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Statement of Additional Information

February 28, 2023

 

  Ticker Symbol
Fund

  Class
A
 

Class

B

 

Class

C

 

Class

I

 

Class

R1

 

Class

R2

 

Class

R3

 

Class

R4

 

Class

R6

MFS® Series Trust VI:                                    
MFS® Global Equity Fund   MWEFX   MWEBX   MWECX   MWEIX   MWEGX   MEQRX   MWEHX   MWELX   MWEMX
MFS® Global Total Return Fund   MFWTX   MFWBX   MFWCX   MFWIX   MFWGX   MGBRX   MFWHX   MFWJX   MFWLX
MFS® Utilities Fund   MMUFX   MMUBX   MMUCX   MMUIX   MMUGX   MURRX   MMUHX   MMUJX   MMUKX
MFS® Series Trust VIII:                                    
MFS® Global Growth Fund   MWOFX   MWOBX   MWOCX   MWOIX   MWOGX   MGWRX   MWOHX   MWOJX   MWOKX
MFS® Income Fund   MFIOX   MIOBX   MIOCX   MFIIX   N/A   N/A   N/A   N/A   MFIWX
MFS® Series Trust IX:                                    
MFS® Inflation-Adjusted Bond Fund   MIAAX   MIABX   MIACX   MIAIX   MIALX   MIATX   MIAHX   MIAJX   MIAKX
MFS® Series Trust X:                                    
MFS® Emerging Markets Debt Local Currency Fund   EMLAX   EMLBX   EMLCX   EMLIX   EMLJX   EMLKX   EMLLX   EMLMX   EMLNX
MFS® Series Trust XV:                                    
MFS® Commodity Strategy Fund   MCSAX   MCSFX   MCSHX   MCSIX   MCSNX   MCSOX   MCSQX   MCSTX   MCSRX
MFS® Global Alternative Strategy Fund   DVRAX   DVRBX   DVRCX   DVRIX   DVRFX   DVRHX   DVRJX   DVRKX   DVRLX

 

This Statement of Additional Information (“SAI”) contains additional information about each fund listed above (references to “a Fund” or “the Fund” mean each Fund listed on the cover page, unless otherwise noted), and should be read in conjunction with the Fund’s Prospectus dated February 28, 2023, as may be amended or supplemented from time to time. The Fund’s financial statements are incorporated into this SAI by reference to the Fund’s most recent Annual Report to shareholders, which is set forth in Item 1 of the Fund’s most recent annual Form N-CSR (“Form N-CSR”) filed with the U.S. Securities and Exchange Commission (the “SEC”). The Fund’s Form N-CSR is available at the hyperlink noted below for the relevant Trust. MFS Commodity Strategy Fund’s Financial Statements and Financial Highlights for the fiscal year ended October 31, 2022, are presented on a consolidated basis for the Fund and its subsidiary.

 

MFS Series Trust VI (MFS Global Equity Fund, MFS Global Total Return Fund, MFS Utilities Fund)

MFS Series Trust VIII (MFS Global Growth Fund, MFS Income Fund)

MFS Series Trust IX (MFS Inflation-Adjusted Bond Fund)

MFS Series Trust X (MFS Emerging Markets Debt Local Currency Fund)

MFS Series Trust XV (MFS Commodity Strategy Fund, MFS Global Alternative Strategy Fund)

 

You may obtain a copy of the Fund’s Prospectus and Annual Report without charge by contacting the Fund’s transfer agent, MFS Service Center, Inc. (please see back cover for address and telephone number).

 

This SAI is NOT a prospectus and is authorized for distribution to prospective investors only if preceded or accompanied by a current prospectus.

 

FEBRUARY-SAI-COMBINED-022823

 

 

 

 

Table of Contents:

 

DEFINITIONS 1
MANAGEMENT OF THE FUND 1
SALES CHARGES 7
DISTRIBUTION PLAN 7
FINANCIAL INTERMEDIARY COMPENSATION 8
INVESTMENT STRATEGIES, RISKS, AND RESTRICTIONS 8
NET INCOME AND DISTRIBUTIONS 9
TAX CONSIDERATIONS 9
PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS 15
DISCLOSURE OF PORTFOLIO HOLDINGS AND OTHER FUND INFORMATION 17
DETERMINATION OF NET ASSET VALUE 19
DESCRIPTION OF SHARES, VOTING RIGHTS, AND LIABILITIES 19
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM(S) AND FINANCIAL STATEMENTS 20
   
APPENDIX A -- TRUSTEES AND OFFICERS -- IDENTIFICATION AND BACKGROUND A-1
APPENDIX B -- TRUSTEE COMPENSATION AND COMMITTEES B-1
APPENDIX C -- SHARE OWNERSHIP C-1
APPENDIX D -- PORTFOLIO MANAGER(S) D-1
APPENDIX E -- PROXY VOTING POLICIES AND PROCEDURES E-1
APPENDIX F -- CERTAIN SERVICE PROVIDER COMPENSATION F-1
APPENDIX G -- SALES CHARGES G-1
APPENDIX H -- DISTRIBUTION PLAN PAYMENTS H-1
APPENDIX I -- FINANCIAL INTERMEDIARY COMPENSATION I-1
APPENDIX J -- INVESTMENT STRATEGIES AND RISKS J-1
APPENDIX K -- INVESTMENT RESTRICTIONS K-1
APPENDIX L -- PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS L-1
APPENDIX M -- RECIPIENTS OF NON-PUBLIC PORTFOLIO HOLDINGS ON AN ONGOING BASIS M-1
APPENDIX N -- DESCRIPTION OF RATINGS N-1
APPENDIX O -- INCOME AND FEES RELATED TO SECURITIES LENDING ACTIVITIES O-1
APPENDIX P – INDEX PROVIDER INFORMATION P-1

 

 

 

 

DEFINITIONS

 

“1940 Act” – the Investment Company Act of 1940 and the rules and regulations thereunder, as amended from time to time, and as such Act, rules or regulations are interpreted by the SEC.

 

“Board” – the Board of Trustees of the Trust.

 

“Employer Retirement Plans” – includes 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit sharing and money purchase pension plans, defined benefit plans and non-qualified deferred compensation plans any of whose accounts are maintained by the Fund at an omnibus level.

 

“Financial intermediary” – includes any broker, dealer, bank (including bank trust departments), registered investment adviser, financial planner, retirement plan administrator, third-party administrator, insurance company and any other institution having a selling, administration or other similar agreement with MFD, MFS, or any of their affiliates.

 

“Fund” – references to “a Fund” or “the Fund” mean each Fund listed on the cover page, unless otherwise noted.

 

“Independent Trustees” – trustees who are not “interested persons” (as defined in the 1940 Act) of the Fund.

 

“Majority Shareholder Vote” – as defined currently in the 1940 Act to be the lesser of (i) 67% or more of the voting securities present at a meeting at which holders of voting securities representing more than 50% of the outstanding voting securities are present or represented by proxy, or (ii) more than 50% of the outstanding voting securities.

 

“MFD” or the “Distributor” – MFS Fund Distributors, Inc., a Delaware corporation.

 

“MFS” – Massachusetts Financial Services Company, a Delaware corporation.

 

“MFSC” – MFS Service Center, Inc., a Delaware corporation.

 

“MFS Fund” – a fund managed by MFS and overseen by the Board.

 

“MFS Funds” – collectively, the funds managed by MFS and overseen by the Board.

 

“Prospectus” – the Prospectus of the Fund, dated February 28, 2023, as may be amended or supplemented from time to time.

 

“SEC” – U.S. Securities and Exchange Commission.

 

“Trust” – references to a “Trust” mean the Massachusetts business trust of which the Fund is a series, or, if the Fund is itself a Massachusetts business trust, references to a “Trust” shall mean the Fund.

 

MANAGEMENT OF THE FUND

 

Organization of the Fund

 

MFS Global Equity Fund, MFS Global Total Return Fund, and MFS Utilities Fund, each an open-end investment company, are series of MFS Series Trust VI, a Massachusetts business trust organized in 1990. MFS Global Equity Fund, MFS Global Total Return Fund, and MFS Utilities Fund are diversified funds.

 

MFS Global Growth Fund and MFS Income Fund, each an open-end investment company, are series of MFS Series Trust VIII, a Massachusetts business trust organized in 1987. Prior to July 1, 2020, MFS Income Fund was known as MFS Strategic Income Fund. MFS Global Growth Fund and MFS Income Fund are diversified funds.

 

MFS Inflation-Adjusted Bond Fund, an open-end investment company, is a series of MFS Series Trust IX, a Massachusetts business trust organized in 1985. MFS Inflation-Adjusted Bond Fund is a diversified fund.

 

MFS Emerging Markets Debt Local Currency Fund, an open-end investment company, is a series of MFS Series Trust X, a Massachusetts business trust organized in 1985. MFS Emerging Markets Debt Local Currency Fund is a non-diversified fund.

 

MFS Commodity Strategy Fund and MFS Global Alternative Strategy Fund, each an open-end investment company, are series of MFS Series Trust XV, a Massachusetts business trust organized in 1985. MFS Commodity Strategy Fund and MFS Global Alternative Strategy Fund are diversified funds.

 

Trustees/Officers

 

Board Leadership Structure and Oversight — The following provides an overview of the leadership structure of the Board and the Board’s oversight of the MFS Funds’ risk management process. As of the date of this SAI, the Board consists of 10 Trustees, nine of whom are Independent Trustees. An Independent Trustee serves as Chair of the Board. Taking into account the number, the diversity and the complexity of the MFS Funds overseen by the Board and the aggregate amount of assets under management in the MFS Funds, the Board has determined that the efficient conduct of its affairs makes it desirable to delegate responsibility for certain specific matters to Committees of the Board. Each of the seven standing Committees of the Board, to which the Board has delegated certain authority and oversight responsibilities, consists exclusively of Independent Trustees. In connection with each of the Board’s regular meetings, the Independent Trustees meet separately from MFS with their counsel. The Independent Trustees also meet regularly with the MFS Funds’ Chief Compliance Officer (who is also MFS’ Chief Compliance Officer) to receive reports regarding the compliance of the MFS Funds with the federal securities laws and the MFS Funds’ compliance policies and procedures. The Board reviews its leadership structure periodically and believes that its structure is appropriate to enable the Board to exercise its oversight of the MFS Funds.

 

Each MFS Fund has retained MFS as its investment adviser and administrator. MFS provides each MFS Fund with investment advisory services, and is responsible for day-to-day administration of each MFS Fund and management of the risks that arise from each MFS Fund’s investments and operations. Certain employees of MFS serve as each MFS Fund’s officers, including each MFS Fund’s principal executive officer and principal financial and accounting officer. The Board provides oversight of the services provided by MFS and its affiliates, including the risk management activities of MFS and its affiliates (including those related to cyber security). In addition, each Committee of the Board provides oversight of its risk management activities with respect to the particular activities within the Committee’s purview. In the

 

1

 

 

course of providing oversight, the Board and the Committees receive a wide range of reports on each MFS Fund’s activities, including reports on each MFS Fund’s investment portfolio, the compliance of each MFS Fund with applicable laws, and each MFS Fund’s financial accounting and reporting. The Board also meets periodically with the portfolio managers of each MFS Fund to receive reports regarding the management of each MFS Fund, including its investment risks. The Board and the relevant Committees meet periodically with MFS’ Chief Enterprise Risk Officer and MFS’ Chief Investment Risk Officer to receive reports on MFS’ and its affiliates’ risk management activities, including their efforts to (i) identify key risks that could adversely affect the MFS Funds or MFS; (ii) implement processes and controls to mitigate such key risks; and (iii) monitor business and market conditions in order to facilitate the processes described in (i) and (ii) above. In addition, the Board and the relevant Committees oversee risk management activities related to the key risks associated with services provided by various non-affiliated service providers through the receipt of reports prepared by MFS, and, in certain circumstances, through the receipt of reports directly from service providers, such as in the case of each MFS Fund’s auditor, custodian, and pricing service providers. As the Fund’s operations are carried out by service providers, the Board’s oversight of the risk management processes of the service providers, including processes to address cyber security and other operational failures, is inherently limited.

 

Trustees and Officers -- Identification and Background — The identification and background of the Trustees and Officers of the Trust, as well as an overview of the considerations that led the Board to conclude that each individual serving as a Trustee of the Fund should so serve, are set forth in APPENDIX A.

 

Trustee Compensation and Committees — Compensation paid to the Independent Trustees for certain specified periods, as well as information regarding Committees of the Board, is set forth in APPENDIX B.

 

Share Ownership

 

Information concerning the ownership of Fund shares (i) by Trustees and officers of the Trust as a group, as well as the dollar value range of each Trustee’s share ownership in the Fund and, on an aggregate basis, in the MFS Funds, (ii) by investors who are deemed to “control” the Fund, if any, and (iii) by investors who own 5% or more of any class of Fund shares (if no classes, of the Fund), if any, is set forth in APPENDIX C.

 

Portfolio Manager(s)

 

Information regarding other accounts managed, compensation, ownership of Fund shares, and possible conflicts of interest of the Fund’s portfolio manager(s), is set forth in APPENDIX D.

 

Contractual Arrangements

 

The Fund has entered into contractual arrangements with an investment adviser, administrator, distributor, shareholder servicing agent, and custodian, among others, who each provide services to the Fund. Unless expressly stated otherwise, shareholders of the Fund are not parties to, or intended beneficiaries of, these contractual arrangements, and these contractual arrangements are not intended to create any shareholder right to enforce them against the service providers or to seek any remedy under them against the service providers, either directly or on behalf of the Fund.

 

Investment Adviser

 

MFS provides the Fund with investment advisory services. MFS and its predecessor organizations have a history of money management dating from 1924. MFS is a subsidiary of Sun Life of Canada (U.S.) Financial Services Holdings, Inc., which in turn is an indirect majority-owned subsidiary of Sun Life Financial Inc. (a diversified financial services company).

 

In rendering investment advisory services to the Fund, MFS may use the resources of one or more foreign (non-U.S.) affiliates of MFS that are not registered under the Investment Advisers Act of 1940, as amended (the Advisers Act) (the MFS Non-U.S. Advisory Affiliates) to provide portfolio management, research and/or trading services to the Fund. Under a Memorandum of Understanding (the MOU), each of the MFS Non-U.S. Advisory Affiliates are “Participating Affiliates” of MFS as that term is used in relief granted by the staff of the SEC allowing U.S. registered investment advisers to use investment advisory and trading resources of advisory affiliates not registered under the Advisers Act subject to the supervision of the U.S. registered adviser. Any employees of the Participating Affiliates who provide services to the Fund are considered under the MOU to be “associated persons” of MFS as that term is defined in the Advisers Act and are subject to the supervision of MFS.

 

MFS generally uses an active bottom-up investment approach to buying and selling investments for the Fund. For the Fund, investments are typically selected primarily based on fundamental analysis or, where specified in the Fund’s Prospectus, a blend of fundamental and quantitative research. Fundamental analysis takes into account an issuer’s financial condition and market, economic, political, and regulatory conditions. MFS may consider environmental, social, and governance (ESG) factors in its fundamental investment analysis alongside more traditional economic factors where MFS believes such ESG factors could materially impact the economic value of an issuer. MFS believes that certain ESG factors could materially impact the value of an issuer by representing a source of economic opportunity that contributes to an issuer’s growth and outperformance relative to its peer group or a source of risk that may result in a condition or the occurrence of an event that could have a material negative impact on an issuer’s value. Examples of potentially material ESG opportunities and risks may include, but are not limited to, physical and transitional impacts related to climate change, resource depletion, shifting market or consumer preferences or demand, an issuer’s governance structure and practices, data protection and privacy issues, diversity and labor practices, and regulatory and reputational risks. To account for these factors, MFS’ investment professionals integrate their evaluation of an issuer’s key ESG opportunities and risks into their overall security analysis and investment selection process to the extent that they believe these factors are material to, and have an economic impact on, investment value. In conducting analysis of ESG factors, MFS’ investment professionals may use a variety of tools, including, but not limited to, (i) proprietary issuer and industry research, (ii) internally developed analytical tools designed to evaluate issuer performance and risk-exposure, and (iii) third-party generated issuer and industry research and ratings.

 

MFS investment and proxy voting professionals may also engage about ESG issues when communicating with an issuer’s management team, board of directors, or other representatives in order (i) to better understand the risks and opportunities that a particular ESG issue may present for an issuer; (ii) to communicate MFS’ desired outcome with respect to an ESG issue; or (iii) to inform proxy voting decisions. Such engagement activities will not necessarily result in any changes to an issuer’s ESG-related practices. The extent to which an investment

 

2

 

 

professional considers ESG factors in conducting fundamental investment analysis and the extent to which ESG factors impact a Fund’s return will depend on a number of variables, such as a Fund’s investment strategy, the types of asset classes held in a Fund, regional and geographic exposures, and an investment professional’s views and analysis of a specific ESG issue. Each investment professional makes their own decisions with respect to which ESG factors to consider and how much consideration, if any, to give to ESG factors in the security analysis and investment selection process. The extent that MFS’ integration of ESG factors into its investment process impacts the investment performance of a Fund may be difficult to quantify and can vary significantly over time. In addition, ESG-related information generated by third-party data providers may be inaccurate, incomplete, inconsistent, and out-of-date, which may adversely impact an investment professional’s analysis of the ESG factors relevant to an issuer.

 

MFS may also participate in organizations, initiatives, or other collaborative industry efforts to enhance MFS’ knowledge of specific ESG issues or to further ESG-related initiatives that MFS deems materially impactful to its investment decisions. For example, MFS is a signatory to the Principles for Responsible Investment (PRI), the Net Zero Asset Managers Initiative (NZAMI), and Climate Action 100+, among other ESG-related organizations and initiatives. The requirements for participation in these organizations and initiatives vary, and certain organizations, initiatives and efforts require a commitment from MFS to adopt a framework for achieving the aims of such organization or initiative. Pursuant to its commitment to NZAMI, MFS must publish a framework for achieving net zero carbon emissions by 2050 (“net zero”) for a designated portion of its assets under management. MFS has designed its net zero framework to be based on engagement with portfolio companies to implement and execute their own net zero plans and targets. As such, MFS will not introduce investment restrictions or goals with respect to the Fund solely for the purposes of meeting MFS’ commitment under NZAMI. MFS’ participation in NZAMI and these other organizations or initiatives is subject to its fiduciary responsibilities to the Fund, and therefore MFS may fail to act or may take actions that are inconsistent with the purpose, goals or aspirations of these organizations or initiatives if, in MFS’ judgment, it is in the best economic interests of the Fund to do so.

 

MFS votes proxies on behalf of the Fund pursuant to the proxy voting policies and procedures set forth in APPENDIX E. Information regarding how the Fund voted proxies relating to portfolio securities during the 12-month period ended June 30 is available by August 31 of each year without charge by visiting mfs.com/proxyvoting and selecting the Fund’s name, or by visiting the SEC’s website at http://www.sec.gov.

 

In addition to the conflicts of interest discussed elsewhere in this SAI, MFS may have other conflicts of interest related to its service as investment adviser to the Fund and other funds and accounts (collectively, accounts), its other business activities, and its employees. In order to minimize conflicts of interest, all employees of MFS are subject to policies and/or procedures regarding conflicts of interest, appropriate business conduct, confidential and proprietary information, information barriers, private investments, personal trading, insider trading, gifts and entertainment, political and charitable contributions, outside business activities, vendor management, and other topics. These policies and procedures are intended to identify and mitigate conflicts of interest with or among clients, MFS employees, and business partners, and to resolve appropriately any such conflicts of interest that may occur. There is no guarantee that MFS will be successful in identifying or mitigating conflicts of interest.

 

MFS advises multiple accounts (including accounts in which MFS or an affiliate has an interest). Investment and voting decisions made for one or more accounts may compete with, differ from, conflict with, or involve different timing from investment and voting decisions made for the Fund. MFS’ acting as investment adviser to multiple accounts could have a detrimental effect on the price, terms, or availability of a security with respect to the Fund. In certain instances, there are securities that are suitable for the Fund as well as for one or more other accounts advised by MFS or any subsidiary of MFS (including accounts in which MFS or an affiliate has an interest) or that MFS believes should no longer be held by the Fund or by such other accounts. It is possible that a particular security is bought or sold for only one account even though it might be held by, or bought or sold for, other accounts. Some simultaneous transactions are inevitable when several accounts receive investment advice from the same investment adviser, particularly when the same security is suitable for the investment objectives of more than one account. The simultaneous management of multiple accounts creates conflicts of interest, including, but not limited to, circumstances where MFS or an affiliate has an interest in one or more accounts, where one or more accounts pays higher fees or performance-based fees, or where the availability or liquidity of investment opportunities is limited. MFS also has other incentives to favor different clients or accounts, including, but not limited to, a client with greater overall assets under management or the potential for greater assets under management, accounts believed to be at risk of termination, or clients in a particular region or industry in which MFS would like to grow its business. This creates the potential for MFS to favor one account over another. MFS has adopted policies and procedures designed to ensure that it does not favor one account over another; however, this does not mean all accounts will be treated identically.

 

MFS has adopted policies that it believes are reasonably designed to ensure that when two or more accounts (including accounts in which MFS or an affiliate has an interest) are simultaneously engaged in the purchase or sale of the same security, the securities are allocated among accounts in a manner believed by MFS to be fair and equitable to each account over time. Allocations may be based on many factors and may not always be pro rata based on assets managed. The allocation methodology could have a detrimental effect on the price or availability of a security with respect to the Fund.

 

When executing orders, MFS may aggregate multiple orders for the same instrument into a single trade as long as aggregation is unlikely to work to the overall disadvantage of any participating account over time. MFS does not generally aggregate orders for related accounts (which include accounts that are managed by MFS for the sole benefit of itself or its subsidiaries) with orders for other client accounts, and will trade for such related accounts in a manner that it believes will not disadvantage other client accounts. Related accounts do not include accounts owned by employees or officers of MFS or its subsidiaries, accounts created by MFS or its subsidiaries to establish a track record for future distribution, accounts that are funded by MFS or a subsidiary and open for sale to third parties, and accounts managed by MFS or its subsidiaries for Sun Life Financial, Inc. MFS seeks to ensure fairness among client accounts over time through application and monitoring of its allocation policies and procedures.

 

If MFS executes purchase and sale transactions between the Fund and other accounts managed by MFS or its affiliates (cross-trades), MFS may have an incentive to favor one account over another by exchanging securities at a price that is advantageous to the favored account, or selling less liquid securities from the favored account to another account. Cross-trade transactions entered into by the Fund are executed in accordance with applicable rules and regulations under the 1940 Act and related policies approved by the Board. To the extent permitted by applicable law, certain MFS Funds may invest their assets in other funds advised by MFS, including funds that are advised by one or more of

 

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the same portfolio manager(s), which could result in conflicts of interest relating to asset allocation, timing of fund purchases and redemptions, and increased profitability for MFS and/or its personnel, including portfolio managers.

 

Investment Advisory Agreement – MFS manages the Fund pursuant to an Investment Advisory Agreement (the “Advisory Agreement”). Under the Advisory Agreement, MFS provides the Fund with investment advisory services. Subject to such policies as the Trustees may determine, MFS makes investment decisions for the Fund. For these services, MFS receives an investment advisory fee, computed and paid monthly, as follows:

 

For MFS Commodity Strategy Fund, the management fee set forth in the Investment Advisory Agreement is 0.75% of the Fund’s average daily net assets annually up to $1 billion and 0.70% of the Fund’s average daily net assets annually in excess of $1 billion. MFS has agreed in writing to reduce its management fee by a specified amount if certain MFS mutual fund assets exceed thresholds agreed to by MFS and the Fund’s Board. Effective March 1, 2022, MFS has agreed in writing to waive at least 0.01% of its management fee as part of this agreement. The agreement to waive at least 0.01% of the management fee will continue until modified by the Fund’s Board, but such agreement will continue until at least February 29, 2024. For the fiscal year ended October 31, 2022, this management fee reduction amounted to 0.01% of the Fund’s average daily net assets. MFS Commodity Strategy Portfolio, the Fund’s subsidiary, does not pay a management fee to MFS.

 

For MFS Emerging Markets Debt Local Currency Fund, the management fee set forth in the Investment Advisory Agreement is 0.75% of the Fund’s average daily net assets annually up to $1 billion; 0.70% of the Fund’s average daily net assets annually in excess of $1 billion and up to $2.5 billion; and 0.65% of the Fund’s average daily net assets annually in excess of $2.5 billion. MFS has agreed in writing to reduce its management fee by a specified amount if certain MFS mutual fund assets exceed thresholds agreed to by MFS and the Fund’s Board. Effective March 1, 2022, MFS has agreed in writing to waive at least 0.01% of its management fee as part of this agreement. The agreement to waive at least 0.01% of the management fee will continue until modified by the Fund’s Board, but such agreement will continue until at least February 29, 2024. For the fiscal year ended October 31, 2022, this management fee reduction amounted to 0.01% of the Fund’s average daily net assets. MFS has agreed in writing to bear the Fund’s expenses, excluding interest, taxes, extraordinary expenses, brokerage and transaction costs, certain tax reclaim recovery expenses (including contingency fees and closing agreement expenses), and investment-related expenses (such as interest and borrowing expenses incurred in connection with the Fund’s investment activity), such that “Total Annual Fund Operating Expenses” do not exceed 1.10% of the class’ average daily net assets annually for each of Class A and Class R3 shares, 1.85% of the class’ average daily net assets annually for each of Class B, Class C, and Class R1 shares, 0.85% of the class’ average daily net assets annually for each of Class I and Class R4 shares, 1.35% of the class’ average daily net assets annually for Class R2 shares, and 0.78% of the class’ average daily net assets annually for Class R6 shares. This written agreement will continue until modified by the Fund’s Board, but such agreement will continue until at least February 29, 2024.

 

For MFS Global Alternative Strategy Fund, the management fee set forth in the Investment Advisory Agreement is 0.80% of the Fund’s average daily net assets annually of the first $1 billion; 0.70% of the Fund’s average daily net assets annually in excess of $1 billion and up to $2.5 billion; and 0.65% of the Fund’s average daily net assets annually in excess of $2.5 billion. MFS has agreed in writing to reduce its management fee by a specified amount if certain MFS mutual fund assets exceed thresholds agreed to by MFS and the Fund’s Board. Effective March 1, 2022, MFS has agreed in writing to waive at least 0.01% of its management fee as part of this agreement. The agreement to waive at least 0.01% of the management fee will continue until modified by the Fund’s Board, but such agreement will continue until at least February 29, 2024. For the fiscal year ended October 31, 2022, this management fee reduction amounted to 0.01% of the Fund’s average daily net assets. MFS has agreed in writing to bear the Fund’s expenses, excluding interest, taxes, extraordinary expenses, brokerage and transaction costs, certain tax reclaim recovery expenses (including contingency fees and closing agreement expenses), and investment-related expenses (such as interest and borrowing expenses incurred in connection with the Fund’s investment activity), such that “Total Annual Fund Operating Expenses” do not exceed 1.30% of the class’ average daily net assets annually for each of Class A and Class R3 shares, 2.05% of the class’ average daily net assets annually for each of Class B, Class C, and Class R1 shares, 1.05% of the class’ average daily net assets annually for each of Class I and Class R4 shares, 1.55% of the class’ average daily net assets annually for Class R2 shares, and 0.97% of the class’ average daily net assets annually for Class R6 shares. This written agreement will continue until modified by the Fund’s Board, but such agreement will continue until at least February 29, 2024.

 

For MFS Global Equity Fund, the management fee set forth in the Investment Advisory Agreement is 0.90% of the Fund’s average daily net assets annually up to $1 billion; 0.75% of the Fund’s average daily net assets annually in excess of $1 billion and up to $2 billion; 0.65% of the Fund’s average daily net assets annually in excess of $2 billion and up to $5 billion; and 0.60% of the Fund’s average daily net assets annually in excess of $5 billion. MFS has agreed in writing to reduce its management fee by a specified amount if certain MFS mutual fund assets exceed thresholds agreed to by MFS and the Fund’s Board. Effective March 1, 2022, MFS has agreed in writing to waive at least 0.01% of its management fee as part of this agreement. The agreement to waive at least 0.01% of the management fee will continue until modified by the Fund’s Board, but such agreement will continue until at least February 29, 2024. For the fiscal year ended October 31, 2022, this management fee reduction amounted to 0.01% of the Fund’s average daily net assets.

 

For MFS Global Growth Fund, the management fee set forth in the Investment Advisory Agreement is 0.90% of the Fund’s average daily net assets annually up to $1 billion; 0.75% of the Fund’s average daily net assets annually in excess of $1 billion up to $2 billion; and 0.65% of the Fund’s average daily net assets annually in excess of $2 billion. MFS has agreed in writing to reduce its management fee by a specified amount if certain MFS mutual fund assets exceed thresholds agreed to by MFS and the Fund’s Board. Effective March 1, 2022, MFS has agreed in writing to waive at least 0.01% of its management fee as part of this agreement. The agreement to waive at least 0.01% of the management fee will continue until modified by the Fund’s Board, but such agreement will continue until at least February 29, 2024. For the fiscal year ended October 31, 2022, this management fee reduction amounted to 0.01% of the Fund’s average daily net assets. MFS has agreed in writing to bear the Fund’s expenses, excluding interest, taxes, extraordinary expenses, brokerage and transaction costs, certain tax reclaim

 

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recovery expenses (including contingency fees and closing agreement expenses), and investment-related expenses (such as interest and borrowing expenses incurred in connection with the Fund’s investment activity), such that “Total Annual Fund Operating Expenses” do not exceed 1.22% of the class’ average daily net assets annually for each of Class A and Class R3 shares, 1.97% of the class’ average daily net assets annually for each of Class B, Class C, and Class R1 shares, 0.97% of the class’ average daily net assets annually for each of Class I and Class R4 shares, 1.47% of the class’ average daily net assets annually for Class R2 shares, and 0.90% of the class’ average daily net assets annually for Class R6 shares. This written agreement will continue until modified by the Fund’s Board, but such agreement will continue until at least February 29, 2024.

 

For MFS Global Total Return Fund, the management fee set forth in the Investment Advisory Agreement is 0.84% of the Fund’s average daily net assets annually up to $500 million; 0.75% of the Fund’s average daily net assets annually in excess of $500 million and up to $1 billion; 0.70% of the Fund’s average daily net assets annually in excess of $1 billion and up to $2.5 billion; and 0.65% of the Fund’s average daily net assets annually in excess of $2.5 billion. MFS has agreed in writing to reduce its management fee by a specified amount if certain MFS mutual fund assets exceed thresholds agreed to by MFS and the Fund’s Board. Effective March 1, 2022, MFS has agreed in writing to waive at least 0.01% of its management fee as part of this agreement. The agreement to waive at least 0.01% of the management fee will continue until modified by the Fund’s Board, but such agreement will continue until at least February 29, 2024. For the fiscal year ended October 31, 2022, this management fee reduction amounted to 0.01% of the Fund’s average daily net assets. MFS has agreed in writing to bear the Fund’s expenses, excluding interest, taxes, extraordinary expenses, brokerage and transaction costs, certain tax reclaim recovery expenses (including contingency fees and closing agreement expenses), and investment-related expenses (such as interest and borrowing expenses incurred in connection with the Fund’s investment activity), such that “Total Annual Fund Operating Expenses” do not exceed 1.09% of the class’ average daily net assets annually for each of Class A and Class R3 shares, 1.84% of the class’ average daily net assets annually for each of Class B, Class C, and Class R1 shares, 0.84% of the class’ average daily net assets annually for each of Class I and Class R4 shares, 1.34% of the class’ average daily net assets annually for Class R2 shares, and 0.77% of the class’ average daily net assets annually for Class R6 shares. This written agreement will continue until modified by the Fund’s Board, but such agreement will continue until at least February 29, 2024.

 

For MFS Income Fund, the management fee set forth in the Investment Advisory Agreement is 0.50% of the Fund’s average daily net assets annually up to $1 billion; 0.45% of the Fund’s average daily net assets annually in excess of $1 billion and up to $2.5 billion; and 0.40% of the Fund’s average daily net assets annually in excess of $2.5 billion. MFS has agreed in writing to reduce its management fee to 0.40% of the Fund’s average daily net assets annually up to $2.5 billion. This written agreement will remain in effect until modified by the Fund’s Board, but such agreement will continue until at least February 29, 2024. MFS has agreed in writing to reduce its management fee by a specified amount if certain MFS mutual fund assets exceed thresholds agreed to by MFS and the Fund’s Board. Effective March 1, 2022, MFS has agreed in writing to waive at least 0.01% of its management fee as part of this agreement. The agreement to waive at least 0.01% of the management fee will continue until modified by the Fund’s Board, but such agreement will continue until at least February 29, 2024. For the fiscal year ended October 31, 2022, this management fee reduction amounted to 0.01% of the Fund’s average daily net assets. MFS has agreed in writing to bear the Fund’s expenses, excluding interest, taxes, extraordinary expenses, brokerage and transaction costs, certain tax reclaim recovery expenses (including contingency fees and closing agreement expenses), and investment-related expenses (such as interest and borrowing expenses incurred in connection with the Fund’s investment activity), such that “Total Annual Fund Operating Expenses” do not exceed 0.73% of the class’ average daily net assets annually for Class A shares, 1.48% of the class’ average daily net assets annually for each of Class B and Class C shares, 0.48% of the class’ average daily net assets annually for Class I shares, and 0.40% of the class’ average daily net assets annually for Class R6 shares. This written agreement will continue until modified by the Fund’s Board, but such agreement will continue until at least February 29, 2024.

 

For MFS Inflation-Adjusted Bond Fund, the management fee set forth in the Investment Advisory Agreement is 0.50% of the Fund’s average daily net assets annually up to $1 billion; 0.35% of the Fund’s average daily net assets annually in excess of $1 billion and up to $2.5 billion; 0.30% of the Fund’s average daily net assets annually in excess of $2.5 billion and up to $5 billion; and 0.29% of the Fund’s average daily net assets annually in excess of $5 billion. MFS has agreed in writing to reduce its management fee to 0.40% of the Fund’s average daily net assets annually up to $1 billion. This written agreement will remain in effect until modified by the Fund’s Board, but such agreement will continue until at least February 29, 2024. MFS has agreed in writing to reduce its management fee by a specified amount if certain MFS mutual fund assets exceed thresholds agreed to by MFS and the Fund’s Board. Effective March 1, 2022, MFS has agreed in writing to waive at least 0.01% of its management fee as part of this agreement. The agreement to waive at least 0.01% of the management fee will continue until modified by the Fund’s Board, but such agreement will continue until at least February 29, 2024. For the fiscal year ended October 31, 2022, this management fee reduction amounted to 0.01% of the Fund’s average daily net assets. MFS has agreed in writing to bear the Fund’s expenses, excluding interest, taxes, extraordinary expenses, brokerage and transaction costs, certain tax reclaim recovery expenses (including contingency fees and closing agreement expenses), and investment-related expenses (such as interest and borrowing expenses incurred in connection with the Fund’s investment activity), such that “Total Annual Fund Operating Expenses” do not exceed 0.67% of the class’ average daily net assets annually for Class A shares, 1.42% of the class’ average daily net assets annually for Class B shares, 1.52% of the class’ average daily net assets annually for each of Class C and Class R1 shares, 0.52% of the class’ average daily net assets annually for each of Class I and Class R4 shares, 1.02% of the class’ average daily net assets annually for Class R2 shares, 0.77% of the class’ average daily net assets annually for Class R3 shares, and 0.44% of the class’ average daily net assets annually for Class R6 shares. This written agreement will continue until modified by the Fund’s Board, but such agreement will continue until at least February 29, 2024.

 

For MFS Utilities Fund, the management fee set forth in the Investment Advisory Agreement is 0.60% of the Fund’s average daily net assets annually up to $3 billion; 0.55% of the Fund’s average daily net assets annually in excess of $3 billion and up to $10 billion; and 0.50% of the Fund’s average daily net assets annually in excess of $10 billion. MFS has agreed in writing

 

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to reduce its management fee by a specified amount if certain MFS mutual fund assets exceed thresholds agreed to by MFS and the Fund’s Board. Effective March 1, 2022, MFS has agreed in writing to waive at least 0.01% of its management fee as part of this agreement. The agreement to waive at least 0.01% of the management fee will continue until modified by the Fund’s Board, but such agreement will continue until at least February 29, 2024. For the fiscal year ended October 31, 2022, this management fee reduction amounted to 0.01% of the Fund’s average daily net assets.

 

MFS pays the compensation of the Trust’s officers and of any Trustee who is an employee of MFS. MFS also furnishes at its own expense investment advisory and administrative services, office space, equipment, clerical personnel, investment advisory facilities, and executive and supervisory personnel necessary for managing the Fund’s investments and effecting its portfolio transactions.

 

The Trust pays the compensation of the Independent Trustees and all expenses of the Fund incurred in its operation and offering of shares (other than those assumed by MFS in writing) including: management fees; Rule 12b-1 fees; administrative services fees; governmental fees; interest charges; taxes; membership dues in the Investment Company Institute allocable to the Fund; fees and expenses of independent auditors, of legal counsel, and of any transfer agent, registrar, or dividend disbursing agent of the Fund; expenses of repurchasing and redeeming shares and servicing shareholder accounts; expenses of preparing, printing and mailing stock certificates, shareholder reports, notices, proxy statements, confirmations, periodic investment statements and reports to governmental officers and commissions; brokerage and other expenses connected with the execution, recording, and settlement of portfolio security transactions; insurance premiums; fees and expenses of the Fund’s custodian, for all services to the Fund, including safekeeping of funds and securities and maintaining required books and accounts; expenses of calculating the net asset value of shares of the Fund; organizational and start-up costs; and such non-recurring or extraordinary expenses as may arise, including those relating to actions, suits, or proceedings to which the Fund is a party or otherwise may have an exposure, and the legal obligation which the Fund may have to indemnify the Trust’s Trustees and officers with respect thereto. Expenses relating to the issuance, registration and qualification of shares of the Fund and the preparation, printing and mailing of prospectuses for such purposes are borne by the Fund except to the extent that the Distribution Agreement with MFD, provides that MFD is to pay some or all of such expenses. Expenses of the Trust which are not attributable to a specific Fund are allocated among the MFS Funds in the Trust in a manner believed by management of the Trust to be fair and equitable.

 

The Advisory Agreement has an initial two-year term and continues in effect thereafter only if such continuance is specifically approved at least annually by the Board or by Majority Shareholder Vote and, in either case, by a majority of the Independent Trustees. The Advisory Agreement terminates automatically if it is assigned and may be terminated without penalty by a Majority Shareholder Vote, or by either party, on not more than 60 days’ nor less than 30 days’ written notice. The Advisory Agreement may be approved, renewed, amended, or terminated as to one MFS Fund in the Trust, even though the Agreement is not approved, renewed, amended, or terminated as to any other MFS Fund in the Trust.

 

The Advisory Agreement also provides that neither MFS nor its personnel shall be liable for any error of judgment or mistake of law or for any loss arising out of any investment or for any act or omission in the execution and management of the Fund, except for willful misfeasance, bad faith, gross negligence, or reckless disregard of its or their duties and obligations under the Advisory Agreement.

 

Organization and Management of MFS Commodity Strategy Portfolio – MFS Commodity Strategy Portfolio (the “Subsidiary”) is a wholly-owned subsidiary of MFS Commodity Strategy Fund. The Subsidiary is a company organized as an exempted company under the laws of the Cayman Islands, whose registered office is located at the offices of Maples Corporate Services Limited, P.O. Box 309, Ugland House, Grand Cayman KY1-1104, Cayman Islands. The Subsidiary’s operations are overseen by a board of directors, which, as of February 1, 2023, is comprised of Robertson G. Mansi, David L. DiLorenzo, and Mitchell C. Freestone. Mr. DiLorenzo is also an Officer of MFS Commodity Strategy Fund. The MFS Commodity Strategy Fund is the sole shareholder of the Subsidiary, and shares of the Subsidiary will not be sold or offered to other investors. The Subsidiary has entered into a separate investment advisory agreement with MFS, but does not compensate MFS for its services under the investment advisory agreement. The Subsidiary incurs investment and operating costs and has entered into separate contracts for custody, transfer agency, and accounting services with the same service providers that provide these services to the MFS Commodity Strategy Fund. The Subsidiary is managed pursuant to compliance policies and procedures that are materially the same as the policies and procedures applicable to the MFS Commodity Strategy Fund. MFS’ Chief Compliance Officer oversees the implementation of the Subsidiary’s policies and procedures, and makes periodic reports to the Fund’s Board. The MFS Commodity Strategy Fund and the Subsidiary may test for compliance with certain investment restrictions on a consolidated basis. The financial statements of the Subsidiary will be consolidated with the MFS Commodity Strategy Fund’s financial statements in the MFS Commodity Strategy Fund’s Annual and Semi-Annual reports.

 

Administrator

 

MFS provides the Fund with certain financial, legal, and other administrative services under a Master Administrative Services Agreement between the Fund and MFS. Under the Agreement, the Fund pays an annual fee to MFS for providing these services based on the amount of assets in the Fund and/or the type of fund.

 

Shareholder Servicing Agent

 

MFSC, 111 Huntington Avenue, Boston, Massachusetts 02199, a wholly-owned subsidiary of MFS, provides dividend and distribution disbursing and transfer agent and recordkeeping functions in connection with the issuance, transfer, and redemption of each class of shares of the Fund under a Shareholder Servicing Agent Agreement. MFSC receives a fee from the Fund based on the amount of assets in the Fund, the types of accounts through which shareholders invest in the Fund, the costs of servicing these types of accounts, and a target profit margin. MFSC also contracts with other entities to provide some or all of the services described above.

 

In addition, MFSC is reimbursed by the Fund for certain expenses incurred by MFSC on behalf of the Fund. These reimbursements include payments for certain out-of-pocket expenses, such as costs related to mailing shareholder statements and the use of third party recordkeeping systems, incurred by MFSC in performing the services described above. MFSC is also reimbursed for payments made under agreements with service providers that provide sub-accounting, transaction processing, and/or other shareholder services (“Shareholder Servicing Payments”), that may include receiving instructions for the purchase, exchange or redemption of shares; preparing and transmitting periodic statements; providing or causing to be provided prospectuses, annual reports, semiannual reports, shareholder notices, and other shareholder communications; providing required tax services and documents; calculating and assessing sales charges; and calculating and recording or

 

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distributing distributions to shareholders. Service providers receive an annualized fee based on the Fund’s average daily net assets serviced by the service provider and/or a fee for each year, or portion thereof, for the Fund account serviced by the service provider. Payments vary by service provider and may be significant to the service provider.

 

Proceeds from Fund purchases, redemptions, and distribution payments may be held in one or more demand deposit bank accounts registered to MFSC, who acts as agent for the Fund when opening, closing, and conducting business in the bank account(s). MFSC may invest overnight balances in money market instruments, including money market funds. Any balances not invested remain in the bank account(s) overnight. Pursuant to the Shareholder Servicing Agent Agreement, if MFSC has acted in good faith and with reasonable care, investment risks associated with such bank account(s) are risks of the Fund.

 

Distributor

 

MFD, a wholly-owned subsidiary of MFS, serves as distributor for the continuous offering of shares of the Fund pursuant to a Distribution Agreement. Under the Agreement, MFD agrees to use its best efforts to find purchasers for shares of the Fund.

 

Custodian

 

State Street Bank and Trust Company (“State Street”), with a place of business at State Street Financial Center, One Lincoln Street, Boston, MA 02111, serves as the custodian of the assets of MFS Commodity Strategy Fund, MFS Emerging Markets Debt Local Currency Fund, and MFS Inflation-Adjusted Bond Fund. State Street is responsible for safekeeping cash and securities, handling the receipt and delivery of securities, collecting interest and dividends on investments, serving as the foreign custody manager, providing reports on foreign securities depositaries, maintaining books of original entry and other required books and accounts, and calculating the daily net asset value of each class of shares.

 

JPMorgan Chase Bank (“JPMorgan”), with a place of business at One Chase Manhattan Plaza, New York, NY 10081, serves as the custodian of the assets of MFS Global Alternative Strategy Fund, MFS Global Equity Fund, MFS Global Growth Fund, MFS Global Total Return Fund, MFS Income Fund, and MFS Utilities Fund. JPMorgan is responsible for safekeeping cash and securities, handling the receipt and delivery of securities, collecting interest and dividends on investments, serving as the foreign custody manager, and providing reports on foreign securities depositaries. JPMorgan Chase Bank, N.A., as successor in interest to an affiliate of JPMorgan, J.P. Morgan Investor Services Co., with a place of business at One Beacon Street, Boston, MA 02108, is responsible for maintaining books of original entry and other required books and accounts and calculating the daily net asset value of each class of shares.

 

There is an expense offset arrangement that reduces the Fund’s custodian fees based upon the amount of U.S. Dollars deposited by the Fund with JPMorgan.

 

Certain Service Provider Compensation

 

Compensation paid by the Fund to certain of its service providers for advisory services, administrative services, and transfer agency-related services, for certain specified periods, is set forth in APPENDIX F.

 

Code of Ethics

 

The Fund, MFS, its subadvisor (if applicable), the Subsidiary, and MFD have adopted separate codes of ethics (“Codes of Ethics”) as required under the 1940 Act. The Codes of Ethics contain provisions and requirements designed to identify and address certain conflicts of interest between personal investment activities of MFS employees and the interests of the Fund. Subject to certain conditions and restrictions, each code permits personnel subject to the code to invest in securities for their own accounts, including securities that may be purchased, held, or sold by the Fund.

 

SALES CHARGES

 

Sales charges (as applicable) paid for certain specified periods in connection with the purchase and sale of the Fund’s shares are set forth in APPENDIX G.

 

DISTRIBUTION PLAN

 

The Trustees have approved a plan for the Fund in accordance with Rule 12b-1 under the 1940 Act as described in the Fund’s Prospectus (the “Distribution Plan”). In approving the Distribution Plan, the Trustees, including a majority of the Independent Trustees who have no direct or indirect financial interest in the operation of the Distribution Plan or any agreements relating to the Distribution Plan (“Distribution Plan Qualified Trustees”), concluded that there is a reasonable likelihood that the Distribution Plan would benefit the Fund and each respective class of shareholders.

 

The Distribution Plan is designed to promote sales of shares and reduce the amount of redemptions that might otherwise occur if the Distribution Plan were not in effect, as well as to compensate intermediaries for their servicing and maintenance of shareholder accounts. Increasing the Fund’s net assets through sales of shares, or reducing reductions in net assets by reducing redemptions, may help reduce the Fund’s expense ratio by spreading the Fund’s fixed costs over a larger base and may reduce the potential adverse effect of selling the Fund’s portfolio securities to meet redemptions. There is, however, no assurance that the net assets of the Fund will increase or not be reduced, or that other benefits will be realized as a result of the Distribution Plan.

 

The Distribution Plan remains in effect from year to year only if its continuance is specifically approved at least annually by vote of both the Trustees and a majority of the Distribution Plan Qualified Trustees. The Distribution Plan also requires that the Fund and MFD each provide the Trustees, and that the Trustees review, at least quarterly, a written report of the amounts expended (and purposes therefor) under the Distribution Plan. The Distribution Plan may be terminated at any time by vote of a majority of the Distribution Plan Qualified Trustees or by a Majority Shareholder Vote of the shares of the class to which the Distribution Plan relates (“Designated Class”). The Distribution Plan may not be amended to increase materially the amount of permitted distribution expenses without the approval of a majority of the shares of the

 

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Designated Class of the Fund, or may not be materially amended in any case without a vote of the Trustees and a majority of the Distribution Plan Qualified Trustees.

 

The Distribution Plan is a compensation plan, meaning that MFD will receive payment without regard to the actual expenses it incurs under the Distribution Plan for distribution and shareholder services. The distribution and service fees paid to MFD equal on an annual basis up to the following maximum percentages of average daily net assets of the class of the Fund (as applicable):

 

 

 

Class

  Maximum Distribution
Fee
    Maximum Service
Fee
    Maximum Total
Distribution and Service
Fee
 
Class A     0.00 %     0.25 %     0.25 %
Class B     0.75 %     0.25 %     1.00 %
Class B1     0.75 %     0.25 %     1.00 %
Class C     0.75 %     0.25 %     1.00 %
Class R1     0.75 %     0.25 %     1.00 %
Class R2     0.25 %     0.25 %     0.50 %
Class R3     0.00 %     0.25 %     0.25 %

 

In certain circumstances, the fees described above may be wholly or partially waived, or do not apply to certain MFS Funds. The distribution fee may be waived from time to time pursuant to Rule 2341 of the Financial Industry Regulatory Authority (“FINRA”).

 

MFD has voluntarily agreed to rebate to the class a portion of each class’ 0.25% service fee attributable to accounts for which there is no financial intermediary specified on the account except for accounts attributable to seed money of MFS or an affiliate. Current distribution and service fees for the Fund are reflected under the caption “Description of Share Classes -- Distribution and Service Fees” in the Prospectus.

 

Service Fees

 

The Distribution Plan provides that the Fund pays MFD a service fee as described above based on the average daily net assets attributable to the Designated Class (i.e., Class A, Class B, Class B1, Class C, Class R1, Class R2, or Class R3 shares), as applicable, annually. MFD may, at its discretion, retain all or a portion of such payments or pay all or a portion of such payments to financial intermediaries. Service fees compensate MFD and/or financial intermediaries for shareholder servicing and account maintenance activities, including shareholder recordkeeping (including assisting in establishing and maintaining customer accounts and records), transaction processing (including assisting with purchase, redemption and exchange requests), shareholder reporting, arranging for bank wires, monitoring dividend payments from the Fund on behalf of customers, forwarding certain shareholder communications from the Fund to customers, corresponding with shareholders and customers regarding the Fund (including receiving and responding to inquiries and answering questions regarding the Fund), and aiding in maintaining the investment of their respective customers in the Fund. Financial intermediaries may from time to time be required to meet certain criteria established by MFD in order to receive service fees.

 

Distribution Fees

 

The Distribution Plan provides that the Fund pays MFD a distribution fee as described above based on the average daily net assets attributable to the Designated Class as partial consideration for distribution services performed and expenses incurred in the performance of MFD’s obligations under its distribution agreement with the Fund. Distribution fees compensate MFD and/or financial intermediaries for their expenses in connection with the distribution of Fund shares, including commissions to financial intermediaries, printing prospectuses and reports used for sales purposes, the preparation and printing of sales literature, personnel, travel, office expense and equipment, payments made to wholesalers employed by MFD (employees may receive additional compensation if they meet certain targets for sales of the Fund), and other distribution-related expenses. The amount of the distribution fee paid by the Fund with respect to each class differs under the Distribution Plan, as does the use by MFD of such distribution fees. While the amount of compensation received by MFD in the form of distribution fees during any year may be more or less than the expenses incurred by MFD under its distribution agreement with the Fund, the Fund is not liable to MFD for any losses MFD may incur in performing services under its Distribution Agreement with the Fund.

 

Distribution and Service Fees Paid to MFD

 

Payments made by the Fund under the Fund’s Distribution Plan for the Fund’s most recent fiscal year are set forth in APPENDIX H.

 

FINANCIAL INTERMEDIARY COMPENSATION

 

MFD and/or its affiliates may pay commissions, Rule 12b-1 distribution and service fees, shareholder servicing fees, and other payments to financial intermediaries that sell Fund shares as described in APPENDIX I.

 

INVESTMENT STRATEGIES, RISKS AND RESTRICTIONS

 

Set forth in APPENDIX J is a description of investment strategies which the Fund may generally use in pursuing its investment objective(s) and investment policies to the extent such strategies are consistent with its investment objective and investment policies, and a description of the risks associated with these investment strategies. Set forth in APPENDIX K is a description of investment restrictions to which the Fund is subject.

 

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NET INCOME AND DISTRIBUTIONS

 

The Fund intends to distribute to its shareholders all or substantially all of its net investment income. The net investment income of the Fund consists of non-capital gain income less expenses. In addition, the Fund intends to distribute net realized short- and long-term capital gains, if any, at least annually. Shareholders will be informed of the tax consequences of such distributions, including whether any portion represents a return of capital, after the end of each calendar year.

 

TAX CONSIDERATIONS

 

The following discussion is a brief summary of some of the important U.S. federal (and, where noted, state) income tax consequences affecting the Fund and its shareholders. The discussion is very general, and therefore prospective investors are urged to consult their tax advisers about the impact an investment in the Fund will have on their own tax situations.

 

Tax Treatment of the Fund

 

Federal Taxes — The Fund (even if it is a Fund in a Trust with multiple series) is treated as a separate entity for federal income tax purposes under the Internal Revenue Code of 1986, as amended (the “Code”). The Fund has elected (or in the case of a new Fund, intends to elect) to be, and intends to qualify to be treated each year as, a “regulated investment company” under Subchapter M of the Code.

 

In order to qualify for the special tax treatment accorded regulated investment companies and their shareholders, the Fund must, among other things:

 

(a) derive at least 90% of its gross income for each taxable year from (i) dividends, interest, payments with respect to certain securities loans, and gains from the sale or other disposition of stock, securities or foreign currencies, or other income (including gains from options, futures, or forward contracts) derived with respect to its business of investing in such stock, securities, or currencies and (ii) net income derived from interests in “qualified publicly traded partnerships” (as defined below);

 

(b) diversify its holdings so that, at the end of each quarter of the Fund’s taxable year, (i) at least 50% of the market value of the Fund’s total assets is represented by cash and cash items, U.S. Government securities, securities of other regulated investment companies, and other securities limited in respect of any one issuer to a value not greater than 5% of the value of the Fund’s total assets and not more than 10% of the outstanding voting securities of such issuer, and (ii) not more than 25% of the value of the Fund’s total assets is invested, including through corporations in which the Fund owns a 20% or more voting stock interest, (x) in the securities (other than those of the U.S. Government or other regulated investment companies) of any one issuer or of two or more issuers that the Fund controls and that are engaged in the same, similar, or related trades or businesses, or (y) in the securities of one or more qualified publicly traded partnerships (as defined below); and

 

(c) distribute with respect to each taxable year at least 90% of the sum of its investment company taxable income (as that term is defined in the Code without regard to the deduction for dividends paid; generally, taxable ordinary income and the excess, if any, of the net short-term capital gains over net long-term capital losses) and net tax-exempt income, for such year.

 

In general, for purposes of the 90% gross income requirement described in paragraph (a) above, income derived from a partnership will be treated as qualifying income only to the extent such income is attributable to items of income of the partnership which would be qualifying income if realized directly by the regulated investment company. However, 100% of the net income derived from an interest in a “qualified publicly traded partnership” (a partnership (i) the interests in which are traded on an established securities market or are readily tradable on a secondary market or the substantial equivalent thereof, and (ii) that derives less than 90% of its income from the qualifying income described in paragraph (a)(i) above) will be treated as qualifying income. In general, such entities will be treated as partnerships for federal income tax purposes because they meet the passive income requirement under Section 7704(c)(2) of the Code. In addition, although in general the passive loss rules of the Code do not apply to regulated investment companies, such rules do apply to a regulated investment company with respect to items attributable to an interest in a qualified publicly traded partnership.

 

For purposes of the diversification test in (b) above, identification of the issuer (or issuers) of a particular Fund investment can depend on the terms and conditions of that investment. In some cases, such identification may be uncertain under current law, and future Internal Revenue Service (“IRS”) guidance or an adverse determination by the IRS regarding issuer identification for a particular type of investment may adversely affect the Fund’s ability to meet the diversification test. In the case of the Fund’s investment in loan participations, the Fund will treat both the entity from whom the loan participation is acquired and the borrower as an issuer for the purposes of meeting the diversification requirement described in paragraph (b) above. Finally, for purposes of this diversification requirement, the term “outstanding voting securities of such issuer” will include the equity securities of a qualified publicly traded partnership.

 

As a regulated investment company, the Fund will not be subject to any U.S. federal income or excise taxes on its net investment income and net realized capital gains that it distributes to shareholders in accordance with the timing requirements imposed by the Code. The Fund’s foreign-source income, gains, or proceeds, if any, may be subject to foreign withholding or other taxes, which could decrease the Fund’s return on the underlying investments. Shareholders of the Fund should review “Taxation of Shareholders” below for further information regarding the tax implications of their investment in the Fund.

 

If the Fund were to fail to meet the income, diversification or distribution test described above, the Fund could in some cases cure such failure, including by paying a fund-level tax, paying interest, making additional distributions or disposing of certain assets. If the Fund were ineligible to or otherwise did not cure such failure for any year, or were otherwise to fail to qualify as a “regulated investment company” accorded special tax treatment for such year, the Fund would be subject to federal income tax on all of its taxable income at corporate rates, and Fund distributions from earnings and profits, including any distributions of net tax-exempt income and net long-term capital gains, would generally be taxable as ordinary income to the shareholders. Some portions of such distributions may be eligible for the dividends received deduction in the case of corporate shareholders and may be eligible to be treated as “qualified dividend income” in the case of shareholders taxed as individuals, provided, in both cases, the shareholder meets certain holding period and other requirements in respect of the Fund’s shares (as described below). In addition, the Fund could be required to recognize unrealized gains, pay substantial taxes and interest and make substantial distributions before re-qualifying as a regulated investment company that is accorded special tax treatment.

 

9

 

 

The Fund intends to distribute at least annually to its shareholders all or substantially all of its investment company taxable income (computed without regard to the dividends-paid deduction), its net tax-exempt income (if any) and its net capital gain (that is, the excess of net long-term capital gain over net short-term capital loss, in each case determined with reference to any loss carryforwards). Any taxable income, including any net capital gain, retained by the Fund will generally be subject to tax at the Fund level at regular corporate rates.

 

If the Fund fails to distribute in a calendar year substantially all (at least 98%) of its ordinary income for such year and substantially all (at least 98.2%) of its capital gain net income for the one-year period ending October 31 (or November 30 or December 31 if the Fund is permitted to elect and so elects), plus any retained amount from the prior year, the Fund will be subject to a non-deductible 4% excise tax on the undistributed amounts. For purposes of the required excise tax distribution, ordinary gains and losses from the sale, exchange or other taxable disposition of property that would be taken into account after October 31 (or November 30 or December 31 if the Fund is permitted to elect and so elects) are treated as arising on January 1 of the following calendar year; in the case of a Fund that is permitted to make and makes the election to use December 31 as described above, there will be no gains or losses eligible to be so treated. Also, for purposes of the excise tax, the Fund will be treated as having distributed any amount on which it is subject to corporate income tax for the taxable year ending within the calendar year. A dividend paid to shareholders by the Fund in January generally is deemed to have been paid by the Fund on December 31 of the preceding year, if the dividend was declared and payable to shareholders of record on a date in October, November, or December of that preceding year. The Fund intends generally to make distributions sufficient to avoid imposition of the 4% excise tax, although there can be no assurance that it will be able to do so.

 

Capital losses in excess of capital gains (“net capital losses”) are not permitted to be deducted against the Fund’s net investment income. Instead, subject to certain limitations, the Fund may carry forward a net capital loss from any taxable year to offset capital gains, if any, realized during a subsequent taxable year without expiration; any such carryforward losses will retain their character as short-term or long-term. The Fund must apply such carryforwards first against gains of the same character. Capital loss carryforwards are reduced to the extent they offset current year net realized capital gains, whether the Fund retains or distributes such gains. See the Fund’s most recent annual shareholder report for the Fund’s available capital loss carryforwards as of the end of its most recently ended fiscal year.

 

In determining its net capital gain, including in connection with determining the amount available to support a Capital Gain Dividend (defined below), its taxable income and its earnings and profits, a regulated investment company may elect to treat any post-October capital loss (defined as any net capital loss, attributable to the portion, if any, of the taxable year after October 31 or, if there is no such loss, the net long-term capital loss or net short-term capital loss attributable to such portion of the taxable year) or late-year ordinary loss (generally, the sum of its (i) net ordinary losses, if any, from the sale, exchange or other taxable disposition of property attributable to the portion, if any, of the taxable year after October 31, and its (ii) other net ordinary losses, if any, attributable to the portion of the taxable year after December 31) as if incurred in the succeeding taxable year.

 

Massachusetts Taxes — As long as it qualifies as a regulated investment company under the Code, the Fund will not be required to pay Massachusetts income or excise taxes.

 

Taxation of Shareholders

 

Tax Treatment of Distributions — Shareholders of the Fund generally will have to pay federal income tax and any applicable non-U.S., state or local income taxes on the dividends and “Capital Gain Dividends” (as defined below) they receive from the Fund. Except as described below, any distributions from ordinary income or from net short-term capital gains are taxable to shareholders as ordinary income for federal income tax purposes whether paid in cash or reinvested in additional shares.

 

Qualified dividend income received by an individual will be taxed at the reduced rates applicable to net capital gains, provided holding period and other requirements are met. In order for some portion of the Fund’s dividends to be qualified dividend income, the Fund must meet holding period and other requirements with respect to some portion of the dividend-paying stocks in its portfolio and the Fund’s shareholder must meet holding period and other requirements with respect to the Fund’s shares. In general, a dividend will not be treated as qualified dividend income (at either the Fund or shareholder level) (1) if the dividend is received with respect to any share of stock held for fewer than 61 days during the 121-day period beginning on the date which is 60 days before the date on which such share becomes ex-dividend with respect to such dividend (or, in the case of certain preferred stock, 91 days during the 181-day period beginning 90 days before such date), (2) to the extent that the recipient is under an obligation (whether pursuant to a short sale or otherwise) to make related payments with respect to positions in substantially similar or related property, (3) if the recipient elects to have the dividend income treated as investment income for purposes of the limitation on deductibility of investment interest, or (4) if the dividend is received from a non-U.S. corporation that is (a) not eligible for the benefits of a comprehensive income tax treaty with the United States (with the exception of dividends paid on stock of such a non-U.S. corporation readily tradable on an established securities market in the United States) or (b) treated as a passive foreign investment company. Payments in lieu of dividends, such as payments pursuant to securities lending arrangements, also do not qualify to be treated as qualified dividend income.

 

In general, a distribution of investment income reported by the Fund as derived from qualified dividend income will be treated as qualified dividend income by a shareholder taxed as an individual, provided the shareholder meets the holding period and other requirements described above with respect to the Fund’s shares. If the qualified dividend income received by the Fund during any taxable year is 95% or more of its gross income for that taxable year, then 100% of the Fund’s dividends (other than Capital Gain Dividends), will be eligible to be treated as qualified dividend income. For this purpose, in the case of a sale or other disposition by the Fund of stock or securities, the only gain included in the term “gross income” is the excess of net short-term capital gain from such sales or dispositions over the net long-term capital loss from such sales or dispositions.

 

Distributions of net capital gain that are properly reported by the Fund as capital gain dividends (“Capital Gain Dividends”), whether paid in cash or reinvested in additional shares, are taxable to shareholders for U.S. federal income tax purposes as long-term capital gains includible in net capital gain and taxed to individuals at reduced rates, without regard to the length of time the shareholders have held their shares.

 

The IRS and the U.S. Treasury Department have issued regulations that impose special rules in respect of Capital Gain Dividends received through partnership interests constituting “applicable partnership interests” under Section 1061 of the Code.

 

Under U.S. Treasury Department regulations, distributions by the Fund to its shareholders that the Fund properly reports as “section 199A dividends,” as defined and subject to certain conditions described below, are treated as qualified real estate investment trust (REIT) dividends

 

10

 

 

in the hands of non-corporate shareholders. Non-corporate shareholders are permitted a federal income tax deduction equal to 20% of qualified REIT dividends received by them, subject to certain limitations. Very generally, a “section 199A dividend” is any dividend or portion thereof that is attributable to certain dividends received by the regulated investment company from REITs, to the extent such dividends are properly reported as such by the regulated investment company in a written notice to its shareholders. A section 199A dividend is treated as a qualified REIT dividend only if the shareholder receiving such dividend holds the dividend-paying regulated investment company shares for at least 46 days of the 91-day period beginning 45 days before the shares become ex-dividend, and is not under an obligation to make related payments with respect to a position in substantially similar or related property. The Fund is permitted to report such part of its dividends as section 199A dividends as are eligible, but is not required to do so.

 

Subject to any future regulatory guidance to the contrary, distributions attributable to qualified publicly traded partnership income from the Fund’s investments in master limited partnerships (“MLPs”) will ostensibly not qualify for the deduction available to non-corporate taxpayers in respect of such amounts received directly from an MLP.

 

The Code generally imposes a 3.8% Medicare contribution tax on the net investment income of certain individuals, estates and trusts to the extent their income exceeds certain threshold amounts. For these purposes, “net investment income” generally includes, among other things, (i) distributions paid by the Fund of net investment income and capital gains (other than exempt-interest dividends, defined below) as described above, and (ii) any net gain from the sale, redemption, exchange, or other taxable disposition of Fund shares. Shareholders are advised to consult their tax advisers regarding the possible implications of this additional tax on their investment in the Fund.

 

Any Fund dividend that is declared in October, November, or December of any calendar year, payable to shareholders of record in such a month and paid during the following January, will be treated as if received by the shareholders on December 31 of the year in which the dividend is declared. The Fund will notify shareholders regarding the federal tax status of its distributions after the end of each calendar year.

 

If the Fund makes a distribution to a shareholder in excess of the Fund’s current and accumulated earnings and profits in any taxable year, the excess distribution will be treated as a return of capital to the extent of such shareholder’s tax basis in its shares, and thereafter as capital gain. A return of capital is not taxable, but it reduces a shareholder’s tax basis in its shares, thus reducing any loss or increasing any gain on a subsequent taxable disposition by the shareholder of its shares.

 

Any Fund distribution, other than dividends that are declared by the Fund on a daily basis, will have the effect of reducing the per share net asset value of Fund shares by the amount of the distribution. If you buy shares when a Fund has unrealized or realized but not yet distributed ordinary income or capital gains, such income or gain will be included in the price you pay for the shares, and you may receive a portion back as a taxable distribution even though such distribution may economically represent a return of your investment.

 

If the Fund holds, directly or indirectly, one or more “tax credit bonds” issued on or prior to December 31, 2017 (including build America bonds issued on or before December 31, 2010, clean renewable energy bonds and qualified tax credit bonds) on one or more applicable dates during a taxable year, the Fund may elect to permit its shareholders to claim a tax credit on their income tax returns equal to each shareholder’s proportionate share of tax credits from the applicable bonds that otherwise would be allowed to the Fund. In such a case, shareholders must include in gross income (as interest) their proportionate share of the amount of those offsetting tax credits. A shareholder’s ability to claim a tax credit associated with one or more tax credit bonds may be subject to certain limitations imposed by the Code. Even if the Fund is eligible to pass through tax credits to shareholders, the Fund may choose not to do so.

 

Capital Loss Carryforwards — Distributions from capital gains are generally made after applying any available capital loss carryforwards. For details regarding capital loss carryforwards, please see “Tax Treatment of the Fund” above. Additionally, the amounts and expiration dates, if any, of any capital loss carryforwards available to the Fund are shown in the notes to the financial statements for the Fund.

 

Dividends-Received Deduction — In general, dividends of net investment income received by corporate shareholders of the Fund qualify for the dividends-received deduction generally available to corporations to the extent of the amount of eligible dividends received by the Fund from domestic corporations, provided the shareholder otherwise qualifies for the deduction with respect to its holding of Fund shares. Availability of the deduction for particular corporate shareholders is subject to certain limitations, and deducted amounts may result in certain basis adjustments. Payments in lieu of dividends, such as payments pursuant to securities lending arrangements, generally will not qualify for the dividends received deduction.

 

Disposition of Shares — In general, any gain or loss realized upon a disposition of Fund shares by a shareholder that holds such shares as a capital asset will be treated as a long-term capital gain or loss if the shares have been held for more than 12 months, and otherwise as a short-term capital gain or loss. However, any loss realized upon a disposition of Fund shares held for six months or less will be treated as a long-term capital loss to the extent of any Capital Gain Dividends received (or deemed received) by the shareholder with respect to those shares. Further, all or a portion of any loss realized upon a taxable disposition of Fund shares will be disallowed under the wash-sale rules as described in the Code if other substantially identical shares of the Fund are purchased within 30 days before or after the disposition. In such a case, the basis of the newly purchased shares will be adjusted to reflect the disallowed loss.

 

Shares Purchased Through Tax-Qualified Plans — Distributions by the Fund to retirement plans that qualify for tax-advantaged treatment under U.S. federal income tax laws will not be taxable. Special tax rules apply to investments through such plans. You should consult your tax adviser to determine the suitability of the Fund as an investment through such a plan and the tax treatment of distributions (including distributions of amounts attributable to an investment in the Fund) from such a plan.

 

U.S. Taxation of Non-U.S. Persons — Distributions by the Fund to shareholders that are not “U.S. persons” within the meaning of the Code (“Non-U.S. Shareholders”) properly reported by the Fund as (1) Capital Gain Dividends, (2) short-term capital gain dividends, and (3) interest-related dividends, each as defined and subject to certain conditions described below, generally will not be subject to withholding of U.S. federal income tax. However, such dividends may be subject to backup withholding, as discussed below.

 

In general, the Code defines (1) “short-term capital gain dividends” as distributions of net short-term capital gains in excess of net long-term capital losses and (2) “interest-related dividends” as distributions from U.S. source interest income of types similar to those not subject to U.S. federal income tax if earned directly by an individual Non-U.S. Shareholder, in each case to the extent such distributions are properly reported as such by the Fund in a written notice to shareholders.

 

The exceptions to withholding for short-term capital gain dividends and Capital Gain Dividends do not apply to (A) distributions to an individual Non-U.S. Shareholder who is present in the United States for a period or periods aggregating 183 days or more during the

 

11

 

 

year of the distribution and (B) distributions attributable to gain that is treated as effectively connected with the conduct by the Non-U.S. Shareholder of a trade or business within the United States, under special rules regarding the disposition of U.S. real property interests as described below. The exception to withholding for interest-related dividends does not apply to distributions to a Non-U.S. Shareholder (A) that has not provided a satisfactory statement that the beneficial owner is not a U.S. person, (B) to the extent that the dividend is attributable to certain interest on an obligation if the Non-U.S. Shareholder is the issuer or is a 10% shareholder of the issuer, (C) that is within certain foreign countries that have inadequate information exchange with the United States, or (D) to the extent the dividend is attributable to interest paid by a person that is a related person of the Non-U.S. Shareholder and the Non-U.S. Shareholder is a controlled foreign corporation. The Fund is permitted to report such part of its dividends as short-term capital gain and/or interest-related dividends as are eligible, but is not required to do so. In the case of shares held through an intermediary, the intermediary may withhold even if the Fund reports all or a portion of a payment as a short-term capital gain or interest-related dividend. Non-U.S. Shareholders should contact their intermediaries with respect to the application of these rules to their accounts.

 

Distributions by the Fund to Non-U.S. Shareholders other than Capital Gain Dividends, short-term capital gain dividends, interest-related dividends and exempt-interest dividends (e.g., dividends attributable to dividend and foreign-source interest income or to short-term capital gains or U.S. source interest income to which the exception from withholding described above does not apply) are generally subject to withholding of U.S. federal income tax at a rate of 30% (or lower applicable treaty rate).

 

If a beneficial holder who is a Non-U.S. Shareholder has a trade or business in the United States, and the dividends are effectively connected with the conduct by the beneficial holder of a trade or business in the United States, the dividend will be subject to U.S. federal net income taxation at regular income tax rates.

 

Special rules apply to distributions to Non-U.S. Shareholders from a Fund that is a qualified investment entity (“QIE”) because it is either a “U.S. real property holding corporation” (“USRPHC”) or would be a USRPHC but for the operation of the exceptions to the definition described below. Additionally, special rules apply to the sale of shares in a Fund that is a USRPHC or former USRPHC. Very generally, a USRPHC is a domestic corporation that holds U.S. real property interests (“USRPIs”) – USRPIs are defined as any interest in U.S. real property or any equity interest in a USRPHC or former USRPHC – the fair market value of which equals or exceeds 50% of the sum of the fair market values of the corporation’s USRPIs, interests in real property located outside the United States and other assets. A Fund that holds (directly or indirectly) significant interests in REITs may be a USRPHC. Interests in domestically controlled QIEs, including regulated investment companies and REITs that are QIEs, not-greater-than-10% interests in publicly traded classes of stock in REITs and not-greater-than-5% interests in publicly traded classes of stock in regulated investment companies generally are not USRPIs, but these exclusions do not apply for purposes of determining whether the Fund is a QIE.

 

If the Fund were a QIE, any distributions by the Fund (including, in certain cases, distributions made by the Fund in redemption of its shares) that are attributable directly or indirectly to (i) distributions received by the Fund from a lower-tier regulated investment company or REIT that the Fund is required to treat as USRPIs gain in its hands, and (ii) gains realized on the disposition of USRPIs by the Fund would retain their character as gains realized from USRPIs in the hands of the Fund’s Non-U.S. Shareholders and would be subject to U.S. tax withholding.

 

In addition, such distributions could result in the Non-U.S. Shareholder being required to file a U.S. tax return and pay tax on the distributions at regular U.S. federal income tax rates. The consequences to a Non-U.S. Shareholder, including the rate of such withholding and character of such distributions (e.g., as ordinary income or USRPI gain), would vary depending upon the extent of the Non-U.S. Shareholder’s current and past ownership of the Fund. Non-U.S. Shareholders of the Fund are also subject to wash-sale rules to prevent the avoidance of the tax-filing and tax-payment obligations discussed above through the sale and repurchase of Fund shares.

 

In addition, if an interest in the Fund were a USRPI, the Fund typically would be required to withhold U.S. tax on the proceeds of a share redemption by a greater-than-5% Non-U.S. Shareholder, and that shareholder typically would be required to file a U.S. income tax return for the year of the disposition of any of its Fund shares and pay any additional tax due on the gain.

 

Under U.S. federal tax law, a beneficial holder of shares who is a Non-U.S. Shareholder is not, in general, subject to U.S. federal income tax on gains (and is not allowed a deduction for losses) realized on the sale of shares of the Fund unless (i) such gain is effectively connected with the conduct of a trade or business carried on by such holder within the United States, (ii) in the case of an individual holder, the holder is present in the United States for a period or periods aggregating 183 days or more during the year of the sale and certain other conditions are met, or (iii) the shares are USRPIs.

 

In order to qualify for any exemptions from withholding described above or for lower withholding tax rates under income tax treaties, or to establish an exemption from backup withholding, a Non-U.S. Shareholder must comply with special certification and filing requirements relating to its non-US status (including, in general, furnishing an IRS Form W-8BEN, W-8BEN-E or substitute form). Non-U.S. Shareholders should consult their tax advisers in this regard.

 

Special rules (including withholding and reporting requirements) apply to non-U.S. entities treated as partnerships for U.S. federal income tax purposes and those holding Fund shares through non-U.S. partnerships. Additional considerations may apply to non-U.S. trusts and estates. Investors holding Fund shares through non-U.S. entities should consult their tax advisers about their particular situation.

 

A Non-U.S. Shareholder may be subject to state and local tax and to the U.S. federal estate tax in addition to the U.S. federal income tax referred to above. Non-U.S. investors in the Fund should consult their tax advisers with respect to the potential application of these rules.

 

Shareholder Reporting Obligations With Respect to Foreign Bank and Financial Accounts – Shareholders that are U.S. persons and own, directly or indirectly, more than 50% of the Fund by vote or value could be required to report annually their “financial interest” in the Fund’s “foreign financial accounts,” if any, on FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR). Shareholders should consult a tax adviser regarding the applicability to them of this reporting requirement.

 

Other Reporting and Withholding Requirements — Sections 1471-1474 of the Code and the U.S. Treasury Department and IRS guidance issued thereunder (collectively, “FATCA”) generally require the Fund to obtain information sufficient to identify the status of each of its shareholders under FATCA or under an applicable intergovernmental agreement (an “IGA”) between the United States and a foreign government. If a shareholder fails to provide the requested information or otherwise fails to comply with FATCA or an IGA, the Fund may be required to withhold under FATCA at a rate of 30% with respect to that shareholder on ordinary dividends it pays. The IRS and the U.S. Treasury Department have issued proposed regulations providing that these withholding rules will not apply to the gross

 

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proceeds of share redemptions or Capital Gain Dividends the Fund pays. If a payment by the Fund is subject to FATCA withholding, the Fund is required to withhold even if such payment would otherwise be exempt from withholding under the rules applicable to Non-U.S. Shareholders described above (e.g., short-term capital gain dividends and interest-related dividends).

 

Each prospective investor is urged to consult its tax adviser regarding the applicability of FATCA and any other reporting requirements with respect to the prospective investor’s own situation, including investments through an intermediary.

 

Backup Withholding — The Fund is also required in certain circumstances to apply backup withholding on taxable dividends, including Capital Gain Dividends, redemption proceeds and certain other payments that are paid to any non-corporate shareholder (including a Non-U.S. Shareholder) who does not furnish to the Fund certain information and certifications or who is otherwise subject to backup withholding. Shareholders who are neither citizens nor residents of the United States may qualify for exemption from backup withholding and should consult their tax advisers in this regard. The backup withholding rules may also apply to distributions that are properly reported as exempt-interest dividends.

 

Backup withholding is not an additional tax. Any amounts withheld may be credited against the shareholder’s U.S. federal income tax liability, provided the appropriate information is furnished to the IRS.

 

Foreign Income Taxation of a Non-U.S. Shareholder — Distributions received from the Fund by a Non-U.S. Shareholder may also be subject to tax under the laws of the Non-U.S. Shareholder’s own jurisdiction.

 

State and Local Income Taxes: U.S. Government Securities — Dividends paid by the Fund that are derived from interest on obligations of the U.S. Government and certain of its agencies and instrumentalities (but generally not distributions of capital gains realized upon the disposition of such obligations) may be exempt from state and local income taxes. The Fund generally intends to advise shareholders of the extent, if any, to which its dividends consist of such interest. Shareholders are urged to consult their tax advisers regarding the possible exclusion of such portion of their dividends for state and local income tax purposes.

 

Tax Shelter Reporting — Under U.S. Treasury Department regulations, if a shareholder recognizes a loss with respect to the Fund’s shares of $2 million or more for an individual shareholder or $10 million or more for a corporate shareholder, the shareholder must file with the IRS a disclosure statement on Form 8886. Shareholders should consult their tax advisers to determine the applicability of these Regulations in light of their individual circumstances.

 

Certain Investments — Any investment in zero coupon bonds, deferred interest bonds, payment-in-kind bonds, certain inflation-adjusted debt instruments, certain stripped securities, and certain obligations purchased at a market discount (including certain high yield debt obligations) will cause a Fund to recognize income prior to the receipt of cash payments with respect to those investments. To distribute this income and avoid a tax on the Fund, the Fund may be required to liquidate portfolio securities that it might otherwise have continued to hold, potentially resulting in additional taxable gain or loss to the Fund. In the event the Fund realizes net capital gains from such transactions, its shareholders may receive a larger capital gain distribution than they would in the absence of such transactions. Such investments may also affect the character of income recognized by the Fund.

 

Investments in debt obligations that are at risk of, or in, default, present special tax issues for a Fund. Tax rules are not entirely clear about issues such as whether and, if so, to what extent the Fund should recognize market discount on a debt obligation, when the Fund may cease to accrue interest, original issue discount or market discount, when and to what extent the Fund may take deductions for bad debts or worthless securities and how the Fund should allocate payments received on obligations between principal and income. These and other related issues will be addressed by the Fund when, as, and if it invests in such securities, in order to seek to ensure that it distributes sufficient income to preserve its status as a regulated investment company and does not become subject to U.S. federal income or excise tax.

 

Very generally, where the Fund purchases a bond at a price that exceeds the redemption price at maturity – that is, at a premium – the premium is amortizable over the remaining term of the bond. In the case of a taxable bond, if the Fund makes an election applicable to all such bonds it purchases, which election is irrevocable without consent of the IRS, the Fund reduces the current taxable income from the bond by the amortized premium and reduces its tax basis in the bond by the amount of such offset; upon the disposition or maturity of such bonds acquired on or after January 4, 2013, the Fund is permitted to deduct any remaining premium allocable to a prior period. In the case of a tax-exempt bond, tax rules require the Fund to reduce its tax basis by the amount of amortized premium.

 

Any investment by the Fund in equity securities of REITs qualifying as such under Subchapter M of the Code may result in the Fund’s receipt of cash in excess of the REIT’s earnings; if the Fund distributes these amounts, these distributions could constitute a return of capital to Fund shareholders for U.S. federal income tax purposes. Dividends received by a Fund from a REIT will not qualify for the corporate dividends-received deduction and generally will not constitute qualified dividend income.

 

Under a notice issued by the IRS in October 2006 and U.S. Treasury Department regulations that have yet to be issued but may apply retroactively, a portion of a Fund’s income (including income allocated to the Fund from a REIT or other pass-through entity) that is attributable to a residual interest in a real estate mortgage investment conduit (“REMIC”) or an equity interest in a taxable mortgage pool (“TMP”) (referred to in the Code as an “excess inclusion”) will be subject to federal income tax in all events. This notice also provides, and the Regulations are expected to provide, that excess inclusion income of a regulated investment company will be allocated to shareholders of the regulated investment company in proportion to the dividends received by such shareholders, with the same consequences as if the shareholders held the related residual interest directly. As a result, a Fund investing in such interests may not be a suitable investment for charitable remainder trusts (“CRTs”) (see below).

 

In general, excess inclusion income allocated to shareholders (i) cannot be offset by net operating losses (subject to a limited exception for certain thrift institutions), (ii) will constitute unrelated business taxable income (“UBTI”) to entities (including a qualified pension plan, an individual retirement account, a 401(k) plan, a Keogh plan or other tax-exempt entity) subject to tax on UBTI, thereby potentially requiring such an entity that is allocated excess inclusion income, and otherwise might not be required to file a tax return, to file a tax return and pay tax on such income, and (iii) in the case of a Non-U.S. Shareholder, will not qualify for any reduction in U.S. federal withholding tax. A shareholder will be subject to income tax on such inclusions notwithstanding any exemption therefrom otherwise available under the Code.

 

Income of a regulated investment company that would be UBTI if earned directly by a tax-exempt entity generally will not constitute UBTI when distributed to a tax-exempt shareholder of the regulated investment company. Notwithstanding this “blocking” effect, a tax-exempt

 

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shareholder could realize UBTI by virtue of its investment in a Fund if shares in the Fund constitute debt-financed property in the hands of the tax-exempt shareholder within the meaning of Section 514(b) of the Code.

 

A tax-exempt shareholder may also recognize UBTI if the Fund recognizes “excess inclusion income” derived from direct or indirect investments in residual interests in REMICs or equity interests in TMPs as described above, if the amount of such income recognized by the Fund exceeds the Fund’s investment company taxable income (after taking into account deductions for dividends paid by the Fund).

 

In addition, special tax consequences apply to CRTs that invest in regulated investment companies that invest directly or indirectly in residual interests in REMICs or equity interests in TMPs. Under legislation enacted in December 2006, a charitable remainder trust, as defined in Section 664 of the Code, that realizes UBTI for a taxable year must pay an excise tax annually of an amount equal to such UBTI. Under IRS guidance issued in October 2006, a CRT will not recognize UBTI solely as a result of investing in a fund that recognizes “excess inclusion income.” Rather, as described above, if at any time during any taxable year a CRT (or one of certain other tax-exempt shareholders, such as the United States, a state or political subdivision, or an agency or instrumentality thereof, and certain energy cooperatives) is a record holder of a share in a fund that recognizes “excess inclusion income,” then the fund will be subject to a tax on that portion of its “excess inclusion income” for the taxable year that is allocable to such shareholders at the highest federal corporate income tax rate. The extent to which the IRS guidance in respect of CRTs remains applicable in light of the December 2006 CRT legislation is unclear. To the extent permitted under the 1940 Act, the Fund may elect to specially allocate any such tax to the applicable CRT, or other shareholder, and thus reduce such shareholder’s distributions for the year by the amount of the tax that relates to such shareholder’s interest in the Fund. The Fund has not yet determined whether such an election will be made. CRTs are urged to consult their tax advisers concerning the consequences of investing in the Fund.

 

The Fund’s transactions in options, futures contracts, hedging transactions, forward contracts, short sales, swaps, straddles, foreign currencies, and related transactions will be subject to special tax rules (including mark-to-market, constructive sale, straddle, wash sale and short sale rules) that may affect the amount, timing, and character of Fund income and distributions to shareholders. For example, certain positions held by the Fund may be “Section 1256 contracts.” On the last business day of each taxable year (and, for purposes of the 4% excise tax, on certain other dates as prescribed under the Code), these positions will be marked to market (i.e., treated as if closed out on that day), and any gain or loss associated with such positions will be treated as 60% long-term and 40% short-term capital gain or loss (except that foreign currency gain or loss arising from Section 1256 contracts may be ordinary in character). Certain positions held by the Fund that substantially diminish its risk of loss with respect to other positions in its portfolio may constitute “straddles” for federal income tax purposes. The straddle rules may cause deferral of Fund losses, adjustments in the holding periods of Fund securities, and conversion of short-term capital losses into long-term capital losses and long-term capital gains into short-term capital gains. Certain tax elections exist for straddles that may alter the effect with respect to these investments. These rules can cause the Fund to recognize income for tax purposes prior to the receipt of cash payments with respect to the underlying investments; in order to distribute this income and avoid a tax on the Fund, the Fund may be required to liquidate portfolio securities that it might otherwise have continued to hold, potentially resulting in additional taxable gain or loss to the Fund and additional taxable distributions to shareholders. In addition, because the tax rules applicable to derivative financial instruments are in some cases uncertain under current law, an adverse determination or future guidance by the IRS with respect to these rules (which determination or guidance could be retroactive) may affect whether a Fund has made sufficient distributions, and otherwise satisfied the relevant requirements, to maintain its qualification as a regulated investment company and avoid a fund-level tax. The Fund intends to limit its activities in options, futures contracts, forward contracts, short sales, and swaps and related transactions, as well as any commodity-related investments, to the extent necessary to meet the requirements for qualification and treatment as a regulated investment company under Subchapter M of the Code.

 

Certain of the Fund’s hedging activities (including its transactions, if any, in foreign currencies or foreign currency-denominated instruments) are likely to produce a difference between its book income and its taxable income. If the Fund’s book income exceeds the sum of its taxable income and net tax-exempt income (if any), the distribution (if any) of such excess generally will be treated as (i) a dividend to the extent of the Fund’s remaining earnings and profits (including earnings and profits arising from any tax-exempt income), (ii) thereafter, as a return of capital to the extent of the recipient’s basis in its shares, and (iii) thereafter, as gain from the sale or exchange of a capital asset. If the Fund’s book income is less than the sum of its taxable income and net tax-exempt income (if any), the Fund could be required to make distributions exceeding book income to qualify as a regulated investment company that is accorded special tax treatment.

 

Special tax considerations apply with respect to any foreign investments by the Fund. Foreign exchange gains and losses realized by the Fund may be treated as ordinary income and loss. The Code grants the Secretary of Treasury the right to issue tax regulations that would exclude income and gains from direct investments in foreign currencies from treatment as qualifying income for purposes of the qualifying income test for regulated investment companies described earlier, in cases where the foreign currency gains are not directly related to the company’s principal business of investing in stocks or securities (or options or futures with respect to stocks or securities). If the Secretary of the Treasury were to issue such regulations, a Fund may need to change its investment practices in order to qualify as a regulated investment company. In addition, there is a remote possibility that such regulations may be applied retroactively.

 

Equity investments by the Fund in certain “passive foreign investment companies” (“PFICs”) could potentially subject the Fund to a U.S. federal income tax (including interest charges) on distributions received from such PFIC or on proceeds received from the disposition of shares in such PFIC. This tax cannot be eliminated by making distributions to Fund shareholders. However, a Fund may elect to avoid the imposition of that tax. For example, the Fund may elect to treat a PFIC as a “qualified electing fund” (i.e., make a “QEF election”), in which case the Fund will be required to include its share of the PFIC’s income and net capital gains annually, regardless of whether it receives any distribution from the PFIC. A Fund also may make an election to mark the gains (and to a limited extent losses) in such holdings “to the market” as though it had sold (and, solely for purposes of this mark-to-market election, repurchased) its holdings in those PFICs on the last day of the Fund’s taxable year. Such gains and losses are treated as ordinary income and loss. The QEF and mark-to-market elections may accelerate the recognition of income (without the receipt of cash) and increase the amount required to be distributed by a Fund to avoid taxation. Making either of these elections therefore may require the Fund to liquidate other investments (including when it is not advantageous to do so) to meet its distribution requirement, which also may accelerate the recognition of gain and affect the Fund’s total return. Dividends paid by PFICs will not be eligible to be treated as “qualified dividend income.” Because it is not always possible to identify a foreign corporation as a PFIC, the Fund may incur the tax and interest charges described above in some instances.

 

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Investment income received by the Fund and gains and proceeds with respect to foreign securities may be subject to foreign withholding or other taxes. The United States has entered into tax treaties with many foreign countries that may entitle the Fund to a reduced rate of tax or an exemption from tax on such income or gains; the Fund intends to qualify for treaty-reduced rates where available. It is not possible, however, to determine the Fund’s effective rate of foreign tax in advance, since the amount of the Fund’s assets to be invested within various countries is not known.

 

If more than 50% of the total assets of a Fund consists of direct investments in foreign securities at the close of its taxable year, the Fund may elect to “pass through” to its shareholders foreign income taxes paid by it. In addition, a “qualified fund of funds” (a regulated investment company at least 50% of the total assets of which are represented by interests in other regulated investment companies (for purposes of this section, “Underlying Funds”) at the close of each quarter of its taxable year) will be permitted to make the same election in respect of foreign taxes paid by such Fund and by Underlying Funds that themselves make such an election. If the Fund so elects, shareholders will be required to treat their pro rata portions of qualified taxes paid by the Fund, and, in the case of a qualified fund of funds, paid by the Underlying Funds, to foreign countries in respect of foreign securities that the Fund has held for at least the minimum period specified in the Code, as part of the amounts distributed to them by the Fund, and thus to include those portions in their gross income for U.S. federal income tax purposes in the year the foreign income tax was paid. Provided certain conditions are met and subject to limitation, a shareholder who includes such foreign income taxes paid by the Fund in its gross income may be able to claim a credit or deduction. No deduction will be permitted for individuals in computing their alternative minimum tax liability. Shareholders that are not subject to U.S. federal income tax, and those who invest in the Fund through tax-advantaged accounts (including those who invest through individual retirement accounts or other tax-advantaged retirement plans), generally will receive no benefit from any tax credit or deduction passed through by the Fund. If the Fund is not eligible, or does not elect, to “pass through” to its shareholders foreign income taxes it has paid, shareholders will not be able to claim any deduction or credit for any part of the foreign taxes paid by the Fund. In addition, investments in certain foreign securities (including fixed income securities and derivatives) denominated in foreign currencies may increase or accelerate the Fund’s recognition of ordinary income and may affect the timing, amount, or character of the Fund’s distributions.

 

If the Fund qualifies as a “qualified fund of funds” (defined above), it will be permitted to distribute “exempt-interest dividends” under the Code and thereby pass through to its shareholders the tax-exempt character of any exempt-interest dividends it receives from Underlying Funds in which it invests, or interest on any tax-exempt obligations in which it directly invests, if any. Such distributions may be treated as an item of tax preference for individual shareholders under the federal alternative minimum tax and may be subject to state and local taxes. Shareholders are required to report exempt-interest dividends received from the Fund on their federal income tax returns.

 

Commodity-Related Investments by MFS Commodity Strategy Fund — The Fund’s direct or indirect investments in commodity-linked derivatives can be limited by the Fund’s intention to qualify as a regulated investment company, and can limit the Fund’s ability to so qualify. Income and gains from certain commodity-linked investments do not constitute qualifying income for the purposes of the 90% gross income test described above. The tax treatment of certain other commodity-linked investments, including exchange-traded notes and certain structured notes is not certain, in particular with respect to whether income or gains from such investments constitute qualifying income to a regulated investment company. If the Fund were to treat income or gain from a particular investment as qualifying income and the income or gain were later determined not to constitute qualifying income and, together with any other nonqualifying income, caused the Fund’s nonqualifying income to exceed 10% of its gross income in any taxable year, the Fund would fail to qualify as a regulated investment company unless it is eligible to and does pay a tax at the Fund level.

 

A U.S. person, such as the Fund, who owns (directly or indirectly) 10% or more of the total combined voting power of all classes of stock of a foreign corporation or 10% or more of the total value of shares of all classes of stock of a foreign corporation is a “U.S. Shareholder” for purposes of the controlled foreign corporation (“CFC”) provisions of the Code. A CFC is a foreign corporation that, on any day of its taxable year, is owned (directly, indirectly, or constructively) more than 50% (measured by voting power or value) by U.S. Shareholders. The Fund will be a U.S. Shareholder and the Subsidiary will be a CFC. As a U.S. Shareholder, the Fund is required to include in gross income for U.S. federal income tax purposes for each taxable year of the Fund its pro rata share of its CFC’s “subpart F income” for the CFC’s taxable year ending within the Fund’s taxable year, whether or not such income is actually distributed by the CFC. Subpart F income generally includes interest, OID, dividends, net gains from transactions in commodity-linked derivatives and disposition of stocks or securities, receipts with respect to securities loans, and net payments received with respect to equity swaps and similar derivatives. Subpart F income is treated as ordinary income, regardless of the character of the CFC’s underlying income. Net losses incurred by a CFC during a tax year do not flow through to the Fund and thus will not be available to offset income or capital gain generated from the Fund’s other investments. In addition, net losses incurred by a CFC during a tax year generally cannot be carried forward by the CFC to offset gains realized by it in subsequent taxable years. The Fund’s recognition of any subpart F income from an investment in any subsidiary treated as a CFC that is in excess of actual cash received from such CFC may increase the Fund’s tax basis in such subsidiary. Distributions by any subsidiary treated as a CFC to the Fund, including a redemption of such subsidiary’s shares, will be tax free to the extent of any such subsidiary’s previously undistributed subpart F income, and will correspondingly reduce the Fund’s tax basis in any such subsidiary, and any distributions in excess of the Fund’s tax basis in any such subsidiary will be treated as realized gain. Under U.S. Treasury Department regulations, subpart F income, if any, realized by a wholly-owned non-U.S. subsidiary (such as the Subsidiary) of the Fund and included in the Fund’s annual income for U.S. federal income purposes, will constitute qualifying income to the extent it is either (i) timely and currently repatriated or (ii) derived with respect to the Fund’s business of investing in stock, securities or currencies.

 

PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS

 

Specific decisions to purchase or sell securities and other instruments for the Fund are made by persons affiliated with MFS. Any such person may serve other clients of MFS or any subsidiary of MFS in a similar capacity. When making trading decisions, MFS can select strategies or methods or directly select venues in order to seek best execution for client transactions. These decisions are influenced by a number of factors that are described more specifically below.

 

MFS seeks to obtain best execution for the Fund by executing transactions in such a manner that the Fund’s total costs or proceeds in each transaction are the most favorable under the circumstances. Trading practices differ with respect to fixed income and equity securities, and the discussion of trading practices below will differ depending on security type. MFS deals with broker/dealers reasonably expected to provide the most favorable execution quality under the circumstances. The specific criteria used in selecting a broker/dealer will vary

 

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depending upon the nature of the transaction, the market in which it is executed, and the extent to which it is possible to select among multiple broker/dealers. MFS defines best execution as a process that seeks to execute portfolio transactions in a manner that MFS believes will provide the most favorable qualitative execution, including execution price and commission, spread, or other transaction costs, reasonably available under the circumstances. This process involves the evaluation of the trading process and execution results over extended periods. In seeking best execution, MFS takes into account several factors that it considers to be relevant, which include without limitation and in no particular order, the following: price; the size of the transaction; the nature of the market or the security; the amount of the commission or “spread”; the timing and potential for impact of the transaction, considering market prices and trends; the reputation, experience, and stability of the broker/dealer involved; the willingness of the broker/dealer to commit capital; the need for anonymity in the market; and the quality of services rendered by the broker/dealer in other transactions.

 

MFS places trades in various manners including through different broker/dealers, agency brokers, principal market-making dealers, smaller brokers and dealers, which may specialize in particular regions or asset classes, futures commission merchants, and OTC derivatives dealers (each, a “broker/dealer” for purposes of the discussion in this section) as well as via electronic trading platforms, including electronic communications networks (ECNs) (including, without limitation, multilateral trading facilities (MTFs), and alternative trading systems (ATSs)). These trading platforms often, in the case of equity transactions, execute transactions at a commission rate lower than that charged by a full-service broker/dealer. Additionally, subject to its obligation to seek best execution, MFS may also execute transactions through Luminex Trading & Analytics LLC (Luminex), an ATS of which MFS owns a small stake (i.e., less than 2%) of its parent company. Accordingly, there could be an economic incentive for MFS to route orders to Luminex to enhance its profitability.

 

In certain circumstances, such as a “buy-in” for failure to deliver, MFS is not able to select the broker/dealer who will transact to cover the failure. For example, if a Fund sells a security short and is unable to deliver the securities sold short, the broker/dealer through whom the Fund sold short must deliver securities purchased for cash, (i.e., effect a “buy-in,” unless it knows that the Fund either is in the process of forwarding the securities to the broker/dealer or will do so as soon as possible without undue inconvenience or expense). Similarly, there can also be a failure to deliver in a long transaction and a resulting buy-in by the broker/dealer through whom the securities were sold. If the broker/dealer effects a buy-in, MFS will be unable to control the trading techniques, methods, venues, or any other aspect of the trade used by the broker/dealer.

 

Brokers/dealers generally will either receive (i) a commission, which is generally negotiable and can vary depending on the type of broker/dealer, type of trade (agency or principal), and market, or (ii) for trades executed on a “net” basis in lieu of a commission, a “spread” representing the difference (or a portion of the difference) between the buying price and the selling price. Foreign equity securities are typically subject to a fixed notional commission rate which is negotiated on a country-by-country basis. Commissions in the United States are typically measured in cents per share, while commissions in most non-U.S. jurisdictions are typically measured in basis points. Fixed income transactions are generally traded in the over the counter market or on a venue and do not include a stated commission. As described above, the broker/dealer in a fixed income transaction typically retains the spread or a portion of the spread, and additionally the venue may receive some of the retained spread. In the case of securities purchased from underwriters, the cost of such securities generally includes a fixed underwriting commission or concession. Transaction costs related to trading may include market impact costs and opportunity costs in addition to dealer spreads and commission costs.

 

Commission rates for equity securities and some derivatives will vary depending upon the trading methods, venues, and broker/dealers selected, as well as the market(s) in which the securities are traded and their relative liquidity. As noted above, MFS can utilize a variety of broker/dealers and trading venues and strategies in order to seek best execution for client transactions. MFS evaluates various factors in selecting broker/dealers to execute trades, including the ability to execute trades with a minimum of market impact, the speed and efficiency of executions, electronic trading capabilities, adequacy of capital, commitment of capital when necessary or desirable, market color provided to MFS, execution services, and accommodation of MFS’ special needs. MFS may employ outside vendors to provide reports on the quality of broker/dealer executions. With respect to transactions in derivatives, MFS trades only with broker/dealers with whom it has legally-required or client-requested documentation in place.

 

MFS utilizes a global investment platform built on the principle of close collaboration among members of its investment team, where research and investment ideas are shared. MFS investment professionals rely on their own internal research in making investment decisions even though they utilize external research provided by brokers or other research providers to help develop investment ideas. External research is also used to help understand market consensus, sentiment, or perception, and identify relative inefficiencies more quickly and effectively.

 

MFS makes decisions on the procurement of external research separately and distinctly from decisions on the selection of brokers that execute transactions for the Fund. MFS will only execute a transaction with a broker/dealer who provides external research when, in MFS’ judgment, the broker/dealer is capable of providing best execution for that transaction. However, as permitted by Section 28(e) of the Securities Exchange Act of 1934, as amended (“Section 28(e)”), MFS may cause the Fund to pay a broker/dealer that provides “brokerage and research services” (as defined in Section 28(e)) an amount of commission for effecting a securities transaction for the Fund in excess of the amount other broker/dealers would have charged for the transaction if MFS determines in good faith that the greater commission is reasonable in relation to the value of the brokerage and research services provided viewed in terms of MFS’ overall responsibilities to the Fund. The brokerage and research services received may be useful and of value to MFS in serving both the accounts that generated the commissions and other clients of MFS. Accordingly, not all of the research and brokerage services provided by brokers through which the Fund’s securities transactions are effected may be used by MFS in connection with the Fund whose account generated the brokerage commissions.

 

MFS has undertaken to bear the costs of external research for all accounts it advises, either by paying for external research out of its own resources, or by voluntarily reimbursing clients from its own resources for excess commissions paid to obtain external research. For accounts subject to a regulatory prohibition on the payment of excess commissions for research, including accounts that are directly or indirectly subject to the Markets in Financial Instruments Directive in the European Union or United Kingdom (“MiFID II accounts”), MFS will pay for external research out of its own resources. For all other accounts, MFS operates client commission arrangements that generate commission “credits” for the purchase of external research from commissions on equity trades in a manner consistent with Section 28(e). Under these arrangements, MFS may cause a client to pay commissions in excess of what the broker/dealer or other brokers might have charged for certain transactions in recognition of brokerage and research services provided by the executing broker/dealer. MFS has

 

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voluntarily undertaken to reimburse clients from its own resources in an amount equal to all commission credits generated under these arrangements.

 

The research services obtained by MFS through the use of commission credits may include: access to corporate management; industry conferences; research field trips to visit corporate management and/or to tour manufacturing, production or distribution facilities; statistical, research and other factual information or services such as investment research reports; access to analysts; a small number of expert networks; reports or databases containing corporate, fundamental, technical, and political analyses; ESG-related information; portfolio modeling strategies; and economic research services, such as publications, chart services, and advice from economists concerning macroeconomics information, and analytical investment information about particular corporations.

 

Through the use of eligible brokerage and research services acquired with commission credits, MFS initially avoids the additional expenses that it would incur if it developed comparable information through its own staff or if it purchased such services with its own resources. As a result, the Fund may pay more for its portfolio transactions in the first instance than if MFS had the Fund pay execution only rates. However, because MFS has voluntarily undertaken to reimburse clients from its own resources for commission credits generated from client brokerage, MFS ultimately assumes the additional expenses that it would incur if it purchased external research with its own resources. If MFS determined to discontinue this voluntary undertaking, it may have an incentive to select or recommend a broker/dealer based on its interest in receiving external research rather than the Fund’s interest in receiving lower commission rates.

 

Although MFS generally bears the costs of external research, MFS believes it generally does not pay, and therefore does not reimburse, clients with respect to research that is made available by a broker/dealer to all of its customers and that MFS considers to be of de minimis value, or for external research provided by executing brokers in fixed income transactions that incur mark-ups, mark-downs, and other fees rather than commissions. With respect to fixed income, MFS believes that executing brokers in fixed income transactions do not charge lower mark-ups, mark-downs, commission equivalents or other fees if clients forego research services. Consequently, MFS does not believe it pays higher mark-ups, mark-downs, commission equivalents or other fees to brokers on fixed income transactions than it would if it did not receive any research services from brokers. MFS may also execute purchase and sale transactions between the Fund and other funds or accounts managed by MFS or its affiliates (cross-trades). Cross-trade transactions entered into by the Fund are executed in accordance with applicable rules under the 1940 Act and related policies approved by the Board.

 

Brokerage commissions paid by the Fund for certain specified periods and information concerning purchases by the Fund of securities issued by its regular broker/dealers for its most recent fiscal year are set forth in APPENDIX L.

 

DISCLOSURE OF PORTFOLIO HOLDINGS AND OTHER FUND INFORMATION

 

The Fund may from time to time make available to the public information about the Fund on mfs.com, Facebook, Twitter, YouTube, LinkedIn, and/or other social media.

 

The Fund has established a policy governing the disclosure of its portfolio holdings that is reasonably designed to protect the confidentiality of the Fund’s non-public portfolio holdings and prevent inappropriate selective disclosure of such holdings. The Fund’s Board has approved this policy and will be asked to approve any material amendments to this policy. Exceptions to this policy may be authorized by MFS’ general counsel or a senior member of the MFS legal department acting under the supervision of MFS’ general counsel (an “Authorized Person”).

 

Neither MFS nor the Fund will receive any compensation or other consideration in connection with its disclosure of Fund portfolio holdings.

 

Public Disclosure of Portfolio Holdings

 

In addition to the public disclosure of Fund portfolio holdings through required SEC quarterly filings, the Fund may make its portfolio holdings publicly available on mfs.com in such scope and form and with such frequency as MFS reasonably determines and as described in the Fund’s Prospectus.

 

Holdings also include short positions, if any. For certain MFS Funds that invest in other MFS Funds (other than money market funds), the top 10 holdings and full holdings are aggregated holdings, including Fund holdings and the holdings of non-money market funds in which the Fund invests. With respect to MFS Commodity Strategy Fund, top 10 holdings and full holdings are aggregated holdings including fund holdings and the holdings of the Subsidiary. Portfolio holdings are determined based on the equivalent exposure of holdings. The equivalent exposure of a holding is a calculated amount that approximates the market value of an underlying asset that is expected to have the same impact on performance as the holding. The equivalent exposure of a derivative may be different than the market value of the derivative. For most other holdings, the equivalent exposure is the same as the market value of the holding. If approved by an Authorized Person, the Fund may from time to time make available on mfs.com and/or in a press release, information about the holdings of the Fund in a particular investment or investments as of a current date, including the equivalent exposure of such holding or holdings.

 

Note that the Fund or MFS may suspend the posting of this information or modify the elements of this Web posting policy without notice to shareholders. Once posted, the above information will generally remain available on mfs.com until at least the date on which the Fund files a Form N-CSR or Form N-PORT for the period that includes the date as of which mfs.com information is current.

 

Certain registered investment companies that are advised by MFS and registered investment companies that are sub-advised by MFS or its affiliates are subject to different portfolio holdings disclosure policies that may permit public disclosure of portfolio holdings information in different forms and at different times, including disclosure of certain portfolio holdings each business day. In addition, separate account and unregistered product clients of MFS or its affiliates have same day access to their portfolio holdings, and prospective clients and their advisers have access to representative portfolio holdings and may grant same day access to these portfolio holdings to their clients, their investors, and/or to one or more affiliated and unaffiliated service providers. In addition, information about non-public portfolio holdings information attributable to other accounts managed or advised by MFS or its affiliates may be made available to one or more affiliated or unaffiliated service providers to those accounts. Some of these registered investment companies, sub-advised funds, separate accounts, unregistered products, and other accounts, all advised or sub-advised by MFS or its affiliates, have substantially similar, or in some cases nearly identical, portfolio holdings to certain MFS Funds (“Similarly Managed Investment Products”). A Similarly Managed Investment

 

17

 

 

Product is not subject to the portfolio holdings disclosure policies of the Fund to which it is similar and may disclose its similar or nearly identical portfolio holdings information in different forms and at different times than such Fund.

 

The Fund’s portfolio holdings are considered to be publicly disclosed: (a) upon the disclosure of the portfolio holdings in a publicly available, routine filing with the SEC that is required to include the information; (b) the day after the Fund makes such information available on mfs.com (assuming that it discloses in its Prospectus that such information is available on mfs.com); or (c) at such additional times and on such additional basis as determined by the SEC or its staff.

 

Disclosure of Non-Public Portfolio Holdings

 

The Fund may, in certain cases, disclose to third parties its portfolio holdings which have not been made publicly available. Disclosure of non-public portfolio holdings to third parties may only be made if an Authorized Person determines that such disclosure is for a legitimate business purpose and is not impermissible under applicable law or regulation. In addition, the third party receiving the non-public portfolio holdings may, at the discretion of an Authorized Person, be required to agree in writing to keep the information confidential and/or agree not to trade directly or indirectly based on the information. Such agreements may not be required in circumstances such as where portfolio securities are disclosed to broker/dealers to obtain bids/prices or in interviews with the media. MFS will use reasonable efforts to monitor a recipient’s use of non-public portfolio holdings provided under these agreements by means that may include contractual provisions, periodic due diligence, notices reminding a recipient of their obligations or other commercially reasonable means. The restrictions and obligations described in this paragraph do not apply to non-public portfolio holdings provided to MFS or its affiliates, or to the disclosure of portfolio holdings as may be required by applicable law, rules, or regulations.

 

With respect to non-public portfolio holdings provided to employees and contractors of MFS or its subsidiaries, employees and contractors of MFS and its subsidiaries are subject to corporate policies which prohibit use of portfolio holdings information for personal benefit or to benefit others.

 

In addition, to the extent that an Authorized Person determines that there is a potential conflict with respect to the disclosure of information that is not publicly available between the interests of the Fund’s shareholders, on the one hand, and MFS, MFD or an affiliated person of MFS, MFD, or the Fund, on the other hand, the Authorized Person must inform MFS’ conflicts officer of such potential conflict, and MFS’ conflicts officer shall determine whether, in light of the potential conflict, disclosure is reasonable under the circumstances, and shall report such potential conflict of interest determinations to the Fund’s Chief Compliance Officer and the Board of the Fund. MFS also reports to the Board of the Fund regarding the disclosure of information regarding the Fund that is not publicly available.

 

Subject to compliance with the standards set forth in the previous two paragraphs, non-public portfolio holdings may be disclosed in the following circumstances:

 

Employees of MFS or MFD (collectively “Fund representatives”) disclose non-public portfolio holdings in connection with the day-to-day operations and management of the Fund. Full portfolio holdings are disclosed to the Fund’s custodian, independent registered accounting firm, financial printers, regulatory authorities, and stock exchanges and other listing organizations. Portfolio holdings are disclosed to the Fund’s pricing service vendors and broker/dealers when requesting bids for, or price quotations on, securities, and to other persons (including independent contractors) who provide systems or software support in connection with Fund operations, including accounting, compliance support, and pricing. Portfolio holdings may also be disclosed to persons assisting the Fund in the voting of proxies or in connection with litigation relating to Fund portfolio holdings. In connection with managing the Fund, MFS may use analytical systems provided by third parties who may have access to Fund portfolio holdings. Non-public portfolio holdings may be disclosed in connection with other activities, such as to participants in in-kind purchases and redemptions of Fund shares, to service providers facilitating the distribution or analysis of portfolio holdings, and in other circumstances not described above.

 

In addition, subject to such disclosure not being impermissible under applicable law or regulation, Fund representatives may disclose Fund portfolio holdings and related information, which may be based on non-public portfolio holdings, under the following circumstances (among others):

 

Fund representatives may provide oral or written information (“portfolio commentary”) about the Fund, including how the Fund’s investments are divided among various sectors, industries, countries, value and growth stocks, small, mid, and large-cap stocks, among stocks, bonds, currencies and cash, types of bonds, bond maturities, bond coupons, and bond credit quality ratings. This portfolio commentary may also include information on how these various weightings and factors contributed to Fund performance. Fund representatives may also express their views orally or in writing on one or more of the Fund’s portfolio holdings or may state that the Fund has recently purchased or sold one or more holdings.

 

Fund representatives may also provide oral or written information (“statistical information”) about various financial characteristics of the Fund or its underlying portfolio securities including alpha, beta, coefficient of determination, duration, maturity, information ratio, Sharpe ratio, earnings growth, payout ratio, price/book value, projected earnings growth, return on equity, standard deviation, tracking error, weighted average credit quality, market capitalization, percent debt to equity, price to cash flow, dividend yield or growth, default rate, portfolio turnover, and risk and style characteristics.

 

The portfolio commentary and statistical information may be provided to members of the press, shareholders in the Fund, persons considering investing in the Fund, or representatives of such shareholders or potential shareholders, such as fiduciaries of a 401(k) plan or a trust and their advisers, and the content and nature of the information provided to each of these persons may differ.

 

Ongoing Arrangements To Make Non-Public Portfolio Holdings Available

 

With authorization from an Authorized Person consistent with “Disclosure of Non-Public Portfolio Holdings” above, Fund representatives may disclose non-public Fund portfolio holdings to the recipients identified on APPENDIX M or permit the recipients identified in APPENDIX M to have access to non-public Fund portfolio holdings, on an ongoing basis.

 

18

 

 

DETERMINATION OF NET ASSET VALUE

 

The net asset value per share of each class of shares of the Fund is determined each day during which the New York Stock Exchange (the NYSE) is open for trading. (As of the date of this SAI, the NYSE is open for trading every weekday except in an emergency and for the following holidays (or the days on which they are observed): New Year’s Day; Martin Luther King Day; Presidents’ Day; Good Friday; Memorial Day; Juneteenth; Independence Day; Labor Day; Thanksgiving Day; and Christmas Day.) This determination is made once each day as of the close of regular trading on the NYSE (generally, 4 p.m., Eastern time) by deducting the amount of the liabilities attributable to the class (or if no classes, to the Fund) from the value of the assets attributable to the class (or if no classes, to the Fund) and dividing the difference by the number of Fund shares outstanding for that class (or if no classes, for that Fund). Net asset value may be calculated earlier in emergency situations or as otherwise permitted by the SEC. In accordance with regulations for regulated investment companies, changes in portfolio holdings and number of shares outstanding are generally reflected in a Fund’s net asset value the next business day after such change.

 

Open-end investment companies are generally valued at their net asset value per share. The underlying investments of open-end investment companies managed by MFS are valued as described below.

 

Equity securities, including restricted equity securities and equity securities sold short, are generally valued at the last sale or official closing price for such security on their primary market or exchange as provided by a third-party pricing service. Equity securities for which there were no sales reported that day are generally valued at the last quoted daily bid quotation on their primary market or exchange as provided by a third-party pricing service. Equity securities sold short, for which there were no sales reported that day, are generally valued at the last quoted daily ask quotation on their primary market or exchange as provided by a third-party pricing service.

 

Debt instruments and floating rate loans, including restricted debt instruments, are generally valued at an evaluated or composite bid for such instrument as provided by a third-party pricing service. Debt instruments sold short are generally valued at an evaluated or composite mean as provided by a third-party pricing service.

 

Short-term instruments with a maturity at issuance of 60 days or less may be valued at amortized cost for such instrument, which approximates market value.

 

Exchange-traded options generally are valued at the last sale or official closing price for such option on their primary exchange as provided by a third-party pricing service. Exchange-traded options for which there were no sales reported that day are generally valued at the last daily bid quotation for such option on their primary exchange as provided by a third-party pricing service. Options not traded on an exchange are generally valued at a broker/dealer bid quotation for such option. Foreign currency options are generally valued at a valuation for such option provided by a third-party pricing service.

 

Futures contracts generally are valued at last posted settlement price for such contract on their primary exchange as provided by a third-party pricing service. Futures contracts for which there were no trades that day for a particular position are generally valued at the closing bid quotation for such contract on their primary exchange, as provided by a third-party pricing service.

 

Forward foreign currency exchange contracts generally are valued at the mean of bid and asked prices for the time period interpolated from rates provided by a third-party pricing service for proximate time periods.

 

Swaps generally are valued at valuations provided by a third-party pricing service.

 

Securities and other assets generally valued on the basis of information from a third-party pricing service may also be valued at a broker/dealer bid quotation.

 

Values obtained from third-party pricing services can utilize both transaction data and market information such as yield, quality, coupon rate, maturity, type of issue, trading characteristics, spreads, 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 provided by a third-party pricing service.

 

DESCRIPTION OF SHARES, VOTING RIGHTS, AND LIABILITIES

 

The Trust’s Declaration of Trust, as amended or amended and restated from time to time, permits the Trust’s Board to issue an unlimited number of full and fractional shares of beneficial interest (without par value) of each series, to divide or combine the shares of any series into a greater or lesser number of shares without thereby changing the proportionate beneficial interests in that series, and to divide such shares into classes. The Board has reserved the right to create and issue additional series and classes of shares.

 

Each shareholder of the Fund or class is entitled to one vote for each dollar of net asset value (number of shares owned times net asset value per share) of such Fund or class, on each matter on which the shareholder is entitled to vote. Each fractional dollar amount is entitled to a proportionate fractional vote. Except when a larger vote is required by applicable law, a majority of the voting power of the shares voted in person or by proxy on a matter will decide that matter and a plurality of the voting power of the shares voted in person or by proxy will elect a Trustee. Shareholders of all series of the Trust generally will vote together on all matters except when a particular matter affects only shareholders of a particular class or series or when applicable law requires shareholders to vote separately by series or class.

 

From time to time, MFS and/or its affiliates may invest “seed capital” in the Fund. These investments are generally intended to enable the Fund or a share class of the Fund to commence investment operations and/or achieve sufficient scale. MFS and/or its affiliates are under no obligation to maintain seed capital investments in a Fund and may redeem such investments in a Fund at any time and without prior notice.

 

Except in limited circumstances, the Board may, without any shareholder vote, amend or otherwise supplement the Trust’s Declaration of Trust. Each Trust except MFS Series Trust XV, or any series or class thereof, may merge or consolidate or may sell, lease, or exchange all or substantially all of its assets if authorized (either at a meeting or by written consent) by a Majority Shareholder Vote of the class, series, or trust, as applicable. MFS Series Trust XV, or any series or class of MFS Series Trust XV, may merge or consolidate or may sell, lease, or exchange all or substantially all of its assets with or without any shareholder vote to the extent permitted by law. The Trust, or any series or class, may reincorporate or reorganize without any shareholder vote. The Trust, any series of the Trust, or any class of any series, may be

 

19

 

 

terminated at any time: 1) by a Majority Shareholder Vote; or 2) by the Board by written notice to the shareholders of the Trust, any series of the Trust, or any class of any series.

 

In the event of a liquidation of a Fund, shareholders of each class of the Fund are entitled to share pro rata in the net assets of the Fund available for distribution to such shareholders. Shares of a Fund have no preemptive rights and have dividend and conversion rights (if any) as described in the Prospectus for the Fund.

 

The Board may cause a shareholder’s shares to be redeemed for any reason under terms set by the Board, including, 1) to protect the tax status of a Fund, 2) the failure of a shareholder to provide a tax identification number if required to do so, 3) the failure of a shareholder to pay when due for the purchase of shares issued to the shareholder, 4) in order to eliminate accounts whose values are less than a minimum amount established by the Board, 5) the failure of a shareholder to meet or maintain the qualifications for ownership of a particular class of shares, and 6) to eliminate ownership of shares by a particular shareholder when the Board determine that the particular shareholder’s ownership is not in the best interests of the other shareholders of the applicable Fund (for example, in the case of an alleged market timer).

 

Under the Trust’s Declaration of Trust, the Fund may convert to a master/feeder structure or a fund-of-funds structure without shareholder approval. In a master/feeder structure, a Fund invests all of its assets in another investment company with similar investment objectives and policies. In a fund-of-funds structure, a Fund invests all or a portion of its assets in multiple investment companies.

 

The Trust is an entity commonly known as a “Massachusetts business trust.” Under Massachusetts law, shareholders of such a trust may, under certain circumstances, be held personally liable as partners for its obligations. However, the Trust’s Declaration of Trust contains an express disclaimer of shareholder liability for acts or obligations of the Trust and provides for indemnification and reimbursement of expenses out of Trust property for any shareholder held personally liable for the obligations of the Trust. The Trust also maintains insurance for the protection of the Trust and its shareholders and the Board, officers, employees, and agents of the Trust covering possible tort and other liabilities. Thus, the risk of a shareholder incurring financial loss on account of shareholder liability is limited to circumstances in which both inadequate insurance existed and the Trust itself was unable to meet its obligations.

 

The Trust’s Declaration of Trust further provides that obligations of the Trust are not binding upon the Board individually but only upon the property of the Trust, and that the Board will not be liable for any action or failure to act, but nothing in the Trust’s Declaration of Trust or other agreement with a Trustee protects a Trustee against any liability to which he or she would otherwise be subject by reason of his or her willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his or her office.

 

The Trust’s Declaration of Trust provides that shareholders may not bring suit on behalf of the Fund without first requesting that the Board bring such suit unless there would be irreparable injury to the Fund or if a majority of the Board (or a majority of the Board on any committee established to consider the merits of such action) have a personal financial interest in the action. Trustees are not considered to have a personal financial interest by virtue of being compensated for their services as Trustees or as trustees of MFS Funds with the same or an affiliated investment adviser or distributor.

 

The Trust’s Declaration of Trust provides that by becoming a shareholder of the Fund, each shareholder shall be expressly held to have assented to and agreed to be bound by the provisions of the Trust’s Declaration of Trust.

 

Under the Trust’s By-Laws and Declaration of Trust, any claims asserted against or on behalf of the MFS Funds, including claims against Trustees and Officers, must be brought in state and federal courts located within the Commonwealth of Massachusetts.

 

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM(S) AND FINANCIAL STATEMENTS

 

Ernst & Young LLP, 200 Clarendon Street, Boston, MA 02116, serves as the independent registered public accounting firm for MFS Emerging Markets Debt Local Currency Fund, MFS Global Equity Fund, MFS Global Total Return Fund, MFS Income Fund, and MFS Utilities Fund, providing audit and related services, and assistance in connection with various SEC filings.

 

Each such Fund’s Financial Statements and Financial Highlights for the fiscal year ended October 31, 2022, are incorporated by reference into this SAI from the Fund’s Annual Report to shareholders and have been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in its report, which is incorporated herein by reference, and have been so incorporated in reliance upon the report of such firm, given upon its authority as an expert in accounting and auditing.

 

Deloitte & Touche LLP, 200 Berkeley Street, Boston, MA 02116, serves as the independent registered public accounting firm for MFS Commodity Strategy Fund, MFS Global Alternative Strategy Fund, MFS Global Growth Fund, and MFS Inflation-Adjusted Bond Fund, providing audit and related services, and assistance in connection with various SEC filings.

 

Each such Fund’s Financial Statements and Financial Highlights for the fiscal year ended October 31, 2022, are incorporated by reference into this SAI from the Fund’s Annual Report to shareholders and have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in its report, which is incorporated herein by reference, and have been so incorporated in reliance upon the report of such firm, given upon its authority as an expert in accounting and auditing. MFS Commodity Strategy Fund’s Financial Statements and Financial Highlights for the fiscal year ended October 31, 2022, are presented on a consolidated basis for the Fund and its subsidiary.

 

The Fund’s Financial Statements and Financial Highlights and the report of the independent registered public accounting firm are located in the Fund’s Annual Report to shareholders, which is set forth in Item 1 of the Fund’s Form N-CSR available at the hyperlink noted below for the relevant Trust.

 

MFS Series Trust VI (MFS Global Equity Fund, MFS Global Total Return Fund, MFS Utilities Fund)

MFS Series Trust VIII (MFS Global Growth Fund, MFS Income Fund)

MFS Series Trust IX (MFS Inflation-Adjusted Bond Fund)

MFS Series Trust X (MFS Emerging Markets Debt Local Currency Fund)

MFS Series Trust XV (MFS Commodity Strategy Fund, MFS Global Alternative Strategy Fund)

 

20

 

 

APPENDIX A - TRUSTEES AND OFFICERS – IDENTIFICATION AND BACKGROUND

 

The Trustees and Officers of the Trust, as of February 1, 2023, are listed below, together with their principal occupations during the past five years (their titles may have varied during that period). The address of each Trustee and Officer is 111 Huntington Avenue, Boston, Massachusetts 02199.

 

TRUSTEES
 
Name, Age  

Position(s)

Held with

Fund

 

Trustee

Since(1)

 

Number of MFS

Funds Overseen

by the Trustee

 

Principal Occupations

During the Past

Five Years

 

Other Directorships

During the Past

Five Years(2)

                     
INTERESTED TRUSTEE

Michael W. Roberge(3)

age 56

  Trustee   January 2021   136   Massachusetts Financial Services Company, Chairman (since January 2021); Chief Executive Officer (since January 2017); Director; Chairman of the Board (since January 2022); President (until December 2018); Chief Investment Officer (until December 2018)    
INDEPENDENT TRUSTEES
John P. Kavanaugh
age 68
  Trustee and Chair of Trustees   January 2009   136   Private investor    
Steven E. Buller
age 71
  Trustee   February 2014   136   Private investor    
John A. Caroselli
age 68
  Trustee   March 2017   136   Private investor; JC Global Advisors, LLC (management consulting), President (since 2015)    
Maureen R. Goldfarb
age 67
  Trustee   January 2009   136   Private investor    
Peter D. Jones
age 67
  Trustee   January 2019   136   Private investor    
James W. Kilman, Jr.
age 61
  Trustee   January 2019   136   Burford Capital Limited (finance and investment management), Senior Advisor (since May 3, 2021), Chief Financial Officer (2019 – May 2, 2021); KielStrand Capital LLC (family office), Chief Executive Officer (since 2016)   alpha-En Corporation, Director (2016 - 2019)
Clarence Otis, Jr.
age 66
  Trustee   March 2017   136   Private investor   VF Corporation, Director; Verizon Communications, Inc., Director; The Travelers Companies, Director

 

A - 1

 

 

Name, Age  

Position(s)

Held with

Fund

 

Trustee

Since(1)

 

Number of MFS

Funds Overseen

by the Trustee

 

Principal Occupations

During the Past

Five Years

 

Other Directorships

During the Past

Five Years(2)

Maryanne L. Roepke
age 66
  Trustee   May 2014   136   Private investor    
Laurie J. Thomsen
age 65
  Trustee   March 2005   136   Private investor   The Travelers Companies, Director; Dycom Industries, Inc., Director
                     
OFFICERS
 
Name, Age  

Position(s)

Held with

Fund

  Officer Since(1)   Number of MFS
Funds for which the
Person is an
Officer
 

Principal Occupations

During the Past

Five Years

 

Other Directorships

During the Past

Five Years(2)

Christopher R. Bohane(3)

age 49

  Assistant Secretary and Assistant Clerk   July 2005   136   Massachusetts Financial Services Company, Senior Vice President and Senior Managing Counsel    

Kino P. Clark(3)

age 54

  Assistant Treasurer   January 2012   136   Massachusetts Financial Services Company, Vice President    

John W. Clark, Jr.(3)

age 55

  Assistant Treasurer   April 2017   136   Massachusetts Financial Services Company, Vice President    

David L. DiLorenzo(3)

age 54

  President   July 2005   136   Massachusetts Financial Services Company, Senior Vice President    

Heidi W. Hardin(3)

age 55

  Secretary and Clerk   April 2017   136   Massachusetts Financial Services Company, Executive Vice President and General Counsel    

Brian E. Langenfeld(3)

age 49

  Assistant Secretary and Assistant Clerk   June 2006   136   Massachusetts Financial Services Company, Vice President and Managing Counsel    

 

A - 2

 

 

Name, Age  

Position(s)

Held with

Fund

  Officer Since(1)   Number of MFS
Funds for which
the Person is an
Officer
 

Principal Occupations

During the Past

Five Years

 

Other Directorships

During the Past

Five Years(2)

Rosa E. Licea-Mailloux(3)

age 46

  Chief Compliance Officer   March 2022   136   Massachusetts Financial Services Company, Vice President (since 2018); Director of Corporate Compliance (2018-2021); Senior Director Compliance (2021-2022); Senior Managing Director of North American Compliance & Chief Compliance Officer (since March 2022); Natixis Investment Managers (investment management), Funds Chief Compliance Officer, Deputy General Counsel & Senior Vice President (until 2018)    

Amanda S. Mooradian(3)

age 43

  Assistant Secretary and Assistant Clerk   September 2018   136   Massachusetts Financial Services Company, Assistant Vice President and Senior Counsel    

Susan A. Pereira(3)

age 52

  Assistant Secretary and Assistant Clerk   July 2005   136   Massachusetts Financial Services Company, Vice President and Managing Counsel    

Kasey L. Phillips(3)

age 52

  Assistant Treasurer   September 2012   136   Massachusetts Financial Services Company, Vice President    

Matthew A. Stowe(3)

age 48

  Assistant Secretary and Assistant Clerk   October 2014   136   Massachusetts Financial Services Company, Senior Vice President and Senior Managing Counsel    

William B. Wilson(3)

age 40

  Assistant Secretary   October 2022   136   Massachusetts Financial Services Company, Assistant Vice President and Counsel    

James O. Yost(3)

age 62

  Treasurer   September 1990   136   Massachusetts Financial Services Company, Senior Vice President    

 

 

(1)  Date first appointed to serve as Trustee/Officer of an MFS Fund. Each Trustee has served continuously since appointment unless indicated otherwise. From January 2012 through December 2016, Messrs. DiLorenzo and Yost served as Treasurer and Deputy Treasurer of the Funds, respectively.

(2)  Directorships or trusteeships of companies required to report to the SEC (i.e., “public companies”).

(3) “Interested person” of the Trust within the meaning of the Investment Company Act of 1940 (referred to as the 1940 Act), which is the principal federal law governing investment companies like the Fund, as a result of position with MFS. The address of MFS is 111 Huntington Avenue, Boston, Massachusetts 02199.

 

Each Trustee (other than Messrs. Jones, Kilman, and Roberge) has been elected by shareholders and each Trustee and Officer holds office until his or her successor is chosen and qualified or until his or her earlier death, resignation, retirement or removal. Mr. Roberge became a Trustee of the Fund on January 1, 2021, and Messrs. Jones and Kilman became Trustees of the Fund on January 1, 2019. The Trust does not hold annual meetings for the purpose of electing Trustees, and Trustees are not elected for fixed terms. Under the terms of the Board’s retirement policy, an Independent Trustee shall retire at the end of the calendar year in which he or she reaches the earlier of 75 years of age or 15 years of service on the Board (or, in the case of any Independent Trustee who joined the Board prior to 2015, 20 years of service on the Board).

 

The Interested Trustee and certain Officers hold comparable officer positions with certain affiliates of MFS.

 

A - 3

 

 

The following provides an overview of the considerations that led the Board to conclude that each individual serving as a Trustee of the Trust should so serve. The current members of the Board have joined the Board at different points in time since 2005. Generally, no one factor was decisive in the original selection of an individual to join the Board. Among the factors the Board considered when concluding that an individual should serve on the Board were the following: (i) the individual’s business and professional experience and accomplishments; (ii) the individual’s ability to work effectively with the other members of the Board; (iii) the individual’s prior experience, if any, serving on the boards of public companies (including, where relevant, other investment companies) and other complex enterprises and organizations; and (iv) how the individual’s skills, experience and attributes would contribute to an appropriate mix of relevant skills and experience on the Board.

 

In respect of each current Trustee, the individual’s substantial professional accomplishments and prior experience, including, in some cases, in fields related to the operations of the Fund, were a significant factor in the determination that the individual should serve as a Trustee of the Trusts. Following is a summary of each Trustee’s professional experience and additional considerations that contributed to the Board’s conclusion that an individual should serve on the Board:

 

Interested Trustee:

 

Michael W. Roberge

 

Mr. Roberge is Chairman and Chief Executive Officer of MFS (the MFS Funds’ investment adviser) and is a member of the firm’s Management Committee and Chairman of the MFS Board of Directors. As Chief Executive Officer, Mr. Roberge sets the strategic priorities for MFS, leading a team responsible for the investment, distribution, finance, human resources, legal and technology functions at the firm. He has substantial executive and investment management experience, having worked for MFS for over 25 years.

 

Independent Trustees:

 

Steven E. Buller, CPA

 

Mr. Buller has substantial accounting, investment management, and executive experience at firms within the investment management industry. Mr. Buller was the Chief Financial Officer and Managing Director of BlackRock, Inc. (“BlackRock”), where he oversaw BlackRock’s tax department, internal audit and control functions, and the global corporate and investment company accounting policy. Prior to joining BlackRock, Mr. Buller was an auditor at Ernst & Young LLP for over 30 years, where he served as Global Director of Asset Management and as the audit partner for various investment company complexes. Mr. Buller was chairman of the Financial Accounting Standards Advisory Council, and was a member of the Standing Advisory Group of the Public Company Accounting Oversight Board (the PCAOB). He has also served on the boards of BlackRock Finco UK, a privately-held company, and Person-to-Person, a community service organization.

 

John A. Caroselli

 

Mr. Caroselli has substantial senior executive experience in the financial services industry. Mr. Caroselli is the president of JC Global Advisors, LLC, where he provides consulting services with specialization in strategy development and execution, merger integration, market growth plan design and organizational development. He served as Executive Vice President and Chief Development Officer of First Capital Corporation, Executive Vice President and Chief Strategy Officer of KeySpan Corporation, and Executive Vice President of Corporate Development of AXA Financial. Mr. Caroselli also held senior officer positions with Chase Manhattan Corporation, Chemical Bank, and Manufacturers Hanover Trust.

 

Maureen R. Goldfarb

 

Ms. Goldfarb has substantial executive and board experience at firms within the investment management industry. She was the Chief Executive Officer and Chairman of the Board of Trustees of the John Hancock Funds and an Executive Vice President of John Hancock Financial Services, Inc. Prior to joining John Hancock, Ms. Goldfarb was a Senior Vice President with Massachusetts Mutual Life Insurance Company. She also held various marketing, distribution, and portfolio management positions with other investment management firms. Ms. Goldfarb is a former member of the Board of Governors of the Investment Company Institute.

 

Peter D. Jones

 

Mr. Jones has substantial senior executive, accounting and investment management experience at firms within the investment management industry. Mr. Jones was the Chairman of Franklin Templeton Institutional, LLC and President of Franklin Templeton Distributors Inc. Mr. Jones formerly was the President of IDEX Distributors, Inc., which oversaw the formation and launch of IDEX Mutual Funds (now part of Transamerica Funds). Mr. Jones is a member of the Investment Advisory Council of the Florida State Board of Administration. Mr. Jones was formerly a CPA and served as Tax Manager at PricewaterhouseCoopers in Tampa, Florida and Atlanta, Georgia. Mr. Jones is a member of the Governing Council of the Independent Directors Council, a unit of the Investment Company Institute which serves the mutual fund director community. Mr. Jones is also a member of the Investment Committee and a former trustee of the Florida State University Foundation.

 

John P. Kavanaugh

 

Mr. Kavanaugh has substantial executive, investment management, and board experience at firms within the investment management and mutual fund industry and is a Chartered Financial Analyst. He was the Chief Investment Officer of The Hanover Insurance Group, Inc., and the President and Chairman of Opus Investment Management, Inc., an investment adviser. Mr. Kavanaugh held research and portfolio management positions with Allmerica Financial and PruCapital, Inc. He previously served on the board of the Independent Directors Council, a unit of the Investment Company Institute which serves the mutual fund independent director community.

 

James W. Kilman, Jr.

 

Mr. Kilman has substantial senior executive and investment banking management experience at firms within the investment management industry. Mr. Kilman is currently a Senior Advisor to Burford Capital Limited, a global finance and investment

 

A - 4

 

 

management firm focusing on the law, and the Chief Executive Officer of KielStrand Capital LLC, a family office merchant bank that makes and manages investments and oversees philanthropic activities. Previously, Mr. Kilman served as the Chief Financial Officer of Burford Capital Limited. Mr. Kilman formerly was the Vice Chairman, Co-Head of Diversified Financials Coverage in the Financial Institutions Banking Group at Morgan Stanley & Co. Prior to joining Morgan Stanley, Mr. Kilman was Managing Director in the Advisory Group within the Fixed Income Division’s Mortgage Department at Goldman Sachs & Co. Mr. Kilman also held managerial and investment positions with ABN AMRO Inc. and PaineWebber Inc.

 

Clarence Otis, Jr.

 

Mr. Otis has substantial executive, financial, and board experience at publicly-traded and privately-held companies. Mr. Otis was the Chairman and Chief Executive Officer of Darden Restaurants, Inc., the world’s largest full-service restaurant company, and where he previously served in other senior positions at Darden Restaurants, including Chief Financial Officer and Executive Vice President. Mr. Otis is a director of VF Corporation, Verizon Communications, Inc., and The Travelers Companies. He is a former director of the Federal Reserve Bank of Atlanta.

 

Maryanne L. Roepke

 

Ms. Roepke has substantial executive and compliance experience within the investment management industry.  She was a Senior Vice President and the Chief Compliance Officer of American Century Investments, Inc., where she worked for over 30 years. Ms. Roepke served on the board of the American Century SICAV, a mutual fund complex. She is a former member of the Investment Company Institute’s Chief Compliance Officer Committee and Risk Management Advisory Committee.

 

Laurie J. Thomsen

 

Ms. Thomsen has substantial venture capital financing experience, as well as board experience at publicly-traded and privately-held companies. Ms. Thomsen was a co-founding General Partner of Prism Venture Partners, a venture capital firm investing in healthcare and technology companies, and served as an Executive Partner of New Profit, Inc., a venture philanthropy firm. Prior to that, she was a General Partner at Harbourvest Partners, a venture capital firm. Ms. Thomsen is a director of The Travelers Companies, Inc. and Dycom Industries, Inc.

 

A - 5

 

 

APPENDIX B - TRUSTEE COMPENSATION AND COMMITTEES

 

The Fund pays the Independent Trustees an annual fee plus a fee for each meeting attended. In addition, the Independent Trustees are reimbursed for their out-of-pocket expenses.

 

Trustee Compensation Table

 

    Name and Position  
    Interested Trustees   Independent Trustees  
Aggregate Compensation Paid by
Fund
  Robert J.
Manning1
  Michael W.
Roberge
  Steven E.
Buller
    John A.
Caroselli
    Maureen R.
Goldfarb
    Peter D.
Jones
    John P.
Kavanaugh
    James W.
Kilman Jr.
    Clarence
Otis Jr.
    Maryanne L.
Roepke
    Laurie J.
Thomsen
 
MFS Commodity Strategy Fund2   Not Applicable   Not Applicable   $ 1,655     $ 1,633     $ 1,633     $ 1,599     $ 1,858     $ 1,599     $ 1,599     $ 1,633     $ 1,633  
MFS Emerging Markets Debt Local Currency Fund2   Not Applicable   Not Applicable   $ 931     $ 921     $ 921     $ 905     $ 1,023     $ 905     $ 905     $ 921     $ 921  
MFS Global Alternative Strategy Fund2   Not Applicable   Not Applicable   $ 519     $ 516     $ 516     $ 511     $ 549     $ 511     $ 511     $ 516     $ 516  
MFS Global Equity Fund2   Not Applicable   Not Applicable   $ 4,893     $ 4,817     $ 4,817     $ 4,699     $ 5,589     $ 4,699     $ 4,699     $ 4,817     $ 4,817  
MFS Global Growth Fund2   Not Applicable   Not Applicable   $ 1,393     $ 1,375     $ 1,375     $ 1,348     $ 1,556     $ 1,348     $ 1,348     $ 1,375     $ 1,375  
MFS Global Total Return Fund2   Not Applicable   Not Applicable   $ 2,720     $ 2,680     $ 2,680     $ 2,618     $ 3,085     $ 2,618     $ 2,618     $ 2,680     $ 2,680  
MFS Income Fund2   Not Applicable   Not Applicable   $ 1,713     $ 1,690     $ 1,690     $ 1,654     $ 1,924     $ 1,654     $ 1,654     $ 1,690     $ 1,690  
MFS Inflation-Adjusted Bond Fund2   Not Applicable   Not Applicable   $ 2,925     $ 2,882     $ 2,882     $ 2,814     $ 3,321     $ 2,814     $ 2,814     $ 2,882     $ 2,882  
MFS Utilities Fund2   Not Applicable   Not Applicable   $ 5,367     $ 5,283     $ 5,283     $ 5,153     $ 6,134     $ 5,153     $ 5,153     $ 5,283     $ 5,283  
Retirement Benefits Accrued as Part of Fund Expense2   Not Applicable   Not Applicable     Not Applicable       Not Applicable       Not Applicable       Not Applicable       Not Applicable       Not Applicable       Not Applicable       Not Applicable       Not Applicable  
Total Trustee Compensation Paid by Fund and Fund Complex3   Not Applicable   Not Applicable   $ 436,500     $ 430,000     $ 430,000     $ 420,000     $ 495,500     $ 424,000     $ 424,000     $ 434,000     $ 430,000  

 

 

1 Mr. Manning retired as Trustee of the Fund on December 31, 2021.

2 For the fiscal year ended October 31, 2022.

3 For the calendar year 2022 for 135 funds that paid Trustee compensation.

 

B - 1

 

 

Committees

 

As of February 1, 2023, the Board has established the following Committees:

 

Name of Committee  

Number of Meetings

in Last Fiscal Year1

  Functions   Current Members
AUDIT COMMITTEE   9   Oversees the accounting and auditing procedures of the Fund and, among other duties, considers the selection of the independent accountants for the Fund and the scope of the audit, and considers the effect on the independence of those accountants of any non-audit services such accountants provide to the Fund and any audit or non-audit services such accountants provide to other MFS Funds, MFS and/or certain affiliates. The Committee is also responsible for establishing procedures for the receipt, retention, and treatment of complaints received by the Fund regarding accounting, internal accounting controls, or auditing matters and the confidential, anonymous submission of concerns regarding questionable fund accounting matters by officers of the Fund and employees of the Fund’s investment adviser, administrator, principal underwriter, or any other provider of accounting-related services to the Fund. Reviews and evaluates the contractual arrangements of the Fund relating to custody and fund accounting services, and makes recommendations to the full Board on these matters.   Buller*, Kilman, Jr.*, Otis, Jr.*, and Roepke*
COMPLIANCE COMMITTEE   4   Oversees the development and implementation of the Fund’s regulatory and fiduciary compliance policies, procedures, and practices under the 1940 Act, and other applicable laws, as well as oversight of compliance policies of the Fund’s investment adviser and certain other service providers as they relate to Fund activities. The Fund’s Chief Compliance Officer assists the Committee in carrying out its responsibilities.   Goldfarb*, Jones*, Otis, Jr.*,  and Roepke*
CONTRACTS REVIEW COMMITTEE   6   Requests, reviews, and considers the information deemed reasonably necessary to evaluate the terms of the investment advisory and principal underwriting agreements and the Plan of Distribution under Rule 12b-1 that each Fund proposes to renew or continue, and to make its recommendations to the full Board on these matters.   All Independent Trustees of the Board (Buller, Caroselli, Goldfarb, Jones, Kavanaugh, Kilman, Jr., Otis, Jr., Roepke, and Thomsen)
NOMINATION AND COMPENSATION COMMITTEE   2   Recommends qualified candidates to the Board in the event that a position is vacated or created. The Committee will consider recommendations by shareholders when a vacancy exists. Shareholders wishing to recommend candidates for Trustee for consideration by the Committee may do so by writing to the Fund’s Secretary at the principal executive office of the Fund. Such recommendations must be accompanied by biographical and occupational data on the candidate (including whether the candidate would be an “interested person” of the Fund), a written consent by the candidate to be named as a nominee and to serve as Trustee if elected, record and ownership information for the recommending shareholder with respect to the Fund, and a description of any arrangements or understandings regarding recommendation of the candidate for consideration. The Committee is also responsible for making recommendations to the Board regarding any necessary standards or qualifications for service on the Board. The Committee also reviews and makes recommendations to the Board regarding compensation for the Independent Trustees.   All Independent Trustees of the Board (Buller, Caroselli, Goldfarb, Jones, Kavanaugh, Kilman, Jr., Otis, Jr., Roepke, and Thomsen)

 

B - 2

 

 

Name of Committee  

Number of Meetings

in Last Fiscal Year1

  Functions   Current Members
PORTFOLIO TRADING AND MARKETING REVIEW COMMITTEE   4   Oversees the policies, procedures, and practices of the Fund with respect to brokerage transactions involving portfolio securities as those policies, procedures, and practices are carried out by MFS and its affiliates. The Committee also oversees the lending of portfolio securities, the Trust’s borrowing and lending policies, and the administration of the Fund’s proxy voting policies and procedures by MFS. The Committee also oversees the policies, procedures, and practices of the Applicable Fund Service Providers with respect to the selection and oversight of the Fund’s counterparties in derivatives, repurchase and reverse repurchase agreements, and similar investment-related transactions. In addition, the Committee receives reports from MFS regarding the policies, procedures, and practices of MFS and its affiliates in connection with their marketing and distribution of shares of the Fund.   All Independent Trustees of the Board (Buller, Caroselli, Goldfarb, Jones, Kavanaugh, Kilman, Jr., Otis, Jr., Roepke, and Thomsen)
PRICING COMMITTEE   4   Oversees the determination of the value of the portfolio securities and other assets held by the Fund. The Committee delegates primary responsibility for carrying out these functions to MFS pursuant to the Fund’s valuation policy and procedures approved by the Committee and adopted by the Board of Trustees.  The Committee has designated MFS as the Fund’s “valuation designee” whereby MFS is responsible for determining the fair values of portfolio securities and other assets held by the Fund for which market quotations are not readily available pursuant to MFS’ fair valuation policy and procedures. MFS’ fair valuation policy and procedures includes, among other things, methodologies and processes to be followed by MFS in determining the fair value of portfolio securities and other assets held by the Fund for which market quotations are not readily available. The Committee meets periodically with the members of MFS’ internal valuation committee to review and assess MFS’ fair valuation process and other pricing determinations made pursuant to the Fund’s valuation policy and procedures and MFS’ fair valuation policy and procedures, and to review the policies and procedures themselves. The Committee also exercises the responsibilities of the Board under the Policy for Compliance with Rule 2a-7 approved by the Board on behalf of each Fund which holds itself out as a “money market fund” in accordance with Rule 2a-7 under the 1940 Act.   Buller*, Caroselli*, Kilman, Jr.*, and Thomsen*
SERVICES CONTRACTS COMMITTEE   4   Reviews and evaluates the contractual arrangements of the Fund relating to transfer agency, sub-transfer agency, and administrative services, and makes recommendations to the full Board on these matters.   Caroselli*, Goldfarb*, Jones*, and Thomsen*

 

 

1 For the fiscal year ended October 31, 2022.

* Independent Trustees. Although Mr. Kavanaugh is not a member of all Committees of the Board, he is invited to and attends many of the Committees’ meetings in his capacity as Chair of the Board.

 

B - 3

 

 

APPENDIX C - SHARE OWNERSHIP

 

Ownership By Trustees and Officers

 

As of February 1, 2023, the Trustees and Officers of the Trust as a group owned of record less than 1% of any class of the Fund’s shares. The Board has adopted a policy requiring that each Independent Trustee shall have invested on an aggregate basis, within two years of membership on the Board, an amount equal to his or her prior calendar year’s base retainer and meeting attendance fees in shares of the MFS Funds.

 

The following table shows the dollar range of equity securities beneficially owned by each current Trustee in the Fund and, on an aggregate basis, in the MFS Funds, as of December 31, 2022.

 

The following dollar ranges apply:

 

N. None

A. $1 – $10,000 

B. $10,001 – $50,000 

C. $50,001 – $100,000 

D. Over $100,000

 

Name and Position   Dollar Range of Equity
Securities in MFS Commodity
Strategy Fund
  Dollar Range of Equity
Securities in MFS
Emerging Markets Debt
Local Currency Fund
  Dollar Range of Equity
Securities in MFS Global
Alternative Strategy Fund
  Dollar Range of Equity
Securities in MFS Global
Equity Fund
Interested Trustee                
Michael W. Roberge   N   N   N   N
                 
Independent Trustees                
Steven E. Buller   N   N   N   N
John A. Caroselli   N   N   N   N
Maureen R. Goldfarb   N   N   N   N
Peter D. Jones   N   N   N   N
John P. Kavanaugh   N   N   N   N
James W. Kilman, Jr.   B   B   N   N
Clarence Otis, Jr.   N   N   N   D
Maryanne L. Roepke   N   N   N   N
Laurie J. Thomsen   N   N   N   C

 

C - 1

 

 

Name and Position   Dollar Range of Equity
Securities in MFS Global
Growth Fund
  Dollar Range of Equity
Securities in MFS Global
Total Return Fund
 

Dollar Range of Equity
Securities in MFS Income
Fund

  Dollar Range of Equity
Securities in MFS
Inflation-Adjusted Bond
Fund
Interested Trustee                
Michael W. Roberge   A   A   N   N
                 
Independent Trustees                
Steven E. Buller   N   N   N   N
John A. Caroselli   N   N   N   N
Maureen R. Goldfarb   N   N   N   N
Peter D. Jones   D   N   C   N
John P. Kavanaugh   N   N   N   N
James W. Kilman, Jr.   N   N   N   N
Clarence Otis, Jr.   N   N   N   N
Maryanne L. Roepke   N   N   N   N
Laurie J. Thomsen   N   N   N   N

 

Name and Position   Dollar Range of Equity Securities in MFS Utilities
Fund
  Aggregate Dollar Range of Equity
Securities in All MFS Funds Overseen by
Trustee
Interested Trustee        
Michael W. Roberge   N   D
         
Independent Trustees        
Steven E. Buller   N   D
John A. Caroselli   N   D
Maureen R. Goldfarb   N   D
Peter D. Jones   N   D
John P. Kavanaugh   N   D
James W. Kilman, Jr.   N   D
Clarence Otis, Jr.   N   D
Maryanne L. Roepke   N   D
Laurie J. Thomsen   N   D

 

25% or Greater Ownership of the Fund

 

The following table identifies those investors who own 25% or more of the Fund’s voting shares as of February 1, 2023. Shareholders who own 25% or more of the Fund’s shares may have a significant impact on any shareholder vote of the Fund.

 

FUND NAME   PERCENTAGE
FUND
OWNERSHIP
  NAME and ADDRESS of INVESTOR
MFS COMMODITY STRATEGY FUND   29.16   MFS GROWTH ALLOCATION FUND1   200 NEWPORT AVENUE EXT   NORTH QUINCY MA  02171-2102

 

C - 2

 

 

FUND NAME   PERCENTAGE
FUND
OWNERSHIP
  NAME and ADDRESS of INVESTOR
MFS EMERGING MARKETS DEBT LOCAL CURRENCY FUND   27.40   MFS MODERATE ALLOCATION FUND1   200 NEWPORT AVENUE EXT   NORTH QUINCY MA  02171-2102
    25.84   MFS GROWTH ALLOCATION FUND1   200 NEWPORT AVENUE EXT   NORTH QUINCY MA  02171-2102
               
MFS GLOBAL ALTERNATIVE STRATEGY FUND   None   None        
                 
MFS GLOBAL EQUITY FUND   None   None        
                 
MFS GLOBAL GROWTH FUND   None   None        
                 
MFS GLOBAL TOTAL RETURN FUND   None   None        
                 
MFS INCOME FUND   None   None        
               
MFS INFLATION- ADJUSTED BOND FUND   28.69   MFS MODERATE ALLOCATION FUND1   200 NEWPORT AVENUE EXT   NORTH QUINCY MA  02171-2102
    25.00   MFS CONSERVATIVE ALLOCATION FUND1   200 NEWPORT AVENUE EXT   NORTH QUINCY MA  02171-2102
                 
MFS UTILITIES FUND   None   None        

 

 

1 The MFS Funds listed above will generally vote these shares in the same proportion as other shareholders. If there are no other shareholders of the Fund, the MFS Funds will vote in what MFS believes to be the MFS Fund’s best long-term economic interest.

 

C - 3

 

 

5% or Greater Ownership of Share Class

 

The following table identifies those investors who own of record or are known by a Fund to own beneficially 5% or more of any class of a Fund’s outstanding shares as of February 1, 2023.

 

FUND and CLASS NAME   PERCENTAGE
CLASS
OWNERSHIP
  NAME and ADDRESS of INVESTOR
         

MFS COMMODITY STRATEGY FUND

   
CLASS A   34.37   PERSHING LLC 1 PERSHING PLZ JERSEY CITY NJ 07399-0002
    17.87   LPL FINANCIAL 4707 EXECUTIVE DR SAN DIEGO CA 92121-3091
    10.65   EDWARD D JONES & CO 12555 MANCHESTER RD SAINT LOUIS MO 63131-3710
    10.31   NATIONAL FINANCIAL SERVICES LLC 499 WASHINGTON BLVD JERSEY CITY NJ 07310-1995
    18.13   MFS HERITAGE TRUST COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632
         

MFS COMMODITY STRATEGY FUND

   
CLASS B   58.74   MASSACHUSETTS FINANCIAL SERVICES COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632
    14.11   LAURA RINI RAINES 5591 BELLAIRE DR NEW ORLEANS LA 70124-1001
    7.19   STEVEN DALE CASSENS PO BOX 593 FORT PIERCE FL 34954-0593
    5.23   DEBORAH KELLY 9302 W LAW RD NORTH EAST PA 16428-3736
    41.26   MFS HERITAGE TRUST COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632
         

MFS COMMODITY STRATEGY FUND

CLASS C   79.21   PERSHING LLC 1 PERSHING PLZ JERSEY CITY NJ 07399-0002
    11.95   MFS HERITAGE TRUST COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632
         

MFS COMMODITY STRATEGY FUND

CLASS I   61.36   MAC & CO 500 GRANT ST RM 151-1010 PITTSBURGH PA 15219-2502
    27.15   LPL FINANCIAL 4707 EXECUTIVE DR SAN DIEGO CA 92121-3091
    8.27   PERSHING LLC 1 PERSHING PLZ JERSEY CITY NJ 07399-0002
         

MFS COMMODITY STRATEGY FUND

CLASS R1   100.00   MASSACHUSETTS FINANCIAL SERVICES COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632
         

MFS COMMODITY STRATEGY FUND

CLASS R2   62.91   CHARLES SCHWAB & CO INC 211 MAIN ST SAN FRANCISCO CA 94105-1901
    34.60   MASSACHUSETTS FINANCIAL SERVICES COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632
         
MFS COMMODITY STRATEGY FUND    
CLASS R3   100.00   MASSACHUSETTS FINANCIAL SERVICES COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632

 

C - 4

 

 

FUND and CLASS NAME   PERCENTAGE
CLASS
OWNERSHIP
  NAME and ADDRESS of INVESTOR
         
MFS COMMODITY STRATEGY FUND
CLASS R4   100.00   MASSACHUSETTS FINANCIAL SERVICES COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632
         
MFS COMMODITY STRATEGY FUND
CLASS R6   81.00   STATE STREET BANK1 200 NEWPORT AVENUE EXT NORTH QUINCY MA 02171-2102
    30.56   MFS GROWTH ALLOCATION FUND 200 NEWPORT AVENUE EXT NORTH QUINCY MA 02171-2102
    24.68   MFS MODERATE ALLOCATION FUND 200 NEWPORT AVENUE EXT NORTH QUINCY MA 02171-2102
    15.66   MFS AGGRESSIVE GROWTH ALLOCATION FUND 200 NEWPORT AVENUE EXT NORTH QUINCY MA 02171-2102
    10.10   MFS CONSERVATIVE ALLOCATION FUND 200 NEWPORT AVENUE EXT NORTH QUINCY MA 02171-2102
         
MFS EMERGING MARKETS DEBT LOCAL CURRENCY FUND
CLASS A   57.76   PERSHING LLC 1 PERSHING PLZ JERSEY CITY NJ 07399-0002
    16.78   EDWARD D JONES & CO 12555 MANCHESTER RD SAINT LOUIS MO 63131-3710
    6.12   CHARLES SCHWAB & CO INC 211 MAIN ST SAN FRANCISCO CA 94105-1901
    8.20   MFS HERITAGE TRUST COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632
         
MFS EMERGING MARKETS DEBT LOCAL CURRENCY FUND
CLASS B   59.95   MASSACHUSETTS FINANCIAL SERVICES COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632
    23.91   MERRILL LYNCH PIERCE FENNER & SMITH INC 4800 DEER LAKE DR E JACKSONVILLE FL 32246-6484
    8.21   SUSAN R ENRIGHT 1838 HIMROD RD PENN YAN NY 14527-8744
    7.75   PERSHING LLC 1 PERSHING PLZ JERSEY CITY NJ 07399-0002
    8.39   MFS HERITAGE TRUST COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632
         
MFS EMERGING MARKETS DEBT LOCAL CURRENCY FUND
CLASS C   73.12   PERSHING LLC 1 PERSHING PLZ JERSEY CITY NJ 07399-0002
    6.75   CAROLE DUVAL-BARRETT 277 HOSLEY AVE TUPPER LAKE NY 12986-1541
    6.48   LPL FINANCIAL 4707 EXECUTIVE DR SAN DIEGO CA 92121-3091
    6.46   MASSACHUSETTS FINANCIAL SERVICES COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632
    8.37   MFS HERITAGE TRUST COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632

 

C - 5

 

 

FUND and CLASS NAME   PERCENTAGE
CLASS
OWNERSHIP
  NAME and ADDRESS of INVESTOR
         
MFS EMERGING MARKETS DEBT LOCAL CURRENCY FUND
CLASS I   80.90   AMERICAN ENTERPRISE INVESTMENT 707 2ND AVE S MINNEAPOLIS MN 55402-2405
    8.25   NATIONAL FINANCIAL SERVICES LLC 499 WASHINGTON BLVD JERSEY CITY NJ 07310-1995
         
MFS EMERGING MARKETS DEBT LOCAL CURRENCY FUND
CLASS R1   100.00   MASSACHUSETTS FINANCIAL SERVICES COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632
         
MFS EMERGING MARKETS DEBT LOCAL CURRENCY FUND
CLASS R2   100.00   MASSACHUSETTS FINANCIAL SERVICES COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632
         
MFS EMERGING MARKETS DEBT LOCAL CURRENCY FUND
CLASS R3   63.01   PAI TRUST COMPANY INC 1300 ENTERPRISE DR DE PERE WI 54115-4934
    63.01   KCB INC DBA WARREN TIRE SERVICE1300 ENTERPRISE DR DE PERE WI 54115-4934
    36.34   MASSACHUSETTS FINANCIAL SERVICES COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632
         
MFS EMERGING MARKETS DEBT LOCAL CURRENCY FUND
CLASS R4   52.73   MID ATLANTIC TRUST COMPANY 1251 WATERFRONT PL STE 525 PITTSBURGH PA 15222-4228
    52.73   PERSHING LLC 1251 WATERFRONT PL STE 525 PITTSBURGH PA 15222-4228
    50.49   AIM FIDELIS 1251 WATERFRONT PL STE 525 PITTSBURGH PA 15222-4228
    47.27   MASSACHUSETTS FINANCIAL SERVICES COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632
         
MFS EMERGING MARKETS DEBT LOCAL CURRENCY FUND
CLASS R6   84.85   STATE STREET BANK1 200 NEWPORT AVENUE EXT NORTH QUINCY MA 02171-2102
    33.47   MFS MODERATE ALLOCATION FUND 200 NEWPORT AVENUE EXT NORTH QUINCY MA 02171-2102
    31.57   MFS GROWTH ALLOCATION FUND 200 NEWPORT AVENUE EXT NORTH QUINCY MA 02171-2102
    19.81   MFS CONSERVATIVE ALLOCATION FUND 200 NEWPORT AVENUE EXT NORTH QUINCY MA 02171-2102

 

C - 6

 

 

FUND and CLASS NAME   PERCENTAGE
CLASS
OWNERSHIP
  NAME and ADDRESS of INVESTOR
         
MFS GLOBAL ALTERNATIVE STRATEGY FUND
CLASS A   12.86   AMERICAN ENTERPRISE INVESTMENT 707 2ND AVE S MINNEAPOLIS MN 55402-2405
    11.75   NATIONAL FINANCIAL SERVICES LLC 499 WASHINGTON BLVD JERSEY CITY NJ 07310-1995
    11.32   MORGAN STANLEY SMITH BARNEY 1 NEW YORK PLAZA FL 12 NEW YORK NY 10004-1965
    10.30   LPL FINANCIAL 4707 EXECUTIVE DR SAN DIEGO CA 92121-3091
    8.78   MERRILL LYNCH PIERCE FENNER & SMITH INC 4800 DEER LAKE DR E JACKSONVILLE FL 32246-6484
    7.86   PERSHING LLC 1 PERSHING PLZ JERSEY CITY NJ 07399-0002
    6.38   CHARLES SCHWAB & CO INC 211 MAIN ST SAN FRANCISCO CA 94105-1901
    5.36   RAYMOND JAMES 880 CARILLON PKWY ST PETERSBURG FL 33716-1102
    5.31   WELLS FARGO CLEARING SERVICES LLC 2801 MARKET ST SAINT LOUIS MO 63103-2523
    9.17   MFS HERITAGE TRUST COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632
         
MFS GLOBAL ALTERNATIVE STRATEGY FUND
CLASS B   32.86   AMERICAN ENTERPRISE INVESTMENT 707 2ND AVE S MINNEAPOLIS MN 55402-2405
    24.33   MERRILL LYNCH PIERCE FENNER & SMITH INC 4800 DEER LAKE DR E JACKSONVILLE FL 32246-6484
    9.44   NATIONAL FINANCIAL SERVICES LLC 499 WASHINGTON BLVD JERSEY CITY NJ 07310-1995
    8.97   LPL FINANCIAL 4707 EXECUTIVE DR SAN DIEGO CA 92121-3091
    7.33   PERSHING LLC 1 PERSHING PLZ JERSEY CITY NJ 07399-0002
    6.22   MFS HERITAGE TRUST COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632
         
MFS GLOBAL ALTERNATIVE STRATEGY FUND
CLASS C   20.85   WELLS FARGO CLEARING SERVICES LLC 2801 MARKET ST SAINT LOUIS MO 63103-2523
    17.09   NATIONAL FINANCIAL SERVICES LLC 499 WASHINGTON BLVD JERSEY CITY NJ 07310-1995
    16.56   AMERICAN ENTERPRISE INVESTMENT 707 2ND AVE S MINNEAPOLIS MN 55402-2405
    6.21   MORGAN STANLEY SMITH BARNEY 1 NEW YORK PLAZA FL 12 NEW YORK NY 10004-1965
    6.05   RAYMOND JAMES 880 CARILLON PKWY ST PETERSBURG FL 33716-1102
    6.01   PERSHING LLC 1 PERSHING PLZ JERSEY CITY NJ 07399-0002
    5.64   CHARLES SCHWAB & CO INC 211 MAIN ST SAN FRANCISCO CA 94105-1901
    8.19   MFS HERITAGE TRUST COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632

 

C - 7

 

 

FUND and CLASS NAME   PERCENTAGE
CLASS
OWNERSHIP
  NAME and ADDRESS of INVESTOR
         
MFS GLOBAL ALTERNATIVE STRATEGY FUND
CLASS I   26.61   AMERICAN ENTERPRISE INVESTMENT 707 2ND AVE S MINNEAPOLIS MN 55402-2405
    16.06   NATIONAL FINANCIAL SERVICES LLC 499 WASHINGTON BLVD JERSEY CITY NJ 07310-1995
    12.68   LPL FINANCIAL 4707 EXECUTIVE DR SAN DIEGO CA 92121-3091
    8.08   RAYMOND JAMES 880 CARILLON PKWY ST PETERSBURG FL 33716-1102
    7.82   WELLS FARGO CLEARING SERVICES LLC 2801 MARKET ST SAINT LOUIS MO 63103-2523
    7.41   CHARLES SCHWAB & CO INC 211 MAIN ST SAN FRANCISCO CA 94105-1901
    6.43   MORGAN STANLEY SMITH BARNEY 1 NEW YORK PLAZA FL 12 NEW YORK NY 10004-1965
    6.16   PERSHING LLC 1 PERSHING PLZ JERSEY CITY NJ 07399-0002
         
MFS GLOBAL ALTERNATIVE STRATEGY FUND
CLASS R1   49.87   MATRIX TRUST COMPANY 717 17TH ST STE 1300 DENVER CO 80202-3304
    49.87   ADVISOR TRUST, INC. 717 17TH ST STE 1300 DENVER CO 80202-3304
    49.81   NORWALK PUBLIC SCHOOLS (CT) 717 17TH ST STE 1300 DENVER CO 80202-3304
    48.90   MASSACHUSETTS FINANCIAL SERVICES COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632
         
MFS GLOBAL ALTERNATIVE STRATEGY FUND
Class R2   86.44   WEST KNOX UTILITY DISTRICT PO BOX 1090 PARIS TN 38242-1090
    7.69   J LUKE A HOUSTON V ROGERS JR TTEE F REEVES HARDWARE COMPANY INC 8515 E ORCHARD RD 2T2 GREENWOOD VLG CO 80111-5002
         
MFS GLOBAL ALTERNATIVE STRATEGY FUND
CLASS R3   49.80   EMPOWER TRUST 8515 E ORCHARD RD 2T2 GREENWOOD VLG CO 80111-5002
    23.12   NATIONAL FINANCIAL SERVICES LLC 499 WASHINGTON BLVD JERSEY CITY NJ 07310-1995
    7.97   FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS CO INC 100 MAGELLAN WAY COVINGTON KY 41015-1999
    7.97   PROFEX, INC. 100 MAGELLAN WAY COVINGTON KY 41015-1999
    6.10   DCGT 711 HIGH ST DES MOINES IA 50392-0001
    5.55   MARY JANE PIONK TTEE LA JOLLA DEVELOPMENTAL PEDIATRICS 8611 KILBOURN DR LA JOLLA CA 92037-2231
         
MFS GLOBAL ALTERNATIVE STRATEGY FUND
CLASS R4    99.68   MASSACHUSETTS FINANCIAL SERVICES COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632

 

C - 8

 

 

FUND and CLASS NAME   PERCENTAGE
CLASS
OWNERSHIP
  NAME and ADDRESS of INVESTOR
         
MFS GLOBAL ALTERNATIVE STRATEGY FUND
CLASS R6   67.57   TRUKAN & CO PO BOX 3699 WICHITA KS 67201-3699
    12.22   NATIONAL FINANCIAL SERVICES LLC 499 WASHINGTON BLVD JERSEY CITY NJ 07310-1995
         
MFS GLOBAL EQUITY FUND
CLASS A    40.10   EDWARD D JONES & CO 12555 MANCHESTER RD SAINT LOUIS MO 63131-3710
    7.23   MERRILL LYNCH PIERCE FENNER & SMITH INC 4800 DEER LAKE DR E JACKSONVILLE FL 32246-6484
    5.82   NATIONAL FINANCIAL SERVICES LLC 499 WASHINGTON BLVD JERSEY CITY NJ 07310-1995
    10.61   MFS HERITAGE TRUST COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632
         
MFS GLOBAL EQUITY FUND
CLASS B    22.13   AMERICAN ENTERPRISE INVESTMENT 707 2ND AVE S MINNEAPOLIS MN 55402-2405
    18.01   NATIONAL FINANCIAL SERVICES LLC 499 WASHINGTON BLVD JERSEY CITY NJ 07310-1995
    16.64   PERSHING LLC 1 PERSHING PLZ JERSEY CITY NJ 07399-0002
    6.69   CHARLES SCHWAB & CO INC 211 MAIN ST SAN FRANCISCO CA 94105-1901
    5.40   LPL FINANCIAL 4707 EXECUTIVE DR SAN DIEGO CA 92121-3091
    18.99   MFS HERITAGE TRUST COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632

 

C - 9

 

 

FUND and CLASS NAME   PERCENTAGE
CLASS
OWNERSHIP
  NAME and ADDRESS of INVESTOR
         

MFS GLOBAL EQUITY FUND

CLASS C   23.31   AMERICAN ENTERPRISE INVESTMENT 707 2ND AVE S MINNEAPOLIS MN 55402-2405
    9.79   PERSHING LLC 1 PERSHING PLZ JERSEY CITY NJ 07399-0002
    8.29   NATIONAL FINANCIAL SERVICES LLC 499 WASHINGTON BLVD JERSEY CITY NJ 07310-1995
    7.84   RAYMOND JAMES 880 CARILLON PKWY ST PETERSBURG FL 33716-1102
    7.45   WELLS FARGO CLEARING SERVICES LLC 2801 MARKET ST SAINT LOUIS MO 63103-2523
    6.15   MORGAN STANLEY SMITH BARNEY 1 NEW YORK PLAZA FL 12 NEW YORK NY 10004-1965
    5.17   EDWARD D JONES & CO 12555 MANCHESTER RD SAINT LOUIS MO 63131-3710
    12.94   MFS HERITAGE TRUST COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632
         
MFS GLOBAL EQUITY FUND
CLASS I    22.32   AMERICAN ENTERPRISE INVESTMENT 707 2ND AVE S MINNEAPOLIS MN 55402-2405
    20.47   NATIONAL FINANCIAL SERVICES LLC 499 WASHINGTON BLVD JERSEY CITY NJ 07310-1995
    10.51   CHARLES SCHWAB & CO INC 211 MAIN ST SAN FRANCISCO CA 94105-1901
    6.97   PERSHING LLC 1 PERSHING PLZ JERSEY CITY NJ 07399-0002
    6.69   LPL FINANCIAL 4707 EXECUTIVE DR SAN DIEGO CA 92121-3091
    5.92   MERRILL LYNCH PIERCE FENNER & SMITH INC 4800 DEER LAKE DR E JACKSONVILLE FL 32246-6484
    5.88   MORGAN STANLEY SMITH BARNEY 1 NEW YORK PLAZA FL 12 NEW YORK NY 10004-1965
         
MFS GLOBAL EQUITY FUND
CLASS R1    79.09   EMPOWER TRUST 8515 E ORCHARD RD 2T2 GREENWOOD VLG CO 80111-5002
    6.56   MATRIX TRUST COMPANY 717 17TH ST STE 1300 DENVER CO 80202-3304
    6.56   ADVISOR TRUST, INC. 717 17TH ST STE 1300 DENVER CO 80202-3304
         
MFS GLOBAL EQUITY FUND
CLASS R2    28.41   VOYA RETIREMENT INS & ANNUITY CO 1 ORANGE WAY B3N WINDSOR CT 06095-4773
    19.26   DCGT 711 HIGH ST DES MOINES IA 50392-0001
    16.31   EMPOWER TRUST 8515 E ORCHARD RD 2T2 GREENWOOD VLG CO 80111-5002
         
MFS GLOBAL EQUITY FUND
CLASS R3    35.92   EMPOWER TRUST 8515 E ORCHARD RD 2T2 GREENWOOD VLG CO 80111-5002
    10.38   NATIONAL FINANCIAL SERVICES LLC 499 WASHINGTON BLVD JERSEY CITY NJ 07310-1995
    10.26   TIAA 211 N BROADWAY STE 1000 SAINT LOUIS MO 63102-2748
    10.20   DCGT 711 HIGH ST DES MOINES IA 50392-0001

 

C - 10

 

 

FUND and CLASS NAME   PERCENTAGE
CLASS
OWNERSHIP
  NAME and ADDRESS of INVESTOR
         
MFS GLOBAL EQUITY FUND
CLASS R4    45.55   NATIONAL FINANCIAL SERVICES LLC 499 WASHINGTON BLVD JERSEY CITY NJ 07310-1995
    14.10   TIAA  211 N BROADWAY STE 1000 SAINT LOUIS MO 63102-2748
    6.81   DCGT 711 HIGH ST DES MOINES IA 50392-0001
    6.78   FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS CO INC 100 MAGELLAN WAY COVINGTON KY 41015-1999
    5.28   EMPOWER TRUST 8515 E ORCHARD RD 2T2 GREENWOOD VLG CO 80111-5002
    5.16   NATIONWIDE TRUST COMPANY PO BOX 182029 COLUMBUS OH 43218-2029
         
MFS GLOBAL EQUITY FUND
CLASS R6    60.26   EDWARD D JONES & CO 12555 MANCHESTER RD SAINT LOUIS MO 63131-3710
    15.28   NATIONAL FINANCIAL SERVICES LLC 499 WASHINGTON BLVD JERSEY CITY NJ 07310-1995
         
MFS GLOBAL GROWTH FUND
CLASS A    36.12   EDWARD D JONES & CO 12555 MANCHESTER RD SAINT LOUIS MO 63131-3710
    5.15   MORGAN STANLEY SMITH BARNEY 1 NEW YORK PLAZA FL 12 NEW YORK NY 10004-1965
    15.57   MFS HERITAGE TRUST COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632
         
MFS GLOBAL GROWTH FUND
CLASS B    18.90   WELLS FARGO CLEARING SERVICES LLC 2801 MARKET ST SAINT LOUIS MO 63103-2523
    8.68   NATIONAL FINANCIAL SERVICES LLC 499 WASHINGTON BLVD JERSEY CITY NJ 07310-1995
    6.00   PERSHING LLC 1 PERSHING PLZ JERSEY CITY NJ 07399-0002
    5.96   AMERICAN ENTERPRISE INVESTMENT 707 2ND AVE S MINNEAPOLIS MN 55402-2405
    43.31   MFS HERITAGE TRUST COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632
         
MFS GLOBAL GROWTH FUND
CLASS C    20.15   CHARLES SCHWAB & CO INC 211 MAIN ST SAN FRANCISCO CA 94105-1901
    11.76   WELLS FARGO CLEARING SERVICES LLC 2801 MARKET ST SAINT LOUIS MO 63103-2523
    11.19   PERSHING LLC 1 PERSHING PLZ JERSEY CITY NJ 07399-0002
    7.98   AMERICAN ENTERPRISE INVESTMENT 707 2ND AVE S MINNEAPOLIS MN 55402-2405
    7.38   EDWARD D JONES & CO 12555 MANCHESTER RD SAINT LOUIS MO 63131-3710
    6.43   LPL FINANCIAL 4707 EXECUTIVE DR SAN DIEGO CA 92121-3091
    6.39   NATIONAL FINANCIAL SERVICES LLC 499 WASHINGTON BLVD JERSEY CITY NJ 07310-1995
    5.60   RAYMOND JAMES 880 CARILLON PKWY ST PETERSBURG FL 33716-1102
    12.33   MFS HERITAGE TRUST COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632

 

C - 11

 

 

FUND and CLASS NAME   PERCENTAGE
CLASS
OWNERSHIP
  NAME and ADDRESS of INVESTOR
         
MFS GLOBAL GROWTH FUND
CLASS I    18.22   NATIONAL FINANCIAL SERVICES LLC 499 WASHINGTON BLVD JERSEY CITY NJ 07310-1995
    14.40   PERSHING LLC 1 PERSHING PLZ JERSEY CITY NJ 07399-0002
    9.49   LPL FINANCIAL 4707 EXECUTIVE DR SAN DIEGO CA 92121-3091
    9.47   TD AMERITRADE INC PO BOX 2226 OMAHA NE 68103-2226
    7.74   AMERICAN ENTERPRISE INVESTMENT 707 2ND AVE S MINNEAPOLIS MN 55402-2405
    7.25   WELLS FARGO CLEARING SERVICES LLC 2801 MARKET ST SAINT LOUIS MO 63103-2523
    6.48   CHARLES SCHWAB & CO INC 211 MAIN ST SAN FRANCISCO CA 94105-1901
    5.70   MFS HERITAGE TRUST COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632
         
MFS GLOBAL GROWTH FUND
CLASS R1    49.29   MATRIX TRUST COMPANY 717 17TH ST STE 1300 DENVER CO 80202-3304
    49.29   ADVISOR TRUST, INC. 717 17TH ST STE 1300 DENVER CO 80202-3304
    28.70   INDIAN PRAIRIE SD #204 717 17TH ST STE 1300 DENVER CO 80202-3304
    9.52   CUSD#200 (IL) 717 17TH ST STE 1300 DENVER CO 80202-3304
    18.95   MID ATLANTIC TRUST COMPANY 1251 WATERFRONT PL STE 525 PITTSBURGH PA 15222-4228
    10.20   ATHERTON CONSTRUCTION 1251 WATERFRONT PL STE 525 PITTSBURGH PA 15222-4228
    11.71   MARTHA EGGAN FBO EGGAN EXCAVATING 7439 TOWNLINE RDROME NY 13440-1450
    11.64   MASSACHUSETTS FINANCIAL SERVICES COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632

 

C - 12

 

 

FUND and CLASS NAME   PERCENTAGE
CLASS
OWNERSHIP
  NAME and ADDRESS of INVESTOR
         
MFS GLOBAL GROWTH FUND
CLASS R2    32.68   EMPOWER TRUST 8515 E ORCHARD RD 2T2 GREENWOOD VLG CO 80111-5002
    39.32   MATRIX TRUST COMPANY 717 17TH ST STE 1300 DENVER CO 80202-3304
    8.78   REALLAER LLC 717 17TH ST STE 1300 DENVER CO 80202-3304
    8.05   BLADE CHEVROLET INC 717 17TH ST STE 1300 DENVER CO 80202-3304
    14.17   ADVISOR TRUST, INC. 717 17TH ST STE 1300 DENVER CO 80202-3304
    8.58   ASCENSUS TRUST COMPANY PO BOX 10758 FARGO ND 58106-0758
    7.89   MID ATLANTIC TRUST COMPANY 1251 WATERFRONT PL STE 525 PITTSBURGH PA 15222-4228
    7.12   BIG TRUCK RENTAL LLC 1251 WATERFRONT PL STE 525 PITTSBURGH PA 15222-4228
         
MFS GLOBAL GROWTH FUND
CLASS R3    26.46   EMPOWER TRUST 8515 E ORCHARD RD 2T2 GREENWOOD VLG CO 80111-5002
    21.16   PIMS/PRUDENTIAL 440 BARELL AVE CARLSTADT NJ 07072-2889
    21.16   SHEET METAL WORKERS LOCAL 25 440 BARELL AVE CARLSTADT NJ 07072-2889
    18.99   MATRIX TRUST COMPANY 717 17TH ST STE 1300 DENVER CO 80202-3304
    18.99   CALLAHAN CREEK INC 717 17TH ST STE 1300 DENVER CO 80202-3304
    9.89   STATE STREET BANK & TRUST 1 LINCOLN ST BOSTON MA 02111-2900
    9.89   ADP ACCESS PRODUCT 1 LINCOLN ST BOSTON MA 02111-2900
    8.45   ASCENSUS TRUST COMPANY PO BOX 10758 FARGO ND 58106-0758
    8.45   JORMAC AEROSPACE INC PO BOX 10758 FARGO ND 58106-0758
    7.16   MINNESOTA LIFE INSURANCE COMPANY 400 ROBERT ST N STE A SAINT PAUL MN 55101-2099
    6.14   NATIONWIDE TRUST COMPANY PO BOX 182029 COLUMBUS OH 43218-2029
         
MFS GLOBAL GROWTH FUND
CLASS R4    71.34   NATIONWIDE LIFE INSURANCE COMPANY PO BOX 182029 COLUMBUS OH 43218-2029
    10.35   EMPOWER TRUST 8515 E ORCHARD RD 2T2 GREENWOOD VLG CO 80111-5002
    6.91   NATIONWIDE TRUST COMPANY C/O IPO ACCOUNTING PO BOX 182029 COLUMBUS OH 43218-2029
    5.85   FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS CO INC 100 MAGELLAN WAY COVINGTON KY 41015-1998
    5.85   AZRAEL, FRANZ, SCHWAB & LIPOWITZ 100 MAGELLAN WAY COVINGTON KY 41015-1999
         
MFS GLOBAL GROWTH FUND
CLASS R6    80.71   EDWARD D JONES & CO 12555 MANCHESTER RD SAINT LOUIS MO 63131-3710
    5.82   EMPOWER TRUST 8515 E ORCHARD RD 2T2 GREENWOOD VLG CO 80111-5002

 

C - 13

 

 

FUND and CLASS NAME   PERCENTAGE
CLASS
OWNERSHIP
  NAME and ADDRESS of INVESTOR
         
MFS GLOBAL TOTAL RETURN FUND
CLASS A   40.17   EDWARD D JONES & CO 12555 MANCHESTER RD SAINT LOUIS MO 63131-3710
    8.47   MERRILL LYNCH PIERCE FENNER & SMITH INC 4800 DEER LAKE DR E JACKSONVILLE FL 32246-6484
    5.55   MORGAN STANLEY SMITH BARNEY 1 NEW YORK PLAZA FL 12 NEW YORK NY 10004-1965
    5.14   NATIONAL FINANCIAL SERVICES LLC 499 WASHINGTON BLVD JERSEY CITY NJ 07310-1995
    10.88   MFS HERITAGE TRUST COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632
         
MFS GLOBAL TOTAL RETURN FUND
CLASS B    14.52   LPL FINANCIAL 4707 EXECUTIVE DR SAN DIEGO CA 92121-3091
    12.19   NATIONAL FINANCIAL SERVICES LLC 499 WASHINGTON BLVD JERSEY CITY NJ 07310-1995
    10.23   MORGAN STANLEY SMITH BARNEY 1 NEW YORK PLAZA FL 12 NEW YORK NY 10004-1965
    7.62   LINCOLN INVESTMENT PLANNING LLC 601 OFFICE CENTER DR STE 300 FT WASHINGTON PA 19034-3275
    6.81   AMERICAN ENTERPRISE INVESTMENT 707 2ND AVE S MINNEAPOLIS MN 55402-2405
    26.04   MFS HERITAGE TRUST COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632
         
MFS GLOBAL TOTAL RETURN FUND
CLASS C    14.30   AMERICAN ENTERPRISE INVESTMENT 707 2ND AVE S MINNEAPOLIS MN 55402-2405
    13.04   WELLS FARGO CLEARING SERVICES LLC 2801 MARKET ST SAINT LOUIS MO 63103-2523
    8.45   LPL FINANCIAL 4707 EXECUTIVE DR SAN DIEGO CA 92121-3091
    8.34   MORGAN STANLEY SMITH BARNEY 1 NEW YORK PLAZA FL 12 NEW YORK NY 10004-1965
    8.16   PERSHING LLC 1 PERSHING PLZ JERSEY CITY NJ 07399-0002
    7.38   EDWARD D JONES & CO 12555 MANCHESTER RD SAINT LOUIS MO 63131-3710
    6.73   NATIONAL FINANCIAL SERVICES LLC 499 WASHINGTON BLVD JERSEY CITY NJ 07310-1995
    6.49   RAYMOND JAMES 880 CARILLON PKWY ST PETERSBURG FL 33716-1102
    8.55   MFS HERITAGE TRUST COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632

 

C - 14

 

 

FUND and CLASS NAME   PERCENTAGE
CLASS
OWNERSHIP
  NAME and ADDRESS of INVESTOR
         
MFS GLOBAL TOTAL RETURN FUND
CLASS I    21.35   LPL FINANCIAL 4707 EXECUTIVE DR SAN DIEGO CA 92121-3091
    13.03   MERRILL LYNCH PIERCE FENNER & SMITH INC 4800 DEER LAKE DR E JACKSONVILLE FL 32246-6484
    10.51   UBS WM USA 1000 HARBOR BLVD FL 6 WEEHAWKEN NJ 07086-6761
    9.23   CHARLES SCHWAB & CO INC 211 MAIN ST SAN FRANCISCO CA 94105-1901
    8.38   NATIONAL FINANCIAL SERVICES LLC 499 WASHINGTON BLVD JERSEY CITY NJ 07310-1995
    7.90   RAYMOND JAMES 880 CARILLON PKWY ST PETERSBURG FL 33716-1102
    6.69   AMERICAN ENTERPRISE INVESTMENT 707 2ND AVE S MINNEAPOLIS MN 55402-2405
    6.58   MORGAN STANLEY SMITH BARNEY 1 NEW YORK PLAZA FL 12 NEW YORK NY 10004-1965
         
MFS GLOBAL TOTAL RETURN FUND
CLASS R1    75.38   MID ATLANTIC TRUST COMPANY 1251 WATERFRONT PL STE 525 PITTSBURGH PA 15222-4228
    40.24   HOMETECH ADVANCED THERAPIES 1251 WATERFRONT PL STE 525 PITTSBURGH PA 15222-4228
    24.08   SUPERIOR BIOLOGICS INC 1251 WATERFRONT PL STE 525 PITTSBURGH PA 15222-4228
    9.43   CHAMPIONS FOOD INC 1251 WATERFRONT PL STE 525 PITTSBURGH PA 15222-4228
    16.92   EMPOWER TRUST 8515 E ORCHARD RD 2T2 GREENWOOD VLG CO 80111-5002
         
MFS GLOBAL TOTAL RETURN FUND
CLASS R2    21.66   MID ATLANTIC TRUST COMPANY 1251 WATERFRONT PL STE 525 PITTSBURGH PA 15222-4228
    6.80   RMS GRAPHICS INC. 1251 WATERFRONT PL STE 525 PITTSBURGH PA 15222-4228
    6.66   MAJESTIC DISTRIBUTORS INC 1251 WATERFRONT PL STE 525 PITTSBURGH PA 15222-4228
    18.37   VOYA RETIREMENT INS & ANNUITY CO 1 ORANGE WAY B3N WINDSOR CT 06095-4773
    15.57   EMPOWER TRUST 8515 E ORCHARD RD 2T2 GREENWOOD VLG CO 80111-5002
    9.47   MATRIX TRUST COMPANY 717 17TH ST STE 1300 DENVER CO 80202-3304
    6.55   ADMERASIA 717 17TH ST STE 1300 DENVER CO 80202-3304
    7.61   MERRILL LYNCH PIERCE FENNER & SMITH INC 4800 DEER LAKE DR E JACKSONVILLE FL 32246-6484
    5.76   STATE STREET BANK & TRUST 1 LINCOLN ST BOSTON MA 02111-2900
    5.76   ADP ACCESS PRODUCT 1 LINCOLN ST BOSTON MA 02111-2900

 

C - 15

 

 

FUND and CLASS NAME   PERCENTAGE
CLASS
OWNERSHIP
  NAME and ADDRESS of INVESTOR
         
MFS GLOBAL TOTAL RETURN FUND
CLASS R3    39.43   EMPOWER TRUST 8515 E ORCHARD RD 2T2 GREENWOOD VLG CO 80111-5002
    16.89   NATIONAL FINANCIAL SERVICES LLC 499 WASHINGTON BLVD JERSEY CITY NJ 07310-1995
    16.00   DCGT PLIC VARIOUS RETIREMENT PLANS ATTN NPIO TRADE DESK 711 HIGH ST DES MOINES IA 50392-0001
    12.55   STATE STREET BANK & TRUST 1 LINCOLN ST BOSTON MA 02111-2900
    12.55   ADP ACCESS PRODUCT 1 LINCOLN ST BOSTON MA 02111-290
    7.25   ASCENSUS TRUST COMPANY PO BOX 10758 FARGO ND 58106-0758
    5.86   FIRE ETC PO BOX 10758 FARGO ND 58106-0758
    5.58   FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS CO INC 100 MAGELLAN WAY COVINGTON KY 41015-1999
         
MFS GLOBAL TOTAL RETURN FUND
CLASS R4    66.30   FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS CO INC 100 MAGELLAN WAY COVINGTON KY 41015-1999
    35.54   WISLER PEARLSTINE, LLP 100 MAGELLAN WAY COVINGTON KY 41015-1999
    25.14   IMPERIAL BAG & PAPER CO LLC 100 MAGELLAN WAY COVINGTON KY 41015-1999
    13.48   NATIONAL FINANCIAL SERVICES LLC 499 WASHINGTON BLVD JERSEY CITY NJ 07310-1995
    5.06   RELIANCE TRUST COMPANY 201 17TH ST NW STE 1000 ATLANTA GA 30363-1195
    5.06   ADP ACCESS LARGE MARKET 201 17TH ST NW STE 1000 ATLANTA GA 30363-1195
         
MFS GLOBAL TOTAL RETURN FUND
CLASS R6    68.21   EDWARD D JONES & CO 12555 MANCHESTER RD SAINT LOUIS MO 63131-3710
    17.28   MERRILL LYNCH PIERCE FENNER & SMITH INC 4800 DEER LAKE DR E JACKSONVILLE FL 32246-6484
         
MFS INCOME FUND        
CLASS A    54.79   EDWARD D JONES & CO 12555 MANCHESTER RD SAINT LOUIS MO 63131-3710
    8.26   LPL FINANCIAL 4707 EXECUTIVE DR SAN DIEGO CA 92121-3091
    7.32   MFS HERITAGE TRUST COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632

 

C - 16

 

 

FUND and CLASS NAME   PERCENTAGE
CLASS
OWNERSHIP
  NAME and ADDRESS of INVESTOR
         
MFS INCOME FUND        
CLASS B    21.45   AMERICAN ENTERPRISE INVESTMENT 707 2ND AVE S MINNEAPOLIS MN 55402-2405
    16.12   NATIONAL FINANCIAL SERVICES LLC 499 WASHINGTON BLVD JERSEY CITY NJ 07310-1995
    9.73   LPL FINANCIAL 4707 EXECUTIVE DR SAN DIEGO CA 92121-3091
    5.49   PERSHING LLC 1 PERSHING PLZ JERSEY CITY NJ 07399-0002
    31.39   MFS HERITAGE TRUST COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632
         
MFS INCOME FUND        
CLASS C    16.11   AMERICAN ENTERPRISE INVESTMENT 707 2ND AVE S MINNEAPOLIS MN 55402-2405
    14.47   WELLS FARGO CLEARING SERVICES LLC 2801 MARKET ST SAINT LOUIS MO 63103-2523
    11.02   PERSHING LLC 1 PERSHING PLZ JERSEY CITY NJ 07399-0002
    10.33   LPL FINANCIAL 4707 EXECUTIVE DR SAN DIEGO CA 92121-3091
    8.85   NATIONAL FINANCIAL SERVICES LLC 499 WASHINGTON BLVD JERSEY CITY NJ 07310-1995
    8.36   RAYMOND JAMES 880 CARILLON PKWY ST PETERSBURG FL 33716-1102
    7.37   EDWARD D JONES & CO 12555 MANCHESTER RD SAINT LOUIS MO 63131-3710
    11.48   MFS HERITAGE TRUST COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632
         
MFS INCOME FUND        
CLASS I    24.73   AMERICAN ENTERPRISE INVESTMENT 707 2ND AVE S MINNEAPOLIS MN 55402-2405
    22.52   LPL FINANCIAL 4707 EXECUTIVE DR SAN DIEGO CA 92121-3091
    11.21   PERSHING LLC 1 PERSHING PLZ JERSEY CITY NJ 07399-0002
    9.54   RAYMOND JAMES 880 CARILLON PKWY ST PETERSBURG FL 33716-1102
    7.51   NATIONAL FINANCIAL SERVICES LLC 499 WASHINGTON BLVD JERSEY CITY NJ 07310-1995
    5.92   TD AMERITRADE INC PO BOX 2226 OMAHA NE 68103-2226
    5.51   WELLS FARGO CLEARING SERVICES LLC 2801 MARKET ST SAINT LOUIS MO 63103-2523
         
MFS INCOME FUND        
CLASS R6    94.34   EDWARD D JONES & CO 12555 MANCHESTER RD SAINT LOUIS MO 63131-3710
         
MFS INFLATION-ADJUSTED BOND FUND
CLASS A    56.38   EDWARD D JONES & CO 12555 MANCHESTER RD SAINT LOUIS MO 63131-3710
    7.03   PERSHING LLC 1 PERSHING PLZ JERSEY CITY NJ 07399-0002
    6.39   LPL FINANCIAL 4707 EXECUTIVE DR SAN DIEGO CA 92121-3091
    10.76   MFS HERITAGE TRUST COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632

 

C - 17

 

 

FUND and CLASS NAME   PERCENTAGE
CLASS
OWNERSHIP
  NAME and ADDRESS of INVESTOR
         
MFS INFLATION-ADJUSTED BOND FUND
CLASS B    17.47   NATIONAL FINANCIAL SERVICES LLC 499 WASHINGTON BLVD JERSEY CITY NJ 07310-1995
    8.80   PERSHING LLC 1 PERSHING PLZ JERSEY CITY NJ 07399-0002
    7.33   AMERICAN ENTERPRISE INVESTMENT 707 2ND AVE S MINNEAPOLIS MN 55402-2405
    6.14   CHARLES SCHWAB & CO INC 211 MAIN ST SAN FRANCISCO CA 94105-1901
    5.32   JULIE MYER 706 SNELL RD GENEVA NY 14456-9704
    45.13   MFS HERITAGE TRUST COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632
         
MFS INFLATION-ADJUSTED BOND FUND
CLASS C    28.19   PERSHING LLC 1 PERSHING PLZ JERSEY CITY NJ 07399-0002
    8.50   LPL FINANCIAL 4707 EXECUTIVE DR SAN DIEGO CA 92121-3091
    8.32   NANCY A GIOFFREDI PO BOX 69 LANDENBERG PA 19350-0069
    6.92   GEORGE A LANCIAULT 2447 E PARRIS DR WILMINGTON DE 19808-4522
    6.67   NATIONAL FINANCIAL SERVICES LLC 499 WASHINGTON BLVD JERSEY CITY NJ 07310-1995
    5.50   WELLS FARGO CLEARING SERVICES LLC 2801 MARKET ST SAINT LOUIS MO 63103-2523
    37.04   MFS HERITAGE TRUST COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632
         
MFS INFLATION-ADJUSTED BOND FUND
CLASS I    58.10   TD AMERITRADE INC PO BOX 2226 OMAHA NE 68103-2226
    14.87   PERSHING LLC 1 PERSHING PLZ JERSEY CITY NJ 07399-0002
    8.92   MASSACHUSETTS FINANCIAL SERVICES COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632
         
MFS INFLATION-ADJUSTED BOND FUND
CLASS R1    46.31   ASCENSUS TRUST COMPANY PO BOX 10758 FARGO ND 58106-0758
    46.31   YCC PRODUCTS PO BOX 10758 FARGO ND 58106-0758
    28.12   EMPOWER TRUST 8515 E ORCHARD RD 2T2 GREENWOOD VLG CO 80111-5002
    17.96   MATRIX TRUST COMPANY 717 17TH ST STE 1300 DENVER CO 80202-3304
    17.96   ADVISOR TRUST, INC. 717 17TH ST STE 1300 DENVER CO 80202-3304
    7.45   JASPER-TROUPSBURG CS (NY) 717 17TH ST STE 1300 DENVER CO 80202-3304
    7.07   ARKPORT CSD (NY) 717 17TH ST STE 1300 DENVER CO 80202-3304
    5.95   MASSACHUSETTS FINANCIAL SERVICES COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632

 

C - 18

 

 

FUND and CLASS NAME   PERCENTAGE
CLASS
OWNERSHIP
  NAME and ADDRESS of INVESTOR
         
MFS INFLATION-ADJUSTED BOND FUND
CLASS R2    17.22   NATIONAL FINANCIAL SERVICES LLC 499 WASHINGTON BLVD JERSEY CITY NJ 07310-1995
    16.24   CHARLES SCHWAB TRUST BANK CUST ESOCO ORRINGTON LLC PLAN 2423 E LINCOLN DR # 200038 PHOENIX AZ 85016-1215
    15.42   EMPOWER TRUST 8515 E ORCHARD RD 2T2 GREENWOOD VLG CO 80111-5002
    14.71   THERESA FULTON NATURE SOURCE IMPROVED PLANTS 33 THORNWOOD DR ITHACA NY 14850-1279
    8.52   KENNETH J DETMER FBO TRUSTEE SUMMIT INDUSTRIES C/O FASCORE LLC 8515 E ORCHARD RD # 2T2 GREENWOOD VLG CO 80111-5002
    8.11   MATRIX TRUST COMPANY 717 17TH ST STE 1300 DENVER CO 80202-3304
    8.11   ADVISOR TRUST INC 717 17TH ST STE 1300 DENVER CO 80202-3304
    6.28   ASCENSUS TRUST COMPANY PO BOX 10758 FARGO ND 58106-0757
    6.28   COST EFFECTIVE COMPUTER SYSTEMS PO BOX 10758 FARGO ND 58106-0758
    5.23   MID ATLANTIC TRUST COMPANY 1251 WATERFRONT PL STE 525 PITTSBURGH PA 15222-4228
         
MFS INFLATION-ADJUSTED BOND FUND
CLASS R3    34.28   EMPOWER TRUST 8515 E ORCHARD RD 2T2 GREENWOOD VLG CO 80111-5002
    28.62   CHARLES SCHWAB & CO INC 211 MAIN ST SAN FRANCISCO CA 94105-1901
    15.99   CHARLES SCHWAB TRUST BANK 2423 E LINCOLN DR PHOENIX AZ 85016-1215
    15.99   DE MAXIMIS INC 2423 E LINCOLN DR PHOENIX AZ 85016-1215
    10.85   MID ATLANTIC TRUST COMPANY 1251 WATERFRONT PL STE 525 PITTSBURGH PA 15222-4228
    6.31   SBS CREATIX, LLC. 1251 WATERFRONT PL STE 525 PITTSBURGH PA 15222-4228
         
MFS INFLATION-ADJUSTED BOND FUND
CLASS R4    65.90   MASSACHUSETTS FINANCIAL SERVICES COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632
    32.93   MID ATLANTIC TRUST COMPANY 1251 WATERFRONT PL STE 525 PITTSBURGH PA 15222-4228
    31.09   COUNTRYSIDE DENTAL 1251 WATERFRONT PL STE 525 PITTSBURGH PA 15222-4228

 

C - 19

 

 

FUND and CLASS NAME   PERCENTAGE
CLASS
OWNERSHIP
  NAME and ADDRESS of INVESTOR
         
MFS INFLATION-ADJUSTED BOND FUND
CLASS R6    80.65   STATE STREET BANK1 200 NEWPORT AVENUE EXT NORTH QUINCY MA 02171-2102
    31.81   MFS MODERATE ALLOCATION FUND 200 NEWPORT AVENUE EXT NORTH QUINCY MA 02171-2102
    27.72   MFS CONSERVATIVE ALLOCATION FUND 200 NEWPORT AVENUE EXT NORTH QUINCY MA 02171-2102
    21.12   MFS GROWTH ALLOCATION FUND 200 NEWPORT AVENUE EXT NORTH QUINCY MA 02171-2102
         
MFS UTILITIES FUND        
CLASS A    13.62   EDWARD D JONES & CO 12555 MANCHESTER RD SAINT LOUIS MO 63131-3710
    8.74   PERSHING LLC 1 PERSHING PLZ JERSEY CITY NJ 07399-0002
    8.64   NATIONAL FINANCIAL SERVICES LLC 499 WASHINGTON BLVD JERSEY CITY NJ 07310-1995
    8.48   MORGAN STANLEY SMITH BARNEY 1 NEW YORK PLAZA FL 12 NEW YORK NY 10004-1965
    6.63   LPL FINANCIAL 4707 EXECUTIVE DR SAN DIEGO CA 92121-3091
    14.51   MFS HERITAGE TRUST COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632
         
MFS UTILITIES FUND        
CLASS B    16.69   PERSHING LLC 1 PERSHING PLZ JERSEY CITY NJ 07399-0002
    10.25   AMERICAN ENTERPRISE INVESTMENT 707 2ND AVE S MINNEAPOLIS MN 55402-2405
    6.55   NATIONAL FINANCIAL SERVICES LLC 499 WASHINGTON BLVD JERSEY CITY NJ 07310-1995
    33.71   MFS HERITAGE TRUST COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632

 

C - 20

 

 

FUND and CLASS NAME   PERCENTAGE
CLASS
OWNERSHIP
  NAME and ADDRESS of INVESTOR
         
MFS UTILITIES FUND        
CLASS C    16.57   PERSHING LLC 1 PERSHING PLZ JERSEY CITY NJ 07399-0002
    10.37   MORGAN STANLEY SMITH BARNEY 1 NEW YORK PLAZA FL 12 NEW YORK NY 10004-1965
    9.71   NATIONAL FINANCIAL SERVICES LLC 499 WASHINGTON BLVD JERSEY CITY NJ 07310-1995
    8.97   LPL FINANCIAL 4707 EXECUTIVE DR SAN DIEGO CA 92121-3091
    8.23   WELLS FARGO CLEARING SERVICES LLC 2801 MARKET ST SAINT LOUIS MO 63103-2523
    7.33   AMERICAN ENTERPRISE INVESTMENT 707 2ND AVE S MINNEAPOLIS MN 55402-2405
    6.85   RAYMOND JAMES 880 CARILLON PKWY ST PETERSBURG FL 33716-1102
    11.74   MFS HERITAGE TRUST COMPANY 111 HUNTINGTON AVENUE BOSTON MA 02199-7632
         
MFS UTILITIES FUND        
CLASS I    13.43   AMERICAN ENTERPRISE INVESTMENT 707 2ND AVE S MINNEAPOLIS MN 55402-2405
    12.98   MORGAN STANLEY SMITH BARNEY 1 NEW YORK PLAZA FL 12 NEW YORK NY 10004-1965
    12.18   NATIONAL FINANCIAL SERVICES LLC 499 WASHINGTON BLVD JERSEY CITY NJ 07310-1995
    12.02   LPL FINANCIAL 4707 EXECUTIVE DR SAN DIEGO CA 92121-3091
    9.00   MERRILL LYNCH PIERCE FENNER & SMITH INC 4800 DEER LAKE DR E JACKSONVILLE FL 32246-6484
    7.89   PERSHING LLC 1 PERSHING PLZ JERSEY CITY NJ 07399-0002
    5.30   RAYMOND JAMES 880 CARILLON PKWY ST PETERSBURG FL 33716-1102
    5.04   CHARLES SCHWAB & CO INC 101 MONTGOMERY ST SAN FRANCISCO CA 94104-4151
         
MFS UTILITIES FUND        
CLASS R1    27.94   EQUITABLE LIFE 500 PLAZA DR SECAUCUS NJ 07094-3619
    18.12   MID ATLANTIC TRUST COMPANY 1251 WATERFRONT PL STE 525 PITTSBURGH PA 15222-4227
    8.24   OAKTREE FUNDING CORP 1251 WATERFRONT PL STE 525 PITTSBURGH PA 15222-4228
    16.39   EMPOWER TRUST 8515 E ORCHARD RD 2T2 GREENWOOD VLG CO 80111-5002
    9.57   NATIONWIDE TRUST COMPANY PO BOX 182029 COLUMBUS OH 43218-2029
    6.34   DCGT 711 HIGH ST DES MOINES IA 50392-0001
    5.45   MATRIX TRUST COMPANY 717 17TH ST STE 1300 DENVER CO 80202-3304
    5.45   ADVISOR TRUST, INC. 717 17TH ST STE 1300 DENVER CO 80202-3304
         
MFS UTILITIES FUND        
CLASS R2    21.16   TALCOTT RESOLUTION LIFE INSURANCE PO BOX 5051 HARTFORD CT 06102-5051
    18.03   EMPOWER TRUST 8515 E ORCHARD RD 2T2 GREENWOOD VLG CO 80111-5002
    12.77   LINCOLN RETIREMENT SERVICES CO FULTON CNTY SCH 403B PO BOX 7876 FORT WAYNE IN 46801-7876
    12.62   MASSACHUSETTS MUTUAL LIFE INSURANCE 1295 STATE STREET SPRINGFIELD MA 01111-0001
    5.11   AMERICAN UNITED LIFE PO BOX 368 INDIANAPOLISI N 46206-0368

 

C - 21

 

 

FUND and CLASS NAME   PERCENTAGE
CLASS
OWNERSHIP
  NAME and ADDRESS of INVESTOR
         
MFS UTILITIES FUND        
CLASS R3    70.43   JOHN HANCOCK LIFE INSURANCE COMPANY USA 200 BERKELEY ST BOSTON MA 02116-5023
    5.25   NATIONAL FINANCIAL SERVICES LLC 499 WASHINGTON BLVD JERSEY CITY NJ 07310-1995
         
MFS UTILITIES FUND        
CLASS R4    24.96   NATIONWIDE TRUST COMPANY PO BOX 182029 COLUMBUS OH 43218-2029
    12.93   EMPOWER TRUST 8515 E ORCHARD RD 2T2 GREENWOOD VLG CO 80111-5002
    9.77   NATIONAL FINANCIAL SERVICES LLC 499 WASHINGTON BLVD JERSEY CITY NJ 07310-1995
    7.92   FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS CO INC 100 MAGELLAN WAY COVINGTON KY 41015-1999
    7.19   MERRILL LYNCH PIERCE FENNER & SMITH INC 4800 DEER LAKE DR E JACKSONVILLE FL 32246-6484
    5.80   ICMA RETIREMENT CORPORATION CITY OF MANCHESTER 777 N CAPITOL ST NE WASHINGTON DC 20002-4239
    5.80   CITY OF MANCHESTER 777 N CAPITOL ST NE WASHINGTON DC 20002-4239
         
MFS UTILITIES FUND        
CLASS R6    25.05   NATIONAL FINANCIAL SERVICES LLC 499 WASHINGTON BLVD JERSEY CITY NJ 07310-1995
    12.79   MERRILL LYNCH PIERCE FENNER & SMITH INC 4800 DEER LAKE DR E JACKSONVILLE FL 32246-6484
    8.46   EMPOWER TRUST 8515 E ORCHARD RD 2T2 GREENWOOD VLG CO 80111-5002
    7.18   VOYA RETIREMENT INS & ANNUITY CO 1 ORANGE WAY B3N WINDSOR CT 06095-4773
    7.15   EDWARD D JONES & CO 12555 MANCHESTER RD SAINT LOUIS MO 63131-3710
    5.10   DCGT 711 HIGH ST DES MOINES IA 50392-0001

 

 

1 State Street Bank is the record owner of shares of the Fund on behalf of certain investment companies advised by MFS.

 

C - 22

 

 

APPENDIX D - PORTFOLIO MANAGER(S)

 

Compensation

 

MFS’ ph