N-Q 1 dnq.htm MFS SERIES TRUST II N-Q MFS SERIES TRUST II N-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF

REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-4775

MFS SERIES TRUST II

(Exact name of registrant as specified in charter)

500 Boylston Street, Boston, Massachusetts 02116

(Address of principal executive offices) (Zip code)

Susan S. Newton

Massachusetts Financial Services Company

500 Boylston Street

Boston, Massachusetts 02116

(Name and address of agents for service)

Registrant’s telephone number, including area code: (617) 954-5000

Date of fiscal year end: November 30

Date of reporting period: August 31, 2009

 


ITEM 1. SCHEDULE OF INVESTMENTS.


LOGO


MFS Growth Fund

PORTFOLIO OF INVESTMENTS (Unaudited) 8/31/09

 

Issuer

   Shares/Par    Value ($)

Common Stocks – 97.6%

     

Aerospace – 1.1%

     

Goodrich Corp.

   198,810    $ 10,966,360

Lockheed Martin Corp.

   116,000      8,697,680
         
      $ 19,664,040
         

Apparel Manufacturers – 0.9%

     

Coach, Inc.

   357,860    $ 10,123,859

NIKE, Inc., “B”

   123,549      6,843,379
         
      $ 16,967,238
         

Biotechnology – 2.9%

     

Celgene Corp. (a)

   277,370    $ 14,470,393

Genzyme Corp. (a)

   275,470      15,346,434

Gilead Sciences, Inc. (a)

   411,830      18,557,060

Human Genome Sciences, Inc. (a)

   183,470      3,629,037
         
      $ 52,002,924
         

Broadcasting – 0.3%

     

Discovery Communications, Inc., “A” (a)

   182,500    $ 4,730,400
         

Brokerage & Asset Managers – 3.2%

     

Affiliated Managers Group, Inc. (a)

   256,350    $ 16,747,346

BM&F BOVESPA S.A.

   1,300,300      8,016,918

Charles Schwab Corp.

   373,620      6,747,577

CME Group, Inc.

   91,360      26,589,414
         
      $ 58,101,255
         

Business Services – 4.3%

     

Cognizant Technology Solutions Corp., “A” (a)

   497,790    $ 17,362,915

Companhia Brasileira De Meios De Pagamento

   205,420      1,791,853

MasterCard, Inc., “A”

   91,630      18,566,987

Visa, Inc., “A”

   406,160      28,877,976

Western Union Co.

   705,450      12,726,318
         
      $ 79,326,049
         

Chemicals – 0.8%

     

Ecolab, Inc.

   191,550    $ 8,100,650

Monsanto Co.

   68,400      5,737,392
         
      $ 13,838,042
         

Computer Software – 4.7%

     

Adobe Systems, Inc. (a)

   985,790    $ 30,973,522

Autodesk, Inc. (a)

   518,540      12,149,392

Citrix Systems, Inc. (a)

   455,610      16,256,165

Oracle Corp.

   440,410      9,631,767

VeriSign, Inc. (a)

   794,736      16,840,456
         
      $ 85,851,302
         

Computer Software - Systems – 7.3%

     

Apple, Inc. (a) (s)

   381,740    $ 64,212,485

EMC Corp. (a)

   319,900      5,086,410

Hewlett-Packard Co.

   1,146,480      51,465,487

Mercadolibre, Inc. (a)

   177,100      5,573,337

VMware, Inc. (a)

   170,550      6,042,587
         
      $ 132,380,306
         

Consumer Products – 2.3%

     

Colgate-Palmolive Co.

   324,020    $ 23,556,254

Natura Cosméticos S.A.

   621,680      10,057,316

Procter & Gamble Co.

   159,230      8,615,935
         
      $ 42,229,505
         

 

1


MFS Growth Fund

PORTFOLIO OF INVESTMENTS (Unaudited) 8/31/09 - continued

 

Issuer

   Shares/Par    Value ($)

Common Stocks – continued

     

Consumer Services – 2.9%

     

Alibaba.com Corp. (z)

   2,110,000    $ 5,237,941

Capella Education Co. (a)

   128,144      8,117,922

Monster Worldwide, Inc. (a)

   394,270      6,395,059

priceline.com, Inc. (a)

   116,600      17,954,068

Strayer Education, Inc.

   68,180      14,392,798
         
      $ 52,097,788
         

Containers – 0.7%

     

Owens-Illinois, Inc. (a)

   393,040    $ 13,339,778
         

Electrical Equipment – 3.5%

     

Danaher Corp.

   637,790    $ 38,720,231

Rockwell Automation, Inc.

   273,780      11,457,693

Tyco Electronics Ltd.

   617,970      14,102,075
         
      $ 64,279,999
         

Electronics – 6.3%

     

ARM Holdings PLC

   2,242,113    $ 4,767,448

First Solar, Inc. (a)

   33,560      4,080,225

Flextronics International Ltd. (a)

   2,342,810      13,892,863

Hittite Microwave Corp. (a)

   219,156      7,543,350

Intel Corp.

   1,064,430      21,629,218

Lam Research Corp. (a)

   175,360      5,383,552

Linear Technology Corp.

   405,820      10,782,637

Marvell Technology Group Ltd. (a)

   642,990      9,805,598

MEMC Electronic Materials, Inc. (a)

   532,600      8,494,970

National Semiconductor Corp.

   458,750      6,959,238

Samsung Electronics Co. Ltd.

   36,356      22,444,132
         
      $ 115,783,231
         

Energy - Independent – 3.1%

     

Anadarko Petroleum Corp.

   414,140    $ 21,895,582

Apache Corp.

   119,180      10,124,341

Noble Energy, Inc.

   269,710      16,306,667

Plains Exploration & Production Co. (a)

   301,220      7,907,025
         
      $ 56,233,615
         

Energy - Integrated – 1.0%

     

Chevron Corp.

   126,430    $ 8,842,514

Petroleo Brasileiro S.A., ADR

   253,070      10,031,695
         
      $ 18,874,209
         

Engineering - Construction – 0.5%

     

Fluor Corp.

   188,770    $ 9,985,933
         

Entertainment – 2.8%

     

DreamWorks Animation, Inc., “A” (a)

   915,940    $ 30,922,134

TiVo, Inc. (a)

   2,010,570      19,723,692
         
      $ 50,645,826
         

Food & Beverages – 1.8%

     

Coca-Cola Co.

   393,220    $ 19,177,339

PepsiCo, Inc.

   244,150      13,835,981
         
      $ 33,013,320
         

Food & Drug Stores – 1.2%

     

CVS Caremark Corp.

   252,060    $ 9,457,291

Walgreen Co.

   380,080      12,877,110
         
      $ 22,334,401
         

Gaming & Lodging – 2.9%

     

Carnival Corp.

   259,150    $ 7,580,138

 

2


MFS Growth Fund

PORTFOLIO OF INVESTMENTS (Unaudited) 8/31/09 - continued

 

Issuer

   Shares/Par    Value ($)

Common Stocks – continued

     

Gaming & Lodging – continued

     

International Game Technology

   689,730    $ 14,429,152

Las Vegas Sands Corp. (a)

   194,400      2,772,144

Melco PBL Entertainment (Macau) Ltd., ADR (a)

   294,570      1,805,714

Penn National Gaming, Inc. (a)

   130,840      3,821,836

Royal Caribbean Cruises Ltd.

   645,140      12,309,271

Starwood Hotels & Resorts Worldwide, Inc.

   314,030      9,351,813
         
      $ 52,070,068
         

General Merchandise – 1.9%

     

Kohl’s Corp. (a)

   122,340    $ 6,311,521

Target Corp.

   390,400      18,348,800

Wal-Mart Stores, Inc.

   201,420      10,246,235
         
      $ 34,906,556
         

Health Maintenance Organizations – 0.4%

     

WellPoint, Inc. (a)

   148,950    $ 7,872,008
         

Insurance – 0.7%

     

Berkshire Hathaway, Inc., “B” (a)

   2,160    $ 7,097,760

Hartford Financial Services Group, Inc.

   268,500      6,368,820
         
      $ 13,466,580
         

Internet – 4.1%

     

Google, Inc., “A” (a)

   137,470    $ 63,465,775

Omniture, Inc. (a)

   253,780      3,631,592

Tencent Holdings Ltd.

   474,200      7,054,463
         
      $ 74,151,830
         

Leisure & Toys – 0.5%

     

THQ, Inc. (a)

   1,728,960    $ 9,526,570
         

Major Banks – 3.4%

     

Bank of America Corp.

   1,225,920    $ 21,563,933

Goldman Sachs Group, Inc.

   99,980      16,542,691

Morgan Stanley

   237,420      6,875,683

State Street Corp.

   310,740      16,307,635
         
      $ 61,289,942
         

Medical & Health Technology & Services – 4.4%

     

Cerner Corp. (a)

   122,800    $ 7,577,988

Express Scripts, Inc. (a)

   453,990      32,787,158

IDEXX Laboratories, Inc. (a)

   333,180      16,912,217

Medco Health Solutions, Inc. (a)

   421,220      23,259,768
         
      $ 80,537,131
         

Medical Equipment – 3.8%

     

Baxter International, Inc.

   166,050    $ 9,451,566

Becton, Dickinson & Co.

   89,950      6,262,319

Conceptus, Inc. (a)

   1,024,130      18,557,236

DENTSPLY International, Inc.

   206,300      6,954,373

Edwards Lifesciences Corp. (a)

   83,860      5,189,257

St. Jude Medical, Inc. (a)

   611,670      23,573,762
         
      $ 69,988,513
         

Metals & Mining – 0.7%

     

BHP Billiton Ltd., ADR

   214,130    $ 13,340,299
         

Network & Telecom – 2.8%

     

Cisco Systems, Inc. (a)

   2,344,050    $ 50,631,480
         

Oil Services – 2.5%

     

Halliburton Co.

   446,340    $ 10,582,721

Noble Corp.

   468,489      16,411,170

 

3


MFS Growth Fund

PORTFOLIO OF INVESTMENTS (Unaudited) 8/31/09 - continued

 

Issuer

   Shares/Par    Value ($)

Common Stocks – continued

     

Oil Services – continued

     

Transocean, Inc. (a)

   242,610    $ 18,399,542
         
      $ 45,393,433
         

Personal Computers & Peripherals – 0.3%

     

Nuance Communications, Inc. (a)

   396,260    $ 4,885,886
         

Pharmaceuticals – 4.0%

     

Abbott Laboratories

   482,840    $ 21,838,853

Schering-Plough Corp.

   669,290      18,860,592

Teva Pharmaceutical Industries Ltd., ADR

   365,820      18,839,730

Wyeth

   284,810      13,628,159
         
      $ 73,167,334
         

Precious Metals & Minerals – 1.1%

     

Agnico-Eagle Mines Ltd.

   93,240    $ 5,351,976

Goldcorp, Inc.

   241,830      8,817,122

Teck Resources Ltd., “B” (a)

   270,150      6,499,809
         
      $ 20,668,907
         

Printing & Publishing – 0.7%

     

MSCI, Inc., “A” (a)

   450,470    $ 13,252,827
         

Railroad & Shipping – 0.4%

     

Union Pacific Corp.

   128,660    $ 7,695,155
         

Specialty Chemicals – 1.6%

     

Air Products & Chemicals, Inc.

   114,730    $ 8,608,192

Praxair, Inc.

   273,670      20,968,595
         
      $ 29,576,787
         

Specialty Stores – 3.9%

     

Abercrombie & Fitch Co., “A”

   257,310    $ 8,308,540

Amazon.com, Inc. (a)

   199,620      16,207,148

Ctrip.com International Ltd., ADR (a)

   99,370      4,863,168

Home Depot, Inc.

   381,620      10,414,410

J. Crew Group, Inc. (a)

   59,700      2,035,173

Nordstrom, Inc.

   295,840      8,295,354

Staples, Inc.

   616,200      13,316,082

TJX Cos., Inc.

   222,390      7,994,921
         
      $ 71,434,796
         

Telecommunications - Wireless – 0.7%

     

America Movil S.A.B. de C.V., “L”, ADR

   291,660    $ 13,168,449
         

Telephone Services – 1.3%

     

American Tower Corp., “A” (a)

   726,168    $ 22,983,217
         

Tobacco -1.4%

     

Philip Morris International, Inc.

   543,860    $ 24,859,841
         

Trucking – 2.0%

     

Expeditors International of Washington, Inc.

   356,930    $ 11,657,334

Landstar System, Inc.

   460,140      16,045,082

Old Dominion Freight Lines, Inc. (a)

   239,090      8,554,640
         
      $ 36,257,056
         

Utilities - Electric Power – 0.5%

     

FPL Group, Inc.

   154,030    $ 8,653,405
         

Total Common Stocks

      $ 1,781,457,231
         

Issuer/Expiration Date/Strike Price

   Number
of Contracts
   Value ($)

Call Options Purchased – 0.0%

     

Century Aluminum Co. - January 2010 @ $15

   7,506    $ 788,130

 

4


MFS Growth Fund

PORTFOLIO OF INVESTMENTS (Unaudited) 8/31/09 - continued

 

Issuer

   Shares/Par    Value ($)  

Money Market Funds (v) – 2.5%

     

MFS Institutional Money Market Portfolio, 0.20%, at Net Asset Value

   45,234,468    $ 45,234,468   
           

Total Investments

      $ 1,827,479,823   
           

Other Assets, Less Liabilities – (0.1)%

        (1,808,403
           

Net Assets – 100.0%

      $ 1,825,671,420   
           

 

(a) Non-income producing security.
(s) Security or a portion of the security was pledged to cover collateral requirements for securities short. At August 31, 2009, the value of the securities pledged amounted to $176,621. At August 31, 2009, the fund had no short sales outstanding.
(v) Underlying fund that is available only to investment companies managed by MFS. The rate quoted is the annualized seven-day yield of the fund at period end.
(z) Restricted securities are not registered under the Securities Act of 1933 and are subject to legal restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are subsequently registered. Disposal of these securities may involve time-consuming negotiations and prompt sale at an acceptable price may be difficult. The fund holds the following restricted securities:

 

Restricted Securities

   Acquisition
Date
   Cost    Current
Market Value
 

Alibaba.com Corp.

   5/05/09 – 7/29/09    $ 2,924,688    $ 5,237,941   

% of Net Assets

           0.3

The following abbreviations are used in this report and are defined:

 

ADR    American Depository Receipt
PLC    Public Limited Company

See attached supplemental information. For more information see notes to financial statements as disclosed in the most recent semiannual or annual report.

 

5


MFS Growth Fund

Supplemental Information (Unaudited) 8/31/09

(1) Investment Valuations

Equity securities, including restricted equity securities, are generally valued at the last sale or official closing price as provided by a third-party pricing service on the market or exchange on which they are primarily traded. For securities for which there were no sales reported that day, equity securities are generally valued at the last quoted daily bid quotation as provided by a third-party pricing service on the market or exchange on which such securities are primarily traded. For securities held short for which there were no sales reported for that day, the position is generally valued at the last quoted daily ask quotation as provided by a third-party pricing service on the market or exchange on which such securities are primarily traded. Exchange-traded options are generally valued at the last sale or official closing price as provided by a third-party pricing service on the exchange on which such options are primarily traded. Exchange-traded options for which there were no sales reported that day are generally valued at the last daily bid quotation as provided by a third-party pricing service on the exchange on which such options are primarily traded. Options not traded on an exchange are generally valued at a broker/dealer bid quotation. Foreign currency options are generally valued using an external pricing model that uses market data from a third-party source. Open-end investment companies are generally valued at net asset value per share. 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, 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.

The Board of Trustees has delegated primary responsibility for determining or causing to be determined the value of the fund’s investments (including any fair valuation) to the adviser pursuant to valuation policies and procedures approved by the Board. If the adviser determines that reliable market quotations are not readily available, investments are valued at fair value as determined in good faith by the adviser in accordance with such procedures under the oversight of the Board of Trustees. Under the fund’s valuation policies and procedures, market quotations are not considered to be readily available for most types of debt instruments and floating rate loans and many types of derivatives. These investments are generally valued at fair value based on information from third-party pricing services. In addition, investments may be valued at fair value if the adviser determines that an investment’s value has been materially affected by events occurring after the close of the exchange or market on which the investment is principally traded (such as foreign exchange or market) and prior to the determination of the fund’s net asset value, or after the halting of trading of a specific security where trading does not resume prior to the close of the exchange or market on which the security is principally traded. Events that occur on a frequent basis after foreign markets close (such as developments in foreign markets and significant movements in the U.S. markets) and prior to the determination of the fund’s net asset value may be deemed to have a material affect on the value of securities traded in foreign markets. Accordingly, the fund’s foreign equity securities may often be valued at fair value. The adviser generally relies on third-party pricing services or other information (such as the correlation with price movements of similar securities in the same or other markets; the type, cost and investment characteristics of the security; the business and financial condition of the issuer; and trading and other market data) to assist in determining whether to fair value and at what value to fair value an investment. The value of an investment for purposes of calculating the fund’s net asset value can differ depending on the source and method used to determine value. When fair valuation is used, the value of an investment used to determine the fund’s net asset value may differ from quoted or published prices for the same investment. There can be no assurance that the fund could obtain the fair value assigned to an investment if it were to sell the investment at the same time at which the fund determines its net asset value per share.

Various inputs are used in determining the value of the fund’s assets or liabilities carried at market value. These inputs are categorized into three broad levels. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fund’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment. Level 1 includes unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 includes other significant observable market-based inputs (including quoted prices for similar securities, interest rates, prepayment speed, and credit risk). Level 3 includes unobservable inputs, which may include the adviser’s own assumptions in determining the fair value of investments. Other financial instruments are derivative instruments not reflected in total investments, such as futures, forwards, swap contracts, and written options. The following is a summary of the levels used as of August 31, 2009 in valuing the fund’s assets or liabilities carried at market value:

 

Investments at Value

   Level 1    Level 2    Level 3    Total

Equity Securities:

           

United States

   $ 1,640,157,323    $ —      $     —      $ 1,640,157,323

Brazil

     29,897,782      —        —        29,897,782

South Korea

     22,444,131      —        —        22,444,131

Canada

     20,668,907      —        —        20,668,907

Israel

     18,839,730      —        —        18,839,730

China

     17,155,571      —        —        17,155,571

Australia

     13,340,299      —        —        13,340,299

Mexico

     13,168,449      —        —        13,168,449

United Kingdom

     —        4,767,449      —        4,767,449

Hong Kong

     1,805,714      —        —        1,805,714

Mutual Funds

     45,234,468      —        —        45,234,468
                           

Total Investments

   $ 1,822,712,374    $ 4,767,449    $ —      $ 1,827,479,823
                           

For further information regarding security characteristics, see the Portfolio of Investments.

 

6


MFS Growth Fund

Supplemental Information (Unaudited) 8/31/09 - continued

(2) Portfolio Securities

The cost and unrealized appreciation and depreciation in the value of the investments owned by the fund, as computed on a federal income tax basis, are as follows:

 

Aggregate Cost

   $ 1,717,574,692   
        

Gross unrealized appreciation

   $ 230,046,478   

Gross unrealized depreciation

     (120,141,347
        

Net unrealized appreciation (depreciation)

   $ 109,905,131   
        

The aggregate cost above includes prior fiscal year end tax adjustments.

(3) Transactions in Underlying Funds-Affiliated Issuers

An affiliated issuer may be considered one in which the fund owns 5% or more of the outstanding voting securities, or a company which is under common control. For the purposes of this report, the fund assumes the following to be affiliated issuers:

 

Underlying Funds

   Beginning
Shares/Par
Amount
   Acquisitions
Shares/Par
Amount
   Dispositions
Shares/Par
Amount
    Ending
Shares/Par
Amount

MFS Institutional Money Market Portfolio

     47,614,441      345,030,148      (347,410,121     45,234,468

Underlying Funds

   Realized Gain
(Loss)
   Capital Gain
Distributions
   Dividend
Income
    Ending
Value

MFS Institutional Money Market Portfolio

   $ —      $ —      $ 122,214      $ 45,234,468

 

7


ITEM 2. CONTROLS AND PROCEDURES.

 

(a) Based upon their evaluation of the effectiveness of the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) as conducted within 90 days of the filing date of this Form N-Q, the registrant’s principal financial officer and principal executive officer have concluded that those disclosure controls and procedures provide reasonable assurance that the material information required to be disclosed by the registrant on this report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

 

(b) There were no changes in the registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

ITEM 3. EXHIBITS.

File as exhibits as part of this Form a separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2): Attached hereto.


Notice

A copy of the Amended and Restated Declaration of Trust, as amended, of the Registrant is on file with the Secretary of State of The Commonwealth of Massachusetts and notice is hereby given that this instrument is executed on behalf of the Registrant by an officer of the Registrant as an officer and not individually and the obligations of or arising out of this instrument are not binding upon any of the Trustees or shareholders individually, but are binding only upon the assets and property of the respective constituent series of the Registrant.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Registrant: MFS SERIES TRUST II

 

By (Signature and Title)*    MARIA F. DWYER
  Maria F. Dwyer, President

Date: October 16, 2009

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By (Signature and Title)*    MARIA F. DWYER
  Maria F. Dwyer, President (Principal Executive Officer)

Date: October 16, 2009

 

By (Signature and Title)*    JOHN M. CORCORAN
  John M. Corcoran, Treasurer (Principal Financial Officer and Accounting Officer)

Date: October 16, 2009

 

* Print name and title of each signing officer under his or her signature.