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 811-2464
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MFS SERIES TRUST IX
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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: October 31*
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Date of reporting period: April 30, 2007
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* This Form N-CSR filing pertains to the MFS Inflation-Adjusted Bond Fund, a
series of the Registrant. The remaining series of the Registrant do not have a
fiscal year end of October 31.
ITEM 1. REPORTS TO STOCKHOLDERS.
M F S(R)
INVESTMENT MANAGEMENT
[graphic omitted]
SEMIANNUAL REPORT
MFS(R) INFLATION-ADJUSTED BOND FUND
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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STATEMENT OF ASSETS AND LIABILITIES 7
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STATEMENT OF OPERATIONS 10
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STATEMENTS OF CHANGES IN NET ASSETS 11
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FINANCIAL HIGHLIGHTS 12
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NOTES TO FINANCIAL STATEMENTS 22
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BOARD REVIEW OF INVESTMENT ADVISORY AGREEMENT 34
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PROXY VOTING POLICIES AND INFORMATION 34
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QUARTERLY PORTFOLIO DISCLOSURE 34
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CONTACT INFORMATION BACK COVER
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THE REPORT IS PREPARED FOR THE GENERAL INFORMATION OF SHAREHOLDERS. IT IS
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY WHEN PRECEDED OR
ACCOMPANIED BY A CURRENT PROSPECTUS.
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NOT FDIC INSURED o MAY LOSE VALUE o
NO BANK OR CREDIT UNION GUARANTEE o NOT A DEPOSIT o
NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY OR
NCUA/NCUSIF
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4/30/07
IAB-SEM
LETTER FROM THE CEO
[Photo of Robert J. Manning]
Dear Shareholders:
The past year has been a great example of why investors should keep their eyes
on the long term.
In 2006 the Dow Jones Industrial Average returned 19%. As of mid-May 2007, it
had returned another 8% and continued to reach new highs. But the Dow's upward
rise has not been without hiccups. After hitting new records in February, the
Dow lost 5.8% between February 20 and March 5, as stocks were sold off around
the globe. As we have said before, markets are volatile, and investors should
make sure they have an investment plan that can carry them through the peaks
and troughs.
If you are focused on a long-term investment strategy, the short-term ups and
downs of the markets should not necessarily dictate portfolio action on your
part. Both the bond and stock markets are cyclical. In our view, investors who
remain committed to a long-term plan are more likely to achieve their financial
goals. We believe you should not let the headlines guide you in your investment
decisions and should be cautious about overreacting to short-term volatility.
In any market environment, we believe individual investors are best served by
following a three-pronged investment strategy of allocating their holdings
across the major asset classes, diversifying within each class, and regularly
rebalancing their portfolios to maintain their desired allocations. Of course,
these strategies cannot guarantee a profit or protect against a loss. Investing
and planning for the long term require diligence and patience, two traits that
in our experience are essential to capitalizing on the many opportunities the
financial markets can offer -- through both up and down economic cycles.
Respectfully,
/s/ Robert J. Manning
Robert J. Manning
Chief Executive Officer and Chief Investment Officer
MFS Investment Management(R)
June 15, 2007
The opinions expressed in this letter are subject to change, may not be relied
upon for investment advice, and no forecasts can be guaranteed.
PORTFOLIO COMPOSITION
PORTFOLIO STRUCTURE(i)
Bonds 95.9%
Cash & Other Net Assets 4.1%
FIXED INCOME SECTORS (i)
U.S. Treasury Securities 95.9%
------------------------------------------------
CREDIT QUALITY OF BONDS (r)
AAA 100.0%
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PORTFOLIO FACTS
Average Duration (d)(i) 6.2
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Average Life (i)(m) 9.8 yrs
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Average Maturity (i)(m) 10.0 yrs
------------------------------------------------
Average Credit Quality of Rated
Securities (long-term) (a) AAA
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Average Credit Quality of Rated
Securities (short-term) (a) A-1
------------------------------------------------
(a) The average credit quality of rated securities is based upon a market
weighted average of portfolio holdings that are rated by public rating
agencies.
(d) Duration is a measure of how much a bond's price is likely to fluctuate
with general changes in interest rates, e.g., if rates rise 1.00%, a bond
with a 5-year duration is likely to lose about 5.00% of its value.
(i) For purposes of this presentation, the bond component includes both accrued
interest amounts and the equivalent exposure from any derivative holdings,
if applicable.
(m) The average maturity shown is calculated using the final stated maturity on
the portfolio's holdings without taking into account any holdings which
have been pre- refunded or pre-paid to an earlier date or which have a
mandatory put date prior to the stated maturity. The average life shown
takes into account these earlier dates.
(r) Each security is assigned a rating from Moody's Investors Service. If not
rated by Moody's, the rating will be that assigned by Standard & Poor's.
Likewise, if not assigned a rating by Standard & Poor's, it will be based
on the rating assigned by Fitch, Inc. For those portfolios that hold a
security which is not rated by any of the three agencies, the security is
considered Not Rated. Holdings in U.S. Treasuries and government agency
mortgage-backed securities, if any, are included in the "AAA"-rating
category. Percentages are based on the total market value of investments as
of 04/30/07.
Percentages are based on net assets as of 04/30/07, unless otherwise noted.
The portfolio is actively managed and current holdings may be different.
EXPENSE TABLE
Fund expenses borne by the shareholders during the period,
November 1, 2006 through April 30, 2007.
As a shareholder of the fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on certain purchase or redemption
payments and redemption fees on certain exchanges and redemptions, and (2)
ongoing costs, including management fees; distribution and service (12b-1)
fees; and other fund expenses. This example is intended to help you understand
your ongoing costs (in dollars) of investing in the fund and to compare these
costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period November 1, 2006 through April 30,
2007.
ACTUAL EXPENSES
The first line for each share class in the following table provides information
about actual account values and actual expenses. You may use the information in
this line, together with the amount you invested, to estimate the expenses that
you paid over the period. Simply divide your account value by $1,000 (for
example, an $8,600 account value divided by $1,000 = 8.6), then multiply the
result by the number in the first line under the heading entitled "Expenses
Paid During Period" to estimate the expenses you paid on your account during
this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line for each share class in the following table provides
information about hypothetical account values and hypothetical expenses based
on the fund's actual expense ratio and an assumed rate of return of 5% per year
before expenses, which is not the fund's actual return. The hypothetical
account values and expenses may not be used to estimate the actual ending
account balance or expenses you paid for the period. You may use this
information to compare the ongoing costs of investing in the fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads) or redemption fees. Therefore, the second line for each share
class in the table is useful in comparing ongoing costs only, and will not help
you determine the relative total costs of owning different funds. In addition,
if these transactional costs were included, your costs would have been higher.
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Expenses
Paid During
Annualized Beginning Ending Period(p)
Share Expense Account Value Account Value 11/01/06-
Class Ratio 11/01/06 4/30/07 4/30/07
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Actual 0.65% $1,000.00 $1,017.50 $3.25
A ------------------------------------------------------------------------
Hypothetical (h) 0.65% $1,000.00 $1,021.57 $3.26
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Actual 1.50% $1,000.00 $1,012.20 $7.48
B -------------------------------------------------------------------------
Hypothetical (h) 1.50% $1,000.00 $1,017.36 $7.50
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Actual 1.50% $1,000.00 $1,013.20 $7.49
C ------------------------------------------------------------------------
Hypothetical (h) 1.50% $1,000.00 $1,017.36 $7.50
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Actual 0.50% $1,000.00 $1,018.30 $2.50
I ------------------------------------------------------------------------
Hypothetical (h) 0.50% $1,000.00 $1,022.32 $2.51
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Actual 1.00% $1,000.00 $1,015.70 $5.00
R -------------------------------------------------------------------------
Hypothetical (h) 1.00% $1,000.00 $1,019.84 $5.01
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Actual 1.60% $1,000.00 $1,011.70 $7.98
R1 ------------------------------------------------------------------------
Hypothetical (h) 1.60% $1,000.00 $1,016.86 $8.00
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Actual 1.25% $1,000.00 $1,014.50 $6.24
R2 ------------------------------------------------------------------------
Hypothetical (h) 1.25% $1,000.00 $1,018.60 $6.26
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Actual 1.15% $1,000.00 $1,015.00 $5.75
R3 -------------------------------------------------------------------------
Hypothetical (h) 1.15% $1,000.00 $1,019.09 $5.76
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Actual 0.90% $1,000.00 $1,016.20 $4.50
R4 ------------------------------------------------------------------------
Hypothetical (h) 0.90% $1,000.00 $1,020.33 $4.51
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Actual 0.60% $1,000.00 $1,017.80 $3.00
R5 ------------------------------------------------------------------------
Hypothetical (h) 0.60% $1,000.00 $1,021.82 $3.01
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(h) 5% class return per year before expenses.
(p) Expenses paid is equal to each class' annualized expense ratio, as shown
above, multiplied by the average account value over the period, multiplied
by the number of days in the period, divided by the number of days in the
year. Expenses paid do not include any applicable sales charges (loads) or
redemption fees. If these transaction costs had been included, your costs
would have been higher.
PORTFOLIO OF INVESTMENTS
4/30/07 (unaudited)
The Portfolio of Investments is a complete list of all securities owned by your fund. It is
categorized by broad-based asset classes.
Bonds - 98.7%
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ISSUER SHARES/PAR VALUE ($)
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U.S. Treasury Inflation Protected Securities - 98.7%
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U.S. Treasury Bonds, 2.5%, 2016 $ 764,677 $ 785,168
U.S. Treasury Bonds, 2.375%, 2025 1,376,235 1,383,492
U.S. Treasury Bonds, 2%, 2026 650,951 617,997
U.S. Treasury Bonds, 2.375%, 2027 166,472 167,701
U.S. Treasury Bonds, 3.625%, 2028 899,441 1,093,419
U.S. Treasury Bonds, 3.875%, 2029 780,963 989,383
U.S. Treasury Bonds, 3.375%, 2032 286,567 348,471
U.S. Treasury Notes, 3.875%, 2009 400,723 414,139
U.S. Treasury Notes, 4.25%, 2010 272,097 288,922
U.S. Treasury Notes, 0.875%, 2010 (f) 1,138,429 1,102,231
U.S. Treasury Notes, 3.5%, 2011 398,636 420,825
U.S. Treasury Notes, 2.375%, 2011 758,552 768,982
U.S. Treasury Notes, 3.375%, 2012 693,239 735,754
U.S. Treasury Notes, 3%, 2012 1,012,791 1,062,679
U.S. Treasury Notes, 1.875%, 2013 985,942 974,503
U.S. Treasury Notes, 2%, 2014 1,192,535 1,182,426
U.S. Treasury Notes, 2%, 2014 928,284 920,451
U.S. Treasury Notes, 1.625%, 2015 1,001,626 963,087
U.S. Treasury Notes, 1.875%, 2015 688,288 673,527
U.S. Treasury Notes, 2%, 2016 809,845 798,045
U.S. Treasury Notes, 2.375%, 2017 531,701 539,988
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TOTAL BONDS (IDENTIFIED COST, $16,007,706) $16,231,190
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Short-Term Obligations - 0.6%
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Abbey National North America LLC, 5.313%, due 5/01/07,
at Amortized Cost and Value (y) $ 108,000 $ 108,000
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TOTAL INVESTMENTS (IDENTIFIED COST, $16,115,706) (k) $16,339,190
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Other Assets, Less Liabilities - 0.7% 111,096
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NET ASSETS - 100.0% $16,450,286
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(f) All or a portion of the security has been segregated as collateral for an open futures
contract.
(k) As of April 30, 2007, the fund held securities fair valued in accordance with the policies
adopted by the Board of Trustees, aggregating $16,231,190 and 99.34% of market value. All of
these security values were provided by an independent pricing service using an evaluated
bid.
(y) The rate shown represents an annualized yield at time of purchase.
FUTURES CONTRACTS OUTSTANDING AT 4/30/07
UNREALIZED
EXPIRATION APPRECIATION
DESCRIPTION CONTRACTS VALUE DATE (DEPRECIATION)
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U.S. Treasury Bond (Short) 1 $111,750 Jun-07 $(1,441)
U.S. Treasury Note 5 yr (Short) 2 211,656 Jun-07 (694)
U.S. Treasury Note 10 yr (Short) 2 216,656 Jun-07 (523)
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$(2,658)
=======
At April 30, 2007, the fund had sufficient cash and/or other liquid securities to cover any
commitments under these derivative contracts.
SEE NOTES TO FINANCIAL STATEMENTS
Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
At 4/30/07 (unaudited)
This statement represents your fund's balance sheet, which details the assets and liabilities
comprising the total value of the fund.
ASSETS
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Investments, at value (identified cost, $16,115,706) $16,339,190
Cash 600
Receivable for fund shares sold 59,356
Interest receivable 87,118
Receivable from investment adviser 18,792
Other assets 525
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Total assets $16,505,581
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LIABILITIES
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Distributions payable $3,290
Payable for daily variation margin on open futures contracts 2,438
Payable for fund shares reacquired 6,278
Payable to affiliates
Management fee 626
Shareholder servicing costs 5,776
Distribution and service fees 803
Administrative services fee 192
Retirement plan administration and services fees 25
Payable for independent trustees' compensation 367
Accrued expenses and other liabilities 35,500
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Total liabilities $55,295
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Net assets $16,450,286
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NET ASSETS CONSIST OF:
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Paid-in capital $17,317,721
Unrealized appreciation (depreciation) on investments 220,826
Accumulated net realized gain (loss) on investments (1,106,999)
Undistributed net investment income 18,738
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Net assets $16,450,286
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Shares of beneficial interest outstanding 1,685,702
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Statement of Assets and Liabilities (unaudited) - continued
Class A shares:
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Net assets $7,183,098
Shares outstanding 736,111
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Net asset value per share $9.76
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Offering price per share (100/95.25Xnet asset value per share) $10.25
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Class B shares:
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Net assets $3,647,789
Shares outstanding 373,961
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Net asset value and offering price per share $9.75
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Class C shares:
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Net assets $2,028,267
Shares outstanding 207,574
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Net asset value and offering price per share $9.77
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Class I shares:
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Net assets $2,280,862
Shares outstanding 233,777
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Net asset value, offering price, and redemption price per share $9.76
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Class R shares:
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Net assets $132,734
Shares outstanding 13,597
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Net asset value, offering price, and redemption price per share $9.76
- -------------------------------------------------------------------------------------------------
Class R1 shares:
- -------------------------------------------------------------------------------------------------
Net assets $288,016
Shares outstanding 29,531
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Net asset value, offering price, and redemption price per share $9.75
- -------------------------------------------------------------------------------------------------
Class R2 shares:
- -------------------------------------------------------------------------------------------------
Net assets $69,495
Shares outstanding 7,123
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Net asset value, offering price, and redemption price per share $9.76
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Class R3 shares:
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Net assets $433,272
Shares outstanding 44,384
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Net asset value, offering price, and redemption price per share $9.76
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Statement of Assets and Liabilities (unaudited) - continued
Class R4 shares:
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Net assets $334,019
Shares outstanding 34,239
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Net asset value, offering price, and redemption price per share $9.76
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Class R5 shares:
- -------------------------------------------------------------------------------------------------
Net assets $52,734
Shares outstanding 5,405
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Net asset value, offering price, and redemption price per share $9.76
- -------------------------------------------------------------------------------------------------
On sales of $50,000 or more, the offering price of Class A shares is reduced. A contingent
deferred sales charge may be imposed on redemptions of Class A, Class B, and Class C shares.
SEE NOTES TO FINANCIAL STATEMENTS
Financial Statements
STATEMENT OF OPERATIONS
Six months ended 4/30/07 (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.
NET INVESTMENT INCOME
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Interest income $161,670
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Expenses
Management fee $41,669
Distribution and service fees 46,571
Shareholder servicing costs 13,508
Administrative services fee 8,679
Retirement plan administration and services fees 1,374
Independent trustees' compensation 701
Custodian fee 17,983
Shareholder communications 14,198
Auditing fees 16,275
Legal fees 329
Registration fees 41,759
Miscellaneous 5,921
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Total expenses $208,967
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Fees paid indirectly (866)
Reduction of expenses by investment adviser
and distributor (127,004)
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Net expenses $81,097
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Net investment income $80,573
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REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
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Realized gain (loss) (identified cost basis)
Investment transactions $12,078
Futures contracts (1,406)
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Net realized gain (loss) on investments $10,672
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Change in unrealized appreciation (depreciation)
Investments $143,180
Futures contracts (2,658)
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Net unrealized gain (loss) on investments $140,522
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Net realized and unrealized gain (loss) on investments $151,194
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Change in net assets from operations $231,767
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SEE NOTES TO FINANCIAL STATEMENTS
Financial Statements
STATEMENTS OF CHANGES IN NET ASSETS
These statements describe the increases and/or decreases in net assets resulting from
operations, any distributions, and any shareholder transactions.
SIX MONTHS ENDED YEAR ENDED
4/30/07 10/31/06
CHANGE IN NET ASSETS FROM OPERATIONS (UNAUDITED)
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Net investment income $80,573 $971,035
Net realized gain (loss) on investments 10,672 (924,392)
Net unrealized gain (loss) on investments 140,522 393,630
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Change in net assets from operations $231,767 $440,273
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DISTRIBUTIONS DECLARED TO SHAREHOLDERS
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From net investment income
Class A $(76,076) $(544,885)
Class B (24,366) (183,309)
Class C (13,191) (102,520)
Class I (21,268) (74,557)
Class R (1,175) (5,978)
Class R1 (1,387) (5,167)
Class R2 (451) (2,109)
Class R3 (3,061) (12,912)
Class R4 (2,568) (4,929)
Class R5 (541) (2,450)
From net realized gain on investments
Class A -- (4,069)
Class B -- (1,584)
Class C -- (919)
Class I -- (428)
Class R -- (42)
Class R1 -- (27)
Class R2 -- (16)
Class R3 -- (82)
Class R4 -- (17)
Class R5 -- (16)
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Total distributions declared to shareholders $(144,084) $(946,016)
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Change in net assets from fund share transactions $(1,088,130) $(165,270)
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Total change in net assets $(1,000,447) $(671,013)
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NET ASSETS
- ---------------------------------------------------------------------------------------------
At beginning of period 17,450,733 18,121,746
At end of period (including undistributed net investment
income of $18,738 and $82,249, respectively) $16,450,286 $17,450,733
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SEE NOTES TO FINANCIAL STATEMENTS
Financial Statements
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the fund's financial performance for the
semiannual period and the past 5 fiscal years (or life of a particular share class, if shorter). Certain information
reflects financial results for a single fund share. The total returns in the table represent the rate by which an
investor would have earned (or lost) on an investment in the fund share class (assuming reinvestment of all
distributions) held for the entire period.
SIX MONTHS YEARS ENDED 10/31
ENDED -------------------------------- YEAR ENDED
CLASS A 4/30/07 2006 2005 2004(z) 4/30/04(c)
(UNAUDITED)
Net asset value, beginning of period $9.69 $9.92 $10.24 $9.85 $10.00
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INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.06 $0.48 $0.46 $0.20 $0.16
Net realized and unrealized gain (loss) on investments 0.11 (0.24) (0.27) 0.40 (0.13)
- ----------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.17 $0.24 $0.19 $0.60 $0.03
- ----------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.10) $(0.47) $(0.51) $(0.21) $(0.18)
From net realized gain on investments -- (0.00)(w) -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.10) $(0.47) $(0.51) $(0.21) $(0.18)
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.76 $9.69 $9.92 $10.24 $9.85
- ----------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s)(t) 1.75(n) 2.49 1.85 6.09(n) 0.33(n)
- ----------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 2.28(a) 2.29 3.22 17.87(a) 5.20(a)
Expenses after expense reductions (f) 0.65(a) 0.65 0.64 0.55(a) 0.50(a)
Net investment income 1.25(a) 4.89 4.64 3.93(a) 2.72(a)
Portfolio turnover 33 231 203 90 141
Net assets at end of period (000 omitted) $7,183 $7,698 $8,831 $647 $503
- ----------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED --------------------------------
CLASS B 4/30/07 2006 2005 2004(i)
(UNAUDITED)
Net asset value, beginning of period $9.69 $9.92 $10.23 $10.20
- --------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.02 $0.40 $0.37 $0.00(w)
Net realized and unrealized gain (loss) on investments 0.10 (0.25) (0.26) 0.08
- --------------------------------------------------------------------------------------------------------------
Total from investment operations $0.12 $0.15 $0.11 $0.08
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------------------
From net investment income $(0.06) $(0.38) $(0.42 $(0.05)
From net realized gain on investments -- (0.00)(w) --
- --------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.06) $(0.38) $(0.42) $(0.05)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.75 $9.69 $9.92 $10.23
- --------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s)(t) 1.22(n) 1.63 1.04 0.82(n)
- --------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND SUPPLEMENTAL DATA:
- --------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 2.93(a) 2.88 3.87 18.54(a)
Expenses after expense reductions (f) 1.50(a) 1.50 1.49 1.52(a)
Net investment income 0.32(a) 4.16 3.69 0.26(a)
Portfolio turnover 33 231 203 90
Net assets at end of period (000 omitted) $3,648 $4,437 $4,818 $310
- --------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED --------------------------------
CLASS C 4/30/07 2006 2005 2004(i)
(UNAUDITED)
Net asset value, beginning of period $9.70 $9.94 $10.24 $10.20
- --------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) (d) $0.02 $0.40 $0.38 $(0.00)(w)
Net realized and unrealized gain (loss) on investments 0.11 (0.26) (0.26) 0.09
- --------------------------------------------------------------------------------------------------------------
Total from investment operations $0.13 $0.14 $0.12 $0.09
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------------------
From net investment income $(0.06) $(0.38) $(0.42) $(0.05)
From net realized gain on investments -- (0.00)(w) -- --
- --------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.06) $(0.38) $(0.42) $(0.05)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.77 $9.70 $9.94 $10.24
- --------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s)(t) 1.32(n) 1.53 1.15 0.92(n)
- --------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- --------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 2.93(a) 2.90 3.87 18.51(a)
Expenses after expense reductions (f) 1.50(a) 1.50 1.49 1.49(a)
Net investment income (loss) 0.35(a) 4.11 3.74 (0.17)(a)
Portfolio turnover 33 231 203 90
Net assets at end of period (000 omitted) $2,028 $2,294 $2,548 $85
- --------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED -------------------------------- YEAR ENDED
CLASS I 4/30/07 2006 2005 2004(z) 4/30/04(c)
(UNAUDITED)
Net asset value, beginning of period $9.69 $9.92 $10.24 $9.85 $10.00
- ----------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.09 $0.51 $0.43 $0.20 $0.16
Net realized and unrealized gain (loss) on investments 0.09 (0.26) (0.22) 0.40 (0.13)
- ----------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.18 $0.25 $0.21 $0.60 $0.03
- ----------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.11) $(0.48) $(0.53) $(0.21) $(0.18)
From net realized gain on investments -- (0.00)(w) -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.11) $(0.48) $(0.53) $(0.21) $(0.18)
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.76 $9.69 $9.92 $10.24 $9.85
- ----------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 1.83(n) 2.65 2.02 6.12(n) 0.33(n)
- ----------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.93(a) 1.87 2.88 17.52(a) 4.86(a)
Expenses after expense reductions (f) 0.50(a) 0.50 0.50 0.50(a) 0.50(a)
Net investment income 1.80(a) 5.26 4.23 4.01(a) 2.74(a)
Portfolio turnover 33 231 203 90 141
Net assets at end of period (000 omitted) $2,281 $1,932 $1,339 $1,382 $1,044
- ----------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED --------------------------------
CLASS R 4/30/07 2006 2005 2004(i)
(UNAUDITED)
Net asset value, beginning of period $9.69 $9.93 $10.24 $10.20
- --------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.05 $0.45 $0.42 $0.00(w)
Net realized and unrealized gain (loss) on investments 0.10 (0.26) (0.26) 0.10
- --------------------------------------------------------------------------------------------------------------
Total from investment operations $0.15 $0.19 $0.16 $0.10
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------------------
From net investment income $(0.08) $(0.43) $(0.47) $(0.06)
From net realized gain on investments -- (0.00)(w) -- --
- --------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.08) $(0.43) $(0.47) $(0.06)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.76 $9.69 $9.93 $10.24
- --------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 1.57(n) 2.03 1.58 1.01(n)
- --------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND SUPPLEMENTAL DATA:
- --------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 2.43(a) 2.39 3.38 18.02(a)
Expenses after expense reductions (f) 1.00(a) 1.00 1.00 1.00(a)
Net investment income 0.96(a) 4.68 4.15 0.15(a)
Portfolio turnover 33 231 203 90
Net assets at end of period (000 omitted) $133 $146 $129 $40
- --------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED --------------------
CLASS R1 4/30/07 2006 2005(i)
(UNAUDITED)
Net asset value, beginning of period $9.69 $9.92 $10.10
- --------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------------------------
Net investment income (d) $0.05 $0.43 $0.24
Net realized and unrealized gain (loss) on investments 0.06 (0.29) (0.19)
- --------------------------------------------------------------------------------------------------
Total from investment operations $0.11 $0.14 $0.05
- --------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------
From net investment income $(0.05) $(0.37) $(0.23)
From net realized gain on investments -- (0.00)(w) --
- --------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.05) $(0.37) $(0.23)
- --------------------------------------------------------------------------------------------------
Net asset value, end of period $9.75 $9.69 $9.92
- --------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 1.17(n) 1.53 0.47(n)
- --------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND SUPPLEMENTAL DATA:
- --------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 3.12(a) 2.96 4.08(a)
Expenses after expense reductions (f) 1.60(a) 1.60 1.69(a)
Net investment income 0.98(a) 4.44 3.97(a)
Portfolio turnover 33 231 203
Net assets at end of period (000 omitted) $288 $233 $50
- --------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED --------------------
CLASS R2 4/30/07 2006 2005(i)
(UNAUDITED)
Net asset value, beginning of period $9.69 $9.92 $10.10
- --------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------------------------
Net investment income (d) $0.06 $0.43 $0.25
Net realized and unrealized gain (loss) on investments 0.08 (0.25) (0.18)
- --------------------------------------------------------------------------------------------------
Total from investment operations $0.14 $0.18 $0.07
- --------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------
From net investment income $(0.07) $(0.41) $(0.25)
From net realized gain on investments -- (0.00)(w) --
- --------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.07) $(0.41) $(0.25)
- --------------------------------------------------------------------------------------------------
Net asset value, end of period $9.76 $9.69 $9.92
- --------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 1.45(n) 1.88 0.65(n)
- --------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND SUPPLEMENTAL DATA:
- --------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 2.81(a) 2.79 3.78(a)
Expenses after expense reductions (f) 1.25(a) 1.25 1.38(a)
Net investment income 1.17(a) 4.43 4.29(a)
Portfolio turnover 33 231 203
Net assets at end of period (000 omitted) $69 $52 $50
- --------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED --------------------------------
CLASS R3 4/30/07 2006 2005 2004(i)
(UNAUDITED)
Net asset value, beginning of period $9.69 $9.93 $10.24 $10.20
- ----------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------------------------------
Net investment income (loss) (d) $0.05 $0.46 $0.29 $(0.00)(w)
Net realized and unrealized gain (loss) on investments 0.09 (0.28) (0.15)(g) 0.10
- ----------------------------------------------------------------------------------------------------------------
Total from investment operations $0.14 $0.18 $0.14 $0.10
- ----------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------------------
From net investment income $(0.07) $(0.42) $(0.45) $(0.06)
From net realized gain on investments -- (0.00)(w) -- --
- ----------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.07) $(0.42) $(0.45) $(0.06)
- ----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.76 $9.69 $9.93 $10.24
- ----------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 1.50(n) 1.88 1.32 0.96(n)
- ----------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 2.67(a) 2.66 3.59 18.27(a)
Expenses after expense reductions (f) 1.15(a) 1.15 1.21 1.25(a)
Net investment income (loss) 1.15(a) 4.73 3.77 (0.10)(a)
Portfolio turnover 33 231 203 90
Net assets at end of period (000 omitted) $433 $372 $255 $40
- ----------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED --------------------
CLASS R4 4/30/07 2006 2005(i)
(UNAUDITED)
Net asset value, beginning of period $9.69 $9.92 $10.10
- --------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------------------------
Net investment income (d) $0.06 $0.50 $0.28
Net realized and unrealized gain (loss) on investments 0.10 (0.29) (0.18)
- --------------------------------------------------------------------------------------------------
Total from investment operations $0.16 $0.21 $0.10
- --------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------
From net investment income $(0.09) $(0.44) $(0.28)
From net realized gain on investments -- (0.00)(w) --
- --------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.09) $(0.44) $(0.28)
- --------------------------------------------------------------------------------------------------
Net asset value, end of period $9.76 $9.69 $9.92
- --------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 1.62(n) 2.24 0.93(n)
- --------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND SUPPLEMENTAL DATA:
- --------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 2.34(a) 2.28 3.28(a)
Expenses after expense reductions (f) 0.90(a) 0.90 0.90(a)
Net investment income 1.36(a) 5.16 4.76(a)
Portfolio turnover 33 231 203
Net assets at end of period (000 omitted) $334 $236 $50
- --------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED --------------------
CLASS R5 4/30/07 2006 2005(i)
(UNAUDITED)
Net asset value, beginning of period $9.69 $9.92 $10.10
- --------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------------------------
Net investment income (d) $0.07 $0.49 $0.30
Net realized and unrealized gain (loss) on investments 0.10 (0.25) (0.19)
- --------------------------------------------------------------------------------------------------
Total from investment operations $0.17 $0.24 $0.11
- --------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------
From net investment income $(0.10) $(0.47) $(0.29)
From net realized gain on investments -- (0.00)(w) --
- --------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.10) $(0.47) $(0.29)
- --------------------------------------------------------------------------------------------------
Net asset value, end of period $9.76 $9.69 $9.92
- --------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 1.78(n) 2.54 1.10(n)
- --------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND SUPPLEMENTAL DATA:
- --------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 2.03(a) 1.99 2.98(a)
Expenses after expense reductions (f) 0.60(a) 0.60 0.60(a)
Net investment income 1.51(a) 5.08 5.06(a)
Portfolio turnover 33 231 203
Net assets at end of period (000 omitted) $53 $52 $51
- --------------------------------------------------------------------------------------------------
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.
(c) For the period from the commencement of the fund's investment operations, September 30, 2003,
through the stated period end.
(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 per share amount of realized
and unrealized gains and losses at such time.
(i) For the period from the class' inception, September 1, 2004 (Classes B, C, R, and R3), and
April 1, 2005 (Classes R1, R2, R4, and R5) through the stated period end.
(n) Not annualized.
(r) Certain expenses have been reduced without which performance would have been lower.
(s) From time to time the fund may receive proceeds from litigation settlements, without which
performance would be lower.
(t) Total returns do not include any applicable sales charges.
(w) Per share amount was less than $0.01.
(z) During 2004, the fund changed its fiscal year-end from April 30 to October 31.
SEE NOTES TO FINANCIAL STATEMENTS
NOTES TO FINANCIAL STATEMENTS
(unaudited)
(1) BUSINESS AND ORGANIZATION
MFS Inflation-Adjusted Bond Fund (the fund) is a series of MFS Series Trust IX
(the trust). The trust is organized as a Massachusetts business trust and is
registered under the Investment Company Act of 1940, as amended, as an open-
end management investment company.
(2) SIGNIFICANT ACCOUNTING POLICIES
GENERAL - The preparation of financial statements in conformity with U.S.
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities, and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
INVESTMENT VALUATIONS - Debt instruments (other than short-term instruments),
including restricted debt instruments, are generally valued at an evaluated or
composite bid as reported by an independent pricing service. Short-term
instruments with a maturity at issuance of 60 days or less may be valued at
amortized cost, which approximates market value. Exchange-traded options are
generally valued at the last sale or official closing price as reported by an
independent pricing service on the exchange on which such options are primarily
traded. Exchange-traded options for which there were no sales reported that day
are generally valued at the last daily bid quotation as reported by an
independent pricing service on the exchange on which such options are primarily
traded. Options not traded on an exchange are generally valued at a
broker-dealer bid quotation. Foreign currency options are generally valued
using an external pricing model that uses market data from an independent
source. Futures contracts are generally valued at last posted settlement price
as reported by an independent pricing service on the market on which they are
primarily traded. Futures contracts for which there were no trades that day for
a particular position are generally valued at the closing bid quotation as
reported by an independent pricing service on the market on which such futures
contracts are primarily traded. 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. Values obtained from pricing services can
utilize both dealer-supplied valuations and electronic data processing
techniques, which take into account factors such as institutional-size trading
in similar groups of securities, yield, quality, coupon rate, maturity, type of
issue, trading characteristics, and other market data.
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 and certain types of derivatives.
These investments are generally valued at fair value based on information from
independent pricing services. 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 securities may often be valued at fair value.
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 September 2006, FASB Statement No. 157, Fair Value Measurements (the
"Statement") was issued, and is effective for fiscal years beginning after
November 15, 2007 and for all interim periods within those fiscal years. This
Statement provides a single definition of fair value, a hierarchy for measuring
fair value and expanded disclosures about fair value measurements. Management
is evaluating the application of the Statement to the fund, and believes the
impact will be limited to expanded disclosures resulting from the adoption of
this Statement in the fund's financial statements.
In February 2007, the FASB issued Statement of Financial Accounting Standards
No. 159 (FAS 159) "The Fair Value Option for Financial Assets and Financial
Liabilities - including an amendment of FASB Statement No. 115." FAS 159
permits entities to elect to measure certain financial assets and liabilities
at fair value. Unrealized gains and losses on items for which the fair value
option has been elected will be reported in earnings at each subsequent
reporting date. FAS 159 is effective for fiscal years beginning after November
15, 2007. Management is evaluating the application of the Statement to the fund
and its impact on the fund's financial statements, if any, has not been
determined.
INFLATION-ADJUSTED DEBT SECURITIES - The fund invests in inflation-adjusted
debt securities issued by the U.S. Treasury. The fund may also invest in
inflation-adjusted debt securities issued by U.S. Government agencies and
instrumentalities other than the U.S. Treasury and by other entities such as
U.S. and foreign corporations and foreign governments. The principal value of
these debt securities is adjusted by references to changes in the Consumer
Price Index or another general price or wage index. These debt securities
typically pay a fixed rate of interest, but this fixed rate is applied to the
inflation-adjusted principal amount. The principal paid at maturity of the debt
security is typically equal to the inflation-adjusted principal amount, or the
security's original par value, whichever is greater. Other types of
inflation-adjusted securities may use other methods to adjust for other
measures of inflation.
DERIVATIVE RISK - The fund may invest in derivatives for hedging or non-
hedging purposes. While hedging can reduce or eliminate losses, it can also
reduce or eliminate gains. When the fund uses derivatives as an investment to
gain market exposure, or for hedging purposes, gains and losses from derivative
instruments may be substantially greater than the derivative's original cost.
Derivative instruments include purchased options and futures contracts.
PURCHASED OPTIONS - The fund may purchase call or put options for a premium.
Purchasing call options may be a hedge against an anticipated increase in the
dollar cost of securities to be acquired or to increase the fund's exposure to
the underlying instrument. Purchasing put options may hedge against a decline
in the value of portfolio securities. The premium paid is included as an
investment in the Statement of Assets and Liabilities and is subsequently
adjusted to the current value of the option. Premiums paid for purchased
options which have expired are treated as realized losses on investments in the
Statement of Operations. Premiums paid for purchased options which are
exercised or closed are added to the amount paid or offset against the proceeds
on the underlying security or financial instrument to determine the realized
gain or loss. The risk of loss associated with purchased options is limited to
the premium paid.
FUTURES CONTRACTS - The fund may enter into futures contracts for the delayed
delivery of securities or currency, or contracts based on financial indices at
a fixed price on a future date. In entering such contracts, the fund is
required to deposit with the broker either in cash or securities an amount
equal to a certain percentage of the contract amount. Subsequent payments are
made or received by the fund each day, depending on the daily fluctuations in
the value of the contract, and are recorded for financial statement purposes as
unrealized gains or losses by the fund. Upon entering into such contracts, the
fund bears the risk of interest or exchange rates or securities prices moving
unexpectedly, in which case, the fund may not achieve the anticipated benefits
of the futures contracts and may realize a loss.
INDEMNIFICATIONS - Under the fund's organizational documents, its officers and
trustees may be indemnified against certain liabilities and expenses arising
out of the performance of their duties to the fund. Additionally, in the normal
course of business, the fund enters into agreements with service providers that
may contain indemnification clauses. The fund's maximum exposure under these
agreements is unknown as this would involve future claims that may be made
against the fund that have not yet occurred.
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.
The fund may receive proceeds from litigation settlements. Any proceeds
received from litigation involving portfolio holdings are reflected in the
Statement of Operations in realized gain/loss if the security has been disposed
of by the fund or in unrealized gain/loss if the security is still held by the
fund. Any other proceeds from litigation not related to portfolio holdings are
reflected as other income in the Statement of Operations.
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. This amount, for the six months ended April 30, 2007, is shown as a
reduction of total expenses on the Statement of Operations.
TAX MATTERS AND DISTRIBUTIONS - The fund intends 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 U.S. generally accepted accounting
principles. Certain capital accounts in the financial statements are
periodically adjusted for permanent differences in order to reflect their tax
character. These adjustments have no impact on net assets or net asset value
per share. Temporary differences which arise from recognizing certain items of
income, expense, gain or loss in different periods for financial statement and
tax purposes will reverse at some time in the future. Distributions in excess
of net investment income or net realized gains are temporary overdistributions
for financial statement purposes resulting from differences in the recognition
or classification of income or distributions for financial statement and tax
purposes.
Book/tax differences primarily relate to amortization and accretion of debt
securities and wash sale loss deferrals.
The tax character of distributions made during the current period will be
determined at fiscal year end. The tax character of distributions declared to
shareholders is as follows:
10/31/06
Ordinary income (including any
short-term capital gains) $938,888
Long-term capital gain 7,128
------------------------------------------------------------
Total distributions $946,016
The federal tax cost and the tax basis components of distributable earnings
were as follows:
AS OF 4/30/07
Cost of investments $16,493,231
------------------------------------------------------------
Gross appreciation 107,317
Gross depreciation(261,358)
------------------------------------------------------------
Net unrealized appreciation (depreciation) $(154,041)
AS OF 10/31/06
Undistributed ordinary income $132,570
Capital loss carryforwards (715,997)
Other temporary differences (68,176)
Net unrealized appreciation (depreciation) (303,315)
The aggregate cost above includes prior fiscal year end tax adjustments.
As of October 31, 2006, the fund had capital loss carryforwards available to
offset future realized gains. Such losses expire as follows:
10/31/14 $(715,997)
In June 2006, FASB Interpretation No. 48, Accounting for Uncertainty in Income
Taxes (the "Interpretation") was issued, and is effective for fiscal years
beginning after December 15, 2006 and is to be applied to all open tax years as
of the effective date. On December 22, 2006, the SEC delayed the implementation
of the Interpretation for regulated investment companies for an additional six
months. This Interpretation prescribes a minimum threshold for financial
statement recognition of the benefit of a tax position taken or expected to be
taken in a tax return, and requires certain expanded disclosures. Management
has evaluated the application of the Interpretation to the fund, and has
determined that there is no impact resulting from the adoption of this
Interpretation on the fund's financial statements.
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 the value
of settled shares outstanding of each class, without distinction between share
classes. Dividends are declared separately for each class. Differences in per
share dividend rates are generally due to differences in separate class
expenses. Class B shares will convert to Class A shares approximately eight
years after purchase.
(3) TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISER - The fund has an investment advisory agreement with
Massachusetts Financial Services Company (MFS) to provide overall investment
management and related administrative services and facilities to the fund. The
management fee is computed daily and paid monthly at an annual rate of 0.50% of
the fund's average daily net assets.
The investment adviser has agreed in writing to reduce its management fee to
0.35% of average daily net assets. This written agreement may be rescinded only
upon consent of the fund's Board of Trustees. This management fee reduction
amounted to $12,501, which is shown as a reduction of total expenses in the
Statement of Operations. The management fee incurred for the six months ended
April 30, 2007 was equivalent to an annual effective rate of 0.35% of the
fund's average daily net assets.
The investment adviser has agreed in writing to pay a portion of the fund's
operating expenses, exclusive of management, distribution and service,
retirement plan administration and services and certain other fees and
expenses, such that total operating expenses do not exceed 0.15% annually of
the fund's average daily net assets. This written agreement will continue
through February 29, 2008 unless changed or rescinded by the fund's Board of
Trustees. For the six months ended April 30, 2007, this reduction amounted to
$106,781 and is reflected as a reduction of total expenses in the Statement of
Operations.
DISTRIBUTOR - MFS Fund Distributors, Inc. (MFD), a wholly-owned subsidiary of
MFS, as distributor, received $1,279 for the six months ended April 30, 2007,
as its portion of the initial sales charge on sales of Class A shares of the
fund.
The Board of Trustees has adopted a distribution plan for certain class shares
pursuant to Rule 12b-1 of the Investment Company Act of 1940.
The fund's distribution plan provides that the fund will pay MFD for services
provided by MFD and financial intermediaries in connection with the
distribution and servicing of certain share classes. One component of the plan
is a distribution fee paid to MFD and another component of the plan is a
service fee paid to MFD. MFD may subsequently pay all, or a portion, of the
distribution and/or service fees to financial intermediaries.
Distribution Fee Plan Table:
TOTAL ANNUAL DISTRIBUTION
DISTRIBUTION SERVICE DISTRIBUTION EFFECTIVE AND SERVICE
FEE RATE FEE RATE PLAN(d) RATE(e) FEE
Class A 0.10% 0.25% 0.35% 0.15% $12,905
Class B 0.75% 0.25% 1.00% 1.00% 19,960
Class C 0.75% 0.25% 1.00% 1.00% 10,891
Class R 0.25% 0.25% 0.50% 0.50% 342
Class R1 0.50% 0.25% 0.75% 0.75% 962
Class R2 0.25% 0.25% 0.50% 0.50% 156
Class R3 0.25% 0.25% 0.50% 0.50% 992
Class R4 -- 0.25% 0.25% 0.25% 363
-------
Total Distribution and Service Fees $46,571
(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 April 30, 2007 based on each class' average daily net assets. 0.10% of the Class A
service fee is currently being waived under a written waiver arrangement through February 29, 2008.
For the six months ended April 30, 2007, this waiver amounted to $3,687 and is reflected as a
reduction of total expenses in the Statement of Operations. 0.10% of the Class A distribution fee is
currently being waived under a written waiver arrangement through February 29, 2008. For the six
months ended April 30, 2007, this waiver amounted to $3,687 and is reflected as a reduction of total
expenses in the Statement of Operations. Assets attributable to Class B shares sold prior to May 1,
2006 are subject to the 0.25% annual Class B service fee. Assets attributable to Class B shares are
currently subject to a Class B service fee of 0.15% annually. The remaining portion of the Class B
service fee is not in effect on such assets but may be implemented on such date as the fund's Board
of Trustees may determine.
Certain Class A and Class C shares are subject to a contingent deferred sales
charge in the event of a shareholder redemption within 12 months of purchase.
Class B shares are subject to a contingent deferred sales charge in the event
of a shareholder redemption within six years of purchase. All contingent
deferred sales charges are paid to MFD and during the six months ended April
30, 2007, were as follows:
AMOUNT
Class A $22
Class B $2,429
Class C $98
SHAREHOLDER SERVICING AGENT - MFS Service Center, Inc. (MFSC), a wholly-owned
subsidiary of MFS, receives a fee from the fund for its services as shareholder
servicing agent calculated as a percentage of the average daily net assets of
the fund as determined periodically under the supervision of the fund's Board
of Trustees. For the six months ended April 30, 2007, the fee was $5,342, which
equated to 0.0641% annually of the fund's average daily net assets. MFSC also
receives payment from the fund for out-of-pocket expenses, sub-accounting and
other shareholder servicing costs which may be paid to affiliated and
unaffiliated service providers. For the six months ended April 30, 2007, these
out-of-pocket expenses, sub-accounting and other shareholder servicing costs
amounted to $7,054. The fund may also pay shareholder servicing related costs
directly to non-related parties.
ADMINISTRATOR - MFS provides certain financial, legal, shareholder
communications, compliance, and other administrative services to the fund.
Under an administrative services agreement, the fund partially reimburses MFS
the costs incurred to provide these services. The fund is charged a fixed
amount plus a fee based on calendar year average net assets. The fund's annual
fixed amount is $17,500.
The administrative services fee incurred for the six months ended April 30,
2007 was equivalent to an annual effective rate of 0.1041% of the fund's
average daily net assets.
In addition to the administrative services provided by MFS to the fund as
described above, MFS is responsible for providing certain retirement plan
administration and services with respect to certain shares. These services
include various administrative, recordkeeping, and communication/educational
services with respect to the retirement plans which invest in these shares, and
may be provided directly by MFS or by a third party. MFS may subsequently pay
all, or a portion, of the retirement plan administration and services fee to
affiliated or unaffiliated third parties. For the six months ended April 30,
2007, 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:
BEGINNING OF ANNUAL
PERIOD THROUGH EFFECTIVE EFFECTIVE TOTAL
3/31/07 4/1/07 RATE(g) AMOUNT
Class R1 0.45% 0.35% 0.35% $553
Class R2 0.40% 0.25% 0.25% 117
Class R3 0.25% 0.15% 0.15% 461
Class R4 0.15% 0.15% 0.15% 218
Class R5 0.10% 0.10% 0.10% 25
- --------------------------------------------------------------------------------
Total Retirement Plan Administration and Services Fees $1,374
(g) Prior to April 1, 2007, MFS had agreed in writing 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 was discontinued on March 31, 2007. On April 1, 2007, the annual
retirement plan administration and services fee for Class R1, Class R2, and
Class R3 shares was lowered to 0.35%, 0.25%, and 0.15%, respectively. For
the six months ended April 30, 2007, the waiver amounted to $306 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.
OTHER - This fund and certain other MFS funds (the funds) have entered into a
services agreement (the Agreement) which provides for payment of fees by the
funds to Tarantino LLC in return for the provision of services of an
Independent Chief Compliance Officer (ICCO) for the funds. The ICCO is an
officer of the funds and the sole member of Tarantino LLC. The funds can
terminate the Agreement with Tarantino LLC at any time under the terms of the
Agreement. For the six months ended April 30, 2007, the fee paid to Tarantino
LLC was $66. MFS has agreed to reimburse the fund for a portion of the payments
made by the funds to Tarantino LLC in the amount of $42, which is shown as a
reduction of total expenses in the Statement of Operations. Additionally, MFS
has agreed to bear all expenses associated with office space, other
administrative support, and supplies provided to the ICCO.
(4) PORTFOLIO SECURITIES
Purchases and sales of investments, other than purchased option transactions
and short-term obligations, were as follows:
PURCHASES SALES
U.S. government securities $5,373,530 $5,709,108
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Investments (non-U.S. government securities) $-- $--
- -------------------------------------------------------------------------------
(5) SHARES OF BENEFICIAL INTEREST
The fund's Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest. Transactions in
fund shares were as follows:
SIX MONTHS ENDED YEAR ENDED
4/30/07 10/31/06
SHARES AMOUNT SHARES AMOUNT
Shares sold
Class A 169,045 $1,632,713 749,013 $7,328,673
Class B 27,664 266,442 157,766 1,525,473
Class C 28,612 278,247 103,300 1,009,657
Class I 98,847 954,873 99,153 956,104
Class R 1,039 10,070 3,710 36,113
Class R1 33,426 319,506 36,005 344,216
Class R2 2,432 23,261 71 684
Class R3 44,392 422,684 22,004 209,822
Class R4 41,197 398,069 19,974 192,751
Class R5 -- -- 8 75
- -----------------------------------------------------------------------------------------------
446,654 $4,305,865 1,191,004 $11,603,568
Shares issued to shareholders in
reinvestment of distributions
Class A 6,365 $61,609 49,307 $479,508
Class B 1,793 17,364 14,267 138,853
Class C 715 6,932 5,875 57,299
Class I 2,122 20,530 7,659 74,414
Class R 121 1,170 618 6,009
Class R1 142 1,374 525 5,093
Class R2 47 451 218 2,125
Class R3 316 3,058 1,337 12,994
Class R4 264 2,552 509 4,934
Class R5 55 541 254 2,466
- ------------------------------------------------------------------------------------------------
11,940 $115,581 80,569 $783,695
Shares reacquired
Class A (233,677) $(2,244,023) (893,815) $(8,661,197)
Class B (113,557) (1,092,743) (199,640) (1,928,007)
Class C (58,140) (560,060) (129,220) (1,249,804)
Class I (66,580) (640,101) (42,341) (409,246)
Class R (2,573) (24,759) (2,306) (22,320)
Class R1 (28,077) (268,777) (17,554) (167,979)
Class R2 (681) (6,498) (37) (357)
Class R3 (38,674) (367,552) (10,706) (102,015)
Class R4 (31,588) (305,063) (1,204) (11,533)
Class R5 -- -- (8) (75)
- -----------------------------------------------------------------------------------------------
(573,547) $(5,509,576) (1,296,831) $(12,552,533)
Net change
Class A (58,267) $(549,701) (95,495) $(853,016)
Class B (84,100) (808,937) (27,607) (263,681)
Class C (28,813) (274,881) (20,045) (182,848)
Class I 34,389 335,302 64,471 621,272
Class R (1,413) (13,519) 2,022 19,802
Class R1 5,491 52,103 18,976 181,330
Class R2 1,798 17,214 252 2,452
Class R3 6,034 58,190 12,635 120,801
Class R4 9,873 95,558 19,279 186,152
Class R5 55 541 254 2,466
- -----------------------------------------------------------------------------------------------
(114,953) $(1,088,130) (25,258) $(165,270)
The fund is one of several mutual funds in which the MFS funds-of-funds may
invest. The MFS funds-of-funds do not invest in the underlying MFS funds for
the purpose of exercising management or control. At the end of the period, the
MFS Lifetime Retirement Income Fund and MFS Lifetime 2010 Fund were the owners
of record of approximately 4% and 3%, respectively, of the value of outstanding
voting shares.
(6) LINE OF CREDIT
The fund and other funds managed by MFS 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 funds managed by MFS 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, generally at a rate equal to the Federal Reserve funds
rate plus 0.30% for the committed line of credit and 0.35% for the uncommitted
line of credit. 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. For the six months
ended April 30, 2007, the fund's commitment fee and interest expense were $61
and $0, respectively, and are included in miscellaneous expense on the
Statement of Operations.
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 fund will file a complete schedule of portfolio holdings with the
Securities and Exchange Commission (the Commission) for the first and third
quarters of each fiscal year on Form N-Q. The fund's Form N-Q may be reviewed
and copied at the:
Public Reference Room
Securities and Exchange Commission
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 fund's Form N-Q is available on
the EDGAR database on the Commission's Internet Web site at http://www.sec.gov,
and copies of this information may be obtained, upon payment of a duplicating
fee, by electronic request at the following e-mail address: publicinfo@sec.gov
or by writing the Public Reference Section at the above address.
A shareholder can also obtain the quarterly portfolio holdings report at
mfs.com.
CONTACT US
WEB SITE MAILING ADDRESS
mfs.com MFS Service Center, Inc.
P.O. Box 55824
MFS TALK Boston, MA 02205-5824
1-800-637-8255
24 hours a day OVERNIGHT MAIL
MFS Service Center, Inc.
ACCOUNT SERVICE AND 500 Boylston Street
LITERATURE Boston, MA 02116-3741
SHAREHOLDERS
1-800-225-2606
8 a.m. to 8 p.m. ET
INVESTMENT PROFESSIONALS
1-800-343-2829
8 a.m. to 8 p.m. ET
RETIREMENT PLAN SERVICES
1-800-637-1255
8 a.m. to 8 p.m. ET
- -------------------------------------------------------------------------------
Go paperless with eDELIVERY: Arrange to have MFS(R) send prospectuses, reports,
and proxies directly to your e-mail inbox. You'll get timely information and
less clutter in your mailbox (not to mention help your fund save printing and
postage costs).
SIGN UP: If your account is registered with us, simply go to mfs.com, log in to
your account via MFS(R) Access, and select the eDelivery sign up options.
If you own your MFS fund shares through a financial institution or a retirement
plan, MFS(R) TALK, MFS Access, and eDelivery may not be available to you.
- -------------------------------------------------------------------------------
M F S(R)
INVESTMENT MANAGEMENT
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 407(c)(2)(iv) of Regulation S-K (as required by Item
22(b)(15) 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 report on Form N-CSR, the registrant's principal
financial officer and principal executive officer have concluded that
those disclosure controls and procedures provide reasonable assurance that
the material information required to be disclosed by the registrant on
this report is recorded, processed, summarized and reported within the
time periods specified in the Securities and Exchange Commission's rules
and forms.
(b) There were no changes in the registrant's internal controls over financial
reporting (as defined in Rule 30a-3(d) under the Act) that occurred during
the second fiscal quarter of the period covered by the report that have
materially affected, or are reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a) File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(1) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant
intends to satisfy the Item 2 requirements through filing of an
exhibit.
(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2
under the Act (17 CFR 270.30a-2): Attached hereto.
(b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act,
provide the certifications required by Rule 30a-2(b) under the Act (17 CFR
270.30a-2(b)), Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17
CFR 240.13a-14(b) or 240.15d-14(b)) and Section 1350 of Chapter 63 of Title
18 of the United States Code (18 U.S.C. 1350) as an exhibit. A
certification furnished pursuant to this paragraph will not be deemed
"filed" for the purposes of Section 18 of the Exchange Act (15 U.S.C. 78r),
or otherwise subject to the liability of that section. Such certification
will not be deemed to be incorporated by reference into any filing under
the Securities Act of 1933 or the Exchange Act, except to the extent that
the registrant specifically incorporates it by reference: Attached hereto.
NOTICE
A copy of the Amended and Restated Declaration of Trust of the Registrant is on
file with the Secretary of State of The Commonwealth of Massachusetts and
notice is hereby given that this instrument is executed on behalf of the
Registrant by an officer of the Registrant as an officer and not individually
and the obligations of or arising out of this instrument are not binding upon
any of the Trustees or shareholders individually, but are binding only upon the
assets and property of the respective constituent series of the Registrant.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) MFS SERIES TRUST IX
------------------------------------------------------------------
By (Signature and Title)* MARIA F. DWYER
-----------------------------------------------------
Maria F. Dwyer, President
Date: June 13, 2007
-------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* MARIA F. DWYER
-----------------------------------------------------
Maria F. Dwyer, President (Principal Executive
Officer)
Date: June 13, 2007
-------------
By (Signature and Title)* TRACY ATKINSON
-----------------------------------------------------
Tracy Atkinson, Treasurer (Principal Financial Officer
and Accounting Officer)
Date: June 13, 2007
-------------
* Print name and title of each signing officer under his or her signature.