Senior Manager (prior to April 2006) | |||
Brian E. Langenfeld (k) (born 3/07/73) | Assistant Secretary and Assistant Clerk | June 2006 | Massachusetts Financial Services Company, Vice President and Senior Counsel (since May 2006); John Hancock Advisers, LLC, Assistant Vice President and Counsel (until April 2006) | |||
Ellen Moynihan (k) (born 11/13/57) | Assistant Treasurer | April 1997 | Massachusetts Financial Services Company, Senior Vice President | |||
Susan S. Newton (k) (born 3/07/50) | Assistant Secretary and Assistant Clerk | May 2005 | Massachusetts Financial Services Company, Senior Vice President and Associate General Counsel (since April 2005); John Hancock Advisers, LLC, Senior Vice President, Secretary and Chief Legal Officer (until April 2005) | |||
Susan A. Pereira (k) (born 11/05/70) | Assistant Secretary and Assistant Clerk | July 2005 | Massachusetts Financial Services Company, Vice President and Senior Counsel (since June 2004); Bingham McCutchen LLP (law firm), Associate (until June 2004) | |||
Mark N. Polebaum (k) (born 5/01/52) | Secretary and Clerk | January 2006 | Massachusetts Financial Services Company, Executive Vice President, General Counsel and Secretary (since January 2006); Wilmer Cutler Pickering Hale and Dorr LLP (law firm), Partner (until January 2006) | |||
Frank L. Tarantino (born 3/07/44) | Independent Chief Compliance Officer | June 2004 | Tarantino LLC (provider of compliance services), Principal (since June 2004); CRA Business Strategies Group (consulting services), Executive Vice President (until June 2004) | |||
Richard S. Weitzel (k) (born 7/16/70) | Assistant Secretary and Assistant Clerk | October 2007 | Massachusetts Financial Services Company, Vice President and Assistant General Counsel (since 2004); Massachusetts Department of Business and Technology, General Counsel (until April 2004) | |||
James O. Yost (k) (born 6/12/60) | Assistant Treasurer | September 1990 | 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. For the period from December 15, 2004 until February 22, 2005, Messrs. Pozen and Manning served as Advisory Trustees. For the period March 2008 until October 2008, Ms. Dwyer served as Treasurer of the Funds. |
| (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 position with MFS. The address of MFS is 500 Boylston Street, Boston, Massachusetts 02116. |
| (n) | In 2004 and 2005, Mr. Butler provided consulting services to the independent compliance consultant retained by MFS pursuant to its settlement with the SEC concerning market timing and related matters. The terms of that settlement required that compensation and expenses related to the independent compliance consultant be borne exclusively by MFS and, therefore, MFS paid Mr. Butler for the services he rendered to the independent compliance consultant. In 2004 and 2005, MFS paid Mr. Butler a total of $351,119.29. |
Each Trustee 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. The Trust does not hold annual meetings for the purpose of electing Trustees, and Trustees are not elected for fixed terms. 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. Messrs. Butler, Kavanaugh, Sherratt, Uek and Ms. Thomsen are members of the Trust’s Audit Committee.
Each of the Fund’s Trustees and officers holds comparable positions with certain other funds of which MFS or a subsidiary is the investment adviser or distributor, and, in the case of the officers, with certain affiliates of MFS. As of January 1, 2010, the Trustees served as board members of 99 funds within the MFS Family of Funds.
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Trustees and Officers – continued
The Statement of Additional Information for the Fund and further information about the Trustees are available without charge upon request by calling 1-800-225-2606.
Investment Adviser Massachusetts Financial Services Company 500 Boylston Street, Boston, MA 02116-3741 Distributor MFS Fund Distributors, Inc. 500 Boylston Street, Boston, MA 02116-3741 Portfolio Manager Michael Dawson | Custodian JPMorgan Chase Bank One Chase Manhattan Plaza, New York, NY 10081
Independent Registered Public Accounting Firm Deloitte & Touche LLP 200 Berkeley Street, Boston, MA 02116 |
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BOARD REVIEW OF INVESTMENT ADVISORY AGREEMENT
A discussion regarding the Board’s most recent review and renewal of each fund’s Investment Advisory Agreement with MFS is available by clicking on the fund’s name under “Mutual Funds” in the “Products and Performance” section of the MFS Web site (mfs.com).
PROXY VOTING POLICIES AND INFORMATION
A general description of the MFS funds’ proxy voting policies and procedures is available without charge, upon request, by calling 1-800-225-2606, by visiting the Proxy Voting section of mfs.com or by visiting the SEC’s Web site at http://www.sec.gov.
Information regarding how each fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is available without charge by visiting the Proxy Voting section of mfs.com or by visiting the SEC’s Web site at http://www.sec.gov.
QUARTERLY PORTFOLIO DISCLOSURE
Each fund will file a complete schedule of portfolio holdings with the Securities and Exchange Commission (the Commission) for the first and third quarters of each fiscal year on Form N-Q. Each fund’s Form N-Q may be reviewed and copied at the:
Public Reference Room
Securities and Exchange Commission
100 F Street, NE, Room 1580
Washington, D.C. 20549
Information on the operation of the Public Reference Room may be obtained by calling the Commission at 1-800-SEC-0330. Each fund’s Form N-Q is available on the EDGAR database on the Commission’s Internet Web site at http://www.sec.gov, and copies of this information may be obtained, upon payment of a duplicating fee, by electronic request at the following e-mail address: publicinfo@sec.gov or by writing the Public Reference Section at the above address.
A shareholder can also obtain the quarterly portfolio holdings report at mfs.com.
From time to time, MFS may post important information about each fund or the MFS funds on the MFS web site (mfs.com). This information is available by visiting the “News & Commentary” section of mfs.com or by clicking on the fund’s name under “Mutual Funds” in the “Products and Performance” section of mfs.com.
FEDERAL TAX INFORMATION (unaudited)
The funds will notify shareholders of amounts for use in preparing 2010 income tax forms in January 2011. The following information is provided pursuant to provisions of the Internal Revenue Code.
The funds below designate the following amounts as capital gain dividends paid during the fiscal year.
| Capital Gains | ||
| Arkansas Fund | $138,000 | |
| Georgia Fund | 212,000 | |
| Maryland Fund | 40,000 | |
| Massachusetts Fund | 961,000 |
Of the dividends paid from net investment income during the fiscal year, the following percentages were designated as exempt interest dividends for federal income tax purposes. If a fund has earned income on private activity bonds, a portion of the dividends paid may be considered a tax preference item for purposes of computing a shareholder’s alternative minimum tax.
| Exempt Interest Dividends | ||
| Alabama Fund | 100.00% | |
| Arkansas Fund | 100.00% | |
| California Fund | 100.00% | |
| Florida Fund | 100.00% | |
| Georgia Fund | 100.00% | |
| Maryland Fund | 100.00% | |
| Massachusetts Fund | 100.00% |
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Privacy is a concern for every investor today. At MFS Investment Management® and the MFS funds, we take this concern very seriously. We want you to understand our policies about the investment products and services that we offer, and how we protect the nonpublic personal information of investors who have a direct relationship with us and our wholly owned subsidiaries.
Throughout our business relationship, you provide us with personal information. We maintain information and records about you, your investments, and the services you use. Examples of the nonpublic personal information we maintain include
| Ÿ | data from investment applications and other forms |
| Ÿ | share balances and transactional history with us, our affiliates, or others |
| Ÿ | facts from a consumer reporting agency |
We do not disclose any nonpublic personal information about our customers or former customers to anyone, except as permitted by law. We may share nonpublic personal information with third parties or certain of our affiliates in connection with servicing your account or processing your transactions. We may share information with companies or financial institutions that perform marketing services on our behalf or with other financial institutions with which we have joint marketing arrangements, subject to any legal requirements.
Authorization to access your nonpublic personal information is limited to appropriate personnel who provide products, services, or information to you. We maintain physical, electronic, and procedural safeguards to help protect the personal information we collect about you.
If you have any questions about the MFS privacy policy, please call 1-800-225-2606 any business day.
Note: If you own MFS products or receive MFS services 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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Mississippi, New York, North Carolina, Pennsylvania,
South Carolina, Tennessee, Virginia, and West Virginia
| CONTACT INFORMATION | BACK COVER |
SIPC Contact Information: You may obtain information about the Securities Investor Protection Corporation (“SIPC”), including the SIPC Brochure, by contacting SIPC either by telephone (202-371-8300) or by accessing SIPC’s website address (www.sipc.org).
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 GUARANTEE
Table of Contents
Dear Shareholders:
After having suffered their biggest declines since the Great Depression, most global markets experienced an impressive resurgence during the latter months of 2009 and the first quarter of 2010. The global economy was able to reap the benefits of two major trends. The first of these was the massive efforts of governments and central banks to increase liquidity in the financial system as they sought to prevent the credit crisis from further affecting the banking system. The second was the move by companies around the world to cut costs and operations to prepare for rapidly changing market conditions. We believe that these moves not only shortened the length of the downturn but also set the stage for the recovery we are seeing today.
Even with the significant market gains of 2009 and the early part of 2010, the recovery is unrolling at a moderate pace, with rebounds in the manufacturing sector and corporate America leading the way. Central bankers are proceeding with caution and have held benchmark interest rates unchanged as they debate the best way to withdraw stimulus measures without disrupting the fragile growth process.
While hurdles remain, we believe that the global economy is on the road to recovery. As always, we continue to be mindful of the many challenges faced at the individual, national, and international levels. It is at times such as these that we want to remind investors of the merits of maintaining a long-term view, adhering to basic investing principles such as asset allocation and diversification, and working closely with advisors to identify and research investment opportunities. At MFS®, we take particular pride in how well mutual funds can help investors by providing the diversification that is important in any type of market climate.
Respectfully,
Robert J. Manning
Chief Executive Officer and Chief Investment Officer
MFS Investment Management®
May 17, 2010
The opinions expressed in this letter are subject to change, may not be relied upon for investment advice, and no forecasts can be guaranteed.
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MFS® Mississippi Municipal Bond Fund
Portfolio structure (i)
| Top five industries (i) | ||
| Universities – Colleges | 18.2% | |
| State & Local Agencies | 17.1% | |
| Healthcare Revenue – Hospitals | 14.2% | |
| Water & Sewer Utility Revenue | 11.4% | |
| General Obligations – General Purpose | 7.6% | |
| Credit quality (a)(i) | ||
| AAA | 6.1% | |
| AA | 36.6% | |
| A | 27.4% | |
| BBB | 18.7% | |
| BB | 2.2% | |
| B | 0.2% | |
| Other | 8.8% | |
| Portfolio facts (i) | ||
| Average Duration (d) | 8.9 | |
| Average Effective Maturity (m) | 16.7 yrs. | |
MFS® New York Municipal Bond Fund
Portfolio structure (i)
| Top five industries (i) | ||
| Universities – Colleges | 17.6% | |
| State & Local Agencies | 12.9% | |
| Water & Sewer Utility Revenue | 8.4% | |
| Healthcare Revenue – Hospitals | 8.3% | |
| Tax – Other | 7.0% | |
| Credit quality (a)(i) | ||
| AAA | 5.0% | |
| AA | 37.9% | |
| A | 33.0% | |
| BBB | 15.8% | |
| BB | 1.3% | |
| B | 0.9% | |
| Other | 6.1% | |
| Portfolio facts (i) | ||
| Average Duration (d) | 9.6 | |
| Average Effective Maturity (m) | 20.7 yrs. | |
MFS® North Carolina Municipal Bond Fund
Portfolio structure (i)
| Top five industries (i) | ||
| Universities – Colleges | 18.9% | |
| Healthcare Revenue – Hospitals | 18.1% | |
| Utilities – Municipal Owned | 12.5% | |
| Water & Sewer Utility Revenue | 9.9% | |
| State & Local Agencies | 6.0% | |
| Credit quality (a)(i) | ||
| AAA | 7.4% | |
| AA | 57.7% | |
| A | 19.7% | |
| BBB | 11.7% | |
| BB | 0.8% | |
| B | 0.1% | |
| Other | 2.6% | |
| Portfolio facts (i) | ||
| Average Duration (d) | 9.3 | |
| Average Effective Maturity (m) | 18.2 yrs. | |
| (a) | Included in the rating categories are: debt securities, primary inverse floaters, and the underlying bonds of non-primary inverse floaters which have long-term public ratings; All rated securities are assigned a rating in accordance with the following ratings hierarchy: If a security is rated by Moody’s, then that rating is used; if not rated by Moody’s, then a Standard & Poor’s rating is used; if not rated by S&P, then a Fitch rating is used. Ratings are shown in the S&P scale and are subject to change. Assets not included in the rated securities categories are included in the “Other” category and include treasury bond futures, unrated securities, cash and cash equivalents. |
| (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. |
| (i) | For purposes of this presentation, the components include the market value of securities, and reflect the impact of the equivalent exposure of derivative positions, if applicable. These amounts may be negative from time to time. The bond component will include any accrued interest amounts, if applicable. 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 market value. |
| (m) | In determining an 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. |
Percentages are based on net assets as of 3/31/10, unless otherwise noted.
The portfolio is actively managed and current holdings may be different.
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Portfolio Composition – continued
MFS® Pennsylvania Municipal Bond Fund
Portfolio structure (i)
| Top five industries (i) | ||
| Healthcare Revenue – Hospitals | 19.0% | |
| Universities – Colleges | 16.0% | |
| General Obligations – Schools | 14.9% | |
| Water & Sewer Utility Revenue | 9.7% | |
| Single Family Housing – State | 8.1% | |
| Credit quality (a)(i) | ||
| AAA | 1.3% | |
| AA | 35.2% | |
| A | 25.7% | |
| BBB | 30.0% | |
| BB | 1.3% | |
| B | 0.2% | |
| Other | 6.3% | |
| Portfolio facts (i) | ||
| Average Duration (d) | 9.2 | |
| Average Effective Maturity (m) | 18.0 yrs. | |
MFS® South Carolina Municipal Bond Fund
Portfolio structure (i)
| Top five industries (i) | ||
| Healthcare Revenue – Hospitals | 19.6% | |
| Water & Sewer Utility Revenue | 16.1% | |
| Universities – Colleges | 11.9% | |
| Utilities – Municipal Owned | 10.8% | |
| General Obligations – General Purpose | 6.4% | |
| Credit quality (a)(i) | ||
| AAA | 7.0% | |
| AA | 37.6% | |
| A | 29.0% | |
| BBB | 18.0% | |
| BB | 0.5% | |
| B | 1.0% | |
| Other | 6.9% | |
| Portfolio facts (i) | ||
| Average Duration (d) | 8.9 | |
| Average Effective Maturity (m) | 19.3 yrs. | |
MFS® Tennessee Municipal Bond Fund
Portfolio structure (i)
| Top five industries (i) | ||
| Healthcare Revenue – Hospitals | 19.4% | |
| State & Local Agencies | 13.3% | |
| Utilities – Municipal Owned | 13.1% | |
| Water & Sewer Utility Revenue | 12.9% | |
| Single Family Housing – State | 10.7% | |
| Credit quality (a)(i) | ||
| AAA | 4.6% | |
| AA | 60.2% | |
| A | 14.9% | |
| BBB | 13.4% | |
| BB | 1.2% | |
| B | 0.7% | |
| Other | 5.0% | |
| Portfolio facts (i) | ||
| Average Duration (d) | 9.6 | |
| Average Effective Maturity (m) | 18.6 yrs. | |
| (a) | Included in the rating categories are: debt securities, primary inverse floaters, and the underlying bonds of non-primary inverse floaters which have long-term public ratings; All rated securities are assigned a rating in accordance with the following ratings hierarchy: If a security is rated by Moody’s, then that rating is used; if not rated by Moody’s, then a Standard & Poor’s rating is used; if not rated by S&P, then a Fitch rating is used. Ratings are shown in the S&P scale and are subject to change. Assets not included in the rated securities categories are included in the “Other” category and include treasury bond futures, unrated securities, cash and cash equivalents. |
| (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. |
| (i) | For purposes of this presentation, the components include the market value of securities, and reflect the impact of the equivalent exposure of derivative positions, if applicable. These amounts may be negative from time to time. The bond component will include any accrued interest amounts, if applicable. 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 market value. |
| (m) | In determining an 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. |
Percentages are based on net assets as of 3/31/10, unless otherwise noted.
The portfolio is actively managed and current holdings may be different.
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Portfolio Composition – continued
MFS® Virginia Municipal Bond Fund
Portfolio structure (i)
| Top five industries (i) | ||
| Water & Sewer Utility Revenue | 21.4% | |
| Healthcare Revenue – Hospitals | 18.0% | |
| State & Local Agencies | 13.9% | |
| Single Family Housing – State | 6.6% | |
| Utilities – Municipal Owned | 6.1% | |
| Credit quality (a)(i) | ||
| AAA | 18.4% | |
| AA | 35.8% | |
| A | 24.3% | |
| BBB | 15.5% | |
| BB | 2.6% | |
| B | 0.5% | |
| Other | 2.9% | |
| Portfolio facts (i) | ||
| Average Duration (d) | 9.6 | |
| Average Effective Maturity (m) | 19.3 yrs. | |
MFS® West Virginia Municipal Bond Fund
Portfolio structure (i)
| Top five industries (i) | ||
| State & Local Agencies | 19.0% | |
| Universities – Colleges | 15.4% | |
| Water & Sewer Utility Revenue | 14.3% | |
General Obligations – General Purpose | 14.0% | |
| Healthcare Revenue – Hospitals | 13.1% | |
| Credit quality (a)(i) | ||
| AAA | 6.9% | |
| AA | 15.0% | |
| A | 40.2% | |
| BBB | 23.9% | |
| BB | 1.1% | |
| B | 0.5% | |
| Other | 12.4% | |
| Portfolio facts (i) | ||
| Average Duration (d) | 8.8 | |
| Average Effective Maturity (m) | 17.0 yrs. | |
| (a) | Included in the rating categories are: debt securities, primary inverse floaters, and the underlying bonds of non-primary inverse floaters which have long-term public ratings; All rated securities are assigned a rating in accordance with the following ratings hierarchy: If a security is rated by Moody’s, then that rating is used; if not rated by Moody’s, then a Standard & Poor’s rating is used; if not rated by S&P, then a Fitch rating is used. Ratings are shown in the S&P scale and are subject to change. Assets not included in the rated securities categories are included in the “Other” category and include treasury bond futures, unrated securities, cash and cash equivalents. |
| (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. |
| (i) | For purposes of this presentation, the components include the market value of securities, and reflect the impact of the equivalent exposure of derivative positions, if applicable. These amounts may be negative from time to time. The bond component will include any accrued interest amounts, if applicable. 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 market value. |
| (m) | In determining an 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. |
Percentages are based on net assets as of 3/31/10, unless otherwise noted.
The portfolio is actively managed and current holdings may be different.
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Summary of Results
During the reporting period, Class A shares, at net asset value, of the Mississippi, New York, Pennsylvania, South Carolina, Tennessee, Virginia, and West Virginia funds outperformed the Barclays Capital Municipal Bond Index. The Class A shares, at net asset value, of the North Carolina fund underperformed the benchmark during the same period. For detailed performance information, please see the Performance Summary section of this report.
Market Environment
After having suffered through one of the largest and most concentrated downturns since the 1930s, most asset markets staged a remarkable rebound during the reporting period. Just prior to the beginning of the period, the fallout from a series of tumultuous financial events pushed global equity and credit markets to their lowest points during the crisis. Not only did Europe and Japan fall into very deep recessions, but an increasingly powerful engine of global growth – emerging markets – also contracted almost across the board. The subsequent recovery in global activity has been similarly synchronized, led importantly by emerging Asian economies, but broadening to include most of the global economy to varying degrees. Primary drivers of the recovery included an unwinding of the inventory destocking that took place earlier, as well as massive fiscal and monetary stimulus.
During the early part of the reporting period, with the policy rate having been cut almost to 0%, the Fed continued to use its new lending facilities to alleviate ever-tightening credit markets. On the fiscal front, the U.S. Treasury designed and began implementing a massive fiscal stimulus package. As inflationary concerns diminished in the face of global deleveraging and equity and credit markets deteriorated more sharply, central banks around the world also cut interest rates dramatically. Early in the period, as several central banks had already approached their lower bound on policy rates, some central banks were implementing quantitative easing as a means to further loosen monetary policy to offset the continuing fall in global economic activity.
However, by the middle of the period, there were ever-broadening signs that the global macroeconomic deterioration had passed, which caused the subsequent rise in asset valuations. As most asset prices rebounded during the period and the demand for liquidity waned, the debate concerning the existence of asset bubbles and the need for monetary exit strategies had begun, creating added uncertainty regarding the forward path of policy rates. Nonetheless, risky-asset valuation generally hit secular highs by the end of the period.
The municipal bond market ended this twelve month period substantially stronger than where it began with high-grade and high-yield bond index prices sharply higher over the previous year. With low money market yields, mutual fund inflows were strong and consistent. Additionally, the Build America Bond program gained significant traction and effectively reduced new issue supply of municipals.
At the end of March, 2009, yields on AAA-rated municipals were 137% of comparable maturity U.S. Treasury yields. While well off from its highs of over 200%, this ratio rallied further throughout the trailing twelve months settling at 89% on March 31, 2010. Additionally, spreads between high-grade municipals and high-yield municipals continued to tighten throughout the year. The highest returns were generally in the lower-rated securities as investors looked broadly to add risk with little opportunity to execute that strategy in the primary market due to limited high yield supply.
Factors Affecting Performance
Allocation of credit quality was a major contributing factor to positive relative performance. For all funds except the North Carolina fund, a greater exposure to “BBB” rated (r) and below-investment-grade securities, and the resulting underweighted position in bonds rated higher than “BBB”, boosted relative results. Bonds within the lower-quality sectors outperformed higher-quality issues over the reporting period as investors appeared to be recovering their appetite for risk in an improving economy. The North Carolina fund generally held higher-quality municipal bonds than the broad index as the supply of lower-quality bonds within the state was limited.
The funds’ longer duration (d) relative to the benchmark also bolstered relative results as yields generally fell over the reporting period due, in part, to improved economic conditions, stronger cash flows into municipal bond funds, and lower traditional municipal issuance as a result of the higher issuance of tax credit Build America Bonds. The funds’ yield curve (y) positioning, particularly a greater exposure to bonds with maturities of 11 to 14 years, also enhanced relative returns as this area of the curve performed well relative to the overall benchmark.
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Management Review – continued
Among the industry sectors, health care and housing were notable contributors to relative performance. The health care sector provided significant positive relative returns for all funds. The housing sector helped all funds except the Mississippi and New York funds, where the effect was neutral. On the negative side, although the credit-enhanced bond sector benefited the South Carolina and West Virginia funds, it significantly held back results for the Tennessee and Virginia funds. A lesser exposure to the tobacco sector hurt relative performance for all funds as this sector outperformed the benchmark over the reporting period.
Respectfully,
Michael Dawson
Portfolio Manager
| (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. |
| (r) | Bonds rated “BBB”, “Baa”, or higher are considered investment grade; bonds rated “BB”, “Ba”, or below are considered non-investment grade. The primary source for bond quality ratings is Moody’s Investors Service. If not available, ratings by Standard & Poor’s are used, else ratings by Fitch, Inc. For securities which are not rated by any of the three 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. |
The views expressed in this report are those of the portfolio manager 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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PERFORMANCE SUMMARY THROUGH 3/31/10
The following charts illustrate a representative class of each fund’s historical performance in comparison to its benchmark(s). Performance results include the deduction of the maximum applicable sales charge and reflect the percentage change in net asset value, including reinvestment of dividends and capital gains distributions. Each fund’s results have been compared to the Barclays Capital Municipal Bond Index, a market capitalization-weighted index that measures the performance of the tax-exempt bond market. However, while this index is considered the benchmark for the performance of municipal bond funds, it is comprised of municipal bonds issued nationwide, while each of the fund is limited to investing in the bonds of a particular state. The performance of other share classes will be greater than or less than that of the class depicted below. Benchmarks are unmanaged and may not be invested in directly. Benchmark returns do not reflect sales charges, commissions or expenses. (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.
MFS® Mississippi Municipal Bond Fund
Growth of a Hypothetical $10,000 Investment
MFS® Mississippi Municipal Bond Fund
Total Returns through 3/31/10
Average annual without sales charge
| Share class | Class inception date | 1-yr | 5-yr | 10-yr | ||||||||
| A | 8/06/92 | 10.10% | 4.47% | 5.26% | ||||||||
| B | 9/07/93 | 9.22% | 3.67% | 4.44% | ||||||||
| Comparative benchmark | ||||||||||||
| Barclays Capital Municipal Bond Index (f) | 9.69% | 4.58% | 5.58% | |||||||||
| Average annual with sales charge | ||||||||||||
A With Initial Sales Charge (4.75%) | 4.87% | 3.46% | 4.75% | |||||||||
B With CDSC (Declining over six years from 4% to 0%) (x) | 5.22% | 3.32% | 4.44% | |||||||||
CDSC – Contingent Deferred Sales Charge.
| (f) | Source: FactSet Research Systems Inc. |
| (x) | Assuming redemption at the end of the applicable period. |
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Performance Summary – continued
MFS® New York Municipal Bond Fund
Growth of a Hypothetical $10,000 Investment
MFS® New York Municipal Bond Fund
Total Returns through 3/31/10
Average annual without sales charge
| Share class | Class inception date | 1-yr | 5-yr | 10-yr | Life (t) | |||||||||
| A | 6/06/88 | 11.53% | 4.18% | 5.19% | N/A | |||||||||
| B | 9/07/93 | 10.73% | 3.40% | 4.39% | N/A | |||||||||
| C | 12/11/00 | 10.70% | 3.40% | N/A | 4.04% | |||||||||
| Comparative benchmark | ||||||||||||||
| Barclays Capital Municipal Bond Index (f) | 9.69% | 4.58% | 5.58% | N/A | ||||||||||
| Average annual with sales charge | ||||||||||||||
A With Initial Sales Charge (4.75%) | 6.23% | 3.17% | 4.68% | N/A | ||||||||||
B With CDSC (Declining over six years from 4% to 0%) (x) | 6.73% | 3.06% | 4.39% | N/A | ||||||||||
C With CDSC (1% for 12 months) (x) | 9.70% | 3.40% | N/A | 4.04% | ||||||||||
CDSC – Contingent Deferred Sales Charge.
| (f) | Source: FactSet Research Systems Inc. |
| (t) | For the period from the class inception date through the stated period end (for those share classes with less than 10 years of performance history). No comparative benchmark performance information is provided for “life” periods. (See Notes to Performance Summary.) |
| (x) | Assuming redemption at the end of the applicable period. |
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Performance Summary – continued
MFS® North Carolina Municipal Bond Fund
Growth of a Hypothetical $10,000 Investment
MFS® North Carolina Municipal Bond Fund
Total Returns through 3/31/10
Average annual without sales charge
| Share class | Class inception date | 1-yr | 5-yr | 10-yr | ||||||||
| A | 10/31/84 | 9.55% | 4.10% | 5.03% | ||||||||
| B | 9/07/93 | 8.65% | 3.38% | 4.33% | ||||||||
| C | 1/03/94 | 8.63% | 3.40% | 4.33% | ||||||||
| Comparative benchmark | ||||||||||||
| Barclays Capital Municipal Bond Index (f) | 9.69% | 4.58% | 5.58% | |||||||||
| Average annual with sales charge | ||||||||||||
A With Initial Sales Charge (4.75%) | 4.35% | 3.09% | 4.52% | |||||||||
B With CDSC (Declining over six years from 4% to 0%) (x) | 4.65% | 3.04% | 4.33% | |||||||||
C With CDSC (1% for 12 months) (x) | 7.63% | 3.40% | 4.33% | |||||||||
CDSC – Contingent Deferred Sales Charge.
| (f) | Source: FactSet Research Systems Inc. |
| (x) | Assuming redemption at the end of the applicable period. |
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Performance Summary – continued
MFS® Pennsylvania Municipal Bond Fund
Growth of a Hypothetical $10,000 Investment
MFS® Pennsylvania Municipal Bond Fund
Total Returns through 3/31/10
Average annual without sales charge
| Share class | Class inception date | 1-yr | 5-yr | 10-yr | ||||||||
| A | 2/01/93 | 11.49% | 4.10% | 5.31% | ||||||||
| B | 9/07/93 | 10.51% | 3.29% | 4.48% | ||||||||
| Comparative benchmark | ||||||||||||
| Barclays Capital Municipal Bond Index (f) | 9.69% | 4.58% | 5.58% | |||||||||
| Average annual with sales charge | ||||||||||||
A With Initial Sales Charge (4.75%) | 6.20% | 3.09% | 4.80% | |||||||||
B With CDSC (Declining over six years from 4% to 0%) (x) | 6.51% | 2.94% | 4.48% | |||||||||
CDSC – Contingent Deferred Sales Charge.
| (f) | Source: FactSet Research Systems Inc. |
| (x) | Assuming redemption at the end of the applicable period. |
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Performance Summary – continued
MFS® South Carolina Municipal Bond Fund
Growth of a Hypothetical $10,000 Investment
MFS® South Carolina Municipal Bond Fund
Total Returns through 3/31/10
Average annual without sales charge
| Share class | Class inception date | 1-yr | 5-yr | 10-yr | ||||||||
| A | 10/31/84 | 10.77% | 3.82% | 5.01% | ||||||||
| B | 9/07/93 | 9.95% | 3.13% | 4.32% | ||||||||
| Comparative benchmark | ||||||||||||
| Barclays Capital Municipal Bond Index (f) | 9.69% | 4.58% | 5.58% | |||||||||
| Average annual with sales charge | ||||||||||||
A With Initial Sales Charge (4.75%) | 5.51% | 2.82% | 4.50% | |||||||||
B With CDSC (Declining over six years from 4% to 0%) (x) | 5.95% | 2.78% | 4.32% | |||||||||
| CDSC | – Contingent Deferred Sales Charge. |
| (f) | Source: FactSet Research Systems Inc. |
| (x) | Assuming redemption at the end of the applicable period. |
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Performance Summary – continued
MFS® Tennessee Municipal Bond Fund
Growth of a Hypothetical $10,000 Investment
MFS® Tennessee Municipal Bond Fund
Total Returns through 3/31/10
Average annual without sales charge
| Share class | Class inception date | 1-yr | 5-yr | 10-yr | ||||||||
| A | 8/12/88 | 10.46% | 3.99% | 4.96% | ||||||||
| B | 9/07/93 | 9.65% | 3.30% | 4.27% | ||||||||
| Comparative benchmark | ||||||||||||
| Barclays Capital Municipal Bond Index (f) | 9.69% | 4.58% | 5.58% | |||||||||
| Average annual with sales charge | ||||||||||||
A With Initial Sales Charge (4.75%) | 5.21% | 2.99% | 4.45% | |||||||||
B With CDSC (Declining over six years from 4% to 0%) (x) | 5.65% | 2.95% | 4.27% | |||||||||
CDSC – Contingent Deferred Sales Charge.
| (f) | Source: FactSet Research Systems Inc. |
| (x) | Assuming redemption at the end of the applicable period. |
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Performance Summary – continued
MFS® Virginia Municipal Bond Fund
Growth of a Hypothetical $10,000 Investment
MFS® Virginia Municipal Bond Fund
Total Returns through 3/31/10
Average annual without sales charge
| Share class | Class inception date | 1-yr | 5-yr | 10-yr | ||||||||
| A | 10/31/84 | 11.34% | 4.15% | 5.06% | ||||||||
| B | 9/07/93 | 10.62% | 3.47% | 4.37% | ||||||||
| C | 1/03/94 | 10.50% | 3.45% | 4.36% | ||||||||
| Comparative benchmark | ||||||||||||
| Barclays Capital Municipal Bond Index (f) | 9.69% | 4.58% | 5.58% | |||||||||
| Average annual with sales charge | ||||||||||||
A With Initial Sales Charge (4.75%) | 6.05% | 3.14% | 4.55% | |||||||||
B With CDSC (Declining over six years from 4% to 0%) (x) | 6.62% | 3.13% | 4.37% | |||||||||
C With CDSC (1% for 12 months) (x) | 9.50% | 3.45% | 4.36% | |||||||||
CDSC – Contingent Deferred Sales Charge.
| (f) | Source: FactSet Research Systems Inc. |
| (x) | Assuming redemption at the end of the applicable period. |
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Performance Summary – continued
MFS® West Virginia Municipal Bond Fund
Growth of a Hypothetical $10,000 Investment
MFS® West Virginia Municipal Bond Fund
Total Returns through 3/31/10
Average annual without sales charge
| Share class | Class inception date | 1-yr | 5-yr | 10-yr | ||||||||
| A | 10/31/84 | 10.22% | 3.43% | 4.68% | ||||||||
| B | 9/07/93 | 9.31% | 2.72% | 4.00% | ||||||||
| Comparative benchmark | ||||||||||||
| Barclays Capital Municipal Bond Index (f) | 9.69% | 4.58% | 5.58% | |||||||||
| Average annual with sales charge | ||||||||||||
A With Initial Sales Charge (4.75%) | 4.98% | 2.43% | 4.18% | |||||||||
B With CDSC (Declining over six years from 4% to 0%) (x) | 5.31% | 2.38% | 4.00% | |||||||||
CDSC – Contingent Deferred Sales Charge.
| (f) | Source: FactSet Research Systems Inc. |
| (x) | Assuming redemption at the end of the applicable period. |
Notes to Performance Summary
Average annual total return represents the average annual change in value for each share class for the periods presented. Life returns are presented where the share class has less than 10 years of performance history and represent the average annual total return from the class inception date to the stated period end date. As a fund’s share classes may have different inception dates, the life returns may represent different time periods and may not be comparable. As a result, no comparative benchmark performance information is provided for life periods.
Performance results reflect any applicable expense subsidies and waivers in effect during the periods shown. Without such subsidies and waivers each fund’s performance results would be less favorable. Please see the prospectus and financial statements for complete details.
A portion of income may be subject to state, federal, and/or alternative minimum tax. Capital gains, if any, are subject to a capital gains tax.
From time to time the funds may receive proceeds from litigation settlements, without which performance would be lower.
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Fund expenses borne by the shareholders during the period, October 1, 2009 through March 31, 2010
As a shareholder of the funds, you incur two types of costs: (1) transaction costs, including sales charges (loads) on certain purchase or redemption payments, and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the funds and to compare these costs with the ongoing costs of investing in other mutual funds.
These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period October 1, 2009 through March 31, 2010.
Actual Expenses
The first line for each share class in the following tables 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 tables provides information about hypothetical account values and hypothetical expenses based on each fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not each 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 each 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 tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads). Therefore, the second line for each share class in the tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
MFS® MISSISSIPPI MUNICIPAL BOND FUND
| Share Class | Annualized Expense Ratio | Beginning Account Value 10/01/09 | Ending Account Value 3/31/10 | Expenses Paid During Period (p) 10/01/09-3/31/10 | ||||||
| A | Actual | 0.79% | $1,000.00 | $1,004.46 | $3.95 | |||||
| Hypothetical (h) | 0.79% | $1,000.00 | $1,020.99 | $3.98 | ||||||
| B | Actual | 1.46% | $1,000.00 | $1,001.12 | $7.28 | |||||
| Hypothetical (h) | 1.46% | $1,000.00 | $1,017.65 | $7.34 |
MFS® NEW YORK MUNICIPAL BOND FUND
| Share Class | Annualized Expense Ratio | Beginning Account Value 10/01/09 | Ending Account Value 3/31/10 | Expenses Paid During Period (p) 10/01/09-3/31/10 | ||||||
| A | Actual | 0.88% | $1,000.00 | $1,005.54 | $4.40 | |||||
| Hypothetical (h) | 0.88% | $1,000.00 | $1,020.54 | $4.43 | ||||||
| B | Actual | 1.63% | $1,000.00 | $1,001.81 | $8.14 | |||||
| Hypothetical (h) | 1.63% | $1,000.00 | $1,016.80 | $8.20 | ||||||
| C | Actual | 1.63% | $1,000.00 | $1,001.76 | $8.13 | |||||
| Hypothetical (h) | 1.63% | $1,000.00 | $1,016.80 | $8.20 |
| (h) | 5% class return per year before expenses. |
| (p) | Expenses paid is equal to each class’ annualized expense ratio, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the period, divided by the number of days in the year. Expenses paid do not include any applicable sales charges (loads). If these transaction costs had been included, your costs would have been higher. |
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Expense Tables – continued
MFS® NORTH CAROLINA MUNICIPAL BOND FUND
| Share Class | Annualized Expense Ratio | Beginning Account Value 10/01/09 | Ending Account Value 3/31/10 | Expenses Paid During Period (p) 10/01/09-3/31/10 | ||||||
| A | Actual | 0.86% | $1,000.00 | $999.66 | $4.29 | |||||
| Hypothetical (h) | 0.86% | $1,000.00 | $1,020.64 | $4.33 | ||||||
| B | Actual | 1.61% | $1,000.00 | $995.92 | $8.01 | |||||
| Hypothetical (h) | 1.61% | $1,000.00 | $1,016.90 | $8.10 | ||||||
| C | Actual | 1.61% | $1,000.00 | $995.88 | $8.01 | |||||
| Hypothetical (h) | 1.61% | $1,000.00 | $1,016.90 | $8.10 |
MFS® PENNSYLVANIA MUNICIPAL BOND FUND
| Share Class | Annualized Expense Ratio | Beginning Account Value 10/01/09 | Ending Account Value 3/31/10 | Expenses Paid During Period (p) 10/01/09-3/31/10 | ||||||
| A | Actual | 0.81% | $1,000.00 | $1,008.28 | $4.06 | |||||
| Hypothetical (h) | 0.81% | $1,000.00 | $1,020.89 | $4.08 | ||||||
| B | Actual | 1.57% | $1,000.00 | $1,003.44 | $7.84 | |||||
| Hypothetical (h) | 1.57% | $1,000.00 | $1,017.10 | $7.90 |
MFS® SOUTH CAROLINA MUNICIPAL BOND FUND
| Share Class | Annualized Expense Ratio | Beginning Account Value 10/01/09 | Ending Account Value 3/31/10 | Expenses Paid During Period (p) 10/01/09-3/31/10 | ||||||
| A | Actual | 0.90% | $1,000.00 | $1,009.50 | $4.51 | |||||
| Hypothetical (h) | 0.90% | $1,000.00 | $1,020.44 | $4.53 | ||||||
| B | Actual | 1.65% | $1,000.00 | $1,006.59 | $8.25 | |||||
| Hypothetical (h) | 1.65% | $1,000.00 | $1,016.70 | $8.30 |
MFS® TENNESSEE MUNICIPAL BOND FUND
| Share Class | Annualized Expense Ratio | Beginning Account Value 10/01/09 | Ending Account Value 3/31/10 | Expenses Paid During Period (p) 10/01/09-3/31/10 | ||||||
| A | Actual | 0.92% | $1,000.00 | $1,007.07 | $4.60 | |||||
| Hypothetical (h) | 0.92% | $1,000.00 | $1,020.34 | $4.63 | ||||||
| B | Actual | 1.67% | $1,000.00 | $1,003.33 | $8.34 | |||||
| Hypothetical (h) | 1.67% | $1,000.00 | $1,016.60 | $8.40 |
| (h) | 5% class return per year before expenses. |
| (p) | Expenses paid is equal to each class’ annualized expense ratio, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the period, divided by the number of days in the year. Expenses paid do not include any applicable sales charges (loads). If these transaction costs had been included, your costs would have been higher. |
16
Table of Contents
Expense Tables – continued
MFS® VIRGINIA MUNICIPAL BOND FUND
| Share Class | Annualized Expense Ratio | Beginning Account Value 10/01/09 | Ending Account Value 3/31/10 | Expenses Paid During Period (p) 10/01/09-3/31/10 | ||||||
| A | Actual | 0.87% | $1,000.00 | $1,007.30 | $4.35 | |||||
| Hypothetical (h) | 0.87% | $1,000.00 | $1,020.59 | $4.38 | ||||||
| B | Actual | 1.62% | $1,000.00 | $1,004.44 | $8.10 | |||||
| Hypothetical (h) | 1.62% | $1,000.00 | $1,016.85 | $8.15 | ||||||
| C | Actual | 1.62% | $1,000.00 | �� | $1,003.52 | $8.09 | ||||
| Hypothetical (h) | 1.62% | $1,000.00 | $1,016.85 | $8.15 |
MFS® WEST VIRGINIA MUNICIPAL BOND FUND
| Share Class | Annualized Expense Ratio | Beginning Account Value 10/01/09 | Ending Account Value 3/31/10 | Expenses Paid During Period (p) 10/01/09-3/31/10 | ||||||
| A | Actual | 0.90% | $1,000.00 | $1,003.54 | $4.50 | |||||
| Hypothetical (h) | 0.90% | $1,000.00 | $1,020.44 | $4.53 | ||||||
| B | Actual | 1.65% | $1,000.00 | $998.91 | $8.22 | |||||
| Hypothetical (h) | 1.65% | $1,000.00 | $1,016.70 | $8.30 |
| (h) | 5% class return per year before expenses. |
| (p) | Expenses paid is equal to each class’ annualized expense ratio, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the period, divided by the number of days in the year. Expenses paid do not include any applicable sales charges (loads). If these transaction costs had been included, your costs would have been higher. |
17
Table of Contents
3/31/10
MFS® MISSISSIPPI MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.
| Municipal Bonds - 97.2% | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Airport & Port Revenue - 1.4% | ||||||
| Jackson, MS, Municipal Airport Authority, Airport Rev., “A”, AMBAC, 5%, 2031 | $ | 1,510,000 | $ | 1,533,849 | ||
| General Obligations - General Purpose - 7.6% | ||||||
| Commonwealth of Puerto Rico, “A”, 5.25%, 2027 | $ | 455,000 | $ | 451,396 | ||
| Commonwealth of Puerto Rico, “A”, 5.375%, 2033 | 220,000 | 215,831 | ||||
| Commonwealth of Puerto Rico, “A”, 6%, 2038 | 365,000 | 378,388 | ||||
| Commonwealth of Puerto Rico, Public Improvement, FGIC, 5.5%, 2016 | 3,220,000 | 3,458,312 | ||||
| Hinds County, MS, NATL, 6.25%, 2011 | 1,285,000 | 1,350,625 | ||||
| Mississippi Development Bank Special Obligations (Jackson, Mississippi), AGM, 5.25%, 2020 | 620,000 | 695,770 | ||||
| Puerto Rico Public Buildings Authority Rev., Guaranteed (Government Facilities), “I”, 5.25%, 2033 | 410,000 | 395,568 | ||||
| Puerto Rico Public Buildings Authority Rev., Guaranteed, “M”, 6.25%, 2023 | 335,000 | 367,649 | ||||
| Puerto Rico Public Buildings Authority Rev., Guaranteed, “M”, 6.25%, 2031 | 370,000 | 411,921 | ||||
| State of California, 6%, 2039 | 700,000 | 738,528 | ||||
| $ | 8,463,988 | |||||
| General Obligations - Improvement - 0.4% | ||||||
| Guam Government, “A”, 6.75%, 2029 | $ | 35,000 | $ | 37,288 | ||
| Guam Government, “A”, 5.25%, 2037 | 155,000 | 133,457 | ||||
| Guam Government, “A”, 7%, 2039 | 40,000 | 42,886 | ||||
| Mississippi Development Bank Special Obligation (Greenville, MS Project), 5%, 2027 | 235,000 | 195,254 | ||||
| $ | 408,885 | |||||
| General Obligations - Schools - 3.2% | ||||||
| Biloxi, MS, Public School District, NATL, 5%, 2021 | $ | 1,000,000 | $ | 1,045,330 | ||
| Jackson, MS, Public School District, “B”, AMBAC, 5.75%, 2010 (c) | 1,000,000 | 1,026,200 | ||||
| Jackson, MS, Public School District, “B”, AMBAC, 0%, 2022 | 2,000,000 | 1,042,340 | ||||
| Jackson, MS, Public School District, “B”, AMBAC, 0%, 2023 | 1,000,000 | 488,440 | ||||
| $ | 3,602,310 | |||||
| Healthcare Revenue - Hospitals - 14.0% | ||||||
| Corinth & Alcorn County, MS, Hospital Rev. (Magnolia Regional Health Center), 5.5%, 2021 | $ | 375,000 | $ | 365,963 | ||
| Gulfport, MS, Hospital Facilities Rev. (Memorial Hospital), NATL, 6.125%, 2015 | 2,250,000 | 2,250,495 | ||||
| Gulfport, MS, Hospital Facilities Rev. (Memorial Hospital), NATL, 6.2%, 2018 | 1,000,000 | 1,002,150 | ||||
| Gulfport, MS, Hospital Facilities Rev. (Memorial Hospital), 5.75%, 2031 | 500,000 | 502,850 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| Healthcare Revenue - Hospitals - continued | ||||||
| Hinds County, MS, Rev. (Methodist Hospital & Rehabilitation), AMBAC, 5.6%, 2012 | $ | 1,110,000 | $ | 1,114,107 | ||
| Illinois Finance Authority Rev. (Central Dupage Health), 5%, 2027 | 355,000 | 359,026 | ||||
| Illinois Finance Authority Rev. (Resurrection Health), 6.125%, 2025 | 105,000 | 106,343 | ||||
| Illinois Finance Authority Rev. (Silver Cross Hospital & Medical Centers), 7%, 2044 | 325,000 | 337,308 | ||||
| Indiana Finance Authority Rev. (Sisters of St. Francis Health Services), 5.375%, 2032 | 705,000 | 728,674 | ||||
| Jefferson Parish, LA, Hospital Rev., Hospital Service District No. 1 (West Jefferson Medical Center), “B”, AGM, 5.25%, 2028 | 170,000 | 175,556 | ||||
| Louisville & Jefferson County, KY, Metropolitan Government Healthcare Systems Rev. (Norton Healthcare, Inc.), 5.25%, 2036 | 320,000 | 306,330 | ||||
| Mississippi Hospital Equipment & Facilities Authority Rev. (Baptist Memorial Healthcare), “B-1”, 5%, 2024 | 1,000,000 | 1,022,130 | ||||
| Mississippi Hospital Equipment & Facilities Authority Rev. (Delta Regional Medical Center), FHA, 5%, 2035 | 1,000,000 | 1,003,370 | ||||
| Mississippi Hospital Equipment & Facilities Authority Rev. (Forrest County General Hospital), AGM, 5.625%, 2011 (c) | 1,000,000 | 1,047,640 | ||||
| Mississippi Hospital Equipment & Facilities Authority Rev. (Forrest County General Hospital), 5.25%, 2029 | 1,000,000 | 996,370 | ||||
| Mississippi Hospital Equipment & Facilities Authority Rev. Refunding & Improvement, Hospital South Central, 5.25%, 2031 | 500,000 | 443,225 | ||||
| Mississippi Hospital Equipment & Facilities Authority Rev., Refunding & Improvement, Southwest Regional Medical Center, 5.5%, 2019 | 250,000 | 245,315 | ||||
| Mississippi Hospital Equipment & Facilities Authority, Refunding & Improvement, Southwest Regional Medical Center, 5.75%, 2023 | 250,000 | 240,278 | ||||
| New Hampshire Business Finance Authority Rev. (Elliot Hospital Obligated Group), “A”, 6%, 2027 | 215,000 | 217,946 | ||||
| New Hampshire Business Finance Authority Rev. (Elliot Hospital Obligated Group), “A”, 6.125%, 2039 | 550,000 | 552,547 | ||||
| South Broward, FL, Hospital District Rev., 5%, 2036 | 485,000 | 486,261 | ||||
| St. Louis Park, MN, Health Care Facilities Rev. (Nicollett Health Services), 5.75%, 2039 | 520,000 | 517,031 | ||||
| St. Petersburg, FL, Health Facilities Authority Rev., 6.5%, 2039 | 135,000 | 146,009 | ||||
| Tarrant County, TX, Cultural Education Facilities Finance Corp. (Scott & White Memorial Hospital), “A”, 5.5%, 2031 | 180,000 | 189,720 | ||||
18
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Healthcare Revenue - Hospitals - continued | ||||||
| Washington Health Care Facilities Authority Rev. (Central Washington Health Services), 6.75%, 2029 | $ | 75,000 | $ | 79,755 | ||
| Washington Health Care Facilities Authority Rev. (Central Washington Health Services), 7%, 2039 | 185,000 | 198,355 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (ProHealth Care, Inc. Obligated Group), 6.625%, 2039 | 640,000 | 688,506 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (Wheaton Franciscan Services), 5.25%, 2031 | 430,000 | 394,813 | ||||
| $ | 15,718,073 | |||||
| Industrial Revenue - Environmental Services - 0.2% | ||||||
| Mississippi Business Finance Corp. (Solid Waste Management, Inc.), 4.4%, 2027 (b) | $ | 250,000 | $ | 255,950 | ||
| Industrial Revenue - Other - 0.6% | ||||||
| Mississippi Business Finance Corp. (Northrop Grumman Ship Systems), 4.55%, 2028 | $ | 500,000 | $ | 456,990 | ||
| Virgin Islands Public Finance Authority, Refinery Facilities Rev. (Hovensa Coker Project), 5.875%, 2022 | 210,000 | 209,525 | ||||
| $ | 666,515 | |||||
| Industrial Revenue - Paper - 1.4% | ||||||
| Lowndes County, MS, Solid Waste Disposal & Pollution Control Rev. (Weyerhaeuser Co.), 6.8%, 2022 | $ | 750,000 | $ | 820,253 | ||
| Warren County, MS, Environmental Improvement Rev. (International Paper Co.), “A”, 4.4%, 2015 | 750,000 | 728,430 | ||||
| $ | 1,548,683 | |||||
| Miscellaneous Revenue - Entertainment & Tourism - 0.7% | ||||||
| Mississippi Development Bank, Special Obligation (Diamond Lakes Utilities), 6.25%, 2017 | $ | 850,000 | $ | 793,977 | ||
| Multi-Family Housing Revenue - 1.0% | ||||||
| Mississippi Home Corp. Rev. (Kirkwood Apartments Project), 6.8%, 2037 | $ | 150,000 | $ | 98,714 | ||
| Mississippi Home Corp., Multifamily Rev. (Providence Place of Sanitobia LLC), GNMA, 5.35%, 2048 | 1,000,000 | 994,120 | ||||
| $ | 1,092,834 | |||||
| Sales & Excise Tax Revenue - 1.9% | ||||||
| Massachusetts Bay Transportation Authority, Sales Tax Rev., “A-1”, 5.25%, 2029 | $ | 750,000 | $ | 859,613 | ||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., 5.25%, 2057 | 720,000 | 713,722 | ||||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “A”, 0%, 2033 | 1,085,000 | 245,232 | ||||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “A”, 5.375%, 2039 | 315,000 | 320,383 | ||||
| $ | 2,138,950 | |||||
| Issuer | Shares/Par | Value ($) | ||||
| Single Family Housing - Other - 0.8% | ||||||
| Mississippi Business Finance Corp., Rev. (Statesman Housing LLC Project), “A”, 4.75%, 2039 | $ | 1,000,000 | $ | 915,980 | ||
| Single Family Housing - State - 3.4% | ||||||
| Mississippi Home Corp. Rev., Single Family Mortgage Rev., “A-2 “, GNMA, 5.3%, 2034 | $ | 250,000 | $ | 255,040 | ||
| Mississippi Home Corp. Rev., Single Family Rev., “A”, GNMA, 6.3%, 2031 | 130,000 | 135,665 | ||||
| Mississippi Home Corp. Rev., Single Family Rev., “A-2 “, GNMA, 5.625%, 2039 | 410,000 | 424,690 | ||||
| Mississippi Home Corp. Rev., Single Family Rev., “A-2”, GNMA, 5.3%, 2023 | 380,000 | 379,206 | ||||
| Mississippi Home Corp. Rev., Single Family Rev., “A-2”, GNMA, 6.95%, 2031 | 130,000 | 137,591 | ||||
| Mississippi Home Corp. Rev., Single Family Rev., “B”, GNMA, 5.3%, 2035 | 440,000 | 440,255 | ||||
| Mississippi Home Corp. Rev., Single Family Rev., “B-2”, GNMA, 6.375%, 2032 | 245,000 | 254,403 | ||||
| Mississippi Home Corp. Rev., Single Family Rev., “B-2”, GNMA, 6.45%, 2033 | 270,000 | 278,338 | ||||
| Mississippi Home Corp. Rev., Single Family Rev., “C”, GNMA, 4.95%, 2025 | 535,000 | 536,027 | ||||
| Mississippi Home Corp., Single Family Rev., “A-2”, GNMA, 6.5%, 2032 | 140,000 | 145,237 | ||||
| Mississippi Housing Finance Corp., Single Family Mortgage Rev., ETM, 0%, 2015 (c) | 1,000,000 | 877,600 | ||||
| $ | 3,864,052 | |||||
| State & Agency - Other - 0.9% | ||||||
| Mississippi Development Bank Special Obligations, Harrison County Mississippi Highway Construction, “N”, FGIC, 5%, 2026 | $ | 1,000,000 | $ | 1,036,210 | ||
| State & Local Agencies - 16.9% | ||||||
| California Public Works Board Lease Rev. (Various Capital Projects), “G-1”, 5.75%, 2030 | $ | 175,000 | $ | 174,998 | ||
| Lamar County, MS (Jail Project), NATL, 5.1%, 2021 | 430,000 | 439,503 | ||||
| Los Angeles, CA, Municipal Improvement Corp. Lease Rev. (Real Property), “E”, 6%, 2039 | 190,000 | 200,313 | ||||
| Mississippi Development Bank (Harrison County Coliseum), “A”, 5.25%, 2034 | 1,000,000 | 1,081,100 | ||||
| Mississippi Development Bank Special Obligation (Capital Project & Equipment Prepayment), AGM, 5%, 2028 | 1,320,000 | 1,369,368 | ||||
| Mississippi Development Bank Special Obligation (Forrest County Public Improvement Project), 5%, 2029 | 1,000,000 | 1,044,660 | ||||
| Mississippi Development Bank Special Obligation (Harrison County), “D”, ASSD GTY, 4.75%, 2028 | 1,120,000 | 1,160,678 | ||||
| Mississippi Development Bank Special Obligation (Hinds Community College), ASSD GTY, 5.375%, 2033 | 1,550,000 | 1,626,911 | ||||
19
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| State & Local Agencies - continued | ||||||
| Mississippi Development Bank Special Obligation (Jackson Public School District), AGM, 5.375%, 2028 | $ | 1,000,000 | $ | 1,070,610 | ||
| Mississippi Development Bank Special Obligation (Mississippi Highway Construction), AMBAC, 4.75%, 2035 | 1,000,000 | 1,003,140 | ||||
| Mississippi Development Bank Special Obligation (Southaven Water & Sewer System), ASSD GTY, 5%, 2029 | 750,000 | 783,945 | ||||
| Mississippi Development Bank Special Obligations (City of Jackson, MS), AMBAC, 4.375%, 2031 | 1,400,000 | 1,336,202 | ||||
| Mississippi Development Bank Special Obligations (Correctional Facilities), “A”, AMBAC, 5.125%, 2025 | 1,000,000 | 1,020,770 | ||||
| Mississippi Development Bank Special Obligations (DeSoto County Regional Utility Authority), 5.25%, 2031 | 905,000 | 909,697 | ||||
| Mississippi Development Bank Special Obligations (Mississippi, Ltd. Tax Hospital Rev.), 5.1%, 2020 | 1,000,000 | 1,020,830 | ||||
| Mississippi Development Bank Special Obligations (Natchez Mississippi Convention Center), AMBAC, 6%, 2013 (c) | 750,000 | 862,313 | ||||
| Mississippi Development Bank Special Obligations (Public Improvement Board), 5%, 2023 | 750,000 | 748,403 | ||||
| Mississippi Development Bank Special Obligations (Tunica County Building Project), AMBAC, 5%, 2026 | 1,695,000 | 1,763,885 | ||||
| Mississippi Development Bank Special Obligations (Tupelo Fairgrounds), “A”, AMBAC, 5%, 2017 | 785,000 | 796,799 | ||||
| Mississippi Development Bank Special Obligations, Madison County (Highway Construction), FGIC, 5%, 2027 | 500,000 | 517,550 | ||||
| $ | 18,931,675 | |||||
| Tax - Other - 2.1% | ||||||
| Commonwealth of Puerto Rico, Public Improvement, “B”, 6.5%, 2037 | $ | 1,250,000 | $ | 1,361,163 | ||
| Guam Government Ltd. Obligation Rev., “A”, 5.375%, 2024 | 125,000 | 129,320 | ||||
| Guam Government Ltd. Obligation Rev., “A”, 5.625%, 2029 | 40,000 | 40,969 | ||||
| Virgin Islands Public Finance Authority Rev. (Diageo Project), “A”, 6.75%, 2037 | 110,000 | 119,463 | ||||
| Virgin Islands Public Finance Authority Rev., “A”, 5.25%, 2024 | 135,000 | 137,261 | ||||
| Virgin Islands Public Finance Authority Rev., “A”, 6%, 2039 | 295,000 | 303,590 | ||||
| Virgin Islands Public Finance Authority Rev., “A-1”, 5%, 2029 | 85,000 | 82,932 | ||||
| Virgin Islands Public Finance Authority Rev., “A-1”, 5%, 2039 | 95,000 | 86,903 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| Tax - Other - continued | ||||||
| Virgin Islands Public Finance Authority Rev., “B”, 5%, 2025 | $ | 85,000 | $ | 85,382 | ||
| $ | 2,346,983 | |||||
| Tobacco - 0.7% | ||||||
| Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 5.125%, 2024 | $ | 150,000 | $ | 137,856 | ||
| Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 5.875%, 2030 | 150,000 | 126,356 | ||||
| Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 5.875%, 2047 | 190,000 | 137,877 | ||||
| Guam Economic Development Authority Tobacco Settlement, “B”, 5.5%, 2011 (c) | 350,000 | 368,834 | ||||
| $ | 770,923 | |||||
| Transportation - Special Tax - 2.2% | ||||||
| Commonwealth of Puerto Rico Highway & Transportation Authority Rev., AGM, 5.25%, 2033 | $ | 1,135,000 | $ | 1,202,691 | ||
| Mississippi Development Bank Special Obligations, Madison County (Road & Bridge), AMBAC, 5.1%, 2013 (c) | 1,175,000 | 1,307,070 | ||||
| $ | 2,509,761 | |||||
| Universities - Colleges - 18.0% | ||||||
| Alcorn State University, Educational Building Corp. Rev. (Student Housing Project), “A”, 5.125%, 2034 | $ | 1,000,000 | $ | 1,029,660 | ||
| Alcorn State University, Educational Building Corp. Rev. (Student Housing Project), “A”, 5.25%, 2039 | 920,000 | 950,986 | ||||
| Jackson State University, Educational Building Corp. Rev. (Campus Facilities), 5%, 2034 (b) | 475,000 | 493,829 | ||||
| Jackson State University, Educational Building Corp. Rev. (Campus Facilities), “A”, FGIC, 5%, 2014 (c) | 3,100,000 | 3,511,029 | ||||
| Jackson State University, Educational Building Corp. Rev. (Student Recreation Center), AMBAC, 5.125%, 2012 (c) | 750,000 | 815,955 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Massachusetts Institute of Technology), “I-1”, 5.2%, 2028 | 920,000 | 1,087,670 | ||||
| Medical Center, Educational Building Corp. Rev. (University of Mississippi Medical Center), 5%, 2034 | 1,000,000 | 1,004,310 | ||||
| Medical Center, Educational Building Corp. Rev. (University of Mississippi Medical Center), “B”, AMBAC, 5.5%, 2023 | 1,000,000 | 1,083,360 | ||||
| Mississippi State University, Educational Building Corp. Rev., AMBAC, 5.5%, 2016 | 1,000,000 | 1,039,190 | ||||
| Mississippi State University, Educational Building Corp. Rev., AMBAC, 5%, 2021 | 250,000 | 254,168 | ||||
| Mississippi State University, Educational Building Corp. Rev. (Residence Hall Construction), “A-1”, 5.25%, 2033 | 400,000 | 426,052 | ||||
| Mississippi Valley State University, Educational Building Corp. Rev., NATL, 5.5%, 2010 (c) | 890,000 | 925,191 | ||||
20
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Universities - Colleges - continued | ||||||
| New York Dormitory Authority Rev., Non-State Supported Debt (New York University), “A”, 5.25%, 2048 | $ | 875,000 | $ | 911,733 | ||
| University of California Rev., “J”, AGM, 4.5%, 2035 | 985,000 | 943,492 | ||||
| University of Mississippi, Educational Building Corp. Rev. (Residential College Project), “A”, 5%, 2033 | 1,500,000 | 1,558,845 | ||||
| University of Mississippi, Educational Building Corp. Rev. (Residential College), “C”, 4.75%, 2034 | 715,000 | 713,949 | ||||
| University of Southern Mississippi, COP (Package Facilities Project), ASSD GTY, 5.125%, 2039 | 500,000 | 495,105 | ||||
| University of Southern Mississippi, Educational Building Corp. Rev. (Athletics Facilities Improvement Project), AGM, 5%, 2034 | 750,000 | 775,605 | ||||
| University of Southern Mississippi, Educational Building Corp. Rev. (Campus Facilities Project), 5.375%, 2036 | 1,000,000 | 1,070,400 | ||||
| University of Southern Mississippi, Educational Building Corp. Rev., “B”, AGM, 5%, 2032 | 1,000,000 | 1,035,580 | ||||
| $ | 20,126,109 | |||||
| Utilities - Investor Owned - 0.6% | ||||||
| Michigan Strategic Fund Ltd. Obligation Rev. (Detroit Edison), 5.625%, 2020 | $ | 370,000 | $ | 406,364 | ||
| Michigan Strategic Fund Ltd. Obligation Rev. (Detroit Edison), 5.5%, 2029 (b) | 265,000 | 295,117 | ||||
| $ | 701,481 | |||||
| Utilities - Municipal Owned - 7.3% | ||||||
| Guam Power Authority Rev., “A”, AMBAC, 5.25%, 2013 | $ | 1,000,000 | $ | 1,005,750 | ||
| Long Island Power Authority, Electric Systems Rev., “A”, BHAC, 5.5%, 2033 | 485,000 | 533,282 | ||||
| Long Island Power Authority, Electric Systems Rev., “A”, 6%, 2033 | 155,000 | 173,130 | ||||
| Mississippi Business Finance Corp., Gulf Opportunity Zone Rev., “A”, 5%, 2037 | 1,000,000 | 969,810 | ||||
| Mississippi Development Bank Special Obligation (Columbus Electric Systems Project), ASSD GTY, 4.7%, 2027 | 155,000 | 158,488 | ||||
| Mississippi Development Bank Special Obligation (Columbus Electric Systems Project), ASSD GTY, 4.75%, 2028 | 100,000 | 102,093 | ||||
| Mississippi Development Bank Special Obligation (Columbus Electric Systems Project), ASSD GTY, 4.85%, 2029 | 485,000 | 496,577 | ||||
| Mississippi Development Bank Special Obligations (Municipal Energy Agency Power Supply Project), “A”, SYNCORA, 5%, 2026 | 1,000,000 | 967,980 | ||||
| Mississippi Development Bank Special Obligations (Okolona Electric System), 5.2%, 2011 (c) | 1,010,000 | 1,064,671 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| Utilities - Municipal Owned - continued | ||||||
| Puerto Rico Electric Power Authority Rev., “WW”, 5.25%, 2025 | $ | 1,000,000 | $ | 1,037,820 | ||
| Puerto Rico Electric Power Authority, Power Rev., “V”, AGM, 5.25%, 2027 | 570,000 | 622,999 | ||||
| South Carolina Public Service Authority Rev., “A”, 5.5%, 2038 | 1,000,000 | 1,077,490 | ||||
| $ | 8,210,090 | |||||
| Utilities - Other - 0.6% | ||||||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2019 | $ | 375,000 | $ | 381,945 | ||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2021 | 185,000 | 186,730 | ||||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2022 | 95,000 | 95,426 | ||||
| $ | 664,101 | |||||
| Water & Sewer Utility Revenue - 11.3% | ||||||
| Commonwealth of Puerto Rico Aqueduct & Sewer Authority Rev., “A”, ASSD GTY, 5%, 2028 | $ | 400,000 | $ | 411,116 | ||
| Commonwealth of Puerto Rico Aqueduct & Sewer Authority Rev., “A”, 6%, 2044 | 2,000,000 | 2,065,320 | ||||
| Detroit, MI, Sewer Disposal System Rev., “B”, AGM, 7.5%, 2033 | 240,000 | 286,279 | ||||
| Grenada, MS, Mississippi Development Bank Special Obligations (Water & Sewer Systems Project), “N”, AGM, 5%, 2030 | 1,000,000 | 1,025,150 | ||||
| Mississippi Development Bank Special Obligations (Combined Water Sewer & Solid Waste Management), AGM, 5.25%, 2021 | 1,270,000 | 1,347,216 | ||||
| Mississippi Development Bank Special Obligations (Combined Water Sewer & Solid Waste Management), AGM, 5.05%, 2027 | 1,610,000 | 1,681,484 | ||||
| Mississippi Development Bank Special Obligations (Gulfport Water & Sewer Project), AGM, 5.625%, 2012 (c) | 500,000 | 560,425 | ||||
| Mississippi Development Bank Special Obligations (Gulfport Water & Sewer Project), “A”, FGIC, 5.25%, 2012 (c) | 2,000,000 | 2,176,760 | ||||
| Mississippi Development Bank Special Obligations (Jackson Water & Sewer System Project), AGM, 5%, 2029 (f) | 2,000,000 | 2,048,280 | ||||
| Mississippi Development Bank Special Obligations (Jackson Water & Sewer System Project), FGIC, 5%, 2032 | 250,000 | 252,353 | ||||
| Wasco, CA, Semitropic Improvement District (Semitropic Water Storage District), “A”, 5%, 2038 | 800,000 | 799,944 | ||||
| $ | 12,654,327 | |||||
| Total Municipal Bonds (Identified Cost, $105,489,764) | $ | 108,955,706 | ||||
21
Table of Contents
Portfolio of Investments – continued
| Money Market Funds (v) - 1.5% | |||||
| Issuer | Shares/Par | Value ($) | |||
| MFS Institutional Money Market Portfolio, 0.17%, at Cost and Net Asset Value | 1,617,861 | $ | 1,617,861 | ||
| Total Investments (Identified Cost, $107,107,625) | $ | 110,573,567 | |||
| Other Assets, Less Liabilities - 1.3% | 1,476,524 | ||||
| Net Assets - 100.0% | $ | 112,050,091 | |||
Derivative Contracts at 3/31/10
Futures Contracts Outstanding at 3/31/10
| Description | Currency | Contracts | Value | Expiration Date | Unrealized Appreciation (Depreciation) | |||||
| Asset Derivatives | ||||||||||
| Interest Rate Futures | ||||||||||
| U.S. Treasury Note 10 yr (Short) | USD | 10 | $1,162,500 | Jun-10 | $4,083 | |||||
At March 31, 2010, the fund had sufficient cash and/or other liquid securities to cover any commitments under these derivative contracts.
See Portfolio Footnotes and Notes to Financial Statements
22
Table of Contents
PORTFOLIO OF INVESTMENTS
3/31/10
MFS® NEW YORK MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.
| Municipal Bonds - 95.9% | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Airport & Port Revenue - 1.8% | ||||||
| New York, NY, City Industrial Development Agency, Special Facilities Rev. (Terminal One Group), 5.5%, 2024 | $ | 1,000,000 | $ | 1,010,176 | ||
| Port Authority NY & NJ (132nd Series), 5%, 2033 | 2,000,000 | 2,063,020 | ||||
| Port Authority NY & NJ, Special Obligation Rev. (JFK International), NATL, 6.25%, 2015 | 1,000,000 | 1,054,780 | ||||
| $ | 4,127,976 | |||||
| General Obligations - General Purpose - 3.5% | ||||||
| Commonwealth of Puerto Rico, “A”, 5.375%, 2033 | $ | 495,000 | $ | 485,620 | ||
| Commonwealth of Puerto Rico, “A”, 6%, 2038 | 845,000 | 875,995 | ||||
| New York, NY, “A”, 6%, 2010 (c) | 990,000 | 1,006,048 | ||||
| New York, NY, “A”, 5%, 2039 | 1,500,000 | 1,551,990 | ||||
| New York, NY, “B”, 5.375%, 2010 (c) | 210,000 | 215,525 | ||||
| New York, NY, “C-1”, 5.25%, 2025 | 1,000,000 | 1,067,620 | ||||
| New York, NY, “D-1”, 5.125%, 2028 | 1,000,000 | 1,051,930 | ||||
| New York, NY, “E-1”, 6.25%, 2028 | 1,000,000 | 1,159,600 | ||||
| New York, NY, “J”, FGIC, 5.5%, 2026 | 5,000 | 5,009 | ||||
| New York, NY, Unrefunded, “A”, 6%, 2019 | 10,000 | 10,148 | ||||
| Puerto Rico Public Buildings Authority Rev., Guaranteed, “M”, 6.25%, 2023 | 340,000 | 373,136 | ||||
| $ | 7,802,621 | |||||
| General Obligations - Improvement - 0.5% | ||||||
| Erie County, NY, Public Improvement, “A”, FGIC, 5%, 2019 | $ | 140,000 | $ | 141,596 | ||
| Guam Government, “A”, 6.75%, 2029 | 635,000 | 676,504 | ||||
| Guam Government, “A”, 5.25%, 2037 | 290,000 | 249,693 | ||||
| Guam Government, “A”, 7%, 2039 | 105,000 | 112,575 | ||||
| $ | 1,180,368 | |||||
| General Obligations - Schools - 1.9% | ||||||
| Genesee Valley, NY, Central School District (Angelica Belmont), FGIC, 5.25%, 2028 | $ | 1,720,000 | $ | 1,773,028 | ||
| Port Byron, NY, Central School District, ETM, AMBAC, 7.4%, 2012 (c) | 500,000 | 570,835 | ||||
| Port Byron, NY, Central School District, ETM, AMBAC, 7.4%, 2013 (c) | 500,000 | 597,295 | ||||
| Port Byron, NY, Central School District, ETM, AMBAC, 7.4%, 2014 (c) | 500,000 | 619,165 | ||||
| Port Byron, NY, Central School District, ETM, AMBAC, 7.4%, 2015 (c) | 500,000 | 637,315 | ||||
| $ | 4,197,638 | |||||
| Healthcare Revenue - Hospitals - 8.1% | ||||||
| Albany, NY, Industrial Development Agency, Civic Facilities Rev. (St. Peters), “D”, 5.75%, 2027 | $ | 1,000,000 | $ | 1,012,830 | ||
| Chautauqua County, NY, Industrial Development Agency, Civic Facilities Rev. (Women’s Christian Assn.), “A”, 6.35%, 2017 | 115,000 | 115,285 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| Healthcare Revenue - Hospitals - continued | ||||||
| Chautauqua County, NY, Industrial Development Agency, Civic Facilities Rev. (Women’s Christian Assn.), “A”, 6.4%, 2029 | $ | 460,000 | $ | 422,064 | ||
| Genesee County, NY, Industrial Development Agency, Civic Facilities Rev. (United Medical Center Project), 5%, 2032 | 500,000 | 404,085 | ||||
| Madison County, NY, Industrial Development Agency, Civic Facilities Rev. (Oneida), 5.25%, 2027 | 1,425,000 | 1,269,675 | ||||
| Michigan Hospital Finance Authority Rev. (Henry Ford Health System), 5.625%, 2029 | 145,000 | 142,374 | ||||
| Michigan Hospital Finance Authority Rev. (Henry Ford Health System), 5.75%, 2039 | 1,430,000 | 1,380,665 | ||||
| Monroe County, NY, Industrial Development Agency, Civic Facilities Rev. (Highland Hospital of Rochester), 5%, 2025 | 995,000 | 986,523 | ||||
| New Hampshire Business Finance Authority Rev. (Huggins Hospital), 6.875%, 2039 | 55,000 | 54,965 | ||||
| New York Dormitory Authority Rev. (NYU Hospital Center), “B”, 5.625%, 2037 | 750,000 | 733,065 | ||||
| New York Dormitory Authority Rev., Non-State Supported Debt, 6.25%, 2037 | 750,000 | 713,100 | ||||
| New York Dormitory Authority Rev., Non-State Supported Debt (Bronx-Lebanon Hospital Center), LOC, 6.25%, 2035 | 1,495,000 | 1,625,080 | ||||
| New York Dormitory Authority Rev., Non-State Supported Debt (Hospital Special Surgery), FHA, 6.25%, 2034 | 2,000,000 | 2,200,580 | ||||
| New York Dormitory Authority Rev., Non-State Supported Debt (Long Island Jewish Medical Center), “A”, 5.5%, 2037 | 750,000 | 761,903 | ||||
| New York Dormitory Authority Rev., Non-State Supported Debt (Mt. Sinai NYU Health), 5.5%, 2026 | 250,000 | 250,333 | ||||
| New York Dormitory Authority Rev., Non-State Supported Debt (Mt. Sinai NYU Health), “C”, 5.5%, 2026 | 500,000 | 500,700 | ||||
| New York, NY, Health & Hospital Corp. Rev., “A”, 5.25%, 2017 | 760,000 | 765,153 | ||||
| New York, NY, Health & Hospital Corp. Rev., “A”, 5.5%, 2023 | 1,000,000 | 1,075,110 | ||||
| New York, NY, Industrial Development Agency, Civic Facilities Rev. (Staten Island University Hospital), “B”, 6.375%, 2031 | 480,000 | 479,990 | ||||
| Saratoga County, NY, Industrial Development Agency Civic Facilities Rev., 5.25%, 2032 | 500,000 | 469,120 | ||||
| Suffolk County, NY, Industrial Development Agency, Civic Facilities Rev. (Huntington Hospital), “C”, 5.875%, 2032 | 1,000,000 | 1,011,920 | ||||
| Washington Health Care Facilities Authority Rev. (Central Washington Health Services), 6.75%, 2029 | 165,000 | 175,461 | ||||
23
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Healthcare Revenue - Hospitals - continued | ||||||
| Washington Health Care Facilities Authority Rev. (Central Washington Health Services), 7%, 2039 | $ | 395,000 | $ | 423,515 | ||
| Wisconsin Health & Educational Facilities Authority Rev. (Wheaton Franciscan Services), 5.25%, 2031 | 945,000 | 867,671 | ||||
| Yonkers, NY, Industrial Development Agency, Civic Facilities Rev. (St. John’s Riverside Hospital), “A”, 7.125%, 2031 | 300,000 | 292,500 | ||||
| $ | 18,133,667 | |||||
| Healthcare Revenue - Long Term Care - 1.1% | ||||||
| East Rochester, NY, Housing Authority Rev. (Woodland Village Project), 5.5%, 2033 | $ | 400,000 | $ | 330,676 | ||
| Nassau County, NY, Industrial Development Agency Continuing Care, 6.7%, 2043 | 550,000 | 511,605 | ||||
| Suffolk County, NY, Industrial Development Agency, Civic Facilities Rev. (Gurwin Jewish Phase II), 6.7%, 2039 | 385,000 | 320,258 | ||||
| Travis County, TX, Health Facilities Development Corp. Rev. (Westminster Manor Health), 7%, 2030 | 120,000 | 119,992 | ||||
| Travis County, TX, Health Facilities Development Corp. Rev. (Westminster Manor Health), 7.125%, 2040 | 180,000 | 180,052 | ||||
| Ulster County, NY, Industrial Development Agency (Woodland Pond), “A”, 6%, 2037 | 500,000 | 391,310 | ||||
| Westchester County, NY, Industrial Development Agency, Civic Facilities Rev., Continuing Care Retirement (Kendal on Hudson), “A”, 6.5%, 2013 (c) | 300,000 | 341,184 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (St. John’s Community, Inc.), “A”, 7.25%, 2029 | 20,000 | 20,604 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (St. John’s Community, Inc.), “A”, 7.625%, 2039 | 130,000 | 135,993 | ||||
| $ | 2,351,674 | |||||
| Human Services - 0.9% | ||||||
| Nassau County, NY, Industrial Development Agency, Civic Facility Rev. (Special Needs Facility), “B-1”, 6.5%, 2017 | $ | 205,000 | $ | 192,032 | ||
| New York Dormitory Authority Rev. (Jewish Board of Families & Children), AMBAC, 5%, 2023 | 695,000 | 679,161 | ||||
| New York Dormitory Authority Rev., Non-State Supported Debt (Nysarc, Inc.), “A”, 6%, 2032 | 705,000 | 763,085 | ||||
| New York, NY, Industrial Development Agency (PSCH, Inc.), 6.375%, 2033 | 500,000 | 442,970 | ||||
| $ | 2,077,248 | |||||
| Industrial Revenue - Airlines - 0.3% | ||||||
| New York, NY, City Industrial Development Agencies Rev. (American Airlines, Inc.), 7.125%, 2011 | $ | 100,000 | $ | 101,042 | ||
| Issuer | Shares/Par | Value ($) | ||||
| Industrial Revenue - Airlines - continued | ||||||
| New York, NY, City Industrial Development Agencies Rev. (American Airlines, Inc.), 7.625%, 2025 | $ | 350,000 | $ | 354,340 | ||
| New York, NY, City Industrial Development Agencies Rev. (American Airlines, Inc.), 7.75%, 2031 | 250,000 | 252,700 | ||||
| $ | 708,082 | |||||
| Industrial Revenue - Other - 2.3% | ||||||
| Liberty, NY, Development Corp. Rev. (Goldman Sachs Headquarters), 5.25%, 2035 | $ | 3,180,000 | $ | 3,211,259 | ||
| New York, NY, City Industrial Development Agency Rev., Liberty Bonds (IAC/InterActiveCorp), 5%, 2035 | 500,000 | 433,450 | ||||
| Onondaga County, NY, Industrial Development Agency, Sewer Facilities Rev. (Bristol-Meyers Squibb Co.), 5.75%, 2024 | 1,000,000 | 1,097,650 | ||||
| Virgin Islands Public Finance Authority, Refinery Facilities Rev. (Hovensa Coker Project), 5.875%, 2022 | 430,000 | 429,028 | ||||
| $ | 5,171,387 | |||||
| Industrial Revenue - Paper - 0.5% | ||||||
| Essex County, NY, Industrial Development Agency, Pollution Control Rev. (International Paper Corp.), 6.15%, 2021 | $ | 470,000 | $ | 470,832 | ||
| Essex County, NY, Industrial Development Agency, Pollution Control Rev. (International Paper Corp.), 6.45%, 2023 | 700,000 | 706,300 | ||||
| $ | 1,177,132 | |||||
| Miscellaneous Revenue - Entertainment & Tourism - 1.8% | ||||||
| Brooklyn, NY, Arena Local Development Corp. (Barclays Center Project), 6.25%, 2040 | $ | 1,750,000 | $ | 1,798,108 | ||
| New York Liberty Development Corp. Rev. (National Sports Museum), “A”, 6.125%, 2019 (d) | 439,999 | 1,320 | ||||
| New York, NY, City Industrial Development Agency Rev. (Queens Baseball Stadium), ASSD GTY, 6.375%, 2039 | 2,000,000 | 2,182,180 | ||||
| $ | 3,981,608 | |||||
| Miscellaneous Revenue - Other - 0.9% | ||||||
| New York, NY, Industrial Development Agency, Civic Facilities Rev. (United Jewish Appeal), “A”, 5%, 2027 | $ | 1,000,000 | $ | 1,038,550 | ||
| Onondaga County, NY, Industrial Development Authority Rev. (Air Cargo), 6.125%, 2032 | 1,045,000 | 922,787 | ||||
| $ | 1,961,337 | |||||
| Multi-Family Housing Revenue - 4.2% | ||||||
| New York Housing Finance Agency Rev. (Affordable Housing), “D”, 5%, 2040 | $ | 4,020,000 | $ | 4,019,839 | ||
| New York Housing Finance Agency Rev., “A”, 5.1%, 2041 | 805,000 | 753,665 | ||||
| New York Housing Finance Agency Rev., “A”, 5.25%, 2041 | 1,000,000 | 1,010,020 | ||||
24
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Multi-Family Housing Revenue - continued | ||||||
| New York, NY, City Housing Development Corp., 5.5%, 2034 | $ | 2,000,000 | $ | 2,002,160 | ||
| New York, NY, City Housing Development Corp., “C”, 5%, 2026 | 500,000 | 497,755 | ||||
| New York, NY, City Housing Development Corp., Multifamily Housing Rev., 4.8%, 2035 | 1,000,000 | 994,130 | ||||
| $ | 9,277,569 | |||||
| Sales & Excise Tax Revenue - 1.7% | ||||||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., 0%, 2056 | $ | 11,315,000 | $ | 574,236 | ||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., 5.25%, 2057 | 1,000,000 | 991,280 | ||||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “A”, 5.5%, 2028 | 1,070,000 | 1,122,387 | ||||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “A”, 5.375%, 2039 | 630,000 | 640,767 | ||||
| Schenectady, NY, Metroplex Development Authority Rev., “A”, NATL, 5.375%, 2021 | 475,000 | 488,547 | ||||
| $ | 3,817,217 | |||||
| Single Family Housing - State - 3.2% | ||||||
| New York Mortgage Agency Rev., 5.1%, 2024 | $ | 2,000,000 | $ | 2,003,560 | ||
| New York Mortgage Agency Rev., “130”, 4.65%, 2027 | 1,680,000 | 1,650,936 | ||||
| New York Mortgage Agency Rev., “130”, 4.75%, 2030 | 500,000 | 484,085 | ||||
| New York Mortgage Agency Rev., “156”, 5.35%, 2033 | 1,500,000 | 1,543,245 | ||||
| New York Mortgage Agency Rev., “158”, 6.6%, 2038 | 1,290,000 | 1,404,333 | ||||
| $ | 7,086,159 | |||||
| Solid Waste Revenue - 0.4% | ||||||
| Niagara County, NY, Industrial Development Agency, Solid Waste Disposal Rev. (American Ref-fuel), “C”, 5.625%, 2024 (b) | $ | 850,000 | $ | 875,755 | ||
| State & Agency - Other - 1.9% | ||||||
| New York Dormitory Authority (City University), AMBAC, 5.75%, 2018 | $ | 800,000 | $ | 906,664 | ||
| New York Dormitory Authority (State University), 5.375%, 2010 (c) | 1,500,000 | 1,523,295 | ||||
| New York Dormitory Authority (Upstate Community Colleges), “A”, AGM, 6%, 2010 (c) | 1,010,000 | 1,033,765 | ||||
| New York Municipal Bond Bank Agency, Special Program Rev., “A”, AMBAC, 5.25%, 2015 | 715,000 | 739,210 | ||||
| $ | 4,202,934 | |||||
| State & Local Agencies - 12.8% | ||||||
| Delaware Valley, PA, Regional Finance Authority, “C”, FRN, 0.919%, 2037 | $ | 1,405,000 | $ | 996,693 | ||
| New York Dormitory Authority (City University), “A”, 5.625%, 2016 | 2,450,000 | 2,726,630 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| State & Local Agencies - continued | ||||||
| New York Dormitory Authority (State University), 5.875%, 2017 | $ | 1,130,000 | $ | 1,311,184 | ||
| New York Dormitory Authority Rev. (School Program), 6.25%, 2020 | 1,690,000 | 1,728,025 | ||||
| New York Dormitory Authority Rev., Mental Health Services, “B”, AGM, 5.25%, 2010 (c) | 35,000 | 35,625 | ||||
| New York Dormitory Authority Rev., Mental Health Services, “D”, AGM, 5.25%, 2010 (c) | 35,000 | 35,625 | ||||
| New York Dormitory Authority Rev., Mental Health Services, “D”, NATL, 5.25%, 2011 (c) | 105,000 | 111,787 | ||||
| New York Dormitory Authority Rev., Mental Health Services, Unrefunded, “B”, NATL, 5.25%, 2031 | 725,000 | 730,902 | ||||
| New York Dormitory Authority Rev., Non-State Supported Debt, 5%, 2032 | 2,000,000 | 2,008,800 | ||||
| New York Dormitory Authority Rev., State Supported Debt, AGM, 5.25%, 2010 (c) | 10,000 | 10,179 | ||||
| New York Dormitory Authority Rev., State Supported Debt, AGM, 5.25%, 2030 | 25,000 | 25,112 | ||||
| New York Dormitory Authority Rev., State Supported Debt, 5%, 2035 | 2,000,000 | 2,008,440 | ||||
| New York Dormitory Authority Rev., State Supported Debt, “A”, 5%, 2022 | 1,500,000 | 1,607,550 | ||||
| New York Dormitory Authority Rev., State Supported Debt, “A”, 5%, 2033 | 2,000,000 | 2,079,220 | ||||
| New York Dormitory Authority State Personal Income Tax Rev., 5%, 2038 | 1,000,000 | 1,039,430 | ||||
| New York Municipal Bond Bank Agency, Special School Purpose Rev., 5.25%, 2022 | 1,000,000 | 1,042,350 | ||||
| New York Urban Development Corp. (State Facilities), AMBAC, 5.6%, 2015 | 2,750,000 | 3,021,040 | ||||
| New York Urban Development Corp. Rev., “B-1”, 5%, 2036 (f) | 3,000,000 | 3,136,320 | ||||
| New York Urban Development Corp. Rev., “D”, 5.625%, 2028 | 2,000,000 | 2,188,100 | ||||
| Tobacco Settlement Financing Corp., NY, “A-1”, 5.5%, 2018 | 2,000,000 | 2,132,300 | ||||
| United Nations Development Corp., “A”, 5%, 2026 | 500,000 | 525,245 | ||||
| $ | 28,500,557 | |||||
| Tax - Other - 6.9% | ||||||
| Commonwealth of Puerto Rico, Public Improvement, “B”, 6.5%, 2037 | $ | 1,600,000 | $ | 1,742,288 | ||
| Guam Government Ltd. Obligation Rev., “A”, 5.375%, 2024 | 270,000 | 279,331 | ||||
| Guam Government Ltd. Obligation Rev., “A”, 5.625%, 2029 | 90,000 | 92,181 | ||||
| Hudson Yards Infrastructure Corp. Rev., “A”, 5%, 2047 | 3,000,000 | 2,845,410 | ||||
| Hudson Yards Infrastructure Corp. Rev., “A”, AGM, 5%, 2047 | 2,500,000 | 2,410,250 | ||||
| New York, NY, City Transitional Finance Authority Building Aid Rev., “S-3”, 5.25%, 2039 | 2,000,000 | 2,097,260 | ||||
25
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Tax - Other - continued | ||||||
| New York, NY, City Transitional Finance Authority Building Aid Rev., “S-5”, GNMA, 5%, 2026 | $ | 3,000,000 | $ | 3,147,480 | ||
| New York, NY, City Transitional Finance Authority Building Aid Rev., “S-5”, 5%, 2032 | 1,000,000 | 1,026,360 | ||||
| New York, NY, Transitional Finance Authority Rev., “A”, 5%, 2026 | 1,000,000 | 1,051,700 | ||||
| Virgin Islands Public Finance Authority Rev. (Diageo), “A”, 6.625%, 2029 | 605,000 | 652,462 | ||||
| $ | 15,344,722 | |||||
| Tobacco - 2.1% | ||||||
| Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 5.125%, 2024 | $ | 325,000 | $ | 298,688 | ||
| Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 5.875%, 2030 | 330,000 | 277,982 | ||||
| Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 5.875%, 2047 | 405,000 | 293,896 | ||||
| Buckeye, OH, Tobacco Settlement Financing Authority, “A-3”, 0%, 2037 | 765,000 | 520,850 | ||||
| Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., “A-1”, 5.75%, 2047 | 1,230,000 | 866,215 | ||||
| Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., “A-2”, 0% to 2012, 5.30% to 2037 | 1,235,000 | 786,176 | ||||
| Guam Economic Development Authority Tobacco Settlement, “B”, 5.5%, 2011 (c) | 400,000 | 421,524 | ||||
| New York County Tobacco Trust II, 5.625%, 2035 | 800,000 | 726,616 | ||||
| Westchester, NY, Tobacco Asset Securitization Corp., 5.125%, 2045 | 500,000 | 399,045 | ||||
| $ | 4,590,992 | |||||
| Toll Roads - 3.2% | ||||||
| Triborough Bridge & Tunnel Authority Rev., NY, 5%, 2037 | $ | 2,000,000 | $ | 2,081,000 | ||
| Triborough Bridge & Tunnel Authority Rev., NY, “A-2”, 5%, 2029 | 2,000,000 | 2,108,580 | ||||
| Triborough Bridge & Tunnel Authority Rev., NY, “C”, 5%, 2038 | 2,000,000 | 2,076,420 | ||||
| Triborough Bridge & Tunnel Authority Rev., NY, ETM, 6%, 2012 (c) | 545,000 | 580,087 | ||||
| Triborough Bridge & Tunnel Authority Rev., NY, Unrefunded, “A”, NATL, 5%, 2032 | 310,000 | 316,017 | ||||
| $ | 7,162,104 | |||||
| Transportation - Special Tax - 3.3% | ||||||
| Metropolitan Transportation Authority Rev., NY, “A”, 5%, 2035 | $ | 2,000,000 | $ | 2,022,320 | ||
| Metropolitan Transportation Authority Rev., NY, “A”, 5%, 2037 | 2,410,000 | 2,409,880 | ||||
| Metropolitan Transportation Authority Rev., NY, “C”, 6.5%, 2028 | 2,000,000 | 2,295,060 | ||||
| Metropolitan Transportation Authority Rev., NY, ETM, AMBAC, 5.75%, 2013 (c) | 665,000 | 708,804 | ||||
| $ | 7,436,064 | |||||
| Issuer | Shares/Par | Value ($) | ||||
| Universities - Colleges - 17.4% | ||||||
| Albany, NY, Industrial Development Agency Rev. (Albany Law School), 5%, 2031 | $ | 1,000,000 | $ | 930,620 | ||
| Amherst, NY, Industrial Development Agency, Civic Facility Rev. (Daemen College Project), “A”, 6%, 2011 (c) | 1,000,000 | 1,097,700 | ||||
| Cattaraugus County, NY, Industrial Development Agency Rev. (Jamestown Community College), “A”, 6.4%, 2010 (c) | 500,000 | 517,170 | ||||
| Hempstead, NY, Local Development Corp. Rev. (Molloy College Project), 5.75%, 2039 | 1,000,000 | 1,002,740 | ||||
| Hempstead, NY, Local Development Corp. Rev., (Adelphi University), “B”, 5.25%, 2039 | 500,000 | 515,265 | ||||
| Illinois Finance Authority Rev. (Roosevelt University Project), 6.25%, 2029 | 1,945,000 | 1,996,737 | ||||
| Madison County, NY, Industrial Development Agency Civic Facilities Rev. (Colgate University), “A”, AMBAC, 5%, 2035 | 1,585,000 | 1,625,211 | ||||
| Nassau County, NY, Industrial Development Agency Rev. (New York Institute of Technology), “A”, 4.75%, 2026 | 1,000,000 | 981,350 | ||||
| New Jersey Educational Facilities Authority Rev. (University of Medicine & Dentistry), “B”, 6%, 2017 | 985,000 | 1,110,942 | ||||
| New York Dormitory Authority Rev. (New York University), “A”, FGIC, 5%, 2029 | 1,000,000 | 1,026,780 | ||||
| New York Dormitory Authority Rev. (New York University), “A”, 5%, 2038 | 3,000,000 | 3,120,930 | ||||
| New York Dormitory Authority Rev. (Pace University), NATL, 6%, 2010 (c) | 1,700,000 | 1,740,001 | ||||
| New York Dormitory Authority Rev. (St. John’s University), “A”, NATL, 5%, 2017 | 300,000 | 308,847 | ||||
| New York Dormitory Authority Rev., Non-State Supported Debt (Brooklyn Law School), 5.75%, 2033 | 600,000 | 619,464 | ||||
| New York Dormitory Authority Rev., Non-State Supported Debt (Cornell University), “A”, 5%, 2031 | 2,000,000 | 2,112,700 | ||||
| New York Dormitory Authority Rev., Non-State Supported Debt (Manhattan Marymount), 5.25%, 2029 | 1,000,000 | 1,000,640 | ||||
| New York Dormitory Authority Rev., Non-State Supported Debt (Manhattan Marymount), 5.125%, 2039 | 2,000,000 | 2,007,880 | ||||
| New York Dormitory Authority Rev., Non-State Supported Debt (New York University), “A”, 5.25%, 2048 | 2,955,000 | 3,079,051 | ||||
| New York Dormitory Authority Rev., Non-State Supported Debt (Pace University), AMBAC, 5.5%, 2010 (c) | 2,500,000 | 2,555,875 | ||||
| New York Dormitory Authority Rev., Non-State Supported Debt (Pratt Institute), “C”, ASSD GTY, 5%, 2034 | 1,000,000 | 1,036,610 | ||||
| New York Dormitory Authority Rev., Non-State Supported Debt (Teachers College), 5.5%, 2039 | 1,000,000 | 1,041,360 | ||||
| New York Dormitory Authority Rev., Non-State Supported Debt (Yeshiva University), 5%, 2034 | 1,500,000 | 1,555,755 | ||||
26
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Universities - Colleges - continued | ||||||
| New York, NY, City Trust Cultural Resource Rev. (Juilliard), “A”, 5%, 2034 | $ | 1,850,000 | $ | 1,948,883 | ||
| Schenectady, NY, New York Dormitory Authority Rev. (Cornell University), “A”, AMBAC, 5%, 2032 | 2,000,000 | 2,037,500 | ||||
| Seneca County, NY, Industrial Development Agency, Civic Facilities Rev. (New York Chiropractic), 5%, 2027 | 500,000 | 484,140 | ||||
| St. Lawrence County, NY, Industrial Development Agency Rev. (Clarkson University), 5%, 2031 | 2,225,000 | 2,210,426 | ||||
| Suffolk County, NY, Industrial Development Agency Rev. (New York Institute of Technology Project), 5%, 2026 | 450,000 | 453,672 | ||||
| Yonkers, NY, Industrial Development Agency, Civic Facilities Rev. (Sarah Lawrence College Project), “A”, 6%, 2041 | 595,000 | 612,672 | ||||
| $ | 38,730,921 | |||||
| Utilities - Investor Owned - 1.1% | ||||||
| Chautauqua County, NY, Industrial Development Agency, Exempt Facilities Rev. (Dunkirk Power), 5.875%, 2042 | $ | 1,000,000 | $ | 1,008,440 | ||
| New York Environmental Facilities Corp., Water Facilities Rev. (Spring Valley Water Co.), “B”, AMBAC, 6.15%, 2024 | 1,500,000 | 1,503,525 | ||||
| $ | 2,511,965 | |||||
| Utilities - Municipal Owned - 5.4% | ||||||
| Guam Power Authority Rev., AMBAC, 5.25%, 2014 | $ | 1,000,000 | $ | 1,006,230 | ||
| Long Island Power Authority, Electric Systems Rev., “A”, 6.25%, 2033 | 1,000,000 | 1,134,500 | ||||
| Long Island Power Authority, Electric Systems Rev., “A”, 6%, 2033 | 2,000,000 | 2,233,940 | ||||
| Long Island Power Authority, Electric Systems Rev., “C”, 5%, 2035 | 2,000,000 | 2,010,780 | ||||
| Long Island Power Authority, Electric Systems Rev., “C”, AGM, 5%, 2035 | 1,520,000 | 1,528,193 | ||||
| New York Power Authority Rev., 5.25%, 2040 | 3,000,000 | 3,015,540 | ||||
| Puerto Rico Electric Power Authority, Power Rev., “XX”, 5.25%, 2040 | 870,000 | 858,246 | ||||
| Virgin Islands Water & Power Authority Rev., 5.5%, 2017 | 200,000 | 200,626 | ||||
| $ | 11,988,055 | |||||
| Utilities - Other - 0.5% | ||||||
| Public Authority for Colorado Energy Natural Gas Purchase Rev., 6.5%, 2038 | $ | 1,085,000 | $ | 1,196,842 | ||
| Issuer | Shares/Par | Value ($) | ||||
| Water & Sewer Utility Revenue - 8.2% | ||||||
| Commonwealth of Puerto Rico Aqueduct & Sewer Authority Rev., “A”, ASSD GTY, 5.125%, 2047 | $ | 500,000 | $ | 496,260 | ||
| New York Environmental Facilities Corp., Clean Water & Drinking Rev., 5%, 2031 | 1,330,000 | 1,364,314 | ||||
| New York Environmental Facilities Corp., Clean Water & Drinking Rev., “B”, 5%, 2033 | 2,140,000 | 2,262,066 | ||||
| New York Environmental Facilities Corp., Pollution Control Rev., 5.75%, 2010 | 175,000 | 176,832 | ||||
| New York Environmental Facilities Corp., Pollution Control Rev., 6.875%, 2010 | 30,000 | 30,085 | ||||
| New York Environmental Facilities Corp., Pollution Control Rev., 7.25%, 2010 | 10,000 | 10,030 | ||||
| New York Environmental Facilities Corp., Pollution Control Rev., ETM, 5.75%, 2010 (c) | 1,115,000 | 1,126,830 | ||||
| New York Environmental Facilities Corp., Pollution Control Rev., ETM, 5.75%, 2010 (c) | 945,000 | 955,026 | ||||
| New York Environmental Facilities Corp., Water Facilities Rev., 6%, 2031 | 1,005,000 | 1,020,768 | ||||
| New York, NY, Municipal Water & Sewer Finance Authority Rev., 4.75%, 2030 | 1,245,000 | 1,279,262 | ||||
| New York, NY, Municipal Water & Sewer Finance Authority Rev., 5.125%, 2030 | 1,000,000 | 1,059,940 | ||||
| New York, NY, Municipal Water & Sewer Finance Authority Rev., 5%, 2038 | 2,000,000 | 2,059,500 | ||||
| New York, NY, Municipal Water & Sewer Finance Authority Rev., 5%, 2038 | 1,500,000 | 1,544,625 | ||||
| New York, NY, Municipal Water & Sewer Finance Authority Rev., FGIC, 4.5%, 2039 | 920,000 | 902,345 | ||||
| New York, NY, Municipal Water & Sewer Finance Authority Rev., “A”, 5%, 2027 | 1,500,000 | 1,562,700 | ||||
| New York, NY, Municipal Water & Sewer Finance Authority Rev., “A”, ETM, 6%, 2010 (c) | 620,000 | 626,814 | ||||
| New York, NY, Municipal Water & Sewer Finance Authority Rev., ETM, AMBAC, 6.75%, 2014 (c) | 835,000 | 943,191 | ||||
| Suffolk County, NY, Water Authority Rev., NATL, 5.1%, 2012 | 660,000 | 715,117 | ||||
| Suffolk County, NY, Water Authority Rev., ETM, NATL, 5.1%, 2012 (c) | 235,000 | 255,678 | ||||
| $ | 18,391,383 | |||||
| Total Municipal Bonds (Identified Cost, $207,151,090) | $ | 213,983,977 | ||||
| Money Market Funds (v) - 0.8% | ||||||
| MFS Institutional Money Market Portfolio, 0.17%, at Cost and Net Asset Value | 1,797,699 | $ | 1,797,699 | |||
| Total Investments (Identified Cost, $208,948,789) | $ | 215,781,676 | ||||
| Other Assets, Less Liabilities - 3.3% | 7,296,704 | |||||
| Net Assets - 100.0% | $ | 223,078,380 | ||||
27
Table of Contents
Portfolio of Investments – continued
Derivative Contracts at 3/31/10
Futures Contracts Outstanding at 3/31/10
| Description | Currency | Contracts | Value | Expiration Date | Unrealized Appreciation | |||||||
| Asset Derivatives | ||||||||||||
| Interest Rate Futures | ||||||||||||
| U.S. Treasury Bond 30 yr (short) | USD | 50 | $ | 5,806,250 | Jun-10 | $ | 5,685 | |||||
| U.S. Treasury Note 10 yr (short) | USD | 20 | 2,325,000 | Jun-10 | 8,165 | |||||||
| $ | 13,850 | |||||||||||
At March 31, 2010, the fund had sufficient cash and/or other liquid securities to cover any commitments under these derivative contracts.
See Portfolio Footnotes and Notes to Financial Statements
28
Table of Contents
PORTFOLIO OF INVESTMENTS
3/31/10
MFS® NORTH CAROLINA MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.
| Municipal Bonds - 99.8% | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Airport & Port Revenue - 3.5% | ||||||
| Charlotte, NC, Airport Rev. (Charlotte/Douglas International Airport), AMBAC, 5%, 2023 | $ | 1,430,000 | $ | 1,493,392 | ||
| Charlotte, NC, Airport Rev., “A”, NATL, 5%, 2029 | 2,000,000 | 2,022,660 | ||||
| Charlotte, NC, Airport Rev., “A”, NATL, 5%, 2034 | 4,485,000 | 4,506,752 | ||||
| Charlotte, NC, Airport Rev., “A”, 5%, 2039 | 3,000,000 | 3,006,930 | ||||
| North Carolina Ports Authority Facilities Rev., “A”, 5.25%, 2040 | 1,000,000 | 1,007,560 | ||||
| Raleigh Durham, NC, Airport Authority Rev., “A”, FGIC, 5.25%, 2018 | 2,700,000 | 2,778,300 | ||||
| $ | 14,815,594 | |||||
| General Obligations - General Purpose - 1.7% | ||||||
| Charlotte, NC, “B”, 5%, 2019 | $ | 2,000,000 | $ | 2,312,800 | ||
| Puerto Rico Public Buildings Authority Rev., Guaranteed, “M”, 6.25%, 2023 | 905,000 | 993,201 | ||||
| Puerto Rico Public Buildings Authority Rev., Guaranteed, “Q”, 5.625%, 2039 | 1,705,000 | 1,674,839 | ||||
| Tuscaloosa, AL, “A”, 5.125%, 2039 | 2,195,000 | 2,238,966 | ||||
| $ | 7,219,806 | |||||
| General Obligations - Improvement - 2.6% | ||||||
| Guam Government, “A”, 6.75%, 2029 | $ | 240,000 | $ | 255,686 | ||
| Guam Government, “A”, 7%, 2039 | 265,000 | 284,117 | ||||
| Nash County, NC, Limited Obligation, ASSD GTY, 5%, 2030 | 2,000,000 | 2,069,320 | ||||
| New Hanover County, NC, Public Improvement, 5.8%, 2010 (c) | 4,200,000 | 4,415,166 | ||||
| North Carolina Capital Improvement Obligation, “A”, 5%, 2026 | 1,450,000 | 1,575,440 | ||||
| State of North Carolina, “A”, 5%, 2017 | 2,000,000 | 2,311,040 | ||||
| $ | 10,910,769 | |||||
| General Obligations - Schools - 5.2% | ||||||
| Brunswick County, NC, FGIC, 5%, 2011 (c) | $ | 2,800,000 | $ | 2,993,368 | ||
| Folsom Cordova, CA, Unified School District, School Facilities Improvement District No. 4 (Election 2006), “A”, NATL, 0%, 2026 | 3,920,000 | 1,378,978 | ||||
| Los Angeles, CA, Unified School District, “D”, 5%, 2034 | 145,000 | 146,594 | ||||
| New Hanover County, NC, Public Improvement, 5%, 2021 | 1,435,000 | 1,559,185 | ||||
| New Hanover County, NC, School Improvement, 5%, 2019 | 1,255,000 | 1,344,933 | ||||
| San Diego, CA, Community College District, AGM, 5%, 2030 | 2,830,000 | 2,910,117 | ||||
| San Jacinto, TX, Community College District, 5.125%, 2038 | 2,000,000 | 2,079,180 | ||||
| Wake County, NC, 5%, 2033 | 6,000,000 | 6,370,080 | ||||
| Wake County, NC, Public Improvement, 5%, 2018 | 3,000,000 | 3,435,870 | ||||
| $ | 22,218,305 | |||||
| Issuer | Shares/Par | Value ($) | ||||
| Healthcare Revenue - Hospitals - 17.8% | ||||||
| Albemarle, NC, Hospital Authority Health Care Facilities Rev., 5.25%, 2038 | $ | 2,000,000 | $ | 1,548,280 | ||
| Catawba County, NC, Hospital Rev. (Catawba Memorial Hospital), AMBAC, 5%, 2017 | 1,200,000 | 1,205,100 | ||||
| Charlotte-Mecklenburg, NC, Hospital Authority Health Care System Rev. (Carolina Health Care System), “A”, 5%, 2011 (c) | 750,000 | 783,900 | ||||
| Charlotte-Mecklenburg, NC, Hospital Authority Health Care System Rev. (Carolina Health Care System), “A”, 5%, 2031 | 1,000,000 | 1,012,530 | ||||
| Charlotte-Mecklenburg, NC, Hospital Authority Health Care System Rev. (Carolina Health Care System), “A”, 5%, 2047 | 1,000,000 | 978,510 | ||||
| Charlotte-Mecklenburg, NC, Hospital Authority Health Care System Rev. (Carolina Healthcare System), “A”, 5.25%, 2034 | 1,000,000 | 1,026,800 | ||||
| Charlotte-Mecklenburg, NC, Hospital Authority Health Care System Rev., Unrefunded (Carolina Health Care System), “A”, 5%, 2031 | 2,695,000 | 2,704,783 | ||||
| Illinois Finance Authority Rev. (Resurrection Health), 6.125%, 2025 | 380,000 | 384,860 | ||||
| Illinois Finance Authority Rev. (Silver Cross Hospital & Medical Centers), 7%, 2044 | 1,140,000 | 1,183,172 | ||||
| Louisville & Jefferson County, KY, Metropolitan Government Healthcare Systems Rev. (Norton Healthcare, Inc.), 5.25%, 2036 | 1,820,000 | 1,742,250 | ||||
| Michigan Hospital Finance Authority Rev. (Henry Ford Health System), 5.625%, 2029 | 245,000 | 240,563 | ||||
| Michigan Hospital Finance Authority Rev. (Henry Ford Health System), 5.75%, 2039 | 2,450,000 | 2,365,475 | ||||
| New Hampshire Business Finance Authority Rev. (Elliot Hospital Obligated Group), “A”, 6%, 2027 | 790,000 | 800,823 | ||||
| New Hampshire Business Finance Authority Rev. (Elliot Hospital Obligated Group), “A”, 6.125%, 2039 | 1,110,000 | 1,115,139 | ||||
| New Hampshire Business Finance Authority Rev. (Huggins Hospital), 6.875%, 2039 | 90,000 | 89,942 | ||||
| New Hanover County, NC, Hospital Rev. (New Hanover Regional Medical Center), NATL, 5%, 2019 | 6,225,000 | 6,282,706 | ||||
| North Carolina Hospital Authority Mortgage Rev. (Johnston Memorial), AGM, 5.25%, 2036 | 1,500,000 | 1,527,390 | ||||
| North Carolina Medical Care Commission, (Morehead Memorial Hospital), AGM, 5%, 2026 | 2,000,000 | 2,039,360 | ||||
| North Carolina Medical Care Commission, Health Care Facilities Rev. (Cleveland County Healthcare), “A”, AMBAC, 5%, 2035 | 1,155,000 | 1,027,846 | ||||
| North Carolina Medical Care Commission, Health Care Facilities Rev. (Duke University Health Systems), “A”, 5%, 2042 | 3,500,000 | 3,543,365 | ||||
29
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Healthcare Revenue - Hospitals - continued | ||||||
| North Carolina Medical Care Commission, Health Care Facilities Rev. (Novant Health Obligation Group), 5%, 2039 | $ | 1,945,000 | $ | 1,941,946 | ||
| North Carolina Medical Care Commission, Health Care Facilities Rev. (Wakemed), AMBAC, 5%, 2021 | 2,045,000 | 2,065,430 | ||||
| North Carolina Medical Care Commission, Health Care Facilities Rev. (Wakemed), “A”, ASSD GTY, 5.625%, 2038 | 500,000 | 515,855 | ||||
| North Carolina Medical Care Commission, Health System Rev. (Mission Health System, Inc.), 5%, 2025 | 1,600,000 | 1,655,504 | ||||
| North Carolina Medical Care Commission, Health System Rev. (Mission Health System, Inc.), 4.75%, 2035 | 2,000,000 | 1,945,240 | ||||
| North Carolina Medical Care Commission, Hospital Rev. (Betsy Johnson Health Care System), AGM, 5.125%, 2032 | 900,000 | 904,689 | ||||
| North Carolina Medical Care Commission, Hospital Rev. (Mission-St. Joseph Health Systems), 5.5%, 2011 (c) | 2,825,000 | 3,055,718 | ||||
| North Carolina Medical Care Commission, Hospital Rev. (Southeastern Regional Medical Center), 5.375%, 2032 | 3,330,000 | 3,239,424 | ||||
| North Carolina Medical Care Commission, Hospital Rev. (The North Carolina Baptist Hospitals), 5%, 2034 | 3,000,000 | 3,006,900 | ||||
| North Carolina Medical Care Commission, Hospital Rev. (Wilson Memorial Hospital), AMBAC, 0%, 2013 | 1,000,000 | 879,490 | ||||
| North Carolina Medical Care Commission, Hospital Rev. (Wilson Memorial Hospital), AMBAC, 0%, 2015 | 1,140,000 | 889,747 | ||||
| North Carolina Medical Care Commission, Hospital Rev., Unrefunded (St. Joseph’s), NATL, 5.1%, 2018 | 525,000 | 526,559 | ||||
| Northern Hospital District, Surry County, NC, Health Care Facilities Rev., RADIAN, 5.5%, 2019 | 980,000 | 983,312 | ||||
| Northern Hospital District, Surry County, NC, Health Care Facilities Rev., 6.25%, 2038 | 1,000,000 | 1,016,300 | ||||
| Onslow County, NC, Hospital Authority (Onslow Memorial Hospital Project), NATL, 5%, 2026 | 1,155,000 | 1,172,879 | ||||
| Pitt County, NC, Rev., Pitt County Memorial Hospital, ETM, 5.25%, 2021 (c) | 10,135,000 | 10,909,111 | ||||
| Royal Oak, MI, Hospital Finance Authority Rev. (William Beaumont Hospital), 8.25%, 2039 | 2,040,000 | 2,416,298 | ||||
| St. Louis Park, MN, Health Care Facilities Rev. (Nicollett Health Services), 5.75%, 2039 | 1,930,000 | 1,918,980 | ||||
| St. Petersburg, FL, Health Facilities Authority Rev., 6.5%, 2039 | 470,000 | 508,329 | ||||
| Washington Health Care Facilities Authority Rev. (Central Washington Health Services), 6.75%, 2029 | 270,000 | 287,118 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| Healthcare Revenue - Hospitals - continued | ||||||
| Washington Health Care Facilities Authority Rev. (Central Washington Health Services), 7%, 2039 | $ | 635,000 | $ | 680,841 | ||
| Wisconsin Health & Educational Facilities Authority Rev. (ProHealth Care, Inc. Obligated Group), 6.625%, 2039 | 2,195,000 | 2,361,359 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (Wheaton Franciscan Services), 5.25%, 2031 | 1,495,000 | 1,372,664 | ||||
| $ | 75,856,487 | |||||
| Healthcare Revenue - Long Term Care - 0.7% | ||||||
| North Carolina Medical Care Commission, Health Care Facilities Rev. (Arbor Acres Community), 6.375%, 2012 (c) | $ | 1,000,000 | $ | 1,104,220 | ||
| North Carolina Medical Care Commission, Health Care Facilities Rev. (Givens Estates), 6.5%, 2013 (c) | 800,000 | 935,160 | ||||
| North Carolina Medical Care Commission, Retirement Facilities Rev. (Brookwood), 5.25%, 2032 | 750,000 | 529,455 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (St. John’s Community, Inc.), “A”, 7.25%, 2029 | 35,000 | 36,058 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (St. John’s Community, Inc.), “A”, 7.625%, 2039 | 220,000 | 230,142 | ||||
| $ | 2,835,035 | |||||
| Industrial Revenue - Other - 0.2% | ||||||
| Virgin Islands Public Finance Authority, Refinery Facilities Rev. (Hovensa Coker Project), 5.875%, 2022 | $ | 860,000 | $ | 858,056 | ||
| Miscellaneous Revenue - Other - 1.4% | ||||||
| Durham County, NC, Industrial Facilities & Pollution Control Financing Authority Rev. (Research Triangle Institute), 5%, 2024 | $ | 1,000,000 | $ | 1,117,740 | ||
| Durham County, NC, Industrial Facilities & Pollution Control Financing Authority Rev. (Research Triangle Institute), 5%, 2025 | 1,000,000 | 1,116,880 | ||||
| Wake County, NC (Hammond Road Detention Center), 5%, 2023 | 550,000 | 610,924 | ||||
| Wake County, NC, Annual Appropriation Ltd., Obligation Bonds, “2009”, 5%, 2032 | 3,000,000 | 3,185,340 | ||||
| $ | 6,030,884 | |||||
| Multi-Family Housing Revenue - 2.1% | ||||||
| Charlotte, NC, Housing Authority Rev., GNMA, 4.8%, 2048 | $ | 2,000,000 | $ | 1,866,860 | ||
| Charlotte, NC, Housing Authority Rev., Mortgage Rocky Branch II, GNMA, 4.65%, 2035 | 2,000,000 | 1,818,620 | ||||
| Elizabeth City, NC, Multi-Family Housing Rev. (Walker Landing), “A”, GNMA, 5.125%, 2049 | 1,500,000 | 1,339,845 | ||||
| Mecklenburg County, NC (Little Rock Apartments), FNMA, 5.15%, 2022 | 1,000,000 | 1,027,610 | ||||
30
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Multi-Family Housing Revenue - continued | ||||||
| North Carolina Housing Finance Agency, “H”, FHA, 6.05%, 2028 | $ | 2,015,000 | $ | 2,020,219 | ||
| North Carolina Medical Care Commission, Health Care Facilities Rev., “A” (ARC Projects), 5.8%, 2034 | 1,000,000 | 985,850 | ||||
| $ | 9,059,004 | |||||
| Sales & Excise Tax Revenue - 2.1% | ||||||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., 0%, 2034 | $ | 4,540,000 | $ | 953,718 | ||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “A”, 5.5%, 2028 | 1,740,000 | 1,825,190 | ||||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “A”, 0%, 2033 | 4,135,000 | 934,593 | ||||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “A”, 5.375%, 2039 | 5,190,000 | 5,278,697 | ||||
| $ | 8,992,198 | |||||
| Single Family Housing - State - 4.0% | ||||||
| North Carolina Housing Finance Agency Rev., “15-A”, AGM, 4.95%, 2032 | $ | 395,000 | $ | 377,742 | ||
| North Carolina Housing Finance Agency Rev., “19-A”, 5.1%, 2030 | 2,325,000 | 2,304,819 | ||||
| North Carolina Housing Finance Agency Rev., “23-A”, 4.8%, 2037 | 2,020,000 | 1,837,291 | ||||
| North Carolina Housing Finance Agency Rev., “24-A”, 4.75%, 2026 | 1,965,000 | 1,883,256 | ||||
| North Carolina Housing Finance Agency Rev., “25-A”, 5.75%, 2037 | 1,455,000 | 1,500,032 | ||||
| North Carolina Housing Finance Agency Rev., “29-A”, 4.85%, 2038 | 1,990,000 | 1,816,631 | ||||
| North Carolina Housing Finance Agency Rev., “31-A”, 5.25%, 2038 | 1,990,000 | 1,935,593 | ||||
| North Carolina Housing Finance Agency Rev., “5-A”, 5.55%, 2019 | 1,700,000 | 1,742,993 | ||||
| North Carolina Housing Finance Agency Rev., “7-A”, 6.15%, 2020 | 385,000 | 386,117 | ||||
| North Carolina Housing Finance Agency Rev., “A”, 5.25%, 2020 | 1,140,000 | 1,140,809 | ||||
| North Carolina Housing Finance Agency Rev., “A”, 5.375%, 2023 | 210,000 | 211,974 | ||||
| North Carolina Housing Finance Agency Rev., “PP”, FHA, 6.15%, 2017 | 640,000 | 640,518 | ||||
| North Carolina Housing Finance Agency Rev., “RR”, 5.85%, 2028 | 1,225,000 | 1,227,609 | ||||
| $ | 17,005,384 | |||||
| State & Agency - Other - 5.1% | ||||||
| Brunswick County, NC, COP, AGM, 5.5%, 2010 (c) | $ | 1,000,000 | $ | 1,018,070 | ||
| Cabarrus County, NC, Installment Financing Contract, 5%, 2021 | 5,500,000 | 5,664,395 | ||||
| Carteret County, NC, AMBAC, 5.625%, 2020 | 1,010,000 | 1,023,615 | ||||
| Charlotte, NC, COP (Public Safety Facilities), “D”, 5.5%, 2010 (c) | 3,000,000 | 3,053,970 | ||||
| Charlotte, NC, COP (Transit Projects), 5%, 2033 | 3,000,000 | 3,151,380 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| State & Agency - Other - continued | ||||||
| Charlotte, NC, COP (Transit Projects), “E”, 5%, 2035 | $ | 1,990,000 | $ | 2,059,232 | ||
| Charlotte, NC, COP, “E”, 5%, 2026 | 760,000 | 828,073 | ||||
| Charlotte, NC, COP, “E”, 5%, 2034 | 2,000,000 | 2,120,440 | ||||
| Harnett County, NC, COP, AGM, 5.5%, 2010 (c) | 1,225,000 | 1,279,145 | ||||
| Harnett County, NC, COP, AGM, 5.25%, 2015 | 1,020,000 | 1,099,162 | ||||
| Rockingham, NC, COP, AMBAC, 5.125%, 2024 | 350,000 | 361,221 | ||||
| $ | 21,658,703 | |||||
| State & Local Agencies - 5.9% | ||||||
| California Public Works Board Lease Rev. (Various Capital Projects), “G-1”, 5.75%, 2030 | $ | 645,000 | $ | 644,994 | ||
| Charlotte, NC, COP (NASCAR Hall of Fame), “C”, 5%, 2039 | 5,130,000 | 5,395,118 | ||||
| Delaware Valley, PA, Regional Finance Authority, “C”, FRN, 0.919%, 2037 | 2,260,000 | 1,603,221 | ||||
| FYI Properties Lease Rev. (Washington State Project), 5.5%, 2034 | 1,540,000 | 1,642,487 | ||||
| Harnett County, NC, COP, ASSD GTY, 5%, 2029 | 400,000 | 423,464 | ||||
| Iredell County, NC, Public Facilities (School Projects), AMBAC, 5.5%, 2010 (c) | 1,000,000 | 1,018,070 | ||||
| Iredell County, NC, Public Facilities (School Projects), AGM, 5.125%, 2027 | 3,230,000 | 3,404,614 | ||||
| Massachusetts State College, Building Authority Project Rev., “A”, 5.5%, 2049 | 2,660,000 | 2,850,057 | ||||
| Mecklenburg County, NC, COP, “A”, 5%, 2028 | 350,000 | 370,440 | ||||
| Mooresville, NC, COP, 5%, 2032 | 3,120,000 | 3,175,848 | ||||
| Rutherford County, NC, COP (Rutherford County School), AMBAC, 5%, 2023 | 840,000 | 872,609 | ||||
| Salisbury, NC, COP, ASSD GTY, 5.625%, 2026 | 1,000,000 | 1,100,210 | ||||
| Wilmington, NC, COP, “A”, 5%, 2038 | 2,650,000 | 2,722,504 | ||||
| $ | 25,223,636 | |||||
| Tax - Other - 1.3% | ||||||
| Guam Government Ltd. Obligation Rev., “A”, 5.375%, 2024 | $ | 420,000 | $ | 434,515 | ||
| Guam Government Ltd. Obligation Rev., “A”, 5.625%, 2029 | 145,000 | 148,513 | ||||
| New York, NY, City Transitional Finance Authority Building Aid Rev., “S-3”, 5.25%, 2039 | 1,000,000 | 1,048,630 | ||||
| Puerto Rico Infrastructure Financing Authority, Special Tax Rev., “C”, FGIC, 5.5%, 2022 | 1,740,000 | 1,786,667 | ||||
| Virgin Islands Public Finance Authority Rev. (Diageo), “A”, 6.625%, 2029 | 1,005,000 | 1,083,842 | ||||
| Virgin Islands Public Finance Authority Rev., “A-1”, 5%, 2029 | 305,000 | 297,579 | ||||
| Virgin Islands Public Finance Authority Rev., “A-1”, 5%, 2039 | 350,000 | 320,170 | ||||
| Virgin Islands Public Finance Authority Rev., “B”, 5%, 2025 | 305,000 | 306,369 | ||||
| $ | 5,426,285 | |||||
31
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Tobacco - 0.5% | ||||||
| Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 5.125%, 2024 | $ | 515,000 | $ | 473,306 | ||
| Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 5.875%, 2030 | 520,000 | 438,032 | ||||
| Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 5.875%, 2047 | 680,000 | 493,456 | ||||
| Buckeye, OH, Tobacco Settlement Financing Authority, “A-3”, 0%, 2037 | 1,295,000 | 881,701 | ||||
| $ | 2,286,495 | |||||
| Transportation - Special Tax - 3.3% | ||||||
| Commonwealth of Puerto Rico Highway & Transportation Authority Rev., AGM, 6%, 2018 | $ | 10,850,000 | $ | 12,285,889 | ||
| Commonwealth of Puerto Rico Highway & Transportation Authority Rev., “CC”, AGM, 5.5%, 2028 | 1,715,000 | 1,895,024 | ||||
| $ | 14,180,913 | |||||
| Universities - Colleges - 18.5% | ||||||
| Appalachian State University, NC, Rev., AGM, 5.6%, 2010 (c) | $ | 2,285,000 | $ | 2,341,348 | ||
| Appalachian State University, NC, Rev., “C”, NATL, 5%, 2030 | 1,000,000 | 1,019,420 | ||||
| East Carolina University, NC, Rev., “A”, AMBAC, 5.25%, 2011 (c) | 1,375,000 | 1,460,704 | ||||
| Florida State University Board of Governors, System Improvement Rev., 6.25%, 2030 | 1,000,000 | 1,131,340 | ||||
| Illinois Finance Authority Rev. (Roosevelt University Project), 6.25%, 2029 | 2,000,000 | 2,053,200 | ||||
| New Jersey Educational Facilities Authority Rev. (University of Medicine & Dentistry), “B”, 6%, 2017 | 1,545,000 | 1,742,544 | ||||
| New York Dormitory Authority Rev., Non-State Supported Debt (New York University), “A”, 5.25%, 2048 | 3,360,000 | 3,501,053 | ||||
| North Carolina Capital Facilities Finance Agency, Educational Facilities Rev. (High Point University Project), 5.125%, 2018 | 510,000 | 547,694 | ||||
| North Carolina Capital Facilities Finance Agency, Educational Facilities Rev. (High Point University Project), 5.125%, 2021 | 300,000 | 322,173 | ||||
| North Carolina Capital Facilities Finance Agency, Educational Facilities Rev. (Wake Forest University), 5%, 2028 | 980,000 | 1,051,599 | ||||
| North Carolina Capital Facilities Finance Agency, Educational Facilities Rev. (Wake Forest University), 5%, 2029 | 865,000 | 926,882 | ||||
| North Carolina Capital Facilities Finance Agency, Educational Facilities Rev. (Wake Forest University), 5%, 2031 | 2,000,000 | 2,130,920 | ||||
| North Carolina Capital Facilities Finance Agency, Educational Facilities Rev. (Wake Forest University), 5%, 2038 | 1,000,000 | 1,047,500 | ||||
| North Carolina Capital Facilities, Finance Agency Rev. (Duke University), “A”, 5.25%, 2012 (c) | 2,000,000 | 2,209,240 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| Universities - Colleges - continued | ||||||
| North Carolina Capital Facilities, Finance Agency Rev. (Duke University), “A”, 5%, 2038 | $ | 2,500,000 | $ | 2,602,800 | ||
| North Carolina Capital Facilities, Finance Agency Rev. (Duke University), “A”, 5%, 2039 | 3,500,000 | 3,607,415 | ||||
| North Carolina Capital Facilities, Finance Agency Rev. (Duke University), “B”, 4.25%, 2042 | 2,020,000 | 1,882,418 | ||||
| North Carolina Capital Facilities, Finance Agency Rev. (Duke University), “B”, 4.75%, 2042 | 3,000,000 | 3,023,280 | ||||
| North Carolina Capital Facilities, Finance Agency Rev. (Johnson & Wales University), “A”, SYNCORA, 5.25%, 2022 | 1,870,000 | 1,875,610 | ||||
| North Carolina Capital Facilities, Finance Agency Rev. (Meredith College), 6%, 2031 | 2,500,000 | 2,538,375 | ||||
| North Carolina Capital Facilities, Finance Prerefunded (Duke University), “A”, 5.125%, 2011 (c)(f) | 4,050,000 | 4,321,350 | ||||
| North Carolina Capital Facilities, Finance Unrefunded (Duke University) “A”, 5.125%, 2041 | 950,000 | 961,163 | ||||
| Puerto Rico Industrial Tourist Authority (University Plaza), “A”, NATL, 5%, 2020 | 2,180,000 | 2,182,507 | ||||
| University of California Rev., “J”, AGM, 4.5%, 2035 | 3,250,000 | 3,113,045 | ||||
| University of North Carolina System, Pool Rev., “B-1”, 5.25%, 2024 | 1,615,000 | 1,774,271 | ||||
| University of North Carolina System, Pool Rev., “B-1”, 5.25%, 2025 | 1,705,000 | 1,862,883 | ||||
| University of North Carolina System, Pool Rev., “B-1”, 4.75%, 2035 | 1,230,000 | 1,221,009 | ||||
| University of North Carolina, Chapel Hill, 5%, 2028 | 2,000,000 | 2,091,460 | ||||
| University of North Carolina, Chapel Hill, 5%, 2031 | 3,250,000 | 3,462,258 | ||||
| University of North Carolina, Chapel Hill, 5%, 2036 | 3,000,000 | 3,163,560 | ||||
| University of North Carolina, Chapel Hill, “A”, ASSD GTY, 5%, 2034 | 200,000 | 209,734 | ||||
| University of North Carolina, Greensboro Rev., “A”, AGM, 5%, 2020 | 2,835,000 | 2,906,867 | ||||
| University of North Carolina, Systems Pool Rev., “B”, NATL, 5%, 2033 | 1,180,000 | 1,201,570 | ||||
| University of North Carolina, Systems Pool Rev., “B”, 5.125%, 2034 | 2,000,000 | 2,062,900 | ||||
| University of North Carolina, Systems Pool Rev., “C”, AMBAC, 5%, 2029 | 2,000,000 | 2,052,980 | ||||
| University of North Carolina, Wilmington Rev., “A”, AMBAC, 5%, 2019 | 1,375,000 | 1,417,378 | ||||
| University of North Carolina, Wilmington, COP (Student Housing Project), FGIC, 5%, 2028 | 1,825,000 | 1,856,773 | ||||
| University of North Carolina, Wilmington, COP (Student Housing Project), ASSD GTY, 5%, 2032 | 2,910,000 | 2,956,560 | ||||
32
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Universities - Colleges - continued | ||||||
| University of North Carolina, Wilmington, COP (Student Housing Project), ASSD GTY, 4.75%, 2038 | $ | 3,400,000 | $ | 3,342,744 | ||
| $ | 79,176,527 | |||||
| Utilities - Investor Owned - 0.6% | ||||||
| Wake County, NC, Industrial Facilities & Pollution Control Rev. (Carolina Power & Light Co.), 5.375%, 2017 | $ | 2,500,000 | $ | 2,621,125 | ||
| Utilities - Municipal Owned - 12.3% | ||||||
| Harris County, TX, Cultural Education Facilities Financial Corp., Thermal Utilities Rev. (Teco Project), “A”, 5.25%, 2035 | $ | 2,605,000 | $ | 2,733,114 | ||
| Long Island Power Authority, Electric Systems Rev., “A”, BHAC, 5.5%, 2033 | 1,525,000 | 1,676,814 | ||||
| Long Island Power Authority, Electric Systems Rev., “A”, 6%, 2033 | 520,000 | 580,824 | ||||
| North Carolina Eastern Municipal Power Agency, AMBAC, 6%, 2018 | 14,245,000 | 16,204,827 | ||||
| North Carolina Eastern Municipal Power Agency, Power Systems Rev., “A”, 5%, 2019 | 2,745,000 | 2,941,377 | ||||
| North Carolina Municipal Power Agency, Catawba Electric Rev., NATL, 6%, 2011 | 5,000,000 | 5,184,300 | ||||
| North Carolina Municipal Power Agency, Catawba Electric Rev., “A”, NATL, 5.25%, 2019 (u) | 10,000,000 | 10,610,700 | ||||
| North Carolina Municipal Power Agency, Catawba Electric Rev., “A”, NATL, 5.25%, 2020 (u) | 6,000,000 | 6,356,640 | ||||
| North Carolina Municipal Power Agency, Catawba Electric Rev., “A”, 5%, 2030 | 2,500,000 | 2,574,725 | ||||
| Puerto Rico Electric Power Authority, Power Rev., “XX”, 5.25%, 2040 | 3,840,000 | 3,788,122 | ||||
| $ | 52,651,443 | |||||
| Utilities - Other - 1.2% | ||||||
| California M-S-R Energy Authority Gas Rev., “A”, 6.5%, 2039 | $ | 1,695,000 | $ | 1,801,768 | ||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2019 | 1,055,000 | 1,074,539 | ||||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2026 | 1,290,000 | 1,263,555 | ||||
| Tennessee Energy Acquisition Corp., Gas Rev., “C”, 5%, 2021 | 805,000 | 802,947 | ||||
| $ | 4,942,809 | |||||
| Water & Sewer Utility Revenue - 9.8% | ||||||
| Asheville, NC, Water & Sewer Systems Rev., NATL, 5%, 2032 | $ | 1,000,000 | $ | 1,033,340 | ||
| California, United Water Conservation District, COP, 5%, 2039 | 2,995,000 | 2,878,944 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| Water & Sewer Utility Revenue - continued | ||||||
| Cape Fear Public Utility Authority, Water & Sewer System Rev., 5%, 2035 | $ | 1,000,000 | $ | 1,044,200 | ||
| Charlotte, NC, Storm Water Fee Rev., 6%, 2010 (c) | 3,180,000 | 3,239,879 | ||||
| Charlotte, NC, Storm Water Fee Rev., 5%, 2034 | 3,675,000 | 3,794,254 | ||||
| Charlotte, NC, Water & Sewer System Rev., 5.5%, 2017 | 1,650,000 | 1,726,329 | ||||
| Charlotte, NC, Water & Sewer System Rev., “B”, ASSD GTY, 4.5%, 2039 | 3,000,000 | 2,951,850 | ||||
| Detroit, MI, Sewer Disposal System Rev., “B”, AGM, 7.5%, 2033 | 805,000 | 960,228 | ||||
| Durham County, NC, Enterprise Systems Rev., NATL, 5%, 2023 | 1,675,000 | 1,736,640 | ||||
| Fayetteville, NC, Public Works Commission Rev., “B”, 5%, 2035 | 1,750,000 | 1,842,400 | ||||
| Greenville, NC, Combined Enterprise Systems Rev., AGM, 5%, 2016 | 1,005,000 | 1,045,270 | ||||
| Greenville, NC, Combined Enterprise Systems Rev., AGM, 5.25%, 2019 | 1,170,000 | 1,208,891 | ||||
| Greenville, NC, Utilities Commission, Combined Enterprise System Rev., “A”, AGM, 5%, 2033 | 2,400,000 | 2,493,120 | ||||
| Harnett County, NC, Water & Sewer Systems Rev., AMBAC, 5%, 2028 | 700,000 | 727,587 | ||||
| High Point, NC, Combined Enterprise System Rev., AGM, 5%, 2033 | 2,000,000 | 2,106,740 | ||||
| Kannapolis, NC, Water & Sewer Rev., “B”, AGM, 5.25%, 2021 | 1,000,000 | 1,019,850 | ||||
| King County, WA, Sewer Rev., 5%, 2038 | 3,520,000 | 3,645,312 | ||||
| New York Environmental Facilities Corp., Clean Water & Drinking Rev., “B”, 5%, 2033 | 3,295,000 | 3,482,947 | ||||
| Oak Island, NC, Enterprise System Rev., ASSD GTY, 6%, 2034 | 1,000,000 | 1,065,840 | ||||
| Winston Salem, NC, Water & Sewer Systems Rev., 5%, 2033 | 1,600,000 | 1,662,432 | ||||
| Winston-Salem, NC, Water & Sewer Systems Rev., 5%, 2034 | 2,000,000 | 2,131,400 | ||||
| $ | 41,797,453 | |||||
| Total Municipal Bonds (Identified Cost, $411,174,430) | $ | 425,766,911 | ||||
| Money Market Funds (v) - 1.5% | ||||||
| MFS Institutional Money Market Portfolio, 0.17%, at Cost and Net Asset Value | 6,412,346 | $ | 6,412,346 | |||
| Total Investments (Identified Cost, $417,586,776) | $ | 432,179,257 | ||||
| Other Assets, Less Liabilities - (1.3)% | (5,513,833) | |||||
| Net Assets - 100.0% | $ | 426,665,424 | ||||
33
Table of Contents
Portfolio of Investments – continued
Derivative Contracts at 3/31/10
Futures Contracts Outstanding at 3/31/10
| Description | Currency | Contracts | Value | Expiration Date | Unrealized Appreciation (Depreciation) | |||||
| Asset Derivatives | ||||||||||
| Interest Rate Futures | ||||||||||
| U.S. Treasury Bond 30 yr (Short) | USD | 35 | $4,064,375 | Jun-10 | $ 3,979 | |||||
| U.S. Treasury Note 10 yr (Short) | USD | 40 | 4,650,000 | Jun-10 | 16,331 | |||||
| $20,310 | ||||||||||
At March 31, 2010, the fund had sufficient cash and/or other liquid securities to cover any commitments under these derivative contracts.
See Portfolio Footnotes and Notes to Financial Statements
34
Table of Contents
PORTFOLIO OF INVESTMENTS
3/31/10
MFS® PENNSYLVANIA MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.
| Municipal Bonds - 97.6% | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Airport & Port Revenue - 1.2% | ||||||
| Allegheny County, PA, Airport Rev. (Pittsburgh International Airport), NATL, 5.75%, 2014 | $ | 1,000,000 | $ | 1,067,980 | ||
| Allegheny County, PA, Airport Rev. (Pittsburgh International Airport), FGIC, 6.125%, 2017 | 500,000 | 504,545 | ||||
| $ | 1,572,525 | |||||
| General Obligations - General Purpose - 5.3% | ||||||
| Allegheny County, PA, Unrefunded Balance, “C53”, FGIC, 5.3%, 2018 | $ | 285,000 | $ | 291,267 | ||
| Allegheny County, PA, Unrefunded Balance, “C53”, FGIC, 5.4%, 2019 | 290,000 | 295,788 | ||||
| Commonwealth of Puerto Rico, “A”, 5.375%, 2033 | 250,000 | 245,263 | ||||
| Commonwealth of Puerto Rico, “A”, 6%, 2038 | 425,000 | 440,589 | ||||
| Commonwealth of Puerto Rico, “A”, ETM, FGIC, 5.5%, 2015 (c)(u) | 1,860,000 | 2,189,127 | ||||
| Luzerne County, PA, NATL, 5.25%, 2012 (c) | 500,000 | 553,475 | ||||
| Luzerne County, PA, AGM, 6.75%, 2023 | 500,000 | 532,215 | ||||
| North Huntingdon Township, PA, AMBAC, 5.25%, 2019 | 500,000 | 512,075 | ||||
| Pennsylvania Finance Authority Rev. (Penn Hills), “A”, FGIC, 5.45%, 2010 (c) | 85,000 | 87,795 | ||||
| Pennsylvania Finance Authority Rev. (Penn Hills), “A”, FGIC, 5.45%, 2019 | 415,000 | 418,681 | ||||
| Puerto Rico Public Buildings Authority Rev., Guaranteed, “M”, 6.25%, 2023 | 450,000 | 493,857 | ||||
| Reading, PA, AGM, 5%, 2029 | 750,000 | 749,040 | ||||
| State of Pennsylvania, 6.25%, 2010 | 300,000 | 304,185 | ||||
| $ | 7,113,357 | |||||
| General Obligations - Improvement - 0.1% | ||||||
| Guam Government, “A”, 6.75%, 2029 | $ | 75,000 | $ | 79,902 | ||
| Guam Government, “A”, 7%, 2039 | 90,000 | 96,493 | ||||
| $ | 176,395 | |||||
| General Obligations - Schools - 14.7% | ||||||
| Allegheny Valley, PA, School District, “A”, NATL, 5%, 2028 | $ | 1,000,000 | $ | 1,024,140 | ||
| Bucks County, PA, Centennial School District, “B”, AGM, 5.25%, 2037 | 1,000,000 | 1,041,700 | ||||
| Conneaut, PA, School District, “B”, AGM, 0%, 2031 | 1,150,000 | 369,012 | ||||
| Conneaut, PA, School District, “B”, AGM, 0%, 2033 | 760,000 | 214,981 | ||||
| Daniel Boone, PA, School District, 5%, 2032 | 500,000 | 521,107 | ||||
| Deer Lakes, PA, School District, ASSD GTY, 5.375%, 2034 | 1,275,000 | 1,359,622 | ||||
| Garnet Valley, PA, School District, FGIC, 5.5%, 2015 | 750,000 | 795,878 | ||||
| Gateway, PA, Allegheny School District, FGIC, 5.2%, 2023 | 1,000,000 | 1,032,110 | ||||
| Gateway, PA, Allegheny School District, FGIC, 5%, 2032 | 740,000 | 745,691 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| General Obligations - Schools - continued | ||||||
| North Allegheny, PA, School District, FGIC, 5.05%, 2022 | $ | 590,000 | $ | 599,228 | ||
| North Schuylkill, PA, School District, FGIC, 5%, 2028 | 650,000 | 658,262 | ||||
| Palmyra, PA, School District, FGIC, 5.375%, 2016 | 820,000 | 857,597 | ||||
| Pennridge, PA, School District, NATL, 5%, 2013 (c) | 50,000 | 55,337 | ||||
| Pennsylvania Public School Building (Garnet Valley School District), AMBAC, 5.5%, 2011 (c) | 1,005,000 | 1,045,270 | ||||
| Perkiomen Valley, PA, School District, AGM, 5%, 2011 (c) | 280,000 | 291,620 | ||||
| Perkiomen Valley, PA, School District, AGM, 5%, 2019 | 220,000 | 223,234 | ||||
| Philadelphia, PA, School District, AGM, 5.75%, 2011 (c) | 500,000 | 521,900 | ||||
| Reading, PA, School District, AGM, 5%, 2035 (f) | 2,240,000 | 2,323,910 | ||||
| Scranton, PA, School District, “A”, AGM, 5%, 2027 | 1,340,000 | 1,408,581 | ||||
| South Park, PA, School District, FGIC, 5%, 2019 | 750,000 | 761,048 | ||||
| State Public School Building Authority, PA School (Colonial Intermediate Unit 20), FGIC, 5%, 2030 | 500,000 | 505,810 | ||||
| Upper Moreland, PA, School District, ASSD GTY, 5%, 2029 | 1,650,000 | 1,734,249 | ||||
| West Mifflin, PA, Area School District, AGM, 5.125%, 2031 | 500,000 | 529,430 | ||||
| Whitehall-Coplay, PA, School District, “A”, AGM, 5.375%, 2034 | 1,000,000 | 1,060,910 | ||||
| $ | 19,680,627 | |||||
| Healthcare Revenue - Hospitals - 18.8% | ||||||
| Allegheny County, PA, Hospital Development Authority Rev. (Jefferson Regional Medical Center), “A”, 4.75%, 2025 | $ | 850,000 | $ | 746,309 | ||
| Allegheny County, PA, Hospital Development Authority Rev. (South Hills Health Systems), “B”, 6.75%, 2010 (c) | 555,000 | 557,320 | ||||
| Allegheny County, PA, Hospital Development Authority Rev. (University of Pittsburgh Medical Center), “A”, 5.375%, 2029 | 1,000,000 | 1,027,690 | ||||
| Allegheny County, PA, Hospital Development Authority Rev. (UPMC Health Systems), 5%, 2018 | 500,000 | 543,170 | ||||
| Allegheny County, PA, Hospital Development Authority Rev. (West Penn Allegheny Health), 9.25%, 2010 (c) | 150,000 | 161,049 | ||||
| Allegheny County, PA, Hospital Development Authority Rev. (West Penn Allegheny Health), “A”, 5%, 2028 | 500,000 | 397,695 | ||||
| Allegheny County, PA, Hospital Development Authority Rev. (West Penn Allegheny Health), “B”, 9.25%, 2010 (c) | 50,000 | 53,683 | ||||
35
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Healthcare Revenue - Hospitals - continued | ||||||
| Blair County, PA, Hospital Authority Rev. (Altoona Regional Health System), 6%, 2039 | $ | 750,000 | $ | 751,965 | ||
| Butler County, PA, Hospital Development Authority Rev. (Butler Health System, Inc.), 7.25%, 2039 | 500,000 | 561,105 | ||||
| Centre County, PA, Hospital Authority Rev. (Mount Nittany Medical Center), ASSD GTY, 5.875%, 2029 | 500,000 | 517,985 | ||||
| Dauphin County, PA, General Authority Health Systems Rev. (Pinnacle Health System), “A”, 5.75%, 2020 | 750,000 | 786,923 | ||||
| Delaware County, PA, Authority Hospital Rev. (Crozer Keystone Obligations Group), “A”, 5%, 2031 | 500,000 | 393,410 | ||||
| Erie County, PA, Hospital Authority Rev. (Hamot Health Foundation), AMBAC, 5.25%, 2017 | 675,000 | 681,588 | ||||
| Erie County, PA, Hospital Authority Rev. (St. Vincent’s Health), “A”, 7%, 2027 | 500,000 | 502,310 | ||||
| Escambia County, FL, Health Facilities Authority (Baptist Hospital, Inc.), “A”, 6%, 2036 | 305,000 | 295,563 | ||||
| Geisinger Authority, PA, Health System Rev., “A”, 5.125%, 2034 | 1,000,000 | 1,010,490 | ||||
| Illinois Finance Authority Rev. (Provena Health), “A”, 6%, 2028 | 500,000 | 492,395 | ||||
| Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Owensboro Medical Health System), “A”, 6.375%, 2040 | 390,000 | 386,603 | ||||
| Lancaster County, PA, Hospital Authority Rev., 5.5%, 2013 (c) | 500,000 | 565,220 | ||||
| Lebanon County, PA, Health Facilities Authority Rev. (Good Samaritan Hospital), 5%, 2018 | 200,000 | 190,044 | ||||
| Lebanon County, PA, Health Facilities Authority Rev. (Good Samaritan Hospital), 6%, 2035 | 850,000 | 757,639 | ||||
| Lehigh County, PA, General Purpose Authority (Good Shepherd Group), “A”, 5.625%, 2034 | 350,000 | 353,276 | ||||
| Lehigh County, PA, General Purpose Authority (Lehigh Valley Hospital), NATL, 7%, 2016 | 250,000 | 279,923 | ||||
| Lehigh County, PA, General Purpose Authority (Lehigh Valley Hospital), 5.25%, 2032 | 600,000 | 601,584 | ||||
| Lehigh County, PA, General Purpose Authority (St. Luke’s Bethlehem Hospital), 5.375%, 2013 (c) | 600,000 | 681,354 | ||||
| Lehigh County, PA, Hospital Rev. (Lehigh Valley Hospital), AGM, 5.25%, 2019 | 500,000 | 513,600 | ||||
| Lycoming County, PA, Health Authority Rev. (Susquehanna Health System), “A”, 5.75%, 2039 | 750,000 | 743,633 | ||||
| Michigan Hospital Finance Authority Rev. (Henry Ford Health System), 5.625%, 2029 | 75,000 | 73,642 | ||||
| Michigan Hospital Finance Authority Rev. (Henry Ford Health System), 5.75%, 2039 | 770,000 | 743,435 | ||||
| Monroe County, PA, Hospital Authority Rev. (Pocono Medical Center), 6%, 2014 (c) | 750,000 | 860,663 | ||||
| Monroe County, PA, Hospital Authority Rev. (Pocono Medical Center), 5%, 2027 | 250,000 | 239,318 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| Healthcare Revenue - Hospitals - continued | ||||||
| Monroe County, PA, Hospital Authority Rev. (Pocono Medical Center), 5.125%, 2037 | $ | 250,000 | $ | 230,895 | ||
| Mount Lebanon, PA, Hospital Authority Rev. (St. Clair Memorial Hospital), 5.625%, 2032 | 400,000 | 400,640 | ||||
| New Hampshire Business Finance Authority Rev. (Huggins Hospital), 6.875%, 2039 | 30,000 | 29,981 | ||||
| Northampton County, PA, General Purpose Authority Hospital Rev. (St. Luke’s Hospital), “A”, 5.5%, 2040 | 500,000 | 486,305 | ||||
| Pennsylvania Higher Educational Facilities Authority Rev. (UPMC Health), 6%, 2011 (c) | 650,000 | 684,665 | ||||
| Pennsylvania Higher Educational Facilities Authority Rev. (UPMC Health), 6.25%, 2011 (c) | 100,000 | 105,526 | ||||
| Philadelphia, PA, Health & Educational Facilities Rev. (Jeane Health), ETM, 6.6%, 2010 (c) | 30,000 | 30,452 | ||||
| Philadelphia, PA, Hospitals & Higher Education Facilities Authority (Temple University Health System), 5.5%, 2026 | 1,000,000 | 924,070 | ||||
| Philadelphia, PA, Hospitals & Higher Education Facilities Authority (The Children’s Hospital Foundation), “A”, 4.5%, 2037 | 850,000 | 791,869 | ||||
| Sayre, PA, Health Care Facilities Authority Rev. (Guthrie Health), “A”, 5.875%, 2011 (c) | 385,000 | 421,891 | ||||
| South Central, PA, General Authority Rev., 5.625%, 2011 (c) | 490,000 | 522,649 | ||||
| South Central, PA, General Authority Rev. (Wellspan Health Properties, Inc.), “A”, 6%, 2025 | 750,000 | 828,173 | ||||
| South Central, PA, General Authority Rev. (Wellspan Health Properties, Inc.), ETM, 5.625%, 2026 (c) | 110,000 | 114,938 | ||||
| St. Louis Park, MN, Health Care Facilities Rev. (Nicollett Health Services), 5.75%, 2039 | 665,000 | 661,203 | ||||
| St. Mary Hospital Authority, PA, Health System Rev. (Catholic Health East), “A”, 5%, 2033 | 500,000 | 490,230 | ||||
| St. Mary Hospital Authority, PA, Health System Rev. (Catholic Health East), “A”, 5%, 2040 | 500,000 | 481,680 | ||||
| St. Petersburg, FL, Health Facilities Authority Rev., 6.5%, 2039 | 155,000 | 167,640 | ||||
| West Shore, PA, Hospital Authority Rev. (Holy Spirit Hospital), 6.25%, 2032 | 350,000 | 350,697 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (Wheaton Franciscan Healthcare), 5.25%, 2018 | 530,000 | 534,807 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (Wheaton Franciscan Services), 5.25%, 2031 | 485,000 | 445,312 | ||||
| $ | 25,174,207 | |||||
| Healthcare Revenue - Long Term Care - 2.3% | ||||||
| Bucks County, PA, Industrial Development Authority Retirement Community Rev. (Ann’s Choice, Inc.), “A”, 6.125%, 2025 | $ | 250,000 | $ | 231,568 | ||
| Bucks County, PA, Industrial Development Authority Rev. (Lutheran Community Telford Center), 5.75%, 2037 | 300,000 | 235,461 | ||||
36
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Healthcare Revenue - Long Term Care - continued | ||||||
| Chartiers Valley, PA, Industrial & Commercial Development Authority (Asbury Health Center Project), 5.75%, 2022 | $ | 250,000 | $ | 225,383 | ||
| Cumberland County, PA, Municipal Authority Rev. (Diakon Lutheran Social Ministries), 6.375%, 2039 | 500,000 | 497,655 | ||||
| Cumberland County, PA, Municipal Authority Rev. (Presbyterian Homes), “A”, 5.45%, 2021 | 500,000 | 501,590 | ||||
| Cumberland County, PA, Municipal Authority, Retirement Community Rev. (Wesley), “A”, 7.25%, 2013 (c) | 110,000 | 127,978 | ||||
| Cumberland County, PA, Municipal Authority, Retirement Community Rev. (Wesley), “A”, 7.25%, 2013 (c) | 40,000 | 46,538 | ||||
| Lancaster County, PA, Hospital Authority Rev. (Willow Valley Retirement Project), 5.875%, 2031 | 500,000 | 500,225 | ||||
| Montgomery County, PA, Industrial Development Authority Retirement Community Rev. (Lanier Village Estates, Inc.), “A-1”, 6.25%, 2029 | 250,000 | 257,623 | ||||
| Montgomery County, PA, Industrial Development Authority Rev. (Whitemarsh Continuing Care), 6.25%, 2035 | 250,000 | 189,690 | ||||
| Travis County, TX, Health Facilities Development Corp. Rev. (Westminster Manor Health), 7%, 2030 | 65,000 | 64,995 | ||||
| Travis County, TX, Health Facilities Development Corp. Rev. (Westminster Manor Health), 7.125%, 2040 | 105,000 | 105,030 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (St. John’s Community, Inc.), “A”, 7.25%, 2029 | 10,000 | 10,302 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (St. John’s Community, Inc.), “A”, 7.625%, 2039 | 70,000 | 73,227 | ||||
| $ | 3,067,265 | |||||
| Human Services - 0.1% | ||||||
| Montgomery County, PA, Industrial Development Authority (Wordsworth Academy), 8%, 2024 | $ | 150,000 | $ | 145,386 | ||
| Industrial Revenue - Environmental Services - 0.4% | ||||||
| New Morgan, PA, Industrial Development Authority, Solid Waste Disposal Rev. (New Morgan Landfill Co., Inc./Browning Ferris, Inc.), 6.5%, 2019 | $ | 530,000 | $ | 532,624 | ||
| Industrial Revenue - Other - 1.3% | ||||||
| Bucks County, PA, Industrial Development Authority Rev. (USX Corp.), 5.4%, 2017 (b) | $ | 300,000 | $ | 316,149 | ||
| Pennsylvania Economic Development Financing Authority Rev. (Amtrak), 6.125%, 2021 | 150,000 | 153,578 | ||||
| Pennsylvania Economic Development Financing Authority, Solid Waste Disposal Rev. (Procter & Gamble), 5.375%, 2031 | 1,000,000 | 1,024,670 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| Industrial Revenue - Other - continued | ||||||
| Virgin Islands Public Finance Authority, Refinery Facilities Rev. (Hovensa Coker Project), 5.875%, 2022 | $ | 270,000 | $ | 269,390 | ||
| $ | 1,763,787 | |||||
| Miscellaneous Revenue - Other - 0.4% | ||||||
| Louisiana Local Government, Environmental Facilities & Community Development Authority Rev. (Air Cargo), 6.65%, 2025 | $ | 530,000 | $ | 498,227 | ||
| Parking - 0.4% | ||||||
| Pittsburgh, PA, Public Parking Authority Rev., AMBAC, 6%, 2010 (c) | $ | 500,000 | $ | 504,340 | ||
| Sales & Excise Tax Revenue - 0.6% | ||||||
| Pittsburgh & Allegheny County, PA, Sales Tax Rev. (Public Auditorium Hotel Room), AMBAC, 5.25%, 2017 | $ | 500,000 | $ | 505,580 | ||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “A”, 0%, 2033 | 1,300,000 | 293,826 | ||||
| $ | 799,406 | |||||
| Single Family Housing - Local - 0.9% | ||||||
| Allegheny County, PA, Residential Financing Authority, Single Family Mortgage Rev., “RR”, GNMA, 4.75%, 2025 | $ | 375,000 | $ | 368,910 | ||
| Allegheny County, PA, Residential Financing Authority, Single Family Mortgage Rev., “VV”, GNMA, 4.95%, 2037 | 880,000 | 829,514 | ||||
| $ | 1,198,424 | |||||
| Single Family Housing - State - 7.9% | ||||||
| Pennsylvania Housing Finance Agency, Single Family Mortgage Rev., 5.1%, 2020 | $ | 1,085,000 | $ | 1,089,253 | ||
| Pennsylvania Housing Finance Agency, Single Family Mortgage Rev., 5.25%, 2021 | 620,000 | 621,017 | ||||
| Pennsylvania Housing Finance Agency, Single Family Mortgage Rev., 4.75%, 2028 | 1,000,000 | 990,280 | ||||
| Pennsylvania Housing Finance Agency, Single Family Mortgage Rev., 5.25%, 2033 | 155,000 | 154,780 | ||||
| Pennsylvania Housing Finance Agency, Single Family Mortgage Rev., 5%, 2034 | 200,000 | 205,450 | ||||
| Pennsylvania Housing Finance Agency, Single Family Mortgage Rev., “100-A”, 5.35%, 2033 | 955,000 | 964,407 | ||||
| Pennsylvania Housing Finance Agency, Single Family Mortgage Rev., “103-C”, 5.4%, 2033 | 1,000,000 | 1,030,380 | ||||
| Pennsylvania Housing Finance Agency, Single Family Mortgage Rev., “105-C”, 4.875%, 2034 | 500,000 | 499,640 | ||||
| Pennsylvania Housing Finance Agency, Single Family Mortgage Rev., “92-A”, 4.75%, 2031 | 1,155,000 | 1,097,562 | ||||
| Pennsylvania Housing Finance Agency, Single Family Mortgage Rev., “93-A”, 5.75%, 2037 | 465,000 | 486,004 | ||||
| Pennsylvania Housing Finance Agency, Single Family Mortgage Rev., “94-A”, 5.1%, 2031 | 500,000 | 500,705 | ||||
| Pennsylvania Housing Finance Agency, Single Family Mortgage Rev., “95-A”, 4.875%, 2031 | 1,000,000 | 971,080 | ||||
37
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Single Family Housing - State - continued | ||||||
| Pennsylvania Housing Finance Agency, Single Family Mortgage Rev., “96-A”, 4.7%, 2037 | $ | 745,000 | $ | 674,694 | ||
| Pennsylvania Housing Finance Agency, Single Family Mortgage Rev., “97-A”, 4.5%, 2022 | 1,000,000 | 971,150 | ||||
| Pennsylvania Housing Finance Agency, Single Family Mortgage Rev., “A”, 4.875%, 2026 | 395,000 | 384,939 | ||||
| $ | 10,641,341 | |||||
| Solid Waste Revenue - 0.6% | ||||||
| Delaware County, PA, Industrial Development Authority, Resource Recovery Facilities Rev. (American Ref-Fuel Co.), “A”, 6.2%, 2019 | $ | 300,000 | $ | 300,213 | ||
| Pennsylvania Economic Development Financing Authority, Sewer Sludge Disposal Rev. (Philadelphia Biosolids Facility), 6.25%, 2032 | 500,000 | 513,510 | ||||
| $ | 813,723 | |||||
| State & Agency - Other - 1.5% | ||||||
| State Public School Building Authority, PA School (Delaware County Community College), AGM, 5%, 2032 | $ | 2,000,000 | $ | 2,069,160 | ||
| State & Local Agencies - 4.1% | ||||||
| Delaware Valley, PA, Regional Finance Authority, AMBAC, 5.5%, 2018 | $ | 745,000 | $ | 820,051 | ||
| Delaware Valley, PA, Regional Finance Authority, “C”, FRN, 0.919%, 2037 | 730,000 | 517,855 | ||||
| Delaware Valley, PA, Regional Finance Authority, RITES, AMBAC, 9.859%, 2018 (p) | 50,000 | 60,074 | ||||
| Northumberland County, PA (County Careers & Arts Center), 6.65%, 2020 | 195,000 | 194,700 | ||||
| Philadelphia, PA, Industrial Development Authority, AGM, 5.125%, 2011 (c) | 1,000,000 | 1,076,140 | ||||
| Philadelphia, PA, Industrial Development Authority, AGM, 5.25%, 2011 (c) | 750,000 | 808,485 | ||||
| Philadelphia, PA, Industrial Development Authority, 5.5%, 2023 | 500,000 | 535,120 | ||||
| Philadelphia, PA, Municipal Authority Rev., 6.5%, 2034 | 500,000 | 523,525 | ||||
| State Public School Building Authority, PA, Jefferson County (Dubois Technical School), FGIC, 5%, 2026 | 1,000,000 | 1,020,940 | ||||
| $ | 5,556,890 | |||||
| Student Loan Revenue - 1.1% | ||||||
| Pennsylvania Higher Education, Capital Acquisition Rev., NATL, 5%, 2026 | $ | 1,500,000 | $ | 1,518,900 | ||
| Tax - Other - 0.7% | ||||||
| Guam Government Ltd. Obligation Rev., “A”, 5.375%, 2024 | $ | 140,000 | $ | 144,838 | ||
| Guam Government Ltd. Obligation Rev., “A”, 5.625%, 2029 | 45,000 | 46,090 | ||||
| Pittsburgh & Allegheny County, PA, Sales Tax Rev. (Public Auditorium Hotel Room), AMBAC, 5.25%, 2013 | 500,000 | 505,580 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| Tax - Other - continued | ||||||
| Virgin Islands Public Finance Authority Rev. (Diageo Project), “A”, 6.75%, 2037 | $ | 125,000 | $ | 135,754 | ||
| Virgin Islands Public Finance Authority Rev., “A”, 5.25%, 2024 | 135,000 | 137,261 | ||||
| $ | 969,523 | |||||
| Tax Assessment - 0.2% | ||||||
| Washington County, PA, Redevelopment Authority (Victory Centre Project), “A”, 5.45%, 2035 | $ | 250,000 | $ | 205,128 | ||
| Tobacco - 1.1% | ||||||
| Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 5.125%, 2024 | $ | 165,000 | $ | 151,642 | ||
| Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 5.875%, 2030 | 170,000 | 143,203 | ||||
| Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 5.875%, 2047 | 220,000 | 159,647 | ||||
| Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., “A-1”, 5.75%, 2047 | 660,000 | 464,798 | ||||
| Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., “A-2”, 0% to 2012, 5.30% to 2037 | 665,000 | 423,326 | ||||
| Virgin Islands Tobacco Settlement Financing Corp., 5%, 2021 | 100,000 | 95,160 | ||||
| $ | 1,437,776 | |||||
| Toll Roads - 1.8% | ||||||
| Pennsylvania Turnpike Commission, 5.5%, 2015 | $ | 250,000 | $ | 265,450 | ||
| Pennsylvania Turnpike Commission, “A-1”, ASSD GTY, 5%, 2033 | 1,000,000 | 1,018,710 | ||||
| Pennsylvania Turnpike Commission, Capital Appreciation, “C”, AGM, 0%, 2033 | 1,500,000 | 1,099,605 | ||||
| $ | 2,383,765 | |||||
| Transportation - Special Tax - 1.7% | ||||||
| Pennsylvania Turnpike Commission, NATL, 5%, 2024 | $ | 1,775,000 | $ | 1,831,623 | ||
| Southeastern Pennsylvania Transportation Authority, Special Rev., FGIC, 5.25%, 2013 | 500,000 | 503,780 | ||||
| $ | 2,335,403 | |||||
| Universities - Colleges - 15.8% | ||||||
| Adams County, PA, Industrial Development Authority Rev. (Gettysburg College), “A”, 5.875%, 2021 | $ | 250,000 | $ | 264,178 | ||
| Allegheny County, PA (Chatham College), 5.95%, 2032 | 335,000 | 333,355 | ||||
| Allegheny County, PA, Higher Education Building Authority Rev. (Duquesne University), 5%, 2033 | 1,250,000 | 1,255,613 | ||||
| Allegheny County, PA, Higher Education Building Authority Rev. (Duquesne University), “A”, SYNCORA, 5%, 2024 | 1,000,000 | 1,026,670 | ||||
| Allegheny County, PA, Higher Education Building Authority Rev. (Robert Morris University), “A”, 6%, 2038 | 250,000 | 245,310 | ||||
38
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Universities - Colleges - continued | ||||||
| Crawford County, PA, Industrial Development Authority, College Rev., “A”, 6%, 2031 | $ | 250,000 | $ | 260,998 | ||
| Cumberland County, PA, Municipal Authority College Rev. (Dickinson College), AMBAC, 5.55%, 2010 (c) | 535,000 | 550,809 | ||||
| Cumberland County, PA, Municipal Authority College Rev. (Dickinson College), 5%, 2026 | 1,000,000 | 1,010,550 | ||||
| Cumberland County, PA, Municipal Authority College Rev. (Dickinson College), “HH1”, 5%, 2039 | 300,000 | 297,699 | ||||
| Delaware County, PA, Authority College Rev. (Neumann College), 6.125%, 2034 | 750,000 | 752,693 | ||||
| Delaware County, PA, Authority University Rev. (Villanova University), 5.25%, 2031 | 350,000 | 371,193 | ||||
| Erie, PA, Higher Educational Building Authority Rev. (Mercyhurst College), 5.5%, 2038 | 500,000 | 455,625 | ||||
| Erie, PA, Higher Educational Building Authority Rev. (Mercyhurst College), “B”, 5%, 2023 | 500,000 | 484,245 | ||||
| Illinois Finance Authority Rev. (Roosevelt University Project), 6.25%, 2029 | 1,050,000 | 1,077,930 | ||||
| Lancaster, PA, Higher Education Authority College Rev. (Franklin & Marshall College), 5%, 2037 | 500,000 | 499,255 | ||||
| Lycoming County, PA (College of Technology), AMBAC, 5.25%, 2032 | 750,000 | 683,355 | ||||
| New Jersey Educational Facilities Authority Rev. (University of Medicine & Dentistry), “B”, 6%, 2017 | 505,000 | 569,569 | ||||
| Northampton County, PA, General Purpose Authority Rev. (Lafayette College), 5%, 2034 | 250,000 | 259,160 | ||||
| Northampton County, PA, General Purpose Authority Rev. (Lehigh University), 5.5%, 2033 | 500,000 | 549,545 | ||||
| Pennsylvania Higher Educational Facilities Authority Rev. (Allegheny College), 4.75%, 2031 | 500,000 | 491,485 | ||||
| Pennsylvania Higher Educational Facilities Authority Rev. (Drexel University), 5.2%, 2032 | 500,000 | 508,025 | ||||
| Pennsylvania Higher Educational Facilities Authority Rev. (Drexel University), NATL, 5%, 2037 | 630,000 | 633,919 | ||||
| Pennsylvania Higher Educational Facilities Authority Rev. (Lasalle University), “A”, 5.25%, 2027 | 500,000 | 477,730 | ||||
| Pennsylvania Higher Educational Facilities Authority Rev. (Lasalle University), “A”, 5%, 2037 | 500,000 | 424,045 | ||||
| Pennsylvania Higher Educational Facilities Authority Rev. (Marywood University), NATL, 5.5%, 2010 (c) | 300,000 | 302,328 | ||||
| Pennsylvania Higher Educational Facilities Authority Rev. (Philadelphia University), 5.5%, 2020 | 500,000 | 510,940 | ||||
| Pennsylvania Higher Educational Facilities Authority Rev. (Thomas Jefferson University), 5%, 2040 | 1,000,000 | 1,006,940 | ||||
| Pennsylvania Higher Educational Facilities Authority Rev. (Widener University), 5.375%, 2029 | 300,000 | 300,375 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| Universities - Colleges - continued | ||||||
| Pennsylvania Higher Educational Facilities Authority Rev. (Widener University), 5%, 2031 | $ | 300,000 | $ | 285,633 | ||
| Pennsylvania Public School Building Authority (Delaware County College), NATL, 5.75%, 2010 (c) | 500,000 | 513,100 | ||||
| Pennsylvania State University, “A”, 5%, 2029 | 1,000,000 | 1,039,560 | ||||
| Snyder County, PA, Higher Education Authority Rev. (Susquehanna University), 5%, 2038 | 1,000,000 | 1,005,960 | ||||
| Union County, PA, Higher Educational Facilities Financing Authority, University Rev. (Bucknell University), 5.25%, 2021 | 1,000,000 | 1,052,980 | ||||
| Washington County, PA, Industrial Development Authority College Rev. (Washington Jefferson College), 5.25%, 2030 | 1,000,000 | 1,028,320 | ||||
| Wilkes-Barre, PA, Finance Authority Rev. (Wilkes University), 5%, 2037 | 750,000 | 647,760 | ||||
| $ | 21,176,852 | |||||
| Universities - Secondary Schools - 0.9% | ||||||
| Pennsylvania Economic Development Financing Authority (Germantown Friends School Project), 5.35%, 2031 | $ | 600,000 | $ | 603,624 | ||
| Philadelphia, PA, Authority for Industrial Development Rev. (Mast Charter School), 6%, 2035 | 665,000 | 663,218 | ||||
| $ | 1,266,842 | |||||
| Utilities - Cogeneration - 0.1% | ||||||
| Carbon County, PA, Industrial Development Authority Rev. (Panther Creek Partners), 6.65%, 2010 | $ | 35,000 | $ | 34,995 | ||
| Pennsylvania Economic Development Financing Authority Rev., Resource Recovery Rev. (Colver), “G”, 5.125%, 2015 | 50,000 | 48,483 | ||||
| $ | 83,478 | |||||
| Utilities - Investor Owned - 2.4% | ||||||
| Clarion County, PA, Industrial Development Authority, Water Facility Rev. (Pennsylvania American Water Co.), 5.5%, 2039 | $ | 1,000,000 | $ | 1,016,400 | ||
| Michigan Strategic Fund Ltd. Obligation Rev. (Detroit Edison), 5.625%, 2020 | 415,000 | 455,786 | ||||
| Michigan Strategic Fund Ltd. Obligation Rev. (Detroit Edison), 5.5%, 2029 (b) | 110,000 | 122,502 | ||||
| Pennsylvania Economic Development Financing Authority (Allegheny Energy Supply Co. LLC), 7%, 2039 | 600,000 | 661,428 | ||||
| Pennsylvania Economic Development Financing Authority, Water Facility Rev. (Aqua Pennsylvania, Inc.), “A”, 5%, 2039 | 1,000,000 | 1,005,240 | ||||
| $ | 3,261,356 | |||||
| Utilities - Municipal Owned - 0.4% | ||||||
| Philadelphia, PA, Gas Works Rev., AGM, 5.5%, 2011 (c) | $ | 500,000 | $ | 532,900 | ||
39
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Utilities - Other - 1.3% | ||||||
| California M-S-R Energy Authority Gas Rev., “A”, 6.5%, 2039 | $ | 545,000 | $ | 579,330 | ||
| Public Authority for Colorado Energy Natural Gas Purchase Rev., 6.5%, 2038 | 280,000 | 308,862 | ||||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2019 | 420,000 | 427,778 | ||||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2022 | 235,000 | 236,053 | ||||
| Tennessee Energy Acquisition Corp., Gas Rev., “C”, 5%, 2021 | 255,000 | 254,350 | ||||
| $ | 1,806,373 | |||||
| Water & Sewer Utility Revenue - 9.5% | ||||||
| Allegheny County, PA, Sewer Rev., NATL, 5.75%, 2010 (c) | $ | 750,000 | $ | 780,563 | ||
| Bucks County, PA (Suburban Water Co.), FGIC, 5.55%, 2032 | 1,000,000 | 1,004,770 | ||||
| Cambridge, PA, Area Joint Authority Guaranteed Sewer Rev., 6%, 2037 | 500,000 | 509,300 | ||||
| Commonwealth of Puerto Rico Aqueduct & Sewer Authority Rev., “A”, 6%, 2044 | 1,000,000 | 1,032,660 | ||||
| Commonwealth of Puerto Rico Aqueduct & Sewer Authority Rev., “A”, ASSD GTY, 5.125%, 2047 | 775,000 | 769,203 | ||||
| Erie, PA, Water Authority Rev., AGM, 5%, 2043 | 1,000,000 | 1,023,210 | ||||
| Fairview Township, PA, Sewer Rev., FGIC, 5.05%, 2018 | 750,000 | 764,475 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| Water & Sewer Utility Revenue - continued | ||||||
| Harrisburg, PA, Water Authority Rev., 5.25%, 2031 | $ | 1,000,000 | $ | 974,910 | ||
| Lancaster County, PA, Water & Sewer Authority Rev., NATL, 5%, 2028 | 440,000 | 448,584 | ||||
| Philadelphia, PA, Water & Wastewater Rev., “A”, 5.25%, 2032 | 1,000,000 | 1,028,130 | ||||
| St. Mary’s, PA, Water Authority Rev., 5.15%, 2030 | 750,000 | 745,335 | ||||
| Unity Township, PA, Municipal Authority Sewer Rev., AGM, 5%, 2034 | 1,660,000 | 1,696,487 | ||||
| University Area Joint Authority, Sewer Rev., NATL, 5%, 2023 | 1,500,000 | 1,505,325 | ||||
| Virgin Islands Water & Power Authority Rev., RADIAN, 5.3%, 2018 | 500,000 | 504,090 | ||||
| $ | 12,787,042 | |||||
| Total Municipal Bonds (Identified Cost, $128,635,640) | $ | 131,073,022 | ||||
| Money Market Funds (v) - 2.1% | ||||||
| MFS Institutional Money Market Portfolio, 0.17%, at Cost and Net Asset Value | 2,841,475 | $ | 2,841,475 | |||
| Total Investments (Identified Cost, $131,477,115) | $ | 133,914,497 | ||||
| Other Assets, Less Liabilities - 0.3% | 360,847 | |||||
| Net Assets - 100.0% | $ | 134,275,344 | ||||
Derivative Contracts at 3/31/10
Futures Contracts Outstanding at 3/31/10
| Description | Currency | Contracts | Value | Expiration Date | Unrealized Appreciation (Depreciation) | |||||
| Asset Derivatives | ||||||||||
| Interest Rate Futures | ||||||||||
| U.S. Treasury Note 10 yr (Short) | USD | 13 | $1,511,250 | Jun-10 | $5,307 | |||||
| U.S. Treasury Bond 30 yr (Short) | USD | 25 | 2,903,125 | Jun-10 | 2,842 | |||||
| $8,149 | ||||||||||
At March 31, 2010, the fund had sufficient cash and/or other liquid securities to cover any commitments under these derivative contracts.
See Portfolio Footnotes and Notes to Financial Statements
40
Table of Contents
PORTFOLIO OF INVESTMENTS
3/31/10
MFS® SOUTH CAROLINA MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.
| Municipal Bonds - 94.9% | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Airport & Port Revenue - 1.8% | ||||||
| Horry County, SC, “A”, AGM, 5.7%, 2027 | $ | 635,000 | $ | 635,013 | ||
| Richland Lexington, SC, Airport Rev. (Columbia Airport), AGM, 5.125%, 2025 | 1,500,000 | 1,486,875 | ||||
| Richland Lexington, SC, Airport Rev. (Columbia Airport), “A”, AGM, 5%, 2026 | 1,000,000 | 1,013,200 | ||||
| $ | 3,135,088 | |||||
| General Obligations - General Purpose - 6.3% | ||||||
| Clinton, SC, Laurens County School District, ASSD GTY, 6.125%, 2033 | $ | 1,000,000 | $ | 1,122,749 | ||
| Commonwealth of Puerto Rico, “A”, 5.375%, 2033 | 345,000 | 338,461 | ||||
| Commonwealth of Puerto Rico, “A”, 6%, 2038 | 560,000 | 580,540 | ||||
| Commonwealth of Puerto Rico, Public Improvement, NATL, 5.75%, 2010 (c) | 4,000,000 | 4,046,919 | ||||
| Hilton Head Island, SC, Rev., NATL, 5.125%, 2022 | 1,000,000 | 1,034,619 | ||||
| Horry County, SC, 4.5%, 2028 | 850,000 | 882,027 | ||||
| Puerto Rico Public Buildings Authority Rev., Guaranteed (Government Facilities), “I”, 5.25%, 2033 | 630,000 | 607,823 | ||||
| Puerto Rico Public Buildings Authority Rev., Guaranteed, “Q”, 5.625%, 2039 | 1,235,000 | 1,213,153 | ||||
| State of California, 6%, 2039 | 1,050,000 | 1,107,792 | ||||
| $ | 10,934,083 | |||||
| General Obligations - Improvement - 0.5% | ||||||
| Guam Government, “A”, 6.75%, 2029 | $ | 470,000 | $ | 500,719 | ||
| Guam Government, “A”, 5.25%, 2037 | 280,000 | 241,083 | ||||
| Guam Government, “A”, 7%, 2039 | 50,000 | 53,607 | ||||
| $ | 795,409 | |||||
| General Obligations - Schools - 5.7% | ||||||
| Chesterfield County, SC, School District, AGM, 5%, 2023 | $ | 3,000,000 | $ | 3,235,650 | ||
| Orangeburg County, SC, Consolidated School District, AGM, 5.25%, 2020 | 1,065,000 | 1,100,571 | ||||
| Orangeburg County, SC, Consolidated School District, AGM, 5.375%, 2022 | 2,050,000 | 2,151,680 | ||||
| Richland County, SC, School District, 5.1%, 2021 | 1,750,000 | 1,824,200 | ||||
| York County, SC, School District, 5%, 2030 | 1,570,000 | 1,630,178 | ||||
| $ | 9,942,279 | |||||
| Healthcare Revenue - Hospitals - 19.2% | ||||||
| Florence County, SC, Hospital Rev. (McLeod Regional Medical Center), “A”, AGM, 5.25%, 2034 | $ | 1,050,000 | $ | 1,065,278 | ||
| Greenville, SC, Hospital Systems, Hospital Facilities Rev., 6%, 2020 | 3,400,000 | 3,931,386 | ||||
| Greenwood County, SC, Hospital Facilities Rev. (Self Memorial Hospital), 5.5%, 2021 | 1,000,000 | 1,014,790 | ||||
| Greenwood County, SC, Hospital Rev. (Self Regional Healthcare), 5.375%, 2039 | 1,000,000 | 991,950 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| Healthcare Revenue - Hospitals - continued | ||||||
| Illinois Finance Authority Rev. (Edward Hospital), “A”, AMBAC, 5.5%, 2040 | $ | 1,055,000 | $ | 1,045,737 | ||
| Illinois Finance Authority Rev. (Provena Health), “A”, 6%, 2028 | 550,000 | 541,635 | ||||
| Illinois Finance Authority Rev. (Resurrection Health), 6.125%, 2025 | 155,000 | 156,982 | ||||
| Illinois Finance Authority Rev. (Silver Cross Hospital & Medical Centers), 7%, 2044 | 480,000 | 498,178 | ||||
| Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Owensboro Medical Health System), “A”, 6.5%, 2045 | 865,000 | 850,866 | ||||
| Lexington County, SC, Health Services District, Inc., Hospital Rev., 5.5%, 2014 (c) | 250,000 | 288,903 | ||||
| Lexington County, SC, Health Services District, Inc., Hospital Rev., 5.5%, 2014 (c) | 250,000 | 288,903 | ||||
| Lexington County, SC, Health Services District, Inc., Hospital Rev., 5%, 2032 | 1,500,000 | 1,469,610 | ||||
| Lexington County, SC, Health Services District, Inc., Hospital Rev., Refunding & Improvement, 5.5%, 2013 (c) | 1,000,000 | 1,144,510 | ||||
| Louisville & Jefferson County, KY, Metropolitan Government Healthcare Systems Rev. (Norton Healthcare, Inc.), 5.25%, 2036 | 465,000 | 445,135 | ||||
| New Hampshire Business Finance Authority Rev. (Elliot Hospital Obligated Group), “A”, 6%, 2027 | 400,000 | 405,480 | ||||
| New Hampshire Business Finance Authority Rev. (Elliot Hospital Obligated Group), “A”, 6.125%, 2039 | 445,000 | 447,060 | ||||
| Richmond, IN, Hospital Authority Rev. (Reid Hospital), “A”, 6.5%, 2029 | 585,000 | 627,606 | ||||
| Royal Oak, MI, Hospital Finance Authority Rev. (William Beaumont Hospital), 8.25%, 2039 | 915,000 | 1,083,781 | ||||
| South Carolina Jobs & Economic Development Authority (Bon Secours - St. Francis Medical Center, Inc.), 5.625%, 2012 (c) | 260,000 | 289,240 | ||||
| South Carolina Jobs & Economic Development Authority (Bon Secours - St. Francis Medical Center, Inc.), 5.625%, 2030 | 990,000 | 984,555 | ||||
| South Carolina Jobs & Economic Development Authority, Hospital Facilities Rev. (Anmed Health), “B”, ASSD GTY, 5.5%, 2038 | 1,500,000 | 1,553,925 | ||||
| South Carolina Jobs & Economic Development Authority, Hospital Facilities Rev. (Georgetown Memorial Hospital), AMBAC, 6%, 2014 | 1,000,000 | 1,010,930 | ||||
| South Carolina Jobs & Economic Development Authority, Hospital Facilities Rev. (Georgetown Memorial Hospital), RADIAN, 5.25%, 2021 | 1,500,000 | 1,506,330 | ||||
| South Carolina Jobs & Economic Development Authority, Hospital Facilities Rev. (Georgetown Memorial Hospital), AMBAC, 5%, 2023 | 1,000,000 | 993,150 | ||||
| South Carolina Jobs & Economic Development Authority, Hospital Facilities Rev. (Kershaw Country Medical Center), 6%, 2038 | 1,330,000 | 1,315,623 | ||||
41
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Healthcare Revenue - Hospitals - continued | ||||||
| South Carolina Jobs & Economic Development Authority, Hospital Facilities Rev. (Palmetto Health Alliance), 6.25%, 2031 | $ | 750,000 | $ | 759,533 | ||
| South Carolina Jobs & Economic Development Authority, Hospital Facilities Rev. (Palmetto Health), AGM, 5%, 2035 | 650,000 | 638,047 | ||||
| South Carolina Jobs & Economic Development Authority, Hospital Facilities Rev. (Tuomey Health), CIFG, 5%, 2030 | 1,000,000 | 875,200 | ||||
| South Carolina Jobs & Economic Development Authority, Hospital Rev. (Palmetto Health), 5.75%, 2039 | 500,000 | 483,470 | ||||
| Spartanburg County, SC, Health Service Rev., “A”, ASSD GTY, 4.5%, 2027 | 650,000 | 627,484 | ||||
| Spartanburg County, SC, Health Services District, Inc., Hospital Rev., AGM, 5.25%, 2012 (c) | 1,425,000 | 1,543,703 | ||||
| Spartanburg County, SC, Health Services District, Inc., Hospital Rev., AGM, 5.25%, 2032 | 825,000 | 826,865 | ||||
| St. Louis Park, MN, Health Care Facilities Rev. (Nicollett Health Services), 5.75%, 2039 | 770,000 | 765,603 | ||||
| Washington Health Care Facilities Authority Rev. (Central Washington Health Services), 6.75%, 2029 | 105,000 | 111,657 | ||||
| Washington Health Care Facilities Authority Rev. (Central Washington Health Services), 7%, 2039 | 255,000 | 273,408 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (Aurora Health Care, Inc.), “A”, 5.6%, 2029 | 715,000 | 714,914 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (ProHealth Care, Inc. Obligated Group), 6.625%, 2039 | 945,000 | 1,016,622 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (Wheaton Franciscan Services), 5.25%, 2031 | 640,000 | 587,629 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (Wheaton Franciscan Services), “B”, 5.125%, 2020 | 400,000 | 393,824 | ||||
| $ | 33,569,502 | |||||
| Healthcare Revenue - Long Term Care - 0.8% | ||||||
| South Carolina Jobs & Economic Development Authority Rev. (Lutheran Homes of South Carolina), 5.625%, 2042 | $ | 400,000 | $ | 330,492 | ||
| South Carolina Jobs & Economic Development Authority Rev. (Woodlands at Furman), “A”, 6%, 2042 | 500,000 | 344,625 | ||||
| South Carolina Jobs & Economic Development Authority, Health & Facilities Rev., First Mortgage (Wesley Commons), 5.125%, 2026 | 400,000 | 323,952 | ||||
| South Carolina Jobs & Economic Development Authority, Residential Care Facilities Rev. (Episcopal Home), “A”, 6.375%, 2032 | 400,000 | 367,436 | ||||
| $ | 1,366,505 | |||||
| Human Services - 0.6% | ||||||
| Greenville County, SC, Hospital Rev. (Chestnut Hill), “A”, 8%, 2015 | $ | 990,000 | $ | 993,623 | ||
| Issuer | Shares/Par | Value ($) | ||||
| Industrial Revenue - Chemicals - 0.5% | ||||||
| York County, SC, Industrial Rev. (Hoechst Celanese), 5.7%, 2024 | $ | 1,000,000 | $ | 916,030 | ||
| Industrial Revenue - Other - 0.9% | ||||||
| Calhoun County, SC, Solid Waste Disposal Facilities Rev. (Carolina Eastman Co.), ETM, 6.75%, 2017 (c) | $ | 1,000,000 | $ | 1,222,280 | ||
| Virgin Islands Public Finance Authority, Refinery Facilities Rev. (Hovensa Coker Project), 5.875%, 2022 | 385,000 | 384,130 | ||||
| $ | 1,606,410 | |||||
| Industrial Revenue - Paper - 0.6% | ||||||
| Richland County, SC, Environmental Improvement Rev. (International Paper), “A”, 6.1%, 2023 | $ | 1,000,000 | $ | 1,007,000 | ||
| Miscellaneous Revenue - Other - 1.0% | ||||||
| South Carolina Jobs & Economic Development Authority Rev. (Myrtle Beach Convention), “B”, NATL, 5.125%, 2018 | $ | 570,000 | $ | 565,030 | ||
| South Carolina Jobs & Economic Development Authority Rev. (Myrtle Beach Convention), “B”, NATL, 5.125%, 2019 | 595,000 | 584,296 | ||||
| South Carolina Jobs & Economic Development Authority Rev. (Myrtle Beach Convention), “B”, NATL, 5.125%, 2020 | 630,000 | 612,499 | ||||
| $ | 1,761,825 | |||||
| Multi-Family Housing Revenue - 1.2% | ||||||
| North Charleston SC, Housing Authority Rev. (Horizon Village), “A”, GNMA, 5%, 2038 | $ | 1,000,000 | $ | 956,510 | ||
| North Charleston SC, Housing Authority Rev. (Horizon Village), “A”, GNMA, 5.1%, 2041 | 1,210,000 | 1,155,332 | ||||
| $ | 2,111,842 | |||||
| Sales & Excise Tax Revenue - 0.9% | ||||||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., 0%, 2034 | $ | 1,840,000 | $ | 386,529 | ||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., 5.25%, 2057 | 735,000 | 728,591 | ||||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “A”, 0%, 2033 | 1,690,000 | 381,974 | ||||
| $ | 1,497,094 | |||||
| Single Family Housing - State - 3.8% | ||||||
| South Carolina Housing, Finance & Development Authority Mortgage Rev., “A-2”, AGM, 5.5%, 2034 | $ | 415,000 | $ | 425,973 | ||
| South Carolina Housing, Finance & Development Authority Mortgage Rev., “A-2”, AGM, 5.2%, 2035 | 910,000 | 878,023 | ||||
| South Carolina Housing, Finance & Development Authority Rev., 5.55%, 2038 | 1,000,000 | 997,080 | ||||
| South Carolina Housing, Finance & Development Authority Rev., “A-2”, AGM, 6%, 2020 | 370,000 | 389,791 | ||||
| South Carolina Housing, Finance & Development Authority Rev., “A-2”, AGM, 5.35%, 2024 | 1,635,000 | 1,648,374 | ||||
42
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Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Single Family Housing - State - continued | ||||||
| South Carolina Housing, Finance & Development Authority Rev., “A-2”, AMBAC, 5.15%, 2037 | $ | 995,000 | $ | 978,742 | ||
| South Carolina Housing, Finance & Development Authority Rev., “C-2”, AGM, 4.6%, 2032 | 1,500,000 | 1,349,595 | ||||
| $ | 6,667,578 | |||||
| Solid Waste Revenue - 0.6% | ||||||
| Three Rivers, SC, Solid Waste Authority Rev., 5%, 2028 | $ | 1,000,000 | $ | 1,018,740 | ||
| State & Local Agencies - 1.0% | ||||||
| FYI Properties Lease Rev. (Washington State Project), 5.5%, 2034 | $ | 620,000 | $ | 661,261 | ||
| Los Angeles, CA, Municipal Improvement Corp. Lease Rev. (Real Property), “E”, 6%, 2039 | 290,000 | 305,741 | ||||
| Spartanburg, SC, Public Facilities Corp. (Renaissance Park), AMBAC, 5.125%, 2025 | 685,000 | 691,227 | ||||
| $ | 1,658,229 | |||||
| Tax - Other - 2.7% | ||||||
| Commonwealth of Puerto Rico, 5.5%, 2010 (c) | $ | 4,000,000 | $ | 4,141,920 | ||
| Guam Government Ltd. Obligation Rev., “A”, 5.375%, 2024 | 180,000 | 186,221 | ||||
| Guam Government Ltd. Obligation Rev., “A”, 5.625%, 2029 | 60,000 | 61,454 | ||||
| Virgin Islands Public Finance Authority Rev. (Diageo Project), “A”, 6.75%, 2037 | 160,000 | 173,765 | ||||
| Virgin Islands Public Finance Authority Rev., “A”, 5.25%, 2024 | 180,000 | 183,015 | ||||
| $ | 4,746,375 | |||||
| Tax Assessment - 0.2% | ||||||
| Lancaster County, SC, Assessment Rev. (Sun City Carolina Lakes), 5.45%, 2037 | $ | 445,000 | $ | 351,207 | ||
| Tobacco - 1.6% | ||||||
| Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 5.125%, 2024 | $ | 225,000 | $ | 206,784 | ||
| Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 5.875%, 2030 | 225,000 | 189,533 | ||||
| Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 5.875%, 2047 | 275,000 | 199,559 | ||||
| Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., “A-2”, 0% to 2012, 5.30% to 2037 | 840,000 | 534,727 | ||||
| Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., “A-1”, 5.75%, 2047 | 830,000 | 584,519 | ||||
| South Carolina Tobacco Settlement Authority Rev., “B”, 6.375%, 2011 (c) | 1,000,000 | 1,068,510 | ||||
| $ | 2,783,632 | |||||
| Transportation - Special Tax - 3.9% | ||||||
| South Carolina Transportation Infrastructure Rev., “A”, AMBAC, 5%, 2023 | $ | 500,000 | $ | 514,795 | ||
| South Carolina Transportation Infrastructure Rev., “A”, AMBAC, 5%, 2027 | 2,000,000 | 2,062,500 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| Transportation - Special Tax - continued | ||||||
| South Carolina Transportation Infrastructure Rev., “A”, AMBAC, 5%, 2033 | $ | 1,645,000 | $ | 1,658,127 | ||
| South Carolina Transportation Infrastructure Rev., “A”, AMBAC, 5%, 2033 | 2,500,000 | 2,526,150 | ||||
| $ | 6,761,572 | |||||
| Universities - Colleges - 11.6% | ||||||
| College of Charleston, SC, Academic & Administrative Facilities Rev., “B”, SYNCORA, 5%, 2024 | $ | 800,000 | $ | 815,320 | ||
| College of Charleston, SC, Academic & Administrative Facilities Rev., “B”, SYNCORA, 5.125%, 2034 | 1,260,000 | 1,264,712 | ||||
| College of Charleston, SC, Higher Education Facility Rev., “A”, FGIC, 5.25%, 2028 | 2,435,000 | 2,480,437 | ||||
| Educational Facilities Authority Private Non-Profit Institutions of Higher Learning (Wofford College), “A”, 5%, 2036 | 1,000,000 | 1,001,740 | ||||
| Illinois Finance Authority Rev. (Roosevelt University Project), 6.5%, 2039 | 1,055,000 | 1,070,635 | ||||
| South Carolina Educational Facilities Authority (Furman University), AMBAC, 5.375%, 2020 | 1,245,000 | 1,288,102 | ||||
| South Carolina Educational Facilities Authority (Furman University), AMBAC, 5.5%, 2030 | 2,000,000 | 2,070,460 | ||||
| South Carolina Educational Facilities Authority (Furman University), 5%, 2038 | 2,000,000 | 2,034,320 | ||||
| South Carolina Educational Facilities Authority (Wofford College), 5.25%, 2032 | 1,000,000 | 1,028,830 | ||||
| University of South Carolina, Athletic Facilities Rev., “A”, 5.5%, 2038 | 1,000,000 | 1,071,200 | ||||
| University of South Carolina, Higher Education Rev., “A”, 5%, 2039 | 1,000,000 | 1,037,210 | ||||
| University of South Carolina, University Rev., “A”, FGIC, 5.625%, 2010 (c) | 1,555,000 | 1,567,735 | ||||
| University of South Carolina, University Rev., “A”, AMBAC, 5%, 2034 | 1,815,000 | 1,852,679 | ||||
| University of South Carolina, University Rev., “A”, AGM, 5.25%, 2038 | 1,625,000 | 1,708,444 | ||||
| $ | 20,291,824 | |||||
| Utilities - Investor Owned - 1.8% | ||||||
| Michigan Strategic Fund Ltd. Obligation Rev. (Detroit Edison), 5.625%, 2020 | $ | 800,000 | $ | 878,624 | ||
| Michigan Strategic Fund Ltd. Obligation Rev. (Detroit Edison), 5.5%, 2029 (b) | 150,000 | 167,048 | ||||
| Orangeburg County, SC, Solid Waste Disposal Facilities Rev., Electric & Gas, AMBAC, 5.7%, 2024 | 2,000,000 | 2,001,440 | ||||
| $ | 3,047,112 | |||||
| Utilities - Municipal Owned - 10.6% | ||||||
| Easley, SC, Utility Rev., AGM, 5%, 2012 (c) | $ | 1,000,000 | $ | 1,100,840 | ||
| Easley, SC, Utility Rev., ASSD GTY, 5%, 2034 | 2,325,000 | 2,442,971 | ||||
| Greenwood, SC, Combined Public Utility, Refunding & Improvement Systems, NATL, 5%, 2021 | 175,000 | 180,943 | ||||
43
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Utilities - Municipal Owned - continued | ||||||
| Harris County, TX, Cultural Education Facilities Financial Corp., Thermal Utilities Rev. (Teco Project), “A”, 5.25%, 2035 | $ | 1,055,000 | $ | 1,106,885 | ||
| Piedmont, SC, Municipal Power Agency, FGIC, 6.25%, 2021 | 2,700,000 | 3,244,158 | ||||
| Puerto Rico Electric Power Authority, “TT”, 5%, 2027 | 530,000 | 532,518 | ||||
| Puerto Rico Electric Power Authority, Power Rev., “XX”, 5.25%, 2040 | 1,085,000 | 1,070,342 | ||||
| South Carolina Public Service Authority Rev. (Santee Cooper), “E”, 5%, 2040 | 2,000,000 | 2,086,020 | ||||
| South Carolina Public Service Authority Rev., “A”, 5.5%, 2038 | 2,500,000 | 2,693,725 | ||||
| South Carolina Public Service Authority, “A”, AMBAC, 5%, 2034 | 2,000,000 | 2,046,320 | ||||
| South Carolina Public Service Authority, “A”, AMBAC, 5%, 2037 | 510,000 | 527,335 | ||||
| South Carolina Public Service Authority, “B”, AGM, 5.125%, 2037 (f) | 1,500,000 | 1,529,205 | ||||
| $ | 18,561,262 | |||||
| Utilities - Other - 1.2% | ||||||
| California M-S-R Energy Authority Gas Rev., “A”, 6.5%, 2039 | $ | 685,000 | $ | 728,148 | ||
| Public Authority for Colorado Energy Natural Gas Purchase Rev., 6.25%, 2028 | 130,000 | 141,099 | ||||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2021 | 270,000 | 272,525 | ||||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2022 | 140,000 | 140,627 | ||||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2026 | 570,000 | 558,315 | ||||
| Tennessee Energy Acquisition Corp., Gas Rev., “C”, 5%, 2021 | 330,000 | 329,159 | ||||
| $ | 2,169,873 | |||||
| Water & Sewer Utility Revenue - 15.9% | ||||||
| Anderson County, SC, Joint Municipal Water, AGM, 5%, 2032 | $ | 1,000,000 | $ | 1,015,820 | ||
| Anderson County, SC, Water & Sewer Systems Rev., FGIC, 5.125%, 2032 | 2,000,000 | 2,033,500 | ||||
| Anderson County, SC, Water & Sewer Systems Rev., ASSD GTY, 5%, 2034 | 1,000,000 | 1,047,390 | ||||
| Beaufort-Jasper, SC, Waterworks & Sewer Systems Rev., AGM, 4.5%, 2031 | 1,000,000 | 1,019,290 | ||||
| Charleston, SC, Waterworks & Sewer Rev., Capital Improvement, “B”, 5%, 2013 (c) | 1,000,000 | 1,103,680 | ||||
| Columbia, SC, Waterworks & Sewer Systems Rev., AGM, 5%, 2029 | 1,020,000 | 1,070,184 | ||||
| Commonwealth of Puerto Rico Aqueduct & Sewer Authority Rev., “A”, 6%, 2044 | 2,000,000 | 2,065,320 | ||||
| Dorchester County, SC, Waterworks & Sewer Systems Rev., ASSD GTY, 5%, 2029 | 1,000,000 | 1,039,040 | ||||
| Greenville, SC, Stormwater Systems, AGM, 5%, 2022 | 595,000 | 611,725 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| Water & Sewer Utility Revenue - continued | ||||||
| Greenwood, SC, Sewer Systems Rev., AGM, 5%, 2030 | $ | 1,000,000 | $ | 1,047,880 | ||
| Lexington, SC, Waterworks & Sewer Systems Rev., ASSD GTY, 5%, 2039 | 2,000,000 | 2,062,280 | ||||
| Lexington, SC, Waterworks & Sewer Systems Rev., ASSD GTY, 5%, 2041 | 3,500,000 | 3,603,425 | ||||
| Lugoff-Elgin, SC, Water Authority Waterworks Systems Rev., NATL, 5.125%, 2032 | 920,000 | 936,900 | ||||
| Myrtle Beach, SC, Water & Sewer Authority Rev., AGM, 4.5%, 2028 | 2,000,000 | 2,019,800 | ||||
| Rock Hill, SC, Utility Systems Rev., Refunding & Improvement, “A”, AGM, 5.375%, 2023 | 500,000 | 528,650 | ||||
| Spartanburg, SC, Water & Sewer Authority Rev., “B”, NATL, 5.25%, 2030 | 1,250,000 | 1,275,088 | ||||
| Spartanburg, SC, Waterworks Rev., ASSD GTY, 5%, 2039 | 2,000,000 | 2,051,580 | ||||
| Sumter, SC, Waterworks & Sewer Systems Rev., SYNCORA, 5%, 2025 | 540,000 | 562,966 | ||||
| Wasco, CA, Semitropic Improvement District (Semitropic Water Storage District), “A”, 5%, 2038 | 1,200,000 | 1,199,916 | ||||
| York County, SC, Water & Sewer Rev., Refunding & Capital Improvement, NATL, 5%, 2027 | 1,490,000 | 1,524,345 | ||||
| $ | 27,818,779 | |||||
| Total Municipal Bonds (Identified Cost, $160,892,550) | $ | 165,512,873 | ||||
| Money Market Funds (v) - 4.4% | ||||||
| MFS Institutional Money Market Portfolio, 0.17%, at Cost and Net Asset Value | 7,744,864 | $ | 7,744,864 | |||
| Total Investments (Identified Cost, $168,637,414) | $ | 173,257,737 | ||||
| Other Assets, Less Liabilities - 0.7% | 1,197,143 | |||||
| Net Assets - 100.0% | $ | 174,454,880 | ||||
44
Table of Contents
Portfolio of Investments – continued
Derivative Contracts at 3/31/10
Futures Contracts Outstanding at 3/31/10
| Description | Currency | Contracts | Value | Expiration Date | Unrealized Appreciation (Depreciation) | |||||
| Asset Derivatives | ||||||||||
| Interest Rate Futures | ||||||||||
| U.S. Treasury Note 10 yr (Short) | USD | 17 | $1,976,250 | Jun-10 | $6,940 | |||||
At March 31, 2010, the fund had sufficient cash and/or other liquid securities to cover any commitments under these derivative contracts.
See Portfolio Footnotes and Notes to Financial Statements
45
Table of Contents
PORTFOLIO OF INVESTMENTS
3/31/10
MFS® TENNESSEE MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.
| Municipal Bonds - 96.1% | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Airport & Port Revenue - 1.9% | ||||||
| Memphis-Shelby County, TN, Airport Authority Facilities Rev., AGM, 5.125%, 2021 | $ | 1,500,000 | $ | 1,507,740 | ||
| Memphis-Shelby County, TN, Airport Authority Facilities Rev., “A”, ASSD GTY, 5%, 2039 | 1,000,000 | 1,011,110 | ||||
| $ | 2,518,850 | |||||
| General Obligations - General Purpose - 7.5% | ||||||
| Blount County, TN, Public Building Authority, “B”, ASSD GTY, 4.75%, 2037 | $ | 1,500,000 | $ | 1,519,140 | ||
| Commonwealth of Puerto Rico, “A”, 5.375%, 2033 | 270,000 | 264,884 | ||||
| Commonwealth of Puerto Rico, “A”, 6%, 2038 | 455,000 | 471,689 | ||||
| Commonwealth of Puerto Rico, Unrefunded Public Improvement, AGM, 5%, 2024 | 770,000 | 774,990 | ||||
| Johnson City, TN, 5%, 2031 | 1,000,000 | 1,037,110 | ||||
| Metropolitan Government of Nashville & Davidson County, TN, 5%, 2028 | 2,000,000 | 2,158,060 | ||||
| Puerto Rico Public Buildings Authority Rev., Guaranteed (Government Facilities), “I”, 5.25%, 2033 | 480,000 | 463,104 | ||||
| Puerto Rico Public Buildings Authority Rev., Guaranteed, “L”, 5.5%, 2021 | 1,000,000 | 1,035,540 | ||||
| Puerto Rico Public Buildings Authority Rev., Guaranteed, “M”, 6.25%, 2023 | 480,000 | 526,781 | ||||
| Puerto Rico Public Buildings Authority Rev., Guaranteed, “M”, 6.25%, 2031 | 525,000 | 584,482 | ||||
| State of California, 6%, 2039 | 845,000 | 891,509 | ||||
| $ | 9,727,289 | |||||
| General Obligations - Improvement - 0.6% | ||||||
| Guam Government, “A”, 5.25%, 2037 | $ | 215,000 | $ | 185,117 | ||
| Sevier County, TN, Public Building Authority, ASSD GTY, 4.75%, 2025 | 550,000 | 578,099 | ||||
| $ | 763,216 | |||||
| General Obligations - Schools - 1.9% | ||||||
| Rutherford County, TN, School & Public Improvement, 5%, 2022 | $ | 1,510,000 | $ | 1,579,732 | ||
| Williamson County, TN, School District, 5%, 2026 | 740,000 | 854,330 | ||||
| $ | 2,434,062 | |||||
| Healthcare Revenue - Hospitals - 19.1% | ||||||
| Chattanooga, TN, Health Educational & Housing Facility Board Rev. (Catholic Health Initiatives), “D”, 6.25%, 2033 | $ | 1,000,000 | $ | 1,094,980 | ||
| Escambia County, FL, Health Facilities Authority (Baptist Hospital, Inc.), “A”, 6%, 2036 | 300,000 | 290,718 | ||||
| Illinois Finance Authority Rev. (Provena Health), “A”, 6%, 2028 | 500,000 | 492,395 | ||||
| Illinois Finance Authority Rev. (Resurrection Health), 6.125%, 2025 | 125,000 | 126,599 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| Healthcare Revenue - Hospitals - continued | ||||||
| Illinois Finance Authority Rev. (Silver Cross Hospital & Medical Centers), 7%, 2044 | $ | 405,000 | $ | 420,337 | ||
| Johnson City, TN, Health & Education Financing Authority Rev. (Johnson City Medical Center Hospital), ETM, NATL, 5%, 2018 (c) | 1,500,000 | 1,509,960 | ||||
| Johnson City, TN, Health & Educational Facilities Board Hospital Rev. (Mountain States Health), “A”, 5.5%, 2031 | 400,000 | 393,080 | ||||
| Johnson City, TN, Health & Educational Facilities Board Hospital Rev. (Mountain States Health), “A”, 5.5%, 2036 | 600,000 | 585,300 | ||||
| Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Baptist Healthcare System), “A”, 6.375%, 2040 | 395,000 | 391,560 | ||||
| Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Owensboro Medical Health System), “A”, 6.5%, 2045 | 265,000 | 260,670 | ||||
| Knox County, TN, Health, Educational, Hospital & Housing Facilities Board Rev. (Baptist Health Systems), 6.5%, 2031 | 300,000 | 316,014 | ||||
| Knox County, TN, Health, Educational, Hospital & Housing Facilities Board Rev. (Catholic Healthcare Partners), 5.25%, 2030 | 1,000,000 | 1,005,300 | ||||
| Knox County, TN, Health, Educational, Hospital & Housing Facilities Board Rev. (Covenant Health), Capital Appreciation, “A”, 0%, 2036 | 4,000,000 | 794,560 | ||||
| Knox County, TN, Health, Educational, Hospital & Housing Facilities Board Rev. (Fort Sanders), NATL, 5.75%, 2014 | 3,250,000 | 3,533,498 | ||||
| Knox County, TN, Health, Educational, Hospital & Housing Facilities Board Rev. (University Health Systems, Inc.), 5.25%, 2036 | 1,000,000 | 929,150 | ||||
| Knox County, TN, Health, Educational, Hospital & Housing Facilities Board Rev., “A”, AGM, 5%, 2013 (c) | 545,000 | 599,952 | ||||
| Knox County, TN, Health, Educational, Hospital & Housing Facilities Board Rev., “A”, AGM, 5%, 2022 | 455,000 | 457,621 | ||||
| Louisville & Jefferson County, KY, Metropolitan Government Healthcare Systems Rev. (Norton Healthcare, Inc.), 5.25%, 2036 | 675,000 | 646,164 | ||||
| Montgomery County, OH, Rev. (Catholic Health Initiatives), “A”, 5%, 2039 | 570,000 | 570,804 | ||||
| New Hampshire Business Finance Authority Rev. (Elliot Hospital Obligated Group), “A”, 6%, 2027 | 510,000 | 516,987 | ||||
| Rutherford County, TN, Health & Educational Facilities Board Rev. (Ascension Health Senior Center), “C”, 5%, 2040 | 1,500,000 | 1,514,745 | ||||
| Shelby County, TN, Health, Educational & Housing Facilities Board Rev. (Methodist Healthcare), 6.5%, 2012 (c) | 625,000 | 704,331 | ||||
46
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Healthcare Revenue - Hospitals - continued | ||||||
| Shelby County, TN, Health, Educational & Housing Facilities Board Rev. (Methodist Healthcare), 5%, 2031 | $ | 500,000 | $ | 506,910 | ||
| Shelby County, TN, Health, Educational & Housing Facilities Board Rev. (Methodist Healthcare), 5%, 2036 | 1,250,000 | 1,261,237 | ||||
| Shelby County, TN, Health, Educational & Housing Facilities Board Rev. (Methodist Healthcare), “B”, AGM, 5.25%, 2027 | 1,500,000 | 1,561,905 | ||||
| Shelby County, TN, Health, Educational & Housing Facilities Board Rev. (Methodist Healthcare), ETM, 6.5%, 2021 (c) | 375,000 | 422,599 | ||||
| South Carolina Jobs & Economic Development Authority, Hospital Facilities Rev. (Kershaw Country Medical Center), 6%, 2038 | 460,000 | 455,027 | ||||
| St. Louis Park, MN, Health Care Facilities Rev. (Nicollett Health Services), 5.75%, 2039 | 615,000 | 611,488 | ||||
| St. Petersburg, FL, Health Facilities Authority Rev., 6.5%, 2039 | 170,000 | 183,863 | ||||
| Sullivan County, TN, Health, Educational & Housing Facilities Board Hospital Rev. (Wellmont Health Systems Project), “C”, 5.25%, 2036 | 635,000 | 559,308 | ||||
| Sumner County, TN, Health, Educational & Housing Facilities Board Rev. (Sumner Regional Health), “A”, 5.5%, 2046 | 1,000,000 | 647,100 | ||||
| Tarrant County, TX, Cultural Education Facilities Finance Corp. (Scott & White Memorial Hospital), “A”, 5.5%, 2031 | 225,000 | 237,150 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (ProHealth Care, Inc. Obligated Group), 6.625%, 2039 | 785,000 | 844,495 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (Wheaton Franciscan Services), 5.25%, 2031 | 535,000 | 491,221 | ||||
| $ | 24,937,028 | |||||
| Healthcare Revenue - Long Term Care - 0.5% | ||||||
| Blount County, TN, Health & Educational Facilities Board Rev. (Asbury, Inc.), “A”, 5.125%, 2023 | $ | 500,000 | $ | 433,185 | ||
| Shelby County, TN, Health, Educational & Housing Facilities Board Rev. (Germantown Village), “A”, 7.25%, 2034 | 250,000 | 239,745 | ||||
| $ | 672,930 | |||||
| Industrial Revenue - Other - 0.2% | ||||||
| Virgin Islands Public Finance Authority, Refinery Facilities Rev. (Hovensa Coker Project), 5.875%, 2022 | $ | 320,000 | $ | 319,277 | ||
| Miscellaneous Revenue - Other - 1.3% | ||||||
| ABAG Finance Authority Rev. (Jackson Lab), 5.75%, 2037 | $ | 1,000,000 | $ | 987,700 | ||
| Hardeman County, TN, Correctional Facilities Rev., 7.75%, 2017 | 760,000 | 760,540 | ||||
| $ | 1,748,240 | |||||
| Issuer | Shares/Par | Value ($) | ||||
| Multi-Family Housing Revenue - 1.8% | ||||||
| Chattanooga, TN, Health, Educational & Housing Facilities (Rainbow Creek), GNMA, 6.125%, 2019 | $ | 345,000 | $ | 348,971 | ||
| Knoxville, TN, Community Development Corp., 5%, 2024 | 1,000,000 | 1,041,720 | ||||
| Metropolitan Government of Nashville & Davidson County, TN, Health, Educational & Housing Facilities Board Rev. (Berkshire Place), GNMA, 6%, 2023 | 500,000 | 509,100 | ||||
| Metropolitan Government of Nashville & Davidson County, TN, Health, Educational & Housing Facilities Board Rev. (Herman Street), FHA, 7.25%, 2032 | 485,000 | 486,625 | ||||
| $ | 2,386,416 | |||||
| Sales & Excise Tax Revenue - 2.8% | ||||||
| Massachusetts Bay Transportation Authority, Sales Tax Rev., “A-1”, 5.25%, 2029 | $ | 1,000,000 | $ | 1,146,150 | ||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., 0%, 2056 | 7,755,000 | 393,566 | ||||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., 5.25%, 2057 | 525,000 | 520,422 | ||||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “A”, 0%, 2033 | 1,265,000 | 285,915 | ||||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “A”, 5.375%, 2039 | 1,220,000 | 1,240,850 | ||||
| $ | 3,586,903 | |||||
| Single Family Housing - State - 10.6% | ||||||
| Tennessee Housing Development Agency Rev., Homeownership Program, 5.45%, 2014 | $ | 1,660,000 | $ | 1,663,984 | ||
| Tennessee Housing Development Agency Rev., Homeownership Program, 4.55%, 2018 | 575,000 | 566,490 | ||||
| Tennessee Housing Development Agency Rev., Homeownership Program, 4.55%, 2018 | 690,000 | 679,250 | ||||
| Tennessee Housing Development Agency Rev., Homeownership Program, 6%, 2020 | 775,000 | 776,906 | ||||
| Tennessee Housing Development Agency Rev., Homeownership Program, 5%, 2026 | 1,740,000 | 1,705,757 | ||||
| Tennessee Housing Development Agency Rev., Homeownership Program, 5.05%, 2027 | 695,000 | 686,285 | ||||
| Tennessee Housing Development Agency Rev., Homeownership Program, 5%, 2029 | 1,000,000 | 1,014,080 | ||||
| Tennessee Housing Development Agency Rev., Homeownership Program, AGM, 5.4%, 2032 | 620,000 | 620,167 | ||||
| Tennessee Housing Development Agency Rev., Homeownership Program, 5.25%, 2034 | 620,000 | 618,221 | ||||
| Tennessee Housing Development Agency Rev., Homeownership Program, 5.45%, 2038 | 2,000,000 | 2,046,420 | ||||
| Tennessee Housing Development Agency Rev., Homeownership Program, “1-A”, 5.7%, 2039 | 890,000 | 904,934 | ||||
| Tennessee Housing Development Agency Rev., Homeownership Program, “2”, 4.55%, 2024 | 1,500,000 | 1,495,860 | ||||
| Tennessee Housing Development Agency Rev., Mortgage Finance, 5.2%, 2023 | 1,020,000 | 1,044,908 | ||||
| $ | 13,823,262 | |||||
47
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| State & Agency - Other - 0.8% | ||||||
| Hardeman County, TN, Industrial Development Board Rev., “B”, ASSD GTY, 5%, 2040 | $ | 1,000,000 | $ | 1,022,780 | ||
| State & Local Agencies - 13.1% | ||||||
| California Public Works Board Lease Rev. (Various Capital Projects), “G-1”, 5.75%, 2030 | $ | 210,000 | $ | 209,998 | ||
| Chattanooga, TN, Industrial Development Board, AMBAC, 5.75%, 2018 | 1,000,000 | 1,013,460 | ||||
| FYI Properties Lease Rev. (Washington State Project), 5.5%, 2034 | 525,000 | 559,939 | ||||
| Memphis-Shelby County, TN (Memphis Sports Arena), AMBAC, 5.125%, 2012 (c) | 2,000,000 | 2,207,140 | ||||
| Memphis-Shelby County, TN (Memphis Sports Arena), AMBAC, 5.35%, 2012 (c) | 1,665,000 | 1,846,918 | ||||
| Memphis-Shelby County, TN, Sports Authority, Inc. Rev., “B”, 5.375%, 2029 | 2,500,000 | 2,570,525 | ||||
| Metropolitan Government of Nashville & Davidson County, TN, Water & Sewer Rev., “A”, AGM, 5.25%, 2022 | 1,000,000 | 1,141,300 | ||||
| Tennessee School Bond Authority (Higher Education Facilities), “A”, AGM, 5.25%, 2012 (c)(f) | 3,000,000 | 3,271,500 | ||||
| Tennessee School Bond Authority, “B”, 5.125%, 2033 | 2,000,000 | 2,125,460 | ||||
| Tennessee School Bond Authority, “C”, AGM, 5%, 2032 | 2,000,000 | 2,095,680 | ||||
| $ | 17,041,920 | |||||
| Tax - Other - 0.2% | ||||||
| Guam Government Ltd. Obligation Rev., “A”, 5.375%, 2024 | $ | 150,000 | $ | 155,184 | ||
| Guam Government Ltd. Obligation Rev., “A”, 5.625%, 2029 | 50,000 | 51,212 | ||||
| $ | 206,396 | |||||
| Tobacco - 1.0% | ||||||
| Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 5.125%, 2024 | $ | 185,000 | $ | 170,022 | ||
| Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 5.875%, 2030 | 185,000 | 155,838 | ||||
| Guam Economic Development Authority Tobacco Settlement, “B”, 5.5%, 2011 (c) | 350,000 | 368,834 | ||||
| Tobacco Settlement Financing Corp., 5%, 2031 | 750,000 | 620,985 | ||||
| $ | 1,315,679 | |||||
| Transportation - Special Tax - 1.0% | ||||||
| Commonwealth of Puerto Rico Highway & Transportation Authority Rev., AGM, 5.25%, 2036 | $ | 650,000 | $ | 681,362 | ||
| Commonwealth of Puerto Rico Highway & Transportation Authority Rev., “CC”, AGM, 5.5%, 2028 | 600,000 | 662,982 | ||||
| $ | 1,344,344 | |||||
| Universities - Colleges - 5.1% | ||||||
| Claiborne County, TN, Industrial Development Board Rev. (Lincoln Memorial University Project), 6.625%, 2039 | $ | 500,000 | $ | 500,865 | ||
| Issuer | Shares/Par | Value ($) | ||||
| Universities - Colleges - continued | ||||||
| Illinois Finance Authority Rev. (Roosevelt University Project), 6.5%, 2039 | $ | 835,000 | $ | 847,375 | ||
| Madison County, NY, Industrial Development Agency Civic Facilities Rev. (Colgate University), “A”, AMBAC, 5%, 2035 | 415,000 | 425,529 | ||||
| Metropolitan Government of Nashville & Davidson County, TN, Health, Educational & Housing Facilities Board Rev. (McKendree Village, Inc.), 5.125%, 2020 | 1,000,000 | 1,000,160 | ||||
| Nashville & Davidson County, TN, Metropolitan Government Health & Educational Facilities Board, 5%, 2034 | 2,500,000 | 2,657,150 | ||||
| New York Dormitory Authority Rev., Non-State Supported Debt (Columbia University), “A”, 5%, 2031 | 1,145,000 | 1,219,276 | ||||
| $ | 6,650,355 | |||||
| Utilities - Municipal Owned - 12.9% | ||||||
| Chattanooga, TN, Electric Rev., “A”, 5%, 2033 | $ | 3,000,000 | $ | 3,155,760 | ||
| Citizens Gas Utility District, TN, Gas Rev., 5%, 2035 | 1,000,000 | 978,980 | ||||
| Clarksville, TN, Electric System Rev., “A”, 5%, 2034 | 1,250,000 | 1,299,300 | ||||
| Elizabethton, TN, Electric System Rev., NATL, 4.5%, 2027 | 1,000,000 | 1,009,370 | ||||
| Harris County, TX, Cultural Education Facilities Financial Corp., Thermal Utilities Rev. (Teco Project), “A”, 5.25%, 2035 | 885,000 | 928,524 | ||||
| Johnson City, TN, Electric Rev., AGM, 5%, 2029 | 1,000,000 | 1,052,150 | ||||
| Long Island Power Authority, Electric Systems Rev., “A”, BHAC, 5.5%, 2033 | 595,000 | 654,232 | ||||
| Long Island Power Authority, Electric Systems Rev., “A”, 6%, 2033 | 195,000 | 217,809 | ||||
| Memphis, TN, Electric System Rev., 5%, 2018 | 1,750,000 | 2,007,740 | ||||
| Metropolitan Government of Nashville & Davidson County, TN, Electrical Rev., NATL, 0%, 2012 | 3,305,000 | 3,181,790 | ||||
| Metropolitan Government of Nashville & Davidson County, TN, Electrical Rev., “A”, AMBAC, 5%, 2029 | 1,500,000 | 1,554,525 | ||||
| Puerto Rico Electric Power Authority, Power Rev., “XX”, 5.25%, 2040 | 870,000 | 858,246 | ||||
| $ | 16,898,426 | |||||
| Utilities - Other - 1.2% | ||||||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2021 | $ | 225,000 | $ | 227,104 | ||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2022 | 115,000 | 115,515 | ||||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2023 | 85,000 | 84,996 | ||||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2026 | 1,200,000 | 1,175,400 | ||||
| $ | 1,603,015 | |||||
48
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Water & Sewer Utility Revenue - 12.6% | ||||||
| Commonwealth of Puerto Rico Aqueduct & Sewer Authority Rev., “A”, ASSD GTY, 5%, 2028 | $ | 400,000 | $ | 411,116 | ||
| Commonwealth of Puerto Rico Aqueduct & Sewer Authority Rev., “A”, 6%, 2044 | 1,000,000 | 1,032,660 | ||||
| Commonwealth of Puerto Rico Aqueduct & Sewer Authority Rev., “A”, ASSD GTY, 5.125%, 2047 | 810,000 | 803,941 | ||||
| Detroit, MI, Sewer Disposal System Rev., “B”, AGM, 7.5%, 2033 | 295,000 | 351,885 | ||||
| Hallsdale-Powell Utility District, TN, Water & Sewer Rev., “A”, FGIC, 5%, 2024 | 1,500,000 | 1,545,990 | ||||
| Hallsdale-Powell Utility District, TN, Water & Sewer Rev., “A”, FGIC, 5%, 2027 | 3,000,000 | 3,080,220 | ||||
| Harpeth Valley Utility District, TN, Davidson & Williamson Counties Rev., FGIC, 5.25%, 2037 | 1,000,000 | 1,043,530 | ||||
| Hendersonville, TN, Utility District Waterworks & Sewer Rev., AGM, 5%, 2031 | 1,000,000 | 1,045,330 | ||||
| Knoxville, TN, Waste Water System Rev., AGM, 4.5%, 2032 | 1,000,000 | 1,013,160 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| Water & Sewer Utility Revenue - continued | ||||||
| Knoxville, TN, Waste Water System Rev., “A”, NATL, 5%, 2037 | $ | 2,620,000 | $ | 2,683,797 | ||
| Rutherford County, TN, Water Rev., NATL, 5%, 2027 | 770,000 | 803,888 | ||||
| South Blount County, TN, Utility District Waterworks Rev., AGM, 5%, 2033 | 2,140,000 | 2,248,584 | ||||
| White House Utility District, TN, Unrefunded, AGM, 5%, 2021 | 420,000 | 424,456 | ||||
| $ | 16,488,557 | |||||
| Total Municipal Bonds (Identified Cost, $122,261,530) | $ | 125,488,945 | ||||
| Money Market Funds (v) - 1.7% | ||||||
| MFS Institutional Money Market Portfolio, 0.17%, at Cost and Net Asset Value | 2,250,146 | $ | 2,250,146 | |||
| Total Investments (Identified Cost, $124,511,676) | $ | 127,739,091 | ||||
| Other Assets, Less Liabilities - 2.2% | 2,808,601 | |||||
| Net Assets - 100.0% | $ | 130,547,692 | ||||
Derivative Contracts at 3/31/10
Futures Contracts Outstanding at 3/31/10
| Description | Currency | Contracts | Value | Expiration Date | Unrealized Appreciation (Depreciation) | |||||
| Asset Derivatives | ||||||||||
| Interest Rate Futures | ||||||||||
| U.S. Treasury Bond 30 yr (Short) | USD | 12 | $1,393,500 | Jun-10 | $1,364 | |||||
| U.S. Treasury Note 10 yr (Short) | USD | 14 | 1,627,500 | Jun-10 | 5,716 | |||||
| $7,080 | ||||||||||
At March 31, 2010, the fund had sufficient cash and/or other liquid securities to cover any commitments under these derivative contracts.
See Portfolio Footnotes and Notes to Financial Statements
49
Table of Contents
PORTFOLIO OF INVESTMENTS
3/31/10
MFS® VIRGINIA MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.
| Municipal Bonds - 99.8% | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Airport & Port Revenue - 4.7% | ||||||
| Metropolitan Washington, DC, Airport Authority Rev., 5.375%, 2028 | $ | 1,500,000 | $ | 1,551,074 | ||
| Metropolitan Washington, DC, Airport Authority Rev., “A”, FGIC, 5.125%, 2024 | 1,000,000 | 1,007,759 | ||||
| Metropolitan Washington, DC, Airport Authority Rev., “A”, FGIC, 5%, 2025 | 705,000 | 708,122 | ||||
| Metropolitan Washington, DC, Airport Authority Rev., “A”, AGM, 5%, 2032 | 1,455,000 | 1,455,785 | ||||
| Metropolitan Washington, DC, Airport Authority Rev., “A”, NATL, 5%, 2035 | 3,000,000 | 2,928,179 | ||||
| Norfolk, VA, Airport Authority Rev., “A”, FGIC, 5.375%, 2017 | 1,755,000 | 1,801,893 | ||||
| Norfolk, VA, Airport Authority Rev., “A”, FGIC, 5%, 2022 | 3,000,000 | 3,038,190 | ||||
| Virginia Port Authority Facilities Rev., FGIC, 5%, 2036 | 3,000,000 | 2,856,660 | ||||
| Virginia Resources Authority, Airport Rev., “B”, 5.125%, 2027 | 720,000 | 715,457 | ||||
| $ | 16,063,119 | |||||
| General Obligations - General Purpose - 2.9% | ||||||
| Commonwealth of Puerto Rico, “A”, 5.375%, 2033 | $ | 645,000 | $ | 632,777 | ||
| Commonwealth of Puerto Rico, “A”, 6%, 2038 | 1,070,000 | 1,109,248 | ||||
| Newport News, VA, Economic Development, “A”, 5%, 2031 | 1,595,000 | 1,664,717 | ||||
| Puerto Rico Public Buildings Authority Rev., Guaranteed, “M”, 6.25%, 2023 | 840,000 | 921,866 | ||||
| Puerto Rico Public Buildings Authority Rev., Guaranteed, “M”, 6.25%, 2031 | 920,000 | 1,024,236 | ||||
| Puerto Rico Public Buildings Authority Rev., Guaranteed, “Q”, 5.625%, 2039 | 1,565,000 | 1,537,315 | ||||
| Stafford County, VA, Industrial Development Authority Rev., “B”, NATL, 5%, 2034 | 3,060,000 | 3,077,473 | ||||
| $ | 9,967,632 | |||||
| General Obligations - Improvement - 1.7% | ||||||
| Arlington County, VA, 4.5%, 2028 | $ | 255,000 | $ | 258,973 | ||
| Chesterfield County, VA, 5%, 2011 (c) | 2,015,000 | 2,087,600 | ||||
| Guam Government, “A”, 6.75%, 2029 | 925,000 | 985,458 | ||||
| Guam Government, “A”, 5.25%, 2037 | 540,000 | 464,945 | ||||
| Guam Government, “A”, 7%, 2039 | 110,000 | 117,935 | ||||
| Lynchburg, VA, Public Improvement, 5.6%, 2010 (c) | 1,765,000 | 1,797,158 | ||||
| $ | 5,712,069 | |||||
| General Obligations - Schools - 0.8% | ||||||
| Los Angeles, CA, Unified School District, “D”, 5%, 2034 | $ | 125,000 | $ | 126,374 | ||
| San Diego, CA, Community College District, AGM, 5%, 2030 | 2,570,000 | 2,642,757 | ||||
| $ | 2,769,131 | |||||
| Issuer | Shares/Par | Value ($) | ||||
| Healthcare Revenue - Hospitals - 17.7% | ||||||
| Albemarle County, VA, Industrial Development Authority, Hospital Rev. (Martha Jefferson Hospital), 5.25%, 2035 | $ | 3,000,000 | $ | 2,954,400 | ||
| Arlington County, VA, Industrial Development Authority Rev. (Virginia Hospital Center Arlington Health Systems), 5.25%, 2011 (c) | 2,600,000 | 2,771,418 | ||||
| Arlington County, VA, Industrial Development Authority, Hospital Facility Rev. (Virginia Hospital Center Arlington Health Systems), 5%, 2031 | 2,000,000 | 2,017,400 | ||||
| Charlotte County, VA, Industrial Development Authority Rev. (Halifax Hospital), 5%, 2037 | 1,000,000 | 939,000 | ||||
| Fairfax County, VA, Industrial Development Authority Rev. (Inova Health Systems), “A”, 5.5%, 2029 | 1,000,000 | 1,032,160 | ||||
| Fairfax County, VA, Industrial Development Authority Rev. (Inova Health Systems), “A”, 5.5%, 2035 | 1,500,000 | 1,580,055 | ||||
| Fairfax County, VA, Industrial Development Authority Rev. (Inova Health Systems), “C”, 5%, 2025 | 500,000 | 520,765 | ||||
| Fauquier County, VA, Industrial Development Authority, Hospital Rev., 5.25%, 2037 | 2,000,000 | 1,946,100 | ||||
| Fredericksburg, VA, Industrial Development Rev. (Medicorp Health Systems), “B”, 5.125%, 2033 | 750,000 | 734,498 | ||||
| Henrico County, VA, Economic Development Authority Rev., 5.6%, 2012 (c) | 85,000 | 94,971 | ||||
| Henrico County, VA, Economic Development Authority Rev., 5.6%, 2030 | 1,915,000 | 1,919,002 | ||||
| Henrico County, VA, Industrial Development Authority Rev. (Bon Secours Health Systems, Inc.), NATL, 6.25%, 2020 | 1,500,000 | 1,671,480 | ||||
| Illinois Finance Authority Rev. (Central Dupage Health), 5%, 2027 | 1,030,000 | 1,041,680 | ||||
| Illinois Finance Authority Rev. (Silver Cross Hospital & Medical Centers), 7%, 2044 | 970,000 | 1,006,734 | ||||
| Indiana Finance Authority Rev. (Sisters of St. Francis Health Services), 5.375%, 2032 | 2,075,000 | 2,144,679 | ||||
| Loudoun County, VA, Industrial Development Authority, Hospital Rev. (Loudoun Hospital Center), “A”, 6.1%, 2012 (c) | 1,000,000 | 1,115,150 | ||||
| Louisville & Jefferson County, KY, Metropolitan Government Healthcare Systems Rev. (Norton Healthcare, Inc.), 5.25%, 2036 | 1,635,000 | 1,565,153 | ||||
| Medical College of Virginia, Hospital Authority Rev., NATL, 5.125%, 2018 | 3,000,000 | 3,016,620 | ||||
| Michigan Hospital Finance Authority Rev. (Henry Ford Health System), 5.625%, 2029 | 200,000 | 196,378 | ||||
| Michigan Hospital Finance Authority Rev. (Henry Ford Health System), 5.75%, 2039 | 1,995,000 | 1,926,173 | ||||
| New Hampshire Business Finance Authority Rev. (Elliot Hospital Obligated Group), “A”, 6%, 2027 | 635,000 | 643,700 | ||||
50
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Healthcare Revenue - Hospitals - continued | ||||||
| Ohio Higher Educational Facility Commission Rev. (University Hospital Health System), 6.75%, 2039 | $ | 1,315,000 | $ | 1,398,358 | ||
| Peninsula Ports Authority, VA, Health System Rev. (Riverside Health System), 5%, 2018 | 3,580,000 | 3,608,998 | ||||
| Peninsula Ports Authority, VA, Hospital Facility Rev. (Whittaker Memorial), FHA, 8.7%, 2023 | 1,920,000 | 1,954,656 | ||||
| Prince William County, VA, Industrial Development Authority, Hospital Rev. (Potomac Hospital Corp.), 5.2%, 2026 | 1,000,000 | 980,480 | ||||
| Roanoke, VA, Industrial Development Authority, Hospital Rev. (Roanoke Memorial Hospital), “B”, ETM, NATL, 6.125%, 2017 (c) | 3,000,000 | 3,483,750 | ||||
| Royal Oak, MI, Hospital Finance Authority Rev. (William Beaumont Hospital), 8.25%, 2039 | 1,805,000 | 2,137,950 | ||||
| St. Louis Park, MN, Health Care Facilities Rev. (Nicollett Health Services), 5.75%, 2039 | 1,700,000 | 1,690,293 | ||||
| Tarrant County, TX, Cultural Education Facilities Finance Corp. (Scott & White Memorial Hospital), “A”, 5.5%, 2031 | 515,000 | 542,810 | ||||
| Virginia Small Business Financing Authority, Healthcare Facility Rev. (Sentra Healthcare), 5%, 2040 | 3,000,000 | 3,028,260 | ||||
| Virginia Small Business Financing Authority, Hospital Rev. (Wellmont Health Project), “A”, 5.25%, 2037 | 2,000,000 | 1,750,920 | ||||
| Washington County, VA, Industrial Development Authority, Hospital Facilities Rev. (Mountain States Health Alliance), “C”, 7.5%, 2029 | 1,400,000 | 1,584,730 | ||||
| Washington Health Care Facilities Authority Rev. (Central Washington Health Services), 6.75%, 2029 | 220,000 | 233,948 | ||||
| Washington Health Care Facilities Authority Rev. (Central Washington Health Services), 7%, 2039 | 530,000 | 568,261 | ||||
| Winchester, VA, Industrial Development Authority, Hospital Rev. (Valley Health Systems), “E”, 5.75%, 2039 | 3,000,000 | 3,039,330 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (ProHealth Care, Inc. Obligated Group), 6.625%, 2039 | 1,880,000 | 2,022,485 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (Wheaton Franciscan Services), 5.25%, 2031 | 1,280,000 | 1,175,258 | ||||
| $ | 60,038,003 | |||||
| Healthcare Revenue - Long Term Care - 1.5% | ||||||
| Chesterfield County, VA, Health Center Commission Residential Care Facility, 6.25%, 2038 | $ | 750,000 | $ | 667,290 | ||
| Henrico County, VA, Economic Development Authority Residential Care, 6.7%, 2012 (c) | 200,000 | 222,940 | ||||
| Henrico County, VA, Economic Development Authority Residential Care, 6.7%, 2027 | 550,000 | 550,913 | ||||
| James City County, VA, Economic Development (WindsorMeade Project), “A”, 5.5%, 2037 | 1,000,000 | 587,370 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| Healthcare Revenue - Long Term Care - continued | ||||||
| Lexington, VA, Industrial Development Authority Residential Care Facilities (Kendal at Lexington), “A”, 5.5%, 2037 | $ | 1,000,000 | $ | 793,470 | ||
| Norfolk, VA, Redevelopment & Housing Authority Rev. (Fort Norfolk Retirement Community), “A”, 6.125%, 2035 | 1,240,000 | 1,080,462 | ||||
| Suffolk, VA, Industrial Development Authority, Retirement Facilities Rev. (Lake Prince Center, Inc.), 5.3%, 2031 | 750,000 | 624,053 | ||||
| Travis County, TX, Health Facilities Development Corp. Rev. (Westminster Manor Health), 7%, 2030 | 175,000 | 174,988 | ||||
| Travis County, TX, Health Facilities Development Corp. Rev. (Westminster Manor Health), 7.125%, 2040 | 265,000 | 265,077 | ||||
| $ | 4,966,563 | |||||
| Industrial Revenue - Environmental Services - 1.0% | ||||||
| Charles City County, VA, Industrial Development Authority, Solid Waste Disposal Facility Rev. (Waste Management, Inc.), 6.25%, 2027 (b) | $ | 1,500,000 | $ | 1,611,045 | ||
| Henrico County, VA, Industrial Development Authority Rev. (Browning Ferris, Inc.), 5.45%, 2014 | 1,750,000 | 1,821,715 | ||||
| $ | 3,432,760 | |||||
| Industrial Revenue - Other - 1.1% | ||||||
| Loudoun County, VA, Industrial Development Authority Rev. (Dulles Airport Marriott Hotel), 7.125%, 2015 | $ | 2,000,000 | $ | 2,007,800 | ||
| Peninsula Ports Authority, VA, Coal Terminal Rev. (Dominion Terminal Associates), 6%, 2033 | 1,000,000 | 1,015,170 | ||||
| Virgin Islands Public Finance Authority, Refinery Facilities Rev. (Hovensa Coker Project), 5.875%, 2022 | 750,000 | 748,305 | ||||
| $ | 3,771,275 | |||||
| Industrial Revenue - Paper - 0.3% | ||||||
| Bedford County, VA, Industrial Development Authority Rev. (Nekooska Packaging Corp.), 5.6%, 2025 | $ | 1,000,000 | $ | 919,680 | ||
| Hodge, LA, Utilities Rev. (Stone Container Corp.), 7.45%, 2024 (d) | 200,000 | 216,000 | ||||
| West Point, VA, Industrial Development Authority, Solid Waste Disposal Rev. (Chesapeake Corp.), “A”, 6.375%, 2019 (d) | 1,750,000 | 18,025 | ||||
| $ | 1,153,705 | |||||
| Miscellaneous Revenue - Other - 0.1% | ||||||
| Norfolk, VA, Airport Authority Rev. (Air Cargo), 6.25%, 2030 | $ | 500,000 | $ | 461,140 | ||
| Multi-Family Housing Revenue - 3.5% | ||||||
| Arlington County, VA, Industrial Development Authority Rev. (Colonial Village), FNMA, 5.15%, 2031 | $ | 3,000,000 | $ | 2,997,630 | ||
51
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Multi-Family Housing Revenue - continued | ||||||
| Virginia Housing Development Authority Rev., “C”, 5.625%, 2038 | $ | 1,355,000 | $ | 1,364,173 | ||
| Virginia Housing Development Authority Rev., “D”, 4.6%, 2033 | 1,000,000 | 925,770 | ||||
| Virginia Housing Development Authority Rev., “G”, 5.625%, 2020 | 2,000,000 | 2,009,420 | ||||
| Virginia Housing Development Authority Rev., Rental Housing, “B”, 5.5%, 2030 | 1,450,000 | 1,512,365 | ||||
| Virginia Housing Development Authority Rev., Rental Housing, “E”, 4.8%, 2039 | 3,000,000 | 2,930,580 | ||||
| $ | 11,739,938 | |||||
| Parking - 0.5% | ||||||
| Norfolk, VA, Parking Systems Rev., NATL, 5%, 2020 | $ | 1,630,000 | $ | 1,639,356 | ||
| Sales & Excise Tax Revenue - 3.7% | ||||||
| Massachusetts Bay Transportation Authority, Sales Tax Rev., “A-1”, 5.25%, 2029 | $ | 2,250,000 | $ | 2,578,838 | ||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., 0%, 2034 | 3,795,000 | 797,216 | ||||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., 5.25%, 2057 | 2,135,000 | 2,116,383 | ||||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “A”, 5.5%, 2028 | 1,470,000 | 1,541,971 | ||||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “A”, 0%, 2033 | 3,285,000 | 742,476 | ||||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “A”, 5.375%, 2039 | 4,650,000 | 4,729,469 | ||||
| $ | 12,506,353 | |||||
| Single Family Housing - State - 6.5% | ||||||
| Virginia Housing Development Authority Commonwealth, 5.1%, 2035 | $ | 2,000,000 | $ | 2,023,640 | ||
| Virginia Housing Development Authority Commonwealth, “A”, 5%, 2031 | 2,000,000 | 2,010,000 | ||||
| Virginia Housing Development Authority Commonwealth, “B”, 4.75%, 2032 | 2,000,000 | 1,933,200 | ||||
| Virginia Housing Development Authority Commonwealth, “C”, 4.4%, 2022 | 1,270,000 | 1,216,419 | ||||
| Virginia Housing Development Authority Commonwealth, “C”, 4.66%, 2027 | 1,285,000 | 1,234,358 | ||||
| Virginia Housing Development Authority Commonwealth, “C”, 4.625%, 2027 | 2,630,000 | 2,512,939 | ||||
| Virginia Housing Development Authority Commonwealth, “C”, 4.75%, 2032 | 1,795,000 | 1,704,586 | ||||
| Virginia Housing Development Authority, Commonwealth Mortgage, “A-5”, 4.4%, 2015 | 1,000,000 | 1,016,190 | ||||
| Virginia Housing Development Authority, Commonwealth Mortgage, “A-5”, 5.6%, 2026 | 3,000,000 | 3,150,630 | ||||
| Virginia Housing Development Authority, Rental Housing, “B”, 5%, 2045 | 3,050,000 | 3,035,269 | ||||
| Virginia Housing Development Authority, Rental Housing, “F”, 5%, 2045 | 2,125,000 | 2,114,545 | ||||
| $ | 21,951,776 | |||||
| Issuer | Shares/Par | Value ($) | ||||
| State & Agency - Other - 1.5% | ||||||
| Fairfax County, VA, COP, 6.1%, 2017 | $ | 3,090,000 | $ | 3,473,747 | ||
| Virginia Biotechnology Research Park Lease Rev. (Consolidated Laboratories), 5%, 2021 | 1,500,000 | 1,594,455 | ||||
| $ | 5,068,202 | |||||
| State & Local Agencies - 13.7% | ||||||
| Caroline County, VA, Industrial Development Authority Lease Rev., AMBAC, 5.125%, 2034 | $ | 1,000,000 | $ | 985,600 | ||
| Chesapeake, VA, Industrial Development Authority (Chesapeake Court House), NATL, 6.25%, 2011 | 2,735,000 | 2,739,786 | ||||
| Chesapeake, VA, Industrial Development Authority (Chesapeake Court House), NATL, 5.25%, 2017 | 2,000,000 | 2,002,760 | ||||
| Delaware Valley, PA, Regional Finance Authority, “C”, FRN, 0.919%, 2037 | 1,915,000 | 1,358,482 | ||||
| Dinwiddie County, VA, Industrial Development Authority Lease Rev., “B”, NATL, 5%, 2030 | 2,500,000 | 2,513,775 | ||||
| Fairfax County, VA, Economic Development Authority (Fairfax Public Improvement Project), 5%, 2030 | 1,000,000 | 1,039,930 | ||||
| Fairfax County, VA, Economic Development Authority Rev. (U.S. Route 28), NATL, 5%, 2029 | 1,000,000 | 1,035,760 | ||||
| Front Royal & Warren County, VA, Industrial Development Authority Lease Rev., School & Capital Improvement, “B”, AGM, 5%, 2035 | 2,875,000 | 2,924,795 | ||||
| King George County, VA, Industrial Development Authority Lease Rev., AGM, 5%, 2036 | 2,000,000 | 2,041,080 | ||||
| Manassas Park, VA, Economic Development Authority Lease Rev., “A”, 6%, 2035 | 1,000,000 | 985,820 | ||||
| Massachusetts State College, Building Authority Project Rev., “A”, 5.5%, 2049 | 2,335,000 | 2,501,836 | ||||
| Middlesex County, VA, Industrial Development Authority Rev., AMBAC, 5.125%, 2012 (c) | 1,000,000 | 1,105,810 | ||||
| Middlesex County, VA, Industrial Development Authority Rev., AMBAC, 5.25%, 2012 (c) | 2,000,000 | 2,217,340 | ||||
| Montgomery County, VA, Industrial Development Authority (Public Facilities Project), 5%, 2029 | 500,000 | 513,640 | ||||
| Montgomery County, VA, Industrial Development, “B”, AMBAC, 6%, 2011 (c) | 1,000,000 | 1,052,520 | ||||
| Montgomery County, VA, Industrial Development, “C”, AMBAC, 6%, 2011 (c) | 1,120,000 | 1,178,822 | ||||
| Orange County, VA, Industrial Development Authority (Orange County Project), AMBAC, 5%, 2012 (c) | 1,000,000 | 1,083,080 | ||||
| Powhatan County, VA, 5%, 2032 | 2,500,000 | 2,650,600 | ||||
| Powhatan County, VA, Economic Development Authority Lease Rev. (Virginia Capital Projects), AMBAC, 5.25%, 2033 | 1,000,000 | 1,018,680 | ||||
| Prince William County, VA, Lease Partnerships, 5%, 2021 | 1,500,000 | 1,582,920 | ||||
| Richmond, VA, Public Facilities (Megahertz Project), “A”, COP, AMBAC, 5%, 2022 | 1,600,000 | 1,624,816 | ||||
| Southwest Virginia Regional Jail Authority Rev., NATL, 5%, 2035 | 1,720,000 | 1,487,060 | ||||
52
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Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| State & Local Agencies - continued | ||||||
| Stafford County, VA, Economic Development Authority Lease Rev., ASSD GTY, 5%, 2033 | $ | 3,000,000 | $ | 3,113,940 | ||
| Virginia College Building Authority, Educational Facilities Rev., 4.5%, 2032 | 1,550,000 | 1,574,335 | ||||
| Virginia College Building Authority, Educational Facilities Rev. (21st Century College & Equipment), “A”, 5%, 2029 | 1,500,000 | 1,620,885 | ||||
| Virginia Public Building Authority, Public Facilities Rev., “A”, 5%, 2013 | 2,500,000 | 2,798,650 | ||||
| Virginia Public Building Authority, Public Facilities Rev., “B”, 5.25%, 2028 | 1,000,000 | 1,099,550 | ||||
| Virginia Public Building Authority, Public Facilities Rev., “B”, 5%, 2029 | 500,000 | 540,170 | ||||
| $ | 46,392,442 | |||||
| Tax - Other - 2.4% | ||||||
| Greater Richmond Convention Center, VA, Authority Hotel Tax Rev. (Convention Center Expansion Project), 6.125%, 2010 (c) | $ | 3,500,000 | $ | 3,574,270 | ||
| Guam Government Ltd. Obligation Rev., “A”, 5.375%, 2024 | 365,000 | 377,614 | ||||
| Guam Government Ltd. Obligation Rev., “A”, 5.625%, 2029 | 120,000 | 122,908 | ||||
| New York, NY, City Transitional Finance Authority Building Aid Rev., “S-3”, 5.25%, 2039 | 1,000,000 | 1,048,630 | ||||
| Puerto Rico Infrastructure Financing Authority, Special Tax Rev., “C”, FGIC, 5.5%, 2022 | 1,445,000 | 1,483,755 | ||||
| Virgin Islands Public Finance Authority Rev. (Diageo), “A”, 6.625%, 2029 | 830,000 | 895,114 | ||||
| Virgin Islands Public Finance Authority Rev., “A-1”, 5%, 2029 | 250,000 | 243,918 | ||||
| Virgin Islands Public Finance Authority Rev., “A-1”, 5%, 2039 | 285,000 | 260,709 | ||||
| Virgin Islands Public Finance Authority Rev., “B”, 5%, 2025 | 250,000 | 251,123 | ||||
| $ | 8,258,041 | |||||
| Tobacco - 1.0% | ||||||
| Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 5.875%, 2047 | $ | 565,000 | $ | 410,004 | ||
| Virgin Islands Tobacco Settlement Financing Corp., 5%, 2021 | 395,000 | 375,882 | ||||
| Virginia Tobacco Settlement Financing Corp., 5.625%, 2015 (c) | 1,000,000 | 1,165,950 | ||||
| Virginia Tobacco Settlement Financing Corp., “B-1”, 5%, 2047 | 2,000,000 | 1,342,580 | ||||
| $ | 3,294,416 | |||||
| Toll Roads - 0.6% | ||||||
| Metropolitan Washington, DC, Airports Authority Rev. (Dulles Toll Road), “A”, 5%, 2039 | $ | 2,000,000 | $ | 2,013,500 | ||
| Transportation - Special Tax - 0.9% | ||||||
| Washington, DC, Metropolitan Area Transit Authority Gross Rev., “A”, 5.25%, 2029 | $ | 1,485,000 | $ | 1,593,851 | ||
| Issuer | Shares/Par | Value ($) | ||||
| Transportation - Special Tax - continued | ||||||
| Washington, DC, Metropolitan Area Transit Authority Gross Rev., “A”, 5.125%, 2032 | $ | 1,365,000 | $ | 1,431,953 | ||
| $ | 3,025,804 | |||||
| Universities - Colleges - 4.1% | ||||||
| Amherst, VA, Industrial Development Authority Rev. (Educational Facilities Sweet Briar), 5%, 2026 | $ | 1,770,000 | $ | 1,736,901 | ||
| Florida State University Board of Governors, System Improvement Rev., 6.25%, 2030 | 1,000,000 | 1,131,340 | ||||
| Illinois Finance Authority Rev. (Roosevelt University Project), 6.5%, 2039 | 2,130,000 | 2,161,567 | ||||
| University of Virginia (University Rev.), 5%, 2040 | 1,990,000 | 2,091,828 | ||||
| University of Virginia (University Rev.), “B”, 5%, 2027 | 2,690,000 | 2,828,212 | ||||
| Virginia College Building Authority, Educational Facilities Rev. (Regent University), 5%, 2026 | 2,000,000 | 1,920,600 | ||||
| Virginia College Building Authority, Educational Facilities Rev. (Roanoke College), 4.5%, 2037 | 2,180,000 | 1,992,389 | ||||
| $ | 13,862,837 | |||||
| Universities - Secondary Schools - 0.6% | ||||||
| Alexandria, VA, Industrial Development Authority, Educational Facilities Rev. (Episcopal High School), “A”, 5%, 2040 | $ | 1,900,000 | $ | 1,907,125 | ||
| Utilities - Investor Owned - 1.1% | ||||||
| Halifax County, VA, Industrial Development Authority (Old Dominion Electric Cooperative), AMBAC, 5.625%, 2028 | $ | 3,000,000 | $ | 3,031,230 | ||
| Mecklenburg County, VA, Industrial Development Authority Rev. (UAE Mecklenburg LP), 6.5%, 2017 | 700,000 | 705,145 | ||||
| $ | 3,736,375 | |||||
| Utilities - Municipal Owned - 6.0% | ||||||
| Bristol, VA, Utility Systems Rev., ETM, AGM, 5.75%, 2016 (c) | $ | 240,000 | $ | 287,496 | ||
| Guam Power Authority Rev., AMBAC, 5.25%, 2015 | 2,020,000 | 2,030,948 | ||||
| Harris County, TX, Cultural Education Facilities Financial Corp., Thermal Utilities Rev. (Teco Project), “A”, 5.25%, 2035 | 395,000 | 414,426 | ||||
| Long Island Power Authority, Electric Systems Rev., “A”, BHAC, 5.5%, 2033 | 1,435,000 | 1,577,854 | ||||
| Long Island Power Authority, Electric Systems Rev., “A”, 6%, 2033 | 470,000 | 524,976 | ||||
| Puerto Rico Electric Power Authority, Power Rev., “WW”, 5.5%, 2038 | 2,000,000 | 2,014,300 | ||||
| Puerto Rico Electric Power Authority, Power Rev., “XX”, 5.25%, 2040 | 2,540,000 | 2,505,685 | ||||
| Richmond, VA, Public Utilities Rev., AGM, 5%, 2012 (c)(f) | 5,000,000 | 5,366,550 | ||||
| Richmond, VA, Public Utilities Rev., 5%, 2035 | 2,415,000 | 2,546,352 | ||||
| Richmond, VA, Public Utilities Rev., AGM, 5%, 2035 | 1,000,000 | 1,032,040 | ||||
53
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Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Utilities - Municipal Owned - continued | ||||||
| Richmond, VA, Public Utilities Rev., 5%, 2040 | $ | 2,000,000 | $ | 2,096,840 | ||
| $ | 20,397,467 | |||||
| Utilities - Other - 0.9% | ||||||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2019 | $ | 945,000 | $ | 962,501 | ||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2021 | 555,000 | 560,189 | ||||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2022 | 290,000 | 291,299 | ||||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2024 | 215,000 | 213,489 | ||||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2026 | 1,140,000 | 1,116,630 | ||||
| $ | 3,144,108 | |||||
| Water & Sewer Utility Revenue - 21.0% | ||||||
| Commonwealth of Puerto Rico Aqueduct & Sewer Authority Rev., “A”, ASSD GTY, 5%, 2028 | $ | 400,000 | $ | 411,116 | ||
| Commonwealth of Puerto Rico Aqueduct & Sewer Authority Rev., “A”, 6%, 2044 | 3,000,000 | 3,097,980 | ||||
| Fairfax County, VA, Water Authority Rev., 5%, 2032 | 2,000,000 | 2,050,500 | ||||
| Fairfax County, VA, Water Authority Rev., Unrefunded, 5%, 2027 | 3,210,000 | 3,309,703 | ||||
| Hampton Roads, VA, Sanitation District Wastewater Rev., 5%, 2033 | 2,000,000 | 2,122,920 | ||||
| Hampton Roads, VA, Sanitation District Wastewater Rev., 5%, 2038 | 3,750,000 | 3,943,950 | ||||
| James City, VA, Water & Sewer Rev., 5%, 2040 | 1,290,000 | 1,343,870 | ||||
| Loudoun County, VA, Water & Sewer Rev., 4.375%, 2037 | 3,600,000 | 3,574,512 | ||||
| Norfolk, VA, Water Rev., 4.75%, 2038 | 4,000,000 | 4,061,800 | ||||
| Spotsylvania County, VA, Water & Sewer Rev., AGM, 5%, 2022 | 1,450,000 | 1,472,983 | ||||
| Spotsylvania County, VA, Water & Sewer Rev., AGM, 4.5%, 2032 | 1,500,000 | 1,513,620 | ||||
| Spotsylvania County, VA, Water & Sewer Rev., AGM, 4.75%, 2035 | 1,500,000 | 1,527,225 | ||||
| Upper Occoquan, VA, Sewage Authority Regional Sewage Rev., 4.75%, 2031 | 1,370,000 | 1,418,251 | ||||
| Upper Occoquan, VA, Sewage Authority Regional Sewage Rev., 5%, 2041 | 2,000,000 | 2,074,800 | ||||
| Virginia Beach, VA, Storm Water Utilities Rev., 6%, 2020 | 1,000,000 | 1,021,140 | ||||
| Virginia Resources Authority Rev., 5%, 2013 (c)(u) | 55,000 | 62,096 | ||||
| Virginia Resources Authority Rev., 5%, 2013 (c)(u) | 60,000 | 67,741 | ||||
| Virginia Resources Authority Rev., 5%, 2013 (c)(u) | 375,000 | 423,379 | ||||
| Virginia Resources Authority Rev., 5%, 2021 (u) | 2,725,000 | 2,965,945 | ||||
| Virginia Resources Authority Rev., 5%, 2023 (u) | 2,980,000 | 3,221,171 | ||||
| Virginia Resources Authority Rev., 5%, 2033 (u) | 4,645,000 | 4,835,584 | ||||
| Virginia Resources Authority Sewer Systems Rev. (Hopewell Regional Wastewater), 5.75%, 2021 | 1,335,000 | 1,357,401 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| Water & Sewer Utility Revenue - continued | ||||||
| Virginia Resources Authority, Clean Water Rev., 5.4%, 2010 (c) | $ | 1,135,000 | $ | 1,163,375 | ||
| Virginia Resources Authority, Clean Water Rev., 6%, 2010 (c) | 2,750,000 | 2,826,780 | ||||
| Virginia Resources Authority, Clean Water Rev., 4.75%, 2027 | 3,000,000 | 3,176,160 | ||||
| Virginia Resources Authority, Clean Water Rev., 5%, 2031 | 1,000,000 | 1,077,470 | ||||
| Virginia Resources Authority, Clean Water Rev., 5%, 2037 | 2,750,000 | 2,920,610 | ||||
| Virginia Resources Authority, Infrastructure Rev., AGM, 5.5%, 2010 (c) | 350,000 | 354,771 | ||||
| Virginia Resources Authority, Infrastructure Rev., AGM, 5.5%, 2010 (c) | 630,000 | 638,587 | ||||
| Virginia Resources Authority, Infrastructure Rev., 5%, 2017 | 330,000 | 333,957 | ||||
| Virginia Resources Authority, Infrastructure Rev., NATL, 5.5%, 2019 | 230,000 | 239,522 | ||||
| Virginia Resources Authority, Infrastructure Rev., AGM, 5.5%, 2019 | 90,000 | 91,096 | ||||
| Virginia Resources Authority, Infrastructure Rev., NATL, 5.5%, 2020 | 240,000 | 249,910 | ||||
| Virginia Resources Authority, Infrastructure Rev. (Virginia Pooled Funding Program), “B”, 5.25%, 2033 | 3,000,000 | 3,278,820 | ||||
| Virginia Resources Authority, Infrastructure Rev., “A”, 5%, 2010 (c) | 1,030,000 | 1,043,689 | ||||
| Virginia Resources Authority, Infrastructure Rev., “A”, NATL, 5.5%, 2011 (c) | 660,000 | 702,529 | ||||
| Virginia Resources Authority, Infrastructure Rev., “A”, NATL, 5.5%, 2011 (c) | 710,000 | 755,752 | ||||
| Virginia Resources Authority, Infrastructure Rev., “A”, NATL, 5.5%, 2011 (c) | 700,000 | 745,108 | ||||
| Virginia Resources Authority, Infrastructure Rev., “A”, NATL, 5.5%, 2011 (c) | 750,000 | 798,330 | ||||
| Virginia Resources Authority, Infrastructure Rev., “B”, 5%, 2038 | 2,600,000 | 2,777,268 | ||||
| Virginia Resources Authority, Water & Sewer Systems Rev. (Tuckahoe Creek Project), 5%, 2035 | 2,015,000 | 2,070,936 | ||||
| $ | 71,122,357 | |||||
| Total Municipal Bonds (Identified Cost, $330,335,370) | $ | 338,395,494 | ||||
| Money Market Funds (v) - 1.1% | ||||||
| MFS Institutional Money Market Portfolio, 0.17%, at Cost and Net Asset Value | 3,651,142 | $ | 3,651,142 | |||
| Total Investments (Identified Cost, $333,986,512) | $ | 342,046,636 | ||||
| Other Assets, Less Liabilities - (0.9)% | (3,093,208) | |||||
| Net Assets - 100.0% | $ | 338,953,428 | ||||
54
Table of Contents
Portfolio of Investments – continued
Derivative Contracts at 3/31/10
Futures Contracts Outstanding at 3/31/10
| Description | Currency | Contracts | Value | Expiration Date | Unrealized Appreciation (Depreciation) | |||||
| Asset Derivatives | ||||||||||
| Interest Rate Futures | ||||||||||
| U.S. Treasury Note 10 yr (Short) | USD | 33 | $3,836,250 | Jun-10 | $13,473 | |||||
| U.S. Treasury Bond 30 yr (Short) | USD | 44 | 5,109,500 | Jun-10 | 5,002 | |||||
| $18,475 | ||||||||||
At March 31, 2010, the fund had sufficient cash and/or other liquid securities to cover any commitments under these derivative contracts.
See Portfolio Footnotes and Notes to Financial Statements
55
Table of Contents
PORTFOLIO OF INVESTMENTS
3/31/10
MFS® WEST VIRGINIA MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.
| Municipal Bonds - 96.7% | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| General Obligations - General Purpose - 13.8% | ||||||
| Commonwealth of Puerto Rico, Public Improvement, NATL, 5.75%, 2010 (c) | $ | 6,000,000 | $ | 6,070,380 | ||
| Commonwealth of Puerto Rico, Public Improvement, 5.25%, 2023 | 1,500,000 | 1,514,520 | ||||
| Commonwealth of Puerto Rico, Public Improvement, “A”, CIFG, 5%, 2034 | 780,000 | 714,410 | ||||
| Puerto Rico Public Buildings Authority Rev. (State Office Building), “F”, SYNCORA, 5.25%, 2025 | 2,000,000 | 1,975,060 | ||||
| Puerto Rico Public Buildings Authority Rev., Guaranteed, “M”, 6.25%, 2023 | 660,000 | 724,324 | ||||
| Puerto Rico Public Buildings Authority Rev., Guaranteed, “M”, 6.25%, 2031 | 725,000 | 807,143 | ||||
| Puerto Rico Public Buildings Authority Rev., Guaranteed, “Q”, 5.625%, 2039 | 740,000 | 726,909 | ||||
| State of West Virginia, NATL, 5%, 2015 | 2,500,000 | 2,853,570 | ||||
| West Virginia Highway Improvements, FGIC, 5.625%, 2010 (c) | 1,000,000 | 1,018,260 | ||||
| West Virginia Sewer Improvements, FGIC, 5.5%, 2017 | 2,565,000 | 2,592,471 | ||||
| $ | 18,997,047 | |||||
| General Obligations - Improvement - 0.2% | ||||||
| Guam Government, “A”, 6.75%, 2029 | $ | 35,000 | $ | 37,288 | ||
| Guam Government, “A”, 5.25%, 2037 | 250,000 | 215,253 | ||||
| Guam Government, “A”, 7%, 2039 | 45,000 | 48,246 | ||||
| $ | 300,787 | |||||
| General Obligations - Schools - 2.5% | ||||||
| Monongalia County, WV, Board of Education, NATL, 5%, 2027 | $ | 2,350,000 | $ | 2,446,938 | ||
| Putnam County, WV, Board of Education, 4%, 2025 | 1,000,000 | 1,008,240 | ||||
| $ | 3,455,178 | |||||
| Healthcare Revenue - Hospitals - 12.9% | ||||||
| Illinois Finance Authority Rev. (Central Dupage Health), 5%, 2027 | $ | 465,000 | $ | 470,273 | ||
| Illinois Finance Authority Rev. (Edward Hospital), “A”, AMBAC, 5.5%, 2040 | 945,000 | 936,703 | ||||
| Illinois Finance Authority Rev. (Provena Health), “A”, 6%, 2028 | 450,000 | 443,156 | ||||
| Illinois Finance Authority Rev. (Silver Cross Hospital & Medical Centers), 7%, 2044 | 420,000 | 435,905 | ||||
| Jefferson Parish, LA, Hospital Rev., Hospital Service District No. 1 (West Jefferson Medical Center), “B”, AGM, 5.25%, 2028 | 220,000 | 227,190 | ||||
| Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Owensboro Medical Health System), “A”, 6.375%, 2040 | 410,000 | 406,429 | ||||
| Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Owensboro Medical Health System), “A”, 6.5%, 2045 | 290,000 | 285,261 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| Healthcare Revenue - Hospitals - continued | ||||||
| Louisville & Jefferson County, KY, Metropolitan Government Healthcare Systems Rev. (Norton Healthcare, Inc.), 5.25%, 2036 | $ | 725,000 | $ | 694,028 | ||
| Michigan Hospital Finance Authority Rev. (Henry Ford Health System), 5.625%, 2029 | 85,000 | 83,461 | ||||
| Michigan Hospital Finance Authority Rev. (Henry Ford Health System), 5.75%, 2039 | 855,000 | 825,503 | ||||
| Ohio County, WV, County Commission Health System Rev. (Ohio Valley Medical Center), 5.75%, 2013 | 470,000 | 425,806 | ||||
| Randolph County, WV, Community Health Systems Rev. (Davis Health Systems, Inc.), AGM, 5.2%, 2021 | 1,000,000 | 1,014,910 | ||||
| Weirton, WV, Municipal Hospital Building, Commission Rev. (Weirton Hospital Medical Center), 6.375%, 2031 | 600,000 | 570,594 | ||||
| West Virginia Hospital Finance Authority, Hospital Rev. (Camden Clark Memorial Hospital), ASSD GTY, 5.875%, 2034 | 1,000,000 | 1,036,580 | ||||
| West Virginia Hospital Finance Authority, Hospital Rev. (Charleston Area Medical Center), “A”, ETM, 6.5%, 2023 (c) | 2,000,000 | 2,543,480 | ||||
| West Virginia Hospital Finance Authority, Hospital Rev. (General Division Medical Office Building), 7.25%, 2014 | 1,040,000 | 1,040,499 | ||||
| West Virginia Hospital Finance Authority, Hospital Rev. (Health Systems Obligations), 5.75%, 2039 | 1,000,000 | 1,006,070 | ||||
| West Virginia Hospital Finance Authority, Hospital Rev. (Thomas Health System), 6.5%, 2038 | 500,000 | 463,530 | ||||
| West Virginia Hospital Finance Authority, Hospital Rev. (United Hospital Center, Inc.), “A”, AMBAC, 5%, 2022 | 2,500,000 | 2,546,200 | ||||
| West Virginia Hospital Finance Authority, Hospital Rev. (West Virginia United Health Systems), “E”, 5.625%, 2035 | 1,000,000 | 1,025,030 | ||||
| West Virginia Hospital Finance Authority, Hospital Rev. (West Virginia University Hospital), AMBAC, 5%, 2018 | 1,000,000 | 1,001,090 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (Wheaton Franciscan Services), “B”, 5.125%, 2020 | 355,000 | 349,519 | ||||
| $ | 17,831,217 | |||||
| Industrial Revenue - Other - 0.3% | ||||||
| Virgin Islands Public Finance Authority, Refinery Facilities Rev. (Hovensa Coker Project), 5.875%, 2022 | $ | 350,000 | $ | 349,209 | ||
56
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Miscellaneous Revenue - Other - 1.8% | ||||||
| Louisiana Local Government, Environmental Facilities & Community Development Authority Rev. (Air Cargo), 6.65%, 2025 | $ | 550,000 | $ | 517,028 | ||
| West Virginia, Higher Education Policy Commission Rev. (Community & Technology-Capital Improvement), “A”, 5%, 2039 (f) | 2,000,000 | 2,013,080 | ||||
| $ | 2,530,108 | |||||
| Sales & Excise Tax Revenue - 1.2% | ||||||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., 5.25%, 2057 | $ | 1,015,000 | $ | 1,006,149 | ||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “A”, 5.5%, 2028 | 635,000 | 666,090 | ||||
| $ | 1,672,239 | |||||
| Single Family Housing Revenue - Local - 0.0% | ||||||
| Charlestown, WV, Residential Mortgage Rev., 6.2%, 2011 | $ | 10,000 | $ | 10,009 | ||
| Single Family Housing - State - 4.0% | ||||||
| West Virginia Housing Development Fund Rev., 5.25%, 2018 | $ | 885,000 | $ | 885,212 | ||
| West Virginia Housing Development Fund Rev., 5.3%, 2023 | 390,000 | 390,051 | ||||
| West Virginia Housing Development Fund Rev., “A”, 4.625%, 2032 | 850,000 | 829,940 | ||||
| West Virginia Housing Development Fund Rev., “B”, 5.15%, 2032 | 3,410,000 | 3,405,362 | ||||
| $ | 5,510,565 | |||||
| Solid Waste Revenue - 0.2% | ||||||
| Palm Beach County, FL, Solid Waste Authority Rev. Improvement, BHAC, 5%, 2027 | $ | 305,000 | $ | 323,193 | ||
| State & Local Agencies - 18.8% | ||||||
| FYI Properties Lease Rev. (Washington State Project), 5.5%, 2034 | $ | 545,000 | $ | 581,270 | ||
| Huntington, WV, Municipal Development Authority Rev., NATL, 5.1%, 2018 | 1,740,000 | 1,757,487 | ||||
| West Virginia Building Commission, Lease Rev. “B”, AMBAC, 5.375%, 2018 | 2,500,000 | 2,609,375 | ||||
| West Virginia Building Commission, Lease Rev. (WV Regional Jail), “A”, AMBAC, 5.375%, 2018 | 8,040,000 | 8,792,222 | ||||
| West Virginia Economic Development Authority (Correctional Juvenile & Public), NATL, 5%, 2026 | 2,100,000 | 2,139,081 | ||||
| West Virginia Economic Development Authority (Correctional Juvenile Safety), “A”, NATL, 5%, 2029 | 1,530,000 | 1,559,177 | ||||
| West Virginia Economic Development Authority, Auto Lease Rev., 5.2%, 2033 | 1,000,000 | 1,028,840 | ||||
| West Virginia Economic Development Authority, Auto Lease Rev. (Capitol Parking Garage), AMBAC, 5.8%, 2020 | 1,260,000 | 1,281,281 | ||||
| West Virginia Economic Development Authority, Department of Environmental Protection, 5.5%, 2022 | 2,000,000 | 2,114,680 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| State & Local Agencies - continued | ||||||
| West Virginia Economic Development Authority, Lease Rev. (State Office Building), 5%, 2020 | $ | 1,000,000 | $ | 1,020,350 | ||
| West Virginia Economic Development Authority, Lease Rev. (State Office Building), “B”, NATL, 5.25%, 2025 | 645,000 | 667,472 | ||||
| West Virginia Economic Development Authority, Lease Rev. (State Office Building), “B”, NATL, 5.25%, 2030 | 1,355,000 | 1,386,680 | ||||
| West Virginia Hospital Finance Authority, Hospital Rev. (Veterans Nursing Home), 5.5%, 2034 | 1,000,000 | 912,110 | ||||
| $ | 25,850,025 | |||||
| Tax - Other - 3.5% | ||||||
| Guam Government Ltd. Obligation Rev., “A”, 5.375%, 2024 | $ | 160,000 | $ | 165,530 | ||
| Guam Government Ltd. Obligation Rev., “A”, 5.625%, 2029 | 55,000 | 56,333 | ||||
| Virgin Islands Public Finance Authority Rev. (Diageo), “A”, 6.625%, 2029 | 360,000 | 388,242 | ||||
| Virgin Islands Public Finance Authority Rev., “A-1”, 5%, 2029 | 110,000 | 107,324 | ||||
| Virgin Islands Public Finance Authority Rev., “A-1”, 5%, 2039 | 120,000 | 109,772 | ||||
| Virgin Islands Public Finance Authority Rev., “B”, 5%, 2025 | 110,000 | 110,494 | ||||
| West Virginia School Building Authority Excess Lottery Rev., 5%, 2026 | 1,000,000 | 1,043,120 | ||||
| West Virginia School Building Authority Excess Lottery Rev., 5%, 2028 | 750,000 | 774,998 | ||||
| West Virginia School Building Authority, Rev., “A”, FGIC, 5%, 2020 | 2,000,000 | 2,115,440 | ||||
| $ | 4,871,253 | |||||
| Tax Assessment - 0.5% | ||||||
| Morgantown, WV, Tax Increment Rev., Parking Garage Project, “A”, 5%, 2033 | $ | 500,000 | $ | 388,035 | ||
| Ohio County, WV, Commission Tax Increment Rev. (Fort Henry Centre), “A”, 5.85%, 2034 | 300,000 | 274,329 | ||||
| $ | 662,364 | |||||
| Tobacco - 0.2% | ||||||
| Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 5.125%, 2024 | $ | 190,000 | $ | 174,618 | ||
| Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 5.875%, 2030 | 195,000 | 164,262 | ||||
| $ | 338,880 | |||||
| Universities - Colleges - 15.2% | ||||||
| Fairmont State College, WV, College Rev., “A”, FGIC, 5.375%, 2027 | $ | 1,500,000 | $ | 1,538,940 | ||
| Fairmont State College, WV, College Rev., “A”, FGIC, 5%, 2032 | 1,210,000 | 1,231,804 | ||||
| Fairmont State College, WV, College Rev., “B”, FGIC, 5%, 2032 | 2,250,000 | 2,266,155 | ||||
57
Table of Contents
Portfolio of Investments – continued
| Municipal Bonds - continued | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Universities - Colleges - continued | ||||||
| Massachusetts Health & Educational Facilities Authority Rev. (Massachusetts Institute of Technology), “I-1”, 5.2%, 2028 | $ | 1,180,000 | $ | 1,395,055 | ||
| Puerto Rico Industrial Tourist Education (University Plaza), NATL, 5%, 2021 | 1,270,000 | 1,270,914 | ||||
| Shepherd University Board of Governors, WV Rev. (Residence Facilities Projects), NATL, 5%, 2035 | 1,675,000 | 1,682,437 | ||||
| University of California Rev., “J”, AGM, 4.5%, 2035 | 1,255,000 | 1,202,114 | ||||
| West Virginia Department of Higher Education (Marshall University), FGIC, 5.25%, 2019 | 1,680,000 | 1,705,603 | ||||
| West Virginia Department of Higher Education (Student Union James C. Wilson College), 5.125%, 2022 | 1,500,000 | 1,536,300 | ||||
| West Virginia Department of Higher Education, “B”, FGIC, 5%, 2029 | 2,000,000 | 2,033,920 | ||||
| West Virginia University, University Systems Rev. (West Virginia University), NATL, 5.5%, 2020 | 1,700,000 | 1,894,888 | ||||
| West Virginia University, University Systems Rev. (West Virginia University), “A”, NATL, 5.25%, 2028 | 2,000,000 | 2,130,020 | ||||
| West Virginia, Higher Education Facilities Rev., “B”, FGIC, 5%, 2034 | 1,000,000 | 1,010,780 | ||||
| $ | 20,898,930 | |||||
| Utilities - Investor Owned - 4.8% | ||||||
| Mason County, WV, Pollution Control Rev. (Appalachian Power Co.), 5.5%, 2022 | $ | 750,000 | $ | 760,448 | ||
| Michigan Strategic Fund Ltd. Obligation Rev. (Detroit Edison), 5.625%, 2020 | 470,000 | 516,192 | ||||
| Michigan Strategic Fund Ltd. Obligation Rev. (Detroit Edison), 5.5%, 2029 (b) | 340,000 | 378,641 | ||||
| Pleasants County, WV, Pollution Control Rev. (Allegheny Community), “F”, 5.25%, 2037 | 300,000 | 287,373 | ||||
| West Virginia Economic Development Authority Solid Waste Disposal Facilities Rev., AMBAC, 4.9%, 2037 | 5,000,000 | 4,686,150 | ||||
| $ | 6,628,804 | |||||
| Utilities - Municipal Owned - 1.5% | ||||||
| Harris County, TX, Cultural Education Facilities Financial Corp., Thermal Utilities Rev. (Teco Project), “A”, 5.25%, 2035 | $ | 945,000 | $ | 991,475 | ||
| Puerto Rico Electric Power Authority, Power Rev., “XX”, 5.25%, 2040 | 1,085,000 | 1,070,342 | ||||
| $ | 2,061,817 | |||||
| Utilities - Other - 1.3% | ||||||
| California M-S-R Energy Authority Gas Rev., “A”, 6.5%, 2039 | $ | 615,000 | $ | 653,739 | ||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2019 | 480,000 | 488,890 | ||||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2021 | 245,000 | 247,291 | ||||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2022 | 125,000 | 125,560 | ||||
| Issuer | Shares/Par | Value ($) | ||||
| Utilities - Other - continued | ||||||
| Tennessee Energy Acquisition Corp., Gas Rev., “C”, 5%, 2021 | $ | 290,000 | $ | 289,261 | ||
| $ | 1,804,741 | |||||
| Water & Sewer Utility Revenue - 14.0% | ||||||
| Berkeley County, WV, Public Service Sewer District, “A”, 5%, 2047 | $ | 1,000,000 | $ | 792,100 | ||
| Commonwealth of Puerto Rico Aqueduct & Sewer Authority Rev., “A”, ASSD GTY, 5%, 2028 | 400,000 | 411,116 | ||||
| Commonwealth of Puerto Rico Aqueduct & Sewer Authority Rev., “A”, 6%, 2044 | 2,005,000 | 2,070,483 | ||||
| Detroit, MI, Sewer Disposal System Rev., “B”, AGM, 7.5%, 2033 | 310,000 | 369,777 | ||||
| Fairmont, WV, Waterworks Rev., AMBAC, 5.25%, 2022 | 200,000 | 202,144 | ||||
| King County, WA, Sewer Rev., 5%, 2038 | 1,360,000 | 1,408,416 | ||||
| West Virginia Water Development Authority Loan Program, “A”, AGM, 5%, 2044 | 2,000,000 | 1,986,900 | ||||
| West Virginia Water Development Authority Loan Program, “B”, AMBAC, 5.125%, 2024 | 2,140,000 | 2,230,864 | ||||
| West Virginia Water Development Authority Rev., AMBAC, 6.25%, 2020 | 1,000,000 | 1,013,520 | ||||
| West Virginia Water Development Authority Rev., AMBAC, 5.25%, 2023 | 1,000,000 | 1,043,510 | ||||
| West Virginia Water Development Authority Rev., AMBAC, 5%, 2026 | 2,850,000 | 2,919,996 | ||||
| West Virginia Water Development Authority, Infrastructure Rev., AGM, 5.5%, 2010 (c) | 895,000 | 917,814 | ||||
| West Virginia Water Development Authority, Infrastructure Rev., “A”, AMBAC, 5%, 2033 | 1,950,000 | 1,978,919 | ||||
| West Virginia Water Development Authority, Infrastructure Rev., “A”, AGM, 4.75%, 2045 | 2,000,000 | 1,949,740 | ||||
| $ | 19,295,299 | |||||
| Total Municipal Bonds (Identified Cost, $131,275,125) | $ | 133,391,665 | ||||
| Money Market Funds (v) - 0.6% | ||||||
| MFS Institutional Money Market Portfolio, 0.17%, at Cost and Net Asset Value | 795,623 | $ | 795,623 | |||
| Total Investments (Identified Cost, $132,070,748) | $ | 134,187,288 | ||||
| Other Assets, Less Liabilities - 2.7% | 3,695,442 | |||||
| Net Assets - 100.0% | $ | 137,882,730 | ||||
58
Table of Contents
Portfolio of Investments – continued
Derivative Contracts at 3/31/10
Futures Contracts Outstanding at 3/31/10
| Description | Currency | Contracts | Value | Expiration Date | Unrealized Appreciation (Depreciation) | |||||
| Asset Derivatives | ||||||||||
| Interest Rate Futures | ||||||||||
| U.S. Treasury Note 10 yr (short) | USD | 14 | $1,627,500 | Jun-10 | $5,716 | |||||
At March 31, 2010, the fund had sufficient cash and/or other liquid securities to cover any commitments under these derivative contracts.
Portfolio Footnotes:
| (b) | Mandatory tender date is earlier than stated maturity date. |
| (c) | Refunded bond. |
| (d) | Non-income producing security – in default. |
| (f) | All or a portion of the security has been segregated as collateral for open futures contracts. |
| (p) | Primary inverse floater. |
| (u) | Underlying security deposited into special purpose trust (“the trust”) by investment banker upon creation of self-deposited inverse floaters. |
| (v) | Underlying fund that is available only to investment companies managed by MFS. The rate quoted is the annualized seven-day yield of the fund at period end. |
The following abbreviations are used in this report and are defined:
| COP | Certificate of Participation | |||||
| ETM | Escrowed to Maturity | |||||
| FRN | Floating Rate Note. Interest rate resets periodically and may not be the rate reported at period end. | |||||
| LOC | Letter of Credit | |||||
| Insurers | Inverse Floaters | |||||
| AGM | Assured Guaranty Municipal | RITES | Residual Interest Tax-Exempt Security | |||
| AMBAC | AMBAC Indemnity Corp. | |||||
| ASSD GTY | Assured Guaranty Insurance Co. | |||||
| BHAC | Berkshire Hathaway Assurance Corp. | |||||
| CIFG | CDC IXIS Financial Guaranty | |||||
| FGIC | Financial Guaranty Insurance Co. | |||||
| FHA | Federal Housing Administration | |||||
| FNMA | Federal National Mortgage Assn. | |||||
| GNMA | Government National Mortgage Assn. | |||||
| NATL | National Public Finance Guarantee Corp. | |||||
| RADIAN | Radian Asset Assurance, Inc. | |||||
| SYNCORA | Syncora Guarantee Inc. | |||||
See Notes to Financial Statements
59
Table of Contents
Financial Statements
STATEMENTS OF ASSETS AND LIABILITIES
At 3/31/10
These statements represent each fund’s balance sheet, which details the assets and liabilities comprising the total value of each fund.
| Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | ||||||
| Assets | |||||||||
| Investments – | |||||||||
Non-affiliated issuers, at identified cost | $105,489,764 | $207,151,090 | $411,174,430 | $128,635,640 | |||||
Underlying funds, at cost and net asset value | 1,617,861 | 1,797,699 | 6,412,346 | 2,841,475 | |||||
| Total investments, at identified cost | $107,107,625 | $208,948,789 | $417,586,776 | $131,477,115 | |||||
Unrealized appreciation (depreciation) | 3,465,942 | 6,832,887 | 14,592,481 | 2,437,382 | |||||
| Total investments, at value | $110,573,567 | $215,781,676 | $432,179,257 | $133,914,497 | |||||
Receivables for | |||||||||
Investments sold | 441,769 | 4,744,317 | 1,095,326 | 475,041 | |||||
Fund shares sold | 108,520 | 659,553 | 959,019 | 311,122 | |||||
Interest and dividends | 1,448,772 | 3,263,834 | 6,351,576 | 2,060,013 | |||||
Other assets | 1,405 | 2,552 | 4,297 | 1,557 | |||||
Total assets | $112,574,033 | $224,451,932 | $440,589,475 | $136,762,230 | |||||
| Liabilities | |||||||||
Payables for | |||||||||
Distributions | $144,701 | $257,187 | $523,177 | $157,555 | |||||
Daily variation margin on open futures contracts | 3,125 | 29,688 | 28,906 | 15,781 | |||||
Investments purchased | 245,785 | 855,697 | 4,716,617 | 1,274,619 | |||||
Fund shares reacquired | 91,287 | 164,927 | 515,248 | 33,755 | |||||
Payable to the holder of the floating rate certificate from trust assets | — | — | 8,014,480 | 946,601 | |||||
Payable for interest expense and fees | — | — | 14,990 | 1,438 | |||||
Payable to affiliates | |||||||||
Investment adviser | 2,760 | 5,489 | 10,512 | 3,306 | |||||
Shareholder servicing costs | 10,388 | 18,184 | 36,976 | 13,400 | |||||
Distribution and service fees | 1,031 | 4,920 | 9,136 | 7,782 | |||||
Administrative services fee | 147 | 238 | 405 | 165 | |||||
Payable for independent Trustees’ compensation | 6,392 | 8,146 | 10,975 | 6,325 | |||||
Accrued expenses and other liabilities | 18,326 | 29,076 | 42,629 | 26,159 | |||||
Total liabilities | $523,942 | $1,373,552 | $13,924,051 | $2,486,886 | |||||
Net assets | $112,050,091 | $223,078,380 | $426,665,424 | $134,275,344 | |||||
| Net assets consist of | |||||||||
| Paid-in capital | $108,084,117 | $215,693,822 | $411,172,519 | $131,901,827 | |||||
| Unrealized appreciation (depreciation) on investments | 3,470,025 | 6,846,737 | 14,612,791 | 2,445,531 | |||||
| Accumulated net realized gain (loss) on investments | 421,049 | 495,366 | 593,024 | (124,614 | ) | ||||
Undistributed net investment income | 74,900 | 42,455 | 287,090 | 52,600 | |||||
Net assets | $112,050,091 | $223,078,380 | $426,665,424 | $134,275,344 | |||||
60
Table of Contents
Statements of Assets and Liabilities – continued
| Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | |||||
Net assets | ||||||||
| Class A | $107,625,355 | $177,428,995 | $346,345,299 | $113,411,353 | ||||
| Class B | 4,424,736 | 14,228,882 | 11,331,106 | 20,863,991 | ||||
Class C | — | 31,420,503 | 68,989,019 | — | ||||
Total net assets | $112,050,091 | $223,078,380 | $426,665,424 | $134,275,344 | ||||
Shares of beneficial interest outstanding | ||||||||
| Class A | 10,964,870 | 16,227,867 | 29,586,030 | 11,298,629 | ||||
| Class B | 450,216 | 1,304,903 | 969,129 | 2,073,141 | ||||
Class C | — | 2,877,318 | 5,896,886 | — | ||||
Total shares of beneficial interest outstanding | 11,415,086 | 20,410,088 | 36,452,045 | 13,371,770 | ||||
Class A shares | ||||||||
Net asset value per share | $9.82 | $10.93 | $11.71 | $10.04 | ||||
Offering price per share (100 / 95.25 x net asset value per share) | $10.31 | $11.48 | $12.29 | $10.54 | ||||
Class B shares | ||||||||
Net asset value and offering price per share | $9.83 | $10.90 | $11.69 | $10.06 | ||||
Class C shares | ||||||||
Net asset value and offering price per share | $— | $10.92 | $11.70 | $— | ||||
On sales of $50,000 or more, the maximum offering price of Class A shares is reduced. A contingent deferred sales charge may be imposed on redemptions of Class A, Class B, and Class C shares.
See Notes to Financial Statements
61
Table of Contents
Statements of Assets and Liabilities – continued
| At 3/31/10 | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | |||||
| Assets | |||||||||
| Investments – | |||||||||
Non-affiliated issuers, at identified cost | $160,892,550 | $122,261,530 | $330,335,370 | $131,275,125 | |||||
Underlying funds, at cost and net asset value | 7,744,864 | 2,250,146 | 3,651,142 | 795,623 | |||||
| Total investments, at identified cost | $168,637,414 | $124,511,676 | $333,986,512 | $132,070,748 | |||||
Unrealized appreciation (depreciation) | 4,620,323 | 3,227,415 | 8,060,124 | 2,116,540 | |||||
| Total investments, at value | $173,257,737 | $127,739,091 | $342,046,636 | $134,187,288 | |||||
Receivables for | |||||||||
Investments sold | 3,374,150 | 3,297,326 | 5,708,606 | 2,732,050 | |||||
Fund shares sold | 561,882 | 115,091 | 453,814 | 49,940 | |||||
Interest and dividends | 2,691,944 | 1,851,353 | 5,341,307 | 2,324,878 | |||||
| Receivable from investment adviser | — | — | — | 6 | |||||
Other assets | 1,966 | 1,586 | 3,546 | 1,679 | |||||
Total assets | $179,887,679 | $133,004,447 | $353,553,909 | $139,295,841 | |||||
| Liabilities | |||||||||
Payables for | |||||||||
Distributions | $195,238 | $181,733 | $487,584 | $153,281 | |||||
Daily variation margin on open futures contracts | 5,313 | 10,000 | 30,937 | 4,375 | |||||
Investments purchased | 5,073,398 | 2,004,476 | 8,313,795 | 1,067,133 | |||||
Fund shares reacquired | 102,140 | 220,192 | 229,909 | 143,728 | |||||
Payable to the holder of the floating rate certificate from trust assets | — | — | 5,427,789 | — | |||||
Payable for interest expense and fees | — | — | 14,972 | — | |||||
Payable to affiliates | |||||||||
Investment adviser | 4,294 | 3,218 | 8,350 | 3,397 | |||||
Shareholder servicing costs | 16,284 | 9,721 | 33,074 | 10,505 | |||||
Distribution and service fees | 2,773 | 1,989 | 6,125 | 2,077 | |||||
Administrative services fee | 198 | 162 | 333 | 168 | |||||
Payable for independent Trustees’ compensation | 10,963 | 8,125 | 11,000 | 10,960 | |||||
Accrued expenses and other liabilities | 22,198 | 17,139 | 36,613 | 17,487 | |||||
Total liabilities | $5,432,799 | $2,456,755 | $14,600,481 | $1,413,111 | |||||
Net assets | $174,454,880 | $130,547,692 | $338,953,428 | $137,882,730 | |||||
| Net assets consist of | |||||||||
| Paid-in capital | $169,522,688 | $126,827,459 | $329,670,012 | $137,156,116 | |||||
| Unrealized appreciation (depreciation) on investments | 4,627,263 | 3,234,495 | 8,078,599 | 2,122,256 | |||||
| Accumulated net realized gain (loss) on investments | 72,993 | 156,347 | 1,192,708 | (1,390,882 | ) | ||||
Accumulated undistributed (distributions in excess of) net investment income | 231,936 | 329,391 | 12,109 | (4,760 | ) | ||||
Net assets | $174,454,880 | $130,547,692 | $338,953,428 | $137,882,730 | |||||
62
Table of Contents
Statements of Assets and Liabilities – continued
South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | |||||
Net assets | ||||||||
| Class A | $165,017,037 | $125,640,652 | $302,735,710 | $133,243,894 | ||||
| Class B | 9,437,843 | 4,907,040 | 6,558,040 | 4,638,836 | ||||
Class C | — | — | 29,659,678 | — | ||||
Total net assets | $174,454,880 | $130,547,692 | $338,953,428 | $137,882,730 | ||||
Shares of beneficial interest outstanding | ||||||||
| Class A | 13,703,130 | 12,085,202 | 26,927,856 | 12,138,606 | ||||
| Class B | 784,107 | 472,301 | 583,704 | 422,774 | ||||
Class C | — | — | 2,638,843 | — | ||||
Total shares of beneficial interest outstanding | 14,487,237 | 12,557,503 | 30,150,403 | 12,561,380 | ||||
Class A shares | ||||||||
Net asset value per share | $12.04 | $10.40 | $11.24 | $10.98 | ||||
Offering price per share (100 / 95.25 x net asset value per share) | $12.64 | $10.92 | $11.80 | $11.53 | ||||
Class B shares | ||||||||
Net asset value and offering price per share | $12.04 | $10.39 | $11.24 | $10.97 | ||||
Class C shares | ||||||||
Net asset value and offering price per share | $ — | $ — | $11.24 | $ — | ||||
On sales of $50,000 or more, the maximum offering price of Class A shares is reduced. A contingent deferred sales charge may be imposed on redemptions of Class A, Class B, and Class C shares.
See Notes to Financial Statements
63
Table of Contents
Financial Statements
Year ended 3/31/10
These statements describe how much each fund earned in investment income and accrued in expenses. They also describe any gains or losses generated by each fund’s operations.
Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | |||||||||
| Net investment income | ||||||||||||
| Interest | $5,262,039 | $11,593,503 | $20,127,132 | $6,293,262 | ||||||||
Dividends from underlying funds | 3,986 | 9,451 | 20,477 | 5,339 | ||||||||
Total investment income | $5,266,025 | $11,602,954 | $20,147,609 | $6,298,601 | ||||||||
| Expenses | ||||||||||||
Management fee | $469,691 | $999,229 | $1,715,920 | $546,267 | ||||||||
Distribution and service fees | 235,918 | 873,839 | 1,449,754 | 413,218 | ||||||||
Shareholder servicing costs | 61,902 | 122,256 | 229,620 | 89,968 | ||||||||
Administrative services fee | 26,444 | 45,970 | 71,981 | 29,212 | ||||||||
Independent Trustees’ compensation | 5,207 | 8,641 | 15,412 | 5,176 | ||||||||
Custodian fee | 30,657 | 50,703 | 64,862 | 39,540 | ||||||||
Shareholder communications | 9,009 | 16,421 | 25,326 | 14,381 | ||||||||
Auditing fees | 44,506 | 44,506 | 44,506 | 44,506 | ||||||||
Legal fees | 10,192 | 14,671 | 14,890 | 11,337 | ||||||||
Interest expense and fees | — | — | 73,599 | 4,484 | ||||||||
Miscellaneous | 63,780 | 91,280 | 111,383 | 71,076 | ||||||||
Total expenses | $957,306 | $2,267,516 | $3,817,253 | $1,269,165 | ||||||||
Fees paid indirectly | (1,525 | ) | (5 | ) | (4,021 | ) | (2 | ) | ||||
Reduction of expenses by investment adviser | (122,328 | ) | (1,300 | ) | (2,195 | ) | (143,372 | ) | ||||
Net expenses | $833,453 | $2,266,211 | $3,811,037 | $1,125,791 | ||||||||
Net investment income | $4,432,572 | $9,336,743 | $16,336,572 | $5,172,810 | ||||||||
| Realized and unrealized gain (loss) on investments | ||||||||||||
Realized gain (loss) (identified cost basis) | ||||||||||||
Investment transactions | $285,460 | $1,392,678 | $(109,529 | ) | $249,982 | |||||||
Futures contracts | (2,101 | ) | 139,421 | 48,382 | 93,755 | |||||||
Net realized gain (loss) on investments | $283,359 | $1,532,099 | $(61,147 | ) | $343,737 | |||||||
| Change in unrealized appreciation (depreciation) | ||||||||||||
Investments | $4,953,060 | $12,690,427 | $15,923,976 | $6,945,325 | ||||||||
Futures contracts | 4,083 | 124,690 | 155,116 | 56,080 | ||||||||
Net unrealized gain (loss) on investments | $4,957,143 | $12,815,117 | $16,079,092 | $7,001,405 | ||||||||
Net realized and unrealized gain (loss) on investments | $5,240,502 | $14,347,216 | $16,017,945 | $7,345,142 | ||||||||
Change in net assets from operations | $9,673,074 | $23,683,959 | $32,354,517 | $12,517,952 | ||||||||
See Notes to Financial Statements
64
Table of Contents
Statements of Operations – continued
| Year ended 3/31/10 | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | ||||||||
| Net investment income | ||||||||||||
| Interest | $8,347,365 | $6,627,600 | $16,516,733 | $6,691,590 | ||||||||
Dividends from underlying funds | 7,652 | 5,126 | 13,801 | 5,993 | ||||||||
Total investment income | $8,355,017 | $6,632,726 | $16,530,534 | $6,697,583 | ||||||||
| Expenses | ||||||||||||
Management fee | $699,938 | $566,155 | $1,409,783 | $599,859 | ||||||||
Distribution and service fees | 469,769 | 362,906 | 1,020,671 | 375,292 | ||||||||
Shareholder servicing costs | 95,273 | 71,612 | 194,302 | 74,309 | ||||||||
Administrative services fee | 34,869 | 30,028 | 60,933 | 31,256 | ||||||||
Independent Trustees’ compensation | 8,040 | 7,274 | 14,939 | 7,876 | ||||||||
Custodian fee | 35,483 | 29,655 | 59,120 | 29,608 | ||||||||
Shareholder communications | 12,888 | 10,590 | 22,599 | 10,980 | ||||||||
Auditing fees | 44,506 | 44,506 | 44,506 | 44,506 | ||||||||
Legal fees | 11,169 | 7,025 | 12,959 | 9,948 | ||||||||
Interest expense and fees | — | — | 39,748 | — | ||||||||
Miscellaneous | 70,325 | 65,020 | 103,796 | 64,184 | ||||||||
Total expenses | $1,482,260 | $1,194,771 | $2,983,356 | $1,247,818 | ||||||||
Fees paid indirectly | (3,306 | ) | (4 | ) | (2,429 | ) | (2,481 | ) | ||||
Reduction of expenses by investment adviser | (903 | ) | (736 | ) | (1,820 | ) | (3,547 | ) | ||||
Net expenses | $1,478,051 | $1,194,031 | $2,979,107 | $1,241,790 | ||||||||
Net investment income | $6,876,966 | $5,438,695 | $13,551,427 | $5,455,793 | ||||||||
| Realized and unrealized gain (loss) on investments | ||||||||||||
| Realized gain (loss) (identified cost basis) | ||||||||||||
Investment transactions | $624,763 | $282,108 | $1,011,616 | $59,156 | ||||||||
Futures contracts | 14,517 | 77,524 | 92,027 | (2,942 | ) | |||||||
Net realized gain (loss) on investments | $639,280 | $359,632 | $1,103,643 | $56,214 | ||||||||
| Change in unrealized appreciation (depreciation) | ||||||||||||
Investments | $7,797,875 | $6,408,818 | $17,780,363 | $7,220,486 | ||||||||
Futures contracts | 45,884 | 43,028 | 129,315 | 5,716 | ||||||||
Net unrealized gain (loss) on investments | $7,843,759 | $6,451,846 | $17,909,678 | $7,226,202 | ||||||||
Net realized and unrealized gain (loss) on investments | $8,483,039 | $6,811,478 | $19,013,321 | $7,282,416 | ||||||||
Change in net assets from operations | $15,360,005 | $12,250,173 | $32,564,748 | $12,738,209 | ||||||||
See Notes to Financial Statements
65
Table of Contents
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 3/31/10 | Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | ||||||||
| Change in net assets | ||||||||||||
| From operations | ||||||||||||
| Net investment income | $4,432,572 | $9,336,743 | $16,336,572 | $5,172,810 | ||||||||
Net realized gain (loss) on investments | 283,359 | 1,532,099 | (61,147 | ) | 343,737 | |||||||
Net unrealized gain (loss) on investments | 4,957,143 | 12,815,117 | 16,079,092 | 7,001,405 | ||||||||
Change in net assets from operations | $9,673,074 | $23,683,959 | $32,354,517 | $12,517,952 | ||||||||
| Distributions declared to shareholders | ||||||||||||
| From net investment income | $(4,338,414 | ) | $(9,064,289 | ) | $(15,075,885 | ) | $(5,048,417 | ) | ||||
From net realized gain on investments | — | (177,068 | ) | (550,740 | ) | — | ||||||
Total distributions declared to shareholders | $(4,338,414 | ) | $(9,241,357 | ) | $(15,626,625 | ) | $(5,048,417 | ) | ||||
Change in net assets from fund share transactions | $11,549,306 | $951,218 | $84,130,231 | $19,662,656 | ||||||||
Total change in net assets | $16,883,966 | $15,393,820 | $100,858,123 | $27,132,191 | ||||||||
| Net assets | ||||||||||||
| At beginning of period | 95,166,125 | 207,684,560 | 325,807,301 | 107,143,153 | ||||||||
At end of period | $112,050,091 | $223,078,380 | $426,665,424 | $134,275,344 | ||||||||
Undistributed net investment income included in net assets at end of period | $74,900 | $42,455 | $287,090 | $52,600 | ||||||||
| Year ended 3/31/10 | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | ||||||||
| Change in net assets | ||||||||||||
| From operations | ||||||||||||
| Net investment income | $6,876,966 | $5,438,695 | $13,551,427 | $5,455,793 | ||||||||
Net realized gain (loss) on investments | 639,280 | 359,632 | 1,103,643 | 56,214 | ||||||||
Net unrealized gain (loss) on investments | 7,843,759 | 6,451,846 | 17,909,678 | 7,226,202 | ||||||||
Change in net assets from operations | $15,360,005 | $12,250,173 | $32,564,748 | $12,738,209 | ||||||||
| Distributions declared to shareholders | ||||||||||||
| From net investment income | $(6,293,244 | ) | $(5,126,335 | ) | $(13,203,071 | ) | $(5,107,886 | ) | ||||
From net realized gain on investments | (102,096 | ) | (398,098 | ) | (89,469 | ) | (87,780 | ) | ||||
Total distributions declared to shareholders | $(6,395,340 | ) | $(5,524,433 | ) | $(13,292,540 | ) | $(5,195,666 | ) | ||||
Change in net assets from fund share transactions | $24,340,186 | $7,103,016 | $38,301,584 | $7,321,660 | ||||||||
Total change in net assets | $33,304,851 | $13,828,756 | $57,573,792 | $14,864,203 | ||||||||
| Net assets | ||||||||||||
| At beginning of period | 141,150,029 | 116,718,936 | 281,379,636 | 123,018,527 | ||||||||
At end of period | $174,454,880 | $130,547,692 | $338,953,428 | $137,882,730 | ||||||||
Accumulated undistributed (distributions in excess of) net investment income included in net assets at end of period | $231,936 | $329,391 | $12,109 | $(4,760 | ) | |||||||
See Notes to Financial Statements
66
Table of Contents
Statements of Changes in Net Assets – continued
| Year ended 3/31/09 | Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | ||||||||
| Change in net assets | ||||||||||||
| From operations | ||||||||||||
| Net investment income | $4,187,538 | $7,996,426 | $12,296,549 | $4,802,792 | ||||||||
Net realized gain (loss) on investments | 17,960 | 735,470 | 41,769 | (457,389 | ) | |||||||
Net unrealized gain (loss) on investments | (2,871,559 | ) | (11,259,717 | ) | (5,855,025 | ) | (5,761,463 | ) | ||||
Change in net assets from operations | $1,333,939 | $(2,527,821 | ) | $6,483,293 | $(1,416,060 | ) | ||||||
| Distributions declared to shareholders | ||||||||||||
| From net investment income | $(4,059,672 | ) | $(8,219,506 | ) | $(13,144,511 | ) | $(4,597,753 | ) | ||||
From net realized gain on investments | — | (1,444,382 | ) | (1,297,069 | ) | — | ||||||
Total distributions declared to shareholders | $(4,059,672 | ) | $(9,663,888 | ) | $(14,441,580 | ) | $(4,597,753 | ) | ||||
Change in net assets from fund share transactions | $8,830,416 | $53,842,919 | $23,398,771 | $6,442,178 | ||||||||
Total change in net assets | $6,104,683 | $41,651,210 | $15,440,484 | $428,365 | ||||||||
| Net assets | ||||||||||||
| At beginning of period | 89,061,442 | 166,033,350 | 310,366,817 | 106,714,788 | ||||||||
At end of period | $95,166,125 | $207,684,560 | $325,807,301 | $107,143,153 | ||||||||
Undistributed net investment income included in net assets at end of period | $81,756 | $51,618 | $312,123 | $62,187 | ||||||||
| Year ended 3/31/09 | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | ||||||||
| Change in net assets | ||||||||||||
| From operations | ||||||||||||
| Net investment income | $6,244,242 | $4,973,019 | $12,958,090 | $5,460,770 | (b) | |||||||
Net realized gain (loss) on investments | (1,368,703 | ) | (242,148 | ) | 507,127 | (1,020,513 | )(b) | |||||
Net unrealized gain (loss) on investments | (5,314,469 | ) | (4,127,480 | ) | (12,901,901 | ) | (5,827,258 | )(b) | ||||
Change in net assets from operations | $(438,930 | ) | $603,391 | $563,316 | $(1,387,001 | ) | ||||||
| Distributions declared to shareholders | ||||||||||||
| From net investment income | $(6,193,212 | ) | $(5,035,589 | ) | $(12,244,399 | ) | $(5,074,051 | ) | ||||
From net realized gain on investments | (235,358 | ) | (476,450 | ) | (2,312,309 | ) | (1,300,633 | ) | ||||
Total distributions declared to shareholders | $(6,428,570 | ) | $(5,512,039 | ) | $(14,556,708 | ) | $(6,374,684 | ) | ||||
Change in net assets from fund share transactions | $(1,900,667 | ) | $10,616,051 | $13,194,233 | $(2,264,088 | ) | ||||||
Total change in net assets | $(8,768,167 | ) | $5,707,403 | $(799,159 | ) | $(10,025,773 | ) | |||||
| Net assets | ||||||||||||
| At beginning of period | 149,918,196 | 111,011,533 | 282,178,795 | 133,044,300 | ||||||||
At end of period | $141,150,029 | $116,718,936 | $281,379,636 | $123,018,527 | ||||||||
Accumulated undistributed (distributions in excess of) net investment income included in net assets at end of period | $21,398 | $267,749 | $(60,275 | ) | $(9,396 | ) | ||||||
| (b) | Amounts reflect a correction which reclassifies income and gains previously reported relating to activity for certain municipal bonds held in connection with self-deposited inverse floating rate securities. The corrected amounts resulted in an increase to previously reported net investment income of $1,275,128, a decrease to previously reported net realized gain (loss) on investments of $72,183 and a decrease to previously reported net unrealized gain (loss) on investments of $1,202,945. There is no impact on previously reported changes in net assets from operations. |
See Notes to Financial Statements
67
Table of Contents
Financial Statements
MFS® MISSISSIPPI MUNICIPAL BOND FUND
The financial highlights table is intended to help you understand the fund 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 by which 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.
| Years ended 3/31 | |||||||||||||||
| Class A | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||
Net asset value, beginning of period | $9.30 | $9.58 | $9.80 | $9.73 | $9.82 | ||||||||||
| Income (loss) from investment operations | |||||||||||||||
| Net investment income (d) | $0.41 | $0.43 | $0.44 | $0.45 | (z) | $0.44 | |||||||||
Net realized and unrealized gain (loss) on investments | 0.52 | (0.30 | ) | (0.23 | ) | 0.05 | (z) | (0.09 | ) | ||||||
Total from investment operations | $0.93 | $0.13 | $0.21 | $0.50 | $0.35 | ||||||||||
| Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.41 | ) | $(0.41 | ) | $(0.43 | ) | $(0.43 | ) | $(0.44 | ) | |||||
Net asset value, end of period | $9.82 | $9.30 | $9.58 | $9.80 | $9.73 | ||||||||||
Total return (%) (r)(s)(t) | 10.10 | 1.47 | 2.21 | 5.20 | 3.59 | ||||||||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
| Expenses before expense reductions (f) | 0.88 | 0.74 | 1.03 | 1.11 | 1.07 | ||||||||||
Expenses after expense reductions (f) | 0.77 | 0.57 | 0.78 | 0.86 | 0.82 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | N/A | 0.54 | 0.56 | 0.62 | 0.64 | ||||||||||
Net investment income | 4.28 | 4.55 | 4.51 | 4.59 | (z) | 4.48 | |||||||||
Portfolio turnover | 11 | 24 | 13 | 12 | 9 | ||||||||||
Net assets at end of period (000 Omitted) | $107,625 | $89,793 | $80,893 | $75,470 | $75,597 | ||||||||||
See Notes to Financial Statements
68
Table of Contents
Financial Highlights – continued
MFS® MISSISSIPPI MUNICIPAL BOND FUND – continued
| Years ended 3/31 | |||||||||||||||
| Class B | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||
Net asset value, beginning of period | $9.32 | $9.59 | $9.81 | $9.74 | $9.84 | ||||||||||
| Income (loss) from investment operations | |||||||||||||||
| Net investment income (d) | $0.35 | $0.36 | $0.36 | $0.38 | (z) | $0.37 | |||||||||
Net realized and unrealized gain (loss) on investments | 0.50 | (0.29 | ) | (0.22 | ) | 0.04 | (z) | (0.10 | ) | ||||||
Total from investment operations | $0.85 | $0.07 | $0.14 | $0.42 | $0.27 | ||||||||||
| Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.34 | ) | $(0.34 | ) | $(0.36 | ) | $(0.35 | ) | $(0.37 | ) | |||||
Net asset value, end of period | $9.83 | $9.32 | $9.59 | $9.81 | $9.74 | ||||||||||
Total return (%) (r)(s)(t) | 9.22 | 0.80 | 1.43 | 4.41 | 2.71 | ||||||||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
| Expenses before expense reductions (f) | 1.61 | 1.51 | 1.80 | 1.87 | 1.83 | ||||||||||
Expenses after expense reductions (f) | 1.46 | 1.33 | 1.55 | 1.62 | 1.58 | ||||||||||
| Expenses after expense reductions and excluding interest expense and fees (f)(l) | N/A | 1.31 | 1.33 | 1.38 | 1.40 | ||||||||||
Net investment income | 3.59 | 3.79 | 3.75 | 3.83 | (z) | 3.72 | |||||||||
Portfolio turnover | 11 | 24 | 13 | 12 | 9 | ||||||||||
Net assets at end of period (000 Omitted) | $4,425 | $5,374 | $8,169 | $9,408 | $10,465 | ||||||||||
| (d) | Per share data is based on average shares outstanding. |
| (f) | Ratios do not reflect reductions from fees paid indirectly, if applicable. |
| (l) | Interest expense and fees relate to payments made to the holder of the floating rate certificate from trust assets. |
| (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. |
| (t) | Total returns do not include any applicable sales charges. |
| (z) | The fund applied a change in estimate for amortization of premium on certain debt securities that resulted in an increase of $0.01 per share to net investment income, a decrease of $0.01 per share to net realized and unrealized gain (loss) on investments, and an increase of 0.07% to the net investment income ratio for each class for the year ended March 31, 2007. The change in estimate had no impact on net assets, net asset value per share or total return of each class. |
See Notes to Financial Statements
69
Table of Contents
Financial Highlights – continued
MFS® NEW YORK MUNICIPAL BOND FUND
The financial highlights table is intended to help you understand the fund 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 by which 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.
| Years ended 3/31 | |||||||||||||||
| Class A | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||
Net asset value, beginning of period | $10.23 | $10.82 | $11.15 | $11.13 | $11.30 | ||||||||||
| Income (loss) from investment operations | |||||||||||||||
| Net investment income (d) | $0.47 | $0.44 | $0.46 | $ 0.52 | (z) | $0.49 | |||||||||
Net realized and unrealized gain (loss) on investments | 0.69 | (0.50 | ) | (0.26 | ) | 0.03 | (z) | (0.12 | ) | ||||||
Total from investment operations | $1.16 | $(0.06 | ) | $0.20 | $0.55 | $0.37 | |||||||||
| Less distributions declared to shareholders | |||||||||||||||
| From net investment income | $(0.45 | ) | $(0.46 | ) | $(0.48 | ) | $(0.48 | ) | $(0.49 | ) | |||||
From net realized gain on investments | (0.01 | ) | (0.07 | ) | (0.05 | ) | (0.05 | ) | (0.05 | ) | |||||
Total distributions declared to shareholders | $(0.46 | ) | $(0.53 | ) | $(0.53 | ) | $(0.53 | ) | $(0.54 | ) | |||||
Net asset value, end of period | $10.93 | $10.23 | $10.82 | $11.15 | $11.13 | ||||||||||
Total return (%) (r)(s)(t) | 11.53 | (0.46 | ) | 1.84 | 5.07 | 3.30 | |||||||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
| Expenses before expense reductions (f) | 0.88 | 0.94 | 1.25 | 1.32 | 1.28 | ||||||||||
Expenses after expense reductions (f) | 0.88 | 0.78 | 1.00 | 1.06 | 1.03 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | N/A | 0.75 | 0.77 | 0.82 | 0.85 | ||||||||||
Net investment income | 4.35 | 4.29 | 4.16 | 4.66 | (z) | 4.36 | |||||||||
Portfolio turnover | 26 | 29 | 22 | 8 | 12 | ||||||||||
Net assets at end of period (000 Omitted) | $177,429 | $169,525 | $126,126 | $118,924 | $118,476 | ||||||||||
| Years ended 3/31 | |||||||||||||||
| Class B | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||
Net asset value, beginning of period | $10.20 | $10.79 | $11.11 | $11.09 | $11.27 | ||||||||||
| Income (loss) from investment operations | |||||||||||||||
| Net investment income (d) | $0.39 | $0.37 | $0.38 | $0.43 | (z) | $0.41 | |||||||||
Net realized and unrealized gain (loss) on investments | 0.69 | (0.51 | ) | (0.25 | ) | 0.04 | (z) | (0.14 | ) | ||||||
Total from investment operations | $1.08 | $(0.14 | ) | $0.13 | $0.47 | $0.27 | |||||||||
| Less distributions declared to shareholders | |||||||||||||||
| From net investment income | $(0.37 | ) | $(0.38 | ) | $(0.40 | ) | $(0.40 | ) | $(0.40 | ) | |||||
From net realized gain on investments | (0.01 | ) | (0.07 | ) | (0.05 | ) | (0.05 | ) | (0.05 | ) | |||||
Total distributions declared to shareholders | $(0.38 | ) | $(0.45 | ) | $(0.45 | ) | $(0.45 | ) | $(0.45 | ) | |||||
Net asset value, end of period | $10.90 | $10.20 | $10.79 | $11.11 | $11.09 | ||||||||||
Total return (%) (r)(s)(t) | 10.73 | (1.23 | ) | 1.15 | 4.29 | 2.43 | |||||||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
| Expenses before expense reductions (f) | 1.63 | 1.70 | 2.00 | 2.07 | 2.03 | ||||||||||
Expenses after expense reductions (f) | 1.63 | 1.52 | 1.75 | 1.82 | 1.78 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | N/A | 1.50 | 1.52 | 1.57 | 1.60 | ||||||||||
Net investment income | 3.61 | 3.55 | 3.43 | 3.91 | (z) | 3.61 | |||||||||
Portfolio turnover | 26 | 29 | 22 | 8 | 12 | ||||||||||
Net assets at end of period (000 Omitted) | $14,229 | $16,285 | $20,053 | $25,654 | $30,046 | ||||||||||
See Notes to Financial Statements
70
Table of Contents
Financial Highlights – continued
MFS® NEW YORK MUNICIPAL BOND FUND – continued
| Years ended 3/31 | |||||||||||||||
| Class C | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||
Net asset value, beginning of period | $10.22 | $10.81 | $11.13 | $11.11 | $11.29 | ||||||||||
| Income (loss) from investment operations | |||||||||||||||
| Net investment income (d) | $0.39 | $0.37 | $0.37 | $0.43 | (z) | $0.41 | |||||||||
Net realized and unrealized gain (loss) on investments | 0.69 | (0.51 | ) | (0.24 | ) | 0.04 | (z) | (0.14 | ) | ||||||
Total from investment operations | $1.08 | $(0.14 | ) | $0.13 | $0.47 | $0.27 | |||||||||
| Less distributions declared to shareholders | |||||||||||||||
| From net investment income | $(0.37 | ) | $(0.38 | ) | $(0.40 | ) | $(0.40 | ) | $(0.40 | ) | |||||
From net realized gain on investments | (0.01 | ) | (0.07 | ) | (0.05 | ) | (0.05 | ) | (0.05 | ) | |||||
Total distributions declared to shareholders | $(0.38 | ) | $(0.45 | ) | $(0.45 | ) | $(0.45 | ) | $(0.45 | ) | |||||
Net asset value, end of period | $10.92 | $10.22 | $10.81 | $11.13 | $11.11 | ||||||||||
Total return (%) (r)(s)(t) | 10.70 | (1.22 | ) | 1.16 | 4.29 | 2.43 | |||||||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
| Expenses before expense reductions (f) | 1.63 | 1.70 | 2.00 | 2.07 | 2.03 | ||||||||||
Expenses after expense reductions (f) | 1.63 | 1.53 | 1.75 | 1.82 | 1.78 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | N/A | 1.50 | 1.52 | 1.57 | 1.60 | ||||||||||
Net investment income | 3.59 | 3.54 | 3.40 | 3.92 | (z) | 3.61 | |||||||||
Portfolio turnover | 26 | 29 | 22 | 8 | 12 | ||||||||||
Net assets at end of period (000 Omitted) | $31,421 | $21,874 | $19,855 | $15,822 | $17,064 | ||||||||||
| (d) | Per share data is based on average shares outstanding. |
| (f) | Ratios do not reflect reductions from fees paid indirectly, if applicable. |
| (l) | Interest expense and fees relate to payments made to the holder of the floating rate certificate from trust assets. |
| (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. |
| (t) | Total returns do not include any applicable sales charges. |
| (z) | The fund applied a change in estimate for amortization of premium on certain debt securities that resulted in an increase of $0.02 per share to net investment income, a decrease of $0.02 per share to net realized and unrealized gain (loss) on investments, and an increase of 0.22% to the net investment income ratio for each class for the year ended March 31, 2007. The change in estimate had no impact on net assets, net asset value per share or total return of each class. |
See Notes to Financial Statements
71
Table of Contents
Financial Highlights – continued
MFS® NORTH CAROLINA MUNICIPAL BOND FUND
The financial highlights table is intended to help you understand the fund 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 by which 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.
| Years ended 3/31 | |||||||||||||||
| Class A | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||
Net asset value, beginning of period | $11.15 | $11.44 | $11.86 | $11.85 | $11.99 | ||||||||||
| Income (loss) from investment operations | |||||||||||||||
| Net investment income (d) | $0.51 | $0.45 | $0.52 | $ 0.51 | (z) | $0.51 | |||||||||
Net realized and unrealized gain (loss) on investments | 0.55 | (0.21 | ) | (0.42 | ) | 0.03 | (z) | (0.09 | ) | ||||||
Total from investment operations | $1.06 | $0.24 | $0.10 | $0.54 | $0.42 | ||||||||||
| Less distributions declared to shareholders | |||||||||||||||
| From net investment income | $(0.48 | ) | $(0.48 | ) | $(0.48 | ) | $(0.50 | ) | $(0.51 | ) | |||||
From net realized gain on investments | (0.02 | ) | (0.05 | ) | (0.04 | ) | (0.03 | ) | (0.05 | ) | |||||
Total distributions declared to shareholders | $(0.50 | ) | $(0.53 | ) | $(0.52 | ) | $(0.53 | ) | $(0.56 | ) | |||||
Net asset value, end of period | $11.71 | $11.15 | $11.44 | $11.86 | $11.85 | ||||||||||
Total return (%) (r)(s)(t) | 9.55 | 2.22 | 0.83 | 4.60 | 3.49 | ||||||||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
| Expenses before expense reductions (f) | 0.87 | 1.08 | 1.32 | 1.36 | 1.32 | ||||||||||
Expenses after expense reductions (f) | 0.87 | 0.91 | 1.07 | 1.11 | 1.08 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 0.85 | 0.81 | 0.81 | 0.86 | 0.89 | ||||||||||
Net investment income | 4.42 | 4.05 | 4.48 | 4.34 | (z) | 4.24 | |||||||||
Portfolio turnover | 12 | 20 | 17 | 12 | 8 | ||||||||||
Net assets at end of period (000 Omitted) | $346,345 | $274,487 | $257,884 | $268,108 | $270,124 | ||||||||||
| Years ended 3/31 | |||||||||||||||
| Class B | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||
Net asset value, beginning of period | $11.14 | $11.42 | $11.84 | $11.83 | $11.98 | ||||||||||
| Income (loss) from investment operations | |||||||||||||||
| Net investment income (d) | $0.43 | $0.38 | $0.45 | $0.44 | (z) | $0.43 | |||||||||
Net realized and unrealized gain (loss) on investments | 0.53 | (0.20 | ) | (0.43 | ) | 0.02 | (z) | (0.10 | ) | ||||||
Total from investment operations | $0.96 | $0.18 | $0.02 | $0.46 | $0.33 | ||||||||||
| Less distributions declared to shareholders | |||||||||||||||
| From net investment income | $(0.39 | ) | $(0.41 | ) | $(0.40 | ) | $(0.42 | ) | $(0.43 | ) | |||||
From net realized gain on investments | (0.02 | ) | (0.05 | ) | (0.04 | ) | (0.03 | ) | (0.05 | ) | |||||
Total distributions declared to shareholders | $(0.41 | ) | $(0.46 | ) | $(0.44 | ) | $(0.45 | ) | $(0.48 | ) | |||||
Net asset value, end of period | $11.69 | $11.14 | $11.42 | $11.84 | $11.83 | ||||||||||
Total return (%) (r)(s)(t) | 8.65 | 1.63 | 0.17 | 3.93 | 2.73 | ||||||||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
| Expenses before expense reductions (f) | 1.62 | 1.74 | 1.97 | 2.01 | 1.98 | ||||||||||
Expenses after expense reductions (f) | 1.62 | 1.56 | 1.72 | 1.76 | 1.73 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 1.60 | 1.46 | 1.47 | 1.51 | 1.54 | ||||||||||
Net investment income | 3.68 | 3.39 | 3.83 | 3.70 | (z) | 3.59 | |||||||||
Portfolio turnover | 12 | 20 | 17 | 12 | 8 | ||||||||||
Net assets at end of period (000 Omitted) | $11,331 | $13,652 | $21,537 | $26,520 | $32,610 | ||||||||||
See Notes to Financial Statements
72
Table of Contents
Financial Highlights – continued
MFS® NORTH CAROLINA MUNICIPAL BOND FUND – continued
| Years ended 3/31 | |||||||||||||||
| Class C | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||
Net asset value, beginning of period | $11.15 | $11.43 | $11.85 | $11.84 | $11.98 | ||||||||||
| Income (loss) from investment operations | |||||||||||||||
| Net investment income (d) | $0.42 | $0.38 | $0.45 | $0.44 | (z) | $0.43 | |||||||||
Net realized and unrealized gain (loss) on investments | 0.54 | (0.20 | ) | (0.43 | ) | 0.02 | (z) | (0.09 | ) | ||||||
Total from investment operations | $0.96 | $0.18 | $0.02 | $0.46 | $0.34 | ||||||||||
| Less distributions declared to shareholders | |||||||||||||||
| From net investment income | $(0.39 | ) | $(0.41 | ) | $(0.40 | ) | $(0.42 | ) | $(0.43 | ) | |||||
From net realized gain on investments | (0.02 | ) | (0.05 | ) | (0.04 | ) | (0.03 | ) | (0.05 | ) | |||||
Total distributions declared to shareholders | $(0.41 | ) | $(0.46 | ) | $(0.44 | ) | $(0.45 | ) | $(0.48 | ) | |||||
Net asset value, end of period | $11.70 | $11.15 | $11.43 | $11.85 | $11.84 | ||||||||||
Total return (%) (r)(s)(t) | 8.63 | 1.63 | 0.17 | 3.93 | 2.82 | ||||||||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
| Expenses before expense reductions (f) | 1.62 | 1.73 | 1.97 | 2.01 | 1.98 | ||||||||||
Expenses after expense reductions (f) | 1.62 | 1.56 | 1.72 | 1.76 | 1.73 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 1.60 | 1.47 | 1.47 | 1.51 | 1.54 | ||||||||||
Net investment income | 3.64 | 3.39 | 3.83 | 3.69 | (z) | 3.61 | |||||||||
Portfolio turnover | 12 | 20 | 17 | 12 | 8 | ||||||||||
Net assets at end of period (000 Omitted) | $68,989 | $37,668 | $30,946 | $33,152 | $32,223 | ||||||||||
| (d) | Per share data is based on average shares outstanding. |
| (f) | Ratios do not reflect reductions from fees paid indirectly, if applicable. |
| (l) | Interest expense and fees relate to payments made to the holder of the floating rate certificate from trust assets. |
| (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. |
| (t) | Total returns do not include any applicable sales charges. |
| (z) | The fund applied a change in estimate for amortization of premium on certain debt securities that resulted in an increase of $0.02 per share to net investment income, a decrease of $0.02 per share to net realized and unrealized gain (loss) on investments, and an increase of 0.16% to the net investment income ratio for each class for the year ended March 31, 2007. The change in estimate had no impact on net assets, net asset value per share or total return of each class. |
See Notes to Financial Statements
73
Table of Contents
Financial Highlights – continued
MFS® PENNSYLVANIA MUNICIPAL BOND FUND
The financial highlights table is intended to help you understand the fund 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 by which 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.
| Years ended 3/31 | |||||||||||||||
| Class A | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||
Net asset value, beginning of period | $9.40 | $9.90 | $10.24 | $10.15 | $10.17 | ||||||||||
| Income (loss) from investment operations | |||||||||||||||
| Net investment income (d) | $0.43 | $0.45 | $0.44 | $0.45 | (z) | $0.43 | |||||||||
Net realized and unrealized gain (loss) on investments | 0.64 | (0.52 | ) | (0.36 | ) | 0.06 | (z) | (0.02 | ) | ||||||
Total from investment operations | $1.07 | $(0.07 | ) | $0.08 | $0.51 | $0.41 | |||||||||
| Less distributions declared to shareholders | |||||||||||||||
| From net investment income | $(0.43 | ) | $(0.43 | ) | $(0.42 | ) | $(0.42 | ) | $(0.43 | ) | |||||
From net realized gain on investments | — | — | (0.00 | )(w) | — | — | |||||||||
Total distributions declared to shareholders | $(0.43 | ) | $(0.43 | ) | $(0.42 | ) | $(0.42 | ) | $(0.43 | ) | |||||
Net asset value, end of period | $10.04 | $9.40 | $9.90 | $10.24 | $10.15 | ||||||||||
Total return (%) (r)(s)(t) | 11.49 | (0.69 | ) | 0.87 | 5.17 | 4.08 | |||||||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
| Expenses before expense reductions (f) | 0.91 | 0.88 | 1.11 | 1.18 | 1.13 | ||||||||||
Expenses after expense reductions (f) | 0.79 | 0.66 | 0.80 | 0.82 | 0.77 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 0.79 | 0.61 | 0.60 | 0.60 | 0.60 | ||||||||||
Net investment income | 4.40 | 4.67 | 4.32 | 4.45 | (z) | 4.24 | |||||||||
Portfolio turnover | 12 | 28 | 17 | 9 | 9 | ||||||||||
Net assets at end of period (000 Omitted) | $113,411 | $84,422 | $77,866 | $73,813 | $74,429 | ||||||||||
See Notes to Financial Statements
74
Table of Contents
Financial Highlights – continued
MFS® PENNSYLVANIA MUNICIPAL BOND FUND – continued
| Years ended 3/31 | |||||||||||||||
| Class B | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||
Net asset value, beginning of period | $9.43 | $9.93 | $10.27 | $10.18 | $10.20 | ||||||||||
| Income (loss) from investment operations | |||||||||||||||
| Net investment income (d) | $0.36 | $0.37 | $0.36 | $0.38 | (z) | $0.36 | |||||||||
Net realized and unrealized gain (loss) on investments | 0.62 | (0.51 | ) | (0.35 | ) | 0.06 | (z) | (0.03 | ) | ||||||
Total from investment operations | $0.98 | $(0.14 | ) | $0.01 | $0.44 | $0.33 | |||||||||
| Less distributions declared to shareholders | |||||||||||||||
| From net investment income | $(0.35 | ) | $(0.36 | ) | $(0.35 | ) | $(0.35 | ) | $(0.35 | ) | |||||
From net realized gain on investments | — | — | (0.00 | )(w) | — | — | |||||||||
Total distributions declared to shareholders | $(0.35 | ) | $(0.36 | ) | $(0.35 | ) | $(0.35 | ) | $(0.35 | ) | |||||
Net asset value, end of period | $10.06 | $9.43 | $9.93 | $10.27 | $10.18 | ||||||||||
Total return (%) (r)(s)(t) | 10.51 | (1.42 | ) | 0.11 | 4.37 | 3.30 | |||||||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
| Expenses before expense reductions (f) | 1.65 | 1.64 | 1.86 | 1.94 | 1.89 | ||||||||||
Expenses after expense reductions (f) | 1.54 | 1.41 | 1.56 | 1.58 | 1.53 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 1.54 | 1.37 | 1.36 | 1.36 | 1.36 | ||||||||||
Net investment income | 3.64 | 3.91 | 3.56 | 3.69 | (z) | 3.49 | |||||||||
Portfolio turnover | 12 | 28 | 17 | 9 | 9 | ||||||||||
Net assets at end of period (000 Omitted) | $20,864 | $22,721 | $28,848 | $33,849 | $38,642 | ||||||||||
| (d) | Per share data is based on average shares outstanding. |
| (f) | Ratios do not reflect reductions from fees paid indirectly, if applicable. |
| (l) | Interest expense and fees relate to payments made to the holder of the floating rate certificate from trust assets. |
| (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. |
| (t) | Total returns do not include any applicable sales charges. |
| (w) | Per share amount was less than $0.01. |
| (z) | The fund applied a change in estimate for amortization of premium on certain debt securities that resulted in an increase of $0.02 per share to net investment income, a decrease of $0.02 per share to net realized and unrealized gain (loss) on investments, and an increase of 0.15% to the net investment income ratio for each class for the year ended March 31, 2007. The change in estimate had no impact on net assets, net asset value per share or total return of each class. |
See Notes to Financial Statements
75
Table of Contents
Financial Highlights – continued
MFS® SOUTH CAROLINA MUNICIPAL BOND FUND
The financial highlights table is intended to help you understand the fund 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 by which 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.
| Years ended 3/31 | |||||||||||||||
| Class A | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||
Net asset value, beginning of period | $11.33 | $11.85 | $12.29 | $12.25 | $12.36 | ||||||||||
| Income (loss) from investment operations | |||||||||||||||
| Net investment income (d) | $0.53 | $0.50 | $0.53 | $ 0.55 | (z) | $0.54 | |||||||||
Net realized and unrealized gain (loss) on investments | 0.68 | (0.50 | ) | (0.45 | ) | 0.00 | (w)(z) | (0.11 | ) | ||||||
Total from investment operations | $1.21 | $(0.00 | )(w) | $0.08 | $0.55 | $0.43 | |||||||||
| Less distributions declared to shareholders | |||||||||||||||
| From net investment income | $(0.49 | ) | $(0.50 | ) | $(0.52 | ) | $(0.51 | ) | $(0.54 | ) | |||||
From net realized gain on investments | (0.01 | ) | (0.02 | ) | — | — | — | ||||||||
Total distributions declared to shareholders | $(0.50 | ) | $(0.52 | ) | $(0.52 | ) | $(0.51 | ) | $(0.54 | ) | |||||
Net asset value, end of period | $12.04 | $11.33 | $11.85 | $12.29 | $12.25 | ||||||||||
Total return (%) (r)(s)(t) | 10.77 | 0.03 | 0.62 | 4.57 | 3.48 | ||||||||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
| Expenses before expense reductions (f) | 0.90 | 1.10 | 1.31 | 1.37 | 1.34 | ||||||||||
Expenses after expense reductions (f) | 0.90 | 0.93 | 1.06 | 1.12 | 1.09 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | N/A | 0.85 | 0.85 | 0.89 | 0.92 | ||||||||||
Net investment income | 4.47 | 4.38 | 4.36 | 4.45 | (z) | 4.35 | |||||||||
Portfolio turnover | 14 | 19 | 13 | 10 | 13 | ||||||||||
Net assets at end of period (000 Omitted) | $165,017 | $129,510 | $134,422 | $135,766 | $131,167 | ||||||||||
See Notes to Financial Statements
76
Table of Contents
Financial Highlights – continued
MFS® SOUTH CAROLINA MUNICIPAL BOND FUND – continued
| Years ended 3/31 | |||||||||||||||
| Class B | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||
Net asset value, beginning of period | $11.33 | $11.84 | $12.29 | $12.24 | $12.36 | ||||||||||
| Income (loss) from investment operations | |||||||||||||||
| Net investment income (d) | $0.44 | $0.43 | $0.45 | $0.47 | (z) | $0.46 | |||||||||
Net realized and unrealized gain (loss) on investments | 0.68 | (0.50 | ) | (0.46 | ) | 0.01 | (z) | (0.12 | ) | ||||||
Total from investment operations | $1.12 | $(0.07 | ) | $(0.01 | ) | $0.48 | $0.34 | ||||||||
| Less distributions declared to shareholders | |||||||||||||||
| From net investment income | $(0.40 | ) | $(0.42 | ) | $(0.44 | ) | $(0.43 | ) | $(0.46 | ) | |||||
From net realized gain on investments | (0.01 | ) | (0.02 | ) | — | — | — | ||||||||
Total distributions declared to shareholders | $(0.41 | ) | $(0.44 | ) | $(0.44 | ) | $(0.43 | ) | $(0.46 | ) | |||||
Net asset value, end of period | $12.04 | $11.33 | $11.84 | $12.29 | $12.24 | ||||||||||
Total return (%) (r)(s)(t) | 9.95 | (0.54 | ) | (0.12 | ) | 3.98 | 2.73 | ||||||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
| Expenses before expense reductions (f) | 1.65 | 1.76 | 1.96 | 2.02 | 1.99 | ||||||||||
Expenses after expense reductions (f) | 1.65 | 1.58 | 1.71 | 1.77 | 1.74 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | N/A | 1.50 | 1.50 | 1.54 | 1.57 | ||||||||||
Net investment income | 3.73 | 3.72 | 3.71 | 3.80 | (z) | 3.70 | |||||||||
Portfolio turnover | 14 | 19 | 13 | 10 | 13 | ||||||||||
Net assets at end of period (000 Omitted) | $9,438 | $11,640 | $15,496 | $20,679 | $26,214 | ||||||||||
| (d) | Per share data is based on average shares outstanding. |
| (f) | Ratios do not reflect reductions from fees paid indirectly, if applicable. |
| (l) | Interest expense and fees relate to payments made to the holder of the floating rate certificate from trust assets. |
| (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. |
| (t) | Total returns do not include any applicable sales charges. |
| (w) | Per share amount was less than $0.01. |
| (z) | The fund applied a change in estimate for amortization of premium on certain debt securities that resulted in an increase of $0.04 per share to net investment income, a decrease of $0.04 per share to net realized and unrealized gain (loss) on investments, and an increase of 0.29% to the net investment income ratio for each class for the year ended March 31, 2007. The change in estimate had no impact on net assets, net asset value per share or total return of each class. |
See notes to financial statements
77
Table of Contents
Financial Highlights – continued
MFS® TENNESSEE MUNICIPAL BOND FUND
The financial highlights table is intended to help you understand the fund 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 by which 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.
| Years ended 3/31 | |||||||||||||||
| Class A | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||
Net asset value, beginning of period | $9.84 | $10.25 | $10.58 | $10.56 | $10.71 | ||||||||||
| Income (loss) from investment operations | |||||||||||||||
| Net investment income (d) | $0.45 | $0.44 | $0.48 | $0.47 | (z) | $0.45 | |||||||||
Net realized and unrealized gain (loss) on investments | 0.56 | (0.37 | ) | (0.34 | ) | (0.01 | )(z) | (0.12 | ) | ||||||
Total from investment operations | $1.01 | $0.07 | $0.14 | $0.46 | $0.33 | ||||||||||
| Less distributions declared to shareholders | |||||||||||||||
| From net investment income | $(0.42 | ) | $(0.44 | ) | $(0.44 | ) | $(0.44 | ) | $(0.44 | ) | |||||
From net realized gain on investments | (0.03 | ) | (0.04 | ) | (0.03 | ) | (0.00 | )(w) | (0.04 | ) | |||||
Total distributions declared to shareholders | $(0.45 | ) | $(0.48 | ) | $(0.47 | ) | $(0.44 | ) | $(0.48 | ) | |||||
Net asset value, end of period | $10.40 | $9.84 | $10.25 | $10.58 | $10.56 | ||||||||||
Total return (%) (r)(s)(t) | 10.46 | 0.84 | 1.38 | 4.43 | 3.13 | ||||||||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
| Expenses before expense reductions (f) | 0.91 | 1.02 | 1.13 | 1.17 | 1.19 | ||||||||||
Expenses after expense reductions (f) | 0.91 | 0.85 | 0.88 | 0.92 | 0.94 | ||||||||||
Net investment income | 4.36 | 4.42 | 4.61 | 4.44 | (z) | 4.17 | |||||||||
Portfolio turnover | 20 | 23 | 26 | 15 | 5 | ||||||||||
Net assets at end of period (000 Omitted) | $125,641 | $108,763 | $101,028 | $99,302 | $98,825 | ||||||||||
See Notes to Financial Statements
78
Table of Contents
Financial Highlights – continued
MFS® TENNESSEE MUNICIPAL BOND FUND – continued
| Years ended 3/31 | |||||||||||||||
| Class B | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||
Net asset value, beginning of period | $9.83 | $10.24 | $10.57 | $10.56 | $10.70 | ||||||||||
| Income (loss) from investment operations | |||||||||||||||
| Net investment income (d) | $0.37 | $0.37 | $0.41 | $0.40 | (z) | $0.38 | |||||||||
Net realized and unrealized gain (loss) on investments | 0.57 | (0.36 | ) | (0.34 | ) | (0.02 | )(z) | (0.11 | ) | ||||||
Total from investment operations | $0.94 | $0.01 | $0.07 | $0.38 | $0.27 | ||||||||||
| Less distributions declared to shareholders | |||||||||||||||
| From net investment income | $(0.35 | ) | $(0.38 | ) | $(0.37 | ) | $(0.37 | ) | $(0.37 | ) | |||||
From net realized gain on investments | (0.03 | ) | (0.04 | ) | (0.03 | ) | (0.00 | )(w) | (0.04 | ) | |||||
Total distributions declared to shareholders | $(0.38 | ) | $(0.42 | ) | $(0.40 | ) | $(0.37 | ) | $(0.41 | ) | |||||
Net asset value, end of period | $10.39 | $9.83 | $10.24 | $10.57 | $10.56 | ||||||||||
Total return (%) (r)(s)(t) | 9.65 | 0.17 | 0.72 | 3.66 | 2.56 | ||||||||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
| Expenses before expense reductions (f) | 1.66 | 1.69 | 1.78 | 1.82 | 1.84 | ||||||||||
Expenses after expense reductions (f) | 1.66 | 1.51 | 1.53 | 1.57 | 1.59 | ||||||||||
Net investment income | 3.63 | 3.76 | 3.93 | 3.78 | (z) | 3.52 | |||||||||
Portfolio turnover | 20 | 23 | 26 | 15 | 5 | ||||||||||
Net assets at end of period (000 Omitted) | $4,907 | $7,956 | $9,983 | $12,924 | $17,217 | ||||||||||
| (d) | Per share data is based on average shares outstanding. |
| (f) | Ratios do not reflect reductions from fees paid indirectly, if applicable. |
| (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. |
| (t) | Total returns do not include any applicable sales charges. |
| (w) | Per share amount was less than $0.01. |
| (z) | The fund applied a change in estimate for amortization of premium on certain debt securities in the current year that resulted in an increase of $0.03 per share to net investment income, a decrease of $0.03 per share to net realized and unrealized gain (loss) on investments, and an increase of 0.27% to the net investment income ratio for each class for the year ended March 31, 2007. The change in estimate had no impact on net assets, net asset value per share or total return of each class. |
See Notes to Financial Statements
79
Table of Contents
Financial Highlights – continued
MFS® VIRGINIA MUNICIPAL BOND FUND
The financial highlights table is intended to help you understand the fund 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 by which 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.
| Years ended 3/31 | |||||||||||||||
| Class A | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||
Net asset value, beginning of period | $10.54 | $11.07 | $11.43 | $11.41 | $11.52 | ||||||||||
| Income (loss) from investment operations | |||||||||||||||
| Net investment income (d) | $0.49 | $0.50 | $0.53 | $ 0.51 | (z) | $0.51 | |||||||||
Net realized and unrealized gain (loss) on investments | 0.69 | (0.47 | ) | (0.38 | ) | (0.00 | )(w)(z) | (0.12 | ) | ||||||
Total from investment operations | $1.18 | $0.03 | $0.15 | $0.51 | $0.39 | ||||||||||
| Less distributions declared to shareholders | |||||||||||||||
| From net investment income | $(0.48 | ) | $(0.47 | ) | $(0.48 | ) | $(0.49 | ) | $(0.50 | ) | |||||
From net realized gain on investments | (0.00 | )(w) | (0.09 | ) | (0.03 | ) | (0.00 | )(w) | — | ||||||
Total distributions declared to shareholders | $(0.48 | ) | $(0.56 | ) | $(0.51 | ) | $(0.49 | ) | $(0.50 | ) | |||||
Net asset value, end of period | $11.24 | $10.54 | $11.07 | $11.43 | $11.41 | ||||||||||
Total return (%) (r)(s)(t) | 11.34 | 0.40 | 1.34 | 4.57 | 3.45 | ||||||||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
| Expenses before expense reductions (f) | 0.87 | 1.08 | 1.27 | 1.32 | 1.30 | ||||||||||
Expenses after expense reductions (f) | 0.87 | 0.91 | 1.02 | 1.07 | 1.05 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 0.86 | 0.82 | 0.82 | 0.87 | 0.90 | ||||||||||
Net investment income | 4.40 | 4.69 | 4.72 | 4.51 | (z) | 4.38 | |||||||||
Portfolio turnover | 15 | 22 | 27 | 8 | 13 | ||||||||||
Net assets at end of period (000 Omitted) | $302,736 | $254,234 | $257,133 | $269,068 | $277,633 | ||||||||||
| Years ended 3/31 | |||||||||||||||
| Class B | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||
Net asset value, beginning of period | $10.53 | $11.06 | $11.42 | $11.40 | $11.51 | ||||||||||
| Income (loss) from investment operations | |||||||||||||||
| Net investment income (d) | $0.40 | $0.43 | $0.46 | $0.44 | (z) | $0.43 | |||||||||
Net realized and unrealized gain (loss) on investments | 0.70 | (0.47 | ) | (0.38 | ) | (0.00 | )(w)(z) | (0.11 | ) | ||||||
Total from investment operations | $1.10 | $(0.04 | ) | $0.08 | $0.44 | $0.32 | |||||||||
| Less distributions declared to shareholders | |||||||||||||||
| From net investment income | $(0.39 | ) | $(0.40 | ) | $(0.41 | ) | $(0.42 | ) | $(0.43 | ) | |||||
From net realized gain on investments | (0.00 | )(w) | (0.09 | ) | (0.03 | ) | (0.00 | )(w) | — | ||||||
Total distributions declared to shareholders | $(0.39 | ) | $(0.49 | ) | $(0.44 | ) | $(0.42 | ) | $(0.43 | ) | |||||
Net asset value, end of period | $11.24 | $10.53 | $11.06 | $11.42 | $11.40 | ||||||||||
Total return (%) (r)(s)(t) | 10.62 | (0.26 | ) | 0.68 | 3.89 | 2.78 | |||||||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
| Expenses before expense reductions (f) | 1.62 | 1.74 | 1.92 | 1.97 | 1.95 | ||||||||||
Expenses after expense reductions (f) | 1.62 | 1.56 | 1.67 | 1.72 | 1.70 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 1.61 | 1.47 | 1.47 | 1.52 | 1.55 | ||||||||||
Net investment income | 3.66 | 4.04 | 4.07 | 3.87 | (z) | 3.73 | |||||||||
Portfolio turnover | 15 | 22 | 27 | 8 | 13 | ||||||||||
Net assets at end of period (000 Omitted) | $6,558 | $7,401 | $9,941 | $12,545 | $16,885 | ||||||||||
See Notes to Financial Statements
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MFS® VIRGINIA MUNICIPAL BOND FUND – continued
| Years ended 3/31 | |||||||||||||||
| Class C | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||
Net asset value, beginning of period | $10.54 | $11.06 | $11.43 | $11.41 | $11.52 | ||||||||||
| Income (loss) from investment operations | |||||||||||||||
| Net investment income (d) | $0.40 | $0.43 | $0.46 | $0.44 | (z) | $0.43 | |||||||||
Net realized and unrealized gain (loss) on investments | 0.69 | (0.46 | ) | (0.39 | ) | (0.00 | )(w)(z) | (0.11 | ) | ||||||
Total from investment operations | $1.09 | $(0.03 | ) | $0.07 | $0.44 | $0.32 | |||||||||
| Less distributions declared to shareholders | |||||||||||||||
| From net investment income | $(0.39 | ) | $(0.40 | ) | $(0.41 | ) | $(0.42 | ) | $(0.43 | ) | |||||
From net realized gain on investments | (0.00 | )(w) | (0.09 | ) | (0.03 | ) | (0.00 | )(w) | — | ||||||
Total distributions declared to shareholders | $(0.39 | ) | $(0.49 | ) | $(0.44 | ) | $(0.42 | ) | $(0.43 | ) | |||||
Net asset value, end of period | $11.24 | $10.54 | $11.06 | $11.43 | $11.41 | ||||||||||
Total return (%) (r)(s)(t) | 10.50 | (0.17 | ) | 0.59 | 3.89 | 2.78 | |||||||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
| Expenses before expense reductions (f) | 1.62 | 1.73 | 1.93 | 1.97 | 1.95 | ||||||||||
Expenses after expense reductions (f) | 1.62 | 1.56 | 1.67 | 1.72 | 1.70 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 1.61 | 1.48 | 1.47 | 1.52 | 1.55 | ||||||||||
Net investment income | 3.63 | 4.02 | 4.06 | 3.86 | (z) | 3.72 | |||||||||
Portfolio turnover | 15 | 22 | 27 | 8 | 13 | ||||||||||
Net assets at end of period (000 Omitted) | $29,660 | $19,745 | $15,105 | $12,377 | $12,995 | ||||||||||
| (d) | Per share data is based on average shares outstanding. |
| (f) | Ratios do not reflect reductions from fees paid indirectly, if applicable. |
| (l) | Interest expense and fees relate to payments made to the holder of the floating rate certificate from trust assets. |
| (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. |
| (t) | Total returns do not include any applicable sales charges. |
| (w) | Per share amount was less than $0.01. |
| (z) | The fund applied a change in estimate for amortization of premium on certain debt securities that resulted in an increase of $0.04 per share to net investment income, a decrease of $0.04 per share to net realized and unrealized gain (loss) on investments, and an increase of 0.29% to the net investment income ratio for each class for the year ended March 31, 2007. The change in estimate had no impact on net assets, net asset value per share or total return of each class. |
See Notes to Financial Statements
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Financial Highlights – continued
MFS® WEST VIRGINIA MUNICIPAL BOND FUND
The financial highlights table is intended to help you understand the fund 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 by which 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.
| Years ended 3/31 | |||||||||||||||
| Class A | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||
Net asset value, beginning of period | $10.36 | $11.01 | $11.45 | $11.47 | $11.58 | ||||||||||
| Income (loss) from investment operations | |||||||||||||||
| Net investment income (d) | $0.45 | $0.47 | (b) | $0.49 | $0.51 | (z) | $0.48 | ||||||||
Net realized and unrealized gain (loss) on investments | 0.60 | (0.58 | )(b) | (0.45 | ) | 0.01 | (z) | (0.11 | ) | ||||||
Total from investment operations | $1.05 | $(0.11 | ) | $0.04 | $0.52 | $0.37 | |||||||||
| Less distributions declared to shareholders | |||||||||||||||
| From net investment income | $(0.42 | ) | $(0.43 | ) | $(0.47 | ) | $(0.47 | ) | $(0.48 | ) | |||||
From net realized gain on investments | (0.01 | ) | (0.11 | ) | (0.01 | ) | (0.07 | ) | — | ||||||
Total distributions declared to shareholders | $(0.43 | ) | $(0.54 | ) | $(0.48 | ) | $(0.54 | ) | $(0.48 | ) | |||||
Net asset value, end of period | $10.98 | $10.36 | $11.01 | $11.45 | $11.47 | ||||||||||
Total return (%) (r)(s)(t) | 10.22 | (0.87 | ) | 0.35 | 4.59 | 3.21 | |||||||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
| Expenses before expense reductions (f) | 0.90 | 1.03 | 1.35 | 1.40 | 1.34 | ||||||||||
Expenses after expense reductions (f) | 0.90 | 0.86 | 1.10 | 1.15 | 1.09 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | N/A | 0.85 | 0.85 | 0.89 | 0.92 | ||||||||||
Net investment income | 4.12 | 4.39 | (b) | 4.33 | 4.41 | (z) | 4.16 | ||||||||
Portfolio turnover | 12 | 14 | 14 | 13 | 7 | ||||||||||
Net assets at end of period (000 Omitted) | $133,244 | $116,564 | $124,948 | $129,974 | $134,416 | ||||||||||
See Notes to Financial Statements
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Financial Highlights – continued
MFS® WEST VIRGINIA MUNICIPAL BOND FUND – continued
| Years ended 3/31 | |||||||||||||||
| Class B | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||
Net asset value, beginning of period | $10.36 | $11.01 | $11.44 | $11.46 | $11.58 | ||||||||||
| Income (loss) from investment operations | |||||||||||||||
| Net investment income (d) | $0.37 | $0.40 | (b) | $0.42 | $0.43 | (z) | $0.41 | ||||||||
Net realized and unrealized gain (loss) on investments | 0.59 | (0.58 | )(b) | (0.44 | ) | 0.01 | (z) | (0.13 | ) | ||||||
Total from investment operations | $0.96 | $(0.18 | ) | $(0.02 | ) | $0.44 | $0.28 | ||||||||
| Less distributions declared to shareholders | |||||||||||||||
| From net investment income | $(0.34 | ) | $(0.36 | ) | $(0.40 | ) | $(0.39 | ) | $(0.40 | ) | |||||
From net realized gain on investments | (0.01 | ) | (0.11 | ) | (0.01 | ) | (0.07 | ) | — | ||||||
Total distributions declared to shareholders | $(0.35 | ) | $(0.47 | ) | $(0.41 | ) | $(0.46 | ) | $(0.40 | ) | |||||
Net asset value, end of period | $10.97 | $10.36 | $11.01 | $11.44 | $11.46 | ||||||||||
Total return (%) (r)(s)(t) | 9.31 | (1.52 | ) | (0.21 | ) | 3.92 | 2.45 | ||||||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
| Expenses before expense reductions (f) | 1.66 | 1.69 | 2.00 | 2.06 | 1.99 | ||||||||||
Expenses after expense reductions (f) | 1.65 | 1.52 | 1.75 | 1.80 | 1.74 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | N/A | 1.51 | 1.50 | 1.55 | 1.57 | ||||||||||
Net investment income | 3.39 | 3.75 | (b) | 3.69 | 3.76 | (z) | 3.51 | ||||||||
Portfolio turnover | 12 | 14 | 14 | 13 | 7 | ||||||||||
Net assets at end of period (000 Omitted) | $4,639 | $6,454 | $8,096 | $10,087 | $12,388 | ||||||||||
| (b) | Amounts reflect a correction which reclassifies income and gains previously reported relating to activity for certain municipal bonds held in connection with self-deposited inverse floating rate securities. The corrected amounts resulted in an increase of $0.11 per share to previously reported net investment income, a decrease of $0.11 per share to previously reported net realized and unrealized gain (loss) on investments, and an increase of 1.02% to the previously reported net investment income ratio of each class. There is no impact on previously reported income from operations. |
| (d) | Per share data is based on average shares outstanding. |
| (f) | Ratios do not reflect reductions from fees paid indirectly, if applicable. |
| (l) | Interest expense and fees relate to payments made to the holder of the floating rate certificate from trust assets. |
| (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. |
| (t) | Total returns do not include any applicable sales charges. |
| (z) | The fund applied a change in estimate for amortization of premium on certain debt securities that resulted in an increase of $0.03 per share to net investment income, a decrease of $0.03 per share to net realized and unrealized gain (loss) on investments, and an increase of 0.25% to the net investment income ratio of each class for the year ended March 31, 2007. The change in estimate had no impact on net assets, net asset value per share or total return of each class. |
See Notes to Financial Statements
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| (1) | Business and Organization |
MFS Mississippi Municipal Bond Fund (Mississippi Fund), MFS New York Municipal Bond Fund (New York Fund), MFS North Carolina Municipal Bond Fund (North Carolina Fund), MFS Pennsylvania Municipal Bond Fund (Pennsylvania Fund), MFS South Carolina Municipal Bond Fund (South Carolina Fund), MFS Tennessee Municipal Bond Fund (Tennessee Fund), MFS Virginia Municipal Bond Fund (Virginia Fund), and MFS West Virginia Municipal Bond Fund (West Virginia Fund) are each a series of MFS Municipal Series Trust, which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.
| (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 revenues and expenses 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 each fund’s Statement of Assets and Liabilities through the date that the financial statements were issued. The value of municipal instruments can be affected by changes in their actual or perceived credit quality. The credit quality of municipal instruments can be affected by, among other things, the financial condition of the issuer or guarantor, the issuer’s future borrowing plans and sources of revenue, the economic feasibility of the revenue bond project or general borrowing purpose, political or economic developments in the region or state where the instrument is issued and the liquidity of the security. Municipal instruments generally trade in the over-the-counter market. Municipal instruments backed by current and anticipated revenues from a specific project or specific assets can be negatively affected by the discontinuance of the taxation supporting the projects or assets or the inability to collect revenues for the project or from the assets. If the Internal Revenue Service determines an issuer of a municipal instrument has not complied with the applicable tax requirements, the security could decline in value, interest from the security could become taxable and the funds may be required to issue Forms 1099-DIV.
Investment Valuations – Debt instruments and floating rate loans (other than short-term instruments), 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 generally are valued at amortized cost, which approximates market value. Futures contracts are generally valued at last posted settlement price as provided by a third-party pricing service on the market on which they are primarily traded. Futures contracts for which there were no trades that day for a particular position are generally valued at the closing bid quotation as provided by a third-party pricing service on the market on which such futures contracts are primarily traded. Open-end investment companies are generally valued at net asset value per share. 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. Values obtained from third-party pricing services can utilize both transaction data and market information such as yield, quality, coupon rate, maturity, type of issue, trading characteristics, and other market data.
The Board of Trustees has delegated primary responsibility for determining or causing to be determined the value of each fund’s investments (including any fair valuation) to the adviser pursuant to valuation policies and procedures approved by the Board. If the adviser determines that reliable market quotations are not readily available, investments are valued at fair value as determined in good faith by the adviser in accordance with such procedures under the oversight of the Board of Trustees. Under each fund’s valuation policies and procedures, market quotations are not considered to be readily available for most types of debt instruments and floating rate loans and many types of derivatives. These investments are generally valued at fair value based on information from third-party pricing services. In addition, investments may be valued at fair value if the adviser determines that an 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 each fund’s net asset value, or after the halting 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. 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 each 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 each fund’s net asset value may differ from quoted or published prices for the same investment. There can be no assurance that each fund could obtain the fair value assigned to an investment if it were to sell the investment at the same time at which each fund determines its net asset value per share.
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Various inputs are used in determining the value of each 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. Each 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 unobservable inputs, which may include the adviser’s own assumptions in determining the fair value of investments. Other financial instruments are derivative instruments not reflected in total investments, such as futures, forwards, swap contracts, and written options. The following is a summary of the levels used as of March 31, 2010 in valuing each fund’s assets or liabilities:
| Level 1 | Level 2 | Level 3 | Total | |||||
| Mississippi Fund | ||||||||
| Investments at Value | ||||||||
| Municipal Bonds | $— | $108,955,706 | $— | $108,955,706 | ||||
| Mutual Funds | 1,617,861 | — | — | 1,617,861 | ||||
| Total Investments | $1,617,861 | $108,955,706 | $— | $110,573,567 | ||||
| Other Financial Instruments | ||||||||
| Futures | $4,083 | $— | $— | $4,083 | ||||
| New York Fund | ||||||||
| Investments at Value | ||||||||
| Municipal Bonds | $— | $213,983,977 | $— | $213,983,977 | ||||
| Mutual Funds | 1,797,699 | — | — | 1,797,699 | ||||
| Total Investments | $1,797,699 | $213,983,977 | $— | $215,781,676 | ||||
| Other Financial Instruments | ||||||||
| Futures | $13,850 | $— | $— | $13,850 | ||||
| North Carolina Fund | ||||||||
| Investments at Value | ||||||||
| Municipal Bonds | $— | $425,766,911 | $— | $425,766,911 | ||||
| Mutual Funds | 6,412,346 | — | — | 6,412,346 | ||||
| Total Investments | $6,412,346 | $425,766,911 | $— | $432,179,257 | ||||
| Other Financial Instruments | ||||||||
| Futures | $20,309 | $— | $— | $20,309 | ||||
| Pennsylvania Fund | ||||||||
| Investments at Value | ||||||||
| Municipal Bonds | $— | $131,073,022 | $— | $131,073,022 | ||||
| Mutual Funds | 2,841,475 | — | — | 2,841,475 | ||||
| Total Investments | $2,841,475 | $131,073,022 | $— | $133,914,497 | ||||
| Other Financial Instruments | ||||||||
| Futures | $8,149 | $— | $— | $8,149 | ||||
| South Carolina Fund | ||||||||
| Investments at Value | ||||||||
| Municipal Bonds | $— | $165,512,873 | $— | $165,512,873 | ||||
| Mutual Funds | 7,744,864 | — | — | 7,744,864 | ||||
| Total Investments | $7,744,864 | $165,512,873 | $— | $173,257,737 | ||||
| Other Financial Instruments | ||||||||
| Futures | $6,940 | $— | $— | $6,940 | ||||
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| Level 1 | Level 2 | Level 3 | Total | |||||
| Tennessee Fund | ||||||||
| Investments at Value | ||||||||
| Municipal Bonds | $— | $125,488,945 | $— | $125,488,945 | ||||
| Mutual Funds | 2,250,146 | — | — | 2,250,146 | ||||
| Total Investments | $2,250,146 | $125,488,945 | $— | $127,739,091 | ||||
| Other Financial Instruments | ||||||||
| Futures | $7,080 | $— | $— | $7,080 | ||||
| Virginia Fund | ||||||||
| Investments at Value | ||||||||
| Municipal Bonds | $— | $338,395,494 | $— | $338,395,494 | ||||
| Mutual Funds | 3,651,142 | — | — | 3,651,142 | ||||
| Total Investments | $3,651,142 | $338,395,494 | $— | $342,046,636 | ||||
| Other Financial Instruments | ||||||||
| Futures | $18,475 | $— | $— | $18,475 | ||||
| West Virginia Fund | ||||||||
| Investments at Value | ||||||||
| Municipal Bonds | $— | $133,391,665 | $— | $133,391,665 | ||||
| Mutual Funds | 795,623 | — | — | 795,623 | ||||
| Total Investments | $795,623 | $133,391,665 | $— | $134,187,288 | ||||
| Other Financial Instruments | ||||||||
| Futures | $5,716 | $— | $— | $5,716 | ||||
For further information regarding security characteristics, see the Portfolios of Investments.
Derivatives – Each fund may use derivatives for different purposes, including to earn income and enhance returns, to increase or decrease exposure to a particular market, to manage or adjust the risk profile of the fund, or as alternatives to direct investments. Derivatives may be used for hedging or non-hedging purposes. While hedging can reduce or eliminate losses, it can also reduce or eliminate gains. When each 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.
In this reporting period each fund adopted the disclosure provisions of FASB Accounting Standard Codification 815, Derivatives and Hedging (“ASC 815”). ASC 815 requires enhanced disclosures about each fund’s use of and accounting for derivative instruments and the effect of derivative instruments on each fund’s results of operations and financial position. Tabular disclosure regarding derivative fair value and gain/loss by contract type (e.g., interest rate contracts, foreign exchange contracts, credit contracts, etc.) is required and derivatives accounted for as hedging instruments under ASC 815 must be disclosed separately from those that do not qualify for hedge accounting. Even though each fund may use derivatives in an attempt to achieve an economic hedge, each fund’s derivatives are not accounted for as hedging instruments under ASC 815 because investment companies account for their derivatives at fair value and record any changes in fair value in current period earnings.
Derivative instruments include written options, purchased options, futures contracts, forward foreign currency exchange contracts, and swap agreements. Each 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 each fund at March 31, 2010:
Fair Value (a) | ||||||
| Fund | Risk | Derivative | Asset Derivatives | |||
| Mississippi Fund | Interest Rate Contracts | Interest Rate Futures | $4,083 | |||
| New York Fund | Interest Rate Contracts | Interest Rate Futures | 13,850 | |||
| North Carolina Fund | Interest Rate Contracts | Interest Rate Futures | 20,310 | |||
| Pennsylvania Fund | Interest Rate Contracts | Interest Rate Futures | 8,149 | |||
| South Carolina Fund | Interest Rate Contracts | Interest Rate Futures | 6,940 | |||
| Tennessee Fund | Interest Rate Contracts | Interest Rate Futures | 7,080 | |||
| Virginia Fund | Interest Rate Contracts | Interest Rate Futures | 18,475 | |||
| West Virginia Fund | Interest Rate Contracts | Interest Rate Futures | 5,716 |
| (a) | The value of futures contracts outstanding includes cumulative appreciation/depreciation as reported in each fund’s Portfolio of Investments. Only the current day variation margin for futures contracts is separately reported within each fund’s Statement of Assets and Liabilities. |
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The following table presents, by major type of derivative contract, the realized gain (loss) on derivatives held by each fund for the year ended March 31, 2010 as reported in the Statements of Operations:
| Fund | Risk | Futures Contracts | ||
| Mississippi Fund | Interest Rate Contracts | $(2,101) | ||
| New York Fund | Interest Rate Contracts | 139,421 | ||
| North Carolina Fund | Interest Rate Contracts | 48,382 | ||
| Pennsylvania Fund | Interest Rate Contracts | 93,755 | ||
| South Carolina Fund | Interest Rate Contracts | 14,517 | ||
| Tennessee Fund | Interest Rate Contracts | 77,524 | ||
| Virginia Fund | Interest Rate Contracts | 92,027 | ||
| West Virginia Fund | Interest Rate Contracts | (2,942) |
The following table presents, by major type of derivative contract, the change in unrealized appreciation (depreciation) on derivatives held by each fund for the year ended March 31, 2010 as reported in the Statements of Operations:
| Fund | Risk | Futures Contracts | ||
| Mississippi Fund | Interest Rate Contracts | $4,083 | ||
| New York Fund | Interest Rate Contracts | 124,690 | ||
| North Carolina Fund | Interest Rate Contracts | 155,116 | ||
| Pennsylvania Fund | Interest Rate Contracts | 56,080 | ||
| South Carolina Fund | Interest Rate Contracts | 45,884 | ||
| Tennessee Fund | Interest Rate Contracts | 43,028 | ||
| Virginia Fund | Interest Rate Contracts | 129,315 | ||
| West Virginia Fund | Interest Rate Contracts | 5,716 |
Derivative counterparty credit risk is managed through formal evaluation of the creditworthiness of all potential counterparties. On certain over-the-counter derivatives, each fund attempts to reduce its exposure to counterparty credit risk whenever possible by entering into an International Swaps and Derivatives Association (ISDA) Master Agreement on a bilateral basis with each of the counterparties with whom it undertakes a significant volume of transactions. The ISDA Master Agreement gives each party to the agreement the right to terminate all transactions traded under such agreement if there is a certain deterioration in the credit quality of the other party. The ISDA Master Agreement gives each fund the right, upon an event of default by the applicable counterparty or a termination of the agreement, 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 ISDA Master Agreement could result in a reduction of each fund’s credit risk to such counterparty equal to any amounts payable by each fund under the applicable transactions, if any. However, absent an event of default by the counterparty or a termination of the agreement, the ISDA Master Agreement does not result in an offset of reported balance sheet assets and liabilities across transactions between each fund and the applicable counterparty.
Collateral requirements differ by type of derivative. Collateral or margin requirements are set by the broker or exchange clearing house for exchange traded derivatives (i.e., futures and exchange-traded options) while collateral terms are contract specific for over-the-counter traded derivatives (i.e., forwards, swaps and over-the-counter options). For derivatives traded under an ISDA Master Agreement, the collateral requirements are netted across all transactions traded under such agreement and one amount is posted from one party to the other to collateralize such obligations. Cash collateral that has been pledged to cover obligations of each fund under derivative contracts will be reported separately on the Statements of Assets and Liabilities as restricted cash. Securities collateral pledged for the same purpose is noted in the Portfolios of Investments.
Futures Contracts – Each fund may use futures contracts to gain or to hedge against broad market, interest rate or currency exposure. 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, each fund is required to deposit with the broker, either in cash or securities, an initial margin in an amount equal to a certain percentage of the notional amount of the contract. Subsequent payments (variation margin) are made or received by each 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 each fund until the contract is closed or expires at which point the gain or loss on futures is realized.
Each fund bears the risk of interest rates, exchange rates or securities prices moving unexpectedly, in which case, each fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. While futures may present less counterparty risk to each fund since the contracts are exchange traded and the exchange’s clearinghouse guarantees payments
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to the broker, there is still counterparty credit risk due to the insolvency of the broker. Each fund’s maximum risk of loss due to counterparty credit risk is equal to the margin posted by each fund to the broker plus any gains or minus any losses on the outstanding futures contracts.
Inverse Floaters – Certain funds invest in municipal inverse floating rate securities which are structured by the issuer (known as primary market inverse floating rate securities) or by an investment banker utilizing municipal bonds which have already been issued (known as secondary market inverse floating rate securities) to have variable rates of interest which typically move in the opposite direction of short term interest rates. A secondary market inverse floating rate security is created when an investment banker transfers a fixed rate municipal bond to a special purpose trust, and causes the trust to (a) issue floating rate certificates to third parties, in an amount equal to a fraction of the par amount of the deposited bonds (these certificates usually pay tax-exempt interest at short-term interest rates that typically reset weekly; and the certificate holders typically, on seven days notice, have the option to tender their certificates to the investment banker or another party for redemption at par plus accrued interest), and (b) issue inverse floating rate certificates (sometimes referred to as “inverse floaters”). If the holder of the inverse floater transfers the municipal bonds to an investment banker for the purpose of depositing the municipal bonds into the special purpose trust, the inverse floating rate certificates that are issued by the trust are referred to as “self-deposited inverse floaters.” If the bonds held by the trust are purchased by the investment banker for deposit into the trust from someone other than the purchasers of the inverse floaters, the inverse floating rate certificates that are issued by the trust are referred to as “externally deposited inverse floaters.” Such self-deposited inverse floaters held by certain funds are accounted for as secured borrowings, with the municipal bonds reflected in the investments of certain funds and amounts owed to the holder of the floating rate certificate under the provisions of the trust, which amounts are paid solely from the assets of the trust, reflected as liabilities of certain funds in the Statements of Assets and Liabilities under the caption, “Payable to the holder of the floating rate certificate from trust assets”. The carrying value of certain funds’ payable to the holder of the floating rate certificate from trust assets as reported on certain funds’ Statements of Assets and Liabilities approximates its fair value. At March 31, 2010, certain funds’ payable to the holder of the floating rate certificate from trust assets and the interest rate on these floating rate certificates issued by the trust were as follows:
| Payable to the holder of the floating rate certificate from trust assets at March 31, 2010 | Weighted average interest rate at March 31, 2010 on floating rate certificates issued by the trust | |||
| Fund | ||||
| North Carolina Fund | $8,014,480 | 0.47% | ||
| Pennsylvania Fund | 946,601 | 0.73% | ||
| Virginia Fund | 5,427,789 | 0.65% |
For the year ended March 31, 2010, the average daily payable to the holder of the floating rate certificate from trust assets; the weighted average interest rate related to this payable; and the interest expense and fees related to interest payments made to the holder of certain floating rate certificates and associated fees, both of which are made from trust assets were as follows:
| Average payable to the holder of the floating rate certificate from trust assets for the year ended ended March 31, 2010 | Weighted average interest rate for the year ended March 31, 2010, on floating rate certificates issued by the trust | Interest expense and fees in connection with self- deposited inverse floaters for the year ended March 31, 2010 | ||||
| Fund | ||||||
| North Carolina Fund | $8,014,090 | 0.92% | $73,599 | |||
| Pennsylvania Fund | 952,290 | 0.47% | 4,484 | |||
| Virginia Fund | 5,428,207 | 0.73% | 39,748 |
Primary and externally deposited inverse floaters held by certain funds are not accounted for as secured borrowings.
Indemnifications – Under each 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 each fund. Additionally, in the normal course of business, each fund enters into agreements with service providers that may contain indemnification clauses. Each fund’s maximum exposure under these agreements is unknown as this would involve future claims that may be made against each fund that have not yet occurred.
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. Dividends received in cash are recorded on the ex-dividend date. Dividend and interest payments received in additional securities are recorded on the ex-dividend or ex-interest date in an amount equal to the value of the security on such date. Each fund may receive proceeds from litigation settlements. Any proceeds received from litigation involving portfolio holdings are reflected in the Statements of Operations in realized gain/loss if the security has been
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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 Statements of Operations.
Legal fees and other related expenses incurred to preserve and protect the value of a security owned are added to the cost of the security; other legal fees are expensed. Capital infusions made directly to the security issuer, which are generally non-recurring, incurred to protect or enhance the value of high-yield debt securities, are reported as additions to the cost basis of the security. Costs that are incurred to negotiate the terms or conditions of capital infusions or that are expected to result in a plan of reorganization are reported as realized losses. Ongoing costs incurred to protect or enhance an investment, or costs incurred to pursue other claims or legal actions, are expensed.
Fees Paid Indirectly – Each fund’s custody fee may be reduced according to an arrangement that measures the value of cash deposited with the custodian by each fund. This amount, for the year ended March 31, 2010, is shown as a reduction of total expenses on the Statements of Operations.
Tax Matters and Distributions – Each 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 and tax-exempt income, including realized capital gains. As a result, no provision for federal income tax is required. Each fund’s federal tax return for the prior three fiscal years remains subject to examination by the Internal Revenue Service.
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. Distributions in excess of net investment income or net realized gains are temporary overdistributions for financial statement purposes resulting from differences in the recognition or classification of income or distributions for financial statement and tax purposes.
Book/tax differences primarily relate to amortization and accretion of debt securities, defaulted bonds, treating a portion of the proceeds from redemptions as a distribution for tax purposes, and secured borrowings.
The tax character of distributions declared to shareholders for the last two fiscal years is as follows:
| Year ended 3/31/10 | Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | ||||||||
| Ordinary income (including any short-term capital gains) | $— | $— | $370,248 | $— | $554 | $258,022 | $89,469 | $52,126 | ||||||||
| Tax-exempt income | 4,338,414 | 9,064,289 | 15,075,885 | 5,048,417 | 6,293,244 | 5,126,335 | 13,203,071 | 5,107,886 | ||||||||
| Long-term capital gain | — | 177,068 | 180,492 | — | 101,542 | 140,076 | — | 35,654 | ||||||||
| Total distributions | $4,338,414 | $9,241,357 | $15,626,625 | $5,048,417 | $6,395,340 | $5,524,433 | $13,292,540 | $5,195,666 | ||||||||
| Year ended 3/31/09 | Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | ||||||||
| Ordinary income (including any short-term capital gains) | $— | $381,554 | $150,098 | $— | $— | $338,369 | $732,996 | $20,485 | ||||||||
| Tax-exempt income | 4,059,672 | 8,219,506 | 13,144,511 | 4,597,753 | 6,193,212 | 5,035,589 | 12,244,399 | 5,074,051 | ||||||||
| Long-term capital gain | — | 1,062,828 | 1,146,971 | — | 235,358 | 138,081 | 1,579,313 | 1,280,148 | ||||||||
| Total distributions | $4,059,672 | $9,663,888 | $14,441,580 | $4,597,753 | $6,428,570 | $5,512,039 | $14,556,708 | $6,374,684 | ||||||||
The federal tax cost and the tax basis components of distributable earnings were as follows:
| As of 3/31/10 | Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | ||||||||||||||||
| Cost of investments | $106,878,070 | $208,439,573 | $408,736,343 | $130,162,240 | $167,937,233 | $124,257,054 | $327,414,857 | $132,427,225 | ||||||||||||||||
| Gross appreciation | $4,372,978 | $9,774,525 | $18,074,953 | $4,186,602 | $6,689,120 | $5,068,798 | $13,778,164 | $3,320,253 | ||||||||||||||||
| Gross depreciation | (677,481 | ) | (2,432,422 | ) | (2,646,519 | ) | (1,380,946 | ) | (1,368,616 | ) | (1,586,761 | ) | (4,574,174 | ) | (1,560,190 | ) | ||||||||
| Net unrealized appreciation (depreciation) | $3,695,497 | $7,342,103 | $15,428,434 | $2,805,656 | $5,320,504 | $3,482,037 | $9,203,990 | $1,760,063 | ||||||||||||||||
| Undistributed ordinary income | 261,227 | — | 21,649 | — | — | — | 189,022 | — | ||||||||||||||||
| Undistributed tax-exempt income | 468,384 | 831,657 | 1,701,669 | 515,507 | 822,861 | 782,443 | 1,218,662 | 455,616 | ||||||||||||||||
| Capital loss carryforwards | — | — | — | (484,739 | ) | (620,248 | ) | — | — | (936,443 | ) | |||||||||||||
| Post-October capital loss deferral | (65,650 | ) | — | (244,268 | ) | — | — | (91,195 | ) | (121,706 | ) | (92,246 | ) | |||||||||||
| Other temporary differences | (393,484 | ) | (789,202 | ) | (1,414,579 | ) | (462,907 | ) | (590,925 | ) | (453,052 | ) | (1,206,552 | ) | (460,376 | ) |
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As of March 31, 2010 certain funds had capital loss carryforwards available to offset future realized gains. Such losses expire as follows:
| Expiration Date | Pennsylvania Fund | South Carolina Fund | West Virginia Fund | ||||||
| 3/31/16 | $(17,684 | ) | $— | $— | |||||
| 3/31/17 | (327,327 | ) | — | — | |||||
| 3/31/18 | (139,728 | ) | (620,248 | ) | (936,443 | ) | |||
| Total | $(484,739 | ) | $(620,248 | ) | $(936,443 | ) |
Multiple Classes of Shares of Beneficial Interest – Each fund offers multiple classes of shares, which differ in their respective distribution and service fees. Each fund’s income and common expenses are allocated to shareholders based on the value of settled shares outstanding of each class. Each fund’s realized and unrealized gain (loss) 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. Class B shares will convert to Class A shares approximately eight years after purchase. Each fund’s distributions declared to shareholders as reported on the Statements of Changes in Net Assets are presented by class as follows:
From net investment income
Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | |||||||||||||
Year ended | Year ended | Year ended | Year ended | Year ended | Year ended | Year ended | Year ended | |||||||||
| Class A | $4,165,999 | $3,799,592 | $7,586,827 | $6,767,287 | $12,877,948 | $11,214,241 | $4,268,789 | $3,643,041 | ||||||||
| Class B | 172,415 | 260,080 | 550,567 | 660,968 | 421,961 | 696,228 | 779,628 | 954,712 | ||||||||
| Class C | N/A | N/A | 926,895 | 791,251 | 1,775,976 | 1,234,042 | N/A | N/A | ||||||||
| Total | $4,338,414 | $4,059,672 | $9,064,289 | $8,219,506 | $15,075,885 | $13,144,511 | $5,048,417 | $4,597,753 | ||||||||
South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | |||||||||||||
Year ended | Year ended | Year ended | Year ended | Year ended | Year ended | Year ended | Year ended | |||||||||
| Class A | $5,930,821 | $5,685,164 | $4,907,834 | $4,697,979 | $12,085,787 | $11,232,593 | $4,932,398 | $4,821,294 | ||||||||
| Class B | 362,423 | 508,048 | 218,501 | 337,610 | 245,244 | 333,402 | 175,488 | 252,757 | ||||||||
| Class C | N/A | N/A | N/A | N/A | 872,040 | 678,404 | N/A | N/A | ||||||||
| Total | $6,293,244 | $6,193,212 | $5,126,335 | $5,035,589 | $13,203,071 | $12,244,399 | $5,107,886 | $5,074,051 | ||||||||
From net realized gain on investments
New York Fund | North Carolina Fund | South Carolina Fund | Tennessee Fund | |||||||||||||
Year ended | Year ended | Year ended | Year ended | Year ended | Year ended | Year ended | Year ended | |||||||||
| Class A | $143,090 | $1,168,392 | $452,106 | $1,077,983 | $95,524 | $213,444 | $380,028 | $441,456 | ||||||||
| Class B | 11,899 | 120,331 | 16,499 | 78,686 | 6,572 | 21,914 | 18,070 | 34,994 | ||||||||
| Class C | 22,079 | 155,659 | 82,135 | 140,400 | N/A | N/A | N/A | N/A | ||||||||
| Total | $177,068 | $1,444,382 | $550,740 | $1,297,069 | $102,096 | $235,358 | $398,098 | $476,450 | ||||||||
Virginia Fund | West Virginia Fund | |||||||||||||||
Year ended | Year ended | Year ended | Year ended | |||||||||||||
| Class A | $80,213 | $2,090,779 | $84,345 | $1,224,513 | ||||||||||||
| Class B | 1,909 | 68,587 | 3,435 | 76,120 | ||||||||||||
| Class C | 7,347 | 152,943 | N/A | N/A | ||||||||||||
| Total | $89,469 | $2,312,309 | $87,780 | $1,300,633 | ||||||||||||
| (3) | Transactions with Affiliates |
Investment Adviser – Each fund has an investment advisory agreement with MFS to provide overall investment management and related administrative services and facilities to each fund. The management fee is computed daily and paid monthly at an annual rate of 0.45% of each fund’s average daily net assets.
For the Pennsylvania Fund, the investment adviser had agreed in writing to pay a portion of the fund’s operating expenses, exclusive of management fee, distribution and service fees, interest, taxes, extraordinary expenses, brokerage and transaction costs and investment-related expenses (including interest expense and fees associated with investments in inverse floating rate
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instruments), such that operating expenses did not exceed 0.20% annually of the fund’s average daily net assets. This written agreement terminated on August 1, 2009. For the year ended March 31, 2010, this reduction amounted to $18,537 and is reflected as a reduction of total expenses in the Statements of Operations.
The investment adviser has agreed in writing to pay a portion of the following funds’ total annual operating expenses, exclusive of interest, taxes, extraordinary expenses, brokerage and transaction costs and investment-related expenses (including interest expense and fees associated with investments in inverse floating rate instruments), such that total annual fund operating expenses do not exceed the following rates annually of certain funds’ average daily net assets:
| New York Fund | North Carolina Fund | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | |||||||
| Class A | 0.90% | 0.93% | 0.91% | 0.94% | 0.89% | 0.90% | ||||||
| Class B | 1.65% | 1.68% | 1.66% | 1.69% | 1.64% | 1.65% | ||||||
| Class C | 1.65% | 1.68% | N/A | N/A | 1.64% | N/A |
These written agreements will continue until modified by the funds’ Board of Trustees, but such agreements will continue at least until July 31, 2010. For the year ended March 31, 2010, this reduction amounted to $2,768 for the West Virginia fund and is reflected as a reduction of total expenses in the Statements of Operations. For all other funds, actual operating expenses did not exceed the limits described above and therefore, the investment adviser did not pay any portion of these funds’ expenses.
Distributor – MFS Fund Distributors, Inc. (MFD), a wholly-owned subsidiary of MFS, as distributor, received the following for the year ended March 31, 2010, as its portion of the initial sales charge on sales of Class A shares of each fund:
| Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | |||||||
| $62,493 | $85,531 | $179,060 | $112,987 | $134,230 | $46,635 | $113,649 | $28,607 |
The Board of Trustees has adopted a distribution plan for certain class shares pursuant to Rule 12b-1 of the Investment Company Act of 1940.
Each fund’s distribution plan provides that each fund will pay MFD for services provided by MFD and financial intermediaries in connection with the distribution and servicing of certain share classes. One component of the plan is a distribution fee paid to MFD and another component of the plan is a service fee paid to MFD. MFD may subsequently pay all, or a portion, of the distribution and/or service fees to financial intermediaries.
Distribution Plan Fee Table:
| CLASS A | ||||||||||
| Distribution Fee Rate (d) | Service Fee Rate (d) | Total Distribution Plan (d) | Annual Effective Rate (e) | Distribution and Service Fee | ||||||
| Mississippi Fund | — | 0.25% | 0.25% | 0.07% | $190,673 | |||||
| New York Fund | — | 0.25% | 0.25% | 0.25% | 448,886 | |||||
| North Carolina Fund | — | 0.25% | 0.25% | 0.25% | 787,794 | |||||
| Pennsylvania Fund | — | 0.25% | 0.25% | 0.10% | 203,839 | |||||
| South Carolina Fund | — | 0.25% | 0.25% | 0.25% | 361,881 | |||||
| Tennessee Fund | — | 0.25% | 0.25% | 0.25% | 298,403 | |||||
| Virginia Fund | — | 0.25% | 0.25% | 0.25% | 704,055 | |||||
| West Virginia Fund | — | 0.25% | 0.25% | 0.25% | 319,241 | |||||
| CLASS B | ||||||||||
| Distribution Fee Rate (d) | Service Fee Rate (d) | Total Distribution Plan (d) | Annual Effective Rate (e) | Distribution and Service Fee | ||||||
| Mississippi Fund | 0.75% | 0.25% | 1.00% | 0.77% | $45,245 | |||||
| New York Fund | 0.75% | 0.25% | 1.00% | 1.00% | 157,785 | |||||
| North Carolina Fund | 0.75% | 0.25% | 1.00% | 1.00% | 125,932 | |||||
| Pennsylvania Fund | 0.75% | 0.25% | 1.00% | 0.86% | 209,379 | |||||
| South Carolina Fund | 0.75% | 0.25% | 1.00% | 1.00% | 107,888 | |||||
| Tennessee Fund | 0.75% | 0.25% | 1.00% | 1.00% | 64,503 | |||||
| Virginia Fund | 0.75% | 0.25% | 1.00% | 1.00% | 69,064 | |||||
| West Virginia Fund | 0.75% | 0.25% | 1.00% | 1.00% | 56,051 | |||||
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| CLASS C | ||||||||||
| Distribution Fee Rate (d) | Service Fee Rate (d) | Total Distribution Plan (d) | Annual Effective Rate (e) | Distribution and Service Fee | ||||||
| New York Fund | 0.75% | 0.25% | 1.00% | 1.00% | $267,168 | |||||
| North Carolina Fund | 0.75% | 0.25% | 1.00% | 1.00% | 536,028 | |||||
| Virginia Fund | 0.75% | 0.25% | 1.00% | 1.00% | 247,552 | |||||
| Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | |||||||||
| Total Distribution and Service Fees | $235,918 | $873,839 | $1,449,754 | $413,218 | $469,769 | $362,906 | $1,020,671 | $375,292 |
| (d) | In accordance with the distribution plan for certain classes, each fund pays distribution and/or service fees equal to these annual percentage rates of each class’ average daily net assets. The distribution and service fee rates disclosed by class represent the current rates in effect at the end of the reporting period. Any rate changes, if applicable, are detailed below. |
| (e) | The annual effective rates represent actual fees incurred under the distribution plan for the year ended March 31, 2010, based on each class’ average daily net assets. |
| Mississippi Fund: Effective July 1, 2009, the service fee rate for Class A is 0.25%. MFD has agreed in writing to reduce the Class A service fee rate to 0.10%. This written agreement will continue until modified by the fund’s Board of Trustees, but will continue until at least July 31, 2010. This reduction amounted to $114,404 which is shown as a reduction of total expenses in the Statements of Operations. Prior to July 1, 2009, payment of the 0.25% service fee rate was not in effect. Effective August 1, 2009, the service fee rate attributable to Class B shares within the first year of purchase is 0.25%. The service fee rate attributable to all other Class B shares has been reduced to 0.00% by MFD under a written agreement that will continue until modified by the fund’s Board of Trustees, but will continue at least until July 31, 2010. This reduction amounted to $7,316 which is shown as a reduction of total expenses in the Statements of Operations. Prior to August 1, 2009, the service fee rate attributable to Class B shares within the first year of purchase was 0.25%. The service fee rate attributable to all other Class B shares was not in effect. |
| Pennsylvania Fund: Effective August 1, 2009, the service fee rate for Class A is 0.25%. MFD has agreed in writing to reduce the Class A service fee rate to 0.10%. This written agreement will continue until modified by the fund’s Board of Trustees, but will continue until at least July 31, 2010. This reduction amounted to $104,453 which is shown as a reduction of total expenses in the Statements of Operations. Prior to August 1, 2009, the service fee rate for Class A was 0.25%, of which 0.10% was being paid by the fund. Payment of the remaining 0.15% was not in effect. Effective August 1, 2009, the service fee rate attributable to Class B shares within the first year of purchase is 0.25%. The service fee rate attributable to all other Class B shares has been reduced by MFD to 0.10% under a written agreement that will continue until modified by the fund’s Board of Trustees, but will continue at least until July 31, 2010. This reduction amounted to $19,679 which is shown as a reduction of total expenses in the Statements of Operations. Prior to August 1, 2009, the service fee rate attributable to Class B shares within the first year of purchase was 0.25%. The service fee rate attributable to all other Class B shares was 0.25%, of which 0.10% was being paid by the fund. Payment of the remaining 0.15% was not in effect. |
Certain Class A shares purchased prior to September 1, 2008 are subject to a contingent deferred sales charge (CDSC) in the event of a shareholder redemption within 12 months of purchase. Certain Class A shares purchased on or subsequent to September 1, 2008 are subject to a CDSC in the event of a shareholder redemption within 24 months of purchase. Class C shares are subject to a CDSC in the event of a shareholder redemption within 12 months of purchase. Class B shares are subject to a CDSC in the event of a shareholder redemption within six years of purchase. All contingent deferred sales charges are paid to MFD and during the year ended March 31, 2010, were as follows:
| CDSC imposed | Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | ||||||||
| Class A | $1,000 | $1,155 | $9,866 | $— | $987 | $— | $— | $— | ||||||||
| Class B | 2,633 | 8,505 | 5,622 | 9,400 | 6,526 | 6,319 | 6,933 | 4,544 | ||||||||
| Class C | N/A | 5,934 | 5,897 | N/A | N/A | N/A | 4,121 | N/A |
Shareholder Servicing Agent – MFS Service Center, Inc. (MFSC), a wholly-owned subsidiary of MFS, receives a fee from each fund for its services as shareholder servicing agent calculated as a percentage of the average daily net assets of each fund as determined periodically under the supervision of the funds’ Board of Trustees. For the year ended March 31, 2010, each fund paid MFSC the following fee, which equated to the following annual percentage of each fund’s average daily net assets:
| Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | |||||||||
| Expenses paid | $30,133 | $59,590 | $121,171 | $47,734 | $48,442 | $39,809 | $100,464 | $40,365 | ||||||||
| Percent of average daily net assets | 0.0289% | 0.0268% | 0.0318% | 0.0393% | 0.0311% | 0.0316% | 0.0321% | 0.0303% |
MFSC also receives payment from each fund for out-of-pocket expenses, sub-accounting and other shareholder servicing costs which may be paid to affiliated and unaffiliated service providers. For the year ended March 31, 2010, these out-of-pocket expenses, sub-accounting and other shareholder servicing costs amounted to the following:
| Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | |||||||
| $31,769 | $62,666 | $108,449 | $42,234 | $46,831 | $31,803 | $93,838 | $33,944 |
Administrator – MFS provides certain financial, legal, shareholder communications, compliance, and other administrative services to each fund. Under an administrative services agreement, each fund partially reimburses MFS the costs incurred to
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provide these services. Each 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 March 31, 2010 was equivalent to an annual effective rate of each fund’s average daily net assets as follows:
| Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | |||||||||
| Percentage of average daily net assets | 0.0253% | 0.0207% | 0.0189% | 0.0241% | 0.0224% | 0.0239% | 0.0194% | 0.0234% |
Trustees’ and Officers’ Compensation – Each fund pays compensation to independent Trustees in the form of a retainer, attendance fees, and additional compensation to Board and Committee chairpersons. Each fund does not pay compensation directly to Trustees or officers of each fund who are also officers of the investment adviser, all of whom receive remuneration for their services to each fund from MFS. Certain officers and Trustees of each fund are officers or directors of MFS, MFD, and MFSC.
Prior to December 31, 2001, each fund had an unfunded defined benefit plan (“DB plan”) for independent Trustees. As of December 31, 2001, the Board took action to terminate the DB plan with respect to then-current and any future independent Trustees, such that the DB Plan covers only certain of those former independent Trustees who retired on or before December 31, 2001. The DB Plan resulted in a pension expense for the funds. These amounts are included in independent Trustees’ compensation on the Statements of Operations and were as follows:
| Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | |||||||
| $712 | $601 | $1,187 | $720 | $1,163 | $609 | $1,181 | $1,159 |
The liability for deferred retirement benefits payable to certain independent Trustees in connection with the DB plan amounted to the following at March 31, 2010, and is included in payable for independent Trustees’ compensation on the Statements of Assets and Liabilities:
| Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | |||||||
| $6,371 | $8,142 | $10,970 | $6,307 | $10,945 | $8,104 | $10,987 | $10,939 |
Other – These funds and certain other funds managed by MFS (the funds) have entered into services agreements (the Agreements) which provide for payment of fees by the funds to Tarantino LLC and Griffin Compliance LLC in return for the provision of services of an Independent Chief Compliance Officer (ICCO) and Assistant ICCO, respectively, for the funds. The ICCO and Assistant ICCO are officers of the funds and the sole members of Tarantino LLC and Griffin Compliance LLC, respectively. The funds can terminate the Agreements with Tarantino LLC and Griffin Compliance LLC at any time under the terms of the Agreements. For the year ended March 31, 2010, the aggregate fees paid by each fund to Tarantino LLC and Griffin Compliance LLC amounted to the following and are included in miscellaneous expense on the Statements of Operations:
| Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | |||||||
| $1,152 | $2,471 | $4,162 | $1,331 | $1,711 | $1,393 | $3,448 | $1,478 |
MFS has agreed to reimburse the funds for a portion of the payments made by each fund in the following amounts, which are shown as a reduction of total expenses in the Statements of Operations. Additionally, MFS has agreed to bear all expenses associated with office space, other administrative support, and supplies provided to the ICCO and Assistant ICCO:
| Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | |||||||
| $608 | $1,300 | $2,195 | $703 | $903 | $736 | $1,820 | $779 |
Each fund may invest in the MFS Institutional Money Market Portfolio which is managed by MFS and seeks a high level of current income consistent with preservation of capital and liquidity. Income earned on this investment is included in dividends from underlying funds on the Statements of Operations. This money market fund does not pay a management fee to MFS.
| (4) | Portfolio Securities |
Purchases and sales of investments, other than U.S. Government securities, purchased option transactions, and short-term obligations were as follows:
| Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | |||||||||
| Purchases | $22,687,939 | $55,944,750 | $134,356,786 | $34,405,450 | $41,183,431 | $28,701,052 | $85,687,842 | $22,935,373 | ||||||||
| Sales | $10,654,581 | $55,575,466 | $46,884,245 | $14,455,032 | $21,458,348 | $24,778,865 | $45,213,484 | $14,968,217 |
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| (5) | Shares of Beneficial Interest |
Each 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:
| Mississippi Fund | New York Fund | |||||||||||||||||||||||
| Year ended 3/31/10 | Year ended 3/31/09 | Year ended 3/31/10 | Year ended 3/31/09 | |||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||
| Shares sold | ||||||||||||||||||||||||
Class A | 2,039,002 | $19,831,253 | 2,060,823 | $19,340,627 | 2,487,720 | $26,851,928 | 6,427,116 | $68,313,434 | ||||||||||||||||
Class B | 38,433 | 374,808 | 44,301 | 414,376 | 153,940 | 1,642,985 | 188,171 | 1,957,607 | ||||||||||||||||
Class C | N/A | N/A | N/A | N/A | 1,183,896 | 12,754,003 | 723,936 | 7,614,646 | ||||||||||||||||
| 2,077,435 | $20,206,061 | 2,105,124 | $19,755,003 | 3,825,556 | $41,248,916 | 7,339,223 | $77,885,687 | |||||||||||||||||
| Shares issued to shareholders in reinvestment of distributions | ||||||||||||||||||||||||
Class A | 257,570 | $2,500,746 | 247,782 | $2,315,315 | 495,175 | $5,329,737 | 530,046 | $5,397,306 | ||||||||||||||||
Class B | 11,062 | 107,431 | 15,068 | 141,132 | 36,394 | 390,362 | 53,460 | 546,184 | ||||||||||||||||
Class C | N/A | N/A | N/A | N/A | 53,994 | 581,504 | 56,460 | 576,753 | ||||||||||||||||
| 268,632 | $2,608,177 | 262,850 | $2,456,447 | 585,563 | $6,301,603 | 639,966 | $6,520,243 | |||||||||||||||||
| Shares reacquired | ||||||||||||||||||||||||
Class A | (983,201 | ) | $(9,550,732 | ) | (1,103,423 | ) | $(10,230,051 | ) | (3,326,790 | ) | $(36,045,063 | ) | (2,040,631 | ) | $(20,686,206 | ) | ||||||||
Class B | (176,143 | ) | (1,714,200 | ) | (334,343 | ) | (3,150,983 | ) | (481,645 | ) | (5,162,565 | ) | (504,397 | ) | (5,118,406 | ) | ||||||||
Class C | N/A | N/A | N/A | N/A | (501,470 | ) | (5,391,673 | ) | (476,809 | ) | (4,758,399 | ) | ||||||||||||
| (1,159,344 | ) | $(11,264,932 | ) | (1,437,766 | ) | $(13,381,034 | ) | (4,309,905 | ) | $(46,599,301 | ) | (3,021,837 | ) | $(30,563,011 | ) | |||||||||
| Net change | ||||||||||||||||||||||||
Class A | 1,313,371 | $12,781,267 | 1,205,182 | $11,425,891 | (343,895 | ) | $(3,863,398 | ) | 4,916,531 | $53,024,534 | ||||||||||||||
Class B | (126,648 | ) | (1,231,961 | ) | (274,974 | ) | (2,595,475 | ) | (291,311 | ) | (3,129,218 | ) | (262,766 | ) | (2,614,615 | ) | ||||||||
Class C | N/A | N/A | N/A | N/A | 736,420 | 7,943,834 | 303,587 | 3,433,000 | ||||||||||||||||
| 1,186,723 | $11,549,306 | 930,208 | $8,830,416 | 101,214 | $951,218 | 4,957,352 | $53,842,919 | |||||||||||||||||
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| North Carolina Fund | Pennsylvania Fund | |||||||||||||||||||||||
| Year ended 3/31/10 | Year ended 3/31/09 | Year ended 3/31/10 | Year ended 3/31/09 | |||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||
| Shares sold | ||||||||||||||||||||||||
Class A | 7,253,492 | $84,460,683 | 4,672,312 | $51,876,066 | 3,480,562 | $34,516,082 | 2,637,295 | $25,344,354 | ||||||||||||||||
Class B | 223,794 | 2,598,752 | 179,425 | 1,997,256 | 265,990 | 2,639,202 | 107,471 | 1,033,326 | ||||||||||||||||
Class C | 2,860,282 | 33,218,031 | 1,084,956 | 12,102,526 | N/A | N/A | N/A | N/A | ||||||||||||||||
| 10,337,568 | $120,277,466 | 5,936,693 | $65,975,848 | 3,746,552 | $37,155,284 | 2,744,766 | $26,377,680 | |||||||||||||||||
| Shares issued to shareholders in reinvestment of distributions | ||||||||||||||||||||||||
Class A | 725,075 | $8,425,723 | 737,578 | $8,166,327 | 276,612 | $2,737,285 | 244,851 | $2,323,850 | ||||||||||||||||
Class B | 23,366 | 270,938 | 40,071 | 442,898 | 51,198 | 507,154 | 63,568 | 605,969 | ||||||||||||||||
Class C | 105,465 | 1,226,250 | 89,337 | 987,416 | N/A | N/A | N/A | N/A | ||||||||||||||||
| 853,906 | $9,922,911 | 866,986 | $9,596,641 | 327,810 | $3,244,439 | 308,419 | $2,929,819 | |||||||||||||||||
| Shares reacquired | ||||||||||||||||||||||||
Class A | (3,005,827 | ) | $(35,027,719 | ) | (3,344,672 | ) | $(36,942,123 | ) | (1,436,161 | ) | $(14,261,829 | ) | (1,766,315 | ) | $(16,571,439 | ) | ||||||||
Class B | (503,722 | ) | (5,841,221 | ) | (879,416 | ) | (9,675,659 | ) | (653,820 | ) | (6,475,238 | ) | (666,263 | ) | (6,293,882 | ) | ||||||||
Class C | (448,679 | ) | (5,201,206 | ) | (501,935 | ) | (5,555,936 | ) | N/A | N/A | N/A | N/A | ||||||||||||
| (3,958,228 | ) | $(46,070,146 | ) | (4,726,023 | ) | $(52,173,718 | ) | (2,089,981 | ) | $(20,737,067 | ) | (2,432,578 | ) | $(22,865,321 | ) | |||||||||
| Net change | ||||||||||||||||||||||||
Class A | 4,972,740 | $57,858,687 | 2,065,218 | $23,100,270 | 2,321,013 | $22,991,538 | 1,115,831 | $11,096,765 | ||||||||||||||||
Class B | (256,562 | ) | (2,971,531 | ) | (659,920 | ) | (7,235,505 | ) | (336,632 | ) | (3,328,882 | ) | (495,224 | ) | (4,654,587 | ) | ||||||||
Class C | 2,517,068 | 29,243,075 | 672,358 | 7,534,006 | N/A | N/A | N/A | N/A | ||||||||||||||||
| 7,233,246 | $84,130,231 | 2,077,656 | $23,398,771 | 1,984,381 | $19,662,656 | 620,607 | $6,442,178 | |||||||||||||||||
| South Carolina Fund | Tennessee Fund | |||||||||||||||||||||||
| Year ended 3/31/10 | Year ended 3/31/09 | Year ended 3/31/10 | Year ended 3/31/09 | |||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||
| Shares sold | ||||||||||||||||||||||||
Class A | 3,542,596 | $42,226,725 | 1,709,495 | $19,609,452 | 1,939,406 | $19,870,585 | 2,025,258 | $20,398,645 | ||||||||||||||||
Class B | 128,368 | 1,525,721 | 79,956 | 914,714 | 50,438 | 515,538 | 35,001 | 352,101 | ||||||||||||||||
| 3,670,964 | $43,752,446 | 1,789,451 | $20,524,166 | 1,989,844 | $20,386,123 | 2,060,259 | $20,750,746 | |||||||||||||||||
| Shares issued to shareholders in reinvestment of distributions | ||||||||||||||||||||||||
Class A | 334,486 | $3,976,407 | 343,942 | $3,921,434 | 298,462 | $3,068,188 | 294,698 | $2,895,444 | ||||||||||||||||
Class B | 20,397 | 241,886 | 32,441 | 370,528 | 13,526 | 138,608 | 24,067 | 236,695 | ||||||||||||||||
| 354,883 | $4,218,293 | 376,383 | $4,291,962 | 311,988 | $3,206,796 | 318,765 | $3,132,139 | |||||||||||||||||
| Shares reacquired | ||||||||||||||||||||||||
Class A | (1,602,298 | ) | $(18,976,354 | ) | (1,969,700 | ) | $(22,257,054 | ) | (1,204,746 | ) | $(12,379,782 | ) | (1,124,237 | ) | $(11,044,208 | ) | ||||||||
Class B | (392,313 | ) | (4,654,199 | ) | (393,238 | ) | (4,459,741 | ) | (400,637 | ) | (4,110,121 | ) | (224,756 | ) | (2,222,626 | ) | ||||||||
| (1,994,611 | ) | $(23,630,553 | ) | (2,362,938 | ) | $(26,716,795 | ) | (1,605,383 | ) | $(16,489,903 | ) | (1,348,993 | ) | $(13,266,834 | ) | |||||||||
| Net change | ||||||||||||||||||||||||
Class A | 2,274,784 | $27,226,778 | 83,737 | $1,273,832 | 1,033,122 | $10,558,991 | 1,195,719 | $12,249,881 | ||||||||||||||||
Class B | (243,548 | ) | (2,886,592 | ) | (280,841 | ) | (3,174,499 | ) | (336,673 | ) | (3,455,975 | ) | (165,688 | ) | (1,633,830 | ) | ||||||||
| 2,031,236 | $24,340,186 | (197,104 | ) | $(1,900,667 | ) | 696,449 | $7,103,016 | 1,030,031 | $10,616,051 | |||||||||||||||
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| Virginia Fund | West Virginia Fund | |||||||||||||||||||||||
| Year ended 3/31/10 | Year ended 3/31/09 | Year ended 3/31/10 | Year ended 3/31/09 | |||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||
| Shares sold | ||||||||||||||||||||||||
Class A | 4,521,562 | $50,128,310 | 3,378,129 | $36,115,112 | 1,518,764 | $16,334,361 | 1,046,303 | $10,977,407 | ||||||||||||||||
Class B | 131,816 | 1,464,013 | 70,738 | 749,818 | 24,025 | 259,525 | 53,442 | 572,144 | ||||||||||||||||
Class C | 964,987 | 10,671,853 | 703,885 | 7,568,008 | N/A | N/A | N/A | N/A | ||||||||||||||||
| 5,618,365 | $62,264,176 | 4,152,752 | $44,432,938 | 1,542,789 | $16,593,886 | 1,099,745 | $11,549,551 | |||||||||||||||||
Shares issued to shareholders in reinvestment of distributions | ||||||||||||||||||||||||
Class A | 658,394 | $7,297,289 | 795,995 | $8,385,410 | 307,780 | $3,336,380 | 394,443 | $4,115,384 | ||||||||||||||||
Class B | 13,458 | 149,019 | 22,722 | 239,503 | 9,772 | 105,655 | 20,322 | 211,684 | ||||||||||||||||
Class C | 48,425 | 537,059 | 53,132 | 557,656 | N/A | N/A | N/A | N/A | ||||||||||||||||
| 720,277 | $7,983,367 | 871,849 | $9,182,569 | 317,552 | $3,442,035 | 414,765 | $4,327,068 | |||||||||||||||||
Shares reacquired | ||||||||||||||||||||||||
Class A | (2,371,571 | ) | $(26,298,904 | ) | (3,291,991 | ) | $(34,813,504 | ) | (940,051 | ) | $(10,189,172 | ) | (1,533,750 | ) | $(16,196,226 | ) | ||||||||
Class B | (264,161 | ) | (2,911,329 | ) | (289,865 | ) | (3,017,909 | ) | (234,321 | ) | (2,525,089 | ) | (185,918 | ) | (1,944,481 | ) | ||||||||
Class C | (248,243 | ) | (2,735,726 | ) | (248,731 | ) | (2,589,861 | ) | N/A | N/A | N/A | N/A | ||||||||||||
| (2,883,975 | ) | $(31,945,959 | ) | (3,830,587 | ) | $(40,421,274 | ) | (1,174,372 | ) | $(12,714,261 | ) | (1,719,668 | ) | $(18,140,707 | ) | |||||||||
Net change | ||||||||||||||||||||||||
Class A | 2,808,385 | $31,126,695 | 882,133 | $9,687,018 | 886,493 | $9,481,569 | (93,004 | ) | $(1,103,435 | ) | ||||||||||||||
Class B | (118,887 | ) | (1,298,297 | ) | (196,405 | ) | (2,028,588 | ) | (200,524 | ) | (2,159,909 | ) | (112,154 | ) | (1,160,653 | ) | ||||||||
Class C | 765,169 | 8,473,186 | 508,286 | 5,535,803 | N/A | N/A | N/A | N/A | ||||||||||||||||
| 3,454,667 | $38,301,584 | 1,194,014 | $13,194,233 | 685,969 | $7,321,660 | (205,158 | ) | $(2,264,088 | ) | |||||||||||||||
| (6) | Line of Credit |
Each fund and certain other funds managed by MFS participate in a $1.1 billion unsecured committed line of credit, subject to a $1 billion sublimit, provided by a syndication 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 higher of the Federal Reserve funds rate or one month LIBOR 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 at the end of each calendar quarter. In addition, each 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 a rate equal to the Federal Reserve funds rate plus an agreed upon spread. For the year ended March 31, 2010, each fund’s commitment fee and interest expense were as follows, and are included in miscellaneous expense on the Statements of Operations:
| Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | |||||||||
| Commitment Fee | $1,799 | $3,904 | $6,448 | $2,068 | $2,669 | $2,190 | $5,371 | $2,316 | ||||||||
| Interest Expense | — | — | — | — | — | — | — | — |
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Notes to Financial Statements – continued
| (7) | Transactions in Underlying Funds-Affiliated Issuers |
An affiliated issuer may be considered one in which each fund owns 5% or more of the outstanding voting securities, or a company which is under common control. For the purposes of this report, each fund assumes the MFS Institutional Money Market Portfolio to be an affiliated issuer. Each fund’s transactions in the MFS Institutional Money Market Portfolio for the year ended March 31, 2010, are as follows:
| Underlying Funds – MFS® Institutional Money Market Portfolio | ||||||||
| Beginning Share / Par Amount | Acquisitions Share / Par Amount | Dispositions Share / Par Amount | Ending Share / Par Amount | |||||
Mississippi Fund | 2,078,862 | 25,200,271 | (25,661,272) | 1,617,861 | ||||
New York Fund | 6,943,829 | 62,538,105 | (67,684,235) | 1,797,699 | ||||
North Carolina Fund | 7,145,386 | 108,717,722 | (109,450,762) | 6,412,346 | ||||
Pennsylvania Fund | 2,386,723 | 31,365,298 | (30,910,546) | 2,841,475 | ||||
South Carolina Fund | 1,723,307 | 43,435,731 | (37,414,174) | 7,744,864 | ||||
Tennessee Fund | 2,986,324 | 33,899,807 | (34,635,985) | 2,250,146 | ||||
Virginia Fund | 3,256,944 | 72,836,611 | (72,442,413) | 3,651,142 | ||||
West Virginia Fund | 2,773,553 | 25,498,241 | (27,476,171) | 795,623 | ||||
| Realized Gain (Loss) | Capital Gain Distributions | Dividend Income | Ending Value | |||||
Mississippi Fund | $— | $— | $3,986 | $1,617,861 | ||||
New York Fund | — | — | 9,451 | 1,797,699 | ||||
North Carolina Fund | — | — | 20,477 | 6,412,346 | ||||
Pennsylvania Fund | — | — | 5,339 | 2,841,475 | ||||
South Carolina Fund | — | — | 7,652 | 7,744,864 | ||||
Tennessee Fund | — | — | 5,126 | 2,250,146 | ||||
Virginia Fund | — | — | 13,801 | 3,651,142 | ||||
West Virginia Fund | — | — | 5,993 | 795,623 | ||||
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees and the Shareholders of MFS Municipal Series Trust:
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of MFS Mississippi Municipal Bond Fund, MFS New York Municipal Bond Fund, MFS North Carolina Municipal Bond Fund, MFS Pennsylvania Municipal Bond Fund, MFS South Carolina Municipal Bond Fund, MFS Tennessee Municipal Bond Fund, MFS Virginia Municipal Bond Fund and MFS West Virginia Municipal Bond Fund (the “Funds”) (each a portfolio comprising MFS Municipal Series Trust) as of March 31, 2010, and the related statements 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, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of March 31, 2010, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the funds constituting MFS Municipal Series Trust as of March 31, 2010, the results of their operations for the year then ended, the changes in their 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.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
May 17, 2010
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RESULTS OF SHAREHOLDER MEETING
(unaudited)
At a special meeting of shareholders of the MFS Municipal Series Trust, which was held on January 28, 2010, the following actions were taken:
Item 1. To elect the following individuals as Trustees:
| Number of Dollars | ||||
Nominee | For | Withheld Authority | ||
| Robert E. Butler | 3,148,608,458.797 | 48,724,942.416 | ||
| Lawrence H. Cohn, M.D. | 3,139,197,940.941 | 58,135,460.722 | ||
| Maureen R. Goldfarb | 3,148,250,189.942 | 49,083,211.271 | ||
| David H. Gunning | 3,148,075,995.013 | 49,257,406.201 | ||
| William R. Gutow | 3,146,872,731.240 | 50,460,669.973 | ||
| Michael Hegarty | 3,149,134,569.376 | 48,198,831.838 | ||
| John P. Kavanaugh | 3,149,053,580.903 | 48,279,820.310 | ||
| Robert J. Manning | 3,148,783,841.981 | 48,549,559.232 | ||
| Robert C. Pozen | 3,149,246,365.076 | 48,087,036.137 | ||
| J. Dale Sherratt | 3,140,538,059.148 | 56,795,342.065 | ||
| Laurie J. Thomsen | 3,149,279,115.090 | 48,054,286.123 | ||
| Robert W. Uek | 3,146,034,726.805 | 51,298,674.408 | ||
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TRUSTEES AND OFFICERS — IDENTIFICATION AND BACKGROUND
The Trustees and officers of the Trust, as of May 1, 2010, 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 500 Boylston Street, Boston, Massachusetts 02116.
Name, Date of Birth | Position(s) Held with Fund | Trustee/Officer Since (h) | Principal Occupations During the Past Five Years & | |||
| INTERESTED TRUSTEES | ||||||
Robert J. Manning (k) (born 10/20/63) | Trustee | February 2004 | Massachusetts Financial Services Company, Chief Executive Officer, Chief Investment Officer and Director, President (until December 2009) | |||
Robert C. Pozen (k) (born 8/08/46) | Trustee | February 2004 | Massachusetts Financial Services Company, Chairman (since February 2004); Medtronic, Inc, (medical devices), Director (since 2004); Harvard Business School (education), Senior Lecturer (since 2008); Bell Canada Enterprises (telecommunications), Director (until February 2009); The Bank of New York, Director (finance), (March 2004 to May 2005); Telesat (satellite communications), Director (until November 2007) | |||
| INDEPENDENT TRUSTEES | ||||||
David H. Gunning (born 5/30/42) | Trustee and Chair of Trustees | January 2004 | Retired; Cleveland-Cliffs Inc. (mining products and service provider), Vice Chairman/Director (until May 2007); Lincoln Electric Holdings, Inc. (welding equipment manufacturer), Director; Development Alternatives, Inc. (consulting), Director/Non Executive Chairman; Southwest Gas Corp. (natural gas distribution), Director (until May 2004); Portman Limited (mining), Director (until 2008) | |||
Robert E. Butler (n) (born 11/29/41) | Trustee | January 2006 | Consultant – investment company industry regulatory and compliance matters (since July 2002); PricewaterhouseCoopers LLP (professional services firm), Partner (until 2002) | |||
| Lawrence H. Cohn, M.D. (born 3/11/37) | Trustee | June 1989 | Brigham and Women’s Hospital, Senior Cardiac Surgeon (since 2005); Harvard Medical School, Professor of Cardiac Surgery; Partners HealthCare, Physician Director of Medical Device Technology (since 2006); Brigham and Women’s Hospital, Chief of Cardiac Surgery (until 2005) | |||
Maureen R. Goldfarb (born 4/6/55) | Trustee | January 2009 | Private investor; John Hancock Financial Services, Inc., Executive Vice President (until 2004); John Hancock Mutual Funds, Trustee and Chief Executive Officer (until 2004) | |||
William R. Gutow (born 9/27/41) | Trustee | December 1993 | Private investor and real estate consultant ; Capital Entertainment Management Company (video franchise), Vice Chairman; Atlantic Coast Tan (tanning salons), Vice Chairman (until 2007); Texas Donuts (donut franchise), Vice Chairman (until 2009) | |||
Michael Hegarty (born 12/21/44) | Trustee | December 2004 | Private investor; AXA Financial (financial services and insurance), Vice Chairman and Chief Operating Officer (until 2001); The Equitable Life Assurance Society (insurance), President and Chief Operating Officer (until 2001) | |||
John P. Kavanaugh (born 11/4/54) | Trustee | January 2009 | Private investor; The Hanover Insurance Group, Inc., Vice President and Chief Investment Officer (until 2006); Allmerica Investment Trust, Allmerica Securities Trust and Opus Investment Trust (investment companies), Chairman, President and Trustee (until 2006) | |||
J. Dale Sherratt (born 9/23/38) | Trustee | June 1989 | Insight Resources, Inc. (acquisition planning specialists), President; Wellfleet Investments (investor in health care companies), Managing General Partner | |||
Laurie J. Thomsen (born 8/05/57) | Trustee | March 2005 | New Profit, Inc. (venture philanthropy), Executive Partner (since 2006); Private investor; The Travelers Companies (commercial property liability insurance), Director; Prism Venture Partners (venture capital), Co-founder and General Partner (until June 2004) | |||
Robert W. Uek (born 5/18/41) | Trustee | January 2006 | Consultant to investment company industry; PricewaterhouseCoopers LLP (professional services firm), Partner (until 1999); TT International Funds (mutual fund complex), Trustee (until 2005); Hillview Investment Trust II Funds (mutual fund complex), Trustee (until 2005) | |||
| OFFICERS | ||||||
Maria F. Dwyer (k) (born 12/01/58) | President | March 2004 | Massachusetts Financial Services Company, Executive Vice President and Chief Regulatory Officer (since March 2004) Chief Compliance Officer (since December 2006); Fidelity Management & Research Company, Vice President (prior to March 2004); Fidelity Group of Funds, President and Treasurer (until March 2004) | |||
| Christopher R. Bohane (k) (born 1/18/74) | Assistant Secretary and Assistant Clerk | July 2005 | Massachusetts Financial Services Company, Vice President and Senior Counsel | |||
John M. Corcoran (k) (born 4/13/65) | Treasurer | October 2008 | Massachusetts Financial Services Company, Senior Vice President (since October 2008); State Street Bank and Trust (financial services provider), Senior Vice President, (until September 2008) | |||
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Name, Date of Birth | Position(s) Held with Fund | Trustee/Officer Since (h) | Principal Occupations During the Past Five Years & | |||
Ethan D. Corey (k) (born 11/21/63) | Assistant Secretary and Assistant Clerk | July 2005 | Massachusetts Financial Services Company, Senior Vice President and Associate General Counsel (since 2004); Dechert LLP (law firm), Counsel (prior to December 2004) | |||
David L. DiLorenzo (k) (born 8/10/68) | Assistant Treasurer | July 2005 | Massachusetts Financial Services Company, Vice President (since June 2005); JP Morgan Investor Services, Vice President (until June 2005) | |||
Timothy M. Fagan (k) (born 7/10/68) | Assistant Secretary and Assistant Clerk | September 2005 | Massachusetts Financial Services Company, Vice President and Senior Counsel (since September 2005); John Hancock Advisers, LLC, Vice President, Senior Attorney and Chief Compliance Officer (until August 2005) | |||
Mark D. Fischer (k) (born 10/27/70) | Assistant Treasurer | July 2005 | Massachusetts Financial Services Company, Vice President (since May 2005); JP Morgan Investment Management Company, Vice President (until May 2005) | |||
Robyn L. Griffin (born 7/04/75) | Assistant Independent Chief Compliance Officer | August 2008 | Griffin Compliance LLC (provider of compliance services), Principal (since August 2008); State Street Corporation (financial services provider), Mutual Fund Administration Assistant Vice President (October 2006-July 2008); Liberty Mutual Group (insurance), Personal Market Assistant Controller (April 2006-October 2006); Deloitte & Touche LLP (professional services firm), Senior Manager (prior to April 2006) | |||
Brian E. Langenfeld (k) (born 3/07/73) | Assistant Secretary and Assistant Clerk | June 2006 | Massachusetts Financial Services Company, Vice President and Senior Counsel (since May 2006); John Hancock Advisers, LLC, Assistant Vice President and Counsel (until April 2006) | |||
Ellen Moynihan (k) (born 11/13/57) | Assistant Treasurer | April 1997 | Massachusetts Financial Services Company, Senior Vice President | |||
Susan S. Newton (k) (born 3/07/50) | Assistant Secretary and Assistant Clerk | May 2005 | Massachusetts Financial Services Company, Senior Vice President and Associate General Counsel (since April 2005); John Hancock Advisers, LLC, Senior Vice President, Secretary and Chief Legal Officer (until April 2005) | |||
Susan A. Pereira (k) (born 11/05/70) | Assistant Secretary and Assistant Clerk | July 2005 | Massachusetts Financial Services Company, Vice President and Senior Counsel (since June 2004); Bingham McCutchen LLP (law firm), Associate (until June 2004) | |||
Mark N. Polebaum (k) (born 5/01/52) | Secretary and Clerk | January 2006 | Massachusetts Financial Services Company, Executive Vice President, General Counsel and Secretary (since January 2006); Wilmer Cutler Pickering Hale and Dorr LLP (law firm), Partner (until January 2006) | |||
Frank L. Tarantino (born 3/07/44) | Independent Chief Compliance Officer | June 2004 | Tarantino LLC (provider of compliance services), Principal (since June 2004); CRA Business Strategies Group (consulting services), Executive Vice President (until June 2004) | |||
Richard S. Weitzel (k) (born 7/16/70) | Assistant Secretary and Assistant Clerk | October 2007 | Massachusetts Financial Services Company, Vice President and Assistant General Counsel (since 2004); Massachusetts Department of Business and Technology, General Counsel (until April 2004) | |||
James O. Yost (k) (born 6/12/60) | Assistant Treasurer | September 1990 | 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. For the period from December 15, 2004 until February 22, 2005, Messrs. Pozen and Manning served as Advisory Trustees. For the period March 2008 until October 2008, Ms. Dwyer served as Treasurer of the Funds. |
| (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 position with MFS. The address of MFS is 500 Boylston Street, Boston, Massachusetts 02116. |
| (n) | In 2004 and 2005, Mr. Butler provided consulting services to the independent compliance consultant retained by MFS pursuant to its settlement with the SEC concerning market timing and related matters. The terms of that settlement required that compensation and expenses related to the independent compliance consultant be borne exclusively by MFS and, therefore, MFS paid Mr. Butler for the services he rendered to the independent compliance consultant. In 2004 and 2005, MFS paid Mr. Butler a total of $351,119.29. |
Each Trustee 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. The Trust does not hold annual meetings for the purpose of electing Trustees, and Trustees are not elected for fixed terms. 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. Messrs. Butler, Kavanaugh, Sherratt, Uek and Ms. Thomsen are members of the Trust’s Audit Committee.
Each of the Fund’s Trustees and officers holds comparable positions with certain other funds of which MFS or a subsidiary is the investment adviser or distributor, and, in the case of the officers, with certain affiliates of MFS. As of January 1, 2010, the Trustees served as board members of 99 funds within the MFS Family of Funds.
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The Statement of Additional Information for the Fund and further information about the Trustees are available without charge upon request by calling 1-800-225-2606.
Investment Adviser Massachusetts Financial Services Company 500 Boylston Street, Boston, MA 02116-3741 Distributor MFS Fund Distributors, Inc. 500 Boylston Street, Boston, MA 02116-3741 Portfolio Manager Michael Dawson | Custodian JPMorgan Chase Bank One Chase Manhattan Plaza, New York, NY 10081
Independent Registered Public Deloitte & Touche LLP 200 Berkeley Street, Boston, MA 02116 |
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BOARD REVIEW OF INVESTMENT ADVISORY AGREEMENT
A discussion regarding the Board’s most recent review and renewal of each fund’s Investment Advisory Agreement with MFS is available by clicking on the fund’s name under “Mutual Funds” in the “Products and Performance” section of the MFS Web site (mfs.com).
PROXY VOTING POLICIES AND INFORMATION
A general description of the MFS funds’ proxy voting policies and procedures is available without charge, upon request, by calling 1-800-225-2606, by visiting the Proxy Voting section of mfs.com or by visiting the SEC’s Web site at http://www.sec.gov.
Information regarding how each fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is available without charge by visiting the Proxy Voting section of mfs.com or by visiting the SEC’s Web site at http://www.sec.gov.
QUARTERLY PORTFOLIO DISCLOSURE
Each fund will file a complete schedule of portfolio holdings with the Securities and Exchange Commission (the Commission) for the first and third quarters of each fiscal year on Form N-Q. Each fund’s Form N-Q may be reviewed and copied at the:
Public Reference Room
Securities and Exchange Commission
100 F Street, NE, Room 1580
Washington, D.C. 20549
Information on the operation of the Public Reference Room may be obtained by calling the Commission at 1-800-SEC-0330. Each fund’s Form N-Q is available on the EDGAR database on the Commission’s Internet Web site at http://www.sec.gov, and copies of this information may be obtained, upon payment of a duplicating fee, by electronic request at the following e-mail address: publicinfo@sec.gov or by writing the Public Reference Section at the above address.
A shareholder can also obtain the quarterly portfolio holdings report at mfs.com.
From time to time, MFS may post important information about a fund or the MFS funds on the MFS web site (mfs.com). This information is available by visiting the “News & Commentary” section of mfs.com or by clicking on the fund’s name under “Mutual Funds” in the “Products and Performance” section of mfs.com.
FEDERAL TAX INFORMATION (unaudited)
The funds will notify shareholders of amounts for use in preparing 2010 income tax forms in January 2011. The following information is provided pursuant to provisions of the Internal Revenue Code.
The funds below designate the following amounts as capital gain dividends paid during the fiscal year.
| Capital Gains | ||
| Mississippi Fund | $41,000 | |
| New York Fund | 355,000 | |
| North Carolina Fund | 325,000 | |
| South Carolina Fund | 170,000 | |
| Tennessee Fund | 218,000 | |
| West Virginia Fund | 58,000 |
Of the dividends paid from net investment income during the fiscal year, the following percentages were designated as exempt interest dividends for federal income tax purposes. If a fund has earned income on private activity bonds, a portion of the dividends paid may be considered a tax preference item for purposes of computing a shareholder’s alternative minimum tax.
| Exempt Interest Dividends | ||
| Mississippi Fund | 100.00% | |
| New York Fund | 100.00% | |
| North Carolina Fund | 100.00% | |
| Pennsylvania Fund | 100.00% | |
| South Carolina Fund | 100.00% | |
| Tennessee Fund | 100.00% | |
| Virginia Fund | 100.00% | |
| West Virginia Fund | 100.00% |
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Privacy is a concern for every investor today. At MFS Investment Management® and the MFS funds, we take this concern very seriously. We want you to understand our policies about the investment products and services that we offer, and how we protect the nonpublic personal information of investors who have a direct relationship with us and our wholly owned subsidiaries.
Throughout our business relationship, you provide us with personal information. We maintain information and records about you, your investments, and the services you use. Examples of the nonpublic personal information we maintain include
| Ÿ | data from investment applications and other forms |
| Ÿ | share balances and transactional history with us, our affiliates, or others |
| Ÿ | facts from a consumer reporting agency |
We do not disclose any nonpublic personal information about our customers or former customers to anyone, except as permitted by law. We may share nonpublic personal information with third parties or certain of our affiliates in connection with servicing your account or processing your transactions. We may share information with companies or financial institutions that perform marketing services on our behalf or with other financial institutions with which we have joint marketing arrangements, subject to any legal requirements.
Authorization to access your nonpublic personal information is limited to appropriate personnel who provide products, services, or information to you. We maintain physical, electronic, and procedural safeguards to help protect the personal information we collect about you.
If you have any questions about the MFS privacy policy, please call 1-800-225-2606 any business day.
Note: If you own MFS products or receive MFS services 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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CONTACT US
Web site
mfs.com
MFS TALK
1-800-637-8255
24 hours a day
Account service and
literature
Shareholders
1-800-225-2606
Investment professionals
1-800-343-2829
Retirement plan services
1-800-637-1255
Mailing address
MFS Service Center, Inc.
P.O. Box 55824
Boston, MA 02205-5824
Overnight mail
MFS Service Center, Inc.
c/o Boston Financial Data Services
30 Dan Road
Canton, MA 02021-2809
Save paper with eDelivery. MFS® will send you prospectuses, reports, and proxies directly via e-mail so you will get information faster with less mailbox clutter. To sign up: 1. go to mfs.com. 2. log in via MFS® Access. 3. select eDelivery. If you own your MFS fund shares through a financial institution or a retirement plan, MFS® TALK, MFS Access, and eDelivery may not be available to you.
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SIPC Contact Information:
You may obtain information about the Securities Investor Protection Corporation (“SIPC”), including the SIPC Brochure, by contacting SIPC either by telephone (202-371-8300) or by accessing SIPC’s website address (www.sipc.org).
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 Ÿ MAY LOSE VALUE Ÿ
NO BANK GUARANTEE
3/31/10
LMB-ANN
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Dear Shareholders:
After having suffered their biggest declines since the Great Depression, most global markets experienced an impressive resurgence during the latter months of 2009 and the first quarter of 2010. The global economy was able to reap the benefits of two major trends. The first of these was the massive efforts of governments and central banks to increase liquidity in the financial system as they sought to prevent the credit crisis from further affecting the banking system. The second was the move by companies around the world to cut costs and operations to prepare for rapidly changing market conditions. We believe that these moves not only shortened the length of the downturn but also set the stage for the recovery we are seeing today.
Even with the significant market gains of 2009 and the early part of 2010, the recovery is unrolling at a moderate pace, with rebounds in the manufacturing sector and corporate America leading the way. Central bankers are proceeding with caution and have held benchmark interest rates unchanged as they debate the best way to withdraw stimulus measures without disrupting the fragile growth process.
While hurdles remain, we believe that the global economy is on the road to recovery. As always, we continue to be mindful of the many challenges faced at the individual, national, and international levels. It is at times such as these that we want to remind investors of the merits of maintaining a long-term view, adhering to basic investing principles such as asset allocation and diversification, and working closely with advisors to identify and research investment opportunities. At MFS®, we take particular pride in how well mutual funds can help investors by providing the diversification that is important in any type of market climate.
Respectfully,
Robert J. Manning
Chief Executive Officer and Chief Investment Officer
MFS Investment Management®
May 17, 2010
The opinions expressed in this letter are subject to change, may not be relied upon for investment advice, and no forecasts can be guaranteed.
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Portfolio structure (i)
| Top five industries (i) | ||
| Healthcare Revenue – Hospitals | 25.7% | |
| Universities – Colleges | 11.7% | |
| State & Local Agencies | 8.2% | |
| General Obligations – Schools | 6.7% | |
| Utilities – Municipal Owned | 6.7% |
| Credit quality (a)(i) | ||
| AAA | 14.0% | |
| AA | 25.0% | |
| A | 24.3% | |
| BBB | 29.9% | |
| BB | 2.8% | |
| B | 1.1% | |
| CCC | 0.5% | |
| C (o) | 0.0% | |
| D (o) | 0.0% | |
| Other | 2.4% | |
| Portfolio facts (i) | ||
| Average Duration (d) | 9.1 | |
| Average Effective Maturity (m) | 17.9 yrs. | |
| (a) | Included in the rating categories are: debt securities, primary inverse floaters, and the underlying bonds of non-primary inverse floaters which have long-term public ratings; All rated securities are assigned a rating in accordance with the following ratings hierarchy: If a security is rated by Moody’s, then that rating is used; if not rated by Moody’s, then a Standard & Poor’s rating is used; if not rated by S&P, then a Fitch rating is used. Ratings are shown in the S&P scale and are subject to change. Assets not included in the rated securities categories are included in the “Other” category and include treasury bond futures, unrated securities, cash and cash equivalents. |
| (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. |
| (i) | For purposes of this presentation, the components include the market value of securities, and reflect the impact of the equivalent exposure of derivative positions, if applicable. These amounts may be negative from time to time. The bond component will include any accrued interest amounts, if applicable. 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 market value. |
| (m) | In determining an 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%. |
From time to time “Cash & Other Net Assets” may be negative due to the timing of cash receipts and/or equivalent exposure from any derivative holdings.
Percentages are based on net assets as of 3/31/10, unless otherwise noted.
The portfolio is actively managed and current holdings may be different.
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Summary of Results
For the twelve months ended March 31, 2010, Class A shares of the MFS Municipal Income Fund (the “fund”) provided a total return of 14.01%, at net asset value. This compares with a return of 9.69% for the fund’s benchmark, the Barclays Capital Municipal Bond Index.
Market Environment
After having suffered through one of the largest and most concentrated downturns since the 1930s, most asset markets staged a remarkable rebound during the reporting period. Just prior to the beginning of the period, the fallout from a series of tumultuous financial events pushed global equity and credit markets to their lowest points during the crisis. Not only did Europe and Japan fall into very deep recessions, but an increasingly powerful engine of global growth – emerging markets – also contracted almost across the board. The subsequent recovery in global activity has been similarly synchronized, led importantly by emerging Asian economies, but broadening to include most of the global economy to varying degrees. Primary drivers of the recovery included an unwinding of the inventory destocking that took place earlier, as well as massive fiscal and monetary stimulus.
During the early part of the reporting period, with the policy rate having been cut almost to 0%, the Fed continued to use its new lending facilities to alleviate ever-tightening credit markets. On the fiscal front, the U.S. Treasury designed and began implementing a massive fiscal stimulus package. As inflationary concerns diminished in the face of global deleveraging and equity and credit markets deteriorated more sharply, central banks around the world also cut interest rates dramatically. Early in the period, as several central banks had already approached their lower bound on policy rates, some central banks were implementing quantitative easing as a means to further loosen monetary policy to offset the continuing fall in global economic activity.
However, by the middle of the period, there were ever-broadening signs that the global macroeconomic deterioration had passed, which caused the subsequent rise in asset valuations. As most asset prices rebounded during the period and the demand for liquidity waned, the debate concerning the existence of asset bubbles and the need for monetary exit strategies had begun, creating added uncertainty regarding the forward path of policy rates. Nonetheless, risky-asset valuation generally hit secular highs by the end of the period.
The municipal bond market ended this twelve month period substantially stronger than where it began with high-grade and high-yield bond index prices sharply higher over the previous year. With low money market yields, mutual
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Management Review – continued
fund inflows were strong and consistent. Additionally, the Build America Bond program gained significant traction and effectively reduced new issue supply of municipals.
At the end of March, 2009, yields on AAA-rated municipals were 137% of comparable maturity U.S. Treasury yields. While well off from its highs of over 200%, this ratio rallied further throughout the trailing twelve months settling at 89% on March 31, 2010. Additionally, spreads between high-grade municipals and high-yield municipals continued to tighten throughout the year. The highest returns were generally in the lower-rated securities as investors looked broadly to add risk with little opportunity to execute that strategy in the primary market due to limited high yield supply.
Factors Affecting Performance
Allocation of credit quality played a major role in the fund’s positive performance relative to the Barclays Capital Municipal Bond Index. The fund’s overweighted position in “BBB” rated (r) securities provided a boost to excess returns as this credit sector performed exceptionally well compared with the performance of the benchmark. Our greater exposure to the strong-performing health care and industrial sectors also aided relative results.
Bond selection, particularly in bonds rated “B” or lower as well as bonds within the health care, industrial, utilities, and education sectors, was another key factor contributing to the fund’s strong relative performance. High-yield municipal bonds delivered strong performance over the reporting period as new issuance for these bonds remained low and large inflows of funds into the high-yield municipal space pushed demand higher.
On the negative side, the fund’s shorter duration positioning in bonds with maturities between 8 to 11 years held back relative performance as these bonds typically outperformed the overall index over the reporting period.
On the negative side, the fund’s underweighted position in bonds with durations between 8 to 11 years held back relative performance as these bonds typically outperformed the overall index over the reporting period.
Respectfully,
Geoffrey Schechter
Portfolio Manager
| (r) | Bonds rated “BBB”, “Baa”, or higher are considered investment grade; bonds rated “BB”, “Ba”, or below are considered non-investment grade. The primary source for bond quality ratings is Moody’s Investors Service. If not available, ratings by Standard & Poor’s are used, else ratings by Fitch, Inc. For securities which are not rated by any of the three agencies, the security is considered Not Rated. |
The views expressed in this report are those of the portfolio manager 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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PERFORMANCE SUMMARY THROUGH 3/31/10
The following chart illustrates a representative class of the fund’s historical performance in comparison to its benchmark(s). Performance results include the deduction of the maximum applicable sales charge and reflect the percentage change in net asset value, including reinvestment of dividends and capital gains distributions. The performance of other share classes will be greater than or less than that of the class depicted below. Benchmarks are unmanaged and may not be invested in directly. Benchmark returns do not reflect sales charges, commissions or expenses. (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.
Growth of a Hypothetical $10,000 Investment
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Performance Summary – continued
Total Returns through 3/31/10
Average annual without sales charge
| Share class | Class inception date | 1-yr | 5-yr | 10-yr | Life (t) | |||||||||
| A | 9/07/93 | 14.01% | 4.36% | 5.19% | N/A | |||||||||
| B | 12/29/86 | 13.15% | 3.61% | 4.42% | N/A | |||||||||
| C | 1/03/94 | 13.13% | 3.59% | 4.41% | N/A | |||||||||
| A1 | 6/25/07 | 14.28% | N/A | N/A | 5.18% | |||||||||
| B1 | 6/25/07 | 13.56% | N/A | N/A | 4.38% | |||||||||
| Comparative benchmarks | ||||||||||||||
| Barclays Capital Municipal Bond Index (f) | 9.69% | 4.58% | 5.58% | N/A | ||||||||||
| Average annual with sales charge | ||||||||||||||
| A With Initial Sales Charge (4.75%) | 8.59% | 3.35% | 4.68% | N/A | ||||||||||
| B With CDSC (Declining over six years from 4% to 0%) (x) | 9.15% | 3.27% | 4.42% | N/A | ||||||||||
| C With CDSC (1% for 12 months) (x) | 12.13% | 3.59% | 4.41% | N/A | ||||||||||
| A1 With Initial Sales Charge (4.75%) | 8.85% | N/A | N/A | 3.35% | ||||||||||
| B1 With CDSC (Declining over six years from 4% to 0%) (x) | 9.56% | N/A | N/A | 3.38% | ||||||||||
CDSC – Contingent Deferred Sales Charge.
| (f) | Source: FactSet Research Systems Inc. |
| (t) | For the period from the class inception date through the stated period end (for those share classes with less than 10 years of performance history). No comparative benchmark performance information is provided for “life” periods. (See Notes to Performance Summary.) |
| (x) | Assuming redemption at the end of the applicable period. |
Benchmark Definition
Barclays Capital Municipal Bond Index – a market capitalization-weighted index that measures the performance of the tax-exempt bond market.
It is not possible to invest directly in an index.
Notes to Performance Summary
Average annual total return represents the average annual change in value for each share class for the periods presented. Life returns are presented where the share class has less than 10 years of performance history and represent the average annual total return from the class inception date to the stated period end date. As the fund’s share classes may have different inception dates, the
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Performance Summary – continued
life returns may represent different time periods and may not be comparable. As a result, no comparative benchmark performance information is provided for life periods.
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.
A portion of income may be subject to state, federal, and/or alternative minimum tax. Capital gains, if any, are subject to a capital gains tax.
From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
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Fund expenses borne by the shareholders during the period,
October 1, 2009 through March 31, 2010
As a shareholder of the fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on certain purchase or redemption payments, and (2) ongoing costs, including management fees; distribution and 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 October 1, 2009 through March 31, 2010.
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 your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads). Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
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Expense Table – continued
| Share Class | Annualized Expense Ratio | Beginning Account Value 10/01/09 | Ending Account Value 3/31/10 | Expenses Paid During Period (p) 10/01/09-3/31/10 | ||||||
| A | Actual | 0.77% | $1,000.00 | $1,008.38 | $3.86 | |||||
| Hypothetical (h) | 0.77% | $1,000.00 | $1,021.09 | $3.88 | ||||||
| B | Actual | 1.52% | $1,000.00 | $1,005.83 | $7.60 | |||||
| Hypothetical (h) | 1.52% | $1,000.00 | $1,017.35 | $7.64 | ||||||
| C | Actual | 1.52% | $1,000.00 | $1,004.66 | $7.60 | |||||
| Hypothetical (h) | 1.52% | $1,000.00 | $1,017.35 | $7.64 | ||||||
| A1 | Actual | 0.52% | $1,000.00 | $1,009.64 | $2.61 | |||||
| Hypothetical (h) | 0.52% | $1,000.00 | $1,022.34 | $2.62 | ||||||
| B1 | Actual | 1.29% | $1,000.00 | $1,007.03 | $6.45 | |||||
| Hypothetical (h) | 1.29% | $1,000.00 | $1,018.50 | $6.49 |
| (h) | 5% class return per year before expenses. |
| (p) | Expenses paid is equal to each class’ annualized expense ratio, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the period, divided by the number of days in the year. Expenses paid do not include any applicable sales charges (loads). If these transaction costs had been included, your costs would have been higher. |
9
Table of Contents
3/31/10
The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.
| Municipal Bonds - 101.1% | ||||||
| Issuer | Shares/Par | Value ($) | ||||
| Airport & Port Revenue - 0.7% | ||||||
| Branson, MO, Regional Airport Transportation Development District Airport Rev., “B”, 6%, 2025 | $ | 205,000 | $ | 151,060 | ||
| Branson, MO, Regional Airport Transportation Development District Airport Rev., “B”, 6%, 2037 | 100,000 | 68,275 | ||||
| Branson, MO, Regional Airport Transportation Development District Airport Rev., “B”, 6%, 2037 | 1,075,000 | 703,620 | ||||
| Chicago, IL, O’Hare International Airport Rev. (Second Lien Passenger Facility), “D”, AMBAC, 5.5%, 2019 | 2,195,000 | 2,260,762 | ||||
| Maryland Economic Development Corp. Rev. (Terminal Project), “B”, 5.375%, 2025 | 795,000 | 803,936 | ||||
| Maryland Economic Development Corp. Rev. (Terminal Project), “B”, 5.75%, 2035 | 1,535,000 | 1,558,455 | ||||
| Massachusetts Port Authority Rev., ETM, 13%, 2013 (c) | 1,840,000 | 2,207,963 | ||||
| Niagara, NY, Frontier Transportation Authority Rev. (Buffalo-Niagara International Airport), NATL, 5.875%, 2013 | 1,485,000 | 1,506,399 | ||||
| Oklahoma City, OK, Airport Trust, “B”, AGM, 5.75%, 2017 | 1,080,000 | 1,085,713 | ||||
| $ | 10,346,183 | |||||
| General Obligations - General Purpose - 4.6% | ||||||
| Chicago, IL, FGIC, 6.125%, 2010 (c) | $ | 3,785,000 | $ | 3,875,159 | ||
| Commonwealth of Puerto Rico, “A”, ETM, FGIC, 5.5%, 2015 (c) | 5,000 | 5,259 | ||||
| Commonwealth of Puerto Rico, “A”, ETM, FGIC, 5.5%, 2015 (c)(u) | 5,580,000 | 6,568,007 | ||||
| Country Club Hills, IL, NATL, 5%, 2031 | 3,170,000 | 3,273,088 | ||||
| Delaware County, OH, 6.25%, 2010 (c) | 1,000,000 | 1,048,750 | ||||
| Detroit, MI, 5.25%, 2035 | 5,000,000 | 4,930,550 | ||||
| Luzerne County, PA, AGM, 6.75%, 2023 | 1,200,000 | 1,277,316 | ||||
| Schaumburg, IL, “B”, FGIC, 5.25%, 2034 | 2,000,000 | 2,077,520 | ||||
| State of California, 6.5%, 2033 | 4,000,000 | 4,381,520 | ||||
| State of California, 5%, 2034 | 3,185,000 | 2,976,637 | ||||
| State of California, 6%, 2039 | 3,000,000 | 3,165,120 | ||||
| State of California, 5.5%, 2040 | 1,875,000 | 1,869,431 | ||||
| State of Illinois, NATL, 5.5%, 2025 | 500,000 | 500,000 | ||||
| State of Washington, 6%, 2012 | 4,360,000 | 4,828,002 | ||||
| State of Washington, “A”, NATL, 5%, 2033 | 5,000,000 | 5,226,150 | ||||
| State of Wisconsin, “C”, 6%, 2010 (c) | 1,200,000 | 1,204,776 | ||||
| Washington Motor Vehicle Fuel Tax, “B”, NATL, 5%, 2032 (u) | 25,010,000 | 26,118,693 | ||||
| $ | 73,325,978 | |||||
10
Table of Contents
Portfolio of Investments – continued
| Issuer | Shares/Par | Value ($) | ||||
| Municipal Bonds - continued | ||||||
| General Obligations - Improvement - 2.1% | ||||||
| Birmingham, AL, “A”, 5.75%, 2017 | $ | 1,000,000 | $ | 1,019,910 | ||
| District of Columbia, NATL, 6.5%, 2010 | 3,095,000 | 3,123,257 | ||||
| District of Columbia, ETM, NATL, 6.5%, 2010 (c) | 2,905,000 | 2,932,656 | ||||
| Guam Government, “A”, 6.75%, 2029 | 1,610,000 | 1,715,230 | ||||
| Guam Government, “A”, 7%, 2039 | 1,670,000 | 1,790,474 | ||||
| Massachusetts Bay Transportation Authority, General Transportation Systems, “A”, SYNCORA, 7%, 2021 | 10,185,000 | 12,175,251 | ||||
| Massachusetts Bay Transportation Authority, General Transportation Systems, “C”, SYNCORA, 6.1%, 2013 | 10,200,000 | 11,084,238 | ||||
| $ | 33,841,016 | |||||
| General Obligations - Schools - 6.6% | ||||||
| Beverly Hills, CA, Unified School District, Capital Appreciation (Election of 2008), 0%, 2031 | $ | 2,010,000 | $ | 628,246 | ||
| Beverly Hills, CA, Unified School District, Capital Appreciation (Election of 2008), 0%, 2032 | 2,035,000 | 594,505 | ||||
| Beverly Hills, CA, Unified School District, Capital Appreciation (Election of 2008), 0%, 2033 | 4,070,000 | 1,117,581 | ||||
| Chicago, IL, Board of Education, NATL, 6.25%, 2015 | 20,295,000 | 22,450,938 | ||||
| Clark County, NV, School District, “A”, NATL, 7%, 2010 | 4,000,000 | 4,039,440 | ||||
| Escondido, CA, Union High School District, Capital Appreciation (Election of 2008), “A”, ASSD GTY, 0%, 2030 | 4,495,000 | 1,312,765 | ||||
| Escondido, CA, Union High School District, Capital Appreciation (Election of 2008), “A”, ASSD GTY, 0%, 2031 | 4,015,000 | 1,085,576 | ||||
| Escondido, CA, Union High School District, Capital Appreciation (Election of 2008), “A”, ASSD GTY, 0%, 2032 | 2,825,000 | 709,103 | ||||
| Escondido, CA, Union High School District, Capital Appreciation (Election of 2008), “A”, ASSD GTY, 0%, 2033 | 2,785,000 | 652,637 | ||||
| Ferris, TX, Independent School District, PSF, 5.5%, 2034 | 3,000,000 | 3,091,290 | ||||
| Florida Board of Education, Capital Outlay, 9.125%, 2014 | 1,380,000 | 1,537,955 | ||||
| Florida Board of Education, Capital Outlay, ETM, 9.125%, 2014 (c) | 265,000 | 332,204 | ||||
| Fresno, CA, Unified School District, NATL, 6.55%, 2020 | 1,225,000 | 1,342,367 | ||||
| Gilroy, CA, Unified School District, FGIC, 5%, 2027 | 1,000,000 | 1,010,890 | ||||
| Grand Blanc, MI, Community Schools (School Building & Site), AGM, 5%, 2028 | 1,000,000 | 1,038,710 | ||||
| Hartnell, CA, Community College District, Capital Appreciation (Election of 2002), “D”, 0%, 2039 | 9,645,000 | 1,223,179 | ||||
| Kane, Cook & DuPage Counties, IL, AGM, 6.375%, 2011 (c) | 1,245,000 | 1,299,705 | ||||
| Kane, Cook & DuPage Counties, IL, AGM, 6.5%, 2011 (c) | 1,345,000 | 1,405,337 | ||||
| Knox County, KY, SYNCORA, 5.5%, 2014 (c) | 640,000 | 745,843 | ||||
| Knox County, KY, SYNCORA, 5.625%, 2014 (c) | 1,150,000 | 1,346,581 | ||||
| Lancaster, TX, Independent School District, Capital Appreciation, AGM, 0%, 2014 (c) | 2,250,000 | 1,005,435 | ||||
11
Table of Contents
Portfolio of Investments – continued
| Issuer | Shares/Par | Value ($) | ||||
| Municipal Bonds - continued | ||||||
| General Obligations - Schools - continued | ||||||
| Lancaster, TX, Independent School District, Capital Appreciation, AGM, 0%, 2014 (c) | $ | 2,000,000 | $ | 840,360 | ||
| Lane County, OR, School District, 6.25%, 2010 (c) | 1,150,000 | 1,162,731 | ||||
| Lane County, OR, School District, 6.25%, 2010 (c) | 1,000,000 | 1,011,070 | ||||
| Leander, TX, Independent School District, Capital Appreciation, PSF, 0%, 2018 | 7,385,000 | 4,400,131 | ||||
| Long Beach, CA, Community College District, Election of 2008, Capital Appreciation, “A”, AGM, 0%, 2028 | 5,025,000 | 1,727,294 | ||||
| Los Angeles, CA, Unified School District, “D”, 5%, 2034 | 825,000 | 834,067 | ||||
| Menlo Park, CA, City School District, Capital Appreciation (Election of 2006), 0%, 2044 | 10,000,000 | 3,535,200 | ||||
| Merced, CA, Union High School District, Capital Appreciation, “A”, ASSD GTY, 0%, 2030 | 1,325,000 | 379,414 | ||||
| Oceanside, CA, Unified School District, Capital Appreciation, ASSD GTY, 0%, 2024 | 2,900,000 | 1,298,620 | ||||
| Oceanside, CA, Unified School District, Capital Appreciation, ASSD GTY, 0%, 2027 | 1,930,000 | 705,010 | ||||
| Oceanside, CA, Unified School District, Capital Appreciation, ASSD GTY, 0%, 2029 | 3,915,000 | 1,240,115 | ||||
| Oceanside, CA, Unified School District, Capital Appreciation, ASSD GTY, 0%, 2030 | 4,335,000 | 1,278,608 | ||||
| Phenix City, AL, AMBAC, 5.65%, 2010 (c) | 1,500,000 | 1,554,765 | ||||
| Roma, TX, Independent School District, PSF, 5.875%, 2010 (c) | 1,705,000 | 1,738,316 | ||||
| San Lorenzo, CA, Unified School District, Alameda County, Election 2004, “B”, FGIC, 4.75%, 2037 | 135,000 | 132,158 | ||||
| San Marcos, TX, Independent School District, PSF, 5.625%, 2014 (c) | 2,000,000 | 2,336,460 | ||||
| San Marcos, TX, Independent School District, PSF, 5.625%, 2014 (c) | 2,000,000 | 2,336,460 | ||||
| San Mateo County, CA (Community College District, 2005 Election), Capital Appreciation, “A”, NATL, 0%, 2026 | 5,100,000 | 2,033,676 | ||||
| San Rafael, CA, Elementary School District, Election of 1999, NATL, 5%, 2028 | 2,500,000 | 2,545,825 | ||||
| Schertz-Cibolo-Universal City, TX, Independent School District, PSF, 5%, 2036 | 15,000,000 | 15,495,600 | ||||
| Sunnyvale, TX, Independent School District, PSF, 5.25%, 2028 | 1,900,000 | 1,997,907 | ||||
| Sunnyvale, TX, Independent School District, PSF, 5.25%, 2031 | 2,000,000 | 2,084,820 | ||||
| Wattsburg, PA, Public School Building Authority Rev., Capital Appreciation, NATL, 0%, 2029 | 2,150,000 | 782,514 | ||||
| West Contra Costa, CA, Unified School District, Election of 2005, Capital Appreciation, “C”, ASSD GTY, 0%, 2029 | 3,440,000 | 1,001,556 | ||||
| Whittier, CA, Union High School District, Capital Appreciation, 0%, 2034 | 2,005,000 | 420,188 | ||||
| Wylie, TX, Independent School District, PSF, 5.25%, 2029 | 5,035,000 | 5,189,927 | ||||
| $ | 106,033,079 | |||||
12
Table of Contents
Portfolio of Investments – continued
| Issuer | Shares/Par | Value ($) | ||||
| Municipal Bonds - continued | ||||||
| Healthcare Revenue - Hospitals - 25.3% | ||||||
| Allegheny County, PA, Hospital Development Authority Rev. (West Penn Allegheny Health), 9.25%, 2010 (c) | $ | 650,000 | $ | 697,879 | ||
| Allegheny County, PA, Hospital Development Authority Rev. (West Penn Allegheny Health), “A”, 5%, 2028 | 255,000 | 202,824 | ||||
| Allegheny County, PA, Hospital Development Authority Rev. (West Penn Allegheny Health), “A”, 5.375%, 2040 | 3,995,000 | 3,050,702 | ||||
| Allegheny County, PA, Hospital Development Authority Rev. (West Penn Allegheny Health), “B”, 9.25%, 2010 (c) | 350,000 | 375,781 | ||||
| Baxter County, AR, Hospital Rev., 5.375%, 2014 | 2,000,000 | 2,011,160 | ||||
| Baxter County, AR, Hospital Rev., 5.6%, 2021 | 1,750,000 | 1,754,795 | ||||
| Birmingham, AL, Baptist Medical Center, Special Care Facilities Rev. (Baptist Health Systems, Inc.), “A”, 5%, 2030 | 8,525,000 | 7,325,533 | ||||
| Brunswick, GA, Hospital Authority Rev. (Glynn-Brunswick Memorial Hospital), 5.625%, 2034 | 1,320,000 | 1,355,600 | ||||
| California Health Facilities Financing Authority Rev. (St. Joseph Health System), “A”, 5.75%, 2039 | 2,580,000 | 2,680,878 | ||||
| California Municipal Finance Authority, COP (Community Hospitals, Central California), 5.5%, 2039 | 1,405,000 | 1,241,107 | ||||
| California Statewide Communities Development Authority Rev. (Children’s Hospital), 5%, 2047 | 4,090,000 | 3,195,026 | ||||
| California Statewide Communities Development Authority Rev. (Daughters of Charity Health), “A”, 5.25%, 2024 | 1,390,000 | 1,304,932 | ||||
| California Statewide Communities Development Authority Rev. (Enloe Medical Center), CHCLI, 5.75%, 2038 | 2,640,000 | 2,567,875 | ||||
| California Statewide Communities Development Authority Rev. (Valleycare Health Systems), “A”, 5%, 2022 | 195,000 | 181,256 | ||||
| California Statewide Communities Development Authority Rev. (Valleycare Health Systems), “A”, 5.125%, 2031 | 100,000 | 87,275 | ||||
| Chemung County, NY, Civic Facilities Rev. (St. Joseph’s Hospital-Elmira), “A”, 6%, 2013 | 360,000 | 275,540 | ||||
| Colorado Health Facilities Authority Rev. (Portercare Adventist Health Systems), 6.625%, 2011 (c) | 1,750,000 | 1,928,640 | ||||
| Connecticut State Health & Educational Facilities Authority Rev. (Ascension Health), “A”, 5%, 2040 (u) | 10,000,000 | 10,213,800 | ||||
| Cullman County, AL, Health Care Authority (Cullman Regional Medical Center), “A”, 6.75%, 2029 | 3,445,000 | 3,515,588 | ||||
| Cuyahoga County, OH, Hospital Facilities Rev. (Canton, Inc.), 7.5%, 2030 | 900,000 | 911,727 | ||||
| Denver, CO, Health & Hospital Authority Rev., “A”, 6%, 2011 (c) | 500,000 | 542,250 | ||||
| Erie County, PA, Hospital Authority Rev. (St. Vincent’s Health), “A”, 7%, 2027 | 3,135,000 | 3,149,484 | ||||
| Escambia County, FL, Health Facilities Authority (Baptist Hospital, Inc.), “A”, 5.75%, 2029 | 3,500,000 | 3,388,630 | ||||
13
Table of Contents
Portfolio of Investments – continued
| Issuer | Shares/Par | Value ($) | ||||
| Municipal Bonds - continued | ||||||
| Healthcare Revenue - Hospitals - continued | ||||||
| Escambia County, FL, Health Facilities Authority (Baptist Hospital, Inc.), “A”, 6%, 2036 | $ | 1,895,000 | $ | 1,836,369 | ||
| Florence County, SC, Hospital Rev. (McLeod Regional Medical Center), “A”, AGM, 5.25%, 2034 | 5,000,000 | 5,072,750 | ||||
| Glendale, AZ, Industrial Development Authority (John C. Lincoln Health), 5%, 2042 | 2,820,000 | 2,443,135 | ||||
| Grundy County, MO, Industrial Development Authority, Health Facilities Rev. (Wright Memorial Hospital), 6.75%, 2034 | 1,410,000 | 1,419,814 | ||||
| Gulfport, MS, Hospital Facilities Rev. (Memorial Hospital), 5.75%, 2031 | 1,505,000 | 1,513,579 | ||||
| Harris County, TX, Health Facilities Development Corp., Hospital Rev. (Memorial Hermann Healthcare Systems), “A”, 6.375%, 2011 (c) | 2,000,000 | 2,153,780 | ||||
| Harris County, TX, Health Facilities Development Corp., Hospital Rev. (Memorial Hermann Healthcare Systems), “B”, 7%, 2027 | 1,795,000 | 2,012,357 | ||||
| Harris County, TX, Health Facilities Development Corp., Hospital Rev. (Memorial Hermann Healthcare Systems), “B”, 7.25%, 2035 | 2,050,000 | 2,310,719 | ||||
| Harris County, TX, Health Facilities Development Corp., Hospital Rev. (Texas Children’s Hospital Project), “A”, ETM, 5.375%, 2015 (c) | 4,300,000 | 4,403,415 | ||||
| Henrico County, VA, Industrial Development Authority Rev. (Bon Secours Health Systems, Inc.), RIBS, AGM, 11.155%, 2027 (p) | 4,950,000 | 5,421,141 | ||||
| Houston County, GA, Hospital Authority Rev. Anticipation Certificates (Houston Healthcare Project), 5.25%, 2042 | 2,220,000 | 2,126,671 | ||||
| Huntsville, AL, Health Care Authority Rev., 5.625%, 2011 (c) | 2,595,000 | 2,772,213 | ||||
| Illinois Finance Authority Rev. (Children’s Memorial Hospital), “A”, ASSD GTY, 5.25%, 2047 | 750,000 | 718,058 | ||||
| Illinois Finance Authority Rev. (Edward Hospital), “A”, AMBAC, 5.5%, 2040 | 3,040,000 | 3,013,309 | ||||
| Illinois Finance Authority Rev. (KishHealth Systems Obligated Group), 5.75%, 2028 | 2,990,000 | 3,052,312 | ||||
| Illinois Finance Authority Rev. (O.S.F. Healthcare Systems) “A”, 7%, 2029 | 2,975,000 | 3,327,329 | ||||
| Illinois Finance Authority Rev. (O.S.F. Healthcare Systems) “A”, 7.125%, 2037 | 2,445,000 | 2,726,493 | ||||
| Illinois Finance Authority Rev. (Provena Health), “A”, 7.75%, 2034 | 3,685,000 | 4,203,664 | ||||
| Illinois Finance Authority Rev. (Resurrection Health), 6.125%, 2025 | 6,900,000 | 6,988,251 | ||||
| Illinois Finance Authority Rev. (Silver Cross Hospital & Medical Centers), 6.875%, 2038 | 1,500,000 | 1,554,765 | ||||
| Illinois Finance Authority Rev. (Silver Cross Hospital & Medical Centers), 7%, 2044 | 2,455,000 | 2,547,971 | ||||
| Illinois Finance Authority Rev. (Silver Cross Hospital & Medical Centers), “A”, 5.5%, 2030 | 2,500,000 | 2,288,175 | ||||
14
Table of Contents
Portfolio of Investments – continued
| Issuer | Shares/Par | Value ($) | ||||
| Municipal Bonds - continued | ||||||
| Healthcare Revenue - Hospitals - continued | ||||||
| Illinois Health Facilities Authority Rev. (Advocate Health Care Network), 6.375%, 2010 (c) | $ | 1,800,000 | $ | 1,865,844 | ||
| Illinois Health Facilities Authority Rev. (Condell Medical Center), 6.35%, 2010 (c) | 7,500,000 | 7,623,975 | ||||
| Illinois Health Facilities Authority Rev. (Decatur Memorial Hospital), 5.75%, 2024 | 3,000,000 | 3,014,760 | ||||
| Illinois Health Facilities Authority Rev. (Passavant Memorial Area Hospital Associates), 6%, 2010 (c) | 1,500,000 | 1,555,725 | ||||
| Illinois Health Facilities Authority Rev. (Riverside Health Systems), 5.75%, 2012 (c) | 2,625,000 | 2,932,204 | ||||
| Indiana Finance Authority, Hospital Rev. (Deaconess Hospital, Inc.), “A”, 6.75%, 2039 | 3,000,000 | 3,267,600 | ||||
| Indiana Health & Educational Facilities Authority, Hospital Rev. (Clarian Hospital), “B”, 5%, 2033 | 2,490,000 | 2,301,059 | ||||
| Indiana Health & Educational Facilities Authority, Hospital Rev. (Community Foundation of Northwest Indiana), “A”, 6.375%, 2011 (c) | 185,000 | 200,492 | ||||
| Indiana Health & Educational Facilities Authority, Hospital Rev. (Community Foundation of Northwest Indiana), “A”, 6.375%, 2011 (c) | 380,000 | 411,821 | ||||
| Indiana Health & Educational Facilities Authority, Hospital Rev. (Community Foundation of Northwest Indiana), “A”, 6.375%, 2021 | 1,515,000 | 1,551,042 | ||||
| Indiana Health & Educational Facilities Authority, Hospital Rev. (Community Foundation of Northwest Indiana), “A”, 6.375%, 2031 | 120,000 | 121,985 | ||||
| Indiana Health & Educational Facilities Authority, Hospital Rev. (Deaconess Hospital), “A”, AMBAC, 5.375%, 2034 | 2,640,000 | 2,638,099 | ||||
| Indiana Health & Educational Facilities Authority, Hospital Rev. (Riverview Hospital), 5.25%, 2014 | 400,000 | 402,568 | ||||
| Indiana Health & Educational Facilities Authority, Hospital Rev. (Riverview Hospital), 6.125%, 2031 | 250,000 | 250,455 | ||||
| Indiana Health & Educational Facilities Finance Authority, Hospital Rev. (Clarian Health), “A”, 5%, 2039 | 1,610,000 | 1,462,991 | ||||
| Indiana Health & Educational Facilities Finance Authority, Hospital Rev. (Community Foundation of Northwest Indiana), 5.5%, 2037 | 4,210,000 | 4,039,285 | ||||
| Iowa Finance Authority, Health Care Facilities Rev. (Genesis Medical Center), 6.125%, 2016 | 2,195,000 | 2,206,568 | ||||
| Jefferson Parish, LA, Hospital Rev., Hospital Service District No. 1 (West Jefferson Medical Center), “B”, AGM, 5.25%, 2028 | 3,980,000 | 4,110,066 | ||||
| Johnson City, TN, Health & Educational Facilities Board Hospital Rev. (Mountain States Health), “A”, 5.5%, 2036 | 3,180,000 | 3,102,090 | ||||
| Kentucky Economic Development Finance Authority (Norton Healthcare), “A”, 6.5%, 2010 (c) | 2,355,000 | 2,447,599 | ||||
15
Table of Contents
Portfolio of Investments – continued
| Issuer | Shares/Par | Value ($) | ||||
| Municipal Bonds - continued | ||||||
| Healthcare Revenue - Hospitals - continued | ||||||
| Kentucky Economic Development Finance Authority (Norton Healthcare), “A”, 6.625%, 2010 (c) | $ | 195,000 | $ | 202,786 | ||
| Kentucky Economic Development Finance Authority (Norton Healthcare), “A”, 6.5%, 2020 | 3,645,000 | 3,725,555 | ||||
| Kentucky Economic Development Finance Authority (Norton Healthcare), “A”, 6.625%, 2028 | 55,000 | 56,077 | ||||
| Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Baptist Healthcare System), “A”, 5.375%, 2024 | 2,305,000 | 2,477,575 | ||||
| Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Baptist Healthcare System), “A”, 5.625%, 2027 | 770,000 | 826,995 | ||||
| Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Owensboro Medical Health System), “A”, 6%, 2030 | 640,000 | 627,488 | ||||
| Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Owensboro Medical Health System), “A”, 6.375%, 2040 | 4,445,000 | 4,406,284 | ||||
| Knox County, TN, Health, Educational, Hospital & Housing Facilities Board Rev. (Baptist Health Systems, East Tennessee), 6.375%, 2022 | 1,000,000 | 1,055,170 | ||||
| Knox County, TN, Health, Educational, Hospital & Housing Facilities Board Rev. (Covenant Health), Capital Appreciation, “A”, 0%, 2035 | 3,205,000 | 678,306 | ||||
| Knox County, TN, Health, Educational, Hospital & Housing Facilities Board Rev. (Covenant Health), Capital Appreciation, “A”, 0%, 2036 | 2,010,000 | 399,266 | ||||
| Knox County, TN, Health, Educational, Hospital & Housing Facilities Board Rev. (University Health Systems, Inc.), 5.25%, 2036 | 1,945,000 | 1,807,197 | ||||
| Lake County, OH, Hospital Facilities Rev. (Lake Hospital), “C”, 6%, 2043 | 1,865,000 | 1,854,239 | ||||
| Lauderdale County & Florence, AL (Coffee Health Group), “A”, NATL, 5.25%, 2019 | 950,000 | 867,778 | ||||
| Lebanon County, PA, Health Facilities Authority Rev. (The Good Samaritan Hospital of Lebanon), 5.9%, 2028 | 1,700,000 | 1,561,501 | ||||
| Louisiana Public Facilities Authority Hospital Rev. (Lake Charles Memorial Hospital), 6.375%, 2034 | 3,620,000 | 3,351,649 | ||||
| Louisville & Jefferson County, KY, Metro Government Health Facilities Rev. (Jewish Hospital & St. Mary’s Healthcare), 6.125%, 2037 | 2,240,000 | 2,329,242 | ||||
| Louisville & Jefferson County, KY, Metropolitan Government Healthcare Systems Rev. (Norton Healthcare, Inc.), 5.25%, 2036 | 5,545,000 | 5,308,118 | ||||
| Lufkin, TX, Health Facilities Development Corp. Rev. (Memorial Health System), 5.5%, 2032 | 295,000 | 267,170 | ||||
| Lufkin, TX, Health Facilities Development Corp. Rev. (Memorial Health System), 5.5%, 2037 | 310,000 | 275,854 | ||||
16
Table of Contents
Portfolio of Investments – continued
| Issuer | Shares/Par | Value ($) | ||||
| Municipal Bonds - continued | ||||||
| Healthcare Revenue - Hospitals - continued | ||||||
| Macomb County, MI, Hospital Finance Authority Rev. (Mount Clemens General Hospital), 5.75%, 2013 (c) | $ | 1,000,000 | $ | 1,149,100 | ||
| Marshall County, AL, Health Care Authority Rev., “A”, 5.75%, 2015 | 1,000,000 | 1,037,650 | ||||
| Marshall County, AL, Health Care Authority Rev., “A”, 6.25%, 2022 | 500,000 | 513,885 | ||||
| Martin County, FL, Health Facilities Authority Rev. (Martin Memorial Medical Center), “A”, 5.75%, 2012 (c) | 850,000 | 956,548 | ||||
| Martin County, FL, Health Facilities Authority Rev. (Martin Memorial Medical Center), “B”, 5.875%, 2012 (c) | 2,200,000 | 2,482,788 | ||||
| Maryland Health & Higher Educational Facilities Authority Rev. (Anne Arundel Health System), “A”, 6.75%, 2039 | 1,510,000 | 1,718,999 | ||||
| Maryland Health & Higher Educational Facilities Authority Rev. (Medstar Health), 5.5%, 2033 | 1,420,000 | 1,441,300 | ||||
| Maryland Health & Higher Educational Facilities Authority Rev. (Mercy Medical Center), “A”, 5.5%, 2042 | 1,950,000 | 1,840,566 | ||||
| Maryland Health & Higher Educational Facilities Authority Rev. (University of Maryland Medical System), 6.75%, 2010 (c) | 2,000,000 | 2,050,340 | ||||
| Maryland Health & Higher Educational Facilities Authority Rev. (Washington County Hospital), 6%, 2043 | 615,000 | 609,705 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Boston Medical Center), 5.25%, 2038 | 2,890,000 | 2,497,827 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Caritas Christi), “A”, 5.7%, 2015 | 3,000,000 | 3,018,840 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Partners Healthcare Systems), “C”, 5.75%, 2021 | 1,900,000 | 1,956,278 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Quincy Medical Center), “A”, 6.5%, 2038 | 1,130,000 | 1,005,836 | ||||
| Mecosta County, MI, General Hospital Rev., 6%, 2018 | 300,000 | 298,647 | ||||
| Miami Beach, FL, Health Facilities Authority Rev. (Mount Sinai Medical Center), “A”, 6.7%, 2019 | 750,000 | 754,545 | ||||
| Michigan Hospital Finance Authority Rev. (Henry Ford Health System), 5.625%, 2029 | 1,240,000 | 1,217,544 | ||||
| Michigan Hospital Finance Authority Rev. (Henry Ford Health System), 5.75%, 2039 | 7,165,000 | 6,917,808 | ||||
| Monroe County, MI, Hospital Finance Authority, Hospital Rev. (Mercy Memorial Hospital Corp.), 5.5%, 2035 | 2,995,000 | 2,448,472 | ||||
| Monroe County, PA, Hospital Authority Rev. (Pocono Medical Center), 6%, 2014 (c) | 750,000 | 860,663 | ||||
| Montgomery, AL, Medical Clinic Board Health Care Facility Rev. (Jackson Hospital & Clinic), 5.25%, 2031 | 585,000 | 536,346 | ||||
| Mount Lebanon, PA, Hospital Authority Rev. (St. Clair Memorial Hospital), 5.625%, 2032 | 1,710,000 | 1,712,736 | ||||
| Nassau County, NY, Industrial Development Agency, Civic Facilities Rev. (North Shore Health System), 5.875%, 2011 | 125,000 | 128,120 | ||||
17
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Portfolio of Investments – continued
| Issuer | Shares/Par | Value ($) | ||||
| Municipal Bonds - continued | ||||||
| Healthcare Revenue - Hospitals - continued | ||||||
| New Hampshire Business Finance Authority Rev. (Elliot Hospital Obligated Group), “A”, 6%, 2027 | $ | 4,385,000 | $ | 4,445,075 | ||
| New Hampshire Business Finance Authority Rev. (Huggins Hospital), 6.875%, 2039 | 825,000 | 824,472 | ||||
| New Hampshire Health & Education Facilities Authority Rev. (Covenant Health System), 6.5%, 2012 (c) | 445,000 | 488,690 | ||||
| New Hampshire Health & Education Facilities Authority Rev. (Covenant Health System), 6.5%, 2017 | 205,000 | 214,988 | ||||
| New Hampshire Health & Education Facilities Authority Rev. (Exeter Hospital), 6%, 2016 | 1,000,000 | 1,036,240 | ||||
| New Hampshire Health & Education Facilities Authority Rev. (Exeter Hospital), 6%, 2024 | 500,000 | 512,730 | ||||
| New Hampshire Health & Education Facilities Authority Rev. (Memorial Hospital at Conway), 5.25%, 2036 | 565,000 | 486,160 | ||||
| New Jersey Health Care Facilities, Financing Authority Rev. (Palisades Medical Center), 6.5%, 2021 | 500,000 | 475,485 | ||||
| New Jersey Health Care Facilities, Financing Authority Rev. (St. Barnabas Health) Capital Appreciation, “B”, 0%, 2036 | 4,695,000 | 502,694 | ||||
| New Jersey Health Care Facilities, Financing Authority Rev. (St. Barnabas Health) Capital Appreciation, “B”, 0%, 2038 | 18,145,000 | 1,629,602 | ||||
| New Jersey Health Care Facilities, Financing Authority Rev. (St. Joseph’s Healthcare System), 6.625%, 2038 | 3,000,000 | 3,038,490 | ||||
| New Jersey Health Care Facilities, Financing Authority Rev. (St. Peter’s University Hospital), 5.75%, 2037 | 2,830,000 | 2,825,840 | ||||
| New York Dormitory Authority Rev., Non-State Supported Debt (Bronx-Lebanon Hospital Center), LOC, 6.5%, 2030 | 1,475,000 | 1,632,781 | ||||
| New York Dormitory Authority Rev., Non-State Supported Debt (Bronx-Lebanon Hospital Center), LOC, 6.25%, 2035 | 1,395,000 | 1,516,379 | ||||
| New York Dormitory Authority Rev., Non-State Supported Debt (Long Island Jewish Medical Center), “A”, 5.5%, 2037 | 595,000 | 604,443 | ||||
| Norman, OK, Regional Hospital Authority Rev., 5.125%, 2037 | 3,350,000 | 2,565,464 | ||||
| North Texas Health Facilities Development Corp. Rev. (United Regional Health Care System, Inc.), 6%, 2013 (c) | 5,000,000 | 5,754,400 | ||||
| Northampton County, PA, General Purpose Authority Hospital Rev. (St. Luke’s Hospital), “A”, 5.5%, 2035 | 740,000 | 726,058 | ||||
| Northampton County, PA, General Purpose Authority Hospital Rev. (St. Luke’s Hospital), “A”, 5.5%, 2040 | 810,000 | 787,814 | ||||
| Ohio County, WV, County Commission Health System Rev. (Ohio Valley Medical Center), 5.75%, 2013 | 575,000 | 520,933 | ||||
| Ohio Higher Educational Facility Commission Rev. (University Hospital Health System), 6.75%, 2039 | 6,000,000 | 6,380,340 | ||||
| Oklahoma Development Finance Authority Rev. (Comanche County Hospital), “B”, 6.6%, 2031 | 255,000 | 261,181 | ||||
18
Table of Contents
Portfolio of Investments – continued
| Issuer | Shares/Par | Value ($) | ||||
| Municipal Bonds - continued | ||||||
| Healthcare Revenue - Hospitals - continued | ||||||
| Orange County, FL, Health Facilities Authority Hospital Rev. (Orlando Regional Healthcare), 5.75%, 2012 (c) | $ | 2,230,000 | $ | 2,501,592 | ||
| Orange County, FL, Health Facilities Authority Rev. (Adventist Health System), 5.625%, 2012 (c) | 1,490,000 | 1,659,324 | ||||
| Palomar Pomerado Health Care District, CA, COP, 6.75%, 2039 | 3,265,000 | 3,359,750 | ||||
| Peninsula Ports Authority, VA, Hospital Facility Rev. (Whittaker Memorial), FHA, 8.7%, 2023 | 1,455,000 | 1,481,263 | ||||
| Philadelphia, PA, Hospitals & Higher Education Facilities Authority Rev. (Temple University Health System), “A”, 6.625%, 2023 | 2,665,000 | 2,665,293 | ||||
| Philadelphia, PA, Hospitals & Higher Education Facilities Authority Rev. (Temple University Health System), “A”, 5.5%, 2030 | 2,710,000 | 2,404,258 | ||||
| Rhode Island Health & Educational Building Corp. Rev., Hospital Financing (Lifespan Obligated Group), “A”, ASSD GTY, 7%, 2039 | 7,645,000 | 8,567,981 | ||||
| Rhode Island Health & Educational Building Corp., Hospital Financing (Lifespan Obligated Group), 6.375%, 2012 (c) | 1,730,000 | 1,900,007 | ||||
| Rhode Island Health & Educational Building Corp., Hospital Financing (Lifespan Obligated Group), 6.5%, 2012��(c) | 1,500,000 | 1,685,040 | ||||
| Richland County, OH, Hospital Facilities Rev. (Medcentral Health), “B”, 6.375%, 2010 (c) | 665,000 | 695,537 | ||||
| Richmond, IN, Hospital Authority Rev. (Reid Hospital & Health Center Services), “A”, 6.625%, 2039 | 4,715,000 | 5,041,419 | ||||
| Royal Oak, MI, Hospital Finance Authority Rev. (William Beaumont Hospital), 8.25%, 2039 | 2,325,000 | 2,753,870 | ||||
| Scioto County, OH, Hospital Facilities Rev. (Southern Ohio Medical Center), 5.625%, 2031 | 1,095,000 | 1,105,643 | ||||
| Scioto County, OH, Hospital Facilities Rev. (Southern Ohio Medical Center), 5.75%, 2038 | 4,195,000 | 4,252,849 | ||||
| Shelby County, TN, Educational & Hospital Facilities Board Hospital Rev. (Methodist Healthcare), 6.375%, 2012 (c) | 1,255,000 | 1,410,582 | ||||
| Shelby County, TN, Educational & Housing Facilities Board Hospital Rev. (Methodist Healthcare), 6%, 2012 (c) | 300,000 | 334,533 | ||||
| Shelby County, TN, Educational & Housing Facilities Board Hospital Rev. (Methodist Healthcare), 6%, 2012 (c) | 500,000 | 557,555 | ||||
| Shelby County, TN, Educational & Housing Facilities Board Hospital Rev. (Methodist Healthcare), 6.375%, 2012 (c) | 745,000 | 837,358 | ||||
| Skagit County, WA, Public Hospital District No. 001 Rev. (Skagit Valley Hospital), 5.625%, 2025 | 1,000,000 | 997,340 | ||||
| Skagit County, WA, Public Hospital District No. 001 Rev. (Skagit Valley Hospital), 5.75%, 2032 | 4,925,000 | 4,749,522 | ||||
| South Carolina Jobs & Economic Development Authority (Bon Secours - St. Francis Medical Center, Inc.), 5.625%, 2012 (c) | 430,000 | 478,358 | ||||
| South Carolina Jobs & Economic Development Authority (Bon Secours - St. Francis Medical Center, Inc.), 5.625%, 2030 | 1,625,000 | 1,616,063 | ||||
19
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Portfolio of Investments – continued
| Issuer | Shares/Par | Value ($) | ||||
| Municipal Bonds - continued | ||||||
| Healthcare Revenue - Hospitals - continued | ||||||
| South Carolina Jobs & Economic Development Authority, Hospital Facilities Rev. (Anmed Health), “B”, ASSD GTY, 5.5%, 2038 | $ | 1,000,000 | $ | 1,035,950 | ||
| South Carolina Jobs & Economic Development Authority, Hospital Facilities Rev. (Palmetto Health Alliance), 6.25%, 2031 | 500,000 | 506,355 | ||||
| South Carolina Jobs & Economic Development Authority, Hospital Rev. (Palmetto Health), 5.75%, 2039 | 350,000 | 338,429 | ||||
| South Lake County, FL, Hospital District Rev. (South Lake Hospital), “A”, 6%, 2029 | 1,025,000 | 1,041,339 | ||||
| South Lake County, FL, Hospital District Rev. (South Lake Hospital), “A”, 6.25%, 2039 | 1,520,000 | 1,545,034 | ||||
| Southwestern, IL, Development Authority Rev. (Anderson Hospital), 5.125%, 2036 | 645,000 | 566,065 | ||||
| St. Louis Park, MN, Health Care Facilities Rev. (Nicollett Health Services), 5.75%, 2039 | 7,465,000 | 7,422,375 | ||||
| St. Paul, MN, Housing & Redevelopment Authority Healthcare Facilities Rev. (Healthpartners Obligated Group), 5.25%, 2036 | 4,385,000 | 4,141,062 | ||||
| Steubenville, OH, Hospital Rev. (Trinity Hospital), 6.375%, 2010 (c) | 1,500,000 | 1,544,235 | ||||
| Suffolk County, NY, Industrial Development Agency, Civic Facilities Rev. (Huntington Hospital), “C”, 5.875%, 2032 | 1,000,000 | 1,011,920 | ||||
| Sullivan County, TN, Health, Educational & Housing Facilities Board Hospital Rev. (Wellmont Health Systems Project), “C”, 5.25%, 2026 | 3,135,000 | 2,935,018 | ||||
| Sullivan County, TN, Health, Educational & Housing Facilities Board Hospital Rev. (Wellmont Health Systems Project), “C”, 5.25%, 2036 | 960,000 | 845,568 | ||||
| Sumner County, TN, Health, Educational & Housing Facilities Board Rev. (Sumner Regional Health), “A”, 5.5%, 2046 | 2,000,000 | 1,294,200 | ||||
| Tallahassee, FL, Health Facilities Rev. (Tallahassee Memorial Healthcare, Inc.), 6.25%, 2020 | 3,000,000 | 3,028,410 | ||||
| Tallahassee, FL, Health Facilities Rev. (Tallahassee Memorial Healthcare, Inc.), 6.375%, 2030 | 1,360,000 | 1,367,072 | ||||
| Tarrant County, TX, Cultural Education Facilities Finance Corp. (Scott & White Memorial Hospital), “A”, 5.5%, 2031 | 685,000 | 721,990 | ||||
| Tom Green County, TX, Health Facilities Rev. (Shannon Health System), 6.75%, 2021 | 400,000 | 412,352 | ||||
| Tyler, TX, Health Facilities Development Corp. (East Texas Medical Center), “A”, 5.25%, 2032 | 1,715,000 | 1,574,850 | ||||
| Tyler, TX, Health Facilities Development Corp. (East Texas Medical Center), “A”, 5.375%, 2037 | 1,410,000 | 1,290,065 | ||||
| Upper Illinois River Valley Development, Health Facilities Rev. (Morris Hospital), 6.625%, 2031 | 500,000 | 507,610 | ||||
| Vigo County, IN, Hospital Authority Rev. (Union Hospital), 5.8%, 2047 | 2,715,000 | 2,278,672 | ||||
| Wapello County, IA, Hospital Authority Rev. (Ottumwa Regional Health Center), 6.375%, 2012 (c) | 750,000 | 839,288 | ||||
20
Table of Contents
Portfolio of Investments – continued
| Issuer | Shares/Par | Value ($) | ||||
| Municipal Bonds - continued | ||||||
| Healthcare Revenue - Hospitals - continued | ||||||
| Washington Health Care Facilities Authority Rev. (Central Washington Health Services), 6.75%, 2029 | $ | 1,450,000 | $ | 1,541,930 | ||
| Washington Health Care Facilities Authority Rev. (Central Washington Health Services), 7%, 2039 | 3,690,000 | 3,956,381 | ||||
| Washington Health Care Facilities Authority Rev. (Highline Medical Center), FHA, 6.25%, 2036 | 5,305,000 | 5,732,636 | ||||
| Washington Health Care Facilities Authority Rev. (Virginia Mason Medical Center), “A”, 6.25%, 2042 | 3,955,000 | 4,031,569 | ||||
| Weirton, WV, Municipal Hospital Building, Commission Rev. (Weirton Hospital Medical Center), 6.375%, 2031 | 500,000 | 475,495 | ||||
| West Plains, MO, Industrial Development Authority Rev. (Ozarks Medical Center), 6.75%, 2024 | 195,000 | 193,021 | ||||
| West Shore, PA, Hospital Authority Rev. (Holy Spirit Hospital), 6.2%, 2026 | 1,250,000 | 1,256,375 | ||||
| West Shore, PA, Hospital Authority Rev. (Holy Spirit Hospital), 6.25%, 2032 | 1,000,000 | 1,001,990 | ||||
| West Virginia Hospital Finance Authority, Hospital Rev. (Charleston Area Medical Center), “A”, 5.625%, 2032 | 1,210,000 | 1,209,165 | ||||
| West Virginia Hospital Finance Authority, Hospital Rev. (Thomas Health System), 6.5%, 2038 | 1,990,000 | 1,844,849 | ||||
| Wichita, KS, Hospital Authority Rev. (Via Christi Health System), 6.25%, 2019 | 3,095,000 | 3,254,114 | ||||
| Wichita, KS, Hospital Authority Rev. (Via Christi Health System), 6.25%, 2020 | 2,465,000 | 2,580,263 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (Agnesian Healthcare, Inc.), 6%, 2017 | 845,000 | 860,818 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (Agnesian Healthcare, Inc.), 6%, 2021 | 650,000 | 657,716 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (Aurora Health Care, Inc.), 6.875%, 2030 | 2,750,000 | 2,843,968 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (Aurora Health Care, Inc.), “B”, 5.125%, 2027 (b) | 3,945,000 | 4,139,844 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (ProHealth Care, Inc. Obligated Group), 6.625%, 2032 | 1,730,000 | 1,803,992 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (ProHealth Care, Inc. Obligated Group), 6.625%, 2039 | 900,000 | 968,211 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (Wheaton Franciscan Healthcare), 5.25%, 2018 | 1,500,000 | 1,513,605 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (Wheaton Franciscan Services), 5.75%, 2012 (c) | 3,000,000 | 3,295,230 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (Wheaton Franciscan Services), 6.25%, 2012 (c) | 1,000,000 | 1,107,600 | ||||
21
Table of Contents
Portfolio of Investments – continued
| Issuer | Shares/Par | Value ($) | ||||
| Municipal Bonds - continued | ||||||
| Healthcare Revenue - Hospitals - continued | ||||||
| Wisconsin Health & Educational Facilities Authority Rev. (Wheaton Franciscan Services), 5.25%, 2031 | $ | 4,155,000 | $ | 3,814,996 | ||
| Wisconsin Health & Educational Facilities Authority Rev. (Wheaton Franciscan Services), 5.25%, 2034 | 1,360,000 | 1,236,634 | ||||
| Yonkers, NY, Industrial Development Agency, Civic Facilities Rev. (St. John’s Riverside Hospital), 6.8%, 2016 | 290,000 | 293,912 | ||||
| $ | 404,751,142 | |||||
| Healthcare Revenue - Long Term Care - 1.9% | ||||||
| ABAG Finance Authority for Non-Profit Corps. (Casa de las Campanas), 6%, 2037 | $ | 720,000 | $ | 718,992 | ||
| Bell County, TX, Health Facility Development Corp. (Advanced Living Technologies, Inc.), 8%, 2036 | 1,635,000 | 1,315,668 | ||||
| Bucks County, PA, Industrial Development Authority Retirement Community Rev. (Ann’s Choice, Inc.), “A”, 6.25%, 2035 | 1,120,000 | 998,939 | ||||
| California Statewide Communities Development Authority Rev. (American Baptist Homes of the West), 6.25%, 2039 | 1,050,000 | 1,026,501 | ||||
| Colorado Health Facilities Authority Rev. (Evangelical Lutheran), 6.9%, 2010 (c) | 305,000 | 323,782 | ||||
| Colorado Health Facilities Authority Rev. (Evangelical Lutheran), 6.9%, 2025 | 195,000 | 199,464 | ||||
| Colorado Health Facilities Authority Rev. (Evangelical Lutheran), “A”, 6.125%, 2038 | 890,000 | 892,332 | ||||
| Cumberland County, PA, Municipal Authority Rev. (Diakon Lutheran Social Ministries), 6.125%, 2029 | 830,000 | 818,546 | ||||
| Cumberland County, PA, Municipal Authority Rev. (Diakon Lutheran Social Ministries), 6.375%, 2039 | 5,045,000 | 5,021,339 | ||||
| Cumberland County, PA, Municipal Authority, Retirement Community Rev. (Wesley), “A”, 7.25%, 2013 (c) | 270,000 | 314,129 | ||||
| Cumberland County, PA, Municipal Authority, Retirement Community Rev. (Wesley), “A”, 7.25%, 2013 (c) | 105,000 | 122,161 | ||||
| Hamden, CT, Facility Rev. (Whitney Center Project), “A”, 7.625%, 2030 | 345,000 | 354,329 | ||||
| Hamden, CT, Facility Rev. (Whitney Center Project), “A”, 7.75%, 2043 | 2,030,000 | 2,076,081 | ||||
| Hawaii Department of Budget & Finance, Special Purpose Rev. (15 Craigside Project), “A”, 8.75%, 2029 | 375,000 | 412,035 | ||||
| Hawaii Department of Budget & Finance, Special Purpose Rev. (15 Craigside Project), “A”, 9%, 2044 | 1,100,000 | 1,203,521 | ||||
| Indiana Health Facilities Financing Authority Rev. (Hoosier Care, Inc.), “A”, 7.125%, 2034 | 765,000 | 633,527 | ||||
| Iowa Finance Authority, Health Care Facilities Rev. (Care Initiatives), 9.25%, 2011 (c) | 440,000 | 492,976 | ||||
22
Table of Contents
Portfolio of Investments – continued
| Issuer | Shares/Par | Value ($) | ||||
| Municipal Bonds - continued | ||||||
| Healthcare Revenue - Long Term Care - continued | ||||||
| Iowa Finance Authority, Health Care Facilities Rev. (Care Initiatives), “A”, 5.5%, 2025 | $ | 1,205,000 | $ | 975,014 | ||
| Millbrae, CA, Residential Facilities Rev. (Magnolia of Millbrae), “A”, 7.375%, 2027 | 780,000 | 773,518 | ||||
| Shelby County, TN, Health, Educational & Housing Facilities Board Rev. (Germantown Village), “A”, 7.25%, 2034 | 385,000 | 369,207 | ||||
| Tarrant County, TX, Cultural Education Facilities Finance Corp. Retirement Facility (Air Force Village), 6.125%, 2029 | 395,000 | 389,869 | ||||
| Tarrant County, TX, Cultural Education Facilities Finance Corp. Retirement Facility (Air Force Village), 6.375%, 2044 | 3,100,000 | 3,001,110 | ||||
| Tarrant County, TX, Cultural Education Facilities Finance Corp. Retirement Facility (Stayton Museum Way), 8.25%, 2044 | 4,500,000 | 4,408,785 | ||||
| Travis County, TX, Health Facilities Development Corp. Rev. (Westminster Manor Health), 7%, 2030 | 735,000 | 734,949 | ||||
| Travis County, TX, Health Facilities Development Corp. Rev. (Westminster Manor Health), 7.125%, 2040 | 1,110,000 | 1,110,322 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (St. John’s Community, Inc.), “A”, 7.25%, 2029 | 430,000 | 442,995 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (St. John’s Community, Inc.), “A”, 7.625%, 2039 | 1,390,000 | 1,454,079 | ||||
| $ | 30,584,170 | |||||
| Human Services - 0.1% | ||||||
| Louisiana Local Government, Environmental Facilities & Community Development Authority Rev. (Westside Rehab Center Project), “B”, 6.5%, 2013 | $ | 120,000 | $ | 120,136 | ||
| Nassau County, NY, Industrial Development Civic (Special Needs Facilities), 6.1%, 2012 | 95,000 | 92,882 | ||||
| Orange County, FL, Health Facilities Authority Rev. (GF/Orlando Healthcare Facilities), 9%, 2031 | 1,000,000 | 995,070 | ||||
| $ | 1,208,088 | |||||
| Industrial Revenue - Airlines - 0.9% | ||||||
| Clayton County, GA, Development Authority Special Facilities Rev. (Delta Airlines, Inc.), “A”, 8.75%, 2029 | $ | 1,295,000 | $ | 1,362,340 | ||
| Clayton County, GA, Development Authority Special Facilities Rev. (Delta Airlines, Inc.), “B”, 9%, 2035 | 970,000 | 994,153 | ||||
| Dallas Fort Worth, TX, International Airport Facility Improvement Corp. (American Airlines, Inc.), 5.5%, 2030 | 740,000 | 507,536 | ||||
| Denver, CO, City & County Airport Rev. (United Airlines), 5.25%, 2032 | 720,000 | 544,543 | ||||
| Denver, CO, City & County Airport Rev. (United Airlines), 5.75%, 2032 | 615,000 | 498,328 | ||||
23
Table of Contents
Portfolio of Investments – continued
| Issuer | Shares/Par | Value ($) | ||||
| Municipal Bonds - continued | ||||||
| Industrial Revenue - Airlines - continued | ||||||
| Los Angeles, CA, Regional Airport Lease Rev. (American Airlines, Inc.), “C”, 7%, 2012 | $ | 235,000 | $ | 234,859 | ||
| Los Angeles, CA, Regional Airport Lease Rev. (American Airlines, Inc.), “C”, 7.5%, 2024 | 1,435,000 | 1,424,855 | ||||
| New Jersey Economic Development Authority, Special Facilities Rev. (Continental Airlines, Inc.), 6.25%, 2029 | 1,500,000 | 1,382,880 | ||||
| New York, NY, City Industrial Development Agencies Rev. (American Airlines, Inc.), 7.5%, 2016 | 1,670,000 | 1,688,938 | ||||
| New York, NY, City Industrial Development Agencies Rev. (American Airlines, Inc.), 7.625%, 2025 | 2,865,000 | 2,900,526 | ||||
| New York, NY, City Industrial Development Agencies Rev. (American Airlines, Inc.), 7.75%, 2031 | 3,000,000 | 3,032,400 | ||||
| $ | 14,571,358 | |||||
| Industrial Revenue - Chemicals - 0.9% | ||||||
| Brazos River, TX, Harbor Navigation District (Dow Chemical Co.), 5.7%, 2033 (b) | $ | 4,500,000 | $ | 4,734,000 | ||
| Brazos River, TX, Harbor Navigation District (Dow Chemical Co.), “B-2”, 4.95%, 2033 | 2,295,000 | 2,153,697 | ||||
| Louisiana Environmental Facilities & Community Development Authority Rev. (Westlake Chemical), 6.75%, 2032 | 1,600,000 | 1,649,504 | ||||
| Michigan Strategic Fund Ltd. Obligation Rev. (Dow Chemical Co.), 6.25%, 2014 | 4,870,000 | 5,437,063 | ||||
| Red River Authority, TX, Pollution Control Rev. (Celanese Project) “B”, 6.7%, 2030 | 1,000,000 | 978,130 | ||||
| $ | 14,952,394 | |||||
| Industrial Revenue - Environmental Services - 0.8% | ||||||
| California Pollution Control Financing Authority, Solid Waste Disposal Rev. (Republic Services, Inc.), “B”, 5.25%, 2023 (b) | $ | 950,000 | $ | 972,772 | ||
| California Pollution Control Financing Authority, Solid Waste Disposal Rev. (Waste Management, Inc.), “A-2”, 5.4%, 2025 | 1,750,000 | 1,772,278 | ||||
| California Pollution Control Financing Authority, Solid Waste Disposal Rev. (Waste Management, Inc.), “C”, 5.125%, 2023 | 1,665,000 | 1,673,758 | ||||
| Carbon County, UT, Solid Waste Disposal Rev. (Laidlaw Environmental), “A”, 7.45%, 2017 | 2,500,000 | 2,507,525 | ||||
| Charles City County, VA, Industrial Development Authority, Solid Waste Disposal Facility Rev. (Waste Management, Inc.), 6.25%, 2027 (b) | 500,000 | 537,015 | ||||
| Colorado Housing & Finance Authority, Solid Waste Rev. (Waste Management, Inc.), 5.7%, 2018 | 1,960,000 | 2,082,794 | ||||
| Director of the State of Nevada Department of Business & Industry Rev. (Republic Services, Inc.), 5.625%, 2026 (b) | 1,950,000 | 2,020,083 | ||||
24
Table of Contents
Portfolio of Investments – continued
| Issuer | Shares/Par | Value ($) | ||||
| Municipal Bonds - continued | ||||||
| Industrial Revenue - Environmental Services - continued | ||||||
| Gulf Coast Waste Disposal Authority (Waste Management, Inc.), 5.2%, 2028 | $ | 300,000 | $ | 297,906 | ||
| Mission, TX, Economic Development Corp., Solid Waste Disposal Rev. (Allied Waste N.A., Inc.), “A”, 5.2%, 2018 | 1,250,000 | 1,253,488 | ||||
| $ | 13,117,619 | |||||
| Industrial Revenue - Metals - 0.0% | ||||||
| Burns Harbor, IN, Solid Waste Disposal Facilities Rev. (Bethlehem Steel), 8%, 2024 (d) | $ | 3,000,000 | $ | 300 | ||
| Industrial Revenue - Other - 2.0% | ||||||
| California Statewide Communities, Development Authority Environmental Facilities (Microgy Holdings), 9%, 2038 (d) | $ | 133,863 | $ | 26,103 | ||
| Gulf Coast, TX, Industrial Development Authority Rev. (Valero Energy Corp.), 5.6%, 2031 | 500,000 | 445,395 | ||||
| Gulf Coast, TX, Industrial Development Authority, Facilities Rev. (Microgy Holdings), 7%, 2036 (d) | 123,154 | 24,015 | ||||
| Hardeman County, TN, Correctional Facilities Corp. (Corrections Corp. of America), 7.375%, 2017 | 500,000 | 498,670 | ||||
| Houston, TX, Industrial Development Corp. (United Parcel Service, Inc.), 6%, 2023 | 365,000 | 326,584 | ||||
| Liberty, NY, Development Corp. Rev. (Goldman Sachs Headquarters), 5.25%, 2035 | 4,360,000 | 4,402,859 | ||||
| Massachusetts Development Finance Agency Rev., Resource Recovery (Fluor Corp.), 5.625%, 2019 | 11,545,000 | 11,690,582 | ||||
| Massachusetts Industrial Finance Agency Rev. (Welch Foods, Inc.), 5.6%, 2017 | 1,300,000 | 1,303,575 | ||||
| Park Creek Metropolitan District, CO, Rev. (Custodial Receipts), “CR-2”, 7.875%, 2032 (b)(n) | 400,000 | 408,000 | ||||
| Peninsula Ports Authority, VA, Coal Terminal Rev. (Dominion Terminal Associates), 6%, 2033 | 470,000 | 477,130 | ||||
| Pennsylvania Economic Development Financing Authority Rev. (Amtrak), 6.125%, 2021 | 550,000 | 563,118 | ||||
| Pennsylvania Economic Development Financing Authority, Finance Authority Facilities Rev. (Amtrak), “A”, 6.25%, 2031 | 950,000 | 963,899 | ||||
| Port Corpus Christi, TX, Nueces County General Rev. (Union Pacific Corp.), 5.35%, 2010 | 670,000 | 672,191 | ||||
| St. John the Baptist Parish, LA (Marathon Oil Corp.), “A”, 5.125%, 2037 | 3,955,000 | 3,657,861 | ||||
| Tooele County, UT, Hazardous Waste Treatment Rev. (Union Pacific Corp.), 5.7%, 2026 | 6,125,000 | 6,151,828 | ||||
| $ | 31,611,810 | |||||
25
Table of Contents
Portfolio of Investments – continued
| Issuer | Shares/Par | Value ($) | ||||
| Municipal Bonds - continued | ||||||
| Industrial Revenue - Paper - 0.6% | ||||||
| Butler, AL, Industrial Development Board, Solid Waste Disposal Rev. (Georgia Pacific Corp.), 5.75%, 2028 | $ | 1,760,000 | $ | 1,614,078 | ||
| Delta County, MI, Economic Development Corp., Environmental Improvement Rev. (Mead Westvaco Escanaba), “A”, 6.25%, 2012 (c) | 2,400,000 | 2,652,984 | ||||
| Effingham County, GA, Industrial Development Authority, Pollution Control (Georgia Pacific Corp. Project), 6.5%, 2031 | 1,125,000 | 1,136,768 | ||||
| Hodge, LA, Utilities Rev. (Stone Container Corp.), 7.45%, 2024 (d) | 280,000 | 302,400 | ||||
| Jay, ME, Solid Waste Disposal Rev. (International Paper Co.), “A”, 5.125%, 2018 | 1,500,000 | 1,440,090 | ||||
| Rockdale County, GA, Development Authority Project Rev. (Visy Paper Project), “A”, 6.125%, 2034 | 2,055,000 | 1,831,991 | ||||
| Sabine River Authority Rev., Louisiana Water Facilities (International Paper Co.), 6.2%, 2025 | 1,250,000 | 1,271,063 | ||||
| West Point, VA, Industrial Development Authority, Solid Waste Disposal Rev. (Chesapeake Corp.), “A”, 6.375%, 2019 (d) | 550,000 | 5,665 | ||||
| $ | 10,255,039 | |||||
| Miscellaneous Revenue - Entertainment & Tourism - 0.7% | ||||||
| Brooklyn, NY, Arena Local Development Corp. (Barclays Center Project), 6%, 2030 | $ | 2,015,000 | $ | 2,047,724 | ||
| Brooklyn, NY, Arena Local Development Corp. (Barclays Center Project), 6.25%, 2040 | 1,310,000 | 1,346,012 | ||||
| Brooklyn, NY, Arena Local Development Corp. (Barclays Center Project), 6.375%, 2043 | 1,010,000 | 1,042,320 | ||||
| New York Liberty Development Corp. Rev. (National Sports Museum), “A”, 6.125%, 2019 (d) | 233,199 | 700 | ||||
| New York, NY, City Industrial Development Agency Rev. (Queens Baseball Stadium), ASSD GTY, 6.125%, 2029 | 585,000 | 644,559 | ||||
| New York, NY, City Industrial Development Agency Rev. (Queens Baseball Stadium), ASSD GTY, 6.375%, 2039 | 440,000 | 480,080 | ||||
| New York, NY, City Industrial Development Agency Rev. (Queens Baseball Stadium), ASSD GTY, 6.5%, 2046 | 1,750,000 | 1,924,703 | ||||
| Seminole Tribe, FL, Special Obligation Rev., “A”, 5.75%, 2022 (n) | 2,850,000 | 2,780,660 | ||||
| Seneca Nation Indians, NY, Capital Improvements Authority, Special Obligation, 5%, 2023 (n) | 670,000 | 571,215 | ||||
| $ | 10,837,973 | |||||
| Miscellaneous Revenue - Other - 1.1% | ||||||
| Austin, TX, Convention Center (Convention Enterprises, Inc.), “A”, 6.6%, 2011 (c) | $ | 300,000 | $ | 313,794 | ||
| Austin, TX, Convention Center (Convention Enterprises, Inc.), “A”, 6.7%, 2011 (c) | 400,000 | 418,684 | ||||
26
Table of Contents
Portfolio of Investments – continued
| Issuer | Shares/Par | Value ($) | ||||
| Municipal Bonds - continued | ||||||
| Miscellaneous Revenue - Other - continued | ||||||
| Austin, TX, Convention Center (Convention Enterprises, Inc.), “A”, SYNCORA, 5.25%, 2017 | $ | 845,000 | $ | 821,137 | ||
| Austin, TX, Convention Center (Convention Enterprises, Inc.), “A”, SYNCORA, 5.25%, 2019 | 1,375,000 | 1,300,173 | ||||
| Austin, TX, Convention Center (Convention Enterprises, Inc.), “A”, SYNCORA, 5.25%, 2020 | 1,120,000 | 1,046,091 | ||||
| Austin, TX, Convention Center (Convention Enterprises, Inc.), “A”, SYNCORA, 5.25%, 2024 | 2,230,000 | 2,026,178 | ||||
| Austin, TX, Convention Center (Convention Enterprises, Inc.), “B”, 5.75%, 2034 | 520,000 | 429,151 | ||||
| Dallas, TX, Civic Center Convention Complex Rev., ASSD GTY, 5.25%, 2034 | 4,180,000 | 4,298,001 | ||||
| New Orleans, LA, Aviation Board Gulf Opportunity Zone CFC Rev. (Consolidated Rental Car), “A”, 6.25%, 2030 | 1,810,000 | 1,871,269 | ||||
| Oklahoma Industries Authority Rev. (Oklahoma Medical Research Foundation Project), 5.5%, 2029 | 4,400,000 | 4,540,668 | ||||
| Toledo-Lucas County, OH, Port Authority Development Rev. (Northwest Ohio Bond Fund), “C”, 5.125%, 2025 | 135,000 | 116,717 | ||||
| $ | 17,181,863 | |||||
| Multi-Family Housing Revenue - 0.4% | ||||||
| Bay County, FL, Housing Finance Authority, Multi-Family Rev. (Andrews Place II Apartments), AGM, 5%, 2035 | $ | 545,000 | $ | 514,311 | ||
| Bay County, FL, Housing Finance Authority, Multi-Family Rev. (Andrews Place II Apartments), AGM, 5.1%, 2046 | 1,270,000 | 1,188,491 | ||||
| Eden Prairie, MN, Multi-Family Rev. (Coll-Rolling Hills), “A”, GNMA, 6%, 2021 | 200,000 | 213,204 | ||||
| Indianapolis, IN, Multi-Family Rev. (Cambridge Station Apartments II), FNMA, 5.25%, 2039 (b) | 1,375,000 | 1,366,805 | ||||
| Michigan Housing Development Authority, GNMA, 5.2%, 2038 | 1,200,000 | 1,165,272 | ||||
| MuniMae TE Bond Subsidiary LLC, “A-2”, 4.9%, 2049 (z) | 2,000,000 | 1,500,220 | ||||
| North Charleston, SC, Housing Authority Rev. (Horizon Village), “A”, GNMA, 5.15%, 2048 | 305,000 | 292,736 | ||||
| $ | 6,241,039 | |||||
| Sales & Excise Tax Revenue - 2.2% | ||||||
| Illinois Sales Tax Rev., “P”, 6.5%, 2022 | $ | 5,000,000 | $ | 5,797,450 | ||
| Massachusetts Bay Transportation Authority, Sales Tax Rev., “A-1”, 5.25%, 2029 | 2,795,000 | 3,203,489 | ||||
| Massachusetts Bay Transportation Authority, Sales Tax Rev., Capital Appreciation, “A-2”, 0%, 2028 | 6,930,000 | 2,820,857 | ||||
| Massachusetts School Building Authority, Dedicated Sales Tax Rev., AMBAC, 4.75%, 2032 | 3,950,000 | 4,006,130 | ||||
27
Table of Contents
Portfolio of Investments – continued
| Issuer | Shares/Par | Value ($) | ||||
| Municipal Bonds - continued | ||||||
| Sales & Excise Tax Revenue - continued | ||||||
| Metropolitan Atlanta, GA, Rapid Transit Authority Rev., 6.25%, 2018 | $ | 4,580,000 | $ | 5,245,474 | ||
| Metropolitan Pier & Expo, IL, McCormick Place Expansion, NATL, 5.25%, 2042 | 3,340,000 | 3,409,505 | ||||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “A”, 5.5%, 2028 | 6,745,000 | 7,075,235 | ||||
| Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., Capital Appreciation, “A”, 0%, 2033 | 2,345,000 | 1,395,041 | ||||
| State of Illinois, “B”, 5.25%, 2034 | 1,275,000 | 1,324,827 | ||||
| Utah Transit Authority Sales Tax Rev., Capital Appreciation, “A”, NATL, 0%, 2028 | 2,225,000 | 786,871 | ||||
| $ | 35,064,879 | |||||
| Single Family Housing - Local - 1.9% | ||||||
| Adams County, CO, Single Family Mortgage Rev., ETM, 8.875%, 2011 (c) | $ | 2,510,000 | $ | 2,786,426 | ||
| Brevard County, FL, Housing Finance Authority Rev., “B”, GNMA, 6.5%, 2022 | 96,000 | 102,963 | ||||
| Calcasieu Parish, LA, Public Trust Authority, Single Family Mortgage Rev., “A”, GNMA, 6.05%, 2032 | 1,635,000 | 1,668,338 | ||||
| California Rural Home Mortgage Finance Authority Rev., GNMA, 7.3%, 2031 | 25,000 | 26,331 | ||||
| Chicago, IL, Single Family Mortgage Rev., “A”, GNMA, 5.5%, 2043 | 2,135,000 | 2,203,598 | ||||
| Chicago, IL, Single Family Mortgage Rev., “B”, GNMA, 6%, 2033 | 320,000 | 330,221 | ||||
| Chicago, IL, Single Family Mortgage Rev., “C”, GNMA, 7%, 2032 | 70,000 | 73,856 | ||||
| Chicago, IL, Single Family Mortgage Rev., “C”, GNMA, 5.5%, 2038 | 1,475,000 | 1,527,112 | ||||
| Chicago, IL, Single Family Mortgage Rev., “C”, GNMA, 5.75%, 2042 | 2,850,000 | 2,937,410 | ||||
| Cook County, IL, Single Family Mortgage Rev., Capital Appreciation, “A”, 0%, 2015 | 155,000 | 42,951 | ||||
| Denver, CO, Single Family Mortgage Rev., GNMA, 7.3%, 2031 | 70,000 | 70,494 | ||||
| Escambia County, FL, Single Family Mortgage Rev., GNMA, 6.95%, 2024 | 110,000 | 115,949 | ||||
| Jefferson Parish, LA, Single Family Mortgage Rev., “B-1”, GNMA, 6.625%, 2023 | 430,000 | 453,405 | ||||
| Jefferson Parish, LA, Single Family Mortgage Rev., “D-1”, GNMA, 7.5%, 2026 | 35,000 | 37,111 | ||||
| Manatee County, FL, Housing Finance Mortgage Rev., Single Family, Sub-Series 2, GNMA, 6.5%, 2023 | 50,000 | 52,225 | ||||
| Manatee County, FL, Housing Finance Mortgage Rev., Single Family, Sub-Series 3, GNMA, 5.3%, 2028 | 390,000 | 391,431 | ||||
| Manatee County, FL, Housing Finance Mortgage Rev., Single Family, Sub-Series 3, GNMA, 5.4%, 2029 | 185,000 | 184,758 | ||||
28
Table of Contents
Portfolio of Investments – continued
| Issuer | Shares/Par | Value ($) | ||||
| Municipal Bonds - continued | ||||||
| Single Family Housing - Local - continued | ||||||
| Nortex Housing Financing Corp., TX, Single Family Mortgage Rev., “A”, GNMA, 5.5%, 2038 | $ | 2,660,000 | $ | 2,737,034 | ||
| Oklahoma County, OK, Home Finance Authority, Single Family Mortgage Rev., “A”, GNMA, 5.4%, 2038 | 1,820,000 | 1,832,431 | ||||
| Permian Basin Housing Finance Corp., TX, Single Family Mortgage Backed Securities (Mortgage Backed Project) “A”, GNMA, 5.65%, 2038 | 1,410,000 | 1,455,501 | ||||
| Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., “A”, GNMA, 6.45%, 2029 | 395,000 | 405,302 | ||||
| Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., “A”, GNMA, 5.9%, 2035 | 535,000 | 542,677 | ||||
| Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., “A”, GNMA, 6.25%, 2035 | 255,000 | 269,344 | ||||
| Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., “A”, GNMA, 5.8%, 2036 | 1,885,000 | 1,956,950 | ||||
| Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., “A”, GNMA, 5.45%, 2038 | 3,130,000 | 3,222,429 | ||||
| Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., “A-1”, GNMA, 5.75%, 2037 | 190,000 | 192,761 | ||||
| Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., “A-3”, GNMA, 6%, 2035 | 580,000 | 594,889 | ||||
| Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., “A-3”, GNMA, 5.5%, 2037 | 1,040,000 | 1,082,827 | ||||
| Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., “A-4”, GNMA, 5.85%, 2037 | 270,000 | 285,393 | ||||
| Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., “A-5”, GNMA, 5.8%, 2027 | 725,000 | 753,166 | ||||
| Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., “A-5”, GNMA, 5.7%, 2036 | 1,605,000 | 1,647,757 | ||||
| Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., “A-5”, GNMA, 5.9%, 2037 | 370,000 | 378,506 | ||||
| Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., “B-2”, GNMA, 6.45%, 2033 | 615,000 | 635,953 | ||||
| $ | 30,997,499 | |||||
| Single Family Housing - State - 1.3% | ||||||
| California Housing Finance Agency Rev., “G”, 5.5%, 2042 | $ | 3,505,000 | $ | 3,531,007 | ||
| California Housing Finance Agency Rev., Home Mortgage, Capital Appreciation, AGM, 0%, 2019 | 3,075,000 | 1,786,575 | ||||
| California Housing Finance Agency Rev., Home Mortgage, Capital Appreciation, NATL, 0%, 2028 | 2,170,000 | 697,503 | ||||
| Colorado Housing & Finance Authority Rev., 6.05%, 2016 | 85,000 | 88,202 | ||||
29
Table of Contents
Portfolio of Investments – continued
| Issuer | Shares/Par | Value ($) | ||||
| Municipal Bonds - continued | ||||||
| Single Family Housing - State - continued | ||||||
| Colorado Housing & Finance Authority Rev., 7.45%, 2016 | $ | 95,000 | $ | 102,005 | ||
| Colorado Housing & Finance Authority Rev., 6.875%, 2028 | 15,000 | 15,239 | ||||
| Colorado Housing & Finance Authority Rev., 6.8%, 2030 | 120,000 | 122,642 | ||||
| Colorado Housing & Finance Authority Rev., “B-2”, 6.1%, 2023 | 65,000 | 65,917 | ||||
| Colorado Housing & Finance Authority Rev., “B-3”, 6.55%, 2025 | 19,000 | 19,138 | ||||
| Colorado Housing & Finance Authority Rev., “B-3”, 6.55%, 2033 | 65,000 | 67,961 | ||||
| Colorado Housing & Finance Authority Rev., “C-2”, 5.9%, 2023 | 455,000 | 478,760 | ||||
| Colorado Housing & Finance Authority Rev., “C-2”, FHA, 6.6%, 2032 | 400,000 | 428,972 | ||||
| Colorado Housing & Finance Authority Rev., “C-3”, 6.75%, 2021 | 100,000 | 104,223 | ||||
| Colorado Housing & Finance Authority Rev., “C-3”, FHA, 6.375%, 2033 | 45,000 | 46,423 | ||||
| Colorado Housing & Finance Authority Rev., Single Family Program, “C-2”, 8.4%, 2021 | 70,000 | 75,000 | ||||
| Colorado Housing & Finance Authority, “B-2”, 7.25%, 2031 | 125,000 | 129,061 | ||||
| Delaware Housing Authority Rev. (Single Family), “C”, 6.25%, 2037 | 1,375,000 | 1,456,208 | ||||
| Iowa Finance Authority Single Family Mortgage Rev. (Mortgage Backed Securities), “A”, GNMA, 5%, 2028 | 1,035,000 | 1,055,472 | ||||
| Iowa Finance Authority Single Family Mortgage Rev. (Mortgage Backed Securities), “A”, GNMA, 5.3%, 2033 | 725,000 | 745,351 | ||||
| Louisiana Housing Finance Agency, Single Family Mortgage Rev., GNMA, 6.375%, 2033 | 365,000 | 372,267 | ||||
| Mississippi Home Corp., Single Family Rev., “A”, GNMA, 6.1%, 2034 | 1,305,000 | 1,321,052 | ||||
| Missouri Housing Development Commission, Single Family Mortgage Rev. (Home Loan Program), GNMA, 7.45%, 2031 | 60,000 | 61,976 | ||||
| Missouri Housing Development Commission, Single Family Mortgage Rev. (Home Loan Program), GNMA, 6.35%, 2032 | 95,000 | 95,425 | ||||
| Missouri Housing Development Commission, Single Family Mortgage Rev. (Home Loan Program), GNMA, 6.85%, 2032 | 225,000 | 232,112 | ||||
| Missouri Housing Development Commission, Single Family Mortgage Rev. (Home Loan Program), GNMA, 6.75%, 2034 | 210,000 | 218,824 | ||||
| New Hampshire Housing Finance Authority Rev., 6.85%, 2030 | 410,000 | 437,679 | ||||
| New Hampshire Housing Finance Authority Rev., “B”, 5.875%, 2030 | 165,000 | 166,733 | ||||
| New Hampshire Housing Finance Authority Rev., “B”, 6.3%, 2031 | 115,000 | 118,572 | ||||
| New Hampshire Housing Finance Authority Rev., “B”, 6.5%, 2035 | 300,000 | 315,201 | ||||
| New Mexico Mortgage Finance Authority Rev., GNMA, 6.25%, 2032 | 850,000 | 890,809 | ||||
| New Mexico Mortgage Finance Authority Rev., GNMA, 5.95%, 2037 | 1,300,000 | 1,328,834 | ||||
| New Mexico Mortgage Finance Authority Rev., “B-2”, GNMA, 6.35%, 2033 | 390,000 | 399,446 | ||||
| New Mexico Mortgage Finance Authority Rev., “I”, GNMA, 5.75%, 2038 | 1,595,000 | 1,671,576 | ||||
30
Table of Contents
Portfolio of Investments – continued
| Issuer | Shares/Par | Value ($) | ||||
| Municipal Bonds - continued | ||||||
| Single Family Housing - State - continued | ||||||
| Ohio Housing Finance Agency Mortgage Rev., Residential Mortgage Backed, “C”, GNMA, 5.9%, 2035 | $ | 495,000 | $ | 499,381 | ||
| Oregon Health & Community Services (Single Family Mortgage), “B”, 6.25%, 2031 | 1,505,000 | 1,550,842 | ||||
| Texas Affordable Housing Corp. (Single Family Mortgage), “B”, GNMA, 5.25%, 2039 | 500,000 | 504,365 | ||||
| Washington Housing Finance Commission Rev., Single Family Housing, GNMA, 5%, 2023 | 265,000 | 263,203 | ||||
| $ | 21,463,956 | |||||
| Solid Waste Revenue - 0.4% | ||||||
| Delaware County, PA, Industrial Development Authority, Resource Recovery Facilities Rev. (American Ref-Fuel Co.), “A”, 6.2%, 2019 | $ | 1,750,000 | $ | 1,751,243 | ||
| Hudson County, NJ, Solid Waste System Rev., 5.9%, 2015 | 735,000 | 709,363 | ||||
| Massachusetts Development Finance Agency, Resource Recovery Rev. (Ogden Haverhill Associates), “A”, 6.7%, 2014 | 1,555,000 | 1,571,001 | ||||
| Massachusetts Development Finance Agency, Resource Recovery Rev. (Ogden Haverhill Associates), “A”, 5.6%, 2019 | 1,000,000 | 931,370 | ||||
| Pennsylvania Economic Development Financing Authority, Sewer Sludge Disposal Rev. (Philadelphia Biosolids Facility), 6.25%, 2032 | 575,000 | 590,537 | ||||
| $ | 5,553,514 | |||||
| State & Agency - Other - 0.2% | ||||||
| Commonwealth of Puerto Rico (Mepsi Campus), “A”, 6.25%, 2024 | $ | 600,000 | $ | 577,356 | ||
| Commonwealth of Puerto Rico (Mepsi Campus), “A”, 6.5%, 2037 | 1,200,000 | 1,094,700 | ||||
| Massachusetts Development Finance Agency (Visual & Performing Arts), 6%, 2021 | 1,000,000 | 1,126,670 | ||||
| $ | 2,798,726 | |||||
| State & Local Agencies - 8.1% | ||||||
| Alabama Building Renovation Authority, AMBAC, 6%, 2015 | $ | 1,610,000 | $ | 1,646,064 | ||
| Alabama Building Renovation Authority, AMBAC, 6%, 2016 | 1,705,000 | 1,742,851 | ||||
| Allen County, IN (Jail Building Corp.), First Mortgage, 5.75%, 2011 (c) | 2,750,000 | 2,922,315 | ||||
| California Public Works Board Lease Rev. (Various Capital Projects), “G-1”, 5.75%, 2030 | 2,950,000 | 2,949,971 | ||||
| Colorado State Board of Governors, University Enterprise System Rev., “A”, 5%, 2034 | 1,000,000 | 1,040,770 | ||||
| Delaware Valley, PA, Regional Finance Authority, AMBAC, 5.5%, 2018 | 1,900,000 | 2,091,406 | ||||
| Delaware Valley, PA, Regional Finance Authority, AMBAC, 5.5%, 2018 | 6,260,000 | 6,890,632 | ||||
31
Table of Contents
Portfolio of Investments – continued
| Issuer | Shares/Par | Value ($) | ||||
| Municipal Bonds - continued | ||||||
| State & Local Agencies - continued | ||||||
| Delaware Valley, PA, Regional Finance Authority, “B”, FRN, AMBAC, 1.199%, 2018 | $ | 250,000 | $ | 250,000 | ||
| Delaware Valley, PA, Regional Finance Authority, “C”, FRN, 0.919%, 2037 | 7,000,000 | 4,965,730 | ||||
| Delaware Valley, PA, Regional Finance Authority, RITES, AMBAC, 9.859%, 2018 (p) | 900,000 | 1,081,332 | ||||
| Fayette County, GA (Criminal Justice Center), 6.25%, 2010 (c) | 1,000,000 | 1,019,140 | ||||
| FYI Properties Lease Rev. (Washington State Project), 5.5%, 2034 | 2,255,000 | 2,405,070 | ||||
| Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., Enhanced, “A”, AGM, 0% to 2010, 4.55% to 2022 | 3,415,000 | 3,152,489 | ||||
| Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., Enhanced, “A-1”, AMBAC, 0% to 2010, 4.6% to 2023 | 995,000 | 876,724 | ||||
| Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., Enhanced, “A”, AMBAC, 5%, 2029 | 10,000,000 | 9,200,000 | ||||
| Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., Enhanced, “A”, FGIC, 5%, 2035 | 1,000,000 | 888,110 | ||||
| Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., Enhanced, “A”, FGIC, 5%, 2038 | 7,135,000 | 6,214,157 | ||||
| Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., Enhanced, “A”, 5%, 2045 | 6,260,000 | 5,371,143 | ||||
| Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., Enhanced, “B”, 5.5%, 2013 (c) | 5,000,000 | 5,618,450 | ||||
| Illinois Dedicated Tax Rev. (Civic Center), AMBAC, 6.25%, 2011 | 1,930,000 | 2,031,904 | ||||
| Los Angeles, CA, Municipal Improvement Corp. Lease Rev. (Real Property), “E”, 6%, 2039 | 2,580,000 | 2,720,042 | ||||
| Manassas Park, VA, Economic Development Authority Lease Rev., “A”, 6%, 2035 | 845,000 | 833,018 | ||||
| Mississippi Development Bank (Harrison County Coliseum), “A”, 5.25%, 2034 | 3,755,000 | 4,059,531 | ||||
| New York Dormitory Authority Rev. (City University), 5.75%, 2013 | 5,000,000 | 5,315,100 | ||||
| New York Metropolitan Transportation Authority, “A”, 5.125%, 2029 | 5,195,000 | 5,336,408 | ||||
| Palm Springs, CA, Finance Lease Rev. (Convention Center), “A”, NATL, 5.5%, 2035 | 7,000,000 | 6,821,640 | ||||
| Pennsylvania Convention Center Authority Rev., ETM, FGIC, 6.7%, 2016 (c)(f) | 23,610,000 | 27,128,362 | ||||
| Philadelphia, PA, Municipal Authority Rev., 6.5%, 2034 | 1,020,000 | 1,067,991 | ||||
| San Bernardino, CA, Joint Powers Financing Authority Lease Rev. (California Department of Transportation), 5.5%, 2014 | 10,000,000 | 10,013,300 | ||||
| Tennessee School Bond Authority, “B”, 5.125%, 2033 | 1,500,000 | 1,594,095 | ||||
| West Valley City, Utah Municipal Building Lease Rev., “A”, AMBAC, 5.5%, 2012 (c) | 2,000,000 | 2,209,220 | ||||
| $ | 129,456,965 | |||||
32
Table of Contents
Portfolio of Investments – continued
| Issuer | Shares/Par | Value ($) | ||||
| Municipal Bonds - continued | ||||||
| Student Loan Revenue - 0.3% | ||||||
| Access to Loans for Learning, CA, Student Loan Rev., 7.95%, 2030 | $ | 650,000 | $ | 633,328 | ||
| Massachusetts Educational Financing Authority, Education Loan Rev., “H”, ASSD GTY, 6.35%, 2030 | 3,490,000 | 3,692,629 | ||||
| Massachusetts Educational Financing Authority, Education Loan Rev., “I-A”, 5.5%, 2022 | 225,000 | 234,628 | ||||
| $ | 4,560,585 | |||||
| Tax Assessment - 1.1% | ||||||
| Baltimore, MD, Special Obligation, “A”, 7%, 2038 | $ | 1,285,000 | $ | 1,273,923 | ||
| Capital Region Community Development District, FL, Capital Improvement Rev., “A”, 7%, 2039 | 915,000 | 856,001 | ||||
| Fishhawk Community Development District, FL, 7.04%, 2014 | 80,000 | 75,562 | ||||
| Glendale, CA, Redevelopment Agency, Tax Allocation Rev. (Centeral Glendale Redevelopment Project), 5.5%, 2024 | 2,250,000 | 2,238,638 | ||||
| Grand Bay at Doral Community Development District, FL, “B”, 6%, 2017 | 2,800,000 | 1,791,188 | ||||
| Greyhawk Landing Community Development District, FL, Special Assessment, “B”, 7%, 2012 | 15,000 | 14,766 | ||||
| Heritage Harbour North Community Development District, FL, Capital Improvement Rev., 6.375%, 2038 | 895,000 | 715,794 | ||||
| Homestead 50, FL, Community Development District, Special Assessment, “A”, 6%, 2037 | 1,795,000 | 1,110,800 | ||||
| Homestead 50, FL, Community Development District, Special Assessment, “B”, 5.9%, 2013 | 815,000 | 506,042 | ||||
| Katy, TX, Development Authority Rev., “B”, 6%, 2018 | 475,000 | 429,381 | ||||
| Killarney Community Development District, FL, Special Assessment, “B”, 5.125%, 2010 (d) | 105,000 | 63,003 | ||||
| Lancaster County, SC, Assessment Rev. (Sun City Carolina Lakes), 5.45%, 2037 | 45,000 | 35,515 | ||||
| Magnolia Park Community Development District, FL, Special Assessment, “A”, 6.15%, 2039 | 1,250,000 | 823,250 | ||||
| Main Street Community Development District, FL, “A”, 6.8%, 2038 | 585,000 | 480,847 | ||||
| Main Street Community Development District, FL, “B”, 6.9%, 2017 | 1,210,000 | 1,128,591 | ||||
| Massachusetts Bay Transportation Authority Rev., “A”, 5.25%, 2034 | 2,000,000 | 2,130,480 | ||||
| Noblesville, IN, Redevelopment Authority Lease Rental, 5.25%, 2025 | 2,000,000 | 2,080,460 | ||||
| Panther Trace II, Community Development District, FL, Special Assessment, “B”, 5%, 2010 | 120,000 | 114,876 | ||||
| Parkway Center Community Development District, FL, Special Assessment, “B”, 5.625%, 2014 | 685,000 | 494,344 | ||||
| Tolomato Community Development District, FL, Special Assessment, 6.65%, 2040 | 660,000 | 556,505 | ||||
| Tuscany Reserve Community Development District, FL, Special Assessment, “B”, 5.25%, 2016 | 155,000 | 101,110 | ||||
33
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Portfolio of Investments – continued
| Issuer | Shares/Par | Value ($) | ||||
| Municipal Bonds - continued | ||||||
| Tax Assessment - continued | ||||||
| Washington County, PA, Redevelopment Authority (Victory Centre Project), “A”, 5.45%, 2035 | $ | 120,000 | $ | 98,461 | ||
| $ | 17,119,537 | |||||
| Tobacco - 3.1% | ||||||
| Badger, WI, Tobacco Asset Securitization Corp., 6.125%, 2027 | $ | 2,040,000 | $ | 2,195,101 | ||
| Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 5.125%, 2024 | 2,530,000 | 2,325,171 | ||||
| Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 5.875%, 2030 | 3,315,000 | 2,792,457 | ||||
| Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 5.875%, 2047 | 3,000,000 | 2,177,010 | ||||
| Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 6.5%, 2047 | 5,990,000 | 4,670,703 | ||||
| Buckeye, OH, Tobacco Settlement Financing Authority, “A-3”, 0% to 2012, 6.25% to 2037 | 8,900,000 | 6,059,565 | ||||
| District of Columbia, Tobacco Settlement, 6.25%, 2024 | 1,050,000 | 1,055,124 | ||||
| Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., “A-1”, 6.25%, 2013 (c) | 2,355,000 | 2,603,123 | ||||
| Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., Asset Backed, “A-1”, 5%, 2033 | 475,000 | 370,443 | ||||
| Inland Empire, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., Asset Backed, Capital Appreciation, “C-1”, 0%, 2036 | 1,580,000 | 146,513 | ||||
| Iowa Tobacco Settlement Authority, Tobacco Settlement Rev., Asset Backed, “B”, 5.6%, 2034 | 3,070,000 | 2,587,857 | ||||
| Louisiana Tobacco Settlement Authority Rev., “2001-B”, 5.5%, 2030 | 1,650,000 | 1,653,152 | ||||
| Louisiana Tobacco Settlement Authority Rev., “2001-B”, 5.875%, 2039 | 2,585,000 | 2,400,224 | ||||
| Michigan Tobacco Settlement Finance Authority Rev., Asset Backed, “A”, 6%, 2048 | 4,195,000 | 3,262,284 | ||||
| New Jersey Tobacco Settlement Financing Corp., 5.75%, 2012 (c) | 2,255,000 | 2,424,508 | ||||
| New Jersey Tobacco Settlement Financing Corp., “1-A”, 5%, 2041 | 3,755,000 | 2,417,882 | ||||
| Silicon Valley Tobacco Securitization Authority, CA, Tobacco Settlement Rev. (Santa Clara), Capital Appreciation, “A”, 0%, 2036 | 4,405,000 | 441,733 | ||||
| Silicon Valley Tobacco Securitization Authority, CA, Tobacco Settlement Rev. (Santa Clara), Capital Appreciation, “A”, 0%, 2041 | 3,600,000 | 229,140 | ||||
| South Carolina Tobacco Settlement Authority Rev., “B”, 6.375%, 2011 (c) | 2,000,000 | 2,137,020 | ||||
| Virginia Tobacco Settlement Financing Corp., “B-1”, 5%, 2047 | 3,460,000 | 2,322,663 | ||||
| Washington Tobacco Settlement Authority Rev., 6.5%, 2026 | 195,000 | 199,877 | ||||
| Washington Tobacco Settlement Authority Rev., 6.625%, 2032 | 4,485,000 | 4,510,385 | ||||
| $ | 48,981,935 | |||||
34
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Portfolio of Investments – continued
| Issuer | Shares/Par | Value ($) | ||||
| Municipal Bonds - continued | ||||||
| Toll Roads - 1.3% | ||||||
| E-470 Public Highway Authority Rev., CO, Capital Appreciation “B”, NATL, 0%, 2010 (c) | $ | 5,000,000 | $ | 3,272,000 | ||
| Illinois Toll Highway Authority Rev., “B”, 5.5%, 2033 | 7,905,000 | 8,410,762 | ||||
| Northwest Parkway Public Highway Authority Rev., CO, Capital Appreciation, “C”, ETM, AGM, 0% to 2011, 5.35% to 2016 (c) | 1,000,000 | 1,073,320 | ||||
| Pennsylvania Turnpike Commission, Capital Appreciation, “C”, AGM, 0%, 2033 | 10,965,000 | 8,038,113 | ||||
| $ | 20,794,195 | |||||
| Transportation - Special Tax - 2.0% | ||||||
| Jacksonville, FL, Transportation Authority Rev., ETM, 9.2%, 2015 (c) | $ | 2,000,000 | $ | 2,394,100 | ||
| Metropolitan, NY, Transportation Authority Rev., AMBAC, 5%, 2030 | 5,000,000 | 5,116,400 | ||||
| Metropolitan, NY, Transportation Authority Rev., “A”, AGM, 5%, 2030 | 2,750,000 | 2,824,223 | ||||
| Metropolitan, NY, Transportation Authority Rev., ETM, 5.75%, 2013 (c) | 4,395,000 | 4,687,751 | ||||
| New Jersey Transportation Trust Fund Authority Rev., AGM, 5.5%, 2011 (u) | 15,000,000 | 16,024,200 | ||||
| Pennsylvania Turnpike Commission Oil Franchise Tax Rev., “A”, ETM, AMBAC, 5.25%, 2018 (c) | 1,150,000 | 1,162,961 | ||||
| $ | 32,209,635 | |||||
| Universities - Colleges - 11.5% | ||||||
| Alcorn State University, MS, Educational Building Corp. Rev. (Student Housing Project), “A”, 5.125%, 2034 | $ | 2,500,000 | $ | 2,574,150 | ||
| Alcorn State University, MS, Educational Building Corp. Rev. (Student Housing Project), “A”, 5.25%, 2039 | 1,625,000 | 1,679,730 | ||||
| Allegheny County, PA, Higher Education Building Authority Rev. (Robert Morris University) “A”, 5.9%, 2028 | 1,195,000 | 1,199,732 | ||||
| Allegheny County, PA, Higher Education Building Authority Rev. (Robert Morris University), “A”, 6%, 2038 | 1,725,000 | 1,692,639 | ||||
| Amherst, NY, Industrial Development Agency, Civic Facility Rev. (Daemen College Project), “A”, 6%, 2011 (c) | 1,000,000 | 1,097,700 | ||||
| Anderson, IN, Economic Development Rev. (Anderson University Project), 5%, 2028 | 2,415,000 | 2,179,876 | ||||
| Anderson, IN, Economic Development Rev. (Anderson University Project), 5%, 2032 | 400,000 | 350,528 | ||||
| California Educational Facilities Authority Rev. (California Lutheran University), 5.75%, 2038 | 2,640,000 | 2,648,765 | ||||
| California Educational Facilities Authority Rev. (University Financing Project), 5%, 2026 | 1,620,000 | 1,251,806 | ||||
| California Educational Facilities Authority Rev. (University of Southern California), “A”, 5.25%, 2038 | 4,610,000 | 4,901,767 | ||||
35
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Portfolio of Investments – continued
| Issuer | Shares/Par | Value ($) | ||||
| Municipal Bonds - continued | ||||||
| Universities - Colleges - continued | ||||||
| California Municipal Finance Authority Rev. (Biola University), 5.8%, 2028 | $ | 1,785,000 | $ | 1,838,978 | ||
| California State University Rev., “A”, AMBAC, 5%, 2026 | 6,795,000 | 7,003,131 | ||||
| California Statewide Communities Development Authority Rev. (California Baptist University), “A”, 5.4%, 2027 | 245,000 | 209,453 | ||||
| California Statewide Communities Development Authority Rev. (California Baptist University), “A”, 5.5%, 2038 | 280,000 | 220,122 | ||||
| California Statewide Communities Development Authority Rev. (Lancer Educational Student Housing Project), 7.5%, 2042 | 925,000 | 928,506 | ||||
| College of Charleston, SC, Academic & Administrative Facilities Rev., “B”, SYNCORA, 5.125%, 2034 | 2,400,000 | 2,408,976 | ||||
| Delaware County, PA, Authority College Rev. (Neumann College), 6%, 2025 | 490,000 | 506,430 | ||||
| District of Columbia Rev. (Georgetown University), BHAC, 0% to 2018, 5% to 2040 | 11,570,000 | 6,826,069 | ||||
| Florida State University Board of Governors, System Improvement Rev., 6.25%, 2030 | 2,185,000 | 2,471,978 | ||||
| Forest Grove, OR, Student Housing Rev. (Oak Tree Foundation, Inc.), 5.5%, 2037 | 2,470,000 | 2,200,721 | ||||
| Grand Valley, MI, State University Rev., 5.5%, 2027 | 985,000 | 1,042,189 | ||||
| Grand Valley, MI, State University Rev., 5.625%, 2029 | 480,000 | 508,738 | ||||
| Harris County, TX, Cultural Education Facilities Rev. (Baylor College of Medicine), “D”, 5.625%, 2032 | 4,235,000 | 3,926,184 | ||||
| Houston, TX, Community College Systems, COP, NATL, 7.875%, 2012 (c) | 1,650,000 | 1,895,009 | ||||
| Illinois Finance Authority Rev. (Illinois Institute of Technology), “A”, 5%, 2031 | 2,745,000 | 2,446,811 | ||||
| Illinois Finance Authority Rev. (Illinois Institute of Technology), “A”, 5%, 2036 | 2,790,000 | 2,438,265 | ||||
| Illinois Finance Authority Rev. (Roosevelt University Project), 6.25%, 2029 | 5,300,000 | 5,440,980 | ||||
| Illinois Finance Authority Rev. (Roosevelt University Project), 6.5%, 2039 | 1,225,000 | 1,243,155 | ||||
| Los Angeles, CA, Community College, “B”, AGM, 5%, 2027 | 5,000,000 | 5,108,450 | ||||
| Louisville & Jefferson County, KY, Metro Government College Rev. (Bellarmine University Incorporated Project), 6.125%, 2039 | 3,000,000 | 2,895,390 | ||||
| Lubbock, TX, Educational Facilities Authority Rev. (Lubbock Christian University), 5.125%, 2027 | 2,280,000 | 2,128,380 | ||||
| Lubbock, TX, Educational Facilities Authority Rev. (Lubbock Christian University), 5.25%, 2037 | 2,995,000 | 2,617,630 | ||||
| Marietta, GA, Development Facilities Authority Rev. (Life University), 7%, 2030 | 540,000 | 513,670 | ||||
36
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Portfolio of Investments – continued
| Issuer | Shares/Par | Value ($) | ||||
| Municipal Bonds - continued | ||||||
| Universities - Colleges - continued | ||||||
| Marietta, GA, Development Facilities Authority Rev. (Life University), 7%, 2039 | $ | 645,000 | $ | 601,882 | ||
| Maryland Health & Higher Educational Facilities Authority Rev. (Loyola College), “A”, 5.125%, 2045 | 1,205,000 | 1,209,278 | ||||
| Massachusetts Development Finance Agency Rev. (Boston University), SYNCORA, 6%, 2059 | 6,225,000 | 7,091,084 | ||||
| Massachusetts Development Finance Agency Rev. (Olin College), “B”, SYNCORA, 5.25%, 2033 | 3,750,000 | 3,774,038 | ||||
| Massachusetts Development Finance Agency Rev. (Simmons College), SYNCORA, 5.25%, 2026 | 880,000 | 884,822 | ||||
| Massachusetts Development Finance Agency Rev. (Simmons College), “H”, SYNCORA, 5.25%, 2033 | 420,000 | 400,919 | ||||
| Massachusetts Development Finance Agency Rev. (Smith College), 5%, 2035 | 2,245,000 | 2,305,121 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Harvard University), 5.5%, 2036 (u) | 25,000,000 | 27,765,000 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Simmons College), “I”, 8%, 2029 | 2,030,000 | 2,278,736 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Springfield College), 5.625%, 2040 | 2,110,000 | 2,069,235 | ||||
| Massachusetts Health & Educational Facilities Authority Rev. (Suffolk University), “A”, 6.25%, 2030 | 4,055,000 | 4,257,547 | ||||
| Miami-Dade County, FL, Educational Facilities Authority Rev. (University of Miami), “A”, 5.75%, 2028 | 875,000 | 910,420 | ||||
| Michigan Higher Education Facilities Authority Rev. (College for Creative Studies), 6.125%, 2037 | 3,465,000 | 3,142,963 | ||||
| New Jersey Educational Facilities Authority Rev. (University of Medicine & Dentistry), “B”, 7.5%, 2032 | 4,195,000 | 4,752,893 | ||||
| New York Dormitory Authority Rev., Non-State Supported Debt (Cornell University), “A”, 5%, 2031 | 8,000,000 | 8,450,800 | ||||
| New York Dormitory Authority Rev., Non-State Supported Debt (Pratt Institute), “C”, ASSD GTY, 5%, 2034 | 200,000 | 207,322 | ||||
| Northern Illinois University Rev., Auxiliary Facilities Systems, AMBAC, 5.875%, 2018 | 90,000 | 90,325 | ||||
| Pennsylvania Higher Educational Facilities Authority Rev. (Lasalle University), 5.5%, 2034 | 2,420,000 | 2,246,510 | ||||
| Pennsylvania Higher Educational Facilities Authority Rev. (Lasalle University), “A”, 5.25%, 2027 | 1,210,000 | 1,156,107 | ||||
| Rhode Island, Health & Educational Building Corp. (Rhode Island School of Design), “D”, SYNCORA, 5.5%, 2035 | 9,140,000 | 9,284,229 | ||||
| San Leanna, TX, Educational Facilities Corp., Higher Education Rev. (St. Edwards University), 5%, 2014 | 440,000 | 475,174 | ||||
37
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Portfolio of Investments – continued
| Issuer | Shares/Par | Value ($) | ||||
| Municipal Bonds - continued | ||||||
| Universities - Colleges - continued | ||||||
| San Leanna, TX, Educational Facilities Corp., Higher Education Rev. (St. Edwards University), 5.125%, 2036 | $ | 930,000 | $ | 834,461 | ||
| St. Joseph County, IN, Educational Facilities Rev. (University of Notre Dame), 6.5%, 2026 | 1,000,000 | 1,311,530 | ||||
| Tulsa, OK, Industrial Authority Rev. (University of Tulsa), 6%, 2027 | 4,670,000 | 5,044,954 | ||||
| University of California, “A”, NATL, 4.5%, 2037 | 8,545,000 | 7,999,316 | ||||
| University of Southern Indiana Rev., Student Fee, “J”, ASSD GTY, 5.75%, 2028 | 1,875,000 | 2,060,419 | ||||
| University of Southern Mississippi Educational Building Corp. Rev. (Campus Facilities Project), 5.25%, 2032 | 1,665,000 | 1,778,237 | ||||
| University of Southern Mississippi, Educational Building Corp. Rev. (Campus Facilities Project), 5.375%, 2036 | 610,000 | 652,944 | ||||
| Upland, IN, Economic Development Rev. (Taylor University), 6%, 2018 | 435,000 | 435,135 | ||||
| Upland, IN, Economic Development Rev. (Taylor University), 6.25%, 2023 | 520,000 | 515,315 | ||||
| Washington Higher Education Facilities Authority Rev. (Whitworth University), 5.875%, 2034 | 2,165,000 | 2,232,440 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (Beloit College), “A”, 6.125%, 2035 | 515,000 | 510,710 | ||||
| Wisconsin Health & Educational Facilities Authority Rev. (Beloit College), “A”, 6.125%, 2039 | 1,145,000 | 1,119,787 | ||||
| $ | 184,245,561 | |||||
| Universities - Dormitories - 0.3% | ||||||
| California Statewide Communities Development Authority Rev. (Lancer Educational Student Housing Project), 5.625%, 2033 | $ | 1,025,000 | $ | 823,782 | ||
| California Statewide Communities Development Authority Rev. (Student Housing, SUCI East Campus), 6%, 2040 | 1,655,000 | 1,664,996 | ||||
| Georgia Private College & University Authority Rev. (Mercer Housing Corp.), “A”, 6%, 2021 | 1,000,000 | 983,970 | ||||
| Maryland Economic Development Corp. Student Housing (University of Maryland - College Park), 5.875%, 2043 | 1,035,000 | 1,040,558 | ||||
| $ | 4,513,306 | |||||
| Universities - Secondary Schools - 1.2% | ||||||
| California Statewide Communities Development Authority Rev. (Aspire Public Schools), 6.125%, 2046 | $ | 5,045,000 | $ | 4,891,128 | ||
| California Statewide Communities Development Authority Rev. (Escondido Charter High School), 7.5%, 2011 (c) | 500,000 | 555,760 | ||||
| Colorado Educational & Cultural Facilities Authority Rev. (Academy of Charter Schools Project), 5.625%, 2040 | 1,815,000 | 1,795,434 | ||||
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Portfolio of Investments – continued
| Issuer | Shares/Par | Value ($) | ||||
| Municipal Bonds - continued | ||||||
| Universities - Secondary Schools - continued | ||||||
| Colorado Educational & Cultural Facilities Authority Rev. (Twin Peaks Charter Academy), 7%, 2038 | $ | 4,330,000 | $ | 4,965,384 | ||
| District of Columbia Rev. (Gonzaga College High School), AGM, 5.25%, 2032 | 3,015,000 | 2,941,344 | ||||
| La Vernia, TX, Higher Education Finance Corp. Rev. (KIPP, Inc.), “A”, 6.25%, 2039 | 1,470,000 | 1,508,588 | ||||
| Maryland Health & Higher Educational Facilities Authority Rev. (Washington Christian Academy), 5.5%, 2038 (a) | 100,000 | 45,182 | ||||
| Massachusetts Development Finance Agency Rev. (Milton Academy), “A”, 5%, 2035 | 2,000,000 | 2,072,160 | ||||
| Michigan Municipal Bond Authority Rev. (YMCA Service Learning Academy), 7.625%, 2021 | 400,000 | 400,076 | ||||
| Philadelphia, PA, Authority for Industrial Development Rev. (Mast Charter School), 6%, 2035 | 415,000 | 413,888 | ||||
| $ | 19,588,944 | |||||
| Utilities - Investor Owned - 4.1% | ||||||
| Apache County, AZ, Industrial Development Authority, Pollution Control Rev. (Tucson Electric Power Co.), 5.875%, 2033 | $ | 1,000,000 | $ | 1,000,320 | ||
| Brazos River Authority, TX, Pollution Control Rev. (TXU Energy Co. LLC), 5%, 2041 | 2,460,000 | 1,133,494 | ||||
| Chautauqua County, NY, Industrial Development Agency, Exempt Facilities Rev. (Dunkirk Power), 5.875%, 2042 | 230,000 | 231,941 | ||||
| Chula Vista, CA, Industrial Development Rev. (San Diego Gas), 5.875%, 2034 | 1,840,000 | 2,019,290 | ||||
| Farmington, NM, Pollution Control Rev. (Public Service New Mexico), 6.375%, 2022 | 1,000,000 | 1,005,880 | ||||
| Farmington, NM, Pollution Control Rev. (Public Service New Mexico), “A”, 6.3%, 2016 | 565,000 | 567,249 | ||||
| Farmington, NM, Pollution Control Rev. (Public Service New Mexico), “A”, 5.8%, 2022 | 500,000 | 502,125 | ||||
| Farmington, NM, Pollution Control Rev. (Public Service New Mexico), “C”, 5.8%, 2022 | 4,880,000 | 4,895,421 | ||||
| Hawaii Department of Budget & Finance Special Purpose Rev. (Hawaiian Electric Co. & Subsidiary), 6.5%, 2039 | 3,655,000 | 3,938,482 | ||||
| Hawaii Department of Budget & Finance Special Purpose Rev. (Hawaiian Electric Co. & Subsidiary), “B”, SYNCORA, 5%, 2022 | 4,000,000 | 3,854,400 | ||||
| Maricopa County, AZ, Pollution Control Rev. (El Paso Electric), “B”, 7.25%, 2040 | 1,710,000 | 1,939,397 | ||||
| Maryland Economic Development Corp., Pollution Control Rev. (Potomac Electric Power Co.), 6.2%, 2022 | 1,455,000 | 1,668,056 | ||||
| Massachusetts Development Finance Agency, Solid Waste Disposal Rev. (Dominion Energy Brayton), 5.75%, 2042 (b) | 670,000 | 709,262 | ||||
39
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Portfolio of Investments – continued
| Issuer | Shares/Par | Value ($) | ||||
| Municipal Bonds - continued | ||||||
| Utilities - Investor Owned - continued | ||||||
| Matagorda County, TX, Pollution Control Rev. (Central Power & Light Co.), “A”, 6.3%, 2029 | $ | 2,045,000 | $ | 2,212,670 | ||
| Matagorda County, TX, Pollution Control Rev. (Reliant Energy), 5.95%, 2030 | 750,000 | 717,008 | ||||
| Mecklenburg County, VA, Industrial Development Authority Rev. (UAE Mecklenburg LP), 6.5%, 2017 | 700,000 | 705,145 | ||||
| Michigan Strategic Fund Ltd. Obligation Rev. (Detroit Edison), 5.625%, 2020 | 985,000 | 1,081,806 | ||||
| Michigan Strategic Fund Ltd. Obligation Rev. (Detroit Edison), 5.5%, 2029 (b) | 1,970,000 | 2,193,891 | ||||
| New Hampshire Industrial Development Authority, Pollution Control Rev. (Connecticut Light & Power), 5.9%, 2016 | 4,000,000 | 4,004,600 | ||||
| New Hampshire Industrial Development Authority, Pollution Control Rev. (Connecticut Light & Power), 5.9%, 2018 | 1,000,000 | 1,015,360 | ||||
| New Jersey Economic Development Authority, Water Facilities Rev. (New Jersey American Water Co.), “A”, 5.7%, 2039 | 5,000,000 | 4,978,700 | ||||
| Ohio Air Quality Development Authority Rev. (Ohio Valley Electric Corp.), “E”, 5.625%, 2019 | 1,390,000 | 1,442,528 | ||||
| Owen County, KY, Waterworks System Rev. (American Water Co. Project), “B”, 5.625%, 2039 | 1,670,000 | 1,705,972 | ||||
| Pennsylvania Economic Development Financing Authority (Allegheny Energy Supply Co. LLC), 7%, 2039 | 4,580,000 | 5,048,900 | ||||
| Pima County, AZ, Industrial Development Authority Pollution Control Rev. (Tucson Electric Power Co.), “A”, 4.95%, 2020 | 4,135,000 | 4,104,939 | ||||
| Pima County, AZ, Industrial Development Authority Rev. (Tucson Electric Power Co.), 5.75%, 2029 | 3,715,000 | 3,736,287 | ||||
| Red River Authority, TX, Pollution Control Rev. (AEP Texas Central Co.), NATL, 4.45%, 2020 | 2,060,000 | 1,988,024 | ||||
| Sabine River Authority, TX, Pollution Control Rev. (TXU Electric Co. LLC), 5.75%, 2030 (b) | 1,500,000 | 1,450,605 | ||||
| Sabine River Authority, TX, Pollution Control Rev. (TXU Electric Co. LLC) “A”, 5.5%, 2022 (b) | 500,000 | 485,275 | ||||
| Sweetwater County, WY, Pollution Control Rev. (Idaho Power Co.), 5.25%, 2026 | 4,025,000 | 4,223,553 | ||||
| West Feliciana Parish, LA, Pollution Control Rev. (Entergy Gulf States), 6.6%, 2028 | 905,000 | 905,389 | ||||
| $ | 65,465,969 | |||||
| Utilities - Municipal Owned - 6.6% | ||||||
| Austin, TX, Utility Systems Rev., AMBAC, 6.75%, 2011 | $ | 1,500,000 | $ | 1,631,685 | ||
| Austin, TX, Utility Systems Rev., AMBAC, 6.75%, 2012 | 2,500,000 | 2,821,400 | ||||
| Georgia Municipal Electric Authority Power Rev., AMBAC, 6.5%, 2014 (c) | 145,000 | 169,720 | ||||
40
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Portfolio of Investments – continued
| Issuer | Shares/Par | Value ($) | ||||
| Municipal Bonds - continued | ||||||
| Utilities - Municipal Owned - continued | ||||||
| Georgia Municipal Electric Authority Power Rev., NATL, 6.375%, 2016 | $ | 2,000,000 | $ | 2,226,000 | ||
| Georgia Municipal Electric Authority Power Rev., AMBAC, 6.5%, 2017 | 8,000,000 | 9,293,360 | ||||
| Georgia Municipal Electric Authority Power Rev., NATL, 6.5%, 2020 | 7,350,000 | 8,433,684 | ||||
| Georgia Municipal Electric Authority Power Rev., ETM, AMBAC, 6.5%, 2017 (c) | 365,000 | 427,287 | ||||
| Harris County, TX, Cultural Education Facilities Financial Corp., Thermal Utilities Rev. (Teco Project), “A”, 5.25%, 2035 | 1,560,000 | 1,636,721 | ||||
| Intermountain Power Agency, UT, “A”, ETM, 6.15%, 2014 (c) | 26,955,000 | 28,477,688 | ||||
| Mercer County, ND, Pollution Control Rev. (Antelope Valley Station), AMBAC, 7.2%, 2013 | 3,685,000 | 3,934,143 | ||||
| North Carolina Eastern Municipal Power Agency, “A”, NATL, 6.5%, 2018 | 9,250,000 | 10,828,605 | ||||
| North Carolina Municipal Power Agency, Catawba Electric Rev., “A”, NATL, 5.25%, 2019 (u) | 10,000,000 | 10,610,700 | ||||
| Northern California Transmission Agency, NATL, 7%, 2013 | 4,000,000 | 4,272,360 | ||||
| Piedmont, SC, Municipal Power Agency, FGIC, 6.25%, 2021 | 4,150,000 | 4,986,391 | ||||
| South Carolina Public Service Authority, “B”, AGM, 5.125%, 2037 | 8,500,000 | 8,665,495 | ||||
| Washington Public Power Supply System Rev. (Nuclear Project #3), 7.125%, 2016 | 5,145,000 | 6,406,554 | ||||
| Wyoming Municipal Power Agency, Power Supply, “A”, 5%, 2036 | 1,000,000 | 989,920 | ||||
| $ | 105,811,713 | |||||
| Utilities - Other - 2.3% | ||||||
| California M-S-R Energy Authority Gas Rev., “A”, 7%, 2034 | $ | 595,000 | $ | 675,938 | ||
| California M-S-R Energy Authority Gas Rev., “A”, 6.5%, 2039 | 1,810,000 | 1,924,012 | ||||
| Georgia Main Street Natural Gas, Inc., Gas Project Rev., “A”, 5%, 2022 | 1,000,000 | 1,021,640 | ||||
| Indiana Bond Bank Special Program, Gas Rev., “A”, 5.25%, 2018 | 1,735,000 | 1,819,998 | ||||
| Main Street Natural Gas, Inc., GA, Gas Project Rev., “A”, 5.5%, 2026 | 845,000 | 826,207 | ||||
| Main Street Natural Gas, Inc., GA, Gas Project Rev., “A”, 5.5%, 2028 | 1,740,000 | 1,688,948 | ||||
| Public Authority for Colorado Energy Natural Gas Purchase Rev., 6.5%, 2038 | 1,685,000 | 1,858,690 | ||||
| Salt Verde Financial Corp., AZ, Senior Gas Rev., 5%, 2032 | 5,645,000 | 4,954,052 | ||||
| Salt Verde Financial Corp., AZ, Senior Gas Rev., 5%, 2037 | 7,790,000 | 6,704,775 | ||||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2017 | 1,575,000 | 1,633,543 | ||||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2019 | 1,500,000 | 1,527,780 | ||||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2022 | 1,665,000 | 1,672,459 | ||||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2023 | 2,385,000 | 2,384,881 | ||||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2024 | 2,215,000 | 2,199,429 | ||||
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| Issuer | Shares/Par | Value ($) | |||||
| Municipal Bonds - continued | |||||||
| Utilities - Other - continued | |||||||
| Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 2026 | $ | 4,390,000 | $ | 4,300,005 | |||
| Tennessee Energy Acquisition Corp., Gas Rev., “C”, 5%, 2025 | 1,350,000 | 1,314,090 | |||||
| $ | 36,506,447 | ||||||
| Water & Sewer Utility Revenue - 4.5% | |||||||
| Atlanta, GA, Water & Wastewater Rev., “A”, 6%, 2022 | $ | 2,770,000 | $ | 3,024,757 | |||
| California Department of Water Resources (Central Valley Project Rev.), “AF”, 5%, 2028 (u) | 23,825,000 | 25,805,572 | |||||
| Commonwealth of Puerto Rico Aqueduct & Sewer Authority Rev., “A”, 6%, 2038 | 3,580,000 | 3,711,314 | |||||
| Commonwealth of Puerto Rico Aqueduct & Sewer Authority Rev., “A”, 6%, 2044 | 1,290,000 | 1,332,131 | |||||
| Detroit, MI, Sewer Disposal System Rev., “B”, AGM, 7.5%, 2033 | 3,835,000 | 4,574,503 | |||||
| Hampton Roads, VA, Sanitation District Wastewater Rev., 5%, 2033 | 910,000 | 965,929 | |||||
| Los Angeles County, CA, Sanitation Districts Financing Authority Rev., AMBAC, 4.5%, 2038 | 7,840,000 | 6,628,642 | |||||
| Massachusetts Water Pollution Abatement, 5.25%, 2028 | 5,985,000 | 7,087,497 | |||||
| Massachusetts Water Resources Authority, “B”, AGM, 5.25%, 2029 | 4,215,000 | 4,802,487 | |||||
| Massachusetts Water Resources Authority, ETM, 6.5%, 2019 (c) | 5,965,000 | 7,193,432 | |||||
| New York Environmental Facilities, ETM, 5%, 2016 (c) | 570,000 | 574,064 | |||||
| New York, NY, Municipal Water & Sewer Finance Authority Rev., AMBAC, 5%, 2039 | 2,000,000 | 2,053,160 | |||||
| San Luis Obispo County, CA, Financing Authority Rev. (Nacimiento Water Project), “A”, BHAC, 5%, 2032 | 3,405,000 | 3,495,948 | |||||
| Spartanburg, SC, Water & Sewer Authority Rev., “B”, NATL, 5.25%, 2030 | 1,175,000 | 1,198,582 | |||||
| $ | 72,448,018 | ||||||
| Total Municipal Bonds (Identified Cost, $1,553,362,791) | $ | 1,616,440,435 | |||||
| Floating Rate Demand Notes - 0.3% | |||||||
| Lincoln County, WY, Pollution Control Rev. (Exxon Mobil Corp.), “B”, 0.23%, due 7/01/17, at Identified Cost | $ | 4,800,000 | $ | 4,800,000 | |||
| Money Market Funds (v) - 0.8% | |||||||
| MFS Institutional Money Market Portfolio, 0.17%, at Cost and Net Asset Value | 12,528,917 | $ | 12,528,917 | ||||
| Total Investments (Identified Cost, $1,570,691,708) | $ | 1,633,769,352 | |||||
| Other Assets, Less Liabilities - (2.2)% | (35,082,706 | ) | |||||
| Net Assets - 100.0% | $ | 1,598,686,646 | |||||
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Portfolio of Investments – continued
| (a) | Non-income producing security. |
| (b) | Mandatory tender date is earlier than stated maturity date. |
| (c) | Refunded bond. |
| (d) | Non-income producing security - in default. |
| (f) | All or a portion of the security has been segregated as collateral for open futures contracts. |
| (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 $3,759,875 representing 0.2% of net assets. |
| (p) | Primary inverse floater. |
| (u) | Underlying security deposited into special purpose trust (“the trust”) by investment banker upon creation of self-deposited inverse floaters. |
| (v) | Underlying fund that is available only to investment companies managed by MFS. The rate quoted is the annualized seven-day yield of the fund at period end. |
| (z) | Restricted securities are not registered under the Securities Act of 1933 and are subject to legal restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are subsequently registered. Disposal of these securities may involve time-consuming negotiations and prompt sale at an acceptable price may be difficult. The fund holds the following restricted securities: |
| Restricted Securities | Acquisition Date | Cost | Current Market Value | |||
| MuniMae TE Bond Subsidiary LLC, “A-2”, 4.9%, 2049 | 10/14/04 | $2,000,000 | $1,500,220 | |||
| % of Net Assets | 0.1% |
The following abbreviations are used in this report and are defined:
| COP | Certificate of Participation |
| ETM | Escrowed to Maturity |
| FRN | Floating Rate Note. Interest rate resets periodically and may not be the rate reported at period end. |
| LOC | Letter of Credit |
| Insurers | Inverse Floaters | |||||
| AGM | Assured Guaranty Municipal | RIBS | Residual Interest Bonds | |||
| AMBAC | AMBAC Indemnity Corp. | RITES | Residual Interest Tax-Exempt Security | |||
| ASSD GTY | Assured Guaranty Insurance Co. | |||||
| BHAC | Berkshire Hathaway Assurance Corp. | |||||
| CHCLI | California Health Construction Loan Insurance | |||||
| FGIC | Financial Guaranty Insurance Co. | |||||
| FHA | Federal Housing Administration | |||||
| FNMA | Federal National Mortgage Assn. | |||||
| GNMA | Government National Mortgage Assn. | |||||
| NATL | National Public Finance Guarantee Corp. | |||||
| PSF | Permanent School Fund | |||||
| SYNCORA | Syncora Guarantee Inc. | |||||
43
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Portfolio of Investments – continued
Derivative Contracts at 3/31/10
Futures Contracts Outstanding at 3/31/10
| Description | Currency | Contracts | Value | Expiration Date | Unrealized Appreciation (Depreciation) | |||||
| Asset Derivatives | ||||||||||
| Interest Rate Futures | ||||||||||
| U.S. Treasury Bond 30 yr (Short) | USD | 293 | $34,024,625 | Jun-10 | $33,311 | |||||
At March 31, 2010, the fund had sufficient cash and/or other liquid securities to cover any commitments under these derivative contracts.
See Notes to Financial Statements
44
Table of Contents
Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
At 3/31/10
This statement represents your fund’s balance sheet, which details the assets and liabilities comprising the total value of the fund.
| Assets | |||
Investments- | |||
Non-affiliated issuers, at value (identified cost, $1,558,162,791) | $1,621,240,435 | ||
Underlying funds, at cost and value | 12,528,917 | ||
Total investments, at value (identified cost, $1,570,691,708) | $1,633,769,352 | ||
Cash | 169 | ||
Receivables for | |||
Investments sold | 5,344,085 | ||
Fund shares sold | 4,655,988 | ||
Interest and dividends | 24,316,538 | ||
Receivable from investment adviser | 80,768 | ||
Other assets | 15,693 | ||
Total assets | $1,668,182,593 | ||
| Liabilities | |||
Payables for | |||
Distributions | $2,194,789 | ||
Daily variation margin on open futures contracts | 137,344 | ||
Investments purchased | 6,520,222 | ||
Fund shares reacquired | 2,830,634 | ||
Payable to the holder of the floating rate certificate from trust assets | 57,318,932 | ||
Payable for interest expense and fees | 118,323 | ||
Payable to affiliates | |||
Investment adviser | 34,498 | ||
Shareholder servicing costs | 140,945 | ||
Distribution and service fees | 18,678 | ||
Administrative services fee | 1,366 | ||
Payable for independent Trustees’ compensation | 58,422 | ||
Accrued expenses and other liabilities | 121,794 | ||
Total liabilities | $69,495,947 | ||
Net assets | $1,598,686,646 | ||
| Net assets consist of | |||
Paid-in capital | $1,536,892,030 | ||
Unrealized appreciation (depreciation) on investments | 63,110,955 | ||
Accumulated net realized gain (loss) on investments | (3,663,857 | ) | |
Undistributed net investment income | 2,347,518 | ||
Net assets | $1,598,686,646 | ||
Shares of beneficial interest outstanding | 191,944,345 |
| Net assets | Shares outstanding | Net asset value per share (a) | ||||
Class A | $632,523,116 | 75,989,169 | $8.32 | |||
Class B | 23,060,386 | 2,766,176 | 8.34 | |||
Class C | 143,503,667 | 17,178,864 | 8.35 | |||
Class A1 | 787,041,195 | 94,503,496 | 8.33 | |||
Class B1 | 12,558,282 | 1,506,640 | 8.34 |
| (a) | Maximum offering price per share was equal to the net asset value per share for all share classes, except for Classes A and A1, for which the maximum offering prices per share were $8.73 [100 / 95.25 x $8.32] and $8.75 [100 / 95.25 x $8.33], respectively. On sales of $50,000 or more, the maximum offering prices of Class A and Class A1 shares are reduced. A contingent deferred sales charge may be imposed on redemptions of Class A, Class B, Class C, Class A1, and Class B1 shares. |
See Notes to Financial Statements
45
Table of Contents
Financial Statements
Year ended 3/31/10
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.
| Net investment income | |||
Interest income | $85,614,445 | ||
Dividends from underlying funds | 28,851 | ||
Total investment income | $85,643,296 | ||
Expenses | |||
Management fee | $5,872,900 | ||
Distribution and service fees | 2,840,654 | ||
Shareholder servicing costs | 1,078,999 | ||
Administrative services fee | 251,431 | ||
Independent Trustees’ compensation | 49,462 | ||
Custodian fee | 187,908 | ||
Shareholder communications | 91,308 | ||
Auditing fees | 49,677 | ||
Legal fees | 48,484 | ||
Interest expense and fees | 440,309 | ||
Miscellaneous | 350,981 | ||
Total expenses | $11,262,113 | ||
Fees paid indirectly | (17,666 | ) | |
Reduction of expenses by investment adviser and distributor | (688,910 | ) | |
Net expenses | $10,555,537 | ||
Net investment income | $75,087,759 | ||
| Realized and unrealized gain (loss) on investments | |||
Realized gain (loss) (identified cost basis) | |||
Investment transactions | $3,066,703 | ||
Futures contracts | 1,141,035 | ||
Net realized gain (loss) on investments | $4,207,738 | ||
Change in unrealized appreciation (depreciation) | |||
Investments | $107,720,331 | ||
Futures contracts | 575,530 | ||
Net unrealized gain (loss) on investments | $108,295,861 | ||
Net realized and unrealized gain (loss) on investments | $112,503,599 | ||
Change in net assets from operations | $187,591,358 |
See Notes to Financial Statements
46
Table of Contents
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.
| Years ended 3/31 | ||||||
| 2010 | 2009 | |||||
| Change in net assets | ||||||
| From operations | ||||||
Net investment income | $75,087,759 | $61,635,539 | ||||
Net realized gain (loss) on investments | 4,207,738 | (9,642,201 | ) | |||
Net unrealized gain (loss) on investments | 108,295,861 | (69,225,342 | ) | |||
Change in net assets from operations | $187,591,358 | $(17,232,004 | ) | |||
| Distributions declared to shareholders | ||||||
From net investment income | $(72,170,482 | ) | $(62,273,039 | ) | ||
From net realized gain on investments | — | (5,306,986 | ) | |||
Total distributions declared to shareholders | $(72,170,482 | ) | $(67,580,025 | ) | ||
Change in net assets from fund share transactions | $199,905,239 | $132,468,632 | ||||
Total change in net assets | $315,326,115 | $47,656,603 | ||||
| Net assets | ||||||
At beginning of period | 1,283,360,531 | 1,235,703,928 | ||||
At end of period (including undistributed net investment income of $2,347,518 and $1,282,065, respectively) | $1,598,686,646 | $1,283,360,531 | ||||
See Notes to Financial Statements
47
Table of Contents
Financial Statements
The financial highlights table is intended to help you understand the fund’s financial performance for the past 5 years (or life of a particular share class, if shorter). Certain information reflects financial results for a single fund share. The total returns in the table represent the rate by which 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.
| Class A | Years ended 3/31 | ||||||||||||||
| 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||
Net asset value, beginning of period | $7.66 | $8.21 | $8.55 | $8.53 | $8.58 | ||||||||||
| Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.41 | $0.38 | $0.42 | $ 0.42 | (z) | $0.41 | |||||||||
Net realized and unrealized gain (loss) on investments | 0.65 | (0.51 | ) | (0.35 | ) | 0.00 | (w)(z) | (0.06 | ) | ||||||
Total from investment operations | $1.06 | $(0.13 | ) | $0.07 | $0.42 | $0.35 | |||||||||
| Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.40 | ) | $(0.39 | ) | $(0.40 | ) | $(0.40 | ) | $(0.40 | ) | |||||
From net realized gain on investments | — | (0.03 | ) | (0.01 | ) | — | — | ||||||||
Total distributions declared to shareholders | $(0.40 | ) | $(0.42 | ) | $(0.41 | ) | $(0.40 | ) | $(0.40 | ) | |||||
Net asset value, end of period | $8.32 | $7.66 | $8.21 | $8.55 | $8.53 | ||||||||||
Total return (%) (r)(s)(t) | 14.01 | (1.53 | ) | 0.81 | 5.00 | 4.18 | |||||||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 0.82 | 0.92 | 1.05 | 1.19 | 1.17 | ||||||||||
Expenses after expense reductions (f) | 0.78 | 0.74 | 0.80 | 0.94 | 0.92 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 0.75 | 0.67 | 0.70 | 0.79 | 0.81 | ||||||||||
Net investment income | 5.04 | 4.88 | 4.99 | 4.91 | (z) | 4.71 | |||||||||
Portfolio turnover | 15 | 25 | 32 | 10 | 9 | ||||||||||
Net assets at end of period (000 omitted) | $632,523 | $420,234 | $279,614 | $248,226 | $240,212 | ||||||||||
See Notes to Financial Statements
48
Table of Contents
Financial Highlights – continued
| Class B | Years ended 3/31 | ||||||||||||||
| 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||
Net asset value, beginning of period | $7.68 | $8.22 | $8.57 | $8.54 | $8.59 | ||||||||||
| Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.35 | $0.33 | $0.36 | $0.36 | (z) | $0.34 | |||||||||
Net realized and unrealized gain (loss) on investments | 0.65 | (0.51 | ) | (0.36 | ) | 0.00 | (w)(z) | (0.05 | ) | ||||||
Total from investment operations | $1.00 | $(0.18 | ) | $0.00 | (w) | $0.36 | $0.29 | ||||||||
| Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.34 | ) | $(0.33 | ) | $(0.34 | ) | $(0.33 | ) | $(0.34 | ) | |||||
From net realized gain on investments | — | (0.03 | ) | (0.01 | ) | — | — | ||||||||
Total distributions declared to | $(0.34 | ) | $(0.36 | ) | $(0.35 | ) | $(0.33 | ) | $(0.34 | ) | |||||
Net asset value, end of period | $8.34 | $7.68 | $8.22 | $8.57 | $8.54 | ||||||||||
Total return (%) (r)(s)(t) | 13.15 | (2.13 | ) | (0.06 | ) | 4.34 | 3.40 | ||||||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 1.57 | 1.68 | 1.80 | 1.95 | 1.92 | ||||||||||
Expenses after expense reductions (f) | 1.53 | 1.49 | 1.55 | 1.70 | 1.67 | ||||||||||
Expenses after expense reductions and excluding interest expense and | 1.50 | 1.42 | 1.45 | 1.55 | 1.56 | ||||||||||
Net investment income | 4.30 | 4.12 | 4.24 | 4.16 | (z) | 3.96 | |||||||||
Portfolio turnover | 15 | 25 | 32 | 10 | 9 | ||||||||||
Net assets at end of period (000 omitted) | $23,060 | $20,978 | $22,372 | $26,919 | $36,752 | ||||||||||
See Notes to Financial Statements
49
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Financial Highlights – continued
| Class C | Years ended 3/31 | ||||||||||||||
| 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||
Net asset value, beginning of period | $7.69 | $8.24 | $8.59 | $8.56 | $8.61 | ||||||||||
| Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.35 | $0.32 | $0.35 | $0.36 | (z) | $0.35 | |||||||||
Net realized and unrealized gain (loss) | 0.65 | (0.51 | ) | (0.35 | ) | 0.01 | (z) | (0.06 | ) | ||||||
Total from investment operations | $1.00 | $(0.19 | ) | $0.00 | (w) | $0.37 | $0.29 | ||||||||
| Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.34 | ) | $(0.33 | ) | $(0.34 | ) | $(0.34 | ) | $(0.34 | ) | |||||
From net realized gain on investments | — | (0.03 | ) | (0.01 | ) | — | — | ||||||||
Total distributions declared to | $(0.34 | ) | $(0.36 | ) | $(0.35 | ) | $(0.34 | ) | $(0.34 | ) | |||||
Net asset value, end of period | $8.35 | $7.69 | $8.24 | $8.59 | $8.56 | ||||||||||
Total return (%) (r)(s)(t) | 13.13 | (2.25 | ) | (0.05 | ) | 4.34 | 3.41 | ||||||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 1.57 | 1.67 | 1.80 | 1.94 | 1.92 | ||||||||||
Expenses after expense reductions (f) | 1.53 | 1.48 | 1.55 | 1.69 | 1.67 | ||||||||||
Expenses after expense reductions and excluding interest expense and | 1.50 | 1.41 | 1.45 | 1.54 | 1.56 | ||||||||||
Net investment income | 4.26 | 4.10 | 4.23 | 4.16 | (z) | 4.09 | |||||||||
Portfolio turnover | 15 | 25 | 32 | 10 | 9 | ||||||||||
Net assets at end of period (000 omitted) | $143,504 | $77,937 | $42,759 | $35,070 | $34,618 | ||||||||||
See Notes to Financial Statements
50
Table of Contents
Financial Highlights – continued
| Class A1 | Years ended 3/31 | ||||||||
| 2010 | 2009 | 2008 (i) | |||||||
Net asset value, beginning of period | $7.67 | $8.21 | $8.39 | ||||||
| Income (loss) from investment operations | |||||||||
Net investment income (d) | $0.43 | $0.40 | $0.34 | ||||||
Net realized and unrealized gain (loss) on investments | 0.65 | (0.50 | ) | (0.18 | )(g) | ||||
Total from investment operations | $1.08 | $(0.10 | ) | $0.16 | |||||
| Less distributions declared to shareholders | |||||||||
From net investment income | $(0.42 | ) | $(0.41 | ) | $(0.33 | ) | |||
From net realized gain on investments | — | (0.03 | ) | (0.01 | ) | ||||
Total distributions declared to shareholders | $(0.42 | ) | $(0.44 | ) | $(0.34 | ) | |||
Net asset value, end of period | $8.33 | $7.67 | $8.21 | ||||||
Total return (%) (r)(s)(t) | 14.28 | (1.15 | ) | 1.84 | (n) | ||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||
Expenses before expense reductions (f) | 0.57 | 0.68 | 0.79 | (a) | |||||
Expenses after expense reductions (f) | 0.53 | 0.49 | 0.54 | (a) | |||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 0.50 | 0.42 | 0.44 | (a) | |||||
Net investment income | 5.32 | 5.13 | 5.26 | (a) | |||||
Portfolio turnover | 15 | 25 | 32 | ||||||
Net assets at end of period (000 omitted) | $787,041 | $746,020 | $864,341 | ||||||
See Notes to Financial Statements
51
Table of Contents
Financial Highlights – continued
| Class B1 | Years ended 3/31 | ||||||||
| 2010 | 2009 | 2008 (i) | |||||||
Net asset value, beginning of period | $7.67 | $8.22 | $8.40 | ||||||
| Income (loss) from investment operations | |||||||||
Net investment income (d) | $0.37 | $0.35 | $0.29 | ||||||
Net realized and unrealized gain (loss) on investments | 0.66 | (0.52 | ) | (0.18 | )(g) | ||||
Total from investment operations | $1.03 | $(0.17 | ) | $0.11 | |||||
| Less distributions declared to shareholders | |||||||||
From net investment income | $(0.36 | ) | $(0.35 | ) | $(0.28 | ) | |||
From net realized gain on investments | — | (0.03 | ) | (0.01 | ) | ||||
Total distributions declared to shareholders | $(0.36 | ) | $(0.38 | ) | $(0.29 | ) | |||
Net asset value, end of period | $8.34 | $7.67 | $8.22 | ||||||
Total return (%) (r)(s)(t) | 13.56 | (2.02 | ) | 1.24 | (n) | ||||
| Ratios (%) (to average net assets) and Supplemental data: | |||||||||
Expenses before expense reductions (f) | 1.48 | 1.44 | 1.55 | (a) | |||||
Expenses after expense reductions (f) | 1.29 | 1.24 | 1.30 | (a) | |||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 1.26 | 1.17 | 1.21 | (a) | |||||
Net investment income | 4.57 | 4.36 | 4.50 | (a) | |||||
Portfolio turnover | 15 | 25 | 32 | ||||||
Net assets at end of period (000 omitted) | $12,558 | $18,190 | $26,618 | ||||||
| (a) | Annualized. |
| (d) | Per share data are based on average shares outstanding. |
| (f) | Ratios do not reflect reductions from fees paid indirectly, if applicable. |
| (g) | The per share amount is not in accordance with 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. |
| (i) | For the period from the class’ inception, June 25, 2007 (Classes A1 and B1) through the stated period end. |
| (l) | Interest expense and fees relate to payments made to the holder of the floating rate certificate from trust assets. |
| (n) | Not annualized. |
| (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. |
| (t) | Total returns do not include any applicable sales charges. |
| (w) | Per share amount was less than $0.01. |
| (z) | The fund applied a change in estimate for amortization of premium on certain debt securities in the year ended March 31, 2007 that resulted in an increase of $0.03 per share to net investment income, a decrease of $0.03 per share to net realized and unrealized gain (loss) on investments, and an increase of 0.30% to the net investment income ratio for Class A, Class B, and Class C. The change in estimate had no impact on net assets, net asset value per share or total return of the class. |
See Notes to Financial Statements
52
Table of Contents
| (1) | Business and Organization |
MFS Municipal Income Fund (the fund) is a series of MFS Municipal Series Trust which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.
| (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 revenues and expenses 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 value of municipal instruments can be affected by changes in their actual or perceived credit quality. The credit quality of municipal instruments can be affected by, among other things, the financial condition of the issuer or guarantor, the issuer’s future borrowing plans and sources of revenue, the economic feasibility of the revenue bond project or general borrowing purpose, political or economic developments in the region where the instrument is issued and the liquidity of the security. Municipal instruments generally trade in the over-the-counter market. Municipal instruments backed by current and anticipated revenues from a specific project or specific assets can be negatively affected by the discontinuance of the taxation supporting the projects or assets or the inability to collect revenues for the project or from the assets. If the Internal Revenue Service determines an issuer of a municipal instrument has not complied with the applicable tax requirements, the security could decline in value, interest from the security could become taxable and the funds may be required to issue Forms 1099-DIV.
Investment Valuations – Debt instruments and floating rate loans (other than short-term instruments), 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 generally are valued at amortized cost, which approximates market value. Futures contracts are generally valued at last posted settlement price as provided by a third-party pricing service on the market on which they are primarily traded. Futures contracts for which there were no trades that day for a particular position are generally valued at the closing bid quotation as
53
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Notes to Financial Statements – continued
provided by a third-party pricing service on the market on which such futures contracts are primarily traded. Open-end investment companies are generally valued at net asset value per share. 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. Values obtained from third-party pricing services can utilize both transaction data and market information such as yield, quality, coupon rate, maturity, type of issue, trading characteristics, and other market data.
The Board of Trustees has delegated primary responsibility for determining or causing to be determined the value of the fund’s investments (including any fair valuation) to the adviser pursuant to valuation policies and procedures approved by the Board. If the adviser determines that reliable market quotations are not readily available, investments are valued at fair value as determined in good faith by the adviser in accordance with such procedures under the oversight of the Board of Trustees. Under the fund’s valuation policies and procedures, market quotations are not considered to be readily available for most types of debt instruments and floating rate loans and many types of derivatives. These investments are generally valued at fair value based on information from third-party pricing services. In addition, investments may be valued at fair value if the adviser determines that an 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 halting 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. 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
54
Table of Contents
Notes to Financial Statements – continued
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 unobservable inputs, which may include the adviser’s own assumptions in determining the fair value of investments. Other financial instruments are derivative instruments not reflected in total investments, such as futures, forwards, swap contracts, and written options. The following is a summary of the levels used as of March 31, 2010 in valuing the fund’s assets or liabilities:
| Investments at Value | Level 1 | Level 2 | Level 3 | Total | ||||
| Municipal Bonds | $— | $1,616,440,435 | $— | $1,616,440,435 | ||||
| Short Term Securities | — | 4,800,000 | — | 4,800,000 | ||||
| Mutual Funds | 12,528,917 | — | — | 12,528,917 | ||||
| Total Investments | $12,528,917 | $1,621,240,435 | $— | $1,633,769,352 | ||||
| Other Financial Instruments | ||||||||
| Futures | $33,311 | $— | $— | $33,311 | ||||
For further information regarding security characteristics, see the Portfolio of Investments.
Derivatives – The fund may use derivatives for different purposes, including to earn income and enhance returns, to increase or decrease exposure to a particular market, to manage or adjust the risk profile of the fund, or as alternatives to direct investments. Derivatives may be 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.
In this reporting period the fund adopted the disclosure provisions of FASB Accounting Standard Codification 815, Derivatives and Hedging (“ASC 815”). ASC 815 requires enhanced disclosures about the fund’s use of and accounting for derivative instruments and the effect of derivative instruments on the fund’s results of operations and financial position. Tabular disclosure regarding derivative fair value and gain/loss by contract type (e.g., interest rate contracts, foreign exchange contracts, credit contracts, etc.) is required and derivatives accounted for as hedging instruments under ASC 815 must be disclosed separately from those that do not qualify for hedge accounting. Even
55
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Notes to Financial Statements – continued
though the fund may use derivatives in an attempt to achieve an economic hedge, the fund’s derivatives are not accounted for as hedging instruments under ASC 815 because investment companies account for their derivatives at fair value and record any changes in fair value in current period earnings.
Derivative instruments include written options, purchased options, futures contracts, forward foreign currency exchange contracts, and swap agreements. 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 March 31, 2010:
Fair Value (a) | ||||
| Risk | Derivative | Asset Derivatives | ||
| Interest Rate Contracts | Interest Rate Futures | $33,311 |
| (a) | The value of futures contracts outstanding includes cumulative appreciation/depreciation as reported in the fund’s Portfolio of Investments. Only the current day variation margin for futures contracts is separately reported within the fund’s 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 March 31, 2010 as reported in the Statement of Operations:
| Futures Contracts | ||
| Interest Rate Contracts | $1,141,035 |
The following table presents, by major type of derivative contract, the change in unrealized appreciation (depreciation) on derivatives held by the fund for year ended March 31, 2010 as reported in the Statement of Operations:
| Futures Contracts | ||
| Interest Rate Contracts | $575,530 |
Derivative counterparty credit risk is managed through formal evaluation of the creditworthiness of all potential counterparties. On certain over-the-counter derivatives, the fund attempts to reduce its exposure to counterparty credit risk whenever possible by entering into an International Swaps and Derivatives Association (ISDA) Master Agreement on a bilateral basis with each of the counterparties with whom it undertakes a significant volume of transactions. The ISDA Master Agreement gives each party to the agreement the right to terminate all transactions traded under such agreement if there is a certain deterioration in the credit quality of the other party. The ISDA Master Agreement gives the fund the right, upon an event of default by the applicable counterparty or a termination of the agreement, to close out all transactions traded under such agreement and to net amounts owed under each transaction
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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. However, absent an event of default by the counterparty or a termination of the agreement, the ISDA Master Agreement does not result in an offset of reported balance sheet assets and liabilities across transactions between the fund and the applicable counterparty.
Collateral requirements differ by type of derivative. Collateral or margin requirements are set by the broker or exchange clearing house for exchange traded derivatives (i.e., futures and exchange-traded options) while collateral terms are contract specific for over-the-counter traded derivatives (i.e., forwards, swaps and over-the-counter options). For derivatives traded under an ISDA Master Agreement, the collateral requirements are netted across all transactions traded under such agreement and one amount is posted from one party to the other to collateralize such obligations. Cash collateral that has been pledged to cover obligations of the fund under derivative contracts will be reported separately on the Statement of Assets and Liabilities as restricted cash. Securities collateral pledged for the same purpose is noted in the Portfolio of Investments.
Futures Contracts – The fund may use futures contracts to gain or to hedge against broad market, interest rate or currency exposure. 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 certain 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 is realized.
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 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.
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Inverse Floaters – The fund invests in municipal inverse floating rate securities which are structured by the issuer (known as primary market inverse floating rate securities) or by an investment banker utilizing municipal bonds which have already been issued (known as secondary market inverse floating rate securities) to have variable rates of interest which typically move in the opposite direction of short term interest rates. A secondary market inverse floating rate security is created when an investment banker transfers a fixed rate municipal bond to a special purpose trust, and causes the trust to (a) issue floating rate certificates to third parties, in an amount equal to a fraction of the par amount of the deposited bonds (these certificates usually pay tax-exempt interest at short-term interest rates that typically reset weekly; and the certificate holders typically, on seven days notice, have the option to tender their certificates to the investment banker or another party for redemption at par plus accrued interest), and (b) issue inverse floating rate certificates (sometimes referred to as “inverse floaters”). If the holder of the inverse floater transfers the municipal bonds to an investment banker for the purpose of depositing the municipal bonds into the special purpose trust, the inverse floating rate certificates that are issued by the trust are referred to as “self-deposited inverse floaters.” If the bonds held by the trust are purchased by the investment banker for deposit into the trust from someone other than the purchasers of the inverse floaters, the inverse floating rate certificates that are issued by the trust are referred to as “externally deposited inverse floaters.” Such self-deposited inverse floaters held by the fund are accounted for as secured borrowings, with the municipal bonds reflected in the investments of the fund and amounts owed to the holder of the floating rate certificate under the provisions of the trust, which amounts are paid solely from the assets of the trust, reflected as liabilities of the fund in the Statement of Assets and Liabilities under the caption, “Payable to the holder of the floating rate certificate from trust assets”. The carrying value of the fund’s payable to the holder of the floating rate certificate from trust assets as reported on the fund’s Statement of Assets and Liabilities approximates its fair value. At March 31, 2010, the fund’s payable to the holder of the floating rate certificate from trust assets was $57,318,932 and the interest rate on these floating rate certificates issued by the trust was 0.36%. For the year ended March 31, 2010, the average payable to the holder of the floating rate certificate from trust assets was $48,031,108 at a weighted average interest rate of 0.92%. Interest expense and fees relate to interest payments made to the holder of certain floating rate certificates and associated fees, both of which are made from trust assets. Interest expense and fees are recorded as incurred. For the year ended March 31, 2010, interest expense and fees in connection with self-deposited inverse floaters was $440,309. Primary and externally deposited inverse floaters held by the fund are not accounted for as secured borrowings.
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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.
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. Dividends received in cash are recorded on the ex-dividend date. Dividend and interest payments received in additional securities are recorded on the ex-dividend or ex-interest date in an amount equal to the value of the security on such date. 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.
Legal fees and other related expenses incurred to preserve and protect the value of a security owned are added to the cost of the security; other legal fees are expensed. Capital infusions made directly to the security issuer, which are generally non-recurring, incurred to protect or enhance the value of high-yield debt securities, are reported as additions to the cost basis of the security. Costs that are incurred to negotiate the terms or conditions of capital infusions or that are expected to result in a plan of reorganization are reported as realized losses. Ongoing costs incurred to protect or enhance an investment, or costs incurred to pursue other claims or legal actions, are expensed.
Fees Paid Indirectly – The fund’s custody fee may be reduced according to an arrangement that measures the value of cash deposited with the custodian by the fund. This amount, for the year ended March 31, 2010, is shown as a reduction of total expenses on 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 and tax-exempt income, including realized capital gains. As a result, no provision for federal income tax is required. The fund’s federal tax return for the prior three fiscal years remains subject to examination by the Internal Revenue Service.
Distributions to shareholders are recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax
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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. Distributions in excess of net investment income or net realized gains are temporary overdistributions for financial statement purposes resulting from differences in the recognition or classification of income or distributions for financial statement and tax purposes.
Book/tax differences primarily relate to amortization and accretion of debt securities and secured borrowings.
The tax character of distributions declared to shareholders for the last two fiscal years is as follows:
| 3/31/10 | 3/31/09 | |||
| Ordinary income (including any short-term capital gains) | $— | $321,955 | ||
| Tax-exempt income | 72,170,482 | 61,951,084 | ||
| Long-term capital gain | — | 5,306,986 | ||
| $72,170,482 | $67,580,025 |
The federal tax cost and the tax basis components of distributable earnings were as follows:
| As of 3/31/10 | |||
| Cost of investments | $1,508,109,449 | ||
| Gross appreciation | 96,049,687 | ||
| Gross depreciation | (27,708,716 | ) | |
| Net unrealized appreciation (depreciation) | $68,340,971 | ||
| Undistributed tax-exempt income | 8,755,266 | ||
| Capital loss carryforwards | (8,893,873 | ) | |
| Other temporary differences | (6,407,748 | ) | |
As of March 31, 2010 the fund had capital loss carryforwards available to offset future realized gains. Such losses expire as follows:
| 3/31/18 | $(8,893,873 | ) |
Multiple Classes of Shares of Beneficial Interest – The fund offers multiple classes of shares, which differ in their respective distribution and service fees. The fund’s income and common expenses are allocated to shareholders based on the value of settled shares outstanding of each class. The fund’s realized and unrealized gain (loss) are allocated to shareholders based on the daily net assets
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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. Class B and Class B1 shares will convert to Class A and Class A1 shares, respectively approximately eight years after purchase. The fund’s distributions declared to shareholders as reported on the Statements of Changes in Net Assets are presented by class as follows:
| From net investment income | From net realized gain on investments | |||||||
| Year ended 3/31/10 | Year ended 3/31/09 | Year ended 3/31/10 | Year ended 3/31/09 | |||||
| Class A | $26,152,548 | $16,567,350 | $— | $1,527,122 | ||||
| Class B | 915,992 | 884,245 | — | 88,206 | ||||
| Class C | 4,609,601 | 2,444,944 | — | 261,836 | ||||
| Class A1 | 39,801,299 | 41,392,013 | — | 3,340,130 | ||||
| Class B1 | 691,042 | 984,487 | — | 89,692 | ||||
| Total | $72,170,482 | $62,273,039 | $— | $5,306,986 | ||||
| (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.
The investment adviser has agreed in writing to reduce its management fee to 0.37% of the fund’s average daily net assets in excess of $1.3 billion up to $2.0 billion and 0.35% of average daily net assets in excess of $2.0 billion. This written agreement will continue until modified by the fund’s Board of Trustees, but will continue at least until July 31, 2010. For the year ended March 31, 2010, this waiver amounted to $50,613 and is reflected as a reduction of total expenses in the Statement of Operations.
The management fee incurred for the year ended March 31, 2010 was equivalent to an annual effective rate of 0.396% of the fund’s average daily net assets.
The investment adviser has agreed in writing to pay a portion of the fund’s operating expenses, exclusive of management fee, distribution and service fees, interest, taxes, extraordinary expenses, brokerage and transaction costs, and investment-related expenses (including interest expenses and fees associated with investments in inverse floating rate instruments) such that operating expenses do not exceed 0.10% 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 July 31, 2010. For the year ended March 31, 2010, the reduction under this agreement amounted to $606,150 and is reflected as a reduction of total expenses in the Statement of Operations.
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Distributor – MFS Fund Distributors, Inc. (MFD), a wholly-owned subsidiary of MFS, as distributor, received $494,901 and $44,877 for the year ended March 31, 2010, as its portion of the initial sales charge on sales of Class A and Class A1 shares of the fund, respectively.
The Board of Trustees has adopted a distribution plan for certain class shares pursuant to Rule 12b-1 of the Investment Company Act of 1940.
The fund’s distribution plan provides that the fund will pay MFD for services provided by MFD and financial intermediaries in connection with the distribution and servicing of certain share classes. One component of the plan is a distribution fee paid to MFD and another component of the plan is a service fee paid to MFD. MFD may subsequently pay all, or a portion, of the distribution and/or service fees to financial intermediaries.
Distribution Plan Fee Table:
| Distribution Fee Rate (d) | Service Fee Rate (d) | Total Distribution Plan (d) | Annual Effective Rate (e) | Distribution and Service Fee | ||||||
| Class A | — | 0.25% | 0.25% | 0.25% | $1,348,377 | |||||
| Class B | 0.75% | 0.25% | 1.00% | 1.00% | 222,586 | |||||
| Class C | 0.75% | 0.25% | 1.00% | 1.00% | 1,125,953 | |||||
| Class B1 | 0.75% | 0.25% | 1.00% | 0.76% | 143,738 | |||||
| Total Distribution and Service Fees | $2,840,654 | |||||||||
| (d) | In accordance with the distribution plan for certain classes, the fund pays distribution and/or service fees equal to these annual percentage rates of each class’ average daily net assets. The distribution and service fee rates disclosed by class represent the current rates in effect at the end of the reporting period. Any rate changes, if applicable, are detailed below. |
| (e) | The annual effective rates represent actual fees incurred under the distribution plan for the year ended March 31, 2010 based on each class’ average daily net assets. Effective August 1, 2009, the service fee attributable to Class B1 shares within the first year of purchase is 0.25%. The service fee attributable to all other Class B1 shares has been waived by MFD under a written agreement that will continue until modified by the fund’s Board of Trustees, but will continue until at least July 31, 2010. This reduction amounted to $23,659 which is shown as a reduction of total expenses in the Statement of Operations. Prior to August 1, 2009, the service fee attributable to Class B1 shares within the first year of purchase was 0.25%. The service fee attributable to all other Class B1 shares was implemented, but not in effect. |
Certain Class A and Class A1 shares purchased prior to September 1, 2008 are subject to a contingent deferred sales charge (CDSC) in the event of a shareholder redemption within 12 months of purchase. Certain Class A and Class A1 shares purchased on or subsequent to September 1, 2008 are subject to a CDSC in the event of a shareholder redemption within 24 months of purchase. Class C shares are subject to a CDSC in the event of a shareholder redemption within 12 months of purchase. Class B and Class B1 shares are subject to a CDSC in the event of a shareholder redemption within six years of
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purchase. All contingent deferred sales charges are paid to MFD and during the year ended March 31, 2010, were as follows:
| Amount | ||
| Class A | $20,768 | |
| Class B | 21,869 | |
| Class C | 30,774 | |
| Class A1 | 252 | |
| Class B1 | 5,738 |
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 calculated as a percentage of the average daily net assets of the fund as determined periodically under the supervision of the fund’s Board of Trustees. For the year ended March 31, 2010, the fee was $581,956, which equated to 0.0396% annually of the fund’s average daily net assets. MFSC also receives payment from the fund for out-of-pocket expenses, sub-accounting and other shareholder servicing costs which may be paid to affiliated and unaffiliated service providers. For the year ended March 31, 2010, these out-of-pocket expenses, sub-accounting and other shareholder servicing costs amounted to $497,043.
Administrator – MFS provides certain financial, legal, shareholder communications, compliance, and other administrative services to the fund. Under an administrative services agreement, the fund partially 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 March 31, 2010 was equivalent to an annual effective rate of 0.0171% 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 for their services to the fund from MFS. Certain officers and Trustees of the fund are officers or directors of MFS, MFD, and MFSC.
Prior to December 31, 2001, the fund had an unfunded defined benefit plan (“DB plan”) for independent Trustees. As of December 31, 2001, the Board took action to terminate the DB plan with respect to then-current and any future independent Trustees, such that the DB Plan covers only certain of those former independent Trustees who retired on or before December 31, 2001. The DB Plan resulted in a pension expense of $8,022 and is included in independent Trustees’ compensation for the year ended March 31, 2010. The
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liability for deferred retirement benefits payable to certain independent Trustees under the DB plan amounted to $58,406 at March 31, 2010, and is included in payable for independent Trustees’ compensation on the Statement of Assets and Liabilities.
Other – This fund and certain other funds managed by MFS (the funds) have entered into services agreements (the Agreements) which provide for payment of fees by the funds to Tarantino LLC and Griffin Compliance LLC in return for the provision of services of an Independent Chief Compliance Officer (ICCO) and Assistant ICCO, respectively, for the funds. The ICCO and Assistant ICCO are officers of the funds and the sole members of Tarantino LLC and Griffin Compliance LLC, respectively. The funds can terminate the Agreements with Tarantino LLC and Griffin Compliance LLC at any time under the terms of the Agreements. For the year ended March 31, 2010, the aggregate fees paid by the fund to Tarantino LLC and Griffin Compliance LLC were $16,096 and are included in miscellaneous expense on the Statement of Operations. MFS has agreed to reimburse the fund for a portion of the payments made by the fund in the amount of $8,488, which is shown as a reduction of total expenses in the Statement of Operations. Additionally, MFS has agreed to bear all expenses associated with office space, other administrative support, and supplies provided to the ICCO and Assistant ICCO.
The fund may invest in the MFS Institutional Money Market Portfolio which is managed by MFS and seeks a high level of current income consistent with preservation of capital and liquidity. Income earned on this investment is included in dividends from underlying funds on the Statement of Operations. This money market fund does not pay a management fee to MFS.
| (4) | Portfolio Securities |
Purchases and sales of investments, other than U.S. Government securities, purchased option transactions, and short-term obligations, aggregated $435,574,869 and $226,311,398, respectively.
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| (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 3/31/10 | Year ended 3/31/09 | |||||||||||
| Shares | Amount | Shares | Amount | |||||||||
| Shares sold | ||||||||||||
Class A | 33,398,172 | $272,064,736 | 30,477,062 | $235,731,134 | ||||||||
Class B | 1,033,865 | 8,456,075 | 1,065,817 | 8,298,997 | ||||||||
Class C | 8,806,975 | 72,045,342 | 6,261,269 | 49,133,686 | ||||||||
Class A1 | 1,771,727 | 14,459,164 | 1,231,564 | 9,680,409 | ||||||||
Class B1 | 15,537 | 126,760 | 17,477 | 137,069 | ||||||||
| 45,026,276 | $367,152,077 | 39,053,189 | $302,981,295 | |||||||||
| Shares issued to shareholders in reinvestment of distributions | ||||||||||||
Class A | 2,155,094 | $17,613,886 | 1,503,637 | $11,656,804 | ||||||||
Class B | 69,993 | 571,769 | 75,052 | 584,808 | ||||||||
Class C | 327,118 | 2,685,402 | 202,270 | 1,573,379 | ||||||||
Class A1 | 3,105,305 | 25,335,785 | 3,692,773 | 28,797,296 | ||||||||
Class B1 | 55,045 | 448,490 | 82,684 | 645,544 | ||||||||
| 5,712,555 | $46,655,332 | 5,556,416 | $43,257,831 | |||||||||
| Shares reacquired | ||||||||||||
Class A | (14,403,534 | ) | $(117,943,429 | ) | (11,196,340 | ) | $(85,679,727 | ) | ||||
Class B | (1,070,908 | ) | (8,742,373 | ) | (1,128,487 | ) | (8,849,702 | ) | ||||
Class C | (2,086,691 | ) | (17,166,551 | ) | (1,518,837 | ) | (11,683,777 | ) | ||||
Class A1 | (7,689,005 | ) | (62,437,489 | ) | (12,850,834 | ) | (99,993,853 | ) | ||||
Class B1 | (934,660 | ) | (7,612,328 | ) | (967,683 | ) | (7,563,435 | ) | ||||
| (26,184,798 | ) | $(213,902,170 | ) | (27,662,181 | ) | $(213,770,494 | ) | |||||
| Net change | ||||||||||||
Class A | 21,149,732 | $171,735,193 | 20,784,359 | $161,708,211 | ||||||||
Class B | 32,950 | 285,471 | 12,382 | 34,103 | ||||||||
Class C | 7,047,402 | 57,564,193 | 4,944,702 | 39,023,288 | ||||||||
Class A1 | (2,811,973 | ) | (22,642,540 | ) | (7,926,497 | ) | (61,516,148 | ) | ||||
Class B1 | (864,078 | ) | (7,037,078 | ) | (867,522 | ) | (6,780,822 | ) | ||||
| 24,554,033 | $199,905,239 | 16,947,424 | $132,468,632 | |||||||||
| (6) | Line of Credit |
The fund and certain other funds managed by MFS participate in a $1.1 billion unsecured committed line of credit, subject to a $1 billion sublimit, provided by a syndication 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 higher of the Federal Reserve funds
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rate or one month LIBOR 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 at the end of each calendar quarter. 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 a rate equal to the Federal Reserve funds rate plus an agreed upon spread. For the year ended March 31, 2010, the fund’s commitment fee and interest expense were $25,067 and $0, respectively, and are included in miscellaneous expense on the Statement of Operations.
| (7) | Transactions in Underlying Funds-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 fund assumes the following to be affiliated issuers:
| Underlying Funds | Beginning Shares/Par Amount | Acquisitions Shares/Par Amount | Dispositions Shares/Par Amount | Ending Shares/Par Amount | |||||
| MFS Institutional Money Market Portfolio | 55,180 | 278,166,422 | (265,692,685 | ) | 12,528,917 | ||||
| Underlying Funds | Realized Gain (Loss) | Capital Gain Distributions | Dividend Income | Ending Value | |||||
| MFS Institutional Money Market Portfolio | $— | $— | $ 28,851 | $12,528,917 | |||||
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees of MFS Municipal Series Trust and the Shareholders of MFS Municipal Income Fund:
We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of MFS Municipal Income Fund (the “Fund”) (one of the portfolios comprising MFS Municipal Series Trust) as of March 31, 2010, and 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, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, 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. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of March 31, 2010, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of MFS Municipal Income Fund as of March 31, 2010, 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.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
May 17, 2010
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RESULTS OF SHAREHOLDER MEETING
(unaudited)
At a special meeting of shareholders of the Municipal Series Trust, which was held on January 28, 2010, the following actions were taken:
Item 1. To elect the following individuals as Trustees:
| Number of Dollars | ||||
Nominee | For | Withheld Authority | ||
| Robert E. Butler | 3,148,608,458.797 | 48,724,942.416 | ||
| Lawrence H. Cohn, M.D. | 3,139,197,940.941 | 58,135,460.722 | ||
| Maureen R. Goldfarb | 3,148,250,189.942 | 49,083,211.271 | ||
| David H. Gunning | 3,148,075,995.013 | 49,257,406.201 | ||
| William R. Gutow | 3,146,872,731.240 | 50,460,669.973 | ||
| Michael Hegarty | 3,149,134,569.376 | 48,198,831.838 | ||
| John P. Kavanaugh | 3,149,053,580.903 | 48,279,820.310 | ||
| Robert J. Manning | 3,148,783,841.981 | 48,549,559.232 | ||
| Robert C. Pozen | 3,149,246,365.076 | 48,087,036.137 | ||
| J. Dale Sherratt | 3,140,538,059.148 | 56,795,342.065 | ||
| Laurie J. Thomsen | 3,149,279,115.090 | 48,054,286.123 | ||
| Robert W. Uek | 3,146,034,726.805 | 51,298,674.408 | ||
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TRUSTEES AND OFFICERS — IDENTIFICATION AND BACKGROUND
The Trustees and officers of the Trust, as of May 1, 2010, 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 500 Boylston Street, Boston, Massachusetts 02116.
Name, Date of Birth | Position(s) Held | Trustee/Officer Since (h) | Principal Occupations During | |||
| INTERESTED TRUSTEES | ||||||
| Robert J. Manning (k) (born 10/20/63) | Trustee | February 2004 | Massachusetts Financial Services Company, Chief Executive Officer, Chief Investment Officer and Director, President (until December 2009) | |||
| Robert C. Pozen (k) (born 8/08/46) | Trustee | February 2004 | Massachusetts Financial Services Company, Chairman (since February 2004); Medtronic, Inc, (medical devices), Director (since 2004); Harvard Business School (education), Senior Lecturer (since 2008); Bell Canada Enterprises (telecommunications), Director (until February 2009); The Bank of New York, Director (finance), (March 2004 to May 2005); Telesat (satellite communications), Director (until November 2007) | |||
| INDEPENDENT TRUSTEES | ||||||
| David H. Gunning (born 5/30/42) | Trustee and Chair of Trustees | January 2004 | Retired; Cleveland-Cliffs Inc. (mining products and service provider), Vice Chairman/Director (until May 2007); Lincoln Electric Holdings, Inc. (welding equipment manufacturer), Director; Development Alternatives, Inc. (consulting), Director/Non Executive Chairman; Southwest Gas Corp. (natural gas distribution), Director (until May 2004); Portman Limited (mining), Director (until 2008) | |||
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Trustees and Officers – continued
Name, Date of Birth | Position(s) Held | Trustee/Officer Since (h) | Principal Occupations During | |||
| Robert E. Butler (n) (born 11/29/41) | Trustee | January 2006 | Consultant – investment company industry regulatory and compliance matters (since July 2002); PricewaterhouseCoopers LLP (professional services firm), Partner (until 2002) | |||
| Lawrence H. Cohn, M.D. (born 3/11/37) | Trustee | June 1989 | Brigham and Women’s Hospital, Senior Cardiac Surgeon (since 2005); Harvard Medical School, Professor of Cardiac Surgery; Partners HealthCare, Physician Director of Medical Device Technology (since 2006); Brigham and Women’s Hospital, Chief of Cardiac Surgery (until 2005) | |||
Maureen R. Goldfarb (born 4/6/55) | Trustee | January 2009 | Private investor; John Hancock Financial Services, Inc., Executive Vice President (until 2004); John Hancock Mutual Funds, Trustee and Chief Executive Officer (until 2004) | |||
| William R. Gutow (born 9/27/41) | Trustee | December 1993 | Private investor and real estate consultant ; Capital Entertainment Management Company (video franchise), Vice Chairman; Atlantic Coast Tan (tanning salons), Vice Chairman (until 2007); Texas Donuts (donut franchise), Vice Chairman (until 2009) | |||
| Michael Hegarty (born 12/21/44) | Trustee | December 2004 | Private investor; AXA Financial (financial services and insurance), Vice Chairman and Chief Operating Officer (until 2001); The Equitable Life Assurance Society (insurance), President and Chief Operating Officer (until 2001) | |||
John P. Kavanaugh (born 11/4/54) | Trustee | January 2009 | Private investor; The Hanover Insurance Group, Inc., Vice President and Chief Investment Officer (until 2006); Allmerica Investment Trust, Allmerica Securities Trust and Opus Investment Trust (investment companies), Chairman, President and Trustee (until 2006) |
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Trustees and Officers – continued
Name, Date of Birth | Position(s) Held | Trustee/Officer Since (h) | Principal Occupations During | |||
| J. Dale Sherratt (born 9/23/38) | Trustee | June 1989 | Insight Resources, Inc. (acquisition planning specialists), President; Wellfleet Investments (investor in health care companies), Managing General Partner | |||
| Laurie J. Thomsen (born 8/05/57) | Trustee | March 2005 | New Profit, Inc. (venture philanthropy), Executive Partner (since 2006); Private investor; The Travelers Companies (commercial property liability insurance), Director; Prism Venture Partners (venture capital), Co-founder and General Partner (until June 2004) | |||
| Robert W. Uek (born 5/18/41) | Trustee | January 2006 | Consultant to investment company industry; PricewaterhouseCoopers LLP (professional services firm), Partner (until 1999); TT International Funds (mutual fund complex), Trustee (until 2005); Hillview Investment Trust II Funds (mutual fund complex), Trustee (until 2005) | |||
| OFFICERS | ||||||
| Maria F. Dwyer (k) (born 12/01/58) | President | March 2004 | Massachusetts Financial Services Company, Executive Vice President and Chief Regulatory Officer (since March 2004) Chief Compliance Officer (since December 2006); Fidelity Management & Research Company, Vice President (prior to March 2004); Fidelity Group of Funds, President and Treasurer (until March 2004) | |||
| Christopher R. Bohane (k) (born 1/18/74) | Assistant Secretary and Assistant Clerk | July 2005 | Massachusetts Financial Services Company, Vice President and Senior Counsel | |||
John M. Corcoran (k) (born 4/13/65) | Treasurer | October 2008 | Massachusetts Financial Services Company, Senior Vice President (since October 2008); State Street Bank and Trust (financial services provider), Senior Vice President, (until September 2008) |
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Trustees and Officers – continued
Name, Date of Birth | Position(s) Held | Trustee/Officer Since (h) | Principal Occupations During | |||
| Ethan D. Corey (k) (born 11/21/63) | Assistant Secretary and Assistant Clerk | July 2005 | Massachusetts Financial Services Company, Senior Vice President and Associate General Counsel (since 2004); Dechert LLP (law firm), Counsel (prior to December 2004) | |||
| David L. DiLorenzo (k) (born 8/10/68) | Assistant Treasurer | July 2005 | Massachusetts Financial Services Company, Vice President (since June 2005); JP Morgan Investor Services, Vice President (until June 2005) | |||
| Timothy M. Fagan (k) (born 7/10/68) | Assistant Secretary and Assistant Clerk | September 2005 | Massachusetts Financial Services Company, Vice President and Senior Counsel (since September 2005); John Hancock Advisers, LLC, Vice President, Senior Attorney and Chief Compliance Officer (until August 2005) | |||
| Mark D. Fischer (k) (born 10/27/70) | Assistant Treasurer | July 2005 | Massachusetts Financial Services Company, Vice President (since May 2005); JP Morgan Investment Management Company, Vice President (until May 2005) | |||
| Robyn L. Griffin (born 7/04/75) | Assistant Independent Chief Compliance Officer | August 2008 | Griffin Compliance LLC (provider of compliance services), Principal (since August 2008); State Street Corporation (financial services provider), Mutual Fund Administration Assistant Vice President (October 2006 – July 2008); Liberty Mutual Group (insurance), Personal Market Assistant Controller (April 2006 – October 2006); Deloitte & Touche LLP (professional services firm), Senior Manager (prior to April 2006) | |||
Brian E. Langenfeld (k) (born 3/07/73) | Assistant Secretary and Assistant Clerk | June 2006 | Massachusetts Financial Services Company, Vice President and Senior Counsel (since May 2006); John Hancock Advisers, LLC, Assistant Vice President and Counsel (until April 2006) |
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Trustees and Officers – continued
Name, Date of Birth | Position(s) Held | Trustee/Officer Since (h) | Principal Occupations During | |||
| Ellen Moynihan (k) (born 11/13/57) | Assistant Treasurer | April 1997 | Massachusetts Financial Services Company, Senior Vice President | |||
Susan S. Newton (k) (born 3/07/50) | Assistant Secretary and Assistant Clerk | May 2005 | Massachusetts Financial Services Company, Senior Vice President and Associate General Counsel (since April 2005); John Hancock Advisers, LLC, Senior Vice President, Secretary and Chief Legal Officer (until April 2005) | |||
| Susan A. Pereira (k) (born 11/05/70) | Assistant Secretary and Assistant Clerk | July 2005 | Massachusetts Financial Services Company, Vice President and Senior Counsel (since June 2004); Bingham McCutchen LLP (law firm), Associate (until June 2004) | |||
| Mark N. Polebaum (k) (born 5/01/52) | Secretary and Clerk | January 2006 | Massachusetts Financial Services Company, Executive Vice President, General Counsel and Secretary (since January 2006); Wilmer Cutler Pickering Hale and Dorr LLP (law firm), Partner (until January 2006) | |||
| Frank L. Tarantino (born 3/07/44) | Independent Chief Compliance Officer | June 2004 | Tarantino LLC (provider of compliance services), Principal (since June 2004); CRA Business Strategies Group (consulting services), Executive Vice President (until June 2004) | |||
| Richard S. Weitzel (k) (born 7/16/70) | Assistant Secretary and Assistant Clerk | October 2007 | Massachusetts Financial Services Company, Vice President and Assistant General Counsel (since 2004); Massachusetts Department of Business and Technology, General Counsel (until April 2004) | |||
| James O. Yost (k) (born 6/12/60) | Assistant Treasurer | September 1990 | 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. For the period from December 15, 2004 until February 22, 2005, Messrs. Pozen and Manning served as Advisory Trustees. For the period March 2008 until October 2008, Ms. Dwyer served as Treasurer of the Funds. |
| (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 position with MFS. The address of MFS is 500 Boylston Street, Boston, Massachusetts 02116. |
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Trustees and Officers – continued
| (n) | In 2004 and 2005, Mr. Butler provided consulting services to the independent compliance consultant retained by MFS pursuant to its settlement with the SEC concerning market timing and related matters. The terms of that settlement required that compensation and expenses related to the independent compliance consultant be borne exclusively by MFS and, therefore, MFS paid Mr. Butler for the services he rendered to the independent compliance consultant. In 2004 and 2005, MFS paid Mr. Butler a total of $351,119.29. |
Each Trustee 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. The Trust does not hold annual meetings for the purpose of electing Trustees, and Trustees are not elected for fixed terms. 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. Messrs. Butler, Kavanaugh, Sherratt, Uek and Ms. Thomsen are members of the Trust’s Audit Committee.
Each of the Fund’s Trustees and officers holds comparable positions with certain other funds of which MFS or a subsidiary is the investment adviser or distributor, and, in the case of the officers, with certain affiliates of MFS. As of January 1, 2010, the Trustees served as board members of 99 funds within the MFS Family of Funds.
The Statement of Additional Information for the Fund and further information about the Trustees are available without charge upon request by calling 1-800-225-2606.
| Investment Adviser | Custodian | |
| Massachusetts Financial Services Company 500 Boylston Street, Boston, MA 02116-3741 | JPMorgan Chase Bank One Chase Manhattan Plaza, New York, NY 10081 | |
| Distributor | Independent Registered Public Accounting Firm | |
| MFS Fund Distributors, Inc. 500 Boylston Street, Boston, MA 02116-3741 | Deloitte & Touche LLP 200 Berkeley Street, Boston, MA 02116 | |
| Portfolio Manager | ||
| Geoffrey Schechter |
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BOARD REVIEW OF INVESTMENT ADVISORY AGREEMENT
A discussion regarding the Board’s most recent review and renewal of the fund’s Investment Advisory Agreement with MFS is available by clicking on the fund’s name under “Mutual Funds” in the “Products and Performance” section of the MFS Web site (mfs.com).
PROXY VOTING POLICIES AND INFORMATION
A general description of the MFS funds’ proxy voting policies and procedures is available without charge, upon request, by calling 1-800-225-2606, by visiting the Proxy Voting section of mfs.com 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 without charge by visiting the Proxy Voting section of mfs.com or by visiting the SEC’s Web site at http://www.sec.gov.
QUARTERLY PORTFOLIO DISCLOSURE
The fund will file a complete schedule of portfolio holdings with the Securities and Exchange Commission (the Commission) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q may be reviewed and copied at the:
Public Reference Room
Securities and Exchange Commission
100 F Street, NE, Room 1580
Washington, D.C. 20549
Information on the operation of the Public Reference Room may be obtained by calling the Commission at 1-800-SEC-0330. The fund’s Form N-Q is available on the EDGAR database on the Commission’s Internet Web site at http://www.sec.gov, and copies of this information may be obtained, upon payment of a duplicating fee, by electronic request at the following e-mail address: publicinfo@sec.gov or by writing the Public Reference Section at the above address.
A shareholder can also obtain the quarterly portfolio holdings report at mfs.com.
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 by visiting the “News & Commentary” section of mfs.com or by clicking on the fund’s name under “Mutual Funds” in the “Products and Performance” section of mfs.com.
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FEDERAL TAX INFORMATION (unaudited)
The fund will notify shareholders of amounts for use in preparing 2010 income tax forms in January 2011. The following information is provided pursuant to provisions of the Internal Revenue Code.
Of the dividends paid from net investment income during the fiscal year, 100.00% is designated as exempt interest dividends for federal income tax purposes. If the fund has earned income on private activity bonds, a portion of the dividends paid may be considered a tax preference item for purposes of computing a shareholder’s alternative minimum tax.
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Privacy is a concern for every investor today. At MFS Investment Management® and the MFS funds, we take this concern very seriously. We want you to understand our policies about the investment products and services that we offer, and how we protect the nonpublic personal information of investors who have a direct relationship with us and our wholly owned subsidiaries.
Throughout our business relationship, you provide us with personal information. We maintain information and records about you, your investments, and the services you use. Examples of the nonpublic personal information we maintain include
| Ÿ | data from investment applications and other forms |
| Ÿ | share balances and transactional history with us, our affiliates, or others |
| Ÿ | facts from a consumer reporting agency |
We do not disclose any nonpublic personal information about our customers or former customers to anyone, except as permitted by law. We may share nonpublic personal information with third parties or certain of our affiliates in connection with servicing your account or processing your transactions. We may share information with companies or financial institutions that perform marketing services on our behalf or with other financial institutions with which we have joint marketing arrangements, subject to any legal requirements.
Authorization to access your nonpublic personal information is limited to appropriate personnel who provide products, services, or information to you. We maintain physical, electronic, and procedural safeguards to help protect the personal information we collect about you.
If you have any questions about the MFS privacy policy, please call 1-800-225-2606 any business day.
Note: If you own MFS products or receive MFS services 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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| ITEM 2. | CODE OF ETHICS. |
The Registrant has adopted a Code of Ethics 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. The Registrant has not amended any provision in its Code of Ethics (the “Code”) that relates to an element of the Code’s definitions enumerated in paragraph (b) of Item 2 of this Form N-CSR.
A copy of the Code of Ethics is filed as an exhibit to this Form N-CSR.
| ITEM 3. | AUDIT COMMITTEE FINANCIAL EXPERT. |
Messrs. Robert E. Butler, John P. Kavanaugh and Robert W. Uek and Ms. Laurie J. Thomsen, 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. Butler, Kavanaugh and Uek and Ms. Thomsen 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 each series of the Registrant (collectively, the “Funds”). The tables below set forth the audit fees billed to the Funds as well as fees for non-audit services provided to the Funds and/or to the Funds’ 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 Funds (“MFS Related Entities”).
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For the fiscal years ended March 31, 2010 and 2009, audit fees billed to the Funds by Deloitte were as follows:
| Audit Fees | ||||
| 2010 | 2009 | |||
Fees billed by Deloitte: | ||||
MFS Alabama Municipal Bond Fund | 38,179 | 37,446 | ||
MFS Arkansas Municipal Bond Fund | 38,179 | 37,446 | ||
MFS California Municipal Bond Fund | 38,179 | 37,446 | ||
MFS Florida Municipal Bond Fund | 38,179 | 37,446 | ||
MFS Georgia Municipal Bond Fund | 38,179 | 37,446 | ||
MFS Maryland Municipal Bond Fund | 38,179 | 37,446 | ||
MFS Massachusetts Municipal Bond Fund | 38,179 | 37,446 | ||
MFS Mississippi Municipal Bond Fund | 38,179 | 37,446 | ||
MFS Municipal Income Fund | 43,294 | 42,461 | ||
MFS New York Municipal Bond Fund | 38,179 | 37,446 | ||
MFS North Carolina Municipal Bond Fund | 38,179 | 37,446 | ||
MFS Pennsylvania Municipal Bond Fund | 38,179 | 37,446 | ||
MFS South Carolina Municipal Bond Fund | 38,179 | 37,446 | ||
MFS Tennessee Municipal Bond Fund | 38,179 | 37,446 | ||
MFS Virginia Municipal Bond Fund | 38,179 | 37,446 | ||
MFS West Virginia Municipal Bond Fund | 38,179 | 37,446 | ||
Total | 615,979 | 604,151 | ||
For the fiscal years ended March 31, 2010 and 2009, fees billed by Deloitte for audit-related, tax and other services provided to the Funds and for audit-related, tax and other services provided to MFS and MFS Related Entities were as follows:
| Audit-Related Fees1 | Tax Fees2 | All Other Fees3 | ||||||||||
| 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | |||||||
Fees billed by Deloitte: | ||||||||||||
To MFS Alabama Municipal Bond Fund | 0 | 0 | 5,240 | 5,137 | 1,609 | 1,022 | ||||||
To MFS Arkansas Municipal Bond Fund | 0 | 0 | 5,240 | 5,137 | 1,609 | 1,022 | ||||||
To MFS California Municipal Bond Fund | 0 | 0 | 5,240 | 5,137 | 1,609 | 1,022 | ||||||
To MFS Florida Municipal Bond Fund | 0 | 0 | 5,240 | 5,137 | 1,609 | 1,022 | ||||||
To MFS Georgia Municipal Bond Fund | 0 | 0 | 5,240 | 5,137 | 1,609 | 1,022 | ||||||
To MFS Maryland Municipal Bond Fund | 0 | 0 | 5,240 | 5,137 | 1,609 | 1,022 | ||||||
To MFS Massachusetts Municipal Bond Fund | 0 | 0 | 5,240 | 5,137 | 1,609 | 1,022 | ||||||
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To MFS Mississippi Municipal Bond Fund | 0 | 0 | 5,240 | 5,137 | 1,609 | 1,022 | ||||||
To MFS Municipal Income Fund | 0 | 0 | 5,296 | 5,192 | 1,609 | 1,022 | ||||||
To MFS New York Municipal Bond Fund | 0 | 0 | 5,240 | 5,137 | 1,609 | 1,022 | ||||||
To MFS North Carolina Municipal Bond Fund | 0 | 0 | 5,240 | 5,137 | 1,609 | 1,022 | ||||||
To MFS Pennsylvania Municipal Bond Fund | 0 | 0 | 5,240 | 5,137 | 1,609 | 1,022 | ||||||
To MFS South Carolina Municipal Bond Fund | 0 | 0 | 5,240 | 5,137 | 1,609 | 1,022 | ||||||
To MFS Tennessee Municipal Bond Fund | 0 | 0 | 5,240 | 5,137 | 1,609 | 1,022 | ||||||
To MFS Virginia Municipal Bond Fund | 0 | 0 | 5,240 | 5,137 | 1,609 | 1,022 | ||||||
To MFS West Virginia Municipal Bond Fund | 0 | 0 | 5,240 | 5,137 | 1,609 | 1,022 | ||||||
Total fees billed by Deloitte To above Funds: | 0 | 0 | 83,896 | 82,247 | 25,744 | 16,352 | ||||||
To MFS and MFS Related Entities of MFS Alabama Municipal Bond Fund* | 1,130,827 | 1,157,363 | 0 | 0 | 59,174 | 223,140 | ||||||
To MFS and MFS Related Entities of MFS Arkansas Municipal Bond Fund* | 1,130,827 | 1,157,363 | 0 | 0 | 59,174 | 223,140 | ||||||
To MFS and MFS Related Entities of MFS California Municipal Bond Fund* | 1,130,827 | 1,157,363 | 0 | 0 | 59,174 | 223,140 | ||||||
To MFS and MFS Related Entities of MFS Florida Municipal Bond Fund* | 1,130,827 | 1,157,363 | 0 | 0 | 59,174 | 223,140 | ||||||
To MFS and MFS Related Entities of MFS Georgia Municipal Bond Fund* | 1,130,827 | 1,157,363 | 0 | 0 | 59,174 | 223,140 | ||||||
To MFS and MFS Related Entities of MFS Maryland Municipal Bond Fund* | 1,130,827 | 1,157,363 | 0 | 0 | 59,174 | 223,140 | ||||||
To MFS and MFS Related Entities of MFS Massachusetts Municipal Bond Fund* | 1,130,827 | 1,157,363 | 0 | 0 | 59,174 | 223,140 | ||||||
To MFS and MFS Related Entities of MFS Mississippi Municipal Bond Fund* | 1,130,827 | 1,157,363 | 0 | 0 | 59,174 | 223,140 | ||||||
To MFS and MFS Related Entities of MFS Municipal Income Fund* | 1,130,827 | 1,157,363 | 0 | 0 | 59,174 | 223,140 | ||||||
To MFS and MFS Related Entities of MFS New York Municipal Bond Fund* | 1,130,827 | 1,157,363 | 0 | 0 | 59,174 | 223,140 |
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To MFS and MFS Related Entities of MFS North Carolina Municipal Bond Fund* | 1,130,827 | 1,157,363 | 0 | 0 | 59,174 | 223,140 | ||||||
To MFS and MFS Related Entities of MFS Pennsylvania Municipal Bond Fund* | 1,130,827 | 1,157,363 | 0 | 0 | 59,174 | 223,140 | ||||||
To MFS and MFS Related Entities of MFS South Carolina Municipal Bond Fund* | 1,130,827 | 1,157,363 | 0 | 0 | 59,174 | 223,140 | ||||||
To MFS and MFS Related Entities of MFS Tennessee Municipal Bond Fund* | 1,130,827 | 1,157,363 | 0 | 0 | 59,174 | 223,140 | ||||||
To MFS and MFS Related Entities of MFS Virginia Municipal Bond Fund* | 1,130,827 | 1,157,363 | 0 | 0 | 59,174 | 223,140 | ||||||
To MFS and MFS Related Entities of MFS West Virginia Municipal Bond Fund* | 1,130,827 | 1,157,363 | 0 | 0 | 59,174 | 223,140 |
Aggregate fees for non-audit services:
| 2010 | 2009 | |||
To MFS Alabama Municipal Bond Fund, MFS and MFS Related Entities# | 1,372,975 | 1,436,486 | ||
To MFS Arkansas Municipal Bond Fund, MFS and MFS Related Entities# | 1,372,975 | 1,436,486 | ||
To MFS California Municipal Bond Fund, MFS and MFS Related Entities# | 1,372,975 | 1,436,486 | ||
To MFS Florida Municipal Bond Fund, MFS and MFS Related Entities# | 1,372,975 | 1,436,486 | ||
To MFS Georgia Municipal Bond Fund, MFS and MFS Related Entities# | 1,372,975 | 1,436,486 | ||
To MFS Maryland Municipal Bond Fund, MFS and MFS Related Entities# | 1,372,975 | 1,436,486 |
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To MFS Massachusetts Municipal Bond Fund, MFS and MFS Related Entities# | 1,372,975 | 1,436,486 | ||
To MFS Mississippi Municipal Bond Fund, MFS and MFS Related Entities# | 1,372,975 | 1,436,486 | ||
To MFS Municipal Income Fund, MFS and MFS Related Entities# | 1,373,031 | 1,436,541 | ||
To MFS New York Municipal Bond Fund, MFS and MFS Related Entities# | 1,372,975 | 1,436,486 | ||
To MFS North Carolina Municipal Bond Fund, MFS and MFS Related Entities# | 1,372,975 | 1,436,486 | ||
To MFS Pennsylvania Municipal Bond Fund, MFS and MFS Related Entities# | 1,372,975 | 1,436,486 | ||
To MFS South Carolina Municipal Bond Fund, MFS and MFS Related Entities# | 1,372,975 | 1,436,486 | ||
To MFS Tennessee Municipal Bond Fund, MFS and MFS Related Entities# | 1,372,975 | 1,436,486 | ||
To MFS Virginia Municipal Bond Fund, MFS and MFS Related Entities# | 1,372,975 | 1,436,486 | ||
To MFS West Virginia Municipal Bond Fund, MFS and MFS Related Entities# | 1,372,975 | 1,436,486 |
| * | 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 Funds (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 Funds 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. |
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| 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,” including fees for services related to analysis of certain portfolio holdings, and review of internal controls and review of Rule 38a-1 compliance program. |
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 Funds 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 in each period between 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 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.
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| ITEM 5. | AUDIT COMMITTEE OF LISTED REGISTRANTS. |
Not applicable to the Registrant.
| ITEM 6. | INVESTMENTS |
A schedule of investments of the Registrant is included as part of the report to shareholders of such series under Item 1 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 second fiscal quarter of 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. |
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| ITEM 12. | EXHIBITS. |
| (a) | File the exhibits listed below as part of this form. Letter or number the exhibits in the sequence indicated. |
| (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: Code of Ethics attached hereto. |
| (2) | A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2 under the Act (17 CFR 270.30a-2): Attached hereto. |
| (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. |
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Notice
A copy of the Amended and Restated Declaration of Trust, as amended, of the Registrant is on file with the Secretary of State of The Commonwealth of Massachusetts and 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.
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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 MUNICIPAL SERIES TRUST
| By (Signature and Title)* | MARIA F. DWYER | |
| Maria F. Dwyer, President |
Date: May 14, 2010
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)* | MARIA F. DWYER | |
Maria F. Dwyer, President (Principal Executive Officer) |
Date: May 14, 2010
| By (Signature and Title)* | JOHN M. CORCORAN | |
John M. Corcoran, Treasurer (Principal Financial Officer and Accounting Officer) |
Date: May 14, 2010
| * | Print name and title of each signing officer under his or her signature. |