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 811-859
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MASSACHUSETTS INVESTORS GROWTH STOCK FUND
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(Exact name of registrant as specified in charter)
500 Boylston Street, Boston, Massachusetts 02116
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(Address of principal executive offices) (Zip code)
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: November 30
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Date of reporting period: November 30, 2005
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ITEM 1. REPORTS TO STOCKHOLDERS.
MASSACHUSETTS INVESTORS GROWTH 11/30/05
STOCK FUND
ANNUAL REPORT
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LETTER FROM THE CEO 1
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PORTFOLIO COMPOSITION 2
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MANAGEMENT REVIEW 3
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PERFORMANCE SUMMARY 5
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EXPENSE TABLE 9
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PORTFOLIO OF INVESTMENTS 11
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FINANCIAL STATEMENTS 17
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NOTES TO FINANCIAL STATEMENTS 31
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REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM 41
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TRUSTEES AND OFFICERS 42
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BOARD REVIEW OF INVESTMENT ADVISORY AGREEMENT 47
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PROXY VOTING POLICIES AND INFORMATION 51
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QUARTERLY PORTFOLIO DISCLOSURE 51
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FEDERAL TAX INFORMATION 51
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CONTACT INFORMATION BACK COVER
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THE REPORT IS PREPARED FOR THE GENERAL INFORMATION OF
SHAREHOLDERS. IT IS INTENDED FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS ONLY WHEN PRECEDED OR
ACCOMPANIED BY A CURRENT PROSPECTUS.
M F S(SM)
INVESTMENT MANAGEMENT(R)
LETTER FROM THE CEO
[Photo of Robert J. Manning]
Dear Shareholders,
Most investors are familiar with the basic principles of investing - focus on
the long term and keep your assets diversified across different investment
categories. Still, it is surprising how often we forget these basic lessons.
Certainly, the dot-com euphoria that overtook Wall Street in the late 1990s had
many people hoping they could become millionaires overnight. But the market
decline that started in the spring of 2000 taught everyone how misguided those
hopes had been.
Now, less than five years after the market taught a harsh lesson in the follies
of speculative investing, we are seeing a number of trends that suggest many
investors, including professionals, are hoping for overnight miracles again. We
see a steady stream of market "gurus" on television news shows, promising to
teach amateur investors the strategies that will allow them to get rich quick.
Hedge funds - which by their nature move in and out of investments rapidly -
have soared in popularity over the past five years. We are reminded every day
that we live in a "what have you done for me lately?" world, but this mindset
should not influence how we invest and manage our money. In fact, investors
often fall short of their goals because they trade in and out of investments too
frequently and at inopportune times.
Throughout our entire 80-year history, MFS' money management process has focused
on long-term investment opportunities. We firmly believe that one of the best
ways to realize long-term financial goals - be it a college education, a
comfortable retirement, or a secure family legacy - is to follow a three-pronged
approach that focuses on longer time horizons. Allocate holdings across the
major asset classes - including stocks, bonds, and cash. Diversify within each
class to take advantage of different market segments and investing styles. And
rebalance assets regularly to maintain a desired asset allocation.*
This long-term approach requires diligence and patience, two traits that in our
experience are essential to capitalizing on the many opportunities the financial
markets can offer.
Respectfully,
/s/ Robert J. Manning
Robert J. Manning
Chief Executive Officer and Chief Investment Officer
MFS Investment Management(R)
January 17, 2006
* Asset allocation, diversification, and rebalancing does not guarantee a
profit or protect against a loss. The opinions expressed in this letter are
those of MFS, and no forecasts can be guaranteed.
PORTFOLIO COMPOSITION
PORTFOLIO STRUCTURE
Stocks 96.2%
Cash & Other Net Assets 3.8%
TOP TEN HOLDINGS
Cisco Systems, Inc. 3.3%
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Johnson & Johnson 3.1%
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Wyeth 2.3%
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Intel Corp. 2.3%
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Microsoft Corp. 2.2%
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QUALCOMM, Inc. 2.1%
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Wal-Mart Stores, Inc. 2.0%
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Eli Lilly & Co. 2.0%
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Oracle Corp. 2.0%
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Amgen, Inc. 1.7%
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SECTOR WEIGHTINGS
Technology 29.4%
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Health Care 21.7%
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Retailing 8.9%
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Financial Services 7.4%
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Leisure 5.8%
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Industrial Goods & Services 5.6%
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Special Products & Services 3.8%
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Consumer Staples 3.5%
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Energy 3.4%
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Basic Materials 3.1%
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Transportation 1.8%
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Autos & Housing 0.9%
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Utilities & Communications 0.9%
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Percentages are based on net assets as of 11/30/05.
The portfolio is actively managed, and current holdings may be different.
MANAGEMENT REVIEW
SUMMARY OF RESULTS
For the twelve months ended November 30, 2005, Class A shares of the
Massachusetts Investors Growth Stock Fund provided a total return of 7.93%, at
net asset value. In comparison, the fund's benchmark, the Russell 1000 Growth
Index, returned 9.73%.
DETRACTORS FROM PERFORMANCE
Stock selection in the technology sector held back performance relative to the
Russell 1000 Growth Index. Poor-performing security software company Symantec,
test and measurement software company Mercury Interactive*, programmable logic
solution provider Xilinx, computer maker Dell, and network equipment company
Cisco Systems were among the fund's top detractors for the period. Our
underweighted position in Intel, which outperformed the benchmark, also hurt
results.
In the industrial goods and services sector, stock selection detracted from
relative performance. Manufacturing conglomerate Tyco International, which is
not an index constituent, was among the top detractors.
Although health care was one of the fund's top contributing sectors overall, our
underweighted position in UnitedHealth Group, which performed well over the
period, and our overweighting in poor-performing Eli Lilly dampened investment
results.
During the reporting period, our currency exposure detracted from the
portfolio's relative performance. All of MFS' investment decisions are driven by
the fundamentals of each individual opportunity and, as such, it is common for
our portfolios to have different currency exposure than the benchmark.
The fund's cash position was also a detractor from relative performance. As with
nearly all mutual funds, this portfolio holds cash to buy new holdings and to
provide liquidity. In a period when equity markets rose as measured by the
fund's benchmark, holding cash hurt performance versus the benchmark, which has
no cash position.
CONTRIBUTORS TO PERFORMANCE
Relative to the fund's benchmark, health care, financial services, and basic
materials were the fund's strongest contributing sectors over the period. In all
three sectors, stock selection was the key contributor to relative performance.
In health care, top performing holdings included biotechnology companies Amgen,
Gilead Sciences, and Genzyme. Our positioning in two health care companies that
are not benchmark constituents, Swiss pharmaceutical company Roche Holding and
generic drug manufacturer Teva Pharmaceutical, also boosted relative results as
both companies outperformed the index over the period.
Although strong relative results in the financial services sector came primarily
from stock selection, no individual stocks within the sector were among the
fund's top contributors for the period. Our underweighted position also aided
performance as the sector underperformed the overall benchmark.
In basic materials, our positioning in agrichemical products company Monsanto
benefited relative results. Stocks in other sectors that helped the fund's
performance included fiber-optic cable manufacturer Corning, wireless
communications company QUALCOMM, and drugstore retailer CVS. Strong-performing
Latin American wireless communications company America Movil, which is not an
index constituent, was also among the fund's strongest relative contributors.
Respectfully,
S. Irfan Ali Stephen Pesek Gregory Locraft
Portfolio Manager Portfolio Manager Portfolio Manager
Note to Shareholders: Effective December 6, 2005, Maureen Pettirossi become
co-manager of the fund with S. Irfan Ali and Stephen Pesek. She replaced
Gregory Locraft.
*Security was not held in the portfolio at period-end.
The views expressed in this report are those of the portfolio managers only
through the end of the period of the report as stated on the cover and do not
necessarily reflect the views of MFS or any other person in the MFS
organization. These views are subject to change at any time based on market and
other conditions, and MFS disclaims any responsibility to update such views.
These views may not be relied upon as investment advice or an indication of
trading intent on behalf of any MFS Fund. References to specific securities are
not recommendations of such securities, and may not be representative of any MFS
Fund's current or future investments.
PERFORMANCE SUMMARY THROUGH 11/30/05
The following chart illustrates the historical performance of the fund's
original share class in comparison to its benchmark. Performance results include
the deduction of the maximum applicable sales charge and reflect the percentage
change in net asset value, including reinvestment of dividends and capital gains
distributions. Benchmark comparisons are unmanaged and do not reflect any fees
or expenses. The performance of other share classes will be greater than or less
than the line shown. (See Notes to Performance Summary.)
PERFORMANCE DATA SHOWN REPRESENTS PAST PERFORMANCE AND IS NO GUARANTEE OF FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE FLUCTUATE SO YOUR SHARES, WHEN
SOLD, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST; CURRENT PERFORMANCE MAY
BE LOWER OR HIGHER THAN QUOTED. FOR MOST RECENT MONTH-END PERFORMANCE, PLEASE
VISIT MFS.COM. (FOR THE MOST RECENT MONTH-END PERFORMANCE FOR CLASS I SHARES
CALL 1-888-808-6374. MOST RECENT MONTH-END PERFORMANCE FOR J SHARES CAN BE
OBTAINED BY CALLING EITHER MIZUHO INVESTORS SECURITIES AT 0120-555-324 OR
MITSUBISHI SECURITIES AT 0120-17-3234.) THE PERFORMANCE SHOWN DOES NOT REFLECT
THE DEDUCTION OF TAXES, IF ANY, THAT A SHAREHOLDER WOULD PAY ON FUND
DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES.
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
Massachusetts Russell
Investors Growth 1000
Stock Fund Growth
- Class A Index
- ----------------------------------------------------
11/95 $ 9,425 $10,000
11/96 11,675 12,630
11/97 16,685 15,979
11/98 21,731 20,559
11/99 28,525 27,033
11/00 29,674 23,908
11/01 22,494 18,458
11/02 17,635 14,272
11/03 19,473 16,663
11/04 20,992 17,633
11/05 22,656 19,350
TOTAL RETURNS THROUGH 11/30/05
AVERAGE ANNUAL WITHOUT SALES CHARGE
Share class Class inception date 1-yr 5-yr 10-yr
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A 1/01/35 7.93% -5.25% 9.17%
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B 9/07/93 7.35% -5.85% 8.43%
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C 11/03/97 7.29% -5.87% 8.42%
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I 1/02/97 8.38% -4.91% 9.50%
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J 12/18/00 7.34% -5.86% 8.42%
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R 12/31/02 7.89% -5.28% 9.15%
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R1 4/01/05 7.17% -5.89% 8.41%
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R2 4/01/05 7.44% -5.84% 8.44%
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R3 10/31/03 7.64% -5.75% 8.49%
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R4 4/01/05 7.93% -5.25% 9.17%
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R5 4/01/05 8.18% -5.21% 9.19%
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529A 7/31/02 7.77% -5.43% 9.07%
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529B 7/31/02 7.02% -6.00% 8.34%
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529C 7/31/02 7.05% -6.00% 8.35%
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AVERAGE ANNUAL
Comparative benchmarks
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Average large-cap growth fund(+) 10.30% -3.90% 6.63%
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Russell 1000 Growth Index# 9.73% -4.14% 6.82%
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AVERAGE ANNUAL WITH SALES CHARGE
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A 1.72% -6.37% 8.52%
With Initial Sales Charge (5.75%)
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B 3.35% -6.20% 8.43%
With CDSC (Declining over six years from 4% to 0%)
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C 6.29% -5.87% 8.42%
With CDSC (1% for 12 months)+
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J 3.04% -6.63% 7.98%
Maximum sales charge (4.00%)
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529A 1.57% -6.54% 8.42%
With initial sales charge (5.75%)
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529B 3.02% -6.34% 8.34%
With CDSC (Declining over six years from 4% to 0%)
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529C 6.05% -6.00% 8.35%
With CDSC (1% for 12 months)+
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Class I, R, R1, R2, R3, R4, and R5 shares do not have a sales charge. Please see
Notes to Performance Summary for more details. CDSC - Contingent Deferred Sales
Charge.
+ Assuming redemption within one year from the end of the prior month of
purchase.
(+) Source: Lipper Inc., an independent firm that reports mutual fund
performance.
# Source: Standard & Poor's Micropal, Inc.
INDEX DEFINITION
Russell 1000 Growth Index - is constructed to provide a comprehensive barometer
for growth securities in the large-cap segment of the U.S. equity universe.
Companies in this index generally have higher price-to-book ratios and higher
forecasted growth values.
It is not possible to invest directly in an index.
NOTES TO PERFORMANCE SUMMARY
Class J sharesresults reflect the deduction of the maximum 4% sales charge and
are available only to residents of Japan. Class R shares have no initial sales
charge or CDSC and are available only to Class R existing shareholders. Class I,
R1, R2, R3, R4, and R5 shares have no initial sales charge or CDSC. Class I
shares are only available to certain eligible investors, and Class R1, R2, R3,
R4, and R5 shares are only available to certain retirement plans. Class 529
shares are only available in conjunction with qualified tuition programs, such
as the MFS 529 Savings Plan. There also is an additional annual fee, which is
detailed in the program description, on qualified tuition programs. If this fee
was reflected, the performance for Class 529 shares would have been lower. This
annual fee is waived for Oregon residents and for those accounts with assets of
$25,000 or more.
Performance for Classes I, R, R4, R5, and 529A shares includes the performance
of the fund's Class A shares for periods prior to their offering. Performance
for Classes C, J, R1, R2, R3, 529B and 529C shares includes the performance of
the fund's Class B shares for periods prior to their offering. This blended
class performance has been adjusted to take into account differences in sales
loads, if any, applicable to these share classes, but has not been adjusted to
take into account differences in class specific operating expenses (such as Rule
12b-1 fees). Compared to performance these share classes would have experienced
had they been offered for the entire period, the use of blended performance
generally results in higher performance for share classes with higher operating
expenses than the share class to which it is blended, and lower performance for
share classes with lower operating expenses than the share class to which it is
blended.
Performance results reflect any applicable expense subsidies and waivers in
effect during the periods shown. Without such subsidies and waivers the fund's
performance results would be less favorable. Please see the prospectus and
financial statements for complete details.
From time to time the fund may receive proceeds from litigation settlements,
without which performance would be lower.
EXPENSE TABLE
FUND EXPENSES BORNE BY THE SHAREHOLDERS DURING THE PERIOD, JUNE 1, 2005 THROUGH
NOVEMBER 30, 2005.
As a shareholder of the fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on certain purchase or redemption
payments and redemption fees on certain exchanges and redemptions, and (2)
ongoing costs, including management fees; distribution and service (12b-1) fees;
and other fund expenses. This example is intended to help you understand your
ongoing costs (in dollars) of investing in the fund and to compare these costs
with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period June 1, 2005 through November 30, 2005.
ACTUAL EXPENSES
The first line for each share class in the following table provides information
about actual account values and actual expenses. You may use the information in
this line, together with the amount you invested, to estimate the expenses that
you paid over the period. Simply divide your account value by $1,000 (for
example, an $8,600 account value divided by $1,000 = 8.6), then multiply the
result by the number in the first line under the heading entitled "Expenses Paid
During Period" to estimate the expenses you paid on your account during this
period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line for each share class in the following table provides information
about hypothetical account values and hypothetical expenses based on the fund's
actual expense ratio and an assumed rate of return of 5% per year before
expenses, which is not the fund's actual return. The hypothetical account values
and expenses may not be used to estimate the actual ending account balance or
expenses you paid for the period. You may use this information to compare the
ongoing costs of investing in the fund and other funds. To do so, compare this
5% hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads) 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.
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Ending Expenses
Annualized Beginning Account Paid During
Share Expense Account Value Value Period**
Class Ratio 6/01/05 11/30/05 6/01/05-11/30/05
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Actual 1.01% $1,000.00 $1,054.50 $5.20
A -------------------------------------------------------------------------
Hypothetical* 1.01% $1,000.00 $1,020.00 $5.11
- ------------------------------------------------------------------------------
Actual 1.66% $1,000.00 $1,052.30 $8.54
B -------------------------------------------------------------------------
Hypothetical* 1.66% $1,000.00 $1,016.75 $8.39
- ------------------------------------------------------------------------------
Actual 1.68% $1,000.00 $1,051.60 $8.64
C -------------------------------------------------------------------------
Hypothetical* 1.68% $1,000.00 $1,016.65 $8.49
- ------------------------------------------------------------------------------
Actual 0.58% $1,000.00 $1,057.00 $2.99
I -------------------------------------------------------------------------
Hypothetical* 0.58% $1,000.00 $1,022.16 $2.94
- ------------------------------------------------------------------------------
Actual 1.68% $1,000.00 $1,051.90 $8.64
J -------------------------------------------------------------------------
Hypothetical* 1.68% $1,000.00 $1,016.65 $8.49
- ------------------------------------------------------------------------------
Actual 1.16% $1,000.00 $1,054.50 $5.97
R -------------------------------------------------------------------------
Hypothetical* 1.16% $1,000.00 $1,019.25 $5.87
- ------------------------------------------------------------------------------
Actual 1.76% $1,000.00 $1,050.50 $9.05
R1 -------------------------------------------------------------------------
Hypothetical* 1.76% $1,000.00 $1,016.24 $8.90
- ------------------------------------------------------------------------------
Actual 1.46% $1,000.00 $1,052.20 $7.51
R2 -------------------------------------------------------------------------
Hypothetical* 1.46% $1,000.00 $1,017.75 $7.38
- ------------------------------------------------------------------------------
Actual 1.34% $1,000.00 $1,053.30 $6.90
R3 -------------------------------------------------------------------------
Hypothetical* 1.34% $1,000.00 $1,018.35 $6.78
- ------------------------------------------------------------------------------
Actual 1.01% $1,000.00 $1,054.50 $5.20
R4 -------------------------------------------------------------------------
Hypothetical* 1.01% $1,000.00 $1,020.00 $5.11
- ------------------------------------------------------------------------------
Actual 0.67% $1,000.00 $1,056.10 $3.45
R5 -------------------------------------------------------------------------
Hypothetical* 0.67% $1,000.00 $1,021.71 $3.40
- ------------------------------------------------------------------------------
Actual 1.26% $1,000.00 $1,054.10 $6.49
529A -------------------------------------------------------------------------
Hypothetical* 1.26% $1,000.00 $1,018.75 $6.38
- ------------------------------------------------------------------------------
Actual 1.91% $1,000.00 $1,050.80 $9.82
529B -------------------------------------------------------------------------
Hypothetical* 1.91% $1,000.00 $1,015.49 $9.65
- ------------------------------------------------------------------------------
Actual 1.91% $1,000.00 $1,051.00 $9.82
529C -------------------------------------------------------------------------
Hypothetical* 1.91% $1,000.00 $1,015.49 $9.65
- ------------------------------------------------------------------------------
* 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.
Effective October 1, 2005 the fund's Class R1, Class R2, and Class R3 retirement
plan administration and services fee was reduced (as described in Note 3 of the
Notes to Financial Statements). Had this fee reduction been in effect throughout
the entire six month period, the annualized expense ratio would have been 1.69%,
1.36%, 1.27% for Class R1, Class R2 and Class R3, respectively, and the actual
expenses paid during the period would have been $8.69, $7.00, and $6.54 for
Class R1, Class R2, and Class R3, respectively.
PORTFOLIO OF INVESTMENTS - 11/30/05
The Portfolio of Investments is a complete list of all securities owned by your
fund. It is categorized by broad-based asset classes.
Stocks - 96.2%
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ISSUER SHARES/PAR $ VALUE
- ------------------------------------------------------------------------------------------------------
Aerospace - 1.9%
- ------------------------------------------------------------------------------------------------------
Lockheed Martin Corp.^ 622,200 $ 37,705,320
Northrop Grumman Corp. 360,440 20,678,443
United Technologies Corp. 1,647,560 88,704,626
---------------
$ 147,088,389
- ------------------------------------------------------------------------------------------------------
Apparel Manufacturers - 0.7%
- ------------------------------------------------------------------------------------------------------
Nike, Inc., "B" 618,190 $ 52,731,607
- ------------------------------------------------------------------------------------------------------
Automotive - 0.2%
- ------------------------------------------------------------------------------------------------------
Harley-Davidson, Inc.^ 323,190 $ 17,407,013
- ------------------------------------------------------------------------------------------------------
Banks & Credit Companies - 2.8%
- ------------------------------------------------------------------------------------------------------
American Express Co. 1,455,730 $ 74,853,637
SLM Corp. 1,686,380 88,619,269
UBS AG 406,470 37,296,129
UBS AG^ 27,670 2,543,426
Unibanco - Uniao de Bancos Brasileiros S.A., ADR^ 124,710 7,712,066
---------------
$ 211,024,527
- ------------------------------------------------------------------------------------------------------
Biotechnology - 4.3%
- ------------------------------------------------------------------------------------------------------
Amgen, Inc.* 1,638,140 $ 132,574,670
Genzyme Corp.* 1,229,940 91,433,740
Gilead Sciences, Inc.* 1,852,610 93,908,801
ImClone Systems, Inc.^* 176,300 5,713,883
---------------
$ 323,631,094
- ------------------------------------------------------------------------------------------------------
Broadcast & Cable TV - 2.0%
- ------------------------------------------------------------------------------------------------------
Citadel Broadcasting Corp.^ 389,300 $ 5,247,764
Comcast Corp., "A"* 771,730 20,373,672
EchoStar Communications Corp., "A" 447,340 11,559,266
Grupo Televisa S.A., ADR 492,830 39,130,702
Univision Communications, Inc., "A"^* 996,280 30,117,544
Viacom, Inc., "B" 922,070 30,797,138
Walt Disney Co. 682,370 17,011,484
---------------
$ 154,237,570
- ------------------------------------------------------------------------------------------------------
Brokerage & Asset Managers - 1.4%
- ------------------------------------------------------------------------------------------------------
Chicago Mercantile Exchange Holdings, Inc. 92,380 $ 32,716,377
Franklin Resources, Inc. 101,610 9,437,537
Goldman Sachs Group, Inc. 128,520 16,573,939
Legg Mason, Inc. 60,100 7,371,265
Merrill Lynch & Co., Inc. 205,350 13,639,347
Morgan Stanley 377,900 21,173,737
T. Rowe Price Group, Inc. 36,400 2,618,980
---------------
$ 103,531,182
- ------------------------------------------------------------------------------------------------------
Business Services - 3.3%
- ------------------------------------------------------------------------------------------------------
Accenture Ltd., "A" 2,705,220 $ 76,936,457
Amdocs Ltd.* 3,631,710 95,986,095
Automatic Data Processing, Inc. 155,000 7,285,000
Cintas Corp.^ 534,820 23,917,150
Getty Images, Inc.^* 213,850 19,522,367
Infosys Technologies Ltd., ADR^ 366,600 26,417,196
---------------
$ 250,064,265
- ------------------------------------------------------------------------------------------------------
Chemicals - 1.7%
- ------------------------------------------------------------------------------------------------------
3M Co. 1,145,620 $ 89,908,258
Monsanto Co. 576,400 42,232,828
---------------
$ 132,141,086
- ------------------------------------------------------------------------------------------------------
Computer Software - 6.1%
- ------------------------------------------------------------------------------------------------------
Adobe Systems, Inc. 1,689,200 $ 55,084,812
Macromedia, Inc.* 200,900 9,012,374
Microsoft Corp. 6,039,640 167,358,424
Oracle Corp.* 11,972,690 150,496,713
Symantec Corp.^* 4,721,074 83,421,378
---------------
$ 465,373,701
- ------------------------------------------------------------------------------------------------------
Computer Software - Systems - 3.1%
- ------------------------------------------------------------------------------------------------------
Apple Computer, Inc.* 572,820 $ 38,848,652
CDW Corp.^ 862,790 50,602,634
Dell, Inc.* 4,087,440 123,277,190
LG Philips LCD Co. Ltd., ADR^* 969,780 21,441,836
---------------
$ 234,170,312
- ------------------------------------------------------------------------------------------------------
Consumer Goods & Services - 1.4%
- ------------------------------------------------------------------------------------------------------
Apollo Group, Inc., "A"^* 481,590 $ 34,289,208
Colgate-Palmolive Co. 832,100 45,366,092
Procter & Gamble Co. 432,336 24,725,296
---------------
$ 104,380,596
- ------------------------------------------------------------------------------------------------------
Electrical Equipment - 2.4%
- ------------------------------------------------------------------------------------------------------
Cooper Industries Ltd., "A" 161,740 $ 11,764,968
Danaher Corp.^ 115,400 6,404,700
General Electric Co. 2,722,530 97,248,772
Tyco International Ltd. 2,358,670 67,269,268
---------------
$ 182,687,708
- ------------------------------------------------------------------------------------------------------
Electronics - 8.2%
- ------------------------------------------------------------------------------------------------------
Amphenol Corp., "A" 330,460 $ 13,803,314
Analog Devices, Inc.^ 1,264,730 47,958,562
Applied Materials, Inc. 1,246,160 22,567,958
AU Optronics Corp., ADR^ 798,844 11,543,296
Intel Corp. 6,429,090 171,528,121
KLA-Tencor Corp.^ 295,200 15,111,288
Linear Technology Corp. 195,700 7,301,567
PMC-Sierra, Inc.^* 1,241,870 9,773,517
Samsung Electronics Co. Ltd. 37,820 21,819,932
Samsung Electronics Co. Ltd., GDR 267,542 77,520,295
Samsung Electronics Co. Ltd., GDR 5,128 1,477,465
SanDisk Corp.^* 874,150 44,634,099
Taiwan Semiconductor Manufacturing Co. Ltd., ADR^ 2,879,919 27,589,624
Texas Instruments, Inc. 1,815,120 58,955,098
Xilinx, Inc. 3,301,580 87,293,775
---------------
$ 618,877,911
- ------------------------------------------------------------------------------------------------------
Energy - Independent - 0.4%
- ------------------------------------------------------------------------------------------------------
Arch Coal, Inc.^ 182,730 $ 14,077,519
Newfield Exploration Co.* 251,200 11,620,512
Peabody Energy Corp. 60,940 4,805,728
---------------
$ 30,503,759
- ------------------------------------------------------------------------------------------------------
Energy - Integrated - 0.3%
- ------------------------------------------------------------------------------------------------------
Amerada Hess Corp. 210,720 $ 25,817,414
- ------------------------------------------------------------------------------------------------------
Food & Drug Stores - 0.4%
- ------------------------------------------------------------------------------------------------------
CVS Corp. 1,254,920 $ 33,907,938
- ------------------------------------------------------------------------------------------------------
Food & Non-Alcoholic Beverages - 2.6%
- ------------------------------------------------------------------------------------------------------
Archer Daniels Midland Co.^ 152,210 $ 3,587,590
Kellogg Co. 794,200 35,000,394
Nestle S.A 93,460 27,531,568
PepsiCo, Inc. 2,167,270 128,302,384
---------------
$ 194,421,936
- ------------------------------------------------------------------------------------------------------
Furniture & Appliances - 0.7%
- ------------------------------------------------------------------------------------------------------
Harman International Industries, Inc.^ 541,440 $ 52,790,400
- ------------------------------------------------------------------------------------------------------
Gaming & Lodging - 2.3%
- ------------------------------------------------------------------------------------------------------
Carnival Corp.^ 1,801,210 $ 98,147,933
Harrah's Entertainment, Inc. 417,700 28,441,193
Las Vegas Sands Corp.^* 405,850 16,928,004
Starwood Hotels & Resorts Worldwide, Inc. 465,100 28,138,550
---------------
$ 171,655,680
- ------------------------------------------------------------------------------------------------------
General Merchandise - 4.2%
- ------------------------------------------------------------------------------------------------------
Kohl's Corp.* 2,216,800 $ 101,972,800
Target Corp. 1,181,400 63,216,714
Wal-Mart Stores, Inc. 3,136,360 152,301,642
---------------
$ 317,491,156
- ------------------------------------------------------------------------------------------------------
Health Maintenance Organizations - 1.0%
- ------------------------------------------------------------------------------------------------------
UnitedHealth Group, Inc.^ 876,100 $ 52,443,346
WellPoint, Inc.* 278,900 21,427,887
---------------
$ 73,871,233
- ------------------------------------------------------------------------------------------------------
Insurance - 3.2%
- ------------------------------------------------------------------------------------------------------
Ace Ltd. 1,331,510 $ 73,898,805
American International Group, Inc.^ 1,875,920 125,949,269
St. Paul Travelers Cos., Inc. 1,008,190 46,911,081
---------------
$ 246,759,155
- ------------------------------------------------------------------------------------------------------
Internet - 2.9%
- ------------------------------------------------------------------------------------------------------
eBay, Inc.* 403,310 $ 18,072,321
Expedia, Inc.^* 543,070 13,462,705
Google, Inc., "A"* 322,820 130,738,872
Yahoo!, Inc.^* 1,431,500 57,589,245
---------------
$ 219,863,143
- ------------------------------------------------------------------------------------------------------
Leisure & Toys - 1.3%
- ------------------------------------------------------------------------------------------------------
Electronic Arts, Inc.^* 1,734,040 $ 97,730,494
- ------------------------------------------------------------------------------------------------------
Machinery & Tools - 1.3%
- ------------------------------------------------------------------------------------------------------
Caterpillar, Inc.^ 1,108,720 $ 64,061,842
Illinois Tool Works, Inc.^ 423,710 37,400,882
---------------
$ 101,462,724
- ------------------------------------------------------------------------------------------------------
Medical & Health Technology & Services - 0.5%
- ------------------------------------------------------------------------------------------------------
Caremark Rx, Inc.* 250,810 $ 12,889,126
Community Health Systems, Inc.^* 653,030 26,179,973
---------------
$ 39,069,099
- ------------------------------------------------------------------------------------------------------
Medical Equipment - 4.7%
- ------------------------------------------------------------------------------------------------------
Advanced Medical Optics, Inc.* 758,250 $ 32,157,383
Alcon, Inc.^ 302,900 42,466,580
Boston Scientific Corp.^* 725,080 19,200,118
DENTSPLY International, Inc. 466,500 25,951,395
Medtronic, Inc. 2,254,300 125,271,451
St. Jude Medical, Inc.* 1,399,600 66,858,892
Zimmer Holdings, Inc.* 720,660 45,163,762
---------------
$ 357,069,581
- ------------------------------------------------------------------------------------------------------
Metals & Mining - 0.6%
- ------------------------------------------------------------------------------------------------------
BHP Billiton Ltd., ADR 834,240 $ 26,837,501
Companhia Vale do Rio Doce, ADR^ 518,270 22,472,187
---------------
$ 49,309,688
- ------------------------------------------------------------------------------------------------------
Network & Telecom - 7.3%
- ------------------------------------------------------------------------------------------------------
Cisco Systems, Inc.* 14,130,340 $ 247,846,164
Corning, Inc.* 3,917,900 79,337,475
Juniper Networks, Inc.^* 1,295,500 29,135,795
Nokia Corp., ADR 2,193,990 37,473,349
QUALCOMM, Inc. 3,565,550 162,125,559
---------------
$ 555,918,342
- ------------------------------------------------------------------------------------------------------
Oil Services - 2.7%
- ------------------------------------------------------------------------------------------------------
BJ Services Co. 421,950 $ 15,464,468
GlobalSantaFe Corp.^ 818,870 37,143,943
Halliburton Co. 98,520 6,270,798
National Oilwell Varco, Inc.^* 155,740 9,440,959
Noble Corp. 1,026,000 73,943,820
Schlumberger Ltd.^ 223,000 21,347,790
Smith International, Inc.^ 1,112,600 42,045,154
---------------
$ 205,656,932
- ------------------------------------------------------------------------------------------------------
Personal Computers & Peripherals - 1.8%
- ------------------------------------------------------------------------------------------------------
EMC Corp.* 8,079,170 $ 112,542,838
Network Appliance, Inc.^* 779,050 22,685,936
---------------
$ 135,228,774
- ------------------------------------------------------------------------------------------------------
Pharmaceuticals - 11.2%
- ------------------------------------------------------------------------------------------------------
Abbott Laboratories 1,418,310 $ 53,484,470
Allergan, Inc.^ 413,890 41,389,000
Eli Lilly & Co. 3,006,220 151,814,110
Johnson & Johnson 3,756,240 231,947,820
Roche Holding AG 780,870 116,852,016
Teva Pharmaceutical Industries Ltd., ADR^ 1,988,010 81,269,849
Wyeth 4,153,520 172,620,291
---------------
$ 849,377,556
- ------------------------------------------------------------------------------------------------------
Railroad & Shipping - 0.4%
- ------------------------------------------------------------------------------------------------------
Norfolk Southern Corp. 711,200 $ 31,463,488
- ------------------------------------------------------------------------------------------------------
Restaurants - 0.2%
- ------------------------------------------------------------------------------------------------------
Cheesecake Factory, Inc.^* 70,300 $ 2,575,792
P.F. Chang's China Bistro, Inc.^* 196,400 10,104,780
---------------
$ 12,680,572
- ------------------------------------------------------------------------------------------------------
Specialty Chemicals - 0.8%
- ------------------------------------------------------------------------------------------------------
Praxair, Inc.^ 1,197,380 $ 62,263,760
- ------------------------------------------------------------------------------------------------------
Specialty Stores - 3.6%
- ------------------------------------------------------------------------------------------------------
CarMax, Inc.^* 825,340 $ 22,630,823
Home Depot, Inc. 750,700 31,364,246
Lowe's Cos., Inc.^ 1,060,170 71,540,272
PETsMART, Inc.^ 2,307,400 54,962,268
Staples, Inc. 1,954,695 45,153,455
Williams-Sonoma, Inc.^* 1,025,800 44,509,462
---------------
$ 270,160,526
- ------------------------------------------------------------------------------------------------------
Telecommunications - Wireless - 0.7%
- ------------------------------------------------------------------------------------------------------
America Movil S.A. de C.V., "L", ADR 1,750,340 $ 50,269,765
- ------------------------------------------------------------------------------------------------------
Telephone Services - 0.2%
- ------------------------------------------------------------------------------------------------------
Sprint Nextel Corp. 597,600 $ 14,963,904
- ------------------------------------------------------------------------------------------------------
Trucking - 1.4%
- ------------------------------------------------------------------------------------------------------
FedEx Corp. 1,072,550 $ 104,702,331
- ------------------------------------------------------------------------------------------------------
Total Stocks (Identified Cost, $7,259,265,999) $7,301,756,311
- ------------------------------------------------------------------------------------------------------
Short-Term Obligations> - 4.0%
- ------------------------------------------------------------------------------------------------------
AIG Funding, Inc., 4.02%, due 12/08/05 $ 12,500,000 $ 12,490,229
General Electric Capital Corp., 4.03%, due 12/01/05 27,374,000 27,374,000
Merrill Lynch & Co., Inc., 4.02%, due 12/01/05 260,504,000 260,504,000
- ------------------------------------------------------------------------------------------------------
Total Short-Term Obligations, at Amortized Cost $ 300,368,229
- ------------------------------------------------------------------------------------------------------
Collateral for Securities Loaned - 5.1%
- ------------------------------------------------------------------------------------------------------
Navigator Securities Lending Prime Portfolio, at Cost and
Net Asset Value 387,018,985 $ 387,018,985
- ------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $7,946,653,213)(+) $ 7,989,143,525
- ------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - (5.3)% (400,763,397)
- ------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $ 7,588,380,128
- ------------------------------------------------------------------------------------------------------
* 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.
(+) As of November 30, 2005 the fund had four securities representing $183,157,178 and 2.4% of net assets
that were fair valued in accordance with the policies adopted by the Board of Trustees.
The following abbreviations are used in the Portfolio of Investments and are defined:
ADR American Depository Receipt
GDR Global Depository Receipt
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS Statement of Assets and Liabilities
This statement represents your fund's balance sheet, which details the assets
and liabilities composing the total value of the fund.
AT 11/30/05
ASSETS
- -------------------------------------------------------------------------------------------------------
Investments, at value, including $378,298,518 of securities
on loan (identified cost, $7,946,653,213) $7,989,143,525
Cash 2,238,673
Receivable for investments sold 164,525,453
Receivable for fund shares sold 4,943,286
Interest and dividends receivable 8,173,150
Other assets 91,153
- -------------------------------------------------------------------------------------------------------
Total assets $8,169,115,240
- -------------------------------------------------------------------------------------------------------
LIABILITIES
- -------------------------------------------------------------------------------------------------------
Payable for investments purchased $169,571,825
Payable for fund shares reacquired 19,687,175
Collateral for securities loaned, at value 387,018,985
Payable to affiliates
Management fee 68,936
Shareholder servicing costs 2,366,110
Distribution and service fees 116,647
Administrative services fee 257
Program manager fees 32
Retirement plan administration and services fees 300
Accrued expenses and other liabilities 1,904,845
- -------------------------------------------------------------------------------------------------------
Total liabilities $580,735,112
- -------------------------------------------------------------------------------------------------------
Net assets $7,588,380,128
- -------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- -------------------------------------------------------------------------------------------------------
Paid-in capital $12,191,151,087
Unrealized appreciation (depreciation) on investments and
translation of assets and liabilities in foreign currencies 42,480,714
Accumulated net realized gain (loss) on investments and
foreign currency transactions (4,645,019,848)
Accumulated distributions in excess of net investment
income (231,825)
- -------------------------------------------------------------------------------------------------------
Net assets $7,588,380,128
- -------------------------------------------------------------------------------------------------------
Shares of beneficial interest outstanding 612,817,910
- -------------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities - continued
Class A shares
- -------------------------------------------------------------------------------------------------------
Net assets $4,771,192,497
Shares outstanding 373,525,591
- -------------------------------------------------------------------------------------------------------
Net asset value per share $12.77
- -------------------------------------------------------------------------------------------------------
Offering price per share (100/94.25X$12.77) $13.55
- -------------------------------------------------------------------------------------------------------
Class B shares
- -------------------------------------------------------------------------------------------------------
Net assets $1,947,597,194
Shares outstanding 166,816,949
- -------------------------------------------------------------------------------------------------------
Net asset value and offering price per share $11.68
- -------------------------------------------------------------------------------------------------------
Class C shares
- -------------------------------------------------------------------------------------------------------
Net assets $584,360,453
Shares outstanding 50,271,989
- -------------------------------------------------------------------------------------------------------
Net asset value and offering price per share $11.62
- -------------------------------------------------------------------------------------------------------
Class I shares
- -------------------------------------------------------------------------------------------------------
Net assets $122,728,129
Shares outstanding 9,447,863
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share $12.99
- -------------------------------------------------------------------------------------------------------
Class J shares
- -------------------------------------------------------------------------------------------------------
Net assets $1,952,198
Shares outstanding 168,930
- -------------------------------------------------------------------------------------------------------
Net asset value and redemption price per share $11.56
- -------------------------------------------------------------------------------------------------------
Class R shares
- -------------------------------------------------------------------------------------------------------
Net assets $51,748,553
Shares outstanding 4,056,679
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share $12.76
- -------------------------------------------------------------------------------------------------------
Class R1 shares
- -------------------------------------------------------------------------------------------------------
Net assets $1,008,155
Shares outstanding 86,493
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share $11.66
- -------------------------------------------------------------------------------------------------------
Class R2 shares
- -------------------------------------------------------------------------------------------------------
Net assets $274,390
Shares outstanding 23,471
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share $11.69
- -------------------------------------------------------------------------------------------------------
Class R3 shares
- -------------------------------------------------------------------------------------------------------
Net assets $4,216,499
Shares outstanding 333,616
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share $12.64
- -------------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities - continued
Class R4 shares
- -------------------------------------------------------------------------------------------------------
Net assets $1,016,134
Shares outstanding 79,560
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share $12.77
- -------------------------------------------------------------------------------------------------------
Class R5 shares
- -------------------------------------------------------------------------------------------------------
Net assets $97,541,220
Shares outstanding 7,620,288
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share $12.80
- -------------------------------------------------------------------------------------------------------
Class 529A shares
- -------------------------------------------------------------------------------------------------------
Net assets $3,203,250
Shares outstanding 253,072
- -------------------------------------------------------------------------------------------------------
Net asset value per share $12.66
- -------------------------------------------------------------------------------------------------------
Offering price per share (100/94.25X$12.66) $13.43
- -------------------------------------------------------------------------------------------------------
Class 529B shares
- -------------------------------------------------------------------------------------------------------
Net assets $589,144
Shares outstanding 50,851
- -------------------------------------------------------------------------------------------------------
Net asset value and offering price per share $11.59
- -------------------------------------------------------------------------------------------------------
Class 529C shares
- -------------------------------------------------------------------------------------------------------
Net assets $952,312
Shares outstanding 82,558
- -------------------------------------------------------------------------------------------------------
Net asset value and offering price per share $11.54
- -------------------------------------------------------------------------------------------------------
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
This statement describes how much your fund received in investment income and
paid in expenses. It also describes any gains and/or losses generated by fund
operations.
YEAR ENDED 11/30/05
NET INVESTMENT LOSS
- -------------------------------------------------------------------------------------------------------
Income
Dividends $69,131,969
Interest 5,924,374
Foreign taxes withheld (664,599)
- -------------------------------------------------------------------------------------------------------
Total investment income $74,391,744
- -------------------------------------------------------------------------------------------------------
Expenses
Management fee $26,538,673
Distribution and service fees 46,058,721
Program manager fees 10,734
Shareholder servicing costs 17,150,402
Administrative services fee 448,150
Retirement plan administration and services fees 17,501
Independent trustees' compensation 131,269
Custodian fee 1,511,206
Printing 714,583
Postage 528,267
Auditing fees 53,318
Legal fees 226,619
Shareholder solicitation expenses 1,096,885
Miscellaneous 935,369
- -------------------------------------------------------------------------------------------------------
Total expenses $95,421,697
- -------------------------------------------------------------------------------------------------------
Fees paid indirectly (764,908)
Reduction of expenses by investment adviser (38,044)
- -------------------------------------------------------------------------------------------------------
Net expenses $94,618,745
- -------------------------------------------------------------------------------------------------------
Net investment loss $(20,227,001)
- -------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
- -------------------------------------------------------------------------------------------------------
Realized gain (loss) (identified cost basis)
Investment transactions $766,340,627
Foreign currency transactions (528,931)
- -------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments and foreign
currency transactions $765,811,696
- -------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation)
Investments $(143,705,851)
Translation of assets and liabilities in foreign currencies (22,684)
- -------------------------------------------------------------------------------------------------------
Net unrealized gain (loss) on investments and foreign
currency translation $(143,728,535)
- -------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and
foreign currency $622,083,161
- -------------------------------------------------------------------------------------------------------
Change in net assets from operations $601,856,160
- -------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS Statements of Changes in Net Assets
This statement describes the increases and/or decreases in net assets resulting
from operations, any distributions, and any shareholder transactions.
FOR YEARS ENDED 11/30 2005 2004
CHANGE IN NET ASSETS
- -------------------------------------------------------------------------------------------------------
FROM OPERATIONS
- -------------------------------------------------------------------------------------------------------
Net investment income (loss) $(20,227,001) $23,699,754
Net realized gain (loss) on investments and foreign
currency transactions 765,811,696 762,967,254
Net unrealized gain (loss) on investments and foreign
currency translation (143,728,535) (62,165,681)
- -------------------------------------------------------------------------------------------------------
Change in net assets from operations $601,856,160 $724,501,327
- -------------------------------------------------------------------------------------------------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------
From net investment income
Class A $(22,549,646) $--
Class I (1,105,607) --
Class R (113,615) --
Class R3 (6,068) --
Class 529A (7,734) --
- -------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(23,782,670) $--
- -------------------------------------------------------------------------------------------------------
Change in net assets from fund share transactions $(1,859,041,090) $(2,936,090,100)
- -------------------------------------------------------------------------------------------------------
Redemption fees $19,402 $9,598
- -------------------------------------------------------------------------------------------------------
Total change in net assets $(1,280,948,198) $(2,211,579,175)
- -------------------------------------------------------------------------------------------------------
NET ASSETS
- -------------------------------------------------------------------------------------------------------
At beginning of period $8,869,328,326 $11,080,907,501
At end of period (including accumulated distributions in excess of net
investment income of $231,825 and undistributed net investment income of
$23,442,811, respectively) $7,588,380,128 $8,869,328,326
- -------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS Financial Highlights
The financial highlights table is intended to help you understand the fund's financial performance for the past 5 years (or
life of a particular share class, if shorter). Certain information reflects financial results for a single fund share. The
total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the fund
share class (assuming reinvestment of all distributions) held for the entire period. This information has been audited by the
fund's independent registered public accounting firm, whose report, together with the fund's financial statements, are included
in this report.
CLASS A
YEARS ENDED 11/30
-----------------------------------------------------------------------------------
2005 2004 2003 2002 2001
Net asset value, beginning
of period $11.88 $11.02 $9.98 $12.73 $18.47
- -------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM
INVESTMENT OPERATIONS
- -------------------------------------------------------------------------------------------------------------------------
Net investment income (loss)# $(0.00)+++ $0.05 $0.00+++ $(0.02) $(0.00)+++
Net realized and unrealized gain
(loss) on investments and
foreign currency 0.94 0.81 1.04 (2.73) (4.02)
- -------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.94 $0.86 $1.04 $(2.75) $(4.02)
- -------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.05) $-- $-- $-- $--
From net realized gain on
investments and foreign currency
transactions -- -- -- -- (1.47)
From paid-in capital -- -- -- -- (0.25)
- -------------------------------------------------------------------------------------------------------------------------
Total distributions declared
to shareholders $(0.05) $-- $-- $-- $(1.72)
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.77 $11.88 $11.02 $9.98 $12.73
- -------------------------------------------------------------------------------------------------------------------------
Total return (%)(+)&*** 7.93 7.80[+] 10.42^^^ (21.60) (24.20)
- -------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -------------------------------------------------------------------------------------------------------------------------
Expenses before expense
reductions## 0.96 0.92 0.95 0.94 0.94
Expenses after expense
reductions## 0.96 0.92 0.95 0.94 0.94
Net investment income (loss) (0.03) 0.44 0.01 (0.14) (0.03)
Portfolio turnover 125 141 283 227 305
Net assets at end of period
(000 Omitted) $4,771,192 $5,540,056 $7,079,160 $6,327,026 $8,336,750
- -------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
CLASS B
YEARS ENDED 11/30
-----------------------------------------------------------------------------------
2005 2004 2003 2002 2001
Net asset value, beginning
of period $10.88 $10.16 $9.27 $11.89 $17.37
- --------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM
INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------------------------------------------------
Net investment loss# $(0.08) $(0.02) $(0.06) $(0.08) $(0.09)
Net realized and unrealized gain
(loss) on investments and foreign
currency 0.88 0.74 0.95 (2.54) (3.77)
- --------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.80 $0.72 $0.89 $(2.62) $(3.86)
- --------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------------------------------
From net realized gain on
investments and foreign currency
transactions $-- $-- $-- $-- $(1.39)
From paid-in capital -- -- -- -- (0.23)
- --------------------------------------------------------------------------------------------------------------------------
Total distributions declared
to shareholders $-- $-- $-- $-- $(1.62)
- --------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.68 $10.88 $10.16 $9.27 $11.89
- --------------------------------------------------------------------------------------------------------------------------
Total return (%)(+)&*** 7.35 7.09[+] 9.60^^^ (22.04) (24.71)
- --------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- --------------------------------------------------------------------------------------------------------------------------
Expenses before expense
reductions## 1.61 1.56 1.60 1.59 1.59
Expenses after expense reductions## 1.61 1.56 1.60 1.59 1.59
Net investment loss (0.68) (0.17) (0.64) (0.79) (0.68)
Portfolio turnover 125 141 283 227 305
Net assets at end of period
(000 Omitted) $1,947,597 $2,415,346 $2,778,509 $2,820,241 $4,280,270
- --------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
CLASS C
YEARS ENDED 11/30
------------------------------------------------------------------------------
2005 2004 2003 2002 2001
Net asset value, beginning of period $10.83 $10.11 $9.23 $11.84 $17.31
- --------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM
INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------------------------------------------------
Net investment loss# $(0.08) $(0.02) $(0.06) $(0.08) $(0.09)
Net realized and unrealized gain (loss)
on investments and foreign currency 0.87 0.74 0.94 (2.53) (3.75)
- --------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.79 $0.72 $0.88 $(2.61) $(3.84)
- --------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments
and foreign currency transactions $-- $-- $-- $-- $(1.40)
From paid-in capital -- -- -- -- (0.23)
- --------------------------------------------------------------------------------------------------------------------------
Total distributions declared
to shareholders $-- $-- $-- $-- $(1.63)
- --------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.62 $10.83 $10.11 $9.23 $11.84
- --------------------------------------------------------------------------------------------------------------------------
Total return (%)(+)&*** 7.29 7.12[+] 9.53^^^ (22.04) (24.69)
- --------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- --------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions## 1.61 1.56 1.60 1.59 1.59
Expenses after expense reductions## 1.61 1.56 1.60 1.59 1.59
Net investment loss (0.68) (0.19) (0.64) (0.79) (0.68)
Portfolio turnover 125 141 283 227 305
Net assets at end of period
(000 Omitted) $584,360 $739,534 $911,333 $917,809 $1,446,087
- --------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
CLASS I
YEARS ENDED 11/30
-----------------------------------------------------------------------------
2005 2004 2003 2002 2001
Net asset value, beginning of period $12.08 $11.17 $10.08 $12.81 $18.58
- --------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM
INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------------------------------------------------
Net investment income# $0.04 $0.08 $0.04 $0.03 $0.05
Net realized and unrealized gain (loss)
on investments and foreign currency 0.97 0.83 1.05 (2.76) (4.03)
- --------------------------------------------------------------------------------------------------------------------------
Total from investment operations $1.01 $0.91 $1.09 $(2.73) $(3.98)
- --------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.10) $-- $-- $-- $--
From net realized gain on investments
and foreign currency transactions -- -- -- -- (1.53)
From paid-in capital -- -- -- -- (0.26)
- --------------------------------------------------------------------------------------------------------------------------
Total distributions declared
to shareholders $(0.10) $-- $-- $-- $(1.79)
- --------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.99 $12.08 $11.17 $10.08 $12.81
- --------------------------------------------------------------------------------------------------------------------------
Total return (%)&*** 8.38 8.15[+] 10.81^^^ (21.31) (23.93)
- --------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- --------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions## 0.61 0.57 0.60 0.59 0.59
Expenses after expense reductions## 0.61 0.57 0.60 0.59 0.59
Net investment income 0.32 0.67 0.36 0.21 0.32
Portfolio turnover 125 141 283 227 305
Net assets at end of period (000 Omitted) $122,728 $133,502 $285,467 $196,501 $195,542
- --------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
CLASS J
YEARS ENDED 11/30
---------------------------------------------------------------------------
2005 2004 2003 2002 2001**
Net asset value, beginning of period $10.77 $10.06 $9.17 $11.77 $15.98
- -------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM
INVESTMENT OPERATIONS
- -------------------------------------------------------------------------------------------------------------------------
Net investment loss# $(0.07) $(0.03) $(0.06) $(0.08) $(0.09)
Net realized and unrealized gain (loss) on
investments and foreign currency 0.86 0.74 0.95 (2.52) (4.12)
- -------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.79 $0.71 $0.89 $(2.60) $(4.21)
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.56 $10.77 $10.06 $9.17 $11.77
- -------------------------------------------------------------------------------------------------------------------------
Total return (%)(+)&*** 7.34 7.06[+] 9.71^^^ (22.09) (26.35)++
- -------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions## 1.60 1.56 1.61 1.59 1.59+
Expenses after expense reductions## 1.60 1.56 1.61 1.59 1.59+
Net investment loss (0.67) (0.25) (0.66) (0.79) (0.68)+
Portfolio turnover 125 141 283 227 305
Net assets at end of period (000 Omitted) $1,952 $7,630 $10,368 $3,284 $6,861
- -------------------------------------------------------------------------------------------------------------------------
CLASS R
YEARS ENDED 11/30
---------------------------------------------------
2005 2004 2003**
Net asset value, beginning of period $11.87 $11.02 $9.23
- -------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------------------------------------------------------------
Net investment income (loss)# $(0.02) $0.05 $(0.01)
Net realized and unrealized gain (loss) on investments and
foreign currency 0.95 0.80 1.80
- -------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.93 $0.85 $1.79
- -------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------------------
From net investment income $(0.04) $-- $--
- -------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.76 $11.87 $11.02
- -------------------------------------------------------------------------------------------------------------------
Total return (%)&*** 7.89 7.71[+] 19.39^^^++
- -------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions## 1.12 1.07 1.10+
Expenses after expense reductions## 1.12 1.07 1.10+
Net investment income (loss) (0.17) 0.42 (0.15)+
Portfolio turnover 125 141 283
Net assets at end of period (000 Omitted) $51,749 $29,239 $14,105
- -------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
CLASS R1 CLASS R2
YEAR ENDED YEAR ENDED
11/30/05** 11/30/05**
Net asset value, beginning of period $10.86 $10.86
- -------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------------------------------------------------
Net investment loss# $(0.06) $(0.04)
Net realized and unrealized gain (loss) on investments
and foreign currency 0.86 0.87
- -------------------------------------------------------------------------------------------------------
Total from investment operations $0.80 $0.83
- -------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.66 $11.69
- -------------------------------------------------------------------------------------------------------
Total return (%)&*** 7.37++ 7.64++
- -------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -------------------------------------------------------------------------------------------------------
Expenses before expense reductions## 1.82+ 1.51+
Expenses after expense reductions## 1.78+ 1.47+
Net investment loss (0.80)+ (0.54)+
Portfolio turnover 125 125
Net assets at end of period (000 Omitted) $1,008 $274
- -------------------------------------------------------------------------------------------------------
CLASS R3
YEARS ENDED 11/30
---------------------------------------------------
2005 2004 2003**
Net asset value, beginning of period $11.82 $11.02 $11.02
- -------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------------------------------------------------------------
Net investment income (loss)# $(0.04) $0.00+++ $(0.00)+++
Net realized and unrealized gain (loss) on investments and
foreign currency 0.94 0.80 (0.00)+++^
- -------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.90 $0.80 $(0.00)+++
- -------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------------------
From net investment income $(0.08) $-- $--
- -------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.64 $11.82 $11.02
- -------------------------------------------------------------------------------------------------------------------
Total return (%)&*** 7.64 7.26[+] 0.00++
- -------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions## 1.37 1.33 1.44+
Expenses after expense reductions## 1.34 1.33 1.44+
Net investment income (loss) (0.37) 0.03 (0.34)+
Portfolio turnover 125 141 283
Net assets at end of period (000 Omitted) $4,216 $708 $5
- -------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
CLASS R4 CLASS R5
YEAR ENDED YEAR ENDED
11/30/05** 11/30/05**
Net asset value, beginning of period $11.83 $11.83
- -------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------------------------------------------------
Net investment income (loss)# $(0.01) $0.03
Net realized and unrealized gain (loss) on investments
and foreign currency 0.95 0.94
- -------------------------------------------------------------------------------------------------------
Total from investment operations $0.94 $0.97
- -------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.77 $12.80
- -------------------------------------------------------------------------------------------------------
Total return (%)&*** 7.95++ 8.20++
- -------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -------------------------------------------------------------------------------------------------------
Expenses before expense reductions## 1.03+ 0.70+
Expenses after expense reductions## 1.03+ 0.70+
Net investment income (loss) (0.11)+ 0.48+
Portfolio turnover 125 125
Net assets at end of period (000 Omitted) $1,016 $97,541
- -------------------------------------------------------------------------------------------------------
CLASS 529A
YEARS ENDED 11/30
----------------------------------------------------------------
2005 2004 2003 2002**
Net asset value, beginning of period $11.79 $10.96 $9.97 $9.72
- -------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------------------------------------------------------------------
Net investment income (loss)# $(0.03) $0.04 $(0.02) $(0.00)+++
Net realized and unrealized gain (loss) on
investments and foreign currency 0.94 0.79 1.01 0.25
- -------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.91 $0.83 $0.99 $0.25
- -------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.04) $-- $-- $--
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.66 $11.79 $10.96 $9.97
- -------------------------------------------------------------------------------------------------------------------------
Total return (%)(+)&*** 7.77 7.57[+] 9.93^^^ 2.57++
- -------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions## 1.22 1.17 1.20 1.19+
Expenses after expense reductions## 1.22 1.17 1.20 1.19+
Net investment income (loss) (0.27) 0.39 (0.24) (0.16)+
Portfolio turnover 125 141 283 227
Net assets at end of period (000 Omitted) $3,203 $2,070 $1,068 $95
- -------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
CLASS 529B
YEARS ENDED 11/30
---------------------------------------------------------------
2005 2004 2003 2002**
Net asset value, beginning of period $10.83 $10.13 $9.26 $9.05
- -------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------------------------------------------------------------------
Net investment loss# $(0.10) $(0.03) $(0.08) $(0.02)
Net realized and unrealized gain (loss) on investments
and foreign currency 0.86 0.73 0.95 0.23
- -------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.76 $0.70 $0.87 $0.21
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.59 $10.83 $10.13 $9.26
- -------------------------------------------------------------------------------------------------------------------------
Total return (%)(+)&*** 7.02 6.91[+] 9.40^^^ 2.32++
- -------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions## 1.87 1.81 1.85 1.84+
Expenses after expense reductions## 1.87 1.81 1.85 1.84+
Net investment loss (0.92) (0.30) (0.89) (0.78)+
Portfolio turnover 125 141 283 227
Net assets at end of period (000 Omitted) $589 $478 $285 $24
- -------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
CLASS 529C
YEARS ENDED 11/30
---------------------------------------------------------------
2005 2004 2003 2002**
Net asset value, beginning of period $10.78 $10.09 $9.22 $9.01
- -------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------------------------------------------------------------------
Net investment loss# $(0.10) $(0.04) $(0.08) $(0.02)
Net realized and unrealized gain (loss) on investments
and foreign currency 0.86 0.73 0.95 0.23
- -------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.76 $0.69 $0.87 $0.21
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.54 $10.78 $10.09 $9.22
- -------------------------------------------------------------------------------------------------------------------------
Total return (%)(+)&*** 7.05 6.84[+] 9.44^^^ 2.33++
- -------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions## 1.87 1.81 1.86 1.84+
Expenses after expense reductions## 1.87 1.81 1.86 1.84+
Net investment loss (0.92) (0.34) (0.88) (0.81)+
Portfolio turnover 125 141 283 227
Net assets at end of period (000 Omitted) $952 $765 $606 $32
- -------------------------------------------------------------------------------------------------------------------------
Any redemption fees charged by the fund during the 2004 and 2005 fiscal years resulted in a per share impact of less than $0.01.
** For the period from the class' inception, December 18, 2000 (Class J), December 31, 2002 (Class R), 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.
+ Annualized.
++ Not annualized.
+++ Per share amount was less than $0.01.
# Per share data are based on average shares outstanding.
## Ratios do not reflect reductions from fees paid indirectly.
^ The per share amount is not in accordance with the net realized and unrealized gain/loss for the period because of the
timing of sales of fund shares and the amount of per share realized and unrealized gains and losses at such time.
^^^ The fund's total return calculation includes proceeds received on March 26, 2003 from a non-recurring litigation
settlement, recorded as a realized gain on investment transactions. The proceeds resulted in an increase in the net asset
value of less than $0.01 per share based on shares outstanding on the day the proceeds were received. Excluding the effect
of this payment from the fund's ending net asset value per share, the Class A, Class B, Class C, Class I, Class J, Class R,
Class 529A, Class 529B, and Class 529C total returns for the year ended November 30, 2003 would have been lower by
approximately 0.07%, 0.08%, 0.08%, 0.07%, 0.09%, 0.08%, 0.08%, 0.09%, and 0.09%, respectively.
(+) Total returns do not include any applicable sales charges.
[+] The fund'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 $0.03 per share based on shares outstanding on the
day the proceeds were recorded. Excluding the effect of this accrual from the ending net asset value per share, Class A,
Class B, Class C, Class I, Class J, Class R, Class R3, Class 529A, Class 529B and Class 592C total returns for the year
ended November 30, 2004 would have been lower by 0.25%, respectively.
& From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
SEE NOTES TO FINANCIAL STATEMENTS
NOTES TO FINANCIAL STATEMENTS
(1) BUSINESS AND ORGANIZATION
Massachusetts Investors Growth Stock Fund (the fund) is organized as a
Massachusetts business trust and is registered under the Investment Company Act
of 1940, as amended, as a diversified 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 fund 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, including restricted equity
securities, are generally valued at the last sale or official closing price as
reported by an independent pricing service on the market or exchange on which
they are primarily traded. For securities for which there were no sales during
the day, equity securities are generally valued at the last quoted bid price as
reported by an independent pricing service on the market or exchange on which
they are primarily traded. Short-term instruments with a maturity at issuance of
365 days or less are generally valued at amortized cost, which approximates
market value. Open-end investment companies are generally valued at their net
asset value per share. Securities and other assets generally valued on the basis
of information from an independent pricing service may also be valued on the
basis of information from brokers and dealers. The values of foreign securities
and other assets and liabilities expressed in foreign currencies are converted
to U.S. dollars based upon exchange rates provided by an independent source.
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, in valuing securities that trade principally on
foreign markets, events reasonably determined to be significant (such as certain
movements 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 fund's valuation time that may impact
the value of securities traded in these foreign markets. In these cases, the
fund may utilize information from an external vendor or other sources to adjust
closing market prices of foreign equity securities to reflect what it believes
to be the fair value of the securities as of the fund's valuation time. Fair
valuation of foreign equity securities may occur frequently based on an
assessment that events which occur on a fairly regular basis (such as U.S.
market movements) are significant.
REPURCHASE AGREEMENTS - The fund may enter into repurchase agreements with
institutions that the fund's investment adviser has determined are creditworthy.
Each repurchase agreement is recorded at cost. The fund requires that the
securities collateral in a repurchase transaction be transferred to the
custodian in a manner sufficient to enable the fund to obtain those securities
in the event of a default under the repurchase agreement. The fund 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 fund under each such
repurchase agreement. The fund, 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") and J.P.
Morgan Chase and Co. ("Chase"), as lending agents, may loan the securities of
the fund to certain qualified institutions (the "Borrowers") approved by the
fund. The loans are collateralized at all times by cash and/or U.S. Treasury
securities in an amount at least equal to the market value of the securities
loaned. State Street and Chase provide the fund with indemnification against
Borrower default. The fund 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 fund and the lending agents. On loans
collateralized by U.S. Treasury securities, a fee is received from the Borrower,
and is allocated between the fund and the lending agents. Income from securities
lending is included in interest income on the Statement of Operations. The
dividend and interest income earned on the securities loaned is accounted for in
the same manner as other dividend and interest income.
SHORT TERM FEES - For purchases made on or after July 1, 2004 and before April
1, 2005, the fund charged a 2% redemption fee (which was retained by the fund)
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 fund no longer charges a redemption
fee. See the fund'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 fund 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 fund.
FEES PAID INDIRECTLY - The fund's custody fee is reduced according to an
arrangement that measures the value of cash deposited with the custodian by the
fund. During the year ended November 30, 2005, the fund's custodian fees were
reduced by $387,759 under this arrangement. The fund has entered into a
commission recapture agreement, under which certain brokers will credit the fund
a portion of the commissions generated, to offset certain expenses of the fund.
For the year ended November 30, 2005, the fund's miscellaneous expenses were
reduced by $377,149 under this agreement. These amounts are shown as a reduction
of total expenses on the Statement of Operations.
TAX MATTERS AND DISTRIBUTIONS - The fund'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 fund
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, net operating losses and wash
sales.
The tax character of distributions declared for the years ended November 30,
2005 and November 30, 2004 was as follows:
11/30/05 11/30/04
Distributions declared from:
Ordinary income* $23,782,670 $--
*Included in the fund's distributions from ordinary income is $103,882 in
excess of investment company taxable income, which in accordance with
applicable U.S. tax law, is taxable to shareholders as ordinary income
distributions.
During the year ended November 30, 2005, accumulated distributions in excess of
net investment income decreased by $20,335,035, accumulated net realized loss on
investments and foreign currency transactions decreased by $528,931, and paid-in
capital decreased by $20,863,966 due to differences between book and tax
accounting for foreign currency transactions and net operating losses. This
change had no effect on the net assets or net asset value per share.
As of November 30, 2005, the components of distributable earnings (accumulated
losses) on a tax basis were as follows:
Capital loss carryforward $(4,447,639,027)
Post-October capital loss deferral (5,182,105)
Unrealized depreciation (148,259,254)
Other temporary differences (1,690,573)
Post-October capital loss deferrals represent losses realized during the current
fiscal year, but recognized for tax purposes in the next fiscal year.
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 November 30, 2009 (2,147,917,828) and
November 30, 2010 (2,299,721,199).
MULTIPLE CLASSES OF SHARES OF BENEFICIAL INTEREST - The fund offers multiple
classes of shares, which differ in their respective distribution and service
fees. All shareholders bear the common expenses of the fund based on daily net
assets of each class, without distinction between share classes. Dividends are
declared separately for each class. Differences in per share dividend rates are
generally due to differences in separate class expenses. Class B and Class 529B
shares will convert to Class A and Class 529A shares, respectively approximately
eight years after purchase.
(3) TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISER - The fund 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 fund's average daily net assets.
DISTRIBUTOR - MFS Fund Distributors, Inc. (MFD), a wholly owned subsidiary of
MFS, as distributor, received $265,962 and $2,449 for the year ended November
30, 2005, as its portion of the initial sales charge on sales of Class A and
Class 529A shares of the fund, respectively.
The Board of Trustees has adopted a distribution plan for certain class shares
pursuant to Rule 12b-1 of the Investment Company Act of 1940.
The fund's distribution plan provides that the fund will pay MFD for services
provided by MFD and financial intermediaries in connection with the distribution
and servicing of certain share classes. One component of the plan is a
distribution fee paid to MFD and another component of the plan is a service fee
paid to MFD. MFD may subsequently pay all, or a portion, of the distribution
and/or service fees to financial intermediaries.
Distribution Fee Plan Table:
TOTAL ANNUAL DISTRIBUTION
DISTRIBUTION SERVICE DISTRIBUTION EFFECTIVE AND SERVICE
FEE RATE FEE RATE PLAN(1) RATE(2) FEE
Class A 0.10% 0.25% 0.35% 0.35% $17,668,265
Class B 0.75% 0.25% 1.00% 1.00% 21,607,738
Class C 0.75% 0.25% 1.00% 1.00% 6,482,961
Class J(3) 0.75% 0.25% 1.00% 1.00% 45,246
Class R 0.25% 0.25% 0.50% 0.50% 217,180
Class R1 0.50% 0.25% 0.75% 0.75% 2,113
Class R2 0.25% 0.25% 0.50% 0.50% 628
Class R3 0.25% 0.25% 0.50% 0.50% 9,728
Class R4 -- 0.25% 0.25% 0.25% 680
Class 529A 0.25% 0.25% 0.50% 0.35% 10,098
Class 529B 0.75% 0.25% 1.00% 1.00% 5,375
Class 529C 0.75% 0.25% 1.00% 1.00% 8,709
- -----------------------------------------------------------------------------
Total Distribution and Service Fees $46,058,721
(1) In accordance with the distribution plan for certain classes, the fund 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 year ended November 30, 2005 based on each class'
average daily net assets. Assets attributable to Class A shares sold prior
to March 1, 1991 are subject to a service fee of 0.15% annually. 0.10% of
the Class 529A distribution fee is currently being paid by the fund. Payment
of the remaining 0.15% of the Class 529A distribution fee is not yet
implemented and will commence on such date as the fund's Board of Trustees
may determine.
(3) Includes fees that MFD pays to financial intermediaries and for services
rendered as the fund's agent company in Japan.
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. All contingent deferred sales charges are paid to MFD and during the
year ended November 30, 2005, were as follows:
AMOUNT
Class A $86,973
Class B $4,651,156
Class C $61,661
Class 529B $12
Class 529C $35
The fund 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 fund's 529 share classes is made. The fund has
entered into an agreement with MFD pursuant to which MFD receives an annual fee
of up to 0.35% from the fund based solely upon the value of the fund'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 fund's 529 share
classes. The fee may only be increased with the approval of the Board of
Trustees who oversees the fund. 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 year ended November 30, 2005, were as follows:
AMOUNT
Class 529A $7,213
Class 529B 1,344
Class 529C 2,177
----------------------------------------------------------
Total Program Manager Fees $10,734
SHAREHOLDER SERVICING AGENT - The fund pays a portion of shareholder servicing
costs to MFS Service Center, Inc. (MFSC), a wholly-owned subsidiary of MFS. MFSC
receives a fee from the fund, for its services as shareholder servicing agent,
set periodically under the supervision of the fund's Board of Trustees. For the
year ended November 30, 2005, the fee was $8,545,619, which equated to 0.1062%
annually of the fund's average daily net assets. MFSC also receives payment from
the fund for out-of-pocket and sub-accounting expenses paid by MFSC on behalf of
the fund. For the year ended November 30, 2005, these costs amounted to
$6,307,399.
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 charged a fixed amount plus a fee based on calendar year average net
assets. Effective July 1, 2005, the fund's annual fixed amount is $10,000. The
administrative services fee incurred for the year ended November 30, 2005 was
equivalent to an annual effective rate of 0.0056% of the fund's average daily
net assets.
In addition to the administrative services provided by MFS to the fund 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 year
ended November 30, 2005, the fund paid MFS an annual retirement plan
administration and services fee up to the following annual percentage rates of
each class' average daily net assets:
ANNUAL
FEE EFFECTIVE TOTAL
RATE RATE(1) AMOUNT
Class R1 0.45% 0.41% $1,265
Class R2 0.40% 0.36% 501
Class R3 0.25% 0.22% 4,853
Class R4 0.15% 0.15% 408
Class R5 0.10% 0.10% 10,474
- -------------------------------------------------------------------------------
Total Retirement Plan Administration and
Services Fees $17,501
(1) Effective October 1, 2005, MFS has contractually agreed to waive a portion
of the retirement plan administration and services fee equal to 0.10% for
Class R1 shares, 0.15% for Class R2 shares, and 0.10% for Class R3 shares.
For the year ended November 30, 2005, this waiver amounted to $879 and is
reflected as a reduction of total expenses in the Statement of Operations.
This agreement will continue until September 30, 2007.
TRUSTEES' AND OFFICERS' COMPENSATION - The fund pays compensation to Independent
Trustees in the form of a retainer, attendance fees, and additional compensation
to Board and Committee chairpersons. The fund does not pay compensation directly
to Trustees who are officers of the investment adviser, or to officers of the
fund, all of whom receive remuneration for their services to the fund from MFS.
Certain officers and Trustees of the fund are officers or directors of MFS, MFD,
and MFSC.
The fund has an unfunded, defined benefit plan for retired Independent Trustees
which resulted in a pension expense of $18,295. The fund also has an unfunded
retirement benefit deferral plan for certain current Independent Trustees which
resulted in an expense of $7,547. Both amounts are included in Independent
trustees' compensation for the year ended November 30, 2005.
DEFERRED TRUSTEE COMPENSATION - Under a Deferred Compensation Plan (the Plan)
Independent Trustees previously were allowed to elect to defer receipt of all or
a portion of their annual compensation. Trustees are no longer allowed to defer
compensation under the Plan. Amounts previously deferred are treated as though
equivalent dollar amounts had been invested in shares of the fund or other MFS
funds selected by the Trustee. Deferred amounts represent an unsecured
obligation of the fund until distributed in accordance with the Plan. Included
in other assets, and accrued expenses and other liabilities, is $78,663 of
Deferred Trustees' Compensation.
OTHER - This fund 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 $37,165, 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 fund's investment adviser, MFS, was the subject of an administrative
proceeding regarding disclosure of brokerage allocation practices in connection
with fund sales. As a result, proceeds in the amount of $22,479,377 were accrued
on July 28, 2004 and paid to the fund 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
$9,833,868,399 and $11,851,905,003, respectively.
The cost and unrealized appreciation and depreciation in the value of the
investments owned by the fund, as computed on a federal income tax basis, are as
follows:
Aggregate cost $8,137,402,779
------------------------------------------------------------
Gross unrealized appreciation $222,967,887
Gross unrealized depreciation (371,227,141)
------------------------------------------------------------
Net unrealized appreciation (depreciation) $(148,259,254)
(5) SHARES OF BENEFICIAL INTEREST
The fund's Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest. Transactions in
fund shares were as follows:
Year ended 11/30/05 Year ended 11/30/04
SHARES AMOUNT SHARES AMOUNT
CLASS A SHARES
Shares sold 55,645,086 $676,685,537 97,039,602 $1,105,194,897
Shares issued to shareholders in
reinvestment of distributions 1,444,585 17,624,039 -- --
Shares reacquired (150,046,165) (1,830,111,618) (273,231,815) (3,121,614,621)
- -----------------------------------------------------------------------------------------------------------
Net change (92,956,494) $(1,135,802,042) (176,192,213) $(2,016,419,724)
CLASS B SHARES
Shares sold 7,838,909 $87,410,962 15,784,345 $165,539,143
Shares reacquired (62,980,210) (704,001,606) (67,350,354) (703,587,008)
- ------------------------------------------------------------------------------------------------------------
Net change (55,141,301) $(616,590,644) (51,566,009) $(538,047,865)
CLASS C SHARES
Shares sold 3,949,856 $43,910,441 10,189,138 $106,267,925
Shares reacquired (21,936,036) (243,908,986) (32,039,671) (333,731,540)
- ------------------------------------------------------------------------------------------------------------
Net change (17,986,180) $(199,998,545) (21,850,533) $(227,463,615)
CLASS I SHARES
Shares sold 2,570,105 $31,792,172 6,724,790 $77,848,366
Shares issued to shareholders in
reinvestment of distributions 74,150 917,235 -- --
Shares reacquired (4,244,673) (52,647,907) (21,237,117) (244,236,758)
- ------------------------------------------------------------------------------------------------------------
Net change (1,600,418) $(19,938,500) (14,512,327) $(166,388,392)
Year ended 11/30/05 Year ended 11/30/04
SHARES AMOUNT SHARES AMOUNT
CLASS J SHARES
Shares sold 158,188 $1,753,770 862,660 $9,096,763
Shares reacquired (697,540) (7,724,445) (1,185,220) (12,395,399)
- ------------------------------------------------------------------------------------------------------------
Net change (539,352) $(5,970,675) (322,560) $(3,298,636)
CLASS R SHARES
Shares sold 2,787,174 $33,440,279 3,162,319 $36,250,892
Shares issued to shareholders in
reinvestment of distributions 9,046 110,345 -- --
Shares reacquired (1,201,977) (14,737,604) (1,979,466) (22,549,743)
- ------------------------------------------------------------------------------------------------------------
Net change 1,594,243 $18,813,020 1,182,853 $13,701,149
Period ended 11/30/05*
SHARES AMOUNT
CLASS R1 SHARES
Shares sold 102,839 $1,166,806
Shares reacquired (16,346) (189,267)
- -----------------------------------------------------------------------
Net change 86,493 $977,539
CLASS R2 SHARES
Shares sold 45,105 $518,278
Shares reacquired (21,634) (241,727)
- -----------------------------------------------------------------------
Net change 23,471 $276,551
Year ended 11/30/05 Year ended 11/30/04
SHARES AMOUNT SHARES AMOUNT
CLASS R3 SHARES
Shares sold 389,440 $4,803,665 100,372 $1,145,351
Shares issued to shareholders in
reinvestment of distributions 500 6,052 -- --
Shares reacquired (116,199) (1,438,617) (40,953) (474,714)
- ------------------------------------------------------------------------------------------------------------
Net change 273,741 $3,371,100 59,419 $670,637
Period ended 11/30/05*
SHARES AMOUNT
CLASS R4 SHARES
Shares sold 102,545 $1,274,648
Shares reacquired (22,985) (286,201)
- -----------------------------------------------------------------------
Net change 79,560 $988,447
CLASS R5 SHARES
Shares sold 7,794,198 $95,886,699
Shares reacquired (173,910) (2,191,260)
- -----------------------------------------------------------------------
Net change 7,620,288 $93,695,439
Year ended 11/30/05 Year ended 11/30/04
SHARES AMOUNT SHARES AMOUNT
CLASS 529A SHARES
Shares sold 118,438 $1,426,324 84,770 $955,342
Shares issued to shareholders in
reinvestment of distributions 638 7,734 -- --
Shares reacquired (41,544) (499,007) (6,615) (75,195)
- ------------------------------------------------------------------------------------------------------------
Net change 77,532 $935,051 78,155 $880,147
CLASS 529B SHARES
Shares sold 10,421 $114,047 20,549 $214,289
Shares reacquired (3,697) (40,871) (4,590) (48,766)
- ------------------------------------------------------------------------------------------------------------
Net change 6,724 $73,176 15,959 $165,523
CLASS 529C SHARES
Shares sold 17,579 $195,384 19,660 $204,405
Shares reacquired (5,956) (66,391) (8,858) (93,729)
- ------------------------------------------------------------------------------------------------------------
Net change 11,623 $128,993 10,802 $110,676
* For the period from the inception of Class R1, Class R2, Class R4 and Class R5 shares, April 1, 2005, through November 30, 2005.
(6) LINE OF CREDIT
The fund 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 fund
for the year ended November 30, 2005 was $54,232, and is included in
miscellaneous expense on the Statement of Operations. The fund had no
significant borrowings during the year ended November 30, 2005.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Trustees and Shareholders of Massachusetts Investors Growth
Stock Fund:
We have audited the accompanying statement of assets and liabilities of
Massachusetts Investors Growth Stock Fund (the Fund), including the portfolio of
investments, as of November 30, 2005, and the related statement of operations
for the year then ended, the statements of changes in net assets for each of the
two years in the period then ended, and the financial highlights for each of the
four years in the period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits. The financial highlights for the year ended November 30,
2001 were audited by other auditors, whose report dated January 10, 2002
expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Fund's internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Fund's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of November 30, 2005, by correspondence with the custodian
and brokers or by other appropriate auditing procedures where replies from
brokers were not received. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Massachusetts Investors Growth Stock Fund at November 30, 2005, the results of
its operations for the year then ended, the changes in its net assets for each
of the two years in the period then ended, and its financial highlights for each
of the four years in the period then ended, in conformity with U.S. generally
accepted accounting principles.
ERNST & YOUNG LLP
Boston, Massachusetts
January 10, 2006
TRUSTEES AND OFFICERS -- IDENTIFICATION AND BACKGROUND
The Trustees and officers of the Trust, as of January 1, 2006, are listed below, together with their
principal occupations during the past five years. (Their titles may have varied during that period.) The
address of each Trustee and officer is 500 Boylston Street, Boston, Massachusetts 02116.
PRINCIPAL OCCUPATIONS DURING
POSITION(s) HELD TRUSTEE/OFFICER THE PAST FIVE YEARS &
NAME, DATE OF BIRTH WITH FUND SINCE(1) OTHER DIRECTORSHIPS(2)
----------------------------------
INTERESTED TRUSTEES
Robert J. Manning(3) Trustee February 2004 Massachusetts Financial Services
(born 10/20/63) Company, Chief Executive Officer,
President, Chief Investment
Officer and Director
Robert C. Pozen(3) Trustee February 2004 Massachusetts Financial Services
(born 08/08/46) Company, Chairman (since February
2004); Secretary of Economic Affairs,
The Commonwealth of Massachusetts
(January 2002 to December 2002);
Fidelity Investments, Vice Chairman
(June 2000 to December 2001); Fidelity
Management & Research Company
(investment adviser), President (March
1997 to July 2001); Bell Canada
Enterprises (telecommunications),
Director; Medtronic, Inc. (medical
technology), Director; Telesat
(satellite communications), Director
INDEPENDENT TRUSTEES
J. Atwood Ives Trustee and Chair February 1992 Private investor; Eastern
(born 05/01/36) of Trustees Enterprises (diversified services
company), Chairman, Trustee and
Chief Executive Officer (until
November 2000)
Robert E. Butler(1) Trustee January 2006 Consultant - regulatory and
(born 11/29/41) compliance matters (since July
2002); PricewaterhouseCoopers LLP
(professional services firm),
Partner (November 2000 to June
2002)
Lawrence H. Cohn, M.D. Trustee August 1993 Brigham and Women's Hospital,
(born 03/11/37) Senior Cardiac Surgeon, Chief of
Cardiac Surgery (until 2005);
Harvard Medical School, Professor
of Surgery; Brigham and Women's
Hospital Physicians' Organization,
Chair (2000 to 2004)
David H. Gunning Trustee January 2004 Cleveland-Cliffs Inc. (mining
(born 05/30/42) products and service provider),
Vice Chairman/Director (since
April 2001); Encinitos Ventures
(private investment company),
Principal (1997 to April 2001);
Lincoln Electric Holdings, Inc.
(welding equipment manufacturer),
Director
William R. Gutow Trustee December 1993 Private investor and real estate
(born 09/27/41) consultant; Capitol Entertainment
Management Company (video
franchise), Vice Chairman
Michael Hegarty Trustee December 2004 Retired; AXA Financial (financial
(born 12/21/44) services and insurance), Vice
Chairman and Chief Operating
Officer (until May 2001); The
Equitable Life Assurance Society
(insurance), President and Chief
Operating Officer (until May 2001)
Amy B. Lane Trustee January 2004 Retired; Merrill Lynch & Co.,
(born 02/08/53) Inc., Managing Director,
Investment Banking Group (1997 to
February 2001); Borders Group,
Inc. (book and music retailer),
Director; Federal Realty
Investment Trust (real estate
investment trust), Trustee
Lawrence T. Perera Trustee July 1981 Hemenway & Barnes (attorneys),
(born 06/23/35) Partner
J. Dale Sherratt Trustee August 1993 Insight Resources, Inc.
(born 09/23/38) (acquisition planning
specialists), President; Wellfleet
Investments (investor in health care
companies), Managing General Partner
(since 1993); Cambridge Nutraceuticals
(professional nutritional products),
Chief Executive Officer (until May
2001)
Laurie J. Thomsen Trustee March 2005 Private investor; Prism Venture
(born 08/05/57) Partners (venture capital), Co-
founder and General Partner (until
June 2004); St. Paul Travelers
Companies (commercial property
liability insurance), Director
Robert W. Uek Trustee January 2006 Retired (since 1999);
(born 05/18/41) PricewaterhouseCoopers LLP
(professional services firm), Partner
(until 1999); Consultant to investment
company industry (since 2000); TT
International Funds (mutual fund
complex), Trustee (since 2000);
Hillview Investment Trust II Funds
(mutual fund complex), Trustee (since
2000)
OFFICERS
Maria F. Dwyer(3) President November 2005 Massachusetts Financial Services
(born 12/01/58) Company, Executive Vice President
and Chief Regulatory Officer
(since March 2004); Fidelity
Management & Research Company,
Vice President (prior to March
2004); Fidelity Group of Funds,
President and Treasurer (prior to
March 2004)
Tracy Atkinson(3) Treasurer September 2005 Massachusetts Financial Services
(born 12/30/64) Company, Senior Vice President
(since September 2004);
PricewaterhouseCoopers LLP,
Partner (prior to September 2004)
Christopher R. Bohane(3) Assistant July 2005 Massachusetts Financial Services
(born 1/18/74) Secretary and Company, Vice President and Senior
Assistant Clerk Counsel (since April 2003);
Kirkpatrick & Lockhart LLP (law
firm), Associate (prior to April
2003); Nvest Services Company,
Assistant Vice President and
Associate Counsel (prior to
January 2001)
Ethan D. Corey(3) Assistant July 2005 Massachusetts Financial Services
(born 11/21/63) Secretary and Company, Special Counsel (since
Assistant Clerk December 2004); Dechert LLP (law
firm), Counsel (prior to December
2004)
David L. DiLorenzo(3) Assistant July 2005 Massachusetts Financial Services
(born 8/10/68) Treasurer Company, Vice President (since
June 2005); JP Morgan Investor
Services, Vice President (January
2001 to June 2005); State Street
Bank, Vice President and Corporate
Audit Manager (prior to January
2001)
Timothy M. Fagan(3) Assistant September 2005 Massachusetts Financial Services
(born 7/10/68) Secretary and Company, Vice President and Senior
Assistant Clerk Counsel (since September 2005);
John Hancock Advisers, LLC, Vice
President and Chief Compliance
Officer (September 2004 to August
2005), Senior Attorney (prior to
September 2004); John Hancock
Group of Funds, Vice President and
Chief Compliance Officer
(September 2004 to December 2004)
Mark D. Fischer(3) Assistant July 2005 Massachusetts Financial Services
(born 10/27/70) Treasurer Company, Vice President (since May
2005); JP Morgan Investment
Management Company, Vice President
(prior to May 2005)
Brian T. Hourihan(3) Assistant September 2004 Massachusetts Financial Services
(born 11/11/64) Secretary and Company, Vice President, Senior
Assistant Clerk Counsel and Assistant Secretary
(since June 2004); Affiliated
Managers Group, Inc., Chief Legal
Officer/Centralized Compliance
Program (January to April 2004);
Fidelity Research & Management
Company, Assistant General Counsel
(prior to January 2004)
Ellen Moynihan(3) Assistant April 1997 Massachusetts Financial Services
(born 11/13/57) Treasurer Company, Vice President
Susan S. Newton(3) Assistant May 2005 Massachusetts Financial Services
(born 03/07/50) Secretary and Company, Senior Vice President and
Assistant Clerk Associate General Counsel (since
April 2005); John Hancock
Advisers, LLC, Senior Vice
President, Secretary and Chief
Legal Officer (prior to April
2005); John Hancock Group of
Funds, Senior Vice President,
Secretary and Chief Legal Officer
(prior to April 2005)
Susan A. Pereira(3) Assistant July 2005 Massachusetts Financial Services
(born 11/05/70) Secretary and Company, Vice President and Senior
Assistant Clerk Counsel (since June 2004); Bingham
McCutchen LLP (law firm),
Associate (January 2001 to June
2004); Preti, Flaherty, Beliveau,
Pachios & Haley, LLC, Associate
(prior to January 2001)
Frank L. Tarantino Independent Chief June 2004 Tarantino LLC (provider of
(born 03/07/44) Compliance compliance services), Principal
Officer (since June 2004); CRA Business
Strategies Group (consulting
services), Executive Vice
President (April 2003 to June
2004); David L. Babson & Co.
(investment adviser), Managing
Director, Chief Administrative
Officer and Director (February
1997 to March 2003)
James O. Yost(3) Assistant September 1990 Massachusetts Financial Services
(born 06/12/60) Treasurer Company, Senior Vice President
- ------------
(1) Date first appointed to serve as Trustee/officer of an MFS fund. Each Trustee has served continuously
since appointment unless indicated otherwise.
(2) Directorships or trusteeships of companies required to report to the Securities and Exchange Commission
(i.e., "public companies").
(3) "Interested person" of the Trust within the meaning of the Investment Company Act of 1940 (referred to as
the 1940 Act), which is the principal federal law governing investment companies like the fund, as a
result of position with MFS. The address of MFS is 500 Boylston Street, Boston, Massachusetts 02116.
Each Trustee and officer holds office until his or her successor is chosen and qualified or until his or her
earlier death, resignation, retirement or removal. Messrs. Butler, Ives, Sherratt and Uek and Mses. Lane and
Thomsen are members of the Trust's Audit Committee.
Each of the Trust's Trustees and officers holds comparable positions with certain other funds of which MFS or
a subsidiary is the investment adviser or distributor, and, in the case of the officers, with certain
affiliates of MFS. As of December 31, 2005, each Trustee served as a board member of 98 funds within the MFS
Family of Funds.
The Trust held a shareholders' meeting in 2005, and will hold a shareholders' meeting at least once every five
years thereafter, to elect Trustees.
The Statement of Additional Information contains further information about the Trustees and is available
without charge upon request by calling 1-800-225-2606.
- -----------------------------------------------------------------------------------------------------------
INVESTMENT ADVISER CUSTODIANS
Massachusetts Financial Services Company State Street Bank and Trust Company
500 Boylston Street, Boston, MA 02116-3741 225 Franklin Street, Boston, MA 02110
JP Morgan Chase Bank
DISTRIBUTOR One Chase Manhattan Plaza
MFS Fund Distributors, Inc. New York, New York 10081
500 Boylston Street, Boston, MA 02116-3741
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PORTFOLIO MANAGERS Ernst & Young LLP
S. Irfan Ali 200 Clarendon Street, Boston, MA 02116
Stephen Pesek
Maureen Pettirossi
BOARD REVIEW OF INVESTMENT ADVISORY AGREEMENT
The Investment Company Act of 1940 requires that both the full Board of Trustees
and a majority of the non-interested ("independent") Trustees, voting
separately, annually approve the continuation of the Fund's investment advisory
agreement with MFS. The Trustees consider matters bearing on the Fund and its
advisory arrangements at their meetings throughout the year, including a review
of performance data at each regular meeting. In addition, the independent
Trustees met several times over the course of three months beginning in May and
ending in July, 2005 ("contract review meetings") for the specific purpose of
considering whether to approve the continuation of the investment advisory
agreement for the Fund and the other investment companies that the Board
oversees (the "MFS Funds"). The independent Trustees were assisted in their
evaluation of the Fund's investment advisory agreement by independent legal
counsel, from whom they received separate legal advice and with whom they met
separately from MFS during various contract review meetings. The independent
Trustees were also assisted in this process by the MFS Funds' Independent Chief
Compliance Officer, a full-time senior officer appointed by and reporting to the
independent Trustees.
In connection with their deliberations regarding the continuation of the
investment advisory agreement, the Trustees, including the independent Trustees,
considered such information and factors as they believed, in light of the legal
advice furnished to them and their own business judgment, to be relevant. The
investment advisory agreement for the Fund was considered separately, although
the Trustees also took into account the common interests of all MFS Funds in
their review. As described below, the Trustees considered the nature, quality,
and extent of the various investment advisory, administrative, and shareholder
services performed by MFS under the existing investment advisory agreement and
other arrangements with the Fund.
In connection with their contract review meetings, the Trustees received and
relied upon materials which included, among other items: (i) information
provided by Lipper Inc. on the investment performance of the Fund for various
time periods ended December 31, 2004 and the investment performance of a group
of funds with substantially similar investment classifications/objectives (the
"Lipper performance universe"), as well as the investment performance of a group
of funds identified by objective criteria suggested by MFS ("peer funds"), (ii)
information provided by Lipper Inc. on the Fund's advisory fees and other
expenses and the advisory fees and other expenses of comparable funds identified
by Lipper (the "Lipper expense group"), as well as the advisory fees and other
expenses of peer funds identified by objective criteria suggested by MFS, (iii)
information provided by MFS on the advisory fees of comparable portfolios of
other clients of MFS, including institutional separate account and other
clients, (iv) information as to whether and to what extent applicable expense
waivers, reimbursements or fee "breakpoints" are observed for the Fund, (v)
information regarding MFS' financial results and financial condition, including
MFS' and certain of its affiliates' estimated profitability from services
performed for the Fund and the MFS Funds as a whole, (vi) MFS' views regarding
the outlook for the mutual fund industry and the strategic business plans of
MFS, (vii) descriptions of various functions performed by MFS for the Funds,
such as compliance monitoring and portfolio trading practices, and (viii)
information regarding the overall organization of MFS, including information
about MFS' senior management and other personnel providing investment advisory,
administrative and other services to the Fund and the other MFS Funds. The
comparative performance, fee and expense information prepared and provided by
Lipper Inc. was not independently verified and the independent Trustees did not
independently verify any information provided to them by MFS.
The Trustees' conclusion as to the continuation of the investment advisory
agreement was based on a comprehensive consideration of all information provided
to the Trustees and not the result of any single factor. Some of the factors
that figured particularly in the Trustees' deliberations are described below,
although individual Trustees may have evaluated the information presented
differently from one another, giving different weights to various factors. It is
also important to recognize that the fee arrangements for the Fund and other MFS
Funds are the result of years of review and discussion between the independent
Trustees and MFS, that certain aspects of such arrangements may receive greater
scrutiny in some years than others, and that the Trustees' conclusions may be
based, in part, on their consideration of these same arrangements during the
course of the year and in prior years.
Based on information provided by Lipper Inc. and MFS, the Trustees reviewed the
Fund's total return investment performance as well as the performance of peer
groups of funds over various time periods. The Trustees placed particular
emphasis on the total return performance of the Fund's Class A shares in
comparison to the performance of funds in its Lipper performance universe over
the three-year period ended December 31, 2004, which the Trustees believed was a
long enough period to reflect differing market conditions. The Fund's
performance was in the 54th percentile relative to the other funds in the
universe for this three-year period (the 1st percentile being the best
performers and the 100th percentile being the worst performers). The total
return performance of the Fund's Class A shares was in the 23rd percentile
for the one-year period and the 48th percentile for the five-year period
ended December 31, 2004 relative to the Lipper performance universe. Because of
the passage of time, these performance results are likely to differ from the
performance results for more recent periods, including those shown elsewhere in
this report.
In the course of their deliberations, the Trustees took into account information
provided by MFS in connection with the contract review meetings, as well as
during investment review meetings conducted with portfolio management personnel
during the course of the year regarding the Fund's performance. After reviewing
these and related factors, the Trustees concluded, within the context of their
overall conclusions regarding the investment advisory agreement, that they were
satisfied with MFS' responses and efforts relating to investment performance.
In assessing the reasonableness of the Fund's advisory fee, the Trustees
considered, among other information, the Fund's advisory fee and the total
expense ratio of the Fund's Class A shares as a percentage of average net assets
and the advisory fee and total expense ratios of peer groups of funds based on
information provided by Lipper Inc. and MFS. The Trustees considered whether the
Fund was subject to any fee waivers or reductions or expense limitations. The
Trustees also considered that, according to the Lipper data, the Fund's
effective advisory fee rate and total expense ratio were each lower than the
Lipper expense group median.
The Trustees also considered the advisory fees charged by MFS to institutional
accounts. In comparing these fees, the Trustees considered information provided
by MFS as to the generally broader scope of services provided by MFS to the Fund
in comparison to institutional accounts, the higher demands placed on MFS'
investment personnel and trading infrastructure as a result of the daily cash
in-flows and out-flows of the Fund, and the impact on MFS and expenses
associated with the more extensive regulatory regime to which the Fund is
subject in comparison to institutional accounts.
The Trustees also considered whether the Fund is likely to benefit from any
economies of scale in the management of the Fund in the event of growth in
assets of the Fund. They noted that the Fund's advisory fee rate schedule is not
currently subject to any breakpoints. Taking into account fee waivers or
reductions or expense limitations, if any, the Trustees determined not to
recommend any advisory fee breakpoints for the Fund at this time.
The Trustees also considered information prepared by MFS relating to MFS' costs
and profits with respect to the Fund, the MFS Funds considered as a group, and
other investment companies and accounts advised by MFS, as well as MFS'
methodologies used to determine and allocate its costs to the MFS Funds, the
Fund and other accounts and products for purposes of estimating profitability.
After reviewing these and other factors described herein, the Trustees
concluded, within the context of their overall conclusions regarding the
investment advisory agreement, that the advisory fees charged to the Fund
represent reasonable compensation in light of the nature and quality of the
services being provided by MFS to the Fund.
In addition, the Trustees considered MFS' resources and related efforts to
continue to retain, attract and motivate capable personnel to serve the Fund.
The Trustees also considered current and developing conditions in the financial
services industry, including the entry into the industry of large and
well-capitalized companies which are spending, and appear to be prepared to
continue to spend, substantial sums to engage personnel and to provide services
to competing investment companies. In this regard, the Trustees also considered
the financial resources of MFS and its ultimate parent, Sun Life Financial Inc.
The Trustees also considered the advantages and possible disadvantages to the
Fund of having an adviser which also serves other investment companies as well
as other accounts.
The Trustees also considered the nature, quality, cost, and extent of
administrative, transfer agency, and distribution services provided to the Fund
by MFS and its affiliates under agreements and plans other than the investment
advisory agreement, including any 12b-1 fees the Fund pays to MFS Fund
Distributors, Inc., an affiliate of MFS. The Trustees also considered the
nature, extent and quality of certain other services MFS performs or arranges
for on the Fund's behalf, including securities lending programs, directed
expense payment programs, class action recovery programs, and MFS' interaction
with third-party service providers, principally custodians and sub-custodians.
The Trustees concluded that the various non-advisory services provided by MFS
and its affiliates on behalf of the Funds were satisfactory.
The Trustees also considered benefits to MFS from the use of the Fund's
portfolio brokerage commissions to pay for research and other similar services
(including MFS' general policy to pay directly for third-party research), and
various other factors. Additionally, the Trustees considered so-called "fall-
out benefits" to MFS such as reputational value derived from serving as
investment manager to the Fund.
Based on their evaluation of factors that they deemed to be material, including
those factors described above, the Board of Trustees, including a majority of
the independent Trustees, concluded that the Fund's investment advisory
agreement with MFS should be continued for an additional one-year period,
commencing August 1, 2005.
A discussion regarding the Board's most recent review and renewal of the Fund's
investment advisory agreement is available by clicking on the fund's name under
"Select a fund" on the MFS Web site (mfs.com).
PROXY VOTING POLICIES AND INFORMATION
A general description of the MFS funds' proxy voting policies and procedures is
available without charge, upon request, by calling 1-800-225-2606, by visiting
the Proxy Voting section of mfs.com or by visiting the SEC's Web site at
http://www.sec.gov.
Information regarding how the fund voted proxies relating to portfolio
securities during the most recent twelve-month period ended June 30 is available
without charge by visiting the Proxy Voting section of mfs.com or by visiting
the SEC's Web site at http://www.sec.gov.
QUARTERLY PORTFOLIO DISCLOSURE
The fund will file a complete schedule of portfolio holdings with the Securities
and Exchange Commission (the Commission) for the first and third quarters of
each fiscal year on Form N-Q. The fund's Form N-Q may be reviewed and copied at
the:
Public Reference Room
Securities and Exchange Commission
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 fund's Form N-Q is available on
the EDGAR database on the Commission's Internet Web site at http:// www.sec.gov,
and copies of this information may be obtained, upon payment of a duplicating
fee, by electronic request at the following e-mail address: publicinfo@sec.gov
or by writing the Public Reference Section at the above address.
A shareholder can also obtain the quarterly portfolio holdings report at
mfs.com.
FEDERAL TAX INFORMATION (unaudited)
In January 2006, shareholders will be mailed a Form 1099-DIV reporting the
federal tax status of all distributions paid during the calendar year 2005.
For the year ended November 30, 2005, the amount of distributions from income
eligible for the 70% dividends received deduction for corporations is 100%.
The fund hereby designates the maximum amount allowable as qualified dividend
income eligible for a maximum tax rate of 15%, as provided for by the Jobs and
Growth Tax Relief Reconciliation Act of 2003. Complete information will be
reported in conjunction with your 2005 Form 1099-DIV.
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) 2006 MFS Investment Management(R)
MFS(R) investment products are offered through MFS Fund Distributors, Inc., 500
Boylston Street, Boston, MA 02116.
MIG-ANN-01/06 548M
ITEM 2. CODE OF ETHICS.
The Registrant has adopted a Code of Ethics pursuant to Section 406 of the
Sarbanes-Oxley Act and as defined in Form N-CSR that applies to the
Registrant's principal executive officer and principal financial and accounting
officer. The Registrant has amended its Code of Ethics to reflect that the
Registrant's Principal Financial Officer and Principal Executive Officer have
changed.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Messrs. Robert E. Butler, J. Atwood Ives and Robert W. Uek and Mses. Amy B.
Lane and Laurie J. Thomsen, members of the Audit Committee, have been
determined by the Board of Trustees in their reasonable business judgment to
meet the definition of "audit committee financial expert" as such term is
defined in Form N-CSR. In addition, Messrs. Butler, Ives and Uek and Mses. Lane
and Thomsen are "independent" members of the Audit Committee as defined in Form
N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
ITEMS 4(a) THROUGH 4(d) AND 4(g):
The Board of Trustees has appointed Ernst & Young ("E&Y") to serve as
independent accountants to the Massachusetts Investors Growth Stock Fund, a
series of the Registrant (the "Fund"). The tables below set forth the audit
fees billed to the Fund as well as fees for non-audit services provided to the
Fund and/or to the Fund's investment adviser, Massachusetts Financial Services
Company ("MFS") and to various entities either controlling, controlled by, or
under common control with MFS that provide ongoing services to the Funds ("MFS
Related Entities").
For the fiscal years ended November 30, 2005 and 2004, audit fees billed to the
Fund by E&Y were as follows:
Audit Fees
FEES BILLED BY E&Y: 2005 2004
---- ----
Massachusetts Investors Growth $38,970 $35,500
Stock Fund
TOTAL
For the fiscal years ended November 30, 2005 and 2004, fees billed by E&Y for
audit-related, tax and other services provided to the Funds and for
audit-related, tax and other services provided to MFS and MFS Related Entities
were as follows:
Audit-Related Fees(1) Tax Fees(2) All Other Fees(3)
FEES BILLED BY E&Y: 2005 2004 2005 2004 2005 2004
---- ---- ---- ---- ---- ----
To Massachusetts $0 $0 $10,015 $11,240 $3,031 $0
Investors Growth Stock
Fund
To MFS and MFS Related $0 $0 $15,500 $0 $670,399 $35,000
Entities of Massachusetts
Investors Growth Stock
Fund*
AGGREGATE FEES FOR NON-AUDIT
SERVICES:
2005 2004
To Massachusetts Investors $730,945 $53,240
Growth Stock Fund, MFS and
MFS Related Entities#
* This amount reflects the fees billed to MFS and MFS Related Entities for non-audit services relating directly
to the operations and financial reporting of the Funds (portions of which services also related to the
operations and financial reporting of other funds within the MFS Funds complex).
# This amount reflects the aggregate fees billed by E&Y for non-audit services rendered to the Fund and for
non-audit services rendered to MFS and the MFS Related Entities.
(1) The fees included under "Audit-Related Fees" are fees related to assurance and related services that are
reasonably related to the performance of the audit or review of financial statements, but not reported under
"Audit Fees," including accounting consultations, agreed-upon procedure reports, attestation reports, comfort
letters and internal control reviews.
(2) The fees included under "Tax Fees" are fees associated with tax compliance, tax advice and tax planning,
including services relating to the filing or amendment of federal, state or local income tax returns, regulated
investment company qualification reviews and tax distribution and analysis.
(3) The fees included under "All Other Fees" are fees for products and services provided by E&Y other than those
reported under "Audit Fees," "Audit-Related Fees" and "Tax Fees," including fees for services related to
analysis of fund administrative expenses, compliance program and records management projects.
For periods prior to May 6, 2003, the amounts shown above under "Audit-Related
Fees," "Tax Fees" and "All Other Fees" relate to permitted non-audit services
that would have been subject to pre-approval if the Securities and Exchange
Commission's rules relating to pre-approval of non-audit services had been in
effect.
ITEM 4(e)(1):
Set forth below are the policies and procedures established by the Audit
Committee of the Board of Trustees relating to the pre-approval of audit and
non-audit related services: To the extent required by applicable law,
pre-approval by the Audit Committee of the Board is needed for all audit and
permissible non-audit services rendered to the Funds and all permissible
non-audit services rendered to MFS or MFS Related Entities if the services
relate directly to the operations and financial reporting of the Registrant.
Pre-approval is currently on an engagement-by-engagement basis. In the event
pre-approval of such services is necessary between regular meetings of the
Audit Committee and it is not practical to wait to seek pre-approval at the
next regular meeting of the Audit Committee, pre-approval of such services may
be referred to the Chair of the Audit Committee for approval; provided that the
Chair may not pre-approve any individual engagement for such services exceeding
$50,000 or multiple engagements for such services in the aggregate exceeding
$100,000 between such regular meetings of the Audit Committee. Any engagement
pre-approved by the Chair between regular meetings of the Audit Committee shall
be presented for ratification by the entire Audit Committee at its next
regularly scheduled meeting.
ITEM 4(e)(2):
None, or 0%, of the services relating to the Audit-Related Fees, Tax Fees and
All Other Fees paid by the Fund and MFS and MFS Related Entities relating
directly to the operations and financial reporting of the Registrant disclosed
above were approved by the audit committee pursuant to paragraphs (c)(7)(i)(C)
of Rule 2-01 of Regulation S-X (which permits audit committee approval after
the start of the engagement with respect to services other than audit, review
or attest services, if certain conditions are satisfied).
ITEM 4(f): Not applicable.
ITEM 4(h): The Registrant's Audit Committee has considered whether the
provision by a Registrant's independent registered public accounting firm of
non-audit services to MFS and MFS Related Entities that were not pre-approved
by the Committee (because such services were provided prior to the
effectiveness of SEC rules requiring pre-approval or because such services did
not relate directly to the operations and financial reporting of the
Registrant) was compatible with maintaining the independence of the independent
registered public accounting firm as the Registrant's principal auditors.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to the Registrant.
ITEM 6. SCHEDULE OF INVESTMENTS
A schedule of investments of the Registrant is included as part of the report
to shareholders of such series under Item 1 of this Form N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the Registrant.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the Registrant.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable to the Registrant.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There were no material changes to the procedures by which shareholders may send
recommendations to the Board for nominees to the Registrant's Board since the
Registrant last provided disclosure as to such procedures in response to the
requirements of Item 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 Investment Company Act of
1940 (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 GROWTH STOCK FUND
------------------------------------------------------------------
By (Signature and Title)* MARIA F. DWYER
-----------------------------------------------------
Maria F. Dwyer, President
Date: January 23, 2006
----------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* MARIA F. DWYER
-----------------------------------------------------
Maria F. Dwyer, President (Principal Executive
Officer)
Date: January 23, 2006
----------------
By (Signature and Title)* TRACY ATKINSON
-----------------------------------------------------
Tracy Atkinson, Treasurer (Principal Financial Officer
and Accounting Officer)
Date: January 23, 2006
----------------
* Print name and title of each signing officer under his or her signature.