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 811-0203
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MASSACHUSETTS INVESTORS TRUST
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(Exact name of registrant as specified in charter)
500 Boylston Street, Boston, Massachusetts 02116
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(Address of principal executive offices) (Zip code)
Stephen E. Cavan
Massachusetts Financial Services Company
500 Boylston Street
Boston, Massachusetts 02116
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(Name and address of agents for service)
Registrant's telephone number, including area code: (617) 954-5000
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Date of fiscal year end: December 31, 2002
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Date of reporting period: June 30, 2003
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ITEM 1. REPORTS TO STOCKHOLDERS.
MFS(R) Mutual Funds
SEMIANNUAL REPORT 6/30/03
[graphic omitted]
MASSACHUSETTS INVESTORS TRUST
[graphic omitted]
A path for pursuing opportunity
[logo] M F S(R)
INVESTMENT MANAGEMENT
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MFS(R) PRIVACY POLICY: A COMMITMENT TO YOU
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Privacy is a concern for every investor today. At MFS Investment Management(R)
and the MFS funds, we take this concern very seriously. We want you to
understand our policies about every MFS investment product and service 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
o data from investment applications and other forms
o share balances and transactional history with us, our affiliates, or others
o 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 information
with companies or financial institutions that perform marketing services on our
behalf or to other financial institutions with which we have joint marketing
arrangements.
Access to your nonpublic personal information is limited to appropriate
personnel who provide products, services, or information to you. We maintain
physical, electronic, and procedural safeguards that comply with applicable
federal regulations.
If you have any questions about MFS' privacy policy, please call 1-800-225-2606
any business day between 8 a.m. and 8 p.m. Eastern time.
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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NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
NOT A DEPOSIT NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
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MASSACHUSETTS INVESTORS TRUST
The fund seeks long-term growth of capital with a secondary objective to seek
reasonable current income.
TABLE OF CONTENTS
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LETTER FROM THE CHAIRMAN 1
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MFS ORIGINAL RESEARCH(R) 4
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MANAGEMENT REVIEW 5
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PERFORMANCE SUMMARY 8
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PORTFOLIO OF INVESTMENTS 12
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FINANCIAL STATEMENTS 20
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NOTES TO FINANCIAL STATEMENTS 39
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TRUSTEES AND OFFICERS 48
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MONEY MANAGEMENT FOR ALL TYPES
OF INVESTORS 50
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CONTACT INFORMATION 51
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LETTER FROM THE CHAIRMAN
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Dear Shareholders,
[Photo of Jeffrey L. Shames]
Our firm was built on the philosophy that bottom-up fundamental research is
the best means of achieving superior long-term investment performance. When
you're managing billions of dollars for investors, we think you have an
obligation to have in-depth, firsthand knowledge of every company owned,
anywhere in the world.
We have structured our equity and fixed-income investment teams to capitalize
on the strength of our investment process and the global reach of our analysts
based around the world. Our global research team is composed of 45 equity
research analysts, 27 based in the United States and 18 based abroad, and 26
credit research analysts. Each analyst is assigned one or more specific
industries and then charged with identifying the most attractive investment
ideas within these industries. Our U.S. and non-U.S. equity research analysts
are unified into one team that emphasizes a collaborative process in analyzing
securities around the globe. Credit analysts also share their expertise in
each segment of the fixed-income market and work as part of the same team
ensuring that every member has access to information that may have a material
effect on their investment decisions. As MFS(R) continues to grow and as
markets become more complex, we believe our structure will enable us to
maintain a consistent investment process with the goal of providing strong,
long-term investment performance across market capitalizations, investment
disciplines, and country borders for our investors.
THINKING GLOBALLY
More companies than ever compete globally and, therefore, we must make
investment decisions knowing what is occurring outside of a company's local
market. This trend plays to the strength of our environment of collaboration
between our analysts and portfolio managers around the globe. The analysts
know the most details about individual companies in specific industries and
geographic regions. The portfolio managers have broader, cross-industry
insights and a wider perspective on companies and industries. Our goal is to
make sure those two sets of perspectives coordinate and work well together. As
the world's markets become more interdependent, we believe our collaborative
environment allows us to produce solid investment ideas for our portfolios.
BUILDING A NETWORK
Simply put, we believe our structure assures that our analysts maintain their
peripheral vision rather than becoming too immersed in a specific segment of
the market. We do not believe that analysts and portfolio managers - no matter
how talented they may be - can succeed by working in a vacuum. Through the
latest technology available, our entire research team meets frequently via
video and telephone teleconferences, e-mail, and PDAs (personal digital
assistants). When we hire new analysts, we require them to spend an average of
one year in Boston to learn MFS' culture and to build relationships with their
peers. We believe the interaction among our analysts is the key to making our
collaborative process work toward delivering superior long-term investment
performance for our investors. Our analysts work out of four research offices
in Boston, London, Singapore, and Tokyo, and are assigned to specific regions
and industries. They meet regularly with their colleagues to discuss world
trends affecting the companies they cover.
In addition, our equity and fixed-income analysts often visit company
managements as a team. This collaboration is vital because of the different
perspectives they bring to their analysis. Because a company's stock price has
tended to follow its earnings over time, our equity research analysts tend to
focus on gauging earnings potential, a company's position within its industry,
and its ability to grow its market share. Conversely, our fixed-income
analysts will look at stability of a company's cash flow, the value of its
assets, and its capital structure to gauge whether the company can generate
enough free cash flow to pay off its debt. As a result of their collaboration,
we believe we're able to see a more complete view of a company.
WORKING TOGETHER
Our portfolio managers also work closely with the analysts to select the most
appropriate securities for their portfolios from the various recommendations
made by the analysts. Opinions are exchanged and ideas are challenged so that
each member of our team is involved in our investment process. In fact, our
portfolio managers will be the first ones to tell you that many of their best
ideas start with the research analysts. We believe our collaborative approach
also provides us with an effective way to assess risk. Our portfolio managers
are not discouraged from taking on an appropriate level of risk; however, we
have rigorous guidelines to assure that the level of risk is measured and
monitored and consistent with the investment philosophies of each of our
portfolios. All told, we believe our culture empowers the members of our
investment team to continue to do their best work and allows them to make
better investment decisions.
As always, we appreciate your confidence in MFS and welcome any questions or
comments you may have.
Respectfully,
/s/ Jeffrey L. Shames
Jeffrey L. Shames
Chairman
MFS Investment Management(R)
July 21, 2003
The opinions expressed in this letter are those of MFS and no forecasts can be
guaranteed.
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MFS ORIGINAL RESEARCH(R)
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THE HUMAN SIDE OF MONEY MANAGEMENT
For nearly 80 years MFS has been offering investors clear paths to pursuing
specific investment objectives. Today, millions of individuals and thousands
of institutions all over the world look to MFS to manage their assets with
insight and care.
Our success, we believe, has to do with the fact that we see investors as
people with plans, not just dollars to invest.
When you invest with MFS, you invest with a company dedicated to helping you
realize your long-term financial goals.
INVESTORS CHOOSE MFS FOR OUR
o global asset management expertise across all asset classes
o time-tested money management process for pursuing consistent results
o full spectrum of investment products backed by MFS Original Research(R)
o resources and services that match real-life needs
TURNING INFORMATION INTO OPPORTUNITY
Sound investments begin with sound information. MFS has been doing its own
research and analyzing findings in-house for decades. The process we use to
uncover opportunity is called MFS Original Research(R).
MFS ORIGINAL RESEARCH INVOLVES:
o meeting with the management of 3,000 companies each year to assess their
business plans and the managers' ability to execute those plans
o making onsite visits to more than 2,000 companies annually to gain first-hand
knowledge of their operations and products
o analyzing financial statements and balance sheets
o talking extensively with companies' customers and competitors
o developing our own proprietary estimates of companies' earnings
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MANAGEMENT REVIEW
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MORE POSITIVE MARKET ENVIRONMENT
Investors enjoyed better results during the first six months of 2003 than they
had in 2002. Nearly all asset classes showed positive performance. A second-
quarter rally gave investors in U.S. and overseas stock markets their best
quarter in a few years.
Looking at the global economy, however, we did not see much hard evidence that
economic factors - such as unemployment, consumer spending, or business
investment - had dramatically improved since the beginning of the year. In our
view, the market rally seemed largely based on a combination of relief that
the Iraqi situation was contained, hope for stronger economy, earnings
improvement in the first quarter, and low interest rates.
DETRACTORS FROM PERFORMANCE
Although the fund generated solid positive returns, it underperformed its
benchmark. The three weakest sectors for the portfolio were financial
services, technology, and leisure stocks.
The fund was underweighted in financial services throughout the period,
particularly in the bank and credit stocks as well as the insurance industry.
The fund's small position in J.P. Morgan and not owning Capital One, which
were among the strongest performers in the group for the period, negatively
impacted portfolio performance.
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TOP 5 STOCK HOLDINGS
AS OF 6/30/03
CITIGROUP, INC. 3.2%
Banking and financial services
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MICROSOFT CORP. 3.1%
Computer software and systems
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PFIZER, INC. 3.1%
Pharmaceutical products
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WAL-MART STORES, INC. 2.9%
Large retail chain
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EXXONMOBIL CORP. 2.8%
Oil and natural gas exploration,
production
and transportation
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The portfolio is actively managed, and current
holdings may be different.
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We shifted holdings from Freddie Mac (Federal Home Loan Mortgage Corporation) to
Fannie Mae (Federal National Mortgage Association) early in the second quarter
of 2003 before Freddie Mac announced the resignations of its top three
executives. These resignations caused the stocks of both Freddie Mac and Fannie
Mae to drop dramatically. The portfolio weathered this event better than if we
had not made the shift, but performance was affected by the negative stock
reaction to investor perceptions that political and regulatory risk had
increased for both companies.
The fund was underweighted in insurance stocks; however, our stock selection
in this group was disappointing, particularly the fund's ownership of Hartford
and Chubb. The stock prices of these companies had declined because they had
to increase their liability reserves to cover potential claims. However, when
each company announced separately that they were going to issue stock to raise
the necessary cash, the stock prices for each company rebounded.
The fund was underweighted in technology stocks for the past six months and
that hurt performance relative to the fund's benchmark. Many of the stocks we
didn't own, such as eBay and Yahoo, turned out to be among the best performers
for the period. We believed that other opportunities were more attractive and
carried less risk to investors.
The leisure sector detracted from results as the print and publishing sector,
a large overweight for the portfolio, underperformed the market. Companies
such as Gannett, New York Times, and Tribune were all hurt by the impact on
advertising from the war with Iraq and sluggish demand for help wanted ads.
SOLID RETURNS FROM SELECTED SECURITIES
The fund benefited from strong performance from a wide variety of selected
securities such as Genentech, Home Depot, Analog Devices, and VERITAS.
Genentech stock rose on unexpectedly positive data from a developmental drug
for colorectal cancer and approval of several new drugs. Home Depot's sales as
of June 30, 2003, exceeded many analysts' low expectations. Sales were helped,
in part, by the company's exclusive arrangement with lawn care equipment
manufacturer John Deere and strength in its appliance sales.
The stock price of VERITAS, a data storage technology company, benefited from
the rally in technology stocks, and rose further as investors began to detect
signs of improvement in some of the company's balance sheet metrics. We feel
that semiconductor company Analog Devices is a very high quality firm that
many investors believe is well-positioned to benefit from an economic
recovery.
/s/ John Laupheimer, Jr. /s/ Brooks Taylor
John Laupheimer, Jr. Brooks Taylor
Portfolio Manager Portfolio Manager
The opinions expressed in this report are those of the portfolio managers and
are current only through the end of the period of the report as stated on the
cover. These views are subject to change at any time based on market and other
conditions, and no forecasts can be guaranteed.
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PERFORMANCE SUMMARY THROUGH 6/30/03
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Because mutual funds are designed for investors with long-term goals, we have
provided cumulative results as well as the average annual total returns for
the applicable time periods. Performance results reflect the percentage change
in net asset value, including the reinvestment of any dividends and capital
gains distributions. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. (See
Notes to Performance Summary.)
TOTAL RETURNS
Average annual
without sales charge
Class
Share inception
class date 6-mo 1-yr 3-yr 5-yr 10-yr
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A 7/15/24 -- -2.96% -11.07% -4.37% 8.42%
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B 9/7/93 -- -3.54% -11.64% -4.99% 7.66%
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C 7/1/96 -- -3.62% -11.64% -4.99% 7.92%
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I 1/2/97 -- -2.61% -10.75% -4.03% 8.67%
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J 2/10/00 -- -3.61% -11.65% -4.78% 8.19%
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R 12/31/02 -- -2.93% -11.06% -4.36% 8.42%
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529A 7/31/02 -- -3.21% -11.15% -4.42% 8.39%
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529B 7/31/02 -- -3.65% -11.28% -4.51% 8.34%
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529C 7/31/02 -- -3.66% -11.29% -4.51% 8.34%
----------------------------------------------------------------------------
Average
Annual
Comparative benchmarks
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Average large cap
core fund+ 10.38% -1.94% -12.90% -2.71% 8.13%
----------------------------------------------------------------------------
Standard & Poor's
500 Stock Index# 11.75% 0.25% -11.19% -1.61% 10.04%
Periods less than one year are actual, not annualized.
Average annual
with sales charge
Share
class 6-mo 1-yr 3-yr 5-yr 10-yr
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A -- -8.54% -12.81% -5.50% 7.78%
----------------------------------------------------------------------------
B -- -7.40% -12.50% -5.33% 7.66%
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C -- -4.59% -11.64% -4.99% 7.92%
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J -- -5.54% -12.24% -5.16% 7.97%
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529A -- -8.77% -12.89% -5.54% 7.75%
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529B -- -7.37% -12.11% -4.83% 8.34%
----------------------------------------------------------------------------
529C -- -4.59% -11.29% -4.51% 8.34%
----------------------------------------------------------------------------
I and R class shares do not have a sales charge. Please see Notes to
Performance Summary for more details.
Cumulative
without sales charge
----------------------------------------------------------------------------
A 8.73% -2.96% -29.68% -20.02% 124.41%
----------------------------------------------------------------------------
B 8.43% -3.54% -31.01% -22.57% 109.22%
----------------------------------------------------------------------------
C 8.39% -3.62% -31.02% -22.59% 114.36%
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I 8.88% -2.61% -28.91% -18.58% 129.62%
----------------------------------------------------------------------------
J 8.35% -3.61% -31.03% -21.72% 119.64%
----------------------------------------------------------------------------
R 8.77% -2.93% -29.66% -19.99% 124.49%
----------------------------------------------------------------------------
529A 8.61% -3.21% -29.86% -20.22% 123.85%
----------------------------------------------------------------------------
529B 8.30% -3.65% -30.18% -20.59% 122.83%
----------------------------------------------------------------------------
529C 8.32% -3.66% -30.19% -20.60% 122.79%
----------------------------------------------------------------------------
Periods less than one year are actual, not annualized.
+ Source: Lipper Inc., an independent firm that reports mutual fund performance.
# Source: Standard & Poor's Micropal, Inc.
INDEX DEFINITION
STANDARD & POOR'S 500 STOCK INDEX (THE S&P 500) - a commonly used measure of
the broad U.S. stock market.
It is not possible to invest directly in an index.
NOTES TO PERFORMANCE SUMMARY
Class A and 529A results, including sales charge, reflects the deduction of
the maximum 5.75% sales charge. Class B and 529B results, including sales
charge, reflects the deduction of the applicable contingent deferred sales
charge (CDSC), which declines over six years from 4% to 0%. Class C and 529C
results, including sales charge, redeemed within one year from the end of the
calendar month of purchase reflects the deduction of the 1% CDSC. Class I
shares have no sales charges and are available only to certain investors.
Class J results, including sales charge, reflects the deduction of the maximum
3% sales charge and are available only to residents of Japan. Class R shares
have no sales charges and are available only to certain retirement plans.
Class 529A, 529B, and 529C shares are only available in conjunction with
qualified tuition programs, such as the MFS 529 Savings Plan.
Performance for share classes offered after class A shares includes the
performance of the fund's class A shares for periods prior to their offering.
Blended class performance has been adjusted to take into account differences
in sales loads, if any, applicable to these share classes, but has not been
adjusted to take into account differences in class specific operating expenses
(such as Rule 12b-1 fees). Compared to performance these share classes would
have experienced had they been offered for the entire period, the use of
blended performance generally results in higher performance for share classes
with higher operating expenses than the initial share class, and lower
performance for share classes with lower operating expenses than the initial
share class.
All performance results reflect any applicable expense subsidies and waivers
in effect during the periods shown; without these, the results would have
been less favorable. See the prospectus and financial statements for details.
All results are historical and assume the reinvestment of dividends and
capital gains.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PAST PERFORMANCE
IS NO GUARANTEE OF FUTURE RESULTS, AND 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.
MARKET VOLATILITY CAN SIGNIFICANTLY AFFECT SHORT-TERM PERFORMANCE, AND MORE
RECENT RETURNS MAY BE DIFFERENT FROM THOSE SHOWN. VISIT WWW.MFS.COM FOR MORE
CURRENT PERFORMANCE RESULTS.
KEY RISK CONSIDERATIONS
Investing in foreign and/or emerging markets securities involves risks
relating to interest rates, currency exchange rates, economic, and political
conditions.
These risks may increase share price volatility. Please see the prospectus for
further information regarding these and other risk considerations.
This report is prepared for the general information of shareholders. It is
authorized for distribution to prospective investors only when preceded or
accompanied by a current prospectus.
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PORTFOLIO OF INVESTMENTS (unaudited) - 6/30/2003
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The Portfolio of Investments is a list of all securities owned by your fund. It is categorized by
broad-based asset classes.
Stocks - 99.3%
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ISSUER SHARES $ VALUE
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U.S. Stocks - 91.2%
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Aerospace - 0.9%
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Lockheed Martin Corp. 721,300 $34,312,241
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Northrop Grumman Corp. 268,800 23,194,752
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$57,506,993
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Banks & Credit Cos. - 5.6%
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Bank of America Corp. 904,488 $71,481,687
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Bank One Corp. 1,809,600 67,280,928
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SunTrust Banks, Inc. 587,300 34,850,382
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U.S. Bancorp 2,116,900 51,864,050
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Wells Fargo Co. 2,818,119 142,033,197
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$367,510,244
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Biotechnology - 3.1%
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Abbott Laboratories, Inc. 784,600 $34,334,096
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Amgen, Inc.* 1,330,500 88,398,420
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Genentech, Inc.* 692,800 49,964,736
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Guidant Corp. 666,900 29,603,691
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$202,300,943
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Building - 0.1%
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American Standard Cos., Inc.* 113,700 $8,405,841
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Business Machines - 2.4%
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Hewlett-Packard Co. 844,593 $17,989,831
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International Business Machines Corp. 1,739,300 143,492,250
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$161,482,081
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Business Services - 1.0%
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ARAMARK Corp.* 472,000 $10,582,240
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Automatic Data Processing, Inc. 487,055 16,491,682
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BEA Systems, Inc.* 632,600 6,870,036
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First Data Corp. 790,100 32,741,744
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$66,685,702
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Chemicals - 1.1%
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Air Products & Chemicals, Inc. 581,100 $24,173,760
- -----------------------------------------------------------------------------------------------------
PPG Industries, Inc. 1,006,600 51,074,884
- -----------------------------------------------------------------------------------------------------
$75,248,644
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Computer Software - 1.0%
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Oracle Corp.* 5,355,200 $64,369,504
- -----------------------------------------------------------------------------------------------------
Computer Software - Personal Computers - 3.1%
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Microsoft Corp. 7,867,400 $201,484,114
- -----------------------------------------------------------------------------------------------------
Computer Software - Services - 0.6%
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VERITAS Software Corp.* 1,327,100 $38,047,957
- -----------------------------------------------------------------------------------------------------
Conglomerates - 2.7%
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General Electric Co. 5,308,694 $152,253,344
- -----------------------------------------------------------------------------------------------------
Tyco International Ltd. 1,545,600 29,335,488
- -----------------------------------------------------------------------------------------------------
$181,588,832
- -----------------------------------------------------------------------------------------------------
Consumer Goods & Services - 4.6%
- -----------------------------------------------------------------------------------------------------
Altria Group, Inc. 2,440,100 $110,878,144
- -----------------------------------------------------------------------------------------------------
Gillette Co. 499,300 15,907,698
- -----------------------------------------------------------------------------------------------------
Kimberly-Clark Corp. 1,115,400 58,156,956
- -----------------------------------------------------------------------------------------------------
Newell Rubbermaid, Inc. 617,700 17,295,600
- -----------------------------------------------------------------------------------------------------
Procter & Gamble Co. 1,147,929 102,372,308
- -----------------------------------------------------------------------------------------------------
$304,610,706
- -----------------------------------------------------------------------------------------------------
Containers - 0.1%
- -----------------------------------------------------------------------------------------------------
Smurfit-Stone Container Corp.* 595,800 $7,763,274
- -----------------------------------------------------------------------------------------------------
Electrical Equipment - 0.4%
- -----------------------------------------------------------------------------------------------------
Emerson Electric Co. 493,600 $25,222,960
- -----------------------------------------------------------------------------------------------------
Electronics - 1.9%
- -----------------------------------------------------------------------------------------------------
Analog Devices, Inc.* 1,590,500 $55,381,210
- -----------------------------------------------------------------------------------------------------
Microchip Technology, Inc. 1,667,200 41,063,136
- -----------------------------------------------------------------------------------------------------
Novellus Systems, Inc.* 386,400 14,150,354
- -----------------------------------------------------------------------------------------------------
Texas Instruments, Inc. 929,573 16,360,485
- -----------------------------------------------------------------------------------------------------
$126,955,185
- -----------------------------------------------------------------------------------------------------
Energy - 1.2%
- -----------------------------------------------------------------------------------------------------
ConocoPhillips 313,600 $17,185,280
- -----------------------------------------------------------------------------------------------------
TXU Corp. 2,747,200 61,674,640
- -----------------------------------------------------------------------------------------------------
$78,859,920
- -----------------------------------------------------------------------------------------------------
Entertainment - 4.8%
- -----------------------------------------------------------------------------------------------------
AOL Time Warner, Inc.* 5,251,550 $84,497,440
- -----------------------------------------------------------------------------------------------------
Clear Channel Communications, Inc.* 1,572,200 66,645,558
- -----------------------------------------------------------------------------------------------------
Liberty Media Corp.* 1,468,500 16,975,860
- -----------------------------------------------------------------------------------------------------
Viacom, Inc., "B"* 2,773,758 121,102,274
- -----------------------------------------------------------------------------------------------------
Walt Disney Co. 1,251,800 24,723,050
- -----------------------------------------------------------------------------------------------------
$313,944,182
- -----------------------------------------------------------------------------------------------------
Financial Institutions - 9.2%
- -----------------------------------------------------------------------------------------------------
Charter One Financial, Inc. 328,199 $10,233,245
- -----------------------------------------------------------------------------------------------------
Citigroup, Inc. 4,931,533 211,069,612
- -----------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp. 1,243,022 63,108,227
- -----------------------------------------------------------------------------------------------------
Federal National Mortgage Assn. 2,488,380 167,816,347
- -----------------------------------------------------------------------------------------------------
Goldman Sachs Group, Inc. 684,500 57,326,875
- -----------------------------------------------------------------------------------------------------
J. P. Morgan Chase & Co. 495,600 16,939,608
- -----------------------------------------------------------------------------------------------------
MBNA Corp. 865,900 18,045,356
- -----------------------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc. 1,024,500 47,823,660
- -----------------------------------------------------------------------------------------------------
State Street Corp. 360,052 14,186,049
- -----------------------------------------------------------------------------------------------------
$606,548,979
- -----------------------------------------------------------------------------------------------------
Financial Services - 0.7%
- -----------------------------------------------------------------------------------------------------
Mellon Financial Corp. 717,600 $19,913,400
- -----------------------------------------------------------------------------------------------------
SLM Corp. 638,100 24,994,377
- -----------------------------------------------------------------------------------------------------
$44,907,777
- -----------------------------------------------------------------------------------------------------
Food & Beverage Products - 2.7%
- -----------------------------------------------------------------------------------------------------
Anheuser-Busch Cos., Inc. 697,300 $35,597,165
- -----------------------------------------------------------------------------------------------------
Archer-Daniels-Midland Co. 1,400,500 18,024,435
- -----------------------------------------------------------------------------------------------------
Kellogg Co. 487,300 16,748,501
- -----------------------------------------------------------------------------------------------------
PepsiCo, Inc. 2,488,086 110,719,827
- -----------------------------------------------------------------------------------------------------
$181,089,928
- -----------------------------------------------------------------------------------------------------
Forest & Paper Products - 0.9%
- -----------------------------------------------------------------------------------------------------
International Paper Co. 1,747,100 $62,423,883
- -----------------------------------------------------------------------------------------------------
Healthcare - 0.2%
- -----------------------------------------------------------------------------------------------------
Wellpoint Health Networks, Inc.* 179,300 $15,114,990
- -----------------------------------------------------------------------------------------------------
Industrial - 0.2%
- -----------------------------------------------------------------------------------------------------
Rockwell Automation, Inc. 592,600 $14,127,584
- -----------------------------------------------------------------------------------------------------
Industrial Gases - 0.8%
- -----------------------------------------------------------------------------------------------------
Praxair, Inc. 888,700 $53,410,870
- -----------------------------------------------------------------------------------------------------
Insurance - 4.3%
- -----------------------------------------------------------------------------------------------------
Allstate Corp. 470,400 $16,769,760
- -----------------------------------------------------------------------------------------------------
American International Group, Inc. 703,972 38,845,175
- -----------------------------------------------------------------------------------------------------
Chubb Corp. 471,600 28,296,000
- -----------------------------------------------------------------------------------------------------
Hartford Financial Services Group, Inc. 443,100 22,314,516
- -----------------------------------------------------------------------------------------------------
Marsh & McLennan Cos., Inc. 676,600 34,553,962
- -----------------------------------------------------------------------------------------------------
MetLife, Inc. 1,926,000 54,544,320
- -----------------------------------------------------------------------------------------------------
St. Paul Cos., Inc. 1,087,071 39,688,962
- -----------------------------------------------------------------------------------------------------
Travelers Property Casualty Corp. 2,092,025 33,263,198
- -----------------------------------------------------------------------------------------------------
Travelers Property Casualty Corp., "B" 843,500 13,301,995
- -----------------------------------------------------------------------------------------------------
$281,577,888
- -----------------------------------------------------------------------------------------------------
Machinery - 0.2%
- -----------------------------------------------------------------------------------------------------
Deere & Co. 292,600 $13,371,820
- -----------------------------------------------------------------------------------------------------
Manufacturing - 0.3%
- -----------------------------------------------------------------------------------------------------
ITT Industries, Inc. 253,700 $16,607,202
- -----------------------------------------------------------------------------------------------------
Medical & Health Products - 7.8%
- -----------------------------------------------------------------------------------------------------
AmerisourceBergen Corp. 593,300 $41,145,355
- -----------------------------------------------------------------------------------------------------
Baxter International, Inc. 1,196,800 31,116,800
- -----------------------------------------------------------------------------------------------------
Forest Laboratories, Inc.* 309,200 16,928,700
- -----------------------------------------------------------------------------------------------------
Johnson & Johnson Co. 2,790,768 144,282,705
- -----------------------------------------------------------------------------------------------------
Pfizer, Inc. 5,895,831 201,342,629
- -----------------------------------------------------------------------------------------------------
Schering Plough Corp. 4,460,200 82,959,720
- -----------------------------------------------------------------------------------------------------
$517,775,909
- -----------------------------------------------------------------------------------------------------
Medical & Health Technology Services - 1.1%
- -----------------------------------------------------------------------------------------------------
Medtronic, Inc. 472,900 $22,685,013
- -----------------------------------------------------------------------------------------------------
Tenet Healthcare Corp.* 4,318,100 50,305,865
- -----------------------------------------------------------------------------------------------------
$72,990,878
- -----------------------------------------------------------------------------------------------------
Oil Services - 1.9%
- -----------------------------------------------------------------------------------------------------
Baker Hughes, Inc. 1,372,306 $46,068,313
- -----------------------------------------------------------------------------------------------------
Noble Corp.* 486,800 16,697,240
- -----------------------------------------------------------------------------------------------------
Schlumberger Ltd. 1,180,100 56,137,357
- -----------------------------------------------------------------------------------------------------
Transocean, Inc.* 367,500 8,073,975
- -----------------------------------------------------------------------------------------------------
$126,976,885
- -----------------------------------------------------------------------------------------------------
Oils - 3.0%
- -----------------------------------------------------------------------------------------------------
Anadarko Petroleum Corp. 272,600 $12,122,522
- -----------------------------------------------------------------------------------------------------
ExxonMobil Corp. 5,144,552 184,740,862
- -----------------------------------------------------------------------------------------------------
$196,863,384
- -----------------------------------------------------------------------------------------------------
Pharmaceuticals - 1.2%
- -----------------------------------------------------------------------------------------------------
Wyeth Corp. 1,757,400 $80,049,570
- -----------------------------------------------------------------------------------------------------
Printing & Publishing - 3.3%
- -----------------------------------------------------------------------------------------------------
Gannett Co., Inc. 1,103,310 $84,745,241
- -----------------------------------------------------------------------------------------------------
McGraw-Hill Cos., Inc. 491,200 30,454,400
- -----------------------------------------------------------------------------------------------------
New York Times Co. 1,408,656 64,093,848
- -----------------------------------------------------------------------------------------------------
Tribune Co. 827,400 39,963,420
- -----------------------------------------------------------------------------------------------------
$219,256,909
- -----------------------------------------------------------------------------------------------------
Real Estate Investment Trusts - 0.2%
- -----------------------------------------------------------------------------------------------------
Starwood Hotels & Resorts Co. 533,400 $15,249,906
- -----------------------------------------------------------------------------------------------------
Restaurants & Lodging - 0.5%
- -----------------------------------------------------------------------------------------------------
Cendant Corp.* 1,265,500 $23,183,960
- -----------------------------------------------------------------------------------------------------
McDonald's Corp. 420,000 9,265,200
- -----------------------------------------------------------------------------------------------------
$32,449,160
- -----------------------------------------------------------------------------------------------------
Retail - 6.9%
- -----------------------------------------------------------------------------------------------------
CVS Corp. 2,263,800 $63,454,314
- -----------------------------------------------------------------------------------------------------
Home Depot, Inc. 3,758,000 124,464,960
- -----------------------------------------------------------------------------------------------------
Kohl's Corp.* 519,800 26,707,324
- -----------------------------------------------------------------------------------------------------
Lowe's Cos., Inc. 410,500 17,630,975
- -----------------------------------------------------------------------------------------------------
Sears, Roebuck & Co. 264,000 8,880,960
- -----------------------------------------------------------------------------------------------------
Target Corp. 791,400 29,946,576
- -----------------------------------------------------------------------------------------------------
Wal-Mart Stores, Inc. 3,497,800 187,726,926
- -----------------------------------------------------------------------------------------------------
$458,812,035
- -----------------------------------------------------------------------------------------------------
Special Products & Services - 1.4%
- -----------------------------------------------------------------------------------------------------
3M Co. 528,200 $68,127,236
- -----------------------------------------------------------------------------------------------------
Illinois Tool Works, Inc. 318,300 20,960,055
- -----------------------------------------------------------------------------------------------------
$89,087,291
- -----------------------------------------------------------------------------------------------------
Supermarkets - 0.9%
- -----------------------------------------------------------------------------------------------------
Kroger Co.* 3,451,505 $57,571,103
- -----------------------------------------------------------------------------------------------------
Telecommunications - 2.6%
- -----------------------------------------------------------------------------------------------------
BellSouth Corp. 2,189,300 $58,301,059
- -----------------------------------------------------------------------------------------------------
Cox Communications, Inc.* 534,800 17,060,120
- -----------------------------------------------------------------------------------------------------
EchoStar Communications Corp.* 453,940 15,715,403
- -----------------------------------------------------------------------------------------------------
Juniper Networks, Inc.* 482,000 5,962,340
- -----------------------------------------------------------------------------------------------------
Verizon Communications, Inc. 1,941,500 76,592,175
- -----------------------------------------------------------------------------------------------------
$173,631,097
- -----------------------------------------------------------------------------------------------------
Telecommunications & Cable - 0.4%
- -----------------------------------------------------------------------------------------------------
Comcast Corp., "A"* 896,390 $27,053,050
- -----------------------------------------------------------------------------------------------------
Telecommunications - Wireless - 0.3%
- -----------------------------------------------------------------------------------------------------
AT&T Wireless Services, Inc.* 1,758,700 $14,438,927
- -----------------------------------------------------------------------------------------------------
Sprint Corp. (PCS Group)* 1,184,400 6,810,300
- -----------------------------------------------------------------------------------------------------
$21,249,227
- -----------------------------------------------------------------------------------------------------
Telecommunications - Wireline - 1.7%
- -----------------------------------------------------------------------------------------------------
Cisco Systems, Inc.* 6,670,211 $111,325,822
- -----------------------------------------------------------------------------------------------------
Transportation - 2.5%
- -----------------------------------------------------------------------------------------------------
Fedex Corp. 1,049,300 $65,088,079
- -----------------------------------------------------------------------------------------------------
Union Pacific Corp. 691,600 40,126,632
- -----------------------------------------------------------------------------------------------------
United Parcel Service, Inc. 901,300 57,412,810
- -----------------------------------------------------------------------------------------------------
$162,627,521
- -----------------------------------------------------------------------------------------------------
Utilities - Electric - 1.4%
- -----------------------------------------------------------------------------------------------------
Dominion Resources, Inc. 285,800 $18,368,366
- -----------------------------------------------------------------------------------------------------
Exelon Corp. 782,000 46,771,420
- -----------------------------------------------------------------------------------------------------
PG&E Corp.* 877,100 18,550,665
- -----------------------------------------------------------------------------------------------------
Wisconsin Energy Corp. 301,500 8,743,500
- -----------------------------------------------------------------------------------------------------
$92,433,951
- -----------------------------------------------------------------------------------------------------
Total U.S. Stocks $6,026,571,701
- -----------------------------------------------------------------------------------------------------
Foreign Stocks - 8.1%
- -----------------------------------------------------------------------------------------------------
Bermuda - 1.1%
- -----------------------------------------------------------------------------------------------------
Accenture Ltd., "A" (Business Services)* 2,739,500 $49,557,555
- -----------------------------------------------------------------------------------------------------
Xl Capital Ltd. (Insurance) 321,300 26,667,900
- -----------------------------------------------------------------------------------------------------
$76,225,455
- -----------------------------------------------------------------------------------------------------
Canada - 1.6%
- -----------------------------------------------------------------------------------------------------
Canadian National Railway Co. (Railroads) 870,566 $42,013,515
- -----------------------------------------------------------------------------------------------------
Encana Corp. (Utilities - Gas) 1,688,800 64,673,566
- -----------------------------------------------------------------------------------------------------
$106,687,081
- -----------------------------------------------------------------------------------------------------
France - 0.7%
- -----------------------------------------------------------------------------------------------------
STMicroelectronics N.V. (Electronics) 1,005,800 $20,910,582
- -----------------------------------------------------------------------------------------------------
Total Fina S.A., ADR (Oils) 363,700 27,568,460
- -----------------------------------------------------------------------------------------------------
$48,479,042
- -----------------------------------------------------------------------------------------------------
Germany - 0.8%
- -----------------------------------------------------------------------------------------------------
Bayerische Motoren Werke AG (Automotive) 919,300 $35,423,741
- -----------------------------------------------------------------------------------------------------
Porsche AG (Automotive) 38,655 16,406,819
- -----------------------------------------------------------------------------------------------------
$51,830,560
- -----------------------------------------------------------------------------------------------------
Netherlands - 0.3%
- -----------------------------------------------------------------------------------------------------
Unilever N.V., NY Shares (Consumer Products) 313,600 $16,934,400
- -----------------------------------------------------------------------------------------------------
Switzerland - 1.7%
- -----------------------------------------------------------------------------------------------------
Nestle S.A. (Food & Beverage Products) 118,118 $24,425,852
- -----------------------------------------------------------------------------------------------------
Novartis AG (Medical & Health Products) 2,143,300 84,996,212
- -----------------------------------------------------------------------------------------------------
$109,422,064
- -----------------------------------------------------------------------------------------------------
United Kingdom - 1.9%
- -----------------------------------------------------------------------------------------------------
AstraZeneca Group PLC (Medical & Health Products) 176,500 $7,089,209
- -----------------------------------------------------------------------------------------------------
AstraZeneca Group PLC, ADR (Medical & Health Products) 849,700 34,642,269
- -----------------------------------------------------------------------------------------------------
BP Amoco PLC, ADR (Oils) 643,772 27,051,299
- -----------------------------------------------------------------------------------------------------
Reckitt Benckiser PLC (Consumer Goods & Services) 459,310 8,442,236
- -----------------------------------------------------------------------------------------------------
Reed Elsevier PLC (Publishing) 4,430,600 36,927,953
- -----------------------------------------------------------------------------------------------------
Vodafone Group PLC, ADR (Telecommunications) 591,433 11,621,658
- -----------------------------------------------------------------------------------------------------
$125,774,624
- -----------------------------------------------------------------------------------------------------
Total Foreign Stocks $535,353,226
- -----------------------------------------------------------------------------------------------------
Total Stocks (Identified Cost, $6,205,875,712) $6,561,924,927
- -----------------------------------------------------------------------------------------------------
Short-term Obligations - 0.1%
- -----------------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT
(000 Omitted)
- -----------------------------------------------------------------------------------------------------
American Express Credit Corp., due 7/01/03,
at Amortized Cost $4,729 $4,729,000
- -----------------------------------------------------------------------------------------------------
Collateral for Securities Loaned - 3.1%
- -----------------------------------------------------------------------------------------------------
SHARES
- -----------------------------------------------------------------------------------------------------
Navigator Securities Lending Prime Portfolio,
at Identified Cost 204,414,051 $204,414,051
- -----------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $6,415,018,763) $6,771,067,978
- -----------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - (2.5)% (162,729,573)
- -----------------------------------------------------------------------------------------------------
Net Assets - 100.0% $6,608,338,405
- -----------------------------------------------------------------------------------------------------
* Non-income producing security.
See notes to financial statements.
- ---------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS STATEMENT OF ASSETS AND LIABILITIES (unaudited)
- ---------------------------------------------------------------------------------------------------
This statement represents your fund's balance sheet, which details the assets and liabilities
composing the total value of your fund.
AT 6/30/03
ASSETS
Investments, at value, including $198,745,662 of
securities on loan (identified cost, $6,415,018,763) $6,771,067,978
- ---------------------------------------------------------------------------------------------------
Cash 426
- ---------------------------------------------------------------------------------------------------
Foreign currency, at value (identified cost, $33,573) 33,428
- ---------------------------------------------------------------------------------------------------
Receivable for investments sold 93,664,283
- ---------------------------------------------------------------------------------------------------
Receivable for trust shares sold 39,328,753
- ---------------------------------------------------------------------------------------------------
Interest and dividends receivable 6,905,830
- ---------------------------------------------------------------------------------------------------
Other assets 105,968
- ---------------------------------------------------------------------------------------------------
Total assets $6,911,106,666
- ---------------------------------------------------------------------------------------------------
LIABILITIES
Payable for investments purchased $76,477,842
- ---------------------------------------------------------------------------------------------------
Payable for trust shares reacquired 19,645,862
- ---------------------------------------------------------------------------------------------------
Collateral for securities loaned, at value 204,414,051
- ---------------------------------------------------------------------------------------------------
Payable to affiliates
- ---------------------------------------------------------------------------------------------------
Management fee 181,052
- ---------------------------------------------------------------------------------------------------
Shareholder servicing agent fee 60,683
- ---------------------------------------------------------------------------------------------------
Distribution and service fee 344,982
- ---------------------------------------------------------------------------------------------------
Administrative fee 5,638
- ---------------------------------------------------------------------------------------------------
Program manager fee 13
- ---------------------------------------------------------------------------------------------------
Accrued expenses and other liabilities 1,638,138
- ---------------------------------------------------------------------------------------------------
Total liabilities $302,768,261
- ---------------------------------------------------------------------------------------------------
Net assets $6,608,338,405
- ---------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF
Paid-in capital $8,094,580,634
- ---------------------------------------------------------------------------------------------------
Unrealized appreciation on investments and
translation of assets and liabilities in foreign
currencies 356,061,076
- ---------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and
foreign currency transactions (1,856,716,202)
- ---------------------------------------------------------------------------------------------------
Accumulated undistributed net investment income 14,412,897
- ---------------------------------------------------------------------------------------------------
Total $6,608,338,405
- ---------------------------------------------------------------------------------------------------
Shares of beneficial interest outstanding 478,332,503
- ---------------------------------------------------------------------------------------------------
See notes to financial statements.
Statement of Assets and Liabilities (unaudited) - continued
Class A shares
Net assets $3,620,746,005
- ---------------------------------------------------------------------------------------------------
Shares outstanding 259,085,567
- ---------------------------------------------------------------------------------------------------
Net asset value per share $13.98
- ---------------------------------------------------------------------------------------------------
Offering price per share (100/94.25X$13.98) $14.83
- ---------------------------------------------------------------------------------------------------
Class B shares
Net assets $2,356,766,515
- ---------------------------------------------------------------------------------------------------
Shares outstanding 172,909,118
- ---------------------------------------------------------------------------------------------------
Net asset value and offering price per share $13.63
- ---------------------------------------------------------------------------------------------------
Class C shares
Net assets $529,226,245
- ---------------------------------------------------------------------------------------------------
Shares outstanding 39,011,526
- ---------------------------------------------------------------------------------------------------
Net asset value and offering price per share $13.57
- ---------------------------------------------------------------------------------------------------
Class I shares
Net assets $98,780,228
- ---------------------------------------------------------------------------------------------------
Shares outstanding 7,120,828
- ---------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption
price per share $13.87
- ---------------------------------------------------------------------------------------------------
Class J shares
Net assets $1,385,785
- ---------------------------------------------------------------------------------------------------
Shares outstanding 101,711
- ---------------------------------------------------------------------------------------------------
Net asset value per share $13.62
- ---------------------------------------------------------------------------------------------------
Offering price per share (100/98X$13.62) $13.90
- ---------------------------------------------------------------------------------------------------
Class R shares
Net assets $770,603
- ---------------------------------------------------------------------------------------------------
Shares outstanding 55,386
- ---------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption
price per share $13.91
- ---------------------------------------------------------------------------------------------------
See notes to financial statements.
Statement of Assets and Liabilities (unaudited) - continued
Class 529A shares
Net assets $457,347
- ---------------------------------------------------------------------------------------------------
Shares outstanding 33,034
- ---------------------------------------------------------------------------------------------------
Net asset value and redemption price per share $13.84
- ---------------------------------------------------------------------------------------------------
Offering price per share (100/94.25X$13.84) $14.68
- ---------------------------------------------------------------------------------------------------
Class 529B shares
Net assets $61,267
- ---------------------------------------------------------------------------------------------------
Shares outstanding 4,545
- ---------------------------------------------------------------------------------------------------
Net asset value and offering price per share $13.48
- ---------------------------------------------------------------------------------------------------
Class 529C shares
Net assets $144,410
- ---------------------------------------------------------------------------------------------------
Shares outstanding 10,788
- ---------------------------------------------------------------------------------------------------
Net asset value and offering price per share $13.39
- ---------------------------------------------------------------------------------------------------
On sales of $50,000 or more, the offering price of Class A and Class 529A shares is reduced.
A contingent deferred sales charge may be imposed on redemptions of Class A, Class B, Class C,
Class 529B, and Class 529C shares.
See notes to financial statements.
- ---------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS STATEMENT OF OPERATIONS (unaudited)
- ---------------------------------------------------------------------------------------------------
This statement describes how much your fund received in investment income and paid in expenses. It
also describes any gains and/or losses generated by fund operations.
FOR SIX MONTHS ENDED 6/30/03
NET INVESTMENT INCOME
Income
- ---------------------------------------------------------------------------------------------------
Dividends $53,124,124
- ---------------------------------------------------------------------------------------------------
Interest 1,256,851
- ---------------------------------------------------------------------------------------------------
Foreign taxes withheld (767,484)
- ---------------------------------------------------------------------------------------------------
Total investment income $53,613,491
- ---------------------------------------------------------------------------------------------------
Expenses
- ---------------------------------------------------------------------------------------------------
Management fee $10,600,014
- ---------------------------------------------------------------------------------------------------
Trustees' compensation 65,874
- ---------------------------------------------------------------------------------------------------
Shareholder servicing agent fee 3,380,065
- ---------------------------------------------------------------------------------------------------
Distribution and service fee (Class A) 6,192,633
- ---------------------------------------------------------------------------------------------------
Distribution and service fee (Class B) 11,399,017
- ---------------------------------------------------------------------------------------------------
Distribution and service fee (Class C) 2,576,676
- ---------------------------------------------------------------------------------------------------
Distribution and service fee (Class J) 6,441
- ---------------------------------------------------------------------------------------------------
Distribution and service fee (Class R) 770
- ---------------------------------------------------------------------------------------------------
Distribution and service fee (Class 529A) 480
- ---------------------------------------------------------------------------------------------------
Distribution and service fee (Class 529B) 241
- ---------------------------------------------------------------------------------------------------
Distribution and service fee (Class 529C) 589
- ---------------------------------------------------------------------------------------------------
Program manager fee (Class 529A) 343
- ---------------------------------------------------------------------------------------------------
Program manager fee (Class 529B) 60
- ---------------------------------------------------------------------------------------------------
Program manager fee (Class 529C) 147
- ---------------------------------------------------------------------------------------------------
Administrative fee 339,645
- ---------------------------------------------------------------------------------------------------
Custodian fee 786,311
- ---------------------------------------------------------------------------------------------------
Printing 166,996
- ---------------------------------------------------------------------------------------------------
Postage 321,188
- ---------------------------------------------------------------------------------------------------
Auditing fees 18,596
- ---------------------------------------------------------------------------------------------------
Legal fees 13,363
- ---------------------------------------------------------------------------------------------------
Miscellaneous 3,750,630
- ---------------------------------------------------------------------------------------------------
Total expenses $39,620,079
- ---------------------------------------------------------------------------------------------------
Fees paid indirectly (310,922)
- ---------------------------------------------------------------------------------------------------
Net expenses $39,309,157
- ---------------------------------------------------------------------------------------------------
Net investment income $14,304,334
- ---------------------------------------------------------------------------------------------------
See notes to financial statements.
Statement of Operations (unaudited) - continued
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Realized gain (loss) (identified cost basis)
- ---------------------------------------------------------------------------------------------------
Investment transactions $200,388,212
- ---------------------------------------------------------------------------------------------------
Foreign currency transactions (1,144,218)
- ---------------------------------------------------------------------------------------------------
Net realized gain on investments and foreign currency
transactions $199,243,994
- ---------------------------------------------------------------------------------------------------
Change in unrealized appreciation
- ---------------------------------------------------------------------------------------------------
Investments $340,580,800
- ---------------------------------------------------------------------------------------------------
Translation of assets and liabilities in foreign
currencies 301,717
- ---------------------------------------------------------------------------------------------------
Net unrealized gain on investments and foreign currency
translation $340,882,517
- ---------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments and
foreign currency $540,126,511
- ---------------------------------------------------------------------------------------------------
Increase in net assets from operations $554,430,845
- ---------------------------------------------------------------------------------------------------
See notes to financial statements.
- ---------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS STATEMENT OF CHANGES IN NET ASSETS
- ---------------------------------------------------------------------------------------------------
This statement describes the increases and/or decreases in net assets resulting from operations,
any distributions, and any shareholder transactions.
SIX MONTHS YEAR
ENDED ENDED
6/30/03 12/31/02
(UNAUDITED)
OPERATIONS
Net investment income $14,304,334 $24,760,848
- -------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments and foreign
currency transactions 199,243,994 (731,195,792)
- -------------------------------------------------------------------------------------------------------
Net unrealized gain (loss) on investments and foreign
currency translation 340,882,517 (1,434,597,087)
- -------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations $554,430,845 $(2,141,032,031)
- -------------------------------------------------------- -------------- ---------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income
- -------------------------------------------------------------------------------------------------------
Class A $(5,672,732) $(19,961,344)
- -------------------------------------------------------------------------------------------------------
Class B -- --
- -------------------------------------------------------------------------------------------------------
Class C -- --
- -------------------------------------------------------------------------------------------------------
Class I (582,885) (746,306)
- -------------------------------------------------------------------------------------------------------
Class J -- --
- -------------------------------------------------------------------------------------------------------
Class R (590) --
- -------------------------------------------------------------------------------------------------------
Class 529A (1,666) (417)
- -------------------------------------------------------------------------------------------------------
Class 529B (184) (171)
- -------------------------------------------------------------------------------------------------------
Class 529C (716) (53)
- -------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(6,258,773) $(20,708,291)
- -------------------------------------------------------- -------------- ---------------
Net decrease in net assets from trust share transactions $(571,612,169) $(1,680,220,960)
- -------------------------------------------------------- -------------- ---------------
Total decrease in net assets $(23,440,097) $(3,841,961,282)
- -------------------------------------------------------- -------------- ---------------
NET ASSETS
At beginning of period $6,631,778,502 $10,473,739,784
- -------------------------------------------------------------------------------------------------------
At end of period (including accumulated undistributed net
investment income of $14,412,897 and $6,367,336,
respectively) $6,608,338,405 $6,631,778,502
- -------------------------------------------------------------------------------------------------------
See notes to financial statements.
- -----------------------------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS
- -----------------------------------------------------------------------------------------------------------------------------
The financial highlights table is intended to help you understand the trust's financial performance for the semiannual period
and the past 5 fiscal years (or, if shorter, the period of the trust's operation). Certain information reflects financial
results for a single trust share. The total returns in the table represent the rate by which an investor would have earned
(or lost) on an investment in the trust (assuming reinvestment of all distributions).
SIX MONTHS YEAR ENDED 12/31
ENDED ---------------------------------------------------------------------
6/30/03 2002 2001 2000 1999 1998
CLASS A (UNAUDITED)
Net asset value, beginning of period $12.87 $16.58 $20.02 $20.95 $20.25 $17.52
- -----------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#
Net investment income $0.05 $0.09 $0.08 $0.08 $0.11 $0.17
- -----------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments and
foreign currency 1.08 (3.73) (3.33) (0.16) 1.27 3.77
- ----------------------------------- ------ ------ ------ ------ ------ ------
Total from investment
operations $1.13 $(3.64) $(3.25) $(0.08) $1.38 $3.94
- ----------------------------------- ------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
From net investment income $(0.02) $(0.07) $(0.05) $(0.03) $(0.09) $(0.16)
- ------------------------------------------------------------------------------------------------------------------------------
From net realized gain on
investments and foreign
currency transactions -- -- -- (0.81) (0.58) (1.05)
- ------------------------------------------------------------------------------------------------------------------------------
In excess of net investment
income -- -- -- (0.00)+++ (0.01) (0.00)+++
- -----------------------------------------------------------------------------------------------------------------------------
In excess of net realized gain
on investments and foreign
currency transactions -- -- (0.14) (0.01) -- --
- ----------------------------------- ------ ------ ------ ------ ------ ------
Total distributions declared to
shareholders $(0.02) $(0.07) $(0.19) $(0.85) $(0.68) $(1.21)
- ----------------------------------- ------ ------ ------ ------ ------ ------
Net asset value, end
of period $13.98 $12.87 $16.58 $20.02 $20.95 $20.25
- ----------------------------------- ------ ------ ------ ------ ------ ------
Total return (%)(+)QQ 8.73++ (22.00) (16.24) (0.34) 6.96 22.95
- -----------------------------------------------------------------------------------------------------------------------------
Financial Highlights - continued
SIX MONTHS YEAR ENDED 12/31
ENDED -------------------------------------------------------------------
6/30/03 2002 2001 2000 1999 1998
CLASS A (CONTINUED) (UNAUDITED)
RATIOS (%) TO AVERAGE NET ASSETS
AND SUPPLEMENTAL DATA:
Expenses## 0.96+ 0.92 0.91 0.87 0.88 0.73
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income 0.72+ 0.58 0.47 0.38 0.55 0.86
- -----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 37 55 77 68 62 54
- -----------------------------------------------------------------------------------------------------------------------------
Net assets at end of period
(000,000 Omitted) $3,621 $3,589 $5,630 $7,638 $8,514 $7,188
- -----------------------------------------------------------------------------------------------------------------------------
+ Annualized.
++ Not annualized.
+++ Per share amount was less than $0.01.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
(+) Total returns for Class A shares do not include the applicable sales charge. If the charge had been included, the results
would have been lower.
QQ The trust's total return calculation includes payments received from a non-recurring litigation settlement recorded as
realized gains in the Statement of Operations. Excluding this payment from the trust's ending net asset value per share
the total return for the six months ended June 30, 2003, would have been 8.69%.
See notes to financial statements.
Financial Highlights - continued
SIX MONTHS YEAR ENDED 12/31
ENDED --------------------------------------------------------------
6/30/03 2002 2001 2000 1999 1998
CLASS B (UNAUDITED)
Net asset value, beginning of period $12.57 $16.22 $19.66 $20.69 $20.04 $17.36
- ----------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#
Net investment income (loss) $0.00++++ $(0.01) $(0.03) $(0.06) $(0.02) $0.04
- ----------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) on investments and foreign
currency 1.06 (3.64) (3.27) (0.15) 1.26 3.74
- ----------------------------------- ------ ------ ------ ------ ------ ------
Total from investment operations $1.06 $(3.65) $(3.30) $(0.21) $1.24 $3.78
- ----------------------------------- ------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
From net investment income $-- $-- $-- $-- $(0.01) $(0.05)
- ----------------------------------------------------------------------------------------------------------------------------
From net realized gain on
investments and foreign currency
transactions -- -- -- (0.81) (0.58) (1.05)
- ----------------------------------------------------------------------------------------------------------------------------
In excess of net investment income -- -- -- -- -- (0.00)+++
- ----------------------------------------------------------------------------------------------------------------------------
In excess of net realized gain on
investments and foreign currency
transactions -- -- (0.14) (0.01) -- --
- ----------------------------------- ------ ------ ------ ------ ------ ------
Total distributions declared to
shareholders $-- $-- $(0.14) $(0.82) $(0.59) $(1.10)
- ----------------------------------- ------ ------ ------ ------ ------ ------
Net asset value, end
of period $13.63 $12.57 $16.22 $19.66 $20.69 $20.04
- ----------------------------------- ------ ------ ------ ------ ------ ------
Total return (%)QQ 8.43++ (22.50) (16.80) (1.01) 6.28 22.16
- ----------------------------------------------------------------------------------------------------------------------------
Financial Highlights - continued
SIX MONTHS YEAR ENDED 12/31
ENDED --------------------------------------------------------------
6/30/03 2002 2001 2000 1999 1998
CLASS B (CONTINUED) (UNAUDITED)
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA:
Expenses## 1.61+ 1.57 1.56 1.52 1.53 1.39
- ----------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) 0.07+ (0.06) (0.18) (0.27) (0.10) 0.20
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 37 55 77 68 62 54
- ----------------------------------------------------------------------------------------------------------------------------
Net assets at end of period
(000,000 Omitted) $2,357 $2,391 $3,839 $5,022 $5,472 $3,862
- ----------------------------------------------------------------------------------------------------------------------------
+ Annualized.
++ Not annualized.
+++ Per share amount was less than $(0.01).
++++ Per share amount was less than $0.01.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
QQ The trust's total return calculation includes payments received from a non-recurring litigation settlement recorded as
realized gains in the Statement of Operations. Excluding this payment from the trust's ending net asset value per share
the total return for the six months ended June 30, 2003, would have been 8.39%.
See notes to financial statements.
Financial Highlights - continued
SIX MONTHS YEAR ENDED 12/31
ENDED -----------------------------------------------------------------------
6/30/03 2002 2001 2000 1999 1998
CLASS C (UNAUDITED)
Net asset value, beginning
of period $12.51 $16.14 $19.57 $20.59 $19.95 $17.30
- -----------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#
Net investment income (loss) $0.00++++ $(0.01) $(0.03) $(0.06) $(0.02) $0.04
- -----------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments
and foreign currency 1.06 (3.62) (3.26) (0.14) 1.25 3.72
- -------------------------------- ------ ------ ------ ------ ----- ------
Total from investment operations $1.06 $(3.63) $(3.29) $(0.20) $1.23 $3.76
- -------------------------------- ------ ------ ------ ------ ----- ------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
From net investment income $-- $-- $-- $-- $(0.01) $(0.06)
- -----------------------------------------------------------------------------------------------------------------------------
From net realized gain on
investments and foreign
currency transactions -- -- -- (0.81) (0.58) (1.05)
- -----------------------------------------------------------------------------------------------------------------------------
In excess of net investment
income -- -- -- -- -- (0.00)+++
- -----------------------------------------------------------------------------------------------------------------------------
In excess of net realized
gain on investments and
foreign currency transactions -- -- (0.14) (0.01) -- --
- -------------------------------- ------ ------ ------ ------ ----- ------
Total distributions
declared to shareholders $-- $-- $(0.14) $(0.82) $(0.59) $(1.11)
- -------------------------------- ------ ------ ------ ------ ----- ------
Net asset value, end of period $13.57 $12.51 $16.14 $19.57 $20.59 $19.95
- -------------------------------- ------ ------ ------ ------ ----- ------
Total return (%)QQ 8.39++ (22.49) (16.82) (0.96) 6.27 22.11
- -----------------------------------------------------------------------------------------------------------------------------
Financial Highlights - continued
SIX MONTHS YEAR ENDED 12/31
ENDED ---------------------------------------------------------------------
6/30/03 2002 2001 2000 1999 1998
CLASS C (CONTINUED) (UNAUDITED)
RATIOS (%) TO AVERAGE NET
ASSETS AND SUPPLEMENTAL DATA:
Expenses## 1.61+ 1.57 1.56 1.52 1.53 1.40
- ----------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) 0.07+ (0.06) (0.18) (0.27) (0.10) 0.20
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 37 55 77 68 62 54
- ----------------------------------------------------------------------------------------------------------------------------
Net assets at end of period
(000,000 Omitted) $529 $546 $931 $1,269 $1,356 $824
- ----------------------------------------------------------------------------------------------------------------------------
+ Annualized.
++ Not annualized.
+++ Per share amount was less than $(0.01).
++++ Per share amount was less than $0.01.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
QQ The trust's total return calculation includes payments received from a non-recurring litigation settlement recorded as
realized gains in the Statement of Operations. Excluding this payment from the trust's ending net asset value per share
the total return for the six months ended June 30, 2003, would have been 8.35%.
See notes to financial statements.
Financial Highlights - continued
SIX MONTHS YEAR ENDED 12/31
ENDED -------------------------------------------------------------------
6/30/03 2002 2001 2000 1999 1998
CLASS I (UNAUDITED)
Net asset value, beginning of period $12.82 $16.58 $20.03 $20.97 $20.26 $17.52
- ----------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#
Net investment income $0.07 $0.13 $0.14 $0.15 $0.18 $0.24
- ----------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments
and foreign currency 1.06 (3.70) (3.33) (0.16) 1.28 3.77
- -------------------------------- ------ ------ ------ ------ ----- ------
Total from investment operations $1.13 $(3.57) $(3.19) $(0.01) $1.46 $4.01
- -------------------------------- ------ ------ ------ ------ ----- ------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
From net investment income $(0.08) $(0.19) $(0.12) $(0.11) $(0.16) $(0.22)
- -----------------------------------------------------------------------------------------------------------------------------
From net realized gain on
investments and foreign
currency transactions -- -- -- (0.81) (0.58) (1.05)
- -----------------------------------------------------------------------------------------------------------------------------
In excess of net investment
income -- -- -- (0.00)+++ (0.01) (0.00)+++
- -----------------------------------------------------------------------------------------------------------------------------
In excess of net realized
gain on investments and
foreign currency transactions -- -- (0.14) (0.01) -- --
- -------------------------------- ------ ------ ------ ------ ----- ------
Total distributions declared
to shareholders $(0.08) $(0.19) $(0.26) $(0.93) $(0.75) $(1.27)
- -------------------------------- ------ ------ ------ ------ ----- ------
Net asset value, end of period $13.87 $12.82 $16.58 $20.03 $20.97 $20.26
- -------------------------------- ------ ------ ------ ------ ----- ------
Total return (%)QQ 8.88++ (21.66) (15.99) 0.01 7.38 23.40
- -----------------------------------------------------------------------------------------------------------------------------
Financial Highlights - continued
SIX MONTHS YEAR ENDED 12/31
ENDED -------------------------------------------------------------------------
6/30/03 2002 2001 2000 1999 1998
CLASS I (CONTINUED) (UNAUDITED)
RATIOS (%) TO AVERAGE NET
ASSETS AND SUPPLEMENTAL DATA:
Expenses## 0.61+ 0.57 0.56 0.52 0.52 0.41
- ----------------------------------------------------------------------------------------------------------------------------
Net investment income 1.07+ 0.93 0.78 0.73 0.90 1.19
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 37 55 77 68 62 54
- ----------------------------------------------------------------------------------------------------------------------------
Net assets at end of period
(000,000 Omitted) $99 $104 $72 $199 $233 $230
- ----------------------------------------------------------------------------------------------------------------------------
+ Annualized.
++ Not annualized.
+++ Per share amount was less than $0.01.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
QQ The trust's total return calculation includes payments received from a non-recurring litigation settlement recorded as
realized gains in the Statement of Operations. Excluding this payment from the trust's ending net asset value per share
the total return for the six months ended June 30, 2003, would have been 8.84%.
See notes to financial statements.
Financial Highlights - continued
SIX MONTHS YEAR ENDED 12/31
ENDED ------------------------------ PERIOD ENDED
6/30/03 2002 2001 12/31/00*
CLASS J (UNAUDITED)
Net asset value, beginning of period $12.57 $16.21 $19.65 $19.97
- ---------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS#
Net investment income (loss) $0.00++++ $(0.01) $(0.03) $(0.05)
- ---------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on
investments and foreign currency 1.05 (3.63) (3.27) 0.56**
- ------------------------------------------------------------ --- --- ---
Total from investment operations $1.05 $(3.64) $(3.30) $0.51
- ------------------------------------------------------------ --- --- ---
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
From net investment income $-- $-- $-- $(0.01)
- ---------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments and
foreign currency transactions -- -- -- (0.81)
- ---------------------------------------------------------------------------------------------------------------------------
In excess of net realized gain on investments
and foreign currency transactions -- -- -- (0.00)+
- ---------------------------------------------------------------------------------------------------------------------------
In excess of net realized gain on investments
and foreign currency transactions -- -- (0.14) (0.01)
- ------------------------------------------------------------ --- --- ---
Total distributions declared to shareholders $-- $-- $(0.14) $(0.83)
- ------------------------------------------------------------ --- --- ---
Net asset value, end of period $13.62 $12.57 $16.21 $19.65
- ------------------------------------------------------------ --- --- ---
Total return (%)(+)QQ 8.35++ (22.46) (16.80) 0.50++
- ---------------------------------------------------------------------------------------------------------------------------
Financial Highlights - continued
SIX MONTHS YEAR ENDED 12/31
ENDED ------------------------------ PERIOD ENDED
6/30/03 2002 2001 12/31/00*
CLASS J (continued) (UNAUDITED)
RATIOS (%) TO AVERAGE NET ASSETS AND
SUPPLEMENTAL DATA:
Expenses## 1.61+ 1.57 1.56 1.52+
- ---------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) 0.07+ (0.05) (0.18) (0.26)+
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 37 55 77 68
- ---------------------------------------------------------------------------------------------------------------------------
Net assets at end of period
(000,000 Omitted) $1 $1 $2 $2
- ---------------------------------------------------------------------------------------------------------------------------
* For the period from the inception of Class J shares, February 10, 2000, through December 31, 2000. For performance
calculation purposes the Class J inception date was changed from December 31, 1999 to February 10, 2000, to reflect the
date of the initial sale of Class J shares. As a result, the total return and beginning net asset value have been restated.
** 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 trust shares and the amount of per share realized and unrealized gains and losses at such time.
+ Annualized.
++ Not annualized.
+++ Per share amount was less than $(0.01).
++++ Per share amount was less than $0.01.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
(+) Total returns for Class J shares do not include the applicable sales charge. If the charge had been included, the results
would have been lower.
QQ The trust's total return calculation includes payments received from a non-recurring litigation settlement recorded as
realized gains in the Statement of Operations. Excluding this payment from the trust's ending net asset value per share
the total return for the six months ended June 30, 2003, would have been 8.31%.
See notes to financial statements.
Financial Highlights - continued
SIX MONTHS
ENDED
6/30/03
(UNAUDITED)
CLASS R*
Net asset value, beginning of period $12.87
- ----------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#
Net investment income $0.04
- ----------------------------------------------------------------------------
Net realized and unrealized gain on investments and
foreign currency 1.08
- ---------------------------------------------------------------------------
Total from investment operations $1.12
- ---------------------------------------------------------------------------
Less distributions declared to shareholders from net
investment income $(0.08)
- ---------------------------------------------------------------------------
Net asset value, end of period $13.91
- ---------------------------------------------------------------------------
Total return (%)QQ 8.77++
- ---------------------------------------------------------------------------
RATIOS (%) TO AVERAGE
NET ASSETS AND
SUPPLEMENTAL DATA:
Expenses## 1.11+
- ----------------------------------------------------------------------------
Net investment income 0.62+
- ----------------------------------------------------------------------------
Portfolio turnover (%) 37
- ----------------------------------------------------------------------------
Net assets at end of period (000 Omitted) $771
- ----------------------------------------------------------------------------
* The inception date of Class R shares was December 31, 2002. There was no
operating activity associated with Class R shares for the period ended
December 31, 2002.
+ Annualized.
++ Not annualized.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
QQ The trust's total return calculation includes payments received from a
non-recurring litigation settlement recorded as realized gains in the
Statement of Operations. Excluding this payment from the trust's ending net
asset value per share the total return for the six months ended June 30,
2003, would have been 8.73%.
See notes to financial statements.
Financial Highlights - continued
SIX MONTHS PERIOD SIX MONTHS PERIOD SIX MONTHS PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
6/30/03 12/31/02* 6/30/03 12/31/02* 6/30/03 12/31/02*
(UNAUDITED) (UNAUDITED) (UNAUDITED)
- --------------------------------------------------------------------------------------------------------------------------------
CLASS 529A CLASS 529B CLASS 529C
Net asset value,
beginning of period $12.82 $13.38 $12.50 $13.05 $12.44 $12.99
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS#
Net investment income (loss) $0.03 $0.03 $(0.01) $(0.00)+++ $(0.01) $0.01
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and
unrealized gain (loss) on
investments and foreign
currency 1.07 (0.50) 1.04 (0.48) 1.04 (0.49)
- ------------------------------ ----- ------ ------ ------ ------ ------
Total from investment
operations $1.10 $(0.47) $1.03 $(0.48) $1.03 $(0.48)
- ------------------------------ ----- ------ ------ ------ ------ ------
Less distributions
declared to shareholders
from net investment income $(0.08) $(0.09) $(0.05) $(0.07) $(0.08) $(0.07)
- ------------------------------ ----- ------ ------ ------ ------ ------
Net asset value, end of
period $13.84 $12.82 $13.48 $12.50 $13.39 $12.44
- ------------------------------ ----- ------ ------ ------ ------ ------
Total return (%)(+)QQ 8.61++ (3.55)++ 8.30++ (3.72)++ 8.32++ (3.75)++
- --------------------------------------------------------------------------------------------------------------------------------
Financial Highlights - continued
SIX MONTHS PERIOD SIX MONTHS PERIOD SIX MONTHS PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
6/30/03 12/31/02* 6/30/03 12/31/02* 6/30/03 12/31/02*
(UNAUDITED) (UNAUDITED) (UNAUDITED)
- --------------------------------------------------------------------------------------------------------------------------------
CLASS 529A CLASS 529B CLASS 529C
RATIOS (%) TO AVERAGE
NET ASSETS AND
SUPPLEMENTAL DATA:
Expenses## 1.21+ 1.17+ 1.86+ 1.82+ 1.86+ 1.82+
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income
(loss) 0.53+ 0.68+ (0.15)+ (0.01)+ (0.16)+ 0.36+
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 37 55 37 55 37 55
- --------------------------------------------------------------------------------------------------------------------------------
Net assets at end of
period
(000 Omitted) $457 $131 $61 $37 $144 $90
- --------------------------------------------------------------------------------------------------------------------------------
* For the period from the inception of Class 529 shares, July 31, 2002, through December 31, 2002.
+ Annualized.
++ Not annualized.
+++ Per share amount was less than $(0.01).
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
(+) Total returns for Class 529A shares do not include the applicable sales charge. If the charge had been included, the results
would have been lower.
QQ The trust's total return calculation includes payments received from a non-recurring litigation settlement recorded as
realized gain in the Statement of Operations. Excluding this payment from the trust's ending net asset value per share, the
total returns for the six months ended June 30, 2003, would have been 8.57%, 8.25%, and 8.27% for Class 529A, Class 529B, and
Class 529C, respectively.
See notes to financial statements.
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
- ------------------------------------------------------------------------------
(1) BUSINESS AND ORGANIZATION
Massachusetts Investors Trust (the trust) was organized as a common law trust
under the laws of the commonwealth of Massachusetts in 1924 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
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates. The trust can invest in foreign securities.
Investments in foreign securities are vulnerable to the effects of changes in
the relative values of the local currency and the U.S. dollar and to the
effects of changes in each country's legal, political, and economic
environment.
INVESTMENT VALUATIONS - Equity securities in the trust's portfolio for which
market quotations are available are valued at the last sale or official
closing price on the primary market or exchange on which they are primarily
traded or at the last quoted bid price for securities in which there were no
sales during the day. If no sales are reported, as is the case for most
securities traded over the counter, securities are valued on the basis of
quotations obtained from brokers and dealers or on the basis of valuations
furnished by a pricing service. Bonds and other fixed income securities (other
than short-term obligations) of U.S. issuers in the trust's portfolio are
valued at an evaluated bid price on the basis of quotes from brokers and
dealers or on the basis of valuations furnished by a pricing service. Prices
obtained from pricing services utilize both dealer-supplied valuations and
electronic data processing techniques which take into account appropriate
factors such as institutional-size trading in similar groups of securities,
yield, quality, coupon rate, maturity, type of issue, trading characteristics
and other market data without exclusive reliance upon quoted prices or
exchange or over-the-counter prices, since such valuations are believed to
reflect more accurately the fair value of such securities. Short-term
obligations in the trust's portfolio are valued at amortized cost, which
constitutes fair value as determined by the Board of Trustees. Short-term
obligations with a remaining maturity in excess of 60 days will be valued upon
dealer-supplied valuations. Portfolio investments for which market quotations
are not readily available, or whose values have been materially affected by
events occurring after the close of their primary markets, are valued at fair
value as determined in good faith by or at the direction of the Board of
Trustees.
FOREIGN CURRENCY TRANSLATION - Investment valuations, other assets, and
liabilities initially expressed in foreign currencies are converted each
business day into U.S. dollars based upon current exchange rates. Purchases
and sales of foreign investments, income, and expenses are converted into U.S.
dollars based upon currency exchange rates prevailing on the respective dates
of such transactions. Gains and losses attributable to foreign currency
exchange rates on sales of securities are recorded for financial statement
purposes as net realized gains and losses on investments. Gains and losses
attributable to foreign exchange rate movements on income and expenses are
recorded for financial statement purposes as foreign currency transaction
gains and losses. That portion of both realized and unrealized gains and
losses on investments that results from fluctuations in foreign currency
exchange rates is not separately disclosed.
DEFERRED TRUSTEE COMPENSATION - Under a Deferred Compensation Plan (the Plan)
independent Trustees may elect to defer receipt of all or a portion of their
annual compensation. Deferred amounts are treated as though equivalent dollar
amounts had been invested in shares of the trust or other MFS trust selected
by the Trustee. Deferred amounts represent an unsecured obligation of the
trust until distributed in accordance with the Plan.
SECURITY LOANS - State Street Bank and Trust Company ("State Street"), as
lending agent, may loan the securities of the trust to certain qualified
institutions (the "Borrowers") approved by the trust. The loans are
collateralized at all times by cash and/or U.S. Treasury securities in an
amount at least equal to the market value of the securities loaned. State
Street provides the trust with indemnification against Borrower default. The
trust bears the risk of loss with respect to the investment of cash
collateral.
Cash collateral is invested in short-term securities. A portion of the income
generated upon investment of the collateral is remitted to the Borrowers, and
the remainder is allocated between the trust and the lending agent. On loans
collateralized by U.S. Treasury securities, a fee is received from the
Borrower, and is allocated between the trust and the lending agent. Income
from securities lending is included in interest income on the Statement of
Operations. The dividend and interest income earned on the securities loaned
is accounted for in the same manner as other dividend and interest income.
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 generally accepted accounting principles. All discount is
accreted for tax reporting purposes as required by federal income tax
regulations. Dividends received in cash are recorded on the ex-dividend date.
Dividend and interest payments received in additional securities are recorded
on the ex-dividend or ex-interest date in an amount equal to the value of the
security on such date.
FEES PAID INDIRECTLY - The trust's custody fee is reduced according to an
arrangement that measures the value of cash deposited with the custodian by the
trust. During the period, the trust's custodian fees were reduced by $9,403
under this arrangement. The trust has entered into a directed brokerage
agreement, under which the broker will credit the trust a portion of the
commissions generated, to offset certain expenses of the trust. For the period,
the trust's other expenses were reduced by $301,519 under this agreement. These
amounts are shown as a reduction of total expenses on the Statement of
Operations.
TAX MATTERS AND DISTRIBUTIONS - The trust's policy is to comply with the
provisions of the Internal Revenue Code (the Code) applicable to regulated
investment companies and to distribute to shareholders all of its net taxable
income, including any net realized gain on investments. Accordingly, no
provision for federal income or excise tax is provided.
Distributions to shareholders are recorded on the ex-dividend date. The trust
distinguishes between distributions on a tax basis and a financial reporting
basis and only distributions in excess of tax basis earnings and profits are
reported in the financial statements as distributions from paid-in capital.
Differences in the recognition or classification of income between the
financial statements and tax earnings and profits, which result in temporary
over-distributions for financial statement purposes, are classified as
distributions in excess of net investment income or net realized gains. Common
types of book and tax differences that could occur include differences in
accounting for currency transactions, real estate investment trusts and
capital losses.
The tax character of distributions declared for the years ended
December 31, 2002 and December 31, 2001 was as follows:
12/31/02 12/31/01
Distributions declared from:
- ---------------------------------------------------------------------------
Ordinary income $20,708,291 $17,751,765
- ---------------------------------------------------------------------------
Long-term capital gain -- 100,226,590
- ---------------------------------------------------------------------------
Total distributions declared $20,708,291 $117,978,355
- ---------------------------------------------------------------------------
As of December 31, 2002, the components of distributable earnings (accumulated
losses) on a tax basis were as follows:
Undistributed ordinary income $6,256,740
- ---------------------------------------------------------------------------
Undistributed long-term capital gain --
- ---------------------------------------------------------------------------
Capital loss carryforward (1,842,020,871)
- ---------------------------------------------------------------------------
Unrealized depreciation (198,110,175)
- ---------------------------------------------------------------------------
Other temporary differences (539,995)
- ---------------------------------------------------------------------------
For federal income tax purposes, the capital loss carryforward may be applied
against any net taxable realized gains of each succeeding year until the
earlier of its utilization or expiration.
EXPIRATION DATE CARRYFORWARD
December 31, 2009 $(1,044,955,905)
------------------------------------------------------
December 31, 2010 (797,064,966)
------------------------------------------------------
Total $(1,842,020,871)
------------------------------------------------------
MULTIPLE CLASSES OF SHARES OF BENEFICIAL INTEREST - The trust offers multiple
classes of shares, which differ in their respective distribution and service
fees. All shareholders bear the common expenses of the trust based on daily
net assets of each class, without distinction between share classes. 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 529B shares will convert to Class A and Class 529A shares, respectively,
approximately eight years after purchase.
(3) TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISER - The trust has an investment advisory agreement with
Massachusetts Financial Services Company (MFS) to provide overall investment
advisory and administrative services, and general office facilities. The
management fee is computed daily and paid monthly at an annual rate of 0.33%
of the trust's average daily net assets.
The trust pays compensation to the Independent Trustees ("Trustees") in the
form of both a retainer and attendance fees, and pays no compensation directly
to its Trustees who are officers of the investment adviser, or to officers of
the trust, all of whom receive remuneration for their services to the trust
from MFS. Certain officers and Trustees of the trust are officers or directors
of MFS, MFS Fund Distributors, Inc. (MFD), and MFS Service Center, Inc.
(MFSC). The trust has an unfunded defined benefit deferral plan for inactive
trustees and an unfunded retirement benefit deferral plan for active trustees.
Included in Trustees' compensation is a net increase of $9,895 as a result of
the change in the trust's pension liability under this plan and a pension
expense of $7,553 for inactive trustees for the six months ended
June 30, 2003.
ADMINISTRATOR - The trust has an administrative services agreement with MFS to
provide the trust with certain financial, legal, shareholder communications,
compliance, and other administrative services. As a partial reimbursement for
the cost of providing these services, the trust pays MFS an administrative fee
at the following annual percentages of the trust's average daily net assets:
First $2 billion 0.0175%
----------------------------------------------------------
Next $2.5 billion 0.0130%
----------------------------------------------------------
Next $2.5 billion 0.0005%
----------------------------------------------------------
In excess of $7 billion 0.0000%
----------------------------------------------------------
DISTRIBUTOR - MFD, a wholly owned subsidiary of MFS, as distributor, received
$128,132 and $1,286 for the six months ended June 30, 2003, as its portion of
the sales charge on sales of Class A and Class 529A shares of the trust,
respectively. The Trustees have adopted a distribution plan for Class A, Class
B, Class C, Class J, Class R, Class 529A, Class 529B and Class 529C shares
pursuant to Rule 12b-1 of the Investment Company Act of 1940 as follows:
The trust's distribution plan provides that the trust will pay MFD an annual
percentage of its average daily net assets attributable to certain share
classes in order that MFD may pay expenses on behalf of the trust related to
the distribution and servicing of its shares. These expenses include a service
fee paid to each securities dealer that enters into a sales agreement with MFD
based on the average daily net assets of accounts attributable to such
dealers. These fees are calculated based on each class' average daily net
assets. The maximum distribution and service fees for each class of shares are
as follows:
CLASS A CLASS B CLASS C CLASS R CLASS 529A CLASS 529B CLASS 529C
Distribution Fee 0.10% 0.75% 0.75% 0.25% 0.25% 0.75% 0.75%
- -------------------------------------------------------------------------------------
Service Fee 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
- -------------------------------------------------------------------------------------
Total
Distribution Plan 0.35% 1.00% 1.00% 0.50% 0.50% 1.00% 1.00%
- -------------------------------------------------------------------------------------
MFD retains the service fee for accounts not attributable to a securities dealer, which
for the six months ended June 30, 2003, amounted to:
CLASS A CLASS B CLASS C CLASS R CLASS 529A CLASS 529B CLASS 529C
Service Fee
Retained by MFD $337,331 $7,452 $5,046 $-- $51 $-- $--
- -------------------------------------------------------------------------------------
Fees incurred under the distribution plan during the six months ended June 30, 2003,
were as follows:
CLASS A CLASS B CLASS C CLASS R CLASS 529A CLASS 529B CLASS 529C
Total
Distribution Plan 0.35% 1.00% 1.00% 0.50% 0.35% 1.00% 1.00%
- -------------------------------------------------------------------------------------
Payment of the 0.15% per annum portion of the Class 529A distribution fee that
is not currently being charged will be implemented on such a date as the
Trustees of the Trust may determine.
The trust's distribution plan provides that the trust will pay MFD a
distribution fee of up to 0.75% per annum, and a service fee of up to 0.25%
per annum, of the trust's average daily net assets attributable to Class J
shares. Class J shares are available for distribution through Monex, Inc.
("Monex") and its network of financial intermediaries. Monex also serves as
the trust's Agent Company in Japan, and in that capacity represents the trust
before Japanese regulatory authorities. MFD will pay to Monex all of the
service fee attributable to Class J shares. Out of the distribution fee, MFD
will pay to Monex 0.615% per annum of average net assets attributable to Class
J shares and will retain the remaining 0.135%. A portion of the distribution
fee to Monex, equal to 0.05% per annum of the trust's average daily net assets
attributable to Class J shares, is paid to cover its services as the trust's
Agent Company. Fees incurred under the distribution plan during the six months
ended June 30, 2003 were 1.00% of average net assets attributable to Class J
shares on an annualized basis.
Certain Class A, Class C and Class 529C shares are subject to a contingent
deferred sales charge in the event of a shareholder redemption within, for
class A shares, 12 months following the purchase, and, for class C and 529C
shares, the first year from the end of the calendar month of purchase. A
contingent deferred sales charge is imposed on shareholder redemptions of
Class B and Class 529B shares in the event of a shareholder redemption within
six years from the end of the calendar month of purchase. MFD receives all
contingent deferred sales charges. Contingent deferred sales charges imposed
during the six months ended June 30, 2003, were as follows:
CLASS A CLASS B CLASS C CLASS 529B CLASS 529C
Contingent Deferred Sales
Charges Imposed $25,027$2,849,378 $15,293 $-- $--
- --------------------------------------------------------------------------------
The trust has and may from time to time enter into contracts with program
managers and other parties which administer the tuition programs through which
an investment in the trust's 529 share classes is made. The trust has entered
into an agreement with MFD pursuant to which MFD receives an annual fee of up
to 0.35% from the trust based solely upon the value of the trust's 529 share
classes attributable to tuition programs to which MFD or a third party which
contracts with MFD provides administrative services. The current fee has been
established at 0.25% annually of average net assets of the trust's 529 share
classes attributable to such programs. The fee may only be increased with the
approval of the board of trustees that oversees the trust. The services
provided by MFD or a third party with which MFD contracts include
recordkeeping and tax reporting and account services, as well as services
designed to maintain the program's compliance with the Internal Revenue Code
and other regulatory requirements.
SHAREHOLDER SERVICING AGENT - MFSC, a wholly owned subsidiary of MFS, earns a
fee for its services as shareholder servicing agent. The fee is calculated as
a percentage of the trust's average daily net assets at an annual rate of
0.11%. Prior to April 1, 2003, the fee was 0.10% of the trust's average daily
net assets.
(4) PORTFOLIO SECURITIES
Purchases and sales of investments, other than purchased option transactions
and short-term obligations, were as follows:
PURCHASES SALES
Investments (non-U.S. government securities) $2,304,261,536 $2,762,013,757
The cost and unrealized appreciation and depreciation in the value of the
investments owned by the trust, as computed on a federal income tax basis, are
as follows:
Aggregate cost $6,628,665,065
Gross unrealized appreciation $380,479,762
Gross unrealized depreciation (238,076,849)
Net unrealized appreciation $142,402,913
(5) SHARES OF BENEFICIAL INTEREST
The trust's Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest. Transactions in
trust shares were as follows:
Six months ended Year ended
6/30/03 12/31/02
SHARES AMOUNT SHARES AMOUNT
CLASS A SHARES
Shares sold 374,980,266 $4,889,506,620 360,607,315 $5,020,795,242
- -------------------------------------------------------------------------------------------------------------
Shares issued to
shareholders in
reinvestment of
distributions 331,625 4,179,119 1,075,267 14,964,133
- -------------------------------------------------------------------------------------------------------------
Shares reacquired (395,035,557) (5,179,691,290) (422,512,573) (5,928,364,644)
- -------------------------------------------------------------------------------------------------------------
Net decrease (19,723,666) $(286,005,551) (60,829,991) $(892,605,269)
- -------------------------------------------------------------------------------------------------------------
CLASS B SHARES
Shares sold 6,158,438 $78,071,455 17,649,923 $255,237,932
- -------------------------------------------------------------------------------------------------------------
Shares issued to
shareholders in
reinvestment of
distributions -- -- -- --
- -------------------------------------------------------------------------------------------------------------
Shares reacquired (23,418,365) (294,129,458) (64,209,641) (895,989,855)
- -------------------------------------------------------------------------------------------------------------
Net decrease (17,259,927) $(216,058,003) (46,559,718) $(640,751,923)
- -------------------------------------------------------------------------------------------------------------
CLASS C SHARES
Shares sold 1,380,253 $17,484,327 5,206,857 $74,888,042
- -------------------------------------------------------------------------------------------------------------
Shares issued to
shareholders in
reinvestment of
distributions -- -- -- --
- -------------------------------------------------------------------------------------------------------------
Shares reacquired (5,967,174) (74,703,216) (19,273,711) (269,882,839)
- -------------------------------------------------------------------------------------------------------------
Net decrease (4,586,921) $(57,218,889) (14,066,854) $(194,994,797)
- -------------------------------------------------------------------------------------------------------------
CLASS I SHARES
Shares sold 715,827 $9,222,977 5,282,869 $68,942,059
- -------------------------------------------------------------------------------------------------------------
Shares issued to
shareholders
in reinvestment
of distributions 43,634 544,987 39,714 577,836
- -------------------------------------------------------------------------------------------------------------
Shares reacquired (1,792,541) (23,170,946) (1,533,795) (21,723,069)
- -------------------------------------------------------------------------------------------------------------
Net increase (decrease) (1,033,080) $(13,402,982) 3,788,788 $47,796,826
- -------------------------------------------------------------------------------------------------------------
CLASS J SHARES
Shares sold 2,481 $30,928 13,920 $200,598
- -------------------------------------------------------------------------------------------------------------
Shares issued to
shareholders in
reinvestment of
distributions -- -- -- --
- -------------------------------------------------------------------------------------------------------------
Shares reacquired (3,170) (39,468) (9,880) (132,238)
- -------------------------------------------------------------------------------------------------------------
Net increase (decrease) (689) $(8,540) 4,040 $68,360
- -------------------------------------------------------------------------------------------------------------
CLASS R SHARES
Shares sold 91,693 $1,192,297 389 $5,000
- -------------------------------------------------------------------------------------------------------------
Shares issued to
shareholders in
reinvestment of
distributions 26 330 -- --
- -------------------------------------------------------------------------------------------------------------
Shares reacquired (36,721) (472,165) -- --
- -------------------------------------------------------------------------------------------------------------
Net increase 54,998 $720,462 389 $5,000
- -------------------------------------------------------------------------------------------------------------
Six months ended Period ended
6/30/03 12/31/02**
SHARES AMOUNT SHARES AMOUNT
CLASS 529A SHARES
Shares sold 22,655 $295,007 10,249 $133,493
- -------------------------------------------------------------------------------------------------------------
Shares issued to
shareholders in
reinvestment of
distributions 133 1,666 31 417
- -------------------------------------------------------------------------------------------------------------
Shares reacquired (1) (10) (33) (429)
- -------------------------------------------------------------------------------------------------------------
Net increase 22,787 $296,663 10,247 $133,481
- -------------------------------------------------------------------------------------------------------------
CLASS 529B SHARES
Shares sold 1,690 $21,163 2,980 $37,693
- -------------------------------------------------------------------------------------------------------------
Shares issued to
shareholders in
reinvestment of
distributions 15 184 13 171
- -------------------------------------------------------------------------------------------------------------
Shares reacquired (126) (1,727) (27) (336)
- -------------------------------------------------------------------------------------------------------------
Net increase 1,579 $19,620 2,966 $37,528
- -------------------------------------------------------------------------------------------------------------
CLASS 529C SHARES
Shares sold 3,469 $44,335 7,271 $89,984
- -------------------------------------------------------------------------------------------------------------
Shares issued to
shareholders in
reinvestment of
distributions 60 716 4 53
- -------------------------------------------------------------------------------------------------------------
Shares reacquired -- -- (16) (203)
- -------------------------------------------------------------------------------------------------------------
Net increase 3,529 $45,051 7,259 $89,834
- -------------------------------------------------------------------------------------------------------------
*For the period from the inception of Class R, December 31, 2002, through December 31, 2002. There was no
operating activity associated with Class R shares for this period.
**From the inception of the class' investment operations, July 31, 2002, through December 31, 2002.
(6) LINE OF CREDIT
The trust and other affiliated funds participate in an $800 million unsecured
line of credit provided by a syndication of banks under a line of credit
agreement. Borrowings may be made for temporary financing needs. Interest is
charged to each fund, based on its borrowings, at a rate equal to the bank's
base rate. A commitment fee of $21,642 which is based on the average daily
unused portion of the line of credit is included in miscellaneous expense. The
trust had no significant borrowings during the period.
- ------------------------------------------------------------------------------------------------------------
TRUSTEES AND OFFICERS
- ------------------------------------------------------------------------------------------------------------
The following tables present certain information regarding the Trustees and officers of the trust, including
their principal occupations, which, unless specific dates are shown, are of more than five years' duration,
although the titles may not have been the same throughout.
Name, age, position with the Trust, principal occupation, and other directorships(1)
INTERESTED TRUSTEES
JEFFREY L. SHAMES(2) (born 06/02/55) ABBY M. O'NEILL (born 04/27/28)
Chairman Trustee
Massachusetts Financial Services Company, Chairman Private investor; Rockefeller Financial Services,
Inc. (investment advisers), Chairman and Chief
JOHN W. BALLEN(2) (born 09/12/59) Executive Officer
Trustee and President
Massachusetts Financial Services Company, Chief LAWRENCE T. PERERA (born 06/23/35)
Executive Officer and Director Trustee
Hemenway & Barnes (attorneys), Partner
KEVIN R. PARKE(2) (born 12/14/59)
Trustee WILLIAM J. POORVU (born 04/10/35)
Massachusetts Financial Services Company, Trustee
President, Chief Investment Officer and Director Private investor; Harvard University Graduate
School of Business Administration, Class of 1961
INDEPENDENT TRUSTEES Adjunct Professor in Entrepreneurship Emeritus;
CBL & Associates Properties, Inc. (real estate
LAWRENCE H. COHN, M.D. (born 03/11/37) investment trust), Director
Trustee
Brigham and Women's Hospital, Chief of Cardiac J. DALE SHERRATT (born 09/23/38)
Surgery; Harvard Medical School, Professor of Trustee
Surgery Insight Resources, Inc. (acquisition planning
specialists), President; Wellfleet Investments
WILLIAM R. GUTOW (born 09/27/41) (investor in health care companies), Managing
Trustee General Partner (since 1993); Cambridge
Private investor and real estate consultant; Nutraceuticals (professional nutritional
Capitol Entertainment Management Company (video products), Chief Executive Officer (until May
franchise), Vice Chairman 2001)
J. ATWOOD IVES (born 05/01/36) ELAINE R. SMITH (born 04/25/46)
Trustee Trustee
Private investor; KeySpan Corporation (energy Independent health care industry consultant
related services), Director; Eastern Enterprises
(diversified services company), Chairman, Trustee WARD SMITH (born 09/13/30)
and Chief Executive Officer (until November 2000) Trustee
Private investor
(1) Directorships or trusteeships of companies required to report to the Securities and Exchange Commission
(i.e., "public companies").
(2) "Interested person" of MFS 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 Trust. The address
of MFS is 500 Boylston Street, Boston, Massachusetts 02116.
Trustees and Officers - continued
OFFICERS
JEFFREY L. SHAMES (born 06/02/55) ROBERT R. FLAHERTY (born 09/18/63)
Chairman Assistant Treasurer
Massachusetts Financial Services Company, Chairman Massachusetts Financial Services Company, Vice
President (since August 2000); UAM Fund Services,
JOHN W. BALLEN (born 09/12/59) Senior Vice President (prior to August 2000)
Trustee and President
Massachusetts Financial Services Company, Chief RICHARD M. HISEY (born 08/29/58)
Executive Officer and Director Treasurer
Massachusetts Financial Services Company, Senior
JAMES R. BORDEWICK, JR. (born 03/06/59) Vice President (since July 2002); The Bank of New
Assistant Secretary and Assistant Clerk York, Senior Vice President (September 2000 to
Massachusetts Financial Services Company, Senior July 2002); Lexington Global Asset Managers, Inc.,
Vice President and Associate General Counsel Executive Vice President and Chief Financial
Officer (prior to September 2000); Lexington
STEPHEN E. CAVAN (born 11/06/53) Funds, Treasurer (prior to September 2000)
Secretary and Clerk
Massachusetts Financial Services Company, Senior ELLEN MOYNIHAN (born 11/13/57)
Vice President, General Counsel and Secretary Assistant Treasurer
Massachusetts Financial Services Company, Vice
STEPHANIE A. DESISTO (born 10/01/53) President
Assistant Treasurer
Massachusetts Financial Services Company, Vice JAMES O. YOST (born 06/12/60)
President (since April 2003); Brown Brothers Assistant Treasurer
Harriman & Co., Senior Vice President (November Massachusetts Financial Services Company, Senior
2002 to April 2003); ING Groep N.V./Aeltus Vice President
Investment Management, Senior Vice President
(prior to November 2002)
The Trust does not hold annual shareholder meetings for the purpose of electing Trustees, and Trustees are
not elected for fixed terms. This means that each Trustee will be elected to hold office until his or her
successor is chosen and qualified or until his or her earlier death, resignation, retirement or removal.
Each officer will hold office until his or her successor is chosen and qualified, or until he or she
retires, resigns or is removed from office.
Messrs. Shames, Ives, Perera and Poorvu, and Ms. Smith, have served in their capacity as Trustee of the
Trust continuously since originally elected or appointed. Messrs. Ballen and Gutow have each served as a
Trustee of the Trust since August 1, 2001. Messrs. Cohn, Sherratt and Smith, and Ms. O'Neill, were elected
by shareholders and have served as Trustees of the Trust since January 1, 2002. Mr. Parke has served as
Trustee of the Trust since January 1, 2002.
Each of the Trust'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. Each Trustee serves as a board member of 112 funds within the MFS Family of Funds.
The Statement of Additional Information contains further information about the Trustees and is available
without charge upon request, by calling 1-800-225-2606.
- -------------------------------------------------------------------------------------------------------------
INVESTMENT ADVISER CUSTODIANS
Massachusetts Financial Services Company State Street Bank and Trust Company
500 Boylston Street, Boston, MA 225 Franklin Street, Boston, MA
02116-3741 02110
DISTRIBUTOR JP Morgan Chase Bank
MFS Fund Distributors, Inc. One Chase Manhattan Plaza
500 Boylston Street, Boston, MA New York, NY 10081
02116-3741
PORTFOLIO MANAGERS
John D. Laupheimer, Jr.(1)
Brooks Taylor(1)
(1) MFS Investment Management
- ------------------------------------------------------------------------------
MONEY MANAGEMENT FOR ALL TYPES OF INVESTORS
- ------------------------------------------------------------------------------
YOUR GOALS ARE IMPORTANT
MFS offers a complete range of investments and investment services to address
specific financial needs over time. When your investing goals change, you can
easily stay with MFS for the products you need, when you need them. Whether
you're investing for college or retirement expenses or for tax management or
estate planning, MFS will be there.
Ask your investment professional how MFS can help you move toward the goals
you've set.
MFS FAMILY OF FUNDS(R)
More than 50 portfolios offer domestic and international
equity and fixed-income investment across the full risk
spectrum
VARIABLE ANNUITIES
A selection of annuity products with advantages for
building and preserving wealth
MFS 401(k) AND IRA SUITES
Retirement plans for businesses and individuals
MFS COLLEGE SAVINGS PLANS
Investment products to help meet education expenses
MFS PRIVATE PORTFOLIO SERVICES
Investment advisory services that provide custom products
for high-net-worth individuals
You can obtain a prospectus for any MFS product from your investment
professional. The prospectus contains complete information on the fees and
risks associated with investing. Read the prospectus carefully before
investing or sending money.
- --------------------------------------------------------------------------------
CONTACT INFORMATION
- --------------------------------------------------------------------------------
INVESTOR INFORMATION
For information on MFS mutual funds, call your investment professional or, for
an information kit, call toll free: 1-800-225-2606 any business day from
8 a.m. to 8 p.m. Eastern time.
INVESTOR SERVICE
Write to us at: MFS Service Center, Inc.
P.O. Box 2281
Boston, MA 02107-9906
Type of Information Phone number Hours, Eastern Time
- --------------------------------------------------------------------------------
General information 1-800-225-2606 8 a.m. to 8 p.m., any
business day
- --------------------------------------------------------------------------------
Speech- or hearing-impaired 1-800-637-6576 9 a.m. to 5 p.m., any
business day
- --------------------------------------------------------------------------------
Shares prices, account 1-800-MFS-TALK
balances (1-800-637-8255)
exchanges or stock and touch-tone required 24 hours a day, 365 days a year
bond outlooks
- --------------------------------------------------------------------------------
WORLD WIDE WEB
Go to WWW.MFS.COM for a clear view of market events, investor education,
account access, and product and performance insights.
Go paperless with EDELIVERY: Join your fellow shareholders who are already
taking advantage of this great new benefit from MFS. With eDelivery, we send
you prospectuses, reports, and proxies electronically. You get timely
information without mailbox clutter (and help your fund save printing and
postage costs).
SIGN-UP instructions: If your account is registered with us, go to
www.mfs.com, log in to your account via MFS Access, and select the eDelivery
sign up options.
If you own your MFS fund shares through a financial institution or through a
retirement plan, MFS Talk, MFS Access, and eDelivery may not be available
to you.
[logo] M F S(R)
INVESTMENT MANAGEMENT
500 Boylston Street
Boston, MA 02116-3741
(C) 2003 MFS Investment Management(R)
MFS(R) Investment products are offered through MFS Fund Distributors, Inc.
500 Boylston Street, Boston, MA 02116 MIT-SEM-8/03 565M
ITEM 2. CODE OF ETHICS.
Not applicable at this time. Applicable for annual reports filed for fiscal
years ending on or after July 15, 2003.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable at this time. Applicable for annual reports filed for fiscal
years ending on or after July 15, 2003.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable at this time. Applicable for annual reports filed for the first
fiscal year ending after December 15, 2003.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
If applicable, not applicable at this time. Applicable for annual reports
covering periods ending on or after the compliance date for the listing
standards applicable to the particular issuer. Listed issuers must be in
compliance with the new listing rules by the earlier of the registrant's first
annual shareholders meeting after January 15, 2004 or October 31, 2004.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
If applicable, not applicable at this time. Applicable for annual reports filed
on or after July 1, 2003.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) Based upon their evaluation of the registrant's disclosure controls and
procedures as conducted within 90 days of the filing date of this 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 significant changes in the registrant's internal controls or
in other factors that could significantly affect these controls subsequent
to the date of their evaluation.
ITEM 10. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a) 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: Not applicable.
(b) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule
30a-2(a) under the Act (17 CFR 270.30a-2): Attached hereto.
[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)) 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.][The submission of Section
906 certifications has been proposed by the SEC, but has not yet been
finalized. The SEC has encouraged issuers to submit Section 906
certifications as an exhibit to Form N-CSR until the final rule has been
adopted. Please see Proposed Rule: Certification of Disclosure in Certain
Exchange Act Reports, Release No. 33-8212 (March 21, 2003)].
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) MASSACHUSETTS INVESTORS TRUST
-------------------------------------------------------------------
By (Signature and Title)* /s/ JOHN W. BALLEN
-----------------------------------------------------
John W. Ballen, President
Date: August 25, 2003
---------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ JOHN W. BALLEN
------------------------------------------------------
John W. Ballen, President
(Principal Executive Officer)
Date: August 25, 2003
---------------
By (Signature and Title)* /s/ RICHARD M. HISEY
------------------------------------------------------
Richard M. Hisey, Treasurer
(Principal Financial Officer and Accounting Officer)
Date: August 25, 2003
---------------
* Print name and title of each signing officer under his or her signature.