UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-6102
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MFS SERIES TRUST VI
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(Exact name of registrant as specified in charter)
500 Boylston Street, Boston, Massachusetts 02116
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(Address of principal executive offices) (Zip code)
Susan S. Newton
Massachusetts Financial Services Company
500 Boylston Street
Boston, Massachusetts 02116
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(Name and address of agents for service)
Registrant's telephone number, including area code: (617) 954-5000
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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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ITEM 1. REPORTS TO STOCKHOLDERS.
M F S(R)
INVESTMENT MANAGEMENT
[graphic omitted]
SEMIANNUAL REPORT
MFS(R) GLOBAL TOTAL RETURN 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 17
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STATEMENT OF OPERATIONS 20
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STATEMENTS OF CHANGES IN NET ASSETS 21
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FINANCIAL HIGHLIGHTS 23
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NOTES TO FINANCIAL STATEMENTS 33
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BOARD REVIEW OF INVESTMENT ADVISORY AGREEMENT 46
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PROXY VOTING POLICIES AND INFORMATION 46
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QUARTERLY PORTFOLIO DISCLOSURE 46
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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
MWT-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)
Common Stocks 59.4%
Bonds 34.0%
Cash & Other Net Assets 6.6%
TOP TEN HOLDINGS (i)
Federal Republic of Germany, 3.75%, 2015 1.8%
------------------------------------------------
Federal Republic of Germany, 6.25%, 2030 1.7%
------------------------------------------------
TOTAL S.A., ADR 1.6%
------------------------------------------------
Development Bank Of Japan, 1.05%, 2023 1.4%
------------------------------------------------
Nestle S.A. 1.2%
------------------------------------------------
U.S. Treasury Notes, 4%, 2010 1.2%
------------------------------------------------
Lockheed Martin Corp. 1.2%
------------------------------------------------
U.S. Treasury Notes, TIPS, 2.375%, 2017 1.2%
------------------------------------------------
Federal Republic of Germany, 6.25%, 2024 1.1%
------------------------------------------------
KfW Bankengruppe, FRN, 3.741%, 2007 1.1%
------------------------------------------------
EQUITY SECTORS
Financial Services 14.7%
------------------------------------------------
Consumer Staples 7.0%
------------------------------------------------
Utilities & Communications 6.6%
------------------------------------------------
Energy 5.9%
------------------------------------------------
Health Care 5.4%
------------------------------------------------
Industrial Goods & Services 4.7%
------------------------------------------------
Autos & Housing 3.0%
------------------------------------------------
Leisure 2.7%
------------------------------------------------
Basic Materials 2.6%
------------------------------------------------
Technology 2.6%
------------------------------------------------
Retailing 2.3%
------------------------------------------------
Transportation 1.1%
------------------------------------------------
Special Products & Services 0.8%
------------------------------------------------
FIXED INCOME SECTORS (i)
Non U.S. Government Bonds 22.3%
------------------------------------------------
U.S. Treasury Securities 4.4%
------------------------------------------------
Commercial Mortgage-Backed Securities 2.7%
------------------------------------------------
Emerging Market Bonds 1.8%
------------------------------------------------
Mortgage-Backed Securities 1.5%
------------------------------------------------
U.S. Government Agencies 0.9%
------------------------------------------------
High Grade Corporates 0.4%
------------------------------------------------
COUNTRY WEIGHTINGS (i)
United States 41.9%
------------------------------------------------
Japan 14.4%
------------------------------------------------
Germany 10.5%
------------------------------------------------
United Kingdom 9.2%
------------------------------------------------
France 5.9%
------------------------------------------------
Netherlands 3.6%
------------------------------------------------
Switzerland 3.0%
------------------------------------------------
Ireland 1.4%
------------------------------------------------
Austria 1.2%
------------------------------------------------
Other Countries 8.9%
------------------------------------------------
(i) For purposes of this presentation, the bond component includes both
accrued interest amounts and the equivalent exposure from any derivative
holdings, if applicable.
Percentages are based on net assets as of 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.
- --------------------------------------------------------------------------------
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 1.30% $1,000.00 $1,076.90 $6.69
A ---------------------------------------------------------------------------
Hypothetical (h) 1.30% $1,000.00 $1,018.35 $6.51
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Actual 1.95% $1,000.00 $1,074.00 $10.03
B ---------------------------------------------------------------------------
Hypothetical (h) 1.95% $1,000.00 $1,015.12 $9.74
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Actual 1.95% $1,000.00 $1,073.50 $10.03
C ---------------------------------------------------------------------------
Hypothetical (h) 1.95% $1,000.00 $1,015.12 $9.74
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Actual 0.95% $1,000.00 $1,079.30 $4.90
I ---------------------------------------------------------------------------
Hypothetical (h) 0.95% $1,000.00 $1,020.08 $4.76
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Actual 1.45% $1,000.00 $1,076.60 $7.47
R ---------------------------------------------------------------------------
Hypothetical (h) 1.45% $1,000.00 $1,017.60 $7.25
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Actual 2.05% $1,000.00 $1,072.60 $10.53
R1 ---------------------------------------------------------------------------
Hypothetical (h) 2.05% $1,000.00 $1,014.63 $10.24
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Actual 1.70% $1,000.00 $1,075.40 $8.75
R2 ---------------------------------------------------------------------------
Hypothetical (h) 1.70% $1,000.00 $1,016.36 $8.50
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Actual 1.60% $1,000.00 $1,075.70 $8.23
R3 ---------------------------------------------------------------------------
Hypothetical (h) 1.60% $1,000.00 $1,016.86 $8.00
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Actual 1.35% $1,000.00 $1,077.10 $6.95
R4 ---------------------------------------------------------------------------
Hypothetical (h) 1.35% $1,000.00 $1,018.10 $6.76
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Actual 1.05% $1,000.00 $1,078.40 $5.41
R5 ---------------------------------------------------------------------------
Hypothetical (h) 1.05% $1,000.00 $1,019.59 $5.26
- --------------------------------------------------------------------------------
(h) 5% class return per year before expenses.
(p) Expenses paid is equal to each class' annualized expense ratio, as shown
above, multiplied by the average account value over the period, multiplied
by the number of days in the period, divided by the number of days in the
year. Expenses paid do not include any applicable sales charges (loads) or
redemption fees. If these transaction costs had been included, your costs
would have been higher.
PORTFOLIO OF INVESTMENTS
4/30/07 (unaudited)
The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by
broad-based asset classes.
Common Stocks - 59.4%
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ISSUER SHARES/PAR VALUE ($)
- ----------------------------------------------------------------------------------------------------------------
Aerospace - 2.4%
- ----------------------------------------------------------------------------------------------------------------
Lockheed Martin Corp. 82,840 $ 7,964,238
Northrop Grumman Corp. 59,790 4,402,936
United Technologies Corp. 53,790 3,610,923
------------
$ 15,978,097
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Alcoholic Beverages - 0.4%
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Heineken N.V. (l) 55,200 $ 2,949,145
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Apparel Manufacturers - 0.5%
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NIKE, Inc., "B" 58,640 $ 3,158,350
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Automotive - 1.5%
- ----------------------------------------------------------------------------------------------------------------
Autoliv, Inc., SDR 22,880 $ 1,325,477
Bayerische Motoren Werke AG (l) 77,600 4,793,291
Continental AG (l) 13,714 1,913,377
Johnson Controls, Inc. 12,630 1,292,428
Nissan Motor Co. Ltd. 115,600 1,165,633
------------
$ 10,490,206
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Broadcasting - 1.6%
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Fuji Television Network, Inc. 1,078 $ 2,524,568
Nippon Television Network Corp. 11,880 1,957,992
Viacom, Inc., "B" (a) 51,493 2,124,086
Vivendi S.A. (l) 51,550 2,125,388
WPP Group PLC 137,410 2,034,311
------------
$ 10,766,345
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Brokerage & Asset Managers - 1.6%
- ----------------------------------------------------------------------------------------------------------------
Franklin Resources, Inc. 14,600 $ 1,917,126
Goldman Sachs Group, Inc. 25,600 5,596,416
Lehman Brothers Holdings, Inc. 20,480 1,541,734
Mellon Financial Corp. 37,710 1,618,890
------------
$ 10,674,166
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Business Services - 0.8%
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Accenture Ltd., "A" 62,250 $ 2,433,975
Bunzl PLC 89,000 1,260,041
USS Co., Ltd. 26,360 1,660,187
------------
$ 5,354,203
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Chemicals - 1.0%
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PPG Industries, Inc. 35,060 $ 2,579,715
Syngenta AG 22,440 4,463,698
------------
$ 7,043,413
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Computer Software - 0.5%
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Oracle Corp. (a) 180,050 $ 3,384,940
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Computer Software - Systems - 0.3%
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Hewlett-Packard Co. 44,700 $ 1,883,658
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Construction - 1.5%
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CRH PLC 49,900 $ 2,184,597
Fletcher Building Ltd. 197,982 1,669,074
Masco Corp. 136,460 3,713,077
Sekisui Chemical Co. Ltd. 264,000 2,048,607
Sherwin-Williams Co. 12,480 795,850
------------
$ 10,411,205
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Consumer Goods & Services - 2.2%
- ----------------------------------------------------------------------------------------------------------------
Henkel KGaA, IPS (l) 40,930 $ 6,448,184
Kao Corp. 132,000 3,622,408
Procter & Gamble Co. 19,300 1,241,183
Uni-Charm Corp. (l) 56,500 3,330,018
------------
$ 14,641,793
- ----------------------------------------------------------------------------------------------------------------
Electrical Equipment - 1.4%
- ----------------------------------------------------------------------------------------------------------------
General Electric Co. 34,700 $ 1,279,042
Legrand S.A 48,600 1,653,600
OMRON Corp. 66,200 1,771,747
Rockwell Automation, Inc. 23,900 1,423,006
Spectris PLC 86,000 1,666,350
W.W. Grainger, Inc. 21,940 1,812,683
------------
$ 9,606,428
- ----------------------------------------------------------------------------------------------------------------
Electronics - 1.8%
- ----------------------------------------------------------------------------------------------------------------
Intel Corp. 141,460 $ 3,041,390
Konica Minolta Holdings, Inc. 135,000 1,849,823
Ricoh Co. Ltd. 74,000 1,621,899
Samsung Electronics Co. Ltd. 3,215 1,968,903
Sony Corp. 39,400 2,097,400
Taiwan Semiconductor Manufacturing Co. Ltd., ADR 155,158 1,635,365
------------
$ 12,214,780
- ----------------------------------------------------------------------------------------------------------------
Energy - Independent - 0.9%
- ----------------------------------------------------------------------------------------------------------------
Apache Corp. 28,570 $ 2,071,325
Devon Energy Corp. 30,900 2,251,683
EOG Resources, Inc. 25,240 1,853,626
------------
$ 6,176,634
- ----------------------------------------------------------------------------------------------------------------
Energy - Integrated - 4.8%
- ----------------------------------------------------------------------------------------------------------------
ConocoPhillips 53,550 $ 3,713,692
Exxon Mobil Corp. 65,840 5,226,379
Hess Corp. 53,480 3,034,990
Royal Dutch Shell PLC, "A" 174,300 6,072,228
Statoil A.S.A. (l) 122,800 3,450,572
TOTAL S.A., ADR 146,040 10,761,688
------------
$ 32,259,549
- ----------------------------------------------------------------------------------------------------------------
Food & Beverages - 2.9%
- ----------------------------------------------------------------------------------------------------------------
Cadbury Schweppes PLC 278,400 $ 3,672,082
CSM N.V 42,500 1,628,809
Kellogg Co. 45,000 2,380,950
Nestle S.A 21,335 8,452,815
Nong Shim Co. Ltd. 4,491 1,195,996
PepsiCo, Inc. 31,400 2,075,226
------------
$ 19,405,878
- ----------------------------------------------------------------------------------------------------------------
Food & Drug Stores - 0.7%
- ----------------------------------------------------------------------------------------------------------------
CVS Corp. 53,000 $ 1,920,720
Lawson, Inc. (l) 68,500 2,523,216
------------
$ 4,443,936
- ----------------------------------------------------------------------------------------------------------------
Forest & Paper Products - 0.3%
- ----------------------------------------------------------------------------------------------------------------
Stora Enso Oyj 116,000 $ 2,122,443
- ----------------------------------------------------------------------------------------------------------------
Gaming & Lodging - 0.2%
- ----------------------------------------------------------------------------------------------------------------
Royal Caribbean Cruises Ltd. 29,100 $ 1,209,687
- ----------------------------------------------------------------------------------------------------------------
General Merchandise - 0.9%
- ----------------------------------------------------------------------------------------------------------------
Daiei, Inc. (a)(l) 45,500 $ 534,428
Federated Department Stores, Inc. 67,700 2,973,384
METRO AG 34,600 2,674,187
------------
$ 6,181,999
- ----------------------------------------------------------------------------------------------------------------
Health Maintenance Organizations - 0.5%
- ----------------------------------------------------------------------------------------------------------------
WellPoint, Inc. (a) 39,400 $ 3,111,418
- ----------------------------------------------------------------------------------------------------------------
Insurance - 3.8%
- ----------------------------------------------------------------------------------------------------------------
Aflac, Inc. 21,700 $ 1,114,078
Allstate Corp. 116,920 7,286,454
Benfield Group PLC 193,440 1,212,740
Genworth Financial, Inc., "A" 60,470 2,206,550
Hartford Financial Services Group, Inc. 24,940 2,523,928
Jardine Lloyd Thompson Group PLC 228,840 1,994,642
Legal & General Group PLC 846,300 2,593,845
MetLife, Inc. 102,080 6,706,656
------------
$ 25,638,893
- ----------------------------------------------------------------------------------------------------------------
Leisure & Toys - 0.5%
- ----------------------------------------------------------------------------------------------------------------
Heiwa Corp. (l) 76,900 $ 993,815
NAMCO BANDAI Holdings, Inc. (l) 80,100 1,302,191
Sankyo Co., Ltd. (l) 22,900 1,002,974
------------
$ 3,298,980
- ----------------------------------------------------------------------------------------------------------------
Machinery & Tools - 0.9%
- ----------------------------------------------------------------------------------------------------------------
ASSA ABLOY AB, "B" (l) 93,000 $ 2,082,409
Deere & Co. 25,320 2,770,008
GEA Group AG (l) 53,900 1,583,578
------------
$ 6,435,995
- ----------------------------------------------------------------------------------------------------------------
Major Banks - 4.4%
- ----------------------------------------------------------------------------------------------------------------
Bank of America Corp. 144,896 $ 7,375,206
Bank of New York Co., Inc. 80,000 3,238,400
BNP Paribas 27,230 3,152,348
Credit Agricole S.A. (l) 101,904 4,277,115
Joyo Bank Ltd. (l) 117,000 716,849
PNC Financial Services Group, Inc. 36,790 2,726,139
Royal Bank of Scotland Group PLC 63,775 2,440,037
Shizuoka Bank Ltd. (l) 137,000 1,442,938
SunTrust Banks, Inc. 29,790 2,514,872
Svenska Handelsbanken AB, "A" (l) 70,500 2,149,638
------------
$ 30,033,542
- ----------------------------------------------------------------------------------------------------------------
Metals & Mining - 0.5%
- ----------------------------------------------------------------------------------------------------------------
Anglo American PLC 68,610 $ 3,630,305
- ----------------------------------------------------------------------------------------------------------------
Natural Gas - Distribution - 0.4%
- ----------------------------------------------------------------------------------------------------------------
Tokyo Gas Co. Ltd. 580,000 $ 2,903,127
- ----------------------------------------------------------------------------------------------------------------
Oil Services - 0.2%
- ----------------------------------------------------------------------------------------------------------------
Fugro N.V 20,800 $ 1,128,600
- ----------------------------------------------------------------------------------------------------------------
Other Banks & Diversified Financials - 4.9%
- ----------------------------------------------------------------------------------------------------------------
Aiful Corp. (l) 116,000 $ 2,888,942
American Express Co. 35,330 2,143,471
Banche Popolari Unite S.c.p.a 52,100 1,576,570
Bangkok Bank Public Co. Ltd. 436,200 1,407,778
Citigroup, Inc. 116,136 6,227,212
DNB Holding A.S.A. (l) 100,200 1,428,449
Fannie Mae 62,540 3,684,857
Hachijuni Bank Ltd. (l) 175,000 1,218,583
HSBC Holdings PLC 249,961 4,615,592
ING Groep N.V. (l) 82,350 3,739,382
Sapporo Hokuyo Holdings, Inc. 119 1,147,187
Shinhan Financial Group Co. Ltd. 21,780 1,225,981
Takefuji Corp. 49,820 1,671,291
------------
$ 32,975,295
- ----------------------------------------------------------------------------------------------------------------
Pharmaceuticals - 4.9%
- ----------------------------------------------------------------------------------------------------------------
Astellas Pharma, Inc. 74,000 $ 3,227,372
Eli Lilly & Co. 31,780 1,879,151
GlaxoSmithKline PLC 221,180 6,398,263
Hisamitsu Pharmaceutical Co., Inc. 59,900 1,785,694
Johnson & Johnson 94,680 6,080,350
Merck & Co., Inc. 52,330 2,691,855
Novartis AG 121,400 7,067,509
Wyeth 69,710 3,868,905
------------
$ 32,999,099
- ----------------------------------------------------------------------------------------------------------------
Printing & Publishing - 0.4%
- ----------------------------------------------------------------------------------------------------------------
Reed Elsevier PLC 188,020 $ 2,382,026
- ----------------------------------------------------------------------------------------------------------------
Railroad & Shipping - 0.3%
- ----------------------------------------------------------------------------------------------------------------
Burlington Northern Santa Fe Corp. 21,060 $ 1,843,592
- ----------------------------------------------------------------------------------------------------------------
Specialty Chemicals - 0.8%
- ----------------------------------------------------------------------------------------------------------------
L'Air Liquide S.A., Bearer Shares (l) 16,053 $ 3,980,390
Praxair, Inc. 25,940 1,674,427
------------
$ 5,654,817
- ----------------------------------------------------------------------------------------------------------------
Specialty Stores - 0.2%
- ----------------------------------------------------------------------------------------------------------------
Praktiker Bau-und Heimwerkermarkte Holding AG 34,100 $ 1,422,472
- ----------------------------------------------------------------------------------------------------------------
Telecommunications - Wireless - 1.9%
- ----------------------------------------------------------------------------------------------------------------
KDDI Corp. 414 $ 3,248,270
Sprint Nextel Corp. 102,930 2,061,688
Vodafone Group PLC 2,571,245 7,317,830
------------
$ 12,627,788
- ----------------------------------------------------------------------------------------------------------------
Telephone Services - 1.8%
- ----------------------------------------------------------------------------------------------------------------
Embarq Corp. 14,381 $ 863,435
France Telecom S.A 133,730 3,941,214
Royal KPN N.V. (l) 189,800 3,215,791
Telekom Austria AG 118,100 3,331,534
TELUS Corp. (non-voting shares) 13,600 727,017
------------
$ 12,078,991
- ----------------------------------------------------------------------------------------------------------------
Tobacco - 1.5%
- ----------------------------------------------------------------------------------------------------------------
Altria Group, Inc. 98,380 $ 6,780,350
British American Tobacco PLC 79,990 2,468,002
Swedish Match AB (l) 67,910 1,254,420
------------
$ 10,502,772
- ----------------------------------------------------------------------------------------------------------------
Trucking - 0.8%
- ----------------------------------------------------------------------------------------------------------------
TNT N.V. (l) 125,260 $ 5,644,408
- ----------------------------------------------------------------------------------------------------------------
Utilities - Electric Power - 2.5%
- ----------------------------------------------------------------------------------------------------------------
Dominion Resources, Inc. 39,230 $ 3,577,776
E.ON AG (l) 31,770 4,784,317
FPL Group, Inc. 38,530 2,480,176
SUEZ S.A. (l) 36,031 2,044,595
TXU Corp. 33,280 2,182,502
United Utilities PLC 140,970 2,096,766
------------
$ 17,166,132
- ----------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS (IDENTIFIED COST, $314,949,133) $401,835,107
- ----------------------------------------------------------------------------------------------------------------
Bonds - 31.1%
- ----------------------------------------------------------------------------------------------------------------
Asset Backed & Securitized - 2.7%
- ----------------------------------------------------------------------------------------------------------------
Bayview Commercial Asset Trust, FRN, 4.8557%, 2023 (n) CAD 560,000 $ 504,823
Citigroup/Deutsche Bank Commercial Mortgage Trust,
5.648%, 2048 $ 1,700,000 1,726,142
Commercial Mortgage Asset Trust, FRN, 1.1263%, 2032 (i)(n) 17,436,574 639,870
Commercial Mortgage Pass-Through Certificates, FRN,
5.51%, 2017 (n) 1,400,000 1,400,325
Commercial Mortgage Pass-Through Certificates, FRN,
5.52%, 2017 (n) 2,100,000 2,100,258
Credit Suisse Commercial Mortgage Trust, 5.509%, 2039 478,292 479,419
Deutsche Mortgage & Asset Receiving Corp., 6.538%, 2031 148,773 149,108
First Union National Bank Commercial Mortgage Trust, FRN,
1.1842%, 2043 (i)(n) 25,353,350 756,245
IMPAC CMB Trust, FRN, 5.67%, 2036 1,999,513 2,008,423
JPMorgan Chase Commercial Mortgage Securities Corp.,
5.44%, 2045 (n) 398,186 398,334
JPMorgan Chase Commercial Mortgage Securities Corp., 5.372%, 2047 270,000 267,554
JPMorgan Chase Commercial Mortgage Securities Corp., FRN,
5.3805%, 2041 1,870,062 1,869,603
JPMorgan Chase Commercial Mortgage Securities Corp., FRN,
5.3866%, 2044 570,000 567,642
Lehman Brothers Floating Rate Commercial Mortgage Trust, FRN,
5.48%, 2018 (n) 1,977,189 1,977,181
Merrill Lynch/Countrywide Commercial Mortgage Trust, FRN,
5.204%, 2049 1,250,000 1,228,542
Wachovia Bank Commercial Mortgage Trust, FRN, 5.795%, 2045 670,000 686,534
Wachovia Bank Commercial Mortgage Trust, FRN, 5.603%, 2048 1,700,000 1,719,160
------------
$ 18,479,163
- ----------------------------------------------------------------------------------------------------------------
Emerging Market Quasi-Sovereign - 0.6%
- ----------------------------------------------------------------------------------------------------------------
Gazprom International S.A., 7.201%, 2020 $ 1,435,400 $ 1,513,199
Gazprom International S.A., 6.51%, 2022 (n) 570,000 586,387
Pemex Project Funding Master Trust, 8.625%, 2022 498,000 627,978
Petronas Capital Ltd., 7.875%, 2022 1,296,000 1,599,190
------------
$ 4,326,754
- ----------------------------------------------------------------------------------------------------------------
Emerging Market Sovereign - 0.9%
- ----------------------------------------------------------------------------------------------------------------
Central Bank of Argentina, 11.3125%, 2010 ARS 1,997,000 $ 657,770
Republic of Argentina, FRN, 5.475%, 2012 $ 1,052,250 1,005,197
Republic of Bulgaria, 8.25%, 2015 541,000 641,355
Republic of South Africa, 7.375%, 2012 523,000 570,070
United Mexican States, 9%, 2011 MXN 4,660,000 447,799
United Mexican States, 5.625%, 2017 $ 1,284,000 1,303,902
United Mexican States, 6.75%, 2034 1,252,000 1,395,980
------------
$ 6,022,073
- ----------------------------------------------------------------------------------------------------------------
International Market Quasi-Sovereign - 6.2%
- ----------------------------------------------------------------------------------------------------------------
Canada Housing Trust, 4.6%, 2011 CAD 1,469,000 $ 1,344,453
Development Bank of Japan, 1.75%, 2010 JPY 195,000,000 1,668,165
Development Bank of Japan, 1.4%, 2012 JPY 718,000,000 6,088,295
Development Bank of Japan, 1.6%, 2014 (l) JPY 390,000,000 3,303,160
Development Bank of Japan, 1.05%, 2023 (l) JPY 1,341,000,000 9,696,522
Development Bank of Japan, 2.3%, 2026 JPY 440,000,000 3,780,489
Japan Finance Corp. for Municipal Enterprises, 2%, 2016 JPY 630,000,000 5,482,199
KfW Bankengruppe, 1.35%, 2014 JPY 357,000,000 2,978,160
KfW Bankengruppe, FRN, 3.741%, 2007 EUR 5,413,000 7,387,374
------------
$ 41,728,817
- ----------------------------------------------------------------------------------------------------------------
International Market Sovereign - 13.4%
- ----------------------------------------------------------------------------------------------------------------
Commonwealth of Australia, 6%, 2017 AUD 1,278,000 $ 1,070,715
Federal Republic of Germany, 3.5%, 2008 EUR 1,971,000 2,666,514
Federal Republic of Germany, 5.25%, 2010 EUR 2,032,000 2,863,679
Federal Republic of Germany, 3.75%, 2015 EUR 9,004,000 11,972,328
Federal Republic of Germany, 6.25%, 2024 EUR 4,450,000 7,462,914
Federal Republic of Germany, 6.25%, 2030 EUR 6,473,000 11,232,812
Government of Canada, 5.5%, 2009 CAD 1,446,000 1,338,498
Government of Canada, 4.5%, 2015 CAD 1,172,000 1,081,752
Government of Canada, 8%, 2023 CAD 516,000 668,293
Government of Canada, 5.75%, 2033 CAD 1,202,000 1,348,173
Kingdom of Belgium, 3.75%, 2009 EUR 1,155,000 1,565,757
Kingdom of Belgium, 5%, 2012 EUR 926,000 1,314,433
Kingdom of Denmark, 4%, 2015 DKK 15,667,000 2,839,170
Kingdom of Netherlands, 5%, 2012 EUR 2,450,855 3,476,885
Kingdom of Netherlands, 3.75%, 2014 EUR 1,948,000 2,592,586
Kingdom of Spain, 5.35%, 2011 EUR 3,416,000 4,886,182
Republic of Austria, 5%, 2012 EUR 3,305,000 4,685,317
Republic of Finland, 3%, 2008 EUR 3,052,000 4,111,972
Republic of Finland, 5.375%, 2013 EUR 535,000 777,808
Republic of France, 6%, 2025 EUR 1,321,000 2,180,178
Republic of France, 4.75%, 2035 EUR 3,991,000 5,790,315
Republic of Ireland, 4.6%, 2016 EUR 3,393,000 4,774,777
United Kingdom Treasury, 8%, 2015 GBP 1,078,000 2,583,637
United Kingdom Treasury, 8%, 2021 GBP 986,000 2,577,094
United Kingdom Treasury, 4.25%, 2036 GBP 2,526,000 4,836,860
------------
$ 90,698,649
- ----------------------------------------------------------------------------------------------------------------
Major Banks - 0.4%
- ----------------------------------------------------------------------------------------------------------------
Ulster Bank Finance PLC, FRN, 3.954%, 2008 EUR 1,968,000 $ 2,685,330
- ----------------------------------------------------------------------------------------------------------------
Mortgage Backed - 1.5%
- ----------------------------------------------------------------------------------------------------------------
Fannie Mae, 4.517%, 2013 $ 85,568 $ 83,654
Fannie Mae, 5.369%, 2013 274,519 277,147
Fannie Mae, 4.78%, 2015 366,141 360,578
Fannie Mae, 4.856%, 2015 289,143 283,303
Fannie Mae, 4.98%, 2015 212,563 211,558
Fannie Mae, 5.09%, 2016 362,000 362,408
Fannie Mae, 5.423%, 2016 347,571 355,820
Fannie Mae, 4.996%, 2017 288,179 287,582
Fannie Mae, 5.05%, 2017 330,000 329,423
Fannie Mae, 5.5%, 2024 805,618 805,639
Fannie Mae, 5%, 2025 1,000,000 995,726
Freddie Mac, 4.5%, 2021 548,147 544,178
Freddie Mac, 5%, 2022 - 2025 4,774,404 4,756,506
Freddie Mac, 4%, 2024 758,162 745,281
------------
$ 10,398,803
- ----------------------------------------------------------------------------------------------------------------
Natural Gas - Pipeline - 0.1%
- ----------------------------------------------------------------------------------------------------------------
Intergas Finance B.V., 6.875%, 2011 $ 611,000 $ 633,149
- ----------------------------------------------------------------------------------------------------------------
Telecommunications - Wireless - 0.1%
- ----------------------------------------------------------------------------------------------------------------
OJSC Vimpel Communications, 8.25%, 2016 $ 702,000 $ 753,246
- ----------------------------------------------------------------------------------------------------------------
U.S. Government Agencies - 0.9%
- ----------------------------------------------------------------------------------------------------------------
Aid-Egypt, 4.45%, 2015 $ 1,113,000 $ 1,076,672
Fannie Mae, 4.25%, 2007 1,190,000 1,183,898
Freddie Mac, 4.2%, 2007 782,000 777,328
Small Business Administration, 5.09%, 2025 217,624 217,109
Small Business Administration, 5.21%, 2026 2,625,848 2,635,479
------------
$ 5,890,486
- ----------------------------------------------------------------------------------------------------------------
U.S. Treasury Obligations - 4.3%
- ----------------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds, 8%, 2021 $ 2,670,000 $ 3,541,712
U.S. Treasury Notes, 4%, 2010 8,403,000 8,281,879
U.S. Treasury Notes, 4.75%, 2012 3,071,000 3,100,872
U.S. Treasury Notes, 4.25%, 2013 317,000 311,737
U.S. Treasury Notes, 4%, 2015 (f) 3,395,000 3,263,444
U.S. Treasury Notes, TIPS, 2%, 2014 2,800,199 2,776,462
U.S. Treasury Notes, TIPS, 2.375%, 2017 7,757,586 7,878,496
------------
$ 29,154,602
- ----------------------------------------------------------------------------------------------------------------
TOTAL BONDS (IDENTIFIED COST, $206,206,492) $210,771,072
- ----------------------------------------------------------------------------------------------------------------
Call Options Purchased - 0.0%
- ----------------------------------------------------------------------------------------------------------------
NUMBER OF
ISSUE/EXPIRATION DATE/STRIKE PRICE CONTRACTS VALUE ($)
- ----------------------------------------------------------------------------------------------------------------
JPY Currency - June 2007 @ $0.96290
(Premiums Paid, $16,033) (a) JPY 304,750,000 $ 2,133
- ----------------------------------------------------------------------------------------------------------------
Put Options Purchased - 0.0%
- ----------------------------------------------------------------------------------------------------------------
EUR Currency - June 2007 @ CHF 1.63
(Premiums Paid, $12,179) (a) EUR 1,791,000 $ 2,547
- ----------------------------------------------------------------------------------------------------------------
Short-Term Obligations - 9.1% (y)
- ----------------------------------------------------------------------------------------------------------------
ISSUER SHARES/PAR VALUE ($)
- ----------------------------------------------------------------------------------------------------------------
American Express Credit Corp., 5.29%, due 5/01/07 $ 24,919,000 $ 24,919,000
Citigroup Funding, Inc., 5.3%, due 5/01/07 20,915,000 20,915,000
Morgan Stanley, Inc., 5.32%, due 5/01/07 15,760,000 15,760,000
- ----------------------------------------------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS, AT AMORTIZED COST AND VALUE $ 61,594,000
- ----------------------------------------------------------------------------------------------------------------
Collateral for Securities Loaned - 9.9%
- ----------------------------------------------------------------------------------------------------------------
Morgan Stanley Repurchase Agreement, 5.23%, dated 4/30/07,
due 5/01/07, total to be received $66,881,689 (secured by
various U.S. Treasury and Federal Agency obligations and
Mortgage Backed securities in an individually traded
account), at Cost 66,871,974 $ 66,871,974
- ----------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (IDENTIFIED COST, $649,649,811) (k) $741,076,833
- ----------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - (9.5)% (64,080,820)
- ----------------------------------------------------------------------------------------------------------------
NET ASSETS - 100.0% $676,996,013
- ----------------------------------------------------------------------------------------------------------------
(a) Non-income producing security.
(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 $412,702,696 and 55.69% of market value. An independent pricing service
provided an evaluated bid for 27.75% of the market value.
(i) Interest only security for which the fund receives interest on notional principal (Par amount). Par amount
shown is the notional principal and does not reflect the cost of the security.
(l) All or a portion of this security is on loan.
(n) Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be
sold in the ordinary course of business in transactions exempt from registration, normally to qualified
institutional buyers. At period end, the aggregate value of these securities was $8,363,423, representing
1.2% of net assets.
(y) The rate shown represents an annualized yield at time of purchase.
The following abbreviations are used in this report and are defined:
ADR American Depository Receipt
FRN Floating Rate Note. Interest rate resets periodically and may not be the rate reported at period end.
IPS International Preference Stock
SDR Swedish Depository Receipt
TIPS Treasury Inflation Protected Security
Abbreviations indicate amounts shown in currencies other than the U.S. dollar. All amounts are stated in U.S.
dollars unless otherwise indicated. A list of abbreviations is shown below:
ARS Argentine Peso
AUD Australian Dollar
CAD Canadian Dollar
CHF Swiss Franc
DKK Danish Krone
EUR Euro
GBP British Pound
JPY Japanese Yen
MXN Mexican Peso
NOK Norwegian Krone
PLN Polish Zloty
SEK Swedish Krona
FUTURES CONTRACTS OUTSTANDING AT 4/30/07:
UNREALIZED
EXPIRATION APPRECIATION
DESCRIPTION CONTRACTS VALUE DATE (DEPRECIATION)
- --------------------------------------------------------------------------------------------------------------------
Japan Government Bonds 10 yr (Long) 15 $16,857,513 Jun-07 $6,340
======
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS AT 4/30/07
Appreciation and Depreciation in the table below are reported by currency.
NET
UNREALIZED
CONTRACTS TO SETTLEMENT IN EXCHANGE CONTRACTS APPRECIATION
TYPE CURRENCY DELIVER/RECEIVE DATE RANGE FOR AT VALUE (DEPRECIATION)
- ----------------------------------------------------------------------------------------------------------------------------
APPRECIATION
- ----------------------------------------------------------------------------------------------------------------------------
BUY AUD 1,841,124 6/04/07 $ 1,504,640 $ 1,527,708 $ 23,068
SELL AUD 3,242,170 6/04/07 2,707,212 2,690,252 16,960
BUY CAD 4,504,481 5/23/07 3,935,314 4,063,451 128,137
BUY EUR 15,258,722 5/17/07 - 6/20/07 20,421,923 20,867,913 445,990
SELL JPY 74,042,445 5/15/07 623,095 620,597 2,498
BUY MXN 2,592,403 5/09/07 235,000 237,063 2,063
BUY NOK 7,875,417 6/18/07 1,318,527 1,326,306 7,779
BUY PLN 1,445,774 5/02/07 490,099 521,443 31,344
SELL PLN 1,445,774 5/02/07 522,336 521,443 893
BUY SEK 15,041,804 6/04/07 2,151,294 2,250,963 99,669
---------
$ 758,401
=========
DEPRECIATION
- ----------------------------------------------------------------------------------------------------------------------------
BUY AUD 3,248,948 6/04/07 $ 2,709,720 $ 2,695,876 $(13,844)
SELL AUD 3,426,308 6/04/07 2,806,045 2,843,043 (36,998)
SELL CAD 5,323,519 5/23/07 4,640,370 4,802,298 (161,928)
SELL DKK 4,010,700 6/13/07 723,822 735,882 (12,060)
SELL EUR 4,381,798 5/23/07 - 6/20/07 5,873,380 5,989,493 (116,113)
BUY GBP 3,055,903 6/20/07 6,126,656 6,107,825 (18,831)
BUY JPY 449,331,095 5/15/07 3,801,110 3,766,130 (34,980)
SELL MXN 726,289 5/09/07 66,021 66,416 (395)
BUY PLN 1,445,774 7/02/07 523,291 522,355 (936)
---------
$(396,085)
=========
At April 30, 2007, forward foreign currency purchases and sales under master netting agreements excluded above
amounted to a net receivable of $41,882 with Goldman Sachs & Co. and a net payable of $1,314,584 with Merrill
Lynch International Bank.
At April 30, 2007 the fund had sufficient cash and/or securities to cover any commitments under these derivative
contracts.
SEE NOTES TO FINANCIAL STATEMENTS
Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
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
- ------------------------------------------------------------------------------------------------------
Investments, at value, including $63,931,300 of securities on
loan (identified cost, $649,649,811) $741,076,833
Cash 132,177
Receivable for forward foreign currency exchange contracts 758,401
Receivable for forward foreign currency exchange contracts
subject to master netting agreements 41,882
Receivable for daily variation margin on open futures contracts 26
Receivable for investments sold 36,615
Receivable for fund shares sold 1,376,596
Interest and dividends receivable 4,136,690
Receivable from investment adviser 80,994
Other assets 8,986
- ------------------------------------------------------------------------------------------------------
Total assets $747,649,200
- ------------------------------------------------------------------------------------------------------
LIABILITIES
- ------------------------------------------------------------------------------------------------------
Payable for forward foreign currency exchange contracts $396,085
Payable for forward foreign currency exchange contracts subject
to master netting agreements 1,314,584
Payable for investments purchased 552,714
Payable for fund shares reacquired 1,076,054
Collateral for securities loaned, at value 66,871,974
Payable to affiliates
Management fee 60,650
Shareholder servicing costs 121,531
Distribution and service fees 41,906
Administrative services fee 1,396
Retirement plan administration and services fees 111
Payable for independent trustees' compensation 67,925
Accrued expenses and other liabilities 148,257
- ------------------------------------------------------------------------------------------------------
Total liabilities $70,653,187
- ------------------------------------------------------------------------------------------------------
Net assets $676,996,013
- ------------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities (unaudited) - continued
NET ASSETS CONSIST OF
- ------------------------------------------------------------------------------------------------------
Paid-in capital $563,637,599
Unrealized appreciation (depreciation) on investments and
translation of assets and liabilities in foreign currencies 90,593,353
Accumulated net realized gain (loss) on investments and foreign
currency transactions 21,749,793
Undistributed net investment income 1,015,268
- ------------------------------------------------------------------------------------------------------
Net assets $676,996,013
- ------------------------------------------------------------------------------------------------------
Shares of beneficial interest outstanding 44,994,909
- ------------------------------------------------------------------------------------------------------
Class A shares
- ------------------------------------------------------------------------------------------------------
Net assets $440,300,231
Shares outstanding 29,388,160
- ------------------------------------------------------------------------------------------------------
Net asset value per share $14.98
- ------------------------------------------------------------------------------------------------------
Offering price per share (100/94.25Xnet asset value per share) $15.89
- ------------------------------------------------------------------------------------------------------
Class B shares
- ------------------------------------------------------------------------------------------------------
Net assets $105,213,354
Shares outstanding 6,903,273
- ------------------------------------------------------------------------------------------------------
Net asset value and offering price per share $15.24
- ------------------------------------------------------------------------------------------------------
Class C shares
- ------------------------------------------------------------------------------------------------------
Net assets $120,006,629
Shares outstanding 7,934,565
- ------------------------------------------------------------------------------------------------------
Net asset value and offering price per share $15.12
- ------------------------------------------------------------------------------------------------------
Class I shares
- ------------------------------------------------------------------------------------------------------
Net assets $4,383,416
Shares outstanding 294,580
- ------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per share $14.88
- ------------------------------------------------------------------------------------------------------
Class R shares
- ------------------------------------------------------------------------------------------------------
Net assets $1,314,709
Shares outstanding 88,104
- ------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per share $14.92
- ------------------------------------------------------------------------------------------------------
Class R1 shares
- ------------------------------------------------------------------------------------------------------
Net assets $710,430
Shares outstanding 47,066
- ------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per share $15.09
- ------------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities (unaudited) - continued
Class R2 shares
- ------------------------------------------------------------------------------------------------------
Net assets $105,117
Shares outstanding 6,945
- ------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per share $15.14
- ------------------------------------------------------------------------------------------------------
Class R3 shares
- ------------------------------------------------------------------------------------------------------
Net assets $1,750,173
Shares outstanding 117,425
- ------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per share $14.90
- ------------------------------------------------------------------------------------------------------
Class R4 shares
- ------------------------------------------------------------------------------------------------------
Net assets $3,044,728
Shares outstanding 203,630
- ------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per share $14.95
- ------------------------------------------------------------------------------------------------------
Class R5 shares
- ------------------------------------------------------------------------------------------------------
Net assets $167,226
Shares outstanding 11,161
- ------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per share $14.98
- ------------------------------------------------------------------------------------------------------
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
- ------------------------------------------------------------------------------------------------------
Income
Interest $5,823,638
Dividends 5,145,863
Foreign taxes withheld (348,853)
- ------------------------------------------------------------------------------------------------------
Total investment income $10,620,648
- ------------------------------------------------------------------------------------------------------
Expenses
Management fee $2,719,112
Distribution and service fees 1,843,294
Shareholder servicing costs 444,985
Administrative services fee 60,988
Retirement plan administration and services fees 5,076
Independent trustees' compensation 13,988
Custodian fee 221,846
Shareholder communications 38,084
Auditing fees 28,236
Legal fees 5,645
Miscellaneous 86,494
- ------------------------------------------------------------------------------------------------------
Total expenses $5,467,748
- ------------------------------------------------------------------------------------------------------
Fees paid indirectly (33,323)
Reduction of expenses by investment adviser (548,137)
- ------------------------------------------------------------------------------------------------------
Net expenses $4,886,288
- ------------------------------------------------------------------------------------------------------
Net investment income $5,734,360
- ------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
- ------------------------------------------------------------------------------------------------------
Realized gain (loss) (identified cost basis)
Investment transactions $30,081,992
Futures contracts 53,707
Foreign currency transactions (107,562)
- ------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments and foreign
currency transactions $30,028,137
- ------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation)
Investments $12,810,672
Futures contracts (17,322)
Translation of assets and liabilities in foreign currencies (722,782)
- ------------------------------------------------------------------------------------------------------
Net unrealized gain (loss) on investments and foreign
currency translation $12,070,568
- ------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and
foreign currency $42,098,705
- ------------------------------------------------------------------------------------------------------
Change in net assets from operations $47,833,065
- ------------------------------------------------------------------------------------------------------
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
(UNAUDITED)
CHANGE IN NET ASSETS
FROM OPERATIONS
- ------------------------------------------------------------------------------------------------------
Net investment income $5,734,360 $9,930,822
Net realized gain (loss) on investments and foreign
currency transactions 30,028,137 48,637,642
Net unrealized gain (loss) on investments and foreign
currency translation 12,070,568 24,371,558
- ------------------------------------------------------------------------------------------------------
Change in net assets from operations $47,833,065 $82,940,022
- ------------------------------------------------------------------------------------------------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ------------------------------------------------------------------------------------------------------
From net investment income
Class A $(3,583,897) $(5,593,645)
Class B (568,816) (715,557)
Class C (587,282) (585,189)
Class I (45,080) (65,432)
Class R (12,137) (29,988)
Class R1 (4,583) (1,946)
Class R2 (647) (1,176)
Class R3 (9,838) (8,358)
Class R4 (16,533) (9,161)
Class R5 (4,229) (3,213)
From net realized gain on investments and foreign
currency transactions
Class A (28,109,668) (27,058,316)
Class B (7,838,388) (9,148,385)
Class C (7,029,814) (5,867,929)
Class I (294,017) (248,822)
Class R (130,716) (161,515)
Class R1 (56,034) (6,293)
Class R2 (6,592) (9,823)
Class R3 (80,623) (12,793)
Class R4 (107,918) (4,033)
Class R5 (48,474) (3,950)
- ------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(48,535,286) $(49,535,524)
- ------------------------------------------------------------------------------------------------------
Change in net assets from fund share transactions $49,392,554 $35,594,361
- ------------------------------------------------------------------------------------------------------
Total change in net assets $48,690,333 $68,998,859
- ------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets - continued
SIX MONTHS ENDED YEAR ENDED
4/30/07 10/31/06
(UNAUDITED)
NET ASSETS
- ------------------------------------------------------------------------------------------------------
At beginning of period 628,305,680 559,306,821
At end of period (including undistributed net investment
income of $1,015,268 and $113,950, respectively) $676,996,013 $628,305,680
- ------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Statements
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the fund's financial performance for the semiannual period
and the past 5 fiscal years (or life of a particular share class, if shorter). Certain information reflects financial results
for a single fund share. The total returns in the table represent the rate by which an investor would have earned (or lost) on
an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.
SIX MONTHS YEARS ENDED 10/31
ENDED -----------------------------------------------------------------------
CLASS A 4/30/07 2006 2005 2004 2003 2002
(UNAUDITED)
Net asset value, beginning of period $15.05 $14.30 $14.73 $12.98 $11.41 $11.64
- -------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM
INVESTMENT OPERATIONS
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.15 $0.28 $0.24 $0.19 $0.18 $0.21
Net realized and unrealized
gain (loss) on investments and
foreign currency 0.96 1.80 0.94 1.97 1.63 (0.33)
- -------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $1.11 $2.08 $1.18 $2.16 $1.81 $(0.12)
- -------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.13) $(0.22) $(0.56) $(0.41) $(0.24) $(0.11)
From net realized gain on
investments and foreign
currency transactions (1.05) (1.11) (1.05) -- -- --
- -------------------------------------------------------------------------------------------------------------------------------
Total distributions declared
to shareholders $(1.18) $(1.33) $(1.61) $(0.41) $(0.24) $(0.11)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $14.98 $15.05 $14.30 $14.73 $12.98 $11.41
- -------------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s)(t) 7.69(n) 15.62 8.26 16.94 16.09 (1.02)
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions(f) 1.47(a) 1.52 1.52 1.54 1.54 1.53
Expenses after expense reductions (f) 1.30(a) 1.30 1.48 1.54 N/A N/A
Net investment income 2.00(a) 1.95 1.64 1.37 1.53 1.79
Portfolio turnover 31 82 82 76 105 72
Net assets at end of period
(000 omitted) $440,300 $403,848 $353,745 $298,826 $261,042 $213,983
- -------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED ----------------------------------------------------------------------
CLASS B 4/30/07 2006 2005 2004 2003 2002
(UNAUDITED)
Net asset value, beginning of period $15.28 $14.47 $14.82 $13.03 $11.43 $11.65
- -------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM
INVESTMENT OPERATIONS
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.10 $0.19 $0.14 $0.10 $0.11 $0.13
Net realized and unrealized
gain (loss) on investments and
foreign currency 0.99 1.82 0.95 1.99 1.62 (0.31)
- -------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $1.09 $2.01 $1.09 $2.09 $1.73 $(0.18)
- -------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.08) $(0.09) $(0.39) $(0.30) $(0.13) $(0.04)
From net realized gain on
investments and foreign
currency transactions (1.05) (1.11) (1.05) -- -- --
- -------------------------------------------------------------------------------------------------------------------------------
Total distributions declared
to shareholders $(1.13) $(1.20) $(1.44) $(0.30) $(0.13) $(0.04)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $15.24 $15.28 $14.47 $14.82 $13.03 $11.43
- -------------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s)(t) 7.40(n) 14.84 7.56 16.14 15.33 (1.58)
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 2.12(a) 2.17 2.17 2.20 2.20 2.18
Expenses after expense reductions (f) 1.95(a) 1.95 2.13 2.20 N/A N/A
Net investment income 1.32(a) 1.29 0.98 0.72 0.88 1.12
Portfolio turnover 31 82 82 76 105 72
Net assets at end of period
(000 omitted) $105,213 $115,336 $124,013 $129,141 $129,378 $84,729
- -------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED ------------------------------------------------------------------
CLASS C 4/30/07 2006 2005 2004 2003 2002
(UNAUDITED)
Net asset value, beginning of period $15.18 $14.39 $14.76 $12.99 $11.40 $11.62
- -------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM
INVESTMENT OPERATIONS
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.10 $0.19 $0.15 $0.10 $0.11 $0.13
Net realized and unrealized gain (loss)
on investments and foreign currency 0.97 1.81 0.94 1.97 1.62 (0.31)
- -------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $1.07 $2.00 $1.09 $2.07 $1.73 $(0.18)
- -------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.08) $(0.10) $(0.41) $(0.30) $(0.14) $(0.04)
From net realized gain on investments
and foreign currency transactions (1.05) (1.11) (1.05) -- -- --
- -------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to
shareholders $(1.13) $(1.21) $(1.46) $(0.30) $(0.14) $(0.04)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $15.12 $15.18 $14.39 $14.76 $12.99 $11.40
- -------------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s)(t) 7.35(n) 14.87 7.59 16.12 15.27 (1.56)
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 2.12(a) 2.17 2.16 2.20 2.20 2.18
Expenses after expense reductions (f) 1.95(a) 1.95 2.12 2.20 N/A N/A
Net investment income 1.35(a) 1.29 1.00 0.72 0.89 1.13
Portfolio turnover 31 82 82 76 105 72
Net assets at end of period (000 omitted) $120,007 $99,019 $75,974 $57,119 $54,438 $35,660
- -------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED ------------------------------------------------------------------
CLASS I 4/30/07 2006 2005 2004 2003 2002
(UNAUDITED)
Net asset value, beginning of period $14.95 $14.23 $14.69 $12.96 $11.42 $11.65
- -------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM
INVESTMENT OPERATIONS
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.17 $0.32 $0.29 $0.24 $0.25 $0.25
Net realized and unrealized gain (loss)
on investments and foreign currency 0.96 1.79 0.93 1.96 1.60 (0.32)
- -------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $1.13 $2.11 $1.22 $2.20 $1.85 $(0.07)
- -------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.15) $(0.28) $(0.63) $(0.47) $(0.31) $(0.16)
From net realized gain on investments and
foreign currency transactions (1.05) (1.11) (1.05) -- -- --
- -------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to
shareholders $(1.20) $(1.39) $(1.68) $(0.47) $(0.31) $(0.16)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $14.88 $14.95 $14.23 $14.69 $12.96 $11.42
- -------------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 7.93(n) 16.00 8.65 17.31 16.49 (0.65)
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.12(a) 1.12 1.16 1.16 1.20 1.18
Expenses after expense reductions (f) 0.95(a) 0.95 1.12 1.16 N/A N/A
Net investment income 2.34(a) 2.28 1.99 1.59 1.93 2.14
Portfolio turnover 31 82 82 76 105 72
Net assets at end of period (000 omitted) $4,383 $4,133 $3,170 $2,286 $56,010 $1,540
- -------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED ----------------------------------------------------------
CLASS R 4/30/07 2006 2005 2004 2003(i)
(UNAUDITED)
Net asset value, beginning of period $14.98 $14.24 $14.71 $12.97 $11.54
- -------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.13 $0.26 $0.22 $0.21 $0.14
Net realized and unrealized gain (loss) on
investments and foreign currency 0.97 1.78 0.93 1.94 1.40(g)
- -------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $1.10 $2.04 $1.15 $2.15 $1.54
- -------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.11) $(0.19) $(0.57) $(0.41) $(0.11)
From net realized gain on investments and
foreign currency transactions (1.05) (1.11) (1.05) -- --
- -------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(1.16) $(1.30) $(1.62) $(0.41) $(0.11)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $14.92 $14.98 $14.24 $14.71 $12.97
- -------------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 7.66(n) 15.39 8.08 16.89 13.41(n)
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.62(a) 1.68 1.65 1.71 1.68(a)
Expenses after expense reductions (f) 1.45(a) 1.45 1.61 1.71 N/A
Net investment income 1.80(a) 1.81 1.52 1.24 1.34(a)
Portfolio turnover 31 82 82 76 105
Net assets at end of period (000 omitted) $1,315 $2,364 $2,043 $1,043 $12
- -------------------------------------------------------------------------------------------------------------------------------
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 $15.17 $14.40 $14.42
- --------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.08 $0.18 $0.08
Net realized and unrealized gain (loss) on investments and
foreign currency 0.98 1.81 0.06(g)
- --------------------------------------------------------------------------------------------------------------------
Total from investment operations $1.06 $1.99 $0.14
- --------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------------------------
From net investment income $(0.09) $(0.11) $(0.16)
From net realized gain on investments and foreign
currency transactions (1.05) (1.11) --
- --------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(1.14) $(1.22) $(0.16)
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $15.09 $15.17 $14.40
- --------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 7.26(n) 14.78 0.99(n)
- --------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- --------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 2.30(a) 2.39 2.34(a)
Expenses after expense reductions (f) 2.05(a) 2.05 2.28(a)
Net investment income 1.12(a) 1.23 0.91(a)
Portfolio turnover 31 82 82
Net assets at end of period (000 Omitted) $710 $363 $52
- --------------------------------------------------------------------------------------------------------------------
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 $15.19 $14.42 $14.42
- --------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.12 $0.23 $0.10
Net realized and unrealized gain (loss) on investments and
foreign currency 0.98 1.81 0.07(g)
- --------------------------------------------------------------------------------------------------------------------
Total from investment operations $1.10 $2.04 $0.17
- --------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------------------------
From net investment income $(0.10) $(0.16) $(0.17)
From net realized gain on investments and foreign
currency transactions (1.05) (1.11) --
- --------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(1.15) $(1.27) $(0.17)
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $15.14 $15.19 $14.42
- --------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 7.54(n) 15.16 1.20(n)
- --------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- --------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.99(a) 2.07 2.03(a)
Expenses after expense reductions (f) 1.70(a) 1.70 1.97(a)
Net investment income 1.59(a) 1.54 1.23(a)
Portfolio turnover 31 82 82
Net assets at end of period (000 Omitted) $105 $94 $51
- --------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED ----------------------------------------------
CLASS R3 4/30/07 2006 2005 2004
(UNAUDITED)
Net asset value, beginning of period $14.97 $14.24 $14.67 $12.97
- -----------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.12 $0.25 $0.18 $0.12
Net realized and unrealized gain (loss) on investments
and foreign currency 0.97 1.77 0.94 1.99
- -----------------------------------------------------------------------------------------------------------------------------
Total from investment operations $1.09 $2.02 $1.12 $2.11
- -----------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.11) $(0.18) $(0.50) $(0.41)
From net realized gain on investments and
foreign currency transactions (1.05) (1.11) (1.05) --
- -----------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(1.16) $(1.29) $(1.55) $(0.41)
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $14.90 $14.97 $14.24 $14.67
- -----------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 7.57(n) 15.19 7.87 16.52
- -----------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.85(a) 1.94 1.92 1.95
Expenses after expense reductions (f) 1.60(a) 1.60 1.87 1.95
Net investment income 1.64(a) 1.76 1.24 0.91
Portfolio turnover 31 82 82 76
Net assets at end of period (000 Omitted) $1,750 $1,185 $159 $133
- -----------------------------------------------------------------------------------------------------------------------------
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 $15.02 $14.28 $14.26
- --------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.15 $0.31 $0.14
Net realized and unrealized gain (loss) on investments and
foreign currency 0.96 1.75 0.07(g)
- --------------------------------------------------------------------------------------------------------------------
Total from investment operations $1.11 $2.06 $0.21
- --------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------------------------
From net investment income $(0.13) $(0.21) $(0.19)
From net realized gain on investments and foreign
currency transactions (1.05) (1.11) --
- --------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(1.18) $(1.32) $(0.19)
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $14.95 $15.02 $14.28
- --------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 7.71(n) 15.53 1.48(n)
- --------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- --------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.52(a) 1.57 1.54(a)
Expenses after expense reductions (f) 1.35(a) 1.35 1.50(a)
Net investment income 2.08(a) 2.10 1.70(a)
Portfolio turnover 31 82 82
Net assets at end of period (000 Omitted) $3,045 $1,303 $51
- --------------------------------------------------------------------------------------------------------------------
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 $15.03 $14.29 $14.26
- --------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.14 $0.25 $0.17
Net realized and unrealized gain (loss) on investments and
foreign currency 0.99 1.87 0.06(g)
- --------------------------------------------------------------------------------------------------------------------
Total from investment operations $1.13 $2.12 $0.23
- --------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------------------------
From net investment income $(0.13) $(0.27) $(0.20)
From net realized gain on investments and foreign
currency transactions (1.05) (1.11) --
- --------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(1.18) $(1.38) $(0.20)
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $14.98 $15.03 $14.29
- --------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 7.84(n) 15.95 1.62(n)
- --------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- --------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.22(a) 1.30 1.24(a)
Expenses after expense reductions (f) 1.05(a) 1.05 1.20(a)
Net investment income 2.00(a) 1.77 2.00(a)
Portfolio turnover 31 82 82
Net assets at end of period (000 Omitted) $167 $661 $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.
(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, December 31, 2002 (Class R) and April 1, 2005 (Classes R1, R2, R4, and R5)
through the stated period end.
(n) Not annualized.
(r) Certain expenses have been reduced without which performance would have been lower.
(s) From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
(t) Total returns do not include any applicable sales charges.
SEE NOTES TO FINANCIAL STATEMENTS
NOTES TO FINANCIAL STATEMENTS
(unaudited)
(1) BUSINESS AND ORGANIZATION
MFS Global Total Return Fund (the fund) is a series of MFS Series Trust VI
(the trust). The trust is organized as a Massachusetts business trust and is
registered under the Investment Company Act of 1940, as amended, as an open-
end management investment company.
(2) SIGNIFICANT ACCOUNTING POLICIES
GENERAL - The preparation of financial statements in conformity with U.S.
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities, and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. The fund can
invest in foreign securities, including securities of emerging market issuers.
Investments in foreign securities are vulnerable to the effects of changes in
the relative values of the local currency and the U.S. dollar and to the effects
of changes in each country's legal, political, and economic environment. The
markets of emerging markets countries are generally more volatile than the
markets of developed countries with more mature economies. All of the risks of
investing in foreign securities previously described are heightened when
investing in emerging markets countries.
INVESTMENT VALUATIONS - Equity securities, including restricted equity
securities, are generally valued at the last sale or official closing price as
reported by an independent pricing service on the market or exchange on which
they are primarily traded. For securities for which there were no sales reported
that day, equity securities are generally valued at the last quoted daily bid
quotation as reported by an independent pricing service on the market or
exchange on which they are primarily traded. For securities held short for which
there were no sales reported for the day, the position is generally valued at
the last quoted daily ask quotation as reported by an independent pricing
service on the market or exchange on which such securities are primarily traded.
Debt instruments (other than short-term instruments), including restricted debt
instruments, are generally valued at an evaluated or composite bid as reported
by an independent pricing service. 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. Forward foreign
currency contracts are generally valued at the mean of bid and asked prices for
the time period interpolated from rates reported by an independent pricing
service for proximate time periods. 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 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 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 equity 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.
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 and other funds managed by Massachusetts
Financial Services Company (MFS), may utilize a joint trading account for the
purpose of entering into one or more repurchase agreements.
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.
FOREIGN CURRENCY TRANSLATION - Purchases and sales of foreign investments,
income, and expenses are converted into U.S. dollars based upon currency
exchange rates prevailing on the respective dates of such transactions. Gains
and losses attributable to foreign currency exchange rates on sales of
securities are recorded for financial statement purposes as net realized gains
and losses on investments. Gains and losses attributable to foreign exchange
rate movements on income and expenses are recorded for financial statement
purposes as foreign currency transaction gains and losses. That portion of both
realized and unrealized gains and losses on investments that results from
fluctuations in foreign currency exchange rates is not separately disclosed.
DERIVATIVE RISK - The fund may invest in derivatives for hedging or non- hedging
purposes. While hedging can reduce or eliminate losses, it can also reduce or
eliminate gains. When the fund uses derivatives as an investment to gain market
exposure, or for hedging purposes, gains and losses from derivative instruments
may be substantially greater than the derivative's original cost. Derivative
instruments include purchased options, futures contracts, and forward foreign
currency exchange contracts.
PURCHASED OPTIONS - The fund may purchase call or put options for a premium.
Purchasing call options may be a hedge against an anticipated increase in the
dollar cost of securities to be acquired or to increase the fund's exposure to
the underlying instrument. Purchasing put options may hedge against a decline in
the value of portfolio securities. The premium paid is included as an investment
in the Statement of Assets and Liabilities and is subsequently adjusted to the
current value of the option. Premiums paid for purchased options which have
expired are treated as realized losses on investments in the Statement of
Operations. Premiums paid for purchased options which are exercised or closed
are added to the amount paid or offset against the proceeds on the underlying
security or financial instrument to determine the realized gain or loss. The
risk of loss associated with purchased options is limited to the premium paid.
FUTURES CONTRACTS - The fund may enter into futures contracts for the delayed
delivery of securities or currency, or contracts based on financial indices at a
fixed price on a future date. In entering such contracts, the fund is required
to deposit with the broker either in cash or securities an amount equal to a
certain percentage of the contract amount. Subsequent payments are made or
received by the fund each day, depending on the daily fluctuations in the value
of the contract, and are recorded for financial statement purposes as unrealized
gains or losses by the fund. Upon entering into such contracts, the fund bears
the risk of interest or exchange rates or securities prices moving unexpectedly,
in which case, the fund may not achieve the anticipated benefits of the futures
contracts and may realize a loss.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS - The fund may enter into forward
foreign currency exchange contracts for the purchase or sale of a specific
foreign currency at a fixed price on a future date. Risks may arise upon
entering into these contracts from the potential inability of counterparties to
meet the terms of their contracts and from unanticipated movements in the value
of the contract. The fund may enter into forward foreign currency exchange
contracts for hedging purposes as well as for non-hedging purposes. For hedging
purposes, the fund may enter into contracts to deliver or receive foreign
currency it will receive from or require for its normal investment activities.
The fund may also use contracts in a manner intended to protect foreign currency
denominated securities from declines in value due to unfavorable exchange rate
movements. For non-hedging purposes, the fund may enter into contracts with the
intent of changing the relative exposure of the fund's portfolio of securities
to different currencies to take advantage of anticipated changes. The forward
foreign currency exchange contracts are adjusted by the daily exchange rate of
the underlying currency and any gains or losses are recorded as unrealized until
the contract settlement date. On contract settlement date, the gains or losses
are recorded as realized gains or losses on foreign currency transactions.
SECURITY LOANS - State Street Bank and Trust Company ("State Street") and
JPMorgan 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. Net 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.
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. 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. 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, wash sale loss deferrals, straddle loss deferrals, foreign currency
transactions, derivative transactions, and treating a portion of the proceeds
from redemptions as a distribution for tax purposes.
The tax character of distributions made during the current period will be
determined at fiscal year end. The tax character of distributions declared to
shareholders is as follows:
10/31/06
Ordinary income (including any short-term
capital gains) $15,135,577
Long-term capital gain 34,399,947
----------------------------------------------------------
Total distributions $49,535,524
The federal tax cost and the tax basis components of distributable earnings
were as follows:
AS OF 4/30/2007
Cost of investments $650,959,225
----------------------------------------------------------
Gross appreciation $97,032,626
Gross depreciation (6,915,018)
----------------------------------------------------------
Net unrealized appreciation (depreciation) $90,117,608
AS OF 10/31/2006
Undistributed ordinary income 4,280,090
Undistributed long-term capital gain 40,022,611
Capital loss carryforwards (6,974,702)
Other temporary differences (544,246)
Net unrealized appreciation (depreciation) 77,276,882
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:
10/31/10 $(6,974,702)
The availability of a portion of the capital loss carryforwards, which were
acquired on August 25, 2003 in connection with the MFS Global Asset Allocation
Fund merger, may be limited in a given year.
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 daily net
assets of each class, without distinction between share classes. Dividends are
declared separately for each class. Differences in per share dividend rates are
generally due to differences in separate class expenses. Class B shares will
convert to Class A shares approximately eight years after purchase.
(3) TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISER - The fund has an investment advisory agreement with MFS to
provide overall investment management and related administrative services and
facilities to the fund.
The management fee is computed daily and paid monthly at an annual rate of 0.84%
of the fund's average daily net assets. The investment adviser has agreed in
writing to reduce its management fee to 0.75% in excess of $500 million of
average daily net assets and 0.70% of average daily net assets in excess of $1
billion. This written agreement may be rescinded only upon consent of the fund's
Board of Trustees. This management fee reduction amounted to $68,183, 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 0.82% 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 certain other fees and expenses, such that
total annual fund operating expenses do not exceed the following rates annually
of the fund's average daily net assets with respect to each class:
CLASS A CLASS B CLASS C CLASS I CLASS R CLASS R1 CLASS R2 CLASS R3 CLASS R4 CLASS R5
1.30% 1.95% 1.95% 0.95% 1.45% 2.05% 1.70% 1.60% 1.35% 1.05%
This written agreement may be rescinded only upon consent of the fund's Board
of Trustees. For the six months ended April 30, 2007, this reduction amounted
to $477,343 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 $59,649 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% 0.35% $728,805
Class B 0.75% 0.25% 1.00% 1.00% 558,073
Class C 0.75% 0.25% 1.00% 1.00% 543,239
Class R 0.25% 0.25% 0.50% 0.50% 4,192
Class R1 0.50% 0.25% 0.75% 0.75% 2,565
Class R2 0.25% 0.25% 0.50% 0.50% 248
Class R3 0.25% 0.25% 0.50% 0.50% 3,924
Class R4 -- 0.25% 0.25% 0.25% 2,248
- ---------------------------------------------------------------------------------------------------------------------
Total Distribution and Service Fees $1,843,294
(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.
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 $3,051
Class B 47,789
Class C 5,121
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 $205,922, which
equated to 0.0636% 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 $203,843. 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 0.0188% 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% $1,479
Class R2 0.40% 0.25% 0.25% 185
Class R3 0.25% 0.15% 0.15% 1,819
Class R4 0.15% 0.15% 0.15% 1,349
Class R5 0.10% 0.10% 0.10% 244
- -----------------------------------------------------------------------------------------------------------------
Total Retirement Plan Administration and Services Fees $5,076
(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, 0.15% for Class R2, 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, 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 $985 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 $725. The fund also has an
unfunded retirement benefit deferral plan for certain independent trustees which
resulted in an expense of $3,581. Both amounts are included in independent
trustees' compensation for the six months ended April 30, 2007. The liability
for deferred retirement benefits payable to certain independent trustees under
both plans amounted to $64,864 at April 30, 2007, and is included in payable for
independent trustees' compensation.
OTHER - This fund and certain other MFS funds (the funds) have entered into a
services agreement (the Agreement) which provides for payment of fees by the
funds to Tarantino LLC in return for the provision of services of an Independent
Chief Compliance Officer (ICCO) for the funds. The ICCO is an officer of the
funds and the sole member of Tarantino LLC. The funds can terminate the
Agreement with Tarantino LLC at any time under the terms of the Agreement. For
the six months ended April 30, 2007, the fee paid to Tarantino LLC was $2,508.
MFS has agreed to reimburse the fund for a portion of the payments made by the
funds to Tarantino LLC in the amount of $1,626, 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 $43,516,481 $30,704,702
- -------------------------------------------------------------------------------
Investments (non-U.S. government securities) $139,827,140 $162,593,430
- -------------------------------------------------------------------------------
(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 4,506,863 $66,219,392 6,872,236 $98,398,262
Class B 838,791 12,539,260 1,847,929 26,911,822
Class C 1,558,501 23,077,601 2,074,023 30,045,833
Class I 58,298 844,069 93,995 1,351,358
Class R 24,430 357,750 38,205 540,251
Class R1 56,471 849,344 32,080 460,229
Class R2 3,013 44,133 6,340 91,115
Class R3 129,104 1,857,173 119,751 1,681,818
Class R4 199,754 2,930,638 87,324 1,264,079
Class R5 12,258 180,377 40,840 598,993
- ----------------------------------------------------------------------------------------------------------
7,387,483 $108,899,737 11,212,723 $161,343,760
Shares issued to shareholders in
reinvestment of distributions
Class A 1,979,759 $28,622,476 2,178,230 $29,679,452
Class B 479,051 7,048,534 584,438 8,061,736
Class C 379,320 5,539,911 334,397 4,589,203
Class I 22,098 317,109 22,802 309,017
Class R 9,147 131,654 13,311 180,617
Class R1 4,160 60,617 596 8,239
Class R2 496 7,239 802 10,999
Class R3 6,287 90,461 1,539 21,151
Class R4 8,624 124,451 942 13,194
Class R5 423 6,111 363 4,958
- ----------------------------------------------------------------------------------------------------------
2,889,365 $41,948,563 3,137,420 $42,878,566
Shares reacquired
Class A (3,939,008) $(57,979,125) (6,951,254) $(99,304,209)
Class B (1,960,952) (29,277,990) (3,455,601) (50,075,224)
Class C (526,217) (7,801,456) (1,164,802) (16,756,790)
Class I (62,250) (909,157) (63,103) (886,437)
Class R (103,226) (1,515,448) (37,228) (530,589)
Class R1 (37,495) (549,463) (12,358) (182,604)
Class R2 (2,741) (40,086) (4,474) (62,809)
Class R3 (97,090) (1,399,161) (53,312) (745,149)
Class R4 (91,509) (1,326,943) (5,058) (72,237)
Class R5 (45,469) (656,917) (810) (11,917)
- ----------------------------------------------------------------------------------------------------------
(6,865,957) $(101,455,746) (11,748,000) $(168,627,965)
Net change
Class A 2,547,614 $36,862,743 2,099,212 $28,773,505
Class B (643,110) (9,690,196) (1,023,234) (15,101,666)
Class C 1,411,604 20,816,056 1,243,618 17,878,246
Class I 18,146 252,021 53,694 773,938
Class R (69,649) (1,026,044) 14,288 190,279
Class R1 23,136 360,498 20,318 285,864
Class R2 768 11,286 2,668 39,305
Class R3 38,301 548,473 67,978 957,820
Class R4 116,869 1,728,146 83,208 1,205,036
Class R5 (32,788) (470,429) 40,393 592,034
- ----------------------------------------------------------------------------------------------------------
3,410,891 $49,392,554 2,602,143 $35,594,361
(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 $1,708 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
1-800-637-8255 02205-5824
24 hours a day
OVERNIGHT MAIL
ACCOUNT SERVICE AND MFS Service Center, Inc.
LITERATURE 500 Boylston Street
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 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 Access, and select the eDelivery sign up options.
If you own your MFS fund shares through a financial institution or a retirement
plan, MFS TALK, MFS Access, and eDelivery may not be available to you.
- -------------------------------------------------------------------------------
M F S(R)
INVESTMENT MANAGEMENT
M F S(R)
INVESTMENT MANAGEMENT
[graphic omitted]
SEMIANNUAL REPORT
MFS(R) UTILITIES FUND
LETTER FROM THE CEO 1
- -------------------------------------------------------------
PORTFOLIO COMPOSITION 2
- -------------------------------------------------------------
EXPENSE TABLE 3
- -------------------------------------------------------------
PORTFOLIO OF INVESTMENTS 5
- -------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES 11
- -------------------------------------------------------------
STATEMENT OF OPERATIONS 14
- -------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS 15
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS 16
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 26
- -------------------------------------------------------------
BOARD REVIEW OF INVESTMENT ADVISORY AGREEMENT 38
- -------------------------------------------------------------
PROXY VOTING POLICIES AND INFORMATION 38
- -------------------------------------------------------------
QUARTERLY PORTFOLIO DISCLOSURE 38
- -------------------------------------------------------------
CONTACT INFORMATION BACK COVER
- -------------------------------------------------------------
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.
- ------------------------------------------------------------------------------
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
- ------------------------------------------------------------------------------
4/30/07
MMU-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)
Common Stocks 91.8%
Convertible Preferred Stocks 2.6%
Bonds 1.2%
Convertible Bonds 0.4%
Cash & Other Net Assets 4.0%
TOP TEN HOLDINGS (i)
NRG Energy, Inc. 4.5%
------------------------------------------------
Williams Cos., Inc. 3.1%
------------------------------------------------
AT&T, Inc. 2.8%
------------------------------------------------
Entergy Corp. 2.6%
------------------------------------------------
E.ON AG 2.6%
------------------------------------------------
Constellation Energy Group, Inc. 2.5%
------------------------------------------------
Public Service Enterprise Group, Inc. 2.5%
------------------------------------------------
Equitable Resources, Inc. 2.5%
------------------------------------------------
American Electric Power Co., Inc. 2.4%
------------------------------------------------
FPL Group, Inc. 1.9%
------------------------------------------------
TOP FIVE INDUSTRIES (i)
Utilities - Electric Power 43.9%
------------------------------------------------
Telephone Services 17.9%
------------------------------------------------
Telecommunications - Wireless 8.2%
------------------------------------------------
Natural Gas - Pipeline 6.5%
------------------------------------------------
Natural Gas - Distribution 5.5%
------------------------------------------------
COUNTRY WEIGHTINGS (i)
United States 66.7%
------------------------------------------------
Spain 6.1%
------------------------------------------------
Germany 4.0%
------------------------------------------------
Canada 3.1%
------------------------------------------------
Brazil 2.8%
------------------------------------------------
United Kingdom 2.3%
------------------------------------------------
France 2.3%
------------------------------------------------
Mexico 2.1%
------------------------------------------------
Norway 1.6%
------------------------------------------------
Other Countries 9.0%
------------------------------------------------
(i) For purposes of this presentation, the bond component includes both accrued
interest amounts and the equivalent exposure from any derivative holdings,
if applicable.
Percentages are based on net assets as of 04/30/07.
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.
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
Actual 1.06% $1,000.00 $1,220.40 $5.84
A ------------------------------------------------------------------------
Hypothetical (h) 1.06% $1,000.00 $1,019.54 $5.31
- --------------------------------------------------------------------------------
Actual 1.80% $1,000.00 $1,215.20 $9.89
B ------------------------------------------------------------------------
Hypothetical (h) 1.80% $1,000.00 $1,015.87 $9.00
- --------------------------------------------------------------------------------
Actual 1.80% $1,000.00 $1,215.00 $9.89
C ------------------------------------------------------------------------
Hypothetical (h) 1.80% $1,000.00 $1,015.87 $9.00
- --------------------------------------------------------------------------------
Actual 0.81% $1,000.00 $1,221.40 $4.46
I ------------------------------------------------------------------------
Hypothetical (h) 0.81% $1,000.00 $1,020.78 $4.06
- --------------------------------------------------------------------------------
Actual 1.30% $1,000.00 $1,218.30 $7.15
R ------------------------------------------------------------------------
Hypothetical (h) 1.30% $1,000.00 $1,018.35 $6.51
- --------------------------------------------------------------------------------
Actual 1.90% $1,000.00 $1,214.80 $10.43
R1 ------------------------------------------------------------------------
Hypothetical (h) 1.90% $1,000.00 $1,015.37 $9.49
- --------------------------------------------------------------------------------
Actual 1.56% $1,000.00 $1,216.90 $8.57
R2 ------------------------------------------------------------------------
Hypothetical (h) 1.56% $1,000.00 $1,017.06 $7.80
- --------------------------------------------------------------------------------
Actual 1.45% $1,000.00 $1,217.70 $7.97
R3 ------------------------------------------------------------------------
Hypothetical (h) 1.45% $1,000.00 $1,017.60 $7.25
- --------------------------------------------------------------------------------
Actual 1.21% $1,000.00 $1,219.00 $6.66
R4 ------------------------------------------------------------------------
Hypothetical (h) 1.21% $1,000.00 $1,018.79 $6.06
- --------------------------------------------------------------------------------
Actual 0.91% $1,000.00 $1,220.40 $5.01
R5 ------------------------------------------------------------------------
Hypothetical (h) 0.91% $1,000.00 $1,020.28 $4.56
- --------------------------------------------------------------------------------
(h) 5% class return per year before expenses.
(p) Expenses paid is equal to each class' annualized expense ratio, as shown
above, multiplied by the average account value over the period, multiplied
by the number of days in the period, divided by the number of days in the
year. Expenses paid do not include any applicable sales charges (loads) or
redemption fees. If these transaction costs had been included, your costs
would have been higher.
PORTFOLIO OF INVESTMENTS
4/30/07 (unaudited)
The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized
by broad-based asset classes.
Common Stocks - 91.8%
- -------------------------------------------------------------------------------------------------------
ISSUER SHARES/PAR VALUE ($)
- -------------------------------------------------------------------------------------------------------
Broadcasting - 2.8%
- -------------------------------------------------------------------------------------------------------
Citadel Broadcasting Corp. (l) 1,014,640 $ 9,314,395
Grupo Televisa S.A., ADR 879,100 24,658,755
News Corp., "A" 1,150,500 25,759,695
R.H. Donnelley Corp. (l) 112,900 8,816,361
Viacom, Inc., "B" (a) 414,550 17,100,188
--------------
$ 85,649,394
- -------------------------------------------------------------------------------------------------------
Cable TV - 3.9%
- -------------------------------------------------------------------------------------------------------
Cablevision Systems Corp., "A" 376,600 $ 12,344,948
Comcast Corp., "Special A" (a) 1,477,500 39,006,000
Net Servicos de Comuicacao S.A., IPS 1,052,100 16,081,147
Time Warner Cable, Inc. (a) 1,430,500 52,671,010
--------------
$ 120,103,105
- -------------------------------------------------------------------------------------------------------
Energy - Independent - 3.0%
- -------------------------------------------------------------------------------------------------------
Anadarko Petroleum Corp. 190,900 $ 8,907,394
Apache Corp. 193,400 14,021,500
Devon Energy Corp. 116,900 8,518,503
Talisman Energy, Inc. 1,511,200 28,690,050
Ultra Petroleum Corp. (a) 300,600 17,050,032
Venoco, Inc. (a) 676,770 12,872,165
--------------
$ 90,059,644
- -------------------------------------------------------------------------------------------------------
Energy - Integrated - 1.1%
- -------------------------------------------------------------------------------------------------------
OAO Gazprom, ADR 225,100 $ 8,970,235
TOTAL S.A. 325,000 24,002,302
--------------
$ 32,972,537
- -------------------------------------------------------------------------------------------------------
Internet - 0.2%
- -------------------------------------------------------------------------------------------------------
Iliad S.A. (l) 57,272 $ 5,804,168
- -------------------------------------------------------------------------------------------------------
Natural Gas - Distribution - 5.5%
- -------------------------------------------------------------------------------------------------------
AGL Resources, Inc. (l) 611,125 $ 26,608,383
Dynegy, Inc. 551,480 5,189,427
Equitable Resources, Inc. 1,459,200 75,892,992
Gaz de France (l) 345,000 16,145,846
Questar Corp. 200,408 19,465,629
Spectra Energy Corp. 995,600 25,985,160
--------------
$ 169,287,437
- -------------------------------------------------------------------------------------------------------
Natural Gas - Pipeline - 5.9%
- -------------------------------------------------------------------------------------------------------
El Paso Corp. 1,994,900 $ 29,923,500
Enagas S.A. (l) 2,189,055 52,879,412
Williams Cos., Inc. 3,244,150 95,702,425
--------------
$ 178,505,337
- -------------------------------------------------------------------------------------------------------
Oil Services - 2.6%
- -------------------------------------------------------------------------------------------------------
GlobalSantaFe Corp. 650,500 $ 41,586,465
Noble Corp. 355,700 29,953,497
Schlumberger Ltd. (a) 123,000 9,081,090
--------------
$ 80,621,052
- -------------------------------------------------------------------------------------------------------
Telecommunications - Wireless - 8.2%
- -------------------------------------------------------------------------------------------------------
America Movil S.A. de C.V., "L", ADR 730,500 $ 38,373,165
Cellcom Israel Ltd. 2,128,480 42,505,746
Dobson Communications Corp. (l) 2,809,170 25,591,539
Hutchison Telecommunications International Ltd. (a) 4,701,000 9,690,486
Leap Wireless International, Inc. 62,900 4,801,157
Metropcs Communications, Inc. 253,200 7,102,260
Millicom International Cellular S.A. 10,500 853,125
Mobile TeleSystems OJSC, ADR 118,300 6,518,330
Ntelos Holdings Corp. 356,300 7,175,882
Rogers Communications, Inc., "B" 767,700 29,447,070
Tim Participacoes S.A., ADR 580,200 20,922,012
Turkcell Iletisim Hizmetleri A.S. 497,400 2,757,165
Turkcell Iletisim Hizmetleri A.S., ADR (l) 1,104,300 15,614,802
Vodafone Group PLC 13,920,600 39,618,388
--------------
$ 250,971,127
- -------------------------------------------------------------------------------------------------------
Telephone Services - 17.4%
- -------------------------------------------------------------------------------------------------------
ALLTEL Corp. 258,500 $ 16,205,365
American Tower Corp., "A" (a) 37,200 1,413,600
AT&T, Inc. 2,219,700 85,946,784
Citizens Communications Co. 643,506 10,019,389
Crown Castle International Corp. 86,500 2,970,410
Embarq Corp. (l) 617,500 37,074,700
Fairpoint Communications, Inc. (l) 233,900 4,387,964
France Telecom S.A. (l) 259,210 7,639,288
Global Crossing Ltd. (a)(l) 172,900 4,986,436
Hellenic Telecommunications Organization S.A. (a) 628,500 18,036,270
Neuf Cegetel 89,294 3,626,379
Orascom Telecom Holding (S.A.E), GDR 395,344 26,600,573
Qwest Communications International, Inc. (a)(l) 5,642,500 50,105,400
Royal KPN N.V. (l) 348,200 5,899,570
Singapore Telecommunications Ltd. 6,472,950 14,010,146
Telecom Argentina S.A., ADR 650,500 14,675,280
Telecom Egypt 506,300 1,445,447
Telecom Egypt, GDR 110,500 1,497,275
Telefonica S.A. 1,990,400 44,410,943
Telekom Austria AG 753,700 21,261,447
Telenor A.S.A. (l) 2,545,300 47,620,306
TELUS Corp. (non-voting shares) 659,040 35,230,390
Verizon Communications, Inc. 1,222,200 46,663,596
Windstream Corp. (l) 2,116,576 30,944,341
--------------
$ 532,671,299
- -------------------------------------------------------------------------------------------------------
Utilities - Electric Power - 41.2%
- -------------------------------------------------------------------------------------------------------
AES Corp. 793,700 $ 17,453,463
AES Tiete S.A., IPS 618,141,500 21,205,228
American Electric Power Co., Inc. (l) 1,466,400 73,642,608
CEZ AS 877,400 42,938,011
CMS Energy Corp. (l) 2,887,150 53,470,018
Constellation Energy Group, Inc. 872,303 77,739,643
Covanta Holding Corp. 623,080 15,290,383
Dominion Resources, Inc. 300,600 27,414,720
DPL, Inc. (l) 1,069,723 33,535,816
DTE Energy Co. 486,000 24,586,740
E.ON AG (l) 521,207 78,489,758
Edison International 1,065,400 55,773,690
Eletropaulo Metropolitana S.A., IPS 551,280,000 28,394,429
Enersis S.A., ADR 1,639,700 31,055,918
Entergy Corp. 142,200 16,088,508
Entergy Corp., "A" (l) 1,145,080 79,354,044
Exelon Corp. 276,600 20,858,406
FirstEnergy Corp. 319,100 21,839,204
FPL Group, Inc. 916,900 59,020,853
Iberdrola S.A. (l) 879,800 43,499,086
Iberdrola S.A. 115,841 5,739,071
Integrys Energy Group, Inc. 53,400 2,995,740
International Power PLC 3,537,501 30,900,937
Mirant Corp. (a) 1,264,600 56,742,602
NRG Energy, Inc. (a)(l) 1,734,700 136,971,912
Pepco Holdings, Inc. 552,600 16,312,752
Public Service Enterprise Group, Inc. 897,900 77,623,455
RAO Unified Energy System of Russia, GDR 57,100 7,309,404
Red Electrica de Espana (l) 907,924 41,579,213
RWE AG (l) 419,400 44,353,850
SUEZ S.A. 26,700 1,515,103
TXU Corp. 86,300 5,659,554
Veolia Environment (l) 138,250 11,419,024
--------------
$1,260,773,143
- -------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS (IDENTIFIED COST, $2,227,871,702) $2,807,418,243
- -------------------------------------------------------------------------------------------------------
Bonds - 1.1%
- -------------------------------------------------------------------------------------------------------
Asset Backed & Securitized - 0.0%
- -------------------------------------------------------------------------------------------------------
Falcon Franchise Loan LLC, FRN, 3.426%, 2023 (i)(n) $ 3,588,151 $ 370,764
- -------------------------------------------------------------------------------------------------------
Telephone Services - 0.5%
- -------------------------------------------------------------------------------------------------------
Embarq Corp., 7.082%, 2016 $ 14,030,000 $ 14,494,940
- -------------------------------------------------------------------------------------------------------
Utilities - Electric Power - 0.6%
- -------------------------------------------------------------------------------------------------------
Beaver Valley Funding Corp., 9%, 2017 $ 3,147,000 $ 3,573,041
Mirant North American LLC, 7.375%, 2013 7,700,000 8,142,750
TXU Eastern Funding Co., 6.75%, 2009 (d) 793,000 39,650
TXU Energy Co., 7%, 2013 8,015,000 8,345,482
--------------
$ 20,100,923
- -------------------------------------------------------------------------------------------------------
TOTAL BONDS (IDENTIFIED COST, $35,238,508) $ 34,966,627
- -------------------------------------------------------------------------------------------------------
Convertible Preferred Stocks - 2.6%
- -------------------------------------------------------------------------------------------------------
Natural Gas - Pipeline - 0.6%
- -------------------------------------------------------------------------------------------------------
El Paso Corp., 4.99% (n) 14,300 $ 18,790,200
- -------------------------------------------------------------------------------------------------------
Utilities - Electric Power - 2.0%
- -------------------------------------------------------------------------------------------------------
NRG Energy, Inc., 5.75% 129,200 $ 45,316,900
PNM Resources, Inc., 6.75% 266,800 14,535,264
--------------
$ 59,852,164
- -------------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCKS (IDENTIFIED COST, $62,963,595) $ 78,642,364
- -------------------------------------------------------------------------------------------------------
Convertible Bonds - 0.4%
- -------------------------------------------------------------------------------------------------------
Energy - Independent - 0.2%
- -------------------------------------------------------------------------------------------------------
Peabody Energy, 4.75%, 2066 $ 4,220,000 $ 4,583,975
- -------------------------------------------------------------------------------------------------------
Oil Services - 0.1%
- -------------------------------------------------------------------------------------------------------
Transocean, Inc., 1.5%, 2021 $ 2,860,000 $ 3,464,175
- -------------------------------------------------------------------------------------------------------
Utilities - Electric Power - 0.1%
- -------------------------------------------------------------------------------------------------------
Covanta Holding Corp., 1%, 2027 $ 2,837,000 $ 2,922,110
- -------------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS (IDENTIFIED COST, $10,315,315) $ 10,970,260
- -------------------------------------------------------------------------------------------------------
Short-Term Obligations - 3.6% (y)
- -------------------------------------------------------------------------------------------------------
Barton Capital Corp., 5.27%, due 5/04/07 (t) $ 20,000,000 $ 19,991,217
New Center Asset Trust, 5.29%, due 5/01/07 78,166,000 78,166,000
Windmill Funding Corp., 5.26%, due 5/18/07 (t) 13,238,000 13,205,118
- -------------------------------------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS, AT AMORTIZED COST $ 111,362,335
- -------------------------------------------------------------------------------------------------------
Collateral for Securities Loaned - 9.3%
- -------------------------------------------------------------------------------------------------------
Merrill Lynch & Co., Repurchase Agreement, 5.23%, dated
4/30/07, due 5/01/07, total to be received $148,139,057
(secured by various U.S. Treasury and Federal Agency
obligations and Mortgage Backed securities in an individually
traded account), at Cost $148,117,539 $ 148,117,539
Navigator Securities Lending Prime Portfolio,
at Cost and Net Asset Value 136,332,325 136,332,325
- -------------------------------------------------------------------------------------------------------
TOTAL COLLATERAL FOR SECURITIES LOANED $ 284,449,864
- -------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (IDENTIFIED COST, $2,732,201,319) (k) $3,327,809,693
- -------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - (8.8)% (270,213,479)
- -------------------------------------------------------------------------------------------------------
NET ASSETS - 100.0% $3,057,596,214
- -------------------------------------------------------------------------------------------------------
(a) Non-income producing security.
(d) Non-income producing security - in default.
(i) Interest only security for which the fund receives interest on notional principal (Par amount). Par
amount shown is the notional principal and does not reflect the cost of the security.
(k) As of April 30, 2007, the fund held securities fair valued in accordance with the policies adopted
by the Board of Trustees, aggregating $487,077,361 and 14.64% of market value. An independent
pricing service provided an evaluated bid for 1.37% of the market value.
(l) All or a portion of this security is on loan.
(n) Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities
may be sold in the ordinary course of business in transactions exempt from registration, normally to
qualified institutional buyers. At period end, the aggregate value of these securities was
$19,160,964, representing 0.6% of net assets.
(t) Security exempt from registration with the U.S. Securities and Exchange Commission under Section
4(2) of the Securities Act of 1933.
(y) The rate shown represents an annualized yield at time of purchase.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS AT 4/30/07
Appreciation and Depreciation in the table below are reported by currency.
NET
UNREALIZED
CONTRACTS TO SETTLEMENT IN EXCHANGE CONTRACTS APPRECIATION
TYPE CURRENCY DELIVER/RECEIVE DATE RANGE FOR AT VALUE (DEPRECIATION)
- ------------------------------------------------------------------------------------------------------------
APPRECIATION
- ------------------------------------------------------------------------------------------------------------
BUY EUR 9,415,828 5/23/07 - 6/20/07 $ 12,682,858 $ 12,878,090 $ 195,232
SELL GBP 23,788,191 6/20/07 47,672,757 47,545,384 127,373
-----------
$ 322,605
===========
DEPRECIATION
- ----------------------------------------------------------------------------------------------------------
SELL EUR 187,676,718 5/23/07 - 6/20/07 $251,354,375 $256,682,100 $(5,327,725)
BUY GBP 838,488 6/20/07 1,680,708 1,675,884 (4,824)
SELL GBP 242,149 6/20/07 482,056 483,983 (1,927)
-----------
$(5,334,476)
===========
At April 30, 2007, forward foreign currency purchases and sales under master netting agreements excluded
above amounted to a net payable of $268,641 with Goldman Sachs & Co.
At April 30, 2007, the fund had sufficient cash and/or other liquid securities to cover any commitments
under these derivative contracts.
The following abbreviations are used in this report and are defined:
ADR American Depository Receipt
FRN Floating Rate Note. Interest rate resets periodically and may not be the rate reported at period end.
GDR Global Depository Receipt
IPS International Preference Stock
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
- -------------------------------------------------------------------------------------------------------
Investments, at value, including $297,946,262 of securities
on loan (identified cost, $2,732,201,319) $3,327,809,693
Cash 283,881
Foreign currency, at value (identified cost, $4,216,393) 4,211,124
Receivable for forward foreign currency exchange contracts 322,605
Receivable for investments sold 11,195,430
Receivable for fund shares sold 14,949,328
Interest and dividends receivable 6,539,374
Other assets 30,084
- -------------------------------------------------------------------------------------------------------
Total assets $3,365,341,519
- -------------------------------------------------------------------------------------------------------
LIABILITIES
- -------------------------------------------------------------------------------------------------------
Distributions payable $287,432
Payable for forward foreign currency exchange contracts 5,334,476
Payable for forward foreign currency exchange contracts
subject to master netting agreements 268,641
Payable for investments purchased 12,230,709
Payable for fund shares reacquired 4,123,114
Collateral for securities loaned, at value (c) 284,449,864
Payable to affiliates
Management fee 202,614
Shareholder servicing costs 394,887
Distribution and service fees 164,505
Administrative services fee 5,504
Retirement plan administration and services fees 1,103
Payable for independent trustees' compensation 79,809
Accrued expenses and other liabilities 202,647
- -------------------------------------------------------------------------------------------------------
Total liabilities $307,745,305
- -------------------------------------------------------------------------------------------------------
Net assets $3,057,596,214
- -------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF
- -------------------------------------------------------------------------------------------------------
Paid-in capital $2,496,747,682
Unrealized appreciation (depreciation) on investments and
translation of assets and liabilities in foreign currencies 590,317,881
Accumulated net realized gain (loss) on investments and
foreign currency transactions (28,908,243)
Accumulated distributions in excess of net investment income (561,106)
- -------------------------------------------------------------------------------------------------------
Net assets $3,057,596,214
- -------------------------------------------------------------------------------------------------------
Shares of beneficial interest outstanding 165,299,079
- -------------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities (unaudited) - continued
Class A shares
- -------------------------------------------------------------------------------------------------------
Net assets $2,014,495,523
Shares outstanding 108,802,225
- -------------------------------------------------------------------------------------------------------
Net asset value per share $18.52
- -------------------------------------------------------------------------------------------------------
Offering price per share (100/94.25Xnet asset value per share) $19.65
- -------------------------------------------------------------------------------------------------------
Class B shares
- -------------------------------------------------------------------------------------------------------
Net assets $619,104,518
Shares outstanding 33,549,067
- -------------------------------------------------------------------------------------------------------
Net asset value and offering price per share $18.45
- -------------------------------------------------------------------------------------------------------
Class C shares
- -------------------------------------------------------------------------------------------------------
Net assets $335,277,655
Shares outstanding 18,152,660
- -------------------------------------------------------------------------------------------------------
Net asset value and offering price per share $18.47
- -------------------------------------------------------------------------------------------------------
Class I shares
- -------------------------------------------------------------------------------------------------------
Net assets $16,483,248
Shares outstanding 888,780
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per share $18.55
- -------------------------------------------------------------------------------------------------------
Class R shares
- -------------------------------------------------------------------------------------------------------
Net assets $10,722,852
Shares outstanding 579,750
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per share $18.50
- -------------------------------------------------------------------------------------------------------
Class R1 shares
- -------------------------------------------------------------------------------------------------------
Net assets $3,266,045
Shares outstanding 176,996
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per share $18.45
- -------------------------------------------------------------------------------------------------------
Class R2 shares
- -------------------------------------------------------------------------------------------------------
Net assets $2,009,991
Shares outstanding 108,965
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per share $18.45
- -------------------------------------------------------------------------------------------------------
Class R3 shares
- -------------------------------------------------------------------------------------------------------
Net assets $29,774,018
Shares outstanding 1,610,425
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per share $18.49
- -------------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities (unaudited) - continued
Class R4 shares
- -------------------------------------------------------------------------------------------------------
Net assets $24,947,900
Shares outstanding 1,348,423
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per share $18.50
- -------------------------------------------------------------------------------------------------------
Class R5 shares
- -------------------------------------------------------------------------------------------------------
Net assets $1,514,464
Shares outstanding 81,788
- -------------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per share $18.52
- -------------------------------------------------------------------------------------------------------
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.
(c) Non-cash Collateral not included.
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
- --------------------------------------------------------------------------------------------------
Income
Dividends $27,763,687
Interest 4,157,354
Foreign taxes withheld (938,103)
- --------------------------------------------------------------------------------------------------
Total investment income $30,982,938
- --------------------------------------------------------------------------------------------------
Expenses
Management fee $7,597,431
Distribution and service fees 6,526,483
Shareholder servicing costs 1,699,110
Administrative services fee 216,217
Retirement plan administration and services fees 44,185
Independent trustees' compensation 33,449
Custodian fee 433,862
Shareholder communications 90,152
Auditing fees 22,883
Legal fees 17,924
Miscellaneous 123,458
- --------------------------------------------------------------------------------------------------
Total expenses $16,805,154
- --------------------------------------------------------------------------------------------------
Fees paid indirectly (78,988)
Reduction of expenses by investment adviser (16,101)
- --------------------------------------------------------------------------------------------------
Net expenses $16,710,065
- --------------------------------------------------------------------------------------------------
Net investment income $14,272,873
- --------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
- --------------------------------------------------------------------------------------------------
Realized gain (loss) (identified cost basis)
Investment transactions (s) $249,066,140
Foreign currency transactions (9,360,790)
- --------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments and foreign
currency transactions $239,705,350
- --------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation)
Investments $255,936,085
Translation of assets and liabilities in foreign currencies (2,899,445)
- --------------------------------------------------------------------------------------------------
Net unrealized gain (loss) on investments and foreign
currency translation $253,036,640
- --------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and
foreign currency $492,741,990
- --------------------------------------------------------------------------------------------------
Change in net assets from operations $507,014,863
- --------------------------------------------------------------------------------------------------
(s) Includes proceeds received from a non-recurring cash settlement in the amount of $5,225,247
from a litigation settlement against Dynegy, Inc.
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 (UNAUDITED)
FROM OPERATIONS
- ----------------------------------------------------------------------------------------------
Net investment income $14,272,873 $36,398,393
Net realized gain (loss) on investments and foreign
currency transactions 239,705,350 273,623,874
Net unrealized gain (loss) on investments and foreign
currency translation 253,036,640 142,169,409
- ----------------------------------------------------------------------------------------------
Change in net assets from operations $507,014,863 $452,191,676
- ----------------------------------------------------------------------------------------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------
From net investment income
Class A $(15,930,798) $(18,685,709)
Class B (3,854,872) (5,803,139)
Class C (1,841,042) (2,315,006)
Class I (136,090) (146,800)
Class R (95,916) (124,773)
Class R1 (14,386) (13,376)
Class R2 (11,504) (10,526)
Class R3 (163,927) (109,291)
Class R4 (147,162) (75,443)
Class R5 (9,460) (4,795)
- ----------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(22,205,157) $(27,288,858)
- ----------------------------------------------------------------------------------------------
Change in net assets from fund share transactions $346,023,748 $15,050,747
- ----------------------------------------------------------------------------------------------
Total change in net assets $830,833,454 $439,953,565
- ----------------------------------------------------------------------------------------------
NET ASSETS
- ----------------------------------------------------------------------------------------------
At beginning of period 2,226,762,760 1,786,809,195
At end of period (including accumulated distributions in
excess of net investment income of $561,106 and
undistributed net investment income of $7,371,178) $3,057,596,214 $2,226,762,760
- ----------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Statements
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the fund's financial performance for the semiannual period and
the past 5 fiscal years (or life of a particular share class, if shorter). Certain information reflects financial results for a
single fund share. The total returns in the table represent the rate by which an investor would have earned (or lost) on an
investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.
SIX MONTHS YEARS ENDED 10/31
ENDED ------------------------------------------------------------------
CLASS A 4/30/07 2006 2005 2004 2003 2002
(UNAUDITED)
Net asset value, beginning of period $15.33 $12.33 $9.98 $7.89 $6.13 $8.68
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.12 $0.30 $0.18 $0.16 $0.15 $0.16
Net realized and unrealized gain (loss)
on investments and foreign currency 3.24 2.94 2.34 2.08 1.76 (2.55)
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $3.36 $3.24 $2.52 $2.24 $1.91 $(2.39)
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.17) $(0.24) $(0.17) $(0.15) $(0.15) $(0.16)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $18.52 $15.33 $12.33 $9.98 $7.89 $6.13
- -----------------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s)(t) 22.04(n) 26.48 25.33 28.41(b)(z) 31.69 (27.78)
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.06(a) 1.11 1.13 1.15 1.19 1.15
Expenses after expense reductions (f) 1.06(a) 1.11 1.13 1.15 N/A 1.11
Net investment income 1.40(a) 2.24 1.60 1.83 2.11 2.10
Portfolio turnover 42 100 101 97 144 80
Net assets at end of period (000 omitted) $2,014,496 $1,319,703 $933,535 $586,730 $464,832 $382,712
- -----------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED ----------------------------------------------------------------
CLASS B 4/30/07 2006 2005 2004 2003 2002
(UNAUDITED)
Net asset value, beginning of period $15.28 $12.29 $9.95 $7.87 $6.11 $8.65
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.05 $0.20 $0.10 $0.10 $0.10 $0.10
Net realized and unrealized gain (loss)
on investments and foreign currency 3.23 2.93 2.32 2.05 1.76 (2.53)
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $3.28 $3.13 $2.42 $2.15 $1.86 $(2.43)
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.11) $(0.14) $(0.08) $(0.07) $(0.10) $(0.11)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $18.45 $15.28 $12.29 $9.95 $7.87 $6.11
- -----------------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s)(t) 21.52(n) 25.55 24.39 27.50(b)(z) 30.66 (28.30)
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.80(a) 1.86 1.89 1.91 1.94 1.90
Expenses after expense reductions (f) 1.80(a) 1.86 1.89 1.91 N/A 1.86
Net investment income 0.63(a) 1.51 0.88 1.10 1.38 1.35
Portfolio turnover 42 100 101 97 144 80
Net assets at end of period (000 omitted) $619,105 $597,964 $617,687 $575,642 $531,008 $481,361
- -----------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED ----------------------------------------------------------------
CLASS C 4/30/07 2006 2005 2004 2003 2002
(UNAUDITED)
Net asset value, beginning of period $15.30 $12.30 $9.96 $7.87 $6.11 $8.66
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.05 $0.20 $0.10 $0.10 $0.10 $0.10
Net realized and unrealized gain (loss)
on investments and foreign currency 3.23 2.94 2.32 2.06 1.76 (2.54)
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $3.28 $3.14 $2.42 $2.16 $1.86 $(2.44)
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.11) $(0.14) $(0.08) $(0.07) $(0.10) $(0.11)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $18.47 $15.30 $12.30 $9.96 $7.87 $6.11
- -----------------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s)(t) 21.50(n) 25.61 24.37 27.63(b)(z) 30.66 (28.38)
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.81(a) 1.86 1.88 1.90 1.94 1.90
Expenses after expense reductions (f) 1.80(a) 1.86 1.88 1.90 N/A 1.86
Net investment income 0.64(a) 1.51 0.87 1.10 1.38 1.35
Portfolio turnover 42 100 101 97 144 80
Net assets at end of period (000 omitted) $335,278 $260,120 $218,335 $177,875 $159,113 $144,861
- -----------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED --------------------------------------------------------------
CLASS I 4/30/07 2006 2005 2004 2003 2002
(UNAUDITED)
Net asset value, beginning of period $15.36 $12.35 $10.00 $7.91 $6.14 $8.69
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.14 $0.33 $0.21 $0.18 $0.17 $0.18
Net realized and unrealized gain (loss)
on investments and foreign currency 3.24 2.95 2.34 2.08 1.77 (2.55)
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $3.38 $3.28 $2.55 $2.26 $1.94 $(2.37)
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.19) $(0.27) $(0.20) $(0.17) $(0.17) $(0.18)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $18.55 $15.36 $12.35 $10.00 $7.91 $6.14
- -----------------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 22.14(n) 26.83 25.59 28.84(b)(z) 31.96 (27.56)
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 0.81(a) 0.86 0.88 0.90 0.94 0.90
Expenses after expense reductions (f) 0.81(a) 0.86 0.88 0.90 N/A 0.86
Net investment income 1.66(a) 2.45 1.81 2.07 2.36 2.33
Portfolio turnover 42 100 101 97 144 80
Net assets at end of period (000 omitted) $16,483 $9,830 $6,630 $2,823 $1,744 $1,306
- -----------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED ---------------------------------------------------
CLASS R 4/30/07 2006 2005 2004 2003(i)
(UNAUDITED)
Net asset value, beginning of period $15.32 $12.32 $9.97 $7.89 $6.40
- -----------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.09 $0.27 $0.15 $0.15 $0.11
Net realized and unrealized gain (loss)
on investments and foreign currency 3.24 2.93 2.34 2.05 1.47
- -----------------------------------------------------------------------------------------------------------------------
Total from investment operations $3.33 $3.20 $2.49 $2.20 $1.58
- -----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------
From net investment income $(0.15) $(0.20) $(0.14) $(0.12) $(0.09)
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $18.50 $15.32 $12.32 $9.97 $7.89
- -----------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 21.83(n) 26.19 25.05 28.11(b)(z) 24.78(n)
- -----------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.30(a) 1.36 1.38 1.40 1.42(a)
Expenses after expense reductions (f) 1.30(a) 1.36 1.38 1.40 N/A
Net investment income 1.13(a) 2.01 1.33 1.64 1.47(a)
Portfolio turnover 42 100 101 97 144
Net assets at end of period (000 omitted) $10,723 $10,123 $6,823 $2,169 $189
- -----------------------------------------------------------------------------------------------------------------------
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 $15.28 $12.29 $11.04
- ----------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------
Net investment income (d) $0.05 $0.19 $0.01
Net realized and unrealized gain (loss)
on investments and foreign currency 3.22 2.92 1.29
- ----------------------------------------------------------------------------------------
Total from investment operations $3.27 $3.11 $1.30
- ----------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------
From net investment income $(0.10) $(0.12) $(0.05)
- ----------------------------------------------------------------------------------------
Net asset value, end of period $18.45 $15.28 $12.29
- ----------------------------------------------------------------------------------------
Total return (%) (r)(s) 21.48(n) 25.42 11.77(n)
- ----------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.98(a) 2.06 2.08(a)
Expenses after expense reductions (f) 1.90(a) 1.96 2.05(a)
Net investment income 0.56(a) 1.40 0.12(a)
Portfolio turnover 42 100 101
Net assets at end of period (000 omitted) $3,266 $1,902 $879
- ----------------------------------------------------------------------------------------
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 $15.28 $12.29 $11.04
- ----------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------
Net investment income (d) $0.07 $0.23 $0.03
Net realized and unrealized gain (loss)
on investments and foreign currency 3.23 2.93 1.29
- ----------------------------------------------------------------------------------------
Total from investment operations $3.30 $3.16 $1.32
- ----------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------
From net investment income $(0.13) $(0.17) $(0.07)
- ----------------------------------------------------------------------------------------
Net asset value, end of period $18.45 $15.28 $12.29
- ----------------------------------------------------------------------------------------
Total return (%) (r)(s) 21.69(n) 25.86 11.96(n)
- ----------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.67(a) 1.76 1.77(a)
Expenses after expense reductions (f) 1.56(a) 1.61 1.71(a)
Net investment income 0.91(a) 1.74 0.37(a)
Portfolio turnover 42 100 101
Net assets at end of period (000 omitted) $2,010 $1,285 $377
- ----------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED ---------------------------------
CLASS R3 4/30/07 2006 2005 2004
(UNAUDITED)
Net asset value, beginning of period $15.31 $12.31 $9.97 $7.89
- -----------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------------
Net investment income (d) $0.08 $0.24 $0.11 $0.14
Net realized and unrealized gain (loss)
on investments and foreign currency 3.24 2.94 2.34 2.04
- -----------------------------------------------------------------------------------------------------
Total from investment operations $3.32 $3.18 $2.45 $2.18
- -----------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------
From net investment income $(0.14) $(0.18) $(0.11) $(0.10)
- -----------------------------------------------------------------------------------------------------
Net asset value, end of period $18.49 $15.31 $12.31 $9.97
- -----------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 21.77(n) 26.02 24.66 27.77(b)(z)
- -----------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.53(a) 1.62 1.62 1.65
Expenses after expense reductions (f) 1.45(a) 1.52 1.60 1.65
Net investment income 1.01(a) 1.73 0.97 1.42
Portfolio turnover 42 100 101 97
Net assets at end of period (000 omitted) $29,774 $14,413 $2,426 $122
- -----------------------------------------------------------------------------------------------------
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 $15.32 $12.33 $11.08
- ----------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------
Net investment income (d) $0.11 $0.26 $0.10
Net realized and unrealized gain (loss)
on investments and foreign currency 3.23 2.95 1.25
- ----------------------------------------------------------------------------------------
Total from investment operations $3.34 $3.21 $1.35
- ----------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------
From net investment income $(0.16) $(0.22) $(0.10)
- ----------------------------------------------------------------------------------------
Net asset value, end of period $18.50 $15.32 $12.33
- ----------------------------------------------------------------------------------------
Total return (%) (r)(s) 21.90(n) 26.21 12.22(n)
- ----------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.21(a) 1.28 1.26(a)
Expenses after expense reductions (f) 1.21(a) 1.28 1.26(a)
Net investment income 1.27(a) 1.93 1.50(a)
Portfolio turnover 42 100 101
Net assets at end of period (000 omitted) $24,948 $10,786 $62
- ----------------------------------------------------------------------------------------
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 $15.34 $12.33 $11.08
- ----------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------
Net investment income (d) $0.13 $0.28 $0.13
Net realized and unrealized gain (loss)
on investments and foreign currency 3.23 2.99 1.24
- ----------------------------------------------------------------------------------------
Total from investment operations $3.36 $3.27 $1.37
- ----------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------
From net investment income $(0.18) $(0.26) $(0.12)
- ----------------------------------------------------------------------------------------
Net asset value, end of period $18.52 $15.34 $12.33
- ----------------------------------------------------------------------------------------
Total return (%) (r)(s) 22.04(n) 26.75 12.41(n)
- ----------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------
Expenses before expense reductions (f) 0.91(a) 0.96 0.96(a)
Expenses after expense reductions (f) 0.91(a) 0.96 0.96(a)
Net investment income 1.59(a) 1.98 1.83(a)
Portfolio turnover 42 100 101
Net assets at end of period (000 omitted) $1,514 $637 $56
- ----------------------------------------------------------------------------------------
Any redemption fees charged by the fund during the 2004 and 2005 fiscal years resulted in
a per share impact of less than $0.01.
(a) Annualized.
(b) The fund's net asset value and total return calculation include a non-recurring
accrual recorded as a result of an administrative proceeding regarding disclosure of
brokerage allocation practices in connection with fund sales. The non-recurring
accrual did not have a material impact on the net asset value per share based on the
shares outstanding on the day the proceeds were recorded.
(d) Per share data are based on average shares outstanding.
(f) Ratios do not reflect reductions from fees paid indirectly.
(i) For the period from the class' inception, December 31, 2002 (Class R), and April 1,
2005 (Classes R1, R2, R4, and R5) through the stated period end.
(n) Not annualized.
(r) Certain expenses have been reduced without which performance would have been lower.
(s) From time to time the fund may receive proceeds from litigation settlements, without
which performance would be lower.
(t) Total returns do not include any applicable sales charges.
(z) The fund's total return calculation includes a net increase from gains realized on
the disposal of investments in violation of investment restrictions. The gains
resulted in an increase in net asset value of $0.0007 per share based on shares
outstanding on the day the gains were realized. Excluding the effect of these gains
from the fund's ending net asset value per share, the total return for each share
class for the year ended October 31, 2004 would be lower by 0.01%.
SEE NOTES TO FINANCIAL STATEMENTS
NOTES TO FINANCIAL STATEMENTS
(unaudited)
(1) BUSINESS AND ORGANIZATION
MFS Utilities Fund (the fund) is a series of MFS Series Trust VI (the trust).
The trust is organized as a Massachusetts business trust and is registered
under the Investment Company Act of 1940, as amended, as an open-end management
investment company.
(2) SIGNIFICANT ACCOUNTING POLICIES
GENERAL - The preparation of financial statements in conformity with U.S.
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities, and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. The fund
can invest in foreign securities, including securities of emerging market
issuers. Investments in foreign securities are vulnerable to the effects of
changes in the relative values of the local currency and the U.S. dollar and to
the effects of changes in each country's legal, political, and economic
environment. The markets of emerging markets countries are generally more
volatile than the markets of developed countries with more mature economies.
All of the risks of investing in foreign securities previously described are
heightened when investing in emerging markets countries.
INVESTMENT VALUATIONS - Equity securities, including restricted equity
securities, are generally valued at the last sale or official closing price as
reported by an independent pricing service on the market or exchange on which
they are primarily traded. For securities for which there were no sales
reported that day, equity securities are generally valued at the last quoted
daily bid quotation as reported by an independent pricing service on the market
or exchange on which they are primarily traded. For securities held short for
which there were no sales reported for the day, the position is generally
valued at the last quoted daily ask quotation as reported by an independent
pricing service on the market or exchange on which such securities are
primarily traded. Debt instruments (other than short-term instruments),
including restricted debt instruments, are generally valued at an evaluated or
composite bid as reported by an independent pricing service. Short-term
instruments with a maturity at issuance of 60 days or less may be valued at
amortized cost, which approximates market value. Forward foreign currency
contracts are generally valued at the mean of bid and asked prices for the time
period interpolated from rates reported by an independent pricing service for
proximate time periods. Open-end investment companies are generally valued at
their net asset value per share. Securities and other assets generally valued
on the basis of information from an independent pricing service may also be
valued at a broker-dealer bid quotation. 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 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 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 equity 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.
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 and other funds managed by
Massachusetts Financial Services Company (MFS), may utilize a joint trading
account for the purpose of entering into one or more repurchase agreements.
FOREIGN CURRENCY TRANSLATION - Purchases and sales of foreign investments,
income, and expenses are converted into U.S. dollars based upon currency
exchange rates prevailing on the respective dates of such transactions. Gains
and losses attributable to foreign currency exchange rates on sales of
securities are recorded for financial statement purposes as net realized gains
and losses on investments. Gains and losses attributable to foreign exchange
rate movements on income and expenses are recorded for financial statement
purposes as foreign currency transaction gains and losses. That portion of both
realized and unrealized gains and losses on investments that results from
fluctuations in foreign currency exchange rates is not separately disclosed.
DERIVATIVE RISK - The fund may invest in derivatives for hedging or non-
hedging purposes. While hedging can reduce or eliminate losses, it can also
reduce or eliminate gains. When the fund uses derivatives as an investment to
gain market exposure, or for hedging purposes, gains and losses from derivative
instruments may be substantially greater than the derivative's original cost.
Derivative instruments include forward foreign currency exchange contracts.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS - The fund may enter into forward
foreign currency exchange contracts for the purchase or sale of a specific
foreign currency at a fixed price on a future date. Risks may arise upon
entering into these contracts from the potential inability of counterparties to
meet the terms of their contracts and from unanticipated movements in the value
of the contract. The fund may enter into forward foreign currency exchange
contracts for hedging purposes as well as for non-hedging purposes. For hedging
purposes, the fund may enter into contracts to deliver or receive foreign
currency it will receive from or require for its normal investment activities.
The fund may also use contracts in a manner intended to protect foreign
currency denominated securities from declines in value due to unfavorable
exchange rate movements. For non-hedging purposes, the fund may enter into
contracts with the intent of changing the relative exposure of the fund's
portfolio of securities to different currencies to take advantage of
anticipated changes. The forward foreign currency exchange contracts are
adjusted by the daily exchange rate of the underlying currency and any gains or
losses are recorded as unrealized until the contract settlement date. On
contract settlement date, the gains or losses are recorded as realized gains or
losses on foreign currency transactions.
SECURITY LOANS - State Street Bank and Trust Company ("State Street") and
JPMorgan 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. Net income from securities lending is included in interest income on
the Statement of Operations. The dividend and interest income earned on the
securities loaned is accounted for in the same manner as other dividend and
interest income.
At April 30, 2007, the value of securities loaned was $297,946,262. These loans
were collateralized by cash of $284,449,864 and U.S. Treasury obligations of
$25,002,661.
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. 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. 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. The fund was a
participant in litigation against Dynegy, Inc. On November 28, 2006 and
December 8, 2006, the fund received cash settlements in the amount of
$4,054,963 and $1,170,284, respectively.
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 foreign currency transactions 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) $27,288,858
The federal tax cost and the tax basis components of distributable earnings
were as follows:
AS OF 4/30/07
Cost of investments $2,732,537,561
------------------------------------------------------------
Gross appreciation 608,067,087
Gross depreciation (12,794,955)
------------------------------------------------------------
Net unrealized appreciation (depreciation) $595,272,132
AS OF 10/31/06
Undistributed ordinary income 11,941,328
Capital loss carryforwards (269,629,338)
Other temporary differences (5,623,536)
Net unrealized appreciation (depreciation) 339,350,372
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:
10/31/10 $(269,629,338)
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 daily net
assets of each class, without distinction between share classes. Dividends are
declared separately for each class. Differences in per share dividend rates are
generally due to differences in separate class expenses. Class B shares will
convert to Class A shares approximately eight years after purchase.
(3) TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISER - The fund has an investment advisory agreement with
Massachusetts Financial Services Company (MFS) to provide overall investment
management and related administrative services and facilities to the fund. The
management fee is computed daily and paid monthly at an annual rate of 0.60% of
the fund's average daily net assets. The investment adviser has agreed in
writing to reduce its management fee to 0.55% of average daily net assets in
excess of $3.0 billion. This written agreement may be rescinded only upon
consent of the fund's Board of Trustees. For the six months ended April 30,
2007, the fund's average daily net assets did not exceed $3.0 billion and
therefore, the management fee was not reduced.
DISTRIBUTOR - MFS Fund Distributors, Inc. (MFD), a wholly-owned subsidiary of
MFS, as distributor, received $368,787 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% 0.25% $1,975,075
Class B 0.75% 0.25% 1.00% 1.00% 2,998,084
Class C 0.75% 0.25% 1.00% 1.00% 1,442,164
Class R 0.25% 0.25% 0.50% 0.50% 26,320
Class R1 0.50% 0.25% 0.75% 0.75% 9,170
Class R2 0.25% 0.25% 0.50% 0.50% 3,826
Class R3 0.25% 0.25% 0.50% 0.50% 51,462
Class R4 -- 0.25% 0.25% 0.25% 20,382
- --------------------------------------------------------------------------------------------------------
Total Distribution and Service Fees $6,526,483
(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. Payment of the 0.10%
annual Class A distribution fee is not yet in effect and will 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 $8,647
Class B 147,573
Class C 11,859
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 $797,239,
which equated to 0.0628% 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 $792,947. 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. Effective April 1,
2006, the fund's annual fixed amount is $17,500. The administrative services
fee incurred for the six months ended April 30, 2007 was equivalent to an
annual effective rate of 0.0170% 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% $5,250
Class R2 0.40% 0.25% 0.25% 2,817
Class R3 0.25% 0.15% 0.15% 23,446
Class R4 0.15% 0.15% 0.15% 12,229
Class R5 0.10% 0.10% 0.10% 443
- --------------------------------------------------------------------------------
Total Retirement Plan Administration and Services Fees $44,185
(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, 0.15% for Class R2, 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 $9,878 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 $832. The fund also has an
unfunded retirement benefit deferral plan for certain independent trustees
which resulted in an expense of $10,631. Both amounts are included in
independent trustees' compensation for the six months ended April 30, 2007. The
liability for deferred retirement benefits payable to certain independent
trustees under both plans amounted to $74,613 at April 30, 2007, and is
included in payable for independent trustees' compensation.
OTHER - This fund and certain other MFS funds (the funds) have entered into a
services agreement (the Agreement) which provides for payment of fees by the
funds to Tarantino LLC in return for the provision of services of an
Independent Chief Compliance Officer (ICCO) for the funds. The ICCO is an
officer of the funds and the sole member of Tarantino LLC. The funds can
terminate the Agreement with Tarantino LLC at any time under the terms of the
Agreement. For the six months ended April 30, 2007, the fee paid to Tarantino
LLC was $9,490. MFS has agreed to reimburse the fund for a portion of the
payments made by the funds to Tarantino LLC in the amount of $6,223, 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
$1,337,761,832 and $1,043,181,792, respectively.
(5) SHARES OF BENEFICIAL INTEREST
The fund's Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest. Transactions in
fund shares were as follows:
SIX MONTHS ENDED YEAR ENDED
4/30/07 10/31/06
SHARES AMOUNT SHARES AMOUNT
Shares sold
Class A 31,973,865 $546,849,513 33,508,984 $458,480,658
Class B 2,450,961 41,438,874 4,742,777 63,866,481
Class C 2,620,176 44,656,853 2,945,245 39,895,981
Class I 316,322 5,494,675 306,670 4,242,384
Class R 188,378 3,178,608 321,836 4,305,463
Class R1 192,475 3,250,019 86,994 1,169,275
Class R2 118,845 2,010,770 57,226 778,779
Class R3 1,268,599 21,495,074 945,010 13,009,585
Class R4 1,462,194 24,824,424 803,432 11,169,808
Class R5 45,977 800,299 40,477 573,603
- ----------------------------------------------------------------------------------------------------
40,637,792 $693,999,109 43,758,651 $597,492,017
Shares issued to shareholders in
reinvestment of distributions
Class A 820,780 $13,764,921 1,154,428 $16,017,930
Class B 197,415 3,247,455 346,869 4,817,355
Class C 78,066 1,289,116 113,999 1,591,737
Class I 7,989 134,577 10,392 144,309
Class R 4,753 78,918 7,535 104,556
Class R1 871 14,386 947 13,364
Class R2 691 11,498 746 10,526
Class R3 9,717 162,575 7,548 107,740
Class R4 8,733 147,134 5,217 75,443
Class R5 103 1,786 89 1,246
- ----------------------------------------------------------------------------------------------------
1,129,118 $18,852,366 1,647,770 $22,884,206
Shares reacquired
Class A (10,059,554) $(168,978,704) (24,317,849) $(325,008,013)
Class B (8,228,109) (137,610,856) (16,226,099) (218,698,121)
Class C (1,550,412) (25,933,457) (3,804,487) (50,809,784)
Class I (75,597) (1,270,039) (213,937) (2,834,328)
Class R (274,261) (4,638,818) (222,508) (2,972,060)
Class R1 (140,776) (2,365,765) (35,033) (477,175)
Class R2 (94,692) (1,602,542) (4,497) (60,223)
Class R3 (609,117) (10,287,327) (208,328) (2,858,235)
Class R4 (826,363) (14,037,605) (109,783) (1,555,899)
Class R5 (5,811) (102,614) (3,606) (51,638)
- ----------------------------------------------------------------------------------------------------
(21,864,692) $(366,827,727) (45,146,127) $(605,325,476)
Net change
Class A 22,735,091 $391,635,730 10,345,563 $149,490,575
Class B (5,579,733) (92,924,527) (11,136,453) (150,014,285)
Class C 1,147,830 20,012,512 (745,243) (9,322,066)
Class I 248,714 4,359,213 103,125 1,552,365
Class R (81,130) (1,381,292) 106,863 1,437,959
Class R1 52,570 898,640 52,908 705,464
Class R2 24,844 419,726 53,475 729,082
Class R3 669,199 11,370,322 744,230 10,259,090
Class R4 644,564 10,933,953 698,866 9,689,352
Class R5 40,269 699,471 36,960 523,211
- ----------------------------------------------------------------------------------------------------
19,902,218 $346,023,748 260,294 $15,050,747
(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
$5,489 and $4,018, 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
M F S(R)
INVESTMENT MANAGEMENT
[graphic omitted]
SEMIANNUAL REPORT
MFS(R) GLOBAL EQUITY FUND
LETTER FROM THE CEO 1
- -------------------------------------------------------------
PORTFOLIO COMPOSITION 2
- -------------------------------------------------------------
EXPENSE TABLE 3
- -------------------------------------------------------------
PORTFOLIO OF INVESTMENTS 5
- -------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES 10
- -------------------------------------------------------------
STATEMENT OF OPERATIONS 13
- -------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS 15
- -------------------------------------------------------------
FINANCIAL HIGHLIGHTS 17
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 28
- -------------------------------------------------------------
BOARD REVIEW OF INVESTMENT ADVISORY AGREEMENT 39
- -------------------------------------------------------------
PROXY VOTING POLICIES AND INFORMATION 39
- -------------------------------------------------------------
QUARTERLY PORTFOLIO DISCLOSURE 39
- -------------------------------------------------------------
CONTACT INFORMATION BACK COVER
- -------------------------------------------------------------
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.
- ------------------------------------------------------------------------------
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
- ------------------------------------------------------------------------------
4/30/07
LGE-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
Common Stocks 99.1%
Cash & Other Net Assets 0.9%
TOP TEN HOLDINGS
Nestle S.A. 3.5%
------------------------------------------------
Johnson & Johnson 2.8%
------------------------------------------------
Reckitt Benckiser PLC 2.5%
------------------------------------------------
Roche Holding AG 2.5%
------------------------------------------------
American Express Co. 2.2%
------------------------------------------------
GlaxoSmithKline PLC 2.1%
------------------------------------------------
Bank of New York Co., Inc. 2.0%
------------------------------------------------
UBS AG 2.0%
------------------------------------------------
LVMH Moet Hennessy Louis Vuitton S.A. 2.0%
------------------------------------------------
Diageo PLC 1.9%
------------------------------------------------
EQUITY SECTORS
Financial Services 20.8%
------------------------------------------------
Consumer Staples 15.7%
------------------------------------------------
Health Care 14.6%
------------------------------------------------
Basic Materials 7.5%
------------------------------------------------
Technology 7.2%
------------------------------------------------
Retailing 6.1%
------------------------------------------------
Leisure 5.8%
------------------------------------------------
Industrial Goods & Services 5.2%
------------------------------------------------
Energy 5.1%
------------------------------------------------
Autos & Housing 4.2%
------------------------------------------------
Utilities & Communications 3.5%
------------------------------------------------
Transportation 2.1%
------------------------------------------------
Special Products & Services 1.3%
------------------------------------------------
COUNTRY WEIGHTINGS
United States 37.8%
------------------------------------------------
France 14.7%
------------------------------------------------
Switzerland 11.6%
------------------------------------------------
United Kingdom 11.0%
------------------------------------------------
Japan 9.3%
------------------------------------------------
Germany 5.4%
------------------------------------------------
Netherlands 2.0%
------------------------------------------------
South Korea 1.6%
------------------------------------------------
Italy 1.4%
------------------------------------------------
Other Countries 5.2%
------------------------------------------------
Percentages are based on net assets as of 04/30/07.
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.
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
Actual 1.47% $1,000.00 $1,108.90 $7.69
A ------------------------------------------------------------------------
Hypothetical (h) 1.47% $1,000.00 $1,017.50 $7.35
- --------------------------------------------------------------------------------
Actual 2.22% $1,000.00 $1,104.50 $11.58
B -------------------------------------------------------------------------
Hypothetical (h) 2.22% $1,000.00 $1,013.79 $11.08
- --------------------------------------------------------------------------------
Actual 2.22% $1,000.00 $1,104.20 $11.58
C ------------------------------------------------------------------------
Hypothetical (h) 2.22% $1,000.00 $1,013.79 $11.08
- --------------------------------------------------------------------------------
Actual 1.22% $1,000.00 $1,110.00 $6.38
I ------------------------------------------------------------------------
Hypothetical (h) 1.22% $1,000.00 $1,018.74 $6.11
- --------------------------------------------------------------------------------
Actual 2.17% $1,000.00 $1,104.70 $11.32
J ------------------------------------------------------------------------
Hypothetical (h) 2.17% $1,000.00 $1,014.03 $10.84
- --------------------------------------------------------------------------------
Actual 1.72% $1,000.00 $1,107.00 $8.99
R -------------------------------------------------------------------------
Hypothetical (h) 1.72% $1,000.00 $1,016.27 $8.60
- --------------------------------------------------------------------------------
Actual 2.32% $1,000.00 $1,104.00 $12.10
R1 ------------------------------------------------------------------------
Hypothetical (h) 2.32% $1,000.00 $1,013.29 $11.58
- --------------------------------------------------------------------------------
Actual 1.97% $1,000.00 $1,106.00 $10.29
R2 ------------------------------------------------------------------------
Hypothetical (h) 1.97% $1,000.00 $1,015.03 $9.84
- --------------------------------------------------------------------------------
Actual 1.87% $1,000.00 $1,106.60 $9.77
R3 -------------------------------------------------------------------------
Hypothetical (h) 1.87% $1,000.00 $1,015.52 $9.35
- --------------------------------------------------------------------------------
Actual 1.62% $1,000.00 $1,107.90 $8.47
R4 ------------------------------------------------------------------------
Hypothetical (h) 1.62% $1,000.00 $1,016.76 $8.10
- --------------------------------------------------------------------------------
Actual 1.32% $1,000.00 $1,109.20 $6.90
R5 ------------------------------------------------------------------------
Hypothetical (h) 1.32% $1,000.00 $1,018.25 $6.61
- --------------------------------------------------------------------------------
(h) 5% class return per year before expenses.
(p) Expenses paid is equal to each class' annualized expense ratio, as shown
above, multiplied by the average account value over the period, multiplied
by the number of days in the period, divided by the number of days in the
year. Expenses paid do not include any applicable sales charges (loads) or
redemption fees. If these transaction costs had been included, your costs
would have been higher.
PORTFOLIO OF INVESTMENTS
4/30/07 (unaudited)
The Portfolio of Investments is a complete list of all securities owned by your fund. It is
categorized by broad-based asset classes.
Common Stocks - 99.1%
- -----------------------------------------------------------------------------------------------------
ISSUER SHARES/PAR VALUE ($)
- -----------------------------------------------------------------------------------------------------
Alcoholic Beverages - 2.9%
- -----------------------------------------------------------------------------------------------------
Diageo PLC 727,167 $ 15,332,869
Pernod Ricard S.A. 39,936 8,486,711
------------
$ 23,819,580
- -----------------------------------------------------------------------------------------------------
Apparel Manufacturers - 3.8%
- -----------------------------------------------------------------------------------------------------
LVMH Moet Hennessy Louis Vuitton S.A. (l) 140,530 $ 16,368,323
NIKE, Inc., "B" 264,020 14,220,117
------------
$ 30,588,440
- -----------------------------------------------------------------------------------------------------
Automotive - 4.2%
- -----------------------------------------------------------------------------------------------------
Bayerische Motoren Werke AG 169,010 $ 10,439,616
Bridgestone Corp. 222,200 4,472,904
Harley-Davidson, Inc. (l) 162,660 10,299,631
Toyota Motor Corp. 140,700 8,566,947
------------
$ 33,779,098
- -----------------------------------------------------------------------------------------------------
Biotechnology - 1.4%
- -----------------------------------------------------------------------------------------------------
Actelion Ltd. (a)(l) 12,160 $ 2,885,657
Amgen, Inc. (a) 126,370 8,105,372
------------
$ 10,991,029
- -----------------------------------------------------------------------------------------------------
Broadcasting - 4.0%
- -----------------------------------------------------------------------------------------------------
Viacom, Inc., "B" (a) 156,475 $ 6,454,594
Vivendi S.A. (l) 161,990 6,678,790
Walt Disney Co. 238,140 8,330,137
WPP Group PLC 744,100 11,016,161
------------
$ 32,479,682
- -----------------------------------------------------------------------------------------------------
Brokerage & Asset Managers - 2.8%
- -----------------------------------------------------------------------------------------------------
Goldman Sachs Group, Inc. 27,940 $ 6,107,963
Julius Baer Holding Ltd. 128,428 8,947,509
Nomura Holdings, Inc. 401,400 7,726,337
------------
$ 22,781,809
- -----------------------------------------------------------------------------------------------------
Business Services - 1.3%
- -----------------------------------------------------------------------------------------------------
Accenture Ltd., "A" 173,230 $ 6,773,293
DST Systems, Inc. (a)(l) 51,290 4,003,185
------------
$ 10,776,478
- -----------------------------------------------------------------------------------------------------
Chemicals - 3.6%
- -----------------------------------------------------------------------------------------------------
3M Co. 149,450 $ 12,369,977
Bayer AG (l) 143,280 9,821,359
Givaudan S.A. 7,280 6,806,886
------------
$ 28,998,222
- -----------------------------------------------------------------------------------------------------
Computer Software - 1.2%
- -----------------------------------------------------------------------------------------------------
Oracle Corp. (a) 502,390 $ 9,444,932
- -----------------------------------------------------------------------------------------------------
Consumer Goods & Services - 7.6%
- -----------------------------------------------------------------------------------------------------
Alberto-Culver Co. 163,220 $ 3,964,614
Henkel KGaA, IPS (l) 56,120 8,841,243
Kao Corp. 536,000 14,709,174
L'Oreal S.A. 51,010 6,115,143
Procter & Gamble Co. 112,834 7,256,355
Reckitt Benckiser PLC 369,410 20,238,404
------------
$ 61,124,933
- -----------------------------------------------------------------------------------------------------
Electrical Equipment - 4.2%
- -----------------------------------------------------------------------------------------------------
Legrand S.A. 142,950 $ 4,863,830
OMRON Corp. 159,900 4,279,491
Rockwell Automation, Inc. 158,060 9,410,892
Schneider Electric S.A. (l) 108,766 15,326,685
------------
$ 33,880,898
- -----------------------------------------------------------------------------------------------------
Electronics - 5.5%
- -----------------------------------------------------------------------------------------------------
Canon, Inc. 192,300 $ 10,745,287
Hirose Electric Co., Ltd. (l) 21,800 2,650,914
Intel Corp. 540,640 11,623,760
Ricoh Co. Ltd. 290,000 6,356,091
Samsung Electronics Co. Ltd. 20,920 12,811,646
------------
$ 44,187,698
- -----------------------------------------------------------------------------------------------------
Energy - Integrated - 5.1%
- -----------------------------------------------------------------------------------------------------
Chevron Corp. 88,690 $ 6,899,195
Exxon Mobil Corp. 130,950 10,394,811
Royal Dutch Shell PLC 286,930 10,038,598
TOTAL S.A. 183,680 13,565,362
------------
$ 40,897,966
- -----------------------------------------------------------------------------------------------------
Food & Beverages - 5.2%
- -----------------------------------------------------------------------------------------------------
General Mills, Inc. (l) 66,560 $ 3,986,944
Nestle S.A. (l) 71,352 28,269,289
PepsiCo, Inc. 149,270 9,865,254
------------
$ 42,121,487
- -----------------------------------------------------------------------------------------------------
Food & Drug Stores - 1.0%
- -----------------------------------------------------------------------------------------------------
Sally Beauty Holdings, Inc. (a)(l) 163,630 $ 1,606,847
Tesco PLC 731,246 6,718,377
------------
$ 8,325,224
- -----------------------------------------------------------------------------------------------------
Gaming & Lodging - 1.8%
- -----------------------------------------------------------------------------------------------------
Ladbrokes PLC 733,620 $ 5,956,845
William Hill PLC 725,640 8,630,982
------------
$ 14,587,827
- -----------------------------------------------------------------------------------------------------
General Merchandise - 0.8%
- -----------------------------------------------------------------------------------------------------
Wal-Mart Stores, Inc. 141,100 $ 6,761,512
- -----------------------------------------------------------------------------------------------------
Insurance - 6.0%
- -----------------------------------------------------------------------------------------------------
Aflac, Inc. 130,280 $ 6,688,575
Assicurazioni Generali S.p.A. (l) 111,140 5,113,689
AXA 275,780 12,609,123
Genworth Financial, Inc., "A" 273,340 9,974,177
QBE Insurance Group Ltd. 134,430 3,412,441
Swiss Reinsurance Co. (l) 109,528 10,326,726
------------
$ 48,124,731
- -----------------------------------------------------------------------------------------------------
Machinery & Tools - 1.0%
- -----------------------------------------------------------------------------------------------------
Fanuc Ltd. 58,800 $ 5,750,551
Pitney Bowes, Inc. 42,800 2,054,400
------------
$ 7,804,951
- -----------------------------------------------------------------------------------------------------
Major Banks - 6.4%
- -----------------------------------------------------------------------------------------------------
Banca Intesa S.p.A. (l) 709,436 $ 5,936,223
Banco Bilbao Vizcaya Argentaria S.A. (l) 170,670 4,066,389
Bank of New York Co., Inc. 406,580 16,458,358
Credit Agricole S.A. (l) 212,680 8,926,606
Erste Bank der Oesterreichischen Sparkassen AG 58,280 4,675,509
State Street Corp. (l) 170,820 11,764,373
------------
$ 51,827,458
- -----------------------------------------------------------------------------------------------------
Medical Equipment - 3.7%
- -----------------------------------------------------------------------------------------------------
DENTSPLY International, Inc. 153,170 $ 5,117,410
Medtronic, Inc. 200,710 10,623,580
Thermo Fisher Scientific, Inc. (a) 214,760 11,180,406
Waters Corp. (a)(l) 53,220 3,162,865
------------
$ 30,084,261
- -----------------------------------------------------------------------------------------------------
Natural Gas - Distribution - 1.0%
- -----------------------------------------------------------------------------------------------------
Gaz de France (l) 90,940 $ 4,255,951
Tokyo Gas Co. Ltd. 686,000 3,433,699
------------
$ 7,689,650
- -----------------------------------------------------------------------------------------------------
Network & Telecom - 0.5%
- -----------------------------------------------------------------------------------------------------
Ericsson, Inc., "B" (l) 1,107,220 $ 4,224,026
- -----------------------------------------------------------------------------------------------------
Other Banks & Diversified Financials - 5.6%
- -----------------------------------------------------------------------------------------------------
Aeon Credit Service Co. Ltd. 170,000 $ 2,832,499
American Express Co. 297,490 18,048,718
Bangkok Bank Public Co. Ltd. 983,500 3,174,116
Komercni Banka A.S. 14,703 2,757,258
PT Bank Central Asia Tbk. 4,119,500 2,383,960
UBS AG (l) 252,682 16,377,497
------------
$ 45,574,048
- -----------------------------------------------------------------------------------------------------
Pharmaceuticals - 9.5%
- -----------------------------------------------------------------------------------------------------
Eli Lilly & Co. 150,350 $ 8,890,196
GlaxoSmithKline PLC 589,390 17,049,789
Johnson & Johnson 354,540 22,768,559
Roche Holding AG 106,870 20,160,803
Sanofi-Aventis (l) 90,900 8,349,527
------------
$ 77,218,874
- -----------------------------------------------------------------------------------------------------
Railroad & Shipping - 0.5%
- -----------------------------------------------------------------------------------------------------
Canadian National Railway Co. 86,026 $ 4,321,946
- -----------------------------------------------------------------------------------------------------
Specialty Chemicals - 3.9%
- -----------------------------------------------------------------------------------------------------
Asahi Glass Co. Ltd. 272,000 $ 3,655,910
L'Air Liquide S.A., Bearer Shares 54,071 13,407,067
Praxair, Inc. 225,110 14,530,851
------------
$ 31,593,828
- -----------------------------------------------------------------------------------------------------
Specialty Stores - 0.5%
- -----------------------------------------------------------------------------------------------------
NEXT PLC 83,950 $ 3,910,979
- -----------------------------------------------------------------------------------------------------
Telephone Services - 0.7%
- -----------------------------------------------------------------------------------------------------
Singapore Telecommunications Ltd. 2,487,975 $ 5,385,009
- -----------------------------------------------------------------------------------------------------
Trucking - 1.6%
- -----------------------------------------------------------------------------------------------------
TNT N.V. (l) 141,600 $ 6,380,713
United Parcel Service, Inc., "B" 93,500 6,585,205
------------
$ 12,965,918
- -----------------------------------------------------------------------------------------------------
Utilities - Electric Power - 1.8%
- -----------------------------------------------------------------------------------------------------
E.ON AG (l) 99,180 $ 14,935,744
- -----------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS (IDENTIFIED COST, $573,352,549) $801,208,238
- -----------------------------------------------------------------------------------------------------
Short-Term Obligations - 0.6%
- -----------------------------------------------------------------------------------------------------
American Express Credit Corp., 5.29%, due 5/01/07, at Amortized
Cost and Value (y) $ 4,636,000 $ 4,636,000
- -----------------------------------------------------------------------------------------------------
Collateral for Securities Loaned - 10.1%
- -----------------------------------------------------------------------------------------------------
Morgan Stanley Repurchase Agreement, 5.23%, dated 4/30/07, due
5/01/07, total to be received $59,046,038 (secured by various
U.S. Treasury and Federal Agency obligations and Mortgage Backed
securities in an individually traded account), at Cost $59,037,461 $ 59,037,461
Navigator Securities Lending Prime Portfolio, at Cost and
Net Asset Value 22,736,813 22,736,813
- -----------------------------------------------------------------------------------------------------
TOTAL COLLATERAL FOR SECURITIES LOANED $ 81,774,274
- -----------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (IDENTIFIED COST, $659,762,823) (k) $887,618,512
- -----------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - (9.8)% (79,029,447)
- -----------------------------------------------------------------------------------------------------
NET ASSETS - 100.0% $808,589,065
- -----------------------------------------------------------------------------------------------------
(a) Non-income producing security.
(k) As of April 30, 2007, the fund had 52 securities that were fair valued, aggregating $460,178,277
and 51.84% of market value, in accordance with the policies adopted by the Board of Trustees.
(l) All or a portion of this security is on loan.
(y) The rate shown represents an annualized yield at time of purchase.
The following abbreviation is used in this report and is defined:
IPS International Preference Stock
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
- -----------------------------------------------------------------------------------------------------
Investments, at value, including $78,497,494 of securities on
loan (identified cost, $659,762,823) $887,618,512
Cash 154,725
Foreign currency, at value (identified cost, $7,778) 8,316
Receivable for investments sold 2,635,716
Receivable for fund shares sold 657,014
Interest and dividends receivable 1,806,283
Other assets 10,667
- -----------------------------------------------------------------------------------------------------
Total assets $892,891,233
- -----------------------------------------------------------------------------------------------------
LIABILITIES
- -----------------------------------------------------------------------------------------------------
Payable for fund shares reacquired $1,794,422
Collateral for securities loaned, at value 81,774,274
Payable to affiliates
Management fee 80,439
Shareholder servicing costs 388,476
Distribution and service fees 36,880
Administrative services fee 1,656
Retirement plan administration and services fees 503
Payable for independent trustees' compensation 60,752
Accrued expenses and other liabilities 164,766
- -----------------------------------------------------------------------------------------------------
Total liabilities $84,302,168
- -----------------------------------------------------------------------------------------------------
Net assets $808,589,065
- -----------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF
- -----------------------------------------------------------------------------------------------------
Paid-in capital $540,625,288
Unrealized appreciation (depreciation) on investments and
translation of assets and liabilities in foreign currencies 227,867,402
Accumulated net realized gain (loss) on investments and foreign
currency transactions 38,564,688
Undistributed net investment income 1,531,687
- -----------------------------------------------------------------------------------------------------
Net assets $808,589,065
- -----------------------------------------------------------------------------------------------------
Shares of beneficial interest outstanding 27,407,691
- -----------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities (unaudited) - continued
Class A shares
- -----------------------------------------------------------------------------------------------------
Net assets $502,978,533
Shares outstanding 16,795,385
- -----------------------------------------------------------------------------------------------------
Net asset value per share $29.95
- -----------------------------------------------------------------------------------------------------
Offering price per share (100/94.25Xnet asset value per share) $31.78
- -----------------------------------------------------------------------------------------------------
Class B shares
- -----------------------------------------------------------------------------------------------------
Net assets $126,795,472
Shares outstanding 4,489,232
- -----------------------------------------------------------------------------------------------------
Net asset value and offering price per share $28.24
- -----------------------------------------------------------------------------------------------------
Class C shares
- -----------------------------------------------------------------------------------------------------
Net assets $46,133,683
Shares outstanding 1,671,856
- -----------------------------------------------------------------------------------------------------
Net asset value and offering price per share $27.59
- -----------------------------------------------------------------------------------------------------
Class I shares
- -----------------------------------------------------------------------------------------------------
Net assets $73,915,846
Shares outstanding 2,423,725
- -----------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per share $30.50
- -----------------------------------------------------------------------------------------------------
Class J shares
- -----------------------------------------------------------------------------------------------------
Net assets $18,184,132
Shares outstanding 651,994
- -----------------------------------------------------------------------------------------------------
Net asset value and redemption price per share $27.89
- -----------------------------------------------------------------------------------------------------
Offering price per share (100/97.00Xnet asset value per share) $28.75
- -----------------------------------------------------------------------------------------------------
Class R shares
- -----------------------------------------------------------------------------------------------------
Net assets $13,683,210
Shares outstanding 461,881
- -----------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per share $29.62
- -----------------------------------------------------------------------------------------------------
Class R1 shares
- -----------------------------------------------------------------------------------------------------
Net assets $2,239,366
Shares outstanding 79,756
- -----------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per share $28.08
- -----------------------------------------------------------------------------------------------------
Class R2 shares
- -----------------------------------------------------------------------------------------------------
Net assets $736,273
Shares outstanding 26,073
- -----------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per share $28.24
- -----------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities (unaudited) - continued
Class R3 shares
- -----------------------------------------------------------------------------------------------------
Net assets $12,121,182
Shares outstanding 412,173
- -----------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per share $29.41
- -----------------------------------------------------------------------------------------------------
Class R4 shares
- -----------------------------------------------------------------------------------------------------
Net assets $11,729,528
Shares outstanding 393,222
- -----------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per share $29.83
- -----------------------------------------------------------------------------------------------------
Class R5 shares
- -----------------------------------------------------------------------------------------------------
Net assets $71,840
Shares outstanding 2,394
- -----------------------------------------------------------------------------------------------------
Net asset value, offering price, and redemption price per share $30.00
- -----------------------------------------------------------------------------------------------------
Shares outstanding are rounded for presentation purposes.
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
- -------------------------------------------------------------------------------------------------
Income
Dividends $11,668,940
Interest 324,437
Other 21,700
Foreign taxes withheld (525,533)
- -------------------------------------------------------------------------------------------------
Total investment income $11,489,544
- -------------------------------------------------------------------------------------------------
EXPENSES
- -------------------------------------------------------------------------------------------------
Management fee $3,507,724
Distribution and service fees 1,653,179
Shareholder servicing costs 743,247
Administrative services fee 72,456
Retirement plan administration and services fees 21,264
Independent trustees' compensation 13,949
Custodian fee 224,915
Shareholder communications 54,504
Auditing fees 24,893
Legal fees 13,862
Miscellaneous 101,148
- -------------------------------------------------------------------------------------------------
Total expenses $6,431,141
- -------------------------------------------------------------------------------------------------
Fees paid indirectly (24,010)
Reduction of expenses by investment adviser (6,124)
- -------------------------------------------------------------------------------------------------
Net expenses $6,401,007
- -------------------------------------------------------------------------------------------------
Net investment income $5,088,537
- -------------------------------------------------------------------------------------------------
Statement of Operations (unaudited) - continued
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
- -------------------------------------------------------------------------------------------------
Realized gain (loss) (identified cost basis)
Investment transactions $38,859,642
Foreign currency transactions (28,382)
- -------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments and foreign
currency transactions $38,831,260
- -------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation)
- -------------------------------------------------------------------------------------------------
Investments $36,444,831
Translation of assets and liabilities in foreign currencies 4,043
- -------------------------------------------------------------------------------------------------
Net unrealized gain (loss) on investments and foreign
currency translation $36,448,874
- -------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and
foreign currency $75,280,134
- -------------------------------------------------------------------------------------------------
Change in net assets from operations $80,368,671
- -------------------------------------------------------------------------------------------------
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)
- -----------------------------------------------------------------------------------------------
Net investment income $5,088,537 $10,780,892
Net realized gain (loss) on investments and foreign
currency transactions 38,831,260 96,401,241
Net unrealized gain (loss) on investments and foreign
currency translation 36,448,874 47,921,907
- -----------------------------------------------------------------------------------------------
Change in net assets from operations $80,368,671 $155,104,040
- -----------------------------------------------------------------------------------------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------
From net investment income
Class A $(9,448,779) $--
Class B (1,851,724) --
Class C (633,188) --
Class I (1,459,047) --
Class J (257,963) --
Class R (252,787) --
Class R1 (23,168) --
Class R2 (12,087) --
Class R3 (117,690) --
Class R4 (181,575) --
Class R5 (1,407) --
From net realized gain on investments and foreign
currency transactions
Class A (49,984,260) (18,099,702)
Class B (15,617,271) (6,962,364)
Class C (4,798,630) (1,607,519)
Class I (6,908,588) (1,898,929)
Class J (2,165,492) (882,139)
Class R (1,519,317) (585,544)
Class R1 (163,635) (31,501)
Class R2 (74,843) (8,875)
Class R3 (719,759) (159,137)
Class R4 (939,438) (4,035)
Class R5 (6,949) (2,344)
- -----------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(97,137,597) $(30,242,089)
- -----------------------------------------------------------------------------------------------
Statements of Changes in Net Assets - continued
SIX MONTHS ENDED YEAR ENDED
4/30/07 10/31/06
(UNAUDITED)
Change in net assets from fund share transactions $63,311,777 $(25,725,538)
- -----------------------------------------------------------------------------------------------
Total change in net assets $46,542,851 $99,136,413
- -----------------------------------------------------------------------------------------------
NET ASSETS
- -----------------------------------------------------------------------------------------------
At beginning of period 762,046,214 662,909,801
At end of period (including undistributed net investment
income of $1,531,687 and $10,682,565, respectively) $808,589,065 $762,046,214
- -----------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Statements
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the fund's financial performance for the semiannual period and
the past 5 fiscal years (or life of a particular share class, if shorter). Certain information reflects financial results for a
single fund share. The total returns in the table represent the rate by which an investor would have earned (or lost) on an
investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.
SIX MONTHS YEARS ENDED 10/31
ENDED ------------------------------------------------------------
CLASS A 4/30/07 2006 2005 2004 2003 2002
(UNAUDITED)
Net asset value, beginning of period $30.78 $25.79 $22.92 $19.57 $16.55 $17.58
- -----------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (d) $0.22 $0.48 $0.06 $0.07 $0.03 $(0.00)(w)
Net realized and unrealized gain (loss)
on investments and foreign currency 2.89 5.68 2.81 3.28 2.99 (1.03)
- -----------------------------------------------------------------------------------------------------------------------------
Total from investment operations $3.11 $6.16 $2.87 $3.35 $3.02 $(1.03)
- -----------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.63) $-- $-- $-- $-- $--
From net realized gain on investments and
foreign currency transactions (3.31) (1.17) -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(3.94) $(1.17) $-- $-- $-- $--
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $29.95 $30.78 $25.79 $22.92 $19.57 $16.55
- -----------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s)(t) 10.89(n) 24.73 12.52 17.12(b) 18.25 (5.86)
- -----------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.47(a) 1.45 1.55 1.52 1.65 1.62
Expenses after expense reductions (f) 1.47(a) 1.45 1.55 1.52 N/A N/A
Net investment income (loss) 1.48(a) 1.72 0.22 0.30 0.19 (0.02)
Portfolio turnover 12 39 39 41 52 52
Net assets at end of period (000 Omitted) $502,979 $465,394 $402,985 $368,514 $345,783 $322,006
- -----------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED ------------------------------------------------------------
CLASS B 4/30/07 2006 2005 2004 2003 2002
(UNAUDITED)
Net asset value, beginning of period $29.12 $24.64 $22.06 $18.97 $16.18 $17.31
- -----------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (d) $0.10 $0.27 $(0.13) $(0.10) $(0.09) $(0.14)
Net realized and unrealized gain (loss)
on investments and foreign currency 2.72 5.38 2.71 3.19 2.88 (0.99)
- -----------------------------------------------------------------------------------------------------------------------------
Total from investment operations $2.82 $5.65 $2.58 $3.09 $2.79 $(1.13)
- -----------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.39) $-- $-- $-- $-- $--
From net realized gain on investments and
foreign currency transactions (3.31) (1.17) -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(3.70) $(1.17) $-- $-- $-- $--
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $28.24 $29.12 $24.64 $22.06 $18.97 $16.18
- -----------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s)(t) 10.45(n) 23.77 11.70 16.29(b) 17.24 (6.53)
- -----------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 2.22(a) 2.20 2.30 2.27 2.40 2.37
Expenses after expense reductions (f) 2.22(a) 2.20 2.30 2.27 N/A N/A
Net investment income (loss) 0.75(a) 1.02 (0.53) (0.45) (0.56) (0.79)
Portfolio turnover 12 39 39 41 52 52
Net assets at end of period (000 Omitted) $126,795 $139,656 $148,434 $170,783 $177,713 $172,094
- -----------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED ------------------------------------------------------------
CLASS C 4/30/07 2006 2005 2004 2003 2002
(UNAUDITED)
Net asset value, beginning of period $28.58 $24.19 $21.66 $18.63 $15.89 $17.00
- -----------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (d) $0.10 $0.25 $(0.12) $(0.09) $(0.09) $(0.14)
Net realized and unrealized gain (loss)
on investments and foreign currency 2.66 5.31 2.65 3.12 2.83 (0.97)
- -----------------------------------------------------------------------------------------------------------------------------
Total from investment operations $2.76 $5.56 $2.53 $3.03 $2.74 $(1.11)
- -----------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.44) $-- $-- $-- $-- $--
From net realized gain on investments and
foreign currency transactions (3.31) (1.17) -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(3.75) $(1.17) $-- $-- $-- $--
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $27.59 $28.58 $24.19 $21.66 $18.63 $15.89
- -----------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s)(t) 10.42(n) 23.84 11.68 16.26(b) 17.24 (6.53)
- -----------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 2.22(a) 2.20 2.30 2.27 2.40 2.37
Expenses after expense reductions (f) 2.22(a) 2.20 2.30 2.27 N/A N/A
Net investment income (loss) 0.73(a) 0.96 (0.53) (0.45) (0.56) (0.78)
Portfolio turnover 12 39 39 41 52 52
Net assets at end of period (000 Omitted) $46,134 $41,351 $33,975 $32,785 $33,253 $31,594
- -----------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED ------------------------------------------------------------
CLASS I 4/30/07 2006 2005 2004 2003 2002
(UNAUDITED)
Net asset value, beginning of period $31.32 $26.15 $23.23 $19.78 $16.70 $17.69
- -----------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.25 $0.56 $0.12 $0.12 $0.09 $0.04
Net realized and unrealized gain (loss)
on investments and foreign currency 2.94 5.78 2.85 3.33 2.99 (1.03)
- -----------------------------------------------------------------------------------------------------------------------------
Total from investment operations $3.19 $6.34 $2.97 $3.45 $3.08 $(0.99)
- -----------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.70) $-- $(0.05) $-- $-- $--
From net realized gain on investments and
foreign currency transactions (3.31) (1.17) -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(4.01) $(1.17) $(0.05) $-- $-- $--
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $30.50 $31.32 $26.15 $23.23 $19.78 $16.70
- -----------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 11.00(n) 25.09 12.79 17.44(b) 18.44 (5.60)
- -----------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.22(a) 1.20 1.30 1.26 1.40 1.37
Expenses after expense reductions (f) 1.22(a) 1.20 1.30 1.26 N/A N/A
Net investment income 1.71(a) 1.95 0.47 0.53 0.54 0.23
Portfolio turnover 12 39 39 41 52 52
Net assets at end of period (000 Omitted) $73,916 $63,714 $41,493 $37,781 $22,467 $2,325
- -----------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED ------------------------------------------------------------
CLASS J 4/30/07 2006 2005 2004 2003 2002
(UNAUDITED)
Net asset value, beginning of period $28.80 $24.36 $21.80 $18.74 $15.97 $17.08
- -----------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (d) $0.12 $0.24 $(0.11) $(0.08) $(0.09) $(0.13)
Net realized and unrealized gain (loss)
on investments and foreign currency 2.67 5.37 2.67 3.14 2.86 (0.98)
- -----------------------------------------------------------------------------------------------------------------------------
Total from investment operations $2.79 $5.61 $2.56 $3.06 $2.77 $(1.11)
- -----------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.39) $-- $-- $-- $-- $--
From net realized gain on investments and
foreign currency transactions (3.31) (1.17) -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(3.70) $(1.17) $-- $-- $-- $--
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $27.89 $28.80 $24.36 $21.80 $18.74 $15.97
- -----------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s)(t) 10.47(n) 23.88 11.74 16.33(b) 17.35 (6.50)
- -----------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 2.17(a) 2.15 2.25 2.22 2.34 2.32
Expenses after expense reductions (f) 2.17(a) 2.15 2.25 2.22 N/A N/A
Net investment income (loss) 0.87(a) 0.93 (0.47) (0.39) (0.53) (0.73)
Portfolio turnover 12 39 39 41 52 52
Net assets at end of period (000 Omitted) $18,184 $20,832 $19,136 $23,188 $24,701 $17,215
- -----------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED ------------------------------------------------
CLASS R 4/30/07 2006 2005 2004 2003(i)
(UNAUDITED)
Net asset value, beginning of period $30.46 $25.59 $22.80 $19.51 $16.57
- -----------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------------------------
Net investment income (loss) (d) $0.18 $0.40 $(0.01) $0.01 $(0.05)
Net realized and unrealized gain (loss)
on investments and foreign currency 2.84 5.64 2.81 3.28 2.99
- -----------------------------------------------------------------------------------------------------------------
Total from investment operations $3.02 $6.04 $2.80 $3.29 $2.94
- -----------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------
From net investment income $(0.55) $-- $(0.01) $-- $--
From net realized gain on investments and
foreign currency transactions (3.31) (1.17) -- -- --
- -----------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(3.86) $(1.17) $(0.01) $-- $--
- -----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $29.62 $30.46 $25.59 $22.80 $19.51
- -----------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 10.70(n) 24.44 12.26 16.86(b) 17.74(n)
- -----------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.72(a) 1.70 1.81 1.76 1.83(a)
Expenses after expense reductions (f) 1.72(a) 1.70 1.81 1.76 N/A
Net investment income (loss) 1.23(a) 1.45 (0.03) 0.06 (0.29)(a)
Portfolio turnover 12 39 39 41 52
Net assets at end of period (000 Omitted) $13,683 $13,909 $12,862 $5,994 $1,265
- -----------------------------------------------------------------------------------------------------------------
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 $29.06 $24.61 $23.89
- -------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------------------------------
Net investment income (loss) (d) $0.10 $0.21 $(0.15)
Net realized and unrealized gain (loss)
on investments and foreign currency 2.70 5.41 0.87(g)
- -------------------------------------------------------------------------------------
Total from investment operations $2.80 $5.62 $0.72
- -------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -------------------------------------------------------------------------------------
From net investment income $(0.47) $-- $--
From net realized gain on investments and
foreign currency transactions (3.31) (1.17) --
- -------------------------------------------------------------------------------------
Total distributions declared to shareholders $(3.78) $(1.17) $--
- -------------------------------------------------------------------------------------
Net asset value, end of period $28.08 $29.06 $24.61
- -------------------------------------------------------------------------------------
Total return (%) (r)(s) 10.40(n) 23.68 3.01(n)
- -------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -------------------------------------------------------------------------------------
Expenses before expense reductions (f) 2.40(a) 2.40 2.50(a)
Expenses after expense reductions (f) 2.32(a) 2.30 2.47(a)
Net investment income (loss) 0.72(a) 0.78 (1.06)(a)
Portfolio turnover 12 39 39
Net assets at end of period (000 Omitted) $2,239 $1,348 $672
- -------------------------------------------------------------------------------------
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 $29.22 $24.65 $23.89
- -------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------------------------------
Net investment income (loss) (d) $0.12 $0.33 $(0.07)
Net realized and unrealized gain (loss)
on investments and foreign currency 2.74 5.41 0.83(g)
- -------------------------------------------------------------------------------------
Total from investment operations $2.86 $5.74 $0.76
- -------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -------------------------------------------------------------------------------------
From net investment income $(0.53) $-- $--
From net realized gain on investments and
foreign currency transactions (3.31) (1.17) --
- -------------------------------------------------------------------------------------
Total distributions declared to shareholders $(3.84) $(1.17) $--
- -------------------------------------------------------------------------------------
Net asset value, end of period $28.24 $29.22 $24.65
- -------------------------------------------------------------------------------------
Total return (%) (r)(s) 10.60(n) 24.14 3.18(n)
- -------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -------------------------------------------------------------------------------------
Expenses before expense reductions (f) 2.10(a) 2.09 2.21(a)
Expenses after expense reductions (f) 1.97(a) 1.94 2.17(a)
Net investment income (loss) 0.89(a) 1.20 (0.56)(a)
Portfolio turnover 12 39 39
Net assets at end of period (000 Omitted) $736 $575 $185
- -------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED ---------------------------------
CLASS R3 4/30/07 2006 2005 2004
(UNAUDITED)
Net asset value, beginning of period $30.27 $25.48 $22.76 $19.51
- --------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------------------------
Net investment income (loss) (d) $0.15 $0.39 $(0.06) $(0.03)
Net realized and unrealized gain (loss)
on investments and foreign currency 2.84 5.57 2.78 3.28
- --------------------------------------------------------------------------------------------------
Total from investment operations $2.99 $5.96 $2.72 $3.25
- --------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------
From net investment income $(0.54) $-- $-- $--
From net realized gain on investments and
foreign currency transactions (3.31) (1.17) -- --
- --------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(3.85) $(1.17) $-- $--
- --------------------------------------------------------------------------------------------------
Net asset value, end of period $29.41 $30.27 $25.48 $22.76
- --------------------------------------------------------------------------------------------------
Total return (%) (r)(s) 10.66(n) 24.22 11.95 16.66(b)
- --------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- --------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.95(a) 1.94 2.06 2.00
Expenses after expense reductions (f) 1.87(a) 1.84 2.05 2.00
Net investment income (loss) 1.08(a) 1.42 (0.25) (0.15)
Portfolio turnover 12 39 39 41
Net assets at end of period (000 Omitted) $12,121 $6,501 $3,032 $530
- --------------------------------------------------------------------------------------------------
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 $30.71 $25.77 $24.90
- -------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------------------------------
Net investment income (d) $0.19 $0.04 $0.02
Net realized and unrealized gain (loss)
on investments and foreign currency 2.88 6.07 0.85(g)
- -------------------------------------------------------------------------------------
Total from investment operations $3.07 $6.11 $0.87
- -------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -------------------------------------------------------------------------------------
From net investment income $(0.64) $-- $--
From net realized gain on investments and
foreign currency transactions (3.31) (1.17) --
- -------------------------------------------------------------------------------------
Total distributions declared to shareholders $(3.95) $(1.17) $--
- -------------------------------------------------------------------------------------
Net asset value, end of period $29.83 $30.71 $25.77
- -------------------------------------------------------------------------------------
Total return (%) (r)(s) 10.79(n) 24.54 3.49(n)
- -------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.62(a) 1.63 1.73(a)
Expenses after expense reductions (f) 1.62(a) 1.63 1.73(a)
Net investment income 1.28(a) 0.14 0.13(a)
Portfolio turnover 12 39 39
Net assets at end of period (000 Omitted) $11,730 $8,703 $84
- -------------------------------------------------------------------------------------
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 $30.86 $25.81 $24.90
- -------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------------------------------
Net investment income (d) $0.24 $0.53 $0.08
Net realized and unrealized gain (loss)
on investments and foreign currency 2.88 5.69 0.83(g)
- -------------------------------------------------------------------------------------
Total from investment operations $3.12 $6.22 $0.91
- -------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -------------------------------------------------------------------------------------
From net investment income $(0.67) $-- $--
From net realized gain on investments and
foreign currency transactions (3.31) (1.17) --
- -------------------------------------------------------------------------------------
Total distributions declared to shareholders $(3.98) $(1.17) $--
- -------------------------------------------------------------------------------------
Net asset value, end of period $30.00 $30.86 $25.81
- -------------------------------------------------------------------------------------
Total return (%) (r)(s) 10.92(n) 24.95 3.65(n)
- -------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.32(a) 1.29 1.44(a)
Expenses after expense reductions (f) 1.32(a) 1.29 1.44(a)
Net investment income 1.63(a) 1.88 0.54(a)
Portfolio turnover 12 39 39
Net assets at end of period (000 Omitted) $72 $65 $52
- -------------------------------------------------------------------------------------
Any redemption fees charged by the fund during the 2004 and 2005 fiscal years resulted
in a per share impact of less than $0.01.
(a) Annualized.
(b) The fund's net asset value and total return calculation include a non-recurring
accrual recorded as a result of an administrative proceeding regarding disclosure
of brokerage allocation practices in connection with fund sales. The non-recurring
accrual did not have a material impact on the net asset value per share based on
the shares outstanding on the day the proceeds were recorded.
(d) Per share data are based on average shares outstanding.
(f) Ratios do not reflect reductions from fees paid indirectly.
(g) The per share amount is not in accordance with the net realized and unrealized
gain/loss for the period because of the timing of sales of fund shares and the per
share amount of realized and unrealized gains and losses at such time.
(i) For the period from the class' inception, December 31, 2002 (Class R) and April 1,
2005 (Classes R1, R2, R4, and R5) through the stated period end.
(n) Not annualized.
(r) Certain expenses have been reduced without which performance would have been
lower.
(s) From time to time the fund may receive proceeds from litigation settlements,
without which performance would be lower.
(t) Total returns do not include any applicable sales charges.
(w) Per share amount was less than $0.01.
SEE NOTES TO FINANCIAL STATEMENTS
NOTES TO FINANCIAL STATEMENTS
(unaudited)
(1) BUSINESS AND ORGANIZATION
MFS Global Equity Fund (the fund) is a series of MFS Series Trust VI (the
trust). The trust is organized as a Massachusetts business trust and is
registered under the Investment Company Act of 1940, as amended, as an open-
end management investment company.
(2) SIGNIFICANT ACCOUNTING POLICIES
GENERAL - The preparation of financial statements in conformity with U.S.
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities, and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. The fund
can invest in foreign securities, including securities of emerging market
issuers. Investments in foreign securities are vulnerable to the effects of
changes in the relative values of the local currency and the U.S. dollar and to
the effects of changes in each country's legal, political, and economic
environment. The markets of emerging markets countries are generally more
volatile than the markets of developed countries with more mature economies.
All of the risks of investing in foreign securities previously described are
heightened when investing in emerging markets countries.
INVESTMENT VALUATIONS - Equity securities, including restricted equity
securities, are generally valued at the last sale or official closing price as
reported by an independent pricing service on the market or exchange on which
they are primarily traded. For securities for which there were no sales
reported that day, equity securities are generally valued at the last quoted
daily bid quotation as reported by an independent pricing service on the market
or exchange on which they are primarily traded. For securities held short for
which there were no sales reported for the day, the position is generally
valued at the last quoted daily ask quotation as reported by an independent
pricing service on the market or exchange on which such securities are
primarily traded. Short-term instruments with a maturity at issuance of 60 days
or less may be 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. 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 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 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 equity 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.
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 and other funds managed by
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
JPMorgan 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. Net 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.
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. 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. 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 wash sale loss deferrals and treating
a portion of the proceeds from redemptions as a distribution for tax purposes.
The tax character of distributions made during the current period will be
determined at fiscal year end. The tax character of distributions declared to
shareholders is as follows:
10/31/06
Long-term capital gain $30,242,089
The federal tax cost and the tax basis components of distributable earnings
were as follows:
AS OF 4/30/07
Cost of investments $660,024,503
------------------------------------------------------------
Gross appreciation 238,444,103
Gross depreciation (10,850,094)
------------------------------------------------------------
Net unrealized appreciation (depreciation) $227,594,009
AS OF 10/31/06
Undistributed ordinary income 20,848,052
Undistributed long-term capital gain 72,803,437
Other temporary differences (67,964)
Net unrealized appreciation (depreciation) 191,149,178
The aggregate cost above includes prior fiscal year end tax adjustments.
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 daily net
assets of each class, without distinction between share classes. Dividends are
declared separately for each class. Differences in per share dividend rates are
generally due to differences in separate class expenses. Class B shares will
convert to Class A shares approximately eight years after purchase.
(3) TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISER - The fund has an investment advisory agreement with
Massachusetts Financial Services Company (MFS) to provide overall investment
management and related administrative services and facilities to the fund.
The management fee is computed daily and paid monthly at the following annual
rates:
First $1 billion of average daily net assets 0.90%
Next $1 billion of average daily net assets 0.75%
Average daily net assets in excess of $2 billion 0.65%
The management fee incurred for the six months ended April 30, 2007 was
equivalent to an annual effective rate of 0.90% of the fund's average daily net
assets.
DISTRIBUTOR - MFS Fund Distributors, Inc. (MFD), a wholly-owned subsidiary of
MFS, as distributor, received $30,728 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% 0.25% $599,666
Class B 0.75% 0.25% 1.00% 1.00% 673,797
Class C 0.75% 0.25% 1.00% 1.00% 215,647
Class J(f) 0.70% 0.25% 0.95% 0.95% 88,721
Class R 0.25% 0.25% 0.50% 0.50% 35,418
Class R1 0.50% 0.25% 0.75% 0.75% 6,099
Class R2 0.25% 0.25% 0.50% 0.50% 1,662
Class R3 0.25% 0.25% 0.50% 0.50% 19,712
Class R4 -- 0.25% 0.25% 0.25% 12,457
- --------------------------------------------------------------------------------------------------------
Total Distribution and Service Fees $1,653,179
(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. Payment of the 0.10%
annual Class A distribution fee is not yet in effect and will be implemented 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 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 $15,062
Class B 53,187
Class C 2,051
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 $248,213,
which equated to 0.0637% 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 $444,731. 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
0.0186% of the fund 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 4/01/07 RATE(g) AMOUNT
Class R1 0.45% 0.35% 0.35% $3,487
Class R2 0.40% 0.25% 0.25% 1,243
Class R3 0.25% 0.15% 0.15% 9,026
Class R4 0.15% 0.15% 0.15% 7,474
Class R5 0.10% 0.10% 0.10% 34
- --------------------------------------------------------------------------------
Total Retirement Plan Administration and Services Fees $21,264
(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, 0.15% for Class R2, 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 $4,166 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 $1,554. The fund also has an
unfunded retirement benefit deferral plan for certain independent trustees
which resulted in an expense of $2,555. Both amounts are included in
independent trustees' compensation for the six months ended April 30, 2007. The
liability for deferred retirement benefits payable to certain independent
trustees under both plans amounted to $57,643 at April 30, 2007, and is
included in payable for independent trustees' compensation.
OTHER - This fund and certain other MFS funds (the funds) have entered into a
services agreement (the Agreement) which provides for payment of fees by the
funds to Tarantino LLC in return for the provision of services of an
Independent Chief Compliance Officer (ICCO) for the funds. The ICCO is an
officer of the funds and the sole member of Tarantino LLC. The funds can
terminate the Agreement with Tarantino LLC at any time under the terms of the
Agreement. For the six months ended April 30, 2007, the fee paid to Tarantino
LLC was $3,021. MFS has agreed to reimburse the fund for a portion of the
payments made by the funds to Tarantino LLC in the amount of $1,958, 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
$94,633,000 and $119,049,840, respectively.
(5) SHARES OF BENEFICIAL INTEREST
The fund's Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest. Transactions in
fund shares were as follows:
SIX MONTHS ENDED YEAR ENDED
4/30/07 10/31/06
SHARES AMOUNT SHARES AMOUNT
Shares sold
Class A 2,353,255 $68,680,151 4,014,938 $112,614,919
Class B 472,843 13,147,078 1,117,767 29,668,548
Class C 241,787 6,527,284 334,540 8,801,328
Class I 384,791 11,512,892 740,812 21,189,033
Class J 103,103 2,737,728 406,812 10,632,135
Class R 68,742 1,993,623 130,060 3,590,592
Class R1 83,870 2,282,912 24,270 651,059
Class R2 30,290 826,205 14,979 394,125
Class R3 450,555 12,858,342 194,822 5,377,457
Class R4 444,383 12,946,609 334,485 9,358,083
Class R5 -- -- 3 75
- -----------------------------------------------------------------------------------------------------
4,633,619 $133,512,824 7,313,488 $202,277,354
SIX MONTHS ENDED YEAR ENDED
4/30/07 10/31/06
SHARES AMOUNT SHARES AMOUNT
Shares issued to shareholders in
reinvestment of distributions
Class A 1,989,092 $56,092,389 665,004 $17,230,263
Class B 602,942 16,080,488 259,668 6,406,014
Class C 186,638 4,863,794 59,990 1,452,354
Class I 291,576 8,365,321 72,189 1,898,578
Class J 318 8,366 104 2,514
Class R 61,699 1,722,626 22,642 581,662
Class R1 7,044 186,803 1,278 31,501
Class R2 3,263 86,929 359 8,875
Class R3 30,200 837,442 6,224 159,128
Class R4 39,817 1,118,849 154 4,035
Class R5 296 8,356 90 2,344
- --------------------------------------------------------------------------------------------------
3,212,885 $89,371,363 1,087,702 $27,777,268
Shares reacquired
Class A (2,664,531) $(77,712,326) (5,186,638) $(144,690,837)
Class B (1,381,879) (38,114,415) (2,607,195) (69,055,673)
Class C (203,560) (5,497,716) (351,895) (9,109,603)
Class I (287,190) (8,473,422) (364,947) (10,359,697)
Class J (174,796) (4,923,814) (469,057) (12,408,367)
Class R (125,236) (3,633,065) (198,638) (5,485,858)
Class R1 (57,546) (1,557,780) (6,472) (168,490)
Class R2 (27,150) (731,657) (3,184) (88,631)
Class R3 (283,324) (8,021,362) (105,297) (2,850,074)
Class R4 (374,328) (10,906,853) (54,566) (1,562,853)
Class R5 -- -- (3) (77)
- --------------------------------------------------------------------------------------------------
(5,579,540) $(159,572,410) (9,347,892) $(255,780,160)
Net change
Class A 1,677,816 $47,060,214 (506,696) $(14,845,655)
Class B (306,094) (8,886,849) (1,229,760) (32,981,111)
Class C 224,865 5,893,362 42,635 1,144,079
Class I 389,177 11,404,791 448,054 12,727,914
Class J (71,375) (2,177,720) (62,141) (1,773,718)
Class R 5,205 83,184 (45,936) (1,313,604)
Class R1 33,368 911,935 19,076 514,070
Class R2 6,403 181,477 12,154 314,369
Class R3 197,431 5,674,422 95,749 2,686,511
Class R4 109,872 3,158,605 280,073 7,799,265
Class R5 296 8,356 90 2,342
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2,266,964 $63,311,777 (946,702) $(25,725,538)
(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
$2,116 and $2,043, 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 VI
------------------------------------------------------------------
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.