UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-859
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MASSACHUSETTS INVESTORS GROWTH STOCK FUND
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(Exact name of registrant as specified in charter)
500 Boylston Street, Boston, Massachusetts 02116
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(Address of principal executive offices) (Zip code)
Susan S. Newton
Massachusetts Financial Services Company
500 Boylston Street
Boston, Massachusetts 02116
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(Name and address of agents for service)
Registrant's telephone number, including area code: (617) 954-5000
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Date of fiscal year end: November 30
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Date of reporting period: May 31, 2006
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ITEM 1. REPORTS TO STOCKHOLDERS.
MASSACHUSETTS INVESTORS GROWTH STOCK FUND 5/31/06
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 10
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NOTES TO FINANCIAL STATEMENTS 26
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BOARD REVIEW OF INVESTMENT ADVISORY AGREEMENT 37
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PROXY VOTING POLICIES AND INFORMATION 37
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QUARTERLY PORTFOLIO DISCLOSURE 37
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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)
July 17, 2006
The opinions expressed in this letter are those of MFS, and no forecasts can
be guaranteed.
PORTFOLIO COMPOSITION
PORTFOLIO STRUCTURE
Stocks 96.8%
Cash & Other Net Assets 3.2%
TOP TEN HOLDINGS
General Electric Co. 3.6%
------------------------------------------------
Cisco Systems, Inc. 3.0%
------------------------------------------------
Wal-Mart Stores, Inc. 2.5%
------------------------------------------------
EMC Corp. 2.3%
------------------------------------------------
Johnson & Johnson 2.3%
------------------------------------------------
Intel Corp. 2.1%
------------------------------------------------
Procter & Gamble Co. 2.1%
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Wyeth 2.1%
------------------------------------------------
Corning, Inc. 2.0%
------------------------------------------------
Oracle Corp. 1.8%
------------------------------------------------
EQUITY SECTORS
Technology 26.1%
------------------------------------------------
Health Care 18.7%
------------------------------------------------
Retailing 11.5%
------------------------------------------------
Industrial Goods & Services 7.4%
------------------------------------------------
Leisure 7.1%
------------------------------------------------
Financial Services 6.7%
------------------------------------------------
Special Products & Services 5.6%
------------------------------------------------
Consumer Staples 4.5%
------------------------------------------------
Energy 3.7%
------------------------------------------------
Basic Materials 2.5%
------------------------------------------------
Transportation 1.5%
------------------------------------------------
Autos & Housing 0.9%
------------------------------------------------
Utilities & Communications 0.6%
------------------------------------------------
Percentages are based on net assets as of 5/31/06.
The portfolio is actively managed, and current holdings may be different.
EXPENSE TABLE
FUND EXPENSES BORNE BY THE SHAREHOLDERS DURING THE PERIOD,
DECEMBER 1, 2005 THROUGH MAY 31, 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 December 1, 2005 through
May 31, 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 12/01/05-
Class Ratio 12/01/05 5/31/06 5/31/06
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Actual 0.96% $1,000.00 $992.20 $4.77
A ------------------------------------------------------------------------
Hypothetical (h) 0.96% $1,000.00 $1,020.14 $4.84
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Actual 1.61% $1,000.00 $988.00 $7.98
B -------------------------------------------------------------------------
Hypothetical (h) 1.61% $1,000.00 $1,016.90 $8.10
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Actual 1.61% $1,000.00 $988.80 $7.98
C ------------------------------------------------------------------------
Hypothetical (h) 1.61% $1,000.00 $1,016.90 $8.10
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Actual 0.61% $1,000.00 $993.10 $3.03
I ------------------------------------------------------------------------
Hypothetical (h) 0.61% $1,000.00 $1,021.89 $3.07
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Actual 1.61% $1,000.00 $987.90 $7.98
J ------------------------------------------------------------------------
Hypothetical (h) 1.61% $1,000.00 $1,016.90 $8.10
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Actual 1.11% $1,000.00 $990.60 $5.51
R ------------------------------------------------------------------------
Hypothetical (h) 1.11% $1,000.00 $1,019.40 $5.59
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Actual 1.71% $1,000.00 $987.10 $8.47
R1 ------------------------------------------------------------------------
Hypothetical (h) 1.71% $1,000.00 $1,016.40 $8.60
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Actual 1.35% $1,000.00 $989.70 $6.70
R2 ------------------------------------------------------------------------
Hypothetical (h) 1.35% $1,000.00 $1,018.20 $6.79
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Actual 1.26% $1,000.00 $990.50 $6.25
R3 ------------------------------------------------------------------------
Hypothetical (h) 1.26% $1,000.00 $1,018.65 $6.34
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Actual 1.01% $1,000.00 $991.40 $5.01
R4 ------------------------------------------------------------------------
Hypothetical (h) 1.01% $1,000.00 $1,019.90 $5.09
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Actual 0.71% $1,000.00 $993.00 $3.53
R5 ------------------------------------------------------------------------
Hypothetical (h) 0.71% $1,000.00 $1,021.39 $3.58
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Actual 1.21% $1,000.00 $989.70 $6.00
529A ------------------------------------------------------------------------
Hypothetical (h) 1.21% $1,000.00 $1,018.90 $6.09
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Actual 1.86% $1,000.00 $987.10 $9.21
529B ------------------------------------------------------------------------
Hypothetical (h) 1.86% $1,000.00 $1,015.66 $9.35
- --------------------------------------------------------------------------------
Actual 1.86% $1,000.00 $987.00 $9.21
529C ------------------------------------------------------------------------
Hypothetical (h) 1.86% $1,000.00 $1,015.66 $9.35
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(h) 5% class return per year before expenses.
(p) Expenses paid is equal to each class' annualized expense ratio, as shown
above, multiplied by the average account value over the period, multiplied
by the number of days in the period, divided by the number of days in the
year. Expenses paid do not include any applicable sales charges (loads) or
redemption fees. If these transaction costs had been included, your costs
would have been higher.
PORTFOLIO OF INVESTMENTS (unaudited) - 5/31/06
The Portfolio of Investments is a complete list of all
securities owned by your fund. It is categorized by broad-based
asset classes.
Common Stocks - 96.8%
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ISSUER SHARES/PAR VALUE ($)
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Advertising & Broadcasting - 0.3%
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Grupo Televisa S.A., ADR (l) 989,620 $ 18,199,112
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Aerospace - 1.8%
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United Technologies Corp. 1,892,360 $ 118,310,344
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Apparel Manufacturers - 1.6%
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NIKE, Inc., "B" 1,325,590 $ 106,458,133
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Automotive - 0.9%
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Harman International Industries, Inc. (l) 730,340 $ 61,881,708
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Banks & Credit Companies - 3.8%
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American Express Co. 2,110,930 $ 114,750,155
SLM Corp. 1,344,380 72,273,869
UBS AG (l) 566,236 64,009,287
---------------
$ 251,033,311
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Biotechnology - 5.8%
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Amgen, Inc. (l)(n) 1,712,840 $ 115,770,856
Celgene Corp. (n) 1,811,400 75,082,530
Genzyme Corp. (n) 1,896,740 112,856,030
Gilead Sciences, Inc. (n) 1,272,310 72,941,532
---------------
$ 376,650,948
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Brokerage & Asset Managers - 2.6%
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Chicago Mercantile Exchange Holdings, Inc. (l) 214,980 $ 94,870,674
Merrill Lynch & Co., Inc. 318,350 23,051,724
Morgan Stanley 830,900 49,538,258
---------------
$ 167,460,656
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Business Services - 4.4%
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Accenture Ltd., "A" 796,920 $ 22,433,298
Amdocs Ltd. (n) 2,984,810 111,840,831
Automatic Data Processing, Inc. 364,700 16,582,909
Cintas Corp. (l) 834,820 35,362,975
First Data Corp. 2,204,200 101,635,662
---------------
$ 287,855,675
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Chemicals - 2.2%
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3M Co. 424,920 $ 35,548,807
Ecolab, Inc. (l) 1,008,300 39,031,293
Monsanto Co. 798,400 67,193,344
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$ 141,773,444
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Computer Software - 5.0%
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Adobe Systems, Inc. (n) 2,950,542 $ 84,474,017
Microsoft Corp. 5,205,440 117,903,216
Oracle Corp. (n) 8,483,290 120,632,384
---------------
$ 323,009,617
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Computer Software - Systems - 2.3%
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Apple Computer, Inc. (n) 1,201,220 $ 71,796,919
Dell, Inc. (n) 551,340 13,993,009
Hewlett-Packard Co. 1,102,700 35,705,426
LG.Philips LCD Co. Ltd., ADR (l)(n) 1,458,280 27,371,916
---------------
$ 148,867,270
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Conglomerates - 0.4%
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Textron, Inc. 306,400 $ 27,860,952
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Consumer Goods & Services - 3.4%
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Colgate-Palmolive Co. 495,100 $ 29,874,334
eBay, Inc. (n) 1,509,600 49,529,976
Procter & Gamble Co. 2,565,336 139,169,478
---------------
$ 218,573,788
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Electrical Equipment - 5.0%
- --------------------------------------------------------------------------------------------------
Cooper Industries Ltd., "A" 252,740 $ 22,509,024
Danaher Corp. (l) 603,700 38,703,207
General Electric Co. 6,880,630 235,730,384
Rockwell Automation, Inc. 435,400 29,729,112
---------------
$ 326,671,727
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Electronics - 6.9%
- --------------------------------------------------------------------------------------------------
Analog Devices, Inc. 765,530 $ 25,821,327
Intel Corp. 7,752,990 139,708,880
Marvell Technology Group Ltd. (n) 1,325,900 63,205,653
Samsung Electronics Co. Ltd., GDR 311,070 98,298,120
SanDisk Corp. (n) 947,250 53,301,758
Xilinx, Inc. 2,712,480 70,524,480
---------------
$ 450,860,218
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Food & Drug Stores - 1.2%
- --------------------------------------------------------------------------------------------------
CVS Corp. 2,876,820 $ 80,263,278
- --------------------------------------------------------------------------------------------------
Food & Non Alcoholic Beverages - 1.9%
- --------------------------------------------------------------------------------------------------
PepsiCo, Inc. 1,224,970 $ 74,061,686
SYSCO Corp. 1,720,200 52,603,716
---------------
$ 126,665,402
- --------------------------------------------------------------------------------------------------
Gaming & Lodging - 5.1%
- --------------------------------------------------------------------------------------------------
Carnival Corp. (l) 633,010 $ 25,263,429
Harrah's Entertainment, Inc. 724,100 55,060,564
International Game Technology 2,120,800 78,957,384
Las Vegas Sands Corp. (l)(n) 778,550 54,973,416
MGM Mirage (l)(n) 1,177,000 48,798,420
Starwood Hotels & Resorts, Inc. 1,158,100 70,759,910
---------------
$ 333,813,123
- --------------------------------------------------------------------------------------------------
General Merchandise - 4.8%
- --------------------------------------------------------------------------------------------------
Kohl's Corp. (n) 1,521,800 $ 81,705,442
Target Corp. 1,344,400 65,768,048
Wal-Mart Stores, Inc. 3,400,760 164,766,822
---------------
$ 312,240,312
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Health Maintenance Organizations - 0.5%
- --------------------------------------------------------------------------------------------------
UnitedHealth Group, Inc. 749,400 $ 32,943,624
- --------------------------------------------------------------------------------------------------
Insurance - 0.3%
- --------------------------------------------------------------------------------------------------
American International Group, Inc. 270,720 $ 16,459,776
- --------------------------------------------------------------------------------------------------
Internet - 2.3%
- --------------------------------------------------------------------------------------------------
Google, Inc., "A" (n) 182,820 $ 67,976,132
Yahoo!, Inc. (n) 2,688,500 84,929,715
---------------
$ 152,905,847
- --------------------------------------------------------------------------------------------------
Leisure & Toys - 1.7%
- --------------------------------------------------------------------------------------------------
Electronic Arts, Inc. (n) 2,650,140 $ 111,491,390
- --------------------------------------------------------------------------------------------------
Machinery & Tools - 0.6%
- --------------------------------------------------------------------------------------------------
Deere & Co. 448,900 $ 38,425,840
- --------------------------------------------------------------------------------------------------
Medical Equipment - 4.7%
- --------------------------------------------------------------------------------------------------
Advanced Medical Optics, Inc. (l)(n) 1,990,110 $ 90,191,785
C.R. Bard, Inc. (l) 554,800 41,060,748
DENTSPLY International, Inc. 972,600 58,161,480
Medtronic, Inc. (l) 2,031,600 102,575,484
St. Jude Medical, Inc. (n) 436,000 14,867,600
---------------
$ 306,857,097
- --------------------------------------------------------------------------------------------------
Network & Telecom - 7.3%
- --------------------------------------------------------------------------------------------------
Cisco Systems, Inc. (n) 9,971,040 $ 196,230,067
Corning, Inc. (n) 5,447,400 132,099,450
Juniper Networks, Inc. (n) 940,800 14,986,944
Nokia Corp., ADR 1,912,290 41,056,866
QUALCOMM, Inc. 2,074,850 93,803,969
---------------
$ 478,177,296
- --------------------------------------------------------------------------------------------------
Oil Services - 3.7%
- --------------------------------------------------------------------------------------------------
GlobalSantaFe Corp. 1,558,170 $ 93,692,762
Noble Corp. 696,450 48,424,169
Transocean, Inc. (n) 217,700 17,714,249
Weatherford International Ltd. (n) 1,594,000 82,951,760
---------------
$ 242,782,940
- --------------------------------------------------------------------------------------------------
Personal Computers & Peripherals - 2.3%
- --------------------------------------------------------------------------------------------------
EMC Corp. (n) 11,877,070 $ 152,026,496
- --------------------------------------------------------------------------------------------------
Pharmaceuticals - 7.7%
- --------------------------------------------------------------------------------------------------
Allergan, Inc. 342,890 $ 32,512,830
Eli Lilly & Co. 1,326,920 68,522,149
Johnson & Johnson 2,465,940 148,498,907
Roche Holding AG (l) 482,570 75,097,235
Sanofi-Aventis (l) 222,300 20,938,851
Teva Pharmaceutical Industries Ltd., ADR (l) 532,810 19,399,612
Wyeth 2,928,020 133,927,635
---------------
$ 498,897,219
- --------------------------------------------------------------------------------------------------
Railroad & Shipping - 0.2%
- --------------------------------------------------------------------------------------------------
Norfolk Southern Corp. 187,200 $ 9,876,672
- --------------------------------------------------------------------------------------------------
Specialty Chemicals - 0.3%
- --------------------------------------------------------------------------------------------------
Praxair, Inc. 324,880 $ 17,121,176
- --------------------------------------------------------------------------------------------------
Specialty Stores - 3.9%
- --------------------------------------------------------------------------------------------------
Chico's FAS, Inc. (n) 1,360,300 $ 40,768,191
Home Depot, Inc. 2,185,100 83,296,012
Lowe's Cos., Inc. 520,970 32,446,012
Staples, Inc. 2,033,195 47,759,751
Williams-Sonoma, Inc. 1,376,800 49,771,320
---------------
$ 254,041,286
- --------------------------------------------------------------------------------------------------
Telecommunications - Wireless - 0.6%
- --------------------------------------------------------------------------------------------------
America Movil S.A. de C.V., "L", ADR 1,139,740 $ 37,223,908
- --------------------------------------------------------------------------------------------------
Trucking - 1.3%
- --------------------------------------------------------------------------------------------------
FedEx Corp. 772,450 $ 84,405,612
- --------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS (IDENTIFIED COST, $6,478,136,843) $ 6,312,085,197
- --------------------------------------------------------------------------------------------------
Repurchase Agreement - 3.6%
- --------------------------------------------------------------------------------------------------
Goldman Sachs, 5.02%, dated 5/31/06, due 6/01/06, total to be
received $232,735,449 (secured by various U.S. Treasury and
Federal Agency obligations in a jointly traded account), at
Cost $232,703,000 $ 232,703,000
- --------------------------------------------------------------------------------------------------
Collateral for Securities Loaned - 2.3%
- --------------------------------------------------------------------------------------------------
ISSUER SHARES/PAR VALUE ($)
- --------------------------------------------------------------------------------------------------
Morgan Stanley 5.0825%, dated 5/31/06, due 6/01/06, total to
be received $57,826,228 (secured by various U.S. Treasury and
Federal Agency obligations in an individually traded
account), at Cost $ 57,818,065 $ 57,818,065
Navigator Securities Lending Prime Portfolio, at Cost and
Net Asset Value 95,364,787 95,364,787
- --------------------------------------------------------------------------------------------------
TOTAL COLLATERAL FOR SECURITIES LOANED, AT COST AND VALUE $ 153,182,852
- --------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (IDENTIFIED COST, $6,864,022,695) $ 6,697,971,049
- --------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - (2.7)% (175,837,894)
- --------------------------------------------------------------------------------------------------
NET ASSETS - 100.0% $ 6,522,133,155
- --------------------------------------------------------------------------------------------------
(l) All or a portion of this security is on loan.
(n) Non-income producing security.
The following abbreviations are used in the Portfolio of Investments and are
defined:
ADR American Depository Receipt
GDR Global Depository Receipt
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS Statement of Assets and Liabilities (unaudited)
This statement represents your fund's balance sheet, which details the assets
and liabilities comprising the total value of the fund.
AT 5/31/06
ASSETS
- -------------------------------------------------------------------------------------------------------
Investments, at value, including $148,484,780 of securities
on loan (identified cost, $6,864,022,695) $6,697,971,049
Cash 158
Receivable for investments sold 16,285,517
Receivable for fund shares sold 3,606,064
Interest and dividends receivable 6,610,901
Other assets 72,046
- -------------------------------------------------------------------------------------------------------
Total assets $6,724,545,735
- -------------------------------------------------------------------------------------------------------
LIABILITIES
- -------------------------------------------------------------------------------------------------------
Payable for investments purchased $15,986,276
Payable for fund shares reacquired 29,777,723
Collateral for securities loaned, at value 153,182,852
Payable to affiliates
Management fee 58,806
Shareholder servicing costs 1,881,606
Distribution and service fees 97,660
Administrative services fee 1,319
Program manager fees 33
Retirement plan administration and services fees 421
Payable for independent trustees' compensation 306,213
Accrued expenses and other liabilities 1,119,671
- -------------------------------------------------------------------------------------------------------
Total liabilities $202,412,580
- -------------------------------------------------------------------------------------------------------
Net assets $6,522,133,155
- -------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- -------------------------------------------------------------------------------------------------------
Paid-in capital $11,159,894,737
Unrealized appreciation (depreciation) on investments and
translation of assets and liabilities in foreign currencies (166,035,047)
Accumulated net realized gain (loss) on investments and
foreign currency transactions (4,469,001,166)
Accumulated net investment loss (2,725,369)
- -------------------------------------------------------------------------------------------------------
Net assets $6,522,133,155
- -------------------------------------------------------------------------------------------------------
Shares of beneficial interest outstanding 531,180,556
- -------------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities (unaudited) - continued
Class A shares
- -------------------------------------------------------------------------------------------------------
Net assets $4,140,655,328
Shares outstanding 326,930,866
- -------------------------------------------------------------------------------------------------------
Net asset value per share $12.67
- -------------------------------------------------------------------------------------------------------
Offering price per share (100/94.25Xnet asset value per
share) $13.44
- -------------------------------------------------------------------------------------------------------
Class B shares
- -------------------------------------------------------------------------------------------------------
Net assets $1,607,160,235
Shares outstanding 139,283,959
- -------------------------------------------------------------------------------------------------------
Net asset value and offering price per share $11.54
- -------------------------------------------------------------------------------------------------------
Class C shares
- -------------------------------------------------------------------------------------------------------
Net assets $486,757,738
Shares outstanding 42,370,290
- -------------------------------------------------------------------------------------------------------
Net asset value and offering price per share $11.49
- -------------------------------------------------------------------------------------------------------
Class I shares
- -------------------------------------------------------------------------------------------------------
Net assets $95,227,005
Shares outstanding 7,379,989
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share $12.90
- -------------------------------------------------------------------------------------------------------
Class J shares
- -------------------------------------------------------------------------------------------------------
Net assets $1,532,906
Shares outstanding 134,220
- -------------------------------------------------------------------------------------------------------
Net asset value and redemption price per share $11.42
- -------------------------------------------------------------------------------------------------------
Class R shares
- -------------------------------------------------------------------------------------------------------
Net assets $51,544,728
Shares outstanding 4,078,299
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share $12.64
- -------------------------------------------------------------------------------------------------------
Class R1 shares
- -------------------------------------------------------------------------------------------------------
Net assets $1,655,363
Shares outstanding 143,827
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share $11.51
- -------------------------------------------------------------------------------------------------------
Class R2 shares
- -------------------------------------------------------------------------------------------------------
Net assets $330,291
Shares outstanding 28,553
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share $11.57
- -------------------------------------------------------------------------------------------------------
Class R3 shares
- -------------------------------------------------------------------------------------------------------
Net assets $7,346,418
Shares outstanding 586,867
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share $12.52
- -------------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities (unaudited) - continued
Class R4 shares
- -------------------------------------------------------------------------------------------------------
Net assets $7,171,798
Shares outstanding 566,477
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share $12.66
- -------------------------------------------------------------------------------------------------------
Class R5 shares
- -------------------------------------------------------------------------------------------------------
Net assets $117,688,871
Shares outstanding 9,260,898
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per
share $12.71
- -------------------------------------------------------------------------------------------------------
Class 529A shares
- -------------------------------------------------------------------------------------------------------
Net assets $3,489,069
Shares outstanding 278,353
- -------------------------------------------------------------------------------------------------------
Net asset value per share $12.53
- -------------------------------------------------------------------------------------------------------
Offering price per share (100/94.25Xnet asset value per
share) $13.29
- -------------------------------------------------------------------------------------------------------
Class 529B shares
- -------------------------------------------------------------------------------------------------------
Net assets $604,319
Shares outstanding 52,841
- -------------------------------------------------------------------------------------------------------
Net asset value and offering price per share $11.44
- -------------------------------------------------------------------------------------------------------
Class 529C shares
- -------------------------------------------------------------------------------------------------------
Net assets $969,086
Shares outstanding 85,117
- -------------------------------------------------------------------------------------------------------
Net asset value and offering price per share $11.39
- -------------------------------------------------------------------------------------------------------
On sales of $50,000 or more, the offering price of Class A and Class 529A shares is reduced. A
contingent deferred sales charge may be imposed on redemptions of Class A, Class B, Class C, Class 529B
and Class 529C shares.
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS Statement of Operations (unaudited)
This statement describes how much your fund earned in investment income and
accrued in expenses. It also describes any gains and/or losses generated by
fund operations.
SIX MONTHS ENDED 5/31/06
NET INVESTMENT LOSS
- -------------------------------------------------------------------------------------------------------
Income
Dividends $32,798,740
Interest 7,312,493
Foreign taxes withheld (740,328)
- -------------------------------------------------------------------------------------------------------
Total investment income $39,370,905
- -------------------------------------------------------------------------------------------------------
Expenses
Management fee $11,959,589
Distribution and service fees 20,118,530
Program manager fees 6,331
Shareholder servicing costs 8,545,746
Administrative services fee 234,476
Retirement plan administration and services fees 69,375
Independent trustees' compensation 83,326
Custodian fee 484,667
Shareholder communications 522,145
Auditing fees 32,181
Legal fees 67,942
Miscellaneous 97,106
- -------------------------------------------------------------------------------------------------------
Total expenses $42,221,414
- -------------------------------------------------------------------------------------------------------
Fees paid indirectly (327,474)
Reduction of expenses by investment adviser (29,491)
- -------------------------------------------------------------------------------------------------------
Net expenses $41,864,449
- -------------------------------------------------------------------------------------------------------
Net investment loss $(2,493,544)
- -------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
- -------------------------------------------------------------------------------------------------------
Realized gain (loss) (identified cost basis)
Investment transactions $176,055,564
Foreign currency transactions (36,882)
- -------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments and foreign
currency transactions $176,018,682
- -------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation)
Investments $(208,541,958)
Translation of assets and liabilities in foreign currencies 26,197
- -------------------------------------------------------------------------------------------------------
Net unrealized gain (loss) on investments and foreign
currency translation $(208,515,761)
- -------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and
foreign currency $(32,497,079)
- -------------------------------------------------------------------------------------------------------
Change in net assets from operations $(34,990,623)
- -------------------------------------------------------------------------------------------------------
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
5/31/06 11/30/05
(UNAUDITED)
CHANGE IN NET ASSETS
- -------------------------------------------------------------------------------------------------------
FROM OPERATIONS
- -------------------------------------------------------------------------------------------------------
Net investment loss $(2,493,544) $(20,227,001)
Net realized gain (loss) on investments and foreign
currency transactions 176,018,682 765,811,696
Net unrealized gain (loss) on investments and foreign
currency translation (208,515,761) (143,728,535)
- -------------------------------------------------------------------------------------------------------
Change in net assets from operations $(34,990,623) $601,856,160
- -------------------------------------------------------------------------------------------------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------
Class A $-- $(22,549,646)
Class I -- (1,105,607)
Class R -- (113,615)
Class R3 -- (6,068)
Class 529A -- (7,734)
- -------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $-- $(23,782,670)
- -------------------------------------------------------------------------------------------------------
Change in net assets from fund share transactions $(1,031,256,350) $(1,859,041,090)
- -------------------------------------------------------------------------------------------------------
Redemption fees $-- $19,402
- -------------------------------------------------------------------------------------------------------
Total change in net assets $(1,066,246,973) $(1,280,948,198)
- -------------------------------------------------------------------------------------------------------
NET ASSETS
- -------------------------------------------------------------------------------------------------------
At beginning of period 7,588,380,128 8,869,328,326
At end of period (including accumulated net investment
loss of $2,725,369 and accumulated distributions in
excess of net investment income of $231,825,
respectively) $6,522,133,155 $7,588,380,128
- -------------------------------------------------------------------------------------------------------
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 11/30
ENDED --------------------------------------------------------------------------------
CLASS A 5/31/06 2005 2004 2003 2002 2001
(UNAUDITED)
Net asset value,
beginning of period $12.77 $11.88 $11.02 $9.98 $12.73 $18.47
- -----------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM
INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income
(loss) (d) $0.01 $(0.00)(w) $0.05 $0.00(w) $(0.02) $(0.00)(w)
Net realized and
unrealized gain (loss)
on investments and
foreign currency (0.11) 0.94 0.81 1.04 (2.73) (4.02)
- -----------------------------------------------------------------------------------------------------------------------------
Total from investment
operations $(0.10) $0.94 $0.86 $1.04 $(2.75) $(4.02)
- -----------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------------
From net investment
income $-- $(0.05) $-- $-- $-- $--
From net realized gain
on investments and
foreign currency
transactions -- -- -- -- -- (1.47)
From paid-in capital -- -- -- -- -- (0.25)
- -----------------------------------------------------------------------------------------------------------------------------
Total distributions
declared to shareholders $-- $(0.05) $-- $-- $-- $(1.72)
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of
period $12.67 $12.77 $11.88 $11.02 $9.98 $12.73
- -----------------------------------------------------------------------------------------------------------------------------
Total return (%)
(r)(s)(t) (0.78)(n) 7.93 7.80(b) 10.42(j) (21.60) (24.20)
- -----------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------------------
Expenses before
expense reductions (f) 0.96(a) 0.96 0.92 0.95 0.94 0.94
Expenses after
expense reductions (f) 0.96(a) 0.96 0.92 0.95 0.94 0.94
Net investment income
(loss) 0.14(a) (0.03) 0.44 0.01 (0.14) (0.03)
Portfolio turnover 58 125 141 283 227 305
Net assets at end of
period (000 Omitted) $4,140,655 $4,771,192 $5,540,056 $7,079,160 $6,327,026 $8,336,750
- -----------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 11/30
ENDED ----------------------------------------------------------------------------
CLASS B 5/31/06 2005 2004 2003 2002 2001
(UNAUDITED)
Net asset value, beginning of
period $11.68 $10.88 $10.16 $9.27 $11.89 $17.37
- -----------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM
INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------------
Net investment loss (d) $(0.03) $(0.08) $(0.02) $(0.06) $(0.08) $(0.09)
Net realized and unrealized
gain (loss) on investments
and foreign currency (0.11) 0.88 0.74 0.95 (2.54) (3.77)
- -----------------------------------------------------------------------------------------------------------------------------
Total from investment
operations $(0.14) $0.80 $0.72 $0.89 $(2.62) $(3.86)
- -----------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------------
From net realized gain on
investments and foreign
currency transactions $-- $-- $-- $-- $-- $(1.39)
From paid-in capital -- -- -- -- -- (0.23)
- -----------------------------------------------------------------------------------------------------------------------------
Total distributions
declared to shareholders $-- $-- $-- $-- $-- $(1.62)
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of
period $11.54 $11.68 $10.88 $10.16 $9.27 $11.89
- -----------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s)(t) (1.20)(n) 7.35 7.09(b) 9.60(j) (22.04) (24.71)
- -----------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------------------
Expenses before
expense reductions (f) 1.61(a) 1.61 1.56 1.60 1.59 1.59
Expenses after
expense reductions (f) 1.61(a) 1.61 1.56 1.60 1.59 1.59
Net investment loss (0.51)(a) (0.68) (0.17) (0.64) (0.79) (0.68)
Portfolio turnover 58 125 141 283 227 305
Net assets at end of period
(000 Omitted) $1,607,160 $1,947,597 $2,415,346 $2,778,509 $2,820,241 $4,280,270
- -----------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 11/30
ENDED ----------------------------------------------------------------------
CLASS C 5/31/06 2005 2004 2003 2002 2001
(UNAUDITED)
Net asset value, beginning
of period $11.62 $10.83 $10.11 $9.23 $11.84 $17.31
- -----------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM
INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------------
Net investment loss (d) $(0.03) $(0.08) $(0.02) $(0.06) $(0.08) $(0.09)
Net realized and unrealized
gain (loss) on investments and
foreign currency (0.10) 0.87 0.74 0.94 (2.53) (3.75)
- -----------------------------------------------------------------------------------------------------------------------------
Total from investment operations $(0.13) $0.79 $0.72 $0.88 $(2.61) $(3.84)
- -----------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------------
From net realized gain
on investments and foreign
currency transactions $-- $-- $-- $-- $-- $(1.40)
From paid-in capital -- -- -- -- -- (0.23)
- -----------------------------------------------------------------------------------------------------------------------------
Total distributions declared
to shareholders $-- $-- $-- $-- $-- $(1.63)
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.49 $11.62 $10.83 $10.11 $9.23 $11.84
- -----------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s)(t) (1.12)(n) 7.29 7.12(b) 9.53(j) (22.04) (24.69)
- -----------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.61(a) 1.61 1.56 1.60 1.59 1.59
Expenses after expense reductions(f) 1.61(a) 1.61 1.56 1.60 1.59 1.59
Net investment loss (0.51)(a) (0.68) (0.19) (0.64) (0.79) (0.68)
Portfolio turnover 58 125 141 283 227 305
Net assets at end of period
(000 Omitted) $486,758 $584,360 $739,534 $911,333 $917,809 $1,446,087
- -----------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 11/30
ENDED --------------------------------------------------------------------
CLASS I 5/31/06 2005 2004 2003 2002 2001
(UNAUDITED)
Net asset value, beginning
of period $12.99 $12.08 $11.17 $10.08 $12.81 $18.58
- -----------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM
INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.03 $0.04 $0.08 $0.04 $0.03 $0.05
Net realized and unrealized
gain (loss) on investments and
foreign currency (0.12) 0.97 0.83 1.05 (2.76) (4.03)
- -----------------------------------------------------------------------------------------------------------------------------
Total from investment operations $(0.09) $1.01 $0.91 $1.09 $(2.73) $(3.98)
- -----------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------------
From net investment income $-- $(0.10) $-- $-- $-- $--
From net realized gain on investments
and foreign currency transactions -- -- -- -- -- (1.53)
From paid-in capital -- -- -- -- -- (0.26)
- -----------------------------------------------------------------------------------------------------------------------------
Total distributions declared to
shareholders $-- $(0.10) $-- $-- $-- $(1.79)
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.90 $12.99 $12.08 $11.17 $10.08 $12.81
- -----------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) (0.69)(n) 8.38 8.15(b) 10.81(j) (21.31) (23.93)
- -----------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 0.61(a) 0.61 0.57 0.60 0.59 0.59
Expenses after expense reductions (f) 0.61(a) 0.61 0.57 0.60 0.59 0.59
Net investment income 0.48(a) 0.32 0.67 0.36 0.21 0.32
Portfolio turnover 58 125 141 283 227 305
Net assets at end of period
(000 Omitted) $95,227 $122,728 $133,502 $285,467 $196,501 $195,542
- -----------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 11/30
ENDED ----------------------------------------------------------------------
CLASS J 5/31/06 2005 2004 2003 2002 2001(i)
(UNAUDITED)
Net asset value, beginning of period $11.56 $10.77 $10.06 $9.17 $11.77 $15.98
- ------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM
INVESTMENT OPERATIONS
- ------------------------------------------------------------------------------------------------------------------------------
Net investment loss (d) $(0.03) $(0.07) $(0.03) $(0.06) $(0.08) $(0.09)
Net realized and unrealized gain
(loss) on investments and foreign
currency (0.11) 0.86 0.74 0.95 (2.52) (4.12)
- ------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $(0.14) $0.79 $0.71 $0.89 $(2.60) $(4.21)
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.42 $11.56 $10.77 $10.06 $9.17 $11.77
- ------------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s)(t) (1.21)(n) 7.34 7.06(b) 9.71(j) (22.09) (26.35)(n)
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- ------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.61(a) 1.60 1.56 1.61 1.59 1.59(a)
Expenses after expense reductions (f) 1.61(a) 1.60 1.56 1.61 1.59 1.59(a)
Net investment loss (0.51)(a) (0.67) (0.25) (0.66) (0.79) (0.68)(a)
Portfolio turnover 58 125 141 283 227 305
Net assets at end of period
(000 Omitted) $1,533 $1,952 $7,630 $10,368 $3,284 $6,861
- ------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 11/30
ENDED ----------------------------------------------------
CLASS R 5/31/06 2005 2004 2003(i)
(UNAUDITED)
Net asset value, beginning of period $12.76 $11.87 $11.02 $9.23
- ---------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (d) $(0.00)(w) $(0.02) $0.05 $(0.01)
Net realized and unrealized gain (loss) on
investments and foreign currency (0.12) 0.95 0.80 1.80
- ---------------------------------------------------------------------------------------------------------------------------
Total from investment operations $(0.12) $0.93 $0.85 $1.79
- ---------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------------------------
From net investment income $-- $(0.04) $-- $--
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.64 $12.76 $11.87 $11.02
- ---------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) (0.94)(n) 7.89 7.71(b) 19.39(j)(n)
- ---------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.11(a) 1.12 1.07 1.10(a)
Expenses after expense reductions (f) 1.11(a) 1.12 1.07 1.10(a)
Net investment income (loss) (0.00)(a) (0.17) 0.42 (0.15)(a)
Portfolio turnover 58 125 141 283
Net assets at end of period (000 Omitted) $51,545 $51,749 $29,239 $14,105
- ---------------------------------------------------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED
CLASS R1 ENDED 5/31/06 11/30/05(i)
(UNAUDITED)
Net asset value, beginning of period $11.66 $10.86
- ---------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------
Net investment loss (d) $(0.03) $(0.06)
Net realized and unrealized gain (loss) on investments
and foreign currency (0.12) 0.86
- ---------------------------------------------------------------------------------------------------------------------------
Total from investment operations $(0.15) $0.80
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.51 $11.66
- ---------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) (1.29)(n) 7.37(n)
- ---------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.81(a) 1.82(a)
Expenses after expense reductions (f) 1.71(a) 1.78(a)
Net investment loss (0.58)(a) (0.80)(a)
Portfolio turnover 58 125
Net assets at end of period (000 Omitted) $1,655 $1,008
- ---------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEAR ENDED
CLASS R2 ENDED 5/31/06 11/30/05(i)
(UNAUDITED)
Net asset value, beginning of period $11.69 $10.86
- -----------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------
Net investment loss (d) $(0.01) $(0.04)
Net realized and unrealized gain (loss) on
investments and foreign currency (0.11) 0.87
- -----------------------------------------------------------------------------------------------------------------------
Total from investment operations $(0.12) $0.83
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.57 $11.69
- -----------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) (1.03)(n) 7.64(n)
- -----------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.50(a) 1.51(a)
Expenses after expense reductions (f) 1.35(a) 1.47(a)
Net investment loss (0.24)(a) (0.54)(a)
Portfolio turnover 58 125
Net assets at end of period (000 Omitted) $330 $274
- -----------------------------------------------------------------------------------------------------------------------
SIX MONTHS YEARS ENDED 11/30
ENDED ----------------------------------------------------
CLASS R3 5/31/06 2005 2004 2003(i)
(UNAUDITED)
Net asset value, beginning of period $12.64 $11.82 $11.02 $11.02
- -------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (d) $(0.01) $(0.04) $0.00(w) $(0.00)(w)
Net realized and unrealized gain (loss) on
investments and foreign currency (0.11) 0.94 0.80 (0.00)(g)(w)
- -------------------------------------------------------------------------------------------------------------------------
Total from investment operations $(0.12) $0.90 $0.80 $(0.00)(w)
- -------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------------------------
From net investment income $-- $(0.08) $-- $--
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.52 $12.64 $11.82 $11.02
- -------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) (0.95)(n) 7.64 7.26(b) 0.00(n)
- -------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.36(a) 1.37 1.33 1.44(a)
Expenses after expense reductions (f) 1.26(a) 1.34 1.33 1.44(a)
Net investment income (loss) (0.14)(a) (0.37) 0.03 (0.34)(a)
Portfolio turnover 58 125 141 283
Net assets at end of period (000 Omitted) $7,346 $4,216 $708 $5
- -------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEAR ENDED
CLASS R4 ENDED 5/31/06 11/30/05(i)
(UNAUDITED)
Net asset value, beginning of period $12.77 $11.83
- -----------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) (d) $0.01 $(0.01)
Net realized and unrealized gain (loss) on
investments and foreign currency (0.12) 0.95
- -----------------------------------------------------------------------------------------------------------
Total from investment operations $(0.11) $0.94
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.66 $12.77
- -----------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) (0.86)(n) 7.95(n)
- -----------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.01(a) 1.03(a)
Expenses after expense reductions (f) 1.01(a) 1.03(a)
Net investment income (loss) 0.17(a) (0.11)(a)
Portfolio turnover 58 125
Net assets at end of period (000 Omitted) $7,172 $1,016
- -----------------------------------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED
CLASS R5 ENDED 5/31/06 11/30/05(i)
(UNAUDITED)
Net asset value, beginning of period $12.80 $11.83
- -----------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------------------
Net investment income (d) $0.03 $0.03
Net realized and unrealized gain (loss) on
investments and foreign currency (0.12) 0.94
- -----------------------------------------------------------------------------------------------------------
Total from investment operations $(0.09) $0.97
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.71 $12.80
- -----------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) (0.70)(n) 8.20(n)
- -----------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 0.71(a) 0.70(a)
Expenses after expense reductions (f) 0.71(a) 0.70(a)
Net investment income 0.41(a) 0.48(a)
Portfolio turnover 58 125
Net assets at end of period (000 Omitted) $117,689 $97,541
- -----------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 11/30
ENDED ----------------------------------------------------------
CLASS 529A 5/31/06 2005 2004 2003 2002(i)
(UNAUDITED)
Net asset value, beginning of period $12.66 $11.79 $10.96 $9.97 $9.72
- ---------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (d) $(0.01) $(0.03) $0.04 $(0.02) $(0.00)(w)
Net realized and unrealized gain (loss) on
investments and foreign currency (0.12) 0.94 0.79 1.01 0.25
- ---------------------------------------------------------------------------------------------------------------------------
Total from investment operations $(0.13) $0.91 $0.83 $0.99 $0.25
- ---------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------------------------
From net investment income $-- $(0.04) $-- $-- $--
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.53 $12.66 $11.79 $10.96 $9.97
- ---------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s)(t) (1.03)(n) 7.77 7.57(b) 9.93(j) 2.57(n)
- ---------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.21(a) 1.22 1.17 1.20 1.19(a)
Expenses after expense reductions (f) 1.21(a) 1.22 1.17 1.20 1.19(a)
Net investment income (loss) (0.10)(a) (0.27) 0.39 (0.24) (0.16)(a)
Portfolio turnover 58 125 141 283 227
Net assets at end of period (000 Omitted) $3,489 $3,203 $2,070 $1,068 $95
- ---------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 11/30
ENDED ----------------------------------------------------------
CLASS 529B 5/31/06 2005 2004 2003 2002(i)
(UNAUDITED)
Net asset value, beginning of period $11.59 $10.83 $10.13 $9.26 $9.05
- ---------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------
Net investment loss (d) $(0.04) $(0.10) $(0.03) $(0.08) $(0.02)
Net realized and unrealized gain (loss) on
investments and foreign currency (0.11) 0.86 0.73 0.95 0.23
- ---------------------------------------------------------------------------------------------------------------------------
Total from investment operations $(0.15) $0.76 $0.70 $0.87 $0.21
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.44 $11.59 $10.83 $10.13 $9.26
- ---------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s)(t) (1.29)(n) 7.02 6.91(b) 9.40(j) 2.32(n)
- ---------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.86(a) 1.87 1.81 1.85 1.84(a)
Expenses after expense reductions (f) 1.86(a) 1.87 1.81 1.85 1.84(a)
Net investment loss (0.75)(a) (0.92) (0.30) (0.89) (0.78)(a)
Portfolio turnover 58 125 141 283 227
Net assets at end of period (000 Omitted) $604 $589 $478 $285 $24
- ---------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 11/30
ENDED ----------------------------------------------------------
CLASS 529C 5/31/06 2005 2004 2003 2002(i)
(UNAUDITED)
Net asset value, beginning of period $11.54 $10.78 $10.09 $9.22 $9.01
- ---------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------
Net investment loss (d) $(0.04) $(0.10) $(0.04) $(0.08) $(0.02)
Net realized and unrealized gain (loss) on
investments and foreign currency (0.11) 0.86 0.73 0.95 0.23
- ---------------------------------------------------------------------------------------------------------------------------
Total from investment operations $(0.15) $0.76 $0.69 $0.87 $0.21
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.39 $11.54 $10.78 $10.09 $9.22
- ---------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s)(t) (1.30)(n) 7.05 6.84(b) 9.44(j) 2.33(n)
- ---------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.86(a) 1.87 1.81 1.86 1.84(a)
Expenses after expense reductions (f) 1.86(a) 1.87 1.81 1.86 1.84(a)
Net investment loss (0.75)(a) (0.92) (0.34) (0.88) (0.81)(a)
Portfolio turnover 58 125 141 283 227
Net assets at end of period (000 Omitted) $969 $952 $765 $606 $32
- ---------------------------------------------------------------------------------------------------------------------------
Any redemption fees charged by the fund during the 2004 and 2005 fiscal years resulted in a per share impact of less
than $0.01.
(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 resulted in an increase in the net asset value of $0.03 per share based on shares outstanding
on the day the proceeds were recorded. Excluding the effect of this accrual from the ending net asset value per
share, Class A, Class B, Class C, Class I, Class J, Class R, Class R3, Class 529A, Class 529B and Class 529C total
returns for the year ended November 30, 2004 would have been lower by 0.25%, respectively.
(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 18, 2000 (Class J), December 31, 2002 (Class R), July 31, 2002
(Classes 529A, 529B, and 529C), October 31, 2003 (Class R3) and April 1, 2005 (Classes R1, R2, R4, and R5) through
the stated period end.
(j) The fund's total return calculation includes proceeds received on March 26, 2003 from a non-recurring litigation
settlement, recorded as a realized gain on investment transactions. The proceeds resulted in an increase in the net
asset value of less than $0.01 per share based on shares outstanding on the day the proceeds were received.
Excluding the effect of this payment from the fund's ending net asset value per share, the Class A, Class B, Class
C, Class I, Class J, Class R, Class 529A, Class 529B, and Class 529C total returns for the year ended November 30,
2003 would have been lower by approximately 0.07%, 0.08%, 0.08%, 0.07%, 0.09%, 0.08%, 0.08%, 0.09%, and 0.09%,
respectively.
(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
Massachusetts Investors Growth Stock Fund (the fund) is organized as a
Massachusetts business trust and is registered under the Investment Company
Act of 1940, as amended, as 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 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.
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 (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 May 31, 2006, the fund's custodian fees
were reduced by $204,764 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 May 31, 2006, the fund's custodian expenses
were reduced by $122,710 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, net
operating losses and wash sale loss deferrals.
The tax character of distributions declared to shareholders is as follows:
NOVEMBER 30, 2005 NOVEMBER 30, 2004
Ordinary income (including any
short-term capital gains)(a) $23,782,670 $--
(a) Included in the fund's distributions from ordinary income for the year
ended November 30, 2005 is $103,882 in excess of investment company
taxable income, which in accordance with applicable U.S. tax law, is
taxable to shareholders as ordinary income distributions.
The federal tax cost and the tax basis components of distributable earnings
were as follows:
AS OF MAY 31, 2006
Cost of investments $7,054,772,261
----------------------------------------------------------
Gross appreciation $112,435,506
Gross depreciation (469,236,718)
----------------------------------------------------------
Net unrealized appreciation (depreciation) $(356,801,212)
AS OF NOVEMBER 30, 2005
Capital loss carryforwards (4,447,639,027)
Post-October capital loss deferral (5,182,105)
Other temporary differences (1,690,573)
Net unrealized appreciation (depreciation) (148,259,254)
The aggregate cost above includes prior fiscal year end tax adjustments.
As of November 30, 2005, the fund had available capital loss carryforwards to
offset future realized gains. Such losses expire as follows:
November 30, 2009 $(2,147,917,828)
November 30, 2010 $(2,299,721,199)
--------------------------------------------------
$(4,447,639,027)
MULTIPLE CLASSES OF SHARES OF BENEFICIAL INTEREST - The fund offers multiple
classes of shares, which differ in their respective distribution and service
fees. All shareholders bear the common expenses of the fund based on daily net
assets of each class, without distinction between share classes. Dividends are
declared separately for each class. Differences in per share dividend rates
are generally due to differences in separate class expenses. Class B and Class
529B shares will convert to Class A and Class 529A shares, respectively
approximately eight years after purchase.
(3) TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISER - The fund has an investment advisory agreement with MFS to
provide overall investment advisory and administrative services, and general
office facilities. The management fee is computed daily and paid monthly at an
annual rate of 0.33% of the fund's average daily net assets.
DISTRIBUTOR - MFS Fund Distributors, Inc. (MFD), a wholly owned subsidiary of
MFS, as distributor, received $122,037 and $1,334 for the six months ended May
31, 2006, as its portion of the initial sales charge on sales of Class A and
Class 529A shares of the fund, respectively.
The Board of Trustees has adopted a distribution plan for certain class shares
pursuant to Rule 12b-1 of the Investment Company Act of 1940.
The fund's distribution plan provides that the fund will pay MFD for services
provided by MFD and financial intermediaries in connection with the
distribution and servicing of certain share classes. One component of the plan
is a distribution fee paid to MFD and another component of the plan is a
service fee paid to MFD. MFD may subsequently pay all, or a portion, of the
distribution and/or service fees to financial intermediaries.
Distribution Fee Plan Table:
TOTAL ANNUAL DISTRIBUTION
DISTRIBUTION SERVICE DISTRIBUTION EFFECTIVE AND SERVICE
FEE RATE FEE RATE PLAN(d) RATE(e) FEE
Class A 0.10% 0.25% 0.35% 0.35% $7,971,545
Class B 0.75% 0.25% 1.00% 1.00% 9,214,249
Class C 0.75% 0.25% 1.00% 1.00% 2,750,620
Class J(f) 0.75% 0.25% 1.00% 1.00% 8,552
Class R 0.25% 0.25% 0.50% 0.50% 133,524
Class R1 0.50% 0.25% 0.75% 0.75% 4,947
Class R2 0.25% 0.25% 0.50% 0.50% 886
Class R3 0.25% 0.25% 0.50% 0.50% 14,424
Class R4 -- 0.25% 0.25% 0.25% 5,716
Class 529A 0.25% 0.25% 0.50% 0.35% 6,060
Class 529B 0.75% 0.25% 1.00% 1.00% 3,071
Class 529C 0.75% 0.25% 1.00% 1.00% 4,936
- ---------------------------------------------------------------------------------------------------------------------
Total Distribution and Service Fees $20,118,530
(d) 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.
(e) The annual effective rates represent actual fees incurred under the distribution plan for the six months ended
May 31, 2006 based on each class' average daily net assets. Assets attributable to Class A shares sold prior to
March 1, 1991 are subject to a service fee of 0.15% annually. 0.10% of the Class 529A distribution fee is
currently being paid by the fund. Payment of the remaining 0.15% of the Class 529A distribution fee is not yet
implemented and will commence on such date as the fund's Board of Trustees may determine.
(f) Includes fees that MFD pays to financial intermediaries and for services rendered as the fund's agent company in
Japan.
Certain Class A, Class C and Class 529C shares are subject to a contingent
deferred sales charge in the event of a shareholder redemption within 12
months of purchase. Class B and Class 529B shares are subject to a contingent
deferred sales charge in the event of a shareholder redemption within six
years of purchase. All contingent deferred sales charges are paid to MFD and
during the six months ended May 31, 2006, were as follows:
AMOUNT
Class A $43,967
Class B 1,510,133
Class C 23,808
Class 529B 117
Class 529C --
The fund has entered into and may from time to time enter into contracts with
program managers and other parties which administer the tuition programs
through which an investment in the fund's 529 share classes is made. The fund
has entered into an agreement with MFD pursuant to which MFD receives an
annual fee of up to 0.35% from the fund based solely upon the value of the
fund's 529 share classes attributable to tuition programs to which MFD, or a
third party which contracts with MFD, provides administrative services. The
current fee has been established at 0.25% annually of average net assets of
the fund's 529 share classes. The fee may only be increased with the approval
of the Board of Trustees who oversees the fund. The services provided by MFD,
or a third party with which MFD contracts, include recordkeeping and tax
reporting and account services, as well as services designed to maintain the
program's compliance with the Internal Revenue Code and other regulatory
requirements. Program manager fees for the six months ended May 31, 2006, were
as follows:
AMOUNT
Class 529A $4,329
Class 529B 768
Class 529C 1,234
--------------------------------------------------
Total Program Manager Fees $6,331
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 May 31, 2006, the fee was $3,552,500, which equated
to 0.0980% 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 May 31, 2006, these costs
amounted to $4,114,372.
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 May
31, 2006 was equivalent to an annual effective rate of 0.0065% 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 May 31,
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(g) AMOUNT
Class R1 0.45% 0.35% $2,968
Class R2 0.40% 0.25% 709
Class R3 0.25% 0.15% 7,212
Class R4 0.15% 0.15% 3,429
Class R5 0.10% 0.10% 55,057
- -------------------------------------------------------------------------------
Total Retirement Plan Administration
and Services Fees $69,375
(g) 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 May 31, 2006, this waiver amounted to $3,810 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 certain retired Independent
Trustees which resulted in a pension expense of $7,160. The fund also has an
unfunded retirement benefit deferral plan for certain Independent Trustees
which resulted in an expense of $9,720. Both amounts are included in
Independent trustees' compensation for the six months ended May 31, 2006. The
deferred liability for retirement benefits payable to certain Trustees under
both plans amounted to $219,211 at May 31, 2006, and is included in payable
for independent trustees' compensation.
DEFERRED TRUSTEE COMPENSATION - Under a Deferred Compensation Plan (the Plan)
Independent Trustees previously were allowed to elect to defer receipt of all
or a portion of their annual compensation. Trustees are no longer allowed to
defer compensation under the Plan. Amounts previously deferred are treated as
though equivalent dollar amounts had been invested in shares of the fund or
other MFS funds selected by the Trustee. Deferred amounts represent an
unsecured obligation of the fund until distributed in accordance with the
Plan. Included in other assets and payable for independent trustees'
compensation is $72,046 of Deferred Trustees' Compensation.
OTHER - This fund and certain other MFS funds (the funds) have entered into a
services agreement (the Agreement) which provides for payment of fees by the
funds to Tarantino LLC in return for the provision of services of an
Independent Chief Compliance Officer (ICCO) for the funds. The ICCO is an
officer of the funds and the sole member of Tarantino LLC. The funds can
terminate the Agreement with Tarantino LLC at any time under the terms of the
Agreement. For the six months ended May 31, 2006, the fee paid to Tarantino
LLC was $31,171. MFS has agreed to reimburse the fund for a portion of the
payments made by the funds to Tarantino LLC in the amount of $25,681, 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
$3,960,258,227 and $4,916,728,079, 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
MAY 31, 2006 NOVEMBER 30, 2005 (i)
SHARES AMOUNT SHARES AMOUNT
Shares sold
Class A 27,935,035 $367,152,914 55,645,086 $676,685,537
Class B 2,957,780 35,492,234 7,838,909 87,410,962
Class C 1,248,473 14,905,192 3,949,856 43,910,441
Class I 1,220,569 16,349,205 2,570,105 31,792,172
Class J 8,700 103,683 158,188 1,753,770
Class R 612,113 8,042,425 2,787,174 33,440,279
Class R1 74,255 893,157 102,839 1,166,806
Class R2 31,192 374,654 45,105 518,278
Class R3 345,842 4,514,313 389,440 4,803,665
Class R4 563,096 7,432,718 102,545 1,274,648
Class R5 3,179,836 42,265,327 7,794,198 95,886,699
Class 529A 40,838 531,057 118,438 1,426,324
Class 529B 3,345 39,736 10,421 114,047
Class 529C 7,409 88,054 17,579 195,384
- --------------------------------------------------------------------------------------------------------
38,228,483 $498,184,669 81,529,883 $980,379,012
Shares issued to shareholders
in reinvestment of distributions
Class A -- $-- 1,444,585 $17,624,039
Class I -- -- 74,150 917,235
Class R -- -- 9,046 110,345
Class R3 -- -- 500 6,052
Class 529A -- -- 638 7,734
- --------------------------------------------------------------------------------------------------------
-- $-- 1,528,919 $18,665,405
Shares reacquired
Class A (74,529,760) $(979,425,868) (150,046,165) $(1,830,111,618)
Class B (30,490,770) (365,397,555) (62,980,210) (704,001,606)
Class C (9,150,172) (109,266,014) (21,936,036) (243,908,986)
Class I (3,288,443) (44,116,952) (4,244,673) (52,647,907)
Class J (43,410) (512,500) (697,540) (7,724,445)
Class R (590,493) (7,743,700) (1,201,977) (14,737,604)
Class R1 (16,921) (203,690) (16,346) (189,267)
Class R2 (26,110) (316,530) (21,634) (241,727)
Class R3 (92,591) (1,208,549) (116,199) (1,438,617)
Class R4 (76,179) (1,004,752) (22,985) (286,201)
Class R5 (1,539,226) (19,968,755) (173,910) (2,191,260)
Class 529A (15,557) (202,858) (41,544) (499,007)
Class 529B (1,355) (16,020) (3,697) (40,871)
Class 529C (4,850) (57,276) (5,956) (66,391)
- ---------------------------------------------------------------------------------------------------------
(119,865,837) $(1,529,441,019) (241,508,872) $(2,858,085,507)
Net change
Class A (46,594,725) $(612,272,954) (92,956,494) $(1,135,802,042)
Class B (27,532,990) (329,905,321) (55,141,301) (616,590,644)
Class C (7,901,699) (94,360,822) (17,986,180) (199,998,545)
Class I (2,067,874) (27,767,747) (1,600,418) (19,938,500)
Class J (34,710) (408,817) (539,352) (5,970,675)
Class R 21,620 298,725 1,594,243 18,813,020
Class R1 57,334 689,467 86,493 977,539
Class R2 5,082 58,124 23,471 276,551
Class R3 253,251 3,305,764 273,741 3,371,100
Class R4 486,917 6,427,966 79,560 988,447
Class R5 1,640,610 22,296,572 7,620,288 93,695,439
Class 529A 25,281 328,199 77,532 935,051
Class 529B 1,990 23,716 6,724 73,176
Class 529C 2,559 30,778 11,623 128,993
- ---------------------------------------------------------------------------------------------------------
(81,637,354) $(1,031,256,350) (158,450,070) $(1,859,041,090)
(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
committed line of credit provided by a syndication of banks under a credit
agreement. In addition, the fund and other affiliated funds have established
uncommitted borrowing arrangements with certain banks. 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
committed 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 May 31, 2006 was $32,539 and is included in miscellaneous
expense on the Statement of Operations. The fund had no significant borrowings
during the six months ended May 31, 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.
MIG-SEM-07/06 470M
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) MASSACHUSETTS INVESTORS GROWTH STOCK FUND
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By (Signature and Title)* MARIA F. DWYER
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Maria F. Dwyer, President
Date: July 21, 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: July 21, 2006
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By (Signature and Title)* TRACY ATKINSON
-----------------------------------------------------
Tracy Atkinson, Treasurer (Principal Financial Officer
and Accounting Officer)
Date: July 21, 2006
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* Print name and title of each signing officer under his or her signature.