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 811-6102
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MFS SERIES TRUST VI
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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
Date of fiscal year end: October 31
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Date of reporting period: April 30, 2006
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ITEM 1. REPORTS TO STOCKHOLDERS.
MFS(R) GLOBAL TOTAL RETURN FUND 4/30/06
SEMIANNUAL REPORT
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LETTER FROM THE CEO 1
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PORTFOLIO COMPOSITION 2
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EXPENSE TABLE 3
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PORTFOLIO OF INVESTMENTS 5
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FINANCIAL STATEMENTS 16
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NOTES TO FINANCIAL STATEMENTS 29
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BOARD REVIEW OF INVESTMENT
ADVISORY AGREEMENT 41
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PROXY VOTING POLICIES AND
INFORMATION 41
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QUARTERLY PORTFOLIO DISCLOSURE 41
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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,
It has been said that change is the only constant in life. As investors have
seen, that theme is still accurate today as we recently have experienced
shifting economic cycles because of natural disasters and political instability
around the globe.
Markets worldwide have fluctuated in the past year as devastating hurricanes had
a dramatic effect on the international economy, particularly on oil prices. We
witnessed political unrest in the Middle East, highlighted by instability in
Iraq, and in Africa, the usually stable Nigeria also experienced violence. As a
result, energy prices have bounced up and down, with crude oil prices at one
point topping a record $70 per barrel.
Such cycles are not uncommon and in fact have almost become the norm in our
everyday lives. What does all of this mean to you as an investor? In times like
these, it helps to know that you're working with a seasoned investment
professional who has experience to guide you through difficult times. At MFS(R),
we believe our investment management team has the knowledge and confidence to
navigate through difficult cycles and at the same time see through adversity to
find investment opportunities for our clients and shareholders.
Our investment management process, honed over 80 years, combines a unique
concept of teamwork with our unwavering focus on the long term. We firmly
believe that the best way 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. Rebalance assets regularly to maintain a desired asset allocation. Of
course, these strategies cannot guarantee a profit or protect against a loss.
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 - through both up and down economic cycles.
Respectfully,
/s/ Robert J. Manning
Robert J. Manning
Chief Executive Officer and Chief Investment Officer
MFS Investment Management(R)
June 15, 2006
The opinions expressed in this letter are those of MFS, and no forecasts can be
guaranteed.
PORTFOLIO COMPOSITION
PORTFOLIO STRUCTURE(i)
Stocks 58.7%
Bonds 31.3%
Cash & Other Net Assets 9.4%
Preferred 0.6%
TOP TEN HOLDINGS (i)
United Kingdom Treasury, 8%, 2015 1.8%
-------------------------------------------------
United Kingdom Treasury,
5.75%, 2009 1.8%
-------------------------------------------------
Network Rail MTN Finance PLC,
2.913%, 2007 1.5%
-------------------------------------------------
Development Bank of Japan,
1.6%, 2014 1.5%
-------------------------------------------------
Bank of America Corp. 1.4%
-------------------------------------------------
Federal Republic of Germany,
6.25%, 2030 1.4%
-------------------------------------------------
Nestle S.A. 1.2%
-------------------------------------------------
Federal Republic of Germany,
6.25%, 2024 1.2%
-------------------------------------------------
Vodaphone Group PLC 1.2%
-------------------------------------------------
TOTAL S.A., ADR 1.2%
-------------------------------------------------
EQUITY SECTORS
Financial Services 15.0%
-------------------------------------------------
Utilities & Communications 7.1%
-------------------------------------------------
Energy 5.3%
-------------------------------------------------
Consumer Staples 4.8%
-------------------------------------------------
Health Care 4.6%
-------------------------------------------------
Autos & Housing 4.5%
-------------------------------------------------
Industrial Goods & Services 4.3%
-------------------------------------------------
Basic Materials 3.2%
-------------------------------------------------
Technology 2.9%
-------------------------------------------------
Leisure 2.3%
-------------------------------------------------
Retailing 1.9%
-------------------------------------------------
Transportation 1.5%
-------------------------------------------------
Special Products & Services 1.3%
-------------------------------------------------
FIXED INCOME MARKET SECTORS (i)
Non U.S. Government Bonds 22.7%
-------------------------------------------------
U.S. Government Agencies 3.0%
-------------------------------------------------
Commercial Mortgage-Backed
Securities 2.4%
-------------------------------------------------
Emerging Market Bonds 1.2%
-------------------------------------------------
U.S. Treasury Securities 0.7%
-------------------------------------------------
High Grade Corporates 0.7%
-------------------------------------------------
Municipal Bonds 0.3%
-------------------------------------------------
Mortgage-Backed Securities 0.3%
-------------------------------------------------
COUNTRY WEIGHTINGS (i)
United States 43.6%
-------------------------------------------------
United Kingdom 12.9%
-------------------------------------------------
Japan 11.0%
-------------------------------------------------
Germany 8.3%
-------------------------------------------------
France 7.1%
-------------------------------------------------
Switzerland 3.0%
-------------------------------------------------
Netherlands 1.8%
-------------------------------------------------
New Zealand 1.7%
-------------------------------------------------
Sweden 1.3%
-------------------------------------------------
All Others 9.3%
-------------------------------------------------
(i) For purposes of this graphical presentation, the bond component includes
both accrued interest amounts and the equivalent exposure from any derivative
holdings, if applicable.
Percentages are based on net assets as of 4/30/06.
The portfolio is actively managed, and current holdings may be different.
EXPENSE TABLE
FUND EXPENSES BORNE BY THE SHAREHOLDERS DURING THE PERIOD,
NOVEMBER 1, 2005 THROUGH APRIL 30, 2006.
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 November 1, 2005 through
April 30, 2006.
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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Expenses
Paid During
Annualized Beginning Ending Period(p)
Share Expense Account Value Account Value 11/01/05-
Class Ratio 11/01/05 4/30/06 4/30/06
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Actual 1.30% $1,000.00 $1,112.60 $6.81
A -----------------------------------------------------------------------
Hypothetical (h) 1.30% $1,000.00 $1,018.35 $6.51
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Actual 1.95% $1,000.00 $1,109.50 $10.20
B ------------------------------------------------------------------------
Hypothetical (h) 1.95% $1,000.00 $1,015.12 $9.74
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Actual 1.95% $1,000.00 $1,109.30 $10.20
C -----------------------------------------------------------------------
Hypothetical (h) 1.95% $1,000.00 $1,015.12 $9.74
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Actual 0.95% $1,000.00 $1,114.80 $4.98
I -----------------------------------------------------------------------
Hypothetical (h) 0.95% $1,000.00 $1,020.08 $4.76
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Actual 1.45% $1,000.00 $1,111.80 $7.59
R -----------------------------------------------------------------------
Hypothetical (h) 1.45% $1,000.00 $1,017.60 $7.25
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Actual 2.05% $1,000.00 $1,108.20 $10.72
R1 -----------------------------------------------------------------------
Hypothetical (h) 2.05% $1,000.00 $1,014.63 $10.24
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Actual 1.70% $1,000.00 $1,110.50 $8.90
R2 -----------------------------------------------------------------------
Hypothetical (h) 1.70% $1,000.00 $1,016.36 $8.50
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Actual 1.60% $1,000.00 $1,110.40 $8.37
R3 -----------------------------------------------------------------------
Hypothetical (h) 1.60% $1,000.00 $1,016.86 $8.00
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Actual 1.35% $1,000.00 $1,112.50 $7.07
R4 -----------------------------------------------------------------------
Hypothetical (h) 1.35% $1,000.00 $1,018.10 $6.76
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Actual 1.05% $1,000.00 $1,114.10 $5.50
R5 -----------------------------------------------------------------------
Hypothetical (h) 1.05% $1,000.00 $1,019.59 $5.26
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(h) 5% class return per year before expenses.
(p) Expenses paid is equal to each class' annualized expense ratio, as shown
above, multiplied by the average account value over the period, multiplied
by the number of days in the period, divided by the number of days in the
year. Expenses paid do not include any applicable sales charges (loads) or
redemption fees. If these transaction costs had been included, your costs
would have been higher.
PORTFOLIO OF INVESTMENTS (unaudited) - 4/30/06
The Portfolio of Investments is a complete list of all securities owned by your
fund. It is categorized by broad-based asset classes.
Common Stocks - 58.7%
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ISSUER SHARES/PAR VALUE ($)
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Advertising & Broadcasting - 1.5%
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CBS Corp., "B" 30,293 $ 771,563
Nippon Television Network Corp. 8,330 1,259,403
PagesJaunes Groupe S.A. (l) 73,650 2,128,135
Viacom, Inc., "B" (n) 30,293 1,206,570
Vivendi Universal S.A. (l) 29,650 1,082,242
Walt Disney Co. 38,850 1,086,246
WPP Group PLC 81,010 999,061
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$ 8,533,220
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Aerospace - 2.5%
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Lockheed Martin Corp. 85,840 $ 6,515,256
Northrop Grumman Corp. 74,090 4,956,621
United Technologies Corp. 50,390 3,164,996
------------
$ 14,636,873
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Alcoholic Beverages - 0.5%
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Diageo PLC 191,600 $ 3,158,704
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Apparel Manufacturers - 0.2%
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NIKE, Inc., "B" 15,920 $ 1,302,893
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Automotive - 2.6%
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Autoliv, Inc. 30,080 $ 1,674,651
Bayerische Motoren Werke AG (l) 64,900 3,528,775
Compagnie Generale des Etablissements Michelin (l) 26,970 1,945,711
Hyundai Mobis 11,520 1,017,459
Johnson Controls, Inc. 9,430 769,017
Nissan Motor Co. Ltd. 173,000 2,276,456
PSA Peugeot Citroen S.A. (l) 32,760 2,152,697
Renault S.A. (l) 16,640 1,930,823
------------
$ 15,295,589
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Banks & Credit Companies - 9.3%
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Aiful Corp. (l) 52,350 $ 3,129,082
American Express Co. 31,130 1,675,105
Bank of America Corp. 168,096 8,391,352
BNP Paribas - Ordinary 25,940 2,450,491
BNP Paribas (n) 2,690 245,466
Citigroup, Inc. 107,036 5,346,448
Credit Agricole S.A. 83,840 3,377,439
DBS Group Holdings Ltd. 169,000 1,902,720
DNB Holding A.S.A. (l) 97,600 1,352,173
Fannie Mae 54,740 2,769,844
Freddie Mac 14,150 863,999
ING Groep N.V. 70,350 2,862,396
Irish Life & Permanent PLC 55,080 1,404,677
Nordea Bank AB 108,340 1,393,897
PNC Financial Services Group, Inc. 35,990 2,572,205
Royal Bank of Scotland Group PLC 95,675 3,121,468
Shinhan Financial Group Co. Ltd. 21,310 1,061,941
Shinsei Bank Ltd. 276,000 1,933,565
SunTrust Banks, Inc. 46,890 3,626,004
Svenska Handelsbanken AB, "A" (l) 43,700 1,255,031
Takefuji Corp. 49,730 3,234,756
Wells Fargo & Co. 10,680 733,609
------------
$ 54,703,668
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Broadcast & Cable TV - 0.1%
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Premiere AG (l)(n) 32,780 $ 537,469
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Brokerage & Asset Managers - 2.0%
- --------------------------------------------------------------------------------------------------
Franklin Resources, Inc. 13,000 $ 1,210,560
Goldman Sachs Group, Inc. 37,300 5,978,817
Lehman Brothers Holdings, Inc. 10,040 1,517,546
Mellon Financial Corp. 43,410 1,633,518
Merrill Lynch & Co., Inc. 18,620 1,419,961
------------
$ 11,760,402
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Business Services - 0.3%
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Accenture Ltd., "A" 69,950 $ 2,033,447
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Chemicals - 1.6%
- --------------------------------------------------------------------------------------------------
Dow Chemical Co. 32,130 $ 1,304,799
E.I. du Pont de Nemours & Co. 27,980 1,233,918
Nalco Holding Co. (n) 40,270 759,090
PPG Industries, Inc. 34,260 2,299,531
Syngenta AG 28,640 3,991,236
------------
$ 9,588,574
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Computer Software - 0.3%
- --------------------------------------------------------------------------------------------------
Oracle Corp. (n) 104,850 $ 1,529,762
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Computer Software - Systems - 0.1%
- --------------------------------------------------------------------------------------------------
Dell, Inc. (n) 32,600 $ 854,120
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Construction- 1.9%
- --------------------------------------------------------------------------------------------------
Fletcher Building Ltd. 193,182 $ 1,120,785
Geberit AG 2,340 2,727,550
Italcementi S.p.A. 110,580 1,988,829
Masco Corp. 146,360 4,668,884
Sherwin-Williams Co. 14,780 752,893
------------
$ 11,258,941
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Consumer Goods & Services - 1.0%
- --------------------------------------------------------------------------------------------------
Kao Corp. 72,000 $ 1,936,624
Uni-Charm Corp. (l) 69,900 4,012,192
------------
$ 5,948,816
- --------------------------------------------------------------------------------------------------
Electrical Equipment - 0.5%
- --------------------------------------------------------------------------------------------------
Cooper Industries Ltd., "A" 17,930 $ 1,639,699
Legrand S.A. (n) 3,610 105,632
W.W. Grainger, Inc. 13,340 1,026,113
------------
$ 2,771,444
- --------------------------------------------------------------------------------------------------
Electronics - 2.2%
- --------------------------------------------------------------------------------------------------
Canon, Inc. 18,600 $ 1,424,041
Intel Corp. 79,460 1,587,611
Konica Minolta Holdings, Inc. (n) 106,500 1,404,210
OMRON Corp. 54,100 1,512,223
Ricoh Co. Ltd. 72,000 1,430,317
Royal Philips Electronics N.V. 37,390 1,289,775
Samsung Electronics Co. Ltd. 4,260 2,908,806
Taiwan Semiconductor Manufacturing Co. Ltd., ADR 98,900 1,036,472
------------
$ 12,593,455
- --------------------------------------------------------------------------------------------------
Energy - Independent - 1.4%
- --------------------------------------------------------------------------------------------------
Apache Corp. 25,670 $ 1,823,597
CNOOC Ltd. 1,211,500 976,607
Devon Energy Corp. 23,500 1,412,585
EOG Resources, Inc. 24,240 1,702,375
Norsk Hydro A.S.A. 14,450 2,222,032
------------
$ 8,137,196
- --------------------------------------------------------------------------------------------------
Energy - Integrated - 3.9%
- --------------------------------------------------------------------------------------------------
Amerada Hess Corp. 15,260 $ 2,186,300
Chevron Corp. 19,531 1,191,782
ConocoPhillips 55,150 3,689,535
Exxon Mobil Corp. 55,040 3,471,923
LUKOIL, ADR 7,550 684,030
Royal Dutch Shell PLC 142,500 4,869,816
Total S.A., ADR (l) 50,020 6,903,760
------------
$ 22,997,146
- --------------------------------------------------------------------------------------------------
Food & Drug Stores - 1.3%
- --------------------------------------------------------------------------------------------------
Carrefour S.A. 68,960 $ 3,999,148
Lawson, Inc. 34,500 1,310,069
William Morrison Supermarkets PLC 631,220 2,141,617
------------
$ 7,450,834
- --------------------------------------------------------------------------------------------------
Food & Non Alcoholic Beverages - 2.3%
- --------------------------------------------------------------------------------------------------
Archer Daniels Midland Co. 32,640 $ 1,186,138
Kellogg Co. 39,400 1,824,614
Kirin Beverage Corp. (l) 51,700 1,376,970
Nestle S.A. (l) 23,469 7,150,918
Nong Shim Co. Ltd. 3,814 1,065,566
Sara Lee Corp. 44,040 786,995
------------
$ 13,391,201
- --------------------------------------------------------------------------------------------------
Forest & Paper Products - 0.2%
- --------------------------------------------------------------------------------------------------
International Paper Co. 37,660 $ 1,368,941
- --------------------------------------------------------------------------------------------------
Health Maintenance Organizations - 0.1%
- --------------------------------------------------------------------------------------------------
CIGNA Corp. 7,270 $ 777,890
- --------------------------------------------------------------------------------------------------
Insurance- 3.7%
- --------------------------------------------------------------------------------------------------
Allstate Corp. 117,820 $ 6,655,652
Aviva PLC 141,714 2,067,808
Benfield Group PLC 156,140 1,105,020
Chubb Corp. 18,800 968,952
Genworth Financial, Inc., "A" 19,270 639,764
Hartford Financial Services Group, Inc. 23,640 2,173,225
Jardine Lloyd Thompson Group PLC 182,540 1,270,241
MetLife, Inc. 99,780 5,198,538
Swiss Reinsurance Co. (l) 19,190 1,398,981
------------
$ 21,478,181
- --------------------------------------------------------------------------------------------------
Leisure & Toys - 0.4%
- --------------------------------------------------------------------------------------------------
Heiwa Corp. (l) 63,300 $ 965,928
Namco Bandai Holdings, Inc. 78,500 1,132,321
------------
$ 2,098,249
- --------------------------------------------------------------------------------------------------
Machinery & Tools - 1.3%
- --------------------------------------------------------------------------------------------------
ASSA ABLOY AB, "B" (l) 80,400 $ 1,555,728
Deere & Co. 51,620 4,531,204
Illinois Tool Works, Inc. 12,550 1,288,885
------------
$ 7,375,817
- --------------------------------------------------------------------------------------------------
Metals & Mining - 0.5%
- --------------------------------------------------------------------------------------------------
Anglo American PLC 66,610 $ 2,833,291
- --------------------------------------------------------------------------------------------------
Natural Gas - Distribution - 0.7%
- --------------------------------------------------------------------------------------------------
Tokyo Gas Co. Ltd. (l) 897,000 $ 4,344,456
- --------------------------------------------------------------------------------------------------
Network & Telecom - 0.3%
- --------------------------------------------------------------------------------------------------
Cisco Systems, Inc. (n) 55,040 $ 1,153,088
ZTE Corp. 128,800 440,228
------------
$ 1,593,316
- --------------------------------------------------------------------------------------------------
Pharmaceuticals - 4.5%
- --------------------------------------------------------------------------------------------------
Abbott Laboratories 24,030 $ 1,027,042
Astellas Pharma, Inc. 49,900 2,083,462
AstraZeneca PLC 26,180 1,445,031
Eli Lilly & Co. 18,480 977,962
GlaxoSmithKline PLC 108,280 3,069,182
Johnson & Johnson 82,380 4,828,292
Merck & Co., Inc. 89,930 3,095,391
Novartis AG 43,300 2,481,710
Sanofi-Aventis (l) 25,110 2,367,332
Schering AG (l) 13,310 1,428,930
Tanabe Seiyaku Co. Ltd. 106,000 1,250,402
Wyeth 45,010 2,190,637
------------
$ 26,245,373
- --------------------------------------------------------------------------------------------------
Printing & Publishing - 0.3%
- --------------------------------------------------------------------------------------------------
Reed Elsevier PLC 184,020 $ 1,826,949
- --------------------------------------------------------------------------------------------------
Railroad & Shipping - 0.7%
- --------------------------------------------------------------------------------------------------
Burlington Northern Santa Fe Corp. 14,560 $ 1,157,957
Canadian National Railway Co. 59,700 2,681,127
------------
$ 3,839,084
- --------------------------------------------------------------------------------------------------
Specialty Chemicals - 0.9%
- --------------------------------------------------------------------------------------------------
Air Products & Chemicals, Inc. 12,910 $ 884,593
L'Air Liquide S.A. 12,776 2,763,505
L'Air Liquide S.A., Bearer Shares (l) 2,614 565,420
Praxair, Inc. 15,440 866,647
------------
$ 5,080,165
- --------------------------------------------------------------------------------------------------
Specialty Stores - 0.4%
- --------------------------------------------------------------------------------------------------
Gap, Inc. 85,020 $ 1,538,012
NEXT PLC 27,170 797,847
------------
$ 2,335,859
- --------------------------------------------------------------------------------------------------
Telecommunications - Wireless - 1.5%
- --------------------------------------------------------------------------------------------------
KDDI Corp. 285 $ 1,758,625
Vodafone Group PLC 2,927,423 6,905,897
------------
$ 8,664,522
- --------------------------------------------------------------------------------------------------
Telephone Services - 2.2%
- --------------------------------------------------------------------------------------------------
Deutsche Telekom AG (l) 120,500 $ 2,176,363
France Telecom S.A. (l) 83,330 1,945,401
Sprint Nextel Corp. 195,630 4,851,624
Telecom Corp. of New Zealand Ltd. 324,150 1,184,173
Telenor A.S.A. 144,550 1,674,713
Verizon Communications, Inc. 38,890 1,284,537
------------
$ 13,116,811
- --------------------------------------------------------------------------------------------------
Tobacco - 2.0%
- --------------------------------------------------------------------------------------------------
Altria Group, Inc. 85,980 $ 6,290,297
British American Tobacco PLC 152,090 3,884,307
Swedish Match AB (l) 120,810 1,812,708
------------
$ 11,987,312
- --------------------------------------------------------------------------------------------------
Trucking- 0.8%
- --------------------------------------------------------------------------------------------------
TNT N.V. (l) 122,360 $ 4,404,481
- --------------------------------------------------------------------------------------------------
Utilities - Electric Power - 2.7%
- --------------------------------------------------------------------------------------------------
Dominion Resources, Inc. 70,830 $ 5,303,042
E.ON AG 27,970 3,405,305
FPL Group, Inc. 52,030 2,060,388
Scottish Power PLC 86,700 885,237
Suez S.A. (l) 42,031 1,653,432
TXU Corp. 33,280 1,651,686
United Utilities PLC 80,070 978,717
------------
$ 15,937,807
- --------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS (IDENTIFIED COST, $267,715,781) $343,792,258
- --------------------------------------------------------------------------------------------------
Bonds - 29.9%
- --------------------------------------------------------------------------------------------------
Asset Backed & Securitized - 2.4%
- --------------------------------------------------------------------------------------------------
Commercial Mortgage Asset Trust, FRN, 1.128%, 2032 (a)(i) $ 17,831,764 $ 764,104
Commercial Mortgage Pass-Through Certificate, FRN,
5.0913%, 2017 (a) 1,400,000 1,399,803
Commercial Mortgage Pass-Through Certificates, FRN,
5.1013%, 2017 (a) 2,100,000 2,098,953
Deutsche Mortgage & Asset Receiving Corp., 6.538%, 2031 282,159 286,304
First Union National Bank Commercial Mortgage Trust, FRN,
1.194%, 2043 (a)(i) 26,019,610 979,173
IMPAC CMB Trust, FRN, 5.3094%, 2036 2,080,115 2,080,115
J.P. Morgan Chase Commercial Mortgage Securities Corp., FRN,
5.3819%, 2041 1,870,062 1,819,191
J.P. Morgan Chase Commercial Mortgage Securities Corp., FRN,
5.1013%, 2046 912,088 912,662
Lehman Brothers Floating Rate Commercial Mortgage Trust, FRN,
5.0613%, 2018 (a) 2,150,000 2,149,848
Wachovia Bank Commercial Mortgage Trust, FRN, 5.1413%, 2015 (a) 1,444,035 1,444,845
Wachovia Bank Commercial Mortgage Trust, FRN, 5.1913%, 2015 (a) 382,221 382,340
------------
$ 14,317,338
- --------------------------------------------------------------------------------------------------
Banks & Credit Companies - 0.8%
- --------------------------------------------------------------------------------------------------
Kazkommerts International B.V., 7%, 2009 $ 863,000 $ 865,158
Mizuho Capital Investment 1 Ltd., 6.686% to 2016, FRN to 2049 (a) 590,000 571,673
Ulster Bank Finance PLC, 2.789%, 2008 EUR 1,968,000 2,480,694
VTB Capital S.A., 7.5%, 2011 $ 823,000 862,093
------------
$ 4,779,618
- --------------------------------------------------------------------------------------------------
Emerging Market Quasi-Sovereign - 0.4%
- --------------------------------------------------------------------------------------------------
Gaz Capital S.A., 8.625%, 2034 $ 180,000 $ 217,242
Gazprom International S.A., 7.201%, 2020 334,000 346,993
Pemex Project Funding Master Trust, 8.625%, 2022 438,000 507,204
Petronas Capital Ltd., 7.875%, 2022 1,086,000 1,261,349
------------
$ 2,332,788
- --------------------------------------------------------------------------------------------------
Emerging Market Sovereign - 0.5%
- --------------------------------------------------------------------------------------------------
Aries Vermogensverwaltungs, 9.6%, 2014 (l) $ 750,000 $ 933,750
Republic of Bulgaria, 8.25%, 2015 541,000 623,394
United Mexican States, 5.625%, 2017 584,000 558,888
United Mexican States, 8.125%, 2019 700,000 808,500
------------
$ 2,924,532
- --------------------------------------------------------------------------------------------------
International Market Quasi-Sovereign - 6.2%
- --------------------------------------------------------------------------------------------------
Development Bank of Japan, 1.4%, 2012 JPY 114,000,000 $ 987,135
Development Bank of Japan, 1.6%, 2014 (l) JPY 990,000,000 8,536,373
Development Bank of Japan, 1.05%, 2023 (l) JPY 475,000,000 3,462,137
Japan Finance Corp. for Municipal Enterprises, 2%, 2016 JPY 350,000,000 3,084,209
KfW Bankengruppe, FRN, 2.563%, 2007 EUR 5,413,000 6,821,304
Landesbank Baden-Wurttemberg, FRN, 2.764%, 2007 EUR 1,939,000 2,445,122
Landesbank Baden-Wurttemberg, FRN, 2.704%, 2007 EUR 1,770,000 2,232,453
Network Rail MTN Finance PLC, FRN, 2.913%, 2007 EUR 6,885,000 8,683,379
------------
$ 36,252,112
- --------------------------------------------------------------------------------------------------
International Market Sovereign - 14.4%
- --------------------------------------------------------------------------------------------------
Bayerische Landesbank, 2.664%, 2006 EUR 284,000 $ 358,160
Federal Republic of Germany, 3.5%, 2008 EUR 1,075,000 1,356,302
Federal Republic of Germany, 5.25%, 2010 EUR 1,677,000 2,241,358
Federal Republic of Germany, 3.75%, 2015 EUR 2,681,000 3,332,618
Federal Republic of Germany, 6.25%, 2024 EUR 4,298,000 6,830,336
Federal Republic of Germany, 6.25%, 2030 EUR 4,864,000 7,989,211
Government of New Zealand, 6.5%, 2013 (l) NZD 7,912,000 5,238,265
Government of New Zealand, 6%, 2017 (l) NZD 3,309,000 2,139,465
Kingdom of Belgium, 3.75%, 2009 EUR 2,266,000 2,876,516
Kingdom of Belgium, 5%, 2012 EUR 931,000 1,249,845
Kingdom of Netherlands, 5%, 2012 EUR 1,496,855 2,008,492
Kingdom of Spain, 5.35%, 2011 EUR 2,376,000 3,220,886
Quebec Province, 1.6%, 2013 JPY 105,000,000 907,472
Republic of Austria, 5%, 2012 EUR 2,966,000 3,977,692
Republic of Finland, 3%, 2008 EUR 4,062,000 5,080,118
Republic of Finland, 5.375%, 2013 EUR 1,297,000 1,786,043
Republic of France, 4.75%, 2012 EUR 1,736,000 2,305,322
Republic of France, 6%, 2025 EUR 1,537,000 2,404,854
Republic of France, 4.75%, 2035 EUR 892,000 1,223,656
Republic of Ireland, 4.25%, 2007 EUR 1,502,000 1,919,643
Republic of Ireland, 4.6%, 2016 EUR 664,000 878,848
United Kingdom Treasury, 5.75%, 2009 GBP 5,355,000 10,098,307
United Kingdom Treasury, 5%, 2012 GBP 2,028,000 3,757,847
United Kingdom Treasury, 8%, 2015 GBP 4,477,000 10,274,828
United Kingdom Treasury, 4.25%, 2036 GBP 379,000 686,787
------------
$ 84,142,871
- --------------------------------------------------------------------------------------------------
Mortgage Backed - 0.3%
- --------------------------------------------------------------------------------------------------
Fannie Mae, 4.98%, 2015 $ 215,391 $ 205,811
Fannie Mae, 5.424%, 2016 352,000 348,989
Freddie Mac, 5%, 2024 1,111,057 1,104,356
------------
$ 1,659,156
- --------------------------------------------------------------------------------------------------
Municipals - 0.3%
- --------------------------------------------------------------------------------------------------
Honolulu, HI, City & County Rev., "A", MBIA, 5%, 2015 $ 1,625,000 $ 1,725,474
- --------------------------------------------------------------------------------------------------
Pharmaceuticals - 0.1%
- --------------------------------------------------------------------------------------------------
Teva Pharmaceutical Finance LLC, 5.55%, 2016 $ 900,000 $ 859,556
- --------------------------------------------------------------------------------------------------
U.S. Government Agencies- 3.0%
- --------------------------------------------------------------------------------------------------
Aid-Egypt, 4.45%, 2015 $ 1,113,000 $ 1,035,875
Fannie Mae, 4.25%, 2007 2,910,000 2,872,204
Freddie Mac, 4.2%, 2007 2,523,000 2,486,819
Small Business Administration, 4.76%, 2025 1,430,396 1,345,308
Small Business Administration, 5.09%, 2025 231,477 222,687
Small Business Administration, 5.36%, 2025 2,238,000 2,193,237
Small Business Administration, 5.21%, 2026 2,780,000 2,694,523
Small Business Administration, 5.35%, 2026 2,350,000 2,298,077
Small Business Administration, 5.57%, 2026 2,233,000 2,214,512
------------
$ 17,363,242
- --------------------------------------------------------------------------------------------------
U.S. Treasury Obligations - 1.5%
- --------------------------------------------------------------------------------------------------
U.S. Treasury Bonds, 8%, 2021 $ 1,529,000 $ 1,962,854
U.S. Treasury Notes, 3.125%, 2008 (f) 2,314,000 2,221,169
U.S. Treasury Notes, 4.25%, 2013 1,157,000 1,101,319
U.S. Treasury Notes, 4%, 2015 3,729,000 3,455,150
------------
$ 8,740,492
- --------------------------------------------------------------------------------------------------
TOTAL BONDS (IDENTIFIED COST, $176,767,673) $175,097,179
- --------------------------------------------------------------------------------------------------
Preferred Stocks - 0.6%
- --------------------------------------------------------------------------------------------------
Chemicals - 0.6%
- --------------------------------------------------------------------------------------------------
Henkel KGaA (Identified Cost, $2,874,639) 29,730 $ 3,574,211
- --------------------------------------------------------------------------------------------------
Warrants - 0.0%
- --------------------------------------------------------------------------------------------------
STRIKE FIRST
PRICE EXERCISE
- --------------------------------------------------------------------------------------------------
Chemicals - 0.0%
- --------------------------------------------------------------------------------------------------
Syngenta AG (n) (Identified Cost, $11,857) CHF 234.00 5/23/06 28,880 $ 46,295
- --------------------------------------------------------------------------------------------------
Rights - 0.0%
- --------------------------------------------------------------------------------------------------
Insurance - 0.0%
- --------------------------------------------------------------------------------------------------
Swiss Reinsurance Co. CHF 92.25 4/28/06 19,190 $ 0
- --------------------------------------------------------------------------------------------------
Short-Term Obligations - 9.5% (y)
- --------------------------------------------------------------------------------------------------
Edison Asset Securitization LLC, 4.82%, due 5/01/06 (t) $ 23,351,000 $ 23,351,000
General Electric Capital Corp., 4.82%, due 5/01/06 8,510,000 8,510,000
New Center Asset Trust, 4.82%, due 5/01/06 23,351,000 23,351,000
- --------------------------------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS, AT AMORTIZED COST
AND VALUE $ 55,212,000
- --------------------------------------------------------------------------------------------------
Collateral for Securities Loaned - 9.8%
- --------------------------------------------------------------------------------------------------
Morgan Stanley Repurchase Agreement, 4.895%, dated 4/28/06,
due 05/01/06, total to be received $50,344,497 (secured by
various U.S. Treasury and Federal Agency obligations in an
individually traded account), at Cost 50,337,653 $ 50,337,653
Navigator Securities Lending Prime Portfolio, at Cost and Net
Asset Value 7,052,820 7,052,820
- --------------------------------------------------------------------------------------------------
TOTAL COLLATERAL FOR SECURITIES LOANED $ 57,390,473
- --------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (IDENTIFIED COST, $559,972,423) (k) $635,112,416
- --------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - (8.5)% (49,633,525)
- --------------------------------------------------------------------------------------------------
NET ASSETS - 100.0% $585,478,891
- --------------------------------------------------------------------------------------------------
(a) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be sold in transactions exempt from registration,
normally to qualified institutional buyers. At period end, the aggregate
value of these securities was $9,790,739, representing 1.7% of net assets.
(f) All or a portion of the security has been segregated as collateral for an
open futures contract.
(i) Interest only security for which the fund receives interest on notional
principal (Par amount). Par amount shown is the notional principal and does
not reflect the cost of the security.
(k) As of April 30, 2006, the fund held securities fair valued in accordance
with the policies adopted by the Board of Trustees, aggregating $175,712,787
and 27.67% of market value, of which 27.23% of market value was provided by
an independent pricing service using an evaluated bid.
(l) All or a portion of this security is on loan.
(n) Non-income producing security.
(t) Security exempt from registration with the U.S. Securities and Exchange
Commission under Section 4(2) of the Securities Act of 1933.
(y) The rate shown represents an annualized yield at time of purchase.
The following abbreviations are used in the Portfolio of Investments and are
defined:
ADR American Depository Receipt
FRN Floating Rate Note. The interest rate is the rate in effect as of period
end.
Insurers
- -------------------------------------------------------------------------------
MBIA MBIA Insurance Corp.
Abbreviations have been used throughout this report to indicate amounts shown
in currencies other than the U.S. dollar. All amounts are stated in U.S.
dollars unless otherwise indicated. A list of abbreviations is shown below:
AUD Australian Dollar
CAD Canadian Dollar
CHF Swiss Franc
DKK Danish Krone
EUR Euro
GBP British Pound
JPY Japanese Yen
MXN Mexican Peso
NOK Norwegian Krone
NZD New Zealand Dollar
SEK Swedish Krona
TRY Turkish Lira
Derivatives
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Sales and Purchases in the table below are reported by currency.
NET UNREALIZED
CONTRACTS TO CONTRACTS APPRECIATION
DELIVER/RECEIVE SETTLEMENT DATE IN EXCHANGE FOR AT VALUE (DEPRECIATION)
- ------------------------------------------------------------------------------------------
SALES
- -----------------------------------------------------------------------------------------
AUD 1,517,025 6/07/06 $1,135,974 $1,151,907 $(15,933)
CAD 465,864 5/15/06 400,000 416,444 (16,444)
CHF 1,410,697 5/08/06 1,135,939 1,137,719 (1,780)
DKK 13,478,719 5/10/06 2,193,695 2,280,412 (86,717)
EUR 7,817,027 5/17/06 9,684,839 9,872,773 (187,934)
GBP 8,835,378 6/05/06 15,463,743 16,103,257 (639,514)
JPY 469,675,900 5/17/06 - 6/05/06 4,094,935 4,143,780 (48,845)
NOK 12,172,521 5/10/06 - 6/08/06 1,888,791 1,974,758 (85,967)
NZD 17,989,280 6/06/06 10,921,188 11,438,835 (517,647)
SEK 14,576,527 5/08/06 - 5/10/06 1,866,082 1,981,371 (115,289)
- -----------------------------------------------------------------------------------------
$48,785,186 $50,501,256 $(1,716,070)
- -----------------------------------------------------------------------------------------
PURCHASES
- -----------------------------------------------------------------------------------------
AUD 3,941,825 6/06/06 - 6/07/06 $2,865,279 $2,993,130 $127,851
CAD 6,333,485 5/15/06 5,460,788 5,661,607 200,819
CHF 2,226,020 5/08/06 1,721,871 1,795,271 73,400
DKK 13,478,719 5/10/06 2,163,518 2,280,411 116,893
EUR 16,518,294 5/17/06 - 6/13/06 20,194,431 20,874,958 680,527
GBP 2,386,147 6/05/06 4,238,682 4,348,964 110,282
JPY 5,112,906,227 5/17/06 43,849,758 45,064,874 1,215,116
MXN 6,611,340 5/09/06 600,000 597,381 (2,619)
NOK 12,172,521 5/10/06 - 6/08/06 1,826,802 1,974,758 147,956
NZD 5,889,102 6/06/06 3,672,921 3,744,701 71,780
SEK 26,250,682 5/10/06 3,436,918 3,568,419 131,501
TRY 764,645 5/25/06 576,438 574,853 (1,585)
- -----------------------------------------------------------------------------------------
$90,607,406 $93,479,327 $2,871,921
- -----------------------------------------------------------------------------------------
At April 30, 2006, forward foreign currency purchases and sales under master
netting agreements excluded above amounted to a net receivable of $458,422 with
Merrill Lynch International.
FUTURES CONTRACTS OUTSTANDING AT APRIL 30, 2006:
UNREALIZED
EXPIRATION APPRECIATION
DESCRIPTION CONTRACTS VALUE DATE (DEPRECIATION)
- ---------------------------------------------------------------------------------------------
Japan Government Bond 10 yr (Long) 9 $10,490,045 Jun-06 $(183,185)
U.S. Treasury Note 10 yr (Short) 46 $4,856,594 Jun-06 93,816
- ---------------------------------------------------------------------------------------------
$(89,369)
- ---------------------------------------------------------------------------------------------
At April 30, 2006, the fund had sufficient cash and/or securities to cover any
commitments under these derivative contracts.
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS Statement of Assets and Liabilities (unaudited)
This statement represents your fund's balance sheet, which details the assets
and liabilities comprising the total value of the fund.
AT 4/30/06
ASSETS
- ------------------------------------------------------------------------------------------
Investments, at value, including $55,492,226 of securities
on loan (identified cost, $559,972,423) $635,112,416
Cash 40,260
Foreign currency, at value (identified cost, $4,546,408) 4,586,770
Receivable for forward foreign currency exchange contracts 2,876,120
Receivable for forward foreign currency exchange contracts
subject to master netting agreements 458,422
Receivable for daily variation margin on open futures
contracts 41,224
Receivable for investments sold 9,121,362
Receivable for fund shares sold 1,107,622
Interest and dividends receivable 3,662,040
Receivable from investment adviser 404,133
- ------------------------------------------------------------------------------------------
Total assets $657,410,369
- ------------------------------------------------------------------------------------------
LIABILITIES
- ------------------------------------------------------------------------------------------
Payable for forward foreign currency exchange contracts $1,720,269
Payable for investments purchased 10,960,030
Payable for fund shares reacquired 1,348,076
Collateral for securities loaned, at value (c) 57,390,473
Payable to affiliates
Management fee 151,820
Shareholder servicing costs 96,171
Distribution and service fees 27,445
Administrative services fee 956
Retirement plan administration and services fees 38
Payable for independent trustees' compensation 63,077
Accrued expenses and other liabilities 173,123
- ------------------------------------------------------------------------------------------
Total liabilities $71,931,478
- ------------------------------------------------------------------------------------------
Net assets $585,478,891
- ------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------------------
Paid-in capital $487,022,567
Unrealized appreciation (depreciation) on investments and
translation of assets and liabilities in foreign
currencies 76,746,944
Accumulated net realized gain (loss) on investments and
foreign currency transactions 19,907,058
Undistributed net investment income 1,802,322
- ------------------------------------------------------------------------------------------
Net assets $585,478,891
- ------------------------------------------------------------------------------------------
Shares of beneficial interest outstanding 39,934,380
- ------------------------------------------------------------------------------------------
Statement of Assets and Liabilities (unaudited) - continued
Class A shares
- ------------------------------------------------------------------------------------------
Net assets $376,362,402
Shares outstanding 25,781,663
- ------------------------------------------------------------------------------------------
Net asset value per share $14.60
- ------------------------------------------------------------------------------------------
Offering price per share (100/95.25Xnet asset value
per share) $15.33
- ------------------------------------------------------------------------------------------
Class B shares
- ------------------------------------------------------------------------------------------
Net assets $117,650,216
Shares outstanding 7,935,866
- ------------------------------------------------------------------------------------------
Net asset value and offering price per share $14.83
- ------------------------------------------------------------------------------------------
Class C shares
- ------------------------------------------------------------------------------------------
Net assets $83,950,230
Shares outstanding 5,699,826
- ------------------------------------------------------------------------------------------
Net asset value and offering price per share $14.73
- ------------------------------------------------------------------------------------------
Class I shares
- ------------------------------------------------------------------------------------------
Net assets $3,234,520
Shares outstanding 222,964
- ------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price
per share $14.51
- ------------------------------------------------------------------------------------------
Class R shares
- ------------------------------------------------------------------------------------------
Net assets $2,326,721
Shares outstanding 160,050
- ------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price
per share $14.54
- ------------------------------------------------------------------------------------------
Class R1 shares
- ------------------------------------------------------------------------------------------
Net assets $251,581
Shares outstanding 17,088
- ------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price
per share $14.72
- ------------------------------------------------------------------------------------------
Class R2 shares
- ------------------------------------------------------------------------------------------
Net assets $107,175
Shares outstanding 7,276
- ------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price
per share $14.73
- ------------------------------------------------------------------------------------------
Class R3 shares
- ------------------------------------------------------------------------------------------
Net assets $793,808
Shares outstanding 54,618
- ------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price
per share $14.53
- ------------------------------------------------------------------------------------------
Statement of Assets and Liabilities (unaudited) - continued
Class R4 shares
- ------------------------------------------------------------------------------------------
Net assets $745,618
Shares outstanding 51,146
- ------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price
per share $14.58
- ------------------------------------------------------------------------------------------
Class R5 shares
- ------------------------------------------------------------------------------------------
Net assets $56,620
Shares outstanding 3,883
- ------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price
per share $14.58
- ------------------------------------------------------------------------------------------
(c) Non-cash collateral not included.
On sales of $100,000 or more, the offering price of Class A shares is reduced. A
contingent deferred sales charge may be imposed on redemptions of Class A, Class
B, and Class C shares.
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS Statement of Operations (unaudited)
This statement describes how much your fund earned in investment income and
accrued in expenses. It also describes any gains and/or losses generated by fund
operations.
SIX MONTHS ENDED 4/30/06
NET INVESTMENT INCOME
- -------------------------------------------------------------------------------------------
Income
Interest $4,432,431
Dividends 3,918,312
Foreign taxes withheld (175,181)
- -------------------------------------------------------------------------------------------
Total investment income $8,175,562
- -------------------------------------------------------------------------------------------
Expenses
Management fee $2,358,925
Distribution and service fees 1,622,063
Shareholder servicing costs 519,842
Administrative services fee 34,611
Retirement plan administration and services fees 1,288
Independent trustees' compensation 9,122
Custodian fee 130,716
Shareholder communications 57,095
Auditing fees 25,621
Legal fees 6,519
Miscellaneous 128,607
- -------------------------------------------------------------------------------------------
Total expenses $4,894,409
- -------------------------------------------------------------------------------------------
Fees paid indirectly (39,700)
Reduction of expenses by investment adviser (591,811)
- -------------------------------------------------------------------------------------------
Net expenses $4,262,898
- -------------------------------------------------------------------------------------------
Net investment income $3,912,664
- -------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
- -------------------------------------------------------------------------------------------
Realized gain (loss) (identified cost basis)
Investment transactions $34,734,630
Futures contracts (123,414)
Foreign currency transactions (1,088,842)
- -------------------------------------------------------------------------------------------
Net realized gain (loss) on investments and foreign
currency transactions $33,522,374
- -------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation)
Investments $19,499,228
Futures contracts 62,541
Translation of assets and liabilities in foreign currencies 3,033,948
- -------------------------------------------------------------------------------------------
Net unrealized gain (loss) on investments and foreign
currency translation $22,595,717
- -------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and
foreign currency $56,118,091
- -------------------------------------------------------------------------------------------
Change in net assets from operations $60,030,755
- -------------------------------------------------------------------------------------------
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.
SIX MONTHS ENDED YEAR ENDED
4/30/06 10/31/05
(UNAUDITED)
CHANGE IN NET ASSETS
- ----------------------------------------------------------------------------------------
FROM OPERATIONS
- ----------------------------------------------------------------------------------------
Net investment income $3,912,664 $7,590,844
Net realized gain (loss) on investments and foreign
currency transactions 33,522,374 56,533,830
Net unrealized gain (loss) on investments and foreign
currency translation 22,595,717 (24,553,918)
- ----------------------------------------------------------------------------------------
Change in net assets from operations $60,030,755 $39,570,756
- ----------------------------------------------------------------------------------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS
--------------------------------------------------------------------------------
From net investment income
Class A $(2,575,096) $(11,999,109)
Class B (209,531) (3,414,168)
Class C (178,204) (1,726,657)
Class I (31,761) (108,523)
Class R (13,346) (60,209)
Class R1 (219) (556)
Class R2 (676) (591)
Class R3 (1,898) (4,662)
Class R4 (378) (656)
Class R5 (481) (690)
From net realized gain on investments and
foreign currency transactions
Class A (27,058,316) (21,507,585)
Class B (9,148,385) (9,135,951)
Class C (5,867,929) (4,107,200)
Class I (248,822) (174,939)
Class R (161,515) (95,337)
Class R1 (6,293) --
Class R2 (9,823) --
Class R3 (12,793) (9,689)
Class R4 (4,033) --
Class R5 (3,950) --
- ----------------------------------------------------------------------------------------
Total distributions declared to shareholders $(45,533,449) $(52,346,522)
- ----------------------------------------------------------------------------------------
Change in net assets from fund share transactions $11,674,764 $83,530,915
- ----------------------------------------------------------------------------------------
Redemption fees $-- $3,682
- ----------------------------------------------------------------------------------------
Total change in net assets $26,172,070 $70,758,831
- ----------------------------------------------------------------------------------------
NET ASSETS
- ----------------------------------------------------------------------------------------
At beginning of period $559,306,821 $488,547,990
At end of period (including undistributed net investment
income of $1,802,322 and $901,248, respectively) $585,478,891 $559,306,821
- ----------------------------------------------------------------------------------------
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 semiannual
period and the past 5 fiscal 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.
SIX MONTHS YEARS ENDED 10/31
ENDED --------------------------------------------------------------
CLASS A 4/30/06 2005 2004 2003 2002 2001
(UNAUDITED)
Net asset value, beginning of period $14.30 $14.73 $12.98 $11.41 $11.64 $13.76
- -----------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM
INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.11 $0.24 $0.19 $0.18 $0.21 $0.22
Net realized and unrealized gain
(loss) on investments and foreign
currency 1.40 0.94 1.97 1.63 (0.33) (1.02)
- -----------------------------------------------------------------------------------------------------------------------
Total from investment operations $1.51 $1.18 $2.16 $1.81 $(0.12) $(0.80)
- -----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------
From net investment income $(0.10) $(0.56) $(0.41) $(0.24) $(0.11) $(0.48)
From net realized gain on
investments and foreign currency
transactions (1.11) (1.05) -- -- -- (0.82)
From paid-in capital -- -- -- -- -- (0.02)
- -----------------------------------------------------------------------------------------------------------------------
Total distributions declared to
shareholders $(1.21) $(1.61) $(0.41) $(0.24) $(0.11) $(1.32)
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $14.60 $14.30 $14.73 $12.98 $11.41 $11.64
- -----------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s)(t) 11.26(n) 8.26 16.94 16.09 (1.02) (6.38)
- -----------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------------
Expenses before expense
reductions (f) 1.51(a) 1.55(m) 1.54 1.54 1.53 1.47
Expenses after expense reductions (f) 1.30(a) 1.48 1.54 1.54 1.53 1.47
Net investment income 1.62(a) 1.64 1.37 1.53 1.79 1.80
Portfolio turnover 39 82 76 105 72 69
Net assets at end of period
(000 Omitted) $376,362 $353,745 $298,826 $261,042 $213,983 $197,374
- -----------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED --------------------------------------------------------------
CLASS B 4/30/06 2005 2004 2003 2002 2001
(UNAUDITED)
Net asset value, beginning of period $14.47 $14.82 $13.03 $11.43 $11.65 $13.72
- -----------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM
INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.07 $0.14 $0.10 $0.11 $0.13 $0.14
Net realized and unrealized gain
(loss) on investments and foreign
currency 1.43 0.95 1.99 1.62 (0.31) (1.03)
- -----------------------------------------------------------------------------------------------------------------------
Total from investment operations $1.50 $1.09 $2.09 $1.73 $(0.18) $(0.89)
- -----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------
From net investment income $(0.03) $(0.39) $(0.30) $(0.13) $(0.04) $(0.34)
From net realized gain on
investments and foreign currency
transactions (1.11) (1.05) -- -- -- (0.82)
From paid-in capital -- -- -- -- -- (0.02)
- -----------------------------------------------------------------------------------------------------------------------
Total distributions declared to
shareholders $(1.14) $(1.44) $(0.30) $(0.13) $(0.04) $(1.18)
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $14.83 $14.47 $14.82 $13.03 $11.43 $11.65
- -----------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s)(t) 10.95(n) 7.56 16.14 15.33 (1.58) (7.05)
- -----------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------------
Expenses before expense
reductions (f) 2.16(a) 2.20(m) 2.20 2.20 2.18 2.12
Expenses after expense reductions (f) 1.95(a) 2.13 2.20 2.20 2.18 2.12
Net investment income 0.96(a) 0.98 0.72 0.88 1.12 1.14
Portfolio turnover 39 82 76 105 72 69
Net assets at end of period
(000 Omitted) $117,650 $124,013 $129,141 $129,378 $84,729 $104,442
- -----------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED --------------------------------------------------------------
CLASS C 4/30/06 2005 2004 2003 2002 2001
(UNAUDITED)
Net asset value, beginning
of period $14.39 $14.76 $12.99 $11.40 $11.62 $13.68
- -----------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM
INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.07 $0.15 $0.10 $0.11 $0.13 $0.14
Net realized and unrealized gain (loss)
on investments and foreign currency 1.41 0.94 1.97 1.62 (0.31) (1.02)
- -----------------------------------------------------------------------------------------------------------------------
Total from investment operations $1.48 $1.09 $2.07 $1.73 $(0.18) $(0.88)
- -----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------
From net investment income $(0.03) $(0.41) $(0.30) $(0.14) $(0.04) $(0.34)
From net realized gain on investments and
foreign currency transactions (1.11) (1.05) -- -- -- (0.82)
From paid-in capital -- -- -- -- -- (0.02)
- -----------------------------------------------------------------------------------------------------------------------
Total distributions declared to
shareholders $(1.14) $(1.46) $(0.30) $(0.14) $(0.04) $(1.18)
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $14.73 $14.39 $14.76 $12.99 $11.40 $11.62
- -----------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s)(t) 10.93(n) 7.59 16.12 15.27 (1.56) (7.03)
- -----------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 2.16(a) 2.19(m) 2.20 2.20 2.18 2.12
Expenses after expense reductions (f) 1.95(a) 2.12 2.20 2.20 2.18 2.12
Net investment income 0.98(a) 1.00 0.72 0.89 1.13 1.14
Portfolio turnover 39 82 76 105 72 69
Net assets at end of period (000 Omitted) $83,950 $75,974 $57,119 $54,438 $35,660 $38,230
- -----------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED --------------------------------------------------------------
CLASS I 4/30/06 2005 2004 2003 2002 2001
(UNAUDITED)
Net asset value, beginning of period $14.23 $14.69 $12.96 $11.42 $11.65 $13.80
- -----------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM
INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.14 $0.29 $0.24 $0.25 $0.25 $0.27
Net realized and unrealized gain (loss)
on investments and foreign currency 1.39 0.93 1.96 1.60 (0.32) (1.03)
- -----------------------------------------------------------------------------------------------------------------------
Total from investment operations $1.53 $1.22 $2.20 $1.85 $(0.07) $(0.76)
- -----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------
From net investment income $(0.14) $(0.63) $(0.47) $(0.31) $(0.16) $(0.55)
From net realized gain on investments and
foreign currency transactions (1.11) (1.05) -- -- -- (0.82)
From paid-in capital -- -- -- -- -- (0.02)
- -----------------------------------------------------------------------------------------------------------------------
Total distributions declared to
shareholders $(1.25) $(1.68) $(0.47) $(0.31) $(0.16) $(1.39)
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $14.51 $14.23 $14.69 $12.96 $11.42 $11.65
- -----------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 11.48(n) 8.65 17.31 16.49 (0.65) (6.06)
- -----------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.16(a) 1.19(m) 1.16 1.20 1.18 1.12
Expenses after expense reductions (f) 0.95(a) 1.12 1.16 1.20 1.18 1.12
Net investment income 1.96(a) 1.99 1.59 1.93 2.14 2.14
Portfolio turnover 39 82 76 105 72 69
Net assets at end of period (000 Omitted) $3,235 $3,170 $2,286 $56,010 $1,540 $1,307
- -----------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED ---------------------------------
CLASS R 4/30/06 2005 2004 2003(i)
(UNAUDITED)
Net asset value, beginning of period $14.24 $14.71 $12.97 $11.54
- -------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------------------------------------------------
Net investment income (d) $0.10 $0.22 $0.21 $0.14
Net realized and unrealized gain (loss) on investments
and foreign currency 1.40 0.93 1.94 1.40(g)
- -------------------------------------------------------------------------------------------------------
Total from investment operations $1.50 $1.15 $2.15 $1.54
- -------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------
From net investment income $(0.09) $(0.57) $(0.41) $(0.11)
From net realized gain on investments and foreign
currency transactions (1.11) (1.05) -- --
- -------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(1.20) $(1.62) $(0.41) $(0.11)
- -------------------------------------------------------------------------------------------------------
Net asset value, end of period $14.54 $14.24 $14.71 $12.97
- -------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 11.18(n) 8.08 16.89 13.41(n)
- -------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.66(a) 1.68(m) 1.71 1.68(a)
Expenses after expense reductions (f) 1.45(a) 1.61 1.71 1.68(a)
Net investment income 1.48(a) 1.52 1.24 1.34(a)
Portfolio turnover 39 82 76 105
Net assets at end of period (000 Omitted) $2,327 $2,043 $1,043 $12
- -------------------------------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED
CLASS R1 ENDED 4/30/06 10/31/05(i)
(UNAUDITED)
Net asset value, beginning of period $14.40 $14.42
- ---------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------------------------------------------------------
Net investment income (d) $0.07 $0.08
Net realized and unrealized gain (loss) on investments
and foreign currency 1.40 0.06(g)
- ---------------------------------------------------------------------------------------------------------
Total from investment operations $1.47 $0.14
- ---------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------
From net investment income $(0.04) $(0.16)
From net realized gain on investments and foreign currency transactions (1.11) --
- ---------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(1.15) $(0.16)
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $14.72 $14.40
- ---------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 10.82(n) 0.99(n)
- ---------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 2.36(a) 2.37(a)(m)
Expenses after expense reductions (f) 2.05(a) 2.28(a)
Net investment income 0.94(a) 0.91(a)
Portfolio turnover 39 82
Net assets at end of period (000 Omitted) $252 $52
- ---------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEAR ENDED
CLASS R2 ENDED 4/30/06 10/31/05(i)
(UNAUDITED)
Net asset value, beginning of period $14.42 $14.42
- ---------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------------------------------------------------------
Net investment income (d) $0.09 $0.10
Net realized and unrealized gain (loss) on investments
and foreign currency 1.41 0.07(g)
- ---------------------------------------------------------------------------------------------------------
Total from investment operations $1.50 $0.17
- ---------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------
From net investment income $(0.08) $(0.17)
From net realized gain on investments and foreign currency transactions (1.11) --
- ---------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(1.19) $(0.17)
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $14.73 $14.42
- ---------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 11.05(n) 1.20(n)
- ---------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 2.06(a) 2.06(a)(m)
Expenses after expense reductions (f) 1.70(a) 1.97(a)
Net investment income 1.21(a) 1.23(a)
Portfolio turnover 39 82
Net assets at end of period (000 Omitted) $107 $51
- ---------------------------------------------------------------------------------------------------------
YEARS ENDED 10/31
SIX MONTHS -------------------
CLASS R3 ENDED 4/30/06 2005 2004
(UNAUDITED)
Net asset value, beginning of period $14.24 $14.67 $12.97
- --------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.10 $0.18 $0.12
Net realized and unrealized gain (loss) on investments and
foreign currency 1.38 0.94 1.99
- --------------------------------------------------------------------------------------------------------------------
Total from investment operations $1.48 $1.12 $2.11
- --------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------------------------
From net investment income $(0.08) $(0.50) $(0.41)
From net realized gain on investments and foreign currency
transactions (1.11) (1.05) --
- --------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(1.19) $(1.55) $(0.41)
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $14.53 $14.24 $14.67
- --------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 11.04(n) 7.87 16.52
- --------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- --------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.91(a) 1.95(m) 1.95
Expenses after expense reductions (f) 1.60(a) 1.87 1.95
Net investment income 1.57(a) 1.24 0.91
Portfolio turnover 39 82 76
Net assets at end of period (000 Omitted) $794 $159 $133
- --------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEAR ENDED
CLASS R4 ENDED 4/30/06 10/31/05(i)
(UNAUDITED)
Net asset value, beginning of period $14.28 $14.26
- -----------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------------
Net investment income (d) $0.14 $0.14
Net realized and unrealized gain (loss) on investments
and foreign currency 1.37 0.07(g)
- -----------------------------------------------------------------------------------------------------
Total from investment operations $1.51 $0.21
- -----------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------
From net investment income $(0.10) $(0.19)
From net realized gain on investments and foreign currency transactions (1.11) --
- -----------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(1.21) $(0.19)
- -----------------------------------------------------------------------------------------------------
Net asset value, end of period $14.58 $14.28
- -----------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 11.25(n) 1.48(n)
- -----------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.56(a) 1.57(a)(m)
Expenses after expense reductions (f) 1.35(a) 1.50(a)
Net investment income 2.16(a) 1.70(a)
Portfolio turnover 39 82
Net assets at end of period (000 Omitted) $746 $51
- -----------------------------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED
CLASS R5 ENDED 4/30/06 10/31/05(i)
(UNAUDITED)
Net asset value, beginning of period $14.29 $14.26
- -----------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------------
Net investment income (d) $0.13 $0.17
Net realized and unrealized gain (loss) on investments
and foreign currency 1.40 0.06(g)
- -----------------------------------------------------------------------------------------------------
Total from investment operations $1.53 $0.23
- -----------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------
From net investment income $(0.13) $(0.20)
From net realized gain on investments and foreign currency
transactions (1.11) --
- -----------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(1.24) $(0.20)
- -----------------------------------------------------------------------------------------------------
Net asset value, end of period $14.58 $14.29
- -----------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 11.41(n) 1.62(n)
- -----------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.26(a) 1.27(a)(m)
Expenses after expense reductions (f) 1.05(a) 1.20(a)
Net investment income 1.88(a) 2.00(a)
Portfolio turnover 39 82
Net assets at end of period (000 Omitted) $57 $51
- -----------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
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.
(a) Annualized.
(d) Per share data are based on average shares outstanding.
(f) Ratios do not reflect reductions from fees paid indirectly.
(g) The per share amount is not in accordance with the net realized and
unrealized gain/loss for the period because of the timing of sales of fund
shares and the amount of per share realized and unrealized gains and losses
at such time.
(i) For the period from the class' inception, December 31, 2002 (Class R), and
April 1, 2005 (Classes R1, R2, R4, and R5) through the stated period end.
(m) Due to a revision, the ratio of expenses before expense reductions for the
year ended October 31, 2005 has been changed from what was previously
reported. There was no impact to net assets or the expenses charged to the
shareholder.
(n) Not annualized.
(r) Certain expenses have been reduced without which performance would have been
lower.
(s) From time to time the fund may receive proceeds from litigation settlements,
without which performance would be lower.
(t) Total returns do not include any applicable sales charges.
NOTES TO FINANCIAL STATEMENTS (unaudited)
(1) BUSINESS AND ORGANIZATION
MFS Global Total Return Fund (the fund) is a series of MFS Series Trust VI (the
trust). The trust is organized as a Massachusetts business trust and is
registered under the Investment Company Act of 1940, as amended, as an open-end
management investment company.
(2) SIGNIFICANT ACCOUNTING POLICIES
GENERAL - The preparation of financial statements in conformity with U.S.
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities, and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. The fund can
invest in foreign securities, including securities of emerging market issuers.
Investments in foreign securities are vulnerable to the effects of changes in
the relative values of the local currency and the U.S. dollar and to the effects
of changes in each country's legal, political, and economic environment. The
markets of emerging markets countries are generally more volatile than the
markets of developed countries with more mature economies. All of the risks of
investing in foreign securities previously described are heightened when
investing in emerging markets countries.
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 reported
that day, equity securities are generally valued at the last quoted daily bid
quotation as reported by an independent pricing service on the market or
exchange on which they are primarily traded. Debt instruments (other than
short-term instruments), including restricted debt instruments, are generally
valued at an evaluated or composite bid as reported by an independent pricing
service. Values of debt instruments obtained from pricing services can utilize
both dealer-supplied valuations and electronic data processing techniques, which
take into account factors such as institutional- size trading in similar groups
of securities, yield, quality, coupon rate, maturity, type of issue, trading
characteristics and other market data. Short- term instruments with a maturity
at issuance of 397 days or less are generally valued at amortized cost, which
approximates market value. Futures contracts are generally valued at last posted
settlement price as reported by an independent pricing service on the market on
which they are primarily traded. Futures contracts for which there were no
trades that day for a particular position are generally valued at the closing
bid quotation as reported by an independent pricing service on the market on
which they are primarily traded. Forward foreign currency contracts are
generally valued at the mean of bid and asked prices for the time period
interpolated from rates reported by an independent pricing service for proximate
time periods. 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 at a
broker-dealer quotation. The values of foreign securities and other assets and
liabilities expressed in foreign currencies are converted to U.S. dollars using
the mean of bid and asked prices for rates reported by an independent pricing
service. The Board of Trustees has delegated primary responsibility for
determining or causing to be determined the value of the fund's investments
(including any fair valuation) to the adviser pursuant to valuation policies and
procedures approved by the Board. If the adviser determines that reliable market
quotations are not readily available, investments are valued at fair value as
determined in good faith by the adviser in accordance with such procedures under
the oversight of the Board of Trustees. Under the fund's valuation policies and
procedures, market quotations are not considered to be readily available for
many types of debt instruments. These investments are generally valued at fair
value based on information from independent pricing services. These valuations
can be based on both dealer-supplied valuations and electronic data processing
techniques, which take into account factors such as institutional-size trading
in similar groups of securities, yield, quality, coupon rate, maturity, type of
issue, trading characteristics and other market data. The adviser may rely on
independent pricing services or other information (such as the correlation with
price movements of similar securities in the same or other markets; the type,
cost and investment characteristics of the security; the business and financial
condition of the issuer; and trading and other market data) to assist in
determining whether to fair value and at what value to fair value an investment.
The value of an investment for purposes of calculating the fund's net asset
value can differ depending on the source and method used to determine value.
When fair valuation is used, the value of investments used to determine the
fund's net asset value may differ from quoted or published prices for the same
investments. In addition, investments may be valued at fair value if the adviser
determines that an investment's value has been materially affected by events
occurring after the close of the exchange or market on which the investment is
principally traded (such as foreign exchange or market) and prior to the
determination of the fund's net asset value, or after the halting of trading of
a specific security where trading does not resume prior to the close of the
exchange or market on which the security is principally traded. Events that
occur on a frequent basis after foreign markets close (such as developments in
foreign markets and significant movements in the U.S. markets) and prior to the
determination of the fund's net asset value may be deemed to have a material
affect on the value of securities traded in foreign markets. Accordingly, the
fund's foreign equity securities may often be valued at fair value.
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.
DERIVATIVE RISK - The fund may invest in derivatives for hedging or non- hedging
purposes. While hedging can reduce or eliminate losses, it can also reduce or
eliminate gains. When the fund uses derivatives as an investment to gain market
exposure, or for hedging purposes, gains and losses from derivative instruments
may be substantially greater than the derivative's original cost. Derivative
instruments include purchased options, forward foreign currency exchange
contracts, and futures contracts.
PURCHASED OPTIONS - The fund may purchase call or put options for a premium.
Purchasing call options may be a hedge against an anticipated increase in the
dollar cost of securities to be acquired or to increase the fund's exposure to
the underlying instrument. Purchasing put options may hedge against a decline in
the value of portfolio securities. The premium paid is included as an investment
in the Statement of Assets and Liabilities and is subsequently adjusted to the
current value of the option. Premiums paid for purchased options which have
expired are treated as realized losses on investments in the Statement of
Operations. Premiums paid for purchased options which are exercised or closed
are added to the amount paid or offset against the proceeds on the underlying
security or financial instrument to determine the realized gain or loss. The
risk of loss associated with purchased options is limited to the premium paid.
FUTURES CONTRACTS - The fund may enter into futures contracts for the delayed
delivery of securities or currency, or contracts based on financial indices at a
fixed price on a future date. In entering such contracts, the fund is required
to deposit with the broker either in cash or securities an amount equal to a
certain percentage of the contract amount. Subsequent payments are made or
received by the fund each day, depending on the daily fluctuations in the value
of the contract, and are recorded for financial statement purposes as unrealized
gains or losses by the fund. Upon entering into such contracts, the fund bears
the risk of interest or exchange rates or securities prices moving unexpectedly,
in which case, the fund may not achieve the anticipated benefits of the futures
contracts and may realize a loss.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS - The fund may enter into forward
foreign currency exchange contracts for the purchase or sale of a specific
foreign currency at a fixed price on a future date. Risks may arise upon
entering into these contracts from the potential inability of counterparties to
meet the terms of their contracts and from unanticipated movements in the value
of the contract. The fund may enter into forward foreign currency exchange
contracts for hedging purposes as well as for non-hedging purposes. For hedging
purposes, the fund may enter into contracts to deliver or receive foreign
currency it will receive from or require for its normal investment activities.
The fund may also use contracts in a manner intended to protect foreign currency
denominated securities from declines in value due to unfavorable exchange rate
movements. For non-hedging purposes, the fund may enter into contracts with the
intent of changing the relative exposure of the fund's portfolio of securities
to different currencies to take advantage of anticipated changes. The forward
foreign currency exchange contracts are adjusted by the daily exchange rate of
the underlying currency and any gains or losses are recorded as unrealized until
the contract settlement date. On contract settlement date, the gains or losses
are recorded as realized gains or losses on foreign currency transactions.
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.
At April 30, 2006, the value of securities loaned was $55,492,226. These loans
were collateralized by cash of $57,390,473 and non-cash U.S. Treasury
obligations of $258,502.
SHORT TERM FEES - For purchases made on or after July 1, 2004 and before April
1, 2005, the fund charged a 2% redemption fee on proceeds from Class A, Class B,
Class C, and Class I shares redeemed or exchanged within 5 business days
following their acquisition. Due to systems limitations associated with the
transition from applying a 30 calendar day redemption fee to a 5 business day
redemption fee, the fund did not impose redemption fees with respect to
purchases made in June 2004 followed by redemptions made in July 2004. 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. Certain dividends from
foreign securities will be recorded when the fund is informed of the dividend if
such information is obtained subsequent to the ex- dividend date. Dividend 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 six months ended April 30, 2006, the fund's custodian fees were
reduced by $38,190 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 six months ended April 30, 2006, the fund's custodian expenses were
reduced by $1,510 under this agreement. These amounts are shown as a reduction
of total expenses on the Statement of Operations. Effective January 1, 2006, the
commission recapture agreement was terminated.
TAX MATTERS AND DISTRIBUTIONS - The fund intends to continue to qualify as a
regulated investment company, as defined under Subchapter M of the Internal
Revenue Code, and to distribute all of its taxable income, including realized
capital gains. Accordingly, no provision for federal income tax is required in
the financial statements. Foreign taxes, if any, have been accrued by the fund
in the accompanying financial statements.
Distributions to shareholders are recorded on the ex-dividend date. Income and
capital gain distributions are determined in accordance with income tax
regulations, which may differ from generally accepted accounting principles.
Certain capital accounts in the financial statements are periodically adjusted
for permanent differences in order to reflect their tax character. These
adjustments have no impact on net assets or net asset value per share. Temporary
differences which arise from recognizing certain items of income, expense, gain
or loss in different periods for financial statement and tax purposes will
reverse at some time in the future. Distributions in excess of net investment
income or net realized gains are temporary overdistributions for financial
statement purposes resulting from differences in the recognition or
classification of income or distributions for financial statement and tax
purposes. Book/tax differences primarily relate to amortization and accretion of
debt securities, wash sale loss deferrals, straddle loss deferrals, foreign
currency transactions, derivative transactions, and treating a portion of the
proceeds from redemptions as a distribution for tax purposes.
The tax character of distributions made during the current period will be
determined at fiscal year end. The tax character of distributions declared to
shareholders is as follows:
OCTOBER 31, 2005 OCTOBER 31, 2004
Ordinary income (including any
short-term capital gains) $28,636,769 $13,643,641
Long-term capital gain 23,709,753 --
--------------------------------------------------------------------
Total distributions $52,346,522 $13,643,641
The federal tax cost and the tax basis components of distributable earnings were
as follows:
AS OF APRIL 30, 2006
Cost of investments $561,444,758
----------------------------------------------------------
Gross appreciation $82,804,722
Gross depreciation (9,137,064)
----------------------------------------------------------
Net unrealized appreciation (depreciation) $73,667,658
AS OF OCTOBER 31, 2005
Undistributed ordinary income $8,978,891
Undistributed long-term capital gain 34,398,678
Capital loss carryforwards (11,833,939)
Other temporary differences (1,451,829)
Net unrealized appreciation (depreciation) 53,867,217
The aggregate cost above includes prior fiscal year end tax adjustments.
As of October 31, 2006, the fund had available capital loss carryforwards to
offset future realized gains. Such losses expire as follows:
October 31, 2009 $(795,169)
October 31, 2010 (11,038,770)
----------------------------------------------------------
$(11,833,939)
The availability of a portion of the capital loss carryforwards, which were
acquired on August 25, 2003 in connection with the MFS Global Asset Allocation
Fund merger, may be limited in a given year.
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 shares will
convert to Class A shares approximately eight years after purchase.
(3) TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISER - The fund has an investment advisory agreement with 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 0.84%
of the fund's average daily net assets. The investment adviser has contractually
agreed to reduce its management fee to 0.75% in excess of $500 million of
average daily net assets and 0.70% of average daily net assets in excess of $1
billion. This management fee reduction amounted to $29,591 which was shown as a
reduction of total expenses in the Statement of Operations. The management fee
incurred for the six months ended April 30, 2006 was equivalent to an annual
effective rate of 0.83% of the fund's average daily net assets.
The investment adviser has contractually agreed to bear the fund's expenses,
exclusive of taxes, brokerage and transaction costs, currency conversion costs,
extraordinary expenses and expenses associated with the fund's investment
activities, such that total annual fund operating expenses do not exceed the
following rates annually, of the fund's average daily net assets:
CLASS CLASS CLASS CLASS CLASS CLASS CLASS CLASS CLASS CLASS
A B C I R R1 R2 R3 R4 R5
1.30% 1.95% 1.95% 0.95% 1.45% 2.05% 1.70% 1.60% 1.35% 1.05%
For the year ended October 31, 2005, this reduction amounted to $559,918 and is
reflected as a reduction of total expenses in the Statement of Operations.
DISTRIBUTOR - MFS Fund Distributors, Inc. (MFD), a wholly owned subsidiary of
MFS, as distributor, received $37,765 for the six months ended April 30, 2006,
as its portion of the initial sales charge on sales of Class A shares of the
fund.
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% $625,967
Class B 0.75% 0.25% 1.00% 1.00% 595,283
Class C 0.75% 0.25% 1.00% 1.00% 393,134
Class R 0.25% 0.25% 0.50% 0.50% 5,492
Class R1 0.50% 0.25% 0.75% 0.75% 700
Class R2 0.25% 0.25% 0.50% 0.50% 272
Class R3 0.25% 0.25% 0.50% 0.50% 1,041
Class R4 -- 0.25% 0.25% 0.25% 174
- -------------------------------------------------------------------------------
Total Distribution and Service Fees $1,622,063
(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 six months ended April 30, 2006 based on each
class' average daily net assets.
Certain Class A and Class C shares are subject to a contingent deferred sales
charge in the event of a shareholder redemption within 12 months of purchase.
Class B 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 six months ended April 30, 2006,
were as follows:
AMOUNT
Class A $3,863
Class B 62,248
Class C 3,697
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
six months ended April 30, 2006, the fee was $268,112, which equated to 0.0955%
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 six months ended April 30, 2006, these costs amounted to
$169,706.
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. From July 1, 2005 through March 31, 2006, the fund's annual fixed amount
was $10,000. Effective April 1, 2006, the fund's annual fixed amount is $17,500.
The administrative services fee incurred for the six months ended April 30, 2006
was equivalent to an annual effective rate of 0.0123% 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 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. MFS may subsequently pay
all, or a portion, of the retirement plan administration and services fee to
affiliated or unaffiliated third parties. For the six months ended April 30,
2006, 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
EFFECTIVE TOTAL
FEE RATE RATE(1) AMOUNT
Class R1 0.45% 0.35% $420
Class R2 0.40% 0.25% 216
Class R3 0.25% 0.15% 521
Class R4 0.15% 0.15% 104
Class R5 0.10% 0.10% 27
- -------------------------------------------------------------------------------
Total Retirement Plan Administration and Services Fees $1,288
(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.
This agreement will continue until at least September 30, 2007. For the six
months ended April 30, 2006, this waiver amounted to $383 and is reflected
as a reduction of total expenses in the Statement of Operations.
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 $1,261. The fund also has an
unfunded retirement benefit deferral plan for certain current Independent
Trustees which resulted in a net decrease of $1,045. Both amounts are included
in Independent trustees' compensation for the six months ended April 30, 2006.
The deferred liability for retirement benefits payable to retired Trustees and
certain current Trustees amounted to $21,273 and $39,694, respectively, at April
30, 2006, and is included in payable for independent 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. The funds can terminate the
Agreement with Tarantino LLC at any time under the terms of the Agreement. For
the six months ended April 30, 2006, the fee paid to Tarantino LLC was $2,338.
MFS has agreed to reimburse the fund for a portion of the payments made by the
funds to Tarantino LLC in the amount of $1,919, 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.
(4) PORTFOLIO SECURITIES
Purchases and sales of investments, other than purchased option transactions and
short-term obligations, were as follows:
PURCHASES SALES
U.S. government securities $29,637,821 24,341,623
- ------------------------------------------------------------------------------
Investments (non-U.S. government securities) $171,118,456 $222,839,605
- ------------------------------------------------------------------------------
(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:
SIX MONTHS ENDED 4/30/06 YEAR ENDED 10/30/05 (i)
SHARES AMOUNT SHARES AMOUNT
Shares sold
Class A 2,854,865 $ 40,202,849 7,599,432 $109,093,900
Class B 728,965 10,366,167 2,454,459 35,678,534
Class C 780,603 11,019,306 1,931,145 27,862,218
Class I 19,020 263,888 74,348 1,063,076
Class R 21,410 298,317 108,426 1,565,792
Class R1 15,243 211,952 3,573 51,532
Class R2 5,987 85,937 3,467 50,000
Class R3 83,459 1,156,228 2,703 38,967
Class R4 47,267 672,553 3,506 50,000
Class R5 -- -- 3,507 50,000
- -----------------------------------------------------------------------------------------------
4,556,819 $64,277,197 12,184,566 $175,504,019
SIX MONTHS ENDED 4/30/06 YEAR ENDED 10/31/05 (i)
SHARES AMOUNT SHARES AMOUNT
Shares issued to shareholders in
reinvestment of distributions
Class A 1,987,788 $ 26,963,222 2,162,149 $ 30,502,929
Class B 556,344 7,656,646 721,314 10,310,591
Class C 314,522 4,303,738 300,328 4,273,731
Class I 20,492 276,208 20,206 283,423
Class R 12,207 164,957 9,289 130,623
Class R1 476 6,512 39 556
Class R2 768 10,498 42 591
Class R3 1,085 14,691 1,021 14,350
Class R4 326 4,411 47 656
Class R5 327 4,431 49 690
- -----------------------------------------------------------------------------------------------
2,894,335 $ 39,405,314 3,214,484 $ 45,518,140
Shares reacquired
Class A (3,802,324) $(53,564,522) (5,311,172) $(76,336,187)
Class B (1,919,060) (27,451,214) (3,319,546) (48,215,675)
Class C (674,642) (9,571,102) (820,864) (11,876,702)
Class I (39,288) (540,900) (27,382) (392,542)
Class J -- -- (45,164) (646,669)
Class R (17,032) (238,988) -- --
Class R1 (2,243) (31,964) -- --
Class R2 (2,988) (41,615) -- --
Class R3 (41,072) (567,442) (1,653) (23,469)
- -----------------------------------------------------------------------------------------------
(6,498,649) $(92,007,747) (9,525,781) $(137,491,244)
Net change
Class A 1,040,329 $ 13,601,549 4,450,409 $ 63,260,642
Class B (633,751) (9,428,401) (143,773) (2,226,550)
Class C 420,483 5,751,942 1,410,609 20,259,247
Class I 224 (804) 67,172 953,957
Class R 16,585 224,286 72,551 1,049,746
Class R1 13,476 186,500 3,612 52,088
Class R2 3,767 54,820 3,509 50,591
Class R3 43,472 603,477 2,071 29,848
Class R4 47,593 676,964 3,553 50,656
Class R5 327 4,431 3,556 50,690
- -----------------------------------------------------------------------------------------------
952,505 $ 11,674,764 5,873,269 $ 83,530,915
(i) For the period from the class' inception, April 1, 2005 (Classes R1, R2, R4, and R5) through
the stated period end.
(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 six months ended April 30, 2006 was $1,970, and is included in
miscellaneous expense on the Statement of Operations. The fund had no
significant borrowings during the six months ended April 30, 2006.
BOARD REVIEW OF INVESTMENT ADVISORY AGREEMENT
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 trust will file a complete schedule of portfolio holdings with the
Securities and Exchange Commission (the Commission) for the first and third
quarters of each fiscal year on Form N-Q. The trust's Form N-Q may be reviewed
and copied at the:
Public Reference Room
Securities and Exchange Commission
100 F Street, NE, Room 1580
Washington, D.C. 20549
Information on the operation of the Public Reference Room may be obtained by
calling the Commission at 1-202-551-5850. The trust'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.
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
- -------------------------------------------------------------------------------
Shares 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)
MFS Investment Management(R)
MFS(R) investment products are offered through MFS Fund Distributors, Inc.,
500 Boylston Street, Boston, MA 02116.
MWT-SEM-6/06 34M
MFS(R) UTILITIES FUND 4/30/06
SEMIANNUAL REPORT
- -------------------------------------------------------------------------------
LETTER FROM THE CEO 1
- ---------------------------------------------------
PORTFOLIO COMPOSITION 2
- ---------------------------------------------------
EXPENSE TABLE 3
- ---------------------------------------------------
PORTFOLIO OF INVESTMENTS 5
- ---------------------------------------------------
FINANCIAL STATEMENTS 10
- ---------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 22
- ---------------------------------------------------
BOARD REVIEW OF INVESTMENT ADVISORY AGREEMENT 32
- ---------------------------------------------------
PROXY VOTING POLICIES AND INFORMATION 32
- ---------------------------------------------------
QUARTERLY PORTFOLIO DISCLOSURE 32
- ---------------------------------------------------
CONTACT INFORMATION BACK COVER
- ---------------------------------------------------
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,
It has been said that change is the only constant in life. As investors have
seen, that theme is still accurate today as we recently have experienced
shifting economic cycles because of natural disasters and political
instability around the globe.
Markets worldwide have fluctuated in the past year as devastating hurricanes
had a dramatic effect on the international economy, particularly on oil
prices. We witnessed political unrest in the Middle East, highlighted by
instability in Iraq, and in Africa, the usually stable Nigeria also
experienced violence. As a result, energy prices have bounced up and down,
with crude oil prices at one point topping a record $70 per barrel.
Such cycles are not uncommon and in fact have almost become the norm in our
everyday lives. What does all of this mean to you as an investor? In times like
these, it helps to know that you're working with a seasoned investment
professional who has experience to guide you through difficult times. At
MFS(R), we believe our investment management team has the knowledge and
confidence to navigate through difficult cycles and at the same time see
through adversity to find investment opportunities for our clients and
shareholders.
Our investment management process, honed over 80 years, combines a unique
concept of teamwork with our unwavering focus on the long term. We firmly
believe that the best way 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. Rebalance assets regularly to maintain a desired asset
allocation. Of course, these strategies cannot guarantee a profit or protect
against a loss. 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 - through both up and down
economic cycles.
Respectfully,
/s/ Robert J. Manning
Robert J. Manning
Chief Executive Officer and Chief Investment Officer
MFS Investment Management(R)
June 15, 2006
The opinions expressed in this letter are those of MFS, and no forecasts can
be guaranteed.
PORTFOLIO COMPOSITION
PORTFOLIO STRUCTURE (i)
Stocks 90.1%
Bonds 4.0%
Convertible Preferred Stocks 3.8%
Cash & Other Net Assets 2.1%
TOP TEN HOLDINGS
TXU Corp. 4.9%
------------------------------------------------
NRG Energy, Inc. 4.5%
------------------------------------------------
Exelon Corp. 4.3%
------------------------------------------------
Constellation Energy Group, Inc. 3.6%
------------------------------------------------
FPL Group, Inc. 3.5%
------------------------------------------------
FirstEnergy Corp. 3.3%
------------------------------------------------
Williams Cos., Inc. 3.0%
------------------------------------------------
Sprint Nextel Corp. 2.5%
------------------------------------------------
E.ON AG 2.5%
------------------------------------------------
Entergy Corp. 2.2%
------------------------------------------------
TOP FIVE EQUITY INDUSTRIES
Utilities - Electric Power 50.6%
------------------------------------------------
Telephone Services 13.8%
------------------------------------------------
Natural Gas - Pipeline 6.3%
------------------------------------------------
Natural Gas - Distribution 4.8%
------------------------------------------------
Broadcasting 3.2%
------------------------------------------------
COUNTRY WEIGHTINGS (i)
United States 71.3%
------------------------------------------------
Germany 4.3%
------------------------------------------------
France 3.5%
------------------------------------------------
United Kingdom 3.3%
------------------------------------------------
Canada 3.0%
------------------------------------------------
Spain 2.7%
------------------------------------------------
Brazil 2.5%
------------------------------------------------
Mexico 2.5%
------------------------------------------------
Italy 1.6%
------------------------------------------------
Other Countries 5.3%
------------------------------------------------
(i) For purposes of this graphical presentation, the bond component includes
both accrued interest amounts and the equivalent exposure from any
derivative holdings, if applicable.
Percentages are based on net assets as of 4/30/06.
The portfolio is actively managed, and current holdings may be different.
EXPENSE TABLE
FUND EXPENSES BORNE BY THE SHAREHOLDERS DURING THE PERIOD,
NOVEMBER 1, 2005 THROUGH APRIL 30, 2006.
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 November 1, 2005 through
April 30, 2006.
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.
- -------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period(p)
Share Expense Account Value Account Value 11/01/05-
Class Ratio 11/01/05 4/30/06 4/30/06
- --------------------------------------------------------------------------------
Actual 1.12% $1,000.00 $1,095.30 $5.82
A ------------------------------------------------------------------------
Hypothetical (h) 1.12% $1,000.00 $1,019.24 $5.61
- --------------------------------------------------------------------------------
Actual 1.87% $1,000.00 $1,090.70 $9.69
B -------------------------------------------------------------------------
Hypothetical (h) 1.87% $1,000.00 $1,015.52 $9.35
- --------------------------------------------------------------------------------
Actual 1.87% $1,000.00 $1,091.50 $9.70
C ------------------------------------------------------------------------
Hypothetical (h) 1.87% $1,000.00 $1,015.52 $9.35
- --------------------------------------------------------------------------------
Actual 0.87% $1,000.00 $1,096.50 $4.52
I ------------------------------------------------------------------------
Hypothetical (h) 0.87% $1,000.00 $1,020.48 $4.36
- --------------------------------------------------------------------------------
Actual 1.38% $1,000.00 $1,093.20 $7.16
R ------------------------------------------------------------------------
Hypothetical (h) 1.38% $1,000.00 $1,017.95 $6.90
- --------------------------------------------------------------------------------
Actual 1.98% $1,000.00 $1,091.00 $10.27
R1 ------------------------------------------------------------------------
Hypothetical (h) 1.98% $1,000.00 $1,014.98 $9.89
- --------------------------------------------------------------------------------
Actual 1.64% $1,000.00 $1,092.10 $8.51
R2 ------------------------------------------------------------------------
Hypothetical (h) 1.64% $1,000.00 $1,016.66 $8.20
- --------------------------------------------------------------------------------
Actual 1.52% $1,000.00 $1,093.30 $7.89
R3 ------------------------------------------------------------------------
Hypothetical (h) 1.52% $1,000.00 $1,017.26 $7.60
- --------------------------------------------------------------------------------
Actual 1.27% $1,000.00 $1,094.50 $6.60
R4 ------------------------------------------------------------------------
Hypothetical (h) 1.27% $1,000.00 $1,018.50 $6.36
- --------------------------------------------------------------------------------
Actual 0.97% $1,000.00 $1,096.10 $5.04
R5 ------------------------------------------------------------------------
Hypothetical (h) 0.97% $1,000.00 $1,019.98 $4.86
- --------------------------------------------------------------------------------
(h) 5% class return per year before expenses.
(p) Expenses paid is equal to each class' annualized expense ratio, as shown
above, multiplied by the average account value over the period, multiplied
by the number of days in the period, divided by the number of days in the
year. Expenses paid do not include any applicable sales charges (loads) or
redemption fees. If these transaction costs had been included, your costs
would have been higher.
PORTFOLIO OF INVESTMENTS (unaudited) - 4/30/06
The Portfolio of Investments is a complete list of all securities owned by your fund.
It is categorized by broad-based asset classes.
Common Stocks - 90.1%
- --------------------------------------------------------------------------------------------------
ISSUER SHARES/PAR VALUE ($)
- --------------------------------------------------------------------------------------------------
Advertising & Broadcasting - 3.2%
- --------------------------------------------------------------------------------------------------
Citadel Broadcasting Corp. (l) 647,140 $ 6,089,584
Grupo Televisa S.A., ADR 1,469,900 31,161,880
TV Azteca S.A. de C.V 6,715,400 4,178,336
Viacom, Inc., "B" (n) 443,450 17,662,614
--------------
$ 59,092,414
- --------------------------------------------------------------------------------------------------
Broadcast & Cable TV - 2.4%
- --------------------------------------------------------------------------------------------------
Comcast Corp., "Special A" (l)(n) 1,010,800 $ 31,162,964
News Corp., "A" (l) 733,300 12,583,428
--------------
$ 43,746,392
- --------------------------------------------------------------------------------------------------
Energy - Independent - 0.7%
- --------------------------------------------------------------------------------------------------
Occidental Petroleum Corp. 89,800 $ 9,226,052
Rosetta Resources, Inc. (a)(n) 166,910 3,359,898
--------------
$ 12,585,950
- --------------------------------------------------------------------------------------------------
Energy - Integrated - 2.4%
- --------------------------------------------------------------------------------------------------
Amerada Hess Corp. 58,600 $ 8,395,622
Chevron Corp. 150,700 9,195,714
Exxon Mobil Corp. 240,300 15,158,124
TOTAL S.A. (l) 44,700 12,358,034
--------------
$ 45,107,494
- --------------------------------------------------------------------------------------------------
Natural Gas - Distribution - 4.8%
- --------------------------------------------------------------------------------------------------
AGL Resources, Inc. 540,625 $ 19,127,313
Energen Corp. 485,200 17,113,004
Equitable Resources, Inc. 797,400 28,315,674
Questar Corp. 292,700 23,430,635
--------------
$ 87,986,626
- --------------------------------------------------------------------------------------------------
Natural Gas - Pipeline - 6.3%
- --------------------------------------------------------------------------------------------------
El Paso Corp. (l) 881,300 $ 11,377,583
Enagas S.A. (l) 1,543,055 33,941,356
Kinder Morgan, Inc. (l) 172,200 15,157,044
Williams Cos., Inc. 2,537,350 55,644,086
--------------
$ 116,120,069
- --------------------------------------------------------------------------------------------------
Oil Services - 3.2%
- --------------------------------------------------------------------------------------------------
ENSCO International, Inc. 166,300 $ 8,895,387
GlobalSantaFe Corp. 451,600 27,642,436
Noble Corp. 106,500 8,407,110
Smith International, Inc. 224,300 9,472,189
Transocean, Inc. (n) 55,500 4,499,385
--------------
$ 58,916,507
- --------------------------------------------------------------------------------------------------
Telecommunications - Wireless - 2.7%
- --------------------------------------------------------------------------------------------------
America Movil S.A. de C.V., "L", ADR 289,400 $ 10,681,754
Hutchison Telecommunications International Ltd. (n) 5,230,000 9,241,415
Mobile TeleSystems OJSC, ADR (l) 25,600 836,096
Rogers Communications, Inc., "B" 132,000 5,589,242
Tim Participacoes S.A., ADR (l) 123,600 4,752,420
Vimpel-Communications, ADR (l)(n) 80,000 3,724,000
Vivo Participacoes S.A., ADR (l) 425,200 1,756,076
Vodafone Group PLC 5,297,151 12,496,171
--------------
$ 49,077,174
- --------------------------------------------------------------------------------------------------
Telephone Services - 13.8%
- --------------------------------------------------------------------------------------------------
Alltel Corp. 225,900 $ 14,541,183
AT&T, Inc. 588,200 15,416,722
Citizens Communications Co. 1,532,700 20,354,256
FastWeb S.p.A. (l)(n) 211,329 10,600,247
France Telecom S.A. (l) 1,159,210 27,062,620
KT Freetel Co. Ltd. 214,430 7,127,584
NTL, Inc. 292,150 8,028,282
Philippine Long Distance Telephone Co. 69,200 2,736,421
Singapore Telecommunications Ltd. 5,685,000 9,852,562
Sprint Nextel Corp. 1,875,000 46,500,000
Telecom Argentina S.A., ADR (l)(n) 656,700 8,504,265
Telecom Corp. of New Zealand Ltd. (l) 2,387,427 8,721,659
Telefonica S.A 383,400 6,141,255
Telekomunikacja Polska S.A., GDR 363,350 2,706,958
Telenor A.S.A. (l) 2,082,800 24,130,700
TELUS Corp. (non-voting shares) 982,640 40,562,873
--------------
$ 252,987,587
- --------------------------------------------------------------------------------------------------
Utilities - Electric Power - 50.6%
- --------------------------------------------------------------------------------------------------
AES Corp. (n) 2,411,100 $ 40,916,367
AES Tiete S.A., IPS 579,757,500 16,316,528
Allegheny Energy, Inc. (l)(n) 77,800 2,772,014
Ameren Corp. (l) 282,700 14,239,599
CEZ 49,200 1,691,032
CMS Energy Corp. (l)(n) 2,885,900 38,440,188
Constellation Energy Group, Inc. 1,202,300 66,030,316
CPFL Energia S.A., ADR (l)(n) 411,860 17,450,508
Dominion Resources, Inc. 259,600 19,436,252
Duke Energy Holding Corp. (l) 607,200 17,681,664
E.ON AG (l) 378,307 46,058,309
Edison International 828,500 33,479,685
Endesa S.A. (l) 266,101 8,833,518
Enel S.p.A 2,132,740 18,425,946
Enersis S.A., ADR (l) 675,400 8,246,634
Entergy Corp. 177,700 12,428,338
Equatorial Energia S.A. (n) 210,900 1,565,964
Exelon Corp. 1,479,500 79,893,000
FirstEnergy Corp. 1,192,500 60,471,675
FPL Group, Inc. 1,603,700 63,506,520
International Power PLC 6,237,301 33,830,881
Mirant Corp. (l)(n) 1,001,700 24,601,752
NRG Energy, Inc. (l)(n) 1,747,800 83,177,802
PPL Corp. 1,004,200 29,161,968
RWE AG (l) 380,400 32,970,456
SCANA Corp. 175,800 6,880,812
Scottish & Southern Energy PLC 346,600 7,103,067
Scottish Power PLC 790,500 8,071,278
Suez S.A. (l) 456,722 17,966,712
Tractebel Energia S.A 412,960 3,404,571
TXU Corp. 1,830,000 90,822,900
Veolia Environment (l) 103,450 6,179,360
Xcel Energy, Inc. (l) 896,800 16,895,712
--------------
$ 928,951,328
- --------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS (IDENTIFIED COST, $1,483,300,878) $1,654,571,541
- --------------------------------------------------------------------------------------------------
Bonds - 4.0%
- --------------------------------------------------------------------------------------------------
Asset Backed & Securitized - 0.0%
- --------------------------------------------------------------------------------------------------
Falcon Franchise Loan LLC, FRN, 3.0551%, 2023 (a)(i) $ 4,038,801 $ 454,769
- --------------------------------------------------------------------------------------------------
Network & Telecom - 0.4%
- --------------------------------------------------------------------------------------------------
Qwest Corp., 8.875%, 2012 $ 7,520,000 $ 8,234,400
- --------------------------------------------------------------------------------------------------
Telecommunications - Wireless - 0.5%
- --------------------------------------------------------------------------------------------------
Rogers Wireless, Inc., 8%, 2012 $ 8,390,000 $ 8,809,500
- --------------------------------------------------------------------------------------------------
Utilities - Electric Power - 3.1%
- --------------------------------------------------------------------------------------------------
Allegheny Energy Supply Co. LLC, 8.25%, 2012 (a) $ 6,790,000 $ 7,384,125
Beaver Valley Funding Corp., 9%, 2017 3,147,000 3,515,073
Empresa Nacional de Electricidad S.A., 8.35%, 2013 3,010,000 3,291,065
Enersis S.A., 7.375%, 2014 6,840,000 7,063,901
NRG Energy, Inc., 7.25%, 2014 10,275,000 10,326,375
PSEG Energy Holdings LLC, 8.625%, 2008 7,271,000 7,543,663
TXU Eastern Funding Co., 6.75%, 2009 (d) 793,000 51,545
TXU Energy Co., 7%, 2013 16,425,000 17,010,945
--------------
$ 56,186,692
- --------------------------------------------------------------------------------------------------
TOTAL BONDS (IDENTIFIED COST, $75,327,002) $ 73,685,361
- --------------------------------------------------------------------------------------------------
Convertible Preferred Stocks - 3.8%
- --------------------------------------------------------------------------------------------------
Natural Gas - Pipeline - 1.1%
- --------------------------------------------------------------------------------------------------
El Paso Corp., 4.99% (a) 18,000 $ 20,657,250
- --------------------------------------------------------------------------------------------------
Utilities - Electric Power - 2.7%
- --------------------------------------------------------------------------------------------------
Entergy Corp., 7.625% 826,980 $ 41,307,651
NRG Energy, Inc., 5.75% (l) 32,700 8,089,163
--------------
$ 49,396,814
- --------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCKS (IDENTIFIED COST,
$67,527,548) $ 70,054,064
- --------------------------------------------------------------------------------------------------
Short-Term Obligations - 1.9%
- --------------------------------------------------------------------------------------------------
General Electric Capital Corp., 4.82%, due 5/01/06,
at Amortized Cost and Value (y) $ 35,132,000 $ 35,132,000
- --------------------------------------------------------------------------------------------------
Collateral for Securities Loaned - 8.0%
- --------------------------------------------------------------------------------------------------
Morgan Stanley, 4.895%, dated 4/28/06, due 5/01/06, total to
be received $72,556,845 (secured by various U.S. Treasury and
Federal Agency obligations in a jointly traded account) $ 72,527,260 $ 72,527,260
- --------------------------------------------------------------------------------------------------
Navigator Securities Lending Prime Portfolio, at Net Asset
Value 75,291,467 75,291,467
- --------------------------------------------------------------------------------------------------
TOTAL COLLATERAL FOR SECURITIES LOANED $147,818,727
- --------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (IDENTIFIED COST, $1,809,106,155) (k) $1,981,261,693
- --------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - (7.8)% (144,113,532)
- --------------------------------------------------------------------------------------------------
NET ASSETS - 100.0% $1,837,148,161
- --------------------------------------------------------------------------------------------------
(a) Security exempt from registration under Rule 144A of the Securities Act of 1933. These
securities may be sold in transactions exempt from registration, normally to qualified
institutional buyers. At period end, the aggregate value of these securities was $31,856,042,
representing 1.7% of net assets.
(d) Non-income producing security - in default.
(i) Interest only security for which the fund receives interest on notional principal (Par
amount). Par amount shown is the notional principal and does not reflect the cost of the
security.
(k) As of April 30, 2006, the fund had 12 securities that were fair valued, aggregating
$97,247,740 and 4.91% of market value, in accordance with the policies adopted by the Board of
Trustees.
(l) All or a portion of this security is on loan.
(n) Non-income producing security.
(y) The rate shown represents an annualized yield at time of purchase.
Portfolio of Investments (unaudited) - continued
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Sales and Purchases in the table below are reported by currency.
NET UNREALIZED
CONTRACTS TO CONTRACTS APPRECIATION
DELIVER/RECEIVE SETTLEMENT DATE IN EXCHANGE FOR AT VALUE (DEPRECIATION)
- ------------------------------------------------------------------------------------------------------------
SALES
EUR 117,921,986 5/17/06 - 6/13/06 $143,690,309 $149,164,367 $(5,474,058)
GBP 23,643,989 6/05/06 41,634,551 43,093,259 (1,458,708)
------------ ------------ -----------
$185,324,860 $192,257,626 $(6,932,766)
------------ ------------ -----------
PURCHASES
EUR 13,583,838 5/17/06 - 6/13/06 $ 16,761,337 $ 17,167,077 $ 405,740
GBP 3,187,820 5/17/06 - 6/05/06 5,596,285 5,809,765 213,480
------------ ------------ -----------
$ 22,357,622 $ 22,976,842 $ 619,220
------------ ------------ -----------
At April 30, 2006, the fund had sufficient cash and/or securities to cover any commitments under these
derivative contracts.
The following abbreviations are used in the Portfolio of Investments and are defined:
ADR American Depository Receipt
FRN Floating Rate Note. The interest rate is the rate in effect as of period end.
GDR Global Depository Receipt
IPS International Preference Stock
Abbreviations indicate amounts shown in currencies other than the U.S. Dollar. All amounts are
stated in U.S. dollars unless otherwise indicated. A list of abbreviations is shown below.
EUR Euro
GBP British Pound
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS Statement of Assets and Liabilities (unaudited)
This statement represents your fund's balance sheet, which details the assets
and liabilities comprising the total value of the fund.
AT 4/30/06
ASSETS
- -------------------------------------------------------------------------------------------------------
Investments, at value, including $142,886,973 of securities
on loan (identified cost, $1,809,106,155) $1,981,261,693
Cash 152,028
Foreign currency, at value (identified cost, $3,182) 3,227
Receivable for forward foreign currency exchange contracts 622,125
Receivable for investments sold 30,358,219
Receivable for fund shares sold 1,849,716
Interest and dividends receivable 4,112,060
- -------------------------------------------------------------------------------------------------------
Total assets $2,018,359,068
- -------------------------------------------------------------------------------------------------------
LIABILITIES
- -------------------------------------------------------------------------------------------------------
Distributions payable $181,616
Payable for forward foreign currency exchange contracts 6,935,671
Payable for investments purchased 20,181,973
Payable for fund shares reacquired 5,228,692
Collateral for securities loaned, at value 147,818,727
Payable to affiliates
Management fee 89,221
Shareholder servicing costs 302,940
Distribution and service fees 88,621
Administrative services fee 9,432
Retirement plan administration and services fees 131
Payable for independent trustees' compensation 65,212
Accrued expenses and other liabilities 308,671
- -------------------------------------------------------------------------------------------------------
Total liabilities $181,210,907
- -------------------------------------------------------------------------------------------------------
Net assets $1,837,148,161
- -------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- -------------------------------------------------------------------------------------------------------
Paid-in capital $2,031,821,691
Unrealized appreciation (depreciation) on investments and
translation of assets and liabilities in foreign currencies 165,876,188
Accumulated net realized gain (loss) on investments and
foreign currency transactions (361,622,441)
Undistributed net investment income 1,072,723
- -------------------------------------------------------------------------------------------------------
Net assets $1,837,148,161
- -------------------------------------------------------------------------------------------------------
Shares of beneficial interest outstanding 137,123,288
- -------------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities (unaudited) - continued
Class A shares
- -------------------------------------------------------------------------------------------------------
Net assets $988,777,783
Shares outstanding 73,702,486
- -------------------------------------------------------------------------------------------------------
Net asset value per share $13.42
- -------------------------------------------------------------------------------------------------------
Offering price per share (100/95.25Xnet asset value per
share) $14.09
- -------------------------------------------------------------------------------------------------------
Class B shares
- -------------------------------------------------------------------------------------------------------
Net assets $598,695,833
Shares outstanding 44,771,393
- -------------------------------------------------------------------------------------------------------
Net asset value and offering price per share $13.37
- -------------------------------------------------------------------------------------------------------
Class C shares
- -------------------------------------------------------------------------------------------------------
Net assets $226,486,756
Shares outstanding 16,920,385
- -------------------------------------------------------------------------------------------------------
Net asset value and offering price per share $13.39
- -------------------------------------------------------------------------------------------------------
Class I shares
- -------------------------------------------------------------------------------------------------------
Net assets $6,489,154
Shares outstanding 482,935
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share $13.44
- -------------------------------------------------------------------------------------------------------
Class R shares
- -------------------------------------------------------------------------------------------------------
Net assets $7,951,866
Shares outstanding 593,319
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share $13.40
- -------------------------------------------------------------------------------------------------------
Class R1 shares
- -------------------------------------------------------------------------------------------------------
Net assets $1,155,440
Shares outstanding 86,387
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share $13.38
- -------------------------------------------------------------------------------------------------------
Class R2 shares
- -------------------------------------------------------------------------------------------------------
Net assets $606,044
Shares outstanding 45,331
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share $13.37
- -------------------------------------------------------------------------------------------------------
Class R3 shares
- -------------------------------------------------------------------------------------------------------
Net assets $4,651,634
Shares outstanding 347,096
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share $13.40
- -------------------------------------------------------------------------------------------------------
Class R4 shares
- -------------------------------------------------------------------------------------------------------
Net assets $2,272,053
Shares outstanding 169,365
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share $13.42
- -------------------------------------------------------------------------------------------------------
Class R5 shares
- -------------------------------------------------------------------------------------------------------
Net assets $61,598
Shares outstanding 4,591
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share $13.42
- -------------------------------------------------------------------------------------------------------
On sales of $100,000 or more, the offering price of Class A shares is reduced. A contingent
deferred sales charge may be imposed on redemptions of Class A, Class B and Class C shares.
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS Statement of Operations (unaudited)
This statement describes how much your fund earned in investment income and accrued in expenses.
It also describes any gains and/or losses generated by fund operations.
SIX MONTHS ENDED 4/30/06
NET INVESTMENT INCOME
- ------------------------------------------------------------------------------------------------------
Income
Dividends $21,062,052
Interest 3,667,814
Foreign taxes withheld (632,367)
- ------------------------------------------------------------------------------------------------------
Total investment income $24,097,499
- ------------------------------------------------------------------------------------------------------
Expenses
Management fee $5,448,745
Distribution and service fees 5,411,317
Shareholder servicing costs 1,631,137
Administrative services fee 99,543
Retirement plan administration and services fees 8,362
Independent trustees' compensation 18,790
Custodian fee 284,265
Shareholder communications 182,566
Auditing fees 21,842
Legal fees 50,942
Miscellaneous 183,844
- ------------------------------------------------------------------------------------------------------
Total expenses $13,341,353
- ------------------------------------------------------------------------------------------------------
Fees paid indirectly (83,458)
Reduction of expenses by investment adviser (8,703)
- ------------------------------------------------------------------------------------------------------
Net expenses $13,249,192
- ------------------------------------------------------------------------------------------------------
Net investment income $10,848,307
- ------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
- ------------------------------------------------------------------------------------------------------
Realized gain (loss) (identified cost basis)
Investment transactions $178,463,957
Foreign currency transactions 2,573,077
- ------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments and foreign
currency transactions $181,037,034
- ------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation)
Investments $(20,908,567)
Translation of assets and liabilities in foreign currencies (8,327,077)
- ------------------------------------------------------------------------------------------------------
Net unrealized gain (loss) on investments and foreign
currency translation $(29,235,644)
- ------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and
foreign currency $151,801,390
- ------------------------------------------------------------------------------------------------------
Change in net assets from operations $162,649,697
- ------------------------------------------------------------------------------------------------------
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.
SIX MONTHS ENDED YEAR ENDED
4/30/06 10/31/05
(UNAUDITED)
CHANGE IN NET ASSETS
- --------------------------------------------------------------------------------------------
FROM OPERATIONS
- -------------------------------------------------------------------------------------------------------
Net investment income $10,848,307 $19,525,494
Net realized gain (loss) on investments and foreign
currency transactions 181,037,034 279,974,644
Net unrealized gain (loss) on investments and foreign
currency translation (29,235,644) 38,155,542
- -------------------------------------------------------------------------------------------------------
Change in net assets from operations $162,649,697 $337,655,680
- -------------------------------------------------------------------------------------------------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------
From net investment income
Class A $(6,141,581) $(11,228,838)
Class B (1,617,979) (4,389,574)
Class C (584,675) (1,462,469)
Class I (50,869) (77,745)
Class R (38,988) (58,110)
Class R1 (2,125) (1,404)
Class R2 (1,902) (691)
Class R3 (14,986) (10,336)
Class R4 (5,711) (471)
Class R5 (419) (554)
- -------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(8,459,235) $(17,230,192)
- -------------------------------------------------------------------------------------------------------
Change in net assets from fund share transactions $(103,851,496) $121,017,931
- -------------------------------------------------------------------------------------------------------
Redemption fees $-- $4,318
- -------------------------------------------------------------------------------------------------------
Total change in net assets $50,338,966 $441,447,737
- -------------------------------------------------------------------------------------------------------
NET ASSETS
- -------------------------------------------------------------------------------------------------------
At beginning of period 1,786,809,195 1,345,361,458
At end of period (including undistributed net investment
income of $1,072,723 and accumulated distributions in
excess of net investment income of $1,316,349) $1,837,148,161 $1,786,809,195
- -------------------------------------------------------------------------------------------------------
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 semiannual period
and the past 5 fiscal 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.
SIX MONTHS YEARS ENDED 10/31
ENDED -------------------------------------------------------------------------
CLASS A 4/30/06 2005 2004 2003 2002 2001
(UNAUDITED)
Net asset value, beginning of
period $12.33 $9.98 $7.89 $6.13 $8.68 $13.66
- -------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM
INVESTMENT OPERATIONS (x)
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.10 $0.18 $0.16 $0.15 $0.16 $0.21
Net realized and unrealized gain
(loss) on investments and foreign
currency 1.07 2.34 2.08 1.76 (2.55) (3.70)
- -------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $1.17 $2.52 $2.24 $1.91 $(2.39) $(3.49)
- -------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.08) $(0.17) $(0.15) $(0.15) $(0.16) $(0.27)
From net realized gain on
investments and foreign currency
transactions -- -- -- -- -- (1.22)
- -------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to
shareholders $(0.08) $(0.17) $(0.15) $(0.15) $(0.16) $(1.49)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.42 $12.33 $9.98 $7.89 $6.13 $8.68
- -------------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s)(t) 9.53(n) 25.33 28.41(b)(z) 31.69 (27.78) (27.72)
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.12(a) 1.13 1.15 1.19 1.15 1.06
Expenses after expense
reductions (f) 1.12(a) 1.13 1.15 1.19 1.11 1.03
Net investment income (x) 1.54(a) 1.60 1.83 2.11 2.10 1.95
Portfolio turnover 47 101 97 144 80 110
Net assets at end of period
(000 Omitted) $988,778 $933,535 $586,730 $464,832 $382,712 $733,848
- -------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED -------------------------------------------------------------------------
CLASS B 4/30/06 2005 2004 2003 2002 2001
(UNAUDITED)
Net asset value, beginning of
period $12.29 $9.95 $7.87 $6.11 $8.65 $13.62
- -------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM
INVESTMENT OPERATIONS (x)
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.05 $0.10 $0.10 $0.10 $0.10 $0.13
Net realized and unrealized gain
(loss) on investments and foreign
currency 1.06 2.32 2.05 1.76 (2.53) (3.69)
- -------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $1.11 $2.42 $2.15 $1.86 $(2.43) $(3.56)
- -------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.03) $(0.08) $(0.07) $(0.10) $(0.11) $(0.19)
From net realized gain on
investments and foreign currency
transactions -- -- -- -- -- (1.22)
- -------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to
shareholders $(0.03) $(0.08) $(0.07) $(0.10) $(0.11) $(1.41)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.37 $12.29 $9.95 $7.87 $6.11 $8.65
- -------------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s)(t) 9.07(n) 24.39 27.50(b)(z) 30.66 (28.30) (28.28)
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.87(a) 1.89 1.91 1.94 1.90 1.81
Expenses after expense
reductions (f) 1.87(a) 1.89 1.91 1.94 1.86 1.78
Net investment income (x) 0.79(a) 0.88 1.10 1.38 1.35 1.20
Portfolio turnover 47 101 97 144 80 110
Net assets at end of period
(000 Omitted) $598,696 $617,687 $575,642 $531,008 $481,361 $984,740
- -------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED -------------------------------------------------------------------------
CLASS C 4/30/06 2005 2004 2003 2002 2001
(UNAUDITED)
Net asset value, beginning
of period $12.30 $9.96 $7.87 $6.11 $8.66 $13.63
- -------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM
INVESTMENT OPERATIONS (x)
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.05 $0.10 $0.10 $0.10 $0.10 $0.13
Net realized and unrealized gain
(loss) on investments and foreign
currency 1.07 2.32 2.06 1.76 (2.54) (3.69)
- -------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $1.12 $2.42 $2.16 $1.86 $(2.44) $(3.56)
- -------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.03) $(0.08) $(0.07) $(0.10) $(0.11) $(0.19)
From net realized gain on
investments and foreign currency
transactions -- -- -- -- -- (1.22)
- -------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to
shareholders $(0.03) $(0.08) $(0.07) $(0.10) $(0.11) $(1.41)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.39 $12.30 $9.96 $7.87 $6.11 $8.66
- -------------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s)(t) 9.15(n) 24.37 27.63(b)(z) 30.66 (28.38) (28.26)
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.87(a) 1.88 1.90 1.94 1.90 1.81
Expenses after expense
reductions (f) 1.87(a) 1.88 1.90 1.94 1.86 1.78
Net investment income (x) 0.79(a) 0.87 1.10 1.38 1.35 1.20
Portfolio turnover 47 101 97 144 80 110
Net assets at end of period
(000 Omitted) $226,487 $218,335 $177,875 $159,113 $144,861 $327,715
- -------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED --------------------------------------------------------------------
CLASS I 4/30/06 2005 2004 2003 2002 2001
(UNAUDITED)
Net asset value, beginning of period $12.35 $10.00 $7.91 $6.14 $8.69 $13.68
- -------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM
INVESTMENT OPERATIONS (x)
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.12 $0.21 $0.18 $0.17 $0.18 $0.24
Net realized and unrealized gain (loss)
on investments and foreign currency 1.07 2.34 2.08 1.77 (2.55) (3.71)
- -------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $1.19 $2.55 $2.26 $1.94 $(2.37) $(3.47)
- -------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.10) $(0.20) $(0.17) $(0.17) $(0.18) $(0.30)
From net realized gain on investments
and foreign currency transactions -- -- -- -- -- (1.22)
- -------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to
shareholders $(0.10) $(0.20) $(0.17) $(0.17) $(0.18) $(1.52)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.44 $12.35 $10.00 $7.91 $6.14 $8.69
- -------------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 9.65(n) 25.59 28.84(b)(z) 31.96 (27.56) (27.58)
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 0.87(a) 0.88 0.90 0.94 0.90 0.81
Expenses after expense reductions (f) 0.87(a) 0.88 0.90 0.94 0.86 0.78
Net investment income (x) 1.79(a) 1.81 2.07 2.36 2.33 2.19
Portfolio turnover 47 101 97 144 80 110
Net assets at end of period
(000 Omitted) $6,489 $6,630 $2,823 $1,744 $1,306 $2,604
- -------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED ----------------------------------------------------
CLASS R 4/30/06 2005 2004 2003(i)
(UNAUDITED)
Net asset value, beginning of period $12.32 $9.97 $7.89 $6.40
- ----------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.08 $0.15 $0.15 $0.11
Net realized and unrealized gain (loss) on
investments and foreign currency 1.07 2.34 2.05 1.47
- ----------------------------------------------------------------------------------------------------------------------------
Total from investment operations $1.15 $2.49 $2.20 $1.58
- ----------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.07) $(0.14) $(0.12) $(0.09)
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.40 $12.32 $9.97 $7.89
- ----------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 9.32(n) 25.05 28.11(b)(z) 24.78(n)
- ----------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.38(a) 1.38 1.40 1.42(a)
Expenses after expense reductions (f) 1.38(a) 1.38 1.40 1.42(a)
Net investment income 1.29(a) 1.33 1.64 1.47(a)
Portfolio turnover 47 101 97 144
Net assets at end of period (000 Omitted) $7,952 $6,823 $2,169 $189
- ----------------------------------------------------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED
CLASS R1 ENDED 4/30/06 10/31/05(i)
(UNAUDITED)
Net asset value, beginning of period $12.29 $11.04
- -----------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.04 $0.01
Net realized and unrealized gain (loss) on investments and foreign currency 1.08 1.29
- -----------------------------------------------------------------------------------------------------------------------------
Total from investment operations $1.12 $1.30
- -----------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.03) $(0.05)
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.38 $12.29
- -----------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 9.10(n) 11.77(n)
- -----------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 2.08(a) 2.08(a)
Expenses after expense reductions (f) 1.98(a) 2.05(a)
Net investment income 0.68(a) 0.12(a)
Portfolio turnover 47 101
Net assets at end of period (000 Omitted) $1,155 $879
- -----------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEAR ENDED
CLASS R2 ENDED 4/30/06 10/31/05(i)
(UNAUDITED)
Net asset value, beginning of period $12.29 $11.04
- ------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.07 $0.03
Net realized and unrealized gain (loss) on investments and foreign currency 1.06 1.29
- ------------------------------------------------------------------------------------------------------------------------
Total from investment operations $1.13 $1.32
- ------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.05) $(0.07)
- ------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.37 $12.29
- ------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 9.21(n) 11.96(n)
- ------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND SUPPLEMENTAL DATA:
- ------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.79(a) 1.77(a)
Expenses after expense reductions (f) 1.64(a) 1.71(a)
Net investment income 1.06(a) 0.37(a)
Portfolio turnover 47 101
Net assets at end of period (000 Omitted) $606 $377
- ------------------------------------------------------------------------------------------------------------------------
YEARS ENDED 10/31
SIX MONTHS -------------------------------
CLASS R3 ENDED 4/30/06 2005 2004
(UNAUDITED)
Net asset value, beginning of period $12.31 $9.97 $7.89
- ------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.07 $0.11 $0.14
Net realized and unrealized gain (loss) on investments and
foreign currency 1.08 2.34 2.04
- ------------------------------------------------------------------------------------------------------------------------
Total from investment operations $1.15 $2.45 $2.18
- ------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.06) $(0.11) $(0.10)
- ------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.40 $12.31 $9.97
- ------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 9.33(n) 24.66 27.77(b)(z)
- ------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- ------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.62(a) 1.62 1.65
Expenses after expense reductions (f) 1.52(a) 1.60 1.65
Net investment income 1.16(a) 0.97 1.42
Portfolio turnover 47 101 97
Net assets at end of period (000 Omitted) $4,652 $2,426 $122
- ------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEAR ENDED
CLASS R4 ENDED 4/30/06 10/31/05(i)
(UNAUDITED)
Net asset value, beginning of period $12.33 $11.08
- -----------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------------------
Net investment income (d) $0.08 $0.10
Net realized and unrealized gain (loss) on investments and foreign currency 1.08 1.25
- -----------------------------------------------------------------------------------------------------------
Total from investment operations $1.16 $1.35
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------
From net investment income $(0.07) $(0.10)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.42 $12.33
- -----------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 9.45(n) 12.22(n)
- -----------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.27(a) 1.26(a)
Expenses after expense reductions (f) 1.27(a) 1.26(a)
Net investment income 1.40(a) 1.50(a)
Portfolio turnover 47 101
Net assets at end of period (000 Omitted) $2,272 $62
- -----------------------------------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED
CLASS R5 ENDED 4/30/06 10/31/05(i)
(UNAUDITED)
Net asset value, beginning of period $12.33 $11.08
- -----------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------------------
Net investment income (d) $0.10 $0.13
Net realized and unrealized gain (loss) on investments and foreign currency 1.08 1.24
- -----------------------------------------------------------------------------------------------------------
Total from investment operations $1.18 $1.37
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------
From net investment income $(0.09) $(0.12)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.42 $12.33
- -----------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 9.61(n) 12.41(n)
- -----------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 0.97(a) 0.96(a)
Expenses after expense reductions (f) 0.97(a) 0.96(a)
Net investment income 1.70(a) 1.83(a)
Portfolio turnover 47 101
Net assets at end of period (000 Omitted) $62 $56
- -----------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
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.
(a) Annualized.
(b) 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 did not have a material impact on the
net asset value per share based on the shares outstanding on the day the
proceeds were recorded.
(d) Per share data are based on average shares outstanding.
(f) Ratios do not reflect reductions from fees paid indirectly.
(i) For the period from the class' inception, December 31, 2002 (Class R) and
April 1, 2005 (Classes R1, R2, R4, and R5) through the stated period end.
(n) Not annualized.
(r) Certain expenses have been reduced without which performance would have
been lower.
(s) From time to time the fund may receive proceeds from litigation
settlements, without which performance would be lower.
(t) Total returns do not include any applicable sales charges.
(x) Effective November 1, 2001, the fund adopted the provisions of the AICPA
Audit and Accounting Guide for Investment Companies and began amortizing
and accreting all premiums and discounts on debt securities. Per share data
and ratios for periods prior to November 1, 2001 have not been restated to
reflect this change.
(z) The fund's total return calculation includes a net increase from gains
realized on the disposal of investments in violation of restrictions. The
gains resulted in an increase in net asset value of $0.0007 per share based
on shares outstanding on the day the gains were realized. Excluding the
offset of these gains from the fund's ending net asset value per share, the
total return for the year ended October 31, 2004 would have been
approximately 28.40%, 27.49%, 27.62%, 28.83%, 28.10% and 27.76% for Class
A, Class B, Class C, Class I, Class R and Class R3, respectively.
SEE NOTES TO FINANCIAL STATEMENTS
NOTES TO FINANCIAL STATEMENTS (unaudited)
(1) BUSINESS AND ORGANIZATION
MFS Utilities Fund (the fund) is a series of MFS Series Trust VI (the trust).
The trust is organized as a Massachusetts business trust and is registered
under the Investment Company Act of 1940, as amended, as an open-end
management investment company.
(2) SIGNIFICANT ACCOUNTING POLICIES
GENERAL - The preparation of financial statements in conformity with U.S.
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities,
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates. The
fund can invest in foreign securities, including securities of emerging market
issuers. Investments in foreign securities are vulnerable to the effects of
changes in the relative values of the local currency and the U.S. dollar and
to the effects of changes in each country's legal, political, and economic
environment. The markets of emerging markets countries are generally more
volatile than the markets of developed countries with more mature economies.
All of the risks of investing in foreign securities previously described are
heightened when investing in emerging markets countries.
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
reported that day, equity securities are generally valued at the last quoted
daily bid quotation as reported by an independent pricing service on the
market or exchange on which they are primarily traded. Debt instruments (other
than short-term instruments), including restricted debt instruments, are
generally valued at an evaluated or composite bid as reported by an
independent pricing service. Values of debt instruments obtained from pricing
services can utilize both dealer-supplied valuations and electronic data
processing techniques, which take into account factors such as institutional-
size trading in similar groups of securities, yield, quality, coupon rate,
maturity, type of issue, trading characteristics and other market data. Short-
term instruments with a maturity at issuance of 397 days or less are generally
valued at amortized cost, which approximates market value. Forward foreign
currency contracts are generally valued at the mean of bid and asked prices
for the time period interpolated from rates reported by an independent pricing
service for proximate time periods. 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 at a broker-dealer bid quotation. The
values of foreign securities and other assets and liabilities expressed in
foreign currencies are converted to U.S. dollars using the mean of bid and
asked prices for rates reported by an independent pricing service. The Board
of Trustees has delegated primary responsibility for determining or causing to
be determined the value of the fund's investments (including any fair
valuation) to the adviser pursuant to valuation policies and procedures
approved by the Board. If the adviser determines that reliable market
quotations are not readily available, investments are valued at fair value as
determined in good faith by the adviser in accordance with such procedures
under the oversight of the Board of Trustees. Under the fund's valuation
policies and procedures, market quotations are not considered to be readily
available for many types of debt instruments. These investments are generally
valued at fair value based on information from independent pricing services.
These valuations can be based on both dealer-supplied valuations and
electronic data processing techniques, which take into account factors such as
institutional-size trading in similar groups of securities, yield, quality,
coupon rate, maturity, type of issue, trading characteristics and other market
data. The adviser may rely on independent pricing services or other
information (such as the correlation with price movements of similar
securities in the same or other markets; the type, cost and investment
characteristics of the security; the business and financial condition of the
issuer; and trading and other market data) to assist in determining whether to
fair value and at what value to fair value an investment. The value of an
investment for purposes of calculating the fund's net asset value can differ
depending on the source and method used to determine value. When fair
valuation is used, the value of investments used to determine the fund's net
asset value may differ from quoted or published prices for the same
investments. In addition, investments may be valued at fair value if the
adviser determines that an investment's value has been materially affected by
events occurring after the close of the exchange or market on which the
investment is principally traded (such as foreign exchange or market) and
prior to the determination of the fund's net asset value, or after the halting
of trading of a specific security where trading does not resume prior to the
close of the exchange or market on which the security is principally traded.
Events that occur on a frequent basis after foreign markets close (such as
developments in foreign markets and significant movements in the U.S. markets)
and prior to the determination of the fund's net asset value may be deemed to
have a material affect on the value of securities traded in foreign markets.
Accordingly, the fund's foreign equity securities may often be valued at fair
value.
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.
DERIVATIVE RISK - The fund may invest in derivatives for hedging or non-
hedging purposes. While hedging can reduce or eliminate losses, it can also
reduce or eliminate gains. When the fund uses derivatives as an investment to
gain market exposure, or for hedging purposes, gains and losses from
derivative instruments may be substantially greater than the derivative's
original cost. Derivative instruments include forward foreign currency
exchange contracts.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS - The fund may enter into forward
foreign currency exchange contracts for the purchase or sale of a specific
foreign currency at a fixed price on a future date. Risks may arise upon
entering into these contracts from the potential inability of counterparties
to meet the terms of their contracts and from unanticipated movements in the
value of the contract. The fund may enter into forward foreign currency
exchange contracts for hedging purposes as well as for non-hedging purposes.
For hedging purposes, the fund may enter into contracts to deliver or receive
foreign currency it will receive from or require for its normal investment
activities. The fund may also use contracts in a manner intended to protect
foreign currency denominated securities from declines in value due to
unfavorable exchange rate movements. For non-hedging purposes, the fund may
enter into contracts with the intent of changing the relative exposure of the
fund's portfolio of securities to different currencies to take advantage of
anticipated changes. The forward foreign currency exchange contracts are
adjusted by the daily exchange rate of the underlying currency and any gains
or losses are recorded as unrealized until the contract settlement date. On
contract settlement date, the gains or losses are recorded as realized gains
or losses on foreign currency transactions.
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.
Certain dividends from foreign securities will be recorded when the fund is
informed of the dividend if such information is obtained subsequent to the ex-
dividend date. Dividend 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 six months ended April 30, 2006, the fund's custodian
fees
were reduced by $64,503 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 six months ended April 30, 2006, the fund's custodian expenses
were reduced by $18,955 under this agreement. These amounts are shown as a
reduction of total expenses on the Statement of Operations. Effective
January 1, 2006, the commission recapture agreement was terminated.
TAX MATTERS AND DISTRIBUTIONS - The fund intends to continue to qualify as a
regulated investment company, as defined under Subchapter M of the Internal
Revenue Code, and to distribute all of its taxable income, including realized
capital gains. Accordingly, no provision for federal income tax is required in
the financial statements. Foreign taxes, if any, have been accrued by the fund
in the accompanying financial statements.
Distributions to shareholders are recorded on the ex-dividend date. Income and
capital gain distributions are determined in accordance with income tax
regulations, which may differ from generally accepted accounting principles.
Certain capital accounts in the financial statements are periodically adjusted
for permanent differences in order to reflect their tax character. These
adjustments have no impact on net assets or net asset value per share.
Temporary differences which arise from recognizing certain items of income,
expense, gain or loss in different periods for financial statement and tax
purposes will reverse at some time in the future. Distributions in excess of
net investment income or net realized gains are temporary overdistributions
for financial statement purposes resulting from differences in the recognition
or classification of income or distributions for financial statement and tax
purposes.
Book/tax differences primarily relate to foreign currency transactions,
defaulted bonds, amortization and accretion of debt securities, wash sales,
and foreign taxes.
The tax character of distributions made during the current period will be
determined at fiscal year end. The tax character of distributions declared to
shareholders is as follows:
10/31/05 10/31/04
Ordinary income (including any
short-term capital gains)(1) $17,230,192 $14,730,338
(1) Included in the fund's distributions from ordinary income for the year
ended October 31, 2004 is $496,972 in excess of investment company taxable
income, which in accordance with applicable U.S. tax law, is taxable to
shareholders as ordinary income distributions.
The federal tax cost and the tax basis components of distributable earnings
were as follows:
AS OF APRIL 30, 2006
Cost of investments $1,809,695,674
----------------------------------------------------------
Gross appreciation $202,175,147
Gross depreciation (30,609,128)
----------------------------------------------------------
Net unrealized appreciation (depreciation) $171,566,019
AS OF OCTOBER 31, 2005
Undistributed ordinary income $912,423
Capital loss carryforwards (540,181,622)
Other temporary differences (2,217,723)
Net unrealized appreciation (depreciation) 192,622,930
The aggregate cost above includes prior fiscal year end tax adjustments.
As of October 31, 2005, the fund had available capital loss carryforwards to
offset future realized gains. Such losses expire as follows:
October 31, 2010 $540,181,622
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 shares
will convert to Class A shares 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 0.60% of
the fund's average daily net assets. The investment adviser has contractually
agreed to reduce its management fee to 0.55% of average daily net assets in
excess of $3 billion. For the six months ended April 30, 2006, the fund's
average daily net assets did not exceed $3 billion and therefore, the
management fee was not reduced. The management fee incurred for the six months
ended April 30, 2006 was equivalent to an annual effective rate of 0.60% of the
fund's average daily net assets.
DISTRIBUTOR - MFS Fund Distributors, Inc. (MFD), a wholly owned subsidiary of
MFS, as distributor, received $130,938 for the six months ended April 30, 2006,
as its portion of the initial sales charge on sales of Class A shares of the
fund.
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% 0.25% $1,200,732
Class B 0.75% 0.25% 1.00% 1.00% 3,065,202
Class C 0.75% 0.25% 1.00% 1.00% 1,111,407
Class R 0.25% 0.25% 0.50% 0.50% 19,062
Class R1 0.50% 0.25% 0.75% 0.75% 3,755
Class R2 0.25% 0.25% 0.50% 0.50% 1,218
Class R3 0.25% 0.25% 0.50% 0.50% 8,752
Class R4 -- 0.25% 0.25% 0.25% 1,189
- ---------------------------------------------------------------------------------------------------------------------
Total Distribution and Service Fees$5,411,317
(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 six months ended
April 30, 2006 based on each class' average daily net assets. Payment of the 0.10% annual Class A distribution
fee is not yet implemented and will commence on such date as the fund's Board of Trustees may determine.
Certain Class A and Class C shares are subject to a contingent deferred sales
charge in the event of a shareholder redemption within 12 months of purchase.
Class B 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 six months ended April
30, 2006, were as follows:
AMOUNT
Class A $8,255
Class B 302,646
Class C 14,056
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 six months ended April 30, 2006, the fee was $867,611, which equated
to 0.0956% 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 six months ended April 30, 2006, these
costs amounted to $608,892.
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. From July 1, 2005 through March 31, 2006, the fund's annual fixed
amount was $10,000. Effective April 1, 2006, the fund's annual fixed amount is
$17,500. The administrative services fee incurred for the six months ended
April 30, 2006 was equivalent to an annual effective rate of 0.0110% 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 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. MFS may subsequently
pay all, or a portion, of the retirement plan administration and services fee
to affiliated or unaffiliated third parties. For the six months ended April
30, 2006, 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
EFFECTIVE TOTAL
FEE RATE RATE(1) AMOUNT
Class R1 0.45% 0.35% $2,253
Class R2 0.40% 0.25% 974
Class R3 0.25% 0.15% 4,376
Class R4 0.15% 0.15% 730
Class R5 0.10% 0.10% 29
- -------------------------------------------------------------------------------
Total Retirement Plan Administration and
Services Fees $8,362
(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.
This agreement will continue until at least September 30, 2007. For the
six months ended April 30, 2006, this waiver amounted to $2,617 and is
reflected as a reduction of total expenses in the Statement of Operations.
TRUSTEES' AND OFFICERS' COMPENSATION - The fund pays compensation to
Independent Trustees in the form of a retainer, attendance fees, and
additional compensation to Board and Committee chairpersons. The fund does not
pay compensation directly to Trustees or officers of the fund who are also
officers of the investment adviser, all of whom receive remuneration for their
services to the fund from MFS. Certain officers and Trustees of the fund are
officers or directors of MFS, MFD, and MFSC. The fund has an unfunded, defined
benefit plan for retired Independent Trustees which resulted in a pension
expense of $1,193. The fund also has an unfunded retirement benefit deferral
plan for certain current Independent Trustees which resulted in an expense of
$490. Both amounts are included in Independent trustees' compensation for the
six months ended April 30, 2006. The deferred liability for retirement
benefits payable to retired Trustees and certain current Trustees amounted to
$20,778 and $39,917, respectively, at April 30, 2006, and is included in
payable for independent 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. The funds can
terminate the Agreement with Tarantino LLC at any time under the terms of the
Agreement. For the six months ended April 30, 2006, the fee paid to Tarantino
LLC was $7,333. MFS has agreed to reimburse the fund for a portion of the
payments made by the funds to Tarantino LLC in the amount of $6,086, 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.
(4) PORTFOLIO SECURITIES
Purchases and sales of investments, other than U.S. government securities,
purchased option transactions, and short-term obligations, aggregated
$837,807,861 and $937,310,550, respectively.
(5) SHARES OF BENEFICIAL INTEREST
The fund's Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest. Transactions in
fund shares were as follows:
SIX MONTHS ENDED YEAR ENDED
4/30/06 10/31/05 (i)
SHARES AMOUNT SHARES AMOUNT
Shares sold
Class A 12,417,529 $161,289,734 33,012,111 $380,967,466
Class B 2,315,647 29,784,144 6,155,311 70,346,774
Class C 1,400,342 18,145,188 3,474,179 39,724,548
Class I 104,738 1,355,818 320,468 3,769,390
Class R 158,051 2,028,956 442,895 5,029,875
Class R1 33,258 426,928 75,150 902,415
Class R2 15,347 197,594 34,360 435,607
Class R3 234,592 3,058,945 229,235 2,753,147
Class R4 176,041 2,304,918 4,954 55,651
Class R5 -- -- 4,513 50,000
- -------------------------------------------------------------------------------------------------------
16,855,545 $218,592,225 43,753,176 $504,034,873
Shares issued to shareholders
in reinvestment of distributions
Class A 408,380 $5,278,048 820,461 $9,602,010
Class B 103,927 1,328,055 306,385 3,572,910
Class C 31,215 399,488 86,295 1,009,289
Class I 3,845 49,778 6,391 75,359
Class R 2,572 33,168 4,585 54,099
Class R1 166 2,116 113 1,397
Class R2 148 1,902 55 673
Class R3 1,127 14,591 843 10,212
Class R4 437 5,711 39 471
Class R5 32 419 46 554
- -------------------------------------------------------------------------------------------------------
551,849 $7,113,276 1,225,213 $14,326,974
Shares reacquired
Class A (14,844,994) $(192,342,815) (16,877,017) $(193,480,346)
Class B (7,913,434) (102,657,056) (14,033,040) (159,448,969)
Class C (2,261,245) (29,309,714) (3,664,643) (41,656,935)
Class I (162,589) (2,120,419) (72,276) (840,827)
Class R (121,321) (1,589,777) (111,046) (1,265,328)
Class R1 (18,555) (241,825) (3,745) (46,778)
Class R2 (810) (10,573) (3,769) (45,979)
Class R3 (85,619) (1,123,530) (45,303) (558,754)
Class R4 (12,106) (161,288) -- --
- -------------------------------------------------------------------------------------------------------
(25,420,673) $(329,556,997) (34,810,839) $(397,343,916)
Net change
Class A (2,019,085) $(25,775,033) 16,955,555 $197,089,130
Class B (5,493,860) (71,544,857) (7,571,344) (85,529,285)
Class C (829,688) (10,765,038) (104,169) (923,098)
Class I (54,006) (714,823) 254,583 3,003,922
Class R 39,302 472,347 336,434 3,818,646
Class R1 14,869 187,219 71,518 857,034
Class R2 14,685 188,923 30,646 390,301
Class R3 150,100 1,950,006 184,775 2,204,605
Class R4 164,372 2,149,341 4,993 56,122
Class R5 32 419 4,559 50,554
- -------------------------------------------------------------------------------------------------------
(8,013,279) $(103,851,496) 10,167,550 $121,017,931
(i) For the period from the class' inception, April 1, 2005 (Classes R1, R2, R4, and R5) through the
stated period end.
(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 six months ended April 30, 2006 was $6,273, and
is included in miscellaneous expense on the Statement of Operations. The fund
had no significant borrowings during the six months ended April 30, 2006.
BOARD REVIEW OF INVESTMENT ADVISORY AGREEMENT
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 trust will file a complete schedule of portfolio holdings with the
Securities and Exchange Commission (the Commission) for the first and third
quarters of each fiscal year on Form N-Q. The trust's Form N-Q may be reviewed
and copied at the:
Public Reference Room
Securities and Exchange Commission
100 F Street, NE, Room 1580
Washington, D.C. 20549
Information on the operation of the Public Reference Room may be obtained by
calling the Commission at 1-202-551-5850. The trust'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.
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)
MFS Investment Management(R)
MFS(R) investment products are offered through MFS Fund Distributors, Inc.,
500 Boylston Street, Boston, MA 02116.
MMU-SEM-06/06 112M
MFS(R) GLOBAL EQUITY FUND 4/30/06
SEMIANNUAL REPORT
- -------------------------------------------------------------------------------
LETTER FROM THE CEO 1
- ---------------------------------------------------
PORTFOLIO COMPOSITION 2
- ---------------------------------------------------
EXPENSE TABLE 3
- ---------------------------------------------------
PORTFOLIO OF INVESTMENTS 5
- ---------------------------------------------------
FINANCIAL STATEMENTS 10
- ---------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 24
- ---------------------------------------------------
BOARD REVIEW OF INVESTMENT
ADVISORY AGREEMENT 34
- ---------------------------------------------------
PROXY VOTING POLICIES AND
INFORMATION 34
- ---------------------------------------------------
QUARTERLY PORTFOLIO DISCLOSURE 34
- ---------------------------------------------------
CONTACT INFORMATION BACK COVER
- ---------------------------------------------------
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.
[logo] M F S(SM)
INVESTMENT MANAGEMENT(R)
LETTER FROM THE CEO
[Photo of Robert J. Manning]
Dear Shareholders,
It has been said that change is the only constant in life. As investors have
seen, that theme is still accurate today as we recently have experienced
shifting economic cycles because of natural disasters and political
instability around the globe.
Markets worldwide have fluctuated in the past year as devastating hurricanes
had a dramatic effect on the international economy, particularly on oil
prices. We witnessed political unrest in the Middle East, highlighted by
instability in Iraq, and in Africa, the usually stable Nigeria also
experienced violence. As a result, energy prices have bounced up and down,
with crude oil prices at one point topping a record $70 per barrel.
Such cycles are not uncommon and in fact have almost become the norm
in our everyday lives. What does all of this mean to you as an investor?
In times like these, it helps to know that you're working with a seasoned
investment professional who has experience to guide you through difficult
times. At MFS(R), we believe our investment management team has the knowledge
and confidence to navigate through difficult cycles and at the
same time see through adversity to find investment opportunities for our
clients and shareholders.
Our investment management process, honed over 80 years, combines a unique
concept of teamwork with our unwavering focus on the long term. We firmly
believe that the best way 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. Rebalance assets regularly to maintain a desired asset
allocation. Of course, these strategies cannot guarantee a profit or protect
against a loss. 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 - through both up and down
economic cycles.
Respectfully,
/s/ Robert J. Manning
Robert J. Manning
Chief Executive Officer and Chief Investment Officer
MFS Investment Management(R)
June 15, 2006
The opinions expressed in this letter are those of MFS, and no forecasts can
be guaranteed.
PORTFOLIO COMPOSITION
PORTFOLIO STRUCTURE
Stocks 98.4%
Cash & Other Net Assets 1.6%
TOP TEN HOLDINGS
Reckitt Benckiser PLC 3.2%
------------------------------------------------
Johnson & Johnson 3.0%
------------------------------------------------
Nestle S.A. 3.0%
------------------------------------------------
American Express Co. 2.1%
------------------------------------------------
Schneider Electric S.A. 2.0%
------------------------------------------------
Roche Holding AG 2.0%
------------------------------------------------
Samsung Electronic Co., Ltd. 2.0%
------------------------------------------------
UBS AG 2.0%
------------------------------------------------
L'Air Liquide S.A. 2.0%
------------------------------------------------
Sanofi-Aventis 1.9%
------------------------------------------------
EQUITY SECTORS
Financial Services 20.1%
------------------------------------------------
Health Care 17.7%
------------------------------------------------
Consumer Staples 14.7%
------------------------------------------------
Technology 9.6%
------------------------------------------------
Retailing 7.2%
------------------------------------------------
Basic Materials 5.9%
------------------------------------------------
Leisure 5.6%
------------------------------------------------
Energy 4.9%
------------------------------------------------
Autos & Housing 4.1%
------------------------------------------------
Utilities & Communications 3.4%
------------------------------------------------
Industrial Goods & Services 3.1%
------------------------------------------------
Special Products & Services 1.5%
------------------------------------------------
Transportation 0.6%
------------------------------------------------
COUNTRY WEIGHTINGS
United States 38.6%
------------------------------------------------
France 14.2%
------------------------------------------------
United Kingdom 12.7%
------------------------------------------------
Japan 9.2%
------------------------------------------------
Switzerland 9.1%
------------------------------------------------
Germany 3.2%
------------------------------------------------
Italy 2.3%
------------------------------------------------
South Korea 2.1%
------------------------------------------------
Sweden 2.1%
------------------------------------------------
All Others 6.5%
------------------------------------------------
Percentages are based on net assets as of 4/30/06.
The portfolio is actively managed, and current holdings may be different.
EXPENSE TABLE
FUND EXPENSES BORNE BY THE SHAREHOLDERS DURING THE PERIOD,
NOVEMBER 1, 2005 THROUGH APRIL 30, 2006.
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 November 1, 2005 through
April 30, 2006.
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.
- --------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period(p)
Share Expense Account Value Account Value 11/01/05-
Class Ratio 11/01/05 4/30/06 4/30/06
- --------------------------------------------------------------------------------
Actual 1.46% $1,000.00 $1,160.50 $7.82
A ------------------------------------------------------------------------
Hypothetical (h) 1.46% $1,000.00 $1,017.55 $7.30
- --------------------------------------------------------------------------------
Actual 2.21% $1,000.00 $1,156.10 $11.81
B -------------------------------------------------------------------------
Hypothetical (h) 2.21% $1,000.00 $1,013.84 $11.04
- --------------------------------------------------------------------------------
Actual 2.21% $1,000.00 $1,156.50 $11.82
C ------------------------------------------------------------------------
Hypothetical (h) 2.21% $1,000.00 $1,013.84 $11.04
- --------------------------------------------------------------------------------
Actual 1.21% $1,000.00 $1,162.20 $6.49
I ------------------------------------------------------------------------
Hypothetical (h) 1.21% $1,000.00 $1,018.79 $6.06
- --------------------------------------------------------------------------------
Actual 2.16% $1,000.00 $1,156.70 $11.55
J ------------------------------------------------------------------------
Hypothetical (h) 2.16% $1,000.00 $1,014.08 $10.79
- --------------------------------------------------------------------------------
Actual 1.71% $1,000.00 $1,159.00 $9.15
R ------------------------------------------------------------------------
Hypothetical (h) 1.71% $1,000.00 $1,016.31 $8.55
- --------------------------------------------------------------------------------
Actual 2.31% $1,000.00 $1,155.50 $12.35
R1 ------------------------------------------------------------------------
Hypothetical (h) 2.31% $1,000.00 $1,013.34 $11.53
- --------------------------------------------------------------------------------
Actual 1.96% $1,000.00 $1,157.70 $10.49
R2 ------------------------------------------------------------------------
Hypothetical (h) 1.96% $1,000.00 $1,015.08 $9.79
- --------------------------------------------------------------------------------
Actual 1.86% $1,000.00 $1,158.10 $9.95
R3 ------------------------------------------------------------------------
Hypothetical (h) 1.86% $1,000.00 $1,015.57 $9.30
- --------------------------------------------------------------------------------
Actual 1.62% $1,000.00 $1,159.90 $8.68
R4 ------------------------------------------------------------------------
Hypothetical (h) 1.62% $1,000.00 $1,016.76 $8.10
- --------------------------------------------------------------------------------
Actual 1.31% $1,000.00 $1,161.60 $7.02
R5 ------------------------------------------------------------------------
Hypothetical (h) 1.31% $1,000.00 $1,018.30 $6.56
- --------------------------------------------------------------------------------
(h) 5% class return per year before expenses.
(p) Expenses paid is equal to each class' annualized expense ratio, as shown
above, multiplied by the average account value over the period, multiplied
by the number of days in the period, divided by the number of days in the
year. Expenses paid do not include any applicable sales charges (loads) or
redemption fees. If these transaction costs had been included, your costs
would have been higher.
PORTFOLIO OF INVESTMENTS (unaudited) - 4/30/06
The Portfolio of Investments is a complete list of all securities owned by your fund. It is
categorized by broad-based asset classes.
Common Stocks - 98.4%
- --------------------------------------------------------------------------------------------------
ISSUER SHARES/PAR VALUE ($)
- --------------------------------------------------------------------------------------------------
Advertising & Broadcasting - 3.6%
- --------------------------------------------------------------------------------------------------
CBS Corp., "B" 154,805 $ 3,942,883
Viacom, Inc., "B" (n) 155,105 6,177,832
Walt Disney Co. 466,690 13,048,652
WPP Group PLC 241,800 2,982,015
------------
$26,151,382
- --------------------------------------------------------------------------------------------------
Alcoholic Beverages - 2.5%
- --------------------------------------------------------------------------------------------------
Diageo PLC 752,287 $ 12,402,150
Pernod Ricard S.A 30,600 5,931,938
------------
$ 18,334,088
- --------------------------------------------------------------------------------------------------
Apparel Manufacturers - 2.8%
- --------------------------------------------------------------------------------------------------
LVMH Moet Hennessy Louis Vuitton S.A 111,170 $ 11,700,792
NIKE, Inc., "B" 109,600 8,969,664
------------
$ 20,670,456
- --------------------------------------------------------------------------------------------------
Automotive - 4.1%
- --------------------------------------------------------------------------------------------------
Bayerische Motoren Werke AG 88,300 $ 4,801,092
Bridgestone Corp. 297,000 7,244,539
Harley-Davidson, Inc. (l) 158,060 8,035,770
Toyota Motor Corp. 169,700 9,934,532
------------
$ 30,015,933
- --------------------------------------------------------------------------------------------------
Banks & Credit Companies - 11.4%
- --------------------------------------------------------------------------------------------------
American Express Co. 280,180 $ 15,076,486
Banco Bilbao Vizcaya Argentaria S.A 388,760 8,585,568
Bangkok Bank Public Co. Ltd. 1,185,600 3,760,299
Bank of New York Co., Inc. 220,700 7,757,605
Credit Agricole S.A. (l) 200,400 8,072,981
Erste Bank der Oesterreichischen Sparkassen AG (l) 60,320 3,659,382
Powszechna Kasa Oszczednosci Bank Polski S.A. 104,510 1,314,377
PT Bank Central Asia 5,827,000 2,901,562
Shinsei Bank Ltd. 813,000 5,695,609
Svenska Handelsbanken AB, "A" (l) 109,200 3,136,141
UBS AG (l) 121,661 14,406,450
UniCredito Italiano S.p.A 1,127,920 8,492,859
------------
$ 82,859,319
- --------------------------------------------------------------------------------------------------
Biotechnology - 1.0%
- --------------------------------------------------------------------------------------------------
Amgen, Inc. (n) 108,600 $ 7,352,220
- --------------------------------------------------------------------------------------------------
Brokerage & Asset Managers - 2.6%
- --------------------------------------------------------------------------------------------------
Goldman Sachs Group, Inc. 78,210 $ 12,536,281
Julius Baer Holding Ltd. (l) 69,314 6,638,823
------------
$ 19,175,104
- --------------------------------------------------------------------------------------------------
Business Services - 1.4%
- --------------------------------------------------------------------------------------------------
Accenture Ltd., "A" 211,930 $ 6,160,805
DST Systems, Inc. (l)(n) 71,000 4,367,920
------------
$ 10,528,725
- --------------------------------------------------------------------------------------------------
Chemicals - 1.6%
- --------------------------------------------------------------------------------------------------
3M Co. 139,370 $ 11,906,379
- --------------------------------------------------------------------------------------------------
Computer Software - 1.0%
- --------------------------------------------------------------------------------------------------
Oracle Corp. (n) 520,100 $ 7,588,259
- --------------------------------------------------------------------------------------------------
Computer Software - Systems - 0.9%
- --------------------------------------------------------------------------------------------------
Dell, Inc. (n) 235,280 $ 6,164,336
- --------------------------------------------------------------------------------------------------
Consumer Goods & Services - 8.1%
- --------------------------------------------------------------------------------------------------
Alberto-Culver Co. 118,600 $ 5,333,442
Colgate-Palmolive Co. 62,000 3,665,440
Estee Lauder Cos., Inc., "A" 212,600 7,891,712
Kao Corp. 201,000 5,406,408
L'Oreal S.A. (l) 68,170 6,319,489
Procter & Gamble Co. 118,094 6,874,252
Reckitt Benckiser PLC 639,600 23,290,890
------------
$ 58,781,633
- --------------------------------------------------------------------------------------------------
Electrical Equipment - 2.3%
- --------------------------------------------------------------------------------------------------
Legrand S.A. (n) 51,150 $ 1,496,701
Schneider Electric S.A. (l) 132,306 14,976,671
------------
$ 16,473,372
- --------------------------------------------------------------------------------------------------
Electronics - 6.9%
- --------------------------------------------------------------------------------------------------
Canon, Inc. 120,000 $ 9,187,360
Intel Corp. 559,400 11,176,812
Nintendo Co. Ltd. 43,300 6,470,356
OMRON Corp. 102,800 2,873,502
Ricoh Co. Ltd. 301,000 5,979,519
Samsung Electronics, Co. Ltd. 21,850 14,919,578
------------
$ 50,607,127
- --------------------------------------------------------------------------------------------------
Energy - Integrated - 4.9%
- --------------------------------------------------------------------------------------------------
BP PLC 590,180 $ 7,273,059
Chevron Corp. 143,500 8,756,370
Exxon Mobil Corp. 124,700 7,866,076
TOTAL S.A 42,820 11,838,277
------------
$ 35,733,782
- --------------------------------------------------------------------------------------------------
Food & Drug Stores - 1.3%
- --------------------------------------------------------------------------------------------------
Tesco PLC 1,566,580 $ 9,117,762
- --------------------------------------------------------------------------------------------------
Food & Non Alcoholic Beverages - 4.2%
- --------------------------------------------------------------------------------------------------
General Mills, Inc. (l) 69,000 $ 3,404,460
Nestle S.A 71,494 21,783,958
PepsiCo, Inc. 90,120 5,248,589
------------
$ 30,437,007
- --------------------------------------------------------------------------------------------------
Gaming & Lodging - 2.0%
- --------------------------------------------------------------------------------------------------
Ladbrokes PLC 759,360 $ 5,802,892
William Hill Organization Ltd. 750,680 8,676,635
------------
$ 14,479,527
- --------------------------------------------------------------------------------------------------
General Merchandise - 1.1%
- --------------------------------------------------------------------------------------------------
Wal-Mart Stores, Inc. 184,720 $ 8,317,942
- --------------------------------------------------------------------------------------------------
Insurance - 6.1%
- --------------------------------------------------------------------------------------------------
Assicurazioni Generali S.p.A 221,600 $ 8,303,739
AXA 357,200 13,105,587
Genworth Financial, Inc., "A" 159,860 5,307,352
Lincoln National Corp. 92,100 5,349,168
QBE Insurance Group Ltd. 313,041 5,323,402
Swiss Reinsurance Co. (l) 99,100 7,224,545
------------
$ 44,613,793
- --------------------------------------------------------------------------------------------------
Machinery & Tools - 0.8%
- --------------------------------------------------------------------------------------------------
Atlas Copco AB, "A" (l) 94,360 $ 2,786,826
Sandvik AB (l) 45,220 2,941,228
------------
$ 5,728,054
- --------------------------------------------------------------------------------------------------
Medical Equipment - 5.1%
- --------------------------------------------------------------------------------------------------
DENTSPLY International, Inc. 94,760 $ 5,654,329
Fisher Scientific International, Inc. (l)(n) 149,180 10,524,649
Medtronic, Inc. 183,280 9,185,994
Smith & Nephew PLC 484,200 4,000,064
Waters Corp. (n) 175,650 7,960,458
------------
$ 37,325,494
- --------------------------------------------------------------------------------------------------
Natural Gas - Distribution - 0.5%
- --------------------------------------------------------------------------------------------------
Tokyo Gas Co. Ltd. (l) 815,000 $ 3,947,304
- --------------------------------------------------------------------------------------------------
Network & Telecom - 0.8%
- --------------------------------------------------------------------------------------------------
Ericsson, Inc., "B" 1,661,030 $ 5,909,373
- --------------------------------------------------------------------------------------------------
Pharmaceuticals - 11.6%
- --------------------------------------------------------------------------------------------------
Eli Lilly & Co. 220,670 $ 11,677,856
GlaxoSmithKline PLC 409,800 11,615,727
Johnson & Johnson 379,280 22,229,601
Roche Holding AG 97,300 14,946,923
Sanofi-Aventis (l) 148,540 14,004,123
Schering AG (l) 93,730 10,062,631
------------
$ 84,536,861
- --------------------------------------------------------------------------------------------------
Railroad & Shipping - 0.6%
- --------------------------------------------------------------------------------------------------
Canadian National Railway Co. 88,886 $ 3,991,870
- --------------------------------------------------------------------------------------------------
Specialty Chemicals - 4.3%
- --------------------------------------------------------------------------------------------------
Asahi Glass Co. Ltd. 493,000 $ 6,968,259
Kaneka Corp. 229,000 2,584,591
L'Air Liquide S.A., Bearer Shares (l) 66,310 14,343,147
Praxair, Inc. 133,220 7,477,639
------------
$ 31,373,636
- --------------------------------------------------------------------------------------------------
Specialty Stores - 2.0%
- --------------------------------------------------------------------------------------------------
Esprit Holdings Ltd. 489,000 $ 3,916,667
Home Depot, Inc. 115,120 4,596,742
NEXT PLC 204,080 5,992,807
------------
$ 14,506,216
- --------------------------------------------------------------------------------------------------
Telecommunications - Wireless - 0.6%
- --------------------------------------------------------------------------------------------------
Hutchison Telecommunications International Ltd. (n) 2,509,000 $ 4,433,405
- --------------------------------------------------------------------------------------------------
Telephone Services - 0.7%
- --------------------------------------------------------------------------------------------------
Singapore Telecommunications Ltd. 3,012,500 $ 5,220,904
- --------------------------------------------------------------------------------------------------
Utilities - Electric Power - 1.6%
- --------------------------------------------------------------------------------------------------
E.ON AG (l) 69,300 $ 8,437,171
Iberdrola S.A 107,270 3,493,299
------------
$ 11,930,470
- --------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS (IDENTIFIED COST, $542,458,451) $718,211,733
- --------------------------------------------------------------------------------------------------
Rights - 0.0%
- --------------------------------------------------------------------------------------------------
STRIKE FIRST
PRICE EXERCISE
- --------------------------------------------------------------------------------------------------
Insurance - 0.0%
- --------------------------------------------------------------------------------------------------
Swiss Reinsurance Co. CHF 92.25 4/28/06 99,100 $0
- --------------------------------------------------------------------------------------------------
Short-Term Obligations - 1.4%
- --------------------------------------------------------------------------------------------------
ISSUER SHARES/PAR VALUE ($)
- --------------------------------------------------------------------------------------------------
General Electric Capital Corp., 4.82%, due 5/01/06,
at Amortized Cost (y) $ 10,371,000 $ 10,371,000
- --------------------------------------------------------------------------------------------------
Collateral for Securities Loaned - 11.2
- --------------------------------------------------------------------------------------------------
Morgan Stanley Repurchase Agreement, 4.895%, dated 4/28/06, due
5/01/06, total to be received $72,855,870 (secured by various
U.S. Treasury and Federal Agency obligations in an individually
traded account), at Cost $ 72,845,965 $ 72,845,965
Navigator Securities Lending Prime Portfolio, at Cost and
Net Asset Value 9,117,550 9,117,550
- --------------------------------------------------------------------------------------------------
TOTAL COLLATERAL FOR SECURITIES LOANED $ 81,963,515
- --------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (IDENTIFIED COST, $634,792,966) (k) $810,546,248
- --------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - (11.0)% (80,451,649)
- --------------------------------------------------------------------------------------------------
NET ASSETS - 100.0% $730,094,599
- --------------------------------------------------------------------------------------------------
(k) As of April 30, 2006, the fund had one security that was fair valued, aggregating $0 of market
value, in accordance with the policies adopted by the Board of Trustees.
(l) All or a portion of this security is on loan.
(n) Non-income producing security.
(y) The rate shown represents an annualized yield at time of purchase.
Abbreviations have been used throughout this report to indicate amounts shown in currencies other
than the U.S. dollar. All amounts are stated in U.S. dollars unless otherwise indicated. A list of
abbreviations is shown below:
CHF Swiss Franc
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS Statement of Assets and Liabilities (unaudited)
This statement represents your fund's balance sheet, which details the assets and liabilities
comprising the total value of the fund.
AT 4/30/06
ASSETS
- -------------------------------------------------------------------------------------------------------
Investments, at value, including $78,706,800 of securities on
loan (identified cost, $561,947,001) $737,700,283
Repurchase agreements, at value 72,845,965
- -------------------------------------------------------------------------------------------------------
Total investments, at value (identified cost, $634,792,966) $810,546,248
- -------------------------------------------------------------------------------------------------------
Foreign currency, at value (identified cost, $27,675) 27,854
Receivable for investments sold 3,399,109
Receivable for fund shares sold 747,924
Interest and dividends receivable 1,425,521
Other assets 273
- -------------------------------------------------------------------------------------------------------
Total assets $816,146,929
- -------------------------------------------------------------------------------------------------------
LIABILITIES
- -------------------------------------------------------------------------------------------------------
Payable to custodian $25,874
Payable for investments purchased 1,176,152
Payable for fund shares reacquired 2,361,653
Collateral for securities loaned, at value 81,963,515
Payable to affiliates
Management fee 53,153
Shareholder servicing costs 126,765
Distribution and service fees 27,660
Administrative services fee 1,233
Retirement plan administration and services fees 163
Payable for independent trustees' compensation 57,863
Accrued expenses and other liabilities 258,299
- -------------------------------------------------------------------------------------------------------
Total liabilities $86,052,330
- -------------------------------------------------------------------------------------------------------
Net assets $730,094,599
- -------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- -------------------------------------------------------------------------------------------------------
Paid-in capital $483,592,809
Unrealized appreciation (depreciation) on investments and
translation of assets and liabilities in foreign currencies
(net of $1,722 deferred country tax) 175,781,916
Accumulated net realized gain (loss) on investments and foreign
currency transactions 61,768,396
Undistributed net investment income 8,951,478
- -------------------------------------------------------------------------------------------------------
Net assets $730,094,599
- -------------------------------------------------------------------------------------------------------
Shares of beneficial interest outstanding 25,893,606
- -------------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities (unaudited) - continued
Class A shares
- -------------------------------------------------------------------------------------------------------
Net assets $445,252,349
Shares outstanding 15,544,589
- -------------------------------------------------------------------------------------------------------
Net asset value per share $28.64
- -------------------------------------------------------------------------------------------------------
Offering price per share (100/94.25Xnet asset value per
share) $30.39
- -------------------------------------------------------------------------------------------------------
Class B shares
- -------------------------------------------------------------------------------------------------------
Net assets $151,838,139
Shares outstanding 5,582,390
- -------------------------------------------------------------------------------------------------------
Net asset value and offering price per share $27.20
- -------------------------------------------------------------------------------------------------------
Class C shares
- -------------------------------------------------------------------------------------------------------
Net assets $37,518,610
Shares outstanding 1,405,815
- -------------------------------------------------------------------------------------------------------
Net asset value and offering price per share $26.69
- -------------------------------------------------------------------------------------------------------
Class I shares
- -------------------------------------------------------------------------------------------------------
Net assets $53,843,421
Shares outstanding 1,850,294
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share $29.10
- -------------------------------------------------------------------------------------------------------
Class J shares
- -------------------------------------------------------------------------------------------------------
Net assets $20,627,392
Shares outstanding 767,142
- -------------------------------------------------------------------------------------------------------
Net asset value and redemption price per share $26.89
- -------------------------------------------------------------------------------------------------------
Offering price per share (100/97.00Xnet asset value per
share) $27.72
- -------------------------------------------------------------------------------------------------------
Class R shares
- -------------------------------------------------------------------------------------------------------
Net assets $13,570,211
Shares outstanding 478,264
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share $28.37
- -------------------------------------------------------------------------------------------------------
Class R1 shares
- -------------------------------------------------------------------------------------------------------
Net assets $893,878
Shares outstanding 32,919
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share $27.15
- -------------------------------------------------------------------------------------------------------
Class R2 shares
- -------------------------------------------------------------------------------------------------------
Net assets $419,187
Shares outstanding 15,381
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share $27.25
- -------------------------------------------------------------------------------------------------------
Class R3 shares
- -------------------------------------------------------------------------------------------------------
Net assets $5,195,723
Shares outstanding 184,098
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share $28.22
- -------------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities (unaudited) - continued
Class R4 shares
- -------------------------------------------------------------------------------------------------------
Net assets $875,490
Shares outstanding 30,616
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share $28.60
- -------------------------------------------------------------------------------------------------------
Class R5 shares
- -------------------------------------------------------------------------------------------------------
Net assets $60,199
Shares outstanding 2,098
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share $28.69
- -------------------------------------------------------------------------------------------------------
On sales of $50,000 or more, the offering price of Class A shares is reduced. A contingent deferred
sales charge may be imposed on redemptions of Class A, Class B and Class C shares.
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS Statement of Operations (unaudited)
This statement describes how much your fund earned in investment income and accrued in expenses. It
also describes any gains and/or losses generated by fund operations.
SIX MONTHS ENDED 4/30/06
NET INVESTMENT INCOME
- ------------------------------------------------------------------------------------------------------
Income
Dividends $14,878,002
Interest 306,566
Foreign taxes withheld (393,687)
- ------------------------------------------------------------------------------------------------------
Total investment income $14,790,881
- ------------------------------------------------------------------------------------------------------
Expenses
Management fee $3,123,708
Distribution and service fees 1,601,112
Shareholder servicing costs 689,569
Administrative services fee 41,800
Retirement plan administration and services fees 7,369
Independent trustees' compensation 13,573
Custodian fee 141,666
Shareholder communications 21,229
Auditing fees 24,996
Legal fees 6,985
Registration fees 112,416
Miscellaneous 19,550
- ------------------------------------------------------------------------------------------------------
Total expenses $5,803,973
- ------------------------------------------------------------------------------------------------------
Fees paid indirectly (27,373)
Reduction of expenses by investment adviser (4,894)
- ------------------------------------------------------------------------------------------------------
Net expenses $5,771,706
- ------------------------------------------------------------------------------------------------------
Net investment income $9,019,175
- ------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
- ------------------------------------------------------------------------------------------------------
Realized gain (loss) (identified cost basis)
Investment transactions (net of $931 country tax) $61,787,533
Foreign currency transactions 28,995
- ------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments and foreign
currency transactions $61,816,528
- ------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation)
Investments (net of $1,722 deferred country tax) $32,237,783
Translation of assets and liabilities in foreign currencies 47,512
- ------------------------------------------------------------------------------------------------------
Net unrealized gain (loss) on investments and foreign
currency translation $32,285,295
- ------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and
foreign currency $94,101,823
- ------------------------------------------------------------------------------------------------------
Change in net assets from operations $103,120,998
- ------------------------------------------------------------------------------------------------------
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.
SIX MONTHS ENDED YEAR ENDED
4/30/06 10/31/05
(UNAUDITED)
CHANGE IN NET ASSETS
- ------------------------------------------------------------------------------------------------------
FROM OPERATIONS
- ------------------------------------------------------------------------------------------------------
Net investment income (loss) $9,019,175 $(105,392)
Net realized gain (loss) on investments and foreign
currency transactions 61,816,528 79,054,536
Net unrealized gain (loss) on investments and foreign
currency translation 32,285,295 (1,606,833)
- ------------------------------------------------------------------------------------------------------
Change in net assets from operations $103,120,998 $77,342,311
- ------------------------------------------------------------------------------------------------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ------------------------------------------------------------------------------------------------------
From net investment income
Class I $-- $(82,625)
Class R -- (1,632)
- ------------------------------------------------------------------------------------------------------
From net realized gain on investments and
foreign currency transactions
Class A (18,099,702) --
Class B (6,962,364) --
Class C (1,607,519) --
Class I (1,898,929) --
Class J (882,139) --
Class R (585,544) --
Class R1 (31,501) --
Class R2 (8,875) --
Class R3 (159,137) --
Class R4 (4,035) --
Class R5 (2,344) --
- ------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(30,242,089) $(84,257)
- ------------------------------------------------------------------------------------------------------
Change in net assets from fund share transactions $(5,694,111) $(53,926,243)
- ------------------------------------------------------------------------------------------------------
Redemption fees $-- $3,282
- ------------------------------------------------------------------------------------------------------
Total change in net assets $67,184,798 $23,335,093
- ------------------------------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------------------------------
At beginning of period 662,909,801 639,574,708
At end of period (including undistributed net investment
income of $8,951,478 and accumulated distributions in excess
of net investment income of $67,697) $730,094,599 $662,909,801
- ------------------------------------------------------------------------------------------------------
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 semiannual period and
the past 5 fiscal 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.
SIX MONTHS YEARS ENDED 10/31
ENDED ----------------------------------------------------------------------
CLASS A 4/30/06 2005 2004 2003 2002 2001
(UNAUDITED)
Net asset value, beginning
of period $25.79 $22.92 $19.57 $16.55 $17.58 $22.88
- -------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM
INVESTMENT OPERATIONS
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income
(loss) (d) $0.38 $0.06 $0.07 $0.03 $(0.00)(w) $(0.01)
Net realized and
unrealized gain (loss)
on investments and
foreign currency 3.64 2.81 3.28 2.99 (1.03) (3.81)
- -------------------------------------------------------------------------------------------------------------------------------
Total from investment
operations $4.02 $2.87 $3.35 $3.02 $(1.03) $(3.82)
- -------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments and
foreign currency
transactions $(1.17) $-- $-- $-- $-- $(1.48)
From paid-in capital -- -- -- -- -- (0.00)(w)
- -------------------------------------------------------------------------------------------------------------------------------
Total distributions
declared to shareholders $(1.17) $-- $-- $-- $-- $(1.48)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of
period $28.64 $25.79 $22.92 $19.57 $16.55 $17.58
- -------------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s)(t) 16.05(n) 12.52 17.12(b) 18.25 (5.86) (17.67)
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -------------------------------------------------------------------------------------------------------------------------------
Expenses before expense
reductions (f) 1.46(a) 1.55 1.52 1.65 1.62 1.59
Expenses after expense
reductions (f) 1.46(a) 1.55 1.52 1.65 1.62 1.59
Net investment income
(loss) 2.81(a) 0.22 0.30 0.19 (0.02) (0.06)
Portfolio turnover 23 39 41 52 52 72
Net assets at end of
period (000 Omitted) $445,252 $402,985 $368,514 $345,783 $322,006 $348,129
- -------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED ----------------------------------------------------------------------
CLASS B 4/30/06 2005 2004 2003 2002 2001
(UNAUDITED)
Net asset value, beginning
of period $24.64 $22.06 $18.97 $16.18 $17.31 $22.52
- -------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM
INVESTMENT OPERATIONS
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income
(loss) (d) $0.25 $(0.13) $(0.10) $(0.09) $(0.14) $(0.16)
Net realized and
unrealized gain (loss) on
investments and foreign
currency 3.48 2.71 3.19 2.88 (0.99) (3.75)
- -------------------------------------------------------------------------------------------------------------------------------
Total from investment
operations $3.73 $2.58 $3.09 $2.79 $(1.13) $(3.91)
- -------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------------------------------
From net realized gain on
investments and foreign
currency transactions $(1.17) $-- $-- $-- $-- $(1.30)
From paid-in capital -- -- -- -- -- (0.00)(w)
- -------------------------------------------------------------------------------------------------------------------------------
Total distributions
declared to shareholders $(1.17) $-- $-- $-- $-- $(1.30)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of
period $27.20 $24.64 $22.06 $18.97 $16.18 $17.31
- -------------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s)(t) 15.61(n) 11.70 16.29(b) 17.24 (6.53) (18.28)
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -------------------------------------------------------------------------------------------------------------------------------
Expenses before expense
reductions (f) 2.21(a) 2.30 2.27 2.40 2.37 2.34
Expenses after expense
reductions (f) 2.21(a) 2.30 2.27 2.40 2.37 2.34
Net investment income
(loss) 1.98(a) (0.53) (0.45) (0.56) (0.79) (0.81)
Portfolio turnover 23 39 41 52 52 72
Net assets at end of period
(000 Omitted) $151,838 $148,434 $170,783 $177,713 $172,094 $220,855
- -------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED ----------------------------------------------------------------------
CLASS C 4/30/06 2005 2004 2003 2002 2001
(UNAUDITED)
Net asset value, beginning
of period $24.19 $21.66 $18.63 $15.89 $17.00 $22.16
- -------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM
INVESTMENT OPERATIONS
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income
(loss) (d) $0.26 $(0.12) $(0.09) $(0.09) $(0.14) $(0.16)
Net realized and
unrealized gain (loss) on
investments and foreign
currency 3.41 2.65 3.12 2.83 (0.97) (3.68)
- -------------------------------------------------------------------------------------------------------------------------------
Total from investment
operations $3.67 $2.53 $3.03 $2.74 $(1.11) $(3.84)
- -------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------------------------------
From net realized gain on
investments and foreign
currency transactions $(1.17) $-- $-- $-- $-- $(1.32)
From paid-in capital -- -- -- -- -- (0.00)(w)
- -------------------------------------------------------------------------------------------------------------------------------
Total distributions
declared to shareholders $(1.17) $-- $-- $-- $-- $(1.32)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of
period $26.69 $24.19 $21.66 $18.63 $15.89 $17.00
- -------------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s)(t) 15.65(n) 11.68 16.26(b) 17.24 (6.53) (18.30)
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -------------------------------------------------------------------------------------------------------------------------------
Expenses before expense
reductions (f) 2.21(a) 2.30 2.27 2.40 2.37 2.34
Expenses after expense
reductions (f) 2.21(a) 2.30 2.27 2.40 2.37 2.34
Net investment income
(loss) 2.10(a) (0.53) (0.45) (0.56) (0.78) (0.82)
Portfolio turnover 23 39 41 52 52 72
Net assets at end of period
(000 Omitted) $37,519 $33,975 $32,785 $33,253 $31,594 $40,789
- -------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED ----------------------------------------------------------------------
CLASS I 4/30/06 2005 2004 2003 2002 2001
(UNAUDITED)
Net asset value, beginning of
period $26.15 $23.23 $19.78 $16.70 $17.69 $23.04
- -------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM
INVESTMENT OPERATIONS
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.44 $0.12 $0.12 $0.09 $0.04 $0.02
Net realized and unrealized
gain (loss) on investments and
foreign currency 3.68 2.85 3.33 2.99 (1.03) (3.83)
- -------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $4.12 $2.97 $3.45 $3.08 $(0.99) $(3.81)
- -------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------------------------------
From net investment income $-- $(0.05) $-- $-- $-- $--
From net realized gain on
investments and foreign
currency transactions (1.17) -- -- -- -- (1.54)
From paid-in capital -- -- -- -- -- (0.00)(w)
- -------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to
shareholders $(1.17) $(0.05) $-- $-- $-- $(1.54)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $29.10 $26.15 $23.23 $19.78 $16.70 $17.69
- -------------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 16.22(n) 12.79 17.44(b) 18.44 (5.60) (17.54)
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -------------------------------------------------------------------------------------------------------------------------------
Expenses before expense
reductions (f) 1.21(a) 1.30 1.26 1.40 1.37 1.34
Expenses after expense
reductions (f) 1.21(a) 1.30 1.26 1.40 1.37 1.34
Net investment income 3.26(a) 0.47 0.53 0.54 0.23 0.10
Portfolio turnover 23 39 41 52 52 72
Net assets at end of period (000
Omitted) $53,843 $41,493 $37,781 $22,467 $2,325 $2,274
- -------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED ----------------------------------------------------------------------
CLASS J 4/30/06 2005 2004 2003 2002 2001
(UNAUDITED)
Net asset value,
beginning of period $24.36 $21.80 $18.74 $15.97 $17.08 $22.36
- -------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM
INVESTMENT OPERATIONS
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (d) $0.26 $(0.11) $(0.08) $(0.09) $(0.13) $(0.15)
Net realized and unrealized
gain (loss) on investments and
foreign currency 3.44 2.67 3.14 2.86 (0.98) (3.71)
- -------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $3.70 $2.56 $3.06 $2.77 $(1.11) $(3.86)
- -------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------------------------------
From net realized gain on
investments and foreign
currency transactions $(1.17) $-- $-- $-- $-- $(1.42)
From paid-in capital -- -- -- -- -- (0.00)(w)
- -------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to
shareholders $(1.17) $-- $-- $-- $-- $(1.42)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $26.89 $24.36 $21.80 $18.74 $15.97 $17.08
- -------------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s)(t) 15.67(n) 11.74 16.33(b) 17.35 (6.50) (18.29)
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -------------------------------------------------------------------------------------------------------------------------------
Expenses before expense
reductions (f) 2.16(a) 2.25 2.22 2.34 2.32 2.29
Expenses after expense
reductions (f) 2.16(a) 2.25 2.22 2.34 2.32 2.29
Net investment income (loss) 2.07(a) (0.47) (0.39) (0.53) (0.73) (0.78)
Portfolio turnover 23 39 41 52 52 72
Net assets at end of period (000
Omitted) $20,627 $19,136 $23,188 $24,701 $17,215 $15,446
- -------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED --------------------------------------
CLASS R 4/30/06 2005 2004 2003(i)
(UNAUDITED)
Net asset value, beginning of period $25.59 $22.80 $19.51 $16.57
- ----------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (d) $0.33 $(0.01) $0.01 $(0.05)
Net realized and unrealized gain (loss) on
investments and foreign currency 3.62 2.81 3.28 2.99
- ----------------------------------------------------------------------------------------------------------------------
Total from investment operations $3.95 $2.80 $3.29 $2.94
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------------------------
From net investment income $-- $(0.01) $-- $--
From net realized gain on investments and foreign
currency transactions (1.17) -- -- --
- ----------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(1.17) $(0.01) $-- $--
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $28.37 $25.59 $22.80 $19.51
- ----------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 15.90(n) 12.26 16.86(b) 17.74(n)
- ----------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.71(a) 1.81 1.76 1.83(a)
Expenses after expense reductions (f) 1.71(a) 1.81 1.76 1.83(a)
Net investment income (loss) 2.48(a) (0.03) 0.06 (0.29)(a)
Portfolio turnover 23 39 41 52
Net assets at end of period (000 Omitted) $13,570 $12,862 $5,994 $1,265
- ----------------------------------------------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED
CLASS R1 ENDED 4/30/06 10/31/05(i)
(UNAUDITED)
Net asset value, beginning of period $24.61 $23.89
- ----------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (d) $0.28 $(0.15)
Net realized and unrealized gain (loss) on investments
and foreign currency 3.43 0.87(g)
- ----------------------------------------------------------------------------------------------------------------------
Total from investment operations $3.71 $0.72
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------------------------
From net realized gain on investments and foreign currency
transactions $(1.17) $--
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $27.15 $24.61
- ----------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 15.55(n) 3.01(n)
- ----------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 2.41(a) 2.50(a)
Expenses after expense reductions (f) 2.31(a) 2.47(a)
Net investment income (loss) 2.22(a) (1.06)(a)
Portfolio turnover 23 39
Net assets at end of period (000 Omitted) $894 $672
- ----------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEAR ENDED
CLASS R2 ENDED 4/30/06 10/31/05(i)
(UNAUDITED)
Net asset value, beginning of period $24.65 $23.89
- ----------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (d) $0.42 $(0.07)
Net realized and unrealized gain (loss) on investments
and foreign currency 3.35 0.83(g)
- ----------------------------------------------------------------------------------------------------------------------
Total from investment operations $3.77 $0.76
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------------------------
From net realized gain on investments and foreign currency
transactions $(1.17) $--
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $27.25 $24.65
- ----------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 15.77(n) 3.18(n)
- ----------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 2.11(a) 2.21(a)
Expenses after expense reductions (f) 1.96(a) 2.17(a)
Net investment income (loss) 3.27(a) (0.56)(a)
Portfolio turnover 23 39
Net assets at end of period (000 Omitted) $419 $185
- ----------------------------------------------------------------------------------------------------------------------
YEARS ENDED 10/31
SIX MONTHS ------------------------------
CLASS R3 ENDED 4/30/06 2005 2004
(UNAUDITED)
Net asset value, beginning of period $25.48 $22.76 $19.51
- ----------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (d) $0.42 $(0.06) $(0.03)
Net realized and unrealized gain (loss) on investments and
foreign currency 3.49 2.78 3.28
- ----------------------------------------------------------------------------------------------------------------------------
Total from investment operations $3.91 $2.72 $3.25
- ----------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments and foreign currency
transactions $(1.17) $-- $--
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $28.22 $25.48 $22.76
- ----------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 15.81(n) 11.95 16.66(b)
- ----------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.96(a) 2.06 2.00
Expenses after expense reductions (f) 1.86(a) 2.05 2.00
Net investment income (loss) 3.18(a) (0.25) (0.15)
Portfolio turnover 23 39 41
Net assets at end of period (000 Omitted) $5,196 $3,032 $530
- ----------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEAR ENDED
CLASS R4 ENDED 4/30/06 10/31/05(i)
(UNAUDITED)
Net asset value, beginning of period $25.77 $24.90
- ----------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.97 $0.02
Net realized and unrealized gain (loss) on investments
and foreign currency 3.03 0.85(g)
- ----------------------------------------------------------------------------------------------------------------------
Total from investment operations $4.00 $0.87
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------------------------
From net realized gain on investments and foreign currency
transactions $(1.17) $--
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $28.60 $25.77
- ----------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 15.99(n) 3.49(n)
- ----------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.62(a) 1.73(a)
Expenses after expense reductions (f) 1.62(a) 1.73(a)
Net investment income 7.58(a) 0.13(a)
Portfolio turnover 23 39
Net assets at end of period (000 Omitted) $875 $84
- ----------------------------------------------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED
CLASS R5 ENDED 4/30/06 10/31/05(i)
(UNAUDITED)
Net asset value, beginning of period $25.81 $24.90
- ----------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.41 $0.08
Net realized and unrealized gain (loss) on investments
and foreign currency 3.64 0.83(g)
- ----------------------------------------------------------------------------------------------------------------------
Total from investment operations $4.05 $0.91
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------------------------
From net realized gain on investments and foreign currency
transactions $(1.17) $--
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $28.69 $25.81
- ----------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 16.16(n) 3.65(n)
- ----------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.31(a) 1.44(a)
Expenses after expense reductions (f) 1.31(a) 1.44(a)
Net investment income 3.04(a) 0.54(a)
Portfolio turnover 23 39
Net assets at end of period (000 Omitted) $60 $52
- ----------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
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.
(a) Annualized.
(b) 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 did not have a material impact on the
net asset value per share based on the shares outstanding on the day the
proceeds were recorded.
(d) Per share data are based on average shares outstanding.
(f) Ratios do not reflect reductions from fees paid indirectly.
(g) The per share amount is not in accordance with the net realized and
unrealized gain/loss for the period because of the timing of sales of fund
shares and the amount of per share realized and unrealized gains and losses
at such time.
(i) For the period from the class' inception, December 31, 2002 (Class R) and
April 1, 2005 (Classes R1, R2, R4, and R5) through the stated period end.
(n) Not annualized.
(r) Certain expenses have been reduced without which performance would have been
lower.
(s) From time to time the fund may receive proceeds from litigation settlements,
without which performance would be lower.
(t) Total returns do not include any applicable sales charges.
(w) Per share amount was less than $0.01.
SEE NOTES TO FINANCIAL STATEMENTS
NOTES TO FINANCIAL STATEMENTS (unaudited)
(1) BUSINESS AND ORGANIZATION
MFS Global Equity Fund (the fund) is a series of MFS Series Trust VI (the
trust). The trust is organized as a Massachusetts business trust and is
registered under the Investment Company Act of 1940, as amended, as an open-
end management investment company.
(2) SIGNIFICANT ACCOUNTING POLICIES
GENERAL - The preparation of financial statements in conformity with U.S.
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities,
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates. The
fund can invest in foreign securities, including securities of emerging market
issuers. Investments in foreign securities are vulnerable to the effects of
changes in the relative values of the local currency and the U.S. dollar and
to the effects of changes in each country's legal, political, and economic
environment. The markets of emerging markets countries are generally more
volatile than the markets of developed countries with more mature economies.
All of the risks of investing in foreign securities previously described are
heightened when investing in emerging markets countries.
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
reported that day, equity securities are generally valued at the last quoted
daily bid quotation 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 397 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 at a broker-dealer quotation. The values of
foreign securities and other assets and liabilities expressed in foreign
currencies are converted to U.S. dollars using the mean of bid and asked
prices for rates reported by an independent pricing service. The Board of
Trustees has delegated primary responsibility for determining or causing to be
determined the value of the fund's investments (including any fair valuation)
to the adviser pursuant to valuation policies and procedures approved by the
Board. If the adviser determines that reliable market quotations are not
readily available, investments are valued at fair value as determined in good
faith by the adviser in accordance with such procedures under the oversight of
the Board of Trustees. Under the fund's valuation policies and procedures,
market quotations are not considered to be readily available for many types of
debt instruments. These investments are generally valued at fair value based
on information from independent pricing services. These valuations can be
based on both dealer-supplied valuations and electronic data processing
techniques, which take into account factors such as institutional-size trading
in similar groups of securities, yield, quality, coupon rate, maturity, type
of issue, trading characteristics and other market data. The adviser may rely
on independent pricing services or other information (such as the correlation
with price movements of similar securities in the same or other markets; the
type, cost and investment characteristics of the security; the business and
financial condition of the issuer; and trading and other market data) to
assist in determining whether to fair value and at what value to fair value an
investment. The value of an investment for purposes of calculating the fund's
net asset value can differ depending on the source and method used to
determine value. When fair valuation is used, the value of investments used to
determine the fund's net asset value may differ from quoted or published
prices for the same investments. In addition, investments may be valued at
fair value if the adviser determines that an investment's value has been
materially affected by events occurring after the close of the exchange or
market on which the investment is principally traded (such as foreign exchange
or market) and prior to the determination of the fund's net asset value, or
after the halting of trading of a specific security where trading does not
resume prior to the close of the exchange or market on which the security is
principally traded. Events that occur on a frequent basis after foreign
markets close (such as developments in foreign markets and significant
movements in the U.S. markets) and prior to the determination of the fund's
net asset value may be deemed to have a material affect on the value of
securities traded in foreign markets. Accordingly, the fund's foreign equity
securities may often be valued at fair value.
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 on proceeds from Class A, Class
B, Class C, and Class I shares redeemed or exchanged within 5 business days
following their acquisition. Due to systems limitations associated with the
transition from applying a 30 calendar day redemption fee to a 5 business day
redemption fee, the fund did not impose redemption fees with respect to
purchases made in June 2004 followed by redemptions made in
July 2004. 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.
Certain dividends from foreign securities will be recorded when the fund is
informed of the dividend if such information is obtained subsequent to the ex-
dividend date. Dividend 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 six months ended April 30, 2006, the fund's custodian
fees were reduced by $25,903 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 six months ended April 30, 2006, the fund's custodian expenses
were reduced by $1,470 under this agreement. These amounts are shown as a
reduction of total expenses on the Statement of Operations. Effective January
1, 2006, the commission recapture agreement was terminated.
TAX MATTERS AND DISTRIBUTIONS - The fund intends to continue to qualify as a
regulated investment company, as defined under Subchapter M of the Internal
Revenue Code, and to distribute all of its taxable income, including realized
capital gains. Accordingly, no provision for federal income tax is required in
the financial statements. Foreign taxes, if any, have been accrued by the fund
in the accompanying financial statements.
Distributions to shareholders are recorded on the ex-dividend date. Income and
capital gain distributions are determined in accordance with income tax
regulations, which may differ from generally accepted accounting principles.
Certain capital accounts in the financial statements are periodically adjusted
for permanent differences in order to reflect their tax character. These
adjustments have no impact on net assets or net asset value per share.
Temporary differences which arise from recognizing certain items of income,
expense, gain or loss in different periods for financial statement and tax
purposes will reverse at some time in the future. Distributions in excess of
net investment income or net realized gains are temporary overdistributions
for financial statement purposes resulting from differences in the recognition
or classification of income or distributions for financial statement and
tax purposes.
Book/tax differences primarily relate to net operating losses, wash sale loss
deferrals, foreign currency transactions, treating a portion of the proceeds
from redemptions as a distribution for tax purposes, and foreign taxes.
The tax character of distributions made during the current period will be
determined at fiscal year end. The tax character of distributions declared to
shareholders is as follows:
OCTOBER 31, 2005
Ordinary income (including any
short-term capital gains) $84,257
------------------------------------------------------------
The fund declared no distributions for the year ended October 31, 2004.
The federal tax cost and the tax basis components of distributable earnings
were as follows:
AS OF APRIL 30, 2006
Cost of investments $634,837,054
---------------------------------------------------------------
Gross appreciation 194,033,577
Gross depreciation (18,324,383)
---------------------------------------------------------------
Net unrealized appreciation (depreciation) $175,709,194
AS OF OCTOBER 31, 2005
Undistributed long-term capital gain $30,238,045
Other temporary differences (84,853)
Net unrealized appreciation (depreciation) 143,469,689
The aggregate cost above includes prior fiscal year end tax adjustments.
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 shares
will convert to Class A shares 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 the following annual
rates:
First $1 billion of average daily net assets 0.90%
Next $1 billion of average daily net assets 0.75%
Average daily net assets in excess of $2 billion 0.65%
The management fee incurred for the six months ended April 30, 2006 was
equivalent to an annual effective rate of 0.90% of the fund's average daily
net assets.
DISTRIBUTOR - MFS Fund Distributors, Inc. (MFD), a wholly owned
subsidiary of MFS, as distributor, received $23,502 for the six months ended
April 30, 2006, as its portion of the initial sales charge on sales of Class A
shares of the fund.
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% 0.25% $528,916
Class B 0.75% 0.25% 1.00% 1.00% 756,973
Class C 0.75% 0.25% 1.00% 1.00% 176,417
Class J(3) 0.70% 0.25% 0.95% 0.95% 91,734
Class R 0.25% 0.25% 0.50% 0.50% 33,490
Class R1 0.50% 0.25% 0.75% 0.75% 2,921
Class R2 0.25% 0.25% 0.50% 0.50% 753
Class R3 0.25% 0.25% 0.50% 0.50% 9,593
Class R4 -- 0.25% 0.25% 0.25% 315
- -------------------------------------------------------------------------------
Total Distribution and Service Fees $1,601,112
(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 six months ended April 30, 2006 based on each
class' average daily net assets. Payment of the 0.10% annual Class A
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 and Class C shares are subject to a contingent deferred sales
charge in the event of a shareholder redemption within 12 months of purchase.
Class B 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 six months ended April
30, 2006, were as follows:
AMOUNT
Class A $18,349
Class B $60,670
Class C $809
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 six months ended April 30, 2006, the fee was $331,777 which equated to
0.0956% 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 six months ended April 30, 2006, these
costs amounted to $186,521.
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. From July 1, 2005 through March 31, 2006, the fund's annual fixed
amount was $10,000. Effective April 1, 2006, the fund's annual fixed amount is
$17,500. The administrative services fee incurred for the six months ended
April 30, 2006 was equivalent to an annual effective rate of 0.0120% 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 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. MFS may subsequently
pay all, or a portion, of the retirement plan administration and services fee
to affiliated or unaffiliated third parties. For the six months ended April
30, 2006, 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
EFFECTIVE TOTAL
FEE RATE RATE(1) AMOUNT
Class R1 0.45% 0.35% $1,753
Class R2 0.40% 0.25% 602
Class R3 0.25% 0.15% 4,797
Class R4 0.15% 0.15% 189
Class R5 0.10% 0.10% 28
- -------------------------------------------------------------------------------
Total Retirement Plan Administration and Services Fees $7,369
(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.
This agreement will continue until at least September 30, 2007. For the
six months ended April 30, 2006, this waiver amounted to $2,534 and is
reflected as a reduction of total expenses in the Statement of Operations.
TRUSTEES' AND OFFICERS' COMPENSATION - The fund pays compensation to
Independent Trustees in the form of a retainer, attendance fees, and
additional compensation to Board and Committee chairpersons. The fund does not
pay compensation directly to Trustees or officers of the fund who are also
officers of the investment adviser, all of whom receive remuneration for their
services to the fund from MFS. Certain officers and Trustees of the fund are
officers or directors of MFS, MFD, and MFSC. The fund has an unfunded, defined
benefit plan for retired Independent Trustees which resulted in a pension
expense of $3,174. The fund also has an unfunded retirement benefit deferral
plan for certain current Independent Trustees which resulted in an expense of
$1,418. Both amounts are included in Independent trustees' compensation for
the six months ended April 30, 2006. The deferred liability for retirement
benefits payable to retired Trustees and certain current Trustees amounted to
$29,827 and $25,903, respectively, at April 30, 2006, and is included in
payable for independent 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. The funds can
terminate the Agreement with Tarantino LLC at any time under the terms of the
Agreement. For the six months ended April 30, 2006, the fee paid to Tarantino
LLC was $2,855. MFS has agreed to reimburse the fund for a portion of the
payments made by the funds to Tarantino LLC in the amount of $2,360, 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.
(4) PORTFOLIO SECURITIES
Purchases and sales of investments, other than U.S. government securities,
purchased option transactions, and short-term obligations, aggregated
$158,129,692 and $192,849,531, respectively.
(5) SHARES OF BENEFICIAL INTEREST
The fund's Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest. Transactions in
fund shares were as follows:
SIX MONTHS ENDED 4/30/06 YEAR ENDED 10/31/05(i)
SHARES AMOUNT SHARES AMOUNT
Shares sold
Class A 1,908,011 $51,638,331 4,169,984 $104,075,188
Class B 594,185 15,263,475 1,261,711 30,176,056
Class C 132,232 3,348,245 291,873 6,844,927
Class I 357,505 9,915,250 610,393 15,444,916
Class J 172,737 4,399,078 214,359 5,101,163
Class R 59,274 1,593,210 418,220 10,252,746
Class R1 9,193 232,726 28,959 704,849
Class R2 7,742 198,165 8,005 193,992
Class R3 99,396 2,674,516 126,604 3,177,335
Class R4 37,328 1,031,961 3,277 83,356
Class R5 -- -- 2,008 50,000
- ----------------------------------------------------------------------------------------------------
3,377,603 $90,294,957 7,135,393 $176,104,528
Shares issued to shareholders
in reinvestment of distributions
Class A 664,995 $17,230,036 -- $--
Class B 259,672 6,406,116 -- --
Class C 59,990 1,452,354 -- --
Class I 72,189 1,898,580 3,322 82,567
Class J 103 2,514 -- --
Class R 22,642 581,662 67 1,642
Class R1 1,279 31,501 -- --
Class R2 359 8,875 -- --
Class R3 6,224 159,128 -- --
Class R4 156 4,035 -- --
Class R5 90 2,344 -- --
- ----------------------------------------------------------------------------------------------------
1,087,699 $27,777,145 3,389 $84,209
Shares reacquired
Class A (2,652,682) $(71,760,783) (4,622,434) $(115,713,383)
Class B (1,296,553) (33,436,464) (2,978,747) (71,428,594)
Class C (190,763) (4,804,507) (400,975) (9,447,612)
Class I (165,894) (4,570,181) (653,604) (16,583,343)
Class J (191,208) (4,850,848) (492,373) (11,644,337)
Class R (106,264) (2,869,775) (178,523) (4,464,506)
Class R1 (4,865) (124,563) (1,647) (40,727)
Class R2 (236) (6,257) (489) (12,251)
Class R3 (40,515) (1,064,526) (30,917) (780,227)
Class R4 (10,145) (278,309) -- --
- ----------------------------------------------------------------------------------------------------
(4,659,125) $(123,766,213) (9,359,709) $(230,114,980)
Net change
Class A (79,676) $(2,892,416) (452,450) $(11,638,195)
Class B (442,696) (11,766,873) (1,717,036) (41,252,538)
Class C 1,459 (3,908) (109,102) (2,602,685)
Class I 263,800 7,243,649 (39,889) (1,055,860)
Class J (18,368) (449,256) (278,014) (6,543,174)
Class R (24,348) (694,903) 239,764 5,789,882
Class R1 5,607 139,664 27,312 664,122
Class R2 7,865 200,783 7,516 181,741
Class R3 65,105 1,769,118 95,687 2,397,108
Class R4 27,339 757,687 3,277 83,356
Class R5 90 2,344 2,008 50,000
- ----------------------------------------------------------------------------------------------------
(193,823) $(5,694,111) (2,220,927) $(53,926,243)
(i) For the period from the class' inception, April 1, 2005 (Classes R1, R2,
R4, and R5) through the stated period end.
(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 six months ended April 30, 2006 was $2,361, and
is included in miscellaneous expense on the Statement of Operations. The fund
had no significant borrowings during the six months ended April 30, 2006.
BOARD REVIEW OF INVESTMENT ADVISORY AGREEMENT
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 trust will file a complete schedule of portfolio holdings with the
Securities and Exchange Commission (the Commission) for the first and third
quarters of each fiscal year on Form N-Q. The trust's Form N-Q may be reviewed
and copied at the:
Public Reference Room
Securities and Exchange Commission
100 F Street, NE, Room 1580
Washington, D.C. 20549
Information on the operation of the Public Reference Room may be obtained by
calling the Commission at 1-202-551-5850. The trust'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.
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
- -------------------------------------------------------------------------------
Shares 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)
MFS Investment Management(R)
MFS(R) investment products are offered through MFS Fund Distributors, Inc.,
500 Boylston Street, Boston, MA 02116.
LGE-SEM-6/06 31M
ITEM 2. CODE OF ETHICS.
The Registrant has not amended any provision in its Code of Ethics (the "Code")
that relates to any element of the Code's definition enumerated in paragraph (b)
of Item 2 of this Form N-CSR.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable for semi-annual reports.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable for semi-annual reports.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to the Registrant.
ITEM 6. SCHEDULE OF INVESTMENTS
A schedule of investments for each series of the Registrant is included as part
of the report to shareholders of such series under Item 1 of this Form N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the Registrant.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the Registrant.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable to the Registrant.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There were no material changes to the procedures by which shareholders may send
recommendations to the Board for nominees to the Registrant's Board since the
Registrant last provided disclosure as to such procedures in response to the
requirements of Item 7(d)(2)(ii)(G) of Schedule 14A or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Based upon their evaluation of the effectiveness of the registrant's
disclosure controls and procedures (as defined in Rule 30a-3(c) under the
Investment Company Act of 1940 (the "Act")) as conducted within 90 days of
the filing date of this Form N-CSR, the registrant's principal financial
officer and principal executive officer have concluded that those disclosure
controls and procedures provide reasonable assurance that the material
information required to be disclosed by the registrant on this report is
recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms.
(b) There were no changes in the registrant's internal controls over financial
reporting (as defined in Rule 30a-3(d) under the Act) that occurred during
the second fiscal quarter of the period covered by the report that have
materially affected, or are reasonably likely to materially affect, the
registrant's internal control over financial reporting.
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.
(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.
NOTICE
A copy of the Amended and Restated Declaration of Trust of the Registrant is on
file with the Secretary of State of the Commonwealth of Massachusetts and notice
is hereby given that this instrument is executed on behalf of the Registrant by
an officer of the Registrant as an officer and not individually and the
obligations of or arising out of this instrument are not binding upon any of the
Trustees or shareholders individually, but are binding only upon the assets and
property of the respective constituent series of the Registrant.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) MFS SERIES TRUST VI
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By (Signature and Title)* MARIA F. DWYER
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Maria F. Dwyer, President
Date: June 23, 2006
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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: June 23, 2006
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By (Signature and Title)* TRACY ATKINSON
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Tracy Atkinson, Treasurer (Principal Financial Officer
and Accounting Officer)
Date: June 23, 2006
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* Print name and title of each signing officer under his or her signature.