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 811-203
- -------------------------------------------------------------------------------
MASSACHUSETTS INVESTORS TRUST
- -------------------------------------------------------------------------------
(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)
Susan S. Newton
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
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Date of reporting period: June 30, 2005
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ITEM 1. REPORTS TO STOCKHOLDERS.
MASSACHUSETTS INVESTORS TRUST 6/30/05
SEMIANNUAL REPORT
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LETTER FROM THE CEO 1
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PORTFOLIO COMPOSITION 2
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EXPENSE TABLE 3
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PORTFOLIO OF INVESTMENTS 5
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FINANCIAL STATEMENTS 10
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NOTES TO FINANCIAL STATEMENTS 24
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RESULTS OF SHAREHOLDER MEETING 34
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PROXY VOTING POLICIES AND INFORMATION 35
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QUARTERLY PORTFOLIO DISCLOSURE 35
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CONTACT INFORMATION BACK COVER
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THIS REPORT HAS BEEN PREPARED FOR THE GENERAL
INFORMATION TO SHAREHOLDERS. IT IS AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY WHEN
PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS.
[logo] M F S(SM)
INVESTMENT MANAGEMENT(R)
LETTER FROM THE CEO
[Photo of Robert J. Manning]
Dear Shareholders,
As a professional investor for more than 20 years, I've often been asked to
name the single most important factor in investment success. My answer is
always the same: diversification. At MFS we talk about applying a disciplined
diversification(SM) strategy to a portfolio as a three step process: allocate
among the major asset classes; diversify within each asset class; and
rebalance regularly to avoid unnecessary risk.
Individual investors sometimes assume that the amount they're putting away is
too small to allow for diversification. My response would be that a good
investment plan, developed with the help of an investment professional, should
provide a way to properly diversify your contributions.
Remember that the purpose of diversification is to own investments that
historically have not moved in sync with each other - in the hope that, in any
given period, underperforming holdings will be somewhat counteracted by other
outperforming holdings. If none of your asset classes did badly in the past
year or so, you're probably not properly diversified.
Americans today have more of their wealth tied up in the markets than in any
previous period of our history, but we are not yet making the most of our
opportunities. While neither asset allocation nor diversification can
guarantee a profit or protect against a loss, I would voice the opinion that,
to a large extent, a failure to have a plan, diversify contributions, and
rebalance a portfolio annually has been behind many U.S. investors' failure to
reach their long-term financial goals.
For more information on how to apply a disciplined diversification(SM)
strategy to your portfolio, I would urge you to contact your own investment
professional. You may also want to refer to information on the subject on our
Website, MFS.COM.
Respectfully,
/s/ Robert J. Manning
Robert J. Manning
Chief Executive Officer and Chief Investment Officer
MFS Investment Management(R)
August 15, 2005
The opinions expressed in this letter are those of MFS, and no forecasts can
be guaranteed.
PORTFOLIO COMPOSITION
PORTFOLIO STRUCTURE
Stocks 99.6%
Cash & Other Net Assets 0.4%
TOP TEN HOLDINGS
American International Group, Inc. 3.0%
------------------------------------------------
Johnson & Johnson 2.9%
------------------------------------------------
United Technologies Corp. 2.5%
------------------------------------------------
EMC Corp. 2.3%
------------------------------------------------
Lockheed Martin Corp. 2.1%
------------------------------------------------
Abbott Laboratories 2.0%
------------------------------------------------
Oracle Corp. 2.0%
------------------------------------------------
Dell, Inc. 2.0%
------------------------------------------------
Wyeth 2.0%
------------------------------------------------
Amgen, Inc. 1.9%
------------------------------------------------
EQUITY SECTORS
Health Care 18.6%
------------------------------------------------
Financial Services 15.6%
------------------------------------------------
Technology 14.9%
------------------------------------------------
Consumer Staples 9.7%
------------------------------------------------
Energy 9.2%
------------------------------------------------
Industrial Goods & Services 8.5%
------------------------------------------------
Leisure 6.2%
------------------------------------------------
Retailing 6.1%
------------------------------------------------
Utilities & Communications 4.4%
------------------------------------------------
Basic Materials 3.4%
------------------------------------------------
Autos & Housing 1.1%
------------------------------------------------
Transportation 1.0%
------------------------------------------------
Special Products & Services 0.9%
------------------------------------------------
Percentages are based on net assets as of 6/30/05.
The portfolio is actively managed, and current holdings may be different.
EXPENSE TABLE
TRUST EXPENSES BORNE BY THE SHAREHOLDERS DURING THE PERIOD,
JANUARY 1, 2005 THROUGH JUNE 30, 2005.
As a shareholder of the trust, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on certain purchase or redemption
payments and redemption fees on certain exchanges and redemptions, and (2)
ongoing costs, including management fees; distribution and service (12b-1)
fees; and other trust expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the trust and to
compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning
of the period and held for the entire period January 1, 2005 through
June 30, 2005.
ACTUAL EXPENSES
The first line for each share class in the table below provides information
about actual account values and actual expenses. You may use the information
in this line, together with the amount you invested, to estimate the expenses
that you paid over the period. Simply divide your account value by $1,000 (for
example, an $8,600 account value divided by $1,000 = 8.6), then multiply the
result by the number in the first line under the heading entitled "Expenses
Paid During Period" to estimate the expenses you paid on your account during
this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line for each share class in the table below provides information
about hypothetical account values and hypothetical expenses based on the
trust's actual expense ratio and an assumed rate of return of 5% per year
before expenses, which is not the trust's actual return. The hypothetical
account values and expenses may not be used to estimate the actual ending
account balance or expenses you paid for the period. You may use this
information to compare the ongoing costs of investing in the trust and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads) or redemption fees. Therefore, the second line for each share
class in the table is useful in comparing ongoing costs only, and will not
help you determine the relative total costs of owning different funds. In
addition, if these transactional costs were included, your costs would have
been higher.
- -------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period**
Share Expense Account Value Account Value 1/01/05-
Class Ratio 1/01/05 6/30/05 6/30/05
- --------------------------------------------------------------------------------
Actual 0.96% $1,000.00 $995.20 $4.75
A ---------------------------------------------------------------------
Hypothetical* 0.96% $1,000.00 $1,020.03 $4.81
- --------------------------------------------------------------------------------
Actual 1.61% $1,000.00 $991.70 $7.95
B ----------------------------------------------------------------------
Hypothetical* 1.61% $1,000.00 $1,016.81 $8.05
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Actual 1.61% $1,000.00 $991.70 $7.95
C ---------------------------------------------------------------------
Hypothetical* 1.61% $1,000.00 $1,016.81 $8.05
- --------------------------------------------------------------------------------
Actual 0.61% $1,000.00 $997.10 $3.02
I ---------------------------------------------------------------------
Hypothetical* 0.61% $1,000.00 $1,021.77 $3.06
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R Actual 1.11% $1,000.00 $994.00 $5.49
(formerly ---------------------------------------------------------------------
R1) Hypothetical* 1.11% $1,000.00 $1,019.29 $5.56
- --------------------------------------------------------------------------------
Actual 1.82% $1,000.00 $991.10 $8.99
R1 ---------------------------------------------------------------------
Hypothetical* 1.82% $1,000.00 $1,015.77 $9.10
- --------------------------------------------------------------------------------
Actual 1.51% $1,000.00 $991.70 $7.46
R2 ---------------------------------------------------------------------
Hypothetical* 1.51% $1,000.00 $1,017.31 $7.55
- --------------------------------------------------------------------------------
R3 Actual 1.37% $1,000.00 $993.30 $6.77
(formerly ---------------------------------------------------------------------
R2) Hypothetical* 1.37% $1,000.00 $1,018.00 $6.85
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Actual 1.01% $1,000.00 $995.20 $5.00
R4 ---------------------------------------------------------------------
Hypothetical* 1.01% $1,000.00 $1,019.79 $5.06
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Actual 0.71% $1,000.00 $995.80 $3.51
R5 ---------------------------------------------------------------------
Hypothetical* 0.71% $1,000.00 $1,021.27 $3.56
- --------------------------------------------------------------------------------
Actual 1.21% $1,000.00 $994.10 $5.98
529A ---------------------------------------------------------------------
Hypothetical* 1.21% $1,000.00 $1,018.79 $6.06
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Actual 1.86% $1,000.00 $990.40 $9.18
529B ---------------------------------------------------------------------
Hypothetical* 1.86% $1,000.00 $1,015.57 $9.30
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Actual 1.86% $1,000.00 $990.90 $9.18
529C ---------------------------------------------------------------------
Hypothetical* 1.86% $1,000.00 $1,015.57 $9.30
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- ------------
* 5% class return per year before expenses.
** Expenses paid is equal to each class' annualized expense ratio, as shown
above, multiplied by the average account value over the period, multiplied
by the number of days in the period, divided by the number of days in the
year. Expenses paid do not include any applicable sales charges (loads) or
redemption fees. If these transaction costs had been included, your costs
would have been higher.
PORTFOLIO OF INVESTMENTS (unaudited) - 6/30/05
The Portfolio of Investments is a complete list of all securities owned
by your trust. It is categorized by broad-based asset classes.
Stocks - 99.6%
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ISSUER SHARES $ VALUE
- ---------------------------------------------------------------------------------------------------
Aerospace - 4.6%
- ---------------------------------------------------------------------------------------------------
Lockheed Martin Corp. 1,791,990 $ 116,246,391
United Technologies Corp. 2,657,520 136,463,652
--------------
$ 252,710,043
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Apparel Manufacturers - 0.5%
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Nike, Inc., "B" 320,200 $ 27,729,320
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Banks & Credit Companies - 8.5%
- ---------------------------------------------------------------------------------------------------
American Express Co.^ 1,335,930 $ 71,111,554
Bank of America Corp. 2,105,480 96,030,943
Citigroup, Inc. 1,132,283 52,345,443
J.P. Morgan Chase & Co. 1,944,250 68,670,910
SLM Corp. 1,430,010 72,644,508
Wells Fargo & Co. 1,638,878 100,922,107
--------------
$ 461,725,465
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Biotechnology - 4.3%
- ---------------------------------------------------------------------------------------------------
Amgen, Inc.* 1,708,680 $ 103,306,793
Genzyme Corp.* 870,240 52,292,722
Gilead Sciences, Inc.* 1,785,960 78,564,380
--------------
$ 234,163,895
- ---------------------------------------------------------------------------------------------------
Broadcast & Cable TV - 3.3%
- ---------------------------------------------------------------------------------------------------
Interpublic Group of Cos., Inc.*^ 2,204,360 $ 26,849,105
Univision Communications, Inc., "A"*^ 1,481,820 40,824,141
Viacom, Inc., "B" 1,606,828 51,450,633
Walt Disney Co. 2,424,250 61,042,615
--------------
$ 180,166,494
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Brokerage & Asset Managers - 4.1%
- ---------------------------------------------------------------------------------------------------
Goldman Sachs Group, Inc. 870,930 $ 88,852,279
Legg Mason, Inc.^ 646,819 67,340,326
Lehman Brothers Holdings, Inc.^ 658,790 65,404,671
--------------
$ 221,597,276
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Business Services - 0.9%
- ---------------------------------------------------------------------------------------------------
Accenture Ltd., "A"* 2,137,130 $ 48,448,737
- ---------------------------------------------------------------------------------------------------
Chemicals - 2.4%
- ---------------------------------------------------------------------------------------------------
Dow Chemical Co.^ 1,192,900 $ 53,119,837
Monsanto Co. 1,209,910 76,067,042
--------------
$ 129,186,879
- ---------------------------------------------------------------------------------------------------
Computer Software - 3.8%
- ---------------------------------------------------------------------------------------------------
Amdocs Ltd.* 1,380,600 $ 36,489,258
Mercury Interactive Corp.*^ 677,710 25,996,956
Oracle Corp.* 8,210,980 108,384,936
VERITAS Software Corp.* 1,582,210 38,605,924
--------------
$ 209,477,074
- ---------------------------------------------------------------------------------------------------
Computer Software - Systems - 2.9%
- ---------------------------------------------------------------------------------------------------
Apple Computer, Inc.* 724,810 $ 26,680,256
Dell, Inc.* 2,734,620 108,044,836
Sun Microsystems, Inc.* 6,792,010 25,334,197
--------------
$ 160,059,289
- ---------------------------------------------------------------------------------------------------
Construction - 1.1%
- ---------------------------------------------------------------------------------------------------
Masco Corp. 1,841,900 $ 58,498,744
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Consumer Goods & Services - 5.4%
- ---------------------------------------------------------------------------------------------------
Avon Products, Inc. 985,190 $ 37,289,441
Colgate-Palmolive Co. 1,371,450 68,449,070
Procter & Gamble Co. 1,712,866 90,353,682
Reckitt Benckiser PLC 3,256,470 95,670,453
--------------
$ 291,762,646
- ---------------------------------------------------------------------------------------------------
Electrical Equipment - 1.7%
- ---------------------------------------------------------------------------------------------------
Tyco International Ltd. 3,108,730 $ 90,774,916
- ---------------------------------------------------------------------------------------------------
Electronics - 2.3%
- ---------------------------------------------------------------------------------------------------
Analog Devices, Inc. 2,157,420 $ 80,493,340
Texas Instruments, Inc. 631,460 17,725,082
Xilinx, Inc. 971,520 24,773,760
--------------
$ 122,992,182
- ---------------------------------------------------------------------------------------------------
Energy - Independent - 1.9%
- ---------------------------------------------------------------------------------------------------
EnCana Corp.^ 1,293,450 $ 51,207,686
EOG Resources, Inc.^ 959,760 54,514,368
--------------
$ 105,722,054
- ---------------------------------------------------------------------------------------------------
Energy - Integrated - 2.5%
- ---------------------------------------------------------------------------------------------------
BP PLC, ADR 906,592 $ 56,553,209
TOTAL S.A., ADR^ 692,680 80,939,658
--------------
$ 137,492,867
- ---------------------------------------------------------------------------------------------------
Food & Non-Alcoholic Beverages - 2.8%
- ---------------------------------------------------------------------------------------------------
Groupe Danone^ 372,930 $ 32,663,923
Nestle S.A 149,096 38,051,277
PepsiCo, Inc.^ 1,549,076 83,541,669
--------------
$ 154,256,869
- ---------------------------------------------------------------------------------------------------
Gaming & Lodging - 1.7%
- ---------------------------------------------------------------------------------------------------
Carnival Corp.^ 1,185,720 $ 64,681,026
Hilton Group PLC 5,431,400 27,741,658
--------------
$ 92,422,684
- ---------------------------------------------------------------------------------------------------
General Merchandise - 2.5%
- ---------------------------------------------------------------------------------------------------
Target Corp. 1,533,930 $ 83,461,131
Wal-Mart Stores, Inc. 1,106,700 53,342,940
--------------
$ 136,804,071
- ---------------------------------------------------------------------------------------------------
Insurance - 3.0%
- ---------------------------------------------------------------------------------------------------
American International Group, Inc. 2,806,302 $ 163,046,146
- ---------------------------------------------------------------------------------------------------
Internet - 1.4%
- ---------------------------------------------------------------------------------------------------
eBay, Inc.*^ 988,340 $ 32,625,103
Yahoo!, Inc.* 1,328,320 46,026,288
--------------
$ 78,651,391
- ---------------------------------------------------------------------------------------------------
Leisure & Toys - 1.2%
- ---------------------------------------------------------------------------------------------------
Electronic Arts, Inc.* 1,120,700 $ 63,442,827
- ---------------------------------------------------------------------------------------------------
Machinery & Tools - 2.2%
- ---------------------------------------------------------------------------------------------------
Caterpillar, Inc.^ 978,370 $ 93,248,445
Illinois Tool Works, Inc.^ 302,540 24,106,387
--------------
$ 117,354,832
- ---------------------------------------------------------------------------------------------------
Medical Equipment - 4.4%
- ---------------------------------------------------------------------------------------------------
Boston Scientific Corp.* 1,822,590 $ 49,209,930
Guidant Corp.^ 491,710 33,092,083
Medtronic, Inc. 1,445,380 74,856,230
Synthes, Inc. 267,750 29,301,323
Zimmer Holdings, Inc.*^ 723,920 55,140,986
--------------
$ 241,600,552
- ---------------------------------------------------------------------------------------------------
Oil Services - 4.8%
- ---------------------------------------------------------------------------------------------------
Halliburton Co. 1,967,430 $ 94,082,503
Noble Corp. 1,504,660 92,551,637
Transocean, Inc.*^ 1,381,060 74,535,808
--------------
$ 261,169,948
- ---------------------------------------------------------------------------------------------------
Personal Computers & Peripherals - 2.3%
- ---------------------------------------------------------------------------------------------------
EMC Corp.* 9,213,640 $ 126,319,004
- ---------------------------------------------------------------------------------------------------
Pharmaceuticals - 9.9%
- ---------------------------------------------------------------------------------------------------
Abbott Laboratories 2,243,430 $ 109,950,504
Eli Lilly & Co. 1,566,680 87,279,743
Johnson & Johnson 2,450,308 159,270,020
Roche Holding AG 572,110 72,050,090
Wyeth 2,412,840 107,371,380
--------------
$ 535,921,737
- ---------------------------------------------------------------------------------------------------
Specialty Chemicals - 1.0%
- ---------------------------------------------------------------------------------------------------
Praxair, Inc.^ 1,146,820 $ 53,441,812
- ---------------------------------------------------------------------------------------------------
Specialty Stores - 3.1%
- ---------------------------------------------------------------------------------------------------
Gap, Inc. 2,416,360 $ 47,723,110
Staples, Inc. 2,761,420 58,873,474
TJX Cos., Inc. 2,548,260 62,050,131
--------------
$ 168,646,715
- ---------------------------------------------------------------------------------------------------
Telecommunications - Wireless - 1.3%
- ---------------------------------------------------------------------------------------------------
Vodafone Group PLC, ADR 2,985,669 $ 72,611,470
- ---------------------------------------------------------------------------------------------------
Telecommunications - Wireline - 2.2%
- ---------------------------------------------------------------------------------------------------
Cisco Systems, Inc.* 4,880,271 $ 93,261,979
QUALCOMM, Inc. 762,290 25,163,193
--------------
$ 118,425,172
- ---------------------------------------------------------------------------------------------------
Telephone Services - 1.4%
- ---------------------------------------------------------------------------------------------------
Sprint Corp.^ 2,976,599 $ 74,682,869
- ---------------------------------------------------------------------------------------------------
Tobacco - 1.5%
- ---------------------------------------------------------------------------------------------------
Altria Group, Inc. 1,232,670 $ 79,704,442
- ---------------------------------------------------------------------------------------------------
Trucking - 1.0%
- ---------------------------------------------------------------------------------------------------
CNF, Inc. 258,600 $ 11,611,140
FedEx Corp. 506,120 41,000,781
--------------
$ 52,611,921
- ---------------------------------------------------------------------------------------------------
Utilities - Electric Power - 1.7%
- ---------------------------------------------------------------------------------------------------
Entergy Corp. 226,430 $ 17,106,787
Exelon Corp.^ 1,419,760 72,876,281
--------------
$ 89,983,068
- ---------------------------------------------------------------------------------------------------
Total Stocks (Identified Cost, $4,937,905,454) $5,413,605,411
- ---------------------------------------------------------------------------------------------------
Collateral for Securities Loaned - 4.8%
- ---------------------------------------------------------------------------------------------------
Navigator Securities Lending Prime Portfolio, at Cost and
Net Asset Value 261,653,644 $261,653,644
- ---------------------------------------------------------------------------------------------------
Short-Term Obligation - 0.2%
- ---------------------------------------------------------------------------------------------------
ISSUER PAR AMOUNT $ VALUE
- ---------------------------------------------------------------------------------------------------
Citigroup Funding, Inc., 3.43%, due 7/01/05, at Amortized Cost< $10,623,000 $10,623,000
- ---------------------------------------------------------------------------------------------------
Total Investments(S) (Identified Cost, $5,210,182,098) $5,685,882,055
- ---------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - (4.6)% (249,840,148)
- ---------------------------------------------------------------------------------------------------
Net Assets - 100.0% $5,436,041,907
- ---------------------------------------------------------------------------------------------------
* Non-income producing security.
^ All or a portion of this security is on loan.
< The rate shown represents an annualized yield at time of purchase.
(S) As of June 30, 2005, the trust had six securities representing $295,478,724 and 5.4%
of net assets that were fair valued in accordance with the policies adopted by the
Board of Trustees.
ADR = American Depository Receipt
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS Statement of Assets and Liabilities (unaudited)
This statement represents your trust's balance sheet, which details the assets
and liabilities composing the total value of the trust.
AT 6/30/05
ASSETS
- -------------------------------------------------------------------------------------------------------
Investments, at value, including $255,248,274 of securities
on loan (identified cost, $5,210,182,098) $5,685,882,055
Cash 82,796
Foreign currency, at value (identified cost, $237,784) 236,840
Receivable for investments sold 28,001,142
Receivable for trust shares sold 3,116,160
Interest and dividends receivable 3,724,581
Other assets 114,681
- -------------------------------------------------------------------------------------------------------
Total assets $5,721,158,255
- -------------------------------------------------------------------------------------------------------
LIABILITIES
- -------------------------------------------------------------------------------------------------------
Payable for trust shares reacquired 20,275,849
Collateral for securities loaned, at value 261,653,644
Payable to affiliates
Management fee 48,806
Shareholder servicing costs 1,946,135
Distribution and service fees 96,286
Administrative services fee 1,463
Program manager fees 14
Retirement plan administration and service fees 23
Accrued expenses and other liabilities 1,094,128
- -------------------------------------------------------------------------------------------------------
Total liabilities $285,116,348
- -------------------------------------------------------------------------------------------------------
Net assets $5,436,041,907
- -------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- -------------------------------------------------------------------------------------------------------
Paid-in capital $5,610,260,050
Unrealized appreciation (depreciation) on investments and
translation of assets and liabilities in foreign currencies 475,692,526
Accumulated net realized gain (loss) on investments and
foreign currency transactions (657,761,458)
Accumulated undistributed net investment income 7,850,789
- -------------------------------------------------------------------------------------------------------
Net assets $5,436,041,907
- -------------------------------------------------------------------------------------------------------
Shares of beneficial interest outstanding 319,763,321
- -------------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities (unaudited) - continued
Class A shares
- -------------------------------------------------------------------------------------------------------
Net assets $3,244,220,380
Shares outstanding 188,971,167
- -------------------------------------------------------------------------------------------------------
Net asset value per share $17.17
- -------------------------------------------------------------------------------------------------------
Offering price per share (100/94.25X$17.17) $18.22
- -------------------------------------------------------------------------------------------------------
Class B shares
- -------------------------------------------------------------------------------------------------------
Net assets $1,687,754,691
Shares outstanding 100,693,602
- -------------------------------------------------------------------------------------------------------
Net asset value and offering price per share $16.76
- -------------------------------------------------------------------------------------------------------
Class C shares
- -------------------------------------------------------------------------------------------------------
Net assets $365,432,945
Shares outstanding 21,903,072
- -------------------------------------------------------------------------------------------------------
Net asset value and offering price per share $16.68
- -------------------------------------------------------------------------------------------------------
Class I shares
- -------------------------------------------------------------------------------------------------------
Net assets $113,098,139
Shares outstanding 6,685,190
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share $16.92
- -------------------------------------------------------------------------------------------------------
Class R shares (formerly Class R1)
- -------------------------------------------------------------------------------------------------------
Net assets $20,172,371
Shares outstanding 1,190,594
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share $16.94
- -------------------------------------------------------------------------------------------------------
Class R1 shares
- -------------------------------------------------------------------------------------------------------
Net assets $89,497
Shares outstanding 5,342
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share $16.75
- -------------------------------------------------------------------------------------------------------
Class R2 shares
- -------------------------------------------------------------------------------------------------------
Net assets $51,185
Shares outstanding 3,054
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share $16.76
- -------------------------------------------------------------------------------------------------------
Class R3 shares (formerly Class R2)
- -------------------------------------------------------------------------------------------------------
Net assets $3,132,632
Shares outstanding 186,365
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share $16.81
- -------------------------------------------------------------------------------------------------------
Class R4 shares
- -------------------------------------------------------------------------------------------------------
Net assets $50,464
Shares outstanding 2,939
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share $17.17
- -------------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities (unaudited) - continued
Class R5 shares
- -------------------------------------------------------------------------------------------------------
Net assets $50,501
Shares outstanding 2,939
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share $17.18
- -------------------------------------------------------------------------------------------------------
Class 529A shares
- -------------------------------------------------------------------------------------------------------
Net assets $1,177,977
Shares outstanding 69,512
- -------------------------------------------------------------------------------------------------------
Net asset value per share $16.95
- -------------------------------------------------------------------------------------------------------
Offering price per share (100/94.25X$16.95) $17.98
- -------------------------------------------------------------------------------------------------------
Class 529B shares
- -------------------------------------------------------------------------------------------------------
Net assets $127,931
Shares outstanding 7,761
- -------------------------------------------------------------------------------------------------------
Net asset value and offering price per share $16.48
- -------------------------------------------------------------------------------------------------------
Class 529C shares
- -------------------------------------------------------------------------------------------------------
Net assets $683,194
Shares outstanding 41,784
- -------------------------------------------------------------------------------------------------------
Net asset value and offering price per share $16.35
- -------------------------------------------------------------------------------------------------------
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 trust received in investment income and paid in expenses.
It also describes any gains and/or losses generated by trust operations.
SIX MONTHS ENDED 6/30/05
NET INVESTMENT INCOME
- -------------------------------------------------------------------------------------------------------
Income
Dividends $42,397,762
Interest 842,706
Foreign taxes withheld (1,157,579)
- -------------------------------------------------------------------------------------------------------
Total investment income $42,082,889
- -------------------------------------------------------------------------------------------------------
Expenses
Management fee $9,352,068
Distribution and service fees 17,022,342
Program manager fees 2,390
Shareholder servicing costs 5,675,719
Administrative services fee 274,626
Retirement plan administration and services fees 3,476
Trustees' compensation 80,069
Custodian fee 607,309
Printing 244,135
Postage 88,932
Auditing fees 29,282
Legal fees 92,699
Shareholder solicitation expenses 303,970
Miscellaneous 372,308
- -------------------------------------------------------------------------------------------------------
Total expenses $34,149,325
- -------------------------------------------------------------------------------------------------------
Fees paid indirectly (222,835)
Reduction of expenses by investment adviser (13,170)
- -------------------------------------------------------------------------------------------------------
Net expenses $33,913,320
- -------------------------------------------------------------------------------------------------------
Net investment income $8,169,569
- -------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
- -------------------------------------------------------------------------------------------------------
Realized gain (loss) (identified cost basis)
Investment transactions $326,884,043
Foreign currency transactions 16,293
- -------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments and foreign
currency transactions $326,900,336
- -------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation)
Investments $(375,617,965)
Translation of assets and liabilities in foreign currencies (14,474)
- -------------------------------------------------------------------------------------------------------
Net unrealized gain (loss) on investments and foreign
currency translation $(375,632,439)
- -------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and
foreign currency $(48,732,103)
- -------------------------------------------------------------------------------------------------------
Change in net assets from operations $(40,562,534)
- -------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS Statements of Changes in Net Assets
These statements describe the increases and/or decreases in net assets resulting from
operations, any distributions, and any shareholder transactions.
SIX MONTHS ENDED YEAR ENDED
6/30/05 12/31/04
(UNAUDITED)
CHANGE IN NET ASSETS
- -------------------------------------------------------------------------------------------------------
FROM OPERATIONS
- -------------------------------------------------------------------------------------------------------
Net investment income $8,169,569 $25,774,398
Net realized gain (loss) on investments and foreign
currency transactions 326,900,336 461,617,578
Net unrealized gain (loss) on investments and foreign
currency translation (375,632,439) 147,783,508
- -------------------------------------------------------------------------------------------------------
Change in net assets from operations $(40,562,534) $635,175,484
- -------------------------------------------------------------------------------------------------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------
From net investment income
Class A $(1,384,758) $(31,713,526)
Class B -- (259,607)
Class I (475,699) (1,851,192)
Class R (32,798) (91,688)
Class R3 (7,590) (8,796)
Class 529A -- (8,137)
Class 529B -- (96)
Class 529C -- (786)
- -------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(1,900,845) $(33,933,828)
- -------------------------------------------------------------------------------------------------------
Change in net assets from trust share transactions $(602,659,274) $(1,329,507,205)
- -------------------------------------------------------------------------------------------------------
Redemption fees $1,836 $7,108
- -------------------------------------------------------------------------------------------------------
Total change in net assets $(645,120,817) $(728,258,441)
- -------------------------------------------------------------------------------------------------------
NET ASSETS
- -------------------------------------------------------------------------------------------------------
At beginning of period $6,081,162,724 $6,809,421,165
At end of period (including accumulated undistributed net
investment income of $7,850,789 and $1,582,065,
respectively) $5,436,041,907 $6,081,162,724
- -------------------------------------------------------------------------------------------------------
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 operations). 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) held for the entire
period.
SIX MONTHS YEARS ENDED 12/31
ENDED ----------------------------------------------------------------------
CLASS A 6/30/05= 2004= 2003 2002 2001 2000
(UNAUDITED)
Net asset value,
beginning of period $17.26 $15.62 $12.87 $16.58 $20.02 $20.95
- ------------------------------------------------------------------------------------------------------------------------------
INCOME FROM
INVESTMENT OPERATIONS#
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income $0.05 $0.11 $0.10 $0.09 $0.08 $0.08
Net realized and unrealized
gain (loss) on investments and
foreign currency (0.13) 1.68 2.74 (3.73) (3.33) (0.16)
- ------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $(0.08) $1.79 $2.84 $(3.64) $(3.25) $(0.08)
- ------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
- ------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.01) $(0.15) $(0.09) $(0.07) $(0.05) $(0.03)
From net realized gain on
investments and foreign
currency transactions -- -- -- -- (0.14) (0.82)
- ------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to
shareholders $(0.01) $(0.15) $(0.09) $(0.07) $(0.19) $(0.85)
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $17.17 $17.26 $15.62 $12.87 $16.58 $20.02
- ------------------------------------------------------------------------------------------------------------------------------
Total return (%)(+)& (0.48)++*** 11.51+*** 22.14 (22.00) (16.24) (0.34)
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- ------------------------------------------------------------------------------------------------------------------------------
Expenses before expense
reductions## 0.96+ 0.92 0.94 0.92 0.91 0.87
Expenses after expense
reductions## 0.96+ 0.92 0.94 0.92 0.91 0.87
Net investment income 0.54+ 0.68 0.72 0.58 0.47 0.38
Portfolio turnover 26 78 76 55 77 68
Net assets at end of period
(000,000 Omitted) $3,244 $3,458 $3,734 $3,589 $5,630 $7,638
- ------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 12/31
ENDED ---------------------------------------------------------------------
CLASS B 6/30/05= 2004= 2003 2002 2001 2000
(UNAUDITED)
Net asset value, beginning
of period $16.90 $15.26 $12.57 $16.22 $19.66 $20.69
- ------------------------------------------------------------------------------------------------------------------------------
INCOME FROM
INVESTMENT OPERATIONS#
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) $(0.01) $0.00+++ $0.01 $(0.01) $(0.03) $(0.06)
Net realized and unrealized gain
(loss) on investments and
foreign currency (0.13) 1.64 2.68 (3.64) (3.27) (0.15)
- ------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $(0.14) $1.64 $2.69 $(3.65) $(3.30) $(0.21)
- ------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
- ------------------------------------------------------------------------------------------------------------------------------
From net investment income $-- $(0.00)+++ $-- $-- $-- $--
From net realized gain on
investments and foreign currency
transactions -- -- -- -- (0.14) (0.82)
- ------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to
shareholders $-- $(0.00)+++ $-- $-- $(0.14) $(0.82)
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $16.76 $16.90 $15.26 $12.57 $16.22 $19.66
- ------------------------------------------------------------------------------------------------------------------------------
Total return (%)(+)& (0.83)++*** 10.76+*** 21.40 (22.50) (16.80) (1.01)
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- ------------------------------------------------------------------------------------------------------------------------------
Expenses before expense
reductions## 1.61+ 1.57 1.59 1.57 1.56 1.52
Expenses after expense
reductions## 1.61+ 1.57 1.59 1.57 1.56 1.52
Net investment income (loss) (0.11)+ 0.03 0.07 (0.06) (0.18) (0.27)
Portfolio turnover 26 78 76 55 77 68
Net assets at end of period
(000,000 Omitted) $1,688 $2,062 $2,435 $2,391 $3,839 $5,022
- ------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 12/31
ENDED -----------------------------------------------------------------------
CLASS C 6/30/05= 2004= 2003 2002 2001 2000
(UNAUDITED)
Net asset value, beginning
of period $16.82 $15.19 $12.51 $16.14 $19.57 $20.59
- ------------------------------------------------------------------------------------------------------------------------------
INCOME FROM
INVESTMENT OPERATIONS#
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) $(0.01) $0.00+++ $0.01 $(0.01) $(0.03) $(0.06)
Net realized and unrealized gain
(loss) on investments and
foreign currency (0.13) 1.63 2.67 (3.62) (3.26) (0.14)
- ------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $(0.14) $1.63 $2.68 $(3.63) $(3.29) $(0.20)
- ------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
- ------------------------------------------------------------------------------------------------------------------------------
From net investment income $-- $-- $-- $-- $-- $--
From net realized gain on
investments and foreign currency
transactions -- -- -- -- (0.14) (0.82)
- ------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to
shareholders $-- $-- $-- $-- $(0.14) $(0.82)
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $16.68 $16.82 $15.19 $12.51 $16.14 $19.57
- ------------------------------------------------------------------------------------------------------------------------------
Total return (%)(+)& (0.83)++*** 10.73+*** 21.42 (22.49) (16.82) (0.96)
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- ------------------------------------------------------------------------------------------------------------------------------
Expenses before expense
reductions## 1.61+ 1.57 1.59 1.57 1.56 1.52
Expenses after expense
reductions## 1.61+ 1.57 1.59 1.57 1.56 1.52
Net investment income (loss) (0.11)+ 0.03 0.07 (0.06) (0.18) (0.27)
Portfolio turnover 26 78 76 55 77 68
Net assets at end of period
(000,000 Omitted) $365 $424 $529 $546 $931 $1,269
- ------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 12/31
ENDED ----------------------------------------------------------------------
CLASS I 6/30/05= 2004= 2003 2002 2001 2000
(UNAUDITED)
Net asset value, beginning
of period $17.04 $15.48 $12.82 $16.58 $20.03 $20.97
- ------------------------------------------------------------------------------------------------------------------------------
INCOME FROM
INVESTMENT OPERATIONS#
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income $0.07 $0.16 $0.15 $0.13 $0.14 $0.15
Net realized and unrealized gain
(loss) on investments and foreign
currency (0.12) 1.66 2.71 (3.70) (3.33) (0.16)
- ------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $(0.05) $1.82 $2.86 $(3.57) $(3.19) $(0.01)
- ------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
- ------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.07) $(0.26) $(0.20) $(0.19) $(0.12) $(0.11)
From net realized gain on
investments and foreign currency
transactions -- -- -- -- (0.14) (0.82)
- ------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to
shareholders $(0.07) $(0.26) $(0.20) $(0.19) $(0.26) $(0.93)
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $16.92 $17.04 $15.48 $12.82 $16.58 $20.03
- ------------------------------------------------------------------------------------------------------------------------------
Total return (%)(+)& (0.29)++*** 11.86+*** 22.52 (21.66) (15.99) 0.01
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- ------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions## 0.61+ 0.57 0.59 0.57 0.56 0.52
Expenses after expense reductions## 0.61+ 0.57 0.59 0.57 0.56 0.52
Net investment income 0.89+ 1.03 1.07 0.93 0.78 0.73
Portfolio turnover 26 78 76 55 77 68
Net assets at end of period
(000,000 Omitted) $113 $122 $108 $104 $72 $199
- ------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 12/31
ENDED -------------------------------
CLASS R (FORMERLY CLASS R1) 6/30/05= 2004= 2003
(UNAUDITED)
Net asset value, beginning of period $17.08 $15.54 $12.87
- --------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#
- --------------------------------------------------------------------------------------------------------------------
Net investment income $0.03 $0.09 $0.09
Net realized and unrealized gain (loss) on investments
and foreign currency (0.13) 1.65 2.74
- --------------------------------------------------------------------------------------------------------------------
Total from investment operations $(0.10) $1.74 $2.83
- --------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------------------------
From net investment income $(0.04) $(0.20) $(0.16)
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $16.94 $17.08 $15.54
- --------------------------------------------------------------------------------------------------------------------
Total return (%)(+)& (0.60)++*** 11.30+*** 22.14
- --------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND SUPPLEMENTAL DATA:
- --------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions## 1.11+ 1.07 1.07
Expenses after expense reductions## 1.11+ 1.07 1.07
Net investment income 0.40+ 0.55 0.60
Portfolio turnover 26 78 76
Net assets at end of period (000 Omitted) $20,172 $11,704 $1,510
- --------------------------------------------------------------------------------------------------------------------
PERIOD ENDED
CLASS R1 6/30/05**=
(UNAUDITED)
Net asset value, beginning of period $16.63
- --------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#
- --------------------------------------------------------------------------------------------------------------------
Net investment loss $(0.02)
Net realized and unrealized gain (loss) on investments and
foreign currency 0.14^
- --------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.12
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $16.75
- --------------------------------------------------------------------------------------------------------------------
Total return (%)***(+)& 0.72++
- --------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND SUPPLEMENTAL DATA:
- --------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions## 1.82+
Expenses after expense reductions## 1.82+
Net investment loss (0.44)+
Portfolio turnover 26
Net assets at end of period (000 Omitted) $89
- --------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
PERIOD ENDED
CLASS R2 6/30/05**=
(UNAUDITED)
Net asset value, beginning of period $16.63
- ---------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#
- ---------------------------------------------------------------------------------------------------------------
Net investment loss $(0.00)+++
Net realized and unrealized gain (loss) on investments and
foreign currency 0.13^
- ---------------------------------------------------------------------------------------------------------------
Total from investment operations $0.13
- ---------------------------------------------------------------------------------------------------------------
Net asset value, end of period $16.76
- ---------------------------------------------------------------------------------------------------------------
Total return (%)***(+)& 0.78++
- ---------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------------
Expenses before expense reductions## 1.51+
Expenses after expense reductions## 1.51+
Net investment loss (0.02)+
Portfolio turnover 26
Net assets at end of period (000 Omitted) $51
- ---------------------------------------------------------------------------------------------------------------
SIX MONTHS YEAR PERIOD
ENDED ENDED ENDED
CLASS R3 (FORMERLY CLASS R2) 6/30/05= 12/31/04= 12/31/03**
(UNAUDITED)
Net asset value, beginning of period $16.97 $15.48 $14.69
- ---------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#
- ---------------------------------------------------------------------------------------------------------------
Net investment income $0.01 $0.04 $0.01
Net realized and unrealized gain (loss) on
investments and foreign currency (0.12) 1.65 0.90
- ---------------------------------------------------------------------------------------------------------------
Total from investment operations $(0.11) $1.69 $0.91
- ---------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------------
From net investment income $(0.05) $(0.20) $(0.12)
- ---------------------------------------------------------------------------------------------------------------
Net asset value, end of period $16.81 $16.97 $15.48
- ---------------------------------------------------------------------------------------------------------------
Total return (%)(+)& (0.67)++*** 11.03+*** 6.23++
- ---------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------------
Expenses before expense reductions## 1.37+ 1.31 1.05+
Expenses after expense reductions## 1.37+ 1.31 1.05+
Net investment income 0.15+ 0.28 0.63+
Portfolio turnover 26 78 76
Net assets at end of period (000 Omitted) $3,133 $1,783 $174
- ---------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
PERIOD ENDED
CLASS R4 6/30/05**=
(UNAUDITED)
Net asset value, beginning of period $17.01
- ----------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#
- ----------------------------------------------------------------------------------------------------------------
Net investment income $0.02
Net realized and unrealized gain (loss) on investments and
foreign currency 0.14^
- ----------------------------------------------------------------------------------------------------------------
Total from investment operations $0.16
- ----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $17.17
- ----------------------------------------------------------------------------------------------------------------
Total return (%)***(+)& 0.94++
- ----------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------------------------------
Expenses before expense reductions## 1.01+
Expenses after expense reductions## 1.01+
Net investment income 0.48+
Portfolio turnover 26
Net assets at end of period (000 Omitted) $50
- ----------------------------------------------------------------------------------------------------------------
PERIOD ENDED
CLASS R5 6/30/05**=
(UNAUDITED)
Net asset value, beginning of period $17.01
- ----------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#
- ----------------------------------------------------------------------------------------------------------------
Net investment income $0.03
Net realized and unrealized gain (loss) on investments and
foreign currency 0.14^
- ----------------------------------------------------------------------------------------------------------------
Total from investment operations $0.17
- ----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $17.18
- ----------------------------------------------------------------------------------------------------------------
Total return (%)***(+)& 1.00++
- ----------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------------------------------
Expenses before expense reductions## 0.71+
Expenses after expense reductions## 0.71+
Net investment income 0.78
Portfolio turnover 26
Net assets at end of period (000 Omitted) $51
- ----------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 12/31 PERIOD
ENDED -------------------------------- ENDED
CLASS 529A 6/30/05= 2004= 2003 12/31/02**
(UNAUDITED)
Net asset value, beginning of period $17.05 $15.46 $12.82 $13.24
- ---------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#
- ---------------------------------------------------------------------------------------------------------------------------
Net investment income $0.02 $0.07 $0.07 $0.03
Net realized and unrealized gain (loss) on
investments and foreign currency (0.12) 1.65 2.71 (0.36)
- ---------------------------------------------------------------------------------------------------------------------------
Total from investment operations $(0.10) $1.72 $2.78 $(0.33)
- ---------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------------------------
From net investment income $-- $(0.13) $(0.14) $(0.09)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $16.95 $17.05 $15.46 $12.82
- ---------------------------------------------------------------------------------------------------------------------------
Total return (%)(+)& (0.59)++*** 11.20+*** 21.86^ (2.53)++
- ---------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions## 1.21+ 1.17 1.18 1.17+
Expenses after expense reductions## 1.21+ 1.17 1.18 1.17+
Net investment income 0.29+ 0.44 0.51 0.68+
Portfolio turnover 26 78 76 55
Net assets at end of period (000 Omitted) $1,178 $1,143 $702 $131
- ---------------------------------------------------------------------------------------------------------------------------
SIX MONTHS YEARS ENDED 12/31 PERIOD
ENDED ----------------------------- ENDED
CLASS 529B 6/30/05= 2004= 2003 12/31/02**
(UNAUDITED)
Net asset value, beginning of period $16.64 $15.07 $12.50 $12.92
- ---------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#
- ---------------------------------------------------------------------------------------------------------------------------
Net investment loss $(0.03) $(0.03) $(0.02) $(0.00)+++
Net realized and unrealized gain (loss) on
investments and foreign currency (0.13) 1.61 2.64 (0.35)
- ---------------------------------------------------------------------------------------------------------------------------
Total from investment operations $(0.16) $1.58 $2.62 $(0.35)
- ---------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------------------------
From net investment income $-- $(0.01) $(0.05) $(0.07)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $16.48 $16.64 $15.07 $12.50
- ---------------------------------------------------------------------------------------------------------------------------
Total return (%)(+)& (0.96)++*** 10.50+*** 21.07 (2.75)++
- ---------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions## 1.86+ 1.82 1.83 1.82+
Expenses after expense reductions## 1.86+ 1.82 1.83 1.82+
Net investment loss (0.35)+ (0.21) (0.15) (0.01)+
Portfolio turnover 26 78 76 55
Net assets at end of period (000 Omitted) $128 $132 $93 $37
- ---------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 12/31 PERIOD
ENDED -------------------------------- ENDED
CLASS 529C 6/30/05= 2004= 2003 12/31/02**
(UNAUDITED)
Net asset value, beginning of period $16.50 $14.95 $12.44 $12.86
- ---------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS#
- ---------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) $(0.03) $(0.03) $(0.02) $0.01
Net realized and unrealized gain (loss) on
investments and foreign currency (0.12) 1.60 2.63 (0.36)
- ---------------------------------------------------------------------------------------------------------------------------
Total from investment operations $(0.15) $1.57 $2.61 $(0.35)
- ---------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------------------------
From net investment income $-- $(0.02) $(0.10) $(0.07)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $16.35 $16.50 $14.95 $12.44
- ---------------------------------------------------------------------------------------------------------------------------
Total return (%)(+)& (0.91)++*** 10.55+*** 21.11 (2.78)++
- ---------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions## 1.86+ 1.82 1.83 1.82+
Expenses after expense reductions## 1.86+ 1.82 1.83 1.82+
Net investment income (loss) (0.37)+ (0.19) (0.14) 0.36+
Portfolio turnover 26 78 76 55
Net assets at end of period (000 Omitted) $683 $604 $343 $90
- ---------------------------------------------------------------------------------------------------------------------------
+ Annualized.
++ Not annualized.
+++ Per share amount was less than $0.01.
** For the period from the class' inception, July 31, 2002 (Classes 529A, 529B, and 529C), October 31, 2003 (Class R3)
and April 1, 2005 (Classes R1, R2, R4, and R5) through the stated period end.
*** Certain expenses have been reduced without which performance would have been lower.
= Redemption fees charged by the trust during this period resulted in a per share impact of less than $0.01.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
& From time to time the trust may receive proceeds from litigation settlements, without which performance would be
lower.
(+) Total returns do not include any applicable sales charges.
^ 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.
+ The trust's net asset value and total return calculation include a non-recurring accrual recorded as a result of an
administrative proceeding regarding disclosure of brokerage allocation practices in connection with fund sales. The
non-recurring accrual resulted in an increase in the net asset value of $0.01 per share based on shares outstanding on
the day the proceeds were recorded.
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 U.S.
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities,
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates. 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 as reported by an independent pricing service 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. Equity
securities traded over the counter are valued at the last sales price traded
each day as reported by an independent pricing service, or to the extent there
are no sales reported, such securities are valued on the basis of quotations
obtained from brokers and dealers. Short-term obligations with a remaining
maturity in excess of 60 days will be valued upon dealer-supplied valuations.
All other short-term obligations in the trust's portfolio are valued at
amortized cost, which approximates market value as determined by the Board of
Trustees. Money market mutual funds are valued at net asset value. 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. When pricing service information or market quotations
are not readily available, securities are priced at fair value as determined
under the direction of the Board of Trustees. For example, significant events
(such as movement in the U.S. securities market, or other regional and local
developments) may occur between the time that foreign markets close (where the
security is principally traded) and the time that the trust calculates its net
asset value (generally, the close of the NYSE) that may impact the value of
securities traded in these foreign markets. In these cases, the trust may
utilize information from an external vendor or other sources to adjust closing
market quotations of foreign equity securities to reflect what it believes to
be the fair value of the securities as of the trust's valuation time. Because
the frequency of significant events is not predictable, fair valuation of
foreign equity securities may occur on a frequent basis.
REPURCHASE AGREEMENTS - The trust may enter into repurchase agreements with
institutions that the trust's investment adviser has determined are
creditworthy. Each repurchase agreement is recorded at cost. The trust
requires that the securities collateral in a repurchase transaction be
transferred to the custodian in a manner sufficient to enable the trust to
obtain those securities in the event of a default under the repurchase
agreement. The trust monitors, on a daily basis, the value of the collateral
to ensure that its value, including accrued interest, is greater than amounts
owed to the trust under each such repurchase agreement. The trust, along with
other affiliated entities of Massachusetts Financial Services Company (MFS),
may utilize a joint trading account for the purpose of entering into one or
more repurchase agreements.
FOREIGN CURRENCY TRANSLATION - Purchases and sales of foreign investments,
income, and expenses are converted into U.S. dollars based upon currency
exchange rates prevailing on the respective dates of such transactions. 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.
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. On loans collateralized by cash, the cash collateral is invested
in a money market fund or 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.
SHORT TERM FEES - For purchases made on or after July 1, 2004 and before April
1, 2005, the trust will charge a 2% redemption fee (which is retained by the
trust) on proceeds from Class A, Class B, Class C, and Class I shares redeemed
or exchanged within 5 business days following their acquisition (either by
purchase or exchange). Effective April 1, 2005, the trust will no longer
charge a redemption fee. See the trust's prospectus for details. Any
redemption fees charged are accounted for as an addition to paid-in capital.
INVESTMENT TRANSACTIONS AND INCOME - Investment transactions are recorded on
the trade date. Interest income is recorded on the accrual basis. All premium
and discount is amortized or accreted for financial statement purposes in
accordance with U.S. generally accepted accounting principles. 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.
The trust may receive proceeds from litigation settlements involving its
portfolio holdings. Any proceeds received are reflected in realized gain/loss
in the Statement of Operations, or in unrealized gain/loss if the security is
still held by the trust.
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 six months ended June 30, 2005, the trust's custodian
fees were reduced by $141,580 under this arrangement. The trust has entered
into a commission recapture agreement, under which certain brokers will credit
the trust a portion of the commissions generated, to offset certain expenses
of the trust. For the six months ended June 30, 2005, the trust's
miscellaneous expenses were reduced by $81,255 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 foreign currency transactions, non-deductible pension expenses
and wash sales.
The tax character of distributions declared for the years ended
December 31, 2004 and December 31, 2003 was as follows:
12/31/04 12/31/03
Distributions declared from:
Ordinary income $33,933,828 $24,085,191
As of December 31, 2004, the components of distributable earnings (accumulated
losses) on a tax basis were as follows:
Undistributed ordinary income $1,853,059
Capital loss carryforward (959,132,056)
Unrealized appreciation 825,795,227
Other temporary differences (270,994)
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 on December 31, 2009, $(162,067,090)
and December 31, 2010, $(797,064,966).
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. Class J closed on June 29, 2004.
(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.
DISTRIBUTOR - MFD, a wholly owned subsidiary of MFS, as distributor, received
$93,800 and $329 for the six months ended June 30, 2005, as its portion of
the initial sales charge on sales of Class A and Class 529A shares of the
trust, respectively.
The Board of Trustees has adopted a distribution plan for certain class shares
pursuant to Rule 12b-1 of the Investment Company Act of 1940.
The trust's distribution plan provides that the trust will pay MFD for
services provided by MFD and financial intermediaries in connection with the
distribution and servicing of certain share classes. One component of the plan
is a distribution fee paid to and retained by MFD. Another component of the
plan is a service fee paid to MFD which subsequently pays a portion of this
fee to financial intermediaries that enter into sales or service agreements
with MFD, or its affiliates, based on the average daily net assets of accounts
attributable to such intermediaries.
DISTRIBUTION FEE PLAN TABLE:
TOTAL ANNUAL SERVICE FEE DISTRIBUTION
DISTRIBUTION SERVICE DISTRIBUTION EFFECTIVE RETAINED AND SERVICE
FEE RATE FEE RATE PLAN(1) RATE(2) BY MFD(3) FEE
Class A 0.10% 0.25% 0.35% 0.35% $363,883 $5,763,218
Class B 0.75% 0.25% 1.00% 1.00% 7,327 9,265,867
Class C 0.75% 0.25% 1.00% 1.00% 5,151 1,942,255
Class R 0.25% 0.25% 0.50% 0.50% -- 38,316
Class R1 0.50% 0.25% 0.75% 0.75% 92 137
Class R2 0.25% 0.25% 0.50% 0.50% 61 62
Class R3 0.25% 0.25% 0.50% 0.50% 12 6,628
Class R4 0.00% 0.25% 0.25% 0.25% 31 31
Class 529A 0.25% 0.25% 0.50% 0.35% 147 2,009
Class 529B 0.75% 0.25% 1.00% 1.00% 7 625
Class 529C 0.75% 0.25% 1.00% 1.00% 39 3,194
- ---------------------------------------------------------------------------------------------------------------------------
Total Distribution and Service Fees $17,022,342
(1) In accordance with the distribution plan for certain classes, the trust pays distribution and/or service fees up to
these annual percentage rates of each class' average daily net assets.
(2) The annual effective rates represent actual fees incurred under the distribution plan for the six months ended June
30, 2005 based on each class' average daily net assets. Payment of the 0.15% annual Class 529A distribution fee is not
yet implemented and will commence on such date as the trust's Board of Trustees may determine. Assets attributable to
Class A shares sold prior to January 2, 1991 are subject to a service fee of 0.15% annually.
(3) For the six months ended June 30, 2005, MFD retained these service fees.
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 12
months of purchase. Class B and Class 529B shares are subject to a contingent
deferred sales charge in the event of a shareholder redemption within six
years of purchase. MFD retained all contingent deferred sales charges.
Contingent deferred sales charges imposed during the six months ended
June 30, 2005, were as follows:
Class A $46,570
Class B 1,301,201
Class C1 1,189
The trust has entered into 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. The fee may only be increased with the approval
of the Board of Trustees who 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. Program manager fees for the six months ended June 30, 2005,
were as follows:
AMOUNT
Class 529A $1,435
Class 529B 156
Class 529C 799
-----------------------------------------------
Total Program Manager Fees $2,390
SHAREHOLDER SERVICING AGENT - The trust pays a portion of shareholder
servicing costs to MFSC, a wholly-owned subsidiary of MFS. MFSC receives a fee
from the trust, for its services as shareholder servicing agent, set
periodically under the supervision of the trust's Board of Trustees. For the
six months ended June 30, 2005, the fee was $3,165,659, which equated to
0.1120% annually of the trust's average daily net assets. MFSC also receives
payment from the trust for out-of-pocket and sub-accounting expenses paid by
MFSC on behalf of the trust. For the six months ended June 30, 2005, these
costs amounted to $1,339,886.
ADMINISTRATOR - MFS provides certain financial, legal, shareholder
communications, compliance, and other administrative services to certain funds
for which MFS acts as investment adviser. Under an administrative services
agreement, the funds may partially reimburse MFS the costs incurred to provide
these services, subject to review and approval by the Board of Trustees. Each
fund is allocated a portion of these administrative costs based on its size
and relative average net assets. The administrative services fee incurred for
the six months ended June 30, 2005 was equivalent to an annual effective rate
of 0.00972% of the trust's average daily net assets.
In addition to the administrative services provided by MFS to the trust as
described above, MFS is responsible for providing certain retirement plan
administration and services with respect to certain Class R shares. These
services include various administrative, recordkeeping, and communication/
educational services with respect to the retirement plans which invest in
these shares, and may be provided directly by MFS or by a third party. For the
six months ended June 30, 2005, the trust paid an annual retirement plan
administration and services fee up to the following annual percentage rates of
the trust's average daily net assets:
AMOUNT
TOTAL RETAINED
FEE RATE AMOUNT BY MFS
Class R1 0.45% $82 $63
Class R2 0.40% 50 37
Class R3 (formerly Class R2) 0.25% 3,314 2,700
Class R4 0.15% 18 18
Class R5 0.10% 12 12
- --------------------------------------------------------------------------------
Total Retirement Plan Administration and
Services Fees $3,476 $2,830
TRUSTEES' COMPENSATION - The trust pays compensation to Independent Trustees
in the form of a retainer, attendance fees, and additional compensation to
Board and Committee chairpersons. The trust does not pay compensation directly
to 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 plan for retired Independent
Trustees which resulted in a pension expense of $26,253. The trust also has an
unfunded retirement benefit deferral plan for certain current Independent
Trustees which resulted in a net decrease of $805. Both amounts are included
in Trustees compensation for the six months ended June 30, 2005.
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 funds selected
by the Trustee. Deferred amounts represent an unsecured obligation of the
trust until distributed in accordance with the Plan. Included in other assets,
and accrued expenses and other liabilities, is $75,031 of Deferred Trustees'
Compensation.
OTHER - This trust and certain other MFS funds (the funds) have entered into a
services agreement (the Agreement) which provides for payment of fees by the
funds to Tarantino LLC in return for the provision of services of an
Independent Chief Compliance Officer (ICCO) for the funds. The ICCO is an
officer of the funds and the sole member of Tarantino LLC. MFS has agreed to
reimburse the fund for a portion of the payments made by the funds to
Tarantino LLC in the amount of $13,170, which is shown as a reduction of total
expenses in the Statement of Operations. Additionally, MFS has agreed to bear
all expenses associated with office space, other administrative support, and
supplies provided to the ICCO. The funds can terminate the Agreement with
Tarantino LLC at any time under the terms of the Agreement.
The trust's investment adviser, MFS, has been the subject of an administrative
proceeding regarding disclosure of brokerage allocation practices in
connection with fund sales. On July 28, 2004, the trust accrued an estimate of
the amount to be received pursuant to this matter in the amount of $5,213,825,
which resulted in an increase in net asset value of $0.01 per share based on
the shares outstanding on the day the proceeds were recorded. The proceeds
were paid to the trust on February 16, 2005.
(4) PORTFOLIO SECURITIES
Purchases and sales of investments, other than U.S. government securities,
purchased option transactions, and short-term obligations, aggregated
$1,464,619,582 and $2,060,425,991, respectively.
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 $5,235,711,836
-------------------------------------------------------------
Gross unrealized appreciation $630,538,060
Gross unrealized depreciation (180,367,841)
-------------------------------------------------------------
Net unrealized appreciation (depreciation) $450,170,219
(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 6/30/05 Year ended 12/31/04
SHARES AMOUNT SHARES AMOUNT
CLASS A SHARES
Shares sold 12,433,933 $211,493,576 21,844,072 $346,398,917
Shares issued to shareholders in
reinvestment of distributions 61,016 1,029,331 1,449,403 23,766,744
Shares reacquired (23,864,529) (407,118,209) (61,918,700) (984,036,481)
- -----------------------------------------------------------------------------------------------------------
Net change (11,369,580) $(194,595,302) (38,625,225) $(613,870,820)
CLASS B SHARES
Shares sold 2,162,133 $36,041,086 6,460,190 $99,905,654
Shares issued to shareholders in
reinvestment of distributions 28 465 13,892 229,351
Shares reacquired (23,497,664) (391,210,131) (44,010,160) (681,053,290)
- -----------------------------------------------------------------------------------------------------------
Net change (21,335,503) $(355,168,580) (37,536,078) $(580,918,285)
CLASS C SHARES
Shares sold 412,967 $6,850,309 1,255,797 $19,302,826
Shares issued to shareholders in
reinvestment of distributions -- -- 12 170
Shares reacquired (3,738,093) (62,037,314) (10,844,423) (166,791,196)
- -----------------------------------------------------------------------------------------------------------
Net change (3,325,126) $(55,187,005) (9,588,614) $(147,488,200)
CLASS I SHARES
Shares sold 425,369 $7,151,952 2,156,261 $33,705,682
Shares issued to shareholders in
reinvestment of distributions 28,163 467,789 112,915 1,816,522
Shares reacquired (925,209) (15,571,789) (2,060,341) (32,133,198)
- -----------------------------------------------------------------------------------------------------------
Net change (471,677) $(7,952,048) 208,835 $3,389,006
Year ended 12/31/04*
SHARES AMOUNT
CLASS J SHARES
Shares sold 3,346 $51,551
Shares reacquired (104,967) (2,089,766)
- -----------------------------------------------------------------------------------------------------------
Net change (101,621) $(2,038,215)
Six months ended 6/30/05 Year ended 12/31/04
SHARES AMOUNT SHARES AMOUNT
CLASS R SHARES (FORMERLY CLASS R1)
Shares sold 685,716 $11,565,384 918,872 $14,586,845
Shares issued to shareholders in
reinvestment of distributions 1,980 32,970 5,610 91,658
Shares reacquired (182,519) (3,079,656) (336,232) (5,352,331)
- -----------------------------------------------------------------------------------------------------------
Net change 505,177 $8,518,698 588,250 $9,326,172
Period ended 6/30/05**
SHARES AMOUNT
CLASS R1 SHARES
Shares sold 7,197 $119,919
Shares reacquired (1,855) (31,259)
- -------------------------------------------------------------------------
Net change 5,342 $88,660
CLASS R2 SHARES
Shares sold 3,054 $50,798
Six months ended 6/30/05 Year ended 12/31/04
SHARES AMOUNT SHARES AMOUNT
CLASS R3 SHARES (FORMERLY CLASS R2)
Shares sold 98,548 $1,648,897 94,962 $1,543,620
Shares issued to shareholders in
reinvestment of distributions 458 7,570 543 8,796
Shares reacquired (17,705) (296,350) (1,675) (26,895)
- -----------------------------------------------------------------------------------------------------------
Net change 81,301 $1,360,117 93,830 $1,525,521
Period ended 6/30/05**
SHARES AMOUNT
CLASS R4 SHARES
Shares sold 2,939 $50,000
CLASS R5 SHARES
Shares sold 2,939 $50,000
Six months ended 6/30/05 Year ended 12/31/04
SHARES AMOUNT SHARES AMOUNT
CLASS 529A SHARES
Shares sold 3,727 $62,820 22,659 $352,319
Shares issued to shareholders in
reinvestment of distributions -- -- 501 8,137
Shares reacquired (1,242) (20,805) (1,541) (24,074)
- -----------------------------------------------------------------------------------------------------------
Net change 2,485 $42,015 21,619 $336,382
CLASS 529B SHARES
Shares sold 2,151 $35,162 2,293 $35,027
Shares issued to shareholders in
reinvestment of distributions -- -- 5 96
Shares reacquired (2,296) (37,702) (538) (8,291)
- -----------------------------------------------------------------------------------------------------------
Net change (145) $(2,540) 1,760 $26,832
CLASS 529C SHARES
Shares sold 5,696 $94,169 14,978 $224,318
Shares issued to shareholders in
reinvestment of distributions -- -- 50 786
Shares reacquired (506) (8,256) (1,391) (20,702)
- -----------------------------------------------------------------------------------------------------------
Net change 5,190 $85,913 13,637 $204,402
* Class J shares closed on June 29, 2004.
** For the period from the inception of Class R1, R2, R4 and R5 shares, April 1, 2005, through
June 30, 2005.
(6) LINE OF CREDIT
The trust and other affiliated funds participate in a $1 billion unsecured
line of credit provided by a syndication of banks under a credit agreement.
Borrowings may be made for temporary financing needs. Interest is charged to
each fund, based on its borrowings, at a rate equal to the Federal Reserve
funds rate plus 0.35%. In addition, a commitment fee, based on the average
daily, unused portion of the line of credit, is allocated among the
participating funds at the end of each calendar quarter. The commitment fee
allocated to the trust for the six months ended June 30, 2005 was $11,865, and
is included in miscellaneous expense. The trust had no significant borrowings
during the six months ended June 30, 2005.
RESULTS OF SHAREHOLDER MEETING (unaudited) - 6/30/05
At a special meeting of shareholders of Massachusetts Investors Trust, which
was held on March 23, 2005, the following actions were taken:
ITEM 1. To elect a Board of Trustees:
NUMBER OF DOLLARS
-------------------------------------------
NOMINEE AFFIRMATIVE WITHHOLD AUTHORITY
Lawrence H. Cohn $3,672,368,402.88 $99,311,229.24
- ----------------------------------------------------------------------------
David H. Gunning 3,679,496,406.41 92,183,225.71
- ----------------------------------------------------------------------------
William R. Gutow 3,674,049,148.17 97,630,483.95
- ----------------------------------------------------------------------------
Michael Hegarty 3,681,819,731.28 89,859,900.84
- ----------------------------------------------------------------------------
J. Atwood Ives 3,677,976,197.87 93,703,434.25
- ----------------------------------------------------------------------------
Amy B. Lane 3,676,826,237.85 94,853,394.27
- ----------------------------------------------------------------------------
Robert J. Manning 3,678,736,831.91 92,942,800.21
- ----------------------------------------------------------------------------
Lawrence T. Perera 3,677,957,727.25 93,721,904.87
- ----------------------------------------------------------------------------
Robert C. Pozen 3,684,046,628.41 87,633,003.71
- ----------------------------------------------------------------------------
J. Dale Sherratt 3,676,937,440.08 94,742,192.04
- ----------------------------------------------------------------------------
Laurie J. Thomsen 3,676,173,327.34 95,506,304.78
- ----------------------------------------------------------------------------
BOARD REVIEW OF INVESTMENT ADVISORY AGREEMENT
A discussion regarding the Board's most review and renewal of the fund's
Investment Agreement with MFS will be available on or before December 1, 2005
by clicking on the fund's name under "Select a fund" on the MFS website
(mfs.com).
PROXY VOTING POLICIES AND INFORMATION
A general description of the MFS funds' proxy voting policies and procedures is
available without charge, upon request, by calling 1-800-225-2606, by visiting
the Proxy Voting section of mfs.com or by visiting the SEC's Website at
http://www.sec.gov.
Information regarding how the trust voted proxies relating to portfolio
securities during the most recent twelve-month period ended June 30 is
available without charge by visiting the Proxy Voting section of mfs.com or by
visiting the SEC's Website at http://www.sec.gov.
QUARTERLY PORTFOLIO DISCLOSURE
The trust will file a complete schedule of portfolio holdings with the
Securities and Exchange Commission (the Commission) for the first and third
quarters of each fiscal year on Form N-Q. The trust's Form N-Q may be reviewed
and copied at the:
Public Reference Room
Securities and Exchange Commission
Washington, D.C. 20549-0102
Information on the operation of the Public Reference Room may be obtained by
calling the Commission at 1-800-SEC-0330. The trust's Form N-Q is available on
the EDGAR database on the Commission's Internet website at http://www.sec.gov,
and copies of this information may be obtained, upon payment of a duplicating
fee, by electronic request at the following e-mail address: publicinfo@sec.gov
or by writing the Public Reference Section at the above address.
A shareholder can also obtain the quarterly portfolio holdings report at
mfs.com.
CONTACT INFORMATION
INVESTOR SERVICE
Write to us at: MFS Service Center, Inc.
P.O. Box 55824
Boston, MA 02205-5824
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
- --------------------------------------------------------------------------------
Share prices, account 1-800-MFS-TALK
balances exchanges (1-800-637-8255) 24 hours a day, 365 days a
or stock and bond outlooks touch-tone required year
- --------------------------------------------------------------------------------
M F S(SM)
INVESTMENT MANAGEMENT(R)
(C) 2005 MFS Investment Management(R)
MFS(R) investment products are offered through MFS Fund Distributors, Inc.,
500 Boylston Street, Boston, MA 02116.
MIT-SEM-8/05 423M
ITEM 2. CODE OF ETHICS.
The Registrant has amended its Code of Ethics to reflect that the Registrant's
Principal Financial Officer has changed.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable for semi-annual reports.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable for semi-annual reports.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to the Registrant.
ITEM 6. SCHEDULE OF INVESTMENTS
A schedule of investments for each series of the Registrant is included as part
of the report to shareholders of such series under Item 1 of this Form N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the Registrant.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the Registrant.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable to the Registrant.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There were no material changes to the procedures by which shareholders may send
recommendations to the Board for nominees to the Registrant's Board since the
Registrant last provided disclosure as to such procedures in response to the
requirements of Item 7(d)(2)(ii)(G) of Schedule 14A or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Based upon their evaluation of the registrant's disclosure controls and
procedures (as defined in Rule 30a-3(c) under the Act) 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 changes in the registrant's internal controls over financial
reporting (as defined in Rule 30a-3(d) under the Act) that occurred during
the second fiscal quarter covered by the report that has materially
affected, or is reasonably likely to materially affect, the registrant's
internal control over financial reporting.
ITEM 12. EXHIBITS.
(a) File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(1) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant
intends to satisfy the Item 2 requirements through filing of an
exhibit: Code of Ethics attached hereto.
(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2
under the Act (17 CFR 270.30a-2): Attached hereto.
(b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act,
provide the certifications required by Rule 30a-2(b) under the Act (17 CFR
270.30a-2(b)), Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17
CFR 240.13a-14(b) or 240.15d-14(b)) and Section 1350 of Chapter 63 of
Title 18 of the United States Code (18 U.S.C. 1350) as an exhibit. A
certification furnished pursuant to this paragraph will not be deemed
"filed" for the purposes of Section 18 of the Exchange Act (15 U.S.C.
78r), or otherwise subject to the liability of that section. Such
certification will not be deemed to be incorporated by reference into any
filing under the Securities Act of 1933 or the Exchange Act, except to the
extent that the registrant specifically incorporates it by reference:
Attached hereto.
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)* ROBERT J. MANNING
-----------------------------------------------------
Robert J. Manning, President
Date: August 23, 2005
---------------
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)* ROBERT J. MANNING
-----------------------------------------------------
Robert J. Manning, President (Principal Executive
Officer)
Date: August 23, 2005
---------------
By (Signature and Title)* MARIA F. DWYER
-----------------------------------------------------
Maria F. Dwyer, Treasurer (Principal Financial Officer
and Accounting Officer)
Date: August 23, 2005
---------------
* Print name and title of each signing officer under his or her signature.